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: | 811-04997 | |
Exact name of registrant as specified in charter: | Delaware Group® Equity Funds V | |
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: | November 30 | |
Date of reporting period: | November 30, 2021 |
Item 1. Reports to Stockholders
Annual report | |
US equity mutual fund
Delaware Small Cap Core Fund
November 30, 2021
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.
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 Small Cap Core 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.
None of the entities noted in this document is an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia) and the obligations of these entities do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (Macquarie Bank). Macquarie Bank does not guarantee or otherwise provide assurance in respect of the obligations of these entities. In addition, if this document relates to an investment, (a) each investor is subject to investment risk including possible delays in repayment and loss of income and principal invested and (b) none of Macquarie Bank or any other Macquarie Group company guarantees any particular rate of return on or the performance of the investment, nor do they guarantee repayment of capital in respect of the investment.
The Fund is governed by US laws and regulations.
Unless otherwise noted, views expressed herein are current as of November 30, 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.
© 2022 Macquarie Management Holdings, Inc.
Portfolio management review | |
Delaware Small Cap Core Fund | December 7, 2021 (Unaudited) |
Performance preview (for the year ended November 30, 2021)
Delaware Small Cap Core Fund (Institutional Class shares) | 1-year return | +26.80 | % | ||
Delaware Small Cap Core Fund (Class A shares) | 1-year return | +26.50 | % | ||
Russell 2000® Index (benchmark) | 1-year return | +22.03 | % |
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Small Cap Core 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. 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.
Investment objective
The Fund seeks long-term capital appreciation.
Market review
Small-cap stocks performed favorably during the Fund’s fiscal year ended November 30, 2021, as quality factors and cyclical sectors were in favor. The Fund’s benchmark, the Russell 2000 Index, started the period with a strong, positive return in December 2020, the same month the US Food and Drug Administration (FDA) authorized the emergency use of two COVID-19 vaccines. In response to the economic effects of the COVID-19 pandemic, the US government took significant monetary and fiscal policy action to support and strengthen the economy and to achieve its policy goals for inflation and employment. The Fed was relatively successful as the unemployment rate declined to 4.2% in November 2021, the lowest reading since before the pandemic began. During the period, supply and demand imbalances related to the pandemic and the reopening of the economy contributed to elevated levels of inflation, which was one of the most discussed topics during the fiscal year. After a negative 2020 gross domestic product (GDP) growth rate for the US, the FactSet economic consensus estimate for the 2021 GDP growth rate
In our opinion, Delaware Small Cap Core Fund benefited from:
● | the economy’s recovery from the pandemic-induced recession |
● | strong stock selection overall and the healthcare sector in particular |
● | rising oil prices that provided a boost to the energy sector |
● | renewed strength in the capital goods sector. |
1
Portfolio management review
Delaware Small Cap Core Fund
was 5.6% (as of December 2021). If achieved, 2021 will be the strongest year in more than 30 years.
During the fiscal year, small-cap stocks underperformed mid-cap and large-cap stocks, as the Russell 2000 Index gained 22.03%. The Russell Midcap® Index gained 23.29%, and the large-cap Russell 1000® Index gained 26.67%. The smallest US companies posted the strongest returns for the fiscal year, with the Russell Microcap® Index gaining 27.88%. Small-cap value stocks outperformed small-cap growth stocks, with the Russell 2000® Value Index gaining 33.01% while the Russell 2000® Growth Index appreciated 11.95%.
Sector-level performance within the Russell 2000 Index was strong during the fiscal year, with 15 of 16 sectors advancing; only the healthcare sector declined. The strongest-performing sector in the benchmark was energy, which advanced more than 100% as the demand environment improved and the price per barrel for West Texas Intermediate (WTI) crude oil increased by more than 25% during the fiscal year. Companies in the consumer discretionary and media sectors advanced more than 50%, on average, during the fiscal year. The weakest positive returning sectors in the benchmark over the fiscal year were utilities, consumer staples, and technology.
Source: Bloomberg.
Within the Fund
For the fiscal year ended November 30, 2021, Delaware Small Cap Core Fund outperformed its benchmark, the Russell 2000 Index. The Fund’s Institutional Class shares gained 26.80%. The Fund’s Class A shares rose 26.50% at net asset value (NAV) and 19.24% at maximum offer price (both figures reflect all distributions reinvested). For the same period, the Fund’s benchmark gained 22.03%. For complete annualized performance of Delaware Small Cap Core Fund, please see the table on page 5.
Stock selection drove the Fund’s relative outperformance for the fiscal year. In the healthcare sector, stock selection was the largest contributor as the Fund’s holdings advanced, while the sector’s return in the benchmark was negative for the fiscal year. Strong stock selection contributed in the capital goods and technology sectors of the Fund as well. On a relative basis, stock selection detracted from performance in the consumer services, basic materials, and finance sectors.
The Fund’s holdings in the capital goods sector outperformed during the fiscal year. Among the leading contributors were shares of MYR Group Inc., a holding company of leading specialty contractors serving the electric utility infrastructure and commercial and industrial construction markets throughout the US. MYR Group operates two core business segments: transmission and distribution and commercial and industrial. MYR Group outperformed as the company’s revenues and earnings reached record levels. Additionally, in the company’s most recent earnings release, management noted that its backlog was strong in both business segments. We maintained the Fund’s position in MYR Group as its financial position is strong, and we believe the company is well positioned to meet the continued demand for improvements to the US power grid and replacement of aging infrastructure.
PDC Energy Inc., an independent exploration and production (E&P) company that acquires, explores, and develops properties to produce crude oil, natural gas, and natural gas liquids (NGLs), with operations in the Wattenberg field in Colorado and Delaware Basin in West Texas, contributed to the Fund’s performance during the fiscal year. PDC Energy beat consensus earnings estimates for multiple quarters during the fiscal year. PDC Energy’s management is focused on allocating free cash flow to shareholders. We maintained the Fund’s position in PDC Energy as
2
the company reduced debt levels, repurchased its stock, and initiated a quarterly dividend during the fiscal year, all of which are shareholder friendly and aimed at creating sustainable value, in our view.
Stock selection in the healthcare sector contributed to performance as the Fund’s positions in the specialty pharmaceuticals, medical products, and life sciences industries outperformed, while the Fund’s holdings in the biotechnology industry underperformed. Ligand Pharmaceuticals Inc. is a specialty pharmaceuticals company focused on developing or acquiring technologies that help pharmaceutical companies deliver medicines. During the Fund’s fiscal year, shares of Ligand outperformed as the company delivered multiple quarters of better-than-consensus financial results. Ligand has a portfolio of royalty-generating assets through established partnerships with many of the world’s leading pharmaceutical companies. Ligand grew its core royalties during the Fund’s fiscal year, received new product approvals, and entered new markets that management anticipates will generate future royalty revenue growth. We maintained the Fund’s position in Ligand as management continues to expand the company’s portfolio, which we believe optimizes value.
Among the Fund’s biotechnology companies that underperformed during the fiscal year were Amicus Therapeutics Inc. and Ultragenyx Pharmaceutical Inc. Amicus is focused on discovering, developing, and delivering novel high-quality medicines for people living with rare metabolic diseases. In February, Amicus announced topline results for its Phase 3 PROPEL pivotal trial for the treatment of Pompe disease, which can be debilitating and is characterized by severe muscle weakness that worsens over time. The trial did not achieve superiority on its primary endpoint, and the shares sold off. We felt the reaction was overdone given Amicus has an approved, revenue-generating therapy and a strong balance sheet. We added to the Fund’s position in Amicus during the fiscal year and continue to hold it in the Fund.
Ultragenyx Pharmaceutical is a biopharmaceutical company that identifies, acquires, develops, and commercializes novel products for the treatment of rare and ultra-rare genetic diseases. Ultragenyx detracted from performance during the Fund’s fiscal year when investor sentiment weakened following the announcement of a clinical hold on a study the company is conducting in the US, Canada, and the UK. This applied only to the US as the company continued trials in the UK and Canada. The FDA clinical hold was related to dosing protocol. Ultragenyx worked with the FDA during the fiscal year and received approval to resume the study in September. We trimmed the Fund’s position in Ultragenyx during the fiscal year and continue to hold it in the Fund. In our opinion, Ultragenyx has a healthy cash position and multiple FDA-approved revenue-generating therapies.
Q2 Holdings Inc. is a cloud-based virtual software-solutions provider of digital banking and lending applications to banks, credit unions, and alternative finance and fintech companies. During the Fund’s fiscal year, the 10-year Treasury yield rose, negatively affecting the performance of higher valuation software companies including Q2 Holdings. Most of Q2’s share-price decline occurred in February and March of 2021, when bond yields peaked. On the positive side, Q2 Holdings experienced strong sales performance over the fiscal year and signed many new clients. We maintained the Fund’s position in Q2 as the stock’s valuation is attractive to us, given the lower share price and increased revenues.
With respect to sector positioning, the Fund ended the fiscal year with its largest relative overweight positions in the basic materials, capital goods, consumer discretionary, consumer
3
Portfolio management review
Delaware Small Cap Core Fund
services, and finance sectors. The largest sector underweights were in media, energy, real estate investment trusts (REITs), consumer staples, and communications services. On balance, we believe the market volatility and macroeconomic environment favors active managers that can apply thorough company-level analysis when making investment decisions. We continue to maintain our strategy of investing in companies that we believe have strong balance sheets and cash flow, sustainable competitive advantages, and high-quality management teams with the potential to deliver value to shareholders. We appreciate your confidence and look forward to serving your investment needs in the next fiscal year.
4
Performance summary | |
Delaware Small Cap Core Fund | November 30, 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 November 30, 2021 | |||||||||||||||||||
1 year | 5 year | 10 year | Lifetime | |||||||||||||||||
Class A (Est. December 29, 1998) | ||||||||||||||||||||
Excluding sales charge | +26.50 | % | +11.76 | % | +13.68 | % | +10.99 | % | ||||||||||||
Including sales charge | +19.24 | % | +10.44 | % | +13.01 | % | +10.70 | % | ||||||||||||
Class C (Est. August 1, 2005) | ||||||||||||||||||||
Excluding sales charge | +25.54 | % | +10.93 | % | +12.83 | % | +8.25 | % | ||||||||||||
Including sales charge | +24.54 | % | +10.93 | % | +12.83 | % | +8.25 | % | ||||||||||||
Class R (Est. August 1, 2005) | ||||||||||||||||||||
Excluding sales charge | +26.19 | % | +11.49 | % | +13.39 | % | +8.80 | % | ||||||||||||
Including sales charge | +26.19 | % | +11.49 | % | +13.39 | % | +8.80 | % | ||||||||||||
Institutional Class (Est. December 29, 1998) | ||||||||||||||||||||
Excluding sales charge | +26.80 | % | +12.04 | % | +13.97 | % | +11.19 | % | ||||||||||||
Including sales charge | +26.80 | % | +12.04 | % | +13.97 | % | +11.19 | % | ||||||||||||
Class R6 (Est. May 2, 2016) | ||||||||||||||||||||
Excluding sales charge | +26.97 | %* | +12.19 | % | — | +14.33 | % | |||||||||||||
Including sales charge | +26.97 | % | +12.19 | % | — | +14.33 | % | |||||||||||||
Russell 2000 Index | +22.03 | % | +12.14 | % | +13.06 | % | +8.90 | %** |
* | 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. |
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 in the “Fund expense ratios” table on page 6. 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 |
5
Performance summary |
Delaware Small Cap Core Fund |
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. 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 (CDSC) 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 CDSCs 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.
Class R6 shares are available only to certain investors. In addition, Class R6 shares do not pay any service fees, sub-accounting fees, and/or sub-transfer agency fees to any brokers, dealers, or other financial intermediaries. Class R6 shares pay no 12b-1 fee.
Narrowly focused investments may exhibit higher volatility than investments in multiple industry sectors.
Investments in small and/or medium-sized companies typically exhibit greater risk and higher volatility than larger, more established companies.
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.
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.
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.
2 | The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. 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 | Class R6 | ||||||||||||||||||||
Total annual operating expenses | |||||||||||||||||||||||||
(without fee waivers) | 1.10 | % | 1.85 | % | 1.35 | % | 0.85 | % | 0.71 | % | |||||||||||||||
Net expenses (including fee | |||||||||||||||||||||||||
waivers, if any) | 1.10 | % | 1.85 | % | 1.35 | % | 0.85 | % | 0.71 | % | |||||||||||||||
Type of waiver | n/a | n/a | n/a | n/a | n/a |
6
Performance of a $10,000 investment1
Average annual total returns from November 30, 2011 through November 30, 2021
For period beginning November 30, 2011 through November 30, 2021 | Starting value | Ending value | |||||||
Delaware Small Cap Core Fund — Institutional Class shares | $10,000 | $36,962 | |||||||
Russell 2000 Index | $10,000 | $34,120 | |||||||
Delaware Small Cap Core Fund — Class A shares | $9,425 | $33,980 |
1 | The “Performance of a $10,000 investment” graph assumes $10,000 invested in Institutional Class and Class A shares of the Fund on November 30, 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 6. Please note additional details on pages 5 through 8. |
The graph also assumes $10,000 invested in the Russell 2000 Index as of November 30, 2011. The Russell 2000 Index measures the performance of the small-cap segment of the US equity universe. | |
The Russell 1000 Index, mentioned on page 2, measures the performance of the large-cap segment of the US equity universe. | |
The Russell 2000 Growth Index, mentioned on page 2, measures the performance of the small-cap growth segment of the US equity universe. It includes those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. | |
The Russell 2000 Value Index, mentioned on page 2, measures the performance of the small-cap value segment of the US equity universe. It includes those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. | |
The Russell Microcap Index, mentioned on page 2, measures almost 1,550 small-cap and micro-cap stocks, including the smallest 1,000 companies in the Russell 2000 Index, plus 1,000 smaller US-based listed stocks. |
7
Performance summary
Delaware Small Cap Core Fund
The Russell Midcap Index, mentioned on page 2, measures the performance of the mid-cap segment of the US equity universe. The Russell Midcap Index is a subset of the Russell 1000 Index.
Frank Russell Company is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company.
Gross domestic product is a measure of all goods and services produced by a nation in a year. It is a measure of economic activity.
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 does not guarantee future results.
Performance of other Fund classes will vary due to different charges and expenses.
Nasdaq symbols | CUSIPs | |||
Class A | DCCAX | 24610B883 | ||
Class C | DCCCX | 24610B867 | ||
Class R | DCCRX | 24610B834 | ||
Institutional Class | DCCIX | 24610B859 | ||
Class R6 | DCZRX | 24610B826 |
8
Disclosure of Fund expenses
For the six-month period from June 1, 2021 to November 30, 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 June 1, 2021 to November 30, 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 assume reinvestment of all dividends and distributions.
9
Disclosure of Fund expenses
For the six-month period from June 1, 2021 to November 30, 2021 (Unaudited)
Delaware Small Cap Core Fund
Expense analysis of an investment of $1,000
Beginning | Ending | Expenses | |||||||||||||||||
Account Value | Account Value | Annualized | Paid During Period | ||||||||||||||||
6/1/21 | 11/30/21 | Expense Ratio | 6/1/21 to 11/30/21* | ||||||||||||||||
Actual Fund return† | |||||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,001.60 | 1.06% | $ | 5.32 | ||||||||||||
Class C | 1,000.00 | 998.10 | 1.81% | 9.07 | |||||||||||||||
Class R | 1,000.00 | 1,000.70 | 1.31% | 6.57 | |||||||||||||||
Institutional Class | 1,000.00 | 1,002.80 | 0.81% | 4.07 | |||||||||||||||
Class R6 | 1,000.00 | 1,003.50 | 0.69% | 3.47 | |||||||||||||||
Hypothetical 5% return (5% return before expenses) | |||||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,019.75 | 1.06% | $ | 5.37 | ||||||||||||
Class C | 1,000.00 | 1,015.99 | 1.81% | 9.15 | |||||||||||||||
Class R | 1,000.00 | 1,018.50 | 1.31% | 6.63 | |||||||||||||||
Institutional Class | 1,000.00 | 1,021.01 | 0.81% | 4.10 | |||||||||||||||
Class R6 | 1,000.00 | 1,021.61 | 0.69% | 3.50 |
* | “Expenses Paid During Period” are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/365 (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 (Underlying Funds) in which it invests. The table above does not reflect the expenses of the Underlying Funds.
10
Security type / sector allocation and top 10 equity holdings | ||
Delaware Small Cap Core Fund | As of November 30, 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 | 98.63% | |||
Basic Materials | 6.62% | |||
Business Services | 4.52% | |||
Capital Goods | 11.20% | |||
Communications Services | 0.25% | |||
Consumer Discretionary | 5.79% | |||
Consumer Services | 3.53% | |||
Consumer Staples | 2.54% | |||
Credit Cyclicals | 2.76% | |||
Energy | 2.56% | |||
Financials | 15.86% | |||
Healthcare | 17.49% | |||
Information Technology | 14.92% | |||
Media | 0.74% | |||
Real Estate Investment Trusts | 5.94% | |||
Transportation | 1.55% | |||
Utilities | 2.36% | |||
Short-Term Investments | 1.20% | |||
Total Value of Securities | 99.83% | |||
Receivables and Other Assets Net of Liabilities | 0.17% | |||
Total Net Assets | 100.00% |
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 | |||
WESCO International | 1.48% | |||
PDC Energy | 1.43% | |||
MYR Group | 1.43% | |||
Rapid7 | 1.41% | |||
ExlService Holdings | 1.41% | |||
BJ’s Wholesale Club Holdings | 1.38% | |||
Tetra Tech | 1.34% | |||
WillScot Mobile Mini Holdings | 1.29% | |||
ASGN | 1.29% | |||
Boise Cascade | 1.27% |
11
Delaware Small Cap Core Fund | November 30, 2021 |
Number of | ||||||
shares | Value (US $) | |||||
Common Stock – 98.63% | ||||||
Basic Materials – 6.62% | ||||||
Balchem | 154,715 | $ | 24,444,970 | |||
Boise Cascade | 1,479,391 | 95,908,919 | ||||
Coeur Mining † | 2,990,273 | 16,745,529 | ||||
Ferro † | 775,885 | 16,386,691 | ||||
Kaiser Aluminum | 606,748 | 54,140,124 | ||||
Minerals Technologies | 1,237,140 | 81,242,984 | ||||
Neenah | 901,208 | 41,897,160 | ||||
Quaker Chemical | 213,964 | 48,751,697 | ||||
Summit Materials Class A † | 1,691,389 | 63,088,810 | ||||
Worthington Industries | 1,207,138 | 57,918,481 | ||||
500,525,365 | ||||||
Business Services – 4.52% | ||||||
ABM Industries | 1,177,540 | 52,989,300 | ||||
ASGN † | 800,236 | 97,372,716 | ||||
BrightView Holdings † | 2,393,911 | 32,557,190 | ||||
Casella Waste Systems Class A † | 474,795 | 40,253,120 | ||||
US Ecology † | 600,298 | 20,452,153 | ||||
WillScot Mobile Mini Holdings † | 2,567,769 | 97,806,321 | ||||
341,430,800 | ||||||
Capital Goods – 11.20% | ||||||
Ameresco Class A † | 806,523 | 72,853,223 | ||||
Applied Industrial Technologies | 671,335 | 63,803,678 | ||||
Barnes Group | 516,998 | 22,463,563 | ||||
Columbus McKinnon | 1,125,959 | 50,015,099 | ||||
ESCO Technologies | 298,952 | 24,436,336 | ||||
Federal Signal | 1,573,354 | 66,757,410 | ||||
Kadant | 294,782 | 69,114,588 | ||||
KBR | 1,414,791 | 62,250,804 | ||||
MYR Group † | 974,486 | 107,885,345 | ||||
Regal Rexnord | 296,036 | 46,803,292 | ||||
Tetra Tech | 547,237 | 101,063,729 | ||||
WESCO International † | 902,467 | 112,023,229 | ||||
Zurn Water Solutions | 1,336,840 | 46,856,242 | ||||
846,326,538 | ||||||
Communications Services – 0.25% | ||||||
ATN International | 486,822 | 18,601,469 | ||||
18,601,469 |
12
Number of | ||||||
shares | Value (US $) | |||||
Common Stock (continued) | ||||||
Consumer Discretionary – 5.79% | ||||||
American Eagle Outfitters | 3,574,280 | $ | 92,538,109 | |||
BJ’s Wholesale Club Holdings † | 1,578,012 | 104,385,494 | ||||
Children’s Place † | 327,992 | 28,381,148 | ||||
Hibbett | 437,378 | 34,093,615 | ||||
Malibu Boats Class A † | 994,146 | 69,063,322 | ||||
Sonic Automotive Class A | 393,414 | 17,668,223 | ||||
Steven Madden | 1,927,789 | 91,473,588 | ||||
437,603,499 | ||||||
Consumer Services – 3.53% | ||||||
Allegiant Travel † | 315,781 | 54,699,585 | ||||
Brinker International † | 1,125,124 | 38,929,291 | ||||
Chuy’s Holdings † | 726,640 | 20,825,502 | ||||
Jack in the Box | 581,387 | 48,022,566 | ||||
Texas Roadhouse | 865,520 | 71,786,229 | ||||
Wendy’s | 1,589,269 | 32,707,156 | ||||
266,970,329 | ||||||
Consumer Staples – 2.54% | ||||||
Helen of Troy † | 222,042 | 53,401,101 | ||||
J & J Snack Foods | 423,831 | 57,886,838 | ||||
Prestige Consumer Healthcare † | 1,436,328 | 80,362,551 | ||||
191,650,490 | ||||||
Credit Cyclicals – 2.76% | ||||||
Dana | 2,465,235 | 53,002,553 | ||||
KB Home | 1,472,752 | 58,895,352 | ||||
La-Z-Boy | 834,487 | 27,863,521 | ||||
Taylor Morrison Home † | 2,220,664 | 68,973,824 | ||||
208,735,250 | ||||||
Energy – 2.56% | ||||||
Earthstone Energy Class A † | 1,051,669 | 10,748,057 | ||||
Patterson-UTI Energy | 5,068,805 | 35,785,763 | ||||
PDC Energy | 2,143,286 | 108,085,913 | ||||
Southwestern Energy † | 8,677,149 | 38,873,628 | ||||
193,493,361 | ||||||
Financials – 15.86% | ||||||
American Equity Investment Life Holding | 1,101,915 | 37,057,401 | ||||
Bryn Mawr Bank | 535,160 | 23,868,136 | ||||
City Holding | 466,607 | 36,609,985 | ||||
Enterprise Financial Services | 589,724 | 27,345,502 | ||||
Essent Group | 1,292,233 | 53,731,048 |
13
Schedule of investments
Delaware Small Cap Core Fund
Number of | ||||||
shares | Value (US $) | |||||
Common Stock (continued) | ||||||
Financials (continued) | ||||||
First Bancorp | 951,481 | $ | 42,283,816 | |||
First Financial Bancorp | 1,870,036 | 43,010,828 | ||||
First Foundation | 908,456 | 23,092,952 | ||||
First Interstate BancSystem Class A | 1,049,003 | 42,799,322 | ||||
Great Western Bancorp | 1,005,452 | 33,732,915 | ||||
Hamilton Lane Class A | 532,785 | 56,352,669 | ||||
Independent Bank | 617,289 | 48,802,868 | ||||
Independent Bank Group | 699,296 | 48,552,121 | ||||
Kemper | 434,958 | 24,061,877 | ||||
Lakeland Financial | 147,789 | 10,436,859 | ||||
NMI Holdings Class A † | 2,030,853 | 39,804,719 | ||||
Old National Bancorp | 3,579,447 | 63,213,034 | ||||
Pacific Premier Bancorp | 1,532,344 | 59,378,330 | ||||
RLI | 290,900 | 29,898,702 | ||||
Selective Insurance Group | 745,915 | 56,346,419 | ||||
SouthState | 768,409 | 60,043,479 | ||||
Stifel Financial | 973,694 | 69,142,011 | ||||
Umpqua Holdings | 2,414,109 | 46,012,918 | ||||
United Community Banks | 1,872,188 | 64,159,883 | ||||
Valley National Bancorp | 4,003,379 | 53,805,414 | ||||
WesBanco | 1,329,132 | 43,263,247 | ||||
WSFS Financial | 1,242,288 | 61,766,559 | ||||
1,198,573,014 | ||||||
Healthcare – 17.49% | ||||||
Agios Pharmaceuticals † | 890,287 | 31,712,023 | ||||
Amicus Therapeutics † | 4,860,213 | 52,052,881 | ||||
Apellis Pharmaceuticals † | 1,052,102 | 44,272,452 | ||||
AtriCure † | 815,975 | 51,732,815 | ||||
Biohaven Pharmaceutical Holding † | 396,746 | 44,530,771 | ||||
Blueprint Medicines † | 850,044 | 81,774,233 | ||||
CONMED | 601,186 | 79,031,912 | ||||
CryoLife † | 1,811,037 | 31,131,726 | ||||
Halozyme Therapeutics † | 1,727,626 | 56,804,343 | ||||
Insmed † | 1,973,314 | 54,305,601 | ||||
Inspire Medical Systems † | 235,152 | 52,502,387 | ||||
Intercept Pharmaceuticals † | 459,748 | 7,912,263 | ||||
Ligand Pharmaceuticals † | 480,695 | 77,834,135 | ||||
Merit Medical Systems † | 1,187,244 | 74,630,158 | ||||
NeoGenomics † | 1,065,811 | 36,514,685 | ||||
NuVasive † | 982,890 | 47,237,693 | ||||
Omnicell † | 466,591 | 82,586,607 |
14
Number of | ||||||
shares | Value (US $) | |||||
Common Stock (continued) | ||||||
Healthcare (continued) | ||||||
Pacific Biosciences of California † | 1,277,334 | $ | 29,646,922 | |||
PTC Therapeutics † | 975,070 | 36,233,601 | ||||
Shockwave Medical † | 410,924 | 74,064,942 | ||||
Supernus Pharmaceuticals † | 1,673,190 | 50,145,504 | ||||
Tabula Rasa HealthCare † | 1,111,074 | 12,632,911 | ||||
TransMedics Group † | 1,347,387 | 29,696,410 | ||||
Travere Therapeutics † | 3,205,853 | 91,527,103 | ||||
Ultragenyx Pharmaceutical † | 636,661 | 47,896,007 | ||||
Vanda Pharmaceuticals † | 2,689,772 | 43,574,306 | ||||
1,321,984,391 | ||||||
Information Technology – 14.92% | ||||||
Azenta | 504,579 | 57,067,885 | ||||
Bandwidth Class A † | 140,055 | 10,036,341 | ||||
Blackline † | 235,660 | 25,934,383 | ||||
Box Class A † | 1,135,554 | 26,583,319 | ||||
Consensus Cloud Solutions † | 222,294 | 13,924,496 | ||||
ExlService Holdings † | 818,967 | 106,359,244 | ||||
Ichor Holdings † | 494,258 | 23,670,016 | ||||
II-VI † | 918,053 | 57,405,854 | ||||
MACOM Technology Solutions Holdings † | 490,552 | 35,275,594 | ||||
MaxLinear † | 1,377,428 | 92,742,227 | ||||
Mimecast † | 814,760 | 65,995,560 | ||||
NETGEAR † | 780,126 | 20,860,569 | ||||
Plantronics † | 181,431 | 4,630,119 | ||||
Q2 Holdings † | 546,584 | 43,890,695 | ||||
Rapid7 † | 859,295 | 106,604,138 | ||||
Semtech † | 689,319 | 59,053,959 | ||||
Silicon Laboratories † | 324,972 | 63,782,254 | ||||
Sprout Social Class A † | 360,235 | 40,231,045 | ||||
Upwork † | 756,826 | 28,199,337 | ||||
Varonis Systems † | 1,074,023 | 55,645,132 | ||||
WNS Holdings ADR † | 858,507 | 72,174,684 | ||||
Yelp † | 1,210,831 | 41,507,287 | ||||
Ziff Davis † | 666,884 | 75,938,081 | ||||
1,127,512,219 | ||||||
Media – 0.74% | ||||||
Cinemark Holdings † | 1,632,335 | 25,333,839 | ||||
Nexstar Media Group Class A | 204,272 | 30,538,664 | ||||
55,872,503 |
15
Schedule of investments
Delaware Small Cap Core Fund
Number of | |||||||
shares | Value (US $) | ||||||
Common Stock (continued) | |||||||
Real Estate Investment Trusts – 5.94% | |||||||
American Assets Trust | 1,167,494 | $ | 40,161,794 | ||||
Armada Hoffler Properties | 2,485,421 | 34,671,623 | |||||
DiamondRock Hospitality † | 3,382,823 | 29,464,388 | |||||
EastGroup Properties | 355,372 | 72,389,277 | |||||
Kite Realty Group Trust | 2,248,201 | 45,233,804 | |||||
Lexington Realty Trust | 3,174,806 | 47,780,830 | |||||
National Storage Affiliates Trust | 886,522 | 54,414,720 | |||||
Pebblebrook Hotel Trust | 1,685,519 | 35,311,623 | |||||
Physicians Realty Trust | 3,090,118 | 55,096,804 | |||||
RPT Realty | 2,728,208 | 34,702,806 | |||||
449,227,669 | |||||||
Transportation – 1.55% | |||||||
Hub Group Class A † | 938,779 | 72,914,965 | |||||
Werner Enterprises | 978,541 | 44,141,984 | |||||
117,056,949 | |||||||
Utilities – 2.36% | |||||||
Black Hills | 604,227 | 38,743,035 | |||||
NorthWestern | 802,194 | 44,361,328 | |||||
South Jersey Industries | 2,040,308 | 47,947,238 | |||||
Spire | 796,318 | 47,659,633 | |||||
178,711,234 | |||||||
Total Common Stock (cost $5,507,701,229) | 7,454,275,080 | ||||||
Short-Term Investments – 1.20% | |||||||
Money Market Mutual Funds – 1.20% | |||||||
BlackRock FedFund – Institutional Shares (seven-day effective | |||||||
yield 0.03%) | 22,597,310 | 22,597,310 | |||||
Fidelity Investments Money Market Government Portfolio – | |||||||
Class I (seven-day effective yield 0.01%) | 22,597,310 | 22,597,310 | |||||
GS Financial Square Government Fund – Institutional Shares | |||||||
(seven-day effective yield 0.03%) | 22,597,310 | 22,597,310 | |||||
Morgan Stanley Government Portfolio – Institutional Share Class | |||||||
(seven-day effective yield 0.03%) | 22,597,310 | 22,597,310 | |||||
Total Short-Term Investments (cost $90,389,240) | 90,389,240 | ||||||
Total Value of Securities–99.83% | |||||||
(cost $5,598,090,469) | $ | 7,544,664,320 |
† | Non-income producing security. |
16
Summary of abbreviations:
ADR – American Depositary Receipt
GS – Goldman Sachs
See accompanying notes, which are an integral part of the financial statements.
17
Statement of assets and liabilities | |
Delaware Small Cap Core Fund | November 30, 2021 |
Assets: | ||||
Investments, at value* | $ | 7,544,664,320 | ||
Receivable for fund shares sold | 16,866,936 | |||
Receivable for securities sold | 12,471,026 | |||
Dividends and interest receivable | 8,237,682 | |||
Total Assets | 7,582,239,964 | |||
Liabilities: | ||||
Payable for securities purchased | 10,263,186 | |||
Payable for fund shares redeemed | 8,348,346 | |||
Investment management fees payable to affiliates | 4,095,352 | |||
Dividend disbursing and transfer agent fees and expenses payable to | ||||
non-affiliates | 1,018,002 | |||
Other accrued expenses | 485,057 | |||
Distribution fees payable to affiliates | 205,793 | |||
Dividend disbursing and transfer agent fees and expenses payable to affiliates | 55,809 | |||
Accounting and administration expenses payable to affiliates | 23,847 | |||
Trustees’ fees and expenses payable | 23,119 | |||
Legal fees payable to affiliates | 16,605 | |||
Reports and statements to shareholders expenses payable to affiliates | 7,526 | |||
Total Liabilities | 24,542,642 | |||
Total Net Assets | $ | 7,557,697,322 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 5,212,521,165 | ||
Total distributable earnings (loss) | 2,345,176,157 | |||
Total Net Assets | $ | 7,557,697,322 |
18
Net Asset Value | ||||
Class A: | ||||
Net assets | $ | 312,223,047 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 10,025,279 | |||
Net asset value per share | $ | 31.14 | ||
Sales charge | 5.75 | % | ||
Offering price per share, equal to net asset value per share / (1 - sales charge) | $ | 33.04 | ||
Class C: | ||||
Net assets | $ | 132,293,797 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 4,925,091 | |||
Net asset value per share | $ | 26.86 | ||
Class R: | ||||
Net assets | $ | 44,366,223 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 1,486,802 | |||
Net asset value per share | $ | 29.84 | ||
Institutional Class: | ||||
Net assets | $ | 5,743,600,866 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 179,465,129 | |||
Net asset value per share | $ | 32.00 | ||
Class R6: | ||||
Net assets | $ | 1,325,213,389 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 41,329,453 | |||
Net asset value per share | $ | 32.06 | ||
____________________ | ||||
* Investments, at cost | $ | 5,598,090,469 |
See accompanying notes, which are an integral part of the financial statements.
19
Statement of operations | |
Delaware Small Cap Core Fund | Year ended November 30, 2021 |
Investment Income: | ||||
Dividends | $ | 71,502,207 | ||
Interest | 24 | |||
71,502,231 | ||||
Expenses: | ||||
Management fees | 44,954,605 | |||
Distribution expenses – Class A | 783,774 | |||
Distribution expenses – Class C | 1,351,415 | |||
Distribution expenses – Class R | 217,172 | |||
Dividend disbursing and transfer agent fees and expenses | 8,249,649 | |||
Accounting and administration expenses | 1,187,492 | |||
Reports and statements to shareholders expenses | 598,428 | |||
Legal fees | 321,721 | |||
Registration fees | 285,570 | |||
Trustees’ fees and expenses | 252,374 | |||
Custodian fees | 207,047 | |||
Audit and tax fees | 31,727 | |||
Other | 139,332 | |||
58,580,306 | ||||
Less expenses paid indirectly | (1,124 | ) | ||
Total operating expenses | 58,579,182 | |||
Net Investment Income | 12,923,049 | |||
Net Realized and Unrealized Gain: | ||||
Net realized gain on investments | 451,165,030 | |||
Net change in unrealized appreciation (depreciation) of investments | 1,093,765,440 | |||
Net Realized and Unrealized Gain | 1,544,930,470 | |||
Net Increase in Net Assets Resulting from Operations | $ | 1,557,853,519 |
See accompanying notes, which are an integral part of the financial statements.
20
Statements of changes in net assets
Delaware Small Cap Core Fund
Year ended | ||||||||||
11/30/21 | 11/30/20 | |||||||||
Increase in Net Assets from Operations: | ||||||||||
Net investment income | $ | 12,923,049 | $ | 15,772,484 | ||||||
Net realized gain | 451,165,030 | 13,107,745 | ||||||||
Net change in unrealized appreciation (depreciation) | 1,093,765,440 | 554,772,432 | ||||||||
Net increase in net assets resulting from operations | 1,557,853,519 | 583,652,661 | ||||||||
Dividends and Distributions to Shareholders from: | ||||||||||
Distributable earnings: | ||||||||||
Class A | (1,951,967 | ) | (5,024,973 | ) | ||||||
Class C | (1,003,028 | ) | (2,606,845 | ) | ||||||
Class R | (279,913 | ) | (469,815 | ) | ||||||
Institutional Class | (43,768,600 | ) | (78,648,543 | ) | ||||||
Class R6 | (9,588,230 | ) | (14,406,900 | ) | ||||||
(56,591,738 | ) | (101,157,076 | ) | |||||||
Capital Share Transactions: | ||||||||||
Proceeds from shares sold: | ||||||||||
Class A | 89,418,275 | 79,375,881 | ||||||||
Class C | 21,217,790 | 10,128,660 | ||||||||
Class R | 9,370,000 | 13,420,746 | ||||||||
Institutional Class | 1,798,041,672 | 1,689,107,282 | ||||||||
Class R6 | 408,195,943 | 324,093,627 | ||||||||
Net asset value of shares issued upon reinvestment of | ||||||||||
dividends and distributions: | ||||||||||
Class A | 1,826,558 | 4,847,156 | ||||||||
Class C | 992,647 | 2,578,578 | ||||||||
Class R | 279,822 | 469,671 | ||||||||
Institutional Class | 33,842,749 | 63,748,709 | ||||||||
Class R6 | 7,093,053 | 10,060,122 | ||||||||
2,370,278,509 | 2,197,830,432 |
21
Statements of changes in net assets
Delaware Small Cap Core Fund
Year ended | ||||||||||
11/30/21 | 11/30/20 | |||||||||
Capital Share Transactions (continued): | ||||||||||
Cost of shares redeemed: | ||||||||||
Class A | $ | (111,587,205 | ) | $ | (112,750,663 | ) | ||||
Class C | (35,518,304 | ) | (37,524,291 | ) | ||||||
Class R | (10,381,099 | ) | (7,716,433 | ) | ||||||
Institutional Class | (1,869,954,254 | ) | (1,398,861,403 | ) | ||||||
Class R6 | (230,930,548 | ) | (192,173,930 | ) | ||||||
(2,258,371,410 | ) | (1,749,026,720 | ) | |||||||
Increase in net assets derived from capital share transactions | 111,907,099 | 448,803,712 | ||||||||
Net Increase in Net Assets | 1,613,168,880 | 931,299,297 | ||||||||
Net Assets: | ||||||||||
Beginning of year | 5,944,528,442 | 5,013,229,145 | ||||||||
End of year | $ | 7,557,697,322 | $ | 5,944,528,442 |
See accompanying notes, which are an integral part of the financial statements.
22
Financial highlights
Delaware Small Cap Core 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 income (loss)1 |
Net realized and unrealized gain |
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 net investment income (loss) to average net assets |
Portfolio turnover |
1 | Calculated using average shares outstanding. |
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 | 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.
24
Year ended | ||||||||||||||||||||
11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | ||||||||||||||||
$ | 24.79 | $ | 23.20 | $ | 23.91 | $ | 25.74 | $ | 22.23 | |||||||||||
(0.02 | ) | 0.02 | 0.03 | 0.05 | (0.03 | ) | ||||||||||||||
6.56 | 1.99 | 1.25 | 0.04 | 3.78 | ||||||||||||||||
6.54 | 2.01 | 1.28 | 0.09 | 3.75 | ||||||||||||||||
— | (0.04 | ) | (0.02 | ) | — | — | ||||||||||||||
(0.19 | ) | (0.38 | ) | (1.97 | ) | (1.92 | ) | (0.24 | ) | |||||||||||
(0.19 | ) | (0.42 | ) | (1.99 | ) | (1.92 | ) | (0.24 | ) | |||||||||||
$ | 31.14 | $ | 24.79 | $ | 23.20 | $ | 23.91 | $ | 25.74 | |||||||||||
26.50% | 8.81% | 7.79% | 0.44% | 17.02% | ||||||||||||||||
$ | 312,223 | $ | 264,888 | $ | 279,872 | $ | 288,721 | $ | 324,710 | |||||||||||
1.06% | 1.10% | 1.10% | 1.12% | 1.18% | ||||||||||||||||
(0.06% | ) | 0.09% | 0.15% | 0.19% | (0.12% | ) | ||||||||||||||
24% | 37% | 34% | 38% | 54% |
25
Financial highlights
Delaware Small Cap Core 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 loss1 |
Net realized and unrealized gain |
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 assets3 |
Ratio of net investment loss to average net assets |
Portfolio turnover |
1 | Calculated using average shares outstanding. |
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 | 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.
26
Year ended | ||||||||||||||||||||
11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | ||||||||||||||||
$ | 21.57 | $ | 20.35 | $ | 21.38 | $ | 23.38 | $ | 20.36 | |||||||||||
(0.21 | ) | (0.12 | ) | (0.11 | ) | (0.13 | ) | (0.19 | ) | |||||||||||
5.69 | 1.72 | 1.05 | 0.05 | 3.45 | ||||||||||||||||
5.48 | 1.60 | 0.94 | (0.08 | ) | 3.26 | |||||||||||||||
(0.19 | ) | (0.38 | ) | (1.97 | ) | (1.92 | ) | (0.24 | ) | |||||||||||
(0.19 | ) | (0.38 | ) | (1.97 | ) | (1.92 | ) | (0.24 | ) | |||||||||||
$ | 26.86 | $ | 21.57 | $ | 20.35 | $ | 21.38 | $ | 23.38 | |||||||||||
25.54% | 8.00% | 6.99% | (0.31% | ) | 16.17% | |||||||||||||||
$ | 132,294 | $ | 117,251 | $ | 139,808 | $ | 168,400 | $ | 154,837 | |||||||||||
1.81% | 1.85% | 1.85% | 1.87% | 1.93% | ||||||||||||||||
(0.81% | ) | (0.66% | ) | (0.60% | ) | (0.56% | ) | (0.87% | ) | |||||||||||
24% | 37% | 34% | 38% | 54% |
27
Financial highlights
Delaware Small Cap Core 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 loss1 |
Net realized and unrealized gain |
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 assets3 |
Ratio of net investment loss to average net assets |
Portfolio turnover |
1 | Calculated using average shares outstanding. |
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 | 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.
28
Year ended | ||||||||||||||||||||
11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | ||||||||||||||||
$ | 23.82 | $ | 22.33 | $ | 23.12 | $ | 25.01 | $ | 21.66 | |||||||||||
(0.09 | ) | (0.03 | ) | (0.02 | ) | (0.02 | ) | (0.08 | ) | |||||||||||
6.30 | 1.90 | 1.20 | 0.05 | 3.67 | ||||||||||||||||
6.21 | 1.87 | 1.18 | 0.03 | 3.59 | ||||||||||||||||
(0.19 | ) | (0.38 | ) | (1.97 | ) | (1.92 | ) | (0.24 | ) | |||||||||||
(0.19 | ) | (0.38 | ) | (1.97 | ) | (1.92 | ) | (0.24 | ) | |||||||||||
$ | 29.84 | $ | 23.82 | $ | 22.33 | $ | 23.12 | $ | 25.01 | |||||||||||
26.19% | 8.51% | 7.55% | 0.19% | 16.73% | ||||||||||||||||
$ | 44,366 | $ | 36,065 | $ | 27,631 | $ | 28,138 | $ | 33,112 | |||||||||||
1.31% | 1.35% | 1.35% | 1.37% | 1.43% | ||||||||||||||||
(0.31% | ) | (0.16% | ) | (0.10% | ) | (0.06% | ) | (0.37% | ) | |||||||||||
24% | 37% | 34% | 38% | 54% |
29
Financial highlights
Delaware Small Cap Core 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 from investment operations: |
Net investment income1 |
Net realized and unrealized gain |
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 net investment income to average net assets |
Portfolio turnover |
1 | Calculated using average shares outstanding. |
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 | 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.
30
Year ended | ||||||||||||||||||||
11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | ||||||||||||||||
$ | 25.46 | $ | 23.81 | $ | 24.50 | $ | 26.29 | $ | 22.66 | |||||||||||
0.06 | 0.07 | 0.09 | 0.11 | 0.03 | ||||||||||||||||
6.72 | 2.06 | 1.28 | 0.05 | 3.86 | ||||||||||||||||
6.78 | 2.13 | 1.37 | 0.16 | 3.89 | ||||||||||||||||
(0.05 | ) | (0.10 | ) | (0.09 | ) | (0.03 | ) | (0.02 | ) | |||||||||||
(0.19 | ) | (0.38 | ) | (1.97 | ) | (1.92 | ) | (0.24 | ) | |||||||||||
(0.24 | ) | (0.48 | ) | (2.06 | ) | (1.95 | ) | (0.26 | ) | |||||||||||
$ | 32.00 | $ | 25.46 | $ | 23.81 | $ | 24.50 | $ | 26.29 | |||||||||||
26.80% | 9.09% | 8.06% | 0.69% | 17.31% | ||||||||||||||||
$ | 5,743,601 | $ | 4,632,204 | $ | 3,888,603 | $ | 3,451,251 | $ | 2,275,563 | |||||||||||
0.81% | 0.85% | 0.85% | 0.87% | 0.93% | ||||||||||||||||
0.19% | 0.34% | 0.40% | 0.44% | 0.13% | ||||||||||||||||
24% | 37% | 34% | 38% | 54% |
31
Financial highlights
Delaware Small Cap Core Fund Class R6
Selected data for each share of the Fund outstanding throughout each period were as follows:
Net asset value, beginning of period |
Income from investment operations: |
Net investment income1 |
Net realized and unrealized gain |
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 net investment income to average net assets |
Portfolio turnover |
1 | Calculated using average shares outstanding. |
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 | 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.
32
Year ended | ||||||||||||||||||||
11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | ||||||||||||||||
$ | 25.51 | $ | 23.85 | $ | 24.54 | $ | 26.32 | $ | 22.68 | |||||||||||
0.10 | 0.10 | 0.12 | 0.15 | 0.06 | ||||||||||||||||
6.72 | 2.06 | 1.28 | 0.05 | 3.86 | ||||||||||||||||
6.82 | 2.16 | 1.40 | 0.20 | 3.92 | ||||||||||||||||
(0.08 | ) | (0.12 | ) | (0.12 | ) | (0.06 | ) | (0.04 | ) | |||||||||||
(0.19 | ) | (0.38 | ) | (1.97 | ) | (1.92 | ) | (0.24 | ) | |||||||||||
(0.27 | ) | (0.50 | ) | (2.09 | ) | (1.98 | ) | (0.28 | ) | |||||||||||
$ | 32.06 | $ | 25.51 | $ | 23.85 | $ | 24.54 | $ | 26.32 | |||||||||||
26.92 | % | 9.24 | % | 8.20 | % | 0.86 | % | 17.45 | % | |||||||||||
$ | 1,325,213 | $ | 894,120 | $ | 677,315 | $ | 413,332 | $ | 49,594 | |||||||||||
0.69 | % | 0.71 | % | 0.72 | % | 0.74 | % | 0.79 | % | |||||||||||
0.31 | % | 0.48 | % | 0.53 | % | 0.57 | % | 0.27 | % | |||||||||||
24 | % | 37 | % | 34 | % | 38 | % | 54 | % |
33
Notes to financial statements | |
Delaware Small Cap Core Fund | November 30, 2021 |
Delaware Group® Equity Funds V (Trust) is organized as a Delaware statutory trust and offers three series: Delaware Wealth Builder Fund, Delaware Small Cap Core Fund, and Delaware Small Cap Value Fund. These financial statements and the related notes pertain to Delaware Small Cap Core 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, Institutional Class, and Class R6 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 these 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 contingent deferred sales charge (CDSC) of 1.00%, which will be incurred if redeemed during the first 12 months. Class R, Institutional Class, and Class R6 shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Class R6 shares do not pay any service fees, sub-accounting fees, and/or sub-transfer agency fees to any brokers, dealers, or other financial intermediaries.
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, 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 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 does not trade, the mean between the bid and ask prices will be used, 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. Restricted securities are valued at fair value using methods approved by the Board.
Federal 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-
34
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 November 30, 2021 and for all open tax years (years ended November 30, 2018–November 30, 2020), 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 “Statement of operations.” During the year ended November 30, 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. Class R6 shares will not be allocated any expenses related to service fees, sub-accounting fees, and/or sub-transfer agency fees paid to brokers, dealers, or other financial intermediaries.
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 funds 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. 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. The Fund declares and pays dividends from net investment income 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 November 30, 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 November 30, 2021, the Fund earned $1,124 under this arrangement.
35
Notes to financial statements
Delaware Small Cap Core Fund
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 0.75% on the first $500 million of average daily net assets of the Fund, 0.70% on the next $500 million, 0.65% on the next $1.5 billion, and 0.60% on average daily net assets in excess of $2.5 billion.
DMC may permit its affiliates, Macquarie Investment Management Global Limited (MIMGL) and Macquarie Funds Management Hong Kong Limited (together, the “Affiliated Sub-Advisors”), to execute Fund equity security trades on its behalf. DMC 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 November 30, 2021, the Fund was charged $252,108 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 November 30, 2021, the Fund was charged $605,823 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 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, an annual 12b-1 fee of 0.25%, 1.00%, and 0.50% of the average daily net assets of the Class A shares, Class C shares, and Class R shares, respectively. These fees are calculated daily and paid monthly. Institutional Class and Class R6 shares do not pay 12b-1 fees.
36
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 and regulatory reporting services to the Fund. For the year ended November 30, 2021, the Fund was charged $255,194 for internal legal 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 November 30, 2021, DDLP earned $33,677 for commissions on sales of the Fund’s Class A shares. For the year ended November 30, 2021, DDLP received gross CDSC commissions of $572 and $4,793 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.
3. Investments
For the year ended November 30, 2021, the Fund made purchases and sales of investment securities other than short-term investments as follows:
Purchases | $ | 1,888,139,450 |
Sales | 1,689,662,105 |
The tax cost of investments includes adjustments to net unrealized appreciation (depreciation), which may not necessarily be the final tax cost basis adjustments but which approximate the tax basis unrealized gains and losses that may be realized and distributed to shareholders. At November 30, 2021, the cost and unrealized appreciation (depreciation) of investments for federal income tax purposes for the Fund were as follows:
Cost of investments | $ | 5,665,227,348 | |
Aggregate unrealized appreciation of investments | $ | 2,256,922,935 | |
Aggregate unrealized depreciation of investments | (377,485,963 | ) | |
Net unrealized appreciation of investments | $ | 1,879,436,972 |
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
37
Notes to financial statements
Delaware Small Cap Core Fund
3. Investments (continued)
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 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.
38
The following table summarizes the valuation of the Fund’s investments by fair value hierarchy levels as of November 30, 2021:
Level 1 | |||
Securities | |||
Assets: | |||
Common Stock | $ | 7,454,275,080 | |
Short-Term Investments | 90,389,240 | ||
Total Value of Securities | $ | 7,544,664,320 |
During the year ended November 30, 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 or end of the year in relation to the Fund’s net assets. During the year ended November 30, 2021, there were no Level 3 investments.
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 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 November 30, 2021 and 2020 were as follows:
Year ended | ||||||
11/30/21 | 11/30/20 | |||||
Ordinary income | $ | 56,591,738 | $ | 28,084,772 | ||
Long-term capital gains | — | 73,072,304 | ||||
Total | $ | 56,591,738 | $ | 101,157,076 |
5. Components of Net Assets on a Tax Basis
As of November 30, 2021, the components of net assets on a tax basis were as follows:
Shares of beneficial interest | $ | 5,212,521,165 | |
Undistributed ordinary income | 130,167,441 | ||
Undistributed long-term capital gains | 335,571,744 | ||
Unrealized appreciation (depreciation) of investments | 1,879,436,972 | ||
Net assets | $ | 7,557,697,322 |
The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales.
39
Notes to financial statements
Delaware Small Cap Core Fund
5. Components of Net Assets on a Tax Basis (continued)
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 November 30, 2021, the Fund had no reclassifications.
6. Capital Shares
Transactions in capital shares were as follows:
Year ended | |||||||
11/30/21 | 11/30/20 | ||||||
Shares sold: | |||||||
Class A | 2,992,875 | 3,839,939 | |||||
Class C | 818,207 | 546,339 | |||||
Class R | 326,119 | 639,440 | |||||
Institutional Class | 57,922,579 | 82,994,899 | |||||
Class R6 | 13,510,695 | 15,491,308 | |||||
Shares issued upon reinvestment of dividends and distributions: | |||||||
Class A | 69,530 | 209,290 | |||||
Class C | 43,499 | 127,086 | |||||
Class R | 11,091 | 21,062 | |||||
Institutional Class | 1,256,693 | 2,686,419 | |||||
Class R6 | 263,193 | 423,763 | |||||
77,214,481 | 106,979,545 | ||||||
Shares redeemed: | |||||||
Class A | (3,720,796 | ) | (5,427,774 | ) | |||
Class C | (1,372,903 | ) | (2,107,590 | ) | |||
Class R | (364,335 | ) | (384,170 | ) | |||
Institutional Class | (61,643,329 | ) | (67,047,059 | ) | |||
Class R6 | (7,501,034 | ) | (9,259,811 | ) | |||
(74,602,397 | ) | (84,226,404 | ) | ||||
Net increase | 2,612,084 | 22,753,141 |
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
40
the “Statements of changes in net assets.” For the years ended November 30, 2021 and 2020, the Fund had the following exchange transactions:
Exchange Redemptions | Exchange Subscriptions | ||||||||||||||||
Institutional | Institutional | ||||||||||||||||
Class A | Class C | Class | Class R6 | Class A | Class | Class R6 | |||||||||||
Shares | Shares | Shares | Shares | Shares | Shares | Shares | Value | ||||||||||
Year ended | |||||||||||||||||
11/30/21 | 13,780 | 28,375 | 1,390,669 | 2,829 | 7,614 | 31,985 | 1,390,190 | $ | 44,124,346 | ||||||||
11/30/20 | 14,411 | 75,181 | 11,086 | — | 38,586 | 41,582 | 9,921 | 1,908,221 |
7. Line of Credit
The Fund, along with certain other funds in the Delaware Funds (Participants), is a participant in a $225,000,000 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. Under the Agreement, the Participants are charged an annual commitment fee of 0.15% with the addition of an upfront fee of 0.05%, which is allocated across the Participants based on a weighted average of the respective net assets of each Participant. The Participants are permitted to borrow up to a maximum of one-third of their net assets under the Agreement. Each Participant is 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 1, 2021.
On November 1, 2021, the Fund, along with the other Participants, entered into an amendment to the agreement for a $355,000,000 revolving line of credit to be used as described above and operates in substantially the same manner as the original Agreement. Under the amendment to the agreement, the Participants are charged an annual commitment fee of 0.15%, with the addition of an upfront fee of 0.05%, which is allocated across the Participants based on a weighted average of the respective net assets of each Participant. The line of credit available under the agreement expires on October 31, 2022.
The Fund had no amounts outstanding as of November 30, 2021, or at any time during the year then ended.
8. 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 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
41
Notes to financial statements
Delaware Small Cap Core Fund
8. Securities Lending (continued)
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; certain money market funds; and asset-backed securities. The 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 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 November 30, 2021, the Fund had no securities out on loan.
9. 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
42
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 Fund invests will cause the NAV of the Fund to fluctuate.
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 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 November 30, 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 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. As of November 30, 2021, there were no Rule 144A securities held by the Fund.
10. 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.
11. Subsequent Events
Management has determined that no material events or transactions occurred subsequent to November 30, 2021, that would require recognition or disclosure in the Fund’s financial statements.
43
Report of independent
registered public accounting firm
To the Board of Trustees of Delaware Group® Equity Funds V and Shareholders of Delaware Small Cap Core Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Delaware Small Cap Core Fund (one of the funds constituting Delaware Group® Equity Funds V, referred to hereafter as the “Fund”) as of November 30, 2021, the related statement of operations for the year ended November 30, 2021, the statements of changes in net assets for each of the two years in the period ended November 30, 2021, including the related notes, and the financial highlights for each of the five years in the period ended November 30, 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 November 30, 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 November 30, 2021 and the financial highlights for each of the five years in the period ended November 30, 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 November 30, 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
January 21, 2022
We have served as the auditor of one or more investment companies in Delaware Funds by Macquarie® since 2010.
44
Other Fund information (Unaudited)
Delaware Small Cap Core 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 November 30, 2021, the Fund reports distributions paid during the year as follows:
(A) Ordinary Income Distributions (Tax Basis)* | 100.00 | % | |
Total Distributions (Tax Basis) | 100.00 | % | |
(B) Qualified Dividends1 | 100.00 | % |
(A) is based on a percentage of the Fund’s total distributions. | |
(B) 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 November 30, 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 income is 100%. Complete information will be computed and reported in conjunction with your 2021 Form 1099-DIV. |
For the fiscal year ended November 30, 2021, certain dividends paid by the Fund, determined to be 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 Creations Act of 2010; and as extended by the American Taxpayer Relief Act of 2012. For the year ended November 30, 2021, the Fund has reported maximum distributions of Qualified Short-Term Capital Gain of $121,002,052.
Board consideration of Investment Advisory and Sub-Advisory Agreements for Delaware Small Cap Core Fund at a meeting held August 10-12, 2021
At a meeting held on August 10-12, 2021 (the “Annual Meeting”), the Board of Trustees (the “Board”), including a majority of disinterested or independent Trustees, approved the renewal of the Investment Advisory and Sub-Advisory Agreements for Delaware Small Cap Core Fund (the “Fund”). In making its decision, the Board considered information furnished at regular quarterly Board meetings, including reports detailing Fund performance, investment strategies, and expenses, as well as information prepared specifically in connection with the renewal of the investment advisory and sub-advisory contracts. Information furnished specifically in connection with the renewal of the Investment Management Agreement with Delaware Management Company (“DMC”), a series of Macquarie
45
Other Fund information (Unaudited)
Delaware Small Cap Core Fund
Board consideration of Investment Advisory and Sub-Advisory Agreements for Delaware Small Cap Core Fund at a meeting held August 10-12, 2021 (continued)
Investment Management Business Trust (“MIMBT”), and the Sub-Advisory Agreements with Macquarie Funds Management Hong Kong Limited (“MFMHK”) and Macquarie Investment Management Global Limited (“MIMGL”) (the “Sub-Advisers”), included materials provided by DMC and its affiliates (collectively, “Macquarie Asset Management”) concerning, among other things, the nature, extent, and quality of services provided to the Fund; the costs of such services to the Fund; economies of scale; and the investment manager’s financial condition and profitability. In addition, in connection with the Annual Meeting, materials were provided to the Trustees in May 2021, including reports provided by Broadridge Financial Solutions (“Broadridge”). The Broadridge reports compared the Fund’s investment performance and expenses with those of other comparable mutual funds. The Independent Trustees reviewed and discussed the Broadridge reports with independent legal counsel to the Independent Trustees. In addition to the information noted above, the Board also requested and received information regarding DMC’s policy with respect to advisory fee levels and its breakpoint philosophy; the structure of portfolio manager compensation; comparative client fee information; and any constraints or limitations on the availability of securities for certain investment styles, which had in the past year inhibited, or which were likely in the future to inhibit, the investment manager’s ability to invest fully in accordance with Fund policies.
In considering information relating to the approval of the Fund’s advisory and sub-advisory agreements, as applicable, the Independent Trustees received assistance and advice from and met separately with independent legal counsel to the Independent Trustees and also received assistance and advice from 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.
Nature, extent, and quality of services. The Board considered the services provided by DMC to the Fund and its shareholders. In reviewing the nature, extent, and quality of services, the Board considered reports furnished to it throughout the year, which covered matters such as the relative performance of the Fund; compliance of portfolio managers with the investment policies, strategies, and restrictions for the Fund; compliance by DMC and Delaware Distributors, L.P. (together, “Management”) personnel with the Code of Ethics adopted throughout the Delaware Funds by Macquarie® (“Delaware Funds”); and adherence to fair value pricing procedures as established by the Board. The Board was pleased with the current staffing of DMC and the emphasis placed on research in the investment process. The Board recognized DMC’s receipt of certain favorable industry distinctions during the past several years. The Board gave favorable consideration to DMC’s efforts to control expenses while maintaining service levels committed to Fund matters. The Board also noted the benefits provided to Fund shareholders through (a) each shareholder’s ability to: (i) exchange an investment in one Delaware Fund for the same class of shares in another Delaware Fund without a sales charge, or (ii) reinvest Fund dividends into additional shares of the Fund or into additional shares of other Delaware Funds, and (b) the privilege to combine holdings in other Delaware Funds to obtain a reduced sales charge. The Board was satisfied with the nature, extent, and quality of the overall services provided by DMC.
46
Nature, extent, and quality of services. The Board considered the services provided by each 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.
Investment performance. The Board placed significant emphasis on the investment performance of 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 Fund’s investment performance in comparison to a group of similar funds (the “Performance Universe”). A fund with the best performance ranked first, and a fund with the poorest performance ranked last. The highest/best performing 25% of funds in the Performance Universe make up the first quartile; the next 25%, the second quartile; the next 25%, the third quartile; and the poorest/worst performing 25% of funds in the Performance Universe make up the fourth quartile. Comparative annualized performance for the Fund was shown for the past 1-, 3-, 5-, and 10-year periods, to the extent applicable, ended December 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 Performance Universe for the Fund consisted of the Fund and all retail and institutional small-cap core funds as selected by Broadridge. The Broadridge report comparison showed that the Fund’s total return for the 1-, 3-, 5-, and 10-year periods was in the first quartile of its Performance Universe. The Board was satisfied with performance.
Comparative expenses. The Board considered expense data for the Delaware Funds. Management provided the Board with information on pricing levels and fee structures for the Fund as of its most recently completed fiscal year. The Board also focused on the comparative analysis of effective management fees and total expense ratios of the Fund versus effective management fees and total expense ratios of a group of similar funds (the “Expense Group”). In reviewing comparative costs, the Fund’s contractual management fee and the actual management fee incurred by the Fund were compared with the contractual management fees (assuming all funds in the Expense Group were similar in size to the Fund) and actual management fees (as reported by each fund) within the Expense Group, taking into account any applicable breakpoints and fee waivers. The Fund’s total expenses were also compared with those of its Expense Group and, for comparative consistency, included 12b-1 and non-12b-1 service fees. The Board’s objective is for each Fund’s total expense ratio to be competitive with those of the peer funds within its Expense Group.
The expense comparisons for the Fund showed that its actual management fee was in the quartile with the lowest expenses of its Expense Group and its total expenses were in the quartile the second lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Fund in comparison to those of its Expense Group as shown in the Broadridge report.
47
Other Fund information (Unaudited)
Delaware Small Cap Core Fund
Board consideration of Investment Advisory and Sub-Advisory Agreements for Delaware Small Cap Core Fund at a meeting held August 10-12, 2021 (continued)
Management profitability. The Board considered the level of profits realized by DMC in connection with the operation of the Fund. In this respect, the Board reviewed the Investment Management Profitability Analysis that addressed the overall profitability of DMC’s business in providing management and other services to each of the individual funds and the Delaware Funds as a whole. Specific attention was given to the methodology used by DMC in allocating costs for the purpose of determining profitability. Management stated that the level of profits of DMC, to a certain extent, reflects recent operational cost savings and efficiencies initiated by DMC. The Board considered DMC’s efforts to improve services provided to Fund shareholders and to meet additional regulatory and compliance requirements resulting from recent industry-wide Securities and Exchange Commission initiatives. The Board also considered the extent to which DMC might derive ancillary benefits from fund operations, including the potential for procuring additional business as a result of the prestige and visibility associated with its role as service provider to the Delaware Funds and the benefits from allocation of fund brokerage to improve trading efficiencies. As part of its work, the Board also reviewed a report prepared by JDL regarding MIMBT profitability as compared to certain peer fund complexes and the Independent Trustees discussed with JDL personnel regarding DMC’s profitability in such context. The Board found that the management fees were reasonable in light of the services rendered and the level of profitability of DMC.
Management profitability. Trustees were also given available information on profits being realized by each of the Sub-Advisers in relation to the services being provided to the Fund and in relation to each Sub-Adviser’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 information on potential fall-out benefits derived or to be derived by the Sub-Advisers in connection with their relationship to the Fund, such as reputational enhancement, soft dollar arrangements, or commissions paid to affiliated broker/dealers, as applicable.
Economies of scale. The Trustees considered whether economies of scale are realized by DMC as the Fund’s assets increase and the extent to which any economies of scale are reflected in the level of management fees charged. The Trustees reviewed the Fund’s advisory fee pricing and structure, approved by the Board and shareholders, which includes breakpoints, and which applies to most funds in the Delaware Funds complex. Breakpoints in the advisory fee occur when the advisory fee rate is reduced on assets in excess of specified levels. Breakpoints result in a lower advisory fee than would otherwise be the case in the absence of breakpoints, when the asset levels specified in the breakpoints are exceeded. The Board noted that, as of March 31, 2021, the Fund’s net assets exceeded the final breakpoint level. The Board believed that, given the extent to which economies of scale might be realized by DMC and its affiliates, the schedule of fees under the Investment Management Agreement provides a sharing of benefits with the Fund and its shareholders.
48
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 | 150 | 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) |
49
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 | 150 | 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 | 150 | 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 | 150 | 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) |
50
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 | 150 | 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 |
51
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 | |||||
H. Jeffrey Dobbs3 | Trustee | Since December 2021 | Global Sector Chairman, | 150 | Director, Valparaiso University | |||||
610 Market Street | Industrial Manufacturing, | (2012–Present) | ||||||||
Philadelphia, PA | KPMG LLP | Director, TechAccel LLC | ||||||||
19106-2354 | (2010-2015) | (2015–Present) (Tech R&D) | ||||||||
May 1955 | Board Member, Kansas City | |||||||||
Repertory Theatre | ||||||||||
(2015–Present) | ||||||||||
Board Member, Patients | ||||||||||
Voices, Inc. (healthcare) | ||||||||||
(2018–Present) | ||||||||||
Kansas City Campus for Animal | ||||||||||
Care (2018–Present) | ||||||||||
Director, National Association of | ||||||||||
Manufacturers (2010–2015) | ||||||||||
Director, The Children’s Center | ||||||||||
(2003–2015) | ||||||||||
Director, Metropolitan Affairs | ||||||||||
Coalition (2003–2015) | ||||||||||
Director, Michigan Roundtable | ||||||||||
for Diversity and Inclusion | ||||||||||
(2003–2015) | ||||||||||
Trustee, Ivy Funds Complex | ||||||||||
(2019–2021) |
52
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 | |||||
John A. Fry | Trustee | Since January 2001 | Drexel University | 150 | Director; Compensation | |||||
610 Market Street | (August 2010–Present) | Committee and Governance | ||||||||
Philadelphia, PA | President — Franklin & Marshall | Committee Member — | ||||||||
19106-2354 | College | Community Health Systems | ||||||||
May 1960 | (July 2002–June 2010) | (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) |
53
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 | |||||
Joseph Harroz, Jr.3 | Trustee | Since December 2021 | President (2020–Present), Interim | 150 | Director, OU Medicine, Inc. | |||||
610 Market Street | President (2019–2020), Vice | (2020–Present) | ||||||||
Philadelphia, PA | President (2010–2019) and Dean | Director and Shareholder, | ||||||||
19106-2354 | (2010–2019), College of Law, | Valliance Bank | ||||||||
January 1967 | University of Oklahoma; | (2007–Present) | ||||||||
Managing Member, Harroz | Director, Foundation Healthcare | |||||||||
Investments, LLC, (commercial | (formerly Graymark HealthCare) | |||||||||
enterprises) (1998–2019); | (2008–2017) | |||||||||
Managing Member, St. Clair, | Trustee, the Mewbourne Family | |||||||||
LLC (commercial enterprises) | Support Organization | |||||||||
(2019–Present) | (2006–Present) (non-profit) | |||||||||
Independent Director, LSQ | ||||||||||
Manager, Inc. (real estate) | ||||||||||
(2007–2016) | ||||||||||
Director, Oklahoma Foundation | ||||||||||
for Excellence (non-profit) | ||||||||||
(2008–Present) | ||||||||||
Trustee, Ivy Funds Complex | ||||||||||
(1998–2021) |
54
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 | |||||
Sandra A.J. | Trustee | Since December 2021 | Chief Administrative Officer, | 150 | Director, Hall Family Foundation | |||||
Lawrence3 | Children’s Mercy Hospitals and | (1993–Present) | ||||||||
610 Market Street | Clinics | Director, Westar Energy (utility) | ||||||||
Philadelphia, PA | (2016–2019); | (2004–2018) | ||||||||
19106-2354 | CFO, Children’s Mercy Hospitals | Trustee, Nelson-Atkins Museum | ||||||||
September 1957 | and Clinics | of Art (non-profit) (2021–Present) | ||||||||
(2005–2016) | (2007–2020) | |||||||||
Director, Turn the Page KC | ||||||||||
(non-profit) (2012–2016) | ||||||||||
Director, Kansas Metropolitan | ||||||||||
Business and Healthcare | ||||||||||
Coalition (non-profit) (2017–2019) | ||||||||||
Director, National Association of | ||||||||||
Corporate Directors (non-profit) | ||||||||||
National Board (2022–Present); | ||||||||||
Regional Board (2017–2021) | ||||||||||
Director, American Shared | ||||||||||
Hospital Services (medical | ||||||||||
device) (2017–2021) | ||||||||||
Director, Evergy, Inc., Kansas | ||||||||||
City Power & Light Company, | ||||||||||
KCP&L Greater Missouri | ||||||||||
Operations Company, Westar | ||||||||||
Energy, Inc. and Kansas Gas and | ||||||||||
Electric Company (related utility | ||||||||||
companies) (2018–Present) |
55
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 | |||||
Sandra A.J. | Trustee | Since December 2021 | Chief Administrative Officer, | 150 | Director, Stowers (research) | |||||
Lawrence3 | Children’s Mercy Hospitals and | (2018) | ||||||||
(continued) | Clinics | Co-Chair, Women Corporate | ||||||||
610 Market Street | (2016–2019); | Directors (director education) | ||||||||
Philadelphia, PA | CFO, Children’s Mercy Hospitals | (2018–2020) | ||||||||
19106-2354 | and Clinics | Trustee, Ivy Funds Complex | ||||||||
September 1957 | (2005–2016) | (2019-2021) | ||||||||
Director, Brixmor Property | ||||||||||
Group Inc. | ||||||||||
(2021–Present) | ||||||||||
Director, Sera Prognostics Inc. | ||||||||||
(biotechnology) | ||||||||||
(2021–Present) | ||||||||||
Director, Recology (resource | ||||||||||
recovery) | ||||||||||
(2021–Present) |
56
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 | 150 | 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; Audit | ||||||||
January 1956 | Executive Advisor to Dean | and Compensation | ||||||||
(August 2011–March 2012) and | Committee Member — | |||||||||
Interim Dean | Callon Petroleum Company | |||||||||
(January 2011–July 2011) — | (December 2019–Present) | |||||||||
University of Miami School of | Director — New Senior | |||||||||
Business Administration | Investment Group Inc. | |||||||||
President — U.S. Trust, Bank of | (January 2021–September 2021) | |||||||||
America Private Wealth | Director; Audit Committee | |||||||||
Management (Private Banking) | Member — Carrizo Oil & Gas, | |||||||||
(July 2007-December 2008) | Inc. (March 2018–December | |||||||||
2019) |
57
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 | |||||
Thomas K. Whitford | Trustee | Since January 2013 | Vice Chairman — PNC Financial | 150 | Director — HSBC North America | |||||
610 Market Street | Services Group | Holdings Inc. | ||||||||
Philadelphia, PA | (2010–April 2013) | (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) |
58
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 | 150 | 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–October 2021), | ||||||||||
The Merger Fund VL | ||||||||||
(2013–October 2021); WCM | ||||||||||
Alternatives: Event-Driven Fund | ||||||||||
(2013–October 2021), and WCM | ||||||||||
Alternatives: Credit Event Fund | ||||||||||
(December 2017–October 2021) | ||||||||||
Director; Chair of Governance | ||||||||||
Committee and Audit Committee | ||||||||||
Member — International | ||||||||||
Securities Exchange (2010–2016) |
59
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 | |||||
Janet L. Yeomans | Trustee | Since April 1999 | Vice President and Treasurer | 150 | 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 | 150 | None4 | |||||
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 | 150 | None4 | |||||
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 |
60
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 | 150 | 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 | Messrs. Dobbs and Harroz and Ms. Lawrence were elected as Trustees of the Trust effective December 17, 2021. |
4 | David F. Connor serves as Senior Vice President and Secretary, and Daniel V. Geatens serves as Senior Vice President, Treasurer, and Chief Financial Officer, 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 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.
61
Board of trustees | |||
Shawn K. Lytle Jerome D. Abernathy Thomas L. Bennett | Ann D. Borowiec Joseph W. Chow H. Jeffrey Dobbs | John A. Fry Joseph Harroz, Jr. Sandra A.J. Lawrence | Frances A. Sevilla-Sacasa Thomas K. Whitford Christianna Wood Janet L. Yeomans |
Affiliated officers | |||
David F. Connor | Daniel V. Geatens | Richard Salus |
This annual report is for the information of Delaware Small Cap Core 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.
62
Annual report | |
US equity mutual fund
Delaware Small Cap Value Fund
November 30, 2021
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.
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 Small Cap Value 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.
None of the entities noted in this document is an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia) and the obligations of these entities do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (Macquarie Bank). Macquarie Bank does not guarantee or otherwise provide assurance in respect of the obligations of these entities. In addition, if this document relates to an investment, (a) each investor is subject to investment risk including possible delays in repayment and loss of income and principal invested and (b) none of Macquarie Bank or any other Macquarie Group company guarantees any particular rate of return on or the performance of the investment, nor do they guarantee repayment of capital in respect of the investment.
The Fund is governed by US laws and regulations.
Unless otherwise noted, views expressed herein are current as of November 30, 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.
© 2022 Macquarie Management Holdings, Inc.
Portfolio management review | |
Delaware Small Cap Value Fund | December 7, 2021 (Unaudited) |
Performance preview (for the year ended November 30, 2021)
Delaware Small Cap Value Fund (Institutional Class shares) | 1-year return | +36.84 | % | ||
Delaware Small Cap Value Fund (Class A shares) | 1-year return | +36.52 | % | ||
Russell 2000® Value Index (benchmark) | 1-year return | +33.01 | % |
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Small Cap Value Fund, please see the table on page 4. 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. The performance of both Institutional Class shares and Class A shares reflects the reinvestment of all distributions.
Please see page 6 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.
Investment objective
The Fund seeks capital appreciation.
Market review
Small-cap value stocks experienced a strong run during the Fund’s fiscal year ended November 30, 2021. During the period, small-cap value companies outperformed small-cap growth companies, as investors showed a preference for higher-quality companies in cyclical and economically sensitive industries. That performance disparity was significant, as the Fund’s benchmark, the Russell 2000 Value Index, returned 33.01%, outpacing the 11.95% return of the Russell 2000® Growth Index. Small-cap value companies outperformed mid-cap value and large-cap value companies as the Russell Midcap® Value Index returned 26.34% and the Russell 1000® Value Index advanced 22.25%.
Each of the sectors in the benchmark advanced during the Fund’s fiscal year. Companies in the energy, transportation, basic industry, consumer discretionary, and financial services sectors of the benchmark were the strongest performing. The traditionally defensive utilities, consumer staples, and healthcare sectors in the benchmark also advanced during the Fund’s fiscal year but were relative laggards.
1
Portfolio management review
Delaware Small Cap Value Fund
Following the approval of several COVID-19 vaccines in November 2020, we experienced positive economic effects that were favorable to our asset class. The US Federal Reserve and the federal government provided substantial amounts of monetary and fiscal policy support. The Federal Open Market Committee (FOMC) maintained its extremely accommodative monetary policy, keeping short-term rates near zero. For the 12 months ended November 30, 2021, the US Consumer Price Index (CPI) increased 6.8% and the US Producer Price Index (PPI) increased 9.6%. The real gross domestic product (GDP) growth rate improved during the period, increasing at an annual rate of 2.1% in the third quarter of 2021. The unemployment rate declined from 6.7% in November 2020 to 4.2% in November 2021. Our style gravitates toward companies that deliver free cash flow to investors. On the positive side, many of the companies we invest in resumed share repurchases and dividend payments during the fiscal year, and it is our belief that they will soon resume capital expenditures.
Within the Fund
For the fiscal year ended November 30, 2021, Delaware Small Cap Value Fund outperformed its benchmark, the Russell 2000 Value Index. The Fund’s Institutional Class shares advanced 36.84%. The Fund’s Class A shares gained 36.52% at net asset value (NAV) and 28.66% at maximum offer price. These figures reflect reinvestment of all distributions. During the same period, the Fund’s benchmark advanced 33.01%. For complete annualized performance of Delaware Small Cap Value Fund, please see the table on page 4.
Stock selection and sector positioning contributed to the Fund’s relative outperformance during the fiscal year. Stock selection and a relative overweight allocation benefited the financial services sector. The Fund’s holdings in the industrials and real estate investment trust (REIT) sectors outperformed those in the benchmark during the fiscal year. Sector positioning contributed to performance in the healthcare sector. The Fund’s holdings in the consumer discretionary, consumer staples, transportation, and energy sectors advanced during the fiscal year but lagged the stronger returns of those sectors in the benchmark and therefore detracted from the Fund’s relative performance.
Shares of regional bank East West Bancorp Inc. outperformed for the fiscal year. East West Bancorp, headquartered in California, is one of the largest independent banks, operating more than 120 locations in the US and China. The bank reported several quarters of better-than-expected earnings results during the fiscal year. We maintained the Fund’s position in East West Bancorp as of the end of the Fund’s fiscal year since its loan growth is accelerating, and its profitability is strong.
Atkore Inc. manufactures electrical raceway and mechanical products that frame and secure a range of structures. Shares of Atkore outperformed during the Fund’s fiscal year when the company achieved record earnings. Atkore benefited from its ability to increase selling prices to offset higher input costs and improve margins. During the fiscal year, Atkore refinanced its debt and repurchased its stock, further strengthening its balance sheet and demonstrating that it is committed to being diligent with its approach to capital deployment. We maintained the Fund’s position in Atkore as we continue to believe there is value here.
Louisiana-Pacific Corp. is a leader in high-performance building solutions and manufactures engineered wood building products for builders, remodelers, and homeowners. Louisiana-Pacific continues to reduce the cyclicality of its business by strategically converting capacity for oriented strand board (OSB) into higher-margin siding, which is sold
2
under the company’s LP SmartSide brand. Louisiana-Pacific exceeded its three-year transformation targets for growth and efficiency in February – the end of its 2020 fiscal year – one year ahead of schedule. We maintained the Fund’s position in Louisiana-Pacific as the company has returned free cash flow to shareholders through share repurchases and dividends, which were increased during the Fund’s fiscal year.
Altra Industrial Motion Corp. is a premier global designer and producer of a wide range of motion control and power transmission solutions. Altra made cost reductions early in 2020 when the pandemic began, allowing its share price to reach pre-pandemic levels earlier than its peers. Shares of Altra traded lower during the Fund’s fiscal year due to the impact of global supply chain disruptions, labor shortages, and the higher cost of raw materials. Altra’s book-to-bill ratio and orders backlog remained strong over the period, setting it up for potential top-line growth once the supply chain and labor issues improve. We maintained the Fund’s position in Altra. It trades at what we view as an attractive valuation relative to its peers and has used its free cash flow to pay down its debt.
Avanos Medical Inc. is a medical-device company operating two main divisions: chronic care, which includes respiratory and digestive health products, and pain management, which includes pumps and devices. Avanos Medical detracted over the Fund’s fiscal year as its financial results suffered from higher inflationary costs and continued delays and postponements of elective surgical procedures. Avanos Medical’s management team is focused on margin improvements and continues to find ways to increase productivity and lower its cost structure. We maintained the Fund’s position in Avanos because its valuation is discounted relative to its industry peers, and it has a strong balance sheet.
Kemper Corp. is a multi-line insurance company that offers property and casualty, life, and health insurance products primarily to middle- and low-income consumers. Kemper’s property and casualty business division primarily sells non-standard personal auto and low-premium commercial auto policies. Its life and health division sells term life insurance with low face amounts and supplemental health and accident policies to middle-income customers. During the Fund’s fiscal year, shares of Kemper detracted as profitability weakened due to soft pricing during the pandemic lockdowns and higher claims now that the economy is reopening. We maintained the Fund’s position in Kemper as it trades at a discount-to-book value and management, in our opinion, is taking corrective actions, including rate increases, to position the company for growth.
The Fund ended the fiscal year overweight the basic industry, technology, financial services, and industrials sectors. The Fund ended the fiscal year underweight the healthcare, REIT, utilities, and energy sectors. Sector weightings were comparable to those in the benchmark in the consumer discretionary, consumer staples, and transportation sectors at fiscal year-end.
Our team’s disciplined philosophy remains unchanged. We continue to focus on bottom-up stock selection and specifically on identifying companies that, in our view, trade at attractive valuations, generate strong free cash flow, and have the ability to implement shareholder-friendly policies through share buybacks, dividend increases, and debt reduction.
3
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 November 30, 2021 | |||||||||||||||||||
1 year | 5 year | 10 year | Lifetime | |||||||||||||||||
Class A (Est. June 24, 1987) | ||||||||||||||||||||
Excluding sales charge | +36.52 | % | +8.66 | % | +11.00 | % | +11.07 | % | ||||||||||||
Including sales charge | +28.66 | % | +7.38 | % | +10.35 | % | +10.88 | % | ||||||||||||
Class C (Est. November 29, 1995) | ||||||||||||||||||||
Excluding sales charge | +35.48 | % | +7.85 | % | +10.17 | % | +9.32 | % | ||||||||||||
Including sales charge | +34.48 | % | +7.85 | % | +10.17 | % | +9.32 | % | ||||||||||||
Class R (Est. June 2, 2003) | ||||||||||||||||||||
Excluding sales charge | +36.18 | % | +8.39 | % | +10.73 | % | +9.76 | % | ||||||||||||
Including sales charge | +36.18 | % | +8.39 | % | +10.73 | % | +9.76 | % | ||||||||||||
Institutional Class (Est. November 9, 1992) | ||||||||||||||||||||
Excluding sales charge | +36.84 | % | +8.93 | % | +11.28 | % | +10.66 | % | ||||||||||||
Including sales charge | +36.84 | % | +8.93 | % | +11.28 | % | +10.66 | % | ||||||||||||
Class R6 (Est. May 2, 2016) | ||||||||||||||||||||
Excluding sales charge | +37.08 | % | +9.12 | % | — | +11.61 | % | |||||||||||||
Including sales charge | +37.08 | % | +9.12 | % | — | +11.61 | % | |||||||||||||
Russell 2000 Value Index | +33.01 | % | +9.08 | % | +11.76 | % | +10.55 | %* |
* | 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. |
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 in the “Fund expense ratios” table on page 5. 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. 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 (CDSC) of 1.00% if redeemed during |
4
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 CDSCs 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. | |
Class R6 shares are available only to certain investors. In addition, Class R6 shares do not pay any service fees, sub-accounting fees, and/or sub-transfer agency fees to any brokers, dealers, or other financial intermediaries. Class R6 shares pay no 12b-1 fee. | |
Investments in small and/or medium-sized companies typically exhibit greater risk and higher volatility than larger, more established companies. | |
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 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. | |
2 | The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. 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 | Class R6 | |||||||||||||||||||
Total annual operating expenses | ||||||||||||||||||||||||
(without fee waivers) | 1.14 | % | 1.89 | % | 1.39 | % | 0.89 | % | 0.72 | % | ||||||||||||||
Net expenses (including fee | ||||||||||||||||||||||||
waivers, if any) | 1.14 | % | 1.89 | % | 1.39 | % | 0.89 | % | 0.72 | % | ||||||||||||||
Type of waiver | n/a | n/a | n/a | n/a | n/a |
5
Performance summary
Delaware Small Cap Value Fund
Performance of a $10,000 investment1
Average annual total returns from November 30, 2011 through November 30, 2021
For period beginning November 30, 2011 through November 30, 2021 | Starting value | Ending value | |||||||
Russell 2000 Value Index | $10,000 | $30,390 | |||||||
Delaware Small Cap Value Fund — Institutional Class shares | $10,000 | $29,126 | |||||||
Delaware Small Cap Value Fund — Class A shares | $9,425 | $26,768 |
1 | The “Performance of a $10,000 investment” graph assumes $10,000 invested in Institutional Class and Class A shares of the Fund on November 30, 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 5. Please note additional details on pages 4 through 7. |
The graph also assumes $10,000 invested in the Russell 2000 Value Index as of November 30, 2011. The Russell 2000 Value Index measures the performance of the small-cap value segment of the US equity universe. It includes those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. | |
The Russell 2000 Growth Index, mentioned on page 1, measures the performance of the small-cap growth segment of the US equity universe. It includes those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. | |
The Russell Midcap Value Index, mentioned on page 1, measures the performance of the mid-cap value segment of the US equity universe. It includes those Russell Midcap Index companies with lower price-to-book ratios and lower forecasted growth values. | |
The Russell 1000 Value Index, mentioned on page 1, measures the performance of the large-cap value segment of the US equity universe. It includes those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. |
6
Frank Russell Company is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company.
Gross domestic product is a measure of all goods and services produced by a nation in a year. It is a measure of economic activity.
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 does not guarantee future results.
Performance of other Fund classes will vary due to different charges and expenses.
Nasdaq symbols | CUSIPs | |||
Class A | DEVLX | 246097109 | ||
Class C | DEVCX | 246097406 | ||
Class R | DVLRX | 246097505 | ||
Institutional Class | DEVIX | 246097208 | ||
Class R6 | DVZRX | 24610B818 |
7
Disclosure of Fund expenses
For the six-month period from June 1, 2021 to November 30, 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 June 1, 2021 to November 30, 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.
8
Delaware Small Cap Value Fund
Expense analysis of an investment of $1,000
Beginning | Ending | Expenses | |||||||||||||||||
Account Value | Account Value | Annualized | Paid During Period | ||||||||||||||||
6/1/21 | 11/30/21 | Expense Ratio | 6/1/21 to 11/30/21* | ||||||||||||||||
Actual Fund return† | |||||||||||||||||||
Class A | $ | 1,000.00 | $ | 987.60 | 1.12% | $ | 5.58 | ||||||||||||
Class C | 1,000.00 | 983.90 | 1.87% | 9.30 | |||||||||||||||
Class R | 1,000.00 | 986.30 | 1.37% | 6.82 | |||||||||||||||
Institutional Class | 1,000.00 | 988.80 | 0.87% | 4.34 | |||||||||||||||
Class R6 | 1,000.00 | 989.50 | 0.69% | 3.44 | |||||||||||||||
Hypothetical 5% return (5% return before expenses) | |||||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,019.45 | 1.12% | $ | 5.67 | ||||||||||||
Class C | 1,000.00 | 1,015.69 | 1.87% | 9.45 | |||||||||||||||
Class R | 1,000.00 | 1,018.20 | 1.37% | 6.93 | |||||||||||||||
Institutional Class | 1,000.00 | 1,020.71 | 0.87% | 4.41 | |||||||||||||||
Class R6 | 1,000.00 | 1,021.61 | 0.69% | 3.50 |
*“ | Expenses Paid During Period” are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/365 (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 (Underlying Funds) in which it invests. The table above does not reflect the expenses of the Underlying Funds.
9
Security type / sector allocation and top 10 equity holdings
Delaware Small Cap Value Fund | As of November 30, 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 ◆ | 98.65% | |||
Basic Industry | 8.61% | |||
Consumer Discretionary | 11.63% | |||
Consumer Staples | 2.77% | |||
Energy | 5.62% | |||
Financial Services* | 28.08% | |||
Healthcare | 4.55% | |||
Industrials | 12.77% | |||
Real Estate Investment Trusts | 8.48% | |||
Technology | 10.86% | |||
Transportation | 2.49% | |||
Utilities | 2.79% | |||
Short-Term Investments | 1.33% | |||
Total Value of Securities | 99.98% | |||
Receivables and Other Assets Net of Liabilities | 0.02% | |||
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 Financial Services 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 Financial Services sector consisted of banks, diversified financial services, insurance, and savings & loans. As of November 30, 2021, such amounts, as a percentage of total net assets were 19.98%, 2.48%, 4.84%, and 0.78%, respectively. The percentage in any such single industry will comply with the Fund’s concentration policy even if the percentage in the Financial Services sector for financial reporting purposes may exceed 25%. |
10
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 | ||||
East West Bancorp | 3.18 | % | |||
Western Alliance Bancorp | 2.56 | % | |||
Stifel Financial | 2.48 | % | |||
MasTec | 2.41 | % | |||
Louisiana-Pacific | 2.25 | % | |||
Hancock Whitney | 1.93 | % | |||
ITT | 1.86 | % | |||
Devon Energy | 1.85 | % | |||
Webster Financial | 1.85 | % | |||
WESCO International | 1.73 | % |
11
Schedule of investments | |
Delaware Small Cap Value Fund | November 30, 2021 |
Number of | ||||||
shares | Value (US $) | |||||
Common Stock – 98.65%◆ | ||||||
Basic Industry – 8.61% | ||||||
Arconic † | 1,345,200 | $ | 35,943,744 | |||
Ashland Global Holdings | 429,200 | 43,379,244 | ||||
Avient | 1,029,700 | 56,643,797 | ||||
Berry Global Group † | 1,605,310 | 110,846,656 | ||||
HB Fuller | 885,500 | 64,783,180 | ||||
Huntsman | 2,208,000 | 69,971,520 | ||||
Louisiana-Pacific | 2,300,800 | 150,357,280 | ||||
Summit Materials Class A † | 1,164,400 | 43,432,120 | ||||
575,357,541 | ||||||
Consumer Discretionary – 11.63% | ||||||
Acushnet Holdings | 763,200 | 41,502,816 | ||||
Adient † | 1,345,700 | 57,124,965 | ||||
American Eagle Outfitters | 561,200 | 14,529,468 | ||||
Barnes Group | 936,300 | 40,682,235 | ||||
Cable One | 19,580 | 34,696,935 | ||||
Choice Hotels International | 286,800 | 41,170,140 | ||||
Cracker Barrel Old Country Store | 382,000 | 46,611,640 | ||||
Denny’s † | 1,182,200 | 16,373,470 | ||||
Group 1 Automotive | 316,500 | 61,638,375 | ||||
KB Home | 1,352,000 | 54,066,480 | ||||
Leggett & Platt | 823,800 | 33,273,282 | ||||
Meritage Homes † | 615,900 | 69,510,474 | ||||
Nexstar Media Group Class A | 280,700 | 41,964,650 | ||||
PROG Holdings | 841,700 | 37,977,504 | ||||
Steven Madden | 968,925 | 45,975,491 | ||||
Texas Roadhouse | 387,550 | 32,143,397 | ||||
UniFirst | 300,100 | 57,514,165 | ||||
Wolverine World Wide | 1,632,580 | 50,822,216 | ||||
777,577,703 | ||||||
Consumer Staples – 2.77% | ||||||
J & J Snack Foods | 328,800 | 44,907,504 | ||||
Performance Food Group † | 1,221,522 | 49,239,552 | ||||
Scotts Miracle-Gro | 150,900 | 21,863,901 | ||||
Spectrum Brands Holdings | 692,050 | 69,274,205 | ||||
185,285,162 | ||||||
Energy – 5.62% | ||||||
CNX Resources † | 5,222,600 | 71,236,264 | ||||
Delek US Holdings † | 1,431,000 | 22,438,080 | ||||
Devon Energy | 2,942,902 | 123,778,458 | ||||
Dril-Quip † | 656,000 | 12,536,160 |
12
Number of | ||||||
shares | Value (US $) | |||||
Common Stock◆ (continued) | ||||||
Energy (continued) | ||||||
Helix Energy Solutions Group † | 3,841,600 | $ | 11,678,464 | |||
Magnolia Oil & Gas Class A | 3,648,100 | 69,204,457 | ||||
Patterson-UTI Energy | 4,730,700 | 33,398,742 | ||||
Renewable Energy Group † | 652,485 | 31,175,733 | ||||
375,446,358 | ||||||
Financial Services – 28.08% | ||||||
American Equity Investment Life Holding | 2,365,200 | 79,541,676 | ||||
Bank of NT Butterfield & Son | 1,126,300 | 41,481,629 | ||||
East West Bancorp | 2,764,223 | 212,845,171 | ||||
Essent Group | 720,900 | 29,975,022 | ||||
First Financial Bancorp | 2,600,900 | 59,820,700 | ||||
First Interstate BancSystem Class A | 931,600 | 38,009,280 | ||||
FNB | 7,824,500 | 91,233,670 | ||||
Great Western Bancorp | 2,166,150 | 72,674,333 | ||||
Hancock Whitney | 2,703,800 | 129,187,564 | ||||
Hanover Insurance Group | 597,500 | 72,745,625 | ||||
Kemper | 642,700 | 35,554,164 | ||||
NBT Bancorp | 632,100 | 22,825,131 | ||||
Prosperity Bancshares | 710,000 | 50,608,800 | ||||
S&T Bancorp | 856,356 | 25,613,608 | ||||
Sandy Spring Bancorp | 801,400 | 37,609,702 | ||||
Selective Insurance Group | 1,147,606 | 86,690,157 | ||||
Sterling Bancorp | 2,088,900 | 51,825,609 | ||||
Stewart Information Services | 264,000 | 18,802,080 | ||||
Stifel Financial | 2,331,150 | 165,534,961 | ||||
Synovus Financial | 1,673,700 | 75,801,873 | ||||
Umpqua Holdings | 5,031,600 | 95,902,296 | ||||
Valley National Bancorp | 6,529,400 | 87,755,136 | ||||
Webster Financial | 2,290,500 | 123,435,045 | ||||
Western Alliance Bancorp | 1,556,800 | 170,905,504 | ||||
1,876,378,736 | ||||||
Healthcare – 4.55% | ||||||
Avanos Medical † | 1,195,521 | 36,068,868 | ||||
Integer Holdings † | 716,600 | 57,141,684 | ||||
Integra LifeSciences | ||||||
Holdings † | 976,600 | 62,453,570 | ||||
NuVasive † | 483,862 | 23,254,408 | ||||
Ortho Clinical Diagnostics Holdings † | 2,338,700 | 44,762,718 | ||||
Select Medical Holdings | 1,281,800 | 34,416,330 |
13
Schedule of investments
Delaware Small Cap Value Fund
Number of | ||||||
shares | Value (US $) | |||||
Common Stock◆ (continued) | ||||||
Healthcare (continued) | ||||||
Service Corp. International | 697,100 | $ | 46,120,136 | |||
304,217,714 | ||||||
Industrials – 12.77% | ||||||
Altra Industrial Motion | 1,528,643 | 80,574,773 | ||||
Atkore † | 1,031,100 | 109,812,150 | ||||
Deluxe | 505,400 | 17,102,736 | ||||
H&E Equipment Services | 870,200 | 36,635,420 | ||||
ITT | 1,312,600 | 124,145,708 | ||||
KBR | 1,219,372 | 53,652,368 | ||||
MasTec † | 1,747,259 | 161,044,862 | ||||
PAE † | 2,039,200 | 20,228,864 | ||||
Primoris Services | 1,348,100 | 30,224,402 | ||||
Regal Rexnord | 330,539 | 52,258,216 | ||||
WESCO International † | 933,500 | 115,875,355 | ||||
Zurn Water Solutions | 1,482,500 | 51,961,625 | ||||
853,516,479 | ||||||
Real Estate Investment Trusts – 8.48% | ||||||
Brandywine Realty Trust | 4,329,337 | 55,631,980 | ||||
Broadstone Net Lease | 1,674,000 | 41,850,000 | ||||
Independence Realty Trust | 1,843,700 | 45,170,650 | ||||
Kite Realty Group Trust | 1,768,914 | 35,590,550 | ||||
Lexington Realty Trust | 4,810,900 | 72,404,045 | ||||
Life Storage | 602,600 | 79,627,564 | ||||
National Health Investors | 639,500 | 33,407,480 | ||||
Outfront Media | 3,122,000 | 78,018,780 | ||||
RPT Realty | 2,707,889 | 34,444,348 | ||||
Spirit Realty Capital | 1,385,500 | 61,737,880 | ||||
Summit Hotel Properties † | 3,199,900 | 28,639,105 | ||||
566,522,382 | ||||||
Technology – 10.86% | ||||||
Cirrus Logic † | 679,000 | 54,442,220 | ||||
Concentrix | 301,900 | 50,115,400 | ||||
Diodes † | 467,400 | 49,707,990 | ||||
Flex † | 4,671,010 | 79,874,271 | ||||
NCR † | 679,958 | 26,450,366 | ||||
NetScout Systems † | 1,216,506 | 36,373,529 | ||||
ON Semiconductor † | 1,852,700 | 113,811,361 | ||||
TD SYNNEX | 301,100 | 31,151,806 | ||||
Teradyne | 573,900 | 87,732,093 | ||||
Tower Semiconductor † | 2,180,200 | 77,353,496 |
14
Number of | |||||||
shares | Value (US $) | ||||||
Common Stock ◆(continued) | |||||||
Technology (continued) | |||||||
TTM Technologies † | 3,749,402 | $ | 51,666,760 | ||||
Viavi Solutions † | 3,238,200 | 47,957,742 | |||||
Vishay Intertechnology | 957,000 | 19,494,090 | |||||
726,131,124 | |||||||
Transportation – 2.49% | |||||||
Kirby † | 723,900 | 37,802,058 | |||||
Saia † | 113,350 | 37,539,253 | |||||
SkyWest † | 625,300 | 24,493,001 | |||||
Werner Enterprises | 1,481,800 | 66,843,998 | |||||
166,678,310 | |||||||
Utilities – 2.79% | |||||||
ALLETE | 820,000 | 48,076,600 | |||||
Black Hills | 845,600 | 54,219,872 | |||||
South Jersey Industries | 1,632,000 | 38,352,000 | |||||
Southwest Gas Holdings | 692,400 | 45,566,844 | |||||
186,215,316 | |||||||
Total Common Stock (cost $4,168,572,100) | 6,593,326,825 | ||||||
Short-Term Investments – 1.33% | |||||||
Money Market Mutual Funds – 1.33% | |||||||
BlackRock FedFund – Institutional Shares (seven-day effective | |||||||
yield 0.03%) | 22,243,451 | 22,243,451 | |||||
Fidelity Investments Money Market Government Portfolio – | |||||||
Class I (seven-day effective yield 0.01%) | 22,243,450 | 22,243,450 | |||||
GS Financial Square Government Fund – Institutional Shares | |||||||
(seven-day effective yield 0.03%) | 22,243,451 | 22,243,451 | |||||
Morgan Stanley Government Portfolio – Institutional Share Class | |||||||
(seven-day effective yield 0.03%) | 22,243,450 | 22,243,450 | |||||
Total Short-Term Investments (cost $88,973,802) | 88,973,802 | ||||||
Total Value of Securities–99.98% | |||||||
(cost $4,257,545,902) | $ | 6,682,300,627 |
◆ | Narrow industries are utilized for compliance purposes for diversification whereas broad sectors are used for financial reporting. |
† | Non-income producing security. |
Summary of abbreviations:
GS – Goldman Sachs
See accompanying notes, which are an integral part of the financial statements.
15
Statement of assets and liabilities | |
Delaware Small Cap Value Fund | November 30, 2021 |
Assets: | ||||
Investments, at value* | $ | 6,682,300,627 | ||
Receivable for fund shares sold | 12,186,345 | |||
Dividends and interest receivable | 6,305,014 | |||
Other assets | 23,221 | |||
Total Assets | 6,700,815,207 | |||
Liabilities: | ||||
Payable for fund shares redeemed | 9,554,116 | |||
Investment management fees payable to affiliates | 3,638,670 | |||
Payable for securities purchased | 1,693,481 | |||
Dividend disbursing and transfer agent fees and expenses payable to | ||||
non-affiliates | 1,554,235 | |||
Other accrued expenses | 475,174 | |||
Distribution fees payable to affiliates | 290,323 | |||
Dividend disbursing and transfer agent fees and expenses payable to affiliates | 49,325 | |||
Accounting and administration expenses payable to affiliates | 21,115 | |||
Trustees’ fees and expenses payable to affiliates | 20,274 | |||
Legal fees payable to affiliates | 14,562 | |||
Reports and statements to shareholders expenses payable to affiliates | 6,691 | |||
Total Liabilities | 17,317,966 | |||
Total Net Assets | $ | 6,683,497,241 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 3,991,900,784 | ||
Total distributable earnings (loss) | 2,691,596,457 | |||
Total Net Assets | $ | 6,683,497,241 |
16
Net Asset Value | ||||
Class A: | ||||
Net assets | $ | 1,016,517,950 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 13,465,136 | |||
Net asset value per share | $ | 75.49 | ||
Sales charge | 5.75 | % | ||
Offering price per share, equal to net asset value per share / (1 - sales charge) | $ | 80.10 | ||
Class C: | ||||
Net assets | $ | 51,077,607 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 844,381 | |||
Net asset value per share | $ | 60.49 | ||
Class R: | ||||
Net assets | $ | 54,481,134 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 748,053 | |||
Net asset value per share | $ | 72.83 | ||
Institutional Class: | ||||
Net assets | $ | 3,958,855,575 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 49,293,568 | |||
Net asset value per share | $ | 80.31 | ||
Class R6: | ||||
Net assets | $ | 1,602,564,975 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 19,899,141 | |||
Net asset value per share | $ | 80.53 | ||
____________________ | ||||
* Investments, at cost | $ | 4,257,545,902 | ||
See accompanying notes, which are an integral part of the financial statements. |
17
Statement of operations | |
Delaware Small Cap Value Fund | Year ended November 30, 2021 |
Investment Income: | |||||
Dividends | $ | 91,798,508 | |||
Interest | 3 | ||||
91,798,511 | |||||
Expenses: | |||||
Management fees | 38,953,876 | ||||
Distribution expenses – Class A | 2,019,631 | ||||
Distribution expenses – Class C | 506,661 | ||||
Distribution expenses – Class R | 270,773 | ||||
Dividend disbursing and transfer agent fees and expenses | 9,175,657 | ||||
Accounting and administration expenses | 1,029,438 | ||||
Reports and statements to shareholders expenses | 444,024 | ||||
Legal fees | 314,542 | ||||
Trustees’ fees and expenses | 212,230 | ||||
Custodian fees | 174,124 | ||||
Registration fees | 156,758 | ||||
Audit and tax fees | 37,935 | ||||
Other | 122,316 | ||||
53,417,965 | |||||
Less expenses paid indirectly | (1,375 | ) | |||
Total operating expenses | 53,416,590 | ||||
Net Investment Income | 38,381,921 | ||||
Net Realized and Unrealized Gain: | |||||
Net realized gain on investments | 300,690,716 | ||||
Net change in unrealized appreciation (depreciation) of investments | 1,371,417,516 | ||||
Net Realized and Unrealized Gain | 1,672,108,232 | ||||
Net Increase in Net Assets Resulting from Operations | $ | 1,710,490,153 |
See accompanying notes, which are an integral part of the financial statements.
18
Statements of changes in net assets
Delaware Small Cap Value Fund
Year ended | ||||||||||
11/30/21 | 11/30/20 | |||||||||
Increase (Decrease) in Net Assets from Operations: | ||||||||||
Net investment income | $ | 38,381,921 | $ | 40,156,112 | ||||||
Net realized gain (loss) | 300,690,716 | (39,807,994 | ) | |||||||
Net change in unrealized appreciation (depreciation) | 1,371,417,516 | (79,578,311 | ) | |||||||
Net increase (decrease) in net assets resulting from | ||||||||||
operations | 1,710,490,153 | (79,230,193 | ) | |||||||
Dividends and Distributions to Shareholders from: | ||||||||||
Distributable earnings: | ||||||||||
Class A | (4,041,420 | ) | (26,836,930 | ) | ||||||
Class C | (68,123 | ) | (3,124,333 | ) | ||||||
Class R | (221,432 | ) | (2,279,071 | ) | ||||||
Institutional Class | (28,075,733 | ) | (124,086,181 | ) | ||||||
Class R6 | (9,897,320 | ) | (27,982,274 | ) | ||||||
(42,304,028 | ) | (184,308,789 | ) | |||||||
Capital Share Transactions: | ||||||||||
Proceeds from shares sold: | ||||||||||
Class A | 248,099,098 | 137,462,793 | ||||||||
Class C | 14,387,495 | 9,629,288 | ||||||||
Class R | 18,583,571 | 10,625,442 | ||||||||
Institutional Class | 1,046,374,208 | 1,229,328,754 | ||||||||
Class R6 | 748,398,598 | 596,941,661 | ||||||||
Net assets from merger:1 | ||||||||||
Class A | 263,274,700 | — | ||||||||
Institutional Class | 2,421,400 | — | ||||||||
Class R6 | 268,290 | — | ||||||||
Net asset value of shares issued upon reinvestment of | ||||||||||
dividends and distributions: | ||||||||||
Class A | 3,975,321 | 26,442,390 | ||||||||
Class C | 67,426 | 3,058,818 | ||||||||
Class R | 221,408 | 2,278,860 | ||||||||
Institutional Class | 26,608,971 | 120,505,849 | ||||||||
Class R6 | 9,612,283 | 26,477,062 | ||||||||
2,382,292,769 | 2,162,750,917 |
19
Statements of changes in net assets
Delaware Small Cap Value Fund
Year ended | ||||||||
11/30/21 | 11/30/20 | |||||||
Capital Share Transactions (continued): | ||||||||
Cost of shares redeemed: | ||||||||
Class A | $ | (251,060,887 | ) | $ | (187,767,639 | ) | ||
Class C | (24,586,224 | ) | (24,774,471 | ) | ||||
Class R | (23,100,566 | ) | (18,475,683 | ) | ||||
Institutional Class | (1,325,435,282 | ) | (1,036,049,988 | ) | ||||
Class R6 | (428,438,058 | ) | (269,976,409 | ) | ||||
(2,052,621,017 | ) | (1,537,044,190 | ) | |||||
Increase in net assets derived from capital share transactions | 329,671,752 | 625,706,727 | ||||||
Net Increase in Net Assets | 1,997,857,877 | 362,167,745 | ||||||
Net Assets: | ||||||||
Beginning of year | 4,685,639,364 | 4,323,471,619 | ||||||
End of year | $ | 6,683,497,241 | $ | 4,685,639,364 |
1 | See Note 7 in “Notes to financial statements.” |
See accompanying notes, which are an integral part of the financial statements.
20
Financial highlights
Delaware Small Cap Value 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 net investment income to average net assets |
Portfolio turnover |
1 | Calculated using average shares outstanding. |
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 | 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.
22
Year ended | ||||||||||||||||||||
11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | ||||||||||||||||
$ | 55.68 | $ | 61.58 | $ | 61.81 | $ | 67.13 | $ | 58.16 | |||||||||||
0.28 | 0.39 | 0.52 | 0.37 | 0.34 | ||||||||||||||||
19.94 | (3.67 | ) | 3.63 | (4.81 | ) | 8.94 | ||||||||||||||
20.22 | (3.28 | ) | 4.15 | (4.44 | ) | 9.28 | ||||||||||||||
(0.41 | ) | (0.58 | ) | (0.42 | ) | (0.27 | ) | (0.31 | ) | |||||||||||
— | (2.04 | ) | (3.96 | ) | (0.61 | ) | — | |||||||||||||
(0.41 | ) | (2.62 | ) | (4.38 | ) | (0.88 | ) | (0.31 | ) | |||||||||||
$ | 75.49 | $ | 55.68 | $ | 61.58 | $ | 61.81 | $ | 67.13 | |||||||||||
36.52% | (5.70% | ) | 8.69% | (6.70% | ) | 16.01% | ||||||||||||||
$ | 1,016,518 | $ | 551,442 | $ | 637,146 | $ | 733,864 | $ | 881,709 | |||||||||||
1.11% | 1.14% | 1.15% | 1.15% | 1.18% | ||||||||||||||||
0.38% | 0.80% | 0.90% | 0.56% | 0.55% | ||||||||||||||||
14% | 23% | 18% | 18% | 15% |
23
Financial highlights
Delaware Small Cap Value 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 net investment income (loss) to average net assets |
Portfolio turnover |
1 | Calculated using average shares outstanding. |
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 | 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.
24
Year ended | ||||||||||||||||||||
11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | ||||||||||||||||
$ | 44.71 | $ | 49.95 | $ | 50.96 | $ | 55.65 | $ | 48.34 | |||||||||||
(0.21 | ) | 0.02 | 0.07 | (0.10 | ) | (0.10 | ) | |||||||||||||
16.06 | (3.00 | ) | 2.88 | (3.98 | ) | 7.43 | ||||||||||||||
15.85 | (2.98 | ) | 2.95 | (4.08 | ) | 7.33 | ||||||||||||||
(0.07 | ) | (0.22 | ) | — | — | (0.02 | ) | |||||||||||||
— | (2.04 | ) | (3.96 | ) | (0.61 | ) | — | |||||||||||||
(0.07 | ) | (2.26 | ) | (3.96 | ) | (0.61 | ) | (0.02 | ) | |||||||||||
$ | 60.49 | $ | 44.71 | $ | 49.95 | $ | 50.96 | $ | 55.65 | |||||||||||
35.48% | (6.38% | ) | 7.88% | (7.41% | ) | 15.17% | ||||||||||||||
$ | 51,078 | $ | 46,463 | $ | 69,109 | $ | 74,828 | $ | 105,757 | |||||||||||
1.86% | 1.89% | 1.90% | 1.90% | 1.93% | ||||||||||||||||
(0.37% | ) | 0.05% | 0.15% | (0.19% | ) | (0.20% | ) | |||||||||||||
14% | 23% | 18% | 18% | 15% |
25
Financial highlights
Delaware Small Cap Value 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 net investment income to average net assets |
Portfolio turnover |
1 | Calculated using average shares outstanding. |
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 | 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.
26
Year ended | ||||||||||||||||||||
11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | ||||||||||||||||
$ | 53.74 | $ | 59.52 | $ | 59.86 | $ | 65.05 | $ | 56.40 | |||||||||||
0.09 | 0.26 | 0.36 | 0.20 | 0.18 | ||||||||||||||||
19.28 | (3.56 | ) | 3.52 | (4.66 | ) | 8.66 | ||||||||||||||
19.37 | (3.30 | ) | 3.88 | (4.46 | ) | 8.84 | ||||||||||||||
(0.28 | ) | (0.44 | ) | (0.26 | ) | (0.12 | ) | (0.19 | ) | |||||||||||
— | (2.04 | ) | (3.96 | ) | (0.61 | ) | — | |||||||||||||
(0.28 | ) | (2.48 | ) | (4.22 | ) | (0.73 | ) | (0.19 | ) | |||||||||||
$ | 72.83 | $ | 53.74 | $ | 59.52 | $ | 59.86 | $ | 65.05 | |||||||||||
36.18% | (5.92% | ) | 8.42% | (6.92% | ) | 15.71% | ||||||||||||||
$ | 54,481 | $ | 43,823 | $ | 55,697 | $ | 62,791 | $ | 84,131 | |||||||||||
1.36% | 1.39% | 1.40% | 1.40% | 1.43% | ||||||||||||||||
0.13% | 0.55% | 0.65% | 0.31% | 0.30% | ||||||||||||||||
14% | 23% | 18% | 18% | 15% |
27
Financial highlights
Delaware Small Cap Value 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 net investment income to average net assets |
Portfolio turnover |
1 | Calculated using average shares outstanding. |
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 | 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.
28
Year ended | ||||||||||||||||||||
11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | ||||||||||||||||
$ | 59.19 | $ | 65.28 | $ | 65.29 | $ | 70.83 | $ | 61.32 | |||||||||||
0.48 | 0.55 | 0.70 | 0.57 | 0.52 | ||||||||||||||||
21.18 | (3.86 | ) | 3.86 | (5.08 | ) | 9.42 | ||||||||||||||
21.66 | (3.31 | ) | 4.56 | (4.51 | ) | 9.94 | ||||||||||||||
(0.54 | ) | (0.74 | ) | (0.61 | ) | (0.42 | ) | (0.43 | ) | |||||||||||
— | (2.04 | ) | (3.96 | ) | (0.61 | ) | — | |||||||||||||
(0.54 | ) | (2.78 | ) | (4.57 | ) | (1.03 | ) | (0.43 | ) | |||||||||||
$ | 80.31 | $ | 59.19 | $ | 65.28 | $ | 65.29 | $ | 70.83 | |||||||||||
36.84% | (5.43% | ) | 8.95% | (6.46% | ) | 16.30% | ||||||||||||||
$ | 3,958,855 | $ | 3,115,293 | $ | 2,955,897 | $ | 2,731,344 | $ | 3,270,954 | |||||||||||
0.86% | 0.89% | 0.90% | 0.90% | 0.93% | ||||||||||||||||
0.63% | 1.05% | 1.15% | 0.81% | 0.80% | ||||||||||||||||
14% | 23% | 18% | 18% | 15% |
29
Financial highlights
Delaware Small Cap Value Fund Class R6
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 net investment income to average net assets |
Portfolio turnover |
1 | Calculated using average shares outstanding. |
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 | 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.
30
Year ended | ||||||||||||||||||||
11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | ||||||||||||||||
$ | 59.32 | $ | 65.41 | $ | 65.41 | $ | 70.95 | $ | 61.38 | |||||||||||
0.61 | 0.64 | 0.81 | 0.69 | 0.65 | ||||||||||||||||
21.21 | (3.85 | ) | 3.85 | (5.08 | ) | 9.43 | ||||||||||||||
21.82 | (3.21 | ) | 4.66 | (4.39 | ) | 10.08 | ||||||||||||||
(0.61 | ) | (0.84 | ) | (0.70 | ) | (0.54 | ) | (0.51 | ) | |||||||||||
— | (2.04 | ) | (3.96 | ) | (0.61 | ) | — | |||||||||||||
(0.61 | ) | (2.88 | ) | (4.66 | ) | (1.15 | ) | (0.51 | ) | |||||||||||
$ | 80.53 | $ | 59.32 | $ | 65.41 | $ | 65.41 | $ | 70.95 | |||||||||||
37.08% | (5.28% | ) | 9.14% | (6.29% | ) | 16.52% | ||||||||||||||
$ | 1,602,565 | $ | 928,618 | $ | 605,623 | $ | 394,064 | $ | 207,719 | |||||||||||
0.69% | 0.72% | 0.72% | 0.72% | 0.75% | ||||||||||||||||
0.80% | 1.22% | 1.33% | 0.99% | 0.98% | ||||||||||||||||
14% | 23% | 18% | 18% | 15% |
31
Delaware Small Cap Value Fund | November 30, 2021 |
Delaware Group® Equity Funds V (Trust) is organized as a Delaware statutory trust and offers three series: Delaware Wealth Builder Fund, Delaware Small Cap Core Fund, and Delaware Small Cap Value Fund. These financial statements and the related notes pertain to Delaware Small Cap Value Fund (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, Institutional Class, and Class R6 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 these 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 contingent deferred sales charge (CDSC) of 1.00%, which will be incurred if redeemed during the first 12 months. Class R, Institutional Class, and Class R6 shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Class R6 shares do not pay any service fees, sub-accounting fees, and/or sub-transfer agency fees to any brokers, dealers, or other financial intermediaries.
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, 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 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 does not trade, the mean between the bid and ask prices will be used, 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. Restricted securities are valued at fair value using methods approved by the Board.
Federal 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-
32
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 ended November 30, 2021, and for all open tax years (years ended November 30, 2018–November 30, 2020), 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 “Statement of operations.” During the year ended November 30, 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. Class R6 shares will not be allocated any expenses related to service fees, sub-accounting fees, and/or sub-transfer agency fees paid to brokers, dealers, or other financial intermediaries.
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.
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 funds 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. 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. The Fund declares and pays dividends from net investment income 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 November 30, 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
33
Notes to financial statements
Delaware Small Cap Value Fund
1. Significant Accounting Policies (continued) 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 November 30, 2021, the Fund earned $1,375 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 0.75% on the first $500 million of average daily net assets of the Fund, 0.70% on the next $500 million, 0.65% on the next $1.5 billion, and 0.60% on average daily net assets in excess of $2.5 billion.
DMC may permit its affiliates, Macquarie Investment Management Global Limited (MIMGL) and Macquarie Funds Management Hong Kong Limited (together, the “Affiliated Sub-Advisors”), to execute Fund equity security trades on its behalf. DMC 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 November 30, 2021, the Fund was charged $217,794 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 November 30, 2021, the Fund was charged $521,170 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 are calculated daily and paid as invoices are received on a monthly or quarterly basis.
34
Pursuant to a distribution agreement and distribution plan, the Fund pays DDLP, the distributor and an affiliate of DMC, an annual 12b-1 fee of 0.25%, 1.00%, and 0.50% of the average daily net assets of the Class A, Class C, and Class R shares, respectively. These fees are calculated daily and paid monthly. Class R6 and Institutional Class shares do not pay 12b-1 fees.
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 and regulatory reporting services to the Fund. For the year ended November 30, 2021, the Fund was charged $219,656 for internal legal 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 November 30, 2021, DDLP earned $47,742 for commissions on sales of the Fund’s Class A shares. For the year ended November 30, 2021, DDLP received gross CDSC commissions of $260 and $7,686 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.
Cross trades for the year ended November 30, 2021, were executed by the Funds pursuant to procedures adopted by the Boards designed to ensure compliance with Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds of investment companies, or between a fund of an investment company and another entity, that are or could be considered affiliates by virtue of having a common investment advisor (or affiliated investment advisors), common directors/ trustees and/or common officers. At their regularly scheduled meetings, the Boards review a report related to the Funds’ compliance with the procedures adopted by the Boards. Pursuant to these procedures, for the year ended November 30, 2021, the Fund engaged in Rule 17a-7 securities purchases of $85,801,736. The Fund did not engage in Rule 17a-7 securities sales for the year ended November 30, 2021.
3. Investments
For the year ended November 30, 2021, the Fund made purchases and sales of investment securities other than short-term investments as follows:
Purchases | $ | 895,344,143 | |
Sales | 832,355,350 |
35
Notes to financial statements
Delaware Small Cap Value 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 which approximate the tax basis unrealized gains and losses that may be realized and distributed to shareholders. At November 30, 2021, the cost and unrealized appreciation (depreciation) of investments for federal income tax purposes for the Fund were as follows:
Cost of investments | $ | 4,279,943,429 | ||
Aggregate unrealized appreciation of investments | $ | 2,662,749,897 | ||
Aggregate unrealized depreciation of investments | (260,392,699 | ) | ||
Net unrealized appreciation of investments | $ | 2,402,357,198 |
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
36
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 November 30, 2021:
Level 1 | |||
Securities | |||
Assets: | |||
Common Stock | $ | 6,593,326,825 | |
Short-Term Investments | 88,973,802 | ||
Total Value of Securities | $ | 6,682,300,627 |
During the year ended November 30, 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 or end of the year in relation to the Fund’s net assets. During the year ended November 30, 2021, there were no Level 3 investments.
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 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 November 30, 2021 and 2020 were as follows:
Year ended | ||||||
11/30/21 | 11/30/20 | |||||
Ordinary income | $ | 42,304,028 | $ | 47,922,741 | ||
Long-term capital gains | — | 136,386,048 | ||||
Total | $ | 42,304,028 | $ | 184,308,789 |
37
Notes to financial statements
Delaware Small Cap Value Fund
5. Components of Net Assets on a Tax Basis
As of November 30, 2021, the components of net assets on a tax basis were as follows:
Shares of beneficial interest | $ | 3,991,900,784 | |
Undistributed ordinary income | 31,823,932 | ||
Undistributed long-term capital gains | 257,415,327 | ||
Unrealized appreciation (depreciation) of investments | 2,402,357,198 | ||
Net assets | $ | 6,683,497,241 |
The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales.
For financial reporting purposes, capital accounts are adjusted to reflect the tax character of permanent book/tax differences. Reclassifications are primarily due to the tax treatment of wash sales from the merger. Results of operations and net assets were not affected by these reclassifications. For the year ended November 30, 2021, the Fund recorded the following reclassifications:
Paid-in capital | $ | 1,754,227 | ||
Total distributable earnings (loss) | (1,754,227 | ) |
For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. At November 30, 2021, the Fund utilized $38,247,652 capital loss carryforwards.
38
6. Capital Shares
Transactions in capital shares were as follows:
Year ended | |||||||
11/30/21 | 11/30/20 | ||||||
Shares sold: | |||||||
Class A | 3,474,425 | 2,909,812 | |||||
Class C | 247,169 | 236,401 | |||||
Class R | 267,971 | 227,744 | |||||
Institutional Class | 13,773,855 | 25,659,869 | |||||
Class R6 | 9,815,380 | 11,282,268 | |||||
Shares from merger:1 | |||||||
Class A | 3,572,733 | — | |||||
Institutional Class | 30,921 | — | |||||
Class R6 | 3,419 | — | |||||
Shares issued upon reinvestment of dividends and distributions: | |||||||
Class A | 67,207 | 433,909 | |||||
Class C | 1,413 | 62,070 | |||||
Class R | 3,871 | 38,657 | |||||
Institutional Class | 423,912 | 1,864,838 | |||||
Class R6 | 152,940 | 409,481 | |||||
31,835,216 | 43,125,049 | ||||||
Shares redeemed: | |||||||
Class A | (3,552,435 | ) | (3,787,725 | ) | |||
Class C | (443,477 | ) | (642,826 | ) | |||
Class R | (339,226 | ) | (386,778 | ) | |||
Institutional Class | (17,571,312 | ) | (20,166,039 | ) | |||
Class R6 | (5,726,210 | ) | (5,296,959 | ) | |||
(27,632,660 | ) | (30,280,327 | ) | ||||
Net increase | 4,202,556 | 12,844,722 |
1 | See Note 7. |
39
Notes to financial statements
Delaware Small Cap Value Fund
6. Capital Shares (continued)
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 November 30, 2021 and 2020, the Fund had the following exchange transactions:
Exchange Redemptions | Exchange Subscriptions | ||||||||||||||||||
Institutional | Institutional | ||||||||||||||||||
Class A | Class C | Class | Class R6 | Class A | Class | Class R6 | |||||||||||||
Shares | Shares | Shares | Shares | Shares | Shares | Shares | Value | ||||||||||||
Year ended | |||||||||||||||||||
11/30/21 | 52,996 | 9,112 | 3,561,720 | 42,700 | 7,665 | 81,120 | 3,564,685 | $ | 287,811,324 | ||||||||||
11/30/20 | 11,650 | 7,387 | 51,430 | 3,811 | 4,924 | 15,758 | 51,397 | 4,454,823 |
7. Reorganization
On July 9, 2021, the Board approved a proposal to reorganize Delaware Special Situations Fund, a series of Delaware Group® Equity Funds IV (the “Acquired Fund”) with and into Delaware Small Cap Value Fund (the “Acquiring Fund”), (the “Reorganization”). Pursuant to an Agreement and Plan of Reorganization (the “Plan”): (i) all of the property, assets, and goodwill of the Acquired Fund were acquired by the Acquiring Fund, and (ii) the Trust, on behalf of the Acquiring Fund, assumed the liabilities of the Acquired Fund, in exchange for shares of the Acquiring Fund. In accordance with the Plan, the Acquired Fund liquidated and dissolved following the Reorganization. The purpose of the transaction was to allow shareholders of the Acquired Fund to own shares of a Fund with a similar investment objective and style as, and potentially lower net expenses than the Acquired Fund. The Reorganization was accomplished by a tax-free exchange of shares on July 9, 2021. For financial reporting purposes, assets received and shares issued by the Acquiring Fund were recorded at fair value; however, the cost basis of the investments received from the Acquired Fund was carried forward to align ongoing reporting of the Acquiring Fund’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.
The share transactions associated with the Reorganization are as follows:
Shares | ||||||||||||
Acquired | Acquired | Converted | Acquiring | |||||||||
Fund | Fund Shares | to Acquiring | Fund | Conversion | ||||||||
Net Assets | Outstanding | Fund | Net Assets | Ratio | ||||||||
Delaware Special Situations Fund | Delaware Small Cap Value Fund | |||||||||||
Class A | $ | 263,274,700 | 9,535,508 | 3,572,733 | $ | 787,782,148 | 0.3747 | |||||
Institutional | ||||||||||||
Class | 2,421,400 | 85,380 | 30,921 | 4,144,979,722 | 0.3622 | |||||||
Class R6 | 268,290 | 9,355 | 3,419 | 1,299,571,877 | 0.3655 |
The net assets of the Acquiring Fund before the Reorganization were $6,341,614,884. The net assets of the Acquiring Fund immediately following the Reorganization were $6,607,579,274.
40
Assuming the Reorganization had been completed on December 1, 2020, the Acquiring Fund’s pro forma results of operations for the year ended November 30, 2021, would have been as follows:
Net investment income | $ | 38,807,672 | |
Net realized gain on investments | 321,924,803 | ||
Net change in unrealized appreciation (depreciation) | 1,513,591,568 | ||
Net increase in net assets resulting from operations | $ | 1,874,324,043 |
Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practical to separate the amounts of revenue and earnings of the Acquired Fund that have been included in the Acquiring Fund’s Statement of Operations since the Reorganization was consummated on July 9, 2021.
8. Line of Credit
The Fund, along with certain other funds in the Delaware Funds (Participants), is a participant in a $225,000,000 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. Under the Agreement, the Participants are charged an annual commitment fee of 0.15% with the addition of an upfront fee of 0.05%, which is allocated across the Participants based on a weighted average of the respective net assets of each Participant. The Participants are permitted to borrow up to a maximum of one-third of their net assets under the Agreement. Each Participant is 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 1, 2021.
On November 1, 2021, the Fund, along with the other Participants, entered into an amendment to the agreement for a $355,000,000 revolving line of credit to be used as described above and operates in substantially the same manner as the original Agreement. Under the amendment to the agreement, the Participants are charged an annual commitment fee of 0.15%, with the addition of an upfront fee of 0.05%, which is allocated across the Participants based on a weighted average of the respective net assets of each Participant. The line of credit available under the agreement expires on October 31, 2022.
The Fund had no amounts outstanding as of November 30, 2021, or at any time during the year then ended.
9. 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 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
41
Notes to financial statements
Delaware Small Cap Value Fund
9. Securities Lending (continued)
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; certain money market funds; and asset-backed securities. The 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 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 November 30, 2021, the Fund had no securities out on loan.
42
10. 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 Fund invests will cause the NAV of the Fund to fluctuate.
The Fund invests in growth stocks (such as those in the financial services sector), which reflect projections of future earnings and revenue. These prices may rise or fall dramatically depending on whether those projections are met. These companies’ stock prices may be more volatile, particularly over the short term.
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 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 November 30, 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 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. As of November 30, 2021, there were no Rule 144A securities held by the Fund.
11. 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.
43
Notes to financial statements
Delaware Small Cap Value Fund
12. Subsequent Events
Management has determined that no material events or transactions occurred subsequent to November 30, 2021, that would require recognition or disclosure in the Fund’s financial statements.
44
Report of independent
registered public accounting firm
To the Board of Trustees of Delaware Group® Equity Funds V and Shareholders of Delaware Small Cap Value Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Delaware Small Cap Value Fund (one of the funds constituting Delaware Group® Equity Funds V, referred to hereafter as the “Fund”) as of November 30, 2021, the related statement of operations for the year ended November 30, 2021, the statements of changes in net assets for each of the two years in the period ended November 30, 2021, including the related notes, and the financial highlights for each of the five years in the period ended November 30, 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 November 30, 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 November 30, 2021 and the financial highlights for each of the five years in the period ended November 30, 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 November 30, 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
January 21, 2022
We have served as the auditor of one or more investment companies in Delaware Funds by Macquarie® since 2010.
45
Other Fund information (Unaudited)
Delaware Small Cap Value 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 November 30, 2021, the Fund reports distributions paid during the year as follows:
(A) Ordinary Income Distribution (Tax Basis)* | 100.00 | % | |
Total Distributions (Tax Basis) | 100.00 | % | |
(B) Qualified Dividends1 | 100.00 | % |
(A) is based on a percentage of the Fund’s total distributions. | |
(B) 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 November 30, 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 income is 100%. Complete information will be computed and reported in conjunction with your 2021 Form 1099-DIV. |
For the fiscal year ended November 30, 2021, certain dividends paid by the Fund, determined to be 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 Creations Act of 2010; and as extended by the American Taxpayer Relief Act of 2012. For the year ended November 30, 2021, the Fund has reported maximum distributions of Qualified Short-Term Capital Gain of $4,067,262.
46
Board consideration of Investment Advisory and Sub-Advisory Agreements for Delaware Small Cap Value Fund at a meeting held August 10-12, 2021
At a meeting held on August 10-12, 2021 (the “Annual Meeting”), the Board of Trustees (the “Board”), including a majority of disinterested or independent Trustees, approved the renewal of the Investment Advisory and Sub-Advisory Agreements for Delaware Small Cap Value Fund (the “Fund”). In making its decision, the Board considered information furnished at regular quarterly Board meetings, including reports detailing Fund performance, investment strategies, and expenses, as well as information prepared specifically in connection with the renewal of the investment advisory and sub-advisory contracts. Information furnished specifically in connection with the renewal of the Investment Management Agreement with Delaware Management Company (“DMC”), a series of Macquarie Investment Management Business Trust (“MIMBT”), and the Sub-Advisory Agreements with Macquarie Funds Management Hong Kong Limited (“MFMHK”) and Macquarie Investment Management Global Limited (“MIMGL”) (the “Sub-Advisers”), included materials provided by DMC and its affiliates (collectively, “Macquarie Asset Management”) concerning, among other things, the nature, extent, and quality of services provided to the Fund; the costs of such services to the Fund; economies of scale; and the investment manager’s financial condition and profitability. In addition, in connection with the Annual Meeting, materials were provided to the Trustees in May 2021, including reports provided by Broadridge Financial Solutions (“Broadridge”). The Broadridge reports compared the Fund’s investment performance and expenses with those of other comparable mutual funds. The Independent Trustees reviewed and discussed the Broadridge reports with independent legal counsel to the Independent Trustees. In addition to the information noted above, the Board also requested and received information regarding DMC’s policy with respect to advisory fee levels and its breakpoint philosophy; the structure of portfolio manager compensation; comparative client fee information; and any constraints or limitations on the availability of securities for certain investment styles, which had in the past year inhibited, or which were likely in the future to inhibit, the investment manager’s ability to invest fully in accordance with Fund policies.
In considering information relating to the approval of the Fund’s advisory and sub-advisory agreements, as applicable, the Independent Trustees received assistance and advice from and met separately with independent legal counsel to the Independent Trustees and also received assistance and advice from 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.
Nature, extent, and quality of services. The Board considered the services provided by DMC to the Fund and its shareholders. In reviewing the nature, extent, and quality of services, the Board considered reports furnished to it throughout the year, which covered matters such as the relative performance of the Fund; compliance of portfolio managers with the investment policies, strategies, and restrictions for the Fund; compliance by DMC and Delaware Distributors, L.P. (together, “Management”) personnel with the Code of Ethics adopted throughout the Delaware Funds by Macquarie® (“Delaware Funds”); and adherence to fair value pricing procedures as established by the Board. The Board was pleased with the current staffing of DMC and the emphasis placed on research in the investment process. The Board recognized DMC’s receipt of certain favorable industry distinctions during the past several years. The
47
Other Fund information (Unaudited)
Delaware Small Cap Value Fund
Board consideration of Investment Advisory and Sub-Advisory Agreements for Delaware Small Cap Value Fund at a meeting held August 10-12, 2021 (continued)
Board gave favorable consideration to DMC’s efforts to control expenses while maintaining service levels committed to Fund matters. The Board also noted the benefits provided to Fund shareholders through (a) each shareholder’s ability to: (i) exchange an investment in one Delaware Fund for the same class of shares in another Delaware Fund without a sales charge, or (ii) reinvest Fund dividends into additional shares of the Fund or into additional shares of other Delaware Funds, and (b) the privilege to combine holdings in other Delaware Funds to obtain a reduced sales charge. The Board was satisfied with the nature, extent, and quality of the overall services provided by DMC.
Nature, extent, and quality of services. The Board considered the services provided by each 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.
Investment performance. The Board placed significant emphasis on the investment performance of 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 Fund’s investment performance in comparison to a group of similar funds (the “Performance Universe”). A fund with the best performance ranked first, and a fund with the poorest performance ranked last. The highest/best performing 25% of funds in the Performance Universe make up the first quartile; the next 25%, the second quartile; the next 25%, the third quartile; and the poorest/worst performing 25% of funds in the Performance Universe make up the fourth quartile. Comparative annualized performance for the Fund was shown for the past 1-, 3-, 5-, and 10-year periods, to the extent applicable, ended December 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 Performance Universe for the Fund consisted of the Fund and all retail and institutional small-cap value funds. The Broadridge report comparison showed that the Fund’s total return for the 1-year period was in the fourth quartile of the Performance Universe. The report further showed that the Fund’s total return for the 3-year period was in the third quartile of its Performance Universe and the Fund’s total return for the 5- and 10-year periods was in the second quartile of its Performance Universe. The Board was satisfied with performance.
Comparative expenses. The Board considered expense data for the Delaware Funds. Management provided the Board with information on pricing levels and fee structures for the Fund as of its most recently completed fiscal year. The Board also focused on the comparative analysis of effective management fees and total expense ratios of the Fund versus effective management fees and total
48
expense ratios of a group of similar funds (the “Expense Group”). In reviewing comparative costs, the Fund’s contractual management fee and the actual management fee incurred by the Fund were compared with the contractual management fees (assuming all funds in the Expense Group were similar in size to the Fund) and actual management fees (as reported by each fund) within the Expense Group, taking into account any applicable breakpoints and fee waivers. The Fund’s total expenses were also compared with those of its Expense Group and, for comparative consistency, included 12b-1 and non-12b-1 service fees. The Board’s objective is for each Fund’s total expense ratio to be competitive with those of the peer funds within its Expense Group.
The expense comparisons for the Fund showed that its actual management fee was in the quartile with the second lowest expenses of its Expense Group and its total expenses were in the quartile with the second highest expenses of its Expense Group. The Board gave favorable consideration to the Fund’s management fee but noted that the Fund’s total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered initiatives implemented by Management, such as the negotiation of lower fees for fund accounting, fund accounting oversight, and custody services, which had created an opportunity for a further reduction in expenses. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and to bring it in line with the Board’s objective.
Management profitability. The Board considered the level of profits realized by DMC in connection with the operation of the Fund. In this respect, the Board reviewed the Investment Management Profitability Analysis that addressed the overall profitability of DMC’s business in providing management and other services to each of the individual funds and the Delaware Funds as a whole. Specific attention was given to the methodology used by DMC in allocating costs for the purpose of determining profitability. Management stated that the level of profits of DMC, to a certain extent, reflects recent operational cost savings and efficiencies initiated by DMC. The Board considered DMC’s efforts to improve services provided to Fund shareholders and to meet additional regulatory and compliance requirements resulting from recent industry-wide Securities and Exchange Commission initiatives. The Board also considered the extent to which DMC might derive ancillary benefits from fund operations, including the potential for procuring additional business as a result of the prestige and visibility associated with its role as service provider to the Delaware Funds and the benefits from allocation of fund brokerage to improve trading efficiencies. As part of its work, the Board also reviewed a report prepared by JDL regarding MIMBT profitability as compared to certain peer fund complexes and the Independent Trustees discussed with JDL personnel regarding DMC’s profitability in such context. The Board found that the management fees were reasonable in light of the services rendered and the level of profitability of DMC.
Management profitability. Trustees were also given available information on profits being realized by each of the Sub-Advisers in relation to the services being provided to the Fund and in relation to each Sub-Adviser’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 information on potential fall-out benefits derived or to be derived by the Sub-Advisers in connection with their relationship to the Fund, such as reputational enhancement, soft dollar arrangements, or commissions paid to affiliated broker/dealers, as applicable.
49
Other Fund information (Unaudited)
Delaware Small Cap Value Fund
Board consideration of Investment Advisory and Sub-Advisory Agreements for Delaware Small Cap Value Fund at a meeting held August 10-12, 2021 (continued)
Economies of scale. The Trustees considered whether economies of scale are realized by DMC as the Fund’s assets increase and the extent to which any economies of scale are reflected in the level of management fees charged. The Trustees reviewed the Fund’s advisory fee pricing and structure, approved by the Board and shareholders, which includes breakpoints, and which applies to most funds in the Delaware Funds complex. Breakpoints in the advisory fee occur when the advisory fee rate is reduced on assets in excess of specified levels. Breakpoints result in a lower advisory fee than would otherwise be the case in the absence of breakpoints, when the asset levels specified in the breakpoints are exceeded. The Board noted that, as of March 31, 2021, the Fund’s net assets exceeded the final breakpoint level. The Board believed that, given the extent to which economies of scale might be realized by DMC and its affiliates, the schedule of fees under the Investment Management Agreement provides a sharing of benefits with the Fund and its shareholders.
50
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 | 150 | 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) |
51
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 | 150 | 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 | 150 | 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 | 150 | 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) |
52
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 | 150 | 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 |
53
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 | |||||
H. Jeffrey Dobbs3 | Trustee | Since December 2021 | Global Sector Chairman, | 150 | Director, Valparaiso University | |||||
610 Market Street | Industrial Manufacturing, | (2012–Present) | ||||||||
Philadelphia, PA | KPMG LLP | Director, TechAccel LLC | ||||||||
19106-2354 | (2010-2015) | (2015–Present) (Tech R&D) | ||||||||
May 1955 | Board Member, Kansas City | |||||||||
Repertory Theatre | ||||||||||
(2015–Present) | ||||||||||
Board Member, Patients | ||||||||||
Voices, Inc. (healthcare) | ||||||||||
(2018–Present) | ||||||||||
Kansas City Campus for Animal | ||||||||||
Care (2018–Present) | ||||||||||
Director, National Association of | ||||||||||
Manufacturers (2010–2015) | ||||||||||
Director, The Children’s Center | ||||||||||
(2003–2015) | ||||||||||
Director, Metropolitan Affairs | ||||||||||
Coalition (2003–2015) | ||||||||||
Director, Michigan Roundtable | ||||||||||
for Diversity and Inclusion | ||||||||||
(2003–2015) | ||||||||||
Trustee, Ivy Funds Complex | ||||||||||
(2019–2021) |
54
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 | |||||
John A. Fry | Trustee | Since January 2001 | Drexel University | 150 | Director; Compensation | |||||
610 Market Street | (August 2010–Present) | Committee and Governance | ||||||||
Philadelphia, PA | President — Franklin & Marshall | Committee Member — | ||||||||
19106-2354 | College | Community Health Systems | ||||||||
May 1960 | (July 2002–June 2010) | (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) |
55
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 | |||||
Joseph Harroz, Jr.3 | Trustee | Since December 2021 | President (2020–Present), Interim | 150 | Director, OU Medicine, Inc. | |||||
610 Market Street | President (2019–2020), Vice | (2020–Present) | ||||||||
Philadelphia, PA | President (2010–2019) and Dean | Director and Shareholder, | ||||||||
19106-2354 | (2010–2019), College of Law, | Valliance Bank | ||||||||
January 1967 | University of Oklahoma; | (2007–Present) | ||||||||
Managing Member, Harroz | Director, Foundation Healthcare | |||||||||
Investments, LLC, (commercial | (formerly Graymark HealthCare) | |||||||||
enterprises) (1998–2019); | (2008–2017) | |||||||||
Managing Member, St. Clair, | Trustee, the Mewbourne Family | |||||||||
LLC (commercial enterprises) | Support Organization | |||||||||
(2019–Present) | (2006–Present) (non-profit) | |||||||||
Independent Director, LSQ | ||||||||||
Manager, Inc. (real estate) | ||||||||||
(2007–2016) | ||||||||||
Director, Oklahoma Foundation | ||||||||||
for Excellence (non-profit) | ||||||||||
(2008–Present) | ||||||||||
Trustee, Ivy Funds Complex | ||||||||||
(1998–2021) |
56
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 | |||||
Sandra A.J. | Trustee | Since December 2021 | Chief Administrative Officer, | 150 | Director, Hall Family Foundation | |||||
Lawrence3 | Children’s Mercy Hospitals and | (1993–Present) | ||||||||
610 Market Street | Clinics | Director, Westar Energy (utility) | ||||||||
Philadelphia, PA | (2016–2019); | (2004–2018) | ||||||||
19106-2354 | CFO, Children’s Mercy Hospitals | Trustee, Nelson-Atkins Museum | ||||||||
September 1957 | and Clinics | of Art (non-profit) (2021–Present) | ||||||||
(2005–2016) | (2007–2020) | |||||||||
Director, Turn the Page KC | ||||||||||
(non-profit) (2012–2016) | ||||||||||
Director, Kansas Metropolitan | ||||||||||
Business and Healthcare | ||||||||||
Coalition (non-profit) (2017–2019) | ||||||||||
Director, National Association of | ||||||||||
Corporate Directors (non-profit) | ||||||||||
National Board (2022–Present); | ||||||||||
Regional Board (2017–2021) | ||||||||||
Director, American Shared | ||||||||||
Hospital Services (medical | ||||||||||
device) (2017–2021) | ||||||||||
Director, Evergy, Inc., Kansas | ||||||||||
City Power & Light Company, | ||||||||||
KCP&L Greater Missouri | ||||||||||
Operations Company, Westar | ||||||||||
Energy, Inc. and Kansas Gas and | ||||||||||
Electric Company (related utility | ||||||||||
companies) (2018–Present) |
57
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 | |||||
Sandra A.J. | Trustee | Since December 2021 | Chief Administrative Officer, | 150 | Director, Stowers (research) | |||||
Lawrence3 | Children’s Mercy Hospitals and | (2018) | ||||||||
(continued) | Clinics | Co-Chair, Women Corporate | ||||||||
610 Market Street | (2016–2019); | Directors (director education) | ||||||||
Philadelphia, PA | CFO, Children’s Mercy Hospitals | (2018–2020) | ||||||||
19106-2354 | and Clinics | Trustee, Ivy Funds Complex | ||||||||
September 1957 | (2005–2016) | (2019-2021) | ||||||||
Director, Brixmor Property | ||||||||||
Group Inc. | ||||||||||
(2021–Present) | ||||||||||
Director, Sera Prognostics Inc. | ||||||||||
(biotechnology) | ||||||||||
(2021–Present) | ||||||||||
Director, Recology (resource | ||||||||||
recovery) | ||||||||||
(2021–Present) |
58
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 | 150 | 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; Audit | ||||||||
January 1956 | Executive Advisor to Dean | and Compensation | ||||||||
(August 2011–March 2012) and | Committee Member — | |||||||||
Interim Dean | Callon Petroleum Company | |||||||||
(January 2011–July 2011) — | (December 2019–Present) | |||||||||
University of Miami School of | Director — New Senior | |||||||||
Business Administration | Investment Group Inc. | |||||||||
President — U.S. Trust, Bank of | (January 2021–September 2021) | |||||||||
America Private Wealth | Director; Audit Committee | |||||||||
Management (Private Banking) | Member — Carrizo Oil & Gas, | |||||||||
(July 2007-December 2008) | Inc. (March 2018–December | |||||||||
2019) |
59
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 | |||||
Thomas K. Whitford | Trustee | Since January 2013 | Vice Chairman — PNC Financial | 150 | Director — HSBC North America | |||||
610 Market Street | Services Group | Holdings Inc. | ||||||||
Philadelphia, PA | (2010–April 2013) | (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) |
60
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 | 150 | 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–October 2021), | ||||||||||
The Merger Fund VL | ||||||||||
(2013–October 2021); WCM | ||||||||||
Alternatives: Event-Driven Fund | ||||||||||
(2013–October 2021), and WCM | ||||||||||
Alternatives: Credit Event Fund | ||||||||||
(December 2017–October 2021) | ||||||||||
Director; Chair of Governance | ||||||||||
Committee and Audit Committee | ||||||||||
Member — International | ||||||||||
Securities Exchange (2010–2016) |
61
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 | |||||
Janet L. Yeomans | Trustee | Since April 1999 | Vice President and Treasurer | 150 | 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 | 150 | None4 | |||||
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 | 150 | None4 | |||||
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 |
62
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 | 150 | 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 | Messrs. Dobbs and Harroz and Ms. Lawrence were elected as Trustees of the Trust effective December 17, 2021. |
4 | David F. Connor serves as Senior Vice President and Secretary, and Daniel V. Geatens serves as Senior Vice President, Treasurer, and Chief Financial Officer, 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 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.
63
Board of trustees | ||||||
Shawn K. Lytle Jerome D. Abernathy Thomas L. Bennett | Ann D. Borowiec Joseph W. Chow H. Jeffrey Dobbs | John A. Fry Joseph Harroz, Jr. Sandra A.J. Lawrence | Frances A. Thomas K. Whitford Christianna Wood Janet L. Yeomans | |||
Affiliated officers | ||||||
David F. Connor Senior Vice President, General Counsel, and Secretary Delaware Funds by Macquarie Philadelphia, PA | Daniel V. Geatens Senior Vice President and Treasurer Delaware Funds by Macquarie Philadelphia, PA | Richard Salus Senior Vice President and Chief Financial Officer Delaware Funds by Macquarie Philadelphia, PA |
This annual report is for the information of Delaware Small Cap Value 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.
64
Annual report | |
Multi-asset mutual fund
Delaware Wealth Builder Fund
November 30, 2021
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.
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 Wealth Builder 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.
None of the entities noted in this document is an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia) and the obligations of these entities do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (Macquarie Bank). Macquarie Bank does not guarantee or otherwise provide assurance in respect of the obligations of these entities. In addition, if this document relates to an investment, (a) each investor is subject to investment risk including possible delays in repayment and loss of income and principal invested and (b) none of Macquarie Bank or any other Macquarie Group company guarantees any particular rate of return on or the performance of the investment, nor do they guarantee repayment of capital in respect of the investment.
The Fund is governed by US laws and regulations.
Unless otherwise noted, views expressed herein are current as of November 30, 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.
© 2022 Macquarie Management Holdings, Inc.
Portfolio management review | |
Delaware Wealth Builder Fund | December 7, 2021 (Unaudited) |
Performance preview (for the year ended November 30, 2021)
Delaware Wealth Builder Fund (Institutional Class shares) | 1-year return | +16.93% | ||
Delaware Wealth Builder Fund (Class A shares) | 1-year return | +16.63% | ||
60% S&P 500® Index / 40% Bloomberg US Aggregate Index | ||||
(primary benchmark) | 1-year return | +15.62% | ||
S&P 500 Index (secondary benchmark) | 1-year return | +27.92% |
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Wealth Builder Fund, please see the table on page 4.
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. 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 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 to provide high current income and an investment that has the potential for capital appreciation.
Economic backdrop
The Fund’s fiscal year ended November 30, 2021, was notably strong from a performance perspective. Stocks rallied during most of the 12-month period, although volatility began to rise in the last three months. Fixed income markets, on the other hand, tended to experience losses against the backdrop of rising inflationary pressure and consequently rising yields.
The Fund’s fiscal year began with a new wave of COVID-19-related lockdowns around the world, but also with optimism as vaccinations began to roll out in December 2020. The shift of power to Democrats in the White House and Congress enabled further stimulus packages in 2021. Rising demand led to supply bottlenecks and sharply rising energy prices. This price pressure contributed to the highest inflation rates in years and led to discussions about the US Federal Reserve’s tapering its monthly bond purchases. Accordingly, yields also rose significantly. In September 2021, the Fed began to speak officially about the possibility of starting to reduce the pace
1
Portfolio management review
Delaware Wealth Builder Fund
of its asset purchases in 2021 and finally, in its November meeting, it decided to begin implementing this tapering policy.
China also caused a lot of turbulence over the summer, with tough government regulatory measures against its own technology sector, the collapse of real estate giant Evergrande, and electricity shortages in the country that led to power rationing.
After seven positive months, stock markets recorded their first monthly loss in September 2021 in the face of various uncertainties, including the US debt ceiling debate. This debate ended with, at least, the temporary postponement of a government shutdown. Against the backdrop of strong third-quarter earnings results, equities again reached new highs before a new, worrying COVID-19 variant, Omicron, was detected at the end of November, causing another setback for equities.
With in the Fund
For the fiscal year ended November 30, 2021, Delaware Wealth Builder Fund outperformed its primary benchmark, a blend of 60% S&P 500 Index and 40% Bloomberg US Aggregate Index. The Fund underperformed its secondary benchmark, the S&P 500 Index. The Fund’s Institutional Class shares gained 16.93%. The Fund’s Class A shares rose 16.63% at net asset value and 9.90% at maximum offer price. These figures reflect all distributions reinvested. During the same period, the blend of 60% S&P 500 Index and 40% Bloomberg US Aggregate Index rose 15.62% and the S&P 500 Index gained 27.92%. For complete, annualized performance of Delaware Wealth Builder Fund, please see the table on page 4.
The Fund’s outperformance for the fiscal year largely resulted from its equity exposure, which was to a large extent allocated to value as well as quality and income equities. While value underperformed US large-cap core equities for the 12-month period, the quality and income allocation and, even more, the allocation to US real estate investment trusts (REITs) outperformed the secondary benchmark. Moreover, the overweight of equities contributed to the Fund’s outperformance against the primary benchmark. Within the fixed income allocation, the Fund benefited from its allocation to convertible bonds and high yield corporates, both of which outperformed the fixed income part of the benchmark during the 12-month period. An allocation to the sleeve holding opportunistic off-benchmark assets slightly offset the Fund’s overall outperformance as this sleeve trailed the Fund’s benchmark.
Portfolio positioning
The Fund’s strategic policy weights reflect a commitment to seeking diversification across geographies and asset classes. As part of the oversight process, we periodically analyze the sources of the Fund’s active performance.
During the fiscal year, the Fund’s active positioning with respect to the strategic policy weights of different asset classes also contributed to performance, relative to its hypothetical returns at the strategic policy weights.
We periodically examine derivatives’ contribution to the Fund’s performance. Based on the available information, the Fund’s combination of futures, options, swaps, and currency positions had only a limited effect on performance for the 12-month period.
As the Fund’s fiscal year ended, we sought to continue to deliver the potential benefits of diversification while actively managing risk. The Fund, therefore, seeks to deliver returns that are derived from tactical asset allocation decisions as well as from active management of individual asset classes and investment styles. We manage the Fund based on the assumption that investors
2
should keep a global perspective when evaluating potential investment opportunities, and, as a result, we continue to include investment possibilities around the globe within the Fund.
The growth outlook at the end of the Fund’s fiscal year has become opaque, in our view, against the backdrop of once again sharply rising COVID-19 infections in several countries around the world and the appearance of the Omicron variant. As of fiscal year end, it was suspected that the new variant could be more infectious than previous variants and could therefore lead to a new wave of restrictive measures, which would be harmful for the economic outlook. As inflation remained an issue and the labor market continued to improve, the Fed began tapering its asset purchases in November and indicated that it could tighten monetary policy more rapidly than previously assumed. Whether or not the economy will stay on the path to recovery, will be heavily dependent on how the COVID-19 situation and monetary policy evolve over the coming months.
In our view, a thoughtful active management approach is needed given the increased uncertainty. We believe vigilant and continuous assessment of the current market environment offers opportunities to take advantage of market dislocations and may help us achieve what we consider to be attractive risk-adjusted returns through an active focus on portfolio risk and diversification.
3
Performance summary | |
Delaware Wealth Builder Fund | November 30, 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 November 30, 2021 | |||||||
1 year | 5 year | 10 year | Lifetime | |||||
Class A (Est. December 2, 1996) | ||||||||
Excluding sales charge | +16.63% | +6.93% | +8.16% | +7.58% | ||||
Including sales charge | +9.90% | +5.68% | +7.52% | +7.33% | ||||
Class C (Est. October 1, 2003) | ||||||||
Excluding sales charge | +15.84% | +6.13% | +7.35% | +5.81% | ||||
Including sales charge | +14.84% | +6.13% | +7.35% | +5.81% | ||||
Class R (Est. October 1, 2003) | ||||||||
Excluding sales charge | +16.32% | +6.67% | +7.89% | +6.32% | ||||
Including sales charge | +16.32% | +6.67% | +7.89% | +6.32% | ||||
Institutional Class (Est. December 2, 1996) | ||||||||
Excluding sales charge | +16.93% | +7.19% | +8.44% | +7.78% | ||||
Including sales charge | +16.93% | +7.19% | +8.44% | +7.78% | ||||
60% S&P 500 Index / 40% Bloomberg | ||||||||
Barclays US Aggregate Index | +15.62% | +12.51% | +11.07% | +8.09%* | ||||
S&P 500 Index | +27.92% | +17.90% | +16.16% | +9.60%* |
* | 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. |
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 in the “Fund expense ratios” table on page 6. 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. 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 (CDSC) of 1.00% if redeemed during the first 12 months. They are also subject to an
4
annual 12b-1 fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales charges, assumes either that CDSCs 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.
The Fund may invest up to 45% of its net assets in high yield, higher-risk corporate bonds.
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. This includes 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. The high yield secondary market is particularly susceptible to liquidity problems when institutional investors, such as mutual funds and certain other financial institutions, temporarily stop buying bonds for regulatory, financial, or other reasons. In addition, a less liquid secondary market makes it more difficult for to obtain precise valuations of the high yield securities.
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.
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.
5
Performance summary
Delaware Wealth Builder Fund
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 0.83% of the Fund’s average daily net assets from December 1, 2020 to November 30, 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) | 1.12% | 1.87% | 1.34% | 0.87% | ||||
Net expenses (including fee | ||||||||
waivers, if any) | 1.08% | 1.83% | 1.33% | 0.83% | ||||
Type of waiver | Contractual | Contractual | Contractual | Contractual |
* | The aggregate contractual waiver period covering this report is from March 27, 2021 through March 31, 2022. |
6
Performance of a $10,000 investment1
Average annual total returns from November 30, 2011 through November 30, 2021
For period beginning November 30, 2011 through November 30, 2021 | Starting value | Ending value | |||
S&P 500 Index | $10,000 | $44,726 | |||
60% S&P 500 Index / 40% Bloomberg Barclays US Aggregate Index | $10,000 | $28,573 | |||
Delaware Wealth Builder Fund — Institutional Class shares | $10,000 | $22,477 | |||
Delaware Wealth Builder Fund — Class A shares | $9,425 | $20,656 |
1 | The “Performance of a $10,000 investment” graph assumes $10,000 invested in Institutional Class and Class A shares of the Fund on November 30, 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 6. Please note additional details on pages 4 through 8. |
The graph also assumes $10,000 invested in the 60% S&P 500 Index / 40% Bloomberg US Aggregate Index (the Fund’s primary benchmark) and the S&P 500 Index (the Fund’s secondary benchmark) as of November 30, 2011. The Bloomberg US Aggregate Index is a broad composite that tracks the investment grade domestic bond market. 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.
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 does not guarantee future results.
Performance of other Fund classes will vary due to different charges and expenses.
7
Performance summary
Delaware Wealth Builder Fund
Nasdaq symbols | CUSIPs | |
Class A | DDIAX | 24610B107 |
Class C | DDICX | 24610B305 |
Class R | DDDRX | 24610B842 |
Institutional Class | DDIIX | 24610B404 |
8
Disclosure of Fund expenses
For the six-month period from June 1, 2021 to November 30, 2021 (Unaudited)
The Fund seeks to provide high current income and an investment that has the potential for capital appreciation.
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 June 1, 2021 to November 30, 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.
9
Disclosure of Fund expenses
For the six-month period from June 1, 2021 to November 30, 2021 (Unaudited)
Delaware Wealth Builder Fund
Expense analysis of an investment of $1,000
Beginning | Ending | Expenses | |||||||||||||
Account Value | Account Value | Annualized | Paid During Period | ||||||||||||
6/1/21 | 11/30/21 | Expense Ratio | 6/1/21 to 11/30/21* | ||||||||||||
Actual Fund return† | |||||||||||||||
Class A | $ | 1,000.00 | $ | 1,030.50 | 1.08% | $5.50 | |||||||||
Class C | 1,000.00 | 1,026.40 | 1.83% | 9.30 | |||||||||||
Class R | 1,000.00 | 1,029.00 | 1.33% | 6.76 | |||||||||||
Institutional Class | 1,000.00 | 1,031.70 | 0.83% | 4.23 | |||||||||||
Hypothetical 5% return (5% return before expenses) | |||||||||||||||
Class A | $ | 1,000.00 | $ | 1,019.65 | 1.08% | $5.47 | |||||||||
Class C | 1,000.00 | 1,015.89 | 1.83% | 9.25 | |||||||||||
Class R | 1,000.00 | 1,018.40 | 1.33% | 6.73 | |||||||||||
Institutional Class | 1,000.00 | 1,020.91 | 0.83% | 4.20 |
* | “Expenses Paid During Period” are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/365 (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 (Underlying Funds) in which it invests, including exchange-traded funds. The table above does not reflect the expenses of the Underlying Funds.
10
Security type / sector allocation and top 10 equity holdings | |
Delaware Wealth Builder Fund | As of November 30, 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 | |||
Agency Mortgage-Backed Securities | 2.47% | |||
Collateralized Debt Obligations | 0.20% | |||
Convertible Bonds | 6.29% | |||
Corporate Bonds | 11.68% | |||
Banking | 1.30% | |||
Basic Industry | 0.92% | |||
Capital Goods | 0.32% | |||
Communications | 0.95% | |||
Consumer Cyclical | 0.88% | |||
Consumer Non-Cyclical | 0.61% | |||
Energy | 1.92% | |||
Financials | 0.73% | |||
Healthcare | 0.53% | |||
Insurance | 0.38% | |||
Media | 0.92% | |||
Real Estate Investment Trusts | 0.25% | |||
Services | 0.13% | |||
Technology | 0.06% | |||
Technology & Electronics | 0.85% | |||
Transportation | 0.17% | |||
Utilities | 0.76% | |||
Non-Agency Asset-Backed Securities | 0.16% | |||
Non-Agency Collateralized Mortgage Obligations | 0.04% | |||
Non-Agency Commercial Mortgage-Backed Securities | 1.00% | |||
Sovereign Bonds | 1.85% | |||
Supranational Bank | 0.28% | |||
US Treasury Obligations | 2.61% | |||
Common Stock | 59.20% | |||
Communication Services | 3.74% | |||
Consumer Discretionary | 8.76% | |||
Consumer Staples | 4.97% | |||
Energy | 2.50% | |||
Financials | 6.53% | |||
Healthcare | 8.53% | |||
Industrials | 3.08% | |||
Information Technology | 14.09% | |||
Materials | 1.16% | |||
REIT Diversified | 0.42% |
11
Security type / sector allocation and top 10 equity holdings
Delaware Wealth Builder Fund
Security type / sector | Percentage of net assets | |||
REIT Healthcare | 0.45% | |||
REIT Hotel | 0.07% | |||
REIT Industrial | 0.47% | |||
REIT Information Technology | 0.34% | |||
REIT Mall | 0.09% | |||
REIT Manufactured Housing | 0.11% | |||
REIT Mortgage | 0.35% | |||
REIT Multifamily | 1.01% | |||
REIT Office | 0.12% | |||
REIT Self-Storage | 0.35% | |||
REIT Shopping Center | 0.28% | |||
REIT Single Tenant | 0.24% | |||
REIT Specialty | 0.37% | |||
Utilities | 1.17% | |||
Convertible Preferred Stock | 1.60% | |||
Preferred Stock | 0.00% | |||
Exchange-Traded Funds | 4.51% | |||
Limited Partnerships | 2.95% | |||
Leveraged Non-Recourse Security | 0.00% | |||
Short-Term Investments | 4.96% | |||
Total Value of Securities | 99.80% | |||
Receivables and Other Assets Net of Liabilities | 0.20% | |||
Total Net Assets | 100.00% |
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 | |||
Apple | 2.26% | |||
Microsoft | 2.02% | |||
Broadcom | 1.20% | |||
Lowe’s | 1.18% | |||
Johnson & Johnson | 1.16% | |||
ConocoPhillips | 1.04% | |||
Merck & Co. | 1.00% | |||
Cisco Systems | 0.99% | |||
Verizon Communications | 0.91% | |||
Amazon.com | 0.90% |
12
Schedule of investments | |
Delaware Wealth Builder Fund | November 30, 2021 |
Principal | |||||||
amount° | Value (US $) | ||||||
Agency Mortgage-Backed Securities – 2.47% | |||||||
Fannie Mae | |||||||
4.50% 2/1/44 | 54,591 | $ | 59,767 | ||||
Fannie Mae S.F. 15 yr | |||||||
2.00% 2/1/36 | 151,063 | 155,150 | |||||
2.50% 7/1/36 | 287,963 | 299,086 | |||||
Fannie Mae S.F. 20 yr | |||||||
2.00% 3/1/41 | 45,319 | 46,227 | |||||
2.00% 4/1/41 | 272,512 | 276,675 | |||||
2.00% 5/1/41 | 192,396 | 196,250 | |||||
3.00% 3/1/33 | 289,866 | 304,821 | |||||
Fannie Mae S.F. 30 yr | |||||||
2.00% 12/1/50 | 25,141 | 25,241 | |||||
2.00% 1/1/51 | 72,874 | 73,003 | |||||
2.00% 2/1/51 | 49,548 | 49,822 | |||||
2.00% 3/1/51 | 48,103 | 48,189 | |||||
2.00% 5/1/51 | 285,372 | 286,001 | |||||
2.00% 6/1/51 | 1,138,172 | 1,143,714 | |||||
2.50% 1/1/43 | 21,220 | 21,974 | |||||
2.50% 1/1/51 | 53,906 | 55,316 | |||||
2.50% 5/1/51 | 17,269 | 17,748 | |||||
2.50% 6/1/51 | 34,864 | 35,943 | |||||
2.50% 7/1/51 | 324,928 | 333,428 | |||||
2.50% 8/1/51 | 486,709 | 502,525 | |||||
2.50% 9/1/51 | 183,508 | 188,308 | |||||
3.00% 11/1/48 | 11,839 | 12,442 | |||||
3.00% 12/1/49 | 6,382 | 6,716 | |||||
3.00% 3/1/50 | 98,634 | 103,740 | |||||
3.00% 7/1/50 | 178,329 | 188,574 | |||||
3.00% 7/1/51 | 186,876 | 197,454 | |||||
3.00% 8/1/51 | 79,504 | 83,381 | |||||
3.50% 12/1/47 | 360,107 | 380,975 | |||||
3.50% 1/1/48 | 117,505 | 124,186 | |||||
3.50% 2/1/48 | 62,942 | 67,406 | |||||
3.50% 11/1/48 | 18,790 | 19,829 | |||||
3.50% 12/1/49 | 203,397 | 217,945 | |||||
4.00% 4/1/47 | 10,100 | 10,997 | |||||
4.00% 6/1/48 | 121,679 | 132,308 | |||||
4.00% 9/1/48 | 5,364 | 5,785 | |||||
4.00% 6/1/49 | 9,312 | 10,035 | |||||
4.50% 2/1/41 | 9,388 | 10,332 | |||||
4.50% 10/1/45 | 10,097 | 11,164 | |||||
4.50% 4/1/48 | 432,193 | 476,950 |
13
Schedule of investments
Delaware Wealth Builder Fund
Principal | |||||||
amount° | Value (US $) | ||||||
Agency Mortgage-Backed Securities (continued) | |||||||
Fannie Mae S.F. 30 yr | |||||||
4.50% 1/1/49 | 143,391 | $ | 157,988 | ||||
4.50% 1/1/50 | 15,561 | 16,894 | |||||
5.00% 7/1/49 | 127,414 | 140,990 | |||||
Fannie Mae S.F. 30 yr TBA | |||||||
2.50% 1/1/52 | 825,000 | 843,691 | |||||
Freddie Mac S.F. 15 yr | |||||||
2.00% 12/1/35 | 72,442 | 74,333 | |||||
3.00% 3/1/35 | 145,880 | 153,884 | |||||
Freddie Mac S.F. 20 yr | |||||||
2.00% 3/1/41 | 51,679 | 52,650 | |||||
2.00% 4/1/41 | 47,043 | 47,985 | |||||
2.50% 6/1/41 | 314,867 | 326,661 | |||||
3.00% 9/1/40 | 135,457 | 141,911 | |||||
3.50% 9/1/35 | 206,260 | 219,667 | |||||
Freddie Mac S.F. 30 yr | |||||||
2.00% 9/1/51 | 188,753 | 189,227 | |||||
2.50% 10/1/50 | 40,321 | 41,720 | |||||
2.50% 11/1/50 | 66,325 | 68,254 | |||||
2.50% 2/1/51 | 24,518 | 25,371 | |||||
3.00% 1/1/50 | 10,823 | 11,332 | |||||
3.00% 8/1/51 | 850,478 | 893,943 | |||||
3.50% 8/1/49 | 312,764 | 332,155 | |||||
4.00% 7/1/47 | 3,249 | 3,489 | |||||
4.00% 10/1/47 | 31,597 | 33,723 | |||||
4.50% 4/1/49 | 11,946 | 13,069 | |||||
4.50% 8/1/49 | 30,188 | 33,265 | |||||
GNMA I S.F. 30 yr | |||||||
3.00% 8/15/45 | 62,851 | 66,043 | |||||
Total Agency Mortgage-Backed Securities (cost $10,140,366) | 10,067,652 | ||||||
Collateralized Debt Obligations – 0.20% | |||||||
Cedar Funding IX CLO | |||||||
Series 2018-9A A1 144A 1.112% (LIBOR03M + 0.98%, | |||||||
Floor 0.98%) 4/20/31 #, ● | 250,000 | 250,343 | |||||
Octagon Investment Partners 48 | |||||||
Series 2020-3A AR 144A 1.277% (LIBOR03M + 1.15%, | |||||||
Floor 1.15%) 10/20/34 #, ● | 300,000 | 300,000 |
14
Principal | ||||||
amount° | Value (US $) | |||||
Collateralized Debt Obligations (continued) | ||||||
Sound Point Clo XXI | ||||||
Series 2018-3A A1A 144A 1.305% (LIBOR03M + 1.18%, | ||||||
Floor 1.18%) 10/26/31 #, ● | 250,000 | $ | 250,020 | |||
Total Collateralized Debt Obligations (cost $793,158) | 800,363 | |||||
Convertible Bonds – 6.29% | ||||||
Basic Industry – 0.13% | ||||||
Ivanhoe Mines 144A 2.50% exercise price $7.43, maturity | ||||||
date 4/15/26 # | 406,000 | 535,097 | ||||
535,097 | ||||||
Capital Goods – 0.44% | ||||||
Chart Industries 144A 1.00% exercise price $58.73, | ||||||
maturity date 11/15/24 # | 382,000 | 1,150,297 | ||||
Kaman 3.25% exercise price $65.26, maturity date 5/1/24 | 651,000 | 655,232 | ||||
1,805,529 | ||||||
Communications – 0.89% | ||||||
Cable One 144A 1.125% exercise price $2,275.83, maturity | ||||||
date 3/15/28 # | 780,000 | 779,494 | ||||
DISH Network 3.375% exercise price $65.18, maturity date | ||||||
8/15/26 | 799,000 | 738,477 | ||||
InterDigital 2.00% exercise price $81.29, maturity date | ||||||
6/1/24 | 821,000 | 893,351 | ||||
Liberty Broadband 144A 1.25% exercise price $900.01, | ||||||
maturity date 9/30/50 # | 859,000 | 855,564 | ||||
Liberty Latin America 2.00% exercise price $20.65, maturity | ||||||
date 7/15/24 | 385,000 | 380,428 | ||||
3,647,314 | ||||||
Consumer Cyclical – 0.39% | ||||||
Cheesecake Factory 0.375% exercise price $78.40, | ||||||
maturity date 6/15/26 | 496,000 | 442,202 | ||||
Ford Motor 144A 0.00% exercise price $17.49, maturity | ||||||
date 3/15/26 #, ^ | 540,000 | 702,675 | ||||
FuboTV 144A 3.25% exercise price $57.78, maturity date | ||||||
2/15/26 # | 539,000 | 466,345 | ||||
1,611,222 | ||||||
Consumer Non-Cyclical – 2.00% | ||||||
BioMarin Pharmaceutical 0.599% exercise price $124.67, | ||||||
maturity date 8/1/24 | 531,000 | 548,224 | ||||
Chefs’ Warehouse 1.875% exercise price $44.20, maturity | ||||||
date 12/1/24 | 879,000 | 921,905 |
15
Schedule of investments
Delaware Wealth Builder Fund
Principal | ||||||
amount° | Value (US $) | |||||
Convertible Bonds (continued) | ||||||
Consumer Non-Cyclical (continued) | ||||||
Chegg 3.90% exercise price $107.55, maturity date | ||||||
9/1/26 ^ | 505,000 | $ | 415,868 | |||
Coherus Biosciences 1.50% exercise price $19.26, maturity | ||||||
date 4/15/26 | 546,000 | 660,660 | ||||
Collegium Pharmaceutical 2.625% exercise price $29.19, | ||||||
maturity date 2/15/26 | 557,000 | 528,106 | ||||
FTI Consulting 2.00% exercise price $101.38, maturity date | ||||||
8/15/23 | 497,000 | 742,269 | ||||
Integra LifeSciences Holdings 0.50% exercise price $73.67, | ||||||
maturity date 8/15/25 | 861,000 | 914,468 | ||||
Ionis Pharmaceuticals 0.125% exercise price $83.28, | ||||||
maturity date 12/15/24 | 578,000 | 513,030 | ||||
Jazz Investments I 2.00% exercise price $155.81, maturity | ||||||
date 6/15/26 | 365,000 | 406,063 | ||||
Neurocrine Biosciences 2.25% exercise price $75.92, | ||||||
maturity date 5/15/24 | 239,000 | 295,314 | ||||
Paratek Pharmaceuticals 4.75% exercise price $15.90, | ||||||
maturity date 5/1/24 | 1,040,000 | 952,536 | ||||
Repay Holdings 144A 0.326% exercise price $33.60, | ||||||
maturity date 2/1/26 #, ^ | 691,000 | 580,852 | ||||
Travere Therapeutics 2.50% exercise price $38.80, maturity | ||||||
date 9/15/25 | 636,000 | 666,210 | ||||
8,145,505 | ||||||
Energy – 0.51% | ||||||
Cheniere Energy 4.25% exercise price $138.38, maturity | ||||||
date 3/15/45 | 1,051,000 | 900,035 | ||||
Helix Energy Solutions Group 6.75% exercise price $6.97, | ||||||
maturity date 2/15/26 | 862,000 | 830,717 | ||||
NextEra Energy Partners 144A 0.357% exercise price | ||||||
$76.10, maturity date 11/15/25 #, ^ | 298,000 | 342,551 | ||||
2,073,303 | ||||||
Real Estate Investment Trusts – 0.33% | ||||||
Blackstone Mortgage Trust 4.75% exercise price $36.23, | ||||||
maturity date 3/15/23 | 721,000 | 737,996 | ||||
Summit Hotel Properties 1.50% exercise price $11.99, | ||||||
maturity date 2/15/26 | 584,000 | 588,173 | ||||
1,326,169 |
16
Principal | ||||||
amount° | Value (US $) | |||||
Convertible Bonds (continued) | ||||||
Technology – 1.07% | ||||||
Microchip Technology 1.625% exercise price $46.92, | ||||||
maturity date 2/15/27 | 365,000 | $ | 872,320 | |||
ON Semiconductor 1.625% exercise price $20.72, maturity | ||||||
date 10/15/23 | 424,000 | 1,260,075 | ||||
Palo Alto Networks 0.75% exercise price $266.35, maturity | ||||||
date 7/1/23 | 402,000 | 828,522 | ||||
Quotient Technology 1.75% exercise price $17.36, maturity | ||||||
date 12/1/22 | 918,000 | 910,618 | ||||
Vishay Intertechnology 2.25% exercise price $31.32, | ||||||
maturity date 6/15/25 | 486,000 | 496,689 | ||||
4,368,224 | ||||||
Transportation – 0.38% | ||||||
Seaspan 144A 3.75% exercise price $13.01, maturity date | ||||||
12/15/25 # | 773,000 | 922,576 | ||||
Spirit Airlines 1.00% exercise price $49.07, maturity date | ||||||
5/15/26 | 701,000 | 622,488 | ||||
1,545,064 | ||||||
Utilities – 0.15% | ||||||
NRG Energy 2.75% exercise price $44.89, maturity date | ||||||
6/1/48 | 559,000 | 618,813 | ||||
618,813 | ||||||
Total Convertible Bonds (cost $22,794,805) | 25,676,240 | |||||
Corporate Bonds – 11.68% | ||||||
Banking – 1.30% | ||||||
Banco Continental 144A 2.75% 12/10/25 # | 200,000 | 195,771 | ||||
Banco del Estado de Chile 144A 2.704% 1/9/25 # | 205,000 | 210,089 | ||||
Banco Nacional de Panama 144A 2.50% 8/11/30 # | 200,000 | 186,814 | ||||
Bank of America | ||||||
1.922% 10/24/31 µ | 70,000 | 66,856 | ||||
2.456% 10/22/25 µ | 15,000 | 15,442 | ||||
2.482% 9/21/36 µ | 140,000 | 135,290 | ||||
2.884% 10/22/30 µ | 20,000 | 20,688 | ||||
3.194% 7/23/30 µ | 55,000 | 58,074 | ||||
Bank of Georgia 144A 6.00% 7/26/23 # | 200,000 | 213,579 | ||||
BBVA Bancomer | ||||||
144A 1.875% 9/18/25 # | 200,000 | 199,393 | ||||
144A 6.75% 9/30/22 # | 274,000 | 285,319 | ||||
Citigroup 4.45% 9/29/27 | 300,000 | 333,909 |
17
Schedule of investments
Delaware Wealth Builder Fund
Principal | ||||||||
amount° | Value (US $) | |||||||
Corporate Bonds (continued) | ||||||||
Banking (continued) | ||||||||
Credit Agricole 144A 2.811% 1/11/41 # | 275,000 | $ | 261,498 | |||||
Credit Suisse Group 144A 2.593% 9/11/25 #, µ | 250,000 | 255,720 | ||||||
Deutsche Bank 2.222% 9/18/24 µ | 300,000 | 304,354 | ||||||
Development Bank of Kazakhstan 144A 10.95% 5/6/26 # | KZT | 100,000,000 | 226,489 | |||||
Goldman Sachs Group | ||||||||
1.542% 9/10/27 µ | 105,000 | 102,860 | ||||||
2.615% 4/22/32 µ | 170,000 | 170,449 | ||||||
3.50% 4/1/25 | 80,000 | 84,884 | ||||||
JPMorgan Chase & Co. | ||||||||
2.58% 4/22/32 µ | 140,000 | 141,264 | ||||||
2.739% 10/15/30 µ | 20,000 | 20,561 | ||||||
4.023% 12/5/24 µ | 80,000 | 84,559 | ||||||
5.00% 8/1/24 µ, Ψ | 85,000 | 86,753 | ||||||
Morgan Stanley | ||||||||
1.794% 2/13/32 µ | 155,000 | 146,949 | ||||||
2.484% 9/16/36 µ | 70,000 | 67,789 | ||||||
5.00% 11/24/25 | 95,000 | 106,273 | ||||||
NBK SPC 144A 1.625% 9/15/27 #, µ | 200,000 | 195,383 | ||||||
PNC Financial Services Group 2.60% 7/23/26 | 180,000 | 188,762 | ||||||
State Street | ||||||||
3.10% 5/15/23 | 10,000 | 10,356 | ||||||
3.30% 12/16/24 | 130,000 | 138,650 | ||||||
SVB Financial Group 4.00% 5/15/26 µ, Ψ | 305,000 | 304,100 | ||||||
Truist Bank 2.636% 9/17/29 µ | 185,000 | 190,965 | ||||||
Truist Financial 4.95% 9/1/25 µ, Ψ | 55,000 | 59,180 | ||||||
US Bancorp | ||||||||
3.00% 7/30/29 | 150,000 | 159,155 | ||||||
3.10% 4/27/26 | 25,000 | 26,557 | ||||||
3.375% 2/5/24 | 60,000 | 63,046 | ||||||
5,317,780 | ||||||||
Basic Industry – 0.92% | ||||||||
Allegheny Technologies 5.125% 10/1/31 | 75,000 | 74,172 | ||||||
AngloGold Ashanti Holdings 3.75% 10/1/30 | 200,000 | 199,291 | ||||||
Artera Services 144A 9.033% 12/4/25 # | 355,000 | 357,618 | ||||||
Avient 144A 5.75% 5/15/25 # | 88,000 | 91,306 | ||||||
Chemours 144A 5.75% 11/15/28 # | 180,000 | 184,803 | ||||||
Corp Nacional del Cobre de Chile 144A 3.15% 1/14/30 # | 200,000 | 203,963 | ||||||
CSN Inova Ventures 144A 6.75% 1/28/28 # | 200,000 | 202,035 |
18
Principal | ||||||
amount° | Value (US $) | |||||
Corporate Bonds (continued) | ||||||
Basic Industry (continued) | ||||||
First Quantum Minerals | ||||||
144A 7.25% 4/1/23 # | 250,000 | $ | 255,004 | |||
144A 7.50% 4/1/25 # | 250,000 | 257,142 | ||||
Freeport-McMoRan 5.45% 3/15/43 | 230,000 | 283,909 | ||||
Hutama Karya Persero 144A 3.75% 5/11/30 # | 200,000 | 214,228 | ||||
International Flavors & Fragrances 144A 1.832% 10/15/27 # | 135,000 | 133,153 | ||||
LyondellBasell Industries 4.625% 2/26/55 | 250,000 | 311,879 | ||||
New Gold 144A 7.50% 7/15/27 # | 165,000 | 172,994 | ||||
Newmont 2.80% 10/1/29 | 190,000 | 195,622 | ||||
NOVA Chemicals 144A 4.25% 5/15/29 # | 175,000 | 171,830 | ||||
OCP 144A 3.75% 6/23/31 # | 200,000 | 193,380 | ||||
Olin 5.00% 2/1/30 | 100,000 | 104,617 | ||||
Univar Solutions USA 144A 5.125% 12/1/27 # | 135,000 | 141,333 | ||||
3,748,279 | ||||||
Capital Goods – 0.32% | ||||||
Intertape Polymer Group 144A 4.375% 6/15/29 # | 190,000 | 188,427 | ||||
Madison IAQ 144A 5.875% 6/30/29 # | 150,000 | 144,549 | ||||
Teledyne Technologies | ||||||
0.95% 4/1/24 | 105,000 | 104,278 | ||||
2.75% 4/1/31 | 250,000 | 255,527 | ||||
Terex 144A 5.00% 5/15/29 # | 195,000 | 198,910 | ||||
TK Elevator US Newco 144A 5.25% 7/15/27 # | 200,000 | 203,693 | ||||
TransDigm 144A 6.25% 3/15/26 # | 187,000 | 194,282 | ||||
1,289,666 | ||||||
Communications – 0.95% | ||||||
Altice France 144A 5.50% 10/15/29 # | 180,000 | 174,051 | ||||
Altice France Holding 144A 6.00% 2/15/28 # | 310,000 | 290,225 | ||||
AT&T | ||||||
1.70% 3/25/26 | 105,000 | 104,903 | ||||
3.10% 2/1/43 | 60,000 | 58,041 | ||||
4.35% 3/1/29 | 170,000 | 191,729 | ||||
Cellnex Finance 144A 3.875% 7/7/41 # | 200,000 | 194,956 | ||||
Connect Finco 144A 6.75% 10/1/26 # | 250,000 | 260,983 | ||||
Consolidated Communications | ||||||
144A 5.00% 10/1/28 # | 80,000 | 78,880 | ||||
144A 6.50% 10/1/28 # | 80,000 | 83,200 | ||||
Frontier Communications Holdings | ||||||
144A 5.875% 10/15/27 # | 165,000 | 170,656 | ||||
144A 6.75% 5/1/29 # | 75,000 | 77,325 | ||||
Millicom International Cellular 144A 4.50% 4/27/31 # | 200,000 | 199,507 |
19
Schedule of investments
Delaware Wealth Builder Fund
Principal | ||||||
amount° | Value (US $) | |||||
Corporate Bonds (continued) | ||||||
Communications (continued) | ||||||
Ooredoo International Finance 144A 5.00% 10/19/25 # | 200,000 | $ | 225,503 | |||
Sprint 7.125% 6/15/24 | 387,000 | 434,245 | ||||
T-Mobile USA | ||||||
2.55% 2/15/31 | 125,000 | 123,326 | ||||
2.625% 4/15/26 | 95,000 | 95,178 | ||||
3.00% 2/15/41 | 75,000 | 71,674 | ||||
3.375% 4/15/29 | 95,000 | 95,735 | ||||
3.50% 4/15/31 | 55,000 | 56,000 | ||||
3.875% 4/15/30 | 120,000 | 130,603 | ||||
Verizon Communications | ||||||
2.10% 3/22/28 | 200,000 | 199,632 | ||||
4.50% 8/10/33 | 95,000 | 112,161 | ||||
Vodafone Group | ||||||
4.25% 9/17/50 | 110,000 | 126,929 | ||||
4.875% 6/19/49 | 40,000 | 50,099 | ||||
Zayo Group Holdings 144A 6.125% 3/1/28 # | 280,000 | 264,229 | ||||
3,869,770 | ||||||
Consumer Cyclical – 0.88% | ||||||
Allison Transmission 144A 5.875% 6/1/29 # | 335,000 | 358,450 | ||||
Bath & Body Works | ||||||
6.875% 11/1/35 | 180,000 | 216,498 | ||||
6.95% 3/1/33 | 122,000 | 138,893 | ||||
Caesars Entertainment 144A 6.25% 7/1/25 # | 370,000 | 385,129 | ||||
Carnival | ||||||
144A 5.75% 3/1/27 # | 330,000 | 323,243 | ||||
144A 7.625% 3/1/26 # | 235,000 | 241,463 | ||||
Ford Motor Credit | ||||||
2.90% 2/16/28 | 260,000 | 256,165 | ||||
3.375% 11/13/25 | 240,000 | 245,443 | ||||
4.542% 8/1/26 | 260,000 | 278,200 | ||||
General Motors Financial | ||||||
0.809% (SOFR + 0.76%) 3/8/24 ● | 110,000 | 110,455 | ||||
4.35% 4/9/25 | 130,000 | 140,633 | ||||
5.25% 3/1/26 | 95,000 | 106,863 | ||||
Levi Strauss & Co. 144A 3.50% 3/1/31 # | 160,000 | 162,904 | ||||
MGM Resorts International 4.75% 10/15/28 | 70,000 | 71,552 | ||||
Royal Caribbean Cruises 144A 5.50% 4/1/28 # | 330,000 | 321,678 | ||||
Scientific Games International 144A 8.25% 3/15/26 # | 119,000 | 125,404 | ||||
Six Flags Entertainment 144A 4.875% 7/31/24 # | 110,000 | 110,963 | ||||
3,593,936 |
20
Principal | ||||||
amount° | Value (US $) | |||||
Corporate Bonds (continued) | ||||||
Consumer Non-Cyclical – 0.61% | ||||||
Anheuser-Busch InBev Worldwide | ||||||
3.65% 2/1/26 | 125,000 | $ | 134,669 | |||
4.70% 2/1/36 | 50,000 | 60,173 | ||||
BAT Capital 2.259% 3/25/28 | 55,000 | 53,776 | ||||
Biogen 3.15% 5/1/50 | 275,000 | 270,690 | ||||
Bunge Finance | ||||||
1.63% 8/17/25 | 150,000 | 150,138 | ||||
2.75% 5/14/31 | 165,000 | 166,797 | ||||
CVS Health | ||||||
2.70% 8/21/40 | 165,000 | 158,312 | ||||
3.25% 8/15/29 | 185,000 | 196,927 | ||||
Gilead Sciences 4.15% 3/1/47 | 165,000 | 194,687 | ||||
InRetail Consumer 144A 3.25% 3/22/28 # | 200,000 | 196,294 | ||||
JBS USA LUX 144A 6.50% 4/15/29 # | 220,000 | 241,383 | ||||
Kraft Heinz Foods 5.20% 7/15/45 | 135,000 | 172,149 | ||||
Post Holdings 144A 5.625% 1/15/28 # | 120,000 | 123,709 | ||||
Royalty Pharma 1.20% 9/2/25 | 370,000 | 363,206 | ||||
2,482,910 | ||||||
Energy – 1.92% | ||||||
Ascent Resources Utica Holdings | ||||||
144A 5.875% 6/30/29 # | 160,000 | 157,864 | ||||
144A 7.00% 11/1/26 # | 80,000 | 81,319 | ||||
BP Capital Markets America | ||||||
2.939% 6/4/51 | 275,000 | 268,307 | ||||
3.06% 6/17/41 | 70,000 | 70,719 | ||||
Chevron USA | ||||||
3.25% 10/15/29 | 85,000 | 92,206 | ||||
3.90% 11/15/24 | 20,000 | 21,503 | ||||
CNX Midstream Partners 144A 4.75% 4/15/30 # | 65,000 | 64,115 | ||||
CNX Resources | ||||||
144A 6.00% 1/15/29 # | 185,000 | 189,649 | ||||
144A 7.25% 3/14/27 # | 90,000 | 95,205 | ||||
Crestwood Midstream Partners 144A 6.00% 2/1/29 # | 188,000 | 190,546 | ||||
DCP Midstream Operating 5.125% 5/15/29 | 260,000 | 288,782 | ||||
Diamondback Energy 3.125% 3/24/31 | 235,000 | 239,841 | ||||
Enbridge | ||||||
0.45% (SOFR + 0.40%) 2/17/23 ● | 125,000 | 125,007 | ||||
2.50% 8/1/33 | 245,000 | 241,192 |
21
Schedule of investments
Delaware Wealth Builder Fund
Principal | ||||||
amount° | Value (US $) | |||||
Corporate Bonds (continued) | ||||||
Energy (continued) | ||||||
Energy Transfer | ||||||
5.25% 4/15/29 | 95,000 | $ | 108,764 | |||
6.25% 4/15/49 | 60,000 | 78,012 | ||||
6.50% 11/15/26 µ, ψ | 120,000 | 123,000 | ||||
Enterprise Products Operating 3.20% 2/15/52 | 265,000 | 259,994 | ||||
EQM Midstream Partners | ||||||
144A 4.75% 1/15/31 # | 110,000 | 111,327 | ||||
144A 6.50% 7/1/27 # | 195,000 | 211,049 | ||||
Genesis Energy | ||||||
7.75% 2/1/28 | 285,000 | 279,314 | ||||
8.00% 1/15/27 | 175,000 | 173,914 | ||||
KazTransGas 144A 4.375% 9/26/27 # | 381,000 | 416,371 | ||||
Lukoil Securities 144A 3.875% 5/6/30 # | 205,000 | 211,393 | ||||
Marathon Oil 4.40% 7/15/27 | 150,000 | 164,232 | ||||
MPLX | ||||||
4.00% 3/15/28 | 30,000 | 32,637 | ||||
4.125% 3/1/27 | 135,000 | 146,958 | ||||
5.50% 2/15/49 | 55,000 | 69,588 | ||||
Murphy Oil 6.375% 7/15/28 | 295,000 | 304,763 | ||||
Murphy Oil USA 144A 3.75% 2/15/31 # | 165,000 | 159,225 | ||||
NuStar Logistics 5.625% 4/28/27 | 163,000 | 166,817 | ||||
Occidental Petroleum | ||||||
6.45% 9/15/36 | 55,000 | 68,380 | ||||
6.60% 3/15/46 | 162,000 | 206,550 | ||||
6.625% 9/1/30 | 90,000 | 108,111 | ||||
PDC Energy 5.75% 5/15/26 | 205,000 | 207,435 | ||||
Pioneer Natural Resources 1.90% 8/15/30 | 95,000 | 90,068 | ||||
PTTEP Treasury Center 144A 2.587% 6/10/27 # | 185,000 | 190,089 | ||||
Qatar Energy 144A 2.25% 7/12/31 # | 200,000 | 197,008 | ||||
Sabine Pass Liquefaction | ||||||
5.625% 3/1/25 | 55,000 | 61,362 | ||||
5.75% 5/15/24 | 210,000 | 229,452 | ||||
Southwestern Energy 7.75% 10/1/27 | 175,000 | 187,906 | ||||
Targa Resources Partners 5.375% 2/1/27 | 172,000 | 176,121 | ||||
TechnipFMC 144A 6.50% 2/1/26 # | 330,000 | 349,663 | ||||
Tengizchevroil Finance Co. International 144A 2.625% | ||||||
8/15/25 # | 200,000 | 201,550 | ||||
Tennessee Gas Pipeline 144A 2.90% 3/1/30 # | 130,000 | 131,707 | ||||
UEP Penonome II 144A 6.50% 10/1/38 # | 192,383 | 202,207 |
22
Principal | ||||||
amount° | Value (US $) | |||||
Corporate Bonds (continued) | ||||||
Energy (continued) | ||||||
Western Midstream Operating 4.75% 8/15/28 | 85,000 | $ | 92,732 | |||
7,843,954 | ||||||
Financials – 0.73% | ||||||
AerCap Ireland Capital 4.45% 4/3/26 | 150,000 | 162,923 | ||||
Air Lease 2.875% 1/15/26 | 150,000 | 154,036 | ||||
Ally Financial | ||||||
4.70% 5/15/26 µ, ψ | 230,000 | 237,906 | ||||
8.00% 11/1/31 | 280,000 | 396,357 | ||||
Aviation Capital Group 144A 1.95% 1/30/26 # | 365,000 | 358,433 | ||||
Castlelake Aviation Finance 144A 5.00% 4/15/27 # | 170,000 | 168,263 | ||||
DAE Sukuk Difc 144A 3.75% 2/15/26 # | 400,000 | 415,128 | ||||
Hightower Holding 144A 6.75% 4/15/29 # | 110,000 | 111,360 | ||||
INEOS Quattro Finance 2 144A 3.375% 1/15/26 # | 200,000 | 199,317 | ||||
Jefferies Group | ||||||
4.15% 1/23/30 | 170,000 | 189,291 | ||||
6.45% 6/8/27 | 10,000 | 12,254 | ||||
6.50% 1/20/43 | 5,000 | 7,007 | ||||
Midcap Financial Issuer Trust 144A 6.50% 5/1/28 # | 200,000 | 204,417 | ||||
MSCI 144A 3.625% 11/1/31 # | 155,000 | 157,943 | ||||
Oryx Funding 144A 5.80% 2/3/31 # | 200,000 | 208,867 | ||||
2,983,502 | ||||||
Healthcare – 0.53% | ||||||
Bausch Health 144A 6.25% 2/15/29 # | 325,000 | 295,100 | ||||
Community Health Systems | ||||||
144A 4.75% 2/15/31 # | 135,000 | 133,186 | ||||
144A 6.625% 2/15/25 # | 125,000 | 129,805 | ||||
DaVita 144A 4.625% 6/1/30 # | 150,000 | 148,380 | ||||
Encompass Health 5.75% 9/15/25 | 174,000 | 177,638 | ||||
Hadrian Merger Sub 144A 8.50% 5/1/26 # | 200,000 | 205,192 | ||||
HCA | ||||||
5.375% 2/1/25 | 124,000 | 135,408 | ||||
5.875% 2/15/26 | 159,000 | 178,422 | ||||
7.58% 9/15/25 | 159,000 | 189,267 | ||||
Ortho-Clinical Diagnostics | ||||||
144A 7.25% 2/1/28 # | 90,000 | 94,667 | ||||
144A 7.375% 6/1/25 # | 107,000 | 112,405 |
23
Schedule of investments
Delaware Wealth Builder Fund
Principal | ||||||
amount° | Value (US $) | |||||
Corporate Bonds (continued) | ||||||
Healthcare (continued) | ||||||
Tenet Healthcare | ||||||
144A 4.25% 6/1/29 # | 175,000 | $ | 173,545 | |||
144A 6.125% 10/1/28 # | 200,000 | 204,540 | ||||
2,177,555 | ||||||
Insurance – 0.38% | ||||||
Arthur J Gallagher & Co. 3.50% 5/20/51 | 340,000 | 366,845 | ||||
Athene Global Funding 144A 1.00% 4/16/24 # | 90,000 | 89,638 | ||||
Athene Holding 3.95% 5/25/51 | 250,000 | 282,721 | ||||
GA Global Funding Trust 144A 1.00% 4/8/24 # | 365,000 | 363,284 | ||||
HUB International 144A 5.625% 12/1/29 # | 115,000 | 114,951 | ||||
USI 144A 6.875% 5/1/25 # | 343,000 | 344,583 | ||||
1,562,022 | ||||||
Media – 0.92% | ||||||
Altice Financing 144A 5.00% 1/15/28 # | 200,000 | 187,468 | ||||
AMC Networks 4.25% 2/15/29 | 395,000 | 386,245 | ||||
CCO Holdings | ||||||
144A 4.50% 8/15/30 # | 80,000 | 80,776 | ||||
4.50% 5/1/32 | 45,000 | 44,879 | ||||
144A 5.375% 6/1/29 # | 380,000 | 402,623 | ||||
Charter Communications Operating | ||||||
4.40% 12/1/61 | 40,000 | 41,784 | ||||
4.80% 3/1/50 | 70,000 | 78,981 | ||||
5.05% 3/30/29 | 100,000 | 115,543 | ||||
Clear Channel Outdoor Holdings 144A 7.50% 6/1/29 # | 105,000 | 108,066 | ||||
Comcast 3.20% 7/15/36 | 340,000 | 364,131 | ||||
CSC Holdings | ||||||
144A 3.375% 2/15/31 # | 200,000 | 183,088 | ||||
144A 5.00% 11/15/31 # | 215,000 | 201,405 | ||||
5.25% 6/1/24 | 5,000 | 5,201 | ||||
Cumulus Media New Holdings 144A 6.75% 7/1/26 # | 183,000 | 190,211 | ||||
Discovery Communications | ||||||
4.00% 9/15/55 | 40,000 | 42,928 | ||||
4.125% 5/15/29 | 135,000 | 148,943 | ||||
Gray Television 144A 4.75% 10/15/30 # | 175,000 | 168,956 | ||||
Nielsen Finance | ||||||
144A 4.50% 7/15/29 # | 45,000 | 43,582 | ||||
144A 4.75% 7/15/31 # | 150,000 | 145,736 | ||||
Sirius XM Radio 144A 4.00% 7/15/28 # | 315,000 | 312,045 | ||||
Terrier Media Buyer 144A 8.875% 12/15/27 # | 180,000 | 191,168 | ||||
Time Warner Cable 7.30% 7/1/38 | 60,000 | 86,203 |
24
Principal | ||||||
amount° | Value (US $) | |||||
Corporate Bonds (continued) | ||||||
Media (continued) | ||||||
Time Warner Entertainment 8.375% 3/15/23 | 25,000 | $ | 27,400 | |||
ViacomCBS 4.375% 3/15/43 | 180,000 | 204,233 | ||||
3,761,595 | ||||||
Real Estate Investment Trusts – 0.25% | ||||||
Crown Castle International 1.05% 7/15/26 | 375,000 | 362,248 | ||||
CubeSmart 3.00% 2/15/30 | 140,000 | 147,623 | ||||
Iron Mountain 144A 4.50% 2/15/31 # | 320,000 | 314,712 | ||||
MGM Growth Properties Operating Partnership | ||||||
144A 3.875% 2/15/29 # | 35,000 | 36,812 | ||||
5.75% 2/1/27 | 120,000 | 136,027 | ||||
997,422 | ||||||
Services – 0.13% | ||||||
Legends Hospitality Holding 144A 5.00% 2/1/26 # | 110,000 | 111,283 | ||||
Prime Security Services Borrower 144A 5.75% 4/15/26 # | 225,000 | 238,451 | ||||
United Rentals North America 3.875% 2/15/31 | 176,000 | 176,825 | ||||
526,559 | ||||||
Technology – 0.06% | ||||||
Marvell Technology 2.45% 4/15/28 | 260,000 | 261,969 | ||||
261,969 | ||||||
Technology & Electronics – 0.85% | ||||||
Apple 2.20% 9/11/29 | 140,000 | 142,769 | ||||
Broadcom 144A 3.469% 4/15/34 # | 345,000 | 355,816 | ||||
Fidelity National Information Services 1.65% 3/1/28 | 365,000 | 352,344 | ||||
Fiserv 3.20% 7/1/26 | 235,000 | 248,174 | ||||
Global Payments 2.65% 2/15/25 | 135,000 | 139,139 | ||||
Go Daddy Operating 144A 3.50% 3/1/29 # | 175,000 | 166,782 | ||||
Microchip Technology | ||||||
144A 0.972% 2/15/24 # | 255,000 | 252,734 | ||||
144A 0.983% 9/1/24 # | 100,000 | 98,592 | ||||
NXP | ||||||
144A 3.25% 5/11/41 # | 60,000 | 61,655 | ||||
144A 4.875% 3/1/24 # | 230,000 | 247,426 | ||||
Oracle 2.875% 3/25/31 | 250,000 | 256,040 | ||||
PayPal Holdings 2.65% 10/1/26 | 340,000 | 357,445 | ||||
SS&C Technologies 144A 5.50% 9/30/27 # | 240,000 | 249,762 | ||||
StoneCo 144A 3.95% 6/16/28 # | 200,000 | 167,352 | ||||
VMware 1.00% 8/15/24 | 370,000 | 367,495 | ||||
3,463,525 |
25
Schedule of investments
Delaware Wealth Builder Fund
Principal | ||||||
amount° | Value (US $) | |||||
Corporate Bonds (continued) | ||||||
Transportation – 0.17% | ||||||
Delta Air Lines 7.375% 1/15/26 | 97,000 | $ | 112,302 | |||
Mileage Plus Holdings 144A 6.50% 6/20/27 # | 180,000 | 192,471 | ||||
Rutas 2 and 7 Finance 144A 3.413% 9/30/36 #, ^ | 200,000 | 147,899 | ||||
Southwest Airlines 5.125% 6/15/27 | 40,000 | 45,602 | ||||
United Airlines | ||||||
144A 4.375% 4/15/26 # | 65,000 | 65,385 | ||||
144A 4.625% 4/15/29 # | 80,000 | 79,720 | ||||
VistaJet Malta Finance 144A 10.50% 6/1/24 # | 50,000 | 53,607 | ||||
696,986 | ||||||
Utilities – 0.76% | ||||||
Calpine | ||||||
144A 4.50% 2/15/28 # | 67,000 | 66,729 | ||||
144A 5.00% 2/1/31 # | 185,000 | 178,327 | ||||
144A 5.25% 6/1/26 # | 122,000 | 125,012 | ||||
CenterPoint Energy 1.45% 6/1/26 | 255,000 | 250,767 | ||||
Duke Energy 4.875% 9/16/24 µ, ψ | 240,000 | 250,200 | ||||
Entergy Louisiana 4.95% 1/15/45 | 5,000 | 5,405 | ||||
Entergy Mississippi 2.85% 6/1/28 | 60,000 | 63,263 | ||||
Entergy Texas 3.55% 9/30/49 | 115,000 | 125,368 | ||||
Evergy 2.90% 9/15/29 | 160,000 | 166,667 | ||||
Evergy Metro 3.65% 8/15/25 | 25,000 | 26,714 | ||||
Infraestructura Energetica Nova 144A 3.75% 1/14/28 # | 205,000 | 213,651 | ||||
Mong Duong Finance Holdings 144A 5.125% 5/7/29 # | 500,000 | 484,203 | ||||
NextEra Energy Capital Holdings 5.65% 5/1/79 µ | 55,000 | 63,171 | ||||
Pacific Gas and Electric 2.10% 8/1/27 | 265,000 | 255,318 | ||||
PacifiCorp 2.90% 6/15/52 | 290,000 | 289,287 | ||||
PG&E 5.25% 7/1/30 | 95,000 | 97,534 | ||||
Southern California Edison | ||||||
4.00% 4/1/47 | 30,000 | 33,477 | ||||
4.875% 3/1/49 | 45,000 | 56,131 | ||||
Southwestern Electric Power 4.10% 9/15/28 | 165,000 | 183,413 | ||||
Vistra Operations 144A 4.375% 5/1/29 # | 175,000 | 172,038 | ||||
3,106,675 | ||||||
Total Corporate Bonds (cost $47,353,773) | 47,684,105 |
26
Principal | ||||||||
amount° | Value (US $) | |||||||
Non-Agency Asset-Backed Securities – 0.16% | ||||||||
Diamond Infrastructure Funding | ||||||||
Series 2021-1A A 144A 1.76% 4/15/49 # | 100,000 | $ | 97,870 | |||||
Domino’s Pizza Master Issuer | ||||||||
Series 2021-1A A2I 144A 2.662% 4/25/51 # | 99,500 | 100,098 | ||||||
Taco Bell Funding | ||||||||
Series 2021-1A A2I 144A 1.946% 8/25/51 # | 200,000 | 196,593 | ||||||
Trafigura Securitisation Finance | ||||||||
Series 2021-1A A2 144A 1.08% 1/15/25 # | 250,000 | 246,906 | ||||||
Total Non-Agency Asset-Backed Securities (cost $649,467) | 641,467 | |||||||
Non-Agency Collateralized Mortgage Obligations – 0.04% | ||||||||
JP Morgan Mortgage Trust | ||||||||
Series 2021-10 A3 144A 2.50% 12/25/51 #, ● | 48,554 | 48,882 | ||||||
Morgan Stanley Residential Mortgage Loan Trust | ||||||||
Series 2021-4 A3 144A 2.50% 7/25/51 #, ● | 97,900 | 98,387 | ||||||
Total Non-Agency Collateralized Mortgage Obligations (cost $149,131) | 147,269 | |||||||
Non-Agency Commercial Mortgage-Backed Securities – 1.00% | ||||||||
BANK | ||||||||
Series 2017-BNK5 B 3.896% 6/15/60 ● | 95,000 | 102,130 | ||||||
Series 2019-BN20 A3 3.011% 9/15/62 | 250,000 | 265,778 | ||||||
Series 2020-BN25 A5 2.649% 1/15/63 | 350,000 | 363,101 | ||||||
Series 2021-BN36 A5 2.47% 9/15/64 | 465,000 | 475,809 | ||||||
Benchmark Mortgage Trust | ||||||||
Series 2020-B17 A5 2.289% 3/15/53 | 350,000 | 354,038 | ||||||
Series 2020-B20 A5 2.034% 10/15/53 | 300,000 | 297,221 | ||||||
Series 2021-B24 A5 2.584% 3/15/54 | 260,000 | 268,576 | ||||||
CD Mortgage Trust | ||||||||
Series 2019-CD8 A4 2.912% 8/15/57 | 250,000 | 263,617 | ||||||
CFCRE Commercial Mortgage Trust | ||||||||
Series 2016-C7 A3 3.839% 12/10/54 | 100,000 | 108,602 | ||||||
Citigroup Commercial Mortgage Trust | ||||||||
Series 2019-C7 A4 3.102% 12/15/72 | 350,000 | 375,717 | ||||||
Grace Trust | ||||||||
Series 2020-GRCE A 144A 2.347% 12/10/40 # | 100,000 | 100,082 | ||||||
GS Mortgage Securities Trust | ||||||||
Series 2017-GS6 A3 3.433% 5/10/50 | 165,000 | 177,597 | ||||||
Series 2019-GC42 A4 3.001% 9/1/52 | 350,000 | 371,203 | ||||||
JPM-BB Commercial Mortgage Securities Trust | ||||||||
Series 2015-C33 A4 3.77% 12/15/48 | 150,000 | 161,988 |
27
Schedule of investments
Delaware Wealth Builder Fund
Principal | ||||||||
amount° | Value (US $) | |||||||
Non-Agency Commercial Mortgage-Backed Securities (continued) | ||||||||
Wells Fargo Commercial Mortgage Trust | ||||||||
Series 2019-C54 A4 3.146% 12/15/52 | 375,000 | $ | 401,589 | |||||
Total Non-Agency Commercial Mortgage-Backed Securities (cost $4,091,937) | 4,087,048 | |||||||
Sovereign Bonds – 1.85%Δ | ||||||||
Armenia – 0.04% | ||||||||
Republic of Armenia International Bond | ||||||||
144A 3.60% 2/2/31 # | 200,000 | 184,000 | ||||||
184,000 | ||||||||
Brazil – 0.08% | ||||||||
Brazil Notas do Tesouro Nacional Serie F | ||||||||
10.00% 1/1/27 | BRL | 2,000,000 | 339,070 | |||||
339,070 | ||||||||
Chile – 0.02% | ||||||||
Bonos de la Tesoreria de la Republica en pesos | ||||||||
144A 2.80% 10/1/33 # | CLP | 55,000,000 | 48,867 | |||||
5.00% 3/1/35 | CLP | 25,000,000 | 27,608 | |||||
76,475 | ||||||||
Colombia – 0.16% | ||||||||
Colombia Government International Bonds | ||||||||
4.125% 2/22/42 | 217,000 | 184,572 | ||||||
5.20% 5/15/49 | 200,000 | 186,692 | ||||||
Colombian TES 7.00% 6/30/32 | COP | 1,270,900,000 | 286,922 | |||||
658,186 | ||||||||
Dominican Republic – 0.14% | ||||||||
Dominican Republic International Bonds | ||||||||
144A 4.50% 1/30/30 # | 396,000 | 395,014 | ||||||
144A 4.875% 9/23/32 # | 200,000 | 199,502 | ||||||
594,516 | ||||||||
Egypt – 0.14% | ||||||||
Egypt Government International Bonds | ||||||||
144A 5.75% 5/29/24 # | 400,000 | 404,145 | ||||||
7.903% 2/21/48 | 200,000 | 161,380 | ||||||
565,525 | ||||||||
Gabon – 0.05% | ||||||||
Gabon Government International Bond | ||||||||
144A 6.625% 2/6/31 # | 200,000 | 188,240 | ||||||
188,240 |
28
Principal | |||||||||
amount° | Value (US $) | ||||||||
Sovereign BondsΔ (continued) | |||||||||
Honduras – 0.05% | |||||||||
Honduras Government International Bond | |||||||||
144A 5.625% 6/24/30 # | 200,000 | $ | 199,002 | ||||||
199,002 | |||||||||
Indonesia – 0.02% | |||||||||
Indonesia Treasury Bond | |||||||||
6.125% 5/15/28 | IDR | 1,339,000,000 | 95,195 | ||||||
95,195 | |||||||||
Ivory Coast – 0.13% | |||||||||
Ivory Coast Government International Bonds | |||||||||
144A 4.875% 1/30/32 # | EUR | 200,000 | 212,430 | ||||||
144A 6.125% 6/15/33 # | 200,000 | 204,853 | |||||||
144A 6.875% 10/17/40 # | EUR | 100,000 | 115,752 | ||||||
533,035 | |||||||||
Malaysia – 0.13% | |||||||||
Malaysia Government Bond | |||||||||
3.955% 9/15/25 | MYR | 2,131,000 | 525,534 | ||||||
525,534 | |||||||||
Mongolia – 0.05% | |||||||||
Mongolia Government International Bond | |||||||||
144A 5.625% 5/1/23 # | 200,000 | 207,068 | |||||||
207,068 | |||||||||
Morocco – 0.07% | |||||||||
Morocco Government International Bonds | |||||||||
144A 1.375% 3/30/26 # | EUR | 100,000 | 113,071 | ||||||
144A 2.375% 12/15/27 # | 200,000 | 193,576 | |||||||
306,647 | |||||||||
North Macedonia – 0.03% | |||||||||
North Macedonia Government International Bond | |||||||||
144A 3.675% 6/3/26 # | EUR | 100,000 | 120,598 | ||||||
120,598 | |||||||||
Paraguay – 0.11% | |||||||||
Paraguay Government International Bond | |||||||||
144A 4.95% 4/28/31 # | 400,000 | 441,504 | |||||||
441,504 | |||||||||
Peru – 0.14% | |||||||||
Corp Financiera de Desarrollo 144A 2.40% 9/28/27 # | 200,000 | 195,655 | |||||||
Peru Government Bond 6.95% 8/12/31 | PEN | 602,000 | 158,939 |
29
Schedule of investments
Delaware Wealth Builder Fund
Principal | |||||||||
amount° | Value (US $) | ||||||||
Sovereign BondsΔ (continued) | |||||||||
Peru (continued) | |||||||||
Peruvian Government International Bond 2.392% 1/23/26 | 200,000 | $ | 203,368 | ||||||
557,962 | |||||||||
Romania – 0.02% | |||||||||
Romanian Government International Bond | |||||||||
144A 2.625% 12/2/40 # | EUR | 73,000 | 73,385 | ||||||
73,385 | |||||||||
Senegal – 0.05% | |||||||||
Senegal Government International Bond | |||||||||
144A 6.25% 5/23/33 # | 200,000 | 201,262 | |||||||
201,262 | |||||||||
Serbia – 0.07% | |||||||||
Serbia International Bond | |||||||||
144A 3.125% 5/15/27 # | EUR | 250,000 | 299,624 | ||||||
299,624 | |||||||||
Turkey – 0.05% | |||||||||
Turkiye Ihracat Kredi Bankasi | |||||||||
144A 5.75% 7/6/26 # | 200,000 | 188,828 | |||||||
188,828 | |||||||||
Ukraine – 0.07% | |||||||||
Ukraine Government International Bond | |||||||||
144A 6.876% 5/21/29 # | 300,000 | 280,073 | |||||||
280,073 | |||||||||
Uruguay – 0.10% | |||||||||
Uruguay Government International Bonds | |||||||||
4.50% 8/14/24 | 53,000 | 56,255 | |||||||
9.875% 6/20/22 | UYU | 14,730,000 | 337,833 | ||||||
394,088 | |||||||||
Uzbekistan – 0.13% | |||||||||
Republic of Uzbekistan International Bonds | |||||||||
144A 3.90% 10/19/31 # | 300,000 | 283,520 | |||||||
144A 4.75% 2/20/24 # | 250,000 | 259,811 | |||||||
543,331 | |||||||||
Total Sovereign Bonds (cost $7,969,166) | 7,573,148 |
30
Principal | |||||||||
amount° | Value (US $) | ||||||||
Supranational Bank – 0.28% | |||||||||
Banco Latinoamericano de Comercio Exterior | |||||||||
144A 2.375% 9/14/25 # | 250,000 | $ | 249,241 | ||||||
Banque Ouest Africaine de Developpement | |||||||||
144A 4.70% 10/22/31 # | 402,000 | 437,336 | |||||||
Central American Bank For Economic Integration | |||||||||
144A 2.00% 5/6/25 # | 300,000 | 305,339 | |||||||
European Investment Bank | |||||||||
5.50% 1/23/23 | MXN | 3,282,000 | 150,137 | ||||||
Total Supranational Bank (cost $1,118,618) | 1,142,053 | ||||||||
US Treasury Obligations – 2.61% | |||||||||
US Treasury Bonds | |||||||||
1.75% 8/15/41 | 305,000 | 299,520 | |||||||
2.00% 8/15/51 | 85,000 | 89,037 | |||||||
2.25% 8/15/46 | 960,000 | 1,037,625 | |||||||
4.375% 2/15/38 | 645,000 | 902,824 | |||||||
US Treasury Notes | |||||||||
0.375% 9/15/24 | 5,000 | 4,944 | |||||||
0.75% 11/15/24 | 4,485,000 | 4,474,663 | |||||||
1.125% 10/31/26 | 2,055,000 | 2,052,431 | |||||||
1.375% 10/31/28 | 1,370,000 | 1,371,391 | |||||||
1.375% 11/15/31 | 235,000 | 233,605 | |||||||
US Treasury Strip Principal | |||||||||
2.245% 5/15/44 ^ | 270,000 | 176,156 | |||||||
Total US Treasury Obligations (cost $10,508,449) | 10,642,196 | ||||||||
Number of | |||||||||
shares | |||||||||
Common Stock – 59.20% | |||||||||
Communication Services – 3.74% | |||||||||
Alphabet Class A † | 308 | 874,089 | |||||||
Alphabet Class C † | 494 | 1,407,426 | |||||||
AT&T | 60,621 | 1,383,978 | |||||||
Century Communications =, † | 1,625,000 | 0 | |||||||
Comcast Class A | 44,503 | 2,224,260 | |||||||
KDDI | 29,800 | 864,652 | |||||||
Meta Platforms Class A † | 3,622 | 1,175,194 | |||||||
Orange | 75,030 | 806,629 | |||||||
Take-Two Interactive Software † | 4,242 | 703,663 | |||||||
Verizon Communications | 73,844 | 3,712,138 |
31
Schedule of investments
Delaware Wealth Builder Fund
Number of | ||||||
shares | Value (US $) | |||||
Common Stock (continued) | ||||||
Communication Services (continued) | ||||||
Walt Disney † | 14,466 | $ | 2,096,123 | |||
15,248,152 | ||||||
Consumer Discretionary – 8.76% | ||||||
adidas AG | 4,340 | 1,255,205 | ||||
Amazon.com † | 1,046 | 3,668,395 | ||||
Bath & Body Works | 12,005 | 901,936 | ||||
Best Buy | 5,901 | 630,581 | ||||
Buckle | 31,265 | 1,470,706 | ||||
Dollar General | 11,211 | 2,480,994 | ||||
Dollar Tree † | 21,600 | 2,890,728 | ||||
eBay | 10,450 | 704,957 | ||||
H & M Hennes & Mauritz Class B | 33,070 | 582,943 | ||||
Haverty Furniture | 12,543 | 375,161 | ||||
Home Depot | 7,122 | 2,853,144 | ||||
Lowe’s | 19,712 | 4,821,358 | ||||
Newell Brands | 5,701 | 122,400 | ||||
NIKE Class B | 8,764 | 1,483,219 | ||||
Publicis Groupe | 10,140 | 656,147 | ||||
PulteGroup | 10,409 | 520,762 | ||||
Ross Stores | 10,552 | 1,151,118 | ||||
Sodexo † | 15,570 | 1,310,022 | ||||
Sturm Ruger & Co. | 16,482 | 1,181,595 | ||||
Swatch Group | 5,350 | 1,571,346 | ||||
Tesla † | 858 | 982,204 | ||||
TJX | 24,983 | 1,733,820 | ||||
Tractor Supply | 7,536 | 1,698,087 | ||||
Ulta Beauty † | 1,828 | 701,861 | ||||
35,748,689 | ||||||
Consumer Staples – 4.97% | ||||||
Altria Group | 30,600 | 1,304,784 | ||||
Archer-Daniels-Midland | 43,800 | 2,724,798 | ||||
Asahi Group Holdings | 14,700 | 542,141 | ||||
Colgate-Palmolive | 7,444 | 558,449 | ||||
Conagra Brands | 75,100 | 2,294,305 | ||||
Danone | 21,300 | 1,252,728 | ||||
Diageo | 46,060 | 2,324,567 | ||||
Essity Class B | 31,320 | 1,000,113 | ||||
Kao | 18,500 | 943,715 | ||||
Kellogg | 13,328 | 815,407 | ||||
Kirin Holdings | 16,600 | 264,483 |
32
Number of | ||||||
shares | Value (US $) | |||||
Common Stock (continued) | ||||||
Consumer Staples (continued) | ||||||
Koninklijke Ahold Delhaize | 40,250 | $ | 1,354,403 | |||
Lawson | 11,300 | 554,035 | ||||
Nestle | 14,860 | 1,904,633 | ||||
Philip Morris International | 15,799 | 1,357,766 | ||||
Seven & i Holdings | 27,000 | 1,087,491 | ||||
20,283,818 | ||||||
Energy – 2.50% | ||||||
Chevron | 6,316 | 712,887 | ||||
ConocoPhillips | 60,272 | 4,226,875 | ||||
EOG Resources | 4,921 | 428,127 | ||||
Exxon Mobil | 36,272 | 2,170,517 | ||||
Kinder Morgan | 68,068 | 1,052,331 | ||||
Marathon Petroleum | 14,969 | 910,864 | ||||
Williams | 25,661 | 687,458 | ||||
10,189,059 | ||||||
Financials – 6.53% | ||||||
American Financial Group | 9,228 | 1,232,953 | ||||
American International Group | 46,000 | 2,419,600 | ||||
Ameriprise Financial | 4,349 | 1,259,470 | ||||
Artisan Partners Asset Management Class A | 22,944 | 1,026,285 | ||||
Banco Espirito Santo =, † | 105,000 | 0 | ||||
BlackRock | 1,901 | 1,719,664 | ||||
Blackstone | 9,621 | 1,360,890 | ||||
Diamond Hill Investment Group | 2,514 | 482,914 | ||||
Discover Financial Services | 29,211 | 3,150,406 | ||||
Invesco | 47,805 | 1,067,486 | ||||
MetLife | 62,531 | 3,668,068 | ||||
Principal Financial Group | 19,856 | 1,361,725 | ||||
Prudential Financial | 9,787 | 1,000,819 | ||||
S&P Global | 2,198 | 1,001,695 | ||||
Synchrony Financial | 18,084 | 809,982 | ||||
Truist Financial | 43,400 | 2,574,054 | ||||
US Bancorp | 45,300 | 2,506,902 | ||||
26,642,913 | ||||||
Healthcare – 8.53% | ||||||
AbbVie | 15,412 | 1,776,695 | ||||
Alexandria Real Estate Equities | 1,955 | 391,137 | ||||
AmerisourceBergen | 11,159 | 1,291,654 | ||||
Amgen | 5,598 | 1,113,330 | ||||
Baxter International | 31,200 | 2,326,584 |
33
Schedule of investments
Delaware Wealth Builder Fund
Number of | ||||||
shares | Value (US $) | |||||
Common Stock (continued) | ||||||
Healthcare (continued) | ||||||
Bristol-Myers Squibb | 23,837 | $ | 1,278,378 | |||
Cigna | 11,000 | 2,110,900 | ||||
CVS Health | 30,400 | 2,707,424 | ||||
Eli Lilly & Co. | 2,715 | 673,429 | ||||
Fresenius Medical Care AG & Co. | 22,580 | 1,346,274 | ||||
Healthcare Trust of America Class A | 7,159 | 243,120 | ||||
Humana | 511 | 214,472 | ||||
Johnson & Johnson | 30,272 | 4,720,313 | ||||
Merck & Co. | 54,409 | 4,075,778 | ||||
Molina Healthcare † | 2,541 | 724,642 | ||||
Novo Nordisk Class B | 15,590 | 1,668,911 | ||||
Pfizer | 44,443 | 2,387,922 | ||||
Roche Holding | 3,890 | 1,518,696 | ||||
Smith & Nephew | 88,080 | 1,415,567 | ||||
UnitedHealth Group | 1,209 | 537,062 | ||||
Viatris | 187,093 | 2,303,115 | ||||
34,825,403 | ||||||
Industrials – 3.08% | ||||||
Dover | 15,017 | 2,460,536 | ||||
Honeywell International | 11,233 | 2,271,762 | ||||
Knorr-Bremse | 4,730 | 470,511 | ||||
Lockheed Martin | 3,179 | 1,059,624 | ||||
Northrop Grumman | 7,100 | 2,476,480 | ||||
Raytheon Technologies | 30,179 | 2,442,085 | ||||
Securitas Class B | 96,010 | 1,387,181 | ||||
12,568,179 | ||||||
Information Technology – 14.09% | ||||||
Adobe † | 3,236 | 2,167,635 | ||||
Amadeus IT Group † | 23,250 | 1,488,595 | ||||
Analog Devices | 1,160 | 209,090 | ||||
Apple | 55,731 | 9,212,334 | ||||
Broadcom | 8,850 | 4,900,068 | ||||
Cisco Systems | 74,012 | 4,058,818 | ||||
Cognizant Technology Solutions Class A | 34,932 | 2,723,997 | ||||
Dropbox Class A † | 31,041 | 763,919 | ||||
Enphase Energy † | 2,082 | 520,500 | ||||
Fidelity National Information Services | 20,963 | 2,190,634 | ||||
HP | 44,569 | 1,572,394 | ||||
International Business Machines | 6,275 | 734,803 | ||||
Kyndryl Holdings † | 1,255 | 19,829 |
34
Number of | ||||||
shares | Value (US $) | |||||
Common Stock (continued) | ||||||
Information Technology (continued) | ||||||
Lam Research | 2,403 | $ | 1,633,680 | |||
Microsoft | 24,994 | 8,262,766 | ||||
Monolithic Power Systems | 2,860 | 1,582,896 | ||||
Motorola Solutions | 11,000 | 2,784,980 | ||||
NetApp | 17,680 | 1,571,398 | ||||
NVIDIA | 2,745 | 896,956 | ||||
Oracle | 26,900 | 2,440,906 | ||||
Paychex | 11,182 | 1,332,894 | ||||
Paycom Software † | 1,253 | 548,162 | ||||
QUALCOMM | 10,036 | 1,812,100 | ||||
SAP | 9,560 | 1,225,126 | ||||
TE Connectivity | 2,036 | 313,402 | ||||
Western Union | 47,174 | 746,293 | ||||
Xilinx | 7,868 | 1,797,445 | ||||
57,511,620 | ||||||
Materials – 1.16% | ||||||
Air Liquide | 9,470 | 1,563,900 | ||||
Dow | 11,787 | 647,460 | ||||
DuPont de Nemours | 34,200 | 2,529,432 | ||||
4,740,792 | ||||||
REIT Diversified – 0.42% | ||||||
Cousins Properties | 5,112 | 193,029 | ||||
DigitalBridge Group † | 1,333 | 10,611 | ||||
Gaming and Leisure Properties | 3,321 | 149,844 | ||||
Lexington Realty Trust | 12,939 | 194,732 | ||||
New Residential Investment | 38,580 | 410,105 | ||||
VICI Properties | 27,872 | 758,118 | ||||
1,716,439 | ||||||
REIT Healthcare – 0.45% | ||||||
CareTrust REIT | 7,355 | 148,645 | ||||
Healthpeak Properties | 3,381 | 111,100 | ||||
Medical Properties Trust | 27,557 | 586,688 | ||||
National Health Investors | 313 | 16,351 | ||||
Omega Healthcare Investors | 20,129 | 562,404 | ||||
Ventas | 998 | 46,826 | ||||
Welltower | 4,687 | 373,179 | ||||
1,845,193 |
35
Schedule of investments
Delaware Wealth Builder Fund
Number of | ||||||
shares | Value (US $) | |||||
Common Stock (continued) | ||||||
REIT Hotel – 0.07% | ||||||
Apple Hospitality REIT | 11,433 | $ | 171,724 | |||
Chatham Lodging Trust † | 6,220 | 74,080 | ||||
Host Hotels & Resorts † | 1,589 | 24,947 | ||||
270,751 | ||||||
REIT Industrial – 0.47% | ||||||
Americold Realty Trust | 496 | 16,190 | ||||
Duke Realty | 6,010 | 350,563 | ||||
Plymouth Industrial REIT | 1,407 | 41,858 | ||||
Prologis | 9,199 | 1,386,749 | ||||
Terreno Realty | 1,637 | 124,658 | ||||
1,920,018 | ||||||
REIT Information Technology – 0.34% | ||||||
Digital Realty Trust | 2,919 | 489,633 | ||||
Equinix | 1,116 | 906,415 | ||||
1,396,048 | ||||||
REIT Mall – 0.09% | ||||||
Simon Property Group | 2,425 | 370,637 | ||||
370,637 | ||||||
REIT Manufactured Housing – 0.11% | ||||||
Equity LifeStyle Properties | 1,677 | 136,340 | ||||
Sun Communities | 1,727 | 325,678 | ||||
462,018 | ||||||
REIT Mortgage – 0.35% | ||||||
AGNC Investment | 72,261 | 1,104,871 | ||||
Annaly Capital Management | 38,075 | 308,407 | ||||
1,413,278 | ||||||
REIT Multifamily – 1.01% | ||||||
American Homes 4 Rent Class A | 3,230 | 129,491 | ||||
Apartment Income REIT | 779 | 39,542 | ||||
AvalonBay Communities | 1,239 | 295,960 | ||||
Camden Property Trust | 1,113 | 183,879 | ||||
Equity Residential | 33,823 | 2,885,440 | ||||
Essex Property Trust | 1,141 | 387,301 | ||||
Mid-America Apartment Communities | 745 | 153,656 | ||||
UDR | 741 | 42,037 | ||||
4,117,306 |
36
Number of | ||||||
shares | Value (US $) | |||||
Common Stock (continued) | ||||||
REIT Office – 0.12% | ||||||
Boston Properties | 474 | $ | 51,116 | |||
Columbia Property Trust | 1,041 | 19,987 | ||||
Douglas Emmett | 735 | 24,086 | ||||
Highwoods Properties | 4,490 | 193,968 | ||||
Kilroy Realty | 1,773 | 114,412 | ||||
Piedmont Office Realty Trust Class A | 4,110 | 71,432 | ||||
SL Green Realty | 320 | 22,217 | ||||
497,218 | ||||||
REIT Self-Storage – 0.35% | ||||||
CubeSmart | 2,044 | 110,212 | ||||
Extra Space Storage | 1,940 | 388,000 | ||||
Life Storage | 1,654 | 218,560 | ||||
National Storage Affiliates Trust | 2,053 | 126,013 | ||||
Public Storage | 1,812 | 593,213 | ||||
1,435,998 | ||||||
REIT Shopping Center – 0.28% | ||||||
Brixmor Property Group | 9,471 | 215,370 | ||||
Federal Realty Investment Trust | 215 | 26,374 | ||||
Kimco Realty | 5,736 | 128,601 | ||||
Kite Realty Group Trust | 5,052 | 101,646 | ||||
Regency Centers | 2,696 | 186,941 | ||||
Retail Opportunity Investments | 8,919 | 156,618 | ||||
SITE Centers | 11,123 | 167,512 | ||||
Urban Edge Properties | 8,282 | 142,699 | ||||
1,125,761 | ||||||
REIT Single Tenant – 0.24% | ||||||
Agree Realty | 2,350 | 158,766 | ||||
Four Corners Property Trust | 4,393 | 118,699 | ||||
National Retail Properties | 1,961 | 86,480 | ||||
Orion Office REIT † | 351 | 6,230 | ||||
Realty Income | 3,969 | 269,575 | ||||
Spirit Realty Capital | 3,546 | 158,010 | ||||
STORE Capital | 5,397 | 177,777 | ||||
975,537 | ||||||
REIT Specialty – 0.37% | ||||||
EPR Properties | 125 | 5,765 | ||||
Essential Properties Realty Trust | 4,005 | 108,255 | ||||
Invitation Homes | 9,021 | 364,809 | ||||
Iron Mountain | 18,571 | 843,866 |
37
Schedule of investments
Delaware Wealth Builder Fund
Number of | |||||||
shares | Value (US $) | ||||||
Common Stock (continued) | |||||||
REIT Specialty (continued) | |||||||
Lamar Advertising Class A | 420 | $ | 45,889 | ||||
Outfront Media | 1,358 | 33,937 | |||||
WP Carey | 1,478 | 112,846 | |||||
1,515,367 | |||||||
Utilities – 1.17% | |||||||
Edison International | 44,100 | 2,878,848 | |||||
NRG Energy | 31,703 | 1,141,942 | |||||
Vistra | 38,001 | 755,460 | |||||
4,776,250 | |||||||
Total Common Stock (cost $208,493,458) | 241,596,444 | ||||||
Convertible Preferred Stock – 1.60% | |||||||
2020 Mandatory Exchangeable Trust 144A 6.50% exercise | |||||||
price $47.09, maturity date 5/16/23 # | 484 | 746,473 | |||||
Algonquin Power & Utilities 7.75% exercise price $18.00, | |||||||
maturity date 6/15/24 | 6,823 | 303,624 | |||||
AMG Capital Trust II 5.15% exercise price $195.47, maturity | |||||||
date 10/15/37 | 7,957 | 471,373 | |||||
Bank of America 7.25% exercise price $50.00 ** | 292 | 414,056 | |||||
El Paso Energy Capital Trust I 4.75% exercise price $34.49, | |||||||
maturity date 3/31/28 | 27,847 | 1,404,043 | |||||
Elanco Animal Health 5.00% exercise price $38.40, maturity | |||||||
date 2/1/23 | 9,636 | 433,235 | |||||
Essential Utilities 6.00% exercise price $42.19, maturity | |||||||
date 4/30/22 | 14,350 | 828,569 | |||||
Lyondellbasell Advanced Polymers 6.00% exercise price | |||||||
$52.33 ** | 761 | 765,946 | |||||
RBC Bearings 5.00% exercise price $226.60, maturity date | |||||||
10/15/24 | 3,111 | 324,166 | |||||
UGI 7.25% exercise price $52.57, maturity date 6/1/24 | 8,729 | 843,658 | |||||
Total Convertible Preferred Stock (cost $6,096,981) | 6,535,143 | ||||||
Preferred Stock – 0.00% | |||||||
Washington Prime Group 6.875% 01/03/22 =, ψ | 4,347 | 0 | |||||
Total Preferred Stock (cost $93,025) | 0 | ||||||
Exchange-Traded Funds – 4.51% | |||||||
iShares Core MSCI Emerging Markets ETF | 120,340 | 7,234,841 | |||||
iShares Global Infrastructure ETF | 200,730 | 9,103,105 |
38
Number of | |||||||
shares | Value (US $) | ||||||
Exchange-Traded Funds (continued) | |||||||
iShares Russell 1000 Growth ETF | 1,620 | $ | 485,806 | ||||
iShares Trust iShares ESG Aware MSCI EAFE ETF | 6,450 | 496,843 | |||||
Vanguard FTSE Developed Markets ETF | 580 | 28,826 | |||||
Vanguard Mega Cap Growth ETF | 4,132 | 1,059,982 | |||||
Total Exchange-Traded Funds (cost $19,438,339) | 18,409,403 | ||||||
Limited Partnerships – 2.95% | |||||||
Merion Champion’s Walk=, †, π | 2,790,000 | 3,259,836 | |||||
Merion Countryside=, †, π | 2,342,812 | 3,812,459 | |||||
Merion The Ledges=, †, π | 4,093,765 | 4,982,930 | |||||
Total Limited Partnerships (cost $4,856,741) | 12,055,225 | ||||||
Principal | |||||||
amount° | |||||||
Leveraged Non-Recourse Security – 0.00% | |||||||
JPMorgan Fixed Income Pass Through Trust Auction | |||||||
Series 2007-B 144A 0.249% 1/15/87 #, =, ◆ | 1,300,000 | 1,300 | |||||
Total Leveraged Non-Recourse Security (cost $1,105,000) | 1,300 | ||||||
Number of | |||||||
shares | |||||||
Short-Term Investments – 4.96% | |||||||
Money Market Mutual Funds – 4.96% | |||||||
BlackRock FedFund – Institutional Shares (seven-day | |||||||
effective yield 0.03%) | 5,061,162 | 5,061,162 | |||||
Fidelity Investments Money Market Government Portfolio – | |||||||
Class I (seven-day effective yield 0.01%) | 5,061,162 | 5,061,162 | |||||
GS Financial Square Government Fund – Institutional | |||||||
Shares (seven-day effective yield 0.03%) | 5,061,162 | 5,061,162 | |||||
Morgan Stanley Government Portfolio – Institutional Share | |||||||
Class (seven-day effective yield 0.03%) | 5,061,162 | 5,061,162 | |||||
Total Short-Term Investments (cost $20,244,648) | 20,244,648 | ||||||
Total Value of Securities–99.80% | |||||||
(cost $365,897,062) | $ | 407,303,704 |
° | Principal amount shown is stated in USD unless noted that the security is denominated in another currency. |
# | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At November 30, 2021, the aggregate value of Rule 144A securities was $38,811,775, which represents 9.51% of the Fund’s net assets. See Note 11 in “Notes to financial statements.” |
39
Schedule of investments
Delaware Wealth Builder Fund
● | Variable rate investment. Rates reset periodically. Rate shown reflects the rate in effect at November 30, 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. |
^ | Zero-coupon security. The rate shown is the effective yield at the time of purchase. |
µ | Fixed to variable rate investment. The rate shown reflects the fixed rate in effect at November 30, 2021. Rate will reset at a future date. |
ψ | Perpetual security. Maturity date represents next call date. |
Δ | Securities have been classified by country of origin. |
† | 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.” |
** | Perpetual security with no stated maturity date. |
π | Restricted security. These investments are in securities not registered under the Securities Act of 1933, as amended, and have certain restrictions on resale which may limit their liquidity. At November 30, 2021, the aggregate value of restricted securities was $12,055,225, which represented 2.95% of the Fund’s net assets. See Note 11 in “Notes to financial statements” and the table below for additional details on restricted securities. |
◆ | 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. |
Restricted Securities
Investments | Date of Acquisition | Cost | Value | |||||
Merion Champion’s Walk | 8/4/2017 | $ | 1,668,660 | $ | 2,953,411 | |||
Merion Champion’s Walk | 2/13/2018 | 43,282 | 76,606 | |||||
Merion Champion’s Walk | 7/11/2018 | 46,053 | 76,606 | |||||
Merion Champion’s Walk | 10/22/2018 | 46,988 | 76,606 | |||||
Merion Champion’s Walk | 2/13/2019 | 47,902 | 76,607 | |||||
Merion Countryside | 8/13/2020 | — | 3,812,459 | |||||
Merion The Ledges | 9/26/2018 | 2,775,173 | 4,652,138 | |||||
Merion The Ledges | 9/12/2019 | 116,634 | 180,432 | |||||
Merion The Ledges | 2/1/2021 | 112,049 | 150,360 | |||||
Total | $ | 4,856,741 | $ | 12,055,225 |
40
The following foreign currency exchange contracts, futures contracts, and swap contracts were outstanding at November 30, 2021:1
Foreign Currency Exchange Contracts
Currency to | Settlement | Unrealized | Unrealized | ||||||||||||||||||
Counterparty | Receive (Deliver) | In Exchange For | Date | Appreciation | Depreciation | ||||||||||||||||
BNYM | DKK | (213,938 | ) | USD | 32,377 | 12/1/21 | $ | — | $ | (246 | ) | ||||||||||
BNYM | EUR | 109,103 | USD | (122,998 | ) | 12/1/21 | 737 | — | |||||||||||||
BNYM | GBP | 34,990 | USD | (46,574 | ) | 12/1/21 | — | (40 | ) | ||||||||||||
BNYM | JPY | (6,285,913 | ) | USD | 55,233 | 12/1/21 | — | (377 | ) | ||||||||||||
CITI | COP | (829,388,000 | ) | USD | 206,151 | 1/28/22 | — | (147 | ) | ||||||||||||
JPMCB | BRL | (1,525,973 | ) | USD | 267,691 | 1/28/22 | — | (229 | ) | ||||||||||||
JPMCB | EUR | (903,926 | ) | USD | 1,020,261 | 1/28/22 | — | (7,021 | ) | ||||||||||||
JPMCB | KZT | 305,813,456 | USD | (689,001 | ) | 1/28/22 | — | (4,684 | ) | ||||||||||||
JPMCB | MXN | 20,507 | USD | (933 | ) | 1/28/22 | 12 | — | |||||||||||||
Total Foreign Currency Exchange Contracts | $ | 749 | $ | (12,744 | ) |
Futures Contracts
Exchange-Traded
Variation | |||||||||||||||||||||||
Margin | |||||||||||||||||||||||
Notional | Value/ | Value/ | Due from | ||||||||||||||||||||
Notional | Cost | Expiration | Unrealized | Unrealized | (Due to) | ||||||||||||||||||
Contracts to Buy (Sell) | Amount | (Proceeds) | Date | Appreciation | Depreciation | Brokers | |||||||||||||||||
US Treasury | |||||||||||||||||||||||
7 | 5 yr Notes | $ | 849,789 | $ | 843,298 | 3/31/22 | $ | 6,491 | $ | — | $ | 930 | |||||||||||
US Treasury | |||||||||||||||||||||||
(10) | 10 yr Notes | (1,308,125 | ) | (1,291,853 | ) | 3/22/22 | — | (16,272 | ) | (5,313 | ) | ||||||||||||
US Treasury | |||||||||||||||||||||||
10 yr Ultra | |||||||||||||||||||||||
(3) | Notes | (440,672 | ) | (433,000 | ) | 3/22/22 | — | (7,672 | ) | (3,609 | ) | ||||||||||||
Total Futures Contracts | $ | (881,555 | ) | $ | 6,491 | $ | (23,944 | ) | $ | (7,992 | ) |
41
Schedule of investments
Delaware Wealth Builder Fund
Swap Contracts
CDS Contracts2 | ||||||||||||||||
Counterparty/ | ||||||||||||||||
Reference | Variation | |||||||||||||||
Obligation/ | Upfront | Margin | ||||||||||||||
Termination Date/ | Annual | Payments | Due from | |||||||||||||
Payment | Notional | Protection | Paid | Unrealized | (Due to) | |||||||||||
Frequency | Amount3 | Payments | Value | (Received) | Appreciation4 | Brokers | ||||||||||
Over-The-Counter: | ||||||||||||||||
Protection Purchased/ | ||||||||||||||||
Moody’s Ratings: | ||||||||||||||||
JPMCB-Federative | ||||||||||||||||
Republic of | ||||||||||||||||
Brazil 4.25% | ||||||||||||||||
6/6/25 B2 | ||||||||||||||||
6/22/26- | ||||||||||||||||
Quarterly | 359,000 | 1.000% | $ | 21,884 | $ | 18,928 | $ | 2,956 | $ | — | ||||||
JPMCB-Republic | ||||||||||||||||
of Turkey | ||||||||||||||||
11.875% | ||||||||||||||||
1/15/30 B2 | ||||||||||||||||
6/22/26- | ||||||||||||||||
Quarterly | 200,000 | 1.000% | 31,696 | 30,406 | 1,290 | — | ||||||||||
Total CDS Contracts | $ | 53,580 | $ | 49,334 | $ | 4,246 | $ | — |
The use of foreign currency exchange contracts, futures contracts, and swap contracts involves elements of market risk and risks in excess of the amounts disclosed in these financial statements. The notional amounts and foreign currency exchange contracts presented above 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 | 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). 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 CDS agreement. |
3 | Notional amount shown is stated in USD unless noted that the swap is denominated in another currency. |
42
4 | Unrealized appreciation (depreciation) does not include periodic interest payments (receipt) on swap contracts accrued daily in the amount of $(1,118) |
Summary of abbreviations:
AG – Aktiengesellschaft
BB – Barclays Bank
BNYM – Bank of New York Mellon
CDS – Credit Default Swap
CITI – Citigroup
CLO – Collateralized Loan Obligation
EAFE – Europe, Australasia, and Far East
ESG – Environmental, Social, and Governance
ETF – Exchange-Traded Fund
FTSE – Financial Times Stock Exchange
GNMA – Government National Mortgage Association
GS – Goldman Sachs
ICE – Intercontinental Exchange, Inc.
JPM – JPMorgan
JPMCB – JPMorgan Chase Bank
LIBOR – London interbank offered rate
LIBOR03M – ICE LIBOR USD 3 Month
LIBOR06M – ICE LIBOR USD 6 Month
MSCI – Morgan Stanley Capital International
REIT – Real Estate Investment Trust
S&P – Standard & Poor’s Financial Services LLC
S.F. – Single Family
SOFR – Secured Overnight Financing Rate
TBA – To be announced
yr – Year
Summary of currencies:
BRL – Brazilian Real
CLP – Chilean Peso
COP – Colombia Peso
DKK – Danish Krone
EUR – European Monetary Unit
GBP – British Pound Sterling
43
Schedule of investments
Delaware Wealth Builder Fund
Summary of currencies: (continued)
IDR – Indonesia Rupiah
JPY – Japanese Yen
KZT – Kazakhstan Tenge
MXN – Mexican Peso
MYR – Malaysian Ringgit
PEN – Peruvian Sol
USD – US Dollar
UYU – Uruguayan Peso
See accompanying notes, which are an integral part of the financial statements.
44
Statement of assets and liabilities | |
Delaware Wealth Builder Fund | November 30, 2021 |
Assets: | |||
Investments, at value* | $ | 407,303,704 | |
Cash | 476,044 | ||
Cash collateral due from brokers | 19,955 | ||
Foreign currencies, at valueΔ | 81,938 | ||
Dividends and interest receivable | 1,370,822 | ||
Receivable for securities sold | 1,350,344 | ||
Receivable for fund shares sold | 399,668 | ||
Foreign tax reclaims receivable | 264,963 | ||
Upfront payments paid on over the counter credit default swap contracts | 49,334 | ||
Unrealized appreciation on over the counter credit default swap contracts | 4,246 | ||
Unrealized appreciation on foreign currency exchange contracts | 749 | ||
Total Assets | 411,321,767 | ||
Liabilities: | |||
Payable for securities purchased | 2,116,824 | ||
Payable for fund shares redeemed | 488,782 | ||
Investment management fees payable to affiliates | 240,317 | ||
Other accrued expenses | 116,612 | ||
Distribution fees payable to affiliates | 81,704 | ||
Cash collateral due to brokers | 70,000 | ||
Dividend disbursing and transfer agent fees and expenses payable to | |||
non-affiliates | 49,374 | ||
Unrealized depreciation on foreign currency exchange contracts | 12,744 | ||
Variation margin due to broker on futures contracts | 7,992 | ||
Accounting and administration expenses payable to affiliates | 2,928 | ||
Dividend disbursing and transfer agent fees and expenses payable to affiliates | 1,563 | ||
Trustees’ fees and expenses payable to affiliates | 1,248 | ||
Swap payments payable | 1,118 | ||
Legal fees payable to affiliates | 896 | ||
Other liabilities | 439 | ||
Reports and statements to shareholders expenses payable to affiliates | 422 | ||
Total Liabilities | 3,192,963 | ||
Total Net Assets | $ | 408,128,804 | |
Net Assets Consist of: | |||
Paid-in capital | $ | 346,478,330 | |
Total distributable earnings (loss) | 61,650,474 | ||
Total Net Assets | $ | 408,128,804 |
45
Statement of assets and liabilities
Delaware Wealth Builder Fund
Net Asset Value | ||||
Class A: | ||||
Net assets | $ | 259,142,652 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 16,497,233 | |||
Net asset value per share | $ | 15.71 | ||
Sales charge | 5.75 | % | ||
Offering price per share, equal to net asset value per share / (1 - sales charge) | $ | 16.67 | ||
Class C: | ||||
Net assets | $ | 31,156,870 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 1,978,705 | |||
Net asset value per share | $ | 15.75 | ||
Class R: | ||||
Net assets | $ | 1,203,490 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 76,592 | |||
Net asset value per share | $ | 15.71 | ||
Institutional Class: | ||||
Net assets | $ | 116,625,792 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 7,427,109 | |||
Net asset value per share | $ | 15.70 | ||
____________________ | ||||
* Investments, at cost | $ | 365,897,062 | ||
Δ Foreign currencies, at cost | 81,147 |
46
Statement of operations | |
Delaware Wealth Builder Fund | Year ended November 30, 2021 |
Investment Income: | |||||
Dividends | $ | 6,431,174 | |||
Interest | 3,825,950 | ||||
Foreign tax withheld | (114,287 | ) | |||
10,142,837 | |||||
Expenses: | |||||
Management fees | 2,688,852 | ||||
Distribution expenses — Class A | 636,255 | ||||
Distribution expenses — Class C | 395,471 | ||||
Distribution expenses — Class R | 6,016 | ||||
Dividend disbursing and transfer agent fees and expenses | 379,379 | ||||
Accounting and administration expenses | 108,646 | ||||
Reports and statements to shareholders expenses | 73,106 | ||||
Registration fees | 70,671 | ||||
Audit and tax fees | 57,029 | ||||
Custodian fees | 43,689 | ||||
Legal fees | 41,745 | ||||
Trustees’ fees and expenses | 14,177 | ||||
Other | 64,894 | ||||
4,579,930 | |||||
Less expenses waived | (108,879 | ) | |||
Less expenses paid indirectly | (240 | ) | |||
Total operating expenses | 4,470,811 | ||||
Net Investment Income | 5,672,026 |
47
Statement of operations
Delaware Wealth Builder Fund
Net Realized and Unrealized Gain (Loss): | ||||||
Net realized gain (loss) on: | ||||||
Investments | $ | 45,854,226 | ||||
Foreign currencies | (12,467 | ) | ||||
Foreign currency exchange contracts | 89,923 | |||||
Futures contracts | 29,210 | |||||
Swap contracts | 2,217 | |||||
Net realized gain | 45,963,109 | |||||
Net change in unrealized appreciation (depreciation) of: | ||||||
Investments1 | 11,724,616 | |||||
Foreign currencies | (18,488 | ) | ||||
Foreign currency exchange contracts | 2,671 | |||||
Futures contracts | (15,686 | ) | ||||
Swap contracts | 21,458 | |||||
Net change in unrealized appreciation (depreciation) | 11,714,571 | |||||
Net Realized and Unrealized Gain | 57,677,680 | |||||
Net Increase in Net Assets Resulting from Operations | $ | 63,349,706 |
1 | Includes $(439) capital gains tax accrued. |
48
Statements of changes in net assets
Delaware Wealth Builder Fund
Year ended | ||||||||||
11/30/21 | 11/30/20 | |||||||||
Increase (Decrease) in Net Assets from Operations: | ||||||||||
Net investment income | $ | 5,672,026 | $ | 7,910,492 | ||||||
Net realized gain (loss) | 45,963,109 | (20,984,506 | ) | |||||||
Net change in unrealized appreciation (depreciation) | 11,714,571 | 8,707,335 | ||||||||
Net increase (decrease) in net assets resulting from | ||||||||||
operations | 63,349,706 | (4,366,679 | ) | |||||||
Dividends and Distributions to Shareholders from: | ||||||||||
Distributable earnings: | ||||||||||
Class A | (4,472,643 | ) | (8,240,009 | ) | ||||||
Class C | (413,930 | ) | (2,241,972 | ) | ||||||
Class R | (17,848 | ) | (38,520 | ) | ||||||
Institutional Class | (2,376,293 | ) | (5,073,888 | ) | ||||||
(7,280,714 | ) | (15,594,389 | ) | |||||||
Capital Share Transactions: | ||||||||||
Proceeds from shares sold: | ||||||||||
Class A | 29,284,365 | 26,340,207 | ||||||||
Class C | 2,871,756 | 2,983,512 | ||||||||
Class R | 609,847 | 237,780 | ||||||||
Institutional Class | 9,949,959 | 18,294,356 | ||||||||
Net asset value of shares issued upon reinvestment of | ||||||||||
dividends and distributions: | ||||||||||
Class A | 4,196,391 | 7,785,843 | ||||||||
Class C | 409,216 | 2,119,949 | ||||||||
Class R | 17,590 | 38,519 | ||||||||
Institutional Class | 2,154,866 | 4,609,859 | ||||||||
49,493,990 | 62,410,025 |
49
Statements of changes in net assets
Delaware Wealth Builder Fund
Year ended | ||||||||||
11/30/21 | 11/30/20 | |||||||||
Capital Share Transactions (continued): | ||||||||||
Cost of shares redeemed: | ||||||||||
Class A | $ | (38,302,279 | ) | $ | (55,627,830 | ) | ||||
Class C | (30,379,895 | ) | (43,414,656 | ) | ||||||
Class R | (651,199 | ) | (430,547 | ) | ||||||
Institutional Class | (28,184,418 | ) | (54,660,568 | ) | ||||||
(97,517,791 | ) | (154,133,601 | ) | |||||||
Decrease in net assets derived from capital share | ||||||||||
transactions | (48,023,801 | ) | (91,723,576 | ) | ||||||
Net Increase (Decrease) in Net Assets | 8,045,191 | (111,684,644 | ) | |||||||
Net Assets: | ||||||||||
Beginning of year | 400,083,613 | 511,768,257 | ||||||||
End of year | $ | 408,128,804 | $ | 400,083,613 |
See accompanying notes, which are an integral part of the financial statements.
50
Financial highlights
Delaware Wealth Builder 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 assets5, 6 |
Ratio of expenses to average net assets prior to fees waived5 |
Ratio of net investment income to average net assets7 |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
1 | Calculated using average shares outstanding. |
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 | General Motors term loan litigation were included in total return. If excluded, the impact on the total return would be 0.11% lower. |
5 | Expense ratios do not include expenses of the Underlying Funds in which the Fund invests. |
6 | The ratios of expenses to average net assets excluding interest expense and dividend expense for the years ended November 30, 2018, and 2017 were 1.09%, and 1.09%, respectively. |
7 | The ratios of net investment income to average net assets excluding interest expense and dividend expense for the years ended November 30, 2018, and 2017 were 2.40%, and 2.51%, respectively. |
See accompanying notes, which are an integral part of the financial statements.
52
Year ended | ||||||||||||||||||||
11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | ||||||||||||||||
$ | 13.71 | $ | 14.01 | $ | 14.15 | $ | 14.62 | $ | 13.64 | |||||||||||
0.21 | 0.25 | 0.53 | 0.35 | 0.36 | ||||||||||||||||
2.06 | (0.09 | ) | 0.50 | (0.43 | ) | 0.98 | ||||||||||||||
2.27 | 0.16 | 1.03 | (0.08 | ) | 1.34 | |||||||||||||||
(0.27 | ) | (0.27 | ) | (0.35 | ) | (0.34 | ) | (0.36 | ) | |||||||||||
— | (0.19 | ) | (0.82 | ) | (0.05 | ) | — | |||||||||||||
(0.27 | ) | (0.46 | ) | (1.17 | ) | (0.39 | ) | (0.36 | ) | |||||||||||
$ | 15.71 | $ | 13.71 | $ | 14.01 | $ | 14.15 | $ | 14.62 | |||||||||||
16.63% | 3 | 1.30% | 3 | 8.30% | 4 | (0.56% | ) | 9.90% | ||||||||||||
$ | 259,143 | $ | 230,168 | $ | 259,283 | $ | 273,384 | $ | 256,157 | |||||||||||
1.08% | 1.09% | 1.09% | 1.09% | 1.09% | ||||||||||||||||
1.11% | 1.12% | 1.09% | 1.09% | 1.09% | ||||||||||||||||
1.37% | 1.91% | 3.91% | 2.41% | 2.51% | ||||||||||||||||
1.34% | 1.88% | 3.91% | 2.41% | 2.51% | ||||||||||||||||
89% | 68% | 91% | 57% | 81% |
53
Financial highlights
Delaware Wealth Builder 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 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 assets5, 6 |
Ratio of expenses to average net assets prior to fees waived5 |
Ratio of net investment income to average net assets7 |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
1 | Calculated using average shares outstanding. |
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 | General Motors term loan litigation were included in total return. If excluded, the impact on the total return would be 0.11% lower. |
5 | Expense ratios do not include expenses of the Underlying Funds in which the Fund invests. |
6 | The ratios of expenses to average net assets excluding interest expense and dividend expense for the years ended November 30, 2018, and 2017 were 1.84%, and 1.84%, respectively. |
7 | The ratios of net investment income to average net assets excluding interest expense and dividend expense for the years ended November 30, 2018, and 2017 were 1.65%, and 1.76%, respectively. |
See accompanying notes, which are an integral part of the financial statements.
54
Year ended | ||||||||||||||||||||
11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | ||||||||||||||||
$ | 13.73 | $ | 14.04 | $ | 14.18 | $ | 14.65 | $ | 13.66 | |||||||||||
0.09 | 0.15 | 0.43 | 0.24 | 0.25 | ||||||||||||||||
2.08 | (0.10 | ) | 0.49 | (0.43 | ) | 0.99 | ||||||||||||||
2.17 | 0.05 | 0.92 | (0.19 | ) | 1.24 | |||||||||||||||
(0.15 | ) | (0.17 | ) | (0.24 | ) | (0.23 | ) | (0.25 | ) | |||||||||||
— | (0.19 | ) | (0.82 | ) | (0.05 | ) | — | |||||||||||||
(0.15 | ) | (0.36 | ) | (1.06 | ) | (0.28 | ) | (0.25 | ) | |||||||||||
$ | 15.75 | $ | 13.73 | $ | 14.04 | $ | 14.18 | $ | 14.65 | |||||||||||
15.84% | 3 | 0.47% | 3 | 7.46% | 4 | (1.34% | ) | 9.13% | ||||||||||||
$ | 31,157 | $ | 52,258 | $ | 95,672 | $ | 137,403 | $ | 225,604 | |||||||||||
1.83% | 1.84% | 1.84% | 1.84% | 1.84% | ||||||||||||||||
1.86% | 1.87% | 1.84% | 1.84% | 1.84% | ||||||||||||||||
0.62% | 1.16% | 3.17% | 1.66% | 1.76% | ||||||||||||||||
0.59% | 1.13% | 3.17% | 1.66% | 1.76% | ||||||||||||||||
89% | 68% | 91% | 57% | 81% |
55
Financial highlights
Delaware Wealth Builder 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 assets5, 6 |
Ratio of expenses to average net assets prior to fees waived5 |
Ratio of net investment income to average net assets7 |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
1 | Calculated using average shares outstanding. |
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 | General Motors term loan litigation were included in total return. If excluded, the impact on the total return would be 0.11% lower. |
5 | Expense ratios do not include expenses of the Underlying Funds in which the Fund invests. |
6 | The ratios of expenses to average net assets excluding interest expense and dividend expense for the years ended November 30, 2018, and 2017 were 1.34%, and 1.34%, respectively. |
7 | The ratios of net investment income to average net assets excluding interest expense and dividend expense for the years ended November 30, 2018, and 2017 were 2.15%, and 2.26%, respectively. |
See accompanying notes, which are an integral part of the financial statements.
56
Year ended | ||||||||||||||||||||
11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | ||||||||||||||||
$ | 13.71 | $ | 14.02 | $ | 14.16 | $ | 14.62 | $ | 13.63 | |||||||||||
0.17 | 0.21 | 0.49 | 0.31 | 0.32 | ||||||||||||||||
2.06 | (0.09 | ) | 0.50 | (0.42 | ) | 0.99 | ||||||||||||||
2.23 | 0.12 | 0.99 | (0.11 | ) | 1.31 | |||||||||||||||
(0.23 | ) | (0.24 | ) | (0.31 | ) | (0.30 | ) | (0.32 | ) | |||||||||||
— | (0.19 | ) | (0.82 | ) | (0.05 | ) | — | |||||||||||||
(0.23 | ) | (0.43 | ) | (1.13 | ) | (0.35 | ) | (0.32 | ) | |||||||||||
$ | 15.71 | $ | 13.71 | $ | 14.02 | $ | 14.16 | $ | 14.62 | |||||||||||
16.32% | 3 | 0.99% | 3 | 8.02% | 4 | (0.78% | ) | 9.70% | ||||||||||||
$ | 1,203 | $ | 1,069 | $ | 1,288 | $ | 1,968 | $ | 2,320 | |||||||||||
1.33% | 1.34% | 1.34% | 1.34% | 1.34% | ||||||||||||||||
1.36% | 1.37% | 1.34% | 1.34% | 1.34% | ||||||||||||||||
1.12% | 1.66% | 3.66% | 2.16% | 2.26% | ||||||||||||||||
1.09% | 1.63% | 3.66% | 2.16% | 2.26% | ||||||||||||||||
89% | 68% | 91% | 57% | 81% |
57
Financial highlights
Delaware Wealth Builder 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 assets5, 6 |
Ratio of expenses to average net assets prior to fees waived5 |
Ratio of net investment income to average net assets7 |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
1 | Calculated using average shares outstanding. |
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 | General Motors term loan litigation were included in total return. If excluded, the impact on the total return would be 0.11% lower. |
5 | Expense ratios do not include expenses of the Underlying Funds in which the Fund invests. |
6 | The ratios of expenses to average net assets excluding interest expense and dividend expense for the years ended November 30, 2018, and 2017 were 0.84%, and 0.84%, respectively. |
7 | The ratios of net investment income to average net assets excluding interest expense and dividend expense for the years ended November 30, 2018, and 2017 were 2.65%, and 2.76%, respectively. |
See accompanying notes, which are an integral part of the financial statements.
58
Year ended | ||||||||||||||||||||
11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | ||||||||||||||||
$ | 13.70 | $ | 14.01 | $ | 14.15 | $ | 14.63 | $ | 13.64 | |||||||||||
0.25 | 0.28 | 0.56 | 0.38 | 0.39 | ||||||||||||||||
2.05 | (0.10 | ) | 0.50 | (0.43 | ) | 0.99 | ||||||||||||||
2.30 | 0.18 | 1.06 | (0.05 | ) | 1.38 | |||||||||||||||
(0.30 | ) | (0.30 | ) | (0.38 | ) | (0.38 | ) | (0.39 | ) | |||||||||||
— | (0.19 | ) | (0.82 | ) | (0.05 | ) | — | |||||||||||||
(0.30 | ) | (0.49 | ) | (1.20 | ) | (0.43 | ) | (0.39 | ) | |||||||||||
$ | 15.70 | $ | 13.70 | $ | 14.01 | $ | 14.15 | $ | 14.63 | |||||||||||
16.93% | 3 | 1.50% | 3 | 8.59% | 4 | (0.37% | ) | 10.24% | ||||||||||||
$ | 116,626 | $ | 116,589 | $ | 155,525 | $ | 185,720 | $ | 201,285 | |||||||||||
0.83% | 0.84% | 0.84% | 0.84% | 0.84% | ||||||||||||||||
0.86% | 0.87% | 0.84% | 0.84% | 0.84% | ||||||||||||||||
1.62% | 2.16% | 4.16% | 2.66% | 2.76% | ||||||||||||||||
1.59% | 2.13% | 4.16% | 2.66% | 2.76% | ||||||||||||||||
89% | 68% | 91% | 57% | 81% |
59
Notes to financial statements | |
Delaware Wealth Builder Fund | November 30, 2021 |
Delaware Group® Equity Funds V (Trust) is organized as a Delaware statutory trust and offers three series: Delaware Wealth Builder Fund, Delaware Small Cap Core Fund, and Delaware Small Cap Value Fund. These financial statements and the related notes pertain to Delaware Wealth Builder 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%. 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 these 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. Other debt securities and credit default 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
60
underlying reference instruments. Foreign currency exchange contracts are valued at the mean between the bid and ask prices, which approximates fair value. Interpolated values 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. 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 November 30, 2021 and for all open tax years (years ended November 30, 2018–November 30, 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 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 November 30, 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
61
Notes to financial statements
Delaware Wealth Builder 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 gain (loss) 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, which are estimated. Distributions received from investments in master limited partnerships are recorded as return of capital on investments. Foreign dividends are also recorded on
62
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 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 declares and pays dividends from net investment income monthly 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 November 30, 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 November 30, 2021, the Fund earned $240 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, if any, 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 0.83% of the Fund’s average daily net assets from March 27, 2020 through November 30, 2021.* For purposes of these waivers and reimbursements, nonroutine expenses may also include such additional costs and expenses as may be agreed upon from time to time by the Board and DMC. These expense waivers and reimbursements apply to expenses paid directly to the Fund and may only be terminated by agreement of DMC and the Fund. The waivers and reimbursements are accrued daily and received monthly.
DMC may seek investment advice and recommendations from its affiliates: Macquarie Investment Management Europe Limited, Macquarie Investment Management Austria Kapitalanlage AG, and Macquarie Investment Management Global Limited (MIMGL) (together, the “Affiliated Sub-Advisors”). The Manager may also permit these Affiliated Sub-Advisors to execute Fund security trades on behalf of the Manager and exercise investment discretion for securities in certain markets where DMC believes it will be beneficial to utilize an Affiliated Sub-Advisor’s specialized market knowledge. DMC may permit
63
Notes to financial statements
Delaware Wealth Builder Fund
2. Investment Management, Administration Agreements, and Other Transactions with Affiliates (continued)
its affiliate, Macquarie Funds Management Hong Kong Limited, to execute Fund security trades on behalf of the Manager. DMC may also seek quantitative support from MIMGL. Although the Affiliated Sub-Advisors and Macquarie Funds Management Hong Kong Limited serve as sub-advisors, DMC has ultimate responsibility for all investment advisory services. For these services, DMC, not the Fund, pays 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 November 30, 2021, the Fund was charged $19,683 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 November 30, 2021, the Fund was charged $33,638 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 0.25%, 1.00%, and 0.50% of the average daily net assets of the Class A, Class C, and Class R shares, respectively. The fees are calculated daily and paid monthly. Institutional Class shares do not pay 12b-1 fees.
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 November 30, 2021, the Fund was charged $23,070 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.”
64
For the year ended November 30, 2021, DDLP earned $13,562 for commissions on sales of the Fund’s Class A shares. For the year ended November 30, 2021, DDLP received gross CDSC commissions of $67 and $1,372 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 March 27, 2021 through March 31, 2022. |
3. Investments
For the year ended November 30, 2021, the Fund made purchases and sales of investment securities other than short-term investments as follows:
Purchases other than US government securities | $ | 249,159,364 | |
Purchases of US government securities | 102,811,292 | ||
Sales other than US government securities | 323,621,990 | ||
Sales of US government securities | 90,201,513 |
The tax cost of investments and derivatives 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 November 30, 2021, the cost and unrealized appreciation (depreciation) of investments and derivatives for federal income tax purposes were as follows:
Cost of investments and derivatives | $ | 367,754,154 | ||
Aggregate unrealized appreciation of investments and derivatives | $ | 53,591,468 | ||
Aggregate unrealized depreciation of investments and derivatives | (14,067,120 | ) | ||
Net unrealized appreciation of investments and derivatives | $ | 39,524,348 |
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
65
Notes to financial statements
Delaware Wealth Builder Fund
3. Investments (continued)
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 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 November 30, 2021:
Level 1 | Level 2 | Level 3 | Total | ||||||||||
Securities | |||||||||||||
Assets: | |||||||||||||
Agency Mortgage-Backed Securities | $ | — | $ | 10,067,652 | $ | — | $ | 10,067,652 | |||||
Collateralized Debt Obligations | — | 800,363 | — | 800,363 | |||||||||
Common Stock | |||||||||||||
Communication Services | 13,576,871 | 1,671,281 | — | 1 | 15,248,152 | ||||||||
Consumer Discretionary | 30,373,026 | 5,375,663 | — | 35,748,689 | |||||||||
Consumer Staples | 9,055,509 | 11,228,309 | — | 20,283,818 | |||||||||
Energy | 10,189,059 | — | — | 10,189,059 |
66
Level 1 | Level 2 | Level 3 | Total | |||||||||
Financials | $ | 26,642,913 | $ | — | $ | —1 | $ | 26,642,913 | ||||
Healthcare | 28,875,955 | 5,949,448 | — | 34,825,403 | ||||||||
Industrials | 10,710,487 | 1,857,692 | — | 12,568,179 | ||||||||
Information Technology | 54,797,899 | 2,713,721 | — | 57,511,620 | ||||||||
Materials | 3,176,892 | 1,563,900 | — | 4,740,792 | ||||||||
REIT Diversified | 1,716,439 | — | — | 1,716,439 | ||||||||
REIT Healthcare | 1,845,193 | — | — | 1,845,193 | ||||||||
REIT Hotel | 270,751 | — | — | 270,751 | ||||||||
REIT Industrial | 1,920,018 | — | — | 1,920,018 | ||||||||
REIT Information Technology | 1,396,048 | — | — | 1,396,048 | ||||||||
REIT Mall | 370,637 | — | — | 370,637 | ||||||||
REIT Manufactured Housing | 462,018 | — | — | 462,018 | ||||||||
REIT Mortgage | 1,413,278 | — | — | 1,413,278 | ||||||||
REIT Multifamily | 4,117,306 | — | — | 4,117,306 | ||||||||
REIT Office | 497,218 | — | — | 497,218 | ||||||||
REIT Self-Storage | 1,435,998 | — | — | 1,435,998 | ||||||||
REIT Shopping Center | 1,125,761 | — | — | 1,125,761 | ||||||||
REIT Single Tenant | 975,537 | — | — | 975,537 | ||||||||
REIT Specialty | 1,515,367 | — | — | 1,515,367 | ||||||||
Utilities | 4,776,250 | — | — | 4,776,250 | ||||||||
Convertible Bonds | — | 25,676,240 | — | 25,676,240 | ||||||||
Convertible Preferred Stock | 6,535,143 | — | — | 6,535,143 | ||||||||
Corporate Bonds | — | 47,684,105 | — | 47,684,105 | ||||||||
Exchange-Traded Funds | 18,409,403 | — | — | 18,409,403 | ||||||||
Leveraged Non-Recourse Security | — | — | 1,300 | 1,300 | ||||||||
Limited Partnerships | — | — | 12,055,225 | 12,055,225 | ||||||||
Non-Agency Asset-Backed Securities | — | 641,467 | — | 641,467 | ||||||||
Non-Agency Collateralized Mortgage | ||||||||||||
Obligations | — | 147,269 | — | 147,269 | ||||||||
Non-Agency Commercial | ||||||||||||
Mortgage-Backed Securities | — | 4,087,048 | — | 4,087,048 | ||||||||
Preferred Stock | — | — | —1 | — | ||||||||
Sovereign Bonds | — | 7,573,148 | — | 7,573,148 | ||||||||
Supranational Bank | — | 1,142,053 | — | 1,142,053 | ||||||||
US Treasury Obligations | — | 10,642,196 | — | 10,642,196 | ||||||||
Short-Term Investments | 20,244,648 | — | — | 20,244,648 | ||||||||
Total Value of Securities | $ | 256,425,624 | $ | 138,821,555 | $ | 12,056,525 | $ | 407,303,704 | ||||
Derivatives2 | ||||||||||||
Assets: | ||||||||||||
Foreign Currency Exchange Contracts | $ | — | $ | 749 | $ | — | $ | 749 |
67
Notes to financial statements
Delaware Wealth Builder Fund
3. Investments (continued)
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Futures Contracts | $ | 6,491 | $ | — | $ | — | $ | 6,491 | |||||||
Swap Contracts | — | 4,246 | — | 4,246 | |||||||||||
Liabilities: | |||||||||||||||
Foreign Currency Exchange Contracts | $ | — | $ | (12,744 | ) | $ | — | $ | (12,744 | ) | |||||
Futures Contracts | (23,944 | ) | — | — | (23,944 | ) |
1 | The security that has been valued at zero on the Schedule of investments is considered to be Level 3 investments in this table. |
2 | Foreign currency exchange contracts, futures contracts and swap contracts are valued at the unrealized appreciation (depreciation) on the instrument at the year end. |
During the year ended November 30, 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 or end of the year in relation to the Fund’s net assets.
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value for the Fund:
Leveraged | |||||||||||
Limited | Non-Recourse | ||||||||||
Partnerships | Security | Total | |||||||||
Beginning balance November 30, 2020 | $ | 8,490,822 | $ | 1,300 | $ | 8,492,122 | |||||
Net change in unrealized appreciation | |||||||||||
(depreciation) | 3,564,403 | — | 3,564,403 | ||||||||
Ending balance November 30, 2021 | $ | 12,055,225 | $ | 1,300 | $ | 12,056,525 | |||||
Net change in unrealized appreciation from | |||||||||||
investments still held at the end of the | |||||||||||
year | $ | 3,564,403 | $ | — | $ | 3,564,403 |
When market quotations are not readily available for one or more portfolio securities, the Fund’s NAV shall be calculated by using the “fair value” of the securities as determined by the Pricing Committee. Such “fair value” is the amount that the Fund might reasonably expect to receive for the security (or asset) upon its current sale. Each such determination should be based on a consideration of all relevant factors, which are likely to vary from one pricing context to another. Examples of such factors may include, but are not limited to: (i) the type of security, (ii) the size of the holding, (iii) the initial cost of the security, (iv) the existence of any contractual restrictions of the security’s disposition, (v) the price and extent of public trading in similar securities of the issuer or of comparable companies, (vi) quotations or evaluated prices from broker/dealers and/or pricing services, (vii) information obtained from the issuer, analysts, and/or appropriate stock exchange (for exchange-traded securities), (viii) an analysis of the
68
company’s financial statements, and (ix) an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
The Pricing Committee, or its delegate, employs various methods for calibrating these valuation approaches, including due diligence of the Fund’s pricing vendors and periodic back-testing of the prices that are fair valued under these procedures and reviews of any market related activity. The pricing of all securities fair valued by the Pricing Committee is subsequently reported to and approved by the Board on a quarterly basis.
Quantitative information about Level 3 fair value measurements for the Fund are as follows:
Assets | Value | Valuation Techniques | Unobservable Input | Input Value | ||||
Market cap | ||||||||
rate method | ||||||||
(using trailing | ||||||||
12 month | ||||||||
net operating | ||||||||
income adjusted | ||||||||
Limited | for assets | |||||||
Partnership | $12,055,225 | and liabilities) | Liquidity Discount | 5% | ||||
Cap Rate | 5.55-6.72% |
Level 3 securities with a total value of $1,300 have been valued using third party pricing information without adjustment and are excluded from the table above.
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 November 30, 2021 and 2020 were as follows:
Year ended | ||||||
11/30/21 | 11/30/20 | |||||
Ordinary income | $ | 7,280,714 | $ | 12,949,815 | ||
Long-term capital gains | — | 2,644,574 | ||||
Total | $ | 7,280,714 | $ | 15,594,389 |
69
Notes to financial statements
Delaware Wealth Builder Fund
5. Components of Net Assets on a Tax Basis
As of November 30, 2021, the components of net assets on a tax basis were as follows:
Shares of beneficial interest | $ | 346,478,330 | |
Undistributed ordinary income | 12,581,337 | ||
Undistributed long-term capital gains | 9,544,789 | ||
Unrealized appreciation (depreciation) of investments and foreign currencies | 39,524,348 | ||
Net assets | $ | 408,128,804 |
The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales, mark-to-market on forward currency contracts, tax treatment of contingent payment on debt instruments, partnership income, trust preferred securities, market discount and premium on debt instruments, mark-to-market on futures and CDS contracts, tax deferral on straddle losses, and deemed dividend income.
For financial reporting purposes, capital accounts are adjusted to reflect the tax character of permanent book/tax differences. Reclassifications are primarily due to partnership non-deductible expenses. Results of operations and net assets were not affected by these reclassifications. For the year ended November 30, 2021, the Fund recorded the following reclassifications:
Paid-in capital | $ | (559 | ) | |
Total distributable earnings (loss) | 559 |
For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. At November 30, 2021, the Fund utilized $22,741,912 capital loss carryforwards.
70
6. Capital Shares
Transactions in capital shares were as follows:
Year ended | ||||||
11/30/21 | 11/30/20 | |||||
Shares sold: | ||||||
Class A | 1,972,064 | 2,060,385 | ||||
Class C | 197,150 | 224,529 | ||||
Class R | 42,855 | 18,351 | ||||
Institutional Class | 657,585 | 1,423,139 | ||||
Shares issued upon reinvestment of dividends and distributions: | ||||||
Class A | 279,703 | 589,479 | ||||
Class C | 27,700 | 158,249 | ||||
Class R | 1,176 | 2,912 | ||||
Institutional Class | 143,787 | 349,100 | ||||
3,322,020 | 4,826,144 | |||||
Shares redeemed: | ||||||
Class A | (2,548,144 | ) | (4,358,810 | ) | ||
Class C | (2,051,021 | ) | (3,391,081 | ) | ||
Class R | (45,431 | ) | (35,182 | ) | ||
Institutional Class | (1,884,801 | ) | (4,363,203 | ) | ||
(6,529,397 | ) | (12,148,276 | ) | |||
Net decrease | (3,207,377 | ) | (7,322,132 | ) |
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 November 30, 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 | |||||||||||
11/30/21 | 35,739 | 64,787 | 63,964 | 36,699 | $ | 1,516,358 | |||||
11/30/20 | 18,524 | 65,286 | 58,583 | 25,347 | 1,068,685 |
7. Line of Credit
The Fund, along with certain other funds in the Delaware Funds (Participants), is a participant in a $225,000,000 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. Under the Agreement, the Participants are charged an annual commitment fee of 0.15% with the addition of an
71
Notes to financial statements
Delaware Wealth Builder Fund
7. Line of Credit (continued)
upfront fee of 0.05%, which is allocated across the Participants based on a weighted average of the respective net assets of each Participant. The Participants are permitted to borrow up to a maximum of one-third of their net assets under the Agreement. Each Participant is 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 1, 2021.
On November 1, 2021, the Fund, along with the other Participants, entered into an amendment to the agreement for a $355,000,000 revolving line of credit to be used as described above and operates in substantially the same manner as the original Agreement. Under the amendment to the agreement, the Participants are charged an annual commitment fee of 0.15%, with the addition of an upfront fee of 0.05%, which is allocated across the Participants based on a weighted average of the respective net assets of each Participant. The line of credit available under the agreement expires on October 31, 2022.
The Fund had no amounts outstanding as of November 30, 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.
72
During the year ended November 30, 2021, the Fund entered into foreign currency exchange contracts to fix the US dollar value of a security between trade date and settlement date, and to hedge the US dollar value of securities it already owns that are denominated in foreign currencies to increase/decrease exposure to foreign currencies.
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 contracts 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 November 30, 2021, the Fund posted $19,955 in cash as collateral for open futures contracts, which is included in “Cash collateral due from brokers” on the “Statement of assets and liabilities.”
During the year ended November 30, 2021, the Fund entered into futures contracts to hedge the Fund’s existing portfolio securities against fluctuations in value caused by changes in interest rates or market conditions and as a cash management tool.
Swap Contracts — The Fund may enter into CDS contracts in the normal course of pursuing its investment objective. 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. Swap agreements are bilaterally negotiated agreements between a Fund and counterparty to exchange or swap investment cash flows, assets, foreign currencies or market-linked returns at specified, future intervals. Swap agreements are privately negotiated in the over the counter market (OTC swaps). If the OTC swap entered is one of the swaps identified by a relevant regulator as a swap that is required to be cleared, then it will be cleared through a third party, known as a central counterparty or derivatives clearing organization (centrally cleared swaps).
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
73
Notes to financial statements
Delaware Wealth Builder Fund
8. Derivatives (continued)
agrees to pay the seller of protection a periodic amount at a stated rate that is applied to the notional 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 November 30, 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 November 30, 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 November 30, 2021, the Fund used 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 November 30, 2021, the Fund received $70,000 in cash collateral for open over-the-counter credit default swap contracts, which is included in “Cash collateral due to brokers” on the “Statement of assets and liabilities.”
74
Fair values of derivative instruments as of November 30, 2021 were as follows:
Asset Derivatives Fair Value | ||||||||||||||||||
Interest | ||||||||||||||||||
Statement of Assets and | Currency | Rate | Credit | |||||||||||||||
Liabilities Location | Contracts | Contracts | Contracts | Total | ||||||||||||||
Unrealized appreciation on foreign currency exchange | ||||||||||||||||||
contracts | $ | 749 | $ | — | $ | — | $ | 749 | ||||||||||
Variation margin due from broker on futures contracts* | — | 6,491 | — | 6,491 | ||||||||||||||
Unrealized appreciation on over the counter credit default | ||||||||||||||||||
swap contracts | — | — | 4,246 | 4,246 | ||||||||||||||
Total | $ | 749 | $ | 6,491 | $ | 4,246 | $ | 11,486 |
Liability Derivatives Fair Value | ||||||||||||
Interest | ||||||||||||
Statement of Assets and | Currency | Rate | ||||||||||
Liabilities Location | Contracts | Contracts | Total | |||||||||
Unrealized depreciation on foreign currency exchange contracts | $ | (12,744 | ) | $ | — | $ | (12,744 | ) | ||||
Variation margin due to broker on futures contracts* | — | (23,944 | ) | (23,944 | ) | |||||||
Total | $ | (12,744 | ) | $ | (23,944 | ) | $ | (36,688 | ) |
* | Includes cumulative appreciation (depreciation) of futures contracts from the date the contracts were opened through November 30, 2021. Only current day variation margin is reported on the Fund’s “Statement of assets and liabilities.” |
Net Realized Gain (Loss) on: | ||||||||||||||
Foreign | ||||||||||||||
Currency | ||||||||||||||
Exchange | Futures | Swap | ||||||||||||
Contracts | Contracts | Contracts | Total | |||||||||||
Currency contracts | $ | 89,923 | $ | — | $ | — | $ | 89,923 | ||||||
Interest rate contracts | — | 29,210 | — | 29,210 | ||||||||||
Credit contracts | — | — | 2,217 | 2,217 | ||||||||||
Total | $ | 89,923 | $ | 29,210 | $ | 2,217 | $ | 121,350 |
Net Change in Unrealized Appreciation (Depreciation) of: | ||||||||||||||||
Foreign | ||||||||||||||||
Currency | ||||||||||||||||
Exchange | Futures | Swap | ||||||||||||||
Contracts | Contracts | Contracts | Total | |||||||||||||
Currency contracts | $ | 2,671 | $ | — | $ | — | $ | 2,671 | ||||||||
Interest rate contracts | — | (15,686 | ) | — | (15,686 | ) | ||||||||||
Credit contracts | — | — | 21,458 | 21,458 | ||||||||||||
Total | $ | 2,671 | $ | (15,686 | ) | $ | 21,458 | $ | 8,443 |
75
Notes to financial statements
Delaware Wealth Builder Fund
8. Derivatives (continued)
The table below summarizes the average balance of derivative holdings by the Fund during the year ended November 30, 2021:
Long Derivative | Short Derivative | |||||||
Volume | Volume | |||||||
Foreign currency exchange contracts (average notional value) | $ | 988,718 | $ | 1,965,934 | ||||
Futures contracts (average notional value) | 527,402 | 1,527,414 | ||||||
CDS contracts (average notional value)* | 559,000 | — |
* | Long represents buying protection and short represents selling protection. |
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 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.”
76
At November 30, 2021, the Fund had the following assets and liabilities subject to offsetting provisions:
Offsetting of Financial Assets and Liabilities and Derivative Assets and Liabilities
Delaware Wealth Builder Fund
Gross Value of | Gross Value of | ||||||||||||||||
Counterparty | Derivative Asset | Derivative Liability | Net Position | ||||||||||||||
Bank of New York Mellon | $ | 737 | $ | (663 | ) | $ | 74 | ||||||||||
Citigroup | — | (147 | ) | (147 | ) | ||||||||||||
JPMorgan Chase Bank | 4,258 | (11,934 | ) | (7,676 | ) | ||||||||||||
Total | $ | 4,995 | $ | (12,744 | ) | $ | (7,749 | ) |
Fair Value of | Fair Value of | |||||||||||||||||||||||||||||||
Non-Cash | Cash Collateral | Non-Cash | Cash Collateral | Net | ||||||||||||||||||||||||||||
Counterparty | Net Position | Collateral Received | Received | Collateral Pledged | Pledged | Exposure(a) | ||||||||||||||||||||||||||
Bank of New York | ||||||||||||||||||||||||||||||||
Mellon | $ | 74 | $ | — | $ | — | $ | — | $ | — | $ | 74 | ||||||||||||||||||||
Citigroup | (147 | ) | — | — | — | — | (147 | ) | ||||||||||||||||||||||||
JPMorgan Chase | ||||||||||||||||||||||||||||||||
Bank | (7,676 | ) | — | — | — | — | (7,676 | ) | ||||||||||||||||||||||||
Total | $ | (7,749 | ) | $ | — | $ | — | $ | — | $ | — | $ | (7,749 | ) |
(a) | 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 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.
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Notes to financial statements
Delaware Wealth Builder Fund
10. Securities Lending (continued)
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; certain money market funds; and asset-backed securities. The 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 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 November 30, 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.
78
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 Fund invests will cause the NAV of the Fund 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 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 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
79
Notes to financial statements
Delaware Wealth Builder Fund
11. Credit and Market Risk (continued)
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 November 30, 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 also invests in real estate acquired as a result of ownership of securities or other instruments, including issuers that invest, deal, or otherwise engage in transactions in real estate or interests therein. These instruments may include interests in private equity limited partnerships or limited liability companies that hold real estate investments (Real Estate Limited Partnerships). The Fund will limit its investments in Real Estate Limited Partnerships to 5% of its total assets at the time of purchase. The unfunded commitment for the limited partnerships totaled $582,748.
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 a 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. 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 a borrower. Prepayment penalty, facility, commitment, consent and amendment fees are recorded to income as earned or paid.
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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 and restricted securities held by the Fund 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 March 2020, FASB issued an Accounting Standards Update (ASU), 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
Management has determined that no material events or transactions occurred subsequent to November 30, 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® Equity Funds V and Shareholders of Delaware Wealth Builder Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Delaware Wealth Builder Fund (one of the funds constituting Delaware Group® Equity Funds V, referred to hereafter as the “Fund”) as of November 30, 2021, the related statement of operations for the year ended November 30, 2021, the statements of changes in net assets for each of the two years in the period ended November 30, 2021, including the related notes, and the financial highlights for each of the five years in the period ended November 30, 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 November 30, 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 November 30, 2021 and the financial highlights for each of the five years in the period ended November 30, 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 November 30, 2021 by correspondence with the custodian, transfer agents, brokers and portfolio company investees; 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
January 21, 2022
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 Wealth Builder 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 November 30, 2021, the Fund reports distributions paid during the year as follows:
(A) Ordinary Income Distribution (Tax Basis)* | 100.00% | |
Total Distributions (Tax Basis) | 100.00% | |
(B) Qualified Dividends1 | 79.75% |
(A) | is based on a percentage of the Fund’s total distributions. |
(B) | 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 November 30, 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 income is 91.94%. Complete information will be computed and reported in conjunction with your 2021 Form 1099-DIV. |
For the fiscal year ended November 30, 2021, certain dividends paid by the Fund, determined to be 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 Creations Act of 2010; and as extended by the American Taxpayer Relief Act of 2012. For the year ended November 30, 2021, the Fund has reported maximum distributions of Qualified short-term capital gain of $11,881,093.
Board consideration of Investment Advisory and Sub-Advisory Agreements for Delaware Wealth Builder Fund at a meeting held August 10-12, 2021
At a meeting held on August 10-12, 2021 (the “Annual Meeting”), the Board of Trustees (the “Board”), including a majority of disinterested or independent Trustees, approved the renewal of the Investment Advisory and Sub-Advisory Agreements for Delaware Wealth Builder Fund (the “Fund”). In making its decision, the Board considered information furnished at regular quarterly Board meetings, including reports detailing Fund performance, investment strategies, and expenses, as well as information prepared specifically in connection with the renewal of the investment advisory and sub-advisory contracts. Information furnished specifically in connection with the renewal of the Investment Management Agreement with Delaware Management Company (“DMC”), a series of Macquarie
83
Other Fund information (Unaudited)
Delaware Wealth Builder Fund
Board consideration of Investment Advisory and Sub-Advisory Agreements for Delaware Wealth Builder Fund at a meeting held August 10-12, 2021 (continued)
Investment Management Business Trust (“MIMBT”), and the Sub-Advisory Agreements with Macquarie Funds Management Hong Kong Limited (“MFMHK”), Macquarie Investment Management Global Limited (“MIMGL”), Macquarie Investment Management Europe Limited (“MIMEL”), and Macquarie Investment Management Austria Kapitalanlage AG (“MIMAK”) (the “Sub-Advisers”), included materials provided by DMC and its affiliates (collectively, “Macquarie Asset Management”) concerning, among other things, the nature, extent, and quality of services provided to the Fund; the costs of such services to the Fund; economies of scale; and the investment manager’s financial condition and profitability. In addition, in connection with the Annual Meeting, materials were provided to the Trustees in May 2021, including reports provided by Broadridge Financial Solutions (“Broadridge”). The Broadridge reports compared the Fund’s investment performance and expenses with those of other comparable mutual funds. The Independent Trustees reviewed and discussed the Broadridge reports with independent legal counsel to the Independent Trustees. In addition to the information noted above, the Board also requested and received information regarding DMC’s policy with respect to advisory fee levels and its breakpoint philosophy; the structure of portfolio manager compensation; comparative client fee information; and any constraints or limitations on the availability of securities for certain investment styles, which had in the past year inhibited, or which were likely in the future to inhibit, the investment manager’s ability to invest fully in accordance with Fund policies.
In considering information relating to the approval of the Fund’s advisory and sub-advisory agreements, as applicable, the Independent Trustees received assistance and advice from and met separately with independent legal counsel to the Independent Trustees and also received assistance and advice from 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.
Nature, extent, and quality of services. The Board considered the services provided by DMC to the Fund and its shareholders. In reviewing the nature, extent, and quality of services, the Board considered reports furnished to it throughout the year, which covered matters such as the relative performance of the Fund; compliance of portfolio managers with the investment policies, strategies, and restrictions for the Fund; compliance by DMC and Delaware Distributors, L.P. (together, “Management”) personnel with the Code of Ethics adopted throughout the Delaware Funds by Macquarie® (“Delaware Funds”); and adherence to fair value pricing procedures as established by the Board. The Board was pleased with the current staffing of DMC and the emphasis placed on research in the investment process. The Board recognized DMC’s receipt of certain favorable industry distinctions during the past several years. The Board gave favorable consideration to DMC’s efforts to control expenses while maintaining service levels committed to Fund matters. The Board also noted the benefits provided to Fund shareholders through (a) each shareholder’s ability to: (i) exchange an investment in one Delaware Fund for the same class of shares in another Delaware Fund without a sales charge, or (ii) reinvest Fund dividends into additional shares of the Fund or into additional shares of other Delaware Funds, and (b) the privilege to combine holdings in other Delaware Funds to obtain a reduced sales charge. The Board was satisfied with the nature, extent, and quality of the overall services provided by DMC.
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Nature, extent, and quality of services. The Board considered the services provided by each 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.
Investment performance. The Board placed significant emphasis on the investment performance of 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 Fund’s investment performance in comparison to a group of similar funds (the “Performance Universe”). A fund with the best performance ranked first, and a fund with the poorest performance ranked last. The highest/best performing 25% of funds in the Performance Universe make up the first quartile; the next 25%, the second quartile; the next 25%, the third quartile; and the poorest/worst performing 25% of funds in the Performance Universe make up the fourth quartile. Comparative annualized performance for the Fund was shown for the past 1-, 3-, 5-, and 10-year periods, to the extent applicable, ended December 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 Performance Universe for the Fund consisted of the Fund and all retail and institutional flexible portfolio funds as selected by Broadridge. The Broadridge report comparison showed that the Fund’s total return for the 1-year period was in the fourth quartile of its Performance Universe. The report further showed that the Fund’s total return for the 3- and 5-year periods was in the third quartile of its Performance Universe and the Fund’s total return for the 10-year period was in the second quartile of its Performance Universe. The Board observed that the Fund’s performance results were mixed. 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 meet the Board’s performance objective.
Comparative expenses. The Board considered expense data for the Delaware Funds. Management provided the Board with information on pricing levels and fee structures for the Fund as of its most recently completed fiscal year. The Board also focused on the comparative analysis of effective management fees and total expense ratios of the Fund versus effective management fees and total expense ratios of a group of similar funds (the “Expense Group”). In reviewing comparative costs, the Fund’s contractual management fee and the actual management fee incurred by the Fund were compared with the contractual management fees (assuming all funds in the Expense Group were similar in size to the Fund) and actual management fees (as reported by each fund) within the Expense Group, taking into account any applicable breakpoints and fee waivers. The Fund’s total expenses were also
85
Other Fund information (Unaudited)
Delaware Wealth Builder Fund
Board consideration of Investment Advisory and Sub-Advisory Agreements for Delaware Wealth Builder Fund at a meeting held August 10-12, 2021 (continued)
compared with those of its Expense Group and, for comparative consistency, included 12b-1 and non-12b-1 service fees. The Board’s objective is for each Fund’s total expense ratio to be competitive with those of the peer funds within its Expense Group.
The expense comparisons for the Fund showed that its actual management fee and total expenses were in the quartile with the second highest expenses of its Expense Group. The Board noted that the Fund’s total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered fee waivers in place through March 2022 and various initiatives implemented by Management, such as the negotiation of lower fees for fund accounting, fund accounting oversight, and custody services, which had created an opportunity for a further reduction in expenses. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and to bring it in line with the Board’s objective.
Management profitability. The Board considered the level of profits realized by DMC in connection with the operation of the Fund. In this respect, the Board reviewed the Investment Management Profitability Analysis that addressed the overall profitability of DMC’s business in providing management and other services to each of the individual funds and the Delaware Funds as a whole. Specific attention was given to the methodology used by DMC in allocating costs for the purpose of determining profitability. Management stated that the level of profits of DMC, to a certain extent, reflects recent operational cost savings and efficiencies initiated by DMC. The Board considered DMC’s efforts to improve services provided to Fund shareholders and to meet additional regulatory and compliance requirements resulting from recent industry-wide Securities and Exchange Commission initiatives. The Board also considered the extent to which DMC might derive ancillary benefits from fund operations, including the potential for procuring additional business as a result of the prestige and visibility associated with its role as service provider to the Delaware Funds and the benefits from allocation of fund brokerage to improve trading efficiencies. As part of its work, the Board also reviewed a report prepared by JDL regarding MIMBT profitability as compared to certain peer fund complexes and the Independent Trustees discussed with JDL personnel regarding DMC’s profitability in such context. The Board found that the management fees were reasonable in light of the services rendered and the level of profitability of DMC.
Management profitability. Trustees were also given available information on profits being realized by each of the Sub-Advisers in relation to the services being provided to the Fund and in relation to each Sub-Adviser’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 information on potential fall-out benefits derived or to be derived by the Sub-Advisers in connection with their relationship to the Fund, such as reputational enhancement, soft dollar arrangements, or commissions paid to affiliated broker/dealers, as applicable.
Economies of scale. The Trustees considered whether economies of scale are realized by DMC as the Fund’s assets increase and the extent to which any economies of scale are reflected in the level of management fees charged. The Trustees reviewed the Fund’s advisory fee pricing and structure, approved by the Board and shareholders, which includes breakpoints, and which applies to most funds
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in the Delaware Funds complex. Breakpoints in the advisory fee occur when the advisory fee rate is reduced on assets in excess of specified levels. Breakpoints result in a lower advisory fee than would otherwise be the case in the absence of breakpoints, when the asset levels specified in the breakpoints are exceeded. The Board noted that, as of March 31, 2021, the Fund’s net assets exceeded the final breakpoint level. Although, as of March 31, 2021, the Fund had not reached a size at which it could take advantage of any breakpoints in the applicable fee schedule, the Board recognized that the fee was structured so that, if the Fund increases sufficiently in size, then economies of scale may be shared.
87
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 | 150 | 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) |
88
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 | 150 | 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 | 150 | 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 | 150 | 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) |
89
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 | |||||
Joseph W. Chow | Trustee | Since January 2013 | Private Investor | 150 | 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 |
90
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 | |||||
H. Jeffrey Dobbs3 | Trustee | Since December 2021 | Global Sector Chairman, | 150 | Director, Valparaiso University | |||||
610 Market Street | Industrial Manufacturing, | (2012–Present) | ||||||||
Philadelphia, PA | KPMG LLP | Director, TechAccel LLC | ||||||||
19106-2354 | (2010-2015) | (2015–Present)(Tech R&D) | ||||||||
May 1955 | Board Member, Kansas City | |||||||||
Repertory Theatre | ||||||||||
(2015–Present) | ||||||||||
Board Member, Patients | ||||||||||
Voices, Inc. (healthcare) | ||||||||||
(2018–Present) | ||||||||||
Kansas City Campus for Animal | ||||||||||
Care (2018–Present) | ||||||||||
Director, National Association of | ||||||||||
Manufacturers (2010–2015) | ||||||||||
Director, The Children’s Center | ||||||||||
(2003–2015) | ||||||||||
Director, Metropolitan Affairs | ||||||||||
Coalition (2003–2015) | ||||||||||
Director, Michigan Roundtable | ||||||||||
for Diversity and Inclusion | ||||||||||
(2003–2015) | ||||||||||
Trustee, Ivy Funds Complex | ||||||||||
(2019–2021) |
91
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 | |||||
John A. Fry | Trustee | Since January 2001 | Drexel University | 150 | Director; Compensation | |||||
610 Market Street | (August 2010–Present) | Committee and Governance | ||||||||
Philadelphia, PA | President — Franklin & Marshall | Committee Member — | ||||||||
19106-2354 | College | Community Health Systems | ||||||||
May 1960 | (July 2002–June 2010) | (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) |
92
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 Harroz, Jr.3 | Trustee | Since December 2021 | President (2020–Present), Interim | 150 | Director, OU Medicine, Inc. | |||||
610 Market Street | President (2019–2020), Vice | (2020–Present) | ||||||||
Philadelphia, PA | President (2010–2019) and Dean | Director and Shareholder, | ||||||||
19106-2354 | (2010–2019), College of Law, | Valliance Bank | ||||||||
January 1967 | University of Oklahoma; | (2007–Present) | ||||||||
Managing Member, Harroz | Director, Foundation Healthcare | |||||||||
Investments, LLC, (commercial | (formerly Graymark HealthCare) | |||||||||
enterprises) (1998–2019); | (2008–2017) | |||||||||
Managing Member, St. Clair, | Trustee, the Mewbourne Family | |||||||||
LLC (commercial enterprises) | Support Organization | |||||||||
(2019–Present) | (2006–Present) (non-profit) | |||||||||
Independent Director, LSQ | ||||||||||
Manager, Inc. (real estate) | ||||||||||
(2007–2016) | ||||||||||
Director, Oklahoma Foundation | ||||||||||
for Excellence (non-profit) | ||||||||||
(2008–Present) | ||||||||||
Trustee, Ivy Funds Complex | ||||||||||
(1998–2021) |
93
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 | |||||
Sandra A.J. | Trustee | Since December 2021 | Chief Administrative Officer, | 150 | Director, Hall Family Foundation | |||||
Lawrence3 | Children’s Mercy Hospitals and | (1993–Present) | ||||||||
610 Market Street | Clinics | Director, Westar Energy (utility) | ||||||||
Philadelphia, PA | (2016–2019); | (2004–2018) | ||||||||
19106-2354 | CFO, Children’s Mercy Hospitals | Trustee, Nelson-Atkins Museum | ||||||||
September 1957 | and Clinics | of Art (non-profit) (2021–Present) | ||||||||
(2005–2016) | (2007–2020) | |||||||||
Director, Turn the Page KC | ||||||||||
(non-profit) (2012–2016) | ||||||||||
Director, Kansas Metropolitan | ||||||||||
Business and Healthcare | ||||||||||
Coalition (non-profit) (2017–2019) | ||||||||||
Director, National Association of | ||||||||||
Corporate Directors (non-profit) | ||||||||||
National Board (2022–Present); | ||||||||||
Regional Board (2017–2021) | ||||||||||
Director, American Shared | ||||||||||
Hospital Services (medical | ||||||||||
device) (2017–2021) | ||||||||||
Director, Evergy, Inc., Kansas | ||||||||||
City Power & Light Company, | ||||||||||
KCP&L Greater Missouri | ||||||||||
Operations Company, Westar | ||||||||||
Energy, Inc. and Kansas Gas and | ||||||||||
Electric Company (related utility | ||||||||||
companies) (2018–Present) |
94
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 | |||||
Sandra A.J. | Trustee | Since December 2021 | Chief Administrative Officer, | 150 | Director, Stowers (research) | |||||
Lawrence3 | Children’s Mercy Hospitals and | (2018) | ||||||||
(continued) | Clinics | Co-Chair, Women Corporate | ||||||||
610 Market Street | (2016–2019); | Directors (director education) | ||||||||
Philadelphia, PA | CFO, Children’s Mercy Hospitals | (2018–2020) | ||||||||
19106-2354 | and Clinics | Trustee, Ivy Funds Complex | ||||||||
September 1957 | (2005–2016) | (2019-2021) | ||||||||
Director, Brixmor Property | ||||||||||
Group Inc. | ||||||||||
(2021–Present) | ||||||||||
Director, Sera Prognostics Inc. | ||||||||||
(biotechnology) | ||||||||||
(2021–Present) | ||||||||||
Director, Recology (resource | ||||||||||
recovery) | ||||||||||
(2021–Present) |
95
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 | 150 | 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; Audit | ||||||||
January 1956 | Executive Advisor to Dean | and Compensation | ||||||||
(August 2011–March 2012) and | Committee Member — | |||||||||
Interim Dean | Callon Petroleum Company | |||||||||
(January 2011–July 2011) — | (December 2019–Present) | |||||||||
University of Miami School of | Director — New Senior | |||||||||
Business Administration | Investment Group Inc. | |||||||||
President — U.S. Trust, Bank of | (January 2021–September 2021) | |||||||||
America Private Wealth | Director; Audit Committee | |||||||||
Management (Private Banking) | Member — Carrizo Oil & Gas, | |||||||||
(July 2007-December 2008) | Inc. (March 2018–December | |||||||||
2019) |
96
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 — PNC Financial | 150 | Director — HSBC North America | |||||
610 Market Street | Services Group | Holdings Inc. | ||||||||
Philadelphia, PA | (2010–April 2013) | (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) |
97
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 | 150 | 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–October 2021), | ||||||||||
The Merger Fund VL | ||||||||||
(2013–October 2021); WCM | ||||||||||
Alternatives: Event-Driven Fund | ||||||||||
(2013–October 2021), and WCM | ||||||||||
Alternatives: Credit Event Fund | ||||||||||
(December 2017–October 2021) | ||||||||||
Director; Chair of Governance | ||||||||||
Committee and Audit Committee | ||||||||||
Member — International | ||||||||||
Securities Exchange (2010–2016) |
98
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 | 150 | 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 | 150 | None4 | |||||
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 | 150 | None4 | |||||
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 |
99
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 | 150 | 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 | Messrs. Dobbs and Harroz and Ms. Lawrence were elected as Trustees of the Trust effective December 17, 2021. |
4 | David F. Connor serves as Senior Vice President and Secretary, and Daniel V. Geatens serves as Senior Vice President, Treasurer, and Chief Financial Officer, 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 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.
100
Board of trustees | |||
Shawn K. Lytle President and Chief Executive Officer Delaware Funds by Macquarie® Philadelphia, PA Jerome D. Abernathy Managing Member, Stonebrook Capital Management, LLC Jersey City, NJ Thomas L. Bennett Chairman of the Board Delaware Funds by Macquarie Private Investor Rosemont, PA | Ann D. Borowiec Former Chief Executive Officer Private Wealth Management J.P. Morgan Chase & Co. New York, NY Joseph W. Chow Former Executive Vice President State Street Corporation Boston, MA H. Jeffrey Dobbs Former Global Sector Chairman Industrial Manufacturing, KPMG, LLP Detroit, MI | John A. Fry President Drexel University Philadelphia, PA Joseph Harroz, Jr. President University of Oklahoma Norman, OK Sandra A.J. Lawrence Former Chief Administrative Officer Children’s Mercy Hospitals and Clinics Kansas City, MO | Frances A. Sevilla-Sacasa Former Chief Executive Officer Banco Itaú International Miami, FL Thomas K. Whitford Former Vice Chairman PNC Financial Services Group Pittsburgh, PA Christianna Wood Chief Executive Officer and President Gore Creek Capital, Ltd. Golden, CO Janet L. Yeomans Former Vice President and Treasurer 3M Company St. Paul, MN |
Affiliated officers | |||
David F. Connor Senior Vice President, General Counsel, and Secretary Delaware Funds by Macquarie Philadelphia, PA | Daniel V. Geatens Senior Vice President and Treasurer Delaware Funds by Macquarie Philadelphia, PA | Richard Salus Senior Vice President and Chief Financial Officer Delaware Funds by Macquarie Philadelphia, PA |
This annual report is for the information of Delaware Wealth Builder 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.
101
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:
John A. Fry
Thomas K. Whitford, Chair
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 $91,494 for the fiscal year ended November 30, 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 $101,660 for the fiscal year ended November 30, 2020.
(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 November 30, 2021.
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 $1,134,001 for the registrant’s fiscal year ended November 30, 2021. 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 November 30, 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 November 30, 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.
(c) Tax fees.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant were $15,579 for the fiscal year ended November 30, 2021. 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 November 30, 2021.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant were $17,310 for the fiscal year ended November 30, 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 November 30, 2020.
(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 November 30, 2021.
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 November 30, 2021. 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 November 30, 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 November 30, 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%.
(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 $50,000 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 $9,044,000 and $8,455,000 for the registrant’s fiscal years ended November 30, 2021 and November 30, 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 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 officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing of this report, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the Investment Company Act of 1940 (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d15( b)) and provide 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 (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 (17 CFR 270.30a-3(d)) 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.
(3) Written solicitations to purchase securities pursuant to Rule 23c-1 under the Securities Exchange Act of 1934.
Not applicable.
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.
DELAWARE GROUP® EQUITY FUNDS V
/s/SHAWN K. LYTLE | |
By: | Shawn K. Lytle |
Title: | President and Chief Executive Officer |
Date: | February 7, 2022 |
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: | February 7, 2022 |
/s/RICHARD SALUS | |
By: | Richard Salus |
Title: | Chief Financial Officer |
Date: | February 7, 2022 |