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: | May 31, 2022 |
Item 1. Reports to Stockholders
![]() | ![]() | |
Semiannual report |
Multi-asset mutual fund
Delaware Wealth Builder Fund
May 31, 2022
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 Asset Management (MAM) is a global asset manager that aims to deliver positive impact for everyone. MAM Public Investments traces its roots to 1929 and partners with institutional and individual clients to deliver specialist active investment capabilities across global equities, fixed income, and multi-asset solutions using a conviction-based, long-term approach to investing. In the US, retail investors recognize our Delaware Funds by Macquarie family of funds as one of the oldest mutual fund families.
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.
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Macquarie Asset Management (MAM) is the asset management division of Macquarie Group. MAM is a full-service asset manager offering a diverse range of products across public and private markets including fixed income, equities, multi-asset solutions, private credit, infrastructure, renewables, natural assets, real estate, and asset finance. The Public Investments business is a part of MAM and includes the following investment advisers: Macquarie Investment Management Business Trust (MIMBT), Macquarie Funds Management Hong Kong Limited, Macquarie Investment Management Austria Kapitalanlage AG, Macquarie Investment Management Global Limited, Macquarie Investment Management Europe Limited, and Macquarie Investment Management Europe S.A.
The Fund is distributed by Delaware Distributors, L.P. (DDLP), an affiliate of MIMBT and Macquarie Group Limited.
Other than Macquarie Bank Limited ABN 46 008 583 542 ("Macquarie Bank"), any Macquarie Group entity noted in this document is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these other Macquarie Group entities do not represent deposits or other liabilities of Macquarie Bank. Macquarie Bank does not guarantee or otherwise provide assurance in respect of the obligations of these other Macquarie Group entities. In addition, if this document relates to an investment, (a) the 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 entity 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 May 31, 2022, 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.
Disclosure of Fund expenses
For the six-month period from December 1, 2021 to May 31, 2022 (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 December 1, 2021 to May 31, 2022.
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.
1
Disclosure of Fund expenses
For the six-month period from December 1, 2021 to May 31, 2022 (Unaudited)
Delaware Wealth Builder Fund
Expense analysis of an investment of $1,000
Beginning | Ending | Expenses | ||||||||||||
Account Value | Account Value | Annualized | Paid During Period | |||||||||||
12/1/21 | 5/31/22 | Expense Ratio | 12/1/21 to 5/31/22* | |||||||||||
Actual Fund return† | ||||||||||||||
Class A | $ | 1,000.00 | $ | 991.10 | 1.08% | $ | 5.36 | |||||||
Class C | 1,000.00 | 987.30 | 1.83% | 9.07 | ||||||||||
Class R | 1,000.00 | 990.50 | 1.33% | 6.60 | ||||||||||
Institutional Class | 1,000.00 | 993.00 | 0.83% | 4.12 | ||||||||||
Hypothetical 5% return (5% return before expenses) | ||||||||||||||
Class A | $ | 1,000.00 | $ | 1,019.55 | 1.08% | $ | 5.44 | |||||||
Class C | 1,000.00 | 1,015.81 | 1.83% | 9.20 | ||||||||||
Class R | 1,000.00 | 1,018.30 | 1.33% | 6.69 | ||||||||||
Institutional Class | 1,000.00 | 1,020.79 | 0.83% | 4.18 |
*“ | Expenses Paid During Period” are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). |
† | Because actual returns reflect only the most recent six-month period, the returns shown may differ significantly from fiscal year returns. |
In addition to the Fund's expenses reflected above, the Fund also indirectly bears its portion of the fees and expenses of the investment companies (Underlying Funds) in which it invests, including exchange-traded funds. The table above does not reflect the expenses of the Underlying Funds.
2
Security type / sector allocation and top 10 equity holdings | |
Delaware Wealth Builder Fund | As of May 31, 2022 (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 | 2.72 | % | |
Collateralized Debt Obligations | 0.20 | % | |
Convertible Bonds | 6.52 | % | |
Corporate Bonds | 12.81 | % | |
Automotive | 0.25 | % | |
Banking | 1.68 | % | |
Basic Industry | 0.65 | % | |
Capital Goods | 0.43 | % | |
Communications | 0.87 | % | |
Consumer Cyclical | 0.43 | % | |
Consumer Goods | 0.12 | % | |
Consumer Non-Cyclical | 0.63 | % | |
Electric | 0.60 | % | |
Energy | 1.67 | % | |
Financials | 0.63 | % | |
Healthcare | 0.62 | % | |
Insurance | 0.52 | % | |
Leisure Time | 0.41 | % | |
Media | 0.62 | % | |
Natural Gas | 0.05 | % | |
Real Estate Investment Trusts | 0.07 | % | |
Retail | 0.31 | % | |
Services | 0.27 | % | |
Technology | 0.84 | % | |
Technology & Electronics | 0.20 | % | |
Telecommunications | 0.41 | % | |
Transportation | 0.32 | % | |
Utilities | 0.21 | % | |
Non-Agency Asset-Backed Securities | 0.22 | % | |
Non-Agency Collateralized Mortgage Obligations | 0.03 | % | |
Non-Agency Commercial Mortgage-Backed Securities | 1.27 | % | |
Sovereign Bonds | 1.46 | % | |
Supranational Banks | 0.27 | % | |
US Treasury Obligations | 8.65 | % | |
Common Stocks | 57.20 | % | |
Banking | 0.00 | % | |
Communication Services | 3.43 | % |
3
Security type / sector allocation and top 10 equity holdings
Delaware Wealth Builder Fund
Security type / sector | Percentage of net assets | ||||
Consumer Discretionary | 6.84 | % | |||
Consumer Staples | 3.89 | % | |||
Energy | 4.46 | % | |||
Financials | 6.87 | % | |||
Healthcare | 8.97 | % | |||
Industrials | 3.19 | % | |||
Information Technology | 13.10 | % | |||
Materials | 1.33 | % | |||
Media | 0.00 | % | |||
REIT Diversified | 0.49 | % | |||
REIT Healthcare | 0.42 | % | |||
REIT Hotel | 0.08 | % | |||
REIT Industrial | 0.43 | % | |||
REIT Information Technology | 0.23 | % | |||
REIT Mall | 0.08 | % | |||
REIT Manufactured Housing | 0.12 | % | |||
REIT Multifamily | 0.99 | % | |||
REIT Office | 0.15 | % | |||
REIT Self-Storage | 0.36 | % | |||
REIT Shopping Center | 0.32 | % | |||
REIT Single Tenant | 0.19 | % | |||
REIT Specialty | 0.31 | % | |||
Utilities | 0.95 | % | |||
Convertible Preferred Stock | 1.42 | % | |||
Exchange-Traded Funds | 2.57 | % | |||
Limited Partnerships | 1.77 | % | |||
Leveraged Non-Recourse Security | 0.00 | % | |||
Options Purchased | 0.00 | % | |||
Short-Term Investments | 2.39 | % | |||
Total Value of Securities Before Options Written | 99.50 | % | |||
Options Written | (0.00 | %) | |||
Receivables and Other Assets Net of Liabilities | 0.50 | % | |||
Total Net Assets | 100.00 | % |
4
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 | 2.16 | % | |||
Microsoft | 2.01 | % | |||
Johnson & Johnson | 1.41 | % | |||
ConocoPhillips | 1.32 | % | |||
Broadcom | 1.16 | % | |||
Merck & Co. | 1.11 | % | |||
TJX | 1.04 | % | |||
MetLife | 1.03 | % | |||
Verizon Communications | 1.00 | % | |||
Exxon Mobil | 0.90 | % |
5
Schedule of investments | |
Delaware Wealth Builder Fund | May 31, 2022 (Unaudited) |
Principal | |||||||
amount° | Value (US $) | ||||||
Agency Mortgage-Backed Securities – 2.72% | |||||||
Fannie Mae | |||||||
4.50% 2/1/44 | 46,320 | $ | 48,057 | ||||
Fannie Mae S.F. 15 yr | |||||||
2.00% 2/1/36 | 142,237 | 134,533 | |||||
2.50% 7/1/36 | 260,527 | 252,501 | |||||
Fannie Mae S.F. 20 yr | |||||||
2.00% 3/1/41 | 42,314 | 38,219 | |||||
2.00% 5/1/41 | 181,331 | 163,795 | |||||
3.00% 3/1/33 | 255,358 | 251,724 | |||||
Fannie Mae S.F. 30 yr | |||||||
2.00% 12/1/50 | 23,629 | 21,033 | |||||
2.00% 1/1/51 | 68,844 | 61,371 | |||||
2.00% 2/1/51 | 45,736 | 40,800 | |||||
2.00% 3/1/51 | 46,017 | 41,045 | |||||
2.00% 5/1/51 | 276,609 | 246,109 | |||||
2.00% 6/1/51 | 901,950 | 804,512 | |||||
2.50% 1/1/43 | 19,388 | 18,059 | |||||
2.50% 6/1/51 | 31,490 | 29,257 | |||||
2.50% 8/1/51 | 470,411 | 434,744 | |||||
2.50% 2/1/52 | 839,940 | 775,429 | |||||
3.00% 11/1/48 | 10,350 | 10,014 | |||||
3.00% 12/1/49 | 5,619 | 5,388 | |||||
3.00% 3/1/50 | 86,758 | 83,583 | |||||
3.00% 7/1/50 | 165,311 | 159,206 | |||||
3.00% 7/1/51 | 173,234 | 165,847 | |||||
3.00% 8/1/51 | 74,447 | 71,115 | |||||
3.00% 3/1/52 | 853,244 | 813,440 | |||||
3.50% 12/1/47 | 299,132 | 296,629 | |||||
3.50% 1/1/48 | 93,992 | 93,285 | |||||
3.50% 2/1/48 | 55,414 | 55,068 | |||||
3.50% 11/1/48 | 15,559 | 15,463 | |||||
3.50% 12/1/49 | 170,259 | 168,355 | |||||
3.50% 1/1/52 | 678,362 | 666,373 | |||||
3.50% 5/1/52 | 297,656 | 293,145 | |||||
4.00% 4/1/47 | 8,666 | 8,846 | |||||
4.00% 6/1/48 | 99,667 | 101,177 | |||||
4.00% 9/1/48 | 4,284 | 4,330 | |||||
4.00% 6/1/49 | 7,922 | 8,047 | |||||
4.50% ω | 270,000 | 274,683 | |||||
4.50% 10/1/45 | 61,074 | 63,683 | |||||
4.50% 11/1/47 | 31,383 | 32,862 | |||||
4.50% 4/1/48 | 370,481 | 387,854 |
6
Principal | |||||||
amount° | Value (US $) | ||||||
Agency Mortgage-Backed Securities (continued) | |||||||
Fannie Mae S.F. 30 yr | |||||||
4.50% 7/1/48 | 294,637 | $ | 300,547 | ||||
4.50% 1/1/49 | 116,659 | 121,944 | |||||
4.50% 1/1/50 | 30,179 | 31,322 | |||||
5.00% 7/1/49 | 99,959 | 104,487 | |||||
Freddie Mac S.F. 15 yr | |||||||
2.00% 12/1/35 | 66,311 | 62,725 | |||||
3.00% 3/1/35 | 125,669 | 124,497 | |||||
Freddie Mac S.F. 20 yr | |||||||
2.00% 3/1/41 | 48,196 | 43,530 | |||||
2.50% 6/1/41 | 411,257 | 384,565 | |||||
3.00% 9/1/40 | 116,705 | 112,819 | |||||
3.00% 4/1/42 | 245,638 | 237,460 | |||||
3.50% 9/1/35 | 179,545 | 182,000 | |||||
Freddie Mac S.F. 30 yr | |||||||
2.00% 9/1/51 | 177,066 | 158,212 | |||||
2.50% 10/1/50 | 37,010 | 34,354 | |||||
2.50% 11/1/50 | 59,843 | 55,159 | |||||
2.50% 2/1/51 | 22,645 | 21,015 | |||||
3.00% 1/1/50 | 9,725 | 9,332 | |||||
3.00% 8/1/51 | 793,946 | 759,209 | |||||
3.50% 8/1/49 | 258,383 | 255,233 | |||||
4.00% 7/1/47 | 2,591 | 2,637 | |||||
4.00% 10/1/47 | 25,625 | 25,919 | |||||
4.00% 4/1/52 | 137,151 | 137,273 | |||||
4.50% 4/1/49 | 9,642 | 10,017 | |||||
4.50% 8/1/49 | 24,946 | 26,107 | |||||
3.50% 4/1/52 | 28,743 | 28,314 | |||||
GNMA I S.F. 30 yr | |||||||
3.00% 8/15/45 | 56,008 | 54,253 | |||||
Total Agency Mortgage-Backed Securities | |||||||
(cost $11,229,691) | 10,422,511 | ||||||
Collateralized Debt Obligations – 0.20% | |||||||
Cedar Funding IX CLO | |||||||
Series 2018-9A A1 144A 2.043% (LIBOR03M + | |||||||
0.98%, Floor 0.98%) 4/20/31 #, ● | 250,000 | 245,569 | |||||
Octagon Investment Partners 48 | |||||||
Series 2020-3A AR 144A 2.213% (LIBOR03M | |||||||
+ 1.15%, Floor 1.15%) 10/20/34 #, ● | 300,000 | 289,537 |
7
Schedule of investments
Delaware Wealth Builder Fund
Principal | |||||||
amount° | Value (US $) | ||||||
Collateralized Debt Obligations (continued) | |||||||
Sound Point Clo XXI | |||||||
Series 2018-3A A1A 144A 2.394% (LIBOR03M | |||||||
+ 1.18%, Floor 1.18%) 10/26/31 #, ● | 250,000 | $ | 245,387 | ||||
Total Collateralized Debt Obligations | |||||||
(cost $793,157) | 780,493 | ||||||
Convertible Bonds – 6.52% | |||||||
Basic Industry – 0.13% | |||||||
Ivanhoe Mines 144A 2.50% exercise price $7.43, | |||||||
maturity date 4/15/26 # | 393,000 | 494,001 | |||||
494,001 | |||||||
Capital Goods – 0.16% | |||||||
Kaman 3.25% exercise price $65.26, maturity | |||||||
date 5/1/24 | 651,000 | 624,960 | |||||
624,960 | |||||||
Communications – 0.74% | |||||||
Cable One 1.125% exercise price $2,275.83, | |||||||
maturity date 3/15/28 | 883,000 | 752,316 | |||||
DISH Network 3.375% exercise price $65.18, | |||||||
maturity date 8/15/26 | 1,115,000 | 843,314 | |||||
Liberty Broadband 144A 1.25% exercise price | |||||||
$900.01, maturity date 9/30/50 # | 974,000 | 923,037 | |||||
Liberty Latin America 2.00% exercise price | |||||||
$20.65, maturity date 7/15/24 | 373,000 | 334,728 | |||||
2,853,395 | |||||||
Consumer Cyclical – 0.45% | |||||||
Cheesecake Factory 0.375% exercise price | |||||||
$77.83, maturity date 6/15/26 | 1,133,000 | 924,731 | |||||
Ford Motor 0.368% exercise price $17.31, | |||||||
maturity date 3/15/26 ^ | 596,000 | 624,012 | |||||
fuboTV 3.25% exercise price $57.78, maturity | |||||||
date 2/15/26 | 521,000 | 161,510 | |||||
1,710,253 | |||||||
Consumer Non-Cyclical – 1.64% | |||||||
BioMarin Pharmaceutical 0.599% exercise price | |||||||
$124.67, maturity date 8/1/24 | 424,000 | 419,124 | |||||
Chefs' Warehouse 1.875% exercise price $44.20, | |||||||
maturity date 12/1/24 | 938,000 | 1,025,892 | |||||
Chegg 4.269% exercise price $107.55, maturity | |||||||
date 9/1/26 ^ | 1,224,000 | 954,720 |
8
Principal | |||||||
amount° | Value (US $) | ||||||
Convertible Bonds (continued) | |||||||
Consumer Non-Cyclical (continued) | |||||||
Coherus Biosciences 1.50% exercise price | |||||||
$19.26, maturity date 4/15/26 | 528,000 | $ | 370,661 | ||||
Collegium Pharmaceutical 2.625% exercise price | |||||||
$29.19, maturity date 2/15/26 | 539,000 | 456,533 | |||||
Integra LifeSciences Holdings 0.50% exercise | |||||||
price $73.67, maturity date 8/15/25 | 825,000 | 854,546 | |||||
Ionis Pharmaceuticals 0.125% exercise price | |||||||
$83.28, maturity date 12/15/24 | 612,000 | 538,866 | |||||
Jazz Investments I 2.00% exercise price $155.81, | |||||||
maturity date 6/15/26 | 365,000 | 425,536 | |||||
Neurocrine Biosciences 2.25% exercise price | |||||||
$75.92, maturity date 5/15/24 | 232,000 | 302,367 | |||||
Paratek Pharmaceuticals 4.75% exercise price | |||||||
$15.90, maturity date 5/1/24 | 1,065,000 | 919,308 | |||||
6,267,553 | |||||||
Electric — 0.25% | |||||||
NextEra Energy Partners 144A 0.357% exercise | |||||||
price $75.96, maturity date 11/15/25 #, ^ | 289,000 | 295,647 | |||||
NRG Energy 2.75% exercise price $44.15, | |||||||
maturity date 6/1/48 | 540,000 | 652,320 | |||||
947,967 | |||||||
Energy — 0.24% | |||||||
Helix Energy Solutions Group 6.75% exercise | |||||||
price $6.97, maturity date 2/15/26 | 853,000 | 929,599 | |||||
929,599 | |||||||
Financials — 0.45% | |||||||
FTI Consulting 2.00% exercise price $101.37, | |||||||
maturity date 8/15/23 | 480,000 | 809,856 | |||||
Repay Holdings 144A 2.419% exercise price | |||||||
$33.60, maturity date 2/1/26 #, ^ | 1,188,000 | 926,640 | |||||
1,736,496 | |||||||
Industrials — 0.29% | |||||||
Chart Industries 144A 1.00% exercise price | |||||||
$58.73, maturity date 11/15/24 # | 331,000 | 1,000,889 | |||||
Danimer Scientific 144A 3.25% exercise price | |||||||
$10.79, maturity date 12/15/26 # | 154,000 | 107,954 | |||||
1,108,843 |
9
Schedule of investments
Delaware Wealth Builder Fund
Principal | |||||||
amount° | Value (US $) | ||||||
Convertible Bonds (continued) | |||||||
Real Estate Investment Trusts — 0.23% | |||||||
Blackstone Mortgage Trust 4.75% exercise price | |||||||
$36.23, maturity date 3/15/23 | 635,000 | $ | 640,715 | ||||
Summit Hotel Properties 1.50% exercise price | |||||||
$11.99, maturity date 2/15/26 | 246,000 | 231,486 | |||||
872,201 | |||||||
Technology — 1.47% | |||||||
Block 0.125% exercise price $121.01, maturity | |||||||
date 3/1/25 | 445,000 | 478,653 | |||||
InterDigital 144A 3.50% exercise price $77.50, | |||||||
maturity date 6/1/27 # | 1,004,000 | 1,067,754 | |||||
Microchip Technology 1.625% exercise price | |||||||
$46.43, maturity date 2/15/27 | 365,000 | 755,550 | |||||
ON Semiconductor 1.625% exercise price $20.72, | |||||||
maturity date 10/15/23 | 337,000 | 991,168 | |||||
Palo Alto Networks 0.75% exercise price $266.35, | |||||||
maturity date 7/1/23 | 389,000 | 743,832 | |||||
Quotient Technology 1.75% exercise price | |||||||
$17.36, maturity date 12/1/22 | 547,000 | 521,728 | |||||
RingCentral 4.55% exercise price $360.43, | |||||||
maturity date 3/1/25 ^ | 581,000 | 499,660 | |||||
Vishay Intertechnology 2.25% exercise price | |||||||
$31.30, maturity date 6/15/25 | 326,000 | 320,348 | |||||
Wolfspeed 144A 0.25% exercise price $127.22, | |||||||
maturity date 2/15/28 # | 305,000 | 272,723 | |||||
5,651,416 | |||||||
Transportation — 0.47% | |||||||
Seaspan 144A 3.75% exercise price $13.01, | |||||||
maturity date 12/15/25 # | 718,000 | 828,572 | |||||
Spirit Airlines 1.00% exercise price $49.07, | |||||||
maturity date 5/15/26 | 1,113,000 | 968,867 | |||||
1,797,439 | |||||||
Total Convertible Bonds | |||||||
(cost $24,201,170) | 24,994,123 | ||||||
Corporate Bonds — 12.81% | |||||||
Automotive — 0.25% | |||||||
Allison Transmission 144A 5.875% 6/1/29 # | 335,000 | 336,414 | |||||
Ford Motor Credit | |||||||
3.375% 11/13/25 | 240,000 | 230,064 | |||||
4.542% 8/1/26 | 260,000 | 255,797 |
10
Principal | ||||||||||
amount° | Value (US $) | |||||||||
Corporate Bonds (continued) | ||||||||||
Automotive (continued) | ||||||||||
Goodyear Tire & Rubber 5.25% 7/15/31 | 135,000 | $ | 123,100 | |||||||
945,375 | ||||||||||
Banking — 1.68% | ||||||||||
Banco Continental 144A 2.75% 12/10/25 # | 200,000 | 179,260 | ||||||||
Banco del Estado de Chile 144A 2.704% 1/9/25 # | 205,000 | 196,569 | ||||||||
Banco Nacional de Panama 144A 2.50% | ||||||||||
8/11/30 # | 200,000 | 164,400 | ||||||||
Bank of America | ||||||||||
1.922% 10/24/31 µ | 560,000 | 462,963 | ||||||||
2.456% 10/22/25 µ | 15,000 | 14,541 | ||||||||
2.482% 9/21/36 µ | 140,000 | 113,482 | ||||||||
2.884% 10/22/30 µ | 20,000 | 18,083 | ||||||||
3.194% 7/23/30 µ | 55,000 | 50,914 | ||||||||
Barclays 6.125% 12/15/25 µ, ψ | 200,000 | 197,220 | ||||||||
BBVA Bancomer | ||||||||||
144A 1.875% 9/18/25 # | 200,000 | 185,313 | ||||||||
144A 6.75% 9/30/22 # | 274,000 | 277,485 | ||||||||
Citigroup 4.45% 9/29/27 | 465,000 | 466,923 | ||||||||
Credit Agricole 144A 2.811% 1/11/41 # | 275,000 | 198,782 | ||||||||
Credit Suisse Group 144A 2.593% 9/11/25 #, µ | 250,000 | 239,317 | ||||||||
Deutsche Bank | ||||||||||
2.222% 9/18/24 µ | 300,000 | 292,503 | ||||||||
6.00% 10/30/25 µ, ψ | 200,000 | 188,132 | ||||||||
Development Bank of Kazakhstan 144A 10.95% | ||||||||||
5/6/26 # | KZT | 100,000,000 | 183,752 | |||||||
Goldman Sachs Group | ||||||||||
1.542% 9/10/27 µ | 105,000 | 94,251 | ||||||||
2.615% 4/22/32 µ | 355,000 | 306,284 | ||||||||
3.50% 4/1/25 | 80,000 | 79,960 | ||||||||
JPMorgan Chase & Co. | ||||||||||
1.764% 11/19/31 µ | 80,000 | 65,668 | ||||||||
2.58% 4/22/32 µ | 435,000 | 379,804 | ||||||||
2.739% 10/15/30 µ | 20,000 | 18,098 | ||||||||
5.00% 8/1/24 µ, ψ | 85,000 | 78,980 | ||||||||
Morgan Stanley | ||||||||||
1.794% 2/13/32 µ | 315,000 | 258,771 | ||||||||
2.484% 9/16/36 µ | 70,000 | 56,522 | ||||||||
5.00% 11/24/25 | 95,000 | 98,399 | ||||||||
NBK SPC 144A 1.625% 9/15/27 #, µ | 200,000 | 180,291 | ||||||||
PNC Financial Services Group 2.60% 7/23/26 | 180,000 | 173,726 |
11
Schedule of investments
Delaware Wealth Builder Fund
Principal | |||||||
amount° | Value (US $) | ||||||
Corporate Bonds (continued) | |||||||
Banking (continued) | |||||||
State Street | |||||||
3.10% 5/15/23 | 10,000 | $ | 10,065 | ||||
3.30% 12/16/24 | 130,000 | 131,037 | |||||
SVB Financial Group 4.00% 5/15/26 µ, ψ | 305,000 | 248,956 | |||||
Truist Bank 2.636% 9/17/29 µ | 185,000 | 179,353 | |||||
Truist Financial 4.95% 9/1/25 µ, ψ | 55,000 | 54,989 | |||||
US Bancorp | |||||||
3.00% 7/30/29 | 150,000 | 139,578 | |||||
3.10% 4/27/26 | 210,000 | 206,344 | |||||
3.375% 2/5/24 | 60,000 | 60,389 | |||||
Wells Fargo & Co. 3.526% 3/24/28 µ | 190,000 | 184,829 | |||||
6,435,933 | |||||||
Basic Industry — 0.65% | |||||||
Allegheny Technologies 5.125% 10/1/31 | 75,000 | 67,746 | |||||
AngloGold Ashanti Holdings 3.75% 10/1/30 | 200,000 | 173,540 | |||||
Antofagasta 144A 5.625% 5/13/32 # | 200,000 | 204,450 | |||||
Avient 144A 5.75% 5/15/25 # | 88,000 | 89,068 | |||||
Chemours 144A 5.75% 11/15/28 # | 180,000 | 177,918 | |||||
Corp Nacional del Cobre de Chile 144A 3.15% | |||||||
1/14/30 # | 200,000 | 181,759 | |||||
First Quantum Minerals 144A 7.50% 4/1/25 # | 250,000 | 252,392 | |||||
Freeport-McMoRan 5.45% 3/15/43 | 230,000 | 226,536 | |||||
INEOS Quattro Finance 2 144A 3.375% 1/15/26 # | 200,000 | 185,487 | |||||
New Gold 144A 7.50% 7/15/27 # | 165,000 | 154,792 | |||||
Newmont 2.80% 10/1/29 | 190,000 | 173,084 | |||||
Novelis 144A 4.75% 1/30/30 # | 175,000 | 166,284 | |||||
OCP 144A 3.75% 6/23/31 # | 200,000 | 166,546 | |||||
Olin 5.00% 2/1/30 | 100,000 | 97,677 | |||||
Sherwin-Williams 2.90% 3/15/52 | 235,000 | 171,776 | |||||
2,489,055 | |||||||
Capital Goods — 0.43% | |||||||
ARD Finance 144A PIK 6.50% 6/30/27 #, > | 200,000 | 157,351 | |||||
Intertape Polymer Group 144A 4.375% 6/15/29 # | 190,000 | 195,819 | |||||
Madison IAQ 144A 5.875% 6/30/29 # | 150,000 | 117,630 | |||||
Sealed Air 144A 5.00% 4/15/29 # | 130,000 | 129,285 | |||||
Teledyne Technologies | |||||||
0.95% 4/1/24 | 105,000 | 100,447 | |||||
2.75% 4/1/31 | 430,000 | 373,333 | |||||
Terex 144A 5.00% 5/15/29 # | 195,000 | 181,945 | |||||
TK Elevator US Newco 144A 5.25% 7/15/27 # | 200,000 | 195,274 |
12
Principal | |||||||
amount° | Value (US $) | ||||||
Corporate Bonds (continued) | |||||||
Capital Goods (continued) | |||||||
TransDigm 144A 6.25% 3/15/26 # | 187,000 | $ | 190,455 | ||||
1,641,539 | |||||||
Communications — 0.87% | |||||||
AT&T | |||||||
1.70% 3/25/26 | 105,000 | 97,891 | |||||
4.35% 3/1/29 | 280,000 | 283,652 | |||||
Cellnex Finance 144A 3.875% 7/7/41 # | 200,000 | 147,492 | |||||
Charter Communications Operating | |||||||
4.40% 12/1/61 | 40,000 | 31,099 | |||||
4.80% 3/1/50 | 240,000 | 206,862 | |||||
5.05% 3/30/29 | 100,000 | 99,691 | |||||
Comcast 3.20% 7/15/36 | 340,000 | 303,259 | |||||
Crown Castle International 1.05% 7/15/26 | 375,000 | 334,134 | |||||
Discovery Communications | |||||||
4.00% 9/15/55 | 40,000 | 30,392 | |||||
4.125% 5/15/29 | 240,000 | 229,336 | |||||
Magallanes 144A 3.755% 3/15/27 # | 270,000 | 262,384 | |||||
Millicom International Cellular 144A 4.50% | |||||||
4/27/31 # | 200,000 | 173,033 | |||||
Ooredoo International Finance 144A 5.00% | |||||||
10/19/25 # | 200,000 | 207,635 | |||||
Time Warner Cable 7.30% 7/1/38 | 60,000 | 66,586 | |||||
Time Warner Entertainment 8.375% 3/15/23 | 25,000 | 25,965 | |||||
T-Mobile USA | |||||||
2.55% 2/15/31 | 125,000 | 108,643 | |||||
3.00% 2/15/41 | 270,000 | 212,380 | |||||
3.875% 4/15/30 | 120,000 | 115,518 | |||||
Verizon Communications | |||||||
2.10% 3/22/28 | 200,000 | 182,068 | |||||
4.50% 8/10/33 | 95,000 | 96,348 | |||||
Vodafone Group | |||||||
4.25% 9/17/50 | 110,000 | 97,217 | |||||
4.875% 6/19/49 | 40,000 | 38,638 | |||||
3,350,223 | |||||||
Consumer Cyclical — 0.43% | |||||||
Aptiv 3.10% 12/1/51 | 285,000 | 194,078 | |||||
AutoNation 1.95% 8/1/28 | 210,000 | 179,915 | |||||
B2W Digital 144A 4.375% 12/20/30 # | 200,000 | 161,549 | |||||
Ford Motor Credit 2.90% 2/16/28 | 260,000 | 226,816 |
13
Schedule of investments
Delaware Wealth Builder Fund
Principal | |||||||
amount° | Value (US $) | ||||||
Corporate Bonds (continued) | |||||||
Consumer Cyclical (continued) | |||||||
General Motors Financial | |||||||
1.184% (SOFR + 0.76%) 3/8/24 • | 110,000 | $ | 108,118 | ||||
4.35% 4/9/25 | 130,000 | 131,144 | |||||
5.25% 3/1/26 | 205,000 | 211,063 | |||||
Hutama Karya Persero 144A 3.75% 5/11/30 # | 200,000 | 189,971 | |||||
Lowe's 4.25% 4/1/52 | 270,000 | 246,151 | |||||
1,648,805 | |||||||
Consumer Goods – 0.12% | |||||||
JBS USA LUX 144A 6.50% 4/15/29 # | 220,000 | 223,566 | |||||
Pilgrim's Pride 144A 4.25% 4/15/31 # | 110,000 | 102,060 | |||||
Post Holdings 144A 5.625% 1/15/28 # | 120,000 | 119,100 | |||||
444,726 | |||||||
Consumer Non-Cyclical – 0.63% | |||||||
Anheuser-Busch InBev Worldwide 3.65% 2/1/26 | 125,000 | 125,302 | |||||
BAT Capital 2.259% 3/25/28 | 55,000 | 47,593 | |||||
Biogen 3.15% 5/1/50 | 275,000 | 199,838 | |||||
Bunge Finance | |||||||
1.63% 8/17/25 | 150,000 | 140,045 | |||||
2.75% 5/14/31 | 165,000 | 143,303 | |||||
Central American Bottling 144A 5.25% 4/27/29 # | 200,000 | 191,178 | |||||
CVS Health | |||||||
2.70% 8/21/40 | 395,000 | 300,388 | |||||
3.25% 8/15/29 | 185,000 | 174,263 | |||||
Gilead Sciences 4.15% 3/1/47 | 250,000 | 230,282 | |||||
HCA 144A 3.125% 3/15/27 # | 385,000 | 366,998 | |||||
InRetail Consumer 144A 3.25% 3/22/28 # | 200,000 | 173,446 | |||||
Royalty Pharma 1.20% 9/2/25 | 370,000 | 339,455 | |||||
2,432,091 | |||||||
Electric – 0.60% | |||||||
CenterPoint Energy 1.45% 6/1/26 | 255,000 | 233,441 | |||||
Duke Energy 4.875% 9/16/24 µ, ψ | 240,000 | 228,555 | |||||
Entergy Louisiana 4.95% 1/15/45 | 5,000 | 5,027 | |||||
Entergy Mississippi 2.85% 6/1/28 | 60,000 | 56,473 | |||||
Entergy Texas 3.55% 9/30/49 | 115,000 | 94,688 | |||||
Evergy 2.90% 9/15/29 | 160,000 | 144,563 | |||||
Evergy Metro 3.65% 8/15/25 | 25,000 | 25,068 | |||||
NextEra Energy Capital Holdings | |||||||
3.00% 1/15/52 | 270,000 | 201,723 | |||||
5.65% 5/1/79 µ | 55,000 | 51,429 |
14
Principal | |||||||
amount° | Value (US $) | ||||||
Corporate Bonds (continued) | |||||||
Electric (continued) | |||||||
Pacific Gas and Electric 2.10% 8/1/27 | 325,000 | $ | 283,064 | ||||
PacifiCorp 2.90% 6/15/52 | 425,000 | 324,414 | |||||
Southern California Edison | |||||||
4.00% 4/1/47 | 320,000 | 274,049 | |||||
4.875% 3/1/49 | 45,000 | 42,762 | |||||
Southwestern Electric Power 4.10% 9/15/28 | 165,000 | 163,027 | |||||
UEP Penonome II 144A 6.50% 10/1/38 # | 189,725 | 180,186 | |||||
2,308,469 | |||||||
Energy – 1.67% | |||||||
Ascent Resources Utica Holdings | |||||||
144A 5.875% 6/30/29 # | 160,000 | 153,493 | |||||
144A 7.00% 11/1/26 # | 80,000 | 80,310 | |||||
BP Capital Markets America | |||||||
2.939% 6/4/51 | 275,000 | 208,679 | |||||
3.06% 6/17/41 | 70,000 | 58,088 | |||||
Callon Petroleum 144A 8.00% 8/1/28 # | 170,000 | 175,447 | |||||
CNX Midstream Partners 144A 4.75% 4/15/30 # | 65,000 | 58,083 | |||||
CNX Resources | |||||||
144A 6.00% 1/15/29 # | 135,000 | 134,392 | |||||
144A 7.25% 3/14/27 # | 90,000 | 94,302 | |||||
ConocoPhillips 3.80% 3/15/52 | 225,000 | 205,450 | |||||
Crestwood Midstream Partners 144A 6.00% | |||||||
2/1/29 # | 188,000 | 177,759 | |||||
Diamondback Energy 3.125% 3/24/31 | 235,000 | 213,379 | |||||
Enbridge | |||||||
1.189% (SOFR + 0.40%) 2/17/23 • | 125,000 | 124,754 | |||||
2.50% 8/1/33 | 245,000 | 205,394 | |||||
Energy Transfer | |||||||
5.25% 4/15/29 | 95,000 | 97,304 | |||||
6.25% 4/15/49 | 60,000 | 61,364 | |||||
6.50% 11/15/26 µ, ψ | 120,000 | 112,335 | |||||
Enterprise Products Operating 3.20% 2/15/52 | 335,000 | 253,723 | |||||
EQM Midstream Partners 144A 4.75% 1/15/31 # | 260,000 | 226,052 | |||||
Genesis Energy | |||||||
7.75% 2/1/28 | 285,000 | 275,110 | |||||
8.00% 1/15/27 | 175,000 | 172,917 | |||||
Hilcorp Energy I | |||||||
144A 6.00% 4/15/30 # | 145,000 | 141,279 | |||||
144A 6.25% 4/15/32 # | 30,000 | 29,300 |
15
Schedule of investments
Delaware Wealth Builder Fund
Principal | |||||||
amount° | Value (US $) | ||||||
Corporate Bonds (continued) | |||||||
Energy (continued) | |||||||
KazTransGas 144A 4.375% 9/26/27 # | 381,000 | $ | 345,224 | ||||
Marathon Oil 4.40% 7/15/27 | 230,000 | 231,343 | |||||
MPLX | |||||||
4.00% 3/15/28 | 30,000 | 29,347 | |||||
4.125% 3/1/27 | 135,000 | 133,873 | |||||
5.50% 2/15/49 | 55,000 | 54,967 | |||||
Murphy Oil 6.375% 7/15/28 | 295,000 | 303,260 | |||||
NuStar Logistics | |||||||
5.625% 4/28/27 | 163,000 | 163,852 | |||||
6.00% 6/1/26 | 78,000 | 78,826 | |||||
Occidental Petroleum | |||||||
6.45% 9/15/36 | 55,000 | 61,600 | |||||
6.60% 3/15/46 | 205,000 | 231,916 | |||||
6.625% 9/1/30 | 90,000 | 101,007 | |||||
PDC Energy 5.75% 5/15/26 | 205,000 | 206,116 | |||||
PTTEP Treasury Center 144A 2.587% 6/10/27 # | 185,000 | 174,015 | |||||
Qatar Energy 144A 2.25% 7/12/31 # | 200,000 | 177,804 | |||||
Sabine Pass Liquefaction | |||||||
5.625% 3/1/25 | 55,000 | 57,186 | |||||
5.75% 5/15/24 | 210,000 | 217,046 | |||||
Southwestern Energy | |||||||
5.375% 2/1/29 | 20,000 | 20,166 | |||||
5.375% 3/15/30 | 95,000 | 96,299 | |||||
7.75% 10/1/27 | 85,000 | 89,845 | |||||
Tengizchevroil Finance Co. International 144A | |||||||
2.625% 8/15/25 # | 200,000 | 176,600 | |||||
Tennessee Gas Pipeline 144A 2.90% 3/1/30 # | 130,000 | 116,230 | |||||
Weatherford International 144A 8.625% 4/30/30 # | 85,000 | 81,413 | |||||
6,406,849 | |||||||
Financials – 0.63% | |||||||
AerCap Holdings 5.875% 10/10/79 µ | 185,000 | 173,684 | |||||
AerCap Ireland Capital 4.45% 4/3/26 | 300,000 | 293,864 | |||||
Air Lease | |||||||
2.875% 1/15/26 | 250,000 | 235,545 | |||||
4.65% 6/15/26 µ, ψ | 135,000 | 116,408 | |||||
Ally Financial 8.00% 11/1/31 | 135,000 | 158,705 | |||||
Aviation Capital Group 144A 1.95% 1/30/26 # | 365,000 | 326,707 | |||||
Bank of Georgia JSC 144A 6.00% 7/26/23 # | 200,000 | 200,684 |
16
Principal | |||||||
amount° | Value (US $) | ||||||
Corporate Bonds (continued) | |||||||
Financials (continued) | |||||||
Castlelake Aviation Finance 144A 5.00% | |||||||
4/15/27 # | 170,000 | $ | 146,772 | ||||
Hightower Holding 144A 6.75% 4/15/29 # | 110,000 | 93,019 | |||||
Jefferies Group | |||||||
4.15% 1/23/30 | 170,000 | 159,860 | |||||
6.45% 6/8/27 | 10,000 | 10,849 | |||||
6.50% 1/20/43 | 5,000 | 5,270 | |||||
MAF Sukuk 3.933% 2/28/30 | 200,000 | 194,099 | |||||
Midcap Financial Issuer Trust 144A 6.50% | |||||||
5/1/28 # | 200,000 | 170,785 | |||||
MSCI 144A 3.625% 11/1/31 # | 155,000 | 140,628 | |||||
2,426,879 | |||||||
Healthcare – 0.62% | |||||||
Bausch Health 144A 6.25% 2/15/29 # | 325,000 | 202,555 | |||||
Cheplapharm Arzneimittel 144A 5.50% 1/15/28 # | 200,000 | 181,060 | |||||
Community Health Systems 144A 4.75% | |||||||
2/15/31 # | 135,000 | 109,159 | |||||
DaVita 144A 4.625% 6/1/30 # | 150,000 | 130,608 | |||||
Encompass Health 5.75% 9/15/25 | 174,000 | 176,147 | |||||
Hadrian Merger Sub 144A 8.50% 5/1/26 # | 200,000 | 195,595 | |||||
HCA | |||||||
5.375% 2/1/25 | 124,000 | 128,340 | |||||
5.875% 2/15/26 | 159,000 | 167,150 | |||||
7.58% 9/15/25 | 159,000 | 172,872 | |||||
ModivCare Escrow Issuer 144A 5.00% 10/1/29 # | 135,000 | 122,369 | |||||
Organon & Co. 144A 5.125% 4/30/31 # | 250,000 | 240,694 | |||||
Ortho-Clinical Diagnostics | |||||||
144A 7.25% 2/1/28 # | 90,000 | 95,413 | |||||
144A 7.375% 6/1/25 # | 107,000 | 110,946 | |||||
Tenet Healthcare | |||||||
144A 4.25% 6/1/29 # | 175,000 | 164,658 | |||||
144A 6.125% 10/1/28 # | 200,000 | 195,580 | |||||
2,393,146 | |||||||
Insurance – 0.52% | |||||||
Arthur J Gallagher & Co. 3.50% 5/20/51 | 400,000 | 319,486 | |||||
Athene Global Funding 144A 1.00% 4/16/24 # | 90,000 | 85,519 | |||||
Athene Holding 3.95% 5/25/51 | 365,000 | 293,223 | |||||
Brown & Brown 4.95% 3/17/52 | 185,000 | 170,438 | |||||
GA Global Funding Trust 144A 1.00% 4/8/24 # | 365,000 | 347,412 | |||||
HUB International 144A 5.625% 12/1/29 # | 155,000 | 144,823 |
17
Schedule of investments
Delaware Wealth Builder Fund
Principal | |||||||
amount° | Value (US $) | ||||||
Corporate Bonds (continued) | |||||||
Insurance (continued) | |||||||
NFP 144A 6.875% 8/15/28 # | 120,000 | $ | 104,813 | ||||
Roller Bearing Co. of America 144A 4.375% | |||||||
10/15/29 # | 190,000 | 169,102 | |||||
USI 144A 6.875% 5/1/25 # | 343,000 | 338,024 | |||||
1,972,840 | |||||||
Leisure Time – 0.41% | |||||||
Boyd Gaming 4.75% 12/1/27 | 185,000 | 180,148 | |||||
Caesars Entertainment 144A 6.25% 7/1/25 # | 370,000 | 375,261 | |||||
Carnival | |||||||
144A 5.75% 3/1/27 # | 330,000 | 293,360 | |||||
144A 7.625% 3/1/26 # | 235,000 | 220,768 | |||||
Royal Caribbean Cruises 144A 5.50% 4/1/28 # | 330,000 | 279,083 | |||||
Scientific Games International 144A 7.25% | |||||||
11/15/29 # | 115,000 | 114,471 | |||||
Six Flags Entertainment 144A 4.875% 7/31/24 # | 110,000 | 108,233 | |||||
1,571,324 | |||||||
Media – 0.62% | |||||||
AMC Networks 4.25% 2/15/29 | 395,000 | 362,035 | |||||
CCO Holdings | |||||||
144A 4.50% 8/15/30 # | 80,000 | 72,355 | |||||
4.50% 5/1/32 | 45,000 | 39,652 | |||||
144A 5.375% 6/1/29 # | 380,000 | 369,626 | |||||
CSC Holdings | |||||||
144A 3.375% 2/15/31 # | 200,000 | 162,549 | |||||
144A 5.00% 11/15/31 # | 215,000 | 169,914 | |||||
5.25% 6/1/24 | 5,000 | 4,948 | |||||
Cumulus Media New Holdings 144A 6.75% | |||||||
7/1/26 # | 183,000 | 178,293 | |||||
Directv Financing 144A 5.875% 8/15/27 # | 115,000 | 108,644 | |||||
DISH DBS 144A 5.75% 12/1/28 # | 125,000 | 102,263 | |||||
Gray Television 144A 4.75% 10/15/30 # | 175,000 | 154,081 | |||||
Nielsen Finance | |||||||
144A 4.50% 7/15/29 # | 45,000 | 42,623 | |||||
144A 4.75% 7/15/31 # | 150,000 | 143,975 | |||||
Sirius XM Radio 144A 4.00% 7/15/28 # | 315,000 | 292,580 | |||||
Terrier Media Buyer 144A 8.875% 12/15/27 # | 180,000 | 163,666 | |||||
2,367,204 |
18
Principal | ||||||
amount° | Value (US $) | |||||
Corporate Bonds (continued) | ||||||
Natural Gas – 0.05% | ||||||
Infraestructura Energetica Nova 144A 3.75% | ||||||
1/14/28 # | 205,000 | $ | 191,075 | |||
191,075 | ||||||
Real Estate Investment Trusts – 0.07% | ||||||
CubeSmart 3.00% 2/15/30 | 140,000 | 126,729 | ||||
VICI Properties | ||||||
144A 3.875% 2/15/29 # | 35,000 | 31,509 | ||||
144A 5.75% 2/1/27 # | 120,000 | 119,897 | ||||
278,135 | ||||||
Retail – 0.31% | ||||||
Asbury Automotive Group | ||||||
144A 4.625% 11/15/29 # | 170,000 | 157,199 | ||||
4.75% 3/1/30 | 85,000 | 77,325 | ||||
Bath & Body Works | ||||||
6.875% 11/1/35 | 180,000 | 163,472 | ||||
6.95% 3/1/33 | 122,000 | 107,548 | ||||
CP Atlas Buyer 144A 7.00% 12/1/28 # | 70,000 | 57,529 | ||||
Levi Strauss & Co. 144A 3.50% 3/1/31 # | 160,000 | 140,810 | ||||
LSF9 Atlantis Holdings 144A 7.75% 2/15/26 # | 125,000 | 102,714 | ||||
Murphy Oil USA 144A 3.75% 2/15/31 # | 165,000 | 150,073 | ||||
PetSmart 144A 7.75% 2/15/29 # | 250,000 | 235,679 | ||||
1,192,349 | ||||||
Services – 0.27% | ||||||
Gartner 144A 4.50% 7/1/28 # | 125,000 | 121,716 | ||||
Iron Mountain 144A 4.50% 2/15/31 # | 320,000 | 287,500 | ||||
NESCO Holdings II 144A 5.50% 4/15/29 # | 105,000 | 94,943 | ||||
Prime Security Services Borrower 144A 5.75% | ||||||
4/15/26 # | 225,000 | 222,805 | ||||
United Rentals North America 3.875% 2/15/31 | 176,000 | 160,093 | ||||
Univar Solutions USA 144A 5.125% 12/1/27 # | 135,000 | 132,415 | ||||
1,019,472 | ||||||
Technology – 0.84% | ||||||
Autodesk 2.40% 12/15/31 | 300,000 | 255,367 | ||||
Broadcom 144A 3.469% 4/15/34 # | 345,000 | 294,325 | ||||
CDW 3.276% 12/1/28 | 285,000 | 256,779 | ||||
Fidelity National Information Services 1.65% | ||||||
3/1/28 | 365,000 | 319,261 | ||||
Fiserv 3.20% 7/1/26 | 235,000 | 228,486 |
19
Schedule of investments
Delaware Wealth Builder Fund
Principal | ||||||
amount° | Value (US $) | |||||
Corporate Bonds (continued) | ||||||
Technology (continued) | ||||||
Global Payments 2.65% 2/15/25 | 135,000 | $ | 131,337 | |||
Marvell Technology 2.45% 4/15/28 | 260,000 | 232,175 | ||||
Microchip Technology | ||||||
0.972% 2/15/24 | 255,000 | 244,524 | ||||
144A 0.983% 9/1/24 # | 100,000 | 94,097 | ||||
NXP | ||||||
3.25% 5/11/41 | 60,000 | 47,268 | ||||
4.875% 3/1/24 | 230,000 | 234,137 | ||||
Oracle 2.875% 3/25/31 | 250,000 | 212,981 | ||||
PayPal Holdings 2.65% 10/1/26 | 340,000 | 328,083 | ||||
VMware 1.00% 8/15/24 | 370,000 | 350,030 | ||||
3,228,850 | ||||||
Technology & Electronics – 0.20% | ||||||
Go Daddy Operating 144A 3.50% 3/1/29 # | 175,000 | 161,827 | ||||
Minerva Merger 144A 6.50% 2/15/30 # | 125,000 | 114,909 | ||||
NCR 144A 5.25% 10/1/30 # | 125,000 | 115,130 | ||||
Sensata Technologies 144A 4.00% 4/15/29 # | 200,000 | 190,819 | ||||
SS&C Technologies 144A 5.50% 9/30/27 # | 195,000 | 195,389 | ||||
778,074 | ||||||
Telecommunications – 0.41% | ||||||
Altice France 144A 5.50% 10/15/29 # | 180,000 | 156,485 | ||||
Altice France Holding 144A 6.00% 2/15/28 # | 310,000 | 259,549 | ||||
Connect Finco 144A 6.75% 10/1/26 # | 250,000 | 240,239 | ||||
Consolidated Communications | ||||||
144A 5.00% 10/1/28 # | 80,000 | 70,175 | ||||
144A 6.50% 10/1/28 # | 125,000 | 108,702 | ||||
Digicel International Finance 144A 8.75% | ||||||
5/25/24 # | 200,000 | 190,637 | ||||
Frontier Communications Holdings | ||||||
144A 5.875% 10/15/27 # | 240,000 | 235,481 | ||||
144A 6.75% 5/1/29 # | 75,000 | 66,230 | ||||
Sprint Capital 6.875% 11/15/28 | 12,000 | 13,590 | ||||
T-Mobile USA | ||||||
2.625% 4/15/26 | 95,000 | 89,811 | ||||
3.375% 4/15/29 | 95,000 | 88,153 | ||||
3.50% 4/15/31 | 68,000 | 62,178 | ||||
1,581,230 |
20
Principal | ||||||
amount° | Value (US $) | |||||
Corporate Bonds (continued) | ||||||
Transportation – 0.32% | ||||||
Delta Air Lines 7.375% 1/15/26 | 97,000 | $ | 104,393 | |||
Laredo Petroleum 144A 7.75% 7/31/29 # | 120,000 | 118,420 | ||||
Mileage Plus Holdings 144A 6.50% 6/20/27 # | 180,000 | 182,938 | ||||
Rutas 2 and 7 Finance 144A 3.413% 9/30/36 #, ^ | 193,333 | 124,011 | ||||
Seaspan 144A 5.50% 8/1/29 # | 165,000 | 147,883 | ||||
Southwest Airlines 5.125% 6/15/27 | 200,000 | 208,729 | ||||
United Airlines | ||||||
144A 4.375% 4/15/26 # | 65,000 | 62,826 | ||||
144A 4.625% 4/15/29 # | 80,000 | 75,160 | ||||
VistaJet Malta Finance 144A 6.375% 2/1/30 # | 225,000 | 191,632 | ||||
1,215,992 | ||||||
Utilities – 0.21% | ||||||
Calpine | ||||||
144A 4.50% 2/15/28 # | 67,000 | 64,134 | ||||
144A 5.00% 2/1/31 # | 185,000 | 165,227 | ||||
144A 5.25% 6/1/26 # | 60,000 | 58,636 | ||||
PG&E 5.25% 7/1/30 | 95,000 | 87,815 | ||||
Sociedad de Transmision Austral 144A 4.00% | ||||||
1/27/32 # | 200,000 | 178,781 | ||||
Vistra | ||||||
144A 7.00% 12/15/26 #, µ, ψ | 150,000 | 144,110 | ||||
144A 8.00% 10/15/26 #, µ, ψ | 90,000 | 89,485 | ||||
788,188 | ||||||
Total Corporate Bonds | ||||||
(cost $53,676,620) | 49,107,823 | |||||
Non-Agency Asset-Backed Securities – 0.22% | ||||||
Diamond Infrastructure Funding | ||||||
Series 2021-1A A 144A 1.76% 4/15/49 # | 100,000 | 89,237 | ||||
Domino's Pizza Master Issuer | ||||||
Series 2021-1A A2I 144A 2.662% 4/25/51 # | 99,000 | 88,301 | ||||
Taco Bell Funding | ||||||
Series 2021-1A A2I 144A 1.946% 8/25/51 # | 199,000 | 177,008 | ||||
Toyota Auto Loan Extended Note Trust | ||||||
Series 2022-1A A 144A 3.82% 4/25/35 # | 250,000 | 250,373 | ||||
Trafigura Securitisation Finance | ||||||
Series 2021-1A A2 144A 1.08% 1/15/25 # | 250,000 | 236,153 | ||||
Total Non-Agency Asset-Backed Securities | ||||||
(cost $897,862) | 841,072 |
21
Schedule of investments
Delaware Wealth Builder Fund
Principal | |||||||
amount° | Value (US $) | ||||||
Non-Agency Collateralized Mortgage Obligations – 0.03% | |||||||
JP Morgan Mortgage Trust | |||||||
Series 2021-10 A3 144A 2.50% 12/25/51 #, ● | 45,869 | $ | 40,020 | ||||
Morgan Stanley Residential Mortgage Loan Trust | |||||||
Series 2021-4 A3 144A 2.50% 7/25/51 #, ● | 92,117 | 80,373 | |||||
Total Non-Agency Collateralized Mortgage Obligations | |||||||
(cost $140,508) | 120,393 | ||||||
Non-Agency Commercial Mortgage-Backed Securities – 1.27% | |||||||
BANK | |||||||
Series 2017-BNK5 B 3.896% 6/15/60 ● | 95,000 | 90,431 | |||||
Series 2019-BN20 A3 3.011% 9/15/62 | 250,000 | 233,308 | |||||
Series 2020-BN25 A5 2.649% 1/15/63 | 350,000 | 317,098 | |||||
Series 2021-BN36 A5 2.47% 9/15/64 | 615,000 | 538,110 | |||||
Series 2022-BNK40 A4 3.394% 3/15/64 ● | 500,000 | 473,661 | |||||
Benchmark Mortgage Trust | |||||||
Series 2020-B17 A5 2.289% 3/15/53 | 350,000 | 308,241 | |||||
Series 2020-B20 A5 2.034% 10/15/53 | 300,000 | 256,716 | |||||
Series 2021-B24 A5 2.584% 3/15/54 | 260,000 | 230,947 | |||||
Series 2022-B33 A5 3.458% 3/15/55 | 500,000 | 474,253 | |||||
CD Mortgage Trust | |||||||
Series 2019-CD8 A4 2.912% 8/15/57 | 250,000 | 230,704 | |||||
CFCRE Commercial Mortgage Trust | |||||||
Series 2016-C7 A3 3.839% 12/10/54 | 100,000 | 99,395 | |||||
Citigroup Commercial Mortgage Trust | |||||||
Series 2019-C7 A4 3.102% 12/15/72 | 350,000 | 324,919 | |||||
Grace Trust | |||||||
Series 2020-GRCE A 144A 2.347% 12/10/40 # | 100,000 | 84,546 | |||||
GS Mortgage Securities Trust | |||||||
Series 2017-GS6 A3 3.433% 5/10/50 | 165,000 | 160,205 | |||||
Series 2019-GC42 A4 3.001% 9/1/52 | 350,000 | 328,221 | |||||
Series 2020-GC47 A5 2.377% 5/12/53 | 250,000 | 221,125 | |||||
JPM-BB Commercial Mortgage Securities Trust | |||||||
Series 2015-C33 A4 3.77% 12/15/48 | 150,000 | 149,237 | |||||
Wells Fargo Commercial Mortgage Trust | |||||||
Series 2019-C54 A4 3.146% 12/15/52 | 375,000 | 350,791 | |||||
Total Non-Agency Commercial Mortgage-Backed Securities | |||||||
(cost $5,515,900) | 4,871,908 |
22
Principal | |||||||||
amount° | Value (US $) | ||||||||
Sovereign Bonds – 1.46%Δ | |||||||||
Albania – 0.03% | |||||||||
Albania Government International Bond | |||||||||
3.50% 11/23/31 | EUR | 149,000 | $ | 127,781 | |||||
127,781 | |||||||||
Angola – 0.05% | |||||||||
Angolan Government International Bond | |||||||||
9.375% 5/8/48 | 200,000 | 179,606 | |||||||
179,606 | |||||||||
Armenia – 0.04% | |||||||||
Republic of Armenia International Bond | |||||||||
144A 3.60% 2/2/31 # | 200,000 | 146,768 | |||||||
146,768 | |||||||||
Brazil – 0.10% | |||||||||
Brazil Notas do Tesouro Nacional | |||||||||
Series F 10.00% 1/1/27 | BRL | 2,000,000 | 387,584 | ||||||
387,584 | |||||||||
Chile – 0.02% | |||||||||
Bonos de la Tesoreria de la Republica en pesos | |||||||||
144A 2.80% 10/1/33 # | CLP | 55,000,000 | 47,805 | ||||||
5.00% 3/1/35 | CLP | 25,000,000 | 27,087 | ||||||
74,892 | |||||||||
Colombia – 0.15% | |||||||||
Colombia Government International Bonds | |||||||||
4.125% 2/22/42 | 217,000 | 158,742 | |||||||
5.20% 5/15/49 | 200,000 | 158,635 | |||||||
Colombian TES 7.00% 6/30/32 | COP | 1,270,900,000 | 262,788 | ||||||
580,165 | |||||||||
Dominican Republic – 0.18% | |||||||||
Dominican Republic International Bonds | |||||||||
144A 4.50% 1/30/30 # | 396,000 | 348,710 | |||||||
144A 4.875% 9/23/32 # | 200,000 | 172,769 | |||||||
144A 5.50% 2/22/29 # | 200,000 | 189,739 | |||||||
711,218 | |||||||||
Egypt – 0.05% | |||||||||
Egypt Government International Bond | |||||||||
5.25% 10/6/25 | 200,000 | 181,007 | |||||||
181,007 |
23
Schedule of investments
Delaware Wealth Builder Fund
Principal | |||||||||
amount° | Value (US $) | ||||||||
Sovereign BondsΔ (continued) | |||||||||
Honduras – 0.04% | |||||||||
Honduras Government International Bond | |||||||||
144A 5.625% 6/24/30 # | 200,000 | $ | 143,547 | ||||||
143,547 | |||||||||
Indonesia – 0.02% | |||||||||
Indonesia Treasury Bond | |||||||||
6.125% 5/15/28 | IDR | 1,339,000,000 | 89,559 | ||||||
89,559 | |||||||||
Ivory Coast – 0.12% | |||||||||
Ivory Coast Government International Bonds | |||||||||
144A 4.875% 1/30/32 # | EUR | 200,000 | 178,967 | ||||||
144A 6.125% 6/15/33 # | 200,000 | 179,614 | |||||||
144A 6.875% 10/17/40 # | EUR | 100,000 | 88,699 | ||||||
447,280 | |||||||||
Morocco – 0.07% | |||||||||
Morocco Government International Bonds | |||||||||
144A 1.375% 3/30/26 # | EUR | 100,000 | 98,620 | ||||||
144A 2.375% 12/15/27 # | 200,000 | 171,992 | |||||||
270,612 | |||||||||
North Macedonia – 0.03% | |||||||||
North Macedonia Government International Bond | |||||||||
144A 3.675% 6/3/26 # | EUR | 100,000 | 100,041 | ||||||
100,041 | |||||||||
Paraguay – 0.15% | |||||||||
Paraguay Government International Bonds | |||||||||
144A 4.95% 4/28/31 # | 400,000 | 390,778 | |||||||
5.60% 3/13/48 | 200,000 | 175,075 | |||||||
565,853 | |||||||||
Peru – 0.09% | |||||||||
Corp Financiera de Desarrollo 144A 2.40% | |||||||||
9/28/27 # | 200,000 | 173,335 | |||||||
Peruvian Government International Bond 2.392% | |||||||||
1/23/26 | 200,000 | 189,442 | |||||||
362,777 | |||||||||
Romania – 0.01% | |||||||||
Romanian Government International Bond | |||||||||
144A 2.625% 12/2/40 # | EUR | 73,000 | 52,807 | ||||||
52,807 |
24
Principal | |||||||||
amount° | Value (US $) | ||||||||
Sovereign BondsΔ (continued) | |||||||||
Senegal – 0.05% | |||||||||
Senegal Government International Bond | |||||||||
144A 6.25% 5/23/33 # | 200,000 | $ | 175,800 | ||||||
175,800 | |||||||||
South Africa – 0.08% | |||||||||
Republic of South Africa Government International | |||||||||
Bond | |||||||||
5.65% 9/27/47 | 400,000 | 324,488 | |||||||
324,488 | |||||||||
Uruguay – 0.05% | |||||||||
Uruguay Government International Bonds | |||||||||
4.50% 8/14/24 | 53,000 | 54,093 | |||||||
9.875% 6/20/22 | UYU | 5,692,000 | 142,624 | ||||||
196,717 | |||||||||
Uzbekistan – 0.13% | |||||||||
Republic of Uzbekistan International Bonds | |||||||||
144A 3.90% 10/19/31 # | 300,000 | 238,365 | |||||||
144A 4.75% 2/20/24 # | 250,000 | 246,813 | |||||||
485,178 | |||||||||
Total Sovereign Bonds | |||||||||
(cost $6,500,803) | 5,603,680 | ||||||||
Supranational Banks – 0.27% | |||||||||
Banco Latinoamericano de Comercio Exterior | |||||||||
144A 2.375% 9/14/25 # | 250,000 | 233,821 | |||||||
Banque Ouest Africaine de Developpement | |||||||||
144A 4.70% 10/22/31 # | 402,000 | 370,600 | |||||||
Central American Bank For Economic Integration | |||||||||
144A 2.00% 5/6/25 # | 300,000 | 284,986 | |||||||
European Investment Bank | |||||||||
5.50% 1/23/23 | MXN | 3,282,000 | 161,594 | ||||||
Total Supranational Banks | |||||||||
(cost $1,118,618) | 1,051,001 | ||||||||
US Treasury Obligations – 8.65% | |||||||||
US Treasury Bonds | |||||||||
1.75% 8/15/41 | 350,000 | 272,234 | |||||||
1.875% 11/15/51 | 425,000 | 323,930 | |||||||
2.25% 8/15/46 | 1,110,000 | 912,108 |
25
Schedule of investments
Delaware Wealth Builder Fund
Principal | |||||||
amount° | Value (US $) | ||||||
US Treasury Obligations (continued) | |||||||
US Treasury Bonds | |||||||
2.25% 2/15/52 | 245,000 | $ | 204,996 | ||||
2.375% 3/31/29 | 505,000 | 489,100 | |||||
2.375% 2/15/42 | 285,000 | 246,837 | |||||
3.25% 5/15/42 | 145,000 | 144,570 | |||||
4.375% 2/15/38 | 555,000 | 653,274 | |||||
US Treasury Floating Rate Note | |||||||
1.108% (USBMMY3M + -0.02%) 1/31/24 ● | 2,385,000 | 2,388,028 | |||||
US Treasury Notes | |||||||
1.375% 8/31/23 | 19,230,000 | 19,029,437 | |||||
1.375% 11/15/31 | 270,000 | 236,883 | |||||
1.875% 2/28/29 | 665,000 | 624,853 | |||||
1.875% 2/15/32 | 1,010,000 | 925,886 | |||||
2.625% 5/31/27 | 2,500,000 | 2,477,735 | |||||
2.75% 5/15/25 | 4,075,000 | 4,078,820 | |||||
US Treasury Strip Principal | |||||||
2.311% 5/15/44 ^ | 310,000 | 147,131 | |||||
Total US Treasury Obligations | |||||||
(cost $33,268,573) | 33,155,822 | ||||||
Number of | |||||||
shares | |||||||
Common Stocks – 57.20% | |||||||
Banking – 0.00% | |||||||
Banco Espirito Santo =, † | 105,000 | 0 | |||||
0 | |||||||
Communication Services – 3.43% | |||||||
Alphabet Class A † | 282 | 641,618 | |||||
Alphabet Class C † | 379 | 864,415 | |||||
AT&T | 53,239 | 1,133,458 | |||||
Comcast Class A | 51,403 | 2,276,125 | |||||
Interpublic Group | 1,874 | 60,399 | |||||
KDDI | 20,700 | 721,328 | |||||
Meta Platforms Class A † | 1,401 | 271,290 | |||||
Orange | 38,000 | 475,179 | |||||
Publicis Groupe | 7,020 | 383,448 | |||||
Verizon Communications | 74,899 | 3,841,570 | |||||
Walt Disney † | 20,066 | 2,216,089 | |||||
Warner Bros Discovery † | 13,378 | 246,824 | |||||
13,131,743 |
26
Number of | ||||||
shares | Value (US $) | |||||
Common Stocks (continued) | ||||||
Consumer Discretionary – 6.84% | ||||||
adidas AG | 4,180 | $ | 827,753 | |||
Amazon.com † | 579 | 1,392,026 | ||||
Bath & Body Works | 19,989 | 819,949 | ||||
Best Buy | 14,362 | 1,178,546 | ||||
Buckle | 12,950 | 425,537 | ||||
Dollar General | 9,111 | 2,007,518 | ||||
Dollar Tree † | 13,300 | 2,132,389 | ||||
eBay | 11,586 | 563,891 | ||||
Ethan Allen Interiors | 19,482 | 453,151 | ||||
H & M Hennes & Mauritz Class B | 30,990 | 427,186 | ||||
Home Depot | 7,461 | 2,258,818 | ||||
Lowe's | 8,812 | 1,720,984 | ||||
NIKE Class B | 10,284 | 1,222,253 | ||||
PulteGroup | 10,409 | 471,111 | ||||
Ross Stores | 14,158 | 1,203,713 | ||||
Sodexo | 10,770 | 802,874 | ||||
Sturm Ruger & Co. | 5,733 | 389,213 | ||||
Swatch Group | 3,690 | 947,890 | ||||
Tesla † | 780 | 591,443 | ||||
TJX | 62,415 | 3,967,721 | ||||
Tractor Supply | 7,834 | 1,467,778 | ||||
Ulta Beauty † | 2,289 | 968,476 | ||||
26,240,220 | ||||||
Consumer Staples – 3.89% | ||||||
Altria Group | 37,450 | 2,025,671 | ||||
Archer-Daniels-Midland | 24,900 | 2,261,418 | ||||
Asahi Group Holdings | 6,000 | 202,276 | ||||
Conagra Brands | 59,400 | 1,953,666 | ||||
Danone | 12,960 | 761,470 | ||||
Diageo | 23,590 | 1,092,422 | ||||
Essity Class B | 29,720 | 779,675 | ||||
Kao | 17,700 | 714,407 | ||||
Kellogg | 5,942 | 414,395 | ||||
Koninklijke Ahold Delhaize | 27,420 | 756,671 | ||||
Nestle | 10,360 | 1,263,678 | ||||
Philip Morris International | 20,708 | 2,200,225 | ||||
Seven & i Holdings | 11,200 | 470,672 | ||||
14,896,646 |
27
Schedule of investments
Delaware Wealth Builder Fund
Number of | ||||||
shares | Value (US $) | |||||
Common Stocks (continued) | ||||||
Energy – 4.46% | ||||||
Chevron | 7,399 | $ | 1,292,309 | |||
ConocoPhillips | 44,877 | 5,042,380 | ||||
Devon Energy | 16,926 | 1,267,757 | ||||
EOG Resources | 4,921 | 673,980 | ||||
Exxon Mobil | 36,095 | 3,465,120 | ||||
Kinder Morgan | 90,539 | 1,782,713 | ||||
Marathon Petroleum | 15,983 | 1,626,910 | ||||
Viper Energy Partners | 17,898 | 600,657 | ||||
Williams | 36,515 | 1,353,246 | ||||
17,105,072 | ||||||
Financials – 6.87% | ||||||
American Financial Group | 11,481 | 1,622,265 | ||||
American International Group | 36,300 | 2,130,084 | ||||
Ameriprise Financial | 4,349 | 1,201,498 | ||||
BlackRock | 2,272 | 1,520,150 | ||||
Blackstone | 13,171 | 1,551,412 | ||||
Discover Financial Services | 24,869 | 2,822,383 | ||||
Fidelity National Financial | 6,540 | 276,642 | ||||
Invesco | 47,018 | 909,328 | ||||
MetLife | 58,578 | 3,947,572 | ||||
Moelis & Co. Class A | 11,021 | 517,105 | ||||
OneMain Holdings | 1,938 | 85,388 | ||||
Principal Financial Group | 23,738 | 1,731,213 | ||||
Prudential Financial | 15,841 | 1,683,106 | ||||
S&P Global | 2,622 | 916,337 | ||||
Synchrony Financial | 25,478 | 943,705 | ||||
Truist Financial | 43,400 | 2,158,716 | ||||
US Bancorp | 43,800 | 2,324,466 | ||||
26,341,370 | ||||||
Healthcare – 8.97% | ||||||
AbbVie | 18,150 | 2,674,766 | ||||
AmerisourceBergen | 13,719 | 2,123,564 | ||||
Amgen | 1,879 | 482,414 | ||||
Baxter International | 28,900 | 2,197,845 | ||||
Bristol-Myers Squibb | 30,850 | 2,327,633 | ||||
Cigna | 8,200 | 2,199,978 | ||||
CVS Health | 21,900 | 2,118,825 | ||||
Eli Lilly & Co. | 440 | 137,914 | ||||
Fresenius Medical Care AG & Co. | 13,540 | 823,312 | ||||
Gilead Sciences | 9,163 | 594,221 |
28
Number of | ||||||
shares | Value (US $) | |||||
Common Stocks (continued) | ||||||
Healthcare (continued) | ||||||
Hologic † | 27,281 | $ | 2,053,441 | |||
Johnson & Johnson | 30,097 | 5,403,314 | ||||
Merck & Co. | 46,370 | 4,267,431 | ||||
Molina Healthcare † | 3,087 | 895,909 | ||||
Novo Nordisk Class B | 8,930 | 989,280 | ||||
Pfizer | 46,961 | 2,490,811 | ||||
Roche Holding | 2,230 | 758,832 | ||||
Smith & Nephew | 71,220 | 1,160,394 | ||||
UnitedHealth Group | 1,371 | 681,085 | ||||
34,380,969 | ||||||
Industrials – 3.19% | ||||||
Dover | 15,917 | 2,131,446 | ||||
Honeywell International | 10,933 | 2,116,847 | ||||
Intertek Group | 8,870 | 518,058 | ||||
Knorr-Bremse | 5,620 | 383,600 | ||||
Lockheed Martin | 3,458 | 1,521,900 | ||||
Makita | 16,100 | 440,597 | ||||
Northrop Grumman | 4,700 | 2,199,459 | ||||
Raytheon Technologies | 23,079 | 2,195,275 | ||||
Securitas Class B | 66,940 | 713,889 | ||||
12,221,071 | ||||||
Information Technology – 13.10% | ||||||
Adobe † | 1,547 | 644,295 | ||||
Advanced Micro Devices † | 7,221 | 735,531 | ||||
Amadeus IT Group † | 19,910 | 1,236,294 | ||||
Apple | 55,731 | 8,295,002 | ||||
Applied Materials | 5,803 | 680,634 | ||||
Broadcom | 7,639 | 4,431,613 | ||||
Cisco Systems | 72,931 | 3,285,542 | ||||
Cognizant Technology Solutions Class A | 28,732 | 2,146,280 | ||||
Dropbox Class A † | 23,219 | 483,884 | ||||
Fidelity National Information Services | 21,763 | 2,274,234 | ||||
HP | 48,886 | 1,898,732 | ||||
International Business Machines | 3,440 | 477,610 | ||||
KLA | 1,905 | 695,039 | ||||
Lam Research | 2,748 | 1,429,042 | ||||
Microsoft | 28,315 | 7,697,999 | ||||
Monolithic Power Systems | 3,252 | 1,464,668 | ||||
Motorola Solutions | 10,000 | 2,197,400 | ||||
NetApp | 19,368 | 1,393,528 |
29
Schedule of investments
Delaware Wealth Builder Fund
Number of | ||||||
shares | Value (US $) | |||||
Common Stocks (continued) | ||||||
Information Technology (continued) | ||||||
NVIDIA | 4,536 | $ | 846,962 | |||
Oracle | 29,700 | 2,136,024 | ||||
Paychex | 14,052 | 1,740,059 | ||||
Paycom Software † | 1,094 | 311,068 | ||||
QUALCOMM | 11,474 | 1,643,306 | ||||
SAP | 7,490 | 746,114 | ||||
Western Union | 74,326 | 1,348,274 | ||||
50,239,134 | ||||||
Materials – 1.33% | ||||||
Air Liquide | 6,530 | 1,141,554 | ||||
CF Industries Holdings | 5,789 | 571,780 | ||||
Dow | 17,036 | 1,158,107 | ||||
DuPont de Nemours | 32,700 | 2,218,695 | ||||
5,090,136 | ||||||
Media – 0.00% | ||||||
Century Communications =, † | 1,625,000 | 0 | ||||
0 | ||||||
REIT Diversified – 0.49% | ||||||
Gaming and Leisure Properties | 3,321 | 155,489 | ||||
LXP Industrial Trust | 6,647 | 76,839 | ||||
New Residential Investment | 48,444 | 547,417 | ||||
VICI Properties | 35,469 | 1,094,219 | ||||
1,873,964 | ||||||
REIT Healthcare – 0.42% | ||||||
Alexandria Real Estate Equities | 1,955 | 324,432 | ||||
CareTrust REIT | 3,314 | 61,408 | ||||
Healthcare Trust of America Class A | 5,531 | 166,207 | ||||
Healthpeak Properties | 2,001 | 59,410 | ||||
Medical Properties Trust | 2,777 | 51,597 | ||||
Omega Healthcare Investors | 13,300 | 395,941 | ||||
Ventas | 1,993 | 113,083 | ||||
Welltower | 4,769 | 424,870 | ||||
1,596,948 | ||||||
REIT Hotel – 0.08% | ||||||
Apple Hospitality REIT | 11,940 | 199,518 | ||||
Chatham Lodging Trust † | 6,961 | 88,683 | ||||
Host Hotels & Resorts | 1,699 | 33,963 | ||||
322,164 |
30
Number of | ||||||
shares | Value (US $) | |||||
Common Stocks (continued) | ||||||
REIT Industrial – 0.43% | ||||||
Duke Realty | 6,010 | $ | 317,508 | |||
Plymouth Industrial REIT | 1,645 | 33,410 | ||||
Prologis | 8,649 | 1,102,575 | ||||
Rexford Industrial Realty | 1,485 | 94,847 | ||||
Terreno Realty | 1,637 | 99,382 | ||||
1,647,722 | ||||||
REIT Information Technology – 0.23% | ||||||
Digital Realty Trust | 2,624 | 366,284 | ||||
Equinix | 778 | 534,556 | ||||
900,840 | ||||||
REIT Mall – 0.08% | ||||||
Simon Property Group | 2,577 | 295,453 | ||||
295,453 | ||||||
REIT Manufactured Housing – 0.12% | ||||||
Equity LifeStyle Properties | 2,176 | 164,723 | ||||
Sun Communities | 1,727 | 283,453 | ||||
448,176 | ||||||
REIT Multifamily – 0.99% | ||||||
American Campus Communities | 612 | 39,780 | ||||
American Homes 4 Rent Class A | 3,230 | 119,381 | ||||
Apartment Income REIT | 671 | 30,101 | ||||
AvalonBay Communities | 1,358 | 282,409 | ||||
Camden Property Trust | 1,286 | 184,528 | ||||
Equity Residential | 32,623 | 2,506,425 | ||||
Essex Property Trust | 1,141 | 323,873 | ||||
Independence Realty Trust | 5,765 | 135,535 | ||||
Mid-America Apartment Communities | 821 | 148,601 | ||||
NexPoint Residential Trust | 112 | 8,230 | ||||
UDR | 741 | 35,420 | ||||
3,814,283 | ||||||
REIT Office – 0.15% | ||||||
Boston Properties | 392 | 43,583 | ||||
City Office REIT | 888 | 12,379 | ||||
Cousins Properties | 4,822 | 166,600 | ||||
Douglas Emmett | 987 | 27,902 | ||||
Highwoods Properties | 4,028 | 158,260 | ||||
Kilroy Realty | 1,579 | 95,845 | ||||
Piedmont Office Realty Trust Class A | 5,240 | 77,238 | ||||
581,807 |
31
Schedule of investments
Delaware Wealth Builder Fund
Number of | ||||||
shares | Value (US $) | |||||
Common Stocks (continued) | ||||||
REIT Self-Storage – 0.36% | ||||||
CubeSmart | 2,044 | $ | 91,019 | |||
Extra Space Storage | 1,940 | 345,708 | ||||
Life Storage | 1,995 | 232,936 | ||||
National Storage Affiliates Trust | 2,053 | 107,680 | ||||
Public Storage | 1,869 | 617,966 | ||||
1,395,309 | ||||||
REIT Shopping Center – 0.32% | ||||||
Agree Realty | 1,749 | 121,678 | ||||
Brixmor Property Group | 9,471 | 230,903 | ||||
Kimco Realty | 6,355 | 150,296 | ||||
Kite Realty Group Trust | 5,619 | 117,774 | ||||
Phillips Edison & Co. | 5,157 | 173,997 | ||||
Regency Centers | 2,253 | 153,677 | ||||
Retail Opportunity Investments | 8,919 | 161,166 | ||||
SITE Centers | 6,333 | 99,555 | ||||
Urban Edge Properties | 1,476 | 27,823 | ||||
Washington Prime Group =, † | 962 | 0 | ||||
1,236,869 | ||||||
REIT Single Tenant – 0.19% | ||||||
Four Corners Property Trust | 2,338 | 64,459 | ||||
National Retail Properties | 825 | 36,547 | ||||
Realty Income | 4,560 | 311,083 | ||||
Spirit Realty Capital | 3,546 | 148,897 | ||||
STORE Capital | 5,397 | 148,903 | ||||
709,889 | ||||||
REIT Specialty – 0.31% | ||||||
EPR Properties | 375 | 19,215 | ||||
Essential Properties Realty Trust | 4,005 | 91,634 | ||||
Invitation Homes | 9,175 | 346,081 | ||||
Iron Mountain | 10,984 | 592,038 | ||||
Lamar Advertising Class A | 538 | 52,697 | ||||
Outfront Media | 539 | 11,119 | ||||
WP Carey | 948 | 79,765 | ||||
1,192,549 | ||||||
Utilities – 0.95% | ||||||
Edison International | 32,500 | 2,272,075 | ||||
NRG Energy | 3,074 | 141,527 |
32
Number of | |||||||
shares | Value (US $) | ||||||
Common Stocks (continued) | |||||||
Utilities (continued) | |||||||
Vistra | 46,299 | $ | 1,220,905 | ||||
3,634,507 | |||||||
Total Common Stocks | |||||||
(cost $197,018,748) | 219,296,841 | ||||||
Convertible Preferred Stock – 1.42% | |||||||
2020 Mandatory Exchangeable Trust 144A 6.50% | |||||||
exercise price $47.09, maturity date 5/16/23 # | 484 | 308,690 | |||||
Algonquin Power & Utilities 7.75% exercise price | |||||||
$18.00, maturity date 6/15/24 | 9,623 | 443,717 | |||||
AMG Capital Trust II 5.15% exercise price | |||||||
$195.47, maturity date 10/15/37 | 7,700 | 390,313 | |||||
Bank of America 7.25% exercise price $50.00 ω | 522 | 657,605 | |||||
El Paso Energy Capital Trust I 4.75% exercise | |||||||
price $34.49, maturity date 3/31/28 | 17,178 | 845,329 | |||||
Elanco Animal Health 5.00% exercise price | |||||||
$38.40, maturity date 2/1/23 | 12,144 | 461,472 | |||||
Lyondellbasell Advanced Polymers 6.00% | |||||||
exercise price $52.33 ω | 612 | 483,480 | |||||
RBC Bearings 5.00% exercise price $226.60, | |||||||
maturity date 10/15/24 | 6,211 | 605,573 | |||||
UGI 7.25% exercise price $52.57, maturity date | |||||||
6/1/24 | 8,447 | 849,346 | |||||
Wells Fargo & Co. 7.50% exercise price | |||||||
$156.71 ω | 305 | 386,435 | |||||
Total Convertible Preferred Stock | |||||||
(cost $5,836,579) | 5,431,960 | ||||||
Exchange-Traded Funds – 2.57% | |||||||
iShares Global Infrastructure ETF | 184,522 | 9,432,765 | |||||
iShares MSCI EAFE ETF | 270 | 18,903 | |||||
iShares Trust iShares ESG Aware MSCI EAFE ETF | 3,530 | 247,523 | |||||
Vanguard FTSE Developed Markets ETF | 3,070 | 139,716 | |||||
Total Exchange-Traded Funds | |||||||
(cost $9,091,195) | 9,838,907 |
33
Schedule of investments
Delaware Wealth Builder Fund
Number of | |||||||
shares | Value (US $) | ||||||
Limited Partnerships – 1.77% | |||||||
Merion The Ledges=, †, π | 4,200,000 | $ | 6,798,960 | ||||
Total Limited Partnerships | |||||||
(cost $2,922,326) | 6,798,960 | ||||||
Principal | |||||||
amount° | |||||||
Leveraged Non-Recourse Security – 0.00% | |||||||
JPMorgan Fixed Income Pass Through Trust | |||||||
Auction | |||||||
Series 2007-B 144A 0.251% 1/15/87 #, ◆ | 1,300,000 | 1,300 | |||||
Total Leveraged Non-Recourse Security | |||||||
(cost $1,105,000) | 1,300 | ||||||
Number of | |||||||
contracts | |||||||
Options Purchased – 0.00% | |||||||
Futures Put Options – 0.00% | |||||||
E-mini S&P 500 Index strike price $4,740, | |||||||
expiration date 6/17/22, notional amount | |||||||
$237,000 | |||||||
(Exchange-Traded) | 1 | 12 | |||||
Total Options Purchased | |||||||
(premiums paid $1,825) | 12 | ||||||
Number of | |||||||
shares | |||||||
Short-Term Investments – 2.39% | |||||||
Money Market Mutual Funds – 2.39% | |||||||
BlackRock FedFund – Institutional Shares | |||||||
(seven-day effective yield 0.72%) | 2,287,643 | 2,287,643 | |||||
Fidelity Investments Money Market Government | |||||||
Portfolio – Class I (seven-day effective yield | |||||||
0.60%) | 2,287,643 | 2,287,643 | |||||
GS Financial Square Government Fund – | |||||||
Institutional Shares (seven-day effective yield | |||||||
0.71%) | 2,287,643 | 2,287,643 |
34
Number of | ||||||||
shares | Value (US $) | |||||||
Short-Term Investments (continued) | ||||||||
Money Market Mutual Funds (continued) | ||||||||
Morgan Stanley Government Portfolio – | ||||||||
Institutional Share Class (seven-day effective | ||||||||
yield 0.71%) | 2,287,643 | $ | 2,287,643 | |||||
Total Short-Term Investments | ||||||||
(cost $9,150,572) | 9,150,572 | |||||||
Total Value of Securities Before | ||||||||
Options Written–99.50% | ||||||||
(cost $362,469,147) | 381,467,378 | |||||||
Number of | ||||||||
contracts | ||||||||
Options Written – (0.00)% | ||||||||
Futures Call Options – (0.00)% | ||||||||
E-mini S&P 500 Index strike price $4,640, | ||||||||
expiration date 6/17/22, notional | ||||||||
amount ($232,000) | ||||||||
(Exchange-Traded) | (1) | (25 | ) | |||||
Total Options Written | ||||||||
(premiums received $3,625) | (25 | ) | ||||||
Total Value of Securities–99.50% | ||||||||
(cost $362,465,522) | $ | 381,467,353 |
° | Principal amount shown is stated in USD unless noted that the security is denominated in another currency. |
ω | Perpetual security with no stated maturity date. |
# | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At May 31, 2022, the aggregate value of Rule 144A securities was $35,328,397, which represents 9.21% of the Fund's net assets. See Note 9 in “Notes to financial statements." |
● | Variable rate investment. Rates reset periodically. Rate shown reflects the rate in effect at May 31, 2022. 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. |
35
Schedule of investments
Delaware Wealth Builder Fund
µ | Fixed to variable rate investment. The rate shown reflects the fixed rate in effect at May 31, 2022. Rate will reset at a future date. |
ψ | Perpetual security. Maturity date represents next call date. |
> | PIK. 100% of the income received was in the form of cash. |
Δ | Securities have been classified by country of risk. |
= | 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.” |
† | Non-income producing security. |
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 May 31, 2022, the aggregate value of restricted securities was $6,798,960, which represented 1.77% of the Fund’s net assets. See table on the next page 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 The Ledges | 9/26/18 | $ | 2,603,490 | $ | 6,187,054 | |||||
Merion The Ledges | 9/12/19 | 109,975 | 239,963 | |||||||
Merion The Ledges | 2/1/21 | 106,500 | 199,970 | |||||||
Merion The Ledges | 1/5/22 | 102,361 | 171,973 | |||||||
Total | $ | 2,922,326 | $ | 6,798,960 |
The following foreign currency exchange contracts, futures contracts, and swap contracts were outstanding at May 31, 2022:1
Foreign Currency Exchange Contracts
Currency to | Settlement | Unrealized | Unrealized | ||||||||||||||||
Counterparty | Receive (Deliver) | In Exchange For | Date | Appreciation | Depreciation | ||||||||||||||
BNYM | CHF | (13,191 | ) | USD | 13,772 | 6/1/22 | $ | 19 | $ | – | |||||||||
BNYM | CHF | (4,674 | ) | USD | 4,870 | 6/2/22 | – | (7 | ) | ||||||||||
BNYM | GBP | (4,402 | ) | USD | 5,543 | 6/6/22 | – | (4 | ) | ||||||||||
CITI | COP | (829,388,000 | ) | USD | 216,023 | 6/24/22 | – | (3,296 | ) | ||||||||||
JPMCB | BRL | (1,525,973 | ) | USD | 307,749 | 6/24/22 | – | (11,061 | ) | ||||||||||
JPMCB | CLP | 112,187,050 | USD | (141,955 | ) | 6/24/22 | – | (6,280 | ) | ||||||||||
JPMCB | EUR | (652,526 | ) | USD | 718,278 | 6/24/22 | 18,342 | – | |||||||||||
JPMCB | MXN | (3,308,777 | ) | USD | 161,995 | 6/24/22 | – | (5,283 | ) | ||||||||||
Total Foreign Currency Exchange Contracts | $ | 18,361 | $ | (25,931 | ) |
36
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 | |||||||||||||||||
E-mini | |||||||||||||||||||||||
S&P | |||||||||||||||||||||||
2 | 500 Index | $ | 413,125 | $ | 449,630 | 6/17/22 | $ | – | $ | (36,505 | ) | $ | (2,450 | ) | |||||||||
US | |||||||||||||||||||||||
Treasury | |||||||||||||||||||||||
5 yr | |||||||||||||||||||||||
14 | Notes | 1,581,344 | 1,576,565 | 9/30/22 | 4,779 | – | (5,141 | ) | |||||||||||||||
US | |||||||||||||||||||||||
Treasury | |||||||||||||||||||||||
10 yr | |||||||||||||||||||||||
(10) | Notes | (1,194,531 | ) | (1,192,007 | ) | 9/21/22 | – | (2,524 | ) | 6,875 | |||||||||||||
US | |||||||||||||||||||||||
Treasury | |||||||||||||||||||||||
10 yr | |||||||||||||||||||||||
Ultra | |||||||||||||||||||||||
(3) | Notes | (385,453 | ) | (384,813 | ) | 9/21/22 | – | (640 | ) | 3,234 | |||||||||||||
Total Futures Contracts | $ | 449,375 | $ | 4,779 | $ | (39,669 | ) | $ | 2,518 |
37
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) | Depreciation4 | 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 | % | $ | 11,187 | $ | 16,858 | $ | (5,671 | ) | $ | – | |||||||||
Total CDS Contracts | $ | 11,187 | $ | 16,858 | $ | (5,671 | ) | $ | – |
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 the 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 6 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. |
4 | Unrealized appreciation (depreciation) does not include periodic interest payments (receipt) on swap contracts accrued daily in the amount of $(718). |
38
Summary of abbreviations:
AG – Aktiengesellschaft
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
JSC – Joint Stock Company
LIBOR – London Interbank Offered Rate
LIBOR03M – ICE LIBOR USD 3 Month
LIBOR06M – ICE LIBOR USD 6 Month
MSCI – Morgan Stanley Capital International
PIK – Payment-in-kind
REIT – Real Estate Investment Trust
S&P – Standard & Poor’s Financial Services LLC
S.F. – Single Family
SOFR – Secured Overnight Financing Rate
USBMMY3M – US Treasury 3 Month Bill Money Market Yield
yr – Year
Summary of currencies:
BRL – Brazilian Real
CHF – Swiss Franc
CLP – Chilean Peso
COP – Colombian Peso
EUR – European Monetary Unit
GBP – British Pound Sterling
IDR – Indonesian Rupiah
39
Schedule of investments
Delaware Wealth Builder Fund
Summary of currencies: (continued)
KZT – Kazakhstani Tenge
MXN – Mexican Peso
USD – US Dollar
UYU – Uruguayan Peso
See accompanying notes, which are an integral part of the financial statements.
40
Statement of assets and liabilities | |
Delaware Wealth Builder Fund | May 31, 2022 (Unaudited) |
Assets: | |||||
Investments, at value* | $381,467,378 | ||||
Cash | 1,317,455 | ||||
Cash collateral due from brokers | 39,911 | ||||
Foreign currencies, at valueΔ | 97,456 | ||||
Dividends and interest receivable | 1,440,257 | ||||
Receivable for fund shares sold | 272,575 | ||||
Foreign tax reclaims receivable | 240,819 | ||||
Unrealized appreciation on foreign currency exchange contracts | 18,361 | ||||
Upfront payments paid on over the counter credit default swap contracts | 16,858 | ||||
Receivable for securities sold | 5,602 | ||||
Variation margin due from broker on futures contracts | 2,518 | ||||
Other assets | 2,853 | ||||
Total Assets | 384,922,043 | ||||
Liabilities: | |||||
Options written, at valueΣ | 25 | ||||
Payable for securities purchased | 725,856 | ||||
Payable for fund shares redeemed | 320,626 | ||||
Investment management fees payable to affiliates | 190,466 | ||||
Other accrued expenses | 76,812 | ||||
Distribution fees payable to affiliates | 73,175 | ||||
Dividend disbursing and transfer agent fees and expenses payable to | |||||
non-affiliates | 59,153 | ||||
Reports and statements to shareholders expenses payable to non-affiliates | 27,606 | ||||
Unrealized depreciation on foreign currency exchange contracts | 25,931 | ||||
Custody fees payable | 21,319 | ||||
Unrealized depreciation on over the counter credit default swap contracts | 5,671 | ||||
Dividend disbursing and transfer agent fees and expenses payable to | |||||
affiliates | 3,121 | ||||
Trustees' fees and expenses payable to affiliates | 2,725 | ||||
Accounting and administration expenses payable to affiliates | 1,248 | ||||
Swap payments payable | 718 | ||||
Legal fees payable to affiliates | 505 | ||||
Reports and statements to shareholders expenses payable to affiliates | 223 | ||||
Distribution payable | 1 | ||||
Total Liabilities | 1,535,181 | ||||
Total Net Assets | $ | 383,386,862 |
41
Statement of assets and liabilities
Delaware Wealth Builder Fund
Net Assets Consist of: | |||||
Paid-in capital | $ | 349,553,495 | |||
Total distributable earnings (loss) | 33,833,367 | ||||
Total Net Assets | $ | 383,386,862 | |||
Net Asset Value | |||||
Class A: | |||||
Net assets | $ | 244,933,464 | |||
Shares of beneficial interest outstanding, unlimited authorization, no par | 16,728,095 | ||||
Net asset value per share | $ | 14.64 | |||
Sales charge | 5.75 | % | |||
Offering price per share, equal to net asset value per share / (1 - sales | |||||
charge) | $ | 15.53 | |||
Class C: | |||||
Net assets | $ | 25,338,463 | |||
Shares of beneficial interest outstanding, unlimited authorization, no par | 1,725,776 | ||||
Net asset value per share | $ | 14.68 | |||
Class R: | |||||
Net assets | $ | 1,149,467 | |||
Shares of beneficial interest outstanding, unlimited authorization, no par | 78,473 | ||||
Net asset value per share | $ | 14.65 | |||
Institutional Class: | |||||
Net assets | $ | 111,965,468 | |||
Shares of beneficial interest outstanding, unlimited authorization, no par | 7,649,345 | ||||
Net asset value per share | $ | 14.64 | |||
____________________ | |||||
*Investments, at cost | $ | 362,469,147 | |||
ΔForeign currencies, at cost | 96,978 | ||||
ΣOptions written, premium received | (3,625 | ) |
See accompanying notes, which are an integral part of the financial statements.
42
Statement of operations | |
Delaware Wealth Builder Fund | Six months ended May 31, 2022 (Unaudited) |
Investment Income: | |||||
Dividends | $ | 3,603,866 | |||
Interest | 1,562,163 | ||||
Foreign tax withheld | (57,927 | ) | |||
5,108,102 | |||||
Expenses: | |||||
Management fees | 1,297,092 | ||||
Distribution expenses — Class A | 318,726 | ||||
Distribution expenses — Class C | 143,157 | ||||
Distribution expenses — Class R | 2,903 | ||||
Dividend disbursing and transfer agent fees and expenses | 190,650 | ||||
Accounting and administration expenses | 46,425 | ||||
Reports and statements to shareholders expenses | 36,233 | ||||
Registration fees | 35,581 | ||||
Audit and tax fees | 28,248 | ||||
Custodian fees | 19,628 | ||||
Legal fees | 11,896 | ||||
Trustees’ fees and expenses | 6,908 | ||||
Other | 46,997 | ||||
2,184,444 | |||||
Less expenses waived | (61,496 | ) | |||
Less expenses paid indirectly | (189 | ) | |||
Total operating expenses | 2,122,759 | ||||
Net Investment Income | 2,985,343 |
43
Statement of operations
Delaware Wealth Builder Fund
Net Realized and Unrealized Gain (Loss): | ||||||
Net realized gain (loss) on: | ||||||
Investments | $ | 16,490,679 | ||||
Foreign currencies | (97,257 | ) | ||||
Foreign currency exchange contracts | 4,249 | |||||
Futures contracts | 44,852 | |||||
Swap contracts | 19,486 | |||||
Net realized gain | 16,462,009 | |||||
Net change in unrealized appreciation (depreciation) of: | ||||||
Investments | (22,409,147 | ) | ||||
Foreign currencies | (5,156 | ) | ||||
Foreign currency exchange contracts | 4,425 | |||||
Futures contracts | (17,437 | ) | ||||
Options purchased | (1,813 | ) | ||||
Options written | 3,600 | |||||
Swap contracts | (9,517 | ) | ||||
Net change in unrealized appreciation (depreciation) | (22,435,045 | ) | ||||
Net Realized and Unrealized Loss | (5,973,036 | ) | ||||
Net Decrease in Net Assets Resulting from Operations | $ | (2,987,693 | ) |
See accompanying notes, which are an integral part of the financial statements.
44
Statements of changes in net assets
Delaware Wealth Builder Fund
Six months | ||||||||||
ended | ||||||||||
5/31/22 | Year ended | |||||||||
(Unaudited) | 11/30/21 | |||||||||
Increase (Decrease) in Net Assets from Operations: | ||||||||||
Net investment income | $ | 2,985,343 | $ | 5,672,026 | ||||||
Net realized gain | 16,462,009 | 45,963,109 | ||||||||
Net change in unrealized appreciation (depreciation) | (22,435,045 | ) | 11,714,571 | |||||||
Net increase (decrease) in net assets resulting from | ||||||||||
operations | (2,987,693 | ) | 63,349,706 | |||||||
Dividends and Distributions to Shareholders from: | ||||||||||
Distributable earnings: | ||||||||||
Class A | (15,785,982 | ) | (4,472,643 | ) | ||||||
Class C | (1,766,588 | ) | (413,930 | ) | ||||||
Class R | (67,953 | ) | (17,848 | ) | ||||||
Institutional Class | (7,208,891 | ) | (2,376,293 | ) | ||||||
(24,829,414 | ) | (7,280,714 | ) | |||||||
Capital Share Transactions: | ||||||||||
Proceeds from shares sold: | ||||||||||
Class A | 9,767,776 | 29,284,365 | ||||||||
Class C | 1,028,586 | 2,871,756 | ||||||||
Class R | 175,580 | 609,847 | ||||||||
Institutional Class | 7,137,025 | 9,949,959 | ||||||||
Net asset value of shares issued upon reinvestment of | ||||||||||
dividends and distributions: | ||||||||||
Class A | 15,028,487 | 4,196,391 | ||||||||
Class C | 1,757,733 | 409,216 | ||||||||
Class R | 66,324 | 17,590 | ||||||||
Institutional Class | 6,720,940 | 2,154,866 | ||||||||
41,682,451 | 49,493,990 |
45
Statements of changes in net assets
Delaware Wealth Builder Fund
Six months | ||||||||||
ended | ||||||||||
5/31/22 | Year ended | |||||||||
(Unaudited) | 11/30/21 | |||||||||
Capital Share Transactions (continued): | ||||||||||
Cost of shares redeemed: | ||||||||||
Class A | $ | (21,308,903 | ) | $ | (38,302,279 | ) | ||||
Class C | (6,585,454 | ) | (30,379,895 | ) | ||||||
Class R | (217,017 | ) | (651,199 | ) | ||||||
Institutional Class | (10,495,912 | ) | (28,184,418 | ) | ||||||
(38,607,286 | ) | (97,517,791 | ) | |||||||
Increase (decrease) in net assets derived from capital | ||||||||||
share transactions | 3,075,165 | (48,023,801 | ) | |||||||
Net Increase (Decrease) in Net Assets | (24,741,942 | ) | 8,045,191 | |||||||
Net Assets: | ||||||||||
Beginning of period | 408,128,804 | 400,083,613 | ||||||||
End of period | $ | 383,386,862 | $ | 408,128,804 |
See accompanying notes, which are an integral part of the financial statements.
46
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 income2 |
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 return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets6, 7 |
Ratio of expenses to average net assets prior to fees waived6 |
Ratio of net investment income to average net assets8 |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
1 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
2 | Calculated using average shares outstanding. |
3 | 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. |
4 | Total return during the period reflects waiver by the manager. Performance would have been lower had the waiver not been in effect. |
5 | General Motors term loan litigation were included in total return. If excluded, the impact on the total return would be 0.11% lower. |
6 | Expense ratios do not include expenses of the Underlying Funds in which the Fund invests. |
7 | 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. |
8 | 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.
48
Six months ended | ||||||||||||||||||||||||
5/31/221 | Year ended | |||||||||||||||||||||||
(Unaudited) | 11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | |||||||||||||||||||
$ | 15.71 | $ | 13.71 | $ | 14.01 | $ | 14.15 | $ | 14.62 | $ | 13.64 | |||||||||||||
0.11 | 0.21 | 0.25 | 0.53 | 0.35 | 0.36 | |||||||||||||||||||
(0.22 | ) | 2.06 | (0.09 | ) | 0.50 | (0.43 | ) | 0.98 | ||||||||||||||||
(0.11 | ) | 2.27 | 0.16 | 1.03 | (0.08 | ) | 1.34 | |||||||||||||||||
(0.13 | ) | (0.27 | ) | (0.27 | ) | (0.35 | ) | (0.34 | ) | (0.36 | ) | |||||||||||||
(0.83 | ) | — | (0.19 | ) | (0.82 | ) | (0.05 | ) | — | |||||||||||||||
(0.96 | ) | (0.27 | ) | (0.46 | ) | (1.17 | ) | (0.39 | ) | (0.36 | ) | |||||||||||||
$ | 14.64 | $ | 15.71 | $ | 13.71 | $ | 14.01 | $ | 14.15 | $ | 14.62 | |||||||||||||
(0.89% | )4 | 16.63% | 4 | 1.30% | 4 | 8.30% | 5 | (0.56% | ) | 9.90% | ||||||||||||||
$ | 244,933 | $ | 259,143 | $ | 230,168 | $ | 259,283 | $ | 273,384 | $ | 256,157 | |||||||||||||
1.08% | 1.08% | 1.09% | 1.09% | 1.09% | 1.09% | |||||||||||||||||||
1.11% | 1.11% | 1.12% | 1.09% | 1.09% | 1.09% | |||||||||||||||||||
1.48% | 1.37% | 1.91% | 3.91% | 2.41% | 2.51% | |||||||||||||||||||
1.45% | 1.34% | 1.88% | 3.91% | 2.41% | 2.51% | |||||||||||||||||||
38% | 89% | 68% | 91% | 57% | 81% |
49
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 income2 |
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 return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets6, 7 |
Ratio of expenses to average net assets prior to fees waived6 |
Ratio of net investment income to average net assets8 |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
1 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
2 | Calculated using average shares outstanding. |
3 | 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. |
4 | Total return during the period reflects waiver by the manager. Performance would have been lower had the waiver not been in effect. |
5 | General Motors term loan litigation were included in total return. If excluded, the impact on the total return would be 0.11% lower. |
6 | Expense ratios do not include expenses of the Underlying Funds in which the Fund invests. |
7 | 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. |
8 | 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.
50
Six months ended | |||||||||||||||||||||||||
5/31/221 | Year ended | ||||||||||||||||||||||||
(Unaudited) | 11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | ||||||||||||||||||||
$ | 15.75 | $ | 13.73 | $ | 14.04 | $ | 14.18 | $ | 14.65 | $ | 13.66 | ||||||||||||||
0.05 | 0.09 | 0.15 | 0.43 | 0.24 | 0.25 | ||||||||||||||||||||
(0.22 | ) | 2.08 | (0.10 | ) | 0.49 | (0.43 | ) | 0.99 | |||||||||||||||||
(0.17 | ) | 2.17 | 0.05 | 0.92 | (0.19 | ) | 1.24 | ||||||||||||||||||
(0.07 | ) | (0.15 | ) | (0.17 | ) | (0.24 | ) | (0.23 | ) | (0.25 | ) | ||||||||||||||
(0.83 | ) | — | (0.19 | ) | (0.82 | ) | (0.05 | ) | — | ||||||||||||||||
(0.90 | ) | (0.15 | ) | (0.36 | ) | (1.06 | ) | (0.28 | ) | (0.25 | ) | ||||||||||||||
$ | 14.68 | $ | 15.75 | $ | 13.73 | $ | 14.04 | $ | 14.18 | $ | 14.65 | ||||||||||||||
(1.27% | ) | 4 | 15.84% | 4 | 0.47% | 4 | 7.46% | 5 | (1.34% | ) | 9.13% | ||||||||||||||
$ | 25,338 | $ | 31,157 | $ | 52,258 | $ | 95,672 | $ | 137,403 | $ | 225,604 | ||||||||||||||
1.83% | 1.83% | 1.84% | 1.84% | 1.84% | 1.84% | ||||||||||||||||||||
1.86% | 1.86% | 1.87% | 1.84% | 1.84% | 1.84% | ||||||||||||||||||||
0.73% | 0.62% | 1.16% | 3.17% | 1.66% | 1.76% | ||||||||||||||||||||
0.70% | 0.59% | 1.13% | 3.17% | 1.66% | 1.76% | ||||||||||||||||||||
38% | 89% | 68% | 91% | 57% | 81% |
51
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 income2 |
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 return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets6, 7 |
Ratio of expenses to average net assets prior to fees waived6 |
Ratio of net investment income to average net assets8 |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
1 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
2 | Calculated using average shares outstanding. |
3 | 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. |
4 | Total return during the period reflects waiver by the manager. Performance would have been lower had the waiver not been in effect. |
5 | General Motors term loan litigation were included in total return. If excluded, the impact on the total return would be 0.11% lower. |
6 | Expense ratios do not include expenses of the Underlying Funds in which the Fund invests. |
7 | 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. |
8 | 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.
52
Six months ended | |||||||||||||||||||||||||
5/31/221 | Year ended | ||||||||||||||||||||||||
(Unaudited) | 11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | ||||||||||||||||||||
$ | 15.71 | $ | 13.71 | $ | 14.02 | $ | 14.16 | $ | 14.62 | $ | 13.63 | ||||||||||||||
0.09 | 0.17 | 0.21 | 0.49 | 0.31 | 0.32 | ||||||||||||||||||||
(0.21 | ) | 2.06 | (0.09 | ) | 0.50 | (0.42 | ) | 0.99 | |||||||||||||||||
(0.12 | ) | 2.23 | 0.12 | 0.99 | (0.11 | ) | 1.31 | ||||||||||||||||||
(0.11 | ) | (0.23 | ) | (0.24 | ) | (0.31 | ) | (0.30 | ) | (0.32 | ) | ||||||||||||||
(0.83 | ) | — | (0.19 | ) | (0.82 | ) | (0.05 | ) | — | ||||||||||||||||
(0.94 | ) | (0.23 | ) | (0.43 | ) | (1.13 | ) | (0.35 | ) | (0.32 | ) | ||||||||||||||
$ | 14.65 | $ | 15.71 | $ | 13.71 | $ | 14.02 | $ | 14.16 | $ | 14.62 | ||||||||||||||
(0.95% | ) | 4 | 16.32% | 4 | 0.99% | 4 | 8.02% | 5 | (0.78% | ) | 9.70% | ||||||||||||||
$ | 1,150 | $ | 1,203 | $ | 1,069 | $ | 1,288 | $ | 1,968 | $ | 2,320 | ||||||||||||||
1.33% | 1.33% | 1.34% | 1.34% | 1.34% | 1.34% | ||||||||||||||||||||
1.36% | 1.36% | 1.37% | 1.34% | 1.34% | 1.34% | ||||||||||||||||||||
1.23% | 1.12% | 1.66% | 3.66% | 2.16% | 2.26% | ||||||||||||||||||||
1.20% | 1.09% | 1.63% | 3.66% | 2.16% | 2.26% | ||||||||||||||||||||
38% | 89% | 68% | 91% | 57% | 81% |
53
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 income2 |
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 return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets6, 7 |
Ratio of expenses to average net assets prior to fees waived6 |
Ratio of net investment income to average net assets8 |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
1 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
2 | Calculated using average shares outstanding. |
3 | 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. |
4 | Total return during the period reflects waiver by the manager. Performance would have been lower had the waiver not been in effect. |
5 | General Motors term loan litigation were included in total return. If excluded, the impact on the total return would be 0.11% lower. |
6 | Expense ratios do not include expenses of the Underlying Funds in which the Fund invests. |
7 | 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. |
8 | 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.
54
Six months ended | |||||||||||||||||||||||||
5/31/221 | Year ended | ||||||||||||||||||||||||
(Unaudited) | 11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | ||||||||||||||||||||
$ | 15.70 | $ | 13.70 | $ | 14.01 | $ | 14.15 | $ | 14.63 | $ | 13.64 | ||||||||||||||
0.13 | 0.25 | 0.28 | 0.56 | 0.38 | 0.39 | ||||||||||||||||||||
(0.21 | ) | 2.05 | (0.10 | ) | 0.50 | (0.43 | ) | 0.99 | |||||||||||||||||
(0.08 | ) | 2.30 | 0.18 | 1.06 | (0.05 | ) | 1.38 | ||||||||||||||||||
(0.15 | ) | (0.30 | ) | (0.30 | ) | (0.38 | ) | (0.38 | ) | (0.39 | ) | ||||||||||||||
(0.83 | ) | — | (0.19 | ) | (0.82 | ) | (0.05 | ) | — | ||||||||||||||||
(0.98 | ) | (0.30 | ) | (0.49 | ) | (1.20 | ) | (0.43 | ) | (0.39 | ) | ||||||||||||||
$ | 14.64 | $ | 15.70 | $ | 13.70 | $ | 14.01 | $ | 14.15 | $ | 14.63 | ||||||||||||||
(0.70% | ) | 4 | 16.93% | 4 | 1.50% | 4 | 8.59% | 5 | (0.37% | ) | 10.24% | ||||||||||||||
$ | 111,966 | $ | 116,626 | $ | 116,589 | $ | 155,525 | $ | 185,720 | $ | 201,285 | ||||||||||||||
0.83% | 0.83% | 0.84% | 0.84% | 0.84% | 0.84% | ||||||||||||||||||||
0.86% | 0.86% | 0.87% | 0.84% | 0.84% | 0.84% | ||||||||||||||||||||
1.73% | 1.62% | 2.16% | 4.16% | 2.66% | 2.76% | ||||||||||||||||||||
1.70% | 1.59% | 2.13% | 4.16% | 2.66% | 2.76% | ||||||||||||||||||||
38% | 89% | 68% | 91% | 57% | 81% |
55
Notes to financial statements | |
Delaware Wealth Builder Fund | May 31, 2022 (Unaudited) |
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 contingent deferred sales charge (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
56
prepayment speed, attributes of the collateral, yield or price of bonds of comparable quality, coupon, maturity, and type as well as broker/dealer-supplied prices. Swap prices are derived using daily swap curves and models that incorporate a number of market data factors, such as discounted cash flows, trades, and values of the underlying reference instruments. Foreign currency exchange contracts are valued at the mean between the bid and ask prices, which approximates fair value. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available. Futures contracts and options on futures contracts are valued at the daily quoted settlement prices. Exchange-traded options are valued at the last reported sale price or, if no sales are reported, at the mean between the last reported bid and ask prices, which approximates fair value. Open-end investment companies are valued at their published net asset value (NAV). Generally, other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of the Trust’s Board of Trustees (Board). In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures or suspension of trading in a security. The Fund may use fair value pricing more frequently for securities traded primarily in non-US markets because, among other things, most foreign markets close well before the Fund values its securities, generally as of 4:00pm Eastern time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, government actions or pronouncements, aftermarket trading, or news events may have occurred in the interim. Whenever such a significant event occurs, the Fund may value foreign securities using fair value prices based on third-party vendor modeling tools (international fair value pricing). Restricted securities are valued at fair value using methods approved by the Board.
Federal and Foreign Income Taxes — No provision for federal income taxes has been made as the Fund intends to continue to qualify for federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to shareholders. The Fund evaluates tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current year. Management has analyzed the Fund’s tax positions taken or expected to be taken on the Fund’s federal income tax returns through the six months ended May 31, 2022 and for all open tax years (years ended November 30, 2018–November 30, 2021), 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 six months ended May 31, 2022, the Fund did not incur any interest or tax penalties.
57
Notes to financial statements
Delaware Wealth Builder Fund
1. Significant Accounting Policies (continued)
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 (including 12d1-4). The Underlying Funds in which the Fund may invest include ETFs. The Fund will indirectly bear the investment management fees and other expenses of any 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 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.
58
Other — Expenses directly attributable to the Fund are charged directly to the Fund. Other expenses common to various funds within the Delaware Funds by Macquarie® (Delaware Funds) are generally allocated among such fund on the basis of average net assets. Management fees and certain other expenses are paid monthly. Security transactions are recorded on the date the securities are purchased or sold (trade date) for financial reporting purposes. Costs used in calculating realized gains and losses on the sale of investment securities are those of the specific securities sold. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Discounts and premiums on debt securities are accreted or amortized to interest income, respectively, over the lives of the respective securities using the effective interest method. Premiums on callable debt securities are amortized to interest income to the earliest call date using the effective interest method. Realized gains (losses) on paydowns of asset- and mortgage-backed securities are classified as interest income. Distributions received from investments in real estate investment trusts (REITs) are recorded as dividend income on the ex-dividend date, subject to reclassification upon notice of the character of such distributions by the issuer, 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 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 six months ended May 31, 2022.
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 six months ended May 31, 2022, the Fund earned $189 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.
59
Notes to financial statements
Delaware Wealth Builder Fund
2. Investment Management, Administration Agreements, and Other Transactions with Affiliates (continued)
DMC has contractually agreed to waive all or a portion of its management fee and/or pay/reimburse expenses (excluding any distribution and service (12b-1) fees, acquired fund fees and expenses, taxes, interest, short sale dividend and interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations), in order to prevent total annual fund operating expenses from exceeding 0.83% of the Fund’s average daily net assets from December 1, 2021 through May 31, 2022.* 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 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, 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 six months ended May 31, 2022, the Fund was charged $7,380 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
60
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 six months ended May 31, 2022, the Fund was charged $19,396 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, 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. 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 and regulatory reporting services to the Fund. For the six months ended May 31, 2022, the Fund was charged $5,765 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 six months ended May 31, 2022, DDLP earned $5,741 for commissions on sales of the Fund’s Class A shares. For the six months ended May 31, 2022, DDLP received gross CDSC commissions of $21 and $172 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, 2023. |
61
Notes to financial statements
Delaware Wealth Builder Fund
3. Investments
For the six months ended May 31, 2022, the Fund made purchases and sales of investment securities other than short-term investments as follows:
Purchases other than US government securities | $ | 74,652,591 | |
Purchases of US government securities | 72,414,447 | ||
Sales other than US government securities | 107,752,627 | ||
Sales of US government securities | 47,387,923 |
At May 31, 2022, the cost and unrealized appreciation (depreciation) of investments and derivatives for federal income tax purposes have been estimated since final tax characteristics cannot be determined until fiscal year end. At May 31, 2022, the cost and unrealized appreciation (depreciation) of investments and derivatives for the Fund were as follows:
Cost of investments and derivatives | $ | 363,000,538 | ||
Aggregate unrealized appreciation of investments and derivatives | $ | 41,065,666 | ||
Aggregate unrealized depreciation of investments and derivatives | (22,637,374 | ) | ||
Net unrealized appreciation of investments and derivatives | $ | 18,428,292 |
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) |
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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 May 31, 2022:
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Securities | |||||||||||||||
Assets: | |||||||||||||||
Agency Mortgage-Backed | |||||||||||||||
Securities | $ | — | $ | 10,422,511 | $ | — | $ | 10,422,511 | |||||||
Collateralized Debt Obligations | — | 780,493 | — | 780,493 | |||||||||||
Common Stocks | 219,296,841 | — | — | 1 | 219,296,841 | ||||||||||
Convertible Bonds | — | 24,994,123 | — | 24,994,123 | |||||||||||
Convertible Preferred Stock | 5,431,960 | — | — | 5,431,960 | |||||||||||
Corporate Bonds | — | 49,107,823 | — | 49,107,823 | |||||||||||
Exchange-Traded Funds | 9,838,907 | — | — | 9,838,907 | |||||||||||
Leveraged Non-Recourse Security | — | 1,300 | — | 1,300 | |||||||||||
Limited Partnerships | — | — | 6,798,960 | 6,798,960 | |||||||||||
Non-Agency Asset-Backed | |||||||||||||||
Securities | — | 841,072 | — | 841,072 | |||||||||||
Non-Agency Collateralized | |||||||||||||||
Mortgage Obligations | — | 120,393 | — | 120,393 | |||||||||||
Non-Agency Commercial | |||||||||||||||
Mortgage-Backed Securities | — | 4,871,908 | — | 4,871,908 | |||||||||||
Sovereign Bonds | — | 5,603,680 | — | 5,603,680 | |||||||||||
Supranational Banks | — | 1,051,001 | — | 1,051,001 | |||||||||||
US Treasury Obligations | — | 33,155,822 | — | 33,155,822 | |||||||||||
Options Purchased | — | 12 | — | 12 | |||||||||||
Short-Term Investments | 9,150,572 | — | — | 9,150,572 | |||||||||||
Total Value of | |||||||||||||||
Securities Before Options Written | $ | 243,718,280 | $ | 130,950,138 | $ | 6,798,960 | $ | 381,467,378 | |||||||
Liabilities: | |||||||||||||||
Options Written | $ | — | $ | (25 | ) | $ | — | $ | (25 | ) |
63
Notes to financial statements
Delaware Wealth Builder Fund
3. Investments (continued)
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
Derivatives2 | ||||||||||||||||||
Assets: | ||||||||||||||||||
Foreign Currency Exchange | ||||||||||||||||||
Contracts | $ | — | $ | 18,361 | $ | — | $ | 18,361 | ||||||||||
Futures Contracts | 4,779 | — | — | 4,779 | ||||||||||||||
Liabilities: | ||||||||||||||||||
Foreign Currency Exchange | ||||||||||||||||||
Contracts | $ | — | $ | (25,931 | ) | $ | — | $ | (25,931 | ) | ||||||||
Futures Contracts | (39,669 | ) | — | — | (39,669 | ) | ||||||||||||
OTC Credit Default Swaps | — | (5,671 | ) | — | (5,671 | ) |
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 period end. |
During the six months ended May 31, 2022, 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 period in relation to the Fund’s net assets.
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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, 2021 | $ | 12,055,225 | $ | 1,300 | $ | 12,056,525 | |||||||
Purchases | 106,235 | — | 106,235 | ||||||||||
Sales | (14,957,159 | ) | — | (14,957,159 | ) | ||||||||
Net realized gain | 13,150,634 | — | 13,150,634 | ||||||||||
Return of capital | (234,124 | ) | — | (234,124 | ) | ||||||||
Transfers out of Level 3 | — | (1,105,000 | ) | (1,105,000 | ) | ||||||||
Net change in unrealized | |||||||||||||
appreciation (depreciation) | (3,321,851 | ) | 1,103,700 | (2,218,151 | ) | ||||||||
Ending balance May 31, 2022 | $ | 6,798,960 | $ | — | $ | 6,798,960 | |||||||
Net change in unrealized | |||||||||||||
appreciation from investments | |||||||||||||
still held at the end of the | |||||||||||||
period | $ | 1,897,559 | $ | — | $ | 1,897,559 |
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 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.
65
Notes to financial statements
Delaware Wealth Builder Fund
3. Investments (continued)
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 | $ | 6,798,960 | and liabilities) | Liquidity Discount | 5% | ||||
Cap Rate | 5.55-6.72% |
4. Capital Shares
Transactions in capital shares were as follows:
Six months | |||||||
ended | Year ended | ||||||
5/31/22 | 11/30/21 | ||||||
Shares sold: | |||||||
Class A | 647,359 | 1,972,064 | |||||
Class C | 67,929 | 197,150 | |||||
Class R | 11,669 | 42,855 | |||||
Institutional Class | 476,219 | 657,585 | |||||
Shares issued upon reinvestment of dividends and distributions: | |||||||
Class A | 992,055 | 279,703 | |||||
Class C | 115,483 | 27,700 | |||||
Class R | 4,374 | 1,176 | |||||
Institutional Class | 443,846 | 143,787 | |||||
2,758,934 | 3,322,020 | ||||||
Shares redeemed: | |||||||
Class A | (1,408,552 | ) | (2,548,144 | ) | |||
Class C | (436,341 | ) | (2,051,021 | ) | |||
Class R | (14,162 | ) | (45,431 | ) | |||
Institutional Class | (697,829 | ) | (1,884,801 | ) | |||
(2,556,884 | ) | (6,529,397 | ) | ||||
Net increase (decrease) | 202,050 | (3,207,377 | ) |
66
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 on the previous page and on the “Statements of changes in net assets.” For the six months ended May 31, 2022 and the year ended November 30, 2021, the Fund had the following exchange transactions:
Exchange Redemptions | Exchange Subscriptions | ||||||||||
Institutional | |||||||||||
Class A | Class C | Class A | Class | ||||||||
Shares | Shares | Shares | Shares | Value | |||||||
Six months ended | |||||||||||
5/31/22 | 1,881 | 13,172 | 13,200 | 1,881 | $ | 226,926 | |||||
Year ended | |||||||||||
11/30/21 | 35,739 | 64,787 | 63,964 | 36,699 | 1,516,358 |
5. Line of Credit
The Fund, along with certain other funds in the Delaware Funds (Participants), is a participant in a $355,000,000 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 expires on October 31, 2022.
The Fund had no amounts outstanding as of May 31, 2022, or at any time during the period then ended.
6. 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
67
Notes to financial statements
Delaware Wealth Builder Fund
6. Derivatives (continued)
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.
During the six months ended May 31, 2022, 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 May 31, 2022, the Fund posted $39,911 in cash as collateral for open futures contracts, which is included in “Cash collateral due from brokers” on the “Statement of assets and liabilities.”
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During the six months ended May 31, 2022, 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.
Options Contracts — The Fund may enter into options contracts in the normal course of pursuing its investment objective. The Fund may buy or write options contracts for any number of reasons, including without limitation: to manage the Fund's exposure to changes in securities prices caused by interest rates or market conditions and foreign currencies; as an efficient means of adjusting the Fund's overall exposure to certain markets; to protect the value of portfolio securities; and as a cash management tool. The Fund may buy or write call or put options on securities, futures, swaps, swaptions, financial indices, and foreign currencies. When the Fund buys an option, a premium is paid and an asset is recorded and adjusted on a daily basis to reflect the current market value of the option purchased. When the Fund writes an option, a premium is received and a liability is recorded and adjusted on a daily basis to reflect the current market value of the option written. Premiums received from writing options that expire unexercised are treated by the Fund on the expiration date as realized gains. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is treated as realized gain or loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether the Fund has a realized gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Fund. The Fund, as writer of an option, bears the market risk of an unfavorable change in the price of the security underlying the written option. When writing options, the Fund is subject to minimal counterparty risk because the counterparty is only obligated to pay premiums and does not bear the market risk of an unfavorable market change. There were no transactions in options written during the six months ended May 31, 2022.
During the six months ended May 31, 2022, Fund used options contracts to manage the Fund’s exposure to changes in securities prices caused by interest rates or market conditions, to manage the Fund's exposure to changes in foreign currencies to adjust the Fund’s overall exposure to certain markets, and to receive premiums for writing options.
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
69
Notes to financial statements
Delaware Wealth Builder Fund
6. Derivatives (continued)
credit event (as defined in the CDS agreement), as it relates to a particular reference security or basket of securities (such as an index). In exchange for the protection offered by the seller of protection, the purchaser of protection agrees to pay the seller of protection a periodic amount at a stated rate that is applied to the notional 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 six months ended May 31, 2022, 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 six months ended May 31, 2022, 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
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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.”
Fair values of derivative instruments as of May 31, 2022 were as follows:
Asset Derivatives Fair Value | |||||||||||||||||
Interest | |||||||||||||||||
Statement of Assets and | Currency | Equity | Rate | ||||||||||||||
Liabilities Location | Contracts | Contracts | Contracts | Total | |||||||||||||
Unrealized appreciation on foreign currency exchange contracts | $ | 18,361 | $ | — | $ | — | $ | 18,361 | |||||||||
Variation margin due from broker on futures contracts* | — | — | 4,779 | 4,779 | |||||||||||||
Options purchased** | — | 12 | — | 12 | |||||||||||||
Total | $ | 18,361 | $ | 12 | $ | 4,779 | $ | 23,152 |
Liability Derivatives Fair Value | |||||||||||||||||||||
Statement of Assets and | Currency | Equity | Interest Rate | Credit | |||||||||||||||||
Liabilities Location | Contracts | Contracts | Contracts | Contracts | Total | ||||||||||||||||
Unrealized depreciation on foreign currency exchange contracts | $ | (25,931 | ) | $ | — | $ | — | $ | — | $ | (25,931 | ) | |||||||||
Variation margin due to broker on futures contracts* | — | (36,505 | ) | (3,164 | ) | — | (39,669 | ) | |||||||||||||
Unrealized depreciation on over the counter credit default swap contracts | — | — | — | (5,671 | ) | (5,671 | ) | ||||||||||||||
Options written, at value | — | (25 | ) | — | — | (25 | ) | ||||||||||||||
Total | $ | (25,931 | ) | $ | (36,530 | ) | $ | (3,164 | ) | $ | (5,671 | ) | $ | (71,296 | ) |
* | Includes cumulative appreciation (depreciation) of futures contracts from the date the contracts were opened through May 31, 2022. Only current day variation margin is reported on the Fund’s “Statement of assets and liabilities.” |
** | Included with "Investments, at value." |
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Notes to financial statements
Delaware Wealth Builder Fund
6. Derivatives (continued)
The effect of derivative instruments on the "Statement of operations" for the six months ended May 31, 2022 was as follows:
Net Realized Gain (Loss) on: | ||||||||||||||
Foreign | ||||||||||||||
Currency | ||||||||||||||
Exchange | Futures | Swap | ||||||||||||
Contracts | Contracts | Contracts | Total | |||||||||||
Currency contracts | $ | 4,249 | $ | — | $ | — | $ | 4,249 | ||||||
Interest rate contracts | — | 44,852 | — | 44,852 | ||||||||||
Credit contracts | — | — | 19,486 | 19,486 | ||||||||||
Total | $ | 4,249 | $ | 44,852 | $ | 19,486 | $ | 68,587 |
Net Change in Unrealized Appreciation (Depreciation) of: | ||||||||||||||||||||||||
Foreign | ||||||||||||||||||||||||
Currency | ||||||||||||||||||||||||
Exchange | Futures | Options | Options | Swap | ||||||||||||||||||||
Contracts | Contracts | Purchased | Written | Contracts | Total | |||||||||||||||||||
Currency contracts | $ | 4,425 | $ | — | $ | — | $ | — | $ | — | $ | 4,425 | ||||||||||||
Interest rate contracts | — | 19,068 | — | — | — | 19,068 | ||||||||||||||||||
Equity | ||||||||||||||||||||||||
contracts | — | (36,505 | ) | (1,813 | ) | 3,600 | — | (34,718 | ) | |||||||||||||||
Credit contracts | — | — | — | — | (9,517 | ) | (9,517 | ) | ||||||||||||||||
Total | $ | 4,425 | $ | (17,437 | ) | $ | (1,813 | ) | $ | 3,600 | $ | (9,517 | ) | $ | (20,742 | ) |
The table below summarizes the average balance of derivative holdings by the Fund during the six months ended May 31, 2022:
Long Derivative | Short Derivative | |||||
Volume | Volume | |||||
Foreign currency exchange contracts (average notional value) | $ | 404,763 | $ | 1,525,972 | ||
Futures contracts (average notional value) | 1,338,972 | 1,646,088 | ||||
Options contracts (average value)* | 77 | 181 | ||||
CDS contracts (average notional value)** | 370,437 | — |
* | Long represents purchased options and short represents written options. |
** | Long represents buying protection and short represents selling protection. |
7. 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
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netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default (close-out), including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy, insolvency, or other events.
For financial reporting purposes, the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements on the "Statement of assets and liabilities.”
At May 31, 2022, 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 | $ | 19 | $ | (11 | ) | $ | 8 | |||||||||
Citigroup | — | (3,296 | ) | (3,296 | ) | |||||||||||
JPMorgan Chase Bank | 18,342 | (28,295 | ) | (9,953 | ) | |||||||||||
Total | $ | 18,361 | $ | (31,602 | ) | $ | (13,241 | ) |
Fair Value of | Fair Value of | ||||||||||||||||||||||||||||||
Counterparty | Net Position | Non-Cash Collateral Received | Cash Collateral Received | Non-Cash Collateral Pledged | Cash Collateral Pledged | Net Exposure(a) | |||||||||||||||||||||||||
Bank of | |||||||||||||||||||||||||||||||
New | |||||||||||||||||||||||||||||||
York | |||||||||||||||||||||||||||||||
Mellon | $ | 8 | $ | — | $ | — | $ | — | $ | — | $ | 8 | |||||||||||||||||||
Citigroup | (3,296 | ) | — | — | — | — | (3,296 | ) | |||||||||||||||||||||||
JPMorgan | |||||||||||||||||||||||||||||||
Chase | |||||||||||||||||||||||||||||||
Bank | (9,953 | ) | — | — | — | — | (9,953 | ) | |||||||||||||||||||||||
Total | $ | (13,241 | ) | $ | — | $ | — | $ | — | $ | — | $ | (13,241 | ) |
(a) | Net exposure represents the receivable (payable) that would be due from (to) the counterparty in the event of default. |
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
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Notes to financial statements
Delaware Wealth Builder Fund
8. Securities Lending (continued)
denominated and payable in US dollars; and (2) 105% with respect to foreign securities. With respect to each loan, if on any business day the aggregate market value of securities collateral plus cash collateral held is less than the aggregate market value of the securities which are the subject of such loan, the borrower will be notified to provide additional collateral by the end of the following business day, which, together with the collateral already held, will be not less than the applicable initial collateral requirements for such security loan. If the aggregate market value of securities collateral and cash collateral held with respect to a security loan exceeds the applicable initial collateral requirement, upon the request of the borrower, BNY Mellon must return enough collateral to the borrower by the end of the following business day to reduce the value of the remaining collateral to the applicable initial collateral requirement for such security loan. As a result of the foregoing, the value of the collateral held with respect to a loaned security on any particular day, may be more or less than the value of the security on loan. The collateral percentage with respect to the market value of the loaned security is determined by the security lending agent.
Cash collateral received by each fund of the Trust is generally invested in a series of individual separate accounts, each corresponding to a fund. The investment guidelines permit each separate account to hold certain securities that would be considered eligible securities for a money market fund. Cash collateral received is generally invested in government securities; certain obligations issued by government sponsored enterprises; repurchase agreements collateralized by US Treasury securities; obligations issued by the central government of any Organization for Economic Cooperation and Development (OECD) country or its agencies, instrumentalities, or establishments; obligations of supranational organizations; commercial paper, notes, bonds, and other debt obligations; certificates of deposit, time deposits, and other bank obligations; 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.
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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 six months ended May 31, 2022, 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 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.
Beginning in late February 2022, global financial markets have experienced and may continue to experience significant volatility related to military action by Russia in Ukraine. As a result of this military action, the US and many other countries have imposed sanctions on Russia and certain Russian individuals, banks and corporations. The ongoing hostilities and resulting sanctions are expected to have a severe adverse effect on the region’s economies and more globally, including significant negative impact on markets for certain securities and commodities, such as oil and natural gas. Any cessation of trading on the Russian securities markets will impact the value and liquidity of certain portfolio holdings. The extent and duration of military action, sanctions, and resulting market disruptions are impossible to predict, but could be substantial and prolonged and impact your 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.
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.
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Notes to financial statements
Delaware Wealth Builder Fund
9. Credit and Market Risk (continued)
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 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 May 31, 2022. 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
76
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 $0.
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 the borrower. Prepayment penalty, facility, commitment, consent, and amendment fees are recorded to income as earned or paid.
As the Fund may be required to rely upon another lending institution to collect and pass on to the Fund amounts payable with respect to the loan and to enforce the Fund’s rights under the loan and other direct indebtedness, an insolvency, bankruptcy, or reorganization of the lending institution may delay or prevent the Fund from receiving such amounts. The highly leveraged nature of many loans may make them especially vulnerable to adverse changes in economic or market conditions. Investments in such loans and other direct indebtedness may involve additional risk to the Fund.
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Notes to financial statements
Delaware Wealth Builder Fund
9. Credit and Market Risk (continued)
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.”
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. 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.
12. Subsequent Events
Management has determined that no material events or transactions occurred subsequent to May 31, 2022, that would require recognition or disclosure in the Fund's financial statements.
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Other Fund information (Unaudited)
Delaware Wealth Builder Fund
Liquidity Risk Management Program
The Securities and Exchange Commission (the “SEC”) has adopted Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”), which requires all open-end funds (other than money market funds) to adopt and implement a program reasonably designed to assess and manage the fund’s “liquidity risk,” defined as the risk that the fund could not meet requests to redeem shares issued by the fund without significant dilution of remaining investors’ interests in the fund.
The Fund has adopted and implemented a liquidity risk management program in accordance with the Liquidity Rule (the “Program”). The Board has designated a member of the US Operational Risk Group of Macquarie Asset Management as the Program Administrator for each Fund in the Trust.
As required by the Liquidity Rule, the Program includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of the Fund’s liquidity risk; (2) classification of each of the Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments if, immediately after the acquisition, the Fund would hold more than 15% of its net assets in Illiquid assets. The Program also requires reporting to the SEC (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
In assessing and managing the Fund’s liquidity risk, the Program Administrator considers, as relevant, a variety of factors, including: (1) the Fund’s investment strategy and liquidity of portfolio investments during both normal and reasonably foreseeable stressed conditions; (2) short-term and long-term cash flow projections for the Fund during both normal and reasonably foreseeable stressed conditions; and (3) the Fund’s holdings of cash and cash equivalents and any borrowing arrangements. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or to sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value. The Fund primarily holds assets that are classified as Highly Liquid, and therefore is not required to establish an HLIM.
At a meeting of the Board held on May 17-19, 2022, the Program Administrator provided the required written annual report to the Board addressing the Program’s operation and assessing the adequacy and effectiveness of its implementation for the period from April 1, 2021 through March 31, 2022. The report concluded that the Program is appropriately designed and effectively implemented and that it meets the requirements of Rule 22e-4 and the Fund’s liquidity needs. The Fund’s HLIM is set at an appropriate level and the Fund complied with its HLIM at all times during the reporting period.
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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 | Daniel V. Geatens Senior Vice President and Treasurer Delaware Funds by Macquarie | Richard Salus Senior Vice President and Chief Financial Officer Delaware Funds by Macquarie |
This semiannual 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.
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Semiannual report |
US equity mutual fund
Delaware Small Cap Core Fund
May 31, 2022
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 Asset Management (MAM) is a global asset manager that aims to deliver positive impact for everyone. MAM Public Investments traces its roots to 1929 and partners with institutional and individual clients to deliver specialist active investment capabilities across global equities, fixed income, and multi-asset solutions using a conviction-based, long-term approach to investing. In the US, retail investors recognize our Delaware Funds by Macquarie family of funds as one of the oldest mutual fund families.
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.
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Visit delawarefunds.com/account-access.
Macquarie Asset Management (MAM) is the asset management division of Macquarie Group. MAM is a full-service asset manager offering a diverse range of products across public and private markets including fixed income, equities, multi-asset solutions, private credit, infrastructure, renewables, natural assets, real estate, and asset finance. The Public Investments business is a part of MAM and includes the following investment advisers: Macquarie Investment Management Business Trust (MIMBT), Macquarie Funds Management Hong Kong Limited, Macquarie Investment Management Austria Kapitalanlage AG, Macquarie Investment Management Global Limited, Macquarie Investment Management Europe Limited, and Macquarie Investment Management Europe S.A.
The Fund is distributed by Delaware Distributors, L.P. (DDLP), an affiliate of MIMBT and Macquarie Group Limited.
Other than Macquarie Bank Limited ABN 46 008 583 542 ("Macquarie Bank"), any Macquarie Group entity noted in this document is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these other Macquarie Group entities do not represent deposits or other liabilities of Macquarie Bank. Macquarie Bank does not guarantee or otherwise provide assurance in respect of the obligations of these other Macquarie Group entities. In addition, if this document relates to an investment, (a) the 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 entity 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 May 31, 2022, 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.
Disclosure of Fund expenses
For the six-month period from December 1, 2021 to May 31, 2022 (Unaudited)
The Fund seeks long-term 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 December 1, 2021 to May 31, 2022.
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.
1
Disclosure of Fund expenses
For the six-month period from December 1, 2021 to May 31, 2022 (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 | ||||||||||||||||||
12/1/21 | 5/31/22 | Expense Ratio | 12/1/21 to 5/31/22* | ||||||||||||||||||
Actual Fund return† | |||||||||||||||||||||
Class A | $ | 1,000.00 | $ | 903.50 | 1.06 | % | $ | 5.03 | |||||||||||||
Class C | 1,000.00 | 899.80 | 1.81 | % | 8.57 | ||||||||||||||||
Class R | 1,000.00 | 902.30 | 1.31 | % | 6.21 | ||||||||||||||||
Institutional Class | 1,000.00 | 904.60 | 0.81 | % | 3.85 | ||||||||||||||||
Class R6 | 1,000.00 | 905.20 | 0.69 | % | 3.28 | ||||||||||||||||
Hypothetical 5% return (5% return before expenses) | |||||||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,019.65 | 1.06 | % | $ | 5.34 | |||||||||||||
Class C | 1,000.00 | 1,015.91 | 1.81 | % | 9.10 | ||||||||||||||||
Class R | 1,000.00 | 1,018.40 | 1.31 | % | 6.59 | ||||||||||||||||
Institutional Class | 1,000.00 | 1,020.89 | 0.81 | % | 4.08 | ||||||||||||||||
Class R6 | 1,000.00 | 1,021.49 | 0.69 | % | 3.48 |
* | “Expenses Paid During Period” are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). |
† | Because actual returns reflect only the most recent six-month period, the returns shown may differ significantly from fiscal year returns. |
In addition to the Fund's expenses reflected above, the Fund also indirectly bears its portion of the fees and expenses of the investment companies (Underlying Funds) in which it invests. The table above does not reflect the expenses of the Underlying Funds.
2
Security type / sector allocation and top 10 | |
equity holdings | |
Delaware Small Cap Core Fund | As of May 31, 2022 (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 Stocks | 99.29% | |||
Basic Materials | 6.88% | |||
Business Services | 4.52% | |||
Capital Goods | 10.51% | |||
Communications Services | 0.33% | |||
Consumer Discretionary | 4.29% | |||
Consumer Services | 3.64% | |||
Consumer Staples | 2.63% | |||
Credit Cyclicals | 2.76% | |||
Energy | 6.76% | |||
Financials | 16.99% | |||
Healthcare | 15.28% | |||
Information Technology | 12.31% | |||
Media | 0.92% | |||
Real Estate Investment Trusts | 6.86% | |||
Transportation | 1.93% | |||
Utilities | 2.68% | |||
Short-Term Investments | 0.61% | |||
Total Value of Securities | 99.90% | |||
Receivables and Other Assets Net of Liabilities | 0.10% | |||
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 | |||
PDC Energy | 2.42% | |||
WESCO International | 1.70% | |||
Boise Cascade | 1.70% | |||
Patterson-UTI Energy | 1.50% | |||
Southwestern Energy | 1.48% | |||
ExlService Holdings | 1.38% | |||
WillScot Mobile Mini Holdings | 1.38% | |||
Minerals Technologies | 1.23% | |||
Prestige Consumer Healthcare | 1.20% | |||
BJ's Wholesale Club Holdings | 1.15% |
3
Schedule of investments | |
Delaware Small Cap Core Fund | May 31, 2022 (Unaudited) |
Number of | ||||||
shares | Value (US $) | |||||
Common Stocks – 99.29% | ||||||
Basic Materials – 6.88% | ||||||
Balchem | 166,458 | $ | 20,712,369 | |||
Boise Cascade | 1,576,935 | 121,928,614 | ||||
Coeur Mining † | 910,731 | 3,542,744 | ||||
Kaiser Aluminum | 652,796 | 66,696,167 | ||||
Minerals Technologies | 1,331,030 | 88,194,048 | ||||
Neenah | 983,764 | 37,294,493 | ||||
Quaker Chemical | 230,203 | 36,003,749 | ||||
Summit Materials Class A † | 2,136,396 | 58,344,975 | ||||
Worthington Industries | 1,298,749 | 60,573,653 | ||||
493,290,812 | ||||||
Business Services – 4.52% | ||||||
ABM Industries | 1,266,905 | 61,254,857 | ||||
ASGN † | 860,967 | 81,989,887 | ||||
BrightView Holdings † | 2,575,588 | 33,482,644 | ||||
Casella Waste Systems Class A † | 684,272 | 48,980,190 | ||||
WillScot Mobile Mini Holdings † | 2,762,638 | 98,709,056 | ||||
324,416,634 | ||||||
Capital Goods – 10.51% | ||||||
Ameresco Class A † | 821,156 | 48,218,280 | ||||
Applied Industrial Technologies | 722,286 | 74,691,595 | ||||
Barnes Group | 543,832 | 19,594,267 | ||||
Columbus McKinnon | 1,171,894 | 39,551,423 | ||||
ESCO Technologies | 304,210 | 20,020,060 | ||||
Federal Signal | 1,692,758 | 59,415,806 | ||||
Kadant | 319,038 | 59,053,934 | ||||
KBR | 1,522,160 | 75,742,682 | ||||
MYR Group † | 817,881 | 74,926,078 | ||||
Regal Rexnord | 318,502 | 39,796,825 | ||||
Tetra Tech | 588,766 | 79,465,747 | ||||
WESCO International † | 970,954 | 121,932,403 | ||||
Zurn Water Solutions | 1,438,294 | 41,451,633 | ||||
753,860,733 | ||||||
Communications Services – 0.33% | ||||||
ATN International | 531,417 | 23,430,176 | ||||
23,430,176 | ||||||
Consumer Discretionary – 4.29% | ||||||
American Eagle Outfitters | 3,393,937 | 41,100,577 | ||||
BJ's Wholesale Club Holdings † | 1,422,316 | 82,309,427 | ||||
Hibbett | 423,995 | 21,517,746 |
4
Number of | ||||||
shares | Value (US $) | |||||
Common Stocks (continued) | ||||||
Consumer Discretionary (continued) | ||||||
Malibu Boats Class A † | 1,138,374 | $ | 66,708,716 | |||
Sonic Automotive Class A | 419,437 | 19,130,522 | ||||
Steven Madden | 2,074,093 | 77,114,778 | ||||
307,881,766 | ||||||
Consumer Services – 3.64% | ||||||
Allegiant Travel † | 339,748 | 50,775,339 | ||||
Brinker International † | 1,202,290 | 36,489,501 | ||||
Chuy's Holdings † | 766,334 | 17,311,485 | ||||
Jack in the Box | 422,766 | 28,874,918 | ||||
Sun Country Airlines Holdings † | 986,506 | 23,330,867 | ||||
Texas Roadhouse | 931,206 | 72,606,132 | ||||
Wendy's | 1,709,881 | 31,872,182 | ||||
261,260,424 | ||||||
Consumer Staples – 2.63% | ||||||
Helen of Troy † | 238,893 | 44,240,594 | ||||
J & J Snack Foods | 452,249 | 57,987,367 | ||||
Prestige Consumer Healthcare † | 1,545,333 | 86,260,488 | ||||
188,488,449 | ||||||
Credit Cyclicals – 2.76% | ||||||
Dana | 2,652,324 | 43,922,486 | ||||
KB Home | 1,584,522 | 54,650,164 | ||||
La-Z-Boy | 1,175,938 | 30,021,697 | ||||
Taylor Morrison Home † | 2,389,193 | 69,214,921 | ||||
197,809,268 | ||||||
Energy – 6.76% | ||||||
Chesapeake Energy | 782,853 | 76,234,225 | ||||
Earthstone Energy Class A † | 1,184,354 | 21,342,059 | ||||
Patterson-UTI Energy | 5,623,992 | 107,305,767 | ||||
PDC Energy | 2,197,206 | 173,886,883 | ||||
Southwestern Energy † | 11,664,321 | 106,378,608 | ||||
485,147,542 | ||||||
Financials – 16.99% | ||||||
American Equity Investment Life Holding | 1,185,541 | 47,729,881 | ||||
City Holding | 502,017 | 41,210,576 | ||||
Enterprise Financial Services | 819,108 | 37,932,891 | ||||
Essent Group | 1,390,300 | 59,490,937 | ||||
First Bancorp | 1,023,690 | 38,357,664 | ||||
First Financial Bancorp | 2,011,954 | 42,210,795 | ||||
First Foundation | 1,454,651 | 32,802,380 |
5
Schedule of investments
Delaware Small Cap Core Fund
Number of | ||||||
shares | Value (US $) | |||||
Common Stocks (continued) | ||||||
Financials (continued) | ||||||
First Interstate BancSystem Class A | 2,039,990 | $ | 77,662,419 | |||
Hamilton Lane Class A | 724,774 | 50,408,032 | ||||
Independent Bank | 624,066 | 51,984,698 | ||||
Independent Bank Group | 642,627 | 46,963,181 | ||||
Kemper | 677,419 | 35,788,046 | ||||
Lakeland Financial | 53,365 | 3,850,818 | ||||
NMI Holdings Class A † | 2,734,955 | 50,897,513 | ||||
Old National Bancorp | 4,280,479 | 68,059,616 | ||||
Pacific Premier Bancorp | 1,454,980 | 47,374,149 | ||||
RLI | 163,840 | 19,844,301 | ||||
Selective Insurance Group | 917,844 | 72,785,029 | ||||
SouthState | 726,647 | 58,727,611 | ||||
Stifel Financial | 659,650 | 42,329,740 | ||||
Umpqua Holdings | 2,597,319 | 45,842,680 | ||||
United Community Banks | 2,014,271 | 63,308,537 | ||||
Valley National Bancorp | 4,307,198 | 54,744,487 | ||||
WesBanco | 1,430,003 | 48,705,902 | ||||
WSFS Financial | 1,854,761 | 79,346,676 | ||||
1,218,358,559 | ||||||
Healthcare – 15.28% | ||||||
Agios Pharmaceuticals † | 1,108,875 | 21,589,796 | ||||
Amicus Therapeutics † | 5,014,468 | 38,210,246 | ||||
Apellis Pharmaceuticals † | 1,131,949 | 46,919,286 | ||||
Artivion † | 1,976,939 | 38,668,927 | ||||
AtriCure † | 877,901 | 35,669,118 | ||||
Azenta | 514,825 | 39,456,188 | ||||
Blueprint Medicines † | 914,555 | 50,300,525 | ||||
CONMED | 565,996 | 65,819,675 | ||||
Halozyme Therapeutics † | 1,650,864 | 75,906,727 | ||||
Insmed † | 2,012,787 | 37,880,651 | ||||
Inspire Medical Systems † | 252,998 | 44,737,636 | ||||
Intercept Pharmaceuticals † | 487,341 | 8,820,872 | ||||
Ligand Pharmaceuticals † | 574,718 | 51,098,177 | ||||
Merit Medical Systems † | 1,144,726 | 70,274,729 | ||||
NeoGenomics † | 1,547,135 | 13,026,877 | ||||
NuVasive † | 970,025 | 55,689,135 | ||||
Omnicell † | 478,083 | 53,143,706 | ||||
Pacific Biosciences of California † | 3,080,326 | 17,342,235 | ||||
PTC Therapeutics † | 1,049,069 | 30,811,157 | ||||
Shockwave Medical † | 442,108 | 72,598,555 | ||||
Supernus Pharmaceuticals † | 1,800,169 | 50,170,710 |
6
Number of | ||||||
shares | Value (US $) | |||||
Common Stocks (continued) | ||||||
Healthcare (continued) | ||||||
TransMedics Group † | 1,669,130 | $ | 48,688,522 | |||
Travere Therapeutics † | 3,079,938 | 71,793,355 | ||||
Ultragenyx Pharmaceutical † | 726,467 | 34,071,302 | ||||
Vanda Pharmaceuticals † | 2,358,691 | 23,185,933 | ||||
1,095,874,040 | ||||||
Information Technology – 12.31% | ||||||
Bandwidth Class A † | 344,191 | 7,241,779 | ||||
Blackline † | 382,932 | 28,038,281 | ||||
Box Class A † | 1,221,732 | 31,899,423 | ||||
Consensus Cloud Solutions † | 438,996 | 21,084,978 | ||||
ExlService Holdings † | 694,263 | 98,717,256 | ||||
Ichor Holdings † | 769,418 | 23,267,200 | ||||
II-VI † | 987,724 | 61,732,750 | ||||
MACOM Technology Solutions Holdings † | 561,071 | 30,583,980 | ||||
MaxLinear † | 1,669,536 | 66,096,930 | ||||
NETGEAR † | 719,604 | 13,708,456 | ||||
Ping Identity Holding † | 1,152,766 | 21,787,277 | ||||
Q2 Holdings † | 815,667 | 43,010,121 | ||||
Rapid7 † | 924,508 | 65,519,882 | ||||
Semtech † | 934,957 | 59,921,394 | ||||
Silicon Laboratories † | 402,897 | 60,096,117 | ||||
Sprout Social Class A † | 387,574 | 19,739,144 | ||||
Upwork † | 806,887 | 14,725,688 | ||||
Varonis Systems † | 1,680,288 | 55,567,124 | ||||
WNS Holdings ADR † | 923,661 | 67,214,811 | ||||
Yelp † | 1,302,723 | 38,313,083 | ||||
Ziff Davis † | 717,493 | 54,773,416 | ||||
883,039,090 | ||||||
Media – 0.92% | ||||||
IMAX † | 1,570,187 | 27,195,639 | ||||
Nexstar Media Group Class A | 219,774 | 38,508,800 | ||||
65,704,439 | ||||||
Real Estate Investment Trusts – 6.86% | ||||||
American Assets Trust | 1,244,716 | 42,444,816 | ||||
Armada Hoffler Properties | 2,674,042 | 36,848,299 | ||||
DiamondRock Hospitality † | 4,890,495 | 50,323,194 | ||||
EastGroup Properties | 317,929 | 51,361,430 | ||||
Four Corners Property Trust | 1,179,348 | 32,514,624 | ||||
Kite Realty Group Trust | 2,418,818 | 50,698,425 | ||||
LXP Industrial Trust | 3,415,745 | 39,486,012 |
7
Schedule of investments
Delaware Small Cap Core Fund
Number of | ||||||
shares | Value (US $) | |||||
Common Stocks (continued) | ||||||
Real Estate Investment Trusts (continued) | ||||||
National Storage Affiliates Trust | 953,802 | $ | 50,026,915 | |||
Pebblebrook Hotel Trust | 1,813,437 | 40,820,467 | ||||
Physicians Realty Trust | 3,324,630 | 61,671,886 | ||||
RPT Realty | 2,935,254 | 35,722,041 | ||||
491,918,109 | ||||||
Transportation – 1.93% | ||||||
Hub Group Class A † | 1,010,024 | 73,711,551 | ||||
Werner Enterprises | 1,586,091 | 64,347,712 | ||||
138,059,263 | ||||||
Utilities – 2.68% | ||||||
Black Hills | 650,083 | 49,835,363 | ||||
NorthWestern | 815,765 | 49,981,921 | ||||
South Jersey Industries | 719,847 | 25,086,668 | ||||
Spire | 856,752 | 67,083,682 | ||||
191,987,634 | ||||||
Total Common Stocks (cost $5,963,753,792) | 7,120,526,938 | |||||
Short-Term Investments – 0.61% | ||||||
Money Market Mutual Funds – 0.61% | ||||||
BlackRock FedFund – Institutional Shares (seven-day effective yield 0.72%) | 11,060,814 | 11,060,814 | ||||
Fidelity Investments Money Market Government Portfolio – Class I (seven-day effective yield 0.60%) | 11,060,814 | 11,060,814 | ||||
GS Financial Square Government Fund – Institutional Shares (seven-day effective yield 0.71%) | 11,060,814 | 11,060,814 | ||||
Morgan Stanley Government Portfolio – Institutional Share Class (seven-day effective yield 0.71%) | 11,060,813 | 11,060,813 | ||||
Total Short-Term Investments (cost $44,243,255) | 44,243,255 | |||||
Total Value of Securities–99.90% | ||||||
(cost $6,007,997,047) | $ | 7,164,770,193 |
† | Non-income producing security. |
Summary of abbreviations: |
ADR – American Depositary Receipt |
GS – Goldman Sachs |
See accompanying notes, which are an integral part of the financial statements.
8
Statement of assets and liabilities | |
Delaware Small Cap Core Fund | May 31, 2022 (Unaudited) |
Assets: | ||||
Investments, at value* | $ | 7,164,770,193 | ||
Cash | 244 | |||
Receivable for fund shares sold | 16,665,197 | |||
Dividends and interest receivable | 9,180,171 | |||
Receivable for securities sold | 6,616,166 | |||
Other assets | 52,780 | |||
Total Assets | 7,197,284,751 | |||
Liabilities: | ||||
Payable for fund shares redeemed | 18,505,890 | |||
Investment management fees payable to affiliates | 3,824,864 | |||
Payable for securities purchased | 1,649,953 | |||
Dividend disbursing and transfer agent fees and expenses payable to non-affiliates | 1,051,536 | |||
Other accrued expenses | 299,401 | |||
Distribution fees payable to affiliates | 163,658 | |||
Dividend disbursing and transfer agent fees and expenses payable to affiliates | 59,178 | |||
Trustees’ fees and expenses payable to affiliates | 53,521 | |||
Accounting and administration expenses payable to affiliates | 17,560 | |||
Legal fees payable to affiliates | 9,915 | |||
Reports and statements to shareholders expenses payable to affiliates | 4,166 | |||
Total Liabilities | 25,639,642 | |||
Total Net Assets | $ | 7,171,645,109 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 6,079,273,462 | ||
Total distributable earnings (loss) | 1,092,371,647 | |||
Total Net Assets | $ | 7,171,645,109 |
9
Statement of assets and liabilities
Delaware Small Cap Core Fund
Net Asset Value | ||||
Class A: | ||||
Net assets | $ | 280,019,388 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 10,607,666 | |||
Net asset value per share | $ | 26.40 | ||
Sales charge | 5.75 | % | ||
Offering price per share, equal to net asset value per share / (1 - sales charge) | $ | 28.01 | ||
Class C: | ||||
Net assets | $ | 107,190,704 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 4,775,828 | |||
Net asset value per share | $ | 22.44 | ||
Class R: | ||||
Net assets | $ | 38,231,148 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 1,517,771 | |||
Net asset value per share | $ | 25.19 | ||
Institutional Class: | ||||
Net assets | $ | 5,450,211,620 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 200,730,022 | |||
Net asset value per share | $ | 27.15 | ||
Class R6: | ||||
Net assets | $ | 1,295,992,249 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 47,663,722 | |||
Net asset value per share | $ | 27.19 | ||
____________________ | ||||
* Investments, at cost | $ | 6,007,997,047 |
See accompanying notes, which are an integral part of the financial statements.
10
Statement of operations | |
Delaware Small Cap Core Fund | Six months ended May 31, 2022 (Unaudited) |
Investment Income: | |||||
Dividends | $ | 43,178,955 | |||
Interest | 91,312 | ||||
43,270,267 | |||||
Expenses: | |||||
Management fees | 23,297,589 | ||||
Distribution expenses — Class A | 374,930 | ||||
Distribution expenses — Class C | 607,710 | ||||
Distribution expenses — Class R | 105,220 | ||||
Dividend disbursing and transfer agent fees and expenses | 4,228,606 | ||||
Accounting and administration expenses | 526,147 | ||||
Reports and statements to shareholders expenses | 507,743 | ||||
Legal fees | 169,828 | ||||
Registration fees | 142,408 | ||||
Trustees’ fees and expenses | 128,139 | ||||
Custodian fees | 106,385 | ||||
Audit and tax fees | 15,865 | ||||
Other | 70,358 | ||||
30,280,928 | |||||
Less expenses paid indirectly | (951 | ) | |||
Total operating expenses | 30,279,977 | ||||
Net Investment Income | 12,990,290 | ||||
Net Realized and Unrealized Loss: | |||||
Net realized loss on investments | (4,065,399 | ) | |||
Net change in unrealized appreciation (depreciation) of investments | (789,800,705 | ) | |||
Net Realized and Unrealized Loss | (793,866,104 | ) | |||
Net Decrease in Net Assets Resulting from Operations | $ | (780,875,814 | ) |
See accompanying notes, which are an integral part of the financial statements.
11
Statements of changes in net assets
Delaware Small Cap Core Fund
Six months | ||||||||||
ended | ||||||||||
5/31/22 | Year ended | |||||||||
(Unaudited) | 11/30/21 | |||||||||
Increase (Decrease) in Net Assets from Operations: | ||||||||||
Net investment income | $ | 12,990,290 | $ | 12,923,049 | ||||||
Net realized gain (loss) | (4,065,399 | ) | 451,165,030 | |||||||
Net change in unrealized appreciation (depreciation) | (789,800,705 | ) | 1,093,765,440 | |||||||
Net increase (decrease) in net assets resulting from | ||||||||||
operations | (780,875,814 | ) | 1,557,853,519 | |||||||
Dividends and Distributions to Shareholders from: | ||||||||||
Distributable earnings: | ||||||||||
Class A | (19,265,935 | ) | (1,951,967 | ) | ||||||
Class C | (9,463,365 | ) | (1,003,028 | ) | ||||||
Class R | (2,863,111 | ) | (279,913 | ) | ||||||
Institutional Class | (357,240,198 | ) | (43,768,600 | ) | ||||||
Class R6 | (83,096,087 | ) | (9,588,230 | ) | ||||||
(471,928,696 | ) | (56,591,738 | ) | |||||||
Capital Share Transactions: | ||||||||||
Proceeds from shares sold: | ||||||||||
Class A | 46,483,796 | 89,418,275 | ||||||||
Class C | 5,921,810 | 21,217,790 | ||||||||
Class R | 4,788,757 | 9,370,000 | ||||||||
Institutional Class | 1,451,956,317 | 1,798,041,672 | ||||||||
Class R6 | 257,980,831 | 408,195,943 | ||||||||
Net asset value of shares issued upon reinvestment of | ||||||||||
dividends and distributions: | ||||||||||
Class A | 17,764,566 | 1,826,558 | ||||||||
Class C | 9,319,053 | 992,647 | ||||||||
Class R | 2,863,110 | 279,822 | ||||||||
Institutional Class | 264,151,847 | 33,842,749 | ||||||||
Class R6 | 74,281,941 | 7,093,053 | ||||||||
2,135,512,028 | 2,370,278,509 |
12
Six months | ||||||||||
ended | ||||||||||
5/31/22 | Year ended | |||||||||
(Unaudited) | 11/30/21 | |||||||||
Capital Share Transactions (continued): | ||||||||||
Cost of shares redeemed: | ||||||||||
Class A | $ | (46,817,299 | ) | $ | (111,587,205 | ) | ||||
Class C | (18,306,024 | ) | (35,518,304 | ) | ||||||
Class R | (6,615,817 | ) | (10,381,099 | ) | ||||||
Institutional Class | (1,048,998,269 | ) | (1,869,954,254 | ) | ||||||
Class R6 | (148,022,322 | ) | (230,930,548 | ) | ||||||
(1,268,759,731 | ) | (2,258,371,410 | ) | |||||||
Increase in net assets derived from capital share | ||||||||||
transactions | 866,752,297 | 111,907,099 | ||||||||
Net Increase (Decrease) in Net Assets | (386,052,213 | ) | 1,613,168,880 | |||||||
Net Assets: | ||||||||||
Beginning of period | 7,557,697,322 | 5,944,528,442 | ||||||||
End of period | $ | 7,171,645,109 | $ | 7,557,697,322 |
See accompanying notes, which are an integral part of the financial statements.
13
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)2 |
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 return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets4 |
Ratio of net investment income (loss) to average net assets |
Portfolio turnover |
1 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
2 | Calculated using average shares outstanding. |
3 | 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. |
4 | 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.
14
Six months ended | ||||||||||||||||||||||||||
5/31/221 | Year ended | |||||||||||||||||||||||||
(Unaudited) | 11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | |||||||||||||||||||||
$ | 31.14 | $ | 24.79 | $ | 23.20 | $ | 23.91 | $ | 25.74 | $ | 22.23 | |||||||||||||||
0.02 | (0.02 | ) | 0.02 | 0.03 | 0.05 | (0.03 | ) | |||||||||||||||||||
(2.83 | ) | 6.56 | 1.99 | 1.25 | 0.04 | 3.78 | ||||||||||||||||||||
(2.81 | ) | 6.54 | 2.01 | 1.28 | 0.09 | 3.75 | ||||||||||||||||||||
— | — | (0.04 | ) | (0.02 | ) | — | — | |||||||||||||||||||
(1.93 | ) | (0.19 | ) | (0.38 | ) | (1.97 | ) | (1.92 | ) | (0.24 | ) | |||||||||||||||
(1.93 | ) | (0.19 | ) | (0.42 | ) | (1.99 | ) | (1.92 | ) | (0.24 | ) | |||||||||||||||
$ | 26.40 | $ | 31.14 | $ | 24.79 | $ | 23.20 | $ | 23.91 | $ | 25.74 | |||||||||||||||
(9.65% | ) | 26.50% | 8.81% | 7.79% | 0.44% | 17.02% | ||||||||||||||||||||
$ | 280,019 | $ | 312,223 | $ | 264,888 | $ | 279,872 | $ | 288,721 | $ | 324,710 | |||||||||||||||
1.06% | 1.06% | 1.10% | 1.10% | 1.12% | 1.18% | |||||||||||||||||||||
0.11% | (0.06% | ) | 0.09% | 0.15% | 0.19% | (0.12% | ) | |||||||||||||||||||
19% | 24% | 37% | 34% | 38% | 54% |
15
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 loss2 |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
Net realized gain |
Total dividends and distributions |
Net asset value, end of period |
Total return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets4 |
Ratio of net investment loss to average net assets |
Portfolio turnover |
1 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
2 | Calculated using average shares outstanding. |
3 | 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. |
4 | 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.
16
Six months ended | ||||||||||||||||||||||||||
5/31/221 | Year ended | |||||||||||||||||||||||||
(Unaudited) | 11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | |||||||||||||||||||||
$ | 26.86 | $ | 21.57 | $ | 20.35 | $ | 21.38 | $ | 23.38 | $ | 20.36 | |||||||||||||||
(0.08 | ) | (0.21 | ) | (0.12 | ) | (0.11 | ) | (0.13 | ) | (0.19 | ) | |||||||||||||||
(2.41 | ) | 5.69 | 1.72 | 1.05 | 0.05 | 3.45 | ||||||||||||||||||||
(2.49 | ) | 5.48 | 1.60 | 0.94 | (0.08 | ) | 3.26 | |||||||||||||||||||
(1.93 | ) | (0.19 | ) | (0.38 | ) | (1.97 | ) | (1.92 | ) | (0.24 | ) | |||||||||||||||
(1.93 | ) | (0.19 | ) | (0.38 | ) | (1.97 | ) | (1.92 | ) | (0.24 | ) | |||||||||||||||
$ | 22.44 | $ | 26.86 | $ | 21.57 | $ | 20.35 | $ | 21.38 | $ | 23.38 | |||||||||||||||
(10.02% | ) | 25.54% | 8.00% | 6.99% | (0.31% | ) | 16.17% | |||||||||||||||||||
$ | 107,191 | $ | 132,294 | $ | 117,251 | $ | 139,808 | $ | 168,400 | $ | 154,837 | |||||||||||||||
1.81% | 1.81% | 1.85% | 1.85% | 1.87% | 1.93% | |||||||||||||||||||||
(0.64% | ) | (0.81% | ) | (0.66% | ) | (0.60% | ) | (0.56% | ) | (0.87% | ) | |||||||||||||||
19% | 24% | 37% | 34% | 38% | 54% |
17
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 loss2 |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
Net realized gain |
Total dividends and distributions |
Net asset value, end of period |
Total return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets4 |
Ratio of net investment loss to average net assets |
Portfolio turnover |
1 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
2 | Calculated using average shares outstanding. |
3 | 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. |
4 | 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.
18
Six months ended | ||||||||||||||||||||||||||
5/31/221 | Year ended | |||||||||||||||||||||||||
(Unaudited) | 11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | |||||||||||||||||||||
$ | 29.84 | $ | 23.82 | $ | 22.33 | $ | 23.12 | $ | 25.01 | $ | 21.66 | |||||||||||||||
(0.02 | ) | (0.09 | ) | (0.03 | ) | (0.02 | ) | (0.02 | ) | (0.08 | ) | |||||||||||||||
(2.70 | ) | 6.30 | 1.90 | 1.20 | 0.05 | 3.67 | ||||||||||||||||||||
(2.72 | ) | 6.21 | 1.87 | 1.18 | 0.03 | 3.59 | ||||||||||||||||||||
(1.93 | ) | (0.19 | ) | (0.38 | ) | (1.97 | ) | (1.92 | ) | (0.24 | ) | |||||||||||||||
(1.93 | ) | (0.19 | ) | (0.38 | ) | (1.97 | ) | (1.92 | ) | (0.24 | ) | |||||||||||||||
$ | 25.19 | $ | 29.84 | $ | 23.82 | $ | 22.33 | $ | 23.12 | $ | 25.01 | |||||||||||||||
(9.77% | ) | 26.19% | 8.51% | 7.55% | 0.19% | 16.73% | ||||||||||||||||||||
$ | 38,231 | $ | 44,366 | $ | 36,065 | $ | 27,631 | $ | 28,138 | $ | 33,112 | |||||||||||||||
1.31% | 1.31% | 1.35% | 1.35% | 1.37% | 1.43% | |||||||||||||||||||||
(0.14% | ) | (0.31% | ) | (0.16% | ) | (0.10% | ) | (0.06% | ) | (0.37% | ) | |||||||||||||||
19% | 24% | 37% | 34% | 38% | 54% |
19
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 (loss) from investment operations: |
Net investment income2 |
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 return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets4 |
Ratio of net investment income to average net assets |
Portfolio turnover |
1 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
2 | Calculated using average shares outstanding. |
3 | 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. |
4 | 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.
20
Six months ended | ||||||||||||||||||||||||||
5/31/221 | Year ended | |||||||||||||||||||||||||
(Unaudited) | 11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | |||||||||||||||||||||
$ | 32.00 | $ | 25.46 | $ | 23.81 | $ | 24.50 | $ | 26.29 | $ | 22.66 | |||||||||||||||
0.05 | 0.06 | 0.07 | 0.09 | 0.11 | 0.03 | |||||||||||||||||||||
(2.91 | ) | 6.72 | 2.06 | 1.28 | 0.05 | 3.86 | ||||||||||||||||||||
(2.86 | ) | 6.78 | 2.13 | 1.37 | 0.16 | 3.89 | ||||||||||||||||||||
(0.06 | ) | (0.05 | ) | (0.10 | ) | (0.09 | ) | (0.03 | ) | (0.02 | ) | |||||||||||||||
(1.93 | ) | (0.19 | ) | (0.38 | ) | (1.97 | ) | (1.92 | ) | (0.24 | ) | |||||||||||||||
(1.99 | ) | (0.24 | ) | (0.48 | ) | (2.06 | ) | (1.95 | ) | (0.26 | ) | |||||||||||||||
$ | 27.15 | $ | 32.00 | $ | 25.46 | $ | 23.81 | $ | 24.50 | $ | 26.29 | |||||||||||||||
(9.54% | ) | 26.80% | 9.09% | 8.06% | 0.69% | 17.31% | ||||||||||||||||||||
$ | 5,450,212 | $ | 5,743,601 | $ | 4,632,204 | $ | 3,888,603 | $ | 3,451,251 | $ | 2,275,563 | |||||||||||||||
0.81% | 0.81% | 0.85% | 0.85% | 0.87% | 0.93% | |||||||||||||||||||||
0.36% | 0.19% | 0.34% | 0.40% | 0.44% | 0.13% | |||||||||||||||||||||
19% | 24% | 37% | 34% | 38% | 54% |
21
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 (loss) from investment operations: |
Net investment income2 |
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 return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets4 |
Ratio of net investment income to average net assets |
Portfolio turnover |
1 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
2 | Calculated using average shares outstanding. |
3 | 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. |
4 | 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
Six months ended | ||||||||||||||||||||||||||
5/31/221 | Year ended | |||||||||||||||||||||||||
(Unaudited) | 11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | |||||||||||||||||||||
$ | 32.06 | $ | 25.51 | $ | 23.85 | $ | 24.54 | $ | 26.32 | $ | 22.68 | |||||||||||||||
0.07 | 0.10 | 0.10 | 0.12 | 0.15 | 0.06 | |||||||||||||||||||||
(2.91 | ) | 6.72 | 2.06 | 1.28 | 0.05 | 3.86 | ||||||||||||||||||||
(2.84 | ) | 6.82 | 2.16 | 1.40 | 0.20 | 3.92 | ||||||||||||||||||||
(0.10 | ) | (0.08 | ) | (0.12 | ) | (0.12 | ) | (0.06 | ) | (0.04 | ) | |||||||||||||||
(1.93 | ) | (0.19 | ) | (0.38 | ) | (1.97 | ) | (1.92 | ) | (0.24 | ) | |||||||||||||||
(2.03 | ) | (0.27 | ) | (0.50 | ) | (2.09 | ) | (1.98 | ) | (0.28 | ) | |||||||||||||||
$ | 27.19 | $ | 32.06 | $ | 25.51 | $ | 23.85 | $ | 24.54 | $ | 26.32 | |||||||||||||||
(9.48% | ) | 26.92% | 9.24% | 8.20% | 0.86% | 17.45% | ||||||||||||||||||||
$ | 1,295,992 | $ | 1,325,213 | $ | 894,120 | $ | 677,315 | $ | 413,332 | $ | 49,594 | |||||||||||||||
0.69% | 0.69% | 0.71% | 0.72% | 0.74% | 0.79% | |||||||||||||||||||||
0.48% | 0.31% | 0.48% | 0.53% | 0.57% | 0.27% | |||||||||||||||||||||
19% | 24% | 37% | 34% | 38% | 54% |
23
Notes to financial statements | |
Delaware Small Cap Core Fund | May 31, 2022 (Unaudited) |
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
24
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 six months ended May 31, 2022, and for all open tax years (years ended November 30, 2018–November 30, 2021), 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 six months ended May 31, 2022, 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, which are estimated. 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. The expenses paid under this
25
Notes to financial statements
Delaware Small Cap Core Fund
1. Significant Accounting Policies (continued)
arrangement are included on the "Statement of operations" under "Custodian fees" with the corresponding expenses offset included under "Less expenses paid indirectly." There were no such earnings credits for the six months ended May 31, 2022.
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 six months ended May 31, 2022, the Fund earned $951 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 six months ended May 31, 2022, the Fund was charged $127,123 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
26
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 six months ended May 31, 2022, the Fund was charged $334,041 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, 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. The fees are calculated daily and paid monthly. Institutional Class and Class R6 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 six months ended May 31, 2022, the Fund was charged $104,698 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 six months ended May 31, 2022, DDLP earned $33,677 for commissions on sales of the Fund’s Class A shares. For the six months ended May 31, 2022, DDLP received gross CDSC commissions of $286 and $3,477 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 any 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 any Underlying Funds and the number of shares that are owned of the Underlying Funds at different times.
3. Investments
For the six months ended May 31, 2022, the Fund made purchases and sales of investment securities other than short-term investments as follows:
Purchases | $ | 1,154,427,498 | |
Sales | 689,495,661 |
27
Notes to financial statements
Delaware Small Cap Core Fund
3. Investments (continued)
At May 31, 2022, the cost and unrealized appreciation (depreciation) of investments for federal income tax purposes have been estimated since final tax characteristics cannot be determined until fiscal year end. At May 31, 2022, the cost and unrealized appreciation (depreciation) of investments for the Fund were as follows:
Cost of investments | $ | 6,007,997,047 | ||
Aggregate unrealized appreciation of investments | $ | 1,693,143,575 | ||
Aggregate unrealized depreciation of investments | (536,370,429 | ) | ||
Net unrealized appreciation of investments | $ | 1,156,773,146 |
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
28
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 May 31, 2022:
Level 1 | |||
Securities | |||
Assets: | |||
Common Stocks | $ | 7,120,526,938 | |
Short-Term Investments | 44,243,255 | ||
Total Value of Securities | $ | 7,164,770,193 |
During the six months ended May 31, 2022, 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 period in relation to the Fund's net assets. During the six months ended May 31, 2022, there were no Level 3 investments.
4. Capital Shares
Transactions in capital shares were as follows:
Six months | ||||
ended | Year ended | |||
5/31/22 | 11/30/21 | |||
Shares sold: | ||||
Class A | 1,646,527 | 2,992,875 | ||
Class C | 242,316 | 818,207 | ||
Class R | 176,265 | 326,119 | ||
Institutional Class | 50,133,766 | 57,922,579 | ||
Class R6 | 8,983,574 | 13,510,695 | ||
Shares issued upon reinvestment of dividends and distributions: | ||||
Class A | 606,921 | 69,530 | ||
Class C | 373,210 | 43,499 | ||
Class R | 102,400 | 11,091 | ||
Institutional Class | 8,784,564 | 1,256,693 | ||
Class R6 | 2,468,659 | 263,193 | ||
73,518,202 | 77,214,481 |
29
Notes to financial statements
Delaware Small Cap Core Fund
4. Capital Shares (continued)
Six months | ||||||
ended | Year ended | |||||
5/31/22 | 11/30/21 | |||||
Shares redeemed: | ||||||
Class A | (1,671,061 | ) | (3,720,796 | ) | ||
Class C | (764,789 | ) | (1,372,903 | ) | ||
Class R | (247,696 | ) | (364,335 | ) | ||
Institutional Class | (37,653,437 | ) | (61,643,329 | ) | ||
Class R6 | (5,117,964 | ) | (7,501,034 | ) | ||
(45,454,947 | ) | (74,602,397 | ) | |||
Net increase | 28,063,255 | 2,612,084 |
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 six months ended May 31, 2022 and the year ended November 30, 2021, 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 | ||||||||||
Six months ended | |||||||||||||||||
5/31/22 | 11,202 | 7,987 | 11,816 | 1,127 | 16,800 | 11,532 | 2,576 | $ | 883,634 | ||||||||
Year ended | |||||||||||||||||
11/30/21 | 13,780 | 28,375 | 1,390,669 | 2,829 | 7,614 | 31,985 | 1,390,190 | 44,124,346 |
5. Line of Credit
The Fund, along with certain other funds in the Delaware Funds (Participants), is a participant in a $355,000,000 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 expires on October 31, 2022.
The Fund had no amounts outstanding as of May 31, 2022, or at any time during the period then ended.
30
6. 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.
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
31
Notes to financial statements
Delaware Small Cap Core Fund
6. Securities Lending (continued)
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 six months ended May 31, 2022, the Fund had no securities out on loan.
7. 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 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 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 six months ended May 31, 2022. 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
32
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 May 31, 2022, there were no Rule 144A securities held by the Fund.
8. 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.
9. Subsequent Events
Management has determined that no material events or transactions occurred subsequent to May 31, 2022, that would require recognition or disclosure in the Fund's financial statements.
33
Other Fund information (Unaudited)
Delaware Small Cap Core Fund
Liquidity Risk Management Program
The Securities and Exchange Commission (the “SEC”) has adopted Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”), which requires all open-end funds (other than money market funds) to adopt and implement a program reasonably designed to assess and manage the fund’s “liquidity risk,” defined as the risk that the fund could not meet requests to redeem shares issued by the fund without significant dilution of remaining investors’ interests in the fund.
The Fund has adopted and implemented a liquidity risk management program in accordance with the Liquidity Rule (the “Program”). The Board has designated a member of the US Operational Risk Group of Macquarie Asset Management as the Program Administrator for each Fund in the Trust.
As required by the Liquidity Rule, the Program includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of the Fund’s liquidity risk; (2) classification of each of the Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments if, immediately after the acquisition, the Fund would hold more than 15% of its net assets in Illiquid assets. The Program also requires reporting to the SEC (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
In assessing and managing the Fund’s liquidity risk, the Program Administrator considers, as relevant, a variety of factors, including: (1) the Fund’s investment strategy and liquidity of portfolio investments during both normal and reasonably foreseeable stressed conditions; (2) short-term and long-term cash flow projections for the Fund during both normal and reasonably foreseeable stressed conditions; and (3) the Fund’s holdings of cash and cash equivalents and any borrowing arrangements. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or to sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value. The Fund primarily holds assets that are classified as Highly Liquid, and therefore is not required to establish an HLIM.
At a meeting of the Board held on May 17-19, 2022, the Program Administrator provided the required written annual report to the Board addressing the Program’s operation and assessing the adequacy and effectiveness of its implementation for the period from April 1, 2021 through March 31, 2022. The report concluded that the Program is appropriately designed and effectively implemented and that it meets the requirements of Rule 22e-4 and the Fund’s liquidity needs. The Fund’s HLIM is set at an appropriate level and the Fund complied with its HLIM at all times during the reporting period.
34
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 | Daniel V. Geatens Senior Vice President and Treasurer Delaware Funds by Macquarie | Richard Salus Senior Vice President and Chief Financial Officer Delaware Funds by Macquarie |
This semiannual 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.
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Semiannual report |
US equity mutual fund
Delaware Small Cap Value Fund
May 31, 2022
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 Asset Management (MAM) is a global asset manager that aims to deliver positive impact for everyone. MAM Public Investments traces its roots to 1929 and partners with institutional and individual clients to deliver specialist active investment capabilities across global equities, fixed income, and multi-asset solutions using a conviction-based, long-term approach to investing. In the US, retail investors recognize our Delaware Funds by Macquarie family of funds as one of the oldest mutual fund families.
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) is the asset management division of Macquarie Group. MAM is a full-service asset manager offering a diverse range of products across public and private markets including fixed income, equities, multi-asset solutions, private credit, infrastructure, renewables, natural assets, real estate, and asset finance. The Public Investments business is a part of MAM and includes the following investment advisers: Macquarie Investment Management Business Trust (MIMBT), Macquarie Funds Management Hong Kong Limited, Macquarie Investment Management Austria Kapitalanlage AG, Macquarie Investment Management Global Limited, Macquarie Investment Management Europe Limited, and Macquarie Investment Management Europe S.A.
The Fund is distributed by Delaware Distributors, L.P. (DDLP), an affiliate of MIMBT and Macquarie Group Limited.
Other than Macquarie Bank Limited ABN 46 008 583 542 ("Macquarie Bank"), any Macquarie Group entity noted in this document is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these other Macquarie Group entities do not represent deposits or other liabilities of Macquarie Bank. Macquarie Bank does not guarantee or otherwise provide assurance in respect of the obligations of these other Macquarie Group entities. In addition, if this document relates to an investment, (a) the 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 entity 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 May 31, 2022, 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.
Disclosure of Fund expenses
For the six-month period from December 1, 2021 to May 31, 2022 (Unaudited)
The investment objective of the Fund is to seek 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 December 1, 2021 to May 31, 2022.
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.
1
Disclosure of Fund expenses
For the six-month period from December 1, 2021 to May 31, 2022 (Unaudited)
Delaware Small Cap Value Fund
Expense analysis of an investment of $1,000
Beginning | Ending | Expenses | |||||||||||||||||
Account Value | Account Value | Annualized | Paid During Period | ||||||||||||||||
12/1/21 | 5/31/22 | Expense Ratio | 12/1/21 to 5/31/22* | ||||||||||||||||
Actual Fund return† | |||||||||||||||||||
Class A | $ | 1,000.00 | $987.70 | 1.12% | $ | 5.55 | |||||||||||||
Class C | 1,000.00 | 983.90 | 1.87% | 9.25 | |||||||||||||||
Class R | 1,000.00 | 986.30 | 1.37% | 6.78 | |||||||||||||||
Institutional Class | 1,000.00 | 988.90 | 0.87% | 4.31 | |||||||||||||||
Class R6 | 1,000.00 | 989.70 | 0.70% | 3.47 | |||||||||||||||
Hypothetical 5% return (5% return before expenses) | |||||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,019.35 | 1.12% | $ | 5.64 | ||||||||||||
Class C | 1,000.00 | 1,015.61 | 1.87% | 9.40 | |||||||||||||||
Class R | 1,000.00 | 1,018.10 | 1.37% | 6.89 | |||||||||||||||
Institutional Class | 1,000.00 | 1,020.59 | 0.87% | 4.38 | |||||||||||||||
Class R6 | 1,000.00 | 1,021.44 | 0.70% | 3.53 |
* | “Expenses Paid During Period” are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). |
† | Because actual returns reflect only the most recent six-month period, the returns shown may differ significantly from fiscal year returns. |
In addition to the Fund's expenses reflected above, the Fund also indirectly bears its portion of the fees and expenses of the investment companies (Underlying Funds) in which it invests (if any). The table above does not reflect the expenses of the Underlying Funds.
2
Security type / sector allocation and top 10 | |
equity holdings | |
Delaware Small Cap Value Fund | As of May 31, 2022 (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 Stocks ◆ | 99.18% | |||
Basic Industry | 8.78% | |||
Consumer Discretionary | 9.99% | |||
Consumer Staples | 2.87% | |||
Energy | 9.87% | |||
Financial Services* | 27.86% | |||
Healthcare | 4.33% | |||
Industrials | 12.18% | |||
Real Estate Investment Trusts | 7.77% | |||
Technology | 9.77% | |||
Transportation | 2.05% | |||
Utilities | 3.71% | |||
Short-Term Investments | 0.76% | |||
Total Value of Securities | 99.94% | |||
Receivables and Other Assets Net of Liabilities | 0.06% | |||
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, and insurance. As of May 31, 2022, such amounts, as a percentage of total net assets were 19.23%, 2.19%, and 6.44%, 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%. |
3
Security type / sector allocation and top 10
equity holdings
Delaware Small Cap Value Fund
Holdings are for informational purposes only and are subject to change at any time. They are not a recommendation to buy, sell, or hold any security.
Top 10 equity holdings | Percentage of net assets | ||||
East West Bancorp | 2.68% | ||||
Webster Financial | 2.50% | ||||
Louisiana-Pacific | 2.25% | ||||
Stifel Financial | 2.19% | ||||
Hancock Whitney | 2.11% | ||||
MasTec | 2.07% | ||||
Western Alliance Bancorp | 1.98% | ||||
WESCO International | 1.83% | ||||
CNX Resources | 1.77% | ||||
Magnolia Oil & Gas Class A | 1.76% |
4
Schedule of investments | |
Delaware Small Cap Value Fund | May 31, 2022 (Unaudited) |
Number of | ||||||
shares | Value (US $) | |||||
Common Stocks – 99.18% ◆ | ||||||
Basic Industry – 8.78% | ||||||
Arconic † | 1,893,700 | $ | 53,269,781 | |||
Ashland Global Holdings | 429,200 | 45,932,984 | ||||
Avient | 1,029,700 | 50,661,240 | ||||
Berry Global Group † | 1,605,310 | 93,637,732 | ||||
HB Fuller | 885,500 | 62,941,340 | ||||
Huntsman | 2,208,000 | 80,040,000 | ||||
Louisiana-Pacific | 2,078,800 | 143,561,928 | ||||
Summit Materials Class A † | 1,164,400 | 31,799,764 | ||||
561,844,769 | ||||||
Consumer Discretionary – 9.99% | ||||||
Acushnet Holdings | 843,415 | 34,326,991 | ||||
Adient † | 1,345,700 | 47,624,323 | ||||
Barnes Group | 1,356,300 | 48,867,489 | ||||
Cable One | 19,580 | 25,514,698 | ||||
Choice Hotels International | 286,800 | 36,678,852 | ||||
Cracker Barrel Old Country Store | 382,000 | 38,967,820 | ||||
Denny's † | 1,182,200 | 12,247,592 | ||||
Group 1 Automotive | 316,500 | 56,840,235 | ||||
KB Home | 1,352,000 | 46,630,480 | ||||
Meritage Homes † | 615,900 | 52,542,429 | ||||
Nexstar Media Group Class A | 280,700 | 49,184,254 | ||||
PROG Holdings † | 616,100 | 17,983,959 | ||||
Steven Madden | 968,925 | 36,024,632 | ||||
Texas Roadhouse | 557,350 | 43,456,579 | ||||
UniFirst | 330,400 | 54,000,576 | ||||
Wolverine World Wide | 1,775,480 | 37,888,743 | ||||
638,779,652 | ||||||
Consumer Staples – 2.87% | ||||||
J & J Snack Foods | 377,500 | 48,403,050 | ||||
Performance Food Group † | 1,221,522 | 52,940,764 | ||||
Scotts Miracle-Gro | 224,200 | 21,213,804 | ||||
Spectrum Brands Holdings | 692,050 | 60,720,467 | ||||
183,278,085 | ||||||
Energy – 9.87% | ||||||
CNX Resources † | 5,222,600 | 113,434,872 | ||||
Delek US Holdings † | 1,431,000 | 41,727,960 | ||||
Devon Energy | 966,362 | 72,380,514 | ||||
Dril-Quip † | 656,000 | 20,624,640 | ||||
Helix Energy Solutions Group † | 3,841,600 | 17,825,024 | ||||
Magnolia Oil & Gas Class A | 4,085,700 | 112,806,177 |
5
Schedule of investments
Delaware Small Cap Value Fund
Number of | ||||||
shares | Value (US $) | |||||
Common Stocks ◆ (continued) | ||||||
Energy (continued) | ||||||
Matador Resources | 1,133,950 | $ | 69,057,555 | |||
Murphy Oil | 1,844,000 | 78,222,480 | ||||
Patterson-UTI Energy | 4,730,700 | 90,261,756 | ||||
Renewable Energy Group † | 247,685 | 15,185,567 | ||||
631,526,545 | ||||||
Financial Services – 27.86% | ||||||
American Equity Investment Life Holding | 2,665,300 | 107,304,978 | ||||
Bank of NT Butterfield & Son | 1,126,300 | 35,568,554 | ||||
East West Bancorp | 2,331,323 | 171,445,493 | ||||
Essent Group | 1,154,900 | 49,418,171 | ||||
First Financial Bancorp | 2,600,900 | 54,566,882 | ||||
First Interstate BancSystem Class A | 2,254,822 | 85,841,074 | ||||
FNB | 8,297,100 | 100,809,765 | ||||
Hancock Whitney | 2,703,800 | 134,757,392 | ||||
Hanover Insurance Group | 638,000 | 93,530,800 | ||||
Hope Bancorp | 2,104,940 | 30,690,025 | ||||
Kemper | 642,700 | 33,953,841 | ||||
Metropolitan Bank Holding † | 360,505 | 27,841,801 | ||||
S&T Bancorp | 331,356 | 9,745,180 | ||||
Sandy Spring Bancorp | 801,400 | 33,939,290 | ||||
Selective Insurance Group | 1,147,606 | 91,005,156 | ||||
Stewart Information Services | 665,500 | 36,928,595 | ||||
Stifel Financial | 2,185,450 | 140,240,327 | ||||
Synovus Financial | 1,797,400 | 76,659,110 | ||||
Umpqua Holdings | 5,304,400 | 93,622,660 | ||||
Valley National Bancorp | 6,934,700 | 88,140,037 | ||||
Webster Financial | 3,257,660 | 159,918,529 | ||||
Western Alliance Bancorp | 1,556,800 | 126,676,816 | ||||
1,782,604,476 | ||||||
Healthcare – 4.33% | ||||||
Avanos Medical † | 1,076,021 | 30,871,043 | ||||
Integer Holdings † | 716,600 | 57,170,348 | ||||
Integra LifeSciences | ||||||
Holdings † | 976,600 | 61,174,224 | ||||
NuVasive † | 751,662 | 43,152,915 | ||||
Select Medical Holdings | 1,476,600 | 35,955,210 | ||||
Service Corp. International | 697,100 | 48,817,913 | ||||
277,141,653 |
6
Number of | ||||||
shares | Value (US $) | |||||
Common Stocks ◆ (continued) | ||||||
Industrials – 12.18% | ||||||
Altra Industrial Motion | 1,528,643 | $ | 59,938,092 | |||
Atkore † | 1,031,100 | 112,307,412 | ||||
CACI International Class A † | 196,412 | 55,068,032 | ||||
Deluxe | 505,400 | 12,094,222 | ||||
H&E Equipment Services | 870,200 | 31,022,630 | ||||
ITT | 1,102,030 | 81,351,855 | ||||
KBR | 1,219,372 | 60,675,951 | ||||
MasTec † | 1,584,529 | 132,450,779 | ||||
Primoris Services | 1,348,100 | 32,731,868 | ||||
Regal Rexnord | 330,539 | 41,300,848 | ||||
WESCO International † | 933,500 | 117,228,930 | ||||
Zurn Water Solutions | 1,482,500 | 42,725,650 | ||||
778,896,269 | ||||||
Real Estate Investment Trusts – 7.77% | ||||||
Brandywine Realty Trust | 4,329,337 | 48,272,108 | ||||
Independence Realty Trust | 1,357,100 | 31,905,421 | ||||
Kite Realty Group Trust | 2,735,914 | 57,344,757 | ||||
Life Storage | 503,500 | 58,788,660 | ||||
LXP Industrial Trust | 4,373,500 | 50,557,660 | ||||
National Health Investors | 914,900 | 54,116,335 | ||||
Outfront Media | 3,122,000 | 64,406,860 | ||||
RPT Realty | 2,707,889 | 32,955,009 | ||||
Spirit Realty Capital | 1,680,300 | 70,555,797 | ||||
Summit Hotel Properties † | 3,199,900 | 27,967,126 | ||||
496,869,733 | ||||||
Technology – 9.77% | ||||||
Cirrus Logic † | 679,000 | 55,365,660 | ||||
Concentrix | 301,900 | 46,761,291 | ||||
Diodes † | 553,727 | 42,642,516 | ||||
Flex † | 4,671,010 | 79,734,141 | ||||
NCR † | 1,111,158 | 38,546,071 | ||||
NetScout Systems † | 1,216,506 | 41,762,651 | ||||
Power Integrations | 423,786 | 35,759,063 | ||||
TD SYNNEX | 431,600 | 44,821,660 | ||||
Teradyne | 296,800 | 32,428,368 | ||||
Tower Semiconductor † | 1,620,100 | 78,186,026 | ||||
TTM Technologies † | 4,101,302 | 58,607,605 | ||||
Viavi Solutions † | 3,533,000 | 51,122,510 | ||||
Vishay Intertechnology | 957,000 | 19,561,080 | ||||
625,298,642 |
7
Schedule of investments
Delaware Small Cap Value Fund
Number of | ||||||
shares | Value (US $) | |||||
Common Stocks ◆ (continued) | ||||||
Transportation – 2.05% | ||||||
Kirby † | 723,900 | $ | 48,884,967 | |||
Saia † | 113,350 | 22,396,827 | ||||
Werner Enterprises | 1,481,800 | 60,116,626 | ||||
131,398,420 | ||||||
Utilities – 3.71% | ||||||
ALLETE | 820,000 | 50,856,400 | ||||
Black Hills | 1,022,590 | 78,391,749 | ||||
OGE Energy | 1,057,300 | 43,666,490 | ||||
Southwest Gas Holdings | 692,400 | 64,483,212 | ||||
237,397,851 | ||||||
Total Common Stocks (cost $4,302,370,608) | 6,345,036,095 | |||||
Short-Term Investments – 0.76% | ||||||
Money Market Mutual Funds – 0.76% | ||||||
BlackRock FedFund – Institutional Shares (seven-day | ||||||
effective yield 0.72%) | 12,097,715 | 12,097,715 | ||||
Fidelity Investments Money Market Government | ||||||
Portfolio – Class I (seven-day effective yield 0.60%) | 12,097,714 | 12,097,714 | ||||
GS Financial Square Government Fund – Institutional | ||||||
Shares (seven-day effective yield 0.71%) | 12,097,715 | 12,097,715 | ||||
Morgan Stanley Government Portfolio – Institutional | ||||||
Share Class (seven-day effective yield 0.71%) | 12,097,715 | 12,097,715 | ||||
Total Short-Term Investments (cost $48,390,859) | 48,390,859 | |||||
Total Value of Securities—99.94% | ||||||
(cost $4,350,761,467) | $ | 6,393,426,954 |
◆ | 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.
8
Statement of assets and liabilities | |
Delaware Small Cap Value Fund | May 31, 2022 (Unaudited) |
Assets: | ||||
Investments, at value* | $ | 6,393,426,954 | ||
Cash | 495,959 | |||
Receivable for securities sold | 18,512,525 | |||
Receivable for fund shares sold | 8,131,447 | |||
Dividends and interest receivable | 5,468,798 | |||
Other assets | 47,973 | |||
Total Assets | 6,426,083,656 | |||
Liabilities: | ||||
Payable for securities purchased | 14,868,899 | |||
Payable for fund shares redeemed | 8,113,528 | |||
Investment management fees payable to affiliates | 3,328,600 | |||
Dividend disbursing and transfer agent fees and expenses payable to | ||||
non-affiliates | 1,569,331 | |||
Other accrued expenses | 353,293 | |||
Distribution fees payable to affiliates | 249,145 | |||
Dividend disbursing and transfer agent fees and expenses payable to | ||||
affiliates | 51,143 | |||
Trustees’ fees and expenses payable to affiliates | 44,087 | |||
Accounting and administration expenses payable to affiliates | 15,222 | |||
Legal fees payable to affiliates | 8,165 | |||
Reports and statements to shareholders expenses payable to affiliates | 3,714 | |||
Distribution payable | 17 | |||
Total Liabilities | 28,605,144 | |||
Total Net Assets | $ | 6,397,478,512 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 4,070,935,550 | ||
Total distributable earnings (loss) | 2,326,542,962 | |||
Total Net Assets | $ | 6,397,478,512 |
9
Statement of assets and liabilities
Delaware Small Cap Value Fund
Net Asset Value
Class A: | |||
Net assets | $ | 928,309,283 | |
Shares of beneficial interest outstanding, unlimited authorization, no par | 13,029,256 | ||
Net asset value per share | $ | 71.25 | |
Sales charge | 5.75 | % | |
Offering price per share, equal to net asset value per share / (1 - sales | |||
charge) | $ | 75.60 | |
Class C: | |||
Net assets | $ | 45,336,246 | |
Shares of beneficial interest outstanding, unlimited authorization, no par | 802,483 | ||
Net asset value per share | $ | 56.49 | |
Class R: | |||
Net assets | $ | 47,864,214 | |
Shares of beneficial interest outstanding, unlimited authorization, no par | 696,355 | ||
Net asset value per share | $ | 68.74 | |
Institutional Class: | |||
Net assets | $ | 3,896,141,528 | |
Shares of beneficial interest outstanding, unlimited authorization, no par | 51,300,129 | ||
Net asset value per share | $ | 75.95 | |
Class R6: | |||
Net assets | $ | 1,479,827,241 | |
Shares of beneficial interest outstanding, unlimited authorization, no par | 19,439,503 | ||
Net asset value per share | $ | 76.12 | |
___________________ | |||
*Investments, at cost | $ | 4,350,761,467 |
See accompanying notes, which are an integral part of the financial statements.
10
Statement of operations | |
Delaware Small Cap Value Fund | Six months ended May 31, 2022 (Unaudited) |
Investment Income: | ||||
Dividends | $ | 51,803,586 | ||
Interest | 30,530 | |||
51,834,116 | ||||
Expenses: | ||||
Management fees | 20,982,213 | |||
Distribution expenses — Class A | 1,243,813 | |||
Distribution expenses — Class C | 251,198 | |||
Distribution expenses — Class R | 130,682 | |||
Dividend disbursing and transfer agent fees and expenses | 4,954,018 | |||
Administration expenses | 478,100 | |||
Reports and statements to shareholders expenses | 468,665 | |||
Legal fees | 157,738 | |||
Trustees’ fees and expenses | 115,523 | |||
Custodian fees | 87,629 | |||
Registration fees | 82,913 | |||
Audit and tax fees | 15,868 | |||
Other | 66,917 | |||
29,035,277 | ||||
Less expenses paid indirectly | (1,596 | ) | ||
Total operating expenses | 29,033,681 | |||
Net Investment Income | 22,800,435 | |||
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain on investments | 292,365,429 | |||
Net change in unrealized appreciation (depreciation) of investments | (382,089,238 | ) | ||
Net Realized and Unrealized Loss | (89,723,809 | ) | ||
Net Decrease in Net Assets Resulting from Operations | $ | (66,923,374 | ) |
See accompanying notes, which are an integral part of the financial statements.
11
Statements of changes in net assets
Delaware Small Cap Value Fund
Six months | |||||||||
ended | |||||||||
5/31/22 | Year ended | ||||||||
(Unaudited) | 11/30/21 | ||||||||
Increase (Decrease) in Net Assets from Operations: | |||||||||
Net investment income | $ | 22,800,435 | $ | 38,381,921 | |||||
Net realized gain | 292,365,429 | 300,690,716 | |||||||
Net change in unrealized appreciation (depreciation) | (382,089,238 | ) | 1,371,417,516 | ||||||
Net increase (decrease) in net assets resulting from | |||||||||
operations | (66,923,374 | ) | 1,710,490,153 | ||||||
Dividends and Distributions to Shareholders from: | |||||||||
Distributable earnings: | |||||||||
Class A | (45,458,345 | ) | (4,041,420 | ) | |||||
Class C | (2,658,184 | ) | (68,123 | ) | |||||
Class R | (2,387,422 | ) | (221,432 | ) | |||||
Institutional Class | (174,740,223 | ) | (28,075,733 | ) | |||||
Class R6 | (72,885,947 | ) | (9,897,320 | ) | |||||
(298,130,121 | ) | (42,304,028 | ) | ||||||
Capital Share Transactions: | |||||||||
Proceeds from shares sold: | |||||||||
Class A | 68,709,569 | 248,099,098 | |||||||
Class C | 4,128,218 | 14,387,495 | |||||||
Class R | 5,248,644 | 18,583,571 | |||||||
Institutional Class | 559,801,366 | 1,046,374,208 | |||||||
Class R6 | 221,780,621 | 748,398,598 | |||||||
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 | 45,074,335 | 3,975,321 | |||||||
Class C | 2,654,661 | 67,426 | |||||||
Class R | 2,387,422 | 221,408 | |||||||
Institutional Class | 165,309,317 | 26,608,971 | |||||||
Class R6 | 71,157,932 | 9,612,283 | |||||||
1,146,252,085 | 2,382,292,769 |
12
Six months | |||||||||
ended | |||||||||
5/31/22 | Year ended | ||||||||
(Unaudited) | 11/30/21 | ||||||||
Capital Share Transactions (continued): | |||||||||
Cost of shares redeemed: | |||||||||
Class A | $ | (146,485,588 | ) | $ | (251,060,887 | ) | |||
Class C | (9,123,564 | ) | (24,586,224 | ) | |||||
Class R | (11,397,755 | ) | (23,100,566 | ) | |||||
Institutional Class | (570,174,088 | ) | (1,325,435,282 | ) | |||||
Class R6 | (330,036,324 | ) | (428,438,058 | ) | |||||
(1,067,217,319 | ) | (2,052,621,017 | ) | ||||||
Increase in net assets derived from capital share | |||||||||
transactions | 79,034,766 | 329,671,752 | |||||||
Net Increase (Decrease) in Net Assets | (286,018,729 | ) | 1,997,857,877 | ||||||
Net Assets: | |||||||||
Beginning of period | 6,683,497,241 | 4,685,639,364 | |||||||
End of period | $ | 6,397,478,512 | $ | 6,683,497,241 |
1 | See Note 5 in “Notes to financial statements.” |
See accompanying notes, which are an integral part of the financial statements.
13
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 income2 |
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 return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets4 |
Ratio of net investment income to average net assets |
Portfolio turnover |
1 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
2 | Calculated using average shares outstanding. |
3 | 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. |
4 | 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.
14
Six months ended | ||||||||||||||||||||||||||
5/31/221 | Year ended | |||||||||||||||||||||||||
(Unaudited) | 11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | |||||||||||||||||||||
$ | 75.49 | $ | 55.68 | $ | 61.58 | $ | 61.81 | $ | 67.13 | $ | 58.16 | |||||||||||||||
0.16 | 0.28 | 0.39 | 0.52 | 0.37 | 0.34 | |||||||||||||||||||||
(4.12 | ) | 19.94 | (3.67 | ) | 3.63 | (4.81 | ) | 8.94 | ||||||||||||||||||
(3.96 | ) | 20.22 | (3.28 | ) | 4.15 | (4.44 | ) | 9.28 | ||||||||||||||||||
(0.28 | ) | (0.41 | ) | (0.58 | ) | (0.42 | ) | (0.27 | ) | (0.31 | ) | |||||||||||||||
— | — | (2.04 | ) | (3.96 | ) | (0.61 | ) | — | ||||||||||||||||||
(0.28 | ) | (0.41 | ) | (2.62 | ) | (4.38 | ) | (0.88 | ) | (0.31 | ) | |||||||||||||||
$ | 71.25 | $ | 75.49 | $ | 55.68 | $ | 61.58 | $ | 61.81 | $ | 67.13 | |||||||||||||||
(1.23% | ) | 36.52% | (5.70% | ) | 8.69% | (6.70% | ) | 16.01% | ||||||||||||||||||
$ | 928,310 | $ | 1,016,518 | $ | 551,442 | $ | 637,146 | $ | 733,864 | $ | 881,709 | |||||||||||||||
1.12% | 1.11% | 1.14% | 1.15% | 1.15% | 1.18% | |||||||||||||||||||||
0.44% | 0.38% | 0.80% | 0.90% | 0.56% | 0.55% | |||||||||||||||||||||
10% | 14% | 23% | 18% | 18% | 15% |
15
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)2 |
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 return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets4 |
Ratio of net investment income (loss) to average net assets |
Portfolio turnover |
1 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
2 | Calculated using average shares outstanding. |
3 | 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. |
4 | 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.
16
Six months ended | ||||||||||||||||||||||||||
5/31/221 | Year ended | |||||||||||||||||||||||||
(Unaudited) | 11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | |||||||||||||||||||||
$ | 60.49 | $ | 44.71 | $ | 49.95 | $ | 50.96 | $ | 55.65 | $ | 48.34 | |||||||||||||||
(0.09 | ) | (0.21 | ) | 0.02 | 0.07 | (0.10 | ) | (0.10 | ) | |||||||||||||||||
(3.91 | ) | 16.06 | (3.00 | ) | 2.88 | (3.98 | ) | 7.43 | ||||||||||||||||||
(4.00 | ) | 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 | ) | ||||||||||||||||
$ | 56.49 | $ | 60.49 | $ | 44.71 | $ | 49.95 | $ | 50.96 | $ | 55.65 | |||||||||||||||
(1.61% | ) | 35.48% | (6.38% | ) | 7.88% | (7.41% | ) | 15.17% | ||||||||||||||||||
$ | 45,336 | $ | 51,078 | $ | 46,463 | $ | 69,109 | $ | 74,828 | $ | 105,757 | |||||||||||||||
1.87% | 1.86% | 1.89% | 1.90% | 1.90% | 1.93% | |||||||||||||||||||||
(0.31% | ) | (0.37% | ) | 0.05% | 0.15% | (0.19% | ) | (0.20% | ) | |||||||||||||||||
10% | 14% | 23% | 18% | 18% | 15% |
17
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 income2 |
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 return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets4 |
Ratio of net investment income to average net assets |
Portfolio turnover |
1 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
2 | Calculated using average shares outstanding. |
3 | 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. |
4 | 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.
18
Six months ended | ||||||||||||||||||||||||||
5/31/221 | Year ended | |||||||||||||||||||||||||
(Unaudited) | 11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | |||||||||||||||||||||
$ | 72.83 | $ | 53.74 | $ | 59.52 | $ | 59.86 | $ | 65.05 | $ | 56.40 | |||||||||||||||
0.07 | 0.09 | 0.26 | 0.36 | 0.20 | 0.18 | |||||||||||||||||||||
(4.09 | ) | 19.28 | (3.56 | ) | 3.52 | (4.66 | ) | 8.66 | ||||||||||||||||||
(4.02 | ) | 19.37 | (3.30 | ) | 3.88 | (4.46 | ) | 8.84 | ||||||||||||||||||
(0.07 | ) | (0.28 | ) | (0.44 | ) | (0.26 | ) | (0.12 | ) | (0.19 | ) | |||||||||||||||
— | — | (2.04 | ) | (3.96 | ) | (0.61 | ) | — | ||||||||||||||||||
(0.07 | ) | (0.28 | ) | (2.48 | ) | (4.22 | ) | (0.73 | ) | (0.19 | ) | |||||||||||||||
$ | 68.74 | $ | 72.83 | $ | 53.74 | $ | 59.52 | $ | 59.86 | $ | 65.05 | |||||||||||||||
(1.37% | ) | 36.18% | (5.92% | ) | 8.42% | (6.92% | ) | 15.71% | ||||||||||||||||||
$ | 47,864 | $ | 54,481 | $ | 43,823 | $ | 55,697 | $ | 62,791 | $ | 84,131 | |||||||||||||||
1.37% | 1.36% | 1.39% | 1.40% | 1.40% | 1.43% | |||||||||||||||||||||
0.19% | 0.13% | 0.55% | 0.65% | 0.31% | 0.30% | |||||||||||||||||||||
10% | 14% | 23% | 18% | 18% | 15% |
19
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 income2 |
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 return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets4 |
Ratio of net investment income to average net assets |
Portfolio turnover |
1 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
2 | Calculated using average shares outstanding. |
3 | 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. |
4 | 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.
20
Six months ended | ||||||||||||||||||||||||||
5/31/221 | Year ended | |||||||||||||||||||||||||
(Unaudited) | 11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | |||||||||||||||||||||
$ | 80.31 | $ | 59.19 | $ | 65.28 | $ | 65.29 | $ | 70.83 | $ | 61.32 | |||||||||||||||
0.27 | 0.48 | 0.55 | 0.70 | 0.57 | 0.52 | |||||||||||||||||||||
(4.19 | ) | 21.18 | (3.86 | ) | 3.86 | (5.08 | ) | 9.42 | ||||||||||||||||||
(3.92 | ) | 21.66 | (3.31 | ) | 4.56 | (4.51 | ) | 9.94 | ||||||||||||||||||
(0.44 | ) | (0.54 | ) | (0.74 | ) | (0.61 | ) | (0.42 | ) | (0.43 | ) | |||||||||||||||
— | — | (2.04 | ) | (3.96 | ) | (0.61 | ) | — | ||||||||||||||||||
(0.44 | ) | (0.54 | ) | (2.78 | ) | (4.57 | ) | (1.03 | ) | (0.43 | ) | |||||||||||||||
$ | 75.95 | $ | 80.31 | $ | 59.19 | $ | 65.28 | $ | 65.29 | $ | 70.83 | |||||||||||||||
(1.11% | ) | 36.84% | (5.43% | ) | 8.95% | (6.46% | ) | 16.30% | ||||||||||||||||||
$ | 3,896,142 | $ | 3,958,855 | $ | 3,115,293 | $ | 2,955,897 | $ | 2,731,344 | $ | 3,270,954 | |||||||||||||||
0.87% | 0.86% | 0.89% | 0.90% | 0.90% | 0.93% | |||||||||||||||||||||
0.69% | 0.63% | 1.05% | 1.15% | 0.81% | 0.80% | |||||||||||||||||||||
10% | 14% | 23% | 18% | 18% | 15% |
21
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 income2 |
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 return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets4 |
Ratio of net investment income to average net assets |
Portfolio turnover |
1 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
2 | Calculated using average shares outstanding. |
3 | 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. |
4 | 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
Six months ended | ||||||||||||||||||||||||||
5/31/221 | Year ended | |||||||||||||||||||||||||
(Unaudited) | 11/30/21 | 11/30/20 | 11/30/19 | 11/30/18 | 11/30/17 | |||||||||||||||||||||
$ | 80.53 | $ | 59.32 | $ | 65.41 | $ | 65.41 | $ | 70.95 | $ | 61.38 | |||||||||||||||
0.34 | 0.61 | 0.64 | 0.81 | 0.69 | 0.65 | |||||||||||||||||||||
(4.20 | ) | 21.21 | (3.85 | ) | 3.85 | (5.08 | ) | 9.43 | ||||||||||||||||||
(3.86 | ) | 21.82 | (3.21 | ) | 4.66 | (4.39 | ) | 10.08 | ||||||||||||||||||
(0.55 | ) | (0.61 | ) | (0.84 | ) | (0.70 | ) | (0.54 | ) | (0.51 | ) | |||||||||||||||
— | — | (2.04 | ) | (3.96 | ) | (0.61 | ) | — | ||||||||||||||||||
(0.55 | ) | (0.61 | ) | (2.88 | ) | (4.66 | ) | (1.15 | ) | (0.51 | ) | |||||||||||||||
$ | 76.12 | $ | 80.53 | $ | 59.32 | $ | 65.41 | $ | 65.41 | $ | 70.95 | |||||||||||||||
(1.03% | ) | 37.08% | (5.28% | ) | 9.14% | (6.29% | ) | 16.52% | ||||||||||||||||||
$ | 1,479,827 | $ | 1,602,565 | $ | 928,618 | $ | 605,623 | $ | 394,064 | $ | 207,719 | |||||||||||||||
0.70% | 0.69% | 0.72% | 0.72% | 0.72% | 0.75% | |||||||||||||||||||||
0.86% | 0.80% | 1.22% | 1.33% | 0.99% | 0.98% | |||||||||||||||||||||
10% | 14% | 23% | 18% | 18% | 15% |
23
Notes to financial statements | |
Delaware Small Cap Value Fund | May 31, 2022 (Unaudited) |
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
24
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 six months ended May 31, 2022, and for all open tax years (years ended November 30, 2018–November 30, 2021), 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 six months ended May 31, 2022, 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 (including 12d1-4). 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
25
Notes to financial statements
Delaware Small Cap Value Fund
1. Significant Accounting Policies (continued)
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 six months ended May 31, 2022. The expenses paid under this agreement are included on the "Statement of operations" under "Custodian fees" with the corresponding expenses offset included under "Less expenses paid indirectly."
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 six months ended May 31, 2022, the Fund earned $1,596 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 six months ended May 31, 2022, the Fund was charged $115,231 for these services.
26
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 six months ended May 31, 2022, the Fund was charged $302,157 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, Class C, and Class R shares, respectively. The 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 six months ended May 31, 2022, the Fund was charged $94,454 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 six months ended May 31, 2022, DDLP earned $24,538 for commissions on sales of the Fund’s Class A shares. For the six months ended May 31, 2022, DDLP received gross CDSC commissions of $1,569 and $3,287 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.
27
Notes to financial statements
Delaware Small Cap Value Fund
3. Investments
For the six months ended May 31, 2022, the Fund made purchases and sales of investment securities other than short-term investments as follows:
Purchases | $639,402,859 | |
Sales | 791,454,684 |
At May 31, 2022, the cost and unrealized appreciation (depreciation) of investments for federal income tax purposes have been estimated since final tax characteristics cannot be determined until fiscal year end. At May 31, 2022, the cost and unrealized appreciation (depreciation) of investments for the Fund were as follows:
Cost of investments | $4,350,761,467 | ||
Aggregate unrealized appreciation of investments | $2,234,945,174 | ||
Aggregate unrealized depreciation of investments | (192,279,687 | ) | |
Net unrealized appreciation of investments | $2,042,665,487 |
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) |
28
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 May 31, 2022:
Level 1 | ||
Securities | ||
Assets: | ||
Common Stocks | $ | 6,345,036,095 |
Short-Term Investments | 48,390,859 | |
Total Value of Securities | $ | 6,393,426,954 |
During the six months ended May 31, 2022, 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 period in relation to the Fund's net assets. During the six months ended May 31, 2022, there were no Level 3 investments.
4. Capital Shares
Transactions in capital shares were as follows:
Six months | |||
ended | Year ended | ||
5/31/22 | 11/30/21 | ||
Shares sold: | |||
Class A | 931,481 | 3,474,425 | |
Class C | 69,395 | 247,169 | |
Class R | 73,506 | 267,971 | |
Institutional Class | 7,144,576 | 13,773,855 | |
Class R6 | 2,823,111 | 9,815,380 |
29
Notes to financial statements
Delaware Small Cap Value Fund
4. Capital Shares (continued)
Six months | ||||||
ended | Year ended | |||||
5/31/22 | 11/30/21 | |||||
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 | 618,304 | 67,207 | ||||
Class C | 45,770 | 1,413 | ||||
Class R | 33,912 | 3,871 | ||||
Institutional Class | 2,129,726 | 423,912 | ||||
Class R6 | 915,332 | 152,940 | ||||
14,785,113 | 31,835,216 | |||||
Shares redeemed: | ||||||
Class A | (1,985,665 | ) | (3,552,435 | ) | ||
Class C | (157,063 | ) | (443,477 | ) | ||
Class R | (159,116 | ) | (339,226 | ) | ||
Institutional Class | (7,267,741 | ) | (17,571,312 | ) | ||
Class R6 | (4,198,081 | ) | (5,726,210 | ) | ||
(13,767,666 | ) | (27,632,660 | ) | |||
Net increase | 1,017,447 | 4,202,556 |
1 | See Note 5. |
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 six months ended May 31, 2022 and the year ended November 30, 2021, 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 | |||||||||
Six months ended | ||||||||||||||||
5/31/22 | 6,874 | 1,071 | 156,227 | — | 889 | 6,452 | 155,881 | $ | 12,400,117 | |||||||
Year ended | ||||||||||||||||
11/30/21 | 52,996 | 9,112 | 3,561,720 | 42,700 | 7,665 | 81,120 | 3,564,685 | 287,811,324 |
30
5. 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.
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.
31
Notes to financial statements
Delaware Small Cap Value Fund
6. Line of Credit
The Fund, along with certain other funds in the Delaware Funds (Participants), is a participant in a $355,000,000 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 expires on October 31, 2022.
The Fund had no amounts outstanding as of May 31, 2022, or at any time during the period then ended.
7. 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.
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,
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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 six months ended May 31, 2022, the Fund had no securities out on loan.
8. 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.
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Notes to financial statements
Delaware Small Cap Value Fund
8. Credit and Market Risk (continued)
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 six months ended May 31, 2022. 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 May 31, 2022, there were no Rule 144A securities held by the Fund.
9. 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.
10. Subsequent Events
Management has determined that no material events or transactions occurred subsequent to May 31, 2022, that would require recognition or disclosure in the Fund's financial statements.
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Other Fund information (Unaudited)
Delaware Small Cap Value Fund
Liquidity Risk Management Program
The Securities and Exchange Commission (the “SEC”) has adopted Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”), which requires all open-end funds (other than money market funds) to adopt and implement a program reasonably designed to assess and manage the fund’s “liquidity risk,” defined as the risk that the fund could not meet requests to redeem shares issued by the fund without significant dilution of remaining investors’ interests in the fund.
The Fund has adopted and implemented a liquidity risk management program in accordance with the Liquidity Rule (the “Program”). The Board has designated a member of the US Operational Risk Group of Macquarie Asset Management as the Program Administrator for each Fund in the Trust.
As required by the Liquidity Rule, the Program includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of the Fund’s liquidity risk; (2) classification of each of the Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments if, immediately after the acquisition, the Fund would hold more than 15% of its net assets in Illiquid assets. The Program also requires reporting to the SEC (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
In assessing and managing the Fund’s liquidity risk, the Program Administrator considers, as relevant, a variety of factors, including: (1) the Fund’s investment strategy and liquidity of portfolio investments during both normal and reasonably foreseeable stressed conditions; (2) short-term and long-term cash flow projections for the Fund during both normal and reasonably foreseeable stressed conditions; and (3) the Fund’s holdings of cash and cash equivalents and any borrowing arrangements. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or to sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value. The Fund primarily holds assets that are classified as Highly Liquid, and therefore is not required to establish an HLIM.
At a meeting of the Board held on May 17-19, 2022, the Program Administrator provided the required written annual report to the Board addressing the Program’s operation and assessing the adequacy and effectiveness of its implementation for the period from April 1, 2021 through March 31, 2022. The report concluded that the Program is appropriately designed and effectively implemented and that it meets the requirements of Rule 22e-4 and the Fund’s liquidity needs. The Fund’s HLIM is set at an appropriate level and the Fund complied with its HLIM at all times during the reporting period.
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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 | Daniel V. Geatens Senior Vice President and Treasurer Delaware Funds by Macquarie | Richard Salus Senior Vice President and Chief Financial Officer Delaware Funds by Macquarie |
This semiannual 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.
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Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
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 240.15d-15(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: | August 3, 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: | August 3, 2022 |
/s/RICHARD SALUS | |
By: | Richard Salus |
Title: | Chief Financial Officer |
Date: | August 3, 2022 |