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: | 811-07972 | |
Exact name of registrant as specified in charter: | Delaware Group® Adviser Funds | |
Address of principal executive offices: | 2005 Market Street | |
Philadelphia, PA 19103 | ||
Name and address of agent for service: | David F. Connor, Esq. | |
2005 Market Street | ||
Philadelphia, PA 19103 | ||
Registrant’s telephone number, including area code: | (800) 523-1918 | |
Date of fiscal year end: | October 31 | |
Date of reporting period: | April 30, 2015 |
Item 1. Reports to Stockholders
Table of Contents
Semiannual report
U.S. growth equity mutual fund
Delaware U.S. Growth Fund
April 30, 2015
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 delawareinvestments.com 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 delawareinvestments.com/edelivery.
Table of Contents
Experience Delaware Investments
Delaware Investments is committed to the pursuit of consistently superior asset management and unparalleled client service. We believe in our investment processes, which seek to deliver consistent results, and in convenient services that help add value for our clients.
If you are interested in learning more about creating an investment plan, contact your financial advisor.
You can learn more about Delaware Investments or obtain a prospectus for Delaware U.S. Growth Fund at delawareinvestments.com.
Manage your investments online
● | 24-hour access to your account information |
● | Obtain share prices |
● | Check your account balance and recent transactions |
● | Request statements or literature |
● | Make purchases and redemptions |
Delaware Management Holdings, Inc. and its subsidiaries (collectively known by the marketing name of Delaware Investments) are wholly owned subsidiaries of Macquarie Group Limited, a global provider of banking, financial, advisory, investment and funds management services.
Investments in Delaware U.S. Growth Fund are not and will not be deposits with or liabilities of Macquarie Bank Limited ABN 46 008 583 542 and its holding companies, including their subsidiaries or related companies (Macquarie Group), and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. No Macquarie Group company guarantees or will guarantee the performance of the Fund, the repayment of capital from the Fund, or any particular rate of return.
1 | ||||
Security type / sector allocation and top 10 equity holdings | 3 | |||
5 | ||||
8 | ||||
10 | ||||
12 | ||||
14 | ||||
22 | ||||
32 | ||||
37 |
Unless otherwise noted, views expressed herein are current as of April 30, 2015, and subject to change for events occurring after such date.
Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested. Mutual fund advisory services provided by Delaware Management Company, a series of Delaware Management Business Trust, which is a registered investment advisor. Delaware Investments, a member of Macquarie Group, refers to Delaware Management Holdings, Inc. and its subsidiaries, including the Fund’s distributor, Delaware Distributors, L.P. Macquarie Group refers to Macquarie Group Limited and its subsidiaries and affiliates worldwide.
© 2015 Delaware Management Holdings, Inc.
All third-party marks cited are the property of their respective owners.
Table of Contents
For the six-month period from November 1, 2014 to April 30, 2015 (Unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and/or 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 Nov. 1, 2014 to April 30, 2015.
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 expenses shown in the table assume reinvestment of all dividends and distributions.
1
Table of Contents
Disclosure of Fund expenses
For the six-month period from November 1, 2014 to April 30, 2015 (Unaudited)
Delaware U.S. Growth Fund
Expense analysis of an investment of $1,000
Beginning | Ending | Expenses | ||||||
Account Value | Account Value | Annualized | Paid During Period | |||||
11/1/14 | 4/30/15 | Expense Ratio | 11/1/14 to 4/30/15* | |||||
| ||||||||
Actual Fund return† | ||||||||
Class A | $1,000.00 | $1,065.50 | 1.06% | $5.43 | ||||
Class C | 1,000.00 | 1,061.60 | 1.81% | 9.25 | ||||
Class R | 1,000.00 | 1,064.20 | 1.31% | 6.70 | ||||
Institutional Class | 1,000.00 | 1,066.90 | 0.81% | 4.15 | ||||
| ||||||||
Hypothetical 5% return (5% return before expenses) | ||||||||
Class A | $1,000.00 | $1,019.54 | 1.06% | $5.31 | ||||
Class C | 1,000.00 | 1,015.82 | 1.81% | 9.05 | ||||
Class R | 1,000.00 | 1,018.30 | 1.31% | 6.56 | ||||
Institutional Class | 1,000.00 | 1,020.78 | 0.81% | 4.06 | ||||
|
* | “Expenses Paid During Period” are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (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. |
2
Table of Contents
Security type / sector allocation
and top 10 equity holdings
Delaware U.S. Growth Fund | As of April 30, 2015 (Unaudited) |
Sector designations may be different than the sector designations presented in other Fund materials. The sector designations may represent the investment manager’s internal sector classifications, which may result in the sector designations for one fund being different than another fund’s sector designations.
Security type / sector
| Percentage of net assets
| ||||
Common Stock² | 98.05 | % | |||
Consumer Discretionary | 24.27 | % | |||
Consumer Staples | 4.39 | % | |||
Energy | 7.44 | % | |||
Financial Services | 15.41 | % | |||
Healthcare | 18.62 | % | |||
Technology | 27.92 | % | |||
Short-Term Investments | 1.36 | % | |||
Total Value of Securities | 99.41 | % | |||
Receivables and Other Assets Net of Liabilities | 0.59 | % | |||
Total Net Assets | 100.00 | % |
² | Narrow industries are utilized for compliance purposes for diversification whereas broad sectors are used for financial reporting. |
To monitor compliance with the Fund’s concentration guidelines as described in the Fund’s prospectus and statement of additional information, the technology sector (as disclosed herein for financial reporting purposes) is subdivided into a variety of “industries” (in accordance with the requirements of the 1940 Act) such as internet, semiconductors, and software. As of April 30, 2015 such amounts, as a percentage of total net assets, were 11.69%, 5.88%, and 10.35%, respectively. The percentage in any such single industry will comply with the Fund’s concentration policy even if the percentage in the “Technology sector” for financial reporting purposes may exceed 25%.
3
Table of Contents
Security type / sector allocation
and top 10 equity holdings
Delaware U.S. Growth 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
| ||||
QUALCOMM | 5.88 | % | |||
Celgene | 5.19 | % | |||
Visa Class A | 4.96 | % | |||
eBay | 4.67 | % | |||
MasterCard Class A | 4.43 | % | |||
Equinix | 4.42 | % | |||
Walgreens Boots Alliance | 4.39 | % | |||
Liberty Interactive Class A | 3.89 | % | |||
Valeant Pharmaceuticals International | 3.74 | % | |||
Crown Castle International | 3.65 | % | |||
4
Table of Contents
Delaware U.S. Growth Fund | April 30, 2015 (Unaudited) |
Number of shares | Value (U.S. $) | |||||||
| ||||||||
Common Stock – 98.05%² | ||||||||
| ||||||||
Consumer Discretionary – 24.27% | ||||||||
Discovery Communications Class A † | 982,992 | $ | 31,809,621 | |||||
Discovery Communications Class C † | 2,657,808 | 80,345,536 | ||||||
eBay † | 3,017,144 | 175,778,809 | ||||||
L Brands | 1,278,935 | 114,285,632 | ||||||
Liberty Interactive Class A † | 5,085,860 | 146,269,334 | ||||||
NIKE Class B | 889,659 | 87,933,896 | ||||||
Priceline Group † | 80,815 | 100,033,615 | ||||||
Sally Beauty Holdings † | 1,714,445 | 53,507,828 | ||||||
TripAdvisor † | 1,123,380 | 90,420,856 | ||||||
Wynn Resorts | 292,075 | 32,440,770 | ||||||
|
| |||||||
912,825,897 | ||||||||
|
| |||||||
Consumer Staples – 4.39% | ||||||||
Walgreens Boots Alliance | 1,990,295 | 165,055,164 | ||||||
|
| |||||||
165,055,164 | ||||||||
|
| |||||||
Energy – 7.44% | ||||||||
EOG Resources | 930,453 | 92,068,324 | ||||||
Kinder Morgan | 2,062,109 | 88,567,582 | ||||||
Williams | 1,941,051 | 99,362,401 | ||||||
|
| |||||||
279,998,307 | ||||||||
|
| |||||||
Financial Services – 15.41% | ||||||||
Crown Castle International | 1,642,765 | 137,220,160 | ||||||
Intercontinental Exchange | 399,052 | 89,599,146 | ||||||
MasterCard Class A | 1,846,001 | 166,527,750 | ||||||
Visa Class A | 2,822,499 | 186,426,059 | ||||||
|
| |||||||
579,773,115 | ||||||||
|
| |||||||
Healthcare – 18.62% | ||||||||
Actavis | 448,702 | 126,919,848 | ||||||
Biogen † | 264,825 | 99,026,012 | ||||||
Celgene † | 1,805,230 | 195,073,154 | ||||||
Novo Nordisk ADR | 2,261,060 | 127,229,846 | ||||||
Perrigo | 64,002 | 11,730,287 | ||||||
Valeant Pharmaceuticals International † | 648,340 | 140,644,396 | ||||||
|
| |||||||
700,623,543 | ||||||||
|
| |||||||
Technology – 27.92% | ||||||||
Adobe Systems † | 983,219 | 74,783,637 | ||||||
Baidu ADR † | 431,133 | 86,347,317 | ||||||
Electronic Arts † | 1,856,700 | 107,855,703 | ||||||
Equinix | 649,632 | 166,260,318 | ||||||
Google Class A † | 140,279 | 76,980,907 | ||||||
Google Class C † | 141,264 | 75,906,678 | ||||||
Intuit | 753,669 | 75,615,611 |
5
Table of Contents
Schedule of investments
Delaware U.S. Growth Fund
Number of shares | Value (U.S. $) | |||||||
| ||||||||
Common Stock² (continued) | ||||||||
| ||||||||
Technology (continued) | ||||||||
Microsoft | 2,698,007 | $ | 131,231,060 | |||||
QUALCOMM | 3,253,643 | 221,247,617 | ||||||
Yelp † | 866,481 | 34,130,687 | ||||||
|
| |||||||
1,050,359,535 | ||||||||
|
| |||||||
Total Common Stock (cost $2,985,556,166) | 3,688,635,561 | |||||||
|
| |||||||
Principal amount° | ||||||||
| ||||||||
Short-Term Investments – 1.36% | ||||||||
| ||||||||
Discount Notes – 0.48%≠ | ||||||||
Federal Home Loan Bank | ||||||||
0.05% 6/1/15 | 2,194,301 | 2,194,231 | ||||||
0.065% 6/5/15 | 971,509 | 971,474 | ||||||
0.075% 6/4/15 | 6,220,161 | 6,219,943 | ||||||
0.075% 6/29/15 | 6,220,161 | 6,219,782 | ||||||
0.08% 7/17/15 | 998,080 | 997,973 | ||||||
0.08% 7/22/15 | 1,330,773 | 1,330,622 | ||||||
|
| |||||||
17,934,025 | ||||||||
|
| |||||||
Repurchase Agreements – 0.88% | ||||||||
Bank of America Merrill Lynch | 11,769,148 | 11,769,148 | ||||||
Bank of Montreal | 9,807,623 | 9,807,623 | ||||||
BNP Paribas | 11,620,229 | 11,620,229 | ||||||
|
| |||||||
33,197,000 | ||||||||
|
| |||||||
Total Short-Term Investments (cost $51,130,212) | 51,131,025 | |||||||
|
| |||||||
Total Value of Securities – 99.41% | $ | 3,739,766,586 | ||||||
|
|
² | Narrow industries are utilized for compliance purposes for diversification whereas broad sectors are used for financial reporting. |
≠ | The rate shown is the effective yield at the time of purchase. |
6
Table of Contents
° | Principal amount shown is stated in U.S. dollars unless noted that the security is denominated in another currency. |
† | Non-income-producing security. |
ADR – American Depositary Receipt
See accompanying notes, which are an integral part of the financial statements.
7
Table of Contents
Statement of assets and liabilities
| ||
Delaware U.S. Growth Fund | April 30, 2015 (Unaudited) |
Assets: | ||||
Investments, at value1 | $ | 3,688,635,561 | ||
Short-term investments, at value2 | 51,131,025 | |||
Cash | 156,991 | |||
Receivable for securities sold | 58,818,941 | |||
Receivable for fund shares sold | 8,173,296 | |||
Dividends and interest receivable | 1,782,760 | |||
|
| |||
Total assets | 3,808,698,574 | |||
|
| |||
Liabilities: | ||||
Payable for securities purchased | 39,009,773 | |||
Payable for fund shares redeemed | 4,085,245 | |||
Investment management fees payable | 1,714,419 | |||
Other accrued expenses | 1,610,490 | |||
Distribution fees payable | 177,448 | |||
Other affiliates payable | 95,485 | |||
Trustees’ fees and expenses payable | 8,801 | |||
|
| |||
Total liabilities | 46,701,661 | |||
|
| |||
Total Net Assets | $ | 3,761,996,913 | ||
|
| |||
Net Assets Consist of: | ||||
Paid-in capital | $ | 2,691,926,065 | ||
Undistributed net investment income | 5,933,301 | |||
Accumulated net realized gain on investments | 361,057,339 | |||
Net unrealized appreciation of investments | 703,080,208 | |||
|
| |||
Total Net Assets | $ | 3,761,996,913 | ||
|
|
8
Table of Contents
Net Asset Value | ||||
Class A: | ||||
Net assets | $ | 401,016,148 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 15,094,151 | |||
Net asset value per share | $ | 26.57 | ||
Sales charge | 5.75 | % | ||
Offering price per share, equal to net asset value per share / (1 – sales charge) | $ | 28.19 | ||
Class C: | ||||
Net assets | $ | 102,022,257 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 4,198,078 | |||
Net asset value per share | $ | 24.30 | ||
Class R: | ||||
Net assets | $ | 25,465,346 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 985,162 | |||
Net asset value per share | $ | 25.85 | ||
Institutional Class: | ||||
Net assets | $ | 3,233,493,162 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 114,471,605 | |||
Net asset value per share | $ | 28.25 |
1Investments, at cost | $ | 2,985,556,166 | ||
2Short-term investments, at cost | 51,130,212 |
See accompanying notes, which are an integral part of the financial statements.
9
Table of Contents
Delaware U.S. Growth Fund | Six months ended April 30, 2015 (Unaudited) |
Investment Income: | ||||
Dividends | $ | 23,252,072 | ||
Interest | 20,651 | |||
Foreign tax withheld | (227,522 | ) | ||
|
| |||
23,045,201 | ||||
|
| |||
Expenses: | ||||
Management fees | 9,981,914 | |||
Distribution expenses – Class A | 474,308 | |||
Distribution expenses – Class C | 477,553 | |||
Distribution expenses – Class R | 62,705 | |||
Dividend disbursing and transfer agent fees and expenses | 3,105,062 | |||
Accounting and administration expenses | 575,682 | |||
Reports and statements to shareholders | 527,191 | |||
Legal fees | 142,955 | |||
Registration fees | 86,167 | |||
Trustees’ fees and expenses | 82,480 | |||
Custodian fees | 76,670 | |||
Audit and tax | 16,152 | |||
Other | 51,304 | |||
|
| |||
15,660,143 | ||||
Less expense paid indirectly | (289 | ) | ||
|
| |||
Total operating expenses | 15,659,854 | |||
|
| |||
Net Investment Income | 7,385,347 | |||
|
| |||
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain on investments | 364,437,426 | |||
Net change in unrealized appreciation (depreciation) of investments | (141,359,022 | ) | ||
|
| |||
Net Realized and Unrealized Gain | 223,078,404 | |||
|
| |||
Net Increase in Net Assets Resulting from Operations | $ | 230,463,751 | ||
|
|
See accompanying notes, which are an integral part of the financial statements.
10
Table of Contents
This page intentionally left blank.
Table of Contents
Statements of changes in net assets
Delaware U.S. Growth Fund
Six months ended 4/30/15 (Unaudited) | Year ended 10/31/14 | |||||||
Increase (Decrease) in Net Assets from Operations: | ||||||||
Net investment income | $ | 7,385,347 | $ | 13,677,132 | ||||
Net realized gain | 364,437,426 | 142,195,756 | ||||||
Net change in unrealized appreciation (depreciation) | (141,359,022 | ) | 318,136,773 | |||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 230,463,751 | 474,009,661 | ||||||
|
|
|
| |||||
Dividends and Distributions to Shareholders from: | ||||||||
Net investment income: | ||||||||
Class A | (811,997 | ) | — | |||||
Institutional Class | (12,926,365 | ) | (1,820,767 | ) | ||||
Net realized gain: | ||||||||
Class A | (9,901,170 | ) | — | |||||
Class C | (2,699,110 | ) | — | |||||
Class R | (642,640 | ) | — | |||||
Institutional Class | (76,134,095 | ) | — | |||||
|
|
|
| |||||
(103,115,377 | ) | (1,820,767 | ) | |||||
|
|
|
| |||||
Capital Share Transactions: | ||||||||
Proceeds from shares sold: | ||||||||
Class A | 83,218,157 | 254,971,002 | ||||||
Class B | — | 13,417 | �� | |||||
Class C | 15,363,724 | 25,719,809 | ||||||
Class R | 6,317,518 | 9,814,713 | ||||||
Institutional Class | 427,086,700 | 965,778,442 | ||||||
Net asset value of shares issued upon reinvestment of dividends and distributions: | ||||||||
Class A | 10,441,814 | — | ||||||
Class C | 2,632,615 | — | ||||||
Class R | 641,565 | — | ||||||
Institutional Class | 87,416,483 | 1,720,838 | ||||||
|
|
|
| |||||
633,118,576 | 1,258,018,221 | |||||||
|
|
|
|
12
Table of Contents
Six months ended 4/30/15 (Unaudited) | Year ended 10/31/14 | |||||||
Cost of shares redeemed: | ||||||||
Class A | $ | (57,213,737 | ) | $ | (247,749,954 | ) | ||
Class B | — | (1,613,327 | ) | |||||
Class C | (9,071,948 | ) | (15,208,519 | ) | ||||
Class R | (9,536,792 | ) | (10,164,108 | ) | ||||
Institutional Class | (374,631,296 | ) | (590,872,593 | ) | ||||
|
|
|
| |||||
(450,453,773 | ) | (865,608,501 | ) | |||||
|
|
|
| |||||
Increase in net assets derived from capital share transactions | 182,664,803 | 392,409,720 | ||||||
|
|
|
| |||||
Net Increase in Net Assets | 310,013,177 | 864,598,614 | ||||||
Net Assets: | ||||||||
Beginning of period | 3,451,983,736 | 2,587,385,122 | ||||||
|
|
|
| |||||
End of period | $ | 3,761,996,913 | $ | 3,451,983,736 | ||||
|
|
|
| |||||
Undistributed net investment income | $ | 5,933,301 | $ | 12,286,316 | ||||
|
|
|
|
See accompanying notes, which are an integral part of the financial statements.
13
Table of Contents
Delaware U.S. Growth 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 |
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 assets |
Ratio of expenses to average net assets prior to fees waived |
Ratio of net investment income (loss) to average net assets |
Ratio of net investment income (loss) to average net assets prior to fees waived |
Portfolio turnover |
|
1 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
2 | The average shares outstanding method has been applied for per share information. |
3 | Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during some of the periods shown reflects waivers by the manager and/or distributor. Performance would have been lower had the waivers not been in effect. |
See accompanying notes, which are an integral part of the financial statements.
14
Table of Contents
Six months ended 4/30/151 | Year ended | |||||||||||||||||||||||||
(Unaudited) | 10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | |||||||||||||||||||||
|
| |||||||||||||||||||||||||
$ 25.660 | $ | 21.970 | $ | 17.310 | $ | 14.960 | $ | 13.450 | $ | 11.100 | ||||||||||||||||
0.028 | 0.062 | (0.012 | ) | (0.031 | ) | 0.006 | (0.038 | ) | ||||||||||||||||||
1.634 | 3.628 | 4.672 | 2.381 | 1.504 | 2.388 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
1.662 | 3.690 | 4.660 | 2.350 | 1.510 | 2.350 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
(0.057) | — | — | — | — | — | |||||||||||||||||||||
(0.695) | — | — | — | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
(0.752) | — | — | — | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
$ 26.570 | $ | 25.660 | $ | 21.970 | $ | 17.310 | $ | 14.960 | $ | 13.450 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
6.55% | 16.80% | 26.92% | 15.71% | 11.23% | 21.17% | |||||||||||||||||||||
$401,016 | $ | 351,388 | $ | 290,303 | $ | 146,112 | $ | 60,615 | $ | 89,259 | ||||||||||||||||
1.06% | 1.06% | 1.09% | 1.10% | 1.10% | 1.07% | |||||||||||||||||||||
1.06% | 1.06% | 1.13% | 1.16% | 1.21% | 1.26% | |||||||||||||||||||||
0.22% | 0.26% | (0.06% | ) | (0.19% | ) | 0.04% | (0.31% | ) | ||||||||||||||||||
0.22% | 0.26% | (0.10% | ) | (0.25% | ) | (0.07% | ) | (0.50% | ) | |||||||||||||||||
22% | 25% | 23% | 20% | 25% | 22% | |||||||||||||||||||||
|
|
15
Table of Contents
Financial highlights
Delaware U.S. Growth 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 |
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 assets |
Ratio of expenses to average net assets prior to fees waived |
Ratio of net investment loss to average net assets |
Ratio of net investment loss to average net assets prior to fees waived |
Portfolio turnover |
|
1 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
2 | The average shares outstanding method has been applied for per share information. |
3 | Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during some of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
See accompanying notes, which are an integral part of the financial statements.
16
Table of Contents
Six months ended 4/30/151 | Year ended | |||||||||||||||||||||||
(Unaudited) | 10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | |||||||||||||||||||
| ||||||||||||||||||||||||
$ 23.560 | $ | 20.330 | $ | 16.130 | $ | 14.050 | $ | 12.720 | $ | 10.580 | ||||||||||||||
(0.063) | (0.107 | ) | (0.147 | ) | (0.146 | ) | (0.098 | ) | (0.123 | ) | ||||||||||||||
1.498 | 3.337 | 4.347 | 2.226 | 1.428 | 2.263 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
1.435 | 3.230 | 4.200 | 2.080 | 1.330 | 2.140 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
(0.695) | — | — | — | — | — | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
(0.695) | — | — | — | — | — | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
$ 24.300 | $ | 23.560 | $ | 20.330 | $ | 16.130 | $ | 14.050 | $ | 12.720 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
6.16% | 15.89% | 26.04% | 14.80% | 10.46% | 20.23% | |||||||||||||||||||
$102,022 | $ | 90,104 | $ | 67,898 | $ | 31,103 | $ | 13,456 | $ | 12,535 | ||||||||||||||
1.81% | 1.81% | 1.84% | 1.85% | 1.85% | 1.82% | |||||||||||||||||||
1.81% | 1.81% | 1.84% | 1.86% | 1.91% | 1.96% | |||||||||||||||||||
(0.53%) | (0.49%) | (0.81%) | (0.94%) | (0.71%) | (1.06%) | |||||||||||||||||||
(0.53%) | (0.49%) | (0.81%) | (0.95%) | (0.77%) | (1.20%) | |||||||||||||||||||
22% | 25% | 23% | 20% | 25% | 22% | |||||||||||||||||||
|
17
Table of Contents
Financial highlights
Delaware U.S. Growth 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 income (loss)2 |
Net realized and unrealized gain |
Total from investment operations |
Less dividends and distributions from: |
Net realized gain |
Total dividends and distributions |
Net asset value, end of period |
Total return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets prior to fees waived |
Ratio of net investment income (loss) to average net assets |
Ratio of net investment income (loss) 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 | The average shares outstanding method has been applied for per share information. |
3 | Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return during some of the periods shown reflects waivers by the manager and/or distributor. Performance would have been lower had the waivers not been in effect. |
See accompanying notes, which are an integral part of the financial statements.
18
Table of Contents
Six months ended 4/30/151 | Year ended | |||||||||||||||||||||||
(Unaudited) | 10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | |||||||||||||||||||
| ||||||||||||||||||||||||
$ 24.960 | $ | 21.430 | $ | 16.920 | $ | 14.660 | $ | 13.210 | $ | 10.930 | ||||||||||||||
(0.004) | 0.004 | (0.059 | ) | (0.073 | ) | (0.030 | ) | (0.067 | ) | |||||||||||||||
1.589 | 3.526 | 4.569 | 2.333 | 1.480 | 2.347 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
1.585 | 3.530 | 4.510 | 2.260 | 1.450 | 2.280 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
(0.695) | — | — | — | — | — | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
(0.695) | — | — | — | — | — | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
$ 25.850 | $ | 24.960 | $ | 21.430 | $ | 16.920 | $ | 14.660 | $ | 13.210 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
6.42% | 16.47% | 26.66% | 15.42% | 10.98% | 20.86% | |||||||||||||||||||
$ 25,466 | $ | 27,053 | $ | 23,815 | $ | 11,202 | $ | 1,697 | $ | 2,375 | ||||||||||||||
1.31% | 1.31% | 1.34% | 1.35% | 1.35% | 1.32% | |||||||||||||||||||
1.31% | 1.31% | 1.43% | 1.46% | 1.51% | 1.56% | |||||||||||||||||||
(0.03%) | 0.01% | (0.31% | ) | (0.44% | ) | (0.21% | ) | (0.56% | ) | |||||||||||||||
(0.03%) | 0.01% | (0.40% | ) | (0.55% | ) | (0.37% | ) | (0.80% | ) | |||||||||||||||
22% | 25% | 23% | 20% | 25% | 22% | |||||||||||||||||||
|
19
Table of Contents
Financial highlights
Delaware U.S. Growth 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 income (loss)2 |
Net realized and unrealized gain |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Net realized gain |
Total dividends and distributions |
Net asset value, end of period |
Total return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets prior to fees waived |
Ratio of net investment income (loss) to average net assets |
Ratio of net investment income (loss) 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 | The average shares outstanding method has been applied for per share information. |
3 | Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return during some of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
See accompanying notes, which are an integral part of the financial statements.
20
Table of Contents
Six months ended 4/30/151 | Year ended | |||||||||||||||||||||||
(Unaudited) | 10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | |||||||||||||||||||
| ||||||||||||||||||||||||
$ 27.260 | $ | 23.310 | $ | 18.340 | $ | 15.830 | $ | 14.220 | $ | 11.710 | ||||||||||||||
0.064 | 0.130 | 0.039 | 0.011 | 0.045 | (0.008 | ) | ||||||||||||||||||
1.739 | 3.839 | 4.959 | 2.520 | 1.587 | 2.527 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
1.803 | 3.969 | 4.998 | 2.531 | 1.632 | 2.519 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
(0.118) | (0.019 | ) | (0.028 | ) | (0.021 | ) | (0.022 | ) | (0.009 | ) | ||||||||||||||
(0.695) | — | — | — | — | — | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
(0.813) | (0.019 | ) | (0.028 | ) | (0.021 | ) | (0.022 | ) | (0.009 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
$ 28.250 | $ | 27.260 | $ | 23.310 | $ | 18.340 | $ | 15.830 | $ | 14.220 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
6.69% | 17.04% | 27.29% | 16.01% | 11.48% | 21.42% | |||||||||||||||||||
$3,233,493 | $ | 2,983,439 | $ | 2,203,909 | $ | 922,606 | $ | 563,004 | $ | 477,361 | ||||||||||||||
0.81% | 0.81% | 0.84% | 0.85% | 0.85% | 0.82% | |||||||||||||||||||
0.81% | 0.81% | 0.84% | 0.86% | 0.91% | 0.96% | |||||||||||||||||||
0.47% | 0.51% | 0.19% | 0.06% | 0.29% | (0.06% | ) | ||||||||||||||||||
0.47% | 0.51% | 0.19% | 0.05% | 0.23% | (0.20% | ) | ||||||||||||||||||
22% | 25% | 23% | 20% | 25% | 22% | |||||||||||||||||||
|
21
Table of Contents
Delaware U.S. Growth Fund | April 30, 2015 (Unaudited) |
Delaware Group® Adviser Funds (Trust) is organized as a Delaware statutory trust and offers three series: Delaware Diversified Income Fund, Delaware Global Real Estate Opportunities Fund, and Delaware U.S. Growth Fund. These financial statements and the related notes pertain to Delaware U.S. Growth Fund (Fund). The Trust is an open-end investment company. The Fund is considered diversified under the Investment Company Act of 1940, as amended, and offers Class A, Class C, Class R, and Institutional Class shares. Class A shares are sold with a maximum front-end sales charge of 5.75%. Class A share purchases of $1,000,000 or more will incur a contingent deferred sales charge (CDSC) of 1.00% if redeemed during the first year and 0.50% during the second year, provided that Delaware Distributors, L.P. (DDLP) paid a financial advisor a commission on the purchase of those shares. Effective Sept. 25, 2014, all remaining shares of Class B were converted to Class A shares. Class C shares are sold with a CDSC of 1.00%, 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.
The investment objective of the Fund is to seek long-term capital appreciation by investing in equity securities of companies believed to have the potential for sustainable free cash flow growth.
1. Significant Accounting Policies
The following accounting policies are in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and are consistently followed by the Fund.
Security Valuation – Equity securities, except those traded on the Nasdaq Stock Market, Inc. (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. 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. U.S. government and agency securities are valued at the mean between the bid and ask prices, which approximates fair value. 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 Fund’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.
Federal Income Taxes – No provision for federal income taxes has been made as the Fund intends to continue to qualify for federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to shareholders. The Fund evaluates tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current year. Management has analyzed the Fund’s tax positions taken for all open federal income tax years (Oct. 31, 2011–Oct. 31, 2014), and has concluded that no provision for federal income tax is required in the Fund’s financial statements.
22
Table of Contents
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.
Repurchase Agreements – The Fund may purchase certain U.S. government securities subject to the counterparty’s agreement to repurchase them at an agreed upon date and price. The counterparty will be required on a daily basis to maintain the value of the collateral subject to the agreement at not less than the repurchase price (including accrued interest). The agreements are conditioned upon the collateral being deposited under the Federal Reserve book-entry system with the Fund’s custodian or a third party sub-custodian. In the event of default or bankruptcy by the other party to the agreement, retention of the collateral may be subject to legal proceedings. All open repurchase agreements as of the date of this report were entered into on April 30, 2015.
Use of Estimates – The Fund is an investment company in conformity with U.S. GAAP. Therefore, the Fund follows the accounting and reporting guidelines for investment companies. The preparation of financial statements in conformity with U.S. 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 Investments® Family of Funds are generally allocated among such funds on the basis of average net assets. Management fees and some 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. 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 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.
Subject to seeking best execution, the Fund may direct certain security trades to brokers who have agreed to rebate a portion of the related brokerage commission to the Fund in cash. Such commission rebates are included on the “Statement of operations” under “Net realized gain on investments” and totaled $6,065 for the six months ended April 30, 2015. In general, best execution refers to many factors, including the price paid or received for a security, the commission charged, the promptness and reliability of execution, the confidentiality and placement accorded the order, and other factors affecting the overall benefit obtained by the Fund on the transaction.
23
Table of Contents
Notes to financial statements
Delaware U.S. Growth Fund
1. Significant Accounting Policies (continued)
The Fund may receive 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 April 30, 2015.
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 one dollar, the expense paid under this arrangement is included on the “Statement of operations” under “Dividend disbursing and transfer agent fees and expenses” with the corresponding expense offset shown under “Less expense paid indirectly.” For the six months ended April 30, 2015, the Fund earned $289 under this agreement.
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 Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate 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.
Jackson Square Partners, LLC (JSP) furnishes investment sub-advisory services to the Fund. For these services, DMC, not the Fund, pays JSP fees based on the aggregate average daily net assets of the Fund at the following annual rate: 0.325% of the first $500 million; 0.300% of the next $500 million; 0.275% of the next $1.5 billion; and 0.250% of aggregate average daily net assets in excess of $2.5 billion.
Delaware Investments Fund Services Company (DIFSC), an affiliate of DMC, provides fund accounting and financial administration oversight services to the Fund. For these services, the Fund pays DIFSC fees which are calculated based on the aggregate daily net assets of the Delaware Investments® Family of Funds at the following annual rate: 0.0050% of the first $30 billion; 0.0045% of the next $10 billion; 0.0040% of the next $10 billion; and 0.0025% of aggregate average daily net assets in excess of $50 billion. The fees payable to DIFSC under the service agreement described above are allocated among all Funds in the Delaware Investments Family of Funds on a relative net asset value basis. For the six months ended April 30, 2015, the Fund was charged $85,105 for these services. This amount is included on the “Statement of operations” under “Accounting and Administration expenses.”
DIFSC is the transfer agent and dividend disbursing agent of the Fund. For these services, the Fund pays DIFSC fees which are calculated based on the aggregate daily net assets of the retail funds within the Delaware Investments Family of Funds at the following annual rate: 0.025% of the first $20 billion; 0.020% of the next $5 billion; 0.015% of the next $5 billion; and 0.013% on average daily net assets in excess of $30 billion. The fees payable to DIFSC under the service agreement described above are allocated among all Funds in the Delaware Investments Family of Funds on a relative net asset value basis. This amount is included on the “Statement of operations” under “Dividend disbursing and transfer agent fees and expenses.” For the six months ended April 30, 2015, the Fund was charged $374,167 for these services. Pursuant to a sub-transfer agency agreement between DIFSC and BNY Mellon
24
Table of Contents
Investment Servicing (US) Inc. (BNYMIS), BNYMIS provides certain sub-transfer agency services to the Fund. Sub-transfer agency fees are passed on to and paid directly by the Fund.
Pursuant to a distribution agreement and distribution plan, the Fund pays DDLP, the distributor and an affiliate of DMC, an annual distribution and service fee of 0.25% of the average daily net assets of the Class A shares, 1.00% of the average daily net assets of the Class C shares, and 0.50% of the average daily net assets of the Class R shares. Institutional Class shares pay no distribution and service expenses.
As provided in the investment management agreement, the Fund bears a portion of the cost of resources shared with DMC, including the cost of internal personnel of DMC and/or its affiliates that provide legal, tax, and regulatory reporting services to the Fund. For the six months ended April 30, 2015, the Fund was charged $51,577 for internal legal, tax, and regulatory reporting services provided by DMC and/or its affiliates’ employees. This amount is included on the “Statement of operations” under “Legal fees.”
For the six months ended April 30, 2015, DDLP earned $48,610 for commissions on sales of the Fund’s Class A shares. For the six months ended April 30, 2015, DDLP received gross CDSC commissions of $6 and $455 on redemption 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.
3. Investments
For the six months ended April 30, 2015, the Fund made purchases and sales of investment securities other than short-term investments as follows:
Purchases | $847,303,425 | |||
Sales | 793,507,384 |
At April 30, 2015, the cost of investments for federal income tax purposes has been estimated since final tax characteristics cannot be determined until fiscal year end. At April 30, 2015, the cost of investments and unrealized appreciation (depreciation) were as follows:
Cost of investments | $ | 3,036,686,378 | ||
|
| |||
Aggregate unrealized appreciation | $ | 801,134,140 | ||
Aggregate unrealized depreciation | (98,053,825 | ) | ||
|
| |||
Net unrealized appreciation | $ | 703,080,315 | ||
|
|
U.S. 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
25
Table of Contents
Notes to financial statements
Delaware U.S. Growth Fund
3. Investments (continued)
asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability based on the best information available under the circumstances. The Fund’s investment in its entirety is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-level hierarchy of inputs is summarized below.
Level 1 – | Inputs are quoted prices in active markets for identical investments. (Examples: equity securities, open-end investment companies, futures contracts, 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, fair value securities) | |
Level 3 – | Significant unobservable inputs, including the Fund’s own assumptions used to determine the fair value of investments. (Examples: broker-quoted securities, 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 April 30, 2015:
Level 1 | Level 2 | Total | ||||||||||
Common Stock | $ | 3,688,635,561 | $ | — | $ | 3,688,635,561 | ||||||
Short-Term Investments | — | 51,131,025 | 51,131,025 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 3,688,635,561 | $ | 51,131,025 | $ | 3,739,766,586 | ||||||
|
|
|
|
|
|
During the six months ended April 30, 2015, there were no transfers between Level 1 investments, Level 2 investments, or Level 3 investments that had a significant impact to the Fund. The Fund’s policy is to recognize transfers between levels at the beginning of the reporting period.
26
Table of Contents
A reconciliation of Level 3 investments is presented when the Fund has a significant amount of Level 3 investments at the beginning, interim, or end of the period in relation to net assets. At April 30, 2015, there were no Level 3 investments.
4. Capital Shares
Transactions in capital shares were as follows:
Six months 4/30/15 | Year ended 10/31/14 | |||||||||
Shares sold: | ||||||||||
Class A | 3,184,766 | 10,776,994 | ||||||||
Class B | — | 689 | ||||||||
Class C | 641,229 | 1,175,839 | ||||||||
Class R | 248,483 | 419,718 | ||||||||
Institutional Class | 15,365,886 | 37,996,352 | ||||||||
Shares issued upon reinvestment of dividends and distributions: | ||||||||||
Class A | 402,692 | — | ||||||||
Class C | 110,710 | — | ||||||||
Class R | 25,409 | — | ||||||||
Institutional Class | 3,173,109 | 69,875 | ||||||||
23,152,284 | 50,439,467 | |||||||||
Shares redeemed: | ||||||||||
Class A | (2,187,927 | ) | (10,293,569 | ) | ||||||
Class B | — | (78,453 | ) | |||||||
Class C | (377,675 | ) | (691,476 | ) | ||||||
Class R | (372,574 | ) | (447,125 | ) | ||||||
Institutional Class | (13,506,271 | ) | (23,188,911 | ) | ||||||
(16,444,447 | ) | (34,699,534 | ) | |||||||
Net increase | 6,707,837 | 15,739,933 |
For the year ended Oct. 31, 2014, 47,284 Class B shares were converted to 40,382 Class A shares valued at $974,760. The respective amounts are included in Class B redemptions and Class A subscriptions in the table above and the “Statements of changes in net assets.”
27
Table of Contents
Notes to financial statements
Delaware U.S. Growth Fund
4. Capital Shares (continued)
Certain shareholders may exchange shares of one class for shares of another class in the same Fund. For the six months ended April 30, 2015 and the year ended Oct. 31, 2014, exchange transactions were as follows:
Six months ended April 30, 2015
Exchange Redemptions | Exchange Subscriptions Institutional | |||||
Class A Shares | Class C Shares | Class Shares | Value | |||
— |
7,654 | 6,602 | $182,023 |
Year ended Oct. 31, 2014
Exchange Redemptions | Exchange Subscriptions Institutional | |||||
Class A Shares | Class C Shares | Class Shares | Value | |||
3,922 | 13,933 | 15,787 | $401,166 |
These exchange transactions are included as subscriptions and redemptions in the table on the previous page and the “Statements of changes in net assets.”
5. Line of Credit
The Fund, along with certain other funds in the Delaware Investments® Family of Funds (Participants), was a participant in a $225,000,000 revolving line of credit 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 were charged an annual commitment fee of 0.08%, which was allocated across the Participants on the basis of each Participant’s allocation of the entire facility. The Participants were permitted to borrow up to a maximum of one third of their net assets under the agreement. Each Participant was individually, and not jointly, liable for its particular advances, if any, under the line of credit. The line of credit available under the agreement expired on Nov. 10, 2014.
On Nov. 10, 2014, the Fund, along with the other Participants, entered into an amendment to the agreement for a $275,000,000 revolving line of credit. The line of credit is to be used as described above and operates in substantially the same manner as the agreement described above. The line of credit available under the agreement expires on Nov. 9, 2015.
The Fund had no amounts outstanding as of April 30, 2015 or at any time during the period then ended.
6. Offsetting
In December 2011, the Financial Accounting Standards Board (FASB) issued guidance that expands disclosure requirements on the offsetting of certain assets and liabilities. The disclosures are required for investments and derivative financial instruments subject to master netting or similar agreements which are eligible for offset on the “Statement of assets and liabilities” and require an entity to disclose both
28
Table of Contents
gross and net information about such investments and transactions in the financial statements. In January 2013, the FASB issued guidance that clarifies which investments and transactions are subject to the offsetting disclosure requirements. The scope of the disclosure requirements for offsetting is limited to derivative instruments, repurchase agreements and reverse repurchase agreements, and securities borrowing. The guidance is effective for financial statements with fiscal years beginning on or after Jan. 1, 2013, and interim periods within those fiscal years.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund entered into an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement) or similar agreement with each of its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs over-the-counter (OTC) derivatives and foreign exchange contracts and typically contains, among other things, collateral posting items and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default (close-out) including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy, insolvency, or other events.
For financial reporting purposes, the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements on the “Statement of assets and liabilities.”
At April 30, 2015, the Fund had the following assets and liabilities subject to offsetting provisions:
Master Repurchase Agreements
Counterparty | Repurchase Agreements | Fair Value of Non-Cash Collateral Received | Cash Collateral Received | Net Amount(a) | ||||||||||||||||
Bank of America Merrill Lynch | $ | 11,769,148 | $ | (11,769,148 | ) | $ | — | $ | — | |||||||||||
Bank of Montreal | 9,807,623 | (9,807,623 | ) | — | — | |||||||||||||||
BNP Paribas | 11,620,229 | (11,620,229 | ) | — | — | |||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 33,197,000 | $ | (33,197,000 | ) | $ | — | $ | — | |||||||||||
|
|
|
|
|
|
|
|
(a)Net amount represents the receivable/(payable) that would be due from/(to) the counterparty in the event of default.
7. Securities Lending
The Fund, along with other funds in the Delaware Investments® Family of 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 U.S. securities and foreign securities that are denominated and payable in U.S. dollars; and (2) 105% with respect to foreign securities. With respect to each loan, if on
29
Table of Contents
Notes to financial statements
Delaware U.S. Growth Fund
7. Securities Lending (continued)
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 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.
Cash collateral received is generally invested in the Delaware Investments Collateral Fund No. 1 (Collective Trust) established by BNY Mellon for the purpose of investment on behalf of funds managed by DMC that participate in BNY Mellon’s securities lending program. The Collective Trust may invest in U.S. government securities and high-quality corporate debt, asset-backed and other money market securities, and in repurchase agreements collateralized by such securities, provided that the Collective Trust will generally have a dollar-weighted average portfolio maturity of 60 days or less. The Fund can also accept U.S. 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 Collective Trust used for the investment of cash collateral received from borrowers of securities seeks to maintain a net asset value per unit of $1.00, but there can be no assurance that it will always be able to do so. The Fund may incur investment losses as a result of investing securities lending collateral in the Collective Trust. This could occur if an investment in the Collective Trust defaulted or if it were necessary to liquidate assets in the Collective Trust to meet returns on outstanding security loans at a time when the Collective Trust’s net asset value per unit was less than $1.00. Under those circumstances, the Fund may not receive an amount from the Collective Trust that is equal in amount to the collateral the Fund would be required to return to the borrower of the securities and the Fund would be required to make up for this shortfall.
During the six months ended April 30, 2015, the Fund had no securities out on loan.
30
Table of Contents
8. Credit and Market Risk
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 Fund’s 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 April 30, 2015, there were no Rule 144A securities held by the Fund and no securities have been determined to be illiquid under the Fund’s Liquidity Procedures.
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. Recent Accounting Pronouncements
In June 2014, the Financial Accounting Standards Board issued guidance to improve the financial reporting of reverse repurchase agreements and other similar transactions. The guidance includes expanded disclosure requirements for entities that enter into reverse repurchase agreements and similar transactions accounted for as secured borrowings. The guidance is effective for financial statements with fiscal years beginning on or after Dec. 15, 2014 and interim periods within those fiscal years.
Management has determined that this pronouncement has no impact to the Fund’s financial statements.
11. Subsequent Events
Management has determined that no material events or transactions occurred subsequent to April 30, 2015 that would require recognition or disclosure in the Fund’s financial statements.
31
Table of Contents
Other Fund information (Unaudited)
Delaware U.S. Growth Fund
Proxy Results
At Joint Special Meetings of Shareholders of Delaware Group® Adviser Funds (the “Trust”), on behalf of Delaware Diversified Income Fund, Delaware Global Real Estate Opportunities Fund, and Delaware U.S. Growth Fund (each, a “Fund” and together, the “Funds”), held on March 31, 2015 and reconvened to April 21, 2015 and May 12, 2015 for the proposals listed in items (ii) and (iii) below for Delaware Diversified Income Fund, the shareholders of the Trust / the Funds voted to: (i) elect a Board of Trustees for the Trust; (ii) approve the implementation of a new “manager of managers” order for the Funds; (iii) revise the fundamental investment restriction relating to lending for the Funds; and (iv)(a) revise provisions of the Trust’s Agreement and Declaration of Trust related to documenting the transfer of shares, (iv)(b) revise provisions of the Trust’s Agreement and Declaration of Trust related to shareholder disclosure of certain information upon board demand, and (iv)(c) revise provisions of the Trust’s By-Laws so that Delaware law will apply to matters related to proxies. At the meeting, the following people were elected to serve as Independent Trustees: Thomas L. Bennett, Ann D. Borowiec, Joseph W. Chow, John A. Fry, Lucinda S. Landreth, Frances A. Sevilla-Sacasa, Thomas K. Whitford, Janet L. Yeomans, and J. Richard Zecher. In addition, Patrick P. Coyne was elected to serve as an Interested Trustee.
The following proposal was submitted for a vote of the shareholders:
1. To elect a Board of Trustees for the Trust.
A quorum of the shares outstanding of the Funds of the Trust was present, and the votes passed with a plurality of these Shares.
Shares Voted For | % of Shares | % of Shares Voted | Shares Withheld | % of Outstanding Shares | % of Shares Voted | |||||||||||||||||||
Thomas L. Bennett | 377,368,701.625 | 48.448% | 98.301% | 6,520,382.325 | 0.837% | 1.699% | ||||||||||||||||||
Ann D. Borowiec | 377,497,661.478 | 48.464% | 98.335% | 6,391,422.472 | 0.821% | 1.665% | ||||||||||||||||||
Joseph W. Chow | 377,534,720.702 | 48.469% | 98.345% | 6,354,363.248 | 0.816% | 1.655% | ||||||||||||||||||
Patrick P. Coyne | 377,414,270.764 | 48.453% | 98.313% | 6,474,813.186 | 0.831% | 1.687% | ||||||||||||||||||
John A. Fry | 377,491,073.066 | 48.463% | 98.333% | 6,398,010.884 | 0.821% | 1.667% | ||||||||||||||||||
Lucinda S. Landreth | 377,396,976.901 | 48.451% | 98.309% | 6,492,107.049 | 0.833% | 1.691% | ||||||||||||||||||
Frances A. Sevilla-Sacasa | 377,431,097.052 | 48.456% | 98.318% | 6,457,986.898 | 0.829% | 1.682% | ||||||||||||||||||
Thomas K. Whitford | 377,574,025.766 | 48.474% | 98.355% | 6,315,058.184 | 0.811% | 1.645% | ||||||||||||||||||
Janet L. Yeomans | 377,532,727.906 | 48.469% | 98.344% | 6,356,356.044 | 0.816% | 1.656% | ||||||||||||||||||
J. Richard Zecher | 377,320,103.052 | 48.441% | 98.289% | 6,568,980.898 | 0.843% | 1.711% |
32
Table of Contents
2. To approve the implementation of a new “manager of managers” order.
A quorum of the shares outstanding of each Fund was present, and the votes passed with the required majority of those shares. The results were as follows:
Delaware Diversified Income Fund
Shares voted for | 237,724,523.189 | |||
Percentage of outstanding shares | 37.202 | % | ||
Percentage of shares voted | 72.243 | % | ||
Shares voted against | 11,256,121.007 | |||
Percentage of outstanding shares | 1.761 | % | ||
Percentage of shares voted | 3.421 | % | ||
Shares abstained | 8,367,609.174 | |||
Percentage of outstanding shares | 1.309 | % | ||
Percentage of shares voted | 2.543 | % | ||
Broker non-votes | 71,712,447.899 | |||
Delaware Global Real Estate Opportunities Fund | ||||
Shares voted for | 6,077,891.020 | |||
Percentage of outstanding shares | 80.832 | % | ||
Percentage of shares voted | 82.280 | % | ||
Shares voted against | 11,008.448 | |||
Percentage of outstanding shares | 0.146 | % | ||
Percentage of shares voted | 0.149 | % | ||
Shares abstained | 31,761.948 | |||
Percentage of outstanding shares | 0.422 | % | ||
Percentage of shares voted | 0.430 | % | ||
Broker non-votes | 1,266,215.000 | |||
Delaware U.S. Growth Fund | ||||
Shares voted for | 63,584,366.207 | |||
Percentage of outstanding shares | 48.028 | % | ||
Percentage of shares voted | 79.302 | % | ||
Shares voted against | 2,815,123.196 | |||
Percentage of outstanding shares | 2.126 | % | ||
Percentage of shares voted | 3.511 | % | ||
Shares abstained | 310,995.891 | |||
Percentage of outstanding shares | 0.235 | % | ||
Percentage of shares voted | 0.388 | % | ||
Broker non-votes | 13,469,786.000 |
33
Table of Contents
Other Fund information (Unaudited)
Delaware U.S. Growth Fund
Proxy Results (continued)
3. To revise the fundamental investment restriction relating to lending.
A quorum of the shares outstanding of each Fund was present, and the votes passed with the required majority of those shares. The results were as follows:
Delaware Diversified Income Fund
Shares voted for | 236,542,353.523 | |||
Percentage of outstanding shares | 37.017 | % | ||
Percentage of shares voted | 71.884 | % | ||
Shares voted against | 11,721,375.093 | |||
Percentage of outstanding shares | 1.834 | % | ||
Percentage of shares voted | 3.562 | % | ||
Shares abstained | 9,084,523.754 | |||
Percentage of outstanding shares | 1.422 | % | ||
Percentage of shares voted | 2.761 | % | ||
Broker non-votes | 71,712,448.899 | |||
Delaware Global Real Estate Opportunities Fund | ||||
Shares voted for | 6,085,238.221 | |||
Percentage of outstanding shares | 80.929 | % | ||
Percentage of shares voted | 82.379 | % | ||
Shares voted against | 25,022.195 | |||
Percentage of outstanding shares | 0.333 | % | ||
Percentage of shares voted | 0.339 | % | ||
Shares abstained | 10,402.000 | |||
Percentage of outstanding shares | 0.138 | % | ||
Percentage of shares voted | 0.141 | % | ||
Broker non-votes | 1,266,214.000 | |||
Delaware U.S. Growth Fund | ||||
Shares voted for | 66,013,088.616 | |||
Percentage of outstanding shares | 49.862 | % | ||
Percentage of shares voted | 82.331 | % | ||
Shares voted against | 361,043.749 | |||
Percentage of outstanding shares | 0.273 | % | ||
Percentage of shares voted | 0.450 | % | ||
Shares abstained | 336,348.929 | |||
Percentage of outstanding shares | 0.254 | % | ||
Percentage of shares voted | 0.419 | % | ||
Broker non-votes | 13,469,790.000 |
34
Table of Contents
4. (a) To revise provisions of the Trust’s Agreement and Declaration of Trust related to documenting the transfer of shares.
A quorum of the shares outstanding of the Trust was present, and the votes passed with a majority of those shares. The results were as follows:
Delaware Group® Adviser Funds
Shares voted for | 276,841,786.289 | |||
Percentage of outstanding shares | 35.542 | % | ||
Percentage of shares voted | 72.115 | % | ||
Shares voted against | 5,466,797.899 | |||
Percentage of outstanding shares | 0.702 | % | ||
Percentage of shares voted | 1.424 | % | ||
Shares abstained | 6,966,088.763 | |||
Percentage of outstanding shares | 0.894 | % | ||
Percentage of shares voted | 1.815 | % | ||
Broker non-votes | 94,614,410.999 |
4. (b) To revise provisions of the Trust’s Agreement and Declaration of Trust related to shareholder disclosure of certain information upon board demand.
A quorum of the shares outstanding of the Trust was present, and the votes passed with a majority of those shares. The results were as follows:
Delaware Group Adviser Funds
Shares voted for | 276,183,863.480 | |||
Percentage of outstanding shares | 35.457 | % | ||
Percentage of shares voted | 71.944 | % | ||
Shares voted against | 6,322,961.795 | |||
Percentage of outstanding shares | 0.812 | % | ||
Percentage of shares voted | 1.647 | % | ||
Shares abstained | 6,767,846.676 | |||
Percentage of outstanding shares | 0.869 | % | ||
Percentage of shares voted | 1.763 | % | ||
Broker non-votes | 94,614,411.999 |
35
Table of Contents
Other Fund information (Unaudited)
Delaware U.S. Growth Fund
Proxy Results (continued)
4. (c) To revise provisions of the Trust’s By-Laws so that Delaware law will apply to matters related to proxies.
A quorum of the shares outstanding of the Trust was present, and the votes passed with a majority of those shares. The results were as follows:
Delaware Group® Adviser Funds
Shares voted for | 277,825,824.039 | |||
Percentage of outstanding shares | 35.668 | % | ||
Percentage of shares voted | 72.371 | % | ||
Shares voted against | 5,038,256.207 | |||
Percentage of outstanding shares | 0.647 | % | ||
Percentage of shares voted | 1.312 | % | ||
Shares abstained | 6,410,588.705 | |||
Percentage of outstanding shares | 0.823 | % | ||
Percentage of shares voted | 1.670 | % | ||
Broker non-votes | 94,614,414.999 |
36
Table of Contents
Board of trustees
Thomas L. Bennett Chairman of the Board Delaware Investments® Family of Funds Private Investor Rosemont, PA
Ann D. Borowiec Former Chief Executive Officer Private Wealth Management J.P. Morgan Chase & Co. New York, NY | Joseph W. Chow Former Executive Vice President State Street Corporation Brookline, MA
John A. Fry President Drexel University Philadelphia, PA | Lucinda S. Landreth Former Chief Investment Officer Assurant, Inc. New York, NY
Frances A. Sevilla-Sacasa Chief Executive Officer Banco Itaú International Miami, FL | Thomas K. Whitford Former Vice Chairman PNC Financial Services Group Pittsburgh, PA
Janet L. Yeomans Former Vice President and Treasurer 3M Corporation St. Paul, MN
J. Richard Zecher Founder Investor Analytics Scottsdale, AZ | |||
Affiliated officers | ||||||
Roger A. Early | David F. Connor | Daniel V. Geatens | Richard Salus | |||
President and Chief Executive Officer Delaware Investments Family of Funds Philadelphia, PA | Senior Vice President, General Counsel, and Secretary Delaware Investments Family of Funds Philadelphia, PA | Vice President and Treasurer Delaware Investments Family of Funds Philadelphia, PA | Senior Vice President and Chief Financial Officer Delaware Investments Family of Funds Philadelphia, PA |
This semiannual report is for the information of Delaware U.S. Growth Fund shareholders, but it may be used with prospective investors when preceded or accompanied by the Delaware Investments Fund fact sheet for the most recently completed calendar quarter. These documents are available at delawareinvestments.com.
Delaware Investments is the marketing name of Delaware Management Holdings, Inc. and its subsidiaries.
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-Q. The Fund’s Forms N-Q, 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-Q is available without charge on the Fund’s website at delawareinvestments.com. The Fund’s Forms N-Q 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 delawareinvestments.com; and (ii) on the SEC’s website at sec.gov.
37
Table of Contents
Semiannual report
Fixed income mutual fund
Delaware Diversified Income Fund
April 30, 2015
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 delawareinvestments.com 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 delawareinvestments.com/edelivery.
Table of Contents
Experience Delaware Investments
Delaware Investments is committed to the pursuit of consistently superior asset management and unparalleled client service. We believe in our investment processes, which seek to deliver consistent results, and in convenient services that help add value for our clients.
If you are interested in learning more about creating an investment plan, contact your financial advisor.
You can learn more about Delaware Investments or obtain a prospectus for Delaware Diversified Income Fund at delawareinvestments.com.
Manage your investments online
• | 24-hour access to your account information |
• | Obtain share prices |
• | Check your account balance and recent transactions |
• | Request statements or literature |
• | Make purchases and redemptions |
Delaware Management Holdings, Inc. and its subsidiaries (collectively known by the marketing name of Delaware Investments) are wholly owned subsidiaries of Macquarie Group Limited, a global provider of banking, financial, advisory, investment and funds management services.
Investments in Delaware Diversified Income Fund are not and will not be deposits with or liabilities of Macquarie Bank Limited ABN 46 008 583 542 and its holding companies, including their subsidiaries or related companies (Macquarie Group), and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. No Macquarie Group company guarantees or will guarantee the performance of the Fund, the repayment of capital from the Fund, or any particular rate of return.
1 | ||||
3 | ||||
5 | ||||
54 | ||||
56 | ||||
58 | ||||
60 | ||||
68 | ||||
86 | ||||
91 |
Unless otherwise noted, views expressed herein are current as of April 30, 2015, and subject to change for events occurring after such date.
Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested.
Mutual fund advisory services provided by Delaware Management Company, a series of Delaware Management Business Trust, which is a registered investment advisor. Delaware Investments, a member of Macquarie Group, refers to Delaware Management Holdings, Inc. and its subsidiaries, including the Fund’s distributor, Delaware Distributors, L.P. Macquarie Group refers to Macquarie Group Limited and its subsidiaries and affiliates worldwide.
©2015 Delaware Management Holdings, Inc.
All third-party marks cited are the property of their respective owners.
Table of Contents
For the six-month period from November 1, 2014 to April 30, 2015 (Unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and/or 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 Nov. 1, 2014 to April 30, 2015.
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 expenses shown in the table assume reinvestment of all dividends and distributions.
1
Table of Contents
Disclosure of Fund expenses
For the six-month period from November 1, 2014 to April 30, 2015 (Unaudited)
Delaware Diversified Income Fund
Expense analysis of an investment of $1,000
Beginning | Ending | Expenses | ||||||||||||||||||
Account Value | Account Value | Annualized | Paid During Period | |||||||||||||||||
11/1/14 | 4/30/15 | Expense Ratio | 11/1/14 to 4/30/15* | |||||||||||||||||
Actual Fund return† | ||||||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,015.60 | 0.92 | % | $ | 4.60 | ||||||||||||
Class C | 1,000.00 | 1,011.80 | 1.67 | % | 8.33 | |||||||||||||||
Class R | 1,000.00 | 1,014.30 | 1.17 | % | 5.84 | |||||||||||||||
Institutional Class | 1,000.00 | 1,016.80 | 0.67 | % | 3.35 | |||||||||||||||
Hypothetical 5% return (5% return before expenses) | ||||||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,020.23 | 0.92 | % | $ | 4.61 | ||||||||||||
Class C | 1,000.00 | 1,016.51 | 1.67 | % | 8.35 | |||||||||||||||
Class R | 1,000.00 | 1,018.99 | 1.17 | % | 5.86 | |||||||||||||||
Institutional Class | 1,000.00 | 1,021.47 | 0.67 | % | 3.36 |
* | “Expenses Paid During Period” are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (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. |
2
Table of Contents
Security type / sector allocation | ||
Delaware Diversified Income Fund | As of April 30, 2015 (Unaudited) |
Sector designations may be different than the sector designations presented in other fund materials. The sector designations may represent the investment manager’s internal sector classifications, which may result in the sector designations for one fund being different than another fund’s sector designations.
Security type / sector | Percentage of net assets | |||
Agency Asset-Backed Securities | 0.02% | |||
Agency Collateralized Mortgage Obligations | 1.76% | |||
Agency Mortgage-Backed Securities | 15.30% | |||
Collateralized Debt Obligation | 0.17% | |||
Commercial Mortgage-Backed Securities | 5.82% | |||
Convertible Bonds | 1.53% | |||
Corporate Bonds | 49.81% | |||
Automotive | 1.11% | |||
Banking | 5.67% | |||
Basic Industry | 4.25% | |||
Brokerage | 0.56% | |||
Capital Goods | 1.05% | |||
Communications | 8.27% | |||
Consumer Cyclical | 3.90% | |||
Consumer Non-Cyclical | 4.07% | |||
Electric | 4.18% | |||
Energy | 6.65% | |||
Finance Companies | 0.87% | |||
Healthcare | 1.03% | |||
Insurance | 1.71% | |||
Real Estate | 1.38% | |||
Services | 1.28% | |||
Technology | 2.12% | |||
Transportation | 0.76% | |||
Utilities | 0.95% | |||
Municipal Bonds | 1.12% | |||
Non-Agency Asset-Backed Securities | 1.91% | |||
Non-Agency Collateralized Mortgage Obligations | 1.25% | |||
Regional Bonds | 0.21% | |||
Senior Secured Loans | 11.59% | |||
Sovereign Bonds | 3.22% | |||
Supranational Banks | 0.61% | |||
U.S. Treasury Obligations | 1.51% | |||
Common Stock | 0.04% | |||
Convertible Preferred Stock | 0.44% | |||
Preferred Stock | 0.55% | |||
Short-Term Investments | 5.03% |
3
Table of Contents
Security type / sector allocation
Delaware Diversified Income Fund
Security type / sector
| Percentage of net assets
| |
Total Value of Securities | 101.89% | |
Liabilities Net of Receivables and Other Assets | (1.89%) | |
Total Net Assets | 100.00% |
4
Table of Contents
Schedule of investments | ||
Delaware Diversified Income Fund | April 30, 2015 (Unaudited) |
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Agency Asset-Backed Securities – 0.02% |
| |||||||
| ||||||||
Fannie Mae Grantor Trust | ||||||||
Series 2003-T4 2A5 5.287% 9/26/33 f | 908,429 | $ | 994,633 | |||||
Fannie Mae REMIC Trust | ||||||||
Series 2001-W2 AS5 6.473% 10/25/31 | 3,685 | 3,862 | ||||||
Series 2002-W11 AV1 0.521% 11/25/32 • | 6,791 | 6,229 | ||||||
|
| |||||||
Total Agency Asset-Backed Securities (cost $885,363) | 1,004,724 | |||||||
|
| |||||||
| ||||||||
Agency Collateralized Mortgage Obligations – 1.76% |
| |||||||
| ||||||||
Fannie Mae Grantor Trust | ||||||||
Series 1999-T2 A1 7.50% 1/19/39 • | 14,690 | 16,257 | ||||||
Series 2002-T4 A3 7.50% 12/25/41 | 154,384 | 175,359 | ||||||
Series 2002-T19 A1 6.50% 7/25/42 | 112,174 | 128,190 | ||||||
Series 2004-T1 1A2 6.50% 1/25/44 | 49,431 | 56,969 | ||||||
Fannie Mae Interest Strip | ||||||||
Series 265 2 9.00% 3/25/24 | 6,354 | 7,329 | ||||||
Fannie Mae REMIC Trust | ||||||||
Series 2002-W1 2A 6.482% 2/25/42 • | 15,616 | 18,313 | ||||||
Series 2002-W6 2A 6.862% 6/25/42 • | 30,101 | 35,116 | ||||||
Series 2003-W1 2A 6.512% 12/25/42 • | 16,036 | 18,712 | ||||||
Series 2003-W10 1A4 4.505% 6/25/43 | 21,792 | 23,461 | ||||||
Series 2003-W15 2A7 5.55% 8/25/43 | 22,385 | 23,861 | ||||||
Series 2004-W11 1A2 6.50% 5/25/44 | 318,084 | 376,707 | ||||||
Fannie Mae REMICs | ||||||||
Series 1990-92 C 7.00% 8/25/20 | 681 | 745 | ||||||
Series 1996-46 ZA 7.50% 11/25/26 | 135,164 | 153,695 | ||||||
Series 2001-50 BA 7.00% 10/25/41 | 73,280 | 85,135 | ||||||
Series 2002-83 GH 5.00% 12/25/17 | 91,706 | 95,428 | ||||||
Series 2002-90 A2 6.50% 11/25/42 | 215,763 | 244,996 | ||||||
Series 2003-11 BY 5.50% 2/25/33 | 117,453 | 130,948 | ||||||
Series 2003-26 AT 5.00% 11/25/32 | 2,066,329 | 2,124,946 | ||||||
Series 2003-38 MP 5.50% 5/25/23 | 1,947,597 | 2,148,086 | ||||||
Series 2003-78 B 5.00% 8/25/23 | 57,345 | 62,358 | ||||||
Series 2003-106 WE 4.50% 11/25/22 | 158,816 | 158,818 | ||||||
Series 2005-110 MB 5.50% 9/25/35 | 889,374 | 958,012 | ||||||
Series 2007-40 PT 5.50% 5/25/37 | 27,299 | 30,367 | ||||||
Series 2009-11 MP 7.00% 3/25/49 | 34,419 | 39,555 | ||||||
Series 2009-94 AC 5.00% 11/25/39 | 4,793,976 | 5,363,630 | ||||||
Series 2010-41 PN 4.50% 4/25/40 | 7,623,413 | 8,311,960 | ||||||
Series 2010-75 NA 4.00% 9/25/28 | 486,253 | 499,510 | ||||||
Series 2010-96 DC 4.00% 9/25/25 | 13,945,454 | 14,745,044 | ||||||
Series 2011-105 FP 0.581% 6/25/41 • | 34,054 | 34,144 | ||||||
Series 2011-113 CP 5.00% 9/25/39 | 1,393,101 | 1,490,791 | ||||||
Series 2012-19 HB 4.00% 1/25/42 | 1,040,207 | 1,091,438 |
5
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Agency Collateralized Mortgage Obligations (continued) |
| |||||||
| ||||||||
Fannie Mae REMICs | ||||||||
Series 2012-19 NI 3.50% 10/25/31 S | 4,828,989 | $ | 653,385 | |||||
Series 2012-122 SD 5.919% 11/25/42 • S | 10,508,048 | 2,524,105 | ||||||
Series 2013-20 IH 3.00% 3/25/33 S | 6,294,088 | 955,317 | ||||||
Series 2013-31 MI 3.00% 4/25/33 S | 31,828,601 | 5,015,093 | ||||||
Series 2013-44 DI 3.00% 5/25/33 S | 39,476,919 | 5,990,895 | ||||||
Series 2014-36 ZE 3.00% 6/25/44 | 4,180,251 | 3,777,241 | ||||||
Series 2014-72 ZJ 3.00% 11/25/44 | 402,075 | 346,806 | ||||||
Freddie Mac REMICs | ||||||||
Series 1730 Z 7.00% 5/15/24 | 161,543 | 183,335 | ||||||
Series 2326 ZQ 6.50% 6/15/31 | 523,889 | 604,352 | ||||||
Series 2557 WE 5.00% 1/15/18 | 1,126,519 | 1,173,105 | ||||||
Series 2621 QH 5.00% 5/15/33 | 51,471 | 57,623 | ||||||
Series 2624 QH 5.00% 6/15/33 | 24,557 | 27,569 | ||||||
Series 2717 MH 4.50% 12/15/18 | 35,175 | 36,844 | ||||||
Series 2809 DC 4.50% 6/15/19 | 664,097 | 695,353 | ||||||
Series 2981 NE 5.00% 5/15/35 | 16,953 | 18,879 | ||||||
Series 3123 HT 5.00% 3/15/26 | 29,754 | 32,791 | ||||||
Series 3150 EQ 5.00% 5/15/26 | 38,895 | 42,718 | ||||||
Series 3232 KF 0.632% 10/15/36 • | 69,464 | 70,129 | ||||||
Series 3239 EF 0.532% 11/15/36 • | 13,505 | 13,570 | ||||||
Series 3290 PE 5.50% 3/15/37 | 322,886 | 365,499 | ||||||
Series 3416 GK 4.00% 7/15/22 | 19,464 | 19,587 | ||||||
Series 3574 D 5.00% 9/15/39 | 214,543 | 236,620 | ||||||
Series 3656 PM 5.00% 4/15/40 | 9,578,589 | 10,571,725 | ||||||
Series 3804 EH 3.50% 7/15/40 | 111,871 | 116,962 | ||||||
Series 4065 DE 3.00% 6/15/32 | 1,626,000 | 1,649,266 | ||||||
Series 4122 LI 3.00% 10/15/27 S | 935,611 | 115,125 | ||||||
Series 4150 PQ 2.50% 1/15/43 | 607,945 | 552,386 | ||||||
Series 4185 LI 3.00% 3/15/33 S | 9,797,176 | 1,542,117 | ||||||
Series 4191 CI 3.00% 4/15/33 S | 4,013,425 | 530,898 | ||||||
Series 4217 HI 2.50% 6/15/28 S | 883,833 | 93,988 | ||||||
Series 4251 KI 2.50% 4/15/28 S | 754,257 | 57,104 | ||||||
Series 4389 ZC 3.00% 9/15/44 | 816,901 | 706,908 | ||||||
Series 4391 GZ 2.50% 12/15/40 | 102,727 | 91,395 | ||||||
Series 4403 CZ 3.00% 10/15/44 | 116,951 | 94,854 | ||||||
Freddie Mac Strips | ||||||||
Series 19 F 1.042% 6/1/28 • | 3,277 | 3,322 | ||||||
Freddie Mac Structured Pass Through Securities | ||||||||
Series T-42 A5 7.50% 2/25/42 ¿ | 93,367 | 109,230 | ||||||
Series T-54 2A 6.50% 2/25/43 ¿ | 24,757 | 29,445 | ||||||
Series T-58 2A 6.50% 9/25/43 ¿ | 536,807 | 619,337 | ||||||
Series T-60 1A4C 4.669% 3/25/44 ¿ • | 1,813 | 1,815 |
6
Table of Contents
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Agency Collateralized Mortgage Obligations (continued) |
| |||||||
| ||||||||
GNMA | ||||||||
Series 2010-113 KE 4.50% 9/20/40 | 20,442,264 | $ | 22,756,369 | |||||
Vendee Mortgage Trust | ||||||||
Series 2000-1 1A 6.451% 1/15/30 • | 19,236 | 22,055 | ||||||
|
| |||||||
Total Agency Collateralized Mortgage Obligations (cost $99,083,081) |
| 101,154,997 | ||||||
|
| |||||||
| ||||||||
Agency Mortgage-Backed Securities – 15.30% | ||||||||
| ||||||||
Fannie Mae | ||||||||
6.00% 9/1/17 | 2,516 | 2,620 | ||||||
6.50% 8/1/17 | 33,910 | 35,007 | ||||||
6.50% 8/1/37 | 620,168 | 684,943 | ||||||
7.00% 11/15/16 | 530 | 529 | ||||||
Fannie Mae ARM | ||||||||
1.875% 7/1/33 • | 66,818 | 70,049 | ||||||
1.885% 1/1/36 • | 76,201 | 80,717 | ||||||
2.015% 11/1/24 • | 1,973 | 2,070 | ||||||
2.07% 8/1/34 • | 20,043 | 21,289 | ||||||
2.08% 3/1/38 • | 8,579 | 9,096 | ||||||
2.088% 9/1/38 • | 439,599 | 473,936 | ||||||
2.174% 6/1/37 • | 8,428 | 8,989 | ||||||
2.193% 8/1/36 • | 26,563 | 28,336 | ||||||
2.268% 7/1/36 • | 2,186 | 2,330 | ||||||
2.27% 11/1/35 • | 100,039 | 106,527 | ||||||
2.27% 4/1/36 • | 724 | 770 | ||||||
2.27% 6/1/36 • | 109,806 | 116,943 | ||||||
2.277% 10/1/33 • | 77,400 | 80,760 | ||||||
2.277% 6/1/34 • | 1,171 | 1,248 | ||||||
2.277% 7/1/36 • | 55,055 | 58,670 | ||||||
2.28% 12/1/33 • | 14,193 | 15,066 | ||||||
2.315% 11/1/35 • | 310,229 | 331,013 | ||||||
2.327% 11/1/32 • | 471 | 506 | ||||||
2.347% 4/1/37 • | 1,094,641 | 1,162,407 | ||||||
2.357% 4/1/36 • | 327,014 | 348,808 | ||||||
2.409% 4/1/36 • | 229,897 | 245,251 | ||||||
2.419% 5/1/43 • | 6,054,818 | 6,169,885 | ||||||
2.442% 6/1/34 • | 50,644 | 53,941 | ||||||
2.546% 6/1/43 • | 1,447,481 | 1,480,841 | ||||||
3.19% 4/1/44 • | 3,290,427 | 3,420,957 | ||||||
3.265% 3/1/44 • | 4,525,752 | 4,725,111 | ||||||
3.296% 9/1/43 • | 4,375,480 | 4,577,169 | ||||||
4.474% 5/1/36 • | 141,812 | 152,946 | ||||||
5.034% 8/1/35 • | 72,849 | 77,580 | ||||||
5.646% 8/1/37 • | 344,829 | 366,016 |
7
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Agency Mortgage-Backed Securities (continued) |
| |||||||
| ||||||||
Fannie Mae Relocation 15 yr | ||||||||
4.00% 9/1/20 | 131,518 | $ | 138,174 | |||||
Fannie Mae Relocation 30 yr | ||||||||
5.00% 9/1/33 | 75,596 | 83,412 | ||||||
5.00% 11/1/33 | 28,157 | 31,050 | ||||||
5.00% 1/1/34 | 2,542 | 2,802 | ||||||
5.00% 11/1/34 | 30,309 | 33,417 | ||||||
5.00% 4/1/35 | 70,101 | 77,286 | ||||||
5.00% 10/1/35 | 55,985 | 61,747 | ||||||
5.00% 1/1/36 | 113,730 | 125,367 | ||||||
Fannie Mae S.F. 15 yr | ||||||||
2.50% 11/1/27 | 231,018 | 237,451 | ||||||
2.50% 2/1/28 | 11,111,320 | 11,419,102 | ||||||
2.50% 4/1/28 | 77,004 | 79,099 | ||||||
2.50% 5/1/28 | 1,911,019 | 1,962,952 | ||||||
3.00% 4/1/27 | 1,040,550 | 1,092,865 | ||||||
3.00% 6/1/27 | 76,127 | 79,851 | ||||||
3.00% 5/1/28 | 1,246,415 | 1,305,505 | ||||||
3.50% 2/1/26 | 908,323 | 965,370 | ||||||
3.50% 7/1/26 | 4,404,745 | 4,701,321 | ||||||
3.50% 3/1/27 | 154,038 | 163,780 | ||||||
3.50% 11/1/27 | 482,389 | 515,386 | ||||||
3.50% 11/1/28 | 373,982 | 399,419 | ||||||
4.00% 3/1/24 | 25,287 | 27,070 | ||||||
4.00% 4/1/24 | 3,316 | 3,551 | ||||||
4.00% 11/1/24 | 57,549 | 60,760 | ||||||
4.00% 2/1/25 | 667,301 | 714,882 | ||||||
4.00% 5/1/25 | 1,711,186 | 1,839,063 | ||||||
4.00% 6/1/25 | 6,015,950 | 6,464,540 | ||||||
4.00% 11/1/25 | 11,787,256 | 12,681,866 | ||||||
4.00% 12/1/26 | 2,842,417 | 3,049,103 | ||||||
4.00% 1/1/27 | 20,251,001 | 21,759,061 | ||||||
4.00% 5/1/27 | 6,308,451 | 6,796,152 | ||||||
4.00% 8/1/27 | 3,107,946 | 3,344,060 | ||||||
4.50% 4/1/18 | 10,646 | 11,138 | ||||||
4.50% 7/1/18 | 19,124 | 20,008 | ||||||
4.50% 9/1/18 | 11,786 | 12,330 | ||||||
4.50% 11/1/18 | 23,070 | 24,137 | ||||||
4.50% 2/1/19 | 24,506 | 25,641 | ||||||
4.50% 3/1/19 | 74,842 | 78,302 | ||||||
4.50% 4/1/20 | 9,720 | 10,176 | ||||||
4.50% 7/1/20 | 148,896 | 156,763 | ||||||
4.50% 4/1/23 | 58,415 | 62,489 |
8
Table of Contents
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Agency Mortgage-Backed Securities (continued) |
| |||||||
| ||||||||
Fannie Mae S.F. 15 yr | ||||||||
4.50% 9/1/24 | 192,788 | $ | 204,381 | |||||
4.50% 11/1/24 | 68,270 | 73,453 | ||||||
5.00% 11/1/18 | 132,772 | 139,473 | ||||||
5.00% 6/1/19 | 78,301 | 82,278 | ||||||
5.00% 12/1/19 | 232,511 | 244,263 | ||||||
5.00% 9/1/20 | 2,983 | 3,188 | ||||||
5.00% 12/1/21 | 36,941 | 39,233 | ||||||
5.50% 2/1/18 | 29,711 | 31,153 | ||||||
5.50% 4/1/19 | 13,493 | 14,211 | ||||||
5.50% 5/1/19 | 37,937 | 39,777 | ||||||
5.50% 10/1/21 | 12,212 | 13,303 | ||||||
5.50% 4/1/23 | 67,811 | 74,298 | ||||||
5.50% 6/1/23 | 48,283 | 53,124 | ||||||
6.00% 12/1/16 | 5,949 | 6,112 | ||||||
6.00% 8/1/17 | 16,140 | 16,693 | ||||||
6.00% 12/1/17 | 3,663 | 3,718 | ||||||
6.00% 3/1/21 | 831 | 895 | ||||||
6.00% 9/1/21 | 2,163,404 | 2,405,240 | ||||||
6.00% 2/1/22 | 47,087 | 50,478 | ||||||
6.00% 8/1/22 | 27,839 | 30,338 | ||||||
6.00% 2/1/23 | 3,562 | 3,937 | ||||||
Fannie Mae S.F. 20 yr | ||||||||
3.00% 10/1/32 | 20,741 | 21,532 | ||||||
3.00% 2/1/33 | 393,800 | 406,361 | ||||||
3.00% 8/1/33 | 168,822 | 174,209 | ||||||
3.00% 4/1/34 | 121,982 | 125,871 | ||||||
3.00% 8/1/34 | 1,175,807 | 1,212,961 | ||||||
3.50% 11/1/31 | 51,100 | 54,137 | ||||||
3.50% 4/1/32 | 21,719 | 22,947 | ||||||
3.50% 5/1/32 | 126,628 | 133,765 | ||||||
3.50% 8/1/32 | 599,322 | 633,549 | ||||||
3.50% 10/1/34 | 2,530,454 | 2,668,046 | ||||||
4.00% 12/1/30 | 220,943 | 237,812 | ||||||
4.00% 1/1/31 | 1,049,561 | 1,129,590 | ||||||
4.00% 2/1/31 | 2,492,862 | 2,683,080 | ||||||
4.50% 9/1/23 | 717,434 | 781,473 | ||||||
4.50% 4/1/24 | 6,930 | 7,548 | ||||||
5.00% 7/1/23 | 21,871 | 24,330 | ||||||
5.00% 11/1/23 | 412,354 | 458,712 | ||||||
5.00% 12/1/23 | 186,690 | 207,679 | ||||||
5.00% 3/1/28 | 34,329 | 38,189 | ||||||
5.50% 7/1/23 | 102,644 | 116,047 |
9
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Agency Mortgage-Backed Securities (continued) |
| |||||||
| ||||||||
Fannie Mae S.F. 20 yr | ||||||||
5.50% 2/1/24 | 208,457 | $ | 235,677 | |||||
5.50% 12/1/24 | 317,130 | 358,548 | ||||||
5.50% 1/1/25 | 210,901 | 238,462 | ||||||
5.50% 2/1/25 | 36,913 | 41,733 | ||||||
5.50% 7/1/25 | 30,189 | 34,131 | ||||||
5.50% 11/1/25 | 303,578 | 343,226 | ||||||
5.50% 3/1/27 | 97,469 | 110,197 | ||||||
5.50% 3/1/28 | 413,618 | 467,628 | ||||||
5.50% 8/1/28 | 1,596,073 | 1,804,485 | ||||||
5.50% 12/1/29 | 438,758 | 496,050 | ||||||
6.00% 10/1/21 | 14,678 | 16,750 | ||||||
6.00% 9/1/29 | 2,141,662 | 2,444,445 | ||||||
6.50% 10/1/18 | 3,667 | 4,225 | ||||||
6.50% 2/1/19 | 7,433 | 8,565 | ||||||
6.50% 5/1/22 | 4,801 | 5,531 | ||||||
6.50% 10/1/24 | 10,225 | 11,781 | ||||||
6.50% 10/1/27 | 53,484 | 61,625 | ||||||
Fannie Mae S.F. 30 yr | ||||||||
3.00% 7/1/42 | 3,225,879 | 3,292,353 | ||||||
3.00% 10/1/42 | 52,961,526 | 54,062,699 | ||||||
3.00% 12/1/42 | 9,145,481 | 9,335,359 | ||||||
3.00% 1/1/43 | 15,760,320 | 16,083,221 | ||||||
3.00% 2/1/43 | 1,899,353 | 1,938,553 | ||||||
3.00% 4/1/43 | 13,614,135 | 13,888,125 | ||||||
3.00% 5/1/43 | 2,972,910 | 3,030,890 | ||||||
3.50% 4/1/42 | 9,718 | 10,197 | ||||||
3.50% 9/1/42 | 242,077 | 254,080 | ||||||
3.50% 1/1/43 | 771,553 | 809,562 | ||||||
4.00% 5/1/43 | 549,109 | 594,038 | ||||||
4.00% 8/1/43 | 1,413,636 | 1,522,802 | ||||||
4.00% 7/1/44 | 14,186,412 | 15,353,612 | ||||||
4.50% 7/1/36 | 1,625,234 | 1,775,202 | ||||||
4.50% 4/1/40 | 4,141,323 | 4,520,213 | ||||||
4.50% 11/1/40 | 4,077,588 | 4,454,148 | ||||||
4.50% 12/1/40 | 1,520,163 | 1,660,836 | ||||||
4.50% 3/1/41 | 7,792,964 | 8,498,208 | ||||||
4.50% 4/1/41 | 7,558,177 | 8,260,600 | ||||||
4.50% 5/1/41 | 873,071 | 963,111 | ||||||
4.50% 7/1/41 | 1,997,877 | 2,184,257 | ||||||
4.50% 8/1/41 | 2,736 | 2,990 | ||||||
4.50% 10/1/41 | 5,733,127 | 6,275,132 | ||||||
4.50% 1/1/42 | 68,065,363 | 74,344,327 |
10
Table of Contents
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Agency Mortgage-Backed Securities (continued) |
| |||||||
| ||||||||
Fannie Mae S.F. 30 yr | ||||||||
4.50% 9/1/42 | 8,891,361 | $ | 9,756,383 | |||||
4.50% 12/1/43 | 720,598 | 784,919 | ||||||
4.50% 2/1/44 | 998,608 | 1,088,045 | ||||||
4.50% 5/1/44 | 3,577,370 | 3,900,461 | ||||||
4.50% 6/1/44 | 4,569,097 | 4,989,241 | ||||||
5.00% 4/1/33 | 107,473 | 120,291 | ||||||
5.00% 7/1/33 | 111,486 | 124,768 | ||||||
5.00% 11/1/33 | 122,349 | 136,936 | ||||||
5.00% 3/1/34 | 56,783 | 63,565 | ||||||
5.00% 4/1/34 | 243,671 | 271,181 | ||||||
5.00% 2/1/35 | 4,813 | 5,388 | ||||||
5.00% 4/1/35 | 597,635 | 667,611 | ||||||
5.00% 5/1/35 | 22,273 | 24,848 | ||||||
5.00% 6/1/35 | 3,513 | 3,919 | ||||||
5.00% 7/1/35 | 1,314,424 | 1,465,703 | ||||||
5.00% 8/1/35 | 576,726 | 642,835 | ||||||
5.00% 9/1/35 | 4,462 | 4,994 | ||||||
5.00% 10/1/35 | 2,938,174 | 3,276,326 | ||||||
5.00% 11/1/35 | 1,855,001 | 2,067,668 | ||||||
5.00% 7/1/36 | 3,194 | 3,568 | ||||||
5.00% 8/1/36 | 6,142 | 6,850 | ||||||
5.00% 12/1/36 | 10,302 | 11,486 | ||||||
5.00% 2/1/37 | 60,546 | 67,757 | ||||||
5.00% 4/1/37 | 774,328 | 863,307 | ||||||
5.00% 8/1/37 | 2,078,357 | 2,319,057 | ||||||
5.00% 2/1/38 | 925,829 | 1,031,967 | ||||||
5.00% 5/1/38 | 36,671 | 40,897 | ||||||
5.00% 6/1/39 | 278,345 | 310,322 | ||||||
5.50% 12/1/32 | 159,765 | 181,794 | ||||||
5.50% 2/1/33 | 2,513,251 | 2,858,706 | ||||||
5.50% 9/1/33 | 7,208 | 8,194 | ||||||
5.50% 3/1/34 | 217,634 | 247,707 | ||||||
5.50% 4/1/34 | 944,324 | 1,073,687 | ||||||
5.50% 5/1/34 | 417,510 | 475,381 | ||||||
5.50% 8/1/34 | 121,196 | 137,269 | ||||||
5.50% 9/1/34 | 121,396 | 138,153 | ||||||
5.50% 11/1/34 | 924,089 | 1,051,511 | ||||||
5.50% 12/1/34 | 605,061 | 688,176 | ||||||
5.50% 1/1/35 | 2,492,453 | 2,833,883 | ||||||
5.50% 2/1/35 | 659,885 | 750,680 | ||||||
5.50% 3/1/35 | 430,843 | 488,428 | ||||||
5.50% 4/1/35 | 2,491 | 2,852 |
11
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Agency Mortgage-Backed Securities (continued) |
| |||||||
| ||||||||
Fannie Mae S.F. 30 yr | ||||||||
5.50% 5/1/35 | 7,786 | $ | 8,843 | |||||
5.50% 6/1/35 | 655,364 | 741,290 | ||||||
5.50% 8/1/35 | 186,483 | 212,140 | ||||||
5.50% 9/1/35 | 2,787 | 3,164 | ||||||
5.50% 10/1/35 | 2,587,199 | 2,935,681 | ||||||
5.50% 11/1/35 | 8,030 | 9,099 | ||||||
5.50% 12/1/35 | 520,401 | 591,826 | ||||||
5.50% 1/1/36 | 589,590 | 669,367 | ||||||
5.50% 3/1/36 | 39,140 | 44,349 | ||||||
5.50% 4/1/36 | 2,283,705 | 2,582,191 | ||||||
5.50% 5/1/36 | 1,976,821 | 2,238,468 | ||||||
5.50% 7/1/36 | 554,709 | 630,212 | ||||||
5.50% 9/1/36 | 191,247 | 217,585 | ||||||
5.50% 11/1/36 | 2,078,954 | 2,351,507 | ||||||
5.50% 12/1/36 | 94,822 | 107,203 | ||||||
5.50% 1/1/37 | 3,185,200 | 3,606,324 | ||||||
5.50% 2/1/37 | 47,640 | 53,884 | ||||||
5.50% 4/1/37 | 5,853,679 | 6,625,230 | ||||||
5.50% 8/1/37 | 2,626,481 | 2,985,143 | ||||||
5.50% 11/1/37 | 34,262 | 38,736 | ||||||
5.50% 12/1/37 | 4,812 | 5,441 | ||||||
5.50% 1/1/38 | 267,361 | 302,272 | ||||||
5.50% 2/1/38 | 2,395,419 | 2,717,619 | ||||||
5.50% 3/1/38 | 1,552,392 | 1,761,896 | ||||||
5.50% 4/1/38 | 17,049 | 19,276 | ||||||
5.50% 5/1/38 | 228,565 | 258,410 | ||||||
5.50% 6/1/38 | 6,324,530 | 7,150,374 | ||||||
5.50% 7/1/38 | 44,137 | 49,900 | ||||||
5.50% 8/1/38 | 43,101 | 48,729 | ||||||
5.50% 9/1/38 | 428,482 | 486,074 | ||||||
5.50% 11/1/38 | 102,315 | 115,676 | ||||||
5.50% 12/1/38 | 595,615 | 676,603 | ||||||
5.50% 1/1/39 | 3,325,417 | 3,771,316 | ||||||
5.50% 2/1/39 | 11,158,389 | 12,657,970 | ||||||
5.50% 9/1/39 | 8,167 | 9,233 | ||||||
5.50% 10/1/39 | 2,429,470 | 2,746,706 | ||||||
5.50% 11/1/39 | 19,392 | 21,924 | ||||||
5.50% 12/1/39 | 995,810 | 1,140,214 | ||||||
5.50% 5/1/40 | 11,303 | 12,779 | ||||||
5.50% 6/1/40 | 7,365 | 8,327 | ||||||
5.50% 7/1/40 | 2,313,427 | 2,618,265 | ||||||
5.50% 4/1/41 | 1,426,287 | 1,618,450 |
12
Table of Contents
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Agency Mortgage-Backed Securities (continued) |
| |||||||
| ||||||||
Fannie Mae S.F. 30 yr | ||||||||
5.50% 9/1/41 | 28,090,229 | $ | 31,765,278 | |||||
6.00% 7/1/27 | 6,896 | 7,954 | ||||||
6.00% 4/1/32 | 14,004 | 16,159 | ||||||
6.00% 8/1/34 | 315,211 | 362,701 | ||||||
6.00% 11/1/34 | 15,701 | 18,072 | ||||||
6.00% 12/1/34 | 3,471 | 3,989 | ||||||
6.00% 6/1/35 | 3,291 | 3,756 | ||||||
6.00% 7/1/35 | 75,274 | 86,551 | ||||||
6.00% 9/1/35 | 100,210 | 115,198 | ||||||
6.00% 10/1/35 | 46,733 | 53,750 | ||||||
6.00% 11/1/35 | 27,241 | 31,356 | ||||||
6.00% 12/1/35 | 533,447 | 613,473 | ||||||
6.00% 6/1/36 | 301,231 | 344,937 | ||||||
6.00% 7/1/36 | 24,352 | 27,847 | ||||||
6.00% 8/1/36 | 230,424 | 263,333 | ||||||
6.00% 9/1/36 | 141,873 | 162,409 | ||||||
6.00% 12/1/36 | 321,263 | 369,952 | ||||||
6.00% 2/1/37 | 952,117 | 1,089,984 | ||||||
6.00% 3/1/37 | 31,445 | 35,989 | ||||||
6.00% 5/1/37 | 2,552,024 | 2,919,785 | ||||||
6.00% 6/1/37 | 166,179 | 191,860 | ||||||
6.00% 7/1/37 | 166,936 | 191,033 | ||||||
6.00% 8/1/37 | 2,373,125 | 2,716,018 | ||||||
6.00% 9/1/37 | 745,083 | 851,449 | ||||||
6.00% 10/1/37 | 472,854 | 541,336 | ||||||
6.00% 11/1/37 | 452,946 | 522,754 | ||||||
6.00% 1/1/38 | 1,330,420 | 1,519,779 | ||||||
6.00% 3/1/38 | 1,020 | 1,176 | ||||||
6.00% 5/1/38 | 4,626,017 | 5,290,167 | ||||||
6.00% 6/1/38 | 373,515 | 430,152 | ||||||
6.00% 7/1/38 | 114,204 | 130,510 | ||||||
6.00% 8/1/38 | 289,261 | 331,083 | ||||||
6.00% 9/1/38 | 791,766 | 905,960 | ||||||
6.00% 10/1/38 | 3,750,411 | 4,287,686 | ||||||
6.00% 11/1/38 | 708,411 | 815,475 | ||||||
6.00% 12/1/38 | 462,626 | 532,865 | ||||||
6.00% 1/1/39 | 1,601,082 | 1,834,163 | ||||||
6.00% 9/1/39 | 275,836 | 315,672 | ||||||
6.00% 10/1/39 | 1,756,373 | 2,026,894 | ||||||
6.00% 1/1/40 | 12,690 | 14,651 | ||||||
6.00% 3/1/40 | 1,281,111 | 1,465,378 | ||||||
6.00% 7/1/40 | 5,110,000 | 5,845,678 |
13
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Agency Mortgage-Backed Securities (continued) |
| |||||||
| ||||||||
Fannie Mae S.F. 30 yr | ||||||||
6.00% 9/1/40 | 1,180,799 | $ | 1,352,209 | |||||
6.00% 11/1/40 | 459,002 | 529,928 | ||||||
6.00% 5/1/41 | 12,881,719 | 14,767,407 | ||||||
6.50% 3/1/32 | 198 | 228 | ||||||
6.50% 8/1/34 | 5,171 | 5,958 | ||||||
6.50% 1/1/36 | 34,020 | 39,198 | ||||||
6.50% 2/1/36 | 1,088,714 | 1,263,524 | ||||||
6.50% 3/1/36 | 54,741 | 65,189 | ||||||
6.50% 8/1/36 | 103,631 | 119,500 | ||||||
6.50% 9/1/36 | 50,025 | 57,753 | ||||||
6.50% 11/1/36 | 401,302 | 466,103 | ||||||
6.50% 3/1/37 | 14,191 | 16,527 | ||||||
6.50% 8/1/37 | 81,787 | 94,968 | ||||||
6.50% 9/1/37 | 755,886 | 870,935 | ||||||
6.50% 11/1/37 | 1,520 | 1,769 | ||||||
6.50% 12/1/37 | 299,208 | 347,943 | ||||||
6.50% 1/1/38 | 2,659 | 3,234 | ||||||
6.50% 10/1/38 | 37,354 | 43,504 | ||||||
6.50% 11/1/38 | 26,576 | 30,694 | ||||||
6.50% 1/1/39 | 17,597 | 20,389 | ||||||
6.50% 6/1/39 | 6,255 | 7,283 | ||||||
6.50% 3/1/40 | 1,008,476 | 1,176,572 | ||||||
7.00% 8/1/32 | 69,007 | 79,190 | ||||||
7.00% 9/1/32 | 38,255 | 40,653 | ||||||
7.00% 2/1/36 | 10,242 | 11,234 | ||||||
7.00% 12/1/37 | 4,475 | 4,869 | ||||||
7.50% 1/1/31 | 1,232 | 1,518 | ||||||
7.50% 3/1/32 | 17,497 | 20,690 | ||||||
7.50% 4/1/32 | 14,635 | 17,295 | ||||||
7.50% 6/1/34 | 21,766 | 25,476 | ||||||
7.50% 10/1/34 | 14,358 | 17,387 | ||||||
Fannie Mae S.F. 30 yr TBA | ||||||||
3.00% 5/1/45 | 50,435,000 | 51,318,687 | ||||||
3.00% 6/1/45 | 144,519,000 | 146,701,150 | ||||||
4.50% 6/1/45 | 7,119,000 | 7,739,130 | ||||||
Freddie Mac ARM | ||||||||
2.181% 8/1/37 • | 6,667 | 7,083 | ||||||
2.25% 2/1/37 • | 552,525 | 589,593 | ||||||
2.261% 7/1/36 • | 256,197 | 272,916 | ||||||
2.265% 10/1/36 • | 54,520 | 58,306 | ||||||
2.267% 12/1/33 • | 36,480 | 38,781 | ||||||
2.275% 10/1/37 • | 51,332 | 54,169 |
14
Table of Contents
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Agency Mortgage-Backed Securities (continued) |
| |||||||
| ||||||||
Freddie Mac ARM | ||||||||
2.307% 4/1/34 • | 16,703 | $ | 17,751 | |||||
2.339% 5/1/35 • | 238,066 | 252,953 | ||||||
2.342% 12/1/33 • | 213,021 | 227,894 | ||||||
2.42% 3/1/36 • | 65,355 | 69,900 | ||||||
2.462% 4/1/33 • | 4,704 | 4,871 | ||||||
2.534% 1/1/44 • | 4,079,093 | 4,200,498 | ||||||
3.465% 5/1/42 • | 712,274 | 742,041 | ||||||
4.884% 8/1/38 • | 66,169 | 69,870 | ||||||
Freddie Mac Relocation 15 yr | ||||||||
3.50% 10/1/18 | 35,566 | 36,587 | ||||||
Freddie Mac Relocation 30 yr | ||||||||
5.00% 9/1/33 | 140,596 | 154,988 | ||||||
6.50% 10/1/30 | 558 | 593 | ||||||
Freddie Mac S.F. 15 yr | ||||||||
2.50% 3/1/28 | 1,656,159 | 1,702,360 | ||||||
3.00% 12/1/26 | 140,491 | 147,568 | ||||||
3.50% 10/1/26 | 944,473 | 1,012,991 | ||||||
4.00% 12/1/20 | 47,840 | 50,493 | ||||||
4.00% 5/1/24 | 69,255 | 73,738 | ||||||
4.00% 6/1/24 | 42,951 | 45,723 | ||||||
4.00% 12/1/24 | 4,253 | 4,525 | ||||||
4.00% 5/1/25 | 472,331 | 507,331 | ||||||
4.00% 8/1/25 | 10,869 | 11,674 | ||||||
4.00% 11/1/26 | 1,675,036 | 1,782,773 | ||||||
4.50% 5/1/20 | 680,398 | 716,801 | ||||||
4.50% 6/1/20 | 63,545 | 66,969 | ||||||
4.50% 10/1/20 | 17,016 | 17,932 | ||||||
4.50% 9/1/24 | 62,794 | 67,595 | ||||||
4.50% 7/1/25 | 554,937 | 597,453 | ||||||
4.50% 6/1/26 | 1,443,505 | 1,554,601 | ||||||
4.50% 9/1/26 | 1,878,403 | 2,018,936 | ||||||
5.00% 6/1/18 | 200,545 | 210,515 | ||||||
5.00% 10/1/18 | 22,214 | 23,532 | ||||||
5.00% 11/1/18 | 18,006 | 18,901 | ||||||
5.00% 4/1/20 | 310,117 | 328,631 | ||||||
5.00% 7/1/23 | 87,783 | 95,347 | ||||||
5.50% 6/1/21 | 140,732 | 153,083 | ||||||
5.50% 7/1/21 | 102,994 | 112,198 | ||||||
6.00% 4/1/17 | 4,303 | 4,419 | ||||||
6.00% 8/1/17 | 1,887 | 1,962 | ||||||
6.50% 8/1/16 | 523 | 533 |
15
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Agency Mortgage-Backed Securities (continued) |
| |||||||
| ||||||||
Freddie Mac S.F. 20 yr | ||||||||
3.50% 1/1/34 | 4,495,920 | $ | 4,733,508 | |||||
5.00% 10/1/23 | 68,265 | 75,794 | ||||||
5.00% 3/1/24 | 394,685 | 438,214 | ||||||
5.00% 9/1/25 | 2,223,429 | 2,468,649 | ||||||
5.00% 12/1/29 | 149,227 | 166,088 | ||||||
5.50% 1/1/23 | 11,083 | 12,491 | ||||||
Freddie Mac S.F. 30 yr | ||||||||
3.00% 10/1/42 | 4,157,981 | 4,234,080 | ||||||
3.00% 11/1/42 | 4,931,100 | 5,034,794 | ||||||
3.50% 11/1/41 | 180,635 | 190,154 | ||||||
3.50% 4/1/42 | 60,652 | 63,580 | ||||||
4.50% 7/1/39 | 920,629 | 1,002,352 | ||||||
4.50% 10/1/39 | 2,171,738 | 2,364,782 | ||||||
4.50% 4/1/41 | 9,509,518 | 10,383,313 | ||||||
4.50% 3/1/42 | 9,065,398 | 9,888,040 | ||||||
4.50% 5/1/44 | 2,929,313 | 3,185,523 | ||||||
5.00% 3/1/34 | 89,585 | 100,359 | ||||||
5.00% 4/1/35 | 31,172 | 34,905 | ||||||
5.00% 6/1/36 | 16,930 | 18,858 | ||||||
5.50% 3/1/34 | 327,554 | 371,748 | ||||||
5.50% 12/1/34 | 324,264 | 368,564 | ||||||
5.50% 1/1/35 | 3,218 | 3,647 | ||||||
5.50% 2/1/35 | 12,899 | 14,614 | ||||||
5.50% 3/1/36 | 208,944 | 236,613 | ||||||
5.50% 6/1/36 | 230,908 | 261,351 | ||||||
5.50% 11/1/36 | 385,266 | 435,024 | ||||||
5.50% 12/1/36 | 103,056 | 116,175 | ||||||
5.50% 1/1/37 | 23,733 | 26,821 | ||||||
5.50% 9/1/37 | 483,387 | 545,392 | ||||||
5.50% 11/1/37 | 19,656 | 22,187 | ||||||
5.50% 4/1/38 | 1,568,154 | 1,769,942 | ||||||
5.50% 6/1/38 | 225,924 | 255,035 | ||||||
5.50% 7/1/38 | 1,782,730 | 2,010,734 | ||||||
5.50% 6/1/39 | 1,699,389 | 1,915,463 | ||||||
5.50% 3/1/40 | 1,283,519 | 1,448,878 | ||||||
5.50% 8/1/40 | 1,046,690 | 1,180,333 | ||||||
5.50% 1/1/41 | 1,029,643 | 1,160,468 | ||||||
5.50% 6/1/41 | 12,588,738 | 14,192,708 | ||||||
6.00% 12/1/33 | 11,589 | 13,345 | ||||||
6.00% 11/1/34 | 41,836 | 47,614 | ||||||
6.00% 2/1/36 | 4,472,174 | 5,143,798 | ||||||
6.00% 3/1/36 | 1,160,192 | 1,332,427 |
16
Table of Contents
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Agency Mortgage-Backed Securities (continued) |
| |||||||
| ||||||||
Freddie Mac S.F. 30 yr | ||||||||
6.00% 4/1/36 | 20,722 | $ | 23,565 | |||||
6.00% 10/1/36 | 22,954 | 26,251 | ||||||
6.00% 4/1/37 | 32,053 | 36,487 | ||||||
6.00% 8/1/37 | 22,275 | 25,331 | ||||||
6.00% 10/1/37 | 14,160 | 16,122 | ||||||
6.00% 1/1/38 | 433,764 | 493,285 | ||||||
6.00% 6/1/38 | 1,279,147 | 1,456,797 | ||||||
6.00% 7/1/38 | 14,050 | 16,021 | ||||||
6.00% 8/1/38 | 3,415,404 | 3,903,402 | ||||||
6.00% 10/1/38 | 118,984 | 135,986 | ||||||
6.00% 5/1/40 | 578,430 | 658,050 | ||||||
6.00% 7/1/40 | 4,422,328 | 5,045,124 | ||||||
6.50% 10/1/32 | 1,247 | 1,433 | ||||||
6.50% 8/1/36 | 297 | 342 | ||||||
6.50% 6/1/37 | 8,165 | 9,380 | ||||||
6.50% 8/1/38 | 292,839 | 336,400 | ||||||
6.50% 9/1/38 | 859 | 998 | ||||||
6.50% 4/1/39 | 588,327 | 675,844 | ||||||
7.00% 11/1/33 | 169,273 | 207,494 | ||||||
GNMA I S.F. 30 yr | ||||||||
5.00% 6/15/40 | 633,871 | 709,689 | ||||||
7.00% 5/15/28 | 96,097 | 113,798 | ||||||
7.00% 12/15/34 | 2,024,212 | 2,450,765 | ||||||
7.50% 10/15/30 | 1,409 | 1,610 | ||||||
7.50% 2/15/32 | 1,724 | 2,132 | ||||||
9.50% 9/15/17 | 1,487 | 1,520 | ||||||
10.00% 7/15/17 | 1,507 | 1,515 | ||||||
|
| |||||||
Total Agency Mortgage-Backed Securities (cost $863,912,454) | 877,887,532 | |||||||
|
| |||||||
| ||||||||
Collateralized Debt Obligation – 0.17% | ||||||||
| ||||||||
CIFC Funding | ||||||||
Series 2013-2A A1L 144A 1.425% 4/21/25 #• | 10,000,000 | 9,867,000 | ||||||
|
| |||||||
Total Collateralized Debt Obligation (cost $9,973,651) | 9,867,000 | |||||||
|
| |||||||
| ||||||||
Commercial Mortgage-Backed Securities – 5.82% | ||||||||
| ||||||||
Banc of America Commercial Mortgage Trust | ||||||||
Series 2006-1 AM 5.421% 9/10/45 • | 1,374,000 | 1,408,279 | ||||||
Series 2006-4 A4 5.634% 7/10/46 | 543,825 | 562,498 | ||||||
Series 2007-4 AM 6.011% 2/10/51 • | 3,670,000 | 3,977,351 | ||||||
Bear Stearns Commercial Mortgage Securities Trust | ||||||||
Series 2007-PWR18 A4 5.70% 6/11/50 | 2,940,000 | 3,170,667 |
17
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Commercial Mortgage-Backed Securities (continued) |
| |||||||
| ||||||||
CD Commercial Mortgage Trust | ||||||||
Series 2005-CD1 AM 5.396% 7/15/44 • | 5,841,000 | $ | 5,916,378 | |||||
Series 2005-CD1 C 5.396% 7/15/44 • | 1,620,000 | 1,631,552 | ||||||
Citigroup Commercial Mortgage Trust | ||||||||
Series 2014-GC25 A4 3.635% 10/10/47 | 5,655,000 | 5,996,115 | ||||||
Series 2015-GC27 A5 3.137% 2/10/48 | 2,125,000 | 2,162,974 | ||||||
COMM Mortgage Trust | ||||||||
Series 2014-CR19 A5 3.796% 8/10/47 | 2,945,000 | 3,161,036 | ||||||
Series 2014-CR20 A4 3.59% 11/10/47 | 8,335,000 | 8,814,071 | ||||||
Series 2014-CR20 AM 3.938% 11/10/47 | 4,335,000 | 4,584,106 | ||||||
Series 2014-CR21 A3 3.528% 12/10/47 | 1,950,000 | 2,051,973 | ||||||
Series 2015-3BP A 144A 3.178% 2/10/35 # | 9,890,000 | 10,051,069 | ||||||
Series 2015-DC1 A5 3.35% 2/10/48 | 4,920,000 | 5,085,897 | ||||||
Commercial Mortgage Trust | ||||||||
Series 2007-GG9 AM 5.475% 3/10/39 | 2,725,000 | 2,863,346 | ||||||
Credit Suisse First Boston Mortgage Securities | ||||||||
Series 2005-C5 AM 5.10% 8/15/38 • | 3,410,000 | 3,429,901 | ||||||
DB-UBS Mortgage Trust | ||||||||
Series 2011-LC1A A3 144A 5.002% 11/10/46 # | 16,319,000 | 18,536,246 | ||||||
Series 2011-LC1A C 144A 5.73% 11/10/46 #• | 5,320,000 | 6,027,677 | ||||||
FREMF Mortgage Trust | ||||||||
Series 2011-K10 B 144A 4.776% 11/25/49 #• | 3,210,000 | 3,511,104 | ||||||
Series 2011-K15 B 144A 5.098% 8/25/44 #• | 485,000 | 536,949 | ||||||
Series 2011-K703 B 144A 5.048% 7/25/44 #• | 1,280,000 | 1,379,255 | ||||||
Series 2012-K18 B 144A 4.41% 1/25/45 #• | 2,450,000 | 2,621,404 | ||||||
Series 2012-K19 B 144A 4.176% 5/25/45 #• | 1,130,963 | 1,202,606 | ||||||
Series 2012-K22 B 144A 3.812% 8/25/45 #• | 4,285,000 | 4,428,749 | ||||||
Series 2012-K22 C 144A 3.812% 8/25/45 #• | 3,450,000 | 3,467,447 | ||||||
Series 2012-K707 B 144A 4.019% 1/25/47 #• | 1,715,000 | 1,794,777 | ||||||
Series 2012-K708 B 144A 3.887% 2/25/45 #• | 7,330,000 | 7,639,854 | ||||||
Series 2012-K708 C 144A 3.887% 2/25/45 #• | 1,380,000 | 1,411,741 | ||||||
Series 2012-K711 B 144A 3.684% 8/25/45 #• | 4,740,000 | 4,937,042 | ||||||
Series 2013-K25 C 144A 3.743% 11/25/45 #• | 5,300,000 | 5,252,242 | ||||||
Series 2013-K26 C 144A 3.723% 12/25/45 #• | 2,150,000 | 2,144,343 | ||||||
Series 2013-K30 C 144A 3.667% 6/25/45 #• | 3,895,000 | 3,821,992 | ||||||
Series 2013-K31 C 144A 3.74% 7/25/46 #• | 7,355,000 | 7,295,071 | ||||||
Series 2013-K33 B 144A 3.619% 8/25/46 #• | 3,285,000 | 3,342,221 | ||||||
Series 2013-K33 C 144A 3.619% 8/25/46 #• | 2,260,000 | 2,224,459 | ||||||
Series 2013-K712 B 144A 3.484% 5/25/45 #• | 10,101,068 | 10,375,393 | ||||||
Series 2013-K713 B 144A 3.274% 4/25/46 #• | 8,315,000 | 8,459,681 | ||||||
Series 2013-K713 C 144A 3.274% 4/25/46 #• | 5,465,000 | 5,411,290 | ||||||
Series 2014-K716 C 144A 4.086% 8/25/47 #• | 2,755,000 | 2,810,442 |
18
Table of Contents
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Commercial Mortgage-Backed Securities (continued) |
| |||||||
| ||||||||
GE Capital Commercial Mortgage | ||||||||
Series 2005-C4 A4 5.493% 11/10/45 • | 108,000 | $ | 108,993 | |||||
GRACE Mortgage Trust | ||||||||
Series 2014-GRCE A 144A 3.369% 6/10/28 # | 21,810,000 | 22,916,661 | ||||||
GS Mortgage Securities Trust | ||||||||
Series 2006-GG6 A4 5.553% 4/10/38 • | 8,640,000 | 8,744,242 | ||||||
Series 2010-C1 A2 144A 4.592% 8/10/43 # | 9,975,000 | 11,097,367 | ||||||
Series 2010-C1 C 144A 5.635% 8/10/43 #• | 4,765,000 | 5,322,958 | ||||||
Hilton USA Trust | ||||||||
Series 2013-HLT AFX 144A 2.662% 11/5/30 # | 10,480,000 | 10,464,689 | ||||||
Series 2013-HLT BFX 144A 3.367% 11/5/30 # | 9,470,000 | 9,565,600 | ||||||
Houston Galleria Mall Trust | ||||||||
Series 2015-HGLR A1A2 144A 3.087% 3/5/37 # | 8,510,000 | 8,561,834 | ||||||
JPMBB Commercial Mortgage Securities Trust | ||||||||
Series 2014-C18 A1 1.254% 2/15/47 | 6,149,508 | 6,145,609 | ||||||
Series 2014-C22 B 4.713% 9/15/47 • | 1,600,000 | 1,731,317 | ||||||
JPMorgan Chase Commercial Mortgage Securities Trust | ||||||||
Series 2005-CB11 E 5.666% 8/12/37 • | 1,765,000 | 1,912,333 | ||||||
Series 2005-LDP4 AJ 5.04% 10/15/42 • | 7,665,000 | 7,717,735 | ||||||
Series 2005-LDP5 D 5.568% 12/15/44 • | 2,895,000 | 2,947,808 | ||||||
Series 2006-LDP8 AM 5.44% 5/15/45 | 12,218,000 | 12,824,086 | ||||||
Series 2011-C5 C 144A 5.50% 8/15/46 #• | 3,780,000 | 4,223,050 | ||||||
LB-UBS Commercial Mortgage Trust | ||||||||
Series 2004-C1 A4 4.568% 1/15/31 | 543,474 | 552,294 | ||||||
Series 2006-C6 AJ 5.452% 9/15/39 • | 6,325,000 | 6,612,604 | ||||||
Series 2006-C6 AM 5.413% 9/15/39 | 5,285,000 | 5,568,614 | ||||||
Morgan Stanley Bank of America Merrill Lynch Trust | ||||||||
Series 2014-C19 AS 3.832% 12/15/47 | 1,513,000 | 1,584,577 | ||||||
Series 2015-C22 A3 3.046% 5/15/46 | 2,920,000 | 2,936,495 | ||||||
Morgan Stanley Capital I Trust | ||||||||
Series 2005-HQ7 AJ 5.363% 11/14/42 • | 5,235,000 | 5,298,485 | ||||||
Series 2005-HQ7 C 5.363% 11/14/42 • | 5,840,000 | 5,881,359 | ||||||
Series 2006-T21 B 144A 5.459% 10/12/52 #• | 2,000,000 | 2,049,688 | ||||||
TimberStar Trust I | ||||||||
Series 2006-1A A 144A 5.668% 10/15/36 # | 7,090,000 | 7,482,261 | ||||||
Series 2006-1A C 144A 5.884% 10/15/36 # | 4,500,000 | 4,702,873 | ||||||
WFRBS Commercial Mortgage Trust | ||||||||
Series 2014-C23 A5 3.917% 10/15/57 | 3,035,000 | 3,281,208 | ||||||
|
| |||||||
Total Commercial Mortgage-Backed Securities (cost $332,239,852) | 333,733,938 | |||||||
|
| |||||||
| ||||||||
Convertible Bonds – 1.53% | ||||||||
| ||||||||
Abengoa 144A 5.125% exercise price $38.74, expiration date 2/23/17 # | 2,000,000 | 2,020,000 |
19
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Convertible Bonds (continued) | ||||||||
| ||||||||
Alaska Communications Systems Group 6.25% exercise price $10.28, expiration date 4/27/18 | 3,704,000 | $ | 3,724,835 | |||||
American Realty Capital Properties 3.75% exercise price $15.15, expiration date 12/14/20 | 2,028,000 | 1,950,693 | ||||||
Ares Capital 5.75% exercise price $19.13, expiration date 2/1/16 | 924,000 | 948,833 | ||||||
BGC Partners 4.50% exercise price $9.84, expiration date 7/13/16 | 2,653,000 | 2,984,625 | ||||||
BioMarin Pharmaceutical 1.50% exercise price $94.15, expiration date 10/13/20 | 1,763,000 | 2,482,524 | ||||||
Blackstone Mortgage Trust 5.25% exercise price $28.66, expiration date 12/1/18 | 3,590,000 | 3,940,025 | ||||||
Blucora 4.25% exercise price $21.66, expiration date 3/29/19 | 845,000 | 796,941 | ||||||
Campus Crest Communities Operating Partnership 144A 4.75% exercise price $12.56, expiration date 10/11/18 # | 3,054,000 | 2,971,924 | ||||||
Cardtronics 1.00% exercise price $52.35, expiration date 11/27/20 | 2,770,000 | 2,776,925 | ||||||
Cemex 3.25% exercise price $9.27, expiration date 3/9/16 | 2,177,000 | 2,517,156 | ||||||
Chart Industries 2.00% exercise price $69.03, expiration date 7/30/18 | 2,226,000 | 2,351,213 | ||||||
Chesapeake Energy 2.25% exercise price $80.28, expiration date 12/14/38 | 1,000,000 | 925,625 | ||||||
Ciena 144A 3.75% exercise price $20.17, expiration date 10/15/18 # | 1,864,000 | 2,444,170 | ||||||
Gain Capital Holdings 4.125% exercise price $12.00, expiration date 11/30/18 | 1,667,000 | 1,796,193 | ||||||
General Cable 4.50% exercise price $34.47, expiration date 11/15/29 f | 3,050,000 | 2,335,156 | ||||||
Gilead Sciences 1.625% exercise price $22.71, expiration date 4/29/16 | 765,000 | 3,377,479 | ||||||
HealthSouth 2.00% exercise price $38.82, expiration date 11/30/43 | 1,043,000 | 1,316,136 | ||||||
Hologic 2.00% exercise price $31.17, expiration date 2/27/42 f | 1,522,000 | 1,907,256 | ||||||
Illumina 0.25% exercise price $83.55, expiration date 3/11/16 | 598,000 | 1,319,714 | ||||||
j2 Global 3.25% exercise price $69.37, expiration date 6/14/29 | 2,885,000 | 3,442,166 | ||||||
Jefferies Group 3.875% exercise price $44.94, expiration date 10/31/29 | 2,086,000 | 2,135,543 | ||||||
Liberty Interactive 0.75% exercise price $1,000. 00, expiration date 3/30/43 | 2,118,000 | 3,076,395 | ||||||
Liberty Interactive 144A 1.00% exercise price $64.31, expiration date 9/28/43 # | 2,202,000 | 2,076,761 |
20
Table of Contents
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Convertible Bonds (continued) |
| |||||||
| ||||||||
Meritor 4.00% exercise price $26.73, expiration date 2/12/27 | 2,851,000 | $ | 3,000,677 | |||||
Microchip Technology 144A 1.625% exercise price $68.17, expiration date 2/13/25 # | 393,000 | 403,807 | ||||||
Mylan 3.75% exercise price $13.32, expiration date 9/10/15 | 516,000 | 2,793,817 | ||||||
Novellus Systems 2.625% exercise price $34.78, expiration date 5/14/41 | 1,581,000 | 3,491,046 | ||||||
NuVasive 2.75% exercise price $42.13, expiration date 6/30/17 | 3,385,000 | 4,186,822 | ||||||
NXP Semiconductors 144A 1.00% exercise price $102.84, expiration date 11/27/19 # | 1,530,000 | 1,797,750 | ||||||
Oclaro 144A 6.00% exercise price $1.95, expiration date 2/14/20 # | 598,000 | 720,964 | ||||||
Peabody Energy 4.75% exercise price $57.15, expiration date 12/15/41 | 5,393,000 | 1,668,459 | ||||||
PROS Holdings 144A 2.00% exercise price $33.79, expiration date 11/27/19 # | 1,564,000 | 1,547,383 | ||||||
SanDisk 1.50% exercise price $50.94, expiration date 8/11/17 | 589,000 | 849,633 | ||||||
Spectrum Pharmaceuticals 2.75% exercise price $10.53, expiration date 12/13/18 | 992,000 | 897,760 | ||||||
Spirit Realty Capital 3.75% exercise price $13.10, expiration date 5/13/21 | 1,955,000 | 1,940,347 | ||||||
Titan Machinery 3.75% exercise price $43.17, expiration date 4/30/19 | 525,000 | 406,875 | ||||||
TPG Specialty Lending 144A 4.50% exercise price $25.83, expiration date 12/15/19 # | 2,258,000 | 2,262,234 | ||||||
Vantage Drilling 144A 5.50% exercise price $2.39, expiration date 7/15/43 # | 1,117,000 | 710,691 | ||||||
Vector Group 1.75% exercise price $25.87, expiration date 4/15/20 | 2,229,000 | 2,396,175 | ||||||
Vector Group 2.50% exercise price $16.78, expiration date 1/14/19 • | 978,000 | 1,377,009 | ||||||
VeriSign 4.136% exercise price $34.37, expiration date 8/15/37 | 863,000 | 1,639,700 | ||||||
|
| |||||||
Total Convertible Bonds (cost $80,582,722) | 87,709,437 | |||||||
|
| |||||||
| ||||||||
Corporate Bonds – 49.81% | ||||||||
| ||||||||
Automotive – 1.11% | ||||||||
American Axle & Manufacturing 6.25% 3/15/21 | 4,810,000 | 5,086,575 | ||||||
Dana Holding 5.50% 12/15/24 | 5,653,000 | 5,836,723 | ||||||
Fiat Chrysler Automobiles 144A 4.50% 4/15/20 # | 6,580,000 | 6,639,220 |
21
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||||
| ||||||||||
Corporate Bonds (continued) | ||||||||||
| ||||||||||
Automotive (continued) | ||||||||||
Fiat Chrysler Automobiles | ||||||||||
144A 5.25% 4/15/23 # | 9,475,000 | $ | 9,593,437 | |||||||
Ford Motor 7.45% 7/16/31 | 9,269,000 | 12,615,545 | ||||||||
Gates Global 144A 6.00% 7/15/22 # | 2,480,000 | 2,325,000 | ||||||||
Lear 5.25% 1/15/25 | 12,160,000 | 12,479,200 | ||||||||
Meritor 6.75% 6/15/21 | 2,195,000 | 2,304,750 | ||||||||
Schaeffler Finance 144A 4.75% 5/15/23 # | 1,000,000 | 1,027,500 | ||||||||
TRW Automotive 144A 4.50% 3/1/21 # | 4,570,000 | 4,644,263 | ||||||||
ZF North America Capital | ||||||||||
144A 4.50% 4/29/22 # | 390,000 | 391,219 | ||||||||
144A 4.75% 4/29/25 # | 572,000 | 576,290 | ||||||||
|
| |||||||||
63,519,722 | ||||||||||
|
| |||||||||
Banking – 5.67% | ||||||||||
Akbank 144A 4.00% 1/24/20 # | 5,895,000 | 5,746,092 | ||||||||
ANZ New Zealand International 144A 2.60% 9/23/19 # | 1,300,000 | 1,322,546 | ||||||||
Bank of America | ||||||||||
3.95% 4/21/25 | 7,990,000 | 7,885,699 | ||||||||
4.75% 4/21/45 | 1,000,000 | 990,400 | ||||||||
Bank of Georgia 144A 7.75% 7/5/17 # | 1,645,000 | 1,732,185 | ||||||||
BBVA Banco Continental 144A 5.00% 8/26/22 # | 2,080,000 | 2,236,000 | ||||||||
BBVA Bancomer | ||||||||||
144A 6.50% 3/10/21 # | 7,925,000 | 8,876,000 | ||||||||
144A 7.25% 4/22/20 # | 935,000 | 1,061,225 | ||||||||
BBVA Colombia 144A 4.875% 4/21/25 # | 5,590,000 | 5,652,887 | ||||||||
Citigroup 3.30% 4/27/25 | 7,205,000 | 7,149,939 | ||||||||
City National 5.25% 9/15/20 | 5,680,000 | 6,522,696 | ||||||||
Compass Bank 3.875% 4/10/25 | 5,505,000 | 5,391,085 | ||||||||
Cooperatieve Centrale Raiffeisen-Boerenleenbank | ||||||||||
2.50% 9/4/20 | NOK | 8,100,000 | 1,110,209 | |||||||
4.25% 1/13/22 | AUD | 1,469,000 | 1,209,176 | |||||||
4.625% 12/1/23 | 6,315,000 | 6,802,707 | ||||||||
Credit Suisse 144A 6.50% 8/8/23 # | 9,325,000 | 10,670,644 | ||||||||
Credit Suisse Group 144A 7.50% 12/29/49 #• | 1,255,000 | 1,345,987 | ||||||||
Credit Suisse Group Funding Guernsey 144A | ||||||||||
3.75% 3/26/25 # | 6,140,000 | 6,134,357 | ||||||||
Export-Import Bank of China 144A 2.50% 7/31/19 # | 5,370,000 | 5,433,275 | ||||||||
Export-Import Bank of Korea | ||||||||||
144A 2.711% 12/5/19 # | CAD | 790,000 | 675,003 | |||||||
144A 3.00% 5/22/18 # | NOK | 1,400,000 | 191,365 | |||||||
Goldman Sachs Group | ||||||||||
2.60% 4/23/20 | 7,865,000 | 7,907,235 |
22
Table of Contents
Principal amount° | Value (U.S. $) | |||||||||||
| ||||||||||||
Corporate Bonds (continued) | ||||||||||||
| ||||||||||||
Banking (continued) | ||||||||||||
Goldman Sachs Group | ||||||||||||
3.55% 2/12/21 | CAD | 3,000,000 | $ | 2,627,474 | ||||||||
3.617% 8/21/19 • | AUD | 2,390,000 | 1,913,364 | |||||||||
5.20% 12/17/19 | NZD | 5,549,000 | 4,343,939 | |||||||||
5.375% 12/29/49 • | 12,325,000 | 12,328,081 | ||||||||||
HSBC Holdings 6.375% 3/29/49 • | 4,495,000 | 4,652,325 | ||||||||||
ING Groep | ||||||||||||
6.00% 12/29/49 • | 2,045,000 | 2,046,278 | ||||||||||
6.50% 12/29/49 • | 5,615,000 | 5,611,491 | ||||||||||
JPMorgan Chase | ||||||||||||
0.909% 1/28/19 • | 2,985,000 | 2,990,761 | ||||||||||
1.50% 1/27/25 | EUR | 6,198,000 | 7,059,554 | |||||||||
3.50% 12/18/26 | GBP | 986,000 | 1,603,766 | |||||||||
4.125% 12/15/26 | 11,210,000 | 11,437,159 | ||||||||||
4.25% 11/2/18 | NZD | 5,735,000 | 4,403,585 | |||||||||
5.30% 12/29/49 • | 3,525,000 | 3,529,406 | ||||||||||
6.75% 1/29/49 • | 1,455,000 | 1,596,571 | ||||||||||
KeyBank 6.95% 2/1/28 | 17,740,000 | 23,615,488 | ||||||||||
Lloyds Banking Group | ||||||||||||
4.50% 11/4/24 | 7,080,000 | 7,272,385 | ||||||||||
7.50% 4/30/49 • | 7,660,000 | 8,196,200 | ||||||||||
Morgan Stanley | ||||||||||||
1.128% 1/24/19 • | 3,119,000 | 3,131,816 | ||||||||||
3.125% 8/5/21 | CAD | 999,000 | 852,586 | |||||||||
3.95% 4/23/27 | 2,790,000 | 2,745,290 | ||||||||||
4.35% 9/8/26 | 4,770,000 | 4,870,180 | ||||||||||
5.00% 9/30/21 | AUD | 1,489,000 | 1,246,368 | |||||||||
MUFG Americas Holdings | ||||||||||||
2.25% 2/10/20 | 3,895,000 | 3,900,605 | ||||||||||
3.00% 2/10/25 | 9,295,000 | 9,066,724 | ||||||||||
Oversea-Chinese Banking 144A 4.00% 10/15/24 #• | 1,370,000 | 1,424,096 | ||||||||||
PNC Bank 3.30% 10/30/24 | 5,290,000 | 5,445,135 | ||||||||||
PNC Preferred Funding Trust II 144A 1.493% 3/29/49 #• | 13,900,000 | 12,822,750 | ||||||||||
Santander Holdings USA 3.45% 8/27/18 | 5,700,000 | 5,929,710 | ||||||||||
Santander UK 144A 5.00% 11/7/23 # | 11,115,000 | 11,790,792 | ||||||||||
Turkiye Garanti Bankasi 144A 4.75% 10/17/19 # | 6,858,000 | 6,950,994 | ||||||||||
USB Capital IX 3.50% 10/29/49 • | 27,182,000 | 22,933,453 | ||||||||||
USB Realty 144A 1.422% 12/29/49 #• | 4,485,000 | 4,103,775 | ||||||||||
Wells Fargo | ||||||||||||
3.50% 9/12/29 | GBP | 1,700,000 | 2,698,711 | |||||||||
4.75% 8/27/24 | AUD | 2,090,000 | 1,769,312 | |||||||||
5.875% 12/29/49 • | 2,380,000 | 2,531,725 |
23
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Corporate Bonds (continued) | ||||||||
| ||||||||
Banking (continued) | ||||||||
Woori Bank | ||||||||
144A 2.875% 10/2/18 # | 7,180,000 | $ | 7,403,930 | |||||
144A 4.75% 4/30/24 # | 6,370,000 | 6,780,190 | ||||||
Zions Bancorp 4.50% 6/13/23 | 5,380,000 | 5,600,015 | ||||||
|
| |||||||
325,272,696 | ||||||||
|
| |||||||
Basic Industry – 4.25% | ||||||||
AK Steel 7.625% 5/15/20 | 2,739,000 | 2,389,777 | ||||||
ArcelorMittal | ||||||||
6.125% 6/1/18 | 1,862,000 | 1,992,340 | ||||||
10.60% 6/1/19 | 12,195,000 | 14,725,463 | ||||||
Axalta Coating Systems U.S. Holdings 144A | ||||||||
7.375% 5/1/21 # | 4,885,000 | 5,324,650 | ||||||
Builders FirstSource 144A 7.625% 6/1/21 # | 1,005,000 | 1,052,737 | ||||||
CF Industries | ||||||||
6.875% 5/1/18 | 18,389,000 | 20,955,038 | ||||||
7.125% 5/1/20 | 2,841,000 | 3,419,280 | ||||||
Consolidated Energy Finance 144A 6.75% 10/15/19 # | 5,484,000 | 5,621,100 | ||||||
Dow Chemical 8.55% 5/15/19 | 33,171,000 | 41,221,502 | ||||||
Evolution Escrow Issuer 144A 7.50% 3/15/22 # | 2,240,000 | 2,273,600 | ||||||
Fibria Overseas Finance 5.25% 5/12/24 | 3,265,000 | 3,379,275 | ||||||
First Quantum Minerals 144A 7.00% 2/15/21 # | 47,000 | 44,063 | ||||||
Georgia-Pacific 8.00% 1/15/24 | 16,386,000 | 21,753,808 | ||||||
Gerdau Holdings 144A 7.00% 1/20/20 # | 2,400,000 | 2,653,440 | ||||||
Gerdau Trade 144A 5.75% 1/30/21 # | 2,830,000 | 2,964,425 | ||||||
Glencore Funding | ||||||||
144A 2.875% 4/16/20 # | 4,250,000 | 4,251,385 | ||||||
144A 4.00% 4/16/25 # | 3,210,000 | 3,155,395 | ||||||
Grace (W.R.) 144A 5.125% 10/1/21 # | 4,050,000 | 4,232,250 | ||||||
GTL Trade Finance 144A 5.893% 4/29/24 # | 1,850,000 | 1,877,750 | ||||||
HD Supply | ||||||||
7.50% 7/15/20 | 2,684,000 | 2,892,010 | ||||||
11.50% 7/15/20 | 1,765,000 | 2,073,875 | ||||||
LSB Industries 7.75% 8/1/19 | 725,000 | 775,750 | ||||||
Lundin Mining 144A 7.50% 11/1/20 # | 2,945,000 | 3,099,907 | ||||||
LyondellBasell Industries 4.625% 2/26/55 | 10,280,000 | 9,951,338 | ||||||
Methanex 4.25% 12/1/24 | 7,185,000 | 7,340,045 | ||||||
Mexichem 144A 5.875% 9/17/44 # | 1,700,000 | 1,691,500 | ||||||
MMC Norilsk Nickel 144A 5.55% 10/28/20 # | 2,706,000 | 2,672,337 | ||||||
New Gold 144A 6.25% 11/15/22 # | 232,000 | 230,840 | ||||||
NOVA Chemicals 144A 5.00% 5/1/25 # | 11,492,000 | 12,138,425 | ||||||
Novelis 8.75% 12/15/20 | 5,145,000 | 5,518,013 |
24
Table of Contents
Principal amount° | Value (U.S. $) | |||||||||||
| ||||||||||||
Corporate Bonds (continued) | ||||||||||||
| ||||||||||||
Basic Industry (continued) | ||||||||||||
OCP | ||||||||||||
144A 4.50% 10/22/25 # | 6,690,000 | $ | 6,497,663 | |||||||||
144A 6.875% 4/25/44 # | 3,925,000 | 4,338,106 | ||||||||||
Phosagro 144A 4.204% 2/13/18 # | 6,387,000 | 6,131,520 | ||||||||||
PolyOne 5.25% 3/15/23 | 3,470,000 | 3,634,825 | ||||||||||
Potash of Saskatchewan 3.00% 4/1/25 | 6,690,000 | 6,621,414 | ||||||||||
PPG Industries 2.30% 11/15/19 | 4,430,000 | 4,490,487 | ||||||||||
Rockwood Specialties Group 4.625% 10/15/20 | 3,975,000 | 4,153,875 | ||||||||||
Ryerson | ||||||||||||
9.00% 10/15/17 | 3,784,000 | 3,857,599 | ||||||||||
11.25% 10/15/18 | 1,060,000 | 1,081,200 | ||||||||||
TPC Group 144A 8.75% 12/15/20 # | 2,852,000 | 2,737,920 | ||||||||||
Tronox Finance 6.375% 8/15/20 | 1,686,000 | 1,660,710 | ||||||||||
Weyerhaeuser 4.625% 9/15/23 | 6,595,000 | 7,233,337 | ||||||||||
|
| |||||||||||
244,109,974 | ||||||||||||
|
| |||||||||||
Brokerage – 0.56% | ||||||||||||
E*TRADE Financial 4.625% 9/15/23 | 3,825,000 | 3,915,844 | ||||||||||
Jefferies Group | ||||||||||||
5.125% 1/20/23 | 6,500,000 | 6,750,607 | ||||||||||
6.45% 6/8/27 | 3,815,000 | 4,092,347 | ||||||||||
6.50% 1/20/43 | 2,455,000 | 2,449,776 | ||||||||||
Lazard Group 3.75% 2/13/25 | 15,330,000 | 14,959,995 | ||||||||||
|
| |||||||||||
32,168,569 | ||||||||||||
|
| |||||||||||
Capital Goods – 1.05% | ||||||||||||
BWAY Holding 144A 9.125% 8/15/21 # | 5,635,000 | 5,832,225 | ||||||||||
Cemex | ||||||||||||
144A 4.375% 3/5/23 # | EUR | 4,150,000 | 4,660,238 | |||||||||
144A 7.25% 1/15/21 # | 2,175,000 | 2,359,875 | ||||||||||
Cemex Finance 144A 9.375% 10/12/22 # | 4,635,000 | 5,300,123 | ||||||||||
Consolidated Container 144A 10.125% 7/15/20 # | 1,251,000 | 1,094,625 | ||||||||||
Crane | ||||||||||||
2.75% 12/15/18 | 1,660,000 | 1,704,681 | ||||||||||
4.45% 12/15/23 | 6,885,000 | 7,438,100 | ||||||||||
Ingersoll-Rand Global Holding 4.25% 6/15/23 | 7,755,000 | 8,263,449 | ||||||||||
Lockheed Martin 3.80% 3/1/45 | 3,015,000 | 2,912,541 | ||||||||||
Masco 4.45% 4/1/25 | 3,460,000 | 3,581,100 | ||||||||||
Milacron 144A 7.75% 2/15/21 # | 1,635,000 | 1,708,575 | ||||||||||
Plastipak Holdings 144A 6.50% 10/1/21 # | 3,655,000 | 3,764,650 | ||||||||||
TransDigm 7.50% 7/15/21 | 3,825,000 | 4,131,000 | ||||||||||
United Technologies 4.15% 5/15/45 | 4,290,000 | 4,329,983 | ||||||||||
Votorantim Cimentos 144A 7.25% 4/5/41 # | 3,055,000 | 3,161,925 | ||||||||||
|
| |||||||||||
60,243,090 | ||||||||||||
|
|
25
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||||||
| ||||||||||||
Corporate Bonds (continued) | ||||||||||||
| ||||||||||||
Communications – 8.27% | ||||||||||||
Altice | ||||||||||||
144A 7.625% 2/15/25 # | 900,000 | $ | 912,420 | |||||||||
144A 7.75% 5/15/22 # | 2,770,000 | 2,804,653 | ||||||||||
Altice Financing 144A 6.625% 2/15/23 # | 10,145,000 | 10,500,075 | ||||||||||
America Movil 5.00% 3/30/20 | 10,870,000 | 12,293,970 | ||||||||||
American Tower Trust I 144A 3.07% 3/15/23 # | 10,235,000 | 10,263,771 | ||||||||||
AT&T | ||||||||||||
2.45% 6/30/20 | 3,910,000 | 3,910,321 | ||||||||||
3.40% 5/15/25 | 9,725,000 | 9,642,561 | ||||||||||
4.35% 6/15/45 | 8,785,000 | 8,150,943 | ||||||||||
4.50% 5/15/35 | 5,145,000 | 5,054,453 | ||||||||||
Bell Canada 3.35% 3/22/23 | CAD | 2,132,000 | 1,824,869 | |||||||||
Bharti Airtel International Netherlands 144A | ||||||||||||
5.35% 5/20/24 # | 8,185,000 | 9,073,645 | ||||||||||
CC Holdings GS V 3.849% 4/15/23 | 4,980,000 | 5,023,460 | ||||||||||
CCO Holdings | ||||||||||||
144A 5.125% 5/1/23 # | 2,785,000 | 2,764,113 | ||||||||||
5.25% 9/30/22 | 4,068,000 | 4,080,204 | ||||||||||
CenturyLink | ||||||||||||
5.80% 3/15/22 | 12,775,000 | 13,317,937 | ||||||||||
6.75% 12/1/23 | 3,120,000 | 3,386,791 | ||||||||||
Cequel Communications Holdings I 144A | ||||||||||||
6.375% 9/15/20 # | 3,245,000 | 3,435,644 | ||||||||||
Columbus International 144A 7.375% 3/30/21 # | 8,505,000 | 9,291,713 | ||||||||||
Cox Communications 144A 3.85% 2/1/25 # | 1,990,000 | 2,019,822 | ||||||||||
Crown Castle Towers 144A 4.883% 8/15/20 # | 25,785,000 | 28,305,613 | ||||||||||
CSC Holdings 144A 5.25% 6/1/24 # | 12,310,000 | 12,848,563 | ||||||||||
Deutsche Telekom International Finance 6.50% 4/8/22 | GBP | 1,270,000 | 2,433,539 | |||||||||
Digicel Group 144A 8.25% 9/30/20 # | 10,574,000 | 10,958,894 | ||||||||||
DISH DBS 5.00% 3/15/23 | 4,995,000 | 4,745,250 | ||||||||||
Equinix | ||||||||||||
4.875% 4/1/20 | 2,245,000 | 2,329,187 | ||||||||||
5.375% 4/1/23 | 12,050,000 | 12,501,875 | ||||||||||
Gray Television 7.50% 10/1/20 | 4,780,000 | 5,102,650 | ||||||||||
Grupo Televisa 5.00% 5/13/45 | 4,145,000 | 4,243,622 | ||||||||||
Hughes Satellite Systems 7.625% 6/15/21 | 2,255,000 | 2,522,781 | ||||||||||
Intelsat Luxembourg | ||||||||||||
7.75% 6/1/21 | 2,665,000 | 2,458,463 | ||||||||||
8.125% 6/1/23 | 13,805,000 | 12,704,880 | ||||||||||
Lamar Media 5.00% 5/1/23 | 4,740,000 | 4,858,500 | ||||||||||
Level 3 Financing | ||||||||||||
5.375% 8/15/22 | 3,690,000 | 3,782,250 |
26
Table of Contents
Principal amount° | Value (U.S. $) | |||||||||||
| ||||||||||||
Corporate Bonds (continued) |
| |||||||||||
| ||||||||||||
Communications (continued) | ||||||||||||
Level 3 Financing | ||||||||||||
144A 5.375% 5/1/25 # | 2,040,000 | $ | 2,040,000 | |||||||||
MDC Partners 144A 6.75% 4/1/20 # | 1,300,000 | 1,324,375 | ||||||||||
Millicom International Cellular | ||||||||||||
144A 4.75% 5/22/20 # | 3,745,000 | 3,707,550 | ||||||||||
144A 6.00% 3/15/25 # | 2,540,000 | 2,584,450 | ||||||||||
144A 6.625% 10/15/21 # | 900,000 | 961,875 | ||||||||||
MTN Mauritius Investments 144A 4.755% 11/11/24 # | 5,150,000 | 5,318,199 | ||||||||||
MTS International Funding | ||||||||||||
144A 5.00% 5/30/23 # | 1,175,000 | 1,058,087 | ||||||||||
144A 8.625% 6/22/20 # | 4,300,000 | 4,692,332 | ||||||||||
Nielsen Finance 144A 5.00% 4/15/22 # | 6,330,000 | 6,388,553 | ||||||||||
Numericable-SFR 144A 6.00% 5/15/22 # | 5,725,000 | 5,871,703 | ||||||||||
Oi 144A 5.75% 2/10/22 # | 4,818,000 | 4,083,255 | ||||||||||
Orange 5.50% 2/6/44 | 5,530,000 | 6,383,871 | ||||||||||
SBA Tower Trust | ||||||||||||
144A 2.24% 4/16/18 # | 7,270,000 | 7,267,012 | ||||||||||
144A 2.898% 10/15/19 # | 405,000 | 408,758 | ||||||||||
SES 144A 3.60% 4/4/23 # | 9,881,000 | 10,170,869 | ||||||||||
SES GLOBAL Americas Holdings 144A 5.30% 3/25/44 # | 12,445,000 | 13,522,961 | ||||||||||
Sinclair Television Group 5.375% 4/1/21 | 5,120,000 | 5,204,480 | ||||||||||
Sirius XM Radio | ||||||||||||
144A 5.375% 4/15/25 # | 11,125,000 | 11,208,437 | ||||||||||
144A 6.00% 7/15/24 # | 7,325,000 | 7,618,000 | ||||||||||
Sky 144A 3.75% 9/16/24 # | 6,695,000 | 6,837,731 | ||||||||||
Sprint | ||||||||||||
7.125% 6/15/24 | 14,040,000 | 13,531,050 | ||||||||||
7.25% 9/15/21 | 2,870,000 | 2,887,937 | ||||||||||
7.625% 2/15/25 | 3,975,000 | 3,918,953 | ||||||||||
7.875% 9/15/23 | 4,150,000 | 4,175,937 | ||||||||||
Telemar Norte Leste 144A 5.50% 10/23/20 # | 4,160,000 | 3,733,600 | ||||||||||
T-Mobile USA | ||||||||||||
6.125% 1/15/22 | 3,765,000 | 3,896,775 | ||||||||||
6.836% 4/28/23 | 7,245,000 | 7,688,756 | ||||||||||
Univision Communications 144A 5.125% 5/15/23 # | 1,225,000 | 1,244,906 | ||||||||||
UPCB Finance IV 144A 5.375% 1/15/25 # | 13,084,000 | 13,362,035 | ||||||||||
Verizon Communications | ||||||||||||
3.25% 2/17/26 | EUR | 2,606,000 | 3,450,613 | |||||||||
4.40% 11/1/34 | 4,370,000 | 4,304,909 | ||||||||||
4.862% 8/21/46 | 18,075,000 | 18,296,328 | ||||||||||
5.15% 9/15/23 | 2,925,000 | 3,306,996 | ||||||||||
Viacom 4.85% 12/15/34 | 14,550,000 | 14,429,773 |
27
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||||||
| ||||||||||||
Corporate Bonds (continued) |
| |||||||||||
| ||||||||||||
Communications (continued) | ||||||||||||
Vimpel Communications 144A 7.748% 2/2/21 # | 9,019,000 | $ | 9,167,633 | |||||||||
Virgin Media Finance 144A 6.375% 4/15/23 # | 2,755,000 | 2,913,413 | ||||||||||
Virgin Media Secured Finance 144A 5.25% 1/15/26 # | 7,810,000 | 7,790,475 | ||||||||||
VTR Finance 144A 6.875% 1/15/24 # | 8,695,000 | 9,018,454 | ||||||||||
Wind Acquisition Finance 144A 7.375% 4/23/21 # | 3,155,000 | 3,237,819 | ||||||||||
Windstream | ||||||||||||
7.50% 4/1/23 | 895,000 | 852,488 | ||||||||||
7.75% 10/1/21 | 1,260,000 | 1,244,250 | ||||||||||
WPP Finance 2010 5.625% 11/15/43 | 6,865,000 | 7,957,661 | ||||||||||
|
| |||||||||||
474,610,691 | ||||||||||||
|
| |||||||||||
Consumer Cyclical – 3.90% | ||||||||||||
Bed Bath & Beyond 4.915% 8/1/34 | 6,305,000 | 6,596,165 | ||||||||||
CDK Global 144A 4.50% 10/15/24 # | 5,955,000 | 6,149,478 | ||||||||||
Cencosud 144A 5.15% 2/12/25 # | 7,800,000 | 7,961,093 | ||||||||||
Daimler 2.75% 12/10/18 | NOK | 14,510,000 | 2,008,412 | |||||||||
Delphi 4.15% 3/15/24 | 5,130,000 | 5,442,340 | ||||||||||
Family Tree Escrow 144A 5.75% 3/1/23 # | 1,755,000 | 1,851,525 | ||||||||||
Ford Motor Credit | ||||||||||||
3.664% 9/8/24 | 3,700,000 | 3,786,184 | ||||||||||
5.875% 8/2/21 | 205,000 | 239,866 | ||||||||||
General Motors Financial | ||||||||||||
3.15% 1/15/20 | 1,470,000 | 1,482,714 | ||||||||||
3.45% 4/10/22 | 6,905,000 | 6,867,243 | ||||||||||
4.00% 1/15/25 | 6,570,000 | 6,623,539 | ||||||||||
4.375% 9/25/21 | 4,515,000 | 4,802,289 | ||||||||||
Host Hotels & Resorts | ||||||||||||
3.75% 10/15/23 | 8,375,000 | 8,421,674 | ||||||||||
4.75% 3/1/23 | 9,740,000 | 10,429,310 | ||||||||||
5.875% 6/15/19 | 3,020,000 | 3,122,910 | ||||||||||
Hyundai Capital America | ||||||||||||
144A 2.125% 10/2/17 # | 6,005,000 | 6,058,829 | ||||||||||
144A 2.55% 2/6/19 # | 275,000 | 279,263 | ||||||||||
International Game Technology 5.35% 10/15/23 | 8,654,000 | 8,688,201 | ||||||||||
INVISTA Finance 144A 4.25% 10/15/19 # | 6,085,000 | 6,036,356 | ||||||||||
Landry’s 144A 9.375% 5/1/20 # | 1,579,000 | 1,697,425 | ||||||||||
Levi Strauss 144A 5.00% 5/1/25 # | 5,460,000 | 5,483,887 | ||||||||||
Magna International 3.625% 6/15/24 | 8,455,000 | 8,573,066 | ||||||||||
Netflix 144A 5.875% 2/15/25 # | 14,025,000 | 15,006,750 | ||||||||||
Party City Holdings 8.875% 8/1/20 | 69,000 | 74,951 | ||||||||||
Priceline Group 3.65% 3/15/25 | 10,475,000 | 10,696,012 | ||||||||||
QVC | ||||||||||||
4.375% 3/15/23 | 11,305,000 | 11,450,258 |
28
Table of Contents
Principal amount° | Value (U.S. $) | |||||||||||
| ||||||||||||
Corporate Bonds (continued) | ||||||||||||
| ||||||||||||
Consumer Cyclical (continued) | ||||||||||||
QVC | ||||||||||||
5.45% 8/15/34 | 7,710,000 | $ | 7,463,056 | |||||||||
Sally Holdings 5.75% 6/1/22 | 4,201,000 | 4,484,567 | ||||||||||
Signet UK Finance 4.70% 6/15/24 | 8,010,000 | 8,339,395 | ||||||||||
Starwood Hotels & Resorts Worldwide | ||||||||||||
3.75% 3/15/25 | 4,250,000 | 4,246,081 | ||||||||||
4.50% 10/1/34 | 1,460,000 | 1,449,541 | ||||||||||
Tenedora Nemak 144A 5.50% 2/28/23 # | 7,940,000 | 8,377,494 | ||||||||||
Toyota Finance Australia | ||||||||||||
2.25% 8/31/16 | NOK | 1,710,000 | 229,020 | |||||||||
3.04% 12/20/16 | NZD | 2,810,000 | 2,117,174 | |||||||||
TRW Automotive 144A 4.45% 12/1/23 # | 9,100,000 | 9,247,875 | ||||||||||
Tupy Overseas 144A 6.625% 7/17/24 # | 5,455,000 | 5,516,369 | ||||||||||
Volvo Treasury 1.227% 3/1/17 • | SEK | 10,400,000 | 1,265,757 | |||||||||
Walgreens Boots Alliance 3.80% 11/18/24 | 6,550,000 | 6,727,885 | ||||||||||
Wynn Las Vegas 144A 5.50% 3/1/25 # | 14,425,000 | 14,551,219 | ||||||||||
|
| |||||||||||
223,845,173 | ||||||||||||
|
| |||||||||||
Consumer Non-Cyclical – 4.07% | ||||||||||||
Actavis Funding SCS | ||||||||||||
3.45% 3/15/22 | 4,350,000 | 4,426,490 | ||||||||||
3.80% 3/15/25 | 8,130,000 | 8,234,072 | ||||||||||
AmerisourceBergen 3.25% 3/1/25 | 3,820,000 | 3,851,030 | ||||||||||
Amgen | ||||||||||||
2.70% 5/1/22 | 3,365,000 | 3,341,475 | ||||||||||
3.125% 5/1/25 | 5,435,000 | 5,381,623 | ||||||||||
4.00% 9/13/29 | GBP | 1,271,000 | 2,074,145 | |||||||||
Becton Dickinson | ||||||||||||
3.734% 12/15/24 | 2,790,000 | 2,886,646 | ||||||||||
6.375% 8/1/19 | 18,375,000 | 21,391,881 | ||||||||||
Boston Scientific 6.00% 1/15/20 | 12,055,000 | 13,861,888 | ||||||||||
BRF 144A 3.95% 5/22/23 # | 5,495,000 | 5,320,259 | ||||||||||
Campbell Soup 3.30% 3/19/25 | 7,215,000 | 7,279,805 | ||||||||||
Celgene | ||||||||||||
3.95% 10/15/20 | 10,905,000 | 11,743,867 | ||||||||||
4.625% 5/15/44 | 3,360,000 | 3,454,060 | ||||||||||
Darling Ingredients 5.375% 1/15/22 | 1,370,000 | 1,399,113 | ||||||||||
EMD Finance | ||||||||||||
144A 2.95% 3/19/22 # | 4,135,000 | 4,201,681 | ||||||||||
144A 3.25% 3/19/25 # | 6,510,000 | 6,557,822 | ||||||||||
ENA Norte Trust 144A 4.95% 4/25/23 # | 4,173,105 | 4,350,462 | ||||||||||
Gilead Sciences 3.50% 2/1/25 | 3,270,000 | 3,395,493 | ||||||||||
HCA 5.375% 2/1/25 | 8,420,000 | 8,883,100 |
29
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Corporate Bonds (continued) | ||||||||
| ||||||||
Consumer Non-Cyclical (continued) | ||||||||
JBS Investments 144A 7.75% 10/28/20 # | 11,065,000 | $ | 12,049,785 | |||||
JBS USA 144A 5.875% 7/15/24 # | 1,080,000 | 1,104,300 | ||||||
Mallinckrodt International Finance | ||||||||
144A 4.875% 4/15/20 # | 2,630,000 | 2,685,887 | ||||||
144A 5.50% 4/15/25 # | 8,740,000 | 8,958,500 | ||||||
Medtronic | ||||||||
144A 3.15% 3/15/22 # | 8,405,000 | 8,690,005 | ||||||
144A 3.50% 3/15/25 # | 8,275,000 | 8,567,811 | ||||||
Merck 2.35% 2/10/22 | 4,770,000 | 4,749,465 | ||||||
Omnicare 5.00% 12/1/24 | 1,355,000 | 1,483,725 | ||||||
Perrigo | ||||||||
4.00% 11/15/23 | 7,125,000 | 7,368,468 | ||||||
5.30% 11/15/43 | 2,095,000 | 2,274,734 | ||||||
Perrigo Finance 3.50% 12/15/21 | 2,085,000 | 2,135,482 | ||||||
Prestige Brands 144A 5.375% 12/15/21 # | 4,170,000 | 4,242,975 | ||||||
Smithfield Foods 6.625% 8/15/22 | 1,730,000 | 1,870,563 | ||||||
Smucker (J.M.) | ||||||||
144A 3.00% 3/15/22 # | 1,835,000 | 1,844,537 | ||||||
144A 3.50% 3/15/25 # | 8,430,000 | 8,506,376 | ||||||
144A 4.25% 3/15/35 # | 2,895,000 | 2,885,006 | ||||||
Spectrum Brands | ||||||||
6.375% 11/15/20 | 4,575,000 | 4,872,375 | ||||||
6.625% 11/15/22 | 68,000 | 73,100 | ||||||
Zimmer Holdings | ||||||||
3.15% 4/1/22 | 2,340,000 | 2,358,069 | ||||||
3.55% 4/1/25 | 7,420,000 | 7,443,521 | ||||||
4.625% 11/30/19 | 15,621,000 | 17,167,854 | ||||||
|
| |||||||
233,367,450 | ||||||||
|
| |||||||
Electric – 4.18% | ||||||||
AES Gener | ||||||||
144A 5.25% 8/15/21 # | 3,880,000 | 4,206,549 | ||||||
144A 8.375% 12/18/73 #• | 4,207,000 | 4,648,735 | ||||||
Ameren Illinois 9.75% 11/15/18 | 16,210,000 | 20,485,469 | ||||||
American Transmission Systems 144A 5.25% 1/15/22 # | 20,040,000 | 22,730,530 | ||||||
CMS Energy 6.25% 2/1/20 | 7,715,000 | 9,042,304 | ||||||
ComEd Financing III 6.35% 3/15/33 | 8,849,000 | 9,139,752 | ||||||
Comision Federal de Electricidad 144A 4.875% 1/15/24 # | 4,575,000 | 4,938,713 | ||||||
Duquesne Light Holdings 5.50% 8/15/15 | 3,168,000 | 3,208,829 | ||||||
E.CL 144A 5.625% 1/15/21 # | 3,808,000 | 4,247,169 | ||||||
Electricite de France | ||||||||
144A 4.60% 1/27/20 # | 2,485,000 | 2,759,868 | ||||||
144A 5.25% 1/29/49 #• | 8,600,000 | 9,030,000 |
30
Table of Contents
Principal amount° | Value (U.S. $) | |||||||||||
| ||||||||||||
Corporate Bonds (continued) | ||||||||||||
| ||||||||||||
Electric (continued) | ||||||||||||
Enel 144A 8.75% 9/24/73 #• | 8,765,000 | $ | 10,592,503 | |||||||||
Entergy Arkansas 3.70% 6/1/24 | 1,420,000 | 1,511,704 | ||||||||||
Entergy Louisiana 4.05% 9/1/23 | 14,030,000 | 15,256,559 | ||||||||||
Great Plains Energy 4.85% 6/1/21 | 4,635,000 | 5,144,628 | ||||||||||
Integrys Energy Group 6.11% 12/1/66 • | 10,010,000 | 9,825,916 | ||||||||||
IPALCO Enterprises 5.00% 5/1/18 | 5,770,000 | 6,173,900 | ||||||||||
ITC Holdings 3.65% 6/15/24 | 7,485,000 | 7,719,266 | ||||||||||
LG&E & KU Energy 4.375% 10/1/21 | 15,345,000 | 16,850,743 | ||||||||||
National Rural Utilities Cooperative Finance | ||||||||||||
2.85% 1/27/25 | 2,580,000 | 2,577,572 | ||||||||||
4.75% 4/30/43 • | 9,740,000 | 9,793,570 | ||||||||||
NV Energy 6.25% 11/15/20 | 10,391,000 | 12,245,503 | ||||||||||
Pennsylvania Electric 5.20% 4/1/20 | 9,338,000 | 10,370,689 | ||||||||||
Public Service of Oklahoma 5.15% 12/1/19 | 13,585,000 | 15,280,897 | ||||||||||
Puget Energy 6.00% 9/1/21 | 4,685,000 | 5,539,563 | ||||||||||
SCANA 4.125% 2/1/22 | 7,385,000 | 7,680,548 | ||||||||||
Trans-Allegheny Interstate Line 144A 3.85% 6/1/25 # | 2,905,000 | 3,008,296 | ||||||||||
Wisconsin Energy 6.25% 5/15/67 • | 5,992,000 | 5,977,020 | ||||||||||
|
| |||||||||||
239,986,795 | ||||||||||||
|
| |||||||||||
Energy – 6.65% | ||||||||||||
AmeriGas Finance 7.00% 5/20/22 | 2,724,000 | 2,931,024 | ||||||||||
Anadarko Petroleum 4.50% 7/15/44 | 2,380,000 | 2,398,769 | ||||||||||
BHP Billiton Finance 3.25% 9/25/24 | GBP | 812,000 | 1,286,702 | |||||||||
Bristow Group 6.25% 10/15/22 | 3,735,000 | 3,678,975 | ||||||||||
California Resources | ||||||||||||
144A 5.00% 1/15/20 # | 3,765,000 | 3,576,750 | ||||||||||
144A 5.50% 9/15/21 # | 1,330,000 | 1,266,825 | ||||||||||
144A 6.00% 11/15/24 # | 2,590,000 | 2,447,550 | ||||||||||
Chaparral Energy 7.625% 11/15/22 | 769,000 | 620,967 | ||||||||||
Chesapeake Energy | ||||||||||||
4.875% 4/15/22 | 2,205,000 | 2,045,137 | ||||||||||
5.75% 3/15/23 | 10,670,000 | 10,483,275 | ||||||||||
Chevron | ||||||||||||
1.961% 3/3/20 | 5,720,000 | 5,749,292 | ||||||||||
2.411% 3/3/22 | 3,270,000 | 3,281,605 | ||||||||||
Cimarex Energy 4.375% 6/1/24 | 3,180,000 | 3,235,650 | ||||||||||
CNOOC Finance 2012 144A 3.875% 5/2/22 # | 4,955,000 | 5,162,530 | ||||||||||
CNOOC Finance 2015 Australia 2.625% 5/5/20 | 2,800,000 | 2,793,143 | ||||||||||
CNOOC Finance 2015 USA 3.50% 5/5/25 | 3,380,000 | 3,345,984 | ||||||||||
Continental Resources 4.50% 4/15/23 | 10,990,000 | 11,082,118 | ||||||||||
Dominion Gas Holdings 3.60% 12/15/24 | 7,780,000 | 8,125,627 | ||||||||||
Enbridge Energy Partners 8.05% 10/1/37 • | 16,755,000 | 17,467,087 |
31
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Corporate Bonds (continued) |
| |||||||
| ||||||||
Energy (continued) | ||||||||
Energy Transfer Partners | ||||||||
4.05% 3/15/25 | 7,410,000 | $ | 7,427,110 | |||||
4.90% 3/15/35 | 3,155,000 | 3,089,796 | ||||||
9.70% 3/15/19 | 8,043,000 | 10,079,383 | ||||||
EnLink Midstream Partners 5.05% 4/1/45 | 6,060,000 | 6,082,374 | ||||||
Ensco 4.70% 3/15/21 | 6,750,000 | 6,941,903 | ||||||
Enterprise Products Operating | ||||||||
7.034% 1/15/68 • | 20,274,000 | 22,022,633 | ||||||
8.375% 8/1/66 • | 1,492,000 | 1,589,278 | ||||||
Exterran Partners 6.00% 4/1/21 | 1,155,000 | 1,137,675 | ||||||
Exxon Mobil | ||||||||
2.397% 3/6/22 | 3,440,000 | 3,468,793 | ||||||
2.709% 3/6/25 | 11,195,000 | 11,268,674 | ||||||
KazMunayGas National 144A 6.375% 4/9/21 # | 2,245,000 | 2,386,996 | ||||||
Kinder Morgan 144A 5.00% 2/15/21 # | 3,505,000 | 3,785,926 | ||||||
Kinder Morgan Energy Partners 9.00% 2/1/19 | 15,407,000 | 18,720,753 | ||||||
Laredo Petroleum 7.375% 5/1/22 | 3,602,000 | 3,872,150 | ||||||
Lukoil International Finance 144A 3.416% 4/24/18 # | 3,560,000 | 3,360,640 | ||||||
MarkWest Energy Partners 4.875% 12/1/24 | 8,735,000 | 9,079,159 | ||||||
Murphy Oil USA 6.00% 8/15/23 | 4,130,000 | 4,443,880 | ||||||
Newfield Exploration | ||||||||
5.375% 1/1/26 | 4,215,000 | 4,404,675 | ||||||
5.625% 7/1/24 | 8,205,000 | 8,738,325 | ||||||
Noble Energy | ||||||||
3.90% 11/15/24 | 2,310,000 | 2,369,649 | ||||||
5.05% 11/15/44 | 4,480,000 | 4,673,379 | ||||||
Noble Holding International 4.00% 3/16/18 | 1,615,000 | 1,650,540 | ||||||
Oasis Petroleum 6.875% 3/15/22 | 3,120,000 | 3,190,200 | ||||||
ONEOK Partners 3.80% 3/15/20 | 2,935,000 | 3,028,512 | ||||||
ONGC Videsh 3.25% 7/15/19 | 4,900,000 | 4,972,628 | ||||||
PDC Energy 7.75% 10/15/22 | 1,273,000 | 1,362,110 | ||||||
Petrobras Global Finance | ||||||||
3.00% 1/15/19 | 6,456,000 | 6,046,044 | ||||||
4.875% 3/17/20 | 6,995,000 | 6,757,030 | ||||||
6.25% 3/17/24 | 2,350,000 | 2,340,835 | ||||||
Petroleos Mexicanos 144A 4.25% 1/15/25 # | 2,030,000 | 2,047,255 | ||||||
6.50% 6/2/41 | 3,250,000 | 3,603,437 | ||||||
Petronas Global Sukuk 144A 2.707% 3/18/20 # | 6,405,000 | 6,458,680 | ||||||
Plains All American Pipeline 8.75% 5/1/19 | 13,279,000 | 16,498,215 | ||||||
Pride International 6.875% 8/15/20 | 8,995,000 | 10,320,782 | ||||||
PTT Exploration & Production 144A 4.875% 12/29/49 #• | 4,945,000 | 5,006,813 |
32
Table of Contents
Principal amount° | Value (U.S. $) | |||||||||
| ||||||||||
Corporate Bonds (continued) |
| |||||||||
| ||||||||||
Energy (continued) | ||||||||||
Regency Energy Partners 5.875% 3/1/22 | 1,970,000 | $ | 2,211,325 | |||||||
Sabine Pass Liquefaction 144A 5.625% 3/1/25 # | 3,855,000 | 3,890,851 | ||||||||
Suburban Propane Partners 7.375% 8/1/21 | 1,449,000 | 1,564,920 | ||||||||
Talisman Energy | ||||||||||
3.75% 2/1/21 | 2,000,000 | 1,998,104 | ||||||||
5.50% 5/15/42 | 8,415,000 | 8,257,328 | ||||||||
TransCanada PipeLines | ||||||||||
3.75% 10/16/23 | 1,000,000 | 1,047,424 | ||||||||
6.35% 5/15/67 • | 8,390,000 | 8,117,325 | ||||||||
Valero Energy | ||||||||||
3.65% 3/15/25 | 4,995,000 | 5,060,669 | ||||||||
4.90% 3/15/45 | 3,880,000 | 3,943,648 | ||||||||
Weatherford International 4.50% 4/15/22 | 3,330,000 | 3,205,651 | ||||||||
Williams Partners | ||||||||||
4.00% 9/15/25 | 1,010,000 | 998,052 | ||||||||
7.25% 2/1/17 | 12,393,000 | 13,565,465 | ||||||||
Woodside Finance | ||||||||||
144A 3.65% 3/5/25 # | 335,000 | 332,230 | ||||||||
144A 8.75% 3/1/19 # | 10,841,000 | 13,314,483 | ||||||||
YPF | ||||||||||
7.758% 8/15/18 • | 1,235,294 | 1,272,353 | ||||||||
144A 8.50% 7/28/25 # | 3,950,000 | 4,014,188 | ||||||||
144A 8.75% 4/4/24 # | 2,185,000 | 2,285,729 | ||||||||
144A 8.875% 12/19/18 # | 3,235,000 | 3,433,144 | ||||||||
|
| |||||||||
381,718,131 | ||||||||||
|
| |||||||||
Finance Companies – 0.87% | ||||||||||
Affiliated Managers Group 3.50% 8/1/25 | 5,290,000 | 5,240,025 | ||||||||
Ally Financial | ||||||||||
4.125% 2/13/22 | 770,000 | 756,525 | ||||||||
4.625% 3/30/25 | 1,545,000 | 1,544,034 | ||||||||
Aviation Capital Group 144A 6.75% 4/6/21 # | 4,655,000 | 5,413,267 | ||||||||
CME Group 3.00% 3/15/25 | 4,910,000 | 4,940,280 | ||||||||
Corp Financiera de Desarrollo 144A 5.25% 7/15/29 #• | 2,200,000 | 2,310,000 | ||||||||
General Electric Capital | ||||||||||
144A 3.80% 6/18/19 # | 6,510,000 | 6,953,032 | ||||||||
4.208% 12/6/21 | SEK | 4,000,000 | 567,616 | |||||||
4.25% 1/17/18 | NZD | 1,010,000 | 777,332 | |||||||
7.125% 12/29/49 • | 9,245,000 | 10,781,981 | ||||||||
Hutchison Whampoa International 14 144A | ||||||||||
3.625% 10/31/24 # | 2,460,000 | 2,507,382 | ||||||||
SUAM Finance 144A 4.875% 4/17/24 # | 7,797,000 | 8,198,545 | ||||||||
|
| |||||||||
49,990,019 | ||||||||||
|
|
33
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Corporate Bonds (continued) |
| |||||||
| ||||||||
Healthcare – 1.03% | ||||||||
Community Health Systems 6.875% 2/1/22 | 14,255,000 | $ | 15,199,394 | |||||
DaVita HealthCare Partners | ||||||||
5.00% 5/1/25 | 9,715,000 | 9,721,072 | ||||||
5.125% 7/15/24 | 5,605,000 | 5,714,297 | ||||||
Fresenius Medical Care U.S. Finance II 144A | ||||||||
5.875% 1/31/22 # | 4,243,000 | 4,667,300 | ||||||
HealthSouth | ||||||||
5.125% 3/15/23 | 1,480,000 | 1,531,800 | ||||||
5.75% 11/1/24 | 1,035,000 | 1,097,100 | ||||||
Immucor 11.125% 8/15/19 | 3,332,000 | 3,598,560 | ||||||
Kinetic Concepts 10.50% 11/1/18 | 2,579,000 | 2,782,096 | ||||||
Par Pharmaceutical 7.375% 10/15/20 | 2,966,000 | 3,184,743 | ||||||
Tenet Healthcare 6.00% 10/1/20 | 5,524,000 | 5,910,680 | ||||||
Valeant Pharmaceuticals International 144A | ||||||||
5.875% 5/15/23 # | 5,600,000 | 5,761,000 | ||||||
|
| |||||||
59,168,042 | ||||||||
|
| |||||||
Insurance – 1.71% | ||||||||
American International Group 3.875% 1/15/35 | 10,495,000 | 10,252,912 | ||||||
Chubb 6.375% 3/29/67 • | 6,798,000 | 7,239,870 | ||||||
Five Corners Funding Trust 144A 4.419% 11/15/23 # | 2,845,000 | 3,041,535 | ||||||
Highmark | ||||||||
144A 4.75% 5/15/21 # | 5,340,000 | 5,600,047 | ||||||
144A 6.125% 5/15/41 # | 2,000,000 | 2,071,456 | ||||||
HUB International 144A 7.875% 10/1/21 # | 2,665,000 | 2,751,613 | ||||||
MetLife | ||||||||
3.60% 4/10/24 | 3,250,000 | 3,396,315 | ||||||
6.40% 12/15/36 | 40,000 | 47,300 | ||||||
MetLife Capital Trust X 144A 9.25% 4/8/38 # | 11,520,000 | 17,251,200 | ||||||
Peachtree Corners Funding Trust 144A 3.976% 2/15/25 # | 4,575,000 | 4,641,758 | ||||||
Prudential Financial | ||||||||
4.50% 11/15/20 | 3,385,000 | 3,750,428 | ||||||
5.625% 6/15/43 • | 4,620,000 | 4,954,950 | ||||||
5.875% 9/15/42 • | 4,100,000 | 4,469,000 | ||||||
TIAA Asset Management Finance | ||||||||
144A 2.95% 11/1/19 # | 4,670,000 | 4,775,140 | ||||||
144A 4.125% 11/1/24 # | 9,485,000 | 9,959,440 | ||||||
USI 144A 7.75% 1/15/21 # | 709,000 | 730,270 | ||||||
Voya Financial 5.65% 5/15/53 • | 5,340,000 | 5,620,350 | ||||||
XLIT | ||||||||
4.45% 3/31/25 | 5,150,000 | 5,194,666 | ||||||
6.50% 10/29/49 • | 2,969,000 | 2,620,143 | ||||||
|
| |||||||
98,368,393 | ||||||||
|
|
34
Table of Contents
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Corporate Bonds (continued) |
| |||||||
| ||||||||
Real Estate – 1.38% | ||||||||
AvalonBay Communities 3.50% 11/15/24 | 4,030,000 | $ | 4,129,448 | |||||
Carey (W.P.) 4.60% 4/1/24 | 4,645,000 | 4,815,959 | ||||||
CBL & Associates | ||||||||
4.60% 10/15/24 | 6,270,000 | 6,321,195 | ||||||
5.25% 12/1/23 | 1,050,000 | 1,115,723 | ||||||
Corporate Office Properties | ||||||||
3.60% 5/15/23 | 6,545,000 | 6,318,281 | ||||||
5.25% 2/15/24 | 5,315,000 | 5,742,767 | ||||||
DDR | ||||||||
3.625% 2/1/25 | 7,215,000 | 7,176,075 | ||||||
7.50% 4/1/17 | 4,950,000 | 5,481,511 | ||||||
7.875% 9/1/20 | 7,224,000 | 8,960,137 | ||||||
Education Realty Operating Partnership 4.60% 12/1/24 | 5,440,000 | 5,667,936 | ||||||
Excel Trust 4.625% 5/15/24 | 3,230,000 | 3,230,937 | ||||||
Hospitality Properties Trust 4.50% 3/15/25 | 5,010,000 | 5,105,340 | ||||||
Omega Healthcare Investors 144A 4.50% 4/1/27 # | 5,405,000 | 5,320,412 | ||||||
Regency Centers 5.875% 6/15/17 | 2,032,000 | 2,214,998 | ||||||
Trust F/1401 144A 5.25% 12/15/24 # | 7,040,000 | 7,480,000 | ||||||
|
| |||||||
79,080,719 | ||||||||
|
| |||||||
Services – 1.28% | ||||||||
AECOM | ||||||||
144A 5.75% 10/15/22 # | 6,670,000 | 6,920,125 | ||||||
144A 5.875% 10/15/24 # | 10,202,000 | 10,593,655 | ||||||
Algeco Scotsman Global Finance 144A 8.50% 10/15/18 # | 4,665,000 | 4,536,713 | ||||||
Caesars Growth Properties Holdings 144A | ||||||||
9.375% 5/1/22 # | 1,725,000 | 1,380,000 | ||||||
Corrections of America 4.625% 5/1/23 | 3,851,000 | 3,899,137 | ||||||
DigitalGlobe 144A 5.25% 2/1/21 # | 6,654,000 | 6,737,175 | ||||||
GEO Group | ||||||||
5.125% 4/1/23 | 1,690,000 | 1,749,150 | ||||||
5.875% 10/15/24 | 1,645,000 | 1,756,037 | ||||||
Mattamy Group 144A 6.50% 11/15/20 # | 233,000 | 229,505 | ||||||
MGM Resorts International 6.00% 3/15/23 | 12,590,000 | 13,101,469 | ||||||
Pinnacle Entertainment 7.50% 4/15/21 | 4,395,000 | 4,669,687 | ||||||
Service International 5.375% 5/15/24 | 1,565,000 | 1,670,637 | ||||||
United Rentals North America | ||||||||
4.625% 7/15/23 | 4,485,000 | 4,563,532 | ||||||
5.50% 7/15/25 | 7,158,000 | 7,278,254 | ||||||
5.75% 11/15/24 | 4,010,000 | 4,140,325 | ||||||
|
| |||||||
73,225,401 | ||||||||
|
| |||||||
Technology – 2.12% | ||||||||
Baidu 2.75% 6/9/19 | 2,550,000 | 2,581,653 |
35
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||||||
| ||||||||||||
Corporate Bonds (continued) |
| |||||||||||
| ||||||||||||
Technology (continued) | ||||||||||||
CDW 5.00% 9/1/23 | 1,220,000 | $ | 1,259,650 | |||||||||
First Data | ||||||||||||
11.25% 1/15/21 | 4,807,000 | 5,419,893 | ||||||||||
11.75% 8/15/21 | 1,549,000 | 1,785,223 | ||||||||||
Jabil Circuit 7.75% 7/15/16 | 1,178,000 | 1,267,823 | ||||||||||
Micron Technology | ||||||||||||
144A 5.25% 8/1/23 # | 7,815,000 | 7,861,890 | ||||||||||
144A 5.50% 2/1/25 # | 6,522,000 | 6,505,695 | ||||||||||
144A 5.625% 1/15/26 # | 3,100,000 | 3,069,000 | ||||||||||
Microsoft 3.75% 2/12/45 | 6,735,000 | 6,397,428 | ||||||||||
Molex Electronic Technologies | ||||||||||||
144A 2.878% 4/15/20 # | 6,285,000 | 6,302,076 | ||||||||||
144A 3.90% 4/15/25 # | 4,805,000 | 4,812,371 | ||||||||||
Motorola Solutions 4.00% 9/1/24 | 7,565,000 | 7,599,292 | ||||||||||
NetApp 3.25% 12/15/22 | 6,455,000 | 6,390,030 | ||||||||||
NXP 144A 5.75% 3/15/23 # | 2,055,000 | 2,198,850 | ||||||||||
Oracle | ||||||||||||
2.50% 5/15/22 | 2,655,000 | 2,641,271 | ||||||||||
2.95% 5/15/25 | 8,655,000 | 8,580,022 | ||||||||||
3.25% 5/15/30 | 5,440,000 | 5,360,581 | ||||||||||
4.125% 5/15/45 | 8,100,000 | 8,002,646 | ||||||||||
4.30% 7/8/34 | 2,960,000 | 3,081,576 | ||||||||||
Samsung Electronics America 144A 1.75% 4/10/17 # | 10,895,000 | 10,973,836 | ||||||||||
Seagate HDD Cayman | ||||||||||||
144A 4.75% 1/1/25 # | 10,380,000 | 10,666,135 | ||||||||||
144A 5.75% 12/1/34 # | 1,040,000 | 1,103,989 | ||||||||||
Tencent Holdings 144A 3.375% 5/2/19 # | 7,420,000 | 7,643,038 | ||||||||||
|
| |||||||||||
121,503,968 | ||||||||||||
|
| |||||||||||
Transportation – 0.76% | ||||||||||||
Air Canada 2015-1 Class A Pass Through Trust 144A | ||||||||||||
3.60% 3/15/27 #¿ | 3,290,000 | 3,331,125 | ||||||||||
American Airlines 2014-1 Class A Pass Through Trust | ||||||||||||
3.70% 10/1/26 ¿ | 2,659,695 | 2,752,784 | ||||||||||
American Airlines 2015-1 Class A Pass Through Trust | ||||||||||||
3.375% 5/1/27 ¿ | 2,345,000 | 2,377,244 | ||||||||||
Brambles USA 144A 5.35% 4/1/20 # | 6,810,000 | 7,627,908 | ||||||||||
Burlington Northern Santa Fe | ||||||||||||
3.40% 9/1/24 | 5,440,000 | 5,622,251 | ||||||||||
4.15% 4/1/45 | 3,635,000 | 3,680,772 | ||||||||||
HPHT Finance 15 144A 2.875% 3/17/20 # | 4,040,000 | 4,097,315 | ||||||||||
Red de Carreteras de Occidente 144A 9.00% 6/10/28 # | MXN | 60,960,000 | 3,904,258 | |||||||||
Trinity Industries 4.55% 10/1/24 | 5,800,000 | 5,733,868 |
36
Table of Contents
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Corporate Bonds (continued) | ||||||||
| ||||||||
Transportation (continued) | ||||||||
United Airlines 2014-1 Class A Pass Through Trust | ||||||||
4.00% 4/11/26 ¿ | 2,290,000 | $ | 2,427,400 | |||||
United Airlines 2014-2 Class A Pass Through Trust | ||||||||
3.75% 9/3/26 ¿ | 2,080,000 | 2,173,600 | ||||||
|
| |||||||
43,728,525 | ||||||||
|
| |||||||
Utilities – 0.95% | ||||||||
AES | ||||||||
5.50% 3/15/24 | 1,550,000 | 1,557,750 | ||||||
5.50% 4/15/25 | 10,897,000 | 10,788,030 | ||||||
Calpine | ||||||||
5.375% 1/15/23 | 5,605,000 | 5,682,069 | ||||||
5.50% 2/1/24 | 915,000 | 919,575 | ||||||
Dynegy | ||||||||
5.875% 6/1/23 | 3,005,000 | 2,982,463 | ||||||
144A 6.75% 11/1/19 # | 615,000 | 645,750 | ||||||
144A 7.375% 11/1/22 # | 950,000 | 1,016,500 | ||||||
144A 7.625% 11/1/24 # | 9,855,000 | 10,643,400 | ||||||
Eskom Holdings 144A 7.125% 2/11/25 # | 1,720,000 | 1,796,884 | ||||||
Lamar Funding 144A 3.958% 5/7/25 # | 6,100,000 | 6,100,000 | ||||||
Perusahaan Listrik Negara 144A 5.50% 11/22/21 # | 5,890,000 | 6,420,100 | ||||||
Saudi Electricity Global Sukuk 3 144A 5.50% 4/8/44 # | 2,183,000 | 2,387,765 | ||||||
State Grid Overseas Investment 2014 144A | ||||||||
2.75% 5/7/19 # | 3,430,000 | 3,512,207 | ||||||
|
| |||||||
54,452,493 | ||||||||
|
| |||||||
Total Corporate Bonds (cost $2,775,234,577) | 2,858,359,851 | |||||||
|
| |||||||
| ||||||||
Municipal Bonds – 1.12% | ||||||||
| ||||||||
Atlanta, Georgia Water & Wastewater Revenue | ||||||||
5.00% 11/1/40 | 3,240,000 | 3,664,732 | ||||||
California State Various Purpose | ||||||||
5.00% 3/1/45 | 5,630,000 | 6,392,640 | ||||||
Golden State, California Tobacco Securitization Settlement Revenue (Asset-Backed Senior Notes) Series A-1 | ||||||||
5.125% 6/1/47 | 3,170,000 | 2,531,974 | ||||||
5.75% 6/1/47 | 3,500,000 | 3,042,865 | ||||||
Golden State, California Tobacco Securitization Settlement Revenue (Asset-Backed) Series A | ||||||||
5.00% 6/1/40 | 9,695,000 | 10,747,586 | ||||||
5.00% 6/1/45 | 3,060,000 | 3,389,531 | ||||||
Maryland State Local Facilities 2nd Loan | ||||||||
Series A 5.00% 8/1/21 | 3,960,000 | 4,774,374 |
37
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Municipal Bonds (continued) | ||||||||
| ||||||||
New Jersey Transportation Trust Fund | ||||||||
(Transportation Program) Series AA 5.00% 6/15/44 | 4,080,000 | $ | 4,237,039 | |||||
New York City, New York | ||||||||
Series I 5.00% 8/1/22 | 2,680,000 | 3,213,213 | ||||||
New York City, New York Water & Sewer System | ||||||||
Series EE 5.00% 6/15/45 | 4,800,000 | 5,400,000 | ||||||
New York State Thruway Authority Revenue | ||||||||
Series A 5.00% 5/1/19 | 3,145,000 | 3,579,230 | ||||||
Oregon State Taxable Pension | ||||||||
5.892% 6/1/27 | 305,000 | 375,101 | ||||||
Texas Private Activity Bond Surface Transportation Revenue Bond (Senior Lien NTE Mobility Partners Segments 3) | ||||||||
6.75% 6/30/43 (AMT) | 2,795,000 | 3,402,633 | ||||||
Texas State Transportation Commission | ||||||||
Series A 5.00% 10/1/44 | 8,175,000 | 9,399,206 | ||||||
|
| |||||||
Total Municipal Bonds (cost $63,166,374) | 64,150,124 | |||||||
|
| |||||||
| ||||||||
Non-Agency Asset-Backed Securities – 1.91% | ||||||||
| ||||||||
AEP Texas Central Transition Funding II | ||||||||
Series 2006-A A4 5.17% 1/1/18 | 145,000 | 153,626 | ||||||
Ally Master Owner Trust | ||||||||
Series 2013-2 A 0.632% 4/15/18 • | 5,280,000 | 5,283,590 | ||||||
American Express Credit Account Master Trust | ||||||||
Series 2013-2 A 0.602% 5/17/21 • | 3,480,000 | 3,491,989 | ||||||
American Tower Trust I | ||||||||
Series 13 1A 144A 1.551% 3/15/43 # | 4,240,000 | 4,236,114 | ||||||
Ameriquest Mortgage Securities Asset-Backed Pass Through Certificates | ||||||||
Series 2003-8 AF4 5.504% 10/25/33 ¿ | 62,070 | 62,606 | ||||||
Avis Budget Rental Car Funding AESOP | ||||||||
Series 2011-3A A 144A 3.41% 11/20/17 # | 4,435,000 | 4,569,318 | ||||||
Series 2013-1A A 144A 1.92% 9/20/19 # | 6,115,000 | 6,111,050 | ||||||
Series 2014-1A A 144A 2.46% 7/20/20 # | 4,587,000 | 4,636,962 | ||||||
BA Credit Card Trust | ||||||||
Series 2014-A3 A 0.472% 1/15/20 • | 4,310,000 | 4,313,112 | ||||||
California Republic Auto Receivables Trust | ||||||||
Series 2013-1 A2 144A 1.41% 9/17/18 # | 2,085,736 | 2,093,803 | ||||||
Capital One Multi-Asset Execution Trust | ||||||||
Series 2007-A1 A1 0.232% 11/15/19 • | 1,700,000 | 1,693,503 | ||||||
Chase Issuance Trust | ||||||||
Series 2014-A5 A5 0.552% 4/15/21 • | 5,000,000 | 5,001,985 | ||||||
Series 2015-A4 A 1.84% 4/15/22 | 6,240,000 | 6,240,000 |
38
Table of Contents
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Non-Agency Asset-Backed Securities (continued) | ||||||||
| ||||||||
Contimortgage Home Equity Loan Trust | ||||||||
Series 1996-4 A8 7.22% 1/15/28 | 4,466 | $ | 4,319 | |||||
DB Master Finance | ||||||||
Series 2015-1A A2I 144A 3.262% 2/20/45 # | 5,555,000 | 5,593,463 | ||||||
FirstKey Lending Trust | ||||||||
Series 2015-SFR1 A 144A 2.553% 9/9/31 # | 2,740,000 | 2,749,689 | ||||||
Ford Credit Auto Lease Trust | ||||||||
Series 2015-A A3 1.13% 6/15/18 | 3,995,000 | 3,994,601 | ||||||
Ford Credit Floorplan Master Owner Trust A | ||||||||
Series 2013-3 B 1.14% 6/15/17 | 2,610,000 | 2,612,174 | ||||||
GE Dealer Floorplan Master Note Trust | ||||||||
Series 2013-1 A 0.581% 4/20/18 • | 7,250,000 | 7,251,783 | ||||||
Golden Credit Card Trust | ||||||||
Series 2012-5A A 144A 0.79% 9/15/17 # | 4,440,000 | 4,443,579 | ||||||
Series 2014-2A A 144A 0.632% 3/15/21 #• | 2,815,000 | 2,807,343 | ||||||
Series 2015-2A A 144A 2.02% 4/15/22 # | 8,305,000 | 8,275,115 | ||||||
GreatAmerica Leasing Receivables Funding | ||||||||
Series 2013-1 B 144A 1.44% 5/15/18 # | 1,045,000 | 1,041,560 | ||||||
HOA Funding | ||||||||
Series 2014-1A A2 144A 4.846% 8/20/44 # | 7,543,800 | 7,522,745 | ||||||
MASTR Specialized Loan Trust | ||||||||
Series 2005-2 A2 144A 5.006% 7/25/35 #• | 23,905 | 23,842 | ||||||
Mid-State Trust XI | ||||||||
Series 11 A1 4.864% 7/15/38 | 358,617 | 380,720 | ||||||
MMAF Equipment Finance | ||||||||
Series 2014-AA A4 144A 1.59% 2/8/22 # | 5,755,000 | 5,730,910 | ||||||
Synchrony Credit Card Master Note Trust | ||||||||
Series 2012-6 A 1.36% 8/17/20 | 3,800,000 | 3,799,932 | ||||||
Series 2014-1 A 1.61% 11/15/20 | 5,270,000 | 5,285,072 | ||||||
|
| |||||||
Total Non-Agency Asset-Backed Securities | 109,404,505 | |||||||
|
| |||||||
| ||||||||
Non-Agency Collateralized Mortgage Obligations – 1.25% | ||||||||
| ||||||||
American Home Mortgage Investment Trust | ||||||||
Series 2005-2 5A1 5.064% 9/25/35 f | 489,905 | 500,551 | ||||||
Banc of America Alternative Loan Trust | ||||||||
Series 2005-1 2A1 5.50% 2/25/20 | 199,801 | 203,730 | ||||||
Series 2005-3 2A1 5.50% 4/25/20 | 165,609 | 170,578 | ||||||
Series 2005-6 7A1 5.50% 7/25/20 | 661,656 | 662,906 | ||||||
Banc of America Mortgage Trust | ||||||||
Series 2003-E 2A2 2.736% 6/25/33 • | 81,079 | 81,509 | ||||||
Series 2004-K 2A1 2.658% 12/25/34 • | 1,448,765 | 1,430,271 | ||||||
Chase Mortgage Finance Trust | ||||||||
Series 2005-A1 3A1 2.454% 12/25/35 • | 672,800 | 609,934 |
39
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Non-Agency Collateralized Mortgage Obligations (continued) | ||||||||
| ||||||||
ChaseFlex Trust | ||||||||
Series 2006-1 A4 4.915% 6/25/36 • | 6,119,000 | $ | 5,276,897 | |||||
CHL Mortgage Pass Through Trust | ||||||||
Series 2003-21 A1 2.60% 5/25/33 ¿ • | 30,309 | 30,462 | ||||||
Series 2004-HYB2 2A 2.616% 7/20/34 ¿ • | 115,756 | 105,872 | ||||||
Series 2004-HYB5 3A1 2.512% 4/20/35 ¿ • | 133,636 | 117,883 | ||||||
Citicorp Mortgage Securities Trust | ||||||||
Series 2006-3 1A9 5.75% 6/25/36 | 696,047 | 710,994 | ||||||
Citicorp Residential Mortgage Trust | ||||||||
Series 2006-3 A5 5.948% 11/25/36 f | 5,800,000 | 5,782,171 | ||||||
Credit Suisse First Boston Mortgage Securities | ||||||||
Series 2005-5 6A3 5.00% 7/25/35 | 3,197,974 | 3,204,296 | ||||||
First Horizon Mortgage Pass Through Trust | ||||||||
Series 2004-5 2A1 6.25% 8/25/17 ¿ | 5,580 | 5,654 | ||||||
Series 2004-7 1A3 5.50% 1/25/35 ¿ | 2,217,685 | 2,295,219 | ||||||
Series 2005-4 1A8 5.50% 8/25/35 ¿ | 958,074 | 965,835 | ||||||
Freddie Mac Structured Agency Credit Risk Debt Notes | ||||||||
Series 2014-DN4 M2 2.581% 10/25/24 • | 2,455,000 | 2,491,108 | ||||||
Series 2015-DN1 M1 1.431% 1/25/25 • | 3,141,635 | 3,147,635 | ||||||
Series 2015-DNA1 M2 2.03% 10/25/27 • | 2,220,000 | 2,220,009 | ||||||
GSMPS Mortgage Loan Trust | ||||||||
Series 1998-3 A 144A 7.75% 9/19/27 #• | 44,421 | 46,178 | ||||||
GSR Mortgage Loan Trust | ||||||||
Series 2004-9 4A1 2.636% 8/25/34 • | 629,493 | 612,459 | ||||||
Series 2006-AR1 3A1 2.79% 1/25/36 • | 655,220 | 595,155 | ||||||
JPMorgan Mortgage Trust | ||||||||
Series 2005-A8 1A1 5.019% 11/25/35 • | 414,646 | 391,183 | ||||||
Series 2006-S1 1A1 6.00% 4/25/36 | 3,705,797 | 3,798,608 | ||||||
Series 2007-A1 7A4 2.517% 7/25/35 • | 91,848 | 80,805 | ||||||
Series 2014-2 B1 144A 3.437% 6/25/29 #• | 2,331,765 | 2,362,202 | ||||||
Series 2014-2 B2 144A 3.437% 6/25/29 #• | 868,771 | 865,849 | ||||||
MASTR ARM Trust | ||||||||
Series 2003-6 1A2 2.45% 12/25/33 • | 43,030 | 42,842 | ||||||
Series 2004-10 2A2 3.021% 10/25/34 • | 58,913 | 38,574 | ||||||
Sequoia Mortgage Trust | ||||||||
Series 2013-11 B1 144A 3.705% 9/25/43 #• | 2,644,089 | 2,575,401 | ||||||
Series 2014-2 A4 144A 3.50% 7/25/44 #• | 4,286,320 | 4,374,725 | ||||||
Structured Asset Securities Mortgage Pass Through Certificates | ||||||||
Series 2004-20 2A1 5.50% 11/25/34 ¿ | 3,094,059 | 3,158,193 | ||||||
Structured Asset Securities Trust | ||||||||
Series 2005-1 4A1 5.00% 2/25/20 | 2,864,862 | 2,911,308 | ||||||
WaMu Mortgage Pass Through Certificates | ||||||||
Series 2003-S10 A2 5.00% 10/25/18 ¿ | 145,302 | 149,045 |
40
Table of Contents
Principal amount° | Value (U.S. $) | |||||||||||
| ||||||||||||
Non-Agency Collateralized Mortgage Obligations (continued) | ||||||||||||
| ||||||||||||
WaMu Mortgage Pass Through Certificates Trust | ||||||||||||
Series 2006-AR14 2A1 1.939% 11/25/36 ¿ • | 3,919,290 | $ | 3,309,057 | |||||||||
Washington Mutual Alternative Mortgage Pass Through Trust Series 2005-1 5A2 | ||||||||||||
6.00% 3/25/35 ¿ | 302,649 | 146,122 | ||||||||||
Wells Fargo Mortgage-Backed Securities Trust | ||||||||||||
Series 2005-3 A4 5.50% 5/25/35 | 5,234,297 | 5,395,446 | ||||||||||
Series 2006-2 3A1 5.75% 3/25/36 | 2,304,217 | 2,366,659 | ||||||||||
Series 2006-3 A11 5.50% 3/25/36 | 2,196,524 | 2,274,167 | ||||||||||
Series 2006-20 A1 5.50% 12/25/21 | 778,658 | 791,357 | ||||||||||
Series 2006-AR5 2A1 2.714% 4/25/36 • | 1,829,141 | 1,717,231 | ||||||||||
Series 2007-9 2A3 5.50% 7/25/22 | 3,540,341 | 3,628,634 | ||||||||||
Series 2007-14 1A1 6.00% 10/25/37 | 121,926 | 123,470 | ||||||||||
|
| |||||||||||
Total Non-Agency Collateralized Mortgage Obligations (cost $68,316,673) |
| 71,768,184 | ||||||||||
|
| |||||||||||
| ||||||||||||
Regional Bonds – 0.21%D | ||||||||||||
| ||||||||||||
Australia – 0.10% | ||||||||||||
New South Wales Treasury 4.00% 5/20/26 | AUD | 3,981,200 | 3,429,040 | |||||||||
Queensland Treasury 144A 4.75% 7/21/25 # | AUD | 2,982,000 | 2,678,479 | |||||||||
|
| |||||||||||
6,107,519 | ||||||||||||
|
| |||||||||||
Canada – 0.11% | ||||||||||||
Province of Ontario Canada 3.45% 6/2/45 | CAD | 2,594,000 | 2,324,238 | |||||||||
Province of Quebec Canada 6.00% 10/1/29 | CAD | 3,366,000 | 3,874,582 | |||||||||
|
| |||||||||||
6,198,820 | ||||||||||||
|
| |||||||||||
Total Regional Bonds (cost $12,480,303) | 12,306,339 | |||||||||||
|
| |||||||||||
| ||||||||||||
Senior Secured Loans – 11.59%« | ||||||||||||
| ||||||||||||
21st Century Oncology Tranche B 1st Lien 6.50% 4/28/22 | 5,080,000 | 5,080,982 | ||||||||||
Accudyne Industries (Hamilton Sundstrand Industrial) 1st Lien 4.00% 12/13/19 | 3,365,000 | 3,283,678 | ||||||||||
Air Medical Group Holdings Tranche B 1st Lien 4.50% 4/16/22 | 11,320,000 | 11,336,176 | ||||||||||
Albertson’s Holdings Tranche B4 1st Lien 5.50% 8/25/21 | 9,655,000 | 9,770,995 | ||||||||||
Albertsons Tranche B 1st Lien 5.375% 3/21/19 | 2,459,812 | 2,482,489 | ||||||||||
Altice Financing Tranche B 1st Lien 5.25% 1/29/22 | 6,880,000 | 6,983,200 | ||||||||||
Amaya Gaming 1st Lien 5.00% 8/1/21 | 4,795,900 | 4,818,383 | ||||||||||
Amaya Gaming 2nd Lien 8.00% 8/1/22 | 2,195,000 | 2,220,791 | ||||||||||
American Tire Distributors 1st Lien 4.25% 9/30/21 | 3,265,000 | 3,307,853 | ||||||||||
Applied Systems 1st Lien 5.50% 1/23/21 | 2,571,843 | 2,586,309 | ||||||||||
Applied Systems 2nd Lien 7.50% 1/23/22 | 7,492,300 | 7,549,661 | ||||||||||
Atkore International 2nd Lien 7.75% 10/9/21 | 3,249,000 | 3,078,428 | ||||||||||
Avaya Tranche B-3 4.681% 10/26/17 | 6,307,872 | 6,291,383 |
41
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Senior Secured Loans« (continued) |
| |||||||
| ||||||||
Axalta Coating Systems U.S. Holdings 1st Lien 3.75% 2/1/20 | 4,568,341 | $ | 4,587,103 | |||||
BJ’s Wholesale Club 2nd Lien 8.50% 3/31/20 | 6,830,000 | 6,915,375 | ||||||
BJ’s Wholesale Club Tranche B 1st Lien 4.50% 9/26/19 | 5,679,349 | 5,717,952 | ||||||
Burlington Coat Factory Warehouse Tranche B3 1st Lien 4.25% 8/13/21 | 3,005,000 | 3,027,538 | ||||||
BWAY Holding Tranche B 1st Lien 5.50% 8/14/20 | 5,553,038 | 5,615,509 | ||||||
Cable & Wireless Communications (CWC Cayman Finance) 5.50% 12/31/16 | 4,248,587 | 4,261,864 | ||||||
Cable & Wireless Communications (CWC Cayman Finance) (Unsecured) 6.50% 12/31/16 | 2,085,000 | 2,090,213 | ||||||
Caesars Growth Partners Tranche B 1st Lien 6.25% 5/8/21 | 11,292,337 | 10,163,103 | ||||||
Calpine Construction Finance Tranche B 3.00% 5/3/20 | 1,441,794 | 1,436,567 | ||||||
CD&R Millennium (Mauser Holdings) 2nd Lien 8.25% 7/31/22 | 4,150,000 | 4,118,875 | ||||||
Chemstralia (Orica Chemicals) Tranche B 1st Lien 7.25% 2/26/22 | 1,075,000 | 1,064,250 | ||||||
Citgo Holding Tranche B 1st Lien 9.50% 5/9/18 | 1,077,300 | 1,088,410 | ||||||
Citycenter Holdings Tranche B 1st Lien 4.25% 10/28/20 | 3,274,609 | 3,301,215 | ||||||
Colouroz (Flint Group) 1st Lien 4.75% 9/7/21 | 4,098,474 | 4,136,898 | ||||||
Colouroz (Flint Group) 2nd Lien 8.25% 9/7/22 | 2,125,000 | 2,090,469 | ||||||
Colouroz (Flint Group) Tranche C 1st Lien 4.75% 9/7/21 | 677,526 | 683,877 | ||||||
Communications Sales & Leasing Tranche B 1st Lien 5.00% 10/16/22 | 7,790,000 | 7,790,000 | ||||||
Community Health Systems Tranche D 4.25% 1/27/21 | 9,807,719 | 9,878,217 | ||||||
Crown Castles Operating Tranche B2 3.00% 1/31/21 | 3,451,595 | 3,457,852 | ||||||
DaVita Healthcare Partners Tranche B 3.50% 6/24/21 | 3,910,450 | 3,929,189 | ||||||
Dollar Tree Tranche B 1st Lien 4.25% 3/9/22 | 5,260,000 | 5,335,186 | ||||||
Drillship Ocean Ventures (Ocean Rig) Tranche B 1st Lien 5.50% 7/25/21 | 7,465,354 | 6,507,302 | ||||||
Drillships Financing Holding Tranche B1 6.00% 3/31/21 | 14,267,067 | 11,599,125 | ||||||
Dynegy Tranche B2 4.00% 4/23/20 | 3,097,750 | 3,116,005 | ||||||
Emdeon 1st Lien 3.75% 11/2/18 | 3,797,639 | 3,816,627 | ||||||
Energy Transfer Equity 1st Lien | ||||||||
3.25% 12/2/19 | 3,010,000 | 3,002,743 | ||||||
4.00% 12/2/19 | 2,100,000 | 2,113,125 | ||||||
Exide Technologies DIP 9.00% 5/8/15 | 5,802,482 | 4,758,035 | ||||||
FCA U.S. (Chrysler) Tranche B 1st Lien | ||||||||
3.25% 12/31/18 | 10,221,750 | 10,246,200 | ||||||
3.50% 5/24/17 | 1,969,536 | 1,975,683 | ||||||
First Data Tranche B 1st Lien | ||||||||
3.682% 3/24/17 | 8,213,693 | 8,239,361 | ||||||
4.182% 3/24/21 | 4,597,445 | 4,634,440 |
42
Table of Contents
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Senior Secured Loans« (continued) |
| |||||||
| ||||||||
First Data Tranche C1 1st Lien 3.682% 3/24/18 | 6,890,822 | $ | 6,914,202 | |||||
Flying Fortress 1st Lien 3.50% 6/30/17 | 1,225,209 | 1,229,549 | ||||||
FMG (Fortescue Resources) 1st Lien 3.75% 6/30/19 | 8,067,129 | 7,306,915 | ||||||
Gardner Denver 1st Lien 4.25% 7/30/20 | 9,608,901 | 9,396,909 | ||||||
Gates Global 1st Lien 4.25% 7/3/21 | 2,651,675 | 2,657,594 | ||||||
Global Cash Access Tranche B 6.25% 12/19/20 | 8,414,100 | 8,482,465 | ||||||
Green Energy Partners (Panda Stonewall) Tranche B 6.50% 11/13/21 | 4,505,000 | 4,575,391 | ||||||
Hanson Building Tranche B 1st Lien 6.50% 3/13/22 | 5,635,000 | 5,670,219 | ||||||
HD Supply Tranche B 4.00% 6/28/18 | 12,261,026 | 12,325,397 | ||||||
Headwaters Tranche B 1st Lien 4.50% 3/12/22 | 1,090,000 | 1,098,175 | ||||||
Hilton Worldwide Finance Tranche B2 3.50% 10/25/20 | 9,318,750 | 9,364,048 | ||||||
Houghton International 1st Lien 4.00% 12/20/19 | 1,876,800 | 1,882,079 | ||||||
Houghton International 2nd Lien 9.50% 12/21/20 | 2,605,000 | 2,614,769 | ||||||
Huntsman International Tranche B 1st Lien 3.75% 10/1/21 | 5,850,338 | 5,886,902 | ||||||
Hyperion Insurance Group Tranche B 1st Lien 4.813% 3/26/22 | 4,355,000 | 4,401,272 | ||||||
IASIS Healthcare Tranche B 1st Lien 4.50% 5/3/18 | 8,013,141 | 8,057,213 | ||||||
IBC Capital (Goodpack) 1st Lien 4.75% 9/15/21 | 5,045,000 | 5,064,706 | ||||||
iHeartCommunications (Clear Channel Communications) Tranche D 6.934% 1/30/19 | 18,035,000 | 17,300,074 | ||||||
iHeartCommunications (Clear Channel Communications) Tranche E 1st Lien 7.684% 7/30/19 | 1,349,729 | 1,313,244 | ||||||
Immucor Tranche B2 5.00% 8/19/18 | 9,710,236 | 9,758,787 | ||||||
Ineos U.S. Finance Tranche B 3.75% 5/4/18 | 5,962,904 | 5,981,198 | ||||||
Ineos U.S. Finance Tranche B 1st Lien 4.25% 3/31/22 | 1,310,000 | 1,319,357 | ||||||
Infor U.S. Tranche B5 1st Lien 3.75% 6/3/20 | 57,335 | 57,286 | ||||||
Intelsat Jackson Holdings Tranche B2 3.75% 6/30/19 | 10,202,366 | 10,212,569 | ||||||
J. Crew Group Tranche B 1st Lien 4.00% 3/5/21 | 7,919,880 | 7,446,335 | ||||||
KIK Custom Products 1st Lien 5.50% 4/29/19 | 8,008,719 | 8,031,247 | ||||||
KIK Custom Products 2nd Lien 9.50% 10/29/19 | 989,700 | 993,103 | ||||||
Kinetic Concepts Tranche E1 4.50% 5/4/18 | 1,415,677 | 1,427,474 | ||||||
Landry’s Tranche B 4.00% 4/24/18 | 4,888,798 | 4,918,131 | ||||||
Level 3 Financing Tranche B 4.00% 1/15/20 | 8,015,000 | 8,055,075 | ||||||
LTS Buyer 2nd Lien 8.00% 4/1/21 | 3,141,138 | 3,151,607 | ||||||
LTS Buyer (Lightower Fiber Networks) 1st Lien 4.00% 4/13/20 | 970,996 | 973,114 | ||||||
Marina District (Borgata) Tranche B 1st Lien 6.50% 8/15/18 | 6,417,439 | 6,481,614 | ||||||
Men’s Wearhouse Tranche B 1st Lien 5.00% 6/18/21 | 2,690,000 | 2,710,175 | ||||||
MGM Resorts International 3.50% 12/20/19 | 2,713,505 | 2,718,593 | ||||||
Michael Stores Tranche B 1st Lien 3.75% 1/28/20 | 2,294,661 | 2,305,419 | ||||||
Moxie Patriot (Panda Power Fund) Tranche B1 6.75% 12/19/20 | 4,500,000 | 4,522,500 |
43
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||
| ||||||||
Senior Secured Loans« (continued) |
| |||||||
| ||||||||
MPH Acquisition (Multiplan) Tranche B 3.75% 3/31/21 | 7,958,673 | $ | 7,968,001 | |||||
Murray Energy Tranche B2 1st Lien 7.50% 4/16/20 | 4,030,000 | 3,999,775 | ||||||
Neiman Marcus 1st Lien 4.25% 10/25/20 | 1,985,000 | 1,993,007 | ||||||
NEP/NCP 9.50% 7/22/20 | 3,077,857 | 3,085,552 | ||||||
NEP/NCP Tranche B 1st Lien 4.25% 1/22/20 | 806,865 | 801,318 | ||||||
New Albertsons 1st Lien 4.75% 6/27/21 | 3,034,750 | 3,052,294 | ||||||
New HB Acquisition (Hostess Brands) 1st Lien 6.75% 3/20/20 | 5,465,071 | 5,588,035 | ||||||
Numericable SFR 4.50% 5/21/20 | 6,969,689 | 7,036,661 | ||||||
Numericable U.S. Tranche B2 1st Lien 4.50% 5/21/20 | 6,029,731 | 6,062,141 | ||||||
Offshore Group (Vantage Drilling) Tranche B 1st Lien 5.00% 10/25/17 | 5,129,870 | 3,677,475 | ||||||
Pabst Blue Ribbon 1st Lien 5.75% 11/13/21 | 4,186,266 | 4,217,663 | ||||||
Pabst Blue Ribbon 2nd Lien 9.25% 11/13/22 | 1,610,000 | 1,626,100 | ||||||
Pacific Drilling Tranche B 4.50% 6/3/18 | 2,708,894 | 2,395,396 | ||||||
Panda Liberty (Moxie Liberty) Tranche B 7.50% 8/21/20 | 8,341,000 | 8,403,558 | ||||||
Par Pharmaceutical Tranche B3 1st Lien 4.25% 9/28/19 | 2,099,738 | 2,112,861 | ||||||
PetSmart Tranche B 1st Lien 5.00% 3/10/22 | 8,346,600 | 8,460,322 | ||||||
Polymer Group Tranche B 5.25% 12/19/19 | 6,477,296 | 6,528,577 | ||||||
Polymer Group Tranche B 1st Lien 5.25% 12/19/19 | 3,000,000 | 3,023,751 | ||||||
Prestige Brands Tranche B 1st Lien 4.50% 9/3/21 | 1,805,556 | 1,817,781 | ||||||
Quickrete 2nd Lien 7.00% 3/30/21 | 3,072,632 | 3,106,240 | ||||||
Republic of Angola 6.594% 12/16/23 | 11,720,000 | 11,427,000 | ||||||
Reynolds Group Holdings Tranche B 1st Lien 4.50% 12/1/18 | 10,897,858 | 11,014,400 | ||||||
Rite Aid 2nd Lien | ||||||||
4.875% 6/21/21 | 3,140,000 | 3,153,738 | ||||||
5.75% 8/21/20 | 7,280,000 | 7,351,286 | ||||||
RPI Finance Trust (Royalty Pharma) Tranche B4 1st Lien 3.50% 12/18/20 | 1,566,075 | 1,576,189 | ||||||
SAM Finance (Santander Asset Management) Tranche B 4.25% 12/17/20 | 2,315,688 | 2,327,266 | ||||||
Scientific Games International 6.00% 10/18/20 | 9,870,062 | 9,981,101 | ||||||
Scientific Games International Tranche B2 1st Lien 6.00% 10/1/21 | 2,403,975 | 2,431,186 | ||||||
Sensus 2nd Lien 8.50% 5/9/18 | 2,660,000 | 2,640,050 | ||||||
SIG Combibloc Group 1st Lien 5.25% 3/13/22 | 7,385,000 | 7,473,849 | ||||||
Sinclair Broadcasting Tranche B1 1st Lien 3.50% 7/30/21 | 2,725,000 | 2,730,393 | ||||||
Smart & Final Tranche B 1st Lien 4.75% 11/15/19 | 3,859,281 | 3,873,753 | ||||||
Solenis International (Ashland Water) 1st Lien 4.25% 7/31/21 | 2,338,250 | 2,346,654 | ||||||
Solenis International (Ashland Water) 2nd Lien 7.75% 7/31/22 | 1,875,000 | 1,828,125 | ||||||
Stena 1st Lien 4.00% 3/3/21 | 1,133,550 | 1,038,970 |
44
Table of Contents
Principal amount° | Value (U.S. $) | |||||||||||
| ||||||||||||
Senior Secured Loans« (continued) |
| |||||||||||
| ||||||||||||
Styrolution Group Tranche B 1st Lien 6.50% 9/30/19 | 2,149,613 | $ | 2,187,231 | |||||||||
Supervalu 1st Lien 4.50% 3/21/19 | 3,178,270 | 3,195,487 | ||||||||||
Surgical Care Affiliates Tranche B 1st Lien 4.25% 3/17/22 | 3,805,000 | 3,807,378 | ||||||||||
Sybil Finance (Avast Software) 1st Lien 4.75% 3/20/20 | 4,693,000 | 4,736,997 | ||||||||||
Targa Resources 1st Lien 5.75% 2/27/22 | 1,260,651 | 1,275,621 | ||||||||||
TransDigm Tranche C 3.75% 2/28/20 | 5,789,562 | 5,810,874 | ||||||||||
United Continental Tranche B 3.50% 4/1/19 | 1,053,052 | 1,057,001 | ||||||||||
Univision Communications 1st Lien 4.00% 3/1/20 | 2,126,194 | 2,129,421 | ||||||||||
Univision Communications Tranche C4 4.00% 3/1/20 | 12,197,376 | 12,215,892 | ||||||||||
US Airways Tranche B1 3.50% 5/23/19 | 1,692,550 | 1,696,631 | ||||||||||
USI Insurance Services Tranche B 1st Lien 4.25% 12/27/19 | 8,822,953 | 8,850,525 | ||||||||||
Valeant Pharmaceuticals International Tranche BE 3.50% 8/5/20 | 6,844,827 | 6,871,823 | ||||||||||
Valeant Pharmaceuticals International Tranche B-F1 1st Lien 4.00% 3/13/22 | 6,340,000 | 6,391,912 | ||||||||||
Varsity Brands Tranche B 1st Lien 6.00% 12/15/21 | 3,645,862 | 3,700,550 | ||||||||||
Weight Watchers International 3.19% 4/2/16 | 1,871,566 | 1,675,051 | ||||||||||
Wide Open West Finance 4.75% 4/1/19 | 12,656,700 | 12,739,196 | ||||||||||
Windstream Tranche B5 1st Lien 3.50% 8/8/19 | 37,031 | 37,022 | ||||||||||
Zayo Group Tranche B 1st Lien 3.75% 7/2/19 | 8,910,275 | 8,929,770 | ||||||||||
Ziggo Tranche B 2nd Lien 3.50% 1/15/22 | 1,358,298 | 1,361,316 | ||||||||||
Ziggo Tranche B 3rd Lien 3.50% 1/15/22 | 2,233,915 | 2,238,879 | ||||||||||
Ziggo Tranche B1 1st Lien 3.50% 1/15/22 | 2,107,787 | 2,112,471 | ||||||||||
|
| |||||||||||
Total Senior Secured Loans (cost $667,123,371) | 665,264,859 | |||||||||||
|
| |||||||||||
| ||||||||||||
Sovereign Bonds – 3.22%D | ||||||||||||
| ||||||||||||
Armenia – 0.12% | ||||||||||||
Republic of Armenia 144A 7.15% 3/26/25 # | 6,757,000 | 6,892,140 | ||||||||||
|
| |||||||||||
6,892,140 | ||||||||||||
|
| |||||||||||
Australia – 0.09% | ||||||||||||
Australia Government Bond | ||||||||||||
3.25% 4/21/25 | AUD | 3,397,000 | 2,830,339 | |||||||||
3.75% 4/21/37 | AUD | 2,743,000 | 2,378,642 | |||||||||
|
| |||||||||||
5,208,981 | ||||||||||||
|
| |||||||||||
Brazil – 0.15% | ||||||||||||
Brazil Notas do Tesouro Nacional Series F | ||||||||||||
10.00% 1/1/17 | BRL | 13,694,000 | 4,334,469 | |||||||||
10.00% 1/1/23 | BRL | 14,800,000 | 4,315,019 | |||||||||
|
| |||||||||||
8,649,488 | ||||||||||||
|
| |||||||||||
Canada – 0.02% | ||||||||||||
Canadian Government Bond 2.75% 12/1/48 | CAD | 1,202,000 | 1,124,138 | |||||||||
|
| |||||||||||
1,124,138 | ||||||||||||
|
|
45
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||||||
| ||||||||||||
Sovereign BondsD (continued) | ||||||||||||
| ||||||||||||
Chile – 0.08% | ||||||||||||
Chile Government International Bond 5.50% 8/5/20 | CLP | 2,737,000,000 | $ | 4,804,796 | ||||||||
|
| |||||||||||
4,804,796 | ||||||||||||
|
| |||||||||||
Colombia – 0.24% | ||||||||||||
Colombia Government International Bond | ||||||||||||
4.375% 3/21/23 | COP | 7,082,000,000 | 2,779,878 | |||||||||
5.00% 6/15/45 | 9,669,000 | 9,814,035 | ||||||||||
9.85% 6/28/27 | COP | 2,576,000,000 | 1,423,181 | |||||||||
|
| |||||||||||
14,017,094 | ||||||||||||
|
| |||||||||||
Costa Rica – 0.09% | ||||||||||||
Costa Rica Government International Bond | ||||||||||||
5.625% 4/30/43 | 5,790,000 | 5,153,100 | ||||||||||
|
| |||||||||||
5,153,100 | ||||||||||||
|
| |||||||||||
Dominican Republic – 0.16% | ||||||||||||
Dominican Republic International Bond | ||||||||||||
144A 5.50% 1/27/25 # | 4,600,000 | 4,772,500 | ||||||||||
144A 6.85% 1/27/45 # | 4,000,000 | 4,200,000 | ||||||||||
|
| |||||||||||
8,972,500 | ||||||||||||
|
| |||||||||||
Germany – 0.03% | ||||||||||||
Bundesrepublik Deutschland 0.50% 2/15/25 | EUR | 1,646,000 | 1,871,750 | |||||||||
|
| |||||||||||
1,871,750 | ||||||||||||
|
| |||||||||||
Indonesia – 0.25% | ||||||||||||
Indonesia Government International Bond 144A | ||||||||||||
4.625% 4/15/43 # | 6,040,000 | 5,889,000 | ||||||||||
Indonesia Treasury Bond 8.375% 3/15/24 | IDR | 107,191,000,000 | 8,651,771 | |||||||||
|
| |||||||||||
14,540,771 | ||||||||||||
|
| |||||||||||
Italy – 0.12% | ||||||||||||
Italy Buoni Poliennali Del Tesoro 1.35% 4/15/22 | EUR | 5,857,000 | 6,691,232 | |||||||||
|
| |||||||||||
6,691,232 | ||||||||||||
|
| |||||||||||
Ivory Coast – 0.08% | ||||||||||||
Ivory Coast Government International Bond 144A | ||||||||||||
6.375% 3/3/28 # | 4,675,000 | 4,698,375 | ||||||||||
|
| |||||||||||
4,698,375 | ||||||||||||
|
| |||||||||||
Japan – 0.02% | ||||||||||||
Japan Government 40 yr Bond 1.40% 3/20/55 | JPY | 148,300,000 | 1,211,800 | |||||||||
|
| |||||||||||
1,211,800 | ||||||||||||
|
| |||||||||||
Mexico – 0.23% | ||||||||||||
Mexican Bonos 7.50% 6/3/27 | MXN | 158,232,000 | 11,498,962 | |||||||||
Mexico Government International Bond 3.60% 1/30/25 | 1,637,000 | 1,668,103 | ||||||||||
|
| |||||||||||
13,167,065 | ||||||||||||
|
|
46
Table of Contents
Principal amount° | Value (U.S. $) | |||||||||||
| ||||||||||||
Sovereign BondsD (continued) | ||||||||||||
| ||||||||||||
Norway – 0.21% | ||||||||||||
Kommunalbanken | ||||||||||||
144A 2.125% 4/23/25 # | 9,576,000 | $ | 9,413,170 | |||||||||
5.00% 3/28/19 | NZD | 510,000 | 405,460 | |||||||||
Norway Government Bond | ||||||||||||
2.00% 5/24/23 | NOK | 1,662,000 | 230,243 | |||||||||
3.00% 3/14/24 | NOK | 14,754,000 | 2,202,871 | |||||||||
|
| |||||||||||
12,251,744 | ||||||||||||
|
| |||||||||||
Pakistan – 0.16% | ||||||||||||
Pakistan Government International Bond 144A | ||||||||||||
7.25% 4/15/19 # | 8,649,000 | 9,162,880 | ||||||||||
|
| |||||||||||
9,162,880 | ||||||||||||
|
| |||||||||||
Peru – 0.11% | ||||||||||||
Peruvian Government International Bond 144A | ||||||||||||
6.95% 8/12/31 # | PEN | 19,800,000 | 6,558,865 | |||||||||
|
| |||||||||||
6,558,865 | ||||||||||||
|
| |||||||||||
Poland – 0.05% | ||||||||||||
Poland Government Bond 3.25% 7/25/25 | PLN | 9,401,000 | 2,753,400 | |||||||||
|
| |||||||||||
2,753,400 | ||||||||||||
|
| |||||||||||
Portugal – 0.02% | ||||||||||||
Portugal Government International Bond 144A | ||||||||||||
5.125% 10/15/24 # | 1,045,000 | 1,130,115 | ||||||||||
|
| |||||||||||
1,130,115 | ||||||||||||
|
| |||||||||||
Republic of Korea – 0.14% | ||||||||||||
Inflation Linked Korea Treasury Bond 1.125% 6/10/23 | KRW | 8,863,191,183 | 7,887,739 | |||||||||
|
| |||||||||||
7,887,739 | ||||||||||||
|
| |||||||||||
Senegal – 0.07% | ||||||||||||
Senegal Government International Bond 144A | ||||||||||||
6.25% 7/30/24 # | 4,297,000 | 4,254,889 | ||||||||||
|
| |||||||||||
4,254,889 | ||||||||||||
|
| |||||||||||
Singapore – 0.09% | ||||||||||||
Temasek Financial I 144A 2.375% 1/23/23 # | 4,915,000 | 4,876,869 | ||||||||||
|
| |||||||||||
4,876,869 | ||||||||||||
|
| |||||||||||
South Africa – 0.31% | ||||||||||||
South Africa Government Bond 8.00% 1/31/30 | ZAR | 181,007,000 | 14,735,163 | |||||||||
South Africa Government International Bond | ||||||||||||
5.375% 7/24/44 | 2,933,000 | 3,125,111 | ||||||||||
|
| |||||||||||
17,860,274 | ||||||||||||
|
| |||||||||||
Turkey – 0.15% | ||||||||||||
Turkey Government International Bond 4.25% 4/14/26 | 8,600,000 | 8,370,294 | ||||||||||
|
| |||||||||||
8,370,294 | ||||||||||||
|
|
47
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Principal amount° | Value (U.S. $) | |||||||||
| ||||||||||
Sovereign BondsD (continued) | ||||||||||
| ||||||||||
United Kingdom – 0.12% | ||||||||||
United Kingdom Gilt | ||||||||||
3.25% 1/22/44 | GBP | 1,752,900 | $ | 3,077,069 | ||||||
3.50% 1/22/45 | GBP | 1,169,100 | 2,157,088 | |||||||
United Kingdom Gilt Inflation Linked 0.125% 3/22/24 | GBP | 982,668 | 1,656,984 | |||||||
|
| |||||||||
6,891,141 | ||||||||||
|
| |||||||||
Uruguay – 0.11% | ||||||||||
Uruguay Government International Bond 5.10% 6/18/50 | 5,949,000 | 6,070,972 | ||||||||
|
| |||||||||
6,070,972 | ||||||||||
|
| |||||||||
Total Sovereign Bonds (cost $186,095,899) | 185,072,412 | |||||||||
|
| |||||||||
| ||||||||||
Supranational Banks – 0.61% | ||||||||||
| ||||||||||
Banco Latinoamericano de Comercio Exterior 144A | ||||||||||
3.25% 5/7/20 # | 4,615,000 | 4,598,986 | ||||||||
European Bank for Reconstruction & Development | ||||||||||
6.00% 3/3/16 | INR | 260,400,000 | 4,067,181 | |||||||
7.375% 4/15/19 | IDR | 69,950,000,000 | 5,306,756 | |||||||
Inter-American Development Bank | ||||||||||
6.00% 9/5/17 | INR | 377,950,000 | 5,894,271 | |||||||
7.25% 7/17/17 | IDR | 49,400,000,000 | 3,736,107 | |||||||
International Bank for Reconstruction & Development | ||||||||||
0.25% 4/17/19 • | 2,469,000 | 2,472,197 | ||||||||
2.50% 11/25/24 | 2,469,000 | 2,534,890 | ||||||||
3.75% 2/10/20 | NZD | 3,300,000 | 2,515,837 | |||||||
4.625% 10/6/21 | NZD | 5,245,000 | 4,172,432 | |||||||
|
| |||||||||
Total Supranational Banks (cost $36,560,152) | 35,298,657 | |||||||||
|
| |||||||||
| ||||||||||
U.S. Treasury Obligations – 1.51% | ||||||||||
| ||||||||||
U.S. Treasury Bond | ||||||||||
2.50% 2/15/45 ¥ | 58,785,000 | 55,854,920 | ||||||||
U.S. Treasury Note | ||||||||||
1.375% 3/31/20 | 11,330,000 | 11,294,594 | ||||||||
2.00% 2/15/25 | 17,425,000 | 17,355,579 | ||||||||
2.25% 11/15/24 | 2,020,000 | 2,057,560 | ||||||||
|
| |||||||||
Total U.S. Treasury Obligations (cost $88,154,688) | 86,562,653 | |||||||||
|
| |||||||||
| Number of Shares |
| ||||||||
| ||||||||||
Common Stock – 0.04% | ||||||||||
| ||||||||||
Century Communications =† | 7,875,000 | 0 |
48
Table of Contents
Number of Shares | Value (U.S. $) | |||||||
| ||||||||
Common Stock (continued) | ||||||||
| ||||||||
HealthSouth | 51,766 | $ | 2,340,870 | |||||
Mirant (Escrow) † | 695,000 | 0 | ||||||
|
| |||||||
Total Common Stock (cost $1,951,172) | 2,340,870 | |||||||
|
| |||||||
| ||||||||
Convertible Preferred Stock – 0.44% | ||||||||
| ||||||||
Alcoa 5.375% exercise price $19.39, expiration date 10/1/17 | 34,550 | 1,576,171 | ||||||
ArcelorMittal 6.00% exercise price $20.36, expiration date 12/21/15 | 105,625 | 1,815,430 | ||||||
Bank of America 7.25% exercise price $50.00, expiration date 12/31/49 | 1,477 | 1,702,612 | ||||||
Chesapeake Energy 144A 5.75% exercise price $26.10, expiration date 12/31/49 # | 1,633 | 1,409,483 | ||||||
Dominion Resources 6.125% exercise price $65.06, expiration date 4/1/16 | 23,556 | 1,334,919 | ||||||
Dynegy 5.375% exercise price $38.75, expiration date 11/1/17 @ | 16,660 | 1,891,077 | ||||||
Exelon 6.50% exercise price $43.75, expiration date 6/1/17 | 38,450 | 1,894,431 | ||||||
Halcon Resources 5.75% exercise price $6.16, expiration date 12/31/49 | 2,077 | 604,407 | ||||||
Huntington Bancshares 8.50% exercise price $11.95, expiration date 12/31/49 | 1,796 | 2,460,520 | ||||||
Intelsat 5.75% exercise price $22.05, expiration date 5/1/16 | 77,386 | 2,718,570 | ||||||
Maiden Holdings 7.25% exercise price $15.30, expiration date 9/15/16 | 58,850 | 3,051,373 | ||||||
SandRidge Energy 8.50% exercise price $8.01, expiration date 12/31/49 | 14,334 | 609,195 | ||||||
T-Mobile US 5.50% exercise price $31.02, expiration date 12/15/17 | 22,922 | 1,429,187 | ||||||
Wells Fargo 7.50% exercise price $156.71, expiration date 12/31/49 | 2,210 | 2,693,437 | ||||||
|
| |||||||
Total Convertible Preferred Stock (cost $29,215,413) | 25,190,812 | |||||||
|
| |||||||
| ||||||||
Preferred Stock – 0.55% | ||||||||
| ||||||||
Alabama Power 5.625% | 289,178 | 7,258,368 | ||||||
Ally Financial 144A 7.00% # | 4,915 | 5,032,346 | ||||||
Bank of America 6.10% • | 3,595,000 | 3,675,887 | ||||||
Integrys Energy Group 6.00% • | 205,350 | 5,620,429 | ||||||
Morgan Stanley 5.55% • | 3,015,000 | 3,037,613 | ||||||
National Retail Properties 5.70% | 67,445 | 1,636,890 |
49
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
Number of Shares | Value (U.S. $) | |||||||
| ||||||||
Preferred Stock (continued) | ||||||||
| ||||||||
Public Storage 5.20% | 212,995 | $ | 5,133,179 | |||||
|
| |||||||
Total Preferred Stock (cost $30,176,792) | 31,394,712 | |||||||
|
| |||||||
Principal amount° | ||||||||
| ||||||||
Short-Term Investments – 5.03% | ||||||||
| ||||||||
Discount Notes – 2.54%≠ | ||||||||
Federal Home Loan Bank | ||||||||
0.05% 6/1/15 | 34,474,756 | 34,473,652 | ||||||
0.065% 6/5/15 | 15,263,423 | 15,262,873 | ||||||
0.075% 6/4/15 | 14,119,324 | 14,118,830 | ||||||
0.075% 6/29/15 | 14,119,324 | 14,118,463 | ||||||
0.08% 7/17/15 | 12,594,129 | 12,592,782 | ||||||
0.08% 7/22/15 | 16,792,172 | 16,790,258 | ||||||
0.095% 7/14/15 | 38,645,023 | 38,641,042 | ||||||
|
| |||||||
145,997,900 | ||||||||
|
| |||||||
Repurchase Agreements – 2.49% | ||||||||
Bank of America Merrill Lynch | ||||||||
0.06%, dated 4/30/15, to be repurchased on 5/1/15, repurchase price $50,604,194 (collateralized by U.S. government obligations 0.25%–2.00% 8/31/21–1/15/25; market value $51,616,192) | 50,604,110 | 50,604,110 | ||||||
Bank of Montreal | ||||||||
0.08%, dated 4/30/15, to be repurchased on 5/1/15, repurchase price $42,170,185 (collateralized by U.S. government obligations 0.00%–9.125% 2/4/16–7/15/24; market value $43,013,504) | 42,170,091 | 42,170,091 | ||||||
BNP Paribas | ||||||||
0.10%, dated 4/30/15, to be repurchased on 5/1/15, repurchase price $49,963,938 (collateralized by U.S. government obligations 0.00%–2.00% 8/6/15–11/15/42; market value $50,963,079) | 49,963,799 | 49,963,799 | ||||||
|
| |||||||
142,738,000 | ||||||||
|
| |||||||
Total Short-Term Investments (cost $288,730,883) | 288,735,900 | |||||||
|
| |||||||
Total Value of Securities – 101.89% | ||||||||
(cost $5,743,245,206) | $ | 5,847,207,506 | ||||||
|
|
# | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At April 30, 2015, the aggregate value of Rule 144A securities was $1,394,220,927, which represents 24.29% of the Fund’s net assets. See Note 9 in “Notes to financial statements.” |
@ | Illiquid security. At April 30, 2015, the aggregate value of illiquid securities was $1,891,077, which represents 0.03% of the Fund’s net assets. See Note 9 in “Notes to financial statements.” |
50
Table of Contents
¿ | 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. |
= | Security is being fair valued in accordance with the Fund’s fair valuation policy. At April 30, 2015, the aggregate value of fair valued securities was $0, which represents 0.00% of the Fund’s net assets. See Note 1 in “Notes to financial statements.” |
≠ | The rate shown is the effective yield at the time of purchase. |
° | Principal amount shown is stated in U.S. dollars unless noted that the security is denominated in another currency. |
† | Non-income-producing security. |
• | Variable rate security. The rate shown is the rate as of April 30, 2015. Interest rates reset periodically. |
¥ | Fully or partially pledged as collateral for futures contracts. |
D | Securities have been classified by country of origin. |
S | Interest only security. An interest only security is the interest only portion of a fixed income security which is separated and sold individually from the principal portion of the security. |
« | Senior secured loans generally pay interest at rates which are periodically redetermined by reference to a base lending rate plus a premium. These base lending rates are generally: (i) the prime rate offered by one or more U.S. banks, (ii) the lending rate offered by one or more European banks such as the London Interbank Offered Rate (LIBOR), and (iii) the certificate of deposit rate. Senior secured loans may be subject to restrictions on resale. Stated rate in effect at April 30, 2015. |
f | Step coupon bond. Coupon increases or decreases periodically based on a predetermined schedule. Stated rate in effect at April 30, 2015. |
51
Table of Contents
Schedule of investments
Delaware Diversified Income Fund
The following foreign currency exchange contracts and futures contracts were outstanding at April 30, 2015:1
Foreign Currency Exchange Contracts
Counterparty | Contracts to Receive (Deliver) | In Exchange For | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||||||||||
BAML | AUD | (8,320,291 | ) | USD | 6,489,328 | 6/12/15 | $ | (79,619 | ) | |||||||||
BAML | CAD | (12,746,561 | ) | USD | 10,503,186 | 6/12/15 | (54,450 | ) | ||||||||||
BAML | EUR | (3,055,492 | ) | USD | 3,317,641 | 6/12/15 | (114,128 | ) | ||||||||||
BAML | IDR | (90,037,393,904 | ) | USD | 6,835,515 | 6/12/15 | (24,042 | ) | ||||||||||
BAML | JPY | (527,391,860 | ) | USD | 4,417,898 | 6/12/15 | (1,243 | ) | ||||||||||
BAML | NZD | (16,681,916 | ) | USD | 12,643,891 | 6/12/15 | (34,931 | ) | ||||||||||
BAML | ZAR | (64,262,011 | ) | USD | 5,286,531 | 6/12/15 | (77,372 | ) | ||||||||||
BNP | AUD | (10,730,424 | ) | USD | 8,422,449 | 6/12/15 | (49,319 | ) | ||||||||||
BNP | NOK | (46,166,471 | ) | USD | 6,025,093 | 6/12/15 | (98,865 | ) | ||||||||||
BNYM | BRL | 6,758,532 | USD | (2,327,719 | ) | 5/4/15 | (86,428 | ) | ||||||||||
DB | MXN | (23,741,213 | ) | USD | 1,538,137 | 6/12/15 | (5,002 | ) | ||||||||||
HSBC | GBP | (5,333,135 | ) | USD | 8,085,726 | 6/12/15 | (98,910 | ) | ||||||||||
JPMC | COP | (8,669,163,814 | ) | USD | 3,559,135 | 6/12/15 | (65,173 | ) | ||||||||||
JPMC | GBP | (6,967,166 | ) | USD | 10,565,951 | 6/12/15 | (126,393 | ) | ||||||||||
JPMC | KRW | (8,525,381,610 | ) | USD | 7,936,993 | 6/12/15 | 31,775 | |||||||||||
JPMC | PLN | (8,143,900 | ) | USD | 2,214,019 | 6/12/15 | (44,541 | ) | ||||||||||
JPMC | SEK | 2,022,068 | USD | (234,858 | ) | 6/12/15 | 7,949 | |||||||||||
TD | CAD | 3,891,986 | USD | (3,214,286 | ) | 6/12/15 | 9,342 | |||||||||||
TD | JPY | 410,195,217 | USD | (3,441,749 | ) | 6/12/15 | (4,627 | ) | ||||||||||
UBS | ZAR | 36,236,653 | USD | (3,075,594 | ) | 5/4/15 | (31,026 | ) | ||||||||||
|
| |||||||||||||||||
$ | (947,003 | ) | ||||||||||||||||
|
|
Futures Contracts
Contracts to Buy (Sell) | Notional Cost (Proceeds) | Notional Value | Expiration Date | Unrealized Appreciation (Depreciation) | ||||||||||||
(16) | Euro-Bund | $ | (2,815,359 | ) | $ | (2,814,332 | ) | 6/9/15 | $ | 1,027 | ||||||
1,964 | U.S. Treasury 5 yr Notes | 235,533,884 | 235,940,844 | 7/1/15 | 406,960 | |||||||||||
(3,267) | U.S. Treasury 10 yr Notes | (420,686,443 | ) | (419,401,125 | ) | 6/22/15 | 1,285,318 | |||||||||
|
|
|
| |||||||||||||
$ | (187,967,918 | ) | $ | 1,693,305 | ||||||||||||
|
|
|
|
The use of foreign currency exchange contracts and futures contracts involves elements of market risk and risks in excess of the amounts disclosed in the financial statements. The notional values and foreign currency exchange contracts presented above represent the Fund’s total exposure in such contracts, whereas only the net unrealized appreciation (depreciation) is reflected in the Fund’s net assets.
1See Note 6 in “Notes to financial statements.”
Summary of abbreviations:
AMT – Subject to Alternative Minimum Tax
52
Table of Contents
Summary of Abbreviations (continued):
ARM – Adjustable Rate Mortgage
AUD – Australian Dollar
BAML – Bank of America Merrill Lynch
BNP – Banque Paribas
BNYM – Bank of New York Mellon
BRL – Brazilian Real
CAD – Canadian Dollar
CLP – Chilean Peso
COP – Colombian Peso
DB – Deutsche Bank
DIP – Debtor in Possession
EUR – European Monetary Unit
GBP – British Pound Sterling
GE – General Electric
GNMA – Government National Mortgage Association
GS – Goldman Sachs
GSMPS – Goldman Sachs Reperforming Mortgage Securities
HSBC – Hong Kong Shanghai Bank
IDR – Indonesian Rupiah
INR – Indian Rupee
JPMC – JPMorgan Chase Bank
JPY – Japanese Yen
KRW – South Korean Won
LB – Lehman Brothers
MASTR – Mortgage Asset Securitization Transactions, Inc.
MXN – Mexican Peso
NOK – Norwegian Krone
NZD – New Zealand Dollar
PEN – Peruvian Nuevo Sol
PLN – Polish Zloty
REMIC – Real Estate Mortgage Investment Conduit
SEK – Swedish Krona
S.F. – Single Family
TBA – To be announced
TD – Toronto Dominion Securities
UBS – Union Bank of Switzerland
USD – U.S. Dollar
WaMu – Washington Mutual
yr – Year
ZAR – South African Rand
See accompanying notes, which are an integral part of the financial statements.
53
Table of Contents
Statement of assets and liabilities | ||
Delaware Diversified Income Fund | April 30, 2015 (Unaudited) |
Assets: | ||||
Investments, at value1 | $ | 5,558,471,606 | ||
Short-term investments, at value2 | 288,735,900 | |||
Cash | 12,573,342 | |||
Foreign currencies, at value3 | 11,627,467 | |||
Cash collateral due from brokers | 2,850,000 | |||
Receivable for securities sold | 434,647,995 | |||
Dividends and interest receivable | 45,433,764 | |||
Receivable for fund shares sold | 9,057,115 | |||
Variation margin due from broker on futures contracts | 246,230 | |||
Unrealized appreciation on foreign currency exchange contracts | 49,066 | |||
Securities lending income receivable | 254 | |||
|
| |||
Total assets | 6,363,692,739 | |||
|
| |||
Liabilities: | ||||
Payable for securities purchased | 602,442,104 | |||
Payable for fund shares redeemed | 10,425,791 | |||
Income distribution payable | 4,770,556 | |||
Other accrued expenses | 2,344,609 | |||
Investment management fees payable | 2,124,269 | |||
Distribution fees payable to affiliates | 1,366,107 | |||
Unrealized depreciation on foreign currency exchange contracts | 996,069 | |||
Other affiliates payable | 207,823 | |||
Cash collateral due to brokers | 120,000 | |||
Trustees’ fees and expenses payable | 13,680 | |||
Other liabilities | 14,822 | |||
|
| |||
Total liabilities | 624,825,830 | |||
|
| |||
Total Net Assets | $ | 5,738,866,909 | ||
|
| |||
Net Assets Consist of: | ||||
Paid-in capital | $ | 5,659,757,903 | ||
Distributions in excess of net investment income | (20,810,801 | ) | ||
Accumulated net realized loss | (5,001,489 | ) | ||
Net unrealized appreciation of investments, foreign currencies, and derivatives | 104,921,296 | |||
|
| |||
Total Net Assets | $ | 5,738,866,909 | ||
|
|
54
Table of Contents
Net Asset Value | ||||
Class A: | ||||
Net assets | $ | 1,882,021,010 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 208,172,604 | |||
Net asset value per share | $ | 9.04 | ||
Sales charge | 4.50 | % | ||
Offering price per share, equal to net asset value per share / (1 – sales charge) | $ | 9.47 | ||
Class C: | ||||
Net assets | $ | 1,119,864,135 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 123,882,823 | |||
Net asset value per share | $ | 9.04 | ||
Class R: | ||||
Net assets | $ | 116,539,990 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 12,897,323 | |||
Net asset value per share | $ | 9.04 | ||
Institutional Class: | ||||
Net assets | $ | 2,620,441,774 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 289,637,162 | |||
Net asset value per share | $ | 9.05 | ||
| ||||
1Investments, at cost | $ | 5,454,514,323 | ||
2Short-term investments, at cost | 288,730,883 | |||
3Foreign currencies, at cost | 11,526,354 |
See accompanying notes, which are an integral part of the financial statements.
55
Table of Contents
Statement of operations | ||
Delaware Diversified Income Fund | Six months ended April 30, 2015 (Unaudited) |
Investment Income: | ||||
Interest | $ | 111,651,534 | ||
Dividends | 1,764,461 | |||
Securities lending income | 345,761 | |||
Foreign tax withheld | (7,556 | ) | ||
|
| |||
113,754,200 | ||||
|
| |||
Expenses: | ||||
Management fees | 12,868,235 | |||
Distribution expenses – Class A | 2,494,729 | |||
Distribution expenses – Class C | 5,699,595 | |||
Distribution expenses – Class R | 291,299 | |||
Dividend disbursing and transfer agent fees and expenses | 3,778,499 | |||
Accounting and administration expenses | 918,289 | |||
Reports and statements to shareholders | 840,849 | |||
Legal fees | 320,719 | |||
Custodian fees | 170,947 | |||
Trustees’ fees and expenses | 133,578 | |||
Registration fees | 84,371 | |||
Audit and tax | 26,369 | |||
Other | 123,574 | |||
|
| |||
27,751,053 | ||||
Less expense paid indirectly | (868 | ) | ||
|
| |||
Total operating expenses | 27,750,185 | |||
|
| |||
Net Investment Income | 86,004,015 | |||
|
|
56
Table of Contents
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain (loss) on: | ||||
Investments* | $ | 37,391,998 | ||
Foreign currencies | (13,499,798 | ) | ||
Foreign currency exchange contracts | 5,563,978 | |||
Futures contracts | 5,208,465 | |||
Swap contracts | (244,258 | ) | ||
|
| |||
Net realized gain | 34,420,385 | |||
|
| |||
Net change in unrealized appreciation (depreciation) of: | ||||
Investments** | (31,617,823 | ) | ||
Foreign currencies | 69,814 | |||
Foreign currency exchange contracts | (1,376,274 | ) | ||
Futures contracts | 648,765 | |||
Swap contracts | 154,023 | |||
|
| |||
Net change in unrealized appreciation (depreciation) | (32,121,495 | ) | ||
|
| |||
Net Realized and Unrealized Gain | 2,298,890 | |||
|
| |||
Net Increase in Net Assets Resulting from Operations | $ | 88,302,905 | ||
|
|
*Includes $39,998 capital gain taxes paid.
**Includes $15,349 capital gain taxes accrued.
See accompanying notes, which are an integral part of the financial statements.
57
Table of Contents
Statements of changes in net assets
Delaware Diversified Income Fund
Six months ended 4/30/15 | Year ended 10/31/14 | |||||||
Increase (Decrease) in Net Assets from Operations: | ||||||||
Net investment income | $ | 86,004,015 | $ | 189,479,574 | ||||
Net realized gain | 34,420,385 | 88,257,893 | ||||||
Net change in unrealized appreciation (depreciation) | (32,121,495 | ) | 15,228,646 | |||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 88,302,905 | 292,966,113 | ||||||
|
|
|
| |||||
Dividends and Distributions to Shareholders from: | ||||||||
Net investment income: | ||||||||
Class A | (35,056,792 | ) | (101,311,286 | ) | ||||
Class B | — | (199,020 | ) | |||||
Class C | (15,746,840 | ) | (38,624,229 | ) | ||||
Class R | (1,901,428 | ) | (4,252,164 | ) | ||||
Institutional Class | (46,687,433 | ) | (71,970,965 | ) | ||||
Net realized gain: | ||||||||
Class A | (7,212,371 | ) | — | |||||
Class C | (4,089,727 | ) | — | |||||
Class R | (409,856 | ) | — | |||||
Institutional Class | (8,547,257 | ) | — | |||||
|
|
|
| |||||
(119,651,704 | ) | (216,357,664 | ) | |||||
|
|
|
| |||||
Capital Share Transactions: | ||||||||
Proceeds from shares sold: | ||||||||
Class A | 245,110,677 | 409,534,255 | ||||||
Class B | — | 10,560 | ||||||
Class C | 48,158,270 | 91,850,364 | ||||||
Class R | 17,957,706 | 41,084,040 | ||||||
Institutional Class | 494,522,458 | 1,335,463,575 | ||||||
Net asset value of shares issued upon reinvestment of dividends and distributions: | ||||||||
Class A | 40,531,509 | 99,203,203 | ||||||
Class B | — | 184,545 | ||||||
Class C | 18,250,634 | 35,230,749 | ||||||
Class R | 2,308,287 | 4,250,429 | ||||||
Institutional Class | 52,600,739 | 66,560,180 | ||||||
|
|
|
| |||||
919,440,280 | 2,083,371,900 | |||||||
|
|
|
|
58
Table of Contents
Six months ended 4/30/15 | Year ended 10/31/14 | |||||||
Capital Share Transactions (continued): | ||||||||
Cost of shares redeemed: | ||||||||
Class A | $ | (441,073,140 | ) | $ | (1,745,741,871 | ) | ||
Class B | — | (9,700,498 | ) | |||||
Class C | (117,660,668 | ) | (437,984,676 | ) | ||||
Class R | (19,931,993 | ) | (54,724,332 | ) | ||||
Institutional Class | (307,511,307 | ) | (762,910,784 | ) | ||||
|
|
|
| |||||
(886,177,108 | ) | (3,011,062,161 | ) | |||||
|
|
|
| |||||
Increase (Decrease) in net assets derived from capital share transactions | 33,263,172 | (927,690,261 | ) | |||||
|
|
|
| |||||
Net Increase (Decrease) in Net Assets | 1,914,373 | (851,081,812 | ) | |||||
Net Assets: | ||||||||
Beginning of period | 5,736,952,536 | 6,588,034,348 | ||||||
|
|
|
| |||||
End of period | $ | 5,738,866,909 | $ | 5,736,952,536 | ||||
|
|
|
| |||||
Distributions in excess of net investment income | $ | (20,810,801 | ) | $ | (7,422,323 | ) | ||
|
|
|
|
See accompanying notes, which are an integral part of the financial statements.
59
Table of Contents
Delaware Diversified Income 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 |
Return of capital |
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 assets |
Ratio of expenses to average net assets prior to fees waived |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
1 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
2 | The average shares outstanding method has been applied for per share information. |
3 | Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during some of the periods shown reflects a waiver by the distributor. Performance would have been lower had the waiver not been in effect. |
See accompanying notes, which are an integral part of the financial statements.
60
Table of Contents
Six months ended 4/30/151 | Year ended | |||||||||||||||||||||||
(Unaudited) | 10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | |||||||||||||||||||
| ||||||||||||||||||||||||
$ | 9.090 | $ | 8.960 | $ | 9.450 | $ | 9.330 | $ | 9.770 | $ | 9.270 | |||||||||||||
0.137 | 0.302 | 0.278 | 0.304 | 0.359 | 0.444 | |||||||||||||||||||
0.003 | 0.171 | (0.350 | ) | 0.396 | (0.033 | ) | 0.598 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
0.140 | 0.473 | (0.072 | ) | 0.700 | 0.326 | 1.042 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
(0.158 | ) | (0.343 | ) | (0.248 | ) | (0.346 | ) | (0.399 | ) | (0.474 | ) | |||||||||||||
(0.032 | ) | — | (0.089 | ) | (0.234 | ) | (0.367 | ) | (0.068 | ) | ||||||||||||||
— | — | (0.081 | ) | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
(0.190 | ) | (0.343 | ) | (0.418 | ) | (0.580 | ) | (0.766 | ) | (0.542 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 9.040 | $ | 9.090 | $ | 8.960 | $ | 9.450 | $ | 9.330 | $ | 9.770 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
1.56% | 5.25% | (0.66% | ) | 7.82% | 3.64% | 11.60% | ||||||||||||||||||
$ | 1,882,021 | $ | 2,048,203 | $ | 3,244,801 | $ | 4,890,056 | $ | 4,370,224 | $ | 4,423,278 | |||||||||||||
0.92% | 0.90% | 0.90% | 0.90% | 0.92% | 0.93% | |||||||||||||||||||
0.92% | 0.90% | 0.95% | 0.95% | 0.97% | 0.98% | |||||||||||||||||||
3.05% | 3.34% | 3.03% | 3.26% | 3.84% | 4.68% | |||||||||||||||||||
3.05% | 3.34% | 2.98% | 3.21% | 3.79% | 4.63% | |||||||||||||||||||
112% | 189% | 238% | 238% | 237% | 232% | |||||||||||||||||||
|
61
Table of Contents
Financial highlights
Delaware Diversified Income 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 |
Return of capital |
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 assets |
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 | The average shares outstanding method has been applied for per share information. |
3 | Total investment 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. |
See accompanying notes, which are an integral part of the financial statements.
62
Table of Contents
Six months ended 4/30/151 | Year ended | |||||||||||||||||||||||
(Unaudited) | 10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | |||||||||||||||||||
| ||||||||||||||||||||||||
$ | 9.090 | $ | 8.960 | $ | 9.450 | $ | 9.330 | $ | 9.760 | $ | 9.270 | |||||||||||||
0.103 | 0.234 | 0.209 | 0.234 | 0.289 | 0.373 | |||||||||||||||||||
0.003 | 0.172 | (0.349 | ) | 0.397 | (0.023 | ) | 0.588 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
0.106 | 0.406 | (0.140 | ) | 0.631 | 0.266 | 0.961 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
(0.124 | ) | (0.276 | ) | (0.197 | ) | (0.277 | ) | (0.329 | ) | (0.403 | ) | |||||||||||||
(0.032 | ) | — | (0.089 | ) | (0.234 | ) | (0.367 | ) | (0.068 | ) | ||||||||||||||
— | — | (0.064 | ) | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
(0.156 | ) | (0.276 | ) | (0.350 | ) | (0.511 | ) | (0.696 | ) | (0.471 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 9.040 | $ | 9.090 | $ | 8.960 | $ | 9.450 | $ | 9.330 | $ | 9.760 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
1.18% | 4.59% | (1.51% | ) | 7.01% | 2.98% | 10.65% | ||||||||||||||||||
$ | 1,119,864 | $ | 1,177,575 | $ | 1,471,553 | $ | 2,230,985 | $ | 2,012,603 | $ | 2,097,340 | |||||||||||||
1.67% | 1.65% | 1.65% | 1.65% | 1.67% | 1.68% | |||||||||||||||||||
2.30% | 2.59% | 2.28% | 2.51% | 3.09% | 3.93% | |||||||||||||||||||
112% | 189% | 238% | 238% | 237% | 232% | |||||||||||||||||||
|
63
Table of Contents
Financial highlights
Delaware Diversified Income 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 |
Return of capital |
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 assets |
Ratio of expenses to average net assets prior to fees waived |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
1 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
2 | The average shares outstanding method has been applied for per share information. |
3 | Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return during some of the periods shown reflects a waiver by the distributor. Performance would have been lower had the waiver not been in effect. |
See accompanying notes, which are an integral part of the financial statements.
64
Table of Contents
Six months ended 4/30/151 | Year ended | |||||||||||||||||||||||
(Unaudited) | 10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | |||||||||||||||||||
| ||||||||||||||||||||||||
$ | 9.090 | $ | 8.960 | $ | 9.450 | $ | 9.330 | $ | 9.760 | $ | 9.270 | |||||||||||||
0.125 | 0.279 | 0.255 | 0.280 | 0.336 | 0.420 | |||||||||||||||||||
0.003 | 0.171 | (0.350 | ) | 0.397 | (0.023 | ) | 0.589 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
0.128 | 0.450 | (0.095 | ) | 0.677 | 0.313 | 1.009 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
(0.146 | ) | (0.320 | ) | (0.231 | ) | (0.323 | ) | (0.376 | ) | (0.451 | ) | |||||||||||||
(0.032 | ) | — | (0.089 | ) | (0.234 | ) | (0.367 | ) | (0.068 | ) | ||||||||||||||
— | — | (0.075 | ) | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
(0.178 | ) | (0.320 | ) | (0.395 | ) | (0.557 | ) | (0.743 | ) | (0.519 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 9.040 | $ | 9.090 | $ | 8.960 | $ | 9.450 | $ | 9.330 | $ | 9.760 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
1.43% | 5.11% | (1.02% | ) | 7.55% | 3.49% | 11.33% | ||||||||||||||||||
$ | 116,540 | $ | 116,840 | $ | 124,586 | $ | 160,695 | $ | 146,620 | $ | 172,642 | |||||||||||||
1.17% | 1.15% | 1.15% | 1.15% | 1.17% | 1.18% | |||||||||||||||||||
1.17% | 1.15% | 1.24% | 1.25% | 1.27% | 1.28% | |||||||||||||||||||
2.80% | 3.09% | 2.78% | 3.01% | 3.59% | 4.43% | |||||||||||||||||||
2.80% | 3.09% | 2.69% | 2.91% | 3.49% | 4.33% | |||||||||||||||||||
112% | 189% | 238% | 238% | 237% | 232% |
65
Table of Contents
Financial highlights
Delaware Diversified Income 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 |
Return of capital |
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 assets |
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 | The average shares outstanding method has been applied for per share information. |
3 | Total investment 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. |
See accompanying notes, which are an integral part of the financial statements.
66
Table of Contents
Six months ended | ||||||||||||||||||||||||
4/30/151 | Year ended | |||||||||||||||||||||||
|
| |||||||||||||||||||||||
(Unaudited) | 10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | |||||||||||||||||||
| ||||||||||||||||||||||||
$ | 9.100 | $ | 8.970 | $ | 9.460 | $ | 9.340 | $ | 9.770 | $ | 9.280 | |||||||||||||
0.148 | 0.325 | 0.301 | 0.327 | 0.383 | 0.470 | |||||||||||||||||||
0.003 | 0.171 | (0.350 | ) | 0.397 | (0.023 | ) | 0.586 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
0.151 | 0.496 | (0.049 | ) | 0.724 | 0.360 | 1.056 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
(0.169 | ) | (0.366 | ) | (0.265 | ) | (0.370 | ) | (0.423 | ) | (0.498 | ) | |||||||||||||
(0.032 | ) | — | (0.089 | ) | (0.234 | ) | (0.367 | ) | (0.068 | ) | ||||||||||||||
— | — | (0.087 | ) | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
(0.201 | ) | (0.366 | ) | (0.441 | ) | (0.604 | ) | (0.790 | ) | (0.566 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 9.050 | $ | 9.100 | $ | 8.970 | $ | 9.460 | $ | 9.340 | $ | 9.770 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
1.68% | 5.63% | (0.52% | ) | 8.08% | 4.01% | 11.76% | ||||||||||||||||||
$ | 2,620,442 | $ | 2,394,335 | $ | 1,737,652 | $ | 2,238,906 | $ | 1,620,249 | $ | 1,242,001 | |||||||||||||
0.67% | 0.65% | 0.65% | 0.65% | 0.67% | 0.68% | |||||||||||||||||||
3.30% | 3.59% | 3.28% | 3.51% | 4.09% | 4.93% | |||||||||||||||||||
| 112%
|
|
| 189%
|
|
| 238%
|
|
| 238%
|
|
| 237%
|
|
| 232%
|
|
67
Table of Contents
Delaware Diversified Income Fund | April 30, 2015 (Unaudited) |
Delaware Group® Adviser Funds (Trust) is organized as a Delaware statutory trust and offers three series: Delaware Diversified Income Fund, Delaware Global Real Estate Opportunities Fund, and Delaware U.S. Growth Fund. These financial statements and related notes pertain to Delaware Diversified Income 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 4.50%. Class A share purchases of $1,000,000 or more will incur a contingent deferred sales charge (CDSC) of 1.00% if redeemed during the first year, and 0.50% during the second year, provided that Delaware Distributors, L.P. (DDLP) paid a financial advisor a commission on the purchase of those shares. Effective Sept. 25, 2014, all remaining shares of Class B were converted to Class A shares. Class C shares are sold with a CDSC of 1.00%, 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.
The investment objective of the Fund is to seek maximum long-term total return, consistent with reasonable risk.
1. Significant Accounting Policies
The following accounting policies are in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and are consistently followed by the Fund.
Security Valuation – Equity securities, except those traded on the Nasdaq Stock Market, Inc. (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. 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. U.S. government and agency securities are valued at the mean between the bid and ask prices, which approximates fair value. Other debt securities and credit default swap (CDS) 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. For asset-backed securities, collateralized mortgage obligations, commercial mortgage securities, and U.S. government agency mortgage securities, pricing vendors utilize matrix pricing which considers prepayment speed, attributes of the collateral, yield or price of bonds of comparable quality, coupon, maturity, and type as well as broker/dealer-supplied prices. 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. 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. Open-end investment company securities are valued at net asset value per share, as reported by the underlying investment company. Foreign currency exchange contracts and foreign cross currency exchange contracts are valued at the mean between the bid and ask prices, which approximates fair value. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available. Futures contracts are valued at the daily quoted settlement prices. Generally, other securities and assets for which market
68
Table of Contents
quotations are not readily available are valued at fair value as determined in good faith under the direction of the Fund’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-U.S. markets because, among other things, most foreign markets close well before the Fund values its securities, generally as of 4:00 p.m. 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. To account for this, the Fund may frequently value foreign securities using fair value prices based on third-party vendor modeling tools (international fair value pricing).
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 for all open federal income tax years (Oct. 31, 2011–Oct. 31, 2014), and has concluded that no provision for federal income tax is required in the Fund’s financial statements. In regard to foreign taxes only, the Fund has open tax years in certain foreign countries in which it invests in that may date back to the inception of the Fund.
Class Accounting – Investment income and common expenses are allocated to the various classes of the Fund on the basis of “settled shares” of each class in relation to the net assets of the Fund. 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.
Repurchase Agreements – The Fund may purchase certain U.S. government securities subject to the counterparty’s agreement to repurchase them at an agreed upon date and price. The counterparty will be required on a daily basis to maintain the value of the collateral subject to the agreement at not less than the repurchase price (including accrued interest). The agreements are conditioned upon the collateral being deposited under the Federal Reserve book-entry system with the Fund’s custodian or a third-party sub-custodian. In the event of default or bankruptcy by the other party to the agreement, retention of the collateral may be subject to legal proceedings. All open repurchase agreements as of the date of this report were entered into on April 30, 2015.
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
69
Table of Contents
Notes to financial statements
Delaware Diversified Income Fund
1. Significant Accounting Policies (continued)
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 U.S. dollars at the exchange rate of such currencies against the U.S. 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) is included on the “Statement of operations” under “Net realized gain (loss) on foreign currencies.” 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 Fund is an investment company with U.S. GAAP. Therefore, the Fund follows the accounting and reporting guidelines for investment companies. The preparation of financial statements in conformity with U.S. 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 Investments® Family of Funds are generally allocated among such funds on the basis of average net assets. Management fees and some 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. Realized gains (losses) on paydowns of asset- and mortgage-backed securities are classified as interest income. Withholding taxes and reclaims on foreign interest have been recorded in accordance with the Fund’s understanding of the applicable country’s tax rules and rates. The Fund may pay foreign capital gain taxes on certain foreign securities held, which are reported as components of realized losses for financial reporting purposes, whereas such components are treated as ordinary loss for federal income tax purposes. The Fund declares dividends daily from net investment income and pays the dividends monthly and declares and pays dividends 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.
70
Table of Contents
The Fund may receive 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 April 30, 2015.
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 one dollar, the expense paid under this arrangement is included on the “Statement of operations” under “Dividend disbursing and transfer agent fees and expenses” with the corresponding expense offset shown under “Less expense paid indirectly.” For the six months ended April 30, 2015, the Fund earned $868 under this agreement.
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 Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate of 0.55% on the first $500 million of the average daily net assets of the Fund; 0.50% on the next $500 million; 0.45% on the next $1.5 billion; and 0.425% on average daily net assets in excess $2.5 billion.
Delaware Investments Fund Services Company (DIFSC), an affiliate of DMC, provides fund accounting and financial administration oversight services to the Fund. For these services, DIFSC’s fees are calculated based on the aggregate daily net assets of the Delaware Investments® Family of Funds at the following annual rate: 0.0050% of the first $30 billion; 0.0045% of the next $10 billion; 0.0040% of the next $10 billion; and 0.0025% of aggregate average daily net assets in excess of $50 billion. The fees payable to DIFSC under the service agreement described above are allocated among all Funds in the Delaware Investments Family of Funds on a relative net asset value basis. For the six months ended April 30, 2015, the Fund was charged $135,730 for these services. This amount is included on the “Statement of operations” under “Accounting and administration expenses.”
DIFSC is the transfer agent and dividend disbursing agent of the Fund. For these services, DIFSC fees are calculated based on the aggregate daily net assets of the retail funds within the Delaware Investments Family of Funds at the following annual rate: 0.025% of the first $20 billion; 0.020% of the next $5 billion; 0.015% of the next $5 billion; and 0.013% of average daily net assets in excess of $30 billion. The fees payable to DIFSC under the service agreement described above are allocated among all retail funds in the Delaware Investments Family of Funds on a relative net asset value basis. This amount is included on the “Statement of operations” under “Dividend disbursing and transfer agent fees and expenses.” For the six months ended April 30, 2015, the Fund was charged $596,817 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 passed on to and paid directly by the Fund.
Pursuant to a distribution agreement and distribution plan, the Fund pays DDLP, the distributor and an affiliate of DMC, an annual distribution and service fee of 0.25% of the average daily net assets of the Class A shares, 1.00% of the average daily net assets of the Class C shares, and 0.50% of the average daily net assets of the Class R shares. Institutional Class shares pay no distribution and service fee.
71
Table of Contents
Notes to financial statements
Delaware Diversified Income Fund
2. Investment Management, Administration Agreements, and Other Transactions with Affiliates (continued)
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 affiliated that provide legal, tax, and regulatory reporting services to the Fund. For the six months ended April 30, 2015, the Fund was charged $83,666 for internal legal, tax, and regulatory reporting services provided by DMC and/or its affiliates’ employees. This amount is included on the “Statement of operations” under “Legal fees.”
For the six months ended April 30, 2015, DDLP earned $34,806 for commissions on sales of the Fund’s Class A shares. For the six months ended April 30, 2015, DDLP received gross CDSC commissions of $1,495 and $4,247 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.
3. Investments
For the six months ended April 30, 2015, the Fund made purchases and sales of investment securities other than short-term investments as follows:
Purchases other than U.S. government securities | $5,443,653,945 | |||
Purchases of U.S. government securities | 954,554,683 | |||
Sales other than U.S. government securities | 5,355,262,741 | |||
Sales of U.S. government securities | 994,603,411 |
At April 30, 2015, the cost of investments for federal income tax purposes has been estimated since final tax characteristics cannot be determined until fiscal year end. At April 30, 2015, the cost of investments and unrealized appreciation (depreciation) were as follows:
Cost of investments | $ | 5,768,753,356 | ||
|
| |||
Aggregate unrealized appreciation | $ | 143,979,452 | ||
Aggregate unrealized depreciation | (65,525,302 | ) | ||
|
| |||
Net unrealized appreciation | $ | 78,454,150 | ||
|
|
U.S. 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
72
Table of Contents
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 below.
Level 1 – | Inputs are quoted prices in active markets for identical investments. (Examples: equity securities, open-end investment companies, futures contracts, 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, 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, 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 April 30, 2015:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Agency, Asset- & Mortgage- Backed Securities | $ | — | $ | 1,504,820,880 | $ | — | $ | 1,504,820,880 | ||||||||
Corporate Debt | — | 2,946,069,288 | — | 2,946,069,288 | ||||||||||||
Municipal Bonds | — | 64,150,124 | — | 64,150,124 | ||||||||||||
Foreign Debt | — | 232,677,408 | — | 232,677,408 | ||||||||||||
Senior Secured Loans1 | — | 653,837,859 | 11,427,000 | 665,264,859 | ||||||||||||
U.S. Treasury Obligations | — | 86,562,653 | — | 86,562,653 | ||||||||||||
Common Stock | 2,340,870 | — | — | 2,340,870 | ||||||||||||
Convertible Preferred Stock1 | 19,049,685 | 6,141,127 | — | 25,190,812 | ||||||||||||
Preferred Stock1 | 19,648,866 | 11,745,846 | — | 31,394,712 | ||||||||||||
Short-Term Investments | — | 288,735,900 | — | 288,735,900 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 41,039,421 | $ | 5,794,741,085 | $ | 11,427,000 | $ | 5,847,207,506 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Foreign Currency Exchange Contracts | $ | — | $ | (947,003 | ) | $ | — | $ | (947,003 | ) | ||||||
Futures Contracts | 1,693,305 | — | — | 1,693,305 |
73
Table of Contents
Notes to financial statements
Delaware Diversified Income Fund
3. Investments (continued)
The securities that have been deemed worthless on the “Schedule of investments” are considered to be Level 3 investments in this table.
1Security type is valued across multiple levels. Level 1 investments represent exchange-traded investments, Level 2 investments represent investments with observable input or matrix-price investments, and Level 3 investments represent investments without observable inputs. The amounts attributed to Level 1 investments, Level 2 investments, and Level 3 investments represent the following percentages of the total value of these security types:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Senior Secured Loans | — | 98.28 | % | 1.72 | % | 100.00 | % | |||||||||||||
Convertible Preferred Stock | 75.62 | % | 24.38 | % | — | 100.00 | % | |||||||||||||
Preferred Stock | 62.59 | % | 37.41 | % | — | 100.00 | % |
During the six months ended April 30, 2015, there were no transfers between Level 1 investments and Level 2 investments that had a significant impact to the Fund. During the six months ended April 30, 2015, transfers out of Level 3 investments into Level 2 investments were made in the amount of $10,193,246 for the Fund. The transfer was due to the Fund’s pricing vendor being able to supply a matrix price for an investment that had been utilizing a broker quoted price. The Fund’s policy is to recognize transfers between levels at the beginning of the reporting period.
A reconciliation of Level 3 investments is presented when the Fund has a significant amount of Level 3 investments at the beginning, interim, or end of the period in relation to net assets. Management has determined not to provide additional disclosure on Level 3 inputs since the Level 3 investments are not considered significant to the Fund’s net assets at the end of the period.
74
Table of Contents
4. Capital Shares
Transactions in capital shares were as follows:
Six months | ||||||||
ended | Year ended | |||||||
4/30/15 | 10/31/14 | |||||||
Shares sold: | ||||||||
Class A | 27,108,932 | 45,331,754 | ||||||
Class B | — | 1,174 | ||||||
Class C | 5,324,851 | 10,145,095 | ||||||
Class R | 1,987,835 | 4,543,927 | ||||||
Institutional Class | 54,603,398 | 146,809,977 | ||||||
Shares issued upon reinvestment of dividends and distributions: | ||||||||
Class A | 4,493,174 | 10,982,199 | ||||||
Class B | — | 20,489 | ||||||
Class C | 2,024,429 | 3,899,038 | ||||||
Class R | 255,970 | 470,459 | ||||||
Institutional Class | 5,825,327 | 7,350,511 | ||||||
|
|
|
| |||||
101,623,916 | 229,554,623 | |||||||
|
|
|
| |||||
Shares redeemed: | ||||||||
Class A | (48,738,003 | ) | (192,953,742 | ) | ||||
Class B | — | (1,076,611 | ) | |||||
Class C | (13,015,372 | ) | (48,662,025 | ) | ||||
Class R | (2,205,728 | ) | (6,059,471 | ) | ||||
Institutional Class | (33,977,627 | ) | (84,668,441 | ) | ||||
|
|
|
| |||||
(97,936,730 | ) | (333,420,290 | ) | |||||
|
|
|
| |||||
Net increase (decrease) | 3,687,186 | (103,865,667 | ) | |||||
|
|
|
|
For the year ended Oct. 31, 2014, 152,636 Class B shares were converted to 152,495 Class A shares valued at $1,378,560. The amounts are included in Class B redemptions and Class A subscriptions in the table above and the “Statements of changes in net assets.”
Certain shareholders of Class A and Class C shares may exchange their shares for Institutional Class shares. For the six months ended April 30, 2015, 243,519 Class A shares and 15,594 Class C shares were exchanged to 259,458 Institutional Class shares valued at $2,346,162. These exchange transactions are included as subscriptions and redemptions in the table above and the “Statements of changes in net assets.”
5. Line of Credit
The Fund, along with certain other funds in the Delaware Investments® Family of Funds (Participants), was a participant in a $225,000,000 revolving line of credit to be used for temporary or emergency
75
Table of Contents
Notes to financial statements
Delaware Diversified Income Fund
5. Line of Credit (continued)
purposes as an additional source of liquidity to fund redemptions of investor shares. Under the agreement, the Participants were charged an annual commitment fee of 0.08%, which was allocated across the Participants on the basis of each Participant’s allocation of the entire facility. The Participants were permitted to borrow up to a maximum of one third of their net assets under the agreement. Each Participant was individually, and not jointly, liable for its particular advances, if any, under the line of credit. The line of credit under the agreement expired on Nov. 10, 2014.
On Nov. 10, 2014, the Fund, along with the other Participants, entered into an amendment to the agreement for a $275,000,000 revolving line of credit. The line of credit is to be used as described above and operates in substantially the same manner as the agreement described above. The line of credit available under the agreement expires on Nov. 9, 2015.
The Fund had no amounts outstanding as of April 30, 2015, or at any time during the period then ended.
6. Derivatives
U.S. 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 U.S. 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 use these contracts to hedge the U.S. dollar value of securities it already owns that are denominated in foreign currencies. In addition, the Fund may enter into these contracts to facilitate or expedite the settlement of portfolio transactions. The change in value is recorded as an unrealized gain or loss. When the contract is closed, a realized gain or loss is recorded equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
The use of foreign currency exchange contracts and foreign cross currency exchange contracts does not eliminate fluctuations in the underlying prices of the securities, but does establish a rate of exchange that can be achieved in the future. Although foreign currency exchange contracts and foreign cross currency exchange contracts limit the risk of loss due to an unfavorable change in the value of the hedged currency, they also limit any potential gain that might result should the value of the currency change favorably. In addition, the Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. The Fund’s maximum risk of loss from counterparty credit risk is the value of its currency exchanged with the counterparty. The risk is generally mitigated by having a netting arrangement between the Fund and the counterparty and by the posting of collateral by the counterparty to the Fund to cover the Fund’s exposure to the counterparty. At April 30, 2015, the Fund posted $2,850,000 and received $120,000 in cash as collateral for certain open foreign currency exchange contracts, which is presented on the “Statement of Assets and Liabilities” as “Cash collateral due from brokers” and “Cash collateral due to brokers”, respectively.
76
Table of Contents
During the six months ended April 30, 2015, the Fund used foreign currency exchange contracts to hedge the U.S. dollar value of securities it already owns that are denominated in 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 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 fair value caused by changes in interest rates, or market conditions. Upon entering into a futures contract, the Fund deposits cash or pledges U.S. 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. The fund posted $3,320,795 in securities collateral as margin for certain open futures contracts.
During the six months ended April 30, 2015, the Fund used futures contracts to hedge the Fund’s existing portfolio securities against fluctuations in value caused by changes in interest rates or market conditions.
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. The Fund will not be permitted to enter into any swap transactions unless, at the time of entering into such transactions, the unsecured long-term debt of the actual counterparty, combined with any credit enhancements, is rated at least BBB- by Standard & Poor’s Financial Services LLC. (S&P) or Baa3 by Moody’s Investors Service Inc. (Moody’s) or is determined to be of equivalent credit quality by DMC.
Credit Default Swaps. A CDS contract is a risk-transfer instrument through which one party (purchaser of protection) transfers to another party (seller of protection) the financial risk of a credit event (as defined in the CDS agreement), as it relates to a particular reference security or basket of securities (such as an index). In exchange for the protection offered by the seller of protection, the purchaser of protection agrees to pay the seller of protection a periodic amount at a stated rate that is applied to the notional 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.
77
Table of Contents
Notes to financial statements
Delaware Diversified Income Fund
6. Derivatives (continued)
During the six months ended April 30, 2015, 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 is posted to central counterparties for central cleared CDS basket trades, as determined by the applicable central counterparty.
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 or (2) for cleared swaps, trading these instruments through a central counterparty.
Swaps Generally. The value of open swaps may differ from that which would be realized in the event the Fund terminated its position in the contract on a given day. Risks of entering into these contracts include the potential inability of the counterparty to meet the terms of the contracts. This type of risk is generally limited to the amount of favorable movement in the value of the underlying security, instrument, or basket of instruments, if any, at the day of default. Risks also arise from potential losses from adverse market movements and such losses could exceed the unrealized amounts.
At April 30, 2015, the Fund had no swap contracts outstanding.
During the six months ended April 30, 2015, the Fund used CDS contracts to hedge against credit events.
78
Table of Contents
Fair values of derivative instruments as of April 30, 2015 were as follows:
Asset Derivatives | Liability Derivatives | |||||||||||
Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | |||||||||
Forward currency exchange contracts (Foreign currency exchange contracts) | Unrealized appreciation of foreign currency exchange contracts | $ | 49,066 | Unrealized depreciation of foreign currency exchange contracts | $ | (996,069 | ) | |||||
Interest rate contracts (Futures contracts) | Variation margin due from broker on futures contracts | 1,693,305 | * | Variation margin due from broker on futures contracts | — | * | ||||||
|
|
|
| |||||||||
Total | $ | 1,742,371 | $ | (996,069 | ) | |||||||
|
|
|
|
*Includes cumulative appreciation (depreciation) of futures contracts from the date the contracts are opened through April 30, 2015. Only current day variation margin is reported on the “Statement of assets and liabilities.”
79
Table of Contents
Notes to financial statements
Delaware Diversified Income Fund
6. Derivatives (continued)
The effect of derivative instruments on the “Statement of operations” for the six months ended April 30, 2015 was as follows:
Net Realized Gain (Loss) on: | ||||||||||||||||
Foreign Currency Exchange Contracts | Futures Contracts | Swap Contracts | Total | |||||||||||||
Forward currency exchange contracts | $ | 5,563,978 | $ | — | $ | — | $ | 5,563,978 | ||||||||
Interest rate contracts | — | 5,208,465 | — | 5,208,465 | ||||||||||||
Credit contracts | — | — | (244,258 | ) | (244,258 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 5,563,978 | $ | 5,208,465 | $ | (244,258 | ) | $ | 10,528,185 | |||||||
|
|
|
|
|
|
|
|
Net Change in Unrealized Appreciation (Depreciation) of: | ||||||||||||||||
Foreign Currency Exchange Contracts | Futures Contracts | Swap Contracts | Total | |||||||||||||
Forward currency exchange contracts | $ | (1,376,274 | ) | $ | — | $ | — | $ | (1,376,274 | ) | ||||||
Interest rate contracts | — | 648,765 | — | 648,765 | ||||||||||||
Credit contracts | — | — | 154,023 | 154,023 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | (1,376,274 | ) | $ | 648,765 | $ | 154,023 | $ | (573,486 | ) | ||||||
|
|
|
|
|
|
|
|
Derivatives Generally. The table below summarizes the average balance of derivative holdings by the Fund during the six months ended April 30, 2015.
Long Derivative Volume | Short Derivative Volume | |||||||
Foreign currency exchange contracts (average cost) | USD | 59,859,848 | USD | 156,978,551 | ||||
Futures contracts (average notional value) | 390,419,337 | 155,029,719 | ||||||
CDS contracts (average notional value)* | USD | 2,463,089 | — |
*Long represents buying protection and short represents selling protection.
7. Offsetting
In December 2011, the Financial Accounting Standards Board (FASB) issued guidance that expands disclosure requirements on the offsetting of certain assets and liabilities. The disclosures are required for investments and derivative financial instruments subject to master netting or similar agreements which are eligible for offset on the “Statement of assets and liabilities” and require an entity to disclose both gross and net information about such investments and transactions in the financial statements. In January 2013, the FASB issued guidance that clarifies which investments and transactions are subject to the offsetting disclosure requirements. The scope of the disclosure requirements for offsetting is limited to derivative instruments, repurchase agreements and reverse repurchase agreements, and securities
80
Table of Contents
borrowing. The guidance is effective for financial statements with fiscal years beginning on or after Jan. 1, 2013, and interim periods within those fiscal years.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund entered into an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement) or a similar agreement with each of its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs certain over-the-counter (OTC) derivatives and foreign exchange contracts and typically contains, among other things, collateral posting items and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default (close-out) including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy, insolvency, or other events.
For financial reporting purposes, the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements on the “Statement of assets and liabilities.”
At April 30, 2015, the Fund had the following assets and liabilities subject to offsetting provisions:
Offsetting of Financial Assets and Liabilities and Derivative Assets and Liabilities
Counterparty | Gross Value of Derivative Asset | Gross Value of Derivative Liability | Net Position | ||||||||||||
Bank of America Merrill Lynch | $ | — | $ | (385,785 | ) | $ | (385,785 | ) | |||||||
BNP Paribas | — | (148,184 | ) | (148,184 | ) | ||||||||||
BNY Mellon | — | (86,428 | ) | (86,428 | ) | ||||||||||
Deutsche Bank | — | (5,002 | ) | (5,002 | ) | ||||||||||
Hong Kong Shanghai Bank | — | (98,910 | ) | (98,910 | ) | ||||||||||
JPMorgan Chase Bank | 39,724 | (236,107 | ) | (196,383 | ) | ||||||||||
Toronto Dominion Bank | 9,342 | (4,627 | ) | 4,715 | |||||||||||
Union Bank of Switzerland | — | (31,026 | ) | (31,026 | ) | ||||||||||
|
|
|
|
|
| ||||||||||
Total | $ | 49,066 | $ | (996,069 | ) | $ | (947,003 | ) | |||||||
|
|
|
|
|
|
81
Table of Contents
Notes to financial statements
Delaware Diversified Income Fund
7. Offsetting (continued)
Offsetting of Financial Assets and Liabilities and Derivative Assets and Liabilities (continued)
Counterparty | Net Position | Fair Value of Non-Cash | Cash Collateral Received | Fair Value of Non-Cash | Cash | Net Amount(a) | ||||||||||||||||||||||||
Bank of America Merrill Lynch | $ | (385,785 | ) | $ | — | $ | — | $ | — | $ | 385,785 | $ | — | |||||||||||||||||
BNP Paribas | (148,184 | ) | — | — | — | 120,000 | (28,184 | ) | ||||||||||||||||||||||
BNY Mellon | (86,428 | ) | — | — | — | — | (86,428 | ) | ||||||||||||||||||||||
Deutsche Bank | (5,002 | ) | — | — | — | 5,002 | — | |||||||||||||||||||||||
Hong Kong Shanghai Bank | (98,910 | ) | — | — | — | 98,910 | — | |||||||||||||||||||||||
JPMorgan Chase Bank | (196,383 | ) | — | — | — | 196,383 | — | |||||||||||||||||||||||
Toronto Dominion Bank | 4,715 | — | — | — | — | 4,715 | ||||||||||||||||||||||||
Union Bank of Switzerland | (31,026 | ) | — | — | — | — | (31,026 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total | $ | (947,003 | ) | $ | — | $ | — | $ | — | $ | 806,080 | $ | (140,923 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Master Repurchase Agreements
Counterparty | Repurchase | Fair Value of Non-Cash | Cash Collateral Received | Net Amount(a) | ||||||||||||||||
Bank of America Merrill Lynch | $ | 50,604,110 | $ | (50,604,110 | ) | $ | — | $ | — | |||||||||||
Bank of Montreal | 42,170,091 | (42,170,091 | ) | — | — | |||||||||||||||
BNP Paribas | 49,963,799 | (49,963,799 | ) | — | — | |||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 142,738,000 | $ | (142,738,000 | ) | $ | — | $ | — | |||||||||||
|
|
|
|
|
|
|
|
(a)Net amount 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 Investments® Family of 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 U.S. securities and foreign securities that are denominated and payable in U.S. 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 request of the borrower, BNY
82
Table of Contents
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.
Cash collateral received is generally invested in the Delaware Investments® Collateral Fund No. 1 (Collective Trust) established by BNY Mellon for the purpose of investment on behalf of funds managed by DMC that participate in BNY Mellon’s securities lending program. The Collective Trust may invest in U.S. government securities and high-quality corporate debt, asset-backed and other money market securities, and in repurchase agreements collateralized by such securities, provided that the Collective Trust will generally have a dollar-weighted average portfolio maturity of 60 days or less. The Fund can also accept U.S. 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 Collective Trust used for the investment of cash collateral received from borrowers of securities seeks to maintain a net asset value per unit of $1.00, but there can be no assurance that it will always be able to do so. The Fund may incur investment losses as a result of investing securities lending collateral in the Collective Trust. This could occur if an investment in a Collective Trust defaulted or if it were necessary to liquidate assets in the Collective Trust to meet returns on outstanding security loans at a time when the Collective Trust’s net asset value per unit was less than $1.00. Under those circumstances, the Fund may not receive an amount from the Collective Trust that is equal in amount to the collateral the Fund would be required to return to the borrower of the securities and the Fund would be required to make up for this shortfall.
At the six months ended April 30, 2015, the Fund had no securities on loan.
9. Credit and Market Risk
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 or consumer loans are paid back. Some of these securities are collateralized mortgage obligations (CMOs). CMOs are debt securities issued by U.S. government
83
Table of Contents
Notes to financial statements
Delaware Diversified Income Fund
8. Credit and Market Risk (continued)
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 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.
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 United States. Consequently, acquisition and disposition of securities by the Fund may be inhibited. In addition, a significant portion of the aggregate market value of 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 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 them 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
84
Table of Contents
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.
As the Fund may be required to rely upon another lending institution to collect and pass on to the Fund amounts payable with respect to the loan and to enforce the Fund’s rights under the loan and other direct indebtedness, an insolvency, bankruptcy, or reorganization of the lending institution may delay or prevent the Fund from receiving such amounts. The highly leveraged nature of many loans may make them especially vulnerable to adverse changes in economic or market conditions. Investments in such loans and other direct indebtedness may involve additional risk to the Fund.
The Fund may invest up to 15% of its net assets in illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A promulgated under the Securities Act of 1933, as amended, and other securities which may not be readily marketable. The relative illiquidity of these securities may impair the Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, the Fund’s 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 illiquid securities 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 June 2014, the Financial Accounting Standards Board issued guidance to improve the financial reporting of reverse repurchase agreements and other similar transactions. The guidance includes expanded disclosure requirements for entities that enter into reverse repurchase agreements and similar transactions accounted for as secured borrowings. The guidance is effective for financial statements with fiscal years beginning on or after Dec. 15, 2014 and interim periods within those fiscal years. Management has determined that this pronouncement has no impact to the Fund’s financial statements.
12. Subsequent Events
Management has determined that no material events or transactions occurred subsequent to April 30, 2015 that would require recognition or disclosure in the Fund’s financial statements.
85
Table of Contents
Other Fund information (Unaudited)
Delaware Diversified Income Fund
Proxy Results
At Joint Special Meetings of Shareholders of Delaware Group® Adviser Funds (the “Trust”), on behalf of Delaware Diversified Income Fund, Delaware Global Real Estate Opportunities Fund, and Delaware U.S. Growth Fund (each, a “Fund” and together, the “Funds”), held on March 31, 2015 and reconvened to April 21, 2015 and May 12, 2015 for the proposals listed in items (ii) and (iii) below for Delaware Diversified Income Fund, the shareholders of the Trust/the Funds voted to: (i) elect a Board of Trustees for the Trust; (ii) approve the implementation of a new “manager of managers” order for the Funds; (iii) revise the fundamental investment restriction relating to lending for the Funds; and (iv)(a) revise provisions of the Trust’s Agreement and Declaration of Trust related to documenting the transfer of shares, (iv)(b) revise provisions of the Trust’s Agreement and Declaration of Trust related to shareholder disclosure of certain information upon board demand, and (iv)(c) revise provisions of the Trust’s By-Laws so that Delaware law will apply to matters related to proxies. At the meeting, the following people were elected to serve as Independent Trustees: Thomas L. Bennett, Ann D. Borowiec, Joseph W. Chow, John A. Fry, Lucinda S. Landreth, Frances A. Sevilla-Sacasa, Thomas K. Whitford, Janet L. Yeomans, and J. Richard Zecher. In addition, Patrick P. Coyne was elected to serve as an Interested Trustee.
The following proposals were submitted for a vote of the shareholders:
1. To elect a Board of Trustees for the Trust.
A quorum of shares outstanding of the Funds of the Trust was present, and the votes passed with a plurality of these Shares.
Shares Voted For | % of Outstanding Shares | % of Shares Voted | Shares Withheld | % of Outstanding Shares | % of Shares Voted | |||||||||||||||||||||||||
Thomas L. Bennett | 377,368,701.625 | 48.448 | % | 98.301 | % | 6,520,382.325 | 0.837 | % | 1.699 | % | ||||||||||||||||||||
Ann D. Borowiec | 377,497,661.478 | 48.464 | % | 98.335 | % | 6,391,422.472 | 0.821 | % | 1.665 | % | ||||||||||||||||||||
Joseph W. Chow | 377,534,720.702 | 48.469 | % | 98.345 | % | 6,354,363.248 | 0.816 | % | 1.655 | % | ||||||||||||||||||||
Patrick P. Coyne | 377,414,270.764 | 48.453 | % | 98.313 | % | 6,474,813.186 | 0.831 | % | 1.687 | % | ||||||||||||||||||||
John A. Fry | 377,491,073.066 | 48.463 | % | 98.333 | % | 6,398,010.884 | 0.821 | % | 1.667 | % | ||||||||||||||||||||
Lucinda S. Landreth | 377,396,976.901 | 48.451 | % | 98.309 | % | 6,492,107.049 | 0.833 | % | 1.691 | % | ||||||||||||||||||||
Frances A. Sevilla-Sacasa | 377,431,097.052 | 48.456 | % | 98.318 | % | 6,457,986.898 | 0.829 | % | 1.682 | % | ||||||||||||||||||||
Thomas K. Whitford | 377,574,025.766 | 48.474 | % | 98.355 | % | 6,315,058.184 | 0.811 | % | 1.645 | % | ||||||||||||||||||||
Janet L. Yeomans | 377,532,727.906 | 48.469 | % | 98.344 | % | 6,356,356.044 | 0.816 | % | 1.656 | % | ||||||||||||||||||||
J. Richard Zecher | 377,320,103.052 | 48.441 | % | 98.289 | % | 6,568,980.898 | 0.843 | % | 1.711 | % |
86
Table of Contents
2. To approve the implementation of a new “manager of managers” order.
A quorum of the shares outstanding of each Fund was present, and the votes passed with the required majority of those shares. The results were as follows:
Delaware Diversified Income Fund
Shares voted for | 237,724,523.189 | |||
Percentage of outstanding shares | 37.202 | % | ||
Percentage of shares voted | 72.243 | % | ||
Shares voted against | 11,256,121.007 | |||
Percentage of outstanding shares | 1.761 | % | ||
Percentage of shares voted | 3.421 | % | ||
Shares abstained | 8,367,609.174 | |||
Percentage of outstanding shares | 1.309 | % | ||
Percentage of shares voted | 2.543 | % | ||
Broker non-votes | 71,712,447.899 | |||
Delaware Global Real Estate Opportunities Fund | ||||
Shares voted for | 6,077,891.020 | |||
Percentage of outstanding shares | 80.832 | % | ||
Percentage of shares voted | 82.280 | % | ||
Shares voted against | 11,008.448 | |||
Percentage of outstanding shares | 0.146 | % | ||
Percentage of shares voted | 0.149 | % | ||
Shares abstained | 31,761.948 | |||
Percentage of outstanding shares | 0.422 | % | ||
Percentage of shares voted | 0.430 | % | ||
Broker non-votes | 1,266,215.000 | |||
Delaware U.S. Growth Fund | ||||
Shares voted for | 63,584,366.207 | |||
Percentage of outstanding shares | 48.028 | % | ||
Percentage of shares voted | 79.302 | % | ||
Shares voted against | 2,815,123.196 | |||
Percentage of outstanding shares | 2.126 | % | ||
Percentage of shares voted | 3.511 | % | ||
Shares abstained | 310,995.891 | |||
Percentage of outstanding shares | 0.235 | % | ||
Percentage of shares voted | 0.388 | % | ||
Broker non-votes | 13,469,786.000 |
87
Table of Contents
Other Fund information (Unaudited)
Delaware Diversified Income Fund
Proxy Results (continued)
3. To revise the fundamental investment restriction relating to lending.
A quorum of the shares outstanding of each Fund was present, and the votes passed with the required majority of those shares. The results were as follows:
Delaware Diversified Income Fund
Shares voted for | 236,542,353.523 | |||
Percentage of outstanding shares | 37.017 | % | ||
Percentage of shares voted | 71.884 | % | ||
Shares voted against | 11,721,375.093 | |||
Percentage of outstanding shares | 1.834 | % | ||
Percentage of shares voted | 3.562 | % | ||
Shares abstained | 9,084,523.754 | |||
Percentage of outstanding shares | 1.422 | % | ||
Percentage of shares voted | 2.761 | % | ||
Broker non-votes | 71,712,448.899 | |||
Delaware Global Real Estate Opportunities Fund | ||||
Shares voted for | 6,085,238.221 | |||
Percentage of outstanding shares | 80.929 | % | ||
Percentage of shares voted | 82.379 | % | ||
Shares voted against | 25,022.195 | |||
Percentage of outstanding shares | 0.333 | % | ||
Percentage of shares voted | 0.339 | % | ||
Shares abstained | 10,402.000 | |||
Percentage of outstanding shares | 0.138 | % | ||
Percentage of shares voted | 0.141 | % | ||
Broker non-votes | 1,266,214.000 | |||
Delaware U.S. Growth Fund | ||||
Shares voted for | 66,013,088.616 | |||
Percentage of outstanding shares | 49.862 | % | ||
Percentage of shares voted | 82.331 | % | ||
Shares voted against | 361,043.749 | |||
Percentage of outstanding shares | 0.273 | % | ||
Percentage of shares voted | 0.450 | % | ||
Shares abstained | 336,348.929 | |||
Percentage of outstanding shares | 0.254 | % | ||
Percentage of shares voted | 0.419 | % | ||
Broker non-votes | 13,469,790.000 |
88
Table of Contents
4. (a) To revise provisions of the Trust’s Agreement and Declaration of Trust related to documenting the transfer of shares.
A quorum of the shares outstanding of the Trust was present, and the votes passed with a majority of those shares. The results were as follows:
Delaware Group® Adviser Funds
Shares voted for | 276,841,786.289 | |||
Percentage of outstanding shares | 35.542 | % | ||
Percentage of shares voted | 72.115 | % | ||
Shares voted against | 5,466,797.899 | |||
Percentage of outstanding shares | 0.702 | % | ||
Percentage of shares voted | 1.424 | % | ||
Shares abstained | 6,966,088.763 | |||
Percentage of outstanding shares | 0.894 | % | ||
Percentage of shares voted | 1.815 | % | ||
Broker non-votes | 94,614,410.999 |
4. (b) To revise provisions of the Trust’s Agreement and Declaration of Trust related to shareholder disclosure of certain information upon board demand.
A quorum of the shares outstanding of the Trust was present, and the votes passed with a majority of those shares. The results were as follows:
Delaware Group Adviser Funds
Shares voted for | 276,183,863.480 | |||
Percentage of outstanding shares | 35.457 | % | ||
Percentage of shares voted | 71.944 | % | ||
Shares voted against | 6,322,961.795 | |||
Percentage of outstanding shares | 0.812 | % | ||
Percentage of shares voted | 1.647 | % | ||
Shares abstained | 6,767,846.676 | |||
Percentage of outstanding shares | 0.869 | % | ||
Percentage of shares voted | 1.763 | % | ||
Broker non-votes | 94,614,411.999 |
89
Table of Contents
Other Fund information (Unaudited)
Delaware Diversified Income Fund
Proxy Results (continued)
4. (c) To revise provisions of the Trust’s By-Laws so that Delaware law will apply to matters related to proxies.
A quorum of the shares outstanding of the Trust was present, and the votes passed with a majority of those shares. The results were as follows:
Delaware Group® Adviser Funds
Shares voted for | 277,825,824.039 | |||
Percentage of outstanding shares | 35.668 | % | ||
Percentage of shares voted | 72.371 | % | ||
Shares voted against | 5,038,256.207 | |||
Percentage of outstanding shares | 0.647 | % | ||
Percentage of shares voted | 1.312 | % | ||
Shares abstained | 6,410,588.705 | |||
Percentage of outstanding shares | 0.823 | % | ||
Percentage of shares voted | 1.670 | % | ||
Broker non-votes | 94,614,414.999 |
90
Table of Contents
Board of trustees | ||||||
Thomas L. Bennett | Joseph W. Chow | Lucinda S. Landreth | Thomas K. Whitford | |||
Chairman of the Board | Former Executive Vice | Former Chief Investment | Former Vice Chairman | |||
Delaware Investments® | President | Officer | PNC Financial Services Group | |||
Family of Funds | State Street Corporation | Assurant, Inc. | Pittsburgh, PA | |||
Private Investor | Brookline, MA | New York, NY | ||||
Rosemont, PA | Janet L. Yeomans | |||||
John A. Fry | Frances A. | Former Vice President and | ||||
Ann D. Borowiec | President | Sevilla-Sacasa | Treasurer | |||
Former Chief Executive | Drexel University | Chief Executive Officer | 3M Corporation | |||
Officer | Philadelphia, PA | Banco Itaú | St. Paul, MN | |||
Private Wealth Management J.P. Morgan Chase & Co. New York, NY | International Miami, FL |
J. Richard Zecher | ||||
Founder | ||||||
Investor Analytics | ||||||
Scottsdale, AZ | ||||||
Affiliated officers | ||||||
Roger A. Early | David F. Connor | Daniel V. Geatens | Richard Salus | |||
President and | Senior Vice President, | Vice President and | Senior Vice President and | |||
Chief Executive Officer | General Counsel, | Treasurer | Chief Financial Officer | |||
Delaware Investments | and Secretary | Delaware Investments | Delaware Investments | |||
Family of Funds | Delaware Investments | Family of Funds | Family of Funds | |||
Philadelphia, PA | Family of Funds | Philadelphia, PA | Philadelphia, PA | |||
Philadelphia, PA |
This semiannual report is for the information of Delaware Diversified Income Fund shareholders, but it may be used with prospective investors when preceded or accompanied by the Delaware Investments Fund fact sheet for the most recently completed calendar quarter. These documents are available at delawareinvestments.com.
Delaware Investments is the marketing name of Delaware Management Holdings, Inc. and its subsidiaries.
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-Q. The Fund’s Forms N-Q, 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-Q are available without charge on the Fund’s website at delawareinvestments.com. The Fund’s Forms N-Q 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 delawareinvestments.com; and (ii) on the SEC’s website at sec.gov.
91
Table of Contents
Semiannual report
Alternative / specialty mutual fund
Delaware Global Real Estate Opportunities Fund
April 30, 2015
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 delawareinvestments.com 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 delawareinvestments.com/edelivery.
Table of Contents
Experience Delaware Investments
Delaware Investments is committed to the pursuit of consistently superior asset management and unparalleled client service. We believe in our investment processes, which seek to deliver consistent results, and in convenient services that help add value for our clients.
If you are interested in learning more about creating an investment plan, contact your financial advisor.
You can learn more about Delaware Investments or obtain a prospectus for Delaware Global Real Estate Opportunities Fund at delawareinvestments.com.
Manage your investments online
● | 24-hour access to your account information |
● | Obtain share prices |
● | Check your account balance and recent transactions |
● | Request statements or literature |
● | Make purchases and redemptions |
Delaware Management Holdings, Inc. and its subsidiaries (collectively known by the marketing name of Delaware Investments) are wholly owned subsidiaries of Macquarie Group Limited, a global provider of banking, financial, advisory, investment and funds management services.
Investments in Delaware Global Real Estate Opportunities Fund are not and will not be deposits with or liabilities of Macquarie Bank Limited ABN 46 008 583 542 and its holding companies, including their subsidiaries or related companies (Macquarie Group), and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. No Macquarie Group company guarantees or will guarantee the performance of the Fund, the repayment of capital from the Fund, or any particular rate of return.
Table of contents | ||||
1 | ||||
3 | ||||
4 | ||||
9 | ||||
11 | ||||
12 | ||||
14 | ||||
22 | ||||
35 | ||||
40 |
Unless otherwise noted, views expressed herein are current as of April 30, 2015, and subject to change for events occurring after such date.
Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested.
Mutual fund advisory services provided by Delaware Management Company, a series of Delaware Management Business Trust, which is a registered investment advisor. Delaware Investments, a member of Macquarie Group, refers to Delaware Management Holdings, Inc. and its subsidiaries, including the Fund’s distributor, Delaware Distributors, L.P. Macquarie Group refers to Macquarie Group Limited and its subsidiaries and affiliates worldwide.
©2015 Delaware Management Holdings, Inc.
All third-party marks cited are the property of their respective owners.
Table of Contents
For the six-month period from November 1, 2014 to April 30, 2015 (Unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and/or 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 Nov. 1, 2014 to April 30, 2015.
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. The expenses shown in the table assume reinvestment of all dividends and distributions.
1
Table of Contents
Disclosure of Fund expenses
For the six-month period from November 1, 2014 to April 30, 2015 (Unaudited)
Delaware Global Real Estate Opportunities Fund
Expense analysis of an investment of $1,000
Beginning
Account Value
11/1/14 | Ending
Account Value
4/30/15 | Annualized
Expense Ratio | Expenses
Paid During Period
11/1/14 to 4/30/15* | |||||
| ||||||||
Actual Fund return† | ||||||||
Class A | $1,000.00 | $1,022.60 | 1.42% | $7.12 | ||||
Class C | 1,000.00 | 1,018.30 | 2.17% | 10.86 | ||||
Class R | 1,000.00 | 1,021.30 | 1.67% | 8.37 | ||||
Institutional Class | 1,000.00 | 1,025.30 | 1.17% | 5.88 | ||||
| ||||||||
Hypothetical 5% return (5% return before expenses) | ||||||||
Class A | $1,000.00 | $1,017.75 | 1.42% | $7.10 | ||||
Class C | 1,000.00 | 1,014.03 | 2.17% | 10.84 | ||||
Class R | 1,000.00 | 1,016.51 | 1.67% | 8.35 | ||||
Institutional Class | 1,000.00 | 1,018.99 | 1.17% | 5.86 | ||||
|
* | “Expenses Paid During Period” are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (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. |
2
Table of Contents
Security type / country and sector allocations
Delaware Global Real Estate Opportunities Fund | As of April 30, 2015 (Unaudited) |
Sector designations may be different than the sector designations presented in other fund materials. The sector designations may represent the investment manager’s internal sector classifications, which may result in the sector designations for one fund being different than another fund’s sector designations.
Security type / country | Percentage of net assets | |||
| ||||
Common Stock by Country | 95.42% | |||
Australia | 5.74% | |||
Canada | 1.03% | |||
China/Hong Kong | 7.65% | |||
Finland | 0.82% | |||
France | 1.81% | |||
Germany | 2.27% | |||
Italy | 0.58% | |||
Japan | 8.07% | |||
Mexico | 0.45% | |||
Singapore | 2.40% | |||
Spain | 0.56% | |||
United Kingdom | 7.46% | |||
United States | 56.58% �� | |||
| ||||
Right | 0.06% | |||
| ||||
Short-Term Investments | 5.32% | |||
| ||||
Total Value of Securities | 100.80% | |||
| ||||
Liabilities Net of Receivables and Other Assets | (0.80%) | |||
| ||||
Total Net Assets | 100.00% | |||
| ||||
Common stock and right by sector | Percentage of net assets | |||
| ||||
Diversified REITs | 10.98% | |||
Healthcare REITs | 4.31% | |||
Hotel REITs | 4.40% | |||
Industrial REITs | 4.60% | |||
Mall REITs | 10.76% | |||
Multifamily REITs | 12.09% | |||
Office REITs | 16.40% | |||
Office/Industrial REITs | 5.84% | |||
Real Estate Operating Companies/Developer | 11.68% | |||
Retail REITs | 5.33% | |||
Self-Storage REITs | 3.34% | |||
Shopping Center REITs | 4.22% | |||
Single Tenant REIT | 0.70% | |||
Specialty REITs | 0.83% | |||
| ||||
Total | 95.48% | |||
|
3
Table of Contents
Delaware Global Real Estate Opportunities Fund | April 30, 2015 (Unaudited) |
Number of shares | Value (U.S. $) | |||||||
| ||||||||
Common Stock – 95.42%D | ||||||||
| ||||||||
Australia – 5.74% | ||||||||
Dexus Property Group | 1 | $ | 4 | |||||
Goodman Group | 78,997 | 387,679 | ||||||
GPT Group-In Specie @=† | 1,377,200 | 0 | ||||||
Investa Office Fund | 223,028 | 653,363 | ||||||
Mirvac Group | 641,269 | 1,016,050 | ||||||
Scentre Group | 161,454 | 475,651 | ||||||
Westfield | 122,904 | 913,879 | ||||||
|
| |||||||
3,446,626 | ||||||||
|
| |||||||
Canada – 1.03% | ||||||||
Allied Properties Real Estate Investment Trust | 18,700 | 619,924 | ||||||
|
| |||||||
619,924 | ||||||||
|
| |||||||
China/Hong Kong – 7.65% | ||||||||
Hongkong Land Holdings | 107,400 | 869,940 | ||||||
Hysan Development | 163,072 | 753,495 | ||||||
Kerry Properties | 119,000 | 485,670 | ||||||
Link REIT | 65,000 | 403,191 | ||||||
Shimao Property Holdings | 66,500 | 156,560 | ||||||
Sun Hung Kai Properties | 115,724 | 1,921,992 | ||||||
|
| |||||||
4,590,848 | ||||||||
|
| |||||||
Finland – 0.82% | ||||||||
Citycon † | 151,943 | 491,138 | ||||||
|
| |||||||
491,138 | ||||||||
|
| |||||||
France – 1.81% | ||||||||
Klepierre | 18,338 | 889,220 | ||||||
Unibail-Rodamco | 708 | 195,425 | ||||||
|
| |||||||
1,084,645 | ||||||||
|
| |||||||
Germany – 2.27% | ||||||||
alstria office REIT † | 39,514 | 559,720 | ||||||
Deutsche Annington Immobilien | 23,977 | 804,540 | ||||||
|
| |||||||
1,364,260 | ||||||||
|
| |||||||
Italy – 0.58% | ||||||||
Beni Stabili | 425,029 | 350,359 | ||||||
|
| |||||||
350,359 | ||||||||
|
| |||||||
Japan – 8.07% | ||||||||
GLP J-REIT | 107 | 110,015 | ||||||
Kenedix Office Investment | 53 | 286,776 | ||||||
Mitsubishi Estate | 78,642 | 1,851,019 | ||||||
Mitsui Fudosan | 72,446 | 2,147,611 | ||||||
Mori Hills REIT Investment | 89 | 122,141 |
4
Table of Contents
Number of shares | Value (U.S. $) | |||||||
| ||||||||
Common StockD (continued) | ||||||||
| ||||||||
Japan (continued) | ||||||||
Orix JREIT | 144 | $ | 212,855 | |||||
Sumitomo Realty & Development | 3,000 | 115,788 | ||||||
|
| |||||||
4,846,205 | ||||||||
|
| |||||||
Mexico – 0.45% | ||||||||
Prologis Property Mexico † | 152,100 | 269,756 | ||||||
|
| |||||||
269,756 | ||||||||
|
| |||||||
Singapore – 2.40% | ||||||||
CapitaLand | 294,600 | 819,793 | ||||||
City Developments | 48,600 | 391,018 | ||||||
Mapletree Commercial Trust | 197,794 | 230,021 | ||||||
|
| |||||||
1,440,832 | ||||||||
|
| |||||||
Spain – 0.56% | ||||||||
Merlin Properties Socimi † | 24,576 | 335,866 | ||||||
|
| |||||||
335,866 | ||||||||
|
| |||||||
United Kingdom – 7.46% | ||||||||
British Land | 80,467 | 1,024,954 | ||||||
Derwent London | 14,799 | 779,030 | ||||||
Great Portland Estates | 80,284 | 980,129 | ||||||
Segro | 150,490 | 988,734 | ||||||
Shaftesbury | 55,019 | 707,618 | ||||||
|
| |||||||
4,480,465 | ||||||||
|
| |||||||
United States – 56.58% | ||||||||
American Residential Properties † | 20,615 | 386,737 | ||||||
Apartment Investment & Management | 21,231 | 801,046 | ||||||
AvalonBay Communities | 8,727 | 1,434,195 | ||||||
Boston Properties | 11,636 | 1,539,559 | ||||||
CubeSmart | 5,280 | 121,810 | ||||||
CyrusOne | 13,813 | 448,646 | ||||||
DCT Industrial Trust | 11,957 | 395,059 | ||||||
DDR | 26,799 | 456,923 | ||||||
DiamondRock Hospitality | 40,661 | 551,363 | ||||||
Douglas Emmett | 20,387 | 581,030 | ||||||
Duke Realty | 46,691 | 924,949 | ||||||
Equity Commonwealth † | 23,515 | 592,813 | ||||||
Equity Residential | 21,943 | 1,620,710 | ||||||
Essex Property Trust | 3,787 | 840,525 | ||||||
Extra Space Storage | 10,297 | 678,881 | ||||||
General Growth Properties | 56,850 | 1,557,690 | ||||||
Gramercy Property Trust | 23,248 | 635,600 | ||||||
Health Care REIT | 15,083 | 1,086,278 | ||||||
Healthcare Trust of America Class A | 13,740 | 355,729 |
5
Table of Contents
Schedule of investments
Delaware Global Real Estate Opportunities Fund
Number of shares | Value (U.S. $) | |||||||
| ||||||||
Common StockD (continued) | ||||||||
| ||||||||
United States (continued) | ||||||||
Highwoods Properties | 10,040 | $ | 432,122 | |||||
Host Hotels & Resorts | 31,980 | 644,077 | ||||||
Hudson Pacific Properties | 14,682 | 442,809 | ||||||
Kilroy Realty | 14,574 | 1,034,608 | ||||||
Kimco Realty | 31,421 | 757,246 | ||||||
Kite Realty Group Trust | 5,823 | 152,563 | ||||||
Macerich | 9,444 | 772,141 | ||||||
Paramount Group | 36,644 | 671,318 | ||||||
Pebblebrook Hotel Trust | 13,270 | 569,814 | ||||||
Post Properties | 9,382 | 536,369 | ||||||
Prologis | 17,898 | 719,500 | ||||||
PS Business Parks | 5,078 | 387,705 | ||||||
Public Storage | 6,405 | 1,203,564 | ||||||
Regency Centers | 10,981 | 689,387 | ||||||
RLJ Lodging Trust | 22,742 | 674,755 | ||||||
Simon Property Group | 19,240 | 3,491,862 | ||||||
SL Green Realty | 9,623 | 1,177,470 | ||||||
Spirit Realty Capital | 37,507 | 423,454 | ||||||
Strategic Hotels & Resorts † | 17,433 | 203,966 | ||||||
Taubman Centers | 8,896 | 640,601 | ||||||
UDR | 37,318 | 1,222,911 | ||||||
Ventas | 16,610 | 1,144,429 | ||||||
Vornado Realty Trust | 9,349 | 967,528 | ||||||
|
| |||||||
33,969,742 | ||||||||
|
| |||||||
Total Common Stock (cost $53,791,269) | 57,290,666 | |||||||
|
| |||||||
| ||||||||
Right – 0.06%D | ||||||||
| ||||||||
Spain – 0.06% | ||||||||
Merlin Properties Socimi exercise price EUR 9.50, expiration date 5/2/15 |
| 23,443
|
|
| 35,788
|
| ||
|
| |||||||
Total Right (cost $1,017) | 35,788 | |||||||
|
| |||||||
Principal amount° | ||||||||
| ||||||||
Short-Term Investments – 5.32% | ||||||||
| ||||||||
Discount Notes – 1.88%≠ | ||||||||
Federal Home Loan Bank | ||||||||
0.05% 6/1/15 | 340,026 | 340,015 | ||||||
0.065% 6/5/15 | 150,544 | 150,539 | ||||||
0.075% 6/4/15 | 65,222 | 65,219 |
6
Table of Contents
Principal amount° | Value (U.S. $) | |||||||||
| ||||||||||
Short-Term Investments (continued) | ||||||||||
| ||||||||||
Discount Notes≠ (continued) | ||||||||||
Federal Home Loan Bank | ||||||||||
0.075% 6/29/15 | 65,222 | $ | 65,218 | |||||||
0.08% 7/17/15 | 164,703 | 164,685 | ||||||||
0.08% 7/22/15 | 219,603 | 219,578 | ||||||||
0.095% 7/14/15 | 123,921 | 123,908 | ||||||||
|
| |||||||||
1,129,162 | ||||||||||
|
| |||||||||
Repurchase Agreements – 3.44% | ||||||||||
Bank of America Merrill Lynch | 731,029 | 731,029 | ||||||||
Bank of Montreal | 609,191 | 609,191 | ||||||||
BNP Paribas | 721,780 | 721,780 | ||||||||
|
| |||||||||
2,062,000 | ||||||||||
|
| |||||||||
Total Short-Term Investments (cost $3,191,111) | 3,191,162 | |||||||||
|
| |||||||||
Total Value of Securities – 100.80% | $ | 60,517,616 | ||||||||
|
|
@ | Illiquid security. At April 30, 2015, the aggregate value of illiquid securities was $0, which represents 0.00% of the Fund’s net assets. See Note 9 in “Notes to financial statements.” |
= | Security is being fair valued in accordance with the Fund’s fair valuation policy. At April 30, 2015, the aggregate value of fair valued securities was $0, which represents 0.00% of the Fund’s net assets. See Note 1 in “Notes to financial statements.” |
≠ | The rate shown is the effective yield at the time of purchase. |
° | Principal amount shown is stated in U.S. dollars unless noted that the security is denominated in another currency. |
† | Non-income-producing security. |
D | Securities have been classified by country of origin. Aggregate classification by business sectors has been presented on page 3 in “Security type / country and sector allocations.” |
7
Table of Contents
Schedule of investments
Delaware Global Real Estate Opportunities Fund
The following foreign currency exchange contracts were outstanding at April 30, 2015:1
Foreign Currency Exchange Contracts
Counterparty | Contracts to Receive (Deliver) | In Exchange For | Settlement Date | Unrealized Appreciation (Depreciation) | ||||||||||||||
BNYM | AUD | 288,786 | USD | (230,686 | ) | 5/1/15 | $ | (2,139) | ||||||||||
BNYM | AUD | 140,216 | USD | (112,981 | ) | 5/4/15 | (2,033) | |||||||||||
BNYM | EUR | 53,682 | USD | (60,191 | ) | 5/5/15 | 73 | |||||||||||
BNYM | EUR | 5,449 | USD | (6,110 | ) | 5/6/15 | 8 | |||||||||||
BNYM | GBP | 53,597 | USD | (82,195 | ) | 5/5/15 | 82 | |||||||||||
BNYM | JPY | (13,940,067 | ) | USD | 117,006 | 5/1/15 | 254 | |||||||||||
BNYM | JPY | 4,494,935 | USD | (37,842 | ) | 5/7/15 | (197) | |||||||||||
BNYM | MXN | 76,236 | USD | (4,959 | ) | 5/6/15 | 10 | |||||||||||
BNYM | SGD | 66,955 | USD | (50,838 | ) | 5/4/15 | (244) | |||||||||||
|
| |||||||||||||||||
$ | (4,186) | |||||||||||||||||
|
|
The use of foreign currency exchange contracts involves elements of market risk and risks in excess of the amounts disclosed in the financial statements. The foreign currency exchange contracts presented above represent the Fund’s total exposure in such contracts, whereas only the net unrealized appreciation (depreciation) is reflected in the Fund’s net assets.
1See Note 7 in “Notes to financial statements.”
Summary of abbreviations:
AUD – Australian Dollar
BNYM – BNY Mellon
EUR – European Monetary Unit
GBP – British Pound Sterling
JPY – Japanese Yen
MXN – Mexican Peso
REIT – Real Estate Investment Trust
SGD – Singapore Dollar
USD – U.S. Dollar
See accompanying notes, which are an integral part of the financial statements.
8
Table of Contents
Statement of assets and liabilities
Delaware Global Real Estate Opportunities Fund | April 30, 2015 (Unaudited) |
Assets: | ||||
Investments, at value1 | $ | 57,326,454 | ||
Short-term investments, at value2 | 3,191,162 | |||
Cash | 3,130 | |||
Foreign currencies, at value3 | 3 | |||
Receivable for securities sold | 894,383 | |||
Receivable for fund shares sold | 425,709 | |||
Dividends and interest receivable | 103,416 | |||
Unrealized appreciation on foreign currency exchange contracts | 230 | |||
|
| |||
Total assets | 61,944,487 | |||
|
| |||
Liabilities: | ||||
Payable for securities purchased | 1,693,255 | |||
Payable for fund shares redeemed | 103,086 | |||
Investment management fees payable | 52,076 | |||
Other accrued expenses | 45,643 | |||
Distribution fees payable to affiliates | 4,186 | |||
Other affiliates payable | 1,559 | |||
Trustees’ fees and expenses payable | 140 | |||
Unrealized depreciation on foreign currency exchange contracts | 4,416 | |||
|
| |||
Total liabilities | 1,904,361 | |||
|
| |||
Total Net Assets | $ | 60,040,126 | ||
|
| |||
Net Assets Consist of: | ||||
Paid-in capital | $ | 149,790,314 | ||
Distributions in excess of net investment income | (209,747 | ) | ||
Accumulated net realized loss on investments | (93,071,808 | ) | ||
Net unrealized appreciation of investments, foreign currencies, and derivatives | 3,531,367 | |||
|
| |||
Total Net Assets | $ | 60,040,126 | ||
|
|
9
Table of Contents
Statement of assets and liabilities
Delaware Global Real Estate Opportunities Fund
Net Asset Value | ||||
Class A: | ||||
Net assets | $ | 9,926,539 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 1,368,954 | |||
Net asset value per share | $ | 7.25 | ||
Sales charge | 5.75 | % | ||
Offering price per share, equal to net asset value per share / (1 – sales charge) | $ | 7.69 | ||
Class C: | ||||
Net assets | $ | 2,560,790 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 353,729 | |||
Net asset value per share | $ | 7.24 | ||
Class R: | ||||
Net assets | $ | 264,399 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 36,502 | |||
Net asset value per share | $ | 7.24 | ||
Institutional Class: | ||||
Net assets | $ | 47,288,398 | ||
Shares of beneficial interest outstanding, unlimited authorization, no par | 6,527,042 | |||
Net asset value per share | $ | 7.24 |
1Investments, at cost | $ | 53,792,286 | ||
2Short-term investments, at cost | 3,191,111 | |||
3Foreign currencies, at cost | 3 |
See accompanying notes, which are an integral part of the financial statements.
10
Table of Contents
Delaware Global Real Estate Opportunities Fund | Six months ended April 30, 2015 (Unaudited) |
Investment Income: | ||||
Dividends | $ | 888,731 | ||
Interest | 7,460 | |||
Foreign tax withheld | (27,370 | ) | ||
|
| |||
868,821 | ||||
|
| |||
Expenses: | ||||
Management fees | 275,580 | |||
Distribution expenses – Class A | 9,538 | |||
Distribution expenses – Class C | 11,893 | |||
Distribution expenses – Class R | 431 | |||
Registration fees | 31,596 | |||
Dividend disbursing and transfer agent fees and expenses | 20,470 | |||
Audit and tax | 19,631 | |||
Reports and statements to shareholders | 17,100 | |||
Accounting and administration expenses | 8,911 | |||
Custodian fees | 7,389 | |||
Legal fees | 2,157 | |||
Trustee’s fees and expenses | 1,275 | |||
Other | 6,991 | |||
|
| |||
412,962 | ||||
Less expenses waived | (66,336 | ) | ||
Less expense paid indirectly | (13 | ) | ||
|
| |||
Total operating expenses | 346,613 | |||
|
| |||
Net Investment Income | 522,208 | |||
|
| |||
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain (loss) on: | ||||
Investments | 2,391,597 | |||
Foreign currencies | 4,925 | |||
Foreign currency exchange contracts | (29,333 | ) | ||
|
| |||
Net realized gain | 2,367,189 | |||
|
| |||
Net change in unrealized appreciation (depreciation) of: | ||||
Investments | (1,777,098 | ) | ||
Foreign currencies | (85 | ) | ||
Foreign currency exchange contracts | 1,051 | |||
|
| |||
Net change in unrealized appreciation (depreciation) | (1,776,132 | ) | ||
|
| |||
Net Realized and Unrealized Gain | 591,057 | |||
|
| |||
Net Increase in Net Assets Resulting from Operations | $ | 1,113,265 | ||
|
|
See accompanying notes, which are an integral part of the financial statements.
11
Table of Contents
Statements of changes in net assets
Delaware Global Real Estate Opportunities Fund
Six months ended 4/30/15 (Unaudited) | Year ended 10/31/14 | |||||||
Increase (Decrease) in Net Assets from Operations: | ||||||||
Net investment income | $ | 522,208 | $ | 988,781 | ||||
Net realized gain | 2,367,189 | 2,644,256 | ||||||
Net change in unrealized appreciation (depreciation) | (1,776,132 | ) | 2,170,418 | |||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 1,113,265 | 5,803,455 | ||||||
|
|
|
| |||||
Dividends and Distributions to Shareholders from: | ||||||||
Net investment income: | ||||||||
Class A | (109,931 | ) | (159,306 | ) | ||||
Class C | (24,824 | ) | (22,045 | ) | ||||
Class R | (2,063 | ) | (963 | ) | ||||
Institutional Class | (752,364 | ) | (1,562,972 | ) | ||||
|
|
|
| |||||
(889,182 | ) | (1,745,286 | ) | |||||
|
|
|
| |||||
Capital Share Transactions: | ||||||||
Proceeds from shares sold: | ||||||||
Class A | 4,268,918 | 6,540,240 | ||||||
Class C | 735,820 | 1,589,505 | ||||||
Class R | 155,674 | 89,526 | ||||||
Institutional Class | 7,886,760 | 13,834,067 | ||||||
Net asset value of shares issued upon reinvestment of dividends and distributions: | ||||||||
Class A | 105,130 | 151,317 | ||||||
Class C | 22,528 | 21,387 | ||||||
Class R | 2,063 | 963 | ||||||
Institutional Class | 257,993 | 287,571 | ||||||
|
|
|
| |||||
13,434,886 | 22,514,576 | |||||||
|
|
|
|
12
Table of Contents
Six months ended 4/30/15 (Unaudited) | Year ended 10/31/14 | |||||||
Capital Share Transactions (continued): | ||||||||
Cost of shares redeemed: | ||||||||
Class A | $ | (999,987 | ) | $ | (5,097,137 | ) | ||
Class C | (320,916 | ) | (219,233 | ) | ||||
Class R | (10,990 | ) | (703 | ) | ||||
Institutional Class | (6,096,463 | ) | (21,673,279 | ) | ||||
|
|
|
| |||||
(7,428,356 | ) | (26,990,352 | ) | |||||
|
|
|
| |||||
Increase (decrease) in net assets derived from capital share transactions | 6,006,530 | (4,475,776 | ) | |||||
|
|
|
| |||||
Net Increase (Decrease) in Net Assets | 6,230,613 | (417,607 | ) | |||||
Net Assets: | ||||||||
Beginning of period | 53,809,513 | 54,227,120 | ||||||
|
|
|
| |||||
End of period | $ | 60,040,126 | $ | 53,809,513 | ||||
|
|
|
| |||||
Undistributed (distributions in excess of) net investment income | $ | (209,747 | ) | $ | 157,227 | |||
|
|
|
|
See accompanying notes, which are an integral part of the financial statements.
13
Table of Contents
Delaware Global Real Estate Opportunities Fund Class A1
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 income3 |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Total dividends and distributions |
Net asset value, end of period |
Total return4 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets prior to fees waived |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
|
1 | The Fund is the successor to The Global Real Estate Securities Portfolio, formerly a series of the Delaware Pooled® Trust, pursuant to the reorganization (Reorganization) of The Global Real Estate Securities Portfolio which occurred after the close of business on Sept. 28, 2012. Prior to the Reorganization, the Fund had no investment operations. The information shown for 2012 and earlier is historical information for The Global Real Estate Securities Portfolio. Because the Fund’s fees and expenses are higher than those of The Global Real Estate Securities Portfolio, the Fund’s performance would have been lower than that of The Global Real Estate Securities Portfolio. |
2 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
3 | The average shares outstanding method has been applied for per share information. |
4 | Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during some of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
See accompanying notes, which are an integral part of the financial statements.
14
Table of Contents
Six months ended 4/30/152 | Year ended | |||||||||||||||||||||||
(Unaudited) | 10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | |||||||||||||||||||
| ||||||||||||||||||||||||
$ 7.200 | $ | 6.650 | $ | 6.060 | $ | 5.370 | $ | 5.780 | $ | 5.040 | ||||||||||||||
0.062 | 0.116 | 0.079 | 0.103 | 0.148 | 0.129 | |||||||||||||||||||
0.100 | 0.642 | 0.696 | 0.799 | (0.069 | ) | 0.973 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
0.162 | 0.758 | 0.775 | 0.902 | 0.079 | 1.102 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
(0.112) | (0.208 | ) | (0.185 | ) | (0.212 | ) | (0.489 | ) | (0.362 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
(0.112) | (0.208 | ) | (0.185 | ) | (0.212 | ) | (0.489 | ) | (0.362 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
$ 7.250 | $ | 7.200 | $ | 6.650 | $ | 6.060 | $ | 5.370 | $ | 5.780 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
2.26% | 11.80% | 13.11% | 17.79% | 1.68% | 23.26% | |||||||||||||||||||
$ 9,927 | $ | 6,571 | $ | 4,340 | $ | 297 | $ | 8 | $ | 8 | ||||||||||||||
1.42% | 1.40% | 1.40% | 1.38% | 1.39% | 1.50% | |||||||||||||||||||
1.65% | 1.78% | 1.66% | 1.52% | 1.49% | 1.50% | |||||||||||||||||||
1.70% | 1.72% | 1.21% | 1.65% | 2.69% | 2.52% | |||||||||||||||||||
1.47% | 1.34% | 0.95% | 1.51% | 2.59% | 2.52% | |||||||||||||||||||
50% | 107% | 112% | 128% | 155% | 185% | |||||||||||||||||||
|
15
Table of Contents
Financial highlights
Delaware Global Real Estate Opportunities 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)3 |
Net realized and unrealized gain |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Total dividends and distributions |
Net asset value, end of period |
Total return4 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets prior to fees waived |
Ratio of net investment income (loss) to average net assets |
Ratio of net investment income (loss) 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 | Date of commencement of operations; ratios have been annualized and total return has not been annualized. |
3 | The average shares outstanding method has been applied for per share information. |
4 | Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
5 | Portfolio turnover is representative of the Fund for the entire annual period. |
See accompanying notes, which are an integral part of the financial statements.
16
Table of Contents
Six months ended 4/30/151 | Year ended | 10/1/122 to | ||||||||||||||
(Unaudited) | 10/31/14 | 10/31/13 | 10/31/12 | |||||||||||||
| ||||||||||||||||
$ 7.190 | $ | 6.640 | $ | 6.060 | $ | 5.960 | ||||||||||
0.035 | 0.066 | 0.030 | (0.005) | |||||||||||||
0.096 | 0.637 | 0.705 | 0.105 | |||||||||||||
|
|
|
|
|
| |||||||||||
0.131 | 0.703 | 0.735 | 0.100 | |||||||||||||
|
|
|
|
|
| |||||||||||
(0.081) | (0.153 | ) | (0.155 | ) | — | |||||||||||
|
|
|
|
|
| |||||||||||
(0.081) | (0.153 | ) | (0.155 | ) | — | |||||||||||
|
|
|
|
|
| |||||||||||
$ 7.240 | $ | 7.190 | $ | 6.640 | $ | 6.060 | ||||||||||
|
|
|
|
|
| |||||||||||
1.83% | 11.06% | 12.23% | 1.68% | |||||||||||||
$ 2,561 | $ | 2,119 | $ | 572 | $ | 25 | ||||||||||
2.17% | 2.15% | 2.15% | 2.15% | |||||||||||||
2.40% | 2.53% | 2.41% | 2.52% | |||||||||||||
0.95% | 0.97% | 0.46% | (0.93%) | |||||||||||||
0.72% | 0.59% | 0.20% | (1.30%) | |||||||||||||
50% | 107% | 112% | 128%5 | |||||||||||||
|
17
Table of Contents
Financial highlights
Delaware Global Real Estate Opportunities 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 income (loss)3 |
Net realized and unrealized gain |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Total dividends and distributions |
Net asset value, end of period |
Total return4 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets prior to fees waived |
Ratio of net investment income (loss) to average net assets |
Ratio of net investment income (loss) 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 | Date of commencement of operations; ratios have been annualized and total return has not been annualized. |
3 | The average shares outstanding method has been applied for per share information. |
4 | Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return during some of the periods shown reflects waivers by the manager and/or distributor. Performance would have been lower had the waivers not been in effect. |
5 | Portfolio turnover is representative of the Fund for the entire annual period. |
See accompanying notes, which are an integral part of the financial statements.
18
Table of Contents
Six months ended 4/30/151 (Unaudited) |
Year ended | 10/1/122 to | ||||||||||||||
10/31/14 | 10/31/13 | 10/31/12 | ||||||||||||||
| ||||||||||||||||
$ 7.190 | $ | 6.640 | $ | 6.060 | $ | 5.960 | ||||||||||
0.053 | 0.101 | 0.062 | (0.002) | |||||||||||||
0.099 | 0.637 | 0.699 | 0.102 | |||||||||||||
|
|
|
|
|
| |||||||||||
0.152 | 0.738 | 0.761 | 0.100 | |||||||||||||
|
|
|
|
|
| |||||||||||
(0.102) | (0.188 | ) | (0.181 | ) | — | |||||||||||
|
|
|
|
|
| |||||||||||
(0.102) | (0.188 | ) | (0.181 | ) | — | |||||||||||
|
|
|
|
|
| |||||||||||
$ 7.240 | $ | 7.190 | $ | 6.640 | $ | 6.060 | ||||||||||
|
|
|
|
|
| |||||||||||
2.13% | 11.48% | 12.87% | 1.68% | |||||||||||||
$ 264 | $ | 121 | $ | 24 | $ | 7 | ||||||||||
1.67% | 1.65% | 1.65% | 1.65% | |||||||||||||
1.90% | 2.03% | 2.00% | 2.12% | |||||||||||||
1.45% | 1.47% | 0.96% | (0.43%) | |||||||||||||
1.22% | 1.09% | 0.61% | (0.90%) | |||||||||||||
50% | 107% | 112% | 128%5 | |||||||||||||
|
19
Table of Contents
Financial highlights
Delaware Global Real Estate Opportunities Fund Institutional Class1
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 income3 |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Total dividends and distributions |
Net asset value, end of period |
Total return4 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets prior to fees waived |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
|
1 | The Fund is the successor to The Global Real Estate Securities Portfolio, formerly a series of the Delaware Pooled® Trust, pursuant to the reorganization (Reorganization) of The Global Real Estate Securities Portfolio which occurred after the close of business on Sept. 28, 2012. Prior to the Reorganization, the Fund had no investment operations. The information shown for 2012 and earlier is historical information for The Global Real Estate Securities Portfolio. Because the Fund’s fees and expenses are higher than those of The Global Real Estate Securities Portfolio, the Fund’s performance would have been lower than that of The Global Real Estate Securities Portfolio. |
2 | Ratios have been annualized and total return and portfolio turnover have not been annualized. |
3 | The average shares outstanding method has been applied for per share information. |
4 | Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return during some of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
See accompanying notes, which are an integral part of the financial statements.
20
Table of Contents
Six months ended 4/30/152 | Year ended | |||||||||||||||||||||||
(Unaudited) | 10/31/14 | 10/31/13 | 10/31/12 | 10/31/11 | 10/31/10 | |||||||||||||||||||
| ||||||||||||||||||||||||
$ 7.190 | $ | 6.650 | $ | 6.060 | $ | 5.390 | $ | 5.790 | $ | 5.050 | ||||||||||||||
0.071 | 0.132 | 0.094 | 0.105 | 0.163 | 0.142 | |||||||||||||||||||
0.100 | 0.633 | 0.707 | 0.791 | (0.061 | ) | 0.971 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
0.171 | 0.765 | 0.801 | 0.896 | 0.102 | 1.113 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
(0.121) | (0.225 | ) | (0.211 | ) | (0.226 | ) | (0.502 | ) | (0.373 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
(0.121) | (0.225 | ) | (0.211 | ) | (0.226 | ) | (0.502 | ) | (0.373 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
$ 7.240 | $ | 7.190 | $ | 6.650 | $ | 6.060 | $ | 5.390 | $ | 5.790 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
2.53% | 11.93% | 13.58% | 17.68% | 2.10% | 23.49% | |||||||||||||||||||
$47,288 | $ | 44,999 | $ | 49,291 | $ | 76,426 | $ | 49,359 | $ | 60,307 | ||||||||||||||
1.17% | 1.15% | 1.15% | 1.13% | 1.14% | 1.25% | |||||||||||||||||||
1.40% | 1.53% | 1.41% | 1.27% | 1.24% | 1.25% | |||||||||||||||||||
1.95% | 1.97% | 1.46% | 1.90% | 2.94% | 2.77% | |||||||||||||||||||
1.72% | 1.59% | 1.20% | 1.76% | 2.84% | 2.77% | |||||||||||||||||||
50% | 107% | 112% | 128% | 155% | 185% | |||||||||||||||||||
|
21
Table of Contents
Delaware Global Real Estate Opportunities Fund | April 30, 2015 (Unaudited) |
Delaware Group® Adviser Funds (Trust) is organized as a Delaware statutory trust and offers three series: Delaware Diversified Income Fund, Delaware Global Real Estate Opportunities Fund, and Delaware U.S. Growth Fund. These financial statements and related notes pertain to Delaware Global Real Estate Opportunities Fund (Fund). The Trust is an open-end investment company. The Fund is considered non-diversified under the Investment Company Act of 1940, as amended, and offers Class A, Class C, Class R, and Institutional Class shares. Class A shares are sold with a maximum front-end sales charge of 5.75%. Class A share purchases of $1,000,000 or more will incur a contingent deferred sales charge (CDSC) of 1.00% if redeemed during the first year and 0.50% during the second year, provided that Delaware Distributors, L.P. (DDLP) paid a financial advisor a commission on the purchase of those shares. Class C shares are sold with a CDSC of 1.00%, 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.
The investment objective of the Fund is to seek maximum long-term total return through a combination of current income and capital appreciation.
1. Significant Accounting Policies
The following accounting policies are in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and are consistently followed by the Fund.
Security Valuation – Equity securities, except those traded on the Nasdaq Stock Market, Inc. (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. 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. Securities listed on a foreign exchange are normally valued at the last quoted sales price on the valuation date. U.S. government and agency securities are valued at the mean between the bid and ask prices, which approximates fair value. Foreign currency exchange contracts and foreign cross 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. 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 Fund’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-U.S. markets because, among other things, most foreign markets close well before the Fund values its securities, generally as of 4:00 p.m. 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).
22
Table of Contents
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 for all open federal income tax years (Oct. 31, 2011–Oct. 31, 2014), and has concluded that no provision for federal income tax is required in the Fund’s financial statements. In regard to foreign taxes only, the Fund has open tax years in certain foreign countries in which it invests in that may date back to the inception of the Fund.
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.
Repurchase Agreements – The Fund may purchase certain U.S. government securities subject to the counterparty’s agreement to repurchase them at an agreed upon date and price. The counterparty will be required on a daily basis to maintain the value of the collateral subject to the agreement at not less than the repurchase price (including accrued interest). The agreements are conditioned upon the collateral being deposited under the Federal Reserve book-entry system with the Fund’s custodian or a third-party sub-custodian. In the event of default or bankruptcy by the other party to the agreement, retention of the collateral may be subject to legal proceedings. All open repurchase agreements as of the date of this report were entered into on April 30, 2015.
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 U.S. dollars at the exchange rate of such currencies against the U.S. 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 does not bifurcate that portion of realized gains and losses on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices. The changes 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 Fund is an investment company in conformity with U.S. GAAP. Therefore, the Fund follows the accounting and reporting guidelines for investment companies. The preparation of financial statements in conformity with U.S. 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.
23
Table of Contents
Notes to financial statements
Delaware Global Real Estate Opportunities Fund
1. Significant Accounting Policies (continued)
Other – Expenses directly attributable to the Fund are charged directly to the Fund. Other expenses common to various funds within the Delaware Investments® Family of Funds are generally allocated among such funds on the basis of average net assets. Management fees and some 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. Distributions received from investments in real estate investment trusts (REITs) are recorded as dividend income on the ex-dividend date, subject to reclassification upon notice of the character of such distributions by the issuer. Foreign dividends are also recorded on the ex-dividend date or as soon after the ex-dividend date that the Fund is aware of such dividends, net of all tax withholdings, a portion of 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 quarterly and distributions from net realized gain on investments, if any, annually. The Fund may distribute more frequently, if necessary for tax purposes. Dividends and distributions, if any, are recorded on the ex-dividend date.
The Fund may receive 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 April 30, 2015.
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 one dollar, the expense paid under this arrangement is included on the “Statement of operations” under “Dividend disbursing and transfer agent fees and expenses” with the corresponding expense offset shown under “Less expense paid indirectly.” For the six months ended April 30, 2015, the Fund earned $13 under the agreement.
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 Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate of 0.99% on the first $100 million of the average daily net assets of the Fund, 0.90% on the next $150 million, and 0.80% on average daily net assets in excess of $250 million.
DMC has contractually agreed to waive that portion if any, of its management fee and reimburse the Fund to the extent necessary to ensure that total annual fund operating expenses (excluding any 12b-1 fees, taxes, interest, short sale and dividend interest expenses, brokerage fees, certain insurance costs, acquired fund fees and expenses, and nonroutine expenses or costs, including, but not limited to, those
24
Table of Contents
relating to reorganizations, litigation, conducting shareholder meetings, and liquidations (collectively nonroutine expenses)) do not exceed 1.15% of the Fund’s average daily net assets from Nov. 1, 2014 through April 30, 2015.* For purposes of this waiver and reimbursement, nonroutine expenses may also include such additional costs and expenses as may be agreed upon from time to time by the Fund’s Board and DMC. This expense waiver and reimbursement may only be terminated by agreement of DMC and the Fund.
*The contractual waiver period is Feb. 28, 2013 to Feb. 29, 2016.
Delaware Investments Fund Services Company (DIFSC), an affiliate of DMC, provides fund accounting and financial administration oversight services to the Fund. For these services, DIFSC’s fees are calculated based on the aggregate daily net assets of the Delaware Investments® Family of Funds at the following annual rate: 0.0050% of the first $30 billion; 0.0045% of the next $10 billion; 0.0040% of the next $10 billion; and 0.0025% of aggregate average daily net assets in excess of $50 billion. The fees payable to DIFSC under the service agreement described above are allocated among all funds in the Delaware Investments Family of Funds on a relative net asset value basis. For the six months ended April 30, 2015, the Fund was charged $1,318 for these services. This amount is included on the “Statement of operations” under “Accounting and administration expenses.”
DIFSC is the transfer agent and dividend disbursing agent of the Fund. For these services, DIFSC’s fees are calculated based on the aggregate daily net assets of the retail funds within the Delaware Investments Family of Funds at the following annual rate: 0.025% of the first $20 billion; 0.020% of the next $5 billion; 0.015% of the next $5 billion; and 0.013% of average daily net assets in excess of $30 billion. The fees payable to DIFSC under the service agreement described above are allocated among all retail funds in the Delaware Investments Family of Funds on a relative net asset value basis. This amount is included on the “Statement of operations” under “Dividend disbursing and transfer agent fees and expenses.” For the six months ended April 30, 2015, the amount charged by DIFSC was $5,792. 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 passed on to and paid by the Fund.
Pursuant to a distribution agreement and distribution plan, the Fund pays DDLP, the distributor and an affiliate of DMC, an annual distribution and service fee of 0.25% of the average daily net assets of the Class A shares, 1.00% of the average daily net assets of the Class C shares, and 0.50% of the average daily net assets of the Class R shares. Institutional Class shares pay no distribution and service expenses.
As provided in the investment management agreement, the Fund bears a portion of the cost of certain resources shared with DMC, including the cost of internal personnel of DMC and/or its affiliates that provide legal, tax, and regulatory reporting services to the Fund. For the six months ended April 30, 2015, the Fund was charged $799 for internal legal, tax, and regulatory reporting services provided by DMC and/or its affiliates’ employees. This amount is included on the “Statement of operations” under “Legal fees.”
25
Table of Contents
Notes to financial statements
Delaware Global Real Estate Opportunities Fund
2. Investment Management, Administration Agreements, and Other Transactions with Affiliates (continued)
For the six months ended April 30, 2015, DDLP earned $4,154 for commissions on sales of the Fund’s Class A shares. For the six months ended April 30, 2015, DDLP received gross CDSC commissions of $235 on redemptions of the Fund’s Class C shares. 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.
3. Investments
For the six months ended April 30, 2015, the Fund made purchases and sales of investment securities other than short-term investments as follows:
Purchases | $ | 32,000,747 | ||
Sales | 26,892,832 |
At April 30, 2015, the cost of investments for federal income tax purposes has been estimated since final tax characteristics cannot be determined until fiscal year end. At April 30, 2015, the cost of investments and unrealized appreciation (depreciation) were as follows:
Cost of investments | $ | 56,983,397 | ||
|
| |||
Aggregate unrealized appreciation | $ | 5,043,015 | ||
Aggregate unrealized depreciation | (1,508,796 | ) | ||
|
| |||
Net unrealized appreciation | $ | 3,534,219 | ||
|
|
For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. Capital loss carryforwards remaining at Oct. 31, 2014* will expire as follows: $40,907,101 expires in 2016, $50,784,384 expires in 2017, and $3,400,957 expires in 2018.
*The amount of this loss which can be utilized in subsequent years may be subject to an annual limitation in accordance with the Internal Revenue Code due to the Fund merger with Delaware Global Real Estate Securities Fund on Sept. 28, 2012.
On Dec. 22, 2010 the Regulated Investment Company Modernization Act of 2010 (Act) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes were generally effective for taxable years beginning after the date of enactment. Under the Act, the Fund is permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses rather than being considered all short-term as permitted under previous regulation. At April 30, 2015, there were no capital loss carryforwards incurred that will be carried forward under the Act.
U.S. 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
26
Table of Contents
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 below.
Level 1 – | Inputs are quoted prices in active markets for identical investments. (Examples: equity securities, open-end investment companies, futures contracts, 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, 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, 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.
27
Table of Contents
Notes to financial statements
Delaware Global Real Estate Opportunities Fund
3. Investments (continued)
The following table summarizes the valuation of the Fund’s investments by fair value hierarchy levels as of April 30, 2015:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Common Stock | ||||||||||||||||
Australia | $ | — | $ | 3,446,626 | $ | — | $ | 3,446,626 | ||||||||
Canada | 619,924 | — | — | 619,924 | ||||||||||||
China/Hong Kong | 869,940 | 3,720,908 | — | 4,590,848 | ||||||||||||
Finland | — | 491,138 | — | 491,138 | ||||||||||||
France | — | 1,084,645 | — | 1,084,645 | ||||||||||||
Germany | — | 1,364,260 | — | 1,364,260 | ||||||||||||
Italy | — | 350,359 | — | 350,359 | ||||||||||||
Japan | — | 4,846,205 | — | 4,846,205 | ||||||||||||
Mexico | 269,756 | — | — | 269,756 | ||||||||||||
Singapore | — | 1,440,832 | — | 1,440,832 | ||||||||||||
Spain | 335,866 | — | — | 335,866 | ||||||||||||
United Kingdom | — | 4,480,465 | — | 4,480,465 | ||||||||||||
United States | 33,969,742 | — | — | 33,969,742 | ||||||||||||
Right | 35,788 | — | — | 35,788 | ||||||||||||
Short-Term Investments | — | 3,191,162 | — | 3,191,162 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 36,101,016 | $ | 24,416,600 | $ | — | $ | 60,517,616 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Foreign Currency Exchange Contracts | $ | — | $ | (4,186 | ) | $ | — | $ | (4,186 | ) |
The securities deemed worthless on the “Schedule of investments” are considered to be Level 3 investments in this table.
As a result of utilizing international fair value pricing at April 30, 2015, a portion of the Fund’s common stock was categorized as Level 2.
During the six months ended April 30, 2015, there were no transfers between Level 1 investments, Level 2 investments, or Level 3 investments that had a significant impact to the Fund. This does not include transfers between Level 1 investments and Level 2 investments due to the Fund utilizing international fair value pricing during the period. In accordance with the fair valuation procedures described in Note 1, international fair value pricing of securities in the Fund occurs when market volatility exceeds an established rolling threshold. If the threshold is exceeded on a given date, then prices of international securities (those that traded on exchanges that close at a different time than the time that the Fund’s net asset value is determined) are established using a separate pricing feed from a third-party vendor designed to establish a price for each such security as of the time that the Fund’s net asset value is determined. Further, international fair value pricing uses other observable market-based inputs in place of the closing exchange price due to the events occurring after the close of the exchange or market on which the investment is principally traded, causing a change in the classification between levels. The Fund’s policy is to recognize transfers between levels at the beginning of the reporting period.
28
Table of Contents
A reconciliation of Level 3 investments is presented when the Fund has a significant amount of Level 3 investments at the beginning, interim, or end of the period in relation to net assets. Management has determined not to provide additional disclosure on Level 3 inputs since the Level 3 investments are not considered significant to the Fund’s net assets at the end of the period.
4. Capital Shares
Transactions in capital shares were as follows:
Six months ended 4/30/15 | Year ended 10/31/14 | |||||||
Shares sold: | ||||||||
Class A | 577,491 | 979,245 | ||||||
Class C | 99,615 | 237,941 | ||||||
Class R | 20,923 | 13,205 | ||||||
Institutional Class | 1,069,106 | 2,027,984 | ||||||
Shares issued upon reinvestment of dividends and distributions: | ||||||||
Class A | 14,489 | 23,284 | ||||||
Class C | 3,126 | 3,328 | ||||||
Class R | 285 | 147 | ||||||
Institutional Class | 35,607 | 44,280 | ||||||
|
|
|
| |||||
1,820,642 | 3,329,414 | |||||||
|
|
|
| |||||
Shares redeemed: | ||||||||
Class A | (135,572 | ) | (742,232 | ) | ||||
Class C | (43,877 | ) | (32,589 | ) | ||||
Class R | (1,489 | ) | (99 | ) | ||||
Institutional Class | (832,377 | ) | (3,229,334 | ) | ||||
|
|
|
| |||||
(1,013,315 | ) | (4,004,254 | ) | |||||
|
|
|
| |||||
Net increase (decrease) | 807,327 | (674,840 | ) | |||||
|
|
|
|
5. Line of Credit
The Fund, along with certain other funds in the Delaware Investments® Family of Funds (Participants), was a participant in a $225,000,000 revolving line of credit 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 were charged an annual commitment fee of 0.08%, which was allocated across the Participants on the basis of each Participant’s allocation of the entire facility. The Participants were permitted to borrow up to a maximum of one third of their net assets under the agreement. Each Participant was individually, and not jointly, liable for its particular advances, if any, under the line of credit. The line of credit under the agreement expired on Nov. 10, 2014.
On Nov. 10, 2014, the Fund, along with the other Participants, entered into an amendment to the agreement for a $275,000,000 revolving line of credit. The line of credit is to be used as described above
29
Table of Contents
Notes to financial statements
Delaware Global Real Estate Opportunities Fund
5. Line of Credit (continued)
and operates in substantially the same manner as the agreement described above. The line of credit available under the agreement expires on Nov. 9, 2015.
The Fund had no amounts outstanding as of April 30, 2015, or at any time during the period then ended.
6. Offsetting
In December 2011, the Financial Accounting Standards Board (FASB) issued guidance that expands current disclosure requirements on the offsetting of certain assets and liabilities. The disclosures are required for investments and derivative financial instruments subject to master netting or similar agreements which are eligible for offset on the “Statement of assets and liabilities” and requires an entity to disclose both gross and net information about such investments and transactions in the financial statements. In January 2013, the FASB issued guidance that clarifies which investments and transactions are subject to the offsetting disclosure requirements. The scope of the disclosure requirements for offsetting is limited to derivative instruments, repurchase agreements and reverse repurchase agreements, and securities borrowing. The guidance is effective for financial statements with fiscal years beginning on or after Jan. 1, 2013, and interim periods within those fiscal years.
In order to better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund entered into an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement) or a similar agreement with each of its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs certain over-the-counter (OTC) derivatives and foreign exchange contracts and typically contains, among other things, collateral posting items and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default (close-out), including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy, insolvency, or other events.
For financial reporting purposes, the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements on the “Statement of assets and liabilities.”
At April 30, 2015, the Fund had the following assets and liabilities subject to offsetting provisions:
Offsetting of Financial Assets and Liabilities and Derivative Assets and Liabilities
Counterparty | Gross Value of Derivative Asset | Gross Value of Derivative Liability | Net Position | |||
BNY Mellon | $— | $(4,186) | $(4,186) |
Counterparty | Net Position | Fair Value of | Cash Collateral Received | Fair Value of Non-Cash | Cash | Net Amount(a) | ||||||
BNY Mellon | $(4,186) | $— | $— | $— | $— | $(4,186) |
30
Table of Contents
Master Repurchase Agreements
Counterparty | Repurchase Agreements | Fair Value of Non-Cash Collateral Received | Cash Collateral Received | Net Amount(a) | ||||||||||||||||
Bank of America Merrill Lynch | $ | 731,029 | $ | (731,029 | ) | $ | — | $ | — | |||||||||||
Bank of Montreal | 609,191 | (609,191 | ) | — | — | |||||||||||||||
BNP Paribas | 721,780 | (721,780 | ) | — | — | |||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 2,062,000 | $ | (2,062,000 | ) | $ | — | $ | — | |||||||||||
|
|
|
|
|
|
|
|
(a)Net amount represents the net receivable/(payable) that would be due from/(to) the counterparty in an event of default.
7. Derivatives
U.S. 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 use these contracts to hedge the U.S. dollar value of securities it already owns that are denominated in foreign currencies. The Fund may also enter into these contracts to fix the U.S. 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. In addition, the Fund may enter into these contracts to facilitate or expedite the settlement of portfolio transactions. The change in value is recorded as an unrealized gain or loss. When the contract is closed, a realized gain or loss is recorded equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
The use of foreign currency exchange contracts and foreign cross currency exchange contracts does not eliminate fluctuations in the underlying prices of the securities, but does establish a rate of exchange that can be achieved in the future. Although foreign currency exchange contracts and foreign cross currency exchange contracts limit the risk of loss due to an unfavorable change in the value of the hedged currency, they also limit any potential gain that might result should the value of the currency change favorably. In addition, the Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. The Fund’s maximum risk of loss from counterparty credit risk is the value of its currency exchanged with the counterparty. The risk is generally mitigated by having a netting arrangement between the Fund and the counterparty and by the posting of collateral by the counterparty to the Fund to cover the Fund’s exposure to the counterparty.
During the six months ended April 30, 2015, the Fund held foreign currency exchange contracts, which are reflected on the “Statement of operations” under “Net realized gain (loss) on foreign currency exchange contracts.”
31
Table of Contents
Notes to financial statements
Delaware Global Real Estate Opportunities Fund
7. Derivatives (continued)
During the six months ended April 30, 2015, the Fund used foreign currency exchange contracts to fix the U.S. dollar value of a security between the trade date and settlement date.
Derivatives Generally. The table below summarizes the average balance of derivative holdings by the Fund during the six months ended April 30, 2015:
Long Derivative Volume | Short Derivative Volume | |||||||||||||||
Foreign currency exchange contracts (average cost) | USD | 136,532 | USD | 136,663 |
8. Securities Lending
The Fund, along with other funds in the Delaware Investments® Family of 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 U.S. securities and foreign securities that are denominated and payable in U.S. 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.
Cash collateral received is generally invested in the Delaware Investments Collateral Fund No. 1 (Collective Trust) established by BNY Mellon for the purpose of investment on behalf of funds managed by DMC that participate in BNY Mellon’s securities lending program. The Collective Trust may invest in U.S. government securities and high-quality corporate debt, asset-backed and other money market securities, and in repurchase agreements collateralized by such securities, provided that the Collective Trust will generally have a dollar-weighted average portfolio maturity of 60 days or less. The Fund can also accept U.S. 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
32
Table of Contents
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 Collective Trust used for the investment of cash collateral received from borrowers of securities seeks to maintain a net asset value per unit of $1.00, but there can be no assurance that it will always be able to do so. The Fund may incur investment losses as a result of investing securities lending collateral in the Collective Trust. This could occur if an investment in the Collective Trust defaulted or if it were necessary to liquidate assets in the Collective Trust to meet returns on outstanding security loans at a time when the Collective Trust’s net asset value per unit was less than $1.00. Under those circumstances, the Fund may not receive an amount from the Collective Trust that is equal in amount to the collateral the Fund would be required to return to the borrower of the securities and the Fund would be required to make up for this shortfall.
During the six months ended April 30, 2015, the Fund had no securities out on loan.
9. Credit and Market Risk
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 United States. 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 concentrates its investments in the real estate industry 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. The Fund is also affected by interest rate changes, particularly if the REITs it holds use floating rate debt to finance their ongoing operations. Its investments may also tend to fluctuate more in value than a portfolio that invests in a broader range of industries.
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 Fund’s 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
33
Table of Contents
Notes to financial statements
Delaware Global Real Estate Opportunities Fund
9. Credit and Market Risk (continued)
on investments in illiquid securities. As of April 30, 2015, there were no Rule 144A securities held by the Fund. Illiquid securities 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 June 2014, the FASB issued guidance to improve the financial reporting of reverse repurchase agreements and other similar transactions. The guidance includes expanded disclosure requirements for entities that enter into reverse repurchase agreements and similar transactions accounted for as secured borrowings. The guidance is effective for financial statements with fiscal years beginning on or after Dec. 15, 2014 and interim periods within those fiscal years. Management has determined that this pronouncement has no impact to the Fund’s financial statements.
12. Subsequent Events
Management has determined that no material events or transactions occurred subsequent to April 30, 2015 that would require recognition or disclosure in the Fund’s financial statements.
34
Table of Contents
Other Fund information (Unaudited)
Delaware Global Real Estate Opportunities Fund
Proxy Results
At Joint Special Meetings of Shareholders of Delaware Group® Adviser Funds (the “Trust”), on behalf of Delaware Diversified Income Fund, Delaware Global Real Estate Opportunities Fund, and Delaware U.S. Growth Fund (each, a “Fund” and together, the “Funds”), held on March 31, 2015 and reconvened to April 21, 2015 and May 12, 2015 for the proposals listed in items (ii) and (iii) below for Delaware Diversified Income Fund, the shareholders of the Trust/the Funds voted to: (i) elect a Board of Trustees for the Trust; (ii) approve the implementation of a new “manager of managers” order for the Funds; (iii) revise the fundamental investment restriction relating to lending for the Funds; and (iv)(a) revise provisions of the Trust’s Agreement and Declaration of Trust related to documenting the transfer of shares, (iv)(b) revise provisions of the Trust’s Agreement and Declaration of Trust related to shareholder disclosure of certain information upon board demand, and (iv)(c) revise provisions of the Trust’s By-Laws so that Delaware law will apply to matters related to proxies. At the meeting, the following people were elected to serve as Independent Trustees: Thomas L. Bennett, Ann D. Borowiec, Joseph W. Chow, John A. Fry, Lucinda S. Landreth, Frances A. Sevilla-Sacasa, Thomas K. Whitford, Janet L. Yeomans, and J. Richard Zecher. In addition, Patrick P. Coyne was elected to serve as an Interested Trustee.
The following proposals were submitted for a vote of the shareholders:
1. To elect a Board of Trustees for the Trust.
A quorum of shares outstanding of the Funds of the Trust was present, and the votes passed with a plurality of these Shares.
Shares Voted For | % of Shares | % of Shares Voted | Shares Withheld | % of Outstanding Shares | % of Shares Voted | |||||||||||||||||||
Thomas L. Bennett | 377,368,701.625 | 48.448% | 98.301% | 6,520,382.325 | 0.837% | 1.699% | ||||||||||||||||||
Ann D. Borowiec | 377,497,661.478 | 48.464% | 98.335% | 6,391,422.472 | 0.821% | 1.665% | ||||||||||||||||||
Joseph W. Chow | 377,534,720.702 | 48.469% | 98.345% | 6,354,363.248 | 0.816% | 1.655% | ||||||||||||||||||
Patrick P. Coyne | 377,414,270.764 | 48.453% | 98.313% | 6,474,813.186 | 0.831% | 1.687% | ||||||||||||||||||
John A. Fry | 377,491,073.066 | 48.463% | 98.333% | 6,398,010.884 | 0.821% | 1.667% | ||||||||||||||||||
Lucinda S. Landreth | 377,396,976.901 | 48.451% | 98.309% | 6,492,107.049 | 0.833% | 1.691% | ||||||||||||||||||
Frances A. Sevilla-Sacasa | 377,431,097.052 | 48.456% | 98.318% | 6,457,986.898 | 0.829% | 1.682% | ||||||||||||||||||
Thomas K. Whitford | 377,574,025.766 | 48.474% | 98.355% | 6,315,058.184 | 0.811% | 1.645% | ||||||||||||||||||
Janet L. Yeomans | 377,532,727.906 | 48.469% | 98.344% | 6,356,356.044 | 0.816% | 1.656% | ||||||||||||||||||
J. Richard Zecher | 377,320,103.052 | 48.441% | 98.289% | 6,568,980.898 | 0.843% | 1.711% |
35
Table of Contents
Other Fund information (Unaudited)
Delaware Global Real Estate Opportunities Fund
Proxy Results (continued)
2. To approve the implementation of a new “manager of managers” order.
A quorum of the shares outstanding of each Fund was present, and the votes passed with the required majority of those shares. The results were as follows:
Delaware Diversified Income Fund
Shares voted for | 237,724,523.189 | |||
Percentage of outstanding shares | 37.202 | % | ||
Percentage of shares voted | 72.243 | % | ||
Shares voted against | 11,256,121.007 | |||
Percentage of outstanding shares | 1.761 | % | ||
Percentage of shares voted | 3.421 | % | ||
Shares abstained | 8,367,609.174 | |||
Percentage of outstanding shares | 1.309 | % | ||
Percentage of shares voted | 2.543 | % | ||
Broker non-votes | 71,712,447.899 | |||
Delaware Global Real Estate Opportunities Fund | ||||
Shares voted for | 6,077,891.020 | |||
Percentage of outstanding shares | 80.832 | % | ||
Percentage of shares voted | 82.280 | % | ||
Shares voted against | 11,008.448 | |||
Percentage of outstanding shares | 0.146 | % | ||
Percentage of shares voted | 0.149 | % | ||
Shares abstained | 31,761.948 | |||
Percentage of outstanding shares | 0.422 | % | ||
Percentage of shares voted | 0.430 | % | ||
Broker non-votes | 1,266,215.000 | |||
Delaware U.S. Growth Fund | ||||
Shares voted for | 63,584,366.207 | |||
Percentage of outstanding shares | 48.028 | % | ||
Percentage of shares voted | 79.302 | % | ||
Shares voted against | 2,815,123.196 | |||
Percentage of outstanding shares | 2.126 | % | ||
Percentage of shares voted | 3.511 | % | ||
Shares abstained | 310,995.891 | |||
Percentage of outstanding shares | 0.235 | % | ||
Percentage of shares voted | 0.388 | % | ||
Broker non-votes | 13,469,786.000 |
36
Table of Contents
3. To revise the fundamental investment restriction relating to lending.
A quorum of the shares outstanding of each Fund was present, and the votes passed with the required majority of those shares. The results were as follows:
Delaware Diversified Income Fund
Shares voted for | 236,542,353.523 | |||
Percentage of outstanding shares | 37.017 | % | ||
Percentage of shares voted | 71.884 | % | ||
Shares voted against | 11,721,375.093 | |||
Percentage of outstanding shares | 1.834 | % | ||
Percentage of shares voted | 3.562 | % | ||
Shares abstained | 9,084,523.754 | |||
Percentage of outstanding shares | 1.422 | % | ||
Percentage of shares voted | 2.761 | % | ||
Broker non-votes | 71,712,448.899 | |||
Delaware Global Real Estate Opportunities Fund | ||||
Shares voted for | 6,085,238.221 | |||
Percentage of outstanding shares | 80.929 | % | ||
Percentage of shares voted | 82.379 | % | ||
Shares voted against | 25,022.195 | |||
Percentage of outstanding shares | 0.333 | % | ||
Percentage of shares voted | 0.339 | % | ||
Shares abstained | 10,402.000 | |||
Percentage of outstanding shares | 0.138 | % | ||
Percentage of shares voted | 0.141 | % | ||
Broker non-votes | 1,266,214.000 | |||
Delaware U.S. Growth Fund | ||||
Shares voted for | 66,013,088.616 | |||
Percentage of outstanding shares | 49.862 | % | ||
Percentage of shares voted | 82.331 | % | ||
Shares voted against | 361,043.749 | |||
Percentage of outstanding shares | 0.273 | % | ||
Percentage of shares voted | 0.450 | % | ||
Shares abstained | 336,348.929 | |||
Percentage of outstanding shares | 0.254 | % | ||
Percentage of shares voted | 0.419 | % | ||
Broker non-votes | 13,469,790.000 |
37
Table of Contents
Other Fund information (Unaudited)
Delaware Global Real Estate Opportunities Fund
Proxy Results (continued)
4. (a) To revise provisions of the Trust’s Agreement and Declaration of Trust related to documenting the transfer of shares.
A quorum of the shares outstanding of the Trust was present, and the votes passed with a majority of those shares. The results were as follows:
Delaware Group® Adviser Funds
Shares voted for | 276,841,786.289 | |||
Percentage of outstanding shares | 35.542 | % | ||
Percentage of shares voted | 72.115 | % | ||
Shares voted against | 5,466,797.899 | |||
Percentage of outstanding shares | 0.702 | % | ||
Percentage of shares voted | 1.424 | % | ||
Shares abstained | 6,966,088.763 | |||
Percentage of outstanding shares | 0.894 | % | ||
Percentage of shares voted | 1.815 | % | ||
Broker non-votes | 94,614,410.999 |
4. (b) To revise provisions of the Trust’s Agreement and Declaration of Trust related to shareholder disclosure of certain information upon board demand.
A quorum of the shares outstanding of the Trust was present, and the votes passed with a majority of those shares. The results were as follows:
Delaware Group Adviser Funds
Shares voted for | 276,183,863.480 | |||
Percentage of outstanding shares | 35.457 | % | ||
Percentage of shares voted | 71.944 | % | ||
Shares voted against | 6,322,961.795 | |||
Percentage of outstanding shares | 0.812 | % | ||
Percentage of shares voted | 1.647 | % | ||
Shares abstained | 6,767,846.676 | |||
Percentage of outstanding shares | 0.869 | % | ||
Percentage of shares voted | 1.763 | % | ||
Broker non-votes | 94,614,411.999 |
38
Table of Contents
4. (c) To revise provisions of the Trust’s By-Laws so that Delaware law will apply to matters related to proxies.
A quorum of the shares outstanding of the Trust was present, and the votes passed with a majority of those shares. The results were as follows:
Delaware Group® Adviser Funds
Shares voted for | 277,825,824.039 | |||
Percentage of outstanding shares | 35.668 | % | ||
Percentage of shares voted | 72.371 | % | ||
Shares voted against | 5,038,256.207 | |||
Percentage of outstanding shares | 0.647 | % | ||
Percentage of shares voted | 1.312 | % | ||
Shares abstained | 6,410,588.705 | |||
Percentage of outstanding shares | 0.823 | % | ||
Percentage of shares voted | 1.670 | % | ||
Broker non-votes | 94,614,414.999 |
39
Table of Contents
Board of trustees
Thomas L. Bennett Chairman of the Board Delaware Investments® Family of Funds Private Investor Rosemont, PA
Ann D. Borowiec Former Chief Executive Officer Private Wealth Management J.P. Morgan Chase & Co. New York, NY | Joseph W. Chow Former Executive Vice President State Street Corporation Brookline, MA
John A. Fry President Drexel University Philadelphia, PA | Lucinda S. Landreth Former Chief Investment Officer Assurant, Inc. New York, NY
Frances A. Sevilla-Sacasa Chief Executive Officer Banco Itaú International Miami, FL | Thomas K. Whitford Former Vice Chairman PNC Financial Services Group Pittsburgh, PA
Janet L. Yeomans Former Vice President and Treasurer 3M Corporation St. Paul, MN
J. Richard Zecher Founder Investor Analytics Scottsdale, AZ |
Affiliated officers
Roger A. Early President and Chief Executive Officer Delaware Investments Family of Funds Philadelphia, PA | David F. Connor Senior Vice President, General Counsel, and Secretary Delaware Investments Family of Funds Philadelphia, PA | Daniel V. Geatens Vice President and Treasurer Delaware Investments Family of Funds Philadelphia, PA | Richard Salus Senior Vice President and Chief Financial Officer Delaware Investments Family of Funds Philadelphia, PA |
This semiannual report is for the information of Delaware Global Real Estate Opportunities Fund shareholders, but it may be used with prospective investors when preceded or accompanied by the Delaware Investments Fund fact sheet for the most recently completed calendar quarter. These documents are available at delawareinvestments.com.
Delaware Investments is the marketing name of Delaware Management Holdings, Inc. and its subsidiaries.
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-Q. The Fund’s Forms N-Q, 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-Q are available without charge on the Fund’s website at delawareinvestments.com. The Fund’s Forms N-Q 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 delawareinvestments.com; and (ii) on the SEC’s website at sec.gov.
40
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 officer have evaluated the registrant’s disclosure controls and procedures within 90 days of the filing of this report and have concluded that they are effective in providing reasonable assurance that the information required to be disclosed by the registrant in its reports or statements filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.
There were no significant changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by the report to stockholders included herein (i.e., the registrant’s second fiscal quarter) that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits
(a) | (1) Code of Ethics | |
Not applicable. | ||
(2) Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 30a-2 under the Investment Company Act of 1940 are attached hereto as Exhibit 99.CERT. | ||
(3) Written solicitations to purchase securities pursuant to Rule 23c-1 under the Securities Exchange Act of 1934. | ||
Not applicable. | ||
(b) | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are furnished herewith as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf, by the undersigned, thereunto duly authorized.
DELAWARE GROUP® ADVISER FUNDS
/s/ ROGER A. EARLY | |
By: | Roger A. Early |
Title: | Chief Executive Officer |
Date: | July 2, 2015 |
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/ ROGER A. EARLY | |
By: | Roger A. Early |
Title: | Chief Executive Officer |
Date: | July 2, 2015 |
| |
/s/ RICHARD SALUS | |
By: | Richard Salus |
Title: | Chief Financial Officer |
Date: | July 2, 2015 |