Item 1. Reports to Stockholders
Annual report
Income and growth mutual fund
Delaware
Dividend Income Fund
November
30, 2013
|
Carefully consider the Funds
investment objectives, risk factors, charges, and expenses before
investing. This and other information can be found in the Funds
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.
|
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 Dividend 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 Dividend 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.
Table of
contents
|
|
Portfolio management
review
|
1
|
Performance summary
|
4
|
Disclosure of Fund
expenses
|
8
|
Security type/sector
allocation
|
|
and top 10 equity holdings
|
10
|
Schedule of
investments
|
13
|
Statement of assets and
liabilities
|
36
|
Statement of
operations
|
38
|
Statements of changes in net
assets
|
40
|
Financial
highlights
|
42
|
Notes to financial statements
|
52
|
Report of independent
registered
|
|
public accounting
firm
|
69
|
Other Fund information
|
70
|
Board of
trustees/directors and
|
|
officers
addendum
|
74
|
About the organization
|
82
|
Unless otherwise noted, views expressed
herein are current as of Nov. 30, 2013, and subject to change.
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 Funds distributor,
Delaware Distributors, L.P.
Macquarie
Group refers to Macquarie Group Limited and its subsidiaries and affiliates
worldwide.
© 2013 Delaware Management Holdings,
Inc.
All third-party marks cited are the
property of their respective owners.
Portfolio management review
Delaware Dividend Income Fund
|
December
10, 2013
|
Performance preview (for
the year ended November 30, 2013)
|
Delaware Dividend Income Fund (Class A shares)
|
1-year return
|
|
+20.07%
|
S&P 500
®
Index (benchmark)
|
1-year return
|
|
+30.30%
|
Lipper Mixed-Asset Target Allocation Moderate Funds
Average
|
1-year return
|
|
+14.14%
|
Past performance does not guarantee
future results.
For complete, annualized performance for
Delaware Dividend Income Fund, please see the table on page 4.
The performance of Class A shares excludes
the applicable sales charge and reflects the reinvestment of all distributions.
The Lipper Mixed-Asset Target Allocation Moderate Funds Average compares funds
that, by portfolio practice, maintain a mix of between 40% and 60% equity
securities, with the remainder invested in bonds, cash, and cash equivalents.
Index performance returns do not reflect any management fees, transaction costs,
or expenses. Indices are unmanaged and one cannot invest directly in an
index.
For its fiscal year ended Nov. 30, 2013,
Delaware Dividend Income Fund (Class A shares) returned +20.07% at net asset
value and +13.14% at maximum offer price (both figures reflect all distributions
invested). The Fund underperformed its benchmark, the S&P 500 Index, which
returned +30.30% for the same time frame. Complete annualized performance for
Delaware Dividend Income Fund is shown in the table on page 4.
Stocks outpaced other asset
classes
Developed market stocks enjoyed strong
results during the fiscal year ended Nov. 30, 2013, aided by the presence of
quantitative easing (QE) programs large-scale economic stimulus efforts
implemented by central banks in an effort to lift asset values.
The U.S. Federal Reserve, for example,
implemented a third round of QE, consisting of $85 billion in monthly Treasury
and mortgage-backed security purchases. In May 2013, Fed Chairman Ben Bernanke
announced the central banks intention to begin tapering its bond purchases if
the U.S. economy were to demonstrate signs of sustained economic
growth.
We continue to believe that investors
should consider taking a total-return approach to investing in income-oriented
securities. We believe yield is an important criterion for deciding whether an
investment is worth owning, but certainly not the only one. In short: We believe
valuation matters. Accordingly, our investment discipline continues to focus not
just on how much income a security may provide, but on how much value it may
have the potential to deliver to the Funds shareholders over time.
1
Portfolio management
review
Delaware Dividend Income
Fund
Despite investors initial concerns about
tapering, the bond-buying program remained in place through the remainder of the
Funds fiscal year, as the U.S. economy continued its subdued growth.
Against this backdrop, equity investments
performed particularly well. Income-oriented investments such as high yield
bonds and real estate investment trusts (REITs) both of which struggled in the
summer months, concurrent with the heightened concerns about QE tapering also
generated positive performance, but did not keep pace with the equity
market.
Challenges from REITs and
convertibles
Given the equity markets strong
performance during the Funds fiscal year, our portfolio allocation to
income-oriented asset classes weighed on results in relative terms. For example,
REITs, which made up about 6% of the portfolio at period end, struggled amid a
rising interest rate environment. As measured by the FTSE NAREIT Equity REITs
Index, the REIT market was up 6% during the period more than 20 percentage
points behind the S&P 500 Index. Individual REIT holdings that detracted
most from Fund performance included healthcare property company
HCP
, office industrial REIT
Liberty Property Trust
, and regional mall operator
CBL & Associates Properties
.
The Funds allocation to convertible
securities representing 14% of the portfolio at the end of the fiscal year
was another source of underperformance. Its holdings in convertible securities
tended to be higher yielding than the overall convertibles market and priced at
a premium, which made them less sensitive to strength in the equity market.
A beneficial equity
allocation
The Funds sizeable equity-market exposure
helped drive performance during the fiscal year. As of Nov. 30, 2013, about half
of the portfolio was invested in U.S. large-cap value stocks a segment of the
market that enjoyed very strong results during the year while the Funds
roughly 5% stake in foreign developed-market equities also added to
results.
The Funds leading individual equity
contributors during the fiscal year included
Johnson Controls
, which makes heating
and air conditioning systems;
Xerox
, a leading printer manufacturer;
and defense contractor
Northrop
Grumman.
Of final note, the Fund maintained certain
positions in derivative securities in an attempt to help the Fund generate
attractive returns while also seeking to manage the Funds overall level of
risk. These positions included high yield bond credit default swaps and foreign
currency hedges to help manage currency risk associated with the Funds
international fixed income investments. We also wrote options on stock positions
in the portfolio in an attempt to provide additional downside protection. None
of these positions had a material effect on the Funds performance during the
fiscal year.
Consistent portfolio
positioning
Our basic strategy remained the same
during this reporting period, as it does throughout a variety of market
conditions. We continued to strive to purchase a diversified collection of
income-generating securities that we believe have the potential to provide a
competitive yield but greater upside potential than bonds, while at the same
time potentially providing higher yields than equities but with better downside
protection.
2
During the Funds fiscal year, we kept the
Funds portfolio positioning largely consistent. Well before the start of the
fiscal year, we had determined that most income-oriented securities such as
investment grade bonds, high yield bonds, utility-company stocks, master limited
partnerships, and REITs had become expensive and, in our view, many of these
securities no longer offered good value for the Fund. Accordingly, we began the
period in December 2012 with relatively limited exposure to these yield-oriented
asset classes and generally preserved that stance throughout the subsequent 12
months.
The Fund ended the fiscal year with an 18%
allocation to high yield bonds, down from 22% at the start of the period. While
we generally remained comfortable with the credit quality of high yield issuers,
their high valuations were a source of some concern. Our search for
better-valued opportunities continued to lead us to areas of the equity market.
Focused on total return
By the end of the Funds fiscal year, the
Funds portfolio continued to emphasize equities; however, we were aware that
stock valuations, after a long rally, were no longer as attractive as they had
been in prior quarters. Accordingly, we remained focused on trying to identify
what we considered to be good large-cap value stocks at a reasonable price. We
also sought to take advantage of value wherever we believed we could find it,
which involved establishing inaugural positions in two new asset classes for the
Fund: municipal bonds and emerging market debt, both of which had begun to offer
what we saw as a worthwhile risk-return trade-off.
We continue to believe that investors
should consider taking a total-return approach to investing in income-oriented
securities. We believe yield is an important criterion for deciding whether an
investment is worth owning, but certainly not the only one. In short: We believe
valuation matters. Accordingly, our investment discipline continues to focus not
just on how much income a security may provide, but on how much value it may
have the potential to deliver to the Funds shareholders over time.
3
Performance
summary
Delaware Dividend Income Fund
|
November 30,
2013
|
The performance data quoted represent
past performance; past performance does not guarantee future results. Investment
return and principal value will fluctuate so your shares, when redeemed, may be
worth more or less than their original cost. Please obtain the performance data
current for the most recent month end by calling 800 523-1918 or visiting our
website at delawareinvestments.com/performance. Current performance may be lower
or higher than the performance data quoted.
Fund and benchmark
performance
1,2
|
Average annual total
returns through November 30, 2013
|
|
|
|
|
|
1 year
|
|
5 years
|
|
10 years
|
Class A (Est. Dec. 2, 1996)
|
|
|
|
|
|
|
|
|
|
Excluding sales charge
|
|
|
|
|
+20.07%
|
|
+17.43%
|
|
+6.89%
|
Including sales
charge
|
|
|
|
|
+13.14%
|
|
+16.05%
|
|
+6.27%
|
Class B (Est. Oct. 1, 2003)
|
|
|
|
|
|
|
|
|
|
Excluding sales charge
|
|
|
|
|
+19.15%
|
|
+16.57%
|
|
+6.25%
|
Including sales
charge
|
|
|
|
|
+15.15%
|
|
+16.33%
|
|
+6.25%
|
Class C (Est. Oct. 1, 2003)
|
|
|
|
|
|
|
|
|
|
Excluding sales charge
|
|
|
|
|
+19.13%
|
|
+16.56%
|
|
+6.10%
|
Including sales
charge
|
|
|
|
|
+18.13%
|
|
+16.56%
|
|
+6.10%
|
Class R (Est. Oct. 1, 2003)
|
|
|
|
|
|
|
|
|
|
Excluding sales charge
|
|
|
|
|
+19.77%
|
|
+17.16%
|
|
+6.60%
|
Including sales
charge
|
|
|
|
|
+19.77%
|
|
+17.16%
|
|
+6.60%
|
Institutional Class (Est. Dec. 2,
1996)
|
|
|
|
|
|
|
|
|
|
Excluding sales charge
|
|
|
|
|
+20.37%
|
|
+17.73%
|
|
+7.16%
|
Including sales
charge
|
|
|
|
|
+20.37%
|
|
+17.73%
|
|
+7.16%
|
S&P 500
Index
|
|
|
|
|
+30.30%
|
|
+17.60%
|
|
+7.69%
|
1
Returns reflect the
reinvestment of all distributions and are presented both with and without the
applicable sales charges described below. Returns do not reflect the deduction
of taxes the shareholder would pay on Fund distributions or redemptions of Fund
shares.
Expense limitations were in effect for
certain classes during some or all of the periods shown in the Fund
performance chart. Expenses for each class are listed on the Fund expense
ratios table on page 5. Performance would have been lower had expense
limitations not been in effect.
Class A shares are sold with a maximum
front-end sales charge of 5.75%, and have an annual distribution and service fee
of 0.25% of average
daily net assets. Prior to
Oct. 1, 2013, Class A shares had an annual distribution and service fee of 0.30%
of average daily net assets. This fee was contractually limited to 0.25% during
the period from Dec. 1, 2012 until Oct. 1, 2013. Performance for Class A shares,
excluding sales charges, assumes that no front-end sales charge applied.
Performance for Class A shares, excluding sales charges, assumes that no
front-end sales charge applied.
Class B shares may be purchased only
through dividend reinvestment and certain permitted exchanges as described in
the prospectus. Please see the prospectus for additional information on Class B
shares. Class B shares have a contingent
4
deferred sales charge that declines from
4.00% to zero depending on the period of time the shares are held. They are also
subject to an annual distribution and service fee of 1.00% of average daily net
assets. Class B shares will automatically convert to Class A shares on a
quarterly basis approximately eight years after purchase. Ten-year performance
figures for Class B shares reflect conversion to Class A shares after
approximately eight years.
Class C shares are sold with a contingent
deferred sales charge of 1.00% if redeemed during the first 12 months. They are
also subject to an annual distribution and service fee of 1.00% of average daily
net assets.
Performance for Class B and C shares, excluding sales charges,
assumes either that contingent deferred sales charges did not apply or that the
investment was not redeemed.
Class R shares are available only for
certain retirement plan products. They are sold without a sales charge and have
an annual distribution and service fee of 0.50% of average daily net assets.
Prior to Oct. 1, 2013, Class R shares had an annual distribution and service fee
of 0.60% of average daily net assets. This fee was contractually limited to
0.50% during the period from Dec. 1, 2012 until Oct. 1, 2013.
Institutional Class shares are available
without sales or asset-based distribution charges only to certain eligible
institutional accounts.
The Fund performance table and the
Performance of a $10,000 investment graph do not reflect the deduction of
taxes the shareholder would pay on Fund distributions or redemptions of Fund
shares.
Fixed income securities and bond funds can
lose value, and investors can lose principal, as interest rates rise. They also
may be affected by economic conditions that hinder an issuers ability to make
interest and principal payments on its debt.
The Fund may also be subject to prepayment
risk, the risk that the principal of a fixed income security that is held by the
Fund may be prepaid prior to maturity, potentially forcing the Fund to reinvest
that money at a lower interest rate.
High yielding, noninvestment grade bonds
(junk bonds) involve higher risk than investment grade bonds. The high yield
secondary market is particularly susceptible to liquidity problems when
institutional investors, such as mutual funds and certain other financial
institutions, temporarily stop buying bonds for regulatory, financial, or other
reasons. In addition, a less liquid secondary market makes it more difficult for
the Fund to obtain precise valuations of the high yield securities in its
portfolio.
Diversification may not protect against
market risk.
2
The Funds expense ratios, as
described in the most recent prospectus and any applicable supplement(s), are
disclosed in the following Fund expense ratios table.
Fund expense ratios
|
Class A
|
|
Class B
|
|
Class C
|
|
Class R
|
|
Institutional Class
|
Total annual
operating expenses
|
|
1.16
|
%
|
|
|
|
1.91
|
%
|
|
|
|
1.91
|
%
|
|
|
|
1.41
|
%
|
|
|
|
0.91
|
%
|
|
(without fee
waivers)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net expenses
|
|
1.16
|
%
|
|
|
|
1.91
|
%
|
|
|
|
1.91
|
%
|
|
|
|
1.41
|
%
|
|
|
|
0.91
|
%
|
|
(including fee waivers, if
any)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Type of waiver
|
|
n/a
|
|
|
|
|
n/a
|
|
|
|
|
n/a
|
|
|
|
|
n/a
|
|
|
|
|
n/a
|
|
|
5
Performance
summary
Delaware Dividend Income
Fund
Performance of a $10,000
investment
1
Average annual
total returns from Nov. 30, 2003, through Nov. 30, 2013
For period beginning Nov. 30, 2003, through Nov. 30, 2013
|
Starting
value
|
Ending
value
|
|
|
S&P
500 Index
|
$10,000
|
$20,968
|
|
|
Delaware Dividend Income Fund
Class A shares
|
$9,425
|
$18,358
|
1
The Performance of a $10,000
investment graph assumes $10,000 invested in Class A shares of the Fund on Nov.
30, 2003, and includes the effect of a 5.75% front-end sales charge and the
reinvestment of all distributions. The graph does not reflect the deduction of
taxes the shareholders would pay on Fund distributions or redemptions of Fund
shares. Expense limitations were in effect for some or all of the periods shown.
Performance would have been lower had expense limitations not been in effect.
Expenses are listed in the Fund expense ratios table on page 5. Please note
additional details on pages 4 through 6.
The chart also assumes $10,000 invested in
the S&P 500 Index as of Nov. 30, 2003. The S&P 500 Index measures the
performance
of 500 mostly large-cap stocks
weighted by market value, and is often used to represent performance of the U.S.
stock market.
The FTSE NAREIT Equity REITs Index, mentioned on page 2, measures
the performance of all publicly traded equity real estate investment trusts
(REITs) traded on U.S. exchanges, excluding timber REITs.
Index performance returns do not reflect
any management fees, transaction costs, or expenses. Indices are unmanaged and
one cannot invest directly in an index. Past performance is not a guarantee of
future results.
Performance of other Fund classes will
vary due to different charges and expenses.
|
|
Nasdaq
symbols
|
|
CUSIPs
|
|
Class A
|
|
|
DDIAX
|
|
|
|
24610B107
|
|
|
Class B
|
|
|
DDDBX
|
|
|
|
24610B206
|
|
|
Class C
|
|
|
DDICX
|
|
|
|
24610B305
|
|
|
Class R
|
|
|
DDDRX
|
|
|
|
24610B842
|
|
|
Institutional Class
|
|
|
DDIIX
|
|
|
|
24610B404
|
|
|
6
Disclosure of Fund expenses
For the six-month period from June 1, 2013
to November 30, 2013 (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 June 1, 2013 to Nov. 30, 2013.
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 Funds actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Funds
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 Funds expenses shown in the table reflect fee
waivers in effect. The expenses shown in the table assume reinvestment of all
dividends and distributions.
8
Delaware Dividend Income
Fund
Expense analysis of an investment
of $1,000
|
Beginning
|
|
Ending
|
|
|
|
Expenses
|
|
Account Value
|
|
Account Value
|
|
Annualized
|
|
Paid During Period
|
|
6/1/13
|
|
11/30/13
|
|
Expense Ratio
|
|
6/1/13 to
11/30/13*
|
Actual Fund return
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
$
|
1,000.00
|
|
|
|
$
|
1,067.30
|
|
|
1.12%
|
|
|
$
|
5.80
|
|
Class B
|
|
|
1,000.00
|
|
|
|
|
1,063.10
|
|
|
1.87%
|
|
|
|
9.67
|
|
Class C
|
|
|
1,000.00
|
|
|
|
|
1,064.00
|
|
|
1.87%
|
|
|
|
9.68
|
|
Class R
|
|
|
1,000.00
|
|
|
|
|
1,066.00
|
|
|
1.37%
|
|
|
|
7.10
|
|
Institutional
Class
|
|
|
1,000.00
|
|
|
|
|
1,068.60
|
|
|
0.87%
|
|
|
|
4.51
|
|
Hypothetical 5% return
(5% return before expenses)
|
|
|
|
|
|
|
|
|
Class A
|
|
$
|
1,000.00
|
|
|
|
$
|
1,019.45
|
|
|
1.12%
|
|
|
$
|
5.67
|
|
Class B
|
|
|
1,000.00
|
|
|
|
|
1,015.69
|
|
|
1.87%
|
|
|
|
9.45
|
|
Class C
|
|
|
1,000.00
|
|
|
|
|
1,015.69
|
|
|
1.87%
|
|
|
|
9.45
|
|
Class R
|
|
|
1,000.00
|
|
|
|
|
1,018.20
|
|
|
1.37%
|
|
|
|
6.93
|
|
Institutional
Class
|
|
|
1,000.00
|
|
|
|
|
1,020.71
|
|
|
0.87%
|
|
|
|
4.41
|
|
*
Expenses Paid During Period are equal
to the Funds annualized expense ratio, multiplied by the average account value
over the period, multiplied by 183/365 (to reflect the one-half year
period).
Because actual returns reflect only the
most recent six month period, the returns shown may differ significantly from
fiscal year returns.
9
Security type/sector allocation and
top 10 equity
holdings
Delaware Dividend Income Fund
|
As of November 30, 2013
(Unaudited)
|
Sector designations may be different than
the sector designations presented in other Fund materials. The sector
designations may represent the investment managers internal sector
classifications, which may result in the sector designations for one fund being
different than another funds sector designations.
Sector
|
Percentage of net
assets
|
Common Stock
|
|
63.41
|
%
|
|
Consumer Discretionary
|
|
4.92
|
%
|
|
Consumer Staples
|
|
6.43
|
%
|
|
Diversified REITs
|
|
0.37
|
%
|
|
Energy
|
|
7.83
|
%
|
|
Financials
|
|
6.83
|
%
|
|
Healthcare
|
|
9.65
|
%
|
|
Healthcare REITs
|
|
0.47
|
%
|
|
Hotel REITs
|
|
0.68
|
%
|
|
Industrial REITs
|
|
0.27
|
%
|
|
Industrials
|
|
5.55
|
%
|
|
Information Technology
|
|
9.22
|
%
|
|
Mall REITs
|
|
0.95
|
%
|
|
Manufactured Housing REITs
|
|
0.22
|
%
|
|
Materials
|
|
1.91
|
%
|
|
Mixed REITs
|
|
0.94
|
%
|
|
Multifamily REITs
|
|
0.81
|
%
|
|
Office REITs
|
|
0.26
|
%
|
|
Shopping Center REITs
|
|
0.98
|
%
|
|
Single Tenant REIT
|
|
0.07
|
%
|
|
Telecommunications
|
|
3.43
|
%
|
|
Utilities
|
|
1.62
|
%
|
|
Convertible
Preferred Stock
|
|
3.17
|
%
|
|
Commercial
Mortgage-Backed Securities
|
|
0.35
|
%
|
|
10
Sector
|
Percentage of net
assets
|
Convertible Bonds
|
|
10.73
|
%
|
|
Basic Industry
|
|
0.22
|
%
|
|
Capital Goods
|
|
0.97
|
%
|
|
Communications
|
|
2.27
|
%
|
|
Consumer Cyclical
|
|
1.46
|
%
|
|
Consumer Non-Cyclical
|
|
1.68
|
%
|
|
Energy
|
|
0.79
|
%
|
|
Financials
|
|
1.26
|
%
|
|
Industrials
|
|
0.11
|
%
|
|
Insurance
|
|
0.16
|
%
|
|
Technology
|
|
1.81
|
%
|
|
Corporate Bonds
|
|
13.77
|
%
|
|
Automobiles
|
|
0.62
|
%
|
|
Banking
|
|
0.32
|
%
|
|
Basic Industry
|
|
1.71
|
%
|
|
Capital Goods
|
|
0.70
|
%
|
|
Communications
|
|
1.43
|
%
|
|
Consumer Cyclical
|
|
1.10
|
%
|
|
Consumer Non-Cyclical
|
|
0.39
|
%
|
|
Energy
|
|
1.95
|
%
|
|
Financials
|
|
0.24
|
%
|
|
Healthcare
|
|
1.04
|
%
|
|
Industrials
|
|
0.05
|
%
|
|
Insurance
|
|
0.45
|
%
|
|
Media
|
|
1.07
|
%
|
|
Service-Other
|
|
1.24
|
%
|
|
Technology
|
|
0.94
|
%
|
|
Utilities
|
|
0.52
|
%
|
|
11
Security type/sector
allocation and
top 10 equity holdings
Delaware Dividend Income Fund
Sector
|
Percentage of net assets
|
Municipal Bonds
|
|
0.53
|
%
|
|
Leveraged Non-Recourse
Securities
|
|
0.00
|
%
|
|
Senior Secured Loans
|
|
1.56
|
%
|
|
Sovereign
Bonds
|
|
0.87
|
%
|
|
Brazil
|
|
0.46
|
%
|
|
Mexico
|
|
0.41
|
%
|
|
Limited Partnership
|
|
0.18
|
%
|
|
Preferred Stock
|
|
0.53
|
%
|
|
Short-Term Investments
|
|
5.01
|
%
|
|
Total Value of Securities
|
|
100.11
|
%
|
|
Options Written
|
|
(0.01
|
%)
|
|
Liabilities Net of Receivables and Other
Assets
|
|
(0.10
|
%)
|
|
Total Net Assets
|
|
100.00
|
%
|
|
Holdings are for informational purposes
only and are subject to change at any time. They are not a recommendation to
buy, sell, or hold any security.
Top 10 equity
holdings
|
Percentage of net assets
|
Xerox
|
|
1.66
|
%
|
|
Johnson Controls
|
|
1.65
|
%
|
|
Cardinal Health
|
|
1.63
|
%
|
|
Merck
|
|
1.56
|
%
|
|
Raytheon
|
|
1.55
|
%
|
|
CVS
Caremark
|
|
1.54
|
%
|
|
Baxter International
|
|
1.52
|
%
|
|
Waste Management
|
|
1.52
|
%
|
|
Marsh & McLennan
|
|
1.51
|
%
|
|
Bank of New York
Mellon
|
|
1.51
|
%
|
|
12
Schedule of investments
|
|
Delaware Dividend Income Fund
|
November 30,
2013
|
|
|
|
Number of
shares
|
|
Value (U.S. $)
|
Common Stock
63.41%
|
|
|
|
|
|
Consumer Discretionary
4.92%
|
|
|
|
|
|
|
Abercrombie & Fitch Class
A
|
|
41,661
|
|
$
|
1,428,139
|
|
Asian Pay Television Trust
|
|
1,643,000
|
|
|
1,021,107
|
|
Bayerische Motoren Werke
|
|
4,245
|
|
|
487,683
|
|
Cablevision Systems Class A
|
|
36,100
|
|
|
605,397
|
|
Carnival
|
|
17,570
|
|
|
634,453
|
|
DIRECTV Class A
|
|
6,350
|
|
|
419,799
|
|
Don Quijote
|
|
4,500
|
|
|
275,577
|
|
Hertz Global Holdings
|
|
10,600
|
|
|
257,156
|
|
Johnson Controls
|
|
205,400
|
|
|
10,374,753
|
|
Lowes
|
|
195,000
|
|
|
9,258,599
|
|
Nitori Holdings
|
|
7,193
|
|
|
666,715
|
|
PPR
|
|
2,130
|
|
|
472,364
|
|
Publicis Groupe
|
|
9,133
|
|
|
807,181
|
|
Quiksilver
|
|
36,764
|
|
|
327,200
|
|
Tarkett
|
|
33,550
|
|
|
1,317,146
|
|
Techtronic Industries
|
|
126,000
|
|
|
338,865
|
|
Toyota Motor
|
|
21,400
|
|
|
1,333,516
|
|
United Rentals
|
|
2,575
|
|
|
176,980
|
|
Yue Yuen Industrial Holdings
|
|
214,500
|
|
|
670,948
|
|
|
|
|
|
|
30,873,578
|
Consumer Staples
6.43%
|
|
|
|
|
|
|
Akorn
|
|
10,895
|
|
|
280,546
|
|
Archer-Daniels-Midland
|
|
225,300
|
|
|
9,068,325
|
|
Aryzta
|
|
17,587
|
|
|
1,310,537
|
|
Carlsberg Class B
|
|
6,853
|
|
|
750,656
|
|
CVS Caremark
|
|
144,400
|
|
|
9,669,024
|
|
Kraft Foods Group
|
|
176,300
|
|
|
9,365,056
|
|
Mondelez International Class
A
|
|
271,900
|
|
|
9,116,807
|
|
TESCO
|
|
129,681
|
|
|
738,430
|
|
|
|
|
|
|
40,299,381
|
Diversified REITs
0.37%
|
|
|
|
|
|
|
Lexington Reality Trust
|
|
63,700
|
|
|
654,199
|
|
Mapletree Commercial Trust
|
|
725,000
|
|
|
710,529
|
|
Vornado Realty Trust
|
|
10,500
|
|
|
923,265
|
|
|
|
|
|
|
2,287,993
|
13
Schedule of
investments
Delaware Dividend
Income Fund
|
|
|
Number of
shares
|
|
Value (U.S. $)
|
Common Stock
(continued)
|
|
|
|
|
|
Energy 7.83%
|
|
|
|
|
|
|
Chevron
|
|
76,800
|
|
$
|
9,403,391
|
|
CNOOC
|
|
337,000
|
|
|
690,288
|
|
ConocoPhillips
|
|
125,300
|
|
|
9,121,840
|
|
Halcon Resources
|
|
7,088
|
|
|
28,421
|
|
Halliburton
|
|
173,100
|
|
|
9,118,908
|
|
Kodiak Oil & Gas
|
|
26,564
|
|
|
301,236
|
|
Marathon Oil
|
|
254,900
|
|
|
9,186,596
|
|
Occidental Petroleum
|
|
92,400
|
|
|
8,774,304
|
|
Range Resources
|
|
3,097
|
|
|
240,482
|
|
Saipem
|
|
23,385
|
|
|
524,797
|
|
Subsea 7
|
|
25,056
|
|
|
487,512
|
|
Total
|
|
12,236
|
|
|
741,258
|
|
Transocean
|
|
9,239
|
|
|
465,461
|
|
|
|
|
|
|
49,084,494
|
Financials
6.83%
|
|
|
|
|
|
|
Allstate
|
|
167,700
|
|
|
9,101,079
|
|
AXA
|
|
40,050
|
|
|
1,049,218
|
|
Bank of New York Mellon
|
|
280,100
|
|
|
9,439,370
|
|
Bank Rakyat Indonesia Persero Tbk
IRP
|
|
391,500
|
|
|
243,818
|
|
Huntington Bancshares
|
|
99,800
|
|
|
916,164
|
|
Marsh & McLennan
|
|
199,200
|
|
|
9,452,041
|
|
Mitsubishi UFJ Financial Group
|
|
164,600
|
|
|
1,059,446
|
|
Nordea Bank
|
|
77,077
|
|
|
996,366
|
|
Standard Chartered
|
|
24,095
|
|
|
571,165
|
|
Travelers
|
|
102,300
|
|
|
9,282,702
|
|
UniCredit
|
|
101,999
|
|
|
739,913
|
|
|
|
|
|
|
42,851,282
|
Healthcare 9.65%
|
|
|
|
|
|
|
Baxter International
|
|
139,600
|
|
|
9,555,620
|
|
Cardinal Health
|
|
157,800
|
|
|
10,193,880
|
|
Johnson & Johnson
|
|
96,500
|
|
|
9,134,690
|
|
Meda Class A
|
|
5,524
|
|
|
68,122
|
|
Merck
|
|
196,600
|
|
|
9,796,578
|
|
Novartis
|
|
12,579
|
|
|
994,247
|
|
Pfizer
|
|
286,538
|
|
|
9,091,851
|
|
Quest Diagnostics
|
|
151,200
|
|
|
9,214,128
|
|
Sanofi
|
|
9,696
|
|
|
1,025,272
|
14
|
|
|
Number of shares
|
|
Value (U.S. $)
|
Common
Stock
(continued)
|
|
|
|
|
|
Healthcare
(continued)
|
|
|
|
|
|
|
Stada
Arzneimittel
|
|
8,939
|
|
$
|
461,866
|
|
Teva Pharmaceutical Industries
ADR
|
|
23,261
|
|
|
948,118
|
|
|
|
|
|
|
60,484,372
|
Healthcare REITs 0.47%
|
|
|
|
|
|
|
HCP
|
|
11,600
|
|
|
426,532
|
|
Healthcare Realty Trust
|
|
26,400
|
|
|
584,232
|
|
Healthcare Trust of
America
|
|
86,900
|
|
|
882,035
|
|
LTC Properties
|
|
16,100
|
|
|
620,011
|
|
Ventas
|
|
7,500
|
|
|
426,225
|
|
|
|
|
|
|
2,939,035
|
Hotel REITs 0.68%
|
|
|
|
|
|
|
Ashford Hospitality Prime
|
|
7,600
|
|
|
155,496
|
|
Ashford Hospitality
Trust
|
|
38,000
|
|
|
311,980
|
|
Concentradora Fibra Hotelera
|
|
544,185
|
|
|
843,852
|
|
RLJ Lodging
Trust
|
|
47,300
|
|
|
1,141,822
|
|
Strategic Hotel &
Resorts
|
|
126,300
|
|
|
1,127,859
|
|
Summit Hotel
Properties
|
|
73,696
|
|
|
669,160
|
|
|
|
|
|
|
4,250,169
|
Industrial REITs 0.27%
|
|
|
|
|
|
|
First Industrial Realty Trust
|
|
57,400
|
|
|
1,002,204
|
|
First Potomac Realty
Trust
|
|
54,900
|
|
|
658,800
|
|
|
|
|
|
|
1,661,004
|
Industrials 5.55%
|
|
|
|
|
|
|
Delta Air Lines
|
|
123
|
|
|
3,565
|
|
Deutsche
Post
|
|
27,707
|
|
|
979,732
|
|
East Japan Railway
|
|
3,746
|
|
|
306,968
|
|
Eaton
|
|
23,100
|
|
|
1,678,446
|
|
ITOCHU
|
|
59,689
|
|
|
753,218
|
|
Koninklijke Philips
Electronics
|
|
21,753
|
|
|
778,504
|
|
Mueller Water Products Class
A
|
|
15,570
|
|
|
134,058
|
|
Northrop
Grumman
|
|
82,600
|
|
|
9,307,368
|
|
Raytheon
|
|
109,900
|
|
|
9,745,932
|
|
Rexnord
|
|
4,050
|
|
|
98,456
|
|
Vinci
|
|
13,602
|
|
|
874,454
|
|
Waste
Management
|
|
208,100
|
|
|
9,506,008
|
|
Westjet Airlines
|
|
23,794
|
|
|
618,462
|
|
|
|
|
|
|
34,785,171
|
15
Schedule of
investments
Delaware Dividend
Income Fund
|
|
|
Number of
shares
|
|
Value (U.S. $)
|
Common Stock
(continued)
|
|
|
|
|
|
Information Technology
9.22%
|
|
|
|
|
|
|
Apple
|
|
11,500
|
|
$
|
6,394,805
|
|
Broadcom Class A
|
|
343,600
|
|
|
9,170,684
|
|
CGI Group Class A
|
|
33,368
|
|
|
1,238,436
|
|
Cisco Systems
|
|
434,300
|
|
|
9,228,875
|
|
Intel
|
|
384,700
|
|
|
9,171,248
|
|
Microsoft
|
|
57,000
|
|
|
2,173,410
|
|
Motorola Solutions
|
|
141,642
|
|
|
9,331,375
|
|
Teleperformance
|
|
12,673
|
|
|
721,163
|
|
Xerox
|
|
912,400
|
|
|
10,383,111
|
|
|
|
|
|
|
57,813,107
|
Mall REITs
0.95%
|
|
|
|
|
|
|
CBL & Associates
Properties
|
|
42,500
|
|
|
767,550
|
|
General Growth Properties
|
|
91,900
|
|
|
1,906,925
|
|
Macerich
|
|
10,100
|
|
|
575,094
|
|
Simon Property Group
|
|
12,263
|
|
|
1,837,611
|
|
Taubman Centers
|
|
13,700
|
|
|
895,706
|
|
|
|
|
|
|
5,982,886
|
Manufactured Housing REITs
0.22%
|
|
|
|
|
|
|
Equity Lifestyle Properties
|
|
9,627
|
|
|
341,759
|
|
Sun Communities
|
|
25,400
|
|
|
1,036,320
|
|
|
|
|
|
|
1,378,079
|
Materials 1.91%
|
|
|
|
|
|
|
AuRico Gold
|
|
43,907
|
|
|
170,360
|
|
duPont (E.I.) deNemours
|
|
150,800
|
|
|
9,256,105
|
|
Lafarge
|
|
9,947
|
|
|
706,163
|
|
Rexam
|
|
73,682
|
|
|
602,421
|
|
Rio Tinto
|
|
14,572
|
|
|
777,772
|
|
Rockwood Holdings
|
|
1,767
|
|
|
120,969
|
|
Yamana Gold
|
|
41,511
|
|
|
372,557
|
|
|
|
|
|
|
12,006,347
|
Mixed REITs
0.94%
|
|
|
|
|
|
|
Duke Realty
|
|
114,600
|
|
|
1,739,628
|
|
EPR Properties
|
|
21,500
|
|
|
1,081,235
|
|
Gladstone Land
|
|
51,010
|
|
|
836,054
|
|
Liberty Property Trust
|
|
48,900
|
|
|
1,583,871
|
|
Nippon Prologis
|
|
35
|
|
|
338,428
|
|
PS Business Parks
|
|
3,900
|
|
|
305,448
|
|
|
|
|
|
|
5,884,664
|
16
|
|
|
Number of
shares
|
|
Value (U.S. $)
|
Common Stock
(continued)
|
|
|
|
|
|
Multifamily REITs 0.81%
|
|
|
|
|
|
|
American Campus Communities
|
|
17,500
|
|
$
|
567,525
|
|
Apartment Investment &
Management
|
|
24,265
|
|
|
609,294
|
|
BRE Properties
|
|
25,100
|
|
|
1,285,873
|
|
Equity Residential
|
|
39,800
|
|
|
2,051,292
|
|
Post Properties
|
|
13,700
|
|
|
587,182
|
|
|
|
|
|
|
5,101,166
|
Office REITs
0.26%
|
|
|
|
|
|
|
Highwoods Properties
|
|
25,800
|
|
|
926,736
|
|
Parkway Properties
|
|
39,443
|
|
|
721,412
|
|
|
|
|
|
|
1,648,148
|
Shopping Center REITs
0.98%
|
|
|
|
|
|
|
Agree Realty
|
|
35,800
|
|
|
1,048,940
|
|
Amreit Class B
|
|
7,700
|
|
|
134,057
|
|
DDR
|
|
71,100
|
|
|
1,136,889
|
|
First Capital Realty
|
|
43,366
|
|
|
716,334
|
|
Lippo Malls Indonesia Retail
Trust
|
|
2,477,000
|
|
|
809,187
|
|
Ramco-Gershenson Properties
Trust
|
|
113,300
|
|
|
1,812,800
|
|
Wheeler Real Estate Investment
Trust
|
|
113,393
|
|
|
476,251
|
|
|
|
|
|
|
6,134,458
|
Single Tenant REIT 0.07%
|
|
|
|
|
|
|
National Retail Properties
|
|
14,400
|
|
|
457,200
|
|
|
|
|
|
|
457,200
|
Telecommunications
3.43%
|
|
|
|
|
|
|
AT&T
|
|
260,600
|
|
|
9,175,726
|
=
|
Century Communications
|
|
1,625,000
|
|
|
0
|
|
CenturyLink
|
|
6,206
|
|
|
190,524
|
|
KDDI
|
|
6,778
|
|
|
425,673
|
|
Mobile TeleSystems ADR
|
|
27,032
|
|
|
569,835
|
|
Telstra
|
|
138,613
|
|
|
638,959
|
|
Verizon Communications
|
|
181,500
|
|
|
9,006,030
|
|
Vivendi
|
|
46,438
|
|
|
1,179,350
|
|
Vodafone Group
|
|
82,930
|
|
|
307,801
|
|
|
|
|
|
|
21,493,898
|
Utilities 1.62%
|
|
|
|
|
|
|
Edison International
|
|
200,300
|
|
|
9,255,863
|
|
Mirant (Escrow)
|
|
425,000
|
|
|
0
|
|
National Grid
|
|
24,906
|
|
|
315,880
|
17
Schedule of
investments
Delaware Dividend
Income Fund
|
|
|
Number of
shares
|
|
Value (U.S. $)
|
Common Stock
(continued)
|
|
|
|
|
|
Utilities
(continued)
|
|
|
|
|
|
|
Nippon Telegraph &
Telephone
|
|
7,237
|
|
$
|
363,317
|
|
NRG Energy
|
|
8,696
|
|
|
230,096
|
|
|
|
|
|
|
10,165,156
|
Total Common Stock
(cost $315,810,023)
|
|
|
|
|
397,581,588
|
|
|
Convertible Preferred
Stock 3.17%
|
|
|
|
|
|
#
|
Chesapeake Energy 144A 5.75%
|
|
|
|
|
|
|
exercise price $27.83, expiration date 12/31/49
|
|
955
|
|
|
1,097,056
|
|
El Paso Energy Capital Trust I
4.75%
|
|
|
|
|
|
|
exercise price $34.49, expiration date 3/31/28
|
|
39,900
|
|
|
2,250,360
|
|
Goodyear Tire & Rubber
5.875%
|
|
|
|
|
|
|
exercise price $18.21, expiration date 3/31/14
|
|
20,950
|
|
|
1,328,360
|
|
Halcon Resources 5.75%,
|
|
|
|
|
|
|
exercise price $6.16, expiration date 12/31/49
|
|
2,055
|
|
|
1,769,098
|
|
HealthSouth 6.50%
|
|
|
|
|
|
|
exercise price $30.50, expiration date 12/31/49
|
|
1,753
|
|
|
2,323,163
|
|
Huntington Bancshares 8.50%
|
|
|
|
|
|
|
exercise price $11.95, expiration date 12/31/49
|
|
1,038
|
|
|
1,323,450
|
|
Intelsat 5.75%
|
|
|
|
|
|
|
exercise price $22.05, expiration date 5/1/16
|
|
30,358
|
|
|
1,758,032
|
|
Maiden Holding 7.25%
|
|
|
|
|
|
|
exercise price $15.50, expiration date 9/15/16
|
|
40,625
|
|
|
2,046,281
|
|
MetLife 5.00%
|
|
|
|
|
|
|
exercise price $44.28, expiration date 9/4/13
|
|
67,870
|
|
|
2,094,468
|
|
SandRidge Energy 7.00%
|
|
|
|
|
|
|
exercise price $7.76, expiration date 12/31/49
|
|
5,300
|
|
|
500,519
|
|
SandRidge Energy 8.50%
|
|
|
|
|
|
|
exercise price $8.01, expiration date 12/31/49
|
|
11,790
|
|
|
1,176,524
|
|
Wells Fargo 7.50%
|
|
|
|
|
|
|
exercise price $156.71, expiration date 12/31/49
|
|
1,411
|
|
|
1,589,139
|
|
Weyerhaeuser 6.375%
|
|
|
|
|
|
|
exercise price $33.30, expiration date 7/1/16
|
|
11,113
|
|
|
609,215
|
Total
Convertible Preferred Stock
|
|
|
|
|
|
|
(cost $18,676,642)
|
|
|
|
|
19,865,665
|
18
|
|
|
Principal amount°
|
|
Value (U.S. $)
|
Commercial Mortgage-Backed Securities 0.35%
|
|
|
|
|
|
|
Bank of America Commercial Mortgage
Trust
|
|
|
|
|
|
|
Series 2006-4 A4 5.634% 7/10/46
|
|
$1,000,000
|
|
$
|
1,091,771
|
|
Morgan Stanley
Capital I
|
|
|
|
|
|
|
Series 2007-T27 A4 5.814% 6/11/42
|
|
1,000,000
|
|
|
1,132,450
|
Total Commercial Mortgage-Backed
Securities
|
|
|
|
|
|
|
(cost $1,997,930)
|
|
|
|
|
2,224,221
|
|
|
Convertible Bonds 10.73%
|
|
|
|
|
|
Basic Industry 0.22%
|
|
|
|
|
|
|
Peabody Energy
4.75%
|
|
|
|
|
|
|
exercise price $57.95, expiration date 12/15/41
|
|
788,000
|
|
|
636,310
|
|
Steel Dynamics 5.125%
|
|
|
|
|
|
|
exercise price $17.21, expiration date 6/15/14
|
|
658,000
|
|
|
749,709
|
|
|
|
|
|
|
1,386,019
|
Capital Goods 0.97%
|
|
|
|
|
|
|
L-3 Communications
Holdings 3.00%
|
|
|
|
|
|
|
exercise price $90.24, expiration date 8/1/35
|
|
1,492,000
|
|
|
1,754,965
|
#
|
Owens-Brockway Glass
Container 144A 3.00%
|
|
|
|
|
|
|
exercise price $47.47, expiration date 5/28/15
|
|
2,517,000
|
|
|
2,616,107
|
|
Titan Machinery
3.75%
|
|
|
|
|
|
|
exercise price $43.17, expiration date 4/30/19
|
|
1,935,000
|
|
|
1,682,241
|
|
|
|
|
|
|
6,053,313
|
Communications 2.27%
|
|
|
|
|
|
#
|
Alaska Communications Systems Group
144A 6.25%
|
|
|
|
|
|
|
exercise price $10.28, expiration date 5/1/18
|
|
1,810,000
|
|
|
1,514,744
|
#
|
Blucora 144A
4.25%
|
|
|
|
|
|
|
exercise price $21.66, expiration date 3/29/19
|
|
633,000
|
|
|
939,214
|
#
|
Clearwire Communications 144A
8.25%
|
|
|
|
|
|
|
exercise price $7.08, expiration date 11/30/40
|
|
2,720,000
|
|
|
3,124,600
|
|
Leap Wireless
International 4.50%
|
|
|
|
|
|
|
exercise price $93.21, expiration date 7/10/14
|
|
2,433,000
|
|
|
2,484,701
|
#
|
Liberty Interactive 144A
1.00%
|
|
|
|
|
|
|
exercise price $74.31, expiration date 9/28/43
|
|
2,662,000
|
|
|
2,755,170
|
#
|
Liberty Interactive
144A 0.75%
|
|
|
|
|
|
|
exercise price $1,000, expiration date 3/30/43
|
|
1,464,000
|
|
|
1,835,490
|
|
Rovi 2.625%
|
|
|
|
|
|
|
exercise price $47.36, expiration date 2/10/40
|
|
884,000
|
|
|
896,155
|
19
Schedule of
investments
Delaware Dividend
Income Fund
|
|
|
Principal amount°
|
|
Value (U.S. $)
|
Convertible Bonds
(continued)
|
|
|
|
|
|
Communications
(continued)
|
|
|
|
|
|
|
|
SBA Communications
4.00%
|
|
|
|
|
|
|
|
exercise price $ 30.38, expiration date 9/29/14
|
|
$
|
271,000
|
|
$
|
761,171
|
|
|
|
|
|
|
|
14,311,245
|
Consumer Cyclical 1.46%
|
|
|
|
|
|
|
Φ
|
ArvinMeritor 4.00%
|
|
|
|
|
|
|
|
exercise price $26.73, expiration date 2/12/27
|
|
|
3,072,000
|
|
|
2,839,680
|
|
Iconix Brand Group
2.50%
|
|
|
|
|
|
|
|
exercise price $30.75, expiration date 5/31/16
|
|
|
1,245,000
|
|
|
1,722,769
|
|
International Game Technology
3.25%
|
|
|
|
|
|
|
|
exercise price $19.93, expiration date 5/1/14
|
|
|
554,000
|
|
|
583,085
|
|
Live Nation
Entertainment 2.875%
|
|
|
|
|
|
|
|
exercise price $27.14, expiration date 7/14/27
|
|
|
2,165,000
|
|
|
2,208,300
|
|
MGM Resorts International
4.25%
|
|
|
|
|
|
|
|
exercise price $18.58, expiration date 4/10/15
|
|
|
1,459,000
|
|
|
1,769,949
|
|
|
|
|
|
|
|
9,123,783
|
Consumer Non-Cyclical 1.68%
|
|
|
|
|
|
|
|
Alere 3.00%
|
|
|
|
|
|
|
|
exercise price $43.98, expiration date 2/12/27
|
|
|
1,262,000
|
|
|
1,394,510
|
|
Dendreon 2.875%
|
|
|
|
|
|
|
|
exercise price $51.24, expiration date 1/13/16
|
|
|
1,139,000
|
|
|
737,503
|
Φ
|
Hologic
2.00%
|
|
|
|
|
|
|
|
exercise price $38.59, expiration date 12/15/43
|
|
|
1,666,000
|
|
|
1,762,836
|
Φ
|
Hologic 2.00%
|
|
|
|
|
|
|
|
exercise price $31.17, expiration date 2/27/42
|
|
|
1,168,000
|
|
|
1,195,740
|
#
|
Illumina 144A
0.25%
|
|
|
|
|
|
|
|
exercise price $83.55, expiration date 3/11/16
|
|
|
574,000
|
|
|
731,133
|
|
Mylan 3.75%
|
|
|
|
|
|
|
|
exercise price $13.32, expiration date 9/15/15
|
|
|
419,000
|
|
|
1,400,246
|
|
NuVasive
2.75%
|
|
|
|
|
|
|
|
exercise price $42.13, expiration date 6/30/17
|
|
|
2,636,000
|
|
|
2,886,419
|
#
|
Opko Health 144A 3.00%
|
|
|
|
|
|
|
|
exercise price $7.07, expiration date 1/28/33
|
|
|
278,000
|
|
|
436,286
|
|
|
|
|
|
|
|
10,544,673
|
Energy 0.79%
|
|
|
|
|
|
|
|
Chesapeake Energy
2.50%
|
|
|
|
|
|
|
|
exercise price $50.90, expiration date 5/15/37
|
|
|
683,000
|
|
|
700,502
|
#
|
Energy XXI Bermuda 144A 3.00%
|
|
|
|
|
|
|
|
exercise price $40.40, expiration date 12/13/18
|
|
|
615,000
|
|
|
610,388
|
20
|
|
|
Principal amount°
|
|
Value (U.S. $)
|
Convertible Bonds
(continued)
|
|
|
|
|
|
|
Energy
(continued)
|
|
|
|
|
|
|
|
Helix Energy
Solutions Group 3.25%
|
|
|
|
|
|
|
|
exercise price $25.02, expiration date 3/12/32
|
|
$
|
1,387,000
|
|
$
|
1,667,001
|
#
|
Vantage Drilling 144A 5.50%
|
|
|
|
|
|
|
|
exercise price $2.39, expiration date 7/15/43
|
|
|
1,786,000
|
|
|
1,946,739
|
|
|
|
|
|
|
|
4,924,630
|
Financials 1.26%
|
|
|
|
|
|
|
|
Ares Capital
5.75%
|
|
|
|
|
|
|
|
exercise price $19.13, expiration date 2/1/16
|
|
|
1,558,000
|
|
|
1,688,483
|
|
BGC Partners 4.50%
|
|
|
|
|
|
|
|
exercise price $9.84, expiration date 7/13/16
|
|
|
2,015,000
|
|
|
2,117,009
|
|
Blackstone Mortgage
Trust 5.25%
|
|
|
|
|
|
|
|
exercise price $28.67, expiration date 12/1/18
|
|
|
1,331,000
|
|
|
1,350,965
|
#
|
Campus Crest Communities
|
|
|
|
|
|
|
|
Operating Partnership
144A 4.75%,
|
|
|
|
|
|
|
|
exercise price $12.56, expiration date 10/11/18
|
|
|
1,692,000
|
|
|
1,727,955
|
#
|
Forest City Enterprises 144A
3.625%
|
|
|
|
|
|
|
|
exercise price $24.21, expiration date 8/14/20
|
|
|
960,000
|
|
|
996,000
|
|
|
|
|
|
|
|
7,880,412
|
Industrials 0.11%
|
|
|
|
|
|
|
Φ
|
General Cable
4.50%
|
|
|
|
|
|
|
|
exercise price $36.34, expiration date 11/15/29
|
|
|
623,000
|
|
|
665,442
|
|
|
|
|
|
|
|
665,442
|
Insurance 0.16%
|
|
|
|
|
|
|
|
Wellpoint 2.75%
|
|
|
|
|
|
|
|
exercise price $75.31, expiration date 10/15/42
|
|
|
736,000
|
|
|
1,014,760
|
|
|
|
|
|
|
|
1,014,760
|
Technology 1.81%
|
|
|
|
|
|
|
#
|
Ciena 144A
3.75%
|
|
|
|
|
|
|
|
exercise price $20.17, expiration date 10/15/18
|
|
|
1,141,000
|
|
|
1,573,867
|
|
Equinix 4.75%
|
|
|
|
|
|
|
|
exercise price $84.32, expiration date 6/13/16
|
|
|
455,000
|
|
|
909,147
|
|
Linear Technology
3.00%
|
|
|
|
|
|
|
|
exercise price $41.46, expiration date 4/30/27
|
|
|
1,912,000
|
|
|
2,069,740
|
|
Nuance Communications 2.75%
|
|
|
|
|
|
|
|
exercise price $32.30, expiration date 11/1/31
|
|
|
1,574,000
|
|
|
1,511,040
|
|
SanDisk
1.50%
|
|
|
|
|
|
|
|
exercise price $52.17, expiration date 8/11/17
|
|
|
1,204,000
|
|
|
1,729,998
|
21
Schedule of
investments
Delaware Dividend
Income Fund
|
|
|
Principal amount°
|
|
Value (U.S. $)
|
Convertible Bonds
(continued)
|
|
|
|
|
|
Technology
(continued)
|
|
|
|
|
|
|
|
TIBCO Software
2.25%
|
|
|
|
|
|
|
|
exercise price $50.57, expiration date 4/30/32
|
|
$
|
2,064,000
|
|
$
|
2,078,189
|
|
VeriSign 3.25%
|
|
|
|
|
|
|
|
exercise price $34.37, expiration date 8/15/37
|
|
|
856,000
|
|
|
1,481,950
|
|
|
|
|
|
|
|
11,353,931
|
Total Convertible Bonds
(cost $61,557,922)
|
|
|
|
|
|
67,258,208
|
|
|
Corporate Bonds 13.77%
|
|
|
|
|
|
|
Automobiles 0.62%
|
|
|
|
|
|
|
|
American Axle &
Manufacturing 7.75% 11/15/19
|
|
|
274,000
|
|
|
312,360
|
#
|
Chassix 144A 9.25% 8/1/18
|
|
|
255,000
|
|
|
274,125
|
|
Chrysler Group 8.25%
6/15/21
|
|
|
1,070,000
|
|
|
1,222,475
|
#
|
Cooper-Standard Holdings PIK 144A
7.375% 4/1/18
|
|
|
505,000
|
|
|
512,575
|
#
|
International
Automotive Components Group 144A
|
|
|
|
|
|
|
|
9.125% 6/1/18
|
|
|
518,000
|
|
|
538,720
|
#
|
LKQ 144A 4.75% 5/15/23
|
|
|
610,000
|
|
|
574,925
|
|
Meritor
|
|
|
|
|
|
|
|
6.75% 6/15/21
|
|
|
325,000
|
|
|
328,250
|
|
10.625% 3/15/18
|
|
|
95,000
|
|
|
102,838
|
|
|
|
|
|
|
|
3,866,268
|
Banking 0.32%
|
|
|
|
|
|
|
#
|
Credit Suisse 144A 6.50%
8/8/23
|
|
|
475,000
|
|
|
503,956
|
#
|
HBOS Capital Funding
144A 6.071% 6/29/49
|
|
|
1,192,000
|
|
|
1,193,490
|
|
JPMorgan Chase 6.00% 12/29/49
|
|
|
300,000
|
|
|
290,250
|
|
|
|
|
|
|
|
1,987,696
|
Basic Industry 1.71%
|
|
|
|
|
|
|
|
AK Steel 7.625%
5/15/20
|
|
|
228,000
|
|
|
216,600
|
#
|
APERAM 144A 7.75% 4/1/18
|
|
|
275,000
|
|
|
285,313
|
|
ArcelorMittal 6.125%
6/1/18
|
|
|
939,000
|
|
|
1,023,509
|
#
|
Builders FirstSource 144A 7.625%
6/1/21
|
|
|
504,000
|
|
|
524,160
|
#
|
Cemex Espana
Luxembourg 144A 9.25% 5/12/20
|
|
|
285,000
|
|
|
311,006
|
#
|
Cemex SAB 144A 7.25% 1/15/21
|
|
|
315,000
|
|
|
320,119
|
#
|
CPG Merger Sub 144A
8.00% 10/1/21
|
|
|
540,000
|
|
|
565,649
|
#
|
Essar Steel Algoma 144A 9.375%
3/15/15
|
|
|
214,000
|
|
|
209,185
|
#
|
FMG Resources August
2006 144A
|
|
|
|
|
|
|
|
6.875% 2/1/18
|
|
|
222,000
|
|
|
235,320
|
|
6.875% 4/1/22
|
|
|
574,000
|
|
|
622,789
|
22
|
|
|
Principal amount°
|
|
Value (U.S. $)
|
Corporate Bonds
(continued)
|
|
|
|
|
|
|
Basic Industry
(continued)
|
|
|
|
|
|
|
|
HD Supply 11.50%
7/15/20
|
|
$
|
425,000
|
|
$
|
508,938
|
|
Headwaters 7.625% 4/1/19
|
|
|
403,000
|
|
|
436,248
|
#
|
Inmet Mining 144A
8.75% 6/1/20
|
|
|
389,000
|
|
|
424,983
|
#
|
JMC Steel Group 144A 8.25%
3/15/18
|
|
|
527,000
|
|
|
525,683
|
#
|
LSB Industries 144A
7.75% 8/1/19
|
|
|
240,000
|
|
|
252,000
|
#
|
Masonite International 144A 8.25%
4/15/21
|
|
|
480,000
|
|
|
528,600
|
#
|
New Gold 144A 6.25%
11/15/22
|
|
|
394,000
|
|
|
389,075
|
|
Norcraft 10.50% 12/15/15
|
|
|
243,000
|
|
|
250,240
|
|
Nortek 8.50%
4/15/21
|
|
|
455,000
|
|
|
505,050
|
#
|
Perstorp Holding 144A 8.75%
5/15/17
|
|
|
435,000
|
|
|
467,625
|
|
Ryerson
|
|
|
|
|
|
|
|
9.00% 10/15/17
|
|
|
277,000
|
|
|
291,889
|
|
11.25% 10/15/18
|
|
|
112,000
|
|
|
118,160
|
#
|
Sappi Papier Holding 144A 8.375%
6/15/19
|
|
|
455,000
|
|
|
497,656
|
#
|
Taminco Global
Chemical 144A 9.75% 3/31/20
|
|
|
359,000
|
|
|
410,158
|
#
|
TPC Group 144A 8.75% 12/15/20
|
|
|
523,000
|
|
|
555,033
|
#
|
U.S. Coatings
Acquisition 144A 7.375% 5/1/21
|
|
|
265,000
|
|
|
282,225
|
|
|
|
|
|
|
|
10,757,213
|
Capital Goods 0.70%
|
|
|
|
|
|
|
#
|
Allegion US Holding 144A 5.75%
10/1/21
|
|
|
315,000
|
|
|
328,388
|
#
|
BOE Intermediate
Holding PIK 144A
|
|
|
|
|
|
|
|
9.00% 11/1/17
|
|
|
187,735
|
|
|
194,306
|
#
|
BOE Merger PIK 144A 9.50%
11/1/17
|
|
|
469,000
|
|
|
499,484
|
#
|
Consolidated
Container 144A 10.125% 7/15/20
|
|
|
419,000
|
|
|
451,473
|
#
|
Milacron 144A 7.75% 2/15/21
|
|
|
435,000
|
|
|
458,925
|
#
|
Plastipak Holdings
144A 6.50% 10/1/21
|
|
|
405,000
|
|
|
422,213
|
|
Reynolds Group Issuer
|
|
|
|
|
|
|
|
8.25% 2/15/21
|
|
|
405,000
|
|
|
428,288
|
|
9.875% 8/15/19
|
|
|
675,000
|
|
|
752,624
|
#
|
Silver II Borrower
144A 7.75% 12/15/20
|
|
|
400,000
|
|
|
424,000
|
|
TransDigm 7.50% 7/15/21
|
|
|
415,000
|
|
|
448,200
|
|
|
|
|
|
|
|
4,407,901
|
Communications 1.43%
|
|
|
|
|
|
|
|
Centurylink 6.75%
12/1/23
|
|
|
370,000
|
|
|
379,019
|
#
|
Columbus International 144A 11.50%
11/20/14
|
|
|
295,000
|
|
|
320,075
|
#
|
Digicel Group 144A
8.25% 9/30/20
|
|
|
725,000
|
|
|
761,250
|
|
Hughes Satellite Systems 7.625%
6/15/21
|
|
|
368,000
|
|
|
407,560
|
23
Schedule of
investments
Delaware Dividend
Income Fund
|
|
|
Principal amount°
|
|
Value (U.S. $)
|
Corporate Bonds
(continued)
|
|
|
|
|
|
|
|
Communications
(continued)
|
|
|
|
|
|
|
|
#
|
Intelsat Luxembourg
144A
|
|
|
|
|
|
|
|
|
7.75% 6/1/21
|
|
$
|
935,000
|
|
|
$
|
982,918
|
|
8.125% 6/1/23
|
|
|
970,000
|
|
|
|
1,026,987
|
|
Level 3 Communications 8.875%
6/1/19
|
|
|
153,000
|
|
|
|
168,491
|
#
|
Level 3
Financing
|
|
|
|
|
|
|
|
|
#144A 6.125% 1/15/21
|
|
|
185,000
|
|
|
|
188,238
|
|
7.00% 6/1/20
|
|
|
466,000
|
|
|
|
496,290
|
#
|
MetroPCS Wireless
144A 6.25% 4/1/21
|
|
|
210,000
|
|
|
|
219,188
|
#
|
RCN Telecom Services 144A 8.50%
8/15/20
|
|
|
270,000
|
|
|
|
274,050
|
#
|
Sprint 144A
|
|
|
|
|
|
|
|
|
7.25% 9/15/21
|
|
|
240,000
|
|
|
|
260,700
|
|
7.875% 9/15/23
|
|
|
190,000
|
|
|
|
208,525
|
|
Sprint Capital 6.90% 5/1/19
|
|
|
495,000
|
|
|
|
539,550
|
|
Sprint Nextel 8.375%
8/15/17
|
|
|
333,000
|
|
|
|
387,945
|
|
T-Mobile
|
|
|
|
|
|
|
|
|
6.125% 1/15/22
|
|
|
160,000
|
|
|
|
163,400
|
|
6.50% 1/15/24
|
|
|
100,000
|
|
|
|
101,500
|
|
6.731% 4/28/22
|
|
|
185,000
|
|
|
|
193,556
|
#
|
Wind Acquisition
Finance 144A
|
|
|
|
|
|
|
|
|
7.25% 2/15/18
|
|
|
200,000
|
|
|
|
211,000
|
|
11.75% 7/15/17
|
|
|
225,000
|
|
|
|
239,344
|
|
Windstream
|
|
|
|
|
|
|
|
|
7.50% 6/1/22
|
|
|
223,000
|
|
|
|
232,199
|
|
#144A
7.75% 10/1/21
|
|
|
300,000
|
|
|
|
321,750
|
|
Zayo Group 10.125%
7/1/20
|
|
|
739,000
|
|
|
|
857,240
|
|
|
|
|
|
|
|
|
8,940,775
|
Consumer Cyclical 1.10%
|
|
|
|
|
|
|
|
#
|
BI-LO Finance 144A 8.625%
9/15/18
|
|
|
375,000
|
|
|
|
390,469
|
|
Burlington Coat
Factory Warehouse 10.00% 2/15/19
|
|
|
433,000
|
|
|
|
487,666
|
#
|
Burlington Holdings 144A 9.00%
2/15/18
|
|
|
84,000
|
|
|
|
86,940
|
#
|
CDR DB Sub 144A 7.75%
10/15/20
|
|
|
636,000
|
|
|
|
632,819
|
#
|
Chinos Intermediate Holdings PIK
144A
|
|
|
|
|
|
|
|
|
7.75% 5/1/19
|
|
|
600,000
|
|
|
|
606,000
|
|
Dave & Busters
11.00% 6/1/18
|
|
|
331,000
|
|
|
|
366,586
|
#^
|
Dave & Busters
Entertainment 144A
|
|
|
|
|
|
|
|
|
10.004% 2/15/16
|
|
|
502,000
|
|
|
|
415,405
|
#
|
Landrys 144A 9.375%
5/1/20
|
|
|
531,000
|
|
|
|
581,445
|
#
|
Michaels FinCo Holdings 144A 7.50%
8/1/18
|
|
|
345,000
|
|
|
|
358,800
|
24
|
|
|
Principal amount°
|
|
Value (U.S. $)
|
Corporate Bonds
(continued)
|
|
|
|
|
|
|
Consumer Cyclical
(continued)
|
|
|
|
|
|
|
|
|
Michaels Stores
11.375% 11/1/16
|
|
$
|
74,000
|
|
|
$
|
76,036
|
|
Pantry 8.375% 8/1/20
|
|
|
406,000
|
|
|
|
435,435
|
|
Party City Holdings
8.875% 8/1/20
|
|
|
450,000
|
|
|
|
501,750
|
#
|
Quiksilver 144A 7.875% 8/1/18
|
|
|
520,000
|
|
|
|
562,900
|
|
Rite Aid 6.75%
6/15/21
|
|
|
505,000
|
|
|
|
529,619
|
|
Tempur Sealy International 6.875%
12/15/20
|
|
|
330,000
|
|
|
|
358,050
|
#
|
Wok Acquisition 144A
10.25% 6/30/20
|
|
|
467,000
|
|
|
|
506,695
|
|
|
|
|
|
|
|
|
6,896,615
|
Consumer Non-Cyclical 0.39%
|
|
|
|
|
|
|
|
#
|
Beverage Packaging Holdings
144A
|
|
|
|
|
|
|
|
|
5.625% 12/15/16
|
|
|
270,000
|
|
|
|
277,425
|
#
|
Crestview DS Merger
Sub II 144A 10.00% 9/1/21
|
|
|
330,000
|
|
|
|
351,450
|
|
Del Monte 7.625% 2/15/19
|
|
|
403,000
|
|
|
|
421,134
|
#
|
JBS Investments GmbH
144A 7.75% 10/28/20
|
|
|
200,000
|
|
|
|
202,000
|
#
|
JBS USA 144A 8.25% 2/1/20
|
|
|
368,000
|
|
|
|
399,280
|
|
Smithfield Foods
6.625% 8/15/22
|
|
|
390,000
|
|
|
|
413,888
|
#
|
Spectrum Brands Escrow 144A
|
|
|
|
|
|
|
|
|
6.375% 11/15/20
|
|
|
77,000
|
|
|
|
82,198
|
|
6.625% 11/15/22
|
|
|
291,000
|
|
|
|
310,643
|
|
|
|
|
|
|
|
|
2,458,018
|
Energy
1.95%
|
|
|
|
|
|
|
|
|
AmeriGas Finance
7.00% 5/20/22
|
|
|
435,000
|
|
|
|
473,063
|
|
Calumet Specialty Products
Partners
|
|
|
|
|
|
|
|
|
#144A
7.625% 1/15/22
|
|
|
295,000
|
|
|
|
297,950
|
|
9.375% 5/1/19
|
|
|
515,000
|
|
|
|
572,938
|
|
Chaparral
Energy
|
|
|
|
|
|
|
|
|
7.625% 11/15/22
|
|
|
189,000
|
|
|
|
205,538
|
|
8.25% 9/1/21
|
|
|
236,000
|
|
|
|
260,190
|
|
CHC Helicopter 9.375% 6/1/21
|
|
|
220,000
|
|
|
|
223,850
|
|
Chesapeake
Energy
|
|
|
|
|
|
|
|
|
5.375% 6/15/21
|
|
|
90,000
|
|
|
|
93,375
|
|
6.125% 2/15/21
|
|
|
72,000
|
|
|
|
77,760
|
|
6.625% 8/15/20
|
|
|
325,000
|
|
|
|
365,625
|
|
Comstock Resources 7.75%
4/1/19
|
|
|
421,000
|
|
|
|
444,155
|
#
|
Drill Rigs Holdings
144A 6.50% 10/1/17
|
|
|
406,000
|
|
|
|
441,525
|
#
|
Exterran Partners 144A 6.00%
4/1/21
|
|
|
460,000
|
|
|
|
460,000
|
|
Genesis Energy 5.75%
2/15/21
|
|
|
530,000
|
|
|
|
539,275
|
|
Halcon Resources 8.875%
5/15/21
|
|
|
492,000
|
|
|
|
501,840
|
25
Schedule of
investments
Delaware Dividend
Income Fund
|
|
|
Principal amount°
|
|
Value (U.S. $)
|
Corporate Bonds
(continued)
|
|
|
|
|
|
|
Energy
(continued)
|
|
|
|
|
|
|
#
|
Hercules Offshore
144A
|
|
|
|
|
|
|
|
7.50% 10/1/21
|
|
$
|
255,000
|
|
$
|
269,025
|
|
8.75% 7/15/21
|
|
|
140,000
|
|
|
155,400
|
|
Key Energy Services 6.75%
3/1/21
|
|
|
520,000
|
|
|
534,300
|
|
Laredo
Petroleum
|
|
|
|
|
|
|
|
7.375% 5/1/22
|
|
|
98,000
|
|
|
106,575
|
|
9.50% 2/15/19
|
|
|
410,000
|
|
|
459,200
|
|
Linn Energy
|
|
|
|
|
|
|
|
6.50% 5/15/19
|
|
|
187,000
|
|
|
189,338
|
|
#144A
7.00% 11/1/19
|
|
|
150,000
|
|
|
150,000
|
|
8.625% 4/15/20
|
|
|
105,000
|
|
|
112,875
|
|
Markwest Energy
Partners 5.50% 2/15/23
|
|
|
210,000
|
|
|
215,250
|
|
Midstates Petroleum 9.25%
6/1/21
|
|
|
715,000
|
|
|
749,855
|
#
|
Murphy Oil USA 144A
6.00% 8/15/23
|
|
|
360,000
|
|
|
369,000
|
|
Northern Oil and Gas 8.00%
6/1/20
|
|
|
430,000
|
|
|
452,575
|
|
NuStar Logistics
6.75% 2/1/21
|
|
|
315,000
|
|
|
326,025
|
#
|
Oasis Petroleum 144A 6.875%
3/15/22
|
|
|
580,000
|
|
|
626,399
|
|
Offshore Group
Investment 7.125% 4/1/23
|
|
|
210,000
|
|
|
217,350
|
|
PDC Energy 7.75% 10/15/22
|
|
|
450,000
|
|
|
489,375
|
|
Pioneer Drilling
9.875% 3/15/18
|
|
|
482,000
|
|
|
518,150
|
|
Rosetta Resources 5.625%
5/1/21
|
|
|
290,000
|
|
|
292,538
|
#
|
Samson Investment
144A 10.50% 2/15/20
|
|
|
368,000
|
|
|
399,740
|
|
SandRidge Energy 8.125%
10/15/22
|
|
|
639,000
|
|
|
676,540
|
|
|
|
|
|
|
|
12,266,594
|
Financials
0.24%
|
|
|
|
|
|
|
|
Barclays 8.25%
12/29/49
|
|
|
250,000
|
|
|
258,281
|
|
ETrade Financial 6.375%
11/15/19
|
|
|
642,000
|
|
|
690,150
|
#
|
Nuveen Investments
144A 9.50% 10/15/20
|
|
|
571,000
|
|
|
563,863
|
|
|
|
|
|
|
|
1,512,294
|
Healthcare 1.04%
|
|
|
|
|
|
|
|
Air Medical Group
Holdings 9.25% 11/1/18
|
|
|
358,000
|
|
|
390,220
|
|
Alere 6.50%
6/15/20
|
|
|
270,000
|
|
|
278,100
|
|
Biomet 6.50% 10/1/20
|
|
|
392,000
|
|
|
409,640
|
|
Community Health
Systems
|
|
|
|
|
|
|
|
7.125% 7/15/20
|
|
|
227,000
|
|
|
235,229
|
|
8.00% 11/15/19
|
|
|
343,000
|
|
|
374,728
|
|
Immucor 11.125% 8/15/19
|
|
|
555,000
|
|
|
624,374
|
26
|
|
|
Principal amount°
|
|
Value (U.S. $)
|
Corporate Bonds
(continued)
|
|
|
|
|
|
Healthcare
(continued)
|
|
|
|
|
|
|
Kinetic Concepts
|
|
|
|
|
|
|
|
10.50%
11/1/18
|
$
|
334,000
|
|
$
|
383,265
|
|
|
12.50%
11/1/19
|
|
245,000
|
|
|
273,175
|
#
|
MPH Intermediate Holding Company 2 144A
|
|
|
|
|
|
|
|
8.375% 8/1/18
|
|
255,000
|
|
|
264,881
|
|
Par Pharmaceutical 7.375% 10/15/20
|
|
612,000
|
|
|
645,659
|
|
Radnet Management 10.375% 4/1/18
|
|
291,000
|
|
|
304,095
|
#
|
Service Corp International 144A 5.375% 1/15/22
|
|
480,000
|
|
|
486,000
|
|
Tenet Healthcare
|
|
|
|
|
|
|
#
|
144A 6.00% 10/1/20
|
|
485,000
|
|
|
507,734
|
|
|
8.125% 4/1/22
|
|
315,000
|
|
|
342,563
|
|
Truven Health Analytics 10.625% 6/1/20
|
|
178,000
|
|
|
202,253
|
#
|
Valeant Pharmaceuticals International 144A
|
|
|
|
|
|
|
|
5.625% 12/1/21
|
|
440,000
|
|
|
443,300
|
|
|
7.00% 10/1/20
|
|
95,000
|
|
|
102,363
|
#
|
VPI Escrow 144A 6.375% 10/15/20
|
|
237,000
|
|
|
250,924
|
|
|
|
|
|
|
|
6,518,503
|
Industrials 0.05%
|
|
|
|
|
|
#
|
WESCO Distribution 144A 5.375% 12/15/21
|
|
50,000
|
|
|
50,500
|
#
|
Wise Metals Group 144A 8.75% 12/15/18
|
|
235,000
|
|
|
242,050
|
|
|
|
|
|
|
|
292,550
|
Insurance 0.45%
|
|
|
|
|
|
|
American International Group 8.175% 5/15/58
|
|
620,000
|
|
|
747,410
|
#
|
Hockey Merger Sub 144A 2 7.875%
10/1/21
|
|
400,000
|
|
|
415,500
|
#
|
Liberty Mutual Group 144A 7.00%
3/15/37
|
|
443,000
|
|
|
462,935
|
#
|
Onex USI Acquisition 144A 7.75%
1/15/21
|
|
446,000
|
|
|
458,265
|
|
XL Group 6.50% 12/29/49
|
|
758,000
|
|
|
746,630
|
|
|
|
|
|
|
|
2,830,740
|
Media
1.07%
|
|
|
|
|
|
|
CCO Holdings 5.25% 9/30/22
|
|
402,000
|
|
|
380,895
|
#
|
Cequel Communications Holdings 1 144A
|
|
|
|
|
|
|
|
6.375% 9/15/20
|
|
317,000
|
|
|
328,888
|
|
Clear Channel Worldwide Holdings
|
|
|
|
|
|
|
|
7.625%
3/15/20
|
|
563,000
|
|
|
596,390
|
|
CSC Holdings 6.75% 11/15/21
|
|
305,000
|
|
|
330,163
|
|
DISH DBS 5.00% 3/15/23
|
|
665,000
|
|
|
636,738
|
#
|
Gray Television 144A 7.50% 10/1/20
|
|
510,000
|
|
|
539,325
|
27
Schedule of
investments
Delaware Dividend Income Fund
|
|
Principal amount°
|
|
Value (U.S. $)
|
Corporate Bonds
(continued)
|
|
|
|
|
|
Media
(continued)
|
|
|
|
|
|
#
|
MDC Partners 144A
6.75% 4/1/20
|
$
|
575,000
|
|
$
|
600,875
|
#
|
Nara Cable Funding 144A 8.875%
12/1/18
|
|
400,000
|
|
|
429,000
|
#
|
Nielsen 144A 5.50%
10/1/21
|
|
330,000
|
|
|
338,250
|
#
|
Ono Finance II 144A 10.875%
7/15/19
|
|
260,000
|
|
|
283,400
|
|
Satelites Mexicanos
9.50% 5/15/17
|
|
232,000
|
|
|
255,200
|
#
|
Univision Communications 144A 8.50%
5/15/21
|
|
884,000
|
|
|
983,449
|
#
|
UPCB Finance VI 144A
6.875% 1/15/22
|
|
322,000
|
|
|
346,955
|
#
|
Virgin Media Finance 144A 6.375%
4/15/23
|
|
620,000
|
|
|
643,250
|
|
|
|
|
|
|
6,692,778
|
Service-Other 1.24%
|
|
|
|
|
|
#
|
Algeco Scotsman
Global Finance 144A
|
|
|
|
|
|
|
8.50% 10/15/18
|
|
490,000
|
|
|
531,650
|
|
10.75% 10/15/19
|
|
894,000
|
|
|
934,230
|
#
|
ARAMARK 144A 5.75% 3/15/20
|
|
550,000
|
|
|
576,125
|
|
Avis Budget Car
Rental 5.50% 4/1/23
|
|
416,000
|
|
|
406,640
|
#
|
Carlson Wagonlit 144A 6.875%
6/15/19
|
|
425,000
|
|
|
442,000
|
#
|
DigitalGlobe 144A
5.25% 2/1/21
|
|
450,000
|
|
|
441,000
|
|
H&E Equipment Services 7.00%
9/1/22
|
|
364,000
|
|
|
399,490
|
|
M/I Homes 8.625%
11/15/18
|
|
490,000
|
|
|
531,650
|
#
|
Mattamy Group 144A 6.50%
11/15/20
|
|
402,000
|
|
|
397,980
|
|
MGM Resorts
International
|
|
|
|
|
|
|
6.75% 10/1/20
|
|
135,000
|
|
|
145,463
|
|
7.75% 3/15/22
|
|
197,000
|
|
|
219,655
|
|
11.375% 3/1/18
|
|
560,000
|
|
|
718,200
|
|
PHH
|
|
|
|
|
|
|
6.375% 8/15/21
|
|
200,000
|
|
|
202,250
|
|
7.375% 9/1/19
|
|
219,000
|
|
|
237,615
|
|
Pinnacle
Entertainment
|
|
|
|
|
|
|
7.75% 4/1/22
|
|
163,000
|
|
|
178,485
|
|
8.75% 5/15/20
|
|
25,000
|
|
|
27,750
|
#
|
PNK Finance 144A 6.375%
8/1/21
|
|
210,000
|
|
|
217,875
|
|
Seven Seas Cruises
9.125% 5/15/19
|
|
479,000
|
|
|
531,091
|
|
Swift Services Holdings 10.00%
11/15/18
|
|
380,000
|
|
|
425,125
|
#
|
Watco 144A 6.375%
4/1/23
|
|
220,000
|
|
|
220,550
|
|
|
|
|
|
|
7,784,824
|
28
|
|
|
Principal amount°
|
|
Value (U.S. $)
|
Corporate Bonds
(continued)
|
|
|
|
|
|
Technology
0.94%
|
|
|
|
|
|
#
|
ACI Worldwide 144A 6.375% 8/15/20
|
$
|
295,000
|
|
$
|
307,169
|
#
|
Activision Blizzard 144A
|
|
|
|
|
|
|
|
5.625% 9/15/21
|
|
370,000
|
|
|
385,263
|
|
|
6.125% 9/15/23
|
|
445,000
|
|
|
467,250
|
#
|
BMC Software Finance 144A 8.125% 7/15/21
|
|
765,000
|
|
|
814,724
|
|
First Data
|
|
|
|
|
|
|
|
11.25% 3/31/16
|
|
166,000
|
|
|
168,698
|
|
#
|
144A 11.25% 1/15/21
|
|
685,000
|
|
|
756,924
|
|
#
|
144A 11.75% 8/15/21
|
|
505,000
|
|
|
526,463
|
|
Freescale Semiconductor
|
|
|
|
|
|
|
#
|
144A 6.00%
1/15/22
|
|
255,000
|
|
|
258,188
|
|
|
10.75%
8/1/20
|
|
50,000
|
|
|
57,000
|
#
|
Healthcare Technology Intermediate PIK
144A
|
|
|
|
|
|
|
|
7.375% 9/1/18
|
|
480,000
|
|
|
495,600
|
|
Infor US 9.375% 4/1/19
|
|
432,000
|
|
|
489,240
|
|
j2 Global 8.00% 8/1/20
|
|
618,000
|
|
|
668,985
|
#
|
Viasystems 144A 7.875% 5/1/19
|
|
430,000
|
|
|
469,775
|
|
|
|
|
|
|
|
5,865,279
|
Utilities 0.52%
|
|
|
|
|
|
|
AES
|
|
|
|
|
|
|
|
7.375% 7/1/21
|
|
699,000
|
|
|
793,365
|
|
|
8.00% 6/1/20
|
|
45,000
|
|
|
52,875
|
#
|
Calpine 144A
|
|
|
|
|
|
|
|
5.875%
1/15/24
|
|
125,000
|
|
|
125,000
|
|
|
6.00%
1/15/22
|
|
500,000
|
|
|
516,250
|
|
Elwood Energy 8.159% 7/5/26
|
|
407,753
|
|
|
434,767
|
#
|
Enel SpA 144A 8.75% 9/24/73
|
|
400,000
|
|
|
436,500
|
|
GenOn Energy 9.875% 10/15/20
|
|
402,000
|
|
|
453,255
|
|
Mirant Americas 8.50% 10/1/21
|
|
410,000
|
|
|
448,950
|
|
|
|
|
|
|
|
3,260,962
|
Total Corporate Bonds
(cost
$82,116,995)
|
|
|
|
|
86,339,010
|
|
Municipal Bonds
0.53%
|
|
|
|
|
|
|
California Statewide Communities
|
|
|
|
|
|
|
|
Development Authority
5.00% 4/1/42
|
|
855,000
|
|
|
847,904
|
|
Grand Parkway Transportation 5.25% 10/1/51
|
|
1,000,000
|
|
|
1,012,960
|
29
Schedule of
investments
Delaware Dividend Income Fund
|
|
Principal amount°
|
|
Value (U.S. $)
|
Municipal Bonds
(continued)
|
|
|
|
|
|
|
New Jersey Transportation Trust Fund
Authority
|
|
|
|
|
|
|
5.00% 6/15/42
|
$
|
240,000
|
|
$
|
243,326
|
|
5.00% 6/15/44
|
|
760,000
|
|
|
766,300
|
|
Texas Private
Activity Bond Surface Transportation
|
|
|
|
|
|
|
6.75% 6/30/43 (AMT)
|
|
450,000
|
|
|
472,226
|
Total Municipal Bonds
(cost
$3,198,889)
|
|
|
|
|
3,342,716
|
|
|
Leveraged Non-Recourse Securities 0.00%
|
|
|
|
|
|
#
t
@
|
JPMorgan Fixed Income Pass Through
Trust
|
|
|
|
|
|
|
Series 2007-B 0.00% 1/15/87
|
|
1,300,000
|
|
|
0
|
Total Leveraged Non-Recourse
Securities
|
|
|
|
|
|
|
(cost
$1,105,000)
|
|
|
|
|
0
|
|
|
«Senior
Secured Loans 1.56%
|
|
|
|
|
|
|
Akorn Tranche B 4.50%
11/13/20
|
|
295,000
|
|
|
296,383
|
|
Allegion US Holding
Company Tranche B
|
|
|
|
|
|
|
3.00% 12/26/20
|
|
165,000
|
|
|
165,619
|
|
Azure Midstream Tranche B 6.50%
10/21/18
|
|
170,000
|
|
|
171,169
|
|
BJS Wholesale Club
Tranche 2nd Lien
|
|
|
|
|
|
|
8.50% 3/31/20
|
|
280,000
|
|
|
286,213
|
|
Bmc Software Tranche 1st Lien 5.00%
8/9/20
|
|
250,000
|
|
|
252,526
|
|
Borgata Tranche B 1st
Lien 6.75% 8/15/18
|
|
540,000
|
|
|
542,699
|
|
Citycenter Holdings Tranche B 5.00%
10/9/20
|
|
265,000
|
|
|
268,699
|
|
Clear Channel
Communication
|
|
|
|
|
|
|
New Tranche B 3.65% 1/29/16
|
|
280,000
|
|
|
271,463
|
|
Tranche D 6.75% 1/30/19
|
|
250,000
|
|
|
237,110
|
|
Drillships Financing Holding Tranche
B1
|
|
|
|
|
|
|
6.00% 2/17/21
|
|
255,000
|
|
|
260,865
|
|
Exopack Tranche B 1st
Lien 5.25% 4/24/19
|
|
315,000
|
|
|
320,316
|
|
Gentiva Health Services Tranche B 6.50%
10/10/19
|
|
535,000
|
|
|
528,646
|
|
Getty Images Tranche
B 4.75% 9/19/19
|
|
344,133
|
|
|
319,582
|
|
Gray Television Loan 4.75%
10/11/19
|
|
367,000
|
|
|
369,447
|
|
Hostess Brands
Tranche 1st Lien 6.75% 3/12/20
|
|
330,000
|
|
|
340,725
|
|
Hudsons Bay Tranche 2nd Lien 8.25%
10/7/21
|
|
240,000
|
|
|
246,360
|
|
Ineos US Finance Loan
4.50% 5/4/18
|
|
515,000
|
|
|
516,753
|
|
Kik Custom Products
|
|
|
|
|
|
|
Tranche 1st Lien 5.50% 5/23/19
|
|
80,000
|
|
|
78,950
|
|
Tranche 2nd Lien 9.50% 11/23/19
|
|
40,000
|
|
|
40,000
|
30
|
|
Principal amount°
|
|
Value (U.S. $)
|
«Senior
Secured Loans
(continued)
|
|
|
|
|
|
|
|
Lts Buyer Tranche 2nd Lien 8.00%
3/15/21
|
$
|
|
130,000
|
|
$
|
131,138
|
|
Moxie Liberty Tranche
B 7.50% 8/21/20
|
|
|
530,000
|
|
|
541,924
|
|
Neiman Marcus Group Loan 5.00%
10/18/20
|
|
|
560,000
|
|
|
564,159
|
|
Nuveen Investments
Tranche 2nd Lien
|
|
|
|
|
|
|
|
6.50% 2/28/19
|
|
|
280,000
|
|
|
274,808
|
|
Otter Products Tranche B 5.25%
4/29/19
|
|
|
105,000
|
|
|
105,350
|
|
Panda Temple Power II
Tranche B 1st Lien
|
|
|
|
|
|
|
|
7.25% 3/28/19
|
|
|
360,000
|
|
|
370,800
|
@
|
Polymer Group Bridge Loan 7.00%
5/26/19
|
|
|
515,000
|
|
|
517,574
|
|
Quickrete Company
Tranche 2nd Lien
|
|
|
|
|
|
|
|
7.00% 3/19/21
|
|
|
50,000
|
|
|
51,266
|
|
Ranpak Tranche 2nd Lien 8.50%
4/10/20
|
|
|
72,000
|
|
|
74,160
|
|
Rite Aid Tranche 2nd
Lien 5.75% 8/3/20
|
|
|
220,000
|
|
|
226,508
|
|
Samson Investment Company Tranche 2nd
Lien
|
|
|
|
|
|
|
|
6.00% 9/10/18
|
|
|
260,000
|
|
|
262,275
|
|
Smart & Final
Tranche 2nd Lien 10.50% 11/8/20
|
|
|
344,615
|
|
|
351,508
|
|
State Class Tankers II Tranche 1st
Lien
|
|
|
|
|
|
|
|
6.75% 6/10/20
|
|
|
310,000
|
|
|
313,488
|
|
Toys R US Property
Tranche B 6.00% 7/31/19
|
|
|
225,000
|
|
|
219,544
|
|
Usi Insurance Services Tranche B 5.25%
12/14/19
|
|
|
255,000
|
|
|
256,594
|
Total Senior Secured Loans
(cost $9,665,239)
|
|
|
|
|
|
9,774,621
|
|
|
Sovereign Bonds 0.87%
|
|
|
|
|
|
|
Brazil 0.46%
|
|
|
|
|
|
|
|
Brazil Notas do
Tesouro Nacional
|
|
|
|
|
|
|
|
Serie F 10.00% 1/1/18
|
BRL
|
|
7,281,000
|
|
|
2,888,932
|
|
|
|
|
|
|
|
2,888,932
|
Mexico 0.41%
|
|
|
|
|
|
|
|
Mexican Bonos 8.00% 6/11/20
|
MXN
|
|
29,745,000
|
|
|
2,583,214
|
|
|
|
|
|
|
|
2,583,214
|
Total Sovereign Bonds
(cost
$5,942,671)
|
|
|
|
|
|
5,472,146
|
|
|
|
|
Number of shares
|
|
|
|
Limited
Partnerships 0.18%
|
|
|
|
|
|
|
|
Brookfield Infrastructure
Partners
|
|
|
14,200
|
|
|
543,576
|
|
Lehigh Gas
Partners
|
|
|
19,800
|
|
|
560,736
|
Total Limited Partnerships
(cost $957,940)
|
|
|
|
|
|
1,104,312
|
31
Schedule of
investments
Delaware Dividend Income Fund
|
|
Number of shares
|
|
Value (U.S. $)
|
Preferred Stock 0.53%
|
|
|
|
|
|
#
|
Ally Financial 144A
7.00%
|
|
500
|
|
$
|
482,984
|
|
Freddie Mac
6.02%
|
|
40,000
|
|
|
294,400
|
|
GMAC Capital Trust I 8.125%
|
|
17,000
|
|
|
456,280
|
|
Regions Financial
6.375%
|
|
17,000
|
|
|
378,590
|
|
Vornado Realty 6.625%
|
|
27,300
|
|
|
656,565
|
@
|
Wheeler REIT
9.00%
|
|
1,028
|
|
|
1,072,393
|
Total Preferred Stock
(cost
$3,910,352)
|
|
|
|
|
3,341,212
|
|
|
|
|
Principal amount°
|
|
|
|
Short-Term Investments 5.01%
|
|
|
|
|
|
≠
Discount Note 0.06%
|
|
|
|
|
|
|
Federal Home Loan
Bank 0.05% 12/27/13
|
$
|
388,198
|
|
|
388,195
|
|
|
|
|
|
|
388,195
|
Repurchase Agreements 3.07%
|
|
|
|
|
|
|
Bank of America 0.04%, dated 11/29/13,
to
|
|
|
|
|
|
|
be repurchased on 12/2/13, repurchase price
|
|
|
|
|
|
|
$3,562,908 (collateralized by U.S. government
|
|
|
|
|
|
|
obligations 0.375%-1.875% 11/15/14-6/30/15;
|
|
|
|
|
|
|
market value $3,634,155)
|
|
3,562,897
|
|
|
3,562,897
|
|
BNP Paribas 0.06%,
dated 11/29/13, to be
|
|
|
|
|
|
|
repurchased on 12/2/13, repurchase price
|
|
|
|
|
|
|
$15,706,182 (collateralized by U.S. government
|
|
|
|
|
|
|
obligations 0.625%-2.625% 6/30/14-11/30/19;
|
|
|
|
|
|
|
market value $16,020,226)
|
|
15,706,103
|
|
|
15,706,103
|
|
|
|
|
|
|
19,269,000
|
≠U.S. Treasury Obligations 1.88%
|
|
|
|
|
|
|
U.S. Treasury Bills
|
|
|
|
|
|
|
0.02% 12/19/13
|
|
4,864,527
|
|
|
4,864,499
|
|
0.033% 1/23/14
|
|
3,151,035
|
|
|
3,150,984
|
|
0.065% 4/24/14
|
|
3,781,242
|
|
|
3,779,907
|
|
|
|
|
|
|
11,795,390
|
Total Short-Term Investments
(cost $31,452,805)
|
|
|
|
|
31,452,585
|
|
|
Total Value of Securities
100.11%
|
|
|
|
|
|
|
(cost
$536,392,408)
|
|
|
|
$
|
627,756,284
|
32
|
Number of
contracts
|
|
Value (U.S. $)
|
|
Option Written
(0.01%)
|
|
|
|
|
|
|
Call
Option (0.01%)
|
|
|
|
|
|
|
ANF US,
strike price $34.00, expires 12/21/13 (MSC)
|
(416
|
)
|
|
$
|
(53,248
|
)
|
Total Option Written
(premium received ($46,460))
|
|
|
|
|
(53,248
|
)
|
°
|
Principal amount shown is stated in U.S. Dollars unless noted that
the security is denominated in another currency.
|
|
Non income producing security.
|
=
|
Security is being fair valued in accordance with the Funds fair
valuation policy. At Nov. 30, 2013, the aggregate value of fair valued
securities was $0, which represented 0.00% of the Funds net assets. See
Note 1 in Notes to financial statements.
|
|
Variable
rate security. The rate shown is the rate as of Nov. 30, 2013. Interest
rates reset periodically.
|
#
|
Security
exempt from registration under Rule 144A of the Securities Act of 1933, as
amended. At Nov. 30, 2013, the aggregate value of Rule 144A securities was
$68,180,648, which represented 10.87% of the Funds net assets. See Note
11 in Notes to financial statements.
|
Φ
|
Step
coupon bond. Coupon increases or decreases periodically based on a
predetermined schedule. Stated rate in effect at Nov. 30,
2013.
|
@
|
Illiquid
security. At Nov. 30, 2013, the aggregate value of illiquid securities was
$1,589,967 which represented 0.25% of the Funds net assets. See Note 11
in Notes to financial statements.
|
^
|
Zero
coupon security. The rate shown is the yield at the time of
purchase.
|
t
|
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.
|
«
|
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 United States banks, (ii) the lending rate offered
by one or more European banks such as the London Inter-Bank 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 Nov.
30, 2013.
|
≠
|
The rate shown is the effective yield at
the time of purchase.
|
§
|
All or a portion of this holding is subject to unfunded loan
commitments. See Note 7 in Notes to financial
statements.
|
33
Schedule of
investments
Delaware Dividend Income Fund
The following foreign currency
exchange contracts, futures contract and swap contract were outstanding at Nov.
30, 2013:
1
Foreign Currency Exchange
Contracts
|
|
|
|
|
|
|
|
|
|
Unrealized
|
|
|
|
|
|
|
|
|
|
|
Appreciation
|
Counterparty
|
|
|
Contracts to Receive (Deliver)
|
|
In Exchange For
|
|
Settlement Date
|
|
(Depreciation)
|
MNB
|
|
JPY 32,063,920
|
|
USD
|
(319,967
|
)
|
|
12/3/13
|
|
$(6,785)
|
Futures Contracts
|
|
|
|
|
|
|
Unrealized
|
|
|
|
|
|
|
|
Appreciation
|
Contracts to Buy (Sell)
|
|
Notional Cost
|
|
Notional Value
|
|
Expiration Date
|
|
(Depreciation)
|
(100) S&P 500 EMINI
|
$8,750,204
|
|
$9,020,500
|
|
12/21/13
|
|
($270,296)
|
Swap Contracts
CDS Contracts
2
|
|
|
|
|
Annual
|
|
|
|
Unrealized
|
|
|
|
|
|
Protection
|
|
Termination
|
|
Appreciation
|
Counterparty
|
|
Swap Referenced Obligation
|
|
Notional Value
|
|
Payments
|
|
Date
|
|
(Depreciation)
|
|
Protection Purchased:
|
|
|
|
|
|
|
|
|
CME
|
CDX.NA.HY.21
|
|
$10,000,000
|
|
5.00%
|
|
12/20/18
|
|
$(286,249)
|
The use of foreign currency exchange
contracts, futures contracts, written options and contracts involves elements of
market risk and risks in excess of the amount recognized in the financial
statements. The notional values and foreign currency exchange contracts
presented above represent the Funds total exposure in such contracts, whereas
only the net unrealized appreciation (depreciation) is reflected in the Funds
net assets.
1
See Note 9 in Notes to
financial statements.
2
A CDS
contract is a risk-transfer instrument through which one party (purchaser of
protection) transfers to another party (seller of protection) the financial risk
of a credit event (as defined in the CDS agreement), as it relates to a
particular reference security or basket of securities (such as an index).
Periodic payments (receipts) on such contracts are accrued daily and recorded as
unrealized losses (gains) on swap contracts. Upon payment (receipt), such
amounts are recorded as unrealized 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 as unrealized
appreciation or depreciation daily. 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.
34
Summary of abbreviations:
ADR American Depositary Receipts
AMT
Subject to Alternative Minimum Tax
BRL Brazilian Real
CDS Credit
Default Swap
CDX.NA.HY Credit Default Swap
Index North America High-Yield
CME Chicago Mercantile Exchange
JPY
Japanese Yen
MNB Mellon National Bank
MSC Morgan Stanley
Capital
MXN Mexican Peso
PIK Pay-in-kind
REIT Real Estate
Investment Trust
USD United States Dollar
See accompanying notes, which are an
integral part of the financial statements.
35
Statement of assets and
liabilities
|
|
Delaware Dividend Income Fund
|
November 30,
2013
|
Assets:
|
|
|
|
Investments, at value
1
|
$
|
596,303,699
|
|
Short-term investments,
at value
2
|
|
31,452,585
|
|
Cash
|
|
113,673
|
|
Cash collateral for
derivatives
|
|
1,733,827
|
|
Foreign currencies, at value
3
|
|
69,660
|
|
Receivable for
securities sold
|
|
1,119,735
|
|
Receivable for fund shares sold
|
|
1,505,041
|
|
Dividends and interest
receivable
|
|
3,319,691
|
|
Variation margin receivable on futures contracts
|
|
1,000
|
|
Other assets
|
|
2,575
|
|
Total assets
|
|
635,621,486
|
|
|
Liabilities:
|
|
|
|
Payable for securities purchased
|
|
6,356,445
|
|
Payable for fund shares
redeemed
|
|
463,958
|
|
Unrealized loss on foreign currency exchange contracts
|
|
6,785
|
|
Unrealized loss on
credit default swap contracts
5
|
|
709,747
|
|
Options written, at value
4
|
|
53,248
|
|
Investment management
fees payable
|
|
327,495
|
|
Other accrued expenses
|
|
209,985
|
|
Annual protection
payments on credit default swap contracts
|
|
100,000
|
|
Distribution fees payable to affiliates
|
|
276,090
|
|
Trustees fees and
expenses payable
|
|
4,294
|
|
Other affiliates payable
|
|
35,738
|
|
Total
liabilities
|
|
8,543,785
|
|
|
Total Net Assets
|
$
|
627,077,701
|
|
|
Net Assets Consist of:
|
|
|
|
Paid-in capital
|
$
|
675,116,233
|
|
Undistributed net
investment income
|
|
207,449
|
|
Accumulated net realized loss on investments
|
|
(138,957,002
|
)
|
Net unrealized
appreciation of investments
|
|
90,711,021
|
|
Total Net
Assets
|
$
|
627,077,701
|
|
|
1
Investments,
at cost
|
$
|
504,939,603
|
|
2
Short-term investments, at cost
|
|
31,452,805
|
|
3
Foreign
currencies, at cost
|
|
69,447
|
|
4
Options written, at cost
|
|
46,460
|
|
5
Including
upfront payments received
|
|
(423,498
|
)
|
36
Net Asset Value
|
|
|
|
Class A
|
|
|
Net assets
|
$
|
297,116,886
|
Shares of beneficial
interest outstanding, unlimited authorization, no par
|
|
23,192,723
|
Net asset value per share
|
$
|
12.81
|
Sales
charge
|
|
5.75%
|
Offering price per share, equal to net
asset value per share/(1 - sales charge)
|
$
|
13.59
|
|
Class B
|
|
|
Net assets
|
$
|
10,161,623
|
Shares of beneficial
interest outstanding, unlimited authorization, no par
|
|
792,487
|
Net asset value per share
|
$
|
12.82
|
|
Class C
|
|
|
Net assets
|
$
|
254,960,683
|
Shares of beneficial
interest outstanding, unlimited authorization, no par
|
|
19,875,429
|
Net asset value per share
|
$
|
12.83
|
|
Class R
|
|
|
Net assets
|
$
|
3,029,705
|
Shares of beneficial
interest outstanding, unlimited authorization, no par
|
|
236,513
|
Net asset value per share
|
$
|
12.81
|
|
Institutional Class
|
|
|
Net assets
|
$
|
61,808,804
|
Shares of beneficial
interest outstanding, unlimited authorization, no par
|
|
4,824,745
|
Net asset value per share
|
$
|
12.81
|
See accompanying notes, which are an
integral part of the financial statements.
37
Statement of operations
|
|
Delaware Dividend Income Fund
|
Year Ended November 30,
2013
|
Investment
Income:
|
|
|
|
|
|
|
|
Dividends
|
$
|
9,103,817
|
|
|
|
|
|
Interest
|
|
9,182,653
|
|
|
|
|
|
Security lending income
|
|
23,630
|
|
|
|
|
|
Foreign tax withheld
|
|
(63,720
|
)
|
|
$
|
18,246,380
|
|
|
Expenses:
|
|
|
|
|
|
|
|
Management fees
|
|
3,253,634
|
|
|
|
|
|
Distribution expenses Class A
|
|
709,525
|
|
|
|
|
|
Distribution expenses Class B
|
|
134,205
|
|
|
|
|
|
Distribution expenses Class C
|
|
1,961,134
|
|
|
|
|
|
Distribution expenses Class R
|
|
18,466
|
|
|
|
|
|
Dividend disbursing and transfer agent fees and expenses
|
|
600,641
|
|
|
|
|
|
Accounting and administration expenses
|
|
194,858
|
|
|
|
|
|
Registration fees
|
|
97,835
|
|
|
|
|
|
Reports and statements to shareholders
|
|
54,727
|
|
|
|
|
|
Audit and taxes
|
|
46,122
|
|
|
|
|
|
Custodian fees
|
|
44,023
|
|
|
|
|
|
Legal fees
|
|
42,239
|
|
|
|
|
|
Trustees fees and expenses
|
|
25,786
|
|
|
|
|
|
Other expenses
|
|
37,199
|
|
|
|
7,220,394
|
|
Less waived distribution expenses Class A
|
|
|
|
|
|
(98,101
|
)
|
Less waived distribution expenses Class R
|
|
|
|
|
|
(2,671
|
)
|
Less expense paid indirectly
|
|
|
|
|
|
(567
|
)
|
Total operating expenses
|
|
|
|
|
|
7,119,055
|
|
Net Investment
Income
|
|
|
|
|
|
11,127,325
|
|
38
Net Realized and
Unrealized Gain (Loss):
|
|
|
|
Net realized gain (loss) on:
|
|
|
|
Investments
|
$
|
20,843,342
|
|
Foreign currencies
|
|
(80,800
|
)
|
Foreign currency exchange contracts
|
|
(227,122
|
)
|
Futures contracts
|
|
(629,446
|
)
|
Options written
|
|
346,375
|
|
Swap contracts
|
|
(2,961,102
|
)
|
Net realized gain
|
|
17,291,247
|
|
Net change in unrealized appreciation (depreciation) of:
|
|
|
|
Investments
|
|
59,406,205
|
|
Foreign currencies
|
|
4,993
|
|
Foreign currency exchange contracts
|
|
(5,959
|
)
|
Futures contracts
|
|
(321,190
|
)
|
Options written
|
|
98,213
|
|
Swap contracts
|
|
(39,947
|
)
|
Net change in unrealized appreciation (depreciation)
|
|
59,142,315
|
|
Net Realized and
Unrealized Gain
|
|
76,433,562
|
|
|
Net Increase in Net Assets
Resulting from Operations
|
$
|
87,560,887
|
|
See accompanying notes, which are an
integral part of the financial statements.
39
Statements of changes in net
assets
Delaware Dividend Income
Fund
|
Year
Ended
|
|
11/30/13
|
|
11/30/12
|
Increase in Net Assets from
Operations:
|
|
|
|
|
|
|
|
Net investment income
|
$
|
11,127,325
|
|
|
$
|
12,119,863
|
|
Net realized
gain
|
|
17,291,247
|
|
|
|
6,224,448
|
|
Net change in unrealized appreciation (depreciation)
|
|
59,142,315
|
|
|
|
34,303,651
|
|
Net increase in
net assets resulting from operations
|
|
87,560,887
|
|
|
|
52,647,962
|
|
|
Dividends and Distributions to
Shareholders from:
|
|
|
|
|
|
|
|
Net investment income:
|
|
|
|
|
|
|
|
Class A
|
|
(6,053,997
|
)
|
|
|
(6,418,029
|
)
|
Class B
|
|
(235,428
|
)
|
|
|
(493,834
|
)
|
Class C
|
|
(3,338,842
|
)
|
|
|
(3,896,652
|
)
|
Class R
|
|
(71,763
|
)
|
|
|
(98,748
|
)
|
Institutional Class
|
|
(1,226,175
|
)
|
|
|
(1,017,121
|
)
|
|
|
(10,926,205
|
)
|
|
|
(11,924,384
|
)
|
|
Capital Share
Transactions:
|
|
|
|
|
|
|
|
Proceeds from shares sold:
|
|
|
|
|
|
|
|
Class A
|
|
96,741,474
|
|
|
|
29,742,813
|
|
Class B
|
|
205,221
|
|
|
|
102,079
|
|
Class C
|
|
90,858,443
|
|
|
|
17,557,460
|
|
Class R
|
|
1,189,004
|
|
|
|
1,266,352
|
|
Institutional Class
|
|
38,525,198
|
|
|
|
12,708,292
|
|
|
Net asset value
of shares issued upon reinvestment
|
|
|
|
|
|
|
|
of dividends and distributions:
|
|
|
|
|
|
|
|
Class A
|
|
5,604,764
|
|
|
|
5,582,624
|
|
Class B
|
|
217,686
|
|
|
|
438,026
|
|
Class C
|
|
3,003,745
|
|
|
|
3,398,886
|
|
Class R
|
|
71,517
|
|
|
|
98,747
|
|
Institutional Class
|
|
1,057,730
|
|
|
|
806,893
|
|
|
|
237,474,782
|
|
|
|
71,702,172
|
|
40
|
|
Year
Ended
|
|
|
11/30/13
|
|
11/30/12
|
Capital Share Transactions
(continued):
|
|
|
|
|
|
|
Cost of shares redeemed:
|
|
|
|
|
|
|
|
|
Class A
|
|
$
|
(46,311,215
|
)
|
|
$
|
(40,612,519
|
)
|
Class B
|
|
|
(9,382,458
|
)
|
|
|
(8,621,617
|
)
|
Class C
|
|
|
(25,556,412
|
)
|
|
|
(31,006,812
|
)
|
Class R
|
|
|
(1,884,594
|
)
|
|
|
(1,881,753
|
)
|
Institutional Class
|
|
|
(14,947,724
|
)
|
|
|
(10,801,705
|
)
|
|
|
|
(98,082,403
|
)
|
|
|
(92,924,406
|
)
|
Increase (decrease)
in net assets derived from
|
|
|
|
|
|
|
|
|
capital share
transactions
|
|
|
139,392,379
|
|
|
|
(21,222,234
|
)
|
Net Increase in Net
Assets
|
|
|
216,027,061
|
|
|
|
19,501,344
|
|
|
Net Assets:
|
|
|
|
|
|
|
|
|
Beginning of year
|
|
|
411,050,640
|
|
|
|
391,549,296
|
|
End of year
(including undistributed
|
|
|
|
|
|
|
|
|
net investment income of $207,449
|
|
|
|
|
|
|
|
|
and $138,633, respectively)
|
|
$
|
627,077,701
|
|
|
$
|
411,050,640
|
|
See accompanying notes, which are an
integral part of the financial statements.
41
Financial highlights
Delaware Dividend 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 from investment
operations:
|
Net investment
income
1
|
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 return
2
|
|
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 average shares outstanding method has been applied for
per share information.
2
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 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.
42
|
Year Ended
|
|
|
11/30/13
|
|
11/30/12
|
|
11/30/11
|
|
11/30/10
|
|
11/30/09
|
|
|
$10.940
|
|
|
$9.890
|
|
|
$9.810
|
|
|
$9.190
|
|
|
$7.010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.316
|
|
|
0.348
|
|
|
0.351
|
|
|
0.373
|
|
|
0.407
|
|
|
|
1.854
|
|
|
1.045
|
|
|
0.086
|
|
|
0.695
|
|
|
2.247
|
|
|
|
2.170
|
|
|
1.393
|
|
|
0.437
|
|
|
1.068
|
|
|
2.654
|
|
|
|
|
|
|
|
(0.300
|
)
|
|
(0.343
|
)
|
|
(0.357
|
)
|
|
(0.448
|
)
|
|
(0.474
|
)
|
|
|
(0.300
|
)
|
|
(0.343
|
)
|
|
(0.357
|
)
|
|
(0.448
|
)
|
|
(0.474
|
)
|
|
|
|
|
$12.810
|
|
|
$10.940
|
|
|
$9.890
|
|
|
$9.810
|
|
|
$9.190
|
|
|
|
|
|
20.07%
|
|
|
14.25%
|
|
|
4.39%
|
|
|
11.91%
|
|
|
39.35%
|
|
|
|
|
|
|
|
$297,117
|
|
|
$203,819
|
|
|
$189,313
|
|
|
$192,876
|
|
|
$200,720
|
|
|
|
1.12%
|
|
|
1.16%
|
|
|
1.19%
|
|
|
1.26%
|
|
|
1.17%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.16%
|
|
|
1.21%
|
|
|
1.24%
|
|
|
1.31%
|
|
|
1.36%
|
|
|
|
2.62%
|
|
|
3.28%
|
|
|
3.41%
|
|
|
3.93%
|
|
|
5.22%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.58%
|
|
|
3.23%
|
|
|
3.36%
|
|
|
3.88%
|
|
|
5.03%
|
|
|
|
51%
|
|
|
47%
|
|
|
110%
|
|
|
109%
|
|
|
69%
|
|
|
43
Financial
highlights
Delaware Dividend Income Fund Class
B
Selected data for each share of the Fund
outstanding throughout each period were as follows:
Net asset value, beginning
of period
|
|
Income from investment
operations:
|
Net investment
income
1
|
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 return
2
|
|
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 average shares outstanding method has been applied for
per share information.
2
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.
44
|
Year
Ended
|
|
|
11/30/13
|
|
11/30/12
|
|
11/30/11
|
|
11/30/10
|
|
11/30/09
|
|
|
$10.950
|
|
|
$9.900
|
|
|
$9.820
|
|
|
$9.190
|
|
|
$7.010
|
|
|
|
|
|
|
|
0.223
|
|
|
0.268
|
|
|
0.274
|
|
|
0.302
|
|
|
0.348
|
|
|
|
1.856
|
|
|
1.046
|
|
|
0.086
|
|
|
0.694
|
|
|
2.248
|
|
|
|
2.079
|
|
|
1.314
|
|
|
0.360
|
|
|
0.996
|
|
|
2.596
|
|
|
|
|
|
|
|
(0.209
|
)
|
|
(0.264
|
)
|
|
(0.280
|
)
|
|
(0.366
|
)
|
|
(0.416
|
)
|
|
|
(0.209
|
)
|
|
(0.264
|
)
|
|
(0.280
|
)
|
|
(0.366
|
)
|
|
(0.416
|
)
|
|
|
|
|
$12.820
|
|
|
$10.950
|
|
|
$9.900
|
|
|
$9.820
|
|
|
$9.190
|
|
|
|
|
|
19.15%
|
|
|
13.39%
|
|
|
3.61%
|
|
|
11.06%
|
|
|
38.47%
|
|
|
|
|
|
|
|
$10,161
|
|
|
$16,874
|
|
|
$22,803
|
|
|
$29,003
|
|
|
$33,725
|
|
|
|
1.87%
|
|
|
1.91%
|
|
|
1.94%
|
|
|
2.01%
|
|
|
1.92%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.87%
|
|
|
1.91%
|
|
|
1.94%
|
|
|
2.01%
|
|
|
2.06%
|
|
|
|
1.86%
|
|
|
2.53%
|
|
|
2.66%
|
|
|
3.18%
|
|
|
4.47%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.86%
|
|
|
2.53%
|
|
|
2.66%
|
|
|
3.18%
|
|
|
4.33%
|
|
|
|
51%
|
|
|
47%
|
|
|
110%
|
|
|
109%
|
|
|
69%
|
|
|
45
Financial highlights
Delaware Dividend 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 from investment
operations:
|
Net investment
income
1
|
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 return
2
|
|
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 average shares
outstanding method has been applied for per share information.
2
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.
46
|
Year
Ended
|
|
|
11/30/13
|
|
11/30/12
|
|
11/30/11
|
|
11/30/10
|
|
11/30/09
|
|
|
$10.960
|
|
|
$9.900
|
|
|
$9.820
|
|
|
$9.190
|
|
|
$7.010
|
|
|
|
|
|
|
|
0.226
|
|
|
0.268
|
|
|
0.274
|
|
|
0.302
|
|
|
0.348
|
|
|
|
1.853
|
|
|
1.056
|
|
|
0.086
|
|
|
0.694
|
|
|
2.248
|
|
|
|
2.079
|
|
|
1.324
|
|
|
0.360
|
|
|
0.996
|
|
|
2.596
|
|
|
|
|
|
|
|
(0.209
|
)
|
|
(0.264
|
)
|
|
(0.280
|
)
|
|
(0.366
|
)
|
|
(0.416
|
)
|
|
|
(0.209
|
)
|
|
(0.264
|
)
|
|
(0.280
|
)
|
|
(0.366
|
)
|
|
(0.416
|
)
|
|
|
|
|
$12.830
|
|
|
$10.960
|
|
|
$9.900
|
|
|
$9.820
|
|
|
$9.190
|
|
|
|
|
|
19.13%
|
|
|
13.50%
|
|
|
3.61%
|
|
|
11.06%
|
|
|
38.27%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$254,961
|
|
|
$156,758
|
|
|
$151,107
|
|
|
$152,009
|
|
|
$155,028
|
|
|
|
1.87%
|
|
|
1.91%
|
|
|
1.94%
|
|
|
2.01%
|
|
|
1.92%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.87%
|
|
|
1.91%
|
|
|
1.94%
|
|
|
2.01%
|
|
|
2.06%
|
|
|
|
1.87%
|
|
|
2.53%
|
|
|
2.66%
|
|
|
3.18%
|
|
|
4.47%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.87%
|
|
|
2.53%
|
|
|
2.66%
|
|
|
3.18%
|
|
|
4.33%
|
|
|
|
51%
|
|
|
47%
|
|
|
110%
|
|
|
109%
|
|
|
69%
|
|
|
47
Financial highlights
Delaware Dividend 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 from investment
operations:
|
Net investment
income
1
|
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
return
2
|
|
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 average shares
outstanding method has been applied for per share information.
2
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 all 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.
48
|
Year Ended
|
|
|
11/30/13
|
|
11/30/12
|
|
11/30/11
|
|
11/30/10
|
|
11/30/09
|
|
|
$10.940
|
|
|
$9.890
|
|
|
$9.810
|
|
|
$9.190
|
|
|
$7.010
|
|
|
|
|
|
|
|
0.284
|
|
|
0.321
|
|
|
0.325
|
|
|
0.349
|
|
|
0.387
|
|
|
|
1.856
|
|
|
1.046
|
|
|
0.086
|
|
|
0.693
|
|
|
2.246
|
|
|
|
2.140
|
|
|
1.367
|
|
|
0.411
|
|
|
1.042
|
|
|
2.633
|
|
|
|
|
|
|
|
(0.270
|
)
|
|
(0.317
|
)
|
|
(0.331
|
)
|
|
(0.422
|
)
|
|
(0.453
|
)
|
|
|
(0.270
|
)
|
|
(0.317
|
)
|
|
(0.331
|
)
|
|
(0.422
|
)
|
|
(0.453
|
)
|
|
|
|
|
$12.810
|
|
|
$10.940
|
|
|
$9.890
|
|
|
$9.810
|
|
|
$9.190
|
|
|
|
|
|
19.77%
|
|
|
13.97%
|
|
|
4.13%
|
|
|
11.60%
|
|
|
39.15%
|
|
|
|
|
|
|
|
$3,030
|
|
|
$3,151
|
|
|
$3,340
|
|
|
$3,069
|
|
|
$3,067
|
|
|
|
1.37%
|
|
|
1.41%
|
|
|
1.44%
|
|
|
1.51%
|
|
|
1.42%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.46%
|
|
|
1.51%
|
|
|
1.54%
|
|
|
1.61%
|
|
|
1.66%
|
|
|
|
2.37%
|
|
|
3.03%
|
|
|
3.16%
|
|
|
3.68%
|
|
|
4.97%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.28%
|
|
|
2.93%
|
|
|
3.06%
|
|
|
3.58%
|
|
|
4.73%
|
|
|
|
51%
|
|
|
47%
|
|
|
110%
|
|
|
109%
|
|
|
69%
|
|
|
49
Financial
highlights
Delaware Dividend 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 from investment
operations:
|
Net investment
income
1
|
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 return
2
|
|
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 average shares outstanding method has been applied for
per share information.
2
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.
50
|
Year
Ended
|
|
|
11/30/13
|
|
11/30/12
|
|
11/30/11
|
|
11/30/10
|
|
11/30/09
|
|
|
$10.940
|
|
|
$9.890
|
|
|
$9.810
|
|
|
$9.190
|
|
|
$7.010
|
|
|
|
|
|
|
|
0.347
|
|
|
0.375
|
|
|
0.375
|
|
|
0.399
|
|
|
0.426
|
|
|
|
1.853
|
|
|
1.045
|
|
|
0.088
|
|
|
0.697
|
|
|
2.246
|
|
|
|
2.200
|
|
|
1.420
|
|
|
0.463
|
|
|
1.096
|
|
|
2.672
|
|
|
|
|
|
|
|
(0.330
|
)
|
|
(0.370
|
)
|
|
(0.383
|
)
|
|
(0.476
|
)
|
|
(0.492
|
)
|
|
|
(0.330
|
)
|
|
(0.370
|
)
|
|
(0.383
|
)
|
|
(0.476
|
)
|
|
(0.492
|
)
|
|
|
|
|
$12.810
|
|
|
$10.940
|
|
|
$9.890
|
|
|
$9.810
|
|
|
$9.190
|
|
|
|
|
|
20.37%
|
|
|
14.66%
|
|
|
4.55%
|
|
|
12.24%
|
|
|
39.68%
|
|
|
|
|
|
|
|
$61,809
|
|
|
$30,449
|
|
|
$24,986
|
|
|
$12,766
|
|
|
$2,394
|
|
|
|
0.87%
|
|
|
0.91%
|
|
|
0.94%
|
|
|
1.01%
|
|
|
0.92%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.87%
|
|
|
0.91%
|
|
|
0.94%
|
|
|
1.01%
|
|
|
1.06%
|
|
|
|
2.87%
|
|
|
3.53%
|
|
|
3.66%
|
|
|
4.18%
|
|
|
5.47%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.87%
|
|
|
3.53%
|
|
|
3.66%
|
|
|
4.18%
|
|
|
5.33%
|
|
|
|
51%
|
|
|
47%
|
|
|
110%
|
|
|
109%
|
|
|
69%
|
|
|
51
Notes to financial statements
|
|
|
Delaware Dividend
Income Fund
|
November 30,
2013
|
Delaware Group
®
Equity Funds V
(Trust) is organized as a Delaware statutory trust and offers three series:
Delaware Dividend Income Fund, Delaware Small Cap Core Fund and Delaware Small
Cap Value Fund. These financial statements and the related notes pertain to
Delaware Dividend 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 B, 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 B shares may be purchased only through dividend reinvestment and certain
permitted exchanges. Prior to June 1, 2007, Class B shares were sold with a CDSC
that declined from 4.00% to zero depending upon the period of time the shares
were held. Class B shares will automatically convert to Class A shares on a
quarterly basis approximately eight years after purchase. Class C shares are
sold with a CDSC of 1.00%, if redeemed during the first twelve 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 to provide high current income and an investment that has the potential for
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 (NYSE) 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, then 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. Debt securities and credit default swap (CDS) contracts are
valued based upon valuations provided by an independent pricing service or
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. U.S.
government and agency securities are valued at the mean between the bid and ask
prices, which approximates fair value. 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. Swap prices are derived using daily swap curves
and models that incorporate a number of market data factors, such as discounted
cash flows, trades and values of the underlying reference instruments. Foreign
currency exchange contracts are valued
52
at the mean between the bid and ask
prices, which approximates fair value. Interpolated values are derived when the
settlement date of the contract is an interim date for which quotations are not
available. Futures contracts and options on futures contracts are valued at the
daily quoted settlement prices. Exchange-traded options are valued at the last
reported sale price or, if no sales are reported, at the mean between the last
reported bid and ask prices, which approximates fair value. 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
Funds 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 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 Funds 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 Funds tax positions taken for all open federal income tax years
(Nov. 30, 2010 - Nov. 30, 2013), and has concluded that no provision for federal
income tax is required in the Funds financial statements. In regards to foreign
taxes only, the Fund has open tax years in certain foreign countries 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 counterpartys 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 Nov.
29, 2013.
53
Notes to financial
statements
Delaware Dividend
Income Fund
1. Significant Accounting Policies
(continued)
Foreign Currency Transactions
Transactions denominated in foreign
currencies are recorded at the prevailing exchange rates on the valuation date
in accordance with the Funds prospectus. The value of all assets and
liabilities denominated in foreign currencies is translated into U.S. dollars at
the exchange rate of such currencies against the U.S. dollar daily. 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 in the
statements of operations under the caption net realized gain (loss) on foreign
currencies. For foreign equity securities, these changes are included in net
realized and unrealized gain or loss on investments. The Fund reports certain
foreign currency related transactions as components of realized gains (losses)
for financial reporting purposes, whereas such components are treated as
ordinary income (loss) for federal income tax purposes.
Use of Estimates
The preparation of financial statements in conformity with
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. Interest
income is recorded on the accrual basis. Discounts and premiums on debt
securities are amortized to interest income over the lives of the respective
securities using the effective interest method. Distributions received from
investments in Real Estate Investment Trusts (REITs) are recorded as dividend
income on ex-dividend date, subject to reclassification upon notice of the
character of such distributions by the issuer. The financial statements reflect
an estimate of the reclassification of the distribution character. 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 Funds
understanding of the applicable countrys tax rules and rates.
54
The Fund declares and pays dividends from
net investment income monthly and distributions from net realized gain on
investments, if any, annually. The Fund may distribute more frequently, if
necessary for tax purposes. Dividends and distributions, if any, are recorded on
the ex-dividend date.
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. 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. There
were no commission rebates for the year ended Nov. 30, 2013.
The Fund may receive earnings credits from
its custodian when positive cash balances are maintained, which are used to
offset custody fees. There were no earnings credits for the year ended Nov. 30,
2013.
The Fund receives earnings credits from
its transfer agent when positive cash balances are maintained, which are used to
offset transfer agent fees. If the amount earned is greater than one dollar, the
expense paid under this arrangement is included in dividend disbursing and
transfer agent fees and expenses and appears on the statement of operations with
the corresponding expense offset shown as expense paid indirectly. For the
year ended Nov. 30, 2013, the Fund earned $567 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.
Delaware Service Company, Inc. (DSC), an
affiliate of DMC, provides fund accounting and financial administration
oversight services to the Fund. For these services, the Fund pays DSC fees 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 DSC 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 year ended Nov. 30,
2013, the Fund was charged $ 24,350 for these services.
55
Notes to financial
statements
Delaware Dividend
Income Fund
2. Investment Management,
Administration Agreements and Other Transactions with Affiliates
(continued)
DSC is also the transfer agent and
dividend disbursing agent of the Fund. For these services, the Fund pays DSC
fees 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. These amounts
are included in the statement of operations as dividend disbursing and transfer
agent fees and expenses. For the year ended Nov. 30, 2013, the amount charged by DSC
was $111,204. Pursuant to a sub-transfer agency agreement between DSC 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 not to exceed 0.25% of the average daily
net assets of the Class A shares, 1.00% of the average daily net assets of the
Class B and C shares and 0.50% of the average daily net assets of Class R
shares. Prior to Oct.1, 2013, the Fund paid an annual distribution and service
fee of 0.30%, 1.00% and 0.60% of the average daily net assets of the Class A,
Class B and Class R shares, respectively. For the period from Dec. 1, 2012 to
Oct. 1, 2013, the distribution and service fees for Class A and Class R were
contractually limited to 0.25% and 0.50% of the classes average daily net
assets. Institutional Class shares pay no distribution and service expenses.
As provided in the investment management
agreement, the Fund bears the cost of certain legal services, including internal
legal services provided to the Fund by DMC and/or its affiliates employees. For
the year ended Nov. 30, 2013, the Fund was charged $15,841 for internal legal
services provided by DMC and/or its affiliates employees.
For the year ended Nov. 30, 2013, DDLP
earned $113,311 for commissions on sales of the Funds Class A shares. For the
year ended Nov. 30, 2013 DDLP received gross CDSC commissions of $138, $2,694
and $1,625 on redemption of the Funds Class A, Class B and Class C shares,
respectively, and these commissions were entirely used to offset up-front
commissions previously paid by DDLP to broker/dealers on sales of those shares.
Trustees fees include expenses accrued by
the Fund for each Trustees retainer and meeting fees. Certain officers of DMC,
DSC 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 year ended Nov. 30, 2013, the Fund
made purchases of $366,107,303 and sales of $235,809,668 of investment
securities other than U.S. government securities and short-term investments.
56
At Nov. 30, 2013, the cost of investments
for federal income tax purposes was $546,184,917. At Nov. 30, 2013, the net
unrealized appreciation was $81,571,367, of which $100,628,213 related to
unrealized appreciation of investments and $19,056,846 related to unrealized
depreciation of investments.
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 entitys own assumptions about the assumptions that market
participants would use in pricing the asset or liability developed based on the
best information available under the circumstances. The Funds 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 (e.g., 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) (e.g., 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
|
|
inputs are significant
unobservable inputs (including the Fund's own assumptions used to
determine the fair value of investments) (e.g., 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.
57
Notes to financial
statements
Delaware Dividend
Income Fund
3. Investments
(continued)
The following table summarizes the
valuation of the Fund's investments by fair value hierarchy levels as of Nov.
30, 2013:
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
Commercial
Mortgage-Backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
|
$
|
|
|
|
$
|
2,224,221
|
|
|
$
|
|
|
$
|
2,224,221
|
|
Bank Loans
|
|
|
|
|
|
8,350,003
|
|
|
|
1,424,618
|
|
|
9,774,621
|
|
Corporate
Debt
|
|
|
|
|
|
153,597,218
|
|
|
|
|
|
|
153,597,218
|
|
Foreign Debt
|
|
|
|
|
|
5,472,146
|
|
|
|
|
|
|
5,472,146
|
|
Municipal
Bonds
|
|
|
|
|
|
3,342,716
|
|
|
|
|
|
|
3,342,716
|
|
Common Stock
|
|
397,581,588
|
|
|
|
|
|
|
|
|
|
|
397,581,588
|
|
Convertible Preferred
Stock
1
|
|
11,670,945
|
|
|
|
8,194,720
|
|
|
|
|
|
|
19,865,665
|
|
Preferred Stock
1
|
|
1,491,435
|
|
|
|
777,384
|
|
|
|
1,072,393
|
|
|
3,341,212
|
|
Limited
Partnership
|
|
1,104,312
|
|
|
|
|
|
|
|
|
|
|
1,104,312
|
|
Short-Term Investments
|
|
|
|
|
|
31,452,585
|
|
|
|
|
|
|
31,452,585
|
|
Total
|
$
|
411,848,280
|
|
|
$
|
213,410,993
|
|
|
$
|
2,497,011
|
|
$
|
627,756,284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
Written
|
$
|
(53,248
|
)
|
|
$
|
|
|
|
$
|
|
|
$
|
(53,248
|
)
|
Foreign Currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange Contracts
|
|
|
|
|
|
(6,785
|
)
|
|
|
|
|
|
(6,785
|
)
|
Futures
Contracts
|
|
(270,296
|
)
|
|
|
|
|
|
|
|
|
|
(270,296
|
)
|
Swap Contracts
|
|
|
|
|
|
(286,249
|
)
|
|
|
|
|
|
(286,249
|
)
|
1
Security type is valued across
multiple levels. The amount attributed to Level 1 investments, Level 2
investments and Level 3 investments represents the following percentages of the
total market value of this security type for the Fund. Level 1 investments
represent exchange-traded investments, Level 2 investments represent investments
with observable inputs, while Level 3 investments represent investments without
observable inputs.
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
Bank Loans
|
|
|
85.43%
|
|
14.57%
|
|
100.00%
|
Convertible Preferred Stock
|
58.75%
|
|
41.25%
|
|
|
|
100.00%
|
Preferred
Stock
|
44.64%
|
|
23.27%
|
|
32.09%
|
|
100.00%
|
The securities deemed worthless on the
schedule of investments are considered to be Level 3 securities in this
table.
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 period in relation to net assets. Management has
determined not to provide additional disclosure on Level 3 inputs under ASU No.
2011-04 since the Level 3 investments are not considered significant to the
Funds net assets at the end of the period.
During the year ended Nov. 30, 2013, there
were no transfers between Level 1 investments, Level 2 investments and Level 3
investments that had a significant impact to the Fund. The Funds policy is to
recognize transfers between levels at the beginning of the reporting period.
58
4. Dividend and Distribution
Information
Income and long-term capital gain
distributions are determined in accordance with federal income tax regulations,
which may differ from U.S. GAAP. Additionally, distributions from net gains on
foreign currency transactions and net short-term gains on sales of investment
securities are treated as ordinary income for federal income tax purposes. The
tax character of dividends and distributions paid during the years ended Nov.
30, 2013 and 2012 was as follows:
|
Year
Ended
|
|
11/30/13
|
|
11/30/12
|
Ordinary
income
|
$
|
10,926,205
|
|
$
|
11,924,384
|
5. Components of Net Assets on a Tax
Basis
As of Nov. 30, 2013, the components of net
assets on a tax basis were as follows:
Shares of beneficial
interest
|
$
|
675,116,233
|
|
Undistributed ordinary income
|
|
1,630,813
|
|
Capital loss
carryforwards
|
|
(131,235,699
|
)
|
Unrealized appreciation
|
|
81,566,354
|
|
Net assets
|
$
|
627,077,701
|
|
The differences between book basis and tax
basis components of net assets are primarily attributable to tax deferral of
losses on wash sales, tax treatment of market discount and premium on debt
instruments, mark-to market of foreign currency contracts, mark-to-market on
futures and options contracts, tax treatment of CDS contracts, trust preferred
securities, REITs, tax treatment of partnership income and contingent payment
debt instruments.
For financial reporting purposes, capital
accounts are adjusted to reflect the tax character of permanent book/tax
differences. Reclassifications are primarily due to tax treatment of gain (loss)
on foreign currency transactions, market discount and premium on certain debt
instruments, passive foreign investment companies, CDS contracts, contingent
payment debt instruments, and partnership income. Results of operations and net
assets were not affected by these reclassifications. For the year ended Nov. 30,
2013, the Fund recorded the following reclassifications.
Undistributed net
investment income
|
$
|
144,962
|
|
Accumulated net realized loss
|
|
(144,962
|
)
|
For federal income tax purposes, capital
loss carryforwards may be carried forward and applied against future capital
gains. $14,163,914 was utilized in 2013. Capital loss carryforwards remaining at
Nov. 30, 2013 will expire as follows: $76,486,649 expires in 2016 and
$54,749,050 expires in 2017.
59
Notes to financial
statements
Delaware Dividend Income
Fund
5. Components of Net Assets on a Tax
Basis (continued)
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. However, any losses incurred during those future taxable years
will be required to be utilized prior to the losses incurred in pre-enactment
taxable years, which carry an expiration date. As a result of this ordering
rule, pre-enactment capital loss carryforwards may be more likely to expire
unused. 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.
6. Capital Shares
Transactions in capital shares were as
follows:
|
Year Ended
|
|
|
11/30/13
|
|
|
11/30/12
|
|
Shares
sold:
|
|
|
|
|
|
Class A
|
7,963,286
|
|
|
2,797,793
|
|
Class
B
|
17,010
|
|
|
9,586
|
|
Class C
|
7,445,097
|
|
|
1,650,812
|
|
Class
R
|
99,301
|
|
|
120,275
|
|
Institutional Class
|
3,182,591
|
|
|
1,204,797
|
|
|
|
|
|
|
|
Shares issued upon
reinvestment of dividends and distributions:
|
|
|
|
|
|
Class A
|
467,743
|
|
|
526,855
|
|
Class
B
|
18,398
|
|
|
41,400
|
|
Class C
|
250,979
|
|
|
320,522
|
|
Class
R
|
6,010
|
|
|
9,332
|
|
Institutional Class
|
87,786
|
|
|
76,031
|
|
|
19,538,201
|
|
|
6,757,403
|
|
Shares redeemed:
|
|
|
|
|
|
Class
A
|
(3,863,148
|
)
|
|
(3,846,267
|
)
|
Class B
|
(783,456
|
)
|
|
(814,349
|
)
|
Class
C
|
(2,126,944
|
)
|
|
(2,927,509
|
)
|
Class R
|
(156,755
|
)
|
|
(179,453
|
)
|
Institutional
Class
|
(1,228,075
|
)
|
|
(1,025,570
|
)
|
|
(8,158,378
|
)
|
|
(8,793,148
|
)
|
Net increase
(decrease)
|
11,379,823
|
|
|
(2,035,745
|
)
|
60
For the years ended Nov. 30, 2013 and
2012, 105,064 Class B shares were converted to 105,126 Class A shares valued at
$1,249,804 and 204,345 Class B shares were converted to 204,433 Class A shares
valued at $2,148,049, respectively. 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.
7. Unfunded Commitments
The Fund may invest in floating rate
loans. In connection with these investments, the Fund may also enter into
unfunded corporate loan commitments (commitments). Commitments may obligate the
Fund to furnish temporary financing to a borrower until permanent financing can
be arranged. In connection with these commitments, the Fund earns a commitment
fee, typically set as a percentage of the commitment amount.
As of Nov. 30, 2013, the Fund had the
following unfunded loan commitments:
Borrower
|
Unfunded Loan Commitment
|
Community Health
Systems Secured Bridge Loan
|
|
$
|
272,014
|
|
Community Health Systems Unsecured
Bridge Loan
|
|
|
292,986
|
|
Darling International
Bridge Loan
|
|
|
515,000
|
|
8. Line of Credit
The Fund, along with certain other funds
in the Delaware Investments
®
Family of Funds (Participants), was a participant in a
$125,000,000 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 Participants 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. 12, 2013.
On Nov. 12, 2013, the Fund, along with the
other Participants, entered into an amendment to the agreement for a
$225,000,000 revolving line of credit. The line of credit is to be used as
described above and operates in substantially the same manner as the original
agreement. The line of credit available under the agreement expires on Nov. 10,
2014.
The Fund had no amounts outstanding as of
Nov. 30, 2013 or at any time during the year then ended.
61
Notes to financial
statements
Delaware Dividend
Income Fund
9. 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 enters into foreign 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. 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 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 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 Funds
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 Funds exposure to the
counterparty.
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 financial futures contracts to hedge its existing portfolio securities
against fluctuations in fair value caused by changes in prevailing market
interest rates. 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
62
in futures, there is minimal counterparty
credit risk to the Fund because futures are exchange-traded and the exchanges
clearinghouse, as counterparty to all exchange-traded futures, guarantees
against default.
Options Contracts
During the year ended Nov. 30, 2013, the Fund entered into
options contracts in the normal course of pursuing its investment objective. The
Fund may buy or write options contracts for any number of reasons: to manage the
Funds exposure to changes in securities prices and foreign currencies; to earn
income; as an efficient means of adjusting the Fund's overall exposure to
certain markets; to protect the value of portfolio securities; and as a cash
management tool. The Fund may buy or write call or put options on securities,
financial indices, and foreign currencies. When the Fund buys an option, a
premium is paid and an asset is recorded and adjusted on a daily basis to
reflect the current market value of the options purchased. When the Fund writes
an option, a premium is received and a liability is recorded and adjusted on a
daily basis to reflect the current market value of the options written. Premiums
received from writing options that expire unexercised are treated by the Fund on
the expiration date as realized gains. The difference between the premium
received and the amount paid on effecting a closing purchase transaction,
including brokerage commissions, is treated as realized gain or loss. If a call
option is exercised, the premium is added to the proceeds from the sale of the
underlying security in determining whether the Fund has a realized gain or loss.
If a put option is exercised, the premium reduces the cost basis of the
securities purchased by the Fund. The Fund, as writer of an option, bears the
market risk of an unfavorable change in the price of the security underlying the
written option. When writing options, the Fund is subject to minimal
counterparty risk because the counterparty is only obligated to pay premiums and
does not bear the market risk of an unfavorable market change.
Transactions in options written during the
year ended Nov. 30, 2013 for the Fund were as follows:
|
Number of
|
|
|
|
|
|
Contracts
|
|
Premiums
|
Options outstanding
at Nov. 30, 2012
|
|
450
|
|
|
$
|
146,999
|
|
Options written
|
|
4,776
|
|
|
|
645,175
|
|
Options
expired
|
|
(2,455
|
)
|
|
|
(346,375
|
)
|
Options terminated in closing purchase
transactions
|
|
(2,355
|
)
|
|
|
(399,339
|
)
|
Options outstanding
at Nov. 30, 2013
|
|
416
|
|
|
$
|
46,460
|
|
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 S&P or Baa3 by
Moody's or is determined to be of equivalent quality by the manager.
63
Notes to financial
statements
Delaware Dividend Income Fund
9. Derivatives
(continued)
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.
During the year ended Nov. 30, 2013, the
Fund entered into CDS contracts as a purchaser of protection. Periodic payments
on such contracts are accrued daily and recorded as unrealized losses on swap
contracts. Upon payment, 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 as unrealized appreciation or depreciation daily. 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. For the year ended
Nov. 30, 2013, the Fund did not enter into any CDS contracts as a seller of
protection. The Fund received $1,733,827 in cash collateral for certain open
derivatives.
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 Funds 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 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 Funds exposure to the
counterparty.
Swaps Generally. Because there are
generally no organized market for swap contracts, the value of open swaps may
differ from that which would be realized in the event the Fund terminated its
position in the agreement. Risks of entering into these contracts include the
potential inability of the counterparty to meet the terms of the contracts. This
type of risk is generally limited to the amount of favorable movement in the
value of the underlying security, instrument or basket of instruments, if any,
at the day of default. Risks also arise from potential losses from adverse
market movements and such losses could exceed the unrealized amounts shown on
the statement of net assets.
64
Fair values of derivative instruments as
of Nov. 30, 2013 were as follows:
|
|
Asset Derivatives
|
|
Liability Derivatives
|
|
|
Statement of Assets
|
|
Fair
|
|
Statement of Assets
|
|
Fair
|
|
|
and Liabilities Location
|
|
Value
|
|
and Liabilities Location
|
|
Value
|
Forward currency exchange
contracts
(Foreign currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
exchange contracts)
|
|
Unrealized gain on foreign currency exchange
contracts
|
|
|
$
|
|
|
|
Unrealized loss on foreign currency exchange
contracts
|
|
$
|
(6,785
|
)
|
Interest rate contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Futures contracts)
|
|
Variation margin receivable on futures contracts
|
|
|
|
|
|
|
Variation margin payable on futures contracts
|
|
|
(270,296
|
)*
|
Credit contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Swap contracts)
|
|
Unrealized gain of credit default swap
contracts
|
|
|
|
|
|
|
Unrealized loss of credit default swap
contracts
|
|
|
(286,249
|
)
|
Total
|
|
|
|
|
$
|
|
|
|
|
|
$
|
(563,330
|
)
|
*Includes cumulative appreciation or
depreciation of futures contracts from the date the contracts are opened through
Nov. 30, 2013. Only current day variation margin is reported on the Portfolios
statement of assets and liabilities.
The effect of derivative instruments on
the statement of operations for the year ended Nov. 30, 2013 was as
follows:
|
Net Realized Gain (Loss) on:
|
|
Foreign
|
|
Financial
|
|
|
|
|
|
|
|
|
Currency
|
|
Futures
|
|
Options
|
|
|
|
|
|
Transactions
|
|
Contracts
|
|
Written
|
|
Swaps
|
Foreign currency exchange
contracts
|
$
|
(227,122
|
)
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Interest rate contracts
|
|
|
|
|
|
(629,446
|
)
|
|
|
|
|
|
|
|
Equity contracts
|
|
|
|
|
|
|
|
|
|
346,375
|
|
|
|
|
Credit contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,961,102
|
)
|
Total
|
$
|
(227,122
|
)
|
|
$
|
(629,446
|
)
|
|
$
|
346,375
|
|
$
|
(2,961,102
|
)
|
|
|
Net Change in Unrealized Appreciation
(Depreciation) of:
|
|
Foreign
|
|
Financial
|
|
|
|
|
|
|
|
|
Currency
|
|
Futures
|
|
Options
|
|
|
|
|
|
Transactions
|
|
Contracts
|
|
Written
|
|
Swaps
|
Foreign currency exchange
contracts
|
$
|
(5,959
|
)
|
|
$
|
|
|
|
$
|
|
|
$
|
|
|
Interest rate contracts
|
|
|
|
|
|
(321,190
|
)
|
|
|
|
|
|
|
|
Equity contracts
|
|
|
|
|
|
|
|
|
|
98,213
|
|
|
|
|
Credit contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
(39,947
|
)
|
Total
|
$
|
(5,959
|
)
|
|
$
|
(321,190
|
)
|
|
$
|
98,213
|
|
$
|
(39,947
|
)
|
65
Notes to financial
statements
Delaware Dividend Income Fund
9. Derivatives
(continued)
Derivatives Generally. The table below
summarizes the average balance of derivative holdings by the Fund during the
year ended Nov. 30, 2013. The average balance of derivatives held is generally
similar to the volume of derivative activity for the year ended Nov. 30,
2013.
|
Long
|
|
Short
|
|
Derivative
|
|
Derivative
|
|
Volume
|
|
Volume
|
Foreign currency
exchange contracts (average cost)
|
USD
|
273,142
|
|
USD
|
420,184
|
Futures contracts (average notional
value)
|
|
426,359
|
|
|
5,807,220
|
Swap contracts
(average notional value)
|
|
20,266,932
|
|
|
|
Options contracts (average notional
value)
|
|
|
|
|
20,158
|
10. 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: (i) 102% with respect to U.S.
securities and foreign securities that are denominated and payable in U.S.
dollars; and (ii) 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 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 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,
66
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 Trusts 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 year ended Nov. 30, 2013, the Fund had no securities out on loan.
11. Credit and Market
Risk
The Fund invests a portion of its assets
in high yield fixed income securities, which are securities rated lower than
BBB- by Standard & Poors and Baa3 by Moodys Investors Service, or
similarly rated by another nationally recognized statistical rating
organization. Investments in these higher yielding securities are generally
accompanied by a greater degree of credit risk than higher rated securities.
Additionally, lower rated securities may be more susceptible to adverse economic
and competitive industry conditions than investment grade securities.
The Fund invests in fixed income
securities whose value is derived from an underlying pool of mortgages or
consumer loans. The value of these securities is sensitive to changes in
economic conditions, including delinquencies and/or defaults, and may be
adversely affected by shifts in the markets perception of the issuers and
changes in interest rates. Investors receive principal and interest payments as
the underlying mortgages and consumer loans are paid back. Prepayment of
mortgages may shorten the stated maturity of the obligations and can result in a
loss of premium, if any has been paid.
The Fund invests in REITs and is subject
to the risks associated with that industry. If the Fund holds real estate
directly as a result of defaults or receives rental income directly from real
estate holdings, its tax status as a regulated investment company may be
jeopardized. There were no direct real estate holdings during the year ended
Nov. 30, 2013. The Funds REIT holdings are also affected by interest rate
changes, particularly if the REITs it holds use floating rate debt to finance
their ongoing operations.
67
Notes to financial
statements
Delaware Dividend
Income Fund
11. Credit and Market Risk
(continued)
Fund invests in certain obligations that
may have liquidity protection 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 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 of
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 Funds Board
has delegated to DMC the day-to-day functions of determining whether individual
securities are liquid for purposes of the Funds 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 Funds 15% limit on
investments in illiquid securities. Rule 144A and illiquid securities held by
the Fund have been identified in the schedule of investments.
12. Contractual Obligations
The Fund enters into contracts in the
normal course of business that contain a variety of indemnifications. The Funds
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 Funds existing contracts and expects the risk of loss to be
remote.
13. Subsequent Events
Management has determined that no material
events or transactions occurred subsequent to Nov. 30, 2013 that would require
recognition or disclosure in the Funds financial statements.
68
Report of independent
registered public
accounting firm
To the Board of Trustees of Delaware
Group
®
Equity
Funds V
and Shareholders of Delaware Dividend Income Fund:
In our opinion, the accompanying statement
of assets and liabilities, including the schedule of investments, and the
related statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Delaware Dividend Income Fund (one of the series constituting Delaware Group
Equity Funds V, hereafter referred to as the Fund) at November 30, 2013, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended and the financial highlights
for each of the four years in the period then ended, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
financial statements) are the responsibility of the Funds management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at November 30, by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion. The financial highlights for the year ended November 30, 2009 were
audited by other independent accountants whose report dated January 21, 2010
expressed an unqualified opinion on those statements.
PricewaterhouseCoopers
LLP
Philadelphia, Pennsylvania
January 17, 2014
69
Other Fund information
(Unaudited)
Delaware
Dividend Income Fund
Tax Information
The information set forth below is for the
Funds fiscal year as required by federal income tax laws. Shareholders,
however, must report distributions on a calendar year basis for income tax
purposes, which may include distributions for portions of two fiscal years of
the Fund. Accordingly, the information needed by shareholders for income tax
purposes will be sent to them in January of each year. Please consult your tax
advisor for proper treatment of this information.
All disclosures are based on financial
information available as of the date of this annual report and, accordingly are
subject to change. For any and all items requiring reporting, it is the
intention of the Fund to report the maximum amount permitted under the Internal
Revenue Code and the regulations thereunder.
For the fiscal year ended Nov. 30, 2013,
the Fund reports distributions paid during the year as follows:
(A)
|
Ordinary Income
Distributions (Tax Basis)*
|
100.00%
|
(B)
|
Qualified
Dividends
1
|
63.84%
|
(A) is based on a percentage
of the Funds total distributions.
(B) is based on the Funds
ordinary income distributions.
1
|
Qualified dividends
represent dividends which qualify for the corporate dividends received
deduction.
|
*
|
For the fiscal year
ended Nov. 30, 2013, certain dividends paid by the Fund may be subject to
a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax
Relief Reconciliation Act of 2003, and by the Tax Relief Unemployment
Insurance Reauthorization and Job Creations Act of 2010 and made permanent
by the American Taxpayer Relief Act of 2012. The Fund intends to report
69.82% to be taxed at a maximum rate of 15%. Complete information will be
computed and reported in conjunction with your 2013 Form 1099-DIV, as
applicable.
|
For the fiscal year ended Nov. 30, 2013,
certain interest income paid by the Fund, determined to be Qualified Interest
Income may be subject to relief from U.S. withholding for foreign shareholders,
as provided by the American Jobs Creation Act of 2004, and by Tax Relief
Unemployment Insurance Reauthorization and Job Creations Act of 2010 and as
extended by the American Taxpayer Relief Act of 2012. For the fiscal year ended
Nov. 30, 2013, the Fund has reported maximum distributions of Qualified Interest
Income of $5,530,962.
Board consideration of Delaware
Dividend Income Fund investment advisory agreement
At a meeting held on Aug. 20-22, 2013 (the
Annual Meeting), the Board of Trustees (the Board), including a majority of
disinterested or independent Trustees, approved the renewal of the Investment
Advisory Agreement for Delaware Dividend Income Fund (the Fund). In making its
decision, the Board considered information furnished at regular quarterly Board
meetings, including reports detailing Fund performance, investment strategies
and expenses, as well as information prepared specifically in connection with
the renewal of the investment advisory and sub-advisory contracts. Information
furnished specifically in connection with the renewal of the Investment Advisory
Agreement with Delaware Management Company (DMC) included materials provided
by DMC and its affiliates (Delaware Investments) concerning, among other
70
things, the nature, extent and quality of
services provided to the Fund, the costs of such services to the Fund, economies
of scale and the financial condition and profitability of Delaware Investments.
In addition, in connection with the Annual Meeting, reports were provided to the
Trustees in May 2013 and included reports provided by Lipper, Inc., an
independent statistical compilation organization (Lipper). The Lipper reports
compared the Funds investment performance and expenses with those of other
comparable mutual funds. The Independent Trustees reviewed and discussed the
Lipper reports with independent legal counsel to the Independent Trustees. The
Board requested and received information regarding DMCs policy with respect to
advisory fee levels and its breakpoint philosophy; the structure of portfolio
manager compensation; the investment managers profitability; comparative client
fee information; and any constraints or limitations on the availability of
securities for certain investment styles, which had in the past year inhibited,
or which were likely in the future to inhibit, DMCs ability to invest fully in
accordance with Fund policies.
In considering information relating to the
approval of the Funds advisory agreement, the Independent Trustees received
assistance and advice from and met separately with independent legal counsel to
the Independent Trustees. Although the Board gave attention to all information
furnished, the following discussion identifies, under separate headings, the
primary factors taken into account by the Board during its contract renewal
considerations.
Nature, Extent and Quality of
Service.
The Board considered the services
provided by
Delaware Investments to the Fund and
its shareholders. In reviewing the nature, extent and quality of services, the
Board considered reports furnished to it throughout the year, which
covered matters such as the relative performance of the Fund, compliance of
portfolio managers with the investment policies, strategies and restrictions for
the Fund, compliance by DMC and Delaware Distributors, L.P. (together,
Management) personnel with the Code of Ethics adopted throughout the Delaware
Investments
®
Family of Funds complex and adherence to fair value pricing procedures as
established by the Board. The Board was pleased with the current staffing of the
Funds investment advisor and the emphasis placed on research in the investment
process. The Board recognized DMCs recent receipt of several industry
distinctions. The Board gave favorable consideration to DMCs efforts to control
expenditures while maintaining service levels committed to fund matters. The
Board noted that in July 2011 Management implemented measures to reduce overall
costs and improve transfer agent and shareholder servicing functions through
outsourcing. The Board noted the benefits provided to Fund shareholders through
each shareholders ability to exchange an investment in one Delaware Investments
fund for the same class of shares in another Delaware Investments fund without a
sales charge, to reinvest Fund dividends into additional shares of the Fund or
into additional shares of other Delaware Investments funds and the privilege to
combine holdings in other Delaware Investments funds to obtain a reduced sales
charge. The Board was satisfied with the nature, extent and quality of the
overall services provided by Delaware Investments.
71
Other Fund
information
(Unaudited)
Delaware
Dividend Income Fund
Board consideration of Delaware
Dividend Income Fund investment advisory agreement (continued)
Investment Performance.
The Board placed significant emphasis on the investment
performance of the Fund in view of the importance of investment performance to
shareholders. Although the Board gave appropriate consideration to performance
reports and discussions with portfolio managers at Investment Committee meetings
throughout the year, the Board gave particular weight to the Lipper reports
furnished for the Annual Meeting. The Lipper reports prepared for the Fund
showed the investment performance of its Class A shares in comparison to a group
of similar funds as selected by Lipper (the Performance Universe). A fund with
the best performance ranked first, and a fund with the poorest performance
ranked last. The highest/best performing 25% of funds in the Performance
Universe make up the first quartile; the next 25%, the second quartile; the next
25%, the third quartile; and the poorest/worst performing 25% of funds in the
Performance Universe make up the fourth quartile. Comparative annualized
performance for the Fund was shown for the past one-, three-, five- and ten-year
periods ended March 31, 2013. The Boards objective is that the Funds
performance for the periods considered be at or above the median of its
Performance Universe. The following paragraph summarizes the performance results
for the Fund and the Boards view of such performance.
The Performance Universe for the Fund
consisted of the Fund and all retail and institutional mixed-asset target
allocation moderate funds as selected by Lipper. The Lipper report comparison
showed that the Funds total return for the one-, three-, five- and ten-year
periods was in the first quartile of its Performance Universe. The Board was
satisfied with performance.
Comparative Expenses.
The Board considered expense comparison data for the Delaware
Investments
®
Family of Funds. Management provided the Board with information on pricing
levels and fee structures for the Fund as of its most recently completed fiscal
year. The Board also focused on the comparative analysis of effective management
fees and total expense ratios of the Fund versus effective management fees and
expense ratios of a group of similar funds as selected by Lipper (the Expense
Group). In reviewing comparative costs, the Funds contractual management fee
and the actual management fee incurred by the Fund were compared with the
contractual management fees (assuming all funds in the Expense Group were
similar in size to the Fund) and actual management fees (as reported by each
fund) within the Expense Group, taking into account any applicable breakpoints
and fee waivers. The Funds total expenses were also compared with those of its
Expense Group. The Lipper total expenses, for comparative consistency, were
shown by Lipper for Class A shares and comparative total expenses including
12b-1 and non 12b-1 service fees. The Board considered fees paid to Delaware
Investments for non-management services. The Boards objective is to limit the
Funds total expense ratio to be competitive with that of the Expense Group. The
following paragraph summarizes the expense results for the Fund and the Boards
view of such expenses.
72
The expense comparisons for the Fund
showed that its actual management fee was in the quartile with the second
highest expenses of its Expense Group and its total expenses were in the
quartile with the second lowest expenses of its Expense Group. The Board was
satisfied with the total expenses of the Fund in comparison to those of its
Expense Group as shown in the Lipper report.
Management Profitability.
The Board considered the level of
profits realized by Delaware Investments in connection with the operation of the Fund. In this respect, the Board reviewed
the Investment Management Profitability Analysis that addressed the overall profitability of Delaware Investments
business in providing management and other services to each of the individual funds and the Delaware
Investments
®
Family of Funds as a whole. Specific attention was given to the methodology followed in
allocating costs for the purpose of determining profitability. Management stated that the level of profits of Delaware
Investments, to a certain extent, reflects recent operational cost savings and efficiencies initiated by Delaware
Investments. The Board considered Delaware Investments efforts to improve services provided to fund shareholders and to
meet additional regulatory and compliance requirements resulting from recent industry-wide Securities and Exchange Commission
initiatives. The Board also considered the extent to which Delaware Investments might derive ancillary benefits from fund
operations, including the potential for procuring additional business as a result of the prestige and visibility associated
with its role as service provider to the Delaware Investments Family of Funds and the benefits from allocation of fund
brokerage to improve trading efficiencies. The Board found that the management fees were reasonable in light of the services
rendered and the level of profitability of Delaware Investments.
Economies of Scale.
The Trustees considered whether economies of scale are
realized by Delaware Investments as the Funds assets increase and the extent to
which any economies of scale are reflected in the level of management fees
charged. The Trustees reviewed the standardized advisory fee pricing and
structure, approved by the Board and shareholders, which includes breakpoints.
Breakpoints in the advisory fee occur when the advisory fee rate is reduced on
assets in excess of specified levels. Breakpoints result in a lower advisory fee
than would otherwise be the case on all assets when the asset levels specified
are exceeded. The Board noted that the fee under the Funds management contract
fell within the standard structure. Although the Fund has not reached a size at
which it can take advantage of breakpoints, the Board recognized that the fee
was structured so that when the Fund grows, economies of scale may be
shared.
73
Board of trustees/directors and officers
addendum
Delaware Investments
®
Family of Funds
A mutual fund is governed by a Board of
Trustees/Directors (Trustees), which has oversight responsibility for the
management of a funds business affairs. Trustees establish procedures and
oversee and review the performance of the investment manager, the distributor,
and others who perform services for the fund. The independent fund trustees, in
particular, are advocates
Name, Address,
|
Position(s)
|
Length of
|
and Birth Date
|
Held with Fund(s)
|
Time Served
|
Interested Trustees
|
|
|
Patrick P.
Coyne
1
|
Chairman, President,
|
Chairman and
Trustee
|
2005 Market Street
|
Chief Executive
Officer,
|
since August 16,
2006
|
Philadelphia, PA 19103
|
and Trustee
|
|
April 1963
|
|
President and
|
|
|
Chief Executive
Officer
|
|
|
since August 1,
2006
|
|
Independent Trustees
|
|
|
Thomas L. Bennett
|
Trustee
|
Since March 2005
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
October 1947
|
|
|
Joseph W. Chow
|
Trustee
|
Since January 2013
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
January 1953
|
|
|
|
John A. Fry
|
Trustee
|
Since January 2001
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
May 1960
|
|
|
|
|
|
Anthony D. Knerr
|
Trustee
|
Since April 1990
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
December 1938
|
|
|
1
Patrick P. Coyne is considered to
be an Interested Trustee because he is an executive officer of the
Funds(s) investment advisor.
74
for shareholder interests. Each trustee
has served in that capacity since he or she was elected to or appointed to the
Board of Trustees, and will continue to serve until his or her retirement or the
election of a new trustee in his or her place. The following is a list of the
Trustees and Officers with certain background and related
information.
|
Number of Portfolios in
|
|
Principal Occupation(s)
|
Fund Complex Overseen
|
Other Directorships
|
During Past 5 Years
|
by Trustee or Officer
|
Held by Trustee or Officer
|
|
Patrick P. Coyne has served
in
|
70
|
Director and Audit
|
various executive capacities
|
|
Committee Member
|
at different times at
|
|
Kaydon Corp.
|
Delaware
Investments.
2
|
|
|
|
|
Board of Governors Member
|
|
|
Investment Company
|
|
|
Institute (ICI)
|
|
Private Investor
|
70
|
Director
|
(March 2004Present)
|
|
Bryn Mawr Bank Corp.
(BMTC)
|
|
|
(20072011)
|
|
Executive Vice President
|
70
|
Director and Audit
Committee
|
(Emerging Economies
Strategies,
|
|
Member Hercules
|
Risk and Corporate
Administration)
|
|
Technology Growth
|
State Street Corporation
|
|
Capital, Inc.
|
(July 2004March 2011)
|
|
|
President
|
70
|
Director Hershey Trust
|
Drexel University
|
|
|
(August 2010Present)
|
|
Director and Audit
|
|
|
Committee Member
|
President
|
|
Community Health Systems
|
Franklin & Marshall
College
|
|
|
(July 2002July 2010)
|
|
|
Managing Director
|
70
|
None
|
AKA Strategy
|
|
|
(Strategic Consulting)
|
|
|
(1990Present)
|
|
|
2
Delaware Investments is the
marketing name for Delaware Management Holdings, Inc. and its
subsidiaries, including the Funds(s) investment advisor, principal
underwriter, and its transfer agent.
75
Board of trustees/directors
and officers addendum
Delaware
Investments
®
Family of Funds
Name, Address,
|
Position(s)
|
Length of
|
and Birth Date
|
Held with Fund(s)
|
Time Served
|
Independent Trustees
(continued)
|
|
|
Lucinda S. Landreth
|
Trustee
|
Since March 2005
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
June 1947
|
|
|
Frances A. Sevilla-Sacasa
|
Trustee
|
Since September 2011
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
January 1956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas K. Whitford
|
Trustee
|
Since January 2013
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
March 1956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
76
|
Number of Portfolios
in
|
|
Principal
Occupation(s)
|
Fund Complex Overseen
|
Other Directorships
|
During Past 5 Years
|
by Trustee or Officer
|
Held by Trustee or
Officer
|
|
Private Investor
|
70
|
None
|
(2004Present)
|
|
|
|
|
Chief Executive Officer
|
70
|
Trust Manager and
|
Banco Itaú Europa
|
|
Audit Committee
|
International
|
|
Member Camden
|
(April 2012Present)
|
|
Property Trust
|
|
Executive Advisor to
Dean
|
|
|
(August 2011March
2012)
|
|
|
and Interim Dean
|
|
|
(January 2011July 2011)
|
|
|
University of Miami School
of
|
|
|
Business
Administration
|
|
|
|
President U.S.
Trust,
|
|
|
Bank of America
Private
|
|
|
Wealth Management
|
|
|
(Private Banking)
|
|
|
(July 2007December 2008)
|
|
|
Vice Chairman
|
70
|
None
|
(2010April 2013)
|
|
|
Chief Administrative
|
|
|
Officer (20082010)
|
|
|
and Executive Vice
|
|
|
President and Chief
|
|
|
Administrative Officer
|
|
|
(20072009)
|
|
|
PNC Financial
|
|
|
Services Group
|
|
|
77
Board of trustees/directors
and officers addendum
Delaware
Investments
®
Family of Funds
Name, Address,
|
Position(s)
|
Length of
|
and Birth Date
|
Held with Fund(s)
|
Time Served
|
Independent Trustees
(continued)
|
|
|
Janet L. Yeomans
|
Trustee
|
Since April 1999
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
July 1948
|
|
|
|
|
|
|
|
|
|
J. Richard Zecher
|
Trustee
|
Since March 2005
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
July 1940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
78
|
Number of Portfolios
in
|
|
Principal
Occupation(s)
|
Fund Complex Overseen
|
Other Directorships
|
During Past 5 Years
|
by Trustee or Officer
|
Held by Trustee or
Officer
|
|
Vice President and
Treasurer
|
70
|
Director, Audit
|
(January 2006July
2012)
|
|
Committee Member
and
|
Vice President Mergers &
Acquisitions
|
|
Investment
Committee
|
(January 2003January 2006),
and
|
|
Member
|
Vice President and
Treasurer
|
|
Okabena Company
|
(July 1995January
2003)
|
|
|
3M Corporation
|
|
Chair 3M
|
|
|
Investment
Management
|
|
|
Company
|
|
|
(20052012)
|
Founder
|
70
|
Director and
Compensation
|
Investor Analytics
|
|
Committee Member
|
(Risk Management)
|
|
Investor Analytics
|
(May 1999Present)
|
|
|
|
|
Director P/E
Investments
|
Founder
|
|
|
P/E Investments
|
|
|
(Hedge Fund)
|
|
|
(September 1996Present)
|
|
|
79
Board of trustees/directors
and officers addendum
Delaware
Investments
®
Family of Funds
Name, Address,
|
Position(s)
|
Length of
|
and Birth Date
|
Held with Fund(s)
|
Time Served
|
Officers
|
|
|
David F. Connor
|
Senior Vice President,
|
Senior Vice
President,
|
2005 Market Street
|
Deputy General
|
Deputy General
Counsel
|
Philadelphia, PA 19103
|
Counsel, and Secretary
|
since May 2013;
|
December 1963
|
|
Vice President,
Deputy
|
|
|
General Counsel
|
|
|
September 2000
|
|
|
May 2013; Secretary
since
|
|
|
October 2005
|
Daniel V. Geatens
|
Vice President
|
Treasurer
|
2005 Market Street
|
and Treasurer
|
since October 2007
|
Philadelphia, PA 19103
|
|
|
October 1972
|
|
|
David P. OConnor
|
Executive Vice
President,
|
Executive Vice
President
|
2005 Market Street
|
General Counsel
|
since February
2012;
|
Philadelphia, PA 19103
|
and Chief Legal
Officer
|
Senior Vice
President
|
February 1966
|
|
October 2005
|
|
|
February 2012;
|
|
|
General Counsel and
|
|
|
Chief Legal Officer
|
|
|
since October 2005
|
Richard Salus
|
Senior Vice President
|
Chief Financial
Officer
|
2005 Market Street
|
and Chief Financial
Officer
|
since November 2006
|
Philadelphia, PA 19103
|
|
|
October 1963
|
|
|
The Statement of Additional Information
for the Fund(s) includes additional information about the Trustees and Officers
and is available, without charge, upon request by calling 800
523-1918.
80
|
Number of Portfolios in
|
|
Principal Occupation(s)
|
Fund Complex Overseen
|
Other Directorships
|
During Past 5 Years
|
by Trustee or Officer
|
Held by Trustee or Officer
|
|
David F. Connor has served as
|
70
|
None
3
|
Deputy General Counsel of
|
|
|
Delaware Investments
|
|
|
since 2000.
|
|
|
|
|
|
|
|
Daniel V. Geatens has served
|
70
|
None
3
|
in various capacities at
|
|
|
different times at
|
|
|
Delaware Investments.
|
|
|
David P. OConnor has served in
|
70
|
None
3
|
various executive and legal
|
|
|
capacities at different times
|
|
|
at Delaware Investments.
|
|
|
|
|
|
|
Richard Salus has served in
|
70
|
None
3
|
various executive capacities
|
|
|
at different times at
|
|
|
Delaware Investments.
|
|
|
3
David F. Connor, Daniel V.
Geatens, David P. OConnor, and Richard Salus serve in similar capacities
for the six portfolios of the Optimum Fund Trust, which have the same
investment advisor, principal underwriter, and transfer agent as the
registrant.
81
About the organization
Board of trustees
|
|
|
|
Patrick P.
Coyne
Chairman, President,
and
Chief Executive Officer
Delaware
Investments
®
Family of Funds
Philadelphia, PA
Thomas L.
Bennett
Private
Investor
Rosemont, PA
|
Joseph W.
Chow
Former Executive
Vice
President
State Street Corporation
Brookline, MA
John A. Fry
President
Drexel University
Philadelphia, PA
Anthony D.
Knerr
Founder and
Managing
Director
AKA Strategy
New York,
NY
|
Lucinda S.
Landreth
Former Chief
Investment
Officer
Assurant, Inc.
Philadelphia, PA
Frances
A.
Sevilla-Sacasa
Chief Executive
Officer
Banco Itaú Europa
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
|
|
|
|
David F.
Connor
Senior Vice
President,
Deputy 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
|
David P.
OConnor
Executive Vice
President,
General Counsel,
and Chief Legal Officer
Delaware
Investments
Family of Funds
Philadelphia, PA
|
Richard
Salus
Senior Vice President
and
Chief Financial Officer
Delaware Investments
Family of
Funds
Philadelphia, PA
|
|
|
|
|
This annual report is for the
information of Delaware Dividend 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
Funds 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 SECs 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 Funds Schedule of Investments are available without charge on the
Funds website at delawareinvestments.com. The Funds Forms N-Q may be
reviewed and copied at the SECs 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 Funds website at delawareinvestments.com; and (ii)
on the SECs website at sec.gov.
|
82
Annual report
U.S. core equity
mutual fund
Delaware Small
Cap Core Fund
November
30, 2013
|
Carefully consider
the Funds investment objectives, risk factors, charges, and expenses
before investing. This and other information can be found in the Funds
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.
|
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 Small Cap Core 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 Small Cap Core
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
|
|
Portfolio management review
|
1
|
Performance summary
|
4
|
Disclosure of Fund expenses
|
8
|
Security type/sector allocation
and
|
|
top 10 equity holdings
|
10
|
Schedule of investments
|
12
|
Statement of assets and
liabilities
|
18
|
Statement of operations
|
20
|
Statements of changes in net
assets
|
22
|
Financial highlights
|
24
|
Notes to financial statements
|
32
|
Report of independent
registered
|
|
public accounting firm
|
43
|
Other Fund information
|
44
|
Board of trustees/directors
and
|
|
officers addendum
|
48
|
About the organization
|
56
|
Unless otherwise noted, views expressed
herein are current as of Nov. 30, 2013, and subject to change.
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 Funds distributor,
Delaware Distributors, L.P.
Macquarie
Group refers to Macquarie Group Limited and its subsidiaries and affiliates
worldwide.
© 2013 Delaware Management Holdings, Inc.
All third-party marks cited are the
property of their respective owners.
Portfolio management
review
|
Delaware Small Cap Core Fund
|
|
December 10,
2013
|
Performance preview (for
the year ended November 30, 2013)
|
Delaware Small Cap Core Fund (Class A
shares)
|
1-year return
|
|
+44.21%
|
Russell 2000
®
Index (benchmark)
|
1-year return
|
|
+40.99%
|
Past performance does not
guarantee future results.
For
complete, annualized performance for Delaware Small Cap Core Fund, please
see the table on page 4.
The performance
of Class A shares excludes the applicable sales charge and reflects the
reinvestment of all distributions. Index performance returns do not
reflect any management fees, transaction costs, or expenses. Indices are
unmanaged and one cannot invest directly in an
index.
|
During the fiscal year ended Nov. 30,
2013, small-cap stocks had an impressive run, rising 41%. Steadily improving
economic data combined with supportive monetary policy from the Federal Reserve
were the main drivers behind the strong market performance.
The U.S. economy grew at a modest pace
during the fiscal year, with gross domestic product (GDP) growth in the 2-3%
range. A strong improvement in the U.S. housing market, steady declines in the
unemployment rate, and persistently low levels of inflation provided positive
tailwinds to the economy. While earnings growth moderated somewhat during the
year, corporate profitability still stood near record levels.
From October 1 through 16, the U.S.
federal government entered a shutdown after Congress failed to enact legislation
appropriating funds for fiscal 2014. Regular government operations resumed on
October 17, after an interim appropriations bill was signed into law. However,
the shutdown did not hamper the positive momentum in the market.
The continuation of accommodative monetary
policy from the Fed also had a positive influence on equity markets during the
year. In an effort to support economic growth, the
Fed maintained its key interest rate target at 0.25%, and maintained its
monthly asset purchase program (quantitative easing). We expect interest rates
to remain at this low level until the Fed sees evidence of a greater improvement
in economic growth and a further reduction in the unemployment rate.
From a sector perspective, the strongest
performing sectors in the Russell 2000 Index were media, consumer services, and
business services. The sharp rise in the 10-year Treasury yield led to
underperformance from interest rate sensitive sectors such as real estate
investment trusts (REITs) and utilities. Small-cap stocks outperformed
large-caps during the period, with the Russell 2000 Index rising 41% versus the
31% gain for the Russell 1000
®
Index. (Source: Bloomberg.)
Within the Fund
For the fiscal year ended Nov. 30, 2013,
Delaware Small Cap Core Fund (Class A shares with all distributions reinvested)
returned +44.21% at net asset value and +35.90% at maximum offer price. In
comparison, the Funds benchmark, the Russell 2000 Index, returned +40.99%
during the same period. For complete, annualized performance of Delaware Small
Cap Core Fund, please see the table on page 4.
1
Portfolio management
review
Delaware Small Cap Core
Fund
Portfolio performance was strong over the
fiscal year. Stock selection in the basic materials, energy, and finance sectors
were the top contributors to outperformance. On the negative side, stock
selection in the media and technology were the only two detractors from relative
performance.
One of the Funds top detractors was its
holding in
Vocus
, a provider of cloud marketing software that helps businesses attract,
engage, and retain customers. The stock first sold off in April when the company
announced weaker than expected results. The company made an acquisition in 2012
that was expected to be a catalyst for growth. The companys turnaround targets
fell short of expectations and as a result we sold the stock in the third
quarter of the year.
Perry Ellis International
is an apparel manufacturing company, that designs,
sources, markets and licenses brands such as Perry Ellis, Original Penguin,
Callaway Golf, and Ben Hogan. Over the period the stock fell; most of this
decline came sharply in November when the company preannounced
lower-than-expected third quarter results. The miss in earnings was primarily a
result of a shortfall in mid-tier department store business. Going forward, we
believe a number of the companys brands may have strong potential, particularly
the golf business, which recently signed a license agreement with the brand Jack
Nicklaus.
Spectrum
Pharmaceuticals
, a commercial-stage
biotechnology company with a diversified portfolio of oncology products,
declined during the Funds fiscal year. Shares fell in March when the company
reduced its
2013 guidance because of lower
Fusilev sales due to increased generic competition. Fusilev is its product for
colorectal cancer. There had been much debate about how far and how quickly the
generics could retake share in this market but company management had been very
confident that they would not lose significant share. Clearly management is in
the penalty box with investors after this incident, but we have continued to
hold the position in the Fund because the company is a profitable biotech that,
in our view, has generated strong free cash flow and has several promising new
drug candidates in its pipeline that potentially may act as upside
catalysts.
On the positive side of the healthcare
sector of the portfolio, biopharmaceutical company
Incyte
was the periods top-performing
holding. Incyte is a commercial-stage biotechnology company focused on the
development of therapies for oncology and inflammation conditions. Ruxolitinib (
also known as Jakafi), its first commercial product, is approved for the
treatment of myelofibrosis (a disease of the spleen) and sold outside of the
United States with Swiss pharmaceutical company Novartis. The stock has been
strong as ruxolitinib sales have proven to be stronger than the market first
expected, and the company announced positive Phase II trial data for Jakafi in
pancreatic cancer in August.
The Funds position in
U.S. Silica Holdings
, a
leading producer of industrial sand (silica), advanced during the Funds fiscal
year. U.S. Silica continued to benefit from surging demand and higher pricing of
frac sand, which is utilized by oil and gas producers to increase well
efficiency.
2
Technology was one of the top overall
sectors contributing to the periods returns. The top-performing stock in that
sector was security software provider
Proofpoint
. The stock performed well
on the back of strong revenue growth after a launch of new products and improved
competitive positioning.
The Fund ended the period with small
overweight positions in the technology, communications services, and basic
materials sectors. The Fund held underweight positions in the utilities, credit
cyclicals, and media sectors.
We continue to maintain our strategy of
investing in companies with what we view as strong balance sheets and cash flow,
sustainable competitive advantages, and high-quality management teams that we
believe have the potential to deliver value to shareholders even under
challenging economic conditions.
3
Performance summary
|
|
Delaware Small Cap Core Fund
|
November 30,
2013
|
The performance data quoted represent
past performance; past performance does not guarantee future results. Investment
return and principal value will fluctuate so your shares, when redeemed, may be
worth more or less than their original cost. Please obtain the performance data
current for the most recent month end by calling 800 523-1918 or visiting our
website at delawareinvestments.com/performance. Current performance may be lower
or higher than the performance data quoted.
Fund and benchmark
performance
1,2
|
|
Average
annual total returns through November 30, 2013
|
|
|
1 year
|
|
5 years
|
|
10 years
|
|
Lifetime
|
Class A (Est. Dec.
29, 1998)
|
|
|
|
|
|
|
|
|
Excluding sales charge
|
|
+44.21%
|
|
+23.00%
|
|
+9.58%
|
|
n/a
|
Including sales charge
|
|
+35.90%
|
|
+21.54%
|
|
+8.93%
|
|
n/a
|
Class C (Est. Aug. 1, 2005)
|
|
|
|
|
|
|
|
|
Excluding sales
charge
|
|
+43.14%
|
|
+22.09%
|
|
n/a
|
|
+6.96%
|
Including sales charge
|
|
+42.14%
|
|
+22.09%
|
|
n/a
|
|
+6.96%
|
Class R (Est. Aug. 1,
2005)
|
|
|
|
|
|
|
|
|
Excluding sales charge
|
|
+43.86%
|
|
+22.71%
|
|
n/a
|
|
+7.49%
|
Including sales charge
|
|
+43.86%
|
|
+22.71%
|
|
n/a
|
|
+7.49%
|
Institutional Class
(Est. Dec. 29, 1998)
|
|
|
|
|
|
|
Excluding sales
charge
|
|
+44.64%
|
|
+23.31%
|
|
+9.81%
|
|
n/a
|
Including sales charge
|
|
+44.64%
|
|
+23.31%
|
|
+9.81%
|
|
n/a
|
Russell 2000 Index
|
|
+40.99%
|
|
+20.97%
|
|
+9.08%
|
|
n/a
|
1
Returns reflect the
reinvestment of all distributions and are presented both with and without the
applicable sales charges described below. Returns do not reflect the deduction
of taxes the shareholder would pay on Fund distributions or redemptions of Fund
shares.
Expense limitations were in effect for
certain classes during some or all of the periods shown in the Fund
performance chart. Expenses for each class are listed on the Fund expense
ratios table on page 5. Performance would have been lower had expense
limitations not been in effect.
Class A shares are sold with a maximum
front-end sales charge of 5.75%, and have an annual distribution and service fee
of 0.25% of average daily net assets. Prior to Oct. 1, 2013, Class A shares had an annual distribution
and service fee of 0.30% of average daily net assets. This fee was contractually
limited to 0.25% during the period from Dec. 1, 2012 until Oct. 1, 2013.
Performance for Class A shares, excluding sales charges, assumes that no
front-end sales charge applied.
Class C shares are sold with a contingent
deferred sales charge of 1.00% if redeemed during the first 12 months. They are
also subject to an annual distribution and service fee of 1.00% of average daily
net assets.
Performance for Class C shares, excluding
sales charges, assumes either that contingent deferred sales charges did not
apply or that the investment was not redeemed.
4
Class R shares are available only for
certain retirement plan products. They are sold without a sales charge and have
an annual distribution and service fee of 0.50% of average daily net assets.
Prior to Oct. 1, 2013, Class R shares had an annual distribution and service fee
of 0.60% of average daily net assets. This fee was contractually limited to
0.50% during the period from Nov. 1, 2012 until Oct. 1, 2013.
Institutional Class shares are available
without sales or asset-based distribution charges only to certain eligible
institutional accounts.
The Fund performance table and the
Performance of a $10,000 investment graph do not reflect the deduction of
taxes the shareholder would pay on Fund distributions or redemptions of Fund
shares.
Investments in small and/or medium-sized
companies typically exhibit greater risk and higher volatility than larger, more
established companies.
Narrowly focused investments may exhibit
higher volatility than investments in multiple industry sectors.
Prior to Aug. 1, 2005, the Fund had not
engaged in a broad distribution effort of its shares and had been subject to
limited redemption requests. 12b-1 fees were waived for this period. Had 12b-1
fees been applied, performance would have been lower. Expense waivers were in
effect for the periods shown. Performance would have been lower if waivers did
not apply.
2
The Funds expense ratios, as
described in the most recent prospectus, are disclosed in the following Fund
expense ratios table. Delaware Management Company has agreed to reimburse
certain expenses and/or waive certain fees in order to prevent total fund
operating expenses (excluding any 12b-1 plan, taxes, interest, inverse floater
program expenses, 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 relating to
reorganizations, litigation, conducting shareholder meetings, and liquidations
(collectively nonroutine expenses)) from exceeding 1.15% of the Funds average
daily net assets during the period from Dec. 1, 2012, through Nov. 30, 2013.*
Please see the most recent prospectus and any applicable supplement(s) for
additional information on these fee waivers and/or reimbursements.
Fund expense ratios
|
|
Class A
|
|
Class C
|
|
Class R
|
|
Institutional Class
|
Total annual
operating expenses
|
|
1.36%
|
|
2.11%
|
|
1.61%
|
|
1.11%
|
(without fee
waivers)
|
|
|
|
|
|
|
|
|
Net expenses
|
|
1.36%
|
|
2.11%
|
|
1.61%
|
|
1.11%
|
(including fee waivers, if
any)
|
|
|
|
|
|
|
|
|
Type of waiver
|
|
Contractual
|
|
Contractual
|
|
Contractual
|
|
Contractual
|
* The contractual waiver period is from
March 29, 2012 through March 28, 2014.
5
Performance
summary
Delaware
Small Cap Core Fund
Performance of a $10,000
investment
1
Average annual
total returns from Nov. 30, 2003, through Nov. 30, 2013
For period beginning Nov. 30, 2003, through Nov. 30,
2013
|
Starting
value
|
|
Ending
value
|
|
|
Russell 2000
Index
|
|
$
|
10,000
|
|
|
$23,845
|
|
|
Delaware Small Cap Core Fund Class A
shares
|
|
$
|
9,425
|
|
|
$23,525
|
1
The Performance of a $10,000
investment graph assumes $10,000 invested in Class A shares of the Fund on Nov.
30, 2003, and includes the effect of a 5.75% front-end sales charge and the
reinvestment of all distributions. The graph does not reflect the deduction of
taxes the shareholders would pay on Fund distributions or redemptions of Fund
shares. Expense limitations were in effect for some or all of the periods shown.
Performance would have been lower had expense limitations not been in effect.
Expenses are listed in the Fund expense ratios table on page 5. Please note
additional details on pages 4 through 6.
The chart also assumes $10,000 invested in
the Russell 2000 Index as of Nov. 30, 2003. The Russell 2000 Index measures the
performance of the small-cap segment of the U.S. equity universe.
The Russell 1000 Index, mentioned on page
1, measures the performance of the large-cap segment of the U.S. equity
universe.
Index performance returns do not reflect
any management fees, transaction costs, or expenses. Indices are unmanaged and
one cannot invest directly in an index. Past performance is not a guarantee of
future results.
Performance of other Fund classes will
vary due to different charges and expenses.
|
|
Nasdaq
symbols
|
|
CUSIPs
|
|
Class A
|
|
|
DCCAX
|
|
24610B883
|
|
Class C
|
|
|
DCCCX
|
|
24610B867
|
|
Class R
|
|
|
DCCRX
|
|
24610B834
|
|
Institutional Class
|
|
|
DCCIX
|
|
24610B859
|
|
6
Disclosure of Fund
expenses
For the six-month period from June 1,
2013 to November 30, 2013 (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 June 1, 2013 to Nov. 30, 2013.
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 Funds actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Funds
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 Funds expenses shown in the table reflect fee
waivers in effect. The expenses shown in the table assume reinvestment of all
dividends and distributions.
8
Delaware Small Cap Core
Fund
Expense analysis of an investment
of $1,000
|
|
Beginning
|
|
Ending
|
|
|
|
Expenses
|
|
|
Account Value
|
|
Account Value
|
|
Annualized
|
|
Paid During Period
|
|
|
6/1/13
|
|
11/30/13
|
|
Expense Ratio
|
|
6/1/13 to
11/30/13*
|
Actual Fund return
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
$
|
1,000.00
|
|
|
$
|
1,219.70
|
|
|
1.31%
|
|
|
$
|
7.29
|
|
Class C
|
|
|
1,000.00
|
|
|
|
1,215.40
|
|
|
2.06%
|
|
|
|
11.44
|
|
Class R
|
|
|
1,000.00
|
|
|
|
1,218.00
|
|
|
1.56%
|
|
|
|
8.67
|
|
Institutional
Class
|
|
|
1,000.00
|
|
|
|
1,221.50
|
|
|
1.06%
|
|
|
|
5.90
|
|
Hypothetical 5% return
(5% return before expenses)
|
|
|
|
|
|
|
|
|
Class A
|
|
$
|
1,000.00
|
|
|
$
|
1,018.50
|
|
|
1.31%
|
|
|
$
|
6.63
|
|
Class C
|
|
|
1,000.00
|
|
|
|
1,014.74
|
|
|
2.06%
|
|
|
|
10.40
|
|
Class R
|
|
|
1,000.00
|
|
|
|
1,017.25
|
|
|
1.56%
|
|
|
|
7.89
|
|
Institutional
Class
|
|
|
1,000.00
|
|
|
|
1,019.75
|
|
|
1.06%
|
|
|
|
5.37
|
|
*
Expenses Paid During Period are equal
to the Funds annualized expense ratio, multiplied by the average account value
over the period, multiplied by 183/365 (to reflect the one-half year period).
Because actual returns reflect only the
most recent six month period, the returns shown may differ significantly from
fiscal year returns.
9
Security
type/sector
allocation and
|
top 10 equity
holdings
|
Delaware Small Cap Core Fund
|
As of November 30, 2013
(Unaudited)
|
Sector designations may be different than
the sector designations presented in other Fund materials. The sector
designations may represent the investment managers internal sector
classifications, which may result in the sector designations for one fund being
different than another funds sector designations.
Sector
type/sector
|
Percentage of net assets
|
Common Stock
|
95.64
|
%
|
Basic Materials
|
6.54
|
%
|
Business Services
|
5.95
|
%
|
Capital Goods
|
9.46
|
%
|
Communication Services
|
1.88
|
%
|
Consumer Discretionary
|
5.84
|
%
|
Consumer Services
|
3.70
|
%
|
Consumer Staples
|
3.76
|
%
|
Credit Cyclical
|
1.12
|
%
|
Energy
|
4.47
|
%
|
Financials
|
15.29
|
%
|
Healthcare
|
12.32
|
%
|
Media
|
0.54
|
%
|
Real Estate
|
5.35
|
%
|
Technology
|
16.21
|
%
|
Transportation
|
1.51
|
%
|
Utilities
|
1.70
|
%
|
Short-Term Investments
|
3.95
|
%
|
Total Value of Securities
|
99.59
|
%
|
Receivables and Other Assets Net of Liabilities
|
0.41
|
%
|
Total Net Assets
|
100.00
|
%
|
10
Holdings are for informational purposes
only and are subject to change at any time. They are not a recommendation to
buy, sell, or hold any security.
Top 10 equity holdings
|
Percentage of net assets
|
Air Methods
|
1.29
|
%
|
AAON
|
1.25
|
%
|
Susser
Holdings
|
1.24
|
%
|
West Pharmaceutical Services
|
1.19
|
%
|
Steven
Madden
|
1.16
|
%
|
Align Technology
|
1.12
|
%
|
Tenneco
|
1.12
|
%
|
G-III Apparel Group
|
1.09
|
%
|
Caseys General
Stores
|
1.06
|
%
|
FARO Technologies
|
1.06
|
%
|
11
Schedule of investments
|
|
Delaware Small Cap Core Fund
|
November 30,
2013
|
|
|
Number of shares
|
|
Value
|
Common
Stock 95.64%
|
|
|
|
|
Basic Materials 6.54%
|
|
|
|
|
|
Axiall
|
33,200
|
|
$
|
1,503,960
|
|
Boise Cascade
|
47,365
|
|
|
1,215,386
|
|
Cabot
|
23,900
|
|
|
1,166,320
|
|
Chemtura
|
68,900
|
|
|
1,818,960
|
|
Innophos
Holdings
|
18,800
|
|
|
902,024
|
|
Kaiser Aluminum
|
17,900
|
|
|
1,205,028
|
|
Materion
|
35,300
|
|
|
1,015,228
|
|
Neenah Paper
|
26,100
|
|
|
1,095,939
|
|
Stepan
|
15,200
|
|
|
964,592
|
|
Taminco
|
48,500
|
|
|
1,043,720
|
|
U.S. Silica
Holdings
|
13,995
|
|
|
482,967
|
|
|
|
|
|
12,414,124
|
Business Services 5.95%
|
|
|
|
|
|
Cross Country
Healthcare
|
93,700
|
|
|
715,868
|
|
FTI
Consulting
|
40,600
|
|
|
1,823,346
|
|
Kforce
|
81,775
|
|
|
1,650,220
|
|
McGrath
RentCorp
|
25,780
|
|
|
1,002,584
|
|
TeleTech Holdings
|
59,600
|
|
|
1,530,528
|
|
U.S.
Ecology
|
36,280
|
|
|
1,396,054
|
|
United Stationers
|
42,700
|
|
|
1,920,646
|
|
WageWorks
|
21,993
|
|
|
1,260,199
|
|
|
|
|
|
11,299,445
|
Capital Goods 9.46%
|
|
|
|
|
|
AAON
|
76,887
|
|
|
2,365,813
|
|
Acuity
Brands
|
12,820
|
|
|
1,314,435
|
|
Applied Industrial
Technologies
|
36,740
|
|
|
1,777,481
|
|
Barnes
Group
|
47,200
|
|
|
1,722,800
|
|
Chart Industries
|
3,134
|
|
|
304,938
|
|
Columbus
McKinnon
|
55,220
|
|
|
1,529,594
|
|
ESCO Technologies
|
25,400
|
|
|
865,124
|
|
Esterline
Technologies
|
8,700
|
|
|
765,774
|
|
Granite Construction
|
41,341
|
|
|
1,291,906
|
|
Kadant
|
39,300
|
|
|
1,627,806
|
|
MYR Group
|
49,300
|
|
|
1,252,713
|
|
Rofin-Sinar
Technologies
|
47,200
|
|
|
1,219,176
|
|
Tetra Tech
|
43,900
|
|
|
1,255,101
|
|
Titan
Machinery
|
37,050
|
|
|
659,861
|
|
|
|
|
|
17,952,522
|
12
|
|
Number of shares
|
|
Value
|
Common
Stock
(continued)
|
|
|
|
|
Communication Services 1.88%
|
|
|
|
|
|
Atlantic
Tele-Network
|
16,384
|
|
$
|
918,651
|
|
InterXion Holding
|
46,691
|
|
|
1,051,014
|
|
RigNet
|
37,801
|
|
|
1,605,787
|
|
|
|
|
|
3,575,452
|
Consumer Discretionary 5.84%
|
|
|
|
|
|
Express
|
52,200
|
|
|
1,284,642
|
|
Francescas
Holdings
|
55,100
|
|
|
1,081,062
|
|
G-III Apparel Group
|
34,200
|
|
|
2,060,550
|
|
Iconix Brand
Group
|
49,500
|
|
|
1,964,160
|
|
Jos. A. Bank Clothiers
|
29,150
|
|
|
1,656,303
|
|
Perry Ellis
International
|
54,500
|
|
|
846,385
|
|
Steven Madden
|
56,450
|
|
|
2,199,292
|
|
|
|
|
|
11,092,394
|
Consumer Services 3.70%
|
|
|
|
|
|
AFC
Enterprises
|
40,300
|
|
|
1,756,677
|
|
Buffalo Wild Wings
|
11,720
|
|
|
1,760,812
|
|
CEC
Entertainment
|
11,610
|
|
|
556,700
|
|
Cheesecake Factory
|
26,300
|
|
|
1,282,125
|
|
Jack in the
Box
|
35,280
|
|
|
1,670,508
|
|
|
|
|
|
7,026,822
|
Consumer Staples 3.76%
|
|
|
|
|
|
Caseys General Stores
|
27,100
|
|
|
2,016,782
|
|
J&J Snack
Foods
|
13,586
|
|
|
1,167,309
|
|
Prestige Brands
Holdings
|
45,400
|
|
|
1,599,896
|
|
Susser
Holdings
|
36,850
|
|
|
2,359,137
|
|
|
|
|
|
7,143,124
|
Credit Cyclical 1.12%
|
|
|
|
|
|
Tenneco
|
37,000
|
|
|
2,123,800
|
|
|
|
|
|
2,123,800
|
Energy 4.47%
|
|
|
|
|
|
Bonanza Creek
Energy
|
27,000
|
|
|
1,238,490
|
|
Bristow Group
|
11,050
|
|
|
886,210
|
|
C&J Energy
Services
|
36,900
|
|
|
874,530
|
|
Carrizo Oil & Gas
|
29,700
|
|
|
1,201,068
|
|
Diamondback
Energy
|
14,110
|
|
|
701,831
|
|
Jones Energy
|
37,070
|
|
|
535,662
|
13
Schedule of investments
Delaware Small Cap Core Fund
|
|
Number of shares
|
|
Value
|
Common
Stock
(continued)
|
|
|
|
|
Energy
(continued)
|
|
|
|
|
|
Kodiak Oil &
Gas
|
101,100
|
|
$
|
1,146,474
|
|
Pioneer Energy Services
|
115,000
|
|
|
830,300
|
|
Rosetta
Resources
|
21,300
|
|
|
1,077,141
|
|
|
|
|
|
8,491,706
|
Financials 15.29%
|
|
|
|
|
|
American Equity Investment Life
Holding
|
81,500
|
|
|
1,932,364
|
|
AMERISAFE
|
23,000
|
|
|
1,009,240
|
|
BBCN Bancorp
|
79,100
|
|
|
1,320,179
|
|
Bryn Mawr
Bank
|
14,700
|
|
|
445,116
|
|
Capital Bank Financial
|
57,097
|
|
|
1,332,644
|
|
Cardinal
Financial
|
74,600
|
|
|
1,322,658
|
|
City Holding
|
29,050
|
|
|
1,429,551
|
|
Essent
Group
|
4,875
|
|
|
105,983
|
|
Evercore Partners Class A
|
23,500
|
|
|
1,288,975
|
|
Flushing
Financial
|
66,200
|
|
|
1,430,582
|
|
Greenhill
|
18,800
|
|
|
1,028,548
|
@
|
Independent
Bank
|
34,300
|
|
|
1,309,231
|
|
Maiden Holdings
|
109,900
|
|
|
1,391,334
|
|
Park
National
|
17,000
|
|
|
1,435,480
|
|
Primerica
|
35,400
|
|
|
1,523,262
|
|
Prosperity
Bancshares
|
26,900
|
|
|
1,725,097
|
|
Sterling Bancorp
|
93,400
|
|
|
1,227,276
|
|
Stifel
Financial
|
31,700
|
|
|
1,419,209
|
|
Susquehanna Bancshares
|
126,200
|
|
|
1,588,858
|
|
Texas Capital
Bancshares
|
18,700
|
|
|
1,050,379
|
|
United Fire Group
|
31,600
|
|
|
940,100
|
|
Webster
Financial
|
55,200
|
|
|
1,627,296
|
|
Western Alliance Bancorp
|
49,700
|
|
|
1,154,034
|
|
|
|
|
|
29,037,396
|
Healthcare 12.32%
|
|
|
|
|
|
Acorda
Therapeutics
|
43,300
|
|
|
1,507,273
|
|
Air Methods
|
43,900
|
|
|
2,456,645
|
|
Align
Technology
|
38,970
|
|
|
2,129,321
|
|
Auxilium Pharmaceuticals
|
64,200
|
|
|
1,310,322
|
|
Cepheid
|
28,800
|
|
|
1,308,096
|
|
CONMED
|
37,840
|
|
|
1,540,466
|
|
CryoLife
|
93,005
|
|
|
1,027,705
|
14
|
|
Number of shares
|
|
Value
|
Common
Stock
(continued)
|
|
|
|
|
Healthcare
(continued)
|
|
|
|
|
|
Haemonetics
|
32,600
|
|
$
|
1,377,676
|
|
ICON
|
42,700
|
|
|
1,628,578
|
|
Incyte
|
5,800
|
|
|
270,280
|
|
InterMune
|
85,000
|
|
|
1,175,550
|
|
Medicines
|
24,300
|
|
|
889,623
|
|
Merit Medical Systems
|
51,987
|
|
|
851,027
|
|
Quidel
|
51,800
|
|
|
1,303,288
|
|
Spectrum
Pharmaceuticals
|
95,500
|
|
|
919,665
|
|
WellCare Health
Plans
|
19,300
|
|
|
1,433,990
|
|
West Pharmaceutical
Services
|
45,320
|
|
|
2,262,374
|
|
|
|
|
|
23,391,879
|
Media 0.54%
|
|
|
|
|
|
National
CineMedia
|
55,150
|
|
|
1,028,548
|
|
|
|
|
|
1,028,548
|
Real Estate 5.35%
|
|
|
|
|
|
DCT Industrial Trust
|
157,400
|
|
|
1,174,204
|
|
DuPont Fabros
Technology
|
55,300
|
|
|
1,297,891
|
|
EastGroup Properties
|
18,300
|
|
|
1,108,797
|
|
EPR
Properties
|
28,600
|
|
|
1,438,294
|
|
Kite Realty Group
Trust
|
159,000
|
|
|
1,041,450
|
|
LaSalle Hotel
Properties
|
56,800
|
|
|
1,778,976
|
|
Ramco-Gershenson Properties
Trust
|
69,000
|
|
|
1,104,000
|
|
Sovran Self
Storage
|
18,030
|
|
|
1,203,322
|
|
|
|
|
|
10,146,934
|
Technology 16.21%
|
|
|
|
|
|
Accelrys
|
125,500
|
|
|
1,221,115
|
|
Amkor
Technology
|
206,300
|
|
|
1,237,800
|
|
Anixter International
|
17,450
|
|
|
1,542,580
|
|
Applied Micro
Circuits
|
92,900
|
|
|
1,165,895
|
|
Brightcove
|
108,700
|
|
|
1,546,801
|
|
ChannelAdvisor
|
24,630
|
|
|
845,548
|
|
EPAM Systems
|
29,121
|
|
|
1,032,922
|
|
ExlService
Holdings
|
21,190
|
|
|
558,568
|
|
FARO Technologies
|
36,890
|
|
|
2,011,981
|
|
inContact
|
146,370
|
|
|
1,097,775
|
|
j2 Global
|
33,600
|
|
|
1,611,792
|
|
KEYW
Holding
|
119,382
|
|
|
1,479,143
|
|
Netgear
|
36,910
|
|
|
1,185,180
|
15
Schedule of investments
Delaware Small Cap Core Fund
|
|
Number of shares
|
|
Value
|
Common
Stock
(continued)
|
|
|
|
|
|
Technology
(continued)
|
|
|
|
|
|
|
Plantronics
|
|
25,100
|
|
$
|
1,122,723
|
|
Proofpoint
|
|
62,600
|
|
|
1,909,300
|
|
Rocket Fuel
|
|
27,400
|
|
|
1,308,076
|
|
SciQuest
|
|
40,700
|
|
|
1,137,972
|
|
Semtech
|
|
49,800
|
|
|
1,480,056
|
|
Shutterfly
|
|
29,000
|
|
|
1,369,670
|
|
SS&C Technologies
Holdings
|
|
32,432
|
|
|
1,398,144
|
|
Synaptics
|
|
37,420
|
|
|
1,890,084
|
|
Trulia
|
|
38,600
|
|
|
1,325,524
|
|
WNS Holdings ADR
|
|
64,898
|
|
|
1,299,258
|
|
|
|
|
|
|
30,777,907
|
Transportation 1.51%
|
|
|
|
|
|
|
Roadrunner
Transportation Systems
|
|
52,600
|
|
|
1,440,188
|
|
XPO Logistics
|
|
61,800
|
|
|
1,418,928
|
|
|
|
|
|
|
2,859,116
|
Utilities 1.70%
|
|
|
|
|
|
|
Cleco
|
|
30,200
|
|
|
1,380,442
|
|
NorthWestern
|
|
22,800
|
|
|
1,002,744
|
|
UIL
Holdings
|
|
22,516
|
|
|
845,025
|
|
|
|
|
|
|
3,228,211
|
Total Common Stock
(cost
$135,583,001)
|
|
|
|
|
181,589,380
|
|
|
|
|
Principal amount
|
|
|
|
Short-Term Investments 3.95%
|
|
|
|
|
|
≠
Discount Note 0.04%
|
|
|
|
|
|
|
Federal Home Loan
Bank 0.05% 12/27/13
|
|
$ 75,755
|
|
|
75,755
|
|
|
|
|
|
|
75,755
|
Repurchase Agreements 2.44%
|
|
|
|
|
|
|
Bank of America 0.04%, dated
11/29/13,
|
|
|
|
|
|
|
to be repurchased on 12/2/13, repurchase price
|
|
|
|
|
|
|
$856,102 (collateralized by U.S. government
|
|
|
|
|
|
|
obligations 0.375%-1.875% 11/15/14-6/30/15;
|
|
|
|
|
|
|
market value $873,223)
|
|
856,101
|
|
|
856,101
|
|
BNP Paribas 0.06%,
dated 11/29/13,
|
|
|
|
|
|
|
to be repurchased on 12/2/13, repurchase price
|
|
|
|
|
|
|
$3,773,905 (collateralized by U.S. government
|
|
|
|
|
|
|
obligations 0.625%-2.625% 6/30/14-11/30/19;
|
|
|
|
|
|
|
market value $3,849,377)
|
|
3,773,899
|
|
|
3,773,899
|
|
|
|
|
|
|
4,630,000
|
16
|
Principal amount
|
|
Value
|
Short-Term Investments
(continued)
|
|
|
|
|
|
≠U.S. Treasury Obligations
1.47%
|
|
|
|
|
|
U.S. Treasury
Bills
|
|
|
|
|
|
0.02% 12/19/13
|
$
|
862,991
|
|
$
|
862,986
|
0.033% 1/23/14
|
|
876,061
|
|
|
876,047
|
0.065% 4/24/14
|
|
1,051,273
|
|
|
1,050,901
|
|
|
|
|
|
2,789,934
|
Total Short-Term Investments
(cost
$7,495,754)
|
|
|
|
|
7,495,689
|
|
Total Value of Securities 99.59%
(cost $143,078,755)
|
|
|
|
$
|
189,085,069
|
|
Non income producing
security.
|
@
|
Illiquid security. At Nov. 30,
2013, the aggregate value of illiquid securities was $1,309,231, which
represented 0.69% of the Funds net assets. See Note 9 in Notes to
financial statements.
|
≠
|
The rate shown is the effective
yield at the time of purchase.
|
ADR American Depositary
Receipt
See accompanying notes, which are an
integral part of the financial statements.
17
Statement of assets and
liabilities
|
|
Delaware Small Cap Core Fund
|
November 30,
2013
|
Assets:
|
|
|
|
Investments, at
value
1
|
$
|
181,589,380
|
|
Short-term investments,
at value
2
|
|
7,495,689
|
|
Cash
|
|
17,011
|
|
Receivable for fund
shares sold
|
|
1,008,985
|
|
Dividends and interest
receivable
|
|
98,319
|
|
Total assets
|
|
190,209,384
|
|
|
Liabilities:
|
|
|
|
Payable for fund shares
redeemed
|
|
109,938
|
|
Investment management
fees payable
|
|
112,134
|
|
Distribution fees
payable to affiliates
|
|
38,473
|
|
Audit fees
payable
|
|
27,535
|
|
Trustees fees and
expenses payable
|
|
1,221
|
|
Other affiliates
payable
|
|
15,748
|
|
Other accrued
expenses
|
|
47,646
|
|
Total
liabilities
|
|
352,695
|
|
|
Total Net Assets
|
$
|
189,856,689
|
|
|
Net Assets Consist of:
|
|
|
|
Paid-in
capital
|
$
|
140,104,309
|
|
Distributions in excess
of net investment loss
|
|
(355,911
|
)
|
Accumulated net realized
gain on investments
|
|
4,101,977
|
|
Net unrealized
appreciation of investments
|
|
46,006,314
|
|
Total Net
Assets
|
$
|
189,856,689
|
|
|
1
Investments, at cost
|
$
|
135,583,001
|
|
2
Short-term investments,
at cost
|
|
7,495,754
|
|
18
Net Asset Value
Class A
|
|
|
Net assets
|
$
|
69,385,513
|
Shares of beneficial
interest outstanding, unlimited authorization, no par
|
|
3,551,384
|
Net asset value per
share
|
$
|
19.54
|
Sales
charge
|
|
5.75%
|
Offering price per share, equal
to net asset value per share/(1 - sales charge)
|
$
|
20.73
|
|
Class C
|
|
|
Net assets
|
$
|
25,827,518
|
Shares of beneficial
interest outstanding, unlimited authorization, no par
|
|
1,400,039
|
Net asset value per
share
|
$
|
18.45
|
|
Class R
|
|
|
Net assets
|
$
|
12,785,453
|
Shares of beneficial
interest outstanding, unlimited authorization, no par
|
|
665,088
|
Net asset value per
share
|
$
|
19.22
|
|
Institutional Class
|
|
|
Net assets
|
$
|
81,858,205
|
Shares of beneficial
interest outstanding, unlimited authorization, no par
|
|
4,147,570
|
Net asset value per
share
|
$
|
19.74
|
See accompanying notes, which are an
integral part of the financial statements.
19
Statement of operations
|
|
Delaware Small Cap Core Fund
|
Year Ended November 30,
2013
|
Investment Income:
|
|
|
|
|
|
|
Dividends
|
$
|
1,361,835
|
|
|
|
|
Securities
lending income
|
|
12,039
|
|
|
|
|
Interest
|
|
2,802
|
|
$
|
1,376,676
|
|
|
Expenses:
|
|
|
|
|
|
|
Management
fees
|
|
942,227
|
|
|
|
|
Distribution
expenses Class A
|
|
122,308
|
|
|
|
|
Distribution
expenses Class C
|
|
156,952
|
|
|
|
|
Distribution
expenses Class R
|
|
52,092
|
|
|
|
|
Dividend
disbursing and transfer agent fees and expenses
|
|
186,526
|
|
|
|
|
Registration
fees
|
|
75,665
|
|
|
|
|
Accounting and
administration expenses
|
|
48,681
|
|
|
|
|
Audit and
tax
|
|
27,730
|
|
|
|
|
Reports and
statements to shareholders
|
|
19,643
|
|
|
|
|
Legal
fees
|
|
9,856
|
|
|
|
|
Trustees fees
and expenses
|
|
6,395
|
|
|
|
|
Custodian
fees
|
|
5,243
|
|
|
|
|
Other
expenses
|
|
14,388
|
|
|
1,667,706
|
|
Less waived
distribution expenses Class A
|
|
|
|
|
(16,133
|
)
|
Less waived
distribution expenses Class R
|
|
|
|
|
(7,016
|
)
|
Less expense
paid indirectly
|
|
|
|
|
(125
|
)
|
Total operating
expenses
|
|
|
|
|
1,644,432
|
|
Net Investment Loss
|
|
|
|
|
(267,756
|
)
|
|
Net Realized and Unrealized
Gain:
|
|
|
|
|
|
|
Net realized
gain on investments
|
|
|
|
|
12,854,496
|
|
Net change in
unrealized appreciation (depreciation)
|
|
|
|
|
|
|
of investments
|
|
|
|
|
33,855,724
|
|
Net Realized and
Unrealized Gain
|
|
|
|
|
46,710,220
|
|
|
Net Increase in Net Assets Resulting
from Operations
|
|
|
|
$
|
46,442,464
|
|
See accompanying notes, which are an
integral part of the financial statements.
20
Statements of changes in net
assets
Delaware Small Cap Core Fund
|
Year
Ended
|
|
11/30/13
|
|
11/30/12
|
Increase (Decrease) in Net Assets from
Operations:
|
|
|
|
|
|
|
|
Net investment loss
|
$
|
(267,756
|
)
|
|
$
|
(122,098
|
)
|
Net realized
gain
|
|
12,854,496
|
|
|
|
5,527,183
|
|
Net change in unrealized appreciation (depreciation)
|
|
33,855,724
|
|
|
|
3,363,440
|
|
Net increase in
net assets resulting from operations
|
|
46,442,464
|
|
|
|
8,768,525
|
|
|
Dividends and Distributions to
Shareholders from:
|
|
|
|
|
|
|
|
Net investment income:
|
|
|
|
|
|
|
|
Class A
|
|
(22,899
|
)
|
|
|
|
|
Institutional Class
|
|
(133,052
|
)
|
|
|
|
|
|
|
(155,951
|
)
|
|
|
|
|
|
Capital Share
Transactions:
|
|
|
|
|
|
|
|
Proceeds from shares sold:
|
|
|
|
|
|
|
|
Class A
|
|
38,621,136
|
|
|
|
8,834,083
|
|
Class C
|
|
11,670,310
|
|
|
|
3,125,991
|
|
Class R
|
|
4,701,991
|
|
|
|
2,206,774
|
|
Institutional Class
|
|
29,676,984
|
|
|
|
10,737,301
|
|
|
Net asset value
of shares issued upon reinvestment
|
|
|
|
|
|
|
|
of dividends and distributions:
|
|
|
|
|
|
|
|
Class A
|
|
22,424
|
|
|
|
|
|
Institutional Class
|
|
131,836
|
|
|
|
|
|
|
|
84,824,681
|
|
|
|
24,904,149
|
|
22
|
|
Year
Ended
|
|
|
11/30/13
|
|
11/30/12
|
Capital Share Transactions
(continued):
|
|
|
|
|
|
|
|
|
Cost of shares redeemed:
|
|
|
|
|
|
|
|
|
Class A
|
|
|
(10,033,078
|
)
|
|
|
(10,866,354
|
)
|
Class C
|
|
|
(1,587,669
|
)
|
|
|
(1,705,061
|
)
|
Class R
|
|
|
(2,037,193
|
)
|
|
|
(1,931,142
|
)
|
Institutional Class
|
|
|
(10,705,047
|
)
|
|
|
(4,714,614
|
)
|
|
|
|
(24,362,987
|
)
|
|
|
(19,217,171
|
)
|
Increase in net assets derived
from
|
|
|
|
|
|
|
|
|
capital share transactions
|
|
|
60,461,694
|
|
|
|
5,686,978
|
|
Net Increase in Net Assets
|
|
|
106,748,207
|
|
|
|
14,455,503
|
|
|
Net Assets:
|
|
|
|
|
|
|
|
|
Beginning of year
|
|
|
83,108,482
|
|
|
|
68,652,979
|
|
End of year (including
accumulated (distributions in
|
|
|
|
|
|
|
|
|
excess of) net investment income (loss) of $(355,911)
|
|
|
|
|
|
|
|
|
and $(88,155), respectively)
|
|
$
|
189,856,689
|
|
|
$
|
83,108,482
|
|
See accompanying notes, which are an
integral part of the financial statements.
23
Financial highlights
Delaware Small Cap Core Fund Class A
Selected data for each share of the Fund
outstanding throughout each period were as follows:
Net asset value, beginning of
period
|
|
Income (loss) from investment
operations:
|
Net investment income
(loss)
1
|
Net realized and
unrealized gain
|
Total from investment
operations
|
|
Less dividends and distributions
from:
|
Net investment
income
|
Total dividends and
distributions
|
|
Net asset value, end of period
|
|
Total return
2
|
|
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
The average shares outstanding method
has been applied for per share information.
2
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 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.
24
|
Year Ended
|
|
|
11/30/13
|
|
11/30/12
|
|
11/30/11
|
|
11/30/10
|
|
11/30/09
|
|
|
$13.560
|
|
|
$12.010
|
|
|
$11.150
|
|
|
$8.740
|
|
$6.930
|
|
|
|
|
|
|
|
|
|
(0.036
|
)
|
|
(0.022
|
)
|
|
(0.024
|
)
|
|
0.034
|
|
0.003
|
|
|
|
6.027
|
|
|
1.572
|
|
|
0.928
|
|
|
2.376
|
|
1.815
|
|
|
|
5.991
|
|
|
1.550
|
|
|
0.904
|
|
|
2.410
|
|
1.818
|
|
|
|
|
|
|
|
|
|
(0.011
|
)
|
|
|
|
|
(0.044
|
)
|
|
|
|
(0.008
|
)
|
|
|
(0.011
|
)
|
|
|
|
|
(0.044
|
)
|
|
|
|
(0.008
|
)
|
|
|
|
|
|
$19.540
|
|
|
$13.560
|
|
|
$12.010
|
|
|
$11.150
|
|
$8.740
|
|
|
|
|
|
|
44.21%
|
|
|
12.91%
|
|
|
8.10%
|
|
|
27.57%
|
|
25.36%
|
|
|
|
|
|
|
|
|
|
$69,386
|
|
|
$25,084
|
|
|
$24,242
|
|
|
$23,191
|
|
$24,512
|
|
|
|
1.31%
|
|
|
1.36%
|
|
|
1.39%
|
|
|
1.40%
|
|
1.45%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.35%
|
|
|
1.41%
|
|
|
1.45%
|
|
|
1.54%
|
|
1.63%
|
|
|
|
(0.22%
|
)
|
|
(0.17%
|
)
|
|
(0.20%
|
)
|
|
0.35%
|
|
0.04%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.26%
|
)
|
|
(0.22%
|
)
|
|
(0.26%
|
)
|
|
0.21%
|
|
(0.14%
|
)
|
|
|
38%
|
|
|
37%
|
|
|
42%
|
|
|
37%
|
|
79%
|
|
|
25
Financial
highlights
Delaware Small Cap Core Fund Class
C
Selected data for each share of the Fund
outstanding throughout each period were as follows:
Net asset value, beginning
of period
|
|
Income (loss) from investment
operations:
|
Net investment
loss
1
|
Net realized and
unrealized gain
|
Total from investment
operations
|
|
Net asset value, end of period
|
|
Total return
2
|
|
Ratios and supplemental data:
|
Net assets, end of period (000
omitted)
|
Ratio of expenses to
average net assets
|
Ratio of expenses to average net
assets
|
prior to fees
waived
|
Ratio of net
investment loss to average net assets
|
Ratio of net investment loss to
average net assets
|
prior to fees
waived
|
Portfolio
turnover
|
1
The average shares outstanding method has been applied
for per share information.
2
Total 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.
26
|
Year Ended
|
|
|
11/30/13
|
|
11/30/12
|
|
11/30/11
|
|
11/30/10
|
|
11/30/09
|
|
|
$12.890
|
|
|
$11.510
|
|
|
$10.720
|
|
|
$8.470
|
|
|
$6.750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.152
|
)
|
|
(0.115
|
)
|
|
(0.112
|
)
|
|
(0.039
|
)
|
|
(0.052
|
)
|
|
|
5.712
|
|
|
1.495
|
|
|
0.902
|
|
|
2.289
|
|
|
1.772
|
|
|
|
5.560
|
|
|
1.380
|
|
|
0.790
|
|
|
2.250
|
|
|
1.720
|
|
|
|
|
|
|
$18.450
|
|
|
$12.890
|
|
|
$11.510
|
|
|
$10.720
|
|
|
$8.470
|
|
|
|
|
|
|
43.14%
|
|
|
11.99%
|
|
|
7.37%
|
|
|
26.56%
|
|
|
25.48%
|
|
|
|
|
|
|
|
|
|
$25,828
|
|
|
$10,051
|
|
|
$7,702
|
|
|
$8,285
|
|
|
$7,468
|
|
|
|
2.06%
|
|
|
2.11%
|
|
|
2.14%
|
|
|
2.15%
|
|
|
2.20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.06%
|
|
|
2.11%
|
|
|
2.15%
|
|
|
2.24%
|
|
|
2.33%
|
|
|
|
(0.97%
|
)
|
|
(0.92%
|
)
|
|
(0.95%
|
)
|
|
(0.40%
|
)
|
|
(0.71%
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.97%
|
)
|
|
(0.92%
|
)
|
|
(0.96%
|
)
|
|
(0.49%
|
)
|
|
(0.84%
|
)
|
|
|
38%
|
|
|
37%
|
|
|
42%
|
|
|
37%
|
|
|
79%
|
|
|
27
Financial
highlights
Delaware Small Cap Core Fund Class
R
Selected data for each share of the Fund
outstanding throughout each period were as follows:
Net asset value, beginning
of period
|
|
Income (loss) from investment
operations:
|
Net investment income
(loss)
1
|
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 return
2
|
|
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 loss to
average net assets
|
prior to fees
waived
|
Portfolio
turnover
|
1
The average shares outstanding method has been applied
for per share information.
2
Total 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 all 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.
28
|
Year Ended
|
|
|
11/30/13
|
|
11/30/12
|
|
11/30/11
|
|
11/30/10
|
|
11/30/09
|
|
|
$13.360
|
|
|
$11.870
|
|
|
$11.030
|
|
|
$8.660
|
|
|
$6.870
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.076
|
)
|
|
(0.054
|
)
|
|
(0.054
|
)
|
|
0.009
|
|
|
(0.016
|
)
|
|
|
5.936
|
|
|
1.544
|
|
|
0.913
|
|
|
2.361
|
|
|
1.806
|
|
|
|
5.860
|
|
|
1.490
|
|
|
0.859
|
|
|
2.370
|
|
|
1.790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.019
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.019
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$19.220
|
|
|
$13.360
|
|
|
$11.870
|
|
|
$11.030
|
|
|
$8.660
|
|
|
|
|
|
|
43.86%
|
|
|
12.55%
|
|
|
7.79%
|
|
|
27.37%
|
|
|
26.06%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$12,785
|
|
|
$6,809
|
|
|
$5,786
|
|
|
$5,322
|
|
|
$3,848
|
|
|
|
1.56%
|
|
|
1.61%
|
|
|
1.64%
|
|
|
1.65%
|
|
|
1.70%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.64%
|
|
|
1.71%
|
|
|
1.75%
|
|
|
1.84%
|
|
|
1.93%
|
|
|
|
(0.47%
|
)
|
|
(0.42%
|
)
|
|
(0.45%
|
)
|
|
0.10%
|
|
|
(0.21%
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.55%
|
)
|
|
(0.52%
|
)
|
|
(0.56%
|
)
|
|
(0.09%
|
)
|
|
(0.44%
|
)
|
|
|
38%
|
|
|
37%
|
|
|
42%
|
|
|
37%
|
|
|
79%
|
|
|
29
Financial
highlights
Delaware Small Cap Core Fund
Institutional Class
Selected data for each share of the Fund
outstanding throughout each period were as follows:
Net asset value, beginning
of period
|
|
Income from investment
operations:
|
Net investment
income
1
|
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 return
2
|
|
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 average shares outstanding method has been applied
for per share information.
2
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.
30
|
Year Ended
|
|
|
11/30/13
|
|
11/30/12
|
|
11/30/11
|
|
11/30/10
|
|
11/30/09
|
|
|
$13.690
|
|
|
$12.100
|
|
|
$11.230
|
|
|
$8.790
|
|
|
$6.970
|
|
|
|
|
|
|
|
|
|
0.005
|
|
|
0.011
|
|
|
0.006
|
|
|
0.060
|
|
|
0.022
|
|
|
|
6.089
|
|
|
1.579
|
|
|
0.934
|
|
|
2.385
|
|
|
1.830
|
|
|
|
6.094
|
|
|
1.590
|
|
|
0.940
|
|
|
2.445
|
|
|
1.852
|
|
|
|
|
|
|
|
|
|
(0.044
|
)
|
|
|
|
|
(0.070
|
)
|
|
(0.005
|
)
|
|
(0.032
|
)
|
|
|
(0.044
|
)
|
|
|
|
|
(0.070
|
)
|
|
(0.005
|
)
|
|
(0.032
|
)
|
|
|
|
|
|
$19.740
|
|
|
$13.690
|
|
|
$12.100
|
|
|
$11.230
|
|
|
$8.790
|
|
|
|
|
|
|
44.64%
|
|
|
13.14%
|
|
|
8.37%
|
|
|
27.83%
|
|
|
25.78%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$81,858
|
|
|
$41,164
|
|
|
$30,923
|
|
|
$33,877
|
|
|
$30,401
|
|
|
|
1.06%
|
|
|
1.11%
|
|
|
1.14%
|
|
|
1.15%
|
|
|
1.20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.06%
|
|
|
1.11%
|
|
|
1.15%
|
|
|
1.24%
|
|
|
1.33%
|
|
|
|
0.03%
|
|
|
0.08%
|
|
|
0.05%
|
|
|
0.60%
|
|
|
0.29%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.03%
|
|
|
0.08%
|
|
|
0.04%
|
|
|
0.51%
|
|
|
0.16%
|
|
|
|
38%
|
|
|
37%
|
|
|
42%
|
|
|
37%
|
|
|
79%
|
|
|
31
Notes to financial statements
|
|
Delaware Small Cap Core Fund
|
November 30,
2013
|
Delaware Group
®
Equity Funds V (Trust) is organized as a
Delaware statutory trust and offers three series: Delaware Dividend Income Fund,
Delaware Small Cap Core Fund and Delaware Small Cap Value Fund. These financial
statements and the related notes pertain to Delaware Small Cap Core Fund (Fund).
The Trust is an open-end investment company. The Fund is considered diversified
under the Investment Company Act of 1940, as amended, and offers Class A,
Class C, Class R 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 twelve 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.
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, then 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. Investment company securities are valued at net asset
value per share, as reported by the underlying investment company. 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 Funds 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).
32
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 Funds 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
Funds tax positions taken for all open federal income tax years (Nov. 30, 2010
Nov. 30, 2013), and has concluded that no provision for federal income tax is
required in the Funds financial statements.
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 counterpartys 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 Funds 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 Nov. 29, 2013.
Use of Estimates
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 amongst 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 ex-dividend date, subject to reclassification
33
Notes to financial
statements
Delaware Small Cap Core Fund
1. Significant Accounting Policies
(continued)
upon notice of the character of
such distributions by the issuer. The Fund declares and pays distributions from
net investment income and 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. 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. There
were no commission rebates for the year ended Nov. 30, 2013.
The Fund may receive earnings credits from
its custodian when positive cash balances are maintained, which are used to
offset custody fees. There were no earnings credits for the year ended Nov. 30,
2013.
The Fund may receive earnings credits from
its transfer agent when positive cash balances are maintained, which are used to
offset transfer agent fees. If the amount earned is greater than one dollar, the
expense paid under this arrangement is included in dividend disbursing and
transfer agent fees and expenses and appears on the statement of operations with
the corresponding expense offset shown as expense paid
indirectly.
For the year ended Nov. 30, 2013, the Fund earned $ 125 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 0.75% on the
first $500 million of average daily net assets of the Fund, 0.70% on the next
$500 million, 0.65% on the next $1.5 billion, and 0.60% on average daily net
assets in excess of $2.5 billion.
DMC 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 operating expenses (excluding any 12b-1
fees, taxes, interest, inverse floater program expenses, 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 relating to reorganizations, litigation, conducting shareholder meetings,
and liquidations, (collectively, nonroutine expenses)) do not exceed 1.15% of
average daily net assets of the Fund from Dec. 1, 2012 through Nov. 30, 2013*.
For purposes of this waiver and reimbursement, nonroutine expenses may also
* The contractual waiver period is from
March 29, 2012 through March 28, 2014.
34
include such additional costs and expenses
as may be agreed upon from time to time by the Funds Board and DMC. This
expense waiver and reimbursement applies only to expenses paid directly by the
Fund.
Delaware Service Company, Inc. (DSC), an
affiliate of DMC, provides fund accounting and financial administration
oversight services to the Fund. For these services, the Fund pays DSC fees 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 DSC 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 year ended Nov. 30,
2013, the Fund was charged $ 6,083 for these services.
DSC is also the transfer agent and
dividend disbursing agent of the Fund. For these services, the Fund pays DSC
fees 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. This amount is
included in the statement of operations as dividend disbursing and transfer
agent fees and expenses. For the year ended Nov. 30, 2013, the amount charged by DSC was
27,781. Pursuant to a sub-transfer agency agreement between DSC 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 1.00% of the average daily net assets
of the Class C shares. Effective Oct. 1, 2013, the Fund pays DDLP an annual
distribution and service fees of 0.25% and 0.50% of the average daily net assets
of the Class A and Class R shares, respectively. Prior to Oct. 1, 2013, the Fund
paid DDLP an annual distribution and service fee of 0.30% and 0.60%,
respectively, of the average daily net assets of the Class A and Class R shares,
respectively. For the period from Dec. 1, 2012 to Oct. 1, 2013, the distribution
and service fees for Class A and Class R were contractually limited to 0.25% and
0.50% of the classes average daily net assets. 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 year
ended Nov. 30, 2013, the Fund was charged $4,389 for internal legal, tax and
regulatory reporting services provided by DMC and/or its affiliates employees.
For the year ended Nov. 30, 2013, DDLP
earned $ 36,733 for commissions on sales of the Funds Class A shares. For the
year ended Nov. 30, 2013, DDLP received gross CDSC commissions of $269 and $389
on redemption of the Funds Class A and Class C shares, respectively, and these
commissions were entirely used to offset up-front commissions previously paid by
DDLP to broker/dealers on sales of those shares.
35
Notes to financial
statements
Delaware Small Cap Core Fund
2. Investment Management,
Administration Agreements and Other Transactions with Affiliates
(continued)
Trustees fees include expenses accrued by
the Fund for each Trustees retainer and meeting fees. Certain officers of DMC,
DSC 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 year ended Nov. 30, 2013, the Fund
made purchases of $ 98,789,940 and sales of $ 45,538,755 of investment
securities other than short-term investments.
At Nov. 30, 2013, the cost of investments
for federal income tax purposes was $143,847,046. At Nov. 30, 2013, the net
unrealized appreciation was $45,238,023, of which $46,884,854 related to
unrealized appreciation of investments and $1,646,831 related to unrealized
depreciation of investments.
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
entitys own assumptions about the assumptions that market participants would
use in pricing the asset or liability developed based on the best information
available under the circumstances. The Funds 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 (e.g., 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)
(e.g., debt securities, government securities, swap contracts, foreign
currency exchange contracts, foreign securities utilizing international
fair value pricing, broker-quoted securities, fair valued securities)
|
36
Level 3
|
inputs are significant unobservable
inputs (including the Funds own assumptions used to determine
the fair value of investments) (e.g., 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 Funds investments by fair value hierarchy levels as of Nov.
30, 2013:
|
Level 1
|
|
Level 2
|
|
Total
|
Common
Stock
|
$
|
181,589,380
|
|
$
|
|
|
$
|
181,589,380
|
Short-Term Investments
|
|
|
|
|
7,495,689
|
|
|
7,495,689
|
Total
|
$
|
181,589,380
|
|
$
|
7,495,689
|
|
$
|
189,085,069
|
During the year ended Nov. 30, 2013, there
were no transfers between Level 1 investments, Level 2 investments or Level 3
investments that had a significant impact to the Fund. The Funds policy is to
recognize transfers between levels at the beginning of the reporting
period.
At Nov. 30, 2013, there were no Level 3
investments.
4. Dividend and Distribution
Information
Income and long-term capital gain
distributions are determined in accordance with federal income tax regulations,
which may differ from U.S. GAAP. Additionally, distributions from net short-term
gains on sales of investment securities are treated as ordinary income for
federal income tax purposes. There were no dividends and distributions paid
during the year ended Nov. 30, 2012. The tax character of dividends and
distributions paid during the year ended Nov. 30, 2013 was as
follows:
|
Year
Ended
|
|
11/30/13
|
Long-term capital
gain
|
$
|
155,951
|
37
Notes to financial
statements
Delaware Small Cap Core Fund
5. Components of Net Assets on a Tax
Basis
As of Nov. 30, 2013, the components of net
assets on a tax basis were as follows:
Shares of beneficial interest
|
|
$
|
140,104,309
|
|
Qualified late year losses
deferred
|
|
|
(355,911
|
)
|
Undistributed long-term capital
gain
|
|
|
4,870,268
|
|
Unrealized appreciation of
investments
|
|
|
45,238,023
|
|
Net assets
|
|
$
|
189,856,689
|
|
The differences between book basis and tax
basis components of net assets are primarily attributable to tax deferral of
losses on wash sales.
Qualified late year ordinary and capital
losses (including currency and specified gain/loss items) represent losses
realized from Jan. 1, 2013 through Nov. 30, 2013 and Dec. 1, 2012 through Nov.
30, 2013, respectively, that, in accordance with federal income tax regulations,
the Fund has elected to defer and treat as having arisen in the following fiscal
year.
For financial reporting purposes, capital
accounts are adjusted to reflect the tax character of permanent book/tax
differences. Reclassifications are primarily due to dividends and distributions.
Results of operations and net assets were not affected by these
reclassifications. For the year ended Nov. 30, 2013, the Fund recorded the
following reclassifications.
Distributions in excess of net
investment loss
|
$
|
155,951
|
|
Accumulated net realized gain
|
|
(155,951
|
)
|
For federal income tax purposes, capital
loss carryforwards may be carried forward and applied against future capital
gains. $7,390,998 was utilized in 2013.
On Dec. 22, 2010, the Regulated Investment
Company Modernization Act of 2010 (the 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. However, any losses incurred during those future taxable years
will be required to be utilized prior to the losses incurred in pre-enactment
taxable years, which carry an expiration date. As a result of this ordering
rule, pre-enactment capital loss carryforwards may be more likely to expire
unused. 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.
38
6. Capital Shares
Transactions in capital shares were as
follows:
|
|
Year
Ended
|
|
|
11/30/13
|
|
11/30/12
|
Shares
sold:
|
|
|
|
|
|
|
Class A
|
|
2,308,325
|
|
|
665,954
|
|
Class
C
|
|
724,461
|
|
|
247,010
|
|
Class R
|
|
283,583
|
|
|
169,158
|
|
Institutional
Class
|
|
1,783,487
|
|
|
805,690
|
|
|
Shares issued upon
reinvestment of dividends and distributions:
|
|
|
|
|
|
|
Class A
|
|
1,609
|
|
|
|
|
Institutional
Class
|
|
9,390
|
|
|
|
|
|
|
5,110,855
|
|
|
1,887,812
|
|
|
Shares
redeemed:
|
|
|
|
|
|
|
Class A
|
|
(608,787
|
)
|
|
(833,529
|
)
|
Class
C
|
|
(104,432
|
)
|
|
(136,402
|
)
|
Class R
|
|
(128,048
|
)
|
|
(147,035
|
)
|
Institutional
Class
|
|
(651,586
|
)
|
|
(354,193
|
)
|
|
|
(1,492,853
|
)
|
|
(1,471,159
|
)
|
Net
increase
|
|
3,618,002
|
|
|
416,653
|
|
7. Line of Credit
The Fund, along with certain other funds
in the Delaware Investments
®
Family of Funds (Participants), was a participant in a
$125,000,000 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
Participants 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. 12, 2013.
On Nov. 12, 2013, the Fund, along with the
other Participants, entered into an amendment to the agreement for a
$225,000,000 revolving line of credit. The line of credit is to be used as
described above and operates in substantially the same manner as the original
agreement. The line of credit available under the agreement expires on Nov. 10,
2014.
The Fund had no amounts outstanding as of
Nov. 30, 2013 or at any time during the year then ended.
39
Notes to financial
statements
Delaware Small Cap Core Fund
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: (i) 102% with respect to U.S.
securities and foreign securities that are denominated and payable in U.S.
dollars; and (ii) 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 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 Mellons 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.
40
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 or
another collateral investment pool. This could occur if an investment in a
collateral investment pool defaulted or if it were necessary to liquidate assets
in the collateral investment pool to meet returns on outstanding security loans
at a time when the collateral investment pools net asset value per unit was
less than $1.00. Under those circumstances, the Fund may not receive an amount
from the collateral investment pool 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 Nov. 30, 2013, the Fund had no
securities out on loan.
9. Credit and Market
Risk
The Fund invests a significant portion of
its assets in small-sized companies and may be subject to certain risks
associated with ownership of securities of such companies. Investments in
small-sized companies may be more volatile than investments in larger companies
for a number of reasons, which include more limited financial resources or a
dependence on narrow product lines.
The Fund invests in REITs and is subject
to the risks associated with that industry. If the Fund holds real estate
directly as a result of defaults or receives rental income directly from real
estate holdings, its tax status as a regulated investment company may be
jeopardized. There were no direct real estate holdings during the year ended
Nov. 30, 2013. The Funds REIT holdings are also affected by interest rate
changes, particularly if the REITs it holds use floating rate debt to finance
their ongoing operations.
The Fund may invest up to 15% of its net
assets in illiquid securities, which may include securities with contractual
restrictions on resale, securities exempt from registration under Rule 144A of
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 Funds Board
has delegated DMC the day-to-day functions of determining whether individual
securities are liquid for purposes of the Funds 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 Funds 15% limit on
investments in illiquid securities. As of Nov. 30, 2013, there were no Rule 144A
securities held by the Fund. Illiquid securities have been identified in the
schedule of investments.
41
Notes to financial
statements
Delaware Small Cap Core Fund
10. Contractual Obligations
The Fund enters into contracts in the
normal course of business that contain a variety of indemnifications. The Funds
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 Funds existing contracts and expects the risk of loss to be
remote.
11. Subsequent Events
Management has determined that no material
events or transactions occurred subsequent to Nov. 30, 2013 that would require
recognition or disclosure in the Funds financial statements.
42
Report of independent
registered public
accounting firm
To the Board of Trustees of Delaware
Group
®
Equity
Funds V
and Shareholders of Delaware Small Cap Core Fund:
In our opinion, the accompanying statement
of assets and liabilities, including the schedule of investments, and the
related statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Delaware Small Cap Core Fund (one of the series constituting Delaware Group
Equity Funds V, hereafter referred to as the Fund) at November 30, 2013, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended and the financial highlights
for each of the four years in the period then ended, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
financial statements) are the responsibility of the Funds management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at November 30, 2013 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion. The financial highlights for the year ended November 30, 2009 were
audited by other independent accountants whose report dated January 21, 2010
expressed an unqualified opinion on those statements.
PricewaterhouseCoopers
LLP
Philadelphia, Pennsylvania
January 17, 2014
43
Other Fund information
(Unaudited)
Delaware Small
Cap Core Fund
Tax Information
The information set forth below is for the
Funds fiscal year as required by federal income tax laws. Shareholders,
however, must report distributions on a calendar year basis for income tax
purposes, which may include distributions for portions of two fiscal years of
the Fund. Accordingly, the information needed by shareholders for income tax
purposes will be sent to them in January of each year. Please consult your tax
advisor for proper treatment of this information.
All reporting is based on financial
information available as of the date of this annual report and, accordingly is
subject to change. For any and all items requiring reporting, it is the
intention of the Fund to report the maximum amount permitted under the Internal
Revenue Code and the regulations thereunder.
For the fiscal year ended Nov. 30, 2013,
the Fund reports distributions paid during the year as follows:
(A) Long-Term
Distributions (Tax Basis)
|
100.00
|
%
|
Total Distributions (Tax
Basis)
|
100.00
|
%
|
(A) is based on a percentage of the Funds
total distributions.
Board consideration of Delaware Small
Cap Core Fund investment advisory agreement
At a meeting held on August 20-22, 2013
(the Annual Meeting), the Board of Trustees (the Board), including a
majority of disinterested or independent Trustees, approved the renewal of the
Investment Advisory Agreement for Delaware Small Cap Core Fund (the Fund). In
making its decision, the Board considered information furnished at regular
quarterly Board meetings, including reports detailing Fund performance,
investment strategies and expenses, as well as information prepared specifically
in connection with the renewal of the investment advisory and sub-advisory
contracts. Information furnished specifically in connection with the renewal of
the Investment Advisory Agreement with Delaware Management Company (DMC)
included materials provided by DMC and its affiliates (Delaware Investments)
concerning, among other things, the nature, extent and quality of services
provided to the Fund, the costs of such services to the Fund, economies of scale
and the financial condition and profitability of Delaware Investments. In
addition, in connection with the Annual Meeting, reports were provided to the
Trustees in May 2013 and included reports provided by Lipper, Inc., an
independent statistical compilation organization (Lipper). The Lipper reports
compared the Funds investment performance and expenses with those of other
comparable mutual funds. The Independent Trustees reviewed and discussed the
Lipper reports with independent legal counsel to the Independent Trustees. The
Board requested and received information regarding DMCs policy with respect to
advisory fee levels and its breakpoint philosophy; the structure of portfolio
manager compensation; the investment managers profitability; comparative client
fee information; and any constraints or limitations on the availability of
securities for certain investment styles, which had in the past year inhibited,
or which were likely in the future to inhibit, DMCs ability to invest fully in
accordance with Fund policies.
44
In considering information relating to the
approval of the Funds advisory agreement, the Independent Trustees received
assistance and advice from and met separately with independent legal counsel to
the Independent Trustees. Although the Board gave attention to all information
furnished, the following discussion identifies, under separate headings, the
primary factors taken into account by the Board during its contract renewal
considerations.
Nature, Extent and Quality of
Service.
The Board considered the services
provided by Delaware Investments to the Fund and its shareholders. In reviewing
the nature, extent and quality of services, the Board considered reports
furnished to it throughout the year, which covered matters such as the relative
performance of the Fund, compliance of portfolio managers with the investment
policies, strategies and restrictions for the Fund, compliance by DMC and
Delaware Distributors, L.P. (together, Management) personnel with the Code of
Ethics adopted throughout the Delaware Investments Family of Funds complex and
adherence to fair value pricing procedures as established by the Board. The
Board was pleased with the current staffing of the Funds investment advisor and
the emphasis placed on research in the investment process. The Board recognized
DMCs recent receipt of several industry distinctions. The Board gave favorable
consideration to DMCs efforts to control expenditures while maintaining service
levels committed to fund matters. The Board noted that in July 2011 Management
implemented measures to reduce overall costs and improve transfer agent and
shareholder servicing functions through outsourcing. The Board noted the
benefits provided to Fund shareholders through each shareholders ability to
exchange an investment in one Delaware Investments fund for the same class of
shares in another Delaware Investments fund without a sales charge, to reinvest
Fund dividends into additional shares of the Fund or into additional shares of
other Delaware Investments funds and the privilege to combine holdings in other
Delaware Investments funds to obtain a reduced sales charge. The Board was
satisfied with the nature, extent and quality of the overall services provided
by Delaware Investments.
Investment Performance.
The Board placed significant emphasis on the investment
performance of the Fund in view of the importance of investment performance to
shareholders. Although the Board gave appropriate consideration to performance
reports and discussions with portfolio managers at Investment Committee meetings
throughout the year, the Board gave particular weight to the Lipper reports
furnished for the Annual Meeting. The Lipper reports prepared for the Fund
showed the investment performance of its Class A shares in comparison to a group
of similar funds as selected by Lipper (the Performance Universe). A fund with
the best performance ranked first, and a fund with the poorest performance
ranked last. The highest/best performing 25% of funds in the Performance
Universe make up the first quartile; the next 25%, the second quartile; the next
25%, the third quartile; and the poorest/worst performing 25% of funds in the
Performance Universe make up the fourth quartile. Comparative annualized
performance for the Fund was shown for the past one-, three- and five-year
periods ended March 31, 2013. The Boards objective is that the Funds
performance for the periods considered be at or above the median of its
Performance Universe. The following paragraph summarizes the performance results
for the Fund and the Boards view of such performance.
45
Other Fund
information
(Unaudited)
Delaware
Small Cap Core Fund
Board consideration of Delaware Small
Cap Core Fund investment advisory agreement (continued)
The Performance Universe for the Fund
consisted of the Fund and all retail and institutional small-cap core funds as
selected by Lipper. The Lipper report comparison showed that the Funds total
return for the one-year period was in the second quartile of its Performance
Universe. The report further showed that the Funds total return for the three-
and five-year periods was in the first quartile of its Performance Universe and
the Funds total return for the ten-year period was in the third quartile of its
Performance Universe. The Board was satisfied with performance.
Comparative Expenses.
The Board considered expense comparison data for the Delaware
Investments Family of Funds. Management provided the Board with information on
pricing levels and fee structures for the Fund as of its most recently completed
fiscal year. The Board also focused on the comparative analysis of effective
management fees and total expense ratios of the Fund versus effective management
fees and expense ratios of a group of similar funds as selected by Lipper (the
Expense Group). In reviewing comparative costs, the Funds contractual
management fee and the actual management fee incurred by the Fund were compared
with the contractual management fees (assuming all funds in the Expense Group
were similar in size to the Fund) and actual management fees (as reported by
each fund) within the Expense Group, taking into account any applicable
breakpoints and fee waivers. The Funds total expenses were also compared with
those of its Expense Group. The Lipper total expenses, for comparative
consistency, were shown by Lipper for Class A shares and comparative total
expenses including 12b-1 and non 12b-1 service fees. The Board considered fees
paid to Delaware Investments for non-management services. The Boards objective
is to limit the Funds total expense ratio to be competitive with that of the
Expense Group. The following paragraph summarizes the expense results for the
Fund and the Boards view of such expenses.
The expense comparisons for the Fund
showed that its actual management fee was in the quartile with the second lowest
expenses of its Expense Group and its total expenses were in the quartile with
the lowest expenses of its Expense Group. The Board was satisfied with the
management fee and total expenses of the Fund in comparison to those of its
Expense Group as shown in the Lipper report.
Management
Profitability.
The Board considered the level
of profits realized by Delaware Investments in connection with the operation of
the Fund. In this respect, the Board reviewed the Investment Management
Profitability Analysis that addressed the overall profitability of Delaware
Investments business in providing management and other services to each of the
individual funds and the Delaware Investments Family of Funds as a whole.
Specific attention was given to the methodology followed in allocating costs for
the purpose of determining profitability. Management stated that the level of
profits of Delaware Investments, to a certain extent, reflects recent
operational cost savings and efficiencies initiated by Delaware Investments. The
Board considered Delaware Investments efforts to improve services provided to
fund shareholders and to meet additional regulatory and compliance requirements
resulting from recent industry-wide Securities and Exchange Commission
initiatives. The Board also considered the extent to
46
which Delaware Investments might derive
ancillary benefits from fund operations, including the potential for procuring
additional business as a result of the prestige and visibility associated with
its role as service provider to the Delaware Investments Family of Funds and the
benefits from allocation of fund brokerage to improve trading efficiencies. The
Board found that the management fees were reasonable in light of the services
rendered and the level of profitability of Delaware Investments.
Economies of Scale.
The Trustees considered whether economies of scale are
realized by Delaware Investments as the Funds assets increase and the extent to
which any economies of scale are reflected in the level of management fees
charged. The Trustees reviewed the standardized advisory fee pricing and
structure, approved by the Board and shareholders, which includes breakpoints.
Breakpoints in the advisory fee occur when the advisory fee rate is reduced on
assets in excess of specified levels. Breakpoints result in a lower advisory fee
than would otherwise be the case on all assets when the asset levels specified
are exceeded. The Board noted that the fee under the Funds management contract
fell within the standard structure. Although the Fund has not reached a size at
which it can take advantage of breakpoints, the Board recognized that the fee
was structured so that when the Fund grows, economies of scale may be
shared.
47
Board of trustees/directors
and officers addendum
Delaware
Investments
®
Family of Funds
A mutual fund is governed by a
Board of Trustees/Directors (Trustees), which has oversight responsibility for
the management of a funds business affairs. Trustees establish procedures and
oversee and review the performance of the investment manager, the distributor,
and others who perform services for the fund. The independent fund trustees, in
particular, are advocates
Name, Address,
|
Position(s)
|
Length of
|
and Birth Date
|
Held with Fund(s)
|
Time Served
|
Interested Trustees
|
|
|
Patrick P. Coyne
1
|
Chairman, President,
|
Chairman and Trustee
|
2005 Market Street
|
Chief Executive Officer,
|
since August 16, 2006
|
Philadelphia, PA 19103
|
and Trustee
|
|
April 1963
|
|
President and
|
|
|
Chief Executive Officer
|
|
|
since August 1, 2006
|
|
Independent Trustees
|
|
|
Thomas L. Bennett
|
Trustee
|
Since March 2005
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
October 1947
|
|
|
Joseph W. Chow
|
Trustee
|
Since January 2013
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
January 1953
|
|
|
|
John A. Fry
|
Trustee
|
Since January 2001
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
May 1960
|
|
|
|
|
|
Anthony D. Knerr
|
Trustee
|
Since April 1990
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
December 1938
|
|
|
1
Patrick P. Coyne is considered to be an
Interested Trustee because he is an executive officer of the Funds(s)
investment advisor.
48
for shareholder interests.
Each trustee has served in that capacity since he or she was elected to or
appointed to the Board of Trustees, and will continue to serve until his or her
retirement or the election of a new trustee in his or her place. The following
is a list of the Trustees and Officers with certain background and related
information.
|
Number of Portfolios in
|
|
Principal Occupation(s)
|
Fund Complex Overseen
|
Other Directorships
|
During Past 5 Years
|
by Trustee or Officer
|
Held by Trustee or Officer
|
|
Patrick P. Coyne has served in
|
70
|
Director and Audit
|
various executive capacities
|
|
Committee Member
|
at different times at
|
|
Kaydon Corp.
|
Delaware Investments.
2
|
|
|
|
|
Board of Governors Member
|
|
|
Investment Company
|
|
|
Institute (ICI)
|
|
Private Investor
|
70
|
Director
|
(March 2004Present)
|
|
Bryn Mawr Bank Corp. (BMTC)
|
|
|
(20072011)
|
|
Executive Vice President
|
70
|
Director and Audit Committee
|
(Emerging Economies Strategies,
|
|
Member Hercules
|
Risk and Corporate Administration)
|
|
Technology Growth
|
State Street Corporation
|
|
Capital, Inc.
|
(July 2004March
2011)
|
|
|
President
|
70
|
Director Hershey Trust
|
Drexel University
|
|
|
(August 2010Present)
|
|
Director and Audit
|
|
|
Committee Member
|
President
|
|
Community Health Systems
|
Franklin & Marshall College
|
|
|
(July 2002July
2010)
|
|
|
Managing Director
|
70
|
None
|
AKA Strategy
|
|
|
(Strategic Consulting)
|
|
|
(1990Present)
|
|
|
2
Delaware Investments is the marketing name for
Delaware Management Holdings, Inc. and its subsidiaries, including the
Funds(s) investment advisor, principal underwriter, and its transfer
agent.
49
Board of
trustees/directors and officers addendum
Delaware Investments
®
Family of Funds
Name, Address,
|
Position(s)
|
Length of
|
and Birth Date
|
Held with Fund(s)
|
Time Served
|
Independent Trustees
(continued)
|
|
|
Lucinda S. Landreth
|
Trustee
|
Since March 2005
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
June 1947
|
|
|
Frances A. Sevilla-Sacasa
|
Trustee
|
Since September 2011
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
January 1956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas K. Whitford
|
Trustee
|
Since January 2013
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
March 1956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50
|
Number of Portfolios in
|
|
Principal Occupation(s)
|
Fund Complex Overseen
|
Other Directorships
|
During Past 5 Years
|
by Trustee or Officer
|
Held by Trustee or Officer
|
|
Private Investor
|
70
|
None
|
(2004Present)
|
|
|
|
|
Chief Executive Officer
|
70
|
Trust Manager and
|
Banco Itaú Europa
|
|
Audit Committee
|
International
|
|
Member Camden
|
(April 2012Present)
|
|
Property Trust
|
|
Executive Advisor to Dean
|
|
|
(August 2011March 2012)
|
|
|
and Interim Dean
|
|
|
(January 2011July 2011)
|
|
|
University of Miami School of
|
|
|
Business Administration
|
|
|
|
President U.S. Trust,
|
|
|
Bank of America Private
|
|
|
Wealth Management
|
|
|
(Private Banking)
|
|
|
(July 2007December
2008)
|
|
|
Vice Chairman
|
70
|
None
|
(2010April 2013)
|
|
|
Chief Administrative
|
|
|
Officer (20082010)
|
|
|
and Executive Vice
|
|
|
President and Chief
|
|
|
Administrative Officer
|
|
|
(20072009)
|
|
|
PNC Financial
|
|
|
Services Group
|
|
|
51
Board of
trustees/directors and officers addendum
Delaware Investments
®
Family of Funds
Name, Address,
|
Position(s)
|
Length of
|
and Birth Date
|
Held with Fund(s)
|
Time Served
|
Independent Trustees
(continued)
|
|
|
Janet L. Yeomans
|
Trustee
|
Since April 1999
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
July 1948
|
|
|
|
|
|
|
|
|
|
J. Richard Zecher
|
Trustee
|
Since March 2005
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
July 1940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52
|
Number of Portfolios in
|
|
Principal Occupation(s)
|
Fund Complex Overseen
|
Other Directorships
|
During Past 5 Years
|
by Trustee or Officer
|
Held by Trustee or Officer
|
|
Vice President and Treasurer
|
70
|
Director, Audit
|
(January 2006July 2012)
|
|
Committee Member and
|
Vice President Mergers &
Acquisitions
|
|
Investment Committee
|
(January 2003January 2006), and
|
|
Member
|
Vice President and Treasurer
|
|
Okabena Company
|
(July 1995January 2003)
|
|
|
3M Corporation
|
|
Chair 3M
|
|
|
Investment Management
|
|
|
Company
|
|
|
(20052012)
|
Founder
|
70
|
Director and Compensation
|
Investor Analytics
|
|
Committee Member
|
(Risk Management)
|
|
Investor Analytics
|
(May 1999Present)
|
|
|
|
|
Director P/E Investments
|
Founder
|
|
|
P/E Investments
|
|
|
(Hedge Fund)
|
|
|
(September
1996Present)
|
|
|
53
Board of
trustees/directors and officers addendum
Delaware Investments
®
Family of Funds
Name, Address,
|
Position(s)
|
Length of
|
and Birth Date
|
Held with Fund(s)
|
Time Served
|
Officers
|
|
|
David F. Connor
|
Senior Vice President,
|
Senior Vice President,
|
2005 Market Street
|
Deputy General
|
Deputy General Counsel
|
Philadelphia, PA 19103
|
Counsel, and Secretary
|
since May 2013;
|
December 1963
|
|
Vice President, Deputy
|
|
|
General Counsel
|
|
|
September 2000
|
|
|
May 2013; Secretary since
|
|
|
October 2005
|
Daniel V. Geatens
|
Vice President
|
Treasurer
|
2005 Market Street
|
and Treasurer
|
since October 2007
|
Philadelphia, PA 19103
|
|
|
October 1972
|
|
|
David P. OConnor
|
Executive Vice President,
|
Executive Vice President
|
2005 Market Street
|
General Counsel
|
since February 2012;
|
Philadelphia, PA 19103
|
and Chief Legal Officer
|
Senior Vice President
|
February 1966
|
|
October 2005
|
|
|
February 2012;
|
|
|
General Counsel and
|
|
|
Chief Legal Officer
|
|
|
since October
2005
|
Richard Salus
|
Senior Vice President
|
Chief Financial Officer
|
2005 Market Street
|
and Chief Financial Officer
|
since November 2006
|
Philadelphia, PA 19103
|
|
|
October 1963
|
|
|
The Statement of Additional
Information for the Fund(s) includes additional information about the Trustees
and Officers and is available, without charge, upon request by calling 800
523-1918.
54
|
Number of Portfolios in
|
|
Principal Occupation(s)
|
Fund Complex Overseen
|
Other Directorships
|
During Past 5 Years
|
by Trustee or Officer
|
Held by Trustee or Officer
|
|
David F. Connor has served as
|
70
|
None
3
|
Deputy General Counsel of
|
|
|
Delaware Investments
|
|
|
since 2000.
|
|
|
|
|
|
|
|
Daniel V. Geatens has served
|
70
|
None
3
|
in various capacities at
|
|
|
different times at
|
|
|
Delaware
Investments.
|
|
|
David P. OConnor has served in
|
70
|
None
3
|
various executive and legal
|
|
|
capacities at different times
|
|
|
at Delaware Investments.
|
|
|
|
|
|
|
Richard Salus has served in
|
70
|
None
3
|
various executive capacities
|
|
|
at different times at
|
|
|
Delaware Investments.
|
|
|
3
David F. Connor, Daniel V. Geatens, David P.
OConnor, and Richard Salus serve in similar capacities for the six portfolios
of the Optimum Fund Trust, which have the same investment advisor, principal
underwriter, and transfer agent as the registrant.
55
About the
organization
Board of
trustees
|
|
|
|
Patrick P.
Coyne
Chairman,
President, and
Chief Executive Officer
Delaware
Investments
®
Family of Funds
Philadelphia, PA
Thomas L.
Bennett
Private
Investor
Rosemont, PA
|
Joseph W.
Chow
Former Executive
Vice
President
State Street Corporation
Brookline, MA
John A.
Fry
President
Drexel
University
Philadelphia, PA
Anthony D.
Knerr
Founder and
Managing
Director
AKA Strategy
New York, NY
|
Lucinda S.
Landreth
Former Chief
Investment
Officer
Assurant, Inc.
Philadelphia, PA
Frances
A.
Sevilla-Sacasa
Chief Executive Officer
Banco Itaú
Europa
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
|
|
|
|
David F.
Connor
Senior Vice
President,
Deputy 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
|
David P.
OConnor
Executive Vice
President,
General Counsel,
and Chief Legal Officer
Delaware
Investments
Family of Funds
Philadelphia, PA
|
Richard
Salus
Senior Vice
President and
Chief Financial Officer
Delaware Investments
Family
of Funds
Philadelphia, PA
|
|
|
|
|
This annual report is
for the information of Delaware Small Cap Core Fund shareholders,
but it may be used with prospective investors when preceded or accompanied
by the Delaware 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 Funds 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 SECs 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 Funds Schedule of Investments are available
without charge on the Funds website at delawareinvestments.com. The
Funds Forms N-Q may be reviewed and copied at the SECs 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 Funds website at
delawareinvestments.com; and (ii) on the SECs website at
sec.gov.
|
56
Annual report
U.S. value equity
mutual fund
Delaware Small
Cap Value Fund
November
30, 2013
|
Carefully consider
the Funds investment objectives, risk factors, charges, and expenses
before investing. This and other information can be found in the Funds
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.
|
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 Small Cap Value 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 Small Cap Value
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
Portfolio management
review
|
|
1
|
Performance summary
|
|
4
|
Disclosure of Fund
expenses
|
|
8
|
Security type/sector allocation
and
|
|
|
top 10 equity holdings
|
|
10
|
Schedule of
investments
|
|
12
|
Statement of assets and
liabilities
|
|
18
|
Statement of
operations
|
|
20
|
Statements of changes in net
assets
|
|
22
|
Financial
highlights
|
|
24
|
Notes to financial statements
|
|
34
|
Report of independent
registered
|
|
|
public accounting
firm
|
|
44
|
Other Fund information
|
|
45
|
Board of
trustees/directors and
|
|
|
officers
addendum
|
|
50
|
About the organization
|
|
58
|
Unless otherwise noted, views expressed
herein are current as of Nov. 30, 2013, and subject to change.
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 Funds distributor,
Delaware Distributors, L.P.
Macquarie
Group refers to Macquarie Group Limited and its subsidiaries and affiliates
worldwide.
© 2013 Delaware Management Holdings,
Inc.
All third-party marks cited are the
property of their respective owners.
Portfolio management
review
|
|
Delaware Small Cap Value Fund
|
|
December 10,
2013
|
Performance preview (for the year ended
November 30, 2013)
|
|
|
|
|
|
Delaware Small Cap Value Fund (Class A
shares)
|
1-year return
|
|
+
|
32.87
|
%
|
Russell 2000
®
Value Index
(benchmark)
|
1-year return
|
|
+
|
37.60
|
%
|
Past performance does not guarantee
future results.
For complete, annualized
performance for Delaware Small Cap Value Fund, please see the table on page 4.
The performance of Class A shares excludes
the applicable sales charge and reflects the reinvestment of all
distributions.
Index performance returns do not reflect any management fees,
transaction costs, or expenses. Indices are unmanaged and one cannot invest
directly in an index.
Small-cap value stocks pushed higher
during the Funds fiscal year ended Nov. 30, 2013, propelled by a relaxation of
financial tensions in Europe, continued economic growth in the United States,
and the perception that the Federal Reserve stood ready to cushion any potential
downturn with additional billions of newly minted dollars.
The sharp gains came despite fiscal
headwinds and political dysfunction, including worries about the perceived
so-called fiscal cliff, a sizeable budgetary sequester, a 16-day government
shutdown, and the threat of a first-ever default on the national debt. In spite
of these potential headwinds, smaller stocks outperformed their large- and
mid-sized cousins by a significant margin during the Funds fiscal year (source:
Bloomberg).
Although there were hints that the Fed
might soon remove the monetary punchbowl delivered first by Fed Chairman Ben
Bernanke in May 2013 and repeated by various Fed officials over subsequent weeks
quantitative easing (QE), remained in full-force through the end of the Funds
fiscal year. The rally picked up steam after mid-September when the Fed pleased
the financial markets by declining to taper its monthly bond-buying program.
President Barack Obamas nomination of Janet Yellen to succeed Ben Bernanke as
Fed chair in January 2014
further bolstered the
bullish mood, given that Yellen is widely viewed as relatively dovish on
monetary policy where it concerns employment and inflation.
Though economic growth remained generally
lackluster during the fiscal period, there were few signs of recession.
Unemployment also drifted lower, albeit at glacial speed, while corporate
profits mostly beat modest expectations.
Fund performance
For the fiscal year ended Nov. 30, 2013, Delaware Small Cap
Value Fund (Class A shares) returned +32.87% at net asset value (NAV) and
+25.22% at maximum offer price (both figures reflect all distributions
reinvested). The Fund underperformed its benchmark, the Russell 2000 Value
Index, which returned +37.60% for the same period. Complete annualized
performance for Delaware Small Cap Value Fund is shown in the table on page
4.
In the mostly risk-on mindset that
prevailed during the fiscal year, the Fund benefited from the decision to
underweight real estate investment trusts (REITs) and defensive stocks in
general. The Funds allocation to the capital spending and consumer services
sectors also contributed to relative performance, although the Funds stock
selection within the consumer group was
1
Portfolio management
review
Delaware Small Cap Value Fund
subpar. We maintained a relatively neutral
weighting to the strong-performing domestic banks sector, and stock selection
within this group further boosted relative performance.
However, our lack of exposure to asset
management companies with the notable exception of
Boston Private Financial Holdings
detracted from relative performance, as did our ongoing underweight to what we
viewed as highly leveraged and lower-quality stocks.
Finally, although biotechnology companies represented only a small
portion of the Funds benchmark, the Funds total lack of exposure to the
industry negatively affected relative performance. It is important to note,
however, that most biotechnology companies generally have little or no earnings
and only qualify for inclusion in a value index on the basis of the
price-to-book value metric. Similarly, it has been the policy of the Fund to
minimize exposure to companies with higher levels of debt. Finally, the
technology sector detracted from Fund performance due to a more defensive stock
selection within a normally high-beta group.
Among individual securities, the Funds
allocation to
East West
Bancorp
contributed positively to the Funds
relative performance. The California-based company is a full-service commercial
bank with customers located throughout the U.S. and China. Its stock performed
quite well during the fiscal year amid two dividend increases, a share
repurchase program, and solid loan growth. The Fund held shares of East West
Bancorp during the full fiscal year and continues to do so.
The Fund also benefited from its holdings
in
Saia
, a
Georgia-based trucking company that experienced strong revenue and earnings
increases while it implemented cost controls. The
stock more than doubled during the fiscal year as the successful implementation
of those controls allowed for significant earnings gains despite relatively
modest revenue growth. Although the Fund continues to hold Saia shares, we
scaled back the Funds position in recent months.
Chicago Bridge &
Iron
, an engineering and construction firm
with significant exposure to the energy sector, also boosted relative returns.
The company benefited from its acquisition of The Shaw Group in a deal that, in
our view, provided valuable synergies. The Fund held the stock entering the
fiscal year and we used the near-doubling of its share price to reduce the
Funds position during the latter part of 2013.
The largest detractor from the Funds performance during the fiscal year
was
Cirrus Logic
, in part because of an overweight allocation to the stock. The company
is heavily dependent on its main customer, Apple, which has insisted on price
concessions from major suppliers. Because of this and other concerns over
Apples longer-term growth profile the share fell, shares of Cirrus Logic fell
sharply during the first half of the fiscal year. While Cirrus continued to
have, in our view, a solid balance sheet and free cash flow, many investors
nonetheless discounted a lowering of earnings expectations in coming quarters.
The stock has rebounded not coincidentally, along with Apple from its
midsummer lows; therefore, we continue to hold its shares in the
Fund.
Womens apparel retailer
Stage Stores
also detracted
from relative performance. Though management achieved considerable success in
getting the companys finances in order,
2
same-store sales were slightly off during
the spring and summer earnings reporting seasons, triggering a sharp selloff in
its stock. (Given the broad-based nature of the current bull market, most
disappointed investors have not been willing to linger.) At current levels,
however, we view Stage Stores as having potential to be a solid long-term
holding and recently added to the Funds position.
Finally,
Education Realty Trust
, a
student-housing REIT, also detracted from Fund performance. The company reported
solid earnings growth, but its shares nonetheless were painted with the same
negative brush that tarnished the REIT industry in general. An earnings
shortfall at a major competitor gave investors another reason to look outside
the industry. Despite its negative effect on the Funds relative performance,
the decline in shares of Education Realty Trust was modest in nominal terms, and
the Fund continues to hold the shares.
At the end of the fiscal year, the Fund
maintained its procyclical tilt, which translated into overweight positions in
basic industries, capital spending, consumer services, and technology, with
corresponding underweights in utilities, REITs, and consumer staples. We also
continue to apply our traditional higher-quality bias to the Funds portfolio,
with a particular emphasis on companies that, in our opinion, have potential to
generate free cash flow, appear to be in a position to raise their dividend or
buyback shares, and exhibit disciplined capital spending and acquisition
strategies. Also in accordance with the Funds long-held preferences, we
continue to underweight companies that, in our view, are excessively
levered.
3
Performance summary
|
|
Delaware Small Cap Value Fund
|
November 30,
2013
|
The performance data quoted represent
past performance; past performance does not guarantee future results. Investment
return and principal value will fluctuate so your shares, when redeemed, may be
worth more or less than their original cost. Please obtain the performance data
current for the most recent month end by calling 800 523-1918 or visiting our
website at delawareinvestments.com/performance. Current performance may be lower
or higher than the performance data quoted.
Fund and benchmark
performance
1,2
|
|
Average annual total returns through
November 30, 2013
|
|
|
1 year
|
|
5 years
|
|
10 years
|
Class A (Est. June 24, 1987)
|
|
|
|
|
|
|
Excluding sales charge
|
|
+32.87%
|
|
+21.14%
|
|
+9.54%
|
Including sales charge
|
|
+25.22%
|
|
+19.71%
|
|
+8.90%
|
Class B (Est. Sept. 6, 1994)
|
|
|
|
|
|
|
Excluding sales charge
|
|
+31.97%
|
|
+20.25%
|
|
+8.90%
|
Including sales
charge
|
|
+27.97%
|
|
+20.04%
|
|
+8.90%
|
Class C (Est. Nov. 29, 1995)
|
|
|
|
|
|
|
Excluding sales charge
|
|
+31.93%
|
|
+20.23%
|
|
+8.74%
|
Including sales charge
|
|
+30.93%
|
|
+20.23%
|
|
+8.74%
|
Class R (Est. June 2, 2003)
|
|
|
|
|
|
|
Excluding sales charge
|
|
+32.55%
|
|
+20.84%
|
|
+9.27%
|
Including sales
charge
|
|
+32.55%
|
|
+20.84%
|
|
+9.27%
|
Institutional Class (Est. Nov. 9,
1992)
|
|
|
|
|
|
|
Excluding sales charge
|
|
+33.22%
|
|
+21.44%
|
|
+9.83%
|
Including sales charge
|
|
+33.22%
|
|
+21.44%
|
|
+9.83%
|
Russell 2000 Value
Index
|
|
+37.60%
|
|
+18.60%
|
|
+8.79%
|
1
Returns reflect the
reinvestment of all distributions and are presented both with and without the
applicable sales charges described below. Returns do not reflect the deduction
of taxes the shareholder would pay on Fund distributions or redemptions of Fund
shares.
Expense limitations were in effect for certain classes during some or
all of the periods shown in the Fund performance chart. Expenses for each
class are listed on the Fund expense ratios table on page 5. Performance would
have been lower had expense limitations not been in effect.
Class A shares are sold with a maximum
front-end sales charge of 5.75%, and have an annual distribution and service fee
of 0.25% of average daily net assets. Prior to Oct. 1, 2013, Class A shares had
an annual distribution and service fee of 0.30% of average daily net assets.
This fee was contractually limited to 0.25% during the period from Dec. 1, 2012
until Oct. 1, 2013. Performance for Class A shares, excluding sales charges,
assumes that no front-end sales charge applied.
4
Class B shares may be purchased only
through dividend reinvestment and certain permitted exchanges as described in
the prospectus. Please see the prospectus for additional information on Class B
shares. Class B shares have a contingent deferred sales charge that declines
from 4.00% to zero depending on the period of time the shares are held. They are
also subject to an annual distribution and service fee of 1.00% of average daily
net assets. This fee has been contractually limited to 0.25% of average daily
net assets from Nov. 1, 2013, through Oct. 31, 2014. Class B shares will
automatically convert to Class A shares on a quarterly basis approximately eight
years after purchase. Ten-year performance figures for Class B shares reflect
conversion to Class A shares after approximately eight years.
Class C shares are sold with a contingent
deferred sales charge of 1.00% if redeemed during the first 12 months. They are
also subject to an annual distribution and service fee of 1.00% of average daily
net assets.
Performance for Class B and C shares,
excluding sales charges, assumes either that contingent deferred sales charges
did not apply or that the investment was not redeemed.
Class R shares are available only for
certain retirement plan products. They are sold without a sales charge and have
an annual distribution and service fee of 0.50% of average daily net assets.
Prior to Oct. 1, 2013, Class R shares had an annual distribution and service fee
of 0.60% of average daily net assets. This fee was contractually limited to
0.50% during the period from Dec. 1, 2012 until Oct. 1, 2013.
Institutional Class shares are available
without sales or asset-based distribution charges only to certain eligible
institutional accounts.
The Fund performance
table and the Performance of a $10,000 investment graph do not reflect the
deduction of taxes the shareholder would pay on Fund distributions or
redemptions of Fund shares.
Investments in small and/or medium-sized
companies typically exhibit greater risk and higher volatility than larger, more
established companies.
2
The Funds expense ratios, as
described in the most recent prospectus and any applicable supplement(s), are
disclosed in the following Fund expense ratios table.
Fund expense
ratios
|
|
Class A
|
|
Class B
|
|
Class C
|
|
Class R
|
|
Institutional
Class
|
Total annual operating expenses
|
|
1.32
|
%
|
|
1.32
|
%
|
|
2.07
|
%
|
|
1.57
|
%
|
|
1.07
|
%
|
(without fee waivers)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
expenses
|
|
1.32
|
%
|
|
1.32
|
%
|
|
2.07
|
%
|
|
1.57
|
%
|
|
1.07
|
%
|
(including fee waivers, if any)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Type of
waiver
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
5
Performance summary
Delaware Small Cap Value Fund
Performance of a $10,000
investment
1
Average annual
total returns from Nov. 30, 2003, through Nov. 30, 2013
For period beginning Nov. 30,
2003, through Nov. 30, 2013
|
|
Starting
value
|
|
Ending
value
|
|
|
Delaware Small Cap
Value Fund Class A shares
|
|
$
|
9,425
|
|
|
$
|
23,450
|
|
|
|
Russell 2000 Value Index
|
|
$
|
10,000
|
|
|
$
|
23,218
|
|
1
The Performance of a $10,000
investment graph assumes $10,000 invested in Class A shares of the Fund on Nov.
30, 2003, and includes the effect of a 5.75% front-end sales charge and the
reinvestment of all distributions. The graph does not reflect the deduction of
taxes the shareholders would pay on Fund distributions or redemptions of Fund
shares. Expense limitations were in effect for some or all of the periods shown.
Performance would have been lower had expense limitations not been in effect.
Expenses are listed in the Fund expense ratios table on page 5. Please note
additional details on pages 4 through 6.
The chart also assumes $10,000 invested in
the Russell 2000 Value Index as of Nov. 30, 2003.
The Russell 2000 Value Index measures the
performance of the small-cap value segment of the U.S. equity universe. It
includes those Russell 2000 companies with lower price-to-book ratios and lower
forecasted growth values.
Index performance returns do not reflect
any management fees, transaction costs, or expenses. Indices are unmanaged and
one cannot invest directly in an index. Past performance is not a guarantee of
future results.
Performance of other Fund classes will
vary due to different charges and expenses.
|
|
Nasdaq
symbols
|
|
CUSIPs
|
|
Class A
|
|
|
DEVLX
|
|
246097109
|
|
Class B
|
|
|
DEVBX
|
|
246097307
|
|
Class C
|
|
|
DEVCX
|
|
246097406
|
|
Class R
|
|
|
DVLRX
|
|
246097505
|
|
Institutional Class
|
|
|
DEVIX
|
|
246097208
|
|
6
Disclosure of Fund
expenses
For the six-month period from June 1,
2013 to November 30, 2013 (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 June 1, 2013 to Nov. 30, 2013.
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 Funds actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Funds
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 Funds expenses shown in the table reflect fee
waivers in effect. The expenses shown in the table assume reinvestment of all
dividends and distributions.
8
Delaware Small Cap Value
Fund
Expense analysis of an investment
of $1,000
|
|
Beginning
|
|
Ending
|
|
|
|
|
|
Expenses
|
|
|
Account
Value
|
|
Account
Value
|
|
Annualized
|
|
Paid During
Period
|
|
|
6/1/13
|
|
11/30/13
|
|
Expense Ratio
|
|
6/1/13 to 11/30/13*
|
Actual Fund return
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
$
|
1,000.00
|
|
|
$
|
1,130.40
|
|
|
1.26
|
%
|
|
|
$
|
6.73
|
|
Class B
|
|
|
1,000.00
|
|
|
|
1,126.80
|
|
|
1.93
|
%
|
|
|
|
10.29
|
|
Class C
|
|
|
1,000.00
|
|
|
|
1,126.40
|
|
|
2.01
|
%
|
|
|
|
10.71
|
|
Class R
|
|
|
1,000.00
|
|
|
|
1,129.10
|
|
|
1.51
|
%
|
|
|
|
8.06
|
|
Institutional Class
|
|
|
1,000.00
|
|
|
|
1,131.90
|
|
|
1.01
|
%
|
|
|
|
5.40
|
|
Hypothetical 5% return
(5% return before
expenses)
|
|
|
|
|
|
|
|
|
|
Class A
|
|
$
|
1,000.00
|
|
|
$
|
1,018.75
|
|
|
1.26
|
%
|
|
|
$
|
6.38
|
|
Class B
|
|
|
1,000.00
|
|
|
|
1,015.39
|
|
|
1.93
|
%
|
|
|
|
9.75
|
|
Class C
|
|
|
1,000.00
|
|
|
|
1,014.99
|
|
|
2.01
|
%
|
|
|
|
10.15
|
|
Class R
|
|
|
1,000.00
|
|
|
|
1,017.50
|
|
|
1.51
|
%
|
|
|
|
7.64
|
|
Institutional Class
|
|
|
1,000.00
|
|
|
|
1,020.00
|
|
|
1.01
|
%
|
|
|
|
5.11
|
|
*
Expenses Paid During Period are equal to the Funds annualized expense
ratio, multiplied by the average account value over the period, multiplied by
183/365 (to reflect the one-half year period).
|
Because
actual returns reflect only the most recent six month period, the returns shown
may differ significantly from fiscal year returns.
|
9
Security type/sector allocation and
top
10 equity holdings
Delaware Small Cap Value Fund
|
As of November 30, 2013
(Unaudited)
|
Sector designations may be different than
the sector designations presented in other Fund materials. The sector
designations may represent the investment managers internal sector
classifications, which may result in the sector designations for one fund being
different than another funds sector designations.
Security
type/sector
|
|
Percentage of net assets
|
Common Stock
|
|
96.46
|
%
|
Basic Industry
|
|
10.11
|
%
|
Business Services
|
|
1.27
|
%
|
Capital Spending
|
|
10.42
|
%
|
Consumer Cyclical
|
|
3.70
|
%
|
Consumer Services
|
|
10.82
|
%
|
Consumer Staples
|
|
0.41
|
%
|
Energy
|
|
7.35
|
%
|
Financial Services
|
|
20.87
|
%
|
Healthcare
|
|
7.01
|
%
|
Real Estate
|
|
6.05
|
%
|
Technology
|
|
13.47
|
%
|
Transportation
|
|
2.74
|
%
|
Utilities
|
|
2.24
|
%
|
Exchange-Traded Fund
|
|
1.01
|
%
|
Short-Term Investments
|
|
2.71
|
%
|
Total Value of Securities
|
|
100.18
|
%
|
Liabilities Net of Receivables and Other Assets
|
|
(0.18
|
%)
|
Total Net Assets
|
|
100.00
|
%
|
10
Holdings are for informational purposes
only and are subject to change at any time. They are not a recommendation to
buy, sell, or hold any security.
Top 10 equity
holdings
|
Percentage of net assets
|
United Rentals
|
3.31
|
%
|
East West Bancorp
|
2.43
|
%
|
Whiting Petroleum
|
2.39
|
%
|
Platinum Underwriters Holdings
|
1.78
|
%
|
Fuller (H.B.)
|
1.77
|
%
|
Chemtura
|
1.66
|
%
|
Hancock Holding
|
1.61
|
%
|
Helix Energy Solutions Group
|
1.60
|
%
|
Synopsys
|
1.60
|
%
|
Chicago Bridge &
Iron
|
1.54
|
%
|
11
Schedule of investments
|
|
Delaware Small Cap Value Fund
|
November 30, 2013
|
|
|
Number of
shares
|
|
Value
|
Common
Stock 96.46%
|
|
|
|
|
|
|
Basic Industry 10.11%
|
|
|
|
|
|
|
|
Albemarle
|
|
403,100
|
|
|
$
|
27,697,001
|
|
Berry Plastics Group
|
|
1,168,000
|
|
|
|
25,053,600
|
|
Chemtura
|
|
1,430,100
|
|
|
|
37,754,640
|
|
Cytec Industries
|
|
322,100
|
|
|
|
28,821,508
|
|
Fuller (H.B.)
|
|
786,400
|
|
|
|
40,287,272
|
|
Glatfelter
|
|
717,400
|
|
|
|
20,080,026
|
|
Kaiser Aluminum
|
|
442,027
|
|
|
|
29,757,258
|
|
Olin
|
|
617,100
|
|
|
|
15,322,593
|
|
Valspar
|
|
77,700
|
|
|
|
5,486,397
|
|
|
|
|
|
|
|
230,260,295
|
Business Services 1.27%
|
|
|
|
|
|
|
|
Brinks
|
|
390,900
|
|
|
|
13,106,877
|
|
United Stationers
|
|
350,618
|
|
|
|
15,770,798
|
|
|
|
|
|
|
|
28,877,675
|
Capital Spending 10.42%
|
|
|
|
|
|
|
|
Actuant Class A
|
|
574,900
|
|
|
|
22,467,092
|
@
|
Altra Holdings
|
|
753,114
|
|
|
|
22,879,603
|
|
Chicago Bridge & Iron
|
|
458,800
|
|
|
|
35,180,784
|
|
EnPro Industries
|
|
229,800
|
|
|
|
13,006,680
|
|
ITT
|
|
803,500
|
|
|
|
32,798,870
|
|
Regal Beloit
|
|
330,000
|
|
|
|
24,281,400
|
|
Thermon Group Holdings
|
|
398,600
|
|
|
|
11,479,680
|
|
United Rentals
|
|
1,096,200
|
|
|
|
75,341,826
|
|
|
|
|
|
|
|
237,435,935
|
Consumer Cyclical 3.70%
|
|
|
|
|
|
|
|
Barnes Group
|
|
467,500
|
|
|
|
17,063,750
|
|
Dana Holdings
|
|
982,800
|
|
|
|
19,931,184
|
|
Knoll
|
|
656,700
|
|
|
|
11,656,425
|
|
Meritage Homes
|
|
554,500
|
|
|
|
24,165,110
|
|
Standard Motor Products
|
|
333,000
|
|
|
|
11,561,760
|
|
|
|
|
|
|
|
84,378,229
|
Consumer Services 10.82%
|
|
|
|
|
|
|
|
Big Lots
|
|
491,400
|
|
|
|
18,835,362
|
|
Brinker International
|
|
296,700
|
|
|
|
13,953,801
|
@
|
Cato Class A
|
|
692,600
|
|
|
|
23,576,104
|
|
CEC
Entertainment
|
|
190,400
|
|
|
|
9,129,680
|
|
Cheesecake Factory
|
|
453,900
|
|
|
|
22,127,625
|
12
|
|
Number of
shares
|
|
Value
|
Common
Stock
(continued)
|
|
|
|
|
|
|
Consumer Services
(continued)
|
|
|
|
|
|
|
|
Finish Line Class A
|
|
745,500
|
|
|
$
|
19,688,655
|
|
Genesco
|
|
213,100
|
|
|
|
15,963,321
|
|
Guess
|
|
248,800
|
|
|
|
8,523,888
|
|
Hanesbrands
|
|
325,900
|
|
|
|
22,845,590
|
|
Madden (Steven)
|
|
423,150
|
|
|
|
16,485,924
|
|
Meredith
|
|
367,000
|
|
|
|
19,575,780
|
|
Pier 1 Imports
|
|
643,200
|
|
|
|
14,336,928
|
|
Rent-A-Center
|
|
395,100
|
|
|
|
13,457,106
|
|
Stage Stores
|
|
647,100
|
|
|
|
13,595,571
|
|
Texas Roadhouse
|
|
509,200
|
|
|
|
14,247,416
|
|
|
|
|
|
|
|
246,342,751
|
Consumer Staples 0.41%
|
|
|
|
|
|
|
|
Pinnacle Foods
|
|
335,500
|
|
|
|
9,256,445
|
|
|
|
|
|
|
|
9,256,445
|
Energy 7.35%
|
|
|
|
|
|
|
|
Helix Energy Solutions Group
|
|
1,642,000
|
|
|
|
36,468,820
|
|
Jones Energy
|
|
437,100
|
|
|
|
6,316,095
|
|
Patterson-UTI Energy
|
|
1,233,900
|
|
|
|
28,762,209
|
|
Southwest Gas
|
|
528,000
|
|
|
|
28,015,680
|
|
Stone Energy
|
|
406,663
|
|
|
|
13,452,412
|
|
Whiting Petroleum
|
|
901,800
|
|
|
|
54,468,720
|
|
|
|
|
|
|
|
167,483,936
|
Financial Services 20.87%
|
|
|
|
|
|
|
|
Bank
of Hawaii
|
|
555,700
|
|
|
|
32,869,655
|
|
Boston Private Financial Holdings
|
|
1,420,700
|
|
|
|
16,899,227
|
@
|
Community Bank System
|
|
778,100
|
|
|
|
30,236,966
|
|
CVB Financial
|
|
537,200
|
|
|
|
8,670,408
|
|
East
West Bancorp
|
|
1,612,123
|
|
|
|
55,263,575
|
|
First Financial Bancorp
|
|
1,146,600
|
|
|
|
18,953,298
|
|
First Midwest Bancorp
|
|
974,500
|
|
|
|
17,891,820
|
|
Hancock Holding
|
|
1,041,500
|
|
|
|
36,660,800
|
@
|
Independent Bank
|
|
622,900
|
|
|
|
23,776,093
|
@
|
Infinity Property & Casualty
|
|
293,082
|
|
|
|
20,911,401
|
|
Main
Street Capital
|
|
490,100
|
|
|
|
16,148,795
|
@
|
NBT Bancorp
|
|
929,700
|
|
|
|
24,107,121
|
|
Platinum Underwriters Holdings
|
|
640,100
|
|
|
|
40,582,340
|
|
ProAssurance
|
|
129,900
|
|
|
|
6,245,592
|
@
|
S&T Bancorp
|
|
495,300
|
|
|
|
13,031,343
|
13
Schedule of
investments
Delaware
Small Cap Value Fund
|
|
Number of
shares
|
|
Value
|
Common
Stock
(continued)
|
|
|
|
|
|
|
Financial Services
(continued)
|
|
|
|
|
|
|
@
|
Selective Insurance Group
|
|
1,101,600
|
|
|
$
|
31,054,104
|
|
StanCorp Financial Group
|
|
198,000
|
|
|
|
12,693,780
|
|
Validus Holdings
|
|
470,884
|
|
|
|
18,858,904
|
|
Webster Financial
|
|
1,046,600
|
|
|
|
30,853,768
|
@
|
WesBanco
|
|
620,900
|
|
|
|
19,558,350
|
|
|
|
|
|
|
|
475,267,340
|
Healthcare 7.01%
|
|
|
|
|
|
|
|
Cooper
|
|
113,300
|
|
|
|
14,926,142
|
|
Haemonetics
|
|
474,300
|
|
|
|
20,043,918
|
|
Owens & Minor
|
|
509,900
|
|
|
|
19,462,883
|
|
Service Corp. International
|
|
1,318,200
|
|
|
|
23,819,874
|
|
STERIS
|
|
495,700
|
|
|
|
22,871,598
|
|
Teleflex
|
|
276,900
|
|
|
|
27,222,039
|
|
Universal Health Services Class B
|
|
166,300
|
|
|
|
13,708,109
|
|
VCA Antech
|
|
585,000
|
|
|
|
17,520,750
|
|
|
|
|
|
|
|
159,575,313
|
Real Estate 6.05%
|
|
|
|
|
|
|
|
Alexander & Baldwin
|
|
450,200
|
|
|
|
17,013,058
|
|
Brandywine Realty Trust
|
|
1,490,637
|
|
|
|
19,795,659
|
|
Education Realty Trust
|
|
1,345,300
|
|
|
|
11,704,110
|
|
Healthcare Realty Trust
|
|
577,700
|
|
|
|
12,784,501
|
|
Highwoods Properties
|
|
560,300
|
|
|
|
20,125,976
|
|
Lexington Realty Trust
|
|
1,798,900
|
|
|
|
18,474,703
|
|
Ramco-Gershenson Properties Trust
|
|
844,289
|
|
|
|
13,508,624
|
|
Summit Hotel Properties
|
|
1,041,700
|
|
|
|
9,458,636
|
|
Washington Real Estate Investment Trust
|
|
628,300
|
|
|
|
14,915,842
|
|
|
|
|
|
|
|
137,781,109
|
Technology 13.47%
|
|
|
|
|
|
|
@
|
Black Box
|
|
223,813
|
|
|
|
6,269,002
|
|
Brocade Communications Systems
|
|
2,897,700
|
|
|
|
25,470,783
|
|
Cirrus Logic
|
|
978,600
|
|
|
|
19,748,148
|
|
CommScope Holding
|
|
889,500
|
|
|
|
14,312,055
|
|
Compuware
|
|
2,407,000
|
|
|
|
26,452,930
|
|
Electronics for Imaging
|
|
502,700
|
|
|
|
19,906,920
|
|
Netscout Systems
|
|
551,900
|
|
|
|
16,794,317
|
|
ON
Semiconductor
|
|
3,226,800
|
|
|
|
22,878,012
|
@
|
Premiere Global Services
|
|
962,850
|
|
|
|
8,983,391
|
|
PTC
|
|
889,200
|
|
|
|
28,934,568
|
14
|
|
Number of shares
|
|
Value
|
Common
Stock
(continued)
|
|
|
|
|
|
|
Technology
(continued)
|
|
|
|
|
|
|
|
RF Micro Devices
|
|
1,932,600
|
|
|
$
|
10,204,128
|
|
Synopsys
|
|
994,900
|
|
|
|
36,443,187
|
|
Tech Data
|
|
407,400
|
|
|
|
21,119,616
|
|
Teradyne
|
|
1,207,300
|
|
|
|
20,560,319
|
|
Vishay Intertechnology
|
|
2,229,300
|
|
|
|
28,824,849
|
|
|
|
|
|
|
|
306,902,225
|
Transportation 2.74%
|
|
|
|
|
|
|
|
Kirby
|
|
163,700
|
|
|
|
15,461,465
|
|
Matson
|
|
499,900
|
|
|
|
12,512,497
|
|
Saia
|
|
393,950
|
|
|
|
13,681,884
|
|
Werner Enterprises
|
|
862,200
|
|
|
|
20,753,154
|
|
|
|
|
|
|
|
62,409,000
|
Utilities 2.24%
|
|
|
|
|
|
|
|
Black Hills
|
|
349,800
|
|
|
|
17,584,446
|
|
El Paso Electric
|
|
432,900
|
|
|
|
15,597,387
|
|
NorthWestern
|
|
405,000
|
|
|
|
17,811,900
|
|
|
|
|
|
|
|
50,993,733
|
Total Common Stock
(cost $1,655,630,332)
|
|
|
|
|
|
2,196,963,986
|
|
|
Exchange-Traded Fund 1.01%
|
|
|
|
|
|
|
|
iShares Russell 2000 Value Index Fund
|
|
234,700
|
|
|
|
23,035,805
|
Total Exchange-Traded Fund
(cost $20,270,185)
|
|
|
|
|
|
23,035,805
|
|
|
|
|
Principal amount
|
|
|
|
Short-Term Investments 2.71%
|
|
|
|
|
|
|
≠
Discount Note
0.04%
|
|
|
|
|
|
|
|
Federal Home Loan Bank 0.05%
12/27/13
|
$
|
962,719
|
|
|
|
962,712
|
|
|
|
|
|
|
|
962,712
|
Repurchase Agreements 1.51%
|
|
|
|
|
|
|
|
Bank
of America 0.04%, dated 11/29/13, to be
|
|
|
|
|
|
|
|
repurchased on 12/2/13, repurchase price
|
|
|
|
|
|
|
|
$6,348,098 (collateralized by U.S. government
|
|
|
|
|
|
|
|
obligations 0.375%-1.875% 11/15/14-6/30/15;
|
|
|
|
|
|
|
|
market value $6,475,053)
|
|
6,348,091
|
|
|
|
6,348,091
|
15
Schedule of investments
Delaware Small Cap Value Fund
|
|
Principal amount
|
|
Value
|
Short-Term Investments
(continued)
|
|
|
|
|
|
Repurchase Agreements
(continued)
|
|
|
|
|
|
BNP Paribas 0.06%, dated 11/29/13, to be
|
|
|
|
|
|
repurchased on 12/2/13, repurchase price
|
|
|
|
|
|
$27,983,956 (collateralized by U.S. government
|
|
|
|
|
|
obligations 0.625%-2.625% 6/30/14-11/30/19;
|
|
|
|
|
|
market value $28,543,588)
|
|
$27,983,909
|
|
$
|
27,983,909
|
|
|
|
|
|
34,332,000
|
≠U.S. Treasury
Obligations 1.16%
|
|
|
|
|
|
U.S. Treasury Bills
|
|
|
|
|
|
0.02% 12/19/13
|
|
7,974,918
|
|
|
7,974,870
|
0.033% 1/23/14
|
|
8,376,977
|
|
|
8,376,843
|
0.065% 4/24/14
|
|
10,052,373
|
|
|
10,048,824
|
|
|
|
|
|
26,400,537
|
Total Short-Term
Investments
(cost $61,695,858)
|
|
|
|
|
61,695,249
|
|
Total Value of Securities
100.18%
|
|
|
|
|
|
(cost $1,737,596,375)
|
|
|
|
$
|
2,281,695,040
|
|
Non income producing
security.
|
@
|
Illiquid security. At Nov. 30,
2013, the aggregate value of illiquid securities was $224,383,478, which
represented 9.85% of the Funds net assets. See Note 9 in Notes to
Financial Statements.
|
≠
|
The rate shown is the effective
yield at the time of purchase.
|
See accompanying notes, which are an
integral part of the financial statements.
16
Statement of assets and
liabilities
|
|
Delaware Small Cap Value Fund
|
November 30,
2013
|
Assets:
|
|
|
Investments, at
value
1
|
$
|
2,219,999,791
|
Short-term investments,
at value
2
|
|
61,695,249
|
Receivable for
securities sold
|
|
4,972,582
|
Receivable for fund
shares sold
|
|
5,137,771
|
Dividends and interest
receivable
|
|
2,675,413
|
Total assets
|
|
2,294,480,806
|
|
Liabilities:
|
|
|
Cash overdraft
|
|
8,348,774
|
Payable for securities
purchased
|
|
3,452,391
|
Payable for fund shares
redeemed
|
|
2,415,417
|
Investment management
fees payable
|
|
1,244,832
|
Distribution fees
payable to affiliates
|
|
288,650
|
Trustees fees and
expenses payable
|
|
15,046
|
Other affiliates
payable
|
|
260,272
|
Other accrued
expenses
|
|
855,846
|
Total
liabilities
|
|
16,881,228
|
|
Total Net Assets
|
$
|
2,277,599,578
|
|
Net Assets Consist of:
|
|
|
Paid-in
capital
|
$
|
1,684,272,298
|
Undistributed net
investment income
|
|
3,147,895
|
Accumulated net realized
gain on investments
|
|
46,080,720
|
Net unrealized
appreciation of investments
|
|
544,098,665
|
Total Net
Assets
|
$
|
2,277,599,578
|
|
1
Investments, at cost
|
$
|
1,675,900,517
|
2
Short-term investments,
at cost
|
|
61,695,858
|
18
Net Asset Value
Class
A
|
|
|
Net assets
|
$
|
884,026,228
|
Shares of beneficial interest
outstanding, unlimited authorization, no par
|
|
16,879,569
|
Net asset value per
share
|
$
|
52.37
|
Sales charge
|
|
5.75%
|
Offering price per
share, equal to net asset value per share/(1-sales charge)
|
$
|
55.56
|
|
Class B
|
|
|
Net assets
|
$
|
3,462,203
|
Shares of beneficial
interest outstanding, unlimited authorization, no par
|
|
76,680
|
Net asset value per
share
|
$
|
45.15
|
|
Class C
|
|
|
Net assets
|
$
|
99,099,043
|
Shares of beneficial
interest outstanding, unlimited authorization, no par
|
|
2,197,056
|
Net asset value per
share
|
$
|
45.11
|
|
Class R
|
|
|
Net assets
|
$
|
76,500,811
|
Shares of beneficial
interest outstanding, unlimited authorization, no par
|
|
1,498,316
|
Net asset value per
share
|
$
|
51.06
|
|
Institutional Class
|
|
|
Net assets
|
$
|
1,214,511,293
|
Shares of beneficial
interest outstanding, unlimited authorization, no par
|
|
22,150,243
|
Net asset value per
share
|
$
|
54.83
|
See accompanying notes, which are an
integral part of the financial statements.
19
Statement of operations
|
|
Delaware Small Cap Value Fund
|
Year Ended November 30,
2013
|
Investment Income:
|
|
|
|
|
|
|
|
Dividends
|
$
|
24,216,010
|
|
|
|
|
|
Interest
|
|
37,517
|
|
|
|
|
|
Securities
lending income
|
|
2,887
|
|
|
|
|
|
Foreign tax
withheld
|
|
(6,627
|
)
|
|
$
|
24,249,787
|
|
|
Expenses:
|
|
|
|
|
|
|
|
Management
fees
|
|
11,241,975
|
|
|
|
|
|
Dividend
disbursing and transfer agent fees and expenses
|
|
3,503,159
|
|
|
|
|
|
Distribution
expenses Class A
|
|
2,081,461
|
|
|
|
|
|
Distribution
expenses Class B
|
|
49,783
|
|
|
|
|
|
Distribution
expenses Class C
|
|
831,483
|
|
|
|
|
|
Distribution
expenses Class R
|
|
371,796
|
|
|
|
|
|
Accounting and
administration expenses
|
|
625,487
|
|
|
|
|
|
Registration
fees
|
|
213,453
|
|
|
|
|
|
Reports and
statements to shareholders
|
|
183,611
|
|
|
|
|
|
Legal
fees
|
|
110,038
|
|
|
|
|
|
Trustees fees
and expenses
|
|
81,592
|
|
|
|
|
|
Audit and
tax
|
|
29,403
|
|
|
|
|
|
Custodian
fees
|
|
28,115
|
|
|
|
|
|
Other
expenses
|
|
45,181
|
|
|
|
19,396,537
|
|
Less waiver of
distribution expenses Class A
|
|
|
|
|
|
(287,547
|
)
|
Less waiver of
distribution expenses Class B
|
|
|
|
|
|
(2,100
|
)
|
Less waiver of
distribution expenses Class R
|
|
|
|
|
|
(51,638
|
)
|
Less expense
paid indirectly
|
|
|
|
|
|
(1,135
|
)
|
Total
expenses
|
|
|
|
|
|
19,054,117
|
|
Net Investment Income
|
|
|
|
|
|
5,195,670
|
|
|
Net Realized and Unrealized
Gain:
|
|
|
|
|
|
|
|
Net realized
gain on investments
|
|
|
|
|
|
46,586,853
|
|
Net change in
unrealized appreciation (depreciation)
|
|
|
|
|
|
|
|
of investments
|
|
|
|
|
|
392,175,103
|
|
Net Realized and
Unrealized Gain
|
|
|
|
|
|
438,761,956
|
|
|
Net Increase in Net Assets Resulting
from Operations
|
|
|
|
|
$
|
443,957,626
|
|
See accompanying notes, which are an
integral part of the financial statements.
20
Statements of changes in net
assets
Delaware Small Cap Value
Fund
|
Year
Ended
|
|
11/30/13
|
|
11/30/12
|
Increase in Net Assets from
Operations:
|
|
|
|
|
|
|
|
Net investment income
|
$
|
5,195,670
|
|
|
$
|
1,335,675
|
|
Net realized
gain
|
|
46,586,853
|
|
|
|
6,504,252
|
|
Net change in unrealized appreciation (depreciation)
|
|
392,175,103
|
|
|
|
54,895,533
|
|
Net increase in
net assets resulting from operations
|
|
443,957,626
|
|
|
|
62,735,460
|
|
|
Dividends and Distributions to
Shareholders from:
|
|
|
|
|
|
|
|
Net investment income:
|
|
|
|
|
|
|
|
Class A
|
|
(1,279,159
|
)
|
|
|
|
|
Institutional Class
|
|
(1,785,939
|
)
|
|
|
|
|
|
Net realized
gain on investments:
|
|
|
|
|
|
|
|
Class A
|
|
(3,531,372
|
)
|
|
|
(18,061,149
|
)
|
Class B
|
|
(42,667
|
)
|
|
|
(503,913
|
)
|
Class C
|
|
(493,148
|
)
|
|
|
(2,847,089
|
)
|
Class R
|
|
(302,813
|
)
|
|
|
(4,348,768
|
)
|
Institutional Class
|
|
(2,388,692
|
)
|
|
|
(1,391,736
|
)
|
|
|
(9,823,790
|
)
|
|
|
(27,152,655
|
)
|
Capital Share
Transactions:
|
|
|
|
|
|
|
|
Proceeds from
shares sold:
|
|
|
|
|
|
|
|
Class A
|
|
360,137,117
|
|
|
|
254,891,248
|
|
Class B
|
|
38,348
|
|
|
|
60,866
|
|
Class C
|
|
25,678,037
|
|
|
|
20,845,992
|
|
Class R
|
|
35,157,866
|
|
|
|
26,856,223
|
|
Institutional Class
|
|
845,588,890
|
|
|
|
304,482,220
|
|
|
Net asset value
of shares issued upon reinvestment
|
|
|
|
|
|
|
|
of dividends and distributions:
|
|
|
|
|
|
|
|
Class A
|
|
4,730,881
|
|
|
|
17,499,346
|
|
Class B
|
|
41,272
|
|
|
|
476,308
|
|
Class C
|
|
468,386
|
|
|
|
2,639,701
|
|
Class R
|
|
302,736
|
|
|
|
1,391,128
|
|
Institutional Class
|
|
3,993,286
|
|
|
|
3,578,023
|
|
|
|
1,276,136,819
|
|
|
|
632,721,055
|
|
22
|
Year
Ended
|
|
11/30/13
|
|
11/30/12
|
Capital Share Transactions
(continued):
|
|
|
|
|
|
|
|
Cost of shares
redeemed:
|
|
|
|
|
|
|
|
Class A
|
$
|
(199,410,980
|
)
|
|
$
|
(146,679,412
|
)
|
Class B
|
|
(4,431,904
|
)
|
|
|
(4,265,249
|
)
|
Class C
|
|
(15,414,318
|
)
|
|
|
(12,058,654
|
)
|
Class R
|
|
(20,699,591
|
)
|
|
|
(13,904,316
|
)
|
Institutional Class
|
|
(180,684,573
|
)
|
|
|
(60,952,716
|
)
|
|
|
(420,641,366
|
)
|
|
|
(237,860,347
|
)
|
Increase in net
assets derived
|
|
|
|
|
|
|
|
from capital
share transactions
|
|
855,495,453
|
|
|
|
394,860,708
|
|
Net Increase in Net
Assets
|
|
1,289,629,289
|
|
|
|
430,443,513
|
|
|
Net Assets:
|
|
|
|
|
|
|
|
Beginning of
year
|
|
987,970,289
|
|
|
|
557,526,776
|
|
End of year
(including undistributed net investment
|
|
|
|
|
|
|
|
income of $3,147,895 and $1,017,323, respectively)
|
$
|
2,277,599,578
|
|
|
$
|
987,970,289
|
|
See accompanying notes, which are an
integral part of the financial statements.
23
Financial highlights
Delaware Small Cap Value Fund Class A
Selected data for each share of the Fund
outstanding throughout each period were as follows:
Net asset value, beginning
of period
|
|
Income (loss) from investment
operations:
|
Net investment income
(loss)
1
|
Net realized and
unrealized gain
|
Total from investment
operations
|
|
Less dividends and distributions
from:
|
Net investment
income
|
Net realized
gain
|
Total dividends and
distributions
|
|
Net asset value, end of period
|
|
Total return
2
|
|
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
The average shares
outstanding method has been applied for per share information.
2
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 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.
24
|
Year
Ended
|
|
|
11/30/13
|
|
11/30/12
|
|
11/30/11
|
|
11/30/10
|
|
11/30/09
|
|
|
$39.750
|
|
|
$37.860
|
|
|
$36.190
|
|
|
$27.530
|
|
|
$21.340
|
|
|
|
|
|
|
|
|
|
|
|
0.119
|
|
|
0.074
|
|
|
(0.008
|
)
|
|
(0.003
|
)
|
|
0.059
|
|
|
|
12.847
|
|
|
3.622
|
|
|
1.818
|
|
|
8.680
|
|
|
6.191
|
|
|
|
12.966
|
|
|
3.696
|
|
|
1.810
|
|
|
8.677
|
|
|
6.250
|
|
|
|
|
|
|
|
|
|
|
|
(0.092
|
)
|
|
|
|
|
|
|
|
(0.017
|
)
|
|
(0.060
|
)
|
|
|
(0.254
|
)
|
|
(1.806
|
)
|
|
(0.140
|
)
|
|
|
|
|
|
|
|
|
(0.346
|
)
|
|
(1.806
|
)
|
|
(0.140
|
)
|
|
(0.017
|
)
|
|
(0.060
|
)
|
|
|
|
|
|
|
$52.370
|
|
|
$39.750
|
|
|
$37.860
|
|
|
$36.190
|
|
|
$27.530
|
|
|
|
|
|
|
|
32.87%
|
|
|
10.21%
|
|
|
4.99%
|
|
|
31.53%
|
|
|
29.01%
|
|
|
|
|
|
|
|
|
|
|
|
$884,026
|
|
|
$522,403
|
|
|
$375,299
|
|
|
$301,747
|
|
|
$233,317
|
|
|
|
1.25%
|
|
|
1.32%
|
|
|
1.37%
|
|
|
1.43%
|
|
|
1.43%
|
|
|
|
|
|
|
|
1.29%
|
|
|
1.37%
|
|
|
1.42%
|
|
|
1.49%
|
|
|
1.62%
|
|
|
|
0.26%
|
|
|
0.19%
|
|
|
(0.02%
|
)
|
|
(0.01%
|
)
|
|
0.27%
|
|
|
|
|
|
|
|
0.22%
|
|
|
0.14%
|
|
|
(0.07%
|
)
|
|
(0.07%
|
)
|
|
0.08%
|
|
|
|
28%
|
|
|
11%
|
|
|
29%
|
|
|
12%
|
|
|
19%
|
|
|
25
Financial highlights
Delaware Small Cap Value Fund Class
B
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
loss
1
|
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 return
2
|
|
Ratios and supplemental data:
|
Net assets, end of period (000
omitted)
|
Ratio of expenses to
average net assets
|
Ratio of expenses to average net
assets
|
prior to
fees waived
|
Ratio of net
investment loss to average net assets
|
Ratio of net investment loss to
average net assets
|
prior to
fees waived
|
Portfolio turnover
|
1
The average shares
outstanding method has been applied for per share information.
2
Total 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.
26
|
Year Ended
|
|
|
11/30/13
|
|
11/30/12
|
|
11/30/11
|
|
11/30/10
|
|
11/30/09
|
|
|
$34.460
|
|
|
$33.300
|
|
|
$32.080
|
|
|
$24.570
|
|
|
$19.130
|
|
|
|
|
|
|
|
|
|
|
|
(0.177
|
)
|
|
(0.189
|
)
|
|
(0.262
|
)
|
|
(0.214
|
)
|
|
(0.088
|
)
|
|
|
11.121
|
|
|
3.155
|
|
|
1.622
|
|
|
7.724
|
|
|
5.528
|
|
|
|
10.944
|
|
|
2.966
|
|
|
1.360
|
|
|
7.510
|
|
|
5.440
|
|
|
|
|
|
|
|
|
|
|
|
(0.254
|
)
|
|
(1.806
|
)
|
|
(0.140
|
)
|
|
|
|
|
|
|
|
|
(0.254
|
)
|
|
(1.806
|
)
|
|
(0.140
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
$45.150
|
|
|
$34.460
|
|
|
$33.300
|
|
|
$32.080
|
|
|
$24.570
|
|
|
|
|
|
|
|
31.97%
|
|
|
9.37%
|
|
|
4.23%
|
|
|
30.57%
|
|
|
28.44%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$3,462
|
|
|
$6,424
|
|
|
$9,835
|
|
|
$14,249
|
|
|
$17,532
|
|
|
|
1.96%
|
|
|
2.07%
|
|
|
2.12%
|
|
|
2.18%
|
|
|
2.18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.00%
|
|
|
2.07%
|
|
|
2.12%
|
|
|
2.19%
|
|
|
2.32%
|
|
|
|
(0.45%
|
)
|
|
(0.56%
|
)
|
|
(0.77%
|
)
|
|
(0.76%
|
)
|
|
(0.48%
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.49%
|
)
|
|
(0.56%
|
)
|
|
(0.77%
|
)
|
|
(0.77%
|
)
|
|
(0.62%
|
)
|
|
|
28%
|
|
|
11%
|
|
|
29%
|
|
|
12%
|
|
|
19%
|
|
|
27
Financial highlights
Delaware Small Cap Value Fund Class C
Selected data for each share of the Fund
outstanding throughout each period were as follows:
Net asset value, beginning
of period
|
|
Income (loss) from investment
operations:
|
Net investment
loss
1
|
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 return
2
|
|
Ratios and supplemental data:
|
Net assets, end of period (000
omitted)
|
Ratio of expenses to
average net assets
|
Ratio of expenses to average net
assets
|
prior to fees
waived
|
Ratio of net
investment loss to average net assets
|
Ratio of net investment loss to
average net assets
|
prior to fees
waived
|
Portfolio
turnover
|
1
The average shares
outstanding method has been applied for per share information.
2
Total 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.
28
|
Year Ended
|
|
|
11/30/13
|
|
11/30/12
|
|
11/30/11
|
|
11/30/10
|
|
11/30/09
|
|
|
$34.450
|
|
|
$33.280
|
|
|
$32.070
|
|
|
$24.560
|
|
|
$19.120
|
|
|
|
|
|
|
|
|
|
|
|
(0.196
|
)
|
|
(0.188
|
)
|
|
(0.260
|
)
|
|
(0.215
|
)
|
|
(0.090
|
)
|
|
|
11.110
|
|
|
3.164
|
|
|
1.610
|
|
|
7.725
|
|
|
5.530
|
|
|
|
10.914
|
|
|
2.976
|
|
|
1.350
|
|
|
7.510
|
|
|
5.440
|
|
|
|
|
|
|
|
|
|
|
|
(0.254
|
)
|
|
(1.806
|
)
|
|
(0.140
|
)
|
|
|
|
|
|
|
|
|
(0.254
|
)
|
|
(1.806
|
)
|
|
(0.140
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
$45.110
|
|
|
$34.450
|
|
|
$33.280
|
|
|
$32.070
|
|
|
$24.560
|
|
|
|
|
|
|
|
31.93%
|
|
|
9.37%
|
|
|
4.20%
|
|
|
30.58%
|
|
|
28.45%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$99,099
|
|
|
$66,231
|
|
|
$52,648
|
|
|
$49,706
|
|
|
$44,564
|
|
|
|
2.00%
|
|
|
2.07%
|
|
|
2.12%
|
|
|
2.18%
|
|
|
2.18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.00%
|
|
|
2.07%
|
|
|
2.12%
|
|
|
2.19%
|
|
|
2.32%
|
|
|
|
(0.49%
|
)
|
|
(0.56%
|
)
|
|
(0.77%
|
)
|
|
(0.76%
|
)
|
|
(0.48%
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.49%
|
)
|
|
(0.56%
|
)
|
|
(0.77%
|
)
|
|
(0.77%
|
)
|
|
(0.62%
|
)
|
|
|
28%
|
|
|
11%
|
|
|
29%
|
|
|
12%
|
|
|
19%
|
|
|
29
Financial highlights
Delaware Small Cap Value Fund Class R
Selected data for each share of the Fund
outstanding throughout each period were as follows:
Net asset value, beginning of
period
|
|
Income (loss) from investment
operations:
|
Net investment income
(loss)
1
|
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 return
2
|
|
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 loss to
average net assets
|
prior to
fees waived
|
Portfolio turnover
|
1
The average shares
outstanding method has been applied for per share information.
2
Total 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 all 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.
30
|
Year Ended
|
|
|
11/30/13
|
|
11/30/12
|
|
11/30/11
|
|
11/30/10
|
|
11/30/09
|
|
|
$38.770
|
|
|
$37.050
|
|
|
$35.510
|
|
|
$27.070
|
|
|
$20.970
|
|
|
|
|
|
|
|
|
|
|
|
0.004
|
|
|
(0.022
|
)
|
|
(0.102
|
)
|
|
(0.081
|
)
|
|
0.003
|
|
|
|
12.540
|
|
|
3.548
|
|
|
1.782
|
|
|
8.521
|
|
|
6.097
|
|
|
|
12.544
|
|
|
3.526
|
|
|
1.680
|
|
|
8.440
|
|
|
6.100
|
|
|
|
|
|
|
|
|
|
|
|
(0.254
|
)
|
|
(1.806
|
)
|
|
(0.140
|
)
|
|
|
|
|
|
|
|
|
(0.254
|
)
|
|
(1.806
|
)
|
|
(0.140
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
$51.060
|
|
|
$38.770
|
|
|
$37.050
|
|
|
$35.510
|
|
|
$27.070
|
|
|
|
|
|
|
|
32.55%
|
|
|
9.96%
|
|
|
4.72%
|
|
|
31.18%
|
|
|
29.09%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$76,501
|
|
|
$44,379
|
|
|
$28,303
|
|
|
$20,757
|
|
|
$15,971
|
|
|
|
1.50%
|
|
|
1.57%
|
|
|
1.62%
|
|
|
1.68%
|
|
|
1.68%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.58%
|
|
|
1.67%
|
|
|
1.72%
|
|
|
1.79%
|
|
|
1.92%
|
|
|
|
0.01%
|
|
|
(0.06%
|
)
|
|
(0.27%
|
)
|
|
(0.26%
|
)
|
|
0.02%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.07%
|
)
|
|
(0.16%
|
)
|
|
(0.37%
|
)
|
|
(0.37%
|
)
|
|
(0.22%
|
)
|
|
|
28%
|
|
|
11%
|
|
|
29%
|
|
|
12%
|
|
|
19%
|
|
|
31
Financial highlights
Delaware Small Cap Value Fund Institutional
Class
Selected data for each share of the Fund
outstanding throughout each period were as follows:
Net asset value, beginning of
period
|
|
Income from investment
operations:
|
Net investment
income
1
|
Net realized and unrealized
gain
|
Total from investment
operations
|
|
Less dividends and
distributions from:
|
Net investment income
|
Net realized gain
|
Total dividends and
distributions
|
|
Net asset value, end of
period
|
|
Total
return
2
|
|
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 average shares
outstanding method has been applied for per share information.
2
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.
32
|
Year Ended
|
|
|
11/30/13
|
|
11/30/12
|
|
11/30/11
|
|
11/30/10
|
|
11/30/09
|
|
|
$41.590
|
|
|
$39.430
|
|
|
$37.590
|
|
|
$28.580
|
|
|
$22.170
|
|
|
|
|
|
|
|
|
|
|
|
0.250
|
|
|
0.180
|
|
|
0.090
|
|
|
0.081
|
|
|
0.116
|
|
|
|
13.434
|
|
|
3.786
|
|
|
1.890
|
|
|
9.005
|
|
|
6.427
|
|
|
|
13.684
|
|
|
3.966
|
|
|
1.980
|
|
|
9.086
|
|
|
6.543
|
|
|
|
|
|
|
|
|
|
|
|
(0.190
|
)
|
|
|
|
|
|
|
|
(0.076
|
)
|
|
(0.133
|
)
|
|
|
(0.254
|
)
|
|
(1.806
|
)
|
|
(0.140
|
)
|
|
|
|
|
|
|
|
|
(0.444
|
)
|
|
(1.806
|
)
|
|
(0.140
|
)
|
|
(0.076
|
)
|
|
(0.133
|
)
|
|
|
|
|
|
|
$54.830
|
|
|
$41.590
|
|
|
$39.430
|
|
|
$37.590
|
|
|
$28.580
|
|
|
|
|
|
|
|
33.22%
|
|
|
10.49%
|
|
|
5.26%
|
|
|
31.85%
|
|
|
29.28%
|
|
|
|
|
|
|
|
|
|
|
|
$1,214,512
|
|
|
$348,533
|
|
|
$91,442
|
|
|
$48,996
|
|
|
$15,912
|
|
|
|
1.00%
|
|
|
1.07%
|
|
|
1.12%
|
|
|
1.18%
|
|
|
1.18%
|
|
|
|
|
|
|
|
1.00%
|
|
|
1.07%
|
|
|
1.12%
|
|
|
1.19%
|
|
|
1.32%
|
|
|
|
0.51%
|
|
|
0.44%
|
|
|
0.23%
|
|
|
0.24%
|
|
|
0.52%
|
|
|
|
|
|
|
|
0.51%
|
|
|
0.44%
|
|
|
0.23%
|
|
|
0.23%
|
|
|
0.38%
|
|
|
|
28%
|
|
|
11%
|
|
|
29%
|
|
|
12%
|
|
|
19%
|
|
|
33
Notes to financial statements
Delaware Small Cap Value Fund
|
November 30,
2013
|
Delaware Group
®
Equity Funds V (Trust) is organized as a
Delaware statutory trust and offers three series: Delaware Dividend Income Fund,
Delaware Small-Cap Core Fund and Delaware Small Cap Value Fund. These financial
statements and the related notes pertain to Delaware Small Cap Value Fund
(Fund). The Trust is an open-end investment company. The Fund is considered
diversified under the Investment Company Act of 1940, as amended and offers
Class A, Class B, 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% 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 B shares may only be purchased
through dividend reinvestment and certain permitted exchanges. Prior to June 1,
2007, Class B shares were sold with a CDSC that declined from 4% to zero
depending upon the period of time the shares were held. Class B shares will
automatically convert to Class A shares on a quarterly basis approximately eight
years after purchase. Class C shares are sold with a CDSC of 1%, if redeemed
during the first twelve 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 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 and exchange-traded funds (ETFs), 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 and ETFs traded on the Nasdaq are
valued in accordance with the Nasdaq Official Closing Price, which may not be
the last sales price. If on a particular day an equity security or ETF does not
trade, then 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. Investment
company securities are valued at net asset value per share, as reported by the
underlying investment company. 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 Funds 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).
34
Federal & 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 Funds 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 Funds tax positions taken for all open federal income tax years
(Nov. 30, 2010 Nov. 30, 2013), and has concluded that no provision for federal
income tax is required in the Funds financial statements. In regard to foreign
taxes only, the Fund has open tax years in certain foreign countries 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 counterpartys 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 Funds 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 Nov. 29, 2013.
Use of Estimates
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.
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
35
Notes to financial
statements
Delaware Small Cap
Value Fund
1. Significant Accounting Policies
(continued)
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 Funds understanding of the applicable countrys tax rules and rates. The
Fund declares and pays distributions from net investment income and 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. 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. There
were no commission rebates for the year ended Nov. 30, 2013.
The Fund may receive earnings credits from
its custodian when positive cash balances are maintained, which are used to
offset custody fees. There were no earnings credits for the year ended Nov. 30,
2013.
The Fund may receive earnings credits from
its transfer agent when positive cash balances are maintained, which are used to
offset transfer agent fees. If the amount earned is greater than one dollar, the
expense paid under this arrangement is included in dividend disbursing and
transfer agent fees and expenses and appears on the statement of operations with
the corresponding expense offset shown as expense paid indirectly. For the
year ended Nov. 30, 2013, the Fund earned $1,135 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 0.75% on the
first $500 million of average daily net assets of the Fund, 0.70% on the next
$500 million, 0.65% on the next $1.5 billion and 0.60% on the average daily net
assets in excess $2.5 billion.
Delaware Service Company, Inc. (DSC), an
affiliate of DMC, provides fund accounting and financial administration
oversight services to the Fund. For these services, the Fund pays DSC fees 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
DSC 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 year ended Nov. 30, 2013, the Fund was charged $ 78,159 for
these services.
36
DSC is also the transfer agent and
dividend disbursing agent of the Fund. For these services, the Fund pays DSC
fees 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. This amount is
included in the statement of operations as dividend disbursing and transfer
agent fees and expenses. For the year ended Nov. 30, 2013, the amount charged by DSC
was $ 356,957. Pursuant to a sub-transfer agency agreement between DSC 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 1.00% of the average daily net assets
of the Class B and Class C shares. Effective Oct. 1, 2013, the Fund pays DDLP an
annual distribution and service fee of 0.25% and 0.50% of the average daily net
assets of the Class A and Class R shares, respectively. Prior to Oct. 1, 2013,
the Fund paid an annual distribution and service fee of 0.30% and 0.60%,
respectively, of the average daily net assets of the Class A and Class R shares,
respectively. For the period from Dec. 1, 2012 to Oct. 1, 2013, the distribution
and service fees for Class A and Class R shares were contractually limited to
0.25% and 0.50% of the classes average daily net assets. Institutional Class
shares pay no distribution and service expenses. Effective Nov. 1, 2013, DDLP
has contractually agreed to waive Class B shares 12b-1 fees to 0.25% of average
daily net assets through Oct. 31, 2014. This waiver and reimbursement may be
terminated only by agreement of the distributor and the Fund.
As provided in the investment management
agreement, the Fund bears a portion of the cost of certain resources shared with
DMC, including the cost of internal personnel of DMC and/or its affiliates that
provide legal, tax and regulatory reporting services to the Fund. For the year
ended Nov. 30, 2013, the Fund was charged $ 47,791 for internal legal, tax and
regulatory reporting services provided by DMC and/or its affiliates
employees.
For the year ended Nov. 30, 2013, DDLP
earned $56,198 for commissions on sales of the Funds Class A shares. For the
year ended Nov. 30, 2013, DDLP received gross CDSC commissions of $11, $71 and
$3,499 on redemption of the Funds Class A, Class B and Class C shares,
respectively, and these commissions were entirely used to offset up-front
commissions previously paid by DDLP to broker/dealers on sales of those
shares.
Trustees fees include expenses accrued by
the Fund for each Trustees retainer and meeting fees. Certain officers of DMC,
DSC and DDLP are officers and/or Trustees of the Trust. These officers and
Trustees are paid no compensation by the Fund.
37
Notes to financial
statements
Delaware Small Cap
Value Fund
3. Investments
For the year ended Nov. 30, 2013, the Fund
made purchases of $1,269,035,033 and sales of $429,853,314 of investment
securities other than short-term investments.
At Nov. 30, 2013, the cost of investments
for federal income tax purposes was $1,738,770,051. At Nov. 30, 2013, the net
unrealized appreciation was $542,924,989 of which $552,957,574 related to
unrealized appreciation of investments and $10,032,585 related to unrealized
depreciation of investments.
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 entitys own assumptions about the assumptions that market
participants would use in pricing the asset or liability developed based on the
best information available under the circumstances. The Funds 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 (e.g., 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)
(e.g., 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
|
inputs are significant unobservable
inputs (including the Funds own assumptions used to determine the fair
value of investments) (e.g., 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
38
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 Funds investments by fair value hierarchy levels as of Nov.
30, 2013:
|
|
Level 1
|
|
Level 2
|
|
Total
|
Common Stock
|
|
$
|
2,196,963,986
|
|
$
|
|
|
$
|
2,196,963,986
|
Exchange-Traded Fund
|
|
|
23,035,805
|
|
|
|
|
|
23,035,805
|
Short-Term Investments
|
|
|
|
|
|
61,695,249
|
|
|
61,695,249
|
Total
|
|
$
|
2,219,999,791
|
|
$
|
61,695,249
|
|
$
|
2,281,695,040
|
During the year ended Nov. 30, 2013, there
were no transfers between Level 1 investments, Level 2 investments or Level 3
investments that had a significant impact to the Fund. The Funds policy is to
recognize transfers between levels at the beginning of the reporting
period.
At Nov. 30, 2013, there were no Level 3
investments.
4. Dividend and Distribution
Information
Income and long-term capital gain
distributions are determined in accordance with federal income tax regulations,
which may differ from U.S. GAAP. Additionally, distributions from net short-term
gains on sales of investment securities are treated as ordinary income for
federal income tax purposes. The tax character of dividends and distributions
paid during the years ended Nov. 30, 2013 and 2012 were as follows:
|
|
Year
Ended
|
|
|
11/30/13
|
|
11/30/12
|
Ordinary income
|
|
$
|
3,065,098
|
|
$
|
5,374,345
|
Long-term capital
gain
|
|
|
6,758,692
|
|
|
21,778,310
|
Total
|
|
$
|
9,823,790
|
|
$
|
27,152,655
|
5. Components of Net Assets on a Tax
Basis
As of Nov. 30, 2013, the components of net
assets on a tax basis were as follows:
Shares of beneficial
interest
|
|
$
|
1,684,272,298
|
Undistributed ordinary income
|
|
|
14,042,229
|
Undistributed
long-term capital gain
|
|
|
36,360,062
|
Unrealized appreciation
|
|
|
542,924,989
|
Net assets
|
|
$
|
2,277,599,578
|
The differences between book basis and tax
basis components of net assets are primarily attributable to tax deferral of
losses on wash sales.
39
Notes to financial
statements
Delaware Small Cap
Value Fund
6. Capital Shares
Transactions in capital shares were as
follows:
|
|
Year Ended
|
|
|
11/30/13
|
|
11/30/12
|
Shares sold:
|
|
|
|
|
|
|
Class
A
|
|
7,956,581
|
|
|
6,535,447
|
|
Class B
|
|
961
|
|
|
1,802
|
|
Class
C
|
|
649,744
|
|
|
615,066
|
|
Class R
|
|
803,908
|
|
|
705,870
|
|
Institutional
Class
|
|
17,365,329
|
|
|
7,453,049
|
|
|
Shares issued upon reinvestment of
dividends and distributions:
|
|
|
|
|
|
|
Class
A
|
|
116,899
|
|
|
481,148
|
|
Class B
|
|
1,176
|
|
|
14,997
|
|
Class
C
|
|
13,344
|
|
|
83,166
|
|
Class R
|
|
7,655
|
|
|
39,131
|
|
Institutional
Class
|
|
94,471
|
|
|
94,233
|
|
|
|
27,010,068
|
|
|
16,023,909
|
|
Shares redeemed:
|
|
|
|
|
|
|
Class A
|
|
(4,336,760
|
)
|
|
(3,787,414
|
)
|
Class
B
|
|
(111,867
|
)
|
|
(125,780
|
)
|
Class C
|
|
(388,826
|
)
|
|
(357,385
|
)
|
Class
R
|
|
(458,041
|
)
|
|
(364,034
|
)
|
Institutional Class
|
|
(3,689,734
|
)
|
|
(1,485,984
|
)
|
|
|
(8,985,228
|
)
|
|
(6,120,597
|
)
|
Net increase
|
|
18,024,840
|
|
|
9,903,312
|
|
For the years ended Nov. 30, 2013 and
2012, 26,366 Class B shares were converted to 22,814 Class A shares valued at
$1,034,574 and 54,036 Class B shares were converted to 47,127 Class A shares
valued at $1,832,315, respectively. 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.
7. Line of Credit
The Fund, along with certain other funds
in the Delaware Investments
®
Family of Funds (Participants), was a participant in a
$125,000,000 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
Participants 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. 12, 2013.
40
On Nov. 12, 2013, the Fund, along with the
other Participants, entered into an amendment to the agreement for a
$225,000,000 revolving line of credit. The line of credit is to be used as
described above and operates in substantially the same manner as the original
agreement. The line of credit available under the agreement expires on Nov. 10,
2014.
The Fund had no amounts outstanding as of
Nov. 30, 2013 or at any time during the year then ended.
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: (i) 102% with respect to U.S.
securities and foreign securities that are denominated and payable in U.S.
dollars; and (ii) 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 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 Mellons 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
41
Notes to financial
statements
Delaware Small Cap
Value Fund
8. Securities Lending (continued)
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 or
another collateral investment pool. This could occur if an investment in a
collateral investment pool defaulted or if it were necessary to liquidate assets
in the collateral investment pool to meet returns on outstanding security loans
at a time when the collateral investment pools net asset value per unit was
less than $1.00. Under those circumstances, the Fund may not receive an amount
from the collateral investment pool 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 Nov. 30, 2013, the Fund had no
securities out on loan.
9. Credit and Market
Risk
The Fund invests a significant portion of
its assets in small companies and may be subject to certain risks associated
with ownership of securities of such companies. Investments in small-sized
companies may be more volatile than investments in larger companies for a number
of reasons, which include limited financial resources or a dependence on narrow
product lines.
The Fund invests in REITs and is subject
to the risks associated with that industry. If the Fund holds real estate
directly as a result of defaults or receives rental income directly from real
estate holdings, its tax status as a regulated investment company may be
jeopardized. There were no direct real estate holdings during the year ended
Nov. 30, 2013. The Funds REIT holdings are also affected by interest rate
changes, particularly if the REITs it holds use floating rate debt to finance
their ongoing operations.
The Fund may invest up to 15% of its net
assets in illiquid securities, which may include securities with contractual
restrictions on resale, securities exempt from registration under Rule 144A of
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 Funds Board
has delegated to DMC the day-to-day functions of determining whether individual
securities are liquid for purposes of the Funds limitation on investments in
illiquid securities. Securities eligible for resale pursuant to Rule 144A, which
are determined
42
to be liquid, are not subject to the
Funds 15% limit on investments in illiquid securities. As of Nov. 30, 2013,
there were no Rule 144A securities held by the Fund. Illiquid securities have
been identified in 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 Funds
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 Funds existing contracts and expects the risk of loss to be
remote.
11. Subsequent Events
Management has determined that no material
events or transactions occurred subsequent to Nov. 30, 2013 that would require
recognition or disclosure in the Funds financial statements.
43
Report of independent
registered
public accounting firm
To the Board of Trustees of Delaware
Group
®
Equity
Funds V
and Shareholders of Delaware Small Cap Value Fund:
In our opinion, the accompanying statement
of assets and liabilities, including the schedule of investments, and the
related statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Delaware Small Cap Value Fund (one of the series constituting Delaware Group
Equity Funds V, hereafter referred to as the Fund) at November 30, 2013, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended and the financial highlights
for each of the four years in the period then ended, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
financial statements) are the responsibility of the Funds management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at November 30, 2013 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion. The financial highlights for the year ended November 30, 2009 were
audited by other independent accountants whose report dated January 21, 2010
expressed an unqualified opinion on those statements.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
January 17, 2014
44
Other Fund information
(Unaudited)
Delaware Small
Cap Value Fund
Tax Information
The information set forth below is for the
Funds fiscal year as required by federal income tax laws. Shareholders,
however, must report distributions on a calendar year basis for income tax
purposes, which may include distributions for portions of two fiscal years of
the Fund. Accordingly, the information needed by shareholders for income tax
purposes will be sent to them in January of each year. Please consult your tax
advisor for proper treatment of this information.
All disclosures are based on financial
information available as of the date of this annual report and, accordingly is
subject to change. For any and all items requiring reporting, it is the
intention of the Fund to report the maximum amount permitted under the Internal
Revenue Code and the regulations thereunder.
For the fiscal year ended Nov. 30, 2013,
the Fund reports distributions paid during the year as follows:
(A) Long-Term
Distributions (Tax Basis)
|
|
68.80%
|
(B) Ordinary Income Distributions (Tax
Basis)*
|
|
31.20%
|
Total Distributions
(Tax Basis)
|
|
100.00%
|
(C) Qualifying
Dividends
(1)
|
|
100.00%
|
(A) and (B) is based on a percentage of
the Funds total distributions.
(C) is based on a percentage of the Funds
ordinary income distributions.
(1)
Qualifying dividends represent dividends which qualify for
the corporate dividends received deduction.
*
|
For the fiscal year ended Nov.
30, 2013, certain dividends paid by the Fund may be subject to a maximum
tax rate of 15%, as provided for by the Jobs and Growth Tax Relief
Reconciliation Act of 2003, and by the Tax Relief, Unemployment Insurance
Reauthorization, and Job Creations Act of 2010, and made permanent by the
American Taxpayer Relief Act of 2012. The Fund intends to report up to a
maximum of 100.00% to be taxed at a maximum rate of 15%. Complete
information will be computed and reported in conjunction with your 2013
Form 1099-DIV, as applicable.
|
45
Other Fund
information
(Unaudited)
Delaware
Small Cap Value Fund
Board consideration of Delaware Small
Cap Value Fund investment advisory agreement
At a meeting held on August 20-22, 2013
(the Annual Meeting), the Board of Trustees (the Board), including a
majority of disinterested or independent Trustees, approved the renewal of the
Investment Advisory Agreement for Delaware Small Cap Value Fund (the Fund). In
making its decision, the Board considered information furnished at regular
quarterly Board meetings, including reports detailing Fund performance,
investment strategies and expenses, as well as information prepared specifically
in connection with the renewal of the investment advisory and sub-advisory
contracts. Information furnished specifically in connection with the renewal of
the Investment Advisory Agreement with Delaware Management Company (DMC)
included materials provided by DMC and its affiliates (Delaware Investments)
concerning, among other things, the nature, extent and quality of services
provided to the Fund, the costs of such services to the Fund, economies of scale
and the financial condition and profitability of Delaware Investments. In
addition, in connection with the Annual Meeting, reports were provided to the
Trustees in May 2013 and included reports provided by Lipper, Inc., an
independent statistical compilation organization (Lipper). The Lipper reports
compared the Funds investment performance and expenses with those of other
comparable mutual funds. The Independent Trustees reviewed and discussed the
Lipper reports with independent legal counsel to the Independent Trustees. The
Board requested and received information regarding DMCs policy with respect to
advisory fee levels and its breakpoint philosophy; the structure of portfolio
manager compensation; the investment managers profitability; comparative client
fee information; and any constraints or limitations on the availability of
securities for certain investment styles, which had in the past year inhibited,
or which were likely in the future to inhibit, DMCs ability to invest fully in
accordance with Fund policies.
In considering information relating to the
approval of the Funds advisory agreement, the Independent Trustees received
assistance and advice from and met separately with independent legal counsel to
the Independent Trustees. Although the Board gave attention to all information
furnished, the following discussion identifies, under separate headings, the
primary factors taken into account by the Board during its contract renewal
considerations.
Nature, Extent and Quality of
Service.
The Board considered the services
provided by Delaware Investments to the Fund and its shareholders. In reviewing
the nature, extent and quality of services, the Board considered reports
furnished to it throughout the year, which covered matters such as the relative
performance of the Fund, compliance of portfolio managers with the investment
policies, strategies and restrictions for the Fund, compliance by DMC and
Delaware Distributors, L.P. (together, Management) personnel with the Code of
Ethics adopted throughout the Delaware Investments Family of Funds complex and
adherence to fair value pricing procedures as established by the Board. The
Board was pleased with the current staffing of the Funds investment advisor and
the emphasis placed on research in the investment process. The Board recognized
DMCs recent receipt of several industry distinctions. The Board gave favorable
consideration to DMCs efforts to control expenditures while maintaining service
levels committed
46
to fund matters. The Board noted that in
July 2011 Management implemented measures to reduce overall costs and improve
transfer agent and shareholder servicing functions through outsourcing. The
Board noted the benefits provided to Fund shareholders through each
shareholders ability to exchange an investment in one Delaware Investments fund
for the same class of shares in another Delaware Investments fund without a
sales charge, to reinvest Fund dividends into additional shares of the Fund or
into additional shares of other Delaware Investments funds and the privilege to
combine holdings in other Delaware Investments funds to obtain a reduced sales
charge. The Board was satisfied with the nature, extent and quality of the
overall services provided by Delaware Investments.
Investment Performance.
The Board placed significant emphasis on the investment
performance of the Fund in view of the importance of investment performance to
shareholders. Although the Board gave appropriate consideration to performance
reports and discussions with portfolio managers at Investment Committee meetings
throughout the year, the Board gave particular weight to the Lipper reports
furnished for the Annual Meeting. The Lipper reports prepared for the Fund
showed the investment performance of its Class A shares in comparison to a group
of similar funds as selected by Lipper (the Performance Universe). A fund with
the best performance ranked first, and a fund with the poorest performance
ranked last. The highest/best performing 25% of funds in the Performance
Universe make up the first quartile; the next 25%, the second quartile; the next
25%, the third quartile; and the poorest/worst performing 25% of funds in the
Performance Universe make up the fourth quartile. Comparative annualized
performance for the Fund was shown for the past one-, three-, five- and ten-year
periods ended March 31, 2013. The Boards objective is that the Funds
performance for the periods considered be at or above the median of its
Performance Universe. The following paragraph summarizes the performance results
for the Fund and the Boards view of such performance.
Lipper currently classifies the Fund as a
small-cap value fund. However, Management believes that it would be more
appropriate to include the Fund in the small-cap core funds category.
Accordingly, the Lipper report prepared for the Fund compares the Funds
performance to two separate Performance Universes one consisting of the Fund
and all retail and institutional small-cap core funds, and the other consisting
of the Fund and all retail and institutional small-cap value funds. When
compared to other small-cap core funds, the Lipper report comparison showed that
the Funds total return for the one-year period was in the third quartile of its
Performance Universe, the Funds total return for the three- and ten-year period
was in the second quartile and the Funds total return for the five-year period
was in the first quartile. When compared to other small-cap value funds, the
Lipper report comparison showed that the Funds total return for the one-year
period was in the fourth quartile of the Performance Universe. The report
further showed that the Funds total return for the three- and five-year periods
was in the first quartile of its Performance Universe and the Funds total
return for the ten-year period was in the third quartile of its Performance
Universe. The Funds performance results were mixed but tended toward median,
which was acceptable.
47
Other Fund information
(Unaudited)
Delaware Small
Cap Value Fund
Board consideration of Delaware Small
Cap Value Fund investment advisory agreement (continued)
Comparative Expenses.
The Board considered expense comparison data for the
Delaware Investments Family of Funds. Management
provided the Board with information on pricing levels and fee structures for the
Fund as of its most recently completed fiscal year. The Board also focused on
the comparative analysis of effective management fees and total expense ratios
of the Fund versus effective management fees and expense ratios of a group of
similar funds as selected by Lipper (the Expense Group). In reviewing
comparative costs, the Funds contractual management fee and the actual
management fee incurred by the Fund were compared with the contractual
management fees (assuming all funds in the Expense Group were similar in size to
the Fund) and actual management fees (as reported by each fund) within the
Expense Group, taking into account any applicable breakpoints and fee waivers.
The Funds total expenses were also compared with those of its Expense Group.
The Lipper total expenses, for comparative consistency, were shown by Lipper for
Class A shares and comparative total expenses including 12b-1 and non 12b-1
service fees. The Board considered fees paid to Delaware Investments for
non-management services. The Boards objective is to limit the Funds total
expense ratio to be competitive with that of the Expense Group. The following
paragraph summarizes the expense results for the Fund and the Boards view of
such expenses.
When compared to other small-cap core
funds, the expense comparisons for the Fund showed that its actual management
fee and total expenses were in the quartile with the lowest expenses of the
Expense Group. When compared to other small-cap value funds, the expense
comparisons for the Fund showed that its actual management fee was in the
quartile with the lowest expenses of its Expense Group and its total expenses
were in the quartile with the second lowest expenses of the Expense. The Board
was satisfied with the management fee and total expenses of the Fund in
comparison to those of its Expense Group as shown in the Lipper
report.
Management
Profitability.
The Board considered the level
of profits realized by Delaware Investments in connection with the operation of
the Fund. In this respect, the Board reviewed the Investment Management
Profitability Analysis that addressed the overall profitability of Delaware
Investments business in providing management and other services to each of the
individual funds and the Delaware Investments Family of Funds as a whole.
Specific attention was given to the methodology followed in allocating costs for
the purpose of determining profitability. Management stated that the level of
profits of Delaware Investments, to a certain extent, reflects recent
operational cost savings and efficiencies initiated by Delaware Investments. The
Board considered Delaware Investments efforts to improve services provided to
fund shareholders and to meet additional regulatory and compliance requirements
resulting from recent industry-wide Securities and Exchange Commission
initiatives. The Board also considered the extent to which Delaware Investments
might derive ancillary benefits from fund operations, including the potential
for procuring additional business as a result of the prestige and visibility
associated
48
with its role as service provider to the
Delaware Investments Family of Funds and the benefits from allocation of fund
brokerage to improve trading efficiencies. The Board found that the management
fees were reasonable in light of the services rendered and the level of
profitability of Delaware Investments.
Economies of Scale.
The Trustees considered whether economies of scale are
realized by Delaware Investments as the Funds assets increase and the extent to
which any economies of scale are reflected in the level of management fees
charged. The Trustees reviewed the standardized advisory fee pricing and
structure, approved by the Board and shareholders, which includes breakpoints.
Breakpoints in the advisory fee occur when the advisory fee rate is reduced on
assets in excess of specified levels. Breakpoints result in a lower advisory fee
than would otherwise be the case on all assets when the asset levels specified
are exceeded. The Board noted that the fee under the Funds management contract
fell within the standard structure. The Board also noted that the Funds assets
exceeded the second breakpoint level. The Board believed that, given the extent
to which economics of scale might be realized by the advisor and its affiliates,
the schedule of fees under the Investment Management Agreement provides a
sharing of benefits with the Fund and its shareholders.
49
Board of trustees/directors
and officers addendum
Delaware
Investments
®
Family of Funds
A mutual fund is governed by a
Board of Trustees/Directors (Trustees), which has oversight responsibility for
the management of a funds business affairs. Trustees establish procedures and
oversee and review the performance of the investment manager, the distributor,
and others who perform services for the fund. The independent fund trustees, in
particular, are advocates
Name, Address,
|
Position(s)
|
Length of
|
and Birth Date
|
Held with Fund(s)
|
Time Served
|
Interested Trustees
|
|
|
Patrick P. Coyne
1
|
Chairman, President,
|
Chairman and Trustee
|
2005 Market Street
|
Chief Executive Officer,
|
since August 16, 2006
|
Philadelphia, PA 19103
|
and Trustee
|
|
April 1963
|
|
President and
|
|
|
Chief Executive Officer
|
|
|
since August 1, 2006
|
|
Independent Trustees
|
|
|
Thomas L. Bennett
|
Trustee
|
Since March 2005
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
October 1947
|
|
|
Joseph W. Chow
|
Trustee
|
Since January 2013
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
January 1953
|
|
|
|
John A. Fry
|
Trustee
|
Since January 2001
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
May 1960
|
|
|
|
|
|
Anthony D. Knerr
|
Trustee
|
Since April 1990
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
December 1938
|
|
|
1
Patrick P. Coyne is considered to be an
Interested Trustee because he is an executive officer of the Funds(s)
investment advisor.
50
for shareholder interests.
Each trustee has served in that capacity since he or she was elected to or
appointed to the Board of Trustees, and will continue to serve until his or her
retirement or the election of a new trustee in his or her place. The following
is a list of the Trustees and Officers with certain background and related
information.
|
Number of Portfolios in
|
|
Principal Occupation(s)
|
Fund Complex Overseen
|
Other Directorships
|
During Past 5 Years
|
by Trustee or Officer
|
Held by Trustee or Officer
|
|
Patrick P. Coyne has served in
|
70
|
Director and Audit
|
various executive capacities
|
|
Committee Member
|
at different times at
|
|
Kaydon Corp.
|
Delaware Investments.
2
|
|
|
|
|
Board of Governors Member
|
|
|
Investment Company
|
|
|
Institute (ICI)
|
|
Private Investor
|
70
|
Director
|
(March 2004Present)
|
|
Bryn Mawr Bank Corp. (BMTC)
|
|
|
(20072011)
|
|
Executive Vice President
|
70
|
Director and Audit Committee
|
(Emerging Economies Strategies,
|
|
Member Hercules
|
Risk and Corporate Administration)
|
|
Technology Growth
|
State Street Corporation
|
|
Capital, Inc.
|
(July 2004March
2011)
|
|
|
President
|
70
|
Director Hershey Trust
|
Drexel University
|
|
|
(August 2010Present)
|
|
Director and Audit
|
|
|
Committee Member
|
President
|
|
Community Health Systems
|
Franklin & Marshall College
|
|
|
(July 2002July
2010)
|
|
|
Managing Director
|
70
|
None
|
AKA Strategy
|
|
|
(Strategic Consulting)
|
|
|
(1990Present)
|
|
|
2
Delaware Investments is the marketing name for
Delaware Management Holdings, Inc. and its subsidiaries, including the
Funds(s) investment advisor, principal underwriter, and its transfer
agent.
51
Board of
trustees/directors and officers addendum
Delaware Investments
®
Family of Funds
Name, Address,
|
Position(s)
|
Length of
|
and Birth Date
|
Held with Fund(s)
|
Time Served
|
Independent Trustees
(continued)
|
|
|
Lucinda S. Landreth
|
Trustee
|
Since March 2005
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
June 1947
|
|
|
Frances A. Sevilla-Sacasa
|
Trustee
|
Since September 2011
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
January 1956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas K. Whitford
|
Trustee
|
Since January 2013
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
March 1956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52
|
Number of Portfolios in
|
|
Principal Occupation(s)
|
Fund Complex Overseen
|
Other Directorships
|
During Past 5 Years
|
by Trustee or Officer
|
Held by Trustee or Officer
|
|
Private Investor
|
70
|
None
|
(2004Present)
|
|
|
|
|
Chief Executive Officer
|
70
|
Trust Manager and
|
Banco Itaú Europa
|
|
Audit Committee
|
International
|
|
Member Camden
|
(April 2012Present)
|
|
Property Trust
|
|
Executive Advisor to Dean
|
|
|
(August 2011March 2012)
|
|
|
and Interim Dean
|
|
|
(January 2011July 2011)
|
|
|
University of Miami School of
|
|
|
Business Administration
|
|
|
|
President U.S. Trust,
|
|
|
Bank of America Private
|
|
|
Wealth Management
|
|
|
(Private Banking)
|
|
|
(July 2007December
2008)
|
|
|
Vice Chairman
|
70
|
None
|
(2010April 2013)
|
|
|
Chief Administrative
|
|
|
Officer (20082010)
|
|
|
and Executive Vice
|
|
|
President and Chief
|
|
|
Administrative Officer
|
|
|
(20072009)
|
|
|
PNC Financial
|
|
|
Services Group
|
|
|
53
Board of
trustees/directors and officers addendum
Delaware Investments
®
Family of Funds
Name, Address,
|
Position(s)
|
Length of
|
and Birth Date
|
Held with Fund(s)
|
Time Served
|
Independent Trustees
(continued)
|
|
|
Janet L. Yeomans
|
Trustee
|
Since April 1999
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
July 1948
|
|
|
|
|
|
|
|
|
|
J. Richard Zecher
|
Trustee
|
Since March 2005
|
2005 Market Street
|
|
|
Philadelphia, PA 19103
|
|
|
July 1940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54
|
Number of Portfolios in
|
|
Principal Occupation(s)
|
Fund Complex Overseen
|
Other Directorships
|
During Past 5 Years
|
by Trustee or Officer
|
Held by Trustee or Officer
|
|
Vice President and Treasurer
|
70
|
Director, Audit
|
(January 2006July 2012)
|
|
Committee Member and
|
Vice President Mergers &
Acquisitions
|
|
Investment Committee
|
(January 2003January 2006), and
|
|
Member
|
Vice President and Treasurer
|
|
Okabena Company
|
(July 1995January 2003)
|
|
|
3M Corporation
|
|
Chair 3M
|
|
|
Investment Management
|
|
|
Company
|
|
|
(20052012)
|
Founder
|
70
|
Director and Compensation
|
Investor Analytics
|
|
Committee Member
|
(Risk Management)
|
|
Investor Analytics
|
(May 1999Present)
|
|
|
|
|
Director P/E Investments
|
Founder
|
|
|
P/E Investments
|
|
|
(Hedge Fund)
|
|
|
(September
1996Present)
|
|
|
55
Board of
trustees/directors and officers addendum
Delaware Investments
®
Family of Funds
Name, Address,
|
Position(s)
|
Length of
|
and Birth Date
|
Held with Fund(s)
|
Time Served
|
Officers
|
|
|
David F. Connor
|
Senior Vice President,
|
Senior Vice President,
|
2005 Market Street
|
Deputy General
|
Deputy General Counsel
|
Philadelphia, PA 19103
|
Counsel, and Secretary
|
since May 2013;
|
December 1963
|
|
Vice President, Deputy
|
|
|
General Counsel
|
|
|
September 2000
|
|
|
May 2013; Secretary since
|
|
|
October 2005
|
Daniel V. Geatens
|
Vice President
|
Treasurer
|
2005 Market Street
|
and Treasurer
|
since October 2007
|
Philadelphia, PA 19103
|
|
|
October 1972
|
|
|
David P. OConnor
|
Executive Vice President,
|
Executive Vice President
|
2005 Market Street
|
General Counsel
|
since February 2012;
|
Philadelphia, PA 19103
|
and Chief Legal Officer
|
Senior Vice President
|
February 1966
|
|
October 2005
|
|
|
February 2012;
|
|
|
General Counsel and
|
|
|
Chief Legal Officer
|
|
|
since October
2005
|
Richard Salus
|
Senior Vice President
|
Chief Financial Officer
|
2005 Market Street
|
and Chief Financial Officer
|
since November 2006
|
Philadelphia, PA 19103
|
|
|
October 1963
|
|
|
The Statement of Additional
Information for the Fund(s) includes additional information about the Trustees
and Officers and is available, without charge, upon request by calling 800
523-1918.
56
|
Number of Portfolios in
|
|
Principal Occupation(s)
|
Fund Complex Overseen
|
Other Directorships
|
During Past 5 Years
|
by Trustee or Officer
|
Held by Trustee or Officer
|
|
David F. Connor has served as
|
70
|
None
3
|
Deputy General Counsel of
|
|
|
Delaware Investments
|
|
|
since 2000.
|
|
|
|
|
|
|
|
Daniel V. Geatens has served
|
70
|
None
3
|
in various capacities at
|
|
|
different times at
|
|
|
Delaware
Investments.
|
|
|
David P. OConnor has served in
|
70
|
None
3
|
various executive and legal
|
|
|
capacities at different times
|
|
|
at Delaware Investments.
|
|
|
|
|
|
|
Richard Salus has served in
|
70
|
None
3
|
various executive capacities
|
|
|
at different times at
|
|
|
Delaware Investments.
|
|
|
3
David F. Connor, Daniel V. Geatens, David P.
OConnor, and Richard Salus serve in similar capacities for the six portfolios
of the Optimum Fund Trust, which have the same investment advisor, principal
underwriter, and transfer agent as the registrant.
57
About the
organization
Board of
trustees
|
|
|
|
Patrick P.
Coyne
Chairman,
President, and
Chief Executive Officer
Delaware
Investments
®
Family of Funds
Philadelphia, PA
Thomas L.
Bennett
Private
Investor
Rosemont, PA
|
Joseph W.
Chow
Former Executive
Vice
President
State Street Corporation
Brookline, MA
John A.
Fry
President
Drexel
University
Philadelphia, PA
Anthony D.
Knerr
Founder and
Managing
Director
AKA Strategy
New York, NY
|
Lucinda S.
Landreth
Former Chief
Investment
Officer
Assurant, Inc.
Philadelphia, PA
Frances
A.
Sevilla-Sacasa
Chief Executive Officer
Banco Itaú
Europa
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
|
|
|
|
David F.
Connor
Senior Vice
President,
Deputy 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
|
David P.
OConnor
Executive Vice
President,
General Counsel,
and Chief Legal Officer
Delaware
Investments
Family of Funds
Philadelphia, PA
|
Richard
Salus
Senior Vice
President and
Chief Financial Officer
Delaware Investments
Family
of Funds
Philadelphia, PA
|
|
|
|
|
This annual report is
for the information of Delaware Small Cap Value Fund shareholders,
but it may be used with prospective investors when preceded or accompanied
by the Delaware 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 Funds 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 SECs 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 Funds Schedule of Investments are available
without charge on the Funds website at delawareinvestments.com. The
Funds Forms N-Q may be reviewed and copied at the SECs 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 Funds website at
delawareinvestments.com; and (ii) on the SECs website at
sec.gov.
|
58