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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 11/25/22 Delaware Group Income Funds N-CSR/A 7/31/22 3:2.5M DG3/FA → Delaware Corporate Bond Fund ⇒ Class A (DGCAX) — Class C (DGCCX) — Class R (DGCRX) — Class R6 (DGCZX) — Institutional Class (DGCIX) → Delaware Extended Duration Bond Fund ⇒ Class A (DEEAX) — Class C (DEECX) — Class R (DEERX) — Class R6 (DEZRX) — Institutional Class (DEEIX) |
Document/Exhibit Description Pages Size 1: N-CSR/A Amendment to Certified Shareholder Report HTML 2.41M 3: EX-99.906 CERT Certifications Pursuant to Section 906 of the HTML 8K Sarbanes-Oxley Act of 2002 2: EX-99.CERT Certifications HTML 24K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: | 811-02071 |
Exact name of registrant as specified in charter: | Delaware Group® Income Funds |
Address of principal executive offices: | 610 Market Street Philadelphia, PA 19106 |
Name and address of agent for service: | David F. Connor, Esq. 610 Market Street Philadelphia, PA 19106 |
Registrant’s telephone number, including area code: | (800) 523-1918 |
Date of fiscal year end: | July 31 |
Date of reporting period: | July 31, 2022 |
Item 1. Reports to Stockholders
Annual report
Fixed income mutual funds
(As revised November 23, 2022 to reflect a reverse stock split for
each Fund)
Delaware Corporate Bond Fund
Delaware Extended Duration Bond Fund
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 their summary prospectuses, which may be obtained by visiting delawarefunds.com/literature or calling 800 523-1918. Investors should read the prospectus and the summary prospectus carefully before investing.
You can obtain shareholder reports and prospectuses online instead of in the mail.
Visit delawarefunds.com/edelivery.
Experience Delaware Funds by Macquarie®
Macquarie Asset Management (MAM) is a global asset manager that aims to deliver positive impact for everyone. MAM Public Investments traces its roots to 1929 and partners with institutional and individual clients to deliver specialist active investment capabilities across global equities, fixed income, and multi-asset solutions using a conviction-based, long-term approach to investing. In the US, retail investors recognize our Delaware Funds by Macquarie family of funds as one of the oldest mutual fund families.
If you are interested in learning more about creating an investment plan, contact your financial advisor.
You can learn more about Delaware Funds or obtain a prospectus for Delaware Corporate Bond Fund and Delaware Extended Duration Bond Fund at delawarefunds.com/literature.
● | Check your account balance and transactions |
● | View statements and tax forms |
● | Make purchases and redemptions |
Visit delawarefunds.com/account-access.
Macquarie Asset Management (MAM) is the asset management division of Macquarie Group. MAM is a full-service asset manager offering a diverse range of products across public and private markets including fixed income, equities, multi-asset solutions, private credit, infrastructure, renewables, natural assets, real estate, and asset finance. The Public Investments business is a part of MAM and includes the following investment advisers: Macquarie Investment Management Business Trust (MIMBT), Macquarie Funds Management Hong Kong Limited, Macquarie Investment Management Austria Kapitalanlage AG, Macquarie Investment Management Global Limited, Macquarie Investment Management Europe Limited, and Macquarie Investment Management Europe S.A.
The Funds are distributed by Delaware Distributors, L.P. (DDLP), an affiliate of MIMBT and Macquarie Group Limited.
Other than Macquarie Bank Limited ABN 46 008 583 542 ("Macquarie Bank"), any Macquarie Group entity noted in this document is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these other Macquarie Group entities do not represent deposits or other liabilities of Macquarie Bank. Macquarie Bank does not guarantee or otherwise provide assurance in respect of the obligations of these other Macquarie Group entities. In addition, if this document relates to an investment, (a) the investor is subject to investment risk including possible delays in repayment and loss of income and principal invested and (b) none of Macquarie Bank or any other Macquarie Group entity guarantees any particular rate of return on or the performance of the investment, nor do they guarantee repayment of capital in respect of the investment.
The Funds are governed by US laws and regulations.
Unless otherwise noted, views expressed herein are current as of July 31, 2022, and subject to change for events occurring after such date.
The Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested.
Advisory services provided by Delaware Management Company, a series of MIMBT, a US registered investment advisor.
All third-party marks cited are the property of their respective owners.
© 2022 Macquarie Management Holdings, Inc.
Delaware Corporate Bond Fund and | |
Delaware Extended Duration Bond Fund | July 31, 2022 (Unaudited) |
Performance preview (for the year ended July 31, 2022) | |||||
Delaware Corporate Bond Fund (Institutional Class shares) | 1-year return | -13.69 | % | ||
Delaware Corporate Bond Fund (Class A shares) | 1-year return | -13.91 | % | ||
Bloomberg US Corporate Investment Grade Index (benchmark) | 1-year return | -12.61 | % |
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Corporate Bond Fund, please see the table on page 7. Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service fee.
The performance of Class A shares excludes the applicable sales charge. The performance of both Institutional Class shares and Class A shares reflects the reinvestment of all distributions.
Please see page 10 for a description of the index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
Delaware Extended Duration Bond Fund (Institutional Class shares) | 1-year return | -19.90 | % | |
Delaware Extended Duration Bond Fund (Class A shares) | 1-year return | -20.07 | % | |
Bloomberg Long US Corporate Index (benchmark) | 1-year return | -19.79 | % |
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Extended Duration Bond Fund, please see the table on page 12. Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service fee.
The performance of Class A shares excludes the applicable sales charge. The performance of both Institutional Class shares and Class A shares reflects the reinvestment of all distributions.
Please see page 15 for a description of the index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
Investment objectives
The Funds seek to provide investors with total return.
Market review
The first five months of the Funds’ fiscal year ended July 31, 2022 – August through December 2021 – can best be described as calm, with little movement in rates. Although the overall economic environment was slowing after the superheated recovery that characterized the latter half of the previous fiscal period, economic fundamentals were still sound. The one concern that many investors shared was inflation.
When the fiscal year began, the US Federal Reserve noted various pressures on prices and concluded that inflation was real but transitory. As 2022 began, however, it became apparent to all that inflation was severe and sticky, owing to a combination of labor shortages, low unemployment, high consumer demand, and supply chain shortages.
As did many investors, we foresaw that the Fed would react by raising rates. What we did not anticipate was just how fast, steep, and tenacious those increases would be. Many investors expected that rates would rise gradually and were surprised by the Fed’s pace of hikes that began with a
1
Portfolio management review
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
0.25-percentage-point increase in mid-March followed by a 0.50-percentage-point hike in early May and increases of 0.75 percentage points in both mid-June and late July. That said, we believe the Fed appears to have made the right call. Though the Fed was initially constrained by the need to reduce its balance sheet, by the time it acted, a more aggressive approach seemed necessary.
The Russia-Ukraine war and China’s economic lockdowns to prevent the spread of COVID-19 also surprised investors. Both caused severe disruptions of the global supply chain, putting significant pressure on inflation. The world learned an expensive lesson on just how important Ukraine is to the global supply of agricultural and energy products. While less surprising, the disruption in the supply of Russian energy was also painful. The problems in China were unexpected as the spread of the virus began to increase despite the onset of warmer weather. Rather than take a more moderate approach to managing the virus as many observers had predicted, China reacted with a broad swath of shutdowns that sharply curtailed industrial output.
All three events – the Fed’s aggressive response to inflation, the Russia-Ukraine war, and China’s zero-COVID policy – had a dramatic effect on bond markets in the latter half of the Funds' fiscal year. Driven primarily by rates and inflation, the first half of 2022 was the corporate bond market’s worst opening six months of any calendar year on record. This was attributable mainly to duration, a measure of a portfolio’s sensitivity to higher interest rates. The longer the duration of a portfolio, the more sensitive it is to higher rates.
As 2022 progressed, we saw significant rate volatility. When the Fed began raising rates aggressively, and investors began talking of an imminent recession, spreads reacted negatively and began to widen. The 10-year Treasury yield rose from 1.51% at December 31, 2021 to 2.65% at end of July 2022, an increase of 114 basis points (or 1.14 percentage points), which sharply stung long-duration credits. While spreads in the investment grade market increased only about 45 to 50 basis points, the combination of rising rates and widening spreads was both unusual and painful to investors.
Looking at the relative performance of investment grade versus high yield securities, duration was the key differentiator, with the activity from January through July 2022 driving results for the entire fiscal year. High yield performed much better than investment grade, with most of the damage in the investment grade market resulting more from duration than from widening spreads. Because high yield tends to be a shorter-duration asset class, it held up better. Given the perception that the corporate finance world is in good shape, with solid credit metrics and profit margins, investment grade credits tend to be longer duration. The result was a 12.6% decline for investment grade bonds, as measured by the Bloomberg US Corporate Investment Grade Index, for the fiscal year. High yield bonds, as measured by the Bloomberg US Corporate High-Yield Index, declined 8.0%, about two-thirds of investment grade’s loss.
Issuance in 2021 was the second-highest annual total ever, behind only the record pace set in 2020. While tapering off somewhat in 2022, it remained stronger than we would have expected. At July 31, 2022, year-to-date issuance was running about 15% below the previous year’s torrid pace. With rate hikes looming, however, many companies rushed to obtain financing before rates could rise even higher. So even though issuance was down, it was generally higher than anticipated. Some
2
sectors, notably banking, unexpectedly flooded the market with new issuance.
As difficult as the first half of 2022 was, there was some good news for bond investors. Throughout the first half of the Funds’ fiscal year and well into the second half, corporate profitability was never higher, with record-setting margins and healthy cash flows. From a fundamental standpoint, the corporate bond market was extremely healthy. We entered 2022 with the expectation that credit upgrades would outnumber downgrades, and this proved to be true. Even at fiscal year-end, despite the worries of recession, credit upgrades were still outpacing downgrades. We think that may continue into 2023.
Source: Bloomberg.
Within the Funds
For the fiscal year ended July 31, 2022, Delaware Corporate Bond Fund underperformed its benchmark, the Bloomberg US Corporate Investment Grade Index. The Fund’s Institutional Class shares returned -13.69%. The Fund’s Class A shares returned -13.91% at net asset value and -17.83% at maximum offer price. These figures reflect all distributions reinvested. During the same period, the benchmark returned -12.61%. For complete, annualized performance of Delaware Corporate Bond Fund, please see the table on page 7.
During the same period, Delaware Extended Duration Bond Fund underperformed its benchmark, the Bloomberg Long US Corporate Index. The Fund’s Institutional Class shares returned -19.90%. The Fund’s Class A shares returned -20.07% at net asset value and -23.71% at maximum offer price. These figures reflect all distributions reinvested. During the same period, the benchmark returned -19.79%. For complete, annualized performance of Delaware Extended Duration Bond Fund, please see the table on page 12.
Duration was the chief factor in the underperformance of both Funds. Given the overweight to BBB-rated spread duration of the Funds’ holdings, higher interest rates drove the price of credits held in the portfolios sharply lower. Somewhat offsetting that, both Funds benefited from out-of-benchmark investments in high yield (non-investment-grade) securities, which generally outperformed their investment grade counterparts for the fiscal year by virtue of their lower-duration nature. The Funds are each allowed to invest up to 20% of their assets in high yield securities; each maintained a portfolio allocation that varied throughout the fiscal year, as described later.
The fiscal year was an unusual period for the Funds, in our view. Although we believe that most of the underperformance was attributable to rising rates and higher duration, we acknowledge that credit spreads widened meaningfully as well. It is rare to see rates rise and spreads widen at the same time. Usually spreads increase in the face of a potential recession and consequently weigh on issuers’ earnings. But this year, rates and spreads moved in the same direction, resulting in the corporate bond market’s worst start to a calendar year in its history.
Delaware Corporate Bond Fund
Although the Fund performed fairly well in the latter part of 2021, we knew that valuations were rich coming into 2022. At the same time, credit fundamentals and credit metrics were still extremely strong, and we wanted the Fund to own bonds that exhibited higher yields or had higher spreads than the overall benchmark. We still believed there was a long
3
Portfolio management review
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
runway before the Fed would become aggressive in raising rates. And of course, we did not anticipate the Russia-Ukraine war. So, we began 2022 with the assumption that the best way to add performance in this environment was through higher yield, given that we did not expect further price appreciation or spread compression, either of which would also have contributed to performance, if available. We purchased credits that had higher spreads and higher yields, believing that the strong economic backdrop would afford us some time for the Fund to benefit from this strategy.
When sentiment turned, however, the Fund’s positions were affected more than those in the benchmark, which contained higher-quality credits with less income, less spread, and less yield, the types of credits that we would not have gravitated toward unless the economy were signaling problems ahead. We got no such signals in January and February. Our attempt to achieve a higher yield and carry higher spreads than the benchmark was the source of a large part of the Fund’s underperformance.
On a more granular level, the banking sector detracted the most from the Fund’s performance. Ironically, the credit quality in the banking industry has generally been pristine, much stronger today than it was during the recession of 2008-2009. The Fund underperformed entirely due to security selection. In an effort to add yield, we invested in longer-duration and subordinated instruments, under the assumption that fundamentals were strong and valuations were attractive, in our view, relative to other sectors. As the year progressed, however, the combination of higher rates and longer duration proved detrimental for such a strategy. Banking credits that the Fund owned included Credit Suisse Group AG and Deutsche Bank AG.
Aside from banking, the remainder of the financial sector also detracted significantly from performance, again mainly during the latter half of the fiscal year. Although the Fund’s holdings were primarily BBB-rated credits (investment grade), life insurers were more volatile than the overall market because of capital market volatility. Aircraft lessors underperformed as some bonds had exposure to Russian aircraft that could not be seized after the outbreak of war in Ukraine. Real estate investment trusts (REITs) also lagged mainly due to rate volatility. Fund holdings in the sector included life insurer Brighthouse Financial Inc. and retirement services provider Athene Holding Ltd., which merged into Apollo Global Management during the fiscal year.
Among contributors to performance during the period, the Fund’s overweight in energy, particularly midstream and production, was beneficial. While we didn’t expect oil prices to reach, much less exceed, $100 a barrel, the Fund did benefit from the increase. Cheniere Energy Inc., a producer of liquefied natural gas; Devon Energy Corp., an exploration company; and ONEOK Inc., a midstream service provider, were among the Fund’s holdings in the sector.
The Fund likewise benefited from its transportation holdings, particularly airlines, including Delta Air Lines Inc. and United Airlines Holdings Inc. We recognize that airlines could struggle in a recession, but the Fund’s holdings have shorter duration and what we view as an attractive structure that includes collateral packages.
In addition, the Fund’s out-of-benchmark allocation to risk-free assets, including Treasurys and short-duration sectors, such as
4
bank loans and convertibles, contributed to performance during the fiscal year.
Most of the changes that we made to the Fund’s portfolio occurred in the second half of the fiscal year. Once higher rates and wider spreads had done material damage to the asset class, we sought to increase the credit quality of the Fund. With prices at historic lows, we began buying lower-priced bonds. The asset class experienced some of the lowest dollar prices on securities in the past 30 to 40 years. Consequently, the decision to buy bonds of high-quality issuers at historically low prices appeared to us to be an attractive opportunity.
At fiscal year end, the Fund was positioned with 90% of its assets in investment grade securities and the balance in high yield. Earlier in the fiscal year, the Fund had as much as 15% in high yield. We also reduced the Fund’s BBB-rated allocation within investment grade, having moved up in quality within the asset class.
During the fiscal year, the Fund held a small position in credit default swaps on the investment grade index as a temporary hedge given valuations and technicals we observed in the market. The Fund also held a small position in credit default swaps on the investment grade index via options as a way to add incremental income with upside potential for performance gains. Neither position had a material impact on the Fund’s performance.
Delaware Extended Duration Bond Fund
Delaware Extended Duration Bond Fund is designed to provide investors with access to the long end of the US investment grade corporate market. The management of the Fund is strategically like that of Delaware Corporate Bond Fund. As many companies do not issue longer-duration bonds, however, we identify additional opportunities as needed to complete the Fund’s portfolio.
On a sector basis, financials were a leading detractor from performance as higher interest rates roiled capital markets and, in turn, life insurance companies, including Brighthouse Financial Inc. and Athene Holding Ltd., mentioned earlier. The Fund also had exposure to several aircraft lessors, who were blindsided by the outbreak of war in Ukraine. Economic sanctions imposed on Russia made it impossible for lessors to collect payments or reclaim aircraft, and those credits suffered.
The Fund also held bonds issued by chemical companies in the industrials sector. These were typically long duration and given the overweight positions, it detracted from performance during the fiscal year. Fund holdings included petrochemical producer Westlake Corp. and coatings manufacturer The Sherwin-Williams Co.
The Fund’s exposure to long Treasury futures used to control duration also detracted from performance. The Fund was invested in securities issued by banks and aircraft lessors, and in bank loans and high yield bonds. While these are often strong-performing securities, they are typically issued in the intermediate part of the yield curve that is not consistent with an extended duration portfolio. We use Treasury futures to add duration to the Fund’s portfolio, offsetting the shorter-duration credits. In this case, the long-duration futures show as detractors from performance, even as the underlying securities, in many cases, outperformed by virtue of being in the right spot on the curve.
As was the case with Delaware Corporate Bond Fund, the Fund benefited from investments in airlines Delta Air Lines Inc. and United Airlines Holdings Inc. The Fund also benefited from several high yield credits
5
Portfolio management review
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
including US Foods Inc., a food service distributor, and NCR Corp., a developer and supplier of point-of-sale systems and services for retailers.
At the end of the fiscal year, approximately 9% of the Fund’s portfolio was invested in high yield credits and bank loans, down from a peak exposure of about 13% in high yield earlier in the period. The remainder of the portfolio was invested in investment grade securities, where we have reduced the Fund’s position in BBB-rated bonds somewhat to go higher in quality, given the dramatic dollar-price drops that have taken place. The average dollar price in the Fund’s portfolio at the close of the period was $80, compared with the benchmark’s average price of $93.
During the period, the Fund made minimal use of Treasury futures to hedge out unwanted exposures to the Treasury yield curve. The Fund also held a small position in credit default swaps on the investment grade index as a temporary hedge given valuations and technicals we observed in the market. Lastly, the Fund held a small position in credit default swaps on the investment grade index via options as a way to add incremental income with upside potential for performance gains. None of these positions had a material impact on the Fund’s performance.
6
Performance summaries | |
Delaware Corporate Bond Fund | July 31, 2022 (Unaudited) |
The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.
Fund and benchmark performance1,2 | Average annual total returns through July 31, 2022 | |||||||||||||||||||
1 year | 5 year | 10 year | Lifetime | |||||||||||||||||
Class A (Est. September 15, 1998) | ||||||||||||||||||||
Excluding sales charge | -13.91 | % | +1.67 | % | +2.74 | % | +5.55 | % | ||||||||||||
Including sales charge | -17.83 | % | +0.73 | % | +2.28 | % | +5.35 | % | ||||||||||||
Class C (Est. September 15, 1998) | ||||||||||||||||||||
Excluding sales charge | -14.55 | % | +0.91 | % | +1.98 | % | +4.77 | % | ||||||||||||
Including sales charge | -15.38 | % | +0.91 | % | +1.98 | % | +4.77 | % | ||||||||||||
Class R (Est. June 2, 2003) | ||||||||||||||||||||
Excluding sales charge | -14.26 | % | +1.41 | % | +2.47 | % | +4.63 | % | ||||||||||||
Including sales charge | -14.26 | % | +1.41 | % | +2.47 | % | +4.63 | % | ||||||||||||
Institutional Class (Est. September 15, 1998) | ||||||||||||||||||||
Excluding sales charge | -13.69 | % | +1.92 | % | +3.00 | % | +5.82 | % | ||||||||||||
Including sales charge | -13.69 | % | +1.92 | % | +3.00 | % | +5.82 | % | ||||||||||||
Class R6 (Est. January 31, 2019) | ||||||||||||||||||||
Excluding sales charge | -13.78 | % | — | — | +2.62 | % | ||||||||||||||
Including sales charge | -13.78 | % | — | — | +2.62 | % | ||||||||||||||
Bloomberg US Corporate Investment | ||||||||||||||||||||
Grade Index | -12.61 | % | +1.78 | % | +2.65 | % | +4.83 | %* |
* | The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date. |
1 |
Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares. |
Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed in the “Fund expense ratios” table on page 9. Performance would have been lower had expense limitations not been in effect.
Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service (12b-1) fee.
Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual 12b-1 fee of 0.25% of average daily net assets.
7
Performance summaries
Delaware Corporate Bond Fund
Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.
Class C shares are sold with a contingent deferred sales charge (CDSC) of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-1 fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales charges, assumes either that CDSCs did not apply or that the investment was not redeemed.
Class R shares are available only for certain retirement plan products. They are sold without a sales charge and have an annual 12b-1 fee of 0.50% of average daily net assets.
Class R6 shares are available only to certain investors. In addition, Class R6 shares do not pay any service fees, sub-accounting fees, and/or sub-transfer agency fees to any brokers, dealers, or other financial intermediaries. Class R6 shares pay no 12b-1 fee.
Fixed income securities and bond funds can lose value, and investors can lose principal as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt. This includes prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity at the time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.
High yielding, non-investment-grade bonds (junk bonds) involve higher risk than investment grade bonds. The high yield secondary market is particularly susceptible to liquidity problems when institutional investors, such as mutual funds and certain other financial institutions, temporarily stop buying bonds for regulatory, financial, or other reasons. In addition, a less liquid secondary market makes it more difficult to obtain precise valuations of the high yield securities.
The Fund may invest in derivatives, which may involve additional expenses and are subject to risk, including the risk that an underlying security or securities index moves in the opposite direction from what the portfolio manager anticipated. A derivatives transaction depends upon the counterparties’ ability to fulfill their contractual obligations.
If and when the Fund invests in forward foreign currency contracts or uses other investments to hedge against currency risks, the Fund will be subject to special risks, including counterparty risk.
The Fund may experience portfolio turnover in excess of 100%, which could result in higher transaction costs and tax liability.
International investments entail risks including fluctuation in currency values, differences in accounting principles, or economic or political instability. Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility, lower trading volume, and higher risk of market closures. In many emerging markets, there is substantially less publicly available information and the available information may be incomplete or misleading. Legal claims are generally more difficult to pursue.
IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.
8
The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.
This document may mention bond ratings published by nationally recognized statistical rating organizations (NRSROs) Standard & Poor’s, Moody’s Investors Service, and Fitch, Inc. For securities rated by an NRSRO other than S&P, the rating is converted to the equivalent S&P credit rating. Bonds rated AAA are rated as having the highest quality and are generally considered to have the lowest degree of investment risk. Bonds rated AA are considered to be of high quality, but with a slightly higher degree of risk than bonds rated AAA. Bonds rated A are considered to have many favorable investment qualities, though they are somewhat more susceptible to adverse economic conditions. Bonds rated BBB are believed to be of medium-grade quality and generally riskier over the long term. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.
2 | The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. The expense ratios below may differ from the expense ratios in the “Financial highlights” since they are based on different time periods and the expense ratios in the prospectus include acquired fund fees and expenses, if any. See Note 2 in “Notes to financial statements” for additional details. Please see the “Financial highlights” section in this report for the most recent expense ratios. |
Institutional | |||||||||||||||||||||||||
Fund expense ratios | Class A | Class C | Class R | Class | Class R6 | ||||||||||||||||||||
Total annual operating expenses (without fee waivers) |
0.91 | % | 1.66 | % | 1.16 | % | 0.66 | % | 0.57 | % | |||||||||||||||
Net expenses (including fee waivers, if any) |
0.82 | % | 1.57 | % | 1.07 | % | 0.57 | % | 0.48 | % | |||||||||||||||
Type of waiver | Contractual | Contractual | Contractual | Contractual | Contractual |
9
Performance summaries
Delaware Corporate Bond Fund
Performance of a $10,000 investment1
For the period July 31, 2012 through July 31, 2022
Starting value | Ending value | ||||||
Delaware Corporate Bond Fund — Institutional Class shares |
$10,000 | $13,441 | |||||
Bloomberg US Corporate Investment Grade Index |
$10,000 | $12,991 | |||||
Delaware Corporate Bond Fund — Class A shares |
$9,550 | $12,529 |
1 | The “Performance of a $10,000 investment” graph assumes $10,000 invested in Institutional Class and Class A shares of the Fund on July 31, 2012, and includes the effect of a 4.50% front-end sales charge (for Class A shares) and the reinvestment of all distributions. The graph does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 9. Please note additional details on pages 7 through 11. |
The graph also assumes $10,000 invested in the Bloomberg US Corporate Investment Grade Index as of July 31, 2012. The Bloomberg US Corporate Investment Grade Index is composed of US dollar-denominated, investment grade corporate bonds that are SEC-registered or 144A with registration rights, and issued by industrial, utility, and financial companies. All bonds in the index have at least one year to maturity.
The Bloomberg US Corporate High-Yield Index, mentioned on page 2, is composed of US dollar-denominated, non-investment-grade corporate bonds for which the middle rating among Moody’s Investors Service, Inc., Fitch, Inc., and Standard & Poor’s is Ba1/BB+/BB+ or below.
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.
Performance of other Fund classes will vary due to different charges and expenses.
10
Nasdaq symbols | CUSIPs | |||||
Class A | DGCAX | 245908785 | ||||
Class C | DGCCX | 245908769 | ||||
Class R | DGCRX | 245908744 | ||||
Institutional Class | DGCIX | 245908751 | ||||
Class R6 | DGCZX | 24610J100 |
11
Performance summaries | |
Delaware Extended Duration Bond Fund | July 31, 2022 (Unaudited) |
The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.
Fund and benchmark performance1,2 | Average annual total returns through July 31, 2022 | |||||||
1 year | 5 year | 10 year | Lifetime | |||||
Class A (Est. September 15, 1998) | ||||||||
Excluding sales charge | -20.07% | +1.43% | +3.06% | +6.67% | ||||
Including sales charge | -23.71% | +0.51% | +2.58% | +6.47% | ||||
Class C (Est. September 15, 1998) | ||||||||
Excluding sales charge | -20.66% | +0.71% | +2.30% | +5.89% | ||||
Including sales charge | -21.40% | +0.71% | +2.30% | +5.89% | ||||
Class R (Est. October 3, 2005) | ||||||||
Excluding sales charge | -20.35% | +1.18% | +2.81% | +5.78% | ||||
Including sales charge | -20.35% | +1.18% | +2.81% | +5.78% | ||||
Institutional Class (Est. September 15, 1998) | ||||||||
Excluding sales charge | -19.90% | +1.68% | +3.32% | +6.94% | ||||
Including sales charge | -19.90% | +1.68% | +3.32% | +6.94% | ||||
Class R6 (Est. May 2, 2016) | ||||||||
Excluding sales charge | -19.83% | +1.76% | — | +2.76% | ||||
Including sales charge | -19.83% | +1.76% | — | +2.76% | ||||
Bloomberg Long US Corporate Index | -19.79% | +1.86% | +3.20% | +5.77%* |
* | The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date. |
1 | Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares. |
Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed in the “Fund expense ratios” table on page 14. Performance would have been lower had expense limitations not been in effect.
Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service (12b-1) fee.
Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual 12b-1 fee of 0.25% of average daily net assets. Performance for Class A shares,
12
excluding sales charges, assumes that no front-end sales charge applied.
Class C shares are sold with a contingent deferred sales charge (CDSC) of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-1 fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales charges, assumes either that CDSCs did not apply or that the investment was not redeemed.
Class R shares are available only for certain retirement plan products. They are sold without a sales charge and have an annual 12b-1 fee of 0.50% of average daily net assets.
Class R6 shares are available only to certain investors. In addition, Class R6 shares do not pay any service fees, sub-accounting fees, and/or sub-transfer agency fees to any brokers, dealers, or other financial intermediaries. Class R6 shares pay no 12b-1 fee.
Fixed income securities and bond funds can lose value, and investors can lose principal as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt. This includes prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity at the time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.
High yielding, non-investment-grade bonds (junk bonds) involve higher risk than investment grade bonds. The high yield secondary market is particularly susceptible to liquidity problems when institutional investors, such as mutual funds and certain other financial institutions, temporarily stop buying bonds for regulatory, financial, or other reasons. In addition, a less liquid secondary market makes it more difficult to obtain precise valuations of the high yield securities.
The Fund may invest in derivatives, which may involve additional expenses and are subject to risk, including the risk that an underlying security or securities index moves in the opposite direction from what the portfolio manager anticipated. A derivatives transaction depends upon the counterparties’ ability to fulfill their contractual obligations.
If and when the Fund invests in forward foreign currency contracts or uses other investments to hedge against currency risks, the Fund will be subject to special risks, including counterparty risk.
The Fund may experience portfolio turnover in excess of 100%, which could result in higher transaction costs and tax liability.
International investments entail risks including fluctuation in currency values, differences in accounting principles, or economic or political instability. Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility, lower trading volume, and higher risk of market closures. In many emerging markets, there is substantially less publicly available information and the available information may be incomplete or misleading. Legal claims are generally more difficult to pursue.
IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.
13
Performance summaries
Delaware Extended Duration Bond Fund
The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.
This document may mention bond ratings published by nationally recognized statistical rating organizations (NRSROs) Standard & Poor’s, Moody’s Investors Service, and Fitch, Inc. For securities rated by an NRSRO other than S&P, the rating is converted to the equivalent S&P credit rating. Bonds rated AAA are rated as having the highest quality and are generally considered to have the lowest degree of investment risk. Bonds rated AA are considered to be of high quality, but with a slightly higher degree of risk than bonds rated AAA. Bonds rated A are considered to have many favorable investment qualities, though they are somewhat more susceptible to adverse economic conditions. Bonds rated BBB are believed to be of medium-grade quality and generally riskier over the long term. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.
2 | The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. The expense ratios below may differ from the expense ratios in the “Financial highlights” since they are based on different time periods and the expense ratios in the prospectus include acquired fund fees and expenses, if any. See Note 2 in “Notes to financial statements” for additional details. Please see the “Financial highlights” section in this report for the most recent expense ratios. |
Institutional | ||||||||||
Fund expense ratios | Class A | Class C | Class R | Class | Class R6 | |||||
Total annual operating expenses | ||||||||||
(without fee waivers) | 0.99% | 1.74% | 1.24% | 0.74% | 0.65% | |||||
Net expenses (including fee | ||||||||||
waivers, if any) | 0.82% | 1.57% | 1.07% | 0.57% | 0.48% | |||||
Type of waiver | Contractual | Contractual | Contractual | Contractual | Contractual |
14
Performance of a $10,000 investment1
For the period July 31, 2012 through July 31, 2022
Starting value | Ending value | ||||
Delaware Extended Duration Bond Fund — Institutional Class shares | $10,000 | $13,862 | |||
Bloomberg Long US Corporate Index | $10,000 | $13,708 | |||
Delaware Extended Duration Bond Fund — Class A shares | $9,550 | $12,907 |
1 | The “Performance of a $10,000 investment” graph assumes $10,000 invested in Institutional Class and Class A shares of the Fund on July 31, 2012, and includes the effect of a 4.50% front-end sales charge (for Class A shares) and the reinvestment of all distributions. The graph does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 14. Please note additional details on pages 12 through 16. |
The graph also assumes $10,000 invested in the Bloomberg Long US Corporate Index as of July 31, 2012. The Bloomberg Long US Corporate Index is composed of US dollar-denominated, investment grade corporate bonds that are SEC-registered or 144A with registration rights, and issued by industrial, utility, and financial companies. All bonds in the index have at least 10 years to maturity.
The Bloomberg US Corporate Investment Grade Index, mentioned on page 2, is composed of US dollar-denominated, investment grade corporate bonds that are US Securities and Exchange Commission (SEC)-registered or 144A with registration rights, and issued by industrial, utility, and financial companies. All bonds in the index have at least one year to maturity.
The Bloomberg US Corporate High-Yield Index, mentioned on page 2, is composed of US dollar-denominated, non-investment-grade corporate bonds for which the middle rating
15
Performance summaries
Delaware Extended Duration Bond Fund
among Moody’s Investors Service, Inc., Fitch, Inc., and Standard & Poor’s is Ba1/BB+/BB+ or below.
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.
Performance of other Fund classes will vary due to different charges and expenses.
Nasdaq symbols | CUSIPs | ||||
Class A | DEEAX | 245908835 | |||
Class C | DEECX | 245908819 | |||
Class R | DEERX | 245908728 | |||
Institutional Class | DEEIX | 245908793 | |||
Class R6 | DEZRX | 245908629 |
16
Disclosure of Fund expenses
For the six-month period from February 1, 2022 to July 31, 2022 (Unaudited)
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other Fund expenses. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period from February 1, 2022 to July 31, 2022.
Actual expenses
The first section of the tables 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 tables shown, “Hypothetical 5% return,” provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios 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 each 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 tables 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 each 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 tables reflect fee waivers in effect and assume reinvestment of all dividends and distributions.
17
Disclosure of Fund expenses
For the six-month period from February 1, 2022 to July 31, 2022 (Unaudited)
Delaware Corporate Bond Fund
Expense analysis of an investment of $1,000
Beginning | Ending | Expenses | |||||||||||||||
Account Value | Account Value | Annualized | Paid During Period | ||||||||||||||
2/1/22 | 7/31/22 | Expense Ratio | 2/1/22 to 7/31/22* | ||||||||||||||
Actual Fund return† | |||||||||||||||||
Class A | $1,000.00 | $904.40 | 0.82 | % | $3.87 | ||||||||||||
Class C | 1,000.00 | 901.00 | 1.57 | % | 7.40 | ||||||||||||
Class R | 1,000.00 | 901.80 | 1.07 | % | 5.05 | ||||||||||||
Institutional Class | 1,000.00 | 905.50 | 0.57 | % | 2.69 | ||||||||||||
Class R6 | 1,000.00 | 904.20 | 0.47 | % | 2.22 | ||||||||||||
Hypothetical 5% return (5% return before expenses) | |||||||||||||||||
Class A | $1,000.00 | $1,020.73 | 0.82 | % | $4.11 | ||||||||||||
Class C | 1,000.00 | 1,017.01 | 1.57 | % | 7.85 | ||||||||||||
Class R | 1,000.00 | 1,019.49 | 1.07 | % | 5.36 | ||||||||||||
Institutional Class | 1,000.00 | 1,021.97 | 0.57 | % | 2.86 | ||||||||||||
Class R6 | 1,000.00 | 1,022.46 | 0.47 | % | 2.36 |
Delaware Extended Duration Bond Fund
Expense analysis of an investment of $1,000
Beginning | Ending | Expenses | |||||||||||||||
Account Value | Account Value | Annualized | Paid During Period | ||||||||||||||
2/1/22 | 7/31/22 | Expense Ratio | 2/1/22 to 7/31/22* | ||||||||||||||
Actual Fund return† | |||||||||||||||||
Class A | $1,000.00 | $851.40 | 0.82 | % | $3.76 | ||||||||||||
Class C | 1,000.00 | 849.60 | 1.57 | % | 7.20 | ||||||||||||
Class R | 1,000.00 | 850.60 | 1.07 | % | 4.91 | ||||||||||||
Institutional Class | 1,000.00 | 853.50 | 0.57 | % | 2.62 | ||||||||||||
Class R6 | 1,000.00 | 852.50 | 0.48 | % | 2.20 | ||||||||||||
Hypothetical 5% return (5% return before expenses) | |||||||||||||||||
Class A | $1,000.00 | $1,020.73 | 0.82 | % | $4.11 | ||||||||||||
Class C | 1,000.00 | 1,017.01 | 1.57 | % | 7.85 | ||||||||||||
Class R | 1,000.00 | 1,019.49 | 1.07 | % | 5.36 | ||||||||||||
Institutional Class | 1,000.00 | 1,021.97 | 0.57 | % | 2.86 | ||||||||||||
Class R6 | 1,000.00 | 1,022.41 | 0.48 | % | 2.41 |
* |
“Expenses Paid During Period” are equal to the relevant Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
18
† |
Because actual returns reflect only the most recent six-month period, the returns shown may differ significantly from fiscal year returns. |
In addition to the Funds' expenses reflected on the previous page, each Fund also indirectly bears its portion of the fees and expenses of any investment companies (Underlying Funds) in which it invests. The tables on the previous page do not reflect the expenses of any Underlying Funds.
19
Security type / sector allocations | |
Delaware Corporate Bond Fund | As of July 31, 2022 (Unaudited) |
Sector designations may be different from the sector designations presented in other Fund materials. The sector designations may represent the investment manager’s internal sector classifications, which may result in the sector designations for one fund being different than another fund’s sector designations.
Security type / sector | Percentage of net assets | ||||
Convertible Bonds | 0.39 | % | |||
Corporate Bonds | 88.94 | % | |||
Banking | 18.64 | % | |||
Basic Industry | 3.97 | % | |||
Brokerage | 1.34 | % | |||
Capital Goods | 5.83 | % | |||
Communications | 9.94 | % | |||
Consumer Cyclical | 3.77 | % | |||
Consumer Non-Cyclical | 5.88 | % | |||
Electric | 8.81 | % | |||
Energy | 7.82 | % | |||
Finance Companies | 3.33 | % | |||
Insurance | 5.28 | % | |||
Natural Gas | 0.77 | % | |||
Real Estate Investment Trusts | 2.54 | % | |||
Technology | 8.33 | % | |||
Transportation | 2.28 | % | |||
Utilities | 0.41 | % | |||
Municipal Bonds | 0.33 | % | |||
Non-Agency Asset-Backed Securities | 1.79 | % | |||
Loan Agreements | 2.52 | % | |||
US Treasury Obligation | 1.14 | % | |||
Convertible Preferred Stock | 0.25 | % | |||
Short-Term Investments | 4.80 | % | |||
Total Value of Securities Before Options Written | 100.16 | % | |||
Options Written | 0.00 | % | |||
Liabilities Net of Receivables and Other Assets | (0.16 | %) | |||
Total Net Assets | 100.00 | % |
20
Security type / sector allocations | |
Delaware Extended Duration Bond Fund | As of July 31, 2022 (Unaudited) |
Sector designations may be different from the sector designations presented in other Fund materials. The sector designations may represent the investment manager’s internal sector classifications, which may result in the sector designations for one fund being different than another fund’s sector designations.
Security type / sector | Percentage of net assets | ||||
Convertible Bond | 0.15 | % | |||
Corporate Bonds | 93.16 | % | |||
Banking | 9.45 | % | |||
Basic Industry | 3.93 | % | |||
Brokerage | 0.93 | % | |||
Capital Goods | 4.85 | % | |||
Communications | 11.28 | % | |||
Consumer Cyclical | 4.25 | % | |||
Consumer Non-Cyclical | 7.64 | % | |||
Electric | 14.11 | % | |||
Energy | 11.95 | % | |||
Finance Companies | 1.84 | % | |||
Insurance | 10.87 | % | |||
Natural Gas | 4.21 | % | |||
Real Estate Investment Trusts | 0.92 | % | |||
Technology | 4.79 | % | |||
Transportation | 1.84 | % | |||
Utilities | 0.30 | % | |||
Municipal Bonds | 2.27 | % | |||
Loan Agreements | 0.64 | % | |||
Convertible Preferred Stock | 0.86 | % | |||
Short-Term Investments | 2.70 | % | |||
Total Value of Securities Before Options Written | 99.78 | % | |||
Options Written | 0.00 | % | |||
Receivables and Other Assets Net of Liabilities | 0.22 | % | |||
Total Net Assets | 100.00 | % |
21
Schedules of investments | |
Delaware Corporate Bond Fund | July 31, 2022 |
Principal | |||||||
amount° | Value (US $) | ||||||
Convertible Bonds – 0.39% | |||||||
Kaman 3.25% exercise price $65.26, maturity date | |||||||
5/1/24 | 3,500,000 | $ | 3,335,938 | ||||
Spirit Airlines 1.00% exercise price $49.07, maturity | |||||||
date 5/15/26 | 1,790,000 | 1,619,055 | |||||
Total Convertible Bonds (cost $5,106,654) | 4,954,993 | ||||||
Corporate Bonds – 88.94% | |||||||
Banking – 18.64% | |||||||
Ally Financial | |||||||
4.70% 5/15/26 µ, Ψ | 3,525,000 | 2,981,533 | |||||
5.75% 11/20/25 | 4,525,000 | 4,588,158 | |||||
8.00% 11/1/31 | 1,840,000 | 2,083,682 | |||||
Bank of America | |||||||
2.482% 9/21/36 µ | 11,720,000 | 9,483,941 | |||||
2.676% 6/19/41 µ | 1,795,000 | 1,359,151 | |||||
4.948% 7/22/28 µ | 3,090,000 | 3,181,005 | |||||
5.015% 7/22/33 µ | 1,865,000 | 1,946,565 | |||||
6.125% 4/27/27 µ, Ψ | 3,505,000 | 3,531,288 | |||||
Bank of New York Mellon | |||||||
4.596% 7/26/30 µ | 7,560,000 | 7,807,700 | |||||
4.70% 9/20/25 µ, Ψ | 8,770,000 | 8,756,845 | |||||
BPCE 144A 3.582% 10/19/42 #, µ | 2,695,000 | 2,017,330 | |||||
Fifth Third Bancorp 4.337% 4/25/33 µ | 4,180,000 | 4,115,948 | |||||
Goldman Sachs Group | |||||||
1.542% 9/10/27 µ | 10,839,000 | 9,705,456 | |||||
2.383% 7/21/32 µ | 10,220,000 | 8,628,784 | |||||
Huntington National Bank 4.552% 5/17/28 µ | 9,310,000 | 9,486,417 | |||||
JPMorgan Chase & Co. | |||||||
1.764% 11/19/31 µ | 15,640,000 | 12,801,385 | |||||
4.851% 7/25/28 µ | 9,705,000 | 9,965,178 | |||||
4.912% 7/25/33 µ | 1,865,000 | 1,946,376 | |||||
KeyBank 4.39% 12/14/27 | 1,445,000 | 1,469,244 | |||||
KeyCorp 4.789% 6/1/33 µ | 2,350,000 | 2,391,162 | |||||
Morgan Stanley | |||||||
1.928% 4/28/32 µ | 11,065,000 | 9,123,221 | |||||
2.484% 9/16/36 µ | 14,899,000 | 12,064,577 | |||||
NatWest Group 4.60% 6/28/31 µ, Ψ | 4,175,000 | 3,303,728 | |||||
PNC Bank 4.05% 7/26/28 | 3,665,000 | 3,625,441 | |||||
PNC Financial Services Group 6.00% 5/15/27 µ, Ψ | 3,675,000 | 3,707,156 | |||||
Popular 6.125% 9/14/23 | 5,020,000 | 5,070,150 |
22
Principal | ||||||
amount° | Value (US $) | |||||
Corporate Bonds (continued) | ||||||
Banking (continued) | ||||||
State Street | ||||||
1.684% 11/18/27 µ | 4,165,000 | $ | 3,810,544 | |||
2.203% 2/7/28 µ | 3,630,000 | 3,381,664 | ||||
4.421% 5/13/33 µ | 2,125,000 | 2,178,860 | ||||
SVB Financial Group | ||||||
2.10% 5/15/28 | 5,155,000 | 4,490,279 | ||||
4.00% 5/15/26 µ, ψ | 4,072,000 | 3,306,060 | ||||
4.57% 4/29/33 µ | 3,810,000 | 3,695,839 | ||||
Toronto-Dominion Bank 4.108% 6/8/27 | 9,770,000 | 9,890,965 | ||||
Truist Bank 2.636% 9/17/29 µ | 10,460,000 | 9,982,100 | ||||
Truist Financial | ||||||
4.916% 7/28/33 µ | 5,721,000 | 5,776,410 | ||||
4.95% 9/1/25 µ, ψ | 8,635,000 | 8,747,255 | ||||
UBS 7.625% 8/17/22 | 4,145,000 | 4,149,965 | ||||
UBS Group 144A 4.375% 2/10/31 #, µ, ψ | 4,390,000 | 3,539,438 | ||||
US Bancorp | ||||||
2.491% 11/3/36 µ | 3,030,000 | 2,557,020 | ||||
2.677% 1/27/33 µ | 2,230,000 | 1,998,368 | ||||
4.548% 7/22/28 µ | 14,185,000 | 14,563,288 | ||||
Wells Fargo & Co. | ||||||
4.611% 4/25/53 µ | 3,260,000 | 3,197,445 | ||||
4.808% 7/25/28 µ | 8,190,000 | 8,385,511 | ||||
238,792,432 | ||||||
Basic Industry – 3.97% | ||||||
Celanese US Holdings | ||||||
6.05% 3/15/25 | 5,245,000 | 5,291,412 | ||||
6.165% 7/15/27 | 1,215,000 | 1,234,618 | ||||
Georgia-Pacific 8.00% 1/15/24 | 4,345,000 | 4,630,098 | ||||
Graphic Packaging International 144A 3.50% 3/1/29 # | 3,155,000 | 2,847,928 | ||||
Newmont | ||||||
2.25% 10/1/30 | 3,210,000 | 2,742,335 | ||||
2.60% 7/15/32 | 2,570,000 | 2,195,643 | ||||
2.80% 10/1/29 | 9,845,000 | 8,909,545 | ||||
Sherwin-Williams 2.90% 3/15/52 | 11,730,000 | 8,220,997 | ||||
Steel Dynamics 1.65% 10/15/27 | 2,520,000 | 2,208,507 | ||||
Suzano Austria 3.125% 1/15/32 | 7,100,000 | 5,779,507 | ||||
Westlake 3.125% 8/15/51 | 9,465,000 | 6,809,349 | ||||
50,869,939 |
23
Schedules of investments
Delaware Corporate Bond Fund
Principal | ||||||
amount° | Value (US $) | |||||
Corporate Bonds (continued) | ||||||
Brokerage – 1.34% | ||||||
Blackstone Holdings Finance 144A 1.625% 8/5/28 # | 2,865,000 | $ | 2,491,597 | |||
Charles Schwab 5.375% 6/1/25 µ, ψ | 4,195,000 | 4,280,578 | ||||
Jefferies Group | ||||||
2.625% 10/15/31 | 10,260,000 | 8,287,362 | ||||
6.50% 1/20/43 | 2,090,000 | 2,119,056 | ||||
17,178,593 | ||||||
Capital Goods – 5.83% | ||||||
Amphenol 2.20% 9/15/31 | 3,585,000 | 3,050,424 | ||||
Ardagh Metal Packaging Finance USA 144A 4.00% | ||||||
9/1/29 # | 3,515,000 | 3,030,598 | ||||
Ashtead Capital | ||||||
144A 1.50% 8/12/26 # | 6,880,000 | 6,056,824 | ||||
144A 2.45% 8/12/31 # | 4,995,000 | 4,014,861 | ||||
Boeing 3.75% 2/1/50 | 9,770,000 | 7,417,531 | ||||
Lockheed Martin | ||||||
3.90% 6/15/32 | 3,205,000 | 3,307,256 | ||||
4.15% 6/15/53 | 2,390,000 | 2,347,072 | ||||
Madison IAQ 144A 4.125% 6/30/28 # | 1,880,000 | 1,666,253 | ||||
Pactiv Evergreen Group Issuer 144A 4.00% 10/15/27 # | 3,385,000 | 2,986,958 | ||||
Parker-Hannifin 4.25% 9/15/27 | 10,885,000 | 11,131,838 | ||||
Republic Services 2.375% 3/15/33 | 12,537,000 | 10,753,231 | ||||
Teledyne Technologies 2.25% 4/1/28 | 13,780,000 | 12,218,740 | ||||
Waste Connections 2.95% 1/15/52 | 2,315,000 | 1,767,310 | ||||
Weir Group 144A 2.20% 5/13/26 # | 5,605,000 | 4,966,885 | ||||
74,715,781 | ||||||
Communications – 9.94% | ||||||
Altice France | ||||||
144A 5.125% 1/15/29 # | 3,720,000 | 3,156,067 | ||||
144A 5.50% 10/15/29 # | 3,395,000 | 2,923,944 | ||||
AMC Networks | ||||||
4.25% 2/15/29 | 600,000 | 529,193 | ||||
4.75% 8/1/25 | 3,325,000 | 3,195,807 | ||||
AT&T | ||||||
3.50% 9/15/53 | 16,340,000 | 12,937,437 | ||||
4.50% 5/15/35 | 3,270,000 | 3,249,574 | ||||
CCO Holdings | ||||||
144A 4.50% 6/1/33 # | 945,000 | 800,845 | ||||
144A 4.75% 2/1/32 # | 3,870,000 | 3,426,982 | ||||
Cellnex Finance 144A 3.875% 7/7/41 # | 3,267,000 | 2,332,780 | ||||
Charter Communications Operating 3.85% 4/1/61 | 9,585,000 | 6,566,019 |
24
Principal | ||||||
amount° | Value (US $) | |||||
Corporate Bonds (continued) | ||||||
Communications (continued) | ||||||
Comcast 3.20% 7/15/36 | 12,674,000 | $ | 11,330,254 | |||
CSC Holdings 144A 4.50% 11/15/31 # | 5,855,000 | 4,991,124 | ||||
Directv Financing 144A 5.875% 8/15/27 # | 3,965,000 | 3,700,753 | ||||
Discovery Communications 4.00% 9/15/55 | 7,970,000 | 5,803,039 | ||||
Magallanes 144A 5.141% 3/15/52 # | 7,660,000 | 6,755,505 | ||||
Netflix 4.875% 4/15/28 | 2,970,000 | 2,954,467 | ||||
Rogers Communications 144A 4.55% 3/15/52 # | 1,235,000 | 1,159,242 | ||||
Sprint Spectrum 144A 4.738% 9/20/29 # | 2,884,069 | 2,899,651 | ||||
Time Warner Cable 7.30% 7/1/38 | 2,930,000 | 3,175,568 | ||||
Time Warner Entertainment 8.375% 3/15/23 | 6,100,000 | 6,269,154 | ||||
T-Mobile USA | ||||||
3.00% 2/15/41 | 5,100,000 | 3,971,462 | ||||
3.375% 4/15/29 | 13,605,000 | 12,723,804 | ||||
Verizon Communications | ||||||
2.875% 11/20/50 | 4,285,000 | 3,174,383 | ||||
4.50% 8/10/33 | 10,110,000 | 10,301,228 | ||||
Virgin Media Secured Finance 144A 5.50% 5/15/29 # | 7,158,000 | 6,813,306 | ||||
VZ Secured Financing 144A 5.00% 1/15/32 # | 2,540,000 | 2,268,995 | ||||
127,410,583 | ||||||
Consumer Cyclical – 3.77% | ||||||
ADT Security 144A 4.875% 7/15/32 # | 3,663,000 | 3,249,795 | ||||
Amazon.com 2.50% 6/3/50 | 15,385,000 | 11,578,942 | ||||
Aptiv 3.10% 12/1/51 | 15,996,000 | 10,665,035 | ||||
General Motors 5.60% 10/15/32 | 1,585,000 | 1,584,458 | ||||
General Motors Financial 5.70% 9/30/30 µ, ψ | 2,922,000 | 2,779,553 | ||||
Levi Strauss & Co. 144A 3.50% 3/1/31 # | 2,866,000 | 2,594,475 | ||||
Lowe's 2.80% 9/15/41 | 3,855,000 | 2,953,571 | ||||
Prime Security Services Borrower 144A 3.375% | ||||||
8/31/27 # | 952,000 | 870,528 | ||||
VICI Properties 4.95% 2/15/30 | 8,305,000 | 8,144,929 | ||||
Volkswagen Group of America Finance 144A 4.35% | ||||||
6/8/27 # | 3,845,000 | 3,826,897 | ||||
48,248,183 | ||||||
Consumer Non-Cyclical – 5.88% | ||||||
Amgen 3.00% 1/15/52 | 2,970,000 | 2,246,660 | ||||
Baxter International | ||||||
2.539% 2/1/32 | 3,645,000 | 3,167,294 | ||||
3.132% 12/1/51 | 6,660,000 | 5,074,834 | ||||
Bimbo Bakeries USA 144A 4.00% 5/17/51 # | 3,540,000 | 2,946,295 | ||||
Bunge Finance 2.75% 5/14/31 | 7,475,000 | 6,453,340 |
25
Schedules of investments
Delaware Corporate Bond Fund
Principal | ||||||
amount° | Value (US $) | |||||
Corporate Bonds (continued) | ||||||
Consumer Non-Cyclical (continued) | ||||||
CVS Health 2.70% 8/21/40 | 12,941,000 | $ | 9,873,914 | |||
JBS USA LUX 144A 3.00% 2/2/29 # | 3,287,000 | 2,833,614 | ||||
Keurig Dr Pepper 3.95% 4/15/29 | 3,425,000 | 3,403,391 | ||||
Merck & Co. 2.75% 12/10/51 | 4,532,000 | 3,528,361 | ||||
PepsiCo 3.90% 7/18/32 | 3,385,000 | 3,502,577 | ||||
Perrigo Finance Unlimited 4.375% 3/15/26 | 7,415,000 | 7,306,037 | ||||
Royalty Pharma 3.35% 9/2/51 | 12,513,000 | 8,910,606 | ||||
Sodexo | ||||||
144A 1.634% 4/16/26 # | 5,520,000 | 5,082,041 | ||||
144A 2.718% 4/16/31 # | 2,290,000 | 2,005,674 | ||||
Tenet Healthcare 144A 4.25% 6/1/29 # | 3,575,000 | 3,332,258 | ||||
US Foods 144A 4.75% 2/15/29 # | 3,265,000 | 3,054,653 | ||||
Viatris 4.00% 6/22/50 | 3,778,000 | 2,623,404 | ||||
75,344,953 | ||||||
Electric – 8.81% | ||||||
Appalachian Power 4.50% 8/1/32 | 2,415,000 | 2,433,362 | ||||
Berkshire Hathaway Energy 2.85% 5/15/51 | 5,078,000 | 3,851,582 | ||||
Commonwealth Edison 2.75% 9/1/51 | 5,025,000 | 3,783,905 | ||||
Duke Energy Carolinas 3.95% 11/15/28 | 6,187,000 | 6,296,496 | ||||
Enel Finance International 144A 4.25% 6/15/25 # | 7,357,000 | 7,307,687 | ||||
Entergy Texas 3.55% 9/30/49 | 2,695,000 | 2,251,605 | ||||
Fells Point Funding Trust 144A 3.046% 1/31/27 # | 4,685,000 | 4,415,477 | ||||
IPALCO Enterprises 4.25% 5/1/30 | 3,220,000 | 3,070,777 | ||||
Liberty Utilities Finance GP 1 144A 2.05% 9/15/30 # | 3,000,000 | 2,556,679 | ||||
NextEra Energy Capital Holdings | ||||||
3.00% 1/15/52 | 5,850,000 | 4,419,641 | ||||
5.00% 7/15/32 | 5,470,000 | 5,850,499 | ||||
NRG Energy | ||||||
144A 2.45% 12/2/27 # | 2,470,000 | 2,179,669 | ||||
144A 3.375% 2/15/29 # | 1,051,000 | 907,859 | ||||
Oglethorpe Power | ||||||
3.75% 8/1/50 | 5,235,000 | 4,266,923 | ||||
144A 4.50% 4/1/47 # | 5,500,000 | 4,931,633 | ||||
Pacific Gas and Electric | ||||||
3.30% 8/1/40 | 1,125,000 | 823,091 | ||||
3.50% 8/1/50 | 1,690,000 | 1,197,552 | ||||
4.60% 6/15/43 | 4,405,000 | 3,492,249 | ||||
4.95% 7/1/50 | 3,615,000 | 3,000,776 | ||||
PacifiCorp 2.90% 6/15/52 | 13,799,000 | 10,615,231 | ||||
Public Service Co. of Colorado 4.10% 6/1/32 | 6,405,000 | 6,609,651 |
26
Principal | ||||||
amount° | Value (US $) | |||||
Corporate Bonds (continued) | ||||||
Electric (continued) | ||||||
Public Service Co. of Oklahoma 3.15% 8/15/51 | 4,285,000 | $ | 3,278,146 | |||
San Diego Gas & Electric 3.32% 4/15/50 | 2,270,000 | 1,853,532 | ||||
Southern California Edison | ||||||
3.45% 2/1/52 | 1,680,000 | 1,326,416 | ||||
4.125% 3/1/48 | 3,090,000 | 2,680,104 | ||||
4.875% 3/1/49 | 1,865,000 | 1,767,037 | ||||
6.00% 1/15/34 | 1,415,000 | 1,566,727 | ||||
Southwestern Electric Power 3.25% 11/1/51 | 4,281,000 | 3,296,731 | ||||
Vistra Operations | ||||||
144A 3.55% 7/15/24 # | 4,381,000 | 4,248,242 | ||||
144A 5.125% 5/13/25 # | 2,360,000 | 2,362,537 | ||||
Xcel Energy 4.60% 6/1/32 | 6,075,000 | 6,303,277 | ||||
112,945,093 | ||||||
Energy – 7.82% | ||||||
BP Capital Markets 4.875% 3/22/30 µ, ψ | 8,805,000 | 8,032,292 | ||||
BP Capital Markets America 2.939% 6/4/51 | 2,260,000 | 1,708,733 | ||||
Cheniere Corpus Christi Holdings 7.00% 6/30/24 | 6,760,000 | 7,014,181 | ||||
ConocoPhillips 3.80% 3/15/52 | 5,860,000 | 5,266,036 | ||||
Continental Resources | ||||||
144A 2.875% 4/1/32 # | 3,721,000 | 3,042,029 | ||||
4.375% 1/15/28 | 2,809,000 | 2,710,750 | ||||
Diamondback Energy | ||||||
3.125% 3/24/31 | 4,840,000 | 4,384,175 | ||||
4.25% 3/15/52 | 2,125,000 | 1,828,501 | ||||
Enbridge | ||||||
1.60% 10/4/26 | 3,180,000 | 2,905,780 | ||||
5.75% 7/15/80 µ | 4,710,000 | 4,448,124 | ||||
Energy Transfer | ||||||
6.25% 4/15/49 | 3,410,000 | 3,416,842 | ||||
6.50% 11/15/26 µ, ψ | 9,654,000 | 8,785,140 | ||||
Enterprise Products Operating 3.30% 2/15/53 | 8,920,000 | 6,973,734 | ||||
EQM Midstream Partners 144A 4.75% 1/15/31 # | 3,775,000 | 3,419,489 | ||||
Galaxy Pipeline Assets Bidco 144A 2.94% 9/30/40 # | 4,181,006 | 3,523,921 | ||||
Kinder Morgan 5.45% 8/1/52 | 6,365,000 | 6,390,043 | ||||
NuStar Logistics 5.625% 4/28/27 | 4,294,000 | 4,114,446 | ||||
ONEOK 7.50% 9/1/23 | 6,625,000 | 6,823,266 | ||||
Targa Resources Partners | ||||||
4.00% 1/15/32 | 2,880,000 | 2,573,971 | ||||
4.875% 2/1/31 | 3,225,000 | 3,035,800 | ||||
5.00% 1/15/28 | 2,810,000 | 2,763,888 |
27
Schedules of investments
Delaware Corporate Bond Fund
Principal | ||||||
amount° | Value (US $) | |||||
Corporate Bonds (continued) | ||||||
Energy (continued) | ||||||
Valero Energy 3.65% 12/1/51 | 8,850,000 | $ | 7,045,950 | |||
100,207,091 | ||||||
Finance Companies – 3.33% | ||||||
AerCap Ireland Capital DAC | ||||||
3.00% 10/29/28 | 5,966,000 | 5,238,597 | ||||
3.40% 10/29/33 | 6,712,000 | 5,545,806 | ||||
Air Lease | ||||||
2.875% 1/15/32 | 3,880,000 | 3,200,738 | ||||
4.125% 12/15/26 µ, ψ | 4,080,000 | 3,050,451 | ||||
Aviation Capital Group | ||||||
144A 1.95% 1/30/26 # | 7,894,000 | 6,908,770 | ||||
144A 5.50% 12/15/24 # | 8,565,000 | 8,505,609 | ||||
Avolon Holdings Funding 144A 2.75% 2/21/28 # | 9,935,000 | 8,226,085 | ||||
DAE Sukuk DIFC 144A 3.75% 2/15/26 # | 2,140,000 | 2,033,663 | ||||
42,709,719 | ||||||
Insurance – 5.28% | ||||||
Aon 2.90% 8/23/51 | 7,710,000 | 5,638,611 | ||||
Athene Global Funding 144A 1.985% 8/19/28 # | 4,980,000 | 4,222,768 | ||||
Athene Holding | ||||||
3.45% 5/15/52 | 3,215,000 | 2,261,576 | ||||
3.95% 5/25/51 | 5,365,000 | 4,043,517 | ||||
Berkshire Hathaway Finance 3.85% 3/15/52 | 9,335,000 | 8,479,633 | ||||
Brighthouse Financial | ||||||
3.85% 12/22/51 | 2,395,000 | 1,668,992 | ||||
4.70% 6/22/47 | 9,863,000 | 8,052,181 | ||||
Global Atlantic 144A 4.70% 10/15/51 #, µ | 5,070,000 | 4,206,781 | ||||
Hartford Financial Services Group 2.90% 9/15/51 | 3,625,000 | 2,618,624 | ||||
Humana 1.35% 2/3/27 | 4,087,000 | 3,672,337 | ||||
Jackson Financial | ||||||
144A 3.125% 11/23/31 # | 3,140,000 | 2,554,414 | ||||
144A 4.00% 11/23/51 # | 135,000 | 95,554 | ||||
Prudential Financial 3.70% 10/1/50 µ | 7,005,000 | 6,141,660 | ||||
UnitedHealth Group 4.00% 5/15/29 | 13,655,000 | 14,021,388 | ||||
67,678,036 | ||||||
Natural Gas – 0.77% | ||||||
Atmos Energy 2.85% 2/15/52 | 473,000 | 359,718 |
28
Principal | |||||||
amount° | Value (US $) | ||||||
Corporate Bonds (continued) | |||||||
Natural Gas (continued) | |||||||
Sempra Energy | |||||||
4.125% 4/1/52 µ | 2,775,000 | $ | 2,349,082 | ||||
4.875% 10/15/25 µ, Ψ | 7,360,000 | 7,153,326 | |||||
9,862,126 | |||||||
Real Estate Investment Trusts – 2.54% | |||||||
American Homes 4 Rent 3.625% 4/15/32 | 4,840,000 | 4,395,828 | |||||
Corporate Office Properties 2.75% 4/15/31 | 5,520,000 | 4,516,183 | |||||
Crown Castle | |||||||
1.05% 7/15/26 | 5,500,000 | 4,897,105 | |||||
2.10% 4/1/31 | 4,563,000 | 3,806,745 | |||||
Extra Space Storage 2.35% 3/15/32 | 9,040,000 | 7,341,766 | |||||
Global Net Lease 144A 3.75% 12/15/27 # | 3,160,000 | 2,773,376 | |||||
MPT Operating Partnership 3.50% 3/15/31 | 3,180,000 | 2,744,658 | |||||
Public Storage 1.85% 5/1/28 | 2,240,000 | 2,012,031 | |||||
32,487,692 | |||||||
Technology – 8.33% | |||||||
Alphabet 2.05% 8/15/50 | 10,280,000 | 7,352,205 | |||||
Autodesk 2.40% 12/15/31 | 7,435,000 | 6,371,859 | |||||
Broadcom 144A 3.469% 4/15/34 # | 9,922,000 | 8,503,074 | |||||
Broadridge Financial Solutions 2.60% 5/1/31 | 8,112,000 | 7,066,119 | |||||
CDW 3.276% 12/1/28 | 11,570,000 | 10,191,911 | |||||
Clarivate Science Holdings 144A 3.875% 7/1/28 # | 3,763,000 | 3,432,872 | |||||
CoStar Group 144A 2.80% 7/15/30 # | 4,235,000 | 3,587,392 | |||||
Entegris Escrow | |||||||
144A 4.75% 4/15/29 # | 3,650,000 | 3,522,250 | |||||
144A 5.95% 6/15/30 # | 3,680,000 | 3,657,221 | |||||
Fidelity National Information Services 4.70% 7/15/27 | 1,505,000 | 1,540,281 | |||||
Global Payments | |||||||
2.15% 1/15/27 | 2,335,000 | 2,118,312 | |||||
2.90% 11/15/31 | 6,595,000 | 5,555,191 | |||||
KLA 4.95% 7/15/52 | 4,345,000 | 4,683,326 | |||||
Marvell Technology | |||||||
1.65% 4/15/26 | 4,460,000 | 4,094,861 | |||||
2.45% 4/15/28 | 2,820,000 | 2,517,671 | |||||
NCR 144A 5.125% 4/15/29 # | 3,525,000 | 3,392,002 | |||||
NXP | |||||||
3.125% 2/15/42 | 2,940,000 | 2,221,094 | |||||
4.40% 6/1/27 | 2,010,000 | 2,017,167 | |||||
5.55% 12/1/28 | 3,750,000 | 3,899,902 |
29
Schedules of investments
Delaware Corporate Bond Fund
Principal | |||||||
amount° | Value (US $) | ||||||
Corporate Bonds (continued) | |||||||
Technology (continued) | |||||||
PayPal Holdings | |||||||
3.90% 6/1/27 | 9,490,000 | $ | 9,679,638 | ||||
4.40% 6/1/32 | 2,475,000 | 2,569,539 | |||||
Sensata Technologies 144A 3.75% 2/15/31 # | 4,715,000 | 4,103,276 | |||||
Workday | |||||||
3.50% 4/1/27 | 590,000 | 579,663 | |||||
3.70% 4/1/29 | 915,000 | 883,529 | |||||
3.80% 4/1/32 | 3,285,000 | 3,137,656 | |||||
106,678,011 | |||||||
Transportation – 2.28% | |||||||
Burlington Northern Santa Fe 2.875% 6/15/52 | 5,602,000 | 4,438,291 | |||||
DAE Funding | |||||||
144A 1.55% 8/1/24 # | 2,260,000 | 2,117,278 | |||||
144A 3.375% 3/20/28 # | 1,105,000 | 976,197 | |||||
Delta Air Lines 144A 7.00% 5/1/25 # | 4,097,000 | 4,283,800 | |||||
Mileage Plus Holdings 144A 6.50% 6/20/27 # | 5,115,000 | 5,174,053 | |||||
Penske Truck Leasing 144A 4.40% 7/1/27 # | 8,115,000 | 8,124,524 | |||||
Seaspan 144A 5.50% 8/1/29 # | 3,050,000 | 2,394,616 | |||||
United Airlines 2019-1 Class AA Pass Through Trust | |||||||
Series 2019-1 AA 4.15% 2/25/33 ◆ | 1,767,857 | 1,675,812 | |||||
29,184,571 | |||||||
Utilities – 0.41% | |||||||
American Water Capital 4.45% 6/1/32 | 5,080,000 | 5,256,236 | |||||
5,256,236 | |||||||
Total Corporate Bonds (cost $1,253,533,411) | 1,139,569,039 | ||||||
Municipal Bonds – 0.33% | |||||||
Commonwealth of Puerto Rico | |||||||
(Restructured) | |||||||
Series A-1 2.993% 7/1/24^ | 60,624 | 56,412 | |||||
Series A-1 4.00% 7/1/33 | 182,199 | 174,860 | |||||
Series A-1 4.00% 7/1/35 | 132,326 | 125,273 | |||||
Series A-1 4.00% 7/1/37 | 140,560 | 131,670 | |||||
Series A-1 4.364% 7/1/33^ | 234,472 | 139,736 | |||||
Series A-1 5.625% 7/1/29 | 153,227 | 169,593 | |||||
GDB Debt Recovery Authority of Puerto Rico (Taxable) | |||||||
7.50% 8/20/40 | 3,821,632 | 3,391,698 | |||||
Total Municipal Bonds (cost $4,470,723) | 4,189,242 |
30
Principal | |||||||
amount° | Value (US $) | ||||||
Non-Agency Asset-Backed Securities – 1.79% | |||||||
Enterprise Fleet Financing | |||||||
Series 2022-2 A2 144A 4.65% 5/21/29 # | 6,100,000 | $ | 6,166,487 | ||||
Ford Credit Floorplan Master Owner Trust | |||||||
Series 2019-2 A 3.06% 4/15/26 | 5,550,000 | 5,487,610 | |||||
Toyota Auto Loan Extended Note Trust | |||||||
Series 2022-1A A 144A 3.82% 4/25/35 # | 6,100,000 | 6,138,582 | |||||
Volkswagen Auto Lease Trust | |||||||
Series 2022-A A3 3.44% 7/21/25 | 5,200,000 | 5,195,407 | |||||
Total Non-Agency Asset-Backed Securities (cost $22,916,456) | 22,988,086 | ||||||
Loan Agreements – 2.52% | |||||||
AmWINS Group 4.622% (LIBOR01M + 2.25%) | |||||||
2/19/28 ● | 2,846,667 | 2,766,072 | |||||
Applied Systems 1st Lien 5.25% (LIBOR03M + 3.00%) | |||||||
9/19/24 ● | 2,925,158 | 2,879,713 | |||||
Gates Global Tranche B-3 4.872% (LIBOR01M + | |||||||
2.50%) 3/31/27 ● | 2,964,850 | 2,865,898 | |||||
Horizon Therapeutics USA Tranche B-2 4.063% | |||||||
(LIBOR01M + 1.75%) 3/15/28 ● | 2,853,875 | 2,811,957 | |||||
Informatica 5.125% (LIBOR01M + 2.75%) 10/27/28 ● | 2,992,500 | 2,920,180 | |||||
Prime Security Services Borrower Tranche B-1 4.46% | |||||||
(LIBOR01M + 2.75%) 9/23/26 ● | 2,972,375 | 2,895,147 | |||||
RealPage 1st Lien 5.372% (LIBOR01M + 3.00%) | |||||||
4/24/28 ● | 3,007,275 | 2,901,082 | |||||
Reynolds Group Holdings Tranche B-2 5.622% | |||||||
(LIBOR01M + 3.25%) 2/5/26 ● | 2,969,779 | 2,888,853 | |||||
Standard Industries 3.788% (LIBOR03M + 2.50%) | |||||||
9/22/28 ● | 9,578,483 | 9,431,061 | |||||
Total Loan Agreements (cost $33,006,039) | 32,359,963 | ||||||
US Treasury Obligation – 1.14% | |||||||
US Treasury Notes | |||||||
2.875% 5/15/25 | 14,595,000 | 14,555,662 | |||||
Total US Treasury Obligation (cost $14,488,098) | 14,555,662 |
31
Schedules of investments
Delaware Corporate Bond Fund
Number of | ||||||||
shares | Value (US $) | |||||||
Convertible Preferred Stock – 0.25% | ||||||||
El Paso Energy Capital Trust I 4.75% exercise price | ||||||||
$34.49, maturity date 3/31/28 | 22,731 | $ | 1,040,853 | |||||
Lyondellbasell Advanced Polymers 6.00% exercise | ||||||||
price $52.33 ω | 2,808 | 2,232,360 | ||||||
Total Convertible Preferred Stock (cost $4,053,106) | 3,273,213 | |||||||
Short-Term Investments – 4.80% | ||||||||
Money Market Mutual Funds – 4.80% | ||||||||
BlackRock Liquidity FedFund – Institutional Shares | ||||||||
(seven-day effective yield 1.73%) | 15,377,423 | 15,377,423 | ||||||
Fidelity Investments Money Market Government | ||||||||
Portfolio – Class I (seven-day effective yield 1.49%) | 15,377,423 | 15,377,423 | ||||||
GS Financial Square Government Fund – Institutional | ||||||||
Shares (seven-day effective yield 1.73%) | 15,377,423 | 15,377,423 | ||||||
Morgan Stanley Institutional Liquidity Funds | ||||||||
Government Portfolio – Institutional Class | ||||||||
(seven-day effective yield 1.60%) | 15,377,424 | 15,377,424 | ||||||
Total Short-Term Investments (cost $61,509,693) | 61,509,693 | |||||||
Total Value of Securities Before | ||||||||
Options Written–100.16% | ||||||||
(cost $1,399,084,180) | 1,283,399,891 | |||||||
Notional | ||||||||
amount | ||||||||
Options Written – (0.00%) | ||||||||
Put Swaptions – (0.00%) | ||||||||
CDX.NA.IG 38 5 yr, strike price $130.00 expiration date | ||||||||
8/17/22 (MS) | (2,800,000 | ) | (258 | ) | ||||
Total Options Written (premium received $4,130) | $ | (258 | ) |
° |
Principal amount shown is stated in USD unless noted that the security is denominated in another currency. |
µ |
Fixed to variable rate investment. The rate shown reflects the fixed rate in effect at July 31, 2022. Rate will reset at a future date. |
Ψ |
Perpetual security. Maturity date represents next call date. |
# |
Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At July 31, 2022, the aggregate value of Rule 144A securities was $248,639,962, which represents 19.40% of the Fund's net assets. See Note 11 in “Notes to financial statements." |
32
◆ |
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. |
^ |
Zero-coupon security. The rate shown is the effective yield at the time of purchase. |
● |
Variable rate investment. Rates reset periodically. Rate shown reflects the rate in effect at July 31, 2022. For securities based on a published reference rate and spread, the reference rate and spread are indicated in their descriptions. The reference rate descriptions (i.e. LIBOR03M, LIBOR06M, etc.) used in this report are identical for different securities, but the underlying reference rates may differ due to the timing of the reset period. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions, or for mortgage-backed securities, are impacted by the individual mortgages which are paying off over time. These securities do not indicate a reference rate and spread in their descriptions. |
ω |
Perpetual security with no stated maturity date. |
Summary of abbreviations: |
CDX.NA.IG – Credit Default Swap Index North America Investment Grade |
DAC – Designated Activity Company |
DIFC – Dubai International Financial Centre |
GS – Goldman Sachs |
ICE – Intercontinental Exchange, Inc. |
LIBOR – London Interbank Offered Rate |
LIBOR01M – ICE LIBOR USD 1 Month |
LIBOR03M – ICE LIBOR USD 3 Month |
LIBOR06M – ICE LIBOR USD 6 Month |
MS – Morgan Stanley |
USD – US Dollar |
yr – Year |
See accompanying notes, which are an integral part of the financial statements.
33
Schedules of investments | |
Delaware Extended Duration Bond Fund | July 31, 2022 |
Principal | |||||||
amount° | Value (US $) | ||||||
Convertible Bond – 0.15% | |||||||
Spirit Airlines 1.00% exercise price $49.07, maturity | |||||||
date 5/15/26 | 680,000 | $ | 615,060 | ||||
Total Convertible Bond (cost $590,862) | 615,060 | ||||||
Corporate Bonds – 93.16% | |||||||
Banking – 9.45% | |||||||
Ally Financial | |||||||
4.70% 5/15/26 µ, Ψ | 1,635,000 | 1,382,924 | |||||
8.00% 11/1/31 | 595,000 | 673,799 | |||||
Bank of America | |||||||
2.676% 6/19/41 µ | 7,570,000 | 5,731,909 | |||||
6.125% 4/27/27 µ, Ψ | 1,205,000 | 1,214,037 | |||||
Bank of New York Mellon 4.70% 9/20/25 µ, Ψ | 2,600,000 | 2,596,100 | |||||
BPCE 144A 3.582% 10/19/42 #, µ | 1,080,000 | 808,429 | |||||
Credit Agricole 144A 2.811% 1/11/41 # | 2,410,000 | 1,713,335 | |||||
Credit Suisse Group 144A 5.25% 2/11/27 #, µ, Ψ | 1,305,000 | 1,079,888 | |||||
JPMorgan Chase & Co. | |||||||
3.109% 4/22/51 µ | 3,000,000 | 2,298,044 | |||||
3.328% 4/22/52 µ | 5,105,000 | 4,083,821 | |||||
Morgan Stanley | |||||||
2.484% 9/16/36 µ | 1,510,000 | 1,222,734 | |||||
2.802% 1/25/52 µ | 7,065,000 | 5,130,293 | |||||
NatWest Group 4.60% 6/28/31 µ, Ψ | 1,625,000 | 1,285,882 | |||||
PNC Financial Services Group 6.00% 5/15/27 µ, Ψ | 690,000 | 696,038 | |||||
SVB Financial Group 4.00% 5/15/26 µ, Ψ | 1,325,000 | 1,075,769 | |||||
Truist Financial 4.95% 9/1/25 µ, Ψ | 3,440,000 | 3,484,720 | |||||
UBS 7.625% 8/17/22 | 720,000 | 720,862 | |||||
UBS Group 144A 4.375% 2/10/31 #, µ, Ψ | 1,640,000 | 1,322,250 | |||||
Wells Fargo & Co. 4.611% 4/25/53 µ | 3,340,000 | 3,275,909 | |||||
39,796,743 | |||||||
Basic Industry – 3.93% | |||||||
Graphic Packaging International 144A 3.50% 3/1/29 # | 1,265,000 | 1,141,879 | |||||
Packaging Corp. of America | |||||||
3.05% 10/1/51 | 2,915,000 | 2,187,579 | |||||
4.05% 12/15/49 | 2,200,000 | 1,916,528 | |||||
Sherwin-Williams 2.90% 3/15/52 | 5,230,000 | 3,665,458 | |||||
Steel Dynamics 3.25% 10/15/50 | 4,335,000 | 3,063,541 | |||||
Westlake 3.125% 8/15/51 | 6,390,000 | 4,597,120 | |||||
16,572,105 |
34
Principal | |||||||
amount° | Value (US $) | ||||||
Corporate Bonds (continued) | |||||||
Brokerage – 0.93% | |||||||
Charles Schwab 5.375% 6/1/25 µ, ψ | 1,855,000 | $ | 1,892,842 | ||||
Jefferies Group 6.50% 1/20/43 | 1,985,000 | 2,012,596 | |||||
3,905,438 | |||||||
Capital Goods – 4.85% | |||||||
Ardagh Metal Packaging Finance USA 144A 4.00% | |||||||
9/1/29 # | 1,285,000 | 1,107,914 | |||||
Boeing 3.75% 2/1/50 | 4,055,000 | 3,078,617 | |||||
Emerson Electric 2.80% 12/21/51 | 3,220,000 | 2,488,683 | |||||
Lockheed Martin 4.15% 6/15/53 | 875,000 | 859,284 | |||||
Masco 3.125% 2/15/51 | 7,435,000 | 5,260,813 | |||||
Pactiv Evergreen Group Issuer 144A 4.00% 10/15/27 # | 1,315,000 | 1,160,369 | |||||
Rockwell Automation 2.80% 8/15/61 | 1,585,000 | 1,092,329 | |||||
Waste Connections 2.95% 1/15/52 | 7,030,000 | 5,366,821 | |||||
20,414,830 | |||||||
Communications – 11.28% | |||||||
Altice France | |||||||
144A 5.125% 1/15/29 # | 1,425,000 | 1,208,977 | |||||
144A 5.50% 10/15/29 # | 1,360,000 | 1,171,300 | |||||
AMC Networks 4.25% 2/15/29 | 2,000,000 | 1,763,975 | |||||
AT&T | |||||||
3.50% 9/15/53 | 9,580,000 | 7,585,107 | |||||
4.50% 5/15/35 | 540,000 | 536,627 | |||||
CCO Holdings 144A 4.75% 2/1/32 # | 1,460,000 | 1,292,866 | |||||
Cellnex Finance 144A 3.875% 7/7/41 # | 1,221,000 | 871,847 | |||||
Charter Communications Operating 3.85% 4/1/61 | 3,670,000 | 2,514,063 | |||||
Comcast | |||||||
2.80% 1/15/51 | 2,830,000 | 2,107,688 | |||||
3.20% 7/15/36 | 1,575,000 | 1,408,013 | |||||
CSC Holdings 144A 4.50% 11/15/31 # | 2,230,000 | 1,900,975 | |||||
Directv Financing 144A 5.875% 8/15/27 # | 1,400,000 | 1,306,697 | |||||
Discovery Communications 4.00% 9/15/55 | 5,873,000 | 4,276,192 | |||||
Magallanes 144A 5.141% 3/15/52 # | 1,925,000 | 1,697,695 | |||||
Rogers Communications 144A 4.55% 3/15/52 # | 460,000 | 431,783 | |||||
Time Warner Cable 7.30% 7/1/38 | 2,360,000 | 2,557,795 | |||||
T-Mobile USA 3.00% 2/15/41 | 8,460,000 | 6,587,955 | |||||
Verizon Communications | |||||||
2.875% 11/20/50 | 1,230,000 | 911,200 | |||||
3.55% 3/22/51 | 5,015,000 | 4,213,885 | |||||
Virgin Media Secured Finance 144A 5.50% 5/15/29 # | 2,460,000 | 2,341,539 |
35
Schedules of investments
Delaware Extended Duration Bond Fund
Principal | |||||||
amount° | Value (US $) | ||||||
Corporate Bonds (continued) | |||||||
Communications (continued) | |||||||
VZ Secured Financing 144A 5.00% 1/15/32 # | 955,000 | $ | 853,106 | ||||
47,539,285 | |||||||
Consumer Cyclical – 4.25% | |||||||
ADT Security 144A 4.875% 7/15/32 # | 1,365,000 | 1,211,021 | |||||
Amazon.com 2.50% 6/3/50 | 5,715,000 | 4,301,180 | |||||
Aptiv 3.10% 12/1/51 | 7,649,000 | 5,099,828 | |||||
General Motors 6.25% 10/2/43 | 1,070,000 | 1,055,263 | |||||
General Motors Financial 5.70% 9/30/30 µ, ψ | 1,550,000 | 1,474,438 | |||||
Levi Strauss & Co. 144A 3.50% 3/1/31 # | 305,000 | 276,104 | |||||
Lowe's 2.80% 9/15/41 | 5,360,000 | 4,106,651 | |||||
Prime Security Services Borrower 144A 3.375% | |||||||
8/31/27 # | 426,000 | 389,543 | |||||
17,914,028 | |||||||
Consumer Non-Cyclical – 7.64% | |||||||
Amgen 3.00% 1/15/52 | 1,650,000 | 1,248,145 | |||||
Baxter International 3.132% 12/1/51 | 6,225,000 | 4,743,370 | |||||
Bimbo Bakeries USA 144A 4.00% 5/17/51 # | 1,385,000 | 1,152,717 | |||||
CVS Health 2.70% 8/21/40 | 4,166,000 | 3,178,636 | |||||
JBS USA LUX 144A 4.375% 2/2/52 # | 2,580,000 | 1,960,645 | |||||
Merck & Co. 2.75% 12/10/51 | 2,215,000 | 1,724,475 | |||||
Regeneron Pharmaceuticals 2.80% 9/15/50 | 6,003,000 | 4,323,095 | |||||
Royalty Pharma 3.35% 9/2/51 | 7,591,000 | 5,405,611 | |||||
Takeda Pharmaceutical 3.175% 7/9/50 | 4,290,000 | 3,374,064 | |||||
Tenet Healthcare 144A 4.25% 6/1/29 # | 1,345,000 | 1,253,674 | |||||
US Foods 144A 4.75% 2/15/29 # | 2,000,000 | 1,871,150 | |||||
Viatris 4.00% 6/22/50 | 2,819,000 | 1,957,485 | |||||
32,193,067 | |||||||
Electric – 14.11% | |||||||
Arizona Public Service | |||||||
4.20% 8/15/48 | 2,720,000 | 2,410,607 | |||||
4.25% 3/1/49 | 2,324,000 | 2,070,786 | |||||
Baltimore Gas and Electric 4.55% 6/1/52 | 3,220,000 | 3,287,686 | |||||
Berkshire Hathaway Energy | |||||||
2.85% 5/15/51 | 1,048,000 | 794,891 | |||||
144A 4.60% 5/1/53 # | 3,170,000 | 3,197,264 | |||||
Commonwealth Edison 2.75% 9/1/51 | 4,745,000 | 3,573,061 | |||||
Entergy Arkansas 3.35% 6/15/52 | 1,880,000 | 1,546,822 | |||||
Evergy Kansas Central 3.25% 9/1/49 | 1,117,000 | 901,556 | |||||
Florida Power & Light Co. 2.875% 12/4/51 | 1,820,000 | 1,443,283 | |||||
NextEra Energy Capital Holdings 3.00% 1/15/52 | 5,875,000 | 4,438,528 |
36
Principal | |||||||
amount° | Value (US $) | ||||||
Corporate Bonds (continued) | |||||||
Electric (continued) | |||||||
Oglethorpe Power | |||||||
3.75% 8/1/50 | 3,190,000 | $ | 2,600,093 | ||||
144A 4.50% 4/1/47 # | 2,075,000 | 1,860,570 | |||||
5.05% 10/1/48 | 2,580,000 | 2,450,204 | |||||
Pacific Gas and Electric | |||||||
3.30% 8/1/40 | 1,105,000 | 808,459 | |||||
4.60% 6/15/43 | 5,775,000 | 4,578,374 | |||||
4.95% 7/1/50 | 1,620,000 | 1,344,746 | |||||
PacifiCorp 2.90% 6/15/52 | 6,055,000 | 4,657,963 | |||||
Public Service Co. of Oklahoma 3.15% 8/15/51 | 1,680,000 | 1,285,247 | |||||
San Diego Gas & Electric 3.32% 4/15/50 | 1,195,000 | 975,758 | |||||
Southern California Edison | |||||||
3.45% 2/1/52 | 1,700,000 | 1,342,207 | |||||
3.65% 2/1/50 | 1,125,000 | 899,207 | |||||
4.125% 3/1/48 | 5,220,000 | 4,527,554 | |||||
Southwestern Electric Power 3.25% 11/1/51 | 3,535,000 | 2,722,248 | |||||
Tampa Electric 3.45% 3/15/51 | 4,087,000 | 3,402,322 | |||||
Union Electric 3.90% 4/1/52 | 490,000 | 456,260 | |||||
Virginia Electric and Power 2.95% 11/15/51 | 2,420,000 | 1,893,607 | |||||
59,469,303 | |||||||
Energy – 11.95% | |||||||
BP Capital Markets 4.875% 3/22/30 µ, ψ | 2,400,000 | 2,189,381 | |||||
BP Capital Markets America 2.939% 6/4/51 | 6,320,000 | 4,778,405 | |||||
ConocoPhillips 3.80% 3/15/52 | 1,980,000 | 1,779,309 | |||||
Diamondback Energy | |||||||
4.25% 3/15/52 | 1,485,000 | 1,277,800 | |||||
4.40% 3/24/51 | 4,530,000 | 4,064,918 | |||||
Enbridge 5.75% 7/15/80 µ | 1,840,000 | 1,737,696 | |||||
Energy Transfer | |||||||
6.25% 4/15/49 | 780,000 | 781,565 | |||||
6.50% 11/15/26 µ, ψ | 2,197,000 | 1,999,270 | |||||
Enterprise Products Operating | |||||||
3.20% 2/15/52 | 3,648,000 | 2,774,224 | |||||
3.30% 2/15/53 | 4,175,000 | 3,264,051 | |||||
EQM Midstream Partners 144A 4.75% 1/15/31 # | 1,450,000 | 1,313,446 | |||||
Galaxy Pipeline Assets Bidco 144A 2.94% 9/30/40 # | 1,542,698 | 1,300,248 | |||||
Kinder Morgan | |||||||
3.25% 8/1/50 | 5,860,000 | 4,272,870 | |||||
5.45% 8/1/52 | 1,405,000 | 1,410,528 |
37
Schedules of investments
Delaware Extended Duration Bond Fund
Principal | |||||||
amount° | Value (US $) | ||||||
Corporate Bonds (continued) | |||||||
Energy (continued) | |||||||
MPLX 4.95% 3/14/52 | 2,285,000 | $ | 2,097,482 | ||||
Northern Natural Gas 144A 3.40% 10/16/51 # | 1,080,000 | 834,966 | |||||
NuStar Logistics | |||||||
5.625% 4/28/27 | 305,000 | 292,246 | |||||
6.375% 10/1/30 | 2,000,000 | 1,846,592 | |||||
Shell International Finance 3.00% 11/26/51 | 6,620,000 | 5,320,076 | |||||
Valero Energy 3.65% 12/1/51 | 3,585,000 | 2,854,207 | |||||
Williams 3.50% 10/15/51 | 5,285,000 | 4,165,053 | |||||
50,354,333 | |||||||
Finance Companies – 1.84% | |||||||
AerCap Holdings 5.875% 10/10/79 µ | 260,000 | 231,130 | |||||
AerCap Ireland Capital DAC 3.85% 10/29/41 | 7,405,000 | 5,629,748 | |||||
Air Lease 4.125% 12/15/26 µ, ψ | 1,470,000 | 1,099,060 | |||||
DAE Sukuk DIFC 144A 3.75% 2/15/26 # | 830,000 | 788,757 | |||||
7,748,695 | |||||||
Insurance – 10.87% | |||||||
Aon 2.90% 8/23/51 | 5,800,000 | 4,241,756 | |||||
Arthur J Gallagher & Co. 3.50% 5/20/51 | 4,805,000 | 3,814,123 | |||||
Athene Holding | |||||||
3.45% 5/15/52 | 1,215,000 | 854,686 | |||||
3.95% 5/25/51 | 1,600,000 | 1,205,895 | |||||
Berkshire Hathaway Finance 3.85% 3/15/52 | 5,835,000 | 5,300,338 | |||||
Brighthouse Financial | |||||||
3.85% 12/22/51 | 975,000 | 679,444 | |||||
4.70% 6/22/47 | 4,911,000 | 4,009,354 | |||||
Chubb INA Holdings 2.85% 12/15/51 | 2,255,000 | 1,715,424 | |||||
Elevance Health 4.55% 5/15/52 | 3,270,000 | 3,273,600 | |||||
Global Atlantic 144A 4.70% 10/15/51 #, µ | 1,980,000 | 1,642,885 | |||||
Hartford Financial Services Group 2.90% 9/15/51 | 6,120,000 | 4,420,960 | |||||
High Street Funding Trust II 144A 4.682% 2/15/48 # | 3,660,000 | 3,471,273 | |||||
Jackson Financial 144A 4.00% 11/23/51 # | 1,031,000 | 729,747 | |||||
MetLife 5.00% 7/15/52 | 4,400,000 | 4,699,556 | |||||
Nationwide Mutual Insurance 144A 4.95% 4/22/44 # | 3,141,000 | 2,955,740 | |||||
Old Republic International 3.85% 6/11/51 | 1,565,000 | 1,239,027 | |||||
Pacific Life Insurance 144A 4.30% 10/24/67 #, µ | 1,789,000 | 1,568,416 | |||||
45,822,224 | |||||||
Natural Gas – 4.21% | |||||||
Atmos Energy 2.85% 2/15/52 | 2,825,000 | 2,148,422 | |||||
Brooklyn Union Gas 144A 4.273% 3/15/48 # | 689,000 | 574,315 | |||||
Piedmont Natural Gas 3.64% 11/1/46 | 3,035,000 | 2,490,823 |
38
Principal | |||||||
amount° | Value (US $) | ||||||
Corporate Bonds (continued) | |||||||
Natural Gas (continued) | |||||||
Sempra Energy | |||||||
4.125% 4/1/52 µ | 510,000 | $ | 431,723 | ||||
4.875% 10/15/25 µ, ψ | 1,485,000 | 1,443,300 | |||||
Southern California Gas 4.30% 1/15/49 | 4,500,000 | 4,207,137 | |||||
Southwest Gas | |||||||
3.80% 9/29/46 | 2,150,000 | 1,683,191 | |||||
4.15% 6/1/49 | 2,430,000 | 2,017,265 | |||||
Spire Missouri 3.30% 6/1/51 | 3,440,000 | 2,743,725 | |||||
17,739,901 | |||||||
Real Estate Investment Trusts – 0.92% | |||||||
Crown Castle 2.90% 4/1/41 | 5,115,000 | 3,882,807 | |||||
3,882,807 | |||||||
Technology – 4.79% | |||||||
Alphabet 2.05% 8/15/50 | 8,405,000 | 6,011,214 | |||||
Analog Devices 2.95% 10/1/51 | 4,350,000 | 3,516,960 | |||||
Apple 2.70% 8/5/51 | 1,335,000 | 1,050,116 | |||||
Broadcom 144A 3.137% 11/15/35 # | 3,330,000 | 2,680,696 | |||||
Entegris Escrow 144A 5.95% 6/15/30 # | 1,300,000 | 1,291,953 | |||||
KLA 4.95% 7/15/52 | 1,580,000 | 1,703,028 | |||||
NCR 144A 5.125% 4/15/29 # | 1,255,000 | 1,207,649 | |||||
NXP | |||||||
3.125% 2/15/42 | 1,195,000 | 902,792 | |||||
3.25% 11/30/51 | 2,535,000 | 1,820,192 | |||||
20,184,600 | |||||||
Transportation – 1.84% | |||||||
Burlington Northern Santa Fe | |||||||
2.875% 6/15/52 | 1,690,000 | 1,338,935 | |||||
4.45% 1/15/53 | 1,420,000 | 1,452,459 | |||||
Canadian Pacific Railway 3.10% 12/2/51 | 2,675,000 | 2,111,477 | |||||
DAE Funding 144A 3.375% 3/20/28 # | 415,000 | 366,626 | |||||
Mileage Plus Holdings 144A 6.50% 6/20/27 # | 1,550,000 | 1,567,895 | |||||
Seaspan 144A 5.50% 8/1/29 # | 1,175,000 | 922,516 | |||||
7,759,908 | |||||||
Utilities – 0.30% | |||||||
Essential Utilities 4.276% 5/1/49 | 1,381,000 | 1,251,400 | |||||
1,251,400 | |||||||
Total Corporate Bonds (cost $467,416,899) | 392,548,667 |
39
Schedules of investments
Delaware Extended Duration Bond Fund
Principal | |||||||
amount° | Value (US $) | ||||||
Municipal Bonds – 2.27% | |||||||
Commonwealth of Puerto Rico | |||||||
(Restructured) | |||||||
Series A 2.993% 7/1/24^ | 22,980 | $ | 21,383 | ||||
Series A 4.364% 7/1/33^ | 88,880 | 52,969 | |||||
Series A-1 4.00% 7/1/33 | 69,065 | 66,283 | |||||
Series A-1 4.00% 7/1/35 | 50,160 | 47,487 | |||||
Series A-1 4.00% 7/1/37 | 53,281 | 49,911 | |||||
Series A-1 5.625% 7/1/29 | 58,083 | 64,287 | |||||
GDB Debt Recovery Authority of Puerto Rico | |||||||
7.50% 8/20/40 | 1,436,975 | 1,275,315 | |||||
Long Island, New York Power Authority Electric System | |||||||
Revenue | |||||||
Series B 5.85% 5/1/41 | 3,600,000 | 4,205,664 | |||||
Metropolitan Transportation Authority, New York | |||||||
Revenue | |||||||
Series A-2 6.089% 11/15/40 | 3,205,000 | 3,795,585 | |||||
Total Municipal Bonds (cost $8,508,090) | 9,578,884 | ||||||
Loan Agreements – 0.64% | |||||||
Applied Systems 1st Lien 5.25% (LIBOR03M + 3.00%) | |||||||
9/19/24 ● | 1,182,244 | 1,163,877 | |||||
Prime Security Services Borrower Tranche B-1 4.463% | |||||||
(LIBOR01M + 2.75%) 9/23/26 ● | 245,258 | 238,886 | |||||
Reynolds Group Holdings Tranche B-2 5.622% | |||||||
(LIBOR01M + 3.25%) 2/5/26 ● | 1,349,450 | 1,312,677 | |||||
Total Loan Agreements (cost $2,779,252) | 2,715,440 | ||||||
Number of | |||||||
shares | |||||||
Convertible Preferred Stock – 0.86% | |||||||
Bank of America 7.25% exercise price $50.00, maturity | |||||||
date 12/31/99 ω | 1,360 | 1,691,908 | |||||
El Paso Energy Capital Trust I 4.75% exercise price | |||||||
$34.49, maturity date 3/31/28 | 14,912 | 682,821 | |||||
Lyondellbasell Advanced Polymers 6.00% exercise | |||||||
price $52.33 ω | 1,597 | 1,269,615 | |||||
Total Convertible Preferred Stock (cost $4,194,316) | 3,644,344 |
40
Number of | |||||||||
shares | Value (US $) | ||||||||
Short-Term Investments – 2.70% | |||||||||
Money Market Mutual Funds – 2.70% | |||||||||
BlackRock Liquidity FedFund – Institutional Shares | |||||||||
(seven-day effective yield 1.73%) | 2,843,351 | $ | 2,843,351 | ||||||
Fidelity Investments Money Market Government | |||||||||
Portfolio – Class I (seven-day effective yield 1.49%) | 2,843,352 | 2,843,352 | |||||||
GS Financial Square Government Fund – Institutional | |||||||||
Shares (seven-day effective yield 1.73%) | 2,843,352 | 2,843,352 | |||||||
Morgan Stanley Institutional Liquidity Funds | |||||||||
Government Portfolio – Institutional Class | |||||||||
(seven-day effective yield 1.60%) | 2,843,351 | 2,843,351 | |||||||
Total Short-Term Investments (cost $11,373,406) | 11,373,406 | ||||||||
Total Value of Securities Before | |||||||||
Options Written – 99.78% | |||||||||
(cost $494,862,825) | 420,475,801 | ||||||||
Notional | |||||||||
amount | |||||||||
Options Written – (0.00%) | |||||||||
Put Swaptions – (0.00%) | |||||||||
CDX.NA.IG 38 5 yr, strike price $130.00 expiration date | |||||||||
8/17/22 (MS) | (1,000,000 | ) | (92 | ) | |||||
Total Options Written (premium received $1,475) | $ | (92 | ) |
° | Principal amount shown is stated in USD unless noted that the security is denominated in another currency. |
µ | Fixed to variable rate investment. The rate shown reflects the fixed rate in effect at July 31, 2022. Rate will reset at a future date. |
ψ | Perpetual security. Maturity date represents next call date. |
# | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At July 31, 2022, the aggregate value of Rule 144A securities was $57,800,665, which represents 13.72% of the Fund's net assets. See Note 11 in “Notes to financial statements." |
^ | Zero-coupon security. The rate shown is the effective yield at the time of purchase. |
41
Schedules of investments
Delaware Extended Duration Bond Fund
● | Variable rate investment. Rates reset periodically. Rate shown reflects the rate in effect at July 31, 2022. For securities based on a published reference rate and spread, the reference rate and spread are indicated in their descriptions. The reference rate descriptions (i.e. LIBOR03M, LIBOR06M, etc.) used in this report are identical for different securities, but the underlying reference rates may differ due to the timing of the reset period. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions, or for mortgage-backed securities, are impacted by the individual mortgages which are paying off over time. These securities do not indicate a reference rate and spread in their descriptions. |
ω | Perpetual security with no stated maturity date. |
Summary of abbreviations:
CDX.NA.IG – Credit Default Swap Index North America Investment Grade
DAC – Designated Activity Company
DIFC – Dubai International Financial Centre
GS – Goldman Sachs
ICE – Intercontinental Exchange, Inc.
LIBOR – London Interbank Offered Rate
LIBOR01M – ICE LIBOR USD 1 Month
LIBOR03M – ICE LIBOR USD 3 Month
LIBOR06M – ICE LIBOR USD 6 Month
MS – Morgan Stanley
USD – US Dollar
yr – Year
See accompanying notes, which are an integral part of the financial statements.
42
Statement of assets and liabilities |
July 31, 2022 |
Delaware | Delaware | |||||||
Corporate | Extended Duration | |||||||
Bond Fund1 | Bond Fund1 | |||||||
Assets: | ||||||||
Investments, at value* | $ | 1,283,399,891 | $ | 420,475,801 | ||||
Cash | — | 22,693 | ||||||
Dividends and interest receivable | 12,119,420 | 5,050,792 | ||||||
Receivable for securities sold | 5,738,655 | 4,628,804 | ||||||
Receivable for fund shares sold | 2,191,422 | 667,950 | ||||||
Prepaid expenses | 16,566 | 12,746 | ||||||
Other assets | 9,447 | 3,582 | ||||||
Total Assets | 1,303,475,401 | 430,862,368 | ||||||
Liabilities: | ||||||||
Options written, at valueΣ | 258 | 92 | ||||||
Due to custodian | 42,679 | — | ||||||
Payable for securities purchased | 15,438,621 | 2,268,768 | ||||||
Payable for fund shares redeemed | 4,344,004 | 6,746,738 | ||||||
Distribution payable | 1,403,801 | 47,958 | ||||||
Other accrued expenses | 632,172 | 336,544 | ||||||
Investment management fees payable to affiliates | 203,684 | 44,731 | ||||||
Administration expenses payable to affiliates | 57,042 | 24,466 | ||||||
Distribution fees payable to affiliates | 15,093 | 4,038 | ||||||
Total Liabilities | 22,137,354 | 9,473,335 | ||||||
Total Net Assets | $ | 1,281,338,047 | $ | 421,389,033 | ||||
Net Assets Consist of: | ||||||||
Paid-in capital | $ | 1,469,268,623 | $ | 510,533,200 | ||||
Total distributable earnings (loss) | (187,930,576 | ) | (89,144,167 | ) | ||||
Total Net Assets | $ | 1,281,338,047 | $ | 421,389,033 |
43
Statement of assets and liabilities
Delaware | Delaware | ||||||||
Corporate | Extended Duration | ||||||||
Bond Fund1 | Bond Fund1 | ||||||||
Net Asset Value | |||||||||
Class A: | |||||||||
Net assets | $ | 285,976,656 | $ | 66,507,890 | |||||
Shares of beneficial interest outstanding, unlimited | |||||||||
authorization, no par | 17,865,793 | 4,206,238 | |||||||
Net asset value per share | $ | 16.01 | $ | 15.81 | |||||
Sales charge | 4.50 | % | 4.50 | % | |||||
Offering price per share, equal to net asset value per share | |||||||||
/ (1 - sales charge) | $ | 16.76 | $ | 16.56 | |||||
Class C: | |||||||||
Net assets | $ | 15,994,975 | $ | 5,318,685 | |||||
Shares of beneficial interest outstanding, unlimited | |||||||||
authorization, no par | 999,095 | 336,649 | |||||||
Net asset value per share | $ | 16.01 | $ | 15.80 | |||||
Class R: | |||||||||
Net assets | $ | 9,419,370 | $ | 5,489,414 | |||||
Shares of beneficial interest outstanding, unlimited | |||||||||
authorization, no par | 587,959 | 346,532 | |||||||
Net asset value per share | $ | 16.02 | $ | 15.84 | |||||
Institutional Class: | |||||||||
Net assets | $ | 957,741,186 | $ | 332,409,596 | |||||
Shares of beneficial interest outstanding, unlimited | |||||||||
authorization, no par | 59,836,482 | 21,066,373 | |||||||
Net asset value per share | $ | 16.01 | $ | 15.78 | |||||
Class R6: | |||||||||
Net assets | $ | 12,205,860 | $ | 11,663,448 | |||||
Shares of beneficial interest outstanding, unlimited | |||||||||
authorization, no par | 763,059 | 738,529 | |||||||
Net asset value per share | $ | 16.00 | $ | 15.79 | |||||
____________________ |
|||||||||
* Investments, at cost | $ | 1,399,084,180 | $ | 494,862,825 | |||||
Σ Options written, premium received | (4,130 | ) | (1,475 | ) |
1 | On September 9, 2022, the Fund declared a 3 to 1 reverse stock split. The Shares of beneficial interest outstanding, Net asset value per share and offering price per share have been revised to reflect the reverse stock split (See Note 14 in the Notes to Financial Statements). |
See accompanying notes, which are an integral part of the financial statements.
44
Statement of operations |
Year ended July 31, 2022 |
Delaware | Delaware | ||||||||
Corporate | Extended Duration | ||||||||
Bond Fund | Bond Fund | ||||||||
Investment Income: | |||||||||
Interest | $ | 43,815,818 | $ | 19,513,930 | |||||
Dividends | 358,974 | 251,001 | |||||||
44,174,792 | 19,764,931 | ||||||||
Expenses: | |||||||||
Management fees | 6,377,578 | 2,766,557 | |||||||
Distribution expenses – Class A | 872,634 | 213,776 | |||||||
Distribution expenses – Class C | 220,585 | 71,842 | |||||||
Distribution expenses – Class R | 56,111 | 35,484 | |||||||
Dividend disbursing and transfer agent fees and | |||||||||
expenses | 1,565,761 | 667,761 | |||||||
Accounting and administration expenses | 254,403 | 123,034 | |||||||
Reports and statements to shareholders expenses | 182,693 | 65,625 | |||||||
Legal fees | 121,814 | 28,865 | |||||||
Audit and tax fees | 51,359 | 45,283 | |||||||
Custodian fees | 49,641 | 19,912 | |||||||
Trustees’ fees and expenses | 46,828 | 18,756 | |||||||
Registration fees | 16,376 | 11,847 | |||||||
Other | 138,597 | 71,520 | |||||||
9,954,380 | 4,140,262 | ||||||||
Less expenses waived | (1,207,865 | ) | (958,580 | ) | |||||
Less expenses paid indirectly | (910 | ) | (144 | ) | |||||
Total operating expenses | 8,745,605 | 3,181,538 | |||||||
Net Investment Income (Loss) | 35,429,187 | 16,583,393 |
45
Statement of operations
Delaware | Delaware | |||||||||
Corporate | Extended Duration | |||||||||
Bond Fund | Bond Fund | |||||||||
Net Realized and Unrealized Gain (Loss): | ||||||||||
Net realized gain (loss) on: | ||||||||||
Investments | $ | (50,396,296 | ) | $ | (6,474,533 | ) | ||||
Futures contracts | — | 642,309 | ||||||||
Swap contracts | (9,976 | ) | (4,582 | ) | ||||||
Net realized gain (loss) | (50,406,272 | ) | (5,836,806 | ) | ||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||
Investments | (179,547,576 | ) | (118,546,240 | ) | ||||||
Futures contracts | — | (2,191,831 | ) | |||||||
Options written | 3,872 | 1,383 | ||||||||
Swap contracts | 11,692 | 5,014 | ||||||||
Net change in unrealized appreciation (depreciation) | (179,532,012 | ) | (120,731,674 | ) | ||||||
Net Realized and Unrealized Gain (Loss) | (229,938,284 | ) | (126,568,480 | ) | ||||||
Net Increase (Decrease) in Net Assets Resulting from | ||||||||||
Operations | $ | (194,509,097 | ) | $ | (109,985,087 | ) |
See accompanying notes, which are an integral part of the financial statements.
46
Statements of changes in net assets
Delaware Corporate Bond Fund
Year ended | ||||||||||
7/31/22 | 7/31/21 | |||||||||
Increase (Decrease) in Net Assets from Operations: | ||||||||||
Net investment income (loss) | $ | 35,429,187 | $ | 30,698,769 | ||||||
Net realized gain (loss) | (50,406,272 | ) | 33,398,236 | |||||||
Net change in unrealized appreciation (depreciation) | (179,532,012 | ) | (28,924,755 | ) | ||||||
Net increase (decrease) in net assets resulting from | ||||||||||
operations | (194,509,097 | ) | 35,172,250 | |||||||
Dividends and Distributions to Shareholders from: | ||||||||||
Distributable earnings: | ||||||||||
Class A | (16,079,147 | ) | (6,667,398 | ) | ||||||
Class C | (858,429 | ) | (995,269 | ) | ||||||
Class R | (492,487 | ) | (399,494 | ) | ||||||
Institutional Class | (45,575,390 | ) | (33,363,113 | ) | ||||||
Class R6 | (529,812 | ) | (272,178 | ) | ||||||
(63,535,265 | ) | (41,697,452 | ) | |||||||
Capital Share Transactions: | ||||||||||
Proceeds from shares sold: | ||||||||||
Class A | 31,818,415 | 89,400,561 | ||||||||
Class C | 2,590,744 | 6,407,377 | ||||||||
Class R | 1,803,944 | 4,124,114 | ||||||||
Institutional Class | 540,621,303 | 430,105,546 | ||||||||
Class R6 | 4,583,181 | 7,795,723 | ||||||||
Net assets from merger:1 | ||||||||||
Class A | — | 173,482,646 | ||||||||
Institutional Class | — | 1,526,668 | ||||||||
Class R6 | — | 59,774 | ||||||||
Net asset value of shares issued upon reinvestment of | ||||||||||
dividends and distributions: | ||||||||||
Class A | 15,010,949 | 6,018,329 | ||||||||
Class C | 766,552 | 893,767 | ||||||||
Class R | 491,081 | 403,318 | ||||||||
Institutional Class | 29,700,204 | 22,695,053 | ||||||||
Class R6 | 428,765 | 135,585 | ||||||||
627,815,138 | 743,048,461 |
47
Statements of changes in net assets
Delaware Corporate Bond Fund
Year ended | ||||||||||
7/31/22 | 7/31/21 | |||||||||
Capital Share Transactions (continued): | ||||||||||
Cost of shares redeemed: | ||||||||||
Class A | $ | (104,971,738 | ) | $ | (56,017,472 | ) | ||||
Class C | (11,422,953 | ) | (26,706,524 | ) | ||||||
Class R | (3,438,764 | ) | (5,730,495 | ) | ||||||
Institutional Class | (467,733,349 | ) | (315,442,776 | ) | ||||||
Class R6 | (1,514,701 | ) | (1,381,056 | ) | ||||||
(589,081,505 | ) | (405,278,323 | ) | |||||||
Increase in net assets derived from capital share | ||||||||||
transactions | 38,733,633 | 337,770,138 | ||||||||
Net Increase (Decrease) in Net Assets | (219,310,729 | ) | 331,244,936 | |||||||
Net Assets: | ||||||||||
Beginning of year | 1,500,648,776 | 1,169,403,840 | ||||||||
End of year | $ | 1,281,338,047 | $ | 1,500,648,776 |
1 | See Note 7 in the "Notes to financial statements." |
See accompanying notes, which are an integral part of the financial statements.
48
Statements of changes in net assets
Delaware Extended Duration Bond Fund
Year ended | ||||||||||
7/31/22 | 7/31/21 | |||||||||
Increase (Decrease) in Net Assets from Operations: | ||||||||||
Net investment income (loss) | $ | 16,583,393 | $ | 16,961,452 | ||||||
Net realized gain (loss) | (5,836,806 | ) | 27,853,333 | |||||||
Net change in unrealized appreciation (depreciation) | (120,731,674 | ) | (36,050,970 | ) | ||||||
Net increase (decrease) in net assets resulting from | ||||||||||
operations | (109,985,087 | ) | 8,763,815 | |||||||
Dividends and Distributions to Shareholders from: | ||||||||||
Distributable earnings: | ||||||||||
Class A | (6,861,085 | ) | (10,259,343 | ) | ||||||
Class C | (533,847 | ) | (1,069,037 | ) | ||||||
Class R | (558,490 | ) | (1,012,132 | ) | ||||||
Institutional Class | (30,946,647 | ) | (36,442,248 | ) | ||||||
Class R6 | (1,338,802 | ) | (5,456,563 | ) | ||||||
(40,238,871 | ) | (54,239,323 | ) | |||||||
Capital Share Transactions: | ||||||||||
Proceeds from shares sold: | ||||||||||
Class A | 8,345,796 | 21,708,782 | ||||||||
Class C | 427,503 | 1,964,039 | ||||||||
Class R | 1,038,551 | 4,476,571 | ||||||||
Institutional Class | 111,528,548 | 154,398,160 | ||||||||
Class R6 | 5,415,600 | 4,411,563 | ||||||||
Net asset value of shares issued upon reinvestment of | ||||||||||
dividends and distributions: | ||||||||||
Class A | 6,742,603 | 10,028,703 | ||||||||
Class C | 527,072 | 1,061,090 | ||||||||
Class R | 558,211 | 1,018,084 | ||||||||
Institutional Class | 29,697,854 | 35,026,097 | ||||||||
Class R6 | 1,338,417 | 5,471,382 | ||||||||
165,620,155 | 239,564,471 |
49
Statements of changes in net assets
Delaware Extended Duration Bond Fund
Year ended | ||||||||||
7/31/22 | 7/31/21 | |||||||||
Capital Share Transactions (continued): | ||||||||||
Cost of shares redeemed: | ||||||||||
Class A | $ | (21,978,244 | ) | $ | (52,885,444 | ) | ||||
Class C | (2,642,980 | ) | (6,570,699 | ) | ||||||
Class R | (2,616,360 | ) | (7,930,331 | ) | ||||||
Institutional Class | (97,645,636 | ) | (132,963,122 | ) | ||||||
Class R6 | (51,208,958 | ) | (2,680,014 | ) | ||||||
(176,092,178 | ) | (203,029,610 | ) | |||||||
Increase (decrease) in net assets derived from capital | ||||||||||
share transactions | (10,472,023 | ) | 36,534,861 | |||||||
Net Decrease in Net Assets | (160,695,981 | ) | (8,940,647 | ) | ||||||
Net Assets: | ||||||||||
Beginning of year | 582,085,014 | 591,025,661 | ||||||||
End of year | $ | 421,389,033 | $ | 582,085,014 |
See accompanying notes, which are an integral part of the financial statements.
50
Financial highlights
Delaware Corporate Bond Fund Class A
Selected data for each share of the Fund outstanding throughout each period were as follows:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income2 |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Net realized gain |
Total dividends and distributions |
Net asset value, end of period |
Total return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets4 |
Ratio of expenses to average net assets prior to fees waived4 |
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 | On September 9, 2022, the Fund declared a 3 for 1 reverse stock split. The net asset values and per share information have been revised to reflect the reverse stock split (See Note 14 in the Notes to Financial Statements). |
2 |
Calculated using average shares outstanding. |
3 |
Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
4 |
Expense ratios do not include expenses of any Underlying Funds in which the Fund invests. |
See accompanying notes, which are an integral part of the financial statements.
52
Year ended | ||||||||||||||||||||
7/31/221 | 7/31/211 | 7/31/201 | 7/31/191 | 7/31/181 | ||||||||||||||||
$ | 19.47 | $ | 19.62 | $ | 17.91 | $ | 16.83 | $ | 17.70 | |||||||||||
0.45 | 0.45 | 0.51 | 0.63 | 0.57 | ||||||||||||||||
(3.10 | ) | 0.03 | 1.74 | 1.11 | (0.81 | ) | ||||||||||||||
(2.65 | ) | 0.48 | 2.25 | 1.74 | (0.24 | ) | ||||||||||||||
(0.51 | ) | (0.51 | ) | (0.54 | ) | (0.66 | ) | (0.63 | ) | |||||||||||
(0.30 | ) | (0.12 | ) | — | — | — | ||||||||||||||
(0.81 | ) | (0.63 | ) | (0.54 | ) | (0.66 | ) | (0.63 | ) | |||||||||||
$ | 16.01 | $ | 19.47 | $ | 19.62 | $ | 17.91 | $ | 16.83 | |||||||||||
(13.91% | ) | 2.47% | 12.90% | 10.65% | (1.44% | ) | ||||||||||||||
$ | 285,977 | $ | 412,495 | $ | 199,500 | $ | 168,910 | $ | 200,600 | |||||||||||
0.82% | 0.82% | 0.82% | 0.82% | 0.88% | ||||||||||||||||
0.91% | 0.91% | 0.91% | 0.92% | 0.92% | ||||||||||||||||
2.49% | 2.31% | 2.71% | 3.68% | 3.26% | ||||||||||||||||
2.40% | 2.22% | 2.62% | 3.58% | 3.22% | ||||||||||||||||
109% | 123% | 172% | 173% | 158% |
53
Financial highlights
Delaware Corporate Bond Fund Class C
Selected data for each share of the Fund outstanding throughout each period were as follows:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income2 |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Net realized gain |
Total dividends and distributions |
Net asset value, end of period |
Total return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets4 |
Ratio of expenses to average net assets prior to fees waived4 |
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 | On September 9, 2022, the Fund declared a 3 for 1 reverse stock split. The net asset values and per share information have been revised to reflect the reverse stock split (See Note 14 in the Notes to Financial Statements). |
2 |
Calculated using average shares outstanding. |
3 |
Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
4 |
Expense ratios do not include expenses of any Underlying Funds in which the Fund invests. |
See accompanying notes, which are an integral part of the financial statements.
54
Year ended | ||||||||||||||||||||
7/31/221 | 7/31/211 | 7/31/201 | 7/31/191 | 7/31/181 | ||||||||||||||||
$ | 19.47 | $ | 19.62 | $ | 17.91 | $ | 16.83 | $ | 17.70 | |||||||||||
0.30 | 0.30 | 0.36 | 0.51 | 0.42 | ||||||||||||||||
(3.07 | ) | 0.03 | 1.77 | 1.11 | (0.81 | ) | ||||||||||||||
(2.77 | ) | 0.33 | 2.13 | 1.62 | (0.39 | ) | ||||||||||||||
(0.39 | ) | (0.36 | ) | (0.42 | ) | (0.54 | ) | (0.48 | ) | |||||||||||
(0.30 | ) | (0.12 | ) | — | — | — | ||||||||||||||
(0.69 | ) | (0.48 | ) | (0.42 | ) | (0.54 | ) | (0.48 | ) | |||||||||||
$ | 16.01 | $ | 19.47 | $ | 19.62 | $ | 17.91 | $ | 16.83 | |||||||||||
(14.55% | ) | 1.70% | 12.05% | 9.83% | (2.18% | ) | ||||||||||||||
$ | 15,995 | $ | 28,365 | $ | 48,283 | $ | 68,277 | $ | 88,274 | |||||||||||
1.57% | 1.57% | 1.57% | 1.57% | 1.63% | ||||||||||||||||
1.66% | 1.66% | 1.66% | 1.67% | 1.67% | ||||||||||||||||
1.74% | 1.56% | 1.96% | 2.93% | 2.51% | ||||||||||||||||
1.65% | 1.47% | 1.87% | 2.83% | 2.47% | ||||||||||||||||
109% | 123% | 172% | 173% | 158% |
55
Financial highlights
Delaware Corporate Bond Fund Class R
Selected data for each share of the Fund outstanding throughout each period were as follows:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income2 |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Net realized gain |
Total dividends and distributions |
Net asset value, end of period |
Total return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets4 |
Ratio of expenses to average net assets prior to fees waived4 |
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 | On September 9, 2022, the Fund declared a 3 for 1 reverse stock split. The net asset values and per share information have been revised to reflect the reverse stock split (See Note 14 in the Notes to Financial Statements). |
2 |
Calculated using average shares outstanding. |
3 |
Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
4 |
Expense ratios do not include expenses of any Underlying Funds in which the Fund invests. |
See accompanying notes, which are an integral part of the financial statements.
56
Year ended | ||||||||||||||||||||
7/31/221 | 7/31/211 | 7/31/201 | 7/31/191 | 7/31/181 | ||||||||||||||||
$ | 19.50 | $ | 19.62 | $ | 17.94 | $ | 16.86 | $ | 17.70 | |||||||||||
0.39 | 0.39 | 0.45 | 0.57 | 0.51 | ||||||||||||||||
(3.09 | ) | 0.06 | 1.74 | 1.14 | (0.78 | ) | ||||||||||||||
(2.70 | ) | 0.45 | 2.19 | 1.71 | (0.27 | ) | ||||||||||||||
(0.48 | ) | (0.45 | ) | (0.51 | ) | (0.63 | ) | (0.57 | ) | |||||||||||
(0.30 | ) | (0.12 | ) | — | — | — | ||||||||||||||
(0.78 | ) | (0.57 | ) | (0.51 | ) | (0.63 | ) | (0.57 | ) | |||||||||||
$ | 16.02 | $ | 19.50 | $ | 19.62 | $ | 17.94 | $ | 16.86 | |||||||||||
(14.26% | ) | 2.37% | 12.43% | 10.36% | (1.51% | ) | ||||||||||||||
$ | 9,419 | $ | 12,760 | $ | 14,107 | $ | 17,517 | $ | 19,512 | |||||||||||
1.07% | 1.07% | 1.07% | 1.07% | 1.13% | ||||||||||||||||
1.16% | 1.16% | 1.16% | 1.17% | 1.17% | ||||||||||||||||
2.24% | 2.06% | 2.46% | 3.43% | 3.01% | ||||||||||||||||
2.15% | 1.97% | 2.37% | 3.33% | 2.97% | ||||||||||||||||
109% | 123% | 172% | 173% | 158% |
57
Financial highlights
Delaware Corporate Bond Fund Institutional Class
Selected data for each share of the Fund outstanding throughout each period were as follows:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income2 |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Net realized gain |
Total dividends and distributions |
Net asset value, end of period |
Total return3 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets4 |
Ratio of expenses to average net assets prior to fees waived4 |
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 | On September 9, 2022, the Fund declared a 3 for 1 reverse stock split. The net asset values and per share information have been revised to reflect the reverse stock split (See Note 14 in the Notes to Financial Statements). |
2 |
Calculated using average shares outstanding. |
3 |
Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
4 |
Expense ratios do not include expenses of any Underlying Funds in which the Fund invests. |
See accompanying notes, which are an integral part of the financial statements.
58
Year ended | ||||||||||||||||||||
7/31/221 | 7/31/211 | 7/31/201 | 7/31/191 | 7/31/181 | ||||||||||||||||
$ | 19.47 | $ | 19.62 | $ | 17.91 | $ | 16.83 | $ | 17.70 | |||||||||||
0.48 | 0.48 | 0.54 | 0.66 | 0.60 | ||||||||||||||||
(3.07 | ) | 0.06 | 1.77 | 1.11 | (0.81 | ) | ||||||||||||||
(2.59 | ) | 0.54 | 2.31 | 1.77 | (0.21 | ) | ||||||||||||||
(0.57 | ) | (0.57 | ) | (0.60 | ) | (0.69 | ) | (0.66 | ) | |||||||||||
(0.30 | ) | (0.12 | ) | — | — | — | ||||||||||||||
(0.87 | ) | (0.69 | ) | (0.60 | ) | (0.69 | ) | (0.66 | ) | |||||||||||
$ | 16.01 | $ | 19.47 | $ | 19.62 | $ | 17.91 | $ | 16.83 | |||||||||||
(13.69% | ) | 2.72% | 13.18% | 10.93% | (1.20% | ) | ||||||||||||||
$ | 957,741 | $ | 1,036,266 | $ | 903,456 | $ | 730,173 | $ | 860,359 | |||||||||||
0.57% | 0.57% | 0.57% | 0.57% | 0.63% | ||||||||||||||||
0.66% | 0.66% | 0.66% | 0.67% | 0.67% | ||||||||||||||||
2.74% | 2.56% | 2.96% | 3.93% | 3.51% | ||||||||||||||||
2.65% | 2.47% | 2.87% | 3.83% | 3.47% | ||||||||||||||||
109% | 123% | 172% | 173% | 158% |
59
Financial highlights
Delaware Corporate Bond Fund Class R6
Selected data for each share of the Fund outstanding throughout each period were as follows:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income3 |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Net realized gain |
Total dividends and distributions |
Net asset value, end of period |
Total return4 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets5 |
Ratio of expenses to average net assets prior to fees waived5 |
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 | Date of commencement of operations; ratios have been annualized and total return has not been annualized. |
2 | On September 9, 2022, the Fund declared a 3 for 1 reverse stock split. The net asset values and per share information have been revised to reflect the reverse stock split (See Note 14 in the Notes to Financial Statements). |
3 | Calculated using average shares outstanding. |
4 | Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
5 | Expense ratios do not include expenses of any Underlying Funds in which the Fund invests. |
6 | Portfolio turnover is representative of the Fund for the entire period. |
See accompanying notes, which are an integral part of the financial statements.
60
1/31/191 | ||||||||||||||||
Year ended | to | |||||||||||||||
7/31/222 | 7/31/212 | 7/31/202 | 7/31/192 | |||||||||||||
$ | 19.47 | $ | 19.59 | $ | 17.91 | $ | 16.77 | |||||||||
0.51 | 0.51 | 0.57 | 0.33 | |||||||||||||
(3.11 | ) | 0.06 | 1.74 | 1.17 | ||||||||||||
(2.60 | ) | 0.57 | 2.31 | 1.50 | ||||||||||||
(0.57 | ) | (0.57 | ) | (0.63 | ) | (0.36 | ) | |||||||||
(0.30 | ) | (0.12 | ) | — | — | |||||||||||
(0.87 | ) | (0.69 | ) | (0.63 | ) | (0.36 | ) | |||||||||
$ | 16.00 | $ | 19.47 | $ | 19.59 | $ | 17.91 | |||||||||
(13.78% | ) | 2.97% | 13.12% | 8.98% | ||||||||||||
$ | 12,206 | $ | 10,763 | $ | 4,058 | $ | 2 | |||||||||
0.48% | 0.48% | 0.48% | 0.48% | |||||||||||||
0.57% | 0.57% | 0.57% | 0.58% | |||||||||||||
2.83% | 2.65% | 3.05% | 4.01% | |||||||||||||
2.74% | 2.56% | 2.96% | 3.91% | |||||||||||||
109% | 123% | 172% | 173% | 6 |
61
Financial highlights
Delaware Extended Duration Bond Fund Class A
Selected data for each share of the Fund outstanding throughout each period were as follows:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income2 |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Net realized gain |
Return of capital |
Total dividends and distributions |
Net asset value, end of period |
Total return4 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets5 |
Ratio of expenses to average net assets prior to fees waived5 |
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 | On September 9, 2022, the Fund declared a 3 for 1 reverse stock split. The net asset values and per share information have been revised to reflect the reverse stock split (See Note 14 in the Notes to Financial Statements). |
2 | Calculated using average shares outstanding. |
3 | Amount is less than $(0.005) per share. |
4 | Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
5 | Expense ratios do not include expenses of any Underlying Funds in which the Fund invests. |
See accompanying notes, which are an integral part of the financial statements.
62
Year ended | ||||||||||||||||||||
7/31/221 | 7/31/211 | 7/31/201 | 7/31/191 | 7/31/181 | ||||||||||||||||
$ | 21.36 | $ | 23.19 | $ | 20.52 | $ | 18.84 | $ | 19.86 | |||||||||||
0.57 | 0.60 | 0.66 | 0.72 | 0.69 | ||||||||||||||||
(4.62 | ) | (0.36 | ) | 3.15 | 1.68 | (1.02 | ) | |||||||||||||
(4.05 | ) | 0.24 | 3.81 | 2.40 | (0.33 | ) | ||||||||||||||
(0.60 | ) | (0.63 | ) | (0.69 | ) | (0.72 | ) | (0.69 | ) | |||||||||||
(0.90 | ) | (1.44 | ) | (0.45 | ) | — | — | |||||||||||||
— | 3 | — | — | — | — | |||||||||||||||
(1.50 | ) | (2.07 | ) | (1.14 | ) | (0.72 | ) | (0.69 | ) | |||||||||||
$ | 15.81 | $ | 21.36 | $ | 23.19 | $ | 20.52 | $ | 18.84 | |||||||||||
(20.07% | ) | 1.24% | 19.19% | 13.17% | (1.64% | ) | ||||||||||||||
$ | 66,508 | $ | 99,512 | $ | 130,678 | $ | 125,213 | $ | 150,397 | |||||||||||
0.82% | 0.82% | 0.82% | 0.82% | 0.87% | ||||||||||||||||
1.01% | 0.99% | 0.98% | 0.98% | 0.98% | ||||||||||||||||
3.09% | 2.85% | 3.16% | 3.78% | 3.52% | ||||||||||||||||
2.90% | 2.68% | 3.00% | 3.62% | 3.41% | ||||||||||||||||
76% | 85% | 108% | 133% | 147% |
63
Financial highlights
Delaware Extended Duration Bond Fund Class C
Selected data for each share of the Fund outstanding throughout each period were as follows:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income2 |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Net realized gain |
Return of capital |
Total dividends and distributions |
Net asset value, end of period |
Total return4 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets5 |
Ratio of expenses to average net assets prior to fees waived5 |
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 | On September 9, 2022, the Fund declared a 3 for 1 reverse stock split. The net asset values and per share information have been revised to reflect the reverse stock split (See Note 14 in the Notes to Financial Statements). |
2 | Calculated using average shares outstanding. |
3 | Amount is less than $(0.005) per share. |
4 | Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
5 | Expense ratios do not include expenses of any Underlying Funds in which the Fund invests. |
See accompanying notes, which are an integral part of the financial statements.
64
Year ended | ||||||||||||||||||||
7/31/221 | 7/31/211 | 7/31/201 | 7/31/191 | 7/31/181 | ||||||||||||||||
$ | 21.36 | $ | 23.16 | $ | 20.49 | $ | 18.81 | $ | 19.83 | |||||||||||
0.45 | 0.45 | 0.51 | 0.57 | 0.54 | ||||||||||||||||
(4.66 | ) | (0.33 | ) | 3.15 | 1.68 | (0.99 | ) | |||||||||||||
(4.21 | ) | 0.12 | 3.66 | 2.25 | (0.45 | ) | ||||||||||||||
(0.45 | ) | (0.48 | ) | (0.54 | ) | (0.57 | ) | (0.57 | ) | |||||||||||
(0.90 | ) | (1.44 | ) | (0.45 | ) | — | — | |||||||||||||
— | 3 | — | — | — | — | |||||||||||||||
(1.35 | ) | (1.92 | ) | (0.99 | ) | (0.57 | ) | (0.57 | ) | |||||||||||
$ | 15.80 | $ | 21.36 | $ | 23.16 | $ | 20.49 | $ | 18.81 | |||||||||||
(20.66% | ) | 0.62% | 18.32% | 12.34% | (2.39% | ) | ||||||||||||||
$ | 5,319 | $ | 9,171 | $ | 13,859 | $ | 14,748 | $ | 17,612 | |||||||||||
1.57% | 1.57% | 1.57% | 1.57% | 1.62% | ||||||||||||||||
1.76% | 1.74% | 1.73% | 1.73% | 1.73% | ||||||||||||||||
2.34% | 2.10% | 2.41% | 3.03% | 2.77% | ||||||||||||||||
2.15% | 1.93% | 2.25% | 2.87% | 2.66% | ||||||||||||||||
76% | 85% | 108% | 133% | 147% |
65
Financial highlights
Delaware Extended Duration Bond Fund Class R
Selected data for each share of the Fund outstanding throughout each period were as follows:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income2 |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Net realized gain |
Return of capital |
Total dividends and distributions |
Net asset value, end of period |
Total return4 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets5 |
Ratio of expenses to average net assets prior to fees waived5 |
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 | On September 9, 2022, the Fund declared a 3 for 1 reverse stock split. The net asset values and per share information have been revised to reflect the reverse stock split (See Note 14 in the Notes to Financial Statements). |
2 |
Calculated using average shares outstanding. |
3 |
Amount is less than $(0.005) per share. |
4 |
Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
5 |
Expense ratios do not include expenses of any Underlying Funds in which the Fund invests. |
See accompanying notes, which are an integral part of the financial statements.
66
Year ended | ||||||||||||||||||||
7/31/221 | 7/31/211 | 7/31/201 | 7/31/191 | 7/31/181 | ||||||||||||||||
$ | 21.42 | $ | 23.22 | $ | 20.55 | $ | 18.87 | $ | 19.89 | |||||||||||
0.54 | 0.54 | 0.63 | 0.66 | 0.63 | ||||||||||||||||
(4.68 | ) | (0.30 | ) | 3.12 | 1.71 | (0.99 | ) | |||||||||||||
(4.14 | ) | 0.24 | 3.75 | 2.37 | (0.36 | ) | ||||||||||||||
(0.54 | ) | (0.60 | ) | (0.63 | ) | (0.69 | ) | (0.66 | ) | |||||||||||
(0.90 | ) | (1.44 | ) | (0.45 | ) | — | — | |||||||||||||
— | 3 | — | — | — | — | |||||||||||||||
(1.44 | ) | (2.04 | ) | (1.08 | ) | (0.69 | ) | (0.66 | ) | |||||||||||
$ | 15.84 | $ | 21.42 | $ | 23.22 | $ | 20.55 | $ | 18.87 | |||||||||||
(20.35% | ) | 1.13% | 18.87% | 12.87% | (1.88% | ) | ||||||||||||||
$ | 5,489 | $ | 8,631 | $ | 12,065 | $ | 11,984 | $ | 15,389 | |||||||||||
1.07% | 1.07% | 1.07% | 1.07% | 1.12% | ||||||||||||||||
1.26% | 1.24% | 1.23% | 1.23% | 1.23% | ||||||||||||||||
2.84% | 2.60% | 2.91% | 3.53% | 3.27% | ||||||||||||||||
2.65% | 2.43% | 2.75% | 3.37% | 3.16% | ||||||||||||||||
76% | 85% | 108% | 133% | 147% |
67
Financial highlights
Delaware Extended Duration Bond Fund Institutional Class
Selected data for each share of the Fund outstanding throughout each period were as follows:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income2 |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Net realized gain |
Return of capital |
Total dividends and distributions |
Net asset value, end of period |
Total return4 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets5 |
Ratio of expenses to average net assets prior to fees waived5 |
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 | On September 9, 2022, the Fund declared a 3 for 1 reverse stock split. The net asset values and per share information have been revised to reflect the reverse stock split (See Note 14 in the Notes to Financial Statements). |
2 |
Calculated using average shares outstanding. |
3 |
Amount is less than $(0.005) per share. |
4 |
Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
5 |
Expense ratios do not include expenses of any Underlying Funds in which the Fund invests. |
See accompanying notes, which are an integral part of the financial statements.
68
Year ended | ||||||||||||||||||||
7/31/221 | 7/31/211 | 7/31/201 | 7/31/191 | 7/31/181 | ||||||||||||||||
$ | 21.33 | $ | 23.13 | $ | 20.46 | $ | 18.81 | $ | 19.83 | |||||||||||
0.60 | 0.66 | 0.72 | 0.75 | 0.75 | ||||||||||||||||
(4.62 | ) | (0.33 | ) | 3.15 | 1.68 | (1.02 | ) | |||||||||||||
(4.02 | ) | 0.33 | 3.87 | 2.43 | (0.27 | ) | ||||||||||||||
(0.63 | ) | (0.69 | ) | (0.75 | ) | (0.78 | ) | (0.75 | ) | |||||||||||
(0.90 | ) | (1.44 | ) | (0.45 | ) | — | — | |||||||||||||
— | 3 | — | — | — | — | |||||||||||||||
(1.53 | ) | (2.13 | ) | (1.20 | ) | (0.78 | ) | (0.75 | ) | |||||||||||
$ | 15.78 | $ | 21.33 | $ | 23.13 | $ | 20.46 | $ | 18.81 | |||||||||||
(19.90% | ) | 1.63% | 19.54% | 13.30% | (1.40% | ) | ||||||||||||||
$ | 332,410 | $ | 404,838 | $ | 377,316 | $ | 444,635 | $ | 433,957 | |||||||||||
0.57% | 0.57% | 0.57% | 0.57% | 0.62% | ||||||||||||||||
0.76% | 0.74% | 0.73% | 0.73% | 0.73% | ||||||||||||||||
3.34% | 3.10% | 3.41% | 4.03% | 3.77% | ||||||||||||||||
3.15% | 2.93% | 3.25% | 3.87% | 3.66% | ||||||||||||||||
76% | 85% | 108% | 133% | 147% |
69
Financial highlights
Delaware Extended Duration Bond Fund Class R6
Selected data for each share of the Fund outstanding throughout each period were as follows:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income2 |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Net realized gain |
Return of capital |
Total dividends and distributions |
Net asset value, end of period |
Total return4 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets5 |
Ratio of expenses to average net assets prior to fees waived5 |
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 | On September 9, 2022, the Fund declared a 3 for 1 reverse stock split. The net asset values and per share information have been revised to reflect the reverse stock split (See Note 14 in the Notes to Financial Statements). |
2 |
Calculated using average shares outstanding. |
3 |
Amount is less than $(0.005) per share. |
4 |
Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
5 |
Expense ratios do not include expenses of any Underlying Funds in which the Fund invests. |
See accompanying notes, which are an integral part of the financial statements.
70
Year ended | ||||||||||||||||||||
7/31/221 | 7/31/211 | 7/31/201 | 7/31/191 | 7/31/181 | ||||||||||||||||
$ | 21.33 | $ | 23.16 | $ | 20.49 | $ | 18.81 | $ | 19.83 | |||||||||||
0.69 | 0.69 | 0.75 | 0.78 | 0.75 | ||||||||||||||||
(4.67 | ) | (0.36 | ) | 3.12 | 1.68 | (0.99 | ) | |||||||||||||
(3.98 | ) | 0.33 | 3.87 | 2.46 | (0.24 | ) | ||||||||||||||
(0.66 | ) | (0.72 | ) | (0.75 | ) | (0.78 | ) | (0.78 | ) | |||||||||||
(0.90 | ) | (1.44 | ) | (0.45 | ) | — | — | |||||||||||||
— | 3 | — | — | — | — | |||||||||||||||
(1.56 | ) | (2.16 | ) | (1.20 | ) | (0.78 | ) | (0.78 | ) | |||||||||||
$ | 15.79 | $ | 21.33 | $ | 23.16 | $ | 20.49 | $ | 18.81 | |||||||||||
(19.83% | ) | 1.58% | 19.61% | 13.56% | (1.32% | ) | ||||||||||||||
$ | 11,663 | $ | 59,933 | $ | 57,108 | $ | 44,970 | $ | 48,373 | |||||||||||
0.48% | 0.48% | 0.49% | 0.49% | 0.54% | ||||||||||||||||
0.66% | 0.65% | 0.63% | 0.64% | 0.65% | ||||||||||||||||
3.43% | 3.19% | 3.49% | 4.11% | 3.85% | ||||||||||||||||
3.25% | 3.02% | 3.35% | 3.96% | 3.74% | ||||||||||||||||
76% | 85% | 108% | 133% | 147% |
71
Notes to financial statements | |
Delaware Corporate Bond Fund and | |
Delaware Extended Duration Bond Fund | July 31, 2022 |
Delaware Group® Income Funds (Trust) is organized as a Delaware statutory trust and offers four series: Delaware Corporate Bond Fund, Delaware Extended Duration Bond Fund, Delaware Floating Rate Fund, and Delaware High-Yield Opportunities Fund. These financial statements and the related notes pertain to Delaware Corporate Bond Fund and Delaware Extended Duration Bond Fund (each, a Fund or collectively, the Funds). The Trust is an open-end investment company. Each Fund is considered diversified under the Investment Company Act of 1940, as amended, and offers Class A, Class C, Class R, Institutional Class, and Class R6 shares. Class A shares are sold with a maximum front-end sales charge of 4.50%. There is no front-end sales charge when you purchase $1,000,000 or more of Class A shares. However, if Delaware Distributors, L.P. (DDLP) paid your financial intermediary a commission on your purchase of $1,000,000 or more of Class A shares, for shares purchased prior to July 1, 2020, you will have to pay a limited contingent deferred sales charge (Limited CDSC) of 1.00% if you redeem these shares within the first year after your purchase and 0.50% if you redeem these shares within the second year; or for shares purchased on or after July 1, 2020, you will have to pay a Limited CDSC of 1.00% if you redeem these shares within the first 18 months after your purchase; unless a specific waiver of the Limited CDSC applies. Class C shares have no upfront sales charge, but are sold with a contingent deferred sales charge (CDSC) of 1.00%, which will be incurred if redeemed during the first 12 months. Class R, Institutional Class, and Class R6 shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Class R6 shares do not pay any service fees, sub-accounting fees, and/or sub-transfer agency fees to any brokers, dealers, or other financial intermediaries.
1. Significant Accounting Policies
Each Fund follows accounting and reporting guidance under Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services — Investment Companies. The following accounting policies are in accordance with US generally accepted accounting principles (US GAAP) and are consistently followed by the Funds.
Security Valuation — Equity securities, except those traded on the Nasdaq Stock Market LLC (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange on the valuation date. Equity securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If, on a particular day, an equity security does not trade, the mean between the bid and the ask prices will be used, which approximates fair value. US government and agency securities are valued at the mean between the bid and the ask prices, which approximates fair value. Open-end investment companies are valued at their published net asset value (NAV). Other debt securities and credit default swap (CDS) contracts are valued based upon valuations provided by an independent pricing service or broker/counterparty and reviewed by management. To the extent current market prices are not available, the pricing service may take into account developments related to the specific security, as well as transactions in comparable securities. Valuations for fixed income securities utilize matrix systems, which reflect such factors as security prices,
72
yields, maturities, and ratings, and are supplemented by dealer and exchange quotations. Swap prices are derived using daily swap curves and models that incorporate a number of market data factors, such as discounted cash flows, trades, and values of the underlying reference instruments. Futures contracts are valued at the daily quoted settlement prices. Generally, other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of the Trust’s Board of Trustees (Board). In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures or suspension of trading in a security. Restricted securities are valued at fair value using methods approved by the Board.
Federal Income Taxes — No provision for federal income taxes has been made as each 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. Each Fund evaluates tax positions taken or expected to be taken in the course of preparing each Fund's tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current year. Management has analyzed each Fund’s tax positions taken or expected to be taken on each Fund’s federal income tax returns through the year ended July 31, 2022, and for all open tax years (years ended July 31, 2019–July 31, 2021), and has concluded that no provision for federal income tax is required in each Fund’s financial statements. If applicable, each Fund recognizes interest accrued on unrecognized tax benefits in interest expense and penalties in “Other” on the “Statements of operations.” During the year ended July 31, 2022, the Funds did not incur any interest or tax penalties.
Class Accounting — Investment income and common expenses are allocated to the various classes of each Fund on the basis of “settled shares” of each class in relation to the net assets of each Fund. Realized and unrealized gain (loss) on investments are allocated to the various classes of each Fund on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class. Class R6 shares will not be allocated any expenses related to service fees, sub-accounting fees, and/or sub-transfer agency fees paid to brokers, dealers, or other financial intermediaries.
Use of Estimates — The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the fair value of investments, the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and the differences could be material.
Other — Expenses directly attributable to a Fund are charged directly to that Fund. Other expenses common to various funds within the Delaware Funds by Macquarie® (Delaware Funds) are generally allocated among such funds on the basis of average net assets. Management fees and certain other expenses are paid monthly. Security transactions are recorded on the date the
73
Notes to financial statements
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
1. Significant Accounting Policies (continued)
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. Income and capital gain distributions from any investment companies (Underlying Funds) in which the Fund invests are recorded on the ex-dividend date. Discounts and premiums on debt securities are accreted or amortized to interest income, respectively, over the lives of the respective securities using the effective interest method. Premiums on callable debt securities are amortized to interest income to the earliest call date using the effective interest method. Each Fund declares dividends daily from net investment income and pays the dividends monthly and declares and pays distributions from net realized gain on investments, if any, annually. Each Fund may distribute more frequently, if necessary for tax purposes. Dividends and distributions, if any, are recorded on the ex-dividend date.
Each Fund receives earnings credits from its custodian when positive cash balances are maintained, which may be used to offset custody fees. The expenses paid under this arrangement are included on the “Statement of operations” under “Custodian fees” with the corresponding expenses offset included under “Less expenses paid indirectly.” There were no such earnings credits for the year ended July 31, 2022 for Delaware Corporate Bond Fund and Delaware Extended Duration Bond Fund.
Each Fund receives earnings credits from its transfer agent when positive cash balances are maintained, which may be used to offset transfer agent fees. If the amount earned is greater than $1, the expenses paid under this arrangement are included on the “Statements of operations” under “Dividend disbursing and transfer agent fees and expenses” with the corresponding expenses offset included under “Less expenses paid indirectly.” For the year ended July 31, 2022, each Fund earned the following amounts under this arrangement:
Fund | Earnings Credits | ||||
Delaware Corporate Bond Fund | $ | 910 | |||
Delaware Extended Duration Bond Fund | 144 |
2. Investment Management, Administration Agreements, and Other Transactions with Affiliates
In accordance with the terms of its respective investment management agreement, each Fund pays Delaware Management Company (DMC), a series of Macquarie Investment Management Business Trust and the investment manager, an annual fee which is calculated daily and paid monthly based on each Fund’s average daily net assets as follows:
Delaware Corporate Bond Fund | Delaware Extended Duration Bond Fund | |||
On the first $500 million | 0.5000% | 0.5500% | ||
On the next $500 million | 0.4750% | 0.5000% | ||
On the next $1.5 billion | 0.4500% | 0.4500% | ||
In excess of $2.5 billion | 0.4250% | 0.4250% |
74
DMC has contractually agreed to waive all or a portion of its management fee and/or pay/reimburse expenses (excluding any distribution and service (12b-1) fees, acquired fund fees and expenses, taxes, interest, short sale dividend and interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations), in order to prevent total annual fund operating expenses from exceeding 0.57% of average daily net assets of Class A, Class C, Class R, and Institutional Class shares and 0.48% of average daily net assets of Class R6 shares for each Fund. The expense waivers were in effect from August 1, 2021 through July 31, 2022.* These waivers and reimbursements may only be terminated by agreement of DMC and the Funds. The waivers and reimbursements are accrued daily and received monthly.
DMC may seek investment advice and recommendations from its affiliates: Macquarie Investment Management Europe Limited, Macquarie Investment Management Austria Kapitalanlage AG, and Macquarie Investment Management Global Limited (together, the “Affiliated Sub-Advisors”). The Manager may also permit these Affiliated Sub-Advisors to execute Fund security trades on behalf of the Manager and exercise investment discretion for securities in certain markets where DMC believes it will be beneficial to utilize an Affiliated Sub-Advisor’s specialized market knowledge. Although the Affiliated Sub-Advisors serve as sub-advisors, DMC has ultimate responsibility for all investment advisory services. For these services, DMC, not the Fund, may pay each Affiliated Sub-Advisor a portion of its investment management fee.
Delaware Investments Fund Services Company (DIFSC), an affiliate of DMC, provides fund accounting and financial administrative oversight services to each Fund. For these services, DIFSC’s fees are calculated daily and paid monthly, based on the aggregate daily net assets of all funds within the Delaware Funds at the following annual rates: 0.00475% of the first $35 billion; 0.0040% of the next $10 billion; 0.0025% of the next $45 billion; and 0.0015% of aggregate average daily net assets in excess of $90 billion (Total Fee). Each fund in the Delaware Funds pays a minimum of $4,000, which, in aggregate, is subtracted from the Total Fee. Each fund then pays its portion of the remainder of the Total Fee on a relative NAV basis. These amounts are included on the “Statements of operations” under “Accounting and administration expenses.” For the year ended July 31, 2022, each Fund paid these services as follows:
Fund | Fees | ||
Delaware Corporate Bond Fund | $ | 47,564 | |
Delaware Extended Duration Bond Fund | 20,568 |
DIFSC is also the transfer agent and dividend disbursing agent of each Fund. For these services, DIFSC’s fees are calculated daily and paid monthly, based on the aggregate daily net assets of the retail funds within the Delaware Funds at the following annual rates: 0.014% of the first $20 billion; 0.011% of the next $5 billion; 0.007% of the next $5 billion; 0.005% of the next $20 billion; and 0.0025% of average daily net assets in excess of $50 billion. The fees payable to DIFSC under the shareholder services agreement described above are allocated among all retail
75
Notes to financial statements
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
2. Investment Management, Administration Agreements, and Other Transactions with Affiliates (continued)
funds in the Delaware Funds on a relative NAV basis. This amount is included on the “Statements of operations” under “Dividend disbursing and transfer agent fees and expenses.” For the year ended July 31, 2022, each Fund paid for these services as follows:
Fund | Fees | ||
Delaware Corporate Bond Fund | $ | 60,811 | |
Delaware Extended Duration Bond Fund | 23,142 |
Pursuant to a sub-transfer agency agreement between DIFSC and BNY Mellon Investment Servicing (US) Inc. (BNYMIS), BNYMIS provides certain sub-transfer agency services to the Funds. Sub-transfer agency fees are paid by the Funds and are also included on the “Statements of operations” under “Dividend disbursing and transfer agent fees and expenses.” The fees that are calculated daily and paid as invoices are received on a monthly or quarterly basis.
Pursuant to a distribution agreement and distribution plan, each Fund pays DDLP, the distributor and an affiliate of DMC, an annual 12b-1 fee of 0.25%, 1.00%, and 0.50% of the average daily net assets of the Class A, Class C, and Class R shares, respectively. The fees are calculated daily and paid monthly. Institutional Class and Class R6 shares do not pay 12b-1 fees.
As provided in the investment management agreement, each Fund bears a portion of the cost of certain resources shared with DMC, including the cost of internal personnel of DMC and/or its affiliates that provide legal and regulatory reporting services to the Funds. These amounts are included on the “Statements of operations” under “Legal fees.” For the year ended July 31, 2022, each Fund paid for internal legal and regulatory reporting services provided by DMC and/or its affiliates’ employees as follows:
Fund | Fees | ||
Delaware Corporate Bond Fund | $ | 17,944 | |
Delaware Extended Duration Bond Fund | 6,494 |
For the year ended July 31, 2022, DDLP earned commissions on sales of Class A shares for each Fund as follows:
Fund | Class A | ||
Delaware Corporate Bond Fund | $ | 7,507 | |
Delaware Extended Duration Bond Fund | 8,825 |
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For the year ended July 31, 2022, DDLP received gross CDSC commissions on redemptions of each Fund’s Class A and Class C shares, respectively, and these commissions were entirely used to offset upfront commissions previously paid by DDLP to broker/dealers on sales of those shares. The amounts received were as follows:
Fund | Class A | Class C | ||||||
Delaware Corporate Bond Fund | $ | 309 | $ | 4,333 | ||||
Delaware Extended Duration Bond Fund | 18 | 2,964 |
Trustees’ fees include expenses accrued by each Fund for each Trustee’s retainer and meeting fees. Certain officers of DMC, DIFSC, and DDLP are officers and/or Trustees of the Trust. These officers and Trustees are paid no compensation by the Funds.
In addition to the management fees and other expenses of a Fund, a Fund indirectly bears the investment management fees and other expenses of any Underlying Funds in which it invests. The amount of these fees and expenses incurred indirectly by a Fund will vary based upon the expense and fee levels of any Underlying Funds and the number of shares that are owned of any Underlying Funds at different times.
* | The aggregate contractual waiver period covering this report is from November 27, 2020 through November 26, 2022. |
3. Investments
For the year ended July 31, 2022, each Fund made purchases and sales of investment securities other than short-term investments as follows:
Purchases | Sales | |||||||||||
other than | Purchases of | other than | Sales of | |||||||||
US government | US government | US government | US government | |||||||||
Fund | securities | securities | securities | securities | ||||||||
Delaware | ||||||||||||
Corporate | ||||||||||||
Bond | ||||||||||||
Fund | $ | 1,311,218,031 | $ | 117,930,106 | $ | 1,344,691,072 | $ | 104,560,316 | ||||
Delaware | ||||||||||||
Extended | ||||||||||||
Duration | ||||||||||||
Bond | ||||||||||||
Fund | 358,107,263 | 21,361,683 | 400,195,066 | 20,915,665 |
77
Notes to financial statements
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
3. Investments (continued)
The tax cost of investments and derivatives includes adjustments to net unrealized appreciation (depreciation) which may not necessarily be the final tax cost basis adjustments but which approximate the tax basis unrealized gains and losses that may be realized and distributed to shareholders. At July 31, 2022, the cost and unrealized appreciation (depreciation) of investments and derivatives for federal income tax purposes for each Fund were as follows:
Aggregate | Aggregate | Net unrealized | ||||||||
unrealized | unrealized | appreciation | ||||||||
Cost of | appreciation | depreciation | (depreciation) | |||||||
investments | of investments | of investments | of investments | |||||||
Fund | and derivatives | and derivatives | and derivatives | and derivatives | ||||||
Delaware | ||||||||||
Corporate | ||||||||||
Bond | ||||||||||
Fund | $1,404,744,994 | $8,296,562 | $(129,641,923 | ) | $(121,345,361 | ) | ||||
Delaware | ||||||||||
Extended | ||||||||||
Duration | ||||||||||
Bond | ||||||||||
Fund | 495,497,923 | 2,056,116 | (77,078,330 | ) | (75,022,214 | ) |
US GAAP defines fair value as the price that each Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. A three-level hierarchy for fair value measurements has been established based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability based on the best information available under the circumstances. Each Fund's investment in its entirety is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-level hierarchy of inputs is summarized as follows:
Level 1 – |
Inputs are quoted prices in active markets for identical investments. (Examples: equity securities, open-end investment companies, futures contracts, and exchange-traded options contracts) |
Level 2 – | Other observable inputs, including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market-corroborated inputs. (Examples: debt securities, government securities, swap |
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contracts, foreign currency exchange contracts, foreign securities utilizing international fair value pricing, broker-quoted securities, and fair valued securities) | |
Level 3 – | Significant unobservable inputs, including each Fund's own assumptions used to determine the fair value of investments. (Examples: broker-quoted securities and fair valued securities) |
Level 3 investments are valued using significant unobservable inputs. Each 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 tables summarize the valuation of each Fund’s investments by fair value hierarchy levels as of July 31, 2022:
Delaware Corporate Bond Fund | |||||||||||
Level 1 | Level 2 | Total | |||||||||
Securities | |||||||||||
Assets: | |||||||||||
Convertible Bonds | $ | — | $ | 4,954,993 | $ | 4,954,993 | |||||
Convertible Preferred Stock | 3,273,213 | — | 3,273,213 | ||||||||
Corporate Bonds | — | 1,139,569,039 | 1,139,569,039 | ||||||||
Loan Agreements | — | 32,359,963 | 32,359,963 | ||||||||
Municipal Bonds | — | 4,189,242 | 4,189,242 | ||||||||
Non-Agency Asset-Backed Securities | — | 22,988,086 | 22,988,086 | ||||||||
US Treasury Obligation | — | 14,555,662 | 14,555,662 | ||||||||
Short-Term Investments | 61,509,693 | — | 61,509,693 | ||||||||
Total Value of | |||||||||||
Securities Before Options Written | $ | 64,782,906 | $ | 1,218,616,985 | $ | 1,283,399,891 | |||||
Liabilities: | |||||||||||
Options Written | $ | — | $ | (258 | ) | $ | (258 | ) |
79
Notes to financial statements
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
3. Investments (continued)
Delaware Extended Duration Bond Fund | |||||||||||
Level 1 | Level 2 | Total | |||||||||
Securities | |||||||||||
Assets: | |||||||||||
Convertible Bond | $ | — | $ | 615,060 | $ | 615,060 | |||||
Convertible Preferred Stock | 3,644,344 | — | 3,644,344 | ||||||||
Corporate Bonds | — | 392,548,667 | 392,548,667 | ||||||||
Loan Agreements | — | 2,715,440 | 2,715,440 | ||||||||
Municipal Bonds | — | 9,578,884 | 9,578,884 | ||||||||
Short-Term Investments | 11,373,406 | — | 11,373,406 | ||||||||
Total Value of Securities Before Options Written | $ | 15,017,750 | $ | 405,458,051 | $ | 420,475,801 | |||||
Liabilities: | |||||||||||
Options Written | $ | — | $ | (92 | ) | $ | (92 | ) |
During the year ended July 31, 2022, there were no transfers into or out of Level 3 investments. Each Fund's policy is to recognize transfers into or out of Level 3 investments based on fair value at the beginning of the reporting period.
A reconciliation of Level 3 investments is presented when each Fund has a significant amount of Level 3 investments at the beginning or end of the period in relation to each Fund's net assets. During the year ended July 31, 2022, there were no Level 3 investments.
4. Dividend and Distribution Information
Income and long-term capital gain distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP. Additionally, distributions from net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. The tax character of dividends and distributions paid during the years ended July 31, 2022 and 2021 were as follows:
Long-term | |||||||||
Ordinary | capital | ||||||||
income | gains | Total | |||||||
Year ended July 31, 2022: | |||||||||
Delaware Corporate Bond Fund | $ | 53,572,160 | $ | 9,963,105 | $ | 63,535,265 | |||
Delaware Extended Duration Bond Fund | 18,148,186 | 22,090,685 | 40,238,871 | ||||||
Year ended July 31, 2021: | |||||||||
Delaware Corporate Bond Fund | 41,697,452 | — | 41,697,452 | ||||||
Delaware Extended Duration Bond Fund | 31,243,518 | 22,995,805 | 54,239,323 |
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5. Components of Net Assets on a Tax Basis
As of July 31, 2022, the components of net assets on a tax basis were as follows:
Delaware Corporate Bond Fund | Delaware Extended Duration Bond Fund | |||||||||||
Shares of beneficial | ||||||||||||
interest | $ | 1,469,268,623 | $ | 510,533,200 | ||||||||
Undistributed ordinary | ||||||||||||
income | 1,185,928 | — | ||||||||||
Qualified late year loss | ||||||||||||
deferrals | (66,367,342 | ) | (14,073,995 | ) | ||||||||
Distributions payable | (1,403,801 | ) | (47,958 | ) | ||||||||
Unrealized appreciation | ||||||||||||
(depreciation) of | ||||||||||||
investments and | ||||||||||||
derivatives | (121,345,361 | ) | (75,022,214 | ) | ||||||||
Net assets | $ | 1,281,338,047 | $ | 421,389,033 |
The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales, market discount and premium on debt instruments, treatment of swap contracts, and amortization of premium on callable bonds.
Qualified late year ordinary and capital losses (including currency and specified gain/loss items) represent losses realized from January 1, 2022 through July 31, 2022 and November 1, 2021 through July 31, 2022, respectively, that, in accordance with federal income tax regulations, the Funds have 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 the tax treatment of an over distribution. Results of operations and net assets were not affected by these reclassifications. For the year ended July 31, 2022, the Funds recorded the following reclassifications:
Delaware Corporate Bond Fund | Delaware Extended Duration Bond Fund | ||||||||||
Paid-in capital | $ | — | $ | (60 | ) | ||||||
Total distributable | |||||||||||
earnings (loss) | — | 60 |
81
Notes to financial statements
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
6. Capital Shares
Transactions in capital shares were as follows:
Delaware Corporate Bond Fund | Delaware Extended Duration Bond Fund | ||||||||||||
Year ended | Year ended | ||||||||||||
7/31/22 | 7/31/21 | 7/31/22 | 7/31/21 | ||||||||||
Shares sold: | |||||||||||||
Class A | 5,443,132 | 13,870,446 | 1,337,245 | 3,033,639 | |||||||||
Class C | 433,994 | 994,955 | 67,345 | 273,276 | |||||||||
Class R | 299,973 | 641,138 | 172,780 | 621,313 | |||||||||
Institutional Class | 95,679,484 | 66,967,180 | 18,352,336 | 22,047,194 | |||||||||
Class R6 | 820,125 | 1,223,264 | 965,481 | 642,600 | |||||||||
Shares from merger:1 | |||||||||||||
Class A | — | 26,938,299 | — | — | |||||||||
Institutional Class | — | 237,060 | — | — | |||||||||
Class R6 | — | 9,282 | — | — | |||||||||
Shares issued upon reinvestment of dividends and distributions: | |||||||||||||
Class A | 2,511,328 | 934,979 | 1,053,227 | 1,396,963 | |||||||||
Class C | 127,460 | 138,550 | 81,859 | 147,682 | |||||||||
Class R | 82,052 | 62,657 | 86,807 | 141,502 | |||||||||
Institutional Class | 4,971,110 | 3,529,688 | 4,674,917 | 4,899,650 | |||||||||
Class R6 | 72,244 | 21,146 | 204,748 | 764,585 | |||||||||
110,440,902 | 115,568,644 | 26,996,745 | 33,968,404 | ||||||||||
Shares from reverse stock split:2 | |||||||||||||
Class A | (35,731,587 | ) | — | (8,412,476 | ) | — | |||||||
Class C | (1,998,191 | ) | — | (673,298 | ) | — | |||||||
Class R | (1,175,918 | ) | — | (693,064 | ) | — | |||||||
Institutional Class | (119,672,963 | ) | — | (42,132,746 | ) | — | |||||||
Class R6 | (1,526,117 | ) | — | (1,477,058 | ) | — | |||||||
Shares redeemed: | |||||||||||||
Class A | (17,912,950 | ) | (8,710,360 | ) | (3,742,384 | ) | (7,373,751 | ) | |||||
Class C | (1,934,051 | ) | (4,150,439 | ) | (427,734 | ) | (927,512 | ) | |||||
Class R | (582,527 | ) | (895,885 | ) | (429,594 | ) | (1,112,317 | ) | |||||
Institutional Class | (80,802,301 | ) | (49,302,649 | ) | (16,774,383 | ) | (18,920,623 | ) | |||||
Class R6 | (262,597 | ) | (215,484 | ) | (7,378,161 | ) | (382,592 | ) | |||||
(261,599,202 | ) | (63,274,817 | ) | (82,140,898 | ) | (28,716,795 | ) | ||||||
Net increase (decrease) | (151,158,300 | ) | 52,293,827 | (55,144,153 | ) | 5,251,609 |
1 | See Note 7. |
82
2 | See Note 14. |
Certain shareholders may exchange shares of one class for shares of another class in the same Fund. These exchange transactions are included as subscriptions and redemptions in the table on the previous page and on the “Statements of changes in net assets.” For the years ended July 31, 2022 and 2021, each Fund had the following exchange transactions:
Exchange Redemptions | Exchange Subscriptions | ||||||||||
Institutional | |||||||||||
Class A | Class C | Class A | Class | ||||||||
Shares | Shares | Shares | Shares | Value | |||||||
Delaware Corporate Bond Fund | |||||||||||
Year ended | |||||||||||
7/31/22 | 181,426 | 17,672 | 17,688 | 181,435 | $ | 1,263,189 | |||||
7/31/21 | 30,925 | 131,264 | 117,831 | 45,115 | 1,033,858 | ||||||
Delaware Extended Duration Bond Fund | |||||||||||
Year ended | |||||||||||
7/31/22 | — | 3,347 | 3,349 | — | 22,273 | ||||||
7/31/21 | 17,795 | 38,368 | 38,366 | 17,828 | 395,253 |
7. Reorganization
On May 26-27, 2021, the Board approved a proposal to reorganize (the “Reorganization”) Delaware Investment Grade Fund (the “Acquired Fund”), a series of Delaware Group® Equity Funds IV, with and into Delaware Corporate Bond Fund (the “Acquiring Fund”), a series of the Trust. Pursuant to an Agreement and Plan of Reorganization (the “Plan”): (i) all of the property, assets, and goodwill of the Acquired Fund were acquired by the Acquiring Fund, and (ii) the Trust, on behalf of the Acquiring Fund, assumed the liabilities of the Acquired Fund, in exchange for shares of the Acquiring Fund. In accordance with the Plan, the Acquired Fund liquidated and dissolved following the Reorganization. The purpose of the transaction was to allow shareholders of the Acquired Fund to own shares of the Acquiring Fund, a fund with a similar investment objective and style as, and potentially lower net expenses than the Acquired Fund. The Reorganization was accomplished by a tax-free exchange of shares on July 9, 2021. For financial reporting purposes, assets received and shares issued by the Acquiring Fund were recorded at fair value; however, the cost basis of the investments received from the Acquired Fund was carried forward to align ongoing reporting of the Acquiring Fund’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.
83
Notes to financial statements
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
7. Reorganization (continued)
The share transactions associated with the Reorganization are as follows:
Shares | |||||||||||
Acquired | Acquired | Converted | Acquiring | ||||||||
Fund | Fund Shares | to Acquiring | Fund | Conversion | |||||||
Net Assets | Outstanding | Fund | Net Assets | Ratio | |||||||
Delaware Investment Grade Fund | Delaware Corporate Bond Fund | ||||||||||
Class A | $ | 173,482,646 | 17,684,476 | 26,938,299 | $ | 239,540,932 | 1.5233 | ||||
Institutional | |||||||||||
Class | 1,526,668 | 154,705 | 237,060 | 1,013,281,202 | 1.5323 | ||||||
Class R6 | 59,774 | 6,074 | 9,282 | 10,318,950 | 1.5282 |
The net assets of the Acquired Fund before the Reorganization were $175,069,088. The net assets of the Acquiring Fund immediately following the Reorganization were $1,479,521,731.
Assuming the Reorganization had been completed on August 1, 2020, the Acquiring Fund’s pro forma results of operations for the year ended July 31, 2021, would have been as follows:
Delaware Corporate Bond Fund | ||||||
Net investment income | $ | 35,853,534 | ||||
Net realized gain on investments | 37,327,491 | |||||
Net change in unrealized appreciation (depreciation) | (29,460,958 | ) | ||||
Net increase in net assets resulting from operations | $ | 43,720,067 |
Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practical to separate the amounts of revenue and earnings of the Acquired Fund that have been included in the Acquiring Fund’s Statement of Operations since the Reorganization was consummated on July 9, 2021.
8. Line of Credit
Each Fund, along with certain other funds in the Delaware Funds (Participants), was a participant in a $225,000,000 revolving line of credit (Agreement) intended to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. Under the Agreement, the Participants were charged an annual commitment fee of 0.15% with the addition of an upfront fee of 0.05%, which was allocated across the Participants based on a weighted average of the respective net assets of each Participant. 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 November 1, 2021.
On November 1, 2021, each Fund, along with the other Participants, entered into an amendment to the agreement for a $355,000,000 revolving line of credit to be used as described above and operates in substantially the same manner as the original Agreement. Under the amendment to
84
the agreement, the Participants are charged an annual commitment fee of 0.15%, with the addition of an upfront fee of 0.05%, which is allocated across the Participants based on a weighted average of the respective net assets of each Participant. The line of credit available under the agreement expires on October 31, 2022.
Each Fund had no amounts outstanding as of July 31, 2022, or at any time during the year then ended.
9. Derivatives
US GAAP requires disclosures that enable investors to understand: (1) how and why an entity uses derivatives; (2) how they are accounted for; and (3) how they affect an entity’s results of operations and financial position.
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. Each Fund may use futures in the normal course of pursuing its investment objective. Each Fund may invest in futures contracts to hedge its existing portfolio securities against fluctuations in value caused by changes in interest rates or market conditions. Upon entering into a futures contract, each Fund deposits cash or pledges US government securities to a broker, equal to the minimum “initial margin” requirements of the exchange on which the contract is traded. Subsequent payments are received from the broker or paid to the broker each day, based on the daily fluctuation in the market value of the contract. These receipts or payments are known as “variation margin” and are recorded daily by the Funds as unrealized gains or losses until the contracts are closed. When the contracts are closed, the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Risks of entering into futures contracts include potential imperfect correlation between the futures contracts and the underlying securities and the possibility of an illiquid secondary market for these instruments. When investing in futures, there is reduced counterparty credit risk to the Funds because futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees against default. No futures contracts were open at July 31, 2022.
During the year ended July 31, 2022, Delaware Extended Duration Bond Fund used futures contracts to hedge the Fund’s existing portfolio securities against fluctuations in value caused by changes in interest rates or market conditions.
During the year ended July 31, 2022, Delaware Extended Duration Bond Fund experienced net realized and unrealized gain or loss attributable to their use of futures contracts, which is disclosed as “Net realized gain (loss) on futures contracts” on the “Statements of operations.”
Options Contracts — Each Fund may enter into options contracts in the normal course of pursuing its investment objective. Each Fund may buy or write options contracts for any number of reasons, including without limitation: to manage each Fund's exposure to changes in securities
85
Notes to financial statements
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
9. Derivatives (continued)
prices caused by interest rates or market conditions and foreign currencies; as an efficient means of adjusting each Fund's overall exposure to certain markets; to protect the value of portfolio securities; and as a cash management tool. Each Fund may buy or write call or put options on securities, futures, swaps, swaptions, financial indices, and foreign currencies. When each Fund buys an option, a premium is paid and an asset is recorded and adjusted on a daily basis to reflect the current market value of the option purchased. When each Fund writes an option, a premium is received and a liability is recorded and adjusted on a daily basis to reflect the current market value of the option written. Premiums received from writing options that expire unexercised are treated by each 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 each Fund has a realized gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by each Fund. Each 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, each 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.
During the year ended July 31, 2022, each Fund used options contracts to receive premiums for writing options.
Swap Contracts — Each Fund may enter into CDS contracts in the normal course of pursuing its investment objective. Each Fund may enter into CDS contracts in order to hedge against credit events, to enhance total return, or to gain exposure to certain securities or markets. Swap contracts are bilaterally negotiated agreements between a Fund and counterparty to exchange or swap investment cash flows, assets, foreign currencies or market-linked returns at specified, future intervals. Swap agreements are privately negotiated in the over the counter market (OTC swaps). If the OTC swap entered is one of the swaps identified by a relevant regulator as a swap that is required to be cleared, then it will be cleared through a third party, known as a central counterparty or derivatives clearing organization (centrally cleared swaps).
Credit Default Swaps. A CDS contract is a risk-transfer instrument through which one party (purchaser of protection) transfers to another party (seller of protection) the financial risk of a credit event (as defined in the CDS agreement), as it relates to a particular reference security or basket of securities (such as an index). In exchange for the protection offered by the seller of protection, the purchaser of protection 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 each 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
86
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 July 31, 2022, Delaware Corporate Bond Fund entered into CDS contracts as a purchaser of protection. Periodic payments (receipts) on such contracts are accrued daily and recorded as unrealized losses (gains) on swap contracts. Upon payment (receipt), such amounts are recorded as realized losses (gains) on swap contracts. Upfront payments made or received in connection with CDS contracts are amortized over the expected life of the CDS contracts as unrealized losses (gains) on swap contracts. The change in value of CDS contracts is recorded daily as unrealized appreciation or depreciation. A realized gain or loss is recorded upon a credit event (as defined in the CDS agreement) or the maturity or termination of the agreement. Initial margin and variation margin are posted to central counterparties for centrally cleared CDS basket trades, as determined by the applicable central counterparty. During the year ended July 31, 2022, the Funds did not enter into any CDS contracts as a seller of protection.
CDS contracts may involve greater risks than if each Fund had invested in the reference obligation directly. CDS contracts are subject to general market risk, liquidity risk, counterparty risk, and credit risk. Each Fund's maximum risk of loss from counterparty credit risk, either as the seller of protection or the buyer of protection, is the fair value of the contract. This risk is mitigated by (1) for bilateral swap contracts, having a netting arrangement between each Fund and the counterparty and by the posting of collateral by the counterparty to each Fund to cover the Funds exposure to the counterparty or (2) for cleared swaps, trading these instruments through a central counterparty. No CDS contracts were open at July 31, 2022.
During the year ended July 31, 2022, each Fund used CDS contracts to hedge against credit events.
Swaps Generally. For centrally cleared swaps, payments are received from the broker or paid to the broker each day, based on the daily fluctuation in the market value of the contract. These receipts or payments are known as “variation margin” and are recorded by each Fund as unrealized gains or losses until the contracts are closed. When the contracts are closed, each Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The value of open swaps may differ from that which would be realized in the event each Fund terminated its position in the contract on a given day. Risks of entering into these contracts include the potential inability of the counterparty to meet the terms of the contracts. This type of risk is generally limited to the amount of favorable movement in the value of the underlying security, instrument, or basket of instruments, if any, at the day of default. Risks also arise from potential losses from adverse market movements and such losses could exceed the unrealized amounts shown on the “Schedules of investments.”
87
Notes to financial statements
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
9. Derivatives (continued)
The effect of derivative instruments on the “Statements of operations” for the year ended July 31, 2022 was as follows:
Delaware Corporate Bond Fund | ||||||
Net Realized Gain (Loss) on: | ||||||
Swap | ||||||
Contracts | ||||||
Credit | ||||||
contracts | $ | (9,976 | ) |
Net Change in Unrealized Appreciation (Depreciation) on: | ||||||
Options | Swap | |||||
Written | Contracts | Total | ||||
Credit | ||||||
contracts | $3,872 | $11,692 | $15,564 |
Delaware Extended Duration Bond Fund | ||||||||||
Net Realized Gain (Loss) on: | ||||||||||
Futures | Swap | |||||||||
Contracts | Contracts | Total | ||||||||
Interest rate | ||||||||||
contracts | $ | 642,309 | $ | — | $ | 642,309 | ||||
Credit | ||||||||||
contracts | — | (4,582 | ) | (4,582 | ) | |||||
Total | $ | 642,309 | $ | (4,582 | ) | $ | 637,727 |
Net Change in Unrealized Appreciation (Depreciation) on: | |||||||||||||
Futures | Options | Swap | |||||||||||
Contracts | Written | Contracts | Total | ||||||||||
Interest rate | |||||||||||||
contracts | $ | (2,191,831 | ) | $ | — | $ | — | $ | (2,191,831 | ) | |||
Credit | |||||||||||||
contracts | — | 1,383 | 5,014 | 6,397 | |||||||||
Total | $ | (2,191,831 | ) | $ | 1,383 | $ | 5,014 | $ | (2,185,434 | ) |
The table below summarizes the average daily balance of derivative holdings by each Fund during the year ended July 31, 2022:
Long Derivative Volume | |||
Delaware Extended Duration Bond Fund | |||
Futures contracts | |||
(average notional | |||
value) | $16,703,217 |
88
Short Derivative Volume | ||||
Delaware Corporate Bond Fund | Delaware Extended Duration Bond Fund | |||
Futures contracts | ||||
(average notional | ||||
value) | $— | $107,370 | ||
Options contracts | ||||
(average notional | ||||
value)* | 99 | 36 |
*Long represents purchased options and short represents written options
10. Securities Lending
Each Fund, along with other funds in Delaware Funds, may lend its securities pursuant to a security lending agreement (Lending Agreement) with The Bank of New York Mellon (BNY Mellon). At the time a security is loaned, the borrower must post collateral equal to the required percentage of the market value of the loaned security, including any accrued interest. The required percentage is: (1) 102% with respect to US securities and foreign securities that are denominated and payable in US dollars; and (2) 105% with respect to foreign securities. With respect to each loan, if on any business day the aggregate market value of securities collateral plus cash collateral held is less than the aggregate market value of the securities which are the subject of such loan, the borrower will be notified to provide additional collateral by the end of the following business day, which, together with the collateral already held, will be not less than the applicable initial collateral requirements for such security loan. If the aggregate market value of securities collateral and cash collateral held with respect to a security loan exceeds the applicable initial collateral requirement, upon the request of the borrower, BNY Mellon must return enough collateral to the borrower by the end of the following business day to reduce the value of the remaining collateral to the applicable initial collateral requirement for such security loan. As a result of the foregoing, the value of the collateral held with respect to a loaned security on any particular day, may be more or less than the value of the security on loan. The collateral percentage with respect to the market value of the loaned security is determined by the security lending agent.
Cash collateral received by each fund of the Trust is generally invested in a series of individual separate accounts, each corresponding to a fund. The investment guidelines permit each separate account to hold certain securities that would be considered eligible securities for a money market fund. Cash collateral received is generally invested in government securities; certain obligations issued by government sponsored enterprises; repurchase agreements collateralized by US Treasury securities; obligations issued by the central government of any Organization for Economic Cooperation and Development (OECD) country or its agencies, instrumentalities, or establishments; obligations of supranational organizations; commercial paper, notes, bonds, and other debt obligations; certificates of deposit, time deposits, and other
89
Notes to financial statements
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
10. Securities Lending (continued)
bank obligations; certain money market funds; and asset-backed securities. Each Fund can also accept US government securities and letters of credit (non-cash collateral) in connection with securities loans.
In the event of default or bankruptcy by the lending agent, realization and/or retention of the collateral may be subject to legal proceedings. In the event the borrower fails to return loaned securities and the collateral received is insufficient to cover the value of the loaned securities and provided such collateral shortfall is not the result of investment losses, the lending agent has agreed to pay the amount of the shortfall to each Fund or, at the discretion of the lending agent, replace the loaned securities. Each 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. Each 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, each 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 each Fund, the security lending agent, and the borrower. Each Fund records security lending income net of allocations to the security lending agent and the borrower.
Each Fund may incur investment losses as a result of investing securities lending collateral. This could occur if an investment in each collateral investment account defaulted or became impaired. Under those circumstances, the value of each Fund's cash collateral account may be less than the amount each Fund would be required to return to the borrowers of the securities and each Fund would be required to make up for this shortfall.
During the year ended July 31, 2022, each Fund had no securities out on loan.
11. Credit and Market Risk
Beginning in January 2020, global financial markets have experienced and may continue to experience significant volatility resulting from the spread of a novel coronavirus known as COVID-19. The outbreak of COVID-19 has resulted in travel and border restrictions, quarantines, supply chain disruptions, lower consumer demand, and general market uncertainty. The effects of COVID-19 have and may continue to adversely affect the global economy, the economies of certain nations, and individual issuers, all of which may negatively impact the Funds’ performance.
Each Fund invests in high yield fixed income securities, which are securities rated lower than BBB- by Standard & Poor's Financial Service LLC, lower than Baa3 by Moody’s 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.
90
When interest rates rise, fixed income securities (i.e. debt obligations) generally will decline in value. These declines in value are greater for fixed income securities with longer maturities or durations.
IBOR is the risk that changes related to the use of the London interbank offered rate (LIBOR) and other interbank offered rate (collectively, IBORs) could have adverse impacts on financial instruments that reference LIBOR (or the corresponding IBOR). The abandonment of LIBOR could affect the value and liquidity of instruments that reference LIBOR. The use of alternative reference rate products may impact investment strategy performance. These risks may also apply with respect to changes in connection with other IBORs, such as the euro overnight index average (EONIA), which are also the subject of recent reform.
Each Fund invests in bank loans and other securities that may subject them to direct indebtedness risk, the risk that the Funds will not receive payment of principal, interest, and other amounts due in connection with these investments and will depend primarily on the financial condition of the borrower. Loans that are fully secured offer the Funds more protection than unsecured loans in the event of nonpayment of scheduled interest or principal, although there is no assurance that the liquidation of collateral from a secured loan would satisfy the corporate borrower’s obligation, or that the collateral can be liquidated. Some loans or claims may be in default at the time of purchase. Certain of the loans and the other direct indebtedness acquired by the Funds may involve revolving credit facilities or other standby financing commitments that obligate the Funds to pay additional cash on a certain date or on demand. These commitments may require each Fund to increase its investment in a company at a time when the Funds might not otherwise decide to do so (including at a time when the company’s financial condition makes it unlikely that such amounts will be repaid). To the extent that each Fund is committed to advance additional funds, it will at all times hold and maintain cash or other high grade debt obligations in an amount sufficient to meet such commitments. When a loan agreement is purchased, the Funds may pay an assignment fee. On an ongoing basis, the Funds may receive a commitment fee based on the undrawn portion of the underlying line of credit portion of a loan agreement. Prepayment penalty fees are received upon the prepayment of a loan agreement by the borrower. Prepayment penalty, facility, commitment, consent, and amendment fees are recorded to income as earned or paid.
As the Funds may be required to rely upon another lending institution to collect and pass on to the Funds amounts payable with respect to the loan and to enforce the Funds’ rights under the loan and other direct indebtedness, an insolvency, bankruptcy, or reorganization of the lending institution may delay or prevent the Funds from receiving such amounts. The highly leveraged nature of many loans may make them especially vulnerable to adverse changes in economic or market conditions. Investments in such loans and other direct indebtedness may involve additional risk to the Funds.
Each Fund invests in certain obligations that may have liquidity protection designed to ensure that the receipt of payments due on the underlying security is timely. Such protection may be provided through guarantees, insurance policies, or letters of credit obtained by the issuer or
91
Notes to financial statements
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
11. Credit and Market Risk (continued)
sponsor through third parties, through various means of structuring the transaction, or through a combination of such approaches. The Funds will not pay any additional fees for such credit support, although the existence of credit support may increase the price of a security.
Each Fund may invest up to 15% of its net assets in illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A promulgated under the Securities Act of 1933, as amended, and other securities which may not be readily marketable. The relative illiquidity of these securities may impair each 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, each 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 securities have been identified on the “Schedules of investments.”
12. Contractual Obligations
Each Fund enters into contracts in the normal course of business that contain a variety of indemnifications. Each Fund's maximum exposure under these arrangements is unknown. However, each Fund has not had prior claims or losses pursuant to these contracts. Management has reviewed each Fund's existing contracts and expects the risk of loss to be remote.
13. Recent Accounting Pronouncements
In March 2020, FASB issued an Accounting Standards Update (ASU), ASU 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in ASU 2020-04 provide optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of LIBOR and other interbank-offered based reference rates as of the end of 2021. In March 2021, the administrator for LIBOR announced the extension of the publication of a majority of the USD LIBOR settings to June 30, 2023. ASU 2020-04 is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. As of the financial reporting period, Management is evaluating the impact of applying this ASU.
14. Revision to Previously Issued Financial Statements
Subsequent to the issuance of the July 31, 2022 financial statements, management determined that the impact of the reverse stock split of three to one (3:1) (“the “Reverse Stock Split”) approved on May 18, 2022 and effective September 9, 2022 (the “Effective Date”), had not been presented in the financial statements of the Funds, as required by the relevant US GAAP guidance. The impact of the error was not material to the July 31, 2022 financial statements.
92
As a result, each Fund has revised its statements of assets and liabilities, as of July 31, 2022, and its financial highlights for the periods ended July 31, 2022, 2021, 2020, 2019, and 2018, respectively, and its notes to financial statements, as of July 31, 2022.
The following summarizes the impact of the revision and excludes balances that were not revised:
Statements of assets and liabilities
July 31, 2022
Delaware Corporate | Delaware Extended Duration | |||||||||||
Bond Fund | Bond Fund | |||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||
Net Asset Value | ||||||||||||
Class A: | ||||||||||||
Shares of beneficial interest outstanding, unlimited authorization, no par |
53,597,380 | 17,865,793 | 12,618,714 | 4,206,238 | ||||||||
Sales charge | $ | 5.34 | $ | 16.01 | $ | 5.27 | $ | 15.81 | ||||
Offering price per share, equal to net asset value per share / (1 - sales charge) |
$ | 5.59 | $ | 16.76 | 5.52 | $ | 16.56 | |||||
Class C: | ||||||||||||
Shares of beneficial interest outstanding, unlimited authorization, no par |
2,997,286 | 999,095 | 1,009,947 | 336,649 | ||||||||
Net asset value per share | $ | 5.34 | $ | 16.01 | $ | 5.27 | $ | 15.80 |
93
Notes to financial statements
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
Delaware Corporate | Delaware Extended Duration | |||||||||||
Bond Fund | Bond Fund | |||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||
Class R: | ||||||||||||
Shares of beneficial interest outstanding, unlimited authorization, no par |
1,763,877 | 587,959 | 1,039,596 | 346,532 | ||||||||
Net asset value per share | $ | 5.34 | $ | 16.02 | $ | 5.28 | $ | 15.84 | ||||
Institutional Class: | ||||||||||||
Shares of beneficial interest outstanding, unlimited authorization, no par |
179,509,445 | 59,836,482 | 63,199,119 | 21,066,373 | ||||||||
Net asset value per share | $ | 5.34 | $ | 16.01 | $ | 5.26 | $ | 15.78 | ||||
Class R6: | ||||||||||||
Shares of beneficial interest outstanding, unlimited authorization, no par |
2,289,176 | 763,059 | 2,215,587 | 738,529 | ||||||||
Net asset value per share | $ | 5.33 | $ | 16.00 | $ | 5.26 | $ | 15.79 |
Financial highlights
Delaware Corporate Bond Fund Class A
7/31/22 | 7/31/21 | |||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||
Net asset value, beginning of period |
$ | 6.49 | $ | 19.47 | $ | 6.54 | $ | 19.62 | ||||||||||||
Income (loss) from investment operations: |
||||||||||||||||||||
Net investment income | 0.15 | 0.45 | 0.15 | 0.45 | ||||||||||||||||
Net realized and unrealized gain (loss) |
(1.03 | ) | (3.10 | ) | 0.01 | 0.03 | ||||||||||||||
Total from investment operations | (0.88 | ) | (2.65 | ) | 0.16 | 0.48 | ||||||||||||||
Less dividends and distributions from: |
||||||||||||||||||||
Net investment income | (0.17 | ) | (0.51 | ) | (0.17 | ) | (0.51 | ) | ||||||||||||
Net realized gain | (0.10 | ) | (0.30 | ) | (0.04 | ) | (0.12 | ) | ||||||||||||
Total dividends and distributions | (0.27 | ) | (0.81 | ) | (0.21 | ) | (0.63 | ) | ||||||||||||
Net asset value, end of period | $ | 5.34 | $ | 16.01 | $ | 6.49 | $ | 19.47 |
94
7/31/20 | 7/31/19 | |||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||
Net asset value, beginning of period |
$ | 5.97 | $ | 17.91 | $ | 5.61 | $ | 16.83 | ||||||||||||
Income (loss) from investment operations: |
||||||||||||||||||||
Net investment income | 0.17 | 0.51 | 0.21 | 0.63 | ||||||||||||||||
Net realized and unrealized gain (loss) |
0.58 | 1.74 | 0.37 | 1.11 | ||||||||||||||||
Total from investment operations | 0.75 | 2.25 | 0.58 | 1.74 | ||||||||||||||||
Less dividends and distributions from: |
||||||||||||||||||||
Net investment income | (0.18 | ) | (0.54 | ) | (0.22 | ) | (0.66 | ) | ||||||||||||
Total dividends and distributions | (0.18 | ) | (0.54 | ) | (0.22 | ) | (0.66 | ) | ||||||||||||
Net asset value, end of period | $ | 6.54 | $ | 19.62 | $ | 5.97 | $ | 17.91 | ||||||||||||
7/31/18 | ||||||||||||||||||||
Previously Reported | As Revised | |||||||||||||||||||
Net asset value, beginning of period |
$ | 5.90 | $ | 17.70 | ||||||||||||||||
Income (loss) from investment operations: |
||||||||||||||||||||
Net investment income | 0.19 | 0.57 | ||||||||||||||||||
Net realized and unrealized gain (loss) |
(0.27 | ) | (0.81 | ) | ||||||||||||||||
Total from investment operations | (0.08 | ) | (0.24 | ) | ||||||||||||||||
Less dividends and distributions from: |
||||||||||||||||||||
Net investment income | (0.21 | ) | (0.63 | ) | ||||||||||||||||
Total dividends and distributions | (0.21 | ) | (0.63 | ) | ||||||||||||||||
Net asset value, end of period | $ | 5.61 | $ | 16.83 |
95
Notes to financial statements
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
Delaware Corporate Bond Fund Class C
7/31/22 | 7/31/21 | |||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||
Net asset value, beginning of period |
$ | 6.49 | $ | 19.47 | $ | 6.54 | $ | 19.62 | ||||||||||||
Income (loss) from investment operations: |
||||||||||||||||||||
Net investment income | 0.10 | 0.30 | 0.10 | 0.30 | ||||||||||||||||
Net realized and unrealized gain (loss) |
(1.02 | ) | (3.07 | ) | 0.01 | 0.03 | ||||||||||||||
Total from investment operations | (0.92 | ) | (2.77 | ) | 0.11 | 0.33 | ||||||||||||||
Less dividends and distributions from: |
||||||||||||||||||||
Net investment income | (0.13 | ) | (0.39 | ) | (0.12 | ) | (0.36 | ) | ||||||||||||
Net realized gain | (0.10 | ) | (0.30 | ) | (0.04 | ) | (0.12 | ) | ||||||||||||
Total dividends and distributions | (0.23 | ) | (0.69 | ) | (0.16 | ) | (0.48 | ) | ||||||||||||
Net asset value, end of period | $ | 5.34 | $ | 16.01 | $ | 6.49 | $ | 19.47 | ||||||||||||
7/31/20 | 7/31/19 | |||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||
Net asset value, beginning of period |
$ | 5.97 | $ | 17.91 | $ | 5.61 | $ | 16.83 | ||||||||||||
Income (loss) from investment operations: |
||||||||||||||||||||
Net investment income | 0.12 | 0.36 | 0.17 | 0.51 | ||||||||||||||||
Net realized and unrealized gain (loss) |
0.59 | 1.77 | 0.37 | 1.11 | ||||||||||||||||
Total from investment operations | 0.71 | 2.13 | 0.54 | 1.62 | ||||||||||||||||
Less dividends and distributions from: |
||||||||||||||||||||
Net investment income | (0.14 | ) | (0.42 | ) | (0.18 | ) | (0.54 | ) | ||||||||||||
Total dividends and distributions | (0.14 | ) | (0.42 | ) | (0.18 | ) | (0.54 | ) | ||||||||||||
Net asset value, end of period | $ | 6.54 | $ | 19.62 | $ | 5.97 | $ | 17.91 |
96
7/31/18 | |||||||||||
Previously Reported | As Revised | ||||||||||
Net asset value, beginning of period |
$ | 5.90 | $ | 17.70 | |||||||
Income (loss) from investment operations: |
|||||||||||
Net investment income | 0.14 | 0.42 | |||||||||
Net realized and unrealized gain (loss) |
(0.27 | ) | (0.81 | ) | |||||||
Total from investment operations | (0.13 | ) | (0.39 | ) | |||||||
Less dividends and distributions from: |
|||||||||||
Net investment income | (0.16 | ) | (0.48 | ) | |||||||
Total dividends and distributions | (0.16 | ) | (0.48 | ) | |||||||
Net asset value, end of period | $ | 5.61 | $ | 16.83 |
Delaware Corporate Bond Fund Class R
7/31/22 | 7/31/21 | |||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||
Net asset value, beginning of period |
$ | 6.50 | $ | 19.50 | $ | 6.54 | $ | 19.62 | ||||||||||||
Income (loss) from investment operations: |
||||||||||||||||||||
Net investment income | 0.13 | 0.39 | 0.13 | 0.39 | ||||||||||||||||
Net realized and unrealized gain (loss) |
(1.03 | ) | (3.09 | ) | 0.02 | 0.06 | ||||||||||||||
Total from investment operations | (0.90 | ) | (2.70 | ) | 0.15 | 0.45 | ||||||||||||||
Less dividends and distributions from: |
||||||||||||||||||||
Net investment income | (0.16 | ) | (0.48 | ) | (0.15 | ) | (0.45 | ) | ||||||||||||
Net realized gain | (0.10 | ) | (0.30 | ) | (0.04 | ) | (0.12 | ) | ||||||||||||
Total dividends and distributions | (0.26 | ) | (0.78 | ) | (0.19 | ) | (0.57 | ) | ||||||||||||
Net asset value, end of period | $ | 5.34 | $ | 16.02 | $ | 6.50 | $ | 19.50 |
97
Notes to financial statements
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
7/31/20 | 7/31/19 | |||||||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 5.98 | $ | 17.94 | $ | 5.62 | $ | 16.86 | ||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.15 | 0.45 | 0.19 | 0.57 | ||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | 0.58 | 1.74 | 0.38 | 1.14 | ||||||||||||||||||||
Total from investment operations | 0.73 | 2.19 | 0.57 | 1.71 | ||||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.17 | ) | (0.51 | ) | (0.21 | ) | (0.63 | ) | ||||||||||||||||
Total dividends and distributions | (0.17 | ) | (0.51 | ) | (0.21 | ) | (0.63 | ) | ||||||||||||||||
Net asset value, end of period | $ | 6.54 | $ | 19.62 | $ | 5.98 | $ | 17.94 | ||||||||||||||||
7/31/18 | ||||||||||||||||||||||||
Previously Reported | As Revised | |||||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 5.90 | $ | 17.70 | ||||||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.17 | 0.51 | ||||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | (0.26 | ) | (0.78 | ) | ||||||||||||||||||||
Total from investment operations | (0.09 | ) | (0.27 | ) | ||||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.19 | ) | (0.57 | ) | ||||||||||||||||||||
Total dividends and distributions | (0.19 | ) | (0.57 | ) | ||||||||||||||||||||
Net asset value, end of period | $ | 5.62 | $ | 16.86 |
98
Delaware Corporate Bond Fund Institutional Class
7/31/22 | 7/31/21 | |||||||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 6.49 | $ | 19.47 | $ | 6.54 | $ | 19.62 | ||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.16 | 0.48 | 0.16 | 0.48 | ||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | (1.02 | ) | (3.07 | ) | 0.02 | 0.06 | ||||||||||||||||||
Total from investment operations | (0.86 | ) | (2.59 | ) | 0.18 | 0.54 | ||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.19 | ) | (0.57 | ) | (0.19 | ) | (0.57 | ) | ||||||||||||||||
Net realized gain | (0.10 | ) | (0.30 | ) | (0.04 | ) | (0.12 | ) | ||||||||||||||||
Total dividends and distributions | (0.29 | ) | (0.87 | ) | (0.23 | ) | (0.69 | ) | ||||||||||||||||
Net asset value, end of period | $ | 5.34 | $ | 16.01 | $ | 6.49 | $ | 19.47 | ||||||||||||||||
7/31/20 | 7/31/19 | |||||||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 5.97 | $ | 17.91 | $ | 5.61 | $ | 16.83 | ||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.18 | 0.54 | 0.22 | 0.66 | ||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | 0.59 | 1.77 | 0.37 | 1.11 | ||||||||||||||||||||
Total from investment operations | 0.77 | 2.31 | 0.59 | 1.77 | ||||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.20 | ) | (0.60 | ) | (0.23 | ) | (0.69 | ) | ||||||||||||||||
Total dividends and distributions | (0.20 | ) | (0.60 | ) | (0.23 | ) | (0.69 | ) | ||||||||||||||||
Net asset value, end of period | $ | 6.54 | $ | 19.62 | $ | 5.97 | $ | 17.91 |
99
Notes to financial statements
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
7/31/18 | ||||||||||||||||||||||||
Previously Reported | As Revised | |||||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 5.90 | $ | 17.70 | ||||||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.20 | 0.60 | ||||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | (0.27 | ) | (0.81 | ) | ||||||||||||||||||||
Total from investment operations | (0.07 | ) | (0.21 | ) | ||||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.22 | ) | (0.66 | ) | ||||||||||||||||||||
Total dividends and distributions | (0.22 | ) | (0.66 | ) | ||||||||||||||||||||
Net asset value, end of period | $ | 5.61 | $ | 16.83 | ||||||||||||||||||||
Delaware Corporate Bond Fund Class R6 | ||||||||||||||||||||||||
7/31/22 | 7/31/21 | |||||||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 6.49 | $ | 19.47 | $ | 6.53 | $ | 19.59 | ||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.17 | 0.51 | 0.17 | 0.51 | ||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | (1.04 | ) | (3.11 | ) | 0.02 | 0.06 | ||||||||||||||||||
Total from investment operations | (0.87 | ) | (2.60 | ) | 0.19 | 0.57 | ||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.19 | ) | (0.57 | ) | (0.19 | ) | (0.57 | ) | ||||||||||||||||
Net realized gain | (0.10 | ) | (0.30 | ) | (0.04 | ) | (0.12 | ) | ||||||||||||||||
Total dividends and distributions | (0.29 | ) | (0.87 | ) | (0.23 | ) | (0.69 | ) | ||||||||||||||||
Net asset value, end of period | $ | 5.33 | $ | 16.00 | $ | 6.49 | $ | 19.47 |
100
7/31/20 | 1/31/19 to 7/31/19 | |||||||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 5.97 | $ | 17.91 | $ | 5.59 | $ | 16.77 | ||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.19 | 0.57 | 0.11 | 0.33 | ||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | 0.58 | 1.74 | 0.39 | 1.17 | ||||||||||||||||||||
Total from investment operations | 0.77 | 2.31 | 0.50 | 1.50 | ||||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.21 | ) | (0.63 | ) | (0.12 | ) | (0.36 | ) | ||||||||||||||||
Total dividends and distributions | (0.21 | ) | (0.63 | ) | (0.12 | ) | (0.36 | ) | ||||||||||||||||
Net asset value, end of period | $ | 6.53 | $ | 19.59 | $ | 5.97 | $ | 17.91 |
Delaware Extended Duration Bond Fund Class A
7/31/22 | 7/31/21 | |||||||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 7.12 | $ | 21.36 | $ | 7.73 | $ | 23.19 | ||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.19 | 0.57 | 0.20 | 0.60 | ||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | (1.54 | ) | (4.62 | ) | (0.12 | ) | (0.36 | ) | ||||||||||||||||
Total from investment operations | (1.35 | ) | (4.05 | ) | 0.08 | 0.24 | ||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.20 | ) | (0.60 | ) | (0.21 | ) | (0.63 | ) | ||||||||||||||||
Net realized gain | (0.30 | ) | (0.90 | ) | (0.48 | ) | (1.44 | ) | ||||||||||||||||
Total dividends and distributions | (0.50 | ) | (1.50 | ) | (0.69 | ) | (2.07 | ) | ||||||||||||||||
Net asset value, end of period | $ | 5.27 | $ | 15.81 | $ | 7.12 | $ | 21.36 |
101
Notes to financial statements
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
7/31/20 | 7/31/19 | |||||||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 6.84 | $ | 20.52 | $ | 6.28 | $ | 18.84 | ||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.22 | 0.66 | 0.24 | 0.72 | ||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | 1.05 | 3.15 | 0.56 | 1.68 | ||||||||||||||||||||
Total from investment operations | 1.27 | 3.81 | 0.80 | 2.40 | ||||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.23 | ) | (0.69 | ) | (0.24 | ) | (0.72 | ) | ||||||||||||||||
Net realized gain | (0.15 | ) | (0.45 | ) | – | – | ||||||||||||||||||
Total dividends and distributions | (0.38 | ) | (1.14 | ) | (0.24 | ) | (0.72 | ) | ||||||||||||||||
Net asset value, end of period | $ | 7.73 | $ | 23.19 | $ | 6.84 | $ | 20.52 | ||||||||||||||||
7/31/18 | ||||||||||||||||||||||||
Previously Reported | As Revised | |||||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 6.62 | $ | 19.86 | ||||||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.23 | 0.69 | ||||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | (0.34 | ) | (1.02 | ) | ||||||||||||||||||||
Total from investment operations | (0.11 | ) | (0.33 | ) | ||||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.23 | ) | (0.69 | ) | ||||||||||||||||||||
Total dividends and distributions | (0.23 | ) | (0.69 | ) | ||||||||||||||||||||
Net asset value, end of period | $ | 6.28 | $ | 18.84 |
102
Delaware Extended Duration Bond Fund Class C
7/31/22 | 7/31/21 | |||||||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 7.12 | $ | 21.36 | $ | 7.72 | $ | 23.16 | ||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.15 | 0.45 | 0.15 | 0.45 | ||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | (1.55 | ) | (4.66 | ) | (0.11 | ) | (0.33 | ) | ||||||||||||||||
Total from investment operations | (1.40 | ) | (4.21 | ) | 0.04 | 0.12 | ||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.15 | ) | (0.45 | ) | (0.16 | ) | (0.48 | ) | ||||||||||||||||
Net realized gain | (0.30 | ) | (0.90 | ) | (0.48 | ) | (1.44 | ) | ||||||||||||||||
Total dividends and distributions | (0.45 | ) | (1.35 | ) | (0.64 | ) | (1.92 | ) | ||||||||||||||||
Net asset value, end of period | $ | 5.27 | $ | 15.80 | $ | 7.12 | $ | 21.36 | ||||||||||||||||
7/31/20 | 7/31/19 | |||||||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 6.83 | $ | 20.49 | $ | 6.27 | $ | 18.81 | ||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.17 | 0.51 | 0.19 | 0.57 | ||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | 1.05 | 3.15 | 0.56 | 1.68 | ||||||||||||||||||||
Total from investment operations | 1.22 | 3.66 | 0.75 | 2.25 | ||||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.18 | ) | (0.54 | ) | (0.19 | ) | (0.57 | ) | ||||||||||||||||
Net realized gain | (0.15 | ) | (0.45 | ) | — | — | ||||||||||||||||||
Total dividends and distributions | (0.33 | ) | (0.99 | ) | (0.19 | ) | (0.57 | ) | ||||||||||||||||
Net asset value, end of period | $ | 7.72 | $ | 23.16 | $ | 6.83 | $ | 20.49 |
103
Notes to financial statements
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
7/31/18 | ||||||||||||||||||||||||
Previously Reported | As Revised | |||||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 6.61 | $ | 19.83 | ||||||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.18 | 0.54 | ||||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | (0.33 | ) | (0.99 | ) | ||||||||||||||||||||
Total from investment operations | (0.15 | ) | (0.45 | ) | ||||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.19 | ) | (0.57 | ) | ||||||||||||||||||||
Total dividends and distributions | (0.19 | ) | (0.57 | ) | ||||||||||||||||||||
Net asset value, end of period | $ | 6.27 | $ | 18.81 | ||||||||||||||||||||
Delaware Extended Duration Bond Fund Class R | ||||||||||||||||||||||||
7/31/22 | 7/31/21 | |||||||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 7.14 | $ | 21.42 | $ | 7.74 | $ | 23.22 | ||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.18 | 0.54 | 0.18 | 0.54 | ||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | (1.56 | ) | (4.68 | ) | (0.10 | ) | (0.30 | ) | ||||||||||||||||
Total from investment operations | (1.38 | ) | (4.14 | ) | 0.08 | 0.24 | ||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.18 | ) | (0.54 | ) | (0.20 | ) | (0.60 | ) | ||||||||||||||||
Net realized gain | (0.30 | ) | (0.90 | ) | (0.48 | ) | (1.44 | ) | ||||||||||||||||
Total dividends and distributions | (0.48 | ) | (1.44 | ) | (0.68 | ) | (2.04 | ) | ||||||||||||||||
Net asset value, end of period | $ | 5.28 | $ | 15.84 | $ | 7.14 | $ | 21.42 |
104
7/31/20 | 7/31/19 | |||||||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 6.85 | $ | 20.55 | $ | 6.29 | $ | 18.87 | ||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.21 | 0.63 | 0.22 | 0.66 | ||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | 1.04 | 3.12 | 0.57 | 1.71 | ||||||||||||||||||||
Total from investment operations | 1.25 | 3.75 | 0.79 | 2.37 | ||||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.21 | ) | (0.63 | ) | (0.23 | ) | (0.69 | ) | ||||||||||||||||
Net realized gain | (0.15 | ) | (0.45 | ) | — | — | ||||||||||||||||||
Total dividends and distributions | (0.36 | ) | (1.08 | ) | (0.23 | ) | (0.69 | ) | ||||||||||||||||
Net asset value, end of period | $ | 7.74 | $ | 23.22 | $ | 6.85 | $ | 20.55 | ||||||||||||||||
7/31/18 | ||||||||||||||||||||||||
Previously Reported | As Revised | |||||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 6.63 | $ | 19.89 | ||||||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.21 | 0.63 | ||||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | (0.33 | ) | (0.99 | ) | ||||||||||||||||||||
Total from investment operations | (0.12 | ) | (0.36 | ) | ||||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.22 | ) | (0.66 | ) | ||||||||||||||||||||
Total dividends and distributions | (0.22 | ) | (0.66 | ) | ||||||||||||||||||||
Net asset value, end of period | $ | 6.29 | $ | 18.87 |
105
Notes to financial statements
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
Delaware Extended Duration Bond Fund Institutional Class
7/31/22 | 7/31/21 | |||||||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 7.11 | $ | 21.33 | $ | 7.71 | $ | 23.13 | ||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.20 | 0.60 | 0.22 | 0.66 | ||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | (1.54 | ) | (4.62 | ) | (0.11 | ) | (0.33 | ) | ||||||||||||||||
Total from investment operations | (1.34 | ) | (4.02 | ) | 0.11 | 0.33 | ||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.21 | ) | (0.63 | ) | (0.23 | ) | (0.69 | ) | ||||||||||||||||
Net realized gain | (0.30 | ) | (0.90 | ) | (0.48 | ) | (1.44 | ) | ||||||||||||||||
Total dividends and distributions | (0.51 | ) | (1.53 | ) | (0.71 | ) | (2.13 | ) | ||||||||||||||||
Net asset value, end of period | $ | 5.26 | $ | 15.78 | $ | 7.11 | $ | 21.33 | ||||||||||||||||
7/31/20 | 7/31/19 | |||||||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 6.82 | $ | 20.46 | $ | 6.27 | $ | 18.81 | ||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.24 | 0.72 | 0.25 | 0.75 | ||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | 1.05 | 3.15 | 0.56 | 1.68 | ||||||||||||||||||||
Total from investment operations | 1.29 | 3.87 | 0.81 | 2.43 | ||||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.25 | ) | (0.75 | ) | (0.26 | ) | (0.78 | ) | ||||||||||||||||
Net realized gain | (0.15 | ) | (0.45 | ) | — | — | ||||||||||||||||||
Total dividends and distributions | (0.40 | ) | (1.20 | ) | (0.26 | ) | (0.78 | ) | ||||||||||||||||
Net asset value, end of period | $ | 7.71 | $ | 23.13 | $ | 6.82 | $ | 20.46 |
106
7/31/18 | ||||||||||||||||||||||||
Previously Reported | As Revised | |||||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 6.61 | $ | 19.83 | ||||||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.25 | 0.75 | ||||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | (0.34 | ) | (1.02 | ) | ||||||||||||||||||||
Total from investment operations | (0.09 | ) | (0.27 | ) | ||||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.25 | ) | (0.75 | ) | ||||||||||||||||||||
Total dividends and distributions | (0.25 | ) | (0.75 | ) | ||||||||||||||||||||
Net asset value, end of period | $ | 6.27 | $ | 18.81 | ||||||||||||||||||||
Delaware Extended Duration Bond Fund Class R6 | ||||||||||||||||||||||||
7/31/22 | 7/31/21 | |||||||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 7.11 | $ | 21.33 | $ | 7.72 | $ | 23.16 | ||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.23 | 0.69 | 0.23 | 0.69 | ||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | (1.56 | ) | (4.67 | ) | (0.12 | ) | (0.36 | ) | ||||||||||||||||
Total from investment operations | (1.33 | ) | (3.98 | ) | 0.11 | 0.33 | ||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.22 | ) | (0.66 | ) | (0.24 | ) | (0.72 | ) | ||||||||||||||||
Net realized gain | (0.30 | ) | (0.90 | ) | (0.48 | ) | (1.44 | ) | ||||||||||||||||
Total dividends and distributions | (0.52 | ) | (1.56 | ) | (0.72 | ) | (2.16 | ) | ||||||||||||||||
Net asset value, end of period | $ | 5.26 | $ | 15.79 | $ | 7.11 | $ | 21.33 |
107
Notes to financial statements
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
7/31/20 | 7/31/19 | |||||||||||||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | |||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 6.83 | $ | 20.49 | $ | 6.27 | $ | 18.81 | ||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.25 | 0.75 | 0.26 | 0.78 | ||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | 1.04 | 3.12 | 0.56 | 1.68 | ||||||||||||||||||||
Total from investment operations | 1.29 | 3.87 | 0.82 | 2.46 | ||||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.25 | ) | (0.75 | ) | (0.26 | ) | (0.78 | ) | ||||||||||||||||
Net realized gain | (0.15 | ) | (0.45 | ) | — | — | ||||||||||||||||||
Total dividends and distributions | (0.40 | ) | (1.20 | ) | (0.26 | ) | (0.78 | ) | ||||||||||||||||
Net asset value, end of period | $ | 7.72 | $ | 23.16 | $ | 6.83 | $ | 20.49 | ||||||||||||||||
7/31/18 | ||||||||||||||||||||||||
Previously Reported | As Revised | |||||||||||||||||||||||
Net asset value, beginning of | ||||||||||||||||||||||||
period | $ | 6.61 | $ | 19.83 | ||||||||||||||||||||
Income (loss) from investment | ||||||||||||||||||||||||
operations: | ||||||||||||||||||||||||
Net investment income | 0.25 | 0.75 | ||||||||||||||||||||||
Net realized and unrealized gain | ||||||||||||||||||||||||
(loss) | (0.33 | ) | (0.99 | ) | ||||||||||||||||||||
Total from investment operations | (0.08 | ) | (0.24 | ) | ||||||||||||||||||||
Less dividends and distributions | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income | (0.26 | ) | (0.78 | ) | ||||||||||||||||||||
Total dividends and distributions | (0.26 | ) | (0.78 | ) | ||||||||||||||||||||
Net asset value, end of period | $ | 6.27 | $ | 18.81 |
108
6. Capital Shares
Delaware Corporate Bond Fund | Delaware Extended Duration Bond Fund | ||||||||||||
7/31/22 | 7/31/22 | ||||||||||||
Previously Reported | As Revised | Previously Reported | As Revised | ||||||||||
Shares sold: | |||||||||||||
Class A | 5,443,132 | 5,443,132 | 1,337,245 | 1,337,245 | |||||||||
Class C | 433,994 | 433,994 | 67,345 | 67,345 | |||||||||
Class R | 299,973 | 299,973 | 172,780 | 172,780 | |||||||||
Institutional Class | 95,679,484 | 95,679,484 | 18,352,336 | 18,352,336 | |||||||||
Class R6 | 820,125 | 820,125 | 965,481 | 965,481 | |||||||||
Shares issued upon reinvestment of dividends and distributions: | |||||||||||||
Class A | 2,511,328 | 2,511,328 | 1,053,227 | 1,053,227 | |||||||||
Class C | 127,460 | 127,460 | 81,859 | 81,859 | |||||||||
Class R | 82,052 | 82,052 | 86,807 | 86,807 | |||||||||
Institutional Class | 4,971,110 | 4,971,110 | 4,674,917 | 4,674,917 | |||||||||
Class R6 | 72,244 | 72,244 | 204,748 | 204,748 | |||||||||
110,440,902 | 110,440,902 | 26,996,745 | 26,996,745 | ||||||||||
Shares from reverse split | |||||||||||||
Class A | — | (35,731,587 | ) | — | (8,412,476 | ) | |||||||
Class C | — | (1,998,191 | ) | — | (673,298 | ) | |||||||
Class R | — | (1,175,918 | ) | — | (693,064 | ) | |||||||
Institutional Class | — | (119,672,963 | ) | — | (42,132,746 | ) | |||||||
Class R6 | — | (1,526,117 | ) | — | (1,477,058 | ) | |||||||
Shares redeemed: | |||||||||||||
Class A | (17,912,950 | ) | (17,912,950 | ) | (3,742,384 | ) | (3,742,384 | ) | |||||
Class C | (1,934,051 | ) | (1,934,051 | ) | (427,734 | ) | (427,734 | ) | |||||
Class R | (582,527 | ) | (582,527 | ) | (429,594 | ) | (429,594 | ) | |||||
Institutional Class | (80,802,301 | ) | (80,802,301 | ) | (16,774,383 | ) | (16,774,383 | ) | |||||
Class R6 | (262,597 | ) | (262,597 | ) | (7,378,161 | ) | (7,378,161 | ) | |||||
(101,494,426 | ) | (261,599,202 | ) | (28,752,256 | ) | (82,140,898 | ) | ||||||
Net increase (decrease) | 8,946,476 | (151,158,300 | ) | (1,755,511 | ) | (55,144,153 | ) |
15. Subsequent Events
Management has determined that no material events or transactions occurred subsequent to July 31, 2022, that would require recognition or disclosure in the Funds’ financial statements.
109
Report of independent
registered public accounting firm
To the Board of Trustees of Delaware Group® Income Funds and Shareholders of Delaware Corporate Bond Fund and Delaware Extended Duration Bond Fund
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Delaware Corporate Bond Fund and Delaware Extended Duration Bond Fund (two of the funds constituting Delaware Group® Income Funds, hereafter collectively referred to as the “Funds”) as of July 31, 2022, the related statements of operations for the year ended July 31, 2022, the statements of changes in net assets for each of the two years in the period ended July 31, 2022, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of July 31, 2022, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period ended July 31, 2022 and each of the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinions
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of July 31, 2022 by correspondence with the custodian, transfer agents, agent banks and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.
/s/PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
September 16, 2022, except for the effects of the revision discussed in Note 14 to the financial statements, as to which the date is November 23, 2022.
We have served as the auditor of one or more investment companies in Delaware Funds by Macquarie® since 2010.
110
Other Fund information (Unaudited)
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
Liquidity Risk Management Program
The Securities and Exchange Commission (the “SEC”) has adopted Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”), which requires all open-end funds (other than money market funds) to adopt and implement a program reasonably designed to assess and manage the fund’s “liquidity risk,” defined as the risk that the fund could not meet requests to redeem shares issued by the fund without significant dilution of remaining investors’ interests in the fund.
The Funds have adopted and implemented a liquidity risk management program in accordance with the Liquidity Rule (the “Program”). The Board has designated a member of the US Operational Risk Group of Macquarie Asset Management as the Program Administrator for each Fund in the Trust.
As required by the Liquidity Rule, the Program includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each of the Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting each Fund’s acquisition of Illiquid investments if, immediately after the acquisition, each Fund would hold more than 15% of its net assets in Illiquid assets. The Program also requires reporting to the SEC (on a non-public basis) and to the Board if each Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
In assessing and managing each Fund’s liquidity risk, the Program Administrator considers, as relevant, a variety of factors, including: (1) each Fund’s investment strategy and liquidity of portfolio investments during both normal and reasonably foreseeable stressed conditions; (2) short-term and long-term cash flow projections for the Funds during both normal and reasonably foreseeable stressed conditions; and (3) each Fund’s holdings of cash and cash equivalents and any borrowing arrangements. Classification of each Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or to sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value. Each Fund primarily holds assets that are classified as Highly Liquid, and therefore is not required to establish an HLIM.
At a meeting of the Board held on May 17-19, 2022, the Program Administrator provided the required written annual report to the Board addressing the Program’s operation and assessing the adequacy and effectiveness of its implementation for the period from April 1, 2021 through March 31, 2022. The report concluded that the Program is appropriately designed and effectively implemented and that it meets the requirements of Rule 22e-4 and each Fund’s liquidity needs. Each Fund’s HLIM is set at an appropriate level and the Funds complied with their HLIM at all times during the reporting period.
111
Other Fund information (Unaudited)
Delaware Corporate Bond Fund and
Delaware Extended Duration Bond Fund
Tax Information
The information set forth below is for the Fund’s fiscal year as required by federal income tax laws. Shareholders, however, must report distributions on a calendar year basis for income tax purposes, which may include distributions for portions of two fiscal years of the Fund.
Accordingly, the information needed by shareholders for income tax purposes will be sent to them in January of each year. Please consult your tax advisor for proper treatment of this information. All disclosures are based on financial information available as of the date of this annual report and, accordingly are subject to change. For any and all items requiring reporting, it is the intention of the Fund to report the maximum amount permitted under the Internal Revenue Code and the regulations thereunder.
For the fiscal year ended July 31, 2022, the Fund reports distributions paid during the year as follows:
(A) | ||||||
Long-Term | (B) | |||||
Capital Gains | Ordinary Income | Total | ||||
Distributions | Distributions | Distributions | ||||
(Tax Basis) | (Tax Basis) | (Tax Basis) | ||||
Delaware | ||||||
Corporate Bond | ||||||
Fund | 15.68% | 84.32% | 100.00% | |||
Delaware | ||||||
Extended | ||||||
Duration Bond | ||||||
Fund | 54.90% | 45.10% | 100.00% |
(A) and (B) are based on a percentage of each Fund's total distributions.
For the fiscal year ended July 31, 2022, certain interest income paid by each Fund determined to be Qualified Interest Income and Short-Term Capital Gains may be subject to relief from US withholding for foreign shareholders, as provided by the American Jobs Creation Act of 2004, and by the Tax Relief Unemployment Insurance Reauthorization and Job Creations Act of 2010, and as extended by the American Taxpayer Relief Act of 2012. Delaware Extended Duration Bond Fund did not have any foreign shareholders for the fiscal year ended July 31, 2022. For the fiscal year ended July 31, 2022, Delaware Corporate Bond Fund reported maximum distributions of Qualified Interest Income and Short-Term Capital Gains as follows:
Qualified Interest Income | Qualified Short-Term Capital Gains | |||
Delaware Corporate Bond | ||||
Fund | $29,713,999 | $5,043,417 |
112
The percentage of the ordinary dividends reported by the funds that is treated as a Section 163(j) interest dividend and thus is eligible to be treated as interest income for purposes of Section 163(j) and the regulations thereunder is as follows:
Delaware Corporate Bond Fund | Delaware Extended Duration Bond Fund | |
76.66% | 92.41% |
113
Board of trustees / directors and officers addendum
Delaware Funds by Macquarie®
A mutual fund is governed by a Board of Trustees/Directors (“Trustees”), which has oversight responsibility for the management of a fund’s business affairs. Trustees establish procedures and oversee and review the performance of the investment manager, the distributor, and others who perform services for the fund. The independent fund trustees, in particular, are advocates for shareholder interests. Each trustee has served in that capacity since he or she was elected to or appointed to the Board of Trustees, and will continue to serve until his or her retirement or the election of a new trustee in his or her place. The following is a list of the Trustees and Officers with certain background and related information.
Other | ||||||||||
Number of | Principal | Directorships | ||||||||
Name, | Position(s) | Funds in Fund | Occupation(s) | Held by Trustee | ||||||
Address, | Held with | Length of Time | Complex Overseen | During the | During the | |||||
and Birth Date | the Trust | Served | by Trustee | Past Five Years | Past Five Years | |||||
Interested Trustee | ||||||||||
Shawn K. Lytle1 | President, | President and | 128 | Macquarie Asset | None | |||||
100 Independence | Chief Executive | Chief Executive | Management2 | |||||||
610 Market Street | Officer, | Officer | (2015–Present) | |||||||
Philadelphia, PA | and Trustee | since August 2015 | -Global Head of | |||||||
19106-2354 | Macquarie Asset | |||||||||
February 1970 | Trustee since | Management | ||||||||
September 2015 | (2019–Present) | |||||||||
-Head of Americas of | ||||||||||
Macquarie Group | ||||||||||
(2017–Present) | ||||||||||
-Deputy Global Head of | ||||||||||
Macquarie Asset | ||||||||||
Management | ||||||||||
(2017–2019) | ||||||||||
-Head of Macquarie | ||||||||||
Asset Management | ||||||||||
Americas (2015–2017) |
114
Other | ||||||||||
Number of | Principal | Directorships | ||||||||
Name, | Position(s) | Funds in Fund | Occupation(s) | Held by Trustee | ||||||
Address, | Held with | Length of Time | Complex Overseen | During the | During the | |||||
and Birth Date | the Trust | Served | by Trustee | Past Five Years | Past Five Years | |||||
Independent Trustees | ||||||||||
Jerome D. | Trustee | Since January 2019 | 128 | Stonebrook Capital | None | |||||
Abernathy | Management, LLC | |||||||||
100 Independence | (financial | |||||||||
610 Market Street | technology: macro | |||||||||
Philadelphia, PA | factors and databases) | |||||||||
19106-2354 | -Managing Member | |||||||||
July 1959 | (1993-Present) | |||||||||
Thomas L. Bennett | Chair and Trustee | Trustee since March | 128 | Private Investor | None | |||||
100 Independence | 2005 | (2004–Present) | ||||||||
610 Market Street | ||||||||||
Philadelphia, PA | Chair since March | |||||||||
19106-2354 | 2015 | |||||||||
October 1947 | ||||||||||
Ann D. Borowiec | Trustee | Since March 2015 | 128 | J.P. Morgan Chase & Co. | Banco Santander International | |||||
100 Independence | (1987-2013) | (2016–2019) | ||||||||
610 Market Street | -Chief Executive Officer, | Santander Bank, N.A. | ||||||||
Philadelphia, PA | Private Wealth | (2016-2019) | ||||||||
19106-2354 | Management | |||||||||
November 1958 | (2011–2013) |
115
Board of trustees / directors and officers addendum
Delaware Funds by Macquarie®
Other | ||||||||||
Number of | Principal | Directorships | ||||||||
Name, | Position(s) | Funds in Fund | Occupation(s) | Held by Trustee | ||||||
Address, | Held with | Length of Time | Complex Overseen | During the | During the | |||||
and Birth Date | the Trust | Served | by Trustee | Past Five Years | Past Five Years | |||||
Joseph W. Chow | Trustee | Since January 2013 | 128 | Private Investor | None | |||||
100 Independence | (2011–Present) | |||||||||
610 Market Street | ||||||||||
Philadelphia, PA | ||||||||||
19106-2354 | ||||||||||
January 1953 | ||||||||||
H. Jeffrey Dobbs3 | Trustee | Since December 2021 | 128 | KPMG LLP | TechAccel LLC | |||||
100 Independence | (2010-2015) | (2015–Present) | ||||||||
610 Market Street | -Global Sector Chairman, | PatientsVoices, Inc. | ||||||||
Philadelphia, PA | Industrial Manufacturing | (2018–Present) | ||||||||
19106-2354 | (2010-2015) | Valparaiso University Board | ||||||||
May 1955 | (2012-Present) | |||||||||
Ivy Funds Complex (2019-2021) |
116
Other | ||||||||||
Number of | Principal | Directorships | ||||||||
Name, | Position(s) | Funds in Fund | Occupation(s) | Held by Trustee | ||||||
Address, | Held with | Length of Time | Complex Overseen | During the | During the | |||||
and Birth Date | the Trust | Served | by Trustee | Past Five Years | Past Five Years | |||||
John A. Fry | Trustee | Since January 2001 | 128 | Drexel University | Federal Reserve | |||||
100 Independence | -President | Bank of Philadelphia | ||||||||
610 Market Street | (August 2010–Present) | (2020–Present) | ||||||||
Philadelphia, PA | FS Credit Real Estate Income | |||||||||
19106-2354 | Trust, Inc. (2018–Present) | |||||||||
May 1960 | vTv Therapeutics Inc. | |||||||||
(2017–Present) | ||||||||||
Community Health Systems | ||||||||||
(2004–Present) | ||||||||||
Drexel Morgan & Co. | ||||||||||
(2015–2019) |
117
Board of trustees / directors and officers addendum
Delaware Funds by Macquarie®
Other | ||||||||||
Number of | Principal | Directorships | ||||||||
Name, | Position(s) | Funds in Fund | Occupation(s) | Held by Trustee | ||||||
Address, | Held with | Length of Time | Complex Overseen | During the | During the | |||||
and Birth Date | the Trust | Served | by Trustee | Past Five Years | Past Five Years | |||||
Joseph Harroz, Jr.3 | Trustee | Since December 2021 | 128 | University of Oklahoma | OU Medicine, Inc. | |||||
100 Independence | -President | (2020–Present) | ||||||||
610 Market Street | (2020–Present) | Big 12 Athletic Conference | ||||||||
Philadelphia, PA | -Interim President | (2019-Present) | ||||||||
19106-2354 | (2019–2020) | Valliance Bank | ||||||||
January 1967 | -Vice President and | (2007–Present) | ||||||||
Dean, College of Law | Ivy Funds | |||||||||
(2010–2019) | (1998-2021) | |||||||||
Brookhaven Investments | ||||||||||
LLC (commercial | ||||||||||
enterprises) | ||||||||||
-Managing Member | ||||||||||
(2019–Present) | ||||||||||
St. Clair, LLC | ||||||||||
(commercial enterprises) | ||||||||||
-Managing Member | ||||||||||
(2019–Present) |
118
Other | ||||||||||
Number of | Principal | Directorships | ||||||||
Name, | Position(s) | Funds in Fund | Occupation(s) | Held by Trustee | ||||||
Address, | Held with | Length of Time | Complex Overseen | During the | During the | |||||
and Birth Date | the Trust | Served | by Trustee | Past Five Years | Past Five Years | |||||
Sandra A.J. | Trustee | Since December 2021 | 128 | Children’s Mercy | Brixmor Property Group Inc. | |||||
Lawrence3 | Hospitals and Clinics | (2021-Present) | ||||||||
100 Independence | (2005–2019) | Sera Prognostics Inc. | ||||||||
610 Market Street | -Chief Administrative | (biotechnology) (2021-Present) | ||||||||
Philadelphia, PA | Officer | Recology (resource recovery) | ||||||||
19106-2354 | (2016–2019) | (2021-Present) | ||||||||
September 1957 | Evergy, Inc., Kansas City Power | |||||||||
& Light Company, KCP&L | ||||||||||
Greater Missouri Operations | ||||||||||
Company, Westar Energy, Inc. | ||||||||||
and Kansas Gas and Electric | ||||||||||
Company (related utility | ||||||||||
companies) (2018-Present) | ||||||||||
National Association of Corporate | ||||||||||
Directors (2017-Present) | ||||||||||
Ivy Funds Complex (2019-2021) | ||||||||||
American Shared Hospital | ||||||||||
Services (medical device) | ||||||||||
(2017-2021) | ||||||||||
Ivy NextShares (2019) | ||||||||||
Westar Energy (utility) | ||||||||||
(2004-2018) |
119
Board of trustees / directors and officers addendum
Delaware Funds by Macquarie®
Other | ||||||||||
Number of | Principal | Directorships | ||||||||
Name, | Position(s) | Funds in Fund | Occupation(s) | Held by Trustee | ||||||
Address, | Held with | Length of Time | Complex Overseen | During the | During the | |||||
and Birth Date | the Trust | Served | by Trustee | Past Five Years | Past Five Years | |||||
Frances A. | Trustee | Since September | 128 | Banco Itaú International | Florida Chapter of National | |||||
Sevilla-Sacasa | 2011 | -Chief Executive Officer | Association of Corporate | |||||||
100 Independence | (2012–2016) | Directors (2021-Present) | ||||||||
610 Market Street | Callon Petroleum Company | |||||||||
Philadelphia, PA | (2019-Present) | |||||||||
19106-2354 | Camden Property Trust | |||||||||
January 1956 | (2011-Present) | |||||||||
New Senior Investment | ||||||||||
Group Inc. (2021) | ||||||||||
Carrizo Oil & Gas, Inc. | ||||||||||
(2018-2019) | ||||||||||
Thomas K. Whitford | Trustee | Since January 2013 | 128 | PNC Financial Services | HSBC USA Inc. | |||||
100 Independence | Group (1983–2013) | (2014–Present) | ||||||||
610 Market Street | -Vice Chairman | HSBC North America | ||||||||
Philadelphia, PA | (2009-2013) | Holdings Inc. | ||||||||
19106-2354 | (2013–Present) | |||||||||
March 1956 | HSBC Finance Corporation | |||||||||
(2013–2018) |
120
Other | ||||||||||
Number of | Principal | Directorships | ||||||||
Name, | Position(s) | Funds in Fund | Occupation(s) | Held by Trustee | ||||||
Address, | Held with | Length of Time | Complex Overseen | During the | During the | |||||
and Birth Date | the Trust | Served | by Trustee | Past Five Years | Past Five Years | |||||
Christianna Wood | Trustee | Since January 2019 | 128 | Gore Creek | The Merger Fund | |||||
100 Independence | Capital, Ltd. | (2013–2021), | ||||||||
610 Market Street | -Chief Executive Officer | The Merger Fund VL | ||||||||
Philadelphia, PA | and President | (2013–2021), | ||||||||
19106-2354 | (2009–Present) | WCM Alternatives: Event-Driven | ||||||||
August 1959 | Fund (2013–2021), | |||||||||
and WCM Alternatives: Credit | ||||||||||
Event Fund (2017–2021) | ||||||||||
Grange Insurance | ||||||||||
(2013–Present) | ||||||||||
H&R Block Corporation | ||||||||||
(2008–Present) |
121
Board of trustees / directors and officers addendum
Delaware Funds by Macquarie®
Other | ||||||||||
Number of | Principal | Directorships | ||||||||
Name, | Position(s) | Funds in Fund | Occupation(s) | Held by Trustee | ||||||
Address, | Held with | Length of Time | Complex Overseen | During the | During the | |||||
and Birth Date | the Trust | Served | by Trustee | Past Five Years | Past Five Years | |||||
Janet L. Yeomans | Trustee | Since April 1999 | 128 | 3M Company | Okabena Company (2009–2017) | |||||
100 Independence | (1995-2012) | |||||||||
610 Market Street | -Vice President and | |||||||||
Philadelphia, PA | Treasurer (2006–2012) | |||||||||
19106-2354 | ||||||||||
July 1948 | ||||||||||
Officers | ||||||||||
David F. Connor | Senior Vice President, | Senior Vice President, | 128 | David F. Connor has | None4 | |||||
100 Independence | General Counsel, and | since May 2013; | served in various | |||||||
610 Market Street | Secretary | General Counsel | capacities at different | |||||||
Philadelphia, PA | since May 2015; | times at Macquarie Asset | ||||||||
19106-2354 | Secretary since | Management. | ||||||||
December 1963 | October 2005 | |||||||||
Daniel V. Geatens | Senior Vice President | Senior Vice President | 128 | Daniel V. Geatens has | None4 | |||||
100 Independence | and Treasurer | and Treasurer since | served in various | |||||||
610 Market Street | October 2007 | capacities at different | ||||||||
Philadelphia, PA | times at Macquarie Asset | |||||||||
19106-2354 | Management. | |||||||||
October 1972 |
122
Other | ||||||||||
Number of | Principal | Directorships | ||||||||
Name, | Position(s) | Funds in Fund | Occupation(s) | Held by Trustee | ||||||
Address, | Held with | Length of Time | Complex Overseen | During the | During the | |||||
and Birth Date | the Trust | Served | by Trustee | Past Five Years | Past Five Years | |||||
Richard Salus | Senior Vice President | Senior Vice President | 128 | Richard Salus has | None | |||||
100 Independence | and Chief Financial | and Chief Financial | served in various | |||||||
610 Market Street | Officer | Officer since | capacities at different | |||||||
Philadelphia, PA | November 2006 | times at Macquarie Asset | ||||||||
19106-2354 | Management. | |||||||||
October 1963 |
1 | Shawn K. Lytle is considered to be an “Interested Trustee” because he is an executive officer of the Fund’s(s’) investment advisor. |
2 | Macquarie Asset Management is the marketing name for Macquarie Management Holdings, Inc. and its subsidiaries, including the Fund’s(s’) investment advisor, principal underwriter, and its transfer agent. |
3 | Messrs. Dobbs and Harroz and Ms. Lawrence were elected as Trustees of the Trust effective December 17, 2021. |
4 | David F. Connor and Daniel V. Geatens 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. Mr. Geatens also serves as the Chief Financial Officer of the Optimum Fund Trust and he is the Chief Financial Officer and Treasurer for Macquarie Global Infrastructure Total Return Fund Inc. |
The Statement of Additional Information for the Fund(s) includes additional information about the Trustees and Officers and is available, without charge, upon request by calling 800 523-1918.
123
Board of trustees | ||||||
Shawn K. Lytle Jerome D. Abernathy
Thomas L. Bennett |
Ann D. Borowiec Joseph W. Chow H. Jeffrey Dobbs |
John A. Fry Joseph Harroz, Jr. Sandra A.J. Lawrence |
Frances A. Thomas K. Whitford Christianna Wood Janet L. Yeomans | |||
Affiliated officers | ||||||
David F. Connor Senior Vice President, General Counsel, and Secretary Delaware Funds by Macquarie |
Daniel V. Geatens Senior Vice President and Treasurer Delaware Funds by Macquarie |
Richard Salus Senior Vice President and Chief Financial Officer Delaware Funds by Macquarie |
||||
This annual report is for the information of Delaware Corporate Bond Fund and Delaware Extended Duration Bond Fund shareholders, but it may be used with prospective investors when preceded or accompanied by the Delaware Fund fact sheet for the most recently completed calendar quarter. These documents are available at delawarefunds.com/literature. |
Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT. Each Fund’s Forms N-PORT , as well as a description of the policies and procedures that the Funds use to determine how to vote proxies (if any) relating to portfolio securities, are available without charge (i) upon request, by calling 800 523-1918; and (ii) on the SEC’s website at sec.gov. In addition, a description of the policies and procedures that the Funds use to determine how to vote proxies (if any) relating to portfolio securities and the Schedule of Investments included in the Funds’ most recent Form N-PORT are available without charge on the Funds’ website at delawarefunds.com/literature. Each Fund's Forms N-PORT may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C.; information on the operation of the Public Reference Room may be obtained by calling 800 SEC-0330.
Information (if any) regarding how the Funds 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 delawarefunds.com/proxy; and (ii) on the SEC’s website at sec.gov.
124
Item 2. Code of Ethics
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. A copy of the registrant’s Code of Business Ethics has been posted on the Delaware Funds by Macquarie® Internet Web site at www.delawarefunds.com. Any amendments to the Code of Business Ethics, and information on any waiver from its provisions granted by the registrant, will also be posted on this Web site within five business days of such amendment or waiver and will remain on the Web site for at least 12 months.
Item 3. Audit Committee Financial Expert
The registrant’s Board of Trustees has determined that certain members of the registrant’s Audit Committee are audit committee financial experts, as defined below. For purposes of this item, an “audit committee financial expert” is a person who has the following attributes:
a. An understanding of generally accepted accounting principles and financial statements;
b. The ability to assess the general application of such principles in connection with the accounting for estimates, accruals, and reserves;
c. Experience preparing, auditing, analyzing, or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements, or experience actively supervising one or more persons engaged in such activities;
d. An understanding of internal controls and procedures for financial reporting; and
e. An understanding of audit committee functions.
An “audit committee financial expert” shall have acquired such attributes through:
a. Education and experience as a principal financial officer, principal accounting officer, controller, public accountant, or auditor or experience in one or more positions that involve the performance of similar functions;
b. Experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor, or person performing similar functions;
c. Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing, or evaluation of financial statements; or
d. Other relevant experience.
The registrant’s Board of Trustees has also determined that each member of the registrant’s Audit Committee is independent. In order to be “independent” for purposes of this item, the Audit Committee member may not: (i) other than in his or her capacity as a member of the Board of Trustees or any committee thereof, accept directly or indirectly any consulting, advisory or other compensatory fee from the issuer; or (ii) be an “interested person” of the registrant as defined in Section 2(a)(19) of the Investment Company Act of 1940.
The names of the audit committee financial experts on the registrant’s Audit Committee are set forth below:
H. Jeffrey Dobbs
John A. Fry
Sandra A.J. Lawrence
Frances Sevilla-Sacasa, Chair
Item 4. Principal Accountant Fees and Services
(a) Audit fees.
The aggregate fees billed for services provided to the registrant by its independent auditors for the audit of the registrant’s annual financial statements and for services normally provided by the independent auditors in connection with statutory and regulatory filings or engagements were $170,860 for the fiscal year ended July 31, 2022.
The aggregate fees billed for services provided to the registrant by its independent auditors for the audit of the registrant’s annual financial statements and for services normally provided by the independent auditors in connection with statutory and regulatory filings or engagements were $155,376 for the fiscal year ended July 31, 2021.
(b) Audit-related fees.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the registrant’s financial statements and not reported under paragraph (a) of this Item were $0 for the fiscal year ended July 31, 2022.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the financial statements of the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $2,050,189 for the registrant’s fiscal year ended July 31, 2022. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These audit-related services were as follows: year end audit procedures; group reporting and subsidiary statutory audits.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the registrant’s financial statements and not reported under paragraph (a) of this Item were $0 for the fiscal year ended July 31, 2021.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the financial statements of the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $958,376 for the registrant’s fiscal year ended July 31, 2021. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These audit-related services were as follows: year end audit procedures; group reporting and subsidiary statutory audits.
(c) Tax fees.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant were $25,040 for the fiscal year ended July 31, 2022. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These tax-related services were as follows: review of income tax returns and review of annual excise distribution calculations.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended July 31, 2022.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant were $26,000 for the fiscal year ended July 31, 2021. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These tax-related services were as follows: review of income tax returns and review of annual excise distribution calculations.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended July 31, 2021.
(d) All other fees.
The aggregate fees billed for all services provided by the independent auditors to the registrant other than those set forth in paragraphs (a), (b) and (c) of this Item were $0 for the fiscal year ended July 31, 2022.
The aggregate fees billed for all services other than those set forth in paragraphs (b) and (c) of this Item provided by the registrant’s independent auditors to the registrant’s adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended July 31, 2022. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%.
The aggregate fees billed for all services provided by the independent auditors to the registrant other than those set forth in paragraphs (a), (b) and (c) of this Item were $0 for the fiscal year ended July 31, 2021.
The aggregate fees billed for all services other than those set forth in paragraphs (b) and (c) of this Item provided by the registrant’s independent auditors to the registrant’s adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended July 31, 2021. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%.
(e) The registrant’s Audit Committee has established pre-approval policies and procedures as permitted by Rule 2-01(c)(7)(i)(B) of Regulation S-X (the “Pre-Approval Policy”) with respect to services provided by the registrant’s independent auditors. Pursuant to the Pre-Approval Policy, the Audit Committee has pre-approved the services set forth in the table below with respect to the registrant up to the specified fee limits. Certain fee limits are based on aggregate fees to the registrant and other registrants within the Delaware Funds by Macquarie®.
Service | Range of Fees |
Audit Services | |
Statutory audits or financial audits for new Funds | up to $50,000 per Fund |
Services associated with SEC registration statements (e.g., Form N-1A, Form N-14, etc.), periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters for closed-end Fund offerings, consents), and assistance in responding to SEC comment letters | up to $10,000 per Fund |
Consultations by Fund management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies (Note: Under SEC rules, some consultations may be considered “audit-related services” rather than “audit services”) | up to $25,000 in the aggregate |
Audit-Related Services | |
Consultations by Fund management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies (Note: Under SEC rules, some consultations may be considered “audit services” rather than “audit-related services”) | up to $25,000 in the aggregate |
Tax Services | |
U.S. federal, state and local and international tax planning and advice (e.g., consulting on statutory, regulatory or administrative developments, evaluation of Funds’ tax compliance function, etc.) | up to $25,000 in the aggregate |
U.S. federal, state and local tax compliance (e.g., excise distribution reviews, etc.) | up to $5,000 per Fund |
Review of federal, state, local and international income, franchise and other tax returns | up to $5,000 per Fund |
Under the Pre-Approval Policy, the Audit Committee has also pre-approved the services set forth in the table below with respect to the registrant’s investment adviser and other entities controlling, controlled by or under common control with the investment adviser that provide ongoing services to the registrant (the “Control Affiliates”) up to the specified fee limit. This fee limit is based on aggregate fees to the investment adviser and its Control Affiliates.
Service | Range of Fees |
Non-Audit Services | |
Services associated with periodic reports and other documents filed with the SEC and assistance in responding to SEC comment letters | up to $10,000 in the aggregate |
The Pre-Approval Policy requires the registrant’s independent auditors to report to the Audit Committee at each of its regular meetings regarding all services initiated since the last such report was rendered, including those services authorized by the Pre-Approval Policy.
(f) Not applicable.
(g) The aggregate non-audit fees billed by the registrant’s independent auditors for services rendered to the registrant and to its investment adviser and other service providers under common control with the adviser were $10,812,067 and $9,044,000 for the registrant’s fiscal years ended July 31, 2022 and July 31, 2021, respectively.
(h) In connection with its selection of the independent auditors, the registrant’s Audit Committee has considered the independent auditors’ provision of non-audit services to the registrant’s investment adviser and other service providers under common control with the adviser that were not required to be pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X. The Audit Committee has determined that the independent auditors’ provision of these services is compatible with maintaining the auditors’ independence.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Investments
(a) Included as part of report to shareholders filed under Item 1 of this Form N-CSR.
(b) Divestment of securities in accordance with Section 13(c) of the Investment Company Act of 1940.
Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 11. Controls and Procedures
The registrant’s principal executive officer and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing of this report, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the Investment Company Act of 1940 (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)) and provide reasonable assurance that the information required to be disclosed by the registrant in its reports or statements filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.
There were no significant changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 (17 CFR 270.30a-3(d)) that occurred during the period covered by the report to stockholders included herein that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable.
Item 13. Exhibits
(a) (1) Code of Ethics
Not applicable.
(3) Written solicitations to purchase securities pursuant to Rule 23c-1 under the Securities Exchange Act of 1934.
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf, by the undersigned, thereunto duly authorized.
DELAWARE GROUP® INCOME FUNDS
/s/ SHAWN K. LYTLE | |
By: | Shawn K. Lytle |
Title: | President and Chief Executive Officer |
Date: | November 25, 2022 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ SHAWN K. LYTLE | |
By: | Shawn K. Lytle |
Title: | President and Chief Executive Officer |
Date: | November 25, 2022 |
/s/ RICHARD SALUS | |
By: | Richard Salus |
Title: | Chief Financial Officer |
Date: | November 25, 2022 |
This ‘N-CSR/A’ Filing | Date | Other Filings | ||
---|---|---|---|---|
6/30/23 | ||||
12/31/22 | ||||
11/26/22 | ||||
Filed on / Effective on: | 11/25/22 | |||
11/23/22 | ||||
10/31/22 | ||||
9/16/22 | ||||
9/9/22 | ||||
For Period end: | 7/31/22 | N-CEN, N-CSR | ||
5/18/22 | ||||
3/31/22 | ||||
2/1/22 | ||||
1/1/22 | ||||
12/31/21 | ||||
12/17/21 | DEF 14A | |||
11/1/21 | ||||
8/1/21 | ||||
7/31/21 | 24F-2NT, N-CEN, N-CSR | |||
7/9/21 | ||||
4/1/21 | ||||
11/27/20 | 485BPOS | |||
8/1/20 | ||||
7/31/20 | 24F-2NT, N-CEN, N-CSR, NPORT-P | |||
7/1/20 | ||||
3/12/20 | ||||
7/31/19 | 24F-2NT, N-CEN, N-CSR | |||
1/31/19 | 485BPOS, N-CSRS | |||
7/31/18 | 24F-2NT, N-CEN, N-CEN/A, N-CSR | |||
5/2/16 | ||||
7/31/12 | 24F-2NT, N-CSR, NSAR-B, NSAR-B/A | |||
10/3/05 | ||||
6/2/03 | ||||
9/15/98 | ||||
List all Filings |