Risk managed solutions

Roger Early, Head of Fixed Income Investments, discusses why the team's assets under management, structure, and mindset are strengths that help distinguish it from others.

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One of the most common questions we get — what makes you different? Number one, it’s the size and scope of the assets under management. We’re of a size where we have the resources that can generate great ideas and do in-depth research. We also have a presence on Wall Street where we can actually get the allocations to bonds that we’re looking for. But in addition, we’re small enough that we can make a difference in each client’s portfolio one good idea at a time.

A second feature is the nature of the team. (Background: It goes below 70% ownership.) The team is given the opportunity to really work in their role for their career. That makes all the difference. It raises the perspective of the average person on the team and the level of experience in the end becomes a serious benefit to our team. (Background: Whatever it takes.) We have a culture of ownership, and I think that environment that we sit in provides us with the opportunity to each feel like we personally own the outcome for our client portfolios because nobody is hidden in an office, hiding away making decisions. We’re all making decisions right out there together.

And finally, I think the mindset of being a solutions provider. At a hundred plus billion in assets under management, you have the resources to build well-diversified, deeply researched portfolios. You have the ability to do bottom-up credit work, bottom-up research work, and really that size that allows us to be nimble enough and flexible enough to adapt and really work with the client. Each of these actually are built around the mindset of managing risks in portfolios so that you can raise the chances of delivering the goals and outcomes that the clients desire.

The views expressed represent the Managers’ assessment of the market environment as of April 2016 and should not be considered a recommendation to buy, hold, or sell any security, and should not be relied on as research or investment advice.

Past performance does not guarantee future results.

Investing involves risk, including the possible loss of principal.

Carefully consider a Fund’s investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Fund’s prospectuses and its summary prospectuses, which may be obtained by visiting delawareinvestments.com or calling 800 523-1918. Investors should read the prospectus and the summary prospectus carefully before investing.

Assets under management as of March 31, 2016.

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.

The Fund may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Fund may be prepaid prior to maturity, potentially forcing the Fund to reinvest that money at a lower interest rate.

High yielding, non-investment-grade bonds (junk bonds) involve higher risk than investment grade bonds.

The high yield secondary market is particularly susceptible to liquidity problems when institutional investors, such as mutual funds and certain other financial institutions, temporarily stop buying bonds for regulatory, financial, or other reasons. In addition, a less liquid secondary market makes it more difficult for the Fund to obtain precise valuations of the high yield securities in its portfolio.

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 derivative 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 not ordinarily associated with U.S. investments including fluctuation in currency values, differences in accounting principles, or economic or political instability in other nations.

Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility and lower trading volume.

Diversification may not protect against market risk.

All third-party marks cited are the property of their respective owners.

Delaware Investments, a member of Macquarie Group, refers to Delaware Management Holdings, Inc. and its subsidiaries, including the Fund's investment manager, Delaware Management Company (DMC) and the Fund's distributor, Delaware Distributors, L.P. Macquarie Group refers to Macquarie Group Limited and its subsidiaries and affiliates worldwide. DMC, a series of Delaware Management Business Trust, is a U.S. registered investment advisor.

Neither Delaware Investments nor its affiliates noted in this document are authorized deposit-taking institutions for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of Macquarie Bank Limited (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities, unless noted otherwise.
©2016 Delaware Management Holdings, Inc.

(16474) 04/16


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