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Delaware Group Equity Funds Iv

Filed: 7 Dec 20, 10:13am

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:      811-04413
 
Exact name of registrant as specified in charter:Delaware Group® Equity Funds IV
 
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:September 30
 
Date of reporting period:September 30, 2020


Item 1. Reports to Stockholders

Annual report
Equity funds
Delaware Equity Income Fund
Delaware Growth and Income Fund
Delaware Growth Equity Fund
Delaware Opportunity Fund
Delaware Special Situations Fund
Delaware Global Equity Fund
Delaware International Fund
Fixed income funds
Delaware Floating Rate II Fund
Delaware Fund for Income
Delaware Government Cash Management Fund
Delaware International Opportunities Bond Fund
Delaware Investment Grade Fund
Delaware Limited Duration Bond Fund
Delaware Strategic Income II Fund
Alternative/specialty funds
Delaware Covered Call Strategy Fund
Delaware Hedged U.S. Equity Opportunities Fund
Delaware Premium Income Fund
Multi-asset funds
Delaware Total Return Fund
 
September 30, 2020
Beginning on or about June 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of your Fund’s shareholder reports will no longer be sent to you by mail, unless you specifically request them from the Fund or from your financial intermediary, such as a broker/dealer, bank, or insurance company. Instead, you will be notified by mail each time a report is posted on the website and provided with a link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you do not need to take any action. You may elect to receive shareholder reports and other communications from the Fund electronically by signing up at delawarefunds.com/edelivery. If you own these shares through a financial intermediary, you may contact your financial intermediary.
You may elect to receive paper copies of all future shareholder reports free of charge. You can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by contacting us at 800 523-1918. If you own these shares through a financial intermediary, you may contact your financial intermediary to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held with the Delaware Funds® by Macquarie or your financial intermediary.
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 prospectus, which may be obtained by visiting delawarefunds.com/literature or calling 800 523-1918. Investors should read the prospectus and the summary prospectus carefully before investing.
You can obtain shareholder reports and prospectuses online instead of in the mail.
Visit delawarefunds.com/edelivery.

Table of contents
Experience Delaware Funds® by Macquarie
Macquarie Investment Management (MIM) is a global asset manager with offices in the United States, Europe, Asia, and Australia. As active managers, we prioritize autonomy and accountability at the investment team level in pursuit of opportunities that matter for clients. Delaware Funds is one of the longest-standing mutual fund families, with more than 80 years in existence.
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 the Funds at delawarefunds.com/literature.
Manage your account online
•  Check your account balance and transactions
•  View statements and tax forms
•  Make purchases and redemptions
Visit delawarefunds.com/account-access.
Macquarie Asset Management (MAM) offers a diverse range of products including securities investment management, infrastructure and real asset management, and fund and equity-based structured products. MIM is the marketing name for certain companies comprising the asset management division of Macquarie Group. This 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 (MBL), none of the entities noted 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 MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities, unless noted otherwise.
The Funds are governed by US laws and regulations.
Unless otherwise noted, views expressed herein are current as of September 30, 2020, 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.
© 2020 Macquarie Management Holdings, Inc.

Portfolio management reviews
Delaware Equity Income Fund
October 13, 2020 (Unaudited)
Performance preview (for the year ended September 30, 2020)
Delaware Equity Income Fund (Institutional Class shares)1-year return-7.72%
Delaware Equity Income Fund (Class A shares)1-year return-7.89%
Russell 1000® Value Index (benchmark)1-year return-5.03%
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Equity Income Fund, please see the table on page 38.
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. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
Please see page 41 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 objective
The Fund seeks total return.
Effective as of the close of business on October 4, 2019, Delaware Management Company (DMC or Manager), a series of Macquarie Investment Management Business Trust (MIMBT), serves as the investment manager for the Fund.* During the period after the close of business on October 4, 2019, the Manager repositioned the Fund’s portfolio in accordance with the Fund’s investment objective and principal investment strategies, as described in the prospectus. The investment objective is the same, and its principal investment strategies are the same or similar to those of the corresponding First Investors Fund.
Market review
Midway through the Fund’s fiscal year, the coronavirus outbreak turned into a pandemic, causing severe economic and humanitarian dislocations. In response, central bankers and policy makers around the world authorized fiscal and monetary support programs worth trillions of dollars. The COVID-19 pandemic and resulting government policy responses caused extraordinary fluctuations in the stock market. The broad market S&P 500® Index experienced its swiftest decline in history, dropping 30% from mid-February to mid-March. The Index then jumped 17% – its biggest three-day gain since 1933 – when it became clear that a massive fiscal stimulus package was working its way through US Congress. From that point,
stocks continued to rally strongly even in the face of persistent economic challenges.
Source: Bloomberg.
Within the Fund
For the fiscal year ended September 30, 2020, Delaware Equity Income Fund underperformed its benchmark, the Russell 1000 Value Index. The Fund’s Institutional Class shares declined 7.72%. The Fund’s Class A shares were down 7.89% at net asset value (NAV) and 13.18% at maximum offer price. These figures reflect
reinvestment of all distributions. During the same period, the Fund’s benchmark declined 5.03%. For complete, annualized performance of Delaware Equity Income Fund, please see the table on page 38.
Following is a discussion about performance during the period from October 7, 2019 (when DMC began serving as the investment manager for the Fund) to September 30, 2020.
Investments in the energy sector were the largest detractors from Fund performance. Shares of exploration and production companies Marathon Oil Corp. and Occidental Petroleum Corp., both of which have high oil-price sensitivity, experienced significant stock-price declines when crude oil demand collapsed following the onset of the pandemic. Given our view that oil demand could continue to be weak for an extended period, we decided to exit these positions.
The Fund’s holdings in the industrials sector also resulted in relative underperformance. Aerospace and defense company Raytheon Technologies Corp. was the laggard in the group. Formed when Raytheon Co. merged with United Technologies Corp. in April 2020, the company’s commercial aerospace exposure has been a source of concern for investors during the downturn. The company expressed a conservative outlook for free cash flow in 2020 and pushed out the expected timeframe for an aerospace recovery. Meanwhile, the defense business continued to post strong results with a significant increase in bookings. Raytheon Technologies’ shares remain attractively valued, in our view, and appear to have priced in many of the challenges facing its aerospace business.
The Fund’s holding in multiline insurance company American International Group Inc. (AIG) was another notable detractor. AIG’s results were negatively affected by global pandemic-related losses as well as the weaker economic backdrop and its shares remained under pressure for much of the Fund’s fiscal year. We believe the economic environment has masked the underlying improvements the company has made with respect to pricing, underwriting, and expense management, all of which we believe should work in its favor longer term. Meanwhile, the stock’s
 
    1

Portfolio management reviews
Delaware Equity Income Fund 
discounted valuation suggests to us that the market has not given AIG credit for its improving operations.
Investments in the information technology sector were the largest contributors to the Fund’s relative returns. Broadcom Inc., a leading provider of semiconductor and infrastructure software solutions, led the group higher. There has been relatively steady demand for many of the company’s products and services, and it has benefited from several broad trends including growing demand for servers, storage, mobility, and security. We believe Broadcom has attractive cash flow dynamics and further upside potential.
The Fund’s holdings in the consumer staples sector also contributed to relative performance. Conagra Brands Inc., a leading packaged-food company, was a solid contributor. Conagra’s shares were buoyed by ongoing strength in packaged-food demand, which led to
higher-than-expected organic sales growth. Conagra also made further progress on reducing leverage associated with its 2018 acquisition of Pinnacle Foods and declared a large dividend increase when it announced earnings results for its most recent
fiscal quarter.
The Fund’s holding in home improvement retailer Lowe’s Companies Inc. was another notable contributor. The company continued to benefit from ongoing strength in consumer spending on home improvements as well as better operational execution. Lowe’s shares appear reasonably valued to us. That said, given the stock’s impressive performance in recent years, we are assessing its potential risk-reward profile in the context of other opportunities in the consumer discretionary sector.
We see lingering uncertainties associated with the coronavirus pandemic. As a result, we remain focused on companies that possess what we view as more defensible business models that can navigate through adverse market conditions. Fund positioning remains fairly defensive. For example, we have established an underweight in financials, an overweight in healthcare, and less-cyclical positioning in consumer discretionary. While the Fund has lagged the benchmark in recent months as investors have rotated into more speculative stocks, we are not inclined to chase the rally because we don’t believe the long-term fundamentals justify that kind of leadership. We continue to emphasize higher-quality, undervalued companies that we believe have the potential to contribute to strong
long-term performance.
*On April 6, 2019, Foresters Investment Management Company, Inc. (FIMCO), the investment adviser to the First Investors Funds, entered into an agreement with Macquarie Management Holdings, Inc. (MMHI), whereby MMHI, on behalf of its affiliate DMC, would acquire FIMCO’s asset management business (the “Transaction”). In connection with the Transaction, the Board of Trustees of the First Investors Trusts and the First Investors Fund shareholders approved, pursuant to an Agreement and Plan of Reorganization
(the “Agreement”), the transfer of all assets and liabilities of each First Investors Fund to a corresponding, newly formed fund in the Delaware Funds® by Macquarie family of funds. The Transaction closed on October 4, 2019.
 
2    

Portfolio management reviews
Delaware Growth and Income Fund
October 13, 2020 (Unaudited)
Performance preview (for the year ended September 30, 2020)
Delaware Growth and Income Fund (Institutional Class shares)1-year return-7.68%
Delaware Growth and Income Fund (Class A shares)1-year return-7.99%
Russell 1000® Value Index (benchmark)1-year return-5.03%
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Growth and Income Fund, please see the table on page 42.
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. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
Please see page 45 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 objective
The Fund seeks long-term growth of capital and current income.
Effective as of the close of business on October 4, 2019, Delaware Management Company (DMC or Manager), a series of Macquarie Investment Management Business Trust (MIMBT), serves as the investment manager for the Fund.* During the period after the close of business on October 4, 2019, the Manager repositioned the Fund’s portfolio in accordance with the Fund’s investment objective and principal investment strategies, as described in the prospectus. The investment objective is the same, and its principal investment strategies are the same or similar to those of the corresponding First Investors Fund.
Midway through the Fund’s fiscal year, the coronavirus outbreak turned into a pandemic, causing severe economic and humanitarian dislocations. In response, central bankers and policy makers around the world authorized fiscal and monetary support programs worth trillions of dollars. The COVID-19 pandemic and resulting government policy responses caused extraordinary fluctuations in the stock market. The broad market S&P 500® Index experienced its swiftest decline in history, dropping 30% from mid-February to mid-March. The Index then jumped 17% – its biggest three-day gain since 1933 – when it became clear that a massive fiscal stimulus package was working its way through US Congress. From that point, stocks continued to rally strongly even in the face of persistent
economic challenges.
Source: Bloomberg.
Within the Fund
For the fiscal year ended September 30, 2020, Delaware Growth and Income Fund underperformed its benchmark, the Russell 1000 Value Index. The Fund’s Institutional Class shares declined 7.68%. The Fund’s Class A shares were down 7.99% at net asset value (NAV) and 13.28% at maximum offer price. These figures reflect reinvestment of all distributions. During the same period, the Fund’s
benchmark declined 5.03%. For complete, annualized performance of Delaware Growth and Income Fund, please see the table on
page 42.
Following is a discussion about performance during the period from October 7, 2019 (when DMC began serving as the investment manager for the Fund) to September 30, 2020.
Investments in the energy sector were the largest detractors from Fund performance. Shares of exploration and production companies Marathon Oil Corp. and Occidental Petroleum Corp., both of which have high oil-price sensitivity, experienced significant stock-price declines when crude oil demand collapsed following the onset of the pandemic. Given our view that oil demand could continue to be weak for an extended period, we decided to exit these positions.
The Fund’s holdings in the industrials sector also resulted in relative underperformance. Aerospace and defense company Raytheon Technologies Corp. was the laggard in the group. Formed when Raytheon Co. merged with United Technologies Corp. in April 2020, the company’s commercial aerospace exposure has been a source of concern for investors during the downturn. The company expressed a conservative outlook for free cash flow in 2020 and pushed out the expected timeframe for an aerospace recovery.
Meanwhile, the defense business continued to post strong results with a significant increase in bookings. Raytheon Technologies’ shares remain attractively valued, in our view, and appear to have priced in many of the challenges facing its aerospace business.
The Fund’s holding in multiline insurance company American International Group Inc. (AIG) was another notable detractor. AIG’s results were negatively affected by global pandemic-related losses as well as the weaker economic backdrop and its shares remained under pressure for much of the Fund’s fiscal year. We believe the economic environment has masked the underlying improvements the company has made with respect to pricing, underwriting, and expense management, all of which we believe should work in its favor longer term. Meanwhile, the stock’s
 
    3

Portfolio management reviews
Delaware Growth and Income Fund 
discounted valuation suggests to us that the market has not given AIG credit for its improving operations.
Investments in the information technology sector were the largest contributors to the Fund’s relative returns. Broadcom Inc., a leading provider of semiconductor and infrastructure software solutions, led the group higher. There has been relatively steady demand for many of the company’s products and services, and it has benefited from several broad trends including growing demand for servers, storage, mobility, and security. We believe Broadcom has attractive cash flow dynamics and further upside potential.
The Fund’s holdings in the consumer staples sector also contributed to relative performance. Conagra Brands Inc., a leading packaged-food company, was a solid contributor. Conagra’s shares were buoyed by ongoing strength in packaged-food demand, which led to higher-than-expected organic sales growth. Conagra also made further progress on reducing leverage associated with its 2018 acquisition of Pinnacle Foods and declared a large dividend increase when it announced earnings results for its most recent
fiscal quarter.
The Fund’s holding in home improvement retailer Lowe’s Companies Inc. was another notable contributor. The company continued to benefit from ongoing strength in consumer spending on home improvements as well as better operational execution. Lowe’s shares appear reasonably valued to us. That said, given the stock’s impressive performance in recent years, we are assessing its potential risk-reward profile in the context of other opportunities in the consumer discretionary sector.
We see lingering uncertainties associated with the coronavirus pandemic. As a result, we remain focused on companies that possess what we view as more defensible business models that can navigate through adverse market conditions. Fund positioning remains fairly defensive. For example, we have established an underweight in financials, an overweight in healthcare, and less-cyclical positioning in consumer discretionary. While the Fund has lagged the benchmark in recent months as investors have rotated into more speculative stocks, we are not inclined to chase the rally because we don’t believe the long-term fundamentals justify that kind of leadership. We continue to emphasize higher-quality, undervalued companies that we believe have the potential to contribute to strong
long-term performance.
*On April 6, 2019, Foresters Investment Management Company, Inc. (FIMCO), the investment adviser to the First Investors Funds, entered into an agreement with Macquarie Management Holdings, Inc. (MMHI), whereby MMHI, on behalf of its affiliate DMC, would acquire FIMCO’s asset management business (the “Transaction”). In connection with the Transaction, the Board of Trustees of the First Investors Trusts and the First Investors Fund shareholders approved, pursuant to an Agreement and Plan of Reorganization
(the “Agreement”), the transfer of all assets and liabilities of each First Investors Fund to a corresponding, newly formed fund in the Delaware Funds® by Macquarie family of funds. The Transaction closed on October 4, 2019.
 
4    

Portfolio management reviews
Delaware Growth Equity Fund
October 13, 2020 (Unaudited)
Performance preview (for the year ended September 30, 2020)
Delaware Growth Equity Fund (Institutional Class shares)1-year return+25.88%
Delaware Growth Equity Fund (Class A shares)1-year return+25.53%
Russell 1000® Growth Index (benchmark)1-year return+37.53%
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Growth Equity Fund, please see the table on page 46.
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. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
Please see page 49 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 objective
The Fund seeks long-term growth of capital.
On April 6, 2019, Foresters Investment Management Company, Inc. (FIMCO), the investment adviser to the First Investors Funds, entered into an agreement with Macquarie Management Holdings, Inc. (MMHI), whereby MMHI, on behalf of its affiliate Delaware Management Company (DMC), a series of Macquarie Investment Management Business Trust (MIMBT), would acquire FIMCO’s asset management business (the “Transaction”). In connection with the Transaction, the Board of Trustees of the First Investors Trusts and the First Investors Fund shareholders approved, pursuant to an Agreement and Plan of Reorganization (the “Agreement”), the transfer of all assets and liabilities of each First Investors Fund to a corresponding, newly formed fund in the Delaware Funds® by Macquarie family of funds. The Transaction closed on
October 4, 2019.
Smith Asset Management Group, L.P. (Smith), a US registered investment advisor, is the sub-advisor to the Fund. As sub-advisor, Smith is responsible for day-to-day management of the Fund’s assets. DMC, a series of MIMBT, has ultimate responsibility for all investment advisory services.
Market review
The 12-month period ended September 30, 2020 provided dramatic shifts in both economic and market fundamentals. The first three months of the Fund’s fiscal year started with the global economy beginning to pick up after a period of flat year-over-year earnings reports. The Fund's benchmark, the Russell 1000 Growth Index, was off to a good start, rising 10.6% for the final quarter of 2019. That index would go on to record four consecutive quarterly moves, both up and down, of greater than 10%, a level of volatility experienced only one other time in the almost 42-year history of the index.
In January 2020, COVID-19 was not generally perceived as a real threat to the US economy since it was happening on the other side of the world. However, in late February, the first home-grown cases of
the virus were documented in California and Washington state. As we know now, COVID-19 proved to be a threat to our collective health, economy, and, by extension, our livelihood and assets. The recession that began in February triggered a 31.5% decline in the Russell 1000 Growth Index by March 23.
Thanks to unprecedented fiscal and monetary efforts, the recession had run its course by early June. From the bear market lows of
March 23 through September 30, 2020, the Russell 1000 Growth Index gained 66%. While the Fund’s positioning may have helped dampen downside volatility, it proved too defensive for what has been a dramatic rise by growth stocks.
Our investment process is centered on a very specific and clearly defined fundamental outcome: Companies that can sustainably grow earnings faster than expected have the potential to outperform over time. During the fiscal year, the Fund’s holdings delivered 9.9% earnings growth versus an expectation of 7.1%, while benchmark holdings fell significantly short of growth expectations, delivering 1.0% earnings growth versus an expectation of 8.5%.
Source: Bloomberg.
Within the Fund
For the fiscal year ended September 30, 2020, Delaware Growth Equity Fund advanced, although it underperformed its benchmark, the Russell 1000 Growth Index. The Fund’s Institutional Class shares gained 25.88%. The Fund’s Class A shares advanced 25.53% at net asset value and 18.28% at maximum offer price. These figures reflect all distributions reinvested. For the same period, the benchmark gained 37.53%. For complete, annualized performance of Delaware Growth Equity Fund, please see the table on page 46.
The financial sector was the largest detractor from excess return. The Fund's holdings in the financial sector returned -27.0% compared to the benchmark sector return of 13.3%. The Fund's average weight in financials was 5.5% versus 2.8% for the benchmark. The Fund's
 
    5

Portfolio management reviews
Delaware Growth Equity Fund 
3.4% weight in banks relative to a 0.1% weight in the benchmark was a primary headwind to performance for the sector, accounting for 40% of the sector's relative underperformance. The Fund's bank holdings returned -23.8% relative to the benchmark return of
-10.5%. Banks are currently facing a dual challenge of a low interest rate environment - which impairs bank profitability - and rising nonperforming laon costs. However, we believe banks are better positioned to deal with the current economic crisis as capital levels are 40% higher than in the global financial crisis. Plus, the Federal Reserve learned valuable lessons from the global financial crisis and is broadening its "tool kit" to help support the economy and
financial markets.
The Fund’s two largest individual detractors for the 12-month period were Apple Inc. and Tesla Inc., as the two stocks accounted for 46% of the Fund’s underperformance. Apple was held in the Fund but at an underweight position relative to the benchmark. Apple averaged a 9.0% weight in the benchmark and 4.3% in the Fund and returned 109% during the fiscal year. The Fund continues to hold Apple at a lower weight than the benchmark in accordance with the Fund's construction goals of limiting single-stock specific risk in the Fund. Tesla returned 791% for the period but was not held in the Fund due to our valuation concerns.
Shares of airline operator Alaska Air Group Inc. fell 58% for the period that we held it in the Fund. Like all airlines, Alaska Air suffered from a near stoppage of commercial and leisure traffic due to the pandemic. Discover Financial Services, the credit card and banking company, fell 42% for the period held and we have since sold the position. The company faced headwinds from the recession due to growing provisioning charges. Shares of Dunkin' Brands Group Inc., the world’s leading franchiser of quick service restaurants with more than 20,000 locations under the Dunkin’ and Baskin-Robbins brands, fell 28% for the period held in the Fund, as shares were pressured by pandemic-induced store closures. Shares of banking powerhouse JPMorgan Chase & Co. fell 28%, as it was not immune to the challenges of narrowing net interest margins and rising loan loss write-offs. We continue to hold JPMorgan Chase in the Fund as we believe it is the most dominant bank in the United States.
The information technology sector was the top absolute performer in both the Fund and the benchmark. Shares of NVIDIA Corp., inventor of the graphics processing unit, gained 111% as the company benefited from gaming, work/learn from home, and hyperscale demand trends. PayPal Holdings Inc., a provider of electronic payment solutions with a focus on online transactions, rose 91% during the fiscal year. Shares of Adobe Inc., the dominant provider of content creation and digital marketing software tools, gained 78%. EPAM Systems Inc., a provider of software product development and digital platform engineering, rose 76% during the 12-month period due to growing demand for business processing outsourcing services. Security software provider Fortinet Inc. has been a frontrunner in the small- and medium-size market with its unified threat managment system that packages multiple security solutions into a single affordable offering. Fortinet returned 53% for the 12-month period and is well positioned relative to higher-priced offerings in a slowing economic environment, in our view. Electronic design automation provider Cadence Design Systems Inc. rose 62% for the year. Cadence provides chip design software to semiconductor manufacturers in the high-growth areas of cloud computing, artificial intelligence (AI), augmented reality/virtual reality, autonomous vehicles, 5G, and the industrial Internet of Things (loT). For its third year in a row, the company is on track to achieve its "Rule of 40" target (revenue growth plus operating margin of at least 40%).
We continue to believe that the Fund’s holdings have the potential to generate healthy returns since the market typically rewards
high-quality earnings and reasonable valuations. A continued recovery from the recession of early 2020 should, in our view, provide a good foundation for earnings growth by the companies that make up the Fund’s portfolio. Accordingly, we continue to believe our focus on what we view as high-quality companies whose earnings we think have the potential to exceed market expectations is the key to generating excess returns over the long term.
 
6    

Portfolio management reviews
Delaware Opportunity Fund
October 13, 2020 (Unaudited)
Performance preview (for the year ended September 30, 2020)
Delaware Opportunity Fund (Institutional Class shares)1-year return-13.04%
Delaware Opportunity Fund (Class A shares)1-year return-13.31%
Russell Midcap® Value Index (benchmark)1-year return-7.30%
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Opportunity Fund, please see the table on page 50.
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. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
Please see page 53 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 objective
The Fund seeks long-term capital growth.
Effective after the close of business on October 4, 2019, Delaware Management Company (DMC or Manager), a series of Macquarie Investment Management Business Trust (MIMBT), serves as the investment manager for the Fund.* During the period after the close of business on October 4, 2019, the Manager repositioned the Fund’s portfolio in accordance with the Fund’s investment objective and principal investment strategies, as described in the prospectus. The investment objective is the same and its principal investment strategies are the same or similar to those of the corresponding First Investors Fund.
Market review
Mid-cap value stocks experienced substantial volatility during the Fund’s fiscal year ended September 30, 2020, and finished the period in the red. During the fiscal year, growth stocks outperformed value stocks across the US market cap spectrum as investors continued to favor companies with strong sales growth in lieu of those with attractive valuations. The performance disparity between value and growth companies was significant in mid-cap equities as the Russell Midcap Value Index declined 7.30% and the Russell Midcap® Growth Index appreciated 23.23% during the fiscal year.
Sector performance during the fiscal year was mixed within the Russell Midcap Value Index, with five sectors appreciating and eight sectors declining. The strongest-performing sectors in the benchmark were healthcare, technology, and basic industry. The energy sector was by far the weakest sector in the benchmark, declining by more than 40%. The real estate investment trust (REIT), business services, financial services, transportation, and utilities sectors in the benchmark each declined by more than 10% during the fiscal year.
Source: Bloomberg.
Within the Fund
For the fiscal year ended September 30, 2020, Delaware Opportunity Fund underperformed its benchmark, the Russell Midcap Value Index. The Fund's Institutional class shares declined 13.04%. The Fund’s Class A shares declined 13.31% at net asset value (NAV) and 18.30% at maximum offer price. These figures reflect reinvestment of all distributions. During the same period, the Fund’s benchmark declined 7.30%. For complete annualized performance of Delaware Opportunity Fund, please see the table on page 50.
Following is a discussion about performance during the period from October 7, 2019 (when DMC began serving as the investment manager for the Fund) to September 30, 2020.
Stock selection in the financial services and energy sectors detracted as the Fund’s holdings in those sectors declined by more on average than their respective sectors in the benchmark. Stock selection and relative underweight allocations detracted in the consumer services, consumer staples, and healthcare sectors. Stock selection contributed in the technology and utilities sectors. Additionally, the Fund’s positioning in the REIT sector contributed.
Stock selection in the energy sector detracted from performance. The Fund’s position in independent oil and gas exploration and production (E&P) company Marathon Oil Corp. underperformed. During the fiscal year, the US energy market suffered from demand destruction and excess supply, pressuring the price of oil to levels that are not profitable for many producers. Even high-quality companies such as Marathon Oil traded lower. During the fiscal year, Marathon Oil reduced its capital budget; it expects to generate free cash flow throughout 2021.
Hancock Whitney Corp. offers comprehensive financial products and services, including traditional and online banking; commercial and small business banking; private banking; trust and investment services; healthcare banking; certain insurance services; and mortgage services. Hancock Whitney detracted during the fiscal year after reporting that its loan portfolio had exposure to certain higher-
 
    7

Portfolio management reviews
Delaware Opportunity Fund 
risk businesses. Hancock Whitney implemented a derisking strategy to better position the company and recently sold a portion of its higher-risk energy loans.
Teradyne Inc. is a supplier of automation equipment for test and industrial applications. The company designs systems used to test semiconductors, wireless products, and electronic systems, in addition to producing collaborative industrial-use robots. Shares of Teradyne contributed during the fiscal year as Teradyne reported multiple quarters of improving financial results driven by stronger-than-expected test revenues and demand trends.
Shares of Berry Global Group Inc., a manufacturer of plastic consumer packaging, engineered materials, and nonwoven specialty materials, contributed to performance. Berry’s share price lagged early in the fiscal year and recovered above pre-pandemic levels before the end of the fiscal year. Berry focused on achieving its financial objectives to strengthen its balance sheet and grow organically, which it achieved through debt reduction and volume growth across business segments.
The Fund ended the fiscal year overweight the capital spending, financial services, and technology sectors. It ended the fiscal year underweight the REIT, consumer services, utilities, business services, and consumer services sectors. Relative sector weightings were
roughly neutral in the transportation, basic industry, consumer cyclical, consumer staples, and energy sectors.
Our team’s disciplined philosophy remains unchanged. We continue to focus on bottom-up stock selection and specifically on identifying companies that, in our view, trade at attractive valuations, generate strong free cash flow, and implement shareholder-friendly policies through share buybacks, dividend increases, and debt reduction. In that regard, we are encouraged by the number of companies that continue to meet these criteria.
*On April 6, 2019, Foresters Investment Management Company, Inc. (FIMCO), the investment adviser to the First Investors Funds, entered into an agreement with Macquarie Management Holdings, Inc. (MMHI), whereby MMHI, on behalf of its affiliate DMC, would acquire FIMCO’s asset management business (the “Transaction”). In connection with the Transaction, the Board of Trustees of the First Investors Trusts and the First Investors Fund shareholders approved, pursuant to an Agreement and Plan of Reorganization
(the “Agreement”), the transfer of all assets and liabilities of each First Investors Fund to a corresponding, newly formed fund in the Delaware Funds® by Macquarie family of funds. The Transaction closed on October 4, 2019.
 
8    

Portfolio management reviews
Delaware Special Situations Fund
October 13, 2020 (Unaudited)
Performance preview (for the year ended September 30, 2020)
Delaware Special Situations Fund (Institutional Class shares)1-year return-20.67%
Delaware Special Situations Fund (Class A shares)1-year return-20.91%
Russell 2000® Value Index (primary benchmark)1-year return-14.88%
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Special Situations Fund, please see the table on page 54.
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. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
Please see page 57 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 objective
The Fund seeks long-term growth of capital.
Effective after the close of business on October 4, 2019, Delaware Management Company (DMC or Manager), a series of Macquarie Investment Management Business Trust (MIMBT), serves as the investment manager for the Fund.* During the period after the close of business on October 4, 2019, the Manager repositioned the Fund’s portfolio in accordance with the Fund’s investment objective and principal investment strategies, as described in the prospectus. The investment objective is the same and its principal investment strategies are the same or similar to those of the corresponding First Investors Fund.
Market review
Small-cap value stocks experienced substantial volatility during the Fund’s fiscal year ended September 30, 2020, and finished the period in the red. During the fiscal year, growth stocks outperformed value stocks across the US market cap spectrum as investors continued to favor companies with strong sales growth in lieu of those with attractive valuations. The performance disparity between value and growth companies was significant in small-cap equities as the Russell 2000 Value Index declined 14.88% and the Russell 2000® Growth Index gained 15.71% during the fiscal year.
Sector performance during the fiscal year was mixed within the Russell 2000 Value Index, with four sectors appreciating and nine sectors declining. The positive-returning sectors in the benchmark were healthcare, consumer staples, technology, and consumer cyclical. The energy sector was by far the weakest sector in the benchmark, declining by more than 50%. The real estate investment trust (REIT), financial services, and utilities sectors in the benchmark each declined by more than 20% during the fiscal year.
Source: Bloomberg.
Within the Fund
For the fiscal year ended September 30, 2020, Delaware Special Situations Fund underperformed its benchmark, the Russell 2000 Value Index. The Fund's Institutional Class shares declined 20.67%. The Fund’s Class A shares declined 20.91% at net asset value (NAV) and 25.45% at maximum offer price. These figures reflect reinvestment of all distributions. During the same period, the Fund’s benchmark declined 14.88%. For complete annualized performance of Delaware Special Situations Fund, please see the table on page 54.
Following is a discussion about performance during the period from October 7, 2019 (when DMC began serving as the investment manager for the Fund) to September 30, 2020.
Stock selection and a relative underweight allocation detracted in the consumer services sector as the Fund’s holdings declined by more than those in the benchmark. Stock selection and a relative underweight to the healthcare sector detracted as the Fund’s holdings did not appreciate by as much as those in the healthcare sector of the benchmark. Stock selection detracted in the energy, financial services, and business services sectors. On a relative basis, stock selection and positioning in the REIT sector contributed. Stock selection also contributed in the basic industry and technology sectors.
Shares of movie theatre company Cinemark Holdings Inc. detracted from relative performance during the fiscal year. In mid-March, Cinemark announced the temporary closure of all its theaters in an effort to protect employees and moviegoers from the coronavirus, resulting in a decline in its stock price since its revenues are likely to be lower than expected. Prior to the end of the fiscal year, we sold the Fund’s position in Cinemark as we believe the company will, for a period, not be able to generate free cash flow.
Hancock Whitney Corp. offers comprehensive financial products and services, including traditional and online banking; commercial and small business banking; private banking; trust and investment
 
    9

Portfolio management reviews
Delaware Special Situations Fund 
services; healthcare banking; certain insurance services; and mortgage services. Hancock Whitney detracted during the fiscal year after reporting that its loan portfolio had exposure to certain higher-risk businesses. Hancock Whitney implemented a derisking strategy to better position the company and recently sold a portion of its higher-risk energy loans.
Teradyne Inc. is a supplier of automation equipment for test and industrial applications. The company designs systems used to test semiconductors, wireless products, and electronic systems, in addition to producing collaborative industrial-use robots. Shares of Teradyne contributed during the fiscal year as the company reported multiple quarters of improving financial results driven by better-than-expected test revenues and demand trends.
Shares of Berry Global Group Inc., a manufacturer of plastic consumer packaging, engineered materials, and nonwoven specialty materials, contributed to performance. Berry’s share price lagged early in the fiscal year and recovered above pre-pandemic levels before the end of the fiscal year. Berry focused on achieving its financial objectives to strengthen its balance sheet and grow organically, which was achieved through debt reduction and volume growth across business segments.
The Fund ended the fiscal year overweight the capital spending, technology, and transportation sectors. It ended the fiscal year
underweight the healthcare, consumer services, REIT, and financial services sectors. The Fund has small overweights to the basic industry and consumer staples sectors. The Fund has small underweights to the consumer cyclical, energy, and utilities sectors.
Our team’s disciplined philosophy remains unchanged. We continue to focus on bottom-up stock selection and specifically on identifying companies that, in our view, trade at attractive valuations, generate strong free cash flow, and implement shareholder-friendly policies through share buybacks, dividend increases, and debt reduction. In that regard, we are encouraged by the number of companies that continue to meet these criteria.
*On April 6, 2019, Foresters Investment Management Company, Inc. (FIMCO), the investment adviser to the First Investors Funds, entered into an agreement with Macquarie Management Holdings, Inc. (MMHI), whereby MMHI, on behalf of its affiliate DMC, would acquire FIMCO’s asset management business (the “Transaction”). In connection with the Transaction, the Board of Trustees of the First Investors Trusts and the First Investors Fund shareholders approved, pursuant to an Agreement and Plan of Reorganization
(the “Agreement”), the transfer of all assets and liabilities of each First Investors Fund to a corresponding, newly formed fund in the Delaware Funds® by Macquarie family of funds. The Transaction closed on October 4, 2019.
 
10    

Portfolio management reviews
Delaware Global Equity Fund
October 13, 2020 (Unaudited)
Performance preview (for the year ended September 30, 2020)
Delaware Global Equity Fund (Institutional Class shares)1-year return+4.24%
Delaware Global Equity Fund (Class A shares)1-year return+3.89%
MSCI World Index (benchmark) (gross)1-year return+10.41%
MSCI World Index (benchmark) (net)1-year return+10.99%
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Global Equity Fund, please see the table on page 58.
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. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
Please see page 61 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 objective
The Fund seeks long-term capital growth.
Effective as of the close of business on October 4, 2019, Delaware Management Company (DMC or Manager), a series of Macquarie Investment Management Business Trust (MIMBT), serves as the investment manager for the Fund.* During the period after the close of business on October 4, 2019, the Manager repositioned the Fund’s portfolio in accordance with the Fund’s investment objective and principal investment strategies, as described in the prospectus. The investment objective is the same, and its principal investment strategies are the same or similar to those of the corresponding First Investors Fund.
Economic developments and market performance
At the end of 2019, we closed the books on a very positive quarter. During the quarter, stock markets around the world rose as the risk to global growth seemed to have subsided after the United States and China agreed on a Phase 1 trade deal. The general election in the United Kingdom on December 12, 2019 was another major event that helped remove some market uncertainty. The Conservative Party’s landslide victory meant that Brexit would move forward; Britain left the European Union on January 31, 2020. A transition period until the end of 2020 provides time for negotiations to secure a trade deal with the EU.
During the first three quarters of 2020, global stock markets continued to digest the ongoing evolution of the COVID-19 pandemic. The first two quarters of 2020 were radically different from one another. The steep collapse at an incredible velocity in the first quarter was followed by a remarkable rebound in the second quarter, fueled by unprecedented stimulus. The third quarter was more undecided after a pullback in September.
Within the Fund
For the fiscal year ended September 30, 2020, Delaware Global Equity Fund underperformed its benchmark, the MSCI World Index (net). The Fund’s Institutional Class shares gained 4.24%. The Fund’s Class A shares advanced 3.89% at net asset value (NAV) and declined 2.11% at maximum offer price. These figures reflect reinvestment of all distributions. During the same period, the Fund’s benchmark gained 10.41%. For complete, annualized performance of Delaware Global Equity Fund, please see the table on page 58.
Following is a discussion about performance during the period from October 7, 2019 (when DMC began serving as the investment manager for the Fund) to September 30, 2020.
The portfolio management team invests with the mindset of long-term business owners. Our research is focused on how well we think a company can deploy its capital and redeploy retained earnings. Therefore, the Fund’s portfolio is built bottom-up (stock-by-stock) by selecting company stocks based on quantitative insights and qualitative assessments.
We use a multivariate risk model to analyze what we view as the various potential contributors to and detractors from the Fund’s performance against its benchmark. For the year ended September 30, 2020, active country and region weights had a minor negative impact on performance. The Fund’s overweight in France and underweight in the US relative to the benchmark had a negative effect. The Fund’s overweight in Denmark relative to its benchmark was positive.
Although our active sector weights had little impact on returns, the Fund’s underweights to energy and financials relative to the benchmark contributed to performance. The Fund’s overweight in consumer staples and underweight in information technology detracted from performance.
In terms of individual holdings, three of the largest positive contributors to active performance were Danish multinational
 
    11

Portfolio management reviews
Delaware Global Equity Fund 
pharmaceutical company Novo Nordisk A/S; California-based
The Clorox Co., a global manufacturer and marketer of consumer and professional products; and Japanese power-tools manufacturer Makita Corp.
During the period, Novo Nordisk rose steadily, buoyed by positive earnings reports.
Despite the periodically brutal stock selloffs in the first quarter of 2020, Clorox stood out as one of the stocks thriving as part of a potential remedy to the coronavirus scare. The demand for Clorox’s cleaning products, bleach, and multisurface disinfecting wipes is expected to show a strong positive effect on the company’s financial results.
Makita rose steadily, buoyed by a first-quarter result that exceeded market expectations.
Conversely, three of the largest detractors from performance during the year were French multinational food-products corporation Danone S.A.; Japanese diversified retail group Seven & i
Holdings Co. Ltd.
; and French food services and facilities management company Sodexo S.A.
Danone delivered a soft first half in contrast to other food companies that have enjoyed tailwinds from the eat-at-home trend. The Achilles’ heel for Danone was its Waters business.
Seven & i Holdings (S&I) had a rough year as COVID-19 negatively affected business results. The outlook for the holdings company was lowered in July 2020. In August, S&I announced the acquisition of Marathon Petroleum’s Speedway gas stations in the US for $21 billion. The market, however, perceived the price as high given the uncertainties related to COVID-19.
Sodexo has suffered disproportionally from the impact of the coronavirus. Facility servicing and restaurants have had strong headwinds due to lockdowns in most of Sodexo’s markets.
*On April 6, 2019, Foresters Investment Management Company, Inc. (FIMCO), the investment adviser to the First Investors Funds, entered into an agreement with Macquarie Management Holdings, Inc. (MMHI), whereby MMHI, on behalf of its affiliate DMC, would acquire FIMCO’s asset management business (the “Transaction”). In connection with the Transaction, the Board of Trustees of the First Investors Trusts and the First Investors Fund shareholders approved, pursuant to an Agreement and Plan of Reorganization (the “Agreement”), the transfer of all assets and liabilities of each First Investors Fund to a corresponding, newly formed fund in the Delaware Funds® by Macquarie family of funds. The Transaction closed on October 4, 2019.
 
12    

Portfolio management reviews
Delaware International Fund
October 13, 2020 (Unaudited)
Performance preview (for the year ended September 30, 2020)
Delaware International Fund (Institutional Class shares)1-year return+0.52%*
Delaware International Fund (Class A shares)1-year return+0.29%*
MSCI EAFE Index (gross) (benchmark)1-year return+0.49%
MSCI EAFE Index (net) (benchmark)1-year return+0.93%
Past performance does not guarantee future results.
For complete, annualized performance for Delaware International Fund, please see the table on page 62.
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. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
Please see page 65 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.
*Total return for the report period presented in the table differs from the return in “Financial highlights.” The total return presented in the above table is calculated based on the net asset value (NAV) at which shareholder transactions were processed. The total return presented in “Financial highlights” is calculated in the same manner but also takes into account certain adjustments that are necessary under US generally accepted accounting principles (US GAAP) required in the annual report.
Investment objective
The Fund seeks long-term capital growth.
Effective as of the close of business on October 4, 2019, Delaware Management Company (DMC or Manager), a series of Macquarie Investment Management Business Trust (MIMBT), serves as the investment manager for the Fund.** During the period after the close of business on October 4, 2019, the Manager repositioned the Fund’s portfolio in accordance with the Fund’s investment objective and principal investment strategies, as described in the prospectus. The investment objective is the same, and its principal investment strategies are the same or similar to those of the corresponding First Investors Fund.
Economic developments and market performance
At the end of 2019, we closed the books on a very positive quarter. During the quarter, stock markets around the world rose as the risk to global growth seemed to have subsided after the United States and China agreed on a Phase 1 trade deal. The general election in the United Kingdom on December 12, 2019 was another major event that helped remove some market uncertainty. The Conservative Party’s landslide victory meant that Brexit would move forward; Britain left the European Union on January 31, 2020. A transition period through the end of 2020 provides time for negotiations to secure a trade deal with the EU.
During the first three quarters of 2020, international stock markets continued to digest the ongoing evolution of the COVID-19 pandemic. The first two quarters of 2020 were radically different from one another. The steep collapse at an incredible velocity in the first quarter was followed by a remarkable rebound in the second quarter, fueled by unprecedented stimulus. The third quarter was more undecided after a pullback in September.
Within the Fund
For the fiscal year ended September 30, 2020, Delaware International Fund Institutional Class shares gained 0.52% and outperformed its benchmark, the MSCI EAFE Index (net), which advanced 0.49% for the same period. The Fund’s Class A shares underperformed the benchmark and advanced 0.29% at net asset value (NAV) and declined 5.48% at maximum offer price. These figures reflect reinvestment of all distributions. For complete, annualized performance of Delaware International Fund, please see the table on page 62.
Following is a discussion about performance during the period from October 7, 2019 (when DMC began serving as the investment manager for the Fund) to September 30, 2020.
The portfolio management team invests with the mindset of
long-term business owners. Our research is focused on how well we think a company can deploy its capital and redeploy retained earnings. Therefore, the Fund’s portfolio is built bottom-up (stock-by-stock) by selecting company stocks based on quantitative insights and qualitative assessments.
We use a multivariate risk model to analyze what we view as the various contributors to and detractors from the Fund’s performance against its benchmark. For the year ended September 30, 2020, active country and region weights had a positive impact on performance. The Fund’s overweight in Denmark and the UK relative to its benchmark was positive.
Our active sector weights also positively affected returns. The Fund’s underweights to financials and energy and an overweight to healthcare relative to the benchmark also added to a positive sector effect. The Fund’s underweight in information technology detracted from performance.
 
    13

Portfolio management reviews
Delaware International Fund 
In terms of individual holdings, three of the largest contributors to active performance were Danish multinational pharmaceutical company Novo Nordisk A/S; one of the world’s largest food retail groups, Dutch company Koninklijke Ahold Delhaize N.V.; and Japanese power-tools manufacturer Makita Corp.
During the period, Novo Nordisk rose steadily, buoyed by positive earnings reports.
Like other food retailers offering online groceries amid the
COVID-19 outbreak, Ahold Delhaize enjoyed a bumper first half of the year, firing on all cylinders. Ahold Delhaize delivered double-digit growth rates in the first half, with sales jumping 14%. Online sales spiked as social distancing and stay-at-home shopping led to a substantial rise in consumers' buying their groceries online.
Makita rose steadily, buoyed by a first quarter result that exceeded market expectations.
Conversely, three of the largest detractors from performance during the year were companies based in France: multinational
food-products corporation Danone S.A.; food services and facilities management company Sodexo S.A.; and multinational telecommunications corporation Orange S.A.
Danone delivered a soft first half in contrast to other food companies that enjoyed tailwinds from the eat-at-home trend. The Achilles’ heel for Danone was its Waters business.
Sodexo suffered disproportionally from the impact of the coronavirus. Facility servicing and restaurants have had strong headwinds due to lockdowns in most of Sodexo’s markets.
A lack of equipment sales due to the closure of three-quarters of its stores in Europe negatively affected Orange. Its balance sheet also took a hit from the decline in roaming revenues due to people not traveling during government lockdowns.
**On April 6, 2019, Foresters Investment Management Company, Inc. (FIMCO), the investment adviser to the First Investors Funds, entered into an agreement with Macquarie Management Holdings, Inc. (MMHI), whereby MMHI, on behalf of its affiliate DMC, would acquire FIMCO’s asset management business (the “Transaction”). In connection with the Transaction, the Board of Trustees of the First Investors Trusts and the First Investors Fund shareholders approved, pursuant to an Agreement and Plan of Reorganization (the “Agreement”), the transfer of all assets and liabilities of each First Investors Fund to a corresponding, newly formed fund in the Delaware Funds® by Macquarie family of funds. The Transaction closed on October 4, 2019.
 
14    

Portfolio management reviews
Delaware Floating Rate II Fund
October 13, 2020 (Unaudited)
Performance preview (for the year ended September 30, 2020)
Delaware Floating Rate II Fund (Institutional Class shares)1-year return+1.17%
Delaware Floating Rate II Fund (Class A shares)1-year return+1.00%
S&P/LSTA (Loan Syndications and Trading Association)
Leveraged Loan Index (benchmark)
1-year return+1.06%
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Floating Rate II Fund, please see the table on page 66.
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. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
Please see page 68 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 objective
The Fund seeks a high level of current income.
Effective after the close of business on October 4, 2019, Delaware Management Company (DMC or Manager), a series of Macquarie Investment Management Business Trust (MIMBT), serves as the investment manager for the Fund.* During the period after the close of business on October 4, 2019, the Manager repositioned the Fund’s portfolio in accordance with the Fund’s investment objective and principal investment strategies, as described in the prospectus. The investment objective is the same and its principal investment strategies are the same or similar to those of the corresponding First Investors Fund.
Market review
Given the healthy state of company fundamentals, we were optimistic as we began the fiscal year; many corporate management teams had a positive outlook in late 2019 and early in 2020. Additionally, a series of rate cuts initiated by the US Federal
Reserve in summer 2019 were expected to continue to stimulate
the economy.
However, as February progressed, concerning news emerged from China about the coronavirus. As companies released fourth-quarter results, management teams’ forward guidance turned cautious, especially for firms that relied on China as part of their supply chain or that were more exposed to global growth trends. For example, commodity-related companies and industrial firms that had meaningful operations in China indicated that activity there was slowing significantly.
By early March, risks to consumer-related exposure developed in Europe as coronavirus cases flared up in Italy. As it became clear that the virus and related concerns were now a global issue, global capital markets completely melted down. The Fed and other central banks stepped in quickly, injecting trillions of dollars of liquidity to stabilize global markets. This included unprecedented, targeted
stimulus directed toward many parts of the fixed income markets, including loans and both high yield and investment grade bonds. After that, technical factors improved significantly, and the loan market saw a major rebound in prices at the end of the fiscal year.
Source: Bloomberg.
Within the Fund
For the fiscal year ended September 30, 2020, Delaware Floating Rate II Fund Institutional Class shares gained 1.17% and outperformed its benchmark, the S&P/LSTA Leveraged Loan Index, which advanced 1.06% for the same period. The Fund’s Class A shares underperformed the benchmark and advanced 1.00% at net asset value and declined 1.57% at maximum offer price. These figures reflect all distributions reinvested. For complete, annualized performance of Delaware Floating Rate II Fund, please see the table on page 66.
Following is a discussion about performance during the period from October 7, 2019 (when DMC began serving as the investment manager for the Fund) to September 30, 2020.
As noted, we had been positive on economic fundamentals at the beginning of the fiscal year and had positioned the Fund accordingly. As it became clear in February that this global pandemic would have widening economic and fundamental repercussions, we significantly reduced the Fund’s consumer-related exposure, including restaurants, movie theaters, hotels and casinos, and rental cars. We also reduced the Fund’s industrial and commodity-related exposure.
Once the Fed and other central banks stepped in aggressively in March, technicals improved significantly. However, we are fundamentally based investors and the fundamental backdrop is still highly uncertain. Therefore, we have been cautious and disciplined about adding back risk. We added some exposure to casinos and airlines where we’ve seen, in our view, higher-quality opportunities, such as Mileage Plus Holdings LLC and Delta Air Lines Inc. We also added exposure to cruise line operator Carnival Corp., which
 
    15

Portfolio management reviews
Delaware Floating Rate II Fund 
was an investment grade firm before the crisis. (Both Delta and Carnival are now considered “fallen angels” – bonds that had an investment grade rating but were then reduced to junk bond status due to the issuer’s weakened condition.) All the exposure we added to consumer-related sectors was in the secured part of the capital structure and in companies we believe are fundamentally well positioned to successfully navigate this crisis.
The Fund outperformed its benchmark for the fiscal year largely because of the Fund’s more cautious positioning going into the pandemic. The Fund was underweight CCC-rated securities and overweight BB-rated and BBB-rated securities, which contributed to the Fund’s benchmark-relative performance. The Fund’s positioning changes in hotels, casinos, restaurants, and leisure and the underweight to that collective group of consumer-related sectors meaningfully contributed to performance.
The Fund’s overweight to defensive sectors – including utilities, telecommunications, and healthcare – also worked well during the fiscal year. Utilities were strong defensive holdings that held their ground through the market turbulence, and the Fund had a significant overweight and strong security selection in the sector.
This was also generally true for the telecommunications and healthcare sectors.
Among the Fund’s individual holdings that performed well were utility firms Vistra Operations Co. LLC, Panda Patriot LLC, and Panda Liberty LLC. We also protected capital by selling securities issued by AMC Entertainment Holdings Inc. and CEC Entertainment Inc., the parent of child-oriented restaurant chain Chuck E. Cheese, thereby avoiding significant losses.
Among detractors, the energy sector was the Fund’s
weakest-performing sector and biggest detractor, as oil and gas prices declined significantly. The Fund started the fiscal period overweight energy companies, which significantly detracted from overall relative performance. Additionally, we had weak security selection within that sector. Poorly performing holdings included
Chesapeake Energy Corp., Targa Resources Partners LP, and Delek US Holdings Inc. The chemicals sector also detracted from performance. The Fund was market weight within chemicals, but its commodity chemical exposure performed poorly as commodity prices declined. A loan to commodity chemicals company Perstorp Holding AB performed less favorably than many others. American Airlines Group Inc. also performed quite poorly, hurt by the pandemic-related loss in business.
At the end of the Fund’s fiscal year, default rates were at a
five-year high. Forecasts also reflect above-average default rates for the upcoming year. By credit quality, we continue to prefer the
BB-rated quality sector, with a focus on more economically defensive industries. We believe this approach to positioning seeks to enable the Fund to carry a competitive yield while also somewhat
protecting against fundamental volatility from the changing economic environment.
A note about derivatives
Although the Fund generally doesn’t use derivatives, we did in early March out of concern for capital market volatility. We briefly used a high yield credit default swap as a small hedge once capital markets began to break down. However, this neither added to nor detracted from performance.
*On April 6, 2019, Foresters Investment Management Company, Inc. (FIMCO), the investment adviser to the First Investors Funds, entered into an agreement with Macquarie Management Holdings, Inc. (MMHI), whereby MMHI, on behalf of its affiliate DMC, would acquire FIMCO’s asset management business (the “Transaction”). In connection with the Transaction, the Board of Trustees of the First Investors Trusts and the First Investors Fund shareholders approved, pursuant to an Agreement and Plan of Reorganization
(the “Agreement”), the transfer of all assets and liabilities of each First Investors Fund to a corresponding, newly formed fund in the Delaware Funds® by Macquarie family of funds. The Transaction closed on October 4, 2019.
 
16    

Portfolio management reviews
Delaware Fund for Income
October 13, 2020 (Unaudited)
Performance preview (for the year ended September 30, 2020)
Delaware Fund for Income (Institutional Class shares)1-year return+3.20%
Delaware Fund for Income (Class A shares)1-year return+2.95%
ICE BofA US High Yield Constrained Index (benchmark)1-year return+2.22%
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Fund for Income, please see the table on page 69.
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. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
Please see page 72 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 objective
The Fund seeks high current income.
Effective after the close of business on October 4, 2019, Delaware Management Company (DMC or Manager), a series of Macquarie Investment Management Business Trust (MIMBT), serves as the investment manager for the Fund.* During the period after the close of business on October 4, 2019, the Manager repositioned the Fund’s portfolio in accordance with the Fund’s investment objective and principal investment strategies, as described in the prospectus. The investment objective is the same and its principal investment strategies are the same or similar to those of the corresponding First Investors Fund.
Market review
The first four months of the Fund’s fiscal year presented a relatively benign market environment compared with the tumultuous latter part. From October 1, 2019 through January 2020, markets reacted to the up-and-down progress in the US-China trade deal negotiations. Abroad, oil prices were disrupted following the bombing of refineries in Saudi Arabia. Domestically, concerns over weakening manufacturing and an inverted yield curve seemed to be resolved as the US Federal Reserve cut interest rates by 25 basis points and employment reached record low levels. High yield bonds benefited, showing modest coupon-driven gains. (A basis point equals one hundredth of a percentage point.)
The positive news ended abruptly in February amid reports that a novel coronavirus was spreading widely outside of China. Over the ensuing four weeks, large swaths of the domestic economy were shuttered. Some high yield bond prices plunged by 20% or more, and spreads widened to nearly 1,100 basis points over Treasurys. In late March, both Congress and the Fed stepped in with unprecedented amounts of monetary and fiscal relief for an economy in need of life support. Markets responded as intended, and the pandemic-induced selloff in virtually all risk assets abated almost as abruptly as it
had begun.
As part of its monetary rescue package, the Fed pledged to be an available lender as a last resort for certain investors in
sub-investment-grade credit. This was unprecedented, and some investors interpreted it as a promise to potentially backstop the entire sector, if needed. As the economy reopened during the summer, high yield spreads fell by roughly 550 basis points to stand a mere 100 basis points above their pre-coronavirus level seen in January.
In part, the rally in high yield was powered by inflows of $35 billion, the vast majority of which occurred after the government’s economic resuscitation efforts in March. Notably, some of the ensuing demand for BB-rated securities originated from investors not generally considered buyers of high yield. We were not surprised, considering that the yields on Treasurys, the traditional flight-to-quality instruments, were 0.11% (3-month), 0.17% (1-year), and 0.70%
(10-year) on March 31, 2020. At these levels, the relatively sound fundamentals of companies in the top tier of the high yield universe seemed to represent favorable value for investors. Issuing companies also benefited as low rates and tightening spreads encouraged them to build cash reserves and refinance existing debt.
The volatile environment for financial assets sparked sudden shifts in leadership among the various credit tiers of the high yield market. During the selloff that began in February, BB-rated debt outperformed, and during the risk-on rally in June and August,
CCC-rated bonds led the rebound. As the fiscal year ended,
however, leadership reverted to BB-rated names as investors anticipated a long, slow, and possibly incomplete recovery from the pandemic recession.
Among industry groups, energy – which represents about 10% of the high yield universe – was a major laggard. A price war between Russia and Saudi Arabia dovetailed with the catastrophic collapse in worldwide demand to produce a precipitous drop in oil prices that pressured highly leveraged producers. Predictably, COVID-19 also affected industries such as gaming, restaurants, and airlines, which underperformed. Although often viewed as a safe haven, the broadcasting sector also lagged amid concerns about valuations and
 
    17

Portfolio management reviews
Delaware Fund for Income 
advertising revenue. Outperforming groups included technology, which rode a powerful wave of investor interest in companies deemed well-adapted to a stay-at-home economy, and traditional defensive sectors such as healthcare, financials, and utilities.
Source: Bloomberg.
Within the Fund
For the fiscal year ended September 30, 2020, Delaware Fund for Income outperformed its benchmark, the ICE BofA US High Yield Constrained Index. The Fund’s Institutional Class shares gained 3.20%. The Fund’s Class A shares advanced 2.95% at net asset value and declined 1.08% at maximum offer price. These figures reflect all distributions reinvested. During the same period, the Fund’s benchmark gained 2.22%. For complete, annualized performance of Delaware Fund for Income, please see the table on page 69.
Following is a discussion about performance during the period from October 7, 2019 (when DMC began serving as the investment manager for the Fund) to September 30, 2020.
The Fund’s portfolio retained an overweight to defensive sectors versus the benchmark during much of the fiscal year. This reflected our fundamentally driven approach to risk taking and our ability to make what we viewed as an opportunistic move in response to modestly extended valuations in many sectors of the high yield market. As the pandemic gripped investor sentiment in March, we sold select names that we deemed to be particularly vulnerable to economic fallout from COVID-related changes in consumer demand. Those liquidations temporarily raised the Fund’s cash position to about 6% of assets, an unusually high allocation for the Fund.
Counterintuitively, the securities the market liquidated in the early stages of the pandemic were in the higher-quality segment of the market; lower-rated credits became virtually untradable at anything other than fire-sale prices. However, after the Fed injected liquidity into the financial system in late March, we deployed the excess cash into bonds that we believed were targets of liquidity-based selling. This tactic played out favorably for the Fund over the remainder of the fiscal year. In effect, the Fund’s cash positioning allowed us the luxury of buying when others were selling and selling when others were buying.
At the sector level, the Fund’s allocations to telecommunications and energy companies outperformed the benchmark because of strong security selection within the telecommunications sector and an underweight within the energy sector. Conversely, the Fund’s
positions within the basic industry sector detracted from performance due to credit selection within the chemicals subsector and an underweight to the homebuilders subsector.
Among individual holdings, BMC Software Inc. and Sprint Corp. contributed to outperformance. Each company continued to exhibit a solid credit profile even in the face of a fast-weakening economy. These companies enjoyed the additional benefit of operating in defensive sectors of the high yield market (technology and telecommunications, respectively), which are preferred by
risk-averse investors. The Fund’s position in mining company
Freeport-McMoRan Inc. also outperformed on soaring gold and
copper prices.
The Fund’s positions in energy-related businesses Transocean Ltd., Oasis Petroleum Inc., and Chesapeake Energy Corp. detracted from relative performance. As noted previously, the steep drop in crude oil prices earlier in the calendar year affected the balance sheets of many lower-quality, highly leveraged companies in the oil and gas industry. We exited all three positions during the fiscal year.
As the next fiscal year begins, the Fund is conservatively positioned with an overweight to BB-rated bonds – the top credit rung of high yield bonds. We also maintain a slight overweight to CCC-rated debt. Significantly, the bulk of that allocation is to four insurance/broker companies in the financial sector that our internal research suggests could more appropriately be B-rated. Absent those names, the Fund is underweight the CCC-rated segment of the market, as well as the B-rated group.
However ambiguous the economic outlook may seem, we will continue to build the Fund’s portfolio based on bottom-up (bond by bond), company-level credit research, which we believe is particularly well suited to current market conditions.
*On April 6, 2019, Foresters Investment Management Company, Inc. (FIMCO), the investment adviser to the First Investors Funds, entered into an agreement with Macquarie Management Holdings, Inc. (MMHI), whereby MMHI, on behalf of its affiliate DMC, would acquire FIMCO’s asset management business (the “Transaction”). In connection with the Transaction, the Board of Trustees of the First Investors Trusts and the First Investors Fund shareholders approved, pursuant to an Agreement and Plan of Reorganization
(the “Agreement”), the transfer of all assets and liabilities of each First Investors Fund to a corresponding, newly formed fund in the Delaware Funds® by Macquarie family of funds. The Transaction closed on October 4, 2019.
 
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Portfolio management reviews
Delaware Government Cash Management Fund
October 13, 2020 (Unaudited)
Performance preview (for the year ended September 30, 2020)
Delaware Government Cash Management Fund (Class A shares)1-year return+0.51%
ICE BofA US 3-Month Treasury Bill Index (benchmark)1-year return+1.10%
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Government Cash Management Fund, please see the table on page 73.
The performance of Class A shares excludes the applicable sales charge. Class A shares reflect the reinvestment of all distributions.
Please see page 74 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 objective
The Fund seeks to earn current income consistent with the preservation of capital and maintenance of liquidity.
Effective after the close of business on October 4, 2019, Delaware Management Company (DMC or Manager), a series of Macquarie Investment Management Business Trust (MIMBT), serves as the investment manager for the Fund.* During the period after the close of business on October 4, 2019, the Manager repositioned the Fund’s portfolio in accordance with the Fund’s investment objective and principal investment strategies, as described in the prospectus. The investment objective is the same and its principal investment strategies are the same or similar to those of the corresponding First Investors Fund.
On May 20, 2020, the Board of Trustees unanimously voted and approved a proposal to liquidate and dissolve Delaware Government Cash Management Fund (the Fund). The liquidation and dissolution are expected to take effect on or about December 4, 2020. The Fund closed to new investors and all sales efforts ceased as of the close of business on Thursday, July 2, 2020. However, the Fund will continue to accept purchases from existing shareholders (including reinvested dividends or capital gains) until close of business Wednesday, December 2, 2020. Until the liquidation, shareholders of the Fund will have the opportunity to exchange their shares for shares of the same class of any other Delaware Funds® by Macquarie fund. Any exchange would be made at the current net asset value of the Fund and the selected Delaware Fund. The Fund’s shareholders would not incur front-end or contingent deferred sales charges upon these exchanges as the funds do not typically carry loads or sales charges.
During the latter half of the Fund’s fiscal year ended
September 30, 2020, the emergence of the coronavirus pandemic unsettled investors and markets, inducing the US Federal Reserve to create a zero interest rate environment to support the economy and capital markets.
Beginning in March, the virus caused an unprecedented global crisis that demanded timely, aggressive, and creative fiscal and monetary responses to provide economic stimulus and support for individuals, businesses, and the capital markets. The Fed stepped in with several
financing and stimulus initiatives, providing liquidity for financial assets across capital markets, including money markets, corporate bonds, and mortgage-backed securities.
The rate on the 6-month US Treasury bill fell from 1.70% in
October 2019 to 0.10% on September 30, 2020, a 1.60-percentage-point compression of yield during the fiscal year. That reflected the Fed’s rate cuts of 0.25 percentage points in October 2019 and then, in March amid the market dislocation, two sharp cuts totaling 1.50 percentage points that helped restore investor confidence. In addition, the US government provided several fiscal-stimulus packages, including the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in late March.
Source: Bloomberg.
Within the Fund
For the fiscal year ended September 30, 2020, Delaware Government Cash Management Fund underperformed its benchmark, the ICE BofA US 3-Month Treasury Bill Index. The Fund’s Class A shares gained 0.51% at net asset value (reflects all distributions reinvested). During the same period, the benchmark advanced 1.10%. For complete, annualized performance of Delaware Government Cash Management Fund, please see the table on page 73.
Following is a discussion about performance during the period from October 7, 2019 (when DMC began serving as the investment manager for the Fund) to September 30, 2020.
The Fund’s primary goal is to protect principal and provide liquidity to shareholders. Throughout the period, the Fund’s portfolio managers acted to help ensure liquidity for shareholders and prevent disruption. That priority is a critical factor when comparing the Fund's returns with its benchmark.
The biggest difference between the Fund and its benchmark was duration. While the benchmark had a duration of about six months, we shortened the Fund’s duration to 0.04 years (essentially two weeks) during this critical period to help ensure liquidity was at a premium and acceptable for the Fund’s shareholders.
 
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Portfolio management reviews
Delaware Government Cash Management Fund 
Being short duration was a detriment to the Fund’s performance given the significant movement in spreads on the short end of the yield curve, but again, we believed the trade-off was appropriate to help ensure high liquidity for the Fund’s shareholders.
The Fund was short duration even before March, when liquidity became particularly critical. Typically, toward the end of the calendar year, liquidity can grow tight given balance-sheet constraints and banks’ reluctance to lend over year end. For this reason, we tend to shorten duration toward the end of the year, and we did so in late 2019. Early in 2020, once it became clear to us that there would be some market disruption, we had little reason to lengthen or alter the Fund’s short-duration profile. Accordingly, we remained very conservative and defensive with the Fund’s duration positioning in January and February.
The Fund was able to provide a high level of liquidity in case of drawdowns, which many mutual funds experienced in March and April. As it happened, the Fund had minimal redemptions. It also helped that the Fund has a portfolio of high-quality, government-only money market instruments.
In retrospect, we were more cautious or defensive concerning liquidity than the Fund’s investors may have required. But we believed it was prudent to be prepared for drawdowns.
The Fund is composed of three main asset types: US government agency securities, variable- and floating-rate notes, and short-term
government bonds. The Fund’s use of very short cash-surrogate agency discount notes, typically with a one-month maturity, had the largest effect on the Fund’s performance during the fiscal year. The next largest group of assets was very short-duration Treasury bills, and some US agency debentures.
Looking at the Fund’s relative performance versus its benchmark, the overriding factor was the Fund’s short-duration position. The benchmark’s 0.5 year duration benefited from the compression of yield spreads to a greater extent than the Fund’s much shorter 0.04 year duration. Because of this difference, the Fund missed out on the price appreciation of the benchmark, earning income only.
*On April 6, 2019, Foresters Investment Management Company, Inc. (FIMCO), the investment adviser to the First Investors Funds, entered into an agreement with Macquarie Management Holdings, Inc. (MMHI), whereby MMHI, on behalf of its affiliate DMC, would acquire FIMCO’s asset management business (the “Transaction”). In connection with the Transaction, the Board of Trustees of the First Investors Trusts and the First Investors Fund shareholders approved, pursuant to an Agreement and Plan of Reorganization
(the “Agreement”), the transfer of all assets and liabilities of each First Investors Fund to a corresponding, newly formed fund in the Delaware Funds® by Macquarie family of funds. The Transaction closed on October 4, 2019.
 
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Portfolio management reviews
Delaware International Opportunities Bond Fund
October 13, 2020 (Unaudited)
Performance preview (for the year ended September 30, 2020)
Delaware International Opportunities Bond Fund (Institutional Class shares)1-year return+3.65%
Delaware International Opportunities Bond Fund (Class A shares)1-year return+3.39%
J.P. Morgan Government Bond Index (GBI) Broad ex-US Index (primary benchmark)1-year return+5.44%
FTSE World Government Bond Index ex-US (secondary benchmark)1-year return+5.60%
Past performance does not guarantee future results.
For complete, annualized performance for Delaware International Opportunities Bond Fund, please see the table on page 75.
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. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
Please see page 78 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 objective
The Fund seeks total return consisting of income and capital appreciation.
Effective after the close of business on October 4, 2019, Delaware Management Company (DMC or Manager), a series of Macquarie Investment Management Business Trust (MIMBT), serves as the investment manager for the Fund.* During the period after the close of business on October 4, 2019, the Manager repositioned the Fund’s portfolio in accordance with the Fund’s investment objective and principal investment strategies, as described in the prospectus. The investment objective is the same and its principal investment strategies are the same or similar to those of the corresponding First Investors Fund.
Market review
Tepid global growth and dovish central bank policy marked the fourth calendar quarter of 2019. The US Federal Reserve implemented a third and final rate cut in its midcycle adjustment, and Fed Chair Jerome Powell tried to paint a picture of the US economy as a glass “more than half full.” There was a changing of the guard at the European Central Bank (ECB), as President Mario Draghi stepped down after eight years and was replaced by Christine Lagarde, who indicated that monetary policy would undergo a strategic review. In December, the United States and China announced a Phase 1 trade deal, which also buoyed investor enthusiasm. Risk assets reacted as expected and generally performed well into 2020.
The economic backdrop shifted sharply in March when it became clear that COVID-19, which had first emerged in China, had become a full-fledged global pandemic, necessitating strong lockdown measures to control the spread of the virus. Developed market central banks responded to the economic weakness generated by the lockdown measures by cutting rates, implementing or expanding quantitative easing (QE) measures, or both. As central banks provided
liquidity, risk sentiment became broadly positive, and the US dollar moved lower against G10 currencies.
Source: Bloomberg.
Within the Fund
For the fiscal year ended September 30, 2020, Delaware International Opportunities Bond Fund underperformed its primary benchmark, the J.P. Morgan Government Bond Index (GBI) Broad ex-US, and its secondary benchmark, the FTSE World Government Bond ex-US Index. The Fund’s Institutional Class shares gained 3.65%. The Fund’s Class A shares advanced 3.39% at net asset value and declined 0.78% at maximum offer price (both figures reflect all distributions reinvested). For the same period, the Fund’s primary and secondary benchmarks gained 5.44% and 5.60%, respectively. For complete, annualized performance of Delaware International Opportunities Bond Fund, please see the table on page 75.
Following is a discussion about performance during the period from October 7, 2019 (when DMC began serving as the Fund’s investment manager) to September 30, 2020.
Given the interest rate cuts by the Fed and the Reserve Bank of Australia, the Fund was overweight duration entering 2020. Developed market central banks were generally expected to remain on hold through 2020 with the hope that the US-China trade deal would help economies repair the cracks that had appeared in 2019. The Fund was overweight duration in Canada, which was seeing a slowdown in its jobs market; the United Kingdom, where Purchasing Managers’ Indices indicated that the economy was contracting; and Europe, specifically Germany. The Fund was also overweight the euro, Japanese yen, British pound, and Mexican peso.
As risk markets sold off in reaction to the effects of the coronavirus and the global economy dramatically slowed down, developed market yields fell as global central banks cut rates and implemented or increased QE programs. March saw volatility in which “safe haven” currencies such as the US dollar and Japanese yen
 
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Portfolio management reviews
Delaware International Opportunities Bond Fund 
outperformed currencies considered more “risk on,” such as the Mexican peso, Australian dollar, and Canadian dollar. By the time summer had ended and economies slowly began to reopen, the US dollar moved lower, which benefited the Fund’s overall performance. Although exposure to Japanese 30-year bonds detracted from the Fund’s performance, we maintained the Fund’s exposure, since we believe this holding should benefit from low inflation and weak Japanese economics.
The Fund’s underweight to Italian government debt detracted from performance. We continue to maintain the underweight to Italy, however, and prefer to carry an overweight to Germany and Spain. The Fund was long US Treasurys, an out-of-benchmark allocation, which took away from performance. We exited these positions during the fiscal year and opportunistically added exposure across developed markets.
The Fund was overweight the euro, which contributed to performance as the currency appreciated versus the US dollar. The Fund’s overweight in Canadian duration added to performance as Canadian yields fell during the fiscal year.
Looking at the COVID-19 crisis, we think that even if a vaccine came to the market tomorrow, and business returned to some semblance of normalcy, central banks around the world would have to successfully navigate a policy reversal without experiencing a policy misstep. As a result, we continue to take a prudent investment approach by evaluating investment opportunities with the goal of
identifying investments that we believe can perform through the uncertainties of today’s macroeconomic environment.
A note about derivatives
The Fund used three types of derivatives during the fiscal year: futures, foreign currency exchange contracts, and options on futures. The Fund used interest rate futures to manage the portfolio’s overall duration. The Fund also used foreign currency exchange contracts to hedge certain foreign currency securities. In some cases, the Fund used foreign currency exchange contracts to gain market exposure to take advantage of a total return opportunity. Derivatives did not have a material effect on the Fund's performance during the fiscal year (that is, more than 0.50 percentage points).
*On April 6, 2019, Foresters Investment Management Company, Inc. (FIMCO), the investment adviser to the First Investors Funds, entered into an agreement with Macquarie Management Holdings, Inc. (MMHI), whereby MMHI, on behalf of its affiliate DMC, would acquire FIMCO’s asset management business (the “Transaction”). In connection with the Transaction, the Board of Trustees of the First Investors Trusts and the First Investors Fund shareholders approved, pursuant to an Agreement and Plan of Reorganization
(the “Agreement”), the transfer of all assets and liabilities of each First Investors Fund to a corresponding, newly formed fund in the Delaware Funds® by Macquarie family of funds. The Transaction closed on October 4, 2019.
 
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Portfolio management reviews
Delaware Investment Grade Fund
October 13, 2020 (Unaudited)
Performance preview (for the year ended September 30, 2020)
Delaware Investment Grade Fund (Institutional Class shares)1-year return+8.02%
Delaware Investment Grade Fund (Class A shares)1-year return+7.74%
Bloomberg Barclays US Corporate Investment Grade Index (benchmark)1-year return+7.90%
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Investment Grade Fund, please see the table on page 79.
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. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
Please see page 82 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 objective
The Fund seeks to generate a maximum level of income consistent with investment in primarily investment grade debt securities.
Effective after the close of business on October 4, 2019, Delaware Management Company (DMC or Manager), a series of Macquarie Investment Management Business Trust (MIMBT), serves as the investment manager for the Fund.* During the period after the close of business on October 4, 2019, the Manager repositioned the Fund’s portfolio in accordance with the Fund’s investment objective and principal investment strategies, as described in the prospectus. The investment objective is the same and its principal investment strategies are the same or similar to those of the corresponding First Investors Fund.
Market review
Through early February 2020, global risk markets enjoyed a tailwind generated by declining interest rates and the de-escalation of trade tension as the United States and China reached a Phase 1 agreement. Later in February and into March, an oil-market meltdown and a pandemic-induced economic shutdown combined to wreak havoc with the global economy and markets. Then the US Federal Reserve and other central banks quickly stepped in to provide unprecedented levels of liquidity, mated with government-backed fiscal stimulus, propelling markets back to pre-pandemic levels.
Investors responded favorably to Fed rate cuts in July, September, and October 2019, but their exuberance ended abruptly in the third week of February, when they realized that the coronavirus posed significant risks to global health and economies. Credit and equity markets sold off precipitously, with the S&P 500® Index shedding more than 30% in just one month. And as if one global crisis wasn’t enough, in early March, midway through the selloff, Russia and Saudi Arabia began an oil-price war that sent energy markets reeling.
This perfect storm came just a week before the US shut down much of its economic activity to control the pandemic. The effect on the US economy was devastating, and the US government’s response was
immediate, cutting interest rates, and providing trillions of dollars in both monetary and fiscal stimulus.
Demand for corporate credit was strong prior to the pandemic, driven primarily by domestic investors looking for yield. Although that demand evaporated during the selloff, it came back sharply when the Fed intervened and was met with heavy supply. Seemingly every company that could do so took advantage of these market technical trends (supply-demand imbalance) to issue new debt. While the pace of new issues may ease, through September the heavy flow of new corporate credits was well received by investors.
Sources: Bloomberg, Bank of America.
Within the Fund
For the fiscal year ended September 30, 2020, Delaware Investment Grade Fund outperformed its benchmark, the Bloomberg Barclays US Corporate Investment Grade Index. The Fund’s Institutional Class shares gained 8.02%. The Fund’s Class A shares advanced 7.74% at net asset value and 3.46% at maximum offer price over same period. These figures reflect all distributions reinvested. During the same period, the benchmark gained 7.90%. For complete, annualized performance of Delaware Investment Grade Fund, please see the table on page 79.
Following is a discussion about performance during the period from October 7, 2019 (when DMC began serving as the investment manager for the Fund) to September 30, 2020.
As prices compressed during the pandemic-induced selloff, several of the Fund’s holdings, particularly in the energy sector, lost their investment grade rating and became "fallen angels" (bonds that had an investment-grade rating but have been reduced to junk bond status due to the issuer's weakened conditions). We held on to several of the Fund’s holdings from survivor-type companies whose bonds had plunged into the 50 cents on the dollar range. Over the course of the next few weeks, we sold those bonds in the $75 to low-$90 range, enabling us to restore some of the Fund’s value.
 
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Portfolio management reviews
Delaware Investment Grade Fund 
We positioned the Fund with an overweight position in BBB-rated credits, which was an advantageous call during 2019 and remained so through 2020. Unfortunately, that exacerbated the Fund’s underperformance in the first quarter, given that any holdings not of the highest quality significantly detracted from performance. As the selloff progressed, we trimmed the Fund’s overweight to BBB-rated securities, placing the proceeds into cash and Treasurys.
The Fund’s exposure to high yield bonds, roughly one-third of its allowed allocation, was mostly in BB-rated securities, mainly subordinated financials, or more defensive BB-rated issuers. That out-of-index exposure impaired performance in the first quarter of 2020, which resulted in a drag over the entire fiscal period. Currently, however, we remain comfortable seeking outperformance in that market segment.
Within communications, Verizon Communications Inc. and Vodafone Group PLC were standout contributors, both focusing on delevering and improving their balance sheets. In fact, Verizon was among the first issuers to come back to the market after the selloff. Its business is very defensive in an environment where wireless communications are critical. Additionally, we believe its high-quality network differentiates its service from that of its peers. We found Vodafone attractive given our belief that it was undervalued, flush with liquidity, and committed to paying down debt.
Even though the energy sector was highly distressed in the first quarter of 2020, our credit selection was favorable. The Fund owned Noble Energy Inc., an independent oil and natural gas exploration company. The company announced in July that Chevron Corp. will acquire it later this year – a case of an AA-rated issuer acquiring a BBB-rated issuer. Noble Energy's bonds performed well as a result and significantly contributed to the Fund’s performance. One notable detractor in energy was Occidental Petroleum Corp., which bought Anadarko Petroleum Corp. in August 2019. Occidental took on significant debt at the wrong time, and when energy prices and demand collapsed, the rating agencies struck quickly.
Electric utilities, which are generally a defensive and longer duration sector that benefits when interest rates are falling, also contributed to the Fund’s performance during the period. While demand softened overall, in this environment we saw an increase in the residential market, where earnings did not decline as much as other markets. We believed utilities offered value for a relatively defensive sector, and we found issuers that we viewed as attractive given the backdrop.
The basic materials, noncyclicals, and banking sectors detracted the most from the Fund's performance during the fiscal period. Within basic materials, the Fund owned TeckResources Ltd., a BBB-minus
rated credit that had been on the path to fundamental improvement prior to the selloff. The economic shutdown severely affected its iron ore mining business, and we exited the position. The Fund also owned BHP Billiton Finance (USA) Ltd., another iron-ore producer, and this hybrid security was hurt as spreads widened.
The Fund’s allocation to finance companies (in particular, aircraft lessors) was a drag on performance due to the industry’s relationship to COVID-19 and air travel. Despite the drawdown in the period, we continue to overweight this part of the market given what we consider to be attractive valuations. In noncyclicals, the Fund underperformed as a result of its large underweight to the sector. This is generally a defensive sector that does not offer investors much of a reward; however, the sector performed better than we had expected.
In banking, the Fund had invested in subordinated bonds, which are down in the capital structure (riskier), to try to capture some yield. These are not defensive investments, and they underperformed during the selloff. The Fund’s largest detractor in the sector was
BNP Paribas S.A., a French bank. We reduced our position during the downturn, failing to benefit from an ensuing rebound.
Toward fiscal year end, we added to the Fund’s overweight positioning in BB-rated credit. These securities carry a bit more yield than their investment grade counterparts and are in defensive sectors. The Fund began the period with no allocation to high yield and ended at 12%, with most of its allocation BB-rated. Given that the Fed moved in to limit downside risk, we have been more comfortable adding stable BB-rated issuers that offer incremental yield. Essentially, our allocation story remains the same, with an overweight to securities rated BBB and BB.
During the fiscal period, we made minimal use of US Treasury futures to adjust overall duration of the Fund. That exposure had no material impact on Fund performance.
*On April 6, 2019, Foresters Investment Management Company, Inc. (FIMCO), the investment adviser to the First Investors Funds, entered into an agreement with Macquarie Management Holdings, Inc. (MMHI), whereby MMHI, on behalf of its affiliate DMC, would acquire FIMCO’s asset management business (the “Transaction”). In connection with the Transaction, the Board of Trustees of the First Investors Trusts and the First Investors Fund shareholders approved, pursuant to an Agreement and Plan of Reorganization
(the “Agreement”), the transfer of all assets and liabilities of each First Investors Fund to a corresponding, newly formed fund in the Delaware Funds® by Macquarie family of funds. The Transaction closed on October 4, 2019.
 
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Portfolio management reviews
Delaware Limited Duration Bond Fund
October 13, 2020 (Unaudited)
Performance preview (for the year ended September 30, 2020)
Delaware Limited Duration Bond Fund (Institutional Class shares)1-year return+3.80%
Delaware Limited Duration Bond Fund (Class A shares)1-year return+3.56%
Bloomberg Barclays 1-3 Year US Government/Credit Index (benchmark)1-year return+3.73%
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Limited Duration Bond Fund, please see the table on page 83.
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. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
Please see page 85 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 objective
The Fund seeks current income consistent with low volatility
of principal.
Effective after the close of business on October 4, 2019, Delaware Management Company (DMC or Manager), a series of Macquarie Investment Management Business Trust (MIMBT), serves as the investment manager for the Fund.* During the period after the close of business on October 4, 2019, the Manager repositioned the Fund’s portfolio in accordance with the Fund’s investment objective and principal investment strategies, as described in the prospectus. The investment objective is the same and its principal investment strategies are the same or similar to those of the corresponding First Investors Fund.
Market review
The market’s journey during the Fund’s fiscal year ended September 30, 2020 can be broken down into phases:
Phase 1 – Jubilation (October 2019–February 2020); Phase 2 – Fear and Panic (March 2020); and Phase 3 – Rapid Relief (April 2020–
September 2020). As 2019 ended, economic data were strong and US markets received three Federal Reserve “insurance” interest rate cuts after the curve inverted earlier in the year. Although curve inversions have a very strong track record of preceding recessions, risk markets seemed determined to believe the Fed would ward off a potential recession as indicated by asset valuations that were rich relative to historic averages. And then the COVID-19 global pandemic commenced, and Phase 1 concluded.
The onslaught of Phase 2 was fervent as economies around the globe came to a halt. Risk assets sold off with ferocity and liquidity dried up quickly. Lessons learned from the global financial crisis, however, proved useful as the Fed devised even more potent remedies. This proved to be the beginning of the end for the Fear and Panic phase. Congress also provided much needed fiscal stimulus, with a $600 weekly unemployment extension and the Payroll Protection Program (PPP) to assist workers who were forced into
unemployment. Market liquidity was restored, Treasury rates stabilized, curves normalized, and asset valuations returned to within average ranges. And so, Phase 3 began and continues (although no longer so rapid) as we head into the fourth quarter of 2020.
Source: Bloomberg.
Within the Fund
For the fiscal year ended September 30, 2020, Delaware Limited Duration Bond Fund Institutional Class shares gained 3.80% and outperformed its benchmark, the Bloomberg Barclays 1-3 Year US Government/Credit Index, which advanced 3.73% for the same period. The Fund’s Class A shares underperformed the benchmark and advanced 3.56% at net asset value and 0.96% at maximum offer price over the same period. These figures reflect all distributions reinvested. During the same period, the benchmark gained 3.73%. For complete, annualized performance of Delaware Limited Duration Bond Fund, please see the table on page 83.
Following is a discussion about performance during the period from October 7, 2019 (when DMC began serving as the investment manager for the Fund) to September 30, 2020.
We began the Fund’s fiscal year with a cautious view partially based on the two points that follow: First, from a historical perspective, asset valuations offered relatively poor reward for the risk taken. Second, the Fed had raised rates enough times in recent years that the curve inversion forewarned potential danger ahead. Clearly, we had no premonition of a global pandemic, but unattractive valuations and a strong recessionary signal had us circumspect early in 2020.
Mindful of this, we reduced the risk budget for corporate credit in favor of Treasurys throughout January and February. The reduction in risk was not enough, however, to overcome the risk-off month of March, and the Fund’s return was not able to keep pace with its benchmark. Simply put, even very high-quality spread assets – AAA-rated asset-backed securities and agency mortgage-backed securities (MBS) – experienced weaker valuations arising from a liquidity squeeze, not an increase in credit risk. Only US Treasurys were the
 
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Portfolio management reviews
Delaware Limited Duration Bond Fund 
true safe-haven asset with meaningful price appreciation during March. As such, the barbell position in longer-than-benchmark Treasurys benefited the Fund’s performance and helped to offset a portion of the spread widening within the longer-than-benchmark corporate credit positions. However, the underweight to Treasurys, overweight to corporate credit, and out-of-benchmark holdings in short duration asset-backed securities (ABS) and agency MBS all detracted from performance during the first quarter of 2020.
These same high-quality assets, nonetheless, were the first to have valuations snap back and were then used as a source of cash to
re-risk back more heavily into corporate credit including a modest allocation to high yield. As such, the continued progress in spread tightening, exhibited in risk assets from the massive government support programs, has provided a strong resurgence in performance.
The Fund’s allocation to the energy sector detracted from performance. Two companies, Occidental Petroleum Corp. and Continental Resources Inc., underperformed their peers and both were downgraded to below investment grade. We have maintained positions in these companies, both of which have recovered meaningfully from their March lows.
Within financials, the Fund’s allocation to finance companies (specifically, aircraft lessors Avolon Holdings Corp. and International Lease Finance Corp.) was a drag on performance due to the industry’s relationship to COVID-19 and air travel. We remain overweight this part of the market given what we consider to be attractive valuations. The Fund’s allocation to banking benefited performance as banks came into this year defensively positioned based on their government regulation and extremely strong capital cushions. Morgan Stanley, Goldman Sachs Group Inc., and Citizens Financial Group Inc. were some of the strongest contributors and the Fund maintains its overweight to the sector.
Allocations to the media & entertainment and food & beverage sectors added to performance. Specifically, Fox Corp. and Anheuser-Busch InBev Worldwide Inc. generated strong returns
for the Fund. Fox’s results have been resilient during the pandemic and management conservatively suspended share buybacks in March to protect credit metrics. Anheuser-Busch InBev results, while lower year over year, proved to be more resilient than anticipated. The company also remains focused on debt reduction.
At the end of the Fund’s fiscal year, front-end Treasurys rates remain rooted at the Fed’s lower bound while corporate credit spreads are within their historical range. Given that the Fed has stepped in time and again to limit downside risk, we continue to prefer an overweight to corporate credit, particularly within the BBB-rated quality sector, although with a bias towards defensive industries.
The fiscal year was tumultuous to say the least. Markets and economies across the globe have experienced, and continue to effect, a vast array of outcomes. As of the end of the Fund’s fiscal year, valuations within fixed income risk markets implied a sense of normalcy. However, we are anything but close to a sense of normalcy. While spread levels are well within their historical average range at the end of the fiscal period, 10-year Treasury rates are about 100 basis points lower compared to the prior year. (A basis point equals one hundredth of a percentage point.) Economic data are weak, but improving, and we believe the bottom is likely behind us thanks to swift central bank monetary and government fiscal stimuli.
*On April 6, 2019, Foresters Investment Management Company, Inc. (FIMCO), the investment adviser to the First Investors Funds, entered into an agreement with Macquarie Management Holdings, Inc. (MMHI), whereby MMHI, on behalf of its affiliate DMC, would acquire FIMCO’s asset management business (the “Transaction”). In connection with the Transaction, the Board of Trustees of the First Investors Trusts and the First Investors Fund shareholders approved, pursuant to an Agreement and Plan of Reorganization
(the “Agreement”), the transfer of all assets and liabilities of each First Investors Fund to a corresponding, newly formed fund in the Delaware Funds® by Macquarie family of funds. The Transaction closed on October 4, 2019.
 
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Portfolio management reviews
Delaware Strategic Income II Fund
October 13, 2020 (Unaudited)
Performance preview (for the year ended September 30, 2020)
Delaware Strategic Income II Fund (Institutional Class shares)1-year return+5.06%
Delaware Strategic Income II Fund (Class A shares)1-year return+4.89%
Bloomberg Barclays US Aggregate Index (benchmark)1-year return+6.98%
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Strategic Income II Fund, please see the table on page 86.
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. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
Please see page 88 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 objective
The Fund seeks a high level of current income.
Effective after the close of business on October 4, 2019, Delaware Management Company (DMC or Manager), a series of Macquarie Investment Management Business Trust (MIMBT), serves as the investment manager for the Fund.* During the period after the close of business on October 4, 2019, the Manager repositioned the Fund’s portfolio in accordance with the Fund’s investment objective and principal investment strategies, as described in the prospectus. The investment objective is the same and its principal investment strategies are the same or similar to those of the corresponding First Investors Fund.
Market review
Just prior to the start of the Fund’s fiscal year, the US Federal Reserve cut interest rates for the first time since the global financial crisis of 2008-2009. After a series of rate hikes that began in 2015, the Fed responded to slowing global growth and an inversion of the Treasury yield curve with a reduction of 0.25 percentage points in the federal funds rate in July 2019, followed by two additional quarter-point cuts in September and October. Taken together, those reductions gave confidence to investors that the central bank would act to stabilize the economy. In December, the announcement of a Phase 1 trade deal with China also buoyed investor enthusiasm. Risk assets reacted as expected and generally performed well into 2020.
The economic backdrop shifted sharply in February and March when it became clear that COVID-19, which first emerged in China, had become a full-fledged global pandemic necessitating strong lockdown measures to control its spread. The ensuing precipitous global market selloff was short-lived, however, as the Fed and other central banks stepped in to provide liquidity. Investors responded by igniting a rally that continued through the end of the Fund’s fiscal period.
Source: Bloomberg.
Within the Fund
For the fiscal year ended September 30, 2020, Delaware Strategic Income II Fund underperformed its benchmark, the Bloomberg Barclays US Aggregate Index. The Fund’s Institutional Class shares gained 5.06%. The Fund’s Class A shares advanced 4.89% at net asset value and 0.68% at maximum offer price (both figures reflect all distributions reinvested). For the same period, the benchmark gained 6.98%. For complete, annualized performance of Delaware Strategic Income II Fund, please see the table on page 86.
Following is a discussion about performance during the period from October 7, 2019 (when DMC began serving as the investment manager for the Fund) to September 30, 2020.
Early in the period, as investors gained confidence and risk premiums across fixed income compressed, we increased the Fund’s overall quality by shifting assets away from higher-beta (higher-risk) sectors. We thought we would have a more attractive entry point in 2020 and we were comfortable carrying US Treasury and agency mortgage-backed securities (MBS) in the Fund at year end.
But when markets sold off and the economy dramatically slowed in reaction to the coronavirus, the Fund significantly underperformed, hurt by the allocation of roughly 33% of assets to corporate credit – both high yield and investment grade – and nearly 20% to emerging market bonds. However, when the monetary and fiscal tide turned positive in late March, higher-beta sectors rallied and the Fund’s relative performance improved significantly, compared to both its peers and the benchmark. As market pricing dislocations expanded in the early spring, we drew down the Fund’s capital cushion, redeploying the proceeds into higher-yielding assets.
Overall, the Fund underperformed its benchmark largely because the 12-month period was unfavorable for focusing on the out-of-benchmark sectors that strategic funds typically hold. The major detractors from the Fund’s relative performance at the sector level were high yield bonds, including bank loans, and emerging market bonds.
 
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Portfolio management reviews
Delaware Strategic Income II Fund 
A small exposure to a senior unsecured convertible bond in Cheniere Energy Inc. detracted from the performance. Despite this, the Fund still has exposure to that credit, as we believe the company is striking an attractive mix of debt reduction and shareholder return with a healthy liquidity profile.
Exposure to the energy sector, overall, weighed on the Fund’s performance as the entire sector underperformed. Our goal therefore was to make sure that we had strong selection within energy sector credits, seeking what we viewed as the most robust companies. Within investment grade midstream, Energy Transfer Operating LP detracted from performance during the fiscal year. However, we view the investment as an undervalued position and reman comfortable that management is addressing the challenging operating environment.
Movie theater chain AMC Entertainment Holdings Inc. also detracted from the Fund’s performance. We did exit this position, as we see further challenges ahead for the issuer. Offsetting this performance somewhat was an investment in Calpine Corp., the largest US generator of electricity from natural gas and geothermal resources.
Emerging market bonds also reduced the Fund’s performance. Mexican airline company Aerovias de Mexico SA de CV, severely affected by pandemic-related travel restrictions, filed for Chapter 11 restructuring during the second quarter of 2020. However, we maintained the Fund’s exposure while we seek greater clarity about management’s plans.
An underweight to investment grade corporate credit aided the Fund’s relative performance. In addition to the Fund’s underweight, the market volatility presented investment opportunities in companies that aggressively sought liquidity, such as Delta Air Lines Inc. first lien bonds, issued in April 2020.
Our allocation to non-agency residential MBS, an out-of-benchmark sector, experienced high volatility and detracted from the Fund’s relative performance. Yield-curve management and duration management also lessened performance. We maintain a material duration that is short relative to the benchmark. The Fund does, however, carry more duration than its peer group, which proved beneficial.
We believe it is worth noting that the Fund had strong performance relative to its peer group in a particularly challenging environment,
placing in Morningstar’s top quartile for the 12-month period. The Fund benefited by putting the capital cushion it built at the end of 2019 to work in the spring when opportunities arose. Leveraging that cushion provided liquidity during a volatile period.
Given the uncertain economic backdrop, we believe that risks remain elevated. Strong central bank policy responses in the United States and globally have helped boost investor confidence. At the end of the Fund’s fiscal year, we remain concerned about the upcoming election, geopolitical tensions, and the risks of policy mistakes, particularly on the fiscal side.
Regarding the pandemic, we think that even if a vaccine came to market tomorrow and business returned to some semblance of normalcy, global central banks would still have to navigate a policy reversal without experiencing a misstep. We continue to take a prudent investment approach by evaluating investment opportunities. Our goal is to identify companies with management teams that have exhibited the discipline to execute through the uncertainties of today’s macroeconomic environment.
A note about derivatives
The Fund used two types of derivatives during the fiscal year: futures and foreign currency exchange contracts. The Fund used interest rate futures to manage the portfolio’s overall duration. The Fund also used foreign currency exchange contracts to hedge the US dollar value of certain foreign currency securities. In some cases, the Fund used foreign currency exchange contracts to gain market exposure to take advantage of a total return opportunity. None of these derivatives had a material effect on the Fund’s performance (that is, it amounted to less than 50 basis points) during the fiscal year.
*On April 6, 2019, Foresters Investment Management Company, Inc. (FIMCO), the investment adviser to the First Investors Funds, entered into an agreement with Macquarie Management Holdings, Inc. (MMHI), whereby MMHI, on behalf of its affiliate DMC, would acquire FIMCO’s asset management business (the “Transaction”). In connection with the Transaction, the Board of Trustees of the First Investors Trusts and the First Investors Fund shareholders approved, pursuant to an Agreement and Plan of Reorganization
(the “Agreement”), the transfer of all assets and liabilities of each First Investors Fund to a corresponding, newly formed fund in the Delaware Funds® by Macquarie family of funds. The Transaction closed on October 4, 2019.
 
28    

Portfolio management reviews
Delaware Covered Call Strategy Fund
October 13, 2020 (Unaudited)
Performance preview (for the year ended September 30, 2020)
Delaware Covered Call Strategy Fund (Institutional Class shares)1-year return-5.54%
Delaware Covered Call Strategy Fund (Class A shares)1-year return-5.75%
CBOE S&P 500 BuyWrite Index (benchmark)1-year return-5.66%
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Covered Call Strategy Fund, please see the table on page 89.
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. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
Please see page 91 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 objective
The Fund seeks long-term capital appreciation.
On April 6, 2019, Foresters Investment Management Company, Inc. (FIMCO), the investment adviser to the First Investors Funds, entered into an agreement with Macquarie Management Holdings, Inc. (MMHI), whereby MMHI, on behalf of its affiliate Delaware Management Company (DMC), a series of Macquarie Investment Management Business Trust (MIMBT), would acquire FIMCO’s asset management business (the “Transaction”). In connection with the Transaction, the Board of Trustees of the First Investors Trusts and the First Investors Fund shareholders approved, pursuant to an Agreement and Plan of Reorganization (the “Agreement”), the transfer of all assets and liabilities of each First Investors Fund to a corresponding, newly formed fund in the Delaware Funds® by Macquarie family of funds. The Transaction closed on
October 4, 2019.
Ziegler Capital Management, LLC (ZCM), a US registered investment advisor, is the sub-advisor to the Fund. As sub-advisor, ZCM is responsible for day-to-day management of the Fund's assets. DMC, a series of MIMBT, has ultimate responsibility for all investment advisory services.
Market review
Financial markets were on a roller coaster ride during the Fund’s fiscal year. Nonetheless, stocks and bonds produced strong returns for the period, with the S&P 500 Index advancing 15.15% and the Bloomberg Barclays US Aggregate Index gaining 6.98%.
Prior to the pandemic, positive momentum in both the economy and equity markets carried forward from late 2019 into the beginning of 2020. Then COVID-19 emerged. Economic activity slowed dramatically as shelter-in-place orders, quarantines, and fear of contracting the virus took hold. The S&P 500 Index fell 31.79%, posting the steepest 30-day decline of the postwar era. Second-quarter gross domestic product (GDP) posted the largest quarterly decline of the postwar period, falling 31.4%.
Central banks and governments around the world responded with dramatic easing in monetary and fiscal policy. In the United States, Congress quickly implemented an unprecedented amount of fiscal stimulus, amounting to double the total fiscal stimulus enacted during the global financial crisis of 2008-2009. In the span of three months, the Federal Reserve also provided more monetary stimulus (asset purchases) than the total provided during the first three years of the recession. Taken together, these programs provided $5 trillion worth of stimulus.
While the S&P 500 Index performed strongly, other areas of the market did not. For example, large-cap value stocks, as represented by the S&P 500 Value Index, returned -2.68% for the fiscal year, while large-cap growth stocks, as represented by the S&P 500
Growth Index, returned 30.64%, since momentum and growth stocks continued to dominate the market.
The Fund’s benchmark, the CBOE S&P 500 BuyWrite Index, also lagged the market for the fiscal year. Its underperformance could mainly be attributed to the at-the-money call options truncating upside participation during the strongest, fastest equity market rally in post-war history.
Source: Bloomberg.
Within the Fund
For the fiscal year ended September 30, 2020, Delaware Covered Call Strategy Fund Institutional Class shares narrowly outperformed the Fund’s benchmark, the CBOE S&P 500 BuyWrite Index, but Class A shares lagged. The Fund’s Institutional Class shares fell 5.54%. The Fund’s Class A shares dropped 5.75% at net asset value and 11.17% at maximum offer price (both figures reflect all distributions reinvested). For the same period, the benchmark declined 5.66%. For complete, annualized performance of Delaware Covered Call Strategy Fund, please see the table on page 89.
The call options in the Fund outperformed the call options in the benchmark by 1,116 basis points for the fiscal year, as the Fund’s active options strategy adapted to changing market conditions and
 
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Portfolio management reviews
Delaware Covered Call Strategy Fund 
took advantage of the heightened implied volatility levels. (A basis point equals one hundredth of a percentage point.) For example, the record-setting volatility spike during March allowed us to “lock-in” high call premiums on longer-term options, which gradually decayed during subsequent months. In contrast, the rules-based CBOE S&P 500 BuyWrite Index is limited to one-month options. The implied volatility spike also allowed us to sell further out-of-the-money options while maintaining attractive premiums, thus allowing for more upside participation when stocks rallied. The benchmark is limited to writing only at-the-money options. Lastly, the Fund’s single-stock call options tend to provide higher premiums than the benchmark’s options – a consistent feature of the Fund relative to the benchmark.
Because of their value tilt, the Fund’s holdings underperformed the stocks in the benchmark during the first six months of the fiscal year. The value tilt of the Fund’s portfolio was the largest detractor from the Fund’s performance for the fiscal year, although we neutralized most of the growth versus value stock risk in April. Since that time, the Fund’s stocks have modestly outperformed those in the benchmark. In terms of the stock-only attribution over the past year, an overweight to the information technology sector made the largest positive contribution to returns. An underweight to the defensive
sectors of utilities and real estate also contributed, as these sectors lagged the market. An overweighting to energy and industrials, which lagged the market, offset this, however. Stock selection was positive in financials but detracted from returns in industrials and healthcare.
Despite the strong stock market performance during the past
six months, implied volatility and option prices have remained elevated. As a result, we have continued the trend of writing medium to longer-term call options to “lock-in” the high implied volatility levels for longer. At the end of the fiscal year, the average expiration of the Fund’s call options was 2.6 months, versus the benchmark’s average expiration of only 0.6 months for its passively managed call options. Overall, as we manage the active option writing strategy in the Fund, we continue to closely monitor implied volatility opportunities that we think have the potential to add further excess return versus the benchmark’s rules-based index options. We continue to believe large-cap stocks should offer the best risk-reward potential, especially when combined with call premiums that could help stabilize returns and offer downside protection. We view pairing a growth stock portfolio with a covered call portfolio for stability as an opportune way to position equity exposure in the current
market environment.
 
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Portfolio management reviews
Delaware Hedged U.S. Equity Opportunities Fund
October 13, 2020 (Unaudited)
Performance preview (for the year ended September 30, 2020)
Delaware Hedged U.S. Equity Opportunities Fund (Institutional Class shares)1-year return+11.28%
Delaware Hedged U.S. Equity Opportunities Fund (Class A shares)1-year return+10.91%
Russell 3000® Index (primary benchmark)1-year return+15.01%
70% Russell 3000 / 30% ICE BofA US 3-Month Treasury Bill Index (secondary benchmark)1-year return+12.04%
ICE BofA US 3-Month Treasury Bill Index (secondary benchmark)1-year return+1.10%
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Hedged U.S. Equity Opportunities Fund, please see the table on page 93.
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. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
Please see page 95 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 objective
The Fund seeks total return and, secondarily, capital preservation.
On April 6, 2019, Foresters Investment Management Company, Inc. (FIMCO), the investment adviser to the First Investors Funds, entered into an agreement with Macquarie Management Holdings, Inc. (MMHI), whereby MMHI, on behalf of its affiliate Delaware Management Company (DMC), a series of Macquarie Investment Management Business Trust (MIMBT), would acquire FIMCO’s asset management business (the “Transaction”). In connection with the Transaction, the Board of Trustees of the First Investors Trusts and the First Investors Fund shareholders approved, pursuant to an Agreement and Plan of Reorganization (the “Agreement”), the transfer of all assets and liabilities of each First Investors Fund to a corresponding, newly formed fund in the Delaware Funds® by Macquarie family of funds. The Transaction closed on
October 4, 2019.
Wellington Management Company LLP (Wellington Management), a US registered investment advisor, is the sub-advisor to the Fund. As sub-advisor, Wellington Management Company LLP (Wellington Management) is responsible for day-to-day management of the Fund’s assets. Delaware Management Company (DMC), a series of Macquarie Investment Management Business Trust (MIMBT), has ultimate responsibility for all investment advisory services.
Market review
Although US equities posted a gain for the fiscal year ended September 30, 2020, the period was characterized by high market turbulence, driven by the coronavirus, trade sentiment, delayed stimulus, and the US presidential election.
Equities ended the first calendar quarter of 2020 sharply lower, as the coronavirus caused unprecedented societal and market disruptions. Both the US Federal Reserve and US government quickly stepped in to provide trillions of dollars of monetary and fiscal
stimulus, and equity markets rebounded. Substantial monetary support from the Fed continued to support markets in the third calendar quarter of 2020, and the Fed signaled that it expects to hold interest rates near zero until inflation is on track to moderately exceed 2%.
The US-China relationship was a key theme throughout the Fund’s fiscal year. Trade tensions eased in December 2019 after the US and China reached a Phase 1 trade agreement but were reignited in May 2020 following the rapid onset of the coronavirus, in part due to China’s plans to impose national security laws on Hong Kong and its mishandling of the coronavirus outbreak.
The presidential election injected additional uncertainty into the markets. Also clouding the path to economic recovery were a possible resurgence of the coronavirus, an undetermined timeline for vaccines, high unemployment, elevated debt burdens, and uncertainty about additional fiscal stimulus.
Source: Bloomberg.
Within the Fund
For the fiscal year ended September 30, 2020, Delaware Hedged U.S. Equity Opportunities Fund underperformed its primary benchmark, the Russell 3000 Index, and its secondary benchmark, a blend of 70% Russell 3000 Index and 30% ICE BofA US 3-Month Treasury Bill Index. The Fund outperformed its other secondary benchmark, ICE BofA US 3-Month Treasury Bill Index. The Fund’s Institutional Class shares gained 11.28%. The Fund’s Class A shares advanced 10.91% at net asset value and 4.57% at maximum offer price (both figures reflect all distributions reinvested). For the same period, the Russell 3000 Index gained 15.01%. The blend of 70% Russell 3000 Index / 30% ICE BofA US 3-Month Treasury Bill Index advanced 12.04%, and the ICE BofA US 3-Month Treasury Bill Index
 
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Portfolio management reviews
Delaware Hedged U.S. Equity Opportunities Fund 
gained 1.10%. For complete, annualized performance of Delaware Hedged U.S. Equity Opportunities Fund, please see the table on
page 93.
While the Fund’s equity strategy posted positive absolute returns, it underperformed the Russell 3000 Index for the fiscal year. Sector allocation – a residual of our bottom-up stock selection process – was the primary detractor from relative results. An underweight to information technology was detrimental as Internet software and services companies were protective when the market dropped and led the subsequent rally. However, an underweight allocation to energy and an overweight to consumer discretionary partially offset this. Weaker selection within consumer discretionary, particularly either not owning or selling leading names such as Amazon.com Inc. and Tesla Inc., also detracted from results. This was somewhat offset by our strong selection in the industrials sector.
Our decision not to hold benchmark constituent Exxon Mobil Corp. was the largest contributor to relative performance. Energy-related companies such as Exxon Mobil were adversely affected when Saudi Arabia and Russia failed to reach an agreement on oil production cuts. Shelter-in-place orders to limit the spread of the coronavirus also severely cut global demand. In addition, the company was removed from the Dow Jones Industrial Average, prompting further concern about the oil giant’s future.
An overweight position in information technology company Square Inc. contributed to Fund results. Square provides credit card payment-processing solutions. The stock price rose as Square’s Cash App business added its largest number of new customers in March. The company benefited as people began to use the app for fundraising, donations, and online tipping. Additionally, recipients deposited stimulus checks directly in the app, leading to the company’s highest-ever monthly direct-deposit volume in April. We believe long-term revenue and cash flow growth for Square will be stronger and longer than the market expects.
Our decision not to hold The Boeing Co. added to relative performance. Within industrials, Boeing is an aerospace company engaged in the manufacturing of commercial jet liners and defense, space, and security systems. The spread of the coronavirus had a large impact on the travel industry, particularly the airline industry, causing the stock to struggle.
The Fund’s underweight in Apple Inc. was the largest relative detractor during the fiscal year. Apple stock ended 2019 strongly as volume forecasts and better-than-expected revenues for the new iPhone led to solid quarterly results and forward guidance. Despite uncertainty surrounding the pandemic, shares of Apple continued to rise in the second and third quarters of 2020 as the company reported revenue increases year over year across all its business segments. The Fund continues to hold the stock, and we remain
positive on Apple’s long-term growth trajectory, especially in wearables and services.
The Fund’s underweight position in Microsoft Corp. also detracted from results, as Microsoft continued to benefit from the remote work and stay-at-home orders. During the Fund’s fiscal year, it announced acquisitions of ADRM Software Inc., a provider of large-scale industry data models, and CyberX Inc., an Internet-of-Things (IoT) security provider. We continued to hold an underweight position in the stock at fiscal year-end.
In consumer discretionary, our decision to underweight Tesla took away from results. Shares of the electric-vehicle manufacturer moved higher after the company reported its fourth consecutive quarter of profitability. Given its market cap, many investors viewed this as the last hurdle toward Tesla’s inclusion in the S&P 500 Index; however, the stock was not added to the index, and shares dipped on the news. We eliminated the Fund’s position during the fiscal year, seeking opportunities that we believed provide better
risk-return profiles.
The Fund’s hedging strategy was beneficial during the March coronavirus-led drawdown but detracted from results over the full 12-month period. The beta hedge, designed to reduce the Fund’s equity exposure by selling futures on US indices, became a headwind when markets rallied sharply following the March selloff. The Fund’s tail risk management strategy, designed to mitigate capital losses in periods when equities experience a sharp decline, was broadly neutral, as it contributed significantly during the markets’ decline, but detracted from results when markets rallied.
In this environment, we sought for the Fund to be as balanced as possible across risk factors, to avoid being whipsawed by the daily news flow. The Fund’s positioning is biased toward a more defensive stance, rather than a cyclical stance, given what we view as the long-term risks for global markets and the economy, and we have reduced the Fund’s underweight exposure to mega-cap technology names.
Macroeconomic uncertainty remains at the forefront. Although US equity markets have continued to rebound, a second wave of coronavirus infections appears to be unfolding. We believe that the range of potential economic outcomes is broad, and that current investor exuberance may not be long-lasting. Against this backdrop, we remain vigilant in balancing factor exposures in the Fund’s portfolio to help reduce the effect of factor volatility and ensure that security selection drives results.
 
32    

The Fund used the following derivatives during the fiscal year:
InstrumentEnding allocationPerformance effect
Futures-18% (notional exposure)Negative
Options-5% (notional exposure)Neutral
Foreign currency exchange forwards3% (market value)Neutral
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Portfolio management reviews
Delaware Premium Income Fund
October 13, 2020 (Unaudited)
Performance preview (for the year ended September 30, 2020)
Delaware Premium Income Fund (Institutional Class shares)1-year return-4.05%
Delaware Premium Income Fund (Class A shares)1-year return-4.24%
CBOE S&P 500 BuyWrite Index (benchmark)1-year return-5.66%
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Premium Income Fund, please see the table on page 96.
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. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
Please see page 98 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 objective
The Fund seeks to generate income.
On April 6, 2019, Foresters Investment Management Company, Inc. (FIMCO), the investment adviser to the First Investors Funds, entered into an agreement with Macquarie Management Holdings, Inc. (MMHI), whereby MMHI, on behalf of its affiliate Delaware Management Company (DMC), a series of Macquarie Investment Management Business Trust (MIMBT), would acquire FIMCO’s asset management business (the “Transaction”). In connection with the Transaction, the Board of Trustees of the First Investors Trusts and the First Investors Fund shareholders approved, pursuant to an Agreement and Plan of Reorganization (the “Agreement”), the transfer of all assets and liabilities of each First Investors Fund to a corresponding, newly formed fund in the Delaware Funds® by Macquarie family of funds. The Transaction closed on
October 4, 2019.
Ziegler Capital Management, LLC (ZCM), a US registered investment advisor, is the sub-advisor to the Fund. As sub-advisor, ZCM is responsible for day-to-day management of the Fund's assets. DMC, a series of MIMBT, has ultimate responsibility for all investment advisory services.
Market review
Financial markets were on a roller coaster ride during the Fund’s fiscal year. Nonetheless, stocks and bonds produced strong returns for the period, with the S&P 500® Index advancing 15.15% and the Bloomberg Barclays US Aggregate Index gaining 6.98%. Momentum and growth stocks continued to dominate the market. For example, large-cap value stocks, as represented by the S&P 500 Value Index, returned -2.68% for the fiscal year, while large-cap growth stocks, as represented by the S&P 500 Growth Index, returned 30.64%.
Prior to the pandemic, the positive momentum in both the economy and equity markets carried forward from late 2019 into the beginning of 2020. Then COVID-19 emerged. Economic activity slowed dramatically as shelter-in-place orders, quarantines, and fear
of contracting the virus took hold. The S&P 500 Index rapidly declined, falling 31.79%, posting the steepest 30-day decline of the postwar era. Second-quarter gross domestic product (GDP) posted its largest quarterly decline of the postwar period, falling 31.4%.
Central banks and governments around the world responded with dramatic easing in monetary and fiscal policy. In the United States, Congress quickly implemented an unprecedented amount of fiscal stimulus, amounting to double the total fiscal stimulus enacted during the global financial crisis of 2008-2009. In the span of three months, the Federal Reserve also provided more monetary stimulus (asset purchases) than the total provided during the first three years of the recession. Taken together, these programs provided $5 trillion worth of stimulus.
Source: Bloomberg.
Within the Fund
For the fiscal year ended September 30, 2020, Delaware Premium Income Fund outperformed its benchmark, the CBOE S&P 500
BuyWrite Index. The Fund’s Institutional Class shares fell 4.05%. The Fund’s Class A shares dropped 4.24% at net asset value and 9.76% at maximum offer price (both figures reflect all distributions reinvested). For the same period, the benchmark declined 5.66%. For complete, annualized performance of Delaware Premium Income Fund, please see the table on page 96.
Value-leaning stocks are a foundation of the Fund’s investment strategy. This value tilt in the portfolio was the largest detractor from the Fund’s performance for the fiscal year, as value stocks significantly lagged the market.
In contrast, the Fund’s in-the-money call options significantly outperformed the benchmark for the fiscal year by more than 1,500 basis points. (A basis point equals one hundredth of a percentage point.) As a result of the call options, the Fund outperformed the benchmark with less risk, resulting in a much higher risk-adjusted return than the benchmark. Not only did the Fund’s in-the-money call options provide more downside protection
 
34    

than the benchmark’s at-the-money call options during the market downturn in 2020, it also allowed for more upside participation during the continued market rally as the drop in implied volatility benefited the Fund’s longer-term options more than the benchmark’s one-month options. The entire outperformance of the Fund compared to the benchmark for the fiscal year was due to call option outperformance. For instance, the implied volatility of the Fund’s actively managed, single-stock call option portfolio ended the fiscal year at 38.1%, versus an implied volatility of only 22.6% for a
one-month, at-the-money index option on the S&P 500 Index. While both are at above-average levels, the in-the-money, single-stock call options provided more attractive implied volatility levels than the benchmark’s index options.
The Fund underperformed the Bloomberg Barclays US Aggregate Index for the fiscal year, as bonds posted strong returns because of the continued decline in interest rates. Unfortunately for bond investors, yields are extremely low, with the 10-year Treasury yield ending the fiscal year at 0.69%.
In terms of the Fund’s stock-only attribution for the fiscal year, an underweight to the defensive sectors of real estate and utilities contributed to the Fund’s performance as these sectors underperformed the market. However, an overweight to the energy sector, which significantly lagged the market for the period,
detracted. An underweight to the technology sector also detracted from the Fund’s stock-only performance, as growth and technology stocks continued to dominate the market. Stock selection in financials and consumer staples contributed to the Fund’s performance but detracted in technology and industrials.
While implied volatility declined somewhat during the third quarter, it remains elevated by historical standards. As a result, in-the-money call premiums remained at above-average levels at fiscal year end. Consequently, we have continued the trend of writing longer-term call options to “lock-in” the high, implied volatility levels for longer. At the end of this fiscal year, the average expiration of the Fund’s call option portfolio was 5.3 months, with a strike price averaging 11.6% in the money. These characteristics resulted in an option portfolio with $2.8 million of time value that is likely to decay over the course of the next couple of quarters, in our view.
Given the current environment of historically low interest rates, above-average call premiums, and attractive valuations of the stocks in the Fund, we believe the Fund is strongly positioned relative to both bonds and the covered-call benchmark. We continue to believe large-cap stocks offer the soundest risk-reward potential, especially when combined with in-the-money call options, which could help stabilize returns by offering the opportunity for both downside protection and a return component.
    35

Portfolio management reviews
Delaware Total Return Fund
October 13, 2020 (Unaudited)
Performance preview (for the year ended September 30, 2020)
Delaware Total Return Fund (Institutional Class shares)1-year return-4.29%
Delaware Total Return Fund (Class A shares)1-year return-4.48%
S&P 500® Index (primary benchmark)1-year return+15.15%
S&P 500 Index (primary benchmark)1-year return+13.49%
Bloomberg Barclays US Aggregate Index (secondary benchmark)1-year return+6.98%
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Total Return Fund, please see the table on page 99.
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. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
Please see page 102 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 objective
The Fund seeks to provide sustainable current income with potential for capital appreciation with moderate investment risk.
Effective after the close of business on October 4, 2019, Delaware Management Company (DMC or Manager), a series of Macquarie Investment Management Business Trust (MIMBT), serves as the investment manager for the Fund.* During the period after the close of business on October 4, 2019, the Manager repositioned the Fund’s portfolio in accordance with the Fund’s investment objective and principal investment strategies, as described in the prospectus. The investment objective is the same and its principal investment strategies are the same or similar to those of the corresponding First Investors Fund.
Market review
Mixed market performance marked the Fund’s fiscal year. Risk assets were up during the period, albeit with much volatility. The fiscal period began with optimism as consensus looked to a
mid-cycle bounce in growth for at least the first two months of 2020.
That optimism vanished when COVID-19 emerged in China in mid-January, and it became increasingly clear through February and March that the virus would not be contained as reported cases around the globe increased significantly. The realization of a widespread pandemic ignited a repricing within global asset markets when risk asset prices fell heavily amid a flight to quality (particularly in US Treasurys and the US dollar) and a scramble for liquidity.
Contrasting themes marked the latter half of the period as risk markets recovered and pushed toward all-time highs, despite virus cases growing in the United States, Europe, and Asia. Financial markets focused on the improving economic data, the abundant liquidity provided by central banks, and the prospect of additional fiscal stimulus. However, optimism faded in September as a
resurgence in coronavirus cases, uncertainty surrounding the US presidential election, and continued US-China tensions generated
market concern.
Source: Bloomberg.
Within the Fund
For the fiscal year ended September 30, 2020, Delaware Total Return Fund underperformed its primary benchmark, the S&P 500 Index. The Fund also underperformed its secondary benchmarks, a blend of 60% S&P 500 Index and 40% Bloomberg Barclays US Aggregate Index and the Bloomberg Barclays US Aggregate Index. The Fund’s Institutional Class shares declined 4.29%. The Fund’s Class A shares fell 4.48% at net asset value and 9.97% at maximum offer price. These figures reflect all distributions reinvested. During the same period, the blend of 60% S&P 500 Index and 40% Bloomberg Barclays US Aggregate Index gained 13.49%. The S&P 500 Index rose 15.15% and the Bloomberg Barclays US Aggregate Index gained 6.98%. For complete, annualized performance of Delaware Total Return Fund, please see the table on page 99.
Following is a discussion about performance during the period from October 7, 2019, when DMC began serving as the investment manager for the Fund, to September 30, 2020.
The Fund’s underperformance for the fiscal year mainly stemmed from equity exposure that was largely allocated to value equities, which generally trailed US large-cap core equities for the
12-month period. When US growth sectors outperform value sectors, the Fund tends to struggle in comparison with its peers. Additionally, the Fund’s allocation to international and real estate equities, both of which underperformed the broad equity market, detracted
from performance.
Other detractors from performance included an overweight to commercial mortgage-backed securities (CMBS) and security selection within BBB-rated investment grade corporates. Key
 
36    

contributors to performance within the Fund’s fixed income sleeve included an overweight to investment grade corporates, security selection within A-rated investment grade corporates, a small underweight to emerging markets, and yield curve management.
The Fund’s strategic policy weights reflect a commitment to seeking diversification across geographies and asset classes. As part of the oversight process, we periodically analyze the sources of the Fund’s active performance.
For the fiscal year, the Fund’s active positioning with respect to the strategic policy weights of different asset classes detracted from performance, most of which occurred after the first quarter of 2020.
We periodically examine the contribution of derivatives to the Fund’s performance. Based on the available information, we believe the Fund’s combination of futures, options, swaps, and currency positions had only a limited effect on performance during the fiscal year.
At the end of the Fund’s fiscal year, we sought to continue to deliver the potential benefits of diversification while actively managing risk. With these two principles in mind, the Fund seeks to deliver returns that are derived from tactical asset allocation decisions as well as from active management of individual asset classes and investment styles. We manage the Fund based on the assumption that investors should keep a global perspective when evaluating potential investment opportunities and therefore continue to include investment possibilities around the globe within the Fund.
The growth outlook is unclear to us, as volatile macroeconomic factors paired with the pandemic have escalated global economic and market uncertainties. While we think that the worst of the recession is likely behind us, the path to recovery is not yet laid out.
In our view, a thoughtful active management approach is needed given increased political, economic, and market uncertainty. We believe vigilant and continuous assessment of the current market environment offers opportunities to take advantage of market dislocations and achieve attractive risk-adjusted returns through an active focus on portfolio risk and diversification.
*On April 6, 2019, Foresters Investment Management Company, Inc. (FIMCO), the investment adviser to the First Investors Funds, entered into an agreement with Macquarie Management Holdings, Inc. (MMHI), whereby MMHI, on behalf of its affiliate DMC, would acquire FIMCO’s asset management business (the “Transaction”). In connection with the Transaction, the Board of Trustees of the First Investors Trusts and the First Investors Fund shareholders approved, pursuant to an Agreement and Plan of Reorganization
(the “Agreement”), the transfer of all assets and liabilities of each First Investors Fund to a corresponding, newly formed fund in the Delaware Funds® by Macquarie family of funds. The Transaction closed on October 4, 2019.
    37

Performance summaries
Delaware Equity Income Fund
September 30, 2020 (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 performance1,2Average annual total returns through September 30, 2020
 1 year5 year10 yearLifetime
Class A (Est. February 22, 1993)    
Excluding sales charge-7.89%+5.90%+7.76%
Including sales charge-13.18%+4.65%+7.12%
Institutional Class (Est. April 1, 2013)    
Excluding sales charge-7.72%+6.21%+6.51%
Including sales charge-7.72%+6.21%+6.51%
Class R6 (Est. April 1, 2013)    
Excluding sales charge-7.54%+6.33%+6.63%
Including sales charge-7.54%+6.33%+6.63%
Russell 1000 Value Index-5.03%+7.66%+7.85%*
*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the month end prior to the Fund’s Institutional Class inception date.
1Returns 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 on the “Fund expense ratios” table on page 39. 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 5.75%, and have an annual 12b-1 fee of 0.25% of average daily net
assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.
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.
Risk is increased in a concentrated portfolio since it holds a limited number of securities with each investment having a greater effect on the overall performance.
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.
 
    38

2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 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) from exceeding 1.10%, 0.85%, and 0.81% of the Fund’s average daily net assets for Class A shares, Institutional Class shares, and Class R6 shares, respectively, from October 4, 2019 to September 30, 2020.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios.
Fund expense ratiosClass AInstitutional ClassClass R6
Total annual operating expenses (without fee waivers)1.12%0.87%0.86%
Net expenses (including fee waivers, if any)1.12%0.85%0.81%
Type of waiverContractualContractualContractual
*The aggregate contractual waiver period covering this report is from October 4, 2019 through October 31, 2021.
    39

Performance summaries
Delaware Equity Income Fund 
Performance of a $10,000 investment1
Class A shares
Average annual total returns from September 30, 2010 through September 30, 2020
For period beginning September 30, 2010 through September 30, 2020Starting valueEnding value
Russell 1000 Value Index$10,000$25,814
Delaware Equity Income Fund — Class A shares$9,425$19,888
Institutional Class shares
Average annual total returns from April 1, 2013 (Fund’s inception) through September 30, 2020
For period beginning April 1, 2013 through September 30, 2020Starting valueEnding value
Russell 1000 Value Index$10,000$17,626
Delaware Equity Income Fund — Institutional Class shares$10,000$16,042
1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on September 30, 2010, and includes the effect of a 5.75% front-end sales charge and the reinvestment of all distributions. The graph also assumes $10,000 invested in Russell 1000 Value Index as of September 30, 2010.
The “Performance of a $10,000 investment” graph for Institutional Class shares assumes $10,000 invested in Institutional Class shares
of the Fund on April 1, 2013, and includes the reinvestment of all distributions. The graph also assumes $10,000 invested in Russell 1000 Value Index as of April 1, 2013.
The graphs do 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
 
    40

not been in effect. Expenses are listed in the “Fund expense ratios” table on page 39. Please note additional details on pages 38 through 41.
The Russell 1000 Value Index measures the performance of the large-cap value segment of the US equity universe. It includes those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values.
The S&P 500 Index, mentioned on page 1, measures the performance of 500 mostly large-cap stocks weighted by market value, and is often used to represent performance of the US stock market.
Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company.
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.
Performance of other Fund classes will vary due to different charges and expenses.
 Nasdaq symbolsCUSIPs
Class AFIUTX24611D409
Institutional ClassFIUUX24611D508
Class R6FIUVX24611D607
    41

Performance summaries
Delaware Growth and Income Fund
September 30, 2020 (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 performance1,2Average annual total returns through September 30, 2020
 1 year5 year10 yearLifetime
Class A (Est. October 4, 1993)    
Excluding sales charge-7.99%+5.70%+8.98%
Including sales charge-13.28%+4.45%+8.34%
Institutional Class (Est. April 1, 2013)    
Excluding sales charge-7.68%+6.06%+6.82%
Including sales charge-7.68%+6.06%+6.82%
Class R6 (Est. April 1, 2013)    
Excluding sales charge-7.63%+6.12%+6.88%
Including sales charge-7.63%+6.12%+6.88%
Russell 1000 Value Index-5.03%+7.66%+7.85%*
*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the month end prior to the Fund’s Institutional Class inception date.
1Returns 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 on the “Fund expense ratios” table on page 43. 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 5.75%, and have an annual
12b-1 fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.
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.
Risk is increased in a concentrated portfolio since it holds a limited number of securities with each investment having a greater effect on the overall performance.
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.
 
    42

2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 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) from exceeding 1.11%, 0.82%, and 0.75% of the Fund’s average daily net assets for Class A shares, Institutional Class shares, and Class R6 shares, respectively, from October 4, 2019 to September 30, 2020.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios.
Fund expense ratiosClass AInstitutional ClassClass R6
Total annual operating expenses (without fee waivers)1.05%0.80%0.79%
Net expenses (including fee waivers, if any)1.05%0.80%0.75%
Type of waiverContractualContractualContractual
*The aggregate contractual waiver period covering this report is from October 4, 2019 through October 31, 2021.
    43

Performance summaries
Delaware Growth and Income Fund 
Performance of a $10,000 investment1
Class A shares
Average annual total returns from September 30, 2010 through September 30, 2020
For period beginning September 30, 2010 through September 30, 2020Starting valueEnding value
Russell 1000 Value Index$10,000$25,814
Delaware Growth and Income Fund — Class A shares$9,425$22,276
Institutional Class shares
Average annual total returns from April 1, 2013 (Fund’s inception) through September 30, 2020
For period beginning April 1, 2013 through September 30, 2020Starting valueEnding value
Russell 1000 Value Index$10,000$17,626
Delaware Growth and Income Fund — Institutional Class shares$10,000$16,406
1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on September 30, 2010, and includes the effect of a 5.75% front-end sales charge and the reinvestment of all distributions. The graph also assumes $10,000 invested in Russell 1000 Value Index as of September 30, 2010.
The “Performance of a $10,000 investment” graph for Institutional Class shares assumes $10,000 invested in Institutional Class shares
of the Fund on April 1, 2013, and includes the reinvestment of all distributions. The graph also assumes $10,000 invested in Russell 1000 Value Index as of April 1, 2013.
The graphs do 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
 
    44

not been in effect. Expenses are listed in the “Fund expense ratios” table on page 43. Please note additional details on pages 42
through 45.
The Russell 1000 Value Index measures the performance of the large-cap value segment of the US equity universe. It includes those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values.
The S&P 500 Index, mentioned on page 3, measures the performance of 500 mostly large-cap stocks weighted by market value, and is often used to represent performance of the US stock market.
Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company.
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.
Performance of other Fund classes will vary due to different charges and expenses.
 Nasdaq symbolsCUSIPs
Class AFGINX24611D870
Institutional ClassFGIPX24611D862
Class R6FGIQX24611D854
    45

Performance summaries
Delaware Growth Equity Fund
September 30, 2020 (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 performance1,2Average annual total returns through September 30, 2020
 1 year5 year10 yearLifetime
Class A (Est. October 25, 2000)    
Excluding sales charge+25.53%+13.96%+14.48%
Including sales charge+18.28%+12.62%+13.81%
Institutional Class (Est. April 1, 2013)    
Excluding sales charge+25.88%+14.36%+14.24%
Including sales charge+25.88%+14.36%+14.24%
Class R6 (Est. April 1, 2013)    
Excluding sales charge+25.97%+14.43%+14.35%
Including sales charge+25.97%+14.43%+14.35%
Russell 1000 Growth Index+37.53%+20.10%+17.77%*
*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the month end prior to the Fund’s Institutional Class inception date.
1Returns 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 on the “Fund expense ratios” table on page 47. 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 5.75%, and have an annual 12b-1 fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.
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.
Investments in small and/or medium-sized companies typically exhibit greater risk and higher volatility than larger, more established companies.
Narrowly focused investments may exhibit higher volatility than investments in multiple industry sectors.
Because the Fund expects to hold a concentrated portfolio of limited number of securities, the Fund's risk is increased because each investment has a greater effect on the Fund's overall performance.
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.
 
    46

2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 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) from exceeding 1.17%, 0.86%, and 0.86% of the Fund’s average daily net assets for Class A shares, Institutional Class shares, and Class R6 shares, respectively, from October 4, 2019 to September 30, 2020.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios.
Fund expense ratiosClass AInstitutional ClassClass R6
Total annual operating expenses (without fee waivers)1.12%0.87%0.84%
Net expenses (including fee waivers, if any)1.12%0.86%0.79%
Type of waiverContractualContractualContractual
*The aggregate contractual waiver period covering this report is from October 4, 2019 through October 31, 2021.
    47

Performance summaries
Delaware Growth Equity Fund 
Performance of a $10,000 investment1
Class A shares
Average annual total returns from September 30, 2010 through September 30, 2020
For period beginning September 30, 2010 through September 30, 2020Starting valueEnding value
Russell 1000 Growth Index$10,000$49,120
Delaware Growth Equity Fund — Class A shares$9,425$36,459
Institutional Class shares
Average annual total returns from April 1, 2013 (Fund's inception) through September 30, 2020
For period beginning April 1, 2013 through September 30, 2020Starting valueEnding value
Russell 1000 Growth Index$10,000$33,894
Delaware Growth Equity Fund — Institutional Class shares$10,000$27,141
1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on September 30, 2010, and includes the effect of a 5.75% front-end sales charge and the reinvestment of all distributions. The graph also assumes $10,000 invested in the Russell 1000 Growth Index as of September 30, 2010.
The “Performance of a $10,000 investment” graph for Institutional Class shares assumes $10,000 invested in Institutional Class shares
of the Fund on April 1, 2013, and includes the reinvestment of all distributions. The graph also assumes $10,000 invested in the Russell 1000 Growth Index as of April 1, 2013.
The graphs do 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
 
    48

not been in effect. Expenses are listed in the “Fund expense ratios” table on page 47. Please note additional details on pages 46
through 49.
The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the US equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.
Performance of other Fund classes will vary due to different charges and expenses.
 Nasdaq symbolsCUSIPs
Class AFICGX24611D714
Institutional ClassFICHX24611D698
Class R6FICIX24611D680
    49

Performance summaries
Delaware Opportunity Fund
September 30, 2020 (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 performance1,2Average annual total returns through September 30, 2020
 1 year5 year10 yearLifetime
Class A (Est. August 24, 1992)    
Excluding sales charge-13.31%+3.17%+8.76%
Including sales charge-18.30%+1.96%+8.12%
Institutional Class (Est. April 1, 2013)    
Excluding sales charge-13.04%+3.50%+6.04%
Including sales charge-13.04%+3.50%+6.04%
Class R6 (Est. April 1, 2013)    
Excluding sales charge-12.93%+3.61%+6.18%
Including sales charge-12.93%+3.61%+6.18%
Russell Midcap Value Index-7.30%+6.38%+7.22%*
*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the month end prior to the Fund’s Institutional Class inception date.
1Returns 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 on the “Fund expense ratios” table on page 51. 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 5.75%, and have an annual 12b-1 fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.
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.
Investments in small and/or medium-sized companies typically exhibit greater risk and higher volatility than larger, more established companies.
REIT investments are subject to many of the risks associated with direct real estate ownership, including changes in economic conditions, credit risk, and interest rate fluctuations.
An exchange-traded fund (ETF) is a security that represents all the stocks on a given exchange. ETF shares can be bought, sold, short-sold, traded on margin, and generally function as if they were stocks.
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.
 
    50

2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 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) from exceeding 1.21%, 0.90%, and 0.78% of the Fund’s average daily net assets for Class A shares, Institutional Class shares, and Class R6 shares, respectively, from October 4, 2019 to September 30, 2020.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios.
Fund expense ratiosClass AInstitutional ClassClass R6
Total annual operating expenses (without fee waivers)1.23%0.98%0.96%
Net expenses (including fee waivers, if any)1.21%0.90%0.78%
Type of waiverContractualContractualContractual
*The aggregate contractual waiver period covering this report is from October 4, 2019 through October 31, 2021.
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Performance summaries
Delaware Opportunity Fund 
Performance of a $10,000 investment1
Class A shares
Average annual total returns from September 30, 2010 through September 30, 2020
For period beginning September 30, 2010 through September 30, 2020Starting valueEnding value
Russell Midcap Value Index$10,000$25,271
Delaware Opportunity Fund — Class A shares$9,425$21,830
Institutional Class shares
Average annual total returns from April 1, 2013 (Fund’s inception) through September 30, 2020
For period beginning April 1, 2013 through September 30, 2020Starting valueEnding value
Russell Midcap Value Index$10,000$16,868
Delaware Opportunity Fund — Institutional Class shares$10,000$15,523
1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on September 30, 2010, and includes the effect of a 5.75% front-end sales charge and the reinvestment of all distributions. The graph also assumes $10,000 invested in the Russell Midcap Value Index as of September 30, 2010.
The “Performance of a $10,000 investment” graph for Institutional Class shares assumes $10,000 invested in Institutional Class shares
of the Fund on April 1, 2013, and includes the reinvestment of all distributions. The graph also assumes $10,000 invested in the Russell Midcap Value Index as of April 1, 2013.
The graphs do 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
 
    52

not been in effect. Expenses are listed in the “Fund expense ratios” table on page 51. Please note additional details on pages 50
through 53.
The Russell Midcap Value Index measures the performance of the mid-cap value segment of the US equity universe. It includes those Russell Midcap Index companies with lower price-to-book ratios and lower forecasted growth values.
The Russell Midcap Growth Index, mentioned on page 7, measures the performance of the mid-cap growth segment of the US equity universe. It includes those Russell Midcap Index companies with higher price-to-book ratios and higher forecasted growth values.
Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company.
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.
Performance of other Fund classes will vary due to different charges and expenses.
 Nasdaq symbolsCUSIPs
Class AFIUSX24611D771
Institutional ClassFIVUX24611D763
Class R6FIVVX24611D755
    53

Performance summaries
Delaware Special Situations Fund
September 30, 2020 (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 performance1,2Average annual total returns through September 30, 2020
 1 year5 year10 yearLifetime
Class A (Est. September 18, 1990)    
Excluding sales charge-20.91%+0.38%+5.74%
Including sales charge-25.45%-0.81%+5.12%
Institutional Class (Est. April 1, 2013)    
Excluding sales charge-20.67%+0.70%+3.25%
Including sales charge-20.67%+0.70%+3.25%
Class R6 (Est. April 1, 2013)    
Excluding sales charge-20.57%+0.81%+3.40%
Including sales charge-20.57%+0.81%+3.40%
Russell 2000 Value Index-14.88%+4.11%+4.40%*
*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the month end prior to the Fund’s Institutional Class inception date.
1Returns 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 on the “Fund expense ratios” table on page 55. 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 5.75%, and have an annual 12b-1 fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.
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.
Investments in small and/or medium-sized companies typically exhibit greater risk and higher volatility than larger, more established companies.
REIT investments are subject to many of the risks associated with direct real estate ownership, including changes in economic conditions, credit risk, and interest rate fluctuations.
An exchange-traded fund (ETF) is a security that represents all the stocks on a given exchange. ETF shares can be bought, sold, short-sold, traded on margin, and generally function as if they were stocks.
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.
 
    54

2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 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) from exceeding 1.27%, 1.02%, and 0.87% of the Fund’s average daily net assets for Class A shares, Institutional Class shares, and Class R6 shares, respectively, from October 4, 2019 to September 30, 2020.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios.
Fund expense ratiosClass AInstitutional ClassClass R6
Total annual operating expenses (without fee waivers)1.28%1.03%1.02%
Net expenses (including fee waivers, if any)1.27%1.02%0.87%
Type of waiverContractualContractualContractual
*The aggregate contractual waiver period covering this report is from October 4, 2019 through October 31, 2021.
    55

Performance summaries
Delaware Special Situations Fund 
Performance of a $10,000 investment1
Class A shares
Average annual total returns from September 30, 2010 through September 30, 2020
For period beginning September 30, 2010 through September 30, 2020Starting valueEnding value
Russell 2000 Value Index$10,000$19,846
Delaware Special Situations Fund — Class A shares$9,425$16,476
Institutional Class shares
Average annual total returns from April 1, 2013 (Fund’s inception) through September 30, 2020
For period beginning April 1, 2013 through September 30, 2020Starting valueEnding value
Russell 2000 Value Index$10,000$13,814
Delaware Special Situations Fund — Institutional Class shares$10,000$12,709
1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on September 30, 2010, and includes the effect of a 5.75% front-end sales charge and the reinvestment of all distributions. The graph also assumes $10,000 invested in the Russell 2000 Value Index as of September 30, 2010.
The “Performance of a $10,000 investment” graph for Institutional Class shares assumes $10,000 invested in Institutional Class shares
of the Fund on April 1, 2013, and includes the reinvestment of all distributions. The graph also assumes $10,000 invested in the Russell 2000 Value Index as of April 1, 2013.
The graphs do 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
 
    56

not been in effect. Expenses are listed in the “Fund expense ratios” table on page 55. Please note additional details on pages 54
through 57.
The Russell 2000 Value Index measures the performance of the small-cap value segment of the US equity universe. It includes those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.
The Russell 2000 Growth Index, mentioned on page 9, measures the performance of the small-cap growth segment of the US equity universe. It includes those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values.
Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company.
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.
Performance of other Fund classes will vary due to different charges and expenses.
 Nasdaq symbolsCUSIPs
Class AFISSX24611D672
Institutional ClassFISTX24611D664
Class R6FISUX24611D656
    57

Performance summaries
Delaware Global Equity Fund
September 30, 2020 (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 performance1,2Average annual total returns through September 30, 2020
 1 year5 year10 yearLifetime
Class A (Est. November 16, 1981)    
Excluding sales charge+3.89%+7.22%+7.53%
Including sales charge-2.11%+5.97%+6.90%
Institutional Class (Est. April 1, 2013)    
Excluding sales charge+4.24%+7.60%+7.94%
Including sales charge+4.24%+7.60%+7.94%
Class R6 (Est. April 1, 2013)    
Excluding sales charge+4.32%+7.67%+8.04%
Including sales charge+4.32%+7.67%+8.04%
MSCI World Index (gross)+10.41%+10.48%+8.99%*
MSCI World Index (net)+10.99%+11.10%+9.61%*
*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the month end prior to the Fund’s Institutional Class inception date.
1Returns 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 on the “Fund expense ratios” table on page 59. 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 5.75%, and have an annual 12b-1 fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.
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.
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.
Liquidity risk is the possibility that securities cannot be readily sold within seven days at approximately the price at which a fund has valued them.
The Fund may allocate more of their net assets to investments in single securities than “diversified” funds.
Narrowly focused investments may exhibit higher volatility than investments in multiple industry sectors.
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.
 
    58

2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 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) from exceeding 1.41%, 1.07%, and 1.02% of the Fund’s average daily net assets for Class A shares, Institutional Class shares, and Class R6 shares, respectively, from October 4, 2019 to September 30, 2020.* Please see the most recent prospec