Delaware Mutual Funds: Unveiling the Top 4 to Consider for 2023

Delaware Funds, renowned for its exceptional investment track record, offers a diverse range of mutual funds catering to various financial goals. This article delves into the top 4 Delaware mutual funds that investors should consider adding to their portfolios in 2023.

1. Delaware Dividend & Income Fund (DFINX)

• Category: Dividend Growth
• Morningstar Rating: 5 Stars
• Expense Ratio: 0.72%

DFINX is a premier dividend-focused fund that seeks to generate high current income and long-term capital appreciation. It invests primarily in a diversified portfolio of dividend-paying stocks, with a focus on dividend-growth companies. Over the past 10 years, DFINX has consistently outperformed its benchmark, the S&P 500 Dividend Aristocrats Index.

2. Delaware Small Cap Value Fund (DFSVX)

• Category: Small-Cap Value
• Morningstar Rating: 4 Stars
• Expense Ratio: 0.82%

DFSVX is an actively managed fund that invests in undervalued small-capitalization stocks with solid fundamentals. The fund manager employs a rigorous bottom-up stock selection process, focusing on companies with strong cash flows, low debt-to-equity ratios, and attractive valuations. DFSVX has a track record of outperforming its peers in the small-cap value category.

3. Delaware Extended Duration Bond Fund (DFEXT)

• Category: Long-Term Bonds
• Morningstar Rating: 4 Stars
• Expense Ratio: 0.53%

DFEXT is a long-term bond fund that provides investors with exposure to a diversified portfolio of high-quality bonds with extended maturities. The fund invests in both corporate and government bonds, seeking to maximize income while managing interest rate risk. DFEXT's long average maturity (over 20 years) offers potential for high returns during periods of declining interest rates.

4. Delaware Global Allocation Fund (DFGAX)

• Category: Global Allocation
• Morningstar Rating: 3 Stars
• Expense Ratio: 0.75%

DFGAX is a diversified fund that allocates its assets across a global universe of stocks, bonds, and other asset classes. The fund's investment strategy is driven by a combination of fundamental analysis and quantitative modeling, with the goal of providing investors with attractive risk-adjusted returns over a complete market cycle.

Key Considerations for Delaware Mutual Funds

When evaluating Delaware mutual funds, investors should consider the following factors:

• Investment Objectives: Align the fund's objectives with their own financial goals, whether it's income generation, capital growth, or risk management.
• Risk Tolerance: Understand the fund's risk profile and ensure it matches their comfort level for volatility.
• Expense Ratios: Consider the fund's annual operating expenses, as they can impact long-term returns.
• Morningstar Ratings: Morningstar provides independent ratings based on risk-adjusted returns, which can serve as a useful benchmark for assessing a fund's performance.

Common Mistakes to Avoid

Investors should avoid common pitfalls when investing in Delaware mutual funds:

• Chasing Past Performance: Do not solely rely on historical returns; consider the fund's current investment strategy and market conditions.
• Timing the Market: Avoid attempting to time the market by buying or selling based on short-term market fluctuations.
• Ignoring Fees: High expense ratios can significantly erode returns over time; opt for funds with competitive fees.
• Over-Investing in One Sector: Diversify investments across different sectors and asset classes to mitigate portfolio risk.

FAQs

1. Are Delaware mutual funds worth considering?

Yes, Delaware Funds has a proven track record of delivering strong returns, and its mutual funds offer a wide range of investment options to meet various financial goals.

2. Which Delaware mutual fund is suitable for growth investors?

Consider Delaware Small Cap Value Fund (DFSVX) or Delaware Global Allocation Fund (DFGAX).

3. Is DFEXT a safe investment?

DFEXT invests in long-term bonds, which are generally considered a lower-risk asset class. However, it's essential to note that all investments carry some level of risk.

4. How often do Delaware mutual funds pay dividends?

Each fund has its own distribution schedule, typically monthly or quarterly. DFINX pays dividends monthly, while the other three funds pay dividends quarterly.

5. Can I buy Delaware mutual funds directly through Delaware Funds?

Yes, you can access Delaware mutual funds directly through their website or by contacting their customer service department.

6. Are there any fees associated with investing in Delaware mutual funds?

Yes, most Delaware mutual funds charge an expense ratio to cover operational costs. The expense ratio varies depending on the specific fund.

Conclusion

Delaware Funds offers a compelling lineup of mutual funds that cater to a wide range of investment objectives. By carefully considering their investment goals, risk tolerance, and other key factors, investors can identify the most suitable Delaware mutual funds for their portfolios. Remember to approach investing wisely by avoiding common pitfalls and seeking professional advice when necessary.