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  • Contention and controversy set the tone in Greece
    horizon Currently bank customers are allowed only minimal cash withdrawals and bank reserves are quickly drying up Tarnished remnants of a rich legacy Greece has provided the world with a remarkable cultural legacy from the founding of the Olympics and democratic principles to classical architecture and philosophy Sadly it has also bestowed a modern history of poor financial stability Let s put this last point in perspective Greece has been in default to its creditors for roughly half the time since it became an independent state almost 200 years ago It has been in default for 90 of those years Ecuador and Honduras are the only other countries that have defaulted more often In that light today s headlines of exasperation and chaos are not completely out of place Risk of contagion We believe that the contagion risk to the rest of Europe is much lower than it was five years ago Most of Greece s debt has been transferred from the private sector to the public sector Investors have known about the issues in Greece for a long time now and are generally clear on which banks have exposure to Greek debt in a way that was completely unknown in the contagion within the banking sector in 2008 2009 The ECB has also pledged to do whatever it takes to support the monetary union and has so far committed 1 1 trillion in quantitative easing to keep bond rates down GDP growth rates are also recovering in the euro zone which was not the case five years ago On July 6 IMF Managing Director Christine Lagarde said that the IMF is willing to assist Greece if requested to do so Banks in Greece are scheduled to remain closed until July 11 Greece s controversial finance minister resigned and was replaced with Oxford educated Euclid Tsakalotos Prime Minister Tsipras will present a Greek proposal for aid at Tuesday s European Union summit The ultimate outcome of the Greek crisis is difficult to predict and it will stretch out over a good deal of time but evidence suggests it will be a bumpy ride Hear more from our investment teams on recent market volatility In Greece one crisis two possible outcomes In Greece one crisis two possible outcomes In Greece one crisis two possible outcomes Amid stock plunge Chinese government intervenes Amid stock plunge Chinese government intervenes Amid stock plunge Chinese government intervenes U S stocks weather Greece and China news for now U S stocks weather Greece and China news for now U S stocks weather Greece and China news for now Are global forces impeding inflation Are global forces impeding inflation Are global forces impeding inflation The views expressed represent the Manager s assessment of the market environment as of July 2015 and should not be considered a recommendation to buy hold or sell any security and should not be relied on as research or investment advice Views are subject to change without notice and may not reflect the

    Original URL path: http://www.delawareinvestments.com/individual-investors/literature/insights/2015/contention-and-controversy-set-the-tone-in-greece (2016-04-26)
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  • Despite recent gains, opportunities still available in healthcare stocks
    the healthcare landscape Investing in the healthcare sector requires a high degree of familiarity and expertise There are at least eight broad subgroups that could easily employ full time analysts in their own right biotechnology specialty and generic pharmaceuticals medical devices and equipment life sciences and diagnostics managed care medical devices and technology healthcare facilities and a broad healthcare services group Each subgroup is unique and its constituents can suffer from a lack of cohesiveness The realm of facilities alone is very fragmented It includes academic hospitals and community hospitals for profit hospitals and nonprofit hospitals hospitals that employ physicians and hospitals that employ a physicians association While the macro picture appears positive part of our challenge is to provide exposure to healthcare companies that carve out an easily understood path in what can be an extraordinarily diverse and sometimes ungainly industry We believe the most prudent way to accomplish this is by following a disciplined research process We tend to Focus on companies whose shares trade at a discount to what we view as their ultimate value Dissect and analyze a company s peers competitors suppliers customers and management staff Search for potential catalysts that could prompt markets to revalue the stock in the future Change comes to a historically staid sector There are a handful of additional considerations that we think will influence the tenor of healthcare markets in the coming years Two trends that are already gaining prominence among healthcare providers include An enhanced focus on costs is in the limelight as healthcare providers try to optimize the value of their limited resources This attention to costs will likely be heightened as the industry increasingly shifts from volume based to value based care We believe providers will therefore aspire to a heightened measure of managerial expertise within their practices seeking the best balance between cost containment and the delivery of quality care A wave of digital innovation will likely empower healthcare providers to drive efficiencies while delivering care anywhere anytime The power of the internet together with the proliferation of mobile devices could help streamline the interaction between patient and clinician as administrative tasks and patient engagement are increasingly digitized In the end the benefits of enhanced digital programs such as those that allow information about a patient s physiology to be routed to her doctor in real time will likely allow people throughout the healthcare delivery system to be better informed and better prepared to make objective decisions For patients dealing with complicated cases that require multiple specialists this could foster an environment in which all caregivers can coordinate their activities and share information more quickly and crucially with less chance of error than before Code of Federal Regulations Accelerated Approval of New Drugs for Serious or Life Threatening Illnesses title 21 sec 314 subpart H The views expressed represent the Manager s assessment of the market environment as of June 2015 and should not be considered a recommendation to buy hold or sell any security

    Original URL path: http://www.delawareinvestments.com/individual-investors/literature/insights/2015/opportunities-still-available-in-healthcare-stocks (2016-04-26)
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  • For smaller banks, all eyes on margins
    the beginning of next year we believe that banks NIMs likely have nowhere to go but up once monetary tightening begins This leads us to believe that financials may be one of the better performing sectors as interest rates increase A favorable light on smaller banks in particular Not only do we have a positive outlook for financial stocks we also have a particularly positive outlook for small cap and mid cap banks Unlike their larger peers which have more diversified sources of income a majority of smaller banks revenues are tied to interest rate movements Consider that during fiscal year 2014 on average 83 2 of a small cap bank s revenue and 77 8 of a mid cap bank s revenue were composed of net interest income versus 50 4 for an average large cap bank Regional and community banks typically earn most of their revenues from originating loans and gathering deposits whereas the largest banks have broader business models and are less reliant on interest rates Therefore we believe that small cap and mid cap financial services companies make good candidates for investment consideration as we anticipate the Fed s next round of interest rate adjustments While the interest rate scenario is a key consideration when anticipating the near term performance of small banks we believe the case for smaller banks can be supported by additional factors as well such as the ongoing consolidation in the industry in 1990 there were 15 000 banks in the United States while today there are fewer than 7 000 and the improvement in operating efficiencies brought about by the advent of new technologies such as mobile banking We continue to look for companies that 1 are differentiated within this generally monolithic industry 2 can continue to earn a return on equity that increases the company s intrinsic value above its current market value and 3 are well positioned for an increase in interest rates Data SNL Financial Net interest income is defined as interest income earned from loans and securities minus interest expense paid on deposits and borrowings It is closely related to market interest rates For purposes of measuring the average ratio of net interest income to total revenue we define small cap as any bank with a market capitalization less than 4 0 billion mid cap as any bank with a market capitalization between 4 0 billion and 28 0 billion and large cap as any bank with a market capitalization greater than 28 0 billion The views expressed represent the Manager s assessment of the market environment as of May 2015 and should not be considered a recommendation to buy hold or sell any security and should not be relied on as research or investment advice Views are subject to change without notice and may not reflect the Manager s views Carefully consider the Funds investment objectives risk factors charges and expenses before investing This and other information can be found in the Funds prospectuses and their

    Original URL path: http://www.delawareinvestments.com/individual-investors/literature/insights/2015/for-smaller-banks-all-eyes-on-margins (2016-04-26)
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  • Despite California drought, returns on water bonds shouldn’t dry up
    Management s response to the drought and any potential cutbacks in usage also is a key to maintaining a water utility s financial strength Management must be willing to implement needed rate increases while successfully navigating the conservation requirements being imposed by the governor On the Delaware Investments Municipal Bond team we rely on our credit research to identify the best investment opportunities in the sector One of our holdings the San Francisco Public Utilities Commission SFPUC which we hold in Delaware Tax Free California Fund Delaware Tax Free USA Fund and Delaware Tax Free USA Intermediate Fund Delaware Tax Free California Fund Delaware Tax Free USA Fund and Delaware Tax Free USA Intermediate Fund Delaware Tax Free California Fund Delaware Tax Free USA Fund and Delaware Tax Free USA Intermediate Fund was highlighted in an April 21 report issued by Standard Poor s How Will California Water Utilities Fare Amid The Long Drought And New Conservation Mandates The report identified SFPUC as a utility that had already met the required conservation standards in 2014 before Governor Brown s initiative was passed in April As a result it requires no additional conservation to comply with the executive order in 2015 In sum we expect the majority of California water utilities to be largely insulated from the potential negative effects of the drought and subsequent conservation efforts as financial metrics were strong heading into the drought the utilities have sole rate setting authority and we believe management teams will be well prepared to take necessary actions The key is to avoid water utilities that had weaker financial metrics heading into the drought and those with management teams unwilling to make the necessary decisions We are looking for any spread widening in the California water utilities we favor as an opportunity to add to our exposures As of April 30 2015 bonds issued by the City of San Francisco Public Utilities Commission represented 2 14 of the Delaware Tax Free California Fund 0 97 of the Delaware Tax Free USA Fund and 1 15 of the Delaware Tax Free USA Intermediate Fund The views expressed represent the Manager s assessment of the market environment as of June 2015 and should not be considered a recommendation to buy hold or sell any security and should not be relied on as research or investment advice Views are subject to change without notice and may not reflect the Manager s views Carefully consider the Funds investment objectives risk factors charges and expenses before investing This and other information can be found in the Funds prospectuses and their summary prospectuses which may be obtained by visiting the fund literature page or calling 800 523 1918 Investors should read the prospectus and the summary prospectus carefully before investing IMPORTANT RISK CONSIDERATIONS Investing involves risk including the possible loss of principal Past performance does not guarantee future results Fixed income securities and bond funds can lose value and investors can lose principal as interest rates rise They also

    Original URL path: http://www.delawareinvestments.com/individual-investors/literature/insights/2015/reality-for-water-bondholders (2016-04-26)
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  • Lower duration helps set high yield apart
    year However we do think over time defaults will migrate back to 3 or higher One of the sectors that could add to defaults in the future and I would say future meaning 2016 or 2017 would be energy another would be metals and mining Those are two of the most challenged sectors at least where there s some companies that are having difficulty dealing with their leverage and the volatile or lower commodity prices Data J P Morgan and Bloomberg The views expressed represent the Manager s assessment of the market environment as of May 2015 and should not be considered a recommendation to buy hold or sell any security and should not be relied on as research or investment advice Views are subject to change without notice and may not reflect the Manager s current views The views expressed are general in nature and do not relate to a particular mutual fund Carefully consider the Funds investment objectives risk factors charges and expenses before investing This and other information can be found in the Funds prospectuses and their summary prospectuses which may be obtained by visiting the fund literature page or calling 800 523 1918 Investors should read the prospectus and the summary prospectus carefully before investing IMPORTANT RISK CONSIDERATIONS Investing involves risk including the possible loss of principal Past performance does not guarantee future results Fixed income securities and bond funds can lose value and investors can lose principal as interest rates rise They also may be affected by economic conditions that hinder an issuer s ability to make interest and principal payments on its debt The Funds may also be subject to prepayment risk the risk that the principal of a fixed income security that is held by the Funds may be prepaid prior to maturity potentially forcing the Funds to reinvest that money at a lower interest rate High yielding non investment grade bonds junk bonds involve higher risk than investment grade bonds Duration is the measure of the sensitivity of the price of a fixed income investment to a change in interest rates Duration is expressed as a number of years Christopher M Testa Senior Portfolio Manager View bio See all from this author See all from this team Christopher M Testa biography Christopher M Testa CFA Senior Vice President Senior Portfolio Manager Christopher M Testa joined Delaware Investments in January 2014 as a senior portfolio manager in the firm s corporate credit portfolio management group He primarily manages high yield assets Prior to joining the firm Testa worked as a portfolio manager who focused on high yield credit at S Goldman Asset Management from 2009 to 2012 and Princeton Advisory Group from 2012 to 2013 Previously he served as head of U S credit at Drake Management and prior to that he was head of credit research and a high yield portfolio manager at Goldman Sachs Asset Management Testa has more than 20 years of experience analyzing and investing in high yield and

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  • A positive outlook for credit conditions
    are subject to change without notice and may not reflect the Manager s current views The views expressed are general in nature and do not relate to a particular mutual fund Carefully consider the Funds investment objectives risk factors charges and expenses before investing This and other information can be found in the Funds prospectuses and their summary prospectuses which may be obtained by visiting the fund literature page or calling 800 523 1918 Investors should read the prospectus and the summary prospectus carefully before investing IMPORTANT RISK CONSIDERATIONS Investing involves risk including the possible loss of principal Past performance does not guarantee future results Fixed income securities and bond funds can lose value and investors can lose principal as interest rates rise They also may be affected by economic conditions that hinder an issuer s ability to make interest and principal payments on its debt The Funds may also be subject to prepayment risk the risk that the principal of a fixed income security that is held by the Funds may be prepaid prior to maturity potentially forcing the Funds to reinvest that money at a lower interest rate Securities in the lowest of the rating categories considered to be investment grade that is Baa or BBB have some speculative characteristics High yielding non investment grade bonds junk bonds involve higher risk than investment grade bonds The high yield secondary market is particularly susceptible to liquidity problems when institutional investors such as mutual funds and certain other financial institutions temporarily stop buying bonds for regulatory financial or other reasons In addition a less liquid secondary market makes it more difficult for the Fund to obtain precise valuations of the high yield securities in its portfolio Michael G Wildstein Senior Portfolio Manager View bio See all from this author See all from this team Michael G Wildstein biography Michael G Wildstein CFA Senior Vice President Senior Portfolio Manager Michael G Wildstein is a member of the firm s fixed income portfolio management team He manages corporate credit related portfolios Before joining the team he was a senior corporate bond analyst focused on the telecommunications sector for high grade and high yield portfolios Prior to joining Delaware Investments in March 2007 as a senior research analyst Wildstein spent five years at Merrill Lynch Investment Managers in various roles that included portfolio manager for the core bond team corporate bond research analyst and corporate bond trader Before moving into investment management Wildstein worked in finance corporate strategy and business development with several firms including RCN Corporation and AT T Local Services He earned a bachelor s degree from the University of Tampa and an MBA from Drexel University Christopher M Testa Senior Portfolio Manager View bio See all from this author See all from this team Christopher M Testa biography Christopher M Testa CFA Senior Vice President Senior Portfolio Manager Christopher M Testa joined Delaware Investments in January 2014 as a senior portfolio manager in the firm s corporate credit portfolio management

    Original URL path: http://www.delawareinvestments.com/individual-investors/literature/insights/2015/credit-cycle-indicates-positive-outlook (2016-04-26)
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  • Currency markets: More volatility in store?
    the world and currency devaluation trends will take a breather Despite this modestly hopeful near term picture we continue to see dollar strength over the medium term which will likely continue to place deflationary pressure around the globe In our best case albeit unlikely scenario widespread economic growth returns preventing central banks from chasing each other in a devaluation race Our worst case scenario involves a managed global single currency regime This rather apocalyptic scenario could be tempered however For instance inflation around the world could converge at zero and economic growth could sputter making it less necessary for countries to deliberately adjust currencies Slide disclosure The JP Morgan G7 Volatility Index measures the volatility of a basket of currencies issued by advanced economies These economies are the so called Group of 7 Canada France Germany Italy Japan the United Kingdom and the United States Close Slide disclosure The U S Dollar Index is calculated as a weighted average of the foreign exchange value of the U S dollar against a group of currencies that includes the Euro Area Japan the United Kingdom Australia and Sweden The index is calibrated so that 1973 100 Close Slide disclosure Close Slide disclosure The Thomson Reuters CoreCommodity CRB Index is a widely recognized measure of global commodities markets It is made up of 19 components considered to be significant commodities These include silver sugar wheat aluminum and soy beans Close Slide disclosure Offshore financial centers have become prominent facilitators of debt issuance particularly for issuers based in emerging markets The International Monetary Fund has begun covering these territories in an effort to better understand their operations and their possible effects on capital markets globally A partial list of offshore financial centers includes Aruba the Bahamas Bermuda Cayman Islands Gibraltar Monaco and Samoa Close Slide disclosure Close Launch slideshow Read other comments from our investment teams on China and currencies China devalues the renminbi What s next China devalues the renminbi What s next China devalues the renminbi What s next Amid stock plunge Chinese government intervenes Amid stock plunge Chinese government intervenes Amid stock plunge Chinese government intervenes U S stocks weather Greece and China news for now U S stocks weather Greece and China news for now U S stocks weather Greece and China news for now Are global forces impeding inflation Are global forces impeding inflation Are global forces impeding inflation Currency markets contend with a devaluation dilemma Currency markets contend with a devaluation dilemma Currency markets contend with a devaluation dilemma What to expect when you re expecting a strong dollar What to expect when you re expecting a strong dollar What to expect when you re expecting a strong dollar Charts are for illustrative purposes only The views expressed represent the Manager s assessment of the market environment as of May 2015 and should not be considered a recommendation to buy hold or sell any security and should not be relied on as research or investment advice Views are

    Original URL path: http://www.delawareinvestments.com/individual-investors/literature/insights/2015/currency-markets-more-volatility-in-store (2016-04-26)
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  • Real estate thrives amid healthy capital markets
    today we re very overweight the U S and we think that s the best place and the best value for our investors The views expressed represent the Manager s assessment of the market environment as of May 2015 and should not be considered a recommendation to buy hold or sell any security and should not be relied on as research or investment advice Views are subject to change without notice and may not reflect the Manager s current views The views expressed are general in nature and do not relate to a particular mutual fund REITs refer to real estate investment trusts Carefully consider the Funds investment objectives risk factors charges and expenses before investing This and other information can be found in the Funds prospectuses and their summary prospectuses which may be obtained by visiting the fund literature page or calling 800 523 1918 Investors should read the prospectus and the summary prospectus carefully before investing IMPORTANT RISK CONSIDERATIONS Investing involves risk including the possible loss of principal Past performance does not guarantee future results 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 Narrowly focused investments may exhibit higher volatility than investments in multiple industry sectors International investments entail risks not ordinarily associated with U S investments including fluctuation in currency values differences in accounting principles or economic or political instability in other nations Bob Zenouzi CIO Real Estate Securities and Income Solutions RESIS View bio More from Bob Zenouzi Recent market volatility has implications from Shanghai to D C Income investing Spotlight on dividends U S REITs A matured asset class See all from this author See all from this team Bob Zenouzi biography Bob Zenouzi Senior Vice President Chief Investment Officer Real Estate Securities and Income Solutions RESIS Bob Zenouzi is the lead manager for the real estate securities and income solutions RESIS group at Delaware Investments which includes the team its process and its institutional and retail products which he created during his prior time with the firm He also focuses on opportunities in Japan Singapore and Malaysia for the firm s global REIT product Additionally he serves as lead portfolio manager for the firm s Dividend Income products which he helped to create in the 1990s He is also a member of the firm s asset allocation committee which is responsible for building and managing multi asset class portfolios He rejoined Delaware Investments in May 2006 as senior portfolio manager and head of real estate securities In his first term with the firm he spent seven years as an analyst and portfolio manager leaving in 1999 to work at Chartwell Investment Partners where from 1999 to 2006 he was a partner and senior portfolio manager on Chartwell s Small Cap Value portfolio He began his career with The Boston Company where he held several positions in accounting and financial analysis Zenouzi earned a master s degree

    Original URL path: http://www.delawareinvestments.com/individual-investors/literature/insights/2015/real-estate-thrives-amid-healthy-capital-markets (2016-04-26)
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