archive-com.com » COM » D » DELAWAREINVESTMENTS.COM

Total: 288

Choose link from "Titles, links and description words view":

Or switch to "Titles and links view".
  • A tale of two...worlds: The great divide in today’s global real estate market
    investors should be underweight in China over time because according to our analysis volumes have dropped by 35 40 in secondary and tertiary cities and such a change has typically preceded a price drop As far as the divergence between developed and emerging markets that we see today we have come to a place over the last 10 years in which capital has been increasingly crossing borders Australian companies had the cost of capital advantage from 2003 to 2007 when 26 according to our analysis of their REIT properties were in the U S because they could buy at high cap rates and create a positive spread Today U S REITs have the cost of capital advantage and many have taken advantage of the stress in Europe to look for opportunities there Almost every developed region in the world is now trying to lower its cost of capital In the developing markets we re seeing the opposite They re trying to slow their economies due to inflation of credit and wages and house price appreciation What indicators we re watching now our outlook for the sector The main drivers for real estate are fundamentals and the cost and availability of debt and equity capital If we were to see the fundamentals driven by supply starting to increase in any region it would be cause for worry If we were to see the cost of capital rising in any region we would worry We re not seeing that to any degree in the U S Even when Treasury rates went up last year spreads came down so the cost of money never really went up for REITs Europe has seen declining cost of money and very little supply The U K could see a rise in cost of capital as the Bank of England has hinted and some supply is now coming on Australia is still favorable in our opinion Rates were lowered and the economy appears steady so we re bullish on office and certain residential regions there Regarding our outlook for global REITs we think what has changed over the last five to six years is hopefully less of a boom bust cycle for real estate Steady rental growth and less supply potentially could make for less volatile returns In our opinion gradually rising rates actually would be a good environment for real estate because it would mean the economy is getting better and with that growth could pick up and rents could rise We worry more about getting a short term spike in rates which would not be good for income generating securities Also we are watching the duration of leases during rising rates because shorter duration leases can reprice their rents more quickly than longer duration leases Heading into the last crisis many REIT CEOs were the founders of their companies which they built over 30 years Almost losing their companies was an aha moment Since then they have learned to be more conservative They have raised

    Original URL path: http://www.delawareinvestments.com/individual-investors/literature/insights/2014/the-great-divide-global-real-estate-market (2016-04-26)
    Open archived version from archive


  • Choppy waters continue for Puerto Rican debt
    revenue increases and austerity measures and a new preference for shifting fiscal pressures to creditors which in our view has implications for all of Puerto Rico s debt including that of the central government Application of the law may further limit the commonwealth s market access leaving it more vulnerable to financial risk and unable to fund capital projects The reaction to the downgrade has been decidedly negative Puerto Rico debt has since traded down significantly and has been volatile It s not a surprising outcome and we are concerned that this attempt to protect the Commonwealth by ring fencing public corporations may have backfired and worse it may have jeopardized its credibility As noted in the Moody s statement above Puerto Rico may have impaired its ability to access the market which could further exacerbate its debt crisis Our exposure It s fair to say that we have a de minimis position in Puerto Rico issues Aside from some pre refunded debt and escrowed bonds we own a single bond in the healthcare sector a revenue bond issued on behalf of one of Puerto Rico s predominant hospitals it is not a general obligation bond and therefore does not depend exclusively on government coffers Other than that we have no exposure to Puerto Rico debt At this writing we are monitoring for potential investment opportunities at significantly discounted levels but we have not participated in the market And quite frankly we would rather miss a rally and pay higher prices for Puerto Rico debt so long as we have a higher level of confidence that the debt will be serviced Video A second headwind for municipal markets In addition to Puerto Rico s teetering finances pension deficits at the state and local level are additional sources of pressure for municipal securities Here Greg briefly describes his team s point of view The views expressed represent the Manager s assessment of the market environment as of August 2014 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 may be affected by economic conditions that hinder an issuer s ability to make interest and principal payments on its debt The Fund may also be subject to prepayment risk the risk that the principal of a fixed

    Original URL path: http://www.delawareinvestments.com/individual-investors/literature/insights/2014/choppy-waters-continue-for-puerto-rican-debt (2016-04-26)
    Open archived version from archive

  • Money market funds in the 21st century
    their portfolio of securities as collateral in repurchase agreements with cash investors This large and opaque market is a critical component that helps keep finance and trading moving representing the largest source of borrowing for broker dealers During the 2008 crisis this market turned treacherous when mistrust led to the seizure of the market The Fed had to backstop repo lending to prevent a systemic failure The 2010 Dodd Frank Act made it more difficult for the central bank to take similar actions in the future and along with Basel III international regulatory agreements addressed the systemic risk imposed by repo markets Under Basel III beginning in 2015 large banks will be required to report supplementary leverage ratios SLR In July 2013 the Fed Federal Deposit Insurance Corporation FDIC and Office of the Comptroller of the Currency OCC released an enhanced supplementary leverage ratio which required a tougher 5 minimum Tier 1 SLR for U S bank holding companies and a 6 minimum for insured depositories Under SLR a bank will be required to hold 5 or 6 of capital for every 100 of assets independent of the riskiness of the asset This lowers the return on leveraged capital for securities especially repo which is at the lower end of the return spectrum and increases it for riskier investments such as loans More recently some Fed officials suggested that the SEC should consider imposing higher capital requirements on broker dealers that are not owned by banks and would not fall under the regulation of the Fed further limiting the usage of short term repo View chart Chart 3 Higher repo rates at the end of each month Source Goldman Sachs Research We believe banks will not wait until 2015 to begin implementation Players have started reducing their footprint in repo markets cutting back significantly in the first half of this year The Fed s introduction of the reverse repo facility and the money market reforms mentioned above should lead to further shrinking in our opinion On a more micro level it is important for us to highlight the impact on market liquidity Until the most recent SLR proposal banks quarterly SLR was calculated as the average SLR at the end of the three months during the quarter This in turn put pressure on the repo market at the end of each month as banks pulled back from the market manifesting itself in higher costs as repo rates on months ends have been higher on average than intramonth rates In May 2014 Goldman Sachs published a report calculating repo rates on the last day of the month as a ratio of the average repo rate intramonth showing a consistent pattern of higher repo rates at the end of months View chart Chart 4 Spikes in month end repo rates correspond with constrained liquidity These spikes in month end repo rates correspond with increased usage of the Fed s facility around the same time a sign of constrained liquidity Source Goldman Sachs

    Original URL path: http://www.delawareinvestments.com/individual-investors/literature/insights/2014/money-market-funds-in-the-21st-century (2016-04-26)
    Open archived version from archive

  • Active investing in the small-cap space
    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 Narrowly focused investments may exhibit higher volatility than investments in multiple industry sectors 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 Investments in small and or medium sized companies typically exhibit greater risk and higher volatility than larger more established companies Alpha measures the portion of an investment s total return that is independent of general market movements In the case of mutual funds alpha typically describes the portion of returns that is attributable to the investment s inherent value apart from the portion of returns that can be attributed to broader market fluctuations Kelley A McKee Portfolio Manager Equity Analyst View bio More from Kelley A McKee Corporate spending tilted toward shareholder friendly activities Optimism amid slower growth in manufacturing Capital spending In search of momentum See all from this author See all from this team Kelley A McKee biography Kelley A McKee CFA Vice President Portfolio Manager Equity Analyst Kelley A McKee is a portfolio manager for the Small Cap Value Mid Cap Value Equity team she joined the team in July 2005 as an equity analyst She is responsible for the analysis purchase and sale recommendations of basic industry capital spending and utilities securities for the firm s Small Cap Value Mid Cap Value portfolios Prior to joining Delaware Investments she

    Original URL path: http://www.delawareinvestments.com/individual-investors/literature/insights/2014/active-investing-in-the-small-cap-space (2016-04-26)
    Open archived version from archive

  • Monetary policy in the 21st century — the Fed's path toward normalization
    expected to affect bank demand for excess liquidity and are viewed by many as the Fed s main policy lever IOER represents the rate that banks earn on cash deposited at the Fed while rates observed in the money markets commercial paper CDs and term deposits are rates that banks are willing to pay to borrow funds Since banks are in the business of earning a spread between assets and liabilities most short term bank funding markets clear at rates below IOER and banks will continue to be able to enjoy this arbitrage Nonbank participants broker dealers government sponsored enterprises GSEs money market funds and asset managers are ineligible to earn IOER The reverse repo facility RRF with an interest rate set below the IOER opens the Fed s balance sheet to securities lending to these market participants and provides a floor under money market rates and a mechanism to extract cash from the system Regarding the repo facility the Fed expressed concern that large usage would dis intermediate repo traders and pose a risk during times of stress since market participants with money would bypass the financial and non financial institutions who are dependent on short term financing and just engage with the Fed as a preferred counterparty As a result of these concerns there could be further design features including constraints on usage either in aggregate or by counterparty and a relative wide spread between IOER and the rate offered via the repo facility In addition the Fed is looking at other tools like the term deposit facility TDF and the term reverse repo facility TRRF in order to set term deposit rates which will also be available to banks TDF testing has increased lately however it is unclear how large a role these secondary tools will play The Fed has emphasized a simple and clear approach to normalization and would have to pay an attractive rate to lock up term funds Moreover term deposits likely do not qualify as high quality liquid assets which would disincentivize bank usage given regulatory capital constraints The new Fed toolkit The Fed also indicated that the initial exit strategies regarding its portfolio holdings are in the process of being changed Reinvestment of portfolio paydowns in agency MBS will likely continue through the first rate hike and the sale of securities seems to be off the table Instead Fed officials seem more inclined to use run off to gradually shrink the Fed s balance sheet over time It could take well into the 2020s before the balance sheet falls to a pre crisis percentage of gross domestic product Many questions remain regarding the Fed s ability to exit unconventional monetary policy as its balance sheet has swelled The Fed is still in the process of writing this new chapter of normalized policy and we look forward to learning more details as we advance through this uncharted territory The risks that this normalization process could present further highlight the importance of the research

    Original URL path: http://www.delawareinvestments.com/individual-investors/literature/insights/2014/monetary-policy-in-the-21st-century-the-feds-path-toward-normalization (2016-04-26)
    Open archived version from archive

  • Municipal market snapshot: Year-to-date performance drivers and outlook
    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 Fund may also be subject to prepayment risk the risk that the principal of a fixed income security that is held by the Fund may be prepaid prior to maturity potentially forcing the Fund to reinvest that money at a lower interest rate Interest payments on inflation indexed debt securities will vary as the principal and or interest is adjusted for inflation Substantially all dividend income derived from tax free funds is exempt from federal income tax Some income may be subject to the federal alternative minimum tax AMT that applies to certain investors Capital gains if any are taxable Greg Gizzi Senior Portfolio Manager View bio More from Greg Municipal bonds and rising interest rates A historical perspective Despite periods of cooling in 2015 municipals generally see support Municipal markets at midyear A focus on the Fed rating agencies See all from this author See all from this team Greg Gizzi biography Greg Gizzi Senior Vice President Senior Portfolio Manager Gregory A Gizzi is a member of the firm s municipal fixed income portfolio management team He is also a co portfolio manager of the firm s municipal bond funds and several client accounts Before joining Delaware Investments in January 2008 as head of municipal bond trading he spent six years as a vice president at Lehman Brothers for the firm s tax exempt institutional sales effort Prior to that

    Original URL path: http://www.delawareinvestments.com/individual-investors/literature/insights/2014/municipal-market-snapshot-year-to-date-performance-drivers-and-outlook (2016-04-26)
    Open archived version from archive

  • Labor market could continue to stanch inflation
    PCE has run below target for two years see chart at bottom It has picked up recently sparking a barrage of headlines but it is still well within reasonable noninflationary territory The downward tug of labor markets has been a big reason In large part the labor market s problems are structural in nature In other words the job market has changed so much since the recession that there is now a mismatch between what employers need and what job seekers can offer Technological advances consolidation of redundancies within industries and even a repressed housing market could potentially keep this imbalance going well into the future A nod to some positive data The insecure state of the employment picture does not preclude some positive developments Indeed there is a higher degree of labor tightness in certain occupations oil field jobs in the Midwest are notable examples along with construction jobs in very specific areas of the country Moreover the Bureau of Labor Statistics has reported a decrease in the number of job seekers per job opening and in what might be considered one of the lesser followed metrics the so called quit rate is up meaning that more people are leaving ho hum jobs in order to accept positions that are more suitable to their backgrounds and skills View chart Inflation In a word mild and a reminder to keep a moderate view In spite of the trickling of positive news so far the upticks have been very modest current conditions suggest that a sudden upward spiral in prices is not imminent and inflation readings could very likely remain moderate for some time Absent a dramatic recovery soft labor markets should continue to be a major factor Chart shown is for comparison purpose only Quarterly observations Data Bureau of Economic Analysis via the Federal Reserve Bank of St Louis The views expressed represent the Manager s assessment of the market environment as of June 2014 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 Paul A Matlack Senior Portfolio Manager Fixed Income View bio More from Paul A Matlack Bond market playbook Diversification risk control and patience Subdued inflation can be costly Delaware Investments A proprietary independent view of credit research See all from this author See all from this team Paul A Matlack biography Paul A Matlack CFA Senior Vice President Senior Portfolio Manager

    Original URL path: http://www.delawareinvestments.com/individual-investors/literature/insights/2014/labor-market-could-continue-to-stanch-inflation (2016-04-26)
    Open archived version from archive

  • Municipal bonds: A solid option for capturing yield at reasonable risk
    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 Fixed income securities can lose value and investors can lose principal as interest rates rise They also may be affected by economic conditions that hinder a issuer s ability to make interest and principal payments on its debt Fixed income securities may also be subject to prepayment risk the risk that the principal of a fixed income security may be prepaid prior to maturity potentially forcing the investor 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 Substantially all dividend income derived from tax free funds is exempt from federal income tax Some income may be subject to the federal alternative minimum tax AMT that applies to certain investors Capital gains if any are taxable Funds that invest primarily in one state may be more susceptible to the economic regulatory and other factors of that state than a fund that invests more broadly Substantially all dividend income derived from tax free funds is exempt from federal income tax Capital gains if any are taxable Some income may be subject to the federal alternative minimum tax that applies

    Original URL path: http://www.delawareinvestments.com/individual-investors/literature/insights/2014/municipal-bonds-a-solid-option (2016-04-26)
    Open archived version from archive



  •