4 / 5 Stars
2 2 4 4 3
Zacks Investment Research
Standard & Poor's
3 / 5 Stars
#116 in Intermediate-Term Bond
U.S. News evaluated 280 Intermediate-Term Bond Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
The fund has returned 0.93 percent over the past year, 4.29 percent over the past three years, 9.31 percent over the past five years, and 6.33 percent over the past decade.
|Trailing Returns||Updated 02.28.2014|
|Year to date||2.3%|
|3 Years (Annualized)||4.3%|
|5 Years (Annualized)||9.3%|
|10 Years (Annualized)||6.3%|
The team-managed Delaware Diversified Income fund capitalizes on the strengths and expertise of about 70 research analysts, portfolio managers, and traders to identify picks in a diverse range of bond sectors, including investment grade, high-yield, and emerging markets.
As of March 05, 2014, the fund has assets totaling almost $5.84 billion invested in 1,319 different holdings. Its portfolio primarily consists of intermediate-term bonds of U.S. and foreign corporations.
Fund manager Paul Grillo says the fund provides a one-stop shop for investors looking for broad fixed-income exposure. Although U.S. corporate bonds make up the lion’s share of the fund’s investments (47 percent of its bond portfolio as of the end of 2010), management isn’t afraid to dabble in foreign corporates and sovereign debt, as well as mortgage-backed securities.
Grillo says the fund has found more opportunity in the corporate bond market recently, but is also keeping an eye on high-yield bonds and bank loans. The fund has been characterized as aggressive in the past, but Grillo says management has pulled back from the bolder strategy it followed in 2008 and 2009. “We are carrying less of an aggressive position through this recovery than we would have in past recoveries,” Grillo says. He cites the fragile state of economic improvement as the primary reason for the fund’s more tentative approach. “[The recovery] is being propped up by a significant stimulus both on the fiscal and the monetary side,” he says. “There’s still a significant delivering that needs to take place in many of these sectors that will influence price as we move through this recovery.” The fund has returned 0.93 percent over the past year and 4.29 percent over the past three years.
The fund's long-term numbers are among the best in its Morningstar category. The fund has returned 9.31 percent over the past five years and 6.33 percent over the past decade.
Management uses a total-return strategy to invest across a broad swath of bond sectors, including U.S. treasuries, foreign sovereign debt, domestic and foreign corporates, mortgages, asset-backed securities, and emerging-markets bonds. “This is really a bond picker’s portfolio,” Grillo says. “It makes uses of the extensive resources we have of about 70 people involved in fundamental research.”
With its intermediate-term outlook, Grillo says the fund is a better fit for investors with longer-term objectives for building wealth.
Role in Portfolio
Morningstar calls this fund a supporting player.
Paul Grillo runs the fund, supported by Kevin Loome, Roger Early, Wen-Dar Chen, and Thomas Chow.
Delaware Diversified Income Fund has an expense ratio of 0.90 percent.
Exposure to high-yield and emerging-markets debt can increase volatility.