Q: “So going into 2017, what do you think investors should be doing in terms of preparing for diversifying assets?”
A: Diversification is a way that we can address and risk-manage our portfolios with the ultimate goal of delivering superior risk-adjusted returns for our clients. We’ve always focused on delivering superior risk-adjusted returns and we do that by taking up the risk when we believe that it is an appropriate time to do that and there are abundant opportunities to do so. But we also have to dial back that risk when we think we are no longer being adequately compensated for those risks. When you think about as we transition into 2017, we believe that managers are going to be facing a lot of similar challenges that they have in years past, and that’s in large part because the anticipation is that we will continue to see relatively benign economic growth, and it won’t provide the necessary springboard to see higher rates.
In fact, what you can see is almost a gravitational pull on interest rates from some of the structural headwinds that we’re still facing, not only domestically but globally, around issues such as negative demographic trends in the developed world, or just excessive debt levels. So, as we transition into 2017, income is going to continue to be a key focus, and we’ll continue to look at global markets for diversification benefits and superior risk-adjusted returns. But it is important that we do not forget where we’ve come from in the last several years, as excess liquidity has resulted in asset prices that at times haven’t really lined up with the underlying fundamentals. So it’s important that we do our homework on behalf of our clients during this time period.
The views expressed represent the Manager’s assessment of the market environment as of December 2016 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.
Past performance does not guarantee future results.
Investing involves risk, including the possible loss of principal.
Carefully consider a Fund’s investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Fund’s prospectus and its summary prospectus, which may be obtained by visiting delawareinvestments.com/literature or calling 800 523-1918. Investors should read the prospectus and the summary prospectus carefully before investing.
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.
Delaware Investments, a member of Macquarie Group, refers to Delaware Management Holdings, Inc. and its subsidiaries, including the Funds' investment manager, Delaware Management Company (DMC), and the Funds’ distributor, Delaware Distributors, L.P. Macquarie Group refers to Macquarie Group Limited and its subsidiaries and affiliates worldwide. DMC, a series of Delaware Management Business Trust, is a U.S. registered investment advisor.
Neither Delaware Investments nor its affiliates noted in this document 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 Macquarie Bank Limited (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities, unless noted otherwise.
© 2017 Delaware Management Holdings, Inc.  2/17