Beginning on or about June 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of your Fund’s shareholder reports will no longer be sent to you by mail, unless you specifically request them from the Fund or from your financial intermediary, such as a broker/dealer, bank, or insurance company. Instead, you will be notified by mail each time a report is posted on the website and provided with a link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you do not need to take any action. You may elect to receive shareholder reports and other communications from the Fund electronically by signing up at delawarefunds.com/edelivery. If you own these shares through a financial intermediary, you may contact your financial intermediary.

You may elect to receive paper copies of all future shareholder reports free of charge. You can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by contacting us at 800 523-1918. If you own these shares through a financial intermediary, you may contact your financial intermediary to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held with the Delaware Funds^® by Macquarie or your financial intermediary.

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Macquarie Asset Management (MAM) offers a diverse range of products including securities investment management, infrastructure and real asset management, and fund and equity-based structured products. MIM is the marketing name for certain companies comprising the asset management division of Macquarie Group. This includes the following investment advisers: Macquarie Investment Management Business Trust (MIMBT), Macquarie Funds Management Hong Kong Limited, Macquarie Investment Management Austria Kapitalanlage AG, Macquarie Investment Management Global Limited, Macquarie Investment Management Europe Limited, Macquarie Capital Investment Management LLC, and Macquarie Investment Management Europe S.A.

The Fund is distributed by Delaware Distributors, L.P. (DDLP), an affiliate of MIMBT and Macquarie Group Limited.

Other than Macquarie Bank Limited (MBL), none of the entities noted 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 MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities, unless noted otherwise. The Fund is governed by US laws and regulations.

Table of contents

The investment objective of the Fund is to seek maximum total return, consistent with reasonable risk.

Market review

The major theme of the Fund’s fiscal year was the great monetary policy pivot. As 2019 began, the US Federal Reserve was contemplating four additional rate hikes, adding to the increases implemented in 2018. It soon became apparent, however, that further hikes were untenable. The US economy, though among the strongest globally, was no longer able to sustain a 10-year interest rate above 3% or a federal funds rate in the mid-2% range.

As 2019 began, US economic indicators started to flash yellow while global financial conditions were flashing red. At the end of 2018, a sharp drop in liquidity led to a dramatic widening of credit spreads – the difference between yields on corporate bonds and yields on Treasury securities – and a significant decline in equities, reflecting the ongoing unhealthy dependence of asset prices on monetary policy. By mid-2019, there were other signs of an impending global slowdown as well, including corporate earnings’ deceleration, the continuing US-China trade dispute, and ongoing unease around Brexit. The growing number of populist uprisings, including those in Latin American nations, Hong Kong, and Lebanon,

was also significant. All of this contributed to a rise in global unease.

This prompted the Fed and central banks in Australia, Europe, and the United Kingdom to shift to a more accommodative monetary policy. In the US, after signaling a hold on further rate hikes early in 2019, the Fed terminated quantitative tightening and balance-sheet reductions. Three interest rate cuts of 0.25 percentage points each followed in August, September, and October.

Within the Fund

For its fiscal year ended Dec. 31, 2019, Delaware Limited-Term Diversified Income Fund outperformed its benchmark, the Bloomberg Barclays 1–3 Year US Government/Credit Index. The Fund’s Institutional Class shares gained 4.67%. The Fund’s Class A shares advanced 4.51% at net asset value and 1.64% at maximum offer price (both returns reflect all distributions reinvested). For the same period, the Fund’s benchmark gained 4.03%. Complete annualized performance for Delaware Limited-Term Diversified Income Fund is shown in the table on page 4.

The Fund entered the year with a barbell positioning – a strategy that involves purchasing both short- and long-term bonds in an attempt to seek better risk adjusted returns. The anchor on the short end contained about 35% of the Fund’s

assets in floating-rate securities, primarily in asset-backed securities. Much of those asset-backed floaters were prime consumer receivables at the top of the capital structure in auto loans and consumer credit card loans. That anchor allows the Fund to own other, somewhat more volatile, securities – particularly corporate credit – on the long end of the barbell. Because they are further out on the yield curve, they provide the opportunity to pick up income while allowing the Fund to maintain a similar duration overall to the benchmark. We believe this enables a potential yield advantage over the benchmark without taking additional interest rate risk relative to the benchmark.

Early in the year, the Fund, by design, had three times as much exposure to corporate credit as the benchmark. This overweighting to credit risk was favorable as the Fed pivoted to a more accommodative monetary policy as it supported riskier assets. The Fund’s curve position was also positive since it was beneficial to be further up the yield curve within corporate credit.

As the year progressed, valuations became less attractive. Accordingly, about halfway through the year, we reduced the Fund’s corporate credit exposure from three times to two times that of the benchmark and maintained our yield advantage over the benchmark. We waited for market dynamics to shift and valuations to approach what we felt was close to their full potential before repositioning holdings, as we believed the Fund was positioned well for the Fed’s pivot.

The biggest driver of the Fund’s relative performance was our overweight to corporate credit during a year in which investors embraced risk assets. Within corporate credit, our overweight to financials, particularly banking, added to relative performance, compounded by strong security selection within the corporate sector.

Our floating rate positions were major detractors from the Fund’s relative performance, as these

positions produced lower-than-benchmark returns. But because the Fund uses the sector as a barbell anchor, we were willing to trade off lower yields there in exchange for potentially much higher returns elsewhere. The Fund’s position in mortgage-backed securities (MBS) also detracted. We had some interest-only securities and short-end securities in place as protection in case rates rose. However, rates didn’t rise, and these securities performed quite poorly, dragging down the Fund’s overall performance within mortgages. Because mortgages are an out-of-benchmark sector and underperformed the benchmark, that allocation also detracted from performance.

When we assess market risks, we consider that geopolitical concerns, including the 2020 US election, are likely to be a factor, along with persistent weak global growth. Corporate credit exposure also involves some risk, in part because we’re still at full valuations. To offset that to a certain extent, the Fund is maintaining high-quality duration within its Treasury holdings.

As needed, we can shift assets from corporate bonds to longer-term Treasurys. Within Treasurys, we can extend a number of shorter floating-rate securities further out while doing the reverse within corporate credit, bringing down duration there as an offset. Because we don’t want duration or interest rate movement to determine how the Fund performs, we remain close to the benchmark on duration. That allows security selection within corporate credit and mortgages to drive our performance going forward. We believe that is where we can possibly gain a yield advantage without taking additional interest rate risk relative to the benchmark.

Although there certainly are risks ahead in corporate credit, we remain confident in our allocation. If the market experiences heightened volatility, we believe we can expect the Fed to support risk assets. We believe that opportunities remain within corporate credit, particularly in higher-quality issues. For example, because banks

are highly regulated, they are less exposed to event risk. Overall, the Fund is much closer to neutral on a market value basis, as it has become harder to find value within corporate credit.

During 2019, the Fund used financial futures and high yield credit default swaps. We used financial futures to manage duration, which fluctuated regularly throughout the year. The Fund used high yield credit default swaps to offset some of its high yield and bank loan exposure. As a hedge,

credit default swaps averaged about 8% to 10% of the Fund’s allocation throughout the year, while the Fund’s high yield and bank loan exposure averaged about 12%. Although the high yield credit default swaps detracted from Fund performance by about 65 basis points, the net effect was just 5 basis points after considering the

positive returns generated by high yield bonds and bank loans. (A basis point equals one hundredth of a percentage point.)

¹ Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 6. Performance would have been lower had expense limitations not been in effect.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service (12b-1) fee.

Class A shares are sold with a maximum front-end sales charge of 2.75%, and have an annual 12b-1 fee of 0.25% of average daily net assets. This fee was contractually limited to 0.15% of average daily net assets from Jan. 1, 2019 through Dec. 31, 2019.* Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-1 fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

Class R shares are available only for certain retirement plan products. They are sold without a sales charge and have an annual 12b-1 fee of 0.50% of average daily net assets.

Class R6 shares are available only to certain investors. In addition, Class R6 shares do not pay any service fees, sub-accounting fees, and/or sub-transfer agency fees to any brokers, dealers, or other financial intermediaries. Class R6 shares pay no 12b-1 fee.

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 bond that is held by a portfolio will be prepaid prior to maturity, at the time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.

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.

An investment in asset-backed securities may involve risks. Asset-backed securities are often

backed by a pool of assets representing the obligations of a number of different parties. The rate of principal payment on asset-backed securities generally depends on the rate of principal payments received on the underlying assets.

Mortgage-backed securities are fixed income securities that represent pools of mortgages, with investors receiving principal and interest payments as the underlying mortgage loans are paid back. Many are issued and guaranteed against default by the US government or its agencies or instrumentalities, such as Freddie Mac, Fannie Mae, and Ginnie Mae. Others are issued by private financial institutions, with some fully collateralized by certificates issued or guaranteed by the US government or its agencies or instrumentalities.

If and when the Fund invests in forward foreign currency contracts or uses other investments to hedge against currency risks, the Fund will be subject to special risks, including counterparty risk.

The Fund may invest in derivatives, which may involve additional expenses and are subject to risk, including the risk that an underlying security or securities index moves in the opposite direction from what the portfolio manager anticipated. A derivatives transaction depends upon the counterparties’ ability to fulfill their contractual obligations.

International investments entail risks not ordinarily associated with US investments including fluctuation in currency values, differences in accounting principles, or economic or political instability in other nations. Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility and lower trading volume.

Diversification may not protect against market risk.

LIBOR risk is the risk that potential changes related to the use of the London Interbank

Offered Rate (LIBOR) could have adverse impacts on financial instruments which reference LIBOR. The potential abandonment of LIBOR could affect the value and liquidity of instruments which reference LIBOR.

* The aggregate contractual waiver period covering this report is from May 1, 2018 through April 30, 2020.

¹The “Performance of a $10,000 investment” graph assumes $10,000 invested in Institutional Class and Class A shares of the Fund on Dec. 31, 2009, and includes the effect of a 2.75% front-end sales charge (for Class A shares) and the reinvestment of all distributions. The graph does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 6. Please note additional details on pages 4 through 8.

The graph also assumes $10,000 invested in the Bloomberg Barclays 1–3 Year US Government/Credit Index as of Dec. 31, 2009. The Bloomberg Barclays 1–3 Year US Government/Credit Index is a market value-weighted index of government fixed-rate

debt securities and investment grade US and foreign fixed-rate debt securities with average maturities of one to three years.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.