DELAWARE GROUP® LIMITED-TERM
GOVERNMENT FUNDS
Delaware Limited-Term
Diversified Income Fund (the “Fund”)
Supplement
to the current Statutory Prospectus (the “Prospectus”)
and Statement
of Additional Information (the “SAI”)
The Board of Trustees
(“Trustees” or “Board”) of Delaware Group Government Fund (the “Trust”) approved the appointment
of Macquarie Investment Management Austria Kapitalanlage AG (“MIMAK”), Macquarie Investment Management Europe Limited
(“MIMEL”), and Macquarie Investment Management Global Limited (“MIMGL”) to serve as sub-advisors and provide
certain sub-advisory services to the Fund from time to time at the discretion of Delaware Management Company (the “Manager”).
In connection
therewith, the following replaces the information in the section of the Fund’s Prospectus entitled “Fund summary —
What are the Fund’s principal investment strategies?”:
Under normal
circumstances, the Fund will invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes,
in investment grade fixed income securities, including, but not limited to, fixed income securities issued or guaranteed by the
US government, its agencies or instrumentalities, and by US corporations (80% policy). Investment grade fixed income securities
are securities rated BBB- or higher by Standard & Poor’s Financial Services LLC (S&P) and Baa3 or higher by Moody’s
Investors Service, Inc. (Moody’s), or similarly rated by another nationally recognized statistical rating organization (NRSRO),
or those that are deemed to be of comparable quality. The Fund will maintain an average effective duration from one to three years.
The Fund’s investment manager, Delaware Management Company (Manager), will determine how much of the Fund’s assets
to allocate among the different types of fixed income securities in which the Fund may invest based on the Manager’s evaluation
of economic and market conditions and its assessment of the returns and potential for appreciation that can be achieved from various
sectors of the fixed income market. In addition, the Manager may seek investment advice and recommendations from its affiliates:
Macquarie Investment Management Europe Limited, Macquarie Investment Management Austria Kapitalanlage AG, and Macquarie Investment
Management Global Limited (together, the “Affiliated Sub-Advisors”). The Manager may also permit these Affiliated Sub-Advisors
to execute Fund security trades on behalf of the Manager and exercise investment discretion for securities in certain markets where
DMC believes it will be beneficial to utilize an Affiliated Sub-Advisor’s specialized market knowledge.
The corporate
debt obligations in which the Fund may invest include bonds, notes, debentures, and commercial paper of US companies and, subject
to the limitations described below, non-US companies. The Fund may also invest in a variety of securities that are issued or guaranteed
as to the payment of principal and interest by the US government, and by various agencies or instrumentalities, which have been
established or are sponsored by the US government, and, subject to the limitations described below, securities issued by foreign
governments.
Additionally,
the Fund may invest in mortgage-backed securities issued or guaranteed by the US government, its agencies or instrumentalities,
government-sponsored corporations, and mortgage-backed securities issued by certain private, nongovernment entities. The Fund may
also invest in securities that are backed by assets such as receivables on home equity and credit card loans, automobile, mobile
home, recreational vehicle and other loans, wholesale dealer floor plans, and leases.
The Fund may
invest up to 20% of its net assets in below-investment-grade securities (also known as high yield or “junk” bonds).
The Fund may
also invest up to 30% of its net assets in foreign securities, including up to 10% of its net assets in securities of issuers located
in emerging markets. The Fund’s total non-US dollar currency exposure will be limited, in the aggregate, to no more than
10% of its net assets.
The Fund may
use a wide range of derivatives instruments, typically including options, futures contracts, options on futures contracts, forward
foreign currency contracts, and swaps. The Fund will use derivatives for both hedging and nonhedging purposes. For example, the
Fund may invest in: futures and options to manage duration and for defensive purposes, such as to protect gains or hedge against
potential losses in the portfolio without actually selling a security, or to stay fully invested; forward foreign currency contracts
to manage foreign currency exposure; interest rate swaps to neutralize the impact of interest rate changes; credit default swaps
to hedge against a credit event, to gain exposure to certain securities or markets, or to enhance total return; and index swaps
to enhance return or to effect diversification. The Fund will not use derivatives for reasons inconsistent with its investment
objective and will limit its investments in derivatives instruments to 20% of its net assets.
The Fund’s
80% policy is nonfundamental and may be changed without shareholder approval. Fund shareholders would be given at least 60 days’
notice prior to any such change.
The following
information is added into the section of the Fund’s Prospectus entitled “Fund summary — Who manages the Fund?”:
Sub-advisors
Macquarie Investment
Management Austria Kapitalanlage AG
Macquarie Investment
Management Europe Limited
Macquarie Investment
Management Global Limited
The following
replaces the information in the section of the Fund's Prospectus entitled "How we manage the Fund — Our principal investment
strategies”:
The Manager
analyzes economic and market conditions, seeking to identify the securities or market sectors that the Manager believes are the
best investments for the Fund. Securities in which the Fund may invest include, but are not limited to, the following:
•securities
issued or guaranteed by the US government, such as US Treasurys;
•securities
issued by US government agencies or instrumentalities, such as securities of Ginnie Mae;
•investment
grade and below-investment-grade corporate bonds; nonagency mortgage-backed securities (MBS), asset-backed securities (ABS), commercial
mortgage-backed securities (CMBS), collateralized mortgage obligations (CMOs), and real estate mortgage investment conduits (REMICs);
•securities
of foreign issuers in both developed and emerging markets, denominated in foreign currencies and US dollars;
•bank loans;
and
•short-term
investments.
In addition,
the Manager may seek investment advice and recommendations from its affiliates: Macquarie Investment Management Europe Limited,
Macquarie Investment Management Austria Kapitalanlage AG, and Macquarie Investment Management Global Limited (together, the “Affiliated
Sub-Advisors”). The Manager may also permit these Affiliated Sub-Advisors to execute Fund security trades on behalf of the
Manager and exercise investment discretion for securities in certain markets where DMC believes it will be beneficial to utilize
an Affiliated Sub-Advisor’s specialized market knowledge.
Under normal
circumstances, the Fund will invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes,
in investment grade fixed income securities. The Fund may invest in debt obligations issued or guaranteed by the US government,
its agencies or instrumentalities, and by US corporations. The corporate debt obligations in which the Fund may invest include
bonds, notes, debentures, and commercial paper of US companies. The US government securities in which the Fund may invest include
a variety of securities that are issued or guaranteed as to the payment of principal and interest by the US government, and by
various agencies or instrumentalities, which have been established or are sponsored by the US government.
The Fund may
also invest in MBS issued or guaranteed by the US government, its agencies or instrumentalities, or by government-sponsored corporations.
Other MBS in which the Fund may invest are issued by certain private, nongovernment entities. The Fund may also invest in securities
that are backed by assets such as receivables on home equity and credit card loans, automobile, mobile home, recreational vehicle
and other loans, wholesale dealer floor plans, and leases.
The Fund maintains
an average effective duration from one to three years.
The Fund may
also invest up to 20% of its net assets in below-investment-grade securities (commonly known as high yield or “junk bonds”).
The Fund may invest in domestic corporate debt obligations, including notes, which may be convertible or nonconvertible, commercial
paper, units consisting of bonds with stock or warrants to buy stock attached, debentures and convertible debentures. The Fund
will invest in both rated and unrated bonds. Unrated bonds may be more speculative in nature than rated bonds.
The Fund may
also invest up to 30% of its net assets in foreign securities, including up to 10% of its net assets in securities of issuers located
in emerging markets. The Manager will limit the Fund’s investments in total non-US dollar currency to no more than 10% of
its net assets. The Fund will hedge its total foreign currency exposure. These fixed income securities may include foreign government
securities, debt obligations of foreign companies, and securities issued by supranational entities. A supranational entity is an
entity established or financially supported by the national governments of one or more countries to promote reconstruction or development.
Examples of supranational entities include, among others, the International Bank for Reconstruction and Development (more commonly
known as the World Bank), the European Economic Community, the European Investment Bank, the Inter-Development Bank, and the Asian
Development Bank.
The Fund may
invest in sponsored and unsponsored American depositary receipts (ADRs), European depositary receipts (EDRs), or global depositary
receipts (GDRs). The Fund may also invest in zero coupon bonds and may purchase shares of other investment companies.
The Fund will
invest in both rated and unrated foreign securities.
The Fund may
invest in securities issued in any currency and may hold foreign currencies. Securities of issuers within a given country may be
denominated in the currency of another country or in multinational currency units, such as the euro. The Fund may, from time to
time, purchase or sell foreign currencies and/or engage in forward foreign currency contracts in order to facilitate or expedite
settlement of Fund transactions and to minimize currency value fluctuations.
In addition
to the investments discussed above, the Fund may use a wide range of derivatives instruments, typically including options, futures
contracts, options on futures contracts, forward foreign currency contracts, and swaps. The Fund will use derivatives for both
hedging and nonhedging purposes. The Fund will not use derivatives for reasons inconsistent with its investment objective and will
limit its investments in derivatives instruments to 20% of its net assets.
The Fund’s
investment objective is nonfundamental. This means that the Fund’s Board of Trustees (Board) may change the objective without
obtaining shareholder approval. If the objective were changed, the Fund would notify shareholders at least 60 days before the change
became effective.
The following
information is added after the section of the Fund’s Prospectus entitled “Who manages the Fund — Investment manager”:
Sub-advisors
Macquarie
Investment Management Austria Kapitalanlage AG (MIMAK) is located at Kaerntner Strasse 28, 1010 Vienna, Austria. MIMAK is
an affiliate of the Manager and a part of Macquarie Investment Management (MIM).
MIM is the marketing name for certain companies comprising the asset management division of Macquarie Group Limited. As of December
31, 2018, MIM managed more than $234.5 billion in assets for institutional and individual clients. Although the Manager has
principal responsibility for the Manager’s portion of the Fund, the Manager may seek investment advice and recommendations
from MIMAK and the Manager may also permit MIMAK to execute Fund security trades on behalf of the Manager and exercise investment
discretion for securities in certain markets where DMC believes it will be beneficial to utilize MIMAK’s specialized market
knowledge.
Macquarie Investment
Management Global Limited (MIMGL), is located at 50 Martin Place, Sydney, Australia. MIMGL is an affiliate of the Manager and a
part of MIM. MIM is the marketing name for certain companies comprising the asset
management division of Macquarie Group Limited. As of December 31, 2018, MIM managed more than $234.5 billion in assets for institutional
and individual clients. Although the Manager has principal responsibility for
the Manager’s portion of the Fund, the Manager may seek investment advice and recommendations from MIMGL and the Manager
may also permit MIMGL to execute Fund security trades on behalf of the Manager and exercise investment discretion for securities
in certain markets where DMC believes it will be beneficial to utilize MIMGL’s specialized market knowledge.
Macquarie Investment
Management Europe Limited, (MIMEL), is located at 28 Ropemaker Street, London, England. MIMEL is an affiliate of the Manager
and a part of MIM. MIM is the marketing name for certain companies comprising
the asset management division of Macquarie Group Limited. As of December 31, 2018, MIM managed more than $234.5 billion in assets
for institutional and individual clients. Although the Manager has principal responsibility for
the Manager’s portion of the Fund, the Manager may seek investment advice and recommendations from MIMEL and the
Manager may also permit MIMEL to execute Fund security trades on behalf of the Manager and exercise investment discretion
for securities in certain markets where DMC believes it will be beneficial to utilize MIMEL’s specialized market knowledge.
The following
information is added after the section of the Fund’s SAI entitled “Investment Manager and Other Service Providers —
Investment Manager”:
Sub-Advisors
The
Manager has also entered into Sub-Advisory Agreements on behalf of Delaware Limited-Term Diversified Income Fund with Macquarie
Investment Management Austria Kapitalanlage AG, Macquarie Investment Management Global Limited, and Macquarie Investment
Management Europe Limited, each of which is an affiliate of the Manager (“Affiliated Sub-Advisor”). Pursuant to the
terms of the relevant Sub-Advisory Agreement, the investment sub-advisory fee is paid by the Manager to each Affiliated Sub-advisor
based on the extent to which an Affiliated Sub-Advisor provides services to the Fund.
Because
everyone's tax situation is unique, you should consult your tax professional about federal, state, local, or foreign tax consequences
before making an investment in the Fund.
Delaware
Management Company (Manager) is an indirect wholly owned subsidiary of Macquarie Group Limited (MGL). Other than Macquarie Bank
Limited (MBL), a subsidiary of MGL and an affiliate of the Manager, 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.
Please
keep this Supplement for future reference.
This Supplement
is dated June 28, 2019.
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