FRCEX — Delaware Covered Call Strategy Fund
Data updated: 2024-05-28
FRCEX — Delaware Covered Call Strategy Fund. United States Large Cap Blend / Core Equity · $69.69M AUM. Holdings, fees, performance and SEC filings.
FRCEX Fund Overview
FRCEX — Delaware Covered Call Strategy Fund is a US mutual fund managed by Delaware Group Equity Funds IV, categorised as United States Large Cap Blend / Core Equity. ABC INVEST provides holdings, performance, costs, cashflows, risk data, prospectus documents and SEC filings, sourced from SEC filings.
- Type: US mutual fund
- Manager: Delaware Group Equity Funds IV
- Category: United States Large Cap Blend / Core Equity
- Assets under management: $69.69M
- 1-year return: 17.9%
- Ticker: FRCEX
- SEC CIK: 0000778108
- SEC series ID: S000065913
- Share class ID: C000212921
FRCEX Investment Objective and Strategy
Delaware Covered Call Strategy Fund describes its objective and strategy as follows, from its latest prospectus filed with the SEC by Delaware Group Equity Funds IV.
Investment objective
Delaware Covered Call Strategy Fund seeks long-term capital appreciation.
Principal investment strategy
The Fund invests in a portfolio of equity securities and writes (sells) call options on those securities. Under normal circumstances, the Fund writes (sells) call options on at least 80% of the Funds total assets (80% policy). The Fund normally writes (sells) covered call options listed on US exchanges on the equity securities held by the Fund to seek to lower the overall volatility of the Funds portfolio, protect the Fund from market declines, and generate income. The call options written (sold) by the Fund will generally have an exercise price that is above the market price of the underlying security at the time the option is written (sold). The Funds equity investments consist primarily of common stocks of large-size US companies (companies over $10 billion in market capitalization), certain of which may pay dividends, and US dollar-denominated equity securities of foreign issuers (i.e., American Depositary Receipts (ADRs)) traded on US securities exchanges.
To a lesser extent, the Fund may also invest in and write (sell) covered call options on securities of mid- and small-capitalization issuers and exchange-traded funds (ETFs) that track certain market indices, such as the S&P 500. The nature of the Fund is such that it may be expected to underperform equity markets during periods of sharply rising equity prices; conversely, the Fund seeks to reduce losses relative to equity markets during periods of declining equity prices. A call option gives the purchaser of the option the right to buy, and the writer, in this case, the Fund, the obligation to sell, the underlying security at the exercise price at any time prior to the expiration of the contract, regardless of the market price of the underlying security during the option period. Covered call options may be sold up to the number of shares of the equity securities held by the Fund.
In selecting investments, Ziegler Capital Management, LLC (ZCM), the Funds sub-advisor, considers the following, among other criteria: a) companies in an industry with a large market share or significant revenues that fit the Funds investment strategy; b) companies with new products or new management to replace underperforming management; c) recent or anticipated fundamental improvements in industry environment; and d) companies that are out of favor. Call options written by the Fund are designed to create income, lower the overall volatility of the Funds portfolio, and mitigate the impact of market declines. ZCM considers several factors when writing (selling) call options, including the overall equity market outlook, sector and/or industry attractiveness, individual security considerations, and relative and/or historical levels of option premiums.
Premiums received for a call option the Fund writes will be treated as a short-term capital gain if the option expires. The Fund may sell a security based on the following, among other criteria: a) an actual or anticipated significant decline in an issuers profitability and/or a significant negative outlook from management; b) a large appreciation in the stock price that leads to overvaluation relative to itself and its peers historically; c) significant management turnover at the senior level; or d) an industry-wide decrease in demand for an issuers products or services. ZCM writes call options based upon its outlook on the economy and stock market and analysis of individual stocks, which can impact the exercise price and expiration of a call option. Generally, higher implied volatility will lead to longer expirations, locking in potentially higher call premiums, whereas lower implied volatility will tend to lead to shorter-dated options.
The writing of covered call options may result in frequent trading and a high portfolio turnover rate. Additionally, from time to time, in pursuing its investment strategies, the Fund may hold significant investments (25% or more of its assets) in a specific market sector, including the information technology sector.
FRCEX Holdings
Top 10 holdings of Delaware Covered Call Strategy Fund by percentage of net assets, from the fund's latest SEC N-PORT filing.
| Holding | % of net assets |
|---|---|
| Alphabet Inc | 8.17% |
| Apple Inc | 8.10% |
| Microsoft Corp | 7.49% |
| Home Depot Inc/The | 6.88% |
| NVIDIA Corp | 6.87% |
| UnitedHealth Group Inc | 6.32% |
| Mastercard Inc | 5.80% |
| BlackRock Inc | 5.62% |
| Costco Wholesale Corp | 5.57% |
| Broadcom Inc | 5.14% |
FRCEX Portfolio Allocation
Asset-class allocation of Delaware Covered Call Strategy Fund by percentage of net assets, from the latest SEC N-PORT filing.
| Asset class | Allocation |
|---|---|
| Equity | 99.4% |
| Cash & Equivalents | 3.4% |
FRCEX Performance
Total returns for FRCEX (as of 2026-10-01), from SEC filings.
| Period | Total return |
|---|---|
| 1 year | 17.9% |
| 3 years (annualised) | 8.0% |
FRCEX Risk Information
Risk metrics for FRCEX, derived from monthly returns in SEC filings.
- 1-year volatility (annualised): 7.1%
FRCEX Costs and Fees
FRCEX costs about $98 per $10,000 invested per year in fund expenses.
- Net expense ratio: 0.98%
- Gross expense ratio: 0.99%
- Portfolio turnover: 10%
- Brokerage commissions: 17.94 bps of average net assets (SEC N-CEN)
FRCEX Cashflows
Over the 12 months to 2024-03, Delaware Covered Call Strategy Fund had net outflows of $7.34M, from monthly SEC N-PORT filings.
| Month | Net flow |
|---|---|
| 2024-03 | −$31.72M |
| 2024-02 | −$4.81M |
| 2024-01 | −$1.07M |
| 2023-12 | $7.67M |
| 2023-11 | $6.30M |
| 2023-10 | $2.71M |
FRCEX Debt Constituents
No individual debt constituents are reported in Delaware Covered Call Strategy Fund's latest SEC N-PORT filing.
FRCEX Prospectus and SEC Filings
Official Delaware Covered Call Strategy Fund filings on SEC EDGAR — prospectus, portfolio holdings and annual reports.
- Prospectus (485BPOS) — filed 2024-01-26
- Prospectus (485BPOS) — filed 2023-01-27
- Prospectus (485BPOS) — filed 2022-01-27
- Portfolio holdings (N-PORT) — filed 2024-05-28
- Portfolio holdings (N-PORT) — filed 2024-02-27
- Portfolio holdings (N-PORT) — filed 2023-11-21
- Annual census (N-CEN) — filed 2023-12-11
- Annual census (N-CEN) — filed 2022-12-13
Related Funds
Other United States Large Cap Blend / Core Equity funds tracked on ABC INVEST:
Data Sources
ABC INVEST compiles this page from public filings made to the U.S. Securities and Exchange Commission (SEC) through EDGAR: portfolio holdings and monthly cashflows from Form N-PORT, expenses and returns from fund prospectuses (Form 485BPOS) and the SEC DERA Risk/Return Summary data sets, annual data from Form N-CEN, and shareholder reports from Form N-CSR.