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11.18.20
Ivy Investments Forum
We recently gathered a number of thought-provoking experts who shared their latest views on an array of critical issues impacting today’s investing landscape. Watch the session replays to get our panelists’ insights.
CIO Insights / 1.08.20
Turning the page on 2020
As we move past the challenges of 2020, we are optimistic about the global economy and markets for 2021.
Chart of the week / 1.08.20
This Trend is Your Friend
We believe pressure on the U.S. dollar may provide a boost for investors in foreign assets.
Webcasts / 01.08.21
Not your Grandma’s Nutrition Lesson
Learn how to read the new USDA nutrition label, why sugar is detrimental to your health and to get some healthy breakfast, lunch, dinner and snack ideas.
Genlink
Raising financially smart kids
Passing on life lessons from generation to generation is important, especially when it comes to topics like money. Discover strategies to raising financially smart kids.
Genlink
Three plans every Gen Xer needs to consider before they turn 50
Xers - hitting the big 5-0 is a big milestone. Uncover the three essential plans you may want to consider to protect your family and yourself.
Our Company
Ivy Investments
We stand for a legacy of expertise, focused on delivering strong, long-term results. Our name reflects our progressive product offerings and growing global presence as we continue to adapt to the needs of investors.
Quarterly Commentary
Ivy VIP Energy
09.30.20
Market Sector Update
Oil markets have been in a narrow trading range near $40 over the past three months. The coronavirus continues to
be the key headwind as oil market fundamentals focus on global supply and demand dynamics. Markets are focused
on the continuing resurgence in global COVID-19 cases and the threats to consumption from a slowdown in reopenings
and new lockdowns.
Supply and demand continued to rebalance as demand increased as the world economies rebounded. Supply has
been reduced due to larger-than-expected cuts from global producers and high levels of OPEC+ compliance.
The oil refining business has been turned upside down from the pandemic economy by reshaping demand as different
parts of the barrel recover at different speeds. Refining margins have been weak as gasoline inventories fall while
diesel and jet fuel inventories swell due to jet fuel being made into more diesel. During the period, companies
announced that six U.S. refineries are shutting down or converting to alternative fuels.
Portfolio Strategy
Both the Portfolio and its benchmark index, the S&P 1500 Energy Sector Index, experienced negative returns for the
period ended Sept. 30, 2020. However, the benchmark’s negative return was greater. During the period, the Portfolio’s
allocation to energy sectors remained steady from the previous quarter.
Key contributors to the Portfolio’s relative performance included holdings in Enphase Energy, Inc., Aspen Technology,
Inc., First Solar, Inc. Occidental Petroleum Corp. and Liberty Oilfield Services, Inc.
Industry allocations changed slightly when compared to those of the prior quarter. Approximately 31% of the equity
holdings in the Portfolio were allocated to the oil and gas exploration and production industry segment, followed by
22% to oil and gas equipment and services and 14% to oil and gas refining and marketing.
The core focus of the energy strategy remains on investing in companies that can create value over the full course
of the energy cycle. We seek to identify those as companies that are low-cost operators, have strong balance sheets,
have the ability to grow profitably and have strong return on capital.
Outlook
Our outlook has not changed for the next 12 months. We see the oil markets continuing to tighten even though
demand weakness is our main concern going forward. Demand recovery has been disappointing as COVID-19 cases
rise again adding to the lack of visibility.
The U.S. supply has not bounced back despite the return of shut-in production. We do not expect any material
increase in OPEC+ supply through the end of 2020. We anticipate continued OPEC+ restraint through the end of the
year and a further fall in U.S. supply in the fourth quarter and in 2021.
The opinions expressed are those of the Portfolio’s managers and are not meant as investment advice or to predict or project the future performance of any investment product. The opinions are current through
Sept. 30, 2020, are subject to change at any time based on market and other current conditions, and no forecasts can be guaranteed. This commentary is being provided as a general source of information and is
not intended as a recommendation to purchase, sell, or hold any specific security or to engage in any investment strategy. Investment decisions should always be made based on an investor’s specific objectives,
financial needs, risk tolerance and time horizon. Past performance is not a guarantee of future results.
Top 10 equity holdings as a percent of net assets (%) as of 09/30/2020: Marathon Petroleum Corp. 4.9, Phillips 66 4.5, Valero Energy Corp. 4.4, Cactus, Inc. 4.2, WEX, Inc. 4.1, Pioneer Natural Resources Co. 4.1, Hess
Corp. 3.8, Concho Resources, Inc. 3.8, Aspen Technology, Inc. 3.6 and Baker Hughes Co. 3.4.
The S&P 1500 Energy Sector Index is an unmanaged index comprised of securities that represent the energy sector of the stock market. It is not possible to invest directly in an index.
The impact of COVID-19, and other infectious illness outbreaks that may arise in the future, could adversely affect the economies of many nations or the entire global economy, individual issuers and capital markets
in ways that cannot necessarily be foreseen. In addition, the impact of infectious illnesses in emerging market countries may be greater due to generally less established healthcare systems. Public health crises
caused by the COVID-19 outbreak may exacerbate other pre-existing political, social and economic risks in certain countries or globally. The duration of the COVID-19 outbreak and its effects cannot be determined
with certainty.
Risk factors: The value of the Portfolio’s shares will change, and you could lose money on your investment. Because the Portfolio invests more than 25% of its total assets in the energy related industry, the Portfolio
may be more susceptible to a single economic, regulatory, or technological occurrence than a portfolio that does not concentrate its investments in this industry. Investing in companies involved in one specified sector
may be more risky and volatile than an investment with greater diversification. The Portfolio typically holds a limited number of stocks (generally 35 to 55). As a result, the appreciation or depreciation of any one
security held by the Portfolio may have a greater impact on the Portfolio’s NAV than it would if the Portfolio invested in a larger number of securities. Investing in the energy sector can be riskier than other types of
investment activities because of a range of factors, including price fluctuation caused by real and perceived inflationary trends and political developments, and the cost assumed by energy companies in complying
with environmental safety regulations. The Portfolio may invest in Initial Public Offerings (IPOs), which can have a significant positive impact on the Portfolio’s performance that may not be replicated in the future.
These and other risks are more fully described in the Portfolio’s prospectus.
Annuities are long-term financial products designed for retirement purposes. Annuity and life insurance guarantees are based on the financial strength and claims-paying ability of the issuing insurance company. The
guarantees have no bearing on the performance of a variable investment option. Variable investment options are subject to market risk, including loss of principal. There are charges and expenses associated with
annuities and variable life insurance products, including mortality and expense risk charges, management fees, administrative fees, expenses for optional riders and deferred sales charges for early withdrawals.
Withdrawals before age 59 1/2 may be subject to a 10% IRS tax penalty and surrender charges may apply.
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Ivy offers model delivery for nine equity strategies
Nine strategies are available in a model-delivery format, to be available in SMA and UMA accounts, providing advisors and investors a new way to access Ivy’s strategies.
Ivy InvestEdSM 529 Plan
A flexible, tax-advantaged 529 plan that allows you to invest for future education goals.
Ivy Investments Forum
We recently gathered a number of thought-provoking experts who shared their latest views on an array of critical issues impacting today’s investing landscape. Watch the session replays to get our panelists’ insights.
Turning the page on 2020
As we move past the challenges of 2020, we are optimistic about the global economy and markets for 2021.
This Trend is Your Friend
We believe pressure on the U.S. dollar may provide a boost for investors in foreign assets.
Not your Grandma’s Nutrition Lesson
Learn how to read the new USDA nutrition label, why sugar is detrimental to your health and to get some healthy breakfast, lunch, dinner and snack ideas.
Raising financially smart kids
Passing on life lessons from generation to generation is important, especially when it comes to topics like money. Discover strategies to raising financially smart kids.
Three plans every Gen Xer needs to consider before they turn 50
Xers - hitting the big 5-0 is a big milestone. Uncover the three essential plans you may want to consider to protect your family and yourself.
Ivy Investments
We stand for a legacy of expertise, focused on delivering strong, long-term results. Our name reflects our progressive product offerings and growing global presence as we continue to adapt to the needs of investors.
Quarterly Commentary
Ivy VIP Energy
Market Sector Update
Portfolio Strategy
Outlook
The opinions expressed are those of the Portfolio’s managers and are not meant as investment advice or to predict or project the future performance of any investment product. The opinions are current through Sept. 30, 2020, are subject to change at any time based on market and other current conditions, and no forecasts can be guaranteed. This commentary is being provided as a general source of information and is not intended as a recommendation to purchase, sell, or hold any specific security or to engage in any investment strategy. Investment decisions should always be made based on an investor’s specific objectives, financial needs, risk tolerance and time horizon. Past performance is not a guarantee of future results.
Top 10 equity holdings as a percent of net assets (%) as of 09/30/2020: Marathon Petroleum Corp. 4.9, Phillips 66 4.5, Valero Energy Corp. 4.4, Cactus, Inc. 4.2, WEX, Inc. 4.1, Pioneer Natural Resources Co. 4.1, Hess Corp. 3.8, Concho Resources, Inc. 3.8, Aspen Technology, Inc. 3.6 and Baker Hughes Co. 3.4.
The S&P 1500 Energy Sector Index is an unmanaged index comprised of securities that represent the energy sector of the stock market. It is not possible to invest directly in an index.
The impact of COVID-19, and other infectious illness outbreaks that may arise in the future, could adversely affect the economies of many nations or the entire global economy, individual issuers and capital markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illnesses in emerging market countries may be greater due to generally less established healthcare systems. Public health crises caused by the COVID-19 outbreak may exacerbate other pre-existing political, social and economic risks in certain countries or globally. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty.
Risk factors: The value of the Portfolio’s shares will change, and you could lose money on your investment. Because the Portfolio invests more than 25% of its total assets in the energy related industry, the Portfolio may be more susceptible to a single economic, regulatory, or technological occurrence than a portfolio that does not concentrate its investments in this industry. Investing in companies involved in one specified sector may be more risky and volatile than an investment with greater diversification. The Portfolio typically holds a limited number of stocks (generally 35 to 55). As a result, the appreciation or depreciation of any one security held by the Portfolio may have a greater impact on the Portfolio’s NAV than it would if the Portfolio invested in a larger number of securities. Investing in the energy sector can be riskier than other types of investment activities because of a range of factors, including price fluctuation caused by real and perceived inflationary trends and political developments, and the cost assumed by energy companies in complying with environmental safety regulations. The Portfolio may invest in Initial Public Offerings (IPOs), which can have a significant positive impact on the Portfolio’s performance that may not be replicated in the future. These and other risks are more fully described in the Portfolio’s prospectus.
Annuities are long-term financial products designed for retirement purposes. Annuity and life insurance guarantees are based on the financial strength and claims-paying ability of the issuing insurance company. The guarantees have no bearing on the performance of a variable investment option. Variable investment options are subject to market risk, including loss of principal. There are charges and expenses associated with annuities and variable life insurance products, including mortality and expense risk charges, management fees, administrative fees, expenses for optional riders and deferred sales charges for early withdrawals. Withdrawals before age 59 1/2 may be subject to a 10% IRS tax penalty and surrender charges may apply.