How does Ivy approach a core international investment mandate?

The Ivy International Core Equity Fund takes a relative value approach that takes advantage of both traditional “value” and “growth” companies when they are reasonably priced with a catalyst for valuation rerating. Historically, our relative value approach in international core equity investing has fared well. We’ve outperformed the index and peer group average over the 13 plus years our portfolio manager has been at the helm. Europe and Japan, the bulk of the investment universe, are dominated by older cyclical companies where relative value is well suited to take advantage of mean reversion.

IVY INTERNATIONAL CORE EQUITY I HAS OUTPERFORMED INDEX AND CATEGORY AVERAGE SINCE INCEPTION

Past performance is no guarantee of future results. Please see page 2 for the Fund’s standardized performance.

How has the market environment evolved?

Our relative value investment approach focuses on the middle two-thirds of the valuation spectrum within our universe. For several years, investors have favored a narrow set of growth companies, which through continued demand would be in the momentum growth category where valuations are too “rich” for our style. As the table to the right shows, the past five years compared to the five years prior represent a significant shift in the market environment. Companies with lower valuations have remained inexpensive, while companies with higher valuations have become more expensive. Essentially, the stocks we primarily own have been ignored.

Since 2015, the highest valuation stocks (top three deciles of the MSCI EAFE by P/E ratio) have experienced high returns and significant valuation expansion, while the bottom seven deciles of the index have experienced very little P/E expansion and nearly flat returns.

Table is showing average 1Y forward PE ratio and 5Y average cumulative return for companies within the MSCI EAFE Index from 9/30/2010-9/30/2015 (“First 5 Years”) and 9/30/2015-9/30/2020 (“Most Recent 5 Years”). Highest and lowest PE companies are grouped into the top three deciles and bottom seven deciles by average 1Y forward PE ratio.

Source: FactSet

How do you want to be positioned moving forward?

When in the midst of them, market environments and regime leadership cycles feel like they will never end. However, historically, they always do. Unfortunately, it is difficult to predict when. This is the ultimate argument for diversification.

What could cause trends to change?

• inflation
• reacceleration of global growth
• search for income

While a continuation of market leadership in a narrow segment of growth companies wouldn’t favor our style, there is no way of telling when this environment will fade, shift, and, ultimately, favor the way we approach investing. These are uncertain times and predicting the future has never been more difficult. Diversification is the only hedge for uncertainty.

RELATIVE PRICE (%) - MSCI EAFE GROWTH INDEX RELATIVE TO MSCI EAFE VALUE INDEX

Source: FactSet. Past performance is no guarantee of future results.

Fund Performance

Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Total returns include share price changes and reinvestment of dividends and capital gains, if any. Please visit ivyinvestments.com for the Fund’s most recent month-end performance. Class I shares are sold without any front-end sales load or contingent deferred sales charges.

Past performance is no guarantee of future results. The opinions expressed are those of the Fund’s managers and are not meant as investment advice or to predict or project the future performance of any investment product. The opinions 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.

Risk factors: The value of the Fund’s shares will change, and you could lose money on your investment. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. International investing involves additional risks, including currency fluctuations, political or economic conditions affecting the foreign country, and differences in accounting standards and foreign regulations. These risks are magnified in emerging markets. To the extent the Fund invests a significant portion of its assets in a particular geographical region or country, economic, political, social and environmental conditions in that region or country will have a greater effect on Fund performance than they would in a more geographically diversified equity fund and the Fund’s performance may be more volatile than the performance of a more geographically diversified fund. These and other risks are more fully described in the Fund’s prospectus. Not all funds or fund classes may be offered at all broker/dealers.