Inflation…Emerging Markets…Is this bad?

bar chart and reflection of city

“Inflation? What’s that?” said the developed world. Much of the global economy has not experienced significant inflation in decades, and even moderate inflation has been absent in recent years. However, in the context of emerging markets, the thought of inflation can bring back haunting memories. As the word echoes across the financial media world and is now evident in the real world, let’s look at what inflation may mean for emerging-market investors.

Inflation effects

The word inflation is being thrown around everywhere. My mom even called and she is very concerned – not necessarily with emerging markets, but let’s not let details get in the way of a good story.

While the level of extremes and duration of inflation is largely unpredictable, we believe it is important to analyze the possible side effects to understand how it may impact our investment case in the region. So, before we let my mom get worked-up, let’s review what is driving inflation and likely outcomes for emerging markets.

With commodity prices surging to multi-year highs (Chart 1), what does this mean for emerging markets? The question boils down to whether or not commodity price inflation trickles down to the consumer and if it impacts corporate margins.

First, let’s look at how commodity inflation has historically affected consumer prices (CPI) in emerging markets (Chart 2).

Chart 1 — Global Commodity Prices Have Been On the Rise
Chart Showing GLOBAL COMMODITY PRICES HAVE BEEN ON THE RISE

Source: Bloomberg, Macrobond. Past performance is not a guarantee of future results.

Chart 2 — Are Consumer Prices Impacted by High Commodity Prices?

Chart Showing consumer prices

Source: Bloomberg, Macrobond. Past performance is not a guarantee of future results.

While there is moderate correlation between commodities and CPI in China and South Korea, consumer prices remain relatively tame over the course of commodity price extremes. In recent years, inflation has consistently been below 5% and often around 2%. In both India and Brazil, where inflation has run higher, there is no correlation between the two measures. Inflation in those more fragile economies seems to be driven by other factors.

Similarly, corporate profit margins are overall more influenced by other economic forces. In fact, margins generally tend to improve when commodity prices rise. This is likely because commodity prices rise in strong economic periods when companies experience higher revenue growth and, therefore, gain other margin benefits. Also, emerging markets is home to many commodity exporters who are helped by these higher prices. A natural diversification benefit of emerging-market investing.

Chart 3 — Emerging Market Profit Margin vs. Commodity Prices

Chart Showing Emerging Market Profit Margin
vs. Commodity Prices

Source: Bloomberg. Past performance is not a guarantee of future results.

My rich Uncle Sam

Fiscal and monetary stimulus has dumped unprecedented amounts of money supply into the financial markets.

Chart 4 — COVID-19 Fiscal Stimulus 2020 – 2021 (Select G-20 Economies)
Chart Showing COVID-19 Fiscal Stimulus 2020 – 2021
(Select G-20 Economies)

Source: IMF and UBS. As a percentage of GDP. Past performance is not a guarantee of future results.

What does this mean for emerging markets? The question boils down to if this will constrain future spending in the developed world and if interest rates will rise. And, of course, how will this flow to emerging markets?

As developed nation governments have spent large amounts of money to stimulate its economies, this has been a windfall for emerging-market economies, primarily China. Look at China’s export activity below. China has benefitted from both global stimulus and its ability to keep factories running through the pandemic. China was “open for business” and the world went there to shop. Export activity had stagnated for more than five years, but has now hit new highs. While this is quite obviously not sustainable, does that matter?

Chart 5 — China Exports ($)
Chart Showing China exports ($

Source: Bloomberg. Past performance is not a guarantee of future results.

The primary risk many would associate with this scenario is what China’s sources of growth will be when exports normalize. For many years now, China has been evolving into a services-based economy. While the country operated as the world’s factory during the pandemic, it does not rely on industrial manufacturing like it once did.

Chart 6 — China: Components of 2019 GDP
Chart Showing China: Components of 2019 GDP

Source: Statista. Past performance is not a guarantee of future results.

So, while the unique circumstances of the pandemic contributed to more stable growth in China, the reversion to normal should not be a headwind.

Please don't throw another (Taper) Tantrum

Let’s talk about monetary tightening and interest rates. An industry favorite topic since 2009 and made famous in emerging-market circles during the “taper tantrum.” Afterall, if inflation persists, central banks will be forced to tighten. While they have upheld their message that they believe inflation is transitory and monetary policy can remain accommodative, what happens if that changes? And what happens when they do ultimately taper? What are the risks to emerging markets?

Can recent history, the “taper tantrum,” teach us a lesson? It’s tricky. To very quickly review, in 2013 the Federal Reserve announced they were tapping the breaks on monetary policy, investors became concerned about emerging markets, money flooded out of those economies, and both their currencies and asset prices declined. Will this happen again? The short answer is, the circumstances were different before. How? 1) Global growth was generally weak and 2) fragile emerging markets economies had major macro imbalances.

After a sharp global recovery coming out of the financial crisis, global output decelerated. Global growth is important for emerging markets as it drives economic growth. It drives export led economies and is an important underlying factor for investment in emerging markets countries. And by most accounts, global growth looks promising for the foreseeable future. As the vaccination laggards catch-up, which are primarily emerging-markets countries, this will be another leg going forward.

Chart 7 — World GDP Growth (%)
Chart Showing World GDP Growth (%)

Source: IMF & Statista. Past performance is not a guarantee of future results.

In addition to muted global growth, key emerging-market countries had significant macro imbalances at the time. For example, India and Brazil, two sensitive countries, were becoming more stressed for years leading up. This scenario, coupled with high amounts of U.S. dollar denominated debt, created an additional overhang. More stability, as well as internal borrowing (borrowing in their own currency), puts emerging markets on more solid ground today.

Chart 8 — Current Account Balance (% GDP)
Chart Showing Current Account Balance (% GDP)

Source: Bloomberg. Past performance is not a guarantee of future results.

There is also a strong case to be made within the emerging markets interest-rate environment and their underlying currencies. Because of the stronger macro circumstances touched on above, central banks have been able to use interest rates as a tool. Both to stimulate and now allowing rates to creep back up without the “deflationary police” sounding the alarm bells. Investors get concerned that higher rates in emerging markets will dangerously slow their economies down. This is not the case right now and, in fact, these higher rates are very supportive of currencies.

And finally…

As investors, we cannot go this entire time without addressing what is most important — the companies we invest in. While the topic of margins was briefly discussed above, and the idea that consumer purchasing power should not be destroyed, we would be hard pressed not to also mention that emerging-market businesses continue to impress. The region is at the forefront of innovation. Valuations, however not cheap in absolute historical terms, look relatively attractive compared to the rest of the world. And overall growth should outpace the rest of the world. We continue to believe emerging markets presents one of the best

Let's wrap this up

The word inflation is everywhere and, perhaps, we are staring down the proverbial barrel. We are already seeing inflation tick up in many areas of the global economy. While the side effects and treatments (developed world response) have historically been significantly negative for emerging markets, it doesn’t appear to be a major threat. There are plenty of risks out there in the world of investing. For now, we can focus more on the others.


[1703526]

Significant Event On December 2, 2020, Waddell & Reed Financial, Inc., the parent company of Ivy Investment Management Company, the investment adviser of the Ivy Funds, and Macquarie Management Holdings, Inc., the US holding company for Macquarie Group Limited’s US asset management business (“Macquarie”), announced that they had entered into an agreement whereby Macquarie would acquire the investment management business of Waddell & Reed Financial, Inc. (the “Transaction”). The Transaction closed on April 30, 2021. The Ivy Funds, as part of Delaware Funds by Macquarie, are now managed by Delaware Management Company and distributed by Delaware Distributors, L.P.

Past performance is no guarantee of future results.

Investing involves risk, including the possible loss of principal.

The opinions expressed in this article are those of the investment team and are not meant 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.

International investments entail risks including fluctuation in currency values, differences in accounting principles, or economic or political instability. Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility, lower trading volume, and higher risk of market closures. In many emerging markets, there is substantially less publicly available information and the available information may be incomplete or misleading. Legal claims are generally more difficult to pursue..

IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance. The IMF World Commodity Price Index.

The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.

All third-party marks cited are the property of their respective owners.

Macquarie Investment Management (MIM) is the marketing name for certain companies comprising the asset management division of Macquarie Group. Investment products and advisory services are distributed and offered by and referred through affiliates which include Delaware Distributors, L.P., a registered broker/dealer and member of the Financial Industry Regulatory Authority (FINRA) and Macquarie Investment Management Business Trust (MIMBT), a Securities and Exchange Commission (SEC)-registered investment advisor. Investment advisory services are provided by a series of MIMBT. Macquarie Group refers to Macquarie Group Limited and its subsidiaries and affiliates worldwide. Delaware Funds by Macquarie refers to certain investment solutions that MIM distributes, offers, refers, or advises.

IVY INVESTMENTS refers to the investment management and investment advisory services offered by MIMBT through its various series.

Other than Macquarie Bank Limited (MBL), none of the entities noted are authorized deposit-taking institution 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.

Macquarie Asset Management (MAM) is the asset management division of Macquarie Group. MAM, through its affiliates, operates as a full-service asset manager offering a diverse range of products.

Document must be used in its entirety.

©2021 Macquarie Management Holdings, Inc.

FOR INVESTMENT PROFESSIONAL USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC.

Category: 

Article Related Management: 

Brian Landy, CFA

Article Short Summary: 

In the context of emerging markets, the thought of inflation can bring back haunting memories. As the word echoes across the financial media world and is now evident in the real world, let’s look at what inflation may mean for emerging-market investors.

Article Type: 

Normal Article

Show video On Home Page: 

0

Story Highlights: 

While the level of extremes and duration of inflation is largely unpredictable, we believe it is important to analyze the possible side effects to understand how it may impact our investment case in emerging markets.
As developed nation governments have spent large amounts of money to stimulate its economies, this has been a windfall for emerging-market economies, primarily China.
We are already seeing inflation tick up in many areas of the global economy. While the side effects and treatments (developed world response) have historically been significantly negative for emerging markets, it doesn’t appear to be a major threat.

Lock this content.: 

Chart of the week - A New Set of Goals

Line graph

Chart of the Week – A New Set of Goals

After a nearly two-year review of its monetary policy strategy, tools, and communications, in August 2020 the Federal Reserve (Fed) released a revised set of goals to replace its long-held targets of achieving full employment and 2% inflation. The Fed will now seek to achieve inflation that averages 2% over the business cycle, allowing inflation to temporarily run above the 2% target to make up for past shortfalls.

On the employment front, instead of focusing on the headline unemployment rate, the Fed is seeking to drive down the unemployment rate across various racial and demographic groups with the aim of fostering a more inclusive recovery in labor markets

Unemployment Gaps by Race/Ethnicity

Difference From White Rate (Percentage Points)

Chart Source: NBER (National Bureau of Economic Research). The gray shaded areas represent recessions. NBER defines recession as a period of time involving a significant decline in economic activity that is spread across the economy and lasts more than a few months. Dates shown are January 1, 2007 to June 1, 2021.

Past performance does not guarantee future results.
Investing involves risk, including the possible loss of principal.

Inflation Outlook

Inflation has clearly surprised to the upside in recent months, driven by a strong recovery and supply-chain issues. However, the breadth of inflation has been somewhat muted. While many of the supply-chain disruptions are likely to continue, we estimate that the momentum in month-to-month increases in inflation is close to peaking. Looking beyond the near-term price volatility, we think that a more sustainable move in inflation is set to come.

We believe the Fed’s new flexibility around the 2% inflation target combined with its focus on broader, more inclusive measures of the labor markets will result in the Fed letting the economy “run hot.” This coupled with continued strong gross domestic product (GDP) growth and tightening labor markets should result in a broader and more sustainable increase in prices later in 2022.


[1729271]

Investing involves risk, including the possible loss of principal.
Past performance does not guarantee future results.

Nothing presented should be construed as a recommendation to purchase or sell any security or follow any investment technique or strategy.

The views expressed represent the investment team’s assessment of the market environment as of July 20, 2021, and should not be considered a recommendation to buy, hold, or sell any security, and should not be relied on as research or investment advice. Views are subject change without notice.

Charts shown throughout are for illustrative purposes only and not meant to predict actual results.

Chart is for illustrative purposes and is not representative of the performance of any specific investment.

Macquarie Investment Management (MIM) is the marketing name for certain companies comprising the asset management division of Macquarie Group. Investment products and advisory services are distributed and offered by and referred through affiliates which include Delaware Distributors, L.P., a registered broker/ dealer and member of the Financial Industry Regulatory Authority (FINRA) and Macquarie Investment Management Business Trust (MIMBT), a Securities and Exchange Commission (SEC)-registered investment advisor. Investment advisory services are provided by a series of MIMBT. Macquarie Group refers to Macquarie Group Limited and its subsidiaries and affiliates worldwide. Delaware Funds by Macquarie refers to certain investment solutions that MIM distributes, offers, refers, or advises.

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.

© 2021 Macquarie Management Holdings, Inc.

Category: 

Article Short Summary: 

New Federal Reserve goals aim to provide support for strong US GDP growth and inflation.

Article Type: 

Normal Article

Show video On Home Page: 

0

Lock this content.: 

Stock picking set to shine with growth under pressure

The recent resurgence in value has been a sharp contrast to growth’s market leadership in 2020. However, many growth companies have continued to report record earnings, and these stocks may retake their lead later in 2021. What does this mean for quality growth investors?

SPEAKERS

Dan Hanson, CFA

Chief Investment Officer

View Full Bio

Brad Warden, CFA

Portfolio Manager

View Full Bio

Brad Klapmeyer, CFA

Portfolio Manager

View Full Bio

Derek Hamilton

Global Economist

View Full Bio

Article Type: 

Livestream

Show video On Home Page: 

0

Video: 

Lock this content.: 

The ESG of Tomorrow

In over a decade, ESG has evolved from a means of measuring responsible investing into a vital component of fundamental investor research to identify a company’s potential performance. In the wake of the COVID-19 crisis, we see an acceleration of ESG practices due to the pandemic’s impact on countries, companies and individuals. How do these mega trends influence the decisions we make on behalf of financial advisors and the clients they serve?

SPEAKERS

Dan Hanson, CFA

Chief Investment Officer

View Full Bio

Erik Becker, CFA

Portfolio Manager

View Full Bio

Jean Rogers, PHD, PE,

Founder and Former CEO of the Sustainability Accounting Standards Board (SASB)

View Full Bio

Brian Daniels

Chief Marketing Officer

View Full Bio

Category: 

Article Short Summary: 

In over a decade, ESG has evolved from a means of measuring responsible investing into a vital component of fundamental investor research to identify a company’s potential performance. In the wake of the COVID-19 crisis, we see an acceleration of ESG practices due to the pandemic’s impact on countries, companies and individuals. How do these mega trends influence the decisions we make on behalf of financial advisors and the clients they serve?

Article Type: 

Livestream

Show video On Home Page: 

0

Video: 

Lock this content.: 

Investment Update - Ivy Mid Cap Income Opportunities Fund

scattered coins

Investment Update – Ivy Mid Cap Income Opportunities Fund

Commentary as of May 10, 2021

What is the background of the Ivy Mid Cap Income Opportunities Fund?

Kim Scott: The genesis of the Ivy Mid Cap Income Opportunities Fund lies within the Ivy Mid Cap Growth Fund. The Ivy Mid Cap Growth Fund invests in high-quality companies we believe have long runways for growth. In our view, these types of companies are profitable and have strong balance sheets.

Over time, we realized something special was going on within the mid-cap growth universe, particularly among companies considered core growers. We noticed that some of these companies were not only growing faster than the U.S. economy and many of their large-cap brethren, but they were also returning capital to shareholders in the form of dividends. In addition to paying dividends, these companies were also growing their earnings and the cash flows that they could use to grow those dividends. This observation led to the idea of a strategy that could generate current income, income growth, and possibly capital appreciation. Thus, the Ivy Mid Cap Income Opportunities Fund was born.

Nathan Brown: The two most important factors within the Ivy Mid Cap Income Opportunities Fund are income and growth. In this Fund, we want to own companies that are not only paying dividends but are also growing those dividends supported by organic earnings growth.

We strive to build a portfolio that generates mid-to-high single-digit dividend growth. As such, since its inception in 2014 until 2020, the Fund delivered an average annual payout growth in the high single digits. During the pandemic, when revenues evaporated for many firms, we were pleasantly surprised to see many of our investments in the portfolio grow their dividends at a faster pace than expected. Two examples include Tractor Supply, which recently grew its dividend by 30%, and Packaging Corporation of America, which recently grew its dividend by 20% and is now yielding 3%.

Finally, like the Ivy Mid Cap Growth Fund, the Ivy Mid Cap Income Opportunities Fund is not a growth at any price strategy. We are valuation-sensitive investors who seek to invest in companies when we believe the valuation is right, providing an opportunity for capital appreciation.

The Ivy Mid Cap Income Opportunities Fund holds between 35-50 equally weighted stocks in the portfolio. Could you discuss the rationale behind equally weighting the holdings in the portfolio? Is the portfolio still actively managed?

Nathan: We want every investment within the portfolio to represent the strategy of the Fund. We don’t want to barbell the portfolio with high payout ratio names with no growth on one end, and low/no payout names that have rapid growth on the other end. We seek to rebalance the portfolio at least quarterly, which forces us to maintain conviction in all portfolio names by either re-purchasing stocks that have lost market value or by cutting losses and moving on to other investments, if needed.

Even with an equally weighted portfolio, the Fund is still actively managed. Since inception, the Fund’s active share has been above 90%. (Active share is a measure of the percentage of stock holdings in a mutual fund portfolio that differs from the holdings of that fund’s benchmark index. The Ivy Mid Cap Income Opportunities Fund’s benchmark is the Russell Midcap® Index.)

Over the course of 2020 and year to date, could you discuss how the Fund has performed relative to your expectations? Also, did the management team make any significant portfolio changes during 2020?

Nathan: Irrespective of the market cycle, our objective is to provide our investors with total return through current income, income growth, and capital appreciation opportunities. Over a market cycle, we seek to generate an average high single-digit to low double-digit annual return. In 2020, we produced a high-single digit return for the Fund, which given the backdrop of the pandemic, was well within our expectations.

In 2020, as the pandemic spread, revenues and, in return, liquidity for many companies evaporated. Early into the year, we identified five companies whose liquidity conditions, in our view, could be greatly impacted by the pandemic. Two of those companies were energy pipelines. Last year, as oil demand fell, we determined these companies might not have the same economics as we previously thought and that they might struggle to maintain their dividend levels. Out of caution, we exited our positions in these investments. There were other companies where we assessed that dividends may be impacted by the pandemic. We worked closely with the managements of these companies to learn more about their current situations. Following those conversations, we determined the business models of these companies should remain robust and they should be able to return to their previous dividend levels by the end of 2021, so we have held tight on those positions in the portfolio.

There have been other investments whose business models and ability to generate cash have been stronger than anticipated. For example, American Campus Communities, the largest owner, manager, and developer of high-quality student housing communities in the U.S., has maintained its dividends despite the challenges of the pandemic and many colleges being forced to pivot to online curriculum. The occupancy rate for student housing has continued at a high level (near 90%) as students have wanted to be near their colleges rather than taking classes, although virtual, from their parents’ basements.

So, while we have made changes along the fringes in the portfolio, by and large, through the pandemic, the portfolio has remained the same.

Given the current rising interest rate environment, what is your outlook for the Fund?

Nathan: Generally, we expect dividend payers to perform well when interest rates go down, which in our view, should lead to higher demand for income-paying equity investments. However, there was an anomaly in dividend payers’ performance as they weren’t rewarded with lower interest rates in 2020. Contrary to our expectations, the dividend-paying group has been performing well in 2021 as interest rates are rising. So, to wrap up, we want to say, irrespective of the interest rate environment, we will continue to focus on building a portfolio that has the potential to generate a total return through current income, income growth, and opportunities for capital appreciation.


Top 10 holdings as a % of net assets as of 03/31/2021: Snap-On Inc. 3.0, Broadridge Financial Solutions, Inc. 3.0, Tractor Supply Co. 2.9, Stanley Black & Decker, Inc. 2.9, Garmin Ltd. 2.9, Clorox Co. 2.9, Watsco, Inc. 2.9, Cracker Barrel Old Country Store, Inc. 2.9, American Campus Communities, Inc. 2.9, and Packaging Corporation of America, 2.8.

Past performance is no guarantee of future results. This information is not meant as investment advice or to predict or project the future performance of any investment product. The opinions are current through May 2021, are subject to change at any time based on market and other current conditions, and no forecasts can be guaranteed. This information 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.

The views expressed represent the investment team’s assessment of the market environment as of May 2021, and should not be considered a recommendation to buy, hold, or sell any security, and should not be relied on as research or investment advice. Views are subject to change without notice.

Risk factors: Ivy Mid Cap Growth Fund - The value of the Fund’s shares will change, and you could lose money on your investment. Investing in mid-cap growth stocks may carry more risk than investing in stocks of larger more well-established companies. 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. Not all funds or fund classes may be offered at all broker/dealers. These and other risks are more fully described in the Fund’s prospectus. Ivy Mid Cap Income Opportunities Fund - 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. Investing in mid-cap stocks may carry more risk than investing in stocks of larger, more well-established companies. The Fund’s emphasis on dividend-paying stocks involves the risk that such stocks may fall out of favor with investors and underperform non-dividend paying stocks and the market as a whole over any period of time. In addition, there is no guarantee that the companies in which the Fund invests will declare dividends in the future or that dividends, if declared, will remain at current levels or increase over time. The amount of any dividend the company may pay may fluctuate significantly. In addition, the value of dividend-paying common stocks can decline when interest rates rise as fixed-income investments become more attractive to investors. This risk may be greater due to the current period of historically low interest rates. The Fund typically holds a limited number of stocks (generally 35 to 50). As a result, the appreciation or depreciation of any one security held by the Fund will have a greater impact on the Fund’s net asset value than it would if the Fund invested in a large number of securities. Not all funds or fund classes may be offered at all broker/dealers. These and other risks are more fully described in the Fund’s prospectus.

The Russell Midcap Index measures the performance of the mid-cap segment of the US equity universe. The Russell Midcap Index is a subset of the Russell 1000® Index. It is not possible to invest directly in an index. All information is based on Class I shares. Class I shares are only available to certain investors.

Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis, and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and can be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries. These disruptions could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective. Any such event(s) could have a significant adverse impact on the value and risk profile of the Fund.

Investing involves risk, including the possible loss of principal.

Significant Event On December 2, 2020, Waddell & Reed Financial, Inc. (WDR), the parent company of Ivy Investment Management Company, the investment adviser of the Ivy Funds, and Macquarie Management Holdings, Inc., the U.S. holding company for Macquarie Group Limited’s U.S. asset management business (Macquarie), announced that they had entered into an agreement whereby Macquarie would acquire the investment management business of WDR (“the Transaction”). The Transaction closed on April 30, 2021. The Ivy Funds, as part of Delaware Funds by Macquarie, are now managed by Delaware Management Company and distributed by Delaware Distributors, L.P.

Ivy Mid Cap Growth Fund and Ivy Mid Cap Income Opportunities Fund investment manager, Delaware Management Company (Manager), may permit its affiliates, Macquarie Investment Management Global Limited (MIMGL) and Macquarie Funds Management Hong Kong Limited, to execute Fund security trades on behalf of the Manager. The Manager may also seek quantitative support from MIMGL.

All third-party marks cited are the property of their respective owners.

Document must be used in its entirety.

(1653835-5/21)

Category: 

Article Related Management: 

Kimberly A. Scott, CFA
Nathan A. Brown, CFA

Article Short Summary: 

No matter the market environment, our core focus is building a portfolio that has the potential to generate a total return through current income, income growth, and opportunities for capital appreciation.

Article Type: 

Normal Article

Show video On Home Page: 

0

Associated Funds: 

Lock this content.: 

Pages

Subscribe to Ivy Investments RSS