Ivy Small Cap Core Fund

Market Sector Update

  • While the Russell 2000 Index ended 2018 with a resounding thud – down 20% for the fourth quarter – the Fund’s
    benchmark shot out of the blocks in 2019, returning nearly 15% in the first quarter. Being that we are now more than 10
    years into this bull market while global growth shows signs of waning, it should not be terribly surprising that greater
    volatility has been exhibited, especially as seen over the previous six months, as is often the case at the end of
    economic cycles.
  • The big market recovery in the first quarter in many ways was about the Federal Reserve (Fed) backpedaling on its
    rate and balance sheet policies. As rates came down in reaction to the Fed’s dovish stance, investors poured into risk
    assets. The question going forward is whether the Fed’s reversal suggests something more ominous or whether it will
    inject some much leading liquidity that will help sustain this economic expansion for longer.
  • Due to the Fed’s dovishness, the leadership in the market was an interesting mix of growth, cyclicals and rate
    sensitivity. In the case of growth, technology and health care names were strong as the perception that growth has
    become scarcer increased. Cyclicals like energy and materials exhibited a recovery on the prospect that the Fed’s
    actions would lower the chances of a recession and hopefully lead to a soft landing. Lastly, rate-sensitive companies
    with greater dividend yields, like real estate holdings, saw a lift during the quarter as yields have become rare.
  • Looking ahead, the debate on whether this is just a late cycle pullback or a something much more significant, such
    as a recession, will continue to rage. Given the substantial move in the first quarter, we expect it will be harder for
    tremendous appreciation from here during the remainder of the year. While we don’t believe a recession is imminent,
    we also recognize that turbulence is likely to continue for some time as the market struggles to find an answer.

Portfolio Strategy

  • The Fund delivered a positive return for the quarter and performed in line to its benchmark (before the effect of
    sales charges.)
  • Despite taking a more defensive posture for the period, we were pleased to keep pace with the benchmark,
    especially since few funds in the category did. Across our top 20 average holdings, 14 contributed positive
    performance relative to the benchmark, contributing roughly 125 basis points (bps) to attribution.
  • Across the 11 sectors in our benchmark, we had positive performance attribution in five with consumer discretionary,
    information technology and consumer staples performing the best and negative attribution in six as financials,
    performed the worst, which was followed by materials and health care.
  • In terms of individual stock performance during the quarter, 10 holdings contributed to performance attribution
    greater than 25 bps, and two greater than 50 bps. From a negative performance perspective, eight holdings detracted
    greater than 25 bps, with one holding detracting more than 50 bps.
  • Because of the first quarter’s strong start, we have a more tempered view on the upside market returns going
    forward. We have maintained a slightly more defensive posturing in both sector allocation and the types of stocks held
    in the portfolio. That stated, we remain opportunistic as we look to take advantage of drawdowns created by volatility.

Outlook

  • Looking toward the remainder of 2019, we wouldn’t be terribly surprised to see volatility persist and the
    market ultimately finish in close proximity to where it ended the first quarter. We welcome being wrong in our
    assessment, and feel like we could do fine under either scenario, but also believe that having reasonable expectations
    is warranted after experiencing a bull market that is greater than a decade long.
  • The choppiness of the market during the past six months, while probably a little extreme, is more likely to resemble
    what lies ahead than the lack of volatility that has been experienced over the past several years. Aside from being
    more typical at end of cycles, what will further propel this volatility is the continued debate about global growth that
    likely extends through at least the mid part of the year when comparisons get easier and the likelihood of a trade
    resolution is complete.
  • Regardless of how the market performs in 2019, we remain committed to the Fund’s process of identifying quality
    underappreciated companies, and believe the construction of the portfolio is well balanced so as to perform well
    versus our peers and benchmark, regardless of the environment over time.

The opinions expressed are those of the Fund’s manager and are not meant as investment advice or to predict or project the future performance of any investment product. The opinions are current through March
31, 2019, 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.

Scott Sullivan served as a portfolio manager on the Fund until May 8, 2018.

The Russell 2000 Index is an index measuring the performance approximately 2,000 small-cap companies in the Russell 3000 Index, which is made up of 3,000 of the biggest U.S. stocks. It is not possible to invest
directly in an index.

Risk factors: The value of the Fund’s shares will change, and you could lose money on your investment. Investing in small-cap growth and value stocks may carry more risk than investing in stocks of larger, more
well-established companies. Growth stocks may be more volatile or not perform as well as value stocks or the stock market in general. Value stocks are stocks of companies that may have experienced adverse
developments or may be subject to special risks that have caused the stocks to be out of favor and, in the opinion of the Fund’s manager, undervalued. Such security may never reach what the manager believes to
be its full value, or such security’s value may decrease. The Fund typically holds a limited number of stocks (generally 40 to 60). As a result, the appreciation or depreciation of any one security held by the Fund may
have a greater impact on the Fund’s net asset value than it would if the Fund invested in a larger number of securities. 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.

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Ivy Value Fund

Market Sector Update

  • The end of 2018 saw the return of stock volatility as equity markets took a sharp late year fall. This pullback, however,
    was followed immediately by a “hockey stick” recovery to start 2019.
  • The stocks that led the decline in December were the first to recover in January, providing a painful sting to investors
    who decided the selloff was a signal to position portfolios more defensively. Following a complacent 2017, large market
    swings have returned and have elevated fear amongst investors. Global growth has appeared to slow, and the Federal
    Reserve (Fed) has taken notice, halting further rate hikes for 2019.

Portfolio Strategy

  • The Fund had a positive single-digit return but underperformed the Russell 1000 Value Index (the Fund’s benchmark)
    during the quarter, primarily due to individual stock selection that was mainly confined to our health care holdings. Four
    health care names in particular hurt relative performance: CVS, Humana, Hospital Corporation of America and Amgen.
    Of these, CVS was specifically costly. The company recently closed on the acquisition of Aetna, and in early January
    issued guidance for the combined company that was well below investor expectations. Often in large mergers like
    these, the first year can be difficult as the two companies become one. Despite this rough start, we believe CVS has
    long-term potential in the space and remain positive on the position. Outperformers in the quarter included Synchrony
    Financial in credit cards, Citigroup in banking and Lam Research in semiconductors.
  • The best performing sectors overall were information technology, industrials and energy. The selloff in the fourth
    quarter gave way to a broad market rally, with every sector in the benchmark posting a strong return.
  • We focus primarily on stock selection and avoid making sector calls. We overweight or underweight sectors based
    on individual stock opportunity, with some limits to control risk or volatility. The Fund is currently overweight financials
    and consumer discretionary, where we find value and yield. In these areas, we have been able to find what we believe
    are good companies with repeatable business models generating high rates of free cash flow, and low stock prices
    relative to our estimation of each company’s true intrinsic value. We are underweight consumer staples and
    communication services, simply due to a lack of compelling ideas.

Outlook

  • The U.S. economy has enjoyed a long successful run from the end of the 2008 recession. There was an additional
    boost with the tax cut in early 2018. Recent economic data supports the idea of a slowing economy but does not yet
    support the concept of a shrinking economy (recession). The current challenge will be for the Fed to tighten money
    policy back up, yet not slow the economy into contraction. The recent pause in interest rate hikes for 2019 indicates it
    is not an easy task – slowing the economy and inflation via rate hikes is a difficult job. We liken it to stepping on a
    rolling egg to stop it without breaking it. History shows a high probability of failure, if interest rates rise too much thus
    helping to create a recession. This is something we will watch carefully.
  • While the economic forces listed above are clearly important factors, our first approach is from the company level.
    We seek to find quality, growing companies whose stocks are trading below what we consider their intrinsic values.
    Oftentimes this is due to short term negative factors, and we become larger owners of a company if we feel those
    negatives are about to dissipate. We continue to search for and make investments one company at a time, to benefit
    clients over the long run.

The opinions expressed are those of the Fund’s manager and are not meant as investment advice or to predict or project the future performance of any investment product. The opinions are current through March
31, 2019, 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 holdings (%) as of 03/31/2019: Citigroup, Inc. 4.7, Comcast Corp. 4.6, Walmart Stores, Inc. 4.3, Broadcom Corp. 4.1, Energy Transfer Partners 3.8, Marathon Petroleum Corp. 3.3, Lam Research Corp. 3.2, AGNC
Investment Corp. 3.2 and Target Corp. 3.1.
The Russell 1000 Value Index is an unmanaged index comprised of securities that represent the large cap sector of the stock market. It is not possible to invest directly in an index. Commentary is based on Class I
shares.

Risk factors: The value of the Fund's shares will change, and you could lose money on your investment. The value of a security believed by the Fund’s manager to be undervalued may never reach what the manager
believes to be its full value, or such security’s value may decrease. 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. 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.

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Ivy VIP Small Cap Core

Market Sector Update

  • While the Russell 2000 Index ended 2018 with a resounding thud – down 20% for the fourth quarter – the Portfolio’s benchmark shot out of the blocks in 2019, returning nearly 15% in the first quarter. Being that we are now more than 10 years into this bull market while global growth shows signs of waning, it should not be terribly surprising that greater volatility has been exhibited, especially as seen over the previous six months, as is often the case at the end of economic cycles.
  • The big market recovery in the first quarter in many ways was about the Federal Reserve (Fed) backpedaling on its rate and balance sheet policies. As rates came down in reaction to the Fed’s dovish stance, investors poured into risk assets. The question going forward is whether the Fed’s reversal suggests something more ominous or whether it will inject some much leading liquidity that will help sustain this economic expansion for longer.
  • Due to the Fed’s dovishness, the leadership in the market was an interesting mix of growth, cyclicals and rate sensitivity. In the case of growth, technology and health care names were strong as the perception that growth has become scarcer increased. Cyclicals like energy and materials exhibited a recovery on the prospect that the Fed’s actions would lower the chances of a recession and hopefully lead to a soft landing. Lastly, rate-sensitive companies that provide strong dividend yields, like real estate holdings, saw a lift during the quarter as yields have become rare.
  • Looking ahead, the debate on whether this is just a late cycle pullback or a something much more significant, such as a recession, will continue to rage. Given the substantial move in the first quarter, we expect it will be harder for tremendous appreciation from here during the remainder of the year. While we don’t believe a recession is imminent, we also recognize that turbulence is likely to continue for some time as the market struggles to find an answer.

Portfolio Strategy

  • The Portfolio delivered a positive return for the quarter and performed in line to its benchmark (before the effect of sales charges.)
  • Despite taking a more defensive posture for the period, we were pleased to keep pace with the benchmark, especially since few portfolios in the category did. Across our top 20 average holdings, 14 contributed positive performance relative to the benchmark, contributing roughly 125 basis points (bps) to attribution.
  • Across the 11 sectors in our benchmark, we had positive performance attribution in five with consumer discretionary, information technology and consumer staples performing the best and negative attribution in six as financials, performed the worst, which was followed by materials and health care.
  • In terms of individual stock performance during the quarter, 10 holdings contributed to performance attribution greater than 25 bps, and two greater than 50 bps. From a negative performance perspective, eight holdings detracted greater than 25 bps, with one holding detracting more than 50 bps.
  • Because of the first quarter’s strong start, we have a more tempered view on the upside market returns going forward. We have maintained a slightly more defensive posturing in both sector allocation and the types of stocks held in the portfolio. That stated, we remain opportunistic as we look to take advantage of drawdowns created by volatility.

Outlook

  • Looking toward the remainder of 2019, we wouldn’t be terribly surprised to see volatility persist and the markets ultimately if the market finished in close proximity to where it ended the first quarter. We welcome being wrong in our assessment, and feel like we could do fine under either scenario, but also believe that having reasonable expectations is warranted after experiencing a bull market that is greater than a decade long.
  • The choppiness of the market during the past six months, while probably a little extreme, is more likely to resemble what lies ahead than the lack of volatility that has been experienced over the past several years. Aside from being more typical at end of cycles, what will further propel this volatility is the continued debate about global growth that likely extends through at least the mid part of the year when comparisons get easier and the likelihood of a trade resolution is complete.
  • Regardless of how the market performs in 2019, we remain committed to the Portfolio’s process of identifying quality underappreciated companies, and believe the construction of the portfolio is well balanced so as to perform well versus our peers and benchmark, regardless of the environment over time.

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 March 31, 2019, 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.

Scott Sullivan served as a portfolio manager on the Fund until May 8, 2018.

The Russell 2000 Index is an index measuring the performance approximately 2,000 small-cap companies in the Russell 3000 Index, which is made up of 3,000 of the biggest U.S. stocks. It is not possible to invest directly in an index.

Risk factors: The value of the Portfolio’s shares will change, and you could lose money on your investment. Because the Portfolio is generally invested in a small number of stocks, the performance of any one security held by the Portfolio will have a greater impact than if the Portfolio were invested in a larger number of securities. Although larger companies tend to be less volatile than companies with smaller market capitalizations, returns on investments in securities of large capitalization companies could trail the returns on investments in securities of smaller companies. An investment in the Portfolio 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 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 Balanced Fund

Market Sector Update

  • Domestic markets rebounded sharply in the first quarter of 2019, with the S&P 500 Index, the Fund’s equity benchmark, positing its strongest quarterly performance in nearly 10 years.
  • The S&P 500 Index advanced nearly 14% with information technology, industrials energy and consumer discretionary sectors leading the way. Every sector posted a positive return for the quarter with the laggards being health care and financials.
  • Despite the pro-cyclical bias of the equity market, the 10-year U.S. Treasury yield declined 11 basis points (bps) to 2.57%. The yield curve continued to flatten with the spread relationship between the 2-year and 10-year U.S. Treasuries ending the quarter at 14 bps, down from 19 bps at the start of the year.
  • The Fund’s fixed income benchmark, the Bloomberg Barclays U.S. Government/Credit Index, increased 3.26% during the quarter as the Treasury market rallied due to falling interest rates and the duration benefit from curve flattening. Investment grade credit spreads tightened to 113 bps, which also contributed to the benchmark positive return for the quarter.

Portfolio Strategy

  • The Fund’s equity portfolio delivered a positive return for the period, and was in line with the benchmark before the effect of sales charges. Overweight positions to the industrials and energy sectors positively impacted relative performance. In addition, strong stock selection in the consumer staples and energy sectors was a tailwind.
  • The fixed income portion of the Fund advanced slightly, outperforming the benchmark return. The portfolio’s relative underweight of Treasuries positively impacted performance as credit spreads tightened, resulting in stronger performance from corporate credit. In addition, strong security selection in corporate credit was a positive contributor to performance. Duration stands at approximately 90% of the benchmark. The Fund’s Treasuries position has increased and is in line with the benchmark.
  • The Fund outperformed the Morningstar U.S. Fund Allocation 50%-70% Equity category average. Performance was positively impacted by an overweight of equities, which outperformed fixed income during the quarter, and strong security selection in the fixed-income sleeve.
  • Positions in General Mills, Union Pacific, Autodesk, Philip Morris, Lowes Corp. and Hess Corp. 8% Mandatory Convert contributed to performance. Partially offsetting this strength was a relative underweight of the communication services sector and poor stock selection in the consumer discretionary and health care sectors with positions in Tapestry, Biogen and Pfizer being notable detractors.

Outlook

  • As we look ahead, global economic growth is likely to decelerate over the next several months, but we expect it to remain positive. As we have previously highlighted, individual and corporate tax reform was a meaningful positive for the domestic economy which, along with lighter regulation and a generally more business-friendly political climate, was supportive for growth.
  • However, the uncertainties around political, monetary and trade policies have been stubbornly persistent and are likely to linger for most of this year. While we believe domestic economic growth will continue, the lagged effects of tighter monetary policy and waning benefits from fiscal stimulus will be a headwind.
  • As a result, we are closely watching inflation rates and inflation expectations which have been modest, and must remain so, in order to allow our central bank to respond to slower growth and adjust the pace of monetary policy normalization. As the domestic economy grows, we expect the Federal Reserve to raise interest rates at a very modest pace and continue the process of winding down its balance sheet.
  • While we continue to monitor macroeconomic forces and trends, we maintain an emphasis on finding high quality, growing companies whose securities are trading at a reasonable valuation with visible catalysts to drive relative outperformance over the next 12 months. This approach has served investors well over time, and our confidence in it has not waned.

The opinions expressed are those of the Fund’s managers at Class I shares and are not meant as investment advice or to predict or project the future performance of any investment product. The opinions are current through March 31, 2019, 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.

The S&P 500 Index is a float-adjusted market capitalization weighted index that measures the large-cap U.S. equity market. The index includes 500 of the top companies in leading industries of the U.S. economy. It is not possible to invest directly in an index.

The Bloomberg Barclays U.S. Government/Credit Index measures the performance of U.S. dollar-denominated United States Treasuries, government-related, and investment-grade U.S. corporate securities that have a remaining maturity of greater than or equal to one year. In addition, the securities have $250 million or more of outstanding face value and are fixed-rate and non-convertible securities. It is not possible to invest directly in an index.

Top 10 Equity Holdings as a percent of net assets as of 03/31/2019: Lowe’s Co., Inc. 2.1, Union Pacific Corp. 2.0, Autodesk, Inc. 2.0, Las Vegas Sands, Inc. 1.9, Microsoft Corp. 1.9, General Mills, Inc. 1.8, Intel Corp. 1.8, PPG Industries, Inc. 1.8, Boeing Corp. 1.7, Apple, Inc. 1.7.

Rick Perry served as a portfolio manager on the Fund until April 12, 2018.

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. Fixed-income securities are subject to interest rate risk and, as such, the net asset value of the Fund may fall as interest rates rise. The lower-rated securities in which the Fund may invest may carry greater risk of nonpayment of interest or principal then higher-rated bonds. In addition to the risks typically associated with fixed-income securities, loan participations in which the Fund may invest carry other risks, including the risk of insolvency of the lending bank or other intermediary. Loan participations may be unsecured or not fully collateralized may be subject to restrictions on resale and sometimes trade infrequently on the secondary market. The Fund’s emphasis on dividend-paying stocks involves the risk that such stocks may fall out of favor with investors and underperform nondividend 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 45 to 55.) 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. The value of a security believed by the Fund’s managers to be undervalued may never reach what the manager believes to be its full value, or such security’s value may decrease. 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.

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Ivy High Income Fund

Market Sector Update

  • At the end of last year, we were cautiously optimistic that returns for the next 12 months would be attractive due to
    the more than 200 bps spread widening of the high yield index during the fourth quarter. We did not expect to see a
    large portion of those returns in the first quarter. The dovish pivot by the U.S. Federal Reserve (Fed), progress on U.S.-
    China trade talks, increasing oil prices and a return to inflows for the high yield mutual fund asset class were factors
    that contributed to gains.
  • The concerns and risk-off sentiment that consumed investors in the fourth quarter of 2018 have all but disappeared
    at the end of the first quarter. The high yield asset class snapped back from the lows of December 2018 and posted
    one of the best quarterly starts to a calendar year in recent history, returning approximately 7.4%.
  • The past 12 months saw net outflows in the high yield asset class of $17.9 billion with the first quarter of 2019 being
    a bright spot with inflows of $14.1 billion, helping offset the negative flows seen in the previous three quarters.
  • Leveraged loans were not immune to outflows over the past 12 months, losing $19.7 billion with most of the outflows
    coming in the past two quarters. As rate-hike expectations subsided, the market is placing a higher probability of the
    Fed’s next move being a rate cut, which has caused loan technicals to quickly turn negative.
  • The quarter had new issue activity of $65.4 billion, while the past 12 months was $209 billion. Year over year, the
    12-month volume was a startling decrease of 35%. This was highlighted by zero high-yield deals being priced in
    December 2018, which was the first time since November 2008 and only the second time since 1990. Leveraged loan
    new-issue volume was $68 billion and $638 billion for the quarter and prior 12 months, respectively.

Portfolio Strategy

  • The Fund had a positive return, but underperformed the benchmark.
  • Our structural underweight to high-yield bonds, when compared to the all-bond benchmark, detracted from
    performance as bank loans underperformed the benchmark for the quarter.
  • The Fund’s allocation to loans was the largest single detractor during the quarter. The allocation to loans helped
    reduce our downside risk in the fourth quarter of 2018 and detracted from relative performance during the first quarter.
    We maintained a meaningful underweight to energy. Oil rebounded with other risk assets in the first quarter, and the
    energy component of our benchmark was one of the best-performing sectors returning 8.4%.
  • Credit selection in both cable and services sectors contributed to performance in the first quarter along with
    underweights in the automakers and auto equipment sectors.
  • We have maintained our exposure to leveraged loans as they continue to offer attractive yields relative to their
    seniority in the capital structure. They also offer the potential for less volatility in times of stress, such as fourth quarter
    of 2018, when leveraged loans outperformed the Fund’s benchmark by 339 bps.
  • We finished the quarter with 22% in leveraged loans (15% first liens, 6% seconds liens) and 70% in high yield bonds.
    The Fund’s exposure to the CCC category stayed inline quarter-over-quarter and ended the period at 25%, as
    measured by Standard & Poor’s.

Outlook

  • We continue to think there is a favorable probability that several of the uncertainties plaguing the market will come
    to resolution giving investors and company executives more clarity on the macro environment. This has already begun,
    and spreads have tightened substantially from their widest point in December.
  • Given our expectation of a sharp rebound in growth for the second quarter of 2019 and modest above-trend growth
    afterwards, we view risks to spreads on the tighter side in the near-term and fairly balanced over the longer-term.
  • We continue to keep an eye on the yield curve, oil prices, improvements or lack thereof of leverage and coverage
    ratios across our holdings. Not all signs are indicating green lights for investors, but our base-case is that a recession
    is not in the foreseeable future.
  • As always, our focus when evaluating investments is to focus on a company’s business model and competitive
    advantages in order to weather a recession and perform throughout the cycle.

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 current through March
31, 2019, 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.

Diversification is an investment strategy that attempts to manage risk within your portfolio but it does not guarantee profits or protect against loss in declining markets.

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. Fixed income securities are subject to interest rate risk and, as such, the net asset value of the Fund may fall as interest rates rise. Investing in below investment
grade securities may carry a greater risk of nonpayment of interest or principal than higher rated bonds. Loans (including loan assignments, loan participations and other loan instruments) carry other risks, including
the risk of insolvency of the lending bank or other intermediary. Loans may be unsecured or not fully collateralized may be subject to restrictions on resale and sometimes trade infrequently on the secondary market.
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.

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Ivy Global Bond Fund

Market Sector Update

  • In January, the Federal Open Market Committee (FOMC) pivoted from a tightening bias to a new message of
    “patience”. U.S. Federal Reserve (Fed) Chairman Powell implied that rate hikes were off the table for the remainder of
    the year. The markets welcomed the pause as financial conditions loosened with equity prices rising, credit spreads
    tightening and the U.S. dollar weakening relative to emerging market currencies.
  • The normalization of the Fed’s balance sheet is also winding down as the Fed slows down the pace of decline in
    the balance sheet to a level consistent with what we believe is efficient and effective policy implementation.
  • The yield curve inverted as the market brought down expectations of the Fed’s tightening policy and overall
    expectations of a slower global growth environment. The Fed brought down U.S. gross domestic product (GDP) growth
    from 2.3% to 2.1% for 2019 and kept the Core Personal Consumption Expenditures (PCE) inflation forecast unchanged
    at 2.0%.
  • The Trump Administration’s negotiations with China continued during the first quarter of 2019 but nothing material
    happened; expectations are rising that a settlement will occur soon.
  • Central banks across the globe continued to inject volatility into the markets as they try to guide market expectations
    with their data dependent policies. Dovish forward guidance from the European Central Bank, Bank of Japan and Bank
    of England stemmed from slowing growth, persistent geopolitical uncertainty and underwhelming inflation, placing
    policymakers on a more cautious footing.
  • By switching their focus from tight labor markets and accelerating wage growth to slowing economies and softening
    inflation expectations, policymakers are trying to create a backdrop for lower volatility.

Portfolio Strategy

  • The Fund had a positive return but underperformed its benchmark for the quarter primarily due to its shorter effective
    duration and defensive posturing in credit and Treasuries. The recent risk-on environment led to a significant
    tightening in credit spreads and the market’s reaction to the pause in monetary policy led to a rally in long duration
    Treasuries.
  • The U.S. dollar weakened over the quarter against emerging market currencies, as the Russian ruble, Chilean peso
    and Colombian peso rose 6.2%, 2.5%, and 2.0%, respectively. The Fund’s 97.5% U.S. dollar exposure hurt performance
    relative to peers.
  • We continue to seek opportunities to reduce volatility in the Fund. Additionally, we are maintaining a low duration
    strategy for the Fund as we feel it allows us a higher degree of certainty involving those companies in which we can
    invest.
  • We continue to focus on maintaining proper diversification for the Fund. We continue to hold a higher level of liquidity
    (patient capital) because of structural changes in the capital markets. We will be opportunistic in allocating that capital
    when we believe dislocations in the market arise.

Outlook

  • We expect modest improvement in economic growth in the next couple of quarters that will provide cover for the
    Fed to not raise rates for the remainder of 2019.
  • Labor markets continue to grow and beat expectations, which has kept consumer confidence near cycle highs. The
    U.S. government shutdown, severe weather and tax refunds were a few special factors that were headwinds for GDP
    growth during the quarter, but we believe these factors will have less of an impact as we move through the year.
  • We continue to believe uncertainty regarding trade, the ongoing Brexit saga and global growth concerns will result
    in economic growth modestly below consensus forecasts.
  • Trade will continue to be a risk factor going forward. There is the potential for more tariffs, followed by retaliatory
    action that might impact company’s capital investment plans. A negative feedback loop might impact markets, stocks
    and ultimately consumer confidence.
  • Fundamentals in the credit markets continue to remain stretched with balance sheets remaining levered. Softer
    global growth is concerning and leads us to be cautionary on the outlook for credit spreads.
  • Given our expectation for modest widening of spreads in 2019, we believe our conservative positioning relative to
    the benchmark is appropriate. We will be opportunistic about our credit selection and overall positioning to take
    advantage of perceived opportunities and dislocations as they present themselves.

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 current through March
31, 2019, 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.

Diversification and asset allocation are investment strategies that attempt to manage risk within your portfolio but they do not guarantee profits or protect against loss in declining markets.

Risk factors: The value of the Fund’s shares will change, and you could lose money on your investment. International investing involves additional risks including currency fluctuations, political or economic conditions
affecting the foreign country, and differences in accounting standards and foreign regulations. Fixed income securities are subject to interest rate risk and, as such, the net asset value of the fund may fall as interest
rates rise. Investing in below investment grade securities may carry a greater risk of nonpayment of interest or principal than higher-rated bonds. Loans (including loan assignments, loan participations and other loan
instruments) carry other risks, including the risk of insolvency of the lending bank or other intermediary. Loans may be unsecured or not fully collateralized may be subject to restrictions on resale and sometimes
trade infrequently on the secondary market. These and other risks are more fully described in the Fund’s prospectus. Not all funds or classes may be offered at all broker/dealers.

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Ivy Global Growth

Market Sector Update

  • Global equity markets experienced a strong recovery during the quarter after the sharp sell-off that occurred in late 2018. The increased likelihood of a trade resolution between the U.S. and China, the U.S. Federal Reserve pausing plans for additional rate hikes as well as improving economic data out of Europe and China helped drive the market rally in both developed and emerging markets.
  • In a continuation of recent trends, growth stocks outperformed value stocks, though both styles generated doubledigit returns during the quarter. Emerging markets generally outperformed developed markets during the period. In particular, China performed well as it regained part of prior losses. The U.S. led developed market performance, while Japan was a laggard. Performance in Europe was mixed, with outperformance from the U.K. (on a timeline extension of Brexit) and underperformance from Germany.
  • On a sector basis, information technology was particularly strong, up almost 20% for the quarter. The real estate, energy and industrials sectors also performed well, while the health care and financials sectors underperformed.

Portfolio Strategy

  • The Fund outperformed the benchmark for the period with stock selection driving relative outperformance. Selection was notably strong in the industrials, consumer staples and communication services sectors.
  • The Fund’s exposure to the health care sector was the largest relative detractor to performance. The Fund’s overweight allocation to the relatively poor-performing sector as well as exposure to U.S. health care services stocks that disproportionately performed poorly on fears stemming from political rhetoric/concerns contributed to the decline. As political pressure continued through the quarter, we materially reduced our overweight allocation to U.S. health care services stocks on fears of continued political and regulatory concerns between now and the 2020 presidential election.
  • Top individual contributors to performance in the period included Airbus SE (benefitting from Boeing safety issues), Ping An Insurance Group Co. of China Ltd., and Ferrari N.V. Top individual detractors included CME Group, Inc., Cigna Corp., UnitedHealth Group, Inc. and HCA Holdings, Inc.
  • The Fund’s largest sector overweights include consumer discretionary, followed by industrials and information technology. The Fund’s largest sector underweights include communication services and materials.

Outlook

  • In our view, the most meaningful risk to equity markets is the on-going U.S.-China trade war. While a resolution is widely expected by markets today, a formal resolution of trade issues would be positive. We believe it would allow equity markets to focus on economic and business fundamentals, which have generally been showing signs of improvement. (Corporate earnings growth is still likely to slow for most global markets, particularly the U.S. where sizeable 2018 corporate tax cuts are having less impact). However, economic data in China, Europe and the U.S. looks better today than it did as we finished 2018.
  • Going forward, we are focusing on holdings we believe can succeed under a range of scenarios. We continue to look for perceived opportunities where secular growth stocks have been oversold on fears and are pricing in unrealistically negative scenarios. We are focused on competitively advantaged growth stocks that we believe can outperform in this environment.

The opinions expressed are those of the Fund’s manager and are not meant as investment advice or to predict or project the future performance of any investment product. The opinions are current through March 31, 2019, 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 holdings as a percent of net assets include: Airbus SE 5.7%, Amazon.com, Inc. 4.6%, Microsoft Corp. 3.2%, Visa Inc. Class A 3.1%, CME Group, Inc. 3.1%, Dollar General Corp. 3.0%, HCA Holdings, Inc. 3.0%, Cognizant Technology Solutions Corp., Class A 2.7%, Thermo Fisher Scientific, Inc. 2.6% and Ping An Insurance (Group) Co. of China Ltd., H Shares 2.5%.

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. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may be more volatile or not perform as well as value stocks or the stock market in general. 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 The Fund typically holds a limited number of stocks (generally 45 to 70). As a result, the appreciation or depreciation of any one security held by the Fund may have a greater impact on the Fund’s net asset value than it would if the Fund invested in a larger number of securities. 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.

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Ivy Emerging Markets Equity Fund

Market Sector Update

  • Emerging market equity returns were positive for the quarter but underperformed developed market equities. Returns were positive each month with little volatility.
  • China’s equity market was up nearly 18% in U.S. dollar terms, the best performer among major emerging market equities. The central government launched a number of fiscal initiatives, including cutting taxes, promoting the purchase of autos and home appliances, and boosting targeted lending. Investor sentiment also was helped by what appears to be progress in trade negotiations between the U.S. and China.
  • Russia’s equity market also generated strong returns in the quarter, up nearly 12% in dollar terms, as energy prices rallied across the complex. Higher oil prices also boosted the ruble versus the dollar.
  • The weakest returns were in Turkey, down just over 4% as the economy dipped into a recession while inflation remained stubbornly high. Uncertainty regarding local elections also weighed on the market and the lira.
  • The significant rise in oil prices during the quarter reflected an ongoing economic and political crisis in Venezuela, which also impacted energy production there. OPEC and partner producers also saw a sharp targeted decline in production, which more than offset the boost in U.S. shale oil volumes.
  • Global trade saw a steady decline, with purchasing manager indexes falling below the key level of 50 in a growing number of countries. The list includes China, South Korea and Taiwan among key emerging markets. There has also been significant softness in the European Union with the U.K., Germany and Italy being particularly weak. This has been somewhat offset by a noticeable change in U.S. Federal Reserve (Fed) policy, with rate hikes off the table and a call to end the program of shrinking the Fed’s balance sheet.

Portfolio Strategy

  • The Fund had a positive return for the quarter and outperformed its benchmark.
  • The macro factors in the market environment, as discussed above, helped us feel confident in our overweight positions relative to the benchmark in the Fund to the BRIC countries – Brazil, Russia, India and China.
  • The Fund benefitted by being overweight to internet stocks in Latin America, China and Russia; and energy stocks in Brazil, Russia and India. Security selections in the financial sector also helped performance. Our overweight positions and security selections in China, Russia and South Africa in general also contributed to relative outperformance.
  • Performance during the quarter was hurt by holdings in biotech, chemicals and shipbuilding.
  • At quarter end, the Fund’s largest country overweights were to Brazil, Russia, China and India. We started the quarter with a neutral weighting in China but added exposure to A shares trading on the Shanghai and Shenzhen exchanges as well as to a new Chinese healthcare position trading in Hong Kong. The largest country underweights were in Taiwan and the member states of the Association of Southeast Asian Nations (ASEAN).
  • The Fund’s largest sector overweights were in consumer discretionary, energy and real estate; the largest underweights were in consumer staples, industrial and information technology.

Outlook

  • We think a more accommodative Fed will allow for many emerging market currencies to either remain stable or appreciate versus the dollar. This had been a significant headwind during 2018.
  • We also are starting to see a broadening economic recovery in China and think it will spill over into other key Asian exporting economies. We expect at least an interim end to the U.S.-China trade war. This could lead to movement in global supply chains in the intermediate future with production moving to other Asian countries as well as to North America. Our exposure to this shift is modest at this time, but the Fund is likely to benefit from such an outcome.
  • The Fund’s overweight in Brazil assumes the government there successfully passes pension reform. We think it will be matched by the privatization of state-owned companies and auctions of infrastructure and selected energy acreage. The pension reform may be difficult because the retirement age is likely to be raised and benefits may be reduced for certain sectors of the economy.
  • Our overweight in India is focused on specific domestic themes. These include holdings related to IMO 2020, a new maritime standard which calls for ultra-low sulfur fuel in oceangoing vessels; the digital/data transformation of telecommunications and internet platforms; and private sector banking.
  • As was the case in 2018, we think elections will continue to influence reforms, central bank and fiscal policies in several countries. Elections have been held in Turkey and Thailand, with outcomes still not finalized. Upcoming national elections are scheduled in India, Indonesia and South Africa, and we think the outcomes are likely to be favorable for these economies and stock markets.
  • We are positive on the energy sector. The Fund is overweight the group and has secondary exposure through stocks in countries that are likely to benefit from stable or rising oil and gas prices.
  • We believe valuations remain supportive for emerging market stocks, as they continue to trade at a significant discount to developed markets. We continue to find positive secular themes that we think can provide attractive returns. The size of the middle class across Asian emerging markets continues to expand rapidly, which we believe provides ready markets for companies on which the Fund is focused.

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 current through March 31, 2019, 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.

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. 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.

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Ivy Science and Technology Fund

Market Sector Update

  • Equities rebounded from the significant decline in the final months of 2018 and largely recovered all losses from
    last quarter.
  • The reasons for this strong rebound were the dovish pivot by the Federal Reserve (Fed) on future interest rate
    tightening and optimism around the China trade dispute. While U.S. and China economic data continued to weaken
    through the quarter, the Fed’s actions and positive trade negotiation meetings supported a significant equity rally.
  • The S&P North American Technology Index, the benchmark for the strategy, increased nearly 20% in the quarter
    after the roughly 18% decline in the fourth quarter of 2018.
  • The broad snapback within the technology sector drove positive performance across the spectrum, regardless of
    market capitalization or subsector.

Portfolio Strategy

  • The Fund’s double-digit return significantly outperformed the benchmark during the period. Stock selection within
    information technology was the primary driver of outperformance. Euronet Worldwide, Inc. was the top individual
    relative contributor, while allocations to Universal Display Corp. and Aspen Technology, Inc. also contributed to
    outperformance.
  • The Fund’s underweight in some of the largest benchmark constituents, namely Amazon.com, Inc., Facebook, Inc.,
    Apple, Inc., and Cisco was a drag during the period. The impact of the underweight positions was more than offset by
    the outperformance in the portfolio.
  • Despite strong performance, the Fund’s allocation to health care, a sector absent from the benchmark, detracted on
    a relative basis due to the strong rebound in technology equities.

Outlook

  • The supportive factor for the technology and health care sectors is the constant pace of innovation. While we are
    highly cognizant of moves in the market, our three-to-five year timeline for investing allows us to take a longer term
    approach. For example, technology is going to be more critical going forward for companies to gain advantages. Data
    aggregation, data analytics, migration towards cloud computing, semiconductors – all are key areas we are positioned
    to take advantage of going forward. We expect cloud computing capex to bounce back in the second half of 2019, a
    meaningful contributor to how we view our investable universe right now.
  • We continue to be optimistic on semiconductors. The space has contributed strongly to information technology
    performance over the past couple years and we believe the emergence of new secular growth opportunities, like
    autos, machine learning and ubiquitous connectivity will continue to support above-market returns in the sector. While
    we remain constructive on semiconductors, we expect some level of volatility that likely creates compelling new
    opportunities for the Fund over the longer term.
  • We are carefully monitoring the technology supply chain and demand signals coming from key technology endmarkets.
    The U.S.-China geopolitical risk remains, but we are optimistic on the trajectory of these relations along with
    an expected rebound in technology spending in the next few quarters.
  • Our exposure in biotechnology remains a key area of innovation within health care and an area where we expect our holdings to outperform over the coming quarters. Gene therapy and personalized advanced therapies are the
    areas of groundbreaking research and innovation that should provide significant opportunities for investment.

The opinions expressed are those of the Fund’s managers for Class I shares and are not meant as investment advice or to predict or project the future performance of any investment product. The opinions are
current through March 31, 2019, 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 3/31/2019: Microsoft Corp. 9.2%, Euronet Worldwide, Inc. 5.8%, Aspen Technology, Inc. 5.1%, WNS (Holdings) Ltd. ADR 5.0%, Vertex Pharmaceuticals, Inc. 4.8%,
ACI Worldwide, Inc. 4.7%, Universal Display Corp.: 4.6%, Apple, Inc. 4.5%, Micron Technology, Inc. 4.5%, Alibaba Group Holding Ltd. ADR 4.4%.

The S&P North American Technology Sector Index is a modified-capitalization weighted index representing U.S. securities classified under the GICS® technology sector and internet retail sub-industry. It is not possible
to invest directly in an index.

Risk factors: The value of the Fund’s shares will change, and you could lose money on your investment. Because the Fund invests more than 25% of its total assets in the science and technology industry, the Fund’s
performance may be more susceptible to a single economic, regulatory or technological occurrence than a fund that does not concentrate its investments in this industry. Securities of companies within specific
industries or sectors of the economy may periodically perform differently than the overall market. In addition, the Fund’s performance may be more volatile than an investment in a portfolio of broad market securities
and may underperform the market as a whole, due to the relatively limited number of issuers of science and technology related securities. Investment risks associated with investing in science and technology
securities, in addition to other risks, include: operating in rapidly changing fields, abrupt or erratic market movements, limited product lines, markets or financial resources, management that is dependent on a limited
number of people, short product cycles, aggressive pricing of products and services, new market entrants and obsolescence of existing technology. 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.

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Ivy Closed-End High Income Opportunities Fund

Market Sector Update

  • At the end of last year, we were cautiously optimistic that returns for the next 12 months would be attractive due to the more than 200 bps spread widening of the high yield index during the fourth quarter. We did not expect to see a large portion of those returns in the first quarter. The dovish pivot by the U.S. Federal Reserve (Fed), progress on U.S.- China trade talks, increasing oil prices and a return to inflows for the high yield mutual fund asset class were factors that contributed to gains.
  • The concerns and risk-off sentiment that consumed investors in the fourth quarter of 2018 have all but disappeared at the end of the first quarter. The high yield asset class snapped back from the lows of December 2018 and posted one of the best quarterly starts to a calendar year in recent history, returning approximately 7.4%.
  • The past 12 months saw net outflows in the high yield asset class of $17.9 billion with the first quarter of 2019 being a bright spot with inflows of $14.1 billion, helping offset the negative flows seen in the previous three quarters.
  • Leveraged loans were not immune to outflows over the past 12 months, losing $19.7 billion with most of the outflows coming in the past two quarters. As rate-hike expectations subsided, the market is placing a higher probability of the Fed’s next move being a rate cut, which has caused loan technicals to quickly turn negative.
  • The quarter had new issue activity of $65.4 billion, while the past 12 months was $209 billion. Year over year, the 12-month volume was a startling decrease of 35%. This was highlighted by zero high-yield deals being priced in December 2018, which was the first time since November 2008 and only the second time since 1990. Leveraged loan new-issue volume was $68 billion and $638 billion for the quarter and prior 12 months, respectively.

Portfolio Strategy

  • The Fund had a positive return, but underperformed the benchmark.
  • Our structural underweight to high-yield bonds, when compared to the all-bond benchmark, detracted from performance as bank loans underperformed the benchmark for the quarter. The Fund’s exposure to the CCC category ended the period at 35%.
  • The Fund’s allocation to loans was the largest single detractor during the quarter. The allocation to loans helped reduce our downside risk in the fourth quarter of 2018 and detracted from relative performance during the first quarter. We maintained a meaningful underweight to energy. Oil rebounded with other risk assets in the first quarter, and the energy component of our benchmark was one of the best-performing sectors returning 8.4%.
  • Credit selection in both cable and services sectors contributed to performance in the first quarter along with underweights in the automakers and auto equipment sectors.
  • We have maintained our exposure to leveraged loans as they continue to offer attractive yields relative to their seniority in the capital structure. They also offer the potential for less volatility in times of stress, such as fourth quarter of 2018, when leveraged loans outperformed the Fund’s benchmark by 339 bps.
  • Outlook

  • We continue to think there is a favorable probability that several of the uncertainties plaguing the market will come to resolution giving investors and company executives more clarity on the macro environment. This has already begun, and spreads have tightened substantially from their widest point in December.
  • Given our expectation of a sharp rebound in growth for the second quarter of 2019 and modest above-trend growth afterwards, we view risks to spreads on the tighter side in the near-term and fairly balanced over the longer-term.
  • We continue to keep an eye on the yield curve, oil prices, improvements or lack thereof of leverage and coverage ratios across our holdings. Not all signs are indicating green lights for investors, but our base-case is that a recession is not in the foreseeable future.
  • As always, our focus when evaluating investments is to focus on a company’s business model and competitive advantages in order to weather a recession and perform throughout the cycle.

Risk factors: The price of the Fund’s shares will fluctuate with market conditions and other factors. Fund shares are not guaranteed or endorsed by any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation. Closed-end funds frequently trade at a discount from their net asset values (NAVs), which may increase an investor’s risk of loss. At the time of sale, shares may have a market price that is below NAV, and may be worth less than the original investment. There is no assurance that the Fund will meet its investment objective. Investing in high-income securities may carry a greater risk of nonpayment of interest or principal than with higher-rated bonds. Loans (including loan assignments, loan participations and other loan instruments) carry other risks, including the risk of insolvency of the lending bank or other intermediary. Loans may be unsecured or not fully collateralized, may be subject to restrictions on resale and sometimes trade infrequently on the secondary market.

An investment in the Fund is not appropriate for all investors and is not intended to be a complete investment program. The Fund is designed as a long-term investment and not as a trading vehicle.

Ivy Investment Management Company (IICO) serves as the Fund’s investment adviser. IICO is a wholly-owned subsidiary of Waddell & Reed Financial, Inc.

The Fund is a closed-end exchange traded investment company. This material is presented only to provide information and is not intended as investment advice or recommendations for trading purposes. Closed-end funds, unlike open-end funds, are not continuously offered. After the initial public offering, shares of closed-end funds are sold on the open market through a stock exchange. Investment policies, management fees, risks other than those mentioned above, and other matters of interest to prospective investors may be found in the closed-end fund prospectus used in its initial public offering. For additional information, contact our sales desk at 800-532-2780.

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