Ivy Global Income Allocation Fund

Ivy Global Income Allocation Fund

Market Sector Update

  • Risk assets continued to perform well as economic data around the globe continued to show its strength. Despite the economic strength, inflation remained low and wage growth muted, which allowed fixed-income markets to register modest returns.
  • Strong global growth kept upward pressure on most key commodity prices.
  • Global central banks used the benign backdrop to slowly turn away from expansionary monetary policy and continue their policy normalization.

Portfolio Strategy

  • The Fund outperformed its benchmark (before the effects of sales charges) for the quarter. Performance was driven by the equity portion of the portfolio, which materially outperformed the MSCI World High Dividend Yield index. The fixed-income portion slightly underperformed its Barclays Multiverse benchmark.
  • While the fixed-income portfolio slightly underperformed its benchmark, there were no big drivers of underperformance. Several parts of the portfolio provided a modest drag, resulting in the underperformance.
  • The equity portfolio performed well, with both the healthcare and energy sectors as standout performers. Utilities, information technology and telecommunication services also added to performance. The financials sector was the only sector to detract to performance. On a country basis, the U.K., U.S., Australia, New Zealand and Norway benefitted performance, while Canada and especially Japan lagged.


  • After substantial changes to the equity portfolio last quarter, minimal changes were implemented over the fourth quarter. We slightly reduced our healthcare underweight and, on the margin, increased international exposure, though changes were modest.
  • In the fixed-income portfolio, we slightly reduced exposure to emerging-market assets – mainly emerging-market credit as spreads narrowed considerably. Otherwise, the fixed-income portfolio strategy and positioning remain largely the same.
  • Asset allocation remains largely natural to the benchmark, and we do not foresee any major events on the horizon that would cause us to alter asset allocations significantly.

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 December 31, 2017, 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.

Bloomberg Barclays Multiverse Index is comprised of securities that represent the global bond market. MSCI World High Dividend Yield Index is designed to reflect the performance of equities (excluding REITs) with higher than average dividend yields that are both sustainable and persistent. 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. 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. Fixed-income securities are subject to interest-rate risks and, as such, the net asset value of the Fund may fall as interest rates rise. Dividend-paying investments may not experience the same price appreciation as non-dividend-paying instruments. Dividend-paying companies may choose not to pay a dividend, or dividends may be less than was anticipated. Investing in high-income securities may carry a greater risk of nonpayment of interest or principal than higher-rated bonds. 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.