Market Sector Update

• Global risk assets roared back in the first quarter of 2019, following a weak final quarter of 2018. Global real estate securities as a group outpaced global equity indices, producing its strongest quarterly absolute return since 2009.
• Real estate securities have led equities this year as investors digested the combination of an economic soft landing and the easing of financial conditions off late-2018 peak levels.
• The combination of more dovish approaches to monetary policy from the U.S. Federal Reserve and central banks around the globe, positive progress in U.S.-China trade negotiations, and ongoing monetary and fiscal stimulus efforts in China has helped improve capital market conditions, offering support to the economic environment and investor sentiment.

Portfolio Strategy

• The Fund had a negative return and slightly lagged its benchmark for the quarter.
• Relative performance was driven largely by positive stock selection results, stemming from outperformance in Japan, the eurozone and the U.K. Outperformance in Japan was attributed to an overweight position to the region’s development companies. Japanese developers have led their peers thus far in 2019, benefitting from healthy operating results, the general easing of capital market conditions and the expectation for an improved focus on shareholder returns.
• Results in the eurozone were driven by select positions within the Irish and German residential markets and an overweight to the European self-storage space. These residential markets have benefitted from tight a supply and demand dynamic, which has helped drive strong operating results and outlooks. Self-storage companies have benefitted from growing awareness of the space across the region. Country allocation decisions for the Fund were flat for the quarter.
• Several of the Fund’s country allocations were adjusted during the quarter. The Fund’s overweight positions to the U.K. and Japan were increased during the quarter. These changes were funded by transitioning our overweight positions to the U.S. and Australia to modest underweight positions. The Fund’s underweight position to Singapore also was reduced modestly during the period. We remained overweight to Hong Kong, and underweight to Canada and the eurozone.

Outlook

• Global growth expectations for 2019 have cooled to modest expansion in the first quarter, while recession fears have ebbed. Leading economic indicators align with this more muted outlook and current economic growth levels are sufficient to drive continued demand for occupiers of real estate, which should support fundamentals and values.
• Real estate operating fundamentals are solid across much of the globe, most recently demonstrated by broadly positive operating results relayed in the latest reporting periods. Real estate companies remain well positioned with flexible financial positions, higher-quality asset portfolios and attractive access to capital.
• Global real estate securities are trading in line with their historical trading ranges with private real estate, while certain sectors and countries continue to offer significant pricing discounts to their underlying real estate. Global real estate securities are fairly valued compared to their historical trading pattern with global bonds and equities.

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.

On Nov. 5, 2018, the Ivy LaSalle Global Risk-Managed Real Estate Fund merged into the Ivy LaSalle Global Real Estate Fund.

Risk factors: The value of the Fund's shares will change and you could lose money on your investment. Investment risks associated with investing in real estate securities, in addition to other risks, include rental income fluctuation, depreciation, property tax value changes and differences in real estate market values. Because the Fund invests more than 25% of its total assets in the real estate industry, it may be more susceptible to a single economic, regulatory, or technical occurrence than a fund that does not concentrate its investments in this industry. 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 is non-diversified, meaning that it may invest a significant portion of its total assets in a limited number of issuers, and a decline in value of those investments would cause the Fund's overall value to decline greater than that of a more diversified portfolio. 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.