Market Sector Update

• Global equity markets experienced a sharp rebound in the quarter, following dramatic first quarter declines precipitated by the COVID-19 pandemic and collapse in energy markets. Social-distancing efforts eventually slowed the spread of the virus and as restrictions were eased, economic activity began to resume at a brisk pace.
• Governments and central banks, globally, have taken unprecedented steps to mitigate the negative economic effects of responses to the pandemic. Monetary easing, fiscal stimulus and direct asset-purchases by the U.S. Federal Reserve (Fed) and other central banks have all provided a great deal of support to businesses and consumers, buoying financial markets.

Portfolio Strategy

• The Fund experienced large gains in the quarter and significantly outperformed its benchmark index during the period. Fund performance reflected the mix of returns in the underlying funds and their allocation weightings. The Ivy Emerging Markets Equity Fund was a stand-out contributor to positive relative performance, accompanied to a lesser extent by the Ivy International Core Equity Fund, Ivy Global Growth Fund, Ivy International Small Cap Fund and Ivy Pzena International Value Fund. Only one underlying Fund modestly detracted to relative performance, the Ivy Global Equity Income Fund, which significantly outperformed its own benchmark.
• The Fund ended the period with the following target asset allocation: Ivy International Core Equity Fund 31%, Ivy Pzena International Value Fund 16%, Ivy Emerging Markets Equity Fund 23% and a 10% allocation each to Ivy Global Growth Fund, Ivy International Small Cap Fund and Ivy Global Equity Income Fund to provide a well-diversified portfolio of international stocks.

Outlook

• Global markets and economies continue to face extreme challenges as the pandemic continues. While there has certainly been a sharp rebound in activity from the March lows, previous levels of economic activity and employment remain distant. The growth in cases of COVID-19 is dramatically accelerating in portions of the U.S., although it remains well contained in others. It remains difficult to compare these virus case statistics to earlier experiences given more widespread testing, better contact tracing, a younger demographic of infected individuals perhaps experiencing more mild and asymptomatic cases, and better therapies. However, hospitalizations and now deaths are on the rise again in geographies experiencing the most rapid growth in cases. The response – by both governments and individuals – to the resurgence of the virus will likely depend on the perceived risk of contracting the disease, which may depend heavily on how these statistics continue to play out. This will likely be a significant determinant of future economic activity and employment, which is likely to strongly influence financial markets.

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 June 30, 2020, 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.

All information is based on Class I shares.

The impact of COVID-19, and other infectious illness outbreaks that may arise in the future, could adversely affect the economies of many nations or the entire global economy, individual issuers and capital markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illnesses in emerging market countries may be greater due to generally less established healthcare systems. Public health crises caused by the COVID-19 outbreak may exacerbate other pre-existing political, social and economic risks in certain countries or globally. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty.

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. These risks are magnified in emerging markets. The performance of the Fund will depend on the success of the allocations among the chosen underlying funds. Investing in a single region involves greater risk and potential reward than investing in a more diversified fund. These and other risks are more fully described in the fund's prospectus. Not all funds or fund classes may be offered at all broker/dealers.