Ivy ProShares Russell 2000 Dividend Growers Index Fund


Market Sector Update

  • After a dismal first quarter, markets roared back during second quarter 2020, producing the strongest quarterly performance in 17 years.
  • Small cap stocks, as measured by the Russell 2000 index, the Fund’s broad market target, returned 25.4% during the period, outperforming out large-cap stocks.
  • Ten of the 11 sectors represented in the index posted gains for the quarter, with only utilities delivering a negative return.

Portfolio Strategy

  • A passively managed index fund, the Fund delivered a positive return, but slightly underperformed its benchmark for the quarter.
  • Favorable stock screening and sector allocation impacts were key contributors to relative performance for the quarter.
  • At the sector level, consumer discretionary dominated the quarter, delivering 77% of the Fund’s total return. Materials, communication services and information technology also had double-digit returns. Conversely, negative returns in the utilities and consumer staples sectors offset these results.


  • The Fund remains focused exclusively on companies within the Russell 2000® Index that have grown their dividends for at least 10 consecutive years. While not necessarily providing the highest dividend yield, a strategy based on highquality companies with a consistent track record of dividend growth provides the potential for attractive long-term outperformance.

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.

The Russell 2000® Dividend Growth Index measures the performance of members of the Russell 2000® Index that have increased dividend payments each year for at least 10 years. The index contains a minimum of 40 stocks, which are equally weighted. No single sector is allowed to comprise more than 30% of the index's weight. If there are fewer than 40 stocks with at least 10 consecutive years of dividend growth, the index will include companies with shorter dividend growth histories. The index is rebalanced each March, June, September and December, with an annual reconstitution during the June rebalance. It is not possible to invest directly in an index.

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. companies. It is not possible to invest directly in an index.

The Fund is a passively managed index fund designed to track the performance of its stated benchmark index. It does not invest in securities based on the managers' view of the investment merit of a particular security or company, nor does it conduct conventional investment research or analysis or forecast market movement or trends, in managing the assets of the Fund. The Fund seeks to remain fully invested at all times in securities that, in combination, provide exposure to its respective benchmark Index without regard to market conditions, trends or direction.

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. While the Fund attempts to track the performance of its stated index, there is no guarantee or assurance that the methodology used to create the index will result in the Fund achieving high, or even positive, returns. The Index may underperform, and the Fund could lose value, while other indices or measures of market performance increase in value. Small- and mid-capitalization companies in which the index and, by extension the Fund, are exposed may carry more risk than investing in stocks of larger, more 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. As of November 30, 2018, the index was concentrated in the utilities industry group; therefore, the Fund is subject to the same risks faced by companies in the utilities industry to the same extent as the index is so concentrated. Such risks include review and limitation of rates by governmental regulatory commissions, and the fact that the value of regulated utility instruments tends to have an inverse relationship to the movement of interest rates. The Fund typically will hold a limited number of stocks (generally around 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. A number of factors may affect the Fund's ability to achieve a high degree of correlation with the Index, and there is no guarantee that the Fund will achieve a high degree of correlation. Failure to achieve a high degree of correlation may prevent the Fund from achieving its investment objective. 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.