Fund Detail

Ivy Municipal High Income Fund

Track Fund
$5.09 NAV as of 11/24/2017
$0.00 / 0.00% Daily NAV Change
3.64% YTD (NAV) as of 11/24/2017 i

Morningstar Tools

Go

Fund Summary

Tax free income potential with an eye on volatility
Focus
Favors essential services, such as health care facilities, instead of what we believe to be more speculative areas such as industrial development.
Research base
Credit selection is rooted in an in-depth process emphasizing credit risk, security structure and duration management.
Investment discipline
Invests primarily in high-yield revenue bonds that are repaid from dedicated sources such as user fees.
Morningstar Style Box
LTD MOD EXT
High
Medium
Low
Portfolio Management
  • Michael J. Walls

    • — Ivy Investment Management Company
    • — 8 Years with Fund
    • — 19 Years in Industry
Growth of a $10,000 Investment through 10/31/2017

Assumes an investment over 10 years or life of the share class, reinvestment of dividends and capital gains, and does not include the effect of sales charges or taxes.

Documents
Fact Sheet
Prospectus
Summary Prospectus
Statement of Additional Information
Annual Report
Semi-Annual Report
Quarterly Commentary
XBRL
Perspectives

Manager Video

Portfolio Perspectives / 09.25.17

The story of non-rated bonds

IPUO: The bond world has become more sensitive recently about credit quality. But a non-rated bond isn't the same as a poorly-rated bond. Read on to see why.
Daily Prices as of 11/24/2017
Net Asset Value (NAV) $5.09  
Daily NAV Change $0.00 0.00%
Weekly NAV Change ($0.01) -0.20%
Public Offering Price (POP) $5.09
Fund Facts
Ticker Symbol WYMHX
CUSIP 466001757
Fund Code 465
Fund Type Fixed Income Funds
Fund Inception 12/30/1998
Class Inception 12/30/1998
Fiscal Year End March
Dividends Paid Daily, Paid Monthly
Fund Assets
(as of 10/31/2017)
$888.1 mil
Total Holdings
(as of 10/31/2017)
281
Portfolio Turnover Rate
(as of 3/31/2017)
8%
Lipper Category High Yield Municipal Debt Funds
Morningstar Category High Yield Muni
BenchmarkBloomberg Barclays HY Muni TR USD

Fund Performance

Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.

Class I shares are sold without any front-end sales load or contingent deferred sales charges.

Monthly Rates of Return Average Annual Total Returns as of 10/31/2017

(Returns for periods of less than 1-yr are not annualized)
YTD 1YR 3YR 5YR 10YR LIFE
Fund at NAV 3.14% -0.33% 3.25% 3.17% 5.11% 4.79%
Bloomberg Barclays HY Muni TR USD 8.01% 2.99% 4.78% 4.45% 4.74% %
Lipper High Yield Municipal Debt Funds 6.48% 2.20% 4.28% 3.99% 4.04% 4.35%

Quarterly Rates of Return Average Annual Total Returns as of 9/30/2017

(Returns for periods of less than 1-yr are not annualized)
YTD 1YR 3YR 5YR 10YR LIFE
Fund at NAV 3.15% -0.86% 3.38% 3.35% 5.15% 4.81%
Bloomberg Barclays HY Muni TR USD 7.72% 1.43% 4.56% 4.73% 4.74% %
Lipper High Yield Municipal Debt Funds 6.47% 0.98% 4.55% 4.19% 4.06% 4.37%

Calendar Year Return

201220132014201520162007200820092010201120022003200420052006199920002001
Bloomberg Barclays HY Muni TR USD18.14 -5.51 13.84 1.81 2.99 -2.28 -27.01 32.74 7.79 9.25 - - 10.52 8.58 10.75 - - -
Class I11.74 -6.03 13.71 4.37 0.92 0.12 -17.86 32.63 6.98 10.80 5.88 5.27 6.83 7.34 7.11 -5.18 5.26 5.05

Morningstar Ratings as of 10/31/2017

Category: High Yield Muni

Overall out of 146 ★★★★
3 Year out of 146 ★★★
5 Year out of 118 ★★★
10 Year out of 85 ★★★★★

Ratings are based on risk-adjusted returns

Lipper Ranking through 10/31/2017

Category: High Yield Municipal Debt Funds

  Rank Percentile
1 Year 149 /159 94
3 Year 115 /138 83
5 Year 92 /111 83
10 Year 7 /79 9

Rankings are based on average annual total returns, but do not consider sales charges.

Expense Ratios as of 7/5/2017

Net 0.68%
Gross 0.69%

5-Year Standard Deviation as of 10/31/2017

Fund 4.30
Bloomberg Barclays HY Muni TR USD 6.16

5-Year MPT* Statistics as of 10/31/2017

Alpha 0.24
Beta 0.64
R-Squared 83.45
Sharpe Ratio 0.69
Capture Ratio

Upside: 62.42%

Downside: 55.70%

*Modern Portfolio Theory

Growth of a $10,000 Investment through 10/31/2017

Assumes an investment over 10 years or life of the share class, reinvestment of dividends and capital gains, and does not include the effect of sales charges or taxes.

Fund Distributions

Historical Prices Inception 12/30/1998

Date Price Dividend Reinvest Date Capital Gain Reinvest Date

Historical Distributions Inception 12/30/1998

Ex-date Income Capital Gains Reinvest Gains Payment Date

*Special Dividend
The table includes the daily prices at NAV (net asset value) for the history of this fund's selected share class. NAV is the amount per share you would receive if you sold shares that day.

12-Month Trailing Dist. Yield as of 10/31/2017

NAV 4.35%
With Sales Charge 4.35%

Annualized 30-Day SEC Yield as of 10/31/2017

Subsidized 3.09%
Unsubsidized 3.04%

Fund Documents

Top 10 Holdings as a % of net assets as of 10/31/2017

PA Tpk Comsn, Tpk Sub Rev Bonds, Ser 2009E, 12/1/2038 1.82%
IL Fin Auth, Rev Bonds (Admiral at the Lake Proj), Ser 2010A, 8.0%, 5/15/2040 1.62%
TX Private Activity Bond Surface Trans Corp., Sr Lien Rev Bonds (North Tarrant Express Managed Lanes Proj), Ser 2009, 6.9%, 12/31/2039 1.62%
MA Port Auth, Spl Fac Rev Bonds (Delta Air Lines, Inc. Proj), Ser 2001B (Auction Rate Sec) (Insured by AMBAC), 2.4%, 1/1/2031 1.50%
Tob Stlmt Fin Corp., Tob Stlmt Asset-Bkd Bonds, Ser 2007-1A, 5.0%, 6/1/2041 1.49%
TX Private Activity Bond Surface Trans Corp., Sr Lien Rev Bonds (LBJ Infra Group LLC IH-635 Managed Lanes Proj), Ser 2010, 7.0%, 6/30/2040 1.45%
Tob Securitization Auth of Southn CA, Tob Stlmt Asset-Bkd Bonds (San Diego Cnty Tob Asset Securitization Corp.), Ser 2006A Sr Current Int Bonds, 5.0%, 6/1/2037 1.40%
Golden State Tob Securitization Corp., Tob Stlmt Asset-Bkd Bonds, Ser 2007A-1, 5.1%, 6/1/2047 1.34%
The Orange Co. Funding Corp. (NY), Assisted Living Residence Rev Bonds (The Hamlet at Wallkill Assisted Living Proj), Ser 2012, 6.5%, 1/1/2046 1.32%
San Buenaventura Rev Bonds (Cmnty Mem Hlth Sys), Ser 2011, 8.0%, 12/1/2031 1.27%
Total Portfolio Holdings DOWNLOAD (as of 9/30/2017)
updated quarterly, upon availability
Maturity as a % of fixed income assets as of 10/31/2017
<1 Year 1.70%
1-5 Years 4.80%
5-10 Years 4.10%
10-20 Years 20.30%
>20 Years 69.10%
Average Maturity 21.14 years
Effective Duration 6.99 years
Fixed Income Country Allocation (as a % of bond holdings as of 10/31/2017)
United States 100.0%
Quality as a % of fixed income assets as of 10/31/2017
NonRated 43.10%
AA 2.00%
A 7.00%
BBB 24.20%
BB 14.40%
B 8.90%
CCC 0.40%
Below CCC 0.00%

Quality: Our preference is to always use ratings obtained from Standard & Poor's. For securities not rated by Standard & Poor's, ratings are obtained from Moody's. We do not evaluate these ratings, but simply assign them to the appropriate credit quality category as determined by the rating agency.

Portfolio Composition as a % of net assets as of 10/31/2017
Revenue Bonds 89.61%
General Obligation Bonds 4.46%
Cash and Cash Equivalents 4.11%
Insured Bonds 0.63%
Prerefunded/ETM 0.61%
Corporate Bonds 0.37%
Domestic Common Stock 0.21%
Total Portfolio Holdings
DOWNLOAD (as of 9/30/2017)

Fund Documents

Documents

Fact Sheet
Prospectus
Summary Prospectus
Statement of Additional Information
Annual Report
Semi-Annual Report
Quarterly Commentary
XBRL

Additional Fund Literature

Financial Advisors may login to view fund's additional documents.


Continue

Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.

The value of the Fund’s shares will change, and you could lose money on your investment. 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. The Fund may include a significant portion of its investments that will pay interest that is taxable under the Alternative Minimum Tax (AMT). Exempt-interest dividends the Fund pays may be subject to state and local income taxes. The portion of the dividends the Fund pays that is attributable to interest earned on U.S. government securities generally is not subject to those taxes, although distributions by the Fund to its shareholders of net realized gains on the sale of those securities are fully subject to those taxes. The municipal securities market generally, or certain municipal securities in particular, may be significantly affected by adverse political, legislative or regulatory changes or litigation at the Federal or state level. 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.

Index Description: The Bloomberg Barclays Municipal High Yield is an unmanaged index made up of bonds that are non-investment grade, unrated, or rated below Ba1 by Moody’s Investors Service with a remaining maturity of at least one year. It is not possible to invest directly in an index.

Performance results for some funds may include the effect of expense reduction arrangements. If those arrangements had not been in place, the performance results would have been lower.

The Class Y shares of Waddell & Reed Advisors Municipal High Income Fund were reorganized as the Class I shares of Ivy Municipal High Income Fund on May 18, 2009. The performance shown for periods prior to this date is that of the Class Y shares of Waddell & Reed Advisors Municipal High Income Fund. Performance has not been restated to reflect the estimated annual operating expenses of the Ivy Municipal High Income Fund. If those expenses were reflected, performance shown would differ. Ivy Municipal High Income Fund Class I shares are not subject to sales charges.

Class A, B, C and Y shares of Ivy Municipal High Income Fund are new classes of shares and will have no performance history as of May 18, 2009. Class A, B, C and Y shares will have substantially similar returns to Class I shares of the Fund, though returns will be different to the extent that sales loads, 12b-1 fees and expenses differ among the Classes. Class I shares are only available to certain types of investors. Please see the Fund's prospectus for additional information.

Fee Waiver and/or Expense Reimbursement: Through July 31, 2018, Ivy Investment Management Company (IICO), the Fund’s investment manager, Ivy Distributors, Inc. (IDI), the Fund’s distributor, and/or Waddell & Reed Services Company, doing business as WI Services Company (WISC), the Fund’s transfer agent, have contractually agreed to reimburse sufficient management fees, 12b-1 fees and/or shareholder servicing fees to cap the total annual ordinary fund operating expenses as follows: Class B shares at 1.62%, Class C shares at 1.58%, Class I shares at 0.68% and Class Y shares at 0.94%. Prior to that date, the expense limitation may not be terminated by IICO, IDI, WISC or the Board of Trustees. See the prospectus for more information.

Fee Waiver and/or Expense Reimbursement: Through July 31, 2018, IDI and/or WISC have contractually agreed to reimburse sufficient 12b-1 and/or shareholder servicing fees to ensure that the total annual ordinary fund operating expenses of the Class Y shares do not exceed the total annual ordinary fund operating expenses of the Class A shares, as calculated at the end of each month. Prior to that date, the expense limitation may not be terminated by IDI, WISC or the Board of Trustees. See the prospectus for more information.

Pricing: All prices and year-to-date returns are based on closing quotes unless noted, as supplied to the NASDAQ by 6:00 p.m. Eastern time. YTD Prices can be updated 3 to 4 hours after the Daily Pricing information which can result in mismatching data.

Style Analysis: The Morningstar Style Box reveals a fund's investment style. For equity funds the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend, or growth). For fixed-income funds, the vertical axis shows the credit quality of the bonds owned and the horizontal axis shows interest rate sensitivity as measured by a bond's effective duration. Morningstar seeks credit rating information from fund companies on a periodic basis (e.g., quarterly). In compiling credit rating information, Morningstar instructs fund companies to only use ratings that have been assigned by the following Nationally Recognized Statistical Rating Organizations (NRSROs): Moody's, Standard & Poor's, Fitch, and Egan-Jones. If two NRSROs have rated a security, fund companies are to report the lowest rating; if three or more NRSROs have rated the same security differently, fund companies are to report the rating that is in the middle. For example, if NRSRO X rates a security AA-, NRSRO Y rates the same security an A and NRSRO Z rates it a BBB+, the fund company should use the credit rating of 'A' in its reporting to Morningstar. PLEASE NOTE: Morningstar, Inc. is not itself an NRSRO nor does it issue a credit rating on the fund. An NRSRO rating on a fixed-income security can change from time-to-time. For credit quality, Morningstar combines the credit rating information provided by the fund companies with an average default rate calculation to come up with a weighted-average credit quality. The weighted-average credit quality is currently a letter that roughly corresponds to the scale used by a leading NRSRO. Bond funds are assigned a style box placement of "low", "medium", or "high" based on their average credit quality. Funds with a low credit quality are those whose weighted-average credit quality is determined to be less than "BBB-"; medium are those less than "AA-", but greater or equal to "BBB-"; and high are those with a weighted-average credit quality of "AA-" or higher. When classifying a bond portfolio, Morningstar first maps the NRSRO credit ratings of the underlying holdings to their respective default rates (as determined by Morningstar's analysis of actual historical default rates). Morningstar then averages these default rates to determine the average default rate for the entire bond fund. Finally, Morningstar maps this average default rate to its corresponding credit rating along a convex curve. For interest-rate sensitivity, Morningstar obtains from fund companies the average effective duration. Generally, Morningstar classifies a fixed-income fund's interest-rate sensitivity based on the effective duration of the Morningstar Core Bond Index (MCBI), which is currently three years. The classification of Limited will be assigned to those funds whose average effective duration is between 25% to 75% of MCBI's average effective duration; funds whose average effective duration is between 75% to 125% of the MCBI will be classified as Moderate; and those that are at 125% or greater of the average effective duration of the MCBI will be classified as Extensive. For municipal bond funds, Morningstar also obtains from fund companies the average effective duration. In these cases static breakpoints are utilized. These breakpoints are as follows: (i) Limited: 4.5 years or less; (ii) Moderate: more than 4.5 years but less than 7 years; and (iii) Extensive: more than 7 years. In addition, for non-US taxable and non-US domiciled fixed income funds static duration breakpoints are used: (i) Limited: less than or equal to 3.5 years; (ii) Moderate: greater than 3.5 and less than equal to 6 years; (iii) Extensive: greater than 6 years.

Unsubsidized yields reflect what the yield would have been without the effect of reimbursements and waivers. The adviser and its affiliates have or may voluntarily waive a portion of their fees (including, but not limited to, distribution and service (12b-1) fees) and reimburse certain expenses. There is no guarantee that the fund will avoid a negative yield. Such undertaking may be amended or withdrawn at any time.

30-Day SEC Yield: is calculated based on a formula mandated by the Securities and Exchange Commission (SEC) that calculates a fund's hypothetical annualized income, as a percentage of its assets. A security's income, for the purposes of this calculation, is based on the current market yield to maturity (in the case of bonds) or projected dividend yield (for stocks) of the fund's holdings over a trailing 30 day period. This hypothetical income will differ (at times, significantly) from the fund's actual experience; as a result, income distributions from the fund may be higher or lower than implied by the SEC yield.

12-Month Trailing Distribution Yield: at NAV refers to the 12-month historical cash flow paid over the past 12 months in dividends, divided by the past months ending NAV.

Alpha, Beta, R-Squared, Standard Deviation, Sharpe Ratio and Capture Ratio are 5 year statistics. Alpha is a measure of a fund's actual returns and expected performance, given its level of risk (as measured by beta). Beta reflects the sensitivity of the fund's return to fluctuations in the market index. R-squared indicates how much of a fund's fluctuations were attributable to movements in the fund's benchmark. Standard deviation is a measure of how volatile a fund's returns are. Sharpe ratio is a measure of a fund's risk-adjusted performance. Capture ratio reflects the annualized product of fund vs. index returns for all months in which the index had a positive return (upside capture) or negative return (downside capture).

The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance, and does not include the effects of sales charges. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

© 2017 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

Quality: Ratings obtained from Standard & Poor's. For securities not rated by Standard & Poor's, ratings are obtained from Moody's. We do not evaluate these ratings, but simply assign them to the appropriate credit quality category as determined by the rating agency.

Information is subject to change and is not intended to represent any past or future investment recommendations.