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    Quarterly Fund Commentary

    Ivy LaSalle Global Risk-Managed Real Estate Fund (prospectus)
    March 31, 2016

    Keith R Pauley, CFA
    Stanley J Kraska, Jr
    George J Noon, CFA
    Matthew Sgrizzi, CFA

    Market Sector Update

    • Markets experienced high volatility to start 2016, with concerns about slowing growth and falling oil prices weighing on market sentiment. Global markets reversed their early losses in the final month of the quarter.
    • The global economic outlook has brightened recently with improvements in macro-economic data, the easing of credit markets and accommodative central banks, but growth concerns remain. Several central banks have implemented further stimulus, while others have maintained a dovish tone, in an effort to stave off slowing global growth.
    • Global property stocks in general posted positive returns through the quarter and outperformed the broader market, which was flat during the period.
    • Real estate fundamentals remained generally positive. Occupancies and rents remained firm or were improving in most markets.

    Portfolio Strategy

    • The Fund posted a positive return for the quarter and outperformed the benchmark index (before the effect of sales charges). Stock selection was positive in all three geographic regions, with significant outperformance in Japan. Japan’s results were helped by the low-risk bias of the portfolio with a tilt away from development companies and towards Japanese real estate investment trusts (REITs). Development companies were negatively impacted by the slowing global economic outlook, while those REITs benefitted from the Bank of Japan’s negative interest-rate policy and renewed demand for yield.
    • Regional allocation performance was flat during the quarter, as positive results from an overweight position in Australia and underweight position to the U.K. were offset by an overweight to Hong Kong.
    • The Fund's regional allocations were unchanged during the quarter. It maintained overweight positions to Australia, Hong Kong and the U.S. and and underweight positions to Continental Europe, the U.K. and Singapore. The Fund maintained market weight positions to Japan and Canada.


    • We continue to expect slow-to-moderate economic growth over the next several years. Inflation has remained well below target in most economies, but inflation expectations have begun to tick upward since mid-February. Interest rates remained low through the quarter.
    • Real estate fundamentals remained healthy across most of the globe. Most public companies remain well positioned for the current environment from both an operational and capital market access perspective. We believe the better global real estate companies are in a strong financial position.
    • In our view, the current positive fundamental outlook provides global property stocks the ability to produce what we consider healthy earnings growth in the mid to high single digits on average in 2016. Property stocks are trading at their net asset values on average, below the premiums at which they have historically traded.


    The opinions expressed in this commentary are those of the Fund's managers and are current through March 31, 2016. The managers' views are subject to change at any time based on market and other conditions, and no forecasts can be guaranteed. Past performance is not a guarantee of future results.

    The Ivy Global Risk-Managed Real Estate Fund was renamed Ivy LaSalle Global Risk-Managed Real Estate Fund on Feb. 1, 2016.

    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. There is no guarantee that the Fund will not decline in value in comparison with funds that do not use a risk-managed approach. 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.

    IVY INVESTMENTS? refers to the financial services offered by Ivy Distributors, Inc., a FINRA member broker dealer and the distributor of IVY FUNDS® mutual funds, and those financial services offered by its affiliates.

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