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Ivy California Municipal High Income Fund

  • $10.19 NAV as of 10/19/2017
  • ($0.00) / 0.00% Daily NAV Change
  • 7.45% YTD (NAV)

Summary

Tax-free income potential with a focus on location

Income Opportunity
A focus on primarily high-yield municipal securities chosen to provide a high level of current income that is not subject to Federal or California income tax.
Diversification and exemption
Includes at least 80% of its net assets in municipal bonds exempt from Federal and California income taxes.
Investment Discipline
An in-depth process that emphasizes credit risk, security structure, duration management.

Morningstar Style Box

EXT
Low
Source: Morningstar

Portfolio Management

Michael J. Walls

  • Ivy Investment Management Company
  • 1 Year with Fund
  • 19 Years in Industry
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Michael J. Walls is primarily responsible for the day-to-day portfolio management of the Fund. Mr. Walls is Senior Vice President of Ivy Investment Management Company (IICO) and Waddell & Reed Investment Management Company (WRIMCO). He has served as a portfolio manager with IICO since 2007, and has been with the organization since 1999, joining the company as an investment analyst. He earned a BA in Economics and German from Denison University, and an MBA with an emphasis in Finance from Xavier University. Mr. Walls holds a Certificate of General Insurance.

Growth of a $10,000 Investment
through 9/30/2017

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

Daily Prices as of 10/19/2017

Net Asset Value (NAV) $10.19
Daily NAV Change ($) ($0.00) 0.00%
Weekly NAV Change ($) $0.03 0.30%
Public Offering Price (POP) $10.67

Fund Facts

Ticker Symbol IMHAX
CUSIP 465899144
Fund Code 600
Fund Type Fixed Income Funds
Fund Inception 10/3/2016
Class Inception 10/3/2016
Fiscal Year End September
Dividends Paid Daily, Paid Monthly
Fund Assets (as of 9/30/2017) $18.1 mil
Total Equity Holdings (as of 9/30/2017) 22
Total Holdings (as of 9/30/2017) 66
Lipper Category California Municipal Debt Funds
Morningstar Category Muni California Intermediate
Benchmark Bloomberg Barclays HY Muni TR USD
Benchmark Bloomberg Barclays Municipal TR USD

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.

Performance at NAV does not include the effect of sales charges, if it had, performance shown would be lower. Class A shares, including sales charges, reflects the maximum applicable front-end sales load.

Monthly Rates of Return

Average Annual Total Returns as of 9/30/2017
(Returns for periods of less than 1-yr are not annualized)
 
Fund with 4.25% sales charge 2.45% 4.17%
Bloomberg Barclays Municipal TR USD 4.66% 0.87% 3.19% 3.01% 4.52% 0.87%
Lipper California Municipal Debt Funds 4.91% 0.03% 3.39% 3.44% 4.31% 0.14%
Fund at NAV 6.98% 4.17%
Bloomberg Barclays HY Muni TR USD 7.72% 1.43% 4.56% 4.73% 4.74% 1.43%

Quarterly Rates of Return

Average Annual Total Returns as of 9/30/2017
(Returns for periods of less than 1-yr are not annualized)
 
Fund with 4.25% sales charge 2.45% 4.17%
Bloomberg Barclays Municipal TR USD 4.66% 0.87% 3.19% 3.01% 4.52% 0.87%
Lipper California Municipal Debt Funds 4.91% 0.03% 3.39% 3.44% 4.31% 0.14%
Fund at NAV 6.98% 4.17%
Bloomberg Barclays HY Muni TR USD 7.72% 1.43% 4.56% 4.73% 4.74% 1.43%

Calendar Year Return

  2012
Bloomberg Barclays Municipal TR USD 0.25
Bloomberg Barclays HY Muni TR USD 18.14 -5.51 13.84 1.81 2.99

Expense Ratios as of 1/31/2017

Net 0.80%
Gross 1.13%

5-Year Standard Deviation as of

Bloomberg Barclays HY Muni TR USD 6.18
Bloomberg Barclays Municipal TR USD N/A

Distributions

Historical Prices Inception 10/3/2016

10/2/2017 $10.16 NO NO
10/3/2017 $10.16 NO NO
10/4/2017 $10.15 NO NO
10/5/2017 $10.13 NO NO
10/6/2017 $10.13 NO NO
10/9/2017 $10.13 NO NO
10/10/2017 $10.14 NO NO
10/11/2017 $10.14 NO NO
10/12/2017 $10.16 NO NO
10/13/2017 $10.18 NO NO
10/16/2017 $10.17 NO NO
10/17/2017 $10.19 NO NO
10/18/2017 $10.19 NO NO
10/19/2017 $10.19 NO NO

Historical Distributions Inception 10/3/2016

9/27/2017 $0.0291 Long: $0.000 Short: $0.000 $10.17 9/27/2017
8/25/2017 $0.0275 Long: $0.000 Short: $0.000 $10.22 8/25/2017
7/27/2017 $0.0247 Long: $0.000 Short: $0.000 $10.15 7/27/2017
6/27/2017 $0.0251 Long: $0.000 Short: $0.000 $10.15 6/27/2017
5/26/2017 $0.0268 Long: $0.000 Short: $0.000 $10.09 5/26/2017
4/27/2017 $0.0265 Long: $0.000 Short: $0.000 $9.92 4/27/2017
3/27/2017 $0.0209 Long: $0.000 Short: $0.000 $9.85 3/27/2017
2/27/2017 $0.0098 Long: $0.000 Short: $0.000 $9.8 2/27/2017
1/27/2017 $0.0139 Long: $0.000 Short: $0.000 $9.73 1/27/2017
12/30/2016 $0.0176 Long: $0.000 Short: $0.000 $9.71 12/30/2016
11/25/2016 $0.0077 Long: $0.000 Short: $0.000 $9.72 11/25/2016
10/27/2016 $0.002 Long: $0.000 Short: $0.000 $9.97 10/27/2016

*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.

Annualized 30-Day SEC Yield as of 9/30/2017

Subsidized - NAV 3.88%
Unsubsidized - NAV 3.88%

Portfolio

Top 10 Holdings as a % of net assets 9/30/2017

J.M. Smucker Co. (The), 1.4%, 10/2/2017 3.95%
Golden State Tob Securitization Corp., Enhanced Tob Stlmt, 5.0%, 6/1/2029 3.90%
CA Various Purp GO Bonds, Ser 2016, 5.0%, 9/1/2046 3.21%
Lammersville, CA, Joint Unif Sch Dist, Spl Tax Bonds (Lam, 5.0%, 9/1/2033 3.18%
Palamar Hlth, Rfdg Rev Bonds, Ser 2016, 5.0%, 11/1/2039 3.06%
CA Muni Fin Auth, Rev Bonds (CA Baptist Univ), Ser 2016A, 5.0%, 11/1/2046 2.93%
CA Muni Fin Auth, Rev Bonds (Ret Hsng Fndtn Oblig Group),, 5.0%, 11/15/2032 2.91%
WI Hlth and Edu Fac Auth, Var Rate Demand Rev Bonds (Wausau Hosp, Inc.), Ser 1998B (GTD by JPMorgan Chase Bank N.A.) (BVAL plus 25 bps), 1.0%, 10/7/2017 2.77%
Golden State Tob Securitization Corp., Tob Stlmt Asset-Bk, 5.8%, 6/1/2047 2.46%
M-S-R Energy Auth, Gas Rev Bonds, Ser 2009C, 7.0%, 11/1/2034 2.37%

Total Portfolio Holdings

Updated quarterly, upon availability.

Fixed Income Country Allocation
as a % of bond holdings as of 9/30/2017

United States 100.0%

Quality
as a % of fixed income assets as of 9/30/2017

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.
NonRated 33.80%
AA 11.30%
A 11.70%
BBB 30.00%
BB 5.70%
B 5.20%
CCC 0.60%
Below CCC 1.70%

Portfolio Composition
as a % of net assets as of 9/30/2017

Revenue Bonds 85.37%
Cash and Cash Equivalents 11.20%
General Obligation Bonds 3.43%

Total Portfolio Holdings

Updated quarterly, upon availability.

Documents

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.

Risk factors: 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. Because the Fund invests predominantly in California municipal securities, events in California are likely to affect the Fund’s investments and its performance. As with California municipal securities, events in any of the U.S. territories, such as Puerto Rico, Guam and the U.S. Virgin Islands, where the Fund is invested may affect the Fund’s investments and its performance. These events may include economic or political policy changes, tax base erosion, constitutional limits on tax increases, budget deficits and other financial difficulties, and changes in the credit ratings assigned to municipal issuers of California or U.S. territories.

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.

Index Description: The Bloomberg Barclays Municipal Bond is an unmanaged index comprised of securities that represent the long-term municipal bond market. It is not possible to invest directly in an index.

Fee Waiver and/or Expense Reimbursement: Through January 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 (which would exclude interest, taxes, brokerage commissions, acquired fund fees and expenses, and extraordinary expenses, if any) for Class A shares at 0.80% and Class I shares at 0.60%. Prior to that date, the expense limitation may not be terminated by IICO, IDI, WISC or the Board of Trustees of Ivy Funds (Board). Certain common expenses applicable to all share classes also may be waived to cap total annual ordinary fund operating expenses, which may serve to reduce the expense ratio of certain share classes. See the prospectus for more information.

Fee Waiver and/or Expense Reimbursement: Through January 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. 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.

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.

YTD Prices can be updated 3 to 4 hours after the Daily Pricing information which can result in mismatching data.

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