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Ivy Crossover Credit Fund

  • $9.51 NAV as of 10/18/2018
  • ($0.00) / 0.00% Daily NAV Change
  • -4.18% YTD (NAV)

Summary

The Ivy Crossover Credit Fund looks to provide total return through a combination of high current income and capital appreciation.

Crossover potential
A "crossover credit" strategy is designed to provide exposure to both investment grade and non-investment grade fixed income securities. "Crossover" debt generally refers to bonds rated at or near the point where the lower end of investment grade debt and the higher end of high yield debt meet.
Ratings
Investment grade bonds include bonds rated BBB- or higher. Non-investment grade debt securities, commonly called "high yield" or "junk" bonds, include bonds rated BB+ or lower.
Experienced management
The team has more than 50 years of experience in managing various types of credit portfolios.

Morningstar Style Box

MOD
Medium
Source: Morningstar

Portfolio Management

Mark G. Beischel, CFA

  • Ivy Investment Management Company
  • <1 Year with Fund
  • 25 Years in Industry
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Mark Beischel is portfolio manager of Ivy Global Bond Fund and Ivy VIP Global Bond. He has been a portfolio manager of Ivy Global Bond since 2008 and of Ivy VIP Global Bond since 2010. He had been a portfolio manager of the former Waddell & Reed Advisors Global Bond Fund since 2002. He has held oversight of allocation levels and management of all allocation sleeves for Ivy Apollo Strategic Income Fund and co-oversight of allocation levels and management of all allocation sleeves for Ivy Apollo MultiAsset Income Fund since 2015. Mr. Beischel has also served as co-portfolio manager of Ivy Corporate Bond Fund, Ivy Government Securities Fund, Ivy Crossover Credit Fund, Ivy Balanced Fund, Ivy VIP Corporate Bond and Ivy VIP Balanced since April 2018. Mr. Beischel joined the organization in 1998 specializing in taxable investment-grade corporate credit analysis and emerging market credit analysis. He was appointed assistant vice president and named an assistant portfolio manager in 2000. He was appointed vice president in 2002 and senior vice president in 2006. Mr. Beischel was appointed Global Director of Fixed Income in 2011. Mr. Beischel graduated in 1991 with a BBA in Management from the University of Wisconsin-Eau Claire. He earned an MBA with an emphasis in Finance from the University of Denver in 1993. Mr. Beischel is a CFA charterholder. He is a member of the CFA Institute and the CFA Society of Kansas City.

Benjamin Esty

  • Ivy Investment Management Company
  • <1 Year with Fund
  • 17 Years in Industry
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Ben Esty is co-portfolio manager of Ivy Crossover Credit Fund. He is assistant portfolio manager of Ivy Corporate Bond Fund and Ivy VIP Corporate Bond. Mr. Esty joined the organization in 2018 as vice president and portfolio manager. His experience in the industry is primarily with credit strategies, including high yield, loans, investment grade and convertible debt. Mr. Esty began his investment career at Citadel Investment Group in Chicago in 2001 as a credit analyst covering positions across the spectrum of distressed, high yield and investment grade debt as well as convertible bonds, equities and options. He joined Sandelman Partners in New York in 2005 as the head of research where he led efforts to standardize the investment process among analysts, developed analyst training programs and led the firm’s analyst recruitment efforts. He joined Eagle River Asset Management in New York in 2010 as a founding member of a startup credit long/short hedge fund with peak AUM of $140M. He joined Palmer Square Capital Management in Kansas City in 2014 where he was a partner and portfolio manager managing the firm’s long/short credit, high yield and investment grade bond portfolios. Mr. Esty graduated from the University of Pennsylvania in 2001 with a BA in Economics and International Relations, with Distinction in International Relations.

Susan K. Regan

  • Ivy Investment Management Company
  • <1 Year with Fund
  • 31 Years in Industry
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Susan Regan is portfolio manager of Ivy Limited-Term Bond Fund, Ivy VIP Limited-Term Bond and fixed income institutional accounts. She was named co-portfolio manager of the funds in 2014 and has held sole portfolio manager responsibilities since 2015. She was named co-portfolio manager of Ivy Government Securities Fund in 2018. Ms. Regan has also served as co-portfolio manager of Ivy Corporate Bond Fund, Ivy Crossover Credit Fund, Ivy Balanced Fund, Ivy VIP Corporate Bond and Ivy VIP Balanced since April 2018. Ms. Regan joined the organization in 2007 as a fixed income investment analyst and trader. She was appointed assistant vice president and named assistant portfolio manager in 2010. She was appointed vice president in 2014 and senior vice president in 2017. Prior to joining the firm, Ms. Regan traded governments, agencies and mortgage-backed securities for Commerce Bank from 1988 to 2007. Ms. Regan earned a BA in Economics in 1984 and an MA in Economics in 1985 from the University of Missouri-Columbia.

Growth of a $10,000 Investment
through 9/30/2018

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 10/18/2018

Net Asset Value (NAV) $9.51
Daily NAV Change ($) ($0.00) 0.00%
Weekly NAV Change ($) $-0.02 -0.21%
Public Offering Price (POP) $9.51

Fund Facts

Ticker Symbol ICKIX
CUSIP 46600B714
Fund Code 467
Fund Type Fixed Income Funds
Fund Inception 4/3/2017
Class Inception 4/3/2017
Fiscal Year End September
Dividends Paid Monthly
Fund Assets (as of 9/30/2018) $37.0 mil
Total Equity Holdings (as of 9/30/2018) 13
Total Holdings (as of 9/30/2018) 60
Portfolio Turnover Rate (as of 3/31/2018) 53%
Morningstar Category Corporate Bond
Lipper Category Corporate Debt Funds BBB-Rated
Benchmark Bloomberg Barclays U.S. Corporate Bond Index

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 9/30/2018
(Returns for periods of less than 1-yr are not annualized)
 
Fund at NAV -3.23% -2.41% 0.82%
Bloomberg Barclays U.S. Corporate Bond Index -2.22% -1.09% 3.13% 3.55% 6.35%
Morningstar Corporate Bond -1.95% -1.04% 3.23% 3.51% 5.81%

Quarterly Rates of Return

Average Annual Total Returns as of 9/30/2018
(Returns for periods of less than 1-yr are not annualized)
 
Fund at NAV -3.23% -2.41% 0.82%
Bloomberg Barclays U.S. Corporate Bond Index -2.22% -1.09% 3.13% 3.55% 6.35%
Morningstar Corporate Bond -1.95% -1.04% 3.23% 3.51% 5.81%

Morningstar Ranking as of 9/30/2018 Morningstar Logo

Category: Corporate Bond
 
Morningstar Ranking / # of Funds in Category displays the fund's actual rank within its Morningstar Category based on average annual total return and number of Funds in that Category. The Morningstar Percentile Ranking compares a Fund's Morningstar risk and return scores with all the Funds in the same Category, where 1% = Best and 100% = Worst.
1 Year 213/246 88
3 Year —/—
5 Year —/—
10 Year —/—

Expense Ratios as of 1/31/2018

Net 0.65%
Gross 0.83%

5-Year Standard Deviation as of

Bloomberg Barclays U.S. Corporate Bond Index N/A

Distributions

Historical Prices Inception 4/3/2017

10/1/2018 $9.63 NO NO
10/2/2018 $9.65 NO NO
10/3/2018 $9.59 NO NO
10/4/2018 $9.57 NO NO
10/5/2018 $9.54 NO NO
10/8/2018 $9.54 NO NO
10/9/2018 $9.55 NO NO
10/10/2018 $9.54 NO NO
10/11/2018 $9.53 YES YES
10/12/2018 $9.53 NO NO
10/15/2018 $9.53 NO NO
10/16/2018 $9.53 NO NO
10/17/2018 $9.51 NO NO
10/18/2018 $9.51 NO NO

Historical Distributions Inception 4/3/2017

10/11/2018 $0.026 Long: $0.000 Short: $0.000 $9.53 10/11/2018
9/13/2018 $0.026 Long: $0.000 Short: $0.000 $9.64 9/13/2018
8/16/2018 $0.022 Long: $0.000 Short: $0.000 $9.68 8/16/2018
7/12/2018 $0.022 Long: $0.000 Short: $0.000 $9.63 7/12/2018
6/14/2018 $0.022 Long: $0.000 Short: $0.000 $9.6 6/14/2018
5/10/2018 $0.022 Long: $0.000 Short: $0.000 $9.63 5/10/2018
3/15/2018 $0.022 Long: $0.000 Short: $0.000 $9.8 3/15/2018
2/15/2018 $0.022 Long: $0.000 Short: $0.000 $9.83 2/15/2018
1/11/2018 $0.012 Long: $0.000 Short: $0.000 $10.11 1/11/2018
12/14/2017 $0.0609 Long: $0.000 Short: $0.092 $10.15 12/14/2017
11/16/2017 $0.023 Long: $0.000 Short: $0.000 $10.23 11/16/2017
10/12/2017 $0.022 Long: $0.000 Short: $0.000 $10.29 10/12/2017
9/14/2017 $0.022 Long: $0.000 Short: $0.000 $10.26 9/14/2017
8/10/2017 $0.023 Long: $0.000 Short: $0.000 $10.22 8/10/2017
6/15/2017 $0.022 Long: $0.000 Short: $0.000 $10.21 6/15/2017
5/11/2017 $0.022 Long: $0.000 Short: $0.000 $10.03 5/11/2017

*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 9/30/2018

NAV 3.06%
With Sales Charge 3.06%

Annualized 30-Day SEC Yield as of 9/30/2018

Subsidized - NAV 4.09%
Unsubsidized - NAV 3.72%

Portfolio

Top 10 Holdings as a % of net assets 9/30/2018

Centene Escrow I Corp., 5.4%, 6/1/2026 2.77%
Elanco Animal Health, Inc., 4.9%, 8/28/2028 2.74%
Bank of America Corp., 5.9%, 9/15/2166 2.67%
Darden Restaurants, Inc., 3.9%, 5/1/2027 2.61%
L-3 Communications Corp., 3.9%, 12/15/2026 2.60%
Crown Castle International Corp., 4.8%, 5/15/2047 2.57%
Sunoco Logistics Partners Operations L.P. (GTD by Energy , 4.0%, 10/1/2027 2.57%
Anglo American Capital plc, 3.6%, 9/11/2024 2.57%
JPMorgan Chase & Co., 3.6%, 12/1/2027 2.55%
Wyndham Worldwide Corp., 4.5%, 4/1/2027 2.55%

Total Portfolio Holdings

Updated quarterly, upon availability.

Maturity
as a % of fixed income assets as of 9/30/2018

<1 Year 4.4%
1-5 Years 5.3%
5-10 Years 77.6%
10-20 Years 6.0%
>20 Years 6.8%
Average Maturity 12.51 years
Effective Duration 7.11 years

Fixed Income Country Allocation
as a % of bond holdings as of 9/30/2018

United States 84.6%
United Kingdom 8.2%
Spain 3.3%
Canada 2.1%
Ireland 1.4%
Bermuda 0.6%

Quality
as a % of fixed income assets as of 9/30/2018

Quality: Our preference is to always use ratings obtained from Standard & Poor's, Moody’s, and Fitch. It is each Portfolio’s general policy to classify such security at the lower rating level if only two ratings are available. If more than two ratings are available and a median exists, the median is used. If more than two ratings exist without a median, the lower of the two middle ratings is used. We do not evaluate these ratings, but simply assign them to the appropriate credit quality category as determined by the rating agency.
A 4.90%
BBB 75.20%
BB 19.90%

Portfolio Composition
as a % of net assets as of 9/30/2018

Corporate Bonds 93.48%
Cash and Cash Equivalents 5.24%
Asset-Backed Securities 1.28%

Total Portfolio Holdings

Updated quarterly, upon availability.

Documents

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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 Funds’ shares will change, and you could lose money on your investment. Fixed income securities in which the fund may invest are subject to credit risk, such that an issuer may not make payments when due or default or that the risk that an issuer could suffer adverse changes in its financial condition that could lower the credit quality of a security that could affect the Fund’s performance. A rise in interest rates may cause a decline in the value of the Fund’s securities, especially securities with longer maturities. Investing in below investment grade securities may carry a greater risk of nonpayment of interest or principal than higher-rated bonds. Investing in foreign securities involves a number of economic, financial, legal, and political considerations that are not associated with the U.S. markets and that could affect the Fund’s performance unfavorably, depending upon the prevailing conditions at any given time. Mortgage-backed and asset-backed securities in which the Fund may invest are subject to prepayment risk and extension risk. The Fund typically holds a limited number of fixed income securities (generally 30 to 50). As a result, the appreciation or depreciation of any one security held by the Fund may have a greater impact on the Fund’s NAV than it would if the Fund invested in a larger number of securities. Fund performance is primarily dependent on the management company’s skill in evaluating and managing the Fund’s portfolio. There can be no guarantee that its decisions will produce the desired results. 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.

The Bloomberg Barclays US Corporate Bond Index measures the investment grade, fixed-rate, taxable corporate bond market. It includes USD-denominated securities publicly issued by US and non-US industrial, utility and financial issuers. The US Corporate Index is a component of the US Credit and US Aggregate Indices. The index was launched in July 1973, with index history backfilled to January 1, 1973. It is not possible to invest directly in an index.

Rick Perry served as a portfolio manager on the Fund until April 12, 2018.

Fee Waiver and/or Expense Reimbursement: Through January 31, 2019, 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 the Fund's Class A shares at 0.90%, Class I shares at 0.65%, Class R shares at 1.40%, Class N shares at 0.65%, Class Y shares at 0.90%. Prior to that date, the expense limitation may not be terminated without the consent of the Board of Trustees (Board).

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.

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.

© 2018 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: Our preference is to always use ratings obtained from Standard & Poor's, Moody’s, and Fitch. It is each Portfolio’s general policy to classify such security at the lower rating level if only two ratings are available. If more than two ratings are available and a median exists, the median is used. If more than two ratings exist without a median, the lower of the two middle ratings is used. 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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