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Ivy Crossover Credit Fund

  • $10.25 NAV as of 9/22/2017
  • ($0.01) / 0.10% Daily NAV Change
  • 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
Rick Perry has 24 years experience in the industry managing both high yield and investment-grade credit portfolios.

Portfolio Management

Rick Perry, CFA , CPA

  • Ivy Investment Management Company
  • <1 Year with Fund
  • 24 Years in Industry
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Rick Perry is portfolio manager of Ivy VIP Bond, Waddell & Reed Advisors Bond Fund and Waddell & Reed Advisors Government Securities Fund, managing the funds since 2015. He is portfolio manager of Ivy Crossover Credit Fund since its inception in 2017. He was named co-portfolio manager in 2017 of Ivy Balanced Fund, Ivy VIP Balanced and Waddell & Reed Advisors Continental Income Fund. Mr. Perry joined Waddell & Reed in 2015 as senior vice president and portfolio manager. Prior to joining Waddell & Reed, Mr. Perry was a portfolio manager with Aegon USA Investment Management, where he was head of investment grade credit since 2006. He joined Aegon in 2001 as a high-yield portfolio manager and added the title of director of credit research in 2002. Prior to joining Aegon, Mr. Perry was a high-yield portfolio manager with ING Investment Management and an associate portfolio manager with Equitable Investment Services. He began his career as a Certified Public Accountant with McGladrey & Pullen CPA's. Mr. Perry graduated magna cum laude in 1989 with a BA in Accounting and Business Management from Central College in Pella, Iowa. He earned an MBA with a concentration in Investments, graduating magna cum laude from the University of Iowa in 1992. He earned the Chartered Financial Analyst (CFA) designation in 1998; and the Certified Public Accountant (CPA) designation in 1991. Mr. Perry is a CFA charterholder. He is a member of the CFA Institute.

Growth of a $10,000 Investment
through 8/31/2017

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

Perspectives

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Fallen Angels Offer Opportunity in Credit Market

In most credit cycles, the market hits a point when credit rating downgrades far exceed upgrades. This ratings migration process can significantly impact the valuations of securities, particularly when credits are downgraded from a rating of investment grade to high yield.

Daily Prices as of 9/22/2017

Net Asset Value (NAV) $10.25
Daily NAV Change ($) ($0.01) 0.10%
Weekly NAV Change ($) $-0.01 -0.10%
Public Offering Price (POP) $10.25

Fund Facts

Ticker Symbol ICKYX
CUSIP 46600B664
Fund Code 779
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 8/31/2017) $31.7 mil
Total Holdings (as of 8/31/2017) 50
Lipper Category Corporate Debt Funds BBB-Rated
Morningstar Category Corporate Bond
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 Y shares are not subject to sales charges.

Monthly Rates of Return

Average Annual Total Returns as of 8/31/2017
(Returns for periods of less than 1-yr are not annualized)
 
Fund at NAV 3.81%
Lipper Corporate Debt Funds BBB-Rated 5.16% 2.09% 3.05% 3.35% 5.35% 3.39%
Bloomberg Barclays U.S. Corporate Bond Index 5.44% 2.00% 3.69% 3.63% 5.84% 4.01%

Quarterly Rates of Return

Average Annual Total Returns as of 6/30/2017
(Returns for periods of less than 1-yr are not annualized)
 
Fund at NAV 2.00%
Lipper Corporate Debt Funds BBB-Rated 3.69% 2.47% 2.96% 3.63% 5.35% 1.94%
Bloomberg Barclays U.S. Corporate Bond Index 3.87% 2.17% 3.61% 3.96% 5.78% 2.46%

Expense Ratios as of 4/3/2017

Net 0.90%
Gross 1.08%

5-Year Standard Deviation as of

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

Distributions

Historical Prices Inception 4/3/2017

9/1/2017 $10.28 NO NO
9/5/2017 $10.33 NO NO
9/6/2017 $10.30 NO NO
9/7/2017 $10.34 NO NO
9/8/2017 $10.33 NO NO
9/11/2017 $10.29 NO NO
9/12/2017 $10.27 NO NO
9/13/2017 $10.27 NO NO
9/14/2017 $10.26 YES YES
9/15/2017 $10.26 NO NO
9/18/2017 $10.26 NO NO
9/19/2017 $10.26 NO NO
9/20/2017 $10.24 NO NO
9/21/2017 $10.24 NO NO
9/22/2017 $10.25 NO NO

Historical Distributions Inception 4/3/2017

No results found.

*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 8/31/2017

Subsidized - NAV 2.67%
Unsubsidized - NAV 1.98%

Portfolio

Top 10 Holdings as a % of net assets 8/31/2017

Federal National Mortgage Association, 1.0%, 9/1/2017 3.63%
Jabil Circuit, Inc., 4.7%, 9/15/2022 3.41%
Crown Castle International Corp., 4.8%, 5/15/2047 3.31%
Goldman Sachs Group, Inc. (The), 4.3%, 10/21/2025 3.30%
L-3 Communications Corp., 3.9%, 12/15/2026 3.30%
Darden Restaurants, Inc., 3.9%, 5/1/2027 3.28%
Constellation Brands, Inc., 3.7%, 12/6/2026 3.27%
Anglo American Capital plc, 3.8%, 4/10/2022 3.22%
Cimarex Energy Co., 3.9%, 5/15/2027 3.21%
Wyndham Worldwide Corp., 4.5%, 4/1/2027 3.21%

Total Portfolio Holdings

Updated quarterly, upon availability.

Maturity
as a % of fixed income assets as of 8/31/2017

<1 Year 5.4%
1-5 Years 11.3%
5-10 Years 61.7%
10-20 Years 17.4%
>20 Years 4.2%
Average Maturity 8.98 years
Effective Duration 7.19 years

Fixed Income Country Allocation
as a % of bond holdings as of 8/31/2017

United States 82.0%
United Kingdom 6.1%
Canada 5.9%
Ireland 1.7%
Netherlands 1.7%
Cayman Islands 1.7%
Spain 0.9%

Quality
as a % of fixed income assets as of 8/31/2017

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.
A 2.70%
BBB 93.00%
BB 4.30%

Portfolio Composition
as a % of net assets as of 8/31/2017

Corporate Bonds 91.35%
Cash and Cash Equivalents 7.05%
Asset-Backed Securities 1.60%

Total Portfolio Holdings

Updated quarterly, upon availability.

Documents

Select a document below to view or download.

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.

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.

When a fund's share class has less than a year of performance to report, the returns shown are cumulative.

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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