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Ivy Emerging Markets Equity Fund

  • $17.81 NAV as of 9/21/2017
  • ($-0.02) / -0.11% Daily NAV Change
  • 39.14% YTD (NAV)

Summary

Pursue emerging market equities in any region of the world

Global view
Can invest in emerging markets in any region of the world; offers exposure to an alternative source of potential return and additional portfolio diversification.
Equity focus
Focuses on equity securities, primarily common stocks, of companies located in emerging market countries or economically linked to those countries.
Disciplined process
A balanced approach to top-down and bottom-up analysis seeks key countries and sectors for growth, supported by in-depth research to help identify stocks for the portfolio

Morningstar Style Box

Growth
Large
Source: Morningstar

Portfolio Management

Jonas M. Krumplys, CFA

  • Ivy Investment Management Company
  • 3 Years with Fund
  • 35 Years in Industry
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Jonas Krumplys is co-portfolio manager of Ivy Emerging Markets Equity Fund. He was named co-portfolio manager of Ivy Emerging Markets Equity Fund in 2014. He served as sole manager of the fund from May 2016 to January 2017. He was portfolio manager of the former Ivy Asset Strategy New Opportunities Fund from its inception in 2010 to 2014, when the fund merged into Ivy Emerging Markets Equity Fund. He was appointed senior vice president in 2015. Mr. Krumplys joined Waddell & Reed in 2006 as an equity investment analyst after a previous tenure with the firm as an analyst from 1988 to 1991. He was appointed assistant vice president and named assistant portfolio manager of Waddell & Reed Advisors and Ivy Asset Strategy Funds in 2008. He was appointed vice president in 2009. Mr. Krumplys graduated from the University of Illinois at Urbana in 1978 with a BS in Architecture. He completed his final year of architectural studies at Ecole Nationale Superieure d’ Architecture in Versailles, France. His focus was alternative energy usage in architecture. He graduated from the University of Illinois at Chicago with an MS in Chemical Engineering in 1982. He earned an MBA with an emphasis in Finance and Marketing from the University of Chicago, Graduate School of Business in 1986. Mr. Krumplys is a CFA charterholder. He is a member of the CFA Institute and the CFA Society of Kansas City.

Aditya Kapoor, CFA

  • Ivy Investment Management Company
  • <1 Year with Fund
  • 10 Years in Industry
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Adi Kapoor is co-portfolio manager of Ivy Emerging Markets Equity Fund. He was named co-portfolio manager of Ivy Emerging Markets Equity Fund and appointed vice president in 2017. Mr. Kapoor joined Waddell & Reed in 2008 as an equity investment analyst. He was appointed assistant vice president in 2013. His research responsibilities are concentrated in the global internet industry. Mr. Kapoor was a member of the Core Equity team from 2014 to 2017, serving as assistant portfolio manager of Ivy Core Equity Fund, Ivy VIP Core Equity, Waddell & Reed Advisors Core Investment Fund and core equity institutional accounts. Prior to joining Waddell & Reed, Mr. Kapoor was a 2007 summer associate at JPMorgan Chase & Co. where he worked on the trading floor with the structured credit and asset-backed securities desks. Mr. Kapoor earned a Bachelor of Technology in Production and Industrial Engineering from the Indian Institute of Technology (IIT-Delhi) in 2002. He earned an MBA from The Johnson School at Cornell University in 2008. At Cornell he was a portfolio manager of the student-run Cayuga Fund covering ADRs. Mr. Kapoor is a CFA charterholder. He is a member of the CFA Institute and the CFA Society of Kansas City.

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

Ivy_EME_2_17
  • Ivy Emerging Markets Equity Fund
  • February 28, 2017

Exploring the potential in emerging markets now

We think several factors are contributing to the potential for emerging market equities to perform well in 2017.

Quarterly Fund Commentary

Daily Prices as of 9/21/2017

Net Asset Value (NAV) $17.81
Daily NAV Change ($) ($-0.02) -0.11%
Weekly NAV Change ($) $0.21 1.19%
Public Offering Price (POP) $17.81

Fund Facts

Ticker Symbol IPOCX
CUSIP 465897643
Fund Code 311
Fund Type Global/International
Fund Inception 10/25/1993
Class Inception 4/30/1996
Fiscal Year End March
Dividends Paid December
Fund Assets (as of 8/31/2017) $1.7 bil
Total Equity Holdings (as of 8/31/2017) 72
Total Holdings (as of 8/31/2017) 75
Portfolio Turnover Rate (as of 3/31/2017) 59%
Lipper Category Emerging Markets Funds
Morningstar Category Diversified Emerging Mkts
Benchmark MSCI EM NR 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. For Class C shares, a 1% CDSC applies to the lesser of amount invested or redemption value of shares redeemed within twelve months after the purchase date.

Monthly Rates of Return

Average Annual Total Returns as of 8/31/2017
(Returns for periods of less than 1-yr are not annualized)
 
Lipper Emerging Markets Funds 26.46% 21.87% 1.73% 5.14% 2.09% 6.06%
MSCI EM NR USD 28.29% 24.53% 2.38% 5.30% 2.43%
Fund with maximum 1.00% CDSC 32.13% 27.64% 6.10% 9.00% 2.39% 4.90%
Fund at NAV 33.13% 27.64% 6.10% 9.00% 2.39% 4.90%

Quarterly Rates of Return

Average Annual Total Returns as of 6/30/2017
(Returns for periods of less than 1-yr are not annualized)
 
Lipper Emerging Markets Funds 17.73% 20.22% 0.28% 3.99% 1.44% 5.75%
MSCI EM NR USD 18.43% 23.74% 1.07% 3.96% 1.91%
Fund with maximum 1.00% CDSC 19.86% 25.98% 3.98% 6.44% 2.16% 4.46%
Fund at NAV 20.86% 25.98% 3.98% 6.44% 2.16% 4.46%

Calendar Year Return

  2012
Class C 15.88 8.52 -0.92 -12.74 8.94
MSCI EM NR USD 18.22 -2.60 -2.19 -14.92 11.19

Morningstar Ratings as of 8/31/2017 Morningstar Logo

Category: Diversified Emerging Mkts
Ratings are based on risk-adjusted returns
Overall out of 631
3 Year out of 631
5 Year out of 439
10 Year out of 178

Lipper Ranking through 8/31/2017 Lipper Logo

Category: Emerging Markets Funds
 
Rankings are based on average annual total returns, but do not consider sales charges.
1 Year 136/814 17
3 Year 32/645 5
5 Year 30/452 7
10 Year 80/182 44

Expense Ratios as of 7/5/2017

Net 2.36%
Gross 2.36%

5-Year Standard Deviation as of 8/31/2017

MSCI EM NR USD 14.62

5-Year MPT* Statistics as of 8/31/2017

*Modern Portfolio Theory
Alpha 3.87
Beta 0.95
R-Squared 83.11
Sharpe Ratio 0.58
Capture Ratio Upside: 100.46%
Downside: 81.01%

Distributions

Historical Prices Inception 4/30/1996

9/1/2017 $17.13 NO NO
9/5/2017 $17.01 NO NO
9/6/2017 $17.08 NO NO
9/7/2017 $17.18 NO NO
9/8/2017 $17.17 NO NO
9/11/2017 $17.43 NO NO
9/12/2017 $17.51 NO NO
9/13/2017 $17.56 NO NO
9/14/2017 $17.60 NO NO
9/15/2017 $17.62 NO NO
9/18/2017 $17.84 NO NO
9/19/2017 $17.79 NO NO
9/20/2017 $17.83 NO NO
9/21/2017 $17.81 NO NO

Historical Distributions Inception 4/30/1996

12/10/2015 $0.0737 Long: $0.000 Short: $0.000 $11.74 12/10/2015
12/11/2014 $0.0144 Long: $0.000 Short: $0.000 $13.33 12/11/2014
12/12/2013 $0.0154 Long: $0.000 Short: $0.000 $13.27 12/12/2013
12/13/2012 $0.0352 Long: $0.000 Short: $0.000 $12.33 12/13/2012
12/8/2011 $0 Long: $0.522 Short: $0.000 $11.3 12/8/2011

*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.

Portfolio

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

Samsung Electronics Co. Ltd. Samsung Electronics Co., Ltd. is a Korea-based company engaged in the provision of consumer electronics, communication products, semiconductor products and home appliances. 5.53%
Tencent Holdings Ltd. An investment holding company, provides Internet and mobile value-added services (VAS), online advertising services, and e-commerce transactions services to users in China, the United States, Europe, and internationally. 4.99%
Alibaba Group Holding Ltd. ADR Alibaba Group Holding Limited, through its subsidiaries, operates as an online and mobile commerce company in the People's Republic of China and internationally. 3.76%
Taiwan Semiconductor Manufacturing Co. Ltd. Taiwan Semiconductor Manufacturing is the world's largest dedicated semiconductor foundry, offering advanced wafer production processes and manufacturing. 3.37%
Sunny Optical Technology (Group) Co. Ltd. Sunny Optical Technology Co., Ltd., designs and manufactures optical and optical related products. The company's products include glass/plastic lenses, prisms, mobile phone camera modules, microscopes, surveying instruments, and other analytical instruments. 3.04%
Sberbank of Russia ADR Largest bank in Russia and Eastern Europe, headquartered in Moscow 3.00%
Ping An Insurance (Group) Co. of China Ltd., H Shares 2.19%
Largan Precision Co. Ltd. Largan Precision Co., Ltd. is principally engaged in the research, development, design, manufacture and distribution of optical lens modules, real image view finders and optoelectronic parts. The Company provides optical lenses and lens sets, which are applied in the manufacture of scanners, cameras, multifunctional office machines, liquid crystal display (LCD) projectors, digital cameras, mobile phone cameras, digital versatile disk (DVD) players and optical mouse, among others. The Company primarily distributes its products in Asia, as well as to Europe and the America markets. 2.04%
Brilliance China Automotive Holdings Ltd. 1.95%
Maruti Suzuki India Ltd. Manufacturer and servicer of passenger cars in India 1.91%

Total Portfolio Holdings

Updated quarterly, upon availability.

Market Capitalization
as a % of equity assets as of 8/31/2017

Large 77.9%
Medium 19.8%
Small 2.3%
Median Market Cap (as of 8/31/2017) $22.7 bil

Top 10 Industry Allocation
as a % of Equity Holdings as of 8/31/2017

Diversified Banks 18.4%
Internet Software & Services 13.6%
Technology Hardware, Storage & Peripherals 6.9%
Automobile Manufacturers 6.1%
Electronic Components 5.1%
Semiconductors 5.0%
Integrated Oil & Gas 4.2%
Real Estate Development 3.5%
Steel 2.9%
Electronic Manufacturing Services 2.6%

Sector Allocation
as a % of equity assets as of 8/31/2017

Information Technology 33.20%
Financials 20.65%
Consumer Discretionary 14.56%
Materials 8.36%
Energy 5.65%
Consumer Staples 5.35%
Real Estate 4.35%
Health Care 3.46%
Telecommunication Services 2.27%
Industrials 2.15%

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

Foreign Common Stock 98.97%
Cash and Cash Equivalents 1.03%

Equity Country Allocation
as a % of equity assets as of 8/31/2017

China 26.5%
South Korea 13.6%
India 13.1%
Brazil 11.6%
Taiwan 8.7%
Russia 5.1%
Turkey 4.6%
Hong Kong 2.9%
Mexico 2.5%
South Africa 2.3%
Indonesia 2.2%
Chile 1.9%
Netherlands 1.8%
Macau 1.6%
Argentina 1.1%
Malaysia 0.8%

Total Portfolio Holdings

Updated quarterly, upon availability.

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. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. 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. 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 MSCI information may only be used for your internal use, may not be reproduced or repurposed in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, salability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. (www.msci.com) Source: MSCI.

Index Description: MSCI Emerging Markets is an unmanaged index comprised of securities that represent large and mid-cap companies within emerging market countries. 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.

Effective Feb. 11, 2014, Ivy Pacific Opportunities Fund was changed to Ivy Emerging Markets Equity Fund and its strategy was changed to reflect a concentration in emerging market equity securities. Performance prior to such time in part reflects the Ivy Pacific Opportunities Fund’s former strategy to invest primarily in Pacific region equity securities, and the Fund’s performance may have differed if the Ivy Emerging Markets Equity Fund’s current strategy had been in place.

High recent returns are attributable, in part, to unusually favorable market conditions and may not be repeated or consistently achieved in the future.

On March 17, 2014, Ivy Asset Strategy New Opportunities Fund merged into Ivy Emerging Markets Equity Fund. The Ivy Asset Strategy New Opportunities Fund has been liquidated and has terminated operations as a management investment company.

Investments in countries with emerging economies or securities markets may carry greater risk than investments in more developed countries. Political and economic structures in many such countries may be undergoing significant evolution and rapid development, and such countries may lack the social, political and economic stability characteristic of more developed countries.

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 (which would exclude interest, taxes, brokerage commissions, acquired fund fees and expenses and extraordinary expenses, if any) as follows: Class A shares at 1.58%; Class B shares at 2.50%; and Class I shares and Class N shares at 0.99%. Prior to that date, the expense limitation may not be terminated without the consent of the Board of Trustees (Board).

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 T shares and 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 without the consent of the Board.

Class T shares were launched on July 5, 2017.

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.

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.

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

Frederick Jiang, CFA, previously was a portfolio manager on the Fund. He left the company effective May 14, 2016.

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

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