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Ivy Natural Resources Fund

  • $11.67 NAV as of 10/23/2018
  • ($-0.29) / -2.42% Daily NAV Change
  • -10.64% YTD (NAV)

Summary

Tap the potential of natural resources companies worldwide

Investment universe
Fund can invest in international and domestic resource-related stocks, including energy, alternative energy, industrial products, forest products, base metals, precious metals and minerals, and agricultural products.
Disciplined process
Portfolio managers use a top-down analysis of macroeconomic and global market factors plus bottom-up research on company fundamentals to make stock selections in seeking long-term returns.
Potential
benefits
Commodities as an asset class historically have not moved in tandem with stocks, offering potential diversification and inflation protection by investing in life’s essential elements.

Morningstar Style Box

Growth
Large
Source: Morningstar

Portfolio Management

David P. Ginther, CPA

  • Ivy Investment Management Company
  • 5 Years with Fund
  • 23 Years in Industry
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David Ginther is co-portfolio manager of Ivy Energy Fund, Ivy VIP Energy and Ivy Global Investors Energy Fund; and of Ivy Natural Resources Fund and Ivy VIP Natural Resources. He has been portfolio manager of the Energy strategies since 2006 and of the Natural Resources strategies since 2013. He also has been co-portfolio manager of Ivy Focused Energy NextShares, an exchange-traded managed fund, since its inception in 2016. Mr. Ginther joined Waddell & Reed in 1995 as an equity investment analyst. He was named assistant portfolio manager of Waddell & Reed Advisors Core Investment Fund in 1999. He was portfolio manager of Ivy Dividend Opportunities fund and Ivy VIP Dividend Opportunities from 2003 to 2013. He was appointed assistant vice president in 1999 and vice president in 2000. He was appointed senior vice president in 2006. Prior to joining Waddell & Reed, Mr. Ginther was a senior business analyst with Amoco Corporation. He began his career with Amoco in 1986, analyzing natural gas fields in Tulsa. He then moved to Amoco corporate headquarters in Chicago and joined its international operations. From there, he moved to Houston and worked in the Worldwide Exploration Business Unit, including international assignments in Africa. Mr. Ginther graduated from Kansas State University in 1986 with a BS in Accounting. He earned a Certified Public Accountant designation in 1992.

Michael T. Wolverton, CFA

  • Ivy Investment Management Company
  • 2 Years with Fund
  • 14 Years in Industry
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Michael Wolverton is co-portfolio manager of Ivy Energy Fund and Ivy VIP Energy, and of Ivy Natural Resources Fund and Ivy VIP Natural Resources. He was named co-portfolio manager of the Energy and Natural Resources strategies in 2016. He had been assistant portfolio manager on those strategies since 2013. He has been co-portfolio manager of Ivy Focused Energy NextShares, an exchange-traded managed fund, since inception in 2016. Mr. Wolverton joined Waddell & Reed in 2005 as an equity investment analyst. He was appointed assistant vice president in 2012 and vice president in 2017. His research responsibilities are concentrated in energy equipment and services, and oil, gas and consumable fuels. From 2003 through 2005 Mr. Wolverton was affiliated with the MBA Investment Fund, LLC as a portfolio manager. In this role, he and his team were responsible for managing three equity and fixed income portfolios totaling $12 million. He held a summer intern position with Waddell & Reed in 2004. Mr. Wolverton graduated from William Jewell College in 1997 with a BS in Accounting. He earned an MBA with an emphasis in Finance from the University of Texas at Austin, McCombs School of Business in 2005. Mr. Wolverton 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 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

Perspectives

Quarterly Fund Commentary

Daily Prices as of 10/23/2018

Net Asset Value (NAV) $11.67
Daily NAV Change ($) ($-0.29) -2.42%
Weekly NAV Change ($) $-0.82 -6.57%
Public Offering Price (POP) $11.67

Fund Facts

Ticker Symbol IGNCX
CUSIP 465897395
Fund Code 312
Fund Type Specialty Funds
Fund Inception 1/2/1997
Class Inception 1/2/1997
Fiscal Year End March
Dividends Paid December
Fund Assets (as of 9/30/2018) $511.6 mil
Total Equity Holdings (as of 9/30/2018) 44
Total Holdings (as of 9/30/2018) 47
Portfolio Turnover Rate (as of 3/31/2018) 33%
Morningstar Category Natural Resources
Lipper Category Global Natural Resources Funds
Benchmark S&P North American Natural Resources Sector Index
Benchmark MSCI ACWI IMI ENERGY 55 MATERIALS 45
Benchmark MSCI ACWI IMI/ Energy Index USD Net
Benchmark MSCI ACWI IMI/ Materials Index USD Net

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 9/30/2018
(Returns for periods of less than 1-yr are not annualized)
 
MSCI ACWI IMI/ Materials Index USD Net -3.94% 3.56% 17.04% 4.92% 5.01%
Fund with maximum 1.00% CDSC -2.21% 6.35% 5.65% -3.27% -2.02% 5.48%
Fund at NAV -1.22% 6.35% 5.65% -3.27% -2.02% 5.48%
Morningstar Natural Resources -1.12% 6.07% 13.53% 1.55% 3.97%
MSCI ACWI IMI ENERGY 55 MATERIALS 45 3.04% 10.39% 15.16% 2.44% 3.64%
S&P North American Natural Resources Sector Index 3.13% 9.25% 10.29% -0.35% 2.22%
MSCI ACWI IMI/ Energy Index USD Net 8.65% 15.86% 13.22% 0.10% 2.07%

Quarterly Rates of Return

Average Annual Total Returns as of 9/30/2018
(Returns for periods of less than 1-yr are not annualized)
 
MSCI ACWI IMI/ Materials Index USD Net -3.94% 3.56% 17.04% 4.92% 5.01%
Fund with maximum 1.00% CDSC -2.21% 6.35% 5.65% -3.27% -2.02% 5.48%
Fund at NAV -1.22% 6.35% 5.65% -3.27% -2.02% 5.48%
Morningstar Natural Resources -1.12% 6.07% 13.53% 1.55% 3.97%
MSCI ACWI IMI ENERGY 55 MATERIALS 45 3.04% 10.39% 15.16% 2.44% 3.64%
S&P North American Natural Resources Sector Index 3.13% 9.25% 10.29% -0.35% 2.22%
MSCI ACWI IMI/ Energy Index USD Net 8.65% 15.86% 13.22% 0.10% 2.07%

Calendar Year Return

Indexes 2013
Class C 2.19 23.00 -22.87 -13.87 7.20
MSCI ACWI IMI ENERGY 55 MATERIALS 45 -19.71 -11.31 7.57

Morningstar Ratings as of 9/30/2018 Morningstar Logo

Category: Natural Resources
Ratings are based on risk-adjusted returns
Overall out of 123
3 Year out of 123
5 Year out of 118
10 Year out of 82

Morningstar Ranking as of 9/30/2018 Morningstar Logo

Category: Natural Resources
 
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 78/132 55
3 Year 115/123 95
5 Year 82/118 77
10 Year 77/82 93

Expense Ratios as of 7/31/2018

Net 2.31%
Gross 2.31%

5-Year Standard Deviation as of 9/30/2018

MSCI ACWI IMI ENERGY 55 MATERIALS 45 15.31
MSCI ACWI IMI/ Energy Index USD Net 17.75
MSCI ACWI IMI/ Materials Index USD Net 14.80
S&P North American Natural Resources Sector Index 18.29

5-Year MPT* Statistics as of 9/30/2018

*Modern Portfolio Theory
Alpha -3.08
Beta 0.91
R-Squared 94.07
Sharpe Ratio -0.22
Capture Ratio Upside: 86.51%
Downside: 98.69%

Distributions

Historical Prices Inception 1/2/1997

10/1/2018 $13.03 NO NO
10/2/2018 $13.08 NO NO
10/3/2018 $13.21 NO NO
10/4/2018 $13.12 NO NO
10/5/2018 $13.12 NO NO
10/8/2018 $13.05 NO NO
10/9/2018 $13.07 NO NO
10/10/2018 $12.55 NO NO
10/11/2018 $12.27 NO NO
10/12/2018 $12.33 NO NO
10/15/2018 $12.32 NO NO
10/16/2018 $12.49 NO NO
10/17/2018 $12.35 NO NO
10/18/2018 $12.19 NO NO
10/19/2018 $12.08 NO NO
10/22/2018 $11.96 NO NO

Historical Distributions Inception 1/2/1997

12/13/2007 $0.17 Long: $1.571 Short: $1.644 $34.97 12/13/2007
12/14/2006 $0 Long: $1.584 Short: $1.285 $28.42 12/14/2006
12/15/2005 $0 Long: $0.388 Short: $1.132 $24.37 12/15/2005
12/31/2002 $0.007 Long: $0.000 Short: $0.000 $11.13 12/31/2002
12/31/2001 $0.1587 Long: $0.000 Short: $0.000 $10.29 12/31/2001

*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 0.00%
With Sales Charge 0.00%

Portfolio

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

Halliburton Co. Halliburton Company provides various products and services to the energy industry for the exploration, development, and production of oil and gas properties worldwide. 5.78%
Concho Resources, Inc. Concho Resources Inc., an independent oil and natural gas company, acquires, develops, and explores for oil and natural gas properties in the U.S. 4.84%
EOG Resources, Inc. EOG Resources, Inc., explores, develops, produces and markets natural gas and crude oil primarily in producing basins in the United States, Canada, The Republic of Trinidad and Tobago, the United Kingdom, and The People's Republic of China. 4.53%
Chevron Corp. Chevron Corp., through its subsidiaries, engages in integrated energy, chemicals, and petroleum operations worldwide. 4.31%
Phillips 66 Phillips 66 is an independent downstream energy company that operates in refining & marketing, midstream and chemicals 4.04%
Marathon Petroleum Corp. Marathon Petroleum Corporation (MPC) is a petroleum product refiner, transporter and marketer in the United States. The Company operates in three segments: Refining & Marketing, Speedway and Pipeline Transportation. 3.50%
Valero Energy Corp. Valero Energy Corp. engages in the manufacture and marketing of transportation fuels and other petrochemical products through Refining and Ethanol segments. The company was founded in 1980 and is headquartered in San Antonio, TX. 3.46%
BHP Billiton plc BHP Billiton Plc is a diversified natural resources company that operates worldwide. 3.37%
WPX Energy, Inc. WPX Energy Inc. operates as an independent natural gas and oil exploration and production company. The Company focuses on its natural gas reserve base and related NGLs in the Piceance Basin of the Rocky Mountain region, the Bakken Shale oil play in North Dakota, and the Marcellus Shale natural gas play in Pennsylvania. 3.22%
Canadian Pacific Railway Ltd. Canadian Pacific Railway Limited, through its subsidiaries, operates as a transcontinental railway providing freight transportation services, logistics solutions, and supply chain expertise in Canada and the United States. 3.20%

Total Portfolio Holdings

Updated quarterly, upon availability.

Market Capitalization
as a % of equity assets as of 9/30/2018

Large ( > $10 bil) 74.0%
Medium ($2 - $10 bil) 26.0%
Small ( < $2 bil) 0.0%
Median Market Cap (as of 9/30/2018) $16.5 bil

Top 10 Industry Allocation
as a % of Equity Holdings as of 9/30/2018

Oil & Gas Exploration & Production 29.6%
Oil & Gas Equipment & Services 13.7%
Oil & Gas Refining & Marketing 11.2%
Specialty Chemicals 6.8%
Diversified Metals & Mining 6.3%
Integrated Oil & Gas 6.0%
Railroads 5.8%
Oil & Gas Storage & Transportation 5.8%
Fertilizers & Agricultural Chemicals 3.1%
Industrial Gases 2.5%

Sector Allocation
as a % of equity assets as of 9/30/2018

Energy 66.31%
Materials 26.89%
Industrials 5.80%
Consumer Staples 1.00%

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

Domestic Common Stock 75.03%
Foreign Common Stock 23.28%
Cash and Cash Equivalents 1.69%

Equity Country Allocation
as a % of equity assets as of 9/30/2018

United States 76.3%
Canada 7.8%
United Kingdom 6.7%
Australia 3.4%
Netherlands 2.6%
South Africa 2.0%
Portugal 1.1%
Hong Kong 0.0%

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. Investing in companies involved in one specified sector may be more risky and volatile than an investment with greater diversification. 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. Investing in natural resources can be riskier than other types of investment activities because of a range of factors, including price fluctuation caused by real and perceived inflationary trends and political developments; and the cost assumed by natural resource companies in complying with environmental and safety regulations. Investing in physical commodities, such as gold, exposes the fund to other risk considerations such as potentially severe price fluctuations over short periods of time. The Fund may use a range of derivative instruments in seeking to hedge market risk on equity securities, increase exposure to specific sectors or companies, and manage exposure to various foreign currencies and precious metals. Such hedging involves additional risks, as the fluctuations in the values of the derivatives may not correlate perfectly with the overall securities markets or with the underlying asset from which the derivative’s value is derived. These and other risks are more fully described in the prospectus. Not all funds or fund classes may be offered at all broker/ dealers.

Effective, April 30, 2018, the Portfolio's benchmark changed from the MSCI ACWI IMI 55% Energy + 45% Materials Index, MSCI ACWI IMI Energy Index and the MSCI ACWI IMI Materials Index to the S&P North American Natural Resources Sector Index. Both the prior and current benchmark indexes will be shown for a period of one year for comparison purposes.

Index Description: MSCI ACWI (All Country World Index) 55% Energy and 45% Materials Index is a custom index that is a free float-adjusted market capitalization weighted index that is designed to measure the energy and materials equity market performance of developed and emerging markets. It is not possible to invest directly in an index.

Index Description: The S&P North American Natural Resources Sector Index represents U.S.-traded securities in the energy and materials sectors, excluding the chemicals industry, and steel sub-industry. 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.

Fee Waiver and/or Expense Reimbursement: Through July 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) as follows: Class E shares at 1.27%. 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, 2019, 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 without the consent of the 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.

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.

© 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.

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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