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Ivy Micro Cap Growth Fund

  • $23.33 NAV as of 7/27/2017
  • ($-0.27) / -1.14% Daily NAV Change
  • 6.29% YTD (NAV)

Summary

Searching for opportunity in the smallest of the small

Approach
Looks for smallest-sized companies, seeking to capitalize on those entering their greatest periods of growth acceleration. We seek to find premier, early-stage growth companies within large addressable markets.
Strategic process
Focuses on a bottom-up, research-driven approach concentrating on quality businesses based on fundamental financial strength, management vision and extraordinary earnings growth. This results in a portfolio broadly diversified by industry and sector with generally 50-70 holdings.
Experienced management
The Fund’s manager has nearly 20 years of investment industry experience. He also has 10+ years of experience managing small and micro-cap strategies and is supported by a team of more than 70 investment professionals.

Morningstar Style Box

Growth
Small
Source: Morningstar

Portfolio Management

John Bichelmeyer, CFA

  • Ivy Investment Management Company
  • 2 Years with Fund
  • 20 Years in Industry
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John Bichelmeyer is portfolio manager of Ivy and Ivy VIP Micro Cap Growth Funds. He has been portfolio manager of the funds since 2015. Mr. Bichelmeyer joined Waddell & Reed in 2015 as vice president and portfolio manager. Prior to joining Waddell & Reed, Mr. Bichelmeyer was affiliated with Kornitzer Capital Management (KCM) as an equity analyst and portfolio manager from 2005 to 2015. Prior to joining KCM, he was an equity analyst and portfolio manager with Trilogy Global Advisors (formerly BPI Global Asset Management) in Orlando, Florida. Mr. Bichelmeyer graduated from Creighton University in 1997 with a BSBA in Finance. He earned the Chartered Financial Analyst designation in 2001. Mr. Bichelmeyer 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 6/30/2017

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

Perspectives

Quarterly Fund Commentary

Daily Prices as of 7/27/2017

Net Asset Value (NAV) $23.33
Daily NAV Change ($) ($-0.27) -1.14%
Weekly NAV Change ($) $-0.11 -0.47%
Public Offering Price (POP) $23.33

Fund Facts

Ticker Symbol IGWBX
CUSIP 465899672
Fund Code 598
Fund Type Domestic Equity
Fund Inception 2/17/2009
Class Inception 2/17/2009
Fiscal Year End March
Dividends Paid December
Fund Assets (as of 6/30/2017) $171.2 mil
Total Equity Holdings (as of 6/30/2017) 50
Total Holdings (as of 6/30/2017) 52
Portfolio Turnover Rate (as of 3/31/2017) 32%
Lipper Category Small-Cap Growth Funds
Morningstar Category Small Growth
Benchmark Russell Micro Cap Growth TR USD
Benchmark Russell 2000 Growth 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 B shares, including sales charge, reflects the applicable contingent deferred sales charge (CDSC), which declines from 5% at the time of purchase to zero at the beginning of the seventh year.

Monthly Rates of Return

Average Annual Total Returns as of 6/30/2017
(Returns for periods of less than 1-yr are not annualized)
 
Fund with maximum 5.00% CDSC 1.42% 20.22% 0.76% 9.34% 14.60%
Fund at NAV 6.42% 24.22% 1.68% 9.48% 14.60%
Russell Micro Cap Growth TR USD 7.99% 22.63% 4.60% 12.75% 5.58% 16.09%
Russell 2000 Growth TR USD 9.97% 24.40% 7.64% 13.98% 7.82% 16.92%
Lipper Small-Cap Growth Funds 10.78% 22.82% 6.50% 12.54% 6.98% 16.84%

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 with maximum 5.00% CDSC 1.42% 20.22% 0.76% 9.34% 14.60%
Fund at NAV 6.42% 24.22% 1.68% 9.48% 14.60%
Russell Micro Cap Growth TR USD 7.99% 22.63% 4.60% 12.75% 5.58% 16.09%
Russell 2000 Growth TR USD 9.97% 24.40% 7.64% 13.98% 7.82% 16.92%
Lipper Small-Cap Growth Funds 10.78% 22.82% 6.50% 12.54% 6.98% 16.84%

Calendar Year Return

  2012
Class B 10.50 53.30 -3.36 -10.51 12.19
Russell 2000 Growth TR USD 14.59 43.30 5.60 -1.38 11.32
Russell Micro Cap Growth TR USD 15.17 52.84 4.30 -3.85 6.86

Morningstar Ratings as of 6/30/2017 Morningstar Logo

Category: Small Growth
Ratings are based on risk-adjusted returns
Overall out of 599
3 Year out of 599
5 Year out of 533
10 Year out of —

Lipper Ranking through 6/30/2017 Lipper Logo

Category: Small-Cap Growth Funds
 
Rankings are based on average annual total returns, but do not consider sales charges.
1 Year 192/545 36
3 Year 449/487 93
5 Year 411/436 95
10 Year

Expense Ratios as of 7/5/2017

Net 2.60%
Gross 2.60%

5-Year Standard Deviation as of 6/30/2017

Russell Micro Cap Growth TR USD N/A
Russell 2000 Growth TR USD 14.68

5-Year MPT* Statistics as of 6/30/2017

*Modern Portfolio Theory
Alpha -3.72
Beta 1.00
R-Squared 78.86
Sharpe Ratio 0.57
Capture Ratio Upside: 92.22%
Downside: 112.53%

Distributions

Historical Prices Inception 2/17/2009

7/3/2017 $23.25 NO NO
7/5/2017 $23.27 NO NO
7/6/2017 $22.91 NO NO
7/7/2017 $23.29 NO NO
7/10/2017 $23.20 NO NO
7/11/2017 $23.35 NO NO
7/12/2017 $23.65 NO NO
7/13/2017 $23.65 NO NO
7/14/2017 $23.77 NO NO
7/17/2017 $23.74 NO NO
7/18/2017 $23.47 NO NO
7/19/2017 $23.55 NO NO
7/20/2017 $23.44 NO NO
7/21/2017 $23.27 NO NO
7/24/2017 $23.40 NO NO
7/25/2017 $23.53 NO NO
7/26/2017 $23.60 NO NO
7/27/2017 $23.33 NO NO

Historical Distributions Inception 2/17/2009

12/8/2016 $0 Long: $0.315 Short: $0.000 $22.42 12/8/2016
12/10/2015 $0 Long: $0.896 Short: $0.000 $19.89 12/10/2015
12/11/2014 $0 Long: $0.989 Short: $0.189 $21.98 12/11/2014
12/12/2013 $0 Long: $1.420 Short: $0.000 $23.58 12/12/2013
12/8/2011 $0 Long: $0.771 Short: $0.336 $15.44 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 6/30/2017

Aerie Pharmaceuticals, Inc. Aerie Pharmaceuticals, Inc., a clinical-stage pharmaceutical company, focuses on the discovery, development, and commercialization of first-in-class therapies for the treatment of patients with glaucoma and other diseases of the eye. 4.30%
Tile Shop Holdings, Inc. Tile Shop Holdings, Inc. operates as a specialty retailer of manufactured and natural stone tiles, setting and maintenance materials, and related accessories in the United States. 4.18%
8x8, Inc. Global provider of secure enterprise cloud communications solutions 3.90%
Mimecast Ltd. Mimecast Ltd. provides cloud security and risk management services for corporate information and email. 3.42%
GTT Communications, Inc. GTT Communications, Inc. offers telecommunications services. The Company does not own the infrastructure over which services are provided. GTT Communications designs and integrates data transfer and connectivity solutions and offers access to the networks and technologies of its vendor partners. 3.30%
SPS Commerce, Inc. SPS Commerce, Inc., is a provider of on-demand supply chain management solutions, providing integration, collaboration, connectivity, visibility and data analytics. The Company provides its solutions through SPSCommerce.net, a hosted software suite. 3.29%
K2M Group Holdings, Inc. K2M Group Holdings, Inc. is a global medical device company focused on designing, developing and commercializing innovative complex spine and minimally invasive spine technologies and techniques used by spine surgeons to treat some of the most difficult and challenging spinal pathologies. 3.26%
Q2 Holdings, Inc. Q2 Holdings, Inc., through its subsidiary, is engaged in providing secure, cloud-based virtual banking solutions. Its software suite includes integrated modules for online banking, telephone banking, mobile banking, and core account management 3.18%
Nautilus Group, Inc. (The) Nautilus, Inc., together with its subsidiaries, operates as a consumer fitness products company in the United States, Canada, and internationally. 3.07%
Kornit Digital Ltd. Kornit Digital Ltd. develops, designs and markets digital printing solutions for the global printed textile industry. The company's solutions include digital printing systems, ink and other consumables, associated software and value-added services. Its customers include custom decorators, online businesses, brand owners and contract printers. 3.04%

Total Portfolio Holdings

Updated quarterly, upon availability.

Market Capitalization
as a % of equity assets as of 6/30/2017

Large 0.0%
Medium 5.5%
Small 94.5%
Median Market Cap (as of 6/30/2017) $644.3 mil

Top 10 Industry Allocation
as a % of Equity Holdings as of 6/30/2017

Internet Software & Services 17.6%
Health Care Equipment 13.4%
Pharmaceuticals 7.2%
Application Software 5.5%
Health Care Technology 5.5%
Home Improvement Retail 4.4%
Semiconductor Equipment 4.2%
Building Products 3.6%
Leisure Products 3.2%
Industrial Machinery 3.2%

Sector Allocation
as a % of equity assets as of 6/30/2017

Information Technology 33.00%
Health Care 28.55%
Industrials 12.90%
Consumer Discretionary 12.23%
Energy 5.57%
Materials 2.97%
Consumer Staples 1.99%
Real Estate 1.75%
Financials 1.04%

Portfolio Composition
as a % of net assets as of 6/30/2017

Domestic Common Stock 93.75%
Cash and Cash Equivalents 4.68%
Foreign Common Stock 1.57%

Equity Country Allocation
as a % of equity assets as of 6/30/2017

United States 95.2%
Israel 3.2%
United Kingdom 1.7%

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. Investment return and principal value will fluctuate, and it is possible to lose money by investing. Market risk for small-sized companies may be greater than that for medium or large companies. Smaller companies are more likely to have limited financial resources and inexperienced management. Stocks of smaller companies, as well as stocks of companies with high-growth expectations reflected in their stock price, may experience volatile trading and price fluctuations. Furthermore, when the economy enters a recession, there tends to be a “flight to quality,” which may exacerbate the increased risk and greater price volatility normally associated with smaller companies. The Fund’s performance may be more susceptible to a single economic, regulatory, or technological occurrence than if it had a more diversified investment portfolio. The Fund may invest in Initial Public Offerings (IPOs), which can have a significant positive impact on the Fund’s performance that may not be sustainable. 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. 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.

Index Description: Russell Micro Cap Growth measures the performance of the micro cap growth segment of the U.S. Equity market. It includes those Russell Micro Cap Index companies with higher price-to-book ratios and higher forecasted growth values. It is not possible to invest directly in an index.

Index Description: Russell 2000 Growth is an unmanaged index comprised of securities that represent the small cap sector of the stock market. It is not possible to invest directly in an index.

Effective July 1, 2015, Ivy Investment Management Company assumed direct investment management responsibilities of Ivy Micro Cap Growth Fund from Wall Street Associates, LLC, the Fund's former investment subadviser. In addition, effective July 1, 2015, John Bichelmeyer assumed investment management responsibilities for Ivy Micro Cap Growth Fund.

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.

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

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.

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

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