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Ivy Small Cap Core Fund

  • $18.25 NAV as of 4/21/2017
  • ($-0.04) / -0.22% Daily NAV Change
  • 1.67% YTD (NAV)

Summary

Seeking small companies with the potential for big opportunities

Conviction
Fund holds a limited number of stocks, allowing portfolio manager to interact with company management and for the best ideas to drive performance.
Focus on performance catalysts
Manager focuses on identifying inflection points in company fundamentals. He believes that with inexpensive stocks it is important to wait and see if a company’s fundamentals stabilize/inflect before fully entering a position.
Diversification & balance
Fund strives to participate in up markets while attempting to keep downdraft effects to a minimum. With a concentrated portfolio, this can be accomplished by focusing on diversification and making sure there is a balance between stable value names and higher risk/reward names. Diversification does not ensure a profit or protect against loss in a declining market.

Morningstar Style Box

Blend
Small
Source: Morningstar

Portfolio Management

Kenneth G. Gau

  • Ivy Investment Management Company
  • 2 Years with Fund
  • 22 Years in Industry
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Kenneth G. Gau is a vice president of Ivy Investment Management Company and Waddell & Reed Investment Management Company. Mr. Gau joined the firm in June 2000 as an investment analyst. He was appointed assistant vice president in February 2006 and joined the small-cap growth team as assistant portfolio manager in March 2006. Mr. Gau was appointed vice president in January 2009. He was named assistant portfolio manager of small-cap growth institutional accounts in February 2011. In August 2014, Mr. Gau was appointed portfolio manager of the Ivy Small Cap Value Fund and Ivy VIP Small Cap Value. (The Fund was renamed Ivy Small Cap Core Fund effective March 3, 2017 and Ivy VIP Small Cap Core effective April 28, 2017.) He graduated from The Pennsylvania State University Smeal College of Business Administration in May 1994 with a BS in finance. He earned an MBA from Cornell University Johnson Graduate School of Management in May 2000. While in business school, Mr. Gau participated in Chase Manhattan Bank's summer associate program. Prior to returning for a graduate degree, he worked at Bankers Trust for approximately three and a half years.

Growth of a $10,000 Investment
through 3/31/2017

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

Quarterly Fund Commentary

Daily Prices as of 4/21/2017

Net Asset Value (NAV) $18.25
Daily NAV Change ($) ($-0.04) -0.22%
Weekly NAV Change ($) $0.39 2.18%
Public Offering Price (POP) $18.25

Fund Facts

Ticker Symbol IYSYX
CUSIP 465898393
Fund Code 792
Fund Type Domestic Equity
Fund Inception 1/31/1997
Class Inception 12/8/2003
Fiscal Year End March
Dividends Paid March, June, September, December
Fund Assets (as of 3/31/2017) $526.9 mil
Total Equity Holdings (as of 3/31/2017) 59
Total Holdings (as of 3/31/2017) 62
Portfolio Turnover Rate (as of 9/30/2016) 88%
Lipper Category Small-Cap Core Funds
Morningstar Category Small Blend
Benchmark Russell 2000 Value TR USD
Benchmark Russell 2000 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.

Class Y shares are not subject to sales charges.

Monthly Rates of Return

Average Annual Total Returns as of 3/31/2017
(Returns for periods of less than 1-yr are not annualized)
 
Russell 2000 Value TR USD -0.13% 29.37% 7.62% 12.54% 6.09% 8.65%
Lipper Small-Cap Core Funds 1.87% 21.99% 6.22% 11.35% 6.75% 8.59%
Russell 2000 TR USD 2.47% 26.22% 7.22% 12.35% 7.12% 8.79%
Fund at NAV 3.12% 28.74% 9.05% 13.53% 7.66% 9.01%

Quarterly Rates of Return

Average Annual Total Returns as of 3/31/2017
(Returns for periods of less than 1-yr are not annualized)
 
Russell 2000 Value TR USD -0.13% 29.37% 7.62% 12.54% 6.09% 8.65%
Lipper Small-Cap Core Funds 1.87% 21.99% 6.22% 11.35% 6.75% 8.59%
Russell 2000 TR USD 2.47% 26.22% 7.22% 12.35% 7.12% 8.79%
Fund at NAV 3.12% 28.74% 9.05% 13.53% 7.66% 9.01%

Calendar Year Return

  2012
Russell 2000 Value TR USD 18.05 34.52 4.22 -7.47 31.74
Class Y 18.40 33.08 7.05 -5.84 28.61

Morningstar Ratings as of 3/31/2017 Morningstar Logo

Category: Small Blend
Ratings are based on risk-adjusted returns
Overall out of 625
3 Year out of 625
5 Year out of 537
10 Year out of 377

Lipper Ranking through 3/31/2017 Lipper Logo

Category: Small-Cap Core Funds
 
Rankings are based on average annual total returns, but do not consider sales charges.
1 Year 66/892 8
3 Year 86/751 12
5 Year 84/650 13
10 Year 129/464 28

Expense Ratios as of 7/31/2016

Net 1.37%
Gross 1.37%

5-Year Standard Deviation as of 3/31/2017

Russell 2000 Value TR USD 14.36
Russell 2000 TR USD N/A

5-Year MPT* Statistics as of 3/31/2017

*Modern Portfolio Theory
Alpha 3.06
Beta 0.82
R-Squared 89.18
Sharpe Ratio 1.08
Capture Ratio Upside: 90.52%
Downside: 76.58%

Distributions

Historical Prices Inception 12/8/2003

4/3/2017 $18.37 NO NO
4/4/2017 $18.33 NO NO
4/5/2017 $18.09 NO NO
4/6/2017 $18.26 NO NO
4/7/2017 $18.23 NO NO
4/10/2017 $18.27 NO NO
4/11/2017 $18.32 NO NO
4/12/2017 $18.08 NO NO
4/13/2017 $17.86 NO NO
4/17/2017 $18.09 NO NO
4/18/2017 $18.02 NO NO
4/19/2017 $18.11 NO NO
4/20/2017 $18.29 NO NO
4/21/2017 $18.25 NO NO

Historical Distributions Inception 12/8/2003

12/8/2016 $0 Long: $0.345 Short: $0.486 $18.31 12/8/2016
12/10/2015 $0 Long: $2.154 Short: $0.000 $14.73 12/10/2015
12/11/2014 $0 Long: $1.596 Short: $0.246 $17.17 12/11/2014
12/12/2013 $0.077 Long: $1.708 Short: $0.601 $17.46 12/12/2013
12/13/2012 $0 Long: $0.424 Short: $0.172 $15.26 12/13/2012

*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 3/31/2017

Laredo Petroleum Holdings, Inc. Laredo Petroleum, Inc. operates as an independent energy company in the U.S. It focuses on the acquisition, exploration, and development of oil and natural gas properties, as well as the transportation of oil and natural gas primarily in the Permian Basin in West Texas. 5.04%
Take-Two Interactive Software, Inc. Take-Two Interactive Software, Inc. is an American multinational publisher, developer, and distributor of video games and video game peripherals. 4.69%
Pinnacle Foods, Inc. Pinnacle Foods Inc., through its subsidiaries, manufactures, markets, and distributes branded convenience food products in North America. 4.51%
Healthways, Inc. Healthways, Inc. (Tivity Health, Inc.) is a provider of fitness and health improvement programs with a focus on developing and managing network solutions. 4.13%
AMC Entertainment Holdings, Inc., Class A AMC Entertainment Holdings, Inc., through its subsidiaries, operates as a theatrical exhibition company in the United States and internationally. 4.10%
Webster Financial Corp. Webster Financial Corp. operates as the bank and financial holding company for Webster Bank, National Association that provides financial services to individuals, families, and businesses in the U.S. 3.91%
Communications Sales & Leasing, Inc. Communications Sales & Leasing, an internally managed real estate investment trust (REIT), is engaged in the acquisition and construction of mission-critical communications infrastructure, and is a provider of wireless infrastructure solutions for the communications industry. 3.83%
Sensient Technologies Corp. Sensient Technologies Corporation supplies and manufactures a variety of ink-jet inks, cosmetic and pharmaceutical additives, and food and beverage flavors. 2.84%
Woodward, Inc. Woodward, Inc. designs, manufactures, and services energy control and optimization solutions for the aerospace, industrial, and energy markets worldwide. 2.50%
Western Alliance Bancorp. Western Alliance Bancorp is a multi-bank holding company. The company provides a full range of banking and related services to businesses and consumers in Nevada, Arizona, and California. 2.42%

Total Portfolio Holdings

Updated quarterly, upon availability.

Market Capitalization
as a % of equity assets as of 3/31/2017

Large 0.9%
Medium 61.9%
Small 37.2%
Median Market Cap (as of 3/31/2017) $2.8 bil

Top 10 Industry Allocation
as a % of Equity Holdings as of 3/31/2017

Regional Banks 17.8%
Specialty Chemicals 6.5%
Packaged Foods & Meats 5.8%
Oil & Gas Exploration & Production 5.2%
Home Entertainment Software 4.8%
Specialized REITs 4.4%
Health Care Services 4.3%
Movies & Entertainment 4.2%
Industrial Machinery 4.1%
Trucking 4.0%

Sector Allocation
as a % of equity assets as of 3/31/2017

Financials 21.04%
Industrials 16.39%
Information Technology 13.31%
Consumer Discretionary 11.52%
Health Care 8.66%
Materials 7.55%
Consumer Staples 6.87%
Real Estate 5.62%
Energy 5.20%
Telecommunication Services 2.07%
Utilities 1.77%

Portfolio Composition
as a % of net assets as of 3/31/2017

Domestic Common Stock 96.91%
Cash and Cash Equivalents 3.09%

Equity Country Allocation
as a % of equity assets as of 3/31/2017

United States 100.0%

Total Portfolio Holdings

Updated quarterly, upon availability.

Risk factors: The value of the Fund’s shares will change, and you could lose money on your investment. Investing in small-cap growth and value stocks may carry more risk than investing in stocks of larger, more well-established companies. Growth stocks may be more volatile or not perform as well as value stocks or the stock market in general. Value stocks are stocks of companies that may have experienced adverse developments or may be subject to special risks that have caused the stocks to be out of favor and, in the opinion of the Fund’s manager, undervalued. Such security may never reach what the manager believes to be its full value, or such security’s value may decrease. The Fund typically holds a limited number of stocks (generally 40 to 60). As a result, the appreciation or depreciation of any one security held by the Fund may have a greater impact on the Fund’s net asset value than it would if the Fund invested in a larger number of securities. 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.

Stylebox: The Morningstar Equity Style Box reveals a fund's investment strategy by displaying the fund's investment style and the market capitalization of the stocks owned.

Index Description: Russell 2000 Value 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.

The Russell 2000 Index is an index measuring the performance approximately 2,000 small-cap companies in the Russell 3000 Index, which is made up of 3,000 of the biggest U.S. stocks. It is not possible to invest directly in an index.

The Advantus Venture Fund merged into the Ivy Small Cap Value Fund on Dec. 8, 2003 (since renamed Ivy Small Cap Core Fund on March 3, 2017). The performance shown for periods prior to this date is that of the Advantus Venture Fund Class A shares, restated to reflect current sales charges applicable to Ivy Small Cap Core Fund Class A shares. Performance has not been restated to reflect the fees and expenses applicable to the Ivy Small Cap Core Fund. If these expenses were reflected, performance shown would differ. Fund performance after March 3, 2017, may significantly differ from prior performance due to changes made to the Fund's investment strategies.

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.

Prior to March 3, 2017, the Ivy Small Cap Core Fund was known as the Ivy Small Cap Value Fund and its benchmark was the Russell 2000 Value Index. The Fund’s benchmark is now the Russell 2000 Index. These changes were made to more closely align with the Fund’s investment objectives.

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.

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 RatingTM 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. 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.

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

Please remember that an investment in a mutual fund involves risk. Investment return and principal value of a mutual fund investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.

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

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