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Ivy VIP Limited-Term Bond

  • $4.89 NAV as of 12/2/2016
  • ($0.01) / 0.14% Daily NAV Change
  • 1.92% YTD (NAV)

Summary

Managing interest rate risk with income potential

Duration
Duration measures the sensitivity of a fixed income investment to interest rate changes. Fund invests in short-term bonds, which have low duration and less rate sensitivity and longer-duration securities.
Discipline
Invests primarily in high quality securities.
Diversification
Bond funds can offer income and diversification to an all-equity portfolio.

Morningstar Style Box

LTD
Low
Source: Morningstar

Portfolio Management

Susan K. Regan

  • Waddell & Reed Investment Management Company
  • 2 Years with Fund
  • 29 Years in Industry
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Susan K. Regan is a Vice President and portfolio manager of Ivy Funds VIP Limited Term Bond. Ms. Regan earned a BA in economics in May 1984 and an MA in economics in December 1985 from the University of Missouri-Columbia. Ms. Regan joined the firm in 2007 as a fixed income investment analyst and trader. She was appointed assistant vice president and assistant portfolio manager in 2010; and vice president and portfolio manager in 2014. Previously, she was employed by Commerce Bank from 1988 to 2007, where she gained experience trading governments, agency and mortgage-backed securities. From 1987 through 1988 she was associated with the Missouri State Treasurer’s Office and from 1986 to 1987 the Missouri Department of Revenue.

Growth of a $10,000 Investment
through 11/30/2016

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 12/2/2016

Net Asset Value (NAV) $4.89
Daily NAV Change ($) ($0.01) 0.14%
Weekly NAV Change ($) $0.01 0.11%
Public Offering Price (POP) $4.89

Fund Facts

Ticker Symbol
CUSIP 46600H687
Fund Code 871
Fund Type Fixed Income Funds
Fund Inception 8/23/2010
Class Inception 8/23/2010
Fiscal Year End December
Dividends Paid May
Fund Assets (as of 10/31/2016) $396.1 mil
Total Equity Holdings
Total Holdings (as of 10/31/2016) 206
Portfolio Turnover Rate
Lipper Category VA Short-Intmdt Investment Grade Debt Funds
Morningstar Category Short-Term Bond
Benchmark Bloomberg Barclays Govt/Credit 1-5 Yr 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. Class A shares, including sales charges, reflects the maximum applicable front-end sales load.

Monthly Rates of Return

Average Annual Total Returns as of 11/30/2016
(Returns for periods of less than 1-yr are not annualized)
  YTD 1YR 3YR 5YR 10YR LIFE
Fund at NAV 1.88% 1.57% 1.07% 1.43% 1.40%

Quarterly Rates of Return

Average Annual Total Returns as of 9/30/2016
(Returns for periods of less than 1-yr are not annualized)
  YTD 1YR 3YR 5YR 10YR LIFE
Bloomberg Barclays Govt/Credit 1-5 Yr TR USD 2.64% 2.06% 1.73% 1.60% 3.26% 1.74%
Fund at NAV 3.16% 2.78% 1.71% 1.73% 1.65%
Lipper VA Short-Intmdt Investment Grade Debt Funds 3.42% 2.86% 2.05% 1.74% 2.47% 1.65%

Calendar Year Return

  2011 2012 2013 2014 2015
Bloomberg Barclays Govt/Credit 1-5 Yr TR USD 3.14 2.24 0.28 1.42 0.97
Class A 3.17 3.37 -0.54 0.97 0.87

Morningstar Ratings as of 10/31/2016 Morningstar Logo

Category: Short-Term Bond
Ratings are based on risk-adjusted returns
Overall out of 496
3 Year out of 496
5 Year out of 415
10 Year out of —

Lipper Ranking through 10/31/2016 Lipper Logo

Category: VA Short-Intmdt Investment Grade Debt Funds
  Rank Percentile
Rankings are based on average annual total returns, but do not consider sales charges.
1 Year 17/36 46
3 Year 16/34 46
5 Year 20/32 61
10 Year

Expense Ratios as of 4/30/2016

Net 0.80%
Gross 0.80%

3-Year Standard Deviation as of 9/30/2016

Bloomberg Barclays Govt/Credit 1-5 Yr TR USD 1.17

3-Year MPT* Statistics as of 9/30/2016

*Modern Portfolio Theory
Alpha -0.10
Beta 1.05
R-Squared 83.44
Sharpe Ratio 1.13
Capture Ratio Upside: 102.72%
Downside: 108.99%

Distributions

Historical Prices Inception 8/23/2010

Date Price Dividend Reinvest Date Capital Gain Reinvest Date
12/1/2016 $4.88 NO NO
12/2/2016 $4.89 NO NO

Historical Distributions Inception 8/23/2010

Ex-date Income Capital Gains Reinvest Gains Payment Date
5/18/2016 $0.074 Long: $0.000 Short: $0.000 $4.88 5/18/2016
5/20/2015 $0.0748 Long: $0.000 Short: $0.000 $4.88 5/20/2015
5/21/2014 $0.0279 Long: $0.007 Short: $0.000 $4.91 5/21/2014
5/22/2013 $0 Long: $0.005 Short: $0.000 $4.94 5/22/2013
12/18/2012 $0.1526 Long: $0.129 Short: $0.000 $4.91 12/18/2012
5/16/2012 $0.0018 Long: $0.000 Short: $0.000 $5.11 5/16/2012

*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.

12-Month Trailing Dist. Yield as of 10/31/2016

NAV 1.50%
With Sales Charge 1.50%

Annualized 30-Day SEC Yield as of 10/31/2016

Subsidized - NAV 1.28%
Unsubsidized - NAV 1.28%

Portfolio

Top 10 Holdings as a % of net assets 10/31/2016

U.S. Treasury Notes, 2.8%, 2/28/2018 2.33%
U.S. Treasury Notes, 0.6%, 9/30/2017 1.89%
U.S. Treasury Notes, 0.8%, 10/31/2017 1.27%
Federal Home Loan Mortgage Corp. Fixed Rate Pass-Through Certificates, 3.5%, 10/1/2028 1.09%
Federal Home Loan Mortgage Corp. Agency REMIC/CMO, 4.0%, 6/15/2026 1.08%
Republic Services, Inc., 3.8%, 5/15/2018 1.05%
Dollar General Corp., 4.1%, 7/15/2017 1.03%
Toyota Motor Credit Corp., 2.0%, 10/24/2018 1.02%
Mizuho Financial Group, Inc., 2.3%, 9/13/2021 1.00%
U.S. Treasury Notes, 2.0%, 8/15/2025 0.99%

Total Portfolio Holdings

Updated quarterly, upon availability.

Maturity
as a % of fixed income assets as of 9/30/2016

<1 Year 13.7%
1-5 Years 66.8%
5-10 Years 16.0%
10-20 Years 3.5%
>20 Years 0.0%
Average Maturity 3.02 years
Effective Duration 2.77 years

Fixed Income Country Allocation
as a % of bond holdings as of 10/31/2016

United States 94.5%
Japan 1.8%
United Kingdom 1.2%
Norway 0.8%
Netherlands 0.7%
Canada 0.5%
France 0.5%

Quality
as a % of fixed income assets as of 10/31/2016

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.
Government Bonds 31.70%
NonRated 1.90%
AAA 0.80%
AA 10.10%
A 24.90%
BBB 28.80%
BB 1.10%
B 0.30%
CCC 0.40%

Portfolio Composition
as a % of net assets as of 10/31/2016

Corporate Bonds 61.72%
Government Bonds 30.12%
Cash and Cash Equivalents 5.15%
Asset-Backed Securities 0.99%
General Obligation Bonds 0.98%
Revenue Bonds 0.65%
Mortgage-Backed Securities 0.39%

Total Portfolio Holdings

Updated quarterly, upon availability.

Risk Factors: The value of the Portfolio's shares will change, and you could lose money on your investment. An investment in the Portfolio is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fixed income securities are subject to interest rate risk and, as such, the net asset value of the Portfolio may fall as interest rates rise. These and other risks are more fully described in the Portfolio's prospectus. Not all portfolios may be offered at all broker/ dealers. The IVY VARIABLE INSURANCE PORTFOLIOSSM, are only available as investment options in variable life insurance policies and variable annuity contracts issued by participating insurance companies. They are not offered or made available directly to the general public.

Stylebox: The Morningstar Fixed Income Style Box reveals a fund’s investment style. 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 a Nationally Recognized Statistical Rating Organization (NRSRO). 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. Credit quality breakdowns are shown for corporate-bond holdings and depict the quality of bonds in the underlying portfolio. The report shows the percentage of fixed-income securities that fall within each credit quality rating as assigned by an NRSRO. Bonds not rated by an NRSRO are included in the not rated (NR) category. 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 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 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.

Index Description: The Barclays Govt/Credit 1-5 Yr TR USD - The Barclays 1-5 Year U.S. Government/Credit Index includes all medium and larger issues of U.S. government, investment-grade corporate, and investment-grade international dollar-denominated bonds that have maturities of between 1 and 5 years and are publicly issued. It is not possible to invest directly in an index.

Annuities are long-term financial products designed for retirement purposes. Annuity and life insurance guarantees are based on the financial strength and claims-paying ability of the issuing insurance company. The guarantees have no bearing on the performance of a variable investment option. Variable investment options are subject to market risk, including loss of principal. There are charges and expenses associated with annuities and variable life insurance products, including mortality and expense risk charges, management fees, administrative fees, expenses for optional riders and deferred sales charges for early withdrawals. Withdrawals before age 59 1/2 may be subject to a 10% IRS tax penalty and surrender charges may apply.

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.

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.

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.

MPT Statistics: Alpha is a measure of a portfolio’s actual returns and expected performance, given its level of risk (as measured by beta). Beta reflects the sensitivity of the portfolio’s return to fluctuations in the market index. R-squared indicates how much of a portfolio’s fluctuations are attributable to movements in the portfolio’s benchmark. Standard deviation is a measure of how volatile a portfolio’s returns are. Sharpe ratio is a measure of a portfolio’s risk-adjusted performance.

Morningstar Ratings: For each fund with at least a 3-year history, Morningstar calculates a risk-adjusted return measure that accounts for variation in a fund's monthly performance (including the effects of all sales charges), placing emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each 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. (Each share class is counted as a fraction of one fund and rated separately.) A fund's overall rating is derived from a weighted average of the 3-, 5- and 10-year (if applicable) rating metrics. Morningstar Rating is for the share classes specified; other classes may have different performance characteristics.

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.

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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