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Ivy VIP Pathfinder Mod Con - Managed Volatility

  • $5.46 NAV as of 6/22/2018
  • ($0.01) / 0.12% Daily NAV Change
  • 2.15% YTD (NAV)

Summary

Overview

To achieve its objective, Ivy VIP Pathfinder Moderately Conservative – Managed Volatility allocates its assets primarily among the underlying funds shown on this Fund Detail page so that approximately 30-45% of their value is in U.S. stocks, approximately 5-20% is in international/global stocks, approximately 0-50% is in bonds and approximately 15-55% in short-term investments. In addition, the Portfolio applies a customized strategy that seeks to manage the volatility of equity returns using securities such as exchange-traded futures and options contracts.

Morningstar Style Box

Growth
Large
LTD
Medium
Source: Morningstar

Portfolio Management

Chace Brundige, CFA

  • Ivy Investment Management Company
  • 1 Year with Fund
  • 24 Years in Industry
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Chace Brundige is co-portfolio manager of Ivy Asset Strategy Fund, Ivy VIP Asset Strategy and institutional accounts. He was named co-portfolio manager of these investment products in 2014. He was named a portfolio manager of Ivy VIP Pathfinder Portfolios and InvestEd Portfolios in 2016. Mr. Brundige became a member of the portfolio management team of Ivy Wilshire Global Allocation Fund, sub-advised by Wilshire Associates, Inc., in 2018. Mr. Brundige joined the organization in 2003 as vice president and assistant portfolio manager to the Large Cap Growth team after a previous tenure with the firm as an equity analyst from 1996 to 1999. He was portfolio manager of the firm’s Tax-Managed Equity Fund from 2006 to 2008 and the Global Growth funds from 2009 to 2014. He was appointed senior vice president in 2012. Mr. Brundige began his investment career at UMB Financial Corp. in 1991. He joined Waddell & Reed as an equity investment analyst in 1996. He joined TCW/WestBridge Ventures LLC in San Francisco as a vice president and limited partner in 1999. He was an original member of Trust Company of the West’s venture capital arm. In 2001 he was a vice president and sector head for Citadel Investment Group. Mr. Brundige graduated from Kansas State University in 1991 with a BS in Finance. He earned an MBA with an emphasis in Finance and Accounting from the University of Chicago Graduate School of Business in 1996. Mr. Brundige is a CFA charterholder.

Aaron D. Young

  • Ivy Investment Management Company
  • 1 Year with Fund
  • 12 Years in Industry
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Aaron Young has been co-portfolio manager of Ivy Managed International Opportunities Fund, Ivy VIP Pathfinder Portfolios and InvestEd Portfolios since 2016. Mr. Young is also a member of the firm’s Investment Risk Management group. Named to the team in 2017, his extensive quantitative research capabilities add depth to the firm’s risk management and portfolio analytics resources. Mr. Young joined the organization in 2005 as a fixed income investment analyst with an emphasis in credit research and derivative securities. He joined the Asset Strategy team as an investment analyst in 2007 and was named assistant portfolio manager of Ivy and Ivy VIP Asset Strategy Funds in 2012. He covered brokers, asset managers and exchanges as an equity investment analyst during 2008. He was appointed assistant vice president in 2012 and vice president in 2014. Mr. Young graduated with honors in 2000 with a BA in Philosophy from the University of Missouri. He earned an MBA with a concentration in Finance and Strategy from the Olin School of Business, Washington University in St. Louis in 2005.

W. Jeffery Surles, CFA

  • Ivy Investment Management Company
  • <1 Year with Fund
  • 17 Years in Industry
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Jeffery Surles is portfolio manager of Ivy Global Income Allocation Fund, managing the fund since 2012, and served as co-portfolio manager from 2012 to 2014. He was named co-portfolio manager of the Ivy Asset Strategy Fund, Ivy VIP Asset Strategy, Ivy VIP Pathfinder Portfolios and InvestEd Portfolios in 2018. Mr. Surles became a member of the portfolio management team of Waddell & Reed Advisors Wilshire Global Allocation Fund, sub-advised by Wilshire Associates, Inc., in 2018. Mr. Surles joined the organization in 2007 as a fixed income investment analyst. He was appointed assistant vice president in 2012 and vice president in 2014. He was appointed senior vice president in 2018. Prior to joining the firm, Mr. Surles was a portfolio manager from 2003 to 2005, and an investment analyst from 2001 to 2003, for Surles Development Corp. In the fall of 2000 he was a sales analyst for Enterprise Development Services, Inc. Mr. Surles graduated from Vanderbilt University in 2000 with a BS in Organizational Development. He earned an MBA with an emphasis in Finance from the University of Wisconsin in 2007. While attending the University of Wisconsin he was actively involved in the Applied Security Analysis Program and completed an internship at Provident Trust Company in 2006. Mr. Surles is a CFA charterholder.

Craig M Stapleton, CFA , FRM

  • Securian Asset Management, Inc. (Sub-Adviser)
  • 4 Years with Fund
  • 16 Years in Industry
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As Vice President and Portfolio Manager, Craig Stapleton is responsible for derivatives, agency MBS, government and municipal bonds, quantitative analytics, cash management, ALM and strategic asset allocation for the Minnesota Life General Account. He is head of the Quantitative Analysis and Research group. He is also the co-portfolio manager for the Securian Managed Volatility strategies and the Securian Strategic Dividend Income portfolios. Prior to his role as portfolio manager, he provided quantitative analysis, security and portfolio risk statistics, and derivatives hedging capabilities for Securian and its clients. Mr. Stapleton received a BS in Computer Engineering from the University of Illinois and earned an MBA in Finance from the University of Illinois. Mr. Stapleton is a CFA charterholder, and a member of the CFA Institute and CFA Society of Minnesota. He holds the Financial Risk Manager (FRM) designation. He was appointed to the Securian Risk Council and Home Office Council in 2015.

Merlin Erickson

  • Securian Asset Management, Inc. (Sub-Adviser)
  • <1 Year with Fund
  • 25 Years in Industry
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Merlin Erickson oversees the Quantitative Research group and is responsible for quantitative analytics, portfolio risk statistics, performance measurement metrics and provides support to portfolio management teams. He leads derivative and hedging implementation initiatives within Securian. He is also the co-portfolio manager for the Securian Managed Volatility strategies, where he monitors domestic and international equity volatility and correlation, manages fund equity exposure, and evaluates equity allocation model performance. Prior to joining Securian, he was vice president at Sucia Re Management. Mr. Erickson has 25 years in the investment management industry, with over 10 years at Securian. Mr. Erickson received a BS in Mathematics from Central Washington University. He earned his MBA in Finance from Seattle University.

Jeremy Gogos, CFA

  • Securian Asset Management, Inc. (Sub-Adviser)
  • <1 Year with Fund
  • 5 Years in Industry
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Jeremy Gogos is a portfolio manager for the Securian Managed Volatility strategies, where he monitors domestic and international equity volatility and correlation, manages fund equity exposure, and evaluates equity allocation model performance. He provides quantitative analysis, security and portfolio risk statistics, and execution of derivative and hedging initiatives for Securian. Mr. Gogos has also supported annuity, life insurance, and investment product designs with stochastic and historical simulation and performance evaluation. He had previously been a computer programmer supporting Securian Retirement’s 401(k) recordkeeping and trading platforms. Mr. Gogos received a BS, Physics from Worcester Polytechnic Institute. He earned a Doctor of Philosophy, Physics from the University of Minnesota. Mr. Gogos is a CFA charterholder and a member of the CFA Institute and CFA Society of Minnesota.

Growth of a $10,000 Investment
through 5/31/2018

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.

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Daily Prices as of 6/22/2018

Net Asset Value (NAV) $5.46
Daily NAV Change ($) ($0.01) 0.12%
Weekly NAV Change ($) $-0.03 -0.53%
Public Offering Price (POP) $5.46

Fund Facts

CUSIP 46600H653
Fund Code 844
Fund Type Specialty Funds
Fund Inception 8/1/2013
Class Inception 8/1/2013
Fiscal Year End December
Dividends Paid May
Fund Assets (as of 5/31/2018) $74.6 mil
Portfolio Turnover Rate (as of 12/31/2017) 26%
Lipper Category VUF Mixed-Asset Target Alloc Moderate Funds
Morningstar Category Allocation--50% to 70% Equity
Benchmark 40% Russell 3000 Index + 30% Bloomberg Barclays U.S. Universal Bond Index + 15% Bloomberg Barclays 1-5 Year U.S. Government/Credit Index + 15% MSCI EAFE Index
Benchmark Russell 3000 TR USD
Benchmark BBgBarc US Universal TR USD
Benchmark MSCI EAFE NR USD
Benchmark BBgBarc US Govt/Credit 1-5 Yr TR USD
Benchmark Bloomberg Barclays US Agg Bond TR USD
Benchmark Bloomberg Barclays US Treasury Bill 1-3 Mon TR USD
Benchmark S&P 500 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.

Monthly Rates of Return

Average Annual Total Returns as of 5/31/2018
(Returns for periods of less than 1-yr are not annualized)
 
MSCI EAFE NR USD -1.55% 7.97% 4.33% 5.93% 2.10%
BBgBarc US Universal TR USD -1.53% -0.22% 1.79% 2.29% 4.05%
Bloomberg Barclays US Agg Bond TR USD -1.50% -0.37% 1.39% 1.98% 3.72%
BBgBarc US Govt/Credit 1-5 Yr TR USD -0.30% -0.28% 0.79% 1.03% 2.26%
Lipper VUF Mixed-Asset Target Alloc Moderate Funds -0.04% 6.62% 4.74% 6.17% 5.48%
40% Russell 3000 Index + 30% Bloomberg Barclays U.S. Universal Bond Index + 15% Bloomberg Barclays 1-5 Year U.S. Government/Credit Index + 15% MSCI EAFE Index 0.35% 7.01% 5.68%
Bloomberg Barclays US Treasury Bill 1-3 Mon TR USD 0.62% 1.21% 0.57% 0.35% 0.31%
Fund at NAV 1.56% 7.51% 3.62% 4.78%
S&P 500 TR USD 2.02% 14.38% 10.98% 12.98% 9.14%
Russell 3000 TR USD 2.55% 15.06% 10.72% 12.85% 9.21%

Quarterly Rates of Return

Average Annual Total Returns as of 3/31/2018
(Returns for periods of less than 1-yr are not annualized)
 
40% Russell 3000 Index + 30% Bloomberg Barclays U.S. Universal Bond Index + 15% Bloomberg Barclays 1-5 Year U.S. Government/Credit Index + 15% MSCI EAFE Index
MSCI EAFE NR USD -1.53% 14.80% 5.55% 6.50% 2.74%
Bloomberg Barclays US Agg Bond TR USD -1.46% 1.20% 1.20% 1.82% 3.63%
BBgBarc US Universal TR USD -1.41% 1.52% 1.73% 2.19% 4.01%
Lipper VUF Mixed-Asset Target Alloc Moderate Funds -0.97% 8.04% 4.78% 6.35% 5.84%
S&P 500 TR USD -0.76% 13.99% 10.78% 13.31% 9.49%
Russell 3000 TR USD -0.64% 13.81% 10.22% 13.03% 9.62%
BBgBarc US Govt/Credit 1-5 Yr TR USD -0.50% 0.19% 0.77% 0.95% 2.11%
Fund at NAV 0.11% 7.99% 3.41% 4.63%
Bloomberg Barclays US Treasury Bill 1-3 Mon TR USD 0.33% 1.05% 0.48% 0.30% 0.30%

Calendar Year Return

  2013
Bloomberg Barclays US Agg Bond TR USD -2.02 5.97 0.55 2.65 3.54
BBgBarc US Universal TR USD -1.35 5.56 0.43 3.91 4.09
Bloomberg Barclays US Treasury Bill 1-3 Mon TR USD 0.05 0.02 0.03 0.26 0.82
BBgBarc US Govt/Credit 1-5 Yr TR USD 0.28 1.42 0.97 1.56 1.27
Class II 3.06 -0.52 1.21 11.84
MSCI EAFE NR USD 22.78 -4.90 -0.81 1.00 25.03
S&P 500 TR USD 32.39 13.69 1.38 11.96 21.83
Russell 3000 TR USD 33.55 12.56 0.48 12.74 21.13

Morningstar Ratings as of 5/31/2018 Morningstar Logo

Category: Allocation--50% to 70% Equity
Ratings are based on risk-adjusted returns
Overall out of 671
3 Year out of 671
5 Year out of —
10 Year out of —

Lipper Ranking through 5/31/2018 Lipper Logo

Category: VUF Mixed-Asset Target Alloc Moderate Funds
 
Rankings are based on average annual total returns, but do not consider sales charges.
1 Year 72/265 28
3 Year 209/246 85
5 Year
10 Year

Expense Ratios as of 4/30/2018

Net 1.12%
Gross 1.12%

3-Year Standard Deviation as of

MSCI EAFE NR USD 11.74
BBgBarc US Universal TR USD 2.74
S&P 500 TR USD 9.87
Bloomberg Barclays US Treasury Bill 1-3 Mon TR USD 0.14
BBgBarc US Govt/Credit 1-5 Yr TR USD 1.28
Bloomberg Barclays US Agg Bond TR USD 2.81
Russell 3000 TR USD 10.01
40% Russell 3000 Index + 30% Bloomberg Barclays U.S. Universal Bond Index + 15% Bloomberg Barclays 1-5 Year U.S. Government/Credit Index + 15% MSCI EAFE Index N/A

Distributions

Historical Prices Inception 8/1/2013

6/1/2018 $5.45 NO NO
6/4/2018 $5.47 NO NO
6/5/2018 $5.47 NO NO
6/6/2018 $5.49 NO NO
6/7/2018 $5.48 NO NO
6/8/2018 $5.49 NO NO
6/11/2018 $5.49 NO NO
6/12/2018 $5.49 NO NO
6/13/2018 $5.49 NO NO
6/14/2018 $5.49 NO NO
6/15/2018 $5.49 NO NO
6/18/2018 $5.48 NO NO
6/19/2018 $5.46 NO NO
6/20/2018 $5.47 NO NO
6/21/2018 $5.45 NO NO
6/22/2018 $5.46 NO NO

Historical Distributions Inception 8/1/2013

5/18/2017 $0.0229 Long: $0.113 Short: $0.000 $5.2 5/18/2017
5/19/2016 $0.0286 Long: $0.163 Short: $0.001 $4.91 5/19/2016
5/21/2015 $0 Long: $0.003 Short: $0.011 $5.43 5/21/2015
12/16/2014 $0.0339 Long: $0.137 Short: $0.016 $5.18 12/16/2014
5/22/2014 $0 Long: $0.000 Short: $0.011 $5.33 5/22/2014
12/17/2013 $0 Long: $0.000 Short: $0.003 $5.22 12/17/2013

*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 5/31/2018

NAV 0.91%
With Sales Charge 0.91%

Portfolio

Total Portfolio Holdings

Updated quarterly, upon availability.

Top 10 Industry Allocation
as a % of Equity Holdings as of 5/31/2018

Data Processing & Outsourced Services 4.5%
Pharmaceuticals 4.3%
Application Software 4.2%
Internet Software & Services 4.2%
Systems Software 3.6%
Integrated Oil & Gas 3.4%
Aerospace & Defense 3.2%
Semiconductors 3.1%
Diversified Banks 3.1%
Health Care Equipment 2.9%

Fixed Income Country Allocation
as a % of bond holdings as of 5/31/2018

United States 91.0%
Canada 2.2%
Japan 1.1%
United Kingdom 1.1%
Netherlands 1.0%
Ireland 0.8%
Australia 0.6%
Spain 0.4%
China 0.4%
Norway 0.3%
Sweden 0.2%
Luxembourg 0.2%
Bermuda 0.2%
Switzerland 0.1%
Guernsey 0.1%
France 0.1%
Mexico 0.1%
Hong Kong 0.0%
Cayman Islands 0.0%
Macau 0.0%
Austria 0.0%

Underlying Fund Composition
as a % of net assets as of 5/31/2018

Ivy VIP Limited-Term Bond 18.6 %
Ivy VIP Government Money Market 14.7 %
Ivy VIP Corporate Bond 11.5 %
Ivy VIP Growth 11.1 %
Ivy VIP International Core Equity 8.5 %
Ivy VIP Global Equity Income 7.6 %
Ivy VIP Value 6.9 %
Ivy VIP Mid Cap Growth 4.7 %
Ivy VIP Core Equity 4.3 %
Ivy VIP Global Growth 2.9 %
Ivy VIP Small Cap Growth 2.6 %
Ivy VIP Small Cap Core 2.2 %
Ivy VIP High Income 1.8 %

Portfolio Allocation Ranges
(as of the most recent prospectus)

  Low High
Ivy VIP Government Money Market Fund 0.0 % 55.0 %
Ivy VIP Limited-Term Bond Fund 0.0 % 55.0 %
Ivy VIP Corporate Bond Fund 0.0 % 50.0 %
Ivy VIP International Core Equity Fund 0.0 % 20.0 %
Ivy VIP Global Equity Income Fund 0.0 % 20.0 %
Ivy VIP Global Growth Fund 0.0 % 20.0 %
Ivy VIP Global Bond Fund 0.0 % 20.0 %
Ivy VIP Value Fund 0.0 % 15.0 %
Ivy VIP Core Equity Fund 0.0 % 15.0 %
Ivy VIP Growth Fund 0.0 % 15.0 %
Ivy VIP Small Cap Core Fund 0.0 % 10.0 %
Ivy VIP Mid Cap Growth Fund 0.0 % 10.0 %
Ivy VIP Small Cap Growth Fund 0.0 % 10.0 %
Ivy VIP High Income Fund 0.0 % 5.0 %

Sector Allocation
as a % of equity assets as of 5/31/2018

Information Technology 25.13%
Financials 15.44%
Consumer Discretionary 13.42%
Industrials 12.69%
Health Care 11.59%
Energy 7.24%
Consumer Staples 6.35%
Materials 4.25%
Telecommunication Services 2.13%
Utilities 0.89%
Real Estate 0.87%

Quality
as a % of fixed income assets as of 5/31/2018

Quality: Our preference is to always use ratings obtained from Standard & Poor's, Moody’s, and Fitch. It is each Portfolio’s general policy to classify such security at the lower rating level if only two ratings are available. If more than two ratings are available and a median exists, the median is used. If more than two ratings exist without a median, the lower of the two middle ratings is used. We do not evaluate these ratings, but simply assign them to the appropriate credit quality category as determined by the rating agency.
Government Bonds 26.50%
NonRated 0.30%
AAA 2.00%
AA 6.80%
A 18.80%
BBB 40.10%
BB 1.50%
B 2.60%
CCC 1.40%
Below CCC 0.00%

Portfolio Composition
as a % of net assets as of 5/31/2018

Domestic Common Stock 35.14%
Cash and Cash Equivalents 21.52%
Corporate Bonds 19.64%
Foreign Common Stock 13.97%
Government Bonds 7.77%
Asset-Backed Securities 0.43%
General Obligation Bonds 0.38%
Revenue Bonds 0.38%
Senior Loans 0.32%
Other Government Securities 0.18%
Mortgage-Backed Securities 0.17%
Preferred Stock 0.10%
Other Financial Instruments 0.00%

Equity Country Allocation
as a % of equity assets as of 5/31/2018

United States 70.8%
France 5.0%
United Kingdom 4.8%
Japan 3.3%
China 2.4%
Netherlands 2.1%
Canada 2.0%
Switzerland 2.0%
Germany 1.4%
Italy 1.1%
Ireland 0.7%
Hong Kong 0.7%
Australia 0.6%
Brazil 0.6%
Luxembourg 0.5%
Spain 0.4%
Norway 0.4%
Sweden 0.3%
South Korea 0.2%
India 0.2%
Taiwan 0.2%
Singapore 0.2%
Denmark 0.2%
Russia 0.2%
South Africa 0.2%
Jersey 0.1%

Total Portfolio Holdings

Updated quarterly, upon availability.

Documents

You could lose money by Investing in Ivy VIP Government Money Market. Although the Portfolio seeks to preserve the value of your Investment at $1.00 per share, it cannot guarantee it will do so. An investment In the Portfolio is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Portfolio's sponsor has no legal obligation to provide financial support to the Portfolio, and you should not expect that the sponsor will provide financial support to the Portfolio at any time.

Advantus Capital Management, the sub-adviser for the Managed Volatility strategy in the Ivy VIP Pathfinder Managed Volatility Portfolios, changed its name to Securian Asset Management, Inc., effective April 30, 2018.

Effective April 30, 2018, the Portfolio's benchmarks changed to the Russell 3000 Index, MSCI EAFE Index, Bloomberg Barclays U.S. Universal Bond Index and Bloomberg Barclays 1-5Year U.S. Government/Credit Index. Both the prior and current benchmark indexes will be shown for a period of one year for comparison purposes.

Index Description: MSCI EAFE is an unmanaged index comprised of securities that represent the securities markets in Europe, Australasia and the Far East. It is not possible to invest directly in an index.

Index Description: The Bloomberg Barclays U.S. Universal Index represents the union of the U.S. Aggregate Index, the U.S. High-Yield Corporate Index, the 144A Index, the Eurodollar Index, the Emerging Markets Index, and the non-ERISA portion of the CMBS Index. Municipal debt, private placements, and non-dollar-denominated issues are excluded from the Universal Index. The only constituent of the index that includes floating-rate debt is the Emerging Markets Index. Source: Bloomberg Barclays

Index Description: S&P 500 - An unmanaged index of common stocks. It is not possible to invest directly in an index.

Index Description: The Bloomberg Barclays U.S. Treasury Bills: 1-3 Month Index - Includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months and more than 1 month, are rated investment grade, and have $250 million or more of outstanding face value. In addition, the securities are denominated in U.S. dollars and are fixed rate and non-convertible. It is not possible to invest directly in an index.

Index Description: The Bloomberg Barclays U.S. 1-5 Year Government/Credit Bond Index is the 1-5 year component of the Bloomberg Barclays U.S. Government/Credit Index, which includes treasuries, agencies, publicly issued U.S. corporate and foreign debentures & secured notes. To be included in the index, securities must have at least one, and up to, but not including five years to maturity. Source: Bloomberg Barclays

Index Description: The Bloomberg Barclays U.S. Aggregate Bond TR USD Index - A market capitalization-weighted index, representing most U.S. traded investment grade bonds. It is not possible to invest directly in an index.

Index Description: The Russell 3000® Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. The Russell 3000® Index is constructed to provide a comprehensive, unbiased, and stable barometer of the broad market and is completely reconstituted annually to ensure new and growing equities are reflected. Source: FTSE Russell

Important Information About Fees And Expenses: Each Ivy VIP Pathfinder Managed Volatility Portfolio is a "fund of funds," meaning each will seek to achieve its particular level of risk/return objective by investing substantially all of its assets in the Ivy Funds Variable Insurance Portfolios, Inc. and short-term investments in varying combinations and percentage amounts to achieve each Portfolio’s particular investment objective. There is no guarantee that the volatility management strategy of the VIP Pathfinder Portfolios - Managed Volatility will achieve its goal of managing the volatility of equity returns. Because an investor is investing in funds indirectly through the Portfolios, the investor will pay a proportionate share of the applicable expenses of the underlying funds, as well as the expenses of the particular Portfolio. Please consult the Portfolio, variable life insurance or variable annuity prospectuses for additional information about fees, charges and expenses, and read them carefully before investing.

Each Portfolio's risk designation is relative only to the other Portfolios and does not represent comparisons to any other investment. Investment return and principal value will fluctuate, and it is possible to lose money by investing. The performance of each Portfolio is dependent on the performance of its underlying funds, and each Portfolio will assume the risks associated with its underlying funds.

Effective Dec. 1, 2017, Merlin Erickson and Jeremy Gogos, Ph.D., CFA, were added as portfolio managers on the Ivy VIP Pathfinder Managed Volatility Portfolios. David Kuplic no longer was a portfolio manager on the Portfolios as of that date.

W. Jeffery Surles, CFA, became a co-portfolio manager on the Portfolio on Feb. 5, 2018.

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.

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.

Quality: Our preference is to always use ratings obtained from Standard & Poor's, Moody’s, and Fitch. It is each Portfolio’s general policy to classify such security at the lower rating level if only two ratings are available. If more than two ratings are available and a median exists, the median is used. If more than two ratings exist without a median, the lower of the two middle ratings is used. 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.

The Portfolio is managed by Ivy Investment Management Company and subadvised by Advantus Capital Management, Inc.

Co-Portfolio Manager Cynthia Prince-Fox retired from the firm on April 30, 2018.

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