Broadening its mutual fund product line while adapting to the
evolving needs of investors, Ivy Investment Management Company
(IICO) has introduced five new index funds, the first passively
managed funds offered by the firm. Ivy, long recognized for its
inventive, actively managed strategies, partnered with ProShare
Advisors LLC to create the index funds.
Managed by IICO and sub-advised by ProShares, the advisor to the
ProShares ETF lineup, the funds became effective April 20, 2017.
They are offered by Ivy Distributors, Inc. and will be available
through an advisory platform offered by Waddell & Reed, Inc.,
as well as through unaffiliated distribution.
“Offering active and passive investment styles helps financial
advisors bring strategic flexibility to the planning process when
building client portfolios. These new products allow us to pair a
highly experienced index fund manager with our skilled in-house Ivy
investment management team, whose focus of course is on active
management,” said Thomas W. Butch, CEO of Ivy Distributors, Inc.
“ProShares has long been known as a leader within the ETF space and
we are pleased to partner with them.”
Three of the five funds share their strategies with existing
ProShares ETFs. While it has become common to see mutual funds
migrated to the ETF wrapper, it is far more unusual to see the
reverse—successful ETF strategies made available as mutual funds.
For investors in retirement plans or advisory platforms that
typically are limited to mutual funds, these Ivy ProShares Funds
offer access to innovative index strategies from one of the
industry’s premier providers of ETFs.
“With their strong reputation and substantial distribution
network, Ivy Investments is a natural partner to help us introduce
these innovative strategies to mutual fund investors for the first
time,” said Michael L. Sapir, co-founder and CEO of ProShare
Advisors LLC, the advisor to ProShares.
“We chose these five categories precisely because they
complement our active product lineup, and they are differentiated
styles, outside of what we believe are more commoditized passive
asset classes commonly available elsewhere,” Butch added. “For
example, the Ivy ProShares S&P 500 Bond Index Fund, tracking
bonds of its index’s companies, will be the first mutual fund with
this strategy to this point.”
Following is a snapshot of the lineup:
PRODUCT INVESTMENT FOCUS
BENCHMARK
Ivy ProShares S&P 500Dividend
Aristocrats Index Fund
Invests in S&P 500 companies with at least 25
years of consecutive dividend growth S&P 500®
Dividend Aristocrats® Index
Ivy ProShares Russell 2000Dividend Growers
Index Fund
Invests in small cap companies that have increased
dividend payments for at least 10 consecutive years
Russell 2000® Dividend Growth Index
Ivy ProShares MSCI ACWIIndex Fund
Seeking to track MSCI ACWI performance
MSCI All Country World Index
Ivy ProShares S&P 500 BondIndex
Fund
Designed to track index of corporate bonds issued by
S&P 500 companies S&P 500®/MarketAxess®
Investment Grade Corporate Bond Index
Ivy ProShares Interest RateHedged High
Yield Index Fund
Invests in a diversified portfolio of high
yield bonds with an interest-rate hedge using short Treasury
futures to minimize the effects of rising rates.
Citi High Yield (Treasury Rate-Hedged) Index
Index funds typically are a cost-effective way for investors to
track a benchmark index, meaning returns to index funds, over time,
generally should mirror returns of their tracking index, minus any
fund expenses. The divergence between the net returns of an index
fund and its tracking index is referred to as “tracking error.”
IICO and ProShares intend to monitor continually the performance
and tracking error of the Ivy ProShares Funds to seek to ensure
investors' expectations are properly addressed, according to Ivy
executives.
About ProShares
ProShares has been at the forefront of the ETF revolution since
2006. ProShares now offers one of the largest lineups of ETFs, with
more than $27 billion in assets. The company is the leader in
strategies such as dividend growth, alternative and geared
(leveraged and inverse). ProShares continues to innovate with
products that provide strategic and tactical opportunities for
investors to manage risk and enhance returns.
About Ivy Investments
Ivy Investments® is a global organization recognized for
inventive, actively-managed investing strategies that help
investors best meet their long-term goals. It is part of an
organization dating to 1937, with a time-tested investment process
and an authentic and demanding culture – one that values
preparedness, collaboration and accountability. These values extend
from a broad internal investing capability, which reaches all major
asset classes, to subadvisor partners, to the distribution team
that supports advisors and clients.
Ivy Investment Management Company and Ivy Distributors, Inc. are
affiliates of Waddell & Reed Financial, Inc. (NYSE: WDR).
Through its subsidiaries, Waddell & Reed Financial, Inc.
provides investment management and financial planning services to
clients throughout the U.S. The firm had approximately $80.5
billion in total assets under management at Dec. 31, 2016.
IVY INVESTMENTS® refers to the investment management and
investment advisory services offered by Ivy Investment Management
Company, the financial services offered by Ivy Distributors, Inc.,
a FINRA member broker dealer and the distributor of IVY FUNDS®
mutual funds and IVY VARIABLE INSURANCE PORTFOLIOS℠, and the
financial services offered by their affiliates.
ProShares is a registered mark of ProShare Advisors LLC and has
been licensed by Ivy Investment Management Company and Ivy
Distributors, Inc. solely for use in connection with the Ivy
ProShares funds.
Risk Factors: The value of the Funds’ shares will change,
and you could lose money on your investment. While the Funds
attempt to track the performance of their stated indexes, there is
no guarantee or assurance that the methodology used to create the
index will result in the Funds achieving high, or even positive,
returns. The Index may underperform, and the Funds could lose
value, while other indexes or measures of market performance
increase in value. Funds that have an emphasis on dividend-paying
stocks involve the risk that such stocks may fall out of favor with
investors and underperform non-dividend paying stocks and the
market as a whole over any period of time. In addition, there is no
guarantee that the companies in which the Funds invest will declare
dividends in the future or that dividends, if declared, will remain
at current levels or increase over time. The amount of any
dividends the companies may pay may fluctuate significantly. In
addition, the value of dividend-paying common stocks can decline
when interest rates rise as fixed-income investments become more
attractive to investors. This risk may be greater due to the
current period of historically low interest rates. 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.
Fixed-income securities are subject to interest-rate risk and, as
such, the net asset value of the Fund may fall as interest rates
rise. Investing in high-income securities may carry a greater risk
of nonpayment of interest or principal than higher-rated bonds.
These and other risks are more fully described in the Funds’
prospectus. Not all funds or fund classes may be offered at all
broker/dealers.
Before investing, investors should consider carefully the
investment objectives, risks, charges and expenses of a mutual
fund. This and other important information is contained in the
prospectus and summary prospectus, which may be obtained at
www.ivyinvestments.com or from a financial advisor. Read
it carefully before investing.
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version on businesswire.com: http://www.businesswire.com/news/home/20170426005264/en/
Ivy InvestmentsRoger Hoadley, 913-236-1993VP, Director of
Communicationsrhoadley@ivyinvestments.com
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