Mutual Fund Summary Prospectus (497k)
November 06 2013 - 4:51PM
Edgar (US Regulatory)
Ivy Micro Cap Growth Fund
Summary Prospectus | July 31, 2013, as supplemented November 6, 2013
Share Class
(Ticker):
Class A Shares (IGWAX), Class B Shares (IGWBX), Class C Shares (IGWCX), Class I Shares (IGWIX), Class R Shares (IYMRX), Class Y Shares (IGWYX)
Before you invest, you may want to review the Funds prospectus, which contains more information about the Fund and
its risks. You can find the Funds prospectus and other information about the Fund (including the Funds SAI) online at
www.ivyfunds.com/prospectus
. You can also get this information at no cost by calling 800.777.6472 or by sending
an e-mail request to
IMCompliance@waddell.com
. You can also get this information from your investment provider. The Funds prospectus and SAI dated July 31, 2013 (as each may be amended or supplemented) are incorporated herein by
reference.
Objective
To seek to
provide growth of capital.
Fees and Expenses
This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the
future, at least $100,000 in funds within Ivy Funds, InvestEd Portfolios and/or Waddell & Reed Advisors Funds. More information about these and other discounts is available from your financial professional and in the Sales Charge
Reductions section on page 207 of the Funds prospectus and in the Purchase, Redemption and Pricing of Shares section on page 125 of the Funds statement of additional information (SAI). Effective January 1, 2014,
the Funds Class B shares are not available for purchase by new and existing investors. Class B shares will continue to be available for dividend reinvestment and exchanges.
Shareholder Fees
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(fees paid directly from your investment)
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Class A
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Class B
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Class C
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Class I
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Class R
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Class Y
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Maximum Sales Charge (Load) Imposed on Purchases
(as a % of offering price)
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5.75%
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None
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None
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None
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None
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None
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Maximum Deferred Sales Charge (Load)
(as a % of lesser of amount invested or redemption value)
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1.00%
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1
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5.00%
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1
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1.00%
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1
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None
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None
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None
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Maximum Account Fee
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None
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2
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None
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None
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2
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None
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None
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None
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Annual Fund Operating Expenses
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(expenses that you pay each year as a % of the value of your investment)
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Class A
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Class B
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Class C
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Class I
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Class R
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Class Y
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Management Fees
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0.95%
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0.95%
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0.95%
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0.95%
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0.95%
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0.95%
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Distribution and Service (12b-1) Fees
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0.25%
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1.00%
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1.00%
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0.00%
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0.50%
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0.25%
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Other Expenses
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0.58%
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0.95%
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0.60%
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0.36%
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0.44%
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0.40%
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Total Annual Fund Operating Expenses
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1.78%
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2.90%
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2.55%
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1.31%
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1.89%
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1.60%
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Fee Waiver and/or Expense Reimbursement
3
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0.00%
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0.00%
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0.00%
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0.00%
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0.00%
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0.00%
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Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement
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1.78%
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2.90%
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2.55%
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1.31%
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1.89%
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1.60%
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1
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For Class A shares, a 1% contingent deferred sales charge (CDSC) is only imposed on Class A shares that were purchased at net asset value (NAV) for $1
million or more that are subsequently redeemed within 12 months of purchase. For Class B shares, the CDSC declines from 5% for redemptions within the first year of purchase, to 4% for redemptions within the second year, to 3% for redemptions within
the third and fourth years, to 2% for redemptions within the fifth year, to 1% for redemptions within the sixth year and to 0% for redemptions after the sixth year. For Class C shares, a 1% CDSC applies to redemptions within 12 months of purchase.
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2
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With limited exceptions, for Class A and Class C shares, if your Fund account balance is below $750 at the close of business on September 26, 2014, and on the
Friday prior to the last week of September each year thereafter, the account will be assessed an account fee of $20.
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3
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Through July 31, 2014, to the extent that the total annual ordinary fund operating expenses of the Class Y shares exceeds the total annual ordinary fund
operating expenses of the Class A shares, Ivy Funds Distributor, Inc. (IFDI), the Funds distributor, and/or Waddell & Reed Services Company, doing business as WI Services Company (WISC), the Funds transfer agent, have
contractually agreed to reimburse sufficient 12b-1 and/or shareholder servicing fees to ensure that the total annual ordinary fund operating expenses of the Class Y shares do not exceed the total annual ordinary fund operating expenses of the
Class A shares, as calculated at the end of each month. Prior to that date, the expense limitation may not be terminated by IFDI, WISC or the Board of Trustees.
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Example
This example is intended to help you compare the cost of investing in the shares of the Fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the particular class of shares of the Fund for the time periods indicated and then redeem all your
shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions,
your costs would be:
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1 Year
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3 Years
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5 Years
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10 Years
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Class A Shares
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$
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745
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$
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1,103
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$
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1,484
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$
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2,549
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Class B Shares
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693
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1,198
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1,628
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2,958
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Class C Shares
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258
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793
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1,355
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2,885
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Class I Shares
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133
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415
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718
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1,579
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Class R Shares
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192
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594
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1,021
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2,212
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Class Y Shares
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163
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505
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871
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1,900
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You would pay the following expenses if you did not redeem your shares:
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1 Year
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3 Years
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5 Years
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10 Years
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Class A Shares
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$
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745
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$
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1,103
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$
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1,484
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$
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2,549
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Class B Shares
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293
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898
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1,528
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2,958
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Class C Shares
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258
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793
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1,355
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2,885
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Class I Shares
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133
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415
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718
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1,579
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Class R Shares
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192
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594
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1,021
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2,212
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Class Y Shares
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163
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505
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871
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1,900
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Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio
turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds
performance. During the most recent fiscal year, the Funds portfolio turnover rate was 51% of the average value of its portfolio.
Principal
Investment Strategies
Ivy Micro Cap Growth Fund seeks to achieve its objective by investing, under normal circumstances, at least 80% of
its net assets in equity securities of micro cap companies. Micro cap companies typically are companies with float-adjusted market capitalizations below $1 billion at the time of acquisition. The Fund primarily invests in common stock, which may
include common stocks that are offered in initial public offerings (IPOs).
In selecting equity securities for the Fund, Wall Street
Associates, LLC (WSA), the Funds investment subadviser, utilizes a bottom-up stock selection process and seeks to invest in securities of companies that it believes exhibit extraordinary earnings growth, earnings surprise potential,
fundamental strength and management vision.
Generally, in determining whether to sell a security, WSA uses the same type of analysis that it
uses in buying securities. For example, WSA may sell a security if it believes that the issuers growth and/or profitability characteristics are deteriorating or the issuer no longer maintains a competitive advantage, when it believes there are
more attractive investment opportunities, when WSA believes a companys valuation has become unattractive relative to industry leaders and industry-specific metrics, to reduce the Funds holding in that security or its exposure to a
particular sector, or to raise cash.
Principal Investment Risks
As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. The Fund is not intended as a complete investment program. A variety of factors can
affect the investment performance of the Fund and prevent it from achieving its objective. These include:
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Company Risk
. A company may perform worse
than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company.
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Growth Stock Risk
. Prices of growth stocks
may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may not perform as well as value stocks or the stock market in general.
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Initial Public Offering Risk
. Investments in
IPOs can have a significant positive impact on the Funds performance; however, any positive effect of investments in IPOs may not be sustainable because of a number of factors. Namely, the Fund may not be able to buy shares in some IPOs, or
may be able to buy only a small number of shares. Also, the Fund may not be able to buy the shares at the commencement of the offering, and the general availability and performance of IPOs are dependent on market psychology and economic conditions.
To the
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extent that IPOs have a significant impact on the Funds performance, this may not be able to be replicated in the future. The relative performance impact of IPOs is also likely to decline
as the Fund grows.
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Liquidity Risk
. Generally, a security is
liquid if the Fund is able to sell the security at a fair price within a reasonable time. Liquidity is generally related to the market trading volume for a particular security. Illiquid securities may trade at a discount from comparable, more liquid
investments, and may be subject to wider fluctuations in market value. Less liquid securities are more difficult to dispose of at their recorded values and are subject to increased spreads and volatility. Also, the Fund may not be able to dispose of
illiquid securities when that would be beneficial at a favorable time or price.
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Management Risk
. Fund performance is
primarily dependent on WSAs skill in evaluating and managing the Funds portfolio and the Fund may not perform as well as other similar mutual funds.
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Market Risk
. Adverse market conditions,
sometimes in response to general economic or industry news, may cause the prices of the Funds holdings to fall as part of a broad market decline. The financial crisis in the U.S. and foreign economies over the past several years, including the
European sovereign debt crisis, has resulted, and may continue to result, in an unusually high degree of volatility in the financial markets, both U.S. and foreign, and in the NAVs of many mutual funds, including to some extent the Fund. Global
economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect
securities held by the Fund. These circumstances have also decreased liquidity in some markets and may continue to do so. In addition, certain unanticipated events, such as natural disasters, terrorist attacks, and other geopolitical events, can
have a dramatic adverse effect on securities held by the Fund.
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Small Company Risk
. Securities of small to
micro capitalization companies are subject to greater price volatility, lower trading volume and less liquidity due to, among other things, such companies small size, limited product lines, limited access to financing sources and limited
management depth. In addition, the frequency and volume of trading of such securities may be less than is typical of larger companies, making them subject to wider price fluctuations and such securities may be affected to a greater extent than other
types of securities by the underperformance of a sector during market downturns. In some cases, there could be difficulties in selling securities of small to micro capitalization companies at the desired time.
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Performance
The chart and table below provide
some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the
performance with those of broad-based securities market indexes and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). The chart does not reflect any sales charges and, if those sales charges
were included, returns would be less than those shown.
After-tax returns are calculated using the historical highest individual Federal
marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their
Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes
may vary.
Performance results include the effect of expense reduction arrangements for some or all of the periods shown. If those arrangements
had not been in place, the performance results for those periods would have been lower.
The Funds past performance (before and after
taxes) does not necessarily indicate how it will perform in the future. Current performance may be lower or higher. Please visit
www.ivyfunds.com
or call 800.777.6472 for the Funds updated performance.
Chart of Year-by-Year Returns
as
of December 31 each year
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In the period shown in the chart, the highest quarterly return was 20.33% (the fourth quarter of 2010) and the lowest quarterly return was -25.41% (the third quarter of 2011). The
Class A return for the year through June 30, 2013 was 23.97%.
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Average Annual Total Returns
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as of December 31, 2012
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1 Year
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Life of
Class
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Class A
(began on 02-17-2009)
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Return Before Taxes
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5.35%
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18.89%
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Return After Taxes on Distributions
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5.35%
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17.81%
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Return After Taxes on Distributions and Sale of Fund Shares
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3.48%
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16.19%
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Class B
(began on 02-17-2009)
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Return Before Taxes
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6.50%
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18.65%
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Class C
(began on 02-17-2009)
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Return Before Taxes
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10.82%
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19.67%
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Class I
(began on 02-17-2009)
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Return Before Taxes
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12.22%
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21.20%
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Class R
(began on 12-19-2012)
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Return Before Taxes
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N/A
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0.96%
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Class Y
(began on 02-17-2009)
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Return Before Taxes
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11.96%
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20.75%
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Indexes
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1 Year
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Life of
Class
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Russell 2000 Growth Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on
March 1, 2009)
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14.59%
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24.71%
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Russell Microcap Growth Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on
March 1, 2009)
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15.17%
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24.01%
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Lipper Small-Cap Growth Funds Universe Average (net of fees and expenses) (Life of Class index comparison begins on
March 1, 2009)
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13.09%
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23.83%
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Investment Adviser
The Fund is managed by Ivy Investment Management Company (IICO) and sub-advised by Wall Street Associates, LLC (WSA).
Portfolio Managers
The WSA Investment Team is
primarily responsible for the day-to-day management of the Fund. The WSA Investment Team consists of William Jeffery III, President and Chief Investment Officer of WSA, Kenneth F. McCain, Executive Vice President of WSA, Paul J. Ariano, Senior Vice
President of WSA, Paul K. LeCoq, Senior Vice President of WSA, Luke A. Jacobson, Vice President of WSA, and Alexis C. Waadt, Vice President of WSA. They have each co-managed the Fund since its inception in February 2009, except for Mr. Jacobson
who became a co-manager in January 2012 and Ms. Waadt who became a co-manager in January 2013.
Purchase and Sale of Fund Shares
The Funds shares are redeemable. You may purchase or redeem shares at the Funds NAV per share next calculated after your order is received in
proper form, subject to any applicable sales charge, on any business day through your dealer or financial adviser (all share classes), by writing to WI Services Company, P.O. Box 29217, Shawnee Mission, Kansas 66201-9217 (all share classes), or by
telephone (Class A, B and C: 800.777.6472); fax (Class A, B and C: 800.532.2749; Class I and Y: 800.532.2784), or internet (
www.ivyfunds.com
) (Class A, B and C) if you have completed an Express Transaction Authorization Form. If
your individual account is not maintained on the Funds shareholder servicing system, such as for Class R shares, please contact your selling broker-dealer, plan administrator or third-party record keeper to sell shares of the Fund.
The Funds initial and subsequent investment minimums generally are as follows, although the Fund and/or IFDI may reduce or waive the minimums in
some cases:
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For Class A, Class B and Class C:
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To Open an Account
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$500
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*
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For accounts opened with Automatic Investment Service (AIS)
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$50
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*
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For accounts established through payroll deductions and salary deferrals
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Any amount
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To Add to an Account
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Any amount
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For AIS
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$25
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*
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For Class I, Class R and Class Y:
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Please check with your selling broker-dealer, plan administrator or third-party record keeper for information about minimum
investment requirements.
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*
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Effective January 1, 2014, for Class A and Class C shares, the minimum amount to open an account will increase to $750 from $500, the minimum amount to open an account with AIS
will increase to $150 from $50, and the minimum amount to add an AIS to an account will increase to $50 from $25.
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Effective January 1, 2014, the Funds Class B shares are not available for purchase by new and existing investors. Class B shares will continue to be available for dividend
reinvestment and exchanges.
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Tax Information
The Funds distributions are generally taxable to you as ordinary income, long-term capital gain, or a combination of the two, unless you are investing through a tax-deferred arrangement, such as a
401(k) plan or an IRA.
Payments to Broker-Dealers and other Financial Intermediaries
If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and/or IICO and/or its affiliates may pay the intermediary for the sale of Fund shares and
related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial
intermediarys web site for more information.
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