N-CSRS

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-5017

Ivy Funds Variable Insurance Portfolios

(Exact name of registrant as specified in charter)

6300 Lamar Avenue, Overland Park, Kansas 66202

(Address of principal executive offices) (Zip code)

Kristen A. Richards

6300 Lamar Avenue

Overland Park, Kansas 66202

(Name and address of agent for service)

Registrant's telephone number, including area code: 913-236-2000

Date of fiscal year end: December 31

Date of reporting period: June 30, 2009

ITEM 1. REPORTS TO STOCKHOLDERS.

Semiannual Report

June 30, 2009

Ivy Funds Variable Insurance Portfolios

Pathfinder Aggressive

Pathfinder Conservative

Pathfinder Moderate

Pathfinder Moderately Aggressive

Pathfinder Moderately Conservative

Asset Strategy

Balanced

Bond

Core Equity

Dividend Opportunities

Energy

Global Natural Resources

Growth

High Income

International Growth

International Value

Micro Cap Growth

Mid Cap Growth

Money Market

Mortgage Securities

Real Estate Securities

Science and Technology

Small Cap Growth

Small Cap Value

Value

CONTENTS

Ivy Funds Variable Insurance Portfolios

President's Letter	3
Illustration of Portfolio Expenses	4
Portfolio Highlights and Schedule of Investments:
Pathfinder Portfolios	9
Asset Strategy	14
Balanced	21
Bond	26
Core Equity	32
Dividend Opportunities	35
Energy	38
Global Natural Resources	40
Growth	44
High Income	47
International Growth	53
International Value	56
Micro Cap Growth	59
Mid Cap Growth	62
Money Market	65
Mortgage Securities	68
Real Estate Securities	72
Science and Technology	74
Small Cap Growth	77
Small Cap Value	80
Value	83
Statement of Assets and Liabilities	86
Statement of Operations	90
Statement of Changes in Net Assets	94
Financial Highlights	100
Notes to Financial Statements	108
Approval of Investment Management Agreement	134
Shareholder Meeting Results	135
Proxy Voting Information	137
Quarterly Portfolio Schedule Information	138

PRESIDENT'S LETTER

Ivy Funds VIP

JUNE 30, 2009 (UNAUDITED)

Henry J. Herrmann, CFA

Dear Shareholder:

Every generation faces great challenges and opportunities. A person born in 1909 would have faced huge obstacles two decades later as America's economy crashed into the Great Depression. At the time, at a point in life when many are trying to progress in life, the painful reality was a decade of structural unemployment, loss of hope, and increasing global instability.

Over the last six months, America has continued to be tested once again, in our jobs, as investors, for our country as a global leader and as a culture. Greed, indifference and incompetence shook the global financial system to its core, while fear paralyzed markets. Unemployment rose rapidly.

However, during the last three months, the global equity market has enjoyed an encouraging rally. But, we have not yet returned to normal times. Unprecedented government policy actions may result in unintended consequences, but we do appear to be on the mend. Corporate earnings are likely to remain weak in many sectors for several quarters, although it is possible that the trough has been seen.

As you review this semiannual report, it is important to remember that a long-term perspective is an integral part of a successful investment program. For the six months ended June 30, 2009, the Standard & Poor's 500 Index, generally reflecting the performance of the domestic equity market, increased 3.17 percent, while the Citigroup Broad Investment Grade Index, generally reflecting the performance of the fixed income market, rose 1.42 percent. The slight increases for the period show that markets can come back from difficulty.

As with many aspects of life, financial decisions driven by emotion often do not generate the best results. An objective reading of history has shown that yielding to despair over economic downturns is usually a losing strategy.

The investment crisis of seven decades ago eventually brought out the best of America as well as a legacy of financial reform that, in 1940, included the law that created the modern mutual fund industry. It's not yet clear what new regulatory framework for the industry may emerge in Washington, but we hope it is balanced and fair.

Economic Snapshot

	6-30-09			12-31-08
U.S. unemployment rate		9.50	%		7.20	%
Inflation (U.S. Consumer Price Index)		- -1.40	%		0.10	%
U.S. GDP		- -1.00	%		- -3.80	%
30-year fixed mortgage rate		5.25	%		5.10	%
Oil price per barrel	$	69.82		$	44.60

Sources: Bloomberg, U.S. Department of Labor

All government statistics shown are subject to periodic revision.

The U.S. Consumer Price Index is the government's measure of the change in the retail cost of goods and services. Gross domestic product measures year-over-year changes in the output of goods and services. Mortgage rates shown reflect the average rate on a conventional loan with a 60-day lender commitment. Oil prices reflect the market price of West Texas intermediate grade crude.


As shown in the Economic Snapshot table above, the U.S. economy at June 30, 2009 remains weak. The unemployment rate is higher than it was six months ago. The economy is shrinking. For consumers, the good news is that inflation is low. However, oil prices are substantially higher. Mortgage rates are also higher.

We believe that the investing and economic climate will get better in time. With perseverance, initiative and ingenuity, we believe the strengths of our nation's character will surface. In this uncertain environment, we believe a very strong effort to manage risk is paramount. With that approach in mind, we will strive to earn your continued confidence for many years to come.

Respectfully,

Henry J. Herrmann, CFA
President

The opinions expressed in this letter are those of the President of Ivy Funds Variable Insurance Portfolios and are current only through the end of the period of the report, as stated on the cover. The President's views are subject to change at any time, based on market and other conditions, and no forecasts can be guaranteed.

ILLUSTRATION OF PORTFOLIO EXPENSES

Ivy Funds VIP

(UNAUDITED)

As a shareholder of a Portfolio, you incur ongoing costs, including management fees, distribution and service fees, and other Portfolio expenses. The following tables are intended to help you understand your ongoing costs (in dollars) of investing in a Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the six-month period ended June 30, 2009.

Actual Expenses

The first line in the following tables provides information about actual investment values and actual expenses. You may use the information in this line, together with your initial investment in Portfolio shares, to estimate the expenses that you paid over the period. Simply divide the value of that investment by $1,000 (for example, a $7,500 initial investment divided by $1,000 = 7.5), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your investment during this period. In addition, there are fees and expenses imposed under the variable annuity or variable life insurance contract through which shares of the Portfolio are held. Additional fees have the effect of reducing investment returns.

Hypothetical Example for Comparison Purposes

The second line in the following tables provides information about hypothetical investment values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of five percent per year before expenses, which is not the Portfolio's actual return. The hypothetical investment values and expenses may not be used to estimate the actual investment value at the end of the period or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this five percent hypothetical example with the five percent hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the tables are meant to highlight your ongoing costs as a shareholder of the Portfolio and do not reflect any fees and expenses imposed under the variable annuity or variable life insurance contract through which shares of the Portfolio are held.

ILLUSTRATION OF PORTFOLIO EXPENSES

Ivy Funds VIP

(UNAUDITED)

As a shareholder of a Portfolio, you incur ongoing costs, including management fees, distribution and service fees, and other Portfolio expenses. The following tables are intended to help you understand your ongoing costs (in dollars) of investing in a Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the six-month period ended June 30, 2009.

Actual Expenses

The first line in the following tables provides information about actual investment values and actual expenses. You may use the information in this line, together with your initial investment in Portfolio shares, to estimate the expenses that you paid over the period. Simply divide the value of that investment by $1,000 (for example, a $7,500 initial investment divided by $1,000 = 7.5), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your investment during this period. In addition, there are fees and expenses imposed under the variable annuity or variable life insurance contract through which shares of the Portfolio are held. Additional fees have the effect of reducing investment returns.

Hypothetical Example for Comparison Purposes

The second line in the following tables provides information about hypothetical investment values and hypothetical expenses based on the Portfolio's actual expense ratio and an assumed rate of return of five percent per year before expenses, which is not the Portfolio's actual return. The hypothetical investment values and expenses may not be used to estimate the actual investment value at the end of the period or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this five percent hypothetical example with the five percent hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the tables are meant to highlight your ongoing costs as a shareholder of the Portfolio and do not reflect any fees and expenses imposed under the variable annuity or variable life insurance contract through which shares of the Portfolio are held.

Pathfinder Aggressive
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,055.70	0.11%	$0.51
Based on 5% Return(2)	$1,000	$1,024.25	0.11%	$0.51

Pathfinder Conservative
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,036.37	0.14%	$0.71
Based on 5% Return(2)	$1,000	$1,024.12	0.14%	$0.71

Pathfinder Moderate
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,044.90	0.07%	$0.41
Based on 5% Return(2)	$1,000	$1,024.44	0.07%	$0.40

Pathfinder Moderately Aggressive
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,050.70	0.06%	$0.31
Based on 5% Return(2)	$1,000	$1,024.48	0.06%	$0.30

Pathfinder Moderately Conservative
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,037.60	0.10%	$0.51
Based on 5% Return(2)	$1,000	$1,024.32	0.10%	$0.51

Asset Strategy
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,069.50	1.05%	$5.38
Based on 5% Return(2)	$1,000	$1,019.56	1.05%	$5.25

Balanced
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,004.10	1.03%	$5.11
Based on 5% Return(2)	$1,000	$1,019.69	1.03%	$5.15

Bond
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,031.98	0.80%	$4.06
Based on 5% Return(2)	$1,000	$1,020.81	0.80%	$4.04

Core Equity
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,020.14	0.98%	$4.95
Based on 5% Return(2)	$1,000	$1,019.93	0.98%	$4.95

Dividend Opportunities
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,012.40	1.06%	$5.23
Based on 5% Return(2)	$1,000	$1,019.56	1.06%	$5.25

Energy
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,138.50	0.67%	$3.53
Based on 5% Return(2)	$1,000	$1,021.48	0.67%	$3.34

Global Natural Resources
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,378.50	1.53%	$9.04
Based on 5% Return(2)	$1,000	$1,017.21	1.53%	$7.67

Growth
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,074.70	0.99%	$5.08
Based on 5% Return(2)	$1,000	$1,019.90	0.99%	$4.95

High Income
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,242.10	0.93%	$5.16
Based on 5% Return(2)	$1,000	$1,020.21	0.93%	$4.65

International Growth
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,055.79	1.20%	$6.06
Based on 5% Return(2)	$1,000	$1,018.85	1.20%	$5.96

International Value
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,106.80	1.21%	$6.32
Based on 5% Return(2)	$1,000	$1,018.79	1.21%	$6.06

Micro Cap Growth
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,191.80	1.43%	$7.78
Based on 5% Return(2)	$1,000	$1,017.71	1.43%	$7.16

Mid Cap Growth
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,170.00	1.24%	$6.62
Based on 5% Return(2)	$1,000	$1,018.67	1.24%	$6.16

Money Market
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,005.98	0.51%	$2.51
Based on 5% Return(2)	$1,000	$1,022.25	0.51%	$2.53

Mortgage Securities
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,031.60	1.12%	$5.69
Based on 5% Return(2)	$1,000	$1,019.22	1.12%	$5.65

Real Estate Securities
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$875.20	1.50%	$7.03
Based on 5% Return(2)	$1,000	$1,017.34	1.50%	$7.57

Science and Technology
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,168.20	1.18%	$6.29
Based on 5% Return(2)	$1,000	$1,018.97	1.18%	$5.86

Small Cap Growth
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,153.40	1.16%	$6.24
Based on 5% Return(2)	$1,000	$1,019.04	1.16%	$5.86

Small Cap Value
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,043.80	1.21%	$6.13
Based on 5% Return(2)	$1,000	$1,018.80	1.21%	$6.06

Value
For the Six Months Ended       June 30, 2009	Beginning Account Value 12-31-08	Ending Account Value 6-30-09	Annualized Expense Ratio Based on the Six-Month Period	Expenses Paid During Period*
Based on Actual Portfolio Return(1)	$1,000	$1,016.60	1.04%	$5.14
Based on 5% Return(2)	$1,000	$1,019.66	1.04%	$5.15

*Portfolio expenses are equal to the Portfolio's annualized expense ratio (provided in the table), multiplied by the average account value over the period, multiplied by 181 days in the six-month period ended June 30, 2009, and divided by 365.

(1)This line uses the Portfolio's actual total return and actual Portfolio expenses. It is a guide to the actual expenses paid by the Portfolio in the period. The "Ending Account Value" shown is computed using the Portfolio's actual return and the "Expenses Paid During Period" column shows the dollar amount that would have been paid by an investor who started with $1,000 in the Portfolio. A shareholder may use the information here, together with the dollar amount invested, to estimate the expenses that were paid over the period. For every thousand dollars a shareholder has invested, the expenses are listed in the last column.

(2)This line uses a hypothetical five percent annual return and actual Portfolio expenses. It helps to compare the Portfolio's ongoing costs with other mutual funds. A shareholder can compare the Portfolio's ongoing costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.

The above illustrations are based on ongoing costs only.

PORTFOLIO HIGHLIGHTS

Pathfinder Portfolios

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Pathfinder Aggressive - Asset Allocation

Ivy Funds VIP Growth	15.97%
Ivy Funds VIP Dividend Opportunities	13.28%
Ivy Funds VIP International Value	13.15%
Ivy Funds VIP Bond	12.15%
Ivy Funds VIP Money Market	11.80%
Ivy Funds VIP International Growth	9.76%
Ivy Funds VIP Small Cap Value	8.12%
Ivy Funds VIP Value	6.51%
Ivy Funds VIP Mid Cap Growth	5.17%
Ivy Funds VIP Small Cap Growth	3.10%
Cash and Cash Equivalents	0.99%

Pathfinder Conservative - Asset Allocation

Ivy Funds VIP Bond	30.07%
Ivy Funds VIP Money Market	29.19%
Ivy Funds VIP Dividend Opportunities	19.58%
Ivy Funds VIP Growth	9.06%
Ivy Funds VIP International Value	5.42%
Ivy Funds VIP Mid Cap Growth	2.20%
Ivy Funds VIP Value	2.03%
Ivy Funds VIP Small Cap Growth	1.11%
Ivy Funds VIP Small Cap Value	1.03%
Cash and Cash Equivalents	0.31%

Pathfinder Moderate - Asset Allocation

Ivy Funds VIP Bond	20.92%
Ivy Funds VIP Money Market	20.34%
Ivy Funds VIP Dividend Opportunities	16.86%
Ivy Funds VIP Growth	11.64%
Ivy Funds VIP International Value	8.09%
Ivy Funds VIP International Growth	6.84%
Ivy Funds VIP Value	4.85%
Ivy Funds VIP Mid Cap Growth	4.19%
Ivy Funds VIP Small Cap Value	3.99%
Ivy Funds VIP Small Cap Growth	2.11%
Cash and Cash Equivalents	0.17%

Pathfinder Moderately Aggressive - Asset Allocation

Ivy Funds VIP Dividend Opportunities	16.66%
Ivy Funds VIP Bond	16.14%
Ivy Funds VIP Money Market	15.69%
Ivy Funds VIP Growth	11.56%
Ivy Funds VIP International Value	10.96%
Ivy Funds VIP International Growth	8.64%
Ivy Funds VIP Small Cap Value	6.99%
Ivy Funds VIP Mid Cap Growth	5.22%
Ivy Funds VIP Value	4.80%
Ivy Funds VIP Small Cap Growth	3.16%
Cash and Cash Equivalents	0.18%

Pathfinder Moderately Conservative - Asset Allocation

Ivy Funds VIP Bond	25.61%
Ivy Funds VIP Money Market	24.90%
Ivy Funds VIP Dividend Opportunities	17.08%
Ivy Funds VIP Growth	10.79%
Ivy Funds VIP International Value	5.17%
Ivy Funds VIP International Growth	4.98%
Ivy Funds VIP Value	4.90%
Ivy Funds VIP Mid Cap Growth	4.24%
Ivy Funds VIP Small Cap Growth	1.07%
Ivy Funds VIP Small Cap Value	1.00%
Cash and Cash Equivalents	0.26%

SCHEDULE OF INVESTMENTS

Pathfinder Portfolios (in thousands)

JUNE 30, 2009 (UNAUDITED)

AFFILIATED MUTUAL FUNDS		Shares		Value
Ivy Funds VIP Bond			1,136	$	6,017
Ivy Funds VIP Dividend Opportunities			1,284		6,578
Ivy Funds VIP Growth			1,008		7,911
Ivy Funds VIP International Growth			776		4,834
Ivy Funds VIP International Value			524		6,515
Ivy Funds VIP Mid Cap Growth			486		2,561
Ivy Funds VIP Money Market			5,844		5,844
Ivy Funds VIP Small Cap Growth			220		1,536
Ivy Funds VIP Small Cap Value			374		4,020
Ivy Funds VIP Value			780		3,223
TOTAL AFFILIATED MUTUAL FUNDS - 99.01%				$	49,039
(Cost: $59,789)
SHORT-TERM SECURITIES - 0.19%	Principal
Master Note
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (A)			$ 92	$	92
(Cost: $92)
TOTAL INVESTMENT SECURITIES - 99.20%				$	49,131
(Cost: $59,881)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.80%					400
NET ASSETS - 100.00%				$	49,531

Notes to Schedule of Investments

(A)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	59,881
Gross unrealized appreciation		15
Gross unrealized depreciation		(10,765	)
Net unrealized depreciation	$	(10,750	)

SCHEDULE OF INVESTMENTS

Pathfinder Conservative (in thousands)

JUNE 30, 2009 (UNAUDITED)

AFFILIATED MUTUAL FUNDS		Shares		Value
Ivy Funds VIP Bond			1,822	$	9,648
Ivy Funds VIP Dividend Opportunities			1,227		6,282
Ivy Funds VIP Growth			371		2,909
Ivy Funds VIP International Value			140		1,740
Ivy Funds VIP Mid Cap Growth			134		707
Ivy Funds VIP Money Market			9,370		9,370
Ivy Funds VIP Small Cap Growth			51		357
Ivy Funds VIP Small Cap Value			31		331
Ivy Funds VIP Value			158		653
TOTAL AFFILIATED MUTUAL FUNDS - 99.69%				$	31,997
(Cost: $31,875)
SHORT-TERM SECURITIES - 0.38%	Principal
Master Note
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (A)		$	121	$	121
(Cost: $121)
TOTAL INVESTMENT SECURITIES - 100.07%				$	32,118
(Cost: $31,996)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.07%)					(23	)
NET ASSETS - 100.00%				$	32,095

Notes to Schedule of Investments

(A)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	31,996
Gross unrealized appreciation		160
Gross unrealized depreciation		(38	)
Net unrealized appreciation	$	122

SCHEDULE OF INVESTMENTS

Pathfinder Moderate (in thousands)

JUNE 30, 2009 (UNAUDITED)

AFFILIATED MUTUAL FUNDS		Shares		Value
Ivy Funds VIP Bond			6,378	$	33,779
Ivy Funds VIP Dividend Opportunities			5,318		27,236
Ivy Funds VIP Growth			2,396		18,799
Ivy Funds VIP International Growth			1,773		11,053
Ivy Funds VIP International Value			1,052		13,070
Ivy Funds VIP Mid Cap Growth			1,283		6,765
Ivy Funds VIP Money Market		32,853			32,853
Ivy Funds VIP Small Cap Growth			488		3,412
Ivy Funds VIP Small Cap Value			600		6,442
Ivy Funds VIP Value			1,897		7,836
TOTAL AFFILIATED MUTUAL FUNDS - 99.83%				$	161,245
(Cost: $167,128)
SHORT-TERM SECURITIES - 0.96%	Principal
Master Note
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (A)		$	1,545	$	1,545
(Cost: $1,545)
TOTAL INVESTMENT SECURITIES - 100.79%				$	162,790
(Cost: $168,673)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.79%)					(1,267	)
NET ASSETS - 100.00%				$	161,523

Notes to Schedule of Investments

(A)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	168,673
Gross unrealized appreciation		384
Gross unrealized depreciation		(6,267	)
Net unrealized depreciation	$	(5,883	)

SCHEDULE OF INVESTMENTS

Pathfinder Moderately Aggressive (in thousands)

JUNE 30, 2009 (UNAUDITED)

AFFILIATED MUTUAL FUNDS		Shares		Value
Ivy Funds VIP Bond			6,184	$	32,750
Ivy Funds VIP Dividend Opportunities			6,602		33,816
Ivy Funds VIP Growth			2,990		23,460
Ivy Funds VIP International Growth			2,812		17,527
Ivy Funds VIP International Value			1,790		22,248
Ivy Funds VIP Mid Cap Growth			2,011		10,598
Ivy Funds VIP Money Market	31,837				31,837
Ivy Funds VIP Small Cap Growth			915		6,403
Ivy Funds VIP Small Cap Value			1,321		14,184
Ivy Funds VIP Value			2,357		9,734
TOTAL AFFILIATED MUTUAL FUNDS - 99.82%				$	202,557
(Cost: $216,399)
SHORT-TERM SECURITIES - 0.27%	Principal
Master Note
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (A)		$553		$	553
(Cost: $553)
TOTAL INVESTMENT SECURITIES - 100.09%				$	203,110
(Cost: $216,952)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.09%)					(182	)
NET ASSETS - 100.00%				$	202,928

Notes to Schedule of Investments

(A)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	216,952
Gross unrealized appreciation		68
Gross unrealized depreciation		(13,910	)
Net unrealized depreciation	$	(13,842	)

SCHEDULE OF INVESTMENTS

Pathfinder Moderately Conservative (in thousands)

JUNE 30, 2009 (UNAUDITED)

AFFILIATED MUTUAL FUNDS		Shares		Value
Ivy Funds VIP Bond			3,324	$	17,604
Ivy Funds VIP Dividend Opportunities			2,291		11,736
Ivy Funds VIP Growth			945		7,416
Ivy Funds VIP International Growth			550		3,426
Ivy Funds VIP International Value			286		3,550
Ivy Funds VIP Mid Cap Growth			553		2,917
Ivy Funds VIP Money Market	17,112				17,112
Ivy Funds VIP Small Cap Growth			105		736
Ivy Funds VIP Small Cap Value			64		688
Ivy Funds VIP Value			815		3,366
TOTAL AFFILIATED MUTUAL FUNDS - 99.74%				$	68,551
(Cost: $69,649)
SHORT-TERM SECURITIES - 0.45%		Principal
Master Note
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (A)			$312	$	312
(Cost: $312)
TOTAL INVESTMENT SECURITIES - 100.19%				$	68,863
(Cost: $69,961)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.19%)					(133	)
NET ASSETS - 100.00%				$	68,730

Notes to Schedule of Investments

(A)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	69,961
Gross unrealized appreciation		220
Gross unrealized depreciation		(1,318	)
Net unrealized depreciation	$	(1,098	)

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

Asset Strategy

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Stocks	66.38%
Financials	23.29%
Information Technology	13.47%
Energy	11.31%
Materials	6.60%
Consumer Discretionary	4.60%
Industrials	3.19%
Consumer Staples	2.35%
Health Care	1.57%
Bullion (Gold)	16.26%
Options	1.56%
Bonds	7.44%
Corporate Debt Securities	5.16%
United States Government and Government Agency Obligations	1.35%
Municipal Bonds	0.77%
Senior Loans	0.16%
Cash and Cash Equivalents	8.36%

Bond Portfolio Characteristics

Average maturity	1.7 years
Effective duration	0.5 years
Weighted average bond rating	AA––

Country Weightings

Pacific Basin	30.89%
China	17.10%
India	4.55%
Taiwan	4.37%
Other Pacific Basin(1)	4.87%
North America	30.81%
United States	30.74%
Other North America(2)	0.07%
Bullion (Gold)	16.26%
Europe	9.14%
United Kingdom	4.74%
Other Europe(3)	4.40%
Bahamas/Caribbean(4)	1.75%
South America(5)	1.23%
Cash and Cash Equivalents and Options	9.92%

(1)Includes 0.09% Australia, 3.15% Hong Kong, 1.49% South Korea and 0.14% Vietnam.
(2)Includes 0.07% Mexico.
(3)Includes 2.83% France, 0.11% Poland, 0.99% Sweden and 0.47% Switzerland.
(4)Includes 0.16% Bahamas, 0.10% British Virgin Islands and 1.49% Cayman Islands.
(5)Includes 1.23% Brazil.

Top 10 Equity Holdings

Company	Country	Sector
Industrial and Commercial Bank of China (Asia) Limited	China	Financials
China Life Insurance Company Limited, H Shares	China	Financials
Taiwan Semiconductor Manufacturing Company Ltd.	Taiwan	Information Technology
Monsanto Company	United States	Materials
QUALCOMM Incorporated	United States	Information Technology
Standard Chartered PLC	United Kingdom	Financials
China Shenhua Energy Company Limited, H Shares	China	Energy
TOTAL S.A.	France	Energy
Visa Inc., Class A	United States	Information Technology
Weatherford International Ltd.	United States	Energy
See your advisor for more information on the Portfolio's most recently published Top 10 Equity Holdings.

SCHEDULE OF INVESTMENTS

Asset Strategy (in thousands)

JUNE 30, 2009 (UNAUDITED)

COMMON STOCKS		Shares			Value
Automobile Manufacturers - 1.49%
Hyundai Motor Company (A)			207	$	12,035
Biotechnology - 1.57%
Gilead Sciences, Inc. (B)			270		12,665
Casinos & Gaming - 1.14%
Wynn Resorts, Limited (B)			259		9,153
Coal & Consumable Fuels - 2.10%
China Shenhua Energy Company Limited, H Shares (A)			4,600		16,946
Communications Equipment - 5.35%
QUALCOMM Incorporated			682		30,812
Reliance Communication Ventures Limited (A)			710		4,292
Telefonaktiebolaget LM Ericsson, B Shares (A)			814		7,989
					43,093
Construction & Engineering - 2.37%
China Communications Construction Company Limited,       H Shares (A)	10,477				12,248
Larsen & Toubro Limited (A)			210		6,886
					19,134
Data Processing & Outsourced Services - 2.70%
Redecard S.A. (A)(C)			79		1,208
Redecard S.A. (A)			323		4,945
Visa Inc., Class A			251		15,627
					21,780
Diversified Banks - 10.86%
Barclays PLC (A)(C)			1,162		5,409
Cia Brasileira de Meios de Pagamento (A)(B)(D)			202		1,737
HDFC Bank Limited (A)			194		6,056
ICICI Bank Limited (A)			349		5,259
Industrial and Commercial Bank of China (Asia) Limited (A)	51,126				35,623
Industrial and Commercial Bank of China Limited, H Shares (A)(C)	16,701				11,637
Standard Chartered PLC (A)			917		17,199
State Bank of India (A)			126		4,581
					87,501
Diversified Capital Markets - 0.47%
UBS AG (A)(B)(D)			310		3,796
Diversified Metals & Mining - 2.65%
Southern Copper Corporation			574		11,737
Xstrata plc (A)			891		9,640
					21,377
Education Services - 0.82%
New Oriental Education & Technology Group Inc., ADR (B)			98		6,627
Fertilizers & Agricultural Chemicals - 3.95%
Monsanto Company			428		31,850
Footwear - 0.72%
NIKE, Inc., Class B			112		5,794
Heavy Electrical Equipment - 0.82%
ALSTOM (A)			112		6,582
Hotels, Resorts & Cruise Lines - 0.43%
Ctrip.com International, Ltd. (B)			76		3,504
Household Products - 0.52%
Reckitt Benckiser Group plc (A)			92		4,191
Integrated Oil & Gas - 2.90%
China Petroleum & Chemical Corporation, H Shares (A)			9,432		7,193
TOTAL S.A. (A)			300		16,184
					23,377
Life & Health Insurance - 4.64%
China Life Insurance Company Limited, H Shares (A)			9,366		34,443
Ping An Insurance (Group) Company of China, Ltd., H Shares (A)			436		2,947
					37,390
Mortgage REITs - 0.99%
Annaly Capital Management, Inc.			528		8,001
Oil & Gas Equipment & Services - 3.50%
Halliburton Company			263		5,450
Schlumberger Limited			141		7,602
Weatherford International Ltd. (B)			774		15,145
					28,197
Oil & Gas Exploration & Production - 2.81%
CNOOC Limited (A)			5,070		6,287
Devon Energy Corporation			177		9,636
XTO Energy Inc.			177		6,767
					22,690
Personal Products - 0.67%
Hengan International Group Company Limited (A)			1,156		5,415
Real Estate Development - 1.35%
China Overseas Land & Investment Limited (A)			4,691		10,896
Real Estate Management & Development - 0.52%
DLF Limited (A)			640		4,153
Regional Banks - 1.59%
China Construction Bank Corporation (A)	16,483				12,782
Semiconductors - 5.42%
MediaTek Incorporation (A)			181		2,163
PMC-Sierra, Inc. (B)			1,060		8,436
Taiwan Semiconductor Manufacturing Company Ltd. (A)	19,832				33,063
					43,662
Specialized Finance - 2.05%
CME Group Inc.			27		8,337
Hong Kong Exchanges and Clearing Limited (A)			527		8,208
					16,545
Thrifts & Mortgage Finance - 0.68%
HOUSING DEVELOPMENT FINANCE CORPORATION       LIMITED (A)			112		5,483
Tobacco - 1.16%
Philip Morris International Inc.			215		9,365
TOTAL COMMON STOCKS - 66.24%				$	533,984
(Cost: $480,414)
INVESTMENT FUNDS - 0.14%
Multiple Industry
Vietnam Azalea Fund Limited (B)(E)(F)			300	$	1,122
(Cost: $1,982)
CORPORATE DEBT SECURITIES		Principal
Beverage / Bottling - 0.13%
Anheuser-Busch InBev Worldwide Inc.,
7.200%, 1-15-14 (D)		$ 500			538
Companhia Brasileira de Bebidas,
10.500%, 12-15-11			500		575
					1,113
Biotechnology - 0.02%
Amgen Inc., Convertible,
0.125%, 2-1-11			200		190
Building Products - 0.07%
Desarrolladora Homex, S.A. de C.V.,
7.500%, 9-28-15			627		539
Coal & Consumable Fuels - 0.02%
Massey Energy Company, Convertible,
3.250%, 8-1-15			200		132
Consumer Finance - 0.12%
American Express Travel Related Services Co., Inc.,
5.250%, 11-21-11 (D)			1,000		994
Consumer Products - 0.01%
Staples, Inc.,
7.750%, 4-1-11			67		71
Consumer Products / Tobacco - 0.11%
Central European Distribution Corporation,
8.000%, 7-25-12 (D)(G)	EUR720				853
Department Stores - 0.13%
Kohl's Corporation,
6.300%, 3-1-11		$	1,000		1,041

Diversified Chemicals - 0.02%
E.I. du Pont de Nemours and Company,
5.875%, 1-15-14		115			125
Diversified Metals & Mining - 0.09%
BHP Billiton Finance (USA) Limited,
5.500%, 4-1-14			700		751
Electric Utilities - 0.31%
Allegheny Energy Supply Company, LLC,
7.800%, 3-15-11			2,430		2,514
Finance - Other - 0.15%
AXA Financial, Inc.,
7.750%, 8-1-10			700		702
Block Financial LLC,
7.875%, 1-15-13			350		379
Western Union Company (The),
6.500%, 2-26-14			120		128
					1,209
Finance Companies - 0.23%
C5 Capital (SPV) Limited,
6.196%, 12-31-  49 (C)(H)			1,500		796
Toyota Motor Credit Corporation,
1.120%, 1-18-15 (H)			1,050		1,018
					1,814
Forest Products - 0.06%
Sino-Forest Corporation,
9.125%, 8-17-11 (C)			475		475
Gas - Local Distribution - 0.09%
DCP Midstream, LLC,
9.700%, 12-1-13 (C)			660		728
Gas Pipe Lines - 0.37%
Duke Capital Corporation,
7.500%, 10-1-09			1,490		1,507
Enterprise Products Operating LLC,
9.750%, 1-31-14			1,345		1,547
					3,054
General Merchandise Stores - 0.06%
Dollar General Corporation,
11.875%, 7-15-17			450		486
Home Improvement Retail - 0.12%
Home Depot, Inc. (The),
5.200%, 3-1-11			950		983
Integrated Telecommunication Services - 0.10%
AT&T Inc.,
4.850%, 2-15-14			800		830
Metals / Mining - 0.22%
Vedanta Resources plc,
6.625%, 2-22-10 (C)			1,800		1,782
Movies & Entertainment - 0.03%
Viacom Inc.,
5.625%, 8-15-12			270		266
Office Electronics - 0.24%
Xerox Corporation:
6.875%, 8-15-11			315		326
5.500%, 5-15-12			850		847
7.625%, 6-15-13			400		403
6.400%, 3-15-16			225		207
6.750%, 2-1-17			225		205
					1,988
Oil & Gas Exploration & Production - 0.05%
XTO Energy Inc.,
5.900%, 8-1-12			355		376
Pharmaceuticals - 1.11%
Eli Lilly and Company,
3.550%, 3-6-12			975		1,010
Pfizer Inc.,
4.450%, 3-15-12			7,500		7,870
					8,880
Property & Casualty Insurance - 0.23%
Berkshire Hathaway Finance Corporation,
4.000%, 4-15-12 (C)			1,600		1,653
St. Paul Companies, Inc. (The),
8.125%, 4-15-10			200		209
					1,862
Retail Stores - Other - 0.14%
Best Buy Co., Inc.,
6.750%, 7-15-13			1,065		1,104
Service - Other - 0.05%
Expedia, Inc.,
8.500%, 7-1-16 (C)			225		216
Waste Management, Inc.,
6.375%, 3-11-15			180		187
					403
Soft Drinks - 0.06%
Coca-Cola Enterprises Inc.,
7.375%, 3-3-14			420		481
Specialized Finance - 0.20%
CME Group Inc.,
5.750%, 2-15-14			1,540		1,643
Technology - 0.07%
L-3 Communications Corporation:
7.625%, 6-15-12			360		361
6.125%, 7-15-13			180		170
					531
Transportation - Other - 0.16%
Ultrapetrol (Bahamas) Limited,
9.000%, 11-24-14			1,555		1,279
Utilities - 0.22%
CESP - Companhia Energetica de Sao Paulo,
9.750%, 1-15-15 (D)(G)	BRL3,000				1,576
Duke Energy Field Services, LLC,
7.875%, 8-16-10			$200		209
					1,785
Wireless Telecommunication Service - 0.17%
Verizon Wireless Capital LLC,
7.375%, 11-15-13 (D)			1,200		1,343
TOTAL CORPORATE DEBT SECURITIES - 5.16%				$	41,625
(Cost: $40,555)
MUNICIPAL BONDS
California - 0.09%
California Pollution Control Financing Authority, Variable       Rate Demand Solid Waste Disposal Revenue Bonds       (Waste Management, Inc. Project), Series 2003A,
5.000%, 11-1-38			731		735
Florida - 0.06%
Miami-Dade County Industrial Development Authority, Solid       Waste Disposal Revenue Bonds (Waste Management Inc.       of Florida Project), Series 2008,
5.400%, 8-1-23			490		488
New Hampshire - 0.19%
Business Finance Authority of the State of New Hampshire,       Pollution Control Refunding Revenue Bonds (The United       Illuminating Company Project-1997 Series A):
7.125%, 7-1-27			975		994
6.875%, 12-1-29			500		506
					1,500
New York - 0.03%
The Port Authority of New York and New Jersey, Consolidated       Bonds, One Hundred Fifty-Second Series,
5.750%, 11-1-30			235		240
Ohio - 0.14%
Ohio Air Quality Development Authority, State of Ohio,       Air Quality Revenue Bonds (Ohio Power Company Project),       Series 2008A,
7.125%, 6-1-41			1,095		1,117
Texas - 0.11%
Frisco Independent School District (Collin and Denton Counties,       Texas), Unlimited Tax School Building Bonds, Series 2008A,
6.000%, 8-15-38			465		503

Port of Houston Authority of Harris County, Texas, Unlimited       Tax Refunding Bonds, Series 2008A,
5.625%, 10-1-38			465			419
						922
West Virginia - 0.15%
West Virginia Economic Development Authority, Solid Waste       Disposal Facilities Revenue Bonds (Appalachian Power       Company - Amos Project), Series 2008E,
7.125%, 12-1-38			1,215			1,239
TOTAL MUNICIPAL BONDS - 0.77%					$	6,241
(Cost: $5,976)
PUT OPTIONS	Number of Contracts
Hang Seng Index:
Sep HKD17,400.00, Expires 9-29-09 (G)			1			7,366
Sep HKD17,600.00, Expires 9-29-09 (G)			––	*		2,580
S&P 500 Index:
Aug $825.00, Expires 8-24-09			1			1,206
Aug $850.00, Expires 8-24-09			1			787
Aug $900.00, Expires 8-24-09			––	*		604
TOTAL PUT OPTIONS - 1.56%					$	12,543
(Cost: $25,827)
SENIOR LOANS		Principal
Health Care Facilities - 0.03%
HCA Inc.,
2.848%, 11-18-13 (H)			$307			277
Service - Other - 0.09%
Education Management LLC,
2.375%, 6-1-13 (H)			777			713
Utilities - 0.04%
Energy Future Competitive Holdings Company and Texas       Competitive Electric Holdings Company, LLC:
3.810%, 10-10-14 (H)			3			2
3.821%, 10-10-14 (H)			443			317
						319
TOTAL SENIOR LOANS - 0.16%					$	1,309
(Cost: $1,150)
UNITED STATES GOVERNMENT AGENCY OBLIGATIONS
Agency Obligations - 0.99%
Federal Home Loan Mortgage Corporation,
2.125%, 3-16-11			4,900			4,939
Federal National Mortgage Association:
2.050%, 4-1-11			2,400			2,416
2.875%, 12-11-13			675			681
						8,036

Mortgage-Backed Obligations - 0.36%
Federal Home Loan Mortgage Corporation Agency       REMIC/CMO (Interest Only): (I)
5.500%, 9-15-17		3,744		314
5.000%, 11-15-17		314		23
5.000%, 4-15-19		659		53
5.000%, 4-15-19		319		23
5.000%, 7-15-21		79		––	*
5.000%, 11-15-22		322		23
5.500%, 3-15-23		630		64
5.000%, 4-15-23		92		1
5.000%, 5-15-23		576		45
5.000%, 8-15-23		448		38
5.500%, 11-15-23		176		1
5.500%, 11-15-23		101		––	*
5.000%, 9-15-24		352		5
5.500%, 9-15-24		150		2
5.500%, 4-15-25		129		9
5.500%, 4-15-25		134		3
5.000%, 9-15-25		555		9
5.500%, 10-15-25		1,417		194
5.000%, 4-15-26		801		22
5.000%, 10-15-28		459		27
5.500%, 2-15-30		330		17
5.000%, 8-15-30		610		31
5.500%, 3-15-31		535		39
6.000%, 11-15-35		771		76
Federal National Mortgage Association Agency REMIC/CMO       (Interest Only): (I)
5.500%, 11-25-17		231		3
5.000%, 5-25-22		339		20
5.000%, 7-25-23		1,814		200
5.000%, 8-25-23		548		45
5.000%, 11-25-23		669		64
5.500%, 9-25-25		79		1
5.500%, 11-25-25		223		1
5.000%, 9-25-30		723		32
5.500%, 6-25-33		769		86
5.500%, 8-25-33		1,100		131
5.500%, 4-25-34		1,707		208
5.500%, 11-25-36		2,188		282
Government National Mortgage Association Agency REMIC/CMO       (Interest Only): (I)
5.000%, 1-20-30		1,085		61
5.000%, 6-20-31		1,206		91
5.500%, 3-20-32		721		71
5.000%, 7-20-33		367		36
5.500%, 11-20-33		1,383		151
5.500%, 6-20-35		1,094		174
5.500%, 7-20-35		550		85
5.500%, 7-20-35		371		37
5.500%, 10-16-35		521		77
				2,875
TOTAL UNITED STATES GOVERNMENT AGENCY       OBLIGATIONS - 1.35%			$	10,911
(Cost: $12,289)
BULLION - 16.26%	Troy Ounces
Gold		141	$	131,057
(Cost: $110,543)

SHORT-TERM SECURITIES		Principal
Commercial Paper - 6.35%
Burlington Northern Santa Fe Corp.,
0.450%, 7-2-09		$	1,069		1,069
Clorox Co.,
0.450%, 7-24-09			5,000		4,999
Corporacion Andina de Fomento,
0.320%, 8-17-09			5,000		4,998
ITT Corporation,
1.450%, 7-24-09			1,000		999
Johnson & Johnson,
0.100%, 7-13-09			2,000		2,000
Kitty Hawk Funding Corp.:
0.280%, 7-20-09			5,000		4,999
0.260%, 7-27-09			5,000		4,999
Kraft Foods Inc.,
0.300%, 7-9-09			6,000		6,000
Procter & Gamble Company (The),
0.180%, 7-21-09			5,000		5,000
Roche Holdings, Inc.,
0.160%, 7-7-09			1,192		1,192
Straight-A Funding, LLC (Federal Financing Bank),
0.320%, 8-11-09	10,000				9,995
Unilever Capital Corporation,
0.160%, 7-9-09			5,000		5,000
					51,250
Treasury Bills - 1.06%
United States Treasury Bills,
0.950%, 7-30-09			8,525		8,518
United States Government Agency Obligations - 0.75%
Federal Home Loan Mortgage Corporation,
0.020%, 7-1-09			1,021		1,021
Federal National Mortgage Association,
0.090%, 7-22-09			5,000		5,000
					6,021
TOTAL SHORT-TERM SECURITIES - 8.16%				$	65,789
(Cost: $65,789)
TOTAL INVESTMENT SECURITIES - 99.80%				$	804,581
(Cost: $744,525)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.20%					1,620
NET ASSETS - 100.00%				$	806,201

Notes to Schedule of Investments

The following forward foreign currency contracts were outstanding at June 30, 2009:
	Type	Currency	Principal Amount of Contract (Denominated in Indicated Currency)		Settlement Date	Unrealized Appreciation		Unrealized Depreciation
	Buy	Australian Dollar		24,700	7-21-09		$928		$––
	Sell	Japanese Yen		753,801	7-21-09		46		––
	Sell	Japanese Yen		1,092,895	7-21-09		––		275
	Sell	Japanese Yen		726,640	8-3-09		83		––
	Sell	Japanese Yen		45,295	10-8-09		13		––
	Sell	Japanese Yen		70,007	10-8-09		––		11
	Sell	Japanese Yen		2,664,000	3-5-10		––		464
	Buy	Norwegian Krone		23,258	12-23-09		––		17
	Sell	Singapore Dollar		23,900	7-31-09		––		574
	Sell	Singapore Dollar		10,100	1-11-10		––		129
	Buy	Swedish Krona		58,600	8-3-09		––		34
	Sell	Swiss Franc		3,900	12-23-09		20		––
							$1,090		$1,504

*Not shown due to rounding.

(A)Listed on an exchange outside the United States.

(B)No dividends were paid during the preceding 12 months.

(C)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be liquid under guidelines established by the Board of Trustees. At June 30, 2009, the total value of these securities amounted to $23,904 or 2.96% of net assets.

(D)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be illiquid under guidelines established by the Board of Trustees. At June 30, 2009, the total value of these securities amounted to $10,837 or 1.34% of net assets.

(E)Illiquid restricted security. At June 30, 2009, the following restricted security was owned:

Security	Acquisition Dates	Shares	Cost	Market Value
Vietnam Azalea Fund Limited	6-14-07 to 1-28-09	300	$1,982		$1,122
The total value of this security represented approximately 0.14% of net assets at June 30, 2009.

(F)Deemed to be an affiliate due to the Portfolio owning at least 5% of the voting securities. The Portfolio and other mutual funds managed by its investment manager, Waddell & Reed Investment Management Company, or other related parties together own 30% of the outstanding shares of this security at June 30, 2009.

(G)Principal amounts or strike prices are denominated in the indicated foreign currency, where applicable (BRL - Brazilian Real, EUR - Euro and HKD - Hong Kong Dollar).

(H)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

(I)Amount shown in principal column represents notional amount for computation of interest.

The following acronyms are used throughout this schedule:
ADR = American Depositary Receipts
CMO = Collateralized Mortgage Obligation
REIT = Real Estate Investment Trust
REMIC = Real Estate Mortgage Investment Conduit

Country Diversification
(as a % of net assets)
	United States	30.74%
	China	17.10%
	United Kingdom	4.74%
	India	4.55%
	Taiwan	4.37%
	Hong Kong	3.15%
	France	2.83%
	Cayman Islands	1.49%
	South Korea	1.49%
	Brazil	1.23%
	Sweden	0.99%
	Switzerland	0.47%
	Bahamas	0.16%
	Vietnam	0.14%
	Poland	0.11%
	British Virgin Islands	0.10%
	Australia	0.09%
	Mexico	0.07%
	Other+	26.18%
	+Includes gold bullion, options, cash and cash equivalents and other assets and liabilities

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	745,235
Gross unrealized appreciation		83,698
Gross unrealized depreciation		(24,352	)
Net unrealized appreciation	$	59,346

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

Balanced

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Stocks	67.37%
Consumer Staples	13.57%
Information Technology	13.17%
Health Care	11.75%
Financials	9.72%
Industrials	6.43%
Consumer Discretionary	5.43%
Energy	4.05%
Telecommunication Services	1.65%
Utilities	1.60%
Bonds	32.18%
United States Government and Government Agency Obligations	20.50%
Corporate Debt Securities	11.68%
Cash and Cash Equivalents	0.45%

Top 10 Equity Holdings

Company	Sector
Exxon Mobil Corporation	Energy
Colgate-Palmolive Company	Consumer Staples
Johnson & Johnson	Health Care
Gilead Sciences, Inc.	Health Care
PepsiCo, Inc.	Consumer Staples
Cisco Systems, Inc.	Information Technology
QUALCOMM Incorporated	Information Technology
Abbott Laboratories	Health Care
General Dynamics Corporation	Industrials
Northern Trust Corporation	Financials
See your advisor for more information on the Portfolio's most recently published Top 10 Equity Holdings.

Bond Portfolio Characteristics

Average maturity	5.4 years
Effective duration	4.1 years
Weighted average bond rating	AA+

SCHEDULE OF INVESTMENTS

Balanced (in thousands)

JUNE 30, 2009 (UNAUDITED)

COMMON STOCKS	Shares		Value
Aerospace & Defense - 3.91%
General Dynamics Corporation		141	$	7,810
Lockheed Martin Corporation		72		5,807
				13,617
Air Freight & Logistics - 0.99%
Expeditors International of Washington, Inc.		103		3,437
Asset Management & Custody Banks - 2.05%
Northern Trust Corporation		133		7,118
Automobile Manufacturers - 0.54%
Ford Motor Company (A)		306		1,860
Biotechnology - 2.49%
Gilead Sciences, Inc. (A)		185		8,661
Casinos & Gaming - 0.58%
Wynn Resorts, Limited (A)		57		2,012
Communications Equipment - 5.49%
Cisco Systems, Inc. (A)		423		7,891
Nokia Corporation, Series A, ADR		229		3,333
QUALCOMM Incorporated		174		7,847
				19,071
Computer Hardware - 3.82%
Apple Inc. (A)		46		6,552
Hewlett-Packard Company		174		6,706
				13,258
Department Stores - 1.02%
Kohl's Corporation (A)		83		3,531
Distillers & Vintners - 1.10%
Brown-Forman Corporation, Class B		89		3,825
Electric Utilities - 1.60%
Exelon Corporation		109		5,572
Electrical Components & Equipment - 1.53%
Emerson Electric Co.		164		5,301
Footwear - 1.09%
NIKE, Inc., Class B		73		3,780
General Merchandise Stores - 0.77%
Target Corporation		68		2,684
Health Care Equipment - 0.81%
Zimmer Holdings, Inc. (A)		66		2,816
Health Care Supplies - 1.87%
DENTSPLY International Inc.		213		6,486
Home Entertainment Software - 0.42%
Activision Blizzard, Inc. (A)		115		1,452
Home Improvement Retail - 1.43%
Home Depot, Inc. (The)		212		5,010
Household Products - 2.69%
Colgate-Palmolive Company		132		9,331
Hypermarkets & Super Centers - 1.85%
Wal-Mart Stores, Inc.		133		6,438
Integrated Oil & Gas - 2.76%
Exxon Mobil Corporation		137		9,567
Integrated Telecommunication Services - 1.65%
AT&T Inc.		231		5,738
Oil & Gas Equipment & Services - 1.29%
Schlumberger Limited		83		4,491
Other Diversified Financial Services - 1.85%
JPMorgan Chase & Co.		188		6,426
Packaged Foods & Meats - 1.62%
Hershey Foods Corporation		156		5,623
Pharmaceuticals - 6.58%
Abbott Laboratories		166		7,818
Allergan, Inc.		85		4,035
Bristol-Myers Squibb Company		99		2,003
Johnson & Johnson		159		9,013
				22,869
Property & Casualty Insurance - 3.22%
Berkshire Hathaway Inc., Class B (A)		2		5,502
Travelers Companies, Inc. (The)		140		5,726
				11,228
Regional Banks - 1.12%
PNC Financial Services Group, Inc. (The)		100		3,881
Semiconductors - 1.79%
Microchip Technology Incorporated		276		6,217
Soft Drinks - 3.88%
Coca-Cola Company (The)		114		5,451
PepsiCo, Inc.		146		8,018
				13,469
Specialized Finance - 1.48%
CME Group Inc.		17		5,133
Systems Software - 1.65%
Microsoft Corporation		241		5,726
Tobacco - 2.43%
Lorillard, Inc.		62		4,202
Philip Morris International Inc.		97		4,235
				8,437
TOTAL COMMON STOCKS - 67.37%			$	234,065
(Cost: $210,067)

CORPORATE DEBT SECURITIES	Principal
Agricultural Products - 0.44%
Archer-Daniels-Midland Company,
7.000%, 2-1-31		$	1,350		1,514
Banking - 0.43%
JPMorgan Chase & Co.,
4.650%, 6-1-14			1,000		997
U.S. BANCORP,
4.200%, 5-15-14			500		506
					1,503
Beverage / Bottling - 0.15%
Anheuser-Busch InBev Worldwide Inc.,
5.375%, 11-15-14 (B)			500		505
Communications Equipment - 0.61%
Cisco Systems, Inc.,
5.250%, 2-22-11			2,000		2,109
Construction & Farm Machinery & Heavy Trucks - 0.23%
John Deere Capital Corporation,
5.250%, 10-1-12			750		792
Department Stores - 0.60%
Kohl's Corporation,
6.300%, 3-1-11			2,000		2,082
Distillers & Vintners - 0.58%
Diageo Capital plc,
4.375%, 5-3-10			2,000		2,029
Diversified Banks - 0.38%
Wells Fargo Bank, N.A.,
7.550%, 6-21-10			1,250		1,311
Electric - 0.49%
Hydro-Quebec,
8.000%, 2-1-13			1,500		1,703
Electric Utilities - 0.30%
Exelon Corporation,
6.950%, 6-15-11			1,000		1,059
Food Processors - 0.35%
Cargill, Inc.,
6.375%, 6-1-12 (B)			1,150		1,224
Food Retail - 0.61%
Kroger Co. (The),
6.200%, 6-15-12			2,000		2,139
Home Improvement Retail - 0.60%
Home Depot, Inc. (The),
5.200%, 3-1-11			2,000		2,070
Industrial Gases - 0.45%
Praxair, Inc.,
4.375%, 3-31-14			1,500		1,554
Industrial Machinery - 0.45%
Illinois Tool Works Inc.,
5.150%, 4-1-14 (B)			1,500		1,577
Integrated Oil & Gas - 0.60%
Chevron Corporation,
3.450%, 3-3-12			500		516
ConocoPhillips,
4.750%, 2-1-14			1,500		1,562
					2,078
Integrated Telecommunication Services - 0.30%
AT&T Inc.,
4.850%, 2-15-14			1,000		1,038
Life Insurance - 0.43%
Principal Life Global,
6.250%, 2-15-12 (B)			1,500		1,508
Metals / Mining - 0.74%
Newmont Mining Corporation, Convertible,
3.000%, 2-15-12			1,800		2,029
Rio Tinto Finance (USA) Limited,
8.950%, 5-1-14			500		556
					2,585
Oil & Gas Exploration & Production - 0.32%
XTO Energy Inc.,
7.500%, 4-15-12			1,000		1,108
Other Non-Agency REMIC/CMO - 0.01%
Banco Hipotecario Nacional:
7.916%, 7-25-09 (C)			17		––	*
8.000%, 3-31-11 (C)			68		1
Mellon Residential Funding,
6.750%, 6-25-28			32		28
					29
Packaged Foods & Meats - 0.45%
Unilever Capital Corporation,
5.900%, 11-15-32			1,450		1,553
Pharmaceuticals - 1.50%
Abbott Laboratories,
3.750%, 3-15-11			2,000		2,068
Pfizer Inc.,
4.450%, 3-15-12			1,500		1,574
Roche Holding Ltd,
5.000%, 3-1-14 (B)			1,500		1,570
					5,212
Property & Casualty Insurance - 0.15%
Berkshire Hathaway Finance Corporation,
4.000%, 4-15-12 (B)			500		517
Soft Drinks - 0.37%
Coca-Cola Enterprises Inc.,
6.700%, 10-15-36			500		528
PepsiCo, Inc.,
3.750%, 3-1-14			750		765
					1,293
Systems Software - 0.14%
Microsoft Corporation,
2.950%, 6-1-14			500		497
TOTAL CORPORATE DEBT SECURITIES - 11.68%				$	40,589
(Cost: $38,521)
UNITED STATES GOVERNMENT AGENCY OBLIGATIONS
Agency Obligations - 0.30%
Federal National Mortgage Association,
7.250%, 1-15-10			1,000		1,037
Mortgage-Backed Obligations - 3.28%
Federal National Mortgage Association Fixed Rate       Pass-Through Certificates:
6.000%, 9-1-17			376		399
5.000%, 1-1-18			305		320
5.500%, 4-1-18			89		94
5.000%, 5-1-18			140		146
4.500%, 7-1-18			2,036		2,111
7.000%, 9-1-25			79		87
6.500%, 10-1-28			269		290
6.500%, 2-1-29			176		190
7.500%, 4-1-31			169		185
7.000%, 7-1-31			244		269
7.000%, 9-1-31			239		263
7.000%, 9-1-31			188		207
7.000%, 11-1-31			54		59
6.500%, 2-1-32			872		940
7.000%, 2-1-32			292		321
7.000%, 2-1-32			270		297
7.000%, 3-1-32			183		202
7.000%, 7-1-32			427		470
6.000%, 9-1-32			1,679		1,771
6.000%, 2-1-33			410		432
5.500%, 5-1-33			731		758
5.500%, 5-1-33			507		526
5.500%, 5-1-33			305		317
5.500%, 6-1-33			564		585
Government National Mortgage Association Fixed Rate       Pass-Through Certificates:
6.000%, 8-15-28			25		26
6.500%, 8-15-28			35		38
United States Department of Veterans Affairs,       Guaranteed REMIC Pass-Through Certificates,       Vendee Mortgage Trust, 1997-A Class 3-A,
8.293%, 12-15-26			100		110
					11,413
TOTAL UNITED STATES GOVERNMENT AGENCY       OBLIGATIONS - 3.58%				$	12,450
(Cost: $11,992)

UNITED STATES GOVERNMENT OBLIGATIONS
Treasury Inflation Protected Obligations - 0.36%
United States Treasury Notes,
3.000%, 7-15-12 (D)	1,186				1,255
Treasury Obligations - 16.56%
United States Treasury Bonds:
7.500%, 11-15-16			1,500		1,913
7.250%, 8-15-22			4,000		5,253
6.250%, 8-15-23			5,250		6,392
5.250%, 2-15-29			1,150		1,292
United States Treasury Notes:
4.000%, 3-15-10			3,200		3,281
4.250%, 10-15-10		10,000			10,466
3.875%, 2-15-13			3,000		3,199
3.625%, 5-15-13			3,000		3,174
4.250%, 8-15-13			4,000		4,326
4.250%, 8-15-15		17,000			18,233
					57,529
TOTAL UNITED STATES GOVERNMENT       OBLIGATIONS - 16.92%				$	58,784
(Cost: $54,136)
SHORT-TERM SECURITIES
Commercial Paper - 0.10%
Kraft Foods Inc.,
0.290%, 7-10-09			368		368
Master Note - 0.01%
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (E)			25		25
TOTAL SHORT-TERM SECURITIES - 0.11%				$	393
(Cost: $393)
TOTAL INVESTMENT SECURITIES - 99.66%				$	346,281
(Cost: $315,109)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.34%					1,177
NET ASSETS - 100.00%				$	347,458

Notes to Schedule of Investments

*Not shown due to rounding.

(A)No dividends were paid during the preceding 12 months.

(B)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be liquid under guidelines established by the Board of Trustees. At June 30, 2009, the total value of these securities amounted to $6,901 or 1.99% of net assets.

(C)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be illiquid under guidelines established by the Board of Trustees. At June 30, 2009, the total value of these securities amounted to $1 or 0.00% of net assets.

(D)The interest rate for this security is a stated rate, but the interest payments are determined by multiplying the inflation-adjusted principal by one half of the stated rate for each semiannual interest payment date.

(E) Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

The following acronyms are used throughout this schedule:
ADR = American Depositary Receipts
CMO = Collateralized Mortgage Obligation
REMIC = Real Estate Mortgage Investment Conduit

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	315,102
Gross unrealized appreciation		43,561
Gross unrealized depreciation		(12,382	)
Net unrealized appreciation	$	31,179

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

Bond

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Bonds	95.34%
Corporate Debt Securities	49.24%
United States Government and Government             Agency Obligations	44.86%
Other Government Securities	0.88%
Municipal Bonds - Taxable	0.36%
Cash and Cash Equivalents	4.66%

Bond Portfolio Characteristics

Average maturity	5.0 years
Effective duration	3.8 years
Weighted average bond rating	AA

Quality Weightings

Investment Grade	93.45%
AAA	56.30%
AA	6.31%
A	18.77%
BBB	12.07%
Non-Investment Grade	1.89%
BB	1.14%
B	0.10%
Below B	0.65%
Cash and Cash Equivalents	4.66%
Ratings reflected in the wheel are taken from the following sources in order of preference: Standard & Poor's, Moody's or management's internal ratings, where no other ratings are available.

SCHEDULE OF INVESTMENTS

Bond (in thousands)

JUNE 30, 2009 (UNAUDITED)

CORPORATE DEBT SECURITIES	Principal			Value
Aerospace & Defense - 0.91%
United Technologies Corporation,
6.125%, 2-1-19		$	3,000	$	3,319
Air Freight & Logistics - 0.44%
FedEx Corporation,
7.375%, 1-15-14			1,500		1,621
Banking - 3.80%
JPMorgan Chase & Co.:
4.650%, 6-1-14			3,000		2,993
6.000%, 1-15-18			3,000		2,980
Sovereign Bank (Federal Deposit Insurance Corporation),
2.750%, 1-17-12 (A)			5,000		5,067
U.S. BANCORP,
4.200%, 5-15-14			3,000		3,035
					14,075
Beverage / Bottling - 0.96%
Anheuser-Busch InBev Worldwide Inc.,
5.375%, 11-15-14 (B)			3,500		3,533
Biotechnology - 0.52%
Amgen Inc.:
6.150%, 6-1-18			1,000		1,087
5.700%, 2-1-19			800		844
					1,931
Building Products - 0.65%
Hanson PLC,
7.875%, 9-27-10			2,500		2,413
Cable & Satellite - 0.20%
EchoStar DBS Corporation,
6.375%, 10-1-11			750		728
Cable / Media - 0.79%
Comcast Cable Communications, Inc.,
8.500%, 5-1-27			1,250		1,304
Walt Disney Company (The),
4.700%, 12-1-12			1,500		1,612
					2,916
CMBS Other - 2.46%
COMM 2005-C6,
5.144%, 6-10-  44			6,000		5,534
J.P. Morgan Chase Commercial Mortgage Securities Corp.,       Commercial Mortgage Pass-Through Certificates,       Series 2004-C1,
4.719%, 1-15-38			2,000		1,737
Merrill Lynch Mortgage Trust 2005-CIP1,
4.949%, 7-12-38 (C)			2,000		1,809
					9,080
Coal & Consumable Fuels - 0.27%
Peabody Energy Corporation,
6.875%, 3-15-13			1,000		990
Computer Hardware - 1.68%
Hewlett-Packard Company:
6.500%, 7-1-12			3,000		3,301
4.750%, 6-2-14			500		522
International Business Machines Corporation,
7.625%, 10-15-18			2,000		2,391
					6,214
Conglomerate / Diversified Mfg - 0.75%
Honeywell International Inc.,
5.000%, 2-15-19			2,225		2,273
Westinghouse Electric Corporation,
8.875%, 6-14-14			500		501
					2,774
Consumer Finance - 0.97%
American Express Travel Related Services Co., Inc.,
5.250%, 11-21-11 (D)			3,600		3,579
Diversified Banks - 0.42%
Wells Fargo Financial, Inc.,
5.500%, 8-1-12			1,500		1,560
Diversified Chemicals - 1.92%
E.I. du Pont de Nemours and Company:
5.000%, 1-15-13			2,000		2,103
5.750%, 3-15-19			4,725		4,987
					7,090
Diversified Metals & Mining - 1.02%
BHP Billiton Finance (USA) Limited:
5.000%, 12-15-10			1,030		1,071
5.500%, 4-1-14			2,500		2,683
					3,754
Electric - 2.13%
HQI Transelec Chile S.A.,
7.875%, 4-15-11			750		781
NorthWestern Corporation,
6.340%, 4-1-19 (D)			3,000		3,148
PacifiCorp,
5.500%, 1-15-19			1,000		1,057
Pepco Holdings, Inc.,
4.000%, 5-15-10			750		751
Southern Power Company,
6.250%, 7-15-12			2,000		2,141
					7,878
Electrical Components & Equipment - 0.68%
Emerson Electric Co.,
4.875%, 10-15-19			2,500		2,501
Finance - Other - 2.19%
CHYPS CBO 1997-1 Ltd.,
6.720%, 1-15-10 (D)			146		––	*
General Electric Capital Corporation:
1.259%, 4-10-12 (C)			2,000		1,869
5.250%, 10-19-12			1,750		1,799
5.625%, 5-1-18			2,000		1,893
Student Loan Marketing Association,
0.000%, 10-3-22 (E)			3,000		1,456
TIAA Global Markets, Inc.,
5.125%, 10-10-12 (B)			1,000		1,046
					8,063
Finance Companies - 0.14%
ISA Capital do Brasil S.A.,
7.875%, 1-30-12 (B)			500		515
Food Processors - 0.27%
Campbell Soup Company,
4.500%, 2-15-19			1,000		983
Gas - Local Distribution - 0.83%
AGL Capital Corporation,
7.125%, 1-14-11			3,000		3,080
Gas Pipe Lines - 1.61%
Maritimes & Northeast Pipeline, L.L.C.,
7.500%, 5-31-14 (D)			4,000		3,993
Tennessee Gas Pipeline Company,
7.000%, 3-15-27			2,000		1,908
					5,901
Health Care Facilities - 0.10%
HCA - The Healthcare Company,
8.750%, 9-1-10			381		382
Household Appliances - 0.26%
Controladora Mabe, S.A. de C.V.,
6.500%, 12-15-15 (D)			1,000		941
Household Products - 1.54%
Procter & Gamble Company (The):
4.950%, 8-15-14			3,000		3,213
8.000%, 9-1-24			2,000		2,475
					5,688
Hypermarkets & Super Centers - 0.80%
Wal-Mart Stores, Inc.,
3.000%, 2-3-14			3,000		2,961
Industrial Machinery - 0.85%
Illinois Tool Works Inc.,
5.150%, 4-1-14 (B)			3,000		3,154
Information / Data Technology - 0.29%
IBM International Group Capital LLC,
5.050%, 10-22-12			1,000		1,071
Integrated Telecommunication Services - 1.12%
AT&T Inc.:
4.950%, 1-15-13			750		780
5.800%, 2-15-19			1,500		1,523
AT&T Wireless Services, Inc.,
7.875%, 3-1-11			1,700		1,834
					4,137
Investment Banking & Brokerage - 1.12%
Morgan Stanley (Federal Deposit Insurance Corporation),
3.250%, 12-1-11 (A)			4,000		4,150
Metals / Mining - 1.51%
Rio Tinto Finance (USA) Limited,
8.950%, 5-1-14			5,000		5,558
Multi-Utilities - 0.96%
Dominion Resources, Inc.,
5.250%, 8-1-33			2,500		2,452
Duke Energy Corporation,
6.250%, 1-15-12			1,000		1,076
					3,528
Oil & Gas - 0.58%
Sunoco Logistics Partners Operations L.P.,
8.750%, 2-15-14			2,000		2,149
Oil & Gas Equipment & Services - 0.78%
Halliburton Company:
6.150%, 9-15-19			1,375		1,489
6.750%, 2-1-27			1,400		1,401
					2,890
Oilfield Machinery & Service - 0.99%
Weatherford International, Inc.,
5.950%, 6-15-12			3,500		3,655
Other Mortgage-Backed Securities - 0.64%
Banc of America Commercial Mortgage Inc., Commercial       Mortgage Pass-Through Certificates, Series 2005-2,
4.783%, 7-10-43 (C)			2,500		2,354
Other Non-Agency REMIC/CMO - 2.94%
Countrywide Home Loans Mortgage Pass-Through Trust 2005-28,
5.250%, 1-25-19			2,520		1,624
Countrywide Home Loans Mortgage Trust 2005-J4,
5.500%, 11-25-35			1,750		1,024
First Horizon Alternative Mortgage Securities Trust 2005-FA6,
5.500%, 9-25-35			2,265		1,401
GSR Mortgage Loan Trust 2004-2F,
7.000%, 1-25-34			769		719
MASTR Adjustable Rate Mortgages Trust 2005-1,
5.144%, 3-25-35 (C)			2,736		273
Structured Adjustable Rate Mortgage Loan Trust, Mortgage       Pass-Through Certificates, Series 2004-1,
4.813%, 2-25-34 (C)			774		390
Structured Adjustable Rate Mortgage Loan Trust, Mortgage       Pass-Through Certificates, Series 2004-12,
4.925%, 9-25-34 (C)			2,179		131
Structured Adjustable Rate Mortgage Loan Trust, Mortgage       Pass-Through Certificates, Series 2004-18,
4.988%, 12-25-34 (C)			3,077		154
Structured Adjustable Rate Mortgage Loan Trust, Mortgage       Pass-Through Certificates, Series 2004-3AC,
4.328%, 3-25-34 (C)			1,287		409
Structured Adjustable Rate Mortgage Loan Trust, Mortgage       Pass-Through Certificates, Series 2004-5,
4.058%, 5-25-34 (C)			1,461		132
Structured Adjustable Rate Mortgage Loan Trust, Mortgage       Pass-Through Certificates, Series 2005-21,
5.668%, 11-25-35 (C)			1,231		31
Structured Adjustable Rate Mortgage Loan Trust,       Series 2005-22,
5.526%, 12-25-35 (C)			1,269		51
Structured Adjustable Rate Mortgage Loan Trust,       Series 2006-1,
5.949%, 2-25-36 (C)			753		5
Structured Asset Securities Corporation Trust 2005-16,
5.500%, 9-25-35			3,000		2,072
Wells Fargo Mortgage Pass-Through Certificates,       Series 2003-10,
4.500%, 9-25-18			2,500		2,422
					10,838
Paper / Forest Products - 0.07%
Westvaco Corporation,
7.500%, 6-15-27			309		273
Pharmaceuticals - 2.72%
Abbott Laboratories:
3.750%, 3-15-11			2,000		2,068
5.600%, 5-15-11			1,000		1,069
GlaxoSmithKline Capital Inc.,
5.650%, 5-15-18			2,500		2,647
Johnson & Johnson,
5.150%, 7-15-18			2,000		2,131
Roche Holding Ltd,
5.000%, 3-1-14 (B)			2,000		2,093
					10,008
Property & Casualty Insurance - 2.13%
Berkshire Hathaway Finance Corporation:
4.000%, 4-15-12 (B)			3,000		3,101
4.750%, 5-15-12			2,000		2,124
5.000%, 8-15-13			2,500		2,624
					7,849
Soft Drinks - 0.65%
Coca-Cola Company (The),
5.350%, 11-15-17			2,250		2,403
Telecommunications - 3.04%
British Telecommunications plc,
5.150%, 1-15-13			3,500		3,489
Deutsche Telekom International Finance B.V.,
4.875%, 7-8-14			5,000		5,033
New York Telephone Company,
6.700%, 11-1-23			750		680
Pacific Bell,
7.250%, 11-1-27			750		752
Telecom Italia Capital,
6.999%, 6-4-18			1,250		1,264
					11,218
Utilities - Water - 0.54%
California Water Service Company,
5.875%, 5-1-19			2,000		1,978
TOTAL CORPORATE DEBT SECURITIES - 49.24%				$	181,683
(Cost: $193,528)
MUNICIPAL BONDS - TAXABLE - 0.36%
Massachusetts
Massachusetts Health and Educational Facilities Authority,       Revenue Bonds, Harvard University Issue, Series C (2008),
5.260%, 10-1-18			1,250	$	1,321
(Cost: $1,250)
OTHER GOVERNMENT SECURITIES
Brazil - 0.15%
Federative Republic of Brazil (The),
9.250%, 10-22-10			500		548
Canada - 0.46%
Province de Quebec,
7.140%, 2-27-26			1,500		1,674
Supranational - 0.27%
Inter-American Development Bank,
8.400%, 9-1-09			1,000		1,012
TOTAL OTHER GOVERNMENT SECURITIES - 0.88%				$	3,234
(Cost: $3,058)
UNITED STATES GOVERNMENT       AGENCY OBLIGATIONS
Agency Obligations - 6.89%
Federal Agricultural Mortgage Corporation Guaranteed Notes       Trust 2006-1,
4.875%, 1-14-11 (B)			7,500		7,843
Federal Farm Credit Bank:
4.350%, 9-2-14			4,400		4,684
5.200%, 11-28-16			5,000		5,434
4.600%, 1-29-20			2,500		2,428
Federal Home Loan Mortgage Corporation,
5.000%, 12-14-18			2,554		2,425
Federal National Mortgage Association,
4.000%, 1-18-13			2,500		2,602
					25,416
Mortgage-Backed Obligations - 29.05%
Federal Home Loan Mortgage Corporation Adjustable       Rate Participation Certificates,
5.468%, 12-1-36 (C)			1,762		1,846

Federal Home Loan Mortgage Corporation Agency       REMIC/CMO:
4.000%, 5-15-16	724		743
5.000%, 5-15-19	1,000		1,060
5.000%, 7-15-19	868		875
5.000%, 5-15-23	1,500		1,540
5.000%, 3-15-25	4,000		4,077
7.500%, 9-15-29	403		436
4.250%, 3-15-31	565		573
5.000%, 5-15-31	2,780		2,853
5.500%, 9-15-31	2,698		2,768
5.000%, 9-15-32	1,500		1,564
5.500%, 5-15-34	602		635
Federal Home Loan Mortgage Corporation Agency       REMIC/CMO (Interest Only): (F)
5.500%, 12-15-13	658		29
5.500%, 4-15-24	35		––	*
5.500%, 4-15-24	171		––	*
5.000%, 6-15-24	521		11
5.000%, 7-15-29	975		57
5.000%, 9-15-31	1,857		176
5.500%, 10-15-31	2,125		218
Federal Home Loan Mortgage Corporation Fixed Rate       Participation Certificates:
4.000%, 6-1-14	696		708
4.500%, 1-1-18	666		690
4.500%, 4-1-18	697		717
4.500%, 3-1-19	979		1,006
4.500%, 10-1-20	2,810		2,913
5.000%, 6-1-21	1,207		1,256
6.000%, 9-1-21	1,112		1,178
5.000%, 11-1-21	1,632		1,695
5.500%, 3-1-22	678		711
5.500%, 6-1-22	643		673
6.000%, 8-1-22	1,985		2,102
5.000%, 7-1-25	1,803		1,854
6.000%, 2-1-27	1,793		1,886
5.000%, 3-1-35	1,274		1,300
5.500%, 10-1-35	985		1,020
5.500%, 8-1-36	1,435		1,484
Federal National Mortgage Association Adjustable Rate       Pass-Through Certificates,
5.361%, 12-1-36 (C)	1,132		1,173
Federal National Mortgage Association Agency       REMIC/CMO:
5.000%, 3-25-18	3,500		3,709
5.000%, 6-25-18	2,173		2,304
5.000%, 9-25-18	500		523
5.000%, 3-25-29	5,100		5,276
5.500%, 2-25-32	1,500		1,536
5.500%, 10-25-32	3,500		3,608
4.000%, 11-25-32	469		470
4.000%, 3-25-33	467		469
3.500%, 8-25-33	1,097		1,065
4.500%, 12-25-34	1,825		1,860
Federal National Mortgage Association Agency       REMIC/CMO (Interest Only): (F)
5.000%, 3-25-18	220		4
5.500%, 1-25-33	1,708		189
5.500%, 11-25-36	8,596		1,110
5.500%, 8-25-37	3,153		376
Federal National Mortgage Association Fixed Rate       Participation Certificates (Interest Only), (F)
5.750%, 8-25-32	1,299		83
Federal National Mortgage Association Fixed Rate       Pass-Through Certificates:
5.500%, 1-1-17	516		545
5.000%, 3-1-18	1,332		1,395
5.000%, 3-1-18	656		687
4.000%, 11-1-18	818		836
4.500%, 6-1-19	2,314		2,396
4.500%, 8-1-19	3,164		3,275
5.000%, 12-1-19	2,108		2,200
5.000%, 6-1-20	670		698
5.500%, 11-1-22	2,769		2,919
5.500%, 10-1-23	530		555
5.000%, 4-1-24	1,837		1,884
4.500%, 7-25-24	1,000		1,007
5.000%, 5-1-28	3,830		3,924
5.500%, 9-25-31	1,000		1,037
5.000%, 6-25-32	5,000		5,179
5.500%, 2-1-33	2,306		2,394
6.000%, 4-1-33	773		815
5.500%, 6-1-33	1,633		1,694
5.000%, 9-1-33	3,234		3,306
5.000%, 5-1-35	1,604		1,638
6.500%, 11-1-37	793		843
5.500%, 1-25-39	756		778
Government National Mortgage Association Agency       REMIC/CMO,
4.585%, 8-16-34	2,000		2,062
Government National Mortgage Association Agency       REMIC/CMO (Interest Only): (F)
5.000%, 7-16-22	1,170		121
5.500%, 6-20-28	553		5
Government National Mortgage Association Fixed Rate       Pass-Through Certificates,
5.000%, 12-15-17	441		464
United States Department of Veterans Affairs,       Guaranteed REMIC Pass-Through Certificates,       Vendee Mortgage Trust, 2003-2 Class E,
5.000%, 12-15-25	131		130
			107,196
TOTAL UNITED STATES GOVERNMENT       AGENCY OBLIGATIONS - 35.94%		$	132,612
(Cost: $129,343)
UNITED STATES GOVERNMENT OBLIGATIONS - 8.92%
Treasury Obligations
United States Treasury Bond Principal STRIPS,
0.000%, 11-15-21 (E)	3,050		1,769
United States Treasury Bonds:
8.000%, 11-15-21	1,000		1,380
6.125%, 11-15-27	5,000		6,155
United States Treasury Notes:
4.125%, 8-31-12	7,000		7,521
4.250%, 8-15-13	8,950		9,679
4.000%, 2-15-14	6,000		6,424
(Cost: $31,425)		$	32,928

SHORT-TERM SECURITIES
Commercial Paper - 3.17%
Clorox Co.,
0.500%, 7-20-09	2,000		1,999
General Mills, Inc.,
0.400%, 7-15-09	3,000		3,000
Praxair Inc.,
0.170%, 7-2-09	1,504		1,504
Straight-A Funding, LLC (Federal Financing Bank):
0.260%, 7-10-09	2,000		2,000
0.260%, 7-24-09	1,686		1,686
Unilever Capital Corporation,
0.100%, 7-9-09	1,500		1,500
			11,689
Master Note - 1.38%
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (C)	5,089		5,089
TOTAL SHORT-TERM SECURITIES - 4.55%		$	16,778
(Cost: $16,778)
TOTAL INVESTMENT SECURITIES - 99.89%		$	368,556
(Cost: $375,382)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.11%			415
NET ASSETS - 100.00%		$	368,971

Notes to Schedule of Investments

*Not shown due to rounding.

(A)Security is fully guaranteed by the Federal Deposit Insurance Corporation for both interest and principal under the Debt Guarantee Program of the Temporary Liquidity Guarantee Program.

(B)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be liquid under guidelines established by the Board of Trustees. At June 30, 2009, the total value of these securities amounted to $21,285 or 5.77% of net assets.

(C)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

(D)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be illiquid under guidelines established by the Board of Trustees. At June 30, 2009, the total value of these securities amounted to $11,661 or 3.16% of net assets.

(E)Zero coupon bond.

(F)Amount shown in principal column represents notional amount for computation of interest.

The following acronyms are used throughout this schedule:
CMBS = Collateralized Mortgage-Backed Securities
CMO = Collateralized Mortgage Obligation
REMIC = Real Estate Mortgage Investment Conduit
STRIPS = Separate Trading of Registered Interest and Principal Securities

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	375,345
Gross unrealized appreciation		13,160
Gross unrealized depreciation		(19,949	)
Net unrealized depreciation	$	(6,789	)

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

Core Equity

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Stocks	98.21%
Information Technology	21.23%
Financials	17.55%
Consumer Staples	14.91%
Energy	12.59%
Consumer Discretionary	10.56%
Health Care	7.54%
Industrials	7.34%
Materials	5.96%
Telecommunication Services	0.53%
Cash and Cash Equivalents	1.79%

Top 10 Equity Holdings

Company	Sector
Hewlett-Packard Company	Information Technology
QUALCOMM Incorporated	Information Technology
Lorillard, Inc.	Consumer Staples
Union Pacific Corporation	Industrials
XTO Energy Inc.	Energy
Coca-Cola Company (The)	Consumer Staples
Amgen Inc.	Health Care
Weatherford International Ltd.	Energy
Bank of America Corporation	Financials
JPMorgan Chase & Co.	Financials
See your advisor for more information on the Portfolio's most recently published Top 10 Equity Holdings.

SCHEDULE OF INVESTMENTS

Core Equity (in thousands)

JUNE 30, 2009 (UNAUDITED)

COMMON STOCKS	Shares		Value
Advertising - 1.81%
Omnicom Group Inc.		214	$	6,742
Aerospace & Defense - 1.12%
Lockheed Martin Corporation		52		4,178
Application Software - 2.75%
SAP Aktiengesellschaft, ADR		255		10,248
Biotechnology - 3.04%
Amgen Inc. (A)		214		11,345
Brewers - 2.67%
Molson Coors Brewing Company, Class B		235		9,952
Communications Equipment - 7.05%
Juniper Networks, Inc. (A)		262		6,186
QUALCOMM Incorporated		323		14,594
Telefonaktiebolaget LM Ericsson, ADR		566		5,535
				26,315
Computer Hardware - 6.59%
Apple Inc. (A)		62		8,816
Hewlett-Packard Company		408		15,754
				24,570
Construction & Farm Machinery & Heavy Trucks - 0.79%
PACCAR Inc		91		2,942
Consumer Finance - 3.25%
American Express Company		125		2,914
Capital One Financial Corporation		420		9,191
				12,105
Data Processing & Outsourced Services - 0.25%
Visa Inc., Class A		15		928
Department Stores - 4.38%
Kohl's Corporation (A)		119		5,066
Macy's Inc.		646		7,602
Nordstrom, Inc.		184		3,668
				16,336
Diversified Banks - 2.80%
Wells Fargo & Company		431		10,454
Diversified Chemicals - 1.03%
PPG Industries, Inc.		87		3,828
Fertilizers & Agricultural Chemicals - 0.86%
Monsanto Company		43		3,197
General Merchandise Stores - 1.65%
Target Corporation		156		6,153
Health Care Equipment - 3.43%
Baxter International Inc.		173		9,136
Stryker Corporation		91		3,624
				12,760
Home Improvement Retail - 1.84%
Home Depot, Inc. (The)		291		6,865
Hypermarkets & Super Centers - 3.49%
Costco Wholesale Corporation		222		10,150
Wal-Mart Stores, Inc.		59		2,853
				13,003
Industrial Gases - 4.07%
Air Products and Chemicals, Inc.		122		7,908
Praxair, Inc.		102		7,278
				15,186
Industrial Machinery - 1.88%
Parker Hannifin Corporation		163		7,007
Integrated Oil & Gas - 2.56%
Exxon Mobil Corporation		56		3,948
Suncor Energy Inc.		185		5,601
				9,549
Integrated Telecommunication Services - 0.53%
AT&T Inc.		80		1,995
Internet Retail - 0.88%
Amazon.com, Inc. (A)		39		3,279
Investment Banking & Brokerage - 2.49%
Charles Schwab Corporation (The)		530		9,294
Oil & Gas Equipment & Services - 5.03%
Schlumberger Limited		63		3,425
Smith International, Inc.		169		4,357
Weatherford International Ltd. (A)		562		10,983
				18,765
Oil & Gas Exploration & Production - 5.00%
Noble Energy, Inc.		98		5,761
XTO Energy Inc.		338		12,896
				18,657
Other Diversified Financial Services - 5.76%
Bank of America Corporation		816		10,777
JPMorgan Chase & Co.		314		10,693
				21,470
Pharmaceuticals - 1.07%
Teva Pharmaceutical Industries Limited, ADR		81		4,006
Railroads - 3.55%
Union Pacific Corporation		255		13,264
Semiconductor Equipment - 2.13%
Applied Materials, Inc.		726		7,960
Semiconductors - 2.46%
Microchip Technology Incorporated		407		9,171
Soft Drinks - 3.20%
Coca-Cola Company (The)		249		11,945
Specialized Finance - 3.25%
CME Group Inc.		27		8,338
IntercontinentalExchange, Inc. (A)		33		3,793
				12,131
Tobacco - 5.55%
Lorillard, Inc.		210		14,239
Philip Morris International Inc.		148		6,464
				20,703
TOTAL COMMON STOCKS - 98.21%			$	366,303
(Cost: $372,484)

SHORT-TERM SECURITIES	Principal
Commercial Paper - 1.89%
Roche Holdings, Inc.,
0.190%, 7-9-09		$	5,000		5,000
Total Capital SA,
0.080%, 7-1-09			2,021		2,021
					7,021
Master Note - 0.06%
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (B)			242		242
TOTAL SHORT-TERM SECURITIES - 1.95%				$	7,263
(Cost: $7,263)
TOTAL INVESTMENT SECURITIES - 100.16%				$	373,566
(Cost: $379,747)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.16%)					(592	)
NET ASSETS - 100.00%				$	372,974

Notes to Schedule of Investments

(A)No dividends were paid during the preceding 12 months.

(B)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

The following acronym is used throughout this schedule:
ADR = American Depositary Receipts

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	380,455
Gross unrealized appreciation		25,007
Gross unrealized depreciation		(31,896	)
Net unrealized depreciation	$	(6,889	)

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

Dividend Opportunities

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Stocks	88.28%
Energy	19.36%
Consumer Staples	18.64%
Industrials	13.46%
Information Technology	11.35%
Financials	6.32%
Materials	6.18%
Health Care	5.55%
Consumer Discretionary	4.60%
Telecommunication Services	1.76%
Utilities	1.06%
Cash and Cash Equivalents	11.72%

Top 10 Equity Holdings

Company	Sector
Colgate-Palmolive Company	Consumer Staples
Exxon Mobil Corporation	Energy
Abbott Laboratories	Health Care
Microchip Technology Incorporated	Information Technology
Philip Morris International Inc.	Consumer Staples
Lorillard, Inc.	Consumer Staples
Schlumberger Limited	Energy
Fluor Corporation	Industrials
QUALCOMM Incorporated	Information Technology
Deere & Company	Industrials
See your advisor for more information on the Portfolio's most recently published Top 10 Equity Holdings.

SCHEDULE OF INVESTMENTS

Dividend Opportunities (in thousands)

JUNE 30, 2009 (UNAUDITED)

COMMON STOCKS	Shares		Value
Aerospace & Defense - 2.83%
Lockheed Martin Corporation		15	$	1,202
Raytheon Company		75		3,334
				4,536
Asset Management & Custody Banks - 0.74%
AllianceBernstein Holding L.P.		59		1,193
Brewers - 1.28%
Molson Coors Brewing Company, Class B		49		2,061
Communications Equipment - 4.62%
Consolidated Communications Holdings, Inc.		127		1,490
Nokia Corporation, Series A, ADR		144		2,098
QUALCOMM Incorporated		85		3,822
				7,410
Computer Hardware - 1.48%
Hewlett-Packard Company		62		2,377
Construction & Engineering - 2.42%
Fluor Corporation		76		3,886
Construction & Farm Machinery & Heavy Trucks - 2.34%
Deere & Company		94		3,752
Data Processing & Outsourced Services - 0.71%
Visa Inc., Class A		18		1,133
Department Stores - 0.91%
Macy's Inc.		125		1,465
Distillers & Vintners - 1.65%
Diageo plc, ADR		46		2,640
Diversified Banks - 0.86%
U.S. Bancorp		77		1,375
Diversified Metals & Mining - 1.60%
Rio Tinto plc, ADR		16		2,565
Electrical Components & Equipment - 1.45%
Emerson Electric Co.		72		2,330
Fertilizers & Agricultural Chemicals - 1.93%
Monsanto Company		42		3,096
Health Care Equipment - 2.38%
Baxter International Inc.		12		641
Medtronic, Inc.		71		2,486
Stryker Corporation		17		691
				3,818
Home Improvement Retail - 0.47%
Lowe's Companies, Inc.		39		755
Homebuilding - 0.83%
D.R. Horton, Inc.		142		1,326
Hotels, Resorts & Cruise Lines - 0.66%
Starwood Hotels & Resorts Worldwide, Inc.		47		1,052
Household Products - 4.62%
Colgate-Palmolive Company		83		5,897
Procter & Gamble Company (The)		30		1,511
				7,408
Hypermarkets & Super Centers - 1.29%
Wal-Mart Stores, Inc.		43		2,073
Industrial Gases - 1.49%
Air Products and Chemicals, Inc.		37		2,388
Industrial Machinery - 1.04%
Illinois Tool Works Inc.		45		1,671
Integrated Oil & Gas - 5.08%
BP p.l.c., ADR		49		2,343
Exxon Mobil Corporation		83		5,803
				8,146
Integrated Telecommunication Services - 1.76%
AT&T Inc.		87		2,154
Iowa Telecommunications Services, Inc.		53		669
				2,823
Multi-Utilities - 1.06%
Dominion Resources, Inc.		51		1,701
Oil & Gas Equipment & Services - 8.01%
Halliburton Company		121		2,505
National Oilwell Varco, Inc. (A)		64		2,075
Schlumberger Limited		89		4,800
Smith International, Inc.		57		1,460
Weatherford International Ltd. (A)		101		1,985
				12,825
Oil & Gas Exploration & Production - 3.00%
Apache Corporation		37		2,649
XTO Energy Inc.		57		2,170
				4,819
Oil & Gas Storage & Transportation - 3.27%
El Paso Pipeline Partners, L.P.		105		1,848
Enbridge Inc.		42		1,455
NuStar GP Holdings, LLC		84		1,942
				5,245
Other Diversified Financial Services - 1.28%
JPMorgan Chase & Co.		60		2,045
Pharmaceuticals - 3.17%
Abbott Laboratories		108		5,090
Property & Casualty Insurance - 1.83%
ACE Limited		34		1,513
Travelers Companies, Inc. (The)		35		1,426
				2,939
Railroads - 3.38%
Burlington Northern Santa Fe Corporation		26		1,933
Union Pacific Corporation		67		3,487
				5,420
Restaurants - 1.73%
McDonald's Corporation		48		2,784
Semiconductors - 3.04%
Microchip Technology Incorporated		216		4,881
Soft Drinks - 2.91%
Coca-Cola Company (The)		34		1,622
PepsiCo, Inc.		55		3,047
				4,669
Specialized Finance - 1.61%
CME Group Inc.		8		2,589
Steel - 1.16%
Nucor Corporation		42		1,857
Systems Software - 1.50%
Microsoft Corporation		101		2,410
Tobacco - 6.89%
Altria Group, Inc.		82		1,341
Lorillard, Inc.		71		4,830
Philip Morris International Inc.		112		4,877
				11,048
TOTAL COMMON STOCKS - 88.28%			$	141,601
(Cost: $152,764)

SHORT-TERM SECURITIES	Principal
Commercial Paper - 10.52%
American Honda Finance Corp.,
0.400%, 7-9-09	$	1,500	1,500
General Mills, Inc.:
0.400%, 7-9-09		4,500	4,499
0.450%, 7-10-09		2,000	2,000
Kraft Foods Inc.,
0.350%, 7-16-09		2,320	2,320
McCormick & Co. Inc.,
0.250%, 7-1-09		2,553	2,553
Total Capital SA,
0.080%, 7-1-09		1,500	1,500
Unilever Capital Corporation,
0.100%, 7-9-09		2,500	2,500
			16,872

Master Note - 0.80%
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (B)	1,280		1,280
TOTAL SHORT-TERM SECURITIES - 11.32%		$	18,152
(Cost: $18,152)
TOTAL INVESTMENT SECURITIES - 99.60%		$	159,753
(Cost: $170,916)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.40%			638
NET ASSETS - 100.00%		$	160,391

Notes to Schedule of Investments

(A)No dividends were paid during the preceding 12 months.

(B)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

The following acronym is used throughout this schedule:
ADR = American Depositary Receipts

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	170,950
Gross unrealized appreciation		3,498
Gross unrealized depreciation		(14,695	)
Net unrealized depreciation	$	(11,197	)

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

Energy

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Stocks	90.58%
Energy	78.37%
Industrials	7.15%
Utilities	3.23%
Information Technology	1.24%
Materials	0.59%
Cash and Cash Equivalents	9.42%

Top 10 Equity Holdings

Company	Sector	Industry
Southwestern Energy Company	Energy	Oil & Gas Exploration & Production
Exxon Mobil Corporation	Energy	Integrated Oil & Gas
Schlumberger Limited	Energy	Oil & Gas Equipment & Services
National Oilwell Varco, Inc.	Energy	Oil & Gas Equipment & Services
Fluor Corporation	Industrials	Construction & Engineering
Occidental Petroleum Corporation	Energy	Integrated Oil & Gas
Weatherford International Ltd.	Energy	Oil & Gas Equipment & Services
Apache Corporation	Energy	Oil & Gas Exploration & Production
Helmerich & Payne, Inc.	Energy	Oil & Gas Drilling
Halliburton Company	Energy	Oil & Gas Equipment & Services
See your advisor for more information on the Portfolio's most recently published Top 10 Equity Holdings.

SCHEDULE OF INVESTMENTS

Energy (in thousands)

JUNE 30, 2009 (UNAUDITED)

COMMON STOCKS	Shares		Value
Coal & Consumable Fuels - 3.28%
Arch Coal, Inc.		8	$	126
Cameco Corporation		5		140
CONSOL Energy Inc.		5		155
Foundation Coal Holdings, Inc.		5		143
Peabody Energy Corporation		9		256
				820
Construction & Engineering - 4.15%
Fluor Corporation		15		754
Jacobs Engineering Group Inc. (A)		7		282
				1,036
Construction & Farm Machinery & Heavy Trucks - 1.11%
Bucyrus International, Inc., Class A		10		278
Diversified Metals & Mining - 0.59%
BHP Billiton Limited, ADR		3		148
Electric Utilities - 3.23%
Entergy Corporation		6		438
Exelon Corporation		7		369
				807
Electrical Components & Equipment - 1.89%
Energy Conversion Devices, Inc. (A)		5		74
First Solar, Inc. (A)		2		397
				471
Integrated Oil & Gas - 16.84%
BP p.l.c., ADR		11		527
ConocoPhillips		9		368
Exxon Mobil Corporation		13		909
Hess Corporation		7		384
Marathon Oil Corporation		9		261
Occidental Petroleum Corporation		11		737
Petroleo Brasileiro S.A. - Petrobras, ADR		14		590
Suncor Energy Inc.		14		431
				4,207
Oil & Gas Drilling - 6.29%
ENSCO International Incorporated		7		237
Helmerich & Payne, Inc.		20		604
Nabors Industries Ltd. (A)		24		372
Transocean Inc. (A)		5		359
				1,572
Oil & Gas Equipment & Services - 22.89%
Baker Hughes Incorporated		7		264
BJ Services Company		25		337
Cameron International Corporation (A)		20		572
FMC Technologies, Inc. (A)		9		353
Halliburton Company		29		603
NATCO Group Inc., Class A (A)		9		301
National Oilwell Varco, Inc. (A)		26		852
Schlumberger Limited		16		875
Smith International, Inc.		15		385
Technip SA, ADR		3		167
Tenaris S.A., ADR		11		299
Weatherford International Ltd. (A)		36		709
				5,717
Oil & Gas Exploration & Production - 23.82%
Anadarko Petroleum Corporation		7		338
Apache Corporation		9		638
Cabot Oil & Gas Corporation		4		123
CNOOC Limited, ADR		2		277
Continental Resources, Inc. (A)		20		545
Devon Energy Corporation		9		474
EOG Resources, Inc.		8		520
Newfield Exploration Company (A)		15		503
Noble Energy, Inc.		10		575
Southwestern Energy Company (A)		30		1,155
Ultra Petroleum Corp. (A)		7		287
XTO Energy Inc.		14		517
				5,952
Oil & Gas Refining & Marketing - 1.21%
Clean Energy Fuels Corp. (A)		17		148
Valero Energy Corporation		9		154
				302
Oil & Gas Storage & Transportation - 4.04%
El Paso Corporation		30		278
El Paso Pipeline Partners, L.P.		16		280
Enbridge Inc.		13		450
				1,008
Semiconductor Equipment - 1.24%
Applied Materials, Inc.		28		309
TOTAL COMMON STOCKS - 90.58%			$	22,627
(Cost: $28,736)

SHORT-TERM SECURITIES	Principal
Master Note - 4.90%
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (B)	$	1,223		1,223
United States Government Agency Obligations - 4.94%
Federal Home Loan Mortgage Corporation,
0.020%, 7-1-09		1,234		1,234
TOTAL SHORT-TERM SECURITIES - 9.84%			$	2,457
(Cost: $2,457)
TOTAL INVESTMENT SECURITIES - 100.42%			$	25,084
(Cost: $31,193)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.42%)				(105	)
NET ASSETS - 100.00%			$	24,979

Notes to Schedule of Investments

(A) No dividends were paid during the preceding 12 months.

(B) Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

The following acronym is used throughout this schedule:
ADR = American Depositary Receipts

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	31,197
Gross unrealized appreciation		920
Gross unrealized depreciation		(7,033	)
Net unrealized depreciation	$	(6,113	)

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

Global Natural Resources

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Stocks	89.77%
Energy	43.43%
Materials	28.54%
Industrials	9.63%
Utilities	5.30%
Information Technology	1.21%
Financials	0.96%
Consumer Staples	0.70%
Options	3.10%
Bonds	0.46%
Corporate Debt Securities	0.46%
Cash and Cash Equivalents	6.67%

Country Weightings

North America	54.95%
United States	43.29%
Canada	11.66%
Europe	13.88%
Russia	5.09%
Other Europe(1)	8.79%
South America	9.78%
Brazil	9.13%
Other South America(2)	0.65%
Other(3)	5.10%
Pacific Basin(4)	4.71%
Bahamas/Caribbean(5)	1.81%
Cash and Cash Equivalents and Options	9.77%

(1)Includes 0.13% Cyprus, 2.11% Denmark, 1.11% Germany, 0.79% Kazakhstan, 0.93% Norway, 1.21% Switzerland and 2.51% United Kingdom.
(2)Includes 0.23% Chile and 0.42% Peru.
(3)Includes 1.66% Israel, 1.36% Panama and 2.08% South Africa.
(4)Includes 2.83% China, 0.21% Hong Kong, 0.46% Indonesia, 0.38% Singapore and 0.83% Thailand.
(5)Includes 0.70% Bermuda and 1.11% Cayman Islands.

Top 10 Equity Holdings

Company	Country	Sector	Industry
Potash Corporation of       Saskatchewan, Inc.	Canada	Materials	Fertilizers & Agricultural Chemicals
Petrohawk Energy Corporation	United States	Energy	Oil & Gas Exploration & Production
Open Joint Stock Company       Gazprom, ADR	Russia	Energy	Integrated Oil & Gas
El Paso Corporation	United States	Energy	Oil & Gas Storage & Transportation
Cameron International       Corporation	United States	Energy	Oil & Gas Equipment & Services
Transocean Inc.	United States	Energy	Oil & Gas Drilling
Randgold Resources Limited,       ADR	United Kingdom	Materials	Gold
Yingli Green Energy Holding       Company Limited, ADR	China	Industrials	Electrical Components & Equipment
Halliburton Company	United States	Energy	Oil & Gas Equipment & Services
Canadian Natural Resources       Limited	Canada	Energy	Oil & Gas Exploration & Production
See your advisor for more information on the Portfolio's most recently published Top 10 Equity Holdings.

SCHEDULE OF INVESTMENTS

Global Natural Resources (in thousands)

JUNE 30, 2009 (UNAUDITED)

COMMON STOCKS AND RIGHTS	Shares		Value
Bermuda - 0.70%
Bunge Limited		15	$	874
Brazil - 5.43%
Companhia de Saneamento de Minas Gerais (A)		118		1,524
Companhia Energetica de Minas Gerais - CEMIG, ADR		90		1,210
Gerdau S.A.		66		691
Petroleo Brasileiro S.A.- Petrobras, ADR		15		500
Suzano Bahia Sul Papel E Celulose S.A. (A)(B)		268		2,049
Usinas Siderurgicas de Minas Gerais S.A. - USIMINAS (A)		22		463
Votorantim Celulose e Papel S.A., ADR (B)		35		375
				6,812
Canada - 11.66%
Agrium Inc.		27		1,057
Anatolia Minerals Development Ltd. (A)(B)		54		131
Aquiline Resources Inc. (A)(B)		56		88
ARISE Technologies Corporation (A)(B)		105		34
Atacama Minerals Corp. (A)(B)(C)		120		48
Barrick Gold Corporation (A)		18		619
Cameco Corporation		10		261
Canadian Natural Resources Limited (A)		51		2,683
First Quantum Minerals Ltd. (A)		30		1,452
Kinross Gold Corporation		23		417
MGM Energy Corp. (A)(B)		331		46
Potash Corporation of Saskatchewan Inc.		69		6,420
Sino-Forest Corporation (A)(B)(D)		79		845
TriStar Oil & Gas Ltd. (A)(B)		56		529
				14,630
Cayman Islands - 1.11%
China High Speed Transmission Equipment Group Co., Ltd. (A)		339		675
Subsea 7 Inc. (A)(B)		70		716
				1,391
Chile - 0.23%
Sociedad Quimica y Minera de Chile S.A., ADR		8		290
China - 2.43%
Yingli Green Energy Holding Company Limited, ADR (B)		225		3,049
Cyprus - 0.13%
Buried Hill Energy (Cyprus) Public Company Limited (A)(B)(C)		70		168
Denmark - 2.11%
Vestas Wind Systems A/S (A)(B)		37		2,652
Germany - 1.11%
SGL Carbon SE (A)(B)		45		1,391
Hong Kong - 0.21%
Guangdong Investment Limited (A)		536		264
Indonesia - 0.46%
PT Tambang Batubara Bukit Asam (Persero) Tbk (A)		505		573
Israel - 1.66%
Israel Chemicals Ltd. (A)		210		2,085
Kazakhstan - 0.79%
Joint Stock Company KazMunaiGas Exploration Production,       GDR (A)		52		988
Norway - 0.93%
Renewable Energy Corporation ASA (A)(B)		130		1,009
Renewable Energy Corporation ASA, Rights (A)(B)		45		160
				1,169
Panama - 1.36%
McDermott International, Inc. (B)		84		1,708
Peru - 0.42%
Compania de Minas Buenaventura S.A.A., ADR		22		529
Russia - 5.09%
Open Joint Stock Company Gazprom, ADR (A)		240		4,860
Uralkali Group, GDR (A)		95		1,530
				6,390
Singapore - 0.38%
Straits Asia Resources Limited (A)		400		483
South Africa - 2.08%
Gold Fields Limited, ADR		127		1,530
Impala Platinum Holdings Limited (A)		49		1,083
				2,613
Switzerland - 1.21%
Noble Corporation		50		1,513
Thailand - 0.83%
Banpu Public Company Limited (A)		81		793
Banpu Public Company Limited, Registered Shares (A)		25		246
				1,039
United Kingdom - 2.51%
Randgold Resources Limited, ADR		49		3,144
United States - 43.01%
Allegheny Technologies Incorporated		36		1,257
Alpha Natural Resources, Inc. (B)		60		1,576
Ball Corporation		30		1,355
Bristow Group Inc. (B)		1		18
Cameron International Corporation (B)		142		4,018
Celanese Corporation, Series A		35		831
Chesapeake Energy Corporation		135		2,677
Comstock Resources, Inc. (B)		15		496
CONSOL Energy Inc.		37		1,240
Copano Energy, L.L.C.		28		449
Crown Holdings, Inc. (B)		67		1,617
Dril-Quip, Inc. (B)		22		838
El Paso Corporation		505		4,662
Energy Recovery, Inc. (B)		28		198
Energy Transfer Partners, L.P.		45		1,822
FMC Corporation		21		993
Foster Wheeler Ltd. (B)		43		1,021
GrafTech International Ltd. (B)		120		1,357
Halliburton Company (E)		140		2,898
Hess Corporation		6		323
MarkWest Energy Partners, L.P.		14		255
National Oilwell Varco, Inc. (B)		75		2,450
Oceaneering International, Inc. (B)		27		1,220
Owens-Illinois, Inc. (B)		90		2,521
Peabody Energy Corporation		64		1,930
Petrohawk Energy Corporation (B)		233		5,185
Questar Corporation		51		1,587
Regency Energy Partners LP		45		655
Rockwood Holdings, Inc. (B)		65		952
SandRidge Energy, Inc. (B)		50		426
Smith International, Inc.		15		386
Superior Energy Services, Inc. (B)		81		1,406
Targa Resources Partners LP		21		291
Transocean Inc. (B)		50		3,677
Williams Companies, Inc. (The)		90		1,405
				53,992
TOTAL COMMON STOCKS AND RIGHTS - 85.85%			$	107,747
(Cost: $116,891)
PREFERRED STOCKS
Brazil - 3.64%
Bradespar S.A. (A)		94		1,218
CESP - Companhia Energetica de Sao Paulo (A)		112		1,111
Companhia Energetica de Minas Gerais - CEMIG (A)		60		805
Usinas Siderurgicas de Minas Gerais S.A. - USIMINAS (A)		68		1,444
				4,578
United States - 0.28%
Konarka Technologies, Inc., 8.0% Cumulative (B)(C)		68		348
TOTAL PREFERRED STOCKS - 3.92%			$	4,926
(Cost: $3,483)

CALL OPTIONS - 3.10%	Number of Contracts
Chesapeake Energy Corporation:
Oct $12.50, Expires 10-19-09		1			518
Oct $16.00, Expires 10-19-09		––	*		192
Chevron Corporation:
Sep $45.00, Expires 9-21-09		1			1,266
Sep $50.00, Expires 9-21-09		––	*		495
El Paso Corporation,
Oct $7.00, Expires 10-19-09		2			510
Exxon Mobil Corporation,
Oct $55.00, Expires 10-19-09		––	*		278
Occidental Petroleum Corporation,
Nov $45.00, Expires 11-23-09		––	*		633
(Cost: $4,585)				$	3,892

CORPORATE DEBT SECURITIES		Principal
Brazil - 0.06%
Bahia Sul Celulose S.A.,
8.614%, 12-1-12 (D)(F)(G)	BRL180				76
China - 0.40%
Yingli Green Energy Holding Company Limited, Convertible,
0.000%, 12-15-12 (H)			$ 516		498
TOTAL CORPORATE DEBT SECURITIES - 0.46%				$	574
(Cost: $385)
SHORT-TERM SECURITIES
Master Note - 4.11%
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (F)			5,164		5,164
Treasury Bills - 0.80%
United States Treasury Bills,
0.135%, 7-30-09 (E)			1,000		1,000
United States Government Agency Obligations - 0.82%
Federal Home Loan Mortgage Corporation,
0.020%, 7-1-09			1,027		1,027
TOTAL SHORT-TERM SECURITIES - 5.73%				$	7,191
(Cost: $7,191)
TOTAL INVESTMENT SECURITIES - 99.06%				$	124,330
(Cost: $132,535)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.94%					1,175
NET ASSETS - 100.00%				$	125,505

Notes to Schedule of Investments

The following forward foreign currency contracts were outstanding at June 30, 2009:

	Type	Currency	Principal Amount of Contract (Denominated in Indicated Currency)		Settlement Date	Unrealized Appreciation			Unrealized Depreciation
	Sell	Euro		100	8-6-09		$3			$––
	Sell	Euro		150	9-25-09		––	*		––
	Sell	South African Rand		370	7-29-09		––			4
	Sell	South African Rand		2,000	8-12-09		––			24
	Sell	South African Rand		1,800	9-2-09		––			15
*Not shown due to rounding.							$3			$43

(A)Listed on an exchange outside the United States.

(B)No dividends were paid during the preceding 12 months.

(C)Illiquid restricted securities. At June 30, 2009, the following restricted securities were owned:

Security	Acquisition Date	Shares	Cost	Market Value
Atacama Minerals Corp.	8-19-08	120	$113		$48
Buried Hill Energy (Cyprus) Public       Company Limited	5-1-07 to 4-17-08	70	118		168
Konarka Technologies, Inc.,       8.0% Cumulative	8-31-07	68	211		348
			$442		$564

     The total value of these securities represented approximately 0.45% of net assets at June 30, 2009.

(D)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be illiquid under guidelines established by the Board of Trustees. At June 30, 2009, the total value of these securities amounted to $921 or 0.73% of net assets.

(E)Securities serve as collateral for the following open futures contracts at June 30, 2009:

Description	Type	Expiration Date	Number of Contracts	Market Value	Unrealized Appreciation
S&P 500 Emini	Short	9-19-09	––*	$(13,733)		$134

(F)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

(G)Principal amounts are denominated in the indicated foreign currency, where applicable (BRL - Brazilian Real).

(H)Zero coupon bond.

The following acronyms are used throughout this schedule:
ADR = American Depositary Receipts
GDR = Global Depositary Receipts

Market Sector Diversification
(as a % of net assets)
	Energy	43.43%
	Materials	28.60%
	Industrials	10.03%
	Utilities	5.30%
	Information Technology	1.21%
	Financials	0.96%
	Consumer Staples	0.70%
	Other+	9.77%
	+Includes options, cash and cash equivalents and other assets and liabilities

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	141,086
Gross unrealized appreciation		7,796
Gross unrealized depreciation		(24,552	)
Net unrealized depreciation	$	(16,756	)

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

Growth

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Stocks	98.07%
Information Technology	31.81%
Consumer Discretionary	15.20%
Health Care	14.18%
Consumer Staples	11.96%
Financials	7.48%
Industrials	6.44%
Energy	5.80%
Materials	5.20%
Cash and Cash Equivalents	1.93%

Top 10 Equity Holdings

Company	Sector
Apple Inc.	Information Technology
Colgate-Palmolive Company	Consumer Staples
QUALCOMM Incorporated	Information Technology
Google Inc., Class A	Information Technology
Hewlett-Packard Company	Information Technology
Gilead Sciences, Inc.	Health Care
Wal-Mart Stores, Inc.	Consumer Staples
Abbott Laboratories	Health Care
Microchip Technology Incorporated	Information Technology
McDonald's Corporation	Consumer Discretionary
See your advisor for more information on the Portfolio's most recently published Top 10 Equity Holdings.

SCHEDULE OF INVESTMENTS

Growth (in thousands)

JUNE 30, 2009 (UNAUDITED)

COMMON STOCKS	Shares		Value
Aerospace & Defense - 4.51%
Lockheed Martin Corporation		287	$	23,115
Raytheon Company		135		5,989
United Technologies Corporation		118		6,105
				35,209
Asset Management & Custody Banks - 1.84%
BlackRock, Inc., Class A		38		6,596
T. Rowe Price Group, Inc.		187		7,800
				14,396
Automotive Retail - 1.63%
AutoZone, Inc. (A)		44		6,649
O'Reilly Automotive, Inc. (A)		161		6,112
				12,761
Biotechnology - 5.11%
Genzyme Corporation (A)		70		3,914
Gilead Sciences, Inc. (A)		769		36,034
				39,948
Casinos & Gaming - 0.26%
Wynn Resorts, Limited (A)		57		1,994
Communications Equipment - 9.36%
Cisco Systems, Inc. (A)	1,007			18,772
QUALCOMM Incorporated		867		39,189
Research In Motion Limited (A)		214		15,190
				73,151
Computer Hardware - 10.08%
Apple Inc. (A)		299		42,586
Hewlett-Packard Company		937		36,223
				78,809
Construction & Farm Machinery & Heavy Trucks - 0.88%
Deere & Company		172		6,875
Data Processing & Outsourced Services - 3.65%
MasterCard Incorporated, Class A		41		6,776
Visa Inc., Class A		349		21,754
				28,530
Department Stores - 2.60%
Kohl's Corporation (A)		474		20,281
Electrical Components & Equipment - 0.62%
Emerson Electric Co.		150		4,854
Environmental & Facilities Services - 0.43%
Stericycle, Inc. (A)		65		3,349
Fertilizers & Agricultural Chemicals - 2.33%
Monsanto Company		244		18,132
General Merchandise Stores - 1.85%
Target Corporation		366		14,446
Health Care Equipment - 3.68%
Baxter International Inc.		422		22,329
Medtronic, Inc.		115		4,012
Stryker Corporation		60		2,384
				28,725
Health Care Supplies - 0.56%
DENTSPLY International Inc.		143		4,349
Home Entertainment Software - 0.57%
Activision Blizzard, Inc. (A)		350		4,421
Home Improvement Retail - 4.03%
Home Depot, Inc. (The)		831		19,627
Lowe's Companies, Inc.		610		11,830
				31,457
Household Products - 5.07%
Colgate-Palmolive Company		560		39,614
Hypermarkets & Super Centers - 5.14%
Costco Wholesale Corporation		212		9,679
Wal-Mart Stores, Inc.		629		30,455
				40,134
Industrial Gases - 1.92%
Praxair, Inc.		211		15,017
Internet Software & Services - 4.65%
Google Inc., Class A (A)		86		36,324
Investment Banking & Brokerage - 0.48%
Charles Schwab Corporation (The)		215		3,762
Life Sciences Tools & Services - 1.06%
Thermo Fisher Scientific Inc. (A)		202		8,252
Oil & Gas Equipment & Services - 5.80%
National Oilwell Varco, Inc. (A)		194		6,346
Schlumberger Limited		434		23,499
Smith International, Inc.		145		3,729
Weatherford International Ltd. (A)		600		11,736
				45,310
Other Diversified Financial Services - 2.96%
JPMorgan Chase & Co.		676		23,070
Pharmaceuticals - 3.77%
Abbott Laboratories		627		29,489
Restaurants - 4.83%
McDonald's Corporation		434		24,974
YUM! Brands, Inc.		386		12,859
				37,833
Semiconductors - 3.50%
Microchip Technology Incorporated	1,211			27,308
Soft Drinks - 1.75%
Coca-Cola Company (The)		285		13,672
Specialized Finance - 2.20%
CME Group Inc.		55		17,204
Specialty Chemicals - 0.95%
Ecolab Inc.		191		7,447
TOTAL COMMON STOCKS - 98.07%			$	766,123
(Cost: $741,480)

SHORT-TERM SECURITIES	Principal
Commercial Paper - 1.79%
American Honda Finance Corp.,
0.300%, 7-21-09	$	4,000		3,999
General Mills, Inc.,
0.400%, 7-9-09		3,500		3,500
Straight-A Funding, LLC (Federal Financing Bank),
0.260%, 7-24-09		1,486		1,486
Total Capital SA,
0.080%, 7-1-09		5,000		5,000
				13,985
Master Note - 0.10%
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (B)		819		819
TOTAL SHORT-TERM SECURITIES - 1.89%			$	14,804
(Cost: $14,804)
TOTAL INVESTMENT SECURITIES - 99.96%			$	780,927
(Cost: $756,284)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.04%				344
NET ASSETS - 100.00%			$	781,271

Notes to Schedule of Investments

(A)No dividends were paid during the preceding 12 months.

(B)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	757,492
Gross unrealized appreciation		88,978
Gross unrealized depreciation		(65,543	)
Net unrealized appreciation	$	23,435

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

High Income

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Bonds	95.49%
Corporate Debt Securities	90.15%
Senior Loans	5.34%
Cash and Cash Equivalents and Equities	4.51%

Bond Portfolio Characteristics

Average maturity	5.4 years
Effective duration	3.6 years
Weighted average bond rating	B+

Quality Weightings

Investment Grade	5.74%
A	0.65%
BBB	5.09%
Non-Investment Grade	89.75%
BB	22.05%
B	42.65%
Below B	25.05%
Cash and Cash Equivalents and Equities	4.51%
Ratings reflected in the wheel are taken from the following sources in order of preference: Standard & Poor's, Moody's or management's internal ratings, where no other ratings are available.

SCHEDULE OF INVESTMENTS

High Income (in thousands)

JUNE 30, 2009 (UNAUDITED)

COMMON STOCKS	Shares		Value
Broadcasting - 0.00%
Citadel Broadcasting Corporation (A)		15	$	1
Casinos & Gaming - 0.06%
Pinnacle Entertainment, Inc. (A)		13		115
Movies & Entertainment - 0.06%
RHI Entertainment, Inc. (A)		35		112
Oil & Gas Storage & Transportation - 0.13%
Inergy, L.P.		10		255
Wireless Telecommunication Service - 0.04%
NII Holdings, Inc. (A)		4		67
TOTAL COMMON STOCKS - 0.29%			$	550
(Cost:$1,538)

CORPORATE DEBT SECURITIES	Principal				Value
Aerospace - 0.39%
Esterline Technologies Corporation,
7.750%, 6-15-13		$	750		728
Apparel, Accessories & Luxury Goods - 0.80%
Oxford Industries, Inc.,
11.375%, 7-15-15 (B)			700		693
Perry Ellis International, Inc.,
8.875%, 9-15-13			1,000		815
					1,508
Automobile Manufacturers - 0.73%
UCI Holdco, Inc.,
8.624%, 12-15-13 (C)			2,635		562
United Auto Group, Inc.,
7.750%, 12-15-16			1,000		808
					1,370
Automotive Retail - 1.13%
Group 1 Automotive, Inc.,
8.250%, 8-15-13			2,500		2,113
Building Products - 1.91%
CPG International I Inc.,
10.500%, 7-1-13			2,000		1,120
Norcraft Companies, L.P. and Norcraft Finance Corp.,
9.750%, 9-1-12			1,600		1,496
Ply Gem Industries, Inc.,
11.750%, 6-15-13			1,500		968
					3,584
Cable & Satellite - 2.59%
Cablevision Systems Corporation,
8.000%, 4-15-12			665		658
CSC Holdings, Inc.:
8.500%, 6-15-15 (B)			600		590
8.625%, 2-15-19 (B)			250		243
DirecTV Holdings LLC and DirecTV Financing Co.,
7.625%, 5-15-16			2,000		1,944
EchoStar DBS Corporation,
7.750%, 5-31-15			1,500		1,429
					4,864
Capital Goods - 0.79%
RBS Global, Inc. and Rexnord LLC:
9.500%, 8-1-14			1,025		876
9.500%, 8-1-14 (B)			286		245
11.750%, 8-1-16			500		369
					1,490
Casinos & Gaming - 5.28%
Ameristar Casinos, Inc.,
9.250%, 6-1-14 (B)			2,750		2,804
Inn of the Mountain Gods Resort and Casino,
12.000%, 11-15-10 (D)			1,750		700
MGM MIRAGE:
8.500%, 9-15-10			2,600		2,359
10.375%, 5-15-14 (B)			325		337
7.625%, 1-15-17			500		324
11.125%, 11-15-17 (B)			650		689
Pinnacle Entertainment, Inc.:
8.250%, 3-15-12			1,996		1,986
8.750%, 10-1-13			500		503
7.500%, 6-15-15			250		214
					9,916
Chemicals - 0.22%
Nalco Company,
7.750%, 11-15-11			414		414
Consumer Finance - 3.43%
ASG Consolidated LLC and ASG Finance, Inc.,
11.500%, 11-1-11			3,325		3,042
Ford Motor Credit Company:
9.750%, 9-15-10			1,000		958
9.875%, 8-10-11			1,000		925
3.889%, 1-13-12 (C)			350		271
8.000%, 12-15-16			1,000		765
Ford Motor Credit Company LLC,
12.000%, 5-15-15			500		468
					6,429
Consumer Products - 1.74%
Visant Holding Corp.,
8.750%, 12-1-13			3,325		3,267
Containers - 1.24%
Graham Packaging Company, L.P. and GPC Capital Corp. I:
8.500%, 10-15-12			750		724
9.875%, 10-15-14			1,000		930
Huntsman International LLC,
7.375%, 1-1-15			850		667
					2,321
Diversified Metals & Mining - 0.94%
Freeport-McMoRan Copper & Gold Inc.:
4.995%, 4-1-15 (C)			1,000		936
8.250%, 4-1-15			825		833
					1,769
Diversified Support Services - 0.93%
Iron Mountain Incorporated,
8.625%, 4-1-13			1,750		1,746
Diversified Telecom - 0.78%
Qwest Corporation:
8.875%, 3-15-12			500		504
8.375%, 5-1-16 (B)			1,000		965
					1,469
Electronic Manufacturing Services - 0.97%
Tyco Electronics Ltd.,
6.550%, 10-1-17			2,000		1,816
Environmental & Facilities Services - 0.80%
Allied Waste North America, Inc.:
7.125%, 5-15-16			1,000		1,005
6.875%, 6-1-17			500		495
					1,500
Fertilizers & Agricultural Chemicals - 0.81%
Mosaic Company (The):
7.375%, 12-1-14 (B)			500		515
7.625%, 12-1-16 (B)			1,000		1,014
					1,529
General Merchandise Stores - 2.59%
Dollar General Corporation:
10.625%, 7-15-15			3,750		4,050
11.875%, 7-15-17			750		810
					4,860
Health Care Equipment - 1.11%
Biomet, Inc.:
10.000%, 10-15-17			750		763
10.375%, 10-15-17			500		484
11.625%, 10-15-17			850		833
					2,080
Health Care Facilities - 4.49%
HCA Inc.:
6.750%, 7-15-13			2,500		2,200
9.875%, 2-15-17 (B)			300		303
8.500%, 4-15-19 (B)			1,000		980
HealthSouth Corporation:
7.218%, 6-15-14 (C)			3,500		3,194
10.750%, 6-15-16			1,750		1,759
					8,436
Health Care Facilities / Supplies - 5.47%
Apria Healthcare Group Inc.,
11.250%, 11-1-14 (B)			950		917
Bio-Rad Laboratories, Inc.,
8.000%, 9-15-16 (B)			500		495
ReAble Therapeutics Finance LLC and ReAble Therapeutics       Finance Corporation:
10.875%, 11-15-14			1,000		875
11.750%, 11-15-14			1,500		1,088
Rural/Metro Corporation,
0.000%, 3-15-16 (E)			1,415		1,005
United Surgical Partners International, Inc.,
8.875%, 5-1-17			2,000		1,820
US Oncology Holdings, Inc.,
9.125%, 8-15-17 (B)			1,950		1,934
US Oncology, Inc.,
10.750%, 8-15-14			2,150		2,128
					10,262
Hotels, Resorts & Cruise Lines - 2.06%
Gaylord Entertainment Company:
8.000%, 11-15-13			1,000		853
6.750%, 11-15-14			2,300		1,719
Starwood Hotels & Resorts Worldwide, Inc.,
6.750%, 5-15-18			1,500		1,286
					3,858
Household Products - 0.59%
Simmons Bedding Company,
7.875%, 1-15-14 (D)			1,225		680
Simmons Company,
0.000%, 12-15-14 (E)			3,000		420
					1,100
Industrial - Other - 0.79%
TEGSA,
6.000%, 10-1-12			750		737
Tyco Electronics Group S.A.,
5.950%, 1-15-14			800		747
					1,484
IT Consulting & Other Services - 1.10%
SunGard Data Systems Inc.:
9.125%, 8-15-13			625		591
10.625%, 5-15-15 (B)			1,500		1,470
					2,061
Leisure - 1.25%
Cinemark USA, Inc.,
8.625%, 6-15-19 (B)			1,000		988
Speedway Motorsports, Inc.,
8.750%, 6-1-16 (B)			1,350		1,366
					2,354
Machinery - 0.96%
Terex Corporation,
10.875%, 6-1-16			1,800		1,800
Metals / Mining - 1.80%
Compass Minerals International, Inc.,
8.000%, 6-1-19 (B)			1,200		1,189
Teck Resources Limited:
9.750%, 5-15-14 (B)			520		538
10.250%, 5-15-16 (B)			780		817
10.750%, 5-15-19 (B)			780		839
					3,383
Movies & Entertainment - 1.18%
AMC Entertainment Inc.,
11.000%, 2-1-16			1,500		1,451
Marquee Holdings Inc.,
9.505%, 8-15-14			1,000		770
					2,221
Office Services & Supplies - 2.13%
Interface, Inc.:
11.375%, 11-1-13 (B)			1,200		1,242
9.500%, 2-1-14			3,000		2,760
					4,002
Oil & Gas Exploration & Production - 2.89%
Bill Barrett Corporation,
9.875%, 7-15-16			250		238
Chesapeake Energy Corporation,
9.500%, 2-15-15			700		705
Denbury Resources Inc.:
7.500%, 4-1-13			250		239
7.500%, 12-15-15			500		475
9.750%, 3-1-16			200		206
Petrohawk Energy Corporation:
9.125%, 7-15-13			2,250		2,239
10.500%, 8-1-14 (B)			400		409
7.875%, 6-1-15			1,000		925
					5,436
Oil & Gas Storage & Transportation - 2.32%
Copano Energy, L.L.C.,
8.125%, 3-1-16			650		611
El Paso Corporation,
8.250%, 2-15-16			275		267
Inergy, L.P.,
8.750%, 3-1-15 (B)			1,600		1,564
Inergy, L.P. and Inergy Finance Corp.,
8.250%, 3-1-16			2,000		1,905
					4,347
Oil Refining & Marketing - 0.50%
Quicksilver Resources Inc.:
11.750%, 1-1-16			600		621
7.125%, 4-1-16			400		312
					933
Packaged Foods & Meats - 1.91%
Central Garden & Pet Company,
9.125%, 2-1-13			3,750		3,586
Paper Packaging - 0.45%
Sealed Air Corporation,
7.875%, 6-15-17 (B)			850		842
Paper Products - 1.88%
Buckeye Technologies Inc.:
8.000%, 10-15-10			2,645		2,593
8.500%, 10-1-13			1,000		930
					3,523
Pharmaceuticals - 0.28%
Warner Chilcott Corporation,
8.750%, 2-1-15			533		530
Publishing - 0.74%
Nielsen Finance LLC and Nielsen Finance Co.:
11.500%, 5-1-16 (B)			900		875
0.000%, 8-1-16 (E)			800		514
					1,389
Railroads - 3.23%
Kansas City Southern de Mexico, S.A. de C.V.:
7.625%, 12-1-13			350		301
7.375%, 6-1-14			500		420
12.500%, 4-1-16 (B)			1,500		1,523
Kansas City Southern Railway Company (The),
13.000%, 12-15-13			2,500		2,749
TFM, S.A. de C.V.,
9.375%, 5-1-12			1,125		1,069
					6,062
Restaurants - 1.75%
NPC International, Inc.,
9.500%, 5-1-14			3,605		3,281
Retail / Food & Drug - 0.16%
Rite Aid Corporation,
9.750%, 6-12-16 (B)			300		300
Retail Stores - 5.68%
Federated Retail Holdings, Inc.:
5.350%, 3-15-12			550		501
5.900%, 12-1-16			750		611
Jostens IH Corp.,
7.625%, 10-1-12			1,500		1,496
Limited Brands, Inc.,
8.500%, 6-15-19 (B)			1,350		1,293
Pantry, Inc. (The),
7.750%, 2-15-14			1,000		885
Sally Holdings LLC and Sally Capital Inc.:
9.250%, 11-15-14			1,750		1,740
10.500%, 11-15-16			1,000		990
Sonic Automotive, Inc.,
8.625%, 8-15-13			1,828		1,280
Stater Bros. Holdings Inc.,
8.125%, 6-15-12			1,100		1,084
SUPERVALU INC.,
8.000%, 5-1-16			800		776
					10,656
Secondary Oil & Gas Producers - 0.52%
EXCO Resources, Inc.,
7.250%, 1-15-11			1,000		970
Semiconductors - 0.47%
Micron Technology, Inc., Convertible,
1.875%, 6-1-14			1,500		885
Service - Other - 8.88%
Education Management LLC and Education Management       Finance Corp.:
8.750%, 6-1-14			3,500		3,394
10.250%, 6-1-16			250		244
Expedia, Inc.,
8.500%, 7-1-16 (B)			750		720
Interpublic Group of Companies, Inc. (The),
10.000%, 7-15-17 (B)			1,550		1,562
KAR Holdings, Inc.:
5.028%, 5-1-14 (C)			1,750		1,317
8.750%, 5-1-14			1,500		1,286
Laureate Education, Inc.:
10.000%, 8-15-15 (B)			1,000		840
11.000%, 8-15-15 (B)			813		577
11.750%, 8-15-17 (B)			375		296
Reddy Ice Holdings, Inc.,
10.500%, 11-1-12			2,850		1,767
West Corporation:
9.500%, 10-15-14			1,500		1,313
11.000%, 10-15-16			4,000		3,339
					16,655
Technology - 2.75%
L-3 Communications Corporation:
6.125%, 1-15-14			200		186
5.875%, 1-15-15			1,000		888
Seagate Technology International,
10.000%, 5-1-14 (B)			100		103
Xerox Capital Trust I,
8.000%, 2-1-27			5,250		3,989
					5,166
Utilities - 0.94%
AES Corporation (The),
9.750%, 4-15-16 (B)			1,750		1,772
Wireless Telecommunication Service - 3.80%
Centennial Communications Corp.,
6.958%, 1-1-13 (C)			750		746
Cricket Communications, Inc.,
7.750%, 5-15-16 (B)			1,200		1,155
MetroPCS Communications, Inc.,
9.250%, 11-1-14			1,250		1,242
Nextel Communications, Inc.:
5.950%, 3-15-14			250		197
7.375%, 8-1-15			1,550		1,236
Nextel Communications, Inc., Convertible,
5.250%, 1-15-10			1,950		1,931
Sprint Capital Corporation,
7.625%, 1-30-11			625		618
					7,125
TOTAL CORPORATE DEBT SECURITIES - 90.15%				$	169,192
(Cost: $181,612)
SENIOR LOANS
Casinos & Gaming - 0.74%
Las Vegas Sands, LLC:
2.060%, 5-23-14 (C)			1,647		1,158
2.060%, 5-23-14 (C)			333		234
					1,392
Consumer Products - 1.44%
Wm. Wrigley Jr. Company,
6.500%, 7-17-14 (C)			2,681		2,692

Diversified Chemicals - 0.74%
Solutia Inc.,
7.250%, 2-28-14 (C)	1,514		1,394
Health Care Facilities - 0.41%
HCA Inc.,
2.848%, 11-18-13 (C)	854		770
Retail / Food & Drug - 0.79%
Rite Aid Corporation,
9.500%, 6-5-15 (C)	1,500		1,491
Technology - 0.57%
Palm Inc.,
3.810%, 4-24-14 (C)	1,456		1,063
Utilities - 0.65%
Energy Future Competitive Holdings Company and Texas       Competitive Electric Holdings Company, LLC:
3.810%, 10-10-14 (C)	13		9
3.821%, 10-10-14 (C)	1,706		1,218
			1,227
TOTAL SENIOR LOANS - 5.34%		$	10,029
(Cost: $10,535)
SHORT-TERM SECURITIES
Commercial Paper - 2.66%
Heinz (H.J.) Finance Co. (Heinz (H.J.) Co.),
0.470%, 7-23-09	2,993		2,992
Kellogg Co.,
0.400%, 7-2-09	2,000		2,000
			4,992
Master Note - 0.66%
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (C)	1,230		1,230
TOTAL SHORT-TERM SECURITIES - 3.32%		$	6,222
(Cost: $6,222)
TOTAL INVESTMENT SECURITIES - 99.10%		$	185,993
(Cost: $199,907)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.90%			1,694
NET ASSETS - 100.00%		$	187,687

Notes to Schedule of Investments

(A)No dividends were paid during the preceding 12 months.

(B) Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be liquid under guidelines established by the Board of Trustees. At June 30, 2009, the total value of these securities amounted to $35,004 or 18.65% of net assets.

(C)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

(D)Non-income producing as the issuer has either missed its most recent interest payment or declared bankruptcy.

(E)Securities do not bear interest for an initial period of time and subsequently become interest bearing.

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	200,013
Gross unrealized appreciation		5,689
Gross unrealized depreciation		(19,709	)
Net unrealized depreciation	$	(14,020	)

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

International Growth

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Stocks	96.48%
Consumer Staples	17.59%
Industrials	16.34%
Financials	13.95%
Information Technology	11.23%
Energy	8.95%
Telecommunication Services	7.58%
Materials	6.28%
Consumer Discretionary	5.92%
Health Care	4.58%
Utilities	4.06%
Cash and Cash Equivalents	3.52%

Country Weightings

Europe	62.58%
United Kingdom	19.87%
France	11.49%
Switzerland	11.15%
Germany	7.68%
Other Europe(1)	12.39%
Pacific Basin	26.00%
Japan	10.20%
China	9.41%
Australia	3.85%
Other Pacific Basin(2)	2.54%
North America(3)	5.15%
South America(4)	2.75%
Cash and Cash Equivalents	3.52%

(1)Includes 2.05% Denmark, 2.06% Finland, 3.28% Italy, 3.05% Netherlands, 1.42% Spain and 0.53% Sweden.
(2)Includes 2.04% Hong Kong and 0.50% India.
(3)Includes 2.44% Canada and 2.71% United States.
(4)Includes 2.75% Brazil.

Top 10 Equity Holdings

Company	Country	Sector	Industry
Nestle S.A., Registered Shares	Switzerland	Consumer Staples	Packaged Foods & Meats
TOTAL S.A.	France	Energy	Integrated Oil & Gas
British American Tobacco p.l.c.	United Kingdom	Consumer Staples	Tobacco
VINCI	France	Industrials	Construction & Engineering
Roche Holdings AG,       Genussschein	Switzerland	Health Care	Pharmaceuticals
Vodafone Group Plc	United Kingdom	Telecommunication       Services	Wireless Telecommunication       Service
Reckitt Benckiser Group plc	United Kingdom	Consumer Staples	Household Products
Tencent Holdings Limited	China	Information Technology	Internet Software & Services
Industrial and Commercial Bank       of China Limited, H Shares	China	Financials	Diversified Banks
Syngenta AG	Switzerland	Materials	Fertilizers & Agricultural       Chemicals
See your advisor for more information on the Portfolio's most recently published Top 10 Equity Holdings.

SCHEDULE OF INVESTMENTS

International Growth (in thousands)

JUNE 30, 2009 (UNAUDITED)

COMMON STOCKS AND RIGHTS	Shares			Value
Australia - 3.85%
Brambles Limited (A)		732		$	3,515
Telstra Corporation Limited (A)		1,116			3,048
					6,563
Brazil - 2.75%
Cia Brasileira de Meios de Pagamento (A)(B)(C)		137			1,180
Petroleo Brasileiro S.A. - Petrobras, ADR		86			3,513
					4,693
Canada - 2.44%
Shoppers Drug Mart Corporation (A)(D)		40			1,706
Shoppers Drug Mart Corporation (A)		57			2,454
					4,160
China - 9.41%
China Construction Bank Corporation (A)(D)		3,181			2,467
China Life Insurance Company Limited, ADR		51			2,819
China South Locomotive & Rolling Stock Corporation Limited,       H Shares (A)		1,128			661
China South Locomotive & Rolling Stock Corporation Limited,       H Shares (A)(D)		1,650			966
Industrial and Commercial Bank of China Limited,       H Shares (A)(D)		5,293			3,688
Shanda Interactive Entertainment Limited, ADR (C)		30			1,589
Tencent Holdings Limited (A)		331			3,860
					16,050
Denmark - 2.05%
Carlsberg Group (A)		55			3,500
Finland - 2.06%
Fortum Oyj (A)		120			2,733
Nokia OYJ (A)		53			782
					3,515
France - 11.49%
ALSTOM (A)		29			1,722
Compagnie Generale des Etablissements Michelin, Class B (A)		39			2,224
Pinault-Printemps-Redoute SA (A)		21			1,741
Technip-Coflexip (A)		64			3,135
TOTAL S.A. (A)		107			5,769
VINCI (A)		112			5,009
					19,600
Germany - 5.12%
Bayer Aktiengesellschaft (A)		39			2,106
RWE Aktiengesellschaft (A)		21			1,631
SAP Aktiengesellschaft (A)		60			2,394
Vossloh AG (A)		22			2,612
					8,743
Hong Kong - 2.04%
Cheung Kong (Holdings) Limited (A)		179			2,058
Esprit Holdings Limited (A)		254			1,417
					3,475
India - 0.50%
Bharti Airtel Limited (A)(C)		51			860
Italy - 3.28%
Banca Intesa S.p.A. (A)		471			1,518
Finmeccanica SpA (A)		87			1,227
Saipem S.p.A. (A)		118			2,859
					5,604
Japan - 10.20%
Canon Inc. (A)		37			1,201
Central Japan Railway Company (A)		––	*		1,416
East Japan Railway Company (A)		36			2,194
Japan Tobacco Inc. (A)		1			3,104
Mitsubishi Electric Corporation (A)		389			2,467
Nintendo Co., Ltd. (A)		8			2,294
Shin-Etsu Chemical Co., Ltd. (A)		30			1,414
Sumitomo Mitsui Financial Group, Inc. (A)		81			3,317
					17,407
Netherlands - 3.05%
Heineken N.V. (A)		74			2,733
Koninklijke KPN N.V. (A)		180			2,479
					5,212
Spain - 1.42%
Telefonica, S.A. (A)		107			2,416
Sweden - 0.53%
H & M Hennes & Mauritz AB (A)		18			899
Switzerland - 11.15%
Nestle S.A., Registered Shares (A)		162			6,116
Roche Holdings AG, Genussschein (A)		32			4,302
Syngenta AG (A)		16			3,633
TEMENOS Group AG (A)(C)		145			2,468
Zurich Financial Services, Registered Shares (A)		14			2,512
					19,031
United Kingdom - 19.87%
BAE Systems plc (A)		570			3,174
Barclays PLC (A)		662			3,084
British American Tobacco p.l.c. (A)		199			5,489
Capita Group Plc (The) (A)		80			942
IG Group Holdings plc (A)(D)		258			1,190
Informa plc (A)		564			2,031
Marks and Spencer Group plc (A)		356			1,790
National Grid plc (A)		285			2,567
Prudential plc (A)		171			1,166
Reckitt Benckiser Group plc (A)		89			4,051
Rio Tinto plc (A)		27			919
Rio Tinto plc, Rights (A)(C)		14			160
Serco Group plc (A)		282			1,961
Vodafone Group Plc (A)		2,138			4,121
Xstrata plc (A)		115			1,249
					33,894
United States - 2.71%
Monsanto Company		17			1,253
Research In Motion Limited (C)		47			3,367
					4,620
TOTAL COMMON STOCKS AND RIGHTS - 93.92%				$	160,242
(Cost: $165,469)
PREFERRED STOCKS - 2.56%
Germany
Fresenius AG (A)		65			3,516
Henkel AG & Co. KGaA (A)		27			847
(Cost: $4,856)				$	4,363

SHORT-TERM SECURITIES	Principal
Commercial Paper - 3.14%
Pfizer Inc.,
0.150%, 7-22-09	$	2,000		2,000
Total Capital SA,
0.080%, 7-1-09		3,355		3,355
				5,355
Master Note - 1.89%
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (E)		3,229		3,229
TOTAL SHORT-TERM SECURITIES - 5.03%			$	8,584
(Cost: $8,584)
TOTAL INVESTMENT SECURITIES - 101.51%			$	173,189
(Cost: $178,909)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (1.51%)				(2,582	)
NET ASSETS - 100.00%			$	170,607

Notes to Schedule of Investments

*Not shown due to rounding.

(A)Listed on an exchange outside the United States.

(B)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers.  These securities have been determined to be illiquid under guidelines established by the Board of Trustees.  At June 30, 2009, the total value of these securities amounted to $1,180 or 0.69% of net assets.

(C)No dividends were paid during the preceding 12 months.

(D)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers.  These securities have been determined to be liquid under guidelines established by the Board of Trustees.  At June 30, 2009, the total value of these securities amounted to $10,017 or 5.87% of net assets.

(E)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

The following acronym is used throughout this schedule:
ADR = American Depositary Receipts

Market Sector Diversification
(as a % of net assets)
	Consumer Staples	17.59%
	Industrials	16.34%
	Financials	13.95%
	Information Technology	11.23%
	Energy	8.95%
	Telecommunication Services	7.58%
	Materials	6.28%
	Consumer Discretionary	5.92%
	Health Care	4.58%
	Utilities	4.06%
	Other+	3.52%
	+Includes cash and cash equivalents and other assets and liabilities

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	179,933
Gross unrealized appreciation		18,817
Gross unrealized depreciation		(25,561	)
Net unrealized depreciation	$	(6,744	)

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

International Value

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Stocks	98.72%
Financials	16.58%
Information Technology	14.97%
Industrials	14.08%
Consumer Staples	12.28%
Consumer Discretionary	9.77%
Telecommunication Services	8.54%
Health Care	8.09%
Energy	7.85%
Materials	3.79%
Utilities	2.77%
Cash and Cash Equivalents	1.28%

Country Weightings

Europe	55.37%
United Kingdom	18.09%
France	16.06%
Germany	8.98%
Switzerland	8.30%
Other Europe(1)	3.94%
Pacific Basin	39.61%
Japan	15.33%
Australia	8.30%
Taiwan	4.67%
China	3.51%
Other Pacific Basin(2)	7.80%
North America(3)	2.38%
Bahamas/Caribbean(4)	1.36%
Cash and Cash Equivalents	1.28%

(1)Includes 1.53% Denmark, 1.30% Italy and 1.11% Netherlands.
(2)Includes 2.36% Hong Kong, 2.72% Singapore and 2.72% South Korea.
(3)Includes 1.20% Canada and 1.18% United States.
(4)Includes 1.36% Cayman Islands.

Top 10 Equity Holdings

Company	Country	Sector	Industry
TOTAL S.A.	France	Energy	Integrated Oil & Gas
Sanofi-Aventis	France	Health Care	Pharmaceuticals
Samsung Electronics Co.,       Ltd., GDR	South Korea	Information Technology	Semiconductors
BAE Systems plc	United Kingdom	Industrials	Aerospace & Defense
Telstra Corporation Limited	Australia	Telecommunication       Services	Integrated Telecommunication       Services
Unilever PLC	United Kingdom	Consumer Staples	Packaged Foods & Meats
Roche Holdings AG,       Genussschein	Switzerland	Health Care	Pharmaceuticals
Vodafone Group Plc	United Kingdom	Telecommunication       Services	Wireless Telecommunication       Service
BP p.l.c.	United Kingdom	Energy	Integrated Oil & Gas
Vivendi Universal	France	Consumer Discretionary	Movies & Entertainment
See your advisor for more information on the Portfolio's most recently published Top 10 Equity Holdings.

SCHEDULE OF INVESTMENTS

International Value (in thousands)

JUNE 30, 2009 (UNAUDITED)

COMMON STOCKS	Shares		Value
Australia - 8.30%
Brambles Limited (A)		1,516	$	7,280
Foster's Group Limited (A)		1,459		6,055
John Fairfax Holdings Limited (A)		5,465		5,372
National Australia Bank Limited (A)		362		6,542
Telstra Corporation Limited (A)		3,633		9,923
				35,172
Canada - 1.20%
Shoppers Drug Mart Corporation (A)		118		5,089
Cayman Islands - 1.36%
Mindray Medical International Limited, ADR		206		5,753
China - 3.51%
China Telecom Corporation Limited (A)(B)		3,240		1,614
China Telecom Corporation Limited (A)		3,508		1,747
Industrial and Commercial Bank of China Limited,       H Shares (A)(C)		7,148		4,981
Shanda Interactive Entertainment Limited, ADR (D)		45		2,369
Shanghai Electric Group Company Limited (A)		9,714		4,161
				14,872
Denmark - 1.53%
Carlsberg Group (A)		101		6,498
France - 16.06%
ALSTOM (A)		130		7,655
AXA S.A. (A)		347		6,511
Compagnie Generale des Etablissements Michelin, Class B (A)		121		6,907
Sanofi-Aventis (A)(C)		26		1,545
Sanofi-Aventis (A)		197		11,597
Societe Generale (A)		101		5,518
Technip-Coflexip (A)		134		6,576
TOTAL S.A. (A)		233		12,597
Vivendi Universal (A)		384		9,167
				68,073
Germany - 7.71%
Bayer Aktiengesellschaft (A)		92		4,916
Beiersdorf Aktiengesellschaft (A)		112		5,252
Deutsche Boerse AG (A)		69		5,340
RWE Aktiengesellschaft (A)		78		6,182
SAP Aktiengesellschaft (A)		152		6,090
Symrise AG (A)		334		4,923
				32,703
Hong Kong - 2.36%
CNOOC Limited (A)		3,813		4,728
Hutchison Whampoa Limited, Ordinary Shares (A)		807		5,275
				10,003
Italy - 1.30%
Banca Intesa S.p.A. (A)		1,718		5,532
Japan - 15.33%
Astellas Pharma Inc. (A)		162		5,765
East Japan Railway Company (A)		80		4,849
Japan Tobacco Inc. (A)		2		5,204
JTEKT Corporation (A)		566		5,767
Kabushiki Kaisha Mitsubishi Tokyo Financial Group (A)		575		3,568
KONAMI CORPORATION (A)		255		4,892
Mitsubishi Electric Corporation (A)		1,220		7,738
Nintendo Co., Ltd. (A)		28		7,712
Nissin Kogyo Co., Ltd. (A)		693		8,860
Sumitomo Mitsui Financial Group, Inc. (A)		146		5,936
Trend Micro Incorporated (A)		146		4,683
				64,974
Netherlands - 1.11%
Koninklijke KPN N.V. (A)		342		4,702
Singapore - 2.72%
DBS Group Holdings Ltd (A)		791		6,445
Singapore Telecommunications Limited (A)		2,447		5,068
				11,513
South Korea - 2.72%
Samsung Electronics Co., Ltd., GDR (B)		50		11,545
Switzerland - 8.30%
Nestle S.A., Registered Shares (A)		234		8,831
Roche Holdings AG, Genussschein (A)		71		9,598
Swiss Reinsurance Company, Registered Shares (A)		165		5,444
Syngenta AG (A)		27		6,222
TEMENOS Group AG (A)(D)		299		5,097
				35,192
Taiwan - 4.67%
Chunghwa Telecom Co., Ltd., ADR		188		3,724
Compal Electronics, Inc. (A)(D)		2,284		1,855
Lite-On Technology Corporation (A)		1,850		1,607
Lite-On Technology Corporation, GDR (A)		545		4,731
Taiwan Semiconductor Manufacturing Company Ltd. (A)		4,725		7,878
				19,795
United Kingdom - 18.09%
BAE Systems plc (A)		2,012		11,205
Barclays PLC (A)		801		3,728
Barclays PLC (A)(C)		1,101		5,127
BP p.l.c. (A)		1,190		9,353
Home Retail Group plc (A)		1,288		5,509
Informa plc (A)		1,551		5,589
International Power plc (A)		1,430		5,601
Prudential plc (A)		829		5,638
Serco Group plc (A)		835		5,798
Unilever PLC (A)		417		9,780
Vodafone Group Plc (A)		4,878		9,405
				76,733
United States - 1.18%
Research In Motion Limited (D)		71		5,013
TOTAL COMMON STOCKS - 97.45%			$	413,162
(Cost: $419,894)
PREFERRED STOCKS - 1.27%
Germany
Henkel AG & Co. KGaA (A)		173	$	5,380
(Cost: $5,259)

SHORT-TERM SECURITIES	Principal
Commercial Paper - 0.94%
Kitty Hawk Funding Corp.,
0.280%, 7-17-09	$	4,000		3,999
Master Note - 0.26%
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (E)		1,094		1,094
United States Government Agency Obligations - 0.63%
Federal National Mortgage Association,
0.090%, 7-22-09		2,684		2,684
TOTAL SHORT-TERM SECURITIES - 1.83%			$	7,777
(Cost: $7,777)
TOTAL INVESTMENT SECURITIES - 100.55%			$	426,319
(Cost: $432,930)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.55%)				(2,351	)
NET ASSETS - 100.00%			$	423,968

Notes to Schedule of Investments

(A)Listed on an exchange outside the United States.

(B)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be illiquid under guidelines established by the Board of Trustees. At June 30, 2009, the total value of these securities amounted to $13,159 or 3.10% of net assets.

(C)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be liquid under guidelines established by the Board of Trustees. At June 30, 2009, the total value of these securities amounted to $11,653 or 2.75% of net assets.

(D)No dividends were paid during the preceding 12 months.

(E)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

The following acronyms are used throughout this schedule:
ADR = American Depositary Receipts
GDR = Global Depositary Receipts

Market Sector Diversification
(as a % of net assets)
	Financials	16.58%
	Information Technology	14.97%
	Industrials	14.08%
	Consumer Staples	12.28%
	Consumer Discretionary	9.77%
	Telecommunication Services	8.54%
	Health Care	8.09%
	Energy	7.85%
	Materials	3.79%
	Utilities	2.77%
	Other+	1.28%
	+Includes cash and cash equivalents and other assets and liabilities

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	433,715
Gross unrealized appreciation		21,908
Gross unrealized depreciation		(29,304	)
Net unrealized depreciation	$	(7,396	)

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

Micro Cap Growth

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Stocks	99.52%
Health Care	32.27%
Information Technology	31.16%
Consumer Discretionary	19.29%
Industrials	8.05%
Energy	5.90%
Materials	1.09%
Telecommunication Services	0.89%
Financials	0.87%
Cash and Cash Equivalents	0.48%

Top 10 Equity Holdings

Company	Sector
CommVault Systems, Inc.	Information Technology
Grand Canyon Education, Inc.	Consumer Discretionary
Phase Forward Incorporated	Health Care
Auxilium Pharmaceuticals, Inc.	Health Care
Westport Innovations Inc.	Consumer Discretionary
NATCO Group Inc., Class A	Energy
Allos Therapeutics, Inc.	Health Care
True Religion Apparel, Inc.	Consumer Discretionary
Ultimate Software Group, Inc. (The)	Information Technology
NetLogic Microsystems, Inc.	Information Technology
See your advisor for more information on the Portfolio's most recently published Top 10 Equity Holdings.

SCHEDULE OF INVESTMENTS

Micro Cap Growth (in thousands)

JUNE 30, 2009 (UNAUDITED)

COMMON STOCKS	Shares		Value
Advertising - 1.29%
MDC Partners Inc., Class A (A)		75	$	414
Alternative Carriers - 0.89%
Aruba Networks, Inc. (A)		33		287
Apparel Retail - 1.62%
Citi Trends Inc. (A)		20		523
Apparel, Accessories & Luxury Goods - 2.94%
True Religion Apparel, Inc. (A)		30		657
Volcom, Inc. (A)		23		288
				945
Application Software - 6.43%
Blackbaud, Inc.		27		418
Lawson Software, Inc. (A)		60		333
NetScout Systems, Inc. (A)		49		455
OPNET Technologies, Inc.		6		52
SolarWinds, Inc. (A)		10		170
Ultimate Software Group, Inc. (The) (A)		27		643
				2,071
Auto Parts & Equipment - 3.41%
Amerigon Incorporated (A)		58		353
Westport Innovations Inc. (A)		92		748
				1,101
Biotechnology - 5.92%
Allos Therapeutics, Inc. (A)		80		668
Dyax Corp. (A)		68		146
Idenix Pharmaceuticals, Inc. (A)		55		202
InterMune, Inc. (A)		38		579
Pharmasset, Inc. (A)		28		309
				1,904
Broadcasting - 0.64%
Global Traffic Network, Inc. (A)		55		207
Cable & Satellite - 1.00%
RRSat Global Communications Network Ltd.		26		323
Communications Equipment - 3.31%
Blue Coat Systems, Inc. (A)		19		316
Cogo Group, Inc. (A)		44		260
Neutral Tandem, Inc. (A)		17		490
				1,066
Computer Hardware - 0.47%
3PAR Inc. (A)		12		150
Computer Storage & Peripherals - 2.18%
Compellent Technologies, Inc. (A)		28		424
Netezza Corporation (A)		34		279
				703
Construction & Engineering - 2.39%
MYR Group Inc. (A)		13		257
Orion Marine Group, Inc. (A)		27		513
				770
Construction & Farm Machinery & Heavy Trucks - 0.75%
Titan Machinery Inc. (A)		19		240
Distributors - 1.21%
DXP Enterprises, Inc. (A)		34		389
Education Services - 2.65%
Grand Canyon Education, Inc. (A)		51		852
Electrical Components & Equipment - 1.85%
Powell Industries, Inc. (A)		7		274
Ultralife Corporation (A)		45		323
				597
Electronic Manufacturing Services - 0.66%
Maxwell Technologies, Inc. (A)		15		212
Health Care Equipment - 8.45%
ABIOMED, Inc. (A)		40		348
Greatbatch, Inc. (A)		10		235
Micrus Endovascular Corporation (A)		25		223
NuVasive, Inc. (A)		11		473
Quidel Corporation (A)		40		578
Somanetics Corporation (A)		25		408
Spectranetics Corporation (The) (A)		92		451
				2,716
Health Care Services - 4.53%
American CareSource Holdings, Inc. (A)		34		126
CardioNet, Inc. (A)		15		246
Genoptix, Inc. (A)		18		589
Health Grades, Inc. (A)		127		497
				1,458
Health Care Supplies - 0.98%
Rochester Medical Corporation (A)		23		314
Health Care Technology - 2.54%
Phase Forward Incorporated (A)		54		819
Industrial Machinery - 0.55%
Duoyuan Global Water Inc. ADR (A)		7		177
Internet Software & Services - 3.89%
comScore, Inc. (A)		19		248
Constant Contact, Inc. (A)		22		442
Omniture, Inc. (A)		45		561
				1,251
Investment Banking & Brokerage - 0.87%
RiskMetrics Group, Inc. (A)		16		281
Life Sciences Tools & Services - 2.27%
Bruker Corporation (A)		45		419
eResearch Technology, Inc. (A)		50		313
				732
Managed Health Care - 0.97%
Molina Healthcare, Inc. (A)		13		311
Movies & Entertainment - 1.84%
Rentrak Corporation (A)		36		591
Oil & Gas Equipment & Services - 5.33%
ENGlobal Corporation (A)		67		331
NATCO Group Inc., Class A (A)		22		714
Natural Gas Services Group, Inc. (A)		23		303
T-3 Energy Services, Inc. (A)		31		366
				1,714
Oil & Gas Exploration & Production - 0.57%
Brigham Exploration Company (A)		53		185
Pharmaceuticals - 6.61%
Auxilium Pharmaceuticals, Inc. (A)		25		784
Biodel Inc. (A)		34		173
Obagi Medical Products, Inc. (A)		45		328
Questcor Pharmaceuticals, Inc. (A)		120		599
SuperGen, Inc. (A)		122		245
				2,129
Research & Consulting Services - 0.53%
Hill International, Inc. (A)		39		169
Restaurants - 2.69%
BJ's Restaurants, Inc. (A)		18		310
McCormick & Schmick's Seafood Restaurants, Inc. (A)		26		195
Red Robin Gourmet Burgers, Inc. (A)		14		270
Ruth's Hospitality Group, Inc. (A)		24		90
				865
Semiconductors - 8.25%
Cavium Networks, Inc. (A)		18		303
Diodes Incorporated (A)		25		385
Mellanox Technologies, Ltd. (A)		23		277
Microtune, Inc. (A)		116		271
Monolithic Power Systems, Inc. (A)		21		467
NetLogic Microsystems, Inc. (A)		17		626
Pericom Semiconductor Corporation (A)		39		328
				2,657
Specialty Chemicals - 1.09%
Chemspec International Limited, ADR (A)		32		269
Flotek Industries, Inc. (A)		40		82
				351
Systems Software - 5.97%
CommVault Systems, Inc. (A)		57		936
DemandTec, Inc. (A)		39		341
Phoenix Technologies Ltd. (A)		39		107
PROS Holdings, Inc. (A)		27		221
TeleCommunication Systems, Inc. (A)		45		316
				1,921
Trucking - 1.98%
Celadon Group, Inc. (A)		36		298
Marten Transport, Ltd. (A)		16		340
				638
TOTAL COMMON STOCKS - 99.52%			$	32,033
(Cost: $37,153)

SHORT-TERM SECURITIES - 0.35%	Principal
Master Note
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (B)	$	113	$	113
(Cost: $113)
TOTAL INVESTMENT SECURITIES - 99.87%			$	32,146
(Cost: $37,266)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.13%				42
NET ASSETS - 100.00%			$	32,188

Notes to Schedule of Investments

(A)No dividends were paid during the preceding 12 months.

(B)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

The following acronym is used throughout this schedule:
ADR = American Depositary Receipts

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	37,272
Gross unrealized appreciation		5,344
Gross unrealized depreciation	(10,470		)
Net unrealized depreciation	$	(5,126	)

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

Mid Cap Growth

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Stocks	89.14%
Consumer Discretionary	19.42%
Information Technology	16.96%
Health Care	13.11%
Industrials	11.68%
Financials	10.65%
Consumer Staples	6.75%
Energy	6.04%
Materials	2.74%
Utilities	1.79%
Options	0.17%
Bonds	0.16%
Corporate Debt Securities	0.16%
Cash and Cash Equivalents	10.53%

Top 10 Equity Holdings

Company	Sector
Microchip Technology Incorporated	Information Technology
Henry Schein, Inc.	Health Care
Noble Energy, Inc.	Energy
Paychex, Inc.	Information Technology
Global Payments Inc.	Information Technology
Solera Holdings, Inc.	Information Technology
TD Ameritrade Holding Corporation	Financials
Hospira, Inc.	Health Care
Allergan, Inc.	Health Care
Hershey Foods Corporation	Consumer Staples
See your advisor for more information on the Portfolio's most recently published Top 10 Equity Holdings.

SCHEDULE OF INVESTMENTS

Mid Cap Growth (in thousands)

JUNE 30, 2009 (UNAUDITED)

COMMON STOCKS	Shares			Value
Air Freight & Logistics - 3.88%
C.H. Robinson Worldwide, Inc.		25		$	1,322
Expeditors International of Washington, Inc.		37			1,238
					2,560
Apparel Retail - 3.23%
J. Crew Group, Inc. (A)		44			1,196
Urban Outfitters, Inc. (A)		45			942
					2,138
Application Software - 2.38%
Solera Holdings, Inc. (A)		62			1,577
Auto Parts & Equipment - 0.56%
BorgWarner Inc.		11			374
Automotive Retail - 1.31%
Penske Automotive Group, Inc.		52			869
Brewers - 0.97%
Molson Coors Brewing Company, Class B		15			643
Catalog Retail - 1.60%
Coldwater Creek Inc. (A)		175			1,061
Computer Storage & Peripherals - 1.58%
NetApp, Inc. (A)		53			1,043
Consumer Finance - 1.44%
Discover Financial Services		93			950
Data Processing & Outsourced Services - 4.89%
Global Payments Inc.		43			1,594
Paychex, Inc.		65			1,645
					3,239
Department Stores - 3.38%
Kohl's Corporation (A)		22			940
Macy's Inc.		34			405
Nordstrom, Inc.		31			611
Saks Incorporated (A)		62			275
					2,231
Distillers & Vintners - 1.66%
Brown-Forman Corporation, Class B		26			1,097
Electrical Components & Equipment - 1.94%
Cooper Industries, Ltd., Class A		21			641
Hubbell Incorporated, Class B		20			645
					1,286
Food Retail - 1.89%
Whole Foods Market, Inc.		66			1,249
Gas Utilities - 1.79%
Equitable Resources, Inc.		34			1,183
Health Care Distributors - 2.68%
Henry Schein, Inc. (A)		37			1,777
Health Care Equipment - 5.98%
C. R. Bard, Inc.		8			625
Hologic, Inc. (A)		102			1,453
Hospira, Inc. (A)		40			1,542
Wright Medical Group, Inc. (A)		20			329
					3,949
Health Care Supplies - 2.21%
DENTSPLY International Inc.		48			1,466
Homefurnishing Retail - 0.98%
Bed Bath & Beyond Inc. (A)		21			647
Hotels, Resorts & Cruise Lines - 1.24%
Royal Caribbean Cruises Ltd.		49			661
Starwood Hotels & Resorts Worldwide, Inc.		7			163
					824
Industrial Machinery - 2.91%
Donaldson Company, Inc.		18			622
IDEX Corporation		53			1,303
					1,925
Internet Software & Services - 1.12%
DealerTrack Holdings, Inc. (A)		44			743
Investment Banking & Brokerage - 3.33%
Lazard Group LLC		24			642
TD Ameritrade Holding Corporation (A)		89			1,567
					2,209
Oil & Gas Equipment & Services - 3.43%
Dresser-Rand Group Inc. (A)		26			668
National Oilwell Varco, Inc. (A)		29			962
Smith International, Inc.		25			641
					2,271
Oil & Gas Exploration & Production - 2.61%
Noble Energy, Inc.		29			1,728
Packaged Foods & Meats - 2.23%
Hershey Foods Corporation		41			1,482
Paper Packaging - 2.74%
Packaging Corporation of America		44			711
Sealed Air Corporation		22			404
Sonoco Products Company		29			698
					1,813
Pharmaceuticals - 2.24%
Allergan, Inc.		31			1,484
Publishing - 1.94%
Meredith Corporation		50			1,284
Regional Banks - 3.08%
BOK Financial Corporation		9			330
Prosperity Bancshares, Inc.		11			334
Signature Bank (A)		44			1,201
Zions Bancorporation		15			175
					2,040
Reinsurance - 0.51%
RenaissanceRe Holdings Ltd.		7			335
Research & Consulting Services - 1.01%
Dun & Bradstreet Corporation (The)		8			670
Restaurants - 3.14%
Chipotle Mexican Grill, Inc., Class A (A)		11			876
P.F. Chang's China Bistro, Inc. (A)		37			1,201
					2,077
Semiconductors - 6.99%
Broadcom Corporation, Class A (A)		55			1,364
Linear Technology Corporation		29			679
Microchip Technology Incorporated		84			1,892
NVIDIA Corporation (A)		61			692
					4,627
Specialized Finance - 1.81%
CME Group Inc.		4			1,195
Specialty Stores - 2.03%
PetSmart, Inc.		63			1,344
Thrifts & Mortgage Finance - 0.48%
People's United Financial, Inc.		21			320
Trading Companies & Distributors - 1.95%
Fastenal Company		39			1,294
TOTAL COMMON STOCKS - 89.14%				$	59,004
(Cost: $65,142)
CALL OPTIONS - 0.17%	Number of Contracts
Market Vectors Agribusiness ETF,
Sep $37.00, Expires 9-21-09		––	*		20
S&P Metals & Mining Select Index,
Sep $100.00, Expires 9-21-09		1			95
(Cost: $180)				$	115

CORPORATE DEBT SECURITIES - 0.16%	Principal
Health Care Equipment
Wright Medical Group, Inc., Convertible,
2.625%, 12-1-14	$	140	$	106
(Cost: $107)
SHORT-TERM SECURITIES
Commercial Paper - 4.08%
Heinz (H.J.) Finance Co. (Heinz (H.J.) Co.):
0.600%, 7-14-09	1,200			1,200
0.500%, 7-15-09	1,500			1,499
				2,699
Master Note - 4.04%
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (B)	2,675			2,675
United States Government Agency Obligations - 2.68%
Federal Home Loan Mortgage Corporation,
0.020%, 7-1-09	1,776			1,776
TOTAL SHORT-TERM SECURITIES - 10.80%			$	7,150
(Cost: $7,150)
TOTAL INVESTMENT SECURITIES - 100.27%			$	66,375
(Cost: $72,579)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.27%)				(180	)
NET ASSETS - 100.00%			$	66,195

Notes to Schedule of Investments

The following written options were outstanding at June 30, 2009:

	Underlying Security	Contracts Subject to Put	Expiration Month	Exercise Price	Premium Received		Market Value
	Market Vectors       Agribusiness ETF	--*	September 2009	$32.00		$20		$(20)
	S&P Metals & Mining       Select Index	1	September 2009	1,650.00		142		(119)
*Not shown due to rounding.						$162		$(139)

(A)No dividends were paid during the preceding 12 months.

(B)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	72,675
Gross unrealized appreciation		2,139
Gross unrealized depreciation		(8,439	)
Net unrealized depreciation	$	(6,300	)

See Accompanying Notes to Financial Statements.

SCHEDULE OF INVESTMENTS

Money Market (in thousands)

JUNE 30, 2009 (UNAUDITED)

CORPORATE OBLIGATIONS	Principal			Value
Commercial Paper
Baxter International Inc.:
0.280%, 7-8-09		$	5,000	$	5,000
0.300%, 7-9-09			3,000		3,000
Corporacion Andina de Fomento:
0.750%, 9-1-09			5,000		4,993
0.750%, 9-3-09			2,500		2,497
0.730%, 9-9-09			1,100		1,098
1.400%, 2-12-10			2,200		2,181
IBM International Group Capital LLC (International Business       Machines Corporation):
1.394%, 7-29-09 (A)			5,000		4,998
0.881%, 8-26-09 (A)			1,500		1,500
Kitty Hawk Funding Corp.,
0.260%, 7-27-09			1,200		1,200
Praxair Inc.,
0.170%, 7-2-09			6,266		6,266
SBC Communications Inc. (AT&T Inc.),
4.125%, 9-15-09			1,800		1,798
Straight-A Funding, LLC (Federal Financing Bank):
0.330%, 8-17-09			1,700		1,699
0.390%, 8-24-09			2,000		1,999
Unilever Capital Corporation,
0.321%, 7-10-09 (A)			350		350
Verizon Communications Inc.:
0.340%, 7-8-09			7,600		7,599
0.360%, 7-20-09			2,500		2,500
Total Commercial Paper - 22.18%					48,678
Commercial Paper (backed by irrevocable       bank letter of credit)
River Fuel Funding Company #3, Inc. (Bank of New York (The)),
0.580%, 7-31-09			2,000		1,999
River Fuel Trust #1 (Bank of New York (The)):
0.280%, 7-2-09			1,000		1,000
0.280%, 7-15-09			2,000		2,000
Total Commercial Paper (backed by irrevocable bank letter       of credit) - 2.28%					4,999
Master Note - 2.42%
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (A)			5,314		5,314
Notes
3M Company,
7.139%, 12-14-09 (C)			7,500		7,646
American Honda Finance Corp.:
1.404%, 7-29-09 (A)(C)			6,000		5,927
1.416%, 8-5-09 (A)			1,000		987
1.306%, 8-10-09 (A)			500		497
1.496%, 8-14-09 (A)			2,500		2,500
0.835%, 8-20-09 (A)			500		496
Bank of America Corporation (Federal Deposit Insurance       Corporation),
0.659%, 9-14-09 (A)(B)			9,850		9,850
Bank of America, N.A.,
1.538%, 8-12-09 (A)			4,000		3,961
Bear Stearns Companies Inc. (The) (JPMorgan Chase & Co.),
0.974%, 8-18-09 (A)			2,375		2,372
BellSouth Corporation (AT&T Inc.),
4.950%, 4-26-10 (A)			8,300		8,464
BP Capital Markets p.l.c.,
0.768%, 9-11-09 (A)			1,400		1,400
Caterpillar Financial Services Corporation:
1.199%, 7-9-09 (A)			2,500		2,474
1.202%, 7-27-09 (A)			2,300		2,301
Caterpillar Inc.,
7.250%, 9-15-09			2,600		2,627
Citibank, N.A. (Federal Deposit Insurance Corporation),
0.648%, 9-30-09 (A)(B)			5,000		5,000
Citigroup Funding Inc. (Federal Deposit Insurance Corporation),
1.139%, 7-30-09 (A)(B)			2,400		2,400
Countrywide Home Loans, Inc. (Bank of America Corporation):
5.625%, 7-15-09			1,459		1,461
4.125%, 9-15-09			5,120		5,126
Electronic Data Systems Corporation (Hewlett-Packard Company),
7.125%, 10-15-09			8,800		8,930
GTE California Incorporated (Verizon Communications Inc.),
6.700%, 9-1-09			525		529
Honeywell International Inc.,
1.142%, 7-27-09 (A)			1,000		999
International Business Machines Corporation:
0.320%, 7-6-09 (A)			750		750
0.348%, 7-8-09 (A)			1,250		1,250
John Deere Capital Corporation:
1.412%, 7-16-09 (A)			1,000		990
1.111%, 8-26-09 (A)			1,000		997
0.708%, 9-1-09 (A)			3,700		3,679
JPMorgan Chase & Co.:
1.601%, 7-22-09 (A)			1,420		1,410
1.176%, 8-19-09 (A)			250		249
0.843%, 8-21-09 (A)			800		798
0.687%, 9-25-09 (A)			1,100		1,097
7.625%, 12-7-09			3,000		3,058
PACCAR Financial Corp.,
0.649%, 9-21-09 (A)			2,500		2,496
Praxair Inc.,
0.751%, 8-26-09 (A)			1,600		1,600
Procter & Gamble Company (The),
0.996%, 8-7-09 (A)			1,000		1,000
Procter & Gamble International Funding S.C.A. (Procter &       Gamble Company (The)):
1.176%, 7-6-09 (A)			850		850
5.300%, 7-6-09 (C)			550		550
1.224%, 8-8-09 (A)			500		500
1.046%, 8-19-09 (A)			4,300		4,298
Roche Holdings, Inc.,
1.661%, 8-25-09 (A)			6,600		6,606
Target Corporation,
1.111%, 8-7-09 (A)			2,450		2,449
Toyota Motor Credit Corporation:
1.650%, 9-3-09 (A)			2,500		2,500
1.663%, 9-18-09 (A)			2,000		2,000
Wal-Mart Stores, Inc.,
6.875%, 8-10-09			3,395		3,413
Wells Fargo & Company:
0.782%, 9-23-09 (A)			1,800		1,794
4.200%, 1-15-10			2,000		2,021
Total Notes - 55.74%					122,302
Notes (backed by irrevocable bank letter of credit)
Conestoga Wood Specialties Corporation, Variable/Fixed Rate       Taxable Demand Revenue Bonds, Series 2000 (Wachovia       Bank, N.A.),
0.600%, 7-1-09 (A)			1,725		1,725
The Academy of the New Church, Taxable Variable Rate Demand       Bonds, Series 2008 (Wachovia Bank, N.A.),
0.450%, 7-1-09 (A)			2,000		2,000
Trap Rock Industries, Inc., Taxable Variable Demand Bonds,       Series 2005 (Wachovia Bank, National Association),
0.450%, 7-1-09 (A)			1,545		1,545
Total Notes (backed by irrevocable bank letter       of credit) - 2.40%					5,270
TOTAL CORPORATE OBLIGATIONS - 85.02%				$	186,563
(Cost: $186,563)
MUNICIPAL OBLIGATIONS - TAXABLE
California - 5.38%
California Pollution Control Financing Authority, Environmental       Improvement Revenue Bonds (Atlantic Richfield Company       Project), Series 1997 (BP p.l.c.),
0.650%, 9-4-09			9,800		9,800
City of Los Angeles, Wastewater System Subordinate Revenue       Bonds, Variable Rate Refunding, Series 2008-G       (Bank of America, N.A.),
0.190%, 7-1-09 (A)			2,000		2,000
					11,800
Colorado - 0.30%
Exempla General Improvement District, City of Lafayette,       Colorado, Special Improvement District No. 02-01, Specia       Assessment Revenue Refunding and Improvement Bonds,       Series 2002 (Wells Fargo Bank, N.A.),
0.300%, 7-1-09 (A)			655		655
Georgia - 0.22%
Development Authority of Talbot County, Incremental Taxable       Industrial Development Revenue Bonds (Junction City Mining       Company, LLC Project), Series 2000 (Wachovia Bank, N.A.),
0.550%, 7-1-09 (A)			475		475

Illinois - 1.15%
State of Illinois, General Obligation Certificates of May, 2009,
4.000%, 4-26-10	2,500		2,549
Maryland - 0.46%
Maryland Health and Higher Educational Facilities Authority,       Revenue Bonds, Anne Arundel Health Systems Issue,       Series 2009A (Wachovia Bank, N.A.),
0.450%, 7-1-09 (A)	1,000		1,000
Mississippi - 2.25%
Mississippi Business Finance Corporation, Adjustable Mode       Industrial Development Revenue Bonds (Belk, Inc. Project),       Series 2005 (Wachovia Bank, N.A.),
0.450%, 7-1-09 (A)	4,936		4,936
Missouri - 0.64%
City of Kansas City, Missouri, Variable Rate Demand Taxable       Special Obligation Refunding Bonds (President Hotel       Redevelopment Project), Series 2009B       (JPMorgan Chase & Co.),
0.700%, 7-1-09 (A)	1,400		1,400
TOTAL MUNICIPAL OBLIGATIONS - TAXABLE - 10.40%		$	22,815
(Cost: $22,815)
UNITED STATES GOVERNMENT AND GOVERNMENT       AGENCY OBLIGATIONS
United States Government Agency Obligations
Overseas Private Investment Corporation:
0.250%, 9-15-09 (A)	2,000		2,000
0.250%, 8-17-09 (A)	1,256		1,256
0.250%, 9-15-09 (A)	1,000		1,000
0.250%, 11-16-09 (A)	1,400		1,400
Totem Ocean Trailer Express, Inc. (United States Government       Guaranteed Ship Financing Obligations),
0.879%, 10-15-09 (A)	2,305		2,305
TOTAL UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS - 3.63%		$	7,961
(Cost: $7,961)
TOTAL INVESTMENT SECURITIES - 99.05%		$	217,339
(Cost: $217,339)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.95%			2,097
NET ASSETS - 100.00%		$	219,436

Notes to Schedule of Investments

(A)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

(B)Security is fully guaranteed by the Federal Deposit Insurance Corporation for both interest and principal under the Debt Guarantee Program of the Temporary Liquidity Guarantee Program.

(C)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be liquid under guidelines established by the Board of Trustees. At June 30, 2009, the total value of these securities amounted to $14,123 or 6.44% of net assets.

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	217,339
Gross unrealized appreciation		––
Gross unrealized depreciation		––
Net unrealized appreciation	$	––

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

Mortgage Securities

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Bonds	89.35%
United States Government and Government             Agency Obligations	71.28%
Corporate Debt Securities	18.07%
Cash and Cash Equivalents	10.65%

Bond Portfolio Characteristics

Average maturity	4.6 years
Effective duration	2.7 years
Weighted average bond rating	AAA

Quality Weightings

Investment Grade	87.55%
AAA	77.11%
AA	2.68%
A	4.06%
BBB	3.70%
Non-Investment Grade	1.80%
BB	1.64%
B	0.05%
Below B	0.11%
Cash and Cash Equivalents	10.65%
Ratings reflected in the wheel are taken from the following sources in order of preference: Standard & Poor's, Moody's or management's internal ratings, where no other ratings are available.

SCHEDULE OF INVESTMENTS

Mortgage Securities (in thousands)

JUNE 30, 2009 (UNAUDITED)

CORPORATE DEBT SECURITIES	Principal		Value
Car Loan - 0.47%
Capital Auto Receivables Asset Trust 2007-2,
8.300%, 2-18-14 (A)	$ 80		$	57
Ford Credit Auto Owner Trust 2006-B,
7.120%, 2-15-13 (B)		65		46
Ford Credit Auto Owner Trust 2007-A,
7.050%, 12-15-13 (B)		30		18
				121
Consumer Finance - 0.88%
Green Tree Financial Corporation:
7.650%, 4-15-19		96		83
9.000%, 6-15-25		110		108
7.950%, 8-15-25 (C)		36		35
				226
Other Mortgage-Backed Securities - 16.72%
ABFS Mortgage Loan Trust 2001-2,
6.990%, 12-25-31 (C)		163		67
ABFS Mortgage Loan Trust 2002-4,
7.423%, 12-15-33 (C)		108		24
ABN AMRO Mortgage Corporation, Series 2003-2,
5.330%, 3-25-18 (C)		78		48
Banc of America Alternative Loan Trust 2004-11,
6.000%, 12-25-34		232		145
Banc of America Alternative Loan Trust 2005-10,
5.666%, 11-25-35 (C)		116		7
Banc of America Alternative Loan Trust 2005-12,
5.803%, 1-25-36 (C)		163		18
Banc of America Alternative Loan Trust 2005-6,
6.000%, 7-25-35		281		153
Banc of America Alternative Loan Trust 2005-8:
5.571%, 9-25-35 (C)		200		30
5.571%, 9-25-35 (C)		41		2
Banc of America Alternative Loan Trust 2006-4:
6.220%, 5-25-  46 (C)		62		11
6.220%, 5-25-  46 (C)		81		5
Banc of America Commercial Mortgage Inc., Commercial       Mortgage Pass-Through Certificates, Series 2002-2,
6.200%, 7-11-43 (A)		140		57
Banc of America Commercial Mortgage Inc., Commercial       Mortgage Pass-Through Certificates, Series 2004-6,
5.104%, 12-10-42 (A)(C)		100		41
Banc of America Funding 2004-2 Trust,
6.500%, 7-20-32		134		103
Banc of America Funding Corporation,
5.002%, 9-20-34 (C)		76		45
Banc of America Mortgage 2007-1 Trust,
6.000%, 3-25-37		213		31
Banc of America Mortgage Trust 2004-3,
4.875%, 4-25-19		71		42
Banc of America Structured Securities Trust 2002-X1 F,
6.274%, 10-11-33 (B)		250		204
BankAmerica Manufactured Housing Contract Trust,
7.015%, 1-10-28		38		37
Bear Stearns Commercial Mortgage Securities Inc.,       Series 2000-WF1 Trust Fund,
6.500%, 2-15-32		150		109
Bear Stearns Commercial Mortgage Securities Trust 2002-TOP6,
7.354%, 10-15-36 (A)(C)		170		101
Capital One Auto Finance Trust 2005-B-SS,
4.480%, 12-15-10		64		64
C-Bass 2005-CB3 Trust,
5.109%, 5-25-35 (C)		129		123
C-Bass 2005-CB7 Trust,
5.147%, 11-25-35 (C)		4		4
C-Bass 2006-CB2 Trust,
5.860%, 12-25-36		285		72
C-Bass 2006-MH1 Trust,
5.970%, 10-25-36 (A)(C)		138		120
Centex Home Equity Loan Trust 2005-C,
5.048%, 6-25-35 (C)		210		168
Chase Commercial Mortgage Securities Corp., Commercial       Mortgage Pass-Through Certificates, Series 1999-2,
7.198%, 1-15-32		81		81
CHEQ Home Equity Loan Trust, Series 2006-S2,
0.424%, 7-25-27 (C)		9		9
Citigroup Mortgage Loan Trust Inc., Mortgage Pass-Through       Certificates, Series 2004-2,
6.500%, 8-25-18 (A)		5		5
CitiMortgage Alternative Loan Trust, Series 2007-A7,
6.237%, 7-25-37 (C)		54		––	*
CountryPlace Manufactured Housing Contract Trust 2005-1,
4.800%, 12-15-35 (B)(C)		245		160
CWHEQ Home Equity Loan Trust, Series 2006-S3,
6.518%, 1-25-29 (C)		207		44
Flagstar Home Equity Loan Trust 2007-1,
5.997%, 1-25-35 (A)(C)		125		21
Global Mortgage Securitization 2005-A Ltd. and Global Mortgage       Securitization 2005-A LLC:
5.250%, 4-25-32		76		44
5.402%, 4-25-32 (C)		110		38
Global Mortgage Securitization Ltd. and Global Mortgage       Securitization, LLC,
5.250%, 11-25-32 (B)		144		97
Home Equity Loan Trust 2003-HS2,
5.090%, 7-25-33 (C)		6		5
Hometown Commercial Capital, LLC Hometown Commercial       Mortgage Pass-Through Notes 2006-1,
5.506%, 11-11-38 (B)		183		82
J.P. Morgan Alternative Loan Trust 2006-A6,
5.950%, 11-25-36 (C)		250		115
J.P. Morgan Chase Commercial Mortgage Securities Corp.,
6.221%, 10-12-37 (A)		200		127
J.P. Morgan Mortgage Acquisition Trust 2006-CW2,
6.337%, 8-25-36 (C)		270		76
J.P. Morgan Mortgage Trust 2005-S2,
5.673%, 9-25-35 (C)		185		34
J.P. Morgan Mortgage Trust 2006-A2,
5.098%, 11-25-33 (C)		62		34
J.P. Morgan Mortgage Trust 2006-A6,
6.041%, 10-25-36 (C)		225		135
J.P. Morgan Mortgage Trust 2006-S3,
6.187%, 8-25-36		377		21
J.P. Morgan Mortgage Trust 2007-A1,
4.822%, 7-25-35 (C)		294		23
LB-UBS Commercial Mortgage Trust 2003-C3,
4.846%, 2-15-37 (A)(C)	100			41
Lehman ABS Manufactured Housing Contract Trust 2001-B,
3.010%, 3-15-10		96		58
Lehman XS Trust, Series 2005-8,
5.690%, 12-25-35		306		189
Mid-State Capital Corporation 2004-1 Trust,
6.005%, 8-15-37		111		83
NationsLink Funding Corporation, Commercial Mortgage       Pass-Through Certificates, Series 1998-2,
5.000%, 8-20-30 (A)		50		42
Nomura Asset Securities Corporation, Commercial Mortgage       Pass-Through Certificates, Series 1998-D6,
6.000%, 3-15-30 (A)		200		162
Origen Manufactured Housing Contract Trust 2004-A,
5.700%, 1-15-35		100		74
Origen Manufactured Housing Contract Trust 2004-B,
4.750%, 8-15-21		100		91
Origen Manufactured Housing Contract Trust 2005-B:
5.605%, 5-15-22		35		30
5.910%, 1-15-37		100		71
PHH Alternative Mortgage Trust, Series 2007-1, Class II-B-2,
6.000%, 2-25-37		97		8
RALI Series 2003-QS11 Trust,
5.750%, 6-25-33		198		122
RAMP Series 2005-RS1 Trust,
5.145%, 1-25-35 (C)		212		28
RASC Series 2003-KS10 Trust,
6.410%, 12-25-33		24		9
RESI Finance Limited Partnership 2003-C and       RESI Finance DE Corporation 2003-C,
1.723%, 9-10-35 (B)(C)		114		49
RFMSI Series 2004-S5 Trust,
4.500%, 5-25-19		72		54
Structured Adjustable Rate Mortgage Loan Trust, Series 2005-21,
5.400%, 11-25-35 (C)		144		19
Structured Asset Securities Corporation:
6.290%, 11-25-32 (C)		23		9
5.250%, 8-25-33		128		77
5.630%, 5-25-34 (C)		63		25
6.000%, 6-25-34 (C)		184		66
Wells Fargo Alternative Loan 2007-PA3 Trust:
6.086%, 7-25-37 (C)		152		9
6.086%, 7-25-37 (C)		119		4
				4,302
TOTAL CORPORATE DEBT SECURITIES - 18.07%			$	4,649
(Cost: $9,874)

UNITED STATES GOVERNMENT       AGENCY OBLIGATIONS
Agency Obligations - 0.82%
Federal National Mortgage Association,
3.875%, 7-12-13 (D)	200			211
Mortgage-Backed Obligations - 68.43%
Federal Home Loan Mortgage Corporation Fixed       Rate Participation Certificates:
5.000%, 5-1-18		205		215
5.500%, 6-1-19		117		123
6.000%, 9-1-22		462		490
5.300%, 1-15-33		228		236
6.000%, 10-1-33		420		444
5.000%, 7-1-34		440		447
6.000%, 7-1-34		960		1,003
5.500%, 2-1-35		152		157
5.500%, 2-1-35		77		80
5.500%, 7-1-35		640		661
5.000%, 8-1-35		296		302
5.000%, 11-1-35		464		474
6.500%, 7-1-36		419		446
7.000%, 12-1-37		61		65
4.500%, 7-1-39 TBA		95		94
Federal National Mortgage Association Fixed       Rate Pass-Through Certificates:
5.500%, 3-1-18		119		125
5.000%, 10-1-18		106		111
5.500%, 9-1-19		70		74
4.500%, 7-1-20 TBA		500		510
7.000%, 11-1-32		86		94
5.500%, 5-1-33		734		757
6.000%, 6-1-33		312		329
6.000%, 12-1-33		212		225
5.500%, 1-1-34		117		122
5.500%, 1-1-34		116		121
5.000%, 2-1-34		272		278
5.500%, 2-1-34		285		295
5.500%, 2-1-34		260		270
5.000%, 3-1-34		506		517
6.000%, 4-1-34		135		142
5.000%, 7-1-34		285		290
6.000%, 7-1-34		515		538
6.500%, 8-1-34		185		197
5.500%, 9-1-34		68		71
6.500%, 9-1-34		47		51
5.500%, 11-1-34		189		196
6.000%, 11-1-34		67		70
6.500%, 11-1-34		138		148
6.500%, 11-1-34		94		100
6.000%, 12-1-34		327		344
5.500%, 2-1-35		410		427
6.500%, 3-1-35		90		97
6.000%, 4-1-35		406		428
6.000%, 6-1-35		321		337
5.000%, 7-1-35		64		66
5.500%, 7-1-35		141		146
5.500%, 8-1-35		82		85
5.500%, 10-1-35		427		445
5.500%, 10-1-35		122		127
6.000%, 10-1-35		524		549
6.000%, 1-1-36		810		850
6.500%, 2-1-36		74		79
6.500%, 6-1-36		126		135
6.500%, 8-1-37		267		285
6.000%, 9-1-37		130		136
6.500%, 9-1-37		237		252
5.500%, 5-1-38		891		921
6.000%, 7-1-38		158		165
Government National Mortgage Association Agency       REMIC/CMO (Interest Only), (E)
0.914%, 6-17-45 (C)	1,340			49
Government National Mortgage Association Fixed Rate       Pass-Through Certificates:
6.250%, 7-15-24		81		87
5.500%, 12-15-34		267		276
5.500%, 7-1-35		195		201
5.500%, 7-15-38		138		142
5.500%, 10-15-38		102		106
				17,603
Non-Agency REMIC/CMO - 2.03%
Government National Mortgage Association Non-Agency       REMIC/CMO,
5.008%, 12-16-25 (C)		500		523
TOTAL UNITED STATES GOVERNMENT       AGENCY OBLIGATIONS - 71.28%			$	18,337
(Cost: $17,922)

SHORT-TERM SECURITIES
Commercial Paper - 20.87%
Burlington Northern Santa Fe Corp.,
0.540%, 7-2-09	1,300		1,300
Colgate-Palmolive Company,
0.150%, 7-10-09	891		891
Heinz (H.J.) Finance Co. (Heinz (H.J.) Co.),
0.500%, 7-15-09	1,500		1,500
Kraft Foods Inc.,
0.350%, 7-16-09	1,680		1,679
			5,370
Master Note - 5.91%
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (C)	1,520		1,520
United States Government Agency Obligations - 2.92%
Federal Home Loan Mortgage Corporation,
0.020%, 7-1-09	750		750
TOTAL SHORT-TERM SECURITIES - 29.70%		$	7,640
(Cost: $7,640)
TOTAL INVESTMENT SECURITIES - 119.05%		$	30,626
(Cost: $35,436)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (19.05%)			(4,901	)
NET ASSETS - 100.00%		$	25,725

Notes to Schedule of Investments

*Not shown due to rounding.

(A)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be liquid under guidelines established by the Board of Trustees. At June 30, 2009, the total value of these securities amounted to $774 or 3.01% of net assets.

(B)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be illiquid under guidelines established by the Board of Trustees. At June 30, 2009, the total value of these securities amounted to $656 or 2.55% of net assets.

(C)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

(D)Security serves as collateral for the following open futures contracts at June 30, 2009:

Description	Type	Expiration Date	Number of Contracts	Market Value	Unrealized Depreciation
U.S. 30 Year Treasury Bond	Short	9-21-09	--*	$(1,302)		$(5)

(E)Amount shown in principal column represents notional amount for computation of interest.

The following acronyms are used throughout this schedule:
CMO = Collateralized Mortgage Obligation
REMIC = Real Estate Mortgage Investment Conduit
TBA = To Be Announced

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	35,439
Gross unrealized appreciation		431
Gross unrealized depreciation		(5,244	)
Net unrealized depreciation	$	(4,813	)

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

Real Estate Securities

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Stocks	95.14%
Financials	94.91%
Telecommunication Services	0.23%
Cash and Cash Equivalents	4.86%

Top 10 Equity Holdings

Company	Sector	Industry
Simon Property Group, Inc.	Financials	Retail REITs
Public Storage, Inc.	Financials	Specialized REITs
Vornado Realty Trust	Financials	Diversified REITs
Boston Properties, Inc.	Financials	Office REITs
Health Care Property Investors, Inc.	Financials	Specialized REITs
Equity Residential	Financials	Residential REITs
Ventas, Inc.	Financials	Specialized REITs
Digital Realty Trust, Inc.	Financials	Office REITs
Health Care REIT, Inc.	Financials	Specialized REITs
AvalonBay Communities, Inc.	Financials	Residential REITs
See your advisor for more information on the Portfolio's most recently published Top 10 Equity Holdings.

SCHEDULE OF INVESTMENTS

Real Estate Securities (in thousands)

JUNE 30, 2009 (UNAUDITED)

COMMON STOCKS	Shares		Value
Diversified Real Estate Activities - 0.25%
Jones Lang LaSalle Incorporated		2	$	62
Diversified REITs - 10.08%
Colonial Properties Trust		9		63
Liberty Property Trust		15		350
PS Business Parks, Inc.		5		223
Vornado Realty Trust		30		1,358
Washington Real Estate Investment Trust		22		488
				2,482
Industrial REITs - 5.20%
AMB Property Corporation		15		282
DCT Industrial Trust Inc.		65		265
EastGroup Properties, Inc.		10		337
ProLogis		49		397
				1,281
Office REITs - 18.84%
Alexandria Real Estate Equities, Inc.		5		193
BioMed Realty Trust, Inc.		24		249
Boston Properties, Inc.		25		1,184
Brandywine Realty Trust		21		155
Corporate Office Properties Trust		17		502
Cousins Properties Incorporated		12		105
Digital Realty Trust, Inc.		23		817
Douglas Emmett, Inc.		43		387
Duke Realty Corporation		15		134
Highwoods Properties, Inc.		17		380
Kilroy Realty Corporation		9		193
Mack-Cali Realty Corporation		11		255
SL Green Realty Corp.		4		85
				4,639
Real Estate Management & Development - 0.24%
CB Richard Ellis Group, Inc., Class A (A)		6		59
Residential REITs - 16.92%
American Campus Communities, Inc.		11		253
AvalonBay Communities, Inc.		12		675
BRE Properties, Inc., Class A		16		378
Camden Property Trust		10		287
Equity Lifestyle Properties, Inc.		4		145
Equity Residential		45		1,004
Essex Property Trust, Inc.		10		641
Home Properties, Inc.		9		297
Mid-America Apartment Communities, Inc.		10		371
UDR, Inc.		11		116
				4,167
Retail REITs - 20.78%
Acadia Realty Trust		27		349
CBL & Associates Properties, Inc.		41		223
Federal Realty Investment Trust		12		592
Kimco Realty Corporation		28		282
Macerich Company (The)		7		119
National Retail Properties, Inc.		17		288
Regency Centers Corporation		17		604
Saul Centers, Inc.		5		151
Simon Property Group, Inc.		40		2,053
Tanger Factory Outlet Centers, Inc.		8		263
Taubman Centers, Inc.		7		193
				5,117
Specialized REITs - 22.47%
DiamondRock Hospitality Company		14		86
Entertainment Properties Trust		4		89
Health Care Property Investors, Inc.		54		1,153
Health Care REIT, Inc.		21		716
Host Hotels & Resorts, Inc.		76		639
LaSalle Hotel Properties		5		62
Nationwide Health Properties, Inc.		19		489
Public Storage, Inc.		21		1,387
Ventas, Inc.		31		911
				5,532
Wireless Telecommunication Service - 0.23%
American Tower Corporation, Class A (A)		2		57
TOTAL COMMON STOCKS - 95.01%			$	23,396
(Cost: $35,194)
INVESTMENT FUNDS - 0.13%
Sector Fund-Real Estate
ProShares UltraShort Real Estate		2	$	31
(Cost: $32)

SHORT-TERM SECURITIES - 3.98%	Principal
Master Note
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (B)		$979	$	979
(Cost: $979)
TOTAL INVESTMENT SECURITIES - 99.12%			$	24,406
(Cost: $36,205)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.88%				218
NET ASSETS - 100.00%			$	24,624

Notes to Schedule of Investments

(A)No dividends were paid during the preceding 12 months.

(B)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

The following acronym is used throughout this schedule:
REIT = Real Estate Investment Trust

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	36,781
Gross unrealized appreciation		180
Gross unrealized depreciation		(12,555	)
Net unrealized depreciation	$	(12,375	)

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

Science and Technology

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Stocks	82.55%
Information Technology	44.61%
Health Care	11.77%
Consumer Staples	7.44%
Industrials	5.84%
Energy	4.60%
Telecommunication Services	3.93%
Materials	3.04%
Financials	0.82%
Consumer Discretionary	0.50%
Bonds	3.82%
Corporate Debt Securities	3.82%
Cash and Cash Equivalents	13.63%

Top 10 Equity Holdings

Company	Sector	Industry
ESCO Technologies Inc.	Industrials	Industrial Machinery
Noble Energy, Inc.	Energy	Oil & Gas Exploration & Production
Research In Motion Limited	Information Technology	Communications Equipment
Cree, Inc.	Information Technology	Semiconductors
Aspen Technology, Inc.	Information Technology	Application Software
Bunge Limited	Consumer Staples	Agricultural Products
Archer Daniels Midland Company	Consumer Staples	Agricultural Products
Alliance Data Systems Corporation	Information Technology	Data Processing & Outsourced Services
Genzyme Corporation	Health Care	Biotechnology
Microsoft Corporation	Information Technology	Systems Software
See your advisor for more information on the Portfolio's most recently published Top 10 Equity Holdings.

SCHEDULE OF INVESTMENTS

Science and Technology (in thousands)

JUNE 30, 2009 (UNAUDITED)

COMMON STOCKS	Shares		Value
Agricultural Products - 7.44%
Archer Daniels Midland Company		343	$	9,179
Bunge Limited		164		9,906
				19,085
Application Software - 9.46%
ACI Worldwide, Inc. (A)		515		7,184
Aspen Technology, Inc. (A)		1,164		9,928
Lawson Software, Inc. (A)		1,286		7,173
				24,285
Biotechnology - 8.28%
Amgen Inc. (A)		124		6,580
Genzyme Corporation (A)		135		7,539
Isis Pharmaceuticals, Inc. (A)		155		2,562
Vertex Pharmaceuticals Incorporated (A)		129		4,587
				21,268
Communications Equipment - 4.91%
CommScope, Inc. (A)		67		1,754
Research In Motion Limited (A)		153		10,835
				12,589
Data Processing & Outsourced Services - 9.03%
Alliance Data Systems Corporation (A)		203		8,357
Euronet Worldwide, Inc. (A)		341		6,607
Fidelity National Information Services, Inc.		185		3,693
Lender Processing Services, Inc.		163		4,527
				23,184
Diversified Chemicals - 2.49%
E.I. du Pont de Nemours and Company		128		3,277
FMC Corporation		66		3,117
				6,394
Electrical Components & Equipment - 0.99%
POWER-ONE, INC. (A)		860		1,281
Ultralife Corporation (A)		177		1,269
				2,550
Electronic Equipment & Instruments - 2.09%
IPG Photonics Corporation (A)		85		927
Itron, Inc. (A)		81		4,444
				5,371
Fertilizers & Agricultural Chemicals - 0.55%
Sociedad Quimica y Minera de Chile S.A., ADR		39		1,408
General Merchandise Stores - 0.50%
Conn's, Inc. (A)		104		1,295
Health Care Distributors - 0.22%
Animal Health International, Inc. (A)		359		556
Health Care Equipment - 0.47%
STERIS Corporation		47		1,218
Health Care Facilities - 1.73%
HealthSouth Corporation (A)		307		4,434
Health Care Supplies - 0.18%
TranS1 Inc. (A)		75		466
Health Care Technology - 0.75%
Eclipsys Corporation (A)		108		1,922
Home Entertainment Software - 2.10%
Nintendo Co., Ltd. (B)		20		5,390
Industrial Machinery - 4.85%
ESCO Technologies Inc. (A)		247		11,084
Pentair, Inc.		52		1,342
				12,426
Integrated Telecommunication Services - 2.98%
AT&T Inc.		176		4,369
CenturyTel, Inc.		106		3,266
				7,635
Internet Software & Services - 0.95%
SAVVIS, Inc. (A)		214		2,449
IT Consulting & Other Services - 2.71%
Telvent GIT, S.A.		321		6,955
Life & Health Insurance - 0.82%
Amil Participacoes S.A. (B)		436		2,099
Managed Health Care - 0.14%
AMERIGROUP Corporation (A)		13		349
Oil & Gas Equipment & Services - 0.29%
ION Geophysical Corporation (A)		285		732
Oil & Gas Exploration & Production - 4.31%
Noble Energy, Inc.		188		11,063
Semiconductors - 10.48%
Cree, Inc. (A)		351		10,302
Micron Technology, Inc. (A)		508		2,568
Microsemi Corporation (A)		77		1,065
PMC-Sierra, Inc. (A)		710		5,651
Samsung Electronics Co., Ltd. (B)		16		7,296
				26,882
Systems Software - 2.88%
Microsoft Corporation		310		7,378
Wireless Telecommunication Service - 0.95%
Sprint Nextel Corporation (A)		508		2,442
TOTAL COMMON STOCKS - 82.55%			$	211,825
(Cost: $234,093)

CORPORATE DEBT SECURITIES	Principal
Data Processing & Outsourced Services - 1.21%
Alliance Data Systems Corporation, Convertible,
4.750%, 5-15-14	$	3,000		3,094
Technology - 2.61%
Advanced Micro Devices, Inc., Convertible,
5.750%, 8-15-12		7,000		4,305
Eastman Kodak Company, Convertible,
3.375%, 10-15-33		3,000		2,415
				6,720
TOTAL CORPORATE DEBT SECURITIES - 3.82%			$	9,814
(Cost: $9,908)
SHORT-TERM SECURITIES
Commercial Paper - 9.73%
Burlington Northern Santa Fe Corp.,
0.450%, 7-2-09		5,000		5,000
Colgate-Palmolive Company,
0.150%, 7-10-09		4,227		4,227
Johnson & Johnson,
0.100%, 7-13-09		2,000		2,000
Kraft Foods Inc.,
0.300%, 7-9-09		6,000		5,999
Straight-A Funding, LLC (Federal Financing Bank),
0.270%, 7-24-09		5,000		4,999
Total Capital SA,
0.080%, 7-1-09		2,737		2,737
				24,962
United States Government Agency Obligations - 1.95%
Federal National Mortgage Association,
0.090%, 7-22-09		5,000		5,000
TOTAL SHORT-TERM SECURITIES - 11.68%			$	29,962
(Cost: $29,962)
TOTAL INVESTMENT SECURITIES - 98.05%			$	251,601
(Cost: $273,963)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.95%				5,004
NET ASSETS - 100.00%			$	256,605

Notes to Schedule of Investments

(A)No dividends were paid during the preceding 12 months.

(B)Listed on an exchange outside the United States.

The following acronym is used throughout this schedule:
ADR = American Depositary Receipts

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	275,186
Gross unrealized appreciation		24,141
Gross unrealized depreciation		(47,726	)
Net unrealized depreciation	$	(23,585	)

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

Small Cap Growth

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Stocks	89.59%
Information Technology	32.55%
Health Care	19.58%
Consumer Discretionary	16.91%
Industrials	5.28%
Consumer Staples	5.24%
Financials	4.25%
Energy	3.63%
Telecommunication Services	1.51%
Materials	0.64%
Cash and Cash Equivalents	10.41%

Top 10 Equity Holdings

Company	Sector
Constant Contact, Inc.	Information Technology
Scientific Games Corporation, Class A	Consumer Discretionary
MICROS Systems, Inc.	Information Technology
Riverbed Technology, Inc.	Information Technology
CommVault Systems, Inc.	Information Technology
LKQ Corporation	Consumer Discretionary
Capella Education Company	Consumer Discretionary
NuVasive, Inc.	Health Care
DTS, Inc.	Information Technology
Vocus, Inc.	Information Technology
See your advisor for more information on the Portfolio's most recently published Top 10 Equity Holdings.

SCHEDULE OF INVESTMENTS

Small Cap Growth (in thousands)

JUNE 30, 2009 (UNAUDITED)

COMMON STOCKS	Shares		Value
Application Software - 6.78%
Blackbaud, Inc.		413	$	6,420
Blackboard Inc. (A)		198		5,717
Epiq Systems, Inc. (A)		201		3,088
FactSet Research Systems, Inc.		125		6,255
				21,480
Auto Parts & Equipment - 3.27%
LKQ Corporation (A)		630		10,362
Automotive Retail - 0.98%
Monro Muffler Brake, Inc.		121		3,103
Broadcasting - 2.10%
DG FastChannel, Inc. (A)		363		6,650
Casinos & Gaming - 4.06%
Scientific Games Corporation, Class A (A)		816		12,871
Communications Equipment - 4.54%
Neutral Tandem, Inc. (A)		92		2,716
Riverbed Technology, Inc. (A)		503		11,667
				14,383
Construction & Engineering - 1.38%
Chicago Bridge & Iron Company N.V., NY Shares		353		4,373
Construction & Farm Machinery & Heavy Trucks - 2.39%
Bucyrus International, Inc., Class A		265		7,580
Consumer Finance - 1.06%
EZCORP, Inc., Class A (A)		311		3,350
Diversified Metals & Mining - 0.64%
Thompson Creek Metals Company Inc. (A)		197		2,018
Education Services - 5.54%
American Public Education, Inc. (A)		185		7,336
Capella Education Company (A)		170		10,186
				17,522
Electronic Components - 2.76%
DTS, Inc. (A)		323		8,743
Health Care Distributors - 2.12%
PSS World Medical, Inc. (A)		363		6,712
Health Care Equipment - 7.07%
ABIOMED, Inc. (A)		530		4,677
Masimo Corporation (A)		89		2,146
NuVasive, Inc. (A)		224		9,977
Volcano Corporation (A)		402		5,623
				22,423
Health Care Services - 4.97%
athenahealth, Inc. (A)		161		5,959
Healthways, Inc. (A)		262		3,521
HMS Holdings Corp. (A)		153		6,246
				15,726
Health Care Technology - 3.76%
Allscripts Healthcare Solutions, Inc.		310		4,912
Omnicell, Inc. (A)		257		2,758
Phase Forward Incorporated (A)		281		4,242
				11,912
Hotels, Resorts & Cruise Lines - 0.96%
Gaylord Entertainment Company (A)		239		3,033
Integrated Telecommunication Services - 1.51%
NTELOS Holdings Corp.		260		4,783
Internet Software & Services - 11.02%
Bankrate, Inc. (A)		167		4,213
Constant Contact, Inc. (A)		768		15,240
LogMeIn, Inc. (A)		25		400
VistaPrint Limited (A)		165		7,032
Vocus, Inc. (A)		405		8,009
				34,894
Investment Banking & Brokerage - 1.34%
Greenhill & Co., Inc.		18		1,300
RiskMetrics Group, Inc. (A)		166		2,931
				4,231
Life Sciences Tools & Services - 1.66%
Illumina, Inc. (A)		135		5,265
Oil & Gas Equipment & Services - 1.12%
TESCO Corporation (A)		447		3,547
Oil & Gas Exploration & Production - 2.51%
Bill Barrett Corporation (A)		289		7,938
Packaged Foods & Meats - 3.13%
Ralcorp Holdings, Inc. (A)		72		4,368
Smart Balance, Inc. (A)		811		5,524
				9,892
Personal Products - 2.11%
Alberto-Culver Company		263		6,686
Railroads - 1.51%
Kansas City Southern (A)		296		4,772
Specialized Finance - 1.85%
Financial Federal Corporation		286		5,882
Systems Software - 7.45%
CommVault Systems, Inc. (A)		695		11,523
MICROS Systems, Inc. (A)		477		12,075
				23,598
TOTAL COMMON STOCKS - 89.59%			$	283,729
(Cost: $306,364)

SHORT-TERM SECURITIES	Principal
Commercial Paper - 10.10%
Baxter International Inc.,
0.280%, 7-8-09	$	5,000		5,000
Clorox Co.,
0.435%, 7-20-09		1,366		1,366
General Mills, Inc.:
0.400%, 7-9-09		3,000		3,000
0.450%, 7-10-09		3,000		3,000
Heinz (H.J.) Finance Co. (Heinz (H.J.) Co.),
0.500%, 7-15-09		4,000		3,999
Pfizer Inc.,
0.150%, 7-22-09		2,000		2,000
Total Capital SA,
0.080%, 7-1-09		8,600		8,599
Unilever Capital Corporation,
0.160%, 7-9-09		5,000		5,000
				31,964
Master Note - 0.66%
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (B)		2,095		2,095
TOTAL SHORT-TERM SECURITIES - 10.76%			$	34,059
(Cost: $34,059)
TOTAL INVESTMENT SECURITIES - 100.35%			$	317,788
(Cost: $340,423)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.35%)				(1,120	)
NET ASSETS - 100.00%			$	316,668

Notes to Schedule of Investments

(A) No dividends were paid during the preceding 12 months.

(B) Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	342,750
Gross unrealized appreciation		26,605
Gross unrealized depreciation		(51,567	)
Net unrealized depreciation	$	(24,962	)

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

Small Cap Value

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Stocks	92.60%
Financials	21.85%
Information Technology	20.79%
Consumer Discretionary	17.10%
Industrials	11.28%
Materials	6.71%
Consumer Staples	4.76%
Utilities	4.13%
Health Care	3.55%
Energy	2.43%
Cash and Cash Equivalents	7.40%

Top 10 Equity Holdings

Company	Sector
Silgan Holdings Inc.	Materials
Monro Muffler Brake, Inc.	Consumer Discretionary
Regal Entertainment Group	Consumer Discretionary
Southwest Gas Corporation	Utilities
99 Cents Only Stores	Consumer Discretionary
Corrections Corporation of America	Industrials
BJ's Wholesale Club, Inc.	Consumer Staples
American Campus Communities, Inc.	Financials
Ruddick Corporation	Consumer Staples
PMC-Sierra, Inc.	Information Technology
See your advisor for more information on the Portfolio's most recently published Top 10 Equity Holdings.

SCHEDULE OF INVESTMENTS

Small Cap Value (in thousands)

JUNE 30, 2009 (UNAUDITED)

COMMON STOCKS	Shares		Value
Apparel Retail - 1.15%
Finish Line, Inc. (The), Class A		247	$	1,835
Apparel, Accessories & Luxury Goods - 1.18%
Warnaco Group, Inc. (The) (A)		58		1,882
Application Software - 1.78%
Quest Software, Inc. (A)		80		1,117
TIBCO Software Inc. (A)		240		1,719
				2,836
Asset Management & Custody Banks - 0.99%
Ares Capital Corporation		195		1,573
Auto Parts & Equipment - 0.25%
Superior Industries International, Inc.		28		395
Automotive Retail - 2.00%
Monro Muffler Brake, Inc.		124		3,180
Broadcasting - 1.22%
Liberty Media Corporation, Liberty Capital Series A (A)		143		1,942
Casinos & Gaming - 1.79%
Ameristar Casinos, Inc.		52		995
Pinnacle Entertainment, Inc. (A)		200		1,855
				2,850
Commercial Printing - 1.69%
Corrections Corporation of America (A)		158		2,681
Communications Equipment - 1.90%
Avocent Corporation (A)		119		1,661
Tellabs, Inc. (A)		238		1,366
				3,027
Construction & Engineering - 0.83%
MasTec, Inc. (A)		113		1,328
Consumer Finance - 1.11%
First Cash Financial Services, Inc. (A)		101		1,770
Data Processing & Outsourced Services - 0.39%
Global Cash Access, Inc. (A)		79		625
Diversified Chemicals - 0.95%
FMC Corporation		32		1,518
Diversified Metals & Mining - 0.97%
Thompson Creek Metals Company Inc. (A)		151		1,538
Education Services - 2.22%
Corinthian Colleges, Inc. (A)		72		1,216
Lincoln Educational Services Corporation (A)		110		2,311
				3,527
Electric Utilities - 2.40%
NV Energy, Inc.		234		2,523
Unitil Corporation		63		1,295
				3,818
Electronic Manufacturing Services - 1.34%
Celestica Inc. (A)		313		2,133
Fertilizers & Agricultural Chemicals - 1.04%
Terra Industries Inc.		69		1,659
Food Retail - 3.08%
Casey's General Stores, Inc.		88		2,253
Ruddick Corporation		113		2,645
				4,898
Gas Utilities - 1.73%
Southwest Gas Corporation		124		2,755
General Merchandise Stores - 2.89%
99 Cents Only Stores (A)		199		2,704
Fred's Inc., Class A		150		1,884
				4,588
Health Care Facilities - 1.13%
AmSurg Corp. (A)		84		1,794
Homebuilding - 1.71%
M.D.C. Holdings, Inc.		66		1,981
M/I Homes, Inc.		75		737
				2,718
Human Resource & Employment Services - 1.71%
Resources Connection, Inc. (A)		71		1,226
Watson Wyatt & Company Holdings, Inc., Class A		40		1,490
				2,716
Hypermarkets & Super Centers - 1.68%
BJ's Wholesale Club, Inc. (A)		83		2,669
Industrial Machinery - 1.64%
Chart Industries, Inc. (A)		88		1,609
IDEX Corporation		41		1,002
				2,611
Investment Banking & Brokerage - 4.55%
KBW, Inc. (A)		88		2,531
Piper Jaffray Companies (A)		57		2,505
Stifel Financial Corp. (A)		46		2,193
				7,229
IT Consulting & Other Services - 0.79%
Forrester Research, Inc. (A)		51		1,252
Managed Health Care - 2.42%
AMERIGROUP Corporation (A)		85		2,269
Coventry Health Care, Inc. (A)		85		1,583
				3,852
Metal & Glass Containers - 2.22%
Silgan Holdings Inc.		72		3,525
Movies & Entertainment - 1.87%
Regal Entertainment Group		224		2,974
Oil & Gas Drilling - 0.48%
Precision Drilling Trust		157		764
Oil & Gas Exploration & Production - 1.95%
Cabot Oil & Gas Corporation		53		1,615
Comstock Resources, Inc. (A)		45		1,484
				3,099
Regional Banks - 8.85%
Bank of Marin Bancorp		30		795
East West Bancorp, Inc.		170		1,100
First Horizon National Corporation		124		1,484
Glacier Bancorp, Inc.		105		1,554
Home BancShares, Inc.		32		611
IBERIABANK Corporation		61		2,404
Pacific Continental Corporation		89		1,075
PacWest Bancorp		83		1,088
Sierra Bancorp		53		669
Texas Capital Bancshares, Inc. (A)		123		1,898
Wintrust Financial Corporation		88		1,413
				14,091
Reinsurance - 3.76%
IPC Holdings, Ltd.		87		2,380
Platinum Underwriters Holdings, Ltd.		59		1,695
RenaissanceRe Holdings Ltd.		41		1,913
				5,988
Residential REITs - 1.68%
American Campus Communities, Inc.		120		2,666
Restaurants - 0.82%
Jack in the Box Inc. (A)		58		1,300
Security & Alarm Services - 2.44%
Brink's Company (The)		48		1,385
GEO Group, Inc. (The) (A)		134		2,495
				3,880
Semiconductor Equipment - 2.00%
Lam Research Corporation (A)		52		1,357
Verigy Ltd. (A)		150		1,821
				3,178
Semiconductors - 6.81%
Atmel Corporation (A)		517		1,930
Cirrus Logic, Inc. (A)		296		1,331
Cypress Semiconductor Corporation (A)		182		1,676
NVIDIA Corporation (A)		135		1,519
PMC-Sierra, Inc. (A)		332		2,640
Sigma Designs, Inc. (A)		108		1,726
				10,822
Specialty Chemicals - 1.53%
Sensient Technologies Corporation		108		2,440
Systems Software - 1.40%
Sybase, Inc. (A)		71		2,233
Technology Distributors - 4.38%
Anixter International Inc. (A)		39		1,447
Arrow Electronics, Inc. (A)		73		1,553
Avnet, Inc. (A)		97		2,040
Tech Data Corporation (A)		59		1,923
				6,963
Thrifts & Mortgage Finance - 0.91%
First Niagara Financial Group, Inc.		126		1,442
Trucking - 2.97%
Arkansas Best Corporation		41		1,080
Marten Transport, Ltd. (A)		100		2,084
Werner Enterprises, Inc.		86		1,557
				4,721
TOTAL COMMON STOCKS - 92.60%			$	147,285
(Cost: $144,172)

SHORT-TERM SECURITIES	Principal
Commercial Paper - 6.86%
McCormick & Co. Inc.,
0.250%, 7-1-09	$	3,912		3,912
Praxair Inc.,
0.210%, 7-27-09		4,000		3,999
Unilever Capital Corporation,
0.160%, 7-9-09		3,000		3,000
				10,911
Master Note - 1.92%
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (B)		3,051		3,051
TOTAL SHORT-TERM SECURITIES - 8.78%			$	13,962
(Cost: $13,962)
TOTAL INVESTMENT SECURITIES - 101.38%			$	161,247
(Cost: $158,134)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (1.38%)				(2,194	)
NET ASSETS - 100.00%			$	159,053

Notes to Schedule of Investments

(A)No dividends were paid during the preceding 12 months.

(B) Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

The following acronym is used throughout this schedule:
REIT = Real Estate Investment Trust

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	158,172
Gross unrealized appreciation		15,104
Gross unrealized depreciation		(12,029	)
Net unrealized appreciation	$	3,075

See Accompanying Notes to Financial Statements.

PORTFOLIO HIGHLIGHTS

Value

ALL DATA IS AS OF JUNE 30, 2009 (UNAUDITED)

Asset Allocation

Stocks	97.55%
Financials	23.62%
Energy	19.13%
Consumer Staples	11.02%
Information Technology	10.54%
Health Care	9.77%
Industrials	7.91%
Consumer Discretionary	6.91%
Telecommunication Services	3.92%
Materials	3.80%
Utilities	0.93%
Cash and Cash Equivalents	2.45%

Top 10 Equity Holdings

Company	Sector
Chevron Corporation	Energy
Travelers Companies, Inc. (The)	Financials
Bank of America Corporation	Financials
McKesson Corporation	Health Care
Hewlett-Packard Company	Information Technology
AT&T Inc.	Telecommunication Services
CVS Corporation	Consumer Staples
Molson Coors Brewing Company, Class B	Consumer Staples
Occidental Petroleum Corporation	Energy
ACE Limited	Financials
See your advisor for more information on the Portfolio's most recently published Top 10 Equity Holdings.

SCHEDULE OF INVESTMENTS

Value (in thousands)

JUNE 30, 2009 (UNAUDITED)

COMMON STOCKS	Shares		Value
Aerospace & Defense - 2.11%
Raytheon Company		110	$	4,874
Airlines - 0.56%
Delta Air Lines, Inc. (A)		224		1,296
Brewers - 3.13%
Molson Coors Brewing Company, Class B		171		7,217
Communications Equipment - 2.67%
Nokia Corporation, Series A, ADR		423		6,162
Computer Hardware - 5.70%
Hewlett-Packard Company		240		9,260
International Business Machines Corporation (B)		38		3,915
				13,175
Consumer Finance - 1.59%
Capital One Financial Corporation (B)		167		3,663
Department Stores - 2.06%
Macy's Inc.		405		4,760
Diversified Chemicals - 0.99%
Solutia Inc. (A)		398		2,292
Drug Retail - 3.69%
CVS Corporation		267		8,512
Health Care Distributors - 6.99%
AmerisourceBergen Corporation		347		6,161
McKesson Corporation		227		9,975
				16,136
Home Improvement Retail - 3.94%
Home Depot, Inc. (The)		181		4,275
Lowe's Companies, Inc.		249		4,835
				9,110
Industrial Machinery - 2.36%
Illinois Tool Works Inc.		146		5,444
Integrated Oil & Gas - 13.47%
Chevron Corporation		176		11,659
Exxon Mobil Corporation		64		4,454
Marathon Oil Corporation		182		5,472
Occidental Petroleum Corporation		108		7,114
Targa Resources Partners LP		174		2,419
				31,118
Integrated Telecommunication Services - 3.92%
AT&T Inc.		365		9,059
Investment Banking & Brokerage - 2.13%
Morgan Stanley		172		4,909
Managed Health Care - 2.02%
Aetna Inc.		93		2,318
Coventry Health Care, Inc. (A)		76		1,429
UnitedHealth Group Incorporated		37		919
				4,666
Metal & Glass Containers - 1.92%
Pactiv Corporation (A)		204		4,431
Mortgage REITs - 2.02%
Annaly Capital Management, Inc.		308		4,656
Multi-Utilities - 0.93%
Duke Energy Corporation		147		2,148
Office Electronics - 2.17%
Xerox Corporation		773		5,012
Oil & Gas Storage & Transportation - 5.66%
Copano Energy, L.L.C.		134		2,152
Energy Transfer Equity, L.P.		14		348
Enterprise Products Partners L.P.		247		6,167
MarkWest Energy Partners, L.P.		100		1,820
Regency Energy Partners LP		177		2,573
				13,060
Other Diversified Financial Services - 4.82%
Bank of America Corporation		843		11,132
Pharmaceuticals - 0.76%
Johnson & Johnson		31		1,749
Property & Casualty Insurance - 7.80%
ACE Limited		154		6,820
Travelers Companies, Inc. (The)		273		11,188
				18,008
Railroads - 2.88%
Union Pacific Corporation		128		6,654
Regional Banks - 3.05%
PNC Financial Services Group, Inc. (The)		138		5,372
Zions Bancorporation		145		1,676
				7,048
Reinsurance - 2.21%
Everest Re Group, Ltd.		36		2,591
RenaissanceRe Holdings Ltd.		54		2,513
				5,104
Specialty Stores - 0.91%
Office Depot, Inc. (A)(B)		460		2,096
Tobacco - 4.20%
Altria Group, Inc.		194		3,183
Lorillard, Inc.		40		2,718
Philip Morris International Inc.		87		3,813
				9,714
TOTAL COMMON STOCKS - 96.66%			$	223,205
(Cost: $249,514)
PREFERRED STOCKS - 0.89%
Diversified Metals & Mining
Freeport-McMoRan Copper & Gold Inc.,       6.75% Cumulative Convertible (A)		26	$	2,049
(Cost: $1,301)

SHORT-TERM SECURITIES	Principal
Master Note - 0.59%
Toyota Motor Credit Corporation,
0.197%, 7-1-09 (C)	$	1,372		1,372
United States Government Agency Obligations - 0.82%
Federal Home Loan Mortgage Corporation,
0.020%, 7-1-09		1,877		1,877
TOTAL SHORT-TERM SECURITIES - 1.41%			$	3,249
(Cost: $3,249)
TOTAL INVESTMENT SECURITIES - 98.96%			$	228,503
(Cost: $254,064)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.04%				2,410
NET ASSETS - 100.00%			$	230,913

Notes to Schedule of Investments

(A)No dividends were paid during the preceding 12 months.

(B)Securities serve as cover or collateral for the following written options outstanding at June 30, 2009:

Underlying Security	Contracts Subject to Call	Expiration Month	Exercise Price	Premium Received		Market Value
International Business Machines       Corporation:	––*	July 2009	$110.00		$36		$(11)
	––*	July 2009	115.00		11		(1)
Office Depot, Inc.	4	July 2009	5.00		123		(76)
*Not shown due to rounding.					$170		$(88)
Underlying Security	Contracts Subject to Put	Expiration Month	Exercise Price	Premium Received		Market Value
Bank of America Corporation:	1	July 2009	$  7.00		$10		$(1)
	1	August 2009	7.00		24		(5)
	1	November 2009	7.00		61		(25)
Exxon Mobil Corporation	––*	July 2009	50.00		32		––
Nokia Corporation, Series A, ADR	1	July 2009	12.00		49		(3)
RenaissanceRe Holdings Ltd.	––*	July 2009	40.00		25		(2)
Zions Bancorporation	1	July 2009	7.50		50		(1)
*Not shown due to rounding.					$251		$(37)

(C)Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2009.

The following acronyms are used throughout this schedule:
ADR = American Depositary Receipts
REIT = Real Estate Investment Trust

For Federal income tax purposes, cost of investments owned at June 30, 2009 and the related unrealized appreciation (depreciation) were as follows:
Cost	$	257,273
Gross unrealized appreciation		16,045
Gross unrealized depreciation		(44,815	)
Net unrealized depreciation	$	(28,770	)

See Accompanying Notes to Financial Statements.

STATEMENT OF ASSETS AND LIABILITES

Ivy Funds VIP

AS OF JUNE 30, 2009 (UNAUDITED)

(In thousands, except per share amounts)	Pathfinder Aggressive				Pathfinder Conservative			Pathfinder Moderate			Pathfinder Moderately Aggressive			Pathfinder Moderately Conservative			Asset Strategy			Balanced
ASSETS
Investments in unaffiliated       securities at market value+		$	92		$	121		$	1,545		$	553		$	312		$	672,402		$	346,281
Investments in affiliated       securities at market value+			49,039			31,997			161,245			202,557			68,551			1,122			––
Bullion at market value+			––			––			––			––			––			131,057			––
Investments at Market Value			49,131			32,118			162,790			203,110			68,863			804,581			346,281
Cash			1			1			1			1			1			––			7
Cash denominated in foreign       currencies at market value+			––			––			––			––			––			1,073			––
Restricted cash			––			––			––			––			––			2,561			––
Unrealized appreciation on forward       foreign currency contracts			––			––			––			––			––			1,090			––
Investment securities sold receivable			––			––			––			––			––			12,327			––
Dividends and interest receivable			––	*		1			1			2			1			4,935			1,724
Capital shares sold receivable			406			1			233			282			84			1,992			2
Total Assets			49,538			32,121			163,025			203,395			68,949			828,559			348,014
LIABILITIES
Investment securities purchased       payable			––			22			1,446			454			212			20,223			––
Unrealized depreciation on forward       foreign currency contracts			––			––			––			––			––			1,504			––
Capital shares redeemed payable			4			1			49			5			3			367			495
Trustees' fees payable			––	*		––	*		1			2			1			31			30
Overdraft due to custodian			––			––			––			––			––			104			––
Service fee payable			––			––			––			––			––			5			2
Shareholder servicing payable			––	*		––	*		––	*		––	*		––	*		2			1
Investment management fee payable			––			––			––			––			––			15			7
Accounting services fee payable			1			2			3			4			2			17			8
Other liabilities			2			1			3			2			1			90			13
Total Liabilities			7			26			1,502			467			219			22,358			556
Total Net Assets		$	49,531		$	32,095		$	161,523		$	202,928		$	68,730		$	806,201		$	347,458
NET ASSETS
Capital paid in (shares       authorized - unlimited)		$	58,859		$	31,228		$	164,205		$	212,298		$	68,453		$	834,910		$	322,451
Undistributed net investment       income			722			509			2,118			2,743			978			5,013			3,591
Accumulated net realized gain (loss)			699			236			1,083			1,729			397			(93,382	)		(9,756	)
Net unrealized appreciation       (depreciation)		(10,749		)		122			(5,883	)		(13,842	)		(1,098	)		59,660			31,172
Total Net Assets		$	49,531		$	32,095		$	161,523		$	202,928		$	68,730		$	806,201		$	347,458
CAPITAL SHARES OUTSTANDING			12,498			6,969			38,282			48,524			15,432			102,179			46,214
NET ASSET VALUE PER SHARE		$3.9632			$4.6057			$4.2193			$4.1820			$4.4536			$7.8901			$7.5184
+COST
Investments in unaffiliated       securities at cost		$	92		$	121		$	1,545		$	553		$	312		$632,000			$315,109
Investments in affiliated       securities at cost			59,789			31,875			167,128			216,399			69,649			1,982			––
Bullion at cost			––			––			––			––			––			110,543			––
Cash denominated in foreign       currencies at cost			––			––			––			––			––			1,984			––

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

STATEMENT OF ASSETS AND LIABILITES

Ivy Funds VIP

AS OF JUNE 30, 2009 (UNAUDITED)

(In thousands, except per share amounts)	Bond				Core Equity			Dividend Opportunities			Energy			Global Natural Resources			Growth			High Income
ASSETS
Investments in unaffiliated securities       at market value+		$	368,556		$	373,566		$	159,753		$	25,084		$	124,330		$	780,927		$	185,993
Investments at Market Value			368,556			373,566			159,753			25,084			124,330			780,927			185,993
Cash			––			38			1			1			28			3			651
Cash denominated in foreign       currencies at market value+			––			––			––			––			––	*		––			––
Unrealized appreciation on forward       foreign currency contracts			––			––			––			––			3			––			––
Investment securities sold receivable			171			––			––			––			709			––			448
Dividends and interest receivable			3,883			639			286			30			191			587			3,671
Capital shares sold receivable			433			7			412			15			322			337			42
Variation margin receivable			––			––			––			––			61			––			––
Prepaid and other assets			––	*		––			––			––			––			––	*		1
Total Assets			373,043			374,250			160,452			25,130			125,644			781,854			190,806
LIABILITIES
Investment securities purchased       payable			3,592			983			––			143			28			––			2,979
Unrealized depreciation on forward       foreign currency contracts			––			––			––			––			43			––			––
Capital shares redeemed payable			242			202			43			5			41			436			101
Trustees' fees payable			21			58			4			––	*		3			82			13
Overdraft due to custodian			166			––			––			––			––			––			––
Service fee payable			2			2			1			––	*		1			5			1
Shareholder servicing payable			1			1			––	*		––	*		––	*		1			––	*
Investment management fee payable			5			6			3			––			3			14			3
Accounting services fee payable			10			10			5			1			5			17			6
Other liabilities			33			14			5			2			15			28			16
Total Liabilities			4,072			1,276			61			151			139			583			3,119
Total Net Assets		$	368,971		$	372,974		$	160,391		$	24,979		$	125,505		$	781,271		$	187,687
NET ASSETS
Capital paid in (shares authorized -       unlimited)		$	370,324		$	434,237		$	189,268		$	34,267		$	165,286		$	806,794		$	244,454
Undistributed (distributions in       excess of) net investment income			7,061			2,603			894			81			(218	)		2,542			8,149
Accumulated net realized loss			(1,589	)		(57,708	)		(18,608	)		(3,260	)		(31,451	)		(52,708	)		(51,003	)
Net unrealized appreciation       (depreciation)			(6,825	)		(6,158	)		(11,163	)		(6,109	)		(8,112	)		24,643			(13,913	)
Total Net Assets		$	368,971		$	372,974		$	160,391		$	24,979		$	125,505		$	781,271		$	187,687
CAPITAL SHARES OUTSTANDING			69,700			45,560			31,316			5,861			27,504			99,567			67,051
NET ASSET VALUE PER SHARE		$5.2937			$8.1859			$5.1218			$4.2618			$4.5632			$7.8467			$2.7992
+COST
Investments in unaffiliated securities       at cost		$375,382			$379,747			$170,916			$31,193			$132,535			$756,284			$199,907
Cash denominated in foreign       currencies at cost			––			––			––			––			––	*		––			––

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

STATEMENT OF ASSETS AND LIABILITES

Ivy Funds VIP

AS OF JUNE 30, 2009 (UNAUDITED)

(In thousands, except per share amounts)	International Growth				International Value			Micro Cap Growth			Mid Cap Growth			Money Market		Mortgage Securities			Real Estate Securities
ASSETS
Investments in unaffiliated       securities at market value+		$	173,189		$	426,319		$	32,146		$	66,375		$	217,339	$	30,626		$	24,406
Investments at Market Value			173,189			426,319			32,146			66,375			217,339		30,626			24,406
Cash			170			130			––			3			18		1			1
Cash denominated in foreign       currencies at market value+			321			8,866			––			––			––		––			––
Investment securities sold receivable			––			96,929			121			16			––		780			101
Dividends and interest receivable			1,175			2,684			––	*		40			993		122			111
Capital shares sold receivable			178			243			35			110			1,287		––	*		31
Variation margin receivable			––			––			––			––			––		2			––
Prepaid and other assets			––			––			––			––			14		––			––
Total Assets			175,033			535,171			32,302			66,544			219,651		31,531			24,650
LIABILITIES
Investment securities purchased payable			4,325			110,982			54			186			––		5,733			11
Capital shares redeemed payable			53			104			32			15			177		55			9
Distributions payable			––			––			––			––			18		––			––
Trustees' fees payable			16			21			2			1			8		1			1
Overdraft due to custodian			––			––			21			––			––		––			––
Service fee payable			1			3			––	*		––	*		––		––	*		––	*
Shareholder servicing payable			––	*		1			––	*		––	*		1		––	*		––	*
Investment management fee payable			4			10			1			2			2		––	*		1
Accounting services fee payable			5			10			2			3			7		2			1
Written options at market value+			––			––			––			139			––		––			––
Other liabilities			22			72			2			3			2		15			3
Total Liabilities			4,426			111,203			114			349			215		5,806			26
Total Net Assets		$	170,607		$	423,968		$	32,188		$	66,195		$	219,436	$	25,725		$	24,624
NET ASSETS
Capital paid in (shares authorized -       unlimited)		$	208,479		$	535,506		$	42,920		$	75,373		$	219,428	$	30,911		$	46,060
Undistributed (distributions in excess       of) net investment income			2,263			4,916			(181	)		20			––		545			615
Accumulated net realized gain (loss)			(34,450	)	(109,933		)		(5,432	)		(3,017	)		8		(916	)	(10,252		)
Net unrealized depreciation			(5,685	)		(6,521	)		(5,119	)		(6,181	)		––		(4,815	)	(11,799		)
Total Net Assets		$	170,607		$	423,968		$	32,188		$	66,195		$	219,436	$	25,725		$	24,624
CAPITAL SHARES OUTSTANDING			27,369			34,097			2,430			12,557			219,428		6,014			6,770
NET ASSET VALUE PER SHARE		$	6.2332		$	12.4286		$13.2439			$	5.2714		$	1.0000	$	4.2778		$	3.6375
+COST
Investments in unaffiliated       securities at cost		$	178,909		$	432,930		$	37,266		$	72,579		$	217,339	$	35,436		$	36,205
Cash denominated in foreign       currencies at cost			322			8,848			––			––			––		––			––
Written options premiums received       at cost			––			––			––			162			––		––			––

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

STATEMENT OF ASSETS AND LIABILITES

Ivy Funds VIP

AS OF JUNE 30, 2009 (UNAUDITED)

(In thousands, except per share amounts)	Science and Technology				Small Cap Growth			Small Cap Value			Value
ASSETS
Investments in unaffiliated securities at       market value+		$	251,601		$	317,788		$	161,247		$	228,503
Investments at Market Value			251,601			317,788			161,247			228,503
Cash			126			1			11			14
Cash denominated in foreign currencies       at market value+			3,874			––			––			––
Investment securities sold receivable			477			––			562			2,852
Dividends and interest receivable			191			112			33			531
Capital shares sold receivable			526			85			126			108
Prepaid and other assets			––			1			––			––
Total Assets			256,795			317,987			161,979			232,008
LIABILITIES
Investment securities purchased payable			––			1,144			1,595			810
Capital shares redeemed payable			142			113			1,307			121
Trustees' fees payable			22			34			7			16
Service fee payable			2			2			1			2
Shareholder servicing payable			1			1			1			1
Investment management fee payable			6			7			4			4
Accounting services fee payable			7			8			5			7
Written options at market value+			––			––			––			125
Other liabilities			10			10			6			9
Total Liabilities			190			1,319			2,926			1,095
Total Net Assets		$	256,605		$	316,668		$	159,053		$	230,913
NET ASSETS
Capital paid in (shares authorized - unlimited)		$	276,982		$	412,152		$	204,148		$	297,261
Undistributed (distributions in excess of) net       investment income			292			(1,195	)		136			1,704
Accumulated net realized gain (loss)			2,003			(71,654	)		(48,344	)		(42,788	)
Net unrealized appreciation (depreciation)			(22,672	)		(22,635	)		3,113			(25,264	)
Total Net Assets		$	256,605		$	316,668		$	159,053		$	230,913
CAPITAL SHARES OUTSTANDING			20,656			45,257			14,813			55,914
NET ASSET VALUE PER SHARE		$	12.4228		$	6.9971		$	10.7368		$	4.1298
+COST
Investments in unaffiliated securities at cost		$	273,963		$	340,423		$	158,134		$	254,064
Cash denominated in foreign currencies at cost			4,187			––			––			––
Written options premiums received at cost			––			––			––			421

See Accompanying Notes to Financial Statements.

STATEMENT OF OPERATIONS

Ivy Funds VIP

FOR THE SIX MONTHS ENDED JUNE 30, 2009 (UNAUDITED)

(In thousands)	Pathfinder Aggressive				Pathfinder Conservative			Pathfinder Moderate		Pathfinder Moderately Aggressive		Pathfinder Moderately Conservative			Asset Strategy			Balanced
INVESTMENT INCOME
Dividends from unaffiliated securities		$	––		$	––		$	––	$	––	$	––		$	5,953		$	3,045
Dividends from affiliated securities			748			525			2,159		2,796		1,004			––			––
Foreign dividend withholding tax			––			––			––		––		––			(182	)		(13	)
Interest and amortization from       unaffiliated securities			––	*		1			2		2		1			4,220			2,365
Foreign interest withholding tax			––			––			––		––		––			(11	)		––
Total Investment Income			748			526			2,161		2,798		1,005			9,980			5,397
EXPENSES
Investment management fee			––			––			––		––		––			2,504			1,207
Service fee			––			––			––		––		––			894			431
Shareholder servicing			––	*		––	*		1		1		––	*		5			2
Registration fees			1			1			1		1		1			––			––
Custodian fees			2			2			2		2		2			115			8
Trustees' fees			2			1			3		5		2			22			9
Accounting services fee			8			5			16		20		10			88			50
Legal fees			2			1			4		4		2			81			14
Audit fees			6			6			6		6		6			24			12
Other			4			––	*		6		8		2			76			41
Total Expenses			25			16			39		47		25			3,809			1,774
Less:
Expenses in excess of limit			––			––			––		––		––			(36	)		––
Total Net Expenses			25			16			39		47		25			3,773			1,774
Net Investment Income			723			510			2,122		2,751		980			6,207			3,623
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments in unaffiliated             securities			––			––			––		––		––		(28,499		)	(9,752		)
Investments in affiliated securities			102			68			38		15		43			––			––
Distributions of realized capital             gains from affiliated             investments			600			170			1,051		1,717		358			––			––
Futures contracts			––			––			––		––		––			(6,792	)		––
Written options			––			––			––		––		––			371			––
Forward foreign currency contracts			––			––			––		––		––			3,827			––
Foreign currency exchange             transactions			––			––			––		––		––			(1,260	)		––
Net change in unrealized appreciation       (depreciation) on:
Investments in unaffiliated             securities			––			––			––		––		––			78,189			5,953
Investments in affiliated securities			1,397			744			4,116		6,046		1,464			(89	)		––
Futures contracts			––			––			––		––		––			(12	)		––
Forward foreign currency contracts			––			––			––		––		––			(5,042	)		––
Foreign currency exchange             transactions			––			––			––		––		––			916			––
Net Realized and Unrealized             Gain (Loss)			2,099			982			5,205		7,778		1,865			41,609		(3,799		)
Net Increase (Decrease) in                   Net Assets Resulting                   from Operations		$	2,822		$	1,492		$	7,327	$	10,529	$	2,845		$	47,816		$	(176	)

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

STATEMENT OF OPERATIONS

Ivy Funds VIP

FOR THE SIX MONTHS ENDED JUNE 30, 2009 (UNAUDITED)

(In thousands)	Bond			Core Equity			Dividend Opportunities			Energy			Global Natural Resources			Growth			High Income
INVESTMENT INCOME
Dividends from unaffiliated securities	$	––		$	4,460		$	1,707		$	152		$	546		$	6,192		$	3
Foreign dividend withholding tax		––			(71	)		(14	)		(3	)		(39	)		(8	)		––
Interest and amortization from       unaffiliated securities		8,497			34			41			6			40			61			8,978
Total Investment Income		8,497			4,423			1,734			155			547			6,245			8,981
EXPENSES
Investment management fee		903			1,258			462			91			462			2,555			520
Service fee		430			449			165			27			116			913			208
Shareholder servicing		2			2			1			––	*		1			5			1
Custodian fees		8			8			5			3			70			12			6
Trustees' fees		10			8			4			––	*		2			18			4
Accounting services fee		52			58			31			7			24			87			32
Legal fees		14			13			4			1			3			28			6
Audit fees		15			13			12			10			19			13			21
Other		33			44			13			4			10			86			13
Total Expenses		1,467			1,853			697			143			707			3,717			811
Less:
Expenses in excess of limit		(86	)		(90	)		––			(71	)		––			(109	)		(41	)
Total Net Expenses		1,381			1,763			697			72			707			3,608			770
Net Investment Income (Loss)		7,116			2,660			1,037			83			(160	)		2,637			8,211
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments in unaffiliated securities		673		(35,189		)	(12,291		)	(1,981		)		(5,509	)		(2,807	)	(13,393		)
Futures contracts		––			2,751			––			––			(715	)		––			––
Forward foreign currency contracts		––			––			––			––			(262	)		––			––
Foreign currency exchange transactions		––			12			––			––			(28	)		––			––
Net change in unrealized appreciation       (depreciation) on:
Investments in unaffiliated securities		3,190		34,319			14,704				4,626			35,181			52,936			41,658
Futures contracts		––			––			––			––			134			––			––
Forward foreign currency contracts		––			––			––			––			54			––			––
Foreign currency exchange transactions		––			(1	)		––			––			9			––			––
Net Realized and Unrealized Gain		3,863			1,892			2,413			2,645			28,864			50,129			28,265
Net Increase in Net Assets Resulting                  from Operations	$	10,979		$	4,552		$	3,450		$	2,728		$	28,704		$	52,766		$	36,476

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

STATEMENT OF OPERATIONS

Ivy Funds VIP

FOR THE SIX MONTHS ENDED JUNE 30, 2009 (UNAUDITED)

(In thousands)	International Growth				International Value			Micro Cap Growth			Mid Cap Growth			Money Market		Mortgage Securities			Real Estate Securities
INVESTMENT INCOME
Dividends from unaffiliated securities		$	3,504		$	8,183		$	15		$	327		$	––	$	––		$	739
Foreign dividend withholding tax			(339	)		(618	)		(1	)		––			––		––			––	*
Interest and amortization from       unaffiliated securities			27			21			3			21			1,822		694			4
Total Investment Income			3,192			7,586			17			348			1,822		694			743
EXPENSES
Investment management fee			636			1,561			130			225			424		65			104
Service fee			187			459			34			66			––		32			29
Shareholder servicing			1			3			––	*		––	*		2		––	*		––	*
Custodian fees			18			56			3			3			6		7			6
Trustees' fees			4			10			1			2			7		1			1
Accounting services fee			32			56			12			17			42		13			8
Legal fees			5			13			2			2			9		3			2
Audit fees			18			19			10			11			8		21			19
Other			20			48			3			6			47		3			4
Total Expenses			921			2,225			195			332			545		145			173
Less:
Expenses in excess of limit			(23	)		––			––			(5	)		––		––			––
Total Net Expenses			898			2,225			195			327			545		145			173
Net Investment Income (Loss)			2,294			5,361			(178	)		21			1,277		549			570
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments in unaffiliated securities		(7,368		)	(109,923		)	(3,042		)	(1,857		)		9	(311		)		(4,323	)
Futures contracts			––			––			––			––			––		61			––
Written options			––			––			––			309			––		––			––
Forward foreign currency contracts			(771	)		––			––			––			––		––			––
Foreign currency exchange       transactions			(9	)		360			––			––			––		––			––
Net change in unrealized appreciation       (depreciation) on:
Investments in unaffiliated securities		14,677		(1)	144,924				8,283		10,647				––		381			64
Futures contracts			––			––			––			––			––		127			––
Written options			––			––			––			22			––		––			––
Forward foreign currency contracts			(236	)		––			––			––			––		––			––
Foreign currency exchange       transactions			17			122			––			––			––		––			––
Net Realized and Unrealized             Gain (Loss)			6,310			35,483			5,241			9,121			9		258			(4,259	)
Net Increase (Decrease) in Net                 Assets Resulting from                 Operations		$	8,604		$	40,844		$	5,063		$	9,142		$	1,286	$	807		$	(3,689	)

*Not shown due to rounding.

(1)Net of India deferred taxes of $5.

See Accompanying Notes to Financial Statements.

STATEMENT OF OPERATIONS

Ivy Funds VIP

FOR THE SIX MONTHS ENDED JUNE 30, 2009 (UNAUDITED)

(In thousands)	Science and Technology				Small Cap Growth			Small Cap Value			Value
INVESTMENT INCOME
Dividends from unaffiliated securities		$	1,384		$	420		$	919		$	3,189
Foreign dividend withholding tax			(61	)		––			––			(30	)
Interest and amortization from       unaffiliated securities			330			49			25			20
Total Investment Income			1,653			469			944			3,179
EXPENSES
Investment management fee			971			1,185			615			746
Service fee			286			349			181			266
Shareholder servicing			1			2			1			1
Custodian fees			10			6			7			8
Trustees' fees			5			6			4			6
Accounting services fee			43			45			32			41
Legal fees			8			10			5			8
Audit fees			16			14			14			12
Other			25			30			17			27
Total Expenses			1,365			1,647			876			1,115
Less:
Expenses in excess of limit			(23	)		(28	)		––			(11	)
Total Net Expenses			1,342			1,619			876			1,104
Net Investment Income (Loss)			311			(1,150	)		68			2,075
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments in unaffiliated securities			5,261		(17,122		)	(15,194		)	(7,505		)
Investments in affiliated securities			––			(2,341	)		––			––
Written options			(368	)		––			388			1,224
Foreign currency exchange transactions			5			––			––			––
Net change in unrealized appreciation       (depreciation) on:
Investments in unaffiliated securities			31,673			59,610		21,352				7,379
Investments in affiliated securities			––			2,304			––			––
Written options			(916	)		––			(104	)		111
Foreign currency exchange transactions			4			––			––			––
Net Realized and Unrealized Gain			35,659			42,451			6,442			1,209
Net Increase in Net Assets                   Resulting from Operations		$	35,970		$	41,301		$	6,510		$	3,284

See Accompanying Notes to Financial Statements.

STATEMENT OF CHANGES IN NET ASSETS

Ivy Funds VIP

	Pathfinder Aggressive							Pathfinder Conservative						Pathfinder Moderate
(In thousands)	Six months ended 6-30-09 (Unaudited)				Fiscal year ended 12-31-08(1)			Six months ended 6-30-09 (Unaudited)			Fiscal year ended 12-31-08(2)			Six months ended 6-30-09 (Unaudited)			Fiscal year ended 12-31-08(1)
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income		$	723		$	108		$	510		$	16		$	2,122		$	188
Net realized gain on investments			702			588			238			44			1,089			630
Net change in unrealized appreciation       (depreciation)			1,397		(12,146		)		744			(622	)		4,116			(9,999	)
Net Increase (Decrease) in             Net Assets Resulting from             Operations			2,822		(11,450		)		1,492			(562	)		7,327			(9,181	)
Distributions to Shareholders From:
Net investment income			(214	)		––			(22	)		––			(291	)		––
Net realized gains			(487	)		––			(40	)		––			(537	)		––
Total Distributions to Shareholders			(701	)		––			(62	)		––			(828	)		––
Capital Share Transactions			4,512			54,348			18,690			12,537			76,579			87,626
Net Increase in Net Assets			6,633			42,898			20,120			11,975			83,078			78,445
Net Assets, Beginning of Period			42,898			––			11,975			––			78,445			––
Net Assets, End of Period		$	49,531		$	42,898		$	32,095		$	11,975		$	161,523		$	78,445
Undistributed net investment income		$	722		$	212		$	509		$	21		$	2,118		$	287

	Pathfinder Moderately Aggressive							Pathfinder Moderately Conservative						Asset Strategy
(In thousands)	Six months ended 6-30-09 (Unaudited)				Fiscal year ended 12-31-08(1)			Six months ended 6-30-09 (Unaudited)			Fiscal year ended 12-31-08(3)			Six months ended 6-30-09 (Unaudited)			Fiscal year ended 12-31-08
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income		$	2,751		$	296		$	980		$	60		$	6,207		$	8,670
Net realized gain (loss) on investments			1,732			1,203			401			180			(32,353	)		12,245
Net change in unrealized appreciation       (depreciation)			6,046			(19,888	)		1,464			(2,562	)		73,962			(267,755	)
Net Increase (Decrease) in Net             Assets Resulting from Operations			10,529			(18,389	)		2,845			(2,322	)		47,816			(246,840	)
Distributions to Shareholders From:
Net investment income			(541	)		––			(79	)		––			(2,923	)		(3,671	)
Net realized gains			(970	)		––			(167	)		––			(78,981	)		(60,338	)
Total Distributions to Shareholders			(1,511	)		––			(246	)		––			(81,904	)		(64,009	)
Capital Share Transactions			78,204			134,095			33,959			34,494			162,095			76,364
Net Increase (Decrease) in Net Assets			87,222			115,706			36,558			32,172			128,007			(234,485	)
Net Assets, Beginning of Period			115,706			––			32,172			––			678,194			912,679
Net Assets, End of Period		$	202,928		$	115,706		$	68,730		$	32,172		$	806,201		$	678,194
Undistributed net investment income		$	2,743		$	533		$	978		$	77		$	5,013		$	2,989

(1)For the period from March 4, 2008 (commencement of operations) through December 31, 2008.
(2)For the period from March 13, 2008 (commencement of operations) through December 31, 2008.
(3)For the period from March 12, 2008 (commencement of operations) through December 31, 2008.

See Accompanying Notes to Financial Statements.

STATEMENT OF CHANGES IN NET ASSETS

Ivy Funds VIP

	Balanced							Bond						Core Equity
(In thousands)	Six months ended 6-30-09 (Unaudited)				Fiscal year ended 12-31-08			Six months ended 6-30-09 (Unaudited)			Fiscal year ended 12-31-08			Six months ended 6-30-09 (Unaudited)			Fiscal year ended 12-31-08
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income		$	3,623		$	7,291		$	7,116		$	13,698		$	2,660		$	3,964
Net realized gain (loss) on investments			(9,752	)		4,018			673			818			(32,426	)		(22,322	)
Net change in unrealized appreciation       (depreciation)			5,953		(120,303		)		3,190			(13,278	)		34,318		(215,618		)
Net Increase (Decrease) in Net           Assets Resulting from Operations			(176	)	(108,994		)		10,979			1,238			4,552		(233,976		)
Distributions to Shareholders From:
Net investment income			(7,291	)		(472	)		(13,706	)		(306	)		(3,944	)		(968	)
Net realized gains			(2,099	)		(329	)		––			––			––			(14,757	)
Total Distributions to Shareholders			(9,390	)		(801	)		(13,706	)		(306	)		(3,944	)		(15,725	)
Capital Share Transactions			(21,261	)		(71,363	)		37,559			36,967			(29,761	)		(94,053	)
Net Increase (Decrease) in Net Assets			(30,827	)	(181,158		)		34,832			37,899			(29,153	)	(343,754		)
Net Assets, Beginning of Period			378,285			559,443			334,139			296,240			402,127			745,881
Net Assets, End of Period		$	347,458		$	378,285		$	368,971		$	334,139		$	372,974		$	402,127
Undistributed net investment income		$	3,591		$	7,259		$	7,061		$	13,651		$	2,603		$	3,875

	Dividend Opportunities							Energy						Global Natural Resources
(In thousands)	Six months ended 6-30-09 (Unaudited)				Fiscal year ended 12-31-08			Six months ended 6-30-09 (Unaudited)			Fiscal year ended 12-31-08			Six months ended 6-30-09 (Unaudited)			Fiscal year ended 12-31-08
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)		$	1,037		$	1,148		$	83		$	(43	)	$	(160	)	$	(107	)
Net realized loss on investments			(12,291	)		(6,271	)		(1,981	)		(1,276	)		(6,514	)	(24,375		)
Net change in unrealized appreciation       (depreciation)			14,704			(51,212	)		4,626		(16,275		)		35,378		(80,610		)
Net Increase (Decrease) in Net             Assets Resulting from Operations			3,450			(56,335	)		2,728		(17,594		)		28,704		(105,092		)
Distributions to Shareholders From:
Net investment income			(1,506	)		(134	)		––			(29	)		––			(1,938	)
Net realized gains			––			(245	)		––			(32	)		––			(7,876	)
Total Distributions to Shareholders			(1,506	)		(379	)		––			(61	)		––			(9,814	)
Capital Share Transactions			35,421			59,139			2,357			11,292			27,340			19,745
Net Increase (Decrease) in Net Assets			37,365			2,425			5,085			(6,363	)		56,044		(95,161		)
Net Assets, Beginning of Period			123,026			120,601			19,894			26,257			69,461		164,622
Net Assets, End of Period		$	160,391		$	123,026		$	24,979		$	19,894		$	125,505		$	69,461
Undistributed (distributions in excess of)       net investment income		$	894		$	1,363		$	81		$	(2	)	$	(218	)	$	(29	)

See Accompanying Notes to Financial Statements.

STATEMENT OF CHANGES IN NET ASSETS

Ivy Funds VIP

	Growth							High Income						International Growth
(In thousands)	Six months ended 6-30-09 (Unaudited)				Fiscal year ended 12-31-08			Six months ended 6-30-09 (Unaudited)			Fiscal year ended 12-31-08			Six months ended 6-30-09 (Unaudited)			Fiscal year ended 12-31-08
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income		$	2,637		$	2,988		$	8,211		$	16,659		$	2,294		$	2,821
Net realized gain (loss) on investments			(2,807	)		18,776			(13,393	)		(12,373	)		(8,148	)		(24,202	)
Net change in unrealized appreciation       (depreciation)			52,936		(469,869		)		41,658			(48,052	)		14,458			(96,086	)
Net Increase (Decrease) in Net             Assets Resulting from Operations			52,766		(448,105		)		36,476			(43,766	)		8,604		(117,467		)
Distributions to Shareholders From:
Net investment income			(2,992	)		––			(16,681	)		(1,165	)		(2,689	)		(569	)
Net realized gains			(22,110	)		(10,490	)		––			––			––			(4,744	)
Total Distributions to Shareholders			(25,102	)		(10,490	)		(16,681	)		(1,165	)		(2,689	)		(5,313	)
Capital Share Transactions			(3,438	)		(89,150	)		21,159			(22,090	)		5,194			(777	)
Net Increase (Decrease) in Net Assets			24,226		(547,745		)		40,954			(67,021	)		11,109		(123,557		)
Net Assets, Beginning of Period			757,045		1,304,790				146,733			213,754			159,498			283,055
Net Assets, End of Period		$	781,271		$	757,045		$	187,687		$	146,733		$	170,607		$	159,498
Undistributed net investment income		$	2,542		$	2,896		$	8,149		$	16,619		$	2,263		$	2,667

	International Value							Micro Cap Growth						Mid Cap Growth
(In thousands)	Six months ended 6-30-09 (Unaudited)				Fiscal year ended 12-31-08			Six months ended 6-30-09 (Unaudited)			Fiscal year ended 12-31-08			Six months ended 6-30-09 (Unaudited)			Fiscal year ended 12-31-08
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)		$	5,361		$	15,588		$	(178	)	$	(532	)	$	21		$	(32	)
Net realized gain (loss) on investments		(109,563		)		24,222			(3,042	)		(627	)		(1,548	)		(1,367	)
Net change in unrealized appreciation       (depreciation)			145,046		(310,201		)		8,283		(25,974		)		10,669		(22,811		)
Net Increase (Decrease) in Net             Assets Resulting from Operations			40,844		(270,391		)		5,063		(27,133		)		9,142		(24,210		)
Distributions to Shareholders From:
Net investment income			(15,263	)		(2,657	)		––			––			––			(21	)
Net realized gains			(24,550	)		(10,555	)		––			––			––			(901	)
Total Distributions to Shareholders			(39,813	)		(13,212	)		––			––			––			(922	)
Capital Share Transactions			43,824			27,050			(1,184	)		(4,134	)		8,174			16,547
Net Increase (Decrease) in Net Assets			44,855		(256,553		)		3,879		(31,267		)		17,316			(8,585	)
Net Assets, Beginning of Period			379,113			635,666			28,309			59,576			48,879			57,464
Net Assets, End of Period		$	423,968		$	379,113		$	32,188		$	28,309		$	66,195		$	48,879
Undistributed (distributions in excess of)       net investment income		$	4,916		$	14,458		$	(181	)	$	(2	)	$	20		$	(1	)

See Accompanying Notes to Financial Statements.

STATEMENT OF CHANGES IN NET ASSETS

Ivy Funds VIP

	Money Market							Mortgage Securities						Real Estate Securities
(In thousands)	Six months ended 6-30-09 (Unaudited)				Fiscal year ended 12-31-08			Six months ended 6-30-09 (Unaudited)			Fiscal year ended 12-31-08			Six months ended 6-30-09 (Unaudited)			Fiscal year ended 12-31-08
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income		$	1,277		$	2,803		$	549		$	1,397		$	570		$	749
Net realized gain (loss) on investments			9			36			(250	)		(436	)		(4,323	)		(5,660	)
Net change in unrealized appreciation       (depreciation)			––			––			508			(4,663	)		64		(12,764		)
Net Increase (Decrease) in Net             Assets Resulting from Operations			1,286			2,839			807			(3,702	)		(3,689	)	(17,675		)
Distributions to Shareholders From:
Net investment income			(1,277	)		(2,799	)		(1,400	)		(302	)		(831	)		(253	)
Net realized gains			(9	)		(26	)		––			––			––			(730	)
Total Distributions to Shareholders			(1,286	)		(2,825	)		(1,400	)		(302	)		(831	)		(983	)
Capital Share Transactions			18,673			111,528			(964	)		(2,281	)		210			(711	)
Net Increase (Decrease) in Net Assets			18,673			111,542			(1,557	)		(6,285	)		(4,310	)	(19,369		)
Net Assets, Beginning of Period			200,763			89,221			27,282			33,567			28,934			48,303
Net Assets, End of Period		$	219,436		$	200,763		$	25,725		$	27,282		$	24,624		$	28,934
Undistributed net investment income		$	––		$	––		$	545		$	1,396		$	615		$	876

	Science and Technology
(In thousands)	Six months ended 6-30-09 (Unaudited)				Fiscal year ended 12-31-08
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)		$	311		$	(662	)
Net realized gain on investments			4,898			14,966
Net change in unrealized appreciation       (depreciation)			30,761		(138,855		)
Net Increase (Decrease) in Net Assets             Resulting from Operations			35,970		(124,551		)
Distributions to Shareholders From:
Net investment income			––			––
Net realized gains			(16,547	)		(8,411	)
Total Distributions to Shareholders			(16,547	)		(8,411	)
Capital Share Transactions			11,029			(37,315	)
Net Increase (Decrease) in Net Assets			30,452		(170,277		)
Net Assets, Beginning of Period			226,153			396,430
Net Assets, End of Period		$	256,605		$	226,153
Undistributed (distributions in excess of)       net investment income		$	292		$	(24	)

See Accompanying Notes to Financial Statements.

STATEMENT OF CHANGES IN NET ASSETS

Ivy Funds VIP

	Small Cap Growth							Small Cap Value						Value
(In thousands)	Six months ended 6-30-09 (Unaudited)				Fiscal year ended 12-31-08			Six months ended 6-30-09 (Unaudited)			Fiscal year ended 12-31-08			Six months ended 6-30-09 (Unaudited)			Fiscal year ended 12-31-08
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)		$	(1,150	)	$	1,292		$	68		$	(250	)	$	2,075		$	4,573
Net realized loss on investments			(19,463	)		(28,562	)		(14,806	)		(29,934	)		(6,281	)		(34,841	)
Net change in unrealized appreciation       (depreciation)			61,914		(173,577		)		21,248			(22,739	)		7,490			(89,725	)
Net Increase (Decrease) in Net             Assets Resulting from Operations			41,301		(200,847		)		6,510			(52,923	)		3,284		(119,993		)
Distributions to Shareholders From:
Net investment income			(1,298	)		––			––			(364	)		(4,928	)		(747	)
Net realized gains			––			(6,006	)		––			(3,536	)		––			(2,341	)
Total Distributions to Shareholders			(1,298	)		(6,006	)		––			(3,900	)		(4,928	)		(3,088	)
Capital Share Transactions			(13,519	)		(47,122	)		2,427			1,795			1,129			(9,474	)
Net Increase (Decrease) in Net Assets			26,484		(253,975		)		8,937			(55,028	)		(515	)	(132,555		)
Net Assets, Beginning of Period			290,184			544,159			150,116			205,144			231,428			363,983
Net Assets, End of Period		$	316,668		$	290,184		$	159,053		$	150,116		$	230,913		$	231,428
Undistributed (distributions in excess of)       net investment income		$	(1,195	)	$	1,253		$	136		$	68		$	1,704		$	4,557

See Accompanying Notes to Financial Statements.

FINANCIAL HIGHLIGHTS

Ivy Funds VIP

FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

	Net Asset Value, Beginning of Period			Net Investment Income		Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Pathfinder Aggressive
Six-month period ended       6-30-2009 (unaudited)		$3.8093		$0.0564		$0.1549			$0.2113			$(0.0175		)	$(0.0399		)	$(0.0574		)
Fiscal year ended 12-31-2008(3)			5.0000		0.0096		(1.2003	)		(1.1907	)		––			––			––
Pathfinder Conservative
Six-month period ended       6-30-2009 (unaudited)			4.4530		0.0684		0.0935			0.1619			(0.0033	)		(0.0059	)		(0.0092	)
Fiscal year ended 12-31-2008(4)			5.0000		0.0058		(0.5528	)		(0.5470	)		––			––			––
Pathfinder Moderate
Six-month period ended       6-30-2009 (unaudited)			4.0630		0.0496		0.1326			0.1822			(0.0091	)		(0.0168	)		(0.0259	)
Fiscal year ended 12-31-2008(3)			5.0000		0.0097		(0.9467	)		(0.9370	)		––			––			––
Pathfinder Moderately Aggressive
Six-month period ended       6-30-2009 (unaudited)			4.0140		0.0505		0.1524			0.2029			(0.0125	)		(0.0224	)		(0.0349	)
Fiscal year ended 12-31-2008(3)			5.0000		0.0103		(0.9963	)		(0.9860	)		––			––			––
Pathfinder Moderately Conservative
Six-month period ended       6-30-2009 (unaudited)			4.3098		0.0589		0.1030			0.1619			(0.0058	)		(0.0123	)		(0.0181	)
Fiscal year ended 12-31-2008(5)			5.0000		0.0080		(0.6982	)		(0.6902	)		––			––			––
Asset Strategy
Six-month period ended       6-30-2009 (unaudited)			8.2749		0.0586		0.5011			0.5597			(0.0337	)		(0.9108	)		(0.9445	)
Fiscal year ended 12-31-2008		12.3237			0.1062		(3.2919	)		(3.1857	)		(0.0495	)		(0.8136	)		(0.8631	)
Fiscal year ended 12-31-2007			9.0016		0.0932		3.8531			3.9463			(0.0709	)		(0.5533	)		(0.6242	)
Fiscal year ended 12-31-2006			8.8625		0.0958		1.7042			1.8000			(0.0354	)		(1.6255	)		(1.6609	)
Fiscal year ended 12-31-2005			7.6926		0.0836		1.7847			1.8683			(0.0762	)		(0.6222	)		(0.6984	)
Fiscal year ended 12-31-2004			6.9237		0.0699		0.8508			0.9207			(0.0990	)		(0.0528	)		(0.1518	)
Balanced
Six-month period ended       6-30-2009 (unaudited)			7.6960		0.0891		(0.0618	)		0.0273			(0.1591	)		(0.0458	)		(0.2049	)
Fiscal year ended 12-31-2008			9.7624		0.1496		(2.1997	)		(2.0501	)		(0.0096	)		(0.0067	)		(0.0163	)
Fiscal year ended 12-31-2007			8.7056		0.1388		1.0508			1.1896			(0.1326	)		(0.0002	)		(0.1328	)
Fiscal year ended 12-31-2006			7.9631		0.1224		0.7704			0.8928			(0.1207	)		(0.0296	)		(0.1503	)
Fiscal year ended 12-31-2005			7.6783		0.0999		0.2851			0.3850			(0.1002	)		––			(0.1002	)
Fiscal year ended 12-31-2004			7.1491		0.1096		0.5292			0.6388			(0.1096	)		––			(0.1096	)

*Not shown due to rounding.
(1)Ratios excluding expense waivers are included only for periods in which the Portfolio had waived or reimbursed expenses.
(2)Annualized.
(3)For the period from March 4, 2008 (commencement of operations of the Portfolio) through December 31, 2008.
(4)For the period from March 13, 2008 (commencement of operations of the Portfolio) through December 31, 2008.
(5)For the period from March 12, 2008 (commencement of operations of the Portfolio) through December 31, 2008.

	Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in millions)		Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(1)			Ratio of Net Investment Income to Average Net Assets Excluding Expense Waiver(1)			Portfolio Turnover Rate
Pathfinder Aggressive
Six-month period ended       6-30-2009 (unaudited)	$3.9632			5.57	%		$50		0.11	%(2)		3.25	%(2)		––	%		––	%		2	%
Fiscal year ended 12-31-2008(3)		3.8093	- -23.82				43		0.10	(2)		0.44	(2)		––			––			3
Pathfinder Conservative
Six-month period ended       6-30-2009 (unaudited)		4.6057		3.64			32		0.14	(2)		4.43	(2)		––			––			4
Fiscal year ended 12-31-2008(4)		4.4530	- -10.94				12		0.39	(2)		0.45	(2)		––			––			2
Pathfinder Moderate
Six-month period ended       6-30-2009 (unaudited)		4.2193		4.49			162		0.07	(2)		3.88	(2)		––			––			1
Fiscal year ended 12-31-2008(3)		4.0630	- -18.74				78		0.09	(2)		0.64	(2)		––			––			––
Pathfinder Moderately Aggressive
Six-month period ended       6-30-2009 (unaudited)		4.1820		5.07			203		0.06	(2)		3.70	(2)		––			––			––	*
Fiscal year ended 12-31-2008(3)		4.0140	- -19.72				116		0.07	(2)		0.61	(2)		––			––			––
Pathfinder Moderately Conservative
Six-month period ended       6-30-2009 (unaudited)		4.4536		3.76			69		0.10	(2)		4.09	(2)		––			––			5
Fiscal year ended 12-31-2008(5)		4.3098	- -13.80				32		0.18	(2)		0.63	(2)		––			––			––
Asset Strategy
Six-month period ended       6-30-2009 (unaudited)		7.8901		6.95			806		1.05	(2)		1.74	(2)		1.06	(2)		1.73	(2)		78
Fiscal year ended 12-31-2008		8.2749	- -25.79				678		1.04			1.02			1.05			1.01			190
Fiscal year ended 12-31-2007	12.3237			44.11			913		1.03			0.96			1.04			0.95			98
Fiscal year ended 12-31-2006		9.0016		20.15			602		1.02			1.16			1.03			1.15			148
Fiscal year ended 12-31-2005		8.8625		24.27			416		1.03			1.10			––			––			79
Fiscal year ended 12-31-2004		7.6926		13.30			282		1.06			1.02			––			––			118
Balanced
Six-month period ended       6-30-2009 (unaudited)		7.5184		0.41			347		1.03	(2)		2.10	(2)		––			––			16
Fiscal year ended 12-31-2008		7.6960	- -21.00				378		1.01			1.53			––			––			19
Fiscal year ended 12-31-2007		9.7624		13.67			559		1.01			1.40			––			––			8
Fiscal year ended 12-31-2006		8.7056		11.21			565		1.01			1.37			––			––			28
Fiscal year ended 12-31-2005		7.9631		5.01			582		1.01			1.20			––			––			52
Fiscal year ended 12-31-2004		7.6783		8.93			628		1.02			1.45			––			––			39

See Accompanying Notes to Financial Statements.

FINANCIAL HIGHLIGHTS

Ivy Funds VIP

FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Bond
Six-month period ended       6-30-2009 (unaudited)	$5.3372		$0.0937			$0.0732			$0.1669			$(0.2104		)		$    ––		$(0.2104		)
Fiscal year ended 12-31-2008		5.3255		0.2183			(0.2017	)		0.0166			(0.0049	)		––			(0.0049	)
Fiscal year ended 12-31-2007		5.2752		0.2428			0.0489			0.2917			(0.2414	)		––			(0.2414	)
Fiscal year ended 12-31-2006		5.2928		0.2434			(0.0182	)		0.2252			(0.2411	)		(0.0017	)		(0.2428	)
Fiscal year ended 12-31-2005		5.4762		0.2356			(0.1464	)		0.0892			(0.2464	)		(0.0262	)		(0.2726	)
Fiscal year ended 12-31-2004		5.5710		0.2463			(0.0302	)		0.2161			(0.2463	)		(0.0646	)		(0.3109	)
Core Equity
Six-month period ended       6-30-2009 (unaudited)		8.1109		0.0646			0.0963			0.1609			(0.0859	)		––			(0.0859	)
Fiscal year ended 12-31-2008	12.9583			0.0832			(4.6008	)		(4.5176	)		(0.0203	)		(0.3095	)		(0.3298	)
Fiscal year ended 12-31-2007	12.5485			0.0977			1.6632			1.7609			(0.0862	)		(1.2649	)		(1.3511	)
Fiscal year ended 12-31-2006	11.1221			0.0805			1.8084			1.8889			(0.1093	)		(0.3532	)		(0.4625	)
Fiscal year ended 12-31-2005	10.2369			0.0358			0.8859			0.9217			(0.0365	)		––			(0.0365	)
Fiscal year ended 12-31-2004		9.3996		0.0622			0.8373			0.8995			(0.0622	)		––			(0.0622	)
Dividend Opportunities
Six-month period ended       6-30-2009 (unaudited)		5.1114		0.0240			0.0385			0.0625			(0.0521	)		––			(0.0521	)
Fiscal year ended 12-31-2008		8.0015		0.0391			(2.9133	)		(2.8742	)		(0.0056	)		(0.0103	)		(0.0159	)
Fiscal year ended 12-31-2007		6.9651		0.0881			1.0765			1.1646			(0.0675	)		(0.0607	)		(0.1282	)
Fiscal year ended 12-31-2006		6.1121		0.0857			0.8867			0.9724			(0.0849	)		(0.0345	)		(0.1194	)
Fiscal year ended 12-31-2005		5.4645		0.0643			0.6476			0.7119			(0.0643	)		––			(0.0643	)
Fiscal year ended 12-31-2004		5.0000		0.0337			0.4645			0.4982			(0.0337	)		––			(0.0337	)
Energy
Six-month period ended       6-30-2009 (unaudited)		3.7434		0.0143			0.5041			0.5184			––			––			––
Fiscal year ended 12-31-2008		6.9732		(0.0103	)		(3.2080	)		(3.2183	)		(0.0055	)		(0.0060	)		(0.0115	)
Fiscal year ended 12-31-2007		4.6351		0.0280			2.3497			2.3777			(0.0209	)		(0.0187	)		(0.0396	)
Fiscal year ended 12-31-2006(3)		5.0000		0.0248			(0.3654	)		(0.3406	)		(0.0243	)		––			(0.0243	)
Global Natural Resources
Six-month period ended       6-30-2009 (unaudited)		3.3102		(0.0055	)		1.2585			1.2530			––			––			––
Fiscal year ended 12-31-2008	10.0838			0.0088			(6.2310	)		(6.2222	)		(0.1089	)		(0.4425	)		(0.5514	)
Fiscal year ended 12-31-2007		7.5711		0.0148			3.2797			3.2945			(0.0022	)		(0.7796	)		(0.7818	)
Fiscal year ended 12-31-2006		6.2719		0.0295			1.5690			1.5985			(0.0235	)		(0.2758	)		(0.2993	)
Fiscal year ended 12-31-2005(4)		5.0000		(0.0112	)		1.3132			1.3020			––			(0.0301	)		(0.0301	)
Growth
Six-month period ended       6-30-2009 (unaudited)		7.5529		0.0276			0.5263			0.5539			(0.0310	)		(0.2291	)		(0.2601	)
Fiscal year ended 12-31-2008	12.0237			0.0297			(4.3944	)		(4.3647	)		––			(0.1061	)		(0.1061	)
Fiscal year ended 12-31-2007		9.7813		(0.0008	)		2.5262			2.5254			(0.0001	)		(0.2829	)		(0.2830	)
Fiscal year ended 12-31-2006		9.3125		(0.0001	)		0.4689			0.4688			––			––			––
Fiscal year ended 12-31-2005		8.3728		(0.0029	)		0.9429			0.9400			(0.0003	)		––			(0.0003	)
Fiscal year ended 12-31-2004		8.1267		0.0228			0.2460			0.2688			(0.0227	)		––			(0.0227	)

(1)Ratios excluding expense waivers are included only for periods in which the Portfolio had waived or reimbursed expenses.
(2)Annualized.
(3)For the period from May 1, 2006 (commencement of operations of the Portfolio) through December 31, 2006.
(4)For the period from April 28, 2005 (commencement of operations of the Portfolio) through December 31, 2005.

	Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in millions)		Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(1)			Ratio of Net Investment Income (Loss) to Average Net Assets Excluding Expense Waiver(1)			Portfolio Turnover Rate
Bond
Six-month period ended       6-30-2009 (unaudited)	$5.2937			3.20	%	$369			0.80	%(2)		4.14	%(2)		0.85	%(2)		4.09	%(2)		16	%
Fiscal year ended 12-31-2008		5.3372		0.31			334		0.79			4.38			––			––			29
Fiscal year ended 12-31-2007		5.3255		5.67			296		0.82			4.57			0.85			4.54			42
Fiscal year ended 12-31-2006		5.2752		4.24			213		0.84			4.49			0.85			4.48			54
Fiscal year ended 12-31-2005		5.2928		1.61			212		0.86			4.17			––			––			43
Fiscal year ended 12-31-2004		5.4762		3.88			218		0.85			4.16			––			––			47
Core Equity
Six-month period ended       6-30-2009 (unaudited)		8.1859		2.01			373		0.98	(2)		1.48	(2)		1.03	(2)		1.43	(2)		57
Fiscal year ended 12-31-2008		8.1109	- -34.77				402		0.96			0.68			1.01			0.63			105
Fiscal year ended 12-31-2007		12.9583		14.03			746		0.96			0.68			1.01			0.63			83
Fiscal year ended 12-31-2006		12.5485		16.99			762		0.99			0.62			1.00			0.61			103
Fiscal year ended 12-31-2005		11.1221		9.01			723		1.01			0.32			––			––			62
Fiscal year ended 12-31-2004		10.2369		9.57			737		1.01			0.62			––			––			54
Dividend Opportunities
Six-month period ended       6-30-2009 (unaudited)		5.1218		1.24			160		1.06	(2)		1.57	(2)		––			––			14
Fiscal year ended 12-31-2008		5.1114	- -35.91				123		1.07			0.92			––			––			35
Fiscal year ended 12-31-2007		8.0015		16.72			121		1.04			1.29			––			––			17
Fiscal year ended 12-31-2006		6.9651		15.91			81		1.07			1.63			––			––			17
Fiscal year ended 12-31-2005		6.1121		13.03			43		0.93			1.53			1.12			1.34			22
Fiscal year ended 12-31-2004		5.4645		9.96			17		0.76			2.08			1.46			1.38			22
Energy
Six-month period ended       6-30-2009 (unaudited)		4.2618		13.85			25		0.67	(2)		0.78	(2)		1.33	(2)		0.12	(2)		7
Fiscal year ended 12-31-2008		3.7434	-46.15				20		1.14		- -0.15				1.31		- -0.32				10
Fiscal year ended 12-31-2007		6.9732		51.30			26		0.52			0.78			1.32		- -0.02				13
Fiscal year ended 12-31-2006(3)		4.6351		- -6.81			7		0.64	(2)		1.05	(2)		1.49	(2)		0.20	(2)		12
Global Natural Resources
Six-month period ended       6-30-2009 (unaudited)		4.5632		37.85			126		1.53	(2)	- -0.35		(2)		––			––			61
Fiscal year ended 12-31-2008		3.3102	- -61.46				69		1.43		- -0.08				––			––			206
Fiscal year ended 12-31-2007		10.0838		43.50			165		1.38			0.20			––			––			122
Fiscal year ended 12-31-2006		7.5711		25.49			90		1.51			0.53			––			––			111
Fiscal year ended 12-31-2005(4)		6.2719		26.04			32		2.17	(2)	- -0.60		(2)		––			––			66
Growth
Six-month period ended       6-30-2009 (unaudited)		7.8467		7.47			781		0.99	(2)		0.72	(2)		1.02	(2)		0.69	(2)		25
Fiscal year ended 12-31-2008		7.5529	- -36.27				757		0.97			0.29			1.00			0.26			53
Fiscal year ended 12-31-2007		12.0237		25.81			1,305		0.97		- -0.01				0.99		- -0.03				42
Fiscal year ended 12-31-2006		9.7813		5.04			1,177		0.99			0.00			1.00		- -0.01				67
Fiscal year ended 12-31-2005		9.3125		11.23			1,252		1.00		- -0.03				––			––			59
Fiscal year ended 12-31-2004		8.3728		3.31			1,252		1.00			0.27			––			––			81

See Accompanying Notes to Financial Statements.

FINANCIAL HIGHLIGHTS

Ivy Funds VIP

FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

	Net Asset Value Beginning of Period			Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
High Income
Six-month period ended       6-30-2009 (unaudited)		$2.4841		$0.1130			$0.4749			$0.5879			$(0.2728		)		$    ––		$(0.2728		)
Fiscal year ended 12-31-2008			3.2031		0.2834			(0.9826	)		(0.6992	)		(0.0198	)		––			(0.0198	)
Fiscal year ended 12-31-2007			3.3398		0.2717			(0.1440	)		0.1277			(0.2644	)		––			(0.2644	)
Fiscal year ended 12-31-2006			3.2521		0.2518			0.0827			0.3345			(0.2468	)		––			(0.2468	)
Fiscal year ended 12-31-2005			3.4276		0.2626			(0.1749	)		0.0877			(0.2632	)		––			(0.2632	)
Fiscal year ended 12-31-2004			3.3375		0.2391			0.0901			0.3292			(0.2391	)		––			(0.2391	)
International Growth
Six-month period ended       6-30-2009 (unaudited)			6.0050		0.0842			0.2456			0.3298			(0.1016	)		––			(0.1016	)
Fiscal year ended 12-31-2008			10.7486		0.1075			(4.6438	)		(4.5363	)		(0.0222	)		(0.1851	)		(0.2073	)
Fiscal year ended 12-31-2007			9.1353		0.0630			1.8829			1.9459			(0.0587	)		(0.2739	)		(0.3326	)
Fiscal year ended 12-31-2006			7.5943		0.0672			1.5263			1.5935			(0.0525	)		––			(0.0525	)
Fiscal year ended 12-31-2005			6.6534		0.0493			1.0465			1.0958			(0.1549	)		––			(0.1549	)
Fiscal year ended 12-31-2004			5.8722		0.0367			0.7853			0.8220			(0.0408	)		––			(0.0408	)
International Value
Six-month period ended       6-30-2009 (unaudited)			12.4613		0.1543			1.1065			1.2608			(0.4959	)		(0.7976	)		(1.2935	)
Fiscal year ended 12-31-2008			22.3935		0.5116			(9.9918	)		(9.4802	)		(0.0909	)		(0.3611	)		(0.4520	)
Fiscal year ended 12-31-2007			22.7794		0.4391			1.8126			2.2517			(0.3937	)		(2.2439	)		(2.6376	)
Fiscal year ended 12-31-2006			19.1711		0.4593			5.2176			5.6769			(0.4097	)		(1.6589	)		(2.0686	)
Fiscal year ended 12-31-2005			19.1681		0.3199			1.8192			2.1391			(0.4226	)		(1.7135	)		(2.1361	)
Fiscal year ended 12-31-2004			15.8947		0.2759			3.3285			3.6044			(0.1850	)		(0.1460	)		(0.3310	)
Micro Cap Growth
Six-month period ended       6-30-2009 (unaudited)			11.1122		(0.0735	)		2.2052			2.1317			––			––			––
Fiscal year ended 12-31-2008			21.3838		(0.2089	)	(10.0627		)	(10.2716		)		––			––			––
Fiscal year ended 12-31-2007			20.0796		(0.2565	)		1.5607			1.3042			––			––			––
Fiscal year ended 12-31-2006			17.8866		(0.2064	)		2.3994			2.1930			––			––			––
Fiscal year ended 12-31-2005			14.7992		(0.1737	)		3.2611			3.0874			––			––			––
Fiscal year ended 12-31-2004			13.4476		(0.1794	)		1.5310			1.3516			––			––			––
Mid Cap Growth
Six-month period ended       6-30-2009 (unaudited)			4.5056		0.0017			0.7641			0.7658			––			––			––
Fiscal year ended 12-31-2008			7.2091		(0.0036	)		(2.6128	)		(2.6164	)		(0.0020	)		(0.0851	)		(0.0871	)
Fiscal year ended 12-31-2007			6.5601		0.0034			0.8245			0.8279			(0.0013	)		(0.1776	)		(0.1789	)
Fiscal year ended 12-31-2006			6.0653		0.0164			0.5025			0.5189			(0.0223	)		(0.0018	)		(0.0241	)
Fiscal year ended 12-31-2005(3)			5.0000		0.0064			1.0589			1.0653			––			––			––
Money Market
Six-month period ended       6-30-2009 (unaudited)			1.0000		0.0060			0.0000			0.0060			(0.0060	)		––			(0.0060	)
Fiscal year ended 12-31-2008			1.0000		0.0215			0.0001			0.0216			(0.0215	)		(0.0001	)		(0.0216	)
Fiscal year ended 12-31-2007			1.0000		0.0451			0.0000			0.0451			(0.0451	)		––			(0.0451	)
Fiscal year ended 12-31-2006			1.0000		0.0424			0.0000			0.0424			(0.0424	)		––			(0.0424	)
Fiscal year ended 12-31-2005			1.0000		0.0247			0.0000			0.0247			(0.0247	)		––			(0.0247	)
Fiscal year ended 12-31-2004			1.0000		0.0070			0.0000			0.0070			(0.0070	)		––			(0.0070	)

(1)Ratios excluding expense waivers are included only for periods in which the Portfolio had waived or reimbursed expenses.
(2)Annualized.
(3)For the period from April 28, 2005 (commencement of operations of the Portfolio) through December 31, 2005.

	Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in millions)		Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(1)			Ratio of Net Investment Income (Loss) to Average Net Assets Excluding Expense Waiver(1)			Portfolio Turnover Rate
High Income
Six-month period ended       6-30-2009 (unaudited)	$2.7992			24.21	%	$188			0.93	%(2)		9.88	%(2)		0.98	%(2)		9.83	%(2)		32	%
Fiscal year ended 12-31-2008		2.4841	- -21.82				147		0.91			8.72			0.96			8.67			37
Fiscal year ended 12-31-2007		3.2031		3.86			214		0.90			7.90			0.95			7.85			74
Fiscal year ended 12-31-2006		3.3398		10.27			204		0.94			7.48			0.95			7.47			71
Fiscal year ended 12-31-2005		3.2521		2.55			186		0.95			7.35			––			––			54
Fiscal year ended 12-31-2004		3.4276		9.86			190		0.96			7.13			––			––			83
International Growth
Six-month period ended       6-30-2009 (unaudited)		6.2332		5.58			171		1.20	(2)		3.06	(2)		1.23	(2)		3.03	(2)		29
Fiscal year ended 12-31-2008		6.0050	-42.15				159		1.18			1.27			1.21			1.24			96
Fiscal year ended 12-31-2007	10.7486			21.29			283		1.17			0.63			1.20			0.60			95
Fiscal year ended 12-31-2006		9.1353		20.99			245		1.20			0.81			1.21			0.80			96
Fiscal year ended 12-31-2005		7.5943		16.47			206		1.21			0.67			––			––			86
Fiscal year ended 12-31-2004		6.6534		14.00			187		1.20			0.59			––			––			81
International Value
Six-month period ended       6-30-2009 (unaudited)		12.4286		10.68			424		1.21	(2)		2.92	(2)		––			––			87
Fiscal year ended 12-31-2008		12.4613	-42.26				379		1.18			3.07			––			––			20
Fiscal year ended 12-31-2007		22.3935		9.88			636		1.18			1.81			––			––			23
Fiscal year ended 12-31-2006		22.7794		29.61			589		1.18			2.13			––			––			29
Fiscal year ended 12-31-2005		19.1711		11.16			463		1.19			1.63			––			––			23
Fiscal year ended 12-31-2004		19.1681		22.68			401		1.19			1.65			––			––			31
Micro Cap Growth
Six-month period ended       6-30-2009 (unaudited)		13.2439		19.18			32		1.43	(2)		- -1.31	(2)		––			––			29
Fiscal year ended 12-31-2008		11.1122	-48.04				28		1.36			- -1.23			––			––			60
Fiscal year ended 12-31-2007		21.3838		6.49			60		1.32			- -1.18			––			––			57
Fiscal year ended 12-31-2006		20.0796		12.26			60		1.32			- -1.06			––			––			60
Fiscal year ended 12-31-2005		17.8866		20.87			53		1.35			- -1.15			––			––			54
Fiscal year ended 12-31-2004		14.7992		10.05			41		1.35			- -1.26			––			––			65
Mid Cap Growth
Six-month period ended       6-30-2009 (unaudited)		5.2714		17.00			66		1.24	(2)		0.08	(2)		1.26	(2)		0.06	(2)		19
Fiscal year ended 12-31-2008		4.5056	- -36.23				49		1.23			- -0.06			1.24			- -0.07			46
Fiscal year ended 12-31-2007		7.2091		12.62			57		1.21			0.06			1.24			0.03			31
Fiscal year ended 12-31-2006		6.5601		8.56			37		0.97			0.45			1.31			0.11			23
Fiscal year ended 12-31-2005(3)		6.0653		21.31			13		0.69	(2)		0.33	(2)		1.54	(2)		- -0.51	(2)		11
Money Market
Six-month period ended       6-30-2009 (unaudited)		1.0000		0.60			219		0.51	(2)		1.21	(2)		––			––			N/A
Fiscal year ended 12-31-2008		1.0000		2.18			201		0.75			2.01			––			––			N/A
Fiscal year ended 12-31-2007		1.0000		4.60			89		0.76			4.51			––			––			N/A
Fiscal year ended 12-31-2006		1.0000		4.32			70		0.77			4.29			––			––			N/A
Fiscal year ended 12-31-2005		1.0000		2.50			52		0.79			2.46			––			––			N/A
Fiscal year ended 12-31-2004		1.0000		0.70			55		0.76			0.69			––			––			N/A

See Accompanying Notes to Financial Statements.

FINANCIAL HIGHLIGHTS

Ivy Funds VIP

FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Mortgage Securities
Six-month period ended       6-30-2009 (unaudited)	$4.3871		$0.1118			$0.0245			$0.1363			$(0.2456		)		$    ––		$(0.2456		)
Fiscal year ended 12-31-2008		4.9813		0.2287			(0.7740	)		(0.5453	)		(0.0489	)		––			(0.0489	)
Fiscal year ended 12-31-2007		4.9818		0.2127			(0.0444	)		0.1683			(0.1688	)		––			(0.1688	)
Fiscal year ended 12-31-2006		4.9801		0.2373			0.0010			0.2383			(0.2366	)		––			(0.2366	)
Fiscal year ended 12-31-2005		5.0791		0.2010			(0.0990	)		0.1020			(0.2010	)		––			(0.2010	)
Fiscal year ended 12-31-2004(3)		5.0000		0.1009			0.1476			0.2485			(0.1009	)		(0.0685	)		(0.1694	)
Real Estate Securities
Six-month period ended       6-30-2009 (unaudited)		4.3040		0.0866			(0.6270	)		(0.5404	)		(0.1261	)		––			(0.1261	)
Fiscal year ended 12-31-2008		6.9867		0.1143			(2.6453	)		(2.5310	)		(0.0390	)		(0.1127	)		(0.1517	)
Fiscal year ended 12-31-2007		8.7770		0.0938			(1.5033	)		(1.4095	)		(0.0473	)		(0.3335	)		(0.3808	)
Fiscal year ended 12-31-2006		6.9610		0.0367			2.0572			2.0939			(0.0607	)		(0.2172	)		(0.2779	)
Fiscal year ended 12-31-2005		6.5176		0.0779			0.6278			0.7057			(0.0954	)		(0.1669	)		(0.2623	)
Fiscal year ended 12-31-2004(3)		5.0000		0.0396			1.5935			1.6331			(0.0349	)		(0.0806	)		(0.1155	)
Science and Technology
Six-month period ended       6-30-2009 (unaudited)		11.4251		0.0151			1.8487			1.8638			––			(0.8661	)		(0.8661	)
Fiscal year ended 12-31-2008		17.9777		(0.0336	)		(6.0778	)		(6.1114	)		––			(0.4412	)		(0.4412	)
Fiscal year ended 12-31-2007		17.7170		(0.0712	)		4.3892			4.3180			––			(4.0573	)		(4.0573	)
Fiscal year ended 12-31-2006		16.8844		(0.1178	)		1.4468			1.3290			––			(0.4964	)		(0.4964	)
Fiscal year ended 12-31-2005		14.4014		(0.1145	)		2.5975			2.4830			––			––			––
Fiscal year ended 12-31-2004		12.3883		(0.0751	)		2.0882			2.0131			––			––			––
Small Cap Growth
Six-month period ended       6-30-2009 (unaudited)		6.0933		(0.0241	)		0.9565			0.9324			(0.0286	)		––			(0.0286	)
Fiscal year ended 12-31-2008		10.2422		0.0270			(4.0469	)		(4.0199	)		––			(0.1290	)		(0.1290	)
Fiscal year ended 12-31-2007		9.9749		(0.0641	)		1.4127			1.3486			––			(1.0813	)		(1.0813	)
Fiscal year ended 12-31-2006		10.4866		(0.0584	)		0.5883			0.5299			––			(1.0416	)		(1.0416	)
Fiscal year ended 12-31-2005		9.6810		(0.0647	)		1.3116			1.2469			––			(0.4413	)		(0.4413	)
Fiscal year ended 12-31-2004		8.4703		(0.0741	)		1.2848			1.2107			––			––			––
Small Cap Value
Six-month period ended       6-30-2009 (unaudited)		10.2867		0.0045			0.4456			0.4501			––			––			––
Fiscal year ended 12-31-2008		14.3219		(0.0168	)		(3.7428	)		(3.7596	)		(0.0257	)		(0.2499	)		(0.2756	)
Fiscal year ended 12-31-2007		15.6884		0.0251			(0.6721	)		(0.6470	)		(0.0008	)		(0.7187	)		(0.7195	)
Fiscal year ended 12-31-2006		14.5826		0.0226			2.4333			2.4559			(0.0232	)		(1.3269	)		(1.3501	)
Fiscal year ended 12-31-2005		16.6329		0.0012			0.6886			0.6898			––			(2.7401	)		(2.7401	)
Fiscal year ended 12-31-2004		15.2013		(0.0569	)		2.3402			2.2833			––			(0.8517	)		(0.8517	)
Value
Six-month period ended       6-30-2009 (unaudited)		4.1537		0.0384			0.0274			0.0658			(0.0897	)		––			(0.0897	)
Fiscal year ended 12-31-2008		6.3640		0.0826			(2.2367	)		(2.1541	)		(0.0136	)		(0.0426	)		(0.0562	)
Fiscal year ended 12-31-2007		6.7426		0.0802			0.0480			0.1282			(0.0680	)		(0.4388	)		(0.5068	)
Fiscal year ended 12-31-2006		6.0701		0.0747			0.9499			1.0246			(0.0740	)		(0.2781	)		(0.3521	)
Fiscal year ended 12-31-2005		6.2226		0.0918			0.1831			0.2749			(0.0916	)		(0.3358	)		(0.4274	)
Fiscal year ended 12-31-2004		5.4790		0.0619			0.7437			0.8056			(0.0620	)		––			(0.0620	)

(1) Ratios excluding expense waivers are included only for periods in which the Portfolio had waived or reimbursed expenses.
(2) Annualized.
(3) For the period from May 27, 2004 (commencement of operations of the Portfolio) through December 31, 2004.

	Net Asset Value, End of Period		Total Return			Net Assets, End of Period (in millions)		Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(1)			Ratio of Net Investment Income (Loss) to Average Net Assets Excluding Expense Waiver(1)			Portfolio Turnover Rate
Mortgage Securities
Six-month period ended       6-30-2009 (unaudited)	$4.2778			3.16	%		$26		1.12	%(2)		4.25	%(2)		––	%		––	%		175	%
Fiscal year ended 12-31-2008		4.3871		- -10.95			27		0.99			4.21			––			––			288
Fiscal year ended 12-31-2007		4.9813		3.40			34		0.96			4.73			––			––			138
Fiscal year ended 12-31-2006		4.9818		4.77			30		0.97			4.76			––			––			158
Fiscal year ended 12-31-2005		4.9801		2.00			28		1.00			4.21			––			––			202
Fiscal year ended 12-31-2004(3)		5.0791		4.97			21		0.71	(2)		4.02	(2)		0.97	(2)		3.76	(2)		184
Real Estate Securities
Six-month period ended       6-30-2009 (unaudited)		3.6375		- -12.48			25		1.50	(2)		4.93	(2)		––			––			25
Fiscal year ended 12-31-2008		4.3040		- -36.04			29		1.31			1.73			––			––			45
Fiscal year ended 12-31-2007		6.9867		- -16.07			48		1.30			1.08			––			––			50
Fiscal year ended 12-31-2006		8.7770		30.08			60		1.31			1.03			––			––			32
Fiscal year ended 12-31-2005		6.9610		10.83			33		1.38			1.26			––			––			48
Fiscal year ended 12-31-2004(3)		6.5176		32.66			19		1.21	(2)		2.14	(2)		1.55	(2)		1.80	(2)		53
Science and Technology
Six-month period ended       6-30-2009 (unaudited)		12.4228		16.82			257		1.18	(2)		0.27	(2)		1.20	(2)		0.25	(2)		19
Fiscal year ended 12-31-2008		11.4251		- -33.89			226		1.16			- -0.21			1.18			- -0.23			62
Fiscal year ended 12-31-2007		17.9777		24.37			396		1.15			- -0.42			1.17			- -0.44			73
Fiscal year ended 12-31-2006		17.7170		7.87			352		1.17			- -0.65			1.18			- -0.66			71
Fiscal year ended 12-31-2005		16.8844		17.25			361		1.17			- -0.74			––			––			104
Fiscal year ended 12-31-2004		14.4014		16.25			322		1.17			- -0.59			––			––			107
Small Cap Growth
Six-month period ended       6-30-2009 (unaudited)		6.9971		15.34			317		1.16	(2)		- -0.83	(2)		1.18	(2)		- -0.85	(2)		33
Fiscal year ended 12-31-2008		6.0933		- -39.18			290		1.14			0.32			1.16			0.30			82
Fiscal year ended 12-31-2007		10.2422		13.52			544		1.14			- -0.61			1.16			- -0.63			101
Fiscal year ended 12-31-2006		9.9749		5.05			555		1.15			- -0.55			1.16			- -0.56			94
Fiscal year ended 12-31-2005		10.4866		12.88			606		1.16			- -0.63			––			––			71
Fiscal year ended 12-31-2004		9.6810		14.29			589		1.17			- -0.82			––			––			96
Small Cap Value
Six-month period ended       6-30-2009 (unaudited)		10.7368		4.38			159		1.21	(2)		0.09	(2)		––			––			50
Fiscal year ended 12-31-2008		10.2867		- -26.13			150		1.18			- -0.14			––			––			110
Fiscal year ended 12-31-2007		14.3219		-4.13			205		1.18			0.17			––			––			122
Fiscal year ended 12-31-2006		15.6884		16.84			199		1.18			0.15			––			––			131
Fiscal year ended 12-31-2005		14.5826		4.15			160		1.20			0.01			––			––			166
Fiscal year ended 12-31-2004		16.6329		15.02			132		1.23			- -0.43			––			––			32
Value
Six-month period ended       6-30-2009 (unaudited)		4.1298		1.66			231		1.04	(2)		1.95	(2)		1.05	(2)		1.94	(2)		44
Fiscal year ended 12-31-2008		4.1537		- -33.81			231		1.01			1.52			1.02			1.51			48
Fiscal year ended 12-31-2007		6.3640		1.90			364		1.01			1.12			1.02			1.11			51
Fiscal year ended 12-31-2006		6.7426		16.88			374		1.01			1.12			1.02			1.11			73
Fiscal year ended 12-31-2005		6.0701		4.42			353		1.02			1.42			––			––			40
Fiscal year ended 12-31-2004		6.2226		14.70			340		1.03			1.13			––			––			78

See Accompanying Notes to Financial Statements.

NOTES TO FINANCIAL STATEMENTS

Ivy Funds VIP (amounts in thousands)

JUNE 30, 2009 (UNAUDITED)  

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

On April 30, 2009, the 25 series of Ivy Funds Variable Insurance Portfolios, Inc., a Maryland corporation, were reorganized as a corresponding series of Ivy Funds Variable Insurance Portfolios, a Delaware statutory trust (the Trust), pursuant to a Plan of Reorganization and Termination that was approved by shareholders. The Reorganization was accomplished through a tax-free exchange of shares, which had no impact on net assets, operations and number of shares outstanding. The Trust is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. Capital stock is divided into twenty-five classes (each a Portfolio). The assets belonging to each Portfolio, except the Pathfinder Portfolios, are held separately by the custodian. The investment objective, policies and risk factors of each Portfolio are described more fully in the prospectus and Statement of Additional Information. The Trust's investment adviser is Waddell & Reed Investment Management Company (WRIMCO).

The following is a summary of significant accounting policies consistently followed by each Portfolio.

Securities Valuation. Each Portfolio calculates the net asset value of its shares as of the close of the New York Stock Exchange (the NYSE), normally 4:00 P.M. Eastern time, on each day the NYSE is open for trading.

Securities traded on U.S. or foreign securities exchanges or included in a national market system are valued at the official closing price at the close of each business day unless otherwise stated below. Over-the-counter securities and listed securities for which no price is readily available are valued at the average of the last bid and asked prices. Security prices are based on quotes that are obtained from an independent pricing service approved by the Board of Trustees.

To determine values of fixed-income securities, the independent pricing service takes into consideration such factors as current quotations by broker/dealers, coupon, maturity, quality, type of issue, trading characteristics, and other yield and risk factors it deems relevant in determining valuations. Securities which cannot be valued by the independent pricing service are valued using valuations obtained from dealers that make markets in the securities.

Gold bullion is valued at the last traded price reported by a pricing service prior to the close of the NYSE.

Options and swaps are valued by the independent pricing service unless the price is unavailable, in which case they are valued at either the mean between the last bid and asked price or using a valuation obtained from a dealer in that security. Futures contracts traded on an exchange are generally valued at the settlement price. Mutual funds, including investment funds, are valued at the net asset value reported at the close of each business day.

Forward foreign currency contracts are valued daily based upon the closing prices of the forward currency rates determined at the close of the NYSE as provided by a bank, dealer or independent pricing service.

Senior loans are valued using a composite price from more than one broker or dealer as obtained from an independent pricing service.

Short-term securities are valued on the basis of amortized cost (which approximates market value), whereby a portfolio security is valued at its cost initially, and thereafter valued to reflect a constant amortization to maturity of any discount or premium.

Because many foreign markets close before the U.S. markets, events may occur between the close of the foreign market and the close of the U.S. markets that could have a material impact on the valuation of foreign securities. The Portfolios, under the supervision of the Board of Trustees, evaluate the impact of these events each day and may adjust the valuation of foreign securities to reflect the fair value as of the close of the U.S. markets. In addition, all securities for which market values are not readily available or deemed unreliable are appraised at fair value as determined in good faith under the direction of the Board of Trustees. As of June 30, 2009, the following Portfolios had aggregate investments valued at fair value (unrealized appreciation (depreciation) for futures contracts) as shown:

Fund Name	Total Amount of Fair Valued Securities			Percent of Net Assets
Balanced		$	1		0.00	%
Global Natural Resources			592		0.47	%

Security Transactions and Related Investment Income. Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized securities gains and losses are calculated on the identified cost basis. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Portfolio is informed of the ex-dividend date. Premium and discount on the purchase or bonds are amortized for both financial and tax reporting purposes over the remaining lives of the bonds. Interest income is recorded on the accrual basis. Gains and losses on paydowns on asset- and mortgage-backed securities are recorded as components of interest income.

Securities on a When-Issued or Delayed Delivery Basis. Each Portfolio may purchase securities on a "when-issued" basis, and may purchase or sell securities on a "delayed delivery" basis. "When-issued" or "delayed delivery" refers to securities whose terms and indenture are available and for which a market exists, but which are not available for immediate delivery. Delivery and payment for securities that have been purchased by the Portfolio on a when-issued basis normally take place within six months and possibly as long as two years or more after the trade date. During this period, such securities do not earn interest, are subject to market fluctuation and may increase or decrease in value prior to their delivery. The purchase of securities on a when-issued basis may increase the volatility of the Portfolio's net asset value to the extent the Portfolio executes such transactions while remaining substantially fully invested. When a Portfolio engage s in when-issued or delayed delivery transactions, it relies on the buyer or seller, as the case may be, to complete the transaction. Their failure to do so may cause the Portfolio to lose the opportunity to obtain or dispose of the security at a price and yield it considers advantageous. The Portfolio maintains internally designated assets with a market value equal to or greater than the amount of its purchase commitments. The Portfolio may also sell securities that it purchased on a when-issued basis prior to settlement of the original purchase.

As of June 30, 2009, no Portfolio had purchased securities issued on a when-issued or delayed delivery basis.

Mortgage Dollar Roll Transactions. Certain Portfolios enter into dollar roll transactions on securities issued or to be issued by the Government National Mortgage Association, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, in which the Portfolio sells mortgage securities and simultaneously agrees to repurchase similar (same type, coupon and maturity) securities at a later date at an agreed upon price. During the period between the sale and repurchase, the Portfolio forgoes principal and interest paid on the mortgage securities sold. The Portfolio is compensated from negotiated fees paid by brokers offered as an inducement to the Portfolio to "roll over" their purchase commitments. These fees, if any, are recognized over the roll period and are included in Interest and amortization in the Statement of Operations. During the fiscal period ended June 30, 2009, Mortgage Securities engaged in this type of transaction.

Interest Only Obligations. These securities entitle the owner to receive only the interest portion from a bond, Treasury note or pool of mortgages.   These securities are generally created by a third party separating a bond or pool of mortgages into distinct interest-only and principal-only securities.   As the principal (par) amount of a bond or pool of mortgages is paid down, the amount of interest income earned by the owner will decline as well.

Credit Risk. Asset Strategy and High Income may invest in high-yield, non-investment-grade bonds, which may be subject to a greater degree of credit risk. Credit risk relates to the ability of the issuer to meet interest or principal payments or both as they become due. The Portfolios may acquire securities in default, and are not obligated to dispose of securities whose issuers subsequently default. As of June 30, 2009, Asset Strategy did not hold any securities that were in default. As of June 30, 2009, securities with an aggregate market value of $1,380, representing 0.74% of High Income's net assets, were in default.

Foreign Currency Translation. Each Portfolio's accounting records are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies are translated into U.S. dollars daily, using foreign exchange rates obtained from an independent pricing service authorized by the Board of Trustees. Purchases and sales of investment securities and accruals of income and expenses are translated at the rate of exchange prevailing on the date of the transaction. For assets and liabilities other than investments in securities, net realized and unrealized gains and losses from foreign currency translation arise from changes in currency exchange rates. Each Portfolio combines fluctuations from currency exchange rates and fluctuations in market value when computing net realized and unrealized gain or loss from investments. Foreign exchange rates are valued as of the close of the NYSE, normally 4:00 P.M. Eastern time, on each day the NYSE is open for trading, primarily using an independ ent pricing service authorized by the Board of Trustees.

Repurchase Agreements. Each Portfolio may purchase securities subject to repurchase agreements, which are instruments under which the Portfolio purchases a security and the seller (normally a commercial bank or broker-dealer) agrees, at the time of purchase, that it will repurchase the security at a specified time and price. Repurchase agreements are collateralized by the value of the resold securities which, during the entire period of the agreement, generally remains at least equal to the value of the loan, including accrued interest thereon. The collateral for the repurchase agreement is held by a custodian bank.

Investments with Off-Balance Sheet Risk. Each Portfolio, other than Money Market and the Pathfinder Portfolios, may enter into financial instrument transactions (such as swaps, futures, options and other derivatives) that may have off-balance sheet market risk. Off-balance sheet market risk exists when the maximum potential loss on a particular financial instrument is greater than the value of such financial instrument, as reflected in the Statement of Assets and Liabilities.

Income Taxes. It is the policy of each Portfolio to distribute all of its taxable income and capital gains to its shareholders and otherwise qualify as a regulated investment company under Subchapter M of the Internal Revenue Code. In addition, each Portfolio intends to pay distributions as required to avoid imposition of excise tax. Accordingly, no provision has been made for Federal income taxes. Management of the Trust periodically reviews all tax positions to assess that it is more likely than not that the position would be sustained upon examination by the relevant tax authority based on the technical merits of each position. As of June 30, 2009, management believes that under this standard no liability for unrecognized tax positions is required. The Portfolios are subject to examination by U.S. federal and state authorities for returns filed for years after 2004.

Dividends and Distributions to Shareholders. Dividends and distributions to shareholders are recorded by each Portfolio on the business day following record date. Net investment income dividends and capital gains distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America.

Custodian Fees. "Custodian fees" in the Statement of Operations may include interest expense incurred by a Portfolio on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. A Portfolio pays interest to its custodian on such cash overdrafts, to the extent they are not offset by positive cash balances maintained by that Portfolio, at a rate equal to the Federal Funds Rate plus 0.50%. The "Earnings credit" line item, if applicable, represents earnings on cash balances maintained by that Portfolio during the period. Such interest expense and other custodian fees may be paid with these earnings.

Trustees' Fees. Fees paid to the Trustees can be paid in cash or deferred to a later date, at the election of each Trustee according to the Deferred Fee Agreement entered into between the Trust and the Trustee(s). Each Portfolio records its portion of the deferred fees as a liability on the Statement of Assets and Liabilities. All fees paid in cash plus any appreciation (depreciation) in the underlying deferred plan are shown on the Statement of Operations.

Indemnifications. The Trust's organizational documents provide current and former Trustees and Officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Trust. In the normal course of business, the Trust may also enter into contracts that provide general indemnifications. The Trust's maximum exposure under these arrangements is unknown and is dependent on future claims that may be made against the Trust. The risk of material loss from such claims is considered remote.

Treasury's Temporary Guarantee Program. On October 3, 2008, the Board of Trustees of the Trust approved the participation by Money Market in the U.S. Department of the Treasury's Temporary Guarantee Program for Money Market Funds through December 18, 2008 (the Program). Participation in the Program required a payment to the Treasury Department of 0.01% based on the net asset value of Money Market as of September 19, 2008. On November 24, 2008, the Treasury Department announced its decision to extend the Program for the period from December 19, 2008 through April 30, 2009; on March 31, 2009, the Program was further extended to September 18, 2009 (the Extended Program). The Board of Trustees of the Trust unanimously approved the continued participation of Money Market in the Extended Program. Participation in the Extended Program required a payment to the Treasury Department of 0.015% of the net asset value of Money Market as of September 19, 2008. The above expenses have been borne by Mon ey Market without regard to any contractual or voluntary expense limitation currently in effect for the Portfolio.

Concentration of Risk. Certain Portfolios may have a significant investment in international securities. International investing involves additional risks including, but not limited to, currency fluctuations, political or economic conditions affecting the foreign country and differences in accounting standards and foreign regulations.

Other. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. Management has performed a review for subsequent events through August 28, 2009, the date this report was issued.

2. INVESTMENT MANAGEMENT AND PAYMENTS TO AFFILIATED PERSONS

Management Fees. WRIMCO, a wholly owned subsidiary of Waddell & Reed, Inc. (W&R), serves as the Trust's investment adviser. WRIMCO provides advice and supervises investments, for which services it is paid a fee. Until September 30, 2006, the fee was payable by each Portfolio, except for Pathfinder Aggressive, Pathfinder Conservative, Pathfinder Moderate, Pathfinder Moderately Aggressive and Pathfinder Moderately Conservative (collectively, the Pathfinder Portfolios) at the following annual rates:

Portfolio	Net Asset Breakpoints	Annual Rate
Asset Strategy	Up to $1 Billion	0.700%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
Balanced	Up to $1 Billion	0.700%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
Bond	Up to $500 Million	0.525%
	Over $500 Million up to $1 Billion	0.500%
	Over $1 Billion up to $1.5 Billion	0.450%
	Over $1.5 Billion	0.400%
Core Equity	Up to $1 Billion	0.700%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
Dividend Opportunities	Up to $1 Billion	0.700%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
Energy	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Global Natural Resources	Up to $500 Million	1.000%
	Over $500 Million up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Growth	Up to $1 Billion	0.700%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
High Income	Up to $500 Million	0.625%
	Over $500 Million up to $1 Billion	0.600%
	Over $1 Billion up to $1.5 Billion	0.550%
	Over $1.5 Billion	0.500%
International Growth	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
International Value	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Micro Cap Growth	Up to $1 Billion	0.950%
	Over $1 Billion up to $2 Billion	0.930%
	Over $2 Billion up to $3 Billion	0.900%
	Over $3 Billion	0.860%
Mid Cap Growth	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Money Market	All Net Assets	0.400%
Mortgage Securities	Up to $500 Million	0.500%
	Over $500 Million up to $1 Billion	0.450%
	Over $1 Billion up to $1.5 Billion	0.400%
	Over $1.5 Billion	0.350%
Real Estate Securities	Up to $1 Billion	0.900%
	Over $1 Billion up to $2 Billion	0.870%
	Over $2 Billion up to $3 Billion	0.840%
	Over $3 Billion	0.800%
Science and Technology	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Small Cap Growth	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Small Cap Value	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Value	Up to $1 Billion	0.700%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%

Effective October 1, 2006, under terms of a settlement agreement reached in July 2006 (see Note 13), the fee is payable by each Portfolio, except the Pathfinder Portfolios, at the following annual rates:

Portfolio	Net Asset Breakpoints	Annual Rate
Asset Strategy	Up to $1 Billion	0.690%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
Balanced	Up to $1 Billion	0.700%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
Bond	Up to $500 Million	0.485%
	Over $500 Million up to $1 Billion	0.500%
	Over $1 Billion up to $1.5 Billion	0.450%
	Over $1.5 Billion	0.400%
Core Equity	Up to $1 Billion	0.650%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
Dividend Opportunities	Up to $1 Billion	0.700%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
Energy	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Global Natural Resources	Up to $500 Million	1.000%
	Over $500 Million up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Growth	Up to $1 Billion	0.670%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%
High Income	Up to $500 Million	0.575%
	Over $500 Million up to $1 Billion	0.600%
	Over $1 Billion up to $1.5 Billion	0.550%
	Over $1.5 Billion	0.500%
International Growth	Up to $1 Billion	0.820%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
International Value	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Micro Cap Growth	Up to $1 Billion	0.950%
	Over $1 Billion up to $2 Billion	0.930%
	Over $2 Billion up to $3 Billion	0.900%
	Over $3 Billion	0.860%
Mid Cap Growth	Up to $1 Billion	0.830%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Money Market	All Net Assets	0.400%
Mortgage Securities	Up to $500 Million	0.500%
	Over $500 Million up to $1 Billion	0.450%
	Over $1 Billion up to $1.5 Billion	0.400%
	Over $1.5 Billion	0.350%
Real Estate Securities	Up to $1 Billion	0.900%
	Over $1 Billion up to $2 Billion	0.870%
	Over $2 Billion up to $3 Billion	0.840%
	Over $3 Billion	0.800%
Science and Technology	Up to $1 Billion	0.830%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Small Cap Growth	Up to $1 Billion	0.830%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Small Cap Value	Up to $1 Billion	0.850%
	Over $1 Billion up to $2 Billion	0.830%
	Over $2 Billion up to $3 Billion	0.800%
	Over $3 Billion	0.760%
Value	Up to $1 Billion	0.690%
	Over $1 Billion up to $2 Billion	0.650%
	Over $2 Billion up to $3 Billion	0.600%
	Over $3 Billion	0.550%

Effective August 6, 2007, the fee is contractually payable by Bond as follows:

Bond	Up to $1 Billion	0.475%
	Over $1 Billion up to $1.5 Billion	0.450%
	Over $1.5 Billion	0.400%

The management fee for each Portfolio as described above is accrued and paid daily.

The Pathfinder Portfolios pay no management fees; however, WRIMCO receives management fees from the underlying funds.

WRIMCO has agreed to waive a Portfolio's investment management fee on any Portfolio, except the Pathfinder Portfolios, that is not subadvised on any day that the Portfolio's net assets are less than $25 million, subject to its right to change or modify this waiver.

WRIMCO has entered into Subadvisory Agreements with the following entities on behalf of certain Portfolios.

Under agreements between WRIMCO and the named entities, the following serve as sub-advisors to certain Portfolios: Mackenzie Financial Corporation serves as subadvisor to Global Natural Resources. Wall Street Associates serves as subadvisor to Micro Cap Growth. Advantus Capital Management, Inc. serves as subadvisor to Mortgage Securities and Real Estate Securities. Each subadvisor makes investment decisions in accordance with the Portfolio's investment objectives, policies and restrictions under the supervision of WRIMCO and the Board of Trustees. WRIMCO pays all costs associated with retaining the subadvisors. From August 20, 2003 to May 26, 2009, Templeton Investment Counsel, LLC served as subadvisor to International Value. Effective May 27, 2009, WRIMCO serves as investment advisor to International Value.

Accounting Services Fees. The Trust has an Accounting Services Agreement with Waddell & Reed Services Company (WRSCO), an affiliate of W&R. Under the agreement, WRSCO acts as the agent in providing bookkeeping and accounting services and assistance to the Trust, including maintenance of Portfolio records, pricing of Portfolio shares and preparation of certain shareholder reports. For these services, each Portfolio (excluding Pathfinder Portfolios) pays WRSCO a monthly fee of one-twelfth of the annual fee shown in the following table:

Accounting Services Fee
Average Net Asset Level (in millions)						Annual Fee Rate for Each Level
From	$	0	to	$	10		$	0
From	$	10	to	$	25		$	11.5
From	$	25	to	$	50		$	23.1
From	$	50	to	$	100		$	35.5
From	$	100	to	$	200		$	48.4
From	$	200	to	$	350		$	63.2
From	$	350	to	$	550		$	82.5
From	$	550	to	$	750		$	96.3
From	$	750	to	$	1,000		$	121.6
From	$	1,000 and Over					$	148.5

Under the Accounting Services Agreement, each Pathfinder Portfolio pays WRSCO a monthly fee of one-twelfth of the annual fee shown in the following table.

Accounting Services Fee
Average Net Asset Level (in millions)						Annual Fee Rate for Each Level
From	$	0	to	$	10		$	0
From	$	10	to	$	25		$	5.75
From	$	25	to	$	50		$	11.55
From	$	50	to	$	100		$	17.75
From	$	100	to	$	200		$	24.20
From	$	200	to	$	350		$	31.60
From	$	350	to	$	550		$	41.25
From	$	550	to	$	750		$	48.15
From	$	750	to	$	1,000		$	60.80
From	$	1,000 and Over					$	74.25

Administrative Fee. Each Portfolio also pays WRSCO a monthly fee at the annual rate of 0.01%, or one basis point, for the first $1 billion of net assets with no fee charged for net assets in excess of $1 billion. This fee is voluntarily waived by WRSCO until a Portfolio's net assets are at least $10 million.

Transfer Agency. Under the Transfer Agency Agreement between the Trust and WRSCO, each Portfolio reimburses WRSCO for certain out-of-pocket costs.

Service Plan. Under a Service Plan adopted by the Trust pursuant to Rule 12b-1 under the Investment Company Act of 1940, each Portfolio, except Money Market, may pay a service fee to W&R in an amount not to exceed 0.25% of the Portfolio's average annual net assets. The fee is to be paid to compensate W&R for amounts it expends in connection with the provision of personal services to Policyowners and/or maintenance of Policyowner accounts.

Expense Reimbursements and/or Waivers. During the fiscal period ended June 30, 2009, the following amounts were waived as a result of the reduced management fees related to the NYAG settlement (discussed in Note 13):

Asset Strategy	$	36
Bond		86
Core Equity		90
Growth		109
High Income		41
International Growth		23
Mid Cap Growth		5
Science and Technology		23
Small Cap Growth		28
Value		11

During the fiscal period ended June 30, 2009, the following amounts were waived as a result of the reduced management fees related to the voluntary waiver of management fee to any Portfolio, excluding Pathfinder Portfolios, having less than $25 million in net assets:

Energy $ 71

3. INVESTMENT VALUATIONS

In accordance with Accounting Standards Codification (ASC) Section 820-10 (formerly Financial Accounting Standard 157), fair value is defined as the price that each Portfolio would receive upon selling an asset or paying to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820-10 also establishes a framework for measuring fair value and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity's own assumptions about the factors that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. An individual investment's fair value measurement is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.

Level 1 - unadjusted quoted prices in active markets for identical securities

Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3 - significant unobservable inputs (including each Portfolio's own assumptions in determining the fair value of investments)

The following tables summarize the valuation of each Portfolio's investments by the above ASC 820-10 fair value hierarchy levels as of June 30, 2009:

Portfolio	Level 1			Level 2			Level 3
Pathfinder Aggressive
Investments in Securities
Affiliated Mutual Funds	$	49,039		$	––		$	––
Short-Term Securities		––			92			––
		49,039			92			––
Other Financial Instruments+		––			––			––
Total	$	49,039		$	92		$	––
Pathfinder Conservative
Investments in Securities
Affiliated Mutual Funds	$	31,997		$	––		$	––
Short-Term Securities		––			121			––
		31,997			121			––
Other Financial Instruments+		––			––			––
Total	$	31,997		$	121		$	––
Pathfinder Moderate
Investments in Securities
Affiliated Mutual Funds	$	161,245		$	––		$	––
Short-Term Securities		––			1,545			––
		161,245			1,545			––
Other Financial Instruments+		––			––			––
Total	$	161,245		$	1,545		$	––
Pathfinder Moderately Aggressive
Investments in Securities
Affiliated Mutual Funds	$	202,557		$	––		$	––
Short-Term Securities		––			553			––
		202,557			553			––
Other Financial Instruments+		––			––			––
Total	$	202,557		$	553		$	––
Pathfinder Moderately Conservative
Investments in Securities
Affiliated Mutual Funds	$	68,551		$	––		$	––
Short-Term Securities		––			312			––
		68,551			312			––
Other Financial Instruments+		––			––			––
Total	$	68,551		$	312		$	––
Asset Strategy
Investments in Securities
Common Stocks	$	528,451		$	5,533		$	––
Investment Funds		––			––			1,122
Corporate Debt Securities		––			41,625			––
Municipal Bonds		––			6,241			––
Put Options		––			––			12,543
Senior Loans		––			1,309			––
United States Government Agency Obligations		––			10,911			––
Bullion		131,057			––			––
Short-Term Securities		––			65,789			––
		659,508			131,408			13,665
Other Financial Instruments+		––			(414	)		––
Total	$	659,508		$	130,994		$	13,665
Balanced
Investments in Securities
Common Stocks	$	234,065		$	––		$	––
Corporate Debt Securities		––			40,588			1
United States Government Agency Obligations		––			12,450			––
United States Government Obligations		––			58,784			––
Short-Term Securities		––			393			––
		234,065			112,215			1
Other Financial Instruments+		––			––			––
Total	$	234,065		$	112,215		$	1
Bond
Investments in Securities
Corporate Debt Securities	$	––		$	181,181		$	502
Municipal Bonds		––			1,321			––
Other Government Securities		––			3,234			––
United States Government Agency Obligations		––			124,769			7,843
United States Government Obligations		––			32,928			––
Short-Term Securities		––			16,778			––
		––			360,211			8,345
Other Financial Instruments+		––			––			––
Total	$	––		$	360,211		$	8,345
Core Equity
Investments in Securities
Common Stocks	$	366,303		$	––		$	––
Short-Term Securities		––			7,263			––
		366,303			7,263			––
Other Financial Instruments+		––			––			––
Total	$	366,303		$	7,263		$	––
Dividend Opportunities
Investments in Securities
Common Stocks	$	141,601		$	––		$	––
Short-Term Securities		––			18,152			––
		141,601			18,152			––
Other Financial Instruments+		––			––			––
Total	$	141,601		$	18,152		$	––
Energy
Investments in Securities
Common Stocks	$	22,627		$	––		$	––
Short-Term Securities		––			2,457			––
		22,627			2,457			––
Other Financial Instruments+		––			––			––
Total	$	22,627		$	2,457		$	––
Global Natural Resources
Investments in Securities
Common Stocks and Rights	$	106,686		$	893		$	168
Preferred Stocks		4,578			––			348
Call Options		3,892			––			––
Corporate Debt Securities		––			498			76
Short-Term Securities		––			7,191			––
		115,156			8,582			592
Other Financial Instruments+		134			(40	)		––
Total	$	115,290		$	8,542		$	592
Growth
Investments in Securities
Common Stocks	$	766,123		$	––		$	––
Short-Term Securities		––			14,804			––
		766,123			14,804			––
Other Financial Instruments+		––			––			––
Total	$	766,123		$	14,804		$	––
High Income
Investments in Securities
Common Stocks	$	550		$	––		$	––
Corporate Debt Securities		––			168,499			693
Senior Loans		––			10,029			––
Short-Term Securities		––			6,222			––
		550			184,750			693
Other Financial Instruments+		––			––			––
Total	$	550		$	184,750		$	693
International Growth
Investments in Securities
Common Stocks and Rights	$	160,062		$	180		$	––
Preferred Stocks		4,363			––			––
Short-Term Securities		––			8,584			––
		164,425			8,764			––
Other Financial Instruments+		––			––			––
Total	$	164,425		$	8,764		$	––
International Value
Investments in Securities
Common Stocks	$	396,885		$	16,277		$	––
Preferred Stocks		5,380			––			––
Short-Term Securities		––			7,777			––
		402,265			24,054			––
Other Financial Instruments+		––			––			––
Total	$	402,265		$	24,054		$	––
Micro Cap Growth
Investments in Securities
Common Stocks	$	32,033		$	––		$	––
Short-Term Securities		––			113			––
		32,033			113			––
Other Financial Instruments+		––			––			––
Total	$	32,033		$	113		$	––
Mid Cap Growth
Investments in Securities
Common Stocks	$	59,004		$	––		$	––
Call Options		––			––			115
Corporate Debt Securities		––			106			––
Short-Term Securities		––			7,150			––
		59,004			7,256			115
Other Financial Instruments+		––			––			(139	)
Total	$	59,004		$	7,256		$	(24	)
Money Market
Investments in Securities
Corporate Obligations	$	––		$	186,563		$	––
Municipal Obligations		––			22,815			––
United States Government Agency Obligations		––			7,961			––
		––			217,339			––
Other Financial Instruments+		––			––			––
Total	$	––		$	217,339		$	––
Mortgage Securities
Investments in Securities
Corporate Debt Securities	$	––		$	4,440		$	209
United States Government Agency Obligations		––			18,337			––
Short-Term Securities		––			7,640			––
		––			30,417			209
Other Financial Instruments+		(5	)		––			––
Total	$	(5	)	$	30,417		$	209
Real Estate Securities
Investments in Securities
Common Stocks	$	23,396		$	––		$	––
Investment Funds		31			––			––
Short-Term Securities		––			979			––
		23,427			979			––
Other Financial Instruments+		––			––			––
Total	$	23,427		$	979		$	––
Science and Technology
Investments in Securities
Common Stocks	$	211,825		$	––		$	––
Corporate Debt Securities		––			9,814			––
Short-Term Securities		––			29,962			––
		211,825			39,776			––
Other Financial Instruments+		––			––			––
Total	$	211,825		$	39,776		$	––
Small Cap Growth
Investments in Securities
Common Stocks	$	283,729		$	––		$	––
Short-Term Securities		––			34,059			––
		283,729			34,059			––
Other Financial Instruments+		––			––			––
Total	$	283,729		$	34,059		$	––
Small Cap Value
Investments in Securities
Common Stocks	$	147,285		$	––		$	––
Short-Term Securities		––			13,962			––
		147,285			13,962			––
Other Financial Instruments+		––			––			––
Total	$	147,285		$	13,962		$	––
Value
Investments in Securities
Common Stocks	$	223,205		$	––		$	––
Preferred Stocks		––			2,049			––
Short-Term Securities		––			3,249			––
		223,205			5,298			––
Other Financial Instruments+		(48	)		––			(77	)
Total	$	223,157		$	5,298		$	(77	)

+Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as written options, futures, forward foreign currency contracts and swap contracts.

The following tables are a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:

	Common Stocks				Preferred Stocks			Investment Funds			Corporate Debt Securities			Put Options			United States Government Agency Obligations
Asset Strategy
Beginning Balance 1-1-09		$	––		$	––		$	969		$	––		$	––		$	––
Net realized gain (loss)			––			––			––			––			––			––
Net unrealized appreciation      (depreciation)			––			––			(89	)		––			(13,283	)		––
Net purchases (sales)			––			––			242			––			25,826			––
Transfers in and/or (out) of      Level 3 during the period			––			––			––			––			––			––
Ending Balance 6-30-09		$	––		$	––		$	1,122		$	––		$	12,543		$	––
Net change in unrealized      appreciation (depreciation)      for all Level 3 investments      still held as of 6-30-09		$	––		$	––		$	(89	)	$	––		$	(13,283	)	$	––
Balanced
Beginning Balance 1-1-09		$	––		$	––		$	––		$	2		$	––		$	––
Net realized gain (loss)			––			––			––			(80	)		––			––
Net unrealized appreciation      (depreciation)			––			––			––			118			––			––
Net purchases (sales)			––			––			––			(39	)		––			––
Transfers in and/or (out) of      Level 3 during the period			––			––			––			––			––			––
Ending Balance 6-30-09		$	––		$	––		$	––		$	1		$	––		$	––
Net change in unrealized      appreciation (depreciation)      for all Level 3 investments      still held as of 6-30-09		$	––		$	––		$	––		$	118		$	––		$	––
Bond
Beginning Balance 1-1-09		$	––		$	––		$	––		$	522		$	––		$	––
Net realized gain (loss)			––			––			––			(348	)		––			––
Net unrealized appreciation       (depreciation)			––			––			––			525			––			––
Net purchases (sales)			––			––			––			(197	)		––			––
Transfers in and/or (out) of       Level 3 during the period			––			––			––			––			––			7,843
Ending Balance 6-30-09		$	––		$	––		$	––		$	502		$	––		$	7,843
Net change in unrealized       appreciation (depreciation)       for all Level 3 investments       still held as of 6-30-09		$	––		$	––		$	––		$	655		$	––		$	130
Global Natural Resources
Beginning Balance 1-1-09		$	280		$	409		$	––		$	77		$	––		$	––
Net realized gain (loss)			––			––			––			––			––			––
Net unrealized appreciation       (depreciation)			(112	)		(61	)		––			(1	)		––			––
Net purchases (sales)			––			––			––			––			––			––
Transfers in and/or (out) of       Level 3 during the period			––			––			––			––			––			––
Ending Balance 6-30-09		$	168		$	348		$	––		$	76		$	––		$	––
Net change in unrealized       appreciation (depreciation)       for all Level 3 investments       still held as of 6-30-09		$	(112	)	$	(61	)	$	––		$	(1	)	$	––		$	––
High Income
Beginning Balance 1-1-09		$	––		$	––		$	––		$	1,935		$	––		$	––
Net realized gain (loss)			––			––			––			(499	)		––			––
Net unrealized appreciation       (depreciation)			––			––			––			630			––			––
Net purchases (sales)			––			––			––			(120	)		––			––
Transfers in and/or (out) of       Level 3 during the period			––			––			––			(1,253	)		––			––
Ending Balance 6-30-09		$	––		$	––		$	––		$	693		$	––		$	––
Net change in unrealized       appreciation (depreciation)       for all Level 3 investments       still held as of 6-30-09		$	––		$	––		$	––		$	12		$	––		$	––

	Common Stocks				Corporate Debt Securities			Put Options			Call Options			Other Financial Instruments+
International Growth
Beginning Balance 1-1-09		$	2,508		$	––		$	––		$	––		$	––
Net realized gain (loss)			––			––			––			––			––
Net unrealized appreciation       (depreciation)			––			––			––			––			––
Net purchases (sales)			––			––			––			––			––
Transfers in and/or (out) of       Level 3 during the period			(2,508	)		––			––			––			––
Ending Balance 6-30-09		$	––		$	––		$	––		$	––		$	––
Net change in unrealized       appreciation (depreciation)       for all Level 3 investments       still held as of 6-30-09		$	––		$	––		$	––		$	––		$	––
Mid Cap Growth
Beginning Balance 1-1-09		$	––		$	––		$	––		$	––		$	––
Net realized gain (loss)			––			––			––			––			––
Net unrealized appreciation       (depreciation)			––			––			––			(64	)		23
Net purchases (sales)			––			––			––			179			(162	)
Transfers in and/or (out) of       Level 3 during the period			––			––			––			––			––
Ending Balance 6-30-09		$	––		$	––		$	––		$	115		$	(139	)
Net change in unrealized       appreciation (depreciation)       for all Level 3 investments       still held as of 6-30-09		$	––		$	––		$	––		$	(64	)	$	23
Mortgage Securities
Beginning Balance 1-1-09		$	––		$	217		$	––		$	––		$	––
Net realized gain (loss)			––			––	*		––			––			––
Net unrealized appreciation       (depreciation)			––			––	*		––			––			––
Net purchases (sales)			––			(8	)		––			––			––
Transfers in and/or (out) of       Level 3 during the period			––			––			––			––			––
Ending Balance 6-30-09		$	––		$	209		$	––		$	––		$	––
Net change in unrealized       appreciation (depreciation)       for all Level 3 investments       still held as of 6-30-09		$	––		$	––	*	$	––		$	––		$	––
Science and Technology
Beginning Balance 1-1-09		$	––		$	––		$	981		$	––		$	(1,458	)
Net realized gain (loss)			––			––			(999	)		––			1,041
Net unrealized appreciation       (depreciation)			––			––			187			––			(916	)
Net purchases (sales)			––			––			(169	)		––			1,333
Transfers in and/or (out) of       Level 3 during the period			––			––			––			––			––
Ending Balance 6-30-09		$	––		$	––		$	––		$	––		$	––
Net change in unrealized       appreciation (depreciation)       for all Level 3 investments       still held as of 6-30-09		$	––		$	––		$	––		$	––		$	––
Value
Beginning Balance 1-1-09		$	––		$	––		$	––		$	––		$	(221	)
Net realized gain (loss)			––			––			––			––			168
Net unrealized appreciation       (depreciation)			––			––			––			––			99
Net purchases (sales)			––			––			––			––			(123	)
Transfers in and/or (out) of       Level 3 during the period			––			––			––			––			––
Ending Balance 6-30-09		$	––		$	––		$	––		$	––		$	(77	)
Net change in unrealized       appreciation (depreciation)       for all Level 3 investments       still held as of 6-30-09		$	––		$	––		$	––		$	––		$	99
*Not shown due to rounding.
+Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as written options, futures, forward foreign currency contracts and swap contracts.

Net realized gain (loss) and net unrealized appreciation (depreciation), shown on the reconciliation of Level 3 investments if applicable, are included on the Statement of Operations on separate lines of the Realized and Unrealized Gain (Loss) section for the corresponding security type indicated above. Additionally, the Net change in unrealized appreciation for all Level 3 investments still held as of 6-30-09, if applicable, is included on the Statement of Operations on the lines of the Net change in unrealized appreciation (depreciation) section for the corresponding security type indicated above.

Securities' values included in the reconciliations above have been primarily determined through the use of a single quote (or multiple quotes) from dealer(s) in the securities using proprietary valuation models. These quotes involve significant unobservable inputs, and thus the related securities are classified as Level 3 investments.

4. INVESTMENT SECURITIES TRANSACTIONS

For the fiscal period ended June 30, 2009, the cost of purchases and the proceeds from maturities and sales of investment securities, other than U.S. Government and short-term securities, were as follows:

	Purchases		Sales
Pathfinder Aggressive	$	5,811	$	1,013
Pathfinder Conservative		20,396		883
Pathfinder Moderate		79,367		358
Pathfinder Moderately Aggressive		81,560		174
Pathfinder Moderately Conservative		37,561		2,456
Asset Strategy		542,308		295,557
Balanced		59,198		52,782
Bond		75,532		12,700
Core Equity		199,080		220,943
Dividend Opportunities		44,552		15,321
Energy		2,192		1,361
Global Natural Resources		69,474		52,193
Growth		177,142		178,291
High Income		66,640		48,405
International Growth		59,909		38,639
International Value		336,865		308,050
Micro Cap Growth		7,742		8,176
Mid Cap Growth		15,014		8,896
Money Market		––		––
Mortgage Securities		––		44,176
Real Estate Securities		5,939		5,668
Science and Technology		47,916		77,592
Small Cap Growth		46,181		83,937
Small Cap Value		65,960		66,945
Value		92,460		91,776

Purchases and proceeds from maturities and sales of U.S. Government securities were:

	Purchases		Sales
Asset Strategy	$	34,264	$	39,260
Balanced		––		940
Bond		3,099		40,231
Mortgage Securities		43,095		2,276

5. FEDERAL INCOME TAX MATTERS

For Federal income tax purposes, the Portfolios' distributed and undistributed earnings and profit for the fiscal year ended December 31, 2008 and the related net capital losses and post-October activity were as follows:

	Pathfinder Aggressive		Pathfinder Conservative		Pathfinder Moderate		Pathfinder Moderately Aggressive		Pathfinder Moderately Conservative		Asset Strategy
Net ordinary income	$	253	$	23	$	291	$	534	$	78	$	3,018
Distributed ordinary income		––		––		––		––		––		36,718
Undistributed ordinary income		253		23		291		534		78		3,017
Realized long term capital gains		445		37		527		966		162		78,978
Distributed long term capital gains		––		––		––		––		––		27,292
Undistributed long term       capital gains		445		37		527		966		162		78,973
Post-October losses deferred		––		––		––		––		––		53,298

	Balanced		Bond		Core Equity		Dividend Opportunities		Energy		Global Natural Resources
Net ordinary income	$	7,290	$	13,698	$	3,939	$	1,438	$	––	$	––
Distributed ordinary income		472		306		5,001		143		45		6,392
Undistributed ordinary income		7,290		13,694		3,932		1,434		––		––
Realized long term capital gains		2,098		––		––		––		––		––
Distributed long term capital gains		329		––		10,724		235		14		3,418
Undistributed long term       capital gains		2,095		––		––		––		––		––
Tax return of capital		––		––		––		––		1		5
Post-October losses deferred		––		––		16,979		1,956		––		8,253

	Growth		High Income		International Growth		International Value		Micro Cap Growth		Mid Cap Growth
Net ordinary income	$	2,985	$	16,680	$	2,686	$	15,262	$	––	$	––
Distributed ordinary income		––		1,165		570		4,194		––		166
Undistributed ordinary income		2,985		16,673		2,683		15,258		––		––
Realized long term capital gains		22,104		––		––		24,549		––		––
Distributed long term capital gains		10,490		––		4,743		9,017		––		754
Undistributed long term       capital gains		22,098		––		––		24,546		––		––
Tax return of capital		––		––		––		––		––		1
Post-October losses deferred		20,302		3,480		15,047		––		264		363

	Money Market		Mortgage Securities		Real Estate Securities		Science and Technology		Small Cap Growth		Small Cap Value
Net ordinary income	$	2,836	$	1,397	$	828	$	945	$	1,290	$	––
Distributed ordinary income		2,825		302		253		4,171		1,797		3,274
Undistributed ordinary income		15		1,396		826		944		1,285		––
Realized long term capital gains		––		––		––		15,597		––		––
Distributed long term capital gains		––		––		730		4,240		4,208		624
Undistributed long term       capital gains		––		––		––		15,597		––		––
Tax return of capital		––		––		––		––		––		2
Post-October losses deferred		––		174		2,953		290		4,139		4,009

	Value
Net ordinary income	$	4,576
Distributed ordinary income		752
Undistributed ordinary income		4,569
Realized long term capital gains		––
Distributed long term capital gains		2,336
Undistributed long term       capital gains		––
Post-October losses deferred		8,125

Internal Revenue Code regulations permit each Portfolio to defer into its next fiscal year net capital losses or net long-term capital losses and currency losses incurred between each November 1 and the end of its fiscal year (post-October losses).

Capital loss carryovers are available to offset future realized capital gain net income incurred in the eight taxable years succeeding the loss year for Federal income tax purposes. The following tables show the totals by year in which the capital loss carryovers will expire if not utilized.

	Bond			Core Equity			Dividend Opportunities			Energy			Global Natural Resources			Growth
December 31, 2009		$	––		$	––		$	––		$	––		$	––		$	18,208
December 31, 2010			––			2,963			––			––			––			9,862
December 31, 2014			1,922			––			––			––			––			––
December 31, 2015			376			––			––			––			––			––
December 31, 2016			––			1,098			4,170			1,276			2,122			––
Total carryover		$	2,298		$	4,061		$	4,170		$	1,276		$	2,122		$	28,070

	High Income			International Growth			Micro Cap Growth			Mid Cap Growth			Mortgage Securities			Real Estate Securities
December 31, 2009		$	9,638		$	––		$	––		$	––		$	––		$	––
December 31, 2010			13,912			––			1,352			––			––			––
December 31, 2013			––			––			––			––			28			––
December 31, 2014			1,102			––			––			––			168			––
December 31, 2016			9,327			8,420			765			998			292			1,888
Total carryover		$	33,979		$	8,420		$	2,117		$	998		$	488		$	1,888

	Small Cap Growth		Small Cap Value		Value
December 31, 2009	$	12,729	$	––	$	––
December 31, 2010		10,215		––		––
December 31, 2016		22,325		28,940		22,440
Total carryover	$	45,269	$	28,940	$	22,440

Advantus Core Equity Portfolio was merged into Ivy Funds VIP Core Equity (formerly Target Core Equity Portfolio) as of September 22, 2003. At the time of the merger, Advantus Core Equity Portfolio had capital loss carryovers available to offset future gains of the Ivy Funds VIP Core Equity. These carryovers are limited to $1,976 for the period ending December 31, 2009 and $988 for the period ending December 31, 2010 plus any unused limitations from prior years.

Advantus Small Company Growth Portfolio was merged into Ivy Funds VIP Small Cap Growth (formerly Target Small Cap Growth Portfolio) as of September 22, 2003. At the time of the merger, Advantus Small Company Growth Portfolio had capital loss carryovers available to offset future gains of the Ivy Funds VIP Small Cap Growth. These carryovers are limited to $15,296 for the period ending December 31, 2009 and $7,648 for the period ending December 31, 2010 plus any unused limitations from prior years.

Target Limited-Term Bond Portfolio was merged into Ivy Funds VIP Bond (formerly Target Bond Portfolio) as of August 5, 2007. At the time of the merger, Target Limited-Term Bond Portfolio had capital loss carryovers available to offset future gains of the Ivy Funds VIP Bond. These carryovers amount to $207 as of December 31, 2008 and will expire if not utilized by December 31, 2014.

6. CAPITAL SHARE TRANSACTIONS

Transactions in capital stock are summarized below.

	Six months ended 6-30-09					Fiscal year ended 12-31-08
Portfolio	Shares		Value			Shares		Value
Pathfinder Aggressive
Shares issued from sale of shares	1,516		$	5,464		11,662		$	55,995
Shares issued in reinvestment of dividends       and/or capital gains distribution	179			701		––			––
Shares redeemed	(459	)		(1,653	)	(400	)		(1,647	)
Net increase	1,236		$	4,512		11,262		$	54,348
Pathfinder Conservative
Shares issued from sale of shares	4,584		$	20,051		2,781		$	12,959
Shares issued in reinvestment of dividends       and/or capital gains distribution	13			62		––			––
Shares redeemed	(318	)		(1,423	)	(92	)		(422	)
Net increase	4,279		$	18,690		2,689		$	12,537
Pathfinder Moderate
Shares issued from sale of shares	19,014		$	76,687		19,483		$	88,394
Shares issued in reinvestment of dividends       and/or capital gains distribution	198			828		––			––
Shares redeemed	(237	)		(936	)	(176	)		(768	)
Net increase	18,975		$	76,579		19,307		$	87,626
Pathfinder Moderately Aggressive
Shares issued from sale of shares	19,651		$	77,909		29,124		$	135,501
Shares issued in reinvestment of dividends       and/or capital gains distribution	366			1,511		––			––
Shares redeemed	(318	)		(1,216	)	(298	)		(1,406	)
Net increase	19,699		$	78,204		28,826		$	134,095
Pathfinder Moderately Conservative
Shares issued from sale of shares	8,627		$	36,659		7,533		$	34,821
Shares issued in reinvestment of dividends       and/or capital gains distribution	56			246		––			––
Shares redeemed	(715	)		(2,946	)	(68	)		(327	)
Net increase	7,968		$	33,959		7,465		$	34,494
Asset Strategy
Shares issued from sale of shares	16,412		$	135,999		12,786		$	145,585
Shares issued in reinvestment of dividends       and/or capital gains distribution	10,547			81,904		7,811			64,009
Shares redeemed	(6,738	)		(55,808	)	(12,698	)		(133,230	)
Net increase	20,221		$	162,095		7,899		$	76,364
Balanced
Shares issued from sale of shares	573		$	4,223		1,515		$	13,511
Shares issued in reinvestment of dividends       and/or capital gains distribution	1,274			9,390		106			801
Shares redeemed	(4,786	)		(34,874	)	(9,774	)		(85,675	)
Net decrease	(2,939	)	$	(21,261	)	(8,153	)	$	(71,363	)
Bond
Shares issued from sale of shares	10,258		$	54,642		17,868		$	94,325
Shares issued in reinvestment of dividends       and/or capital gains distribution	2,605			13,706		57			306
Shares redeemed	(5,769	)		(30,789	)	(10,946	)		(57,664	)
Net increase	7,094		$	37,559		6,979		$	36,967
Core Equity
Shares issued from sale of shares	549		$	4,234		1,250		$	13,531
Shares issued in reinvestment of dividends       and/or capital gains distribution	496			3,944		2,009			15,725
Shares redeemed	(5,063	)		(37,939	)	(11,241	)		(123,309	)
Net decrease	(4,018	)	$	(29,761	)	(7,982	)	$	(94,053	)
Dividend Opportunities
Shares issued from sale of shares	8,642		$	41,873		11,200		$	73,540
Shares issued in reinvestment of dividends       and/or capital gains distribution	301			1,506		77			379
Shares redeemed	(1,696	)		(7,958	)	(2,280	)		(14,780	)
Net increase	7,247		$	35,421		8,997		$	59,139
Energy
Shares issued from sale of shares	978		$	3,946		2,610		$	17,103
Shares issued in reinvestment of dividends       and/or capital gains distribution	––			––		17			61
Shares redeemed	(431	)		(1,589	)	(1,078	)		(5,872	)
Net increase	547		$	2,357		1,549		$	11,292
Global Natural Resources
Shares issued from sale of shares	8,577		$	35,217		4,707		$	32,047
Shares issued in reinvestment of dividends       and/or capital gains distribution	––			––		3,097			9,814
Shares redeemed	(2,057	)		(7,877	)	(3,146	)		(22,116	)
Net increase	6,520		$	27,340		4,658		$	19,745
Growth
Shares issued from sale of shares	4,559		$	34,051		7,593		$	74,487
Shares issued in reinvestment of dividends       and/or capital gains distribution	3,325			25,102		1,433			10,490
Shares redeemed	(8,549	)		(62,591	)	(17,312	)		(174,127	)
Net decrease	(665	)	$	(3,438	)	(8,286	)	$	(89,150	)
High Income
Shares issued from sale of shares	5,606		$	14,909		4,317		$	13,202
Shares issued in reinvestment of dividends       and/or capital gains distribution	6,254			16,681		477			1,165
Shares redeemed	(3,879	)		(10,431	)	(12,457	)		(36,457	)
Net increase (decrease)	7,981		$	21,159		(7,663	)	$	(22,090	)
International Growth
Shares issued from sale of shares	3,106		$	17,691		4,761		$	39,783
Shares issued in reinvestment of dividends       and/or capital gains distribution	454			2,689		911			5,313
Shares redeemed	(2,752	)		(15,186	)	(5,445	)		(45,873	)
Net increase (decrease)	808		$	5,194		227		$	(777	)
International Value
Shares issued from sale of shares	2,542		$	29,708		4,300		$	73,282
Shares issued in reinvestment of dividends       and/or capital gains distribution	3,376			39,813		1,099			13,212
Shares redeemed	(2,244	)		(25,697	)	(3,362	)		(59,444	)
Net increase	3,674		$	43,824		2,037		$	27,050
Micro Cap Growth
Shares issued from sale of shares	172		$	1,911		282		$	4,357
Shares issued in reinvestment of dividends       and/or capital gains distribution	––			––		––			––
Shares redeemed	(289	)		(3,095	)	(520	)		(8,491	)
Net decrease	(117	)	$	(1,184	)	(238	)	$	(4,134	)
Mid Cap Growth
Shares issued from sale of shares	2,479		$	11,508		3,772		$	22,260
Shares issued in reinvestment of dividends       and/or capital gains distribution	––			––		216			922
Shares redeemed	(770	)		(3,334	)	(1,110	)		(6,635	)
Net increase	1,709		$	8,174		2,878		$	16,547
Money Market
Shares issued from sale of shares	69,222		$	69,222		177,389		$	177,389
Shares issued in reinvestment of dividends       and/or capital gains distribution	1,270			1,270		2,825			2,825
Shares redeemed	(51,819	)		(51,819	)	(68,686	)		(68,686	)
Net increase	18,673		$	18,673		111,528		$	111,528
Mortgage Securities
Shares issued from sale of shares	345		$	1,503		1,301		$	6,367
Shares issued in reinvestment of dividends       and/or capital gains distribution	330			1,400		69			302
Shares redeemed	(880	)		(3,867	)	(1,890	)		(8,950	)
Net decrease	(205	)	$	(964	)	(520	)	$	(2,281	)
Real Estate Securities
Shares issued from sale of shares	777		$	2,652		1,306		$	8,526
Shares issued in reinvestment of dividends       and/or capital gains distribution	235			831		248			983
Shares redeemed	(965	)		(3,273	)	(1,745	)		(10,220	)
Net increase (decrease)	47		$	210		(191	)	$	(711	)
Science and Technology
Shares issued from sale of shares	1,391		$	16,741		1,167		$	17,258
Shares issued in reinvestment of dividends       and/or capital gains distribution	1,421			16,547		768			8,411
Shares redeemed	(1,950	)		(22,259	)	(4,192	)		(62,984	)
Net increase (decrease)	862		$	11,029		(2,257	)	$	(37,315	)
Small Cap Growth
Shares issued from sale of shares	1,599		$	9,755		2,501		$	19,652
Shares issued in reinvestment of dividends       and/or capital gains distribution	202			1,298		1,043			6,006
Shares redeemed	(4,167	)		(24,572	)	(9,050	)		(72,780	)
Net decrease	(2,366	)	$	(13,519	)	(5,506	)	$	(47,122	)
Small Cap Value
Shares issued from sale of shares	1,489		$	14,737		3,204		$	40,078
Shares issued in reinvestment of dividends       and/or capital gains distribution	––			––		403			3,900
Shares redeemed	(1,269	)		(12,310	)	(3,338	)		(42,183	)
Net increase	220		$	2,427		269		$	1,795
Value
Shares issued from sale of shares	3,915		$	14,979		6,712		$	34,913
Shares issued in reinvestment of dividends       and/or capital gains distribution	1,236			4,928		772			3,088
Shares redeemed	(4,953	)		(18,778	)	(8,963	)		(47,475	)
Net increase (decrease)	198		$	1,129		(1,479	)	$	(9,474	)

7. DERIVATIVE INSTRUMENTS

In March 2008, the Financial Accounting Standards Board (FASB) issued ASC Section 815-10 (formerly Financial Accounting Standard No. 161, "Disclosures about Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133"). ASC 815-10 amends and expands disclosures about derivative instruments and hedging activities; it requires qualitative disclosures about the objectives and strategies of derivative instruments, quantitative disclosures about the fair value amounts of and gains and losses on derivative instruments, and disclosures of credit-risk-related contingent features in hedging activities.

Forward Foreign Currency Contracts. Each Portfolio, other than Money Market and the Pathfinder Portfolios, may enter into forward foreign currency contracts (forward contracts) for the purchase or sale of a foreign currency at a negotiated rate at a future date. Forward contracts are reported on a schedule following the Schedule of Investments. Forward contracts will be valued daily based upon the closing prices of the forward currency rates determined at the close of the NYSE as provided by a bank, dealer or independent pricing service. The resulting unrealized appreciation and depreciation is reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations within the change in unrealized appreciation (depreciation). At contract close, the difference between the original cost of the contract and the value at the close date is recorded as a realized gain (loss) in the Statement of Operations.

Risks to a Portfolio include both market and credit risk. Market risk is the risk that the value of the forward contract will depreciate due to unfavorable changes in the exchange rates. Credit risk arises from the possibility that the counterparty will default. If the counterparty defaults, a Portfolio's loss will consist of the net amount of contractual payments that the Portfolio has not yet received.

Futures Contracts. Each Portfolio, other than Money Market and the Pathfinder Portfolios, may engage in buying and selling futures contracts. Upon entering into a futures contract, the Portfolio is required to deposit, in a segregated account, an amount equal to a varying specified percentage of the contract amount. This amount is known as the initial margin. Subsequent payments (variation margins) are made or received by the Portfolio each day, dependent on the daily fluctuations in the value of the underlying debt security or index.

Futures contracts are reported on a schedule following the Schedule of Investments. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are identified in the Schedule of Investments. Cash held by the broker to cover initial margin requirements on open futures contracts and the receivable and/or payable for the daily mark to market for the variation margin are noted in the Statement of Assets and Liabilities. The net change in unrealized appreciation (depreciation) is reported in the Statement of Operations. Realized gains (losses) are reported in the Statement of Operations at the closing or expiration of futures contracts.

Risks of entering into futures contracts include the possibility of loss of securities or cash held as collateral, that there may be an illiquid market where the Portfolio is unable to close the contract or enter into an offsetting position and, if used for hedging purposes, the risk that the price of the contract will correlate imperfectly with the prices of the Portfolio's securities.

Swap Agreements. Each Portfolio, other than Money Market and the Pathfinder Portfolios, may invest in swap agreements, which are agreements to exchange the return generated by one instrument for the return generated by another instrument.

Credit default swaps involve the exchange of a fixed rate premium for protection against the loss in value of an underlying security in the event of a defined credit event, such as payment default or bankruptcy. Under a credit default swap one party acts as a guarantor by receiving the fixed periodic payment in exchange for the commitment to purchase the underlying security at par if the defined credit event occurs. A Portfolio may enter into credit default swaps in which either it or its counterparty act as the guarantor.

Total return swaps involve a commitment to pay periodic interest payments in exchange for a market-linked return based on a security or a basket of securities representing a variety of securities or a particular index. To the extent the total return of the security, index or other financial measure underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the Portfolio will receive a payment from or make a payment to the counterparty.

Variance swaps involve a contract in which two parties agree to exchange cash flows based on the measured variance of a specified underlying security or index during a certain time period. On the trade date, the two parties agree on the strike price of the contract (the reference level against which cash flows are exchanged), as well as the number of units in the transaction and the length of the contract. Like an option contract, the value of a variance swap is influenced by both realized and implied volatility, as well as the passage of time. A Portfolio may enter into variance swaps to manage volatility risk.

The creditworthiness of firms with which a Portfolio enters into a swap agreement is monitored by IICO. If a firm's creditworthiness declines, the value of the agreement would likely decline, potentially resulting in losses. If a default occurs by the counterparty to such a transaction, the Portfolio will have contractual remedies pursuant to the agreement related to the transaction.

Option Contracts. Options purchased by a Portfolio are accounted for in the same manner as marketable portfolio securities. The cost of portfolio securities acquired through the exercise of call options is increased by the premium paid to purchase the call. The proceeds from securities sold through the exercise of put options are decreased by the premium paid to purchase the put.

When a Portfolio writes (sells) an option, an amount equal to the premium received by the Portfolio is recorded as a liability. The amount of the liability is subsequently adjusted to reflect the current market value of the option written. The current market value of an option is the last sales price on the principal exchange on which the option is traded or, in the absence of transactions, the mean between the bid and asked prices or at a value supplied by a broker-dealer. When an option expires on its stipulated expiration date or a Portfolio enters into a closing purchase transaction, the Portfolio realizes a gain (or loss if the cost of a closing purchase transaction exceeds the premium received when the call option was sold) and the liability related to such option is extinguished. When a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether a Portfolio has realized a gain or loss. For each Portfolio, when a written put is exercise d, the cost basis of the securities purchased by a Portfolio is reduced by the amount of the premium received.

Investments in options, whether purchased or written, involve certain risks.   Writing put options and purchasing call options may increase a Portfolio's exposure to the underlying security (or basket of securities). With written options, there may be times when a Portfolio will be required to purchase or sell securities to meet its obligation under the option contract where the required action is not beneficial to the Portfolio, due to unfavorable movement of the market price of the underlying security (or basket of securities).   Additionally, to the extent a Portfolio enters into over-the-counter (OTC) option transactions with counterparties, the Portfolio will be exposed to the risk that counterparties to these OTC transactions, for whatever reason, will be unable to meet their obligations under the terms of the transaction.

Objectives and Strategies

Asset Strategy. The Portfolio's objectives in using derivatives during the period included hedging market risk on equity securities, increasing exposure to various equity markets, managing exposure to various foreign currencies, managing exposure to precious metals, and hedging certain event risks on positions held by the Portfolio. To achieve the objective of hedging market risk and increasing exposure to equity markets, the Portfolio utilized futures and purchased option contracts, both short and long, on foreign and domestic equity indices. To manage foreign currency exposure, the Portfolio utilized forward contracts to either increase or decrease exposure to a given currency. To manage exposure to precious metals, the Portfolio utilized gold futures contracts. To manage event risks, the Portfolio utilized options, both written and purchased, on individual equity securities owned by the Portfolio.

Fair Values of Derivative Instruments as of June 30, 2009:

	Asset Derivatives			Liability Derivatives
Type of Derivative	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Equity	Investments in       unaffiliated securities	$	12,543	N/A		N/A
Foreign currency	Unrealized appreciation       on forward currency       contracts		1,090	Unrealized depreciation       on forward currency       contracts	$	1,504
Commodities	N/A		N/A	N/A		N/A
Total		$	13,633		$	1,504

The Effect of Derivative Instruments on the Statement of Operations for the Period Ended June 30, 2009:

Type of Derivative	Location of Gain (Loss) on       Derivatives Recognized in Income	Realized Gain (Loss) on Derivatives Recognized in Income				Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Equity	Net realized gain (loss) on investments in       unaffiliated securities and written options       and futures contracts/Net change in       unrealized appreciation (depreciation)       on investments in unaffiliated securities       and futures contracts		$	(7,200	)	$	(13,296	)
Foreign currency	Net realized gain (loss) on forward foreign       currency contracts/Net change in unrealized       appreciation (depreciation) on forward       foreign currency contracts			3,827			(5,042	)
Commodities	Net realized gain (loss) on futures contracts			1,533			N/A
Total			$	(1,840	)	$	(18,338	)

During the fiscal period ended June 30, 2009, the Portfolio's average market value outstanding for forward contracts and futures contracts were as follows: short forward contracts - $127,551, long forward contracts - $129,910, short futures contracts - $110,634, long futures contracts - $2,949. Additionally, the Portfolio's average number of purchased option contracts outstanding was 1.

Core Equity. The Portfolio's objective in using derivatives during the period was to hedge market risk for some or all of its existing equity security portfolio. To achieve this objective, the Portfolio utilized futures contracts on broad domestic equity market indices.

Fair Values of Derivative Instruments as of June 30, 2009:

	Asset Derivatives		Liability Derivatives
Type of Derivative	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value
Equity	N/A	N/A	N/A	N/A

The Effect of Derivative Instruments on the Statement of Operations for the Period Ended June 30, 2009:

Type of Derivative	Location of Gain (Loss) on Derivatives       Recognized in Income	Realized Gain (Loss) on Derivatives Recognized in Income			Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Equity	Net realized gain (loss) on futures contracts		$	2,751	N/A

During the fiscal period ended June 30, 2009, the Portfolio's average market value outstanding for short futures contracts was $2,834.

Global Natural Resources. The Portfolio's objectives in using derivatives during the period were to hedge market risk on equity securities, increase exposure to specific sectors or companies, and manage exposure to various foreign currencies. To achieve the objective of hedging market risk and increasing exposure to equity markets, the Portfolio utilized futures on equity indices and purchased and written option contracts on individual equity securities. To manage foreign currency exposure, the Portfolio utilized forward foreign currency contracts to either increase or decrease exposure to a given currency.

Fair Values of Derivative Instruments as of June 30, 2009:

	Asset Derivatives			Liability Derivatives
Type of Derivative	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Equity	Investments in       unaffiliated securities       and variation margin       receivable	$	3,953	N/A		N/A
Foreign currency	Unrealized appreciation       on forward currency       contracts		3	Unrealized depreciation       on forward currency       contracts	$	43
Total		$	3,956		$	43

The Effect of Derivative Instruments on the Statement of Operations for the Period Ended June 30, 2009:

Type of Derivative	Location of Gain (Loss) on Derivatives       Recognized in Income	Realized Gain (Loss) on Derivatives Recognized in Income				Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Equity	Net realized gain (loss) on investments in       unaffiliated securities and futures contracts/       Net change in unrealized appreciation       (depreciation) on investments in unaffiliated       securities and futures contracts		$	(709	)	$	(560	)
Foreign currency	Net realized gain (loss) on forward foreign       currency contracts/Net change in unrealized       appreciation (depreciation) on forward foreign       currency contracts			(262	)		54
Total			$	(971	)	$	(506	)

During the fiscal period ended June 30, 2009, the Portfolio's average market value outstanding for forward contracts and futures contracts were as follows: short forward contracts - $6,884, long forward contracts - $6,932, short futures contracts - $1,596. Additionally, the Portfolio's average number of purchased option contracts and written option contracts outstanding was less than 1.

International Growth. The Portfolio's objective in using derivatives during the period was to manage the exposure to various foreign currencies. To achieve this objective, the Portfolio utilized forward contracts to either increase or decrease exposure to a given currency.

Fair Values of Derivative Instruments as of June 30, 2009:

Type of Derivative	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value
Foreign currency	N/A	N/A	N/A	N/A

The Effect of Derivative Instruments on the Statement of Operations for the Period Ended June 30, 2009:

Type of Derivative	Location of Gain (Loss) on       Derivatives Recognized in Income	Realized Gain (Loss) on Derivatives Recognized in Income			Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Foreign currency	Net realized gain (loss) on forward       foreign currency contracts/Net change       in unrealized appreciation (depreciation)       on forward foreign currency contracts		$	(771)	$	(236	)

During the fiscal period ended June 30, 2009, the Portfolio's average market value outstanding for short forward contracts and long forward contracts was $1,738 and $1,745, respectively.

Mid Cap Growth. The Portfolio's objectives in using derivatives during the period were to both gain exposure to certain sectors and to hedge certain event risks on positions held by the Portfolio. To achieve these objectives, the Portfolio utilized options, both written and purchased, on either an index or on individual or baskets of equity securities.

Fair Values of Derivative Instruments as of June 30, 2009:

	Asset Derivatives				Liability Derivatives
Type of Derivative	Balance Sheet Location	Fair Value			Balance Sheet Location	Fair Value
Equity	Investments in      unaffiliated securities		$	115	Written options at      market value		$	139

The Effect of Derivative Instruments on the Statement of Operations for the Period Ended June 30, 2009:

Type of Derivative	Location of Gain (Loss) on Derivatives       Recognized in Income	Realized Gain (Loss) on Derivatives Recognized in Income			Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Equity	Net realized gain (loss) on investments in       unaffiliated securities and written       options/Net change in unrealized       appreciation (depreciation) on       investments in unaffiliated securities       and written options		$	741	$	(42	)

During the fiscal period ended June 30, 2009, the Portfolio's average number of purchased option contracts and written option contracts outstanding was 1 and 1, respectively.

Mortgage Securities. The Portfolio's objective in using derivatives during the period was to adjust the overall duration of the portfolio. To achieve this objective, the Portfolio primarily utilized Treasury futures contracts of varying lengths to either shorten or lengthen, as determined by the Portfolio's advisor, the duration of the Portfolio.

Fair Values of Derivative Instruments as of June 30, 2009:

	Asset Derivatives				Liability Derivatives
Type of Derivative	Balance Sheet Location	Fair Value			Balance Sheet Location	Fair Value
Interest rate	Variation margin receivable		$	2	N/A	N/A

The Effect of Derivative Instruments on the Statement of Operations for the Period Ended June 30, 2009:

Type of Derivative	Location of Gain (Loss) on Derivatives       Recognized in Income	Realized Gain (Loss) on Derivatives Recognized in Income			Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Interest rate	Net realized gain (loss) on futures contracts/       Net change in unrealized appreciation       (depreciation) on futures contracts		$	61	$	127

During the fiscal period ended June 30, 2009, the Portfolio's average market value outstanding for short futures contracts was $1,524.

Science and Technology. The Portfolio's objective in using derivatives during the period was to hedge market risk on securities in its portfolio. To achieve this objective, the Portfolio utilized options, both written and purchased, on individual equity securities owned by the Portfolio.

Fair Values of Derivative Instruments as of June 30, 2009:

	Asset Derivatives		Liability Derivatives
Type of Derivative	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value
Equity	N/A	N/A	N/A	N/A

The Effect of Derivative Instruments on the Statement of Operations for the Period Ended June 30, 2009:

Type of Derivative	Location of Gain (Loss) on       Derivatives Recognized in Income	Realized Gain (Loss) on Derivatives Recognized in Income				Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Equity	Net realized gain (loss) on investments in       unaffiliated securities and written options/       Net change in unrealized appreciation       (depreciation) on investments in       unaffiliated securities and written options		$	(2,266	)	$	(728	)

During the fiscal period ended June 30, 2009, the Portfolio's average number of purchased option contracts and written option contracts outstanding was 2 and 2, respectively.

Small Cap Value. The Portfolio's objective in using derivatives during the period was to gain exposure to certain market sectors that it cannot get through the purchase of equity securities. To achieve this objective, the Portfolio utilized options, both written and purchased, on an index in the sector it wishes to gain exposure to.

Fair Values of Derivative Instruments as of June 30, 2009:

	Asset Derivatives		Liability Derivatives
Type of Derivative	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value
Equity	N/A	N/A	N/A		N/A

The Effect of Derivative Instruments on the Statement of Operations for the Period Ended June 30, 2009:

Type of Derivative	Location of Gain (Loss) on Derivatives       Recognized in Income	Realized Gain (Loss) on Derivatives Recognized in Income			Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Equity	Net realized gain (loss) on       investments in unaffiliated       securities and written options		$	207		N/A

During the fiscal period ended June 30, 2009, the Portfolio's average number of purchased option contracts and written option contracts outstanding was less than 1.

Value. The Portfolio's objective in using derivatives during the period was to generate additional income from written option premiums. To achieve these objectives, the Portfolio had primarily written put and call options on equity securities the Portfolio owns.

Fair Values of Derivative Instruments as of June 30, 2009:

Type of Derivative	Balance Sheet Location	Fair Value	Balance Sheet Location	Fair Value
Equity	N/A	N/A	Written options at market value		$125

The Effect of Derivative Instruments on the Statement of Operations for the Period Ended June 30, 2009:

Type of Derivative	Location of Gain (Loss) on       Derivatives Recognized in Income	Realized Gain (Loss) on Derivatives Recognized in Income			Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income
Equity	Net realized gain (loss) on investments in       unaffiliated securities and written       options/Net change in unrealized       appreciation (depreciation) on       investments in unaffiliated securities       and written options		$	1,222	$	111

During the fiscal period ended June 30, 2009, the Portfolio's average number of written option contracts outstanding was 6.

8. COMMITMENT

In connection with Asset Strategy's investment in Vietnam Azalea Fund Limited (VAF), the Portfolio is contractually committed to provide additional capital of up to $1,018 if and when VAF requests such contributions or draw downs. The total commitment is limited to $3,000. At June 30, 2009, Asset Strategy had made a total contribution of $1,982. No public market currently exists for the shares of VAF nor are the shares listed on any securities exchange. VAF intends to become listed within one year after the final commitment has been drawn down.

9. AFFILIATED COMPANY TRANSACTIONS

A summary of the transactions in affiliated companies during the fiscal period ended June 30, 2009 follows:

	12-31-08 Share Balance		Purchases at Cost		Sales at Cost		Realized Gain/ (Loss)		Distributions Received(1)			6-30-09 Share Balance		6-30-09 Market Value
Pathfinder Aggressive
Ivy Funds VIP Bond		1,028	$	676		97	$	4		$	230		1,136		$	6,017
Ivy Funds VIP Dividend      Opportunities		1,159		736		136		15			66		1,284			6,578
Ivy Funds VIP Growth		891		1,012		155		17			254		1,008			7,911
Ivy Funds VIP      International Growth		692		569		101		11			78		776			4,834
Ivy Funds VIP      International Value		428		1,236		121		21			611		524			6,515
Ivy Funds VIP Mid      Cap Growth		444		223		43		8			––		486			2,561
Ivy Funds VIP Money      Market		5,465		481		101		––			35		5,844			5,844
Ivy Funds VIP Small      Cap Growth		200		140		26		5			6		220			1,536
Ivy Funds VIP Small      Cap Value		344		357		69		12			––		374			4,020
Ivy Funds VIP Value		697		381		62		9			68		780			3,223
										$	1,348				$	49,039
(1)Distributions received includes distributions from net investment income and/or from capital gains from the underlying funds.

	12-31-08 Share Balance		Purchases at Cost		Sales at Cost		Realized Gain/ (Loss)		Distributions Received(1)			6-30-09 Share Balance		6-30-09 Market Value
Pathfinder Conservative
Ivy Funds VIP Bond		702	$	6,253	$	258	$	7		$	342		1,822		$	9,648
Ivy Funds VIP Dividend      Opportunities		412		3,999		148		29			59		1,227			6,282
Ivy Funds VIP Growth		125		1,860		68		12			87		371			2,909
Ivy Funds VIP      International Value		43		1,138		35		9			153		140			1,740
Ivy Funds VIP Mid Cap      Growth		47		394		13		4			––		134			707
Ivy Funds VIP Money      Market		3,685		5,950		265		––			40		9,370			9,370
Ivy Funds VIP Small      Cap Growth		18		198		7		2			1		51			357
Ivy Funds VIP Small      Cap Value		11		197		7		2			––		31			331
Ivy Funds VIP Value		53		407		14		3			13		158			653
										$	695				$	31,997

	12-31-08 Share Balance		Purchases at Cost		Sales at Cost		Realized Gain/ (Loss)		Distributions Received(1)			6-30-09 Share Balance		6-30-09 Market Value
Pathfinder Moderate
Ivy Funds VIP Bond		3,327	$	16,295	$	68	$	3		$	1,064		6,378		$	33,779
Ivy Funds VIP Dividend      Opportunities		2,483		13,930		56		9			221		5,318			27,236
Ivy Funds VIP Growth		1,120		9,628		37		6			489		2,396			18,799
Ivy Funds VIP      International Growth		822		5,475		22		3			144		1,773			11,053
Ivy Funds VIP      International Value		452		7,099		23		6			1,006		1,052			13,070
Ivy Funds VIP Mid      Cap Growth		634		3,046		11		3			––		1,283			6,765
Ivy Funds VIP Money      Market		17,554		15,370		72		––			140		32,853			32,853
Ivy Funds VIP Small      Cap Growth		240		1,535		6		1			11		488			3,412
Ivy Funds VIP Small      Cap Value		297		3,046		11		3			––		600			6,442
Ivy Funds VIP Value		888		3,943		15		3			135		1,897			7,836
										$	3,210				$	161,245

	12-31-08 Share Balance		Purchases at Cost		Sales at Cost		Realized Gain/ (Loss)		Distributions Received(1)			6-30-09 Share Balance		6-30-09 Market Value
Pathfinder Moderately Aggressive
Ivy Funds VIP Bond		3,810	$	12,670	$	25	$	1		$	1,113		6,184	$	32,750
Ivy Funds VIP     Dividend Opportunities		3,712		14,166		29		3			298		6,602		33,816
Ivy Funds VIP Growth		1,676		9,906		19		2			660		2,990		23,460
Ivy Funds VIP     International Growth		1,558		7,181		14		1			246		2,812		17,527
Ivy Funds VIP     International Value		919		10,317		17		3			1,842		1,790		22,248
Ivy Funds VIP Mid     Cap Growth		1,185		3,852		7		1			––		2,011		10,598
Ivy Funds VIP     Money Market		20,157		11,706		26		––			150	31,837			31,837
Ivy Funds VIP Small     Cap Growth		536		2,335		4		1			23		915		6,403
Ivy Funds VIP Small     Cap Value		784		5,393		10		2			––		1,321		14,184
Ivy Funds VIP Value		1,325		4,034		8		1			181		2,357		9,734
										$	4,513			$	202,557

	12-31-08 Share Balance		Purchases at Cost		Sales at Cost		Realized Gain/ (Loss)			Distributions Received(1)			6-30-09 Share Balance		6-30-09 Market Value
Pathfinder Moderately Conservative
Ivy Funds VIP Bond		1,631	$	9,632	$	590	$	23			$	582		3,324		$	17,604
Ivy Funds VIP Dividend      Opportunities		1,022		6,617		438		4				101		2,291			11,736
Ivy Funds VIP Growth		422		4,187		265		5				204		945			7,416
Ivy Funds VIP      International Growth		244		1,857		120		3				47		550			3,426
Ivy Funds VIP       International Value		117		2,099		120		3				289		286			3,550
Ivy Funds VIP Mid      Cap Growth		261		1,448		95		4				––		553			2,917
Ivy Funds VIP Money      Market		8,603		9,123		614		––				74		17,112			17,112
Ivy Funds VIP Small       Cap Growth		49		365		23		1				3		105			736
Ivy Funds VIP Small       Cap Value		30		362		24		1				––		64			688
Ivy Funds VIP Value		364		1,871		123		––	*			62		815			3,366
											$	1,362				$	68,551
(1)Distributions received includes distributions from net investment income and/or from capital gains from the underlying funds.

	12-31-08 Share Balance		Purchases at Cost		Sales at Cost		Realized Gain/ (Loss)		Distributions Received		6-30-09 Share Balance		6-30-09 Market Value
Asset Strategy
Vietnam Azalea Fund      Limited(2)		300	$	242	$	––	$	––	$	––		300	$	1,122

	12-31-08 Share Balance		Purchases at Cost		Sales at Cost		Realized Gain/ (Loss)			Distributions Received		6-30-09 Share Balance		6-30-09 Market Value
Small Cap Growth
Argyle Security, Inc.(2)(3)		300	$	––	$	2,412	$	(2,341	)	$	––		N/A	$	N/A
*Not shown due to rounding.
(1)Distributions received includes distributions from net investment income and/or from capital gains from the underlying funds.
(2)No dividends were paid during the preceding 12 months.
(3)Company was no longer an affiliate at June 30, 2009.

10. SENIOR LOANS

A Portfolio invests in senior secured corporate loans either as an original lender or as a purchaser of a loan assignment or a participation interest in a loan.   Senior Loans are generally made to U.S. and foreign borrowers that are corporations, partnerships, or other business entities.   Senior Loans are generally readily marketable, but some loans may be illiquid or be subject to some restrictions on resale.  

Certain Senior Loans contain provisions that obligate a Portfolio to fund future commitments at the borrower's discretion. Funded portions of these commitments are presented in the Schedule of Investments while unfunded commitments are as follows:

Borrower	Unfunded Commitment			Value of Underlying Loan
High Income
Las Vegas Sands, LLC		$	291		$	234

11. WRITTEN OPTION ACTIVITY

For Asset Strategy, transactions in written call options were as follows:

	Number of Contracts			Premium Received
Outstanding at December 31, 2008		––			$	––
Options written		58,600				97
Options terminated in closing purchase transactions		––				––
Options exercised		––				––
Options expired		(58,600	)			(97	)
Outstanding at June 30, 2009		––			$	––

For Asset Strategy, transactions in written put options were as follows:

	Number of Contracts			Premium Received
Outstanding at December 31, 2008		––			$	––
Options written		2				290
Options terminated in closing purchase transactions		(2	)			(290	)
Options exercised		––				––
Options expired		––				––
Outstanding at June 30, 2009		––			$	––

For Mid Cap Growth, transactions in written call options were as follows:

	Number of Contracts			Premium Received
Outstanding at December 31, 2008		––			$	––
Options written		––	*			7
Options terminated in closing purchase transactions		––	*			(4	)
Options exercised		––	*			(3	)
Options expired		––				––
Outstanding at June 30, 2009		––			$	––
*Not shown due to rounding.

For Mid Cap Growth, transactions in written put options were as follows:

	Number of Contracts			Premium Received
Outstanding at December 31, 2008		––			$	––
Options written		4				493
Options terminated in closing purchase transactions		(2	)			(319	)
Options exercised		––				––
Options expired		––	*			(12	)
Outstanding at June 30, 2009		1			$	162
*Not shown due to rounding.

For Science and Technology, transactions in written call options were as follows:

	Number of Contracts			Premium Received
Outstanding at December 31, 2008		7			$	2,374
Options written		3				1,907
Options terminated in closing purchase transactions		(5	)			(2,561	)
Options exercised		(3	)			(884	)
Options expired		(2	)			(836	)
Outstanding at June 30, 2009		––			$	––

For Small Cap Value, transactions in written put options were as follows:

	Number of Contracts			Premium Received
Outstanding at December 31, 2008		––	*		$	884
Options written		––				––
Options terminated in closing purchase transactions		––	*			(884	)
Options exercised		––				––
Options expired		––				––
Outstanding at June 30, 2009		––			$	––

For Value, transactions in written call options were as follows:

	Number of Contracts			Premium Received
Outstanding at December 31, 2008		5			$	646
Options written		23				1,485
Options terminated in closing purchase transactions		(13	)			(1,098	)
Options exercised		(1	)			(316	)
Options expired		(9	)			(547	)
Outstanding at June 30, 2009		5			$	170

For Value, transactions in written put options were as follows:

	Number of Contracts			Premium Received
Outstanding at December 31, 2008		––	*		$	39
Options written		6				339
Options terminated in closing purchase transactions		––				––
Options exercised		––	*			(39	)
Options expired		(1	)			(88	)
Outstanding at June 30, 2009		5			$	251
*Not shown due to rounding.

12. CHANGE IN STRUCTURE

On April 3, 2009, a special shareholder meeting for the Corporation was held to approve an Agreement and Plan of Reorganization and Termination, pursuant to which each Portfolio would be reorganized into a corresponding series of a newly established Delaware statutory trust. On April 30, 2009, that reorganization took place. See pages 135 and 136 for the shareholder meeting results.

13. REGULATORY AND LITIGATION MATTERS

On July 24, 2006, WRIMCO, W&R and WRSCO (collectively, Waddell & Reed) reached a settlement with each of the SEC, the New York Attorney General (NYAG) and the Securities Commissioner of the State of Kansas to resolve proceedings brought by each regulator in connection with its investigation of frequent trading and market timing in certain Waddell & Reed Advisors Funds.

Under the terms of the SEC's cease-and desist order (SEC Order), pursuant to which Waddell & Reed neither admitted nor denied any of the findings contained therein, among other provisions Waddell & Reed has agreed to: pay $40 million in disgorgement and $10 million in civil money penalties; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; maintain certain compliance and ethics oversight structures; retain an independent consultant to periodically review Waddell & Reed's supervisory, compliance, control and other policies and procedures; and retain an independent distribution consultant (described below). According to the SEC Order, the SEC found that some market timers made profits in some of the Waddell & Reed Advisors Funds, and that this may have caused some dilution in those Funds. Also, the SEC found that Waddell & Reed failed to make certain disclosures to the Waddell & Reed Advisors Funds' Boards of Direct ors (now Trustees) and shareholders regarding the market timing activity and Waddell & Reed's acceptance of service fees from some market timers.

The Assurance of Discontinuance with the NYAG (NYAG Settlement), pursuant to which Waddell & Reed neither admitted nor denied any of the findings contained therein, among its conditions requires that Waddell & Reed: reduce the aggregate investment management fees paid by certain of the Waddell & Reed Advisors Funds and certain of the Ivy Funds Variable Insurance Portfolios (the Funds) by $5 million per year for five years, for a projected total of $25 million in investment management fee reductions; bear the costs of an independent fee consultant to be retained by the Funds to review and consult regarding the Funds' investment management fee arrangements; and make additional investment management fee-related disclosures to Fund shareholders. The NYAG Settlement also effectively requires that the Funds implement certain governance measures designed to maintain the independence of the Funds' Boards of Directors (now Trustees) and appoint an independent compliance consultant responsible for monitori ng the Funds' and WRIMCO's compliance with applicable laws.

The consent order issued by the Securities Commissioner of the State of Kansas (Kansas Order), pursuant to which Waddell & Reed neither admitted nor denied any of the findings contained therein, requires Waddell & Reed to pay a fine of $2 million to the Office of the Commissioner.

The SEC Order further requires that the $50 million in settlement amounts described above will be distributed in accordance with a distribution plan developed by an independent distribution consultant, in consultation with Waddell & Reed, and that is agreed to by the SEC staff and the Funds' Disinterested Directors. The SEC Order requires that the independent distribution consultant develop a methodology and distribution plan pursuant to which Fund shareholders shall receive their proportionate share of losses, if any, suffered by the Funds due to market timing. Therefore, it is not currently possible to specify which particular Fund shareholders or groups of Fund shareholders will receive distributions of those settlement monies or in what proportion and amounts. However, as noted above, the SEC Order makes certain findings with respect to market timing activities in some of the Waddell & Reed Advisors Funds only. Accordingly, it is not expected that shareholders of Ivy Funds Variable Insurance Port folios will receive distributions of settlement monies.

The foregoing is only a summary of the SEC Order, NYAG Settlement and Kansas Order. A copy of the SEC Order is available on the SEC's website at www.sec.gov. A copy of the SEC Order, NYAG Settlement and Kansas Order is available as part of the Waddell & Reed Financial, Inc. Form 8-K as filed on July 24, 2006.

In addition, pursuant to the terms of agreement in the dismissal of separate litigation, Waddell & Reed has also agreed to extend the reduction in the aggregate investment management fees paid by the Funds, as described above, for an additional five years.

APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT

Ivy Funds VIP

Ivy Funds Variable Insurance Portfolios (Trust) is a series fund organized as a Delaware statutory trust. Each of its series is the successor to a series of a Maryland corporation (each, a Predecessor Fund) pursuant to reorganizations that occurred on April 30, 2009 (each, a Reorganization). Each Reorganization of a Predecessor Fund was approved by its shareholders and by its board of directors.

In anticipation of the Reorganizations, at its meeting on February 4, 2009, the Trust's Board of Trustees, including all of the Disinterested Trustees, considered and approved a new Investment Management Agreement (Management Agreement) between WRIMCO and the Trust with respect to each of Ivy Funds VIP Pathfinder Aggressive, Ivy Funds VIP Pathfinder Conservative, Ivy Funds VIP Pathfinder Moderate, Ivy Funds VIP Pathfinder Moderately Aggressive, Ivy Funds VIP Pathfinder Moderately Conservative, Ivy Funds VIP Asset Strategy, Ivy Funds VIP Balanced, Ivy Funds VIP Bond, Ivy Funds VIP Core Equity, Ivy Funds VIP Dividend Opportunities, Ivy Funds VIP Energy, Ivy Funds VIP Global Natural Resources, Ivy Funds VIP Growth, Ivy Funds VIP High Income, Ivy Funds VIP International Growth, Ivy Funds VIP International Value, Ivy Funds VIP Micro Cap Growth, Ivy Funds VIP Mid Cap Growth, Ivy Funds VIP Money Market, Ivy Funds VIP Mortgage Securities, Ivy Funds VIP Real Estate Securities, Ivy Funds VIP Science and Technology, Iv y Funds VIP Small Cap Growth, Ivy Funds VIP Small Cap Value and Ivy Funds VIP Value (each, a Fund). The Management Agreement will continue for a period of one year and from year-to-year thereafter only if such continuance is specifically approved at least annually by the Board of Trustees, including the vote of a majority of the Disinterested Trustees. The Management Agreement with respect to each Fund is substantially the same as the Investment Management Agreement with WRIMCO previously in effect with respect to each corresponding Predecessor Fund (Predecessor Management Agreement). At its meeting on February 4, 2009, the Trust's Board of Trustees, whose members were the same as the board of directors of each Predecessor Fund, based its consideration and approval of the Management Agreement with respect to each Fund on (i) the information provided to the boards of directors of the Predecessor Funds in connection with these boards' approvals, at their joint meetings on August 11, 12 and 13, 2008, of the con tinuance of their respective Predecessor Management Agreements and (ii) the information which these boards received subsequent to the August meetings. For further information about the renewal of a Predecessor Management Agreement for the Predecessor Fund, please see the Predecessor Fund's Annual Report to Shareholders dated December 31, 2008.

A copy of each Predecessor Fund's Annual Report may be obtained, without charge, from the Trust or Waddell & Reed, Inc. by calling 1.888.WADDELL or at www.waddell.com.

SHAREHOLDER MEETING RESULTS

Ivy Funds VIP

On April 3, 2009, a special shareholder meeting (Meeting) for Ivy Funds Variable Insurance Portfolios, Inc. was held at the offices of Waddell & Reed Financial, Inc., 6300 Lamar Avenue, Overland Park, Kansas, 66202. The Meeting was held for the following purpose (and with the following results):

Proposal 1: To elect thirteen Directors for Ivy Funds Variable Insurance Portfolios, Inc.

Michael L. Avery
	For	Against
	925,647,758.812	27,758,492.341
Jarold W. Boettcher
	For	Against
	924,732,116.405	28,674,134.748
James M. Concannon
	For	Against
	926,287,736.225	27,118,514.928
John A. Dillingham
	For	Against
	924,647,373.299	28,758,877.854
David P. Gardner
	For	Against
	924,771,691.042	28,634,560.111
Joseph Harroz, Jr.
	For	Against
	925,119,859.619	28,286,391.534
John F. Hayes
	For	Against
	922,642,942.269	30,763,308.884
Robert L. Hechler
	For	Against
	921,145,790.772	32,260,460.381
Albert W. Herman
	For	Against
	925,314,102.864	28,092,148.289
Henry J. Herrmann
	For	Against
	925,339,433.240	28,066,817.913
Glendon E. Johnson, Sr.
	For	Against
	922,653,850.704	30,752,400.449
Frank J. Ross, Jr.
	For	Against
	926,249,484.992	27,156,766.161
Eleanor B. Schwartz
	For	Against
	924,772,061.908	28,634,189.245

Proposal 2: To approve for each Portfolio a proposed Agreement and Plan of Reorganization and Termination, pursuant to which the Portfolio would be reorganized into a corresponding series of a newly established Delaware statutory trust, to be named Ivy Funds Variable Insurance Portfolios.

Portfolio	For	Against	Abstain
Pathfinder Aggressive	10,718,178.484	410,369.051	204,765.155
Pathfinder Conservative	3,221,932.505	0	28,578.974
Pathfinder Moderate	20,521,761.859	69,879.600	1,205,270.583
Pathfinder Moderately Aggressive	29,840,666.381	764,038.626	1,202,553.806
Pathfinder Moderately Conservative	8,759,541.265	10,704.143	102,202.604
Asset Strategy	77,130,883.719	2,409,546.694	1,982,099.114
Balanced	44,301,022.507	1,753,758.648	2,201,116.313
Bond	59,730,097.619	1,417,999.809	1,850,632.714
Core Equity	45,867,796.044	1,636,620.802	1,153,721.848
Dividend Opportunities	24,227,416.205	543,359.194	325,968.538
Energy	5,171,557.684	162,312.611	63,595.090
Global Natural Resources	20,568,685.874	457,944.384	861,256.435
Growth	90,652,449.782	4,127,006.244	3,349,089.085
High Income	56,251,749.290	1,682,138.208	1,932,691.880
International Growth	25,249,721.428	698,217.888	507,345.858
International Value	28,303,305.227	1,260,011.030	1,018,717.450
Micro Cap Growth	2,242,827.095	179,826.266	98,484.782
Mid Cap Growth	10,341,814.532	358,224.448	343,071.393
Money Market	195,458,987.289	3,872,234.576	5,376,851.735
Mortgage Securities	5,625,311.450	120,099.078	296,707.754
Real Estate Securities	6,300,285.860	182,005.179	106,306.505
Science and Technology	18,049,768.467	891,056.261	493,603.396
Small Cap Growth	43,748,087.845	1,858,141.718	1,384,428.327
Small Cap Value	13,491,695.577	752,304.521	450,675.684
Value	51,941,389.563	2,455,182.544	1,076,628.056

Proposal 3: To authorize a "manager of managers" structure for each of the following Portfolios whereby Waddell & Reed Investment Management Company, with the approval of the Board, will be able to make changes to the unaffiliated sub-advisor(s) to the Portfolio(s) and materially amend investment sub-advisory agreement(s) related to the Portfolio without obtaining shareholder approval.

Portfolio	For	Against	Abstain
Global Natural Resources	20,262,010.482	801,695.424	824,180.787
International Value	27,426,264.542	2,167,620.155	988,149.010
Micro Cap Growth	2,252,406.124	188,045.220	80,686.799
Mortgage Securities	5,576,329.971	182,611.608	283,176.703
Real Estate Securities	6,204,715.445	188,836.675	195,045.424

PROXY VOTING INFORMATION

Ivy Funds VIP

Proxy Voting Guidelines

A description of the policies and procedures Ivy Funds Variable Insurance Portfolios uses to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling 1.888.WADDELL and (ii) on the Securities and Exchange Commission's (SEC) website at www.sec.gov.

Proxy Voting Records

Information regarding how the Portfolio voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on Form N-PX through Waddell & Reed's website at www.waddell.com and on the SEC's website at www.sec.gov.

QUARTERLY PORTFOLIO SCHEDULE INFORMATION

Ivy Funds VIP

A complete schedule of portfolio holdings for the first and third quarters of each fiscal year is filed with the Securities and Exchange Commission (SEC) on the Trust's Form N-Q. This form may be obtained in the following ways:

• On the SEC's website at www.sec.gov.
• For review and copy at the SEC's Public Reference Room in Washington, DC. Information on the operations of the Public Reference Room may be obtained by calling 1.800.SEC.0330.
• On Waddell & Reed's website at www.waddell.com.

The Ivy Funds Variable Insurance Portfolios Family

Global/International Portfolios
     International Growth
     International Value

Domestic Equity Portfolios
     Core Equity
     Dividend Opportunities
     Growth
     Micro Cap Growth
     Mid Cap Growth
     Small Cap Growth
     Small Cap Value
     Value

Fixed Income Portfolios
     Bond
     High Income
     Mortgage Securities

Money Market Portfolios
     Money Market

Specialty Portfolios
     Asset Strategy
     Balanced
     Energy
     Global Natural Resources
     Pathfinder Aggressive
     Pathfinder Conservative
     Pathfinder Moderate
     Pathfinder Moderately Aggressive
     Pathfinder Moderately Conservative
     Real Estate Securities
     Science and Technology

The underlying portfolios discussed in this report are only available as investment options in variable annuity and variable life insurance contracts issued by life insurance companies. They are not offered or made available directly to the general public.

This report is submitted for the general information of the shareholders of Ivy Funds Variable Insurance Portfolios. It is not authorized for distribution to prospective investors in a Portfolio unless accompanied with or preceded by the current Portfolio prospectus as well as the variable product prospectus.

SEMIANN-IVYVIP (6-09)

ITEM 2. CODE OF ETHICS.
Required in annual report only.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Required in annual report only.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Required in annual report only.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
See Item 1 Shareholder Report.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant's board of trustees.
ITEM 11. CONTROLS AND PROCEDURES.
(a)	The Registrant's Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, have concluded that such controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective and adequately designed to ensure that information required to be disclosed by the Registrant in its reports that it files or submits is accumulated and communicated to the Registrant's management, including the Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
(b)	There were no significant changes in the registrant's internal controls over financial reporting that occurred over the Registrant's second fiscal quarter of the period covered by this report that has affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(2)	A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)).
Attached hereto as Exhibit 99.CERT.
(b)	A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)).
Attached hereto as Exhibit 99.906CERT.

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
IVY FUNDS VARIABLE INSURANCE PORTFOLIOS
(Registrant)
By	/s/Mara D. Herrington
	Mara D. Herrington, Vice President and Secretary
Date: September 3, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By	/s/Henry J. Herrmann
	Henry J. Herrmann, Principal Executive Officer
Date: September 3, 2009
By	/s/Joseph W. Kauten
	Joseph W. Kauten, Principal Financial Officer
Date: September 3, 2009

EX-99.CERT

EXHIBIT 99.CERT

CERTIFICATION

I, Henry J. Herrmann, certify that:

1.     I have reviewed this report on Form N-CSR of Ivy Funds Variable Insurance Portfolios;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4.     The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

     a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that the material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     b)     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     c)     Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

     d)     Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.     The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing equivalent functions):

     a)     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

     b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: September 3, 2009	/s/Henry J. Herrmann
	Henry J. Herrmann, Principal Executive Officer

CERTIFICATION

I, Joseph W. Kauten, certify that:

1.     I have reviewed this report on Form N-CSR of Ivy Funds Variable Insurance Portfolios;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4.     The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

     a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that the material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     b)     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     c)     Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

     d)     Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.     The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing equivalent functions):

     a)     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

     b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: September 3, 2009	/s/Joseph W. Kauten
	Joseph W. Kauten, Principal Financial Officer

EX-99.906CERT

EXHIBIT 99.906 CERT

CERTIFICATION UNDER SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

Henry J. Herrmann, Principal Executive Officer, and Joseph W. Kauten, Principal Financial Officer of Ivy Funds Variable Insurance Portfolios (the "Registrant"), each certify to the best of his knowledge that:

     1.     The Registrant's periodic report on Form N-CSR for the period covered by the report (the "Form N-CSR") fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended; and

     2.     The information contained in the Form N-CSR fairly represents, in all material respects, the financial condition and results of operation of the Registrant.

This certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document. A signed original of this written statement required by 18 U.S.C. Section 1350 has been provided to the Registrant and will be retained and furnished to the U.S. Securities and Exchange Commission or its staff upon request.

By	/s/Henry J. Herrmann
	Henry J. Herrmann, Principal Executive Officer
Date: September 3, 2009
By	/s/Joseph W. Kauten
	Joseph W. Kauten, Principal Financial Officer
Date: September 3, 2009