EX-5 6 wad_n31704fidbndsep09v2.htm ALLOCATION AGREEMENT

FIDELITY BOND INSURANCE ALLOCATION AGREEMENT

This Agreement dated May 24, 2006 and amended on January 30, 2009, and
further amended on April 30, 2009, is entered into by and among Waddell & Reed
Advisors Funds, Ivy Funds Variable Insurance Portfolios, Waddell & Reed InvestEd
Portfolios, Ivy Funds, Inc. and Ivy Funds (each of such parties being referred to
individually as a "Fund" and collectively as the "Funds"), each an investment
company registered under the Investment Company Act of 1940, as amended ("1940
Act"), and Waddell & Reed, Inc., Waddell & Reed Investment Management Company,
Waddell & Reed Services Company, Ivy Funds Distributor, Inc., Ivy Investment
Management Company and Austin, Calvert & Flavin, Inc. (each of such parties being
referred to individually as a "Covered Affiliate" and collectively as the "Covered
Affiliates") (each Fund or Covered Affiliate referred to individually as a "Party"
and collectively as the "Parties").

In order to obtain joint-insureds fidelity bond insurance under an
insurance policy (the "Policy") on favorable terms, and in consideration of the
mutual agreements set forth below, the Parties agree as follows:

1. The Policy. The Parties agree to secure and maintain a Policy to
insure each Party and its respective portfolios.

2. Primary Coverage. Each Fund shall have "Primary Coverage"
(i.e., minimum insured coverage) under the Policy in an amount that is in accordance
with Rule 17g-1(d)(1) under the 1940 Act. Each Covered Affiliate shall have Primary
Coverage as required by applicable federal statutes and regulations had it not been
named as an insured under this Policy. Each Party shall promptly take action to
increase its Primary Coverage amount, which shall therefore increase the total amount
(i.e., limit of liability) of the Policy, whenever required to comply with applicable
federal statutes and regulations, including but not limited to Rule 17g-1 under the
1940 Act.

3. Definitions. As used in this Agreement, the following terms have
the following meanings:

(a) "Agent" means in the case of the Waddell & Reed Advisors Funds,
Waddell & Reed Investment Management Company or, in the case of the Ivy Funds,
Ivy Investment Management Company, or its successor, acting as agent for the
Parties.

(b) "Commission" means the U.S. Securities and Exchange Commission.

(d) "Insured Loss" means a loss (including all related expenses) of
an Insured that is covered under the Policy (including any endorsement thereof)
or that would be so covered but for the exhaustion of the applicable limit of
liability and any applicable deductible).

(e) "Policy Period" means the period from the initial effective date
of the Policy through the next succeeding anniversary date or the period from
any anniversary date subsequent to the initial effective date through the next
succeeding anniversary date (or any modification of such period as may be
agreed to by the Parties and the insurer).

4. Allocation of Premiums. The fidelity bond premium shall first be
allocated between the Funds and the Covered Affiliates based upon the total assets of
the Funds and the other accounts managed by a Covered Affiliate. Then, the amount of
the premium so allocated to the Funds as a group shall be allocated among the Funds
based upon the average of (a) each Fund's percentage of total Fund assets, and (b) the
amount of the Primary Coverage required for each Fund as a percentage of the total
amount of the Primary Coverage required for all Funds. In the event that the amount
of the premium to be allocated to a Fund pursuant to the preceding sentence for any
Policy Period exceeds the cost to the Fund of a single-insured policy providing
Primary Coverage, the allocation of the Fund's premium shall be modified to ensure
that the amount allocated to that Fund does not exceed its singled-insured policy
premium. This shall be accomplished by allocating among the other Funds the amount of
the Fund's allocated premium that exceeds the amount of the Fund's single-insured
policy premium. If necessary, this process shall be repeated.

5. Allocation of Coverages. Proceeds paid under the Policy shall be
allocated so that each Insured receives an equitable and proportionate share of the
recovery and shall be specifically allocated among the Insureds as follows:

(a) Coverage Sufficient for All Insured Losses. If the aggregate
Insured Losses of all Insureds relating to claims relating to a particular
Policy Period are covered by proceeds of the Policy for that Policy Period,
such proceeds shall be allocated among the Insureds according to their
respective Insured Losses.

(b) Allocation of Insufficient Coverage. If the aggregate Insured
Losses of all Parties relating to claims relating to a particular Policy Period
exceed the aggregate proceeds of the Policy for Insured Losses for that Policy
Period, such proceeds shall be first allocated among the Insureds who sustained
such losses in proportion to their respective Primary Coverages; and if, after
such initial allocation, there are remaining proceeds for Insured Losses
relating to that Policy Period, such remaining proceeds shall be further
allocated among such Insureds whose Insured Losses have not yet been paid in
proportion to such respective Primary Coverages of those Insureds (repeating
this further allocation procedure until all of such proceeds have been
allocated).

(c) Reallocation. If all Insured Losses relating to a Policy Period
under the Policy are not paid at the same time, the Insureds who claim such
Insured Losses for that Policy Period shall make such provisions as they deem
suitable to the particular circumstances (taking into account the size of any
payments received, the size, nature and expected result of any remaining
claims, and all other relevant factors) to permit a later reallocation of
amounts first paid in accordance with this section 5.

6. Notices. Each Party agrees promptly to give to the Insurer all
notices required under the Policy.

7. Agent. The Agent hereby is appointed as the agent for the Parties
for the purposes of seeking, negotiating and obtaining the Policy and of making,
adjusting, receiving and enforcing payment of all claims under the Policy and
otherwise dealing with the insurer with respect to the Policy. All expenses incurred
by the Agent in its capacity as agent for claims shall be shared by the Insured on
whose behalf the expenses were incurred in proportion to their Insured Losses.

8. Notification of Agent. Each Party shall promptly notify the
Agent in writing of any circumstance that may give rise to a claim by such Party under
the Policy.

9. Filing with the Commission. Each Party, as required by Rule
17g-1 under the 1940 Act, shall file a copy of this Agreement and any amendment hereto
with the Commission.

10. Modification and Termination. This Agreement may be modified or
amended from time to time by mutual written agreement among the Parties. Additional
Parties may become subject to this Agreement if the Insurer is willing to add the
additional Party and the amount of the coverage is increased not less than the amount
which would have been required for the additional Party under applicable federal
statutes and regulations, including but not limited to Rule 17g-1 under the 1940 Act.

This Agreement shall terminate with respect to any Insured as of the
date such Insured ceases to be an Insured under the Policy; provided that such
termination shall not affect that Insured's rights and obligations hereunder with
respect to any claims or Insured Losses relating to a period when that Insured was
insured under the Policy. This Agreement may be terminated by either Party by written
notice to the other Party given not less than 60 days prior to the date specified for
termination.

11. Board Approval. The Board of Directors/Trustees of each Fund
(including a majority of the members of the board who are not "interested persons"
of the Fund as defined in the 1940 Act) has approved the portion of the premium to be
paid by each Fund.

12. Prior Agreements. This Agreement shall supersede any prior
agreement among the Parties relating to the allocation of premiums and coverages under
any joint-insured policy bond providing fidelity coverage, and any such agreement is
hereby terminated.

13. Further Assurances. Each Party agrees to perform such further
acts and execute such further documents as are necessary to effect the purposes
hereof.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed on the 30th day of April 2009.

WADDELL & REED ADVISORS FUNDS
IVY FUNDS VARIABLE INSURANCE PORTFOLIOS
WADDELL & REED INVESTED PORTFOLIOS
IVY FUNDS, INC.
IVY FUNDS

By:
/s/ Mara D. Herrington
Mara D. Herrington, Vice President

WADDELL & REED, INC.
WADDELL & REED INVESTMENT MANAGEMENT COMPANY
WADDELL & REED SERVICES COMPANY
IVY FUNDS DISTRIBUTOR, INC.
IVY INVESTMENT MANAGEMENT COMPANY
AUSTIN, CALVERT & FLAVIN, INC.

By:
/s/ Wendy J. Hills
Wendy J. Hills, Secretary