THE SECURITIES ACT OF 1933 | ☒ |
Post-Effective Amendment No. 80 | ☒ |
THE INVESTMENT COMPANY ACT OF 1940 | ☒ |
Amendment No. 80 | ☒ |
6300 Lamar Avenue, Overland Park, Kansas | 66202-4200 |
(Address of Principal Executive Office) | (Zip Code) |
□ | immediately upon filing pursuant to paragraph (b) |
☒ | on April 30, 2020 pursuant to paragraph (b) |
□ | 60 days after filing pursuant to paragraph (a)(1) |
□ | on (date) pursuant to paragraph (a)(1) |
□ | 75 days after filing pursuant to paragraph (a)(2) |
□ | on (date) pursuant to paragraph (a)(2) of Rule 485 |
□ | this post-effective amendment designates a new effective date for a previously filed post-effective amendment |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.70% |
Distribution and Service (12b-1) Fees | 0.25% |
Other Expenses | 0.05% |
Total Annual Portfolio Operating Expenses | 1.00% |
Fee Waiver and/or Expense Reimbursement1 | 0.05% |
Total Annual Portfolio Operating Expenses After Fee Waiver and/or Expense Reimbursement | 0.95% |
1 | Through April 30, 2021, Ivy Investment Management Company (IICO), the Portfolio’s investment manager, Ivy Distributors, Inc. (IDI), the Portfolio’s distributor, and/or Waddell & Reed Services Company, doing business as WI Services Company (WISC), the Portfolio’s transfer agent, have contractually agreed to reimburse sufficient management fees, 12b-1 fees and/or shareholder servicing fees to cap the total annual ordinary portfolio operating expenses (which would exclude interest, taxes, brokerage commissions, acquired fund fees and expenses and extraordinary expenses, if any) for Class II shares at 0.95%. Prior to that date, the expense limitation may not be terminated without the consent of the Board of Trustees. |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $97 | $313 | $548 | $1,220 |
4 Prospectus | Domestic Equity Portfolios |
■ | Catalyst Risk. Investing in companies in anticipation of a catalyst carries the risk that certain of such catalysts may not happen or the market may react differently than expected to such catalysts, in which case the Portfolio may experience losses. |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the company’s operations, products or services in those foreign markets. As a result, a company’s domicile and/or the markets in which the company’s securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the company’s products or services are sold. |
■ | Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may be more volatile or not perform as well as value stocks or the stock market in general. |
Domestic
Equity Portfolios |
Prospectus 5 |
■ | Holdings Risk. The Portfolio typically holds a limited number of stocks (generally 40 to 50). As a result, the appreciation or depreciation of any one security held by the Portfolio may have a greater impact on the Portfolio’s NAV than it would if the Portfolio invested in a larger number of securities. |
■ | Information Technology Sector Risk. Investment risks associated with investing in the information technology sector, in addition to other risks, include the intense competition to which information technology companies may be subject; the dramatic and often unpredictable changes in growth rates and competition for qualified personnel among information technology companies; effects on profitability from being heavily dependent on patent and intellectual property rights and the loss or impairment of those rights; obsolescence of existing technology; general economic conditions; and government regulation. |
■ | Large Company Risk. Large-capitalization companies may go in and out of favor based on market and economic conditions. Large-capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large-capitalization companies could trail the returns on investments in securities of smaller companies. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Sector Risk. At times, the Portfolio may have a significant portion of its assets invested in securities of companies conducting business in a broadly related group of industries within an economic sector. Individual sectors may be more volatile, and may perform differently, than the broader market. Companies in the same economic sector may be similarly affected by economic or market events, making the Portfolio more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly. |
■ | Theme Risk. Because the Portfolio’s investment strategy incorporates the identification of themes, the Portfolio’s performance may suffer if IICO does not correctly identify such themes or if a theme develops in an unanticipated way. |
■ | Value Stock Risk. Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor and, in the opinion of IICO, undervalued. The value of a security believed by IICO to be undervalued may never reach what is believed to be its full value; such security’s value may decrease or such security may be appropriately priced. |
6 Prospectus | Domestic Equity Portfolios |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10 Years |
Class II | 31.09% | 9.26% | 12.76% |
Indexes | |||
S&P 500 Index (reflects no deduction for fees, expenses or taxes) | 31.49% | 11.70% | 13.56% |
Morningstar Large Growth Category Average (net of fees and expenses) | 31.90% | 12.10% | 13.40% |
Domestic
Equity Portfolios |
Prospectus 7 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.70% |
Distribution and Service (12b-1) Fees | 0.25% |
Other Expenses | 0.05% |
Total Annual Portfolio Operating Expenses | 1.00% |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $102 | $318 | $552 | $1,225 |
8 Prospectus | Domestic Equity Portfolios |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the company’s operations, products or services in those foreign markets. As a result, a company’s domicile and/or the markets in which the company’s securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the company’s products or services are sold. |
■ | Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may be more volatile or not perform as well as value stocks or the stock market in general. |
■ | Holdings Risk. The Portfolio typically holds a limited number of stocks (generally 40 to 60). As a result, the appreciation or depreciation of any one security held by the Portfolio may have a greater impact on the Portfolio’s NAV than it would if the Portfolio invested in a larger number of securities. |
■ | Information Technology Sector Risk. Investment risks associated with investing in the information technology sector, in addition to other risks, include the intense competition to which information technology companies may be subject; the dramatic and often unpredictable changes in growth rates and competition for qualified personnel among information technology companies; effects on profitability from being heavily dependent on patent and intellectual property rights and the loss or impairment of those rights; obsolescence of existing technology; general economic conditions; and government regulation. |
■ | Large Company Risk. Large-capitalization companies may go in and out of favor based on market and economic conditions. Large-capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large-capitalization companies could trail the returns on investments in securities of smaller companies. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
Domestic
Equity Portfolios |
Prospectus 9 |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Sector Risk. At times, the Portfolio may have a significant portion of its assets invested in securities of companies conducting business in a broadly related group of industries within an economic sector. Individual sectors may be more volatile, and may perform differently, than the broader market. Companies in the same economic sector may be similarly affected by economic or market events, making the Portfolio more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly. |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10 Years |
Class II | 36.59% | 14.41% | 14.51% |
Indexes | |||
Russell 1000 Growth Index (reflects no deduction for fees, expenses or taxes) | 36.39% | 14.63% | 15.22% |
Morningstar Large Growth Category Average (net of fees and expenses) | 31.90% | 12.10% | 13.40% |
10 Prospectus | Domestic Equity Portfolios |
Domestic
Equity Portfolios |
Prospectus 11 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | ||
(expenses that you pay each year as a % of the value of your investment) | Class I | Class II |
Management Fees | 0.85% | 0.85% |
Distribution and Service (12b-1) Fees | 0.00% | 0.25% |
Other Expenses | 0.05% | 0.05% |
Total Annual Portfolio Operating Expenses | 0.90% | 1.15% |
Fee Waiver and/or Expense Reimbursement1,2 | 0.05% | 0.05% |
Total Annual Portfolio Operating Expenses After Fee Waiver and/or Expense Reimbursement | 0.85% | 1.10% |
1 | Through April 30, 2021, Ivy Investment Management Company (IICO), the Portfolio’s investment manager, Ivy Distributors, Inc. (IDI), the Portfolio’s distributor, and/or Waddell & Reed Services Company, doing business as WI Services Company (WISC), the Portfolio’s transfer agent, have contractually agreed to reimburse sufficient management fees, Rule 12b-1 fees (Class II only) and/or shareholder servicing fees to cap the total annual ordinary portfolio operating expenses (which would exclude interest, taxes, brokerage commissions, acquired fund fees and expenses and extraordinary expenses, if any) as follows: Class I Shares at 0.85% and Class II Shares at 1.10%. Prior to that date, the expense limitation may not be terminated without the consent of the Board of Trustees (Board). |
2 | Through April 30, 2021, IDI and/or WISC have contractually agreed to reimburse sufficient fees to ensure that the total annual ordinary portfolio operating expenses (which would exclude interest, taxes, brokerage commissions, acquired fund fees and expenses and extraordinary expenses, if any) of the Class I Shares are at all times equal to the total annual ordinary portfolio operating expenses of the Class II shares less 0.25%, as calculated at the end of each month. Prior to that date, the expense limitation may not be terminated without the consent of the Board. |
1 Year | 3 Years | 5 Years | 10 Years | |
Class I | $ 87 | $ 282 | $ 494 | $ 1,103 |
Class II | 112 | 360 | 628 | 1,393 |
12 Prospectus | Domestic Equity Portfolios |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may be more volatile or not perform as well as value stocks or the stock market in general. |
■ | Information Technology Sector Risk. Investment risks associated with investing in the information technology sector, in addition to other risks, include the intense competition to which information technology companies may be subject; the dramatic and often unpredictable changes in growth rates and competition for qualified personnel among information technology companies; effects on profitability from being heavily dependent on patent and intellectual property rights and the loss or impairment of those rights; obsolescence of existing technology; general economic conditions; and government regulation. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Mid-Size Company Risk. Securities of mid-capitalization companies may be more vulnerable to adverse developments than those of larger companies due to such companies’ limited product lines, limited markets and |
Domestic
Equity Portfolios |
Prospectus 13 |
financial resources and dependence upon a relatively small management group. Securities of mid-capitalization companies may be more volatile and less liquid than the securities of larger companies, and may be affected to a greater extent than other types of securities by the underperformance of a sector or during market downturns. |
■ | Sector Risk. At times, the Portfolio may have a significant portion of its assets invested in securities of companies conducting business in a broadly related group of industries within an economic sector. Individual sectors may be more volatile, and may perform differently, than the broader market. Companies in the same economic sector may be similarly affected by economic or market events, making the Portfolio more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly. |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10
Years (or Life of Class) |
Class I (began on 4-28-2017) | 38.28% | N/A | 19.57% |
Class II | 37.94% | 11.83% | 13.80% |
Indexes | |||
Russell Midcap Growth Index (reflects no deduction for fees, expenses or taxes) | 35.47% | 11.60% | 14.24% |
Morningstar Mid-Cap Growth Category Average (net of fees and expenses) | 32.52% | 10.45% | 12.79% |
14 Prospectus | Domestic Equity Portfolios |
Domestic
Equity Portfolios |
Prospectus 15 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.85% |
Distribution and Service (12b-1) Fees | 0.25% |
Other Expenses | 0.08% |
Total Annual Portfolio Operating Expenses | 1.18% |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $120 | $375 | $649 | $1,432 |
16 Prospectus | Domestic Equity Portfolios |
■ | Catalyst Risk. Investing in companies in anticipation of a catalyst carries the risk that certain of such catalysts may not happen or the market may react differently than expected to such catalysts, in which case the Portfolio may experience losses. |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may be more volatile or not perform as well as value stocks or the stock market in general. |
■ | Holdings Risk. The Portfolio typically holds a limited number of stocks (generally 40 to 60). As a result, the appreciation or depreciation of any one security held by the Portfolio may have a greater impact on the Portfolio’s NAV than it would if the Portfolio invested in a larger number of securities. |
■ | Liquidity Risk. Liquidity generally is related to the market trading volume for a particular security. Securities that have relatively less liquidity may trade at a discount from comparable, more liquid investments, and may be subject to wider fluctuations in market value. Such securities may be more difficult to dispose of at their recorded values and are subject to increased spreads and volatility. Also, the Portfolio may not be able to dispose of illiquid, or relatively less liquid, securities when that would be beneficial at a favorable time or price. Certain investments that generally were liquid when the Portfolio purchased them may become relatively less liquid, or even deemed illiquid, sometimes abruptly. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Portfolio Turnover Risk. Frequent buying and selling of investments involve higher costs to the Portfolio and may affect the Portfolio’s performance over time. Factors that can lead to short-term trading include market volatility, a significant positive or negative development concerning a security, an attempt to maintain the Portfolio’s market capitalization target, and the need to sell a security to meet redemption activity. |
■ | Small Company Risk. Securities of small-capitalization companies are subject to greater price volatility, lower trading volume and less liquidity due to, among other things, such companies’ small size, limited product lines, limited access to financing sources and limited management depth. In addition, the frequency and volume of trading of such |
Domestic
Equity Portfolios |
Prospectus 17 |
securities may be less than is typical of larger companies, making them subject to wider price fluctuations and such securities may be affected to a greater extent than other types of securities by the underperformance of a sector or during market downturns. In some cases, there could be difficulties in selling securities of small-capitalization companies at the desired time. |
■ | Value Stock Risk. Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor and, in the opinion of IICO, undervalued. The value of a security believed by IICO to be undervalued may never reach what is believed to be its full value; such security’s value may decrease or such security may be appropriately priced. |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10 Years |
Class II | 24.33% | 9.02% | 11.15% |
Indexes | |||
Russell 2000 Index (reflects no deduction for fees, expenses or taxes) | 25.53% | 8.23% | 11.83% |
Morningstar Small Blend Category Average (net of fees and expenses) | 23.75% | 7.12% | 11.17% |
18 Prospectus | Domestic Equity Portfolios |
Domestic
Equity Portfolios |
Prospectus 19 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | ||
(expenses that you pay each year as a % of the value of your investment) | Class I | Class II |
Management Fees | 0.85% | 0.85% |
Distribution and Service (12b-1) Fees | 0.00% | 0.25% |
Other Expenses | 0.06% | 0.07% |
Total Annual Portfolio Operating Expenses | 0.91% | 1.17% |
Fee Waiver and/or Expense Reimbursement1,2 | 0.02% | 0.03% |
Total Annual Portfolio Operating Expenses After Fee Waiver and/or Expense Reimbursement | 0.89% | 1.14% |
1 | Through April 30, 2021, Ivy Investment Management Company (IICO), the Portfolio’s investment manager, Ivy Distributors, Inc. (IDI), the Portfolio’s distributor, and/or Waddell & Reed Services Company, doing business as WI Services Company (WISC), the Portfolio’s transfer agent, have contractually agreed to reimburse sufficient management fees, 12b-1 fees and/or shareholder servicing fees to cap the total annual ordinary portfolio operating expenses (which would exclude interest, taxes, brokerage commissions, acquired fund fees and expenses and extraordinary expenses, if any) for Class II shares at 1.14%. Prior to that date, the expense limitation may not be terminated without the consent of the Board of Trustees (Board). |
2 | Through April 30, 2021, IDI and/or WISC have contractually agreed to reimburse sufficient fees to ensure that the total annual ordinary portfolio operating expenses (which would exclude interest, taxes, brokerage commissions, acquired fund fees and expenses and extraordinary expenses, if any) of the Class I Shares are at all times equal to the total annual ordinary portfolio operating expenses of the Class II shares less 0.25%, as calculated at the end of each month. Prior to that date, the expense limitation may not be terminated without the consent of the Board. |
1 Year | 3 Years | 5 Years | 10 Years | |
Class I | $ 91 | $288 | $502 | $ 1,118 |
Class II | 116 | 369 | 641 | 1,418 |
20 Prospectus | Domestic Equity Portfolios |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may be more volatile or not perform as well as value stocks or the stock market in general. |
■ | Health Care Sector Risk. Investment risks associated with investing in securities in the health care sector, in addition to other risks, include heavy dependence on patent protection, with profitability affected by the expiration of patents; expenses and losses from extensive litigation based on product liability and similar claims; competitive forces that may make it difficult to raise prices and, in fact, may result in price discounting; the potentially long and costly process for obtaining new product approval by the U.S. Food and Drug Administration (FDA); the difficulty health care providers may have obtaining staff to deliver services; susceptibility to product obsolescence; and thin capitalization and limited product lines, markets, financial resources or personnel. |
■ | Information Technology Sector Risk. Investment risks associated with investing in the information technology sector, in addition to other risks, include the intense competition to which information technology companies may be subject; the dramatic and often unpredictable changes in growth rates and competition for qualified personnel among information technology companies; effects on profitability from being heavily dependent on patent and intellectual property rights and the loss or impairment of those rights; obsolescence of existing technology; general economic conditions; and government regulation. |
■ | Initial Public Offering (IPO) Risk. Any positive effect of investments in IPOs may not be sustainable because of a number of factors. Namely, the Portfolio may not be able to buy shares in some IPOs, or may be able to buy only a |
Domestic
Equity Portfolios |
Prospectus 21 |
small number of shares. Also, the performance of IPOs generally is volatile, and is dependent on market psychology and economic conditions. To the extent that IPOs have a significant positive impact on the Portfolio’s performance, this may not be able to be replicated in the future. The relative performance impact of IPOs also is likely to decline as the Portfolio grows. |
■ | Liquidity Risk. Liquidity generally is related to the market trading volume for a particular security. Securities that have relatively less liquidity may trade at a discount from comparable, more liquid investments, and may be subject to wider fluctuations in market value. Such securities may be more difficult to dispose of at their recorded values and are subject to increased spreads and volatility. Also, the Portfolio may not be able to dispose of illiquid, or relatively less liquid, securities when that would be beneficial at a favorable time or price. Certain investments that generally were liquid when the Portfolio purchased them may become relatively less liquid, or even deemed illiquid, sometimes abruptly. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Sector Risk. At times, the Portfolio may have a significant portion of its assets invested in securities of companies conducting business in a broadly related group of industries within an economic sector. Individual sectors may be more volatile, and may perform differently, than the broader market. Companies in the same economic sector may be similarly affected by economic or market events, making the Portfolio more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly. |
■ | Small Company Risk. Securities of small-capitalization companies are subject to greater price volatility, lower trading volume and less liquidity due to, among other things, such companies’ small size, limited product lines, limited access to financing sources and limited management depth. In addition, the frequency and volume of trading of such securities may be less than is typical of larger companies, making them subject to wider price fluctuations and such securities may be affected to a greater extent than other types of securities by the underperformance of a sector or during market downturns. In some cases, there could be difficulties in selling securities of small-capitalization companies at the desired time. |
22 Prospectus | Domestic Equity Portfolios |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10
Years (or Life of Class) |
Class I (began on 11-2-2018) | 23.68% | N/A | 7.31% |
Class II | 23.37% | 8.84% | 10.42% |
Indexes | |||
Russell 2000 Growth Index (reflects no deduction for fees, expenses or taxes) | 28.48% | 9.34% | 13.01% |
Morningstar Small Growth Category Average (net of fees and expenses) | 27.68% | 9.92% | 12.68% |
Domestic
Equity Portfolios |
Prospectus 23 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.70% |
Distribution and Service (12b-1) Fees | 0.25% |
Other Expenses | 0.05% |
Total Annual Portfolio Operating Expenses | 1.00% |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $102 | $318 | $552 | $1,225 |
24 Prospectus | Domestic Equity Portfolios |
■ | Catalyst Risk. Investing in companies in anticipation of a catalyst carries the risk that certain of such catalysts may not happen or the market may react differently than expected to such catalysts, in which case the Portfolio may experience losses. |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Financials Sector Risk. Investment risks associated with investing in securities in the financials sector, in addition to other risks, include extensive governmental regulation and/or nationalization that affects the scope of their activities, the prices they can charge and the amount of capital they must maintain; adverse effects from increases in interest rates; effects on profitability by loan losses, which usually increase in economic downturns; the severe competition to which banks, insurance, and financial services companies may be subject; and increased interindustry consolidation and competition in the financials sector. The impact of more stringent capital requirements, recent or future regulation on any individual financial company or recent or future regulation on the financials economic sector as a whole cannot be predicted. |
■ | Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the company’s operations, products or services in those foreign markets. As a result, a company’s domicile and/or the markets in which the company’s securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the company’s products or services are sold. |
■ | Holdings Risk. The Portfolio typically holds a limited number of stocks (generally 30 to 45). As a result, the appreciation or depreciation of any one security held by the Portfolio may have a greater impact on the Portfolio’s NAV than it would if the Portfolio invested in a larger number of securities. |
■ | Large Company Risk. Large-capitalization companies may go in and out of favor based on market and economic conditions. Large-capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large-capitalization companies could trail the returns on investments in securities of smaller companies. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
Domestic
Equity Portfolios |
Prospectus 25 |
■ | Sector Risk. At times, the Portfolio may have a significant portion of its assets invested in securities of companies conducting business in a broadly related group of industries within an economic sector. Individual sectors may be more volatile, and may perform differently, than the broader market. Companies in the same economic sector may be similarly affected by economic or market events, making the Portfolio more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly. |
■ | Value Stock Risk. Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor and, in the opinion of IICO, undervalued. The value of a security believed by IICO to be undervalued may never reach what is believed to be its full value; such security’s value may decrease or such security may be appropriately priced. |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10 Years |
Class II | 26.33% | 7.08% | 10.70% |
Indexes | |||
Russell 1000 Value Index (reflects no deduction for fees, expenses or taxes) | 26.54% | 8.29% | 11.80% |
Morningstar Large Value Category Average (net of fees and expenses) | 25.04% | 7.99% | 10.90% |
26 Prospectus | Domestic Equity Portfolios |
Domestic
Equity Portfolios |
Prospectus 27 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.47% |
Distribution and Service (12b-1) Fees | 0.25% |
Other Expenses | 0.05% |
Total Annual Portfolio Operating Expenses | 0.77% |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $79 | $246 | $428 | $954 |
28 Prospectus | Fixed Income Portfolios |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Credit Risk. An issuer of a fixed-income obligation may not make payments on the obligation when due or may default on its obligation. There also is the risk that an issuer could suffer adverse changes in its financial condition that could lower the credit quality of a security. This could lead to greater volatility in the price of the security, could affect the security’s liquidity, and could make it more difficult to sell. A downgrade or default affecting any of the Portfolio’s securities could affect the Portfolio’s performance. In general, the longer the maturity and the lower the credit quality of a bond, the more sensitive it is to credit risk. |
■ | Extension Risk. A rise in interest rates could cause borrowers to pay back the principal on certain debt securities, such as mortgage-backed or asset-backed securities, more slowly than expected, thus lengthening the average life of such securities. This could cause the value of such securities to be more volatile or to decline more than other fixed-income securities, and may magnify the effect of the rate increase on the price of such securities. |
■ | Financials Sector Risk. Investment risks associated with investing in securities in the financials sector, in addition to other risks, include extensive governmental regulation and/or nationalization that affects the scope of their activities, the prices they can charge and the amount of capital they must maintain; adverse effects from increases in interest rates; effects on profitability by loan losses, which usually increase in economic downturns; the severe competition to which banks, insurance, and financial services companies may be subject; and increased interindustry consolidation and competition in the financials sector. The impact of more stringent capital requirements, recent or future regulation on any individual financial company or recent or future regulation on the financials economic sector as a whole cannot be predicted. |
■ | Fixed-Income Market Risk. The prices of the Portfolio’s fixed-income securities respond to economic developments, particularly interest rate changes, as well as to perceptions about the creditworthiness of individual issuers. Generally, the Portfolio’s fixed-income securities will decrease in value if interest rates rise and vice versa. In a low interest rate environment, risks associated with rising rates are heightened. Rising interest rates tend to decrease liquidity, increase trading costs and increase volatility, all of which may make portfolio management more difficult and costly to the Portfolio and its shareholders. In the case of foreign securities, price fluctuations will reflect international economic and political events, as well as changes in currency valuations relative to the U.S. dollar. Other factors may materially and adversely affect the market price and yield of such fixed-income securities, including investor demand, changes in the financial condition of the applicable issuer, government fiscal policy and domestic or worldwide economic conditions. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Foreign Securities Risk. Investing in foreign securities involves a number of economic, financial, legal and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending upon the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other operational delays. The risks may be exacerbated in connection with investments in emerging markets. World markets, |
Fixed Income
Portfolios |
Prospectus 29 |
or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
■ | Income Risk. The risk that the Portfolio may experience a decline in its income due to falling interest rates, earnings declines, or income decline within a security. The amount and rate of distributions that the Portfolio’s shareholders receive are affected by the income that the Portfolio receives from its portfolio holdings. If the income is reduced, distributions by the Portfolio to shareholders may be less. |
■ | Interest Rate Risk. A rise in interest rates may cause a decline in the value of the Portfolio’s securities, especially securities with longer maturities. Typically, the longer the maturity or duration of a debt security, the greater the effect a change in interest rates could have on the security’s price. Thus, the sensitivity of the Portfolio’s debt securities to interest rate risk will increase with any increase in the duration of those securities. A decline in interest rates may cause the Portfolio to experience a decline in its income. Interest rates in the U.S. recently have been at, and remain near, historic lows, which may increase the Portfolio’s exposure to risks associated with rising rates. The Portfolio may be subject to heightened interest rate risk as a result of a rise or anticipated rise in interest rates. In addition, a general rise in rates may result in decreased liquidity and increased volatility in the fixed-income markets generally. |
■ | Liquidity Risk. Liquidity generally is related to the market trading volume for a particular security. Securities that have relatively less liquidity may trade at a discount from comparable, more liquid investments, and may be subject to wider fluctuations in market value. Such securities may be more difficult to dispose of at their recorded values and are subject to increased spreads and volatility. Also, the Portfolio may not be able to dispose of illiquid, or relatively less liquid, securities when that would be beneficial at a favorable time or price. Certain investments that generally were liquid when the Portfolio purchased them may become relatively less liquid, or even deemed illiquid, sometimes abruptly. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
■ | Mortgage-Backed and Asset-Backed Securities Risk. Mortgage-backed and asset-backed securities are subject to prepayment risk and extension risk. When interest rates decline, unscheduled prepayments can be expected to accelerate, shortening the average lives of such securities, and the Portfolio may be required to reinvest the proceeds of the prepayments at the lower interest rates then available. Unscheduled prepayments also would limit the potential for capital appreciation on mortgage-backed and asset-backed securities, thereby reducing the Portfolio’s income. Conversely, when interest rates rise, the values of mortgage-backed and asset-backed securities generally fall. Rising interest rates typically result in decreased prepayments and longer average lives of such securities. This could cause the value of such securities to be more volatile or decline more than other fixed-income securities, and may magnify the effect of the rate increase on the price of such securities. |
Certain mortgage-backed securities are U.S. government securities. See U.S. Government Securities Risk for the risks of these types of securities. For non-U.S. government securities, there is the risk that payments on a security will not be made when due, or the value of such security will decline, because the security is not issued or guaranteed as to principal or interest by the U.S. government or by agencies or authorities controlled or supervised by and acting as instrumentalities of the U.S. government or supported by the right of the issuer to borrow from the U.S. government. |
■ | Non-Agency Securities Risk. The risk that payments on a security will not be made when due, or the value of such security will decline, because the security is not issued or guaranteed as to principal or interest by the U.S. government or by agencies or authorities controlled or supervised by and acting as instrumentalities of the U.S. government. These securities may include, but are not limited to, securities issued by non-government entities, asset-backed securities (which represent interests in auto, consumer and/or credit card loans) and commercial mortgage-backed securities (which represent interests in commercial mortgage loans). |
■ | Reinvestment Risk. A decline in interest rates may cause issuers to prepay higher-yielding securities held by the Portfolio, resulting in the Portfolio reinvesting in securities with lower yields, which may cause a decline in its income. |
■ | Sector Risk. At times, the Portfolio may have a significant portion of its assets invested in securities of companies conducting business in a broadly related group of industries within an economic sector. Individual sectors may be more volatile, and may perform differently, than the broader market. Companies in the same economic sector may be similarly affected by economic or market events, making the Portfolio more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly. |
30 Prospectus | Fixed Income Portfolios |
■ | U.S. Government Securities Risk. Certain U.S. government securities, such as Treasury securities and securities issued by Ginnie Mae, are backed by the full faith and credit of the U.S. government. Other U.S. government securities, such as securities issued by Fannie Mae, Freddie Mac and the FHLB, are not backed by the full faith and credit of the U.S. government and, instead, may be supported only by the credit of the issuer or by the right of the issuer to borrow from the Treasury. |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10 Years |
Class II | 12.18% | 3.60% | 3.91% |
Indexes | |||
Bloomberg Barclays US Credit Index (reflects no deduction for fees, expenses or taxes) | 13.80% | 4.39% | 5.32% |
Morningstar Corporate Bond Category Average (net of fees and expenses) | 13.03% | 4.22% | 5.18% |
Fixed Income
Portfolios |
Prospectus 31 |
32 Prospectus | Fixed Income Portfolios |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.62% |
Distribution and Service (12b-1) Fees | 0.25% |
Other Expenses | 0.26% |
Total Annual Portfolio Operating Expenses1 | 1.13% |
1 | The Total Annual Portfolio Operating Expenses ratio shown in this table does not correlate to the expense ratio shown in the Financial Highlights table because the Portfolio has a voluntary waiver that is not reflected above. |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $115 | $359 | $622 | $1,375 |
Fixed Income
Portfolios |
Prospectus 33 |
■ | Capital Repatriation Risk. Capital repatriation involves the transfer of corporate money or property from a foreign country back to its home country. The repatriation of capital with regard to investments made in certain securities or countries may be restricted during certain times from the date of such investments or even indefinitely. If IICO is unable to repatriate capital from its investments, in whole or in part, this may have an adverse effect on the cash flows and/or performance of the Portfolio. |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Credit Risk. An issuer of a fixed-income obligation may not make payments on the obligation when due or may default on its obligation. There also is the risk that an issuer could suffer adverse changes in its financial condition that could lower the credit quality of a security. This could lead to greater volatility in the price of the security, could affect the security’s liquidity, and could make it more difficult to sell. A downgrade or default affecting any of the Portfolio’s securities could affect the Portfolio’s performance. In general, the longer the maturity and the lower the credit quality of a bond, the more sensitive it is to credit risk. |
■ | Emerging Market Risk. Investments in countries with emerging economies or securities markets may carry greater risk than investments in more developed countries. Political and economic structures in many such countries may be undergoing significant evolution and rapid development, and such countries may lack the social, political and economic stability characteristics of more developed countries. Investments in securities issued in these countries may be more volatile and less liquid than securities issued in more developed countries. Emerging markets are more susceptible to capital controls, governmental interference, local taxes being imposed on international investments, restrictions on gaining access to sales proceeds, and less efficient trading markets. |
■ | Extension Risk. A rise in interest rates could cause borrowers to pay back the principal on certain debt securities, such as mortgage-backed or asset-backed securities, more slowly than expected, thus lengthening the average life of such securities. This could cause the value of such securities to be more volatile or to decline more than other fixed-income securities, and may magnify the effect of the rate increase on the price of such securities. |
■ | Fixed-Income Market Risk. The prices of the Portfolio’s fixed-income securities respond to economic developments, particularly interest rate changes, as well as to perceptions about the creditworthiness of individual issuers. Generally, the Portfolio’s fixed-income securities will decrease in value if interest rates rise and vice versa. In a low interest rate environment, risks associated with rising rates are heightened. Rising interest rates tend to decrease liquidity, increase trading costs and increase volatility, all of which may make portfolio management more difficult and costly to the Portfolio and its shareholders. In the case of foreign securities, price fluctuations will reflect international economic and political events, as well as changes in currency valuations relative to the U.S. dollar. Other factors may materially and adversely affect the market price and yield of such fixed-income securities, including investor demand, changes in the financial condition of the applicable issuer, government fiscal policy and domestic or worldwide |
34 Prospectus | Fixed Income Portfolios |
economic conditions. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Foreign Currency Risk. Foreign securities may be denominated in foreign currencies. The value of the Portfolio’s investments, as measured in U.S. dollars, may be unfavorably affected by changes in foreign currency exchange rates and exchange control regulations. Currency markets generally are not as regulated as securities markets. |
■ | Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the company’s operations, products or services in those foreign markets. As a result, a company’s domicile and/or the markets in which the company’s securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the company’s products or services are sold. |
■ | Foreign Securities Risk. Investing in foreign securities involves a number of economic, financial, legal and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending upon the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other operational delays. The risks may be exacerbated in connection with investments in emerging markets. World markets, or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
■ | Income Risk. The risk that the Portfolio may experience a decline in its income due to falling interest rates, earnings declines, or income decline within a security. The amount and rate of distributions that the Portfolio’s shareholders receive are affected by the income that the Portfolio receives from its portfolio holdings. If the income is reduced, distributions by the Portfolio to shareholders may be less. |
■ | Interest Rate Risk. A rise in interest rates may cause a decline in the value of the Portfolio’s securities, especially securities with longer maturities. Typically, the longer the maturity or duration of a debt security, the greater the effect a change in interest rates could have on the security’s price. Thus, the sensitivity of the Portfolio’s debt securities to interest rate risk will increase with any increase in the duration of those securities. A decline in interest rates may cause the Portfolio to experience a decline in its income. Interest rates in the U.S. recently have been at, and remain near, historic lows, which may increase the Portfolio’s exposure to risks associated with rising rates. The Portfolio may be subject to heightened interest rate risk as a result of a rise or anticipated rise in interest rates. In addition, a general rise in rates may result in decreased liquidity and increased volatility in the fixed-income markets generally. |
■ | Liquidity Risk. Liquidity generally is related to the market trading volume for a particular security. Securities that have relatively less liquidity may trade at a discount from comparable, more liquid investments, and may be subject to wider fluctuations in market value. Such securities may be more difficult to dispose of at their recorded values and are subject to increased spreads and volatility. Also, the Portfolio may not be able to dispose of illiquid, or relatively less liquid, securities when that would be beneficial at a favorable time or price. Certain investments that generally were liquid when the Portfolio purchased them may become relatively less liquid, or even deemed illiquid, sometimes abruptly. |
■ | Loan Risk. In addition to the risks typically associated with fixed-income securities, loans carry other risks, including the risk of insolvency of the lending bank or other intermediary. The risks associated with loans are similar to the risks of low-rated debt securities or “junk” bonds since loans typically are below investment-grade. Loans may be unsecured or not fully collateralized, may be subject to restrictions on resale, may be difficult to value, sometimes trade infrequently on the secondary market and generally are subject to extended settlement periods. Any of these factors may impair the Portfolio’s ability to sell or realize promptly the full value of its loans in the event of a need to liquidate such loans. Accordingly, loans that have been sold may not be immediately available to meet redemptions. Extended trade settlement periods may result in cash not being immediately available to the Portfolio. As a result, the Portfolio may have to sell other investments or engage in borrowing transactions to raise cash to meet its obligations. Interests in secured loans have the benefit of collateral and, typically, of restrictive covenants limiting the ability of the borrower to further encumber its assets. There is a risk that the value of the collateral securing a loan in which the Portfolio has an interest may decline and that the collateral may not be sufficient to cover the amount owed on the loan. In the event the borrower defaults, the Portfolio’s access to the collateral may be limited or delayed by bankruptcy and other insolvency laws. These risks could cause the Portfolio to lose income or principal on a particular investment, which |
Fixed Income
Portfolios |
Prospectus 35 |
could affect the Portfolio’s returns. In addition, loans also are subject to the risk that a court could subordinate the loan to presently existing or future indebtedness or take other action detrimental to the holders of the loan. Further, in the event of a default, second or lower lien secured loans will generally be paid only if the value of the collateral exceeds the amount of the borrower’s obligations to the senior secured lenders, and the remaining collateral may not be sufficient to cover the full amount owed on the loan in which the Portfolio has an interest. Loans made to finance highly leveraged companies or to finance corporate acquisitions or other transactions may be especially vulnerable to adverse changes in economic or market conditions. | |
With loan assignments, as an assignee, the Portfolio normally will succeed to all rights and obligations of its assignor with respect to the portion of the loan that is being assigned. However, the rights and obligations acquired by the purchaser of a loan assignment may differ from, and be more limited than, those held by the original lenders or the assignor. With loan participations, the Portfolio may not be able to control the exercise of any remedies that the lender would have under the loan and likely would not have any rights against the borrower directly, so that delays and expense may be greater than those that would be involved if the Portfolio could enforce its rights directly against the borrower. |
■ | Low-Rated Securities Risk. In general, low-rated debt securities (commonly referred to as “high-yield” or “junk” bonds) offer higher yields due to the increased risk that the issuer will be unable to meet its obligations on interest or principal payments at the time called for by the debt instrument. For this reason, these securities are considered speculative and could significantly weaken the Portfolio’s returns. In adverse economic or other circumstances, issuers of these low-rated securities and obligations are more likely to have difficulty making principal and interest payments than issuers of higher-rated securities and obligations. In addition, these low-rated securities and obligations may fluctuate more widely in price and yield than higher-rated securities and obligations and may fall in price during times when the economy is weak or is expected to become weak. Issuers of securities that are in default or have defaulted may fail to resume principal or interest payments, in which case the Portfolio may lose its entire investment. The creditworthiness of issuers of low-rated securities may be more complex to analyze than that of issuers of investment-grade debt securities. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
■ | Reinvestment Risk. A decline in interest rates may cause issuers to prepay higher-yielding securities held by the Portfolio, resulting in the Portfolio reinvesting in securities with lower yields, which may cause a decline in its income. |
■ | Small Company Risk. Securities of small-capitalization companies are subject to greater price volatility, lower trading volume and less liquidity due to, among other things, such companies’ small size, limited product lines, limited access to financing sources and limited management depth. In addition, the frequency and volume of trading of such securities may be less than is typical of larger companies, making them subject to wider price fluctuations and such securities may be affected to a greater extent than other types of securities by the underperformance of a sector or during market downturns. In some cases, there could be difficulties in selling securities of small-capitalization companies at the desired time. |
■ | U.S. Government Securities Risk. Certain U.S. government securities, such as Treasury securities and securities issued by Ginnie Mae, are backed by the full faith and credit of the U.S. government. Other U.S. government securities, such as securities issued by Fannie Mae, Freddie Mac and the FHLB, are not backed by the full faith and credit of the U.S. government and, instead, may be supported only by the credit of the issuer or by the right of the issuer to borrow from the Treasury. |
36 Prospectus | Fixed Income Portfolios |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | Life
of Class |
Class II (began on 8-23-2010) | 9.42% | 3.48% | 2.73% |
Indexes | |||
Bloomberg Barclays Global Credit 1-10 Year Index Hedged USD (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-23-2010) | 9.50% | 4.18% | 4.42% |
Morningstar World Bond Category Average (net of fees and expenses) (Life of Class index comparison begins on 8-23-2010) | 6.73% | 1.78% | 2.05% |
Fixed Income
Portfolios |
Prospectus 37 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | ||
(expenses that you pay each year as a % of the value of your investment) | Class I | Class II |
Management Fees | 0.61% | 0.61% |
Distribution and Service (12b-1) Fees | 0.00% | 0.25% |
Other Expenses | 0.06% | 0.06% |
Acquired Fund Fees and Expenses1 | 0.01% | 0.01% |
Total Annual Portfolio Operating Expenses2,3 | 0.68% | 0.93% |
1 | Acquired Fund Fees and Expenses sets forth the Portfolio’s pro rata portion of the cumulative expenses charged by the exchange-traded fund (ETF) in which the Portfolio invested during the last fiscal year. The actual Acquired Fund Fees and Expenses will vary with changes in the allocations of the Portfolio’s assets. The Acquired Fund Fees and Expenses shown are based on the total expense ratio of the ETF for the ETF's most recent fiscal period. These expenses are not direct costs paid by Portfolio shareholders, and are not used to calculate the Portfolio's NAV. |
2 | The Total Annual Portfolio Operating Expenses ratio shown in this table does not correlate to the expense ratio shown in the Financial Highlights table because that ratio does not include the Acquired Fund Fees and Expenses. |
3 | Through April 30, 2021, Ivy Distributors, Inc. (IDI), the Portfolio’s distributor, and/or Waddell & Reed Services Company (doing business as WI Services Company (WISC)), the Portfolio’s transfer agent, have contractually agreed to reimburse sufficient fees to ensure that the total annual ordinary portfolio operating expenses (which would exclude interest, taxes, brokerage commissions, acquired fund fees and expenses and extraordinary expenses, if any) of the Class I shares are at all times equal to the total annual ordinary portfolio operating expenses of the Class II shares less 0.25%, as calculated at the end of each month. Prior to that date, the expense limitation may not be terminated without the consent of the Board of Trustees (Board). |
1 Year | 3 Years | 5 Years | 10 Years | |
Class I | $69 | $ 218 | $379 | $ 847 |
Class II | 95 | 296 | 515 | 1,143 |
38 Prospectus | Fixed Income Portfolios |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Credit Risk. An issuer of a fixed-income obligation may not make payments on the obligation when due or may default on its obligation. There also is the risk that an issuer could suffer adverse changes in its financial condition that could lower the credit quality of a security. This could lead to greater volatility in the price of the security, could affect the security’s liquidity, and could make it more difficult to sell. A downgrade or default affecting any of the Portfolio’s securities could affect the Portfolio’s performance. In general, the longer the maturity and the lower the credit quality of a bond, the more sensitive it is to credit risk. |
■ | Extension Risk. A rise in interest rates could cause borrowers to pay back the principal on certain debt securities, such as mortgage-backed or asset-backed securities, more slowly than expected, thus lengthening the average life of such securities. This could cause the value of such securities to be more volatile or to decline more than other fixed-income securities, and may magnify the effect of the rate increase on the price of such securities. |
■ | Fixed-Income Market Risk. The prices of the Portfolio’s fixed-income securities respond to economic developments, particularly interest rate changes, as well as to perceptions about the creditworthiness of individual |
Fixed Income
Portfolios |
Prospectus 39 |
issuers. Generally, the Portfolio’s fixed-income securities will decrease in value if interest rates rise and vice versa. In a low interest rate environment, risks associated with rising rates are heightened. Rising interest rates tend to decrease liquidity, increase trading costs and increase volatility, all of which may make portfolio management more difficult and costly to the Portfolio and its shareholders. In the case of foreign securities, price fluctuations will reflect international economic and political events, as well as changes in currency valuations relative to the U.S. dollar. Other factors may materially and adversely affect the market price and yield of such fixed-income securities, including investor demand, changes in the financial condition of the applicable issuer, government fiscal policy and domestic or worldwide economic conditions. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Foreign Currency Risk. Foreign securities may be denominated in foreign currencies. The value of the Portfolio’s investments, as measured in U.S. dollars, may be unfavorably affected by changes in foreign currency exchange rates and exchange control regulations. Currency markets generally are not as regulated as securities markets. |
■ | Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the company’s operations, products or services in those foreign markets. As a result, a company’s domicile and/or the markets in which the company’s securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the company’s products or services are sold. |
■ | Foreign Securities Risk. Investing in foreign securities involves a number of economic, financial, legal and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending upon the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other operational delays. The risks may be exacerbated in connection with investments in emerging markets. World markets, or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
■ | Income Risk. The risk that the Portfolio may experience a decline in its income due to falling interest rates, earnings declines, or income decline within a security. The amount and rate of distributions that the Portfolio’s shareholders receive are affected by the income that the Portfolio receives from its portfolio holdings. If the income is reduced, distributions by the Portfolio to shareholders may be less. |
■ | Interest Rate Risk. A rise in interest rates may cause a decline in the value of the Portfolio’s securities, especially securities with longer maturities. Typically, the longer the maturity or duration of a debt security, the greater the effect a change in interest rates could have on the security’s price. Thus, the sensitivity of the Portfolio’s debt securities to interest rate risk will increase with any increase in the duration of those securities. A decline in interest rates may cause the Portfolio to experience a decline in its income. Interest rates in the U.S. recently have been at, and remain near, historic lows, which may increase the Portfolio’s exposure to risks associated with rising rates. The Portfolio may be subject to heightened interest rate risk as a result of a rise or anticipated rise in interest rates. In addition, a general rise in rates may result in decreased liquidity and increased volatility in the fixed-income markets generally. |
■ | Liquidity Risk. Liquidity generally is related to the market trading volume for a particular security. Securities that have relatively less liquidity may trade at a discount from comparable, more liquid investments, and may be subject to wider fluctuations in market value. Such securities may be more difficult to dispose of at their recorded values and are subject to increased spreads and volatility. Also, the Portfolio may not be able to dispose of illiquid, or relatively less liquid, securities when that would be beneficial at a favorable time or price. Certain investments that generally were liquid when the Portfolio purchased them may become relatively less liquid, or even deemed illiquid, sometimes abruptly. |
■ | Loan Risk. In addition to the risks typically associated with fixed-income securities, loans carry other risks, including the risk of insolvency of the lending bank or other intermediary. The risks associated with loans are similar to the risks of low-rated debt securities or “junk” bonds since loans typically are below investment-grade. Loans may be unsecured or not fully collateralized, may be subject to restrictions on resale, may be difficult to value, sometimes trade infrequently on the secondary market and generally are subject to extended settlement periods. Any of these factors may impair the Portfolio’s ability to sell or realize promptly the full value of its loans in the event of a need to liquidate such loans. Accordingly, loans that have been sold may not be immediately available to meet redemptions. Extended |
40 Prospectus | Fixed Income Portfolios |
trade settlement periods may result in cash not being immediately available to the Portfolio. As a result, the Portfolio may have to sell other investments or engage in borrowing transactions to raise cash to meet its obligations. Interests in secured loans have the benefit of collateral and, typically, of restrictive covenants limiting the ability of the borrower to further encumber its assets. There is a risk that the value of the collateral securing a loan in which the Portfolio has an interest may decline and that the collateral may not be sufficient to cover the amount owed on the loan. In the event the borrower defaults, the Portfolio’s access to the collateral may be limited or delayed by bankruptcy and other insolvency laws. These risks could cause the Portfolio to lose income or principal on a particular investment, which could affect the Portfolio’s returns. In addition, loans also are subject to the risk that a court could subordinate the loan to presently existing or future indebtedness or take other action detrimental to the holders of the loan. Further, in the event of a default, second or lower lien secured loans will generally be paid only if the value of the collateral exceeds the amount of the borrower’s obligations to the senior secured lenders, and the remaining collateral may not be sufficient to cover the full amount owed on the loan in which the Portfolio has an interest. Loans made to finance highly leveraged companies or to finance corporate acquisitions or other transactions may be especially vulnerable to adverse changes in economic or market conditions. | |
With loan assignments, as an assignee, the Portfolio normally will succeed to all rights and obligations of its assignor with respect to the portion of the loan that is being assigned. However, the rights and obligations acquired by the purchaser of a loan assignment may differ from, and be more limited than, those held by the original lenders or the assignor. With loan participations, the Portfolio may not be able to control the exercise of any remedies that the lender would have under the loan and likely would not have any rights against the borrower directly, so that delays and expense may be greater than those that would be involved if the Portfolio could enforce its rights directly against the borrower. |
■ | Low-Rated Securities Risk. In general, low-rated debt securities (commonly referred to as “high-yield” or “junk” bonds) offer higher yields due to the increased risk that the issuer will be unable to meet its obligations on interest or principal payments at the time called for by the debt instrument. For this reason, these securities are considered speculative and could significantly weaken the Portfolio’s returns. In adverse economic or other circumstances, issuers of these low-rated securities and obligations are more likely to have difficulty making principal and interest payments than issuers of higher-rated securities and obligations. In addition, these low-rated securities and obligations may fluctuate more widely in price and yield than higher-rated securities and obligations and may fall in price during times when the economy is weak or is expected to become weak. Issuers of securities that are in default or have defaulted may fail to resume principal or interest payments, in which case the Portfolio may lose its entire investment. The creditworthiness of issuers of low-rated securities may be more complex to analyze than that of issuers of investment-grade debt securities. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
■ | Reinvestment Risk. A decline in interest rates may cause issuers to prepay higher-yielding securities held by the Portfolio, resulting in the Portfolio reinvesting in securities with lower yields, which may cause a decline in its income. |
■ | Restricted Securities Risk. Restricted securities are subject to legal or contractual restrictions on resale, and there can be no assurance of a ready market for resale. These securities include private placements or other unregistered securities, such as “Rule 144A Securities”, which are securities that may be sold only to qualified institutional buyers pursuant to the Securities Act of 1933, as amended (1933 Act). Privately placed securities, Rule 144A securities and other restricted securities may have the effect of increasing the level of Portfolio illiquidity to the extent the Portfolio finds it difficult to sell these securities when IICO believes it is desirable to do so, especially under adverse market or economic conditions or in the event of adverse changes in the financial condition of the issuer, and the prices realized could be less than those originally paid, or less than the fair market value. At times, the illiquidity of the market, as well as the lack of publicly available information regarding these securities also may make it difficult to determine the fair market value of such securities for purposes of computing the NAV of the Portfolio. |
Fixed Income
Portfolios |
Prospectus 41 |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10
Years (or Life of Class) |
Class I (began on 4-28-2017) | 11.49% | N/A | 4.73% |
Class II | 11.19% | 4.75% | 7.37% |
Indexes | |||
ICE BofA US High Yield Index (reflects no deduction for fees, expenses or taxes) | 14.41% | 6.13% | 7.50% |
Morningstar High-Yield Bond Category Average (net of fees and expenses) | 12.62% | 4.87% | 6.42% |
42 Prospectus | Fixed Income Portfolios |
Fixed Income
Portfolios |
Prospectus 43 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.50% |
Distribution and Service (12b-1) Fees | 0.25% |
Other Expenses | 0.04% |
Total Annual Portfolio Operating Expenses | 0.79% |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $81 | $252 | $439 | $978 |
44 Prospectus | Fixed Income Portfolios |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Credit Risk. An issuer of a fixed-income obligation may not make payments on the obligation when due or may default on its obligation. There also is the risk that an issuer could suffer adverse changes in its financial condition that could lower the credit quality of a security. This could lead to greater volatility in the price of the security, could affect the security’s liquidity, and could make it more difficult to sell. A downgrade or default affecting any of the Portfolio’s securities could affect the Portfolio’s performance. In general, the longer the maturity and the lower the credit quality of a bond, the more sensitive it is to credit risk. |
■ | Extension Risk. A rise in interest rates could cause borrowers to pay back the principal on certain debt securities, such as mortgage-backed or asset-backed securities, more slowly than expected, thus lengthening the average life of such securities. This could cause the value of such securities to be more volatile or to decline more than other fixed-income securities, and may magnify the effect of the rate increase on the price of such securities. |
■ | Fixed-Income Market Risk. The prices of the Portfolio’s fixed-income securities respond to economic developments, particularly interest rate changes, as well as to perceptions about the creditworthiness of individual issuers. Generally, the Portfolio’s fixed-income securities will decrease in value if interest rates rise and vice versa. In a low interest rate environment, risks associated with rising rates are heightened. Rising interest rates tend to decrease liquidity, increase trading costs and increase volatility, all of which may make portfolio management more difficult and costly to the Portfolio and its shareholders. In the case of foreign securities, price fluctuations will reflect international economic and political events, as well as changes in currency valuations relative to the U.S. dollar. Other factors may materially and adversely affect the market price and yield of such fixed-income securities, including investor demand, changes in the financial condition of the applicable issuer, government fiscal policy and domestic or worldwide economic conditions. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Income Risk. The risk that the Portfolio may experience a decline in its income due to falling interest rates, earnings declines, or income decline within a security. The amount and rate of distributions that the Portfolio’s shareholders receive are affected by the income that the Portfolio receives from its portfolio holdings. If the income is reduced, distributions by the Portfolio to shareholders may be less. |
■ | Interest Rate Risk. A rise in interest rates may cause a decline in the value of the Portfolio’s securities, especially securities with longer maturities. Typically, the longer the maturity or duration of a debt security, the greater the effect a change in interest rates could have on the security’s price. Thus, the sensitivity of the Portfolio’s debt securities to interest rate risk will increase with any increase in the duration of those securities. A decline in interest rates may cause the Portfolio to experience a decline in its income. Interest rates in the U.S. recently have been at, and remain near, historic lows, which may increase the Portfolio’s exposure to risks associated with rising rates. The Portfolio may be subject to heightened interest rate risk as a result of a rise or anticipated rise in interest rates. In addition, a general rise in rates may result in decreased liquidity and increased volatility in the fixed-income markets generally. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
■ | Mortgage-Backed and Asset-Backed Securities Risk. Mortgage-backed and asset-backed securities are subject to prepayment risk and extension risk. When interest rates decline, unscheduled prepayments can be expected to accelerate, shortening the average lives of such securities, and the Portfolio may be required to reinvest the proceeds of the prepayments at the lower interest rates then available. Unscheduled prepayments also would limit the potential for capital appreciation on mortgage-backed and asset-backed securities, thereby reducing the Portfolio’s income. |
Fixed Income
Portfolios |
Prospectus 45 |
Conversely, when interest rates rise, the values of mortgage-backed and asset-backed securities generally fall. Rising interest rates typically result in decreased prepayments and longer average lives of such securities. This could cause the value of such securities to be more volatile or decline more than other fixed-income securities, and may magnify the effect of the rate increase on the price of such securities. | |
Certain mortgage-backed securities are U.S. government securities. See U.S. Government Securities Risk for the risks of these types of securities. For non-U.S. government securities, there is the risk that payments on a security will not be made when due, or the value of such security will decline, because the security is not issued or guaranteed as to principal or interest by the U.S. government or by agencies or authorities controlled or supervised by and acting as instrumentalities of the U.S. government or supported by the right of the issuer to borrow from the U.S. government. |
■ | Reinvestment Risk. A decline in interest rates may cause issuers to prepay higher-yielding securities held by the Portfolio, resulting in the Portfolio reinvesting in securities with lower yields, which may cause a decline in its income. |
■ | U.S. Government Securities Risk. Certain U.S. government securities, such as Treasury securities and securities issued by Ginnie Mae, are backed by the full faith and credit of the U.S. government. Other U.S. government securities, such as securities issued by Fannie Mae, Freddie Mac and the FHLB, are not backed by the full faith and credit of the U.S. government and, instead, may be supported only by the credit of the issuer or by the right of the issuer to borrow from the Treasury. |
Chart of Year-by-Year Returns |
as of
December 31 each year |
46 Prospectus | Fixed Income Portfolios |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | Life
of Class |
Class II (began on 8-23-2010) | 4.23% | 1.84% | 1.63% |
Indexes | |||
Bloomberg Barclays 1-3 Year Gov/Credit Index1 (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-23-2010) | 4.03% | 1.67% | 1.38% |
Bloomberg Barclays 1-5 Year Gov/Credit Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-23-2010) | 5.01% | 2.03% | 1.83% |
Morningstar Short-Term Bond Category Average (net of fees and expenses) (Life of Class index comparison begins on 8-23-2010) | 4.72% | 2.00% | 1.81% |
1 | Effective April 30, 2020, the Portfolio’s new benchmark is the Bloomberg Barclays 1-3 Year Gov/Credit Index. IICO believes that this index is more reflective of the types of securities that the Portfolio invests in. Both the new benchmark and the Portfolio’s previous benchmark noted above are included in this Prospectus for comparison purposes. |
Fixed Income
Portfolios |
Prospectus 47 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.70% |
Distribution and Service (12b-1) Fees | 0.25% |
Other Expenses | 0.07% |
Total Annual Portfolio Operating Expenses | 1.02% |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $104 | $325 | $563 | $1,248 |
48 Prospectus | Global/International Portfolios |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Dividend-Paying Stock Risk. Dividend-paying stocks may fall out of favor with investors and underperform non-dividend paying stocks and the market as a whole over any period of time. In addition, there is no guarantee that the companies in which the Portfolio invests will declare dividends in the future or that dividends, if declared, will remain at current levels or increase over time. The amount of any dividend a company may pay may fluctuate significantly. In addition, the value of dividend-paying common stocks can decline when interest rates rise as other investments become more attractive to investors. This risk may be greater due to the current period of historically low interest rates. |
■ | Emerging Market Risk. Investments in countries with emerging economies or securities markets may carry greater risk than investments in more developed countries. Political and economic structures in many such countries may be undergoing significant evolution and rapid development, and such countries may lack the social, political and economic stability characteristics of more developed countries. Investments in securities issued in these countries may be more volatile and less liquid than securities issued in more developed countries. Emerging markets are more susceptible to capital controls, governmental interference, local taxes being imposed on international investments, restrictions on gaining access to sales proceeds, and less efficient trading markets. |
■ | Foreign Currency Risk. Foreign securities may be denominated in foreign currencies. The value of the Portfolio’s investments, as measured in U.S. dollars, may be unfavorably affected by changes in foreign currency exchange rates and exchange control regulations. Currency markets generally are not as regulated as securities markets. |
■ | Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the company’s operations, products or services in those foreign markets. As a result, a company’s domicile and/or the markets in which the company’s securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the company’s products or services are sold. |
■ | Foreign Securities Risk. Investing in foreign securities involves a number of economic, financial, legal and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending upon the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other operational delays. The risks may be exacerbated in connection with investments in emerging markets. World markets, or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, |
Global/International
Portfolios |
Prospectus 49 |
incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
■ | Holdings Risk. The Portfolio typically holds a limited number of stocks (generally 40 to 60). As a result, the appreciation or depreciation of any one security held by the Portfolio may have a greater impact on the Portfolio’s NAV than it would if the Portfolio invested in a larger number of securities. |
■ | Large Company Risk. Large-capitalization companies may go in and out of favor based on market and economic conditions. Large-capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large-capitalization companies could trail the returns on investments in securities of smaller companies. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
50 Prospectus | Global/International Portfolios |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10 Years |
Class II | 23.15% | 5.66% | 8.93% |
Indexes | |||
FTSE All-World High Dividend Yield Index (reflects no deduction for fees, expenses or taxes) | 21.22% | 5.96% | 6.74% |
Morningstar World Large Stock Category Average (net of fees and expenses) | 25.68% | 8.10% | 8.59% |
Global/International
Portfolios |
Prospectus 51 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.85% |
Distribution and Service (12b-1) Fees | 0.25% |
Other Expenses | 0.11% |
Total Annual Portfolio Operating Expenses | 1.21% |
Fee Waiver and/or Expense Reimbursement1 | 0.08% |
Total Annual Portfolio Operating Expenses After Fee Waiver and/or Expense Reimbursement | 1.13% |
1 | Through April 30, 2021, Ivy Investment Management Company (IICO), the Portfolio’s investment manager, Ivy Distributors, Inc. (IDI), the Portfolio’s distributor, and/or Waddell & Reed Services Company, doing business as WI Services Company (WISC), the Portfolio’s transfer agent, have contractually agreed to reimburse sufficient management fees, Rule 12b-1 fees and/or shareholder servicing fees to cap the total annual ordinary portfolio operating expenses (which would exclude interest, taxes, brokerage commissions, acquired fund fees and expenses and extraordinary expenses, if any) for Class II shares at 1.13%. Prior to that date, the expense limitation may not be terminated without the consent of the Board of Trustees (Board). |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $115 | $376 | $657 | $1,459 |
52 Prospectus | Global/International Portfolios |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Depositary Receipts Risk. Investments in depositary receipts (including American Depositary Receipts, European Depositary Receipts and Global Depositary Receipts) generally are subject to the same risks of investing in the foreign securities that they evidence or into which they may be converted. |
■ | Emerging Market Risk. Investments in countries with emerging economies or securities markets may carry greater risk than investments in more developed countries. Political and economic structures in many such countries may be undergoing significant evolution and rapid development, and such countries may lack the social, political and economic stability characteristics of more developed countries. Investments in securities issued in these countries may be more volatile and less liquid than securities issued in more developed countries. Emerging markets are more susceptible to capital controls, governmental interference, local taxes being imposed on international investments, restrictions on gaining access to sales proceeds, and less efficient trading markets. |
■ | Foreign Currency Risk. Foreign securities may be denominated in foreign currencies. The value of the Portfolio’s investments, as measured in U.S. dollars, may be unfavorably affected by changes in foreign currency exchange rates and exchange control regulations. Currency markets generally are not as regulated as securities markets. |
■ | Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the company’s operations, products or services in those foreign markets. As a result, a company’s domicile and/or the markets in which the company’s securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the company’s products or services are sold. |
■ | Foreign Securities Risk. Investing in foreign securities involves a number of economic, financial, legal and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending upon the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related |
Global/International
Portfolios |
Prospectus 53 |
conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other operational delays. The risks may be exacerbated in connection with investments in emerging markets. World markets, or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
■ | Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may be more volatile or not perform as well as value stocks or the stock market in general. |
■ | Holdings Risk. The Portfolio typically holds a limited number of stocks (generally 50 to 70). As a result, the appreciation or depreciation of any one security held by the Portfolio may have a greater impact on the Portfolio’s NAV than it would if the Portfolio invested in a larger number of securities. |
■ | Information Technology Sector Risk. Investment risks associated with investing in the information technology sector, in addition to other risks, include the intense competition to which information technology companies may be subject; the dramatic and often unpredictable changes in growth rates and competition for qualified personnel among information technology companies; effects on profitability from being heavily dependent on patent and intellectual property rights and the loss or impairment of those rights; obsolescence of existing technology; general economic conditions; and government regulation. |
■ | Large Company Risk. Large-capitalization companies may go in and out of favor based on market and economic conditions. Large-capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large-capitalization companies could trail the returns on investments in securities of smaller companies. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Sector Risk. At times, the Portfolio may have a significant portion of its assets invested in securities of companies conducting business in a broadly related group of industries within an economic sector. Individual sectors may be more volatile, and may perform differently, than the broader market. Companies in the same economic sector may be similarly affected by economic or market events, making the Portfolio more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly. |
54 Prospectus | Global/International Portfolios |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10 Years |
Class II | 25.93% | 8.06% | 8.34% |
Indexes | |||
MSCI World Index (reflects no deduction for fees, expenses or taxes) | 27.67% | 8.74% | 9.47% |
Morningstar World Large Stock Category Average (net of fees and expenses) | 25.68% | 8.10% | 8.59% |
Global/International
Portfolios |
Prospectus 55 |
56 Prospectus | Global/International Portfolios |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.85% |
Distribution and Service (12b-1) Fees | 0.25% |
Other Expenses | 0.06% |
Total Annual Portfolio Operating Expenses | 1.16% |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $118 | $368 | $638 | $1,409 |
Global/International
Portfolios |
Prospectus 57 |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Depositary Receipts Risk. Investments in depositary receipts (including American Depositary Receipts, European Depositary Receipts and Global Depositary Receipts) generally are subject to the same risks of investing in the foreign securities that they evidence or into which they may be converted. |
■ | Derivatives Risk. The use of derivatives presents several risks, including the risk that these instruments may change in value in a manner that adversely affects the Portfolio’s NAV. Derivatives can be highly complex, can create investment leverage, may perform in unanticipated ways and may be highly volatile, and the Portfolio could lose more than the amount it invests. Derivatives may be difficult to value and, depending on the instrument, may at times be highly illiquid, and the Portfolio may not be able to close out or sell a derivative position at a particular time or at an anticipated price. Moreover, some derivatives are more sensitive to interest rate changes and market price fluctuations than others. To the extent the judgment of IICO as to certain anticipated price movements is incorrect, the risk of loss may be greater than if the derivative technique(s) had not been used. When used for hedging, the change in value of the derivative also may not correlate perfectly with the security or other risk being hedged. Suitable derivatives may not be available in all circumstances, and there can be no assurance that the Portfolio will use derivatives to reduce exposure to other risks when that might be beneficial. Derivatives also may be subject to counterparty credit risk, which includes the risk that the Portfolio may sustain a loss as a result of the insolvency or bankruptcy of, or other non-compliance with the terms in the agreement for the derivatives documentation by, another party to the transaction. When the Portfolio uses derivatives, it will provide margin or collateral bilaterally and/or segregate cash or other liquid assets in a manner that satisfies contractual undertakings and regulatory requirements. The need to provide margin or collateral and/or segregate assets could limit the Portfolio’s ability to pursue other opportunities as they arise. Ongoing changes to regulation of the derivatives markets and potential changes in the regulation of funds using derivatives instruments could change the Portfolio’s opportunities to pursue its investment strategies. |
■ | Emerging Market Risk. Investments in countries with emerging economies or securities markets may carry greater risk than investments in more developed countries. Political and economic structures in many such countries may be undergoing significant evolution and rapid development, and such countries may lack the social, political and economic stability characteristics of more developed countries. Investments in securities issued in these countries may be more volatile and less liquid than securities issued in more developed countries. Emerging markets are more susceptible to capital controls, governmental interference, local taxes being imposed on international investments, restrictions on gaining access to sales proceeds, and less efficient trading markets. |
■ | Foreign Currency Exchange Transactions and Forward Foreign Currency Contracts Risk. The Portfolio may use foreign currency exchange transactions and forward foreign currency contracts to hedge certain market risks |
58 Prospectus | Global/International Portfolios |
(such as interest rates, currency exchange rates and broad or specific market movement). These investment techniques involve a number of risks, including the possibility of default by the counterparty to the transaction and, to the extent IICO's judgment as to certain market movements is incorrect, the risk of losses that are greater than if the investment technique had not been used. |
■ | Foreign Currency Risk. Foreign securities may be denominated in foreign currencies. The value of the Portfolio’s investments, as measured in U.S. dollars, may be unfavorably affected by changes in foreign currency exchange rates and exchange control regulations. Currency markets generally are not as regulated as securities markets. |
■ | Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the company’s operations, products or services in those foreign markets. As a result, a company’s domicile and/or the markets in which the company’s securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the company’s products or services are sold. |
■ | Foreign Securities Risk. Investing in foreign securities involves a number of economic, financial, legal and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending upon the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other operational delays. The risks may be exacerbated in connection with investments in emerging markets. World markets, or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
■ | Large Company Risk. Large-capitalization companies may go in and out of favor based on market and economic conditions. Large-capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large-capitalization companies could trail the returns on investments in securities of smaller companies. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Regional Focus Risk. Focusing on a particular geographical region or country involves increased currency, political, regulatory and other risks. To the extent the Portfolio invests a significant portion of its assets in a particular geographical region or country, economic, political, social and environmental conditions in that region or country will have a greater effect on Portfolio performance than they would in a more geographically diversified equity fund and the Portfolio’s performance may be more volatile than the performance of a more geographically diversified fund. See Market Risk. |
■ | Theme Risk. Because the Portfolio’s investment strategy incorporates the identification of themes, the Portfolio’s performance may suffer if IICO does not correctly identify such themes or if a theme develops in an unanticipated way. |
Global/International
Portfolios |
Prospectus 59 |
■ | Value Stock Risk. Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor and, in the opinion of IICO, undervalued. The value of a security believed by IICO to be undervalued may never reach what is believed to be its full value; such security’s value may decrease or such security may be appropriately priced. |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10 Years |
Class II | 18.69% | 3.77% | 5.43% |
Indexes | |||
MSCI EAFE Index (reflects no deduction for fees, expenses or taxes) | 22.01% | 5.67% | 5.50% |
Morningstar Foreign Large Blend Category Average (net of fees and expenses) | 21.59% | 5.37% | 5.15% |
60 Prospectus | Global/International Portfolios |
Global/International
Portfolios |
Prospectus 61 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | ||
(expenses that you pay each year as a % of the value of your investment) | Class I | Class II |
Management Fees | 0.70% | 0.70% |
Distribution and Service (12b-1) Fees | 0.00% | 0.25% |
Other Expenses1 | 0.07% | 0.07% |
Total Annual Portfolio Operating Expenses2 | 0.77% | 1.02% |
1 | Other Expenses includes the expenses of Ivy VIP ASF II, Ltd., a wholly-owned subsidiary of the Portfolio organized in the Cayman Islands. |
2 | Through April 30, 2021, Ivy Distributors, Inc. (IDI), the Portfolio’s distributor, and/or Waddell & Reed Services Company (doing business as WI Services Company (WISC)), the Portfolio’s transfer agent, have contractually agreed to reimburse sufficient fees to ensure that the total annual ordinary portfolio operating expenses (which would exclude interest, taxes, brokerage commissions, acquired fund fees and expenses and extraordinary expenses, if any) of the Class I shares are at all times equal to the total annual ordinary portfolio operating expenses of the Class II shares less 0.25%, as calculated at the end of each month. Prior to that date, the expense limitation may not be terminated without the consent of the Board of Trustees (Board). |
1 Year | 3 Years | 5 Years | 10 Years | |
Class I | $ 79 | $ 246 | $ 428 | $ 954 |
Class II | 104 | 325 | 563 | 1,248 |
62 Prospectus | Specialty Portfolios |
Specialty
Portfolios |
Prospectus 63 |
■ | Commodities Risk. Commodity trading, including trading in precious metals, generally is considered speculative because of the significant potential for investment loss. Among the factors that could affect the value of the Portfolio’s investments in commodities are resource availability, commodity price volatility, speculation in the commodities markets, cyclical economic conditions, sudden political events and adverse international monetary policies. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Also, the Portfolio may pay more to store and accurately value its commodity holdings than it does with its other portfolio investments. Moreover, under the federal tax law, the Portfolio may not derive more than 10% of its annual gross income from gains (without regard to losses) resulting from selling or otherwise disposing of commodities (and other “non-qualifying” income). Accordingly, the Portfolio may be required to hold its commodities or to sell them at a loss, or to sell portfolio securities at a gain, when for investment reasons it would not otherwise do so. |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Credit Risk. An issuer of a fixed-income obligation may not make payments on the obligation when due or may default on its obligation. There also is the risk that an issuer could suffer adverse changes in its financial condition that could lower the credit quality of a security. This could lead to greater volatility in the price of the security, could affect the security’s liquidity, and could make it more difficult to sell. A downgrade or default affecting any of the Portfolio’s securities could affect the Portfolio’s performance. In general, the longer the maturity and the lower the credit quality of a bond, the more sensitive it is to credit risk. |
■ | Emerging Market Risk. Investments in countries with emerging economies or securities markets may carry greater risk than investments in more developed countries. Political and economic structures in many such countries may be undergoing significant evolution and rapid development, and such countries may lack the social, political and economic stability characteristics of more developed countries. Investments in securities issued in these countries may be more volatile and less liquid than securities issued in more developed countries. Emerging markets are more susceptible to capital controls, governmental interference, local taxes being imposed on international investments, restrictions on gaining access to sales proceeds, and less efficient trading markets. |
■ | Foreign Currency Risk. Foreign securities may be denominated in foreign currencies. The value of the Portfolio’s investments, as measured in U.S. dollars, may be unfavorably affected by changes in foreign currency exchange rates and exchange control regulations. Currency markets generally are not as regulated as securities markets. |
■ | Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the company’s operations, products or services in those foreign markets. As a result, a company’s domicile and/or the markets in which the company’s securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the company’s products or services are sold. |
■ | Foreign Securities Risk. Investing in foreign securities involves a number of economic, financial, legal and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending upon the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other operational delays. The risks may be exacerbated in connection with investments in emerging markets. World markets, or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
■ | Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may be more volatile or not perform as well as value stocks or the stock market in general. |
64 Prospectus | Specialty Portfolios |
■ | Holdings Risk. The Portfolio typically holds a limited number of stocks (generally 50 to 70). As a result, the appreciation or depreciation of any one security held by the Portfolio may have a greater impact on the Portfolio’s NAV than it would if the Portfolio invested in a larger number of securities. |
■ | Interest Rate Risk. A rise in interest rates may cause a decline in the value of the Portfolio’s securities, especially securities with longer maturities. Typically, the longer the maturity or duration of a debt security, the greater the effect a change in interest rates could have on the security’s price. Thus, the sensitivity of the Portfolio’s debt securities to interest rate risk will increase with any increase in the duration of those securities. A decline in interest rates may cause the Portfolio to experience a decline in its income. Interest rates in the U.S. recently have been at, and remain near, historic lows, which may increase the Portfolio’s exposure to risks associated with rising rates. The Portfolio may be subject to heightened interest rate risk as a result of a rise or anticipated rise in interest rates. In addition, a general rise in rates may result in decreased liquidity and increased volatility in the fixed-income markets generally. |
■ | Large Company Risk. Large-capitalization companies may go in and out of favor based on market and economic conditions. Large-capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large-capitalization companies could trail the returns on investments in securities of smaller companies. |
■ | Liquidity Risk. Liquidity generally is related to the market trading volume for a particular security. Securities that have relatively less liquidity may trade at a discount from comparable, more liquid investments, and may be subject to wider fluctuations in market value. Such securities may be more difficult to dispose of at their recorded values and are subject to increased spreads and volatility. Also, the Portfolio may not be able to dispose of illiquid, or relatively less liquid, securities when that would be beneficial at a favorable time or price. Certain investments that generally were liquid when the Portfolio purchased them may become relatively less liquid, or even deemed illiquid, sometimes abruptly. |
■ | Loan Risk. In addition to the risks typically associated with fixed-income securities, loans carry other risks, including the risk of insolvency of the lending bank or other intermediary. The risks associated with loans are similar to the risks of low-rated debt securities or “junk” bonds since loans typically are below investment-grade. Loans may be unsecured or not fully collateralized, may be subject to restrictions on resale, may be difficult to value, sometimes trade infrequently on the secondary market and generally are subject to extended settlement periods. Any of these factors may impair the Portfolio’s ability to sell or realize promptly the full value of its loans in the event of a need to liquidate such loans. Accordingly, loans that have been sold may not be immediately available to meet redemptions. Extended trade settlement periods may result in cash not being immediately available to the Portfolio. As a result, the Portfolio may have to sell other investments or engage in borrowing transactions to raise cash to meet its obligations. Interests in secured loans have the benefit of collateral and, typically, of restrictive covenants limiting the ability of the borrower to further encumber its assets. There is a risk that the value of the collateral securing a loan in which the Portfolio has an interest may decline and that the collateral may not be sufficient to cover the amount owed on the loan. In the event the borrower defaults, the Portfolio’s access to the collateral may be limited or delayed by bankruptcy and other insolvency laws. These risks could cause the Portfolio to lose income or principal on a particular investment, which could affect the Portfolio’s returns. In addition, loans also are subject to the risk that a court could subordinate the loan to presently existing or future indebtedness or take other action detrimental to the holders of the loan. Further, in the event of a default, second or lower lien secured loans will generally be paid only if the value of the collateral exceeds the amount of the borrower’s obligations to the senior secured lenders, and the remaining collateral may not be sufficient to cover the full amount owed on the loan in which the Portfolio has an interest. Loans made to finance highly leveraged companies or to finance corporate acquisitions or other transactions may be especially vulnerable to adverse changes in economic or market conditions. |
With loan assignments, as an assignee, the Portfolio normally will succeed to all rights and obligations of its assignor with respect to the portion of the loan that is being assigned. However, the rights and obligations acquired by the purchaser of a loan assignment may differ from, and be more limited than, those held by the original lenders or the assignor. With loan participations, the Portfolio may not be able to control the exercise of any remedies that the lender would have under the loan and likely would not have any rights against the borrower directly, so that delays and expense may be greater than those that would be involved if the Portfolio could enforce its rights directly against the borrower. |
■ | Low-Rated Securities Risk. In general, low-rated debt securities (commonly referred to as “high-yield” or “junk” bonds) offer higher yields due to the increased risk that the issuer will be unable to meet its obligations on interest or principal payments at the time called for by the debt instrument. For this reason, these securities are considered speculative and could significantly weaken the Portfolio’s returns. In adverse economic or other circumstances, issuers of these low-rated securities and obligations are more likely to have difficulty making principal and interest payments than issuers of higher-rated securities and obligations. In addition, these low-rated securities and obligations may fluctuate more widely in price and yield than higher-rated securities and obligations and may fall in price during times |
Specialty
Portfolios |
Prospectus 65 |
when the economy is weak or is expected to become weak. Issuers of securities that are in default or have defaulted may fail to resume principal or interest payments, in which case the Portfolio may lose its entire investment. The creditworthiness of issuers of low-rated securities may be more complex to analyze than that of issuers of investment-grade debt securities. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Mortgage-Backed and Asset-Backed Securities Risk. Mortgage-backed and asset-backed securities are subject to prepayment risk and extension risk. When interest rates decline, unscheduled prepayments can be expected to accelerate, shortening the average lives of such securities, and the Portfolio may be required to reinvest the proceeds of the prepayments at the lower interest rates then available. Unscheduled prepayments also would limit the potential for capital appreciation on mortgage-backed and asset-backed securities, thereby reducing the Portfolio’s income. Conversely, when interest rates rise, the values of mortgage-backed and asset-backed securities generally fall. Rising interest rates typically result in decreased prepayments and longer average lives of such securities. This could cause the value of such securities to be more volatile or decline more than other fixed-income securities, and may magnify the effect of the rate increase on the price of such securities. |
Certain mortgage-backed securities are U.S. government securities. See U.S. Government Securities Risk for the risks of these types of securities. For non-U.S. government securities, there is the risk that payments on a security will not be made when due, or the value of such security will decline, because the security is not issued or guaranteed as to principal or interest by the U.S. government or by agencies or authorities controlled or supervised by and acting as instrumentalities of the U.S. government or supported by the right of the issuer to borrow from the U.S. government. |
■ | Subsidiary Investment Risk. By investing in the Subsidiary, the Portfolio is exposed to the risks associated with the Subsidiary's investments. The Subsidiary is not registered under the Investment Company Act of 1940, as amended (1940 Act), and is not subject to all of the investor protections of the 1940 Act. Thus, the Portfolio, as an investor in the Subsidiary, would not have all of the protections offered to investors in registered investment companies. However, because the Portfolio wholly owns and controls the Subsidiary, and the Portfolio and Subsidiary are managed by IICO, it is unlikely that the Subsidiary would take action contrary to the interests of the Portfolio or the Portfolio’s shareholders. In addition, changes in the laws of the U.S. and/or the Cayman Islands, under which the Portfolio and the Subsidiary are organized, respectively, could result in the inability of the Portfolio and/or the Subsidiary to operate as intended and could negatively affect the Portfolio and its shareholders. Although, under the federal tax law, the Portfolio may not derive more than 10% of its annual gross income from gains resulting from selling or otherwise disposing of commodities (and other “non-qualifying” income), the Portfolio has received an opinion of counsel, which is not binding on the Internal Revenue Service (IRS) or the courts, that income the Portfolio receives from the Subsidiary should constitute “qualifying” income. |
■ | U.S. Government Securities Risk. Certain U.S. government securities, such as Treasury securities and securities issued by Ginnie Mae, are backed by the full faith and credit of the U.S. government. Other U.S. government securities, such as securities issued by Fannie Mae, Freddie Mac and the FHLB, are not backed by the full faith and credit of the U.S. government and, instead, may be supported only by the credit of the issuer or by the right of the issuer to borrow from the Treasury. |
■ | Value Stock Risk. Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor and, in the opinion of IICO, undervalued. The value of a security believed by IICO to be undervalued may never reach what is believed to be its full value; such security’s value may decrease or such security may be appropriately priced. |
66 Prospectus | Specialty Portfolios |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10
Years (or Life of Class) |
Class I (began on 4-28-2017) | 22.08% | N/A | 9.87% |
Class II | 21.78% | 3.99% | 5.65% |
Indexes | |||
MSCI ACWI Index (reflects no deduction for fees, expenses or taxes) | 26.60% | 8.41% | 8.79% |
Morningstar World Allocation Category Average (net of fees and expenses) | 16.10% | 4.51% | 6.02% |
Specialty
Portfolios |
Prospectus 67 |
68 Prospectus | Specialty Portfolios |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.70% |
Distribution and Service (12b-1) Fees | 0.25% |
Other Expenses | 0.06% |
Total Annual Portfolio Operating Expenses | 1.01% |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $103 | $322 | $558 | $1,236 |
Specialty
Portfolios |
Prospectus 69 |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Credit Risk. An issuer of a fixed-income obligation may not make payments on the obligation when due or may default on its obligation. There also is the risk that an issuer could suffer adverse changes in its financial condition that could lower the credit quality of a security. This could lead to greater volatility in the price of the security, could affect the security’s liquidity, and could make it more difficult to sell. A downgrade or default affecting any of the Portfolio’s securities could affect the Portfolio’s performance. In general, the longer the maturity and the lower the credit quality of a bond, the more sensitive it is to credit risk. |
■ | Dividend-Paying Stock Risk. Dividend-paying stocks may fall out of favor with investors and underperform non-dividend paying stocks and the market as a whole over any period of time. In addition, there is no guarantee that the companies in which the Portfolio invests will declare dividends in the future or that dividends, if declared, will remain at current levels or increase over time. The amount of any dividend a company may pay may fluctuate significantly. In addition, the value of dividend-paying common stocks can decline when interest rates rise as other investments become more attractive to investors. This risk may be greater due to the current period of historically low interest rates. |
■ | Fixed-Income Market Risk. The prices of the Portfolio’s fixed-income securities respond to economic developments, particularly interest rate changes, as well as to perceptions about the creditworthiness of individual issuers. Generally, the Portfolio’s fixed-income securities will decrease in value if interest rates rise and vice versa. In a low interest rate environment, risks associated with rising rates are heightened. Rising interest rates tend to decrease liquidity, increase trading costs and increase volatility, all of which may make portfolio management more difficult and costly to the Portfolio and its shareholders. In the case of foreign securities, price fluctuations will reflect international economic and political events, as well as changes in currency valuations relative to the U.S. dollar. Other factors may materially and adversely affect the market price and yield of such fixed-income securities, including investor demand, changes in the financial condition of the applicable issuer, government fiscal policy and domestic or worldwide economic conditions. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
70 Prospectus | Specialty Portfolios |
■ | Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the company’s operations, products or services in those foreign markets. As a result, a company’s domicile and/or the markets in which the company’s securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the company’s products or services are sold. |
■ | Foreign Securities Risk. Investing in foreign securities involves a number of economic, financial, legal and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending upon the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other operational delays. The risks may be exacerbated in connection with investments in emerging markets. World markets, or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
■ | Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may be more volatile or not perform as well as value stocks or the stock market in general. |
■ | Holdings Risk. The Portfolio typically holds a limited number of stocks (generally 45 to 55). As a result, the appreciation or depreciation of any one security held by the Portfolio may have a greater impact on the Portfolio’s NAV than it would if the Portfolio invested in a larger number of securities. |
■ | Interest Rate Risk. A rise in interest rates may cause a decline in the value of the Portfolio’s securities, especially securities with longer maturities. Typically, the longer the maturity or duration of a debt security, the greater the effect a change in interest rates could have on the security’s price. Thus, the sensitivity of the Portfolio’s debt securities to interest rate risk will increase with any increase in the duration of those securities. A decline in interest rates may cause the Portfolio to experience a decline in its income. Interest rates in the U.S. recently have been at, and remain near, historic lows, which may increase the Portfolio’s exposure to risks associated with rising rates. The Portfolio may be subject to heightened interest rate risk as a result of a rise or anticipated rise in interest rates. In addition, a general rise in rates may result in decreased liquidity and increased volatility in the fixed-income markets generally. |
■ | Large Company Risk. Large-capitalization companies may go in and out of favor based on market and economic conditions. Large-capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large-capitalization companies could trail the returns on investments in securities of smaller companies. |
■ | Low-Rated Securities Risk. In general, low-rated debt securities (commonly referred to as “high-yield” or “junk” bonds) offer higher yields due to the increased risk that the issuer will be unable to meet its obligations on interest or principal payments at the time called for by the debt instrument. For this reason, these securities are considered speculative and could significantly weaken the Portfolio’s returns. In adverse economic or other circumstances, issuers of these low-rated securities and obligations are more likely to have difficulty making principal and interest payments than issuers of higher-rated securities and obligations. In addition, these low-rated securities and obligations may fluctuate more widely in price and yield than higher-rated securities and obligations and may fall in price during times when the economy is weak or is expected to become weak. Issuers of securities that are in default or have defaulted may fail to resume principal or interest payments, in which case the Portfolio may lose its entire investment. The creditworthiness of issuers of low-rated securities may be more complex to analyze than that of issuers of investment-grade debt securities. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, |
Specialty
Portfolios |
Prospectus 71 |
multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Mid-Size Company Risk. Securities of mid-capitalization companies may be more vulnerable to adverse developments than those of larger companies due to such companies’ limited product lines, limited markets and financial resources and dependence upon a relatively small management group. Securities of mid-capitalization companies may be more volatile and less liquid than the securities of larger companies, and may be affected to a greater extent than other types of securities by the underperformance of a sector or during market downturns. |
■ | Preferred Stock Risk. Preferred stock is subject to issuer-specific and market risks applicable generally to equity securities. In addition, a company’s preferred securities generally pay dividends only after the company makes required payments to holders of its bonds and other debt. Preferred stock also is subject to credit risk with regard to the ability of the issuer to pay the dividend established upon issuance of the preferred stock. |
■ | Reinvestment Risk. A decline in interest rates may cause issuers to prepay higher-yielding securities held by the Portfolio, resulting in the Portfolio reinvesting in securities with lower yields, which may cause a decline in its income. |
■ | U.S. Government Securities Risk. Certain U.S. government securities, such as Treasury securities and securities issued by Ginnie Mae, are backed by the full faith and credit of the U.S. government. Other U.S. government securities, such as securities issued by Fannie Mae, Freddie Mac and the FHLB, are not backed by the full faith and credit of the U.S. government and, instead, may be supported only by the credit of the issuer or by the right of the issuer to borrow from the Treasury. |
■ | Value Stock Risk. Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor and, in the opinion of IICO, undervalued. The value of a security believed by IICO to be undervalued may never reach what is believed to be its full value; such security’s value may decrease or such security may be appropriately priced. |
Chart of Year-by-Year Returns |
as of
December 31 each year |
72 Prospectus | Specialty Portfolios |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10 Years |
Class II | 22.09% | 6.00% | 9.18% |
Indexes | |||
S&P 500 Index (reflects no deduction for fees, expenses or taxes) | 31.49% | 11.70% | 13.56% |
Bloomberg Barclays U.S. Agg Gov/Credit Index (reflects no deduction for fees, expenses or taxes) | 9.71% | 3.23% | 3.96% |
Morningstar Allocation--50% to 70% Equity Category Average (net of fees and expenses) | 19.23% | 6.22% | 7.90% |
Specialty
Portfolios |
Prospectus 73 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | ||
(expenses that you pay each year as a % of the value of your investment) | Class I | Class II |
Management Fees | 0.85% | 0.85% |
Distribution and Service (12b-1) Fees | 0.00% | 0.25% |
Other Expenses | 0.19% | 0.19% |
Total Annual Portfolio Operating Expenses1 | 1.04% | 1.29% |
1 | Through April 30, 2021, Ivy Distributors, Inc. (IDI), the Portfolio’s distributor, and/or Waddell & Reed Services Company (doing business as WI Services Company (WISC)), the Portfolio’s transfer agent, have contractually agreed to reimburse sufficient fees to ensure that the total annual ordinary portfolio operating expenses (which would exclude interest, taxes, brokerage commissions, acquired fund fees and expenses and extraordinary expenses, if any) of the Class I shares are at all times equal to the total annual ordinary portfolio operating expenses of the Class II shares less 0.25%, as calculated at the end of each month. Prior to that date, the expense limitation may not be terminated without the consent of the Board of Trustees (Board). |
1 Year | 3 Years | 5 Years | 10 Years | |
Class I | $106 | $ 331 | $ 574 | $ 1,271 |
Class II | 131 | 409 | 708 | 1,556 |
74 Prospectus | Specialty Portfolios |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Concentration Risk. Because the Portfolio invests more than 25% of its total assets in the energy-related industry, the Portfolio’s performance may be more susceptible to a single economic, regulatory or technological occurrence than a fund that does not concentrate its investments in this industry. Securities of companies within specific industries or sectors of the economy may periodically perform differently than the overall market. In addition, the Portfolio’s performance may be more volatile than an investment in a portfolio of broad market securities and may underperform the market as a whole, due to the relatively limited number of issuers of energy-related securities. |
■ | Energy Sector Risk. Investment risks associated with investing in energy securities, in addition to other risks, include price fluctuation caused by real and perceived inflationary trends and political developments, the cost assumed in complying with environmental safety regulations, demand of energy fuels, energy conservation, the success of exploration projects, and tax and other governmental regulations. |
■ | Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the company’s operations, products or services in those foreign markets. As a result, a company’s domicile and/or the markets in which the company’s securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the company’s products or services are sold. |
■ | Foreign Securities Risk. Investing in foreign securities involves a number of economic, financial, legal and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending upon the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other operational delays. The risks may be exacerbated in connection with investments in emerging markets. World markets, or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for |
Specialty
Portfolios |
Prospectus 75 |
securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
■ | Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may be more volatile or not perform as well as value stocks or the stock market in general. |
■ | Holdings Risk. The Portfolio typically holds a limited number of stocks (generally 30 to 50). As a result, the appreciation or depreciation of any one security held by the Portfolio may have a greater impact on the Portfolio’s NAV than it would if the Portfolio invested in a larger number of securities. |
■ | Initial Public Offering (IPO) Risk. Any positive effect of investments in IPOs may not be sustainable because of a number of factors. Namely, the Portfolio may not be able to buy shares in some IPOs, or may be able to buy only a small number of shares. Also, the performance of IPOs generally is volatile, and is dependent on market psychology and economic conditions. To the extent that IPOs have a significant positive impact on the Portfolio’s performance, this may not be able to be replicated in the future. The relative performance impact of IPOs also is likely to decline as the Portfolio grows. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Non-Diversification Risk. The Portfolio is a “non-diversified” mutual fund and, as such, its investments are not required to meet certain diversification requirements under federal law. Compared with “diversified” funds, the Portfolio may invest a greater percentage of its assets in the securities of an issuer. Thus, the Portfolio may hold fewer securities than other funds. A decline in the value of those investments would cause the Portfolio’s overall value to decline to a greater degree than if the Portfolio held more diversified holdings. |
■ | Value Stock Risk. Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor and, in the opinion of IICO, undervalued. The value of a security believed by IICO to be undervalued may never reach what is believed to be its full value; such security’s value may decrease or such security may be appropriately priced. |
76 Prospectus | Specialty Portfolios |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10
Years (or Life of Class) |
Class I (began on 4-28-2017) | 3.74% | N/A | -12.68% |
Class II | 3.48% | -9.01% | -2.19% |
Indexes | |||
S&P 1500 Energy Sector Index (reflects no deduction for fees, expenses or taxes) | 10.05% | -2.90% | 2.61% |
Morningstar Equity Energy Category Average (net of fees and expenses) | 7.25% | -8.78% | -2.58% |
Specialty
Portfolios |
Prospectus 77 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.85% |
Distribution and Service (12b-1) Fees | 0.25% |
Other Expenses | 0.14% |
Total Annual Portfolio Operating Expenses | 1.24% |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $126 | $393 | $681 | $1,500 |
78 Prospectus | Specialty Portfolios |
■ | Concentration Risk. Because the Portfolio invests more than 25% of its total assets in the energy-related industry, the Portfolio’s performance may be more susceptible to a single economic, regulatory or technological occurrence than a fund that does not concentrate its investments in this industry. Securities of companies within specific industries or sectors of the economy may periodically perform differently than the overall market. In addition, the Portfolio’s performance may be more volatile than an investment in a portfolio of broad market securities and may underperform the market as a whole, due to the relatively limited number of issuers of energy-related securities. |
■ | Commodities Risk. Commodity trading, including trading in precious metals, generally is considered speculative because of the significant potential for investment loss. Among the factors that could affect the value of the Portfolio’s investments in commodities are resource availability, commodity price volatility, speculation in the commodities markets, cyclical economic conditions, sudden political events and adverse international monetary policies. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Also, the Portfolio may pay more to store and accurately value its commodity holdings than it does with its other portfolio investments. Moreover, under the federal tax law, the Portfolio may not derive more than 10% of its annual gross income from gains (without regard to losses) resulting from selling or otherwise disposing of commodities (and other “non-qualifying” income). Accordingly, the Portfolio may be required to hold its commodities or to sell them at a loss, or to sell portfolio securities at a gain, when for investment reasons it would not otherwise do so. |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Emerging Market Risk. Investments in countries with emerging economies or securities markets may carry greater risk than investments in more developed countries. Political and economic structures in many such countries may be undergoing significant evolution and rapid development, and such countries may lack the social, political and economic stability characteristics of more developed countries. Investments in securities issued in these countries may |
Specialty
Portfolios |
Prospectus 79 |
be more volatile and less liquid than securities issued in more developed countries. Emerging markets are more susceptible to capital controls, governmental interference, local taxes being imposed on international investments, restrictions on gaining access to sales proceeds, and less efficient trading markets. |
■ | Energy Sector Risk. Investment risks associated with investing in energy securities, in addition to other risks, include price fluctuation caused by real and perceived inflationary trends and political developments, the cost assumed in complying with environmental safety regulations, demand of energy fuels, energy conservation, the success of exploration projects, and tax and other governmental regulations. |
■ | Foreign Currency Exchange Transactions and Forward Foreign Currency Contracts Risk. The Portfolio may use foreign currency exchange transactions and forward foreign currency contracts to hedge certain market risks (such as interest rates, currency exchange rates and broad or specific market movement). These investment techniques involve a number of risks, including the possibility of default by the counterparty to the transaction and, to the extent IICO's judgment as to certain market movements is incorrect, the risk of losses that are greater than if the investment technique had not been used. |
■ | Foreign Currency Risk. Foreign securities may be denominated in foreign currencies. The value of the Portfolio’s investments, as measured in U.S. dollars, may be unfavorably affected by changes in foreign currency exchange rates and exchange control regulations. Currency markets generally are not as regulated as securities markets. |
■ | Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the company’s operations, products or services in those foreign markets. As a result, a company’s domicile and/or the markets in which the company’s securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the company’s products or services are sold. |
■ | Foreign Securities Risk. Investing in foreign securities involves a number of economic, financial, legal and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending upon the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other operational delays. The risks may be exacerbated in connection with investments in emerging markets. World markets, or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
■ | Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may be more volatile or not perform as well as value stocks or the stock market in general. |
■ | Holdings Risk. The Portfolio typically holds a limited number of stocks (generally 30 to 60). As a result, the appreciation or depreciation of any one security held by the Portfolio may have a greater impact on the Portfolio’s NAV than it would if the Portfolio invested in a larger number of securities. |
■ | Liquidity Risk. Liquidity generally is related to the market trading volume for a particular security. Securities that have relatively less liquidity may trade at a discount from comparable, more liquid investments, and may be subject to wider fluctuations in market value. Such securities may be more difficult to dispose of at their recorded values and are subject to increased spreads and volatility. Also, the Portfolio may not be able to dispose of illiquid, or relatively less liquid, securities when that would be beneficial at a favorable time or price. Certain investments that generally were liquid when the Portfolio purchased them may become relatively less liquid, or even deemed illiquid, sometimes abruptly. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its |
80 Prospectus | Specialty Portfolios |
assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Materials Sector Risk. Investment risks associated with investing in securities in the materials sector, in addition to other risks, include adverse effects from commodity price volatility, exchange rates, import controls and increased competition; the possibility that production of industrial materials will exceed demand as a result of overbuilding or economic downturns, leading to poor investment returns; risk for environmental damage and product liability claims; and adverse effects from depletion of resources, technical progress, labor relations and government regulations. |
■ | Natural Resources Industry Risk. Investment risks associated with investing in securities of natural resources companies, in addition to other risks, include price fluctuation caused by real and perceived inflationary trends and political developments, the cost assumed by natural resource companies in complying with environmental and safety regulations, changes in supply of, or demand for, various natural resources, changes in energy prices, environmental incidents, energy conservation, the success of exploration projects, changes in commodity prices, and special risks associated with natural or man-made disasters. Securities of natural resource companies that are dependent on a single commodity, or are concentrated in a single commodity sector, may exhibit high volatility attributable to commodity prices. |
■ | Non-Diversification Risk. The Portfolio is a “non-diversified” mutual fund and, as such, its investments are not required to meet certain diversification requirements under federal law. Compared with “diversified” funds, the Portfolio may invest a greater percentage of its assets in the securities of an issuer. Thus, the Portfolio may hold fewer securities than other funds. A decline in the value of those investments would cause the Portfolio’s overall value to decline to a greater degree than if the Portfolio held more diversified holdings. |
■ | Sector Risk. At times, the Portfolio may have a significant portion of its assets invested in securities of companies conducting business in a broadly related group of industries within an economic sector. Individual sectors may be more volatile, and may perform differently, than the broader market. Companies in the same economic sector may be similarly affected by economic or market events, making the Portfolio more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly. |
■ | Value Stock Risk. Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor and, in the opinion of IICO, undervalued. The value of a security believed by IICO to be undervalued may never reach what is believed to be its full value; such security’s value may decrease or such security may be appropriately priced. |
Specialty
Portfolios |
Prospectus 81 |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10 Years |
Class II | 9.46% | -3.63% | -3.10% |
Indexes | |||
S&P North American Natural Resources Sector Index (reflects no deduction for fees, expenses or taxes) | 17.63% | -1.41% | 1.39% |
Morningstar Natural Resources Category Average (net of fees and expenses) | 14.95% | 1.39% | 2.89% |
82 Prospectus | Specialty Portfolios |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | ||
(expenses that you pay each year as a % of the value of your investment) | Class I | Class II |
Management Fees | 0.85% | 0.85% |
Distribution and Service (12b-1) Fees | 0.00% | 0.25% |
Other Expenses | 0.05% | 0.05% |
Total Annual Portfolio Operating Expenses1 | 0.90% | 1.15% |
1 | Through April 30, 2021, Ivy Distributors, Inc. (IDI), the Portfolio’s distributor, and/or Waddell & Reed Services Company (doing business as WI Services Company (WISC)), the Portfolio’s transfer agent, have contractually agreed to reimburse sufficient fees to ensure that the total annual ordinary portfolio operating expenses (which would exclude interest, taxes, brokerage commissions, acquired fund fees and expenses and extraordinary expenses, if any) of the Class I shares are at all times equal to the total annual ordinary portfolio operating expenses of the Class II shares less 0.25%, as calculated at the end of each month. Prior to that date, the expense limitation may not be terminated without the consent of the Board of Trustees (Board). |
1 Year | 3 Years | 5 Years | 10 Years | |
Class I | $ 92 | $ 287 | $498 | $ 1,108 |
Class II | 117 | 365 | 633 | 1,398 |
Specialty
Portfolios |
Prospectus 83 |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Concentration Risk. Because the Portfolio invests more than 25% of its total assets in the science and technology-related industry, the Portfolio’s performance may be more susceptible to a single economic, regulatory or technological occurrence than a fund that does not concentrate its investments in this industry. Securities of companies within specific industries or sectors of the economy may periodically perform differently than the overall market. In addition, the Portfolio’s performance may be more volatile than an investment in a portfolio of broad market securities and may underperform the market as a whole, due to the relatively limited number of issuers of science and technology-related securities. |
■ | Emerging Market Risk. Investments in countries with emerging economies or securities markets may carry greater risk than investments in more developed countries. Political and economic structures in many such countries may be undergoing significant evolution and rapid development, and such countries may lack the social, political and economic stability characteristics of more developed countries. Investments in securities issued in these countries may be more volatile and less liquid than securities issued in more developed countries. Emerging markets are more susceptible to capital controls, governmental interference, local taxes being imposed on international investments, restrictions on gaining access to sales proceeds, and less efficient trading markets. |
■ | Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the company’s operations, products or services in those foreign markets. As a result, a company’s domicile and/or the markets in which the company’s securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the company’s products or services are sold. |
■ | Foreign Securities Risk. Investing in foreign securities involves a number of economic, financial, legal and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending upon the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other |
84 Prospectus | Specialty Portfolios |
operational delays. The risks may be exacerbated in connection with investments in emerging markets. World markets, or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
■ | Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may be more volatile or not perform as well as value stocks or the stock market in general. |
■ | Holdings Risk. The Portfolio typically holds a limited number of stocks (generally 40 to 60). As a result, the appreciation or depreciation of any one security held by the Portfolio may have a greater impact on the Portfolio’s NAV than it would if the Portfolio invested in a larger number of securities. |
■ | Information Technology Sector Risk. Investment risks associated with investing in the information technology sector, in addition to other risks, include the intense competition to which information technology companies may be subject; the dramatic and often unpredictable changes in growth rates and competition for qualified personnel among information technology companies; effects on profitability from being heavily dependent on patent and intellectual property rights and the loss or impairment of those rights; obsolescence of existing technology; general economic conditions; and government regulation. |
■ | Large Company Risk. Large-capitalization companies may go in and out of favor based on market and economic conditions. Large-capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large-capitalization companies could trail the returns on investments in securities of smaller companies. |
■ | Liquidity Risk. Liquidity generally is related to the market trading volume for a particular security. Securities that have relatively less liquidity may trade at a discount from comparable, more liquid investments, and may be subject to wider fluctuations in market value. Such securities may be more difficult to dispose of at their recorded values and are subject to increased spreads and volatility. Also, the Portfolio may not be able to dispose of illiquid, or relatively less liquid, securities when that would be beneficial at a favorable time or price. Certain investments that generally were liquid when the Portfolio purchased them may become relatively less liquid, or even deemed illiquid, sometimes abruptly. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Mid-Size Company Risk. Securities of mid-capitalization companies may be more vulnerable to adverse developments than those of larger companies due to such companies’ limited product lines, limited markets and financial resources and dependence upon a relatively small management group. Securities of mid-capitalization companies may be more volatile and less liquid than the securities of larger companies, and may be affected to a greater extent than other types of securities by the underperformance of a sector or during market downturns. |
■ | Non-Diversification Risk. The Portfolio is a “non-diversified” mutual fund and, as such, its investments are not required to meet certain diversification requirements under federal law. Compared with “diversified” funds, the Portfolio may invest a greater percentage of its assets in the securities of an issuer. Thus, the Portfolio may hold fewer securities than other funds. A decline in the value of those investments would cause the Portfolio’s overall value to decline to a greater degree than if the Portfolio held more diversified holdings. |
Specialty
Portfolios |
Prospectus 85 |
■ | Science and Technology Industry Risk. Investment risks associated with investing in science and technology securities, in addition to other risks, include: operating in rapidly changing fields, abrupt or erratic market movements, limited product lines, markets or financial resources, management that is dependent on a limited number of people, short product cycles, aggressive pricing of products and services, new market entrants and obsolescence of existing technology. In addition, these securities may be impacted by commodity and energy prices, which can be volatile, and may increase the volatility of these securities. |
■ | Small Company Risk. Securities of small-capitalization companies are subject to greater price volatility, lower trading volume and less liquidity due to, among other things, such companies’ small size, limited product lines, limited access to financing sources and limited management depth. In addition, the frequency and volume of trading of such securities may be less than is typical of larger companies, making them subject to wider price fluctuations and such securities may be affected to a greater extent than other types of securities by the underperformance of a sector or during market downturns. In some cases, there could be difficulties in selling securities of small-capitalization companies at the desired time. |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10
Years (or Life of Class) |
Class I (began on 4-28-2017) | 49.86% | N/A | 21.09% |
Class II | 49.48% | 13.04% | 14.97% |
Indexes | |||
S&P North American Technology Sector Index (reflects no deduction for fees, expenses or taxes) | 42.68% | 20.34% | 17.55% |
Morningstar Technology Category Average (net of fees and expenses) | 37.49% | 16.46% | 15.10% |
86 Prospectus | Specialty Portfolios |
Specialty
Portfolios |
Prospectus 87 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.90% |
Distribution and Service (12b-1) Fees | 0.25% |
Other Expenses | 0.20% |
Total Annual Portfolio Operating Expenses | 1.35% |
Fee Waiver and/or Expense Reimbursement1 | 0.09% |
Total Annual Portfolio Operating Expenses After Fee Waiver and/or Expense Reimbursement | 1.26% |
1 | Through April 30, 2021, Ivy Investment Management Company (IICO), the Portfolio’s investment manager has contractually agreed to reduce the management fees paid by the Portfolio by an annual rate of 0.09% of average daily net assets. Prior to that date, the reduction may not be terminated without the consent of the Board of Trustees (Board). |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $128 | $419 | $731 | $1,616 |
88 Prospectus | Specialty Portfolios |
■ | Company Risk. A company may be more volatile or perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. |
■ | Concentration Risk. Because the Portfolio invests more than 25% of its total assets in the real estate-related industry, the Portfolio’s performance may be more susceptible to a single economic, regulatory or technological occurrence than a fund that does not concentrate its investments in this industry. Securities of companies within specific industries or sectors of the economy may periodically perform differently than the overall market. In addition, the Portfolio’s performance may be more volatile than an investment in a portfolio of broad market securities and may underperform the market as a whole, due to the relatively limited number of issuers of real estate-related securities. |
■ | Holdings Risk. The Portfolio typically holds a limited number of stocks, and the Portfolio’s managers also tend to invest a significant portion of the Portfolio’s total assets in a limited number of stocks. As a result, the appreciation or depreciation of any one security held by the Portfolio may have a greater impact on the Portfolio’s NAV than it would if the Portfolio invested in a larger number of securities. |
■ | Income Risk. The risk that the Portfolio may experience a decline in its income due to falling interest rates, earnings declines, or income decline within a security. The amount and rate of distributions that the Portfolio’s shareholders receive are affected by the income that the Portfolio receives from its portfolio holdings. If the income is reduced, distributions by the Portfolio to shareholders may be less. |
■ | Interest Rate Risk. A rise in interest rates may cause a decline in the value of the Portfolio’s securities, especially securities with longer maturities. Typically, the longer the maturity or duration of a debt security, the greater the effect a change in interest rates could have on the security’s price. Thus, the sensitivity of the Portfolio’s debt securities to interest rate risk will increase with any increase in the duration of those securities. A decline in interest rates may cause the Portfolio to experience a decline in its income. Interest rates in the U.S. recently have been at, and remain near, historic lows, which may increase the Portfolio’s exposure to risks associated with rising rates. The Portfolio may be subject to heightened interest rate risk as a result of a rise or anticipated rise in interest rates. In addition, a general rise in rates may result in decreased liquidity and increased volatility in the fixed-income markets generally. |
■ | Management Risk. Portfolio performance is primarily dependent on Securian AM's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
Specialty
Portfolios |
Prospectus 89 |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Real Estate Industry Risk. Investment risks associated with investing in real estate securities, in addition to other risks, include rental income fluctuation, depreciation, property tax value changes, differences in real estate market values, overbuilding and extended vacancies, increased competition, operating expenses or zoning laws, costs of environmental clean-up or damages from natural disasters, cash flow fluctuations, and defaults by borrowers and tenants. |
■ | REIT-Related Risk. The value of the Portfolio’s securities of a REIT may be adversely affected by changes in the value of the REIT’s underlying property or the property secured by mortgages the REIT holds, loss of the REIT’s federal tax status or changes in laws and/or rules related to that status, or the REIT’s failure to maintain its exemption from registration under the 1940 Act. In addition, the Portfolio may experience a decline in its income from REIT securities due to falling interest rates or decreasing dividend payments. |
■ | REOC-Related Risk. REOCs are not required to pay any specific level of income as dividends, and there is no minimum restriction on the number of owners or limits on ownership concentration. The value of the Portfolio’s REOC securities may be adversely affected by certain of the same factors that adversely affect REITs. In addition, a corporate REOC does not qualify for the favorable federal tax treatment that is accorded a REIT. In addition, the Portfolio may experience a decline in its income from REOC securities due to falling interest rates or decreasing dividend payments. |
Chart of Year-by-Year Returns |
as of
December 31 each year |
90 Prospectus | Specialty Portfolios |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10 Years |
Class II | 24.43% | 6.23% | 10.96% |
Indexes | |||
FTSE Nareit Equity REITs Index (reflects no deduction for fees, expenses or taxes) | 26.00% | 7.21% | 11.94% |
Morningstar Real Estate Category Average (net of fees and expenses) | 27.28% | 6.81% | 11.30% |
Specialty
Portfolios |
Prospectus 91 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.35% |
Distribution and Service (12b-1) Fees | 0.00% |
Other Expenses | 0.07% |
Total Annual Portfolio Operating Expenses | 0.42% |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $43 | $135 | $235 | $530 |
92 Prospectus | Money Market Portfolio |
■ | Amortized Cost Risk. In the event that the Board determines that the extent of the deviation between the Portfolio’s amortized cost per share and its market-based NAV per share could result in material dilution or other unfair results to shareholders, the Board will cause the Portfolio to take such action as it deems appropriate to eliminate, or reduce to the extent practicable, such dilution or unfair results, including but not limited to, suspending redemption of Portfolio shares or liquidating the Portfolio. |
■ | Credit Risk. An issuer of a fixed-income obligation may not make payments on the obligation when due or may default on its obligation. There also is the risk that an issuer could suffer adverse changes in its financial condition that could lower the credit quality of a security. This could lead to greater volatility in the price of the security, could affect the security’s liquidity, and could make it more difficult to sell. A downgrade or default affecting any of the Portfolio’s securities could affect the Portfolio’s performance. In general, the longer the maturity and the lower the credit quality of a bond, the more sensitive it is to credit risk. |
■ | Income Risk. The risk that the Portfolio may experience a decline in its income due to falling interest rates, earnings declines, or income decline within a security. The amount and rate of distributions that the Portfolio’s shareholders receive are affected by the income that the Portfolio receives from its portfolio holdings. If the income is reduced, distributions by the Portfolio to shareholders may be less. |
■ | Interest Rate Risk. A rise in interest rates may cause a decline in the value of the Portfolio’s securities, especially securities with longer maturities. Typically, the longer the maturity or duration of a debt security, the greater the effect a change in interest rates could have on the security’s price. Thus, the sensitivity of the Portfolio’s debt securities to interest rate risk will increase with any increase in the duration of those securities. A decline in interest rates may cause the Portfolio to experience a decline in its income. Interest rates in the U.S. recently have been at, and remain near, historic lows, which may increase the Portfolio’s exposure to risks associated with rising rates. During periods of low short-term interest rates, the Portfolio may not be able to maintain a positive yield or may not be able to pay Portfolio expenses out of current income without impairing the Portfolio’s ability to maintain a stable NAV. In addition, a general rise in rates may result in decreased liquidity and increased volatility in the fixed-income markets generally. Changes to the monetary policy by the Federal Reserve or other regulatory actions may affect interest rates. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. |
■ | Money Market Fund Regulatory Risk. As a money market fund, the Portfolio is subject to the specific rules governing money market funds. These rules govern the manner in which the Portfolio is structured and operated and could significantly affect the money market fund industry generally and, therefore, may impact Portfolio expenses, operations, returns and liquidity. |
■ | Mortgage-Backed and Asset-Backed Securities Risk. Mortgage-backed and asset-backed securities are subject to prepayment risk and extension risk. When interest rates decline, unscheduled prepayments can be expected to accelerate, shortening the average lives of such securities, and the Portfolio may be required to reinvest the proceeds of the prepayments at the lower interest rates then available. Unscheduled prepayments also would limit the potential for capital appreciation on mortgage-backed and asset-backed securities, thereby reducing the Portfolio’s income. |
Money Market
Portfolio |
Prospectus 93 |
■ | Redemption Risk. The Portfolio may experience periods of heavy redemptions that could cause the Portfolio to sell assets at inopportune times or at a loss or depressed value. Redemption risk is heightened during periods of declining or illiquid markets. Heavy redemptions could hurt the Portfolio’s performance. |
■ | Reinvestment Risk. A decline in interest rates may cause issuers to prepay higher-yielding securities held by the Portfolio, resulting in the Portfolio reinvesting in securities with lower yields, which may cause a decline in its income. |
■ | Repurchase Agreements Risk. Repurchase agreements are agreements in which the seller of a security to the Portfolio agrees to repurchase that security from the Portfolio at a mutually agreed-upon price and time. The return on the securities subject to the repurchase agreement may be more or less than the return on the repurchase agreement. Repurchase agreements carry the risk that the counterparty may not fulfill its obligations under the agreement. This could cause the Portfolio’s income to decline and may impact the Portfolio’s performance. |
■ | U.S. Government Securities Risk. Certain U.S. government securities, such as Treasury securities and securities issued by Ginnie Mae, are backed by the full faith and credit of the U.S. government. Other U.S. government securities, such as securities issued by Fannie Mae, Freddie Mac and the FHLB, are not backed by the full faith and credit of the U.S. government and, instead, may be supported only by the credit of the issuer or by the right of the issuer to borrow from the Treasury. |
94 Prospectus | Money Market Portfolio |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10 Years |
Class II | 1.83% | 0.82% | 0.42% |
Index | |||
Morningstar Prime Money Market Category Average (net of fees and expenses) | 1.90% | 0.85% | 0.44% |
Money Market
Portfolio |
Prospectus 95 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.00% |
Distribution and Service (12b-1) Fees | 0.00% |
Other Expenses | 0.09% |
Acquired Fund Fees and Expenses1 | 0.96% |
Total Annual Portfolio Operating Expenses2 | 1.05% |
1 | Acquired Fund Fees and Expenses sets forth the Portfolio’s pro rata portion of the cumulative expenses charged by the Underlying Funds in which the Portfolio invested during its last fiscal year. The actual Acquired Fund Fees and Expenses will vary with changes in the allocations of the Portfolio’s assets. The Acquired Fund Fees and Expenses shown are based on the total expense ratio of each Underlying Fund for the Fund’s most recent fiscal year. |
2 | The Total Annual Portfolio Operating Expenses ratio shown in this table does not correlate to the expense ratio shown in the Financial Highlights table because that ratio does not include the Acquired Fund Fees and Expenses. |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $107 | $334 | $579 | $1,283 |
96 Prospectus | Ivy VIP Pathfinder Portfolios |
Asset Class | Target Allocations | |
U.S. Stocks | 50-60% | |
Ivy VIP Core Equity | 0-20% | |
Ivy VIP Growth | 0-20% | |
Ivy VIP Mid Cap Growth | 0-10% | |
Ivy VIP Small Cap Core | 0-10% | |
Ivy VIP Small Cap Growth | 0-10% | |
Ivy VIP Value | 0-20% | |
International/Global Stocks | 25-35% | |
Ivy VIP Global Equity Income | 0-35% | |
Ivy VIP Global Growth | 0-35% | |
Ivy VIP International Core Equity | 0-35% | |
Bonds | 0-20% | |
Ivy VIP Corporate Bond | 0-20% | |
Ivy VIP Global Bond | 0-15% | |
Ivy VIP High Income | 0-10% | |
Short-Term Investments | 0-25% | |
Ivy VIP Government Money Market | 0-25% | |
Ivy VIP Limited-Term Bond | 0-25% | |
Total Allocation | 100% |
■ | Fund of Funds Risk. The ability of the Portfolio to meet its investment objective is directly related to its target allocations among the Underlying Funds and the ability of those funds to meet their investment objectives. The |
Ivy VIP
Pathfinder Portfolios |
Prospectus 97 |
Portfolio’s share price will likely change daily based on the performance of the Underlying Funds in which it invests. In general, the Portfolio is subject to the same risks as those of the Underlying Funds it holds. Because the Portfolio is weighted towards Underlying Funds that invest in stocks, both U.S. and foreign, including mid- and small-capitalization stocks, the Portfolio is more subject to the risks associated with those investments. |
■ | Equity Funds Risk. The Portfolio invests in equity funds, for which a principal risk is market risk, the chance that stock prices overall will decline over short or even long periods of time. This includes the risk that returns from the stock market segments in which the Portfolio is most heavily indirectly invested may underperform other asset classes, other market segments or the overall stock market. |
The values of certain types of stocks, such as stocks of small-capitalization companies and foreign companies, may fluctuate more widely than others. The prices of small-capitalization company stocks may be based, in part, on future expectations rather than current achievements. | |
■ | Bond Funds Risk. A portion of the Portfolio’s assets may be invested in funds that have exposure to bonds and other fixed-income securities. The principal risks that may be encountered by such investments are: bond prices overall may decline when interest rates rise (interest rate risk); a bond issuer may fail to pay interest and principal in a timely manner (credit risk); and a fixed-income security issuer may repay a higher yielding bond before its maturity date, during periods of falling interest rates (reinvestment risk). Interest rates in the U.S. recently have been at, and remain near, historic lows, which may increase the Portfolio’s exposure to risks associated with rising rates. In addition, a general rise in rates may result in decreased liquidity and increased volatility in the fixed-income markets generally. |
■ | Foreign Securities Risk. A portion of the Portfolio’s assets may be invested in funds with significant exposure to foreign securities, including exposure to emerging markets. Investing in foreign securities involves a number of economic, financial, legal, and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending on the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other operational delays. World markets, or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
■ | Investment Company Securities Risk. Investment in other investment companies typically reflects the risks of the types of securities in which the investment companies invest. When the Portfolio invests in another investment company, shareholders of the Portfolio bear their proportionate share of the other investment company’s fees and expenses as well as their share of the Portfolio’s fees and expenses, which could result in the duplication of certain fees. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. Furthermore, IICO may alter the asset allocation of the Portfolio at its discretion. A material change in the asset allocation could affect both the level of risk and the potential for gain or loss. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in |
98 Prospectus | Ivy VIP Pathfinder Portfolios |
cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Other Risks Applicable to a Fund of Funds Structure. There are other risks associated with a Fund of Funds structure. IICO has the authority to select and replace Underlying Funds. IICO is subject to a potential conflict of interest in doing so because IICO serves as the investment manager to the Underlying Funds and the advisory fees paid by some of the Underlying Funds are higher than fees paid by other Underlying Funds. It is important to note, however, that IICO has a fiduciary duty to the Portfolio and must act in the Portfolio’s best interests. |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Ivy VIP
Pathfinder Portfolios |
Prospectus 99 |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10 Years |
Class II | 23.24% | 8.25% | 9.43% |
Indexes | |||
Current Blended Benchmark1 (reflects no deduction for fees, expenses or taxes) | 25.74% | 8.65% | 9.94% |
Former Blended Benchmark2 (reflects no deduction for fees, expenses or taxes) | 24.99% | 8.51% | 9.76% |
Russell 3000 Index (reflects no deduction for fees, expenses or taxes) | 31.02% | 11.24% | 13.42% |
MSCI EAFE Index (reflects no deduction for fees, expenses or taxes) | 22.01% | 5.67% | 5.50% |
Bloomberg Barclays U.S. Credit Index (reflects no deduction for fees, expenses or taxes) | 13.80% | 4.39% | 5.32% |
Bloomberg Barclays U.S. Universal Index (reflects no deduction for fees, expenses or taxes) | 9.29% | 3.44% | 4.12% |
1 | The Current Blended Benchmark is computed using a combination of 55% Russell 3000 Index + 30% MSCI EAFE Index + 15% Bloomberg Barclays U.S. Credit Index. This benchmark index change is effective April 30, 2020. IICO believes that this index is more reflective of the types of securities that the Portfolio invests in. Both the Current Blended Benchmark and the Portfolio’s Former Blended Benchmark are included in this Prospectus for comparison purposes. |
100 Prospectus | Ivy VIP Pathfinder Portfolios |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.00% |
Distribution and Service (12b-1) Fees | 0.00% |
Other Expenses | 0.03% |
Acquired Fund Fees and Expenses1 | 0.93% |
Total Annual Portfolio Operating Expenses2 | 0.96% |
1 | Acquired Fund Fees and Expenses sets forth the Portfolio’s pro rata portion of the cumulative expenses charged by the Underlying Funds in which the Portfolio invested during its last fiscal year. The actual Acquired Fund Fees and Expenses will vary with changes in the allocations of the Portfolio’s assets. The Acquired Fund Fees and Expenses shown are based on the total expense ratio of each Underlying Fund for the Fund’s most recent fiscal year. |
2 | The Total Annual Portfolio Operating Expenses ratio shown in this table does not correlate to the expense ratio shown in the Financial Highlights table because that ratio does not include the Acquired Fund Fees and Expenses. |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $98 | $306 | $531 | $1,178 |
Ivy VIP
Pathfinder Portfolios |
Prospectus 101 |
Asset Class | Target Allocations | |
U.S. Stocks | 45-55% | |
Ivy VIP Core Equity | 0-20% | |
Ivy VIP Growth | 0-20% | |
Ivy VIP Mid Cap Growth | 0-10% | |
Ivy VIP Small Cap Core | 0-10% | |
Ivy VIP Small Cap Growth | 0-10% | |
Ivy VIP Value | 0-20% | |
International/Global Stocks | 20-30% | |
Ivy VIP Global Equity Income | 0-30% | |
Ivy VIP Global Growth | 0-30% | |
Ivy VIP International Core Equity | 0-30% | |
Bonds | 0-25% | |
Ivy VIP Corporate Bond | 0-25% | |
Ivy VIP Global Bond | 0-15% | |
Ivy VIP High Income | 0-10% | |
Short-Term Investments | 5-35% | |
Ivy VIP Government Money Market | 0-35% | |
Ivy VIP Limited-Term Bond | 0-35% | |
Total Allocation | 100% |
■ | Fund of Funds Risk. The ability of the Portfolio to meet its investment objective is directly related to its target allocations among the Underlying Funds and the ability of those funds to meet their investment objectives. The Portfolio’s share price will likely change daily based on the performance of the Underlying Funds in which it invests. In |
102 Prospectus | Ivy VIP Pathfinder Portfolios |
general, the Portfolio is subject to the same risks as those of the Underlying Funds it holds. Because the Portfolio is weighted towards Underlying Funds that invest in stocks, both U.S. and foreign, including mid- and small-capitalization stocks, the Portfolio is more subject to the risks associated with those investments. |
■ | Equity Funds Risk. The Portfolio invests in equity funds, for which a principal risk is market risk, the chance that stock prices overall will decline over short or even long periods of time. This includes the risk that returns from the stock market segments in which the Portfolio is most heavily indirectly invested may underperform other asset classes, other market segments or the overall stock market. |
The values of certain types of stocks, such as stocks of small-capitalization companies and foreign companies, may fluctuate more widely than others. The prices of small-capitalization company stocks may be based, in part, on future expectations rather than current achievements. | |
■ | Bond Funds Risk. A portion of the Portfolio’s assets may be invested in funds that have exposure to bonds and other fixed-income securities. The principal risks that may be encountered by such investments are: bond prices overall may decline when interest rates rise (interest rate risk); a bond issuer may fail to pay interest and principal in a timely manner (credit risk); and a fixed-income security issuer may repay a higher yielding bond before its maturity date, during periods of falling interest rates (reinvestment risk). Interest rates in the U.S. recently have been at, and remain near, historic lows, which may increase the Portfolio’s exposure to risks associated with rising rates. In addition, a general rise in rates may result in decreased liquidity and increased volatility in the fixed-income markets generally. |
■ | Foreign Securities Risk. A portion of the Portfolio’s assets may be invested in funds with significant exposure to foreign securities, including exposure to emerging markets. Investing in foreign securities involves a number of economic, financial, legal, and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending on the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other operational delays. World markets, or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
■ | Investment Company Securities Risk. Investment in other investment companies typically reflects the risks of the types of securities in which the investment companies invest. When the Portfolio invests in another investment company, shareholders of the Portfolio bear their proportionate share of the other investment company’s fees and expenses as well as their share of the Portfolio’s fees and expenses, which could result in the duplication of certain fees. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. Furthermore, IICO may alter the asset allocation of the Portfolio at its discretion. A material change in the asset allocation could affect both the level of risk and the potential for gain or loss. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, |
Ivy VIP
Pathfinder Portfolios |
Prospectus 103 |
multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Other Risks Applicable to a Fund of Funds Structure. There are other risks associated with a Fund of Funds structure. IICO has the authority to select and replace Underlying Funds. IICO is subject to a potential conflict of interest in doing so because IICO serves as the investment manager to the Underlying Funds and the advisory fees paid by some of the Underlying Funds are higher than fees paid by other Underlying Funds. It is important to note, however, that IICO has a fiduciary duty to the Portfolio and must act in the Portfolio’s best interests. |
Chart of Year-by-Year Returns |
as of
December 31 each year |
104 Prospectus | Ivy VIP Pathfinder Portfolios |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10 Years |
Class II | 21.40% | 7.15% | 8.45% |
Indexes | |||
Current Blended Benchmark1 (reflects no deduction for fees, expenses or taxes) | 23.94% | 8.14% | 9.38% |
Former Blended Benchmark2 (reflects no deduction for fees, expenses or taxes) | 23.01% | 7.97% | 9.16% |
Russell 3000 Index (reflects no deduction for fees, expenses or taxes) | 31.02% | 11.24% | 13.42% |
MSCI EAFE Index (reflects no deduction for fees, expenses or taxes) | 22.01% | 5.67% | 5.50% |
Bloomberg Barclays U.S. Credit Index (reflects no deduction for fees, expenses or taxes) | 13.80% | 4.39% | 5.32% |
Bloomberg Barclays 1-3 Year Gov/Credit Index (reflects no deduction for fees, expenses or taxes) | 4.03% | 1.67% | 1.54% |
Bloomberg Barclays U.S. Universal Index (reflects no deduction for fees, expenses or taxes) | 9.29% | 3.44% | 4.12% |
Bloomberg Barclays 1-5 Year Gov/Credit Index (reflects no deduction for fees, expenses or taxes) | 5.01% | 2.03% | 2.13% |
1 | The Current Blended Benchmark is computed using a combination of 50% Russell 3000 Index +25% MSCI EAFE Index + 20% Bloomberg Barclays U.S. Credit Index + 5% Bloomberg Barclays 1-3 Year Gov/Credit Index. This benchmark index change is effective April 30, 2020. IICO believes that this index is more reflective of the types of securities that the Portfolio invests in. Both the Current Blended Benchmark and the Portfolio’s Former Blended Benchmark are included in this Prospectus for comparison purposes. |
2 | The Former Blended Benchmark is computed using a combination of 50% Russell 3000 Index + 25% MSCI EAFE Index + 20% Bloomberg Barclays U.S. Universal Index + 5% Bloomberg Barclays 1-5 Year Gov/Credit Index. |
Ivy VIP
Pathfinder Portfolios |
Prospectus 105 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.00% |
Distribution and Service (12b-1) Fees | 0.00% |
Other Expenses | 0.04% |
Acquired Fund Fees and Expenses1 | 0.89% |
Total Annual Portfolio Operating Expenses2 | 0.93% |
1 | Acquired Fund Fees and Expenses sets forth the Portfolio’s pro rata portion of the cumulative expenses charged by the Underlying Funds in which the Portfolio invested during its last fiscal year. The actual Acquired Fund Fees and Expenses will vary with changes in the allocations of the Portfolio’s assets. The Acquired Fund Fees and Expenses shown are based on the total expense ratio of each Underlying Fund for the Fund’s most recent fiscal year. |
2 | The Total Annual Portfolio Operating Expenses ratio shown in this table does not correlate to the expense ratio shown in the Financial Highlights table because that ratio does not include the Acquired Fund Fees and Expenses. |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $95 | $296 | $515 | $1,143 |
106 Prospectus | Ivy VIP Pathfinder Portfolios |
Asset Class | Target Allocations | |
U.S. Stocks | 40-50% | |
Ivy VIP Core Equity | 0-20% | |
Ivy VIP Growth | 0-20% | |
Ivy VIP Mid Cap Growth | 0-10% | |
Ivy VIP Small Cap Core | 0-10% | |
Ivy VIP Small Cap Growth | 0-10% | |
Ivy VIP Value | 0-20% | |
International/Global Stocks | 15-25% | |
Ivy VIP Global Equity Income | 0-25% | |
Ivy VIP Global Growth | 0-25% | |
Ivy VIP International Core Equity | 0-25% | |
Bonds | 0-30% | |
Ivy VIP Corporate Bond | 0-30% | |
Ivy VIP Global Bond | 0-15% | |
Ivy VIP High Income | 0-10% | |
Short-Term Investments | 10-45% | |
Ivy VIP Government Money Market | 0-45% | |
Ivy VIP Limited-Term Bond | 0-45% | |
Total Allocation | 100% |
■ | Fund of Funds Risk. The ability of the Portfolio to meet its investment objective is directly related to its target allocations among the Underlying Funds and the ability of those funds to meet their investment objectives. The Portfolio’s share price will likely change daily based on the performance of the Underlying Funds in which it invests. In |
Ivy VIP
Pathfinder Portfolios |
Prospectus 107 |
general, the Portfolio is subject to the same risks as those of the Underlying Funds it holds. Because the Portfolio is weighted towards Underlying Funds that invest in stocks, both U.S. and foreign, including mid- and small-capitalization stocks, as well as bonds and short-term instruments, the Portfolio is more subject to the risks associated with those investments. |
■ | Equity Funds Risk. The Portfolio invests in equity funds, for which a principal risk is market risk, the chance that stock prices overall will decline over short or even long periods of time. This includes the risk that returns from the stock market segments in which the Portfolio is most heavily indirectly invested may underperform other asset classes, other market segments or the overall stock market. |
The values of certain types of stocks, such as stocks of small-capitalization companies and foreign companies, may fluctuate more widely than others. The prices of small-capitalization company stocks may be based, in part, on future expectations rather than current achievements. | |
■ | Bond Funds Risk. A portion of the Portfolio’s assets may be invested in funds that have exposure to bonds and other fixed-income securities. The principal risks that may be encountered by such investments are: bond prices overall may decline when interest rates rise (interest rate risk); a bond issuer may fail to pay interest and principal in a timely manner (credit risk); and a fixed-income security issuer may repay a higher yielding bond before its maturity date, during periods of falling interest rates (reinvestment risk). Interest rates in the U.S. recently have been at, and remain near, historic lows, which may increase the Portfolio’s exposure to risks associated with rising rates. In addition, a general rise in rates may result in decreased liquidity and increased volatility in the fixed-income markets generally. |
■ | Foreign Securities Risk. A portion of the Portfolio’s assets may be invested in funds with significant exposure to foreign securities, including exposure to emerging markets. Investing in foreign securities involves a number of economic, financial, legal, and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending on the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other operational delays. World markets, or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
■ | Investment Company Securities Risk. Investment in other investment companies typically reflects the risks of the types of securities in which the investment companies invest. When the Portfolio invests in another investment company, shareholders of the Portfolio bear their proportionate share of the other investment company’s fees and expenses as well as their share of the Portfolio’s fees and expenses, which could result in the duplication of certain fees. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. Furthermore, IICO may alter the asset allocation of the Portfolio at its discretion. A material change in the asset allocation could affect both the level of risk and the potential for gain or loss. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in |
108 Prospectus | Ivy VIP Pathfinder Portfolios |
cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Other Risks Applicable to a Fund of Funds Structure. There are other risks associated with a Fund of Funds structure. IICO has the authority to select and replace Underlying Funds. IICO is subject to a potential conflict of interest in doing so because IICO serves as the investment manager to the Underlying Funds and the advisory fees paid by some of the Underlying Funds are higher than fees paid by other Underlying Funds. It is important to note, however, that IICO has a fiduciary duty to the Portfolio and must act in the Portfolio’s best interests. |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Ivy VIP
Pathfinder Portfolios |
Prospectus 109 |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10 Years |
Class II | 19.05% | 6.41% | 7.64% |
Indexes | |||
Current Blended Benchmark1 (reflects no deduction for fees, expenses or taxes) | 22.13% | 7.61% | 8.79% |
Former Blended Benchmark2 (reflects no deduction for fees, expenses or taxes) | 21.03% | 7.41% | 8.55% |
Russell 3000 Index (reflects no deduction for fees, expenses or taxes) | 31.02% | 11.24% | 13.42% |
Bloomberg Barclays U.S. Credit Index (reflects no deduction for fees, expenses or taxes) | 13.80% | 4.39% | 5.32% |
MSCI EAFE Index (reflects no deduction for fees, expenses or taxes) | 22.01% | 5.67% | 5.50% |
Bloomberg Barclays 1-3 Year Gov/Credit Index (reflects no deduction for fees, expenses or taxes) | 4.03% | 1.67% | 1.54% |
Bloomberg Barclays U.S. Universal Index (reflects no deduction for fees, expenses or taxes) | 9.29% | 3.44% | 4.12% |
Bloomberg Barclays 1-5 Year Gov/Credit Index (reflects no deduction for fees, expenses or taxes) | 5.01% | 2.03% | 2.13% |
1 | The Current Blended Benchmark is computed using a combination of 45% Russell 3000 Index + 25% Bloomberg Barclays U.S. Credit Index + 20% MSCI EAFE Index + 10% Bloomberg Barclays 1-3 Year Gov/Credit Index. This benchmark index change is effective April 30, 2020. IICO believes that this index is more reflective of the types of securities that the Portfolio invests in. Both the Current Blended Benchmark and the Portfolio’s Former Blended Benchmark are included in this Prospectus for comparison purposes. |
2 | The Former Blended Benchmark is computed using a combination of 45% Russell 3000 Index + 25% Bloomberg Barclays U.S. Universal Index + 20% MSCI EAFE Index + 10% Bloomberg Barclays 1-5 Year Gov/Credit Index. |
110 Prospectus | Ivy VIP Pathfinder Portfolios |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.00% |
Distribution and Service (12b-1) Fees | 0.00% |
Other Expenses | 0.05% |
Acquired Fund Fees and Expenses1 | 0.85% |
Total Annual Portfolio Operating Expenses2 | 0.90% |
1 | Acquired Fund Fees and Expenses sets forth the Portfolio’s pro rata portion of the cumulative expenses charged by the Underlying Funds in which the Portfolio invested during its last fiscal year. The actual Acquired Fund Fees and Expenses will vary with changes in the allocations of the Portfolio’s assets. The Acquired Fund Fees and Expenses shown are based on the total expense ratio of each Underlying Fund for the Fund’s most recent fiscal year. |
2 | The Total Annual Portfolio Operating Expenses ratio shown in this table does not correlate to the expense ratio shown in the Financial Highlights table because that ratio does not include the Acquired Fund Fees and Expenses. |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $92 | $287 | $498 | $1,108 |
Ivy VIP
Pathfinder Portfolios |
Prospectus 111 |
Asset Class | Target Allocations | |
U.S. Stocks | 35-45% | |
Ivy VIP Core Equity | 0-15% | |
Ivy VIP Growth | 0-15% | |
Ivy VIP Mid Cap Growth | 0-10% | |
Ivy VIP Small Cap Core | 0-10% | |
Ivy VIP Small Cap Growth | 0-10% | |
Ivy VIP Value | 0-15% | |
International/Global Stocks | 10-20% | |
Ivy VIP Global Equity Income | 0-20% | |
Ivy VIP Global Growth | 0-20% | |
Ivy VIP International Core Equity | 0-20% | |
Bonds | 0-35% | |
Ivy VIP Corporate Bond | 0-35% | |
Ivy VIP Global Bond | 0-20% | |
Ivy VIP High Income | 0-5% | |
Short-Term Investments | 15-55% | |
Ivy VIP Government Money Market | 0-55% | |
Ivy VIP Limited-Term Bond | 0-55% | |
Total Allocation | 100% |
■ | Fund of Funds Risk. The ability of the Portfolio to meet its investment objective is directly related to its target allocations among the Underlying Funds and the ability of those funds to meet their investment objectives. The Portfolio’s share price will likely change daily based on the performance of the Underlying Funds in which it invests. In |
112 Prospectus | Ivy VIP Pathfinder Portfolios |
general, the Portfolio is subject to the same risks as those of the Underlying Funds it holds. Because the Portfolio is weighted towards Underlying Funds that invest in stocks, both U.S. and foreign, including mid- and small-capitalization stocks, as well as bonds and short-term instruments, the Portfolio is more subject to the risks associated with those investments. |
■ | Equity Funds Risk. The Portfolio invests in equity funds, for which a principal risk is market risk, the chance that stock prices overall will decline over short or even long periods of time. This includes the risk that returns from the stock market segments in which the Portfolio is most heavily indirectly invested may underperform other asset classes, other market segments or the overall stock market. |
The values of certain types of stocks, such as stocks of small-capitalization companies and foreign companies, may fluctuate more widely than others. The prices of small-capitalization company stocks may be based, in part, on future expectations rather than current achievements. | |
■ | Bond Funds Risk. A portion of the Portfolio’s assets may be invested in funds that have exposure to bonds and other fixed-income securities. The principal risks that may be encountered by such investments are: bond prices overall may decline when interest rates rise (interest rate risk); a bond issuer may fail to pay interest and principal in a timely manner (credit risk); and a fixed-income security issuer may repay a higher yielding bond before its maturity date, during periods of falling interest rates (reinvestment risk). Interest rates in the U.S. recently have been at, and remain near, historic lows, which may increase the Portfolio’s exposure to risks associated with rising rates. In addition, a general rise in rates may result in decreased liquidity and increased volatility in the fixed-income markets generally. |
■ | Foreign Securities Risk. A portion of the Portfolio’s assets may be invested in funds with significant exposure to foreign securities, including exposure to emerging markets. Investing in foreign securities involves a number of economic, financial, legal, and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending on the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other operational delays. World markets, or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
■ | Investment Company Securities Risk. Investment in other investment companies typically reflects the risks of the types of securities in which the investment companies invest. When the Portfolio invests in another investment company, shareholders of the Portfolio bear their proportionate share of the other investment company’s fees and expenses as well as their share of the Portfolio’s fees and expenses, which could result in the duplication of certain fees. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. Furthermore, IICO may alter the asset allocation of the Portfolio at its discretion. A material change in the asset allocation could affect both the level of risk and the potential for gain or loss. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in |
Ivy VIP
Pathfinder Portfolios |
Prospectus 113 |
cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Other Risks Applicable to a Fund of Funds Structure. There are other risks associated with a Fund of Funds structure. IICO has the authority to select and replace Underlying Funds. IICO is subject to a potential conflict of interest in doing so because IICO serves as the investment manager to the Underlying Funds and the advisory fees paid by some of the Underlying Funds are higher than fees paid by other Underlying Funds. It is important to note, however, that IICO has a fiduciary duty to the Portfolio and must act in the Portfolio’s best interests. |
Chart of Year-by-Year Returns |
as of
December 31 each year |
114 Prospectus | Ivy VIP Pathfinder Portfolios |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10 Years |
Class II | 16.85% | 5.81% | 6.91% |
Indexes | |||
Current Blended Benchmark1 (reflects no deduction for fees, expenses or taxes) | 20.33% | 7.08% | 8.19% |
Former Blended Benchmark2 (reflects no deduction for fees, expenses or taxes) | 19.06% | 6.84% | 7.92% |
Russell 3000 Index (reflects no deduction for fees, expenses or taxes) | 31.02% | 11.24% | 13.42% |
Bloomberg Barclays U.S. Credit Index (reflects no deduction for fees, expenses or taxes) | 13.80% | 4.39% | 5.32% |
MSCI EAFE Index (reflects no deduction for fees, expenses or taxes) | 22.01% | 5.67% | 5.50% |
Bloomberg Barclays 1-3 Year Gov/Credit Index (reflects no deduction for fees, expenses or taxes) | 4.03% | 1.67% | 1.54% |
Bloomberg Barclays U.S. Universal Index (reflects no deduction for fees, expenses or taxes) | 9.29% | 3.44% | 4.12% |
Bloomberg Barclays 1-5 Year Gov/Credit Index (reflects no deduction for fees, expenses or taxes) | 5.01% | 2.03% | 2.13% |
1 | The Current Blended Benchmark is computed using a combination of 40% Russell 3000 Index + 30% Bloomberg Barclays U.S. Credit Index + 15% MSCI EAFE Index + 15% Bloomberg Barclays 1-3 Year Gov/Credit Index. This benchmark index change is effective April 30, 2020. IICO believes that this index is more reflective of the types of securities that the Portfolio invests in. Both the Current Blended Benchmark and the Portfolio’s Former Blended Benchmark are included in this Prospectus for comparison purposes. |
2 | The Former Blended Benchmark is computed using a combination of 40% Russell 3000 Index + 30% Bloomberg Barclays U.S. Universal Index + 15% MSCI EAFE Index + 15% Bloomberg Barclays 1-5 Year Gov/Credit Index. |
Ivy VIP
Pathfinder Portfolios |
Prospectus 115 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.00% |
Distribution and Service (12b-1) Fees | 0.00% |
Other Expenses | 0.07% |
Acquired Fund Fees and Expenses1 | 0.80% |
Total Annual Portfolio Operating Expenses2 | 0.87% |
1 | Acquired Fund Fees and Expenses sets forth the Portfolio’s pro rata portion of the cumulative expenses charged by the Underlying Funds in which the Portfolio invested during its last fiscal year. The actual Acquired Fund Fees and Expenses will vary with changes in the allocations of the Portfolio’s assets. The Acquired Fund Fees and Expenses shown are based on the total expense ratio of each Underlying Fund for the Fund’s most recent fiscal year. |
2 | The Total Annual Portfolio Operating Expenses ratio shown in this table does not correlate to the expense ratio shown in the Financial Highlights table because that ratio does not include the Acquired Fund Fees and Expenses. |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $89 | $278 | $482 | $1,073 |
116 Prospectus | Ivy VIP Pathfinder Portfolios |
Asset Class | Target Allocations | |
U.S. Stocks | 30-40% | |
Ivy VIP Core Equity | 0-15% | |
Ivy VIP Growth | 0-15% | |
Ivy VIP Mid Cap Growth | 0-10% | |
Ivy VIP Small Cap Core | 0-10% | |
Ivy VIP Small Cap Growth | 0-10% | |
Ivy VIP Value | 0-15% | |
International/Global Stocks | 5-15% | |
Ivy VIP Global Equity Income | 0-15% | |
Ivy VIP Global Growth | 0-15% | |
Ivy VIP International Core Equity | 0-15% | |
Bonds | 0-40% | |
Ivy VIP Corporate Bond | 0-40% | |
Ivy VIP Global Bond | 0-20% | |
Ivy VIP High Income | 0-5% | |
Short-Term Investments | 20-65% | |
Ivy VIP Government Money Market | 0-65% | |
Ivy VIP Limited-Term Bond | 0-65% | |
Total Allocation | 100% |
■ | Fund of Funds Risk. The ability of the Portfolio to meet its investment objective is directly related to its target allocations among the Underlying Funds and the ability of those funds to meet their investment objectives. The Portfolio’s share price will likely change daily based on the performance of the Underlying Funds in which it invests. In |
Ivy VIP
Pathfinder Portfolios |
Prospectus 117 |
general, the Portfolio is subject to the same risks as those of the Underlying Funds it holds. Because the Portfolio is weighted towards Underlying Funds that invest in bonds and short-term instruments, as well as, to a lesser extent, stocks, both U. S. and foreign, the Portfolio is more subject to the risks associated with those investments. |
■ | Equity Funds Risk. The Portfolio invests in equity funds, for which a principal risk is market risk, the chance that stock prices overall will decline over short or even long periods of time. This includes the risk that returns from the stock market segments in which the Portfolio is most heavily indirectly invested may underperform other asset classes, other market segments or the overall stock market. |
The values of certain types of stocks, such as stocks of small-capitalization companies and foreign companies, may fluctuate more widely than others. The prices of small-capitalization company stocks may be based, in part, on future expectations rather than current achievements. | |
■ | Bond Funds Risk. A portion of the Portfolio’s assets may be invested in funds that have exposure to bonds and other fixed-income securities. The principal risks that may be encountered by such investments are: bond prices overall may decline when interest rates rise (interest rate risk); a bond issuer may fail to pay interest and principal in a timely manner (credit risk); and a fixed-income security issuer may repay a higher yielding bond before its maturity date, during periods of falling interest rates (reinvestment risk). Interest rates in the U.S. recently have been at, and remain near, historic lows, which may increase the Portfolio’s exposure to risks associated with rising rates. In addition, a general rise in rates may result in decreased liquidity and increased volatility in the fixed-income markets generally. |
■ | Foreign Securities Risk. A portion of the Portfolio’s assets may be invested in funds with significant exposure to foreign securities, including exposure to emerging markets. Investing in foreign securities involves a number of economic, financial, legal, and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending on the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other operational delays. World markets, or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
■ | Investment Company Securities Risk. Investment in other investment companies typically reflects the risks of the types of securities in which the investment companies invest. When the Portfolio invests in another investment company, shareholders of the Portfolio bear their proportionate share of the other investment company’s fees and expenses as well as their share of the Portfolio’s fees and expenses, which could result in the duplication of certain fees. |
■ | Management Risk. Portfolio performance is primarily dependent on IICO's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. Furthermore, IICO may alter the asset allocation of the Portfolio at its discretion. A material change in the asset allocation could affect both the level of risk and the potential for gain or loss. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, |
118 Prospectus | Ivy VIP Pathfinder Portfolios |
multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Other Risks Applicable to a Fund of Funds Structure. There are other risks associated with a Fund of Funds structure. IICO has the authority to select and replace Underlying Funds. IICO is subject to a potential conflict of interest in doing so because IICO serves as the investment manager to the Underlying Funds and the advisory fees paid by some of the Underlying Funds are higher than fees paid by other Underlying Funds. It is important to note, however, that IICO has a fiduciary duty to the Portfolio and must act in the Portfolio’s best interests. |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Ivy VIP
Pathfinder Portfolios |
Prospectus 119 |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | 10 Years |
Class II | 14.66% | 5.12% | 6.02% |
Indexes | |||
Current Blended Benchmark1 (reflects no deduction for fees, expenses or taxes) | 18.54% | 6.53% | 7.58% |
Former Blended Benchmark2 (reflects no deduction for fees, expenses or taxes) | 17.11% | 6.26% | 7.28% |
Russell 3000 Index (reflects no deduction for fees, expenses or taxes) | 31.02% | 11.24% | 13.42% |
Bloomberg Barclays U.S. Credit Index (reflects no deduction for fees, expenses or taxes) | 13.80% | 4.39% | 5.32% |
Bloomberg Barclays 1-3 Year Gov/Credit Index (reflects no deduction for fees, expenses or taxes) | 4.03% | 1.67% | 1.54% |
MSCI EAFE Index (reflects no deduction for fees, expenses or taxes) | 22.01% | 5.67% | 5.50% |
Bloomberg Barclays U.S. Universal Index (reflects no deduction for fees, expenses or taxes) | 9.29% | 3.44% | 4.12% |
Bloomberg Barclays 1-5 Year Gov/Credit Index (reflects no deduction for fees, expenses or taxes) | 5.01% | 2.03% | 2.13% |
1 | The Current Blended Benchmark is computed using a combination of 35% Russell 3000 Index + 35% Bloomberg Barclays U.S. Credit Index + 20% Bloomberg Barclays 1-3 Year Gov/Credit Index + 10% MSCI EAFE Index. This benchmark index change is effective April 30, 2020. IICO believes that this index is more reflective of the types of securities that the Portfolio invests in. Both the Current Blended Benchmark and the Portfolio’s Former Blended Benchmark are included in this Prospectus for comparison purposes. |
2 | The Former Blended Benchmark is computed using a combination of 35% Russell 3000 Index + 35% Bloomberg Barclays U.S. Universal Index + 20% Bloomberg Barclays 1-5 Year Gov/Credit Index + 10% MSCI EAFE Index. |
120 Prospectus | Ivy VIP Pathfinder Portfolios |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.19% |
Distribution and Service (12b-1) Fees | 0.00% |
Other Expenses | 0.04% |
Acquired Fund Fees and Expenses1 | 0.87% |
Total Annual Portfolio Operating Expenses2 | 1.10% |
1 | Acquired Fund Fees and Expenses sets forth the Portfolio’s pro rata portion of the cumulative expenses charged by the Underlying Funds in which the Portfolio invested during its last fiscal year. The actual Acquired Fund Fees and Expenses will vary with changes in the allocations of the Portfolio’s assets. The Acquired Fund Fees and Expenses shown are based on the total expense ratio of each Underlying Fund for the Fund’s most recent fiscal year. |
2 | The Total Annual Portfolio Operating Expenses ratio shown in this table does not correlate to the expense ratio shown in the Financial Highlights table because that ratio does not include the Acquired Fund Fees and Expenses. |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $112 | $350 | $606 | $1,340 |
IVY VIP
Managed Volatility Portfolios |
Prospectus 121 |
122 Prospectus | IVY VIP Managed Volatility Portfolios |
Asset Class | Target Allocations | |
U.S. Stocks | 35-50% | |
Ivy VIP Core Equity | 0-20% | |
Ivy VIP Growth | 0-20% | |
Ivy VIP Mid Cap Growth | 0-10% | |
Ivy VIP Small Cap Core | 0-10% | |
Ivy VIP Small Cap Growth | 0-10% | |
Ivy VIP Value | 0-20% | |
International/Global Stocks | 10-25% | |
Ivy VIP Global Equity Income | 0-25% | |
Ivy VIP Global Growth | 0-25% | |
Ivy VIP International Core Equity | 0-25% | |
Bonds | 0-45% | |
Ivy VIP Corporate Bond | 0-45% | |
Ivy VIP Global Bond | 0-15% | |
Ivy VIP High Income | 0-10% | |
Short-Term Investments | 10-45% | |
Ivy VIP Government Money Market | 0-45% | |
Ivy VIP Limited-Term Bond | 0-45% | |
Total Allocation | 100% |
■ | Derivatives Risk. The use of derivatives presents several risks, including the risk that these instruments may change in value in a manner that adversely affects the Portfolio’s NAV. Derivatives can be highly complex, can create investment leverage, may perform in unanticipated ways and may be highly volatile, and the Portfolio could lose more than the amount it invests. Derivatives may be difficult to value and, depending on the instrument, may at times be highly illiquid, and the Portfolio may not be able to close out or sell a derivative position at a particular time or at an anticipated price. Moreover, some derivatives are more sensitive to interest rate changes and market price fluctuations than others. To the extent the judgment of the Investment Manager as to certain anticipated price movements is incorrect, the risk of loss may be greater than if the derivative technique(s) had not been used. When used for hedging, the change in value of the derivative also may not correlate perfectly with the security or other risk being hedged. Suitable derivatives may not be available in all circumstances, and there can be no assurance that the Portfolio will use |
IVY VIP
Managed Volatility Portfolios |
Prospectus 123 |
derivatives to reduce exposure to other risks when that might be beneficial. Derivatives also may be subject to counterparty credit risk, which includes the risk that the Portfolio may sustain a loss as a result of the insolvency or bankruptcy of, or other non-compliance with the terms in the agreement for the derivatives documentation by, another party to the transaction. When the Portfolio uses derivatives, it will provide margin or collateral bilaterally and/or segregate cash or other liquid assets in a manner that satisfies contractual undertakings and regulatory requirements. The need to provide margin or collateral and/or segregate assets could limit the Portfolio’s ability to pursue other opportunities as they arise. Ongoing changes to regulation of the derivatives markets and potential changes in the regulation of funds using derivatives instruments could change the Portfolio’s opportunities to pursue its investment strategies. |
■ | Fund of Funds Risk. The ability of the Portfolio to meet its investment objective is directly related to its target allocations among the Underlying Funds and the ability of those funds to meet their investment objectives. The Portfolio’s share price will likely change daily based on the performance of the Underlying Funds in which it invests. In general, the Portfolio is subject to the same risks as those of the Underlying Funds it holds. Because the Portfolio is weighted towards Underlying Funds that invest in stocks, both U.S. and foreign, including mid- and small-capitalization stocks, as well as bonds and short-term instruments, the Portfolio is more subject to the risks associated with those investments. |
■ | Equity Funds Risk. The Portfolio invests in equity funds, for which a principal risk is market risk, the chance that stock prices overall will decline over short or even long periods of time. This includes the risk that returns from the stock market segments in which the Portfolio is most heavily indirectly invested may underperform other asset classes, other market segments or the overall stock market. |
■ | Bond Funds Risk. A portion of the Portfolio’s assets may be invested in funds that have exposure to bonds and other fixed-income securities. The principal risks that may be encountered by such investments are: bond prices overall may decline when interest rates rise (interest rate risk); a bond issuer may fail to pay interest and principal in a timely manner (credit risk); and a fixed-income security issuer may repay a higher yielding bond before its maturity date, during periods of falling interest rates (reinvestment risk). Interest rates in the U.S. recently have been at, and remain near, historic lows, which may increase the Portfolio’s exposure to risks associated with rising rates. In addition, a general rise in rates may result in decreased liquidity and increased volatility in the fixed-income markets generally. |
■ | Foreign Securities Risk. A portion of the Portfolio’s assets may be invested in funds with significant exposure to foreign securities, including exposure to emerging markets. Investing in foreign securities involves a number of economic, financial, legal, and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending on the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other operational delays. World markets, or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
124 Prospectus | IVY VIP Managed Volatility Portfolios |
■ | Investment Company Securities Risk. Investment in other investment companies typically reflects the risks of the types of securities in which the investment companies invest. When the Portfolio invests in another investment company, shareholders of the Portfolio bear their proportionate share of the other investment company’s fees and expenses as well as their share of the Portfolio’s fees and expenses, which could result in the duplication of certain fees. |
■ | Leveraging Risk. The risk that certain transactions of the Portfolio, such as transactions in derivative instruments, may give rise to leverage, causing the Portfolio to be more volatile than if it had not been leveraged and can result in losses to the Portfolio that exceed the amount originally invested. Because of leverage, the Portfolio’s investment exposure may exceed the Portfolio’s net assets. |
■ | Managed Volatility Strategy Risk. Securian AM may be unsuccessful in managing volatility, and there is a risk that the Portfolio may experience a high level of volatility in its returns. The Portfolio’s holdings are subject to price volatility, and the Portfolio may not be any less volatile than the market as a whole and could be more volatile. In addition, there can be no guarantee that the Portfolio will achieve its goal of managing the volatility of its equity returns. Furthermore, while the management of volatility seeks competitive returns with more consistent volatility, the management of volatility does not ensure that the Portfolio will deliver competitive returns. Additionally, even if successful, the Portfolio’s management of volatility also may generally result in the Portfolio’s NAV increasing to a lesser degree than the markets (e.g., in a rising market with relatively high volatility) or decreasing to a greater degree than the market (e.g., in a declining market with relatively low volatility). The Portfolio’s managed volatility strategy may expose the Portfolio to losses (some of which may be sudden) to which it would not have otherwise been exposed if it invested only in Underlying Funds. Additionally, the derivatives used by Securian AM to hedge the value of the Portfolio are not identical to the Underlying Funds, and as a result, the Portfolio’s investment in derivatives may decline in value at the same time as the Portfolio’s investment in Underlying Funds. Securian AM does not intend to attempt to manage the volatility of the Portfolio’s fixed-income returns. It is possible that the fixed-income portion of the Portfolio, whose volatility would not be managed by the volatility management strategy, could become more volatile than the equity portion of the Portfolio. |
■ | Management Risk. Portfolio performance is primarily dependent on the Investment Manager's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. Furthermore, IICO may alter the asset allocation of the Portfolio at its discretion. A material change in the asset allocation could affect both the level of risk and the potential for gain or loss. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Other Risks Applicable to a Fund of Funds Structure. There are other risks associated with a Fund of Funds structure. IICO has the authority to select and replace Underlying Funds. IICO is subject to a potential conflict of interest in doing so because IICO serves as the investment manager to the Underlying Funds and the advisory fees paid by some of the Underlying Funds are higher than fees paid by other Underlying Funds. It is important to note, however, that IICO has a fiduciary duty to the Portfolio and must act in the Portfolio’s best interests. |
IVY VIP
Managed Volatility Portfolios |
Prospectus 125 |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | Life
of Class |
Class II (began on 8-1-2013) | 17.32% | 5.38% | 5.95% |
Indexes | |||
Current Blended Benchmark1 (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 22.13% | 7.61% | 8.05% |
Former Blended Benchmark2 (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 21.03% | 7.41% | 7.81% |
Russell 3000 Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 31.02% | 11.24% | 12.26% |
Bloomberg Barclays U.S. Credit Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 13.80% | 4.39% | 4.84% |
MSCI EAFE Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 22.01% | 5.67% | 5.27% |
Bloomberg Barclays 1-3 Year Gov/Credit Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 4.03% | 1.67% | 1.49% |
Bloomberg Barclays U.S. Universal Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 9.29% | 3.44% | 3.72% |
Bloomberg Barclays 1-5 Year Gov/Credit Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 5.01% | 2.03% | 1.89% |
1 | The Current Blended Benchmark is computed using a combination of 45% Russell 3000 Index + 25% Bloomberg Barclays U.S. Credit Index + 20% MSCI EAFE Index + 10% Bloomberg Barclays 1-3 Year Gov/Credit Index. This benchmark index change is effective April 30, 2020. IICO believes that this index is more reflective of the types of securities that the Portfolio invests in. Both the Current Blended Benchmark and the Portfolio’s Former Blended Benchmark are included in this Prospectus for comparison purposes. |
2 | The Former Blended Benchmark is computed using a combination of 45% Russell 3000 Index + 25% Bloomberg Barclays U.S. Universal Index + 20% MSCI EAFE Index + 10% Bloomberg Barclays 1-5 Year Gov/Credit Index. |
126 Prospectus | IVY VIP Managed Volatility Portfolios |
IVY VIP
Managed Volatility Portfolios |
Prospectus 127 |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.20% |
Distribution and Service (12b-1) Fees | 0.00% |
Other Expenses | 0.07% |
Acquired Fund Fees and Expenses1 | 0.91% |
Total Annual Portfolio Operating Expenses2 | 1.18% |
1 | Acquired Fund Fees and Expenses sets forth the Portfolio’s pro rata portion of the cumulative expenses charged by the Underlying Funds in which the Portfolio invested during its last fiscal year. The actual Acquired Fund Fees and Expenses will vary with changes in the allocations of the Portfolio’s assets. The Acquired Fund Fees and Expenses shown are based on the total expense ratio of each Underlying Fund for the Fund’s most recent fiscal year. |
2 | The Total Annual Portfolio Operating Expenses ratio shown in this table does not correlate to the expense ratio shown in the Financial Highlights table because that ratio does not include the Acquired Fund Fees and Expenses. |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $120 | $375 | $649 | $1,432 |
128 Prospectus | IVY VIP Managed Volatility Portfolios |
IVY VIP
Managed Volatility Portfolios |
Prospectus 129 |
Asset Class | Target Allocations | |
U.S. Stocks | 40-55% | |
Ivy VIP Core Equity | 0-20% | |
Ivy VIP Growth | 0-20% | |
Ivy VIP Mid Cap Growth | 0-10% | |
Ivy VIP Small Cap Core | 0-10% | |
Ivy VIP Small Cap Growth | 0-10% | |
Ivy VIP Value | 0-20% | |
International/Global Stocks | 15-30% | |
Ivy VIP Global Equity Income | 0-30% | |
Ivy VIP Global Growth | 0-30% | |
Ivy VIP International Core Equity | 0-30% | |
Bonds | 0-40% | |
Ivy VIP Corporate Bond | 0-40% | |
Ivy VIP Global Bond | 0-15% | |
Ivy VIP High Income | 0-10% | |
Short-Term Investments | 5-35% | |
Ivy VIP Government Money Market | 0-35% | |
Ivy VIP Limited-Term Bond | 0-35% | |
Total Allocation | 100% |
■ | Derivatives Risk. The use of derivatives presents several risks, including the risk that these instruments may change in value in a manner that adversely affects the Portfolio’s NAV. Derivatives can be highly complex, can create investment leverage, may perform in unanticipated ways and may be highly volatile, and the Portfolio could lose more than the amount it invests. Derivatives may be difficult to value and, depending on the instrument, may at times be highly illiquid, and the Portfolio may not be able to close out or sell a derivative position at a particular time or at an anticipated price. Moreover, some derivatives are more sensitive to interest rate changes and market price fluctuations than others. To the extent the judgment of the Investment Manager as to certain anticipated price movements is incorrect, the risk of loss may be greater than if the derivative technique(s) had not been used. When used for hedging, the change in value of the derivative also may not correlate perfectly with the security or other risk being hedged. Suitable derivatives may not be available in all circumstances, and there can be no assurance that the Portfolio will use |
130 Prospectus | IVY VIP Managed Volatility Portfolios |
derivatives to reduce exposure to other risks when that might be beneficial. Derivatives also may be subject to counterparty credit risk, which includes the risk that the Portfolio may sustain a loss as a result of the insolvency or bankruptcy of, or other non-compliance with the terms in the agreement for the derivatives documentation by, another party to the transaction. When the Portfolio uses derivatives, it will provide margin or collateral bilaterally and/or segregate cash or other liquid assets in a manner that satisfies contractual undertakings and regulatory requirements. The need to provide margin or collateral and/or segregate assets could limit the Portfolio’s ability to pursue other opportunities as they arise. Ongoing changes to regulation of the derivatives markets and potential changes in the regulation of funds using derivatives instruments could change the Portfolio’s opportunities to pursue its investment strategies. |
■ | Fund of Funds Risk. The ability of the Portfolio to meet its investment objective is directly related to its target allocations among the Underlying Funds and the ability of those funds to meet their investment objectives. The Portfolio’s share price will likely change daily based on the performance of the Underlying Funds in which it invests. In general, the Portfolio is subject to the same risks as those of the Underlying Funds it holds. Because the Portfolio is weighted towards Underlying Funds that invest in stocks, both U.S. and foreign, including mid- and small-capitalization stocks, as well as bonds and short-term instruments, the Portfolio is more subject to the risks associated with those investments. |
■ | Equity Funds Risk. The Portfolio invests in equity funds, for which a principal risk is market risk, the chance that stock prices overall will decline over short or even long periods of time. This includes the risk that returns from the stock market segments in which the Portfolio is most heavily indirectly invested may underperform other asset classes, other market segments or the overall stock market. |
■ | Bond Funds Risk. A portion of the Portfolio’s assets may be invested in funds that have exposure to bonds and other fixed-income securities. The principal risks that may be encountered by such investments are: bond prices overall may decline when interest rates rise (interest rate risk); a bond issuer may fail to pay interest and principal in a timely manner (credit risk); and a fixed-income security issuer may repay a higher yielding bond before its maturity date, during periods of falling interest rates (reinvestment risk). Interest rates in the U.S. recently have been at, and remain near, historic lows, which may increase the Portfolio’s exposure to risks associated with rising rates. In addition, a general rise in rates may result in decreased liquidity and increased volatility in the fixed-income markets generally. |
■ | Foreign Securities Risk. A portion of the Portfolio’s assets may be invested in funds with significant exposure to foreign securities, including exposure to emerging markets. Investing in foreign securities involves a number of economic, financial, legal, and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending on the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other operational delays. World markets, or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
IVY VIP
Managed Volatility Portfolios |
Prospectus 131 |
■ | Investment Company Securities Risk. Investment in other investment companies typically reflects the risks of the types of securities in which the investment companies invest. When the Portfolio invests in another investment company, shareholders of the Portfolio bear their proportionate share of the other investment company’s fees and expenses as well as their share of the Portfolio’s fees and expenses, which could result in the duplication of certain fees. |
■ | Leveraging Risk. The risk that certain transactions of the Portfolio, such as transactions in derivative instruments, may give rise to leverage, causing the Portfolio to be more volatile than if it had not been leveraged and can result in losses to the Portfolio that exceed the amount originally invested. Because of leverage, the Portfolio’s investment exposure may exceed the Portfolio’s net assets. |
■ | Managed Volatility Strategy Risk. Securian AM may be unsuccessful in managing volatility, and there is a risk that the Portfolio may experience a high level of volatility in its returns. The Portfolio’s holdings are subject to price volatility, and the Portfolio may not be any less volatile than the market as a whole and could be more volatile. In addition, there can be no guarantee that the Portfolio will achieve its goal of managing the volatility of its equity returns. Furthermore, while the management of volatility seeks competitive returns with more consistent volatility, the management of volatility does not ensure that the Portfolio will deliver competitive returns. Additionally, even if successful, the Portfolio’s management of volatility also may generally result in the Portfolio’s NAV increasing to a lesser degree than the markets (e.g., in a rising market with relatively high volatility) or decreasing to a greater degree than the market (e.g., in a declining market with relatively low volatility). The Portfolio’s managed volatility strategy may expose the Portfolio to losses (some of which may be sudden) to which it would not have otherwise been exposed if it invested only in Underlying Funds. Additionally, the derivatives used by Securian AM to hedge the value of the Portfolio are not identical to the Underlying Funds, and as a result, the Portfolio’s investment in derivatives may decline in value at the same time as the Portfolio’s investment in Underlying Funds. Securian AM does not intend to attempt to manage the volatility of the Portfolio’s fixed-income returns. It is possible that the fixed-income portion of the Portfolio, whose volatility would not be managed by the volatility management strategy, could become more volatile than the equity portion of the Portfolio. |
■ | Management Risk. Portfolio performance is primarily dependent on the Investment Manager's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. Furthermore, IICO may alter the asset allocation of the Portfolio at its discretion. A material change in the asset allocation could affect both the level of risk and the potential for gain or loss. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Other Risks Applicable to a Fund of Funds Structure. There are other risks associated with a Fund of Funds structure. IICO has the authority to select and replace Underlying Funds. IICO is subject to a potential conflict of interest in doing so because IICO serves as the investment manager to the Underlying Funds and the advisory fees paid by some of the Underlying Funds are higher than fees paid by other Underlying Funds. It is important to note, however, that IICO has a fiduciary duty to the Portfolio and must act in the Portfolio’s best interests. |
132 Prospectus | IVY VIP Managed Volatility Portfolios |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | Life
of Class |
Class II (began on 8-1-2013) | 19.29% | 5.97% | 6.56% |
Indexes | |||
Current Blended Benchmark1 (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 23.94% | 8.14% | 8.60% |
Former Blended Benchmark2 (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 23.01% | 7.97% | 8.39% |
Russell 3000 Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 31.02% | 11.24% | 12.26% |
MSCI EAFE Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 22.01% | 5.67% | 5.27% |
Bloomberg Barclays U.S. Credit Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 13.80% | 4.39% | 4.84% |
Bloomberg Barclays 1-3 Year Gov/Credit Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 4.03% | 1.67% | 1.49% |
Bloomberg Barclays U.S. Universal Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 9.29% | 3.44% | 3.72% |
Bloomberg Barclays 1-5 Year Gov/Credit Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 5.01% | 2.03% | 1.89% |
1 | The Current Blended Benchmark is computed using a combination of 50% Russell 3000 Index +25% MSCI EAFE Index + 20% Bloomberg Barclays U.S. Credit Index + 5% Bloomberg Barclays 1-3 Year Gov/Credit Index. This benchmark index change is effective April 30, 2020. IICO believes that this index is more reflective of the types of securities that the Portfolio invests in. Both the Current Blended Benchmark and the Portfolio’s Former Blended Benchmark are included in this Prospectus for comparison purposes. |
2 | The Former Blended Benchmark is computed using a combination of 50% Russell 3000 Index + 25% MSCI EAFE Index + 20% Bloomberg Barclays U.S. Universal Index + 5% Bloomberg Barclays 1-5 Year Gov/Credit Index. |
IVY VIP
Managed Volatility Portfolios |
Prospectus 133 |
134 Prospectus | IVY VIP Managed Volatility Portfolios |
Shareholder Fees | |
(fees paid directly from your investment) | N/A |
Annual Portfolio Operating Expenses | |
(expenses that you pay each year as a % of the value of your investment) | Class II |
Management Fees | 0.20% |
Distribution and Service (12b-1) Fees | 0.00% |
Other Expenses | 0.07% |
Acquired Fund Fees and Expenses1 | 0.83% |
Total Annual Portfolio Operating Expenses2 | 1.10% |
1 | Acquired Fund Fees and Expenses sets forth the Portfolio’s pro rata portion of the cumulative expenses charged by the Underlying Funds in which the Portfolio invested during its last fiscal year. The actual Acquired Fund Fees and Expenses will vary with changes in the allocations of the Portfolio’s assets. The Acquired Fund Fees and Expenses shown are based on the total expense ratio of each Underlying Fund for the Fund’s most recent fiscal year. |
2 | The Total Annual Portfolio Operating Expenses ratio shown in this table does not correlate to the expense ratio shown in the Financial Highlights table because that ratio does not include the Acquired Fund Fees and Expenses. |
1 Year | 3 Years | 5 Years | 10 Years | |
Class II | $112 | $350 | $606 | $1,340 |
IVY VIP
Managed Volatility Portfolios |
Prospectus 135 |
136 Prospectus | IVY VIP Managed Volatility Portfolios |
Asset Class | Target Allocations | |
U.S. Stocks | 30-45% | |
Ivy VIP Core Equity | 0-15% | |
Ivy VIP Growth | 0-15% | |
Ivy VIP Mid Cap Growth | 0-10% | |
Ivy VIP Small Cap Core | 0-10% | |
Ivy VIP Small Cap Growth | 0-10% | |
Ivy VIP Value | 0-15% | |
International/Global Stocks | 5-20% | |
Ivy VIP Global Equity Income | 0-20% | |
Ivy VIP Global Growth | 0-20% | |
Ivy VIP International Core Equity | 0-20% | |
Bonds | 0-50% | |
Ivy VIP Corporate Bond | 0-50% | |
Ivy VIP Global Bond | 0-20% | |
Ivy VIP High Income | 0-5% | |
Short-Term Investments | 15-55% | |
Ivy VIP Government Money Market | 0-55% | |
Ivy VIP Limited-Term Bond | 0-55% | |
Total Allocation | 100% |
■ | Derivatives Risk. The use of derivatives presents several risks, including the risk that these instruments may change in value in a manner that adversely affects the Portfolio’s NAV. Derivatives can be highly complex, can create investment leverage, may perform in unanticipated ways and may be highly volatile, and the Portfolio could lose more than the amount it invests. Derivatives may be difficult to value and, depending on the instrument, may at times be highly illiquid, and the Portfolio may not be able to close out or sell a derivative position at a particular time or at an anticipated price. Moreover, some derivatives are more sensitive to interest rate changes and market price fluctuations than others. To the extent the judgment of the Investment Manager as to certain anticipated price movements is incorrect, the risk of loss may be greater than if the derivative technique(s) had not been used. When used for hedging, the change in value of the derivative also may not correlate perfectly with the security or other risk being hedged. |
IVY VIP
Managed Volatility Portfolios |
Prospectus 137 |
Suitable derivatives may not be available in all circumstances, and there can be no assurance that the Portfolio will use derivatives to reduce exposure to other risks when that might be beneficial. Derivatives also may be subject to counterparty credit risk, which includes the risk that the Portfolio may sustain a loss as a result of the insolvency or bankruptcy of, or other non-compliance with the terms in the agreement for the derivatives documentation by, another party to the transaction. When the Portfolio uses derivatives, it will provide margin or collateral bilaterally and/or segregate cash or other liquid assets in a manner that satisfies contractual undertakings and regulatory requirements. The need to provide margin or collateral and/or segregate assets could limit the Portfolio’s ability to pursue other opportunities as they arise. Ongoing changes to regulation of the derivatives markets and potential changes in the regulation of funds using derivatives instruments could change the Portfolio’s opportunities to pursue its investment strategies. |
■ | Fund of Funds Risk. The ability of the Portfolio to meet its investment objective is directly related to its target allocations among the Underlying Funds and the ability of those funds to meet their investment objectives. The Portfolio’s share price will likely change daily based on the performance of the Underlying Funds in which it invests. In general, the Portfolio is subject to the same risks as those of the Underlying Funds it holds. Because the Portfolio is weighted towards Underlying Funds that invest in stocks, both U.S. and foreign, including mid- and small-capitalization stocks, as well as bonds and short-term instruments, the Portfolio is more subject to the risks associated with those investments. |
■ | Equity Funds Risk. The Portfolio invests in equity funds, for which a principal risk is market risk, the chance that stock prices overall will decline over short or even long periods of time. This includes the risk that returns from the stock market segments in which the Portfolio is most heavily indirectly invested may underperform other asset classes, other market segments or the overall stock market. |
■ | Bond Funds Risk. A portion of the Portfolio’s assets may be invested in funds that have exposure to bonds and other fixed-income securities. The principal risks that may be encountered by such investments are: bond prices overall may decline when interest rates rise (interest rate risk); a bond issuer may fail to pay interest and principal in a timely manner (credit risk); and a fixed-income security issuer may repay a higher yielding bond before its maturity date, during periods of falling interest rates (reinvestment risk). Interest rates in the U.S. recently have been at, and remain near, historic lows, which may increase the Portfolio’s exposure to risks associated with rising rates. In addition, a general rise in rates may result in decreased liquidity and increased volatility in the fixed-income markets generally. |
■ | Foreign Securities Risk. A portion of the Portfolio’s assets may be invested in funds with significant exposure to foreign securities, including exposure to emerging markets. Investing in foreign securities involves a number of economic, financial, legal, and political considerations that are not associated with the U.S. markets and that could affect the Portfolio’s performance unfavorably, depending on the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; social, political or economic instability; fluctuations in foreign currency exchange rates and related conversion costs or currency redenomination; nationalization or expropriation of assets; adverse foreign tax consequences; different and/or less stringent financial reporting standards; and settlement, custodial or other operational delays. World markets, or those in a particular region, all may react in similar fashion to important economic or political developments. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. Securities of issuers traded on exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. The likelihood of such suspensions may be higher for securities of issuers in emerging markets than in more developed markets. In the event that the Portfolio holds material positions in such suspended securities, the Portfolio’s ability to liquidate its positions or provide liquidity to investors may be compromised and the Portfolio could incur significant losses. |
138 Prospectus | IVY VIP Managed Volatility Portfolios |
■ | Investment Company Securities Risk. Investment in other investment companies typically reflects the risks of the types of securities in which the investment companies invest. When the Portfolio invests in another investment company, shareholders of the Portfolio bear their proportionate share of the other investment company’s fees and expenses as well as their share of the Portfolio’s fees and expenses, which could result in the duplication of certain fees. |
■ | Leveraging Risk. The risk that certain transactions of the Portfolio, such as transactions in derivative instruments, may give rise to leverage, causing the Portfolio to be more volatile than if it had not been leveraged and can result in losses to the Portfolio that exceed the amount originally invested. Because of leverage, the Portfolio’s investment exposure may exceed the Portfolio’s net assets. |
■ | Managed Volatility Strategy Risk. Securian AM may be unsuccessful in managing volatility, and there is a risk that the Portfolio may experience a high level of volatility in its returns. The Portfolio’s holdings are subject to price volatility, and the Portfolio may not be any less volatile than the market as a whole and could be more volatile. In addition, there can be no guarantee that the Portfolio will achieve its goal of managing the volatility of its equity returns. Furthermore, while the management of volatility seeks competitive returns with more consistent volatility, the management of volatility does not ensure that the Portfolio will deliver competitive returns. Additionally, even if successful, the Portfolio’s management of volatility also may generally result in the Portfolio’s NAV increasing to a lesser degree than the markets (e.g., in a rising market with relatively high volatility) or decreasing to a greater degree than the market (e.g., in a declining market with relatively low volatility). The Portfolio’s managed volatility strategy may expose the Portfolio to losses (some of which may be sudden) to which it would not have otherwise been exposed if it invested only in Underlying Funds. Additionally, the derivatives used by Securian AM to hedge the value of the Portfolio are not identical to the Underlying Funds, and as a result, the Portfolio’s investment in derivatives may decline in value at the same time as the Portfolio’s investment in Underlying Funds. Securian AM does not intend to attempt to manage the volatility of the Portfolio’s fixed-income returns. It is possible that the fixed-income portion of the Portfolio, whose volatility would not be managed by the volatility management strategy, could become more volatile than the equity portion of the Portfolio. |
■ | Management Risk. Portfolio performance is primarily dependent on the Investment Manager's skill in evaluating and managing the Portfolio’s holdings. There can be no guarantee that its decisions will produce the desired results, and the Portfolio may not perform as well as other similar mutual funds. Furthermore, IICO may alter the asset allocation of the Portfolio at its discretion. A material change in the asset allocation could affect both the level of risk and the potential for gain or loss. |
■ | Market Risk. Markets can be volatile, and stock prices change daily, sometimes rapidly or unpredictably. As a result, the Portfolio’s holdings can decline in response to adverse issuer, political, regulatory, market or economic developments or conditions that may cause a broad market decline. Different parts of the market, including different sectors and different types of securities, can react differently to these developments. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. During a general downturn in the financial markets, multiple asset classes may decline in value. When markets perform well, there can be no assurance that specific investments held by the Portfolio will rise in value. At times, the Portfolio may hold a relatively high percentage of its assets in stocks of a particular market sector, which would subject the Portfolio to proportionately higher exposure to the risks of that sector. Additionally, global economies and financial markets are becoming increasingly interconnected, meaning that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Portfolio. In addition, certain events, such as natural disasters, terrorist attacks, war, regional or global instability and other geopolitical events, have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. |
■ | Other Risks Applicable to a Fund of Funds Structure. There are other risks associated with a Fund of Funds structure. IICO has the authority to select and replace Underlying Funds. IICO is subject to a potential conflict of interest in doing so because IICO serves as the investment manager to the Underlying Funds and the advisory fees paid by some of the Underlying Funds are higher than fees paid by other Underlying Funds. It is important to note, however, that IICO has a fiduciary duty to the Portfolio and must act in the Portfolio’s best interests. |
IVY VIP
Managed Volatility Portfolios |
Prospectus 139 |
Chart of Year-by-Year Returns |
as of
December 31 each year |
Average Annual Total Returns | |||
as of December 31, 2019 | 1 Year | 5 Years | Life
of Class |
Class II (began on 8-1-2013) | 14.89% | 4.67% | 5.10% |
Indexes | |||
Current Blended Benchmark1 (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 20.33% | 7.08% | 7.49% |
Former Blended Benchmark2 (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 19.06% | 6.84% | 7.22% |
Russell 3000 Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 31.02% | 11.24% | 12.26% |
Bloomberg Barclays U.S. Credit Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 13.80% | 4.39% | 4.84% |
MSCI EAFE Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 22.01% | 5.67% | 5.27% |
Bloomberg Barclays 1-3 Year Gov/Credit Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 4.03% | 1.67% | 1.49% |
Bloomberg Barclays U.S. Universal Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 9.29% | 3.44% | 3.72% |
Bloomberg Barclays 1-5 Year Gov/Credit Index (reflects no deduction for fees, expenses or taxes) (Life of Class index comparison begins on 8-1-2013) | 5.01% | 2.03% | 1.89% |
1 | The Current Blended Benchmark is computed using a combination of 40% Russell 3000 Index + 30% Bloomberg Barclays U.S. Credit Index + 15% MSCI EAFE Index + 15% Bloomberg Barclays 1-3 Year Gov/Credit Index. This benchmark index change is effective April 30, 2020. IICO believes that this index is more reflective of the types of securities that the Portfolio invests in. Both the Current Blended Benchmark and the Portfolio’s Former Blended Benchmark are included in this Prospectus for comparison purposes. |
2 | The Former Blended Benchmark is computed using a combination of 40% Russell 3000 Index + 30% Bloomberg Barclays U.S. Universal Index + 15% MSCI EAFE Index + 15% Bloomberg Barclays 1-5 Year Gov/Credit Index. |
140 Prospectus | IVY VIP Managed Volatility Portfolios |
IVY VIP
Managed Volatility Portfolios |
Prospectus 141 |
■ | international political developments |
■ | production and distribution policies of the Organization of Petroleum Exporting Countries (OPEC) and other oil-producing countries |
■ | relationships among OPEC members and other oil-producing countries and between those countries and oil-importing nations |
■ | energy conservation |
■ | the regulatory environment |
■ | tax policies |
■ | the economic growth and political stability of the key energy-consuming countries |
■ | When-Issued and Delayed-Delivery Transaction Risk |
■ | To help achieve an investor’s financial objectives through a professionally developed asset allocation program. |
■ | To maximize long-term total returns at a given level of risk through broad diversification among several traditional asset classes. |
Ivy
VIP Pathfinder Aggressive |
Ivy
VIP Pathfinder Moderately Aggressive |
Ivy
VIP Pathfinder Moderate |
Ivy
VIP Pathfinder Moderately Conservative |
Ivy
VIP Pathfinder Conservative | |
U.S. STOCKS: | 50-60% | 45-55% | 40-50% | 35-45% | 30-40% |
Ivy VIP Core Equity | 0-20% | 0-20% | 0-20% | 0-15% | 0-15% |
Ivy VIP Growth | 0-20% | 0-20% | 0-20% | 0-15% | 0-15% |
Ivy VIP Mid Cap Growth | 0-10% | 0-10% | 0-10% | 0-10% | 0-10% |
Ivy VIP Small Cap Core | 0-10% | 0-10% | 0-10% | 0-10% | 0-10% |
Ivy VIP Small Cap Growth | 0-10% | 0-10% | 0-10% | 0-10% | 0-10% |
Ivy VIP Value | 0-20% | 0-20% | 0-20% | 0-15% | 0-15% |
INTERNATIONAL/GLOBAL STOCKS: | 25-35% | 20-30% | 15-25% | 10-20% | 5-15% |
Ivy VIP Global Equity Income | 0-35% | 0-30% | 0-25% | 0-20% | 0-15% |
Ivy VIP Global Growth | 0-35% | 0-30% | 0-25% | 0-20% | 0-15% |
Ivy VIP International Core Equity | 0-35% | 0-30% | 0-25% | 0-20% | 0-15% |
BONDS: | 0-20% | 0-25% | 0-30% | 0-35% | 0-40% |
Ivy VIP Corporate Bond | 0-20% | 0-25% | 0-30% | 0-35% | 0-40% |
Ivy VIP Global Bond | 0-15% | 0-15% | 0-15% | 0-20% | 0-20% |
Ivy VIP High Income | 0-10% | 0-10% | 0-10% | 0-5% | 0-5% |
SHORT-TERM INVESTMENTS: | 0-25% | 5-35% | 10-45% | 15-55% | 20-65% |
Ivy VIP Government Money Market | 0-25% | 0-35% | 0-45% | 0-55% | 0-65% |
Ivy VIP Limited-Term Bond | 0-25% | 0-35% | 0-45% | 0-55% | 0-65% |
Asset Class | Underlying Investments |
U.S. Stocks | |
Large Cap Stocks | Ivy VIP Core Equity seeks to provide capital growth and appreciation. |
Ivy VIP Growth seeks to provide growth of capital. | |
Ivy VIP Value seeks to provide capital appreciation. | |
Mid Cap Stocks | Ivy VIP Mid Cap Growth seeks to provide growth of capital. |
Small Cap Stocks | Ivy VIP Small Cap Core seeks to provide capital appreciation. |
Ivy VIP Small Cap Growth seeks to provide growth of capital. | |
International/Global Stocks | Ivy VIP Global Equity Income seeks to provide total return through a combination of current income and capital appreciation. |
Ivy VIP Global Growth seeks to provide growth of capital. | |
Ivy VIP International Core Equity seeks to provide capital growth and appreciation. | |
Bonds | Ivy VIP Corporate Bond seeks to provide current income consistent with preservation of capital. |
Ivy VIP Global Bond seeks to provide a high level of current income. Capital appreciation is a secondary objective. | |
Ivy VIP High Income seeks to provide total return through a combination of high current income and capital appreciation. | |
Short-Term Investments | Ivy VIP Government Money Market seeks to provide current income consistent with maintaining liquidity and preservation of capital. |
Ivy VIP Limited-Term Bond seeks to provide current income consistent with preservation of capital. |
■ | To help achieve an investor’s financial objectives through a professionally developed asset allocation program. |
■ | To maximize long-term total returns at a given level of risk through broad diversification among several traditional asset classes and through a volatility management strategy that is intended to manage the volatility of the Portfolio’s equity returns. |
Ivy
VIP Pathfinder Moderate — Managed Volatility |
Ivy
VIP Pathfinder Moderately Aggressive — Managed Volatility |
Ivy
VIP Pathfinder Moderately Conservative — Managed Volatility | |
U.S. STOCKS: | 35-50% | 40-55% | 30-45% |
Ivy VIP Core Equity | 0-20% | 0-20% | 0-15% |
Ivy VIP Growth | 0-20% | 0-20% | 0-15% |
Ivy VIP Mid Cap Growth | 0-10% | 0-10% | 0-10% |
Ivy VIP Small Cap Core | 0-10% | 0-10% | 0-10% |
Ivy VIP Small Cap Growth | 0-10% | 0-10% | 0-10% |
Ivy VIP Value | 0-20% | 0-20% | 0-15% |
INTERNATIONAL/GLOBAL STOCKS: | 10-25% | 15-30% | 5-20% |
Ivy VIP Global Equity Income | 0-25% | 0-30% | 0-20% |
Ivy VIP Global Growth | 0-25% | 0-30% | 0-20% |
Ivy VIP International Core Equity | 0-25% | 0-30% | 0-20% |
BONDS: | 0-45% | 0-40% | 0-50% |
Ivy VIP Corporate Bond | 0-45% | 0-40% | 0-50% |
Ivy VIP Global Bond | 0-15% | 0-15% | 0-20% |
Ivy VIP High Income | 0-10% | 0-10% | 0-5% |
SHORT-TERM INVESTMENTS: | 10-45% | 5-35% | 15-55% |
Ivy VIP Government Money Market | 0-45% | 0-35% | 0-55% |
Ivy VIP Limited-Term Bond | 0-45% | 0-35% | 0-55% |
Asset Class | Underlying Investments |
U.S. Stocks | |
Large Cap Stocks | Ivy VIP Core Equity seeks to provide capital growth and appreciation. |
Ivy VIP Growth seeks to provide growth of capital. | |
Ivy VIP Value seeks to provide capital appreciation. | |
Mid Cap Stocks | Ivy VIP Mid Cap Growth seeks to provide growth of capital. |
Small Cap Stocks | Ivy VIP Small Cap Core seeks to provide capital appreciation. |
Ivy VIP Small Cap Growth seeks to provide growth of capital. | |
International/Global Stocks | Ivy VIP Global Equity Income seeks to provide total return through a combination of current income and capital appreciation. |
Ivy VIP Global Growth seeks to provide growth of capital. | |
Ivy VIP International Core Equity seeks to provide capital growth and appreciation. | |
Bonds | Ivy VIP Corporate Bond seeks to provide current income consistent with preservation of capital. |
Ivy VIP Global Bond seeks to provide a high level of current income. Capital appreciation is a secondary objective. | |
Ivy VIP High Income seeks to provide total return through a combination of high current income and capital appreciation. |
Asset Class | Underlying Investments |
Short-Term Investments | Ivy VIP Government Money Market seeks to provide current income consistent with maintaining liquidity and preservation of capital. |
Ivy VIP Limited-Term Bond seeks to provide current income consistent with preservation of capital. |
Net Management Fees Paid | |
Ivy VIP Asset Strategy | 0.70% |
Ivy VIP Balanced | 0.70% |
Ivy VIP Core Equity | 0.70% |
Ivy VIP Corporate Bond | 0.47% |
Ivy VIP Energy | 0.85% |
Ivy VIP Global Bond | 0.00% 1 |
Ivy VIP Global Equity Income | 0.70% |
Ivy VIP Global Growth | 0.85% |
Ivy VIP Government Money Market | 0.35% |
Ivy VIP Growth | 0.70% |
Ivy VIP High Income | 0.61% |
Ivy VIP International Core Equity | 0.85% |
Ivy VIP Limited-Term Bond | 0.50% |
Ivy VIP Mid Cap Growth | 0.80% |
Ivy VIP Natural Resources | 0.85% |
Ivy VIP Pathfinder Moderate — Managed Volatility | 0.19% |
Ivy VIP Pathfinder Moderately Aggressive — Managed Volatility | 0.20% |
Ivy VIP Pathfinder Moderately Conservative — Managed Volatility | 0.20% |
Ivy VIP Science and Technology | 0.85% |
Ivy VIP Securian Real Estate Securities | 0.81% |
Ivy VIP Small Cap Core | 0.85% |
Ivy VIP Small Cap Growth | 0.83% |
Ivy VIP Value | 0.70% |
1 | For Portfolios managed solely by IICO, IICO has voluntarily agreed to waive its management fee for any day that a portfolio’s net assets are less than $25 million, subject to IICO’s right to change or modify this waiver. |
■ | Securities traded on an exchange held by a Portfolio ordinarily are valued by an independent pricing service at their closing price as reported by the principal securities exchange on which the securities are traded. |
■ | If a price from the primary independent pricing service is not available, a price will be obtained from another independent pricing service. In the event a price is not available from an independent pricing service, a price will be sought from an exchange. |
■ | Fixed-income securities, including bonds, foreign bonds, convertible bonds, municipal bonds, U.S. government securities, mortgage-backed securities and swap agreements ordinarily are valued according to prices quoted by an independent pricing service. |
■ | Precious metals are valued at the last traded spot price for the appropriate metal immediately prior to the time of valuation. |
■ | Other investment assets for which market prices are unavailable or are not reflective of current market value are valued at their fair value by or at the direction of the Board, as discussed below. |
■ | the NYSE is closed other than weekends or holidays, when trading on the NYSE is restricted |
■ | the SEC has determined that a state of emergency exists which may make payment or transfer not reasonably practicable |
■ | the SEC has permitted suspension of the right of redemption of shares for the protection of the security holders of the Trust |
■ | applicable laws and regulations otherwise permit the Trust to suspend payment on the redemption of shares |
■ | PICs for whose Policies the Portfolios are underlying investment options; or |
■ | broker-dealers and other financial intermediaries that sell Policies that include the Portfolios as underlying investment options. |
■ | financial advisors and other registered and unregistered persons affiliated with Ivy; |
■ | broker-dealers and other financial intermediaries that sell such Policies; and |
■ | insurance companies that include shares of the Portfolios as underlying investment options. |
FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD | |||||||
Net
Asset Value, Beginning of Period |
Net
Investment Income (Loss)(1) |
Net
Realized and Unrealized Gain (Loss) on Investments |
Total
from Investment Operations |
Distributions
From Net Investment Income |
Distributions
From Net Realized Gains |
Total
Distributions | |
Asset
Strategy Class I Shares | |||||||
Year ended 12-31-2019 | $ 8.29 | $ 0.20 | $ 1.63 | $ 1.83 | $ (0.23) | $ (0.39) | $ (0.62) |
Year ended 12-31-2018 | 9.37 | 0.18 | (0.67) | (0.49) | (0.20) | (0.39) | (0.59) |
Year ended 12-31-2017(4) | 8.57 | 0.08 | 0.88 | 0.96 | (0.16) | — | (0.16) |
Class II Shares | |||||||
Year ended 12-31-2019 | 8.29 | 0.18 | 1.62 | 1.80 | (0.20) | (0.39) | (0.59) |
Year ended 12-31-2018 | 9.37 | 0.16 | (0.67) | (0.51) | (0.18) | (0.39) | (0.57) |
Year ended 12-31-2017 | 8.04 | 0.03 | 1.44 | 1.47 | (0.14) | — | (0.14) |
Year ended 12-31-2016 | 8.30 | 0.06 | (0.27) | (0.21) | (0.05) | — | (0.05) |
Year ended 12-31-2015 | 10.87 | 0.08 | (0.77) | (0.69) | (0.04) | (1.84) | (1.88) |
Balanced
Class II Shares | |||||||
Year ended 12-31-2019 | 7.46 | 0.11 | 1.44 | 1.55 | (0.14) | (0.65) | (0.79) |
Year ended 12-31-2018 | 7.95 | 0.12 | (0.36) | (0.24) | (0.13) | (0.12) | (0.25) |
Year ended 12-31-2017 | 7.47 | 0.12 | 0.70 | 0.82 | (0.12) | (0.22) | (0.34) |
Year ended 12-31-2016 | 8.76 | 0.11 | 0.00* | 0.11 | (0.12) | (1.28) | (1.40) |
Year ended 12-31-2015 | 10.19 | 0.12 | (0.09) | 0.03 | (0.09) | (1.37) | (1.46) |
Energy
Class I Shares | |||||||
Year ended 12-31-2019 | 3.88 | 0.03 | 0.11 | 0.14 | — | — | — |
Year ended 12-31-2018 | 5.87 | 0.00* | (1.99) | (1.99) | — | — | — |
Year ended 12-31-2017(4) | 5.84 | 0.06 | 0.02 | 0.08 | (0.05) | — | (0.05) |
Class II Shares | |||||||
Year ended 12-31-2019 | 3.87 | 0.02 | 0.11 | 0.13 | — | — | — |
Year ended 12-31-2018 | 5.87 | (0.02) | (1.98) | (2.00) | — | — | — |
Year ended 12-31-2017 | 6.77 | 0.04 | (0.90) | (0.86) | (0.04) | — | (0.04) |
Year ended 12-31-2016 | 5.04 | (0.02) | 1.76 | 1.74 | (0.01) | — | (0.01) |
Year ended 12-31-2015 | 6.51 | 0.00* | (1.44) | (1.44) | —* | (0.03) | (0.03) |
Growth
Class II Shares | |||||||
Year ended 12-31-2019 | 11.02 | (0.01) | 3.58 | 3.57 | — | (3.26) | (3.26) |
Year ended 12-31-2018 | 12.09 | 0.00* | 0.36 | 0.36 | —* | (1.43) | (1.43) |
Year ended 12-31-2017 | 10.30 | 0.01 | 2.84 | 2.85 | (0.03) | (1.03) | (1.06) |
Year ended 12-31-2016 | 11.42 | 0.03 | 0.03 | 0.06 | —* | (1.18) | (1.18) |
Year ended 12-31-2015 | 12.08 | 0.00* | 0.85 | 0.85 | (0.01) | (1.50) | (1.51) |
High
Income Class I Shares | |||||||
Year ended 12-31-2019 | 3.35 | 0.24 | 0.13 | 0.37 | (0.24) | — | (0.24) |
Year ended 12-31-2018 | 3.65 | 0.23 | (0.29) | (0.06) | (0.24) | — | (0.24) |
Year ended 12-31-2017(4) | 3.73 | 0.16 | (0.03) | 0.13 | (0.21) | — | (0.21) |
Class II Shares | |||||||
Year ended 12-31-2019 | 3.34 | 0.23 | 0.13 | 0.36 | (0.23) | — | (0.23) |
Year ended 12-31-2018 | 3.64 | 0.22 | (0.29) | (0.07) | (0.23) | — | (0.23) |
Year ended 12-31-2017 | 3.61 | 0.23 | 0.01 | 0.24 | (0.21) | — | (0.21) |
Year ended 12-31-2016 | 3.35 | 0.24 | 0.28 | 0.52 | (0.26) | — | (0.26) |
Year ended 12-31-2015 | 3.85 | 0.26 | (0.48) | (0.22) | (0.24) | (0.04) | (0.28) |
International
Core Equity Class II Shares | |||||||
Year ended 12-31-2019 | 14.66 | 0.29 | 2.28 | 2.57 | (0.25) | (1.33) | (1.58) |
Year ended 12-31-2018 | 18.58 | 0.30 | (3.45) | (3.15) | (0.28) | (0.49) | (0.77) |
Year ended 12-31-2017 | 15.30 | 0.23 | 3.29 | 3.52 | (0.24) | — | (0.24) |
Year ended 12-31-2016 | 15.53 | 0.24 | (0.11) | 0.13 | (0.20) | (0.16) | (0.36) |
Year ended 12-31-2015 | 18.00 | 0.20 | (0.06) | 0.14 | (0.24) | (2.37) | (2.61) |
* | Not shown due to rounding. |
(1) | Based on average weekly shares outstanding. |
(2) | Based on net asset value. Total returns do not reflect a sales charge or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized. |
Net
Asset Value, End of Period |
Total
Return(2) |
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(3) |
Ratio
of Net Investment Income (Loss) to Average Net Assets Excluding Expense Waiver(3) |
Portfolio
Turnover Rate | |
Asset
Strategy Class I Shares | ||||||||
Year ended 12-31-2019 | $ 9.50 | 22.08% | $ 1 | 0.77% | 2.19% | 0.77% | 2.19% | 46% |
Year ended 12-31-2018 | 8.29 | -5.20 | —* | 0.78 | 1.91 | 0.78 | 1.91 | 58 |
Year ended 12-31-2017(4) | 9.37 | 11.16 | —* | 0.74 (5) | 1.30 (5) | — | — | 39 (6) |
Class II Shares | ||||||||
Year ended 12-31-2019 | 9.50 | 21.78 | 772 | 1.02 | 1.94 | — | — | 46 |
Year ended 12-31-2018 | 8.29 | -5.44 | 753 | 1.03 | 1.65 | — | — | 58 |
Year ended 12-31-2017 | 9.37 | 18.27 | 936 | 1.02 | 0.35 | — | — | 39 |
Year ended 12-31-2016 | 8.04 | -2.57 | 954 | 1.01 | 0.70 | 1.02 | 0.69 | 68 |
Year ended 12-31-2015 | 8.30 | -8.35 | 1,268 | 0.98 | 0.81 | 0.99 | 0.80 | 70 |
Balanced
Class II Shares | ||||||||
Year ended 12-31-2019 | 8.22 | 22.09 | 341 | 1.01 | 1.38 | — | — | 44 |
Year ended 12-31-2018 | 7.46 | -3.24 | 310 | 1.01 | 1.55 | — | — | 54 |
Year ended 12-31-2017 | 7.95 | 11.37 | 362 | 1.01 | 1.54 | — | — | 48 |
Year ended 12-31-2016 | 7.47 | 2.03 | 361 | 1.01 | 1.53 | — | — | 54 |
Year ended 12-31-2015 | 8.76 | -0.32 | 383 | 1.00 | 1.28 | — | — | 44 |
Energy
Class I Shares | ||||||||
Year ended 12-31-2019 | 4.02 | 3.74 | —* | 1.04 | 0.64 | — | — | 21 |
Year ended 12-31-2018 | 3.88 | -33.96 | —* | 0.94 | -0.09 | 0.94 | -0.09 | 37 |
Year ended 12-31-2017(4) | 5.87 | 1.55 | —* | 0.92 (5) | 1.70 (5) | — | — | 22 (6) |
Class II Shares | ||||||||
Year ended 12-31-2019 | 4.00 | 3.48 | 42 | 1.29 | 0.42 | — | — | 21 |
Year ended 12-31-2018 | 3.87 | -34.14 | 39 | 1.19 | -0.41 | — | — | 37 |
Year ended 12-31-2017 | 5.87 | -12.64 | 169 | 1.19 | 0.75 | — | — | 22 |
Year ended 12-31-2016 | 6.77 | 34.55 | 196 | 1.19 | -0.27 | — | — | 31 |
Year ended 12-31-2015 | 5.04 | -22.14 | 117 | 1.20 | 0.08 | — | — | 34 |
Growth
Class II Shares | ||||||||
Year ended 12-31-2019 | 11.33 | 36.59 | 791 | 1.00 | -0.05 | — | — | 30 |
Year ended 12-31-2018 | 11.02 | 2.28 | 669 | 1.00 | -0.02 | — | — | 37 |
Year ended 12-31-2017 | 12.09 | 29.34 | 883 | 0.99 | 0.05 | — | — | 41 |
Year ended 12-31-2016 | 10.30 | 1.22 | 835 | 0.98 | 0.26 | 1.00 | 0.24 | 53 |
Year ended 12-31-2015 | 11.42 | 7.17 | 897 | 0.96 | 0.03 | 0.99 | — | 30 |
High
Income Class I Shares | ||||||||
Year ended 12-31-2019 | 3.48 | 11.49 | 27 | 0.67 | 6.82 | — | — | 35 |
Year ended 12-31-2018 | 3.35 | -1.86 | 44 | 0.66 | 6.50 | 0.66 | 6.50 | 42 |
Year ended 12-31-2017(4) | 3.65 | 3.42 | 56 | 0.66 (5) | 6.53 (5) | — | — | 52 (6) |
Class II Shares | ||||||||
Year ended 12-31-2019 | 3.47 | 11.19 | 859 | 0.92 | 6.57 | — | — | 35 |
Year ended 12-31-2018 | 3.34 | -2.11 | 803 | 0.91 | 6.27 | — | — | 42 |
Year ended 12-31-2017 | 3.64 | 6.68 | 887 | 0.91 | 6.22 | — | — | 52 |
Year ended 12-31-2016 | 3.61 | 16.19 | 845 | 0.89 | 6.97 | 0.92 | 6.94 | 36 |
Year ended 12-31-2015 | 3.35 | -6.50 | 725 | 0.89 | 7.01 | 0.92 | 6.98 | 44 |
International
Core Equity Class II Shares | ||||||||
Year ended 12-31-2019 | 15.65 | 18.69 | 699 | 1.16 | 1.93 | — | — | 69 |
Year ended 12-31-2018 | 14.66 | -17.81 | 676 | 1.16 | 1.70 | — | — | 51 |
Year ended 12-31-2017 | 18.58 | 23.16 | 835 | 1.16 | 1.33 | — | — | 59 |
Year ended 12-31-2016 | 15.30 | 1.08 | 736 | 1.17 | 1.60 | — | — | 77 |
Year ended 12-31-2015 | 15.53 | -0.94 | 675 | 1.16 | 1.18 | — | — | 87 |
(3) | Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses. |
(4) | For the period from April 28, 2017 (commencement of operations of the class) through December 31, 2017. |
(5) | Annualized. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the period ended December 31, 2017. |
FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD | |||||||
Net
Asset Value, Beginning of Period |
Net
Investment Income (Loss)(1) |
Net
Realized and Unrealized Gain (Loss) on Investments |
Total
from Investment Operations |
Distributions
From Net Investment Income |
Distributions
From Net Realized Gains |
Total
Distributions | |
Mid
Cap Growth Class I Shares | |||||||
Year ended 12-31-2019 | $ 11.10 | $ (0.02) | $ 3.95 | $ 3.93 | $ — | $ (2.26) | $ (2.26) |
Year ended 12-31-2018 | 11.63 | (0.02) | 0.09 | 0.07 | — | (0.60) | (0.60) |
Year ended 12-31-2017(4) | 10.30 | 0.00* | 1.64 | 1.64 | — | (0.31) | (0.31) |
Class II Shares | |||||||
Year ended 12-31-2019 | 11.07 | (0.06) | 3.94 | 3.88 | — | (2.26) | (2.26) |
Year ended 12-31-2018 | 11.61 | (0.05) | 0.09 | 0.04 | — | (0.58) | (0.58) |
Year ended 12-31-2017 | 9.44 | (0.04) | 2.52 | 2.48 | — | (0.31) | (0.31) |
Year ended 12-31-2016 | 9.42 | (0.01) | 0.55 | 0.54 | — | (0.52) | (0.52) |
Year ended 12-31-2015 | 10.84 | (0.01) | (0.52) | (0.53) | — | (0.89) | (0.89) |
Natural
Resources Class II Shares | |||||||
Year ended 12-31-2019 | 3.55 | 0.07 | 0.26 | 0.33 | (0.04) | — | (0.04) |
Year ended 12-31-2018 | 4.63 | 0.03 | (1.10) | (1.07) | (0.01) | — | (0.01) |
Year ended 12-31-2017 | 4.50 | 0.00* | 0.14 | 0.14 | (0.01) | — | (0.01) |
Year ended 12-31-2016 | 3.66 | 0.01 | 0.86 | 0.87 | (0.03) | — | (0.03) |
Year ended 12-31-2015 | 4.72 | 0.02 | (1.08) | (1.06) | —* | — | —* |
Science
and Technology Class I Shares | |||||||
Year ended 12-31-2019 | 21.91 | (0.06) | 10.95 | 10.89 | — | (2.86) | (2.86) |
Year ended 12-31-2018 | 27.04 | (0.03) | (1.24) | (1.27) | — | (3.86) | (3.86) |
Year ended 12-31-2017(4) | 25.22 | (0.04) | 4.16 | 4.12 | — | (2.30) | (2.30) |
Class II Shares | |||||||
Year ended 12-31-2019 | 21.84 | (0.13) | 10.90 | 10.77 | — | (2.79) | (2.79) |
Year ended 12-31-2018 | 27.04 | (0.11) | (1.23) | (1.34) | — | (3.86) | (3.86) |
Year ended 12-31-2017 | 22.34 | (0.13) | 7.08 | 6.95 | — | (2.25) | (2.25) |
Year ended 12-31-2016 | 22.96 | (0.11) | 0.34 | 0.23 | — | (0.85) | (0.85) |
Year ended 12-31-2015 | 25.02 | (0.15) | (0.41) | (0.56) | — | (1.50) | (1.50) |
Small
Cap Core Class II Shares | |||||||
Year ended 12-31-2019 | 13.51 | 0.00* | 3.12 | 3.12 | — | (2.92) | (2.92) |
Year ended 12-31-2018 | 18.32 | (0.06) | (1.37) | (1.43) | (0.02) | (3.36) | (3.38) |
Year ended 12-31-2017 | 18.34 | 0.00* | 2.21 | 2.21 | — | (2.23) | (2.23) |
Year ended 12-31-2016 | 15.66 | 0.01 | 4.17 | 4.18 | (0.07) | (1.43) | (1.50) |
Year ended 12-31-2015 | 17.98 | 0.05 | (0.95) | (0.90) | (0.02) | (1.40) | (1.42) |
Small
Cap Growth Class I Shares | |||||||
Year ended 12-31-2019 | 7.69 | (0.05) | 1.85 | 1.80 | — | (0.69) | (0.69) |
Year ended 12-31-2018(5) | 8.76 | 0.00* | (1.07) | (1.07) | — | — | — |
Class II Shares | |||||||
Year ended 12-31-2019 | 7.68 | (0.07) | 1.85 | 1.78 | — | (0.69) | (0.69) |
Year ended 12-31-2018 | 11.63 | (0.06) | 0.03 | (0.03) | (0.05) | (3.87) | (3.92) |
Year ended 12-31-2017 | 9.69 | (0.07) | 2.27 | 2.20 | — | (0.26) | (0.26) |
Year ended 12-31-2016 | 10.60 | (0.07) | 0.23 | 0.16 | — | (1.07) | (1.07) |
Year ended 12-31-2015 | 12.15 | (0.09) | 0.51 | 0.42 | — | (1.97) | (1.97) |
* | Not shown due to rounding. |
(1) | Based on average weekly shares outstanding. |
(2) | Based on net asset value. Total returns do not reflect a sales charge or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized. |
(3) | Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses. |
(4) | For the period from April 28, 2017 (commencement of operations of the class) through December 31, 2017. |
Net
Asset Value, End of Period |
Total
Return(2) |
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(3) |
Ratio
of Net Investment Income (Loss) to Average Net Assets Excluding Expense Waiver(3) |
Portfolio
Turnover Rate | |
Mid
Cap Growth Class I Shares | ||||||||
Year ended 12-31-2019 | $ 12.77 | 38.28% | $ 233 | 0.85% | -0.20% | 0.90% | -0.25% | 20% |
Year ended 12-31-2018 | 11.10 | 0.20 | 184 | 0.85 | -0.14 | 0.90 | -0.19 | 53 |
Year ended 12-31-2017(4) | 11.63 | 16.44 | 131 | 0.85 (6) | 0.05 (6) | 0.89 (6) | 0.01 (6) | 25 (7) |
Class II Shares | ||||||||
Year ended 12-31-2019 | 12.69 | 37.94 | 315 | 1.10 | -0.45 | 1.15 | -0.50 | 20 |
Year ended 12-31-2018 | 11.07 | -0.06 | 230 | 1.10 | -0.42 | 1.15 | -0.47 | 53 |
Year ended 12-31-2017 | 11.61 | 26.89 | 585 | 1.11 | -0.39 | 1.15 | -0.43 | 25 |
Year ended 12-31-2016 | 9.44 | 6.12 | 615 | 1.10 | -0.09 | 1.15 | -0.14 | 33 |
Year ended 12-31-2015 | 9.42 | -5.78 | 586 | 1.10 | -0.07 | 1.15 | -0.12 | 42 |
Natural
Resources Class II Shares | ||||||||
Year ended 12-31-2019 | 3.84 | 9.46 | 88 | 1.24 | 1.88 | — | — | 36 |
Year ended 12-31-2018 | 3.55 | -23.23 | 88 | 1.21 | 0.72 | — | — | 33 |
Year ended 12-31-2017 | 4.63 | 2.97 | 131 | 1.36 | 0.11 | — | — | 44 |
Year ended 12-31-2016 | 4.50 | 23.81 | 144 | 1.36 | 0.20 | — | — | 67 |
Year ended 12-31-2015 | 3.66 | -22.39 | 114 | 1.35 | 0.54 | — | — | 34 |
Science
and Technology Class I Shares | ||||||||
Year ended 12-31-2019 | 29.94 | 49.86 | 1 | 0.90 | -0.23 | — | — | 31 |
Year ended 12-31-2018 | 21.91 | -5.00 | 1 | 0.91 | -0.11 | 0.91 | -0.11 | 17 |
Year ended 12-31-2017(4) | 27.04 | 17.24 | —* | 0.90 (6) | -0.25 (6) | — | — | 27 (7) |
Class II Shares | ||||||||
Year ended 12-31-2019 | 29.82 | 49.48 | 579 | 1.15 | -0.48 | — | — | 31 |
Year ended 12-31-2018 | 21.84 | -5.23 | 429 | 1.16 | -0.38 | — | — | 17 |
Year ended 12-31-2017 | 27.04 | 32.12 | 645 | 1.15 | -0.51 | — | — | 27 |
Year ended 12-31-2016 | 22.34 | 1.54 | 514 | 1.15 | -0.52 | 1.17 | -0.54 | 16 |
Year ended 12-31-2015 | 22.96 | -2.88 | 582 | 1.13 | -0.60 | 1.15 | -0.62 | 25 |
Small
Cap Core Class II Shares | ||||||||
Year ended 12-31-2019 | 13.71 | 24.33 | 188 | 1.18 | -0.05 | — | — | 126 |
Year ended 12-31-2018 | 13.51 | -10.49 | 175 | 1.17 | -0.34 | — | — | 112 |
Year ended 12-31-2017 | 18.32 | 13.73 | 316 | 1.15 | 0.01 | — | — | 112 |
Year ended 12-31-2016 | 18.34 | 28.88 | 348 | 1.16 | 0.08 | — | — | 182 |
Year ended 12-31-2015 | 15.66 | -5.58 | 318 | 1.15 | 0.26 | — | — | 142 |
Small
Cap Growth Class I Shares | ||||||||
Year ended 12-31-2019 | 8.80 | 23.68 | 58 | 0.89 | -0.60 | 0.91 | -0.62 | 41 |
Year ended 12-31-2018(5) | 7.69 | -12.24 | 52 | 1.05 (6)(9) | 0.15 (6) | 1.07 (6) | 0.13 (6) | 52 (8) |
Class II Shares | ||||||||
Year ended 12-31-2019 | 8.77 | 23.37 | 331 | 1.14 | -0.84 | 1.17 | -0.87 | 41 |
Year ended 12-31-2018 | 7.68 | -4.11 | 300 | 1.16 (10) | -0.52 | 1.18 | -0.54 | 52 |
Year ended 12-31-2017 | 11.63 | 23.12 | 377 | 1.15 | -0.69 | 1.17 | -0.71 | 55 |
Year ended 12-31-2016 | 9.69 | 2.92 | 426 | 1.14 | -0.79 | 1.16 | -0.81 | 107 |
Year ended 12-31-2015 | 10.60 | 1.88 | 430 | 1.13 | -0.76 | 1.15 | -0.78 | 102 |
(5) | For the period from November 5, 2018 (commencement of operations of the class) through December 31, 2018. |
(6) | Annualized. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the period ended December 31, 2017. |
(8) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the period ended December 31, 2018. |
(9) | Expense ratio based on the period excluding reorganization expenses was 0.89%. |
(10) | Expense ratio based on the period excluding reorganization expenses was 1.14%. |
FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD | |||||||
Net
Asset Value, Beginning of Period |
Net
Investment Income(1) |
Net
Realized and Unrealized Gain (Loss) on Investments |
Total
from Investment Operations |
Distributions
From Net Investment Income |
Distributions
From Net Realized Gains |
Total
Distributions | |
Core
Equity Class II Shares | |||||||
Year ended 12-31-2019 | $10.80 | $0.06 | $ 3.10 | $ 3.16 | $ (0.07) | $ (1.26) | $ (1.33) |
Year ended 12-31-2018 | 12.30 | 0.07 | (0.53) | (0.46) | (0.06) | (0.98) | (1.04) |
Year ended 12-31-2017 | 10.67 | 0.05 | 2.09 | 2.14 | (0.05) | (0.46) | (0.51) |
Year ended 12-31-2016 | 11.75 | 0.05 | 0.32 | 0.37 | (0.05) | (1.40) | (1.45) |
Year ended 12-31-2015 | 14.18 | 0.05 | (0.06) | (0.01) | (0.05) | (2.37) | (2.42) |
Corporate
Bond Class II Shares | |||||||
Year ended 12-31-2019 | 5.13 | 0.15 | 0.47 | 0.62 | (0.15) | — | (0.15) |
Year ended 12-31-2018 | 5.35 | 0.14 | (0.24) | (0.10) | (0.11) | (0.01) | (0.12) |
Year ended 12-31-2017 | 5.27 | 0.12 | 0.08 | 0.20 | (0.08) | (0.04) | (0.12) |
Year ended 12-31-2016 | 5.20 | 0.12 | 0.09 | 0.21 | (0.13) | (0.01) | (0.14) |
Year ended 12-31-2015 | 5.34 | 0.10 | (0.09) | 0.01 | (0.15) | — | (0.15) |
Global
Bond Class II Shares | |||||||
Year ended 12-31-2019 | 4.81 | 0.20 | 0.24 | 0.44 | (0.18) | — | (0.18) |
Year ended 12-31-2018 | 4.96 | 0.17 | (0.18) | (0.01) | (0.14) | — | (0.14) |
Year ended 12-31-2017 | 4.89 | 0.15 | 0.06 | 0.21 | (0.14) | — | (0.14) |
Year ended 12-31-2016 | 4.74 | 0.16 | 0.17 | 0.33 | (0.18) | — | (0.18) |
Year ended 12-31-2015 | 5.05 | 0.19 | (0.31) | (0.12) | (0.19) | — | (0.19) |
Global
Equity Income Class II Shares | |||||||
Year ended 12-31-2019 | 6.89 | 0.16 | 1.17 | 1.33 | (0.22) | (1.99) | (2.21) |
Year ended 12-31-2018 | 8.58 | 0.16 | (1.07) | (0.91) | (0.14) | (0.64) | (0.78) |
Year ended 12-31-2017 | 7.79 | 0.13 | 1.03 | 1.16 | (0.10) | (0.27) | (0.37) |
Year ended 12-31-2016 | 7.82 | 0.11 | 0.40 | 0.51 | (0.10) | (0.44) | (0.54) |
Year ended 12-31-2015 | 9.05 | 0.09 | (0.23) | (0.14) | (0.11) | (0.98) | (1.09) |
Global
Growth Class II Shares | |||||||
Year ended 12-31-2019 | 8.67 | 0.02 | 1.45 | 1.47 | (0.06) | (6.50) | (6.56) |
Year ended 12-31-2018 | 9.87 | 0.05 | (0.58) | (0.53) | (0.05) | (0.62) | (0.67) |
Year ended 12-31-2017 | 8.14 | 0.04 | 1.93 | 1.97 | — * | (0.24) | (0.24) |
Year ended 12-31-2016 | 8.68 | 0.01 | (0.28) | (0.27) | (0.02) | (0.25) | (0.27) |
Year ended 12-31-2015 | 8.84 | 0.02 | 0.31 | 0.33 | (0.04) | (0.45) | (0.49) |
Limited-Term
Bond Class II Shares | |||||||
Year ended 12-31-2019 | 4.84 | 0.09 | 0.11 | 0.20 | (0.09) | — | (0.09) |
Year ended 12-31-2018 | 4.88 | 0.09 | (0.05) | 0.04 | (0.08) | — | (0.08) |
Year ended 12-31-2017 | 4.89 | 0.08 | (0.01) | 0.07 | (0.08) | — | (0.08) |
Year ended 12-31-2016 | 4.87 | 0.08 | 0.01 | 0.09 | (0.07) | — | (0.07) |
Year ended 12-31-2015 | 4.90 | 0.06 | (0.02) | 0.04 | (0.07) | — | (0.07) |
Securian
Real Estate Securities Class II Shares | |||||||
Year ended 12-31-2019 | 6.60 | 0.17 | 1.43 | 1.60 | (0.12) | (0.03) | (0.15) |
Year ended 12-31-2018 | 7.64 | 0.10 | (0.54) | (0.44) | (0.11) | (0.49) | (0.60) |
Year ended 12-31-2017 | 8.40 | 0.11 | 0.27 | 0.38 | (0.11) | (1.03) | (1.14) |
Year ended 12-31-2016 | 8.98 | 0.10 | 0.25 | 0.35 | (0.10) | (0.84) | (0.94) |
Year ended 12-31-2015 | 9.59 | 0.10 | 0.31 | 0.41 | (0.10) | (0.92) | (1.02) |
Value
Class II Shares | |||||||
Year ended 12-31-2019 | 5.69 | 0.11 | 1.32 | 1.43 | (0.05) | (0.35) | (0.40) |
Year ended 12-31-2018 | 6.44 | 0.07 | (0.51) | (0.44) | (0.12) | (0.19) | (0.31) |
Year ended 12-31-2017 | 5.93 | 0.11 | 0.61 | 0.72 | (0.09) | (0.12) | (0.21) |
Year ended 12-31-2016 | 6.15 | 0.08 | 0.49 | 0.57 | (0.07) | (0.72) | (0.79) |
Year ended 12-31-2015 | 7.39 | 0.06 | (0.30) | (0.24) | (0.06) | (0.94) | (1.00) |
* | Not shown due to rounding. |
(1) | Based on average weekly shares outstanding. |
(2) | Based on net asset value. Total returns do not reflect a sales charge or contingent sales charge, if applicable. Total returns for periods less than one year are not annualized. |
(3) | Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses. |
Net
Asset Value, End of Period |
Total
Return(2) |
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(3) |
Ratio
of Net Investment Income to Average Net Assets Excluding Expense Waiver(3) |
Portfolio
Turnover Rate | |
Core
Equity Class II Shares | ||||||||
Year ended 12-31-2019 | $ 12.63 | 31.09% | $ 723 | 0.95% | 0.53% | 1.00% | 0.48% | 80% |
Year ended 12-31-2018 | 10.80 | -4.51 | 626 | 0.95 | 0.59 | 1.00 | 0.54 | 99 |
Year ended 12-31-2017 | 12.30 | 20.75 | 445 | 0.95 | 0.42 | 1.00 | 0.37 | 78 |
Year ended 12-31-2016 | 10.67 | 3.74 | 420 | 0.95 | 0.45 | 1.01 | 0.39 | 75 |
Year ended 12-31-2015 | 11.75 | -0.69 | 454 | 0.95 | 0.38 | 1.00 | 0.33 | 60 |
Corporate
Bond Class II Shares | ||||||||
Year ended 12-31-2019 | 5.60 | 12.18 | 600 | 0.77 | 2.73 | — | — | 66 |
Year ended 12-31-2018 | 5.13 | -1.90 | 544 | 0.77 | 2.77 | — | — | 63 |
Year ended 12-31-2017 | 5.35 | 4.01 | 548 | 0.78 | 2.32 | — | — | 66 |
Year ended 12-31-2016 | 5.27 | 4.03 | 416 | 0.79 | 2.17 | — | — | 84 |
Year ended 12-31-2015 | 5.20 | 0.20 | 280 | 0.78 | 1.87 | — | — | 59 |
Global
Bond Class II Shares | ||||||||
Year ended 12-31-2019 | 5.07 | 9.42 | 21 | 0.50 | 3.96 | 1.13 | 3.33 | 43 |
Year ended 12-31-2018 | 4.81 | -0.18 | 22 | 0.50 | 3.52 | 1.12 | 2.90 | 37 |
Year ended 12-31-2017 | 4.96 | 4.27 | 23 | 0.50 | 3.08 | 1.12 | 2.46 | 49 |
Year ended 12-31-2016 | 4.89 | 7.04 | 22 | 0.50 | 3.28 | 1.13 | 2.65 | 18 |
Year ended 12-31-2015 | 4.74 | -2.65 | 20 | 0.51 | 3.80 | 1.14 | 3.17 | 26 |
Global
Equity Income Class II Shares | ||||||||
Year ended 12-31-2019 | 6.01 | 23.15 | 297 | 1.02 | 2.52 | — | — | 39 |
Year ended 12-31-2018 | 6.89 | -11.68 | 284 | 1.01 | 2.01 | — | — | 93 |
Year ended 12-31-2017 | 8.58 | 15.56 | 527 | 1.00 | 1.60 | — | — | 35 |
Year ended 12-31-2016 | 7.79 | 6.95 | 509 | 1.01 | 1.43 | — | — | 59 |
Year ended 12-31-2015 | 7.82 | -2.06 | 515 | 1.00 | 1.14 | — | — | 50 |
Global
Growth Class II Shares | ||||||||
Year ended 12-31-2019 | 3.58 | 25.93 | 148 | 1.13 | 0.41 | 1.21 | 0.33 | 26 |
Year ended 12-31-2018 | 8.67 | -6.27 | 134 | 1.13 | 0.46 | 1.18 | 0.41 | 40 |
Year ended 12-31-2017 | 9.87 | 24.52 | 424 | 1.14 | 0.47 | 1.17 | 0.44 | 54 |
Year ended 12-31-2016 | 8.14 | -3.04 | 408 | 1.13 | 0.09 | 1.16 | 0.06 | 71 |
Year ended 12-31-2015 | 8.68 | 3.39 | 507 | 1.14 | 0.23 | 1.17 | 0.20 | 54 |
Limited-Term
Bond Class II Shares | ||||||||
Year ended 12-31-2019 | 4.95 | 4.23 | 453 | 0.79 | 1.89 | — | — | 54 |
Year ended 12-31-2018 | 4.84 | 0.78 | 542 | 0.79 | 1.91 | — | — | 53 |
Year ended 12-31-2017 | 4.88 | 1.40 | 443 | 0.80 | 1.62 | — | — | 55 |
Year ended 12-31-2016 | 4.89 | 1.94 | 395 | 0.81 | 1.53 | — | — | 60 |
Year ended 12-31-2015 | 4.87 | 0.87 | 385 | 0.80 | 1.31 | — | — | 44 |
Securian
Real Estate Securities Class II Shares | ||||||||
Year ended 12-31-2019 | 8.05 | 24.43 | 35 | 1.26 | 1.36 | 1.35 | 1.27 | 54 |
Year ended 12-31-2018 | 6.60 | -5.57 | 34 | 1.24 | 1.45 | 1.33 | 1.36 | 71 |
Year ended 12-31-2017 | 7.64 | 5.39 | 43 | 1.22 | 1.38 | 1.31 | 1.29 | 73 |
Year ended 12-31-2016 | 8.39 | 4.26 | 49 | 1.20 | 1.26 | 1.29 | 1.17 | 79 |
Year ended 12-31-2015 | 8.98 | 4.78 | 47 | 1.19 | 1.10 | 1.28 | 1.01 | 57 |
Value
Class II Shares | ||||||||
Year ended 12-31-2019 | 6.72 | 26.33 | 511 | 1.00 | 1.81 | — | — | 62 |
Year ended 12-31-2018 | 5.69 | -7.24 | 446 | 1.00 | 1.09 | — | — | 56 |
Year ended 12-31-2017 | 6.44 | 12.49 | 432 | 1.00 | 1.74 | — | — | 67 |
Year ended 12-31-2016 | 5.93 | 11.14 | 379 | 1.02 | 1.38 | 1.03 | 1.37 | 54 |
Year ended 12-31-2015 | 6.15 | -3.91 | 384 | 0.99 | 0.91 | 1.00 | 0.90 | 74 |
FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD | |||||||
Net
Asset Value, Beginning of Period |
Net
Investment Income(1) |
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 Class II Shares | |||||||
Year ended 12-31-2019 | $ 4.60 | $ 0.07 | $ 0.92 | $ 0.99 | $ (0.14) | $ (0.45) | $ (0.59) |
Year ended 12-31-2018 | 5.16 | 0.13 | (0.32) | (0.19) | (0.09) | (0.28) | (0.37) |
Year ended 12-31-2017 | 4.68 | 0.08 | 0.80 | 0.88 | (0.05) | (0.35) | (0.40) |
Year ended 12-31-2016 | 5.05 | 0.04 | 0.15 | 0.19 | (0.07) | (0.49) | (0.56) |
Year ended 12-31-2015 | 5.73 | 0.07 | (0.01) | 0.06 | (0.16) | (0.58) | (0.74) |
Pathfinder
Conservative Class II Shares | |||||||
Year ended 12-31-2019 | 4.83 | 0.09 | 0.59 | 0.68 | (0.10) | (0.26) | (0.36) |
Year ended 12-31-2018 | 5.16 | 0.10 | (0.20) | (0.10) | (0.06) | (0.17) | (0.23) |
Year ended 12-31-2017 | 4.90 | 0.05 | 0.46 | 0.51 | (0.04) | (0.21) | (0.25) |
Year ended 12-31-2016 | 5.15 | 0.04 | 0.09 | 0.13 | (0.06) | (0.32) | (0.38) |
Year ended 12-31-2015 | 5.54 | 0.06 | (0.03) | 0.03 | (0.06) | (0.36) | (0.42) |
Pathfinder
Moderate Class II Shares | |||||||
Year ended 12-31-2019 | 4.89 | 0.08 | 0.79 | 0.87 | (0.14) | (0.43) | (0.57) |
Year ended 12-31-2018 | 5.40 | 0.12 | (0.31) | (0.19) | (0.08) | (0.24) | (0.32) |
Year ended 12-31-2017 | 5.02 | 0.07 | 0.64 | 0.71 | (0.04) | (0.29) | (0.33) |
Year ended 12-31-2016 | 5.34 | 0.04 | 0.13 | 0.17 | (0.07) | (0.42) | (0.49) |
Year ended 12-31-2015 | 5.87 | 0.07 | (0.02) | 0.05 | (0.10) | (0.48) | (0.58) |
Pathfinder
Moderately Aggressive Class II Shares | |||||||
Year ended 12-31-2019 | 4.98 | 0.08 | 0.92 | 1.00 | (0.15) | (0.51) | (0.66) |
Year ended 12-31-2018 | 5.59 | 0.13 | (0.37) | (0.24) | (0.10) | (0.27) | (0.37) |
Year ended 12-31-2017 | 5.14 | 0.09 | 0.74 | 0.83 | (0.05) | (0.33) | (0.38) |
Year ended 12-31-2016 | 5.50 | 0.04 | 0.17 | 0.21 | (0.09) | (0.48) | (0.57) |
Year ended 12-31-2015 | 6.14 | 0.09 | (0.06) | 0.03 | (0.14) | (0.53) | (0.67) |
Pathfinder
Moderately Conservative Class II Shares | |||||||
Year ended 12-31-2019 | 4.90 | 0.08 | 0.70 | 0.78 | (0.12) | (0.34) | (0.46) |
Year ended 12-31-2018 | 5.32 | 0.11 | (0.24) | (0.13) | (0.07) | (0.22) | (0.29) |
Year ended 12-31-2017 | 4.99 | 0.06 | 0.56 | 0.62 | (0.04) | (0.25) | (0.29) |
Year ended 12-31-2016 | 5.30 | 0.04 | 0.10 | 0.14 | (0.07) | (0.38) | (0.45) |
Year ended 12-31-2015 | 5.80 | 0.07 | (0.03) | 0.04 | (0.09) | (0.45) | (0.54) |
(1) | Based on average weekly shares outstanding. |
(2) | Based on net asset value. Total returns do not reflect a sales charge or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized. |
(3) | Does not include expenses of underlying Ivy VIP Portfolios in which the Portfolio invests. |
Net
Asset Value, End of Period |
Total
Return(2) |
Net
Assets, End of Period (in millions) |
Ratio
of Expenses to Average Net Assets(3) |
Ratio
of Net Investment Income to Average Net Assets(3) |
Portfolio
Turnover Rate | |
Pathfinder
Aggressive Class II Shares | ||||||
Year ended 12-31-2019 | $5.00 | 23.24% | $ 66 | 0.09% | 1.41% | 18% |
Year ended 12-31-2018 | 4.60 | -4.27 | 59 | 0.09 | 2.49 | 51 |
Year ended 12-31-2017 | 5.16 | 19.83 | 76 | 0.07 | 1.68 | 20 |
Year ended 12-31-2016 | 4.68 | 4.80 | 75 | 0.08 | 0.88 | 23 |
Year ended 12-31-2015 | 5.05 | 0.34 | 85 | 0.07 | 1.36 | 13 |
Pathfinder
Conservative Class II Shares | ||||||
Year ended 12-31-2019 | 5.15 | 14.66 | 99 | 0.07 | 1.71 | 31 |
Year ended 12-31-2018 | 4.83 | -1.93 | 94 | 0.07 | 1.89 | 39 |
Year ended 12-31-2017 | 5.16 | 10.51 | 109 | 0.06 | 1.06 | 30 |
Year ended 12-31-2016 | 4.90 | 2.84 | 114 | 0.07 | 0.71 | 26 |
Year ended 12-31-2015 | 5.15 | 0.45 | 117 | 0.06 | 1.09 | 17 |
Pathfinder
Moderate Class II Shares | ||||||
Year ended 12-31-2019 | 5.19 | 19.05 | 680 | 0.04 | 1.62 | 17 |
Year ended 12-31-2018 | 4.89 | -3.90 | 703 | 0.03 | 2.26 | 36 |
Year ended 12-31-2017 | 5.40 | 14.70 | 877 | 0.03 | 1.30 | 22 |
Year ended 12-31-2016 | 5.02 | 3.65 | 860 | 0.03 | 0.78 | 19 |
Year ended 12-31-2015 | 5.34 | 0.32 | 893 | 0.03 | 1.22 | 13 |
Pathfinder
Moderately Aggressive Class II Shares | ||||||
Year ended 12-31-2019 | 5.32 | 21.40 | 829 | 0.03 | 1.56 | 19 |
Year ended 12-31-2018 | 4.98 | -4.71 | 838 | 0.03 | 2.35 | 39 |
Year ended 12-31-2017 | 5.59 | 16.72 | 1,052 | 0.03 | 1.66 | 20 |
Year ended 12-31-2016 | 5.14 | 4.52 | 1,020 | 0.04 | 0.85 | 17 |
Year ended 12-31-2015 | 5.50 | 0.06 | 1,054 | 0.03 | 1.50 | 12 |
Pathfinder
Moderately Conservative Class II Shares | ||||||
Year ended 12-31-2019 | 5.22 | 16.85 | 202 | 0.05 | 1.67 | 18 |
Year ended 12-31-2018 | 4.90 | -2.67 | 205 | 0.05 | 2.07 | 34 |
Year ended 12-31-2017 | 5.32 | 12.77 | 251 | 0.05 | 1.22 | 24 |
Year ended 12-31-2016 | 4.99 | 3.10 | 261 | 0.05 | 0.80 | 16 |
Year ended 12-31-2015 | 5.30 | 0.33 | 272 | 0.04 | 1.20 | 16 |
FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD | |||||||
Net
Asset Value, Beginning of Period |
Net
Investment Income(1) |
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
Moderate – Managed Volatility Class II Shares | |||||||
Year ended 12-31-2019 | $ 5.33 | $ 0.08 | $ 0.82 | $ 0.90 | $ (0.11) | $ (0.28) | $ (0.39) |
Year ended 12-31-2018 | 5.78 | 0.11 | (0.33) | (0.22) | (0.06) | (0.17) | (0.23) |
Year ended 12-31-2017 | 5.25 | 0.06 | 0.65 | 0.71 | (0.03) | (0.15) | (0.18) |
Year ended 12-31-2016 | 5.37 | 0.03 | 0.06 | 0.09 | (0.03) | (0.18) | (0.21) |
Year ended 12-31-2015 | 5.39 | 0.05 | (0.07) | (0.02) | — | — | — |
Pathfinder
Moderately Aggressive – Managed Volatility Class II Shares | |||||||
Year ended 12-31-2019 | 5.15 | 0.07 | 0.88 | 0.95 | (0.12) | (0.35) | (0.47) |
Year ended 12-31-2018 | 5.66 | 0.11 | (0.37) | (0.26) | (0.07) | (0.18) | (0.25) |
Year ended 12-31-2017 | 5.06 | 0.07 | 0.71 | 0.78 | (0.02) | (0.16) | (0.18) |
Year ended 12-31-2016 | 5.25 | 0.03 | 0.09 | 0.12 | (0.05) | (0.26) | (0.31) |
Year ended 12-31-2015 | 5.29 | 0.06 | (0.10) | (0.04) | — | — | — |
Pathfinder
Moderately Conservative – Managed Volatility Class II Shares | |||||||
Year ended 12-31-2019 | 5.19 | 0.08 | 0.66 | 0.74 | (0.10) | (0.25) | (0.35) |
Year ended 12-31-2018 | 5.55 | 0.10 | (0.24) | (0.14) | (0.05) | (0.17) | (0.22) |
Year ended 12-31-2017 | 5.10 | 0.05 | 0.53 | 0.58 | (0.02) | (0.11) | (0.13) |
Year ended 12-31-2016 | 5.23 | 0.02 | 0.04 | 0.06 | (0.03) | (0.16) | (0.19) |
Year ended 12-31-2015 | 5.27 | 0.04 | (0.07) | (0.03) | — | (0.01) | (0.01) |
Government
Money Market Class II Shares | |||||||
Year ended 12-31-2019 | 1.00 | 0.02 | 0.00 * | 0.02 | (0.02) | — * | (0.02) |
Year ended 12-31-2018 | 1.00 | 0.02 | 0.00 * | 0.02 | (0.02) | — * | (0.02) |
Year ended 12-31-2017 | 1.00 | 0.01 | 0.00 * | 0.01 | (0.01) | — * | (0.01) |
Year ended 12-31-2016 | 1.00 | 0.00 * | 0.00 * | 0.00 * | — * | — * | — * |
Year ended 12-31-2015 | 1.00 | 0.00 * | 0.00 * | 0.00 * | — * | — | — * |
* | Not shown due to rounding. |
(1) | Based on average weekly shares outstanding. |
(2) | Based on net asset value. Total returns do not reflect a sales charge or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized. |
(3) | Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses. |
(4) | Does not include expenses of underlying Ivy VIP Portfolios in which the Portfolio invests. |
Net
Asset Value, End of Period |
Total
Return(2) |
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(3) |
Ratio
of Net Investment Income (Loss) to Average Net Assets Excluding Expense Waiver(3) |
Portfolio
Turnover Rate | |
Pathfinder
Moderate – Managed Volatility Class II Shares | ||||||||
Year ended 12-31-2019 | $ 5.84 | 17.32% | $ 707 | 0.23% (4) | 1.39% (4) | —% | —% | 9% |
Year ended 12-31-2018 | 5.33 | -4.00 | 606 | 0.23 (4) | 2.00 (4) | — | — | 28 |
Year ended 12-31-2017 | 5.78 | 13.80 | 600 | 0.23 (4) | 1.07 (4) | — | — | 21 |
Year ended 12-31-2016 | 5.25 | 1.81 | 511 | 0.24 (4) | 0.55 (4) | — | — | 14 |
Year ended 12-31-2015 | 5.37 | -0.43 | 396 | 0.24 (4) | 0.88 (4) | — | — | 7 |
Pathfinder
Moderately Aggressive – Managed Volatility Class II Shares | ||||||||
Year ended 12-31-2019 | 5.63 | 19.29 | 93 | 0.27 (4) | 1.32 (4) | — | — | 16 |
Year ended 12-31-2018 | 5.15 | -4.75 | 84 | 0.27 (4) | 2.04 (4) | — | — | 37 |
Year ended 12-31-2017 | 5.66 | 15.70 | 92 | 0.27 (4) | 1.38 (4) | — | — | 19 |
Year ended 12-31-2016 | 5.06 | 2.36 | 78 | 0.31 (4) | 0.56 (4) | — | — | 12 |
Year ended 12-31-2015 | 5.25 | -0.71 | 67 | 0.30 (4) | 1.13 (4) | — | — | 7 |
Pathfinder
Moderately Conservative – Managed Volatility Class II Shares | ||||||||
Year ended 12-31-2019 | 5.58 | 14.89 | 80 | 0.27 (4) | 1.45 (4) | — | — | 14 |
Year ended 12-31-2018 | 5.19 | -2.90 | 73 | 0.29 (4) | 1.79 (4) | — | — | 28 |
Year ended 12-31-2017 | 5.55 | 11.84 | 74 | 0.27 (4) | 0.96 (4) | — | — | 26 |
Year ended 12-31-2016 | 5.10 | 1.21 | 67 | 0.30 (4) | 0.49 (4) | — | — | 11 |
Year ended 12-31-2015 | 5.23 | -0.52 | 54 | 0.30 (4) | 0.78 (4) | — | — | 9 |
Government
Money Market Class II Shares | ||||||||
Year ended 12-31-2019 | 1.00 | 1.83 | 184 | 0.42 | 1.82 | — | — | — |
Year ended 12-31-2018 | 1.00 | 1.53 | 239 | 0.40 | 1.49 | — | — | — |
Year ended 12-31-2017 | 1.00 | 0.59 | 317 | 0.41 | 0.56 | 0.42 | 0.55 | — |
Year ended 12-31-2016 | 1.00 | 0.13 | 414 | 0.45 | 0.13 | 0.46 | 0.12 | — |
Year ended 12-31-2015 | 1.00 | 0.02 | 539 | 0.20 | 0.02 | 0.45 | -0.23 | — |
■ | Statement of Additional Information (SAI), which contains detailed information about the Portfolios, particularly the investment policies and practices. You may not be aware of important information about a Portfolio unless you read both the Prospectus and the SAI. The current SAI is on file with the SEC, and it is incorporated into this Prospectus by reference (that is, the SAI is legally part of the Prospectus). |
■ | Annual and Semiannual Reports to Shareholders, which detail the Portfolios' actual investments and include financial statements as of the close of the particular annual or semiannual period. The Annual Report also contains a discussion of the market conditions and investment strategies that significantly affected each Portfolio's performance during the year covered by the report. |
Ivy VIP Asset Strategy | Class I | Class II |
Ivy VIP Balanced | Class II | |
Ivy VIP Corporate Bond | Class II | |
Ivy VIP Core Equity | Class II | |
Ivy VIP Energy | Class I | Class II |
Ivy VIP Global Bond | Class II | |
Ivy VIP Global Equity Income | Class II | |
Ivy VIP Global Growth | Class II | |
Ivy VIP Government Money Market | Class II | |
Ivy VIP Growth | Class II | |
Ivy VIP High Income | Class I | Class II |
Ivy VIP International Core Equity | Class II | |
Ivy VIP Limited-Term Bond | Class II | |
Ivy VIP Mid Cap Growth | Class I | Class II |
Ivy VIP Natural Resources | Class II | |
Ivy VIP Science and Technology | Class I | Class II |
Ivy VIP Securian Real Estate Securities | Class II | |
Ivy VIP Small Cap Core | Class II | |
Ivy VIP Small Cap Growth | Class I | Class II |
Ivy VIP Value | Class II | |
Ivy VIP Pathfinder Aggressive | Class II | |
Ivy VIP Pathfinder Moderately Aggressive | Class II | |
Ivy VIP Pathfinder Moderate | Class II | |
Ivy VIP Pathfinder Moderately Conservative | Class II | |
Ivy VIP Pathfinder Conservative | Class II | |
Ivy VIP Pathfinder Moderate—Managed Volatility | Class II | |
Ivy VIP Pathfinder Moderately Aggressive—Managed Volatility | Class II | |
Ivy VIP Pathfinder Moderately Conservative—Managed Volatility | Class II |
• | Prior to January 1, 2015, Ivy VIP Global Growth was known as Ivy Funds VIP International Growth. |
• | Prior to October 14, 2016, Ivy VIP Government Money Market was known as Ivy VIP Money Market. |
• | Prior to April 28, 2017, Ivy VIP Natural Resources was known as Ivy VIP Global Natural Resources, Ivy VIP Advantus Real Estate Securities was known as Ivy VIP Real Estate Securities and Ivy VIP Small Cap Core was known as Ivy VIP Small Cap Value. |
• | Prior to April 30, 2018, Ivy VIP Corporate Bond was known as Ivy VIP Bond and Ivy VIP Securian Real Estate Securities was known as Ivy VIP Advantus Real Estate Securities. |
• | Also prior to April 30, 2018, Ivy VIP Global Equity Income was known as Ivy VIP Dividend Opportunities; on that date the Portfolio changed its name, investment objective and principal investment strategies to invest primarily in equity securities that are issued by companies of any size, located largely in developed markets around the world. |
(1) | Bank Obligations and Instruments Secured Thereby: Subject to the limitations described above, time deposits, certificates of deposit, bankers' acceptances and other bank obligations if they are obligations of a bank subject to regulation by the U.S. government (including obligations issued by foreign branches of these banks) or obligations issued by a foreign bank having total assets equal to at least U.S. $500,000,000, and instruments secured by any such obligation. |
A bank includes commercial banks and savings and loan associations. Time deposits are monies kept on deposit with U.S. banks or other U.S. financial institutions for a stated period of time at a fixed rate of interest. There may be penalties for the early withdrawal of such time deposits, in which case, the yield of these investments will be reduced. | |
(2) | Commercial Paper Obligations Including Floating Rate Securities and Variable Rate Master Demand Notes: Commercial paper that IICO has determined presents minimal credit risks. A floating rate security has an interest rate that changes whenever there is a change in a designated base rate. A variable rate master demand note represents a purchasing/selling arrangement of short-term promissory notes under a letter agreement between a commercial paper issuer and an institutional investor. |
(3) | Corporate Debt Obligations: Corporate debt obligations that IICO has determined present minimal credit risks. |
(4) | Foreign Obligations and Instruments: Subject to the diversification requirements applicable to the Portfolio under Rule 2a-7, the Portfolio may invest in foreign bank obligations, obligations of foreign branches of U.S. banks, obligations guaranteed by a bank or a corporation in whose obligations the Portfolio may invest and commercial |
paper of an approved foreign issuer. Each of these obligations must be U.S. dollar-denominated. Investments in obligations of U.S. branches of foreign banks will be considered to be U.S. securities if IICO has determined that the nature and extent of federal and state regulation and supervision of the branch in question is substantially equivalent to federal- and state-chartered or U.S. banks doing business in the same jurisdiction. | |
(5) | Municipal Securities: Municipal securities that IICO has determined present minimal credit risks and are otherwise permissible under Rule 2a-7. |
(6) | Certain Other Obligations: Obligations other than those listed in (1) through (5) only if any such other obligation is guaranteed as to principal and interest by either a bank in whose obligations the Portfolio may invest (see (1) above) or a corporation in whose commercial paper the Portfolio may invest (see (2) above) and otherwise permissible under Rule 2a-7. |
• | Loss absorption risk. CoCos have fully discretionary coupons. This means coupons can potentially be cancelled at the banking institution’s discretion or at the request of the relevant regulatory authority in order to help the bank absorb losses. |
• | Subordinated instruments. CoCos, in the majority of circumstances, will be issued in the form of subordinated debt instruments in order to provide the appropriate regulatory capital treatment prior to a conversion. Accordingly, in the event of liquidation, dissolution or winding-up of an issuer prior to a conversion having occurred, the rights and claims of the holders of the CoCos, such as the Portfolios, against the issuer in respect of |
or arising under the terms of the CoCos generally shall rank junior to the claims of all holders of unsubordinated obligations of the issuer. In addition, if the CoCos are converted into the issuer’s underlying equity securities following a conversion event (i.e., a “trigger”), each holder will be subordinated due to their conversion from being the holder of a debt instrument to being the holder of an equity instrument. | |
• | Market value will fluctuate based on unpredictable factors. The value of CoCos is unpredictable and will be influenced by many factors including, without limitation: (i) the creditworthiness of the issuer and/or fluctuations in such issuer’s applicable capital ratios; (ii) supply and demand for the CoCos; (iii) general market conditions and available liquidity; and (iv) economic, financial and political events that affect the issuer, its particular market or the financial markets in general. |
• | cross-commodity arbitrage can negatively impact a Portfolio's investments; |
• | fluctuations in demand can negatively impact individual commodities: alternative sources of energy can create unforeseen competition; changes in weather can negatively affect demand; and global production can alter demand and the need for specific sources of energy; |
• | fluctuations in supply can negatively impact individual commodities: transportation costs, research and development, location, recovery/retrieval costs, conversion costs, storage costs and natural disasters can all adversely impact different investments and types of energy; |
• | environmental restrictions can increase costs of production; |
• | restrictions placed by the government of a developing country related to investment, exchange controls, and repatriation of the proceeds of investment in that country; and |
• | war can limit production or access to available supplies and/or resources. |
(1) | Successful use of certain Financial Instruments depends upon the ability of the Investment Manager to predict movements of the overall securities, currency and interest rate markets, among other skills. There can be no assurance that any particular strategy will succeed, and the use of Financial Instruments could result in a loss, regardless of whether the intent was to reduce risk or increase return. |
(2) | There might be imperfect correlation, or even no correlation, between price movements of a Financial Instrument and price movements of the investments being hedged. For example, if the value of a Financial Instrument used in a short hedge increased by less than the decline in value of the hedged investment, the hedge would not be fully successful. Such a lack of correlation might occur due to factors unrelated to the value of the investments being hedged, such as speculation in the market or other pressures on the markets in which Financial Instruments are traded. The effectiveness of hedges using Financial Instruments on underlying indexes will depend on the degree of correlation between price movements in the index and price movements in the securities being hedged. |
Because there are a limited number of types of exchange-traded options and futures contracts, the standardized contracts available may not match a Portfolio's current or anticipated investments exactly. A Portfolio may invest in options and futures contracts based on securities, indexes or other instruments with different issuers, maturities, or other characteristics from the securities in which it typically invests, which involves a risk that the options or futures position will not perfectly correlate with the performance of the Portfolio's other investments. | |
Options and futures prices also can diverge from the prices of their underlying instruments, even if the underlying instruments match a Portfolio's investments well. Options and futures prices are affected by such factors as changes in volatility of the underlying instrument, the time remaining until expiration of the contract, and current and anticipated short-term interest rates, which may not affect security prices the same way. Imperfect correlation also may result from differing levels of demand in the options and futures markets and the securities markets, from structural differences in how options and futures and securities are traded, and/or from imposition of daily price fluctuation limits or trading halts. A Portfolio may purchase or sell options and futures contracts with a greater or lesser value than the securities it wishes to hedge or intends to purchase in order to attempt to compensate for differences in volatility between the contract and the securities, although this may not be successful in all cases. If price changes in a Portfolio's options or futures positions are poorly correlated with its other investments, the positions may fail to produce anticipated gains or result in losses that are not offset by gains in other investments. | |
(3) | If successful, the above-discussed strategies can reduce risk of loss by wholly or partially offsetting the negative effect of unfavorable price movements. However, such strategies also can reduce opportunity for gain by offsetting the positive effect of favorable price movements. For example, if a Portfolio entered into a short hedge because the Investment Manager projected a decline in the price of a security in the Portfolio's holdings, and the price of that security increased instead, the gain from that increase might be wholly or partially offset by a decline in the price of the Financial Instrument. Moreover, if the price of the Financial Instrument declined by more than the increase in the price of the security, the Portfolio could suffer a loss. In either such case, the Portfolio would have been in a better position had it not attempted to hedge at all. |
(4) | As described below, a Portfolio might be required to maintain assets as cover, maintain segregated accounts or make margin payments when it takes positions in Financial Instruments involving obligations to third parties unless regulatory relief from restrictions applies. If the Portfolio were unable to close out its positions in such Financial |
Instruments, it might be required to continue to maintain such assets or accounts or make such payments until the position expired or matured. These requirements might impair the Portfolio's ability to sell a portfolio security or make an investment at a time when it would otherwise be favorable to do so, or require that the Portfolio sell a portfolio security at a disadvantageous time. | |
(5) | A Portfolio's ability to close out a position in a Financial Instrument prior to expiration or maturity depends on the existence of a liquid secondary market or, in the absence of such a market, the ability and willingness of the other party to the transaction (counterparty) to enter into a transaction closing out the position. Therefore, there is no assurance that any position can be closed out at a time and price that is favorable to the Portfolio. |
(6) | Certain Financial Instruments, including options, futures contracts, combined positions and swaps, can create leverage, which may amplify or otherwise increase a Portfolio's investment loss, possibly in an amount that could exceed the cost of that Financial Instrument or, under certain circumstances, that could be unlimited. Certain Financial Instruments also may require cash outlays that are only a small portion of the amount of exposure obtained through the Financial Instruments, which results in a form of leverage. Although leverage creates the opportunity for increased total return, it also can create investment exposure for a Portfolio that, in certain circumstances, could exceed the Portfolio's net assets and could alter the risk profile of the Portfolio in unanticipated ways. |
(7) | When traded on foreign exchanges, Financial Instruments may not be regulated as rigorously as they would be if traded on or subject to the rules of an exchange located in the United States, may not involve a clearing mechanism and related guarantees, and will be subject to the risk of governmental actions affecting trading in, or the prices of, foreign securities, currencies and other instruments. The value of positions taken as part of non-U.S. Financial Instruments also could be adversely affected by: (i) other complex foreign political, legal and economic factors; (ii) lesser availability of data on which to make trading decisions than in the United States; (iii) delays in a Portfolio's ability to act upon economic events occurring in foreign markets during non-business hours in the United States; (iv) the imposition of different exercise and settlement terms and procedures and margin requirements than in the United States; and (v) lower trading volume and liquidity. |
1. | The Portfolio may not borrow money, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. |
2. | The Portfolio may not issue senior securities, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. |
3. | The Portfolio may not engage in the business of underwriting securities except to the extent that the Portfolio may be considered an underwriter within the meaning of the 1933 Act in the acquisition, disposition or resale of its portfolio securities or in connection with investments in other investment companies, or to the extent otherwise permitted under the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. |
4. | For each Portfolio except Ivy VIP Energy, Ivy VIP Government Money Market, Ivy VIP Natural Resources, Ivy VIP Science and Technology and Ivy VIP Securian Real Estate Securities: |
The Portfolio may not purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities, securities of other investment companies and tax-exempt securities or such other securities as may be excluded for this purpose under the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief) if, as a result, such purchase would result in the concentration (as that term may be defined in the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief) of its total assets in securities of issuers in any one industry. |
For Ivy VIP Energy: Under normal market conditions, Ivy VIP Energy will concentrate its investments in the energy industry. |
For Ivy VIP Government Money Market: Under normal market conditions, Ivy VIP Government Money Market will not make any investment if, as a result, the Portfolio's investments will be concentrated in any one industry, except that the Portfolio may invest without limit in obligations issued by banks. |
For Ivy VIP Natural Resources: Under normal market conditions, Ivy VIP Natural Resources will concentrate its investments in securities of issuers that produce, refine, develop, store, transport or supply energy or industrial products (i.e., building materials, packaging, chemicals, base metals, forest and agricultural products or provide basic services to the natural resources industry). | |
For Ivy VIP Science and Technology: Under normal market conditions, Ivy VIP Science and Technology will concentrate its investments in securities of science and technology companies or companies that benefit from the application of science and/or technology. | |
For Ivy VIP Securian Real Estate Securities: Under normal market conditions, Ivy VIP Securian Real Estate Securities will concentrate its investments in the real estate or real estate-related industry. |
5. | The Portfolio may not purchase or sell real estate, except to the extent permitted under the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. |
6. | The Portfolio may not purchase or sell commodities, contracts relating to commodities or options on contracts relating to commodities except to the extent permitted under the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. This policy shall not prevent the Portfolio from purchasing or selling foreign currency or purchasing, selling or entering into futures contracts, options, forward contracts, swaps, caps, floors, collars and other financial instruments as currently exist or may in the future be developed. |
7. | The Portfolio may make loans to the extent permitted under the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. |
1. | “Name Rule” investments: |
• | Each of Ivy VIP Core Equity’s and Ivy VIP International Core Equity’s net assets, plus any borrowings for investment purposes (referred to in this section as Net Assets), will be invested in equity securities. |
• | Ivy VIP Corporate Bond’s Net Assets will be invested in corporate bonds. |
• | Ivy VIP Global Bond’s Net Assets will be invested in bonds. |
• | Ivy VIP Global Equity Income’s Net Assets will be invested in equity securities. |
• | Ivy VIP Government Money Market’s Net Assets will be invested in U.S. government securities and/or repurchase agreements that are fully collateralized by U.S. government securities. |
• | Ivy VIP Limited-Term Bond’s Net Assets will be invested in bonds with limited maturities. |
• | Ivy VIP Mid Cap Growth’s Net Assets will be invested in mid-capitalization growth stocks. |
• | Ivy VIP Natural Resources’ Net Assets will be invested in equity securities of companies that own, explore or develop natural resources and other basic commodities or supply goods and services to such companies. |
• | Ivy VIP Science and Technology’s Net Assets will be invested in securities of science or technology companies or companies that derive a competitive advantage by the application of scientific or technological developments or discoveries to grow their business or increase their competitive advantage. |
• | Ivy VIP Securian Real Estate Securities’ Net Assets will be invested in the securities of companies in the real estate or real estate-related industry. |
• | Each of Ivy VIP Small Cap Core’s and Ivy VIP Small Cap Growth’s Net Assets will be invested in small capitalization companies. |
• | Ivy VIP Energy’s Net Assets will be invested in securities of companies within the energy sector, which includes all aspects of the energy industry, including exploration, discovery, production, distribution or infrastructure of energy and/or alternative energy sources. |
2. | Investment in other investment companies: |
3. | Investment in illiquid securities: |
4. | Investment in debt securities: |
5. | Investment in foreign securities: |
6. | Investment in Financial Instruments: |
7. | Diversification: |
8. | Other Current Restrictions: |
2019 | 2018 | ||
Ivy VIP Asset
Strategy |
46% | 58% | |
Ivy VIP
Balanced |
44% | 54% | |
Ivy VIP Core
Equity |
80% | 99% | |
Ivy VIP Corporate
Bond |
66% | 63% | |
Ivy VIP
Energy |
21% | 37% | |
Ivy VIP Global
Bond |
43% | 37% | |
Ivy VIP Global Equity
Income |
39% | 93% | |
Ivy VIP Global
Growth |
26% | 40% | |
Ivy VIP Government Money
Market |
N/A | N/A | |
Ivy VIP
Growth |
30% | 37% | |
Ivy VIP High
Income |
35% | 42% | |
Ivy VIP International Core
Equity |
69% | 51% | |
Ivy VIP Limited-Term
Bond |
54% | 53% | |
Ivy VIP Mid Cap
Growth |
20% | 53% | |
Ivy VIP Natural
Resources |
36% | 33% | |
Ivy VIP Science and
Technology |
31% | 17% | |
Ivy VIP Securian Real Estate
Securities |
54% | 71% | |
Ivy VIP Small Cap
Core |
126% | 112% | |
Ivy VIP Small Cap
Growth |
41% | 52% | |
Ivy VIP
Value |
62% | 56% | |
Ivy VIP Pathfinder
Aggressive |
18% | 51% | |
Ivy VIP Pathfinder
Conservative |
31% | 39% | |
Ivy VIP Pathfinder
Moderate |
17% | 36% | |
Ivy VIP Pathfinder Moderate - Managed
Volatility |
9% | 28% | |
Ivy VIP Pathfinder Moderately
Aggressive |
19% | 39% | |
Ivy VIP Pathfinder Moderately Aggressive - Managed
Volatility |
16% | 37% | |
Ivy VIP Pathfinder Moderately
Conservative |
18% | 34% | |
Ivy VIP Pathfinder Moderately Conservative - Managed
Volatility |
14% | 28% |
1. | The individual receiving the request, in conjunction with IICO’s legal department or the Portfolio's Chief Compliance Officer (CCO), determines that the Portfolio has a legitimate business purpose for disclosing non-public portfolio holdings information to the Third-Party Recipient; |
2. | The Third-Party Recipient signs a confidentiality agreement or is given appropriate notice that the non-public portfolio holdings: (a) should be kept confidential, (b) may not be used to trade in any such portfolio holdings nor to purchase or redeem shares of the Portfolio and (c) may not be disseminated or used for any purpose other than as referenced in the confidentiality agreement; and |
3. | No compensation is received by the Portfolios, IICO or any other party in connection with the disclosure of information about the portfolio holdings. |
• | agree to use portfolio information only for its own internal analytical purposes in connection with the compilation of Portfolio data, the development of investment models or risk analysis, and the determination of the eligibility of the Portfolio for the recipient’s “model portfolios;” |
• | agree that it will not disclose, distribute or publish the portfolio information that it receives from the Portfolio, including to any of its clients; |
• | represent that it will not disclose the portfolio information to any person or entity within its organization other than personnel who are authorized to receive such information in connection with the compilation of Portfolio data and the development of “model portfolios;” |
• | agree that it, its officers, employees, agents and representatives have a duty to treat the portfolio information as confidential and not to trade securities based on such information; |
• | agree that it may not, and must take steps to ensure that all of its employees with access to such information do not, invest directly in the Portfolio for which such confidential information is supplied; |
• | agree that it may not distribute portfolio information to any agent or subcontractor unless such agent or subcontractor has entered into a substantially similar agreement of confidentiality and has adopted and agrees to maintain policies and procedures designed to ensure that the information is kept confidential; and |
• | agree to maintain policies and procedures designed to ensure that the portfolio information provided by the Portfolio is kept confidential and that its officers, agents and representatives do not trade securities based on such information. |
NAME,
ADDRESS AND YEAR OF BIRTH |
POSITION
HELD WITH THE TRUST |
TRUSTEE
SINCE |
PRINCIPAL
OCCUPATION(S) DURING PAST 5 YEARS |
NUMBER
OF FUNDS IN FUND COMPLEX OVERSEEN |
OTHER
DIRECTORSHIPS HELD DURING PAST 5 YEARS | |||||
James
M. Concannon 6300 Lamar Avenue Overland Park, KS 66202 1947 |
Trustee | 1997* | Emeritus Dean and Professor of Law, Washburn University School of Law (1973 to present) | 80 | Director, Kansas Legal Services for Prisoners, Inc. (non-profit community service); Director, U.S. Alliance Corporation and wholly-owned subsidiaries: U.S. Alliance Life and Security Company – Montana and Dakota Capital Life Insurance Company (insurance) (2009 to present); Director, Kansas Appleseed, Inc. (non-profit community service) (2007 to present); Trustee, Waddell & Reed Advisors Funds (WRA Funds) (1997-2018); Trustee, Ivy NextShares (2017-2019); Trustee, Ivy Funds (2017 to present) (45 portfolios overseen); Trustee, InvestEd Portfolios (2001 to present) (6 portfolios overseen); Trustee, Ivy High Income Opportunities Fund (2017 to present) (1 portfolio overseen) | |||||
H.
Jeffrey Dobbs 6300 Lamar Avenue Overland Park, KS 66202 1955 |
Trustee | 2019 | Global Sector Chairman, Industrial Manufacturing, KPMG LLP (2010-2015) | 80 | Director, Valparaiso University (2012 to present) Director, TechAccel LLC (2015 to present) (Tech R&D); Board Member, Kansas City Repertory Theatre (2015 to present); Board Member, PatientsVoices, Inc. (technology) (2018 to present); Kansas City Campus for Animal Care (2018 to present); Director, National Association of Manufacturers (2010-2015); Director, The Children’s Center (2003-2015); Director, Metropolitan Affairs Coalition (2003-2015); Director, Michigan Roundtable for Diversity and Inclusion (2003-2015); Trustee, Ivy NextShares (2019); Trustee, Ivy Funds (2019 to present) (45 portfolios overseen); Trustee, InvestEd Portfolios (2019 to present) (6 portfolios overseen); Trustee, Ivy High Income Opportunities Fund (2019 to present) (1 portfolio overseen) |
NAME,
ADDRESS AND YEAR OF BIRTH |
POSITION
HELD WITH THE TRUST |
TRUSTEE
SINCE |
PRINCIPAL
OCCUPATION(S) DURING PAST 5 YEARS |
NUMBER
OF FUNDS IN FUND COMPLEX OVERSEEN |
OTHER
DIRECTORSHIPS HELD DURING PAST 5 YEARS | |||||
James
D. Gressett 6300 Lamar Avenue Overland Park, KS 66202 1950 |
Trustee | 2017 | Chief Executive Officer (CEO) of CalPac Pizza LLC (2011 to present); CEO of CalPac Pizza II LLC (2012 to present); CEO of PacPizza LLC (Pizza Hut franchise) (2000 to present); Member/CEO, Southern Pac Pizza LLC (2013 to present); Partner, Century Bridge Partners (real estate investments) (2007 to present); Manager, Hartley Ranch Angus Beef, LLC (2013 to present); President, Penn Capital Corp. (1995 to present); Partner, Penn Capital Partners (1999 to present); Partner, 1788 Chicken, LLC (food franchise) (2016 to present) | 80 | Member/Secretary, The Metochoi Group LLC (1999 to present); Member/Chairman, Idea Homes LLC (homebuilding and development) (2013 to present); Trustee, WRA Funds (2017-2018); Trustee, Ivy NextShares (2016-2019); Trustee, Ivy Funds (2002 to present) (45 portfolios overseen); Trustee, InvestEd Portfolios (2017 to present) (6 portfolios overseen); Trustee, Ivy High Income Opportunities Fund (2013 to present) (1 portfolio overseen) | |||||
Joseph
Harroz, Jr. 6300 Lamar Avenue Overland Park, KS 66202 1967 |
Trustee
Independent Chairman |
1998*
2015 |
Interim President (2019 to present), Vice President (2010-2019) and Dean (2010-2019), College of Law, University of Oklahoma; Managing Member, Harroz Investments, LLC, (commercial enterprises) (1998 to present) | 80 | Director and Shareholder, Valliance Bank (2007 to present); Director, Foundation Healthcare (formerly Graymark HealthCare) (2008-2017); Trustee, the Mewbourne Family Support Organization (2006 to present) (non-profit); Independent Director, LSQ Manager, Inc. (real estate) (2007-2016); Director, Oklahoma Foundation for Excellence (non-profit) (2008 to present); Independent Chairman and Trustee, WRA Funds (Independent Chairman: 2015-2018; Trustee: 1998-2018); Independent Chairman and Trustee, Ivy NextShares (2016-2019); Independent Chairman and Trustee, Ivy Funds (Independent Chairman: 2006 to present; Trustee: 1998 to present) (45 portfolios overseen); Independent Chairman and Trustee, InvestEd Portfolios (Independent Chairman: 2015 to present; Trustee: 2001 to present) (6 portfolios overseen); Independent Chairman and Trustee, Ivy High Income Opportunities Fund (2013 to present) (1 portfolio overseen) |
NAME,
ADDRESS AND YEAR OF BIRTH |
POSITION
HELD WITH THE TRUST |
TRUSTEE
SINCE |
PRINCIPAL
OCCUPATION(S) DURING PAST 5 YEARS |
NUMBER
OF FUNDS IN FUND COMPLEX OVERSEEN |
OTHER
DIRECTORSHIPS HELD DURING PAST 5 YEARS | |||||
Glendon
E. Johnson, Jr. 6300 Lamar Avenue Overland Park, KS 66202 1951 |
Trustee | 2017 | Of Counsel, Lee & Smith, PC (law firm, emphasis on finance, securities, mergers and acquisitions law) (1996 to 2019); Owner and Manager, Castle Valley Ranches, LLC (ranching) and Castle Valley Outdoors, LLC (outdoor recreation) (1995 to present); Formerly, Partner, Kelly, Drye & Warren LLP (law firm) (1989-1996); Partner, Lane & Edson PC (law firm) (1987-1989) | 80 | Director, Thomas Foundation for Cancer Research (non-profit) (2005 to present); Director, Warriors Afield Legacy Foundation (non-profit) (2014 to present); Trustee, WRA Funds (2017-2018); Trustee, Ivy NextShares (2016-2019); Trustee, Ivy Funds (2002 to present) (45 portfolios overseen); Trustee, InvestEd Portfolios (2017 to present) (6 portfolios overseen); Trustee, Ivy High Income Opportunities Fund (2013 to present) (1 portfolio overseen) | |||||
Sandra
A.J. Lawrence 6300 Lamar Avenue Overland Park, KS 66202 1957 |
Trustee | 2019 | Retired; formerly, Chief Administrative Officer, Children’s Mercy Hospitals and Clinics (2016-2019); CFO, Children’s Mercy Hospitals and Clinics (2005-2016) | 80 | Director, Hall Family Foundation (1993 to present); Director, Westar Energy (2004-2018); Trustee, Nelson-Atkins Museum of Art (non-profit) (2007 to present); Director, Turn the Page KC (non-profit) (2012-2016); Director, Kansas Metropolitan Business and Healthcare Coalition (non-profit) (2017-2019); Director, National Association of Corporate Directors (non-profit) (2017 to present); Director, American Shared Hospital Services (2017 to present); Director, Evergy, Inc., Kansas City Power & Light Company, KCP&L Greater Missouri Operations Company, Westar Energy, Inc. and Kansas Gas and Electric Company (related utility companies) (2018 to present); Director, Stowers (research) (2018); Trustee, Ivy NextShares (2019); Trustee, Ivy Funds (2019 to present) (45 portfolios overseen); Trustee, InvestEd Portfolios (2019 to present) (6 portfolios overseen); Trustee, Ivy High Income Opportunities Fund (2019 to present) (1 portfolio overseen) | |||||
Frank
J. Ross, Jr. Polsinelli PC 900 West 48th Place Suite 900 Kansas City, MO 64112 1953 |
Trustee | 1996* | Shareholder/Director, Polsinelli PC (law firm) (1980 to present) | 80 | Trustee, WRA Funds (1996-2018); Trustee, Ivy NextShares (2017-2019); Trustee, Ivy Funds (2017 to present) (45 portfolios overseen); Trustee, InvestEd Portfolios (2001 to present) (6 portfolios overseen); Trustee, Ivy High Income Opportunities Fund (2017 to present) (1 portfolio overseen) |
NAME,
ADDRESS AND YEAR OF BIRTH |
POSITION
HELD WITH THE TRUST |
TRUSTEE
SINCE |
PRINCIPAL
OCCUPATION(S) DURING PAST 5 YEARS |
NUMBER
OF FUNDS IN FUND COMPLEX OVERSEEN |
OTHER
DIRECTORSHIPS HELD DURING PAST 5 YEARS | |||||
Michael
G. Smith 6300 Lamar Avenue Overland Park, KS 66202 1944 |
Trustee | 2017 | Retired; formerly, with Merrill Lynch as Managing Director of Global Investor Client Strategy (1996-1998), Head of Regional Institutional Sales (1995-1996) and of U.S. Central Region (1986-1995, 1999). | 80 | Director, Executive Board, Cox Business School, Southern Methodist University (1998-2019); Lead Director, Northwestern Mutual Funds (2003-2017) (29 portfolios overseen); Director, CTMG, Inc. (clinical testing) (2008-2015); Trustee, WRA Funds (2017-2018); Trustee, Ivy NextShares (2016-2019); Trustee, Ivy Funds (2002 to present) (45 portfolios overseen); Trustee, InvestEd Portfolios (2017 to present) (6 portfolios overseen); Trustee, Ivy High Income Opportunities Fund (2013 to present) (1 portfolio overseen) | |||||
Edward
M. Tighe 6300 Lamar Avenue Overland Park, KS 66202 1942 |
Trustee | 2017 | Retired; formerly, CEO and Director of Asgard Holdings, LLC (computer network and security services) (2002-2004); President, Citco Technology Management (1995-2000); CEO, Global Mutual Fund Services (1993-2000); Sr. Vice President, Templeton Global Investors (1988-1992) | 80 | Trustee, Hansberger Institutional Funds (2000-2007); Director, The Research Coast Principium Foundation, Inc. (non-profit) (2012-2015); Trustee, WRA Funds (2017-2018); Trustee, Ivy NextShares (2016-2019); Trustee, Ivy Funds (1999 to present) (45 portfolios overseen); Trustee, InvestEd Portfolios (2017 to present) (6 portfolios overseen); Trustee, Ivy High Income Opportunities Fund (2013 to present) (1 portfolio overseen) |
* | This date shows when the Trustee first became a director of one or more of the portfolios that are the predecessors to current portfolios within the Ivy Variable Insurance Portfolios. |
Interested Trustees |
NAME,
ADDRESS AND YEAR OF BIRTH |
POSITION(S)
HELD WITH THE TRUST |
TRUSTEE
SINCE |
PRINCIPAL
OCCUPATION(S) DURING PAST 5 YEARS |
NUMBER
OF FUNDS IN FUND COMPLEX OVERSEEN |
OTHER
DIRECTORSHIPS HELD DURING PAST 5 YEARS | |||||
Henry
J. Herrmann 6300 Lamar Avenue Overland Park, KS 66202 1942 |
Trustee | 1998* | Retired, Non-Executive Chairman of the Board, WDR (2016-2018); Formerly, Chairman, WDR (2010-2018); CEO, WDR (2005-2016); President, CEO and Chairman, IICO (2002-2016); President, CEO and Chairman, Waddell & Reed Investment Management Company (WRIMCO), an affiliate of IICO (1993-2016); President of each of the funds in the Fund Complex (for Ivy Funds: 2001-2016) | 80 | Director, WDR (1998 to present); Director, IICO (2002-2016); Director, WRIMCO (1991-2016); Director, WISC (2001-2016); Director, W&R Capital Management Group, Inc. (2008-2016); Director, Waddell & Reed (1993-2016); Director, Blue Cross Blue Shield of Kansas City (2007-2017); Trustee, WRA Funds (1998-2018); Trustee, Ivy NextShares (2016-2019); Trustee, Ivy Funds (1998 to present) (45 portfolios overseen); Trustee, InvestEd Portfolios (2001 to present) (6 portfolios overseen); Trustee, Ivy High Income Opportunities Fund (2013 to present) (1 portfolio overseen) | |||||
Philip
J. Sanders 6300 Lamar Avenue Overland Park, KS 66202 1959 |
Trustee | 2019 | CEO, WDR (2016 to present); President, CEO and Chairman, IICO (2016 to present); President of each of the funds in the Fund Complex (2016 to present); CIO, WDR (2011 to present); CIO, IICO (2010 to present) | 80 | Trustee, Ivy NextShares (2019); Trustee, Ivy Funds (2019 to present) (45 portfolios overseen); Trustee, InvestEd Portfolios (2019 to present) (6 portfolios overseen); Trustee, Ivy High Income Opportunities Fund (2019 to present) (1 portfolio overseen) |
* | This date shows when the Trustee first became a director of one or more of the portfolios that are the predecessors to current portfolios within the Ivy Variable Insurance Portfolios. |
NAME,
ADDRESS AND YEAR OF BIRTH |
POSITION(S)
HELD WITH THE TRUST |
OFFICER
OF TRUST SINCE |
OFFICER
OF FUND COMPLEX SINCE* |
PRINCIPAL
OCCUPATION(S) DURING PAST 5 YEARS | ||||
Jennifer
K. Dulski 6300 Lamar Avenue Overland Park,KS 66202 1980 |
Secretary | 2017 | 2017 | Secretary for each of the funds in the Fund Complex (2017 to present); Senior Vice President and Associate General Counsel of Waddell & Reed, IICO and IDI (2018 to present) | ||||
Joseph
W. Kauten 6300 Lamar Avenue Overland Park,KS 66202 1969 |
Vice
President Treasurer Principal Financial Officer |
2009
2009 2009 |
2006
2006 2007 |
Principal Financial Officer of each of the funds in the Fund Complex (2007 to present); Vice President and Treasurer of each of the funds in the Fund Complex (2006 to present); Principal Accounting Officer of each of the funds in the Fund Complex (2006-2017); Assistant Treasurer of each of the funds in the Fund Complex (2003-2006); Vice President of Waddell & Reed Services Company (WRSCO) (2007 to present) | ||||
Philip
J. Sanders** 6300 Lamar Avenue Overland Park,KS 66202 1959 |
President | 2016 | 2016 | CEO of WDR (2016 to present); President, CEO and Chairman of IICO (2016 to present) and WRIMCO (2016-2018); President of each of the funds in the Fund Complex (2016 to present); CIO of WDR (2011 - 2019); CIO of IICO (2010-2019) and WRIMCO (2010-2018) | ||||
Scott
J. Schneider 6300 Lamar Avenue Overland Park,KS 66202 1968 |
Vice
President Chief Compliance Officer |
2009
2009 |
2006
2004 |
CCO (2004 to present) and Vice President (2006 to present) of each of the funds in the Fund Complex; Vice President of IICO (2006 to present) and WRIMCO (2006-2018) |
NAME,
ADDRESS AND YEAR OF BIRTH |
POSITION(S)
HELD WITH THE TRUST |
OFFICER
OF TRUST SINCE |
OFFICER
OF FUND COMPLEX SINCE* |
PRINCIPAL
OCCUPATION(S) DURING PAST 5 YEARS | ||||
Philip
A. Shipp 6300 Lamar Avenue Overland Park,KS 66202 1969 |
Assistant Secretary | 2012 | 2012 | Assistant Secretary of each of the funds in the Fund Complex (2012 to present); Vice President of Waddell & Reed and IDI (2010 to present) |
* | This is the date when the officer first became an officer of one or more of the funds (or predecessors to current funds) within the Fund Complex (if applicable). |
** | Mr. Sanders was Vice President of the Trust from 1998, until his appointment as President in August 2016. |
Trustee | Dollar
Range of Shares Owned in any of the Portfolios |
Aggregate
Dollar Range of Shares Owned of All Funds within the Fund Complex | ||
James M.
Concannon |
$0 | over $100,000 | ||
H. Jeffrey
Dobbs |
$0 | $0 | ||
James D.
Gressett |
$0 | over $100,000 | ||
Joseph Harroz,
Jr. |
see note 1 below | over $100,000 |
Trustee | Dollar
Range of Shares Owned in any of the Portfolios |
Aggregate
Dollar Range of Shares Owned of All Funds within the Fund Complex | ||
Glendon E. Johnson,
Jr. |
$0 | over $100,000 | ||
Sandra A.J.
Lawrence. |
$0 | over $100,000 | ||
Frank J. Ross,
Jr. |
see note 2 below | over $100,000 | ||
Michael G.
Smith |
$0 | over $100,000 | ||
Edward M.
Tighe |
$0 | over $100,000 |
Ivy VIP Small Cap Core |
over $100,000 |
Ivy VIP Natural Resources |
$1 to $10,000 |
Trustee | Dollar
Range of Shares Owned in any of the Portfolios |
Aggregate
Dollar Range of Shares Owned of All Funds within the Fund Complex | ||
Henry J.
Herrmann |
$0 | over $100,000 | ||
Philip J.
Sanders |
$0 | over $100,000 |
Independent Trustees | Total
Compensation from the Trust |
Total
Compensation from the Fund Complex1 | ||
James M.
Concannon |
$43,172 | $280,750 | ||
H. Jeffrey
Dobbs2 |
27,869 | 181,264 | ||
James D.
Gressett |
45,387 | 295,000 | ||
Joseph Harroz,
Jr.3 |
59,126 | 384,500 | ||
Glendon E. Johnson,
Jr. |
44,138 | 287,000 | ||
Sandra A.J.
Lawrence2 |
27,869 | 181,264 | ||
Frank J. Ross,
Jr. |
46,913 | 305,000 | ||
Michael G.
Smith |
44,899 | 292,000 | ||
Edward M.
Tighe |
44,899 | 292,000 |
Interested Trustees | Total
Compensation from the Trust |
Total
Compensation from the Fund Complex1 | ||
Henry J.
Herrmann |
$0 | $0 | ||
Philip J.
Sanders2 |
0 | 0 |
1 | No pension or retirement benefits have been accrued as a part of the Trust’s expenses. |
2 | Elected as a Trustee of the Trust effective April 26, 2019. |
3 | Mr. Harroz receives an additional annual fee of $100,000 for his services as Independent Chair of the Board and of the Board of Trustees of each of the other trusts within the Fund Complex. |
James M.
Concannon |
$160,000 |
H. Jeffrey
Dobbs1 |
0 |
James D.
Gressett |
50,000 |
Joseph Harroz,
Jr. |
39,250 |
Glendon E. Johnson,
Jr. |
0 |
Sandra A.J.
Lawrence1 |
0 |
Frank J. Ross,
Jr. |
0 |
Michael G.
Smith |
150,000 |
Edward M.
Tighe |
150,000 |
1 | Elected as a Trustee of the Trust effective April 26, 2019. |
Director Emeritus | Aggregate
Compensation from the Trust |
Total
Compensation from the Fund Complex | ||
Jarold W.
Boettcher |
$30,824 | $200,000 | ||
John A.
Dillingham |
26,973 | 170,000 | ||
Albert W.
Herman |
53,796 | 170,000 | ||
William T.
Morgan |
8,765 | 65,500 | ||
Frederick Vogel
III |
17,352 | 78,500 | ||
Paul S.
Wise |
4,620 | 48,000 |
Portfolio Name | Class | Shareholder Name, City and State | Total
Shares Owned |
% of Portfolio | ||||
Ivy VIP Asset Strategy | I | Ivy
Investment Management Company Mission, KS |
33,711.416 | 97.31% | ||||
II | Nationwide
Investment Services Corporation Columbus, OH |
31,703,932.092 | 40.31% | |||||
Minnesota
Life Insurance Co. St. Paul, MN |
16,346,303.401 | 20.78% | ||||||
Ohio
National Life Insurance Co. Cincinnati, OH |
14,843,345.008 | 18.87% | ||||||
Ivy VIP Balanced | II | Nationwide
Investment Services Corporation Columbus, OH |
8,838,812.785 | 22.25% | ||||
Minnesota
Life Insurance Co. St. Paul, MN |
25,529,955.944 | 64.29% | ||||||
United
Investors Life Birmingham, AL |
2,854,330.686 | 7.19% | ||||||
Ivy VIP Core Equity | II | Bank
of New York-Mellon Mission, KS |
5,754,319.162 | 10.53% | ||||
Nationwide
Investment Services Corporation Columbus, OH |
12,033,684.252 | 22.03% | ||||||
Minnesota
Life Insurance Co. St. Paul, MN |
9,075,111.918 | 16.61% | ||||||
Waddell
& Reed Inc. Mission, KS |
12,996,029.016 | 11.89% | ||||||
United
Investors Life Birmingham, AL |
9,268,387.702 | 16.97% | ||||||
Ivy VIP Corporate Bond | II | Bank
of New York-Mellon Mission, KS |
18,335,925.111 | 16.82% | ||||
Nationwide
Investment Services Corporation Columbus, OH |
12,475,174.954 | 11.44% | ||||||
Minnesota
Life Insurance Co. St. Paul, MN |
21,488,939.798 | 19.71% | ||||||
Waddell
& Reed Inc. Mission, KS |
41,788,228.859 | 12.78% | ||||||
Ivy VIP Energy | I | Ivy
Investment Management Company Mission, KS |
43,230.136 | 90.83% | ||||
Lincoln
National Life Insurance Co. Fort Wayne, IN |
4,363.930 | 9.17% | ||||||
II | Nationwide
Investment Services Corporation Columbus, OH |
2,727,465.313 | 23.23% | |||||
Minnesota
Life Insurance Co. St. Paul, MN |
1,094,859.233 | 9.36% | ||||||
Pacific
Life Newport Beach, CA |
4,893809.801 | 41.83% | ||||||
Lincoln
National Life Insurance Co. Fort Wayne, IN |
1,224,728.710 | 10.47% |
Portfolio Name | Class | Shareholder Name, City and State | Total
Shares Owned |
% of Portfolio | ||||
Ivy VIP Global Bond | II | Jefferson
National Louisville, KY |
266,970.367 | 6.79% | ||||
Nationwide
Investment Services Corporation Columbus, OH |
1,229,845.274 | 31.27% | ||||||
Minnesota
Life Insurance Co. St. Paul, MN |
1,206,230.463 | 30.67% | ||||||
Guardian
Insurance & Annuity Bethlehem, PA |
960,108.327 | 24.41% | ||||||
Ivy VIP Global Equity Income | II | Bank
of New York-Mellon Mission, KS |
10,554,945.006 | 19.60% | ||||
Nationwide
Investment Services Corporation Columbus, OH |
4,980,502.817 | 9.25% | ||||||
Minnesota
Life Insurance Co. St. Paul, MN |
2,943,348.068 | 5.46% | ||||||
Waddell
& Reed Inc. Mission, KS |
25,526,709.002 | 23.70% | ||||||
Ivy VIP Global Growth | II | Nationwide
Investment Services Corporation Columbus, OH |
11,379,247.202 | 28.35% | ||||
Minnesota
Life Insurance Co. St. Paul, MN |
18,760,495.024 | 46.74% | ||||||
United
Investors Life Birmingham, AL |
8,290,960.849 | 20.65% | ||||||
Ivy VIP Government Money Market | II | Bank
of New York-Mellon Mission, KS |
26,392,665.840 | 17.91% | ||||
Nationwide
Investment Services Corporation Columbus, OH |
34,135,893.880 | 23.17% | ||||||
Minnesota
Life Insurance Co. St. Paul, MN |
11,715,052.840 | 7.95% | ||||||
Waddell
& Reed Inc. Mission, KS |
52,453,641.460 | 11.87% | ||||||
Ivy VIP Growth | II | Bank
of New York-Mellon Mission, KS |
6,842,203.194 | 10.05% | ||||
Nationwide
Investment Services Corporation Columbus, OH |
17,206,096.885 | 25.28% | ||||||
Minnesota
Life Insurance Co. St. Paul, MN |
6,652,203.662 | 9.77% | ||||||
Waddell
& Reed Inc. Mission, KS |
15,380,379.764 | 11.30% | ||||||
United
Investors Life Birmingham, AL |
14,679,213.757 | 21.57% | ||||||
Ivy VIP High Income | I | Bank
of New York-Mellon Mission, KS |
1,396,107.478 | 25.32% | ||||
Waddell
& Reed Inc. Mission, KS |
3,308,244.951 | 15.00% | ||||||
Lincoln
National Life Insurance Co. Fort Wayne, IN |
423,612.650 | 7.68% | ||||||
II | Nationwide
Investment Services Corporation Columbus, OH |
58,438,036.695 | 24.47% |
Portfolio Name | Class | Shareholder Name, City and State | Total
Shares Owned |
% of Portfolio | ||||
Minnesota
Life Insurance Co. St. Paul, MN |
26,092,747.477 | 10.92% | ||||||
AXA
Equitable Life Insurance Company Jersey City, NJ |
128,019,606.009 | 53.60% | ||||||
Ivy VIP International Core Equity | II | Bank
of New York-Mellon Mission, KS |
4,531,090.954 | 10.71% | ||||
Nationwide
Investment Services Corporation Columbus, OH |
2,646,738.558 | 6.26% | ||||||
Minnesota
Life Insurance Co. St. Paul, MN |
18,849,809.153 | 44.56% | ||||||
Waddell
& Reed Inc. Mission, KS |
11,926,576.340 | 14.10% | ||||||
Ivy VIP Limited-Term Bond | II | Bank
of New York-Mellon Mission, KS |
20,850,563.629 | 24.98% | ||||
Minnesota
Life Insurance Co. St. Paul, MN |
8,214,104.683 | 9.84% | ||||||
Waddell
& Reed Inc. Mission, KS |
46,696,986.643 | 13.99% | ||||||
Ivy VIP Mid Cap Growth | I | Bank
of New York-Mellon Mission, KS |
4,161,078.829 | 24.76% | ||||
Waddell
& Reed Inc. Mission, KS |
10,356,727.032 | 20.54% | ||||||
II | Nationwide
Investment Services Corporation Columbus, OH |
14,296,358.481 | 60.94% | |||||
Minnesota
Life Insurance Co. St. Paul, MN |
5,961,399.546 | 25.41% | ||||||
Lincoln
National Life Insurance Co. Fort Wayne, IN |
1,228,291.586 | 5.24% | ||||||
Ivy VIP Natural Resources | II | Nationwide
Investment Services Corporation Columbus, OH |
3,381,276.167 | 14.65% | ||||
Minnesota
Life Insurance Co. St. Paul, MN |
9,370,422.742 | 40.59% | ||||||
AXA
Equitable Life Insurance Company Jersey City, NJ |
1,600,644.766 | 6.93% | ||||||
Ohio
National Life Insurance Co. Cincinnati, OH |
7,833,812.786 | 33.93% | ||||||
Ivy VIP Pathfinder Aggressive | II | Nationwide
Investment Services Corporation Columbus, OH |
8,154,804.917 | 63.30% | ||||
Minnesota
Life Insurance Co. St. Paul, MN |
4,450,794.481 | 34.55% | ||||||
Ivy VIP Pathfinder Conservative | II | Nationwide
Investment Services Corporation Columbus, OH |
13,866,504.141 | 73.74% | ||||
Minnesota
Life Insurance Co. St. Paul, MN |
4,876,587.013 | 25.93% | ||||||
Ivy VIP Pathfinder Moderate | II | Nationwide
Investment Services Corporation Columbus, OH |
92,940,174.419 | 74.74% | ||||
Minnesota
Life Insurance Co. St. Paul, MN |
30,491,993.523 | 24.52% |
Portfolio Name | Class | Shareholder Name, City and State | Total
Shares Owned |
% of Portfolio | ||||
Ivy VIP Pathfinder Moderate – Managed Volatility | II | Nationwide
Investment Services Corporation Columbus, OH |
39,335,055.893 | 32.89% | ||||
Minnesota
Life Insurance Co. St. Paul, MN |
80,207,740.024 | 67.07% | ||||||
Ivy VIP Pathfinder Moderately Aggressive | II | Nationwide
Investment Services Corporation Columbus, OH |
107,289,640.765 | 72.75% | ||||
Minnesota
Life Insurance Co. St. Paul, MN |
38,774,070.355 | 26.29% | ||||||
Ivy VIP Pathfinder Moderately Aggressive – Managed Volatility | II | Nationwide
Investment Services Corporation Columbus, OH |
1,862,635.810 | 11.55% | ||||
Minnesota
Life Insurance Co. St. Paul, MN |
14,208,799.528 | 88.11% | ||||||
Ivy VIP Pathfinder Moderately Conservative | II | Nationwide
Investment Services Corporation Columbus, OH |
26,628,673.467 | 72.36% | ||||
Minnesota
Life Insurance Co. St. Paul, MN |
10,061,401.374 | 27.34% | ||||||
Ivy VIP Pathfinder Moderately Conservative – Managed Volatility | II | Nationwide
Investment Services Corporation Columbus, OH |
8,448,200.875 | 58.21% | ||||
Minnesota
Life Insurance Co. St. Paul, MN |
6,063,884.628 | 41.78% | ||||||
Ivy VIP Science and Technology | I | Ivy
Investment Management Company Mission, KS |
13,224.167 | 40.05% | ||||
Lincoln
National Life Insurance Co. Fort Wayne, IN |
19,792.958 | 59.95% | ||||||
II | Nationwide
Investment Services Corporation Columbus, OH |
5,217,170.808 | 28.35% | |||||
Minnesota
Life Insurance Co. St. Paul, MN |
3,782,106.065 | 20.55% | ||||||
Ohio
National Life Insurance Co. Cincinnati, OH |
3,656,596.562 | 19.87% | ||||||
United
Investors Life Birmingham, AL |
3,056,376.204 | 16.61% | ||||||
Lincoln
National Life Insurance Co. Fort Wayne, IN |
1,204,581.350 | 6.55% | ||||||
Ivy VIP Securian Real Estate Securities | II | Nationwide
Investment Services Corporation Columbus, OH |
2,893,297.289 | 69.17% | ||||
Minnesota
Life Insurance Co. St. Paul, MN |
1,087,234.754 | 25.99% | ||||||
Ivy VIP Small Cap Core | II | Nationwide
Investment Services Corporation Columbus, OH |
1,191,900.541 | 8.83% | ||||
Minnesota
Life Insurance Co. St. Paul, MN |
9,666,916.650 | 71.61% |
Portfolio Name | Class | Shareholder Name, City and State | Total
Shares Owned |
% of Portfolio | ||||
Midland
National Life Insurance West Des Moines, IA |
885,439.806 | 6.56% | ||||||
Ivy VIP Small Cap Growth | I | Bank
of New York-Mellon Mission, KS |
1,480,979.884 | 24.96% | ||||
Waddell
& Reed Inc. Mission, KS |
3,721,173.446 | 20.91% | ||||||
II | Nationwide
Investment Services Corporation Columbus, OH |
9,152,479.901 | 25.07% | |||||
Minnesota
Life Insurance Co. St. Paul, MN |
8,436,424.572 | 23.11% | ||||||
AXA
Equitable Life Insurance Company Jersey City, NJ |
10,104,839.474 | 27.68% | ||||||
United
Investors Life Birmingham, AL |
5,886,092.609 | 16.12% | ||||||
Ivy VIP Value | II | Bank
of New York-Mellon Mission, KS |
11,274,351.931 | 15.00% | ||||
Nationwide
Investment Services Corporation Columbus, OH |
8,260,584.521 | 10.99% | ||||||
Minnesota
Life Insurance Co. St. Paul, MN |
20,757,187.863 | 27.61% | ||||||
Waddell
& Reed Inc. Mission, KS |
25,471,968.133 | 16.94% |
Net Portfolio Assets | Fee
Payable to Securian AM as a Percentage of the Managed Volatility Portfolio’s Average Net Assets | |
Up to $500
million |
0.20% | |
Over $500 million and up to $1
billion |
0.17% | |
Over $1
billion |
0.15% |
2019 | 2018 | 2017 | |||||||||
Including
Waiver |
Excluding
Waiver |
Including
Waiver |
Excluding
Waiver |
Including
Waiver |
Excluding
Waiver | ||||||
Ivy VIP Asset
Strategy |
$5,391,373 | $6,142,930 | $6,142,931 | $6,560,269 | |||||||
Ivy VIP
Balanced |
2,304,300 | 2,433,898 | 2,527,170 | ||||||||
Ivy VIP Core
Equity |
4,814,859 | 4,256,693 | 3,029,382 | ||||||||
Ivy VIP Corporate
Bond |
2,637,936 | 2,577,871 | 2,097,226 | ||||||||
Ivy VIP
Energy |
354,200 | 1,240,803 | 1,401,253 | ||||||||
Ivy VIP Global
Bond |
$ 0 | 134,818 | 0 | 138,444 | $ 0 | 142,920 | |||||
Ivy VIP Global Equity
Income |
2,062,313 | 2,784,910 | 3,625,331 | ||||||||
Ivy VIP Global
Growth |
1,233,276 | 2,296,673 | 3,650,515 | ||||||||
Ivy VIP Government Money
Market |
757,658 | 1,021,500 | 1,392,864 | ||||||||
Ivy VIP
Growth |
5,295,420 | 5,784,758 | 6,154,407 | ||||||||
Ivy VIP High
Income |
5,460,798 | 5,648,218 | 5,904,022 | ||||||||
Ivy VIP International Core
Equity |
6,016,020 | 6,661,156 | 6,704,877 | ||||||||
Ivy VIP Limited-Term
Bond |
2,620,515 | 2,567,021 | 2,108,786 | ||||||||
Ivy VIP Mid Cap
Growth |
4,006,627 | 4,248,460 | 5,440,456 | 5,744,576 | 5,414,579 | 5,689,398 | |||||
Ivy VIP Natural
Resources |
756,407 | 987,165 | 1,291,697 | ||||||||
Ivy VIP Science and
Technology |
4,441,484 | 5,387,576 | 5,022,281 | ||||||||
Ivy VIP Securian Real Estate
Securities |
298,007 | 331,118 | 316,494 | 351,660 | 370,093 | 411,214 | |||||
Ivy VIP Small Cap
Core |
1,649,233 | 2,151,628 | 2,840,604 |
2019 | 2018 | 2017 | |||||||||
Including
Waiver |
Excluding
Waiver |
Including
Waiver |
Excluding
Waiver |
Including
Waiver |
Excluding
Waiver | ||||||
Ivy VIP Small Cap
Growth |
3,224,525 | 3,300,772 | 3,009,209 | 3,082,357 | 3,511,734 | ||||||
Ivy VIP
Value |
3,386,206 | 3,330,160 | 2,645,390 | ||||||||
Ivy VIP Pathfinder
Aggressive |
N/A | N/A | N/A | ||||||||
Ivy VIP Pathfinder
Conservative |
N/A | N/A | N/A | ||||||||
Ivy VIP Pathfinder
Moderate |
N/A | N/A | N/A | ||||||||
Ivy VIP Pathfinder Moderate - Managed
Volatility |
1,282,891 | 1,208,526 | 1,094,174 | ||||||||
Ivy VIP Pathfinder Moderately
Aggressive |
N/A | N/A | N/A | ||||||||
Ivy VIP Pathfinder Moderately Aggressive - Managed
Volatility |
181,655 | 184,088 | 172,720 | ||||||||
Ivy VIP Pathfinder Moderately
Conservative |
N/A | N/A | N/A | ||||||||
Ivy VIP Pathfinder Moderately Conservative - Managed
Volatility |
156,660 | 149,754 | 141,278 |
Average Daily Net Assets for the Month | Monthly Fee | |
$0 to $10
million |
$ 0 | |
$10 to $25
million |
$ 958 | |
$25 to $50
million |
$ 1,925 | |
$50 to $100
million |
$ 2,958 | |
$100 to $200
million |
$ 4,033 | |
$200 to $350
million |
$ 5,267 | |
$350 to $550
million |
$ 6,875 | |
$550 to $750
million |
$ 8,025 | |
$750 to $ 1.0
billion |
$10,133 | |
$1.0 billion and
over |
$12,375 |
Average Daily Net Assets for the Month | Monthly Fee | |
$0 to $10
million |
$ 0 | |
$10 to $25
million |
$ 479.00 | |
$25 to $50
million |
$ 962.50 | |
$50 to $100
million |
$1,479.00 | |
$100 to $200
million |
$2,016.50 | |
$200 to $350
million |
$2,633.50 | |
$350 to $550
million |
$3,437.50 | |
$550 to $750
million |
$4,012.50 | |
$750 to $1.0
billion |
$5,066.50 | |
$1.0 billion and
over |
$6,187.50 |
2019 | 2018 | 2017 | |||||||||
Including
Waiver |
Excluding
Waiver |
Including
Waiver |
Excluding
Waiver |
Including
Waiver |
Excluding
Waiver | ||||||
Ivy VIP Asset
Strategy |
$199,809 | $213,772 | $217,644 | ||||||||
Ivy VIP
Balanced |
96,285 | 109,085 | 118,632 | ||||||||
Ivy VIP Core
Equity |
165,564 | 157,233 | 125,804 | ||||||||
Ivy VIP Corporate
Bond |
144,936 | 141,357 | 125,518 | ||||||||
Ivy VIP
Energy |
27,903 | 59,799 | 66,989 | ||||||||
Ivy VIP Global
Bond |
13,657 | 13,717 | 13,787 | ||||||||
Ivy VIP Global Equity
Income |
92,815 | 112,536 | 134,298 | ||||||||
Ivy VIP Global
Growth |
63,013 | 90,801 | 125,682 | ||||||||
Ivy VIP Government Money
Market |
82,394 | 92,393 | $91,614 | 115,478 | |||||||
Ivy VIP
Growth |
191,518 | 199,532 | 209,521 | ||||||||
Ivy VIP High
Income |
213,797 | 216,534 | 228,780 | ||||||||
Ivy VIP International Core
Equity |
167,323 | 193,390 | 200,199 | ||||||||
Ivy VIP Limited-Term
Bond |
134,132 | 142,280 | 124,620 | ||||||||
Ivy VIP Mid Cap
Growth |
134,944 | 172,252 | 164,928 | ||||||||
Ivy VIP Natural
Resources |
43,436 | 59,921 | 61,336 | ||||||||
Ivy VIP Science and
Technology |
140,778 | 159,435 | 152,333 | ||||||||
Ivy VIP Securian Real Estate
Securities |
26,802 | 22,411 | 32,247 | ||||||||
Ivy VIP Small Cap
Core |
70,422 | 85,926 | 99,951 | ||||||||
Ivy VIP Small Cap
Growth |
123,909 | 110,896 | 123,880 | ||||||||
Ivy VIP
Value |
131,184 | 129,774 | 117,168 | ||||||||
Ivy VIP Pathfinder
Aggressive |
24,190 | 24,789 | 25,347 | ||||||||
Ivy VIP Pathfinder
Conservative |
27,637 | 33,597 | 35,438 | ||||||||
Ivy VIP Pathfinder
Moderate |
119,309 | 140,158 | 148,781 | ||||||||
Ivy VIP Pathfinder Moderate - Managed
Volatility |
114,992 | 110,193 | 100,824 | ||||||||
Ivy VIP Pathfinder Moderately
Aggressive |
146,671 | 165,054 | 174,523 | ||||||||
Ivy VIP Pathfinder Moderately Aggressive - Managed
Volatility |
26,864 | 27,195 | 26,250 |
2019 | 2018 | 2017 | |||||||||
Including
Waiver |
Excluding
Waiver |
Including
Waiver |
Excluding
Waiver |
Including
Waiver |
Excluding
Waiver | ||||||
Ivy VIP Pathfinder Moderately
Conservative |
52,577 | 55,129 | 57,402 | ||||||||
Ivy VIP Pathfinder Moderately Conservative - Managed
Volatility |
25,597 | 25,218 | 24,819 |
2019 | 2018 | 2017 | ||||
Ivy VIP Asset
Strategy1 |
$30,205 | $7,136 | $10,628 | |||
Ivy VIP
Balanced |
11,025 | 2,663 | 4,086 | |||
Ivy VIP Core
Equity2 |
0 | 0 | 0 | |||
Ivy VIP Corporate
Bond |
15,845 | 4,231 | 5,018 | |||
Ivy VIP
Energy3 |
3,763 | 1,114 | 2,093 | |||
Ivy VIP Global
Bond |
2,710 | 244 | 329 | |||
Ivy VIP Global Equity
Income |
9,430 | 2,949 | 5,597 | |||
Ivy VIP Global
Growth4 |
0 | 0 | 0 | |||
Ivy VIP Government Money
Market5 |
7,376 | 2,075 | 0 | |||
Ivy VIP
Growth |
22,039 | 6,093 | 9,994 | |||
Ivy VIP High
Income6 |
26,865 | 5,628 | 11,817 | |||
Ivy VIP International Core
Equity |
18,774 | 6,005 | 9,039 | |||
Ivy VIP Limited-Term
Bond |
13,342 | 4,003 | 4,640 |
2019 | 2018 | 2017 | ||||
Ivy VIP Mid Cap
Growth7 |
0 | 0 | 0 | |||
Ivy VIP Natural
Resources |
6,484 | 1,837 | 3,044 | |||
Ivy VIP Science and
Technology8 |
17,815 | 18,635 | 7,903 | |||
Ivy VIP Securian Real Estate
Securities |
3,804 | 181 | 787 | |||
Ivy VIP Small Cap
Core |
7,091 | 1,801 | 4,081 | |||
Ivy VIP Small Cap
Growth9 |
0 | 1,030 | 0 | |||
Ivy VIP
Value |
14,204 | 3,801 | 4,211 | |||
Ivy VIP Pathfinder
Aggressive |
3,270 | 631 | 967 | |||
Ivy VIP Pathfinder
Conservative |
934 | 754 | 1,322 | |||
Ivy VIP Pathfinder
Moderate |
18,724 | 5,840 | 9,875 | |||
Ivy VIP Pathfinder Moderate - Managed
Volatility |
16,110 | 4,586 | 6,586 | |||
Ivy VIP Pathfinder Moderately
Aggressive |
21,965 | 7,233 | 11,655 | |||
Ivy VIP Pathfinder Moderately Aggressive - Managed
Volatility |
3,653 | 709 | 993 | |||
Ivy VIP Pathfinder Moderately
Conservative |
6,874 | 1,751 | 2,895 | |||
Ivy VIP Pathfinder Moderately Conservative - Managed
Volatility |
3,468 | 570 | 845 |
1 | The following amounts of out-of-pocket expenses would have been paid by Ivy VIP Asset Strategy if a waiver had not been in effect: 2019, $30,207; and 2018, $7,152. |
2 | The following amounts of out-of-pocket expenses would have been paid by Ivy VIP Core Equity if a waiver had not been in effect: 2019, $20,300; 2018, $4,793; and 2017, $4,758. |
3 | The following amounts of out-of-pocket expenses would have been paid by Ivy VIP Energy if a waiver had not been in effect: 2018, $1,128. |
4 | The following amounts of out-of-pocket expenses would have been paid by Ivy VIP Global Growth if a waiver had not been in effect: 2019, $6,866; 2018, $1,920; and 2017, $4,733. |
5 | The following amounts of out-of-pocket expenses would have been paid by Ivy VIP Government Money Market if a waiver had not been in effect: 2017, $4,148. |
6 | The following amounts of out-of-pocket expenses would have been paid by Ivy VIP High Income if a waiver had not been in effect: 2018, $5,857. |
7 | The following amounts of out-of-pocket expenses would have been paid by Ivy VIP Mid Cap Growth if a waiver had not been in effect: 2019, $17,239; 2018, $5,383; and 2017, $7,782. |
8 | The following amounts of out-of-pocket expenses would have been paid by Ivy VIP Science and Technology if a waiver had not been in effect: 2018, $18,650. |
9 | The following amounts of out-of-pocket expenses would have been paid by Ivy VIP Small Cap Growth if a waiver had not been in effect: 2019, $14,194; 2018, $2,679; and 2017, $4,961. |
Including
Waiver |
Excluding
Waiver | ||
Ivy VIP Asset
Strategy |
$1,925,037 | ||
Ivy VIP
Balanced |
822,965 | ||
Ivy VIP Core
Equity |
$1,419,742 | 1,719,593 | |
Ivy VIP Corporate
Bond |
1,388,388 | ||
Ivy VIP
Energy |
103,664 | ||
Ivy VIP Global
Bond |
53,924 | ||
Ivy VIP Global Equity
Income |
736,540 | ||
Ivy VIP Global
Growth |
248,224 | 362,728 | |
Ivy VIP Government Money
Market |
– | ||
Ivy VIP
Growth |
1,891,222 | ||
Ivy VIP High
Income |
2,113,996 | ||
Ivy VIP International Core
Equity |
1,769,418 | ||
Ivy VIP Limited-Term
Bond |
1,318,436 | ||
Ivy VIP Mid Cap
Growth |
712,711 | 713,864 | |
Ivy VIP Natural
Resources |
222,474 | ||
Ivy VIP Science and
Technology |
1,304,776 | ||
Ivy VIP Securian Real Estate
Securities |
91,977 | ||
Ivy VIP Small Cap
Core |
485,070 | ||
Ivy VIP Small Cap
Growth |
828,740 | 829,985 | |
Ivy VIP
Value |
1,209,359 |
Including
Waiver |
Excluding
Waiver | ||
Ivy VIP Pathfinder
Aggressive |
– | ||
Ivy VIP Pathfinder
Conservative |
– | ||
Ivy VIP Pathfinder
Moderate |
– | ||
Ivy VIP Pathfinder Moderate - Managed
Volatility |
– | ||
Ivy VIP Pathfinder Moderately
Aggressive |
– | ||
Ivy VIP Pathfinder Moderately Aggressive - Managed
Volatility |
– | ||
Ivy VIP Pathfinder Moderately
Conservative |
– | ||
Ivy VIP Pathfinder Moderately Conservative - Managed
Volatility |
– |
Securities Lending Activities | Ivy
VIP Asset Strategy |
Ivy
VIP Balanced |
Ivy
VIP Core Equity |
Ivy
VIP Corporate Bond | ||||
Gross income from securities lending
activities |
$ 65,339 | $ 22,580 | $ 44,299 | $ 15,931 | ||||
Securities lending income paid to BNYM for services as securities lending agent
|
9,045 | 1,159 | 11,755 | 463 | ||||
Cash collateral management fees not included in securities lending income paid to
BNYM |
0 | 0 | 0 | 0 | ||||
Administrative fees not included in securities lending income paid to
BNYM |
0 | 0 | 0 | 0 | ||||
Indemnification fees not included in securities lending income paid to
BNYM |
0 | 0 | 0 | 0 | ||||
Rebates paid to (received from)
borrowers |
(47,734) | 8,086 | (102,639) | 10,135 | ||||
Other fees not included in securities lending income paid to
BNYM |
0 | 0 | 0 | 0 | ||||
Aggregate fees/compensation for securities lending
activities |
(38,689) | 9,245 | (90,884) | 10,598 | ||||
Net income from securities lending
activities |
$104,028 | $13,335 | $135,183 | $ 5,333 |
Securities Lending Activities | Ivy
VIP Energy |
Ivy
VIP Global Bond |
Ivy
VIP Global Equity Income |
Ivy
VIP Global Growth | ||||
Gross income from securities lending
activities |
$10,722 | $ 8,555 | $144,129 | $ 8,760 | ||||
Securities lending income paid to BNYM for services as securities lending
agent |
447 | 316 | 3,950 | 1,596 | ||||
Cash collateral management fees not included in securities lending income paid to
BNYM |
0 | 0 | 0 | 0 | ||||
Administrative fees not included in securities lending income paid to
BNYM |
0 | 0 | 0 | 0 | ||||
Indemnification fees not included in securities lending income paid to
BNYM |
0 | 0 | 0 | 0 | ||||
Rebates paid to (received from)
borrowers |
5,128 | 4,592 | 94,757 | (11,194) | ||||
Other fees not included in securities lending income paid to
BNYM |
0 | 0 | 0 | 0 | ||||
Aggregate fees/compensation for securities lending
activities |
5,575 | 4,908 | 98,707 | (9,598) | ||||
Net income from securities lending
activities |
$ 5,147 | $3,647 | $ 45,422 | $18,358 |
Securities Lending Activities | Ivy
VIP Growth |
Ivy
VIP High Income |
Ivy
VIP International Core Equity |
Ivy
VIP Limited-Term Bond |
Ivy
VIP Mid Cap Growth | |||||
Gross income from securities lending
activities |
$ 17,849 | $ 275,775 | $ 253,836 | $ 30,047 | $ 37,094 | |||||
Securities lending income paid to BNYM for services as securities lending
agent |
1,799 | 12,050 | 17,313 | 615 | 1,737 | |||||
Cash collateral management fees not included in securities lending income paid to
BNYM |
0 | 0 | 0 | 0 | 0 | |||||
Administrative fees not included in securities lending income paid to
BNYM |
0 | 0 | 0 | 0 | 0 | |||||
Indemnification fees not included in securities lending income paid to
BNYM |
0 | 0 | 0 | 0 | 0 | |||||
Rebates paid to (received from)
borrowers |
(4,636) | 125,125 | 37,412 | 22,352 | 15,374 | |||||
Other fees not included in securities lending income paid to
BNYM |
0 | 0 | 0 | 0 | 0 | |||||
Aggregate fees/compensation for securities lending
activities |
(2,837) | 137,175 | 54,725 | 22,967 | 17,111 | |||||
Net income from securities lending
activities |
$20,686 | $138,600 | $199,111 | $ 7,080 | $19,983 |
Securities Lending Activities | Ivy
VIP Natural Resources |
Ivy
VIP Science and Technology |
Ivy
VIP Small Cap Core |
Ivy
VIP Small Cap Growth |
Ivy
VIP Value | |||||
Gross income from securities lending
activities |
$21,259 | $ 94,200 | $29,297 | $87,014 | $111,712 | |||||
Securities lending income paid to BNYM for services as securities lending
agent |
670 | 27,685 | 2,383 | 5,253 | 1,402 | |||||
Cash collateral management fees not included in securities lending income paid to
BNYM |
0 | 0 | 0 | 0 | 0 | |||||
Administrative fees not included in securities lending income paid to
BNYM |
0 | 0 | 0 | 0 | 0 | |||||
Indemnification fees not included in securities lending income paid to
BNYM |
0 | 0 | 0 | 0 | 0 | |||||
Rebates paid to (received from)
borrowers |
12,883 | (251,875) | (502) | 21,339 | 94,173 | |||||
Other fees not included in securities lending income paid to
BNYM |
0 | 0 | 0 | 0 | 0 |
Securities Lending Activities | Ivy
VIP Natural Resources |
Ivy
VIP Science and Technology |
Ivy
VIP Small Cap Core |
Ivy
VIP Small Cap Growth |
Ivy
VIP Value | |||||
Aggregate fees/compensation for securities lending
activities |
13,553 | (224,190) | 1,881 | 26,592 | 95,575 | |||||
Net income from securities lending
activities |
$ 7,706 | $318,390 | $27,416 | $60,422 | $16,137 |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
2 | 1 | 3 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$4,992.2 | $10.7 | $250.8 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $ 0 | $ 0 |
Mark G. Beischel— | Ivy VIP Balanced |
Ivy VIP Corporate Bond | |
Ivy VIP Global Bond |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
10* | 0 | 1 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$5,774.2 | $0 | $183.4 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $0 | $ 0 |
* | For two of these accounts, Mr. Beischel is responsible for only a portion of the assets managed. |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
5 | 1 | 5 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$7,579.7 | $14.4 | $89.7 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $ 0 | $ 0 |
F. Chace Brundige— | Ivy VIP Asset Strategy |
Ivy VIP Pathfinder Aggressive | |
Ivy VIP Pathfinder Moderately Aggressive | |
Ivy VIP Pathfinder Moderate | |
Ivy VIP Pathfinder Moderately Conservative | |
Ivy VIP Pathfinder Conservative | |
Ivy VIP Pathfinder Moderate – Managed Volatility |
Ivy VIP Pathfinder Moderately Aggressive – Managed Volatility | |
Ivy VIP Pathfinder Moderately Conservative – Managed Volatility |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
18* | 0 | 0 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$6,918.5 | $0 | $0 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $0 | $0 |
* | For four of these accounts, Mr. Brundige is responsible for only a portion of the assets managed. |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
2 | 1 | 0 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$931.3 | $4.2 | $0 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $ 0 | $0 |
David P. Ginther— | Ivy VIP Energy |
Ivy VIP Natural Resources |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
4 | 0 | 1 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$697.5 | $0 | $0.2 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $0 | $ 0 |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
5* | 0 | 0 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$6,120.8 | $0 | $0 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $0 | $0 |
* | Two of these accounts are multi-manager accounts. The Assets Managed (in millions) represents the portion of the accounts managed by Mr. Gunther. |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
3 | 2 | 7 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$3,138.6 | $52.6 | $304.4 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $ 0 | $ 0 |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
2 | 0 | 0 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$2,912.7 | $0 | $0 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $0 | $0 |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
3 | 1 | 7 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$6,099.3 | $15.4 | $265.3 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $ 0 | $ 0 |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
3 | 1 | 1 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$5,121.8 | $154.5 | $22.7 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $ 0 | $ 0 |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
3 | 2 | 7 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$3,138.6 | $52.6 | $304.4 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $ 0 | $ 0 |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
3 | 2 | 7 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$3,138.6 | $52.6 | $304.4 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $ 0 | $ 0 |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
2 | 1 | 1 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$4,934.5 | $154.5 | $22.7 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $ 0 | $ 0 |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
3* | 0 | 0 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$1,238.4 | $0 | $0 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $0 | $0 |
* | One of these accounts is a multi-manager account. The Assets Managed (in millions) amount represents the portion of the account managed by Mr. Nightingale. |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
2 | 0 | 2 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$1,631.1 | $0 | $41.8 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $0 | $ 0 |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
3* | 0 | 0 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Assets Managed (in
millions) |
$1,238.4 | $0 | $0 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $0 | $0 |
* | One of these accounts is a multi-manager account. The Assets Managed (in millions) amount represents the portion of the account managed by Mr. Parker. |
Susan K. Regan— | Ivy VIP Balanced |
Ivy VIP Corporate Bond | |
Ivy VIP Limited-Term Bond |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
8 | 0 | 3 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$6,321.8 | $0 | $383.8 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $0 | $ 0 |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
2 | 0 | 0 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$1,117.1 | $0 | $0 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $0 | $0 |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
5 | 1 | 4 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$7,579.7 | $14.4 | $83.8 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $ 0 | $ 0 |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
2 | 0 | 1 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$8,730.9 | $0 | $0.9 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $0 | $ 0 |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
3 | 0 | 3 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$1,641.6 | $0 | $383.8 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $0 | $ 0 |
W. Jeffery Surles— | Ivy VIP Asset Strategy |
Ivy VIP Pathfinder Aggressive | |
Ivy VIP Pathfinder Moderately Aggressive | |
Ivy VIP Pathfinder Moderate | |
Ivy VIP Pathfinder Moderately Conservative | |
Ivy VIP Pathfinder Conservative | |
Ivy VIP Pathfinder Moderate – Managed Volatility | |
Ivy VIP Pathfinder Moderately Aggressive – Managed Volatility | |
Ivy VIP Pathfinder Moderately Conservative – Managed Volatility |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
18* | 0 | 0 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$6,918.5 | $0 | $0 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $0 | $0 |
* | For four of these accounts, Mr. Surles is responsible for only a portion of the assets managed. |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
2 | 0 | 2 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$8,730.9 | $0 | $7.7 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $0 | $ 0 |
Michael T. Wolverton— | Ivy VIP Energy |
Ivy VIP Natural Resources |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
4 | 0 | 1 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Assets Managed (in
millions) |
$697.5 | $0 | $0.2 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $0 | $ 0 |
Aaron D. Young— | Ivy VIP Pathfinder Aggressive |
Ivy VIP Pathfinder Moderately Aggressive | |
Ivy VIP Pathfinder Moderate | |
Ivy VIP Pathfinder Moderately Conservative | |
Ivy VIP Pathfinder Conservative | |
Ivy VIP Pathfinder Moderate – Managed Volatility | |
Ivy VIP Pathfinder Moderately Aggressive – Managed Volatility | |
Ivy VIP Pathfinder Moderately Conservative – Managed Volatility |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
15* | 0 | 0 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$3,422.9 | $0 | $0 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $0 | $0 |
* | For three of these accounts, Mr. Young is responsible for only a portion of the assets managed. |
• | The management of multiple funds and/or other accounts may result in a portfolio manager devoting unequal time and attention to the management of each fund and/or other account. IICO seeks to manage such competing interests for the time and attention of portfolio managers by having a portfolio manager focus on a particular investment discipline. Most other accounts managed by a portfolio manager are managed using the same investment models that are used in connection with the management of the funds. |
• | The portfolio manager might execute transactions for another fund or account that may adversely impact the value of securities held by the fund. Securities selected for funds or accounts other than the fund might outperform the securities selected for the fund. IICO seeks to manage this potential conflict by requiring all portfolio transactions to be allocated pursuant to IICO’s Allocation Procedures. |
Manager | Portfolio(s)
Managed in Ivy Variable Insurance Portfolios |
Dollar
Range of Shares Owned1 or Deemed Owned in Portfolio Managed |
Dollar
Range of Shares Owned or Deemed Owned in Similarly Managed2 Funds within the Fund Complex |
Dollar
Range of Shares Owned or Deemed Owned in the Fund Complex | ||||
Erik R.
Becker |
Ivy VIP Core Equity | $0 | over $1,000,000 | over $1,000,000 | ||||
Mark G.
Beischel |
Ivy VIP Balanced | $0 | $0 | $100,001 to $500,000 | ||||
Ivy VIP Corporate Bond | $0 | $0 | ||||||
Ivy VIP Global Bond | $0 | $100,001 to $500,000 | ||||||
Nathan A.
Brown |
Ivy VIP Mid Cap Growth | $0 | $500,001 to $1,000,000 | over $1,000,000 | ||||
F. Chace
Brundige |
Ivy VIP Asset Strategy | $0 | over $1,000,000 | over $1,000,000 | ||||
Ivy VIP Pathfinder Aggressive | $0 | N/A | ||||||
Ivy
VIP Pathfinder Moderately Aggressive |
$0 | N/A | ||||||
Ivy VIP Pathfinder Moderate | $0 | N/A | ||||||
Ivy
VIP Pathfinder Moderately Conservative |
$0 | N/A | ||||||
Ivy VIP Pathfinder Conservative | $0 | N/A | ||||||
Ivy
VIP Pathfinder Moderate – Managed Volatility |
$0 | N/A | ||||||
Ivy
VIP Pathfinder Moderately Aggressive – Managed Volatility |
$0 | N/A |
Manager | Portfolio(s)
Managed in Ivy Variable Insurance Portfolios |
Dollar
Range of Shares Owned1 or Deemed Owned in Portfolio Managed |
Dollar
Range of Shares Owned or Deemed Owned in Similarly Managed2 Funds within the Fund Complex |
Dollar
Range of Shares Owned or Deemed Owned in the Fund Complex | ||||
Ivy
VIP Pathfinder Moderately Conservative – Managed Volatility |
$0 | N/A | ||||||
Kenneth G.
Gau |
Ivy VIP Small Cap Core | $0 | $500,001 to $1,000,000 | $500,001 to $1,000,000 | ||||
David P.
Ginther |
Ivy VIP Energy | $0 | over $1,000,000 | over $1,000,000 | ||||
Ivy VIP Natural Resources | $0 | $0 | ||||||
Chad A.
Gunther |
Ivy VIP High Income | $0 | $100,001 to $500,000 | $500,001 to $1,000,000 | ||||
Bradley P.
Halverson |
Ivy VIP Small Cap Growth | $0 | $100,001 to $500,000 | $100,001 to $500,000 | ||||
Matthew A.
Hekman |
Ivy VIP Balanced | $0 | $100,001 to $500,000 | $100,001 to $500,000 | ||||
Bradley M.
Klapmeyer |
Ivy VIP Growth | $0 | $100,001 to $500,000 | $500,001 to $1,000,000 | ||||
John C.
Maxwell |
Ivy VIP International Core Equity | $0 | $500,001 to $1,000,000 | over $1,000,000 | ||||
Kenneth G.
McQuade |
Ivy VIP Small Cap Growth | $0 | $100,001 to $500,000 | $500,001 to $1,000,000 | ||||
Timothy J.
Miller |
Ivy VIP Small Cap Growth | $0 | over $1,000,000 | over $1,000,000 | ||||
Catherine L.
Murray |
Ivy VIP International Core Equity | $0 | $100,001 to $500,000 | $100,001 to $500,000 | ||||
Robert E.
Nightingale |
Ivy VIP Global Equity Income | $0 | over $1,000,000 | over $1,000,000 | ||||
Matthew T.
Norris |
Ivy VIP Value | $0 | $500,001 to $1,000,000 | $500,001 to $1,000,000 | ||||
Christopher J.
Parker |
Ivy VIP Global Equity Income | $0 | $100,001 to $500,000 | $100,001 to $500,000 | ||||
Susan K.
Regan |
Ivy VIP Balanced | $0 | $10,001 to $50,000 | $500,001 to $1,000,000 | ||||
Ivy VIP Corporate Bond | $0 | $10,001 to $50,000 | ||||||
Ivy VIP Limited-Term Bond | $0 | $100,001 to $500,000 | ||||||
Sarah C.
Ross |
Ivy VIP Global Growth | $0 | $500,001 to $1,000,000 | over $1,000,000 | ||||
Kimberly A.
Scott |
Ivy VIP Mid Cap Growth | $0 | over $1,000,000 | over $1,000,000 | ||||
Zachary H.
Shafran |
Ivy VIP Science and Technology | $0 | $100,001 to $500,000 | $500,001 to $1,000,000 | ||||
Mira
Stevovich |
Ivy VIP Government Money Market | $0 | $10,001 to $50,000 | over $1,000,000 | ||||
W. Jeffery
Surles |
Ivy VIP Asset Strategy | $0 | over $1,000,000 | over $1,000,000 | ||||
Ivy VIP Pathfinder Aggressive | $0 | N/A | ||||||
Ivy
VIP Pathfinder Moderately Aggressive |
$0 | N/A | ||||||
Ivy VIP Pathfinder Moderate | $0 | N/A | ||||||
Ivy
VIP Pathfinder Moderately Conservative |
$0 | N/A | ||||||
Ivy VIP Pathfinder Conservative | $0 | N/A | ||||||
Ivy
VIP Pathfinder Moderate – Managed Volatility |
$0 | N/A | ||||||
Ivy
VIP Pathfinder Moderately Aggressive – Managed Volatility |
$0 | N/A | ||||||
Ivy
VIP Pathfinder Moderately Conservative – Managed Volatility |
$0 | N/A | ||||||
Bradley J.
Warden |
Ivy VIP Science and Technology | $0 | $50,001 to $100,000 | $100,001 to $500,000 | ||||
Michael T.
Wolverton |
Ivy VIP Energy | $0 | $0 | $100,001 to $500,000 | ||||
Ivy VIP Natural Resources | $0 | $10,001 to $50,000 | ||||||
Aaron D.
Young |
Ivy VIP Pathfinder Aggressive | $0 | N/A | $0 | ||||
Ivy
VIP Pathfinder Moderately Aggressive |
$0 | N/A | ||||||
Ivy VIP Pathfinder Moderate | $0 | N/A | ||||||
Ivy
VIP Pathfinder Moderately Conservative |
$0 | N/A | ||||||
Ivy VIP Pathfinder Conservative | $0 | N/A |
Manager | Portfolio(s)
Managed in Ivy Variable Insurance Portfolios |
Dollar
Range of Shares Owned1 or Deemed Owned in Portfolio Managed |
Dollar
Range of Shares Owned or Deemed Owned in Similarly Managed2 Funds within the Fund Complex |
Dollar
Range of Shares Owned or Deemed Owned in the Fund Complex | ||||
Ivy
VIP Pathfinder Moderate – Managed Volatility |
$0 | N/A | ||||||
Ivy
VIP Pathfinder Moderately Aggressive – Managed Volatility |
$0 | N/A | ||||||
Ivy
VIP Pathfinder Moderately Conservative – Managed Volatility |
$0 | N/A |
1 | The Portfolios' shares are available for purchase only by PICs and are indirectly owned by investors in the Policies for which the Portfolios serve as underlying investment vehicles. |
2 | Shares deemed to be owned in any Portfolio or similarly managed style within the Fund Complex which is managed by the portfolio manager. |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
4 | 2 | 4 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$674.55 | $78.32 | $301.30 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $ 0 | $ 0 |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
3 | 2 | 1 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$592.97 | $78.32 | $52.55 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $ 0 | $ 0 |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
3 | 2 | 1 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$592.97 | $78.32 | $52.55 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $ 0 | $ 0 |
Merlin Erickson— | Ivy VIP Pathfinder Moderate – Managed Volatility |
Ivy VIP Pathfinder Moderately Aggressive – Managed Volatility | |
Ivy VIP Pathfinder Moderately Conservative – Managed Volatility |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
7 | 0 | 2 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$1,572.71 | $0 | $42.22 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $0 | $ 0 |
Jeremy Gogos— | Ivy VIP Pathfinder Moderate – Managed Volatility |
Ivy VIP Pathfinder Moderately Aggressive – Managed Volatility | |
Ivy VIP Pathfinder Moderately Conservative – Managed Volatility |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
7 | 0 | 2 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$1,572.71 | $0 | $42.22 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $0 | $ 0 |
Craig M. Stapleton— | Ivy VIP Pathfinder Moderate – Managed Volatility |
Ivy VIP Pathfinder Moderately Aggressive – Managed Volatility | |
Ivy VIP Pathfinder Moderately Conservative – Managed Volatility |
Registered
Investment Companies |
Other
Pooled Investment Vehicles |
Other
Accounts | |||
Number of Accounts
Managed |
8 | 1 | 150 | ||
Number of Accounts Managed with Performance-Based Advisory
Fees |
0 | 0 | 0 | ||
Assets Managed (in
millions) |
$1,654.28 | $557.60 | $24,001.92 | ||
Assets Managed with Performance-Based Advisory Fees (in
millions) |
$ 0 | $ 0 | $ 0 |
Manager | Dollar
Range of Shares owned* in Ivy VIP Securian Real Estate Securities |
Dollar
Range of Shares Owned in Fund Complex | ||
Lowell R.
Bolken |
$0 | $100,001 to $500,000 | ||
Joshua M.
Klaetsch |
$0 | $10,001 to $50,000 | ||
Matthew K.
Richmond |
$0 | $100,001 to $500,000 |
* | The Portfolio's shares are available for purchase only by PICs and are indirectly owned by investors in the Policies for which the Portfolio serves as an underlying investment vehicle. |
Manager | Dollar
Range of Shares owned* in Ivy VIP Pathfinder Moderate – Managed Volatility |
Dollar
Range of Shares owned* in Ivy VIP Pathfinder Moderately Aggressive – Managed Volatility |
Dollar
Range of Shares owned* in Ivy VIP Pathfinder Moderately Conservative – Managed Volatility |
Dollar
Range of Shares Owned in Fund Complex | ||||
Merlin
Erickson |
$0 | $0 | $0 | $10,001 to $50,000 | ||||
Jeremy
Gogos |
$0 | $0 | $0 | $0 | ||||
Craig M.
Stapleton |
$0 | $0 | $0 | $0 |
* | The Portfolio's shares are available for purchase only by PICs and are indirectly owned by investors in the Policies for which the Portfolio serves as an underlying investment vehicle. |
2019 | 2018 | 2017 | |||
Ivy VIP Asset
Strategy |
$ 382,429 | $ 440,089 | $ 728,335 | ||
Ivy VIP
Balanced |
94,948 | 136,508 | 121,982 | ||
Ivy VIP Core
Equity |
374,344 | 422,321 | 328,765 | ||
Ivy VIP Corporate
Bond |
0 | 0 | 0 | ||
Ivy VIP
Energy |
25,576 | 167,637 | 137,369 | ||
Ivy VIP Global
Bond |
175 | 407 | 360 | ||
Ivy VIP Global Equity
Income |
162,745 | 451,153 | 327,855 | ||
Ivy VIP Global
Growth |
42,146 | 247,477 | 422,463 | ||
Ivy VIP Government Money
Market |
0 | 0 | 0 | ||
Ivy VIP
Growth |
125,448 | 220,188 | 268,403 | ||
Ivy VIP High
Income |
1,366 | 760 | 1,715 | ||
Ivy VIP International Core
Equity |
777,203 | 786,996 | 1,160,896 | ||
Ivy VIP Limited-Term
Bond |
0 | 2,000 | 0 | ||
Ivy VIP Mid Cap
Growth |
100,533 | 305,062 | 286,065 | ||
Ivy VIP Natural
Resources |
45,731 | 55,987 | 101,948 | ||
Ivy VIP Science and
Technology |
173,267 | 146,542 | 301,018 | ||
Ivy VIP Securian Real Estate
Securities |
31,487 | 49,892 | 58,861 | ||
Ivy VIP Small Cap
Core |
302,072 | 529,027 | 745,594 | ||
Ivy VIP Small Cap
Growth |
208,160 | 339,397 | 406,991 | ||
Ivy VIP
Value |
350,945 | 382,800 | 364,216 | ||
Ivy VIP Pathfinder
Aggressive |
0 | 0 | 0 | ||
Ivy VIP Pathfinder
Conservative |
0 | 0 | 0 | ||
Ivy VIP Pathfinder
Moderate |
0 | 0 | 0 | ||
Ivy VIP Pathfinder Moderate - Managed
Volatility |
2,183 | 2,835 | 1,037 | ||
Ivy VIP Pathfinder Moderately
Aggressive |
0 | 0 | 0 | ||
Ivy VIP Pathfinder Moderately Aggressive - Managed
Volatility |
337 | 533 | 188 | ||
Ivy VIP Pathfinder Moderately
Conservative |
0 | 0 | 0 | ||
Ivy VIP Pathfinder Moderately Conservative - Managed
Volatility |
323 | 467 | 197 | ||
Total |
$3,201,418 | $4,688,078 | $5,764,258 |
Amount of Transactions | Brokerage Commissions | ||
Ivy VIP Asset
Strategy |
$ 446,860,407 | $ 356,457 | |
Ivy VIP
Balanced |
194,368,505 | 92,009 | |
Ivy VIP Core
Equity |
735,276,977 | 330,393 | |
Ivy VIP Corporate
Bond |
0 | 0 | |
Ivy VIP
Energy |
11,155,367 | 22,238 | |
Ivy VIP Global
Bond |
142,209 | 171 | |
Ivy VIP Global Equity
Income |
157,541,489 | 129,766 | |
Ivy VIP Global
Growth |
57,334,573 | 33,129 | |
Ivy VIP Government Money
Market |
0 | 0 | |
Ivy VIP
Growth |
383,293,223 | 116,695 | |
Ivy VIP High
Income |
497,241 | 768 | |
Ivy VIP International Core
Equity |
544,763,256 | 617,323 | |
Ivy VIP Limited-Term
Bond |
0 | 0 | |
Ivy VIP Mid Cap
Growth |
120,058,034 | 62,932 | |
Ivy VIP Natural
Resources |
33,299,861 | 38,680 | |
Ivy VIP Science and
Technology |
262,081,682 | 152,374 | |
Ivy VIP Securian Real Estate
Securities |
35,068,712 | 29,688 | |
Ivy VIP Small Cap
Core |
310,527,581 | 271,987 | |
Ivy VIP Small Cap
Growth |
203,526,681 | 184,281 | |
Ivy VIP
Value |
471,982,557 | 293,807 | |
Ivy VIP Pathfinder
Aggressive |
0 | 0 | |
Ivy VIP Pathfinder
Conservative |
0 | 0 | |
Ivy VIP Pathfinder
Moderate |
0 | 0 | |
Ivy VIP Pathfinder Moderate - Managed
Volatility |
0 | 0 | |
Ivy VIP Pathfinder Moderately
Aggressive |
0 | 0 | |
Ivy VIP Pathfinder Moderately Aggressive - Managed
Volatility |
0 | 0 | |
Ivy VIP Pathfinder Moderately
Conservative |
0 | 0 | |
Ivy VIP Pathfinder Moderately Conservative - Managed
Volatility |
0 | 0 | |
Total |
$3,967,778,355 | $2,732,698 |
(1) | Identifying Conflicts of Interest: IICO will evaluate the nature of its relationships to assess which, if any, might place its interests, as well as those of its affiliates, in conflict with those of a Portfolio's shareholders on a proxy |
voting matter. IICO will review the following three general categories with respect to any proxy voting matter to determine if there is a potential conflict: |
• | Business Relationships – IICO will review any business relationships for a material conflict where IICO provides investment advisory services for a company or an employee group, manages pension assets, administers employee benefit plans, leases office space from a company, or provides brokerage, underwriting, insurance, banking or consulting services to a company or if it (or an affiliate) is actively soliciting any such business from a company; or if IICO has determined that IICO (or an affiliate) otherwise has a similar significant relationship with a third party. |
• | Personal Relationships – IICO will review any personal relationships where it (or an affiliate) has a known personal relationship with the issuer’s management or other proponents of proxy proposals, participants in proxy contests, corporate directors, or candidates for directorships to determine if a material conflict exists. |
• | Familial Relationships – IICO will review any family relationships where it (or an affiliate) has a known familial relationship relating to a company (e.g., a spouse or other relative who serves as a director of a public company or is employed by the company) to determine if a material conflict exists. Any person with knowledge of a potential conflict of interest of IICO (or an affiliate) for a particular item shall disclose that conflict to the Director of Research of IICO. Any person with a known potential conflict of interest for a particular item shall disclose that conflict to the Director of Research and otherwise remove himself or herself from the proxy voting process with respect to that item. IICO or the Director of Research also will review all known relationships of portfolio managers and senior management for potential conflicts. IICO will designate an individual or committee to review all proxies to be voted by IICO on behalf of the Portfolios and identify any potential conflicts of interest on an ongoing basis. |
(2) | Determining “Material Conflicts”: IICO will review each relationship identified as having a potential conflict based on the individual facts and circumstances. For purposes of this review, IICO will determine materiality based on the reasonable likelihood that the relationship, in the particular context, could be viewed as important by the average shareholder. |
(3) | Procedures to Address Material Conflicts: IICO will use one or more of the following methods to vote proxies that have been determined to present a “Material Conflict.” |
• | Use a Proxy Voting Service for Specific Proposals – As a primary means of voting material conflicts, IICO will vote in accordance with the recommendation of an independent proxy voting service (Institutional Shareholder Services (ISS) or another independent third party if a recommendation from ISS is unavailable). |
• | Use a Predetermined Voting Policy – If no directives are provided by an independent proxy voting service, IICO may vote material conflicts pursuant to the pre-determined Proxy Voting Policies, established therein, should such subject matter fall sufficiently within the identified subject matter. |
• | Seek Board Guidance – Finally, if the Material Conflict does not fall within one of the situations referenced above, IICO may seek guidance from the Board on voting the proxy for such matters. Under this method, IICO will disclose the nature of the conflict to the Board (or a committee of the Board consisting primarily of disinterested directors and to whom authority to direct proxy voting has been delegated) and obtain the Board’s consent or direction to vote the proxies. |
(1) | the Portfolio must derive at least 90% of its gross income each taxable year from (a) dividends, interest, payments with respect to securities loans, and gains from the sale or other disposition of securities or foreign currencies, or other income (including gains from options, futures contracts, or forward currency contracts) derived with respect to its business of investing in securities or those currencies (collectively, Qualifying Income) and (b) net income from an interest in a QPTP (Income Requirement); and |
(2) | at the close of each quarter of the Portfolio's taxable year, (a) at least 50% of the value of its total assets must be represented by cash and cash items, U.S. government securities, securities of other RICs and other securities that are limited, in respect of any one issuer, to an amount that does not exceed 5% of the value of the Portfolio's total assets and that does not represent more than 10% of the issuer’s outstanding voting securities (equity securities of QPTPs being considered voting securities for these purposes) (50% Diversification Requirement), and (b) not more than 25% of the value of its total assets may be invested in (i) the securities (other than U.S. government securities or the securities of other RICs) of any one issuer, (ii) the securities (other than securities of other RICs) of two or more issuers the Portfolio controls that are determined to be engaged in the same, similar, or related trades or businesses, or (iii) the securities of one or more QPTPs (collectively, RIC Diversification Requirements). |
Item 28. | Exhibits: |
Item 29. | Persons Controlled by or Under Common Control with the Fund: Not applicable. |
Item 30. | Indemnification |
Item 31. | Business and Other Connections of Investment Adviser |
Item 32. | Principal Underwriter and Distributor |
(a) | Ivy Distributors, Inc. is the Principal Underwriter and Distributor of the Registrant’s shares. It is the principal underwriter to the following investment companies: Ivy Funds |
(b) | The information contained in the underwriter’s application on Form BD, as filed on September 13, 2019, SEC No. 8-34046 under the Securities Exchange Act of 1934, is incorporated by reference herein. |
(c) | No compensation was paid by the Registrant to any principal underwriter who is not an affiliated person of the Registrant or any affiliated person of such affiliated person. |
Item 33. | Location of Accounts and Records |
Item 34. | Management Services |
Item 35. | Undertakings: Not applicable. |
/s/ Philip J. Sanders Philip J. Sanders, President and Trustee |
/s/ Glendon E. Johnson, Jr. Glendon E. Johnson, Jr., Trustee |
/s/ Joseph Harroz, Jr. Joseph Harroz, Jr., Chairman and Trustee |
/s/ Sandra Lawrence Sandra Lawrence, Trustee |
/s/ James M. Concannon James M. Concannon, Trustee |
/s/ Frank J. Ross, Jr. Frank J. Ross, Jr., Trustee |
/s/ H. Jeffrey Dobbs H. Jeffrey Dobbs, Trustee |
/s/ Michael G. Smith Michael G. Smith, Trustee |
/s/ James D. Gressett James D. Gressett, Trustee |
/s/ Edward M. Tighe Edward M. Tighe, Trustee |
/s/ Henry J. Herrmann Henry J. Herrmann, Trustee |
|
Attest: | |
/s/ Jennifer K. Dulski Jennifer K. Dulski, Secretary |
Signatures | Title |
/s/Joseph Harroz, Jr.* Joseph Harroz, Jr. |
Chairman and Trustee |
/s/Philip J. Sanders Philip J. Sanders |
President and Trustee |
/s/Joseph W. Kauten Joseph W. Kauten |
Vice
President, Treasurer and Principal Financial Officer |
/s/James M. Concannon* James M. Concannon |
Trustee |
/s/H. Jeffrey Dobbs* H. Jeffrey Dobbs |
Trustee |
/s/James D. Gressett* James D. Gressett |
Trustee |
/s/Henry J. Herrmann* Henry J. Herrmann |
Trustee |
/s/Glendon E. Johnson, Jr.* Glendon E. Johnson, Jr. |
Trustee |
/s/Sandra A.J. Lawrence* Sandra A.J. Lawrence |
Trustee |
/s/Frank J. Ross, Jr.* Frank J. Ross, Jr. |
Trustee |
/s/Michael G. Smith* Michael G. Smith |
Trustee |
/s/Edward M. Tighe* Edward M. Tighe |
Trustee |
*By: | /s/ | Philip A. Shipp |
Philip A. Shipp | ||
Attorney-in-Fact |
ATTEST: | /s/ | Jennifer K. Dulski |
Jennifer K. Dulski | ||
Secretary |
1. | Investment Management Fee Waiver. | |
IICO agrees to reduce the management fee paid by the Fund by an annual rate of 0.09% of average daily net assets. | ||
2. | Termination. | |
2.1 | Termination. This Agreement shall terminate with respect to the Fund upon termination of the Fund's Investment Management Agreement, or April 30, 2021, whichever comes first. This Agreement may be terminated prior to expiration if such termination is approved by the Board of Trustees of the Trust, including the vote of a majority of the trustees who are not “interested persons” as defined in the 1940 Act. This Agreement supersedes any prior fee reduction agreement between IICO and the Trust with regards to the Fund. | |
3. | Miscellaneous. | |
3.1 | Captions. The captions of this Agreement are included for convenience of reference only and in no other way define or delineate any of the provisions hereof. | |
3.2 | Interpretation. Nothing contained herein shall be deemed to require the Trust or the Fund to take any action contrary to the Trust’s Declaration of Trust or Bylaws, or any applicable statutory or regulatory requirement to which it is subject or by which it is bound, or to relieve or deprive the Board of Trustees of the Trust of its responsibility for and control of the conduct of the affairs of the Trust or the Fund. | |
3.3 | Definitions. Any question of interpretation of any term or provision of this Agreement, including, but not limited to, the business management and investment advisory fees, the computations of net asset values, and the allocation of expenses, having a counterpart in or otherwise derived from the terms and provisions of the Investment Management Agreement or the 1940 Act, shall have the same meaning as and be resolved by reference to the Investment Management Agreement or the 1940 Act. |
1. | Investment Subadvisory Fee Waiver. | |
The amount of the subadvisory fee computed and paid pursuant to the second paragraph of Section 5 of the Subadvisory Agreement shall be reduced by 0.045%. | ||
2. | Termination. | |
2.1 | Termination. This Agreement shall terminate upon the earlier of: (i) the termination of the Investment Management Agreement between the Adviser and the Fund; (ii) the termination of the Subadvisory Agreement; or (iii) April 30, 2021. This Agreement may be terminated prior to expiration if such termination is approved by the Board of Trustees of the Trust, including the vote of a majority of the trustees who are not “interested persons” as defined in the 1940 Act. This Agreement supersedes any prior subadvisory fee reduction agreement between the Adviser and the Sub-Adviser with regards to the Fund. | |
3. | Miscellaneous. | |
3.1 | Captions. The captions of this Agreement are included for convenience of reference only and in no other way define or delineate any of the provisions hereof. | |
3.2 | Interpretation. Nothing contained herein shall be deemed to require the Board of Trustees of Ivy Variable Insurance Portfolios (“Trust”) or the Fund to take any action contrary to the Trust’s Declaration of Trust or Bylaws, or any applicable statutory or regulatory requirement to which it is subject or by which it is bound, or to relieve or deprive the Board of Trustees of the Trust of its responsibility for and control of the conduct of the affairs of the Trust or the Fund. | |
3.3 | Definitions. Any question of interpretation of any term or provision of this Agreement, including, but not limited to, the business management and investment advisory fees, the computations of net asset values, and the allocation of expenses, having a counterpart in or otherwise derived from the terms and provisions of the Subadvisory Agreement or the 1940 Act, shall have the same meaning as and be resolved by reference to the Subadvisory Agreement or the 1940 Act. |
IVY
INVESTMENT MANAGEMENT COMPANY |
SECURIAN
ASSET MANAGEMENT, INC. |
By:
/s/ Joseph Kauten Title: Vice President Date: March 12, 2020 |
By:
/s/ Gary M. Kleist Title: Senior Vice President Date: March 10, 2020 |
1. | Reimbursement of Expenses. | |
1.1 | Applicable Reimbursement Level and Term of Reimbursement. For the period from May 1, 2020 through April 30, 2021, IICO, IDI and/or WISC agree to reimburse sufficient management fees, Rule 12b-1 fees and/or shareholder servicing fees to cap the total annual ordinary Portfolio operating expenses (which would exclude interest, taxes, brokerage commissions, acquired fund fees and expenses, and extraordinary expenses, if any) for each Portfolio set forth below at the level in the following table (the “Reimbursement Amount”): |
Portfolio | Class I | Class II |
Ivy VIP Core Equity | 0.95% | |
Ivy VIP Global Growth | 1.13% | |
Ivy VIP Mid Cap Growth | 0.85% | 1.10% |
Ivy VIP Small Cap Growth | 1.14% |
1.2 | Payment of Reimbursement Amount. To effect the expense reimbursement provided for in this Agreement, the Portfolio may offset the appropriate Reimbursement Amount against the management fees, Rule 12b-1 fees and/or shareholder servicing fees payable under the Investment Management Agreement, Rule 12b-1 Plan and/or the applicable shareholder servicing agreement. Alternatively, the Reimbursement Amount shall be paid directly by IICO, IDI and/or WISC. Such offset shall be taken, or such direct payment shall be paid, two times per year within 30 days following the date of a Portfolio’s applicable semi-annual or annual reporting period. | |
2. | Termination and Effectiveness of Agreement. | |
2.1 | Termination. This Agreement shall terminate with respect to the applicable Portfolio upon the earlier of: (i) the termination of the Portfolio’s Investment Management Agreement, Rule 12b-1 Plan and/or applicable shareholder servicing agreement, or (ii) April 30, 2021. This Agreement may be terminated prior to expiration if such termination is approved by the Board of Trustees of the Trust, including the vote of a majority of the trustees who are not “interested persons” as defined in the 1940 Act. This Agreement supersedes any prior expense reimbursement agreements between a Portfolio, IICO, IDI and WISC, as it relates specifically to the waivers identified above. | |
2.2 | Effectiveness. This Agreement shall be effective May 1, 2020. | |
3. | Miscellaneous. | |
3.1 | Captions. The captions in this Agreement are included for convenience of reference only and in no other way define or delineate any of the provisions hereof. | |
3.2 | Interpretation. Nothing contained herein shall be deemed to require Ivy Variable Insurance Portfolios or the Portfolios to take any action contrary to the Ivy Variable Insurance Portfolios’ Declaration of Trust or Bylaws, or any applicable statutory or regulatory requirement to which it is subject or by which it is bound, or to relieve or deprive the Board of Trustees of Ivy Variable Insurance Portfolios of its responsibility for and control of the conduct of the affairs of Ivy Variable Insurance Portfolios or the Portfolios. | |
3.3 | Definitions. Any question of interpretation of any term or provision of this Agreement, including but not limited to the management fees, the Rule 12b-1 Plan and/or shareholder servicing fees, the computations of net asset values, and the allocation of expenses, having a counterpart in or otherwise derived from the terms and provisions of the Investment Management Agreement, Rule 12b-1 Plan, the applicable shareholder servicing agreement or the 1940 Act, shall have the same meaning as and be resolved by reference to the Investment Management Agreement, Rule 12b-1 Plan, the applicable shareholder servicing agreement or the 1940 Act. |
1. | Reimbursement of Expenses. | |
1.1 | Applicable Reimbursement Level and Term of Reimbursement. For the period from May 1, 2020 through April 30, 2021, IDI and/or WISC agrees to reimburse sufficient fees to ensure that the total annual ordinary portfolio operating expenses (which would exclude interest, taxes, brokerage commissions, acquired fund fees and expenses and extraordinary expenses, if any) of the Class I shares of that Portfolio are at all times equal to the total annual ordinary portfolio operating expenses of the Class II shares of that Portfolio less twenty-five basis points (0.25%), as calculated at the end of each month (the “Reimbursement Amount”). | |
1.2 | Payment of Reimbursement Amount. To effect the expense reimbursement provided for in this Agreement, the Reimbursement Amount shall be paid directly by IDI and/or WISC. Such direct payment shall be paid two times per year within 30 days following the date of a Portfolio’s applicable semi-annual or annual reporting period. | |
2. | Termination and Effectiveness of Agreement. | |
2.1 | Termination. This Agreement shall terminate on April 30, 2021. This Agreement may be terminated prior to expiration if such termination is approved by the Board of Trustees of the Trust, including the vote of a majority of the trustees who are not “interested persons” as defined in the 1940 Act. This Agreement supersedes any prior expense reimbursement agreements between a Portfolio, IDI and WISC. | |
2.2 | Effectiveness. This Agreement shall be effective May 1, 2020. | |
3. | Miscellaneous. | |
3.1 | Captions. The captions in this Agreement are included for convenience of reference only and in no other way define or delineate any of the provisions hereof. | |
3.2 | Interpretation. Nothing contained herein shall be deemed to require the Trust or a Portfolio to take any action contrary to the Trust’s Declaration of Trust or Bylaws, or any applicable statutory or regulatory requirement to which it is subject or by which it is bound, or to relieve or deprive the Board of Trustees of the Trust of its responsibility for and control of the conduct of the affairs of the Trust or a Portfolio. | |
3.3 | Definitions. Any question of interpretation of any term or provision of this Agreement, the computations of net asset values, and the allocation of expenses, having a counterpart, shall have the same meaning as and be resolved by reference to the 1940 Act. |
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