N-CSRS 1 ivyinc_mainpart.htm MAIN PART -- IVY FUNDS, INC.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-6569

Ivy Funds, Inc.

(Exact name of registrant as specified in charter)

6300 Lamar Avenue, Overland Park, Kansas 66202

(Address of principal executive offices) (Zip code)

Kristen A. Richards

6300 Lamar Avenue

Overland Park, Kansas 66202

(Name and address of agent for service)

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

Date of fiscal year end: March 31

Date of reporting period: September 30, 2005

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507.

ITEM 1. REPORTS TO STOCKHOLDERS.

Semiannual Report
September 30, 2005

Ivy Asset Strategy Fund
Ivy Capital Appreciation Fund
Ivy Core Equity Fund
Ivy High Income Fund
Ivy International Growth Fund
Ivy Large Cap Growth Fund
Ivy Limited-Term Bond Fund
Ivy Mid Cap Growth Fund
Ivy Money Market Fund
Ivy Municipal Bond Fund
Ivy Science and Technology Fund
Ivy Small Cap Growth Fund

CONTENTS


3		President's Letter
5		Illustration of Fund Expenses
11		Ivy Asset Strategy Fund
28		Ivy Capital Appreciation Fund
41		Ivy Core Equity Fund
53		Ivy High Income Fund
75		Ivy International Growth Fund
87		Ivy Large Cap Growth Fund
98		Ivy Limited-Term Bond Fund
110		Ivy Mid Cap Growth Fund
122		Ivy Money Market Fund
135		Ivy Municipal Bond Fund
151		Ivy Science and Technology Fund
162		Ivy Small Cap Growth Fund
174		Notes to Financial Statements
196		Report of Independent Registered Public Accounting Firm
197		Renewal of Investment Management Agreement
201		Proxy Voting Information
202		Quarterly Portfolio Schedule Information
202		IRA Disclosure

This report is submitted for the general information of the shareholders of Ivy Funds, Inc. It is not authorized for distribution to prospective investors in the Funds unless preceded or accompanied by a current Ivy Funds, Inc. prospectus and current performance information.

President's Letter
September 30, 2005

Dear Shareholder:

Enclosed is our report on your Fund's operations for the six months ended September 30, 2005. Over the period, the financial markets remained fairly resilient in the face of challenges from a variety of directions. The S&P 500 Index increased 5.02 percent during the six-month period, while the Dow Jones Industrial Average rose 1.76 percent. Bonds also rose slightly, with the Citigroup Broad Investment Grade Index returning 2.43 percent over the last six months.

Between April and September, the financial markets weathered increasing energy prices, rising interest rates, budding inflationary pressures and, most dramatically, the fallout from two major hurricanes that tragically struck this country's Gulf Coast. Hurricane Katrina silenced an entire major American city, along with the largest port facility in the country, which is the fifth largest port in the world. Compounded by Hurricane Rita several weeks later, it brought devastating circumstances across four states and an economic impact that is still being evaluated.

Despite the setbacks, the U.S. economy has remained solid. Corporate profits overall have generally been relatively strong, and global economies remain fundamentally sound. We do believe, however, that economic growth likely will slow somewhat in the U.S. in the third and fourth quarters of 2005, due to higher interest rates and higher energy prices.

The Federal Reserve apparently believes the economy is sound enough that it has continued its campaign of steadily raising short-term interest rates. Most recently, the Fed enacted another quarter-point increase in late September, bringing interest rates to 3.75 percent. The Fed stated that it still believes monetary conditions remain "accommodative," indicating apparently that they intend to continue raising rates somewhat further.

The other major development during the period was the rapid rise of oil prices. Crude oil hovered just above $40 per barrel at the onset of 2005. By the end of September, the price surpassed $65 per barrel. The world is facing constraints in supply such as we have never seen before. Many are forecasting that prices may ease some toward year-end, but we believe that, longer term, higher prices are here to stay. As investors, we must remain aware of that reality, its impact on the world economies, and any opportunities that it may create.

Regardless of the short-term challenges brought on by economic or geopolitical events - and although past performance is no guarantee of future results - stocks have historically continued to rise over time. That is why we believe it is important to develop and maintain a long-term financial plan for your personal situation. Through appropriate diversification among four or five or so different asset classes, you can potentially provide more balance to your investment portfolio over time.

Your financial advisor can help you with these strategies and work with you to develop and maintain a customized plan based on your individual situation. We believe that focusing on that plan, despite the swings of the market, is important as you work toward a sound financial future.

Thank you for your partnership and your continued commitment to your investment program.

Respectfully,
Henry J. Herrmann, CFA

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

Illustration of Fund Expenses

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, redemption fees and exchange fees; and (2) ongoing costs, including management fees, distribution and service fees, and other Fund expenses. The following tables are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the six-month period ended September 30, 2005.

Actual Expenses

The first line for each share class in the following tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, a $7,500 account value divided by $1,000 = 7.5), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. There may be additional fees charged to holders of certain accounts that are not included in the expenses shown in the tables. These fees apply to Individual Retirement Accounts (IRAs), IRA Rollovers, Roth IRAs, Conversion Roth IRAs, Simplified Employee Pension (SEP), Simple IRAs, Tax-Sheltered Accounts (TSAs), Keogh Plans, Owner Only 401(k) (Exclusive K) Plans and Final Pay Plans. As of the close of the six months covered by the tables, a customer is charged an annual fee of $15 within each plan type. This fee is waived for IRA Rollovers and Conversion Roth IRAs if the customer owns another type of IRA. Coverdell Education Savings Account plans are charged an annual fee of $10 per customer. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value as such additional expenses are not reflected in the information provided in the expense tables. Additional fees have the effect of reducing investment returns.

Hypothetical Example for Comparison Purposes

The second line for each share class of the following tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees or exchange fees. Therefore, the second line of each share class in the tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Ivy Asset Strategy Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*

Based on Actual Fund Return ⁽¹⁾
Class A	$	1,000	$	1,159.80		1.37	%	$	7.44
Class B		1,000		1,154.50		2.23			12.02
Class C		1,000		1,155.80		2.10			11.34
Class Y		1,000		1,160.30		1.28			6.91
Based on 5% Return ⁽²⁾
Class A	$	1,000	$	1,018.18		1.37	%	$	6.95
Class B		1,000		1,013.91		2.23			11.24
Class C		1,000		1,014.55		2.10			10.60
Class Y		1,000		1,018.67		1.28			6.46

Ivy Capital Appreciation Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Peroid*

Based on Actual Fund Return ⁽¹⁾
Class A	$	1,000	$	1,073.80		1.22	%	$	6.33
Class B		1,000		1,069.60		2.16			11.22
Class C		1,000		1,069.70		1.99			10.35
Class Y		1,000		1,073.80		1.09			5.65
Based on 5% Return ⁽²⁾
Class A	$	1,000	$	1,018.97		1.22	%	$	6.16
Class B		1,000		1,014.23		2.16			10.92
Class C		1,000		1,015.07		1.99			10.08
Class Y		1,000		1,019.62		1.09			5.50

Ivy Core Equity Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*

Based on Actual Fund Return ⁽¹⁾
Class A	$	1,000	$	1,054.30		1.44	%	$	7.42
Class B		1,000		1,048.70		2.34			12.02
Class C		1,000		1,050.70		2.19			11.26
Class Y		1,000		1,054.40		1.22			6.27
Based on 5% Return ⁽²⁾
Class A	$	1,000	$	1,017.85		1.44	%	$	7.28
Class B		1,000		1,013.34		2.34			11.81
Class C		1,000		1,014.09		2.19			11.06
Class Y		1,000		1,018.97		1.22			6.16

Ivy High Income Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*

Based on Actual Fund Return ⁽¹⁾
Class A	$	1,000	$	1,024.50		1.44	%	$	7.33
Class B		1,000		1,019.90		2.34			11.83
Class C		1,000		1,020.50		2.21			11.19
Class Y		1,000		1,025.40		1.26			6.42
Based on 5% Return ⁽²⁾
Class A	$	1,000	$	1,017.83		1.44	%	$	7.30
Class B		1,000		1,013.36		2.34			11.79
Class C		1,000		1,013.99		2.21			11.16
Class Y		1,000		1,018.73		1.26			6.40

Ivy International Growth Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*

Based on Actual Fund Return ⁽¹⁾
Class A	$	1,000	$	1,126.00		1.88	%	$	10.03
Class B		1,000		1,120.80		2.88			15.30
Class C		1,000		1,121.60		2.77			14.71
Class Y		1,000		1,128.10		1.55			8.28
Based on 5% Return ⁽²⁾
Class A	$	1,000	$	1,015.63		1.88	%	$	9.51
Class B		1,000		1,010.64		2.88			14.51
Class C		1,000		1,011.20		2.77			13.95
Class Y		1,000		1,017.29		1.55			7.85

Ivy Limited-Term Bond Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*

Based on Actual Fund Return ⁽¹⁾
Class A	$	1,000	$	1,013.80		1.33	%	$	6.71
Class B		1,000		1,009.30		2.21			11.13
Class C		1,000		1,009.50		2.17			10.93
Class Y		1,000		1,014.60		1.18			5.95
Based on 5% Return ⁽²⁾
Class A	$	1,000	$	1,018.41		1.33	%	$	6.72
Class B		1,000		1,013.99		2.21			11.16
Class C		1,000		1,014.19		2.17			10.96
Class Y		1,000		1,019.16		1.18			5.97

Ivy Mid Cap Growth Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*

Based on Actual Fund Return ⁽¹⁾
Class A	$	1,000	$	1,121.10		1.65	%	$	8.77
Class B		1,000		1,115.80		2.76			14.62
Class C		1,000		1,117.90		2.35			12.47
Class Y		1,000		1,123.50		1.25			6.65
Based on 5% Return ⁽²⁾
Class A	$	1,000	$	1,016.80		1.65	%	$	8.34
Class B		1,000		1,011.25		2.76			13.90
Class C		1,000		1,013.29		2.35			11.86
Class Y		1,000		1,018.81		1.25			6.32

Ivy Money Market Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*

Based on Actual Fund Return ⁽¹⁾
Class A	$	1,000	$	1,011.90		0.92	%	$	4.64
Class B		1,000		1,006.80		1.91			9.61
Class C		1,000		1,006.80		1.92			9.67
Based on 5% Return ⁽²⁾
Class A	$	1,000	$	1,020.46		0.92	%	$	4.66
Class B		1,000		1,015.49		1.91			9.65
Class C		1,000		1,015.43		1.92			9.71

Ivy Municipal Bond Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*

Based on Actual Fund Return ⁽¹⁾
Class A	$	1,000	$	1,024.00		0.98	%	$	4.97
Class B		1,000		1,020.10		1.75			8.85
Class C		1,000		1,019.90		1.78			8.99
Class Y		1,000		1,023.90		0.99			5.04
Based on 5% Return ⁽²⁾
Class A	$	1,000	$	1,020.16		0.98	%	$	4.96
Class B		1,000		1,016.31		1.75			8.83
Class C		1,000		1,016.17		1.78			8.97
Class Y		1,000		1,020.09		0.99			5.03

Ivy Science and Technology Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*

Based on Actual Fund Return ⁽¹⁾
Class A	$	1,000	$	1,145.70		1.55	%	$	8.36
Class B		1,000		1,139.80		2.64			14.19
Class C		1,000		1,141.30		2.42			13.01
Class Y		1,000		1,147.10		1.37			7.39
Based on 5% Return ⁽²⁾
Class A	$	1,000	$	1,017.28		1.55	%	$	7.86
Class B		1,000		1,011.81		2.64			13.34
Class C		1,000		1,012.92		2.42			12.23
Class Y		1,000		1,018.19		1.37			6.94

Ivy Small Cap Growth Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*

Based on Actual Fund Return ⁽¹⁾
Class A	$	1,000	$	1,131.50		1.52	%	$	8.14
Class B		1,000		1,126.20		2.47			13.14
Class C		1,000		1,128.10		2.21			11.80
Class Y		1,000		1,132.80		1.33			7.11
Based on 5% Return ⁽²⁾
Class A	$	1,000	$	1,017.43		1.52	%	$	7.71
Class B		1,000		1,012.71		2.47			12.44
Class C		1,000		1,013.98		2.21			11.17
Class Y		1,000		1,018.40		1.33			6.73

*Fund expenses for each share class are equal to the Fund's annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by 183 days in the six-month period ended September 30, 2005, and divided by 365.
(1)This section uses the Fund's actual total return and actual Fund expenses. It is a guide to the actual expenses paid by the Fund in the period. The "Ending Account Value" shown is computed using the Fund's actual return and the "Expenses Paid During Period" column shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. A shareholder may use the information here, together with the dollar amount invested, to estimate the expenses that were paid over the period. For every thousand dollars a shareholder has invested, the expenses are listed in the fourth column.
(2)This section uses a hypothetical 5% return and actual Fund expenses. It helps to compare the Fund's ongoing costs with other mutual funds. A shareholder can compare the Fund's ongoing costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.

The above illustrations are based on ongoing costs only and do not include any transactional costs, such as sales loads, redemption fees or exchange fees.

SHAREHOLDER SUMMARY OF IVY ASSET STRATEGY FUND
Portfolio Highlights

On September 30, 2005, Ivy Asset Strategy Fund had net assets totaling $204,288,632 invested in a diversified portfolio of:

78.20%		Common Stocks
9.57%		Cash and Cash Equivalents and Unrealized Gain on Open Forward Currency Contracts
5.29%		Bullion
3.26%		United States Government and Government Agency Obligations
2.46%		Corporate Debt Securities
1.22%		Other Government Securities

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Common Stocks	$	78.20
Cash and Cash Equivalents and Unrealized Gain on Open Forward Currency Contracts	$	9.57
Bullion	$	5.29
United States Government and Government Agency Obligations	$	3.26
Corporate Debt Securities	$	2.46
Other Government Securities	$	1.22

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Raw Materials Stocks	$	16.81
Energy Stocks	$	15.16
Cash and Cash Equivalents and Unrealized Gain on Open Forward Currency Contracts	$	9.57
Multi-Industry Stocks	$	9.00
Capital Goods Stocks	$	8.42
Financial Services Stocks	$	7.40
Bullion	$	5.29
Technology Stocks	$	4.97
Business Equipment and Services Stocks	$	3.92
Health Care Stocks	$	3.56
Consumer Nondurables Stocks	$	3.50
United States Government and Government Agency Obligations	$	3.26
Miscellaneous Stocks	$	3.07
Corporate Debt Securities	$	2.46
Consumer Durables Stocks	$	2.39
Other Government Securities	$	1.22


The Investments of Ivy Asset Strategy Fund
September 30, 2005
BULLION - 5.29%		Troy Ounces			Value


Gold			23,020	$	10,803,447
(Cost: $9,331,408)


COMMON STOCKS			Shares


Aircraft - 2.43%
BAE SYSTEMS plc (A)			258,060		1,563,407
Boeing Company (The)			31,850		2,164,208
United Technologies Corporation			23,900		1,238,976
					4,966,591
Banks - 1.87%
Kabushiki Kaisha Mitsubishi Tokyo Financial Group (A)			165		2,165,793
Unibanco - Uniao de Bancos Brasileiros S.A., GDR			31,500		1,656,900
					3,822,693
Broadcasting - 0.47%
XM Satellite Radio Holdings Inc., Class A*			26,540		952,919

Business Equipment and Services - 3.92%
Dentsu Inc. (A)*			617		1,750,200
Headwaters Incorporated*			47,676		1,783,082
Jacobs Engineering Group Inc.*			18,000		1,213,200
Mitsubishi Corporation (A)			50,700		1,000,467
Mitsui & Co., Ltd. (A)			159,000		1,990,389
Pacific Basin Shipping Limited (A)			567,000		279,575
					8,016,913
Capital Equipment - 4.37%
Caterpillar Inc.			53,000		3,113,750
Chicago Bridge & Iron Company N.V., NY Shares			31,158		968,702
China Shenhua Energy Company Limited, H Shares (A)*	1,409,000				1,652,860
Deere & Company (B)			15,039		920,387
SMC Corporation (A)			13,300		1,770,365
Shaw Group Inc. (The)*			20,400		503,064
					8,929,128
Chemicals - Petroleum and Inorganic - 0.75%
Yara International ASA (A)			84,700		1,528,963

Chemicals - Specialty - 0.64%
Scotts Miracle-Gro Company (The)			14,953		1,314,817


Coal - 2.47%
Foundation Coal Holdings, Inc.		27,700		1,065,065
Peabody Energy Corporation		47,150		3,977,103
				5,042,168
Construction Materials - 2.22%
CRH public limited company (A)		30,340		822,369
Cemex, S.A. de C.V., ADR		70,916		3,708,907
				4,531,276
Electrical Equipment - 0.21%
Ushio Inc. (A)		20,800		422,358

Electronic Components - 2.54%
Maxim Integrated Products, Inc.		18,300		780,403
Microchip Technology Incorporated		30,900		930,399
Samsung Electronics Co., Ltd. (A)		6,160		3,474,751
				5,185,553
Finance Companies - 2.80%
Rio Tinto plc (A)		115,100		4,705,583
SLM Corporation		18,818		1,009,398
				5,714,981
Food and Related - 2.92%
Archer Daniels Midland Company		140,000		3,452,400
Bunge Limited (B)		47,800		2,515,236
				5,967,636
Forest and Paper Products - 0.47%
Aracruz Celulose S.A., ADR		23,500		953,630

Gold and Precious Metals - 4.47%
Agnico-Eagle Mines Limited		70,650		1,046,326
Barrick Gold Corporation		170,100		4,941,405
Placer Dome Inc.		96,700		1,658,405
Yanzhou Coal Mining Company Limited, Class H (A)	1,874,560			1,486,135
				9,132,271
Health Care - Drugs - 1.85%
Genentech, Inc.*		11,905		1,002,520
Gilead Sciences, Inc.*		40,085		1,952,540
Neurocrine Biosciences, Inc.*		16,600		816,305
				3,771,365
Health Care - General - 0.36%
Schein (Henry), Inc.*		17,550		747,542

Hospital Supply and Management - 1.35%
Cerner Corporation*		21,400		1,859,339
Stryker Corporation		18,400		909,512
				2,768,851
Household - General Products - 0.58%
Colgate-Palmolive Company		22,550		1,190,415

Mining - 10.95%
Alumina Limited (A)		216,400		1,008,313
BHP Billiton Plc (A)		269,400		4,571,139
Cameco Corporation (A)		14,800		789,452
Falconbridge Limited (A)		68,400		1,827,804
Freeport-McMoRan Copper & Gold Inc., Class B		40,514		1,968,575
Inco Limited		51,300		2,429,055
Newmont Mining Corporation		102,600		4,839,642
Phelps Dodge Corporation		23,900		3,105,327
Southern Peru Copper Corporation		32,600		1,824,296
				22,363,603
Motor Vehicles - 2.39%
Toyota Motor Corporation (A)		106,400		4,874,070

Multiple Industry - 9.00%
3M Company		10,100		740,936
Alpha Natural Resources, Inc.*		50,240		1,509,210
Bucyrus International, Inc., Class A		21,750		1,066,402
Companhia Vale do Rio Doce, ADR		162,700		7,136,022
General Electric Company		113,103		3,808,178
Hutchison Whampoa Limited, Ordinary Shares (A)		267,000		2,762,105
Smiths Group plc (A)		80,200		1,356,493
				18,379,346
Non-Residential Construction - 1.62%
Fluor Corporation		19,964		1,285,282
Hyundai Heavy Industries Co., Ltd. (A)		20,000		1,488,872
Shimizu Corporation (A)		81,000		530,177
				3,304,331
Petroleum - Domestic - 0.55%
PetroChina Company Limited (A)(C)	1,350,000			1,131,178

Petroleum - International - 7.91%
Anadarko Petroleum Corporation		38,391		3,675,938
BP p.l.c., ADR		46,650		3,305,153
Burlington Resources Inc.		40,616		3,302,893
China Petroleum & Chemical Corporation, H Shares (A)	3,594,000			1,644,713
Exxon Mobil Corporation		66,603		4,231,955
				16,160,652
Petroleum - Services - 4.23%
Baker Hughes Incorporated		28,100		1,677,008
Schlumberger Limited		38,850		3,278,163
Transocean Inc.*		31,850		1,952,724
Weatherford International Ltd.*		25,400		1,743,964
				8,651,859
Real Estate Investment Trust - 0.41%
Keppel Land Limited (A)		388,000		848,413

Retail - Food Stores - 1.37%
CVS Corporation		49,200		1,427,292
Walgreen Co.		31,404		1,364,504
				2,791,796
Security and Commodity Brokers - 2.73%
Chicago Mercantile Exchange Holdings Inc.		4,181		1,410,251
Franklin Resources, Inc.		9,400		789,224
Goldman Sachs Group, Inc. (The)		12,700		1,544,066
Legg Mason, Inc.		16,800		1,842,792
				5,586,333
Utilities - Electric - 0.35%
Veolia Environment (A)		16,750		706,887

TOTAL COMMON STOCKS - 78.20%			$	159,758,538

(Cost: $124,077,707)


CORPORATE DEBT SECURITIES	Principal Amount in Thousands


Beverages - 0.25%
Central European Distribution Corporation,
8.0%, 7-25-12 (C)(D)	EUR400			514,456

Capital Equipment - 0.16%
Hyundai Motor Company,
5.3%, 12-19-08 (C)		$	320	320,580

Construction Materials - 0.26%
Interface, Inc.:
7.3%, 4-1-08			160	160,000
9.5%, 2-1-14			170	170,000
Ply Gem Industries, Inc.,
9.0%, 2-15-12			250	210,000
				540,000



Finance Companies - 0.50%
ALROSA Finance S.A.,
8.125%, 5-6-08	300		320,850
Russian Standard Bank,
7.5%, 10-7-10 (C)	200		200,000
SLM Corporation,
4.0%, 7-25-14	200		195,284
Toyota Motor Credit Corporation,
4.67%, 1-18-15	325		311,844
			1,027,978
Food and Related - 0.09%
ASG Consolidated LLC and ASG Finance, Inc.,
0.0%, 11-1-11 (E)	250		191,250

Hospital Supply and Management - 0.18%
US Oncology Holdings, Inc.,
9.26375%, 3-15-15 (C)	375		369,375

Mining - 0.27%
Vedanta Resources plc,
6.625%, 2-22-10 (C)	550		544,024

Motion Pictures - 0.14%
Cinemark, Inc.,
0.0%, 3-15-14 (E)	400		280,000

Multiple Industry - 0.23%
National Rural Utilities Cooperative Finance Corporation,
3.0%, 2-15-06	250		248,842
Sino-Forest Corporation,
9.125%, 8-17-11 (C)	200		216,000
			464,842
Utilities - Telephone - 0.38%
Open Joint Stock Company ''Vimpel-Communications'',
10.0%, 6-16-09 (C)	700		775,250

TOTAL CORPORATE DEBT SECURITIES - 2.46%		$	5,027,755

(Cost: $4,920,699)


OTHER GOVERNMENT SECURITIES


South Korea - 0.34%
Korea Development Bank (The),
3.98%, 10-29-06		700			694,621

United Kingdom - 0.88%
United Kingdom Treasury,
4.75%, 6-7-10 (D)	GBP1,000				1,803,895

TOTAL OTHER GOVERNMENT SECURITIES - 1.22%				$	2,498,516

(Cost: $2,561,244)


UNITED STATES GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS


Mortgage-Backed Obligations - 1.52%
Federal Home Loan Mortgage Corporation Agency REMIC/CMO (Interest Only):
5.0%, 4-15-19		$ 607			92,105
5.0%, 4-15-19			297		47,740
5.0%, 2-15-20			725		53,660
5.0%, 7-15-21			369		42,722
5.0%, 6-15-22			721		46,674
5.0%, 7-15-22		2,619			186,881
5.0%, 11-15-22			730		123,397
5.0%, 1-15-23			523		39,160
5.0%, 4-15-23			231		25,203
5.0%, 5-15-23			506		84,357
5.0%, 8-15-23			375		61,684
5.5%, 11-15-23		1,100			141,685
5.5%, 11-15-23		1,018			100,981
5.0%, 9-15-24			749		75,457
5.5%, 9-15-24			435		41,594
5.5%, 4-15-25			264		31,689
5.5%, 4-15-25			95		13,804
5.0%, 9-15-25			963		113,526
5.0%, 4-15-26		4,083			439,649
5.5%, 2-15-30			364		51,304
5.0%, 8-15-30			547		65,961
5.5%, 3-15-31			500		75,856
Federal National Mortgage Association Agency REMIC/CMO (Interest Only):
5.5%, 11-25-17			668		74,705
5.0%, 5-25-22			433		70,497
5.5%, 9-25-25			387		42,399
5.5%, 11-25-25			998		98,529
Government National Mortgage Association Agency REMIC/CMO (Interest Only):
5.0%, 1-20-30		920			147,695
5.0%, 6-20-31		1,003			156,469
5.0%, 7-20-33			206		40,984
5.5%, 11-20-33		1,069			195,757
5.5%, 7-1-35		1,771			319,513
					3,101,637
Treasury Obligation - 1.74%
United States Treasury Note,
1.5%, 3-31-06		3,600			3,557,671

TOTAL UNITED STATES GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 3.26%				$	6,659,308

(Cost: $6,458,155)



UNREALIZED GAIN ON OPEN FORWARD CURRENCY CONTRACTS - 0.05%	Face Amount in Thousands


British Pound, 3-8-06 (D)	GBP1,820			83,506
Euro, 6-8-06 (D)	EUR 300			7,394
Euro, 7-19-06 (D)		400		2,915
			$	93,815


SHORT-TERM SECURITIES	Principal Amount in Thousands


Capital Equipment - 1.47%
Deere (John) Capital Corporation,
3.7%, 10-5-05	$	3,000		2,998,767

Finance Companies - 2.44%
USAA Capital Corp.,
3.75%, 10- 4-05		5,000		4,998,437

Health Care - Drugs - 1.88%
Alcon Capital Corporation (Nestle S.A.),
3.8%, 10-6-05		3,840		3,837,973

Utilities - Electric - 1.66%
Wisconsin Electric Power Co.,
3.88%, 10-3-05		3,392		3,391,269

TOTAL SHORT-TERM SECURITIES - 7.45%			$	15,226,446

(Cost: $15,226,446)

TOTAL INVESTMENT SECURITIES - 97.93%			$	200,067,825

(Cost: $162,575,659)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 2.07%				4,220,807


NET ASSETS - 100.00%			$	204,288,632

Notes to Schedule of Investments
Certain acronyms are used within the body of the Fund's holdings. The definitions of these acronyms are as follows: REMIC - Real Estate Mortgage Investment Conduit; CMO - Collateralized Mortgage Obligation.
REMIC - Real Estate Mortgage Investment Conduit; CMO - Collateralized Mortgage Obligation.
The following credit default swap agreements were outstanding at September 30, 2005. (See Note 7 to financial statements):
	Counterparty	Reference Entity	Fixed Rate	Expiration Date	Notional Amount	Unrealized Appreciation/ Depreciation

	Merrill Lynch International	Dow Jones CDX Emerging Markets Series 4	1.8%	12-20-10	$1,800		$	(16,290	)
	Merrill Lynch International	Dow Jones CDX North America High Yield Series 4	3.6%	6-20-10	1,188			(35,350	)

							$	(51,640	)

*No dividends were paid during the preceding 12 months.
(A)Listed on an exchange outside the United States.
(B)Securities serve as cover for the following written call options outstanding at September 30, 2005. (See Note 6 to financial statements):

	Underlying Security	Contracts Subject to Call	Expiration Month/ Exercise Price	Premium Received		Market Value

	Bunge Limited	120	October/62.5	$	6,653		$	240
	Deere & Company	150	October/70		7,199			375

				$	13,852		$	615


(C)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers At September 30, 2005, the total value of these securities amounted to $4,070,863 or 1.99% of net assets.
(D)Principal amounts are denominated in the indicated foreign currency, where applicable (EUR - Euro, GBP - British Pound).
(E)The security does not bear interest for an initial period of time and subsequently becomes interest bearing.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY ASSET STRATEGY FUND
      September 30, 2005
      (In Thousands, Except for Per Share Amounts)


ASSETS
Investment securities - at value (Notes 1 and 3):
Bullion (cost - $9,332)	$	10,803
Securities (cost - $153,244)		189,265

		200,068
Cash denominated in foreign currencies (cost - $980)		980
Receivables:
Fund shares sold		4,930
Investment securities sold		969
Dividends and interest		386
Amortized swap premiums paid (Note 7)		25
Prepaid and other assets		40

Total assets		207,398

LIABILITIES
Payable for investment securities purchased		2,153
Due to custodian		497
Payable to Fund shareholders		319
Unrealized depreciation on swap agreements		52
Accrued shareholder servicing (Note 2)		40
Accrued accounting services fee (Note 2)		6
Accrued management fee (Note 2)		4
Accrued distribution fee (Note 2)		2
Accrued service fee (Note 2)		2
Amortized swap premiums received (Note 7)		2
Outstanding written options at market (premium received - $14) (Note 6)		1
Other		31

Total liabilities		3,109

Total net assets	$	204,289

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	125
Additional paid-in capital		164,797
Accumulated undistributed income:
Accumulated undistributed net investment income		245
Accumulated undistributed net realized gain on investment transactions		1,665
Net unrealized appreciation in value of investments		37,457

Net assets applicable to outstanding units of capital	$	204,289

Net asset value per share (net assets divided by shares outstanding):
Class A		$16.48
Class B		$16.29
Class C		$16.32
Class Y		$16.50
Capital shares outstanding:
Class A		5,341
Class B		1,101
Class C		5,544
Class Y		476
Capital shares authorized		200,000

See Notes to Financial Statements.

Statement of Operations
      IVY ASSET STRATEGY FUND
      For the Six Months Ended September 30, 2005
      (In Thousands)


INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $41)	$	1,061
Interest and amortization		484

Total income		1,545

Expenses (Note 2):
Investment management fee		493
Distribution fee:
Class A		6
Class B		52
Class C		244
Shareholder servicing:
Class A		73
Class B		24
Class C		74
Class Y		5
Service fee:
Class A		65
Class B		17
Class C		81
Class Y		8
Accounting services fee		33
Custodian fees		20
Audit fees		11
Other		62

Total expenses		1,268

Net investment income		277

REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		1,116
Realized net loss on written options		(318	)
Realized net gain on purchased options		96
Realized net loss on foreign currency transactions		(17	)

Realized net gain on investments		877

Unrealized appreciation in value of securities during the period	22,754
Unrealized appreciation in value of written options during the period		13
Unrealized appreciation in value of forward currency contracts during the period		316
Unrealized appreciation in value of foreign currency during the period		2

Unrealized appreciation in value of investments during the period		23,085

Net gain on investments	23,962

Net increase in net assets resulting from operations	$	24,239

See Notes to Financial Statements.

Statement of Changes in Net Assets
      IVY ASSET STRATEGY FUND
      (In Thousands)


	For the six months ended September 30,				For the fiscal year ended March 31,
	2005				2005

INCREASE IN NET ASSETS
Operations:
Net investment income		$	277			$	13
Realized net gain on investments			877				906
Unrealized appreciation			23,085				8,196

Net increase in net assets resulting from operations			24,239				9,115

Distributions to shareholders from (Note 1F): ⁽¹⁾
Net investment income:
Class A			(-	)			(100	)
Class B			(-	)			(9	)
Class C			(-	)			(60	)
Class Y			(-	)			(11	)
Realized gains on investment transactions:
Class A			(-	)			(207	)
Class B			(-	)			(78	)
Class C			(-	)			(396	)
Class Y			(-	)			(24	)

			(-	)			(885	)

Capital share transactions (Note 5)			70,969				25,513

Total increase			95,208				33,743
NET ASSETS
Beginning of period			109,081				75,338

End of period		$	204,289			$	109,081

Undistributed net investment income (loss)		$	245			$	(15	)

(1)See "Financial Highlights" on pages 24 - 27.

See Notes to Financial Statements.

Financial Highlights
      IVY ASSET STRATEGY FUND
      Class A Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,												For the period from 7-10-00⁽¹⁾to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	14.21		$	12.86		$	11.18		$	11.33		$	11.98		$	15.22

Income (loss) from investment operations:
Net investment income			0.03			0.06			0.08			0.16			0.25			0.15
Net realized and unrealized gain (loss) on investments			2.24			1.47			1.71			(0.16	)		(0.40	)		(0.60	)

Total from investment operations			2.27			1.53			1.79			(0.00	)		(0.15	)		(0.45	)

Less distributions from:
Net investment income			(0.00	)		(0.07	)		(0.11	)		(0.15	)		(0.30	)		(0.13	)
Capital gains			(0.00	)		(0.11	)		(0.00	)		(0.00	)		(0.20	)		(2.66	)

Total distributions			(0.00	)		(0.18	)		(0.11	)		(0.15	)		(0.50	)		(2.79	)

Net asset value, end of period		$	16.48		$	14.21		$	12.86		$	11.18		$	11.33		$	11.98

Total return⁽²⁾			15.98	%		12.02	%		16.06	%		0.00	%	-1.25		%	-3.77		%
Net assets, end of period (in millions)			$88			$39			$17			$9			$4			$2
Ratio of expenses to average net assets			1.37	%⁽³⁾		1.44	%		1.47	%		1.40	%		1.45	%		1.26	%⁽³⁾
Ratio of net investment income to average net assets			0.78	%⁽³⁾		0.56	%		0.53	%		1.23	%		2.28	%		2.26	%⁽³⁾
Portfolio turnover rate			25	%		98	%		254	%		109	%		143	%		215	%⁽⁴⁾

(1)Commencement of operations of the class.
(2)Total return calculated without taking into account the sales load deducted on an initial purchase.
(3)Annualized.
(4)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements.

Financial Highlights
      IVY ASSET STRATEGY FUND
      Class B Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,												For the period from 7-3-00⁽¹⁾ to
	9-30-05				2005			2004			2003			2002			3-31-01
Net asset value, beginning of period		$	14.11		$	12.83		$	11.17		$	11.32		$	11.97		$	15.21

Income (loss) from investment operations:
Net investment income (loss)			0.01			(0.03	)		(0.03	)		0.05			0.17			0.07
Net realized and unrealized gain (loss) on investments			2.17			1.44			1.71			(0.15	)		(0.41	)		(0.60	)

Total from investment operations			2.18			1.41			1.68			(0.10	)		(0.24	)		(0.53	)

Less distributions from:
Net investment income			(0.00	)		(0.02	)		(0.02	)		(0.05	)		(0.21	)		(0.05	)
Capital gains			(0.00	)		(0.11	)		(0.00	)		(0.00	)		(0.20	)		(2.66	)

Total distributions			(0.00	)		(0.13	)		(0.02	)		(0.05	)		(0.41	)		(2.71	)

Net asset value, end of period		$	16.29		$	14.11		$	12.83		$	11.17		$	11.32		$	11.97

Total return			15.45	%		11.02	%		15.07	%	-0.92		%	-2.03		%	-4.35		%
Net assets, end of period (in millions)			$18			$11			$7			$3			$3			$2
Ratio of expenses to average net assets			2.23	%⁽²⁾		2.30	%		2.38	%		2.35	%		2.25	%		2.15	%⁽²⁾
Ratio of net investment income (loss) to average net assets			-0.05	%⁽²⁾		-0.30	%		-0.40	%		0.31	%		1.50	%		1.37	%⁽²⁾
Portfolio turnover rate			25	%		98	%		254	%		109	%		143	%		215	%⁽³⁾

(1)Commencement of operations of the class.
(2)Annualized.
(3)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements.

Financial Highlights
      IVY ASSET STRATEGY FUND
      Class C Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,
	9-30-05				2005			2004			2003			2002			2001

Net asset value, beginning of period		$	14.12		$	12.83		$	11.17		$	11.32		$	11.97		$	15.21

Income (loss) from investment operations:
Net investment income (loss)			0.01			(0.03	)		(0.03	)		0.05			0.19			0.11
Net realized and unrealized gain (loss) on investments			2.19			1.45			1.73			(0.14	)		(0.43	)		(0.62	)

Total from investment operations			2.20			1.42			1.70			(0.09	)		(0.24	)		(0.51	)

Less distributions from:
Net investment income			(0.00	)		(0.02	)		(0.04	)		(0.06	)		(0.21	)		(0.07	)
Capital gains			(0.00	)		(0.11	)		(0.00	)		(0.00	)		(0.20	)		(2.66	)

Total distributions			(0.00	)		(0.13	)		(0.04	)		(0.06	)		(0.41	)		(2.73	)

Net asset value, end of period		$	16.32		$	14.12		$	12.83		$	11.17		$	11.32		$	11.97

Total return			15.58	%		11.11	%		15.21	%	-0.79		%	-1.98		%	-4.22		%
Net assets, end of period (in millions)			$90			$55			$49			$51			$47			$54
Ratio of expenses to average net assets			2.10	%⁽¹⁾		2.21	%		2.27	%		2.20	%		2.20	%		2.15	%
Ratio of net investment income (loss) to average net assets			0.08	%⁽¹⁾		-0.22	%		-0.26	%		0.46	%		1.59	%		0.86	%
Portfolio turnover rate			25	%		98	%		254	%		109	%		143	%		215	%

(1)Annualized.

See Notes to Financial Statements.

Financial Highlights
      IVY ASSET STRATEGY FUND
      Class Y Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,
	9-30-05				2005			2004			2003			2002			2001

Net asset value, beginning of period		$	14.22		$	12.87		$	11.18		$	11.33		$	11.98		$	15.26

Income (loss) from investment operations:
Net investment income			0.05			0.08			0.09			0.11			0.28			0.24
Net realized and unrealized gain (loss) on investments			2.23			1.45			1.71			(0.10	)		(0.42	)		(0.63	)

Total from investment operations			2.28			1.53			1.80			0.01			(0.14	)		(0.39	)

Less distributions from:
Net investment income			(0.00	)		(0.07	)		(0.11	)		(0.16	)		(0.31	)		(0.23	)
Capital gains			(0.00	)		(0.11	)		(0.00	)		(0.00	)		(0.20	)		(2.66	)

Total distributions			(0.00	)		(0.18	)		(0.11	)		(0.16	)		(0.51	)		(2.89	)

Net asset value, end of period		$	16.50		$	14.22		$	12.87		$	11.18		$	11.33		$	11.98

Total return			16.03	%		12.05	%		16.19	%		0.08	%	-1.14		%	-3.39		%
Net assets, end of period (in millions)			$8			$4			$2			$1			$1			$1
Ratio of expenses to average net assets			1.28	%⁽¹⁾		1.35	%		1.39	%		1.32	%		1.33	%		1.32	%
Ratio of net investment income to average net assets			1.00	%⁽¹⁾		0.66	%		0.67	%		1.34	%		2.44	%		1.71	%
Portfolio turnover rate			25	%		98	%		254	%		109	%		143	%		215	%

(1)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY CAPITAL APPRECIATION FUND
Portfolio Highlights

On September 30, 2005, Ivy Capital Appreciation Fund had net assets totaling $32,915,100 invested in a diversified portfolio of:

85.58%		Common Stocks
14.42%		Cash and Cash Equivalents and Put Options

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Health Care Stocks	$	23.33
Technology Stocks	$	17.61
Cash and Cash Equivalents and Put Options	$	14.42
Energy Stocks	$	9.56
Financial Services Stocks	$	6.67
Retail Stocks	$	6.07
Multi-Industry Stocks	$	5.72
Consumer Nondurables Stocks	$	4.50
Business Equipment and Services Stocks	$	3.82
Miscellaneous Stocks	$	2.93
Consumer Services Stocks	$	2.76
Transportation Stocks	$	2.61


The Investments of Ivy Capital Appreciation Fund
September 30, 2005
COMMON STOCKS	Shares			Value


Air Transportation - 0.29%
Southwest Airlines Co.		6,400	$	95,040

Aircraft - 2.75%
Boeing Company (The)		8,000		543,600
United Technologies Corporation		7,000		362,880
				906,480
Aluminum - 0.22%
Alcoa Incorporated		3,000		73,260

Banks - 1.19%
Bank of America Corporation		5,000		210,500
Citigroup Inc.		4,000		182,080
				392,580
Broadcasting - 1.56%
Comcast Corporation, Class A*		10,000		293,250
Viacom Inc., Class B		2,300		75,923
XM Satellite Radio Holdings Inc., Class A*		4,000		143,620
				512,793
Business Equipment and Services - 1.02%
Infosys Technologies Limited (A)		4,500		334,440

Capital Equipment - 0.11%
Dresser-Rand Group Inc.*		1,450		35,714

Chemicals - Petroleum and Inorganic - 1.14%
Monsanto Company		6,000		376,500

Communications Equipment - 1.33%
Cisco Systems, Inc.*		19,500		349,537
QUALCOMM Incorporated		2,000		89,370
				438,907
Computers - Main and Mini - 0.83%
Xerox Corporation*		20,000		273,000

Computers - Micro - 2.40%
Apple Computer, Inc.*		4,500		241,267
Dell Inc.*		16,000		547,120
				788,387
Computers - Peripherals - 4.47%
EMC Corporation*		15,000		194,100
Microsoft Corporation		29,000		746,025
Oracle Corporation*		15,000		185,925
SAP Aktiengesellschaft, ADR		8,000		346,640
				1,472,690
Defense - 1.64%
General Dynamics Corporation		4,500		537,975

Electronic Components - 3.56%
Analog Devices, Inc.		7,000		259,980
Intel Corporation		19,000		468,255
Maxim Integrated Products, Inc.		8,000		341,160
Texas Instruments Incorporated		3,000		101,700
				1,171,095
Electronic Instruments - 0.63%
KLA-Tencor Corporation		1,700		82,884
Novellus Systems, Inc.		5,000		125,425
				208,309
Finance Companies - 1.83%
Fannie Mae		1,500		67,230
SLM Corporation		10,000		536,400
				603,630
Health Care - Drugs - 7.66%
Amgen Inc.*		7,000		557,550
Genentech, Inc.*		5,500		463,155
Gilead Sciences, Inc. (A) *		8,000		389,680
MedImmune, Inc.*		11,000		369,930
Pfizer Inc.		12,000		299,640
Schering-Plough Corporation		13,000		273,650
Teva Pharmaceutical Industries Limited, ADR		5,000		167,050
				2,520,655
Health Care - General - 6.52%
Da Vita Inc.*		10,000		460,700
Johnson & Johnson		8,000		506,240
Schein (Henry), Inc.*		10,000		425,950
St. Jude Medical, Inc.*		8,000		374,400
Zimmer Holdings, Inc.*		5,500		378,895
				2,146,185
Hospital Supply and Management - 9.15%
Aetna Inc.		7,500		646,050
Caremark Rx, Inc.*		7,500		374,475
HCA Inc.		1,575		75,474
Health Net, Inc.*		8,000		378,560
PSS World Medical, Inc.*		12,000		159,600
PacifiCare Health Systems, Inc.*		7,500		598,350
Triad Hospitals, Inc.*		5,500		248,985
WellPoint, Inc.*		7,000		530,740
				3,012,234
Hotels and Gaming - 0.54%
Hilton Hotels Corporation		8,000		178,560

Household - General Products - 2.71%
Colgate-Palmolive Company		9,000		475,110
Procter & Gamble Company (The)		7,000		416,220
				891,330
Insurance - Property and Casualty - 0.27%
Berkshire Hathaway Inc., Class B*		32		87,392

Leisure Time Industry - 0.66%
Royal Caribbean Cruises Ltd.		5,000		216,000

Multiple Industry - 5.72%
China Netcom Group Corporation (Hong Kong) Limited, ADR		3,000		103,020
General Electric Company		16,000		538,720
Google Inc., Class A*		3,100		979,972
Huntsman Corporation*		5,000		97,750
Las Vegas Sands, Inc.*		5,000		164,550
				1,884,012
Petroleum - International - 4.89%
Anadarko Petroleum Corporation		3,000		287,250
Apache Corporation		5,000		376,100
Burlington Resources Inc.		5,000		406,600
Exxon Mobil Corporation		8,500		540,090
				1,610,040
Petroleum - Services - 4.67%
Nabors Industries Ltd.*		5,500		395,065
Patterson-UTI Energy, Inc.		11,000		396,495
Schlumberger Limited		5,000		421,900
Transocean Inc.*		5,300		324,943
				1,538,403
Railroad - 1.27%
Burlington Northern Santa Fe Corporation		7,000		418,600

Restaurants - 1.22%
Applebee's International, Inc.		3,000		62,055
Cheesecake Factory Incorporated (The)*		8,000		249,800
P.F. Chang's China Bistro, Inc.*		2,000		89,630
				401,485
Retail - Food Stores - 3.39%
CVS Corporation		19,000		551,190
Walgreen Co.		13,000		564,850
				1,116,040
Retail - General Merchandise - 1.46%
Target Corporation		5,000		259,650
Wal-Mart Stores, Inc.		5,000		219,100
				478,750
Security and Commodity Brokers - 3.38%
Goldman Sachs Group, Inc. (The)		4,000		486,320
Legg Mason, Inc.		2,500		274,225
Merrill Lynch & Co., Inc.		4,000		245,400
Morgan Stanley		2,000		107,880
				1,113,825
Timesharing and Software - 2.80%
eBay Inc.*		10,000		411,950
Yahoo! Inc.*		15,000		507,975
				919,925
Tobacco - 1.79%
Altria Group, Inc.		8,000		589,680

Trucking and Shipping - 1.05%
United Parcel Service, Inc., Class B		5,000		345,650

Utilities - Telephone - 1.46%
SBC Communications Inc.		20,000		479,400

TOTAL COMMON STOCKS - 85.58%			$	28,168,966

(Cost: $24,866,333)

PUT OPTIONS - 0.03%	Number of Contracts


CVS Corporation, October 27.5, Expires 10-22-05		190		3,800
Walgreen Co., October 42.5, Expires 10-22-05		130		4,550
(Cost: $24,051)			$	8,350


SHORT-TERM SECURITIES	Principal Amount in Thousands


Commercial Paper
Capital Equipment - 4.25%
Caterpillar Inc.,
3.74%, 10-14-05	$	1,400		1,398,109

Publishing - 4.25%
Tribune Co.,
3.91%, 10-3-05		1,401		1,400,696

Total Commercial Paper - 8.50%				2,798,805


Repurchase Agreement - 4.71%
J.P. Morgan Securities Inc., 2.75% Repurchase agreement dated 9-30-05 to be repurchased at $1,549,355 on 10-3-05 (B)		1,549		1,549,000

TOTAL SHORT-TERM SECURITIES - 13.21%			$	4,347,805

(Cost: $4,347,805)

TOTAL INVESTMENT SECURITIES - 98.82%			$	32,525,121

(Cost: $29,238,189)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.18%				389,979


NET ASSETS - 100.00%			$	32,915,100


Notes to Schedule of Investments
*No dividends were paid during the preceding 12 months.
(A)Securities serve as cover for the following written call options outstanding at September 30, 2005. (See Note 6 to financial statements):
	Underlying Security	Contracts Subject to Call	Expiration Month/ Exercise Price	Premium Received			Market Value

	Gilead Sciences, Inc.	40	November/50		$	3,748	$	5,600
	Infosys Technologies Limited	43	October/75			5,236		8,600

					$	8,984	$	14,200


(B)Collateralized by $1,533,344 United States Treasury Note, 6.5% due 10-15-06; market value and accrued interest aggregate $1,579,594.
See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY CAPITAL APPRECIATION FUND
      September 30, 2005
      (In Thousands, Except for Per Share Amounts)


ASSETS
Investment securities - at value (Notes 1 and 3):
Securities (cost - $27,689)	$	30,976
Repurchase Agreement (cost - $1,549)		1,549

		32,525
Receivables:
Investment securities sold		386
Fund shares sold		357
Dividends and interest		14
Prepaid and other assets		45

Total assets		33,327

LIABILITIES
Payable for investment securities purchased		243
Due to custodian		101
Payable to Fund shareholders		42
Outstanding written options at market (premium received - $9) (Note 6)		14
Accrued shareholder servicing (Note 2)		9
Accrued accounting services fee (Note 2)		2
Accrued management fee (Note 2)		1
Accrued distribution and service fees (Note 2)		-	*

Total liabilities		412

Total net assets	$	32,915

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	39
Additional paid-in capital		32,026
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(52	)
Accumulated undistributed net realized loss on investment transactions		(2,380	)
Net unrealized appreciation in value of securities		3,282

Net assets applicable to outstanding units of capital	$	32,915

Net asset value per share (net assets divided by shares outstanding):
Class A		$8.58
Class B		$8.15
Class C		$8.13
Class Y		$8.58
Capital shares outstanding:
Class A		2,893
Class B		228
Class C		748
Class Y		18
Capital shares authorized	350,000

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Operations
      IVY CAPITAL APPRECIATION FUND
      For the Six Months Ended September 30, 2005
      (In Thousands)


INVESTMENT LOSS
Income (Note 1B):
Dividends	$	85
Interest and amortization		35

Total income		120

Expenses (Note 2):
Investment management fee		78
Shareholder servicing:
Class A		25
Class B		4
Class C		6
Class Y		-	*
Service fee:
Class A		21
Class B		2
Class C		5
Class Y		-	*
Registration fees		27
Distribution fee:
Class A		2
Class B		6
Class C		16
Audit fees		13
Accounting services fee		10
Custodian fees		5
Other		5

Total		225
Less voluntary waiver of investment management fee (Note 2)		(54	)

Total expenses		171

Net investment loss		(51	)

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		312
Realized net gain on written options		13

Realized net gain on investments		325

Unrealized appreciation in value of securities during the period		1,471
Unrealized depreciation in value of purchased options during the period		(16	)
Unrealized depreciation in value of written options during the period		(5	)

Unrealized appreciation in value of investments during the period		1,450

Net gain on investments		1,775

Net increase in net assets resulting from operations	$	1,724

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Changes in Net Assets
      IVY CAPITAL APPRECIATION FUND
      (In Thousands)


	For the six months ended September 30,				For the fiscal year ended March 31,
	2005				2005

INCREASE IN NET ASSETS
Operations:
Net investment loss		$	(51	)		$	(20	)
Realized net gain on investments			325				167
Unrealized appreciation			1,450				535

Net increase in net assets resulting from operations			1,724				682

Distributions to shareholders from (Note 1F): ⁽¹⁾
Net investment income:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)
Realized gains on investment transactions:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)

			(-	)			(-	)

Capital share transactions (Note 5)			16,790				5,857

Total increase			18,514				6,539
NET ASSETS
Beginning of period			14,401				7,862

End of period		$	32,915			$	14,401

Undistributed net investment loss		$	(52	)		$	(1	)

(1)See "Financial Highlights" on pages 37 - 40.

See Notes to Financial Statements.

Financial Highlights
      IVY CAPITAL APPRECIATION FUND⁽¹⁾
      Class A Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,												For the period from 6-30-00⁽²⁾ to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	7.99		$	7.52		$	5.73		$	6.43		$	7.19		$	10.00

Income (loss) from investment operations:
Net investment income (loss)		(0.01		)⁽³⁾	(0.02		)	(0.06		)	(0.03		)	(0.08		)		0.00
Net realized and unrealized gain (loss) on investments			0.60	⁽³⁾		0.49			1.85		(0.67		)	(0.68		)		(2.81	)

Total from investment operations			0.59			0.47			1.79		(0.70		)	(0.76		)		(2.81	)

Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.00	)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.00	)

Total distributions		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.00	)

Net asset value, end of period		$	8.58		$	7.99		$	7.52		$	5.73		$	6.43		$	7.19

Total return⁽⁴⁾			7.38	%		6.25	%	31.24		%	-10.89		%	-10.57		%	-28.10		%
Net assets, end of period (in millions)			$25			$11			$6			$4			$4			$4
Ratio of expenses to average net assets including voluntary expense waiver			1.22	%⁽⁵⁾		1.19	%		1.47	%		1.50	%		1.62	%		1.27	%⁽⁵⁾
Ratio of net investment income (loss) to average net assets including voluntary expense waiver		-0.22		%⁽⁵⁾		0.03	%	-1.05		%	-0.67		%	-0.92		%		-0.09	%⁽⁵⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			1.66	%⁽⁵⁾		1.84	%		2.12	%		2.15	%		2.17	%		1.80	%⁽⁵⁾
Ratio of net investment loss to average net assets excluding voluntary expense waiver		-0.66		%⁽⁵⁾	-0.62		%	-1.70		%	-1.32		%	-1.46		%	-0.62		%⁽⁵⁾
Portfolio turnover rate			24	%		62	%		115	%		145	%		96	%		73	%

(1)Capital Appreciation Fund (formerly Tax-Managed Equity Fund) changed its name effective March 31, 2005.
(2)Commencement of operations of the class.
(3)Based on average weekly shares outstanding.
(4)Total return calculated without taking into account the sales load deducted on an initial purchase.
(5)Annualized.

See Notes to Financial Statements.

Financial Highlights
      IVY CAPITAL APPRECIATION FUND⁽¹⁾
      Class B Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended					For the fiscal year ended March 31,												For the period from 7-13-00⁽²⁾to
	9-30-05					2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	7.62			$	7.26		$	5.58		$	6.31		$	7.12		$	10.06

Income (loss) from investment operations:
Net investment loss		(0.05		)⁽³⁾		(0.01		)	(0.09		)	(0.11		)	(0.13		)		(0.05	)
Net realized and unrealized gain (loss) on investments			0.58	⁽³⁾			0.37			1.77		(0.62		)	(0.68		)		(2.89	)

Total from investment operations			0.53				0.36			1.68		(0.73		)	(0.81		)		(2.94	)

Less distributions from:
Net investment income		(0.00		)		(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.00	)
Capital gains		(0.00		)		(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.00	)

Total distributions		(0.00		)		(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.00	)

Net asset value, end of period		$	8.15			$	7.62		$	7.26		$	5.58		$	6.31		$	7.12

Total return			6.96	%			4.96	%	30.11		%	-11.57		%	-11.38		%	-29.22		%
Net assets, end of period (in thousands)	$1,861				$1,068				$538			$247			$358				$296
Ratio of expenses to average net assets including voluntary expense waiver			2.16	%⁽⁴⁾			2.03	%		2.28	%		2.47	%		2.56	%		2.45	%⁽⁴⁾
Ratio of net investment loss to average net assets including voluntary expense waiver		-1.17		%⁽⁴⁾		-0.81		%	-1.87		%	-1.63		%	-1.86		%		-1.74	%⁽⁴⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			2.61	%⁽⁴⁾			2.68	%		2.93	%		3.12	%		3.42	%		3.48	%⁽⁴⁾
Ratio of net investment loss to average net assets excluding voluntary expense waiver		-1.62		%⁽⁴⁾		-1.46		%	-2.52		%	-2.28		%	-2.71		%		-2.77	%⁽⁴⁾
Portfolio turnover rate			24	%			62	%		115	%		145	%		96	%		73	%

See Notes to Financial Statements.

Financial Highlights
      IVY CAPITAL APPRECIATION FUND⁽¹⁾
      Class C Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended					For the fiscal year ended March 31,												For the period from 7-6-00⁽²⁾to
	9-30-05					2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	7.60			$	7.24		$	5.57		$	6.32		$	7.13		$	10.01

Income (loss) from investment operations:
Net investment income (loss)		(0.04		)⁽³⁾			0.03		(0.11		)	(0.12		)	(0.19		)		(0.06	)
Net realized and unrealized gain (loss) on investments			0.57	⁽³⁾			0.33			1.78		(0.63		)	(0.62		)		(2.82	)

Total from investment operations			0.53				0.36			1.67		(0.75		)	(0.81		)		(2.88	)

Less distributions from:
Net investment income		(0.00		)		(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.00	)
Capital gains		(0.00		)		(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.00	)

Total distributions		(0.00		)		(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.00	)

Net asset value, end of period		$	8.13			$	7.60		$	7.24		$	5.57		$	6.32		$	7.13

Total return			6.97	%			4.97	%	29.98		%	-11.87		%	-11.36		%	-28.77		%
Net assets, end of period (in thousands)	$6,079				$2,373			$1,374				$685			$865				$2
Ratio of expenses to average net assets including voluntary expense waiver			1.99	%⁽⁴⁾			2.15	%		2.46	%		2.64	%		2.76	%		2.35	%⁽⁴⁾
Ratio of net investment loss to average net assets including voluntary expense waiver		-1.00		%⁽⁴⁾		-0.96		%	-2.05		%	-1.81		%	-2.07		%		-1.52	%⁽⁴⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			2.43	%⁽⁴⁾			2.80	%		3.11	%		3.29	%		3.69	%		3.34	%⁽⁴⁾
Ratio of net investment loss to average net assets excluding voluntary expense waiver		-1.44		%⁽⁴⁾		-1.61		%	-2.70		%	-2.46		%	-2.99		%		-2.50	%⁽⁴⁾
Portfolio turnover rate			24	%			62	%		115	%		145	%		96	%		73	%

See Notes to Financial Statements.

Financial Highlights
      IVY CAPITAL APPRECIATION FUND⁽¹⁾
      Class Y Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the period from 9-15-04⁽²⁾to
	9-30-05				3-31-05

Net asset value, beginning of period		$	7.99		$	7.33

Income (loss) from investment operations:
Net investment income (loss)		(0.00		)⁽³⁾		0.03
Net realized and unrealized gain on investments			0.59	⁽³⁾		0.63

Total from investment operations			0.59			0.66

Less distributions from:
Net investment income		(0.00		)	(0.00		)
Capital gains		(0.00		)	(0.00		)

Total distributions		(0.00		)	(0.00		)

Net asset value, end of period		$	8.58		$	7.99

Total return			7.38	%		9.00	%
Net assets, end of period (in thousands)		$152			$108
Ratio of expenses to average net assets including voluntary expense waiver			1.09	%⁽⁴⁾		1.11	%⁽⁴⁾
Ratio of net investment income (loss) to average net assets including voluntary expense waiver		-0.11		%⁽⁴⁾		0.47	%⁽⁴⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			1.53	%⁽⁴⁾		1.76	%⁽⁴⁾
Ratio of net investment loss to average net assets excluding voluntary expense waiver		-0.55		%⁽⁴⁾	-0.18		%⁽⁴⁾
Portfolio turnover rate			24	%		62	%⁽⁵⁾

(1)Capital Appreciation Fund (formerly Tax-Managed Equity Fund) changed its name effective March 31, 2005.
(2)Commencement of operations of the class.
(3)Based on average weekly shares outstanding.
(4)Annualized.
(5)For the fiscal year ended March 31, 2005.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY CORE EQUITY FUND
Portfolio Highlights

On September 30, 2005, Ivy Core Equity Fund had net assets totaling $258,652,264 invested in a diversified portfolio of:

92.76%		Common Stocks
7.24%		Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Energy Stocks	$	18.89
Technology Stocks	$	18.10
Health Care Stocks	$	15.98
Financial Services Stocks	$	8.66
Cash and Cash Equivalents	$	7.24
Capital Goods Stocks	$	4.89
Multi Industry Stocks	$	4.71
Consumer Nondurables Stocks	$	4.66
Utilities Stocks	$	4.34
Consumer Services Stocks	$	4.13
Retail Stocks	$	3.82
Raw Materials Stocks	$	2.54
Miscellaneous Stocks	$	2.04


The Investments of Ivy Core Equity Fund
September 30, 2005
COMMON STOCKS	Shares		Value


Aircraft - 5.27%
Boeing Company (The)	95,100	$	6,462,045
Goodrich Corporation	12,300		545,382
Lockheed Martin Corporation	40,404		2,466,260
United Technologies Corporation	80,200		4,157,568
			13,631,255
Banks - 0.51%
Bank of America Corporation	2		84
U.S. Bancorp	46,955		1,318,496
			1,318,580
Beverages - 1.65%
PepsiCo, Inc.	75,366		4,274,006

Broadcasting - 0.49%
Comcast Corporation, Class A Special	44,400		1,279,830

Capital Equipment - 3.81%
Caterpillar Inc.	79,846		4,690,953
Deere & Company	44,711		2,736,313
Illinois Tool Works Inc.	29,466		2,425,936
			9,853,202
Chemicals - Specialty - 2.54%
Air Products and Chemicals, Inc.	118,959		6,559,399

Communications Equipment - 0.00%
Avaya Inc.*	1		10

Computers - Micro - 0.88%
Dell Inc.*	66,788		2,283,816

Computers - Peripherals - 4.16%
Computer Associates International, Inc.	6		167
Electronic Arts Inc.*	26,100		1,484,959
Microsoft Corporation	107,060		2,754,118
SAP Aktiengesellschaft, ADR	150,347		6,514,536
			10,753,780
Defense - 4.01%
General Dynamics Corporation	86,700		10,364,985

Electronic Components - 3.78%
Intel Corporation	150,416		3,707,002
Maxim Integrated Products, Inc.	66,100		2,818,835
Texas Instruments Incorporated	95,600		3,240,840
			9,766,677
Finance Companies - 2.15%
SLM Corporation	103,900		5,573,196

Food and Related - 2.16%
Campbell Soup Company	44,300		1,317,925
Kellogg Company	92,553		4,269,470
			5,587,395
Health Care - Drugs - 7.06%
Amgen Inc.*	47,588		3,790,384
Genentech, Inc.*	22,700		1,911,567
Gilead Sciences, Inc.*	80,300		3,911,413
Novartis AG, Registered Shares (A)	26,800		1,359,255
Pfizer Inc.	292,023		7,291,814
			18,264,433
Health Care - General - 3.32%
Boston Scientific Corporation*	90,200		2,107,974
Johnson & Johnson	60,500		3,828,440
Wyeth	57,397		2,655,759
			8,592,173
Hospital Supply and Management - 5.60%
Aetna Inc.	29,800		2,566,972
Caremark Rx, Inc.*	22,700		1,133,411
Guidant Corporation	31,900		2,197,591
Medtronic, Inc.	82,701		4,434,428
UnitedHealth Group Incorporated	35,200		1,978,240
WellPoint, Inc.*	28,800		2,183,616
			14,494,258
Hotels and Gaming - 1.77%
Marriott International, Inc., Class A	38,278		2,411,514
Starwood Hotels & Resorts Worldwide, Inc.	38,000		2,172,460
			4,583,974
Household - General Products - 0.85%
Colgate-Palmolive Company	41,668		2,199,654

Insurance - Property and Casualty - 2.38%
Berkshire Hathaway Inc., Class B*	2,250		6,144,750

Leisure Time Industry - 1.87%
Carnival Corporation	96,900		4,843,062

Multiple Industry - 4.71%
General Electric Company	278,857		9,389,115
Las Vegas Sands, Inc.*	85,000		2,797,350
			12,186,465
Non-Residential Construction - 1.08%
Fluor Corporation	43,300		2,787,654

Petroleum - Canada - 0.33%
Suncor Energy Inc.	14,000		847,420

Petroleum - International - 6.15%
Burlington Resources Inc.	85,936		6,988,316
Exxon Mobil Corporation	140,579		8,932,390
			15,920,706
Petroleum - Services - 12.41%
Baker Hughes Incorporated	185,631		11,078,458
Nabors Industries Ltd.*	61,331		4,405,406
Schlumberger Limited	86,588		7,306,295
Smith International, Inc.	42,000		1,399,020
Transocean Inc.*	39,300		2,409,483
Weatherford International Ltd.*	80,000		5,492,800
			32,091,462
Retail - Food Stores - 0.95%
Walgreen Co.	56,400		2,450,580

Retail - General Merchandise - 2.87%
Family Dollar Stores, Inc.	116,200		2,308,894
Kohl's Corporation*	78,000		3,914,040
Target Corporation	22,900		1,189,197
			7,412,131
Security and Commodity Brokers - 3.62%
Goldman Sachs Group, Inc. (The)	64,000		7,781,120
Lehman Brothers Holdings Inc.	13,600		1,584,128
			9,365,248
Timesharing and Software - 1.04%
Yahoo! Inc.*	79,600		2,695,654

Trucking and Shipping - 1.00%
United Parcel Service, Inc., Class B	37,266		2,576,199

Utilities - Electric - 1.19%
Dominion Resources, Inc.	35,672		3,072,786

Utilities - Telephone - 3.15%
SBC Communications Inc.	54,800		1,313,556
Sprint Nextel Corporation	63,200		1,502,896
Vodafone Group Plc, ADR	205,077		5,325,850
			8,142,302

TOTAL COMMON STOCKS - 92.76%		$	239,917,042

(Cost: $170,126,028)


SHORT-TERM SECURITIES	Principal Amount in Thousands			Value


Finance Companies - 1.93%
USAA Capital Corp.,
3.75%, 10- 4-05	$	5,000		4,998,437

Food and Related - 1.93%
Sara Lee Corporation,
3.82%, 10-18-05		5,000		4,990,981

Forest and Paper Products - 1.18%
Sonoco Products Co.,
3.94%, 10-3-05		3,047		3,046,333

Health Care - General - 1.55%
Baxter International Inc.,
3.87%, 10-3-05		4,000		3,999,140

Retail - General Merchandise - 0.96%
Target Corporation,
3.75%, 10-11-05		2,500		2,497,396

TOTAL SHORT-TERM SECURITIES - 7.55%			$	19,532,287

(Cost: $19,532,287)

TOTAL INVESTMENT SECURITIES - 100.31%			$	259,449,329

(Cost: $189,658,315)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.31%)				(797,065	)


NET ASSETS - 100.00%			$	258,652,264


Notes to Schedule of Investments
*No dividends were paid during the preceding 12 months.
(A)Listed on an exchange outside the United States.
See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY CORE EQUITY FUND
      September 30, 2005
      (In Thousands, Except for Per Share Amounts)


ASSETS
Investment securities - at value (cost - $189,658) (Notes 1 and 3)	$	259,449
Receivables:
Fund shares sold		278
Dividends and interest		215
Prepaid and other assets		31

Total assets		259,973

LIABILITIES
Payable for investment securities purchased		565
Payable to Fund shareholders		438
Due to custodian		110
Accrued shareholder servicing (Note 2)		108
Accrued accounting services fee (Note 2)		8
Accrued management fee (Note 2)		5
Accrued distribution fee (Note 2)		4
Accrued service fee (Note 2)		2
Other		81

Total liabilities		1,321

Total net assets	$	258,652

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	280
Additional paid-in capital		222,949
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(941	)
Accumulated undistributed net realized loss on investment transactions		(33,425	)
Net unrealized appreciation in value of investments		69,789

Net assets applicable to outstanding units of capital	$	258,652

Net asset value per share (net assets divided by shares outstanding):
Class A		$9.52
Class B		$9.05
Class C		$9.12
Class Y		$9.89
Capital shares outstanding:
Class A		7,294
Class B		1,252
Class C		19,334
Class Y		166
Capital shares authorized		450,000

See Notes to Financial Statements.

Statement of Operations
      IVY CORE EQUITY FUND
      For the Six Months Ended September 30, 2005
      (In Thousands)


INVESTMENT LOSS
Income (Note 1B):
Dividends (net of foreign withholding taxes of $8)	$	1,543
Interest and amortization		151

Total income		1,694

Expenses (Note 2):
Investment management fee		909
Distribution fee:
Class A		4
Class B		43
Class C		673
Shareholder servicing:
Class A		121
Class B		29
Class C		324
Class Y		1
Service fee:
Class A		80
Class B		14
Class C		224
Class Y		2
Accounting services fee		47
Audit fees		19
Custodian fees		9
Legal fees		2
Other		91

Total expenses		2,592

Net investment loss		(898	)

REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		7,448
Realized net gain on foreign currency transactions		6

Realized net gain on investments		7,454
Unrealized appreciation in value of investments during the period		6,340

Net gain on investments		13,794

Net increase in net assets resulting from operations	$	12,896

See Notes to Financial Statements.

Statement of Changes in Net Assets
      IVY CORE EQUITY FUND
      (In Thousands)


	For the six months ended September 30,				For the fiscal year ended March 31,
	2005				2005

DECREASE IN NET ASSETS
Operations:
Net investment loss		$	(898	)		$	(1,241	)
Realized net gain on investments			7,454				27,867
Unrealized appreciation			6,340				1,599

Net increase in net assets resulting from operations			12,896				28,225

Distributions to shareholders from (Note 1F): ⁽¹⁾
Net investment income:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)
Realized gains on investment transactions:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)

			(-	)			(-	)

Capital share transactions (Note 5)			(16,236	)			(55,488	)

Total decrease			(3,340	)			(27,263	)
NET ASSETS
Beginning of period			261,992				289,255

End of period		$	258,652			$	261,992

Undistributed net investment loss		$	(941	)		$	(49	)

(1)See "Financial Highlights" on pages 49 - 52.

See Notes to Financial Statements.

Financial Highlights
      IVY CORE EQUITY FUND⁽¹⁾
      Class A Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,												For the period from 7-3-00⁽²⁾ to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	9.03		$	8.08		$	6.63		$	8.89		$	9.51		$	13.89

Income (loss) from investment operations:
Net investment income (loss)		(0.01		)		0.02			0.01		(0.08		)	(0.20		)		0.00
Net realized and unrealized gain (loss) on investments			0.50			0.93			1.44		(2.18		)	(0.11		)		(2.00	)

Total from investment operations			0.49			0.95			1.45		(2.26		)	(0.31		)		(2.00	)

Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.00	)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.31		)		(2.38	)

Total distributions		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.31		)		(2.38	)

Net asset value, end of period		$	9.52		$	9.03		$	8.08		$	6.63		$	8.89		$	9.51

Total return⁽³⁾			5.43	%	11.76		%	21.87		%	-25.42		%	-3.18		%	-16.72		%
Net assets, end of period (in millions)			$70			$65			$75			$13			$9			$4
Ratio of expenses to average net assets			1.44	%⁽⁴⁾		1.50	%		1.46	%		1.31	%		1.26	%		1.18	%⁽⁴⁾
Ratio of net investment income (loss) to average net assets		-0.13		%⁽⁴⁾		0.07	%		0.24	%		0.28	%	-0.11		%		-0.11	%⁽⁴⁾
Portfolio turnover rate			20	%		42	%		59	%		39	%		22	%		39	%⁽⁵⁾

(1)Core Equity Fund (formerly Total Return Fund) changed its name effective October 2, 2000.
(2)Commencement of operations of the class.
(3)Total return calculated without taking into account the sales load deducted on an initial purchase.
(4)Annualized.
(5)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements.

Financial Highlights
      IVY CORE EQUITY FUND⁽¹⁾
      Class B Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,												For the period from 7-11-00⁽²⁾ to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	8.63		$	7.78		$	6.45		$	8.74		$	9.44		$	14.10

Income (loss) from investment operations:
Net investment loss		(0.05		)	(0.07		)	(0.05		)	(0.06		)	(0.14		)	(0.05		)
Net realized and unrealized gain (loss) on investments			0.47			0.92			1.38		(2.23		)	(0.25		)	(2.23		)

Total from investment operations			0.42			0.85			1.33		(2.29		)	(0.39		)	(2.28		)

Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.31		)	(2.38		)

Total distributions		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.31		)	(2.38		)

Net asset value, end of period		$	9.05		$	8.63		$	7.78		$	6.45		$	8.74		$	9.44

Total return			4.87	%	10.93		%	20.62		%	-26.20		%	-4.06		%	-18.50		%
Net assets, end of period (in millions)			$11			$12			$12			$5			$6			$5
Ratio of expenses to average net assets			2.34	%⁽³⁾		2.36	%		2.42	%		2.36	%		2.18	%		2.11	%⁽³⁾
Ratio of net investment loss to average net assets		-1.04		%⁽³⁾	-0.77		%	-0.66		%	-0.76		%	-1.04		%	-1.02		%⁽³⁾
Portfolio turnover rate			20	%		42	%		59	%		39	%		22	%		39	%⁽⁴⁾

(1)Core Equity Fund (formerly Total Return Fund) changed its name effective October 2, 2000.
(2)Commencement of operations of the class.
(3)Annualized.
(4)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements.

Financial Highlights
      IVY CORE EQUITY FUND⁽¹⁾
      Class C Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,
	9-30-05				2005			2004			2003			2002			2001

Net asset value, beginning of period		$	8.68		$	7.82		$	6.48		$	8.76		$	9.45		$	13.76

Income (loss) from investment operations:
Net investment loss		(0.05		)	(0.06		)	(0.04		)	(0.04		)	(0.08		)	(0.11		)
Net realized and unrealized gain (loss) on investments			0.49			0.92			1.38		(2.24		)	(0.30		)	(1.82		)

Total from investment operations			0.44			0.86			1.34		(2.28		)	(0.38		)	(1.93		)

Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.31		)	(2.38		)

Total distributions		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.31		)	(2.38		)

Net asset value, end of period		$	9.12		$	8.68		$	7.82		$	6.48		$	8.76		$	9.45

Total return			5.07	%	11.00		%	20.68		%	-26.03		%	-3.94		%	-16.40		%
Net assets, end of period (in millions)		$176			$183			$200			$200			$356				$440
Ratio of expenses to average net assets			2.19	%⁽²⁾		2.22	%		2.27	%		2.18	%		2.05	%		1.97	%
Ratio of net investment loss to average net assets		-0.89		%⁽²⁾	-0.63		%	-0.45		%	-0.58		%	-0.91		%	-0.93		%
Portfolio turnover rate			20	%		42	%		59	%		39	%		22	%		39	%

(1)Core Equity Fund (formerly Total Return Fund) changed its name effective October 2, 2000.
(2)Annualized.

See Notes to Financial Statements.

Financial Highlights
      IVY CORE EQUITY FUND⁽¹⁾
      Class Y Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,
	9-30-05				2005			2004			2003			2002			2001

Net asset value, beginning of period		$	9.38		$	8.37		$	6.86		$	9.19		$	9.82		$	14.08

Income (loss) from investment operations:
Net investment income (loss)			0.02			0.25			0.05			0.04		(0.11		)		(0.04	)
Net realized and unrealized gain (loss) on investments			0.49			0.76			1.46		(2.37		)	(0.21		)		(1.84	)

Total from investment operations			0.51			1.01			1.51		(2.33		)	(0.32		)		(1.88	)

Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.31		)	(2.38		)

Total distributions		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.31		)	(2.38		)

Net asset value, end of period		$	9.89		$	9.38		$	8.37		$	6.86		$	9.19		$	9.82

Total return			5.44	%	12.07		%	22.01		%	-25.35		%	-3.18		%	-15.62		%
Net assets, end of period (in millions)			$2			$2			$2			$2			$4			$2
Ratio of expenses to average net assets			1.22	%⁽²⁾		1.24	%		1.26	%		1.20	%		1.17	%		1.15	%
Ratio of net investment income (loss) to average net assets			0.09	%⁽²⁾		0.34	%		0.61	%		0.40	%	-0.03		%		-0.11	%
Portfolio turnover rate			20	%		42	%		59	%		39	%		22	%		39	%

(1)Core Equity Fund (formerly Total Return Fund) changed its name effective October 2, 2000.
(2)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY HIGH INCOME FUND
Portfolio Highlights

On September 30, 2005, Ivy High Income Fund had net assets totaling $68,312,023 invested in a diversified portfolio of:

90.40%		Corporate Debt Securities
7.97%		Cash and Cash Equivalents
1.63%		Common and Preferred Stocks and Right

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Consumer Services Bonds	$	10.45
Utilities Bonds	$	10.20
Energy Bonds	$	9.28
Capital Goods Bonds	$	9.24
Consumer Nondurables Bonds	$	8.95
Cash and Cash Equivalents	$	7.97
Health Care Bonds	$	7.86
Retail Bonds	$	5.86
Business Equipment and Services Bonds	$	4.99
Shelter Bonds	$	4.84
Technology Bonds	$	4.77
Raw Materials Bonds	$	4.06
Financial Services Bonds	$	3.88
Miscellaneous Bonds	$	3.18
Consumer Durables Bonds	$	2.84
Common and Preferred Stocks and Right	$	1.63

On September 30, 2005, the breakdown of bonds (by ratings) held by the Fund was as follows:

A	1.65	%
BBB	2.56	%
BB	10.08	%
B	58.58	%
CCC	16.99	%
Non-rated	0.54	%
Cash and Cash Equivalents and Equities	9.60	%


The Investments of Ivy High Income Fund
September 30, 2005
COMMON STOCKS AND RIGHT	Shares			Value


Capital Equipment - 0.14%
Dresser-Rand Group Inc.*		4,000	$	98,520

Finance Companies - 0.01%
ONO Finance Plc, Rights (A)*		250		5,000

Mining - 0.44%
Phelps Dodge Corporation		2,300		298,839

Petroleum - International - 0.58%
Forest Oil Corporation*		7,600		395,960

Utilities - Gas and Pipeline - 0.35%
Williams Companies, Inc. (The)		9,600		240,480

TOTAL COMMON STOCKS AND RIGHT - 1.52%			$	1,038,799

(Cost: $744,610)


PREFERRED STOCKS


Apparel - 0.11%
Anvil Holdings, Inc., 13.0%*	14,774			77,564

Broadcasting - 0.00%
Adelphia Communications Corporation, 13.0%*		2,500		1,125

TOTAL PREFERRED STOCKS -0.11%			$	78,689

(Cost: $520,004)


CORPORATE DEBT SECURITIES	Principal Amount in Thousands


Aircraft - 2.09%
Argo-Tech Corporation,
9.25%, 6-1-11	$	75		79,500
BE Aerospace, Inc.,
8.5%, 10-1-10		200		218,000
Bombardier Recreational Products Inc.,
8.375%, 12-15-13		75		78,563
Esterline Technologies Corporation,
7.75%, 6-15-13		250		263,750
L-3 Communications Corporation,
6.125%, 1-15-14		250		247,500
Orbital Sciences Corporation,
9.0%, 7-15-11		500		542,500
				1,429,813
Aluminum - 0.38%
Century Aluminum Company,
7.5%, 8-15-14		250		257,500

Apparel - 1.27%
Perry Ellis International, Inc.,
8.875%, 9-15-13		750		768,750
Quiksilver, Inc.,
6.875%, 4-15-15 (A)		100		96,000
				864,750
Beverages - 0.39%
Constellation Brands, Inc.,
8.125%, 1-15-12		250		264,062

Broadcasting - 2.19%
CCH II and CCH II Capital,
10.25%, 9-15-10		320		328,000
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp.,
8.0%, 4-30-12 (A)		300		302,250
Gray Communications Systems, Inc.,
9.25%, 12-15-11		375		405,937
LIN Television Corporation,
6.5%, 5-15-13 (A)		75		71,063
NTL Cable PLC,
8.75%, 4-15-14		125		129,063
Susquehanna Media Co.,
7.375%, 4-15-13		250		260,938
				1,497,251
Business Equipment and Services - 4.99%
Ahern Rentals, Inc.,
9.25%, 8-15-13 (A)		125		127,812
Alderwoods Group, Inc.,
7.75%, 9-15-12		625		656,250
Cardtronics, Inc.,
9.25%, 8-15-13 (A)		50		51,125
Carriage Services, Inc.,
7.875%, 1-15-15		250		258,750
Iron Mountain Incorporated,
8.625%, 4-1-13		300		314,250
Mac-Gray Corporation,
7.625%, 8-15-15 (A)		50		51,000
MagnaChip Semiconductor S.A. and MagnaChip Semiconductor Finance Company:
7.12%, 12-15-11		550		544,500
8.0%, 12-15-14		50		46,000
Owens & Minor, Inc.,
8.5%, 7-15-11		250		265,625
Service Corporation International,
7.0%, 6-15-17 (A)		100		101,000
Syniverse Technologies, Inc.,
7.75%, 8-15-13 (A)		50		50,375
UCAR Finance Inc.,
10.25%, 2-15-12		275		294,938
Vertis, Inc.:
9.75%, 4-1-09		25		25,813
10.875%, 6-15-09		500		491,250
13.5%, 12-7-09 (A)		150		127,500
				3,406,188
Capital Equipment - 2.47%
Case New Holland Inc.,
9.25%, 8-1-11		400		423,000
Columbus McKinnon Corporation,
8.875%, 11-1-13 (A)		50		50,500
Dresser-Rand Group Inc.,
7.375%, 11-1-14 (A)		220		228,250
IMCO Recycling Inc.,
10.375%, 10-15-10		75		82,687
Mueller Group, Inc.:
8.44313%, 11-1-11		100		102,000
10.0%, 5-1-12		275		291,500
Simmons Company,
0.0%, 12-15-14 (A)(B)		500		265,000
Standard Aero Holdings, Inc.,
8.25%, 9-1-14		250		241,875
				1,684,812
Chemicals - Petroleum and Inorganic - 1.37%
Methanex Corporation,
6.0%, 8-15-15	150			146,417
Resolution Performance Products LLC and RPP Capital Corporation:
9.5%, 4-15-10		250		258,125
13.5%, 11-15-10		300		318,750
UAP Holding Corp.,
0.0%, 7-15-12 (B)		250		212,500
				935,792
Chemicals - Specialty - 2.31%
Compass Minerals International, Inc.:
0.0%, 12-15-12 (B)		250		220,000
0.0%, 6-1-13 (B)	1,000			835,000
Ethyl Corporation,
8.875%, 5-1-10		475		498,156
PQ Corporation,
7.5%, 2-15-13 (A)		25		24,250
				1,577,406
Coal - 2.25%
Foundation PA Coal Company,
7.25%, 8-1-14		710		740,175
James River Coal Company,
9.375%, 6-1-12		500		532,500
Southern Star Central Corp.,
8.5%, 8-1-10		250		268,125
				1,540,800
Communications Equipment - 0.76%
AirGate PCS, Inc.,
7.349%, 10-15-11		250		257,500
General Cable Corporation,
9.5%, 11-15-10		250		263,125
				520,625
Computers - Main and Mini - 0.22%
Unisys Corporation,
8.0%, 10-15-12		150		147,375

Computers - Peripherals - 1.16%
ASG Consolidated LLC and ASG Finance, Inc.,
0.0%, 11-1-11 (B)		625		478,125
Activant Solutions Inc.:
9.504%, 4-1-10 (A)		50		51,000
10.5%, 6-15-11		250		261,250
				790,375
Construction Materials - 6.29%
AMH Holdings, Inc.,
0.0%, 3-1-14 (B)		475		237,500
Associated Materials Incorporated,
9.750%, 4-15-12		505		488,587
Brand Services, Inc.,
12.0%, 10-15-12		100		106,000
Builders FirstSource, Inc.,
8.04%, 2-15-12 (A)		400		404,000
Interface, Inc.:
7.3%, 4-1-08		250		250,000
10.375%, 2-1-10		250		270,000
9.5%, 2-1-14		250		250,000
Jacuzzi Brands, Inc.,
9.625%, 7-1-10		500		530,000
MAAX Corporation,
9.75%, 6-15-12		500		435,000
Norcraft Holdings, L.P. and Norcraft Capital Corp.,
9.0%, 11-1-11		500		517,500
Nortek, Inc.,
8.5%, 9-1-14		350		322,000
Ply Gem Industries, Inc.,
9.0%, 2-15-12		400		336,000
Texas Industries, Inc.,
7.25%, 7-15-13 (A)		25		26,000
WII Components, Inc.,
10.0%, 2-15-12		125		123,125
				4,295,712
Containers - 2.90%
Alltrista Corporation,
9.75%, 5-1-12		250		266,250
Constar International Inc.,
7.165%, 2-15-12 (A)		100		92,750
Crown European Holdings,
9.5%, 3-1-11		500		547,500
Graham Packaging Company, L.P. and GPC Capital Corp. I:
8.5%, 10-15-12		50		49,750
9.875%, 10-15-14		100		96,000
MDP Acquisitions plc,
9.625%, 10-1-12		280		281,400
Owens-Brockway Glass Container Inc.,
8.75%, 11-15-12		520		561,600
Stone Container Finance Company of Canada II,
7.375%, 7-15-14		100		89,000
				1,984,250
Cosmetics and Toiletries - 0.37%
Chattem, Inc.,
7.0%, 3-1-14		250		253,750

Defense - 0.54%
Armor Holdings, Inc.,
8.25%, 8-15-13		250		269,375
DRS Technologies, Inc.,
6.875%, 11-1-13		100		96,500
				365,875
Electrical Equipment - 0.48%
Coleman Cable Inc.,
9.875%, 10-1-12		250		220,312
Rexnord Corporation,
10.125%, 12-15-12		100		109,500
				329,812
Finance Companies - 2.86%
Dollar Financial Group, Inc.:
9.75%, 11-15-11		250		260,000
9.75%, 11-15-11 (A)		100		104,000
Goodman Global Holdings, Inc.,
7.875%, 12-15-12 (A)		300		271,500
Hanover Equipment Trust 2001B,
8.75%, 9-1-11		150		159,375
MSW Energy Holdings LLC and MSW Energy Finance Co., Inc.,
8.5%, 9-1-10		100		107,250
Norcraft Companies, L.P. and Norcraft Finance Corp.,
0.0%, 9-1-12 (B)		500		350,000
PIH Acquisition Co.,
10.75%, 10-1-13 (A)		175		172,813
Vanguard Health Holding Company II, LLC and Vanguard Holding Company II, Inc.,
9.0%, 10-1-14		500		532,500
				1,957,438
Food and Related - 3.65%
American Seafoods Group LLC and American Seafoods, Inc.,
10.125%, 4-15-10		425		454,750
Doane Pet Care Company,
10.75%, 3-1-10		500		545,000
Merisant Company,
10.75%, 7-15-13 (A)		150		102,000
Pierre Merger Corp.,
9.875%, 7-15-12		500		515,000
Pilgrim's Pride Corporation,
9.25%, 11-15-13		150		165,000
Pinnacle Foods Holding Corporation,
8.25%, 12-1-13		750		708,750
				2,490,500
Forest and Paper Products - 2.98%
Buckeye Cellulose Corporation,
9.25%, 9-15-08		94		94,000
Buckeye Technologies Inc.:
8.0%, 10-15-10		500		475,000
8.5%, 10-1-13		250		253,750
Cellu Tissue Holdings, Inc.,
9.75%, 3-15-10		500		501,250
Georgia-Pacific Corporation:
7.375%, 7-15-08		200		209,500
8.875%, 2-1-10		200		223,000
9.375%, 2-1-13		100		111,500
8.0%, 1-15-24		150		165,375
				2,033,375
Health Care - Drugs - 0.25%
AmerisourceBergen Corporation,
5.875%, 9-15-15 (A)		175		172,812

Health Care - General - 2.38%
Encore Medical IHC, Inc.,
9.75%, 10-1-12		750		746,250
Eye Care Centers of America, Inc.,
10.75%, 2-15-15 (A)		400		376,000
MQ Associates, Inc.,
0.0%, 8-15-12 (B)		625		396,875
Medical Device Manufacturing, Inc.,
10.0%, 7-15-12		100		108,500
				1,627,625
Homebuilders, Mobile Homes - 1.10%
Meritage Corporation,
7.0%, 5-1-14		200		192,500
Standard Pacific Corp.:
6.5%, 8-15-10		150		145,125
7.0%, 8-15-15		50		47,750
Technical Olympic USA, Inc.:
7.5%, 3-15-11		150		140,625
7.5%, 1-15-15		250		226,250
				752,250
Hospital Supply and Management - 5.23%
EGL Acquisition Corp.,
7.625%, 2-1-15		200		191,500
Psychiatric Solutions, Inc.:
10.625%, 6-15-13		516		588,240
7.75%, 7-15-15 (A)		525		542,063
Rural/Metro Corporation,
0.0%, 3-15-16 (A)(B)		500		310,000
Rural/Metro Operating Company, LLC and Rural/Metro (Delaware) Inc.,
9.875%, 3-15-15 (A)		300		319,500
Triad Hospitals, Inc.,
7.0%, 11-15-13		250		253,125
US Oncology Holdings, Inc.,
9.26375%, 3-15-15 (A)		700		689,500
US Oncology, Inc.,
9.0%, 8-15-12		500		540,000
United Surgical Partners Holdings, Inc.,
10.0%, 12-15-11		125		136,250
				3,570,178
Hotels and Gaming - 3.68%
Inn of the Mountain Gods Resort and Casino,
12.0%, 11-15-10	750			847,500
MGM MIRAGE:
8.5%, 9-15-10		250		271,875
8.375%, 2-1-11		500		537,500
Pinnacle Entertainment, Inc.,
8.25%, 3-15-12		500		500,000
Station Casinos, Inc.,
6.875%, 3-1-16		250		253,438
Turning Stone Casino Resort Enterprise,
9.125%, 12-15-10 (A)		100		104,000
				2,514,313
Household - General Products - 0.37%
Sealy Mattress Company,
8.25%, 6-15-14		250		251,250

Leisure Time Industry - 0.40%
Royal Caribbean Cruises Ltd.,
8.0%, 5-15-10		250		270,625

Motion Pictures - 3.70%
AMC Entertainment Inc.,
8.0%, 3-1-14		300		264,000
Carmike Cinemas, Inc.,
7.5%, 2-15-14		500		433,750
Cinemark, Inc.,
0.0%, 3-15-14 (B)		900		630,000
Cinemark USA, Inc.,
9.0%, 2-1-13		100		103,250
LCE Acquisition Corporation,
9.0%, 8-1-14	1,125			1,094,062
				2,525,062
Motor Vehicle Parts - 0.65%
Tenneco Automotive Inc.,
10.25%, 7-15-13		400		447,000

Motor Vehicles - 2.19%
AutoNation, Inc.,
9.0%, 8-1-08		250		270,000
Group 1 Automotive, Inc.,
8.25%, 8-15-13		125		122,500
Sonic Automotive, Inc.,
8.625%, 8-15-13		750		742,500
United Auto Group, Inc.,
9.625%, 3-15-12		350		364,000
				1,499,000
Multiple Industry - 2.01%
AMR HoldCo, Inc. and EmCare HoldCo, Inc.,
10.0%, 2-15-15 (A)		50		54,000
CBD Media Holdings LLC and CBD Holdings Finance, Inc.,
9.25%, 7-15-12		200		203,500
CBD Media LLC and CBD Finance, Inc.,
8.625%, 6-1-11		300		309,750
Commercial Vehicle Group, Inc.,
8.0%, 7-1-13 (A)		50		50,250
IWO Escrow Company:
7.349%, 1-15-12		50		52,000
0.0%, 1-15-15 (B)		250		175,625
K&F Acquisition, Inc.,
7.75%, 11-15-14		100		101,000
Stanley-Martin Communities, LLC and Stanley-Martin Financing Corp.,
9.75%, 8-15-15 (A)		300		293,250
Tyco International Group S.A., Convertible,
3.125%, 1-15-23 (A)		100		132,375
				1,371,750
Petroleum - Domestic - 3.22%
Clayton Williams Energy, Inc.,
7.75%, 8-1-13 (A)		125		122,188
Coastal Corporation (The),
9.625%, 5-15-12		665		734,825
Delta Petroleum Corporation,
7.0%, 4-1-15		50		47,750
EXCO Resources, Inc.,
7.25%, 1-15-11		350		362,250
Frontier Oil Corporation,
6.625%, 10-1-11		300		309,375
KCS Energy, Inc.,
7.125%, 4-1-12		100		102,500
Stone Energy Corporation,
6.75%, 12-15-14		125		122,813
Swift Energy Company,
9.375%, 5-1-12		250		270,000
Whiting Petroleum Corporation,
7.25%, 5-1-12		125		127,188
				2,198,889
Petroleum - International - 1.15%
Forest Oil Corporation,
8.0%, 6-15-08		250		265,312
Inergy, L.P. and Inergy Finance Corp.,
6.875%, 12-15-14 (A)		400		382,000
Newfield Exploration Company,
7.625%, 3-1-11		125		135,313
				782,625
Petroleum - Services - 2.66%
Grant Prideco, Inc.,
6.125%, 8-15-15 (A)		50		50,500
Hanover Compressor Company:
0.0%, 3-31-07		375		337,500
8.625%, 12-15-10		650		700,375
9.0%, 6-1-14		100		111,125
Pemex Project Funding Master Trust,
7.375%, 12-15-14		300		333,000
R&B Falcon Corporation,
9.5%, 12-15-08		250		284,047
				1,816,547
Publishing - 0.48%
Dex Media West LLC and Dex Media West Finance Co.:
8.5%, 8-15-10		100		105,750
9.875%, 8-15-13		200		220,750
				326,500
Railroad - 1.17%
Kansas City Southern Railway Company (The),
7.5%, 6-15-09		375		392,813
TFM, S.A. de C.V.,
9.375%, 5-1-12 (A)		375		405,000
				797,813
Real Estate Investment Trust - 0.76%
Host Marriott, L.P.:
9.25%, 10-1-07	250			263,437
7.125%, 11-1-13		250		255,313
				518,750
Restaurants - 0.07%
Carrols Corporation,
9.0%, 1-15-13 (A)		50		50,750

Retail - Food Stores - 1.82%
Couche-Tard U.S. L.P. and Couche-Tard Financing Corp.,
7.5%, 12-15-13		150		154,500
Domino's Inc.,
8.25%, 7-1-11		110		115,500
Roundy's, Inc.,
8.875%, 6-15-12		300		331,500
Stater Bros. Holdings Inc.:
7.37%, 6-15-10		150		147,750
8.125%, 6-15-12		500		493,750
				1,243,000
Retail - Specialty Stores - 3.97%
CSK Auto, Inc.,
7.0%, 1-15-14		500		467,500
FTD, Inc.,
7.75%, 2-15-14		291		291,727
Jean Coutu Group (PJC) Inc. (The),
8.5%, 8-1-14		500		497,500
Jo-Ann Stores, Inc.,
7.5%, 3-1-12		500		471,250
Nebraska Book Company, Inc.,
8.625%, 3-15-12	1,050			987,000
				2,714,977
Security and Commodity Brokers - 1.02%
Global Cash Access, L.L.C. and Global Cash Access Finance Corporation,
8.75%, 3-15-12		650		698,750

Utilities - Electric - 0.80%
DPL Inc.,
8.25%, 3-1-07		185		194,250
Sierra Pacific Resources,
6.75%, 8-15-17 (A)		150		150,375
Tenaska Alabama Partners, L.P.,
7.0%, 6-30-21 (A)		150		151,877
Texas Genco LLC and Texas Genco Financing Corp.,
6.875%, 12-15-14 (A)		50		50,875
				547,377
Utilities - Gas and Pipeline - 1.89%
ANR Pipeline Company,
8.875%, 3-15-10		100		108,091
Northwest Pipeline Corporation,
8.125%, 3-1-10		450		480,375
Williams Companies, Inc. (The):
8.125%, 3-15-12		250		273,125
7.75%, 6-15-31		400		433,000
				1,294,591
Utilities - Telephone - 7.51%
Alamosa (Delaware), Inc.:
12.0%, 7-31-09		500		553,750
8.5%, 1-31-12		175		186,812
American Tower Corporation,
7.5%, 5-1-12		250		265,000
American Towers, Inc.,
7.25%, 12-1-11		250		265,625
Centennial Cellular Corp. and Centennial Cellular Operating Co. LLC,
10.75%, 12-15-08		121		124,327
Centennial Communications Corp., Centennial Cellular Operating Co. LLC and Centennial Puerto Rico Operations Corp.,
8.125%, 2-1-14		100		105,750
LCI International, Inc.,
7.25%, 6-15-07		250		243,750
MCI, Inc.,
6.908%, 5-1-07		503		506,772
Nextel Communications, Inc.:
5.95%, 3-15-14		300		307,100
7.375%, 8-1-15		500		535,283
Nextel Partners, Inc.,
8.125%, 7-1-11		400		432,000
Qwest Capital Funding, Inc.,
7.75%, 8-15-06		250		252,500
SBA Communications Corporation,
8.5%, 12-1-12	350			380,625
US Unwired Inc.,
10.0%, 6-15-12		750		862,500
Ubiquitel Operating Company,
9.875%, 3-1-11		100		111,000
				5,132,794

TOTAL CORPORATE DEBT SECURITIES - 90.40%			$	61,752,689

(Cost: $60,938,711)


SHORT-TERM SECURITIES


Food and Related - 2.19%
Heinz (H.J.) Finance Co. (Heinz (H.J.) Co.),
3.9%, 10-19-05	1,500			1,497,075

Retail - Food Stores - 3.62%
Kroger Co. (The),
3.98%, 10-3-05	2,469			2,468,454

TOTAL SHORT-TERM SECURITIES - 5.81%			$	3,965,529

(Cost: $3,965,529)

TOTAL INVESTMENT SECURITIES - 97.84%			$	66,835,706

(Cost: $66,168,854)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 2.16%				1,476,317


NET ASSETS - 100.00%			$	68,312,023


Notes to Schedule of Investments
*No dividends were paid during the preceding 12 months.
(A)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2005, the total value of these securities amounted to $7,182,503 or 10.51% of net assets.
(B)The security does not bear interest for an initial period of time and subsequently becomes interest bearing.
See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY HIGH INCOME FUND
      September 30, 2005
      (In Thousands, Except for Per Share Amounts)


ASSETS
Investment securities - at value (cost - $66,169) (Notes 1 and 3)	$	66,836
Receivables:
Dividends and interest		1,152
Fund shares sold		470
Investment securities sold		219
Prepaid and other assets		32

Total assets		68,709

LIABILITIES
Payable for investment securities purchased		137
Payable to Fund shareholders		127
Due to custodian		48
Dividends payable		37
Accrued shareholder servicing (Note 2)		24
Accrued accounting services fee (Note 2)		4
Accrued distribution and service fees (Note 2)		1
Accrued management fee (Note 2)		1
Other		18

Total liabilities		397

Total net assets	$	68,312

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	79
Additional paid-in capital		71,660
Accumulated undistributed income (loss):
Accumulated undistributed net realized loss on investment transactions		(4,094	)
Net unrealized appreciation in value of investments		667

Net assets applicable to outstanding units of capital	$	68,312

Net asset value per share (net assets divided by shares outstanding):
Class A	$8.61
Class B	$8.61
Class C	$8.61
Class Y	$8.61
Capital shares outstanding:
Class A		3,983
Class B		657
Class C		2,190
Class Y		1,101
Capital shares authorized	200,000

See Notes to Financial Statements.

Statement of Operations
      IVY HIGH INCOME FUND
      For the Six Months Ended September 30, 2005
      (In Thousands)


INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	2,735
Dividends		3

Total income		2,738

Expenses (Note 2):
Investment management fee		211
Shareholder servicing:
Class A		53
Class B		13
Class C		34
Class Y		7
Distribution fee:
Class A		5
Class B		20
Class C		76
Service fee:
Class A		36
Class B		7
Class C		25
Class Y		12
Accounting services fee		23
Audit fees		10
Custodian fees		5
Other		45

Total expenses		582

Net investment income		2,156

REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on investments		(64	)
Unrealized depreciation in value of investments during the period		(523	)

Net loss on investments		(587	)

Net increase in net assets resulting from operations	$	1,569

See Notes to Financial Statements.

Statement of Changes in Net Assets
      IVY HIGH INCOME FUND
      (In Thousands)


	For the six months ended September 30,				For the fiscal year ended March 31,
	2005				2005

INCREASE IN NET ASSETS
Operations:
Net investment income		$	2,156		$	3,697
Realized net gain (loss) on investments			(64	)		576
Unrealized depreciation			(523	)		(1,808	)

Net increase in net assets resulting from operations			1,569			2,465

Distributions to shareholders from (Note 1F): ⁽¹⁾
Net investment income:
Class A			(1,085	)		(1,535	)
Class B			(155	)		(243	)
Class C			(597	)		(1,278	)
Class Y			(319	)		(649	)
Realized gains on investment transactions:
Class A			(-	)		(-	)
Class B			(-	)		(-	)
Class C			(-	)		(-	)
Class Y			(-	)		(-	)

			(2,156	)		(3,705	)

Capital share transactions (Note 5)			814			15,117

Total increase			227			13,877
NET ASSETS
Beginning of period			68,085			54,208

End of period		$	68,312		$	68,085

Undistributed net investment income		$	-		$	-

(1)See "Financial Highlights" on pages 71 - 74.

See Notes to Financial Statements.

Financial Highlights
      IVY HIGH INCOME FUND
      Class A Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended					For the fiscal year ended March 31,											For the period from 7-3-00 ⁽¹⁾ to
	9-30-05					2005			2004			2003			2002		3-31-01

Net asset value, beginning of period		$	8.69			$	8.85		$	8.07		$	8.48		$	8.54		$	9.04

Income (loss) from investment operations:
Net investment income			0.29				0.57			0.56			0.64			0.74			0.58
Net realized and unrealized gain (loss) on investments		(0.08		)		(0.16		)		0.78		(0.41		)	(0.06		)	(0.50		)

Total from investment operations			0.21				0.41			1.34			0.23			0.68			0.08

Less distributions from:
Net investment income		(0.29		)		(0.57		)	(0.56		)	(0.64		)	(0.74		)	(0.58		)
Capital gains		(0.00		)		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)

Total distributions		(0.29		)		(0.57		)	(0.56		)	(0.64		)	(0.74		)	(0.58		)

Net asset value, end of period		$	8.61			$	8.69		$	8.85		$	8.07		$	8.48		$	8.54

Total return ⁽²⁾			2.45	%			4.69	%	17.24		%		3.02	%		8.46	%		0.90	%
Net assets, end of period (in thousands)	$34,308				$31,633			$18,036			$6,269			$1,895				$442
Ratio of expenses to average net assets including voluntary expense waiver			1.44	% ⁽³⁾			1.44	%		1.39	%		0.91	%		0.84	%		1.05	% ⁽³⁾
Ratio of net investment income to average net assets including voluntary expense waiver			6.65	% ⁽³⁾			6.43	%		6.62	%		7.83	%		9.00	%		9.01	% ⁽³⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			-	⁽⁴⁾			-	⁽⁴⁾		-	⁽⁴⁾		1.44	%		1.14	%		1.42	% ⁽³⁾
Ratio of net investment income to average net assets excluding voluntary expense waiver			-	⁽⁴⁾			-	⁽⁴⁾		-	⁽⁴⁾		7.30	%		8.70	%		8.64	% ⁽³⁾
Portfolio turnover rate			17	%			54	%		78	%		52	%		82	%		115	% ⁽⁵⁾

(1)Commencement of operations of the class.
(2)Total return calculated without taking into account the sales load deducted on an initial purchase.
(3)Annualized.
(4)Because the Fund's net assets exceeded $25 million, there was no waiver of expenses. Therefore, no ratio is provided.
(5)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements.

Financial Highlights
      IVY HIGH INCOME FUND
      Class B Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,												For the period from 7-18-00 ⁽¹⁾ to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	8.69		$	8.85		$	8.07		$	8.48		$	8.54		$	9.03

Income (loss) from investment operations:
Net investment income			0.25			0.49			0.50			0.56			0.68			0.48
Net realized and unrealized gain (loss) on investments		(0.08		)	(0.16		)		0.78		(0.41		)	(0.06		)	(0.49		)

Total from investment operations			0.17			0.33			1.28			0.15			0.62		(0.01		)

Less distributions from:
Net investment income		(0.25		)	(0.49		)	(0.50		)	(0.56		)	(0.68		)	(0.48		)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)

Total distributions		(0.25		)	(0.49		)	(0.50		)	(0.56		)	(0.68		)	(0.48		)

Net asset value, end of period		$	8.61		$	8.69		$	8.85		$	8.07		$	8.48		$	8.54

Total return			1.99	%		3.80	%	16.22		%		2.06	%		7.64	%		0.09	%
Net assets, end of period (in millions)			$6			$5			$4			$2			$1			$1
Ratio of expenses to average net assets including voluntary expense waiver			2.34	% ⁽²⁾		2.31	%		2.28	%		1.84	%		1.74	%		1.85	% ⁽²⁾
Ratio of net investment income to average net assets including voluntary expense waiver			5.76	% ⁽²⁾		5.56	%		5.78	%		6.90	%		8.09	%		8.30	% ⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			-	⁽³⁾		-	⁽³⁾		-	⁽³⁾		2.37	%		2.36	%		2.50	% ⁽²⁾
Ratio of net investment income to average net assets excluding voluntary expense waiver			-	⁽³⁾		-	⁽³⁾		-	⁽³⁾		6.37	%		7.47	%		7.65	% ⁽²⁾
Portfolio turnover rate			17	%		54	%		78	%		52	%		82	%		115	% ⁽⁴⁾

(1)Commencement of operations of the class.
(2)Annualized.
(3)Because the Fund's net assets exceeded $25 million, there was no waiver of expenses. Therefore, no ratio is provided.
(4)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements.

Financial Highlights
      IVY HIGH INCOME FUND
      Class C Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,
	9-30-05				2005			2004			2003			2002			2001

Net asset value, beginning of period		$	8.69		$	8.85		$	8.07		$	8.48		$	8.54		$	9.27

Income (loss) from investment operations:
Net investment income			0.26			0.50			0.50			0.57			0.68			0.73
Net realized and unrealized gain (loss) on investments		(0.08		)	(0.16		)		0.78		(0.41		)	(0.06		)	(0.73		)

Total from investment operations			0.18			0.34			1.28			0.16			0.62			0.00

Less distributions from:
Net investment income		(0.26		)	(0.50		)	(0.50		)	(0.57		)	(0.68		)	(0.73		)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)

Total distributions		(0.26		)	(0.50		)	(0.50		)	(0.57		)	(0.68		)	(0.73		)

Net asset value, end of period		$	8.61		$	8.69		$	8.85		$	8.07		$	8.48		$	8.54

Total return			2.05	%		3.90	%	16.30		%		2.15	%		7.58	%		0.18	%
Net assets, end of period (in millions)			$19			$22			$23			$18			$17			$19
Ratio of expenses to average net assets including voluntary expense waiver			2.21	% ⁽¹⁾		2.20	%		2.21	%		1.74	%		1.82	%		1.78	%
Ratio of net investment income to average net assets including voluntary expense waiver			5.89	% ⁽¹⁾		5.67	%		5.89	%		7.05	%		8.01	%		8.38	%
Ratio of expenses to average net assets excluding voluntary expense waiver			-	⁽²⁾		-	⁽²⁾		-	⁽²⁾		2.27	%		2.46	%		2.41	%
Ratio of net investment income to average net assets excluding voluntary expense waiver			-	⁽²⁾		-	⁽²⁾		-	⁽²⁾		6.52	%		7.36	%		7.75	%
Portfolio turnover rate			17	%		54	%		78	%		52	%		82	%		115	%

(1)Annualized.
(2)Because the Fund's net assets exceeded $25 million, there was no waiver of expenses. Therefore, no ratio is provided.

See Notes to Financial Statements.

Financial Highlights
      IVY HIGH INCOME FUND
      Class Y Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended					For the fiscal year ended March 31,
	9-30-05					2005			2004			2003			2002			2001

Net asset value, beginning of period		$	8.69			$	8.85		$	8.07		$	8.48		$	8.54		$	9.27

Income (loss) from investment operations:
Net investment income			0.30				0.58			0.58			0.64			0.75			0.78
Net realized and unrealized gain (loss) on investments		(0.08		)		(0.16		)		0.78		(0.41		)	(0.06		)	(0.73		)

Total from investment operations			0.22				0.42			1.36			0.23			0.69			0.05

Less distributions from:
Net investment income		(0.30		)		(0.58		)	(0.58		)	(0.64		)	(0.75		)	(0.78		)
Capital gains		(0.00		)		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)

Total distributions		(0.30		)		(0.58		)	(0.58		)	(0.64		)	(0.75		)	(0.78		)

Net asset value, end of period		$	8.61			$	8.69		$	8.85		$	8.07		$	8.48		$	8.54

Total return			2.54	%			4.83	%	17.36		%		3.03	%		8.50	%		0.79	%
Net assets, end of period (in thousands)	$9,485				$9,268			$9,698			$3,643					$64			$12
Ratio of expenses to average net assets including voluntary expense waiver			1.26	% ⁽¹⁾			1.30	%		1.30	%		1.08	%		0.79	%		1.20	%
Ratio of net investment income to average net assets including voluntary expense waiver			6.83	% ⁽¹⁾			6.57	%		6.82	%		7.22	%		8.99	%		8.95	%
Ratio of expenses to average net assets excluding voluntary expense waiver			-	⁽²⁾			-	⁽²⁾		-	⁽²⁾		1.61	%		1.08	%		1.62	%
Ratio of net investment income to average net assets excluding voluntary expense waiver			-	⁽²⁾			-	⁽²⁾		-	⁽²⁾		6.69	%		8.71	%		8.52	%
Portfolio turnover rate			17	%			54	%		78	%		52	%		82	%		115	%

(1)Annualized.
(2)Because the Fund's net assets exceeded $25 million, there was no waiver of expenses. Therefore, no ratio is provided.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY INTERNATIONAL GROWTH FUND
Portfolio Highlights

On September 30, 2005, Ivy International Growth Fund had net assets totaling $69,604,430 invested in a diversified portfolio of:

98.29%		Common Stocks
1.71%		Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005, your Fund was invested by geographic region and by industry, respectively, as follows:

Europe	$	63.50
Pacific Basin	$	28.85
Canada	$	2.88
Cash and Cash Equivalents	$	1.71
United States	$	1.69
Mexico	$	1.08
South America	$	0.29

Financial Services Stocks	$	23.45
Energy Stocks	$	13.33
Technology Stocks	$	11.29
Capital Goods Stocks	$	11.20
Consumer Goods Stocks	$	9.35
Utilities Stocks	$	8.19
Health Care Stocks	$	6.18
Business Equipment and Services Stocks	$	4.68
Miscellaneous Stocks	$	3.98
Raw Materials Stocks	$	3.63
Retail Stocks	$	3.01
Cash and Cash Equivalents	$	1.71


The Investments of Ivy International Growth Fund
September 30, 2005
COMMON STOCKS	Shares		Value


Australia - 3.59%
Novogen LTD (A)*	474,580	$	1,748,048
Westpac Banking Corporation (A)	46,600		749,834
			2,497,882
Austria - 5.38%
Bank Austria Creditanstalt (A)	10,000		1,117,740
Erste Bank der oesterreichischen Sparkassen AG (A)	16,000		855,824
Raiffeisen International Bank-Holding AG (A)*	13,200		881,379
Raiffeisen International Bank-Holding AG (A)(B)*	13,300		888,056
			3,742,999
Belgium - 0.44%
KBC Group NV (A)	3,800		307,856

Brazil - 0.29%
Gol Linhas Aereas Inteligentes S.A., ADR	6,300		204,435

Canada - 2.88%
EnCana Corporation (A)	25,200		1,470,560
Shoppers Drug Mart Corporation (A)(B)	15,100		533,766
			2,004,326
Finland - 2.39%
Nokia OYJ (A)	28,500		477,543
Nokian Tyres plc (A)	50,000		1,184,571
			1,662,114
France - 7.06%
France Telecom (A)	24,000		688,890
Sanofi-Aventis (A)	9,800		809,848
Total S.A. (A)	7,720		2,107,361
VINCI (A)	15,200		1,309,074
			4,915,173
Germany - 7.82%
Allianz Aktiengesellschaft, Registered Shares (A)	7,500		1,013,286
BASF Aktiengesellschaft (A)	10,600		797,599
Bayerische Hypo- und Vereinsbank AG (A)*	39,500		1,111,009
Fresenius AG (A)	2,100		290,914
PUMA Aktiengesellschaft Rudolf Dassler Sport (A)	1,400		378,731
SAP Aktiengesellschaft (A)	3,900		675,043
Siemens AG (A)	15,300		1,179,757
			5,446,339
Ireland - 1.80%
Anglo Irish Bank Corporation plc (Ireland) (A)	40,000		544,746
CRH public limited company (A)	26,000		704,733
			1,249,479
Italy- 3.68%
Assicurazioni Generali SpA (A)	14,900		469,953
Eni S.p.A. (A)	51,500		1,529,623
Saipem S.p.A. (A)	33,300		561,573
			2,561,149
Japan - 24.04%
ACOM CO., LTD. (A)	9,500		689,600
Bank of Fukuoka, Ltd. (The) (A)	56,000		403,541
Canon Inc. (A)	16,730		903,448
DENSO CORPORATION (A)	19,000		550,676
Dentsu Inc. (A)*	191		541,796
FANUC LTD (A)	5,000		404,352
Hokuto Corporation (A)	20		348
Honda Motor Co., Ltd. (A)	8,800		497,696
Hoya Corporation (A)	22,800		757,222
Kabushiki Kaisha Mitsubishi Tokyo Financial Group (A)	115		1,509,492
Mitsubishi Corporation (A)	66,000		1,302,383
Mitsubishi Estate Co., Ltd. (A)	29,000		398,027
Mizuho Financial Group, Inc. (A)	160		1,017,663
Nomura Holdings, Inc. (A)	27,600		428,169
ORIX Corporation (A)	5,500		993,261
SMC Corporation (A)	6,700		891,838
Sega Sammy Holdings Inc. (A)	22,000		868,255
Shinsei Bank, Limited (A)(B)	57,000		359,027
Sumitomo Mitsui Financial Group, Inc. (A)	55		518,434
TDK Corporation (A)	9,500		677,047
Tokyo Electric Power Company, Incorporated (The) (A)	14,300		361,547
Toyota Motor Corporation (A)	28,100		1,287,231
TOYOTA TSUSHO CORPORATION (A)	28,000		509,360
Ushio Inc. (A)	14,400		292,402
YAMADA-DENKI Co., Ltd. (A)	7,500		570,189
			16,733,004
Luxembourg - 0.47%
SES GLOBAL S.A., Fiduciary Depository Receipts (A)(B)	21,000		329,408

Mexico - 1.08%
Cemex, S.A. de C.V., ADR	14,392		752,702

Netherlands - 3.89%
ASML Holding N.V. (A)*	19,000		311,967
Tom Tom N.V. (A)(B)*	53,000		2,392,160
			2,704,127
Norway - 2.22%
Statoil ASA (A)	21,700		538,301
Stolt Offshore S.A. (A)*	87,000		1,006,038
			1,544,339
Russia - 2.77%
OAO LUKOIL, ADR	18,000		1,038,600
Open Joint Stock Company ''Vimpel-Communications'', ADR*	20,000		888,800
			1,927,400
South Korea - 1.22%
Samsung Electronics Co., Ltd. (A)	1,500		846,124

Spain - 3.07%
Enagas, S.A. (A)	39,000		700,826
Fadesa Inmobiliaria, S.A. (A)	40,000		1,437,592
			2,138,418
Sweden - 1.23%
Telefonaktiebolaget LM Ericsson, B Shares (A)	235,000		857,996

Switzerland - 9.12%
Compagnie Financiere Richemont SA (A)	15,500		613,701
Credit Suisse Group, Registered Shares (A)	14,200		628,600
Holcim Ltd, Registered Shares (A)	10,300		683,935
Nestle S.A., Registered Shares (A)	4,400		1,288,319
Novartis AG, Registered Shares (A)	28,600		1,450,549
UBS AG (A)	16,000		1,359,703
Zurich Financial Services, Registered Shares (A)*	1,900		323,663
			6,348,470
Turkey - 0.41%
Turkiye Garanti Bankasi Anonim Sirketi (A)	96,250		287,356

United Kingdom - 11.75%
BHP Billiton Plc (A)	76,400		1,234,280
BP p.l.c. (A)	161,500		1,918,381
IG Group Holdings plc (A)(B)*	71,000		216,635
Reckitt Benckiser plc (A)	23,500		715,789
Royal Bank of Scotland Group plc (The) (A)	35,200		998,903
Smiths Group plc (A)	23,600		399,168
tesco plc (A)	182,000		993,475
Vodafone Group Plc (A)	653,000		1,698,752
			8,175,383
United States - 1.69%
Inco Limited	10,600		501,910
Schlumberger Limited	8,000		675,040
			1,176,950

TOTAL COMMON STOCKS - 98.29%		$	68,413,429

(Cost: $52,167,642)


SHORT-TERM SECURITY - 1.72%	Principal Amount in Thousands


Finance Companies
BP Capital Markets p.l.c.,
3.88%, 10-3-05	$	1,200	$	1,199,741
(Cost: $1,199,741)

TOTAL INVESTMENT SECURITIES - 100.01%			$	69,613,170

(Cost: $53,367,383)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.01%)				(8,740	)


NET ASSETS - 100.00%			$	69,604,430


Notes to Schedule of Investments
*No dividends were paid during the preceding 12 months.
(A)Listed on an exchange outside the United States.
(B)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers At September 30, 2005, the total value of these securities amounted to $4,719,052 or 6.78% of net assets.
See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY INTERNATIONAL GROWTH FUND
      September 30, 2005
      (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $53,367) (Notes 1 and 3)	$	69,613
Receivables:
Dividends and interest		206
Fund shares sold		28
Prepaid and other assets		24

Total assets		69,871

LIABILITIES
Payable to Fund shareholders		177
Accrued shareholder servicing (Note 2)		42
Due to custodian		9
Accrued accounting services fee (Note 2)		4
Accrued management fee (Note 2)		2
Accrued distribution and service fees (Note 2)		1
Other		32

Total liabilities		267

Total net assets	$	69,604

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	57
Additional paid-in capital		97,562
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(373	)
Accumulated undistributed net realized loss on investment transactions		(43,887	)
Net unrealized appreciation in value of investments		16,245

Net assets applicable to outstanding units of capital	$	69,604

Net asset value per share (net assets divided by shares outstanding):
Class A		$12.42
Class B		$11.88
Class C		$11.99
Class Y		$13.56
Capital shares outstanding:
Class A		1,237
Class B		354
Class C		3,738
Class Y		386
Capital shares authorized		400,000

See Notes to Financial Statements.

Statement of Operations
      IVY INTERNATIONAL GROWTH FUND
      For the Six Months Ended September 30, 2005
      (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $91)	$	832
Interest and amortization		23

Total income		855

Expenses (Note 2):
Investment management fee		282
Shareholder servicing:
Class A		34
Class B		15
Class C		135
Class Y		4
Distribution fee:
Class A		3
Class B		15
Class C		163
Service fee:
Class A		14
Class B		5
Class C		54
Class Y		6
Accounting services fee		23
Custodian fees		18
Audit fees		17
Other		40

Total expenses		828

Net investment income		27

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		2,645
Realized net loss on foreign currency transactions		(53	)

Realized net gain on investments		2,592
Unrealized appreciation in value of investments during the period		5,141

Net gain on investments		7,733

Net increase in net assets resulting from operations	$	7,760

See Notes to Financial Statements.

Statement of Changes in Net Assets
      IVY INTERNATIONAL GROWTH FUND
      (In Thousands)

	For the six months ended September 30,				For the fiscal year ended March 31,
	2005				2005

INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)		$	27		$	(792	)
Realized net gain on investments			2,592			6,483
Unrealized appreciation (depreciation)			5,141			(2,503	)

Net increase in net assets resulting from operations			7,760			3,188

Distributions to shareholders from (Note 1F): ⁽¹⁾
Net investment income:
Class A			(-	)		(192	)
Class B			(-	)		(24	)
Class C			(-	)		(291	)
Class Y			(-	)		(90	)
Realized gains on investment transactions:
Class A			(-	)		(-	)
Class B			(-	)		(-	)
Class C			(-	)		(-	)
Class Y			(-	)		(-	)
			(-	)		(597	)

Capital share transactions (Note 5)			(5,019	)		(11,336	)

Total increase (decrease)			2,741			(8,745	)
NET ASSETS
Beginning of period			66,863			75,608

End of period		$	69,604		$	66,863

Undistributed net investment loss		$	(373	)	$	(347	)

(1)See "Financial Highlights" on pages 83 - 86.

See Notes to Financial Statements.

Financial Highlights
      IVY INTERNATIONAL GROWTH FUND
      Class A Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended March 31,												For the period from 7-3-00 ⁽¹⁾ to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	11.03		$	10.60		$	7.57		$	9.82		$	12.03		$	24.33

Income (loss) from investment operations:
Net investment income (loss)			0.03			(0.05	)		(0.02	)	(0.03		)		(0.17	)		(0.02	)
Net realized and unrealized gain (loss) on investments			1.36			0.65			3.05		(2.22		)		(2.01	)		(6.46	)

Total from investment operations			1.39			0.60			3.03		(2.25		)		(2.18	)		(6.48	)

Less distributions from:
Net investment income			(0.00	)		(0.17	)		(0.00	)	(0.00		)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)	(0.00		)		(0.03	)		(5.82	)

Total distributions			(0.00	)		(0.17	)		(0.00	)	(0.00		)		(0.03	)		(5.82	)

Net asset value, end of period		$	12.42		$	11.03		$	10.60		$	7.57		$	9.82		$	12.03

Total return ⁽²⁾			12.60	%		5.65	%		40.03	%	-22.91		%	-18.12		%	-29.73		%
Net assets, end of period (in millions)			$16			$13			$12			$5			$7			$5
Ratio of expenses to average net assets			1.88	% ⁽³⁾		1.90	%		2.01	%		2.10	%		1.89	%		1.72	% ⁽³⁾
Ratio of net investment income (loss) to average net assets			0.66	% ⁽³⁾		-0.51	%		-0.23	%	-0.10		%		-0.49	%		-0.31	% ⁽³⁾
Portfolio turnover rate			37	%		82	%		176	%		108	%		134	%		103	% ⁽⁴⁾

See Notes to Financial Statements.

Financial Highlights
      IVY INTERNATIONAL GROWTH FUND
      Class B Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended March 31,												For the period from 7-10-00 ⁽¹⁾ to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	10.60		$	10.19		$	7.35		$	9.65		$	11.94		$	24.59

Income (loss) from investment operations:
Net investment loss			(0.04	)		(0.19	)		(0.12	)	(0.11		)		(0.19	)		(0.09	)
Net realized and unrealized gain (loss) on investments			1.32			0.65			2.96		(2.19		)		(2.07	)		(6.74	)

Total from investment operations			1.28			0.46			2.84		(2.30		)		(2.26	)		(6.83	)

Less distributions from:
Net investment income			(0.00	)		(0.05	)		(0.00	)	(0.00		)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)	(0.00		)		(0.03	)		(5.82	)

Total distributions			(0.00	)		(0.05	)		(0.00	)	(0.00		)		(0.03	)		(5.82	)

Net asset value, end of period		$	11.88		$	10.60		$	10.19		$	7.35		$	9.65		$	11.94

Total return			12.08	%		4.55	%		38.64	%	-23.83		%	-18.93		%	-30.89		%
Net assets, end of period (in millions)			$4			$4			$5			$2			$2			$2
Ratio of expenses to average net assets			2.88	% ⁽²⁾		2.93	%		3.02	%		3.24	%		2.89	%		2.61	% ⁽²⁾
Ratio of net investment loss to average net assets			-0.29	% ⁽²⁾		-1.53	%		-1.46	%	-1.22		%		-1.42	%		-1.30	% ⁽²⁾
Portfolio turnover rate			37	%		82	%		176	%		108	%		134	%		103	% ⁽³⁾

(1)Commencement of operations of the class.
(2)Annualized.
(3)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements.

Financial Highlights
      IVY INTERNATIONAL GROWTH FUND
      Class C Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,
	9-30-05				2005			2004			2003			2002			2001

Net asset value, beginning of period		$	10.69		$	10.27		$	7.40		$	9.69		$	11.96		$	28.58

Income (loss) from investment operations:
Net investment loss			(0.04	)		(0.19	)		(0.10	)	(0.08		)		(0.11	)	(0.17		)
Net realized and unrealized gain (loss) on investments			1.34			0.68			2.97		(2.21		)		(2.13	)	(10.63		)

Total from investment operations			1.30			0.49			2.87		(2.29		)		(2.24	)	(10.80		)

Less distributions from:
Net investment income			(0.00	)		(0.07	)		(0.00	)	(0.00		)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)	(0.00		)		(0.03	)		(5.82	)

Total distributions			(0.00	)		(0.07	)		(0.00	)	(0.00		)		(0.03	)		(5.82	)

Net asset value, end of period		$	11.99		$	10.69		$	10.27		$	7.40		$	9.69		$	11.96

Total return			12.16	%		4.72	%		38.78	%	-23.63		%	-18.73		%	- 40.45		%
Net assets, end of period (in millions)			$45			$45			$54			$46			$74			$123
Ratio of expenses to average net assets			2.77	% ⁽¹⁾		2.77	%		2.85	%		2.93	%		2.62	%		2.36	%
Ratio of net investment loss to average net assets			-0.17	% ⁽¹⁾		-1.35	%		-0.96	%	-0.86		%		-1.03	%		-1.03	%
Portfolio turnover rate			37	%		82	%		176	%		108	%		134	%		103	%

(1)Annualized.

See Notes to Financial Statements.

Financial Highlights
      IVY INTERNATIONAL GROWTH FUND
      Class Y Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,
	9-30-05				2005			2004			2003			2002			2001

Net asset value, beginning of period		$	12.02		$	11.53		$	8.17		$	10.55		$	12.87		$	29.86

Income (loss) from investment operations:
Net investment income (loss)			0.13			0.11			0.10			(0.16	)		(0.18	)	(0.17		)
Net realized and unrealized gain (loss) on investments			1.41			0.59			3.26			(2.22	)		(2.11	)	(11.00		)

Total from investment operations			1.54			0.70			3.36			(2.38	)		(2.29	)	(11.17		)

Less distributions from:
Net investment income			(0.00	)		(0.21	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.03	)		(5.82	)

Total distributions			(0.00	)		(0.21	)		(0.00	)		(0.00	)		(0.03	)		(5.82	)

Net asset value, end of period		$	13.56		$	12.02		$	11.53		$	8.17		$	10.55		$	12.87

Total return			12.81	%		6.09	%		41.13	%	-22.56		%	-17.79		%	-39.91		%
Net assets, end of period (in millions)			$5			$5			$5			$11			$8			$7
Ratio of expenses to average net assets			1.55	% ⁽¹⁾		1.57	%		1.62	%		1.63	%		1.52	%		1.44	%
Ratio of net investment income (loss) to average net assets			1.02	% ⁽¹⁾		-0.19	%		0.63	%		0.39	%	-0.11		%	-0.02		%
Portfolio turnover rate			37	%		82	%		176	%		108	%		134	%		103	%

(1)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY LARGE CAP GROWTH FUND
Portfolio Highlights

On September 30, 2005, Ivy Large Cap Growth Fund had net assets totaling $185,286,084 invested in a diversified portfolio of:

99.05%		Common Stocks
0.95%		Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Health Care Stocks	$	28.03
Financial Services Stocks	$	20.37
Technology Stocks	$	12.86
Energy Stocks	$	8.38
Retail Stocks	$	7.09
Multiple Industry Stocks	$	6.13
Business Equipment and Services Stocks	$	6.04
Miscellaneous Stocks	$	4.96
Consumer Nondurables Stocks	$	2.65
Raw Materials Stocks	$	2.54
Cash and Cash Equivalents	$	0.95


The Investments of Ivy Large Cap Growth Fund
September 30, 2005
COMMON STOCKS	Shares		Value


Apparel - 0.00%
Coach, Inc.*	100	$	3,136

Business Equipment and Services - 3.33%
Robert Half International Inc.	104,510		3,719,511
Weight Watchers International, Inc.*	47,500		2,450,050
			6,169,561
Capital Equipment - 1.96%
Caterpillar Inc.	61,800		3,630,750

Chemicals - Petroleum and Inorganic - 2.54%
Monsanto Company	75,000		4,706,250

Computers - Micro 3.20%
Apple Computer, Inc.*	70,100		3,758,411
Dell Inc.*	63,736		2,179,453
			5,937,864
Computers - Peripherals - 3.81%
Microsoft Corporation	137,073		3,526,203
SAP Aktiengesellschaft, ADR	81,350		3,524,896
			7,051,099
Consumer Electronics - 1.96%
Harman International Industries, Incorporated	35,567		3,637,437

Defense - 2.41%
General Dynamics Corporation	37,400		4,471,170

Electronic Components - 3.44%
Intel Corporation	50		1,232
Linear Technology Corporation	37		1,391
Microchip Technology Incorporated	146,400		4,408,104
SanDisk Corporation*	40,600		1,958,747
Xilinx, Inc.	50		1,392
			6,370,866
Finance Companies - 6.33%
SLM Corporation	218,550		11,723,022

Health Care - Drugs - 14.52%
Alcon, Inc.	64,700		8,273,836
Amgen Inc.*	65,700		5,233,005
Genentech, Inc.*	99,200		8,353,632
Gilead Sciences, Inc.*	103,400		5,036,614
			26,897,087
Health Care - General - 3.99%
Johnson & Johnson	69,400		4,391,632
Zimmer Holdings, Inc.*	43,650		3,007,048
			7,398,680
Hospital Supply and Management - 9.52%
Medtronic, Inc.	67,150		3,600,583
Stryker Corporation	71,600		3,539,188
UnitedHealth Group Incorporated	186,900		10,503,780
			17,643,551
Household - General Products - 1.03%
Procter & Gamble Company (The)	32,200		1,914,612

Leisure Time Industry - 0.00%
Carnival Corporation	44		2,199

Multiple Industry - 6.13%
Google Inc., Class A*	30,600		9,673,272
Research In Motion Limited*	24,600		1,679,688
			11,352,960
Petroleum - Services - 8.38%
Schlumberger Limited	63,300		5,341,254
Smith International, Inc.	305,724		10,183,666
			15,524,920
Retail - Food Stores - 3.62%
Walgreen Co.	154,214		6,700,598

Retail - General Merchandise - 0.00%
Dollar General Corporation	50		917

Retail - Specialty Stores - 3.47%
Best Buy Co., Inc.	71,950		3,131,983
Home Depot, Inc. (The)	86,600		3,302,924
			6,434,907
Security and Commodity Brokers - 14.04%
American Express Company	36,600		2,102,304
Chicago Mercantile Exchange Holdings Inc.	13,743		4,635,514
Franklin Resources, Inc.	45,300		3,803,388
Goldman Sachs Group, Inc. (The)	32,500		3,951,350
Legg Mason, Inc.	75,875		8,322,729
Moody's Corporation	62,600		3,197,608
			26,012,893
Timesharing and Software - 2.71%
Paychex, Inc.	135,700		5,029,721

Tobacco - 1.62%
Altria Group, Inc.	40,600		2,992,626

Trucking and Shipping - 1.04%
Expeditors International of Washington, Inc.	33,800		1,918,995

TOTAL COMMON STOCKS - 99.05%		$	183,525,821

(Cost: $150,535,707)


SHORT-TERM SECURITY - 0.89%	Principal Amount in Thousands


Utilities - Electric
Wisconsin Electric Power Co.,
3.88%, 10-3-05	$	1,657	$	1,656,643
(Cost: $1,656,643)

TOTAL INVESTMENT SECURITIES - 99.94%			$	185,182,464

(Cost: $152,192,350)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.06%				103,620


NET ASSETS - 100.00%			$	185,286,084


Notes to Schedule of Investments
*No dividends were paid during the preceding 12 months.
See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY LARGE CAP GROWTH FUND
      September 30, 2005
      (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $152,192) (Notes 1 and 3)	$	185,182
Receivables:
Fund shares sold		1,551
Dividends and interest		106
Prepaid and other assets		30

Total assets		186,869

LIABILITIES
Payable for investment securities purchased		1,105
Payable to Fund shareholders		278
Due to custodian		100
Accrued shareholder servicing (Note 2)		58
Accrued accounting services fee (Note 2)		6
Accrued management fee (Note 2)		4
Accrued distribution and service fees (Note 2)		2
Other liabilities		30

Total liabilities		1,583

Total net assets	$	185,286

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	177
Additional paid-in capital		174,886
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(495	)
Accumulated undistributed net realized loss on investment transactions		(22,272	)
Net unrealized appreciation in value of investments		32,990

Net assets applicable to outstanding units of capital	$	185,286

Net asset value per share (net assets divided by shares outstanding):
Class A		$10.53
Class B		$ 9.87
Class C		$10.09
Class Y		$10.64
Capital shares outstanding:
Class A		10,307
Class B		927
Class C		1,288
Class Y		5,134
Capital shares authorized		400,000

See Notes to Financial Statements.

Statement of Operations
      IVY LARGE CAP GROWTH FUND
      For the Six Months Ended September 30, 2005
      (In Thousands)

INVESTMENT LOSS
Income (Note 1B):
Dividends (net of foreign withholding taxes of $9)	$	668
Interest and amortization		74

Total income		742

Expenses (Note 2):
Investment management fee		570
Shareholder servicing:
Class A		173
Class B		26
Class C		26
Class Y		39
Service fee:
Class A		103
Class B		11
Class C		15
Class Y		65
Distribution fee:
Class A		11
Class B		31
Class C		46
Accounting services fee		34
Registration fees		27
Audit fees		15
Custodian fees		5
Other		34

Total		1,231
Less expenses in excess of voluntary limit (Note 2)		(6	)
Total expenses		1,225
Net investment loss		(483	)
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		4,583
Unrealized appreciation in value of investments during the period		11,891

Net gain on investments		16,474

Net increase in net assets resulting from operations	$	15,991

See Notes to Financial Statements.

Statement of Changes in Net Assets
      IVY LARGE CAP GROWTH FUND
      (In Thousands)

	For the six months ended September 30,				For the fiscal year ended March 31,
	2005				2005

INCREASE IN NET ASSETS
Operations:
Net investment loss		$	(483	)		$	(451	)
Realized net gain on investments			4,583				958
Unrealized appreciation			11,891				3,253

Net increase in net assets resulting from operations			15,991				3,760

Distributions to shareholders from (Note 1F): ⁽¹⁾
Net investment income:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)
Realized gains on investment transactions:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)

			(-	)			(-	)

Capital share transactions (Note 5)			17,512				(3,734	)

Total increase			33,503				26
NET ASSETS
Beginning of period			151,783				151,757

End of period		$	185,286			$	151,783

Undistributed net investment loss		$	(495	)		$	(12	)

(1)See "Financial Highlights" on pages 94 - 97.

See Notes to Financial Statements.

Financial Highlights
      IVY LARGE CAP GROWTH FUND
      Class A Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended March 31,												For the period from 6-30-00 ⁽¹⁾ to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	9.54		$	9.27		$	7.24		$	9.21		$	9.48		$	10.00

Income (loss) from investment operations:
Net investment income (loss)		(0.03		)	(0.03		)	(0.04		)	(0.03		)	(0.04		)		0.05
Net realized and unrealized gain (loss) on investments			1.02			0.30			2.07		(1.94		)	(0.23		)		(0.45	)

Total from investment operations			0.99			0.27			2.03		(1.97		)	(0.27		)		(0.40	)

Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.06	)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.06	)

Total distributions		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.12	)

Net asset value, end of period		$	10.53		$	9.54		$	9.27		$	7.24		$	9.21		$	9.48

Total return ⁽²⁾		10.38		%	2.91		%	28.04		%	-21.39		%	-2.85		%		-4.27	%
Net assets, end of period (in millions)			$108			$82			$76			$21			$20			$19
Ratio of expenses to average net assets including voluntary expense waiver ⁽³⁾			1.47	% ⁽⁴⁾		1.50	%		1.55	%		1.28	%		1.58	%		1.13	% ⁽⁴⁾
Ratio of net investment income (loss) to average net assets including voluntary expense waiver ⁽³⁾		-0.57		% ⁽⁴⁾	-0.31		%	-0.89		%	-0.23		%	-0.38		%		0.89	% ⁽⁴⁾
Ratio of expenses to average net assets excluding voluntary expense waiver ⁽³⁾			-			1.52	%		-			1.66	%		1.69	%		1.34	% ⁽⁴⁾
Ratio of net investment income (loss) to average net assets excluding voluntary expense waiver ⁽³⁾			-		-0.33		%		-		-0.61		%	-0.49		%		0.68	% ⁽⁴⁾
Portfolio turnover rate			45	%		131	%		162	%		72	%		99	%		75	%

(1)Commencement of operations of the class.
(2)Total return calculated without taking into account the sales load deducted on an initial purchase.
(3)See Note 2.
(4)Annualized.

See Notes to Financial Statements.

Financial Highlights
      IVY LARGE CAP GROWTH FUND
      Class B Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended March 31,												For the period from 7-6-00 ⁽¹⁾ to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	8.99		$	8.83		$	6.99		$	9.05		$	9.44		$	10.02

Income (loss) from investment operations:
Net investment loss		(0.06		)	(0.05		)	(0.13		)	(0.14		)	(0.16		)		(0.03	)
Net realized and unrealized gain (loss) on investments			0.94			0.21			1.97		(1.92		)	(0.23		)		(0.49	)

Total from investment operations			0.88			0.16			1.84		(2.06		)	(0.39		)		(0.52	)

Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.00	)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.06	)

Total distributions		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.06	)

Net asset value, end of period		$	9.87		$	8.99		$	8.83		$	6.99		$	9.05		$	9.44

Total return			9.79	%		1.81	%	26.32		%	-22.76		%	-4.13		%		-5.32	%
Net assets, end of period (in millions)			$9			$8			$5			$2			$2			$2
Ratio of expenses to average net assets including voluntary expense waiver ⁽²⁾			2.49	% ⁽³⁾		2.53	%		2.85	%		2.93	%		2.98	%		2.53	% ⁽³⁾
Ratio of net investment loss to average net assets including voluntary expense waiver ⁽²⁾		-1.58		% ⁽³⁾	-1.30		%	-2.16		%	-1.87		%	-1.79		%		-0.60	% ⁽³⁾
Ratio of expenses to average net assets excluding voluntary expense waiver ⁽²⁾			-			-			-			3.31	%		3.19	%		3.00	% ⁽³⁾
Ratio of net investment loss to average net assets excluding voluntary expense waiver ⁽²⁾			-			-			-		-2.25		%	-2.00		%		-1.07	% ⁽³⁾
Portfolio turnover rate			45	%		131	%		162	%		72	%		99	%		75	%

(1)Commencement of operations of the class.
(2)See Note 2.
(3)Annualized.

See Notes to Financial Statements.

Financial Highlights
      IVY LARGE CAP GROWTH FUND
      Class C Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended March 31,												For the period from 7-3-00 ⁽¹⁾ to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	9.18		$	8.99		$	7.08		$	9.10		$	9.45		$	10.00

Income (loss) from investment operations:
Net investment loss			(0.07	)	(0.09		)	(0.11		)	(0.10		)	(0.12		)		(0.00	)
Net realized and unrealized gain (loss) on investments			0.98			0.28			2.02		(1.92		)	(0.23		)		(0.48	)

Total from investment operations			0.91			0.19			1.91		(2.02		)	(0.35		)		(0.48	)

Less distributions from:
Net investment income			(0.00	)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.01	)
Capital gains			(0.00	)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.06	)

Total distributions			(0.00	)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.07	)

Net asset value, end of period		$	10.09		$	9.18		$	8.99		$	7.08		$	9.10		$	9.45

Total return			9.91	%		2.11	%	26.98		%	-22.28		%	-3.60		%		-4.93	%
Net assets, end of period (in millions)			$13			$12			$11			$4			$7			$7
Ratio of expenses to average net assets including voluntary expense waiver ⁽²⁾			2.25	% ⁽³⁾		2.25	%		2.44	%		2.26	%		2.51	%		2.06	% ⁽³⁾
Ratio of net investment loss to average net assets including voluntary expense waiver ⁽²⁾			-1.34	% ⁽³⁾	-1.06		%	-1.75		%	-1.20		%	-1.31		%		-0.08	% ⁽³⁾
Ratio of expenses to average net assets excluding voluntary expense waiver ⁽²⁾			2.26	% ⁽³⁾		2.28	%		-			2.64	%		2.68	%		2.44	% ⁽³⁾
Ratio of net investment loss to average net assets excluding voluntary expense waiver ⁽²⁾			-1.35	% ⁽³⁾	-1.09		%		-		-1.58		%	-1.48		%		-0.46	% ⁽³⁾
Portfolio turnover rate			45	%		131	%		162	%		72	%		99	%		75	%

(1)Commencement of operations of the class.
(2)See Note 2.
(3)Annualized.

See Notes to Financial Statements.

Financial Highlights
      IVY LARGE CAP GROWTH FUND
      Class Y Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended					For the fiscal year ended March 31,												For the period from 7-6-00 ⁽¹⁾ to
	9-30-05					2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	9.62			$	9.32		$	7.26		$	9.22		$	9.48		$	10.02

Income (loss) from investment operations:
Net investment income (loss)			(0.01	)			0.00		(0.03		)	(0.30		)	(0.01		)		0.09
Net realized and unrealized gain (loss) on investments			1.03				0.30			2.09		(1.66		)	(0.25		)		(0.50	)

Total from investment operations			1.02				0.30			2.06		(1.96		)	(0.26		)		(0.41	)

Less distributions from:
Net investment income			(0.00	)		(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.07	)
Capital gains			(0.00	)		(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.06	)

Total distributions			(0.00	)		(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.13	)

Net asset value, end of period		$	10.64			$	9.62		$	9.32		$	7.26		$	9.22		$	9.48

Total return			10.60	%			3.22	%	28.38		%	-21.26		%	-2.74		%		-4.38	%
Net assets, end of period (in thousands)	$54,606				$49,661			$59,483				$892			$768				$279
Ratio of expenses to average net assets including voluntary expense waiver ⁽²⁾			1.20	% ⁽³⁾			1.20	%		1.26	%		1.05	%		1.36	%		1.13	% ⁽³⁾
Ratio of net investment income (loss) to average net assets including voluntary expense waiver ⁽²⁾			-0.29	% ⁽³⁾		-0.01		%	-0.64		%		0.00	%	-0.20		%		1.11	% ⁽³⁾
Ratio of expenses to average net assets excluding voluntary expense waiver ⁽²⁾			1.22	% ⁽³⁾			1.25	%		-			1.43	%		1.45	%		1.34	% ⁽³⁾
Ratio of net investment income (loss) to average net assets excluding voluntary expense waiver ⁽²⁾			-0.31	% ⁽³⁾		-0.06		%		-		-0.38		%	-0.29		%		0.90	% ⁽³⁾
Portfolio turnover rate			45	%			131	%		162	%		72	%		99	%		75	%

(1)Commencement of operations of the class.
(2)See Note 2.
(3)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY LIMITED-TERM BOND FUND
Portfolio Highlights

On September 30, 2005, Ivy Limited-Term Bond Fund had net assets totaling $56,550,779 invested in a diversified portfolio of:

51.50%		United States Government and Government Agency Obligations
45.56%		Corporate Debt Securities
2.94%		Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Corporate Debt Securities	$	45.56
United States Government Agency Mortgage-Backed Obligations	$	23.26
United States Government Treasury Obligations	$	23.02
United States Government Agency Obligations	$	5.22
Cash and Cash Equivalents	$	2.94

On September 30, 2005, the breakdown of bonds (by ratings) held by the Fund was as follows:


AAA	51.50	%
A	16.27	%
BBB	23.08	%
BB	6.21	%
Cash and Cash Equivalents	2.94	%


The Investments of Ivy Limited-Term Bond Fund
September 30, 2005
CORPORATE DEBT SECURITIES	Principal Amount in Thousands			Value


Aircraft - 3.29%
Raytheon Company,
6.75%, 8-15-07	$	1,800	$	1,859,998

Business Equipment and Services - 3.69%
USA Waste Services, Inc.,
7.125%, 10-1-07		2,000		2,085,268

Capital Equipment - 1.42%
John Deere Capital Corporation,
5.125%, 10-19-06		800		805,034

Chemicals - Specialty - 2.22%
Praxair, Inc.,
4.75%, 7-15-07		1,250		1,254,122

Finance Companies - 6.21%
Ford Motor Credit Company,
6.875%, 2-1-06		2,000		2,008,184
General Motors Acceptance Corporation,
6.625%, 10-15-05		1,500		1,500,903
				3,509,087
Food and Related - 1.24%
Kellogg Company,
4.875%, 10-15-05		700		700,158

Forest and Paper Products - 1.91%
International Paper Company,
4.25%, 1-15-09		1,105		1,080,908

Multiple Industry - 6.95%
Household Finance Corporation,
6.5%, 1-24-06		950		956,499
Kansas City Power & Light Company,
7.125%, 12-15-05		950		954,995
National Rural Utilities Cooperative Finance Corporation,
6.0%, 5-15-06		2,000		2,019,156
				3,930,650
Petroleum - International - 3.61%
Anadarko Petroleum Corporation,
5.375%, 3-1-07		2,025		2,042,723

Railroad - 4.35%
Norfolk Southern Corporation,
7.35%, 5-15-07		1,850		1,924,792
Union Pacific Corporation,
6.7%, 12-1-06		525		537,591
				2,462,383
Utilities - Electric - 6.92%
FPL Group Capital Inc,
6.125%, 5-15-07		2,000		2,046,568
Virginia Electric and Power Company,
5.375%, 2-1-07		1,500		1,513,014
Wisconsin Energy Corporation,
5.875%, 4-1-06		350		352,407
				3,911,989
Utilities - Telephone - 3.75%
GTE Corporation,
6.36%, 4-15-06		2,100		2,120,383

TOTAL CORPORATE DEBT SECURITIES - 45.56%			$	25,762,703

(Cost: $25,892,373)


UNITED STATES GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS


Agency Obligations - 5.22%
Federal Home Loan Mortgage Corporation,
3.625%, 9-15-08	2,000		1,956,568
Federal National Mortgage Association,
4.25%, 7-15-07	1,000		997,469
			2,954,037
Mortgage-Backed Obligations - 23.26%
Federal Home Loan Mortgage Corporation Agency REMIC/CMO:
4.0%, 12-15-12	587		574,320
3.5%, 12-15-16	1,068		1,029,382
5.5%, 7-15-17 (Interest Only)	1,000		64,556
5.5%, 10-15-23 (Interest Only)	4,374		341,769
5.5%, 4-15-24 (Interest Only)	1,393		128,573
5.0%, 6-15-24 (Interest Only)	2,000		266,912
4.0%, 11-15-32	1,233		1,196,228
Federal Home Loan Mortgage Corporation Fixed Rate Participation Certificates:
4.5%, 5-1-10	827		822,443
5.5%, 1-1-17	230		233,774
5.5%, 5-1-17	224		227,635
4.5%, 4-1-18	1,343		1,317,621
Federal National Mortgage Association Fixed Rate Pass-Through Certificates:
8.0%, 2-1-08	2		1,952
7.0%, 10-1-14	45		47,107
5.5%, 2-1-17	744		754,953
5.0%, 11-1-17	826		825,106
5.5%, 1-1-18	842		854,520
Government National Mortgage Association Fixed Rate Pass-Through Certificates:
6.5%, 1-15-14	82		85,625
6.0%, 5-15-14	208		215,732
5.5%, 1-15-17	369		377,992
6.0%, 1-15-17	252		260,949
5.5%, 7-15-17	704		719,880
5.0%, 12-15-17	1,228		1,235,264
4.0%, 9-15-18	1,469		1,418,931
7.0%, 10-15-28	48		50,094
7.0%, 4-15-29	32		33,375
7.0%, 7-15-29	64		67,875
			13,152,568
Treasury Obligations - 23.02%
United States Treasury Notes:
4.75%, 11-15-08	2,000		2,032,110
3.125%, 4-15-09	2,000		1,929,922
4.0%, 6-15-09	1,000		993,125
4.0%, 3-15-10	2,000		1,982,188
5.0%, 8-15-11	2,000		2,078,204
4.375%, 8-15-12	2,000		2,011,796
4.25%, 8-15-14	2,000		1,987,500
			13,014,845

TOTAL UNITED STATES GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 51.50%		$	29,121,450

(Cost: $29,393,813)


SHORT-TERM SECURITY - 1.91%


Forest and Paper Products
Sonoco Products Co.,
3.94%, 10-3-05	1,083	$	1,082,763
(Cost: $1,082,763)

TOTAL INVESTMENT SECURITIES - 98.97%		$	55,966,916

(Cost: $56,368,949)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.03%			583,863


NET ASSETS - 100.00%		$	56,550,779


Notes to Schedule of Investments
Certain acronyms are used within the body of the Fund's holdings. The definitions of these acronyms are as follows: REMIC - Real Estate Mortgage Investment Conduit; CMO - Collateralized Mortgage Obligation.
See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY LIMITED-TERM BOND FUND
      September 30, 2005
      (In Thousands, Except for Per Share Amounts)


ASSETS
Investment securities - at value (cost - $56,369) (Notes 1 and 3)	$	55,967
Receivables:
Interest		708
Fund shares sold		292
Prepaid and other assets		28

Total assets		56,995

LIABILITIES
Payable to Fund shareholders		356
Due to custodian		27
Accrued shareholder servicing (Note 2)		23
Dividends payable		11
Accrued accounting services fee (Note 2)		3
Accrued distribution and service fees (Note 2)		1
Accrued management fee (Note 2)		1
Other		22

Total liabilities		444

Total net assets	$	56,551

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	56
Additional paid-in capital		57,508
Accumulated undistributed loss:
Accumulated undistributed net realized loss on investment transactions		(611	)
Net unrealized depreciation in value of investments		(402	)

Net assets applicable to outstanding units of capital	$	56,551

Net asset value per share (net assets divided by shares outstanding):
Class A		$10.13
Class B		$10.13
Class C		$10.13
Class Y		$10.13
Capital shares outstanding:
Class A		3,320
Class B		553
Class C		1,526
Class Y		186
Capital shares authorized	200,000

See Notes to Financial Statements.

Statement of Operations
      IVY LIMITED-TERM BOND FUND
      For the Six Months Ended September 30, 2005
      (In Thousands)


INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	1,259

Expenses (Note 2):
Investment management fee		148
Shareholder servicing:
Class A		54
Class B		14
Class C		32
Class Y		2
Distribution fee:
Class A		6
Class B		23
Class C		61
Service fee:
Class A		38
Class B		8
Class C		20
Class Y		2
Registration fees		28
Accounting services fee		22
Audit fees		11
Custodian fees		4
Other		16

Total expenses		489

Net investment income		770

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on investments		(26	)
Unrealized depreciation in value of investments during the period		(52	)

Net loss on investments		(78	)

Net increase in net assets resulting from operations	$	692

See Notes to Financial Statements.

Statement of Changes in Net Assets
      IVY LIMITED-TERM BOND FUND
      (In Thousands)


	For the six months ended September 30,				For the fiscal year ended March 31,
	2005				2005

DECREASE IN NET ASSETS
Operations:
Net investment income		$	770			$	1,586
Realized net loss on investments			(26	)			(80	)
Unrealized depreciation			(52	)			(2,076	)

Net increase (decrease) in net assets resulting from operations			692				(570	)

Distributions to shareholders from (Note 1F): ⁽¹⁾
Net investment income:
Class A			(512	)			(1,057	)
Class B			(62	)			(114	)
Class C			(168	)			(359	)
Class Y			(28	)			(56	)
Realized gains on investment transactions:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)

			(770	)			(1,586	)

Capital share transactions (Note 5)			(7,196	)			1,791

Total decrease			(7,274	)			(365	)
NET ASSETS
Beginning of period			63,825				64,190

End of period		$	56,551			$	63,825

Undistributed net investment income		$	-			$	-

(1)See "Financial Highlights" on pages 106 - 109.

See Notes to Financial Statements.

Financial Highlights
      IVY LIMITED-TERM BOND FUND
      Class A Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,												For the period from 8-17-00 ⁽¹⁾to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	10.14		$	10.48		$	10.45		$	10.20		$	10.17		$	9.84

Income (loss) from investment operations:
Net investment income			0.15			0.28			0.29			0.36			0.51			0.36
Net realized and unrealized gain (loss) on investments			(0.01	)		(0.34	)		0.03			0.25			0.03			0.33

Total from investment operations			0.14			(0.06	)		0.32			0.61			0.54			0.69

Less distributions from:
Net investment income			(0.15	)		(0.28	)		(0.29	)		(0.36	)		(0.51	)		(0.36	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.15	)		(0.28	)		(0.29	)		(0.36	)		(0.51	)		(0.36	)

Net asset value, end of period		$	10.13		$	10.14		$	10.48		$	10.45		$	10.20		$	10.17

Total return ⁽²⁾			1.38	%		-0.60	%		3.13	%		6.15	%		5.42	%		7.01	%
Net assets, end of period (in thousands)	$33,611			$38,482			$34,970			$39,765				$6,124				$494
Ratio of expenses to average net assets including voluntary expense waiver			1.33	% ⁽³⁾		1.27	%		1.18	%		1.09	%		1.04	%		0.85	% ⁽³⁾
Ratio of net investment income to average net assets including voluntary expense waiver			2.91	% ⁽³⁾		2.71	%		2.79	%		3.32	%		4.76	%		5.83	% ⁽³⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			-	⁽⁴⁾		-	⁽⁴⁾		-	⁽⁴⁾		-	⁽⁴⁾		1.19	%		1.09	% ⁽³⁾
Ratio of net investment income to average net assets excluding voluntary expense waiver			-	⁽⁴⁾		-	⁽⁴⁾		-	⁽⁴⁾		-	⁽⁴⁾		4.61	%		5.59	% ⁽³⁾
Portfolio turnover rate			9	%		36	%		30	%		49	%		33	%		16	% ⁽⁵⁾

See Notes to Financial Statements.

Financial Highlights
      IVY LIMITED-TERM BOND FUND
      Class B Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,												For the period from 7-3-00 ⁽¹⁾ to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	10.14		$	10.48		$	10.45		$	10.20		$	10.17		$	9.80

Income (loss) from investment operations:
Net investment income			0.10			0.18			0.19			0.27			0.42			0.36
Net realized and unrealized gain (loss) on investments			(0.01	)		(0.34	)		0.03			0.25			0.03			0.37

Total from investment operations			0.09			(0.16	)		0.22			0.52			0.45			0.73

Less distributions from:
Net investment income			(0.10	)		(0.18	)		(0.19	)		(0.27	)		(0.42	)		(0.36	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.10	)		(0.18	)		(0.19	)		(0.27	)		(0.42	)		(0.36	)

Net asset value, end of period		$	10.13		$	10.14		$	10.48		$	10.45		$	10.20		$	10.17

Total return			0.93	%		-1.51	%		2.18	%		5.18	%		4.52	%		7.54	%
Net assets, end of period (in thousands)		$5,602			$6,649			$5,812			$5,471			$1,419				$425
Ratio of expenses to average net assets including voluntary expense waiver			2.21	% ⁽²⁾		2.20	%		2.11	%		2.01	%		1.88	%		1.81	% ⁽²⁾
Ratio of net investment income to average net assets including voluntary expense waiver			2.03	% ⁽²⁾		1.78	%		1.86	%		2.47	%		4.02	%		4.91	% ⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			-	⁽³⁾		-	⁽³⁾		-	⁽³⁾		-	⁽³⁾		2.15	%		2.33	% ⁽²⁾
Ratio of net investment income to average net assets excluding voluntary expense waiver			-	⁽³⁾		-	⁽³⁾		-	⁽³⁾		-	⁽³⁾		3.76	%		4.39	% ⁽²⁾
Portfolio turnover rate			9	%		36	%		30	%		49	%		33	%		16	% ⁽⁴⁾

See Notes to Financial Statements.

Financial Highlights
      IVY LIMITED-TERM BOND FUND
      Class C Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,
	9-30-05				2005			2004			2003			2002				2001

Net asset value, beginning of period		$	10.14		$	10.48		$	10.45		$	10.20		$	10.17		$	9.76

Income (loss) from investment operations:
Net investment income			0.10			0.19			0.20			0.27			0.42			0.48
Net realized and unrealized gain (loss) on investments			(0.01	)		(0.34	)		0.03			0.25			0.03			0.41

Total from investment operations			0.09			(0.15	)		0.23			0.52			0.45			0.89

Less distributions from:
Net investment income			(0.10	)		(0.19	)		(0.20	)		(0.27	)		(0.42	)		(0.48	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.10	)		(0.19	)		(0.20	)		(0.27	)		(0.42	)		(0.48	)

Net asset value, end of period		$	10.13		$	10.14		$	10.48		$	10.45		$	10.20		$	10.17

Total return			0.95	%		-1.45	%		2.23	%		5.22	%		4.46	%		9.48	%
Net assets, end of period (in millions)			$15			$17			$22			$30			$20			$18
Ratio of expenses to average net assets including voluntary expense waiver			2.17	% ⁽¹⁾		2.14	%		2.05	%		1.98	%		1.94	%		1.82	%
Ratio of net investment income to average net assets including voluntary expense waiver			2.07	% ⁽¹⁾		1.84	%		1.92	%		2.59	%		4.04	%		4.97	%
Ratio of expenses to average net assets excluding voluntary expense waiver			-	⁽²⁾		-	⁽²⁾		-	⁽²⁾		-	⁽²⁾		2.21	%		2.34	%
Ratio of net investment income to average net assets excluding voluntary expense waiver			-	⁽²⁾		-	⁽²⁾		-	⁽²⁾		-	⁽²⁾		3.77	%		4.44	%
Portfolio turnover rate			9	%		36	%		30	%		49	%		33	%		16	%

(1)Annualized.
(2)Because the Fund's net assets exceeded $25 million, there was no waiver of expenses. Therefore, no ratio is provided.

See Notes to Financial Statements.

Financial Highlights
      IVY LIMITED-TERM BOND FUND
      Class Y Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,
	9-30-05				2005			2004			2003			2002			2001

Net asset value, beginning of period		$	10.14		$	10.48		$	10.45		$	10.20		$	10.17		$	9.76

Income (loss) from investment operations:
Net investment income			0.15			0.29			0.29			0.36			0.51			0.59
Net realized and unrealized gain (loss) on investments			(0.01	)		(0.34	)		0.03			0.25			0.03			0.41

Total from investment operations			0.14			(0.05	)		0.32			0.61			0.54			1.00

Less distributions from:
Net investment income			(0.15	)		(0.29	)		(0.29	)		(0.36	)		(0.51	)		(0.59	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.15	)		(0.29	)		(0.29	)		(0.36	)		(0.51	)		(0.59	)

Net asset value, end of period		$	10.13		$	10.14		$	10.48		$	10.45		$	10.20		$	10.17

Total return			1.46	%		-0.49	%		3.18	%		6.14	%		5.41	%		10.56	%
Net assets, end of period (in millions)			$2			$2			$2			$2			$1			$2
Ratio of expenses to average net assets including voluntary expense waiver			1.18	% ⁽¹⁾		1.16	%		1.13	%		1.09	%		1.04	%		0.83	%
Ratio of net investment income to average net assets including voluntary expense waiver			3.06	% ⁽¹⁾		2.82	%		2.83	%		3.42	%		4.97	%		5.95	%
Ratio of expenses to average net assets excluding voluntary expense waiver			-	⁽²⁾		-	⁽²⁾		-	⁽²⁾		-	⁽²⁾		1.18	%		1.07	%
Ratio of net investment income to average net assets excluding voluntary expense waiver			-	⁽²⁾		-	⁽²⁾		-	⁽²⁾		-	⁽²⁾		4.83	%		5.71	%
Portfolio turnover rate			9	%		36	%		30	%		49	%		33	%		16	%

(1)Annualized.
(2)Because the Fund's net assets exceeded $25 million, there was no waiver of expenses. Therefore, no ratio is provided.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY MID CAP GROWTH FUND
Portfolio Highlights

On September 30, 2005, the Ivy Mid Cap Growth Fund had net assets totaling $106,646,896 invested in a diversified portfolio of:

94.00%		Common Stocks
6.00%		Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Health Care Stocks	$	20.91
Technology Stocks	$	17.23
Business Equipment and Services Stocks	$	15.92
Financial Services Stocks	$	10.59
Consumer Nondurables Stocks	$	6.45
Consumer Services Stocks	$	6.43
Cash and Cash Equivalents	$	6.00
Capital Goods Stocks	$	5.95
Miscellaneous Stocks	$	5.38
Energy Stocks	$	5.14


The Investments of Ivy Mid Cap Growth Fund
September 30, 2005
COMMON STOCKS		Shares		Value


Air Transportation - 0.30%
Southwest Airlines Co.		21,750	$	322,988

Aircraft - 1.55%
L-3 Communications Holdings, Inc.		20,850		1,648,609

Banks - 5.18%
Amegy Bancorporation, Inc.		31,700		717,529
Northern Trust Corporation		44,500		2,249,698
Synovus Financial Corp.		92,450		2,562,714
				5,529,941
Beverages - 2.59%
Brown-Forman Corporation, Class B		25,200		1,500,408
Coca-Cola Enterprises Inc.		64,950		1,266,525
				2,766,933
Broadcasting - 1.21%
Cox Radio, Inc., Class A*		48,700		740,240
XM Satellite Radio Holdings Inc., Class A*		15,400		552,937
				1,293,177
Business Equipment and Services - 6.00%
Cintas Corporation		36,850		1,512,877
Lamar Advertising Company, Class A*		59,550		2,700,295
Stericycle, Inc.*		38,200		2,182,748
				6,395,920
Capital Equipment - 2.11%
IDEX Corporation		52,775		2,245,576

Communications Equipment - 1.29%
Juniper Networks, Inc.*		57,800		1,375,351

Computers - Micro - 3.93%
Apple Computer, Inc.*		69,250		3,712,839
Sun Microsystems, Inc.*	122,400			480,420
				4,193,259
Computers - Peripherals - 1.84%
EMC Corporation*		70,950		918,093
Mercury Interactive Corporation*		26,450		1,047,156
				1,965,249
Cosmetics and Toiletries - 1.79%
Estee Lauder Companies Inc. (The), Class A		54,950		1,913,908

Electrical Equipment - 1.47%
Molex Incorporated		9,150		244,076
Molex Incorporated, Class A		51,600		1,325,088
				1,569,164
Electronic Components - 7.18%
Analog Devices, Inc.		25,450		945,213
Broadcom Corporation, Class A*		39,250		1,841,414
Maxim Integrated Products, Inc.		24,750		1,055,464
Microchip Technology Incorporated		56,950		1,714,765
Network Appliance, Inc.*		88,350		2,096,987
				7,653,843
Electronic Instruments - 1.44%
Lam Research Corporation*		50,250		1,530,866

Food and Related - 2.07%
Campbell Soup Company		38,100		1,133,475
Hershey Foods Corporation		19,050		1,072,706
				2,206,181
Health Care - Drugs - 6.73%
Allergan, Inc.		31,600		2,895,192
Gilead Sciences, Inc.*		44,400		2,162,724
ICOS Corporation*		39,550		1,092,173
Neurocrine Biosciences, Inc.*		21,000		1,032,675
				7,182,764
Health Care - General - 7.73%
Biomet, Inc.		57,225		1,985,994
DENTSPLY International Inc.		15,200		821,028
Gen-Probe Incorporated*		24,200		1,195,843
Kyphon Inc.*		35,900		1,576,189
Schein (Henry), Inc.*		62,450		2,660,058
				8,239,112
Hospital Supply and Management - 6.45%
Bard (C. R.), Inc.		48,450		3,199,153
Health Management Associates, Inc., Class A		63,800		1,497,386
Laboratory Corporation of America Holdings*		44,800		2,182,208
				6,878,747
Hotels and Gaming - 1.82%
Orient-Express Hotels Ltd.		11,200		318,304
Starwood Hotels & Resorts Worldwide, Inc.		28,400		1,623,628
				1,941,932
Metal Fabrication - 2.37%
Fastenal Company (A)		41,450		2,530,522

Motor Vehicles - 0.76%
Harley-Davidson, Inc.		16,650		806,526

Multiple Industry - 1.20%
AXIS Capital Holdings Limited		45,000		1,282,950

Petroleum - Domestic - 1.21%
XTO Energy Inc.		28,366		1,285,547

Petroleum - International - 3.44%
Burlington Resources Inc.		31,100		2,529,052
Noble Energy, Inc.		24,200		1,134,980
				3,664,032
Petroleum - Services - 0.49%
Smith International, Inc.		15,700		522,967

Publishing - 3.40%
Getty Images, Inc.*		23,900		2,056,356
Meredith Corporation		31,450		1,569,041
				3,625,397
Retail - Food Stores - 0.66%
Longs Drug Stores Corporation		16,350		701,252

Retail - General Merchandise - 0.74%
Nordstrom, Inc.		23,100		792,792

Security and Commodity Brokers - 5.41%
Ameritrade Holding Corporation*		62,650		1,344,782
Chicago Mercantile Exchange Holdings Inc.		9,350		3,153,755
Prudential Financial, Inc.		18,848		1,273,371
				5,771,908
Timesharing and Software - 9.92%
Alliance Data Systems Corporation*		55,250		2,163,037
eBay Inc.*		74,950		3,087,565
Global Payments Inc.		25,150		1,954,658
Paychex, Inc.		70,250		2,603,816
Total System Services, Inc.		32,850		765,734
				10,574,810
Trucking and Shipping - 1.72%
C.H. Robinson Worldwide, Inc.		28,650		1,836,751

TOTAL COMMON STOCKS - 94.00%			$	100,248,974

(Cost: $68,606,176)


SHORT-TERM SECURITIES	Principal Amount in Thousands


Multiple Industry - 3.74%
Wisconsin Electric Power Co.,
3.88%, 10-3-05	$	3,982		3,981,142

Utilities - Electric - 2.81%
Michigan Consolidated Gas Co.,
3.87%, 10-5-05		3,000		2,998,710

TOTAL SHORT-TERM SECURITIES - 6.55%			$	6,979,852

(Cost: $6,979,852)

TOTAL INVESTMENT SECURITIES - 100.55%			$	107,228,826

(Cost: $75,586,028)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.55%)				(581,930	)


NET ASSETS - 100.00%			$	106,646,896


Notes to Schedule of Investments
*No dividends were paid during the preceding 12 months.
(A)Security serves as cover for the following written call option outstanding at September 30, 2005. (See Note 6 to financial statements):
	Underlying Security	Contracts Subject to Call	Expiration Month/ Exercise Price	Premium Received			Market Value

	Fastenal Company	204	November/68		$	24,837	$	4,192

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY MID CAP GROWTH FUND
      September 30, 2005
      (In Thousands, Except for Per Share Amounts)


ASSETS
Investment securities - at value (cost - $75,586) (Notes 1 and 3)	$	107,229
Receivables:
Fund shares sold		224
Dividends and interest		61
Investment securities sold		46
Prepaid and other assets		28

Total assets		107,588

LIABILITIES
Payable for investment securities purchased		648
Payable to Fund shareholders		170
Accrued shareholder servicing (Note 2)		44
Due to custodian		44
Accrued accounting services fee (Note 2)		5
Outstanding written options at market (premium received - $25) (Note 6)		4
Accrued management fee (Note 2)		3
Accrued distribution and service fees (Note 2)		1
Other		22

Total liabilities		941

Total net assets	$	106,647

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	96
Additional paid-in capital		120,113
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(570	)
Accumulated undistributed net realized loss on investment transactions		(44,655	)
Net unrealized appreciation in value of investments		31,663

Net assets applicable to outstanding units of capital	$	106,647

Net asset value per share (net assets divided by shares outstanding):
Class A		$11.20
Class B		$10.60
Class C		$10.81
Class Y		$11.28
Capital shares outstanding:
Class A		7,247
Class B		1,038
Class C		1,133
Class Y		196
Capital shares authorized		350,000

See Notes to Financial Statements.

Statement of Operations
      IVY MID CAP GROWTH FUND
      For the Six Months Ended September 30, 2005
      (In Thousands)


INVESTMENT LOSS
Income (Note 1B):
Dividends	$	271
Interest and amortization		77

Total income		348

Expenses (Note 2):
Investment management fee		420
Shareholder servicing:
Class A		132
Class B		37
Class C		23
Class Y		2
Service fee:
Class A		82
Class B		13
Class C		15
Class Y		3
Distribution fee:
Class A		11
Class B		40
Class C		45
Accounting services fee		27
Audit fees		16
Custodian fees		4
Legal fees		1
Other		50

Total		921
Less expenses in excess of voluntary limit (Note 2)		(10	)

Total expenses		911

Net investment loss		(563	)

REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		1,918
Realized net loss on purchased options		(21	)
Realized net gain on written options		118

Realized net gain on investments		2,015

Unrealized appreciation in value of securities during the period		9,861
Unrealized appreciation in value of written options during the period		49

Unrealized appreciation in value of investments during the period		9,910

Net gain on investments		11,925

Net increase in net assets resulting from operations	$	11,362

See Notes to Financial Statements.

Statement of Changes in Net Assets
      IVY MID CAP GROWTH FUND
      (In Thousands)


	For the six months ended September 30,				For the fiscal year ended March 31,
	2005				2005

INCREASE IN NET ASSETS
Operations:
Net investment loss		$	(563	)		$	(989	)
Realized net gain on investments			2,015				2,202
Unrealized appreciation			9,910				6,472

Net increase in net assets resulting from operations			11,362				7,685

Distributions to shareholders from (Note 1F): ⁽¹⁾
Net investment income:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)
Realized gains on investment transactions:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)

			(-	)			(-	)

Capital share transactions (Note 5)			3,338				11,632

Total increase			14,700				19,317
NET ASSETS
Beginning of period			91,947				72,630

End of period		$	106,647			$	91,947

Undistributed net investment loss		$	(570	)		$	(7	)

(1)See "Financial Highlights" on pages 118 - 121.

See Notes to Financial Statements.

Financial Highlights
      IVY MID CAP GROWTH FUND
      Class A Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,												For the period from 6-30-00 ⁽¹⁾to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	9.99		$	9.09		$	6.67		$	8.91		$	9.11		$	10.00

Income (loss) from investment operations:
Net investment income (loss)			(0.05	)	(0.09		)	(0.08		)	(0.05		)		0.02			0.11
Net realized and unrealized gain (loss) on investments			1.26			0.99			2.50		(2.19		)	(0.17		)	(0.65		)

Total from investment operations			1.21			0.90			2.42		(2.24		)	(0.15		)	(0.54		)

Less distributions from:
Net investment income			(0.00	)	(0.00		)	(0.00		)	(0.00		)*	(0.05		)	(0.06		)
Capital gains			(0.00	)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.29		)

Total distributions			(0.00	)	(0.00		)	(0.00		)	(0.00		)*	(0.05		)	(0.35		)

Net asset value, end of period		$	11.20		$	9.99		$	9.09		$	6.67		$	8.91		$	9.11

Total return ⁽²⁾			12.11	%		9.90	%	36.28		%	-25.13		%	-1.67		%	-5.88		%
Net assets, end of period (in millions)			$81			$68			$50			$14			$15			$11
Ratio of expenses to average net assets including voluntary expense waiver ⁽³⁾			1.65	% ⁽⁴⁾		1.65	%		1.84	%		1.17	%		1.17	%		1.01	% ⁽⁴⁾
Ratio of net investment income (loss) to average net assets including voluntary expense waiver ⁽³⁾			-0.94	% ⁽⁴⁾	-0.95		%	-1.20		%	-0.49		%		0.34	%		1.85	% ⁽⁴⁾
Ratio of expenses to average net assets excluding voluntary expense waiver ⁽³⁾			1.66	% ⁽⁴⁾		1.70	%		1.89	%		2.02	%		1.84	%		1.65	% ⁽⁴⁾
Ratio of net investment income (loss) to average net assets excluding voluntary expense waiver ⁽³⁾			-0.95	% ⁽⁴⁾	-1.00		%	-1.25		%	-1.34		%	-0.33		%		1.21	% ⁽⁴⁾
Portfolio turnover rate			10	%		25	%		24	%		36	%		39	%		110	%

*Not shown due to rounding.
(1)Commencement of operations of the class.
(2)Total return calculated without taking into account the sales load deducted on an initial purchase.
(3)See Note 2.
(4)Annualized.

See Notes to Financial Statements.

Financial Highlights
      IVY MID CAP GROWTH FUND
      Class B Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,												For the period from 7-6-00 ⁽¹⁾ to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	9.50		$	8.75		$	6.49		$	8.81		$	9.07		$	10.01

Income (loss) from investment operations:
Net investment income (loss)			(0.12	)	(0.23		)	(0.17		)	(0.14		)	(0.09		)		0.02
Net realized and unrealized gain (loss) on investments			1.22			0.98			2.43		(2.18		)	(0.17		)		(0.66	)

Total from investment operations			1.10			0.75			2.26		(2.32		)	(0.26		)		(0.64	)

Less distributions from:
Net investment income			(0.00	)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.01	)
Capital gains			(0.00	)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.29	)

Total distributions			(0.00	)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.30	)

Net asset value, end of period		$	10.60		$	9.50		$	8.75		$	6.49		$	8.81		$	9.07

Total return		11.58		%		8.57	%	34.82		%	-26.33		%	-2.87		%	-6.85		%
Net assets, end of period (in millions)			$11			$11			$12			$2			$2			$2
Ratio of expenses to average net assets including voluntary expense waiver ⁽²⁾			2.76	% ⁽³⁾		2.81	%		3.04	%		2.73	%		2.49	%		2.40	% ⁽³⁾
Ratio of net investment income (loss) to average net assets including voluntary expense waiver ⁽²⁾			-2.06	% ⁽³⁾	-2.12		%	-2.37		%	-2.05		%	-0.95		%		0.44	% ⁽³⁾
Ratio of expenses to average net assets excluding voluntary expense waiver ⁽²⁾			-			-			3.09	%		3.58	%		3.90	%		3.93	% ⁽³⁾
Ratio of net investment loss to average net assets excluding voluntary expense waiver ⁽²⁾			-			-		-2.43		%	-2.90		%	-2.37		%	-1.09		% ⁽³⁾
Portfolio turnover rate			10	%		25	%		24	%		36	%		39	%		110	%

(1)Commencement of operations of the class.
(2)See Note 2.
(3)Annualized.

See Notes to Financial Statements.

Financial Highlights
      IVY MID CAP GROWTH FUND
      Class C Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,												For the period from 7-3-00 ⁽¹⁾ to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	9.67		$	8.86		$	6.56		$	8.85		$	9.08		$	10.00

Income (loss) from investment operations:
Net investment income (loss)			(0.09	)	(0.15		)	(0.13		)	(0.10		)	(0.05		)		0.04
Net realized and unrealized gain (loss) on investments			1.23			0.96			2.43		(2.19		)	(0.18		)		(0.66	)

Total from investment operations			1.14			0.81			2.30		(2.29		)	(0.23		)		(0.62	)

Less distributions from:
Net investment income			(0.00	)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.01	)
Capital gains			(0.00	)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.29	)

Total distributions			(0.00	)	(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.30	)

Net asset value, end of period		$	10.81		$	9.67		$	8.86		$	6.56		$	8.85		$	9.08

Total return			11.79	%		9.14	%	35.06		%	-25.88		%	-2.53		%	-6.58		%
Net assets, end of period (in millions)			$13			$11			$10			$3			$4			$4
Ratio of expenses to average net assets including voluntary expense waiver ⁽²⁾			2.35	% ⁽³⁾		2.35	%		2.59	%		2.18	%		2.10	%		1.99	% ⁽³⁾
Ratio of net investment income (loss) to average net assets including voluntary expense waiver⁽²⁾			-1.65	% ⁽³⁾	-1.66		%	-1.98		%	-1.50		%	-0.55		%		0.84	% ⁽³⁾
Ratio of expenses to average net assets excluding voluntary expense waiver ⁽²⁾			2.44	% ⁽³⁾		2.46	%		2.64	%		3.03	%		3.30	%		3.26	% ⁽³⁾
Ratio of net investment loss to average net assets excluding voluntary expense waiver ⁽²⁾			-1.74	% ⁽³⁾	-1.77		%	-2.03		%	-2.35		%	-1.74		%		-0.43	% ⁽³⁾
Portfolio turnover rate			10	%		25	%		24	%		36	%		39	%		110	%

(1)Commencement of operations of the class.
(2)See Note 2.
(3)Annualized.

See Notes to Financial Statements.

Financial Highlights
      IVY MID CAP GROWTH FUND
      Class Y Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,												For the period from 7-10-00 ⁽¹⁾ to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	10.04		$	9.09		$	6.67		$	8.91		$	9.11		$	10.23

Income (loss) from investment operations:
Net investment income (loss)			(0.03	)		(0.06	)	(0.05		)	(0.01		)		0.00			0.11
Net realized and unrealized gain (loss) on investments			1.27			1.01			2.47		(2.20		)	(0.14		)	(0.88		)

Total from investment operations			1.24			0.95			2.42		(2.21		)	(0.14		)	(0.77		)

Less distributions from:
Net investment income			(0.00	)		(0.00	)	(0.00		)	(0.03		)	(0.06		)	(0.06		)
Capital gains			(0.00	)		(0.00	)	(0.00		)	(0.00		)	(0.00		)	(0.29		)

Total distributions			(0.00	)		(0.00	)	(0.00		)	(0.03		)	(0.06		)	(0.35		)

Net asset value, end of period		$	11.28		$	10.04		$	9.09		$	6.67		$	8.91		$	9.11

Total return			12.35	%		10.45	%	36.28		%	-24.86		%	-1.52		%	-7.97		%
Net assets, end of period (in thousands)		$2,218			$1,961		$1,363				$329			$438				$184
Ratio of expenses to average net assets including voluntary expense waiver ⁽²⁾			1.25	% ⁽³⁾		1.25	%		1.72	%		0.86	%		0.83	%		1.03	% ⁽³⁾
Ratio of net investment income (loss) to average net assets including voluntary expense waiver ⁽²⁾			-0.55	% ⁽³⁾		-0.55	%	-0.91		%	-0.18		%		0.50	%		1.77	% ⁽³⁾
Ratio of expenses to average net assets excluding voluntary expense waiver ⁽²⁾			1.45	% ⁽³⁾		1.48	%		1.77	%		1.71	%		1.30	%		1.68	% ⁽³⁾
Ratio of net investment income (loss) to average net assets excluding voluntary expense waiver ⁽²⁾			-0.75	% ⁽³⁾		-0.78	%	-0.96		%	-1.03		%		0.03	%		1.11	% ⁽³⁾
Portfolio turnover rate			10	%		25	%		24	%		36	%		39	%		110	%

(1)Commencement of operations of the class.
(2)See Note 2.
(3)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY MONEY MARKET FUND
Portfolio Highlights

On September 30, 2005, Ivy Money Market Fund had net assets totaling $47,417,303.

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Corporate Obligations - Notes	$	38.38
Corporate Obligations - Commercial Paper	$	30.20
Municipal Obligations - Taxable	$	22.90
United States Government Agency Obligations and Cash and Cash Equivalents	$	6.41
Corporate Obligations - Certificates of Deposit	$	2.11


The Investments of Ivy Money Market Fund
September 30, 2005
CORPORATE OBLIGATIONS	Principal Amount in Thousands			Value


Certificates of Deposit - 2.11%
Banks
Citibank, N.A.,
3.77%, 11-22-05	$	1,000	$	1,000,000

Commercial Paper
Banks - 4.85%
Rabobank USA Financial Corp.,
3.3%, 10-20-05		600		598,955
Rabobank USA Financial Corp. (Rabobank Nederland),
3.88%, 10-3-05		1,700		1,699,634
				2,298,589
Consumer Electronics - 1.05%
Sony Global Treasury Services PLC,
3.67%, 10-21-05		500		498,980

Finance Companies - 11.56%
BP Capital Markets p.l.c.,
3.88%, 10-3-05		338		337,927
Ciesco, LLC,
3.6%, 10-7-05		2,000		1,998,800
PACCAR Financial Corp.,
3.49%, 1-19-06		353		349,236
Preferred Receivables Funding Corp.,
3.62%, 10-6-05		300		299,849
River Fuel Company #2, Inc. (Bank of New York (The)),
3.64%, 10-14-05		2,300		2,296,977
Vehicle Services of America Ltd. (Bank of America, N.A.),
3.72%, 10-13-05		200		199,752
				5,482,541
Food and Related - 4.37%
Golden Peanut Company LLC (Archer Daniels Midland Company),
3.9%, 2-22-06		600		590,640
McCormick & Co. Inc.,
3.27%, 11-15-05		700		697,139
Wm. Wrigley Jr. Company,
3.95%, 3-20-06		800		785,078
				2,072,857
Multiple Industry - 1.58%
General Electric Capital Corporation,
3.64%, 10-26-05		750		748,104

Security and Commodity Brokers - 1.84%
UBS Finance Delaware LLC (UBS AG):
3.3%, 10-3-05		525		524,904
3.8%, 12-23-05		350		346,934
				871,838
Utilities - Telephone - 4.95%
SBC Communications Inc.:
3.65%, 10-12-05		2,000		1,997,769
3.74%, 11-15-05		350		348,364
				2,346,133

Total Commercial Paper - 30.20%				14,319,042


Notes
Banks - 5.36%
Bank of New York Company Inc. (The),
2.2%, 5-12-06		850		842,254
Wells Fargo & Company:
3.75%, 10-3-05		500		500,000
3.75813%, 10-17-05		1,200		1,200,000
				2,542,254
Business Equipment and Services - 1.71%
Playworld Systems Incorporated, Taxable Variable Rate Demand/Fixed Rate Revenue Bonds, Series A of 1998 (Wachovia Bank, N.A.),
3.91%, 10-5-05		810		810,000

Computers - Main and Mini - 2.11%
International Business Machines Corporation,
3.6725%, 10-11-05		1,000		1,000,000

Electrical Equipment - 1.18%
Emerson Electric Co.,
6.3%, 11-1-05		560		561,311

Finance Companies - 8.72%
Caterpillar Financial Services Corp.:
2.65%, 1-30-06		1,200		1,196,171
2.35%, 9-15-06		500		491,392
Lowell Family, LLC, Variable Rate Taxable Demand Bonds (LaSalle Bank National Association),
3.88%, 10-6-05		250		250,000
P&W Holdings, LLC, Taxable Variable Rate Demand Bonds, Series 2005 (Wachovia Bank, N.A.),
3.84%, 10-6-05		395		395,000
Park Street Properties I, LLC, Taxable Variable Rate Demand Notes, Series 2004 (University of Wisconsin - Madison Projects), (U.S. Bank, National Association),
3.79%, 10-6-05		875		875,000
Unilever Capital Corporation,
6.875%, 11-1-05		925		927,912
				4,135,475
Health Care - Drugs - 1.27%
Lilly (Eli) and Company,
3.66313%, 10-3-05		600		600,000

Health Care - General - 1.58%
B & D Associates, LLP and Eye Associates of Boca Raton, P.A., Taxable Variable Rate Demand Bonds (B & D Associates Project), Series 2005 (Wachovia Bank, N.A.),
3.89%, 10-6-05		750		750,000

Hospital Supply and Management - 0.81%
Autumn House at Powder Mill, Inc., Taxable Variable Rate Demand Bonds, Series of 2003 (Suntrust Bank),
3.85%, 10-6-05		150		150,000
Meriter Management Services, Inc., Taxable Variable Rate Demand Notes, Series 1996 (U.S. Bank Milwaukee, N.A.),
3.8%, 10-5-05		235		235,000
				385,000
Household - General Products - 2.64%
Procter & Gamble Company (The),
3.78813%, 12-9-05		1,250		1,250,000

Multiple Industry - 5.61%
Heller Financial, Inc.,
6.375%, 3-15-06		900		912,160
The Salvation Army, Taxable Multi-Modal Revenue Bonds, Series 2005A (The Bank of New York),
3.82%, 10-6-05		1,750		1,750,000
				2,662,160
Restaurants - 1.16%
McDonald's Corporation,
4.488%, 3-7-06 (A)		550		552,056

Retail - General Merchandise - 5.11%
Service Oil, Inc., Taxable Variable Rate Demand Bonds (Service Oil, Inc.), Series 2002 (U.S. Bank, National Association),
3.93%, 10- 3-05		500		500,000
Wal-Mart Stores, Inc.,
5.586%, 6-1-06		1,900		1,922,475
				2,422,475
Trucking and Shipping - 1.12%
Volpe Family Partnership, L.P., Taxable Variable Rate Demand Revenue Bonds, Series of 2001 (Wachovia Bank, N.A.),
3.89%, 10-6-05		530		530,000

Total Notes - 38.38%				18,200,731


TOTAL CORPORATE OBLIGATIONS - 70.69%			$	33,519,773

(Cost: $33,519,773)


MUNICIPAL OBLIGATIONS - TAXABLE


California - 9.12%
California Pollution Control Financing Authority, Environmental Improvement Revenue Bonds (Air Products and Chemicals, Inc./Wilmington Facility), Taxable Series 1997A,
3.71%, 11-2-05	2,250		2,250,000
County of Sacramento, Taxable Pension Funding Bonds, Series 1995B (Bayerische Landesbank Girozentrale, New York Branch),
3.85%, 10-5-05	2,075		2,075,000
			4,325,000
Florida - 1.05%
University of South Florida Research Foundation, Incorporated, Variable Rate Demand Revenue Bonds (Interdisciplinary Research Building Project), Taxable Series 2004B (Bank of America, N.A.),
3.8%, 10-5-05	500		500,000

Maryland - 3.98%
Mayor and City Council of Baltimore (City of Baltimore, Maryland), General Obligation Bonds, Consolidated Public Improvement Refunding Bonds, Series 2003C (Variable Rate Demand/Taxable), (Financial Security Assurance Inc.),
3.84%, 10-6-05	1,885		1,885,000

New York - 2.51%
Nassau County Industrial Development Agency, Taxable Variable Rate Demand Revenue Bonds (57 Seaview Realty Associates, LLC 2004 Project), (Wachovia Bank, N.A.),
3.84%, 10-6-05	1,190		1,190,000

Washington - 3.09%
Washington State Housing Finance Commission:
Taxable Variable Rate Demand Multifamily Revenue Bonds:
Brittany Park Project, Series 1996B (U.S. Bank of Washington, National Association),
3.88%, 10-6-05	595		595,000
Columbia Heights Retirement Project, Series 2004 B (Wells Fargo Bank, N.A.),
3.87%, 10-3-05	380		380,000
Mill Pointe Apartments Project, Series 1999B (U. S. Bank, National Assocation),
3.93%, 10-3-05	225		225,000
Taxable Variable Rate Demand Nonprofit Revenue Bonds, Virginia Mason Research Center Project, Series 1997B (U.S. Bank, National Association),
3.89%, 10-6-05	265		265,000
			1,465,000
Wisconsin - 3.15%
Town of Wood River, Wisconsin, Taxable Variable Rate Demand Industrial Development Revenue Bonds (Burnett Dairy Cooperative Project), Series 2001B (U. S. Bank, National Association),
3.93%, 10-3-05	1,495		1,495,000

TOTAL MUNICIPAL OBLIGATIONS - TAXABLE - 22.90%		$	10,860,000

(Cost: $10,860,000)


UNITED STATES GOVERNMENT AGENCY OBLIGATIONS


Federal Home Loan Bank,
3.6809%, 10-13-05	700		700,000
Federal National Mortgage Association,
4.05%, 8-14-06	750		750,000
Overseas Private Investment Corporation:
3.8%, 10-5-05	1,001		1,001,000
3.84%, 10-5-05	384		383,721

TOTAL UNITED STATES GOVERNMENT AGENCY OBLIGATIONS - 5.98%		$	2,834,721

(Cost: $2,834,721)

TOTAL INVESTMENT SECURITIES - 99.57%		$	47,214,494

(Cost: $47,214,494)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.43%			202,809


NET ASSETS - 100.00%		$	47,417,303


Notes to Schedule of Investments
(A)Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2005, the total value of this security amounted to 1.16% of net assets.
See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

Statement of Assets and Liabilities
      IVY MONEY MARKET FUND
      September 30, 2005
      (In Thousands, Except for Per Share Amounts)


ASSETS
Investment securities - at value (cost - $47,214) (Note 1)	$	47,214
Cash		72
Receivables:
Interest		194
Fund shares sold		150
Prepaid and other assets		36

Total assets		47,666

LIABILITIES
Payable to Fund shareholders		209
Accrued shareholder servicing (Note 2)		25
Dividends payable		12
Accrued accounting services fee (Note 2)		2
Accrued management fee (Note 2)		1
Accrued distribution and service fees (Note 2)		-	*

Total liabilities		249

Total net assets	$	47,417

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	474
Additional paid-in capital		46,943

Net assets applicable to outstanding units of capital	$	47,417

Net asset value per share (net assets divided by shares outstanding):
Class A	$1.00
Class B	$1.00
Class C	$1.00
Capital shares outstanding:
Class A		42,459
Class B		1,349
Class C		3,609
Capital shares authorized	350,000

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Operations
      IVY MONEY MARKET FUND
      For the Six Months Ended September 30, 2005
      (In Thousands)


INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	792

Expenses (Note 2):
Investment management fee		97
Shareholder servicing:
Class A		86
Class B		2
Class C		6
Registration fees		29
Distribution fee:
Class B		6
Class C		16
Accounting services fee		15
Audit fees		11
Service fee:
Class B		2
Class C		5
Custodian fees		4
Other		10

Total		289
Less expenses in excess of voluntary waiver for Class A (Note 2)		(37	)

Total expenses		252

Net investment income		540

Net increase in net assets resulting from operations	$	540

See Notes to Financial Statements.

Statement of Changes in Net Assets
      IVY MONEY MARKET FUND
      (In Thousands)


				For the fiscal year ended March 31,
		2005			2005

INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	540		$	345

Net increase in net assets resulting from operations		540			345

Distributions to shareholders from net investment income (Note 1F): ⁽¹⁾
Class A		(500	)		(337	)
Class B		(11	)		(2	)
Class C		(29	)		(6	)

		(540	)		(345	)

Capital share transactions (Note 5)		1,816			(6,679	)

Total increase (decrease)		1,816			(6,679	)
NET ASSETS
Beginning of period		45,601			52,280

End of period	$	47,417		$	45,601

Undistributed net investment income	$	-		$	-

(1)See "Financial Highlights" on pages 132 - 134.

See Notes to Financial Statements.

Financial Highlights
      IVY MONEY MARKET FUND
      Class A Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended			For the fiscal year ended March 31,								For the period from 6-30-00 ⁽¹⁾ to
	9-30-05			2005		2004		2003		2002		3-31-01

Net asset value, beginning of period		$	1.00	$	1.00	$	1.00	$	1.00	$	1.00	$	1.00

Net investment income			0.0120		0.0083		0.0061		0.0124		0.0259		0.0413
Less dividends declared		(	0.0120)	(	0.0083)	(	0.0061)	(	0.0124)	(	0.0259)	(	0.0413)

Net asset value, end of period		$	1.00	$	1.00	$	1.00	$	1.00	$	1.00	$	1.00

Total return			1.19%		0.82%		0.62%		1.25%		2.70%		4.11%
Net assets, end of period (in millions)		$	42	$	39	$	45	$	10	$	5	$	5
Ratio of expenses to average net assets including voluntary expense waiver			0.92% ⁽²⁾		0.89%		0.67%		0.52%		0.81%		0.92% ⁽²⁾
Ratio of net investment income to average net assets including voluntary expense waiver			2.37% ⁽²⁾		0.81%		0.48%		1.26%		2.60%		5.49% ⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			1.10% ⁽²⁾		1.20%		0.87%		0.92%		1.03%		1.18% ⁽²⁾
Ratio of net investment income to average net assets excluding voluntary expense waiver			2.19% ⁽²⁾		0.50%		0.28%		0.86%		2.38%		5.23% ⁽²⁾

(1)Commencement of operations of the class.
(2)Annualized.

See Notes to Financial Statements.

Financial Highlights
      IVY MONEY MARKET FUND
      Class B Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,										For the period from 7-12-00 ⁽¹⁾ to
	9-30-05				2005			2004			2003		2002		3-31-01

Net asset value, beginning of period		$	1.00		$	1.00		$	1.00		$	1.00	$	1.00	$	1.00

Net investment income			0.0070			0.0014			0.0002			0.0015		0.0147		0.0299
Less dividends declared		(	0.0070)		(	0.0014)		(	0.0002)		(	0.0015)	(	0.0147)	(	0.0299)

Net asset value, end of period		$	1.00		$	1.00		$	1.00		$	1.00	$	1.00	$	1.00

Total return			0.68%			0.14%			0.02%			0.16%		1.55%		2.97%
Net assets, end of period (in thousands)	$1,349			$1,396			$1,225			$1,188			$578		$431
Ratio of expenses to average net assets including voluntary expense waiver			1.91% ⁽²⁾			1.57%			1.14%			1.59%		1.88%		2.29% ⁽²⁾
Ratio of net investment income to average net assets including voluntary expense waiver			1.35% ⁽²⁾			0.12%			0.02%			0.14%		1.33%		4.05% ⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			NA			1.95%			1.34%			2.06%		2.39%		2.94% ⁽²⁾
Ratio of net investment income (loss) to average net assets excluding voluntary expense waiver			NA			-0.26%			-0.18%			-0.33%		0.82%		3.41% ⁽²⁾

(1)Commencement of operations of the class.
(2)Annualized.

See Notes to Financial Statements.

Financial Highlights
      IVY MONEY MARKET FUND
      Class C Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended			For the fiscal year ended March 31,								For the period from 7-3-00 ⁽¹⁾ to
	9-30-05			2005		2004		2003		2002		3-31-01

Net asset value, beginning of period		$	1.00	$	1.00	$	1.00	$	1.00	$	1.00	$	1.00

Net investment income			0.0069		0.0013		0.0002		0.0019		0.0157		0.0332
Less dividends declared		(	0.0069)	(	0.0013)	(	0.0002)	(	0.0019)	(	0.0157)	(	0.0332)

Net asset value, end of period		$	1.00	$	1.00	$	1.00	$	1.00	$	1.00	$	1.00

Total return			0.68%		0.12%		0.02%		0.20%		1.63%		3.32%
Net assets, end of period (in millions)		$	4	$	5	$	6	$	10	$	7	$	10
Ratio of expenses to average net assets including voluntary expense waiver			1.92% ⁽²⁾		1.58%		1.16%		1.56%		1.81%		1.98% ⁽²⁾
Ratio of net investment income to average net assets including voluntary expense waiver			1.32% ⁽²⁾		0.12%		0.03%		0.18%		1.58%		4.34% ⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			NA		1.99%		1.35%		1.99%		2.31%		2.54% ⁽²⁾
Ratio of net investment income (loss) to average net assets excluding voluntary expense waiver			NA		-0.29%		-0.17%		-0.25%		1.08%		3.78% ⁽²⁾

(1)Commencement of operations of the class.
(2)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY MUNICIPAL BOND FUND
Portfolio Highlights

On September 30, 2005, Ivy Municipal Bond Fund had net assets totaling $24,531,644 invested in a diversified portfolio.

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Prerefunded ETM Bonds	$	24.78
State, County and City General Obligation Bonds	$	14.66
Education Revenue Bonds	$	12.62
Other Municipal Bonds	$	7.73
Housing Revenue Bonds	$	7.46
Airport Revenue Bonds	$	6.12
Special Tax Bonds	$	5.74
Public Power Revenue Bonds	$	5.34
Transportation Revenue Bonds	$	5.05
Hospital Revenue Bonds	$	3.95
Cash and Cash Equivalents	$	3.36
School General Obligation Bonds	$	3.19

On September 30, 2005, the breakdown of municipal bonds (by ratings) held by the Fund, including cash and cash equivalents, was as follows:


AAA	54.23	%
AA	12.47	%
A..	6.88	%
BBB	8.70	%
Non-rated	14.36	%
Cash and Cash Equivalents	3.36	%

Ratings reflected in the wheel are taken from the following sources in order of preference: Standard & Poor's and Moody's.

2005 Tax Year Taxable Equivalent Yields ⁽¹⁾
If your Taxable Income is:								Your Marginal Tax		Equivalent Tax Free Yields
	Joint Return				Single Return			Bracket Is		3%	4%	5%	6%

$	0	-	14,600	$	0	-	7,300		10%	3.33%	4.44%	5.56%	6.67%
$	14,601	-	59,400	$	7,301	-	29,700		15%	3.53%	4.71%	5.88%	7.06%
$	59,401	-	119,950	$	29,701	-	71,950		25%	4.00%	5.33%	6.67%	8.00%
$	119,951	-	182,800	$	71,951	-	150,150		28%	4.17%	5.56%	6.94%	8.33%
$	182,801	-	326,450	$	150,151	-	326,450		33%	4.48%	5.97%	7.46%	8.96%
$	326,451 and above			$	326,451 and above				35%	4.62%	6.15%	7.69%	9.23%

(1)Table is for illustration only and does not represent the actual performance of Ivy Municipal Bond Fund.


The Investments of Ivy Municipal Bond Fund
September 30, 2005
MUNICIPAL BONDS	Principal Amount in Thousands			Value


Arizona - 1.81%
City of Bullhead City, Arizona, Bullhead Parkway Improvement District, Improvement Bonds,
6.1%, 1-1-13	$	250	$	251,045
The Industrial Development Authority of the City of Phoenix, Arizona, Single Family Mortgage Revenue Bonds, Series 2002-1A,
6.2%, 3-1-34		185		192,393
				443,438
California - 7.51%
San Mateo County Community College District (County of San Mateo, California), 2002 General Obligation Bonds (Election of 2001), Series A (Current Interest Bonds),
5.375%, 9-1-15		500		556,730
State of California, Various Purpose General Obligation Bonds,
5.0%, 2-1-22		495		518,646
Trustees of the California State University Systemwide Revenue Bonds, Series 2002A,
5.5%, 11-1-15		250		278,427
Moreno Valley Unified School District, General Obligation Bonds, 2004 Election, Series A (Riverside County, California),
5.25%, 8-1-22		240		260,062
Riverside Community College District, Riverside County, California, Election of 2004, General Obligation Bonds, Series 2004A,
5.5%, 8-1-29		200		228,006
				1,841,871
Colorado - 4.32%
City of Aspen, Colorado, Sales Tax Revenue Bonds, Series 1999,
5.25%, 11-1-15		500		537,055
El Paso County School District No. 12 - Cheyenne Mountain, El Paso County, Colorado, General Obligation Refunding Bonds, Series 2002,
0.0%, 9-15-12		685		521,353
				1,058,408
Delaware - 0.88%
Delaware State Housing Authority, Senior Single Family Mortgage Revenue Bonds, 2005 Series A,
5.8%, 7-1-35		200		215,276

Florida - 3.37%
School District of Hillsborough County, Florida, Sales Tax Revenue Bonds, Series 2002,
5.375%, 10-1-13		500		553,670
City of Jacksonville, Florida, Better Jacksonville Sales Tax Revenue Bonds, Series 2003,
5.25%, 10-1-19		250		273,872
				827,542
Georgia - 0.94%
Hospital Authority of Cobb County (Georgia), Revenue Anticipation Refunding and Improvement Certificates, Series 2003,
5.25%, 4-1-20		210		229,454

Illinois - 8.10%
Village of Bedford Park, Cook County, Illinois, Water Revenue Bonds, Series 2000A,
6.0%, 12-15-12		955		1,066,764
Bloomington-Normal Airport Authority of McLean County, Illinois, Central Illinois Regional Airport, Passenger Facility Charge Revenue Bonds, Series 2001,
6.05%, 12-15-19		645		649,889
City of Chicago, General Obligation Bonds, Project and Refunding, Series 2004A,
5.25%, 1-1-21		250		271,005
				1,987,658
Indiana - 8.20%
New Albany-Floyd County School Building Corporation, First Mortgage Bonds, Series 2002 (Floyd County, Indiana),
5.75%, 7-15-17		675		765,025
Ball State University Board of Trustees, Ball State University Student Fee Bonds, Series K,
5.75%, 7-1-18		500		551,045
East Chicago Elementary School Building Corporation (Lake County, Indiana), First Mortgage Bonds, Series 1993A,
5.5%, 1-15-16		355		358,028
Dyer (Indiana) Redevelopment Authority, Economic Development Lease Rental Bonds, Series 1999,
6.5%, 1-15-24		300		337,608
				2,011,706
Kansas - 4.71%
Sedgwick County, Kansas and Shawnee County, Kansas, Single Family Mortgage Revenue Bonds (Mortgage-Backed Securities Program):
2002 Series A-5,
5.55%, 12-1-33		500		532,515
2003 Series A-2,
5.65%, 6-1-35		335		356,396
2001 Series A-1 (AMT),
6.3%, 12-1-32		255		267,033
				1,155,944
Louisiana - 4.14%
State of Louisiana, Gasoline and Fuels Tax Revenue Bonds:
2002 Series A,
5.25%, 6-1-13		500		539,510
2005 Series A,
5.0%, 5-1-26		200		209,604
Louisiana Local Government Environmental Facilities and Community Development Authority, Mortgage Revenue Bonds, Series 2004A (GNMA Collateralized - Cypress Apartments Project),
5.5%, 4-20-38		250		266,613
				1,015,727
Maryland - 2.20%
Maryland Transportation Authority, Airport Parking Revenue Bonds, Series 2002B, Baltimore/Washington International Airport Projects (Qualified Airport Bonds - AMT),
5.375%, 3-1-15		500		539,725

Massachusetts - 2.40%
Massachusetts Bay Transportation Authority, Assessment Bonds:
2004 Series A,
5.25%, 7-1-20		200		222,482
2005 Series A,
5.0%, 7-1-31		150		157,178
Massachusetts School Building Authority, Dedicated Sales Tax Bonds, 2005 Series A,
5.0%, 8-15-30		200		209,996
				589,656
Michigan - 0.88%
City of Detroit, Michigan, General Obligation Bonds (Unlimited Tax), Series 2004-A(1),
5.25%, 4-1-23		200		215,012

Minnesota - 5.13%
City of Perham, Minnesota, General Obligation Disposal System Revenue Bonds, Series 2001,
6.0%, 5-1-22		500		531,015
City of Victoria, Minnesota, Private School Facility Revenue Bonds (Holy Family Catholic High School Project), Series 1999A,
5.6%, 9-1-19		400		403,880
City of Minneapolis, Minnesota, General Obligation Convention Center Bonds, Series 2002,
5.0%, 12-1-10		300		323,688
				1,258,583
Missouri - 5.41%
The City of St. Louis, Missouri, Airport Revenue Bonds, Series 2001A (Airport Development Program):
5.0%, 7-1-11		290		311,643
5.0%, 7-1-11		210		227,602
City of Kearney, Missouri, General Obligation Bonds, Series 2001,
5.5%, 3-1-16		350		380,419
The Industrial Development Authority of the City of Kansas City, Missouri, Revenue Bonds, Series 2004 (Plaza Library Project),
5.9%, 3-1-24		200		204,102
City of Belton, Missouri, Tax Increment Revenue Bonds (Belton Town Centre Project), Series 2004,
6.25%, 3-1-24		200		203,514
				1,327,280
Nebraska - 1.69%
Nebraska Higher Education Loan Program, Inc., Senior Subordinate Bonds, 1993-2, Series A-5A,
6.2%, 6-1-13		400		415,216

New Jersey - 2.86%
New Jersey Economic Development Authority, School Facilities Construction Bonds:
2004 Series I,
5.25%, 9-1-24		250		277,560
2005 Series 0,
5.125%, 3-1-30		250		262,255
Tobacco Settlement Financing Corporation, Tobacco Settlement Asset-Backed Bonds, Series 2002,
5.5%, 6-1-11		150		160,340
				700,155
New York - 10.99%
The City of New York, General Obligation Bonds:
Fiscal 2003 Series A Current Interest Bonds,
5.5%, 8-1-10		500		543,760
Fiscal 2004 Series E,
5.25%, 8-1-09		250		266,620
The Port Authority of New York and New Jersey, Consolidated Bonds, One Hundred Twenty-Seventh Series,
5.5%, 12-15-14		500		545,010
New York State Thruway Authority, State Personal Income Tax Revenue Bonds (Transportation), Series 2002A,
5.25%, 3-15-10		500		537,635
New York City, Municipal Water Finance Authority, Water and Sewer System Revenue Bonds, Fiscal 2003, Series D,
5.0%, 6-15-09		500		532,900
Dormitory Authority of the State of New York, Third General Resolution Revenue Bonds (State University Educational Facilities Issue), Series 2002B,
5.25%, 11-15-23		250		270,400
				2,696,325
Oklahoma - 1.58%
Tulsa Public Facilities Authority (Oklahoma), Assembly Center Lease Payment Revenue Bonds, Refunding Series 1985,
6.6%, 7-1-14		335		388,489

Pennsylvania - 3.62%
The School District of Philadelphia, Pennsylvania, General Obligation Bonds, Series A of 2002, Prerefunded 2-1-12,
5.5%, 2-1-18		500		555,350
Schuylkill County Industrial Development Authority, Variable Rate Demand Revenue Bonds (Pine Grove Landfill, Inc. Project), 1995 Series,
5.1%, 10-1-19		320		333,683
				889,033
Rhode Island - 3.02%
Rhode Island Health and Educational Building Corporation, Hospital Financing Revenue Bonds, St. Joseph Health Services of Rhode Island Issue, Series 1999,
5.4%, 10-1-09		725		740,356

South Carolina - 2.18%
South Carolina Public Service Authority, Santee Cooper, Revenue Obligations, 2002 Refunding Series D,
5.0%, 1-1-10		500		535,795

Texas - 3.15%
Lufkin Health Facilities Development Corporation, Health System Revenue and Refunding Bonds (Memorial Health System of East Texas), Series 1995,
6.875%, 2-15-26		480		495,984
Pflugerville Independent School District (Travis County, Texas), Unlimited Tax School Building Bonds, Series 2001,
5.5%, 8-15-19		250		277,955
				773,939
Virginia - 2.23%
City of Chesapeake, Virginia, General Obligation Public Improvement and Refunding Bonds, Series of 2001,
5.5%, 12-1-17		500		546,525

Washington - 3.15%
Energy Northwest:
Project No. 1 Refunding Electric Revenue Bonds, Series 2002-A,
5.75%, 7-1-16		500		556,510
Columbia Generating Station Electric Revenue Refunding Bonds, Series 2004-A,
5.25%, 7-1-10		200		216,240
				772,750
Wyoming - 2.17%
Wyoming Student Loan Corporation, Student Loan Revenue Refunding Bonds, Series 1999A (Non-AMT),
6.2%, 6-1-24		500		531,930

TOTAL MUNICIPAL BONDS - 96.64%			$	23,707,793

(Cost: $22,815,915)


SHORT-TERM SECURITY - 3.25%


Forest and Paper Products
Sonoco Products Co.,
3.94%, 10-3-05		798	$	797,825
(Cost $797,825)

TOTAL INVESTMENT SECURITIES - 99.89%			$	24,505,618

(Cost: $23,613,740)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.11%				26,026


NET ASSETS - 100.00%			$	24,531,644


Notes to Schedule of Investments
See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY MUNICIPAL BOND FUND
      September 30, 2005
      (In Thousands, Except for Per Share Amounts)


ASSETS
Investment securities - at value (cost - $23,614) (Notes 1 and 3)	$	24,506
Cash		-	*
Receivables:
Interest		317
Fund shares sold		11
Prepaid and other assets		25

Total assets		24,859

LIABILITIES
Payable for investment securities purchased		263
Payable to Fund shareholders		38
Dividends payable		7
Accrued shareholder servicing (Note 2)		6
Accrued accounting services fee (Note 2)		1
Accrued distribution and service fees (Note 2)		-	*
Other		12

Total liabilities		327

Total net assets	$	24,532

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	22
Additional paid-in capital		24,197
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		12
Accumulated undistributed net realized loss on investment transactions		(591	)
Net unrealized appreciation in value of investments		892

Net assets applicable to outstanding units of capital	$	24,532

Net asset value per share (net assets divided by shares outstanding):
Class A		$11.19
Class B		$11.19
Class C		$11.19
Class Y		$11.19
Capital shares outstanding:
Class A		572
Class B		126
Class C		1,491
Class Y		4
Capital shares authorized	200,000

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Operations
      IVY MUNICIPAL BOND FUND
      For the Six Months Ended September 30, 2005
      (In Thousands)


INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	572

Expenses (Note 2):
Distribution fee:
Class A		1
Class B		5
Class C		65
Investment management fee		65
Service fee:
Class A		6
Class B		2
Class C		22
Class Y		-	*
Registration fees		24
Shareholder servicing:
Class A		5
Class B		1
Class C		18
Class Y		-	*
Accounting services fee		10
Audit fees		10
Custodian fees		2
Other		2

Total		238
Less voluntary waiver of investment management fee (Note 2)		(42	)

Total expenses		196

Net investment income		376

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on investments		(7	)
Unrealized appreciation in value of investments during the period		131

Net gain on investments		124

Net increase in net assets resulting from operations	$	500

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Changes in Net Assets
      IVY MUNICIPAL BOND FUND
      (In Thousands)


	For the six months ended September 30,				For the fiscal year ended March 31,
	2005				2005

INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income		$	376			$	691
Realized net gain (loss) on investments			(7	)			55
Unrealized appreciation (depreciation)			131				(459	)

Net increase in net assets resulting from operations			500				287

Distributions to shareholders from (Note 1F): ⁽¹⁾
Net investment income:
Class A			(107	)			(168	)
Class B			(20	)			(26	)
Class C			(246	)			(506	)
Class Y			(1	)			(1	)
Realized gains on investment transactions:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)

			(374	)			(701	)

Capital share transactions (Note 5)			113				(623	)

Total increase (decrease)			239				(1,037	)
NET ASSETS
Beginning of period			24,293				25,330

End of period		$	24,532			$	24,293

Undistributed net investment income		$	12			$	10

(1)See "Financial Highlights" on pages 147 - 150.

See Notes to Financial Statements.

Financial Highlights
      IVY MUNICIPAL BOND FUND
      Class A Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,												For the period from 9-15-00⁽¹⁾ to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	11.13		$	11.31		$	11.10		$	10.61		$	10.52		$	10.33

Income (loss) from investment operations:
Net investment income			0.21			0.38			0.37			0.42			0.47			0.26
Net realized and unrealized gain (loss) on investments			0.06			(0.17	)		0.21			0.49			0.09			0.19

Total from investment operations			0.27			0.21			0.58			0.91			0.56			0.45

Less distributions from:
Net investment income			(0.21	)		(0.39	)		(0.37	)		(0.42	)		(0.47	)		(0.26	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.21	)		(0.39	)		(0.37	)		(0.42	)		(0.47	)		(0.26	)

Net asset value, end of period		$	11.19		$	11.13		$	11.31		$	11.10		$	10.61		$	10.52

Total return⁽²⁾			2.40	%		1.89	%		5.36	%		8.71	%		5.38	%		4.32	%
Net assets, end of period (in millions)			$7			$5			$4			$3			$2			$1
Ratio of expenses to average net assets including voluntary expense waiver			0.98	%⁽³⁾		1.13	%		1.25	%		1.15	%		1.17	%		1.21	%⁽³⁾
Ratio of net investment income to average net assets including voluntary expense waiver			3.65	%⁽³⁾		3.42	%		3.35	%		3.79	%		4.37	%		4.69	%⁽³⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			1.32	%⁽³⁾		1.39	%		-			-			-			-
Ratio of net investment income to average net assets excluding voluntary expense waiver			3.31	%⁽³⁾		3.16	%		-			-			-			-
Portfolio turnover rate			9	%		17	%		11	%		40	%		36	%		35	%⁽⁴⁾

See Notes to Financial Statements.

Financial Highlights
      IVY MUNICIPAL BOND FUND
      Class B Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,												For the period from 8-8-00⁽¹⁾ to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	11.13		$	11.31		$	11.10		$	10.61		$	10.52		$	10.26

Income (loss) from investment operations:
Net investment income			0.16			0.30			0.28			0.33			0.32			0.22
Net realized and unrealized gain (loss) on investments			0.06			(0.18	)		0.21			0.49			0.09			0.26

Total from investment operations			0.22			0.12			0.49			0.82			0.41			0.48

Less distributions from:
Net investment income			(0.16	)		(0.30	)		(0.28	)		(0.33	)		(0.32	)		(0.22	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.16	)		(0.30	)		(0.28	)		(0.33	)		(0.32	)		(0.22	)

Net asset value, end of period		$	11.19		$	11.13		$	11.31		$	11.10		$	10.61		$	10.52

Total return			2.01	%		1.09	%		4.50	%		7.81	%		3.97	%		4.66	%
Net assets, end of period (in thousands)		$1,405			$1,025				$863			$532			$120			$37
Ratio of expenses to average net assets including voluntary expense waiver			1.75	%⁽²⁾		1.90	%		2.06	%		1.96	%		2.44	%		2.82	%⁽²⁾
Ratio of net investment income to average net assets including voluntary expense waiver			2.85	%⁽²⁾		2.65	%		2.54	%		2.98	%		3.09	%		3.11	%⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			2.09	%⁽²⁾		2.16	%		-			-			-			-
Ratio of net investment income to average net assets excluding voluntary expense waiver			2.51	%⁽²⁾		2.39	%		-			-			-			-
Portfolio turnover rate			9	%		17	%		11	%		40	%		36	%		35	%⁽³⁾

(1)Commencement of operations of the class.
(2)Annualized.
(3)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements.

Financial Highlights
      IVY MUNICIPAL BOND FUND
      Class C Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,
	9-30-05				2005			2004			2003			2002			2001

Net asset value, beginning of period		$	11.13		$	11.31		$	11.10		$	10.61		$	10.52		$	10.11

Income (loss) from investment operations:
Net investment income			0.16			0.29			0.28			0.32			0.37			0.40
Net realized and unrealized gain (loss) on investments			0.06			(0.17	)		0.21			0.49			0.09			0.41

Total from investment operations			0.22			0.12			0.49			0.81			0.46			0.81

Less distributions from:
Net investment income			(0.16	)		(0.30	)		(0.28	)		(0.32	)		(0.37	)		(0.40	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.16	)		(0.30	)		(0.28	)		(0.32	)		(0.37	)		(0.40	)

Net asset value, end of period		$	11.19		$	11.13		$	11.31		$	11.10		$	10.61		$	10.52

Total return			1.99	%		1.04	%		4.45	%		7.75	%		4.40	%		8.22	%
Net assets, end of period (in millions)			$17			$18			$20			$25			$24			$26
Ratio of expenses to average net assets including voluntary expense waiver			1.78	%⁽¹⁾		1.93	%		2.10	%		2.03	%		2.13	%		2.13	%
Ratio of net investment income to average net assets including voluntary expense waiver			2.86	%⁽¹⁾		2.62	%		2.50	%		2.95	%		3.44	%		3.94	%
Ratio of expenses to average net assets excluding voluntary expense waiver			2.12	%⁽¹⁾		2.19	%		-			-			-			-
Ratio of net investment income to average net assets excluding voluntary expense waiver			2.52	%⁽¹⁾		2.36	%		-			-			-			-
Portfolio turnover rate			9	%		17	%		11	%		40	%		36	%		35	%

(1)Annualized.

See Notes to Financial Statements.

Financial Highlights
      IVY MUNICIPAL BOND FUND
      Class Y Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,
	9-30-05				2005			2004			2003			2002			2001

Net asset value, beginning of period		$	11.13		$	11.31		$	11.10		$	10.61		$	10.52		$	10.11

Income (loss) from investment operations:
Net investment income			0.21			0.37			0.35			0.40			0.44			0.47
Net realized and unrealized gain (loss) on investments			0.06			(0.18	)		0.21			0.49			0.09			0.41

Total from investment operations			0.27			0.19			0.56			0.89			0.53			0.88

Less distributions from:
Net investment income			(0.21	)		(0.37	)		(0.35	)		(0.40	)		(0.44	)		(0.47	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.21	)		(0.37	)		(0.35	)		(0.40	)		(0.44	)		(0.47	)

Net asset value, end of period		$	11.19		$	11.13		$	11.31		$	11.10		$	10.61		$	10.52

Total return			2.39	%		1.75	%		5.13	%		8.52	%		5.10	%		9.04	%
Net assets, end of period (in thousands)			$45			$44			$5			$4			$2			$2
Ratio of expenses to average net assets including voluntary expense waiver			0.99	%⁽¹⁾		1.22	%		1.44	%		1.33	%		1.44	%		1.47	%
Ratio of net investment income to average net assets including voluntary expense waiver			3.64	%⁽¹⁾		3.13	%		3.14	%		3.64	%		4.09	%		4.61	%
Ratio of expenses to average net assets excluding voluntary expense waiver			1.33	%⁽¹⁾		1.48	%		-			-			-			-
Ratio of net investment income to average net assets excluding voluntary expense waiver			3.30	%⁽¹⁾		2.87	%		-			-			-			-
Portfolio turnover rate			9	%		17	%		11	%		40	%		36	%		35	%

(1)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY SCIENCE AND TECHNOLOGY FUND
Portfolio Highlights

On September 30, 2005, Ivy Science and Technology Fund had net assets totaling $270,270,659 invested in a diversified portfolio of:

84.63%		Common Stocks
15.37%		Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Health Care Stocks	$	28.51
Technology Stocks	$	21.03
Multi-Industry Stocks	$	16.15
Cash and Cash Equivalents	$	15.37
Business Equipment and Services Stocks	$	13.42
Financial Services Stocks	$	3.01
Miscellaneous Stocks	$	2.51


The Investments of Ivy Science and Technology Fund
September 30, 2005
COMMON STOCKS	Shares		Value


Broadcasting - 2.02%
XM Satellite Radio Holdings Inc., Class A*	152,400	$	5,471,922

Business Equipment and Services - 9.50%
ATI Technologies Inc.*	211,900		2,952,827
CheckFree Corporation*	158,500		5,991,300
Euronet Worldwide, Inc.*	198,700		5,870,591
Global Cash Acess, Inc.*	89,500		1,261,950
Headwaters Incorporated*	143,700		5,374,380
Satyam Computer Services (Shanghai) Co., Ltd.	140,100		4,233,822
			25,684,870
Communications Equipment - 1.05%
Nokia Corporation, Series A, ADR	168,200		2,844,262

Computers - Peripherals - 10.89%
Microsoft Corporation	304,600		7,835,835
Oracle Corporation*	358,500		4,443,607
Red Hat, Inc.*	331,400		7,024,023
Symantec Corporation*	191,900		4,345,576
Symbol Technologies, Inc.	597,860		5,787,285
			29,436,326
Electronic Components - 7.71%
MediaTek Incorporation (A)*	28,550		269,274
Microchip Technology Incorporated	134,700		4,055,817
Micron Technology, Inc.*	427,300		5,683,090
Samsung Electronics Co., Ltd. (A)*	19,200		10,830,391
			20,838,572
Electronic Instruments - 1.38%
ASML Holding N.V., Ordinary Shares*	145,800		2,406,429
Mattson Technology, Inc.*	176,600		1,325,383
			3,731,812
Health Care - Drugs - 7.01%
Amgen Inc.*	67,600		5,384,340
Genzyme Corporation*	118,800		8,507,268
Neurocrine Biosciences, Inc.*	102,600		5,045,355
			18,936,963
Health Care - General - 1.94%
Advanced Medical Optics, Inc.*	138,000		5,237,100

Hospital Supply and Management - 19.56%
Cerner Corporation*	241,800		21,008,793
Triad Hospitals, Inc.*	192,500		8,714,475
UnitedHealth Group Incorporated	121,100		6,805,820
WellCare Health Plans, Inc.*	294,600		10,914,930
WellPoint, Inc.*	71,400		5,413,548
			52,857,566
Multiple Industry - 16.15%
Cogent, Inc.*	98,600		2,341,257
Google Inc., Class A*	25,100		7,934,612
PRA International*	102,200		3,093,594
PortalPlayer, Inc.*	148,200		4,055,493
Refco Inc.*	74,700		2,111,769
Research In Motion Limited*	177,450		12,116,286
Telvent GIT, S.A.*	123,200		1,350,272
VeriFone Holdings, Inc.*	289,500		5,821,845
Volterra Semiconductor Corporation*	196,400		2,411,792
WorldSpace, Inc., Class A*	169,700		2,412,286
			43,649,206
Security and Commodity Brokers - 3.01%
Chicago Mercantile Exchange Holdings Inc.	24,100		8,128,930

Timesharing and Software - 3.92%
Alliance Data Systems Corporation*	270,500		10,590,075

Utilities - Electric - 0.49%
Plug Power Inc.*	194,500		1,321,628

TOTAL COMMON STOCKS - 84.63%		$	228,729,232

(Cost: $184,856,655)


SHORT-TERM SECURITIES	Principal Amount in Thousands			Value


Certificate of Deposit - 1.85%
Banks
Wells Fargo Bank, N.A.,
3.74%, 10-18-05	$	5,000		5,000,000

Commercial Paper
Capital Equipment - 3.33%
Caterpillar Inc.,
3.74%, 10-14-05		5,000		4,993,247
Deere (John) Capital Corporation,
3.67%, 10-6-05		4,000		3,997,961
				8,991,208
Finance Companies - 0.74%
Preferred Receivables Funding Corp.,
3.75%, 10-19-05		2,000		1,996,250

Forest and Paper Products - 2.27%
Sonoco Products Co.,
3.94%, 10-3-05		6,152		6,150,653

Health Care - General - 1.85%
Baxter International Inc.,
3.87%, 10-3-05		5,000		4,998,925

Multiple Industry - 1.85%
Michigan Consolidated Gas Co.,
3.87%, 10-5-05		5,000		4,997,850

Utilities - Electric - 1.48%
Wisconsin Electric Power Co.,
3.88%, 10-3-05		4,000		3,999,138

Total Commercial Paper - 11.52%				31,134,024


TOTAL SHORT-TERM SECURITIES - 13.37%			$	36,134,024

(Cost: $36,134,024)

TOTAL INVESTMENT SECURITIES - 98.00%			$	264,863,256

(Cost: $220,990,679)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 2.00%				5,407,403


NET ASSETS - 100.00%			$	270,270,659


Notes to Schedule of Investments
*No dividends were paid during the preceding 12 months.
(A)Listed on an exchange outside the United States.
See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY SCIENCE AND TECHNOLOGY FUND
      September 30, 2005
      (In Thousands, Except for Per Share Amounts)


ASSETS
Investment securities - at value (cost - $220,991) (Notes 1 and 3)	$	264,863
Cash denominated in foreign currencies (cost - $2,799)		2,801
Receivables:
Investment securities sold		2,918
Fund shares sold		1,601
Dividends and interest		81
Prepaid and other assets		37

Total assets		272,301

LIABILITIES
Payable for investment securities purchased		1,112
Payable to Fund shareholders		516
Due to custodian		219
Accrued shareholder servicing (Note 2)		97
Accrued accounting services fee (Note 2)		8
Accrued management fee (Note 2)		6
Accrued distribution fee (Note 2)		3
Accrued service fee (Note 2)		2
Other		67

Total liabilities		2,030

Total net assets	$	270,271

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	112
Additional paid-in capital		244,456
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(1,697	)
Accumulated undistributed net realized loss on investment transactions		(16,474	)
Net unrealized appreciation in value of investments		43,874

Net assets applicable to outstanding units of capital	$	270,271

Net asset value per share (net assets divided by shares outstanding):
Class A		$24.45
Class B		$23.07
Class C		$23.43
Class Y		$25.19
Capital shares outstanding:
Class A		4,666
Class B		657
Class C		4,239
Class Y		1,655
Capital shares authorized		350,000

See Notes to Financial Statements.

Statement of Operations
      IVY SCIENCE AND TECHNOLOGY FUND
      For the Six Months Ended September 30, 2005
      (In Thousands)


INVESTMENT LOSS
Income (Note 1B):
Dividends (net of foreign withholding taxes of $29)	$	299
Interest and amortization		238

Total income		537

Expenses (Note 2):
Investment management fee		959
Shareholder servicing:
Class A		144
Class B		45
Class C		210
Class Y		29
Distribution fee:
Class A		9
Class B		51
Class C		350
Service fee:
Class A		97
Class B		17
Class C		116
Class Y		44
Accounting services fee		43
Audit fees		13
Legal fees		2
Custodian fees		1
Other		77

Total expenses		2,207

Net investment loss		(1,670	)

REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		12,908
Realized net loss on purchased options		(22	)
Realized net loss on foreign currency transactions		(5	)

Realized net gain on investments		12,881
Unrealized appreciation in value of investments during the period		18,377

Net gain on investments		31,258

Net increase in net assets resulting from operations	$	29,588

See Notes to Financial Statements.

Statement of Changes in Net Assets
      IVY SCIENCE AND TECHNOLOGY FUND
      (In Thousands)


	For the six months ended September 30,				For the fiscal year ended March 31,
	2005				2005

INCREASE IN NET ASSETS
Operations:
Net investment loss		$	(1,670	)	$	(2,655	)
Realized net gain on investments			12,881			14,718
Unrealized appreciation			18,377			1,708

Net increase in net assets resulting from operations			29,588			13,771

Distributions to shareholders from (Note 1F): ⁽¹⁾
Net investment income:
Class A			(-	)		(-	)
Class B			(-	)		(-	)
Class C			(-	)		(-	)
Class Y			(-	)		(-	)
Realized gains on investment transactions:
Class A			(-	)		(-	)
Class B			(-	)		(-	)
Class C			(-	)		(-	)
Class Y			(-	)		(-	)

			(-	)		(-	)

Capital share transactions (Note 5)			52,822			28,842

Total increase			82,410			42,613
NET ASSETS
Beginning of period			187,861			145,248

End of period		$	270,271		$	187,861

Undistributed net investment loss		$	(1,697	)	$	(22	)

(1)See "Financial Highlights" on pages 158 - 161.

See Notes to Financial Statements.

Financial Highlights
      IVY SCIENCE AND TECHNOLOGY FUND
      Class A Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,												For the period from 7-3-00⁽¹⁾to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	21.34		$	19.55		$	14.17		$	18.19		$	17.93		$	34.91

Income (loss) from investment operations:
Net investment income (loss)			(0.18	)		(0.28	)		(0.19	)		(0.32	)		(0.45	)		0.02
Net realized and unrealized gain (loss) on investments			3.29			2.07			5.57			(3.70	)		0.73			(9.35	)

Total from investment operations			3.11			1.79			5.38			(4.02	)		0.28			(9.33	)

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.02	)		(7.65	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.02	)		(7.65	)

Net asset value, end of period		$	24.45		$	21.34		$	19.55		$	14.17		$	18.19		$	17.93

Total return⁽²⁾			14.57	%		9.16	%		37.97	%	-22.10		%		1.56	%	-31.95		%
Net assets, end of period (in millions)			$114			$55			$36			$14			$12			$6
Ratio of expenses to average net assets			1.55	%⁽³⁾		1.70	%		1.80	%		1.79	%		1.75	%		1.70	%⁽³⁾
Ratio of net investment income (loss) to average net assets			-1.06	%⁽³⁾		-1.09	%		-1.35	%		-0.92	%		-0.76	%		0.26	%⁽³⁾
Portfolio turnover rate			76	%		106	%		114	%		74	%		91	%		111	%⁽⁴⁾

See Notes to Financial Statements.

Financial Highlights
      IVY SCIENCE AND TECHNOLOGY FUND
      Class B Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,												For the period from 7-3-00⁽¹⁾to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	20.24		$	18.77		$	13.77		$	17.88		$	17.80		$	34.91

Income (loss) from investment operations:
Net investment loss			(0.20	)		(0.42	)		(0.39	)		(0.34	)		(0.38	)		(0.06	)
Net realized and unrealized gain (loss) on investments			3.03			1.89			5.39			(3.77	)		0.48			(9.40	)

Total from investment operations			2.83			1.47			5.00			(4.11	)		0.10			(9.46	)

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.02	)		(7.65	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.02	)		(7.65	)

Net asset value, end of period		$	23.07		$	20.24		$	18.77		$	13.77		$	17.88		$	17.80

Total return			13.98	%		7.83	%		36.31	%	-22.99		%		0.56	%	-32.37		%
Net assets, end of period (in millions)			$15			$12			$11			$4			$4			$3
Ratio of expenses to average net assets			2.64	%⁽²⁾		2.90	%		3.06	%		3.00	%		2.75	%		2.53	%⁽²⁾
Ratio of net investment loss to average net assets			-2.18	%⁽²⁾		-2.31	%		-2.60	%		-2.12	%		-1.73	%		-0.55	%⁽²⁾
Portfolio turnover rate			76	%		106	%		114	%		74	%		91	%		111	%⁽³⁾

(1)Commencement of operations of the class.
(2)Annualized.
(3)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements.

Financial Highlights
      IVY SCIENCE AND TECHNOLOGY FUND
      Class C Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,
	9-30-05				2005			2004			2003			2002			2001

Net asset value, beginning of period		$	20.53		$	18.98		$	13.88		$	17.97		$	17.83		$	45.03

Income (loss) from investment operations:
Net investment loss			(0.22	)		(0.42	)		(0.38	)		(0.25	)		(0.24	)		(0.12	)
Net realized and unrealized gain (loss) on investments			3.12			1.97			5.48			(3.84	)		0.40		(19.43		)

Total from investment operations			2.90			1.55			5.10			(4.09	)		0.16		(19.55		)

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.02	)		(7.65	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.02	)		(7.65	)

Net asset value, end of period		$	23.43		$	20.53		$	18.98		$	13.88		$	17.97		$	17.83

Total return			14.13	%		8.17	%		36.74	%	-22.76		%		0.89	%	-47.49		%
Net assets, end of period (in millions)			$99			$88			$89			$70			$112			$134
Ratio of expenses to average net assets			2.42	%⁽¹⁾		2.58	%		2.66	%		2.67	%		2.45	%		2.27	%
Ratio of net investment loss to average net assets			-1.96	%⁽¹⁾		-2.00	%		-2.15	%		-1.77	%		-1.40	%		-0.44	%
Portfolio turnover rate			76	%		106	%		114	%		74	%		91	%		111	%

(1)Annualized.

See Notes to Financial Statements.

Financial Highlights
      IVY SCIENCE AND TECHNOLOGY FUND
      Class Y Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,
	9-30-05				2005			2004			2003			2002			2001

Net asset value, beginning of period		$	21.96		$	20.07		$	14.51		$	18.54		$	18.21		$	45.36

Income (loss) from investment operations:
Net investment loss			(0.17	)		(0.18	) ⁽¹⁾		(0.15	)		(0.26	)		(0.51	)		(0.01	)
Net realized and unrealized gain (loss) on investments			3.40			2.07	⁽¹⁾		5.71			(3.77	)		0.86		(19.49		)

Total from investment operations			3.23			1.89			5.56			(4.03	)		0.35		(19.50		)

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.02	)		(7.65	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.02	)		(7.65	)

Net asset value, end of period		$	25.19		$	21.96		$	20.07		$	14.51		$	18.54		$	18.21

Total return			14.71	%		9.42	%		38.32	%	-21.74		%		1.92	%	-47.00		%
Net assets, end of period (in millions)			$42			$33			$9			$3			$3			$1
Ratio of expenses to average net assets			1.37	% ⁽²⁾		1.45	%		1.45	%		1.41	%		1.39	%		1.35	%
Ratio of net investment income (loss) to average net assets			-0.89	% ⁽²⁾		-0.87	%		-1.03	%		-0.53	%		-0.43	%		0.47	%
Portfolio turnover rate			76	%		106	%		114	%		74	%		91	%		111	%

(1)Based on average weekly shares outstanding.
(2)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY SMALL CAP GROWTH FUND
Portfolio Highlights

On September 30, 2005, Ivy Small Cap Growth Fund had net assets totaling $590,901,486 invested in a diversified portfolio of:

91.20%		Common Stocks and Warrant
8.80%		Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Technology Stocks	$	23.10
Business Equipment and Services Stocks	$	19.62
Health Care Stocks	$	18.64
Cash and Cash Equivalents	$	8.80
Consumer Nondurables Stocks	$	6.42
Energy Stocks	$	5.72
Capital Goods Stocks	$	5.29
Miscellaneous Stocks	$	5.05
Retail Stocks	$	4.74
Financial Services Stocks	$	2.62


The Investments of Ivy Small Cap Growth Fund
September 30, 2005
COMMON STOCKS AND WARRANT	Shares		Value


Apparel - 3.27%
Oxford Industries, Inc.	241,700	$	10,905,504
Quiksilver, Inc.*	580,900		8,394,005
			19,299,509
Banks - 1.23%
City National Corporation	104,150		7,299,873

Business Equipment and Services - 11.97%
ATI Technologies Inc.*	505,000		7,037,175
CheckFree Corporation*	385,144		14,558,443
Headwaters Incorporated*	211,350		7,904,490
Jacobs Engineering Group Inc.*	102,900		6,935,460
Macrovision Corporation*	535,650		10,233,593
Resources Connection, Inc.*	539,302		15,976,822
Strayer Education, Inc.	85,800		8,075,925
			70,721,908
Capital Equipment - 4.07%
Chicago Bridge & Iron Company N.V., NY Shares	240,700		7,483,363
Cooper Cameron Corporation*	110,600		8,176,658
Shaw Group Inc. (The)*	340,300		8,391,798
			24,051,819
Communications Equipment - 6.26%
ADTRAN, Inc.	290,350		9,150,380
Andrew Corporation*	440,600		4,914,893
General Cable Corporation*	319,700		5,370,960
Plantronics, Inc.	361,100		11,125,491
Tekelec*	309,000		6,459,645
			37,021,369
Computers - Peripherals - 11.27%
Allscripts Healthcare Solutions, Inc.*	365,200		6,577,252
Avid Technology, Inc.*	316,800		13,126,608
Cognex Corporation	383,350		11,542,668
Epicor Software Corporation*	446,300		5,786,279
Kronos Incorporated*	197,750		8,813,718
Nautilus Group, Inc. (The)	459,600		10,143,372
Red Hat, Inc.*	426,100		9,031,190
WebSideStory, Inc.*	88,700		1,570,434
			66,591,521
Cosmetics and Toiletries - 1.41%
Nu Skin Enterprises, Inc., Class A	437,800		8,340,090

Electrical Equipment - 1.22%
Microsemi Corporation*	282,200		7,205,977

Electronic Components - 1.15%
FormFactor, Inc.*	298,700		6,807,373

Electronic Instruments - 4.42%
APW Ltd., Warrants (A)*	19		0
FLIR Systems, Inc.*	353,700		10,457,141
Trimble Navigation Limited*	176,200		5,931,773
WMS Industries Inc.*	346,500		9,747,045
			26,135,959
Finance Companies - 1.39%
Financial Federal Corporation	205,950		8,196,810

Food and Related - 1.74%
J.M. Smucker Company (The)	211,350		10,258,929

Health Care - Drugs - 4.11%
Angiotech Pharmaceuticals, Inc.*	482,350		6,750,488
Encysive Pharmaceuticals Inc.*	225,100		2,650,552
MGI PHARMA, INC.*	109,700		2,556,010
Martek Biosciences Corporation*	255,622		8,981,279
Neurocrine Biosciences, Inc.*	67,800		3,334,065
			24,272,394
Health Care - General - 8.31%
Advanced Neuromodulation Systems, Inc.*	115,900		5,500,034
American Medical Systems Holdings, Inc.*	333,200		6,697,320
Digene Corporation*	252,000		7,173,180
Hologic, Inc.*	172,200		9,945,411
OraSure Technologies, Inc.*	87,900		829,776
ResMed Inc.*	126,250		10,055,813
Schein (Henry), Inc.*	209,600		8,927,912
			49,129,446
Hospital Supply and Management - 6.22%
Advisory Board Company (The)*	140,335		7,302,332
Cerner Corporation*	123,200		10,704,232
PSS World Medical, Inc.*	334,500		4,448,850
VCA Antech, Inc.*	243,350		6,200,558
WellCare Health Plans, Inc.*	218,700		8,102,835
			36,758,807
Leisure Time Industry - 0.97%
THQ Inc.*	268,525		5,724,953

Multiple Industry - 1.59%
FoxHollow Technologies, Inc.*	197,300		9,387,534

Petroleum - Domestic - 1.87%
Western Gas Resources, Inc.	215,400		11,034,942

Petroleum - International - 1.97%
Newfield Exploration Company*	237,300		11,651,430

Petroleum - Services - 1.88%
Patterson-UTI Energy, Inc.	307,950		11,100,058

Publishing - 0.87%
Getty Images, Inc.*	59,844		5,148,978

Railroad - 1.62%
Kansas City Southern*	409,600		9,547,776

Restaurants - 1.32%
P.F. Chang's China Bistro, Inc.*	174,600		7,824,699

Retail - Specialty Stores - 3.42%
Guitar Center, Inc.*	117,800		6,503,149
O'Reilly Automotive, Inc.*	324,100		9,136,379
Tractor Supply Company*	100,300		4,576,188
			20,215,716
Timesharing and Software - 7.65%
CoStar Group, Inc.*	101,500		4,733,960
Digitas Inc.*	859,600		9,747,864
FactSet Research Systems, Inc.	394,525		13,903,061
MicroStrategy Incorporated, Class A*	118,868		8,354,637
Zebra Technologies Corporation, Class A*	216,200		8,441,529
			45,181,051

TOTAL COMMON STOCKS AND WARRANT - 91.20%		$	538,908,921

(Cost: $412,454,967)


SHORT-TERM SECURITIES	Principal Amount in Thousands


Certificate of Deposit - 0.85%
Banks
Wells Fargo Bank, N.A.,
3.74%, 10-18-05	$ 5,000			5,000,000

Commercial Paper
Capital Equipment - 0.51%
Caterpillar Inc.,
3.75%, 10-7-05		3,000		2,998,125

Finance Companies - 5.55%
BP Capital Markets p.l.c.,
3.88%, 10-3-05	13,266			13,263,141
PACCAR Financial Corp.,
3.72%, 10-11-05		5,000		4,994,833
Prudential Funding LLC,
3.7%, 10-13-05		5,000		4,993,833
River Fuel Company #2, Inc. (Bank of New York (The)),
3.64%, 10-14-05		4,550		4,544,019
USAA Capital Corp.,
3.75%, 10- 4-05		5,000		4,998,438
				32,794,264
Food and Related - 0.84%
Sara Lee Corporation,
3.85%, 10-12-05		5,000		4,994,118

Total Commercial Paper - 6.90%				40,786,507


TOTAL SHORT-TERM SECURITIES - 7.75%			$	45,786,507

(Cost: $45,786,507)

TOTAL INVESTMENT SECURITIES - 98.95%			$	584,695,428

(Cost: $458,241,474)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.05%				6,206,058


NET ASSETS - 100.00%			$	590,901,486


Notes to Schedule of Investments
*No dividends were paid during the preceding 12 months.
(A) Security valued in good faith under procedures established by the Board of Directors.
See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY SMALL CAP GROWTH FUND
      September 30, 2005
      (In Thousands, Except for Per Share Amounts)


ASSETS
Investment securities - at value (cost - $458,241) (Notes 1 and 3)	$	584,695
Receivables:
Investment securities sold		7,640
Fund shares sold		2,454
Dividends and interest		13
Prepaid and other assets		35

Total assets		594,837

LIABILITIES
Payable for investment securities purchased		2,448
Payable to Fund shareholders		1,139
Accrued shareholder servicing (Note 2)		158
Due to custodian		24
Accrued accounting services fee (Note 2)		14
Accrued management fee (Note 2)		14
Accrued distribution fee (Note 2)		7
Accrued service fee (Note 2)		4
Other		128

Total liabilities		3,936

Total net assets	$	590,901

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	426
Additional paid-in capital		468,902
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(3,923	)
Accumulated undistributed net realized loss on investment transactions		(958	)
Net unrealized appreciation in value of investments		126,454

Net assets applicable to outstanding units of capital	$	590,901

Net asset value per share (net assets divided by shares outstanding):
Class A		$13.94
Class B		$13.21
Class C		$13.39
Class Y		$15.10
Capital shares outstanding:
Class A		7,739
Class B		1,285
Class C		23,988
Class Y		9,596
Capital shares authorized		400,000

See Notes to Financial Statements.

Statement of Operations
      IVY SMALL CAP GROWTH FUND
      For the Six Months Ended September 30, 2005
      (In Thousands)


INVESTMENT LOSS
Income (Note 1B):
Dividends (net of foreign withholding taxes of $3)	$	773
Interest and amortization		624

Total income		1,397

Expenses (Note 2):
Investment management fee		2,345
Distribution fee:
Class A		11
Class B		60
Class C		1,191
Shareholder servicing:
Class A		144
Class B		41
Class C		433
Class Y		100
Service fee:
Class A		98
Class B		20
Class C		397
Class Y		164
Accounting services fee		76
Audit fees		17
Custodian fees		15
Legal fees		1
Other		136

Total expenses		5,249

Net investment loss		(3,852	)

REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		46,632
Unrealized appreciation in value of investments during the period		22,889

Net gain on investments		69,521

Net increase in net assets resulting from operations	$	65,669

See Notes to Financial Statements.

Statement of Changes in Net Assets
      IVY SMALL CAP GROWTH FUND
      (In Thousands)


	For the six months ended September 30,				For the fiscal year ended March 31,
	2005				2005

INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss		$	(3,852	)		$	(8,020	)
Realized net gain on investments			46,632				56,717
Unrealized appreciation (depreciation)			22,889				(12,102	)

Net increase in net assets resulting from operations			65,669				36,595

Distributions to shareholders from (Note 1F): ⁽¹⁾
Net investment income:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)
Realized gains on investment transactions:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)

			(-	)			(-	)

Capital share transactions (Note 5)			15,627				(89,990	)

Total increase (decrease)			81,296				(53,395	)
NET ASSETS
Beginning of period			509,605				563,000

End of period		$	590,901			$	509,605

Undistributed net investment loss		$	(3,923	)		$	(71	)

(1)See "Financial Highlights" on pages 170 - 173.

See Notes to Financial Statements.

Financial Highlights
      IVY SMALL CAP GROWTH FUND
      Class A Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,												For the period from 7-3-00⁽¹⁾to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	12.32		$	11.36		$	8.25		$	10.59		$	9.43		$	19.64

Income (loss) from investment operations:
Net investment loss			(0.12	)		(0.08	)		(0.08	)		(0.23	)		(0.59	)		(0.02	)
Net realized and unrealized gain (loss) on investments			1.74			1.04			3.19			(2.11	)		1.75			(4.74	)

Total from investment operations			1.62			0.96			3.11			(2.34	)		1.16			(4.76	)

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(5.45	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(5.45	)

Net asset value, end of period		$	13.94		$	12.32		$	11.36		$	8.25		$	10.59		$	9.43

Total return⁽²⁾			13.15	%		8.45	%		37.70	%	-22.10		%		12.30	%	-28.30		%
Net assets, end of period (in millions)			$108			$72			$92			$20			$16			$4
Ratio of expenses to average net assets			1.52	%⁽³⁾		1.54	%		1.48	%		1.54	%		1.39	%		1.49	%⁽³⁾
Ratio of net investment loss to average net assets			-1.02	%⁽³⁾		-1.14	%	-1.21		%	-1.22		%	-0.93		%	-0.39		%⁽³⁾
Portfolio turnover rate			35	%		83	%		91	%		31	%		29	%		48	%⁽⁴⁾

See Notes to Financial Statements.

Financial Highlights
      IVY SMALL CAP GROWTH FUND
      Class B Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,												For the period from 7-6-00⁽¹⁾to
	9-30-05				2005			2004			2003			2002			3-31-01

Net asset value, beginning of period		$	11.73		$	10.91		$	8.01		$	10.40		$	9.36		$	19.26

Income (loss) from investment operations:
Net investment loss			(0.12	)		(0.23	)		(0.20	)		(0.21	)		(0.26	)		(0.06	)
Net realized and unrealized gain (loss) on investments			1.60			1.05			3.10			(2.18	)		1.30			(4.39	)

Total from investment operations			1.48			0.82			2.90			(2.39	)		1.04			(4.45	)

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(5.45	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(5.45	)

Net asset value, end of period		$	13.21		$	11.73		$	10.91		$	8.01		$	10.40		$	9.36

Total return			12.62	%		7.52	%		36.21	%	-22.98		%		11.11	%	-27.29		%
Net assets, end of period (in millions)			$17			$15			$13			$7			$8			$5
Ratio of expenses to average net assets			2.47	%⁽²⁾		2.52	%		2.57	%		2.64	%		2.43	%		2.31	%⁽²⁾
Ratio of net investment loss to average net assets			-1.96	%⁽²⁾		-2.11	%		-2.29	%		-2.31	%		-1.94	%		-1.18	%⁽²⁾
Portfolio turnover rate			35	%		83	%		91	%		31	%		29	%		48	%⁽³⁾

(1)Commencement of operations of the class.
(2)Annualized.
(3)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements.

Financial Highlights
      IVY SMALL CAP GROWTH FUND⁽¹⁾
      Class C Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,
	9-30-05				2005			2004			2003			2002			2001

Net asset value, beginning of period		$	11.87		$	11.02		$	8.07		$	10.44		$	9.38		$	21.64

Income (loss) from investment operations:
Net investment loss			(0.13	)		(0.24	)		(0.21	)		(0.16	)		(0.16	)		(0.10	)
Net realized and unrealized gain (loss) on investments			1.65			1.09			3.16			(2.21	)		1.22			(6.71	)

Total from investment operations			1.52			0.85			2.95			(2.37	)		1.06			(6.81	)

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(5.45	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(5.45	)

Net asset value, end of period		$	13.39		$	11.87		$	11.02		$	8.07		$	10.44		$	9.38

Total return			12.81	%		7.71	%		36.56	%	-22.70		%		11.30	%	-35.17		%
Net assets, end of period (in millions)			$321			$308			$334			$273			$435			$459
Ratio of expenses to average net assets			2.21	%⁽²⁾		2.26	%		2.31	%		2.31	%		2.20	%		2.12	%
Ratio of net investment loss to average net assets			-1.71	%⁽²⁾		-1.85	%	-2.03		%		-1.98	%	-1.70		%		-0.81	%
Portfolio turnover rate			35	%		83	%		91	%		31	%		29	%		48	%

(1)Small Cap Growth Fund (formerly Growth Fund) changed its name effective June 30, 2000.
(2)Annualized.

See Notes to Financial Statements.

Financial Highlights
      IVY SMALL CAP GROWTH FUND⁽¹⁾
      Class Y Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended				For the fiscal year ended March 31,
	9-30-05				2005			2004			2003			2002			2001

Net asset value, beginning of period		$	13.33		$	12.26		$	8.89		$	11.39		$	10.14		$	22.65

Income (loss) from investment operations:
Net investment loss			(0.09	)		(0.09	)		(0.10	)		(0.11	)		(0.34	)		(0.20	)
Net realized and unrealized gain (loss) on investments			1.86			1.16			3.47			(2.39	)		1.59			(6.86	)

Total from investment operations			1.77			1.07			3.37			(2.50	)		1.25			(7.06	)

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(5.45	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(5.45	)

Net asset value, end of period		$	15.10		$	13.33		$	12.26		$	8.89		$	11.39		$	10.14

Total return			13.28	%		8.73	%		37.91	%	-21.95		%		12.33	%	-34.67		%
Net assets, end of period (in millions)			$145			$115			$124			$42			$48			$21
Ratio of expenses to average net assets			1.33	%⁽²⁾		1.36	%		1.35	%		1.33	%		1.31	%		1.30	%
Ratio of net investment loss to average net assets			-0.82	%⁽²⁾		-0.95	%	-1.09		%	-1.00		%	-0.83		%	-0.02		%
Portfolio turnover rate			35	%		83	%		91	%		31	%		29	%		48	%

(1)Small Cap Growth Fund (formerly Growth Fund) changed its name effective June 30, 2000.
(2)Annualized.

See Notes to Financial Statements.

Notes to Financial Statements
September 30, 2005

NOTE 1 - Significant Accounting Policies

Ivy Funds, Inc. (formerly W&R Funds, Inc.) (the Corporation) is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The Corporation issues twelve series of capital shares; each series represents ownership of a separate mutual fund. The assets belonging to each Fund are held separately by the custodian. The capital shares of each Fund represent a pro rata beneficial interest in the principal, net income and realized and unrealized capital gains or losses of its respective investments and other assets. The following is a summary of significant accounting policies consistently followed by the Corporation in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America.

A. Security valuation - Each stock and convertible bond is valued at the latest sale price thereof on each business day of the fiscal period as reported by the principal securities exchange on which the issue is traded or, if no sale is reported for a stock, the average of the latest bid and asked prices. Bonds, other than convertible bonds, are valued using a pricing system provided by a pricing service or dealer in bonds. Convertible bonds are valued using this pricing system only on days when there is no sale reported. Stocks which are traded over-the-counter are priced using the Nasdaq Stock Market, which provides information on bid and asked prices quoted by major dealers in such stocks. Gold bullion is valued at the last settlement price for current delivery as calculated by the Commodity Exchange, Inc. as of the close of that exchange. Restricted securities and securities for which quotations are not readily available or are deemed not to be reliable because of significant events or circumstances identified between the closing of their principal markets and the closing of the New York Stock Exchange are valued at fair value as determined in good faith under procedures established by and under the general supervision of the Corporation's Board of Directors. In deciding whether to make fair value adjustments, each Fund reviews a variety of factors, including news relating to security specific events, developments in foreign markets, the performance of U.S. securities markets, and the performance of instruments trading in U.S. markets that represent foreign securities. In these cases, the Fund may utilize information from a pricing service to adjust closing market quotations of foreign securities to reflect what it believes to be fair value. Short-term debt securities are valued at amortized cost, which approximates market value. Short-term debt securities denominated in foreign currencies are valued at amortized cost in that currency.

B. Security transactions and related investment income - Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Securities gains and losses are calculated on the identified cost basis. Premium and discount on the purchase of bonds are amortized for both financial and tax reporting purposes over the remaining lives of the bonds. Dividend income is recorded on the ex-dividend date except that certain dividends from foreign securities are recorded as soon as the Fund is informed of the ex-dividend date. Interest income is recorded on the accrual basis. See Note 3 - Investment Securities Transactions.

C. Foreign currency translations- All assets and liabilities denominated in foreign currencies are translated into United States dollars daily. Purchases and sales of investment securities and accruals of income and expenses are translated at the rate of exchange prevailing on the date of the transaction. For assets and liabilities other than investments in securities, net realized and unrealized gains and losses from foreign currency translation arise from changes in currency exchange rates. The Corporation combines fluctuations from currency exchange rates and fluctuations in market value when computing net realized and unrealized gain or loss from investments.

D. Forward foreign currency exchange contracts - A forward foreign currency exchange contract (Forward Contract) is an obligation to purchase or sell a specific currency at a future date at a fixed price. Forward Contracts are "marked-to-market" daily at the applicable translation rates and the resulting unrealized gains or losses are reflected in the Corporation's financial statements. Gains or losses are realized by the Corporation at the time the Forward Contract is extinguished. Contracts may be extinguished either by entry into a closing transaction or by delivery of the currency. Risks may arise from the possibility that the other party will not complete the obligations of the contract and from unanticipated movements in the value of the foreign currency relative to the United States dollar. The Corporation uses Forward Contracts to attempt to reduce the overall risk of its investments.

E. Federal income taxes - It is the Corporation's policy to distribute all of its taxable income and capital gains to its shareholders and otherwise qualify as a regulated investment company under Subchapter M of the Internal Revenue Code. In addition, the Corporation intends to pay distributions as required to avoid imposition of excise tax. Accordingly, provision has not been made for Federal income taxes. See Note 4 - Federal Income Tax Matters.

F. Dividends and distributions - Dividends and distributions to shareholders are recorded by each Fund on the business day following the applicable record date. Net investment income dividends and capital gains distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as deferral of wash sales and post-October losses, foreign currency transactions, net operating losses and expiring capital loss carryovers.

G. Repurchase agreements - Repurchase agreements are collateralized by the value of the resold securities which, during the entire period of the agreement, remains at least equal to the value of the loan, including accrued interest thereon. The collateral for the repurchase agreement is held by the custodian bank.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

NOTE 2 - Investment Management and Payments to Affiliated Persons

Ivy Investment Management Company (IICO), a wholly owned subsidiary of Waddell & Reed Financial, Inc. (WDR), serves as the Corporation's investment manager. Prior to March 8, 2005, IICO was known as Waddell & Reed Ivy Investment Company. IICO provides advice and supervises investments, for which services it is paid a fee. Prior to June 30, 2003, Waddell & Reed Investment Management Company (WRIMCO), a wholly owned subsidiary of Waddell & Reed, Inc. (W&R), served as the investment manager. On June 30, 2003, WRIMCO assigned the investment management agreement between it and the Corporation to Waddell & Reed Ivy Investment Company, an affiliated entity. The fee is payable by each Fund at the following annual rates:

Fund	Net Assets Breakpoints	Annual Rate

Ivy Asset Strategy Fund	Up to $1 Billion	.700%
	Over $1 Billion up to $2 Billion	.650%
	Over $2 Billion up to $3 Billion	.600%
	Over $3 Billion	.550%

Ivy Capital Appreciation Fund	Up to $1 Billion	.650%
	Over $1 Billion up to $2 Billion	.600%
	Over $2 Billion up to $3 Billion	.550%
	Over $3 Billion	.500%

Ivy Core Equity Fund	Up to $1 Billion	.700%
	Over $1 Billion up to $2 Billion	.650%
	Over $2 Billion up to $3 Billion	.600%
	Over $3 Billion	.550%

Ivy High Income Fund	Up to $500 Million	.625%
	Over $500 Million up to $1 Billion	.600%
	Over $1 Billion up to $1.5 Billion	.550%
	Over $1.5 Billion	.500%

Ivy International Growth Fund	Up to $1 Billion	.850%
	Over $1 Billion up to $2 Billion	.830%
	Over $2 Billion up to $3 Billion	.800%
	Over $3 Billion	.760%

Ivy Large Cap Growth Fund	Up to $1 Billion	.700%
	Over $1 Billion up to $2 Billion	.650%
	Over $2 Billion up to $3 Billion	.600%
	Over $3 Billion	.550%

Ivy Limited-Term Bond Fund	Up to $500 Million	.500%
	Over $500 Million up to $1 Billion	.450%
	Over $1 Billion up to $1.5 Billion	.400%
	Over $1.5 Billion	.350%

Ivy Mid Cap Growth Fund	Up to $1 Billion	.850%
	Over $1 Billion up to $2 Billion	.830%
	Over $2 Billion up to $3 Billion	.800%
	Over $3 Billion	.760%

Ivy Money Market Fund	All levels	.400%

Ivy Municipal Bond Fund	Up to $500 Million	.525%
	Over $500 Million up to $1 Billion	.500%
	Over $1 Billion up to $1.5 Billion	.450%
	Over $1.5 Billion	.400%

Ivy Science and Technology Fund	Up to $1 Billion	.850%
	Over $1 Billion up to $2 Billion	.830%
	Over $2 Billion up to $3 Billion	.800%
	Over $3 Billion	.760%

Ivy Small Cap Growth Fund	Up to $1 Billion	.850%
	Over $1 Billion up to $2 Billion	.830%
	Over $2 Billion up to $3 Billion	.800%
	Over $3 Billion	.760%

The fee is accrued and paid daily. However, IICO has voluntarily agreed to waive a Fund's management fee on any day that the Fund's net assets are less than $25 million, subject to IICO's right to change or modify this waiver. During the six month period ended September 30, 2005, IICO voluntarily waived its fee (in thousands) as shown in the following table:

Ivy Capital Appreciation Fund		$	54
Ivy Municipal Bond Fund			42

The Corporation has an Accounting Services Agreement with Waddell & Reed Services Company (WRSCO), an indirect subsidiary of WDR. Under the agreement, WRSCO acts as the agent in providing bookkeeping and accounting services and assistance to the Corporation, including maintenance of Fund records, pricing of Fund shares, preparation of prospectuses for existing shareholders, preparation of proxy statements and certain shareholder reports. For these services, each of the Funds paid WRSCO a monthly fee of one-twelfth of the annual fee shown in the following table:



Average Net Asset Level (in millions)						Annual Fee Rate for Each Level

From	$	0	to	$	10	$	0
From	$	10	to	$	25	$	11,500
From	$	25	to	$	50	$	23,100
From	$	50	to	$	100	$	35,500
From	$	100	to	$	200	$	48,400
From	$	200	to	$	350	$	63,200
From	$	350	to	$	550	$	82,500
From	$	550	to	$	750	$	96,300
From	$	750	to	$	1,000	$	121,600
	$	1,000 and Over				$	148,500

In addition, for each class of shares in excess of one, each Fund pays WRSCO a monthly per-class fee equal to 2.5% of the monthly accounting services base fee.

Each Fund also pays monthly a fee at the annual rate of 0.01% or one basis point for the first $1 billion of net assets with no fee charged for net assets in excess of $1 billion. This fee may be voluntarily waived until Fund net assets are at least $10 million.

Under the Shareholder Servicing Agreement between the Corporation and WRSCO, with respect to Class A, Class B and Class C shares, for each shareholder account that was in existence at any time during the prior month: Ivy Asset Strategy Fund pays a monthly fee of $1.5792; Ivy High Income Fund, Ivy Limited-Term Bond Fund and Ivy Municipal Bond Fund each pay a monthly fee of $1.6958; and Ivy Capital Appreciation Fund, Ivy Core Equity Fund, Ivy International Growth Fund, Ivy Large Cap Growth Fund, Ivy Mid Cap Growth Fund, Ivy Science and Technology Fund and Ivy Small Cap Growth Fund each pay a monthly fee of $1.5042. Ivy Money Market Fund pays a monthly fee of $1.75 for each shareholder account that was in existence at any time during the prior month plus, for Class A shareholder accounts, $0.75 for each shareholder check processed in the prior month. Ivy Limited-Term Bond Fund Class A, which also has check writing privileges, pays $0.75 for each shareholder check processed in the prior month. For Class Y shares, each Fund pays a monthly fee equal to one-twelfth of 0.15 of 1% of the average daily net assets of the class for the preceding month. Each Fund also reimburses WRSCO for certain out-of-pocket costs for all classes.

As principal underwriter for the Corporation's shares, Ivy Funds Distributor, Inc. (IFDI) receives sales commissions (which are not an expense of the Corporation) for Class A shares. A contingent deferred sales charge (CDSC) may be assessed against a shareholder's redemption amount of Class B, Class C or certain Class A shares and is paid to IFDI. During the six month period ended September 30, 2005, IFDI received the following amounts in sales commissions and CDSC:

	Sales Commissions			CDSC
	Sales Commissions			Class A		Class B		Class C

Ivy Asset Strategy Fund		$	439,927	$	-	$	8,106	$	2,894
Ivy Capital Appreciation Fund			80,076		-		762		183
Ivy Core Equity Fund			99,800		-		9,960		2,379
Ivy High Income Fund			108,980		846		3,980		1,257
Ivy International Growth Fund			40,299		-		4,306		641
Ivy Large Cap Growth Fund			670,810		1,797		6,575		636
Ivy Limited-Term Bond Fund			55,237		4,340		8,113		615
Ivy Mid Cap Growth Fund			202,333		1,812		3,881		446
Ivy Money Market Fund			-		-		39,929		5,656
Ivy Municipal Bond Fund			13,864		-		5,860		565
Ivy Science and Technology Fund			207,660		342		9,548		3,227
Ivy Small Cap Growth Fund			245,193		-		9,979		3,847

With respect to Class A, Class B and Class C shares, IFDI pays sales commissions and all expenses in connection with the sale of the Corporation's shares, except for registration fees and related expenses. During the six month period ended September 30, 2005, the following amounts were paid:

Ivy Asset Strategy Fund	$	764,672
Ivy Capital Appreciation Fund		128,810
Ivy Core Equity Fund		134,650
Ivy High Income Fund		127,729
Ivy International Growth Fund		51,950
Ivy Large Cap Growth Fund		768,861
Ivy Limited-Term Bond Fund		71,669
Ivy Mid Cap Growth Fund		227,747
Ivy Money Market Fund		-
Ivy Municipal Bond Fund		18,029
Ivy Science and Technology Fund		313,833
Ivy Small Cap Growth Fund		323,150

Under a Distribution and Service Plan for Class A shares adopted by the Corporation pursuant to Rule 12b-1 under the Investment Company Act of 1940, each Fund may pay a distribution and/or service fee to IFDI in an amount not to exceed 0.25% of the Fund's average annual net assets. The fee is to be paid to compensate IFDI for amounts it expends in connection with the distribution of the Class A shares and/or provision of personal services to Fund shareholders and/or maintenance of shareholder accounts.

Under the Distribution and Service Plan adopted by the Corporation for Class B shares and Class C shares, respectively, each Fund may pay IFDI a service fee not to exceed 0.25% and a distribution fee not to exceed 0.75% of a Fund's average annual net assets attributable to that class to compensate IFDI for its services in connection with the distribution of shares of that class and/or the service and/or maintenance of shareholder accounts of that class. The Class B Plan and the Class C Plan each permit IFDI to receive compensation, through the distribution fee and service fee, respectively, for its distribution activities for that class, which are similar to the distribution activities described with respect to the Class A Plan, and for its activities in providing personal services to shareholders of that class and/or maintaining shareholder accounts of that class, which are similar to the corresponding activities for which it is entitled to compensation under the Class A Plan. Under the Class Y Plan, each Fund may pay IFDI a fee of up to 0.25%, on an annual basis, of the average daily net assets of the Fund's Class Y shares to compensate IFDI for, either directly or through third parties, distributing the Class Y shares of that Fund, providing personal service to Class Y shareholders and/or maintaining Class Y shareholder accounts.

IFDI and WRSCO have voluntarily agreed to waive sufficient expenses to Class A of Ivy Money Market Fund in order to maintain the yield at the level of that of Waddell & Reed Advisors Cash Management, Inc. Class A. As of September 30, 2005, $37 (in thousands) of expenses was reimbursed to Ivy Money Market Fund Class A. This reimbursement serves to reduce shareholder servicing fees.

In addition, IFDI and WRSCO have voluntarily agreed to waive sufficient Fund expenses to ensure that the total annual fund operating expenses do not exceed the following levels for the specified funds/classes:

Fund and Class	Expense Limitation (as a percentage of average net assets of each Class)

Ivy Large Cap Growth Fund, Class A		1.50%
Ivy Large Cap Growth Fund, Class C		2.25%
Ivy Large Cap Growth Fund, Class Y		1.20%
Ivy Mid Cap Growth Fund, Class A		1.65%
Ivy Mid Cap Growth Fund, Class C		2.35%
Ivy Mid Cap Growth Fund, Class Y		1.25%

As of September 30, 2005, the amount of fees (in thousands) reimbursed under these agreements are as follows:

Ivy Large Cap Growth Fund
Class C	$	1
Class Y		5
Ivy Mid Cap Growth Fund
Class A	$	2
Class C		6
Class Y		2

These reimbursements serve to reduce distribution and service fees.

The Corporation paid Directors' fees of $58,284, which are included in other expenses.

NOTE 3 - Investment Securities Transactions

Investment securities transactions for the six month period ended September 30, 2005 are summarized as follows:

	Ivy Asset Strategy Fund			Ivy Capital Appreciation Fund		Ivy Core Equity Fund

Purchases of investment securities, excluding short-term and U.S. government securities		$	87,889,737	$	19,689,220	$	49,220,605
Purchases of bullion			4,044,263		-		-
Purchases of U.S. government securities			2,035,267		-		-
Purchases of short-term securities			777,090,415		264,667,101		644,534,411
Purchases of options			361,881		24,051		-
Proceeds from maturities and sales of investment securities, excluding short-term and U.S. government securities			30,732,117		5,186,619		82,833,791
Proceeds from sales of bullion			-		-		-
Proceeds from maturities and sales of U.S. government securities			-		-		-
Proceeds from maturities and sales of short-term securities			772,203,833		262,733,000		628,042,922
Proceeds from options			457,773		-		-

	Ivy High Income Fund		Ivy International Growth Fund		Ivy Large Cap Growth Fund

Purchases of investment securities, excluding short-term and U.S. government securities	$	12,555,764	$	23,938,297	$	92,966,178
Purchases of U.S. government securities		-		-		-
Purchases of short-term securities		332,117,481		176,711,498		429,445,233
Proceeds from maturities and sales of investment securities, excluding short-term and U.S. government securities		10,733,319		28,585,007		71,267,190
Proceeds from maturities and sales of U.S. government securities		-		-		-
Proceeds from maturities and sales of short-term securities		332,808,000		176,562,000		433,336,948

	Ivy Limited- Term Bond Fund		Ivy Mid Cap Growth Fund		Ivy Municipal Bond Fund

Purchases of investment securities, excluding short-term and U.S. government securities	$	5,439,525	$	9,800,523	$	2,241,774
Purchases of U.S. government securities		-		-		-
Purchases of short-term securities		146,147,281		448,122,547		57,270,478
Purchases of options		-		162,217		-
Proceeds from maturities and sales of investment securities, excluding short-term and U.S. government securities		12,641,017		9,886,336		2,584,519
Proceeds from maturities and sales of U.S. government securities		-		-		-
Proceeds from maturities and sales of short-term securities		145,483,492		444,469,813		56,712,000
Proceeds from options		-		224,106		-

	Ivy Science and Technology Fund		Ivy Small Cap Growth Fund

Purchases of investment securities, excluding short-term and U.S. government securities	$	174,490,144	$	181,838,171
Purchases of U.S. government securities		-		-
Purchases of short-term securities		751,822,297		1,379,275,729
Purchases of options		21,918		-
Proceeds from maturities and sales of investment securities, excluding short-term and U.S. government securities		159,229,831		196,188,875
Proceeds from maturities and sales of U.S. government securities		-		-
Proceeds from maturities and sales of short-term securities		720,901,648		1,364,515,013
Proceeds from options		-		-

For Federal income tax purposes, cost of investments owned at September 30, 2005 and the related unrealized appreciation (depreciation) were as follows:

	Cost		Appreciation		Depreciation		Aggregate Appreciation (Depreciation)

Ivy Asset Strategy Fund	$	162,789,573	$	37,643,377	$	365,125	$	37,278,252
Ivy Capital Appreciation Fund		29,254,970		3,845,570		575,419		3,270,151
Ivy Core Equity Fund		189,822,494		72,820,964		3,194,129		69,626,835
Ivy High Income Fund		66,168,854		2,276,892		1,610,040		666,852
Ivy International Growth Fund		53,735,677		16,120,351		242,858		15,877,493
Ivy Large Cap Growth Fund		152,268,097		34,129,249		1,214,882		32,914,367
Ivy Limited-Term Bond Fund		56,368,949		138,868		540,901		(402,033)
Ivy Mid Cap Growth Fund		76,047,859		32,210,220		1,029,253		31,180,967
Ivy Money Market Fund		47,214,494		-		-		-
Ivy Municipal Bond Fund		23,656,174		872,236		22,792		849,444
Ivy Science and Technology Fund		221,021,291		48,451,428		4,609,463		43,841,965
Ivy Small Cap Growth Fund		458,799,656	140,741,285		14,845,513		125,895,772

NOTE 4 - Federal Income Tax Matters

For Federal income tax purposes, the Funds' distributed and undistributed earnings and profit for the fiscal year ended March 31, 2005 and the related Capital Loss Carryover and Post-October activity were as follows:

	Ivy Asset Strategy Fund			Ivy Capital Appreciation Fund			Ivy Core Equity Fund

Net ordinary income		$	208,746		$	-		$	-
Distributed ordinary income			180,383			-			-
Undistributed ordinary income			206,726			-			-

Realized long-term capital gains			490,361			-			-
Distributed long-term capital gains			705,308			-			-
Undistributed long-term capital gains			490,361			-			-

Capital loss carryover			-			-			-

Post-October losses deferred			2,421			62,442		1,599

	Ivy High Income Fund			Ivy International Growth Fund			Ivy Large Cap Growth Fund

Net ordinary income		$	3,700,170		$	-		$	-
Distributed ordinary income			3,687,419			596,184			-
Undistributed ordinary income			66,540			-			-

Realized long-term capital gains			-			-			-
Distributed long-term capital gains			-			-			-
Undistributed long-term capital gains			-			-			-

Capital loss carryover			-			-			-

Post-October losses deferred			-			14,783			-

	Ivy Limited- Term Bond Fund			Ivy Mid Cap Growth Fund			Ivy Money Market Fund

Net ordinary income		$	1,589,308		$	-		$	347,083
Distributed ordinary income			1,579,176			-			336,430
Undistributed ordinary income			28,965			-			13,878

Realized long-term capital gains			-			-			-
Distributed long-term capital gains			-			-			-
Undistributed long-term capital gains			-			-			-

Capital loss carryover			-			-			-

Post-October losses deferred			91,289			-			-

	Ivy Municipal Bond Fund			Ivy Science and Technology Fund			Ivy Small Cap Growth Fund

Net ordinary income		$	702,840		$	-		$	-
Distributed ordinary income			697,508			-			-
Undistributed ordinary income			13,316			-			-

Realized long-term capital gains			-			-			-
Distributed long-term capital gains			-			-			-
Undistributed long-term capital gains			-			-			-

Capital loss carryover			-			-			-

Post-October losses deferred			-			1,859			-

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

Capital loss carryovers are available to offset future realized capital gain net income for Federal income tax purposes. The following shows the totals by year in which the capital loss carryovers will expire if not utilized.

	Ivy Capital Appreciation Fund			Ivy Core Equity Fund		Ivy High Income Fund		Ivy International Growth Fund

March 31, 2009		$	-	$	4,268,163	$	1,574,985	$	1,629,853
March 31, 2010			1,620,668		5,388,835		1,271,702		24,986,955
March 31, 2011			1,005,096		30,984,614		1,182,962		19,867,500

Total carryover		$	2,625,764	$	40,641,612	$	4,029,649	$	46,484,308

	Ivy Large Cap Growth Fund		Ivy Limited-Term Bond Fund			Ivy Mid Cap Growth Fund		Ivy Municipal Bond Fund

March 31, 2008	$	710,447		$	-	$	-	$	-
March 31, 2009		11,368,220			36,676		22,505,437		223,145
March 31, 2010		9,290,552			-		17,363,901		230,753
March 31, 2011		4,727,341			456,813		5,387,010		75,199
March 31, 2012		608,471			-		949,121		-

Total carryover	$	26,705,031		$	493,489	$	46,205,469	$	529,097

	Ivy Science and Technology Fund		Ivy Small Cap Growth Fund

March 31, 2008	$	541,589	$	4,767,939
March 31, 2009		1,113,450		3,509,351
March 31, 2010		10,616,042		8,387,927
March 31, 2011		16,278,545		25,225,254
March 31, 2012		398,136		4,912,837

Total carryover	$	28,947,762	$	46,803,308

Ivy US Blue Chip Fund was merged into Ivy Core Equity Fund as of June 16, 2003 and Advantus Index 500 Fund was merged into Ivy Core Equity Fund as of December 8, 2003. At the time of the mergers, Ivy US Blue Chip Fund and Advantus Index 500 Fund had capital loss carryovers available to offset future gains of the Ivy Core Equity Fund. Ivy US Blue Chip Fund's carryovers are limited to $1,479,061 for each period ending from March 31, 2006 through 2011 plus any unused limitations from prior years.

Ivy Global Fund and Ivy International Small Companies Fund were merged into Ivy International Growth Fund as of June 16, 2003. At the time of the merger, Ivy Global Fund and Ivy International Small Companies Fund had capital loss carryovers available to offset future gains of the Ivy International Growth Fund. These carryovers are limited to $181,724 and $225,739, respectively, for each period ending from March 31, 2006 through 2011 plus any unused limitations from prior years.

Advantus Horizon Fund was merged into Ivy Large Cap Growth Fund as of December 8, 2003. At the time of the merger, Advantus Horizon Fund had capital loss carryovers available to offset future gains of the Ivy Large Cap Growth Fund. These carryovers are limited to $6,142,321 for the period ending March 31, 2006 and $1,383,732 for each period ending from March 31, 2007 through 2010 plus any unused limitations from prior years and the amount of certain built-in gains realized, if any.

Ivy US Emerging Growth Fund was merged into Ivy Mid Cap Growth fund as of June 16, 2003. At the time of the merger, Ivy Mid Cap Growth Fund had capital loss carryovers available to offset future gains. These carryovers are limited to $3,301,377 for the period ending March 31, 2006 and $1,182,294 for each period from March 31, 2007 through 2011 and $197,085 for the period ending March 31, 2012 plus any unused limitations from prior years.

Ivy Global Science & Technology Fund was merged into Ivy Science and Technology Fund as of June 16, 2003. At the time of the merger, Ivy Global Science & Technology Fund had capital loss carryovers available to offset future gains of the Ivy Science and Technology Fund. These carryovers are limited to $413,760 for each period ending from March 31, 2006 through 2011 plus any unused limitations from prior years.

Advantus Enterprise Fund was merged into Ivy Small Cap Growth Fund as of December 8, 2003. At the time of the merger, Advantus Enterprise Fund had capital loss carryovers available to offset future gains of the Ivy Small Cap Growth Fund. These carryovers are limited to $2,069,323 for each period ending from March 31, 2006 through 2010 and $564,364 for the period ending March 31, 2011 plus any unused limitations from prior years.

NOTE 5 - Multiclass Operations

Each Fund within the Corporation currently offers four classes of shares, Class A, Class B, Class C and Class Y (other than Money Market Fund which offers only Class A shares), each of which have equal rights as to assets and voting privileges. Ivy Money Market Fund Class B and Class C shares are no longer available for investment. A comprehensive discussion of the terms under which shares of each class are offered is contained in the Prospectus and the Statement of Additional Information for the Corporation.

Income, non-class specific expenses, and realized and unrealized gains and losses are allocated daily to each class of shares based on the value of their relative net assets as of the beginning of each day adjusted for the prior day's capital share activity.

Transactions in capital stock for the fiscal period ended September 30, 2005 are summarized below. Amounts are in thousands.

	Ivy Asset Strategy Fund			Ivy Capital Appreciation Fund			Ivy Core Equity Fund

Shares issued from sale of shares:
Class A		3,316			1,740			1,085
Class B		364			134			88
Class C		2,071			453			497
Class Y		601			4			8
Shares issued from reinvestment of dividends and/or capital gains distribution:
Class A		-			-			-
Class B		-			-			-
Class C		-			-			-
Class Y		-			-			-
Shares redeemed:
Class A		(720	)		(205	)		(1,010	)
Class B		(79	)		(46	)		(210	)
Class C		(404	)		(17	)		(2,284	)
Class Y		(393	)		(-	)		(11	)

Increase (decrease) in outstandingcapital shares		4,756			2,063			(1,837	)


Value issued from sale of shares:
Class A	$	49,233		$	14,350		$	9,976
Class B		5,315			1,058			761
Class C		30,902			3,558			4,385
Class Y		8,758			35			81
Value issued from reinvestment of dividends and/or capital gains distribution:
Class A		-			-			-
Class B		-			-			-
Class C		-			-			-
Class Y		-			-			-
Value redeemed:
Class A	(10,509		)		(1,713	)	(9,329		)
Class B		(1,129	)		(367	)		(1,831	)
Class C	(5,891		)		(131	)	(20,174		)
Class Y		(5,710	)		(-	)		(105	)

Increase (decrease) in outstanding capital	$	70,969		$	16,790		$	(16,236	)

	Ivy High Income Fund			Ivy International Growth Fund			Ivy Large Cap Growth Fund

Shares issued from sale of shares:
Class A		855			250			4,058
Class B		96			27			292
Class C		150			96			266
Class Y		48			24			471
Shares issued from reinvestment of dividends and/or capital gains distribution:
Class A		100			-			-
Class B		14			-			-
Class C		65			-			-
Class Y		37			-			-
Shares redeemed:
Class A		(614	)		(191	)		(2,384	)
Class B		(63	)		(78	)		(233	)
Class C		(546	)		(542	)		(278	)
Class Y		(50	)		(42	)		(497	)

Increase (decrease) in outstanding capital shares		92			(456	)		1,695


Value issued from sale of shares:
Class A	$	7,393		$	2,817		$	40,963
Class B		828			286			2,737
Class C		1,299			1,042			2,555
Class Y		410			292			4,894
Value issued from reinvestment of dividends and/or capital gains distribution:
Class A		864			-			-
Class B		124			-			-
Class C		563			-			-
Class Y		319			-			-
Value redeemed:
Class A	(5,292		)	(2,175		)	(23,752		)
Class B		(543	)		(838	)		(2,188	)
Class C	(4,719		)		(5,934	)		(2,654	)
Class Y		(432	)		(509	)	(5,043		)

Increase (decrease) in outstanding capital	$	814		$	(5,019	)	$	17,512

							Ivy Money Market Fund

Shares issued from sale of shares:
Class A		640			1,478			27,762
Class B		67			118			2,161
Class C		179			85			3,548
Class Y		21			26			NA
Shares issued from reinvestment of dividends and/or capital gains distribution:
Class A		49			-			490
Class B		5			-			10
Class C		16			-			27
Class Y		2			-			NA
Shares redeemed:
Class A		(1,163	)	(1,025		)	(25,117		)
Class B		(175	)		(199	)		(2,219	)
Class C		(335	)		(142	)	(4,846		)
Class Y		(13	)		(24	)		NA

Increase (decrease) in outstanding capital shares		(707	)		317			1,816


Value issued from sale of shares:
Class A	$	6,518		$	15,570		$	27,762
Class B		686			1,172			2,161
Class C		1,827			859			3,548
Class Y		215			272			NA
Value issued from reinvestment of dividends and/or capital gains distribution:
Class A		500			-			490
Class B		54			-			10
Class C		157			-			27
Class Y		23			-			NA
Value redeemed:
Class A	(11,844		)	(10,881		)	(25,117		)
Class B		(1,781	)		(1,952	)		(2,219	)
Class C		(3,411	)		(1,448	)	(4,846		)
Class Y		(140	)		(254	)		NA

Increase (decrease) in outstanding capital	$	(7,196	)	$	3,338		$	1,816

	Ivy Municipal Bond Fund				Ivy Science and Technology Fund			Ivy Small Cap Growth Fund

Shares issued from sale of shares:
Class A			192			2,447			2,547
Class B			84			128			124
Class C			69			379			642
Class Y			-	*		617			2,308
Shares issued from reinvestment of dividends and/or capital gains distribution:
Class A			8			-			-
Class B			1			-			-
Class C			19			-			-
Class Y			-	*		-			-
Shares redeemed:
Class A			(125	)		(342	)		(612	)
Class B			(51	)		(77	)		(89	)
Class C			(187	)		(428	)		(2,634	)
Class Y			(-	)*		(461	)		(1,340	)

Increase in outstanding capital shares			10			2,263			946


Value issued from sale of shares:
Class A		$	2,161		$	56,063		$	34,409
Class B			943			2,778			1,534
Class C			773			8,441			8,151
Class Y			-	*		14,688			33,191
Value issued from reinvestment of dividends and/or capital gains distribution:
Class A			94			-			-
Class B			10			-			-
Class C			214			-			-
Class Y			1			-			-
Value redeemed:
Class A		(1,401		)	(7,802		)		(8,087	)
Class B			(573	)		(1,650	)		(1,107	)
Class C		(2,109		)	(9,334		)	(33,302		)
Class Y			(-	)^*	(10,362		)	(19,162		)

Increase in outstanding capital		$	113		$	52,822		$	15,627

*Not shown due to rounding.

Transactions in capital stock for the fiscal year ended March 31, 2005 are summarized below. Amounts are in thousands.

	Ivy Asset Strategy Fund			Ivy Capital Appreciation Fund				Ivy Core Equity Fund

Shares issued from sale of shares:
Class A		1,843				728			1,173
Class B		364				91			324
Class C		885				196			1,221
Class Y		158				17			24
Shares issued from reinvestment of dividends and/or capital gains distribution:
Class A		22				-			-
Class B		6				-			-
Class C		34				-			-
Class Y		2				-			-
Shares redeemed:
Class A		(489	)			(161	)		(3,223	)
Class B		(107	)			(25	)		(511	)
Class C		(833	)			(74	)		(5,690	)
Class Y		(46	)			(3	)		(102	)

Increase (decrease) in outstanding capital shares		1,839				769			(6,784	)


Value issued from sale of shares:
Class A	$	25,040			$	5,606		$	10,008
Class B		4,796				662			2,628
Class C		11,912				1,451			10,009
Class Y		2,099				125			205
Value issued from reinvestment of dividends and/or capital gains distribution:
Class A		293				-			-
Class B		82				-			-
Class C		449				-			-
Class Y		33				-			-
Value redeemed:
Class A	(6,407		)		(1,241		)	(26,867		)
Class B		(1,391	)			(180	)		(4,154	)
Class C	(10,775		)			(539	)	(46,423		)
Class Y		(618	)			(27	)		(894	)

Increase (decrease) in outstanding capital	$	25,513			$	5,857		$	(55,488	)

	Ivy High Income Fund			Ivy International Growth Fund			Ivy Large Cap Growth Fund

Shares issued from sale of shares:
Class A		2,247			353			5,034
Class B		303			70			573
Class C		533			286			532
Class Y		139			207			585
Shares issued from reinvestment of dividends and/or capital gains distribution:
Class A		139			17			-
Class B		22			2			-
Class C		137			26			-
Class Y		73			7			-
Shares redeemed:
Class A		(781	)		(331	)		(4,551	)
Class B		(120	)		(141	)		(316	)
Class C		(736	)		(1,339	)		(490	)
Class Y		(241	)		(261	)		(1,805	)

Increase (decrease) in outstanding capital shares		1,715			(1,104	)		(438	)


Value issued from sale of shares:
Class A	$	19,814		$	3,785		$	46,868
Class B		2,674			712			4,987
Class C		4,694			2,917			4,740
Class Y		1,219			2,401			5,432
Value issued from reinvestment of dividends and/or capital gains distribution:
Class A		1,224			183			-
Class B		193			21			-
Class C		1,205			286			-
Class Y		648			87			-
Value redeemed:
Class A		(6,867	)	(3,536		)	(41,787		)
Class B		(1,056	)		(1,436	)		(2,732	)
Class C		(6,480	)		(13,716	)		(4,309	)
Class Y		(2,151	)		(3,040	)	(16,933		)

Increase (decrease) in outstanding capital	$	15,117		$	(11,336	)	$	(3,734	)

				Ivy Mid Cap Growth Fund			Ivy Money Market Fund

Shares issued from sale of shares:
Class A		3,145			2,730			46,298
Class B		304			286			5,580
Class C		385			340			10,835
Class Y		100			80			NA
Shares issued from reinvestment of dividends and/or capital gains distribution:
Class A		96			-			324
Class B		10			-			1
Class C		33			-			5
Class Y		5			-			NA
Shares redeemed:
Class A		(2,785	)	(1,403		)	(52,704		)
Class B		(213	)		(496	)		(5,410	)
Class C		(811	)		(276	)	(11,608		)
Class Y		(103	)		(35	)		NA

Increase (decrease) in outstanding capital shares		166			1,226			(6,679	)


Value issued from sale of shares:
Class A	$	32,300		$	26,012		$	46,298
Class B		3,127			2,618			5,580
Class C		3,953			3,176			10,835
Class Y		1,032			776			NA
Value issued from reinvestment of dividends and/or capital gains distribution:
Class A		990			-			324
Class B		100			-			1
Class C		339			-			5
Class Y		52			-			NA
Value redeemed:
Class A	(28,528		)	(13,542		)	(52,704		)
Class B		(2,189	)		(4,511	)		(5,410	)
Class C		(8,325	)		(2,564	)	(11,608		)
Class Y		(1,060	)		(333	)		NA

Increase (decrease) in outstanding capital	$	1,791		$	11,632		$	(6,679	)

	Ivy Municipal Bond Fund			Ivy Science and Technology Fund			Ivy Small Cap Growth Fund

Shares issued from sale of shares:
Class A		191			1,571			2,763
Class B		35			196			331
Class C		179			557			1,511
Class Y		4			1,321			2,386
Shares issued from reinvestment of dividends and/or capital gains distribution:
Class A		12			-			-
Class B		2			-			-
Class C		40			-			-
Class Y		-	*		-			-
Shares redeemed:
Class A		(104	)		(856	)		(5,108	)
Class B		(21	)		(154	)		(242	)
Class C		(394	)		(987	)		(5,823	)
Class Y		(-	)*		(273	)		(3,879	)

Increase (decrease) in outstanding capital shares		(56)			1,375			(8,061	)


Value issued from sale of shares:
Class A	$	2,136		$	31,721		$	31,601
Class B		396			3,732			3,657
Class C		2,012			10,871			16,856
Class Y		43			27,807			30,101
Value issued from reinvestment of dividends and/or capital gains distribution:
Class A		135			-			-
Class B		16			-			-
Class C		447			-			-
Class Y		1			-			-
Value redeemed:
Class A	(1,156		)	(17,589		)		(56,508	)
Class B		(234	)		(2,920	)		(2,657	)
Class C	(4,415		)	(19,034		)		(64,820	)
Class Y		(4	)		(5,746	)		(48,220	)

Increase (decrease) in outstanding capital	$	(623	)	$	28,842		$	(89,990	)

*Not shown due to rounding.

NOTE 6 - Options

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

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

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

	Number of Contracts			Premiums Received

Outstanding at March 31, 2005		-			$	-
Options written		1,836				121,653
Options terminated in closing purchase transactions		(1,144	)		(83,326		)
Options exercised		(-	)			(-	)
Options expired		(422	)			(24,475	)

Outstanding at September 30, 2005		270			$	13,852

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

	Number of Contracts

Outstanding at March 31, 2005		-		$	-
Options written		1,804			309,285
Options terminated in closing purchase transactions	(1,804		)	(309,285		)
Options exercised		(-	)		(-	)
Options expired		(-	)		(-	)

Outstanding at September 30, 2005		-		$	-

For Ivy Capital Appreciation Fund, transactions in call options written were as follows:

	Number of Contracts

Outstanding at March 31, 2005		-		$	-
Options written		111			22,782
Options terminated in closing purchase transactions	(28		)	(13,798		)
Options exercised		(-	)		(-	)
Options expired		(-	)		(-	)

Outstanding at September 30, 2005		83		$	8,984

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

	Number of Contracts			Premiums Received

Outstanding at March 31, 2005		1,368		$	66,439
Options written		1,525			143,147
Options terminated in closing purchase transactions	(1,311		)	(112,253		)
Options exercised		(11	)		(5,060	)
Options expired		(1,367	)		(67,436	)

Outstanding at September 30, 2005		204		$	24,837

NOTE 7 - Credit Default Swaps

A Fund may enter into credit default swaps to 1) preserve a return or a spread on a particular investment or portion of its portfolio; 2) to protect against any increase in the price of securities the Fund anticipates purchasing at a later date; or 3) to attempt to enhance yield. Credit default swaps involve the exchange of a fixed rate premium for protection against the loss in value of an underlying debt instrument in the event of a defined credit event, such as payment default or bankruptcy. Under a credit default swap one party acts as a `guarantor' by receiving the fixed periodic payment in exchange for the commitment to purchase the underlying security at par if the credit event occurs. A Fund may enter into credit default swaps in which either it or its counterparty act as the guarantor.

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

Swaps are marked-to-market daily based on dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). Payments received or made at the beginning of the measurement period are reflected as such on the Statement of Assets and Liabilities. These upfront payments, as well as any periodic payments, are recorded as realized gain or loss in the Statement of Operations. Gains or losses may be realized upon termination of the swap agreement.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders,
Ivy Funds, Inc.:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Asset Strategy Fund, Capital Appreciation Fund (formerly Tax-Managed Equity Fund), Core Equity Fund, High Income Fund, International Growth Fund, Large Cap Growth Fund, Limited-Term Bond Fund, Mid Cap Growth Fund, Money Market Fund, Municipal Bond Fund, Science and Technology Fund and Small Cap Growth Fund (collectively the "Funds") comprising Ivy Funds, Inc. as of September 30, 2005, and the related statements of operations for the six-month period then ended, the statements of changes in net assets for the six-month period then ended and the fiscal year ended March 31, 2005, and the financial highlights for the periods presented. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of September 30, 2005, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of each of the respective Funds comprising Ivy Funds, Inc., as of September 30, 2005, the results of their operations for the six-month period then ended, the changes in their net assets for the six-month period then ended and the fiscal year ended March 31, 2005, and their financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP
Kansas City, Missouri
November 16, 2005

Renewal of Investment Management Agreement for the Ivy Funds, Inc.

At a Meeting of the Board of Directors of the Corporation held on August 30 and 31, 2005, the Directors, including all of the Directors who are not "interested persons" as defined in Section 2(a)(19) of the 1940 Act considered and approved the continuance of the existing Investment Management Agreement between Ivy Investment Management Company (IICO) and the Funds.

The Board's Independent Directors were assisted in their review by independent legal counsel and met with such counsel separately from representatives of IICO. Independent legal counsel provided the Board with a memorandum that discussed the various factors that the Board should consider as part of its review of the various agreements, including, among other things, the nature and the quality of the services provided by IICO, profitability (including any fall-out benefits) from their relationship with the Funds, economies of scale, the role played by the Independent Directors, and information on comparative fees and expenses. The Board also considered the written responses and supplementary materials produced by IICO in response to a 15(c) due diligence request list submitted by the Independent Directors' counsel prior to the meeting. Included in those responses, which had been provided to the Board prior to the meeting, was a fund-by-fund profitability analysis prepared by IICO. The Board also received extensive materials on performance, expenses and comparable fund information from Lipper, Inc., an independent mutual fund rating service. Finally, the Independent Directors received a report from two of the Independent Directors who had been appointed to serve on an ad hoc contract review committee to conduct a preliminary review of all of this information prior to the meeting. The Independent Directors discussed all of this material extensively among themselves and with their independent legal counsel, and then discussed these materials and related information with the full Board prior to the Board's final consideration of these issues. Based upon the examination by the Independent Directors, the Board made the following considerations and conclusions.

Considerations with respect to each Fund

Ivy International Growth Fund

The Board examined the investment performance of the Ivy International Growth Fund, noting that the Fund had been in the 5 ^th quintile for performance for the one and three year time periods as indicated in the Lipper materials. The Board also examined the performance of the Fund against its peers included in the Lipper materials for those same time periods, as well against the Lipper International Large Cap Growth Index. The Board took into account the additional resources management has applied to the Fund, including keeping the Board apprised of its progress in this regard, and noted that management formally has indicated that the recent performance of the Fund had improved. The Board discussed management's proposal to merge the Fund into the Ivy International Fund, a series of Ivy Funds, a Massachusetts business trust, and the possible benefits to each Fund's shareholders that such a merger might create. The Board concluded that the Fund's performance appears to be improving and currently is acceptable.

The Board considered the expenses of the Fund and the cost of the services provided by IICO. The Boards compared the Fund's expenses, including IICO's advisory fees, with the expenses and advisory fees of other investment advisers managing similarly-situated funds. The Board then discussed the profitability to IICO in managing the Fund and the derivation of that profitability analysis. After considering all of this information, the Board concluded that the Fund's expenses appear to be reasonable.

The Board considered the nature, extent and quality of services provided to the Fund by IICO, taking into account the investment objective and strategy of the Fund and the knowledge the Board gained from their regular meetings with the IICO and personnel responsible for the management of the Fund, as well as the materials provided in connection with those meetings. In addition, the Board reviewed IICO's resources and key personnel, especially those who provide investment management services to the Fund. The Board also considered other services provided to the Fund by IICO, such as managing the quality of execution of portfolio transactions and the selection of broker-dealers for those transactions, monitoring adherence to the Fund's investment restrictions, producing reports, providing support services for the Board and Board committees, communicating with shareholders and overseeing the activities of other service providers, including monitoring compliance with various Fund policies and procedures and with applicable securities laws and regulations. The Board concluded that the nature and extent of the services provided by IICO are appropriate, that the quality of those services is consistent with quality norms in the industry and that the Fund is likely to benefit from the continued provision of those services.

The Board discussed whether IICO derives any other direct or indirect benefits from serving as investment adviser to the Fund. The Board considered benefits that accrue to IICO from its relationship with the Fund, including the fact that a variety of services are provided by affiliates of IICO, including distribution, shareholder servicing and transfer agency services. After full consideration of these and other factors, the Board concluded that neither IICO nor its affiliate receive any additional direct benefits that would warrant re-consideration and/or preclude the Board from approving the continuation of the investment advisory contract with IICO.

The Board received and discussed information concerning whether economies of scale are being realized by the Fund and whether fee levels reflect those economies of scale for the benefit of the Fund's shareholders. The Board specifically noted that the assets in the Fund have been decreasing but deferred further discussion on economies of scale and fee schedules because these issues likely would be addressed as a result of the proposed merger.

Ivy High Income Fund and Ivy Limited-Term Bond Fund

The Board examined the investment performance of each Fund, noting that the Ivy High Income Fund had been in the 5 ^th performance quintile for each of the one and three year periods, while the Ivy Limited Term Bond Fund had been in the 4 ^th performance quintile for the one year period and the 5 ^th quintile for the three year period, all as reported in the Lipper materials. The Board also examined the performance of the Funds against their respective peers included in the Lipper materials for those time periods, as well against their respective Lipper benchmarks. The Board discussed IICO's strategy for managing the Funds, noting how that strategy affects the Fund's performance, and determined that the Fund's performance was acceptable.

The Board considered the expenses of each Fund and the cost of the services provided by IICO. The Board compared the Funds' expenses, including IICO's advisory fees, with the expenses and advisory fees of other investment advisers managing similarly situated funds. The Board specifically noted that most of the Funds' peers' expenses appear to be more favorable because approximately 90% of the advisers of those entities provide expense waivers. The Board discussed the appropriateness of IICO's philosophy in conservatively managing these Funds, and agreed that it is appropriate to not optimize income given the risks required to be taken to achieve a higher return, in consideration of the current client base of Waddell & Reed. They further discussed the possibility of IICO granting a fee waiver, commenting that neither of these Funds was designed primarily as a flagship product, but as vehicles to obtain lower-risk income, and in that regard, IICO's management of these Funds was appropriate. The Board determined to confirm with management that these Funds were sold in that fashion to prospective and existing shareholders. The Board then discussed the profitability to IICO in managing the Funds, including the derivation of that profitability analysis. After considering all of this information, the Board concluded that the Funds' expenses appear to be reasonable.

The Board considered the nature, extent and quality of services provided to each Fund by IICO, taking into account the investment objective and strategy of the Fund and the knowledge the Board gained from their regular meetings with the IICO and personnel responsible for the management of the Fund, as well as the materials provided in connection with those meetings. In addition, the Board reviewed IICO's resources and key personnel, especially those who provide investment management services to the Funds. The Board also considered other services provided to the Funds by IICO, such as managing the quality of execution of portfolio transactions and the selection of broker-dealers for those transactions, monitoring adherence to the Fund's investment restrictions, producing reports, providing support services for the Board and Board committees, communicating with shareholders and overseeing the activities of other service providers, including monitoring compliance with various Fund policies and procedures and with applicable securities laws and regulations. The Board concluded that the nature and extent of the services provided by IICO are appropriate, that the quality of those services is consistent with quality norms in the industry and that each Fund is likely to benefit from the continued provision of those services.

The Board discussed whether IICO derives any other direct or indirect benefits from serving as investment adviser to each Fund. The Board considered benefits that accrue to IICO from its relationship with each, including the fact that a variety of services are provided by affiliates of IICO, including distribution, shareholder servicing and transfer agency services. After full consideration of these and other factors, the Board concluded that neither IICO nor its affiliate received any additional direct benefits that would warrant re-consideration and/or preclude the Board from approving the continuation of the investment advisory contract with IICO.

The Board received and discussed information concerning whether economies of scale are being realized by each Fund and whether fee levels reflect those economies of scale for the benefit of the Fund's shareholders. The Board considered the current and anticipated asset levels of each Fund and the potential for growth in that Fund's assets. The Board concluded that the current asset size of both Funds did not warrant reevaluating the fee schedule for the Fund at this time.

Ivy Asset Strategy Fund, Ivy Capital Appreciation Fund, Ivy Core Equity Fund,
Ivy Large Cap Growth Fund, Ivy Mid Cap Growth Fund, Ivy Money Market Fund,
Ivy Municipal Bond Fund, Ivy Science and Technology Fund, Ivy Small Cap Growth Fund

The Board evaluated the performance of the advisory contracts with IICO for each of the remaining Funds. The Board determined that it would be appropriate to review each such Fund based upon the information contained in the Lipper materials and the due diligence materials that the Board had received from IICO.

The Board examined the investment performance of each Fund, including their short-term and long-term quintile rankings as reported in the Lipper materials. The Board also examined the performance of each Fund against their respective peers included in the Lipper materials, as well against the appropriate Lipper benchmark. The Board considered that it had met with the portfolio manager(s) of each such Fund during regularly scheduled meetings, during which they had had an opportunity to discuss all facets of each Fund, including performance. After further discussion, given each Fund's performance history, the Board concluded that each Fund's performance in their respective asset class is acceptable.

The Board considered the expenses of each Fund and the cost of the services provided by IICO. The Board compared each Fund's expenses with the expenses and advisory fees of other similarly situated funds as reported in the Lipper Reports. The Board then discussed the profitability to IICO in managing each Fund, as well as the derivation of that profitability analysis. After considering all of this information, the Board concluded that each Fund's expenses appear to be reasonable.

The Board considered the nature, extent and quality of services provided to each Fund by IICO, taking into account the investment objective and strategy of each Fund and the knowledge the Board gained from their regular meetings with the personnel directly responsible for the management of the Fund, as well as the materials provided in connection with those meetings. In addition, the Board reviewed the resources and key personnel of IICO, especially those portfolio managers who provide investment management services to the Fund. The Board also considered other services provided to each Fund by IICO, such as managing the quality of execution of portfolio transactions and the selection of broker-dealers for those transactions, monitoring adherence to the Fund's investment restrictions, producing reports, providing support services for the Board and Board committees, communicating with shareholders and overseeing the activities of other service providers, including monitoring compliance with various Fund policies and procedures and with applicable securities laws and regulations. The Board concluded that the nature and extent of the services provided by IICO with respect to each Fund are appropriate, that the quality of those services is consistent with quality norms in the industry and that the Fund is likely to benefit from the continued provision of those services.

The Board discussed whether IICO derives any other direct or indirect benefits from serving as investment adviser to each Fund. The Board considered benefits that accrue to IICO from its relationship with each respective Fund, including the fact that a variety of services are provided by affiliates of IICO, including distribution, shareholder servicing and transfer agency services. After full consideration of these and other factors, the Board concluded that neither IICO nor any of its affiliates receive any additional direct benefits that would warrant re-consideration and/or preclude the Board from approving the continuation of the investment advisory contract with IICO.

The Board received and discussed information concerning whether economies of scale are being realized by each Fund and whether fee levels reflect those economies of scale for the benefit of each Fund's respective shareholders. The Board considered the current and anticipated asset levels of each Fund and the potential for growth in each Fund's assets. The Board concluded that the current asset size of each Fund did not warrant reevaluating the fee schedule for any Fund at this time.

Proxy Voting Information

Proxy Voting Guidelines

A description of the policies and procedures Ivy Funds, Inc. uses to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling 1.800.777.6472 and (ii) on the Securities and Exchange Commission's (SEC) website at www.sec.gov.

Proxy Voting Records

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

Quarterly Portfolio Schedule Information

A complete schedule of portfolio holdings for the first and third quarters of each fiscal year is filed with the Securities and Exchange Commission (SEC) on the Corporation's Form N-Q, 60 days after the end of the quarter. This form may be obtained in the following ways:

* On the SEC's website at www.sec.gov.

* For review and copy at the SEC's Public Reference Room in Washington, DC. Information on the operations of the Public Reference Room may be obtained by calling 1.800.SEC.0330.

* On the Ivy Funds' website at www.ivyfunds.com.

To all Traditional IRA Planholders:

As required by law, we are hereby providing notice to you that income tax may be withheld automatically from any distribution or withdrawal from a traditional IRA. The Fund is generally required to withhold taxes unless you make a written election not to have taxes withheld. The election may be made on the distribution/withdrawal form provided by Waddell & Reed, Inc. which can be obtained from your Waddell & Reed representative or by submitting Internal Revenue Service Form W-4P. Once made, an election can be revoked by providing written notice to Waddell & Reed, Inc. If you elect not to have tax withheld you may be required to make payments of estimated tax. Penalties may be imposed by the IRS if withholding and estimated tax payments are not adequate.

THE IVY FUNDS FAMILY

Global/International Funds

Cundill Global Value Fund

European Opportunities Fund

International Fund

International Balanced Fund

International Growth Fund

International Value Fund

Pacific Opportunities Fund

Domestic Equity Funds

Capital Appreciation Fund (formerly, Tax-Managed Equity Fund)

Core Equity Fund

Dividend Income Fund

Large Cap Growth Fund

Mid Cap Growth Fund

Small Cap Growth Fund

Small Cap Value Fund

Value Fund

Fixed Income Funds

Bond Fund

High Income Fund

Limited-Term Bond Fund

Mortgage Securities Fund

Municipal Bond Fund

Money Market Funds

Cash Reserves Fund

Money Market Fund

Specialty Funds

Asset Strategy Fund

Balanced Fund

Global Natural Resources Fund

Real Estate Securities Fund

Science and Technology Fund

1.800.777.6472
Visit us online at www.ivyfunds.com

The Ivy Funds are managed by Ivy Investment Management Company and distributed by its subsidiary, Ivy Funds Distributor, Inc.

Investors should consider the investment objectives, risks, charges and expenses of a fund carefully before investing. For a prospectus containing this and other information for the Ivy Funds, call your financial advisor or visit us online at www.ivyfunds.com. Please read the prospectus carefully before investing.

WRR3000 (9-05)

ITEM 2. CODE OF ETHICS

Required in annual report only.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT

Required in annual report only.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Required in annual report only.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS

Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS.

See Item 1 Shareholder Report.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END

MANAGEMENT INVESTMENT COMPANIES

Not applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANIES AND AFFILIATED PURCHASERS

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant's board of directors.

ITEM 11. CONTROLS AND PROCEDURES.

(a)	The Registrant's Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, have concluded that such controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective and adequately designed to ensure that information required to be disclosed by the Registrant in its reports that it files or submits is accumulated and communicated to the Registrant's management, including the Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

(b)	There were no significant changes in the registrant's internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940, as amended) that occurred during the registrant's second fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

ITEM 12. EXHIBITS.

(a)(1) Required in annual report only.

(a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)).

Attached hereto as Exhibit 99.CERT.

(b) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)).

Attached hereto as Exhibit 99.906CERT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Ivy Funds, Inc.

(Registrant)

By /s/Kristen A. Richards

Kristen A. Richards, Vice President and Secretary

Date: December 7, 2005

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By /s/Henry J. Herrmann

Henry J. Herrmann, President and Principal Executive Officer

Date: December 7, 2005

By /s/Theodore W. Howard

Theodore W. Howard, Treasurer and Principal Financial Officer

Date: December 7, 2005

Ivy International Growth Fund

Ivy High Income Fund and Ivy Limited-Term Bond Fund

Ivy Asset Strategy Fund, Ivy Capital Appreciation Fund, Ivy Core Equity Fund, Ivy Large Cap Growth Fund, Ivy Mid Cap Growth Fund, Ivy Money Market Fund, Ivy Municipal Bond Fund, Ivy Science and Technology Fund, Ivy Small Cap Growth Fund

Global/International Funds

Domestic Equity Funds

Fixed Income Funds

Money Market Funds

Specialty Funds

1.800.777.6472Visit us online at www.ivyfunds.com

Ivy Asset Strategy Fund, Ivy Capital Appreciation Fund, Ivy Core Equity Fund,
Ivy Large Cap Growth Fund, Ivy Mid Cap Growth Fund, Ivy Money Market Fund,
Ivy Municipal Bond Fund, Ivy Science and Technology Fund, Ivy Small Cap Growth Fund

1.800.777.6472
Visit us online at www.ivyfunds.com