N-CSRS

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-6569

IVY FUNDS

(Exact name of registrant as specified in charter)

6300 Lamar Avenue, Overland Park, Kansas 66202

(Address of principal executive offices) (Zip code)

Mara D. Herrington

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, 2012

ITEM 1.    REPORTS TO STOCKHOLDERS.

Semiannual Report

September 30, 2012

Ivy Funds

Ivy Asset Strategy Fund

Ivy Asset Strategy New Opportunities Fund

Ivy Balanced Fund

Ivy Energy Fund

Ivy Global Natural Resources Fund

Ivy Real Estate Securities Fund

Ivy Science and Technology Fund

 

CONTENTS

Ivy Funds

President’s Letter	3
Illustration of Fund Expenses	4
Portfolio Highlights and Schedule of Investments:
Ivy Asset Strategy Fund	7
Ivy Asset Strategy New Opportunities Fund	16
Ivy Balanced Fund	19
Ivy Energy Fund	25
Ivy Global Natural Resources Fund	28
Ivy Real Estate Securities Fund	33
Ivy Science and Technology Fund	36
Statements of Assets and Liabilities	40
Statements of Operations	41
Statements of Changes in Net Assets	42
Financial Highlights	46
Notes to Financial Statements	60
Renewal of Investment Management Agreement	74
Proxy Voting Information	76
Quarterly Portfolio Schedule Information	76
IRA Disclosure	76

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

2 SEMIANNUAL REPORT 2012

PRESIDENT’S LETTER

Ivy Funds SEPTEMBER 30, 2012 (UNAUDITED)

Henry J. Herrmann, CFA

Dear Shareholder,

While the equity markets continued to climb throughout August 2012, this has been mostly a joyless bull market. Slow economic growth in the U.S., along with global economic and geopolitical concerns, have weighed on investor sentiment, creating uncertainty across financial markets. While equities are trading well above where they were at the start of 2012, the ride has not been smooth, illustrating once again the importance of taking a long view.

After a strong first quarter in 2012, economic activity slowed. Also concern increased about Europe’s inability to deal with the continent’s sovereign debt crisis. That issue peaked as Greece successfully wrestled through an election process that could have opened the door to Greece’s departure from the European Union – an event that might have become the first in a series of dominos leading to the eurozone’s eventual dissolution.

In the U.S., unemployment has remained too high, but has improved to 8.07 percent by September. Economic growth expectations have been lowered several times, with the Federal Reserve now expecting 2012 GDP between 1.7 and 2.0 percent.

Uncertainty, and investors’ risk aversion, may be best illustrated by U.S. Treasury yields at all-time lows, with the 10-year Treasury at 1.65 percent on September 30, 2012. On the equities side, the S&P 500 Index is up 2.3 percent (including reinvested dividends) for the six-month period ending September 30, 2012, as can be seen in the table.

There are clearly some challenges ahead. European officials still have far to go in creating some kind of fiscal union to better support their monetary union. It appears that China’s growth, while still robust, has tapered, adding to concerns about slowing global growth. Finally, there is the U.S. presidential election and so-call fiscal cliff to keep uncertainty elevated.

We will continue monitoring these and other economic developments in the months ahead but will be paying special attention to the election, which we continue to believe will be among the most important in recent history.

Economic Snapshot

	9/30/12		3/31/12
S&P 500 Index		1,440.67		1,408.47
MSCI EAFE Index		1,510.76		1,553.46
10-Year Treasury Yield		1.65%		2.235%
U.S. unemployment rate		8.07%		8.27%
30-year fixed mortgage rate		3.43%		3.97%
Oil price per barrel	$	92.19	$	103.02

Sources: Bloomberg, U.S. Department of Labor, CME

All government statistics shown are subject to periodic revision. The S&P 500 Index is an unmanaged index that tracks the stocks of 500 primarily large-cap U.S. companies. MSCI EAFE Index is an unmanaged index comprised of securities that represent the securities markets in Europe, Australasia and the Far East. It is not possible to invest directly in any of these indexes. Mortgage rates are from BankRate and reflect the overnight national average rate on a conventional 30-year fixed loan. Oil prices reflect the market price of West Texas intermediate grade crude.

As always, we thank you for your continued trust and partnership.

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.

2012 SEMIANNUAL REPORT 3

ILLUSTRATION OF FUND EXPENSES

Ivy Funds      (UNAUDITED)

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 table is 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, 2012.

Actual Expenses

The first section in the following table provides information about actual account values and actual expenses for each share class. You may use the information in this section, 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 section 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 table. 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 table, a customer is charged an annual fee of $18 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 following table. Additional fees have the effect of reducing investment returns.

Hypothetical Example for Comparison Purposes

The second section in the following table provides information about hypothetical account values and hypothetical expenses for each share class based on the Fund’s actual expense ratio and an assumed rate of return of five percent 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 five percent hypothetical example with the five percent hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table 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 section in the table 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.

Expenses paid may be impacted by expense reduction arrangements. If those arrangements had not been in place, expenses paid would have been higher. See Note 5 to the Financial Statements for further information.

	Actual(1)						Hypothetical(2)
Fund	Beginning Account Value 3-31-12		Ending Account Value 9-30-12		Expenses Paid During Period*		Beginning Account Value 3-31-12		Ending Account Value 9-30-12		Expenses Paid During Period*		Annualized Expense Ratio Based on the Six-Month Period
Ivy Asset Strategy Fund
Class A	$	1,000	$	996.80	$	4.99	$	1,000	$	1,020.11	$	5.05		0.99%
Class B	$	1,000	$	993.50	$	8.57	$	1,000	$	1,016.44	$	8.67		1.72%
Class C	$	1,000	$	993.50	$	8.47	$	1,000	$	1,016.58	$	8.57		1.69%
Class E	$	1,000	$	996.90	$	4.99	$	1,000	$	1,020.07	$	5.05		1.00%
Class I	$	1,000	$	998.00	$	3.80	$	1,000	$	1,021.28	$	3.84		0.76%
Class R	$	1,000	$	995.20	$	6.78	$	1,000	$	1,018.31	$	6.86		1.35%
Class Y	$	1,000	$	996.90	$	4.99	$	1,000	$	1,020.10	$	5.05		0.99%
Ivy Asset Strategy New Opportunities Fund
Class A	$	1,000	$	976.80	$	7.41	$	1,000	$	1,017.58	$	7.57		1.50%
Class B	$	1,000	$	971.60	$	12.32	$	1,000	$	1,012.59	$	12.58		2.49%
Class C	$	1,000	$	972.60	$	11.64	$	1,000	$	1,013.28	$	11.88		2.35%
Class E**	$	1,000	$	976.80	$	7.41	$	1,000	$	1,017.60	$	7.57		1.50%
Class I	$	1,000	$	977.80	$	6.23	$	1,000	$	1,018.81	$	6.36		1.25%
Class R	$	1,000	$	973.80	$	9.38	$	1,000	$	1,015.56	$	9.57		1.90%
Class Y	$	1,000	$	976.80	$	7.41	$	1,000	$	1,017.54	$	7.57		1.50%

4 SEMIANNUAL REPORT 2012

ILLUSTRATION OF FUND EXPENSES

Ivy Funds      (UNAUDITED)

	Actual(1)						Hypothetical(2)
Fund	Beginning Account Value 3-31-12		Ending Account Value 9-30-12		Expenses Paid During Period*		Beginning Account Value 3-31-12		Ending Account Value 9-30-12		Expenses Paid During Period*		Annualized Expense Ratio Based on the Six-Month Period
Ivy Balanced Fund
Class A	$	1,000	$	1,022.30	$	6.07	$	1,000	$	1,019.07	$	6.06		1.20%
Class B	$	1,000	$	1,018.70	$	9.89	$	1,000	$	1,015.29	$	9.87		1.95%
Class C	$	1,000	$	1,018.80	$	9.49	$	1,000	$	1,015.62	$	9.47		1.88%
Class E**	$	1,000	$	1,027.40	$	5.27	$	1,000	$	1,019.85	$	5.25		1.04%
Class I	$	1,000	$	1,023.40	$	4.75	$	1,000	$	1,020.40	$	4.75		0.93%
Class Y	$	1,000	$	1,022.30	$	5.97	$	1,000	$	1,019.18	$	5.96		1.17%
Ivy Energy Fund
Class A	$	1,000	$	959.00	$	7.84	$	1,000	$	1,017.07	$	8.07		1.60%
Class B	$	1,000	$	954.50	$	12.02	$	1,000	$	1,012.74	$	12.38		2.46%
Class C	$	1,000	$	955.70	$	11.05	$	1,000	$	1,013.81	$	11.38		2.25%
Class E**	$	1,000	$	961.00	$	6.47	$	1,000	$	1,018.45	$	6.66		1.32%
Class I	$	1,000	$	961.20	$	5.98	$	1,000	$	1,018.97	$	6.16		1.22%
Class Y	$	1,000	$	960.10	$	7.15	$	1,000	$	1,017.75	$	7.36		1.46%
Ivy Global Natural Resources Fund
Class A	$	1,000	$	947.60	$	7.40	$	1,000	$	1,017.47	$	7.67		1.52%
Class B	$	1,000	$	943.50	$	11.18	$	1,000	$	1,013.53	$	11.58		2.30%
Class C	$	1,000	$	944.50	$	10.21	$	1,000	$	1,014.59	$	10.58		2.09%
Class E	$	1,000	$	948.80	$	6.14	$	1,000	$	1,018.73	$	6.36		1.27%
Class I	$	1,000	$	949.40	$	5.17	$	1,000	$	1,019.77	$	5.35		1.05%
Class R	$	1,000	$	946.50	$	7.98	$	1,000	$	1,016.87	$	8.27		1.64%
Class Y	$	1,000	$	948.40	$	6.14	$	1,000	$	1,018.78	$	6.36		1.25%
Ivy Real Estate Securities Fund
Class A	$	1,000	$	1,033.70	$	8.54	$	1,000	$	1,016.63	$	8.47		1.68%
Class B	$	1,000	$	1,027.80	$	14.19	$	1,000	$	1,011.03	$	14.08		2.80%
Class C	$	1,000	$	1,030.00	$	12.08	$	1,000	$	1,013.16	$	11.98		2.38%
Class E	$	1,000	$	1,033.70	$	8.44	$	1,000	$	1,016.72	$	8.37		1.66%
Class I	$	1,000	$	1,036.80	$	5.80	$	1,000	$	1,019.37	$	5.76		1.14%
Class R	$	1,000	$	1,033.40	$	8.95	$	1,000	$	1,016.28	$	8.87		1.75%
Class Y	$	1,000	$	1,035.20	$	7.02	$	1,000	$	1,018.18	$	6.96		1.37%
Ivy Science and Technology Fund
Class A	$	1,000	$	1,041.10	$	7.14	$	1,000	$	1,018.11	$	7.06		1.39%
Class B	$	1,000	$	1,037.00	$	11.10	$	1,000	$	1,014.16	$	10.98		2.18%
Class C	$	1,000	$	1,037.60	$	10.60	$	1,000	$	1,014.64	$	10.48		2.08%
Class E	$	1,000	$	1,041.50	$	7.25	$	1,000	$	1,017.92	$	7.16		1.43%
Class I	$	1,000	$	1,042.90	$	5.41	$	1,000	$	1,019.78	$	5.35		1.06%
Class R	$	1,000	$	1,039.60	$	8.46	$	1,000	$	1,016.80	$	8.37		1.65%
Class Y	$	1,000	$	1,041.70	$	6.64	$	1,000	$	1,018.57	$	6.56		1.30%

See footnotes on page 6.

2012 SEMIANNUAL REPORT 5

ILLUSTRATION OF FUND EXPENSES

Ivy Funds      (UNAUDITED)

* 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, 2012, and divided by 365.

** Class closed to investment.

(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 last column of this section.

(2) This section uses a hypothetical five percent annual 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, or exchange fees.

6 SEMIANNUAL REPORT 2012

PORTFOLIO HIGHLIGHTS

Ivy Asset Strategy Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	78.2%
Consumer Discretionary	33.1%
Information Technology	15.2%
Energy	11.2%
Financials	9.0%
Health Care	4.9%
Industrials	2.7%
Consumer Staples	2.1%
Materials	0.0%
Bullion (Gold)	9.9%
Purchased Options	0.1%
Bonds	4.0%
Corporate Debt Securities	2.8%
Senior Loans	1.2%
United States Government and Government Agency Obligations	0.0%
Cash and Cash Equivalents	7.8%

Lipper Rankings

Category: Lipper Global Flexible Portfolio Funds	Rank	Percentile
1 Year	21/347	7
3 Year	108/191	57
5 Year	15/113	14
10 Year	10/51	20

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Country Weightings

North America	38.5%
United States	38.5%
Other North America	0.0%
Europe	25.0%
United Kingdom	8.4%
Germany	6.3%
Other Europe	10.3%
Pacific Basin	18.7%
China	11.5%
Hong Kong	5.1%
Other Pacific Basin	2.1%
Bullion (Gold)	9.9%
South America	0.0%
Cash and Cash Equivalents and Options	7.9%

Top 10 Equity Holdings

Company	Country	Sector
Wynn Resorts, Limited	United States	Consumer Discretionary
Sands China Ltd.	China	Consumer Discretionary
Volkswagen AG	Germany	Consumer Discretionary
ConocoPhillips	United States	Energy
Apple Inc.	United States	Information Technology
Baidu.com, Inc., ADR	China	Information Technology
Compagnie Financiere Richemont S.A.	Switzerland	Consumer Discretionary
CBS Corporation, Class B	United States	Consumer Discretionary
Pfizer Inc.	United States	Health Care
AIA Group Limited	Hong Kong	Financials

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

2012 SEMIANNUAL REPORT 7

SCHEDULE OF INVESTMENTS

Ivy Asset Strategy Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Apparel, Accessories & Luxury Goods – 3.9%
Compagnie Financiere Richemont S.A. (A)(B)		11,098	$	665,545
Prada S.p.A. (A)(B)		8,045		60,073
Prada S.p.A. (A)(B)(C)		37,835		282,516
				1,008,134
Application Software – 0.9%
Intuit Inc.		3,972		233,889
Asset Management & Custody Banks – 3.8%
Apollo Global Management, LLC		11,988		175,737
Blackstone Group L.P. (The)		25,435		363,213
Carlyle Group L.P. (The) (A)		8,822		231,476
KKR & Co. L.P.		12,023		181,674
				952,100
Automobile Manufacturers – 4.1%
Bayerische Motoren Werke AG (B)		7,076		517,476
Hyundai Motor Company (B)		2,313		524,440
				1,041,916
Broadcasting – 2.5%
CBS Corporation, Class B		17,398		632,058
Casinos & Gaming – 12.3%
Galaxy Entertainment Group Limited (A)(B)(C)		158,589		531,763
Sands China Ltd. (B)		37,542		140,163
Sands China Ltd. (B)(C)		255,021		952,130
Wynn Macau, Limited (B)		130,095		351,493
Wynn Resorts, Limited (D)		10,049		1,160,027
				3,135,576
Computer Hardware – 3.1%
Apple Inc. (A)		1,199		799,978
Construction & Farm Machinery & Heavy Trucks – 2.7%
Caterpillar Inc. (E)		4,362		375,289
Cummins Inc.		3,518		324,395
				699,684
Diversified Banks – 1.0%
China Minsheng Banking Corp., Ltd., H Shares (A)(B)		63,172		49,859
China Minsheng Banking Corp., Ltd., H Shares (A)(B)(C)		249,525		196,941
				246,800

COMMON STOCKS (Continued)	Shares		Value
Fertilizers & Agricultural Chemicals – 0.0%
Mosaic Company (A)		211	$	12,167
Hotels, Resorts & Cruise Lines – 1.7%
Starwood Hotels & Resorts Worldwide, Inc. (E)		7,296		422,905
Integrated Oil & Gas – 5.6%
Exxon Mobil Corporation		2,703		247,217
Occidental Petroleum Corporation (E)		3,997		343,956
Royal Dutch Shell plc, Class A (B)		7,893		272,852
StatoilHydro ASA (B)		9,815		253,378
Total S.A. (B)		6,294		312,176
				1,429,579
Internet Software & Services – 6.5%
Baidu.com, Inc., ADR (A)		5,847		683,010
Google Inc., Class A (A)		609		459,113
Tencent Holdings Limited (B)		14,915		508,198
				1,650,321
IT Consulting & Other Services – 1.8%
Cognizant Technology Solutions Corporation, Class A (A)(E)		6,428		449,476
Life & Health Insurance – 3.2%
AIA Group Limited (A)(B)		63,114		235,229
AIA Group Limited (A)(B)(C)		147,218		548,695
Ping An Insurance Group Co of China Ltd (B)		6,887		45,958
				829,882
Movies & Entertainment – 3.0%
Delta Topco Limited (A)(C)(F)		718,555		537,290
News Corporation Limited, Class A (A)		9,410		230,817
				768,107
Oil & Gas Drilling – 1.0%
Seadrill Limited (B)		6,449		251,799
Oil & Gas Exploration & Production – 3.2%
ConocoPhillips (E)		14,283		816,696
Oil & Gas Refining & Marketing – 1.4%
Phillips 66		7,971		369,638
Pharmaceuticals – 4.9%
GlaxoSmithKline plc (B)		13,591		313,291
Pfizer Inc.		24,158		600,329
Sanofi-Aventis (B)		4,099		349,527
				1,263,147

COMMON STOCKS (Continued)	Shares		Value
Restaurants – 1.3%
Starbucks Corporation		6,504	$	330,098
Semiconductor Equipment – 1.8%
ASML Holding N.V., Ordinary Shares (B)		8,519		455,289
Semiconductors – 1.1%
Intel Corporation		12,770		289,617
Specialized Finance – 1.0%
CME Group Inc. (E)		4,571		261,935
Tobacco – 2.1%
Philip Morris International Inc.		6,061		545,108
TOTAL COMMON STOCKS – 73.9%			$	18,895,899
(Cost: $13,782,365)
PREFERRED STOCKS
Automobile Manufacturers – 4.3%
Volkswagen AG, 2.260% (A)(B)		4,632		844,869
Volkswagen AG, 2.260% (A)(B)(C)		1,386		252,807
				1,097,676
TOTAL PREFERRED STOCKS – 4.3%			$	1,097,676
(Cost: $527,974)
PURCHASED OPTIONS	Number of Contracts (Unrounded)
BHP Billiton Ltd,
Call $70.00, Expires 11–17–12, OTC (Ctrpty: Morgan Stanley & Co., Inc.)		1,219		236
Caterpillar Inc:
Call $97.50, Expires 11–17–12, OTC (Ctrpty: Deutsche Bank AG)		4,002		124

8 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Asset Strategy Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

PURCHASED OPTIONS (Continued)	Number of Contracts (Unrounded)		Value
Call $97.50, Expires 1–22–13, OTC (Ctrpty: Deutsche Bank AG)		4,001	$	506
Cisco Systems, Inc.:
Call $19.00, Expires 10–22–12, OTC (Ctrpty: Deutsche Bank AG)		48,187		1,855
Call $19.00, Expires 10–22–12		41,584		1,601
Compagnie Financiere Richemont S.A.:
Call CHF64.00, Expires 11–16–12, OTC (Ctrpty: JPMorgan Chase Bank N.A.) (G)		3,279		112
Call CHF66.00, Expires 11–16–12, OTC (Ctrpty: JPMorgan Chase Bank N.A.) (G)		4,001		60
Call CHF66.00, Expires 12–21–12, OTC (Ctrpty: JPMorgan Chase Bank N.A.) (G)		4,003		175
Call CHF68.00, Expires 12–21–12, OTC (Ctrpty: Morgan Stanley & Co., Inc.) (G)		4,004		98
Cummins Inc.:
Call $110.00, Expires 11–19–12, OTC (Ctrpty: Barclays Bank plc)		1,600		44
Call $115.00, Expires 12–22–12, OTC (Ctrpty: Morgan Stanley & Co., Inc.)		1,601		52
Euro (Currency):
Put $1.16, Expires 10–25–12, OTC (Ctrpty: Deutsche Bank AG)		1		4
Put $1.18, Expires 10–26–12, OTC (Ctrpty: Deutsche Bank AG)		1		16
Put $1.19, Expires 11–9–12, OTC (Ctrpty: Deutsche Bank AG)		1		92
Put $1.21, Expires 11–21–12, OTC (Ctrpty: Deutsche Bank AG)		1		390

PURCHASED OPTIONS (Continued)	Number of Contracts (Unrounded)		Value
Freeport-McMoRan Copper & Gold Inc., Class B,
Call $41.00, Expires 11–19–12		6,573	$	835
Goldman Sachs Group, Inc. (The),
Call $135.00, Expires 1–22–13, OTC (Ctrpty: Barclays Bank plc)		7,194		633
Google Inc., Class A,
Call $800.00, Expires 1–22–13, OTC (Ctrpty: Barclays Bank plc)		1,278		3,060
Home Depot, Inc. (The),
Call $65.00, Expires 1–22–13, OTC (Ctrpty: UBS AG)		4,230		307
Intel Corp,
Call $25.00, Expires 12–22–12		38,360		786
International Business Machines Corporation,
Call $215.00, Expires 1–22–13, OTC (Ctrpty: Barclays Bank plc)		4,395		1,769
JPMorgan Chase & Co.,
Call $45.00, Expires 1–22–13, OTC (Ctrpty: Citibank N.A.)		21,584		1,101
Microsoft Corp,
Call $33.00, Expires 12–22–12		28,770		590
Oracle Corporation,
Call $35.00, Expires 1–22–13, OTC (Ctrpty: JPMorgan Chase Bank N.A.)		27,172		978
QUALCOMM Incorporated:
Call $67.50, Expires 1–22–13, OTC (Ctrpty: Deutsche Bank AG)		9,775		1,491
Call $70.00, Expires 1–22–13, OTC (Ctrpty: Deutsche Bank AG)		4,619		436
Rio Tinto plc, ADR:
Call $52.50, Expires 10–22–12, OTC (Ctrpty: Goldman Sachs International)		2,244		34
Call $62.50, Expires 10–22–12, OTC (Ctrpty: Deutsche Bank AG)		2,402		6

PURCHASED OPTIONS (Continued)	Number of Contracts (Unrounded)		Value
Starwood Hotels & Resorts Worldwide Inc,
Call $60.00, Expires 11–17–12, OTC (Ctrpty: Morgan Stanley & Co., Inc.)		3,766	$	653
Union Pacific Corporation:
Call $125.00, Expires 1–22–13, OTC (Ctrpty: UBS AG)		5,067		1,454
Call $130.00, Expires 1–22–13, OTC (Ctrpty: UBS AG)		2,157		314
Volkswagen AG:
Call EUR160.00, Expires 12–21–12, OTC (Ctrpty: Morgan Stanley & Co., Inc.) (G)		3,445		1,076
Call EUR160.00, Expires 12–21–12, OTC (Ctrpty: Citibank N.A.) (G)		3,023		944
Wells Fargo & Co,
Call $39.00, Expires 1–19–13, OTC (Ctrpty: Deutsche Bank AG)		24,781		595
TOTAL PURCHASED OPTIONS – 0.1%			$	22,427
(Cost: $52,764)
CORPORATE DEBT SECURITIES	Principal
Automobile Manufacturers – 0.0%
Toyota Motor Credit Corporation, 2.910%, 1–18–15 (H)	$	325		326
Homebuilding – 0.0%
Desarrolladora Homex, S.A. de C.V., 7.500%, 9–28–15		470		470
Independent Power Producers & Energy Traders – 0.0%
CESP – Companhia Energetica de Sao Paulo, 9.750%, 1–15–15 (C)(G)		BRL11,900		8,408
Movies & Entertainment – 2.8%
Delta Topco Limited, 10.000%,11–24–60 (F)(I)	$	702,548		702,164
TOTAL CORPORATE DEBT SECURITIES – 2.8%			$	711,368
(Cost: $717,461)

2012 SEMIANNUAL REPORT 9

SCHEDULE OF INVESTMENTS

Ivy Asset Strategy Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

SENIOR LOANS	Principal		Value
Movies & Entertainment – 1.2%
Formula One Holdings Ltd. and Alpha Topco Limited, 6.250%, 4–30–18 (H)	$	298,614	$	300,674
TOTAL SENIOR LOANS – 1.2%			$	300,674
(Cost: $293,037)
UNITED STATES GOVERNMENT AGENCY OBLIGATIONS
Mortgage-Backed Obligations – 0.0%
Federal Home Loan Mortgage Corporation Agency REMIC/CMO:
4.500%, 8–15–17 (J)		14		—	*
5.500%, 9–15–17 (J)		804		48
5.000%, 11–15–17 (J)		254		6
5.000%, 5–15–18 (J)		1,112		97
5.000%, 4–15–19 (J)		76		2
5.500%, 3–15–23 (J)		804		82
5.000%, 5–15–23 (J)		4		—	*
5.000%, 6–15–23 (J)		284		3
5.000%, 8–15–23 (J)		24		—	*
5.500%, 10–15–25 (J)		1,215		169
5.500%, 3–15–31 (J)		10		—	*
5.500%, 10–15–32 (J)		646		21
5.500%, 1–15–33 (J)		630		69
5.500%, 5–15–33 (J)		1,096		178
5.000%, 7–15–33 (J)		42		—	*
6.000%, 11–15–35 (J)		984		158
Federal National Mortgage Association Agency REMIC/CMO:
5.500%, 6–25–23 (J)		1,034		124
5.000%, 8–25–23 (J)		146		3
5.000%, 11–25–23 (J)		428		15
5.000%, 8–15–31 (J)		767		16
5.500%, 8–25–33 (J)		2,065		241
5.500%, 12–25–33 (J)		1,473		134
5.500%, 4–25–34 (J)		2,243		282
5.500%, 8–25–35 (J)		1,642		303
5.500%, 11–25–36 (J)		4,363		547
Government National Mortgage Association Agency REMIC/CMO:
5.000%, 6–20–31 (J)		74		1
5.500%, 3–20–32 (J)		815		62
5.000%, 10–20–32 (J)		1,488		114
7.000%, 5–20–33 (J)		2,897		891
5.500%, 7–16–33 (J)		1,449		311
5.000%, 7–20–33 (J)		38		2
5.500%, 11–20–33 (J)		239		18
5.500%, 6–20–35 (J)		2,499		404
5.500%, 7–20–35 (J)		1,251		190
5.500%, 10–16–35 (J)		2,423		418
				4,909
TOTAL UNITED STATES GOVERNMENT AGENCY OBLIGATIONS – 0.0%			$	4,909
(Cost: $12,506)

BULLION – 9.9%	Troy Ounces		Value
Gold		1,426	$	2,529,032
(Cost: $1,518,361)
SHORT-TERM SECURITIES	Principal
Certificate of Deposit – 0.3%
Banco del Estado de Chile:
0.260%, 10–1–12	$	5,000		5,000
0.290%, 10–9–12		20,000		20,000
0.280%, 10–17–12		10,000		10,000
0.220%, 11–26–12		25,000		25,000
0.220%, 11–26–12		25,000		25,000
				85,000
Commercial Paper – 6.2%
Air Products and Chemicals, Inc.:
0.150%, 10–2–12 (K)		15,000		15,000
0.150%, 10–4–12 (K)		18,500		18,500
0.110%, 10–10–12 (K)		17,000		16,999
American Honda Finance Corp. (GTD by Honda Motor Co.):
0.130%, 10–11–12 (K)		25,000		24,999
0.140%, 11–15–12 (K)		10,000		9,998
0.160%, 12–6–12 (K)		25,000		24,993
Bank of Nova Scotia:
0.050%, 10–1–12 (K)		40,000		40,000
0.125%, 10–3–12 (K)		30,000		30,000
0.140%, 11–26–12 (K)		12,600		12,597
Bemis Company, Inc., 0.390%, 10–29–12 (K)		10,750		10,747
BHP Billiton Finance (USA) Limited (GTD by BHP Billiton Limited):
0.180%, 10–2–12 (K)		46,000		46,000
0.150%, 10–15–12 (K)		15,000		14,999
0.160%, 10–16–12 (K)		11,844		11,843
Campbell Soup Company:
0.240%, 11–26–12 (K)		47,500		47,482
0.300%, 12–20–12 (K)		12,000		11,992
CVS Caremark Corporation, 0.330%, 10–1–12 (K)		64,000		64,001
Danaher Corporation:
0.160%, 10–15–12 (K)		10,000		9,999
0.150%, 10–29–12 (K)		40,000		39,995
Diageo Capital plc (GTD by Diageo plc), 0.300%, 10–1–12 (K)		3,028		3,028
E.I. du Pont de Nemours and Company:
0.130%, 11–2–12 (K)		47,000		46,994
0.150%, 11–6–12 (K)		11,185		11,183
0.140%, 11–7–12 (K)		47,000		46,993
Ecolab Inc., 0.340%, 10–4–12 (K)		20,000		19,999
Emerson Electric Co.:
0.110%, 10–18–12 (K)		30,000		29,998
0.130%, 11–19–12 (K)		9,300		9,298

SHORT-TERM SECURITIES (Continued)	Principal		Value
Commercial Paper (Continued)
Fannie Mae Discount Notes:
0.130%, 12–19–12 (K)	$	14,000	$	13,996
0.120%, 12–20–12 (K)		5,700		5,698
0.100%, 12–26–12 (K)		24,200		24,194
Freddie Mac Discount Notes:
0.130%, 12–11–12 (K)		59,000		58,985
0.130%, 12–18–12 (K)		58,300		58,284
General Mills, Inc., 0.300%, 10–16–12 (K)		30,000		29,996
GlaxoSmithKline Finance plc (GTD by GlaxoSmithKline plc), 0.180%, 10–4–12 (K)		20,000		20,000
Heinz (H.J.) Finance Co. (GTD by Heinz (H.J.) Co.):
0.290%, 10–24–12 (K)		20,000		19,996
0.290%, 10–25–12 (K)		12,000		11,998
Hewlett-Packard Company:
0.400%, 10–2–12 (K)		12,000		12,000
0.400%, 10–5–12 (K)		10,000		10,000
John Deere Canada ULC (GTD by Deere & Company), 0.150%, 10–2–12 (K)		15,000		15,000
John Deere Financial Limited (GTD by John Deere Capital Corporation):
0.180%, 10–4–12 (K)		26,700		26,700
0.150%, 10–15–12 (K)		34,000		33,998
0.160%, 10–17–12 (K)		11,000		10,999
0.140%, 10–19–12 (K)		16,500		16,499
0.140%, 10–19–12 (K)		5,000		5,000
0.160%, 10–23–12 (K)		13,000		12,999
Kellogg Co., 0.220%, 10–1–12 (K)		8,000		8,000
Kroger Co. (The), 0.400%, 10–3–12 (K)		34,000		33,999
L’Air Liquide S.A., 0.160%, 10–12–12 (K)		48,477		48,475
McCormick & Co. Inc.:
0.300%,10–26–12 (K)		17,000		16,997
0.280%, 11–5–12 (K)		6,118		6,116
Medtronic, Inc.:
0.130%,10–26–12 (K)		11,000		10,999
0.160%,12–13–12 (K)		30,000		29,990
Novartis Finance Corp., 0.110%, 10–2–12 (K)		4,000		4,000
PACCAR Financial Corp. (GTD by PACCAR Inc.), 0.120%, 10–18–12 (K)		18,000		17,999
Peninsula Ports Auth of VA, Coal Terminal Rev Rfdg Bonds (Dominion Terminal Assoc Proj), Ser 1987-A (GTD by U.S. Bank, N.A.), 0.170%, 10–1–12 (K)		10,000		10,000
Rabobank USA Financial Corp. (GTD by Rabobank Nederland):
0.160%, 10–11–12 (K)		17,185		17,184
0.160%, 11–2–12 (K)		40,000		39,994

10 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Asset Strategy Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

SHORT-TERM SECURITIES (Continued)	Principal		Value
Commercial Paper (Continued)
River Fuel Company #2, Inc. (GTD by Bank of Nova Scotia), 0.160%, 12–7–12 (K)	$	7,477	$	7,475
River Fuel Funding Company #3, Inc. (GTD by Bank of Nova Scotia), 0.180%, 10–31–12 (K)		5,500		5,499
Straight-A Funding, LLC (GTD by Federal Financing Bank):
0.130%, 10–17–12 (K)		5,350		5,350
0.160%, 11–13–12 (K)		5,000		4,999
Straight-A Funding, LLC (GTD by Federal FinancingBank), 0.180%, 11–5–12 (K)		5,000		4,999
Toronto-Dominion Holdings USA Inc., 0.140%, 10–25–12 (K)		40,000		39,996
Total Capital Canada Ltd. (GTD by Total S.A.), 0.140%, 11–6–12 (K)		40,000		39,994
Toyota Motor Credit Corporation, 0.110%, 11–29–12 (K)		12,350		12,348
United Technologies Corporation, 0.120%, 10–17–12 (K)		35,000		34,998
Verizon Communications Inc.:
0.320%, 11–13–12 (K)		40,000		39,984
0.380%, 12–6–12 (K)		7,000		6,995
0.410%, 12–11–12 (K)		20,000		19,983
Wal-Mart Stores, Inc.:
0.090%, 10–12–12 (K)		40,000		39,999
0.110%, 10–22–12 (K)		10,000		9,999
0.090%, 10–25–12 (K)		15,418		15,417
Wisconsin Electric Power Co., 0.190%, 10–3–12 (K)		32,000		32,000
				1,567,767
Master Note – 0.0%
Toyota Motor Credit Corporation, 0.122%, 10–5–12 (L)		38		38
Municipal Obligations – Taxable – 0.9%
CA Hlth Fac Fin Auth, Var Rate Hosp Rev Bonds (Adventist Hlth Sys/West), Ser 1998B (GTD by Bank of America, N.A.), 0.170%, 10–1–12 (L)		11,800		11,800
CA Muni Fin Auth, Recovery Zone Fac Bonds (Chevron U.S.A. Inc. Proj), Ser 2010C (GTD by Chevron Corporation), 0.190%, 10–1–12 (L)		7,790		7,790

SHORT-TERM SECURITIES (Continued)	Principal		Value
Municipal Obligations – Taxable (Continued)
CA Pollutn Ctl Fin Auth, Pollutn Ctl Rfdg Rev Bonds (Pacific Gas and Elec Co), Ser C (GTD by JPMorgan Chase Bank, N.A.), 0.200%, 10–1–12 (L)	$	13,570	$	13,570
CA Statewide Cmnty Dev Auth, Multifam Hsng Rev Bonds (1030 Post Street Apts ), Ser 2005 Y, 0.180%, 10–4–12 (L)		2,300		2,300
CA Statewide Cmnty Dev Auth, Multifam Hsng Rev Bonds (Wyndover Apts), Ser 2004 LL (GTD by United States Government), 0.170%, 10–4–12 (L)		2,000		2,000
City of Whittier, Hlth Fac Rev Bonds (Presbyterian Intercmnty Hosp), Ser 2009 (GTD by U.S. Bank, N.A.):
0.150%, 10–3–12 (L)		9,571		9,571
0.160%, 10–3–12 (L)		2,672		2,672
FL Muni Power Agy, All-Requirements Power Supply Proj Var Rate Demand Rfdg Rev Bonds, Ser 2008C (Bank of America, N.A.), 0.200%, 10–1–12 (L)		5,125		5,125
Hosp Fac Auth of Clackamas Cnty, OR, Rev Bonds (Legacy Hlth Sys), Ser 2008B (GTD by U.S. Bank, N.A.), 0.180%, 10–3–12 (L)		1,905		1,905
Irvine Unif Sch Dist, Cmnty Fac Dist No. 09-1, Adj Rate Spl Tax Bonds, Ser 2012 A (GTD by U.S. Bank, N.A.), 0.170%, 10–1–12 (L)		23,085		23,085
LA Pub Fac Auth, Rev Bonds (Air Products and Chemicals Proj), Ser 2008A (GTD by Air Products and Chemicals, Inc.), 0.180%, 10–1–12 (L)		8,241		8,241
Los Angeles, CA, Wastewater Sys Sub Rev Bonds, Var Rate Rfdg, Ser 2008-A (GTD by Bank of America, N.A.), 0.180%, 10–4–12 (L)		2,837		2,837
MA Hlth and Edu Fac Auth, Var Rate Rev Bonds, Dana-Farber Cancer Institute Issue, Ser 2008L-1 (GTD by JPMorgan Chase Bank, N.A.), 0.170%, 10–4–12 (L)		3,500		3,500

SHORT-TERM SECURITIES (Continued)	Principal		Value
Municipal Obligations – Taxable (Continued)
MS Business Fin Corp, Gulf Opp Zone Indl Dev Rev Bonds (Chevron U.S.A. Inc. Proj), Ser 2007B, 0.190%, 10–1–12 (L)	$	40,215	$	40,215
MS Business Fin Corp, Gulf Opp Zone Indl Dev Rev Bonds (Chevron U.S.A. Inc. Proj), Ser 2007D (GTD by Chevron Corporation), 0.190%, 10–1–12 (L)		7,235		7,235
MS Business Fin Corp, Gulf Opp Zone Indl Dev Rev Bonds (Chevron U.S.A. Inc. Proj), Ser 2010J (GTD by Chevron Corporation), 0.190%, 10–1–12 (L)		7,500		7,500
MS Business Fin Corp, Gulf Opp Zone Indl Dev Var Rev Bonds (Chevron U.S.A. Inc. Proj), Ser D (GTD byChevron Corporation), 0.190%, 10–1–12 (L)		15,000		15,000
MS Business Fin Corp, Gulf Opp Zone Indl Dev Var Rev Bonds (Chevron U.S.A. Inc. Proj), Ser E (GTD by Chevron Corporation), 0.190%, 10–1–12 (L)		23,822		23,822
NY Hsng Fin Agy, Clinton Park Phase II Hsng Rev Bonds, Ser 2011 A-1 (GTD by Wells Fargo Bank, N.A.), 0.180%, 10–3–12 (L)		5,000		5,000
NY Hsng Fin Agy, Related West 30th Street Hsng Rev Bonds, Ser 2012 A-1 (GTD by Wells Fargo Bank, N.A.), 0.180%, 10–3–12 (L)		9,141		9,141
NYC GO Bonds, Fiscal 2006 Ser E (GTD by Bank of America,N.A.), 0.210%, 10–4–12 (L)		14,091		14,091
NYC Hsng Dev Corp, Multi-Fam Mtg Rev Bonds (Target V Apt), Ser 2006 A (GTD by Citibank, N.A.), 0.200%, 10–3–12 (L)		6,300		6,300
Port Arthur Navigation Dist Indl Dev Corp, Exempt Fac Var Rate Rev Bonds (Air Products Proj), Ser 2006 (GTD by Air Products and Chemicals, Inc.), 0.180%, 10–1–12 (L)		15,780		15,780

2012 SEMIANNUAL REPORT 11

SCHEDULE OF INVESTMENTS

Ivy Asset Strategy Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

SHORT-TERM SECURITIES (Continued)	Principal		Value
Municipal Obligations – Taxable (Continued)
Santa Clara Cnty Fin Auth, Var Rate Rev Bonds, El Camino Hosp, Ser 2009A (GTD by Wells Fargo Bank, N.A.), 0.170%, 10–3–12 (L)	$	2,000	$	2,000
Taxable Cert of Part, Denver Pub Sch, Var Rate Rfdg Ser 2011A-3, 0.170%, 10–3–12 (L)		862		862
The Indl Dev Auth of Phoenix, AZ, Adj Mode Multifam Hsng Rev Rfdg Bonds (Paradise Lakes Apt Proj), Ser 2007A (GTD by Wachovia Bank, N.A.), 0.190%, 10–4–12 (L)		9,310		9,310
Uinta Cnty, WY, Pollutn Ctl Rfdg Rev Bonds (Chevron U.S.A. Inc. Proj), Ser 1992 (GTD by Chevron Corporation), 0.190%, 10–1–12 (L)		2,250		2,250
				252,902
Notes – 0.1%
Bank of Nova Scotia, 0.750%, 10–18–12 (L)		12,000		12,003

SHORT-TERM SECURITIES (Continued)	Principal		Value
Notes (Continued)
General Electric Capital Corporation, 5.250%, 10–19–12	$	1,500	$	1,504
				13,507
Treasury Bills – 0.1%
United States Treasury Bills:
0.100%, 12–27–12		6,900		6,898
0.150%, 1–3–13		5,000		4,998
0.140%, 3–28–13		14,930		14,920
				26,816
United States Government Agency Obligations – 0.2%
Overseas Private Investment Corporation (GTD by United States Government):
0.160%, 10–3–12 (L)		3,000		3,000
0.170%, 10–3–12 (L)		25,000		25,000
0.170%, 10–3–12 (L)		16,899		16,899
				44,899

SHORT-TERM SECURITIES (Continued)	Principal	Value
TOTAL SHORT-TERM SECURITIES – 7.8%		$	1,990,929
(Cost: $1,990,929)
TOTAL INVESTMENT SECURITIES – 100.0%		$	25,552,914
(Cost: $18,895,397)
LIABILITIES, NET OF CASH AND OTHER ASSETS – 0.0%			(9,619	)
NET ASSETS – 100.0%		$	25,543,295

Notes to Schedule of Investments

* Not shown due to rounding.

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

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

(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, 2012, the total value of these securities amounted to $3,310,550 or 13.0% of net assets.

(D) Deemed to be an affiliate due to the Fund owning at least 5% of the voting securities.

(E) All or a portion of the security position is held in collateralized accounts for OTC derivatives collateral as governed by International Swaps and Derivatives Association, Inc. Master Agreements.

(F) Restricted and illiquid securities. At September 30, 2012, the Fund owned the following restricted and illiquid securities:

Security	Acquisition Date(s)	Shares	Cost		Market Value
Delta Topco Limited	1–23–12 to 5–1–12	718,555	$	462,498	$	537,290
		Principal
Delta Topco Limited	1–23–12 to 6–18–12	$702,548		711,109		702,164
			$	1,173,607	$	1,239,454

The total value of these securities represented 4.9% of net assets at September 30, 2012.

(G) Principal amount and exercise prices are denominated in the indicated foreign currency, where applicable (BRL - Brazilian Real, CHF - Swiss Franc and EUR - Euro).

(H) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012.

(I) Payment-in-kind bonds.

(J) Interest-only security. Amount shown as principal represents notional amount for computation of interest.

(K) Rate shown is the yield to maturity at September 30, 2012.

(L) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

12 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Asset Strategy Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

The following forward foreign currency contracts were outstanding at September 30, 2012:

Type	Currency	Counterparty	Principal Amount of Contract (Denominated in Indicated Currency)		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
Sell	Euro	Deutsche Bank AG		170,575		10–15–12	$	858	$	—
Sell	Euro	Morgan Stanley International		242,920		10–15–12		1,174		—
Sell	Euro	Goldman Sachs International		608,750		10–15–12		3,365		—
							$	5,397	$	—

The following written options were outstanding at September 30, 2012 (contracts and exercise prices unrounded):

Underlying Security	Counterparty, if OTC	Type	Number of Contracts		Expiration Month		Exercise Price		Premium Received		Market Value
Caterpillar Inc	Deutsche Bank AG	Put		4,002		November 2012		$       80.00	$	740	$	(680	)
	Deutsche Bank AG	Put		4,001		January 2013		80.00		1,135		(1,340	)
Compagnie Financiere Richemont S.A.	JPMorgan Chase Bank N.A.	Put		4,001		November 2012		CHF  56.00		675		(919	)
	Morgan Stanley & Co., Inc.	Put		4,004		December 2012		54.00		754		(886	)
	JPMorgan Chase Bank N.A.	Put		4,003		December 2012		54.00		773		(885	)
Cummins Inc.	Barclays Bank plc	Put		1,600		November 2012		$       92.50		482		(768	)
	Morgan Stanley & Co., Inc.	Put		632		December 2012		87.50		209		(253	)
	Morgan Stanley & Co., Inc.	Put		969		December 2012		90.00		345		(485	)
Euro (Currency)	Deutsche Bank AG	Call		1		October 2012		1.25		3,916		(13,873	)
	Deutsche Bank AG	Call		1		October 2012		1.27		3,668		(8,279	)
	Deutsche Bank AG	Call		1		November 2012		1.27		3,584		(10,711	)
	Deutsche Bank AG	Call		1		November 2012		1.29		3,621		(6,945	)
Goldman Sachs Group, Inc. (The)	Barclays Bank plc	Put		7,194		January 2013		110.00		2,293		(3,975	)
Google Inc., Class A	Barclays Bank plc	Put		1,278		January 2013		650.00		1,719		(1,316	)
Home Depot, Inc. (The)	UBS AG	Put		4,230		January 2013		55.00		516		(412	)
Intel Corp	N/A	Put		38,360		December 2012		21.00		1,653		(1,803	)
International Business Machines Corporation	Barclays Bank plc	Put		4,395		January 2013		185.00		1,346		(949	)
JPMorgan Chase & Co.	Citibank N.A.	Put		21,584		January 2013		37.00		2,374		(2,612	)
Microsoft Corp	N/A	Put		28,770		December 2012		28.00		1,496		(1,769	)
Oracle Corporation	JPMorgan Chase Bank N.A.	Put		27,172		January 2013		29.00		2,144		(2,119	)
QUALCOMM Incorporated	Deutsche Bank AG	Put		9,775		January 2013		57.50		1,955		(1,716	)
	Deutsche Bank AG	Put		4,619		January 2013		60.00		882		(1,192	)
Rio Tinto plc, ADR	Deutsche Bank AG	Put		2,402		October 2012		47.50		765		(480	)
Union Pacific Corporation	UBS AG	Put		7,224		January 2013		110.00		1,913		(2,127	)
Volkswagen AG	Morgan Stanley & Co., Inc.	Put		3,445		December 2012		EUR135.00		2,640		(2,457	)
	Citibank N.A.	Put		2,540		December 2012		135.00		1,927		(1,812	)
Wells Fargo & Co	Deutsche Bank AG	Put		24,781		January 2013		$       33.00		1,870		(2,875	)
									$	45,395	$	(73,638	)

2012 SEMIANNUAL REPORT 13

SCHEDULE OF INVESTMENTS

Ivy Asset Strategy Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks
Consumer Discretionary	$	6,801,504	$	—	$	537,290
Consumer Staples		545,108		—		—
Energy		2,867,712		—		—
Financials		2,290,717		—		—
Health Care		1,263,147		—		—
Industrials		699,684		—		—
Information Technology		3,878,570		—		—
Materials		12,167		—		—
Total Common Stocks	$	18,358,609	$	—	$	537,290
Preferred Stocks		1,097,676		—		—
Purchased Options		3,812		18,615		—
Corporate Debt Securities		—		9,204		702,164
Senior Loans		—		300,674		—
United States Government Agency Obligations		—		4,909		—
Bullion		2,529,032		—		—
Short-Term Securities		—		1,990,929		—
Total	$	21,989,129	$	2,324,331	$	1,239,454
Forward Foreign Currency Contracts	$	—	$	5,397	$	—
Liabilities
Written Options	$	3,572	$	70,066	$	—

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

	Common Stocks			Corporate Debt Securities
Beginning Balance 4-1-12	$	26,811		$	712,767
Net realized gain (loss)		—			—
Net change in unrealized appreciation (depreciation)		(3,256	)		(8,653	)
Purchases		513,735			337,025
Sales		—			(338,975	)
Transfers into Level 3 during the period		—			—
Transfers out of Level 3 during the period		—			—
Ending Balance 9-30-12	$	537,290		$	702,164
Net change in unrealized appreciation (depreciation) for all Level 3 investments still held as of 9-30-12	$	(3,256	)	$	(8,946	)

Quantitative Information about Level 3 fair value measurements:

At September 30, 2012, Ivy Asset Strategy Fund held investments in private-placement common stock (minority stake) and corporate debt securities of an issuer. Because of the unique nature of these securities, the Fund determined the enterprise value after considering the results of multiple valuation methodologies, including both a comparison to market comparable companies and a discounted cash flow model. The total enterprise value was then allocated between the common stock and corporate debt securities held by the Fund.

Under the market comparable companies’ model, the most significant input was the price-earnings ratio, for which a range of 19 to 22 was considered to be the range that market participants would take into account when pricing the issuer.

Using a discounted cash flows model, the most significant inputs (and related range of assumptions anticipated to be used by market participants) were the long-term growth rate (1.5%-3.5%), the weighted average cost of capital (7.5%-9.0%), the anticipated future tax rate (2.5%-23%), and the future gross profit percentage (2.5%-9.8%).

The Fund also applied an illiquidity discount of 5-10% for purposes of this valuation.

Significant changes in any of these inputs would result in a significantly lower or higher fair value measurement.

The following acronyms are used throughout this schedule:

ADR = American Depositary Receipts

CMO = Collateralized Mortgage Obligation

GTD = Guaranteed

OTC = Over the Counter

REMIC = Real Estate Mortgage Investment Conduit

14 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Asset Strategy Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

Country Diversification
(as a % of net assets)
United States	38.5%
China	11.5%
United Kingdom	8.4%
Germany	6.3%
Hong Kong	5.1%
France	2.6%

Switzerland	2.6%
South Korea	2.1%
Norway	2.0%
Netherlands	1.8%
Italy	1.3%
Other Countries	0.0%
Other+	17.8%

+Includes gold bullion, cash and cash equivalents and other assets and liabilities

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 15

PORTFOLIO HIGHLIGHTS

Ivy Asset Strategy New Opportunities Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	89.8%
Industrials	20.4%
Consumer Discretionary	20.0%
Financials	17.4%
Consumer Staples	10.9%
Information Technology	8.6%
Energy	8.4%
Materials	2.5%
Health Care	1.6%
Bullion (Gold)	8.8%

Lipper Rankings

Category: Lipper Global Flexible Portfolio Funds	Rank	Percentile
1 Year	235/347	68

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Country Weightings

Pacific Basin	44.5%
South Korea	10.3%
Turkey	9.0%
China	8.2%
Thailand	4.6%
Other Pacific Basin	12.4%
South America	19.9%
Brazil	19.9%
Europe	12.9%
United Kingdom	5.5%
Netherlands	4.1%
Other Europe	3.3%
Bullion (Gold)	8.8%
Other	7.4%
Panama	5.7%
Other	1.7%
North America	5.1%
United States	5.1%
Cash and Cash Equivalents	1.4%

Top 10 Equity Holdings

Company	Country	Sector
Copa Holdings, S.A., Class A	Panama	Industrials
Kia Motors Corporation	South Korea	Consumer Discretionary
GLOVIS Co., Ltd.	South Korea	Industrials
Aggreko plc	United Kingdom	Industrials
MercadoLibre, Inc.	Brazil	Information Technology
SINA Corporation	China	Information Technology
Chicago Bridge & Iron Company N.V., NY Shares	Netherlands	Industrials
Focus Media Holding Limited, ADR	China	Consumer Discretionary
Ford Otomotiv Sanayi A.S.	Turkey	Consumer Discretionary
BIM Birlesik Magazalar Anonim Sirketi	Turkey	Consumer Staples

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

16 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Asset Strategy New Opportunities Fund (in  thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Advertising – 4.0%
Focus Media Holding Limited, ADR		535	$	12,512
Agricultural Products – 1.6%
Cosan S.A. Industria e Comercio, Class A		304		4,823
Air Freight & Logistics – 5.2%
GLOVIS Co., Ltd. (A)		73		15,983
Airlines – 5.7%
Copa Holdings, S.A., Class A		220		17,892
Automobile Manufacturers – 8.5%
Ford Otomotiv Sanayi A.S. (A)		1,025		10,611
Kia Motors Corporation (A)		259		16,183
				26,794
Broadcasting – 1.5%
PT Media Nusantara Citra Tbk (A)		13,879		3,771
PT Media Nusantara Citra Tbk (A)(B)(C)		3,000		815
				4,586
Coal & Consumable Fuels – 0.7%
Alpha Natural Resources, Inc. (B)		347		2,282
Construction & Engineering – 4.1%
Chicago Bridge & Iron Company N.V., NY Shares		332		12,661
Construction Materials – 1.5%
PT Semen Gresik (Persero) Tbk (A)		3,009		4,543
Diversified Banks – 7.3%
Axis Bank Limited (A)		40		868
Bangkok Bank Public Company Limited (A)		620		4,046
Capitec Bank Holdings Limited (A)		126		3,398
Capitec Bank Holdings Limited (A)(C)		69		1,857
Siam Commercial Bank Public Company Limited (A)		755		4,134
Turkiye Is Bankasi A.S. (A)		1,172		3,679
Yapi ve Kredi Bankasi A.S. (A)		1,539		3,664
Yes Bank Ltd (A)		116		842
				22,488
Diversified Metals & Mining – 1.0%
Walter Industries, Inc.		95		3,087

COMMON STOCKS (Continued)	Shares		Value
Diversified Support Services – 4.4%
Aggreko plc (A)(B)		369	$	13,793
Education Services – 2.0%
Anhanguera Educacional Participacoes S.A. (A)(B)		326		5,424
Anhanguera Educacional Participacoes S.A. (A)(B)(C)		50		832
				6,256
Food Distributors – 2.0%
Olam International Limited (A)		3,644		6,087
Food Retail – 4.9%
BIM Birlesik Magazalar Anonim Sirketi (A)		242		10,099
C.P. Seven Eleven Public Company Limited (A)(B)		4,498		5,188
				15,287
Health Care Equipment – 0.6%
DexCom, Inc. (B)		118		1,768
Health Care Facilities – 1.0%
IHH Healthcare Bhd (A)(B)(C)		3,000		3,140
Highways & Railtracks – 0.2%
Jasa Marga Persero Tbk PT (A)		1,247		762
Homebuilding – 3.5%
MRV Engenharia e Participacoes S.A. (A)		1,359		8,050
Rossi Residencial S.A. (A)		1,091		2,722
				10,772
Hotels, Resorts & Cruise Lines – 0.2%
Bloomberry Resorts Corporation (A)(B)(C)		2,160		580
Industrial Machinery – 0.8%
Cummins India Limited (A)		237		2,267
Hiwin Technologies Corp. (A)		20		147
				2,414
Internet Software & Services – 8.6%
MercadoLibre, Inc.		164		13,511
SINA Corporation (B)		202		13,052
				26,563
Movies & Entertainment – 0.3%
Major Cineplex Group PCL (A)		1,282		787

COMMON STOCKS (Continued)	Shares		Value
Multi-Sector Holdings – 2.2%
GT Capital Holdings Incorporated (A)(C)		512	$	6,685
Oil & Gas Drilling – 1.5%
North Atlantic Drilling Ltd. (A)(C)		2,475		4,708
Oil & Gas Equipment & Services – 2.9%
Dril-Quip, Inc. (B)		48		3,421
Technip-Coflexip (A)		50		5,570
				8,991
Oil & Gas Exploration & Production – 3.3%
Cairn Energy plc (A)		772		3,431
Cairn India Limited (A)(B)		260		1,634
Kosmos Energy Ltd. (B)		432		4,916
				9,981
Packaged Foods & Meats – 2.4%
BRF-Brasil Foods S.A. (A)		443		7,585
Real Estate Development – 1.9%
UEM Land Holdings Berhad (A)(B)		10,698		5,880
Real Estate Management & Development – 3.0%
BR Properties S.A. (A)(B)		677		8,799
BR Properties S.A. (A)(B)(C)		50		650
				9,449
Real Estate Operating Companies – 3.0%
BR Malls Participacoes S.A. (A)		675		9,294
TOTAL COMMON STOCKS – 89.8%			$	278,433
(Cost: $267,300)
BULLION – 8.8%	Troy Ounces
Gold		15	$	27,395
(Cost: $26,683)
TOTAL INVESTMENT SECURITIES – 98.6%			$	305,828
(Cost: $293,983)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 1.4%				4,216
NET ASSETS – 100.0%			$	310,044

2012 SEMIANNUAL REPORT 17

SCHEDULE OF INVESTMENTS

Ivy Asset Strategy New Opportunities Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

Notes to Schedule of Investments

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

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

(C) Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2012, the total value of these securities amounted to $19,267 or 6.2% of net assets.

The following forward foreign currency contracts were outstanding at September 30, 2012:

Type	Currency	Counterparty	Principal Amount of Contract (Denominated in Indicated Currency)		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
Sell	Indonesian Rupiah	Deutsche Bank AG		30,300,000		12–4–12	$	—	$	39

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks
Consumer Discretionary	$	62,287	$	—	$	—
Consumer Staples		33,782		—		—
Energy		25,962		—		—
Financials		53,796		—		—
Health Care		4,908		—		—
Industrials		63,505		—		—
Information Technology		26,563		—		—
Materials		7,630		—		—
Total Common Stocks	$	278,433	$	—	$	—
Bullion		27,395		—		—
Total	$	305,828	$	—	$	—
Liabilities
Forward Foreign Currency Contracts	$	—	$	39	$	—

The following acronyms are used throughout this schedule:

ADR = American Depositary Receipts

Country Diversification
(as a % of net assets)
Brazil	19.9	%
South Korea	10.3	%
Turkey	9.0	%
China	8.2	%
Panama	5.7	%
United Kingdom	5.5	%
United States	5.1	%
Thailand	4.6	%
Netherlands	4.1	%

Indonesia	3.2	%
Malaysia	2.9	%
Philippines	2.4	%
Singapore	2.0	%
India	1.9	%
France	1.8	%
South Africa	1.7	%
Norway	1.5	%
Other Countries	0.0	%
Other+	10.2	%

+Includes gold bullion, cash and cash equivalents and other assets and liabilities

See Accompanying Notes to Financial Statements.

18 SEMIANNUAL REPORT 2012

PORTFOLIO HIGHLIGHTS

Ivy Balanced Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	69.6%
Consumer Discretionary	12.3%
Consumer Staples	12.0%
Information Technology	11.8%
Energy	10.4%
Financials	6.3%
Health Care	6.3%
Industrials	5.6%
Utilities	2.4%
Materials	1.4%
Telecommunication Services	1.1%
Bonds	19.3%
Corporate Debt Securities	15.7%
United States Government and Government Agency Obligations	3.0%
Other Government Securities	0.6%
Cash and Cash Equivalents	11.1%

Lipper Rankings

Category: Lipper Mixed-Asset Target Allocation Growth Funds	Rank	Percentile
1 Year	157/562	28
3 Year	35/530	7
5 Year	16/477	4
10 Year	22/259	9

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Top 10 Equity Holdings

Company	Sector
Apple Inc.	Information Technology
Anheuser-Busch InBev S.A., ADR	Consumer Staples
National Oilwell Varco, Inc.	Energy
Limited Brands, Inc.	Consumer Discretionary
PNC Financial Services Group, Inc. (The)	Financials
Brown-Forman Corporation, Class B	Consumer Staples
ConocoPhillips	Energy
CBS Corporation, Class B	Consumer Discretionary
Berkshire Hathaway Inc., Class B	Financials
Hyatt Hotels Corporation, Class A	Consumer Discretionary

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

2012 SEMIANNUAL REPORT 19

SCHEDULE OF INVESTMENTS

Ivy Balanced Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Aerospace & Defense – 2.2%
Honeywell International Inc.		99	$	5,885
Precision Castparts Corp.		45		7,285
				13,170
Apparel Retail – 2.2%
Limited Brands, Inc.		254		12,523
Application Software – 1.1%
Intuit Inc.		110		6,489
Asset Management & Custody Banks – 0.7%
Northern Trust Corporation		94		4,368
Auto Parts & Equipment – 0.9%
BorgWarner Inc. (A)		76		5,218
Brewers – 2.3%
Anheuser-Busch InBev S.A., ADR (A)		160		13,780
Broadcasting – 1.6%
CBS Corporation, Class B		273		9,922
Communications Equipment – 1.0%
QUALCOMM Incorporated		97		6,049
Computer Hardware – 3.4%
Apple Inc. (A)		32		21,018
Distillers & Vintners – 1.7%
Brown-Forman Corporation, Class B		160		10,442
Electric Utilities – 1.3%
PPL Corporation		266		7,716
Fertilizers & Agricultural Chemicals – 1.4%
Monsanto Company		91		8,310
Food Retail – 1.4%
Whole Foods Market, Inc.		88		8,571
Footwear – 1.1%
NIKE, Inc., Class B		70		6,596
Health Care Distributors – 1.0%
Henry Schein, Inc. (A)		78		6,215
Health Care Equipment – 1.2%
Covidien plc		121		7,190
Home Improvement Retail – 0.9%
Home Depot, Inc. (The)		92		5,572
Hotels, Resorts & Cruise Lines – 1.6%
Hyatt Hotels Corporation, Class A (A)		243		9,764
Household Products – 1.1%
Colgate-Palmolive Company		63		6,712

COMMON STOCKS (Continued)	Shares		Value
Industrial Machinery – 0.9%
Pall Corporation		82	$	5,213
Integrated Oil & Gas – 1.1%
Exxon Mobil Corporation		75		6,859
Integrated Telecommunication Services –1.1%
AT&T Inc.		173		6,518
Internet Retail – 1.5%
Amazon.com, Inc. (A)		36		9,079
Internet Software & Services – 1.6%
Google Inc., Class A (A)		13		9,431
Motorcycle Manufacturers – 1.3%
Harley-Davidson, Inc.		192		8,127
Multi-Utilities – 1.1%
DTE Energy Company		113		6,773
Oil & Gas Equipment & Services – 4.5%
Core Laboratories N.V.		53		6,378
National Oilwell Varco, Inc.		166		13,329
Schlumberger Limited		102		7,363
				27,070
Oil & Gas Exploration & Production – 3.0%
Cabot Oil & Gas Corporation		176		7,889
ConocoPhillips		176		10,064
				17,953
Oil & Gas Refining & Marketing – 1.2%
Phillips 66		159		7,375
Oil & Gas Storage & Transportation – 0.6%
Regency Energy Partners LP		149		3,468
Other Diversified Financial Services – 1.2%
JPMorgan Chase & Co.		186		7,541
Packaged Foods & Meats – 2.7%
Hershey Foods Corporation		96		6,784
Mead Johnson Nutrition Company		133		9,725
				16,509
Personal Products – 1.3%
Estee Lauder Companies, Inc. (The), Class A		123		7,573
Pharmaceuticals – 4.1%
Allergan, Inc.		89		8,141
GlaxoSmithKline plc, ADR		179		8,291
Johnson & Johnson		123		8,448
				24,880

COMMON STOCKS (Continued)	Shares		Value
Property & Casualty Insurance – 2.6%
Berkshire Hathaway Inc., Class B (A)		111	$	9,807
Travelers Companies, Inc. (The)		84		5,707
				15,514
Railroads – 2.5%
Kansas City Southern		84		6,373
Union Pacific Corporation		80		9,460
				15,833
Regional Banks – 1.8%
PNC Financial Services Group, Inc. (The)		170		10,702
Restaurants – 1.2%
Starbucks Corporation		143		7,232
Semiconductor Equipment – 2.1%
ASML Holding N.V., NY Registry Shares		136		7,290
KLA-Tencor Corporation		123		5,858
				13,148
Semiconductors – 1.2%
Microchip Technology Incorporated		224		7,321
Systems Software – 1.4%
Oracle Corporation		262		8,247
Tobacco – 1.5%
Philip Morris International Inc.		102		9,129
TOTAL COMMON STOCKS – 69.6%			$	421,120
(Cost: $335,728)
CORPORATE DEBT SECURITIES	Principal
Aerospace & Defense – 0.1%
United Technologies Corporation, 1.200%, 6–1–15	$	500		509
Apparel Retail – 0.7%
Limited Brands, Inc.:
6.900%, 7–15–17		750		862
6.625%, 4–1–21		2,915		3,308
				4,170
Apparel, Accessories & Luxury Goods – 0.3%
LVMH Moet Hennessy –Louis Vuitton, 1.625%, 6–29–17 (B)		2,000		2,017

20 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Balanced Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Auto Parts & Equipment – 0.2%
BorgWarner Inc., 4.625%, 9–15–20	$	1,000	$	1,112
Automobile Manufacturers – 0.6%
Ford Motor Company, Convertible, 4.250%, 11–15–16		1,000		1,379
Toyota Motor Credit Corporation, 2.050%, 1–12–17		2,000		2,081
				3,460
Banking – 0.2%
Commonwealth Bank of Australia New York, 1.950%, 3–16–15		1,050		1,073
Biotechnology – 0.3%
Amgen Inc., 2.125%, 5–15–17		2,000		2,066
Brewers – 0.5%
Anheuser-Busch InBev Worldwide Inc.:
3.000%, 10–15–12		500		500
5.375%, 11–15–14		1,000		1,101
1.375%, 7–15–17		1,000		1,012
SABMiller Holdings Inc., 3.750%, 1–15–22 (B)		500		543
				3,156
Broadcasting – 0.6%
CBS Corporation:
8.875%, 5–15–19		500		670
4.300%, 2–15–21		1,000		1,112
Discovery Communications, LLC:
4.375%, 6–15–21		750		842
3.300%, 5–15–22		900		935
				3,559
Cable & Satellite – 0.6%
DIRECTV Holdings LLC, 2.400%, 3–15–17		500		513
DIRECTV Holdings LLC and DIRECTV Financing Co., Inc., 3.500%, 3–1–16		1,000		1,064
News American Incorporated, 3.000%, 9–15–22 (B)		2,000		2,019
				3,596
Construction & Farm Machinery & Heavy Trucks – 0.3%
Caterpillar Inc.:
0.535%, 11–21–12 (C)		400		400
1.375%, 5–27–14		1,000		1,014
John Deere Capital Corporation, 5.250%, 10–1–12		500		500
				1,914

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Consumer Finance – 1.1%
American Express Credit Corporation, 5.125%, 8–25–14	$	200	$	216
Capital One Financial Corporation, 2.125%, 7–15–14		1,750		1,786
Caterpillar Financial Services Corporation, 1.550%, 12–20–13		1,000		1,014
Ford Motor Credit Company LLC:
3.875%, 1–15–15		1,000		1,045
7.000%, 4–15–15		750		840
Penske Truck Leasing Co., L.P. and PTL Finance Corp., 2.500%, 7–11–14 (B)		1,000		1,008
USAA Capital Corporation, 1.050%, 9–30–14 (B)		1,000		1,007
				6,916
Data Processing & Outsourced Services –0.2%
Fidelity National Financial, Inc., 6.600%, 5–15–17		900		1,007
Department Stores – 0.2%
Macy’s Retail Holdings, Inc., 3.875%, 1–15–22		1,000		1,078
Distillers & Vintners – 0.1%
Beam Inc., 1.875%, 5–15–17		800		818
Diversified Banks – 0.7%
Bank of Montreal, 1.300%, 10–31–14 (B)		1,000		1,019
Bank of New York Mellon Corporation (The), 1.500%, 1–31–14		1,250		1,267
Barclays Bank plc, 2.375%, 1–13–14		600		610
U.S. Bancorp, 4.200%, 5–15–14		1,000		1,059
Wells Fargo & Company, 3.676%, 6–15–16 (C)		500		544
				4,499
Diversified Capital Markets – 0.1%
Deutsche Bank AG, 3.450%, 3–30–15		500		527
Diversified Metals & Mining – 0.1%
Rio Tinto Finance (USA) Limited, 8.950%, 5–1–14		500		563
Drug Retail – 0.1%
CVS Caremark Corporation, 3.250%, 5–18–15		550		585
Electric Utilities – 0.1%
Hydro-Quebec, 8.000%, 2–1–13		500		513

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Fertilizers & Agricultural Chemicals – 0.2%
Monsanto Company, 2.750%, 4–15–16	$	1,000	$	1,068
Food Distributors – 0.3%
Campbell Soup Company, 2.500%, 8–2–22		1,400		1,400
Cargill, Inc., 4.307%, 5–14–21 (B)		424		470
				1,870
General Merchandise Stores – 0.2%
Target Corporation, 1.125%, 7–18–14		1,000		1,013
Health Care Equipment – 0.3%
Stryker Corporation, 2.000%, 9–30–16		1,500		1,564
Health Care Services – 0.4%
Quest Diagnostics Incorporated, 3.200%, 4–1–16		2,000		2,120
Health Care Supplies – 0.2%
DENTSPLY International Inc., 2.750%, 8–15–16		1,000		1,031
Home Improvement Retail – 0.0%
Home Depot, Inc. (The), 4.400%, 4–1–21		250		296
Household Products – 0.2%
Church & Dwight Co., Inc., 2.875%, 10–1–22		500		507
Colgate-Palmolive Company, 1.250%, 5–1–14		500		508
				1,015
Hypermarkets & Super Centers – 0.3%
Wal-Mart Stores, Inc.:
0.750%, 10–25–13		1,500		1,506
2.875%, 4–1–15		250		265
				1,771
Industrial Gases – 0.3%
Praxair, Inc.:
4.375%, 3–31–14		1,000		1,057
3.000%, 9–1–21		1,000		1,062
				2,119
Industrial Machinery – 0.3%
Eaton Corporation, 0.719%, 6–16–14 (C)		750		752
Illinois Tool Works Inc., 5.150%, 4–1–14		1,000		1,070
				1,822
Integrated Oil & Gas – 0.0%
Cenovus Energy Inc., 4.500%, 9–15–14		250		268

2012 SEMIANNUAL REPORT 21

SCHEDULE OF INVESTMENTS

Ivy Balanced Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
IT Consulting & Other Services – 0.3%
International Business Machines Corporation, 1.250%, 5–12–14	$	2,000	$	2,028
Leisure Products – 0.1%
Mattel, Inc., 2.500%, 11–1–16		750		784
Life & Health Insurance – 0.7%
Metropolitan Life Global Funding I:
2.000%, 1–10–14 (B)		1,200		1,218
2.500%, 9–29–15 (B)		2,500		2,601
Prudential Financial, Inc., 4.750%, 9–17–15		500		551
				4,370
Managed Health Care – 0.2%
WellPoint, Inc., 1.875%, 1–15–18		1,500		1,512
Movies & Entertainment – 0.1%
Viacom Inc., 4.375%, 9–15–14		500		535
Oil & Gas Equipment & Services – 0.6%
Schlumberger Investment S.A., 1.250%, 8–1–17 (B)		1,000		999
Schlumberger S.A. (GTD by Schlumberger Limited), 2.650%, 1–15–16 (B)		500		527
Transocean Inc., 2.500%, 10–15–17		2,000		2,012
				3,538
Oil & Gas Exploration & Production – 0.4%
ConocoPhillips, 4.750%, 2–1–14		254		268
EOG Resources, Inc., 2.500%, 2–1–16		1,000		1,054
Southwestern Energy Company, 4.100%, 3–15–22 (B)		1,050		1,115
				2,437
Other Diversified Financial Services – 0.8%
JPMorgan Chase & Co.:
4.650%, 6–1–14		1,000		1,060
3.450%, 3–1–16		2,000		2,133
3.150%, 7–5–16		750		793
7.900%, 4–29–49 (C)		500		568
				4,554
Other Non-Agency REMIC/CMO – 0.0%
Banco Hipotecario Nacional:
7.916%, 7–25–09 (B)		7		—	*
8.000%, 3–31–11 (B)		1		—
				—	*

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Packaged Foods & Meats – 0.3%
Kellogg Company, 4.450%, 5–30–16	$	500	$	560
Unilever Capital Corporation, 2.750%, 2–10–16		1,000		1,062
				1,622
Personal Products – 0.2%
Estee Lauder Companies, Inc. (The), 2.350%, 8–15–22		1,200		1,199
Pharmaceuticals – 0.1%
Roche Holdings Ltd, 5.000%, 3–1–14 (B)		636		674
Railroads – 0.1%
Burlington Northern Santa Fe, LLC, 3.050%, 3–15–22		700		724
Regional Banks – 0.2%
Canadian Imperial Bank of Commerce, 0.900%, 10–1–15		1,000		1,002
Restaurants – 0.0%
YUM! Brands, Inc., 4.250%, 9–15–15		250		271
Retail Stores – 0.2%
Dollar General Corporation, 4.125%, 7–15–17		450		470
Fifth & Pacific Companies, Inc., 10.500%, 4–15–19 (B)		400		452
				922
Semiconductors – 0.3%
Broadcom Corporation, 2.700%, 11–1–18		1,000		1,073
Texas Instruments Incorporated, 0.615%, 5–15–13 (C)		1,000		1,002
				2,075
Soft Drinks – 0.5%
PepsiCo, Inc.:
3.750%, 3–1–14		500		523
0.700%, 8–13–15		2,500		2,509
				3,032
Systems Software – 0.1%
Microsoft Corporation, 2.950%, 6–1–14		500		521
Tobacco – 0.1%
Philip Morris International Inc., 4.500%, 3–26–20		500		587

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Wireless Telecommunication Service – 0.6%
America Movil, S.A.B. de C.V., 3.625%, 3–30–15	$	1,200	$	1,277
American Tower Corporation:
4.625%, 4–1–15		500		539
4.700%, 3–15–22		1,400		1,536
				3,352
TOTAL CORPORATE DEBT SECURITIES – 15.7%			$	94,834
(Cost: $90,238)
OTHER GOVERNMENT SECURITIES
Israel – 0.2%
State of Israel, 4.000%, 6–30–22		1,250		1,328
Qatar - 0.3%
State of Qatar:
4.000%, 1–20–15 (B)		750		796
3.125%, 1–20–17		1,000		1,053
				1,849
Supranational – 0.1%
International Bank for Reconstruction and Development, 2.375%, 5–26–15		450		474
TOTAL OTHER GOVERNMENT SECURITIES – 0.6%			$	3,651
(Cost: $3,431)
UNITED STATES GOVERNMENT AGENCY OBLIGATIONS
Mortgage-Backed Obligations – 0.2%
Federal National Mortgage Association Fixed Rate Pass-Through Certificates:
6.000%, 9–1–17		113		122
5.000%, 1–1–18		78		85
5.500%, 4–1–18		40		44
6.500%, 10–1–28		89		104
6.500%, 2–1–29		13		15
7.000%, 11–1–31		81		95
6.500%, 2–1–32		71		82
7.000%, 2–1–32		106		124
7.000%, 3–1–32		49		57
7.000%, 7–1–32		67		78
6.000%, 9–1–32		283		320
6.500%, 9–1–32		62		71

22 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Balanced Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

UNITED STATES GOVERNMENT AGENCY OBLIGATIONS (Continued)	Principal		Value
Mortgage-Backed Obligations (Continued)
5.500%, 5–1–33	$	130	$	144
5.500%, 6–1–33		79		88
				1,429
TOTAL UNITED STATES GOVERNMENT AGENCY OBLIGATIONS – 0.2%			$	1,429
(Cost: $1,288)
UNITED STATES GOVERNMENT OBLIGATIONS
Treasury Obligations – 2.8%
United States Treasury Bonds, 7.500%, 11–15–16		500		643
United States Treasury Notes:
3.875%, 2–15–13		1,250		1,267
3.625%, 5–15–13		750		766
4.250%, 8–15–13		900		932
4.250%, 8–15–15		3,000		3,337
1.375%, 11–30–18		10,000		10,312
				17,257
TOTAL UNITED STATES GOVERNMENT OBLIGATIONS – 2.8%			$	17,257
(Cost: $16,434)
SHORT-TERM SECURITIES	Principal		Value
Commercial Paper – 8.3%
Becton Dickinson & Co., 0.220%, 10–17–12 (D)		5,000		4,999
Bemis Company, Inc., 0.340%, 10–19–12 (D)		2,940		2,939
Diageo Capital plc (GTD by Diageo plc), 0.300%, 10–1–12 (D)		2,631		2,631
Ecolab Inc., 0.340%, 10–4–12 (D)		3,000		3,000

SHORT-TERM SECURITIES (Continued)	Principal		Value
Commercial Paper (Continued)
Freddie Mac Discount Notes, 0.130%, 12–18–12 (D)	$	3,000	$	2,999
GlaxoSmithKline Finance plc (GTD by GlaxoSmithKline plc), 0.120%, 10–18–12 (D)		5,000		5,000
Heinz (H.J.) Finance Co. (GTD by Heinz (H.J.) Co.):
0.290%, 10–24–12 (D)		5,000		4,999
0.290%, 10–25–12 (D)		5,000		4,999
Kellogg Co., 0.220%, 10–1–12 (D)		7,000		7,000
PACCAR Financial Corp., 0.120%, 10–30–12 (D)		3,000		3,000
Straight-A Funding, LLC (GTD by Federal Financing Bank), 0.160%, 11–13–12 (D)		3,000		3,000
Verizon Communications Inc., 0.320%, 11–13–12 (D)		5,000		4,998
Wisconsin Electric Power Co., 0.200%, 10–1–12 (D)		1,042		1,042
				50,606
Master Note – 0.6%
Toyota Motor Credit Corporation, 0.122%, 10–5–12 (E)		3,370		3,370
Municipal Obligations – Taxable – 0.8%
MA Hlth and Edu Fac Auth, Var Rate Rev Bonds, Dana-Farber Cancer Institute Issue, Ser 2008L-1 (GTD by JPMorgan Chase Bank, N.A.), 0.170%, 10–4–12 (E)		1,400		1,400

SHORT-TERM SECURITIES (Continued)	Principal		Value
Municipal Obligations – Taxable (Continued)
MS Business Fin Corp, Gulf Opp Zone Indl Dev Var Rev Bonds (Chevron U.S.A. Inc. Proj), Ser E (GTD by Chevron Corporation), 0.190%, 10–1–12 (E)	$	1,812	$	1,812
NYC GO Bonds, Fiscal 2006 Ser E (GTD by Bank of America,N.A.), 0.210%, 10–4–12 (E)		1,851		1,851
				5,063
TOTAL SHORT-TERM SECURITIES – 9.7%			$	59,039
(Cost: $59,039)
TOTAL INVESTMENT SECURITIES – 98.6%			$	597,330
(Cost: $506,158)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 1.4%				8,420
NET ASSETS – 100.0%			$	605,750

Notes to Schedule of Investments

* Not shown due to rounding.

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

(B) Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2012, the total value of these securities amounted to $16,465 or 2.7% of net assets.

(C) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012.

(D) Rate shown is the yield to maturity at September 30, 2012.

(E) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

2012 SEMIANNUAL REPORT 23

SCHEDULE OF INVESTMENTS

Ivy Balanced Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks	$	421,120	$	—	$	—
Corporate Debt Securities		—		94,834		—	*
Other Government Securities		—		3,651		—
United States Government Agency Obligations		—		1,429		—
United States Government Obligations		—		17,257		—
Short-Term Securities		—		59,039		—
Total	$	421,120	$	176,210	$	—	*

The following acronyms are used throughout this schedule:

ADR = American Depositary Receipts

CMO = Collateralized Mortgage Obligation

GTD = Guaranteed

REMIC = Real Estate Mortgage Investment Conduit

See Accompanying Notes to Financial Statements.

24 SEMIANNUAL REPORT 2012

PORTFOLIO HIGHLIGHTS

Ivy Energy Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	98.9%
Energy	93.3%
Industrials	3.4%
Materials	1.5%
Consumer Discretionary	0.7%
Cash and Cash Equivalents	1.1%

Lipper Rankings

Category: Lipper Natural Resources Funds	Rank	Percentile
1 Year	60/104	58
3 Year	47/68	69
5 Year	24/66	36

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Country Weightings

North America	86.9%
United States	81.8%
Canada	5.1%
Europe	8.1%
Netherlands	3.5%
Other Europe	4.6%
Pacific Basin	2.8%
Bahamas/Caribbean	1.1%
Cash and Cash Equivalents	1.1%

Top 10 Equity Holdings

Company	Sector	Industry
National Oilwell Varco, Inc.	Energy	Oil & Gas Equipment & Services
Schlumberger Limited	Energy	Oil & Gas Equipment & Services
Continental Resources, Inc.	Energy	Oil & Gas Exploration & Production
Cameron International Corporation	Energy	Oil & Gas Equipment & Services
Exxon Mobil Corporation	Energy	Integrated Oil & Gas
Core Laboratories N.V.	Energy	Oil & Gas Equipment & Services
Anadarko Petroleum Corporation	Energy	Oil & Gas Exploration & Production
Southwestern Energy Company	Energy	Oil & Gas Exploration & Production
EOG Resources, Inc.	Energy	Oil & Gas Exploration & Production
Noble Energy, Inc.	Energy	Oil & Gas Exploration & Production

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

2012 SEMIANNUAL REPORT 25

SCHEDULE OF INVESTMENTS

Ivy Energy Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Auto Parts & Equipment – 0.7%
BorgWarner Inc. (A)		11	$	781
Coal & Consumable Fuels – 1.9%
Cameco Corporation		54		1,053
Peabody Energy Corporation		47		1,053
				2,106
Construction & Engineering – 2.6%
Fluor Corporation		51		2,890
Construction & Farm Machinery & Heavy Trucks – 0.8%
Cummins Inc.		9		830
Diversified Metals & Mining – 1.5%
BHP Billiton Limited, ADR		25		1,705
Integrated Oil & Gas – 8.6%
Chevron Corporation		5		583
Exxon Mobil Corporation		45		4,133
Occidental Petroleum Corporation		38		3,285
Suncor Energy Inc.		44		1,459
				9,460
Oil & Gas Drilling – 7.7%
Ensco plc (A)		20		1,084
Helmerich & Payne, Inc.		52		2,469
Nabors Industries Ltd. (A)		90		1,258
Seadrill Limited		50		1,949
Transocean Inc.		39		1,753
				8,513
Oil & Gas Equipment & Services – 32.8%
Basic Energy Services, Inc. (A)		102		1,139
Cameron International Corporation (A)		75		4,185
Core Laboratories N.V.		32		3,826
Dresser-Rand Group Inc. (A)		39		2,136
Dril-Quip, Inc. (A)		31		2,203
FMC Technologies, Inc. (A)		61		2,829
Forum Energy Technologies, Inc. (A)		90		2,182

COMMON STOCKS (Continued)	Shares		Value
Oil & Gas Equipment & Services (Continued)
Halliburton Company		87	$	2,938
National Oilwell Varco, Inc.		79		6,296
Schlumberger Limited		67		4,874
Superior Energy Services, Inc. (A)		74		1,524
Tenaris S.A., ADR		22		893
Weatherford International Ltd. (A)		88		1,120
				36,145
Oil & Gas Exploration & Production – 27.9%
Anadarko Petroleum Corporation		53		3,701
Apache Corporation		13		1,094
Cabot Oil & Gas Corporation		63		2,831
CNOOC Limited, ADR		7		1,439
Cobalt International Energy, Inc. (A)		57		1,258
Concho Resources Inc. (A)		12		1,128
Continental Resources, Inc. (A)		62		4,741
EOG Resources, Inc.		31		3,485
Laredo Petroleum Holdings, Inc. (A)		27		584
Noble Energy, Inc.		37		3,460
Oasis Petroleum LLC (A)		38		1,121
Pioneer Natural Resources Company		12		1,279
Plains Exploration and Production Company (A)		27		1,019
Southwestern Energy Company (A)		106		3,669
				30,809
Oil & Gas Refining & Marketing – 1.8%
Clean Energy Fuels Corp. (A)		57		755
Marathon Petroleum Corporation		22		1,226
				1,981

COMMON STOCKS (Continued)	Shares		Value
Oil & Gas Storage & Transportation –12.6%
El Paso Pipeline Partners, L.P.		51	$	1,880
Enbridge Inc.		80		3,133
Kinder Morgan Management, LLC (A)		19		1,448
Kinder Morgan, Inc.		58		2,050
MarkWest Energy Partners, L.P.		25		1,347
Regency Energy Partners LP		49		1,150
Targa Resources Corp.		25		1,264
Williams Companies, Inc. (The)		45		1,588
				13,860
TOTAL COMMON STOCKS – 98.9%			$	109,080
(Cost: $80,705)
SHORT-TERM SECURITIES	Principal
Master Note – 1.3%
Toyota Motor Credit Corporation,
0.122%, 10-5-12 (B)	$	1,423		1,423
TOTAL SHORT-TERM SECURITIES – 1.3%			$	1,423
(Cost: $1,423)
TOTAL INVESTMENT SECURITIES – 100.2%			$	110,503
(Cost: $82,128)
LIABILITIES, NET OF CASH AND OTHER ASSETS – (0.2%)				(167	)
NET ASSETS – 100.0%			$	110,336

Notes to Schedule of Investments

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

(B) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks	$	109,080	$	—	$	—
Short-Term Securities		—		1,423		—
Total	$	109,080	$	1,423	$	—

The following acronym is used throughout this schedule:

ADR = American Depositary Receipts

26 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Energy Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

Country Diversification
(as a % of net assets)
United States	81.8%
Canada	5.1%
Netherlands	3.5%
Norway	1.8%
Australia	1.5%

Hong Kong	1.3%
Bermuda	1.1%
Switzerland	1.0%
United Kingdom	1.0%
Other Countries	0.8%
Other+	1.1%

+ Includes cash and cash equivalents and other assets and liabilities

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 27

PORTFOLIO HIGHLIGHTS

Ivy Global Natural Resources Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	92.5%
Energy	52.7%
Materials	34.5%
Industrials	2.5%
Information Technology	1.4%
Financials	1.1%
Consumer Staples	0.2%
Utilities	0.1%
Purchased Options	6.1%
Cash and Cash Equivalents	1.4%

Lipper Rankings

Category: Lipper Global Natural Resources Funds	Rank	Percentile
1 Year	79/138	57
3 Year	97/121	80
5 Year	68/83	81
10 Year	25/32	76

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Country Weightings

North America	63.2%
United States	48.8%
Canada	14.4%
Europe	19.2%
United Kingdom	8.4%
Switzerland	6.4%
Other Europe	4.4%
Pacific Basin	9.3%
Other	0.6%
South America	0.1%
Bahamas/Caribbean	0.1%
Cash and Cash Equivalents and Options	7.5%

Top 10 Equity Holdings

Company	Country	Sector	Industry
First Quantum Minerals Ltd.	Canada	Materials	Diversified Metals & Mining
Noble Corporation	Switzerland	Energy	Oil & Gas Drilling
Plains Exploration and Production Company	United States	Energy	Oil & Gas Exploration & Production
Cabot Oil & Gas Corporation	United States	Energy	Oil & Gas Exploration & Production
Ensco plc	United Kingdom	Energy	Oil & Gas Drilling
Rio Tinto plc	United Kingdom	Materials	Diversified Metals & Mining
Pioneer Natural Resources Company	United States	Energy	Oil & Gas Exploration & Production
Oil States International, Inc.	United States	Energy	Oil & Gas Equipment & Services
Schlumberger Limited	United States	Energy	Oil & Gas Equipment & Services
LG Chem, Ltd.	South Korea	Materials	Commodity Chemicals

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

28 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

lvy Global Natural Resources Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Australia – 0.3%
Perseus Mining Limited (A)		3,000	$	8,850
Brazil – 0.1%
Suzano Bahia Sul Papel E Celulose S.A. (A)		1,098		2,880
Canada – 14.4%
Agrium Inc.		200		20,692
Athabasca Oil Sands Corp. (A)		600		8,044
Cameco Corporation		200		3,896
Detour Gold Corporation (A)		1,400		39,062
Eldorado Gold Corporation		250		3,812
First Quantum Minerals Ltd.		7,190		153,225
Goldcorp Inc.		1,400		64,282
IAMGOLD Corporation		1,000		15,858
Methanex Corporation		400		11,413
Potash Corporation of Saskatchewan Inc.		1,500		65,130
Southern Pacific Resource Corp. (A)		4,448		6,334
Suncor Energy Inc. (A)		600		19,738
Tahoe Resources Inc. (A)		750		15,273
Uranium One Inc. (A)		1,000		2,390
				429,149
Cayman Islands – 0.1%
Vinda International Holdings Limited		2,000		2,755
China – 3.1%
China Metal Recycling (Holdings) Limited		45,000		41,727
GCL-Poly Energy Holdings Limited		210,000		32,228
Sino-Forest Corporation, Class A (A)(B)		15,000		—	*
Trina Solar Limited, ADR (A)		2,250		10,305
Yingde Gases Group Company Limited (A)		8,000		7,088
				91,348
Cyprus – 1.2%
Buried Hill Energy (Cyprus) Public Company Limited (A)(C)		3,630		9,620
Ocean Rig UDW Inc. (A)		1,684		27,472
				37,092
Germany – 0.6%
Lanxess AG		225		18,658

COMMON STOCKS (Continued)	Shares		Value
India – 1.5%
Adani Enterprises Limited		1,500	$	5,720
Hindustan Zinc Limited		2,500		6,446
Infrastructure Development Finance Company Limited (A)		11,000		32,211
				44,377
Indonesia – 0.3%
PT Indo Tambangraya Megah Tbk		2,000		8,809
Netherlands – 2.0%
Chicago Bridge & Iron Company N.V., NY Shares		200		7,618
LyondellBasell Industries N.V., Class A		1,000		51,660
				59,278
Panama – 0.6%
McDermott International, Inc. (A)		1,500		18,330
Russia – 0.4%
Mechel OAO, ADR		900		2,466
OJSC Oil Company Rosneft, GDR		1,200		8,064
Open Joint Stock Company “RusHydro”, ADR		1,000		2,660
				13,190
Singapore – 0.1%
Indofood Agri Resources Ltd.		2,000		2,225
South Korea – 3.0%
LG Chem, Ltd.		300		89,480
Switzerland – 6.4%
Noble Corporation		4,000		143,120
Weatherford International Ltd. (A)		3,750		47,550
				190,670
Thailand – 1.0%
Banpu Public Company Limited		2,300		29,292
United Kingdom – 8.4%
BG Group plc		550		11,102
Ensco plc (A)		2,250		122,760
Rio Tinto plc		2,500		116,468
				250,330
United States – 48.8%
Anadarko Petroleum Corporation		250		17,480
Boise Inc.		2,000		17,520
Cabot Oil & Gas Corporation		3,000		134,699
Cameron International Corporation (A)		375		21,026

COMMON STOCKS (Continued)	Shares		Value
United States (Continued)
Celanese Corporation, Series A		2,000	$	75,820
Crown Holdings, Inc. (A)		1,125		41,344
Denbury Resources Inc. (A)		1,000		16,160
E.I. du Pont de Nemours and Company		150		7,541
Eastman Chemical Company		500		28,505
EOG Resources, Inc.		50		5,603
Freeport-McMoRan Copper & Gold Inc., Class B		1,700		67,285
Georgia Gulf Corporation		150		5,433
Halliburton Company		1,750		58,958
KBR, Inc.		2,050		61,131
Kodiak Oil & Gas Corp. (A)		1,000		9,360
Laredo Petroleum Holdings, Inc. (A)		395		8,686
Marathon Oil Corporation		750		22,178
Marathon Petroleum Corporation		350		19,107
Mosaic Company (A)		450		25,925
National Oilwell Varco, Inc.		850		68,094
Noble Energy, Inc.		425		39,402
Occidental Petroleum Corporation		775		66,697
Oil States International, Inc. (A)		1,375		109,257
Peabody Energy Corporation		2,400		53,496
Pioneer Natural Resources Company		1,100		114,839
Plains Exploration and Production Company (A)		3,750		140,512
QEP Resources, Inc.		1,100		34,826
Schlumberger Limited (D)		1,300		94,028
Valero Energy Corporation		1,250		39,600
Walter Industries, Inc.		550		17,853
WPX Energy, Inc. (A)		2,250		37,328
				1,459,693
TOTAL COMMON STOCKS – 92.3%			$	2,756,406
(Cost: $2,853,318)

2012 SEMIANNUAL REPORT 29

SCHEDULE OF INVESTMENTS

lvy Global Natural Resources Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

PREFERRED STOCKS	Shares		Value
Russia – 0.2%
Mechel OAO, 31.280 RUB		1,465	$	7,424
United States – 0.0%
Konarka Technologies, Inc., 8.000% Cumulative (A)(C)		3,500		—	*
TOTAL PREFERRED STOCKS – 0.2%			$	7,424
(Cost: $35,384)
PURCHASED OPTIONS	Number of Contracts (Unrounded)
Gold Bullion,
Call $1400.00, Expires 10–25–12		200		7,493
Goldcorp Inc.,
Call $25.00, Expires 1–19–13		22,000		45,925
National Oilwell Varco, Inc.,
Call $45.00, Expires 1–22–13		3,500		12,250
Occidental Petroleum Corporation,
Call $50.00, Expires 11–19–12		15,000		54,338
Peabody Energy Corporation,
Call $16.00, Expires 1–19–13		20,000		13,500

PURCHASED OPTIONS (Continued)	Number of Contracts (Unrounded)		Value
Potash Corporation of Saskatchewan Inc.,
Call $25.00, Expires 1–21–13		10,000	$	17,800
Schlumberger Limited,
Call $42.50, Expires 11–19–12		10,000		29,825
TOTAL PURCHASED OPTIONS – 6.1%			$	181,131
(Cost: $145,479)
SHORT-TERM SECURITIES	Principal
Certificate Of Deposit – 0.3%
Banco del Estado de Chile,
0.280%, 10–17–12	$	8,000		8,000
Commercial Paper – 1.3%
Corporacion Andina de Fomento,
0.350%, 12–4–12 (E)		8,600		8,594
E.I. du Pont de Nemours and Company,
0.130%, 11–2–12 (E)		8,000		7,999
Fannie Mae Discount Notes,
0.130%, 12–19–12 (E)		5,563		5,561

SHORT-TERM SECURITIES (Continued)	Principal		Value
Commercial Paper (Continued)
Medtronic, Inc.,
0.130%, 10–26–12 (E)	$	3,000	$	3,000
Praxair, Inc.,
0.080%, 10–11–12 (E)		7,000		7,000
Wisconsin Electric Power Co., 0.230%, 10–4–12 (E)		5,000		5,000
				37,154
Master Note – 0.1%
Toyota Motor Credit Corporation,
0.122%, 10–5–12 (F)		2,448		2,448
United States Government Agency Obligations – 0.1%
Overseas Private Investment Corporation (GTD by United States Government),
0.170%, 10–3–12 (F)		5,000		5,000
TOTAL SHORT-TERM SECURITIES – 1.8%			$	52,602
(Cost: $52,602)
TOTAL INVESTMENT SECURITIES – 100.4%			$	2,997,563
(Cost: $3,086,783)
LIABILITIES, NET OF CASH AND OTHER ASSETS – (0.4%)				(11,682	)
NET ASSETS – 100.0%			$	2,985,881

Notes to Schedule of Investments

* Not shown due to rounding.

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

(B) Deemed to be an affiliate due to the Fund owning at least 5% of the voting securities.

(C) Restricted securities. At September 30, 2012, the Fund owned the following restricted securities:

Security	Acquisition Date(s)	Shares	Cost		Market Value
Buried Hill Energy (Cyprus) Public Company Limited	5–1–07 to 4–17–08	3,630	$	6,183	$	9,620
Konarka Technologies, Inc., 8.000% Cumulative	8–31–07	3,500		10,850		—	*
			$	17,033	$	9,620

The total value of these securities represented 0.3% of net assets at September 30, 2012.

(D) All or a portion of the security position has been pledged as collateral on open futures contracts.

(E) Rate shown is the yield to maturity at September 30, 2012.

(F) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date the variable rate resets.

30 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

lvy Global Natural Resources Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

The following forward foreign currency contracts were outstanding at September 30, 2012:

Type	Currency	Counterparty	Principal Amount of Contract (Denominated in Indicated Currency)		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
Sell	British Pound	Canadian Imperial Bank of Commerce		1,458		10–19–12	$	—	$	72
Sell	British Pound	Royal Bank of Canada		25,400		11–9–12		—		1,171
Sell	British Pound	Toronto-Dominion Bank (The)		10,735		11–30–12		—		391
Sell	British Pound	Bank of New York Mellon (The)		13,353		12–7–12		115		—
Sell	British Pound	State Street Global Markets		22,845		12–14–12		213		—
Sell	Canadian Dollar	State Street Global Markets		23,842		10–5–12		—		1,002
Sell	Canadian Dollar	Royal Bank of Canada		14,332		10–19–12		—		306
Sell	Canadian Dollar	Toronto-Dominion Bank (The)		26,744		10–19–12		—		719
Sell	Canadian Dollar	Bank of New York Mellon (The)		39,858		10–26–12		—		1,073
Sell	Canadian Dollar	State Street Global Markets		32,300		11–2–12		—		696
Sell	Canadian Dollar	Royal Bank of Canada		21,482		11–9–12		136		—
Sell	Canadian Dollar	Royal Bank of Canada		21,670		11–9–12		—		268
Sell	Canadian Dollar	Toronto-Dominion Bank (The)		24,439		11–30–12		411		—
Sell	Canadian Dollar	Toronto-Dominion Bank (The)		21,670		11–30–12		—		260
Sell	Canadian Dollar	Bank of New York Mellon (The)		21,482		12–7–12		154		—
Sell	Canadian Dollar	Bank of New York Mellon (The)		12,309		12–7–12		—		—	*
Sell	Canadian Dollar	Canadian Imperial Bank of Commerce		30,064		12–14–12		74		—
Sell	Canadian Dollar	Bank of New York Mellon (The)		21,670		12–14–12		146		—
Sell	Canadian Dollar	Bank of New York Mellon (The)		9,000		12–14–12		—		5
Sell	Euro	Royal Bank of Canada		865		10–19–12		2		—
Sell	Euro	Royal Bank of Canada		5,924		10–19–12		—		344
Sell	Euro	Canadian Imperial Bank of Commerce		910		10–26–12		—		46
Sell	Euro	Canadian Imperial Bank of Commerce		1,234		11–2–12		—		65
Sell	Euro	Toronto-Dominion Bank (The)		3,495		11–9–12		—		183
Sell	Euro	State Street Global Markets		918		11–9–12		7		—
Sell	Euro	Canadian Imperial Bank of Commerce		1,214		12–14–12		—		66
Sell	South Korean Won	Bank of New York Mellon (The)		7,730,000		10–26–12		—		243
Sell	South Korean Won	State Street Global Markets		4,499,700		11–2–12		—		61
Sell	South Korean Won	Canadian Imperial Bank of Commerce		13,200,000		11–9–12		—		252
Sell	South Korean Won	Bank of New York Mellon (The)		10,190,000		11–30–12		—		202
Sell	South Korean Won	Royal Bank of Canada		10,190,000		12–14–12		—		119
							$	1,258	$	7,544

The following futures contracts were outstanding at September 30, 2012 (contracts unrounded):

Description	Type	Expiration Date	Number of Contracts		Market Value			Unrealized Depreciation
S&P 500 E-mini	Short	12–21–12		2,150	$	(154,176	)	$	(963	)
S&P/Toronto Stock Exchange 60 Index	Short	12–21–12		200		(28,510	)		(271	)
					$	(182,686	)	$	(1,234	)

2012 SEMIANNUAL REPORT 31

SCHEDULE OF INVESTMENTS

lvy Global Natural Resources Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks
Consumer Staples	$	4,979	$	—	$	—
Energy		1,568,238		—		9,620
Financials		32,211		—		—
Industrials		74,469		—		—
Information Technology		42,533		—		—
Materials		1,021,696		—		—	*
Utilities		2,660		—		—
Total Common Stocks	$	2,746,786	$	—	$	9,620
Preferred Stocks		7,424		—		—
Purchased Options		181,131		—		—
Short-Term Securities		—		52,602		—
Total	$	2,935,341	$	52,602	$	9,620
Forward Foreign Currency Contracts	$	—	$	1,258	$	—
Liabilities
Forward Foreign Currency Contracts	$	—	$	7,544	$	—
Futures Contracts	$	1,234	$	—	$	—

The following acronyms are used throughout this schedule:

ADR = American Depositary Receipts

GDR = Global Depositary Receipts

GTD = Guaranteed

Market Sector Diversification
(as a % of net assets)
Energy	52.7	%
Materials	34.5	%
Industrials	2.5	%
Information Technology	1.4	%
Financials	1.1	%
Consumer Staples	0.2	%
Utilities	0.1	%
Other+	7.5	%

+Includes options, cash and cash equivalents and other assets and liabilities

See Accompanying Notes to Financial Statements.

32 SEMIANNUAL REPORT 2012

PORTFOLIO HIGHLIGHTS

Ivy Real Estate Securities Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	99.2%
Financials	96.9%
Telecommunication Services	1.5%
Consumer Discretionary	0.8%
Cash and Cash Equivalents	0.8%

Lipper Rankings

Category: Lipper Real Estate Funds	Rank	Percentile
1 Year	106/227	47
3 Year	140/186	75
5 Year	120/170	71
10 Year	58/97	60

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Top 10 Equity Holdings

Company	Sector	Industry
Simon Property Group, Inc.	Financials	Retail REITs
Public Storage, Inc.	Financials	Specialized REITs
Ventas, Inc.	Financials	Specialized REITs
ProLogis	Financials	Industrial REITs
Health Care REIT, Inc.	Financials	Specialized REITs
Boston Properties, Inc.	Financials	Office REITs
Equity Residential	Financials	Residential REITs
AvalonBay Communities, Inc.	Financials	Residential REITs
HCP, Inc.	Financials	Specialized REITs
Macerich Company (The)	Financials	Retail REITs

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

2012 SEMIANNUAL REPORT 33

SCHEDULE OF INVESTMENTS

Ivy Real Estate Securities Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Diversified REITs – 2.4%
Liberty Property Trust		53	$	1,921
Vornado Realty Trust		118		9,565
				11,486
Hotels, Resorts & Cruise Lines – 0.8%
Starwood Hotels & Resorts Worldwide, Inc.		63		3,646
Industrial REITs – 4.4%
EastGroup Properties, Inc.		22		1,154
ProLogis		570		19,955
				21,109
Mortgage REITs – 0.7%
Colony Financial, Inc.		162		3,148
Office REITs – 15.6%
Alexandria Real Estate Equities, Inc.		72		5,315
BioMed Realty Trust, Inc.		350		6,558
Boston Properties, Inc.		172		19,035
Brandywine Realty Trust		425		5,181
Digital Realty Trust, Inc.		147		10,261
Duke Realty Corporation		426		6,267
Hudson Pacific Properties, Inc.		147		2,712
Kilroy Realty Corporation		159		7,129
Mack-Cali Realty Corporation		124		3,304
SL Green Realty Corp.		114		9,144
				74,906
Real Estate Operating Companies – 2.0%
Brookfield Properties Corporation		352		5,826
Forest City Enterprises, Inc., Class A (A)		226		3,577
				9,403
Real Estate Services – 0.5%
CB Richard Ellis Group, Inc. (A)(B)		125		2,305
Residential REITs – 20.1%
American Campus Communities, Inc.		38		1,685
Apartment Investment and Management Company, Class A		301		7,826
AvalonBay Communities, Inc.		117		15,884
BRE Properties, Inc., Class A		99		4,619
Camden Property Trust		131		8,461
Campus Crest Communities, Inc.		270		2,912
Colonial Properties Trust		190		3,993
Equity Lifestyle Properties, Inc.		46		3,106

COMMON STOCKS (Continued)	Shares		Value
Residential REITs (Continued)
Equity Residential		330	$	19,007
Essex Property Trust, Inc.		49		7,230
Mid-America Apartment Communities, Inc.		98		6,423
Post Properties		140		6,701
UDR, Inc.		357		8,853
				96,700
Retail REITs – 24.9%
Acadia Realty Trust		204		5,056
Agree Realty Corporation		207		5,273
AmREIT, Inc., Class B		101		1,495
CBL & Associates Properties, Inc.		250		5,340
DDR Corp.		621		9,535
General Growth Properties, Inc. (A)		474		9,230
Kimco Realty Corporation		480		9,726
Macerich Company (The)		206		11,814
Primaris Retail Real Estate Investment Trust (C)		158		3,918
RioCan Real Estate Investment Trust (C)		120		3,389
Simon Property Group, Inc. (B)		311		47,180
Tanger Factory Outlet Centers, Inc.		161		5,202
Weingarten Realty Investors		94		2,645
				119,803
Specialized REITs – 24.8%
Chatham Lodging Trust		40		557
Chesapeake Lodging Trust		104		2,066
CubeSmart		409		5,268
Entertainment Properties Trust		48		2,137
HCP, Inc.		340		15,123
Health Care REIT, Inc.		340		19,635
Hersha Hospitality Trust		827		4,052
Host Hotels & Resorts, Inc.		711		11,416
LaSalle Hotel Properties		130		3,467
LTC Properties, Inc.		52		1,647
Pebblebrook Hotel Trust		145		3,385
Plum Creek Timber Company, Inc.		51		2,214
Public Storage, Inc.		153		21,293
Sovran Self Storage, Inc.		15		850
Summit Hotel Properties, Inc. (A)		335		2,857
Sunstone Hotel Investors, Inc. (A)		248		2,727
Ventas, Inc.		332		20,659
				119,353

COMMON STOCKS (Continued)	Shares		Value
Wireless Telecommunication Service – 1.5%
American Tower Corporation, Class A (A)		56	$	4,019
Crown Castle International Corp. (A)		47		3,013
				7,032
TOTAL COMMON STOCKS – 97.7%			$	468,891
(Cost: $338,401)
INVESTMENT FUNDS
Registered Investment Companies – 0.3%
ProShares UltraShort Real Estate (A)		52		1,324
TOTAL INVESTMENT FUNDS – 0.3%			$	1,324
(Cost: $1,308)
PREFERRED STOCKS
Office REITs – 0.7%
Digital Realty Trust, Inc., 7.000%		125		3,351
Specialized REITs – 0.5%
Pebblebrook Hotel Trust, Series B, 8.000%		98		2,573
TOTAL PREFERRED STOCKS – 1.2%			$	5,924
(Cost: $5,574)
SHORT-TERM SECURITIES	Principal
Commercial Paper –0.7%
Diageo Capital plc (GTD by Diageo plc),
0.300%, 10–1–12 (D)	$	3,326		3,326
Master Note – 0.5%
Toyota Motor Credit Corporation,
0.122%, 10–5–12 (E)		2,386		2,386
TOTAL SHORT-TERM SECURITIES –1.2%			$	5,712
(Cost: $5,712)
TOTAL INVESTMENT SECURITIES –100.4%			$	481,851
(Cost: $350,995)
LIABILITIES, NET OF CASH AND OTHER ASSETS – (0.4%)				(2,121	)
NET ASSETS –100.0%			$	479,730

34 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Real Estate Securities Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

Notes to Schedule of Investments

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

(B) All or a portion of the security position is held in collateralized accounts to cover potential obligations with respect to outstanding written options.

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

(D) Rate shown is the yield to maturity at September 30, 2012.

(E) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

The following written options were outstanding at September 30, 2012 (contracts and exercise prices unrounded):

Underlying Security	Counterparty, if OTC	Type	Number of Contracts		Expiration Month		Exercise Price		Premium Received		Market Value
CB Richard Ellis Group, Inc.	N/A	Call		715		October 2012	$	18.00	$	46	$	(64	)
Simon Property Group, Inc.	N/A	Call		302		October 2012		165.00		94		(1	)
									$	140	$	(65	)

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks	$	468,891	$	—	$	—
Investment Funds		1,324		—		—
Preferred Stocks		5,924		—		—
Short-Term Securities		—		5,712		—
Total	$	476,139	$	5,712	$	—
Liabilities
Written Options	$	65	$	—	$	—

The following acronyms are used throughout this schedule:

GTD = Guaranteed

OTC = Over the Counter

REIT = Real Estate Investment Trust

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 35

PORTFOLIO HIGHLIGHTS

Ivy Science and Technology Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	92.6%
Information Technology	60.9%
Health Care	15.9%
Industrials	7.1%
Telecommunication Services	5.1%
Materials	1.2%
Financials	0.7%
Consumer Staples	0.7%
Consumer Discretionary	0.5%
Energy	0.5%
Purchased Options	0.0%
Bonds	0.2%
Corporate Debt Securities	0.2%
Cash and Cash Equivalents	7.2%

Lipper Rankings

Category: Lipper Science & Technology Funds	Rank	Percentile
1 Year	14/154	10
3 Year	72/143	50
5 Year	11/136	9
10 Year	23/101	23

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Country Weightings

North America	78.8%
United States	76.6%
Other North America	2.2%
Pacific Basin	9.5%
South Korea	5.0%
China	3.7%
Other Pacific Basin	0.8%
South America	2.8%
Other	1.1%
Europe	0.4%
Bahamas/Caribbean	0.2%
Cash and Cash Equivalents	7.2%

Top 10 Equity Holdings

Company	Sector	Industry
Aspen Technology, Inc.	Information Technology	Application Software
Apple Inc.	Information Technology	Computer Hardware
Alliance Data Systems Corporation	Information Technology	Data Processing & Outsourced Services
Samsung Electronics Co., Ltd.	Information Technology	Semiconductors
ACI Worldwide, Inc.	Information Technology	Application Software
Google Inc., Class A	Information Technology	Internet Software & Services
Micron Technology, Inc.	Information Technology	Semiconductors
Cree, Inc.	Information Technology	Semiconductors
Tenet Healthcare Corporation	Health Care	Health Care Facilities
Vertex Pharmaceuticals Incorporated	Health Care	Biotechnology

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

36 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Science and Technology Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Agricultural Products – 0.7%
Darling International Inc. (A)		542	$	9,908
Application Software – 13.8%
ACI Worldwide, Inc. (A)(B)		1,652		69,797
Aspen Technology, Inc. (A)(C)		5,011		129,528
Nuance Communications, Inc. (A)		381		9,473
				208,798
Biotechnology – 4.8%
Ironwood Pharmaceuticals, Inc., Class A (A)		740		9,457
Isis Pharmaceuticals, Inc. (A)		896		12,604
Vertex Pharmaceuticals Incorporated (A)		874		48,923
				70,984
Communications Equipment – 0.4%
Riverbed Technology, Inc. (A)		259		6,032
Computer Hardware – 7.6%
Apple Inc. (A)(D)		174		115,770
Construction & Engineering – 0.9%
Abengoa, S.A. (E)		341		5,978
Aegion Corporation (A)		383		7,344
				13,322
Consumer Finance – 0.7%
NetSpend Holdings, Inc. (A)		1,097		10,787
Data Processing & Outsourced Services –12.3%
Alliance Data Systems Corporation (A)		772		109,529
Euronet Worldwide, Inc. (A)		1,529		28,736
Vantiv, Inc., Class A (A)		715		15,400
VeriFone Holdings, Inc. (A)		733		20,425
WNS (Holdings) Limited, ADR (A)		1,224		12,536
				186,626
Electronic Components – 1.0%
Power-One, Inc. (A)		1,192		6,674
Universal Display Corporation (A)(B)		229		7,883
				14,557
Fertilizers & Agricultural Chemicals – 1.2%
Monsanto Company (B)		195		17,758
Health Care Equipment – 0.7%
Boston Scientific Corporation (A)		1,928		11,066

COMMON STOCKS (Continued)	Shares		Value
Health Care Facilities – 3.3%
Tenet Healthcare Corporation (A)		7,992	$	50,110
Health Care Services – 0.5%
Fleury S.A. (E)		268		3,176
Fleury S.A. (E)(F)		422		4,988
				8,164
Health Care Technology – 2.1%
Cerner Corporation (A)		419		32,450
Industrial Machinery – 5.0%
ESCO Technologies Inc.		1,103		42,835
Pentair, Inc.		747		33,245
				76,080
Integrated Telecommunication Services – 2.6%
CenturyLink, Inc.		300		12,112
China Unicom Limited (E)		8,422		13,815
Windstream Corporation		1,332		13,466
				39,393
Internet Software & Services – 5.4%
21Vianet Group, Inc., ADR (A)		694		8,026
Google Inc., Class A (A)		76		57,267
SINA Corporation (A)(B)		251		16,241
				81,534
IT Consulting & Other Services – 4.1%
Acxiom Corporation (A)		2,567		46,903
iGate Corporation (A)		877		15,928
				62,831
Managed Health Care – 4.5%
Amil Participacoes S.A. (E)		1,446		17,296
UnitedHealth Group Incorporated		789		43,724
WellPoint, Inc.		130		7,524
				68,544
Movies & Entertainment – 0.5%
News Corporation Limited, Class A (A)		313		7,675
Oil & Gas Equipment & Services – 0.5%
Forum Energy Technologies, Inc. (A)		301		7,320
Research & Consulting Services – 1.2%
Qualicorp S.A. (A)(E)		207		1,986
Qualicorp S.A. (A)(E)(F)		1,657		15,939
				17,925
Semiconductor Equipment – 1.3%
Nanometrics Incorporated (A)		631		8,709
Photronics, Inc. (A)		1,979		10,629
				19,338

COMMON STOCKS (Continued)	Shares		Value
Semiconductors – 13.9%
CEVA, Inc. (A)		68	$	984
Cree, Inc. (A)		2,007		51,246
Micron Technology, Inc. (A)		9,463		56,632
Samsung Electronics Co., Ltd. (E)		62		75,206
Spansion Inc. (A)		601		7,166
Spreadtrum Communications, Inc., ADR		882		18,134
				209,368
Systems Software – 1.1%
Allot Communications Ltd. (A)		637		16,885
Wireless Telecommunication Service – 2.5%
Sprint Nextel Corporation (A)		6,914		38,165
TOTAL COMMON STOCKS – 92.6%			$	1,401,390
(Cost: $1,005,526)
PURCHASED OPTIONS	Number of Contracts (Unrounded)
Monsanto Company, Put $77.50, Expires 10–20–12, OTC (Ctrpty: Barclays Bank plc)		1,951		17
TOTAL PURCHASED OPTIONS – 0.0%			$	17
(Cost: $249)
CORPORATE DEBT SECURITIES	Principal
Semiconductors – 0.2%
JinkoSolar Holding Co., Ltd., Convertible, 4.000%, 5–15–16 (F)	$	9,230		3,600
TOTAL CORPORATE DEBT SECURITIES – 0.2%			$	3,600
(Cost: $9,057)

2012 SEMIANNUAL REPORT 37

SCHEDULE OF INVESTMENTS

Ivy Science and Technology Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

SHORT-TERM SECURITIES	Principal		Value
Commercial Paper – 6.1%
Corporacion Andina de Fomento,
0.260%, 10–22–12 (G)	$	5,000	$	4,999
E.I. du Pont de Nemours and Company,
0.140%, 11–15–12 (G)		10,000		9,998
General Mills, Inc.,
0.270%, 10–19–12 (G)		7,697		7,696
GlaxoSmithKline Finance plc (GTD by GlaxoSmithKline plc):
0.180%, 10–4–12 (G)		5,000		5,000
0.120%, 10–18–12 (G)		7,000		7,000
Harley-Davidson Funding Corp. (GTD by Harley-Davidson, Inc.),
0.330%, 10–9–12 (G)		10,000		9,999
Heinz (H.J.) Finance Co. (GTD by Heinz (H.J.) Co.):
0.290%, 10–24–12 (G)		5,000		4,999
0.290%, 10–25–12 (G)		6,000		5,999
Illinois Tool Works Inc.,
0.150%, 10–3–12 (G)		9,600		9,600
Praxair, Inc.,
0.080%, 10–11–12 (G)		4,000		4,000
Straight-A Funding, LLC (GTD by Federal FinancingBank),
0.150%, 10–3–12 (G)		5,000		5,000
Total Capital Canada Ltd. (GTD by Total S.A.),
0.140%, 11–6–12 (G)		5,000		4,999

SHORT-TERM SECURITIES (Continued)	Principal		Value
Commercial Paper (Continued)
Wal-Mart Stores, Inc.,
0.090%, 10–12–12 (G)	$	5,000	$	5,000
Wisconsin Electric Power Co.:
0.200%, 10–1–12 (G)		2,521		2,521
0.190%, 10–3–12 (G)		5,000		5,000
				91,810
Master Note – 0.1%
Toyota Motor Credit Corporation,
0.122%, 10–5–12 (H)		1,823		1,823
Municipal Obligations – Taxable – 1.0%
MS Business Fin Corp, Gulf Opp Zone Indl Dev Var Rev Bonds (Chevron U.S.A. Inc. Proj), Ser E (GTD by Chevron Corporation),
0.190%, 10–1–12 (H)		1,415		1,415
NY Hsng Fin Agy, Related West 30th Street Hsng Rev Bonds, Ser 2012 A-1 (GTD by Wells Fargo Bank, N.A.),
0.180%, 10–3–12 (H)		3,390		3,390
NYC GO Bonds, Fiscal 2008 Series L-4,
0.190%, 10–1–12 (H)		11,000		11,000
				15,805

SHORT-TERM SECURITIES (Continued)	Principal		Value
United States Government Agency Obligations – 0.1%
Overseas Private Investment Corporation (GTD by United States Government),
0.160%, 10–3–12 (H)	$	1,250	$	1,250
TOTAL SHORT-TERM SECURITIES – 7.3%			$	110,688
(Cost: $110,688)
TOTAL INVESTMENT SECURITIES – 100.1%			$	1,515,695
(Cost: $1,125,520)
LIABILITIES, NET OF CASH AND OTHER ASSETS – (0.1%)				(764	)
NET ASSETS – 100.0%			$	1,514,931

Notes to Schedule of Investments

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

(B) All or a portion of the security position is held in collateralized accounts for OTC derivatives collateral as governed by International Swaps and Derivatives Association, Inc. Master Agreements.

(C) Deemed to be an affiliate due to the Fund owning at least 5% of the voting securities.

(D) All or a portion of the security position is held in collateralized accounts to cover potential obligations with respect to outstanding written options.

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

(F) 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, 2012, the total value of these securities amounted to $24,527 or 1.6% of net assets.

(G) Rate shown is the yield to maturity at September 30, 2012.

(H) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

The following written options were outstanding at September 30, 2012 (contracts and exercise prices unrounded):

Underlying Security	Counterparty, if OTC	Type	Number of Contracts		Expiration Month		Exercise Price		Premium Received		Market Value
Apple Inc.	N/A	Call		636		October 2012	$	725.00	$	465	$	(143	)
Monsanto Company	Barclays Bank plc	Call		1,951		October 2012		95.00		225		(140	)
SINA Corporation	Barclays Bank plc	Call		954		October 2012		57.50		373		(749	)
Universal Display Corporation	Morgan Stanley & Co., Inc.	Call		1,266		October 2012		44.00		214		(9	)
									$	1,277	$	(1,041	)

38 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Science and Technology Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks
Consumer Discretionary	$	7,675	$	—	$	—
Consumer Staples		9,908		—		—
Energy		7,320		—		—
Financials		10,787		—		—
Health Care		241,318		—		—
Industrials		107,327		—		—
Information Technology		921,739		—		—
Materials		17,758		—		—
Telecommunication Services		77,558		—		—
Total Common Stocks	$	1,401,390	$	—	$	—
Purchased Options		—		17		—
Corporate Debt Securities		—		3,600		—
Short-Term Securities		—		110,688		—
Total	$	1,401,390	$	114,305	$	—
Liabilities
Written Options	$	143	$	898	$	—

The following acronyms are used throughout this schedule:

ADR = American Depositary Receipts

GTD = Guaranteed

OTC = Over the Counter

Country Diversification
(as a % of net assets)
United States	76.6	%
South Korea	5.0	%
China	3.7	%
Brazil	2.8	%
Switzerland	2.2	%
Israel	1.1	%
Other Countries	1.4	%
Other+	7.2	%

+Includes options, cash and cash equivalents and other assets and liabilities

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 39

STATEMENTS OF ASSETS AND LIABILITIES

Ivy Funds AS OF SEPTEMBER 30, 2012 (UNAUDITED)

(In thousands, except per share amounts)	Ivy Asset Strategy Fund			Ivy Asset Strategy New Opportunities Fund			Ivy Balanced Fund		Ivy Energy Fund			Ivy Global Natural Resources Fund			Ivy Real Estate Securities Fund			Ivy Science and Technology Fund
ASSETS
Investments in unaffiliated securities at market value+	$	21,863,855		$	278,433		$	597,330	$	110,503		$	2,997,563		$	481,851		$	1,386,167
Investments in affiliated securities at market value+		1,160,027			—			—		—			—			—			129,528
Bullion at market value+		2,529,032			27,395			—		—			—			—			—
Investments at Market Value		25,552,914			305,828			597,330		110,503			2,997,563			481,851			1,515,695
Cash		5,442			—			101		1			1,783			54			1
Cash denominated in foreign currencies at market value+		—			—			—		—			3,163			—			—
Restricted cash+		11,776			4,229			—		—			—			—			2,221
Investment securities sold receivable		39,085			1,696			4,651		—			8,877			1,401			426
Dividends and interest receivable		72,645			321			1,469		72			3,421			1,419			531
Capital shares sold receivable		45,849			359			4,902		178			3,629			786			2,949
Receivable from affiliates		136			262			—		38			148			4			17
Unrealized appreciation on forward foreign currency contracts		5,397			—			—		—			1,258			—			—
Variation margin receivable		—			—			—		—			819			—			—
Prepaid and other assets		587			54			54		37			118			47			79
Total Assets		25,733,831			312,749			608,507		110,829			3,020,779			485,562			1,521,919
LIABILITIES
Investment securities purchased payable		47,346			220			1,863		—			9,735			4,810			2,066
Capital shares redeemed payable		56,153			1,735			634		402			14,457			614			3,074
Trustees and Chief Compliance Officer fees payable		790			4			22		3			512			63			81
Overdraft due to custodian		—			418			—		—			—			—			—
Distribution and service fees payable		888			9			24		3			86			11			44
Shareholder servicing payable		7,537			171			132		57			1,754			189			480
Investment management fee payable		1,178			25			35		8			209			36			105
Accounting services fee payable		22			8			14		5			23			12			22
Unrealized depreciation on forward foreign currency contracts		—			39			—		—			7,544			—			—
Written options at market value+		73,638			—			—		—			—			65			1,041
Other liabilities		2,984			76			33		15			578			32			75
Total Liabilities		190,536			2,705			2,757		493			34,898			5,832			6,988
Total Net Assets	$	25,543,295		$	310,044		$	605,750	$	110,336		$	2,985,881		$	479,730		$	1,514,931
NET ASSETS
Capital paid in (shares authorized – unlimited)	$	23,575,950		$	374,899		$	510,088	$	101,754		$	5,034,019		$	397,751		$	1,134,238
Undistributed (distributions in excess of) net investment income		486,942			(1,176	)		394		(500	)		(9,411	)		554			(10,431	)
Accumulated net realized gain (loss)		(5,153,793	)		(75,681	)		4,096		(19,293	)		(1,942,012	)		(49,506	)		712
Net unrealized appreciation (depreciation)		6,634,196			12,002			91,172		28,375			(96,715	)		130,931			390,412
Total Net Assets	$	25,543,295		$	310,044		$	605,750	$	110,336		$	2,985,881		$	479,730		$	1,514,931
CAPITAL SHARES OUTSTANDING:
Class A		294,297			17,198			13,099		6,173			88,549			13,381			16,761
Class B		27,630			592			1,580		361			5,749			323			1,095
Class C		322,725			5,599			8,398		1,519			32,629			617			7,054
Class E		1,987			10			7		10			384			66			211
Class I		320,184			5,692			2,555		477			32,233			206			5,531
Class R		4,268			53			N/A		N/A			3,421			73			1,349
Class Y		44,709			449			4,066		599			18,647			7,211			11,274
NET ASSET VALUE PER SHARE:
Class A		$25.36			$10.52			$20.42		$12.16			$16.82			$21.94			$34.91
Class B		24.38			10.27			20.29		11.54			14.87			21.43			30.79
Class C		24.51			10.30			20.35		11.65			14.46			21.63			31.71
Class E		25.41			10.51			20.50		12.30			17.04			21.94			34.88
Class I		25.62			10.56			20.40		12.39			17.27			22.04			37.42
Class R		25.16			10.41			N/A		N/A			16.64			21.93			34.64
Class Y		25.41			10.51			20.42		12.26			17.09			21.96			36.49
+COST
Investments in unaffiliated securities at cost	$	16,906,603		$	267,300		$	506,158	$	82,128		$	2,780,875		$	350,995		$	1,075,098
Investments in affiliated securities at cost		470,433			—			—		—			305,908			—			50,422
Bullion at cost		1,518,361			26,683			—		—			—			—			—
Cash denominated in foreign currencies at cost		—			—			—		—			3,169			—			—
Written options premiums received at cost		45,395			—			—		—			—			140			1,277

See Accompanying Notes to Financial Statements.

40 SEMIANNUAL REPORT 2012

STATEMENTS OF OPERATIONS

Ivy Funds FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2012 (UNAUDITED)

(In thousands)	Ivy Asset Strategy Fund			Ivy Asset Strategy New Opportunities Fund			Ivy Balanced Fund			Ivy Energy Fund			Ivy Global Natural Resources Fund			Ivy Real Estate Securities Fund			Ivy Science and Technology Fund
INVESTMENT INCOME
Dividends from unaffiliated securities	$	308,231		$	3,793		$	3,519		$	650		$	24,849		$	5,045		$	3,193
Dividends from affiliated securities		12,037			—			—			—			2,475			—			—
Foreign dividend withholding tax		(19,920	)		(192	)		(42	)		(16	)		(1,644	)		(38	)		(66	)
Interest and amortization from unaffiliated securities		43,238			19			1,652			3			—			11			306
Foreign interest withholding tax		—	*		(1	)		—			—			—			—			—
Total Investment Income		343,586			3,619			5,129			637			25,680			5,018			3,433
EXPENSES
Investment management fee		70,837			1,649			1,806			483			13,823			2,097			5,949
Distribution and service fees:
Class A		9,391			236			287			98			1,921			356			677
Class B		3,311			31			135			20			464			35			156
Class C		39,494			314			716			90			2,528			63			1,059
Class E		61			—	*		—	*		—	*		8			2			8
Class R		256			1			N/A			N/A			147			4			105
Class Y		1,390			7			95			9			456			194			483
Shareholder servicing:
Class A		5,399			321			197			153			2,933			641			655
Class B		410			11			24			8			193			28			44
Class C		3,834			62			78			17			524			24			195
Class E		92			—	*		—	*		—	*		36			7			27
Class I		6,356			56			34			5			617			3			155
Class R		131			1			N/A			N/A			75			2			54
Class Y		887			5			57			6			296			117			298
Registration fees		279			50			58			39			67			53			55
Custodian fees		1,728			94			11			3			331			13			72
Trustees and Chief Compliance Officer fees		369			5			7			2			65			8			22
Accounting services fee		136			57			75			33			136			71			136
Professional fees		295			31			18			17			57			25			29
Other		1,596			19			33			22			32			18			46
Total Expenses		146,252			2,950			3,631			1,005			24,709			3,761			10,225
Less:
Expenses in excess of limit		(136	)		(263	)		—			(38	)		(148	)		(4	)		(18	)
Total Net Expenses		146,116			2,687			3,631			967			24,561			3,757			10,207
Net Investment Income (Loss)		197,470			932			1,498			(330	)		1,119			1,261			(6,774	)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments in unaffiliated securities		23,257			(9,450	)		4,357			164			(266,290	)		13,921			(3,866	)
Investments in affiliated securities		60,482			—			—			—			(54,506	)		—			1,094
Futures contracts		—			—			—			—			(2,636	)		—			—
Written options		151,492			(52	)		—			—			—			213			619
Swap agreements		2,223			—			—			—			—			—			—
Forward foreign currency contracts		56,960			—			—			—			2,413			—			—
Foreign currency exchange transactions		(1,768	)		(80	)		—			(1	)		(338	)		—	*		(23	)
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated securities		(369,445	)		(4,812	)		7,979			(5,122	)		(3,045	)		(468	)		41,829
Investments in affiliated securities		(198,995	)		—			—			—			68,647			—			25,953
Futures contracts		—			—			—			—			14,250			—			—
Written options		(69,328	)		(25	)		—			—			—			123			136
Swap agreements		382			—			—			—			—			—			—
Forward foreign currency contracts		(5,637	)		(39	)		—			—			(3,058	)		—			—
Foreign currency exchange transactions		(164	)		13			—			—	*		16			—	*		1
Net Realized and Unrealized Gain (Loss)		(350,541	)		(14,445	)		12,336			(4,959	)		(244,547	)		13,789			65,743
Net Increase (Decrease) in Net Assets Resulting from Operations	$	(153,071	)	$	(13,513	)	$	13,834		$	(5,289	)	$	(243,428	)	$	15,050		$	58,969

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 41

STATEMENT OF CHANGES IN NET ASSETS

Ivy Funds

	Ivy Asset Strategy Fund						Ivy Asset Strategy New Opportunities Fund						Ivy Balanced Fund
(In thousands)	Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)	$	197,470		$	160,033		$	932		$	(1,022	)	$	1,498		$	2,423
Net realized gain (loss) on investments		292,646			(322,571	)		(9,582	)		(64,714	)		4,357			81
Net change in unrealized appreciation (depreciation)		(643,187	)		271,113			(4,863	)		(21,611	)		7,979			28,982
Net Increase (Decrease) in Net Assets Resulting from Operations		(153,071	)		108,575			(13,513	)		(87,347	)		13,834			31,486
Distributions to Shareholders From:
Net investment income:
Class A		—			(95,820	)		—			—			(656	)		(1,453	)
Class B		—			(2,855	)		—			—			(2	)		(39	)
Class C		—			(39,773	)		—			—			(35	)		(285	)
Class E		—			(527	)		—			—			—	*		(1	)
Class I		—			(101,243	)		—			(144	)		(173	)		(338	)
Class R		—			(744	)		—			—			N/A			N/A
Class Y		—			(12,815	)		—			—			(218	)		(601	)
Net realized gains:
Class A		—			—			—			—			—			(768	)
Class B		—			—			—			—			—			(85	)
Class C		—			—			—			—			—			(465	)
Class E		—			—			—			—			—			—	*
Class I		—			—			—			—			—			(137	)
Class R		—			—			—			—			N/A			N/A
Class Y		—			—			—			—			—			(300	)
Total Distributions to Shareholders		—			(253,777	)		—			(144	)		(1,084	)		(4,472	)
Capital Share Transactions		(933,051	)		(97,308	)		(60,560	)		11,694			127,774			178,044
Net Increase (Decrease) in Net Assets		(1,086,122	)		(242,510	)		(74,073	)		(75,797	)		140,524			205,058
Net Assets, Beginning of Period		26,629,417			26,871,927			384,117			459,914			465,226			260,168
Net Assets, End of Period	$	25,543,295		$	26,629,417		$	310,044		$	384,117		$	605,750		$	465,226
Undistributed (distributions in excess of) net investment income	$	486,942		$	291,240		$	(1,176	)	$	(2,028	)	$	394		$	(20	)

* Not shown due to rounding.

See Accompanying Notes to Financial Statements.

42 SEMIANNUAL REPORT 2012

STATEMENT OF CHANGES IN NET ASSETS

Ivy Funds

	Ivy Energy Fund						Ivy Global Natural Resources Fund
(In thousands)	Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)	$	(330	)	$	(968	)	$	1,119		$	(3,056	)
Net realized gain (loss) on investments		163			(4,070	)		(321,357	)		361,767
Net change in unrealized appreciation (depreciation)		(5,122	)		(19,797	)		76,810			(2,207,116	)
Net Decrease in Net Assets Resulting from Operations		(5,289	)		(24,835	)		(243,428	)		(1,848,405	)
Distributions to Shareholders From:
Net investment income:
Class A		—			—			—			—
Class B		—			—			—			—
Class C		—			—			—			—
Class E		—			—			—			—
Class I		—			—			—			—
Class R		N/A			N/A			—			—
Class Y		—			—			—			—
Net realized gains:
Class A		—			—			—			—
Class B		—			—			—			—
Class C		—			—			—			—
Class E		—			—			—			—
Class I		—			—			—			—
Class R		N/A			N/A			—			—
Class Y		—			—			—			—
Total Distributions to Shareholders		—			—			—			—
Capital Share Transactions		(5,313	)		(4,809	)		(956,275	)		(985,211	)
Net Decrease in Net Assets		(10,602	)		(29,644	)		(1,199,703	)		(2,833,616	)
Net Assets, Beginning of Period		120,938			150,582			4,185,584			7,019,200
Net Assets, End of Period	$	110,336		$	120,938		$	2,985,881		$	4,185,584
Distributions in excess of net investment income	$	(500	)	$	(169	)	$	(9,411	)	$	(10,190	)

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 43

STATEMENT OF CHANGES IN NET ASSETS

Ivy Funds

	Ivy Real Estate Securities Fund						Ivy Science and Technology Fund
(In thousands)	Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)	$	1,261		$	2,255		$	(6,774	)	$	(14,629	)
Net realized gain (loss) on investments		14,134			12,040			(2,176	)		66,020
Net change in unrealized appreciation (depreciation)		(345	)		24,714			67,919			(33,137	)
Net Increase in Net Assets Resulting from Operations		15,050			39,009			58,969			18,254
Distributions to Shareholders From:
Net investment income:
Class A		(616	)		(773	)		—			—
Class B		—			—			—			—
Class C		—			—			—			—
Class E		(3	)		(4	)		—			—
Class I		(20	)		(30	)		—			—
Class R		(3	)		(4	)		—			—
Class Y		(564	)		(878	)		—			—
Net realized gains:
Class A		—			—			—			(33,000	)
Class B		—			—			—			(2,136	)
Class C		—			—			—			(14,582	)
Class E		—			—			—			(385	)
Class I		—			—			—			(10,609	)
Class R		—			—			—			(2,402	)
Class Y		—			—			—			(23,177	)
Total Distributions to Shareholders		(1,206	)		(1,689	)		—			(86,291	)
Capital Share Transactions		16,418			(11,553	)		22,593			4,633
Net Increase (Decrease) in Net Assets		30,262			25,767			81,562			(63,404	)
Net Assets, Beginning of Period		449,468			423,701			1,433,369			1,496,773
Net Assets, End of Period	$	479,730		$	449,468		$	1,514,931		$	1,433,369
Undistributed (distributions in excess of) net investment income	$	554		$	499		$	(10,431	)	$	(3,634	)

See Accompanying Notes to Financial Statements.

44 SEMIANNUAL REPORT 2012

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2012 SEMIANNUAL REPORT 45

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY ASSET STRATEGY FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Distributions From Return of Capital			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	25.44	$	0.21	(3)	$	(0.29	)	$	(0.08	)	$	—		$	—		$	—		$	—
Year ended 3-31-2012		25.42		0.20	(3)		0.10			0.30			(0.28	)		—			—			(0.28	)
Year ended 3-31-2011		22.42		0.24	(3)		2.81			3.05			(0.05	)		—			—			(0.05	)
Year ended 3-31-2010		18.69		0.16	(3)		3.66			3.82			(0.09	)		—			—			(0.09	)
Year ended 3-31-2009		27.06		0.24	(3)		(6.18	)		(5.94	)		(0.04	)		(2.38	)		(0.01	)		(2.43	)
Year ended 3-31-2008		20.65		0.21	(3)		6.61			6.82			(0.21	)		(0.20	)		—			(0.41	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		24.55		0.12	(3)		(0.29	)		(0.17	)		—			—			—			—
Year ended 3-31-2012		24.53		0.00	(3)		0.12			0.12			(0.10	)		—			—			(0.10	)
Year ended 3-31-2011		21.77		0.04	(3)		2.72			2.76			—			—			—			—
Year ended 3-31-2010		18.23		(0.01	)(3)		3.55			3.54			—			—			—			—
Year ended 3-31-2009		26.57		0.05	(3)		(6.05	)		(6.00	)		—			(2.33	)		(0.01	)		(2.34	)
Year ended 3-31-2008		20.22		(0.02	)(3)		6.50			6.48			—			(0.13	)		—			(0.13	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		24.67		0.12	(3)		(0.28	)		(0.16	)		—			—			—			—
Year ended 3-31-2012		24.66		0.01	(3)		0.11			0.12			(0.11	)		—			—			(0.11	)
Year ended 3-31-2011		21.87		0.05	(3)		2.74			2.79			—			—			—			—
Year ended 3-31-2010		18.30		0.01	(3)		3.56			3.57			—			—			—			—
Year ended 3-31-2009		26.64		0.06	(3)		(6.05	)		(5.99	)		—			(2.34	)		(0.01	)		(2.35	)
Year ended 3-31-2008		20.27		(0.01	)(3)		6.53			6.52			—			(0.15	)		—			(0.15	)
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		25.49		0.21	(3)		(0.29	)		(0.08	)		—			—			—			—
Year ended 3-31-2012		25.48		0.19	(3)		0.10			0.29			(0.28	)		—			—			(0.28	)
Year ended 3-31-2011		22.47		0.22	(3)		2.84			3.06			(0.05	)		—			—			(0.05	)
Year ended 3-31-2010		18.74		0.17	(3)		3.66			3.83			(0.10	)		—			—			(0.10	)
Year ended 3-31-2009		27.05		0.24	(3)		(6.19	)		(5.95	)		—			(2.35	)		(0.01	)		(2.36	)
Year ended 3-31-2008(5)		20.69		0.05	(3)		6.57			6.62			(0.11	)		(0.15	)		—			(0.26	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		25.67		0.24	(3)		(0.29	)		(0.05	)		—			—			—			—
Year ended 3-31-2012		25.64		0.25	(3)		0.11			0.36			(0.33	)		—			—			(0.33	)
Year ended 3-31-2011		22.58		0.26	(3)		2.86			3.12			(0.06	)		—			—			(0.06	)
Year ended 3-31-2010		18.81		0.17	(3)		3.73			3.90			(0.13	)		—			—			(0.13	)
Year ended 3-31-2009		27.17		0.31	(3)		(6.23	)		(5.92	)		(0.05	)		(2.38	)		(0.01	)		(2.44	)
Year ended 3-31-2008(5)		20.71		0.34	(3)		6.56			6.90			(0.24	)		(0.20	)		—			(0.44	)
Class R Shares
Six-month period ended 9-30-2012 (unaudited)		25.29		0.16	(3)		(0.29	)		(0.13	)		—			—			—			—
Year ended 3-31-2012		25.28		0.11	(3)		0.11			0.22			(0.21	)		—			—			(0.21	)
Year ended 3-31-2011		22.35		0.13	(3)		2.83			2.96			(0.03	)		—			—			(0.03	)
Year ended 3-31-2010		18.65		0.03	(3)		3.72			3.75			(0.05	)		—			—			(0.05	)
Year ended 3-31-2009(7)		26.74		0.05			(5.73	)		(5.68	)		(0.02	)		(2.38	)		(0.01	)		(2.41	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		25.49		0.21	(3)		(0.29	)		(0.08	)		—			—			—			—
Year ended 3-31-2012		25.46		0.20	(3)		0.11			0.31			(0.28	)		—			—			(0.28	)
Year ended 3-31-2011		22.46		0.23	(3)		2.82			3.05			(0.05	)		—			—			(0.05	)
Year ended 3-31-2010		18.72		0.21	(3)		3.63			3.84			(0.10	)		—			—			(0.10	)
Year ended 3-31-2009		27.08		0.24	(3)		(6.18	)		(5.94	)		(0.03	)		(2.38	)		(0.01	)		(2.42	)
Year ended 3-31-2008		20.67		0.18	(3)		6.62			6.80			(0.19	)		(0.20	)		—			(0.39	)

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(6) For the fiscal year ended March 31, 2008.

(7) For the period from July 31, 2008 (commencement of operations of the class) through March 31, 2009.

(8) For the fiscal year ended March 31, 2009.

46 SEMIANNUAL REPORT 2012

.	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)		Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	25.36		-0.32	%	$	7,464		0.99	%(4)		1.74	%(4)		—	%		—	%		19	%
Year ended 3-31-2012		25.44		1.31			8,019		0.97			0.81			—			—			47
Year ended 3-31-2011		25.42		13.60			9,083		0.99			1.00			—			—			94
Year ended 3-31-2010		22.42		20.46			8,765		1.05			0.79			—			—			96
Year ended 3-31-2009		18.69		-21.41			4,787		1.03			1.05			—			—			279
Year ended 3-31-2008		27.06		33.19			5,379		1.00			0.70			—			—			57
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		24.38		-0.65			674		1.72	(4)		1.00	(4)		—			—			19
Year ended 3-31-2012		24.55		0.54			695		1.76			0.02			—			—			47
Year ended 3-31-2011		24.53		12.68			672		1.80			0.17			—			—			94
Year ended 3-31-2010		21.77		19.42			550		1.88			-0.03			—			—			96
Year ended 3-31-2009		18.23		-22.04			330		1.87			0.22			—			—			279
Year ended 3-31-2008		26.57		32.07			330		1.83			-0.09			—			—			57
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		24.51		-0.65			7,910		1.69	(4)		1.03	(4)		—			—			19
Year ended 3-31-2012		24.67		0.56			8,416		1.71			0.06			—			—			47
Year ended 3-31-2011		24.66		12.76			8,851		1.74			0.24			—			—			94
Year ended 3-31-2010		21.87		19.51			7,733		1.80			0.05			—			—			96
Year ended 3-31-2009		18.30		-21.96			4,644		1.80			0.29			—			—			279
Year ended 3-31-2008		26.64		32.18			4,854		1.77			-0.07			—			—			57
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		25.41		-0.31			50		1.00	(4)		1.71	(4)		1.23	(4)		1.48	(4)		19
Year ended 3-31-2012		25.49		1.26			50		1.00			0.77			1.23			0.55			47
Year ended 3-31-2011		25.48		13.63			44		1.00			0.95			1.39			0.56			94
Year ended 3-31-2010		22.47		20.45			32		1.00			0.84			1.56			0.28			96
Year ended 3-31-2009		18.74		-21.44			17		0.93			1.24			1.18			0.99			279
Year ended 3-31-2008(5)		27.05		32.15			11		1.63	(4)		-0.05	(4)		—			—			57	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		25.62		-0.20			8,201		0.76	(4)		1.95	(4)		—			—			19
Year ended 3-31-2012		25.67		1.57			8,180		0.75			1.03			—			—			47
Year ended 3-31-2011		25.64		13.84			6,986		0.77			1.14			—			—			94
Year ended 3-31-2010		22.58		20.74			3,973		0.81			0.92			—			—			96
Year ended 3-31-2009		18.81		-21.20			360		0.79			1.35			—			—			279
Year ended 3-31-2008(5)		27.17		33.45			104		0.82	(4)		0.84	(4)		—			—			57	(6)
Class R Shares
Six-month period ended 9-30-2012 (unaudited)		25.16		-0.48			108		1.35	(4)		1.36	(4)		—			—			19
Year ended 3-31-2012		25.29		0.96			102		1.33			0.45			—			—			47
Year ended 3-31-2011		25.28		13.24			68		1.31			0.57			—			—			94
Year ended 3-31-2010		22.35		20.12			28		1.33			0.20			—			—			96
Year ended 3-31-2009(7)		18.65		-20.65			1		1.99	(4)		1.36	(4)		—			—			279	(8)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		25.41		-0.31			1,136		0.99	(4)		1.72	(4)		1.00	(4)		1.71	(4)		19
Year ended 3-31-2012		25.49		1.35			1,167		0.97			0.80			1.00			0.77			47
Year ended 3-31-2011		25.46		13.59			1,167		0.99			0.99			1.02			0.96			94
Year ended 3-31-2010		22.46		20.51			1,024		1.00			0.93			1.11			0.82			96
Year ended 3-31-2009		18.72		-21.39			1,453		1.03			1.05			1.09			0.99			279
Year ended 3-31-2008		27.08		33.07			1,573		1.07			0.57			—			—			57

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 47

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY ASSET STRATEGY NEW OPPORTUNITIES FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains		Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	10.77	$	0.03	(3)	$	(0.28	)	$	(0.25	)	$	—		$	—	$	—
Year ended 3-31-2012		12.63		(0.01	)(3)		(1.85	)		(1.86	)		—			—		—
Year ended 3-31-2011(5)		10.00		(0.10	)(3)		2.73			2.63			—			—		—
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		10.57		(0.02	)(3)		(0.28	)		(0.30	)		—			—		—
Year ended 3-31-2012		12.52		(0.13	)(3)		(1.82	)		(1.95	)		—			—		—
Year ended 3-31-2011(5)		10.00		(0.19	)(3)		2.71			2.52			—			—		—
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		10.59		(0.01	)(3)		(0.28	)		(0.29	)		—			—		—
Year ended 3-31-2012		12.53		(0.11	)(3)		(1.83	)		(1.94	)		—			—		—
Year ended 3-31-2011(5)		10.00		(0.20	)(3)		2.73			2.53			—			—		—
Class E Shares(7)
Six-month period ended 9-30-2012 (unaudited)		10.77		0.03	(3)		(0.29	)		(0.26	)		—			—		—
Year ended 3-31-2012		12.63		(0.01	)(3)		(1.85	)		(1.86	)		—			—		—
Year ended 3-31-2011(5)		10.00		(0.07	)(3)		2.70			2.63			—			—		—
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		10.80		0.05	(3)		(0.29	)		(0.24	)		—			—		—
Year ended 3-31-2012		12.65		0.02	(3)		(1.85	)		(1.83	)		(0.02	)		—		(0.02	)
Year ended 3-31-2011(5)		10.00		(0.08	)(3)		2.73			2.65			—			—		—
Class R Shares
Six-month period ended 9-30-2012 (unaudited)		10.69		0.01	(3)		(0.29	)		(0.28	)		—			—		—
Year ended 3-31-2012		12.58		(0.06	)(3)		(1.83	)		(1.89	)		—			—		—
Year ended 3-31-2011(5)		10.00		(0.12	)(3)		2.70			2.58			—			—		—
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		10.77		0.04	(3)		(0.30	)		(0.26	)		—			—		—
Year ended 3-31-2012		12.63		(0.01	)(3)		(1.85	)		(1.86	)		—			—		—
Year ended 3-31-2011(5)		10.00		(0.10	)(3)		2.73			2.63			—			—		—

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from May 3, 2010 (commencement of operations of the class) through March 31, 2011.

(6) For the fiscal year ended March 31, 2011.

(7) Class is closed to investment.

48 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average  Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average  Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income (Loss) to Average  Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	10.52		-2.32	%	$	181			1.50	%(4)		0.68	%(4)		1.75	%(4)		0.43	%(4)		8	%
Year ended 3-31-2012		10.77		-14.73			214			1.50			-0.11			1.68			-0.29			54
Year ended 3-31-2011(5)		12.63		26.30			246			1.50	(4)		-0.97	(4)		1.71	(4)		-1.18	(4)		36	(6)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		10.27		-2.84			6			2.49	(4)		-0.33	(4)		—			—			8
Year ended 3-31-2012		10.57		-15.58			7			2.49			-1.16			—			—			54
Year ended 3-31-2011(5)		12.52		25.20			7			2.43	(4)		-1.84	(4)		2.48	(4)		-1.89	(4)		36	(6)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		10.30		-2.74			57			2.35	(4)		-0.15	(4)		—			—			8
Year ended 3-31-2012		10.59		-15.48			74			2.37			-0.98			—			—			54
Year ended 3-31-2011(5)		12.53		25.30			86			2.34	(4)		-1.85	(4)		2.39	(4)		-1.90	(4)		36	(6)
Class E Shares(7)
Six-month period ended 9-30-2012 (unaudited)		10.51		-2.32			—	*		1.50	(4)		0.62	(4)		1.55	(4)		0.57	(4)		8
Year ended 3-31-2012		10.77		-14.73			—	*		1.50			-0.11			—			—			54
Year ended 3-31-2011(5)		12.63		26.30			—	*		1.50	(4)		-0.72	(4)		1.58	(4)		-0.80	(4)		36	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		10.56		-2.22			60			1.25	(4)		0.97	(4)		1.32	(4)		0.90	(4)		8
Year ended 3-31-2012		10.80		-14.48			81			1.25			0.17			1.31			0.11			54
Year ended 3-31-2011(5)		12.65		26.50			109			1.25	(4)		-0.77	(4)		1.40	(4)		-0.92	(4)		36	(6)
Class R Shares
Six-month period ended 9-30-2012 (unaudited)		10.41		-2.62			1			1.90	(4)		0.21	(4)		—			—			8
Year ended 3-31-2012		10.69		-15.02			1			1.89			-0.59			—			—			54
Year ended 3-31-2011(5)		12.58		25.80			1			1.92	(4)		-1.15	(4)		1.97	(4)		-1.20	(4)		36	(6)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		10.51		-2.32			5			1.50	(4)		0.77	(4)		1.60	(4)		0.67	(4)		8
Year ended 3-31-2012		10.77		-14.73			7			1.50			-0.09			1.58			-0.16			54
Year ended 3-31-2011(5)		12.63		26.30			12			1.50	(4)		-0.94	(4)		1.67	(4)		-1.11	(4)		36	(6)

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 49

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY BALANCED FUND

	Net Asset Value, Beginning of Period		Net Investment Income			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	20.03	$	0.08	(3)	$	0.37		$	0.45		$	(0.06	)	$	—		$	(0.06	)
Year ended 3-31-2012		19.08		0.17	(3)		1.05			1.22			(0.18	)		(0.09	)		(0.27	)
Year ended 3-31-2011		16.73		0.18	(3)		2.34			2.52			(0.17	)		—			(0.17	)
Year ended 3-31-2010		13.01		0.21	(3)		3.72			3.93			(0.21	)		—			(0.21	)
Year ended 3-31-2009		16.64		0.16			(3.63	)		(3.47	)		(0.16	)		—			(0.16	)
Year ended 3-31-2008		16.18		0.20			0.97			1.17			(0.20	)		(0.51	)		(0.71	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		19.93		0.00	*(3)		0.36			0.36			0.00	*		—			(0.00	)*
Year ended 3-31-2012		18.99		0.02	(3)		1.05			1.07			(0.04	)		(0.09	)		(0.13	)
Year ended 3-31-2011		16.67		0.04	(3)		2.33			2.37			(0.05	)		—			(0.05	)
Year ended 3-31-2010		12.97		0.08	(3)		3.71			3.79			(0.09	)		—			(0.09	)
Year ended 3-31-2009		16.60		0.04			(3.64	)		(3.60	)		(0.03	)		—			(0.03	)
Year ended 3-31-2008		16.14		0.04			0.97			1.01			(0.04	)		(0.51	)		(0.55	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		19.98		0.01	(3)		0.37			0.38			(0.01	)		—			(0.01	)
Year ended 3-31-2012		19.03		0.04	(3)		1.06			1.10			(0.06	)		(0.09	)		(0.15	)
Year ended 3-31-2011		16.69		0.07	(3)		2.34			2.41			(0.07	)		—			(0.07	)
Year ended 3-31-2010		12.98		0.12	(3)		3.71			3.83			(0.12	)		—			(0.12	)
Year ended 3-31-2009		16.61		0.07	(3)		(3.64	)		(3.57	)		(0.06	)		—			(0.06	)
Year ended 3-31-2008		16.15		0.07			0.97			1.04			(0.07	)		(0.51	)		(0.58	)
Class E Shares(5)
Six-month period ended 9-30-2012 (unaudited)		20.02		0.09	(3)		0.46			0.55			(0.07	)		—			(0.07	)
Year ended 3-31-2012		19.06		0.21	(3)		1.04			1.25			(0.20	)		(0.09	)		(0.29	)
Year ended 3-31-2011		16.74		0.22	(3)		2.34			2.56			(0.24	)		—			(0.24	)
Year ended 3-31-2010		13.02		0.25	(3)		3.72			3.97			(0.25	)		—			(0.25	)
Year ended 3-31-2009		16.65		0.21			(3.65	)		(3.44	)		(0.19	)		—			(0.19	)
Year ended 3-31-2008(6)		16.21		0.24			0.94			1.18			(0.23	)		(0.51	)		(0.74	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		20.01		0.10	(3)		0.37			0.47			(0.08	)		—			(0.08	)
Year ended 3-31-2012		19.04		0.22	(3)		1.06			1.28			(0.22	)		(0.09	)		(0.31	)
Year ended 3-31-2011		16.74		0.21	(3)		2.37			2.58			(0.28	)		—			(0.28	)
Year ended 3-31-2010		13.01		0.20	(3)		3.80			4.00			(0.27	)		—			(0.27	)
Year ended 3-31-2009		16.65		0.09			(3.52	)		(3.43	)		(0.21	)		—			(0.21	)
Year ended 3-31-2008(6)		16.21		0.26			0.95			1.21			(0.26	)		(0.51	)		(0.77	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		20.03		0.08	(3)		0.37			0.45			(0.06	)		—			(0.06	)
Year ended 3-31-2012		19.08		0.18	(3)		1.05			1.23			(0.19	)		(0.09	)		(0.28	)
Year ended 3-31-2011		16.73		0.20	(3)		2.34			2.54			(0.19	)		—			(0.19	)
Year ended 3-31-2010		13.01		0.24	(3)		3.71			3.95			(0.23	)		—			(0.23	)
Year ended 3-31-2009		16.64		0.19			(3.65	)		(3.46	)		(0.17	)		—			(0.17	)
Year ended 3-31-2008		16.18		0.22			0.97			1.19			(0.22	)		(0.51	)		(0.73	)

*   Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) Class is closed to investment.

(6) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(7) For the fiscal year ended March 31, 2008.

50 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income to Average Net Assets Including Expense Waiver			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	20.42		2.23	%	$	268			1.20	%(4)		0.78	%(4)		18	%
Year ended 3-31-2012		20.03		6.52			205			1.23			0.90			37
Year ended 3-31-2011		19.08		15.18			114			1.30			1.03			43
Year ended 3-31-2010		16.73		30.35			81			1.37			1.38			57
Year ended 3-31-2009		13.01		-20.98			68			1.36			1.12			57
Year ended 3-31-2008		16.64		7.05			63			1.38			1.16			9
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		20.29		1.87			32			1.95	(4)		0.03	(4)		18
Year ended 3-31-2012		19.93		5.72			23			2.02			0.10			37
Year ended 3-31-2011		18.99		14.25			11			2.09			0.24			43
Year ended 3-31-2010		16.67		29.26			7			2.20			0.53			57
Year ended 3-31-2009		12.97		-21.73			4			2.28			0.22			57
Year ended 3-31-2008		16.60		6.08			3			2.30			0.24			9
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		20.35		1.88			171			1.88	(4)		0.10	(4)		18
Year ended 3-31-2012		19.98		5.84			128			1.92			0.21			37
Year ended 3-31-2011		19.03		14.50			69			1.89			0.43			43
Year ended 3-31-2010		16.69		29.59			42			1.99			0.78			57
Year ended 3-31-2009		12.98		-21.53			49			1.96			0.49			57
Year ended 3-31-2008		16.61		6.27			4			2.11			0.42			9
Class E Shares(5)
Six-month period ended 9-30-2012 (unaudited)		20.50		2.74			—	*		1.04	(4)		0.95	(4)		18
Year ended 3-31-2012		20.02		6.71			—	*		1.05			1.11			37
Year ended 3-31-2011		19.06		15.43			—	*		1.10			1.24			43
Year ended 3-31-2010		16.74		30.66			—	*		1.12			1.62			57
Year ended 3-31-2009		13.02		-20.77			—	*		1.12			1.38			57
Year ended 3-31-2008(6)		16.65		7.11			—	*		1.15	(4)		1.39	(4)		9	(7)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		20.40		2.34			52			0.93	(4)		1.05	(4)		18
Year ended 3-31-2012		20.01		6.88			39			0.94			1.17			37
Year ended 3-31-2011		19.04		15.58			18			0.97			1.20			43
Year ended 3-31-2010		16.74		30.93			2			1.00			1.67			57
Year ended 3-31-2009		13.01		-20.72			—	*		0.99			1.34			57
Year ended 3-31-2008(6)		16.65		7.25			—	*		1.04	(4)		1.51	(4)		9	(7)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		20.42		2.23			83			1.17	(4)		0.80	(4)		18
Year ended 3-31-2012		20.03		6.57			70			1.19			0.96			37
Year ended 3-31-2011		19.08		15.29			48			1.22			1.10			43
Year ended 3-31-2010		16.73		30.51			40			1.24			1.52			57
Year ended 3-31-2009		13.01		-20.89			38			1.24			1.26			57
Year ended 3-31-2008		16.64		7.16			27			1.28			1.27			9

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 51

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY ENERGY FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income		Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	12.68	$	(0.03	)(3)	$	(0.49	)	$	(0.52	)	$	—	$	—		$	—
Year ended 3-31-2012		15.11		(0.09	)(3)		(2.34	)		(2.43	)		—		—			—
Year ended 3-31-2011		11.11		(0.07	)(3)		4.07			4.00			—		—			—
Year ended 3-31-2010		7.27		(0.04	)(3)		3.88			3.84			—		—			—
Year ended 3-31-2009		13.67		(0.05	)(3)		(6.35	)		(6.40	)		—		—			—
Year ended 3-31-2008		10.35		(0.07	)(3)		3.41			3.34			—		(0.02	)		(0.02	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		12.08		(0.08	)(3)		(0.46	)		(0.54	)		—		—			—
Year ended 3-31-2012		14.52		(0.18	)(3)		(2.26	)		(2.44	)		—		—			—
Year ended 3-31-2011		10.77		(0.17	)(3)		3.92			3.75			—		—			—
Year ended 3-31-2010		7.12		(0.14	)(3)		3.79			3.65			—		—			—
Year ended 3-31-2009		13.52		(0.16	)(3)		(6.24	)		(6.40	)		—		—			—
Year ended 3-31-2008		10.29		(0.16	)(3)		3.39			3.23			—		—			—
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		12.19		(0.06	)(3)		(0.48	)		(0.54	)		—		—			—
Year ended 3-31-2012		14.62		(0.16	)(3)		(2.27	)		(2.43	)		—		—			—
Year ended 3-31-2011		10.82		(0.15	)(3)		3.95			3.80			—		—			—
Year ended 3-31-2010		7.14		(0.12	)(3)		3.80			3.68			—		—			—
Year ended 3-31-2009		13.55		(0.12	)(3)		(6.29	)		(6.41	)		—		—			—
Year ended 3-31-2008		10.30		(0.14	)(3)		3.39			3.25			—		—			—
Class E Shares(5)
Six-month period ended 9-30-2012 (unaudited)		12.81		(0.01	)(3)		(0.50	)		(0.51	)		—		—			—
Year ended 3-31-2012		15.22		(0.05	)(3)		(2.36	)		(2.41	)		—		—			—
Year ended 3-31-2011		11.16		(0.04	)(3)		4.10			4.06			—		—			—
Year ended 3-31-2010		7.29		(0.02	)(3)		3.89			3.87			—		—			—
Year ended 3-31-2009		13.69		(0.04	)(3)		(6.36	)		(6.40	)		—		—			—
Year ended 3-31-2008(6)		10.48		0.08	(3)		3.19			3.27			—		(0.06	)		(0.06	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		12.90		0.00	(3)		(0.51	)		(0.51	)		—		—			—
Year ended 3-31-2012		15.31		(0.03	)(3)		(2.38	)		(2.41	)		—		—			—
Year ended 3-31-2011		11.21		(0.03	)(3)		4.13			4.10			—		—			—
Year ended 3-31-2010		7.32		(0.01	)(3)		3.90			3.89			—		—			—
Year ended 3-31-2009		13.72		(0.03	)(3)		(6.37	)		(6.40	)		—		—			—
Year ended 3-31-2008(6)		10.51		0.10	(3)		3.19			3.29			—		(0.08	)		(0.08	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		12.77		(0.02	)(3)		(0.49	)		(0.51	)		—		—			—
Year ended 3-31-2012		15.20		(0.07	)(3)		(2.36	)		(2.43	)		—		—			—
Year ended 3-31-2011		11.16		(0.06	)(3)		4.10			4.04			—		—			—
Year ended 3-31-2010		7.30		(0.04	)(3)		3.90			3.86			—		—			—
Year ended 3-31-2009		13.73		(0.07	)(3)		(6.36	)		(6.43	)		—		—			—
Year ended 3-31-2008		10.38		(0.07	)(3)		3.46			3.39			—		(0.04	)		(0.04	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) Class is closed to investment.

(6) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(7) For the fiscal year ended March 31, 2008.

52 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Loss to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	12.16		-4.10	%	$	75			1.60	%(4)		-0.48	%(4)		1.69	%(4)		-0.57	%(4)		17	%
Year ended 3-31-2012		12.68		-16.08			85			1.60			-0.66			—			—			20
Year ended 3-31-2011		15.11		36.00			101			1.60			-0.59			1.66			-0.65			22
Year ended 3-31-2010		11.11		52.82			63			1.60			-0.42			1.79			-0.61			15
Year ended 3-31-2009		7.27		-46.82			30			1.60			-0.47			1.91			-0.78			48
Year ended 3-31-2008		13.67		32.27			27			1.66			-0.53			2.01			-0.88			35
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		11.54		-4.55			4			2.46	(4)		-1.35	(4)		—			—			17
Year ended 3-31-2012		12.08		-16.74			4			2.41			-1.47			—			—			20
Year ended 3-31-2011		14.52		34.82			5			2.50			-1.49			—			—			22
Year ended 3-31-2010		10.77		51.26			3			2.60			-1.40			2.68			-1.48			15
Year ended 3-31-2009		7.12		-47.34			2			2.60			-1.48			2.78			-1.66			48
Year ended 3-31-2008		13.52		31.39			2			2.44			-1.26			2.79			-1.61			35
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		11.65		-4.43			18			2.25	(4)		-1.13	(4)		—			—			17
Year ended 3-31-2012		12.19		-16.62			20			2.23			-1.30			—			—			20
Year ended 3-31-2011		14.62		35.12			25			2.29			-1.29			—			—			22
Year ended 3-31-2010		10.82		51.54			13			2.38			-1.19			—			—			15
Year ended 3-31-2009		7.14		-47.31			9			2.50			-1.30			2.50			-1.30			48
Year ended 3-31-2008		13.55		31.55			3			2.28			-1.09			2.63			-1.44			35
Class E Shares(5)
Six-month period ended 9-30-2012 (unaudited)		12.30		-3.90			—	*		1.32	(4)		-0.20	(4)		—			—			17
Year ended 3-31-2012		12.81		-15.83			—	*		1.30			-0.36			—			—			20
Year ended 3-31-2011		15.22		36.38			—	*		1.34			-0.33			—			—			22
Year ended 3-31-2010		11.16		53.09			—	*		1.39			-0.19			—			—			15
Year ended 3-31-2009		7.29		-46.75			—	*		1.46			-0.38			1.46			-0.38			48
Year ended 3-31-2008(6)		13.69		31.15			—	*		1.31	(4)		-0.06	(4)		1.66	(4)		-0.41	(4)		35	(7)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		12.39		-3.88			6			1.22	(4)		-0.08	(4)		—			—			17
Year ended 3-31-2012		12.90		-15.74			5			1.19			-0.26			—			—			20
Year ended 3-31-2011		15.31		36.57			10			1.22			-0.23			—			—			22
Year ended 3-31-2010		11.21		53.14			2			1.24			-0.13			—			—			15
Year ended 3-31-2009		7.32		-46.65			—	*		1.39			-0.27			1.39			-0.27			48
Year ended 3-31-2008(6)		13.72		31.26			—	*		1.19	(4)		0.05	(4)		1.54	(4)		-0.30	(4)		35	(7)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		12.26		-3.99			7			1.46	(4)		-0.33	(4)		—			—			17
Year ended 3-31-2012		12.77		-15.99			7			1.45			-0.52			—			—			20
Year ended 3-31-2011		15.20		36.20			9			1.49			-0.48			—			—			22
Year ended 3-31-2010		11.16		52.88			5			1.52			-0.36			—			—			15
Year ended 3-31-2009		7.30		-46.83			2			1.60			-0.59			1.65			-0.64			48
Year ended 3-31-2008		13.73		32.67			5			1.55			-0.51			1.90			-0.86			35

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 53

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY GLOBAL NATURAL RESOURCES FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	17.76	$	0.00	(3)	$	(0.94	)	$	(0.94	)	$	—		$	—		$	—
Year ended 3-31-2012		24.20		(0.01	)(3)		(6.43	)		(6.44	)		—			—			—
Year ended 3-31-2011		18.60		(0.04	)(3)		5.64			5.60			—			—			—
Year ended 3-31-2010		11.08		(0.10	)(3)		7.62			7.52			—			—			—
Year ended 3-31-2009		36.53		0.02			(21.13	)		(21.11	)		(0.03	)		(4.31	)		(4.34	)
Year ended 3-31-2008		31.67		0.05	(3)		8.54			8.59			(0.52	)		(3.21	)		(3.73	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		15.76		(0.05	)(3)		(0.84	)		(0.89	)		—			—			—
Year ended 3-31-2012		21.65		(0.15	)(3)		(5.74	)		(5.89	)		—			—			—
Year ended 3-31-2011		16.77		(0.18	)(3)		5.06			4.88			—			—			—
Year ended 3-31-2010		10.08		(0.21	)(3)		6.90			6.69			—			—			—
Year ended 3-31-2009		34.27		(0.10	)		(19.82	)		(19.92	)		—			(4.27	)		(4.27	)
Year ended 3-31-2008		29.78		(0.23	)(3)		8.00			7.77			(0.07	)		(3.21	)		(3.28	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		15.31		(0.04	)(3)		(0.81	)		(0.85	)		—			—			—
Year ended 3-31-2012		21.00		(0.12	)(3)		(5.57	)		(5.69	)		—			—			—
Year ended 3-31-2011		16.25		(0.15	)(3)		4.90			4.75			—			—			—
Year ended 3-31-2010		9.75		(0.18	)(3)		6.68			6.50			—			—			—
Year ended 3-31-2009		33.47		(0.13	)		(19.32	)		(19.45	)		—			(4.27	)		(4.27	)
Year ended 3-31-2008		29.19		(0.20	)(3)		7.86			7.66			(0.17	)		(3.21	)		(3.38	)
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		17.96		0.02	(3)		(0.94	)		(0.92	)		—			—			—
Year ended 3-31-2012		24.45		0.01	(3)		(6.50	)		(6.49	)		—			—			—
Year ended 3-31-2011		18.76		(0.02	)(3)		5.71			5.69			—			—			—
Year ended 3-31-2010		11.16		(0.07	)(3)		7.67			7.60			—			—			—
Year ended 3-31-2009		36.41		(0.06	)(3)		(20.98	)		(21.04	)		—			(4.21	)		(4.21	)
Year ended 3-31-2008(5)		32.00		0.03			7.94			7.97			(0.35	)		(3.21	)		(3.56	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		18.19		0.04	(3)		(0.96	)		(0.92	)		—			—			—
Year ended 3-31-2012		24.69		0.06	(3)		(6.56	)		(6.50	)		—			—			—
Year ended 3-31-2011		18.90		0.02	(3)		5.77			5.79			—			—			—
Year ended 3-31-2010		11.22		(0.04	)(3)		7.72			7.68			—			—			—
Year ended 3-31-2009		36.74		0.03	(3)		(21.19	)		(21.16	)		(0.04	)		(4.32	)		(4.36	)
Year ended 3-31-2008(5)		32.16		0.05	(3)		8.51			8.56			(0.77	)		(3.21	)		(3.98	)
Class R Shares
Six-month period ended 9-30-2012 (unaudited)		17.58		(0.01	)(3)		(0.93	)		(0.94	)		—			—			—
Year ended 3-31-2012		24.00		(0.05	)(3)		(6.37	)		(6.42	)		—			—			—
Year ended 3-31-2011		18.47		(0.08	)(3)		5.61			5.53			—			—			—
Year ended 3-31-2010		11.02		(0.12	)(3)		7.57			7.45			—			—			—
Year ended 3-31-2009		36.30		(0.05	)(3)		(20.94	)		(20.99	)		—			(4.29	)		(4.29	)
Year ended 3-31-2008		31.62		0.24			8.23			8.47			(0.58	)		(3.21	)		(3.79	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		18.02		0.03	(3)		(0.96	)		(0.93	)		—			—			—
Year ended 3-31-2012		24.50		0.03	(3)		(6.51	)		(6.48	)		—			—			—
Year ended 3-31-2011		18.79		(0.01	)(3)		5.72			5.71			—			—			—
Year ended 3-31-2010		11.17		(0.06	)(3)		7.68			7.62			—			—			—
Year ended 3-31-2009		36.62		0.10			(21.21	)		(21.11	)		(0.02	)		(4.32	)		(4.34	)
Year ended 3-31-2008		31.84		0.17			8.50			8.67			(0.68	)		(3.21	)		(3.89	)

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(6) For the fiscal year ended March 31, 2008.

54 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)		Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average  Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income (Loss) to Average  Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	16.82		-5.24	%	$	1,490		1.52	%(4)		0.04	%(4)		1.52	%(4)		0.04	%(4)		33	%
Year ended 3-31-2012		17.76		-26.61			1,771		1.41			-0.07			—			—			84
Year ended 3-31-2011		24.20		30.11			3,095		1.39			-0.22			—			—			105
Year ended 3-31-2010		18.60		67.87			2,822		1.45			-0.58			—			—			112
Year ended 3-31-2009		11.08		-56.82			1,640		1.40			-0.03			—			—			191
Year ended 3-31-2008		36.53		26.65			5,168		1.27			0.14			—			—			142
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		14.87		-5.65			85		2.30	(4)		-0.73	(4)		2.30	(4)		-0.73	(4)		33
Year ended 3-31-2012		15.76		-27.21			112		2.20			-0.86			—			—			84
Year ended 3-31-2011		21.65		29.10			198		2.21			-1.05			—			—			105
Year ended 3-31-2010		16.77		66.37			186		2.28			-1.39			—			—			112
Year ended 3-31-2009		10.08		-57.15			117		2.19			-0.83			—			—			191
Year ended 3-31-2008		34.27		25.64			345		2.07			-0.64			—			—			142
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		14.46		-5.55			471		2.09	(4)		-0.52	(4)		2.09	(4)		-0.52	(4)		33
Year ended 3-31-2012		15.31		-27.10			603		2.07			-0.73			—			—			84
Year ended 3-31-2011		21.00		29.23			1,072		2.07			-0.91			—			—			105
Year ended 3-31-2010		16.25		66.67			997		2.13			-1.26			—			—			112
Year ended 3-31-2009		9.75		-57.10			539		2.10			-0.74			—			—			191
Year ended 3-31-2008		33.47		25.72			1,749		1.99			-0.58			—			—			142
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		17.04		-5.12			6		1.27	(4)		0.28	(4)		2.26	(4)		-0.71	(4)		33
Year ended 3-31-2012		17.96		-26.54			7		1.27			0.06			2.03			-0.69			84
Year ended 3-31-2011		24.45		30.33			9		1.27			-0.12			2.18			-1.03			105
Year ended 3-31-2010		18.76		68.10			6		1.27			-0.40			2.55			-1.68			112
Year ended 3-31-2009		11.16		-56.83			2		1.66			-0.29			2.68			-1.31			191
Year ended 3-31-2008(5)		36.41		24.42			3		2.29	(4)		-1.02	(4)		—			—			142	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		17.27		-5.06			557		1.05	(4)		0.52	(4)		1.06	(4)		0.52	(4)		33
Year ended 3-31-2012		18.19		-26.33			1,138		1.02			0.32			—			—			84
Year ended 3-31-2011		24.69		30.64			1,756		1.02			0.12			—			—			105
Year ended 3-31-2010		18.90		68.45			1,074		1.04			-0.21			—			—			112
Year ended 3-31-2009		11.22		-56.60			232		1.05			0.22			—			—			191
Year ended 3-31-2008(5)		36.74		26.14			71		1.00	(4)		0.30	(4)		—			—			142	(6)
Class R Shares
Six-month period ended 9-30-2012 (unaudited)		16.64		-5.35			57		1.64	(4)		-0.08	(4)		1.64	(4)		-0.09	(4)		33
Year ended 3-31-2012		17.58		-26.75			66		1.60			-0.26			—			—			84
Year ended 3-31-2011		24.00		29.94			90		1.56			-0.41			—			—			105
Year ended 3-31-2010		18.47		67.60			56		1.57			-0.71			—			—			112
Year ended 3-31-2009		11.02		-56.86			22		1.57			-0.22			—			—			191
Year ended 3-31-2008		36.30		26.31			25		1.55			-0.22			—			—			142
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		17.09		-5.16			320		1.25	(4)		0.33	(4)		1.29	(4)		0.29	(4)		33
Year ended 3-31-2012		18.02		-26.45			491		1.20			0.14			1.27			0.07			84
Year ended 3-31-2011		24.50		30.39			799		1.20			-0.04			1.27			-0.11			105
Year ended 3-31-2010		18.79		68.22			667		1.20			-0.36			1.29			-0.45			112
Year ended 3-31-2009		11.17		-56.67			278		1.20			0.16			1.28			0.08			191
Year ended 3-31-2008		36.62		26.74			813		1.20			0.16			1.26			0.11			142

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 55

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY REAL ESTATE SECURITIES FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	21.27	$	0.05	(3)	$	0.67		$	0.72		$	(0.05	)	$	—		$	(0.05	)
Year ended 3-31-2012		19.42		0.09	(3)		1.82			1.91			(0.06	)		—			(0.06	)
Year ended 3-31-2011		15.95		0.03	(3)		3.62			3.65			(0.18	)		—			(0.18	)
Year ended 3-31-2010		8.31		0.19	(3)		7.64			7.83			(0.19	)		—			(0.19	)
Year ended 3-31-2009		19.34		0.23			(11.00	)		(10.77	)		(0.26	)		—	*		(0.26	)
Year ended 3-31-2008		26.14		0.19			(4.87	)		(4.68	)		(0.15	)		(1.97	)		(2.12	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		20.85		(0.07	)(3)		0.65			0.58			—			—			—
Year ended 3-31-2012		19.20		(0.12	)(3)		1.77			1.65			—			—			—
Year ended 3-31-2011		15.82		(0.17	)(3)		3.57			3.40			(0.02	)		—			(0.02	)
Year ended 3-31-2010		8.24		0.03	(3)		7.56			7.59			(0.01	)		—			(0.01	)
Year ended 3-31-2009		19.15		0.00			(10.85	)		(10.85	)		(0.06	)		—	*		(0.06	)
Year ended 3-31-2008		25.91		(0.08	)		(4.79	)		(4.87	)		(0.01	)		(1.88	)		(1.89	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		21.00		(0.02	)(3)		0.65			0.63			—			—			—
Year ended 3-31-2012		19.27		(0.05	)(3)		1.78			1.73			—			—			—
Year ended 3-31-2011		15.86		(0.10	)(3)		3.59			3.49			(0.08	)		—			(0.08	)
Year ended 3-31-2010		8.26		0.09	(3)		7.60			7.69			(0.09	)		—			(0.09	)
Year ended 3-31-2009		19.22		0.09			(10.92	)		(10.83	)		(0.12	)		(0.01	)		(0.13	)
Year ended 3-31-2008		26.01		0.00			(4.85	)		(4.85	)		(0.02	)		(1.92	)		(1.94	)
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		21.27		0.06	(3)		0.66			0.72			(0.05	)		—			(0.05	)
Year ended 3-31-2012		19.43		0.10	(3)		1.81			1.91			(0.07	)		—			(0.07	)
Year ended 3-31-2011		15.96		0.03	(3)		3.63			3.66			(0.19	)		—			(0.19	)
Year ended 3-31-2010		8.32		0.19	(3)		7.70			7.89			(0.25	)		—			(0.25	)
Year ended 3-31-2009		19.36		0.18			(11.00	)		(10.82	)		(0.22	)		—	*		(0.22	)
Year ended 3-31-2008(5)		26.37		(0.32	)(3)		(4.78	)		(5.10	)		(0.03	)		(1.88	)		(1.91	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		21.37		0.11	(3)		0.67			0.78			(0.11	)		—			(0.11	)
Year ended 3-31-2012		19.52		0.22	(3)		1.80			2.02			(0.17	)		—			(0.17	)
Year ended 3-31-2011		16.00		0.17	(3)		3.61			3.78			(0.26	)		—			(0.26	)
Year ended 3-31-2010		8.34		0.06	(3)		7.90			7.96			(0.30	)		—			(0.30	)
Year ended 3-31-2009		19.43		0.32			(11.03	)		(10.71	)		(0.37	)		(0.01	)		(0.38	)
Year ended 3-31-2008(5)		26.38		0.18	(3)		(4.92	)		(4.74	)		(0.24	)		(1.97	)		(2.21	)
Class R Shares
Six-month period ended 9-30-2012 (unaudited)		21.27		0.05	(3)		0.65			0.70			(0.04	)		—			(0.04	)
Year ended 3-31-2012		19.43		0.09	(3)		1.81			1.90			(0.06	)		—			(0.06	)
Year ended 3-31-2011		15.95		(0.01	)(3)		3.68			3.67			(0.19	)		—			(0.19	)
Year ended 3-31-2010		8.31		0.15	(3)		7.73			7.88			(0.24	)		—			(0.24	)
Year ended 3-31-2009		19.35		0.12	(3)		(10.86	)		(10.74	)		(0.29	)		(0.01	)		(0.30	)
Year ended 3-31-2008		26.14		0.12			(4.81	)		(4.69	)		(0.13	)		(1.97	)		(2.10	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		21.28		0.08	(3)		0.68			0.76			(0.08	)		—			(0.08	)
Year ended 3-31-2012		19.44		0.16	(3)		1.81			1.97			(0.13	)		—			(0.13	)
Year ended 3-31-2011		15.95		0.10	(3)		3.62			3.72			(0.23	)		—			(0.23	)
Year ended 3-31-2010		8.31		0.26	(3)		7.66			7.92			(0.28	)		—			(0.28	)
Year ended 3-31-2009		19.35		0.26			(10.95	)		(10.69	)		(0.34	)		(0.01	)		(0.35	)
Year ended 3-31-2008		26.15		0.36			(4.99	)		(4.63	)		(0.20	)		(1.97	)		(2.17	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(6) For the fiscal year ended March 31, 2008.

56 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Loss to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	21.94		3.37	%	$	294			1.68	%(4)		0.47	%(4)		—	%		—	%		20	%
Year ended 3-31-2012		21.27		9.88			276			1.73			0.45			—			—			55
Year ended 3-31-2011		19.42		23.00			247			1.79			0.16			—			—			65
Year ended 3-31-2010		15.95		94.78			178			2.09			1.51			—			—			72
Year ended 3-31-2009		8.31		-56.07			100			1.93			1.41			—			—			42
Year ended 3-31-2008		19.34		-18.13			253			1.67			0.70			—			—			27
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		21.43		2.78			7			2.80	(4)		-0.66	(4)		—			—			20
Year ended 3-31-2012		20.85		8.65			7			2.89			-0.62			—			—			55
Year ended 3-31-2011		19.20		21.51			8			3.01			-0.99			—			—			65
Year ended 3-31-2010		15.82		92.14			7			3.53			0.20			—			—			72
Year ended 3-31-2009		8.24		-56.69			4			3.18			0.29			—			—			42
Year ended 3-31-2008		19.15		-18.98			13			2.71			-0.24			—			—			27
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		21.63		3.00			13			2.38	(4)		-0.21	(4)		—			—			20
Year ended 3-31-2012		21.00		9.03			12			2.49			-0.28			—			—			55
Year ended 3-31-2011		19.27		22.07			12			2.56			-0.52			—			—			65
Year ended 3-31-2010		15.86		93.33			9			2.88			0.72			—			—			72
Year ended 3-31-2009		8.26		-56.47			5			2.79			0.57			—			—			42
Year ended 3-31-2008		19.22		-18.84			13			2.50			0.03			—			—			27
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		21.94		3.37			1			1.66	(4)		0.51	(4)		2.30	(4)		-0.13	(4)		20
Year ended 3-31-2012		21.27		9.90			1			1.67			0.50			2.36			-0.19			55
Year ended 3-31-2011		19.43		23.12			1			1.67			0.16			2.52			-0.69			65
Year ended 3-31-2010		15.96		95.63			1			1.67			1.57			3.45			-0.21			72
Year ended 3-31-2009		8.32		-56.07			—	*		2.12			1.01			3.33			-0.20			42
Year ended 3-31-2008(5)		19.36		-19.55			—	*		2.77	(4)		-1.47	(4)		—			—			27	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		22.04		3.68			5			1.14	(4)		1.04	(4)		—			—			20
Year ended 3-31-2012		21.37		10.46			3			1.15			1.15			—			—			55
Year ended 3-31-2011		19.52		23.84			5			1.16			0.97			—			—			65
Year ended 3-31-2010		16.00		96.35			4			1.27			0.34			—			—			72
Year ended 3-31-2009		8.34		-55.70			1			1.16			2.13			—			—			42
Year ended 3-31-2008(5)		19.43		-18.17			1			1.17	(4)		0.75	(4)		—			—			27	(6)
Class R Shares
Six-month period ended 9-30-2012 (unaudited)		21.93		3.34			2			1.75	(4)		0.44	(4)		—			—			20
Year ended 3-31-2012		21.27		9.84			1			1.73			0.49			—			—			55
Year ended 3-31-2011		19.43		23.17			1			1.70			-0.05			—			—			65
Year ended 3-31-2010		15.95		95.59			—	*		1.73			1.27			—			—			72
Year ended 3-31-2009		8.31		-55.94			—	*		1.70			1.04			—			—			42
Year ended 3-31-2008		19.35		-18.12			—	*		1.68			0.26			—			—			27
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		21.96		3.52			158			1.37	(4)		0.77	(4)		—			—			20
Year ended 3-31-2012		21.28		10.24			149			1.39			0.82			—			—			55
Year ended 3-31-2011		19.44		23.51			150			1.39			0.57			—			—			65
Year ended 3-31-2010		15.95		96.18			109			1.41			2.09			—			—			72
Year ended 3-31-2009		8.31		-55.78			54			1.39			1.77			—			—			42
Year ended 3-31-2008		19.35		-17.89			120			1.38			1.19			—			—			27

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 57

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY SCIENCE AND TECHNOLOGY FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income		Distributions From Net Realized Gains			Distributions From Return of Capital			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	33.54	$	(0.15	)(3)	$	1.52		$	1.37		$	—	$	—		$	—		$	—
Year ended 3-31-2012		35.09		(0.32	)(3)		0.93			0.61			—		(2.16	)		—			(2.16	)
Year ended 3-31-2011		29.35		(0.25	)(3)		6.39			6.14			—		(0.40	)		—			(0.40	)
Year ended 3-31-2010		21.07		(0.07	)(3)		8.52			8.45			—		(0.17	)		—			(0.17	)
Year ended 3-31-2009		27.87		(0.10	)		(5.54	)		(5.64	)		—		(1.15	)		(0.01	)		(1.16	)
Year ended 3-31-2008		28.70		(0.17	)		2.78			2.61			—		(3.44	)		—			(3.44	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		29.69		(0.25	)(3)		1.35			1.10			—		—			—			—
Year ended 3-31-2012		31.58		(0.53	)(3)		0.77			0.24			—		(2.13	)		—			(2.13	)
Year ended 3-31-2011		26.62		(0.47	)(3)		5.75			5.28			—		(0.32	)		—			(0.32	)
Year ended 3-31-2010		19.19		(0.31	)(3)		7.74			7.43			—		—			—			—
Year ended 3-31-2009		25.68		(0.29	)		(5.13	)		(5.42	)		—		(1.07	)		—	*		(1.07	)
Year ended 3-31-2008		26.66		(0.28	)		2.42			2.14			—		(3.12	)		—			(3.12	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		30.57		(0.24	)(3)		1.38			1.14			—		—			—			—
Year ended 3-31-2012		32.41		(0.51	)(3)		0.80			0.29			—		(2.13	)		—			(2.13	)
Year ended 3-31-2011		27.29		(0.44	)(3)		5.91			5.47			—		(0.35	)		—			(0.35	)
Year ended 3-31-2010		19.65		(0.26	)(3)		7.93			7.67			—		(0.03	)		—			(0.03	)
Year ended 3-31-2009		26.21		(0.19	)		(5.28	)		(5.47	)		—		(1.08	)		(0.01	)		(1.09	)
Year ended 3-31-2008		27.14		(0.26	)		2.50			2.24			—		(3.17	)		—			(3.17	)
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		33.48		(0.15	)(3)		1.55			1.40			—		—			—			—
Year ended 3-31-2012		35.04		(0.33	)(3)		0.92			0.59			—		(2.15	)		—			(2.15	)
Year ended 3-31-2011		29.33		(0.26	)(3)		6.38			6.12			—		(0.41	)		—			(0.41	)
Year ended 3-31-2010		21.05		(0.06	)(3)		8.52			8.46			—		(0.18	)		—			(0.18	)
Year ended 3-31-2009		27.76		(0.10	)(3)		(5.56	)		(5.66	)		—		(1.04	)		(0.01	)		(1.05	)
Year ended 3-31-2008(5)		28.79		(0.44	)(3)		2.69			2.25			—		(3.28	)		—			(3.28	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		35.88		(0.10	)(3)		1.64			1.54			—		—			—			—
Year ended 3-31-2012		37.36		(0.23	)(3)		1.01			0.78			—		(2.26	)		—			(2.26	)
Year ended 3-31-2011		31.16		(0.16	)(3)		6.80			6.64			—		(0.44	)		—			(0.44	)
Year ended 3-31-2010		22.33		0.01	(3)		9.05			9.06			—		(0.23	)		—			(0.23	)
Year ended 3-31-2009		29.35		0.08	(3)		(5.92	)		(5.84	)		—		(1.17	)		(0.01	)		(1.18	)
Year ended 3-31-2008(5)		29.71		0.02	(3)		3.16			3.18			—		(3.54	)		—			(3.54	)
Class R Shares
Six-month period ended 9-30-2012 (unaudited)		33.32		(0.19	)(3)		1.51			1.32			—		—			—			—
Year ended 3-31-2012		34.93		(0.40	)(3)		0.92			0.52			—		(2.13	)		—			(2.13	)
Year ended 3-31-2011		29.27		(0.32	)(3)		6.37			6.05			—		(0.39	)		—			(0.39	)
Year ended 3-31-2010		21.02		(0.13	)(3)		8.52			8.39			—		(0.14	)		—			(0.14	)
Year ended 3-31-2009		27.81		(0.05	)(3)		(5.60	)		(5.65	)		—		(1.13	)		(0.01	)		(1.14	)
Year ended 3-31-2008		28.64		(0.15	)(3)		2.68			2.53			—		(3.36	)		—			(3.36	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		35.03		(0.14	)(3)		1.60			1.46			—		—			—			—
Year ended 3-31-2012		36.54		(0.31	)(3)		0.98			0.67			—		(2.18	)		—			(2.18	)
Year ended 3-31-2011		30.54		(0.23	)(3)		6.65			6.42			—		(0.42	)		—			(0.42	)
Year ended 3-31-2010		21.90		(0.04	)(3)		8.87			8.83			—		(0.19	)		—			(0.19	)
Year ended 3-31-2009		28.87		(0.10	)		(5.71	)		(5.81	)		—		(1.15	)		(0.01	)		(1.16	)
Year ended 3-31-2008		29.62		(0.09	)(3)		2.81			2.72			—		(3.47	)		—			(3.47	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(6) For the fiscal year ended March 31, 2008.

58 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)		Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Loss to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	34.91		4.11	%	$	584		1.39	%(4)		-0.90	%(4)		—	%		—	%		19	%
Year ended 3-31-2012		33.54		3.01			549		1.39			-1.02			—			—			51
Year ended 3-31-2011		35.09		21.09			568		1.40			-0.83			—			—			47
Year ended 3-31-2010		29.35		40.13			437		1.50			-0.28			—			—			59
Year ended 3-31-2009		21.07		-19.86			245		1.50			-0.21			—			—			46
Year ended 3-31-2008		27.87		8.27			245		1.43			-0.39			—			—			96
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		30.79		3.70			34		2.18	(4)		-1.69	(4)		—			—			19
Year ended 3-31-2012		29.69		2.15			32		2.24			-1.86			—			—			51
Year ended 3-31-2011		31.58		19.98			31		2.29			-1.72			—			—			47
Year ended 3-31-2010		26.62		38.72			24		2.51			-1.29			—			—			59
Year ended 3-31-2009		19.19		-20.71			15		2.56			-1.30			—			—			46
Year ended 3-31-2008		25.68		7.19			20		2.42			-1.39			—			—			96
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		31.71		3.76			224		2.08	(4)		-1.59	(4)		—			—			19
Year ended 3-31-2012		30.57		2.25			219		2.13			-1.76			—			—			51
Year ended 3-31-2011		32.41		20.17			230		2.15			-1.58			—			—			47
Year ended 3-31-2010		27.29		39.05			183		2.28			-1.07			—			—			59
Year ended 3-31-2009		19.65		-20.51			98		2.30			-1.04			—			—			46
Year ended 3-31-2008		26.21		7.38			122		2.26			-1.23			—			—			96
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		34.88		4.15			7		1.43	(4)		-0.94	(4)		1.96	(4)		-1.47	(4)		19
Year ended 3-31-2012		33.48		3.00			6		1.43			-1.06			2.01			-1.64			51
Year ended 3-31-2011		35.04		21.03			6		1.43			-0.87			2.08			-1.52			47
Year ended 3-31-2010		29.33		40.21			4		1.43			-0.24			2.56			-1.37			59
Year ended 3-31-2009		21.05		-20.05			2		1.76			-0.43			2.69			-1.36			46
Year ended 3-31-2008(5)		27.76		6.98			1		2.61	(4)		-1.46	(4)		—			—			96	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		37.42		4.29			207		1.06	(4)		-0.57	(4)		—			—			19
Year ended 3-31-2012		35.88		3.37			186		1.06			-0.69			—			—			51
Year ended 3-31-2011		37.36		21.48			182		1.07			-0.50			—			—			47
Year ended 3-31-2010		31.16		40.65			122		1.11			0.02			—			—			59
Year ended 3-31-2009		22.33		-19.50			19		1.07			0.34			—			—			46
Year ended 3-31-2008(5)		29.35		9.89			9		1.10	(4)		0.05	(4)		—			—			96	(6)
Class R Shares
Six-month period ended 9-30-2012 (unaudited)		34.64		3.96			47		1.65	(4)		-1.16	(4)		—			—			19
Year ended 3-31-2012		33.32		2.76			42		1.64			-1.27			—			—			51
Year ended 3-31-2011		34.93		20.83			35		1.61			-1.06			—			—			47
Year ended 3-31-2010		29.27		39.95			19		1.64			-0.48			—			—			59
Year ended 3-31-2009		21.02		-19.95			6		1.62			-0.22			—			—			46
Year ended 3-31-2008		27.81		8.03			2		1.63			-0.50			—			—			96
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		36.49		4.17			412		1.30	(4)		-0.81	(4)		—			—			19
Year ended 3-31-2012		35.03		3.10			399		1.30			-0.93			—			—			51
Year ended 3-31-2011		36.54		21.18			445		1.31			-0.74			—			—			47
Year ended 3-31-2010		30.54		40.36			352		1.35			-0.13			—			—			59
Year ended 3-31-2009		21.90		-19.74			193		1.33			-0.03			—			—			46
Year ended 3-31-2008		28.87		8.38			155		1.34			-0.28			—			—			96

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 59

NOTES TO FINANCIAL STATEMENTS

Ivy Funds SEPTEMBER 30, 2012 (UNAUDITED)

1. ORGANIZATION

Ivy Funds, a Delaware statutory trust (the Trust), is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. Ivy Asset Strategy Fund, Ivy Asset Strategy New Opportunities Fund, Ivy Balanced Fund, Ivy Energy Fund, Ivy Global Natural Resources Fund, Ivy Real Estate Securities Fund and Ivy Science and Technology Fund (each, a Fund) are seven series of the Trust and are the only series of the Trust included in these financial statements. The investment objective(s), policies and risk factors of each Fund are described more fully in the Funds’ Prospectus and Statement of Additional Information. Each Fund’s investment manager is Ivy Investment Management Company (IICO or the Manager).

Each Fund offers Class A, Class B, Class C, Class I and Class Y shares. Certain Funds may also offer Class E and/or Class R shares. Class A and Class E shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B and Class C shares are sold without a front-end sales charge, but may be subject to a contingent deferred sales charge (CDSC). Class I, Class R and Class Y shares are sold without either a front-end sales charge or a CDSC. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Net investment income, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer agent and shareholder servicing fees, directly attributable to that class. Class A, B, C, E, R and Y have a distribution and service plan. Class I shares are not included in the plan. Class B shares will automatically convert to Class A shares 96 months after the date of purchase.

2. SIGNIFICANT ACCOUNTING POLICIES

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

Security Transactions and Related Investment Income. Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses are calculated on the identified cost basis. Interest income is recorded on the accrual basis and includes paydown gain (loss) and accretion of discounts and amortization of premiums. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. All or a portion of the distributions received from a real estate investment trust or publicly traded partnership may be designated as a reduction of cost of the related investment and/or realized gain.

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

Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class.

It is the policy of each Fund to distribute all of its taxable income and capital gains to its shareholders and otherwise qualify as a regulated investment company under Subchapter M of the Internal Revenue Code. In addition, each Fund intends to pay distributions as required to avoid imposition of excise tax. Accordingly, no provision has been made for Federal income taxes. Management of the Trust periodically reviews all tax positions to assess that it is more likely than not that the position would be sustained upon examination by the relevant tax authority based on the technical merits of each position. As of and for the period ended September 30, 2012, management believes that no liability for unrecognized tax positions is required. The Funds are subject to examination by U.S. federal and state authorities for returns filed for tax years after 2007.

Dividends and Distributions to Shareholders. Dividends and distributions to shareholders are recorded by each Fund on the business day following record date. Net investment income dividends and capital gains distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. If the total dividends and distributions made in any tax year exceeds net investment income and accumulated realized capital gains, a portion of the total distribution may be treated as a tax return of capital.

Segregation and Collateralization. In cases in which the 1940 Act and the interpretive positions of the Securities and Exchange Commission (SEC) require that a Fund either deliver collateral or segregate assets in connection with certain investments (e.g., dollar rolls, financial futures contracts, foreign currency exchange contracts, options written, securities with extended settlement periods and swaps), the Fund will segregate collateral or designate on its books and records cash or other liquid securities having a market value at least equal to the amount that is required to be physically segregated for the benefit of the counterparty. Furthermore, based on requirements and agreements with certain exchanges and third party broker-dealers, each party has requirements to deliver/deposit cash or securities as collateral for certain investments. Certain countries require that cash reserves be held while investing in companies incorporated in that country. These cash reserves and cash collateral that has been pledged to cover obligations of the Funds under derivative contracts, if any, will be reported separately on the Statements of Assets and Liabilities as “Restricted cash.” Securities collateral pledged for the same purpose, if any, is noted in the Schedule of Investments.

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Concentration of Market and Credit Risk. In the normal course of business, the Funds invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations (issuer credit risk). The value of securities held by the Funds may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Funds; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to issuer credit risk, the Funds may be exposed to counterparty credit risk, or the risk that an entity with which the Funds have unsettled or open transactions may fail to or be unable to perform on its commitments. The Funds manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Funds’ Statement of Assets and Liabilities, less any collateral held by the Funds.

Certain Funds may hold high-yield and/or non-investment-grade bonds, which may be subject to a greater degree of credit risk. Credit risk relates to the ability of the issuer to meet interest or principal payments or both as they become due. The Funds may acquire securities in default and are not obligated to dispose of securities whose issuers subsequently default.

Certain Funds may enter into financial instrument transactions (such as swaps, futures, options and other derivatives) that may have off-balance sheet market risk. Off-balance sheet market risk exists when the maximum potential loss on a particular financial instrument is greater than the value of such financial instrument, as reflected in the Statement of Assets and Liabilities.

If a Fund invests directly in foreign currencies or in securities that trade in, and receive revenues in, foreign currencies, or in financial derivatives that provide exposure to foreign currencies, it will be subject to the risk that those currencies will decline in value relative to the base currency of the Fund, or, in the case of hedging positions, that the Fund’s base currency will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the United States or abroad.

Refer to prospectus for all risks associated with owning shares in the Funds.

Inflation-Indexed Bonds. Certain Funds may invest in inflation-indexed bonds. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted to the rate of inflation. The interest rate on these bonds is generally fixed at issuance at a rate lower than typical bonds. Over the life of an inflation-indexed bond, however, interest will be paid based on a principal value, which is adjusted for inflation. Any increase or decrease in the principal amount of an inflation-indexed bond will be included as interest income on the Statement of Operations, even though investors do not receive their principal until maturity.

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

Payment In-Kind Securities. Certain Funds may invest in payment in-kind securities. Payment in-kind securities (PIKs) give the issuer the option at each interest payment date of making interest payments in either cash or additional debt securities. Those additional debt securities usually have the same terms, including maturity dates and interest rates, and associated risks as the original bonds. The daily market quotations of the original bonds may include the accrued interest (referred to as a dirty price) and require a pro-rata adjustment from the unrealized appreciation or depreciation on investments to interest receivable on the Statement of Assets and Liabilities.

Securities on a When-Issued or Delayed Delivery Basis. Certain Funds may purchase securities on a “when-issued” basis, and may purchase or sell securities on a “delayed delivery” basis. “When-issued” or “delayed delivery” refers to securities whose terms and indenture are available and for which a market exists, but which are not available for immediate delivery. Delivery and payment for securities that have been purchased by a Fund on a when-issued basis normally take place within six months and possibly as long as two years or more after the trade date. During this period, such securities do not earn interest, are subject to market fluctuation and may increase or decrease in value prior to their delivery. The purchase of securities on a when-issued basis may increase the volatility of a Fund’s net asset value to the extent the Fund executes such transactions while remaining substantially fully invested. When a Fund engages in when-issued or delayed delivery transactions, it relies on the buyer or seller, as the case may be, to complete the transaction. Their failure to do so may cause the Fund to lose the opportunity to obtain or dispose of the security at a price and yield IICO, or the Fund’s investment subadviser, as applicable, consider advantageous.

The Fund maintains internally designated assets with a market value equal to or greater than the amount of its purchase commitments. The Fund may also sell securities that it purchased on a when-issued or delayed delivery basis prior to settlement of the original purchase.

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

Certain senior loans contain provisions that obligate a Fund to fund future commitments at the borrower’s discretion. See Note 10 in the Notes to the Financial Statements for more information regarding commitments.

2012 SEMIANNUAL REPORT 61

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

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

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

New Accounting Pronouncements. In December 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) to enhance disclosures requiring improved information about financial instruments and derivative instruments that are subject to offsetting (“netting”) on the Statements of Assets and Liabilities. This information will enable users of the entity’s financial statements to evaluate the effect or potential effect of netting arrangements on the entity’s financial position. The ASU is effective prospectively during interim or annual periods beginning on or after January 1, 2013. At this time, management is evaluating the implications of these changes on the financial statements.

Estimates. 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.

Subsequent Events. Management has performed a review for subsequent events through the date this report was issued.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Each Fund’s investments are reported at fair value. Fair value is defined as the price that each Fund would receive upon selling an asset or would pay upon satisfying a liability in an orderly transaction between market participants at the measurement date. Each Fund calculates the net asset value of its shares as of the close of the NYSE, normally 4:00 P.M. Eastern time, on each day the NYSE is open for trading.

Equity securities traded on U.S. or foreign securities exchanges or included in a national market system are valued at the official closing price at the close of each business day unless otherwise stated below. Over-the-counter (OTC) equity securities and listed securities for which no price is readily available are valued at the average of the last bid and asked prices.

Security prices for fixed-income securities are typically based on quotes that are obtained from an independent pricing service authorized by the Board. To determine values of fixed-income securities, the independent pricing service utilizes such factors as current quotations by broker/dealers, coupon, maturity, quality, type of issue, trading characteristics, and other yield and risk factors it deems relevant in determining valuations. Securities that cannot be valued by the independent pricing service may be valued using quotes obtained from dealers that make markets in the securities.

Precious metals are valued at the last traded spot price prior to the close of the NYSE.

Listed options are ordinarily valued at the mean of the last bid and ask price provided by an independent pricing service unless the price is unavailable, in which case they are valued at a quotation obtained from a broker-dealer. OTC options are ordinarily valued at the mean of the last bid and ask price provided by an independent pricing service for a comparable listed option unless such a price is unavailable, in which case they are valued at a quotation obtained from a broker-dealer. If no comparable listed option exists from which to obtain a price from an independent pricing service and a quotation cannot be obtained from a broker-dealer, the OTC option will be valued using a model reasonably designed to provide a current market price. Swaps are valued by an independent pricing service unless the price is unavailable, in which case they are valued at the price provided by a dealer in that security. Futures contracts traded on an exchange are generally valued at the settlement price. Mutual funds, including investment funds, typically are valued at the net asset value reported as of the valuation date.

Forward foreign currency contracts are valued based upon the closing prices of the forward currency rates determined at the close of the NYSE.

Senior loans are valued using a price or composite price from one or more brokers or dealers as obtained from an independent pricing service.

Short-term securities with maturities of 60 days or less are valued on the basis of amortized cost (which approximates market value), whereby a portfolio security is valued at its cost initially, and thereafter valued to reflect a constant amortization to maturity of any discount or premium.

Because many foreign markets close before the NYSE, events may occur between the close of the foreign market and the close of the NYSE that could have a material impact on the valuation of foreign securities. IICO, pursuant to procedures adopted by the Board, evaluates the impact of these events and may adjust the valuation of foreign securities to reflect the fair value as of the close of the NYSE. In addition, all securities for which market values are not readily available or are deemed unreliable are appraised at fair value as determined in good faith under the supervision of the Board.

62 SEMIANNUAL REPORT 2012

Accounting standards establish a framework for measuring fair value and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the factors that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

An individual investment’s fair value measurement is assigned a level based upon the observability of the inputs which are significant to the overall valuation.

The three-tier hierarchy of inputs is summarized as follows:

• Level 1 – Observable input such as quoted prices, available in active markets, for identical assets or liabilities.

• Level 2 – Significant other observable inputs, which may include, but are not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs.

• Level 3 – Significant unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available, which may include assumptions made by the Board or persons acting at their direction that are used in determining the fair market value of investments.

A description of the valuation techniques applied to the Funds’ major classes of assets and liabilities measured at fair value on a recurring basis follows:

Asset-Backed Securities and Mortgage-Backed Securities. The fair value of asset-backed securities and mortgage- backed securities are estimated using recently executed transactions and based on models that consider the estimated cash flows of each debt tranche of the issuer, establish a benchmark yield, and develop an estimated tranche specific spread to the benchmark yield based on the unique attributes of the tranche including, but not limited to, the prepayment speed assumptions and attributes of the collateral. To the extent the inputs are observable and timely, the values would be categorized in Level 2 of the fair value hierarchy, otherwise they would be categorized as Level 3.

Bank Loans. The fair value of bank loans is estimated using recently executed transactions, market price quotations, credit/market events, and cross-asset pricing. Inputs are generally observable market inputs obtained from independent sources. Bank loans are generally categorized in Level 2 of the fair value hierarchy, unless key inputs are unobservable in which case they would then be in Level 3.

Bullion. The fair value of bullion is at the last settlement price at the end of each day on the board of trade or exchange upon which they are traded and are categorized in Level 1 of the fair value hierarchy.

Corporate Bonds. The fair value of corporate bonds is estimated using various techniques, which consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, fundamental data relating to the issuer, and credit default swap spreads adjusted for any basis difference between cash and derivative instruments. While most corporate bonds are categorized in Level 2 of the fair value hierarchy, in instances where lower relative weight is placed on transaction prices, quotations, or similar observable inputs, they are categorized in Level 3 of the fair value hierarchy.

Derivative Instruments. Listed derivatives that are actively traded are valued based on quoted prices from the exchange and are categorized in Level 1 of the fair value hierarchy. OTC derivative contracts include forward foreign currency contracts, swap agreements, and option contracts related to interest rates, foreign currencies, credit standing of reference entities, equity prices, or commodity prices. Depending on the product and the terms of the transaction, the fair value of the OTC derivative products are modeled taking into account the counterparties’ creditworthiness and using a series of techniques, including simulation models. Many pricing models do not entail material subjectivity because the methodologies employed do not necessitate significant judgments and the pricing inputs are observed from actively quoted markets, as is the case with interest rate swap and option contracts. A substantial majority of OTC derivative products valued by the Funds using pricing models fall into this category and are categorized within Level 2 of the fair value hierarchy.

Equity Securities. Securities are stated at the last reported sales price or closing price on the day of valuation taken from the primary exchange where the security is principally traded. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy.

Foreign securities, for which the primary trading market closes at the same time or after the NYSE, are valued based on quotations from the primary market in which they are traded and categorized in Level 1. Because many foreign securities markets and exchanges close prior to the close of the NYSE, closing prices for foreign securities in those markets or on those exchanges do not reflect the events that occur after that close. Certain foreign securities may be fair valued using a pricing service that considers the correlation of the trading patterns of the foreign security to the intra-day trading in the U.S. markets for investments such as American Depositary Receipts, financial futures, Exchange Traded Funds, and the movement of the certain indices of securities based on a statistical analysis of their historical relationship; such valuations generally are categorized in Level 2.

Preferred stock, repurchase agreements, and other equities traded on inactive markets or valued by reference to similar instruments are also generally categorized in Level 2.

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Municipal Bonds. Municipal bonds are fair valued based on pricing models that take into account, among other factors, information received from market makers and broker-dealers, current trades, bid-wants lists, offerings, market movements, the callability of the bond, state of issuance, benchmark yield curves, and bond insurance. To the extent that these inputs are observable and timely, the fair values of municipal bonds would be categorized as Level 2; otherwise the fair values would be categorized as Level 3.

Restricted Securities. Restricted securities that are deemed to be both Rule 144A securities and illiquid, as well as restricted securities held in non-public entities are included in Level 3 of the fair value hierarchy because they trade infrequently, and, therefore, the inputs are unobservable. Restricted securities that are valued at a discount to similar publicly traded securities and may be categorized as Level 2 of the fair value hierarchy to the extent that the discount is considered to be insignificant to the fair value measurement in its entirety; otherwise they may be categorized as Level 3.

U.S. Government and Agency Securities. U.S. government and agency securities are normally valued using a model that incorporates market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers, quoted market prices, and reference data. Accordingly, U.S. government and agency securities are normally categorized in Level 1 or 2 of the fair value hierarchy depending on the liquidity and transparency of the market.

Transfers from Level 2 to Level 3 occurred generally due to the lack of observable market data due to decreased market activity or information for these securities. Transfers from Level 3 to Level 2 occurred generally due to the increased availability of observable market data due to increased market activity or information. Transfers in and out of Level 3 represent the value at the later of the beginning of the period or the purchase date of the security.

There were no transfers between Levels 1, 2, or 3 during the period ended September 30, 2012.

Securities and other assets for which market quotes are not readily available are valued at fair value as determined in good faith by the Board or persons acting at their direction and are categorized as Level 3 of the fair value hierarchy.

Market quotes are considered not readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade information or broker quotes), including where events occur after the close of the relevant market, but prior to the NYSE Close, that materially affect the values of a Fund’s securities or assets. In addition, market quotes are considered not readily available when, due to extraordinary circumstances, the exchanges or markets on which the securities trades do not open for trading for the entire day and no other market prices are available. The Board has delegated to the investment manager, WRIMCO, the responsibility for monitoring significant events that may materially affect the values of a Fund’s securities or assets and for determining whether the value of the applicable securities or assets should be re-evaluated in light of such significant events. The Board has adopted methods for valuing securities and other assets in circumstances where market quotes are not readily available, and has delegated the responsibility for applying the valuation methods to WRIMCO. For instances in which daily market quotes are not readily available, investments may be valued, pursuant to guidelines established by the Board, with reference to other securities or indices. In the event that the security or asset cannot be valued pursuant to one of the valuation methods established by the Board, the value of the security or asset will be determined in good faith by the Valuation Committee of the Board, generally based upon recommendations provided by IICO. When a Fund uses these fair valuation methods applied by IICO that use significant unobservable inputs to determine its NAV, securities will be priced by a method that the Board or persons acting at their direction believe accurately reflects fair value and are categorized as Level 3 of the fair value hierarchy. These methods may require subjective determinations about the value of a security. While the Trust’s policy is intended to result in a calculation of a Fund’s NAV that fairly reflects security values as of the time of pricing, the Trust cannot guarantee that values determined by the Board or persons acting at their direction would accurately reflect the price that a Fund could obtain for a security if it were to dispose of that security as of the time of pricing (for instance, in a forced or distressed sale). The prices used by a Fund may differ from the value that would be realized if the securities were sold.

For fair valuations using unobservable inputs, U.S. GAAP requires a reconciliation of the beginning to ending balances for reported fair values that presents changes attributable to total realized and unrealized gains or losses, purchases and sales, and transfers in or out of the Level 3 category during the period. The end of period timing recognition is used for the transfers between Levels of the Funds’ assets and liabilities. In accordance with the requirements of U.S. GAAP, a fair value hierarchy and Level 3 reconciliation, if any, have been included in the Notes to the Schedule of Investments for each respective Fund.

Net realized gain (loss) and net unrealized appreciation (depreciation), shown on the reconciliation of Level 3 investments if applicable, are included on the Statement of Operations in net realized gain (loss) on investments in unaffiliated securities and in net change in unrealized appreciation (depreciation) on investments in unaffiliated securities, respectively. Additionally, the net change in unrealized appreciation for all Level 3 investments still held as of September 30, 2012, if applicable, is included on the Statement of Operations in net change in unrealized appreciation (depreciation) on investments in unaffiliated securities.

The Funds may own different types of assets that are classified as Level 2 or Level 3. Assets classified as Level 2 can have a variety of observable inputs, including, but not limited to, benchmark yields, reported trades, broker quotes, benchmark securities, and bid/offer quotations. These observable inputs are collected and utilized, primarily by an independent pricing service, in different evaluated pricing approaches depending upon the specific asset to determine a value.

3. DERIVATIVE INSTRUMENTS ($ amounts in thousands unless indicated otherwise)

The following disclosures contain information on why and how the Funds use derivative instruments, the associated risks of investing in derivative instruments, and how derivative instruments affect the Funds’ financial position and results of operations when presented by primary underlying risk exposure. Please see the prospectus for a full discussion of risks of investing in derivative instruments.

64 SEMIANNUAL REPORT 2012

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

Risks to a Fund related to the use of such contracts include both market and credit risk. Market risk is the risk that the value of the forward contract will depreciate due to unfavorable changes in the exchange rates. Credit risk arises from the possibility that the counterparty will default. If the counterparty defaults, a Fund’s maximum loss will consist of the aggregate unrealized gain on appreciated contracts that is not collateralized.

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

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

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

Option Contracts. 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 a 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. When an option expires on its stipulated expiration date or a 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 a Fund has realized a gain or loss. For each Fund, when a written put is exercised, the cost basis of the securities purchased by a Fund is reduced by the amount of the premium received.

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

Swap Agreements. Certain Funds may invest in swap agreements.

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

The creditworthiness of firms with which a Fund enters into a swap agreement is monitored by IICO. If a firm’s creditworthiness declines, the value of the agreement would likely decline, potentially resulting in losses. If a default occurs by the counterparty to such a transaction, the Fund will have contractual remedies pursuant to the agreement related to the transaction. The maximum loss a Fund may incur consists of the aggregate unrealized gain on appreciated contracts that is not collateralized.

Collateral. A Fund may mitigate credit risk through Credit Support Annexes (“CSA”) included with an International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreement, which is the standard contract governing most derivative transactions between the Fund and each of its counterparties. The CSA allows the Fund and its counterparty to offset certain derivative financial instruments’ payables and/or receivables with collateral, which is generally held by the Fund’s custodian. The amount of collateral moved to/from applicable counterparties is based upon minimum transfer amounts specified in the CSA. To the extent amounts due to the Fund from its counterparties are not fully collateralized contractually or otherwise, the Fund bears the risk of loss from counterparty non-performance. See Note 2 “Segregation and Collateralization” for additional information with respect to collateral practices.

2012 SEMIANNUAL REPORT 65

Additional Disclosure Related to Derivative Instruments

Fair values of derivative instruments as of September 30, 2012:

		Assets			Liabilities
Fund	Type of Risk Exposure	Statement of Assets & Liabilities Location	Value		Statement of Assets & Liabilities Location	Value
Ivy Asset Strategy Fund	Equity	Investments in unaffiliated securities at market value*		$21,925	Written options at market value		$33,831
	Foreign currency	Investments in unaffiliated securities at market value*		502	Written options at market value		39,807
		Unrealized appreciation on forward foreign currency contracts		5,397
Ivy Asset Strategy New Opportunities Fund	Foreign currency				Unrealized depreciation on forward foreign currency contracts		39
Ivy Global Natural Resources Fund	Commodity	Investments in unaffiliated securities at market value*		7,493
	Equity	Investments in unaffiliated securities at market value*		173,638	Unrealized depreciation on futures contracts**		1,234
	Foreign currency	Unrealized appreciation on forward foreign currency contracts		1,258	Unrealized depreciation on forward foreign currency contracts		7,544
Ivy Real Estate Securities Fund	Equity				Written options at market value		65
Ivy Science and Technology Fund	Equity	Investments in unaffiliated securities at market value*		17	Written options at market value		1,041

* Purchased options are reported as investments in unaffiliated securities and are reflected in the accompanying Schedule of Investments.

** The fair value presented represents the cumulative unrealized appreciation (depreciation) on open futures contracts; however, the value reflected in the accompanying Statement of Assets and Liabilities is only the unsettled variation margin receivable (payable) as of September 30, 2012.

Amount of realized gain (loss) on derivatives shown in the Statement of Operations for the period ended September 30, 2012:

		Net realized gain (loss) on:
Fund	Type of Risk Exposure	Investments in unaffiliated securities*			Swap agreements		Futures contracts			Written options			Forward foreign currency contracts		Total
Ivy Asset Strategy Fund	Equity	$	(380,013	)	$	2,223	$	—		$	141,015		$	—	$	(236,775	)
	Foreign currency		(28,356	)		—		—			10,477			56,960		39,081
Ivy Asset Strategy New Opportunities Fund	Equity		1,239			—		—			(52	)		—		1,187
Ivy Global Natural Resources Fund	Equity		(120,098	)		—		(2,636	)		—			—		(122,734	)
	Foreign currency		—			—		—			—			2,413		2,413
Ivy Real Estate Securities Fund	Equity		—			—		—			213			—		213
Ivy Science and Technology Fund	Equity		607			—		—			619			—		1,226

* Purchased options are reported as investments in unaffiliated securities and are reflected in the accompanying Schedule of Investments.

Change in unrealized appreciation (depreciation) on derivatives shown in the Statement of Operations for the period ended September 30, 2012:

			Net change in unrealized appreciation (depreciation) on:
Fund	Type of Risk Exposure		Investments in unaffiliated securities*			Swap agreements		Futures contracts		Written options			Forward foreign currency contracts			Total
Ivy Asset Strategy Fund		Equity	$	87,979		$	382	$	—	$	(39,168	)	$	—		$	49,193
		Foreign currency		(3,075	)		—		—		(30,160	)		(5,637	)		(38,872	)
Ivy Asset Strategy New Opportunities Fund		Equity		(10	)		—		—		(25	)		—			(35	)
		Foreign currency		—			—		—		—			(39	)		(39	)
Ivy Global Natural Resources Fund		Commodity		1,305			—		—		—			—			1,305
		Equity		83,387			—		14,250		—			—			97,637
		Foreign currency		—			—		—		—			(3,058	)		(3,058	)
Ivy Real Estate Securities Fund		Equity		—			—		—		123			—			123
Ivy Science and Technology Fund		Equity		(391	)		—		—		136			—			(255	)

* Purchased options are reported as investments in unaffiliated securities and are reflected in the accompanying Schedule of Investments.

66 SEMIANNUAL REPORT 2012

During the period ended September 30, 2012, the average derivative volume was as follows:

Fund	Long  forward contracts(1)		Short  forward contracts(1)		Short  futures contracts(1)		Swap agreements(2)		Purchased options(1)		Written options(1)
Ivy Asset Strategy Fund	$	1,318,145	$	1,304,704	$	—	$	790	$	108,462	$	48,347
Ivy Asset Strategy New Opportunities Fund		886		895		—		—		449		97
Ivy Global Natural Resources Fund		496,071		495,811		407,189		—		196,462		—
Ivy Real Estate Securities Fund		—		—		—		—		—		93
Ivy Science and Technology Fund		—		—		—		—		238		453

(1) Average market value outstanding during the period.

(2) Average notional amount outstanding during the period.

Objectives and Strategies

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

Ivy Asset Strategy New Opportunities Fund. The Fund’s objectives in using derivatives during the period included hedging market risk on equity securities and managing the exposure to various foreign currencies. To achieve the objective of hedging market risk, the Fund utilized option contracts, both written and purchased, on individual equity securities and foreign equity indices. To manage foreign currency exposure, the Fund utilized forward contracts to either increase or decrease exposure to a given currency.

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

Ivy Real Estate Securities Fund. The Fund’s objective in using derivatives during the period was to hedge market risk on securities in its portfolio. To achieve this objective, the Fund utilized written options on individual equity securities owned by the Fund.

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

4. WRITTEN OPTION ACTIVITY ($ amounts in thousands)

Transactions in written options were as follows:

Fund	Outstanding at 3-31-12		Options written		Options closed			Options exercised			Options expired			Outstanding at 9-30-12
Ivy Asset Strategy Fund
Number of Contracts		176,466		658,340		(333,743	)		(92,169	)		(197,909	)		210,985
Premium Received	$	65,219	$	197,024	$	(96,446	)	$	(7,286	)	$	(113,116	)	$	45,395
Ivy Asset Strategy New Opportunities Fund
Number of Contracts		4,760		2,975		(7,735	)		—			—			—
Premium Received	$	211	$	144	$	(355	)	$	—		$	—		$	—
Ivy Real Estate Securities Fund
Number of Contracts		1,950		1,809		(863	)		(822	)		(1,057	)		1,017
Premium Received	$	311	$	220	$	(83	)	$	(173	)	$	(135	)	$	140
Ivy Science and Technology Fund
Number of Contracts		470		13,793		(9,456	)		—			—			4,807
Premium Received	$	611	$	3,297	$	(2,631	)	$	—		$	—		$	1,277

2012 SEMIANNUAL REPORT 67

5. INVESTMENT MANAGEMENT AND PAYMENTS TO AFFILIATED PERSONS ($ amounts in thousands unless indicated otherwise)

Management Fees. IICO, a wholly owned subsidiary of Waddell & Reed Financial, Inc. (WDR), serves as each Fund’s investment manager. The management fee is accrued daily by each Fund at the following annual rates as a percentage of average daily net assets:

Fund (M - Millions)	$0 to $500M			$500 to $1,000M			$1,000 to $2,000M			$2,000 to $3,000M			Over $3,000M
Ivy Asset Strategy Fund		0.700	%		0.700	%		0.650	%		0.600	%		0.550	%
Ivy Asset Strategy New Opportunities Fund		1.000			0.850			0.830			0.800			0.760
Ivy Balanced Fund		0.700			0.700			0.650			0.600			0.550
Ivy Energy Fund		0.850			0.850			0.830			0.800			0.760
Ivy Global Natural Resources Fund		1.000			0.850			0.830			0.800			0.760
Ivy Real Estate Securities Fund		0.900			0.900			0.870			0.840			0.800
Ivy Science and Technology Fund		0.850			0.850			0.830			0.800			0.760

For Funds managed solely by IICO, 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. See Expense Reimbursements and/or Waivers below for amounts waived during the period ended September 30, 2012.

IICO has entered into Subadvisery Agreements with the following entities on behalf of certain Funds:

Under an agreement between IICO and Mackenzie Financial Corporation (Mackenzie), Mackenzie serves as subadviser to Ivy Global Natural Resources Fund. Under an agreement between IICO and Advantus Capital Management, Inc. (Advantus), Advantus serves as subadviser to Ivy Real Estate Securities Fund. Each subadviser makes investment decisions in accordance with the Fund’s investment objectives, policies and restrictions under the supervision of IICO and the oversight of the Board. IICO pays all costs applicable of the subadvisers.

Accounting Services Fees. The Trust has an Accounting Services Agreement with Waddell & Reed Services Company, doing business as WI Services Company (WISC), an indirect subsidiary of WDR. Under the agreement, WISC acts as the agent in providing bookkeeping and accounting services and assistance to the Trust, including maintenance of Fund records, pricing of Fund shares and preparation of certain shareholder reports. For these services, each Fund pays WISC a monthly fee of one-twelfth of the annual fee based on the average net asset levels shown in the following table:

(M - Millions)	$0 to $10M		$10 to $25M		$25 to $50M		$50 to $100M		$100 to $200M		$200 to $350M		$350 to $550M		$550 to $750M		$750 to $1,000M		Over $1,000M
Annual Fee Rate	$	0.00	$	11.50	$	23.10	$	35.50	$	48.40	$	63.20	$	82.50	$	96.30	$	121.60	$	148.50

In addition, for each class of shares in excess of one, each Fund pays WISC a monthly per-class fee equal to 2.5% of the monthly accounting services base fee.

Administrative Fee. Each Fund also pays WISC a monthly fee at the annual rate of 0.01%, or one basis point, for the first $1 billion of net assets with no fee charged for net assets in excess of $1 billion. This fee is voluntarily waived by WISC until a Fund’s net assets are at least $10 million and is included in “Accounting services fee” on the Statement of Operations.

Shareholder Servicing. General. Under the Shareholder Servicing Agreement between the Trust and WISC, with respect to Class A, Class B, Class C and Class E shares, for each shareholder account that was in existence at any time during the prior month, each Fund pays a monthly fee that ranges from $1.5042 to $1.6958 per account; however, WISC has agreed to reduce that fee if the number of total shareholder accounts within the Complex (Waddell & Reed Advisors Funds, InvestEd Portfolios and Ivy Funds) reaches certain levels. Effective June 6, 2011 for Class R shares, each Fund pays a monthly fee equal to one-twelfth of 0.25 of 1% of the average daily net assets of the class for the preceding month. Prior to June 6, 2011 the fee was 0.20 of 1%. For Class I and 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 WISC for certain out-of-pocket costs for all classes.

Networked accounts. For certain networked accounts (that is, those accounts whose Fund shares are purchased through certain financial intermediaries), WISC has agreed to reduce its per account fees charged to the Funds to $0.50 per month per shareholder account. Additional fees may be paid by the Funds to those intermediaries. If the aggregate annual rate of the WISC transfer agent fee and the costs charged by the financial services companies exceeds $18.00 per account for a Fund, WISC will reimburse the Fund the amount in excess of $18.00.

Broker accounts. Certain broker-dealers that maintain shareholder accounts with each Fund through an omnibus account provide transfer agent and other shareholder-related services that would otherwise be provided by WISC if the individual accounts that comprise the omnibus account were opened by their beneficial owners directly. Each Fund may pay such broker-dealers a per account fee for each open account within the omnibus account, or a fixed rate fee, based on the average daily net asset value of the omnibus account (or a combination thereof).

Distribution and Service Plan. Class A and Class E Shares. Under a Distribution and Service Plan adopted by the Trust pursuant to Rule 12b–1 under the 1940 Act (the Distribution and Service Plan), each Fund may pay a distribution and/or service fee to Ivy Funds Distributors, Inc. (IFDI) for Class A and Class E shares 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 and Class E shares and/or provision of personal services to Fund shareholders and/or maintenance of shareholder accounts of that class.

68 SEMIANNUAL REPORT 2012

Class B and Class C Shares. Under the Distribution and Service Plan, each Fund may pay IFDI a service fee not to exceed 0.25% and a distribution fee not to exceed 0.75% of the Fund’s average annual net assets for Class B and Class C shares to compensate IFDI for its services in connection with the distribution of shares of that class and/or provision of personal services to Class B or Class C shareholders and/or maintenance of shareholder accounts of that class.

Class R Shares. Under the Distribution and Service Plan, each Fund may pay IFDI a fee of up to 0.50%, on an annual basis, of the average daily net assets of the Fund’s Class R shares to compensate IFDI for, either directly or through third parties, distributing the Class R shares of that Fund, providing personal services to Class R shareholders and/or maintaining Class R shareholder accounts.

Class Y Shares. Under the Distribution and Service 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 services to Class Y shareholders and/or maintaining Class Y shareholder accounts.

Sales Charges. As principal underwriter for the Trust’s shares, IFDI receives sales commissions (which are not an expense of the Trust) for sales of Class A and Class E shares. A CDSC may be assessed against a shareholder’s redemption amount of Class B, Class C or certain Class A and Class E shares and is paid to IFDI. During the period ended September 30, 2012, IFDI received the following amounts in sales commissions and CDSCs:

	Gross Sales Commissions		CDSC										Commissions Paid(1)
			Class A			Class B		Class C			Class E
Ivy Asset Strategy Fund	$	1,530	$	11		$	762	$	352		$	—	$	5,505
Ivy Asset Strategy New Opportunities Fund		96		—	*		13		7			—		124
Ivy Balanced Fund		309		—			30		12			—		718
Ivy Energy Fund		34		—	*		4		—	*		—		44
Ivy Global Natural Resources Fund		530		3			93		23			—		612
Ivy Real Estate Securities Fund		175		1			4		—	*		—		190
Ivy Science and Technology Fund		191		3			30		7			—		351

* Not shown due to rounding.

(1) IFDI reallowed/paid this portion of the sales charge to financial advisors and selling broker-dealers.

Expense Reimbursements and/or Waivers. Fund and class expense limitations and related waivers/reimbursements for the period ended September 30, 2012 were as follows:

Fund Name	Share Class Name	Type of Expense Limit	Commencement Date	End Date	Expense Limit	Amount of Expense Waiver/ Reimbursement			Expense Reduced
Ivy Asset Strategy Fund	Class E	Contractual	8-1-2008	7-31-2013	1.00%	$	56		12b-1 Fees and/or Shareholder Servicing
	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	80		12b-1 Fees and/or Shareholder Servicing
Ivy Asset Strategy New Opportunities Fund	Class A	Contractual	5-3-2010	7-31-2013	1.50%	$	237		12b-1 Fees and/or Shareholder Servicing
	Class E	Contractual	5-3-2010	7-31-2013	1.50%	$	—	*	12b-1 Fees and/or Shareholder Servicing
	Class I	Contractual	5-3-2010	7-31-2013	1.25%	$	23		Shareholder Servicing
	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	3		12b-1 Fees and/or Shareholder Servicing
Ivy Balanced Fund	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	—		N/A
Ivy Energy Fund	Class A	Contractual	8-1-2008	7-31-2013	1.60%	$	38		12b-1 Fees and/or Shareholder Servicing
	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	—		N/A

2012 SEMIANNUAL REPORT 69

Fund Name	Share Class Name	Type of Expense Limit	Commencement Date	End Date	Expense Limit	Amount of Expense Waiver/ Reimbursement			Expense Reduced
Ivy Global Natural Resources Fund	All Classes	Contractual	8-1-2008	7-31-2013	N/A	$	48	(1)	Investment Management Fee
	Class E	Contractual	8-1-2008	7-31-2013	1.27%	$	32		12b-1 Fees and/or Shareholder Servicing
	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	68		12b-1 Fees and/or Shareholder Servicing
Ivy Real Estate Securities Fund	Class E	Contractual	8-1-2008	7-31-2013	1.67%	$	4		12b-1 Fees and/or Shareholder Servicing
	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	—		N/A
Ivy Science and Technology Fund	Class E	Contractual	8-1-2008	7-31-2013	1.43%		$18		12b-1 Fees and/or Shareholder Servicing
	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A		$—		N/A

* Not shown due to rounding.

(1) Due to Class E contractual expense limits, investment management fees were waived for all share classes.

Any amounts due to the Funds as a reimbursement but not paid as of September 30, 2012 are shown as a receivable from affiliates on the Statement of Assets and Liabilities.

6. AFFILIATED COMPANY TRANSACTIONS (All amounts in thousands)

A summary of the transactions in affiliated companies during the period ended September 30, 2012 follows:

	3-31-12 Share Balance		Purchases at Cost		Sales at Cost		Realized Gain/(Loss)			Distributions Received		9-30-12 Share Balance		9-30-12 Market Value
Ivy Asset Strategy Fund
Wynn Resorts, Limited		12,095	$	—	$	151,357	$	60,482		$	12,037		10,049	$	1,160,027
	3-31-12 Share Balance		Purchases at Cost		Sales at Cost		Realized Gain/(Loss)			Distributions Received		9-30-12 Share Balance		9-30-12 Market Value
Ivy Global Natural Resources Fund
China Metal Recycling (Holdings) Limited(2)		62,084	$	—	$	23,603	$	(10,365	)	$	2,475		45,000	$	41,727
Sino-Forest Corporation, Class A(1)		15,000		—		—		—			—		15,000		—	*
Trina Solar Limited, ADR(1)(2)		4,500		—		57,428		(44,141	)		—		2,250		10,305
							$	(54,506	)	$	2,475			$	52,032
	3-31-12 Share Balance		Purchases at Cost		Sales at Cost		Realized Gain/(Loss)			Distributions Received		9-30-12 Share Balance		9-30-12 Market Value
Ivy Science and Technology Fund
Aspen Technology, Inc.(1)		5,153	$	—	$	2,211	$	1,094		$	—		5,011	$	129,528

* Not shown due to rounding.

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

(2) Company was no longer an affiliate at September 30, 2012.

7. INVESTMENT SECURITIES TRANSACTIONS ($ amounts in thousands)

The cost of purchases and the proceeds from maturities and sales of investment securities (excluding short-term securities) for the period ended September 30, 2012, were as follows:

	Purchases				Sales
	U.S. Government		Other Issuers		U.S. Government		Other Issuers
Ivy Asset Strategy Fund	$	—	$	4,141,451	$	480	$	4,959,667
Ivy Asset Strategy New Opportunities Fund		—		22,639		—		60,482
Ivy Balanced Fund		—		174,939		162		83,165
Ivy Energy Fund		—		18,932		—		25,428
Ivy Global Natural Resources Fund		—		1,014,383		—		1,675,318
Ivy Real Estate Securities Fund		—		113,426		—		92,768
Ivy Science and Technology Fund		—		258,544		—		272,623

70 SEMIANNUAL REPORT 2012

8. CAPITAL SHARE TRANSACTIONS (All amounts in thousands)

The Trust has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class of each Fund. On April 1, 2010, all Advisor Class shares were converted to Class I. Transactions in shares of beneficial interest were as follows:

	Ivy Asset Strategy Fund												Ivy Asset Strategy New Opportunities Fund
	Six months ended 9-30-12						Year ended 3-31-12						Six months ended 9-30-12						Year ended 3-31-12
	Shares			Value			Shares			Value			Shares			Value			Shares			Value
Shares issued from sale of shares:
Class A		27,075		$	660,788			93,660		$	2,314,755			2,040		$	20,675			12,611		$	145,922
Class B		1,605			37,781			4,928			117,415			36			357			272			3,119
Class C		16,287			385,437			56,395			1,351,595			331			3,312			2,917			34,069
Class E		174			4,245			435			10,637			—			—			—			—	*
Class I		45,612			1,119,382			145,105			3,566,443			677			6,820			5,971			69,544
Class R		768			18,653			2,394			58,619			1			6			13			154
Class Y		5,859			142,575			17,337			427,821			69			685			917			10,789
Shares issued in reinvestment of distributions to shareholders:
Class A		—			—			3,679			83,668			—			—			—			—
Class B		—			—			97			2,138			—			—			—			—
Class C		—			—			1,259			27,832			—			—			—			—
Class E		—			—			23			528			—			—			—			—
Class I		—			—			2,661			60,981			—			—			8			80
Class R		—			—			27			603			—			—			—			—
Class Y		—			—			509			11,604			—			—			—			—
Shares redeemed:
Class A		(47,972	)		(1,164,031	)		(139,518	)		(3,349,318	)		(4,719	)		(46,780	)		(12,205	)		(132,586	)
Class B		(2,313	)		(54,232	)		(4,088	)		(95,869	)		(112	)		(1,099	)		(143	)		(1,546	)
Class C		(34,661	)		(815,905	)		(75,541	)		(1,771,497	)		(1,726	)		(16,898	)		(2,759	)		(29,080	)
Class E		(153	)		(3,738	)		(217	)		(5,300	)		—			—			—			—
Class I		(44,106	)		(1,082,301	)		(101,551	)		(2,451,387	)		(2,452	)		(24,480	)		(7,090	)		(76,177	)
Class R		(534	)		(12,930	)		(1,060	)		(25,794	)		(1	)		(8	)		(13	)		(136	)
Class Y		(6,930	)		(168,775	)		(17,908	)		(432,782	)		(315	)		(3,150	)		(1,197	)		(12,458	)
Net increase (decrease)		(39,289	)	$	(933,051	)		(11,374	)	$	(97,308	)		(6,171	)	$	(60,560	)		(698	)	$	11,694
	Ivy Balanced Fund												Ivy Energy Fund
	Six months ended 9-30-12						Year ended 3-31-12						Six months ended 9-30-12						Year ended 3-31-12
	Shares			Value			Shares			Value			Shares			Value			Shares			Value
Shares issued from sale of shares:
Class A		3,871		$	76,608			6,635		$	123,209			1,030		$	12,097			2,626		$	34,031
Class B		525			10,338			702			13,126			41			465			127			1,612
Class C		2,481			49,054			4,003			74,274			115			1,304			479			5,964
Class E		7			134			—			—			10			123			—			—
Class I		864			17,160			1,846			34,263			248			3,099			255			3,370
Class Y		1,133			22,324			1,762			33,116			234			2,849			256			3,374
Shares issued in reinvestment of distributions to shareholders:
Class A		30			587			110			2,026			—			—			—			—
Class B		—	*		2			6			102			—			—			—			—
Class C		1			24			28			518			—			—			—			—
Class E		—			—			—			—			—			—			—			—
Class I		4			87			9			161			—			—			—			—
Class Y		9			187			46			849			—			—			—			—
Shares redeemed:
Class A		(1,017	)		(20,103	)		(2,478	)		(46,326	)		(1,523	)		(18,053	)		(2,654	)		(34,193	)
Class B		(122	)		(2,402	)		(130	)		(2,419	)		(33	)		(363	)		(149	)		(1,842	)
Class C		(509	)		(10,024	)		(1,218	)		(22,556	)		(270	)		(3,042	)		(516	)		(6,363	)
Class E		(7	)		(131	)		—			—			(10	)		(115	)		—			—
Class I		(262	)		(5,110	)		(876	)		(16,472	)		(153	)		(1,809	)		(510	)		(6,356	)
Class Y		(552	)		(10,961	)		(846	)		(15,827	)		(156	)		(1,868	)		(331	)		(4,406	)
Net increase (decrease)		6,456		$	127,774			9,599		$	178,044			(467	)	$	(5,313	)		(417	)	$	(4,809	)

2012 SEMIANNUAL REPORT 71

	Ivy Global Natural Resources Fund												Ivy Real Estate Securities Fund
	Six months ended 9-30-12						Year ended 3-31-12						Six months ended 9-30-12						Year ended 3-31-12
	Shares			Value			Shares			Value			Shares			Value			Shares			Value
Shares issued from sale of shares:
Class A		7,508		$	122,164			21,566		$	425,284			1,949		$	42,467			3,679		$	71,264
Class B		142			2,046			510			9,151			48			1,023			73			1,401
Class C		863			12,086			3,977			70,673			117			2,512			180			3,457
Class E		29			480			78			1,557			10			212			11			222
Class I		5,643			97,264			40,284			816,076			77			1,714			104			2,028
Class R		456			7,317			1,299			25,380			21			463			48			928
Class Y		2,561			42,486			8,940			180,726			616			13,538			979			19,184
Shares issued in reinvestment of distributions to shareholders:
Class A		—			—			—			—			28			603			40			760
Class B		—			—			—			—			—			—			—			—
Class C		—			—			—			—			—			—			—			—
Class E		—			—			—			—			—	*		3			—	*		4
Class I		—			—			—			—			1			19			2			28
Class R		—			—			—			—			—	*		2			—	*		3
Class Y		—			—			—			—			26			563			47			876
Shares redeemed:
Class A		(18,601	)		(302,608	)		(49,788	)		(979,217	)		(1,513	)		(32,853	)		(3,502	)		(67,568	)
Class B		(1,462	)		(21,239	)		(2,604	)		(45,108	)		(72	)		(1,522	)		(129	)		(2,452	)
Class C		(7,605	)		(106,405	)		(15,663	)		(260,835	)		(67	)		(1,423	)		(225	)		(4,247	)
Class E		(37	)		(608	)		(58	)		(1,135	)		(5	)		(117	)		(9	)		(168	)
Class I		(35,866	)		(609,276	)		(48,925	)		(931,345	)		(36	)		(798	)		(192	)		(3,645	)
Class R		(806	)		(12,997	)		(1,289	)		(25,052	)		(11	)		(244	)		(40	)		(778	)
Class Y		(11,228	)		(186,985	)		(14,231	)		(271,366	)		(452	)		(9,744	)		(1,742	)		(32,850	)
Net increase (decrease)		(58,403	)	$	(956,275	)		(55,904	)	$	(985,211	)		737		$	16,418			(676	)	$	(11,553	)
	Ivy Science and Technology Fund
	Six months ended 9-30-12						Year ended 3-31-12
	Shares			Value			Shares			Value
Shares issued from sale of shares:
Class A		2,782		$	91,732			5,821		$	185,883
Class B		134			3,899			255			7,346
Class C		563			16,835			1,518			44,797
Class E		31			1,028			39			1,254
Class I		1,477			51,505			3,477			118,318
Class R		352			11,463			548			17,422
Class Y		1,905			65,071			4,011			133,161
Shares issued in reinvestment of distributions to shareholders:
Class A		—			—			1,083			30,028
Class B		—			—			70			1,723
Class C		—			—			458			11,601
Class E		—			—			14			385
Class I		—			—			284			8,425
Class R		—			—			78			2,161
Class Y		—			—			771			22,342
Shares redeemed:
Class A		(2,387	)		(77,787	)		(6,713	)		(209,838	)
Class B		(114	)		(3,288	)		(231	)		(6,505	)
Class C		(671	)		(19,934	)		(1,915	)		(55,010	)
Class E		(15	)		(491	)		(28	)		(900	)
Class I		(1,127	)		(39,718	)		(3,446	)		(114,899	)
Class R		(258	)		(8,303	)		(380	)		(11,842	)
Class Y		(2,032	)		(69,419	)		(5,562	)		(181,219	)
Net increase		640		$	22,593			152		$	4,633

72 SEMIANNUAL REPORT 2012

9. FEDERAL INCOME TAX MATTERS ($ amounts in thousands)

For Federal income tax purposes, cost of investments owned at September 30, 2012 and the related unrealized appreciation (depreciation) were as follows:

Fund	Cost of Investments		Gross Appreciation		Gross Depreciation		Net Unrealized Appreciation (Depreciation)
Ivy Asset Strategy Fund	$	19,011,116	$	6,904,769	$	362,971	$	6,541,798
Ivy Asset Strategy New Opportunities Fund		297,112		44,437		35,721		8,716
Ivy Balanced Fund		506,939		90,758		367		90,391
Ivy Energy Fund		84,657		28,859		3,013		25,846
Ivy Global Natural Resources Fund		3,180,323		431,301		614,061		(182,760	)
Ivy Real Estate Securities Fund		361,127		121,314		590		120,724
Ivy Science and Technology Fund		1,127,641		435,012		46,958		388,054

For Federal income tax purposes, the Funds’ distributed and undistributed earnings and profit for the year ended March 31, 2012 and the post-October and late-year ordinary activity updated with information available through the date of this report were as follows:

Fund	Distributed Ordinary Income		Undistributed Ordinary Income		Distributed Long-Term Capital Gains		Undistributed Long-Term Capital Gains		Tax Return of Capital		Post- October Capital Losses Deferred		Late- Year Ordinary Losses Deferred
Ivy Asset Strategy Fund	$	253,777	$	309,352	$	—	$	—	$	—	$	565,120	$	—
Ivy Asset Strategy New Opportunities Fund		144		—		—		—		—		24,931		—
Ivy Balanced Fund		2,558		—		1,914		389		—		—		—
Ivy Energy Fund		—		—		—		—		—		—		213
Ivy Global Natural Resources Fund		—		6,680		—		—		—		—		8,093
Ivy Real Estate Securities Fund		1,690		629		—		—		—		—		—
Ivy Science and Technology Fund		1,602		—		84,689		4,987		—		—		3,560

Internal Revenue Code regulations permit each Fund to elect to defer into its next fiscal year capital losses incurred between each November 1 and the end of its fiscal year. Each Fund is also permitted to defer into its next fiscal year late-year ordinary losses that arise from the netting of activity generated between each November 1 and the end of its fiscal year on certain specified ordinary items along with the activity generated between each January 1 and the end of its fiscal year on all other non-specified ordinary items.

Accumulated capital losses represent net capital loss carryovers as of March 31, 2012 that may be available to offset future realized capital gains and thereby reduce future capital gains distributions. Under the Regulated Investment Company Modernization Act of 2010 (the “Modernization Act”), a Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. Any losses incurred during those future taxable years will be required to be utilized prior to any losses incurred in pre-enactment taxable years which have only an eight year carryforward period. As a result of this ordering rule, pre-enactment capital loss carryovers may expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under the previous law. The Fund’s first fiscal year end subject to the Modernization Act is March 31, 2012. The following table shows the expiration dates for capital loss carryovers from pre-enactment taxable years and the amounts of capital loss carryovers, if any, by each of the applicable Funds electing to be taxed as a RIC during the year ended March 31, 2012:

	Pre-Enactment														Post-Enactment
Fund	2013		2014		2015		2016		2017		2018		2019		Short-Term Capital Loss Carryover		Long-Term Capital Loss Carryover
Ivy Asset Strategy Fund	$	—	$	—	$	—	$	—	$	2,201,905	$	1,651,528	$	959,230	$	—	$	—
Ivy Asset Strategy New Opportunities Fund		—		—		—		—		—		—		606		38,502		—
Ivy Balanced Fund		—		—		—		—		—		—		—		—		—
Ivy Energy Fund		—		—		—		—		2,319		9,795		—		4,453		111
Ivy Global Natural Resources Fund		—		—		—		—		—		1,529,206		—		—		—
Ivy Real Estate Securities Fund		—		—		—		—		—		53,673		—		—		—
Ivy Science and Technology Fund		—		—		—		—		—		—		—		—		—

2012 SEMIANNUAL REPORT 73

RENEWAL OF INVESTMENT MANAGEMENT AGREEMENT

Ivy Funds

At a meeting of the Board of Trustees (the “Board”) of Ivy Funds (the “Trust”) held on August 14, 2012 (the “Meeting”), the trustees, including all of the trustees who are not “interested persons,” as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (“Independent Trustees”), unanimously approved the continuance of the Investment Management Agreement between Ivy Investment Management Company (“IICO”) and the Trust, on behalf of each of its series (each a “Fund,” and together, the “Funds”), and the continuance of the Investment Subadvisory Agreements between IICO and:

• Advantus Capital Management, Inc. (with respect to Ivy Bond Fund and Ivy Real Estate Securities Fund)

• Mackenzie Financial Corporation (with respect to Ivy Global Natural Resources Fund and Ivy Cundill Global Value Fund)

• Wall Street Associates (with respect to Ivy Micro Cap Growth Fund) (each such subadviser referred to herein as a “Subadviser”).

The Independent Trustees were assisted in their review by independent legal counsel, and met with such counsel separately from representatives of IICO and the interested trustee. Independent legal counsel explained 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 and the Subadvisers, profitability (including any fall-out benefits) from the relationships with the Funds, economies of scale, the role played by the Independent Trustees, and information on comparative fees and expenses. The Board considered the written responses produced by IICO and each Subadviser in response to a 15(c) due diligence request list submitted by the Independent Trustees’ counsel prior to the meeting. Included in those responses, which had been provided to the Board prior to the telephonic meeting in July, was a Fund-by-Fund profitability analysis prepared by IICO, an explanation of the methodology by which the profitability analysis was calculated and extensive materials on performance, expenses and comparable fund information from Lipper, Inc., an independent mutual fund rating service. The Independent Trustees also met with independent counsel to review the materials and to discuss information provided by an independent fee consultant. As a result of their review, the Independent Trustees requested and subsequently received supplemental information prior to the Meeting. The Independent Trustees further reviewed these materials extensively among themselves, with their independent legal counsel and independent fee consultant, and with the other Board members at an executive session of the Independent Trustees on August 13^th, as well as at the Meeting, during which the Board considered various factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Board’s determination to approve the agreements are discussed separately below.

Nature, Extent and Quality of Services

The Board considered the nature, extent and quality of services provided to the Funds by IICO and each Subadviser, taking into account the large amount of materials produced by IICO and each Subadviser in response to the 15(c) due diligence request lists submitted on their behalf by counsel. They also considered the knowledge they had received from the regular meetings of the Board, including from the materials provided in connection with those meetings, such as the experience, resources and key personnel of IICO and each Subadviser, as well as the other services provided to the Funds by IICO and each Subadviser (such as, managing the quality of execution of portfolio transactions and the selection of broker-dealers for those transactions, monitoring adherence to each 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 also took into account the compliance environment at IICO and each Subadviser, noting the resources that IICO has dedicated towards compliance and monitoring the Subadvisers. The Board also considered the positive coverage and high rankings the Funds have received in the national media. The Board concluded that the nature and extent of the services provided by IICO and each Subadviser were appropriate and that the Funds were likely to benefit from the continued provision of those services.

Benefits from the Relationship with Funds

The Board next discussed whether IICO or any Subadviser derives any other direct or indirect benefit from serving the Funds. The Board considered the character and amount of benefits that accrue to each organization from its respective relationship with a Fund, including the fact that a variety of services are provided by affiliates of IICO, including distribution, shareholder servicing, administrative and fund accounting services. After full consideration of these and other factors, the Board concluded that none of IICO, any Subadviser or any of their affiliates receive any additional direct or indirect benefits that would preclude the Board from approving the continuation of an investment advisory agreement with IICO or any investment subadvisory agreement with a Subadviser.

Economies of Scale

The Board discussed whether economies of scale are being realized by the Funds and whether fee levels reflect those economies of scale for the benefit of the Funds’ shareholders. In that context, the Board discussed the current level of the Funds’ advisory fee breakpoints, nature of the asset class and also considered the current and anticipated asset levels of the Funds and the potential for growth in each Fund. The Board also considered information provided by the independent consultant regarding economies of scale. The Board concluded that, except for those Funds with expense reductions, the Funds’ asset sizes and fee structures did not warrant the restructuring or reevaluation of the fee breakpoints for the Funds at the current time.

Performance of the Funds and Costs of Services Provided

The Board considered, on a Fund by Fund basis, the performance of each Fund and the costs of the services provided, focusing on a number of Funds that the independent fee consultant had identified. Specifically, the Board examined the investment performance of each Fund, including quartile ranking for short- and long-term time periods and each Fund’s performance against its peers. The Board also examined the performance of each Fund against its respective Lipper index for the same periods. After extensively reviewing all of the performance information provided, the Board concluded that the Funds’ performance in each asset class was acceptable. Although the performance of some of the focus Funds identified by the independent fee consultant lagged that of their peers or respective Lipper index, the Board recognized that IICO, or the applicable Subadviser, had taken, or was taking, steps to address that underperformance, and determined to continue to monitor closely the performance of those Funds.

74 SEMIANNUAL REPORT 2012

The Board also considered the expenses of each Fund, the expense ratio of each Fund, and the expense limitation arrangements entered into by IICO in light of the services provided by IICO and each Subadviser. The Board also compared each Fund’s expenses, including advisory, distribution and shareholder servicing fees, with the expenses and advisory fees of other investment advisers managing similarly situated funds, as well as the advisory fees that IICO (or an affiliate) charges for providing advisory services to other accounts in the same asset class for certain Funds. In that regard, the Board noted that IICO performs significant additional services for the Funds as compared to those other accounts. The Board also took into account the information on IICO’s profitability in managing the Funds, including the methodology used to calculate profitability. The Board finally considered the amount of assets in each Fund, each Fund’s average account size and how those factors affect the Funds’ expense ratios, noting that, expenses generally decreased since last year’s review. The Board reviewed the Funds’ operating expenses and compared them to each Fund’s peer funds. The Board asked for, and IICO agreed to, expense reductions for certain Funds. After completing this examination, the Board concluded that each Fund’s expenses are appropriate at the current time.

Independent Fee Consultant Review

During August of 2012, and as part of their regularly scheduled meetings, the Disinterested Trustees of Ivy Funds (collectively, the “Ivy Funds” and any separate series thereof an “Ivy Fund”) reviewed a substantial amount of information in connection with considering the continuation of the existing investment management agreement currently in effect between Ivy Investment Management Company (“IICO”) and the Ivy Funds. The Disinterested Trustees of the Ivy Funds engaged an independent fee consultant to assist them in evaluating the reasonableness of the management fees charged by IICO to the Ivy Funds. The independent fee consultant’s review addressed the following fee-related factors:

1. The nature, extent and quality of IICO’s services to the Ivy Funds, including performance

2. Management fees (including any components thereof) charged by other mutual fund companies for like services

3. Management fees (including any components thereof) charged to institutional and other clients of IICO for like services

4. Costs to IICO and its affiliates of supplying services pursuant to the management fee agreement, and profit margins of IICO and its affiliates from supplying such services

5. Possible economies of scale as an Ivy Fund grows larger

The following summarizes the findings of the independent fee consultant retained by the Disinterested Trustees.¹

Summary Findings

The report stated that IICO delivered strong levels of performance in the longer-term periods and service to the Ivy Funds in relation to its management fees and relative to investment advisers of comparable mutual funds. For the three-year period ended March 31, 2012, when compared to their respective peer groups established by Lipper, Inc. (“Lipper”), approximately 19% of the Ivy Funds were in the top quintile of performance and 31% of the Ivy Funds were in the top two quintiles of performance. For the one-year period, 28% of the Ivy Funds were in the top two quintiles. For the five-year period, 58% of the Funds were in the top two quartiles and 79% were in the top three quartiles. The independent fee consultant noted that the Ivy Funds’ performance appeared to be grounded in a number of institutional competitive advantages at IICO, including stock selection ability, ability to attract top talent, strategic vision, performance-focused culture, ability to manage smaller AUM funds, ability to serve small account sizes and an effective trading infrastructure, and that these factors offer the Ivy Funds a reasonable expectation of strong investment and service performance over the long term.

The report stated that for the 12 months ended March 31, 2012, the total expense ratios of the Ivy Funds were 4% below the mean total expense ratios of comparable Lipper Expense Group peers and 15% below average total expense ratios of funds in the Lipper Expense Universe. The management fees for the Ivy Funds on average were approximately 8% below the mean management fees for their Lipper Expense Groups and approximately 11% below the mean for their Lipper Expense Universe. The independent fee consultant noted that the Ivy Funds’ small average account size introduces certain biases in the Lipper analyses that works against Ivy Funds in Lipper expense comparisons and, as a result, the Lipper findings may be considered conservative in that regard. The independent fee consultant found that within the larger Lipper averages, the management fees and total expenses of individual Ivy Funds and share classes are reasonable relative to their performance.

The report also stated that the management fees IICO charges to the Ivy Funds are reasonable in relation to the management fees it charges to its institutional account clients. The report noted that these institutional account clients have different service and infrastructure needs and in addition, based on industry data, the average spread between management fees charged to the Ivy Funds and those it charges to institutional account clients is reasonably close to the average fee spreads observed at other investment advisers in industry surveys.

The independent fee consultant found that the level of profit earned by IICO from managing the Ivy Funds appears to be reasonable. The report noted that IICO’s overall profitability from managing the Ivy Funds and its other operations is below the profitability of other similarly-sized, publicly traded mutual fund managers, but appears adequate to enable IICO to continue to provide quality support to the Ivy Funds and their shareholders.

The report stated that the independent fee consultant found the Ivy Funds’ fees and expenses reasonable in light of any possible economies of scale that may exist. The report went on to state that the Ivy Funds’ shareholders may realize lower expenses from growth in assets under management through management fee breakpoints, declines in transfer agency expenses, declines in custody contract rates and declines in other non-management expenses.

Conclusions

The independent fee consultant believes that the services provided by IICO and its affiliates and expenses incurred by the Ivy Funds in the previous twelve months are reasonable and provide adequate justification for renewal of the Ivy Funds’ existing advisory agreements.

¹  The independent fee consultant’s evaluation was based on information provided by IICO, Lipper, Inc., other information providers and other independent analyses. The term “management fees” refers to the actual annual advisory and administrative fees, net of any fee waivers, paid by an Ivy Fund to IICO, as a percentage of average net assets. The term “total expenses” refers to the total annual expenses, net of any fee waivers, paid by an Ivy Fund, as a percentage of average net assets. Where these terms are used in reference to groups of Ivy Funds, numbers expressed are usually on an asset-weighted basis. Fee and performance data used in screening methodologies are usually for the period ending March 31, 2012. Lipper report data reflects Class A shares.

2012 SEMIANNUAL REPORT 75

PROXY VOTING INFORMATION

Ivy Funds

Proxy Voting Guidelines

A description of the policies and procedures Ivy Funds 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 Trust 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

Ivy Funds

Portfolio holdings can be found on the Trust’s website at www.ivyfunds.com. Alternatively, a complete schedule of portfolio holdings of each Fund for the first and third quarters of each fiscal year is filed with the SEC and can be found on the Trust’s Form N-Q. These holdings may be viewed 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.

TO ALL TRADITIONAL IRA PLANHOLDERS:

Ivy Funds

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. A 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.

76 SEMIANNUAL REPORT 2012

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2012 SEMIANNUAL REPORT 77

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78 SEMIANNUAL REPORT 2012

The Ivy Funds Family

Domestic Equity Funds

Ivy Core Equity Fund

Ivy Dividend Opportunities Fund

Ivy Large Cap Growth Fund

Ivy Micro Cap Growth Fund

Ivy Mid Cap Growth Fund

Ivy Small Cap Growth Fund

Ivy Small Cap Value Fund

Ivy Tax-Managed Equity Fund

Ivy Value Fund

Global/International Funds

Ivy Cundill Global Value Fund

Ivy European Opportunities Fund

Ivy Global Equity Income Fund

Ivy Global Income Allocation Fund

Ivy International Core Equity Fund

Ivy International Growth Fund

Ivy Managed European/Pacific Fund

Ivy Managed International Opportunities Fund

Ivy Pacific Opportunities Fund

Specialty Funds

Ivy Asset Strategy Fund

Ivy Asset Strategy New Opportunities Fund

Ivy Balanced Fund

Ivy Energy Fund

Ivy Global Natural Resources Fund

Ivy Real Estate Securities Fund

Ivy Science and Technology Fund

Fixed Income Funds

Ivy Bond Fund

Ivy Global Bond Fund

Ivy High Income Fund

Ivy Limited-Term Bond Fund

Ivy Money Market Fund

Ivy Municipal Bond Fund

Ivy Municipal High Income 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, or summary prospectus, carefully before investing.

2012 SEMIANNUAL REPORT 79

SEMIANN-IVYSPEC (9-12)

Semiannual Report

September 30, 2012

Ivy Funds

Ivy Bond Fund

Ivy Core Equity Fund

Ivy Cundill Global Value Fund

Ivy Dividend Opportunities Fund

Ivy European Opportunities Fund

Ivy Global Bond Fund

Ivy Global Equity Income Fund

Ivy Global Income Allocation Fund

Ivy High Income Fund

Ivy International Core Equity Fund

Ivy International Growth Fund

Ivy Large Cap Growth Fund

Ivy Limited-Term Bond Fund

Ivy Managed European/Pacific Fund

Ivy Managed International Opportunities Fund

Ivy Micro Cap Growth Fund

Ivy Mid Cap Growth Fund

Ivy Money Market Fund

Ivy Municipal Bond Fund

Ivy Municipal High Income Fund

Ivy Pacific Opportunities Fund

Ivy Small Cap Growth Fund

Ivy Small Cap Value Fund

Ivy Tax-Managed Equity Fund

Ivy Value Fund

 

CONTENTS

Ivy Funds

President’s Letter	3
Illustration of Fund Expenses	4
Portfolio Highlights and Schedule of Investments:
Ivy Bond Fund	9
Ivy Core Equity Fund	18
Ivy Cundill Global Value Fund	21
Ivy Dividend Opportunities Fund	24
Ivy European Opportunities Fund	27
Ivy Global Bond Fund	30
Ivy Global Equity Income Fund	36
Ivy Global Income Allocation Fund	39
Ivy High Income Fund	44
Ivy International Core Equity Fund	54
Ivy International Growth Fund	58
Ivy Large Cap Growth Fund	62
Ivy Limited-Term Bond Fund	65
Ivy Managed European/Pacific Fund and Ivy Managed International Opportunities Fund	70
Ivy Micro Cap Growth Fund	72
Ivy Mid Cap Growth Fund	75
Ivy Money Market Fund	79
Ivy Municipal Bond Fund	83
Ivy Municipal High Income Fund	91
Ivy Pacific Opportunities Fund	103
Ivy Small Cap Growth Fund	107
Ivy Small Cap Value Fund	110
Ivy Tax-Managed Equity Fund	113
Ivy Value Fund	116
Statements of Assets and Liabilities	119
Statements of Operations	123
Statements of Changes in Net Assets	127
Financial Highlights	136
Notes to Financial Statements	186
Renewal of Investment Management Agreement	210
Proxy Voting Information	213
Quarterly Portfolio Schedule Information	213
IRA Disclosure	213

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

2 SEMIANNUAL REPORT 2012

PRESIDENT’S LETTER

Ivy Funds SEPTEMBER 30, 2012 (UNAUDITED)

Henry J. Herrmann, CFA

Dear Shareholder,

While the equity markets continued to climb throughout August 2012, this has been mostly a joyless bull market. Slow economic growth in the U.S., along with global economic and geopolitical concerns, have weighed on investor sentiment, creating uncertainty across financial markets. While equities are trading well above where they were at the start of 2012, the ride has not been smooth, illustrating once again the importance of taking a long view.

After a strong first quarter in 2012, economic activity slowed. Also concern increased about Europe’s inability to deal with the continent’s sovereign debt crisis. That issue peaked as Greece successfully wrestled through an election process that could have opened the door to Greece’s departure from the European Union – an event that might have become the first in a series of dominos leading to the eurozone’s eventual dissolution.

In the U.S., unemployment has remained too high, but has improved to 8.07 percent by September. Economic growth expectations have been lowered several times, with the Federal Reserve now expecting 2012 GDP between 1.7 and 2.0 percent.

Uncertainty, and investors’ risk aversion, may be best illustrated by U.S. Treasury yields at all-time lows, with the 10-year Treasury at 1.65 percent on September 30, 2012. On the equities side, the S&P 500 Index is up 2.3 percent (including reinvested dividends) for the six-month period ending September 30, 2012, as can be seen in the table.

There are clearly some challenges ahead. European officials still have far to go in creating some kind of fiscal union to better support their monetary union. It appears that China’s growth, while still robust, has tapered, adding to concerns about slowing global growth. Finally, there is the U.S. presidential election and so-call fiscal cliff to keep uncertainty elevated.

We will continue monitoring these and other economic developments in the months ahead but will be paying special attention to the election, which we continue to believe will be among the most important in recent history.

Economic Snapshot

	09/30/2012		03/31/2012
S&P 500 Index		1,440.67		1,408.47
MSCI EAFE Index		1,510.76		1,553.46
10-Year Treasury Yield		1.65%		2.235
U.S. unemployment rate		8.07%		8.27%
30-year fixed mortgage rate		3.43%		3.97%
Oil price per barrel	$	92.19	$	103.02

Sources: Bloomberg, U.S. Department of Labor, CME

All government statistics shown are subject to periodic revision. The S&P 500 Index is an unmanaged index that tracks the stocks of 500 primarily large-cap U.S. companies. MSCI EAFE Index is an unmanaged index comprised of securities that represent the securities markets in Europe, Australasia and the Far East. It is not possible to invest directly in any of these indexes. Mortgage rates are from BankRate and reflect the overnight national average rate on a conventional 30-year fixed loan. Oil prices reflect the market price of West Texas intermediate grade crude.

As always, we thank you for your continued trust and partnership.

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.

2012 SEMIANNUAL REPORT 3

ILLUSTRATION OF FUND EXPENSES

Ivy Funds (UNAUDITED)

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 table is 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, 2012.

Actual Expenses

The first section in the following table provides information about actual account values and actual expenses for each share class. You may use the information in this section, 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 section 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 table. 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 table, a customer is charged an annual fee of $18 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 following table. Additional fees have the effect of reducing investment returns.

Hypothetical Example for Comparison Purposes

The second section in the following table provides information about hypothetical account values and hypothetical expenses for each share class based on the Fund’s actual expense ratio and an assumed rate of return of five percent 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 five percent hypothetical example with the five percent hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table 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 section in the table 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.

Expenses paid may be impacted by expense reduction arrangements. If those arrangements had not been in place, expenses paid would have been higher. See Note 6 to the Financial Statements for further information.

	Actual(1)						Hypothetical(2)
Fund	Beginning Account Value 3-31-12		Ending Account Value 9-30-12		Expenses Paid During Period*		Beginning Account Value 3-31-12		Ending Account Value 9-30-12		Expenses Paid During Period*		Annualized Expense Ratio Based on the Six-Month Period
Ivy Bond Fund
Class A	$	1,000	$	1,047.80	$	5.53	$	1,000	$	1,019.66	$	5.45		1.08%
Class B	$	1,000	$	1,042.50	$	10.72	$	1,000	$	1,014.54	$	10.58		2.10%
Class C	$	1,000	$	1,044.00	$	9.30	$	1,000	$	1,016.01	$	9.17		1.81%
Class E	$	1,000	$	1,047.50	$	5.84	$	1,000	$	1,019.36	$	5.76		1.14%
Class I	$	1,000	$	1,049.40	$	4.00	$	1,000	$	1,021.15	$	3.94		0.79%
Class Y	$	1,000	$	1,048.00	$	5.22	$	1,000	$	1,019.99	$	5.15		1.01%
Ivy Core Equity Fund
Class A	$	1,000	$	1,032.10	$	6.50	$	1,000	$	1,018.70	$	6.46		1.27%
Class B	$	1,000	$	1,026.70	$	11.55	$	1,000	$	1,013.64	$	11.48		2.28%
Class C	$	1,000	$	1,027.10	$	10.34	$	1,000	$	1,014.89	$	10.28		2.03%
Class E	$	1,000	$	1,031.20	$	6.91	$	1,000	$	1,018.32	$	6.86		1.35%
Class I	$	1,000	$	1,034.00	$	4.78	$	1,000	$	1,020.37	$	4.75		0.94%
Class Y	$	1,000	$	1,032.10	$	5.99	$	1,000	$	1,019.13	$	5.96		1.19%

4 SEMIANNUAL REPORT 2012

ILLUSTRATION OF FUND EXPENSES

Ivy Funds (UNAUDITED)

	Actual(1)						Hypothetical(2)
Fund	Beginning Account Value 3-31-12		Ending Account Value 9-30-12		Expenses Paid During Period*		Beginning Account Value 3-31-12		Ending Account Value 9-30-12		Expenses Paid During Period*		Annualized Expense Ratio Based on the Six-Month Period
Ivy Cundill Global Value Fund
Class A	$	1,000	$	904.00	$	9.04	$	1,000	$	1,015.56	$	9.57		1.90%
Class B	$	1,000	$	899.10	$	14.05	$	1,000	$	1,010.22	$	14.88		2.96%
Class C	$	1,000	$	901.40	$	11.50	$	1,000	$	1,012.93	$	12.18		2.42%
Class E	$	1,000	$	905.90	$	7.62	$	1,000	$	1,017.11	$	8.07		1.59%
Class I	$	1,000	$	906.20	$	6.20	$	1,000	$	1,018.55	$	6.56		1.30%
Class Y	$	1,000	$	905.60	$	6.86	$	1,000	$	1,017.90	$	7.26		1.43%
Ivy Dividend Opportunities Fund
Class A	$	1,000	$	1,022.40	$	6.47	$	1,000	$	1,018.70	$	6.46		1.27%
Class B	$	1,000	$	1,018.00	$	10.70	$	1,000	$	1,014.46	$	10.68		2.12%
Class C	$	1,000	$	1,019.20	$	9.89	$	1,000	$	1,015.23	$	9.87		1.96%
Class E	$	1,000	$	1,021.80	$	6.87	$	1,000	$	1,018.22	$	6.86		1.37%
Class I	$	1,000	$	1,024.00	$	4.76	$	1,000	$	1,020.41	$	4.75		0.93%
Class Y	$	1,000	$	1,022.90	$	5.97	$	1,000	$	1,019.19	$	5.96		1.17%
Ivy European Opportunities Fund
Class A	$	1,000	$	1,007.00	$	9.23	$	1,000	$	1,015.89	$	9.27		1.83%
Class B	$	1,000	$	1,001.40	$	14.61	$	1,000	$	1,010.51	$	14.68		2.90%
Class C	$	1,000	$	1,004.10	$	12.12	$	1,000	$	1,012.96	$	12.18		2.42%
Class E**	$	1,000	$	1,009.60	$	6.63	$	1,000	$	1,018.47	$	6.66		1.32%
Class I	$	1,000	$	1,010.00	$	5.93	$	1,000	$	1,019.15	$	5.96		1.18%
Class Y	$	1,000	$	1,009.10	$	7.23	$	1,000	$	1,017.90	$	7.26		1.43%
Ivy Global Bond Fund
Class A	$	1,000	$	1,026.10	$	5.07	$	1,000	$	1,020.12	$	5.05		0.99%
Class B	$	1,000	$	1,022.20	$	8.80	$	1,000	$	1,016.37	$	8.77		1.74%
Class C	$	1,000	$	1,022.20	$	8.80	$	1,000	$	1,016.37	$	8.77		1.74%
Class I	$	1,000	$	1,027.40	$	3.75	$	1,000	$	1,021.37	$	3.74		0.74%
Class Y	$	1,000	$	1,026.10	$	5.07	$	1,000	$	1,020.12	$	5.05		0.99%
Ivy Global Equity Income Fund
Class A	$	1,000	$	1,126.90	$	4.47	$	1,000	$	1,018.58	$	6.56		1.29%
Class B	$	1,000	$	1,123.50	$	7.01	$	1,000	$	1,014.85	$	10.28		2.04%
Class C	$	1,000	$	1,124.10	$	6.69	$	1,000	$	1,015.28	$	9.87		1.95%
Class I	$	1,000	$	1,127.90	$	3.19	$	1,000	$	1,020.37	$	4.75		0.94%
Class Y	$	1,000	$	1,127.20	$	4.04	$	1,000	$	1,019.13	$	5.96		1.19%
Ivy Global Income Allocation Fund
Class A	$	1,000	$	1,004.60	$	6.82	$	1,000	$	1,018.31	$	6.86		1.35%
Class B	$	1,000	$	1,000.10	$	11.60	$	1,000	$	1,013.47	$	11.68		2.31%
Class C	$	1,000	$	1,000.60	$	10.10	$	1,000	$	1,014.95	$	10.18		2.02%
Class E	$	1,000	$	1,004.70	$	6.72	$	1,000	$	1,018.42	$	6.76		1.33%
Class I	$	1,000	$	1,006.70	$	4.62	$	1,000	$	1,020.49	$	4.65		0.91%
Class Y	$	1,000	$	1,005.50	$	5.92	$	1,000	$	1,019.21	$	5.96		1.17%

See footnotes on page 8.

2012 SEMIANNUAL REPORT 5

ILLUSTRATION OF FUND EXPENSES

Ivy Funds (UNAUDITED)

	Actual(1)						Hypothetical(2)
Fund	Beginning Account Value 3-31-12		Ending Account Value 9-30-12		Expenses Paid During Period*		Beginning Account Value 3-31-12		Ending Account Value 9-30-12		Expenses Paid During Period*		Annualized Expense Ratio Based on the Six-Month Period
Ivy High Income Fund
Class A	$	1,000	$	1,065.00	$	4.96	$	1,000	$	1,020.29	$	4.85		0.95%
Class B	$	1,000	$	1,061.10	$	8.66	$	1,000	$	1,016.63	$	8.47		1.68%
Class C	$	1,000	$	1,061.40	$	8.45	$	1,000	$	1,016.83	$	8.27		1.64%
Class E	$	1,000	$	1,062.40	$	7.01	$	1,000	$	1,018.26	$	6.86		1.36%
Class I	$	1,000	$	1,066.30	$	3.62	$	1,000	$	1,021.52	$	3.54		0.71%
Class Y	$	1,000	$	1,065.10	$	4.96	$	1,000	$	1,020.29	$	4.85		0.95%
Ivy International Core Equity Fund
Class A	$	1,000	$	973.10	$	7.30	$	1,000	$	1,017.69	$	7.47		1.47%
Class B	$	1,000	$	969.00	$	11.62	$	1,000	$	1,013.26	$	11.88		2.36%
Class C	$	1,000	$	970.50	$	10.44	$	1,000	$	1,014.52	$	10.68		2.10%
Class E	$	1,000	$	973.90	$	7.60	$	1,000	$	1,017.41	$	7.77		1.53%
Class I	$	1,000	$	975.20	$	5.33	$	1,000	$	1,019.71	$	5.45		1.07%
Class Y	$	1,000	$	973.90	$	6.51	$	1,000	$	1,018.43	$	6.66		1.32%
Ivy International Growth Fund
Class A	$	1,000	$	1,002.70	$	7.51	$	1,000	$	1,017.54	$	7.57		1.50%
Class B	$	1,000	$	997.70	$	12.29	$	1,000	$	1,012.74	$	12.38		2.46%
Class C	$	1,000	$	997.70	$	12.19	$	1,000	$	1,012.91	$	12.28		2.42%
Class E**	$	1,000	$	1,003.60	$	6.41	$	1,000	$	1,018.72	$	6.46		1.27%
Class I	$	1,000	$	1,004.10	$	5.71	$	1,000	$	1,019.35	$	5.76		1.15%
Class Y	$	1,000	$	1,003.00	$	7.01	$	1,000	$	1,018.04	$	7.06		1.40%
Ivy Large Cap Growth Fund
Class A	$	1,000	$	976.90	$	5.73	$	1,000	$	1,019.32	$	5.86		1.15%
Class B	$	1,000	$	972.00	$	10.65	$	1,000	$	1,014.32	$	10.88		2.14%
Class C	$	1,000	$	973.10	$	9.57	$	1,000	$	1,015.41	$	9.77		1.93%
Class E	$	1,000	$	976.90	$	5.73	$	1,000	$	1,019.32	$	5.86		1.15%
Class I	$	1,000	$	978.10	$	4.35	$	1,000	$	1,020.67	$	4.45		0.88%
Class R	$	1,000	$	975.20	$	7.31	$	1,000	$	1,017.64	$	7.47		1.48%
Class Y	$	1,000	$	977.20	$	5.24	$	1,000	$	1,019.77	$	5.35		1.06%
Ivy Limited-Term Bond Fund
Class A	$	1,000	$	1,017.80	$	4.54	$	1,000	$	1,020.61	$	4.55		0.89%
Class B	$	1,000	$	1,013.70	$	8.56	$	1,000	$	1,016.55	$	8.57		1.70%
Class C	$	1,000	$	1,014.10	$	8.16	$	1,000	$	1,017.01	$	8.17		1.61%
Class E	$	1,000	$	1,017.20	$	5.04	$	1,000	$	1,020.07	$	5.05		1.00%
Class I	$	1,000	$	1,019.10	$	3.23	$	1,000	$	1,021.83	$	3.23		0.65%
Class Y	$	1,000	$	1,017.80	$	4.54	$	1,000	$	1,020.61	$	4.55		0.89%
Ivy Managed European/Pacific Fund
Class A	$	1,000	$	980.70	$	2.97	$	1,000	$	1,022.04	$	3.03		0.60%
Class B	$	1,000	$	974.90	$	7.60	$	1,000	$	1,017.40	$	7.77		1.53%
Class C	$	1,000	$	977.60	$	6.82	$	1,000	$	1,018.17	$	6.96		1.38%
Class E**	$	1,000	$	980.70	$	2.38	$	1,000	$	1,022.70	$	2.43		0.47%
Class I	$	1,000	$	983.40	$	1.19	$	1,000	$	1,023.89	$	1.21		0.23%
Class Y	$	1,000	$	982.00	$	2.18	$	1,000	$	1,022.83	$	2.23		0.45%

6 SEMIANNUAL REPORT 2012

ILLUSTRATION OF FUND EXPENSES

Ivy Funds (UNAUDITED)

	Actual(1)						Hypothetical(2)
Fund	Beginning Account Value 3-31-12		Ending Account Value 9-30-12		Expenses Paid During Period*		Beginning Account Value 3-31-12		Ending Account Value 9-30-12		Expenses Paid During Period*		Annualized Expense Ratio Based on the Six-Month Period
Ivy Managed International Opportunities Fund
Class A	$	1,000	$	988.50	$	2.49	$	1,000	$	1,022.60	$	2.53		0.49%
Class B	$	1,000	$	984.90	$	6.95	$	1,000	$	1,018.05	$	7.06		1.40%
Class C	$	1,000	$	984.90	$	6.45	$	1,000	$	1,018.58	$	6.56		1.29%
Class E**	$	1,000	$	989.70	$	1.89	$	1,000	$	1,023.12	$	1.92		0.39%
Class I	$	1,000	$	990.80	$	0.80	$	1,000	$	1,024.28	$	0.81		0.16%
Class Y	$	1,000	$	989.60	$	1.79	$	1,000	$	1,023.31	$	1.82		0.35%
Ivy Micro Cap Growth Fund
Class A	$	1,000	$	969.90	$	8.67	$	1,000	$	1,016.27	$	8.87		1.76%
Class B	$	1,000	$	964.10	$	14.14	$	1,000	$	1,010.63	$	14.48		2.88%
Class C	$	1,000	$	966.40	$	12.29	$	1,000	$	1,012.54	$	12.58		2.50%
Class I	$	1,000	$	972.10	$	6.51	$	1,000	$	1,018.50	$	6.66		1.31%
Class Y	$	1,000	$	971.00	$	7.88	$	1,000	$	1,017.12	$	8.07		1.58%
Ivy Mid Cap Growth Fund
Class A	$	1,000	$	969.90	$	6.60	$	1,000	$	1,018.33	$	6.76		1.35%
Class B	$	1,000	$	965.90	$	10.81	$	1,000	$	1,014.10	$	11.08		2.19%
Class C	$	1,000	$	966.70	$	10.23	$	1,000	$	1,014.66	$	10.48		2.07%
Class E	$	1,000	$	969.00	$	7.88	$	1,000	$	1,017.07	$	8.07		1.60%
Class I	$	1,000	$	971.70	$	5.13	$	1,000	$	1,019.85	$	5.25		1.04%
Class R	$	1,000	$	968.60	$	8.07	$	1,000	$	1,016.88	$	8.27		1.63%
Class Y	$	1,000	$	970.30	$	6.30	$	1,000	$	1,018.65	$	6.46		1.28%
Ivy Money Market Fund
Class A	$	1,000	$	1,000.10	$	1.70	$	1,000	$	1,023.38	$	1.72		0.34%
Class B**	$	1,000	$	1,000.10	$	1.70	$	1,000	$	1,023.38	$	1.72		0.34%
Class C**	$	1,000	$	1,000.10	$	1.70	$	1,000	$	1,023.38	$	1.72		0.34%
Class E	$	1,000	$	1,000.10	$	1.70	$	1,000	$	1,023.39	$	1.72		0.34%
Ivy Municipal Bond Fund
Class A	$	1,000	$	1,042.40	$	5.21	$	1,000	$	1,019.94	$	5.15		1.02%
Class B	$	1,000	$	1,038.60	$	8.97	$	1,000	$	1,016.24	$	8.87		1.76%
Class C	$	1,000	$	1,038.50	$	9.07	$	1,000	$	1,016.18	$	8.97		1.77%
Class I	$	1,000	$	1,043.40	$	4.19	$	1,000	$	1,020.95	$	4.14		0.82%
Class Y	$	1,000	$	1,042.30	$	5.21	$	1,000	$	1,019.94	$	5.15		1.02%
Ivy Municipal High Income Fund
Class A	$	1,000	$	1,055.80	$	4.42	$	1,000	$	1,020.81	$	4.34		0.85%
Class B	$	1,000	$	1,051.70	$	8.41	$	1,000	$	1,016.88	$	8.27		1.63%
Class C	$	1,000	$	1,052.00	$	8.11	$	1,000	$	1,017.13	$	7.97		1.58%
Class I	$	1,000	$	1,056.60	$	3.60	$	1,000	$	1,021.60	$	3.54		0.69%
Class Y	$	1,000	$	1,055.80	$	4.42	$	1,000	$	1,020.81	$	4.34		0.85%

See footnotes on page 8.

2012 SEMIANNUAL REPORT 7

ILLUSTRATION OF FUND EXPENSES

Ivy Funds (UNAUDITED)

	Actual(1)						Hypothetical(2)
Fund	Beginning Account Value 3-31-12		Ending Account Value 9-30-12		Expenses Paid During Period*		Beginning Account Value 3-31-12		Ending Account Value 9-30-12		Expenses Paid During Period*		Annualized Expense Ratio Based on the Six-Month Period
Ivy Pacific Opportunities Fund
Class A	$	1,000	$	967.10	$	8.85	$	1,000	$	1,016.10	$	9.07		1.79%
Class B	$	1,000	$	962.20	$	14.72	$	1,000	$	1,010.11	$	15.08		2.98%
Class C	$	1,000	$	963.60	$	12.57	$	1,000	$	1,012.23	$	12.88		2.56%
Class E**	$	1,000	$	968.80	$	6.79	$	1,000	$	1,018.21	$	6.96		1.37%
Class I	$	1,000	$	969.90	$	6.21	$	1,000	$	1,018.80	$	6.36		1.25%
Class Y	$	1,000	$	968.30	$	7.38	$	1,000	$	1,017.56	$	7.57		1.50%
Ivy Small Cap Growth Fund
Class A	$	1,000	$	1,024.80	$	7.59	$	1,000	$	1,017.52	$	7.57		1.51%
Class B	$	1,000	$	1,019.90	$	12.62	$	1,000	$	1,012.61	$	12.58		2.49%
Class C	$	1,000	$	1,021.40	$	10.81	$	1,000	$	1,014.37	$	10.78		2.13%
Class E	$	1,000	$	1,024.20	$	7.89	$	1,000	$	1,017.27	$	7.87		1.55%
Class I	$	1,000	$	1,026.50	$	5.47	$	1,000	$	1,019.69	$	5.45		1.07%
Class R	$	1,000	$	1,023.50	$	8.50	$	1,000	$	1,016.67	$	8.47		1.67%
Class Y	$	1,000	$	1,025.50	$	6.68	$	1,000	$	1,018.48	$	6.66		1.31%
Ivy Small Cap Value Fund
Class A	$	1,000	$	1,025.40	$	8.61	$	1,000	$	1,016.62	$	8.57		1.69%
Class B	$	1,000	$	1,020.00	$	14.14	$	1,000	$	1,011.05	$	14.08		2.79%
Class C	$	1,000	$	1,022.30	$	12.03	$	1,000	$	1,013.13	$	11.98		2.38%
Class E**	$	1,000	$	1,028.20	$	6.19	$	1,000	$	1,018.92	$	6.16		1.23%
Class I	$	1,000	$	1,028.80	$	5.68	$	1,000	$	1,019.47	$	5.65		1.12%
Class Y	$	1,000	$	1,027.30	$	7.10	$	1,000	$	1,018.08	$	7.06		1.39%
Ivy Tax-Managed Equity Fund
Class A	$	1,000	$	994.70	$	5.29	$	1,000	$	1,019.76	$	5.35		1.06%
Class B	$	1,000	$	992.30	$	7.97	$	1,000	$	1,017.04	$	8.07		1.60%
Class C	$	1,000	$	992.20	$	8.47	$	1,000	$	1,016.61	$	8.57		1.68%
Class I	$	1,000	$	991.00	$	3.58	$	1,000	$	1,021.43	$	3.64		0.73%
Class Y	$	1,000	$	995.40	$	4.89	$	1,000	$	1,020.18	$	4.95		0.98%
Ivy Value Fund
Class A	$	1,000	$	1,008.40	$	7.43	$	1,000	$	1,017.70	$	7.47		1.47%
Class B	$	1,000	$	1,003.00	$	12.92	$	1,000	$	1,012.18	$	12.98		2.57%
Class C	$	1,000	$	1,005.20	$	11.03	$	1,000	$	1,014.10	$	11.08		2.19%
Class E**	$	1,000	$	1,010.60	$	5.83	$	1,000	$	1,019.31	$	5.86		1.15%
Class I	$	1,000	$	1,010.60	$	5.23	$	1,000	$	1,019.89	$	5.25		1.03%
Class Y	$	1,000	$	1,010.00	$	6.43	$	1,000	$	1,018.67	$	6.46		1.28%

* 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, 2012, and divided by 365.

** Class closed to investment.

(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 last column of this section.

(2) This section uses a hypothetical five percent annual 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, or exchange fees.

8 SEMIANNUAL REPORT 2012

PORTFOLIO HIGHLIGHTS

Ivy Bond Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Bonds	95.4%
United States Government and Government Agency Obligations	42.1%
Corporate Debt Securities	37.0%
Asset-Backed Securities	7.5%
Mortgage-Backed Securities	7.0%
Municipal Bonds – Taxable	1.8%
Cash and Cash Equivalents and Equities	4.6%

Lipper Rankings

Category: Lipper Corporate Debt Funds A Rated	Rank	Percentile
1 Year	42/100	42
3 Year	23/83	28
5 Year	71/78	90
10 Year	49/54	90

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Quality Weightings

Investment Grade	82.0%
AAA	5.3%
AA	46.1%
A	9.6%
BBB	21.0%
Non-Investment Grade	13.4%
BB	11.3%
B	0.7%
CCC	0.4%
Below CCC	0.1%
Non-rated	0.9%
Cash and Cash Equivalents and Equities	4.6%

Our preference is to always use ratings obtained from Standard & Poor’s. For securities not rated by Standard & Poor’s, ratings are obtained from Moody’s.

2012 SEMIANNUAL REPORT 9

SCHEDULE OF INVESTMENTS

Ivy Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

PREFERRED STOCKS	Shares		Value
Specialized REITs – 0.0%
Public Storage, Inc., 6.25% Cumulative		2	$	57
TOTAL PREFERRED STOCKS – 0.0%			$	57
(Cost: $53)
ASSET-BACKED SECURITIES	Principal
Ally Auto Receivable Trust 2010–1B, 3.290%, 3–15–15 (A)	$	4,000		4,137
America West Airlines, Inc. Pass-Through Certificates, Series 2000-1, 8.057%, 7–2–20		1,551		1,652
America West Airlines, Inc., Pass Through Certificates, Series 1999-1, 7.930%, 1–2–19		1,079		1,136
American Airlines Pass-Through Trust Series 2005-1, 12.000%, 3–29–14 (A)		611		605
AmeriCredit Automobile Receivable Trust 2012-4, Series C, 1.930%, 8–8–18		510		511
AmeriCredit Automobile Receivables Trust 2010-4B, 1.990%, 10–8–15		385		389
AmeriCredit Automobile Receivables Trust 2011-1, 2.850%, 8–8–16		1,380		1,415
Capital Auto Receivables Asset Trust 2007-3, 8.000%, 3–17–14 (A)		480		481
Chrysler Financial Auto Securitization Trust 2010-A, 1.650%, 11–8–13		1,780		1,783
Continental Airlines 2001-1 A-1, 8.048%, 11–1–20		1,070		1,222
Continental Airlines Pass-Through Certificates 2010-1B, 6.000%, 1–12–19		888		883
Continental Airlines Pass-Through Certificates, Series 2006-1, 0.768%, 6–2–13 (B)		925		906
Continental Airlines Pass-Through Certificates, Series 2009-2, 7.250%, 11–10–19		685		783
Continental Airlines, Inc. Class B Pass Through Certificates, Series 2012-1B, 6.250%, 4–11–20		1,000		1,035

ASSET-BACKED SECURITIES (Continued)	Principal		Value
Continental Airlines, Inc., Ser 2012-2 Class A, 4.000%, 10–29–24	$	1,290	$	1,319
CountryPlace Manufactured Housing Contract Trust 2005-1:
4.800%, 12–15–35 (A)(B)		851		861
5.200%, 12–15–35 (A)(B)		300		296
CVS Caremark Corporation Pass-Through Trust: 6.036%, 12–10–28		3,386		3,932
6.943%, 1–10–30		581		708
Green Tree Financial Corporation, Manufactured Housing Contract, Pass-Through Certificates, Series 1993-3 A7, 6.400%, 10–15–18		52		54
Green Tree Financial Corporation, Manufactured Housing Contract, Pass-Through Certificates, Series 1994-5 A5, 8.300%, 11–15–19		126		128
Green Tree Financial Corporation, Manufactured Housing Contract, Pass-Through Certificates, Series 1996-4 A6, 7.400%, 6–15–27		678		712
Honda Auto Receivables 2009-3 Owner Trust, 3.300%, 9–15–15		860		863
Nordstrom Credit Card Master Note Trust II, Series 2011-1A, 2.280%, 11–15–19 (A)		2,880		3,001
Origen Manufactured Housing Contract Trust 2004-A, 5.700%, 1–15–35		647		687
Origen Manufactured Housing Contract Trust 2004-B:
4.750%, 8–15–21		248		249
5.730%, 11–15–35 (B)		767		816
Origen Manufactured Housing Contract Trust 2005-A, 5.860%, 6–15–36 (B)		83		89
Origen Manufactured Housing Contract Trust 2005-B, 5.910%, 1–15–37		700		734
Santander Drive Auto Receivables Trust 2010-B, 2.100%, 9–15–14 (A)		1,457		1,462
Santander Drive Auto Receivables Trust 2011-4, 1.370%, 3–16–15		858		862

ASSET-BACKED SECURITIES (Continued)	Principal		Value
US Airways, Inc. Class A Pass-Through Certificates, Series 2012-1, 5.900%, 10–1–24	$	1,010	$	1,068
Wells Fargo Commerical Mortgage Trust, Ser 2012-LC5 A3, 2.918%, 10–15–45		3,173		3,282
World Financial Network Credit Card Master Note Trust, Ser 2006-A,
0.351%, 2–15–17 (A)(B)		4,800		4,798
TOTAL ASSET-BACKED SECURITIES – 7.5%			$	42,859
(Cost: $41,694)
CORPORATE DEBT SECURITIES
Aerospace – 0.3%
BE Aerospace, Inc., 5.250%, 4-1–22		1,640		1,706
Aerospace & Defense – 0.2%
Textron Inc., 5.600%, 12–1–17		1,000		1,108
Airlines – 0.6%
United Air Lines, Inc., 10.400%, 11–1–16		830		957
US Airways Group, Inc. Class A, 6.250%, 4–22–23		1,263		1,342
US Airways Group, Inc. Class B, 8.500%, 4–22–17		879		901
				3,200
Application Software – 0.4%
Intuit Inc., 5.750%, 3–15–17		1,780		2,067
Auto Parts & Equipment – 0.8%
Dana Holding Corporation:
6.500%, 2–15–19		1,500		1,598
6.750%, 2–15–21		1,500		1,620
Delphi Corporation, 6.125%, 5–15–21		300		332
Tenneco Inc., 6.875%, 12–15–20		850		931
				4,481
Automobile Manufacturers – 0.7%
Hyundai Capital America, 1.625%, 10–2–15 (A)		1,600		1,601
Hyundai Capital Services, Inc., 4.375%, 7–27–16 (A)		2,000		2,156
				3,757

10 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Bond Fund (in thousands)

SEPTEMBER 30, 2012 (UNAUDITED)

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Building Products – 0.2%
Ryland Group, Inc. (The), 5.375%, 10–1–22	$	1,000	$	1,003
Cable & Satellite – 1.2%
DISH DBS Corporation, 4.625%, 7–15–17 (A)		1,725		1,764
EchoStar DBS Corporation, 7.750%, 5–31–15		1,890		2,125
NBCUniversal Media LLC, 4.450%, 1–15–43		3,750		3,737
				7,626
Communications Equipment – 0.4%
Telefonaktiebolaget LM Ericsson, 4.125%, 5–15–22		2,335		2,408
Consumer Finance – 3.3%
American Express Credit Account Master Trust Series 2012–2, 0.990%, 3–15–18		1,855		1,861
American Express Credit Corporation, 1.504%, 6–12–15 (B)		1,130		1,153
AmeriGas Partners, L.P. and AmeriGas Finance Corp., 6.500%, 5–20–21		477		501
Capital One Bank USA NA, 8.800%, 7–15–19		2,330		3,075
Discover Bank, 8.700%, 11–18–19		1,930		2,492
Discover Financial Services, 6.450%, 6–12–17		660		749
Ford Motor Credit Company LLC:
5.625%, 9–15–15		1,500		1,640
3.000%, 6–12–17		1,375		1,400
General Motors Financial Company, Inc., 4.750%, 8–15–17 (A)		4,100		4,204
Union 13 Leasing LLC, 1.870%, 6–28–24		1,153		1,171
				18,246
Distillers & Vintners – 0.7%
Constellation Brands, Inc., 4.625%, 3–1–23		1,175		1,199
Pernod Ricard S.A., 5.750%, 4–7–21 (A)		2,700		3,213
				4,412
Diversified Banks – 0.6%
Bank of America Corporation, 5.750%, 12–1–17		2,405		2,768
Wells Fargo Bank, N.A., 4.750%, 2–9–15		785		849
				3,617

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Diversified Chemicals – 0.5%
Eastman Chemical Company, 2.400%, 6–1–17	$	2,550	$	2,664
Electric Utilities – 0.5%
Southwestern Electric Power Company, 5.550%, 1–15–17		2,395		2,705
Electrical Components & Equipment – 0.2%
Actuant Corporation, 5.625%, 6–15–22		1,195		1,240
Food Retail – 0.3%
Tesco plc, 2.000%, 12–5–14 (A)		1,550		1,580
Health Care Facilities – 0.4%
NYU Hospitals Center, 4.428%, 7–1–42		2,210		2,246
Health Care Services – 1.2%
Aristotle Holding, Inc., 3.500%, 11–15–16 (A)		3,200		3,460
Medco Health Solutions, Inc., 7.125%, 3–15–18		1,030		1,294
Quest Diagnostics Incorporated, 5.750%, 1–30–40		1,860		2,204
				6,958
Health Care Supplies – 1.4%
Bio-Rad Laboratories, Inc., 4.875%, 12–15–20		4,300		4,606
Celgene Corporation, 3.250%, 8–15–22		3,980		4,019
				8,625
Industrial Machinery – 0.4%
Flowserve Corporation, 3.500%, 9–15–22		2,275		2,300
Integrated Telecommunication Services –1.0%
CenturyLink, Inc.:
6.150%, 9–15–19		1,000		1,121
6.450%, 6–15–21		2,830		3,193
Qwest Communications International Inc., 7.125%, 4–1–18		1,500		1,592
				5,906
Investment Banking & Brokerage – 0.8%
Goldman Sachs Group, Inc. (The), 6.250%, 9–1–17		970		1,137
Morgan Stanley:
6.250%, 8–28–17		2,200		2,497
5.500%, 7–28–21		1,090		1,193
				4,827
Life & Health Insurance – 1.1%
Principal Financial Group, Inc., 4.625%, 9–15–42		925		946

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Life & Health Insurance (Continued)
Prudential Financial, Inc., 5.875%, 9–15–42	$	3,000	$	3,075
StanCorp Financial Group, Inc., 6.875%, 10–1–12		450		450
Symetra Financial Corporation, 6.125%, 4–1–16 (A)		1,450		1,569
				6,040
Managed Health Care – 0.6%
Coventry Health Care, Inc., 6.125%, 1–15–15		415		457
WellPoint, Inc., 4.650%, 1–15–43		2,660		2,716
				3,173
Metal & Glass Containers – 0.6%
Ball Corporation:
7.375%, 9–1–19		500		558
6.750%, 9–15–20		2,720		2,991
				3,549
Multi-Utilities – 1.3%
CMS Energy Corporation:
2.750%, 5–15–14		600		609
8.750%, 6–15–19		1,825		2,369
Duke Energy Carolinas, LLC, 4.000%, 9–30–42		4,270		4,362
				7,340
Oil & Gas – 0.1%
Cimarex Energy Co., 5.875%, 5–1–22		500		528
Oil & Gas Exploration & Production – 1.3%
Concho Resources Inc.:
5.500%, 10–1–22		2,500		2,606
5.500%, 4–1–23		1,500		1,568
Tesoro Corporation:
4.250%, 10–1–17		2,645		2,724
5.375%, 10–1–22		570		587
				7,485
Oil & Gas Refining & Marketing – 0.7%
NuStar Logistics, L.P., 7.900%, 4–15–18		3,300		3,743
Oil & Gas Storage & Transportation – 3.6%
El Paso Natural Gas Company, 7.500%, 11–15–26		3,290		4,319
El Paso Pipeline Partners Operating Company, LLC:
6.500%, 4–1–20		375		445
5.000%, 10–1–21		690		760
Energy Transfer Partners, L.P., 9.000%, 4–15–19		2,770		3,572
Kinder Morgan Finance Company, ULC, 6.000%, 1–15–18 (A)		1,215		1,317

2012 SEMIANNUAL REPORT 11

SCHEDULE OF INVESTMENTS

Ivy Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Oil & Gas Storage & Transportation (Continued)
Regency Energy Partners LP and Regency Energy Finance Corp.:
6.500%, 7–15–21	$	3,000	$	3,210
5.500%, 4–15–23		1,000		1,011
Sunoco Logistics Partners Operations L.P., 6.850%, 2–15–40		1,265		1,454
Western Gas Partners, LP:
5.375%, 6–1–21		1,890		2,148
4.000%, 7–1–22		1,695		1,767
Williams Partners L.P., 7.250%, 2–1–17		770		937
				20,940
Other Diversified Financial Services – 2.5%
Citigroup Funding Inc., 4.450%, 1–10–17		3,280		3,603
Citigroup Inc., 6.010%, 1–15–15		1,080		1,184
Daimler Finance North America LLC, 1.300%, 7–31–15		5,200		5,220
JPMorgan Chase Bank N.A.:
5.875%, 6–13–16		1,170		1,346
6.000%, 7–5–17		215		252
6.000%, 10–1–17		2,368		2,803
				14,408
Paper Packaging – 0.4%
Rock–Tenn Company, 4.450%, 3–1–19 (A)		2,160		2,280
Pharmaceuticals – 0.3%
Mylan Inc.,
6.000%, 11–15–18 (A)		1,500		1,590
Property & Casualty Insurance – 1.2%
Liberty Mutual Group, Inc.:
7.300%, 6–15–14 (A)		1,000		1,087
5.000%, 6–1–21 (A)		5,280		5,582
OneBeacon U.S. Holdings, Inc., 5.875%, 5–15–13		200		205
				6,874
Railroads – 0.6%
BNSF Funding Trust I, 6.613%, 12–15–55		2,985		3,321
Real Estate Operating Companies – 0.6%
Colonial Realty Limited Partnership, 5.500%, 10–1–15		1,830		1,962
Helios Leasing I LLC, 2.018%, 5–29–24		1,399		1,432
				3,394

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Regional Banks – 2.1%
AmSouth Bancorporation, 5.200%, 4–1–15	$	1,000	$	1,040
HSBC Bank USA, N.A., 6.000%, 8–9–17		4,235		4,937
PNC Bank, N.A., 6.875%, 4–1–18		1,045		1,299
Santander Holdings USA, Inc., 3.000%, 9–24–15		865		875
SunTrust Bank, 0.721%, 8–24–15 (B)		4,225		4,076
				12,227
Research & Consulting Services – 0.1%
Dun & Bradstreet Corporation (The), 2.875%, 11–15–15		705		724
Retail REITs – 0.1%
Westfield Group, 7.500%, 6–2–14 (A)		600		661
Retail Stores – 0.3%
Dollar General Corporation, 4.125%, 7–15–17		1,395		1,458
Security & Alarm Services – 0.8%
ADT Corporation (The):
2.250%, 7–15–17 (A)		2,360		2,430
4.875%, 7–15–42 (A)		1,800		1,951
				4,381
Specialized Finance – 0.2%
International Lease Finance Corporation, 6.500%, 9–1–14 (A)		1,300		1,398
Specialized REITs – 1.3%
HCP, Inc., 3.750%, 2–1–19		1,660		1,741
Health Care REIT, Inc., 4.125%, 4–1–19		2,830		3,014
Healthcare Realty Trust Incorporated, 5.125%, 4–1–14		824		867
Nationwide Health Properties, Inc.:
6.250%, 2–1–13		600		611
6.000%, 5–20–15		1,000		1,114
				7,347
Specialized REIT’s – 0.3%
Ventas Realty, LP and Ventas Capital Corp., 4.000%, 4–30–19		1,850		1,978
Trading Companies & Distributors – 0.3%
AmeriGas Finance Corp. and AmeriGas Finance LLC, 6.750%, 5–20–20		1,500		1,601

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Trucking – 0.2%
Tagua Leasing, LLC, 1.900%, 7–12–24	$	1,290	$	1,312
Wireless – 0.1%
Virgin Media Finance plc, 5.250%, 2–15–22		350		368
Wireless Telecommunication Service – 0.2%
Crown Castle International Corp., 6.113%, 1–15–20 (A)		850		1,024
TOTAL CORPORATE DEBT SECURITIES – 37.0%			$	211,826
(Cost: $200,373)
MORTGAGE-BACKED SECURITIES
Commercial Mortgage-Backed Securities – 4.6%
7 WTC Depositor, LLC Trust 2012-WTC Commercial Mortgage Pass-Through Certificates, Series 2012-7WTC, 4.082%, 3–13–31 (A)		2,560		2,689
Bear Stearns Commercial Mortgage Securities Trust 2004-PWR4, 5.468%, 6–11–41 (B)		1,382		1,470
Commercial Mortgage Asset Trust:
6.975%, 1–17–32		982		1,000
7.800%, 11–17–32 (B)		1,000		1,053
Extended Stay America Trust, Commercial Mortgage Pass-Through Certificates, Series 2010-ESH, 4.860%, 11–5–27 (A)		1,905		1,922
Hometown Commercial Capital, LLC Hometown Commercial Mortgage Pass-Through Notes 2006-1,
5.506%, 11–11–38 (A)		1,500		1,035
Hometown Commercial Trust 2007-1, Commercial Mortgage-Backed Notes, Series 2007-1, 6.057%, 6–11–39 (A)		294		200
J.P. Morgan Chase Commercial Mortgage Securities Trust 2009-IWST, Commercial Mortgage Pass-Through Certificates, Series 2009-IWST:
2.224%, 12–5–27 (A)(B)		6,044		707
7.693%, 12–5–27 (A)(B)		2,600		3,212

12 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

MORTGAGE-BACKED SECURITIES (Continued)	Principal			Value
Commercial Mortgage-Backed Securities (Continued)
LB-UBS Commercial Mortgage Trust 2003-C7, 5.264%, 7–15–37 (A)(B)	$	1,000		$	992
Morgan Stanley Capital I Trust 2012-C4, 3.773%, 3–15–45		945			992
Multi Security Asset Trust LP, Commercial Mortgage-Backed Securities Pass-Through Certificates, Series 2005–RR4: 5.000%, 11–28–35 (A)		1,021			1,025
5.880%, 11–28–35 (A)(B)		1,280			829
Nomura Asset Securities Corporation, Commercial Mortgage Pass-Through Certificates, Series 1998-D6, 6.000%, 3–15–30 (A)		500			507
Prudential Securities Secured Financing Corporation, Commercial Mortgage Pass-Through Certficates, Series 2003-PWR1, 4.775%, 2–11–36 (A)		1,516			1,489
UBS-Barclays Commerical Mortgage Trust, Ser 2012-C3 A4, 3.091%, 8–10–49		2,885			3,003
Vornado DP LLC Trust 2010, Commercial Mortgage Pass-Through Certificates, Series 2010-VNO, 5.280%, 9–13–28 (A)		1,200			1,366
WFRBS Commercial Mortgage Trust 2001-C2 A-2, 3.791%, 2–15–44 (A)		1,485			1,619
WFRBS Commercial Mortgage Trust 2011-C5, 3.667%, 11–15–44 (B)		1,135			1,258
					26,368
Non-Agency REMIC/CMO – 0.0%
Banco Hipotecario Nacional:
7.916%, 7–25–09 (A)		31			—	*
1.667%, 3–25–12 (A)		10			—	*
7.540%, 5–31–17 (A)		—	*		—
Bear Stearns Mortgage Securities Inc., 8.000%, 11–25–29		207			189
Mellon Residential Funding, 6.750%, 6–25–28		7			8
					197
Other Mortgage-Backed Securities – 2.4%
Aames Mortgage Trust 2001-4, 7.150%, 1–25–32 (B)		386			250

MORTGAGE-BACKED SECURITIES (Continued)	Principal		Value
Other Mortgage-Backed Securities (Continued)
ABFS Mortgage Loan Trust 2001-2, 6.990%, 12–25–31 (B)	$	574	$	421
Asset Securitization Corporation:
8.621%, 8–13–29 (B)(C)		297		12
7.601%, 2–14–43 (B)		170		175
Banc of America Alternative Loan Trust 2003-05, 5.500%, 7–25–33		904		55
Banc of America Alternative Loan Trust 2005-06, 6.000%, 7–25–35		540		92
Banc of America Mortgage Trust 2003-09, 5.500%, 12–25–33		528		279
Banc of America Mortgage Trust 2004-03, 4.875%, 4–25–19		152		138
Bank of America Mortgage Securities, Inc., Mortgage Pass-Through Certificates, Series 2003-3, 5.500%, 5–25–33		1,050		1,078
C-Bass 2006-MH1 Trust: 5.970%, 10–25–36 (A)(B)		1,164		1,197
6.240%, 10–25–36 (A)(B)		88		93
CHL Mortgage Pass-Through Trust 2004-J4, 5.250%, 5–25–34		293		278
Collateralized Mortgage Obligation Trust, 5.000%, 7–1–18		12		13
CWHEQ Home Equity Loan Trust, Series 2007-S2, 5.934%, 5–25–37 (B)		347		224
First Horizon Mortgage Pass-Through Trust 2003-8, 5.140%, 10–25–33 (B)		191		79
First Horizon Mortgage Pass-Through Trust 2007-4, 5.500%, 8–25–22		206		193
Global Mortgage Securitization 2005-A Ltd. and Global Mortgage Securitization 2005-A LLC: 5.250%, 4–25–32		532		443
5.392%, 4–25–32 (B)		825		254
Global Mortgage Securitization Ltd. and Global Mortgage Securitization, LLC: 5.250%, 11–25–32 (A)		1,082		871
GMACM Home Equity Loan Trust 2006-HE3, 6.088%, 10–25–36 (B)		257		224
GMACM Home Equity Loan Trust 2007-HE1, 5.952%, 8–25–37 (B)		570		371
Impac CMB Trust Series 2003-2F, 7.000%, 1–25–33 (B)		332		267

MORTGAGE-BACKED SECURITIES (Continued)	Principal		Value
Other Mortgage-Backed Securities (Continued)
J.P. Morgan Mortgage Trust 2004-A3, 3.045%, 7–25–34 (B)	$	290	$	286
J.P. Morgan Mortgage Trust 2006-A2, 2.863%, 8–25–34 (B)		1,856		1,111
Merrill Lynch Mortgage Investors, Inc. Mortgage Pass-Through Certificates Series 1997-C2, 6.250%, 12–10–29		981		980
Morgan Stanley Capital I Trust 2004-TOP15, 5.030%, 6–13–41		294		301
Morgan Stanley Capital I Trust 2012-STAR Class A-2, 3.201%, 8–5–34 (A)		1,350		1,421
Morgan Stanley Capital I Trust 2012-STAR Class B, 3.451%, 8–5–34 (A)		930		960
Prudential Home Mortgage Securities: 6.730%, 4–28–24 (A)(B)		1		1
7.900%, 9–28–24 (A)(B)		3		2
RASC Series 2003–KS10 Trust, 6.410%, 12–25–33		221		58
RFMSI Series 2004–S5 Trust: 4.500%, 5–25–19		197		167
Salomon Brothers Mortgage Securities VII, Inc., Mortgage Pass-Through Certificates, Series 1997-HUD1, 7.750%, 12–25–30 (B)		719		415
Structured Adjustable Rate Mortgage Loan Trust, Series 2005-21, 5.400%, 11–25–35 (B)		1,575		145
Structured Asset Mortgage Investments, Inc.:
2.968%, 5–2–30 (B)		7		2
Structured Asset Securities Corporation, 5.250%, 8–25–33		232		179
TimberStar Trust I, 6.208%, 10–15–36 (A)		560		601
Wells Fargo Alternative Loan 2007-PA3 Trust, 5.750%, 7–25–37		143		5
				13,641
TOTAL MORTGAGE-BACKED SECURITIES – 7.0%			$	40,206
(Cost: $47,740)

2012 SEMIANNUAL REPORT 13

SCHEDULE OF INVESTMENTS

Ivy Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

MUNICIPAL BONDS- TAXABLE	Principal		Value
Florida – 0.1%
Sarasota Cnty, FL, Cap Impvt Rev Bonds, Ser 2010A, 7.016%, 10–1–40	$	520	$	634
New Jersey – 0.2%
NJ Trans Trust Fund Auth, Trans Sys Bonds, Ser 2010C, 5.754%, 12–15–28		760		898
New York – 1.3%
Port Auth of NY and NJ Consolidated Bonds, 168th Ser, 4.926%, 10–1–51		3,550		4,002
Port Authority of New York & New Jersey, 4.458%, 10–1–62		3,110		3,133
				7,135
Washington – 0.2%
Pub Util Dist No. 1, Douglas Cnty, WA, Wells Hydroelec Bonds, Ser 2010A, 5.450%, 9–1–40		1,205		1,357
TOTAL MUNICIPAL BONDS-TAXABLE – 1.8%			$	10,024
(Cost: $9,027)
UNITED STATES GOVERNMENT AGENCY OBLIGATIONS
Agency Obligations – 0.1%
Federal National Mortgage Association, 5.500%, 2–1–35		274		304
Mortgage–Backed Obligations – 31.5%
Federal Home Loan Mortgage Corporation Fixed Rate Participation Certificates:
5.500%, 12–1–17		191		207
5.500%, 9–1– 19		299		326
5.000%, 4–1–23		900		979
3.500%, 8–1–26		1,703		1,821
5.000%, 5–1–29		154		167
6.500%, 9–1–32		90		102
5.300%, 1–15–33		206		228
6.000%, 11–1–33		165		188
5.500%, 5–1–34		1,126		1,263
6.500%, 5–1–34		300		344
5.500%, 6–1–34		460		505
5.000%, 9–1–34		7		7
5.500%, 9–1–34		23		25
5.500%, 10–1–34		549		615
5.500%, 7–1–35		201		220
5.000%, 8–1–35		276		300
5.500%, 10–1–35		190		213
5.000%, 11–1–35		572		622

UNITED STATES GOVERNMENT AGENCY OBLIGATIONS (Continued)	Principal		Value
Mortgage–Backed Obligations (Continued)
5.000%, 12–1–35	$	182	$	198
6.500%, 7–1–36		209		237
7.000%, 12–1–37		357		413
5.500%, 2–1–39		1,368		1,509
5.000%, 11–1–39		338		377
5.000%, 1–1–40		1,987		2,204
5.000%, 3–1–40		2,854		3,188
5.000%, 4–1–40		814		896
5.000%, 8–1–40		745		834
4.000%, 10–1–40		1,654		1,839
4.000%, 11–1–40		1,419		1,582
4.000%, 2–1–41		2,745		3,022
4.000%, 3–1–41		899		1,000
4.500%, 3–1–41		878		962
4.500%, 4–1–41		2,188		2,429
4.000%, 6–1–41		912		1,014
4.000%, 11–1–41		7,513		8,229
3.500%, 1–1–42		2,888		3,144
Federal Home Loan Mortgage Corporation Fixed RateParticipation Certificates:
4.500%, 1–1–41		1,788		1,982
4.500%, 4–1–41		1,847		2,089
4.000%, 10–1–41 TBA		1,400		1,505
3.500%, 3–1–42		2,942		3,178
3.000%, 8–1–42		1,997		2,110
3.500%, 8–1–42		4,984		5,369
Federal National Mortgage Association Fixed Rate Pass-Through Certificates:
6.000%, 9–1–17		29		32
6.000%, 1–1–18		113		123
5.500%, 2–1–18		106		116
5.500%, 3–1–18		22		24
5.000%, 5–1–18		396		438
5.000%, 6–1–18		96		105
5.000%, 7–1–18		41		46
5.000%, 10–1–18		296		323
5.500%, 9–1–19		89		97
5.000%, 7–1–23		439		487
6.000%, 8–1–23		442		488
5.500%, 2–1–24		159		176
4.500%, 4–1–25		895		968
3.500%, 11–1–25		825		896
3.500%, 6–1–26		1,650		1,772
3.500%, 10–1–26 TBA		125		133
3.000%, 10–1–27		2,410		2,553
6.000%, 8–1–29		135		153
7.500%, 5–1–31		37		45
4.000%, 8–20–31		1,006		1,103
7.000%, 9–1–31		16		19
7.000%, 11–1–31		157		184
6.500%, 12–1–31		19		22
6.500%, 2–1–32		194		222
7.000%, 2–1–32		143		168
7.000%, 3–1–32		218		255
6.500%, 4–1–32		40		46
3.500%, 5–1–32		2,164		2,329
6.500%, 5–1–32		97		111
6.500%, 7–1–32		27		31
6.500%, 8–1–32		42		48
6.000%, 9–1–32		55		62

UNITED STATES GOVERNMENT AGENCY OBLIGATIONS (Continued)	Principal		Value
Mortgage–Backed Obligations (Continued)
6.500%, 9–1–32	$	97	$	111
6.000%, 10–1–32		878		996
6.500%, 10–1–32		92		106
6.000%, 11–1–32		620		703
6.000%, 3–1–33		1,032		1,170
5.500%, 4–1–33		761		867
6.000%, 4–1–33		73		83
5.500%, 5–1–33		134		148
6.000%, 6–1–33		487		551
6.500%, 8–1–33		25		29
6.000%, 10–1–33		93		106
6.000%, 12–1–33		190		216
5.500%, 1–1–34		259		287
5.500%, 1–1–34		241		268
6.000%, 1–1–34		149		169
5.000%, 3–1–34		943		1,035
5.000%, 3–1–34		111		121
5.500%, 3–1–34		88		100
5.500%, 4–1–34		216		242
5.000%, 5–1–34		61		67
6.000%, 8–1–34		263		298
5.500%, 9–1–34		498		567
6.000%, 9–1–34		279		314
6.500%, 9–1–34		361		413
4.500%, 10–1–34 TBA		2,145		2,321
5.500%, 11–1–34		924		1,023
6.000%, 11–1–34		387		435
6.500%, 11–1–34		22		25
5.000%, 12–1–34		1,574		1,730
5.500%, 1–1–35		735		826
5.500%, 1–1–35		147		167
5.500%, 2–1–35		1,403		1,597
6.500%, 3–1–35		426		492
5.000%, 4–1–35		303		331
5.500%, 4–1–35		473		528
4.500%, 5–1–35		844		918
5.500%, 6–1–35		30		33
4.500%, 7–1–35		728		792
5.000%, 7–1–35		1,825		2,004
5.000%, 7–1–35		403		443
5.500%, 7–1–35		263		294
5.500%, 8–1–35		33		37
5.500%, 10–1–35		809		926
5.500%, 11–1–35		684		755
5.500%, 12–1–35		675		745
5.000%, 2–1–36		186		203
5.500%, 2–1–36		631		684
6.500%, 2–1–36		236		269
6.500%, 6–1–36		444		507
5.500%, 9–1–36		768		848
5.500%, 11–1–36		399		438
6.000%, 11–1–36		248		275
6.500%, 11–1–36		743		846
6.000%, 1–1–37		178		199
6.000%, 5–1–37		371		419
5.500%, 6–1–37		137		157
6.000%, 8–1–37		319		356
6.000%, 9–1–37		227		256
7.000%, 10–1–37		45		53
5.500%, 3–1–38		537		602
5.000%, 4–1–38		643		733
5.500%, 5–1–38		566		621
6.000%, 10–1–38		1,137		1,269

14 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

UNITED STATES GOVERNMENT AGENCY OBLIGATIONS (Continued)	Principal		Value
Mortgage–Backed Obligations (Continued)
6.000%, 12–1–38	$	506	$	569
4.500%, 6–1–39		380		422
5.000%, 12–1–39		771		878
5.500%, 12–1–39		794		886
5.000%, 3–1–40		2,137		2,389
6.000%, 6–1–40		710		786
4.500%, 10–1–40		1,681		1,824
4.000%, 12–1–40		2,568		2,822
4.000%, 1–15–41		1,672		1,848
3.500%, 4–1–41		2,822		3,046
4.000%, 4–1–41		2,005		2,210
4.500%, 4–1–41		2,451		2,719
5.000%, 4–1–41		459		520
4.500%, 7–1–41		2,580		2,827
4.000%, 8–1–41		2,248		2,426
4.000%, 9–1–41		2,774		3,049
3.500%, 10–1–41 TBA		2,440		2,616
4.000%, 10–1–41 TBA		7,865		8,531
3.500%, 11–1–41		5,376		5,824
3.500%, 1–1–42		1,432		1,546
3.000%, 3–1–42		1,947		2,057
3.000%, 8–1–42		996		1,054
3.000%, 9–1–42		3,000		3,173
3.000%, 10–1–42		4,880		5,149
Federal National Mortgage Association Non-Agency REMIC/CMO, 4.500%, 7–25–24		1,875		2,051
Government National Mortgage Association Agency REMIC/CMO:
0.426%, 3–16–34 (B)(C)		2,897		33
0.643%, 7–16–40 (B)(C)		799		16
0.000%, 3–16–42 (B)(C)(D)		759		—	*
1.002%, 6–17–45 (B)(C)		8,921		166
Government National Mortgage Association Fixed Rate Pass-Through Certificates:
6.250%, 7–15–24		111		128
5.000%, 7–15–33		428		475
5.000%, 7–15–34		353		392
5.500%, 12–15–34		484		541
5.000%, 1–15–35		576		638
5.000%, 12–15–35		794		881
4.000%, 6–20–36		1,326		1,467
5.500%, 7–15–38		467		522
5.500%, 10–15–38		402		451
5.500%, 2–15–39		316		354
5.000%, 12–15–39		248		276
5.000%, 1–15–40		2,230		2,503
4.500%, 6–15–40		905		1,006

UNITED STATES GOVERNMENT AGENCY OBLIGATIONS (Continued)	Principal		Value
Mortgage–Backed Obligations (Continued)
5.000%, 7–15–40	$	776	$	860
4.000%, 12–20–40		906		1,016
4.000%, 8–1–41		913		1,000
4.000%, 10–15–41		945		1,055
United States Department of Veterans Affairs, Guaranteed REMIC Pass–Through Certificates, Vendee Mortgage Trust, 1995-1 Class 1, 7.211%, 2–15–25 (B)		119		140
United States Department of Veterans Affairs, Guaranteed REMIC Pass-Through Certificates, Vendee Mortgage Trust, 1995-1 Class 2, 7.793%, 2–15–25		36		43
				180,326
TOTAL UNITED STATES GOVERNMENT AGENCY OBLIGATIONS – 31.6%			$	180,630
(Cost: $174,066)
UNITED STATES GOVERNMENT OBLIGATIONS
Treasury Obligations – 10.5%
United States Treasury Bonds:
5.375%, 2–15–31 (E)		1,775		2,569
3.000%, 5–15–42		18,940		19,667
United States Treasury Notes:
1.875%, 7–15–13		1,372		1,413
0.250%, 8–31–14		2,215		2,216
0.250%, 9–15–15		7,055		7,043
0.625%, 8–31–17		2,455		2,457
1.000%, 8–31–19		12,915		12,891
1.625%, 8–15–22		11,664		11,655
				59,911
TOTAL UNITED STATES GOVERNMENT OBLIGATIONS –10.5%			$	59,911
(Cost: $59,017)

SHORT-TERM SECURITIES	Principal		Value
Commercial Paper – 8.8%
CVS Caremark Corporation, 0.330%, 10–1–12 (F)	$	3,800	$	3,800
Fannie Mae Discount Notes, 0.130%, 12–19–12 (F)		5,000		4,999
Freddie Mac Discount Notes, 0.090%, 10–29–12 (F)		850		850
Harley–Davidson Funding Corp. (GTD by Harley-Davidson, Inc.), 0.310%, 10–11–12 (F)		10,000		9,999
Heinz (H.J.) Finance Co. (GTD by Heinz (H.J.) Co.), 0.290%, 10–24–12 (F)		5,000		4,999
Medtronic, Inc.,
0.130%, 10–26–12 (F)		5,000		4,999
Straight-A Funding, LLC (GTD by Federal Financing Bank), 0.160%, 11–13–12 (F)		3,000		2,999
Total Capital Canada Ltd. (GTD by Total S.A.), 0.140%, 11–6–12 (F)		10,000		9,999
United Technologies Corporation, 0.110%, 10–22–12 (F)		5,000		5,000
Wisconsin Electric Power Co., 0.200%, 10–1–12 (F)		2,800		2,800
				50,444
Master Note – 0.3%
Toyota Motor Credit Corporation, 0.122%, 10–5–12 (G)		1,941		1,941
Municipal Obligations – Taxable – 0.1%
MS Business Fin Corp, Gulf Opp Zone Indl Dev Var Rev Bonds (Chevron U.S.A. Inc. Proj), Ser E (GTD by Chevron Corporation), 0.190%, 10–1–12 (G)		434		434
TOTAL SHORT-TERM SECURITIES – 9.2%			$	52,819
(Cost: $52,819)
TOTAL INVESTMENT SECURITIES – 104.6%			$	598,332
(Cost: $584,789)
LIABILITIES, NET OF CASH AND OTHER ASSETS – (4.6%)				(26,124	)
NET ASSETS – 100.0%			$	572,208

2012 SEMIANNUAL REPORT 15

SCHEDULE OF INVESTMENTS

Ivy Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

Notes to Schedule of Investments

* Not shown due to rounding.

(A) Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2012, the total value of these securities amounted to $77,246 or 13.5% of net assets.

(B) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012.

(C) Interest-only security. Amount shown as principal represents notional amount for computation of interest.

(D) Zero coupon bond.

(E) All or a portion of the security position has been pledged as collateral on open futures contracts.

(F) Rate shown is the yield to maturity at September 30, 2012.

(G) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

The following futures contracts were outstanding at September 30, 2012 (contracts unrounded):

Description	Type	Expiration Date	Number of Contracts		Market Value			Unrealized Appreciation (Depreciation)
U.S. 10 Year Treasury Note	Short	12-19-12		147	$	(19,622	)	$	(110	)
U.S. 30 Year Treasury Bond	Short	12-19-12		65		(9,709	)		24
U.S. 5 Year Treasury Note	Long	12-31-12		141		17,573			71
					$	(11,758	)	$	(15	)

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Preferred Stocks	$	57	$	—	$	—
Asset-Backed Securities		—		30,287		12,572
Corporate Debt Securities		—		208,626		3,200
Mortgage-Backed Securities		—		36,700		3,506
Municipal Bonds		—		10,024		—
United States Government Agency Obligations		—		180,630		—	*
United States Government Obligations		—		59,911		—
Short-Term Securities		—		52,819		—
Total	$	57	$	578,997	$	19,278
Futures Contracts	$	95	$	—	$	—
Liabilities
Futures Contracts	$	110	$	—	$	—

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

	Asset-Backed Securities			Corporate Debt Securities			Mortgage- Backed Securities
Beginning Balance 4-1-12	$	8,414		$	6,368		$	5,196
Net realized gain (loss)		(6	)		—			(660	)
Net change in unrealized appreciation (depreciation)		241			85			1,032
Purchases		4,262			—			—
Sales		(339	)		(149	)		(669	)
Transfers into Level 3 during the period		—			—			1,204
Transfers out of Level 3 during the period		—			(3,104	)		(2,597	)
Ending Balance 9-30-12	$	12,572		$	3,200		$	3,506
Net change in unrealized appreciation (depreciation) for all Level 3 investments still held as of 9-30-12	$	241		$	85		$	309

16 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

Quantitative Information about Level 3 fair value measurements:

	Fair Value at 9-30-12	Valuation Technique(s)	Unobservable Input(s)	Input Value(s)
Assets
Asset-Backed Securities	$12,572	Third-party vendor pricing service	Vendor quotes	98.00- 114.25%
Corporate Debt Securities	3,200	Third-party vendor pricing service	Vendor quotes	102.50- 115.25%
Mortgage-Backed Securities	3,506	Third-party vendor pricing service	Vendor quotes	0.00- 100.38%

The following acronyms are used throughout this schedule:

CMO = Collateralized Mortgage Obligation

GTD = Guaranteed

REIT = Real Estate Investment Trust

REMIC = Real Estate Mortgage Investment Conduit

TBA = To Be Announced

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 17

PORTFOLIO HIGHLIGHTS

Ivy Core Equity Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	98.7%
Consumer Discretionary	24.6%
Industrials	16.0%
Consumer Staples	15.2%
Information Technology	14.7%
Financials	7.5%
Health Care	6.7%
Energy	6.6%
Materials	5.0%
Telecommunication Services	2.4%
Cash and Cash Equivalents	1.3%

Lipper Rankings

Category: Lipper Large-Cap Core Funds	Rank	Percentile
1 Year	117/940	13
3 Year	58/861	7
5 Year	46/756	7
10 Year	87/497	18

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Top 10 Equity Holdings

Company	Sector
Apple Inc.	Information Technology
Capital One Financial Corporation	Financials
General Electric Company	Industrials
CBS Corporation, Class B	Consumer Discretionary
Precision Castparts Corp.	Industrials
Philip Morris International Inc.	Consumer Staples
Pall Corporation	Industrials
Union Pacific Corporation	Industrials
Anheuser-Busch InBev S.A., ADR	Consumer Staples
Harley-Davidson, Inc.	Consumer Discretionary

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

18 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Core Equity Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Aerospace & Defense – 4.3%
Honeywell International Inc.		65	$	3,878
Precision Castparts Corp.		76		12,479
				16,357
Apparel, Accessories & Luxury Goods – 3.2%
Polo Ralph Lauren Corporation		36		5,459
Under Armour, Inc., Class A (A)		120		6,683
				12,142
Application Software – 1.4%
Intuit Inc.		92		5,429
Biotechnology – 1.3%
Alexion Pharmaceuticals, Inc. (A)		42		4,805
Brewers – 3.0%
Anheuser-Busch InBev S.A., ADR (A)		134		11,486
Broadcasting – 5.2%
CBS Corporation, Class B		359		13,034
Discovery Holding Company, Class A (A)		117		6,947
				19,981
Cable & Satellite – 3.9%
Charter Communications, Inc., Class A (A)		57		4,264
Time Warner Cable Inc.		116		11,017
				15,281
Computer Hardware – 6.5%
Apple Inc. (A)		37		24,422
Consumer Finance – 4.6%
Capital One Financial Corporation		311		17,707
Data Processing & Outsourced Services –2.5%
MasterCard Incorporated, Class A		21		9,346
Department Stores – 0.3%
J. C. Penney Company, Inc.		43		1,052
Distillers & Vintners – 1.5%
Beam Inc.		96		5,524
Diversified Chemicals – 1.1%
Dow Chemical Company (The)		144		4,164
Fertilizers & Agricultural Chemicals – 2.6%
Monsanto Company		111		10,113
Food Retail – 1.3%
Whole Foods Market, Inc.		52		5,084

COMMON STOCKS (Continued)	Shares		Value
General Merchandise Stores – 1.9%
Target Corporation		111	$	7,064
Health Care Equipment – 1.5%
Covidien plc		95		5,627
Home Improvement Retail – 2.0%
Home Depot, Inc. (The)		123		7,450
Household Products – 0.8%
Church & Dwight Co., Inc.		59		3,196
Hypermarkets & Super Centers – 1.4%
Costco Wholesale Corporation		53		5,257
Industrial Conglomerates – 3.4%
General Electric Company		577		13,097
Industrial Machinery – 3.7%
Pall Corporation		187		11,853
Pentair, Inc.		45		2,021
				13,874
Integrated Telecommunication Services –2.4%
AT&T Inc.		239		9,007
Internet Retail – 2.6%
Amazon.com, Inc. (A)		38		9,766
Internet Software & Services – 1.5%
Google Inc., Class A (A)		8		5,885
Leisure Products – 0.8%
Polaris Industries Inc.		39		3,146
Motorcycle Manufacturers – 3.0%
Harley-Davidson, Inc.		270		11,452
Movies & Entertainment – 1.7%
News Corporation Limited, Class B		265		6,574
Oil & Gas Equipment & Services – 2.6%
National Oilwell Varco, Inc.		50		3,965
Schlumberger Limited		81		5,895
				9,860
Oil & Gas Exploration & Production – 2.6%
ConocoPhillips		66		3,768
Noble Energy, Inc.		66		6,128
				9,896
Oil & Gas Refining & Marketing – 1.4%
Phillips 66		113		5,242
Other Diversified Financial Services – 2.9%
JPMorgan Chase & Co.		271		10,957
Packaged Foods & Meats – 2.2%
Mead Johnson Nutrition Company		112		8,237

COMMON STOCKS (Continued)	Shares		Value
Personal Products – 1.8%
Estee Lauder Companies, Inc. (The), Class A		113	$	6,954
Pharmaceuticals – 3.9%
Allergan, Inc.		51		4,692
Pfizer Inc.		411		10,203
				14,895
Railroads – 4.6%
Kansas City Southern		75		5,653
Union Pacific Corporation		99		11,707
				17,360
Semiconductors – 2.8%
Altera Corporation		202		6,861
Microchip Technology Incorporated		115		3,775
				10,636
Specialty Chemicals – 1.3%
Sherwin-Williams Company (The)		33		4,899
Tobacco – 3.2%
Philip Morris International Inc.		132		11,887
TOTAL COMMON STOCKS – 98.7%			$	375,111
(Cost: $290,412)
SHORT-TERM SECURITIES	Principal
Master Note – 1.0%
Toyota Motor Credit Corporation, 0.122%, 10-5-12 (B)	$	3,955		3,955
TOTAL SHORT-TERM SECURITIES – 1.0%			$	3,955
(Cost: $3,955)
TOTAL INVESTMENT SECURITIES – 99.7%			$	379,066
(Cost: $294,367)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 0.3%				992
NET ASSETS – 100.0%			$	380,058

2012 SEMIANNUAL REPORT 19

SCHEDULE OF INVESTMENTS

Ivy Core Equity Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

Notes to Schedule of Investments

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

(B) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks
Consumer Discretionary	$	93,908	$	—	$	—
Consumer Staples		57,625		—		—
Energy		24,998		—		—
Financials		28,664		—		—
Health Care		25,327		—		—
Industrials		60,688		—		—
Information Technology		55,718		—		—
Materials		19,176		—		—
Telecommunication Services		9,007		—		—
Total Common Stocks	$	375,111	$	—	$	—
Short-Term Securities		—		3,955		—
Total	$	375,111	$	3,955	$	—

The following acronyms are used throughout this schedule:

ADR = American Depositary Receipts

See Accompanying Notes to Financial Statements.

20 SEMIANNUAL REPORT 2012

PORTFOLIO HIGHLIGHTS

Ivy Cundill Global Value Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	90.1%
Financials	34.1%
Consumer Discretionary	16.5%
Information Technology	15.3%
Energy	8.2%
Industrials	6.5%
Health Care	6.0%
Consumer Staples	3.5%
Warrants	2.0%
Bonds	0.0%
Other Government Securities	0.0%
Cash and Cash Equivalents	7.9%

Lipper Rankings

Category: Lipper Global Multi-Cap Value Funds	Rank	Percentile
1 Year	47/67	70
3 Year	45/59	75
5 Year	28/47	59
10 Year	16/22	70

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Country Weightings

North America	45.4%
United States	41.8%
Canada	3.6%
Europe	28.2%
France	6.3%
Germany	5.7%
Italy	4.2%
Switzerland	3.5%
Other Europe	8.5%
Pacific Basin	18.2%
Japan	12.1%
Hong Kong	3.6%
Other Pacific Basin	2.5%
South America	0.3%
Cash and Cash Equivalents	7.9%

Top 10 Equity Holdings

Company	Country	Sector	Industry
Bank of America Corporation	United States	Financials	Other Diversified Financial Services
American International Group, Inc.	United States	Financials	Multi-Line Insurance
Microsoft Corporation	United States	Information Technology	Systems Software
Citigroup Inc.	United States	Financials	Other Diversified Financial Services
Honda Motor Co., Ltd.	Japan	Consumer Discretionary	Automobile Manufacturers
GameStop Corp, Class A	United States	Consumer Discretionary	Computer & Electronics Retail
EXOR S.p.A.	Italy	Financials	Multi-Sector Holdings
Sega Sammy Holdings Inc.	Japan	Consumer Discretionary	Leisure Products
Chesapeake Energy Corporation, 5.750% Cumulative	United States	Energy	Oil & Gas Exploration & Production
First Pacific Company Limited	Hong Kong	Financials	Multi-Sector Holdings

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

2012 SEMIANNUAL REPORT 21

SCHEDULE OF INVESTMENTS

Ivy Cundill Global Value Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Australia – 2.5%
Primary Health Care Limited		1,429	$	5,367
Belgium – 2.8%
ageas N.V. (A)		251		6,024
Brazil – 0.3%
HRT Participacoes Em Petroleo S.A. (A)		284		630
Canada – 3.6%
EnCana Corporation		207		4,529
Fairfax Financial Holdings Limited		8		3,096
				7,625
Finland – 1.0%
Nokia OYJ		839		2,166
France – 6.3%
Carrefour S.A.		365		7,570
Compagnie Generale des Etablissements Michelin, Class B		77		6,032
				13,602
Germany – 5.7%
Deutsche Lufthansa Aktiengesellschaft		508		6,894
Munchener Ruckversicherungs-Gesellschaft AG, Registered Shares		35		5,425
				12,319
Greece – 0.5%
Intralot S.A. Integrated Lottery Systems and Services		626		1,063
Hong Kong – 3.6%
First Pacific Company Limited		7,063		7,679
Henderson Land Development Company Limited		2		14
				7,693
Italy – 4.2%
EXOR S.p.A.		360		9,057
Japan – 12.1%
Canon Inc.		94		2,999
Honda Motor Co., Ltd.		332		10,188
Nintendo Co., Ltd.		33		4,144
Sega Sammy Holdings Inc.		456		8,661
				25,992
Netherlands – 2.5%
TNT N.V. (A)		1,529		5,326
Switzerland – 3.5%
Actelion Ltd		150		7,526

COMMON STOCKS (Continued)	Shares		Value
United Kingdom – 1.7%
BP plc, ADR		84	$	3,578
United States – 35.9%
American International Group, Inc. (A)		447		14,657
Bank of America Corporation		1,685		14,875
Citigroup Inc.		383		12,534
Dell Inc.		701		6,913
FedEx Corporation		21		1,755
GameStop Corp, Class A		434		9,120
Hewlett-Packard Company		242		4,136
Liberty Ventures Group, Series A (A)		2		119
Microsoft Corporation		428		12,740
				76,849
TOTAL COMMON STOCKS – 86.2%			$	184,817
(Cost: $186,299)
PREFERRED STOCKS – 3.9%
United States – 3.9%
Chesapeake Energy Corporation, 5.750% Cumulative (B)		9	$	8,476
(Cost: $9,176)
WARRANTS – 2.0%
United States – 2.0%
JPMorgan Chase & Co., Expires 10–28–18 (C)		409	$	4,204
(Cost: $5,192)
OTHER GOVERNMENT SECURITIES	Principal
Greece – 0.0%
Hellenic Republic:
2.000%, 2–24–23 (D)		EUR18		7
2.000%, 2–24–24 (D)		18		6
2.000%, 2–24–25 (D)		18		5
2.000%, 2–24–26 (D)		18		5
2.000%, 2–24–27 (D)		18		5
2.000%, 2–24–28 (D)		19		5
2.000%, 2–24–29 (D)		19		5
2.000%, 2–24–30 (D)		19		5
2.000%, 2–24–31 (D)		19		5
2.000%, 2–24–32 (D)		19		5
2.000%, 2–24–33 (D)		19		5
2.000%, 2–24–34 (D)		19		5
2.000%, 2–24–35 (D)		19		4
2.000%, 2–24–36 (D)		19		4
2.000%, 2–24–37 (D)		19		4
2.000%, 2–24–38 (D)		19		4
2.000%, 2–24–39 (D)		19		4
2.000%, 2–24–40 (D)		19		4
2.000%, 2–24–41 (D)		19		4

OTHER GOVERNMENT SECURITIES (Continued)	Principal		Value
Greece (Continued)
2.000%, 2–24–42 (D)		EUR19	$	4
0.000%, 10–15–42 (D)(E)		378		3
				98
TOTAL OTHER GOVERNMENT SECURITIES – 0.0%			$	98
(Cost: $82)
SHORT-TERM SECURITIES
Commercial Paper – 5.8%
Fannie Mae Discount Notes, 0.120%, 12–20–12 (F)	$	1,600		1,600
Freddie Mac Discount Notes:
0.100%, 10–9–12 (F)		500		500
0.090%, 10–29–12 (F)		1,100		1,100
0.130%, 12–18–12 (F)		2,500		2,499
Straight-A Funding, LLC (GTD by Federal Financing Bank):
0.130%, 10–17–12 (F)		5,400		5,399
0.160%, 11–13–12 (F)		1,550		1,550
				12,648
Treasury Bills – 0.7%
United States Treasury Bills, 0.140%, 11–1–12		1,400		1,400
United States Government Agency Obligations – 1.4%
Overseas Private Investment Corporation (GTD by United States Government), 0.170%, 10–3–12 (G)		3,000		3,000
TOTAL SHORT-TERM SECURITIES – 7.9%			$	17,048
(Cost: $17,048)
TOTAL INVESTMENT SECURITIES – 100.0%			$	214,643
(Cost: $217,797)
LIABILITIES, NET OF CASH AND OTHER ASSETS – 0.0%				(57	)
NET ASSETS – 100.0%			$	214,586

22 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Cundill Global Value Fund (in thousands)

SEPTEMBER 30, 2012

Notes to Schedule of Investments

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

(B) Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2012, the total value of these securities amounted to $8,476 or 3.9% of net assets.

(C) Warrants entitle the Fund to purchase a predetermined number of shares of common stock and are non-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date, if any.

(D) Principal amounts are denominated in the indicated foreign currency, where applicable (EUR - Euro).

(E) Zero coupon bond.

(F) Rate shown is the yield to maturity at September 30, 2012.

(G) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date the variable rate resets.

The following forward foreign currency contracts were outstanding at September 30, 2012:

Type	Currency	Counterparty	Principal Amount of Contract (Denominated in Indicated Currency)		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
Sell	Japanese Yen	Canadian Imperial Bank of Commerce		613,159		11-7-12	$	—	$	159
Sell	Japanese Yen	Toronto-Dominion Bank (The)		624,000		11-28-12		—		154
Sell	Japanese Yen	Royal Bank of Canada		606,300		2-6-13		6		—
							$	6	$	313

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks
Consumer Discretionary	$	35,183	$	—	$	—
Consumer Staples		7,570		—		—
Energy		8,737		—		—
Financials		73,362		—		—
Health Care		12,893		—		—
Industrials		13,975		—		—
Information Technology		33,097		—		—
Total Common Stocks	$	184,817	$	—	$	—
Preferred Stocks		—		8,476		—
Warrants		4,204		—		—
Other Government Securities		—		98		—
Short-Term Securities		—		17,048		—
Total	$	189,021	$	25,622	$	—
Forward Foreign Currency Contracts	$	—	$	6	$	—
Liabilities
Forward Foreign Currency Contracts	$	—	$	313	$	—

The following acronyms are used throughout this schedule:

ADR = American Depositary Receipts

GTD = Guaranteed

Market Sector Diversification
(as a % of net assets)
Financials	36.1	%
Consumer Discretionary	16.5	%
Information Technology	15.3	%
Energy	8.2	%

Industrials	6.5	%
Health Care	6.0	%
Consumer Staples	3.5	%
Other Government Securities	0.0	%
Other+	7.9	%

+Includes cash and cash equivalents and other assets and liabilities

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 23

PORTFOLIO HIGHLIGHTS

Ivy Dividend Opportunities Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	97.0%
Industrials	15.0%
Energy	14.1%
Financials	13.7%
Consumer Discretionary	13.4%
Consumer Staples	12.9%
Information Technology	11.0%
Health Care	8.5%
Materials	5.4%
Telecommunication Services	2.0%
Utilities	1.0%
Cash and Cash Equivalents	3.0%

Lipper Rankings

Category: Lipper Equity Income Funds	Rank	Percentile
1 Year	35/294	12
3 Year	219/243	90
5 Year	170/210	81

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Top 10 Equity Holdings

Company	Sector
Philip Morris International Inc.	Consumer Staples
Apple Inc.	Information Technology
JPMorgan Chase & Co.	Financials
Schlumberger Limited	Energy
Microchip Technology Incorporated	Information Technology
Union Pacific Corporation	Industrials
Home Depot, Inc. (The)	Consumer Discretionary
General Electric Company	Industrials
Goldman Sachs Group, Inc. (The)	Financials
Exxon Mobil Corporation	Energy

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

24 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Dividend Opportunities Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Aerospace & Defense – 3.8%
Boeing Company (The)		112	$	7,822
Honeywell International Inc.		90		5,398
				13,220
Apparel, Accessories & Luxury Goods – 0.5%
V.F. Corporation		12		1,849
Brewers – 2.3%
Anheuser-Busch InBev S.A., ADR (A)		96		8,260
Broadcasting – 0.6%
CBS Corporation, Class B		62		2,238
Casinos & Gaming – 2.1%
Las Vegas Sands, Inc.		78		3,596
Wynn Resorts, Limited		33		3,807
				7,403
Computer Hardware – 3.8%
Apple Inc. (A)		20		13,645
Construction & Farm Machinery & Heavy Trucks – 3.5%
Caterpillar Inc.		40		3,459
Cummins Inc.		11		996
Deere & Company		94		7,766
				12,221
Consumer Finance – 1.7%
Capital One Financial Corporation		104		5,901
Data Processing & Outsourced Services – 3.3%
Paychex, Inc.		103		3,434
Visa Inc., Class A		60		8,030
				11,464
Department Stores – 0.5%
Macy’s Inc.		46		1,723
Distillers & Vintners – 2.1%
Diageo plc, ADR		65		7,288
Diversified Banks – 2.0%
Wells Fargo & Company		207		7,130
Diversified Chemicals – 1.0%
Dow Chemical Company (The)		116		3,362
Diversified Metals & Mining – 1.9%
Freeport-McMoRan Copper & Gold Inc., Class B		83		3,303
Rio Tinto plc, ADR		75		3,516
				6,819
Fertilizers & Agricultural Chemicals – 2.5%
Monsanto Company		39		3,586
Mosaic Company (A)		88		5,050
				8,636

COMMON STOCKS (Continued)	Shares		Value
General Merchandise Stores – 1.1%
Target Corporation		61	$	3,849
Home Improvement Retail – 2.6%
Home Depot, Inc. (The)		154		9,309
Homebuilding – 3.1%
D.R. Horton, Inc.		308		6,365
M.D.C. Holdings, Inc.		106		4,076
				10,441
Household Products – 1.3%
Colgate-Palmolive Company		43		4,578
Industrial Conglomerates – 2.6%
General Electric Company		398		9,033
Industrial Machinery – 0.5%
Pall Corporation		28		1,778
Integrated Oil & Gas – 3.5%
Chevron Corporation		16		1,807
Exxon Mobil Corporation		96		8,788
Royal Dutch Petroleum Company, New York Shares		25		1,763
				12,358
Integrated Telecommunication Services – 2.0%
AT&T Inc.		191		7,199
Investment Banking & Brokerage – 2.5%
Goldman Sachs Group, Inc. (The)		78		8,856
Mortgage REITs – 1.5%
American Capital Agency Corp.		154		5,336
Multi-Utilities – 1.0%
PG&E Corporation		83		3,529
Oil & Gas Drilling – 2.5%
Seadrill Limited		222		8,699
Oil & Gas Equipment & Services – 6.9%
Halliburton Company		108		3,625
National Oilwell Varco, Inc.		107		8,560
Schlumberger Limited		172		12,415
				24,600
Oil & Gas Storage & Transportation – 1.2%
MarkWest Energy Partners, L.P.		75		4,076
Other Diversified Financial Services – 3.8%
JPMorgan Chase & Co.		328		13,289

COMMON STOCKS (Continued)	Shares		Value
Pharmaceuticals – 8.5%
Bristol-Myers Squibb Company		123	$	4,143
Eli Lilly & Co		38		1,799
GlaxoSmithKline plc, ADR		94		4,330
Johnson & Johnson		98		6,770
Merck & Co., Inc.		89		3,991
Pfizer Inc.		352		8,737
				29,770
Property & Casualty Insurance – 1.2%
ACE Limited		55		4,188
Railroads – 4.6%
Kansas City Southern		67		5,073
Union Pacific Corporation		94		11,177
				16,250
Restaurants – 2.9%
McDonald’s Corporation		77		7,097
Starbucks Corporation		63		3,174
				10,271
Semiconductors – 3.9%
Intel Corporation		88		2,004
Microchip Technology Incorporated		354		11,595
				13,599
Soft Drinks – 1.0%
Coca-Cola Company (The)		93		3,541
Specialized Finance – 1.0%
CME Group Inc.		59		3,395
Tobacco – 6.2%
Altria Group, Inc.		215		7,194
Philip Morris International Inc.		161		14,516
				21,710
TOTAL COMMON STOCKS – 97.0%			$	340,813
(Cost: $260,350)
SHORT-TERM SECURITIES	Principal
Commercial Paper – 1.9%
Ecolab Inc., 0.340%, 10–4–12 (B)	$	4,000		4,000
Wisconsin Electric Power Co., 0.200%, 10–1–12 (B)		2,830		2,830
				6,830
Master Note – 1.0%
Toyota Motor Credit Corporation, 0.122%, 10–5–12 (C)		3,638		3,638

2012 SEMIANNUAL REPORT 25

SCHEDULE OF INVESTMENTS

Ivy Dividend Opportunities Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

SHORT-TERM SECURITIES (Continued)	Principal		Value
Municipal Obligations – Taxable – 0.3%
CA Statewide Cmnty Dev Auth, Multifam Hsng Rev Bonds (1030 Post Street Apts ), Ser 2005 Y, 0.180%, 10–4–12 (C)	$	957	$	957
TOTAL SHORT-TERM SECURITIES – 3.2%			$	11,425
(Cost: $11,425)
TOTAL INVESTMENT SECURITIES – 100.2%			$	352,238
(Cost: $271,775)
LIABILITIES, NET OF CASH AND OTHER ASSETS – (0.2%)				(695	)
NET ASSETS – 100.0%			$	351,543

Notes to Schedule of Investments

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

(B) Rate shown is the yield to maturity at September 30, 2012.

(C) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks	$	340,813	$	—	$	—
Short-Term Securities		—		11,425		—
Total	$	340,813	$	11,425	$	—

The following acronyms are used throughout this schedule:

ADR = American Depositary Receipts

REIT = Real Estate Investment Trust

See Accompanying Notes to Financial Statements.

26 SEMIANNUAL REPORT 2012

PORTFOLIO HIGHLIGHTS

Ivy European Opportunities Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	92.0%
Consumer Staples	13.0%
Information Technology	12.9%
Industrials	11.3%
Energy	11.2%
Financials	11.0%
Health Care	11.0%
Consumer Discretionary	10.8%
Materials	6.6%
Telecommunication Services	4.2%
Purchased Options	0.0%
Cash and Cash Equivalents	8.0%

Lipper Rankings

Category: Lipper European Region Funds	Rank	Percentile
1 Year	42/109	39
3 Year	48/95	50
5 Year	65/85	76
10 Year	19/68	28

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Country Weightings

Europe	88.6%
United Kingdom	26.2%
Germany	20.3%
France	13.7%
Switzerland	10.8%
Italy	4.0%
Other Europe	13.6%
North America	2.8%
Bahamas/Caribbean	0.6%
Cash and Cash Equivalents	8.0%

Top 10 Equity Holdings

Company	Country	Sector	Industry
Wirecard AG	Germany	Information Technology	Data Processing & Outsourced Services
Imperial Tobacco Group plc	United Kingdom	Consumer Staples	Tobacco
Vodafone Group plc	United Kingdom	Telecommunication Services	Wireless Telecommunication Service
Linde AG	Germany	Materials	Industrial Gases
Nestle S.A., Registered Shares	Switzerland	Consumer Staples	Packaged Foods & Meats
Bayer AG	Germany	Health Care	Pharmaceuticals
Ingenico S.A.	France	Information Technology	Electronic Equipment & Instruments
Dialog Semiconductor plc	Germany	Information Technology	Semiconductors
Saipem S.p.A.	Italy	Energy	Oil & Gas Equipment & Services
BG Group plc	United Kingdom	Energy	Integrated Oil & Gas

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

2012 SEMIANNUAL REPORT 27

SCHEDULE OF INVESTMENTS

Ivy European Opportunities Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Austria – 1.7%
Andritz AG		64	$	3,651
Bermuda – 0.6%
Lancashire Holdings Limited		100		1,330
France – 13.7%
Altran Technologies S.A. (A)		100		657
Arkema		15		1,404
Axa S.A.		63		931
BNP Paribas		25		1,188
Gemalto N.V.		50		4,398
Ingenico S.A.		100		5,140
LVMH Moet Hennessy – Louis Vuitton		10		1,504
Pernod Ricard		25		2,805
Remy Cointreau S.A.		15		1,725
Sanofi-Aventis		50		4,263
Schneider Electric S.A.		20		1,184
Vinci		100		4,259
				29,458
Germany – 18.3%
Bayer AG		60		5,153
Brenntag AG (B)		22		2,816
Dialog Semiconductor plc (A)		250		4,870
Fresenius SE & Co. KGaA (A)		30		3,482
Fresenius SE & Co. KGaA (A)(B)		7		842
Linde AG		33		5,683
Linde AG (A)(B)		7		1,205
Munchener Ruckversicherungs-Gesellschaft AG, Registered Shares		20		3,123
NORMA Group AG (B)		125		3,373
TOM TAILOR Holding AG		60		1,279
Wirecard AG (A)		300		6,889
Wirecard AG (A)(B)		30		689
				39,404
Ireland – 1.7%
Paddy Power plc		50		3,728
Italy – 4.0%
Brunello Cucinelli S.p.A. (A)(B)		220		3,802
Saipem S.p.A.		100		4,803
				8,605
Luxembourg – 1.7%
Acergy S.A.		163		3,763
Netherlands – 3.0%
ING Groep N.V., Certicaaten Van Aandelen (A)		500		3,951
Zesko B.V. (B)		75		2,550
				6,501

COMMON STOCKS (Continued)	Shares		Value
Norway – 1.8%
StatoilHydro ASA		151	$	3,889
Portugal – 1.7%
Galp Energia, SGPS, S.A., Class B		220		3,568
Russia – 1.4%
Sberbank (Savings Bank of the Russian Federation) (A)		1,000		2,925
Spain – 0.6%
Tecnicas Reunidas, S.A.		30		1,395
Switzerland – 10.8%
ARYZTA AG		66		3,140
BELIMO Holding AG, Registered Shares		1		1,202
Nestle S.A., Registered Shares		90		5,675
Roche Holdings AG, Genusscheine		23		4,297
Swatch Group Ltd (The), Bearer Shares		5		1,995
Swiss Re Ltd		60		3,856
Syngenta AG		8		2,990
				23,155
United Kingdom – 26.2%
ASOS plc (A)		60		2,129
AstraZeneca plc		30		1,432
Aurora Russia Limited (A)		1,557		613
Babcock International Group plc		150		2,245
BG Group plc		220		4,441
British American Tobacco plc		85		4,364
Compass Group plc		400		4,415
Diageo plc		70		1,966
Experian plc		230		3,822
Filtrona plc		100		832
GlaxoSmithKline plc		180		4,149
HSBC Holdings plc		141		1,304
IMI plc		100		1,453
Imperial Tobacco Group plc		180		6,664
Prudential plc		330		4,271
Rio Tinto plc		40		1,863
Royal Dutch Shell plc, Class A		70		2,421
Telecity Group plc		90		1,301
Vodafone Group plc		2,300		6,528
				56,213
United States – 2.8%
Apple Inc. (A)		7		4,337
InBev NV		20		1,701
				6,038
TOTAL COMMON STOCKS – 90.0%			$	193,623
(Cost: $155,896)

PREFERRED STOCKS– 2.0%	Shares		Value
Germany – 2.0%
Volkswagen AG, 2.260% (A)(B)		23	$	4,195
(Cost: $2,006)
PURCHASED OPTIONS – 0.0%	Number of Contracts (Unrounded)
DAX Index, Put EUR6800.00, Expires 10–19–12, OTC (Ctrpty: Citibank N.A.) (C)		537	$	82
(Cost: $654)
SHORT-TERM SECURITIES	Principal
Master Note – 1.5%
Toyota Motor Credit Corporation,
0.122%, 10–5–12 (D)	$	3,273		3,273
Municipal Obligations – Taxable – 2.0%
Santa Clara Cnty Fin Auth, Var Rate Rev Bonds, El Camino Hosp, Ser 2009A (GTD by Wells Fargo Bank, N.A.),
0.170%, 10–3–12 (D)		4,300		4,300
TOTAL SHORT-TERM SECURITIES – 3.5%			$	7,573
(Cost: $7,573)
TOTAL INVESTMENT SECURITIES – 95.5%			$	205,473
(Cost: $166,129)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 4.5%				9,641
NET ASSETS – 100.0%			$	215,114

28 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy European Opportunities Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

Notes to Schedule of Investments

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

(B) Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2012, the total value of these securities amounted to $19,472 or 9.1% of net assets.

(C) Principal amounts are denominated in the indicated foreign currency, where applicable (EUR - Euro).

(D) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date the variable rate resets.

The following written options were outstanding at September 30, 2012 (contracts and exercise prices unrounded):

Underlying Security

Counterparty, if OTC

Type

Number of Contracts

Expiration Month

Exercise Price

Premium Received

Market Value

DAX Index

Citibank N.A.

Put

537

October 2012

EUR6,100.00

$

180

$

(10

)

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks
Consumer Discretionary	$	18,851	$	—	$	—
Consumer Staples		28,039		—		—
Energy		24,279		—		—
Financials		22,879		613		—
Health Care		23,618		—		—
Industrials		24,006		—		—
Information Technology		28,282		—		—
Materials		13,978		—		—
Telecommunication Services		9,078		—		—
Total Common Stocks	$	193,010	$	613	$	—
Preferred Stocks		4,195		—		—
Purchased Options		—		82		—
Short-Term Securities		—		7,573		—
Total	$	197,205	$	8,268	$	—
Liabilities
Written Options	$	—	$	10	$	—

The following acronym is used throughout this schedule:

GTD = Guaranteed

Market Sector Diversification
(as a % of net assets)
Consumer Staples	13.0	%
Information Technology	12.9	%
Industrials	11.3	%
Energy	11.2	%
Financials	11.0	%
Health Care	11.0	%
Consumer Discretionary	10.8	%
Materials	6.6	%
Telecommunication Services	4.2	%
Other+	8.0	%

+ Includes options, cash and cash equivalents and other assets and liabilities

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 29

PORTFOLIO HIGHLIGHTS

Ivy Global Bond Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Bonds	94.2%
Corporate Debt Securities	66.7%
United States Government and Government Agency Obligations	22.8%
Other Government Securities	4.7%
Cash and Cash Equivalents and Equities	5.8%

Quality Weightings

Investment Grade	62.8	%
AA	23.0	%
A	6.8	%
BBB	33.0	%
Non-Investment Grade	31.4	%
BB	17.3	%
B	9.2	%
CCC	0.3	%
Non-rated	4.6	%
Cash and Cash Equivalents and Equities	5.8	%

Our preference is to always use ratings obtained from Standard & Poor’s. For securities not rated by Standard & Poor’s, ratings are obtained from Moody’s.

Lipper Rankings

Category: Lipper Global Income Funds	Rank	Percentile
1 Year	76/189	40
3 Year	102/137	74

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Country Weightings

North America	36.2%
United States	31.5%
Other North America	4.7%
South America	24.2%
Brazil	11.7%
Argentina	4.5%
Chile	3.5%
Other South America	4.5%
Europe	15.9%
Russia	5.8%
Luxembourg	3.9%
Other Europe	6.2%
Pacific Basin	14.6%
India	5.3%
Other Pacific Basin	9.3%
Other	4.1%
Cash and Cash Equivalents	5.0%

30 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Global Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Electric Utilities – 0.3%
PPL Corporation		21	$	614
Pharmaceuticals – 0.2%
GlaxoSmithKline plc (A)		22		496
Water Utilities – 0.3%
Aguas Andinas S.A. (A)		1,051		704
TOTAL COMMON STOCKS – 0.8%			$	1,814
(Cost: $1,704)
CORPORATE DEBT SECURITIES	Principal
Aerospace & Defense – 1.4%
Bombardier Inc., 7.500%, 3–15–18 (B)	$	1,200		1,359
Embraer Overseas Limited, 6.375%, 1–24–17		1,700		1,921
				3,280
Agricultural Products – 2.5%
CCL Finance Limited:
9.500%, 8–15–14		1,650		1,853
9.500%, 8–15–14 (B)		500		562
Corporacion Pesquera Inca S.A.C., 9.000%, 2–10–17		1,700		1,828
Virgolino de Oliveira Finance Limited, 10.500%, 1–28–18 (B)		1,825		1,807
				6,050
Air Freight & Logistics – 0.2%
FedEx Corporation, 7.375%, 1–15–14		500		542
Airlines – 1.7%
Aeropuertos Argentina 2000 S.A., 10.750%, 12–1–20 (B)		1,295		1,275
GOL Finance:
9.250%, 7–20–20		2,375		2,180
TAM Capital 2 Inc.:
9.500%, 1–29–20		525		581
				4,036
Alternative Carriers – 0.3%
PCCW-HKT Capital No. 2 Limited, 6.000%, 7–15–13		750		775
Asset Management & Custody Banks – 0.9%
Bhira Investments Limited, 8.500%, 4–27–71		2,100		2,130
Auto Parts & Equipment – 0.3%
Schaeffler Finance B.V., 7.750%, 2–15–17 (B)		750		829

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Brewers – 0.5%
Anheuser-Busch InBev Worldwide Inc., 3.000%, 10–15–12	$	750	$	751
Miller Brewing Company, 5.500%, 8–15–13		500		519
				1,270
Broadcasting – 1.8%
Globo Comunicacoe e Participacoes S.A.:
5.307%, 5–11–17 (C)		850		924
6.250%, 12–20–49 (C)		2,820		3,045
				3,969
Coal & Consumable Fuels – 2.3%
Indo Energy Finance B.V., 7.000%, 5–7–18 (B)		1,800		1,854
Indo Integrated Energy II B.V., 9.750%, 11–5–16		550		605
PT Adaro Indonesia:
7.625%, 10–22–19		1,845		2,030
7.625%, 10–22–19 (B)		1,000		1,100
				5,589
Construction & Engineering – 1.6%
Larsen & Toubro Limited, Convertible, 3.500%, 10–22–14		2,100		2,202
Odebrecht Drilling Norbe VII/IX Ltd., 6.350%, 6–30–21 (B)		509		573
Odebrecht Finance Ltd.:
7.500%, 10–18–17 (B)		500		521
7.500%, 10–18–17		500		521
				3,817
Construction Materials – 0.2%
Rearden G Holdings EINS GmbH, 7.875%, 3–30–20		365		402
Consumer Finance – 2.2%
Banco BMG S.A., 9.150%, 1–15–16		792		778
Banco Latinoamericano de Comercio Exterior, S.A., 3.750%, 4–4–17 (B)		3,700		3,839
VEB Finance Limited, 5.375%, 2–13–17 (B)		600		643
				5,260
Distillers & Vintners – 0.2%
Diageo Capital plc, 7.375%, 1–15–14		250		272
Diageo Finance B.V., 5.500%, 4–1–13		250		256
				528

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Diversified Banks – 8.6%
Banco Bradesco S.A., 4.125%, 5–16–16 (B)	$	1,850	$	1,950
Banco Cruzeiro do Sul S.A., 8.500%, 2–20–15 (B)(D)		1,500		240
Banco de Bogota S.A., 5.000%, 1–15–17 (B)		400		423
Banco de Credito del Peru, 4.750%, 3–16–16 (B)		2,300		2,427
Banco Santander Brasil, S.A., 4.500%, 4–6–15 (B)		750		770
Banco Santander Chile, S.A., 6.500%, 9–22–20 (E)		CLP1,297,000		2,652
Bancolombia S.A., 4.250%, 1–12–16		1,700		1,764
ICICI Bank Limited:
6.625%, 10–3–12 (B)		900		900
6.625%, 10–3–12		250		250
4.750%, 11–25–16 (B)		1,250		1,295
SB Capital S.A., 5.499%, 7–7–15		550		592
Sberbank Rossii OAO, 6.480%, 5–15–13		1,000		1,031
State Bank of India, 4.500%, 10–23–14		1,000		1,032
VTB Capital S.A.:
6.609%, 10–31–12		250		251
6.000%, 4–12–17 (B)		4,710		4,921
				20,498
Diversified Chemicals – 0.5%
Dow Chemical Company (The), 7.600%, 5–15–14		1,000		1,105
Diversified Metals & Mining – 2.3%
Anglo American Capital plc, 9.375%, 4–8–14		500		558
Glencore Funding LLC, 6.000%, 4–15–14 (B)		1,640		1,724
Rio Tinto Finance (USA) Limited, 8.950%, 5–1–14		750		845
Southern Peru Copper Corporation, 6.375%, 7–27–15 (B)		275		310
Suzano Trading Ltd, 5.875%, 1–23–21 (B)		1,400		1,390
Vedanta Resources plc, 8.750%, 1–15–14		800		834
				5,661
Electric Utilities – 5.3%
Compania de Transporte de Energia Electrica en Alta Tension TRANSENER S.A., 9.750%, 8–15–21 (B)		1,450		653
Emgesa S.A. E.S.P., 8.750%, 1–25–21 (E)		COP745,000		468

2012 SEMIANNUAL REPORT 31

SCHEDULE OF INVESTMENTS

Ivy Global Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Electric Utilities (Continued)
Empresa Distribuidora y Comercializadora Norte S.A., 9.750%, 10–25–22 (B)	$	955	$	478
ENEL Finance International S.A., 3.875%, 10–7–14 (B)		500		514
Listrindo Capital B.V., 6.950%, 2–21–19 (B)		2,550		2,809
Majapahit Holding B.V., 7.750%, 10–17–16		1,200		1,422
Monongahela Power Company, 7.950%, 12–15–13 (B)		1,000		1,079
PPL Energy Supply, LLC, 6.300%, 7–15–13		500		522
Rural Electrification Corporation Limited, 4.250%, 1–25–16		1,675		1,703
RusHydro Finance Limited, 7.875%, 10–28–15 (E)		RUB90,000		2,820
Tata Electric Companies, 8.500%, 8–19–17	$	250		271
				12,739
Food Distributors – 1.1%
Olam International Limited, 7.500%, 8–12–20		2,500		2,570
Gas Utilities – 0.4%
Transportadora de Gas del Sur S.A., 7.875%, 5–14–17		997		850
Homebuilding – 1.6%
Desarrolladora Homex, S.A. de C.V., 7.500%, 9–28–15		2,470		2,470
URBI, Desarrollos Urbanos, S.A. de C.V., 8.500%, 4–19–16		1,000		880
URBI, Desarrollos Urbanos, S.A.B. de C.V., 9.750%, 2–3–22 (B)		600		528
				3,878
Household Appliances – 0.9%
Controladora Mabe, S.A. de C.V., 6.500%, 12–15–15		2,150		2,236
Household Products – 0.3%
Clorox Co., 5.450%, 10–15–12		700		701
Independent Power Producers & Energy Traders – 2.2%
China Resources Power Holdings Company Limited, 3.750%, 8–3–15		2,500		2,587

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Independent Power Producers & Energy Traders (Continued)
Empresa Nacional de Electricidad S.A., 8.350%, 8–1–13	$	1,500	$	1,584
TransAlta Corporation, 5.750%, 12–15–13		1,000		1,046
				5,217
Industrial Machinery – 0.1%
Ingersoll-Rand Global Holding Company Limited, 6.000%, 8–15–13		250		262
Integrated Oil & Gas – 1.0%
Cenovus Energy Inc., 4.500%, 9–15–14		500		536
Empresa Nacional del Petroleo, 6.750%, 11–15–12 (B)		750		754
Gazprom International S.A., 7.201%, 2–1–20		496		559
Gazstream S.A., 5.625%, 7–22–13		86		88
Petro-Canada, 4.000%, 7–15–13		500		513
				2,450
Investment Banking & Brokerage – 0.4%
Morgan Stanley, 0.750%, 2–11–16 (C)(E)		CNY7,600		1,065
IT Consulting & Other Services – 0.6%
iGATE Corporation, 9.000%, 5–1–16	$	1,200		1,317
Marine – 2.0%
PB Issuer (No. 2) Limited, Convertible, 1.750%, 4–12–16		2,620		2,518
SCF Capital Limited:
5.375%, 10–27–17		1,150		1,157
5.375%, 10–27–17 (B)		1,000		1,006
				4,681
Multi-Utilities – 1.8%
Abu Dhabi National Energy Company PJSC, 6.600%, 8–1–13		1,000		1,039
Black Hills Corporation:
6.500%, 5–15–13		1,500		1,547
9.000%, 5–15–14		1,400		1,566
Veolia Environment, 5.250%, 6–3–13		250		256
				4,408

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Oil & Gas Drilling – 3.0%
Lancer Finance Company (SPV) Limited, 5.850%, 12–12–16 (B)	$	1,133	$	1,168
Noble Group Limited:
8.500%, 5–30–13		1,300		1,346
4.875%, 8–5–15		1,400		1,456
QGOG Atlantic/Alaskan Rigs Ltd.:
5.250%, 7–30–18 (B)		1,514		1,575
5.250%, 7–30–18		312		324
Schahin II Finance Company (SPV) Limited, 5.875%, 9–25–22 (B)		1,230		1,288
				7,157
Oil & Gas Exploration & Production – 4.0%
Anadarko Petroleum Corporation, 5.750%, 6–15–14		500		537
Essar Energy Investment Limited, Convertible, 4.250%, 2–1–16		3,700		2,257
Novatek Finance Limited, 5.326%, 2–3–16 (B)		2,200		2,343
Pacific Rubiales Energy Corp., 8.750%, 11–10–16 (B)		2,000		2,240
Pan American Energy LLC:
7.875%, 5–7–21 (B)		1,000		915
7.875%, 5–7–21		500		458
Ras Laffan Liquefied Natural Gas Co. Ltd., 5.832%, 9–30–16		711		777
				9,527
Oil & Gas Storage & Transportation – 3.1%
DCP Midstream, LLC, 9.700%, 12–1–13 (B)		500		542
Empresas Publicas de Medellin E.S.P., 8.375%, 2–1–21 (E)		COP3,150,000		1,959
Maritimes & Northeast Pipeline, L.L.C.:
7.500%, 5–31–14	$	878		934
7.500%, 5–31–14 (B)		439		467
Midcontinent Express Pipeline LLC, 5.450%, 9–15–14		560		584
Sunoco Logistics Partners Operations L.P., 8.750%, 2–15–14		500		546
TransCapital Limited:
7.700%, 8–7–13		500		526
5.670%, 3–5–14 (B)		1,700		1,803
				7,361
Packaged Foods & Meats – 2.9%
BFF International Limited, 7.250%, 1–28–20 (B)		2,000		2,395

32 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Global Bond Fund (in thousands)

SEPTEMBER 30, 2012 (UNAUDITED)

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Packaged Foods & Meats (Continued)
Bunge Limited Finance Corp., 5.350%, 4–15–14	$	925	$	977
Cadbury Schweppes US Finance LLC, 5.125%, 10–1–13 (B)		1,000		1,040
Cosan Finance Limited, 7.000%, 2–1–17		128		147
JBS Finance II Ltd., 8.250%, 1–29–18 (B)		1,300		1,326
JBS USA LLC and JBS USA Finance, Inc., 11.625%, 5–1–14		450		505
Kraft Foods Inc., 6.000%, 2–11–13		250		255
				6,645
Paper Products – 1.9%
Fibria Overseas Finance Ltd.:
7.500%, 5–4–20 (B)		1,196		1,304
6.750%, 3–3–21 (B)		160		171
International Paper Company, 7.400%, 6–15–14		400		439
Inversiones CMPC S.A., 4.750%, 1–19–18 (B)		1,925		2,061
IRSA Inversiones y Representaciones S.A., 8.500%, 2–2–17		625		561
				4,536
Pharmaceuticals – 0.2%
Novartis Capital Corporation, 4.125%, 2–10–14		500		525
Precious Metals & Minerals – 0.4%
ALROSA Finance S.A., 8.875%, 11–17–14		850		946
Publishing – 0.2%
Pearson Dollar Finance Two plc, 5.500%, 5–6–13		350		360
Restaurants – 1.1%
Arcos Dorados B.V., 7.500%, 10–1–19 (B)		525		586
Arcos Dorados Holdings, Inc., 10.250%, 7–13–16 (E)		BRL4,070		2,138
				2,724
Steel – 2.2%
ArcelorMittal:
5.375%, 6–1–13	$	855		877
9.250%, 2–15–15		500		550
4.000%, 2–25–15		500		500
Evraz Group S.A., 8.875%, 4–24–13		1,800		1,861

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Steel (Continued)
Steel Capital S.A., 6.250%, 7–26–16 (B)	$	1,500	$	1,568
				5,356
Tobacco – 0.2%
B.A.T. International Finance plc, 8.125%, 11–15–13		500		538
Trading Companies & Distributors – 0.6%
CITIC Resources Finance (2007) Limited, 6.750%, 5–15–14 (B)		700		731
CITIC Resources Holdings Limited:
6.750%, 5–15–14		700		732
				1,463
Wireless Telecommunication Service – 1.7%
America Movil, S.A.B. de C.V.:
5.500%, 3–1–14		500		532
3.625%, 3–30–15		800		851
Indosat Palapa Company B.V., 7.375%, 7–29–20 (B)		250		284
Vimpel-Communications, 6.493%, 2–2–16 (B)		1,775		1,864
VIP Finance Ireland Limited, 8.375%, 4–30–13		550		568
				4,099
TOTAL CORPORATE DEBT SECURITIES – 66.7%			$	159,352
(Cost: $156,127)
OTHER GOVERNMENT SECURITIES
Argentina – 1.2%
Aeropuertos Argentina 2000 S.A., 10.750%, 12-1–20		93		92
Compania Latinoamericana de Infraestructura & Servicios S.A., 9.500%, 12–15–16		815		530
Province of Buenos Aires (The), 11.750%, 10–5–15		2,600		2,326
				2,948
Brazil – 0.8%
OI S.A., 9.750%, 9–15–16 (E)		BRL3,500		1,813

OTHER GOVERNMENT SECURITIES (Continued)	Principal		Value
Ireland – 0.3%
RZD Capital Limited, 8.300%, 4–2–19 (E)		RUB19,000	$	630
Supranational – 0.8%
Central American Bank for Economic Integration:
5.375%, 9–24–14	$	1,000		1,070
3.875%, 2–9–17 (B)		800		847
				1,917
Venezuela – 1.6%
Corporacion Andina de Fomento, 3.750%, 1–15–16		3,625		3,801
TOTAL OTHER GOVERNMENT SECURITIES – 4.7%			$	11,109
(Cost: $11,359)
UNITED STATES GOVERNMENT AGENCY OBLIGATIONS
Mortgage-Backed Obligations – 0.9%
Federal Home Loan Mortgage Corporation Adjustable Rate Participation Certificates, 4.000%, 5–15–24		223		237
Federal Home Loan Mortgage Corporation Agency REMIC/CMO, 5.500%, 1–15–38 (F)		1,236		167
Federal Home Loan Mortgage Corporation Fixed Rate Participation Certificates, 4.000%, 11–15–36		254		267
Federal National Mortgage Association Agency REMIC/CMO:
4.000%, 1–25–19		183		191
5.000%, 6–25–22 (F)		242		11
4.000%, 7–15–23 (F)		2,618		105
4.000%, 12–15–23 (F)		688		32
4.000%, 2–15–24 (F)		945		49
4.000%, 4–15–24 (F)		767		55
4.000%, 9–25–24		190		199
5.000%, 2–25–35		52		53
3.500%, 9–25–39		210		221
Federal National Mortgage Association Fixed Rate Pass-Through Certificates:
5.000%, 3–1–22		171		186
5.000%, 8–1–23		78		85

2012 SEMIANNUAL REPORT 33

SCHEDULE OF INVESTMENTS

Ivy Global Bond Fund (in thousands)

SEPTEMBER 30, 2012 (UNAUDITED)

UNITED STATES GOVERNMENT AGENCY OBLIGATIONS (Continued)	Principal		Value
Mortgage-Backed Obligations (Continued)
Government National Mortgage Association Agency REMIC/CMO, 4.500%, 11–20–36 (F)	$	1,692	$	134
Government National Mortgage Association Fixed Rate Pass-Through Certificates, 4.500%, 6–15–23		143		157
				2,149
TOTAL UNITED STATES GOVERNMENT AGENCY OBLIGATIONS – 0.9%			$	2,149
(Cost: $3,528)
UNITED STATES GOVERNMENT OBLIGATIONS
Treasury Obligations – 21.9%
United States Treasury Notes:
1.375%, 2–15–13		13,000		13,060
0.750%, 8–15–13		1,850		1,859

UNITED STATES GOVERNMENT OBLIGATIONS (Continued)	Principal		Value
Treasury Obligations (Continued)
1.750%, 7–31–15	$	17,980	$	18,711
2.375%, 7–31–17		1,980		2,148
3.500%, 5–15–20		1,980		2,319
2.625%, 11–15–20		4,500		4,971
2.125%, 8–15–21		3,500		3,703
1.750%, 5–15–22		5,475		5,554
				52,325
TOTAL UNITED STATES GOVERNMENT OBLIGATIONS – 21.9%			$	52,325
(Cost: $50,712)
SHORT-TERM SECURITIES
Commercial Paper – 2.7%
Diageo Capital plc (GTD by Diageo plc), 0.300%, 10–1–12 (G)		3,327		3,327
Praxair, Inc., 0.080%, 10–11–12 (G)		3,000		3,000
				6,327

SHORT-TERM SECURITIES (Continued)	Principal		Value
Master Note – 0.4%
Toyota Motor Credit Corporation, 0.122%, 10–5–12 (H)	$	1,025	$	1,025
TOTAL SHORT-TERM SECURITIES – 3.1%			$	7,352
(Cost: $7,352)
TOTAL INVESTMENT SECURITIES – 98.1%			$	234,101
(Cost: $230,782)
CASH AND OTHER ASSETS, NET OF LIABILITIES –1.9%				4,502
NET ASSETS – 100.0%			$	238,603

Notes to Schedule of Investments

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

(B) Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2012, the total value of these securities amounted to $65,051 or 27.3% of net assets.

(C) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012.

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

(E) Principal amounts are denominated in the indicated foreign currency, where applicable (BRL - Brazilian Real, CLP - Chilean Peso, CNY - Chinese Yuan Renminbi, COP - Columbian Peso and RUB - Russian Ruble).

(F) Interest-only security. Amount shown as principal represents notional amount for computation of interest.

(G) Rate shown is the yield to maturity at September 30, 2012.

(H) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

The following forward foreign currency contracts were outstanding at September 30, 2012:

Type	Currency	Counterparty	Principal Amount of Contract (Denominated in Indicated Currency)		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
Sell	Australian Dollar	Barclays Capital		7,100		7–24–13	$	70	$	—
Sell	Australian Dollar	Barclays Capital		2,200		7–24–13		—		12
Sell	British Pound	Barclays Capital		300		9–12–13		—		5
							$	70	$	17

34 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Global Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks	$	1,814	$	—	$	—
Corporate Debt Securities		—		157,119		2,233
Other Government Securities		—		11,109		—
United States Government Agency Obligations		—		2,149		—
United States Government Obligations		—		52,325		—
Short-Term Securities		—		7,352		—
Total	$	1,814	$	230,054	$	2,233
Forward Foreign Currency Contracts	$	—	$	70	$	—
Liabilities
Forward Foreign Currency Contracts	$	—	$	17	$	—

The following acronyms are used throughout this schedule:

CMO = Collateralized Mortgage Obligation

GTD = Guaranteed

REMIC = Real Estate Mortgage Investment Conduit

Country Diversification
(as a % of net assets)
United States	31.5	%
Brazil	11.7	%
Russia	5.8	%
India	5.3	%
Argentina	4.5	%
Luxembourg	3.9	%
Chile	3.5	%
Mexico	3.1	%
Columbia	2.9	%
Indonesia	2.7	%

Panama	2.6	%
Singapore	2.3	%
Ireland	1.7	%
China	1.7	%
Venezuela	1.6	%
Canada	1.6	%
Netherlands	1.5	%
United Kingdom	1.4	%
Hong Kong	1.4	%
Other Countries	4.3	%
Other+	5.0	%

+Includes cash and cash equivalents and other assets and liabilities

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 35

PORTFOLIO HIGHLIGHTS

Ivy Global Equity Income Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	92.5%
Telecommunication Services	16.4%
Financials	16.1%
Health Care	16.0%
Energy	12.3%
Consumer Staples	7.8%
Utilities	7.6%
Industrials	6.0%
Materials	4.6%
Information Technology	3.4%
Consumer Discretionary	2.3%
Cash and Cash Equivalents	7.5%

Country Weightings

North America	30.1	%
United States	26.3	%
Canada	3.8	%
Europe	40.3	%
United Kingdom	21.5	%
France	7.2	%
Other Europe	11.6	%
Pacific Basin	16.2	%
Australia	6.9	%
Other Pacific Basin	9.3	%
Other	3.3	%
Bahamas/Caribbean	1.6	%
South America	1.0	%
Cash and Cash Equivalents	7.5	%

Top 10 Equity Holdings

Company	Country	Sector	Industry
Total S.A.	France	Energy	Integrated Oil & Gas
Sanofi-Aventis	France	Health Care	Pharmaceuticals
Telstra Corporation Limited	Australia	Telecommunication Services	Integrated Telecommunication Services
AstraZeneca plc	United Kingdom	Health Care	Pharmaceuticals
Royal Dutch Shell plc, Class A	United Kingdom	Energy	Integrated Oil & Gas
Johnson & Johnson	United States	Health Care	Pharmaceuticals
Seadrill Limited	Norway	Energy	Oil & Gas Drilling
Vodafone Group plc	United Kingdom	Telecommunication Services	Wireless Telecommunication Service
GlaxoSmithKline plc	United Kingdom	Health Care	Pharmaceuticals
TDC A/S	Denmark	Telecommunication Services	Integrated Telecommunication Services

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

36 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Global Equity Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Australia – 6.9%
APA Group (A)		71	$	347
Australia and New Zealand Banking Group Limited		26		678
Telstra Corporation Limited		257		1,047
Wesfarmers Limited		12		428
				2,500
Bermuda – 1.6%
Catlin Group Limited		75		577
Brazil – 1.0%
Telefonica Brasil S.A.		17		362
Canada – 3.8%
Bank of Nova Scotia Berhad (The)		10		551
Crescent Point Energy Corp.		9		399
TransCanada Corporation		10		446
				1,396
China – 2.9%
Bosideng International Holdings Limited		1,060		298
China Minsheng Banking Corp., Ltd., H Shares (A)		482		381
China Mobile Limited (A)		34		371
				1,050
Denmark – 2.1%
TDC A/S		103		750
France – 7.2%
Gaz de France		16		360
Sanofi-Aventis		13		1,107
Total S.A.		23		1,153
				2,620
Germany – 1.0%
Bayer AG		4		380
Israel – 3.3%
Bezeq – Israel Telecommunication Corp., Ltd. (The)		438		508
Israel Chemicals Ltd.		56		685
				1,193
Italy – 3.0%
Snam Rete Gas S.p.A.		128		568
Terna S.p.A.		138		513
				1,081

COMMON STOCKS (Continued)	Shares			Value
Japan – 3.3%
Hoya Corporation		18		$	385
Lawson, Inc.		6			445
NTT DoCoMo, Inc.		—	*		357
					1,187
Netherlands – 1.2%
LyondellBasell Industries N.V., Class A		9			444
Norway – 3.2%
Orkla ASA		45			342
Seadrill Limited		21			820
					1,162
Singapore – 3.1%
CapitaCommercial Trust		342			416
Hutchison Port Holdings Trust		520			377
Singapore Telecommunications Limited		131			342
					1,135
Sweden – 1.1%
TeliaSonera AB		54			390
United Kingdom – 21.5%
AstraZeneca plc		20			967
BAE Systems plc (A)		141			740
British American Tobacco plc		6			326
Capita Group plc (The)		35			442
GlaxoSmithKline plc		33			765
HSBC Holdings plc		55			510
Imperial Tobacco Group plc		15			560
National Grid plc		35			383
Prudential plc		30			382
Royal Dutch Shell plc, Class A		26			914
RSA Insurance Group plc		326			581
Unilever plc		14			497
Vodafone Group plc		271			769
					7,836
United States – 26.3%
Altria Group, Inc.		17			569
American Capital Mortgage Investment Corp.		27			681
AT&T Inc.		19			724
Bristol-Myers Squibb Company		18			610

COMMON STOCKS (Continued)	Shares		Value
United States (Continued)
CenturyLink, Inc.		9	$	373
CME Group Inc.		7		379
ConocoPhillips		13		724
Freeport-McMoRan Copper & Gold Inc., Class B		14		547
General Electric Company		15		335
Johnson & Johnson		12		836
JPMorgan Chase & Co.		17		705
Merck & Co., Inc.		12		538
Microchip Technology Incorporated		11		375
Paychex, Inc.		14		479
Pfizer Inc.		26		655
PPL Corporation		19		538
Wynn Resorts, Limited		5		565
				9,633
TOTAL COMMON STOCKS – 92.5%			$	33,696
(Cost: $31,152)
SHORT-TERM SECURITIES	Principal
Commercial Paper – 3.5%
Straight-A Funding, LLC (GTD by Federal Financing Bank), 0.130%, 10–17–12 (B)	$	1,300		1,300
Master Note – 7.0%
Toyota Motor Credit Corporation, 0.122%, 10–5–12 (C)		2,541		2,541
TOTAL SHORT-TERM SECURITIES – 10.5%			$	3,841
(Cost: $3,841)
TOTAL INVESTMENT SECURITIES – 103.0%			$	37,537
(Cost: $34,993)
LIABILITIES, NET OF CASH AND OTHER ASSETS – (3.0%)				(1,087	)
NET ASSETS – 100.0%			$	36,450

Notes to Schedule of Investments

* Not shown due to rounding.

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

(B) Rate shown is the yield to maturity at September 30, 2012.

(C) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date the variable rate resets.

2012 SEMIANNUAL REPORT 37

SCHEDULE OF INVESTMENTS

Ivy Global Equity Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks
Consumer Discretionary	$	863	$	—	$	—
Consumer Staples		2,826		—		—
Energy		4,456		—		—
Financials		5,841		—		—
Health Care		5,857		—		—
Industrials		2,237		—		—
Information Technology		1,238		—		—
Materials		1,676		—		—
Telecommunication Services		5,993		—		—
Utilities		2,709		—		—
Total Common Stocks	$	33,696	$	—	$	—
Short-Term Securities		—		3,841		—
Total	$	33,696	$	3,841	$	—

The following acronym is used throughout this schedule:

GTD = Guaranteed

Market Sector Diversification
(as a % of net assets)
Telecommunication Services	16.4	%
Financials	16.1	%
Health Care	16.0	%
Energy	12.3	%
Consumer Staples	7.8	%

Utilities	7.6	%
Industrials	6.0	%
Materials	4.6	%
Information Technology	3.4	%
Consumer Discretionary	2.3	%
Other+	7.5	%

+Includes cash and cash equivalents and other assets and liabilities

See Accompanying Notes to Financial Statements.

38 SEMIANNUAL REPORT 2012

PORTFOLIO HIGHLIGHTS

Ivy Global Income Allocation Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	65.0%
Telecommunication Services	12.0%
Health Care	11.7%
Financials	10.5%
Energy	8.9%
Consumer Staples	5.6%
Utilities	5.3%
Industrials	4.4%
Materials	2.6%
Information Technology	2.3%
Consumer Discretionary	1.7%
Bonds	30.5%
Corporate Debt Securities	16.9%
Other Government Securities	12.0%
United States Government and Government Agency Obligations	1.6%
Cash and Cash Equivalents	4.5%

Lipper Rankings

Category: Lipper Mixed-Asset Target Allocation Growth Funds	Rank	Percentile
1 Year	551/562	98
3 Year	510/530	97
5 Year	352/477	74
10 Year	4/259	2

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Country Weightings

Europe	37.6%
United Kingdom	16.3%
France	5.3%
Germany	4.5%
Other Europe	11.5%
North America	29.2%
United States	21.0%
Canada	4.4%
Mexico	3.8%
Pacific Basin	18.9%
Australia	7.3%
Other Pacific Basin	11.6%
South America	6.5%
Brazil	3.5%
Other South America	3.0%
Other	2.1%
Bahamas/Caribbean	1.2%
Cash and Cash Equivalents	4.5%

Top 10 Equity Holdings

Company	Country	Sector	Industry
Sanofi-Aventis	France	Health Care	Pharmaceuticals
Total S.A.	France	Energy	Integrated Oil & Gas
Telstra Corporation Limited	Australia	Telecommunication Services	Integrated Telecommunication Services
AstraZeneca plc	United Kingdom	Health Care	Pharmaceuticals
AT&T Inc.	United States	Telecommunication Services	Integrated Telecommunication Services
Johnson & Johnson	United States	Health Care	Pharmaceuticals
Royal Dutch Shell plc, Class A	United Kingdom	Energy	Integrated Oil & Gas
Seadrill Limited	Norway	Energy	Oil & Gas Drilling
ConocoPhillips	United States	Energy	Oil & Gas Exploration & Production
TDC A/S	Denmark	Telecommunication Services	Integrated Telecommunication Services

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

2012 SEMIANNUAL REPORT 39

SCHEDULE OF INVESTMENTS

Ivy Global Income Allocation Fund (in thousands)

SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Australia – 5.3%
APA Group (A)(B)		550	$	2,704
Australia and New Zealand Banking Group Limited		159		4,081
Telstra Corporation Limited		1,667		6,779
Wesfarmers Limited		69		2,457
				16,021
Bermuda – 1.0%
Catlin Group Limited		396		3,042
Brazil – 0.7%
Vivo Participacoes S.A., ADR		99		2,147
Canada – 2.9%
Bank of Nova Scotia Berhad (The)		65		3,572
Crescent Point Energy Corp.		54		2,373
TransCanada Corporation		64		2,931
				8,876
China – 2.1%
Bosideng International Holdings Limited		6,484		1,823
China Minsheng Banking Corp., Ltd., H Shares (B)		2,947		2,326
China Mobile Limited (B)		206		2,283
				6,432
Denmark – 1.4%
TDC A/S		606		4,415
France – 5.3%
Gaz de France		85		1,896
Sanofi-Aventis		84		7,188
Total S.A.		141		6,974
				16,058
Germany – 0.7%
Bayer AG		24		2,089
Israel – 2.1%
Bezeq – Israel Telecommunication Corp., Ltd. (The)		2,904		3,372
Israel Chemicals Ltd.		239		2,892
				6,264
Italy – 2.1%
Snam Rete Gas S.p.A.		743		3,295
Terna S.p.A.		819		3,051
				6,346
Japan – 2.4%
Hoya Corporation		107		2,349
Lawson, Inc.		35		2,722
NTT DoCoMo, Inc.		1		2,093
				7,164
Netherlands – 0.9%
LyondellBasell Industries N.V., Class A		53		2,717

COMMON STOCKS (Continued)	Shares		Value
Norway – 2.3%
Orkla ASA	$	277	$	2,104
Seadrill Limited		127		4,977
				7,081
Singapore – 2.2%
CapitaCommercial Trust		1,973		2,404
Hutchison Port Holdings Trust		3,182		2,307
Singapore Telecommunications Limited		789		2,057
				6,768
Sweden – 0.5%
TeliaSonera AB		206		1,482
United Kingdom – 14.2%
AstraZeneca plc		116		5,524
BAE Systems plc (B)		777		4,078
British American Tobacco plc		40		2,033
Capita Group plc (The)		213		2,663
GlaxoSmithKline plc		184		4,238
HSBC Holdings plc		212		1,967
Imperial Tobacco Group plc		88		3,248
National Grid plc		192		2,122
Prudential plc		173		2,234
Royal Dutch Shell plc, Class A		146		5,041
RSA Insurance Group plc		1,772		3,163
Unilever plc		89		3,233
Vodafone Group plc		1,413		4,009
				43,553
United States – 18.9%
Altria Group, Inc.		99		3,307
American Capital Mortgage Investment Corp.		167		4,197
AT&T Inc.		145		5,453
Bristol-Myers Squibb Company		117		3,948
CenturyLink, Inc.		56		2,255
CME Group Inc.		41		2,366
ConocoPhillips		77		4,431
Freeport-McMoRan Copper & Gold Inc., Class B		64		2,520
General Electric Company		89		2,021
Johnson & Johnson		74		5,132
JPMorgan Chase & Co.		87		3,502
Merck & Co., Inc.		76		3,433
Microchip Technology Incorporated		69		2,253
Paychex, Inc.		72		2,382
Pfizer Inc.		162		4,036
PPL Corporation		107		3,116
Wynn Resorts, Limited		30		3,449
				57,801
TOTAL COMMON STOCKS – 65.0%			$	198,256
(Cost: $182,717)

CORPORATE DEBT SECURITIES	Principal		Value
Argentina – 0.9%
Arcos Dorados Holdings, Inc., 10.250%, 7-13-16 (A)(C)		BRL5,000	$	2,627
Australia – 0.5%
FMG Resources Pty Ltd., 6.875%, 4-1-22 (A)	$	1,750		1,601
Bermuda – 0.2%
Noble Group Limited, 6.750%, 1-29-20 (A)		500		530
Brazil – 2.8%
AmBev International Finance Co. Ltd., 9.500%, 7-24-17 (C)		BRL7,500		4,199
Fibria Overseas Finance Ltd., 6.750%, 3-3-21 (A)	$	500		534
Globo Comunicacoe e Participacoes S.A., 6.250%, 12-20-49 (D)		2,000		2,160
GOL Finance, 9.250%, 7-20-20		500		459
Odebrecht Drilling Norbe VII/IX Ltd., 6.350%, 6-30-21 (A)		970		1,091
Suzano Trading Ltd, 5.875%, 1-23-21 (A)		500		497
				8,940
Canada - 1.1%
Bombardier Inc., 5.750%, 3-15-22 (A)		1,000		1,025
Manitoba Telecom Services Inc., 6.650%, 5-11-16 (C)		CAD2,000		2,315
				3,340
Chile – 1.3%
Automotores Gildemeister S.A., 8.250%, 5-24-21	$	500		544
Banco Santander Chile, S.A., 6.500%, 9-22-20 (C)		CLP1,682,000		3,439
				3,983
Columbia – 0.8%
Empresas Publicas de Medellin E.S.P., 8.375%, 2-1-21 (C)		COP3,888,000		2,420

40 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Global Income Allocation Fund (in thousands)

SEPTEMBER 30, 2012 (UNAUDITED)

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Denmark – 1.1%
Carlsberg Finans A/S, 7.000%, 2-26-13 (C)		GBP2,000	$	3,297
Germany – 1.0%
Schaeffler Finance B.V., 8.750%, 2-15-19 (A)(C)		EUR2,000		2,904
Hong Kong – 0.2%
Noble Group Limited, 8.500%, 11-29-49 (D)	$	500		480
India – 0.3%
Bhira Investments Limited, 8.500%, 4-27-71		895		908
Indonesia – 0.6%
Indo Energy Finance B.V., 7.000%, 5-7-18 (A)		600		618
PT Adaro Indonesia, 7.625%, 10-22-19 (A)		1,000		1,100
				1,718
Luxembourg – 0.8%
ArcelorMittal, 5.750%, 3-1-21		1,750		1,667
Wind Acquisition Finance S.A., 11.750%, 7-15-17 (A)		750		707
				2,374
Mexico – 1.6%
BBVA Bancomer S.A., 6.750%, 9-30-22 (A)		2,000		2,185
Mexichem, S.A.B. de C.V., 4.875%, 9-19-22 (A)		500		508
Servicios Corporativos Javer S.A.P.I. de C.V.:
9.875%, 4-6-21 (A)		500		494
9.875%, 4-6-21		200		198
URBI, Desarrollos Urbanos, S.A.B. de C.V., 9.750%, 2-3-22 (A)		2,200		1,935
				5,320
Netherlands – 0.8%
Aerospace Satellite Corporation Holding B.V., 12.750%, 11-16-15		1,000		1,100
Listrindo Capital B.V., 6.950%, 2-21-19 (A)		750		826
OSX 3 Leasing B.V., 9.250%, 3-20-15		500		518
				2,444
Norway – 0.4%
Corporacion Pesquera Inca S.A.C., 9.000%, 2-10-17 (A)		1,000		1,075

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Russia – 0.2%
SCF Capital Limited, 5.375%, 10-27-17	$	750	$	755
Singapore – 0.6%
Olam International Limited:
4.070%, 2-12-13 (C)		SGD2,000		1,633
6.000%, 8-10-18 (C)		250		210
				1,843
Turkey – 0.3%
Turkiye Garanti Bankasi A.S., 6.250%, 4-20-21 (A)	$	750		813
United Kingdom – 0.9%
Vedanta Resources Jersey Limited, Convertible, 5.500%, 7-13-16		800		769
Vodafone Group plc, 6.750%, 1-10-13 (C)		AUD2,000		2,089
				2,858
United States – 0.5%
JBS USA LLC and JBS USA Finance, Inc., 8.250%, 2-1-20 (A)	$	1,500		1,496
TOTAL CORPORATE DEBT SECURITIES – 16.9%			$	51,726
(Cost: $49,931)
OTHER GOVERNMENT SECURITIES
Australia – 1.5%
New South Wales Treasury Corporation, 5.500%, 3-1-17 (C)		AUD4,000		4,565
Canada – 0.4%
Canadian Government Bonds, 2.750%, 6-1-22 (C)		CAD1,000		1,108
Germany – 2.8%
KfW, Frankfurt/Main, Federal Republic of Germany:
3.250%, 5-5-14 (C)		SEK22,000		3,441
2.875%, 10-12-16 (C)		NOK26,000		4,685
				8,126
India – 0.2%
ICICI Bank Limited, 5.750%, 11-16-20 (A)	$	500		532

OTHER GOVERNMENT SECURITIES (Continued)	Principal		Value
Malaysia – 2.4%
Malaysian Government Bonds:
3.461%, 7-31-13 (C)		MYR20,935	$	6,875
3.314%, 10-31-17 (C)		1,500		490
				7,365
Mexico – 2.2%
Mexican Fixed Rate Bonds, 8.000%, 12-17-15 (C)		MXN15,000		1,274
United Mexican States Government Bonds, 8.000%, 12-19-13 (C)		69,000		5,572
				6,846
Poland – 1.0%
Poland Government Bonds, 6.250%, 10-24-15 (C)		PLN9,550		3,161
South Korea – 0.3%
South Korea Treasury Bonds, 5.000%, 9-10-14 (C)		KRW1,100,000		1,030
United Kingdom – 1.2%
United Kingdom Treasury Bonds:
4.000%, 3-7-22 (C)		GBP300		590
4.500%, 12-7-42 (C)		1,500		3,107
				3,697
TOTAL OTHER GOVERNMENT SECURITIES – 12.0%			$	36,430
(Cost: $35,862)
UNITED STATES GOVERNMENT OBLIGATIONS
United States – 1.6%
United States Treasury Bonds, 3.000%, 5-15-42	$	2,900		3,011
United States Treasury Notes, 1.750%, 5-15-22		1,700		1,725
				4,736
TOTAL UNITED STATES GOVERNMENT OBLIGATIONS – 1.6%			$	4,736
(Cost: $4,780)

2012 SEMIANNUAL REPORT 41

SCHEDULE OF INVESTMENTS

Ivy Global Income Allocation Fund (in thousands)

SEPTEMBER 30, 2012 (UNAUDITED)

SHORT-TERM SECURITIES	Principal		Value
Commercial Paper – 0.9%
Wisconsin Electric Power Co., 0.200%, 10-1-12 (E)	$	2,491	$	2,491
Master Note – 0.8%
Toyota Motor Credit Corporation, 0.122%, 10-5-12 (F)		2,552		2,552
TOTAL SHORT-TERM SECURITIES – 1.7%			$	5,043
(Cost: $5,043)
TOTAL INVESTMENT SECURITIES – 97.2%			$	296,191
(Cost: $278,333)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 2.8%				8,443
NET ASSETS – 100.0%			$	304,634

Notes to Schedule of Investments

(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, 2012, the total value of these securities amounted to $25,802 or 8.5% of net assets.

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

(C) Principal amounts are denominated in the indicated foreign currency, where applicable (AUD - Australian Dollar, BRL - Brazilian Real, CAD - Canadian Dollar, CLP - Chilean Peso, COP - Columbian Peso, EUR - Euro, GBP - British Pound, KRW - South Korean Won, MXN - Mexican Peso, MYR - Malaysian Ringgit, NOK - Norwegian Krone, PLN - Polish Zloty, SEK - Swedish Krona and SGD - Singapore Dollar).

(D) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012.

(E) Rate shown is the yield to maturity at September 30, 2012.

(F) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date the variable rate resets.

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks
Consumer Discretionary	$	5,272	$	—	$	—
Consumer Staples		17,000		—		—
Energy		26,727		—		—
Financials		32,852		—		—
Health Care		35,587		—		—
Industrials		13,172		—		—
Information Technology		6,985		—		—
Materials		8,130		—		—
Telecommunication Services		36,347		—		—
Utilities		16,184		—		—
Total Common Stocks	$	198,256	$	—	$	—
Corporate Debt Securities		—		51,726		—
Other Government Securities		—		36,430		—
United States Government Obligations		—		4,736		—
Short-Term Securities		—		5,043		—
Total	$	198,256	$	97,935	$	—

42 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Global Income Allocation Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

The following acronym is used throughout this schedule:

ADR = American Depositary Receipts

Market Sector Diversification
(as a % of net assets)
Telecommunication Services	13.6	%
Financials	12.8	%
Other Government Securities	12.0	%
Health Care	11.7	%
Energy	10.9	%
Consumer Staples	9.1	%

Utilities	5.6	%
Consumer Discretionary	5.5	%
Industrials	5.4	%
Materials	5.0	%
Information Technology	2.3	%
United States Government and Government Agency Obligations	1.6	%
Other+	4.5	%

+Includes cash and cash equivalents and other assets and liabilities

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 43

PORTFOLIO HIGHLIGHTS

Ivy High Income Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Bonds	93.0%
Corporate Debt Securities	61.9%
Senior Loans	30.9%
Municipal Bonds – Taxable	0.2%
Cash and Cash Equivalents and Equities	7.0%

Lipper Rankings

Category: Lipper High Current Yield Funds	Rank	Percentile
1 Year	89/486	19
3 Year	27/427	7
5 Year	5/366	2
10 Year	78/256	31

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Quality Weightings

Investment Grade	2.1%
AA	0.2%
A	0.4%
BBB	1.5%
Non-Investment Grade	90.9%
BB	10.1%
B	52.0%
CCC	22.5%
Non-rated	6.3%
Cash and Cash Equivalents and Equities	7.0%

Our preference is to always use ratings obtained from Standard & Poor’s. For securities not rated by Standard & Poor’s, ratings are obtained from Moody’s.

44 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Building Products – 0.0%
Nortek, Inc. (A)		14	$	788
Food Retail – 0.1%
Roundy’s Supermarkets, Inc.		954		5,774
Housewares & Specialties – 0.0%
Provo Craft & Novelty, Inc. (A)		4		—
TOTAL COMMON STOCKS – 0.1%			$	6,562
(Cost: $8,113)
PREFERRED STOCKS – 0.2%
Other Mortgage–Backed Securities – 0.2%
Ally Financial Inc., 7.000% (B)		13	$	12,140
(Cost: $12,066)
WARRANTS
Agricultural Products – 0.0%
ASG Consolidated LLC, Expires 5–15–18 (C)		13		387
Apparel Retail – 0.0%
St. John Knits International, Incorporated, Expires 12–31–29 (C)		48		1,006
TOTAL WARRANTS – 0.0%			$	1,393
(Cost: $798)
CORPORATE DEBT SECURITIES	Principal
Advertising – 0.0%
Checkout Holding Corp., 0.000%, 11–15–15 (B)(D)	$	3,409		2,011
Aerospace – 0.1%
Ducommun Incorporated, 9.750%, 7–15–18		8,656		9,132
Aerospace & Defense – 1.1%
AAR Corp., 7.250%, 1–15–22 (B)		12,500		13,000
Acquisition Co., 10.000%, 6–1–17		11,120		12,010
Sequa Corporation: 11.750%, 12–1–15 (B)		21,098		22,153
13.500%, 12–1–15 (B)		21,940		23,256
				70,419
Agricultural Products – 0.8%
American Seafoods Group LLC, 10.750%, 5–15–16 (B)		14,876		15,062
ASG Consolidated LLC, 15.000%, 5–15–17 (B)(E)		22,170		19,233

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Agricultural Products (Continued)
Darling International Inc., 8.500%, 12–15–18	$	18,765	$	21,368
				55,663
Alternative Carriers – 1.7%
Eileme 2 AB (publ) Polkomtel S.A.:
11.625%, 1–31–20 (B)		6,000		6,720
11.750%, 1–31–20 (B)(F)		EUR13,000		18,460
Level 3 Communications, Inc.:
11.875%, 2–1–19	$	25,558		29,008
8.875%, 6–1–19 (B)		10,899		11,444
Level 3 Communications, Inc. and Level 3 Financing, Inc.,
7.000%, 6–1–20 (B)		24,986		25,236
Level 3 Financing, Inc.:
8.125%, 7–1–19		20,767		22,065
8.625%, 7–15–20		4,591		4,958
				117,891
Apparel Retail – 0.5%
J.Crew Group, Inc., 8.125%, 3–1–19		18,190		19,054
Wolverine Worldwide, 6.125%, 10–15–20 (B)		10,359		10,670
				29,724
Auto Parts & Equipment – 3.3%
IDQ Acquisition Corp.,
14.000%, 10–1–17 (B)(E)		29,483		29,483
IDQ Holdings, Inc.,
11.500%, 4–1–17 (B)		52,733		56,029
Penske Automotive Group, Inc.,
5.750%, 10–1–22 (B)		3,888		3,985
Schaeffler Finance B.V.:
7.750%, 2–15–17 (B)(F)		EUR34,000		48,444
7.750%, 2–15–17 (B)	$	29,302		32,379
8.500%, 2–15–19 (B)		25,678		28,759
8.750%, 2–15–19 (B)(F)		EUR12,000		17,425
				216,504
Automotive Manufacturers – 0.2%
Chrysler Group LLC and CG:
8.000%, 6–15–19	$	4,000		4,240
8.250%, 6–15–21		6,286		6,695
				10,935
Automotive Retail – 1.2%
Asbury Automotive Group, Inc.:
7.625%, 3–15–17		6,755		6,991
8.375%, 11–15–20		25,593		28,216

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Automotive Retail (Continued)
Sonic Automotive, Inc.:
9.000%, 3–15–18	$	11,430	$	12,487
7.000%, 7–15–22 (B)		27,940		29,897
				77,591
Biotechnology – 1.0%
VWR Funding, Inc.,
7.250%, 9–15–17 (B)		62,388		63,324
Broadcasting – 0.7%
Cumulus Media Inc.,
7.750%, 5–1–19		23,282		22,641
Harron Communications, L.P. and Harron Finance Corporation, 9.125%, 4–1–20 (B)		12,023		12,985
Starz LLC and Starz Finance Corp., 5.000%, 9–15–19 (B)		8,163		8,347
				43,973
Building Products – 2.2%
HD Supply, Inc.:
8.125%, 4–15–19 (B)		3,659		3,970
11.000%, 4–15–20 (B)		47,484		52,707
Isabelle Acquisition Sub Inc.,
10.000%, 11–15–18 (B)(E)		37,274		40,442
Nortek, Inc.,
8.500%, 4–15–21		4,735		5,043
Ply Gem Holdings, Inc.,
8.250%, 2–15–18		1,023		1,068
Ply Gem Industries, Inc.,
8.250%, 2–15–18 (B)		27,085		27,254
Roofing Supply Group, LLC and Roofing Supply Finance, Inc.,
10.000%, 6–1–20 (B)		14,674		15,995
				146,479
Cable & Satellite – 1.8%
Cablevision Systems Corporation,
5.875%, 9–15–22		37,065		36,880
CSC Holdings, LLC,
6.750%, 11–15–21 (B)		7,974		8,791
Univision Communications Inc.,
6.750%, 9–15–22 (B)		3,717		3,717
WaveDivision Escrow LLC and WaveDivision Escrow Corp.,
8.125%, 9–1–20 (B)		11,032		11,335
WideOpenWest Finance, LLC and WideOpenWest CapitalCorp.:
10.250%, 7–15–19 (B)		30,415		32,088
13.375%, 10–15–19 (B)		24,730		25,348
				118,159

2012 SEMIANNUAL REPORT 45

SCHEDULE OF INVESTMENTS

Ivy High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Casinos & Gaming – 1.9%
Boyd Finance Co. and Boyd Acquisition Sub, LLC,
8.375%, 2–15–18 (B)	$	11,988	$	12,468
Codere Finance (Luxembourg) S.A.,
9.250%, 2–15–19 (B)		33,829		27,740
MGM Resorts International,
8.625%, 2–1–19 (B)		23,948		26,103
ROC Finance LLC and ROC Finance 1 Corp.,
12.125%, 9–1–18 (B)		24,627		28,567
Scientific Games Corporation:
8.125%, 9–15–18		975		1,065
9.250%, 6–15–19		8,725		9,685
Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp.,
5.375%, 3–15–22 (B)		20,748		21,059
				126,687
Communications Equipment – 0.0%
Brightstar Corporation,
9.500%, 12–1–16 (B)		1,541		1,655
Construction & Engineering – 0.2%
J.M. Huber Corporation, 9.875%, 11–1–19 (B)		12,535		14,071
USG Corporation,
9.750%, 1–15–18		1,481		1,599
				15,670
Construction Materials – 0.5%
Headwaters Incorporated,
7.625%, 4–1–19		12,470		12,657
Headwaters Incorporated, Convertible,
8.750%, 2–1–16		7,250		7,422
Hillman Group, Inc. (The),
10.875%, 6–1–18		11,777		12,661
				32,740
Consumer Finance – 3.5%
Air Lease Corporation,
5.625%, 4–1–17 (B)		66,062		67,383
Bankrate, Inc.,
11.750%, 7–15–15		24,713		27,679
Credit Acceptance Corporation,
9.125%, 2–1–17		21,402		23,596
Nielsen Finance LLC and Nielsen Finance Co.,
4.500%, 10–1–20 (B)		4,960		4,929
Speedy Cash Intermediate Holdings Corp.,
10.750%,5–15–18 (B)		28,635		30,210
TMX Finance LLC and TitleMax Finance Corporation:
13.250%, 7–15–15		67,926		75,398
				229,195

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Data Processing & Outsourced Services – 1.7%
Alliance Data Systems Corporation,
6.375%, 4–1–20 (B)	$	39,854	$	43,042
CoreLogic, Inc.,
7.250%, 6–1–21		57,112		61,824
				104,866
Distillers & Vintners – 0.0%
Constellation Brands, Inc.,
4.625%, 3–1–23		989		1,009
Diversified Chemicals – 0.2%
Kinove German Bondco GmbH,
10.000%, 6–15–18 (B)(F)		EUR8,822		12,385
Diversified Metals & Mining – 1.7%
American Gilsonite Holding Company,
11.500%, 9–1–17 (B)	$	28,431		29,212
FMG Resources Pty Ltd.:
6.000%, 4–1–17 (B)		9,871		9,180
8.250%, 11–1–19 (B)		32,382		31,410
6.875%, 4–1–22 (B)		12,835		11,744
Inment Mining Corporation,
8.750%, 6–1–20 (B)		12,706		13,151
Taseko Mines Limited,
7.750%, 4–15–19		15,941		15,264
				109,961
Diversified Support Services – 0.3%
ARAMARK Holdings Corporation,
8.625%, 5–1–16 (B)(E)		1,949		1,998
Nexeo Solutions, LLC,
8.375%, 3–1–18		16,858		16,689
				18,687
Diversified Telecom – 0.6%
Consolidated Communications Finance Co.,
10.875%, 6–1–20 (B)		34,590		36,492
Education Services – 6.1%
Laureate Education, Inc.:
11.000%, 8–15–15 (B)(G)		58,061		59,803
11.250%, 8–15–15 (B)(E)(G)		153,870		158,486
12.750%, 8–15–17 (B)(G)		86,430		91,616
9.250%, 9–1–19 (B)		89,774		90,223
				400,128
Electronic Equipment & Instruments – 1.3%
CDW LLC and CDW Finance Corporation:
12.535%, 10–12–17		32,000		34,160
8.000%, 12–15–18		2,925		3,232
8.500%, 4–1–19		46,390		50,449
				87,841

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Electronic Manufacturing Services – 0.5%
Jabil Circuit, Inc.:
7.750%, 7–15–16	$	2,046	$	2,368
8.250%, 3–15–18		8,884		10,550
KEMET Corporation,
10.500%, 5–1–18		16,772		17,024
				29,942
Environmental & Facilities Services – 0.2%
Heckmann Corporation,
9.875%, 4–15–18		12,390		12,762
Food Distributors – 0.6%
U.S. Foodservice, Inc.,
8.500%, 6–30–19 (B)		36,169		37,706
Food Retail – 0.1%
Beverages & More, Inc.,
9.625%, 10–1–14 (B)		4,875		5,021
General Merchandise Stores – 0.1%
Pantry, Inc., (The),
8.375%, 8–1–20 (B)		7,308		7,491
Health Care Equipment – 0.6%
Immucor, Inc.,
11.125%, 8–15–19		34,809		39,334
Health Care Facilities – 1.6%
Chiron Merger Sub, Inc.,
12.500%, 11–1–19 (B)		5,000		4,700
Hologic, Inc.,
6.250%, 8–1–20 (B)		6,544		6,937
IASIS Healthcare LLC and IASIS Capital Corporation,
8.375%, 5–15–19		15,338		14,648
Physio–Control International, Inc.,
9.875%, 1–15–19 (B)		16,998		18,613
Tenet Healthcare Corporation,
6.875%, 11–15–31		33,933		30,369
Truven Health Analytics,
10.625%, 6–1–20 (B)		23,101		24,718
				99,985
Health Care Services – 0.3%
MedImpact Holdings, Inc.,
10.500%, 2–1–18 (B)		19,271		20,716
Health Care Technology – 1.1%
MedAssets, Inc.,
8.000%, 11–15–18		67,739		73,836
Home Furnishings – 0.2%
Empire Today, LLC and Empire Today Finance Corp.,
11.375%, 2–1–17 (B)		6,846		7,240
Simmons Bedding Company,
11.250%, 7–15–15 (B)		4,200		4,349
				11,589

46 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Independent Power Producers & Energy Traders – 0.4%
NRG Energy, Inc.,
7.625%, 5–15–19	$	24,650	$	26,129
Texas Competitive Electric Holdings Company, LLC and TCEH Finance, Inc.,
11.500%, 10–1–20 (B)		2,150		1,682
				27,811
Integrated Oil & Gas – 0.3%
EP Energy LLC,
9.375%, 5–1–20 (B)		14,033		15,296
EP Energy LLC and Everest Acquisition Finance Inc.,
7.750%, 9–1–22 (B)		5,514		5,624
				20,920
Integrated Telecommunication Services – 0.1%
Mediacom Broadband LLC and Mediacom Broadband Corporation,
6.375%, 4–1–23 (B)		3,682		3,682
Investment Banking & Brokerage – 0.9%
E*TRADE Financial Corporation:
6.750%, 6–1–16		18,500		19,471
12.500%, 11–30–17 (E)		23,711		26,942
GFI Group Inc.,
8.625%, 7–19–18		15,012		13,173
				59,586
IT Consulting & Other Services – 1.2%
iGATE Corporation,
9.000%, 5–1–16		51,471		56,489
SRA International, Inc. and Sterling Merger, Inc.,
11.000%, 10–1–19		18,725		19,006
				75,495
Leisure Facilities – 0.3%
Palace Entertainment Holdings, LLC,
8.875%, 4–15–17 (B)		16,302		17,239
Leisure Products – 0.2%
Toys R Us Inc,
10.375%, 8–15–17 (B)		5,605		5,731
Yonkers Racing Corporation,
11.375%, 7–15–16 (B)		7,548		8,152
				13,883
Life & Health Insurance – 0.1%
ILFC E–Capital Trust I,
4.520%, 12–21–65 (B)(G)		7,300		4,964
Phoenix Life Insurance Company,
7.150%, 12–15–34 (B)		975		663
				5,627

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Marine – 0.6%
TRAC Intermodal LLC and TRAC Intermodal Corp.,
11.000%, 8–15–19 (B)	$	34,640	$	36,199
Metal & Glass Containers – 0.9%
Consolidated Container Company LLC and Consolidated Container Capital, Inc.,
10.125%, 7–15–20 (B)		54,537		58,081
Pretium Packaging, L.L.C. and Pretium Finance, Inc.,
11.500%, 4–1–16		3,867		3,954
				62,035
Movies & Entertainment – 0.3%
Carmike Cinemas, Inc.,
7.375%, 5–15–19		14,175		15,238
WMG Acquisition Corp.,
9.500%, 6–15–16		5,000		5,456
				20,694
Multi–Line Insurance – 0.3%
American International Group, Inc.,
8.175%, 5–15–58		17,550		21,477
Office Services & Supplies – 0.2%
American Reprographics Company,
10.500%, 12–15–16		10,250		10,763
Oil & Gas Drilling – 0.5%
RDS Ultra–Deepwater Ltd,
11.875%, 3–15–17 (B)		31,690		35,334
Oil & Gas Equipment & Services – 0.7%
Global Geophysical Services, Inc.:
10.500%, 5–1–17 (B)		40,475		38,248
10.500%, 5–1–17		336		321
Halcon Resources Corporation,
9.750%, 7–15–20 (B)		5,320		5,440
				44,009
Oil & Gas Exploration & Production – 0.1%
Chesapeake Midstream Partners, L.P. and CHKM Finance Corp.:
5.875%, 4–15–21		4,948		5,183
6.125%, 7–15–22		3,839		4,060
				9,243
Oil & Gas Refining & Marketing – 2.2%
Energy Partners Ltd.,
8.250%, 2–15–18		12,043		12,163
Offshore Group Investment Limited,
11.500%, 8–1–15		88,577		97,879

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Oil & Gas Refining & Marketing (Continued)
Samson Investment Company,
9.750%, 2–15–20 (B)	$	31,564	$	32,511
				142,553
Oil Services – 0.8%
Drill Rigs Holdings, Inc.,
6.500%, 10–1–17 (B)		2,974		2,955
SESI, LLC,
7.125%, 12–15–21		45,000		49,725
				52,680
Other Diversified Financial Services – 0.1%
Fidelity National Information Services, Inc.,
5.000%, 3–15–22		8,974		9,266
Packaged Foods & Meats – 1.3%
Bumble Bee Foods, LLC:
9.000%, 12–15–17 (B)		60,913		63,731
9.625%, 3–15–18 (B)(E)		22,038		21,101
				84,832
Paper & Forest Products – 0.1%
P. H. Glatfelter,
5.375%, 10–15–20 (B)		4,950		5,000
Paper Packaging – 0.4%
AOT Bedding Super Holdings,
8.125%, 10-1-20 (B)		18,462		18,324
Reynolds Group Holdings Limited,
9.000%, 4–15–19		7,200		7,344
				25,668
Pharmaceuticals – 1.1%
Capsugel FinanceCo S.C.A.,
9.875%, 8–1–19 (B)(F)		EUR18,575		26,734
Jaguar Holding Company II and Jaguar Merger Sub Inc.,
9.500%, 12–1–19 (B)	$	28,813		32,343
Par Pharmaceutical Companies, Inc.,
7.375%, 10–15–20 (B)		14,764		14,838
				73,915
Publishing – 0.0%
Cambium Learning Group, Inc.,
9.750%, 2–15–17		2,425		1,795
Restaurants – 1.7%
Carrols Restaurant Group, Inc.,
11.250%, 5–15–18 (B)		12,808		13,961

2012 SEMIANNUAL REPORT 47

SCHEDULE OF INVESTMENTS

Ivy High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Restaurants (Continued)
CKE Holdings, Inc.,
10.500%, 3–14–16 (B)(E)	$	22,742	$	24,560
Dave & Buster’s, Inc.:
0.001%, 2–15–16 (B)		27,855		20,613
11.000%, 6-1-18		7,213		8,151
DineEquity, Inc.,
9.500%, 10–30–18		13,257		14,947
NPC International, Inc.,
10.500%, 1–15–20		18,745		21,557
Wok Acquisition Corp.,
10.250%,6–30–20 (B)		5,435		5,748
				109,537
Retail Stores – 0.3%
Claire’s Stores, Inc.,
9.000%, 3–15–19 (B)		6,244		6,478
Fifth & Pacific Companies, Inc.,
10.500%, 4–15–19 (B)		8,882		10,025
RadioShack Corporation,
6.750%, 5–15–19		8,625		5,089
				21,592
Security & Alarm Services – 0.3%
Monitronics International, Inc.,
9.125%, 4–1–20		20,879		21,714
Semiconductor Equipment – 0.1%
MEMC Electronic Materials, Inc.,
7.750%, 4–1–19		4,900		4,018
Semiconductors – 0.8%
Freescale Semiconductor, Inc.:
10.125%, 3–15–18 (B)		3,453		3,798
8.050%, 2–1–20		39,562		38,969
10.750%, 8–1–20		10,317		11,168
				53,935
Service—Other – 0.2%
ServiceMaster Company (The),
7.000%,8–15–20 (B)		10,390		10,650
Specialized Consumer Services – 1.9%
B-Corp Merger Sub, Inc.,
8.250%, 6–1–19 (B)		29,936		30,310
Carlson Wagonlit B.V.:
6.875%, 6–15–19 (B)		33,185		34,844
7.500%, 6–15–19 (B)(F)		EUR16,253		21,565
TransUnion LLC and TransUnion Financing Corporation,
9.625%, 6–15–18 (B)(E)	$	34,952		38,098
				124,817

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Specialized Finance – 0.7%
CNG Holdings, Inc.,
9.375%, 5–15–20 (B)	$	9,928	$	10,201
Everest Acquisition, LLC and Everest Acquisition Finance, Inc.,
6.875%, 5–1–19 (B)		3,263		3,491
International Lease Finance Corporation,
6.250%, 5-15-19		12,289		13,210
WM Finance Corp.,
11.500%, 10–1–18		10,332		11,624
WM Holdings Finance Corp.,
13.750%, 10–1–19		4,877		5,365
				43,891
Specialized REITs – 1.1%
CNL Lifestyles Properties, Inc.,
7.250%, 4–15–19		76,491		72,475
Systems Software – 1.4%
Atlantis Merger Sub, Inc. and SoftBrands, Inc.,
11.500%, 7–15–18 (B)		68,006		77,527
Lawson Software, Inc.,
9.375%, 4–1–19 (B)		13,886		15,413
				92,940
Technology – 1.0%
Epicor Software Corporation,
8.625%, 5–1–19		27,397		28,904
J2 Global, Inc.,
8.000%, 8–1–20 (B)		36,822		37,190
Viasystems, Inc.,
7.875%, 5–1–19 (B)		2,506		2,500
				68,594
Technology Distributors – 0.8%
Sophia, L.P. and Sophia Finance, Inc.,
9.750%, 1–15–19 (B)		48,442	$	52,075
Thrifts & Mortgage Finance – 0.2%
Provident Funding Associates, L.P. and PFG Finance Corp.,
10.125%,2–15–19 (B)		10,379		10,690
Wireless Telecommunication Service – 0.4%
Eileme 1 AB (publ) Polkomtel S.A.,
14.250%, 8–15–20 (B)(E)		8,117		8,442
Sprint Nextel Corporation,
7.000%, 8–15–20		3,677		3,824

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Wireless Telecommunication Service (Continued)
Wind Acquisition Finance S.A.,
11.750%, 7–15–17 (B)	$	14,200	$	13,384
				25,650
TOTAL CORPORATE DEBT SECURITIES – 61.9%			$	4,049,787
(Cost: $3,869,786)
MUNICIPAL BONDS – TAXABLE
Arizona – 0.2%
AZ Hlth Fac Auth, Rev Bonds (Banner Hlth), Ser 2007B,
1.051%, 1–1–37 (G)		14,625		11,040
New York – 0.0%
NYC Indl Dev Agy, Rental Rev Bonds (Yankee Stadium Proj), Ser 2009,
11.000%, 3–1–29 (B)		1,875		2,590
TOTAL MUNICIPAL BONDS–TAXABLE – 0.2%			$	13,630
(Cost: $11,441)
SENIOR LOANS
Advertising – 0.1%
Oriental Trading Company, Inc.,
7.000%, 2–14–17 (G)		5,111		5,108
Aerospace & Defense – 0.2%
Navistar, Inc.,
7.000%, 7–31–17 (G)		2,000		2,020
Sequa Corporation:
3.690%, 12–3–14 (G)		250		249
3.720%, 12–3–14 (G)		3,750		3,735
6.250%, 12–3–14 (G)		5,955		5,985
				11,989
Apparel Retail – 0.1%
St. John Knits International, Incorporated,
13.000%, 3–3–15 (G)		5,900		5,915
Auto Parts & Equipment – 0.3%
Schaeffler AG,
6.000%, 2–27–17 (G)		21,848		22,053
Broadcasting – 1.9%
Cumulus Media Holdings, Inc.,
7.500%, 9–16–19 (G)		3,000		3,027

48 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

SENIOR LOANS (Continued)	Principal		Value
Broadcasting (Continued)
Granite Broadcasting Corporation,
8.500%, 4–24–19 (G)	$	14,963	$	14,963
High Plains Broadcasting Operating Company, LLC,
9.000%, 3–14–16 (G)		6,609		6,621
Newport Television LLC,
9.000%, 3–14–16 (G)		23,907		23,952
PAW LUXCO II S.A.R.L.,
5.121%, 7–29–17 (F)(G)		EUR58,675		70,349
				118,912
Building Products – 0.8%
CPG International, Inc.,
0.000%, 9–4–19 (G)	$	11,973		11,977
Goodman Global, Inc.,
9.000%, 10–28–17 (G)		23,545		23,840
HD Supply, Inc.,
7.250%, 9–26–17 (G)		17,000		17,519
				53,336
Cable & Satellite – 1.4%
WideOpenWest Finance, LLC,
6.250%, 4–18–18 (G)		50,982		51,351
Wilton Brands LLC:
0.000%, 8–7–19 (G)		2,500		2,513
7.500%, 8–7–19 (G)		40,000		40,200
				94,064
Casinos & Gaming – 0.9%
Cannery Casino Resorts LLC:
0.000%, 10–1–18 (G)		10,392		10,379
0.000%, 10–1–19 (G)		11,134		11,078
CKX Entertainment, Inc.,
9.000%, 1–1–17 (G)		4,000		3,310
Mohegan Tribal Gaming Authority,
9.000%, 3–31–16 (G)		29,500		29,980
Station Casinos LLC,
3.232%, 6–17–16 (G)		4,874		4,691
				59,438
Commodity Chemicals – 0.2%
INEOS Group Holdings Limited and INEOS US FinanceLLC,
6.500%, 5–4–18 (G)		12,400		12,517
Communications Equipment – 0.3%
Mitel Networks Corporation,
7.427%, 8–16–15 (G)		17,259		17,151
Construction & Farm Machinery & Heavy Trucks – 0.4%
Wabash National Corporation:
6.000%, 4–17–19 (G)		26,138		26,400

SENIOR LOANS (Continued)	Principal		Value
Construction Materials – 0.1%
Brock Holdings III, Inc.,
10.000%, 3–16–18 (G)	$	5,000	$	5,025
Consumer Electronics – 0.4%
Clover Technologies Group, LLC:
6.750%,12–31–12 (G)		24,340		23,974
7.750%,12–31–12 (G)		35		35
				24,009
Diversified Chemicals – 0.6%
Univar, Inc.,
0.000%, 6–30–17 (G)		44,828		44,574
Diversified Real Estate Activities – 2.2%
HLT Property Acquisition, LLC:
0.000%,11–12–15 (G)		15,000		14,325
3.221%,11–12–15 (G)		70,000		66,500
3.471%, 11–12–15 (G)		70,000		66,150
				146,975
Diversified Support Services – 0.7%
Advantage Sales & Marketing, Inc.:
9.250%, 5–29–18 (G)		35,494		35,316
13.000%, 12–30–18 (G)		12,900		12,868
				48,184
Education Services – 0.3%
Education Management LLC:
0.000%, 3–30–18 (G)		2,000		1,760
8.250%, 3–30–18 (G)		6,962		6,127
Laureate Education, Inc.,
5.250%, 6–16–18 (G)		9,708		9,538
				17,425
Electric Utilities – 0.5%
Dynegy Power, LLC,
9.250%, 8–5–16 (G)		33,727		35,317
Electrical Components & Equipment – 0.2%
WireCo WorldGroup,
6.000%, 4–13–17 (G)		10,000		10,150
Environmental & Facilities Services – 0.6%
Evergreen Tank Solution, Inc.,
0.000%, 9–11–18 (G)		29,716		29,419
K2 Pure Solutions Nocal, L.P.,
10.000%, 9–10–15 (G)		7,816		7,777
				37,196
Food Distributors – 2.8%
U.S. Foodservice, Inc.:
0.000%, 7–3–14 (G)		3,000		2,962
2.720%, 7–3–14 (G)		7,979		7,877
5.750%, 6–6–17 (G)		173,327		170,510
				181,349

SENIOR LOANS (Continued)	Principal		Value
Food Retail – 0.4%
Focus Brands, Inc.:
6.250%, 2–22–18 (G)	$	6,257	$	6,319
7.250%, 2–22–18 (G)		69		70
10.250%, 8–21–18 (G)		21,594		21,810
				28,199
Health Care Equipment – 0.1%
Kinetic Concepts, Inc.,
7.000%, 5–4–18 (G)		3,920		3,970
Health Care Facilities – 0.1%
Hologic, Inc.,
4.500%, 4–29–19 (G)		4,000		4,047
National Surgical Hospitals, Inc.,
8.250%, 2–3–17 (G)		4,055		3,953
				8,000
Health Care Services – 0.4%
U.S. Renal Care, Inc.:
6.250%, 6–11–19 (G)		14,951		15,100
7.250%, 6–11–19 (G)		12		12
10.250%,6–11–19 (G)		10,000		10,250
				25,362
Home Furnishings – 0.2%
Spring Windows Fashions, LLC,
11.250%, 5–31–18 (G)		15,000		14,850
Hotels, Resorts & Cruise Lines – 0.1%
Seven Sea Crusies S. DE R.L.,
6.250%, 2–16–19 (G)		9,000		9,034
Housewares & Specialties – 0.0%
Provo Craft & Novelty, Inc.:
8.500%, 3–2–16 (G)		9,954		1,692
Hypermarkets & Super Centers – 0.7%
BJ’s Wholesale Club, Inc.:
0.000%, 9–6–19 (G)		22,265		22,348
0.000%, 3–6–20 (G)		22,265		22,477
				44,825
Independent Power Producers & Energy Traders – 0.1%
Texas Competitive Electric Holdings Company, LLC:
4.728%, 10–10–17 (G)		5,095		3,500
4.938%,10–10–17 (G)		819		562
				4,062
Internet Software & Services – 1.8%
Blue Coat Systems, Inc.:
7.500%, 2–8–18 (G)		44,719		44,942
11.500%, 8–8–18 (G)		8,592		8,764
Web.com Group, Inc.,
7.000%,10–27–17(G)		63,594		63,953
				117,659

2012 SEMIANNUAL REPORT 49

SCHEDULE OF INVESTMENTS

Ivy High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

SENIOR LOANS (Continued)	Principal		Value
IT Consulting & Other Services – 0.2%
Infor Global Solutions European Finance, S.a.R.L.:
0.000%, 3–2–14 (E)(G)	$	2,000	$	2,145
12.875%, 3–2–14 (G)		5,080		5,443
SRA International, Inc.,
6.500%, 7–20–18 (G)		5,720		5,648
				13,236
Leisure Products – 0.7%
SRAM, LLC,
8.500%, 12–7–18 (G)		48,000		48,600
Metal & Glass Containers – 0.1%
Consolidated Container Company LLC:
6.250%, 6–15–19 (G)		8,000		8,085
Movies & Entertainment – 3.1%
AB Acquisitions UK Topco 2 Limited,
3.509%, 7–5–15 (F)(G)		GBP30,000		46,191
Formula One Holdings Ltd. and Alpha Topco Limited,
6.250%,4–30–18 (G)	$	149,250		150,279
				196,470
Oil & Gas Exploration & Production – 1.1%
Chesapeake Energy Corporation,
8.500%, 12–2–17 (G)		72,616		72,801
Oil & Gas Refining & Marketing – 0.3%
Samson Investment Company,
0.000%, 9–10–16 (G)		18,548		18,649
Other Diversified Financial Services – 2.4%
Fairway Group Acquisition Company,
8.250% 8–17–18 (G)		10,404		10,469
Misys plc and Magic Newco, LLC,
12.000%,3–19–19 (G)		140,000		144,549
				155,018
Paper Packaging – 0.1%
AOT Bedding Super Holdings, LLC,
0.000%, 8–29–19 (G)		4,900		4,876
Pharmaceuticals – 0.8%
Par Pharmaceutical Companies, Inc.,
0.000%, 8–2–19 (G)		14,832		14,799
Pharmaceutical Product Development, Inc.,
6.250%, 12–5–18 (G)		1,970		1,987

SENIOR LOANS (Continued)	Principal		Value
Pharmaceuticals (Continued)
Quintiles Transnational Corp.,
7.500%, 2–28–17 (G)	$	40,000	$	40,300
				57,086
Real Estate Operating Companies – 0.3%
Primedia Inc.,
7.500%, 1–13–18 (G)		19,887		18,793
Research & Consulting Services – 0.5%
AlixPartners, LLP,
10.750%, 11–15–19 (G)		32,500		32,784
Restaurants – 0.9%
Brasa Holdings, Inc.:
7.500%, 6–18–19 (G)		32,065		32,065
11.000%, 12–18–19 (G)		30,000		30,000
				62,065
Semiconductor Equipment – 0.0%
Crown Castle Operating Company,
4.000%, 1–31–19 (G)		970		971
Semiconductors – 0.5%
Freescale Semiconductor, Inc.,
6.000%, 2–28–19 (G)		29,850		29,863
Specialized Finance – 0.2%
Shield Finance Co. S.A.R.L.,
6.500%, 6–13–19 (G)		13,965		14,000
Specialty Stores – 0.8%
Candy Intermediate Holdings, Inc.,
7.500%, 5–23–18 (G)		10,000		10,088
Guitar Center, Inc.,
5.620%, 4–9–17 (G)		20,000		19,140
Party City Holdings, Inc.:
5.750%, 7–10–19 (G)		16,177		16,367
Savers, Inc.,
6.250%, 6–11–19 (G)		10,081		10,166
				55,761
Technology Distributors – 0.0%
Sophia, L.P.,
6.250%, 7–19–18 (G)		2,943		2,975
TOTAL SENIOR LOANS – 30.9%			$	2,026,773
(Cost: $1,972,501)
SHORT-TERM SECURITIES
Commercial Paper – 7.8%
Air Products and Chemicals, Inc.,
0.150%, 10–2–12 (H)		10,000		10,000

SHORT-TERM SECURITIES (Continued)	Principal		Value
Commercial Paper (Continued)
Becton Dickinson & Co.:
0.220%,10–24–12 (H)	$	39,000	$	38,993
0.210%,10–26–12 (H)		15,000		14,998
Bemis Company, Inc.:
0.400%,10–2–12 (H)		15,000		15,000
0.410%,10–9–12 (H)		9,900		9,899
0.330%,10–12–12 (H)		4,200		4,200
0.340%,10–15–12 (H)		10,000		9,999
0.380%,10–22–12 (H)		3,000		2,999
0.350%,10–24–12 (H)		13,000		12,997
Campbell Soup Company:
0.300%, 12–19–12 (H)		18,500		18,488
0.300%, 12–20–12 (H)		5,000		4,997
Corporacion Andina de Fomento,
0.260%, 10–22–12 (H)		5,000		4,999
CVS Caremark Corporation,
0.330%,10–1–12 (H)		43,000		42,999
Danaher Corporation,
0.150%,10–29–12 (H)		10,000		9,999
Diageo Capital plc (GTD by Diageo plc),
0.300%,10–1–12 (H)		33,029		33,029
Ecolab Inc.:
0.350%, 10–11–12(H)		6,000		5,999
0.300%, 10–16–12 (H)		12,193		12,191
General Mills, Inc.:
0.260%, 10–15–12 (H)		16,000		15,998
0.260%, 10–17–12 (H)		16,000		15,998
Harley-Davidson Funding Corp. (GTD by Harley-Davidson, Inc.):
0.330%, 10–3–12 (H)		15,000		15,000
0.330%, 10–9–12 (H)		12,000		11,999
0.310%, 10–11–12 (H)		5,000		5,000
Heinz (H.J.) Finance Co. (GTD by Heinz (H.J.) Co.),
0.290%, 10–25–12 (H)		15,000		14,997
Hewlett-Packard Company,
0.400%, 10–5–12 (H)		30,000		29,999
Kroger Co. (The),
0.400%, 10–2–12 (H)		12,970		12,970
L’Oreal USA, Inc.,
0.110%, 10–23–12 (H)		37,000		36,996
Mattel Inc.,
0.320%, 10–9–12 (H)		20,000		19,999
Novartis Finance Corp.,
0.110%, 10–2–12 (H)		6,000		6,000
PACCAR Financial Corp. (GTD by PACCAR Inc.),
0.120%, 10–24–12 (H)		30,000		29,998
Panasonic Finance America, Inc. (GTD by Matsushita Electric Industrial Co., Ltd),
0.500%, 10–11–12 (H)		13,000		12,998
River Fuel Company #2, Inc. (GTD by Bank of Nova Scotia),
0.160%, 12–7–12 (H)		7,000		6,998
Toronto-Dominion Holdings USA Inc.,
0.140%, 10–25–12 (H)		10,000		9,999

50 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

SHORT-TERM SECURITIES (Continued)	Principal		Value
Commercial Paper (Continued)
Verizon Communications Inc.:
0.320%, 11–13–12 (H)	$	5,000	$	4,998
0.410%, 12–11–12 (H)		10,000		9,992
				511,725
Master Note – 0.0%
Toyota Motor Credit Corporation,
0.122%, 10–5–12 (I)		9		9
Municipal Obligations – Taxable – 0.0%
MS Business Fin Corp, Gulf Opp Zone Indl Dev Var Rev Bonds (Chevron U.S.A. Inc. Proj), Ser E (GTD by Chevron Corporation),
0.190%, 10–1–12 (I)		1,082		1,082
NJ Hlth Care Fac Fin Auth, Rev Bonds, AHS Hosp Corp Issue, Ser 2008C (GTD by JPMorgan Chase & Co.),
0.190%,10–4–12 (I)		500		500

SHORT-TERM SECURITIES (Continued)	Principal		Value
Municipal Obligations – Taxable (Continued)
NYC GO Bonds, Fiscal 2006 Ser E (GTD by Bank of America, N.A.),
0.210%, 10–4–12 (I)	$	1,000	$	1,000
				2,582
TOTAL SHORT-TERM SECURITIES – 7.8%			$	514,316
(Cost: $514,316)
TOTAL INVESTMENT SECURITIES – 101.1%			$	6,624,601
(Cost: $6,389,021)
LIABILITIES, NET OF CASH AND OTHER ASSETS – (1.1%)				(67,727	)
NET ASSETS – 100.0%			$	6,556,874

Notes to Schedule of Investments

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

(B) Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2012, the total value of these securities amounted to $2,609,072 or 39.8% of net assets.

(C) Warrants entitle the Fund to purchase a predetermined number of shares of common stock and are non-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date, if any.

(D) Zero coupon bond.

(E) Payment-in-kind bonds.

(F) Principal amounts are denominated in the indicated foreign currency, where applicable (EUR - Euro and GBP - British Pound).

(G) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012.

(H) Rate shown is the yield to maturity at September 30, 2012.

(I) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

The following forward foreign currency contracts were outstanding at September 30, 2012:

Type	Currency	Counterparty	Principal Amount of Contract (Denominated in Indicated Currency)		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
Sell	British Pound	Morgan Stanley International		28,300		10-12-12	$	—	$	416
Sell	Euro	Morgan Stanley International		66,000		10-12-12		—		434
Sell	Euro	Morgan Stanley International		720		11-15-12		97		—
Sell	Euro	Deutsche Bank AG		676		12-17-12		78		—
Sell	Euro	Deutsche Bank AG		5,000		1-30-13		131		—
Sell	Euro	Deutsche Bank AG		932		2-1-13		119		—
Sell	Euro	Morgan Stanley International		720		5-15-13		91		—
Sell	Euro	Deutsche Bank AG		676		6-17-13		72		—
Sell	Euro	Deutsche Bank AG		932		8-1-13		112		—
Sell	Euro	Morgan Stanley International		720		11-15-13		85		—
Sell	Euro	Deutsche Bank AG		676		12-16-13		68		—
Sell	Euro	Deutsche Bank AG		932		2-3-14		106		—
Sell	Euro	Morgan Stanley International		720		5-15-14		80		—

2012 SEMIANNUAL REPORT 51

SCHEDULE OF INVESTMENTS

Ivy High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

Type	Currency	Counterparty	Principal Amount of Contract (Denominated in Indicated Currency)		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
Sell	Euro	Deutsche Bank AG		676		6-16-14	$	63	$	—
Sell	Euro	Deutsche Bank AG		932		8-1-14		99		—
Sell	Euro	Morgan Stanley International		720		11-14-14		77		—
Sell	Euro	Deutsche Bank AG		676		12-15-14		63		—
Sell	Euro	Deutsche Bank AG		932		2-2-15		95		—
Sell	Euro	Morgan Stanley International		729		5-15-15		12		—
Sell	Euro	Deutsche Bank AG		676		6-15-15		59		—
Sell	Euro	Deutsche Bank AG		932		8-3-15		92		—
Sell	Euro	Morgan Stanley International		729		11-16-15		11		—
Sell	Euro	Deutsche Bank AG		676		12-15-15		61		—
Sell	Euro	Deutsche Bank AG		932		2-1-16		93		—
Sell	Euro	Morgan Stanley International		5,980		5-16-16		80		—
Sell	Euro	Deutsche Bank AG		676		6-15-16		63		—
Sell	Euro	Deutsche Bank AG		932		8-1-16		93		—
Sell	Euro	Deutsche Bank AG		676		12-15-16		64		—
Sell	Euro	Deutsche Bank AG		932		2-1-17		94		—
Sell	Euro	Deutsche Bank AG		676		6-15-17		65		—
Sell	Euro	Morgan Stanley International		58,615		7-31-17		112		—
Sell	Euro	Deutsche Bank AG		932		8-1-17		94		—
Sell	Euro	Deutsche Bank AG		676		12-15-17		66		—
Sell	Euro	Deutsche Bank AG		932		2-1-18		98		—
Sell	Euro	Deutsche Bank AG		11,234		6-15-18		1,150		—
Sell	Euro	Deutsche Bank AG		932		8-1-18		102		—
Sell	Euro	Deutsche Bank AG		932		2-1-19		104		—
Sell	Euro	Deutsche Bank AG		19,799		8-1-19		2,230		—
Sell	Euro	Deutsche Bank AG		2,000		1-31-20		2		—
							$	6,181	$	850

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks	$	6,562	$	—	$	—
Preferred Stocks		—		12,140		—
Warrants		—		—		1,393
Corporate Debt Securities		—		4,058,327		—
Municipal Bonds		—		13,630		—
Senior Loans		—		1,530,863		495,910
Short-Term Securities		—		514,316		—
Total	$	6,562	$	6,129,276	$	497,303
Forward Foreign Currency Contracts	$	—	$	6,181	$	—
Liabilities
Forward Foreign Currency Contracts	$	—	$	850	$	—

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

	Warrants			Senior Loans
Beginning Balance 4-1-12	$	2,483		$	133,694
Net realized gain (loss)		—			243
Net change in unrealized appreciation (depreciation)		(1,090	)		5,052
Purchases		—			458,711
Sales		—			(176,171	)
Transfers into Level 3 during the period		—			92,619
Transfers out of Level 3 during the period		—			(18,238	)
Ending Balance 9-30-12	$	1,393		$	495,910
Net change in unrealized appreciation (depreciation) for all Level 3 investments still held as of 9-30-12	$	(1,090	)	$	5,840

52 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

Quantitative Information about Level 3 fair value measurements:

	Fair Value at 9-30-12		Valuation Technique(s)		Unobservable Input(s)		Input Value(s)
Assets
Warrants	$	1,393		Third-party vendor pricing service		Vendor quotes		21.14- 30.00
Senior Loans		495,910		Third-party vendor pricing service		Vendor quotes		94.50-102.50	%

The following acronyms are used throughout this schedule:

GTD = Guaranteed

REIT = Real Estate Investment Trust

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 53

PORTFOLIO HIGHLIGHTS

Ivy International Core Equity Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	93.1%
Telecommunication Services	14.1%
Financials	13.3%
Consumer Staples	12.0%
Information Technology	11.6%
Energy	11.5%
Health Care	10.4%
Industrials	10.2%
Consumer Discretionary	5.6%
Materials	3.2%
Utilities	1.2%
Cash and Cash Equivalents	6.9%

Lipper Rankings

Category: Lipper International Large-Cap Core Funds	Rank	Percentile
1 Year	162/199	81
3 Year	48/174	28
5 Year	9/162	6
10 Year	5/100	5

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Country Weightings

Europe	49.7%
United Kingdom	23.4%
France	10.1%
Netherlands	5.3%
Germany	4.9%
Other Europe	6.0%
Pacific Basin	34.4%
Japan	16.7%
Australia	5.7%
China	4.0%
Hong Kong	3.6%
Other Pacific Basin	4.4%
North America	6.7%
United States	4.1%
Other North America	2.6%
Other	1.7%
South America	0.6%
Cash and Cash Equivalents	6.9%

Top 10 Equity Holdings

Company	Country	Sector	Industry
Total S.A.	France	Energy	Integrated Oil & Gas
Royal Dutch Shell plc, Class A	United Kingdom	Energy	Integrated Oil & Gas
Telstra Corporation Limited	Australia	Telecommunication Services	Integrated Telecommunication Services
Unilever plc	United Kingdom	Consumer Staples	Packaged Foods & Meats
Bayer AG	Germany	Health Care	Pharmaceuticals
Cheung Kong (Holdings) Limited	Hong Kong	Financials	Real Estate Development
Sanofi-Aventis	France	Health Care	Pharmaceuticals
Koninklijke Ahold N.V.	Netherlands	Consumer Staples	Food Retail
Rio Tinto plc	United Kingdom	Materials	Diversified Metals & Mining
GlaxoSmithKline plc	United Kingdom	Health Care	Pharmaceuticals

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

54 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy International Core Equity Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Argentina – 0.6%
Arcos Dorados Holdings, Inc.		547	$	8,434
Australia – 5.7%
Asciano Limited		3,688		16,720
Myer Holdings Limited		6,295		11,394
Telstra Corporation Limited		10,794		43,891
Toll Holdings Limited		3,184		14,564
				86,569
Canada – 1.2%
Potash Corporation of Saskatchewan Inc.		414		17,980
China – 4.0%
Baidu.com, Inc., ADR (A)		135		15,808
China Pacific Insurance (Group) Co. Ltd., H Shares		6,198		18,744
China Unicom Limited		15,594		25,581
				60,133
France – 10.1%
Cap Gemini S.A.		556		23,513
Compagnie Generale des Etablissements Michelin, Class B		256		20,077
Sanofi-Aventis		392		33,417
Schneider Electric S.A.		321		18,990
Total S.A.		1,165		57,783
				153,780
Germany – 4.9%
Bayer AG		474		40,746
Dialog Semiconductor plc (A)		818		15,933
Fresenius SE & Co. KGaA (A)		43		5,005
Fresenius SE & Co. KGaA (A)(B)		115		13,339
				75,023
Hong Kong – 3.6%
Cheung Kong (Holdings) Limited		2,427		35,587
Sun Hung Kai Properties Limited		1,277		18,709
				54,296
Israel – 1.7%
Bezeq – Israel Telecommunication Corp., Ltd. (The)		5,054		5,869
Teva Pharmaceutical Industries Limited, ADR		492		20,370
				26,239
Italy – 1.2%
Saipem S.p.A.		383		18,410

COMMON STOCKS (Continued)	Shares		Value
Japan – 16.7%
Asahi Breweries, Ltd.		711	$	17,524
Hoya Corporation		1,175		25,826
Japan Airlines Co., Ltd. (A)(B)		217		10,149
Japan Tobacco Inc.		547		16,425
KONAMI Corporation		569		12,936
Mitsubishi Electric Corporation		2,305		17,013
Mitsui & Co., Ltd.		1,508		21,217
Mitsui Fudosan Co., Ltd.		1,075		21,530
Nissin Kogyo Co., Ltd.		1,640		21,475
NTT DoCoMo, Inc.		10		16,450
Secom Co., Ltd.		334		17,440
Seven & i Holdings Co., Ltd.		530		16,285
Softbank Corp.		525		21,254
Yahoo Japan Corporation		48		18,129
				253,653
Mexico – 1.4%
America Movil, S.A.B. de C.V.		821		20,880
Netherlands – 5.3%
Fugro N.V.		401		27,244
ING Groep N.V., Certicaaten Van Aandelen (A)		2,705		21,372
Koninklijke Ahold N.V.		2,555		31,999
				80,615
Norway – 1.2%
Telenor ASA		948		18,475
Singapore – 3.3%
Singapore Telecommunications Limited		10,239		26,699
United Overseas Bank Limited		1,469		23,522
				50,221
Sweden – 2.3%
Investor AB, B Shares		855		18,819
TeliaSonera AB		2,280		16,411
				35,230
Switzerland – 1.3%
Swiss Re Ltd		302		19,406
Taiwan – 1.1%
Advanced Semiconductor Engineering, Inc.		21,490		16,568
United Kingdom – 23.4%
AMEC plc		992		18,349
AstraZeneca plc		387		18,455
BAE Systems plc (A)		3,404		17,869
GlaxoSmithKline plc		1,255		28,932
Imperial Tobacco Group plc		458		16,961
Invensys plc, ADR		5,156		19,491

COMMON STOCKS (Continued)	Shares		Value
United Kingdom (Continued)
National Grid plc		1,652	$	18,218
Prudential plc		1,829		23,668
Reckitt Benckiser Group plc		358		20,624
Rio Tinto plc		647		30,134
Royal Dutch Shell plc, Class A		1,601		55,353
Unilever plc		1,193		43,384
Vodafone Group plc		6,944		19,708
WPP Group plc		1,668		22,665
				353,811
United States – 4.1%
Cognizant Technology Solutions Corporation, Class A (A)		393		27,502
InBev NV		197		16,719
Yahoo! Inc. (A)		1,087		17,362
				61,583
TOTAL COMMON STOCKS – 93.1%			$	1,411,306
(Cost: $1,344,927)
SHORT-TERM SECURITIES	Principal
Commercial Paper – 4.4%
American Honda Finance Corp. (GTD by Honda Motor Co.), 0.140%, 10–18–12 (C)	$	9,750		9,749
BHP Billiton Finance (USA) Limited (GTD by BHP Billiton Limited), 0.180%, 10–2–12 (C)		16,000		16,000
Corporacion Andina de Fomento, 0.350%, 12–4–12 (C)		10,000		9,994
E.I. du Pont de Nemours and Company:
0.130%, 11–2–12 (C)		6,000		5,999
0.140%, 11–7–12 (C)		5,000		4,999
GlaxoSmithKline Finance plc (GTD by GlaxoSmithKline plc), 0.180%, 10–4–12 (C)		5,385		5,385
John Deere Financial Limited (GTD by John Deere Capital Corporation), 0.150%, 10–15–12 (C)		5,000		5,000
Prudential Funding LLC, 0.100%, 10–1–12 (C)		3,656		3,656
Straight-A Funding, LLC (GTD by Federal Financing Bank), 0.160%, 11–13–12 (C)		6,000		5,999
				66,781

2012 SEMIANNUAL REPORT 55

SCHEDULE OF INVESTMENTS

Ivy International Core Equity Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

SHORT-TERM SECURITIES (Continued)	Principal		Value
Master Note–0.1%
Toyota Motor Credit Corporation, 0.122%, 10–5–12 (D)	$	924	$	924
United States Government Agency Obligations – 0.6%
Overseas Private Investment Corporation (GTD by United States Government), 0.170%, 10–3–12 (D)		10,000		10,000
TOTAL SHORT-TERM SECURITIES – 5.1%			$	77,705
(Cost: $77,705)
TOTAL INVESTMENT SECURITIES – 98.2%			$	1,489,011
(Cost: $1,422,632)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 1.8%				27,632
NET ASSETS – 100.0%			$	1,516,643

Notes to Schedule of Investments

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

(B) Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2012, the total value of these securities amounted to $23,488 or 1.5% of net assets.

(C) Rate shown is the yield to maturity at September 30, 2012.

(D) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date the variable rate resets.

The following forward foreign currency contracts were outstanding at September 30, 2012:

Type	Currency	Counterparty	Principal Amount of Contract (Denominated in Indicated Currency)		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
Sell	Australian Dollar	Barclays Bank plc		55,700		10–22–12	$	503	$	—
Sell	Japanese Yen	Barclays Bank plc		8,929,000		10–22–12		—		376
							$	503	$	376

56 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy International Core Equity Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks
Consumer Discretionary	$	84,044	$	—	$	—
Consumer Staples		179,921		—		—
Energy		177,141		—		—
Financials		201,357		—		—
Health Care		160,263		—		—
Industrials		153,453		—		—
Information Technology		173,577		—		—
Materials		48,115		—		—
Telecommunication Services		215,217		—		—
Utilities		18,218		—		—
Total Common Stocks	$	1,411,306	$	—	$	—
Short-Term Securities		—		77,705		—
Total	$	1,411,306	$	77,705	$	—
Forward Foreign Currency Contracts	$	—	$	503	$	—
Liabilities
Forward Foreign Currency Contracts	$	—	$	376	$	—

The following acronyms are used throughout this schedule:

ADR = American Depositary Receipts

GTD = Guaranteed

Market Sector Diversification

(as a % of net assets)
Telecommunication Services	14.1%
Financials	13.3%
Consumer Staples	12.0%
Information Technology	11.6%
Energy	11.5%
Health Care	10.4%
Industrials	10.2%
Consumer Discretionary	5.6%
Materials	3.2%
Utilities	1.2%
Other+	6.9%

+Includes cash and cash equivalents and other assets and liabilities

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 57

PORTFOLIO HIGHLIGHTS

Ivy International Growth Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	92.1%
Information Technology	16.2%
Health Care	15.1%
Consumer Discretionary	15.1%
Industrials	14.7%
Consumer Staples	10.5%
Energy	8.2%
Financials	6.8%
Materials	3.1%
Telecommunication Services	2.4%
Cash and Cash Equivalents	7.9%

Lipper Rankings

Category: Lipper International Large-Cap Growth Funds	Rank	Percentile
1 Year	18/213	9
3 Year	15/203	8
5 Year	52/159	33
10 Year	43/115	38

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Country Weightings

Europe	52.3%
United Kingdom	13.6%
France	13.0%
Germany	12.9%
Other Europe	12.8%
Pacific Basin	24.3%
Japan	9.1%
Australia	5.9%
Other Pacific Basin	9.3%
North America	13.2%
United States	12.2%
Other North America	1.0%
Other	1.5%
South America	0.8%
Cash and Cash Equivalents	7.9%

Top 10 Equity Holdings

Company	Country	Sector	Industry
Apple Inc.	United States	Information Technology	Computer Hardware
Fresenius SE & Co. KGaA	Germany	Health Care	Health Care Services
Diageo plc	United Kingdom	Consumer Staples	Distillers & Vintners
Bayer AG	Germany	Health Care	Pharmaceuticals
Telstra Corporation Limited	Australia	Telecommunication Services	Integrated Telecommunication Services
InBev NV	United States	Consumer Staples	Brewers
GlaxoSmithKline plc	United Kingdom	Health Care	Pharmaceuticals
Vinci	France	Industrials	Construction & Engineering
Linde AG	Germany	Materials	Industrial Gases
Cognizant Technology Solutions Corporation, Class A	United States	Information Technology	IT Consulting & Other Services

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

58 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy International Growth Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Argentina – 0.8%
Arcos Dorados Holdings, Inc.		117	$	1,804
Australia – 5.9%
Coca-Cola Amatil Limited		222		3,128
David Jones Limited		969		2,522
Orica Limited		103		2,653
Telstra Corporation Limited		1,364		5,546
				13,849
Canada – 1.0%
Canadian Natural Resources Limited		75		2,323
China – 2.6%
Sands China Ltd.		352		1,314
SINA Corporation (A)		28		1,818
Tingyi Holding Corp.		1,018		3,065
				6,197
France – 13.0%
Cap Gemini S.A.		79		3,326
Compagnie Generale des Etablissements Michelin, Class B		39		3,094
Danone		37		2,265
European Aeronautic Defence and Space Company EADS N.V.		34		1,079
Eutelsat Communications		37		1,193
LVMH Moet Hennessy—Louis Vuitton		22		3,288
Pinault-Printemps-Redoute S.A.		15		2,236
Safran		128		4,613
Sanofi-Aventis		50		4,229
Vinci		116		4,953
				30,276
Germany – 10.9%
adidas AG		31		2,571
Bayer AG		74		6,358
Fresenius SE & Co. KGaA (A)		61		7,119
Fresenius SE & Co. KGaA (A)(B)		7		870
Linde AG		28		4,778
MTU Aero Engines Holding AG		49		3,926
				25,622
Hong Kong – 3.3%
Galaxy Entertainment Group Limited (A)(B)		1,120		3,755
Galaxy Entertainment Group Limited, ADR (A)		48		161
Yue Yuen Industrial (Holdings) Limited		1,169		3,934
				7,850

COMMON STOCKS (Continued)	Shares		Value
India – 3.4%
Housing Development Finance Corporation Limited (A)		40	$	580
Housing Development Finance Corporation Limited (A)(B)		228		3,351
State Bank of India		98		4,162
				8,093
Israel – 1.5%
Teva Pharmaceutical Industries Limited, ADR		84		3,482
Italy – 1.8%
Saipem S.p.A.		89		4,279
Japan – 9.1%
Canon Inc.		57		1,813
JGC Corporation		130		4,339
KONAMI Corporation		77		1,750
Mitsubishi Corporation		180		3,269
Mitsubishi Electric Corporation		257		1,897
Mitsui & Co., Ltd.		121		1,704
Nexon Co., Ltd. (A)		19		261
NEXON Co., Ltd. (A)(B)		102		1,398
Nissin Kogyo Co., Ltd.		190		2,484
ORIX Corporation		25		2,510
				21,425
Luxembourg – 1.9%
Tenaris S.A.		222		4,538
Netherlands – 1.3%
ASML Holding N.V., Ordinary Shares		58		3,082
Norway – 1.8%
Seadrill Limited		110		4,303
Sweden – 2.6%
AB Volvo, Class B (A)		267		3,747
Telefonaktiebolaget LM Ericsson, B Shares		266		2,428
				6,175
Switzerland – 3.4%
Credit Suisse Group AG, Registered Shares		110		2,333
Novartis AG, Registered Shares		59		3,623
Swatch Group Ltd (The), Bearer Shares		5		2,035
				7,991
United Kingdom – 13.6%
ARM Holdings plc, ADR		63		1,776
AstraZeneca plc		97		4,631
British American Tobacco plc		74		3,807
Capita Group plc (The)		111		1,383
Diageo plc		250		7,033
Experian plc		230		3,827
GlaxoSmithKline plc		216		4,972
Petrofac Limited		42		1,089
Prudential plc		242		3,136
				31,654

COMMON STOCKS (Continued)	Shares		Value
United States – 12.2%
Apple Inc. (A)		17	$	11,536
Cognizant Technology Solutions Corporation, Class A (A)		68		4,751
InBev NV		65		5,510
QUALCOMM Incorporated		62		3,863
Schlumberger Limited		40		2,929
				28,589
TOTAL COMMON STOCKS –90.1%			$	211,532
(Cost: $192,286)
PREFERRED STOCKS – 2.0%
Germany – 2.0%
Volkswagen AG, 2.260% (A)		26	$	4,699
(Cost: $4,809)
SHORT-TERM SECURITIES	Principal
Commercial Paper – 5.5%
BHP Billiton Finance (USA) Limited (GTD by BHP Billiton Limited),
0.180%, 10–2–12 (C)	$	3,000		3,000
Prudential Funding LLC,
0.100%, 10–1–12 (C)		2,824		2,824
River Fuel Company #2, Inc. (GTD by Bank of Nova Scotia), 0.160%, 12–7–12 (C)		4,000		3,999
Wal-Mart Stores, Inc.,
0.110%, 10–22–12 (C)		3,000		3,000
				12,823
Master Note – 0.2%
Toyota Motor Credit Corporation,
0.122%, 10–5–12 (D)		477		477
TOTAL SHORT-TERM SECURITIES – 5.7%			$	13,300
(Cost: $13,300)
TOTAL INVESTMENT SECURITIES – 97.8%			$	229,531
(Cost: $210,395)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 2.2%				5,115
NET ASSETS – 100.0%			$	234,646

2012 SEMIANNUAL REPORT 59

SCHEDULE OF INVESTMENTS

Ivy International Growth Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

Notes to Schedule of Investments

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

(B) Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2012, the total value of these securities amounted to $9,374 or 4.0% of net assets.

(C) Rate shown is the yield to maturity at September 30, 2012.

(D) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date the variable rate resets.

The following forward foreign currency contracts were outstanding at September 30, 2012:

Type	Currency	Counterparty	Principal Amount of Contract (Denominated in Indicated Currency)		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
Sell	Euro	Citibank, N.A.		9,250		10-15-12	$	43	$	—
Sell	Japanese Yen	Goldman Sachs International		1,555,000		2-7-13		455		—
							$	498	$	—

The following total return swap agreements were outstanding at September 30, 2012:

Counterparty	Notional Amount	Underlying Security	Termination Date		Financing Fee#			Unrealized Depreciation
UBS AG, London	$1,812	Ping An Insurance (Group) Company of China, Ltd.		10-22-12		USD LIBOR + 0.700	%	$	(77	)

# The Fund pays the financing fee multiplied by the notional amount each quarter. On the termination date of the swap contracts, the Fund will pay/receive the return of the underlying security.

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks
Consumer Discretionary	$	30,390	$	—	$	—
Consumer Staples		24,809		—		—
Energy		19,461		—		—
Financials		16,071		—		—
Health Care		35,285		—		—
Industrials		34,737		—		—
Information Technology		37,802		—		—
Materials		7,431		—		—
Telecommunication Services		5,546		—		—
Total Common Stocks	$	211,532	$	—	$	—
Preferred Stocks		4,699		—		—
Short-Term Securities		—		13,300		—
Total	$	216,231	$	13,300	$	—
Forward Foreign Currency Contracts	$	—	$	498	$	—
Liabilities
Forward Foreign Currency Contracts	$	—	$	—	$	—
Swap Agreements	$	—	$	77	$	—

60 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy International Growth Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

The following acronyms are used throughout this schedule:

ADR = American Depositary Receipts

GTD = Guaranteed

Market Sector Diversification
(as a % of net assets)
Information Technology	16.2%
Health Care	15.1%
Consumer Discretionary	15.1%
Industrials	14.7%

Consumer Staples	10.5%
Energy	8.2%
Financials	6.8%
Materials	3.1%
Telecommunication Services	2.4%
Other+	7.9%

+Includes cash and cash equivalents and other assets and liabilities

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 61

PORTFOLIO HIGHLIGHTS

Ivy Large Cap Growth Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	98.6%
Information Technology	36.8%
Consumer Discretionary	24.3%
Consumer Staples	7.7%
Energy	7.5%
Industrials	7.1%
Health Care	6.0%
Materials	4.2%
Telecommunication Services	3.2%
Financials	1.8%
Cash and Cash Equivalents	1.4%

Lipper Rankings

Category: Lipper Large-Cap Growth Funds	Rank	Percentile
1 Year	558/709	79
3 Year	426/648	66
5 Year	364/559	65
10 Year	100/373	27

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Top 10 Equity Holdings

Company	Sector
Apple Inc.	Information Technology
Monsanto Company	Materials
Visa Inc., Class A	Information Technology
MasterCard Incorporated, Class A	Information Technology
CBS Corporation, Class B	Consumer Discretionary
National Oilwell Varco, Inc.	Energy
Schlumberger Limited	Energy
Amazon.com, Inc.	Consumer Discretionary
Google Inc., Class A	Information Technology
Starbucks Corporation	Consumer Discretionary

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

62 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Large Cap Growth Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Aerospace & Defense – 2.9%
Boeing Company (The)		4	$	278
Precision Castparts Corp.		242		39,545
				39,823
Apparel Retail – 0.8%
Limited Brands, Inc.		237		11,694
Apparel, Accessories & Luxury Goods – 1.8%
Under Armour, Inc., Class A (A)		453		25,285
Application Software – 1.6%
Intuit Inc.		389		22,922
Asset Management & Custody Banks – 1.8%
T. Rowe Price Group, Inc.		404		25,578
Automotive Retail – 1.9%
AutoZone, Inc. (A)		65		24,177
O’Reilly Automotive, Inc. (A)		31		2,575
				26,752
Biotechnology – 4.4%
Alexion Pharmaceuticals, Inc. (A)		228		26,072
Biogen Idec Inc. (A)		236		35,145
				61,217
Brewers – 1.5%
Anheuser–Busch InBev S.A., ADR (A)		242		20,764
Broadcasting – 3.9%
CBS Corporation, Class B		1,479		53,739
Cable & Satellite – 2.9%
Time Warner Cable Inc.		425		40,381
Casinos & Gaming – 3.8%
Las Vegas Sands, Inc.		654		30,307
Wynn Resorts, Limited		199		22,973
				53,280
Communications Equipment – 2.5%
QUALCOMM Incorporated		553		34,563
Computer Hardware – 11.7%
Apple Inc. (A)		242		161,745
Data Processing & Outsourced Services – 8.1%
MasterCard Incorporated, Class A		124		55,803
Visa Inc., Class A		427		57,351
				113,154
Distillers & Vintners – 0.7%
Beam Inc.		174		10,029
Environmental & Facilities Services – 0.5%
Stericycle, Inc. (A)		79		7,151

COMMON STOCKS (Continued)	Shares		Value
Fertilizers & Agricultural Chemicals – 4.2%
Monsanto Company		640	$	58,207
Footwear – 0.1%
NIKE, Inc., Class B		14		1,348
Hotels, Resorts & Cruise Lines – 0.0%
Starwood Hotels & Resorts Worldwide, Inc.		3		151
Household Products – 0.9%
Colgate–Palmolive Company		120		12,856
Industrial Conglomerates – 0.0%
Danaher Corporation		3		143
Internet Retail – 3.7%
Amazon.com, Inc. (A)		201		51,017
Internet Software & Services – 5.7%
eBay Inc. (A)		585		28,305
Google Inc., Class A (A)		67		50,627
				78,932
IT Consulting & Other Services – 1.8%
Cognizant Technology Solutions Corporation, Class A (A)		357		24,989
Managed Health Care – 0.0%
UnitedHealth Group Incorporated		5		283
Motorcycle Manufacturers – 0.8%
Harley–Davidson, Inc.		263		11,156
Oil & Gas Equipment & Services – 7.5%
National Oilwell Varco, Inc.		660		52,832
Schlumberger Limited		712		51,485
				104,317
Packaged Foods & Meats – 1.0%
Mead Johnson Nutrition Company		186		13,640
Personal Products – 0.6%
Estee Lauder Companies, Inc. (The), Class A		128		7,906
Pharmaceuticals – 1.6%
Allergan, Inc.		239		21,915
Railroads – 3.7%
Kansas City Southern		266		20,188
Union Pacific Corporation		266		31,575
				51,763

COMMON STOCKS (Continued)	Shares		Value
Restaurants – 4.0%
McDonald’s Corporation		108	$	9,891
Starbucks Corporation		856		43,431
YUM! Brands, Inc.		21		1,406
				54,728
Retail Stores – 0.6%
Dollar General Corporation (A)		173		8,896
Semiconductor Equipment – 0.9%
ASML Holding N.V., NY Registry Shares		235		12,626
Semiconductors – 2.6%
Altera Corporation		609		20,679
Broadcom Corporation, Class A		199		6,868
Microchip Technology Incorporated		260		8,506
				36,053
Systems Software – 1.9%
Oracle Corporation		304		9,582
VMware, Inc., Class A (A)		172		16,659
				26,241
Tobacco – 3.0%
Philip Morris International Inc.		472		42,478
Wireless Telecommunication Service – 3.2%
American Tower Corporation, Class A (A)		319		22,780
Crown Castle International Corp. (A)		338		21,679
				44,459
TOTAL COMMON STOCKS – 98.6%			$	1,372,181
(Cost: $1,011,879)
SHORT–TERM SECURITIES	Principal
Master Note – 0.4%
Toyota Motor Credit Corporation,
0.122%, 10–5–12 (B)	$	5,622		5,622

2012 SEMIANNUAL REPORT 63

SCHEDULE OF INVESTMENTS

Ivy Large Cap Growth Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

SHORT–TERM SECURITIES (Continued)	Principal		Value
Municipal Obligations–Taxable – 0.1%
MS Business Fin Corp, Gulf Opp Zone Indl Dev Var Rev Bonds (Chevron U.S.A. Inc. Proj), Ser E (GTD by Chevron Corporation),
0.190%, 10–1–12 (B)	$	1,200	$	1,200
TOTAL SHORT–TERM SECURITIES – 0.5%			$	6,822
(Cost: $6,822)
TOTAL INVESTMENT SECURITIES – 99.1%			$	1,379,003
(Cost: $1,018,701)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 0.9%				12,825
NET ASSETS – 100.0%			$	1,391,828

Notes to Schedule of Investments

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

(B) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks	$	1,372,181	$	—	$	—
Short–Term Securities		—		6,822		—
Total	$	1,372,181	$	6,822	$	—

The following acronyms are used throughout this schedule:

ADR = American Depositary Receipts

GTD = Guaranteed

See Accompanying Notes to Financial Statements.

64 SEMIANNUAL REPORT 2012

PORTFOLIO HIGHLIGHTS

Ivy Limited-Term Bond Fund

ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Bonds	96.1%
Corporate Debt Securities	62.9%
United States Government and Government Agency Obligations	32.1%
Municipal Bonds – Taxable	1.1%
Cash and Cash Equivalents	3.9%

Lipper Rankings

Category: Lipper Short-Intermediate Investment Grade Debt Funds	Rank		Percentile
1 Year		107/140		76
3 Year		109/125		87
5 Year		63/117		54
10 Year		54/86		63

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Quality Weightings

Investment Grade	90.0	%
AAA	0.4	%
AA	38.2	%
A	28.4	%
BBB	23.0	%
Non-Investment Grade	6.1	%
BB	6.1	%
Cash and Cash Equivalents	3.9	%

Our preference is to always use ratings obtained from Standard & Poor’s. For securities not rated by Standard & Poor’s, ratings are obtained from Moody’s.

2012 SEMIANNUAL REPORT 65

SCHEDULE OF INVESTMENTS

Ivy Limited-Term Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

CORPORATE DEBT SECURITIES	Principal		Value
Aerospace & Defense – 0.9%
Bombardier Inc., 7.500%, 3–15–18 (A)	$	12,875	$	14,581
Apparel Retail – 1.0%
Limited Brands, Inc., 8.500%, 6–15–19		13,000		15,665
Apparel, Accessories & Luxury Goods – 1.2%
LVMH Moet Hennessy–Louis Vuitton, 1.625%, 6–29–17 (A)		15,000		15,131
V.F. Corporation, 1.184%, 8–23–13 (B)		4,000		4,026
				19,157
Automobile Manufacturers – 2.0%
Nissan Motor Acceptance Corporation, 1.950%, 9–12–17 (A)		15,000		15,136
Volkswagen International Finance N.V.: 1.625%, 3–22–15 (A)		10,606		10,781
2.375%, 3–22–17 (A)		5,500		5,713
				31,630
Banking – 0.3%
Commonwealth Bank of Australia New York, 1.950%, 3–16–15		5,000		5,110
Biotechnology – 1.0%
Amgen Inc., 2.125%, 5–15–17		15,500		16,010
Brewers – 1.8%
Anheuser-Busch InBev Worldwide Inc., 1.375%, 7–15–17		16,692		16,901
SABMiller Holdings Inc., 2.450%, 1–15–17 (A)		12,000		12,554
				29,455
Broadcasting – 0.8%
NBC Universal, Inc., 3.650%, 4–30–15		12,375		13,237
Cable & Satellite – 1.7%
Comcast Corporation, 4.950%, 6–15–16		3,500		3,974
DIRECTV Holdings LLC, 2.400%, 3–15–17		6,000		6,162
Time Warner Cable Inc., 6.750%, 7–1–18		13,664		17,188
				27,324
Coal & Consumable Fuels – 1.1%
Joy Global Inc., 6.000%, 11–15–16		14,900		17,175
Computer & Electronics Retail – 0.7%
Best Buy Co., Inc., 7.000%, 7–15–13		11,030		11,357

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Consumer Finance – 3.7%
American Express Company, 7.250%, 5–20–14	$	4,000	$	4,415
American Express Credit Corporation, 2.750%, 9–15–15		11,000		11,588
American Honda Finance Corp., 1.500%, 9–11–17 (A)		6,000		6,027
Capital One Financial Corporation: 7.375%, 5–23–14		2,000		2,201
2.125%, 7–15–14		6,500		6,633
Ford Motor Credit Company LLC,
3.875%, 1–15–15		14,000		14,631
Penske Truck Leasing Co., LP and PTL Finance Corp.,
3.750%, 5–11–17 (A)		7,000		7,183
USAA Capital Corporation,
1.050%, 9–30–14 (A)		4,000		4,026
				56,704
Data Processing & Outsourced Services – 1.9%
Fidelity National Financial, Inc., 6.600%, 5–15–17		12,215		13,674
Western Union Company (The), 6.500%, 2–26–14		15,800		17,076
				30,750
Distillers & Vintners – 1.0%
Diageo Capital plc, 5.750%, 10–23–17		13,500		16,484
Diversified Banks – 3.1%
Bank of New York Mellon Corporation (The), 1.500%, 1–31–14		10,475		10,617
Barclays Bank plc:
2.500%, 1–23–13		5,000		5,031
2.375%, 1–13–14		4,000		4,065
HSBC Bank plc, 3.100%, 5–24–16 (A)		6,000		6,324
U.S. Bancorp, 2.200%, 11–15–16		10,000		10,499
Wells Fargo & Company, 3.676%, 6–15–16 (B)		11,000		11,975
				48,511
Diversified Chemicals – 1.7%
Dow Chemical Company (The), 5.900%, 2–15–15		14,025		15,626
E.I. du Pont de Nemours and Company, 2.750%, 4–1–16		11,500		12,260
				27,886

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Diversified Metals & Mining – 2.3%
BHP Billiton Finance (USA) Limited, 7.250%, 3–1–16	$	6,000	$	7,210
BHP Billiton plc and BHP Billiton Limited, 5.250%, 12–15–15		8,023		9,133
Rio Tinto Finance (USA) Limited:
8.950%, 5–1–14		5,000		5,633
2.250%, 9–20–16		12,500		12,958
				34,934
Drug Retail – 1.5%
CVS Caremark Corporation, 3.250%, 5–18–15		10,225		10,872
Walgreen Co.:
4.875%, 8–1–13		6,000		6,212
1.800%, 9–15–17		6,500		6,575
				23,659
Electric Utilities – 0.8%
Great Plains Energy Incorporated, 2.750%, 8–15–13		12,605		12,780
Electronic Manufacturing Services – 0.8%
Jabil Circuit, Inc., 7.750%, 7–15–16		11,290		13,068
Environmental & Facilities Services – 2.1%
Republic Services, Inc., 3.800%, 5–15–18		11,190		12,445
Waste Management, Inc.:
6.375%, 3–11–15		1,505		1,693
2.600%, 9–1–16		5,000		5,250
6.100%, 3–15–18		11,275		13,550
				32,938
Forest Products – 1.0%
Georgia-Pacific, LLC, 8.250%, 5–1–16 (A)		14,750		15,873
Health Care Equipment – 0.8%
Stryker Corporation, 2.000%, 9–30–16		11,575		12,070
Health Care Services – 1.8%
Medco Health Solutions, Inc., 2.750%, 9–15–15		15,000		15,691
Quest Diagnostics Incorporated, 3.200%, 4–1–16		14,000		14,838
				30,529
Health Care Supplies – 0.3%
DENTSPLY International Inc., 2.750%, 8–15–16		4,000		4,125

66 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Limited-Term Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Independent Finance – 0.9%
John Deere Capital Corporation, 1.200%, 10–10–17	$	15,000	$	15,075
Industrial Conglomerates – 0.8%
General Electric Capital Corporation, 2.950%, 5–9–16		12,000		12,691
Integrated Oil & Gas – 0.9%
Chevron Corporation, 3.950%, 3–3–14		5,000		5,249
Petro-Canada, 4.000%, 7–15–13		9,500		9,746
				14,995
Integrated Telecommunication Services – 1.7%
AT&T Inc., 2.400%, 8–15–16		5,500		5,818
Deutsche Telekom International Finance B.V., 4.875%, 7–8–14		4,000		4,257
Verizon Communications Inc., 3.000%, 4–1–16		16,000		17,235
				27,310
Internet Software & Services – 0.4%
British Telecommunications plc, 5.150%, 1–15–13		1,000		1,013
eBay Inc., 1.350%, 7–15–17		5,000		5,061
				6,074
Investment Banking & Brokerage – 1.4%
Goldman Sachs Group, Inc. (The):
3.700%, 8–1–15		7,000		7,383
3.625%, 2–7–16		3,000		3,165
Morgan Stanley,
4.100%, 1–26–15		12,000		12,427
				22,975
Leisure Products – 0.2%
Mattel, Inc., 2.500%, 11–1–16		2,500		2,613
Life & Health Insurance – 1.1%
Metropolitan Life Global Funding I:
1.700%, 6–29–15 (A)		8,480		8,650
2.500%, 9–29–15 (A)		8,000		8,326
				16,976
Movies & Entertainment – 0.6%
Viacom Inc., 4.375%, 9–15–14		9,495		10,155

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Multi-Utilities – 0.9%
Dominion Resources, Inc., Ser A, 1.400%, 9–15–17	$	14,850	$	14,895
Office Electronics – 1.0%
Xerox Corporation, 6.350%, 5–15–18		14,000		16,441
Oil & Gas Equipment & Services – 0.7%
Schlumberger Investment S.A., 1.250%, 8–1–17 (A)		5,000		4,995
Schlumberger Norge A.S. (GTD by Schlumberger Limited), 1.950%, 9–14–16 (A)		3,000		3,100
Schlumberger S.A. (GTD by Schlumberger Limited), 1.950%, 9–14–16 (A)		3,000		3,100
				11,195
Oil & Gas Exploration & Production – 1.9%
ConocoPhillips, 4.600%, 1–15–15		5,500		6,004
EOG Resources, Inc., 2.500%, 2–1–16		6,000		6,323
Petrohawk Energy Corporation, 7.250%, 8–15–18		16,000		18,182
				30,509
Oil & Gas Storage & Transportation – 1.0%
DCP Midstream Operating, LP, 3.250%, 10–1–15		5,500		5,649
DCP Midstream, LLC, 9.700%, 12–1–13 (A)		4,500		4,874
Maritimes & Northeast Pipeline, L.L.C., 7.500%, 5–31–14 (A)		5,270		5,605
				16,128
Other Diversified Financial Services – 3.0%
Bank of America Corporation:
6.500%, 8–1–16		5,000		5,784
5.650%, 5–1–18		6,000		6,842
ING Bank NV, 2.375%, 6–9–14 (A)		12,500		12,568
JPMorgan Chase & Co.:
4.650%, 6–1–14		5,000		5,300
3.700%, 1–20–15		6,850		7,255
3.150%, 7–5–16		10,000		10,579
				48,328
Packaged Foods & Meats – 1.0%
H.J. Heinz Company, 2.000%, 9–12–16		3,000		3,115
Kraft Foods Inc., 4.125%, 2–9–16		12,000		13,179
				16,294

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Pharmaceuticals – 1.5%
Eli Lilly and Company, 4.200%, 3–6–14	$	5,775	$	6,085
GlaxoSmithKline Capital Inc., 5.650%, 5–15–18		6,500		8,004
Merck & Co., Inc.:
4.000%, 6–30–15		2,000		2,190
1.100%, 1–31–18		4,925		4,938
Novartis Capital Corporation, 4.125%, 2–10–14		2,000		2,100
				23,317
Property & Casualty Insurance – 0.4%
Berkshire Hathaway Inc.:
2.200%, 8–15–16		2,650		2,785
1.900%, 1–31–17		4,000		4,143
				6,928
Regional Banks – 0.8%
PNC Funding Corp, 4.250%, 9–21–15		11,775		12,906
Restaurants – 1.1%
YUM! Brands, Inc.:
4.250%, 9–15–15		7,425		8,055
6.250%, 3–15–18		7,500		9,096
				17,151
Retail Stores – 0.6%
Dollar General Corporation, 4.125%, 7–15–17		8,500		8,883
Semiconductors – 0.6%
Broadcom Corporation, 2.700%, 11–1–18		9,000		9,648
Soft Drinks – 1.1%
Coca-Cola Enterprises Inc., 4.250%, 3–1–15		3,000		3,257
PepsiCo, Inc.:
0.800%, 8–25–14		5,650		5,683
0.700%, 8–13–15		8,000		8,028
				16,968
Specialty Chemicals – 0.7%
Lubrizol Corporation (The), 5.500%, 10–1–14		10,566		11,578
Systems Software – 1.1%
CA, Inc., 6.125%, 12–1–14		15,267		16,757
Wireless Telecommunication Service – 2.2%
America Movil, S.A.B. de C.V.:
3.625%, 3–30–15		13,478		14,344
2.375%, 9–8–16		4,000		4,163

2012 SEMIANNUAL REPORT 67

SCHEDULE OF INVESTMENTS

Ivy Limited-Term Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

CORPORATE DEBT SECURITIES (Continued)	Principal		Value
Wireless Telecommunication Service (Continued)
American Tower Corporation:
4.625%, 4–1–15	$	5,280	$	5,688
5.900%, 11–1–21		9,500		11,273
				35,468
TOTAL CORPORATE DEBT SECURITIES – 62.9%			$	1,003,270
(Cost: $967,947)
MUNICIPAL BONDS – TAXABLE
Hawaii – 0.3%
Cnty of Kauai, Taxable GO Bonds, Ser 2010A:
1.955%, 8–1–13		515		523
2.498%, 8–1–14		1,240		1,293
3.335%, 8–1–16		3,100		3,406
				5,222
Nebraska – 0.4%
NE Pub Power Dist, General Rev Bonds, Ser 2008A, 5.140%, 1–1–14		6,150		6,475
Rhode Island – 0.4%
Providence Hlth & Svc Oblig Group, Direct Oblig Notes, Ser 2009A, 5.050%, 10–1–14		5,185		5,621
TOTAL MUNICIPAL BONDS – TAXABLE – 1.1%			$	17,318
(Cost: $16,249)
UNITED STATES GOVERNMENT AGENCY OBLIGATIONS
Agency Obligations – 3.7%
Federal Home Loan Bank:
2.375%, 3–14–14		7,000		7,217
3.500%, 3–22–16		11,000		11,163
Federal National Mortgage Association:
2.000%, 12–30–15		10,000		10,496
3.000%, 11–14–18		15,000		15,428
2.700%, 3–28–22		15,000		15,195
				59,499
Mortgage-Backed Obligations – 11.2%
Federal Home Loan Mortgage Corporation Adjustable Rate Participation Certificates:
4.000%, 2–15–23		1,936		1,976
5.000%, 9–15–34		1,984		2,075

UNITED STATES GOVERNMENT AGENCY OBLIGATIONS (Continued)	Principal		Value
Mortgage-Backed Obligations (Continued)
Federal Home Loan Mortgage Corporation Agency REMIC/CMO, 2.500%, 12–15–41	$	16,155	$	16,619
Federal Home Loan Mortgage Corporation Fixed Rate Participation Certificates:
5.500%, 4–1–20		1,624		1,776
4.500%, 10–1–20		1,565		1,681
4.500%, 6–15–27		3,146		3,251
4.500%, 5–15–32		6,822		7,136
6.000%, 11–1–36		679		748
Federal National Mortgage Association Agency REMIC/CMO:
4.780%, 1–25–17		2,227		2,368
5.000%, 11–25–17		4,068		4,347
5.500%, 12–25–17		4,656		5,048
5.000%, 12–15–34		3,014		3,220
4.500%, 3–25–37		2,871		2,966
5.500%, 4–25–37		3,550		3,889
4.000%, 3–25–39		1,881		1,956
2.000%, 4–25–39		14,934		15,090
4.000%, 5–25–39		6,401		6,872
3.000%, 11–25–39		6,976		7,216
4.500%, 6–25–40		5,956		6,385
2.500%, 9–20–40		12,886		13,418
Federal National Mortgage Association Fixed Rate Pass-Through Certificates:
5.500%, 9–1–17		4,848		5,232
5.000%, 5–1–19		2,156		2,352
4.500%, 9–1–19		3,947		4,260
5.500%, 10–1–21		6,669		7,292
5.500%, 2–1–22		3,742		4,091
6.000%, 6–1–22		2,442		2,689
5.000%, 10–1–24		4,667		5,071
5.000%, 4–1–25		4,027		4,376
3.500%, 8–1–26		12,972		14,033
5.000%, 6–25–32		539		548
6.000%, 7–1–38		1,716		1,897
Government National Mortgage Association Agency REMIC/CMO:
5.000%, 4–16–39		2,216		2,438
2.000%, 3–16–42		16,226		16,527
				178,843
TOTAL UNITED STATES GOVERNMENT AGENCY OBLIGATIONS – 14.9%			$	238,342
(Cost: $233,671)

UNITED STATES GOVERNMENT OBLIGATIONS	Principal		Value
Treasury Obligations – 17.2%
United States Treasury Notes:
2.375%, 8–31–14	$	10,000	$	10,407
2.375%, 2–28–15		10,000		10,504
2.500%, 4–30–15		35,000		36,991
2.125%, 5–31–15		25,000		26,209
1.750%, 5–31–16		26,000		27,263
1.500%, 7–31–16		30,000		31,209
1.500%, 8–31–18		65,000		67,565
2.000%, 11–15–21		30,000		31,329
1.750%, 5–15–22		32,000		32,462
				273,939
TOTAL UNITED STATES GOVERNMENT OBLIGATIONS – 17.2%			$	273,939
(Cost: $266,876)
SHORT-TERM SECURITIES
Commercial Paper – 3.5%
Danaher Corporation, 0.160%, 10–4–12 (C)		3,000		3,000
E.I. du Pont de Nemours and Company, 0.140%, 11–15–12 (C)		10,000		9,998
Novartis Finance Corp., 0.110%, 10–2–12 (C)		5,000		5,000
Praxair, Inc., 0.080%, 10–11–12 (C)		10,000		9,999
River Fuel Funding Company #3, Inc. (GTD by Bank of Nova Scotia), 0.180%, 10–31–12 (C)		1,900		1,900
Total Capital Canada Ltd. (GTD by Total S.A.), 0.140%, 11–6–12 (C)		10,000		9,999
Wal–Mart Stores, Inc., 0.090%, 10–12–12 (C)		5,000		5,000
Walt Disney Company (The), 0.120%, 11–8–12 (C)		8,000		7,999
Wisconsin Electric Power Co., 0.200%, 10–1–12 (C)		3,267		3,267
				56,162
Master Note – 0.3%
Toyota Motor Credit Corporation, 0.122%, 10–5–12 (D)		4,001		4,001

68 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Limited-Term Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

SHORT-TERM SECURITIES (Continued)	Principal		Value
Municipal Obligations–Taxable – 0.1%
NY Hsng Fin Agy, Related West 30th Street Hsng Rev Bonds, Ser 2012 A–1 (GTD by Wells Fargo Bank, N.A.),
0.180%, 10–3–12 (D)	$	1,843	$	1,843
TOTAL SHORT–TERM SECURITIES – 3.9%			$	62,006
(Cost: $62,006)
TOTAL INVESTMENT SECURITIES – 100.0%			$	1,594,875
(Cost: $1,546,749)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 0.0%				209
NET ASSETS – 100.0%			$	1,595,084

Notes to Schedule of Investments

(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, 2012, the total value of these securities amounted to $164,547 or 10.3% of net assets.

(B) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012.

(C) Rate shown is the yield to maturity at September 30, 2012.

(D) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Corporate Debt Securities	$	—	$	1,003,270	$	—
Municipal Bonds		—		17,318		—
United States Government Agency Obligations		—		238,342		—
United States Government Obligations		—		273,939		—
Short-Term Securities		—		62,006		—
Total	$	—	$	1,594,875	$	—

The following acronyms are used throughout this schedule:

CMO = Collateralized Mortgage Obligation

GTD = Guaranteed

REMIC = Real Estate Mortgage Investment Conduit

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 69

PORTFOLIO HIGHLIGHTS

Ivy Managed Funds ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Ivy Managed European/Pacific Fund

Ivy Pacific Opportunities Fund, Class I	80.5%
Ivy European Opportunities Fund, Class I	19.1%
Cash and Cash Equivalents	0.4%

Ivy Managed International Opportunities Fund

Ivy Pacific Opportunities Fund, Class I	41.0	%
Ivy International Growth Fund, Class I	19.7	%
Ivy International Core Equity Fund, Class I	19.6	%
Ivy Global Income Allocation Fund, Class I	9.8	%
Ivy European Opportunities Fund, Class I	9.8	%
Cash and Cash Equivalents	0.1	%

70 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Managed Funds (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

Ivy Managed European/Pacific Fund

AFFILIATED MUTUAL FUNDS	Shares		Value
Ivy European Opportunities Fund, Class I		657	$	15,295
Ivy Pacific Opportunities Fund, Class I		4,643		64,397
TOTAL AFFILIATED MUTUAL FUNDS – 99.6%			$	79,692
(Cost: $68,998)
SHORT-TERM SECURITIES – 0.4%	Principal
Master Note
Toyota Motor Credit Corporation, 0.122%, 10–5–12 (A)	$	301	$	301
(Cost: $301)
TOTAL INVESTMENT SECURITIES – 100.0%			$	79,993
(Cost: $69,299)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 0.0%				18
NET ASSETS – 100.0%			$	80,011

Notes to Schedule of Investments

(A) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Affiliated Mutual Funds	$	79,692	$	—	$	—
Short-Term Securities		—		301		—
Total	$	79,692	$	301	$	—

Ivy Managed International Opportunities Fund

AFFILIATED MUTUAL FUNDS	Shares		Value
Ivy European Opportunities Fund, Class I		797	$	18,553
Ivy Global Income Allocation Fund, Class I		1,304		18,716
Ivy International Core Equity Fund, Class I		2,489		37,206
Ivy International Growth Fund, Class I (B)		1,102		37,457
Ivy Pacific Opportunities Fund, Class I		5,632		78,119
TOTAL AFFILIATED MUTUAL FUNDS – 99.9%			$	190,051
(Cost: $171,807)
SHORT-TERM SECURITIES – 0.1%	Principal
Master Note
Toyota Motor Credit Corporation, 0.122%, 10–5–12 (A)	$	188	$	188
(Cost: $188)
TOTAL INVESTMENT SECURITIES – 100.0%			$	190,239
(Cost: $171,995)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 0.0%				36
NET ASSETS – 100.0%			$	190,275

Notes to Schedule of Investments

(A) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

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

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Affiliated Mutual Funds	$	190,051	$	—	$	—
Short-Term Securities		—		188		—
Total	$	190,051	$	188	$	—

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 71

PORTFOLIO HIGHLIGHTS

Ivy Micro Cap Growth Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	95.0%
Information Technology	29.5%
Health Care	20.3%
Consumer Discretionary	17.2%
Industrials	15.2%
Energy	4.4%
Financials	3.6%
Consumer Staples	2.2%
Materials	1.9%
Telecommunication Services	0.7%
Cash and Cash Equivalents	5.0%

Lipper Rankings

Category: Lipper Small-Cap Growth Funds	Rank	Percentile
1 Year	17/537	4
3 Year	241/482	50

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Top 10 Equity Holdings

Company	Sector
Spectranetics Corporation (The)	Health Care
SPS Commerce, Inc.	Information Technology
DXP Enterprises, Inc.	Industrials
Procera Networks, Inc.	Information Technology
Quidel Corporation	Health Care
On Assignment, Inc.	Industrials
Kenexa Corporation	Information Technology
InnerWorkings, Inc.	Industrials
Pacira Pharmaceuticals, Inc.	Health Care
Movado Group, Inc.	Consumer Discretionary

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

72 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Micro Cap Growth Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Advertising – 0.3%
Acquity Group Ltd, ADR (A)		26	$	258
Aerospace & Defense – 0.5%
KEYW Holding Corporation (A)		32		396
Air Freight & Logistics – 0.6%
Pacer International, Inc. (A)		121		481
Alternative Carriers – 0.7%
inContact, Inc. (A)		89		583
Apparel Retail – 1.3%
Francesca’s Holdings Corporation (A)		30		935
Tilly’s, Class A (A)		5		95
				1,030
Apparel, Accessories & Luxury Goods – 1.6%
Movado Group, Inc.		39		1,298
Application Software – 5.2%
Callidus Software Inc. (A)		174		855
Ellie Mae, Inc. (A)		13		365
Exa Corporation (A)		33		362
Kenexa Corporation (A)		31		1,413
NetQin Mobile Inc., ADR (A)		47		378
Tangoe, Inc. (A)		52		681
				4,054
Asset Management & Custody Banks – 0.7%
Internet Capital Group, Inc. (A)		55		555
Auto Parts & Equipment – 0.9%
Amerigon Incorporated (A)		56		699
Automotive Retail – 0.8%
America’s Car-Mart, Inc. (A)		14		623
Biotechnology – 4.3%
Achillion Pharmaceuticals, Inc. (A)		112		1,169
Clovis Oncology, Inc. (A)		47		957
NewLink Genetics Corporation (A)		40		641
Synergy Pharmaceuticals Inc. (A)		131		624
				3,391
Building Products – 0.8%
Builders FirstSource, Inc. (A)		128		665
Casinos & Gaming – 1.3%
Multimedia Games Holding Company, Inc. (A)		67		1,060
Commercial Printing – 1.8%
InnerWorkings, Inc. (A)		107		1,394

COMMON STOCKS (Continued)	Shares		Value
Communications Equipment – 3.2%
Ixia (A)		59	$	953
Procera Networks, Inc. (A)		67		1,563
				2,516
Computer Storage & Peripherals – 0.6%
Datalink Corporation (A)		60		497
Construction & Farm Machinery & Heavy Trucks – 2.1%
Commercial Vehicle Group, Inc. (A)		45		330
The Greenbrier Companies, Inc. (A)		36		573
Wabash National Corporation (A)		101		722
				1,625
Consumer Finance – 1.9%
NetSpend Holdings, Inc. (A)		67		662
Regional Management Corp. (A)		46		793
				1,455
Data Processing & Outsourced Services – 0.9%
Global Cash Access, Inc. (A)		92		740
Electronic Equipment & Instruments – 1.2%
FARO Technologies, Inc. (A)		23		950
Electronic Manufacturing Services – 0.5%
Fabrinet (A)		31		355
Food Distributors – 0.8%
Chefs’ Warehouse Holdings, LLC (The) (A)		36		595
Food Retail – 1.0%
Natural Grocers by Vitamin Cottage, Inc. (A)		37		818
General Merchandise Stores – 1.1%
Gordmans Stores, Inc. (A)		49		897
Health Care Equipment – 1.9%
ABIOMED, Inc. (A)		45		948
Rockwell Medical, Inc. (A)		65		533
				1,481
Health Care Supplies – 6.1%
Quidel Corporation (A)		81		1,531
Spectranetics Corporation (The) (A)		156		2,294
STAAR Surgical Company (A)		78		590
Synergetics USA, Inc. (A)		93		460
				4,875
Health Care Technology – 3.0%
Greenway Medical Technologies, Inc. (A)		25		424

COMMON STOCKS (Continued)	Shares		Value
Health Care Technology (Continued)
HealthStream, Inc. (A)		41	$	1,161
Vocera Communications, Inc. (A)		25		773
				2,358
Homebuilding – 1.3%
M/I Homes, Inc. (A)		51		992
Homefurnishing Retail – 0.6%
Kirkland’s, Inc. (A)		46		461
Human Resource & Employment Services – 2.8%
On Assignment, Inc. (A)		75		1,503
WageWorks, Inc. (A)		40		700
				2,203
Internet Software & Services – 9.6%
Bazaarvoice, Inc. (A)		34		521
Boingo Wireless, Inc. (A)		54		425
Brightcove Inc. (A)		43		505
Envestnet, Inc. (A)		53		625
Liquidity Services, Inc. (A)		15		763
Millennial Media Inc. (A)		27		390
Responsys, Inc. (A)		27		277
SciQuest, Inc. (A)		41		743
SPS Commerce, Inc. (A)		47		1,796
Trulia, Inc. (A)		13		283
Vocus, Inc. (A)		33		664
Web.com Group, Inc. (A)		37		662
				7,654
IT Consulting & Other Services – 1.8%
InterXion Holding N.V. (A)		36		827
Virtusa Corporation (A)		32		563
				1,390
Leisure Facilities – 0.7%
Town Sports International Holdings, Inc. (A)		45		558
Leisure Products – 1.9%
Arctic Cat Inc. (A)		24		995
Black Diamond, Inc. (A)		53		463
				1,458
Managed Health Care – 0.8%
Molina Healthcare, Inc. (A)		25		621
Movies & Entertainment – 1.2%
Rentrak Corporation (A)		54		911
Oil & Gas Drilling – 0.9%
Pioneer Drilling Company (A)		87		681
Oil & Gas Equipment & Services – 1.7%
Basic Energy Services, Inc. (A)		51		568
RigNet, Inc. (A)		44		806
				1,374

2012 SEMIANNUAL REPORT 73

SCHEDULE OF INVESTMENTS

Ivy Micro Cap Growth Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS (Continued)	Shares		Value
Oil & Gas Exploration & Production – 1.8%
Callon Petroleum Company (A)		157	$	968
Triangle Petroleum Corporation (A)		66		473
				1,441
Packaged Foods & Meats – 0.4%
Inventure Foods, Inc. (A)		53		303
Pharmaceuticals – 4.2%
NuPathe Inc. (A)		60		212
Obagi Medical Products, Inc. (A)		78		965
Omeros Corporation (A)		76		713
Pacira Pharmaceuticals, Inc. (A)		80		1,389
				3,279
Research & Consulting Services – 0.6%
Mistras Group, Inc. (A)		22		508
Restaurants – 4.2%
Bravo Brio Restaurant Group, Inc. (A)		26		383
Caribou Coffee Company, Inc. (A)		45		618
Chuy’s Holdings, Inc. (A)		37		899
Fiesta Restaurant Group, Inc. (A)		43		676
Red Robin Gourmet Burgers, Inc. (A)		21		694
				3,270
Semiconductor Equipment – 1.2%
CVD Equipment Corporation (A)		42		404

COMMON STOCKS (Continued)	Shares		Value
Semiconductor Equipment (Continued)
Nanometrics Incorporated (A)		39	$	544
				948
Semiconductors – 1.9%
BCD Semiconductor Manufacturing Limited, ADR (A)		50		179
ChipMOS TECHNOLOGIES (Bermuda) LTD. (A)		27		423
MagnaChip Semiconductor Corporation (A)		35		413
RDA Microelectronics, Inc., ADR		46		492
				1,507
Specialty Chemicals – 1.1%
ADA-ES, Inc. (A)		37		864
Steel – 0.8%
Universal Stainless & Alloy Products, Inc. (A)		16		598
Systems Software – 3.4%
Allot Communications Ltd. (A)		34		902
Imperva, Inc. (A)		16		584
Infolox Inc. (A)		34		795
Proofpoint, Inc. (A)		25		374
				2,655
Trading Companies & Distributors – 2.2%
DXP Enterprises, Inc. (A)		37		1,748
Trucking – 3.8%
Celadon Group, Inc.		72		1,151
Marten Transport, Ltd.		43		747

COMMON STOCKS (Continued)	Shares		Value
Trucking (Continued)
Roadrunner Transportation Systems, Inc. (A)		42	$	673
Vitran Corporation Inc., Class A (A)		57		341
				2,912
TOTAL COMMON STOCKS – 94.0%			$	73,985
(Cost: $56,993)
INVESTMENT FUNDS – 1.0%
Registered Investment Companies – 1.0%
iShares Russell 2000 Growth Index Fund		8	$	803
(Cost: $791)
SHORT-TERM SECURITIES	Principal
Master Note – 3.9%
Toyota Motor Credit Corporation, 0.122%, 10–5–12 (B)	$	3,060		3,060
TOTAL SHORT-TERM SECURITIES – 3.9%			$	3,060
(Cost: $3,060)
TOTAL INVESTMENT SECURITIES – 98.9%			$	77,848
(Cost: $60,844)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 1.1%				836
NET ASSETS – 100.0%			$	78,684

Notes to Schedule of Investments

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

(B) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks	$	73,985	$	—	$	—
Investment Funds		803		—		—
Short-Term Securities		—		3,060		—
Total	$	74,788	$	3,060	$	—

The following acronym is used throughout this schedule:

ADR = American Depositary Receipts

See Accompanying Notes to Financial Statements.

74 SEMIANNUAL REPORT 2012

PORTFOLIO HIGHLIGHTS

Ivy Mid Cap Growth Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	95.4%
Information Technology	23.6%
Consumer Discretionary	19.7%
Industrials	15.0%
Health Care	11.6%
Financials	10.7%
Energy	6.6%
Consumer Staples	5.3%
Materials	2.9%
Cash and Cash Equivalents	4.6%

Lipper Rankings

Category: Lipper Mid-Cap Growth Funds	Rank	Percentile
1 Year	191/395	49
3 Year	114/357	32
5 Year	19/322	6
10 Year	31/217	15

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Top 10 Equity Holdings

Company	Sector
Pall Corporation	Industrials
CarMax, Inc.	Consumer Discretionary
Varian Medical Systems, Inc.	Health Care
Fortune Brands Home & Security, Inc.	Industrials
Northern Trust Corporation	Financials
Microchip Technology Incorporated	Information Technology
Vantiv, Inc., Class A	Information Technology
Signature Bank	Financials
Fastenal Company	Industrials
Under Armour, Inc., Class A	Consumer Discretionary

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

2012 SEMIANNUAL REPORT 75

SCHEDULE OF INVESTMENTS

Ivy Mid Cap Growth Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Air Freight & Logistics – 1.4%
Expeditors International of Washington, Inc.		978	$	35,562
Apparel, Accessories & Luxury Goods – 3.8%
Burberry Group plc (A)		1,377		22,252
Michael Kors Holdings Limited (B)		496		26,390
Under Armour, Inc., Class A (B),(C)		940		52,504
				101,146
Application Software – 3.5%
ANSYS, Inc. (B)		541		39,692
Solera Holdings, Inc.		847		37,154
Ultimate Software Group, Inc. (The) (B)		144		14,701
				91,547
Asset Management & Custody Banks – 2.8%
Northern Trust Corporation		1,255		58,238
Oaktree Capital Group, LLC		356		14,614
				72,852
Automotive Retail – 2.7%
CarMax, Inc. (B)		2,472		69,953
Brewers – 1.0%
Boston Beer Company, Inc. (The), Class A (B)		238		26,666
Broadcasting – 0.6%
Discovery Holding Company, Class A (B)		279		16,636
Building Products – 2.3%
Fortune Brands Home & Security, Inc. (B)(C)		2,243		60,575
Communications Equipment – 3.8%
Aruba Networks, Inc. (B)		1,806		40,619
F5 Networks, Inc. (B)		329		34,474
Riverbed Technology, Inc. (B)		927		21,572
Ubiquiti Networks, Inc. (B)		188		2,243
				98,908
Construction Materials – 1.9%
Martin Marietta Materials, Inc. (C)		578		47,895
Consumer Electronics – 2.5%
Harman International Industries, Incorporated		1,079		49,783
Skullcandy, Inc. (B)		1,198		16,468
				66,251
Data Processing & Outsourced Services – 4.1%
Fiserv, Inc. (B)		695		51,425
Vantiv, Inc., Class A (B)		2,543		54,793
				106,218

COMMON STOCKS (Continued)	Shares		Value
Department Stores – 1.5%
Nordstrom, Inc.		691	$	38,107
Distillers & Vintners – 0.9%
Brown-Forman Corporation, Class B		355		23,150
Distributors – 1.6%
LKQ Corporation (B)		2,189		40,498
Electrical Components & Equipment – 3.5%
Acuity Brands, Inc.		300		19,015
Polypore International, Inc. (B)		1,310		46,321
Roper Industries, Inc.		224		24,588
				89,924
Electronic Manufacturing Services – 1.9%
Trimble Navigation Limited (B)		1,030		49,071
Environmental & Facilities Services – 1.1%
Stericycle, Inc. (B)		322		29,156
Fertilizers & Agricultural Chemicals – 0.5%
Scotts Miracle-Gro Company (The)		302		13,119
Food Retail – 1.1%
Whole Foods Market, Inc.		310		30,188
Health Care Distributors – 1.9%
Henry Schein, Inc. (B)		619		49,068
Health Care Equipment – 7.1%
IDEXX Laboratories, Inc. (B)		238		23,690
Intuitive Surgical, Inc. (B)		51		25,376
St. Jude Medical, Inc.		769		32,404
Varian Medical Systems, Inc. (B)		1,124		67,803
Zimmer Holdings, Inc.		524		35,409
				184,682
Homefurnishing Retail – 0.3%
Williams-Sonoma, Inc.		150		6,578
Hotels, Resorts & Cruise Lines – 1.8%
Wyndham Worldwide Corporation		902		47,326
Household Products – 1.1%
Church & Dwight Co., Inc.		538		29,066
Industrial Gases – 0.5%
Airgas, Inc.		162		13,330
Industrial Machinery – 4.7%
IDEX Corporation		1,171		48,893
Pall Corporation		1,132		71,869
				120,762

COMMON STOCKS (Continued)	Shares		Value
Internet Software & Services – 1.2%
DealerTrack Holdings, Inc. (B)		653	$	18,197
Zillow, Inc. (B)		325		13,698
				31,895
Investment Banking & Brokerage – 1.8%
Greenhill & Co., Inc.		881		45,566
IT Consulting & Other Services – 1.8%
Teradata Corporation (B)		624		47,041
Life Sciences Tools & Services – 2.6%
Agilent Technologies, Inc.		784		30,137
Mettler-Toledo International Inc. (B)		221		37,648
				67,785
Oil & Gas Drilling – 1.1%
Patterson-UTI Energy, Inc.		1,819		28,811
Oil & Gas Equipment & Services – 2.6%
Dresser-Rand Group Inc. (B)		639		35,223
Dril-Quip, Inc. (B)		436		31,315
				66,538
Oil & Gas Exploration & Production – 2.9%
Cabot Oil & Gas Corporation		433		19,420
Continental Resources, Inc. (B)		412		31,706
Ultra Petroleum Corp. (B)		1,189		26,139
				77,265
Packaged Foods & Meats – 1.2%
Mead Johnson Nutrition Company		410		30,030
Real Estate Services – 1.5%
CB Richard Ellis Group, Inc. (B)		2,049		37,731
Regional Banks – 4.6%
First Republic Bank		1,407		48,469
Signature Bank (B)		808		54,188
UMB Financial Corporation		405		19,701
				122,358
Restaurants – 1.5%
Dunkin’ Brands Group, Inc.		1,321		38,562
Semiconductor Equipment – 1.5%
Lam Research Corporation (B)		1,229		39,069

76 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Mid Cap Growth Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS (Continued)	Shares		Value
Semiconductors – 4.6%
ARM Holdings plc, ADR		1,011	$	28,278
Cavium Inc. (B)		1,028		34,257
Microchip Technology Incorporated		1,674		54,813
				117,348
Specialty Stores – 3.4%
PetSmart, Inc.		573		39,519
Ulta Salon, Cosmetics & Fragrance, Inc.		502		48,334
				87,853
Systems Software – 1.2%
Red Hat, Inc. (B)		242		13,788
ServiceNow, Inc. (B)		459		17,768
				31,556
Trading Companies & Distributors – 2.0%
Fastenal Company		1,237		53,157
TOTAL COMMON STOCKS – 95.4%			$	2,480,799
(Cost: $2,253,885)
SHORT-TERM SECURITIES	Principal
Certificate Of Deposit – 0.2%
Banco del Estado de Chile, 0.260%, 10–1–12	$	5,000		5,000
Commercial Paper – 3.7%
BHP Billiton Finance (USA) Limited (GTD by BHP Billiton Limited),
0.180%, 10–2–12 (D)		10,000		10,000
Corporacion Andina de Fomento,
0.260%, 10–22–12 (D)		5,600		5,599

SHORT-TERM SECURITIES (Continued)	Principal		Value
Commercial Paper (Continued)
Danaher Corporation, 0.160%, 10–15–12 (D)	$	10,900	$	10,899
E.I. du Pont de Nemours and Company, 0.140%, 11–15–12 (D)		10,000		9,998
Ecolab Inc., 0.340%, 10–10–12 (D)		5,000		5,000
GlaxoSmithKline Finance plc (GTD by GlaxoSmithKline plc), 0.120%, 10–18–12 (D)		15,000		14,999
Harley-Davidson Funding Corp., 0.340%, 10–2–12 (D)		15,000		14,999
Hewlett-Packard Company, 0.400%, 10–5–12 (D)		10,000		10,000
John Deere Financial Limited (GTD by John Deere Capital Corporation), 0.150%, 10–15–12 (D)		5,000		5,000
Praxair, Inc., 0.080%, 10–11–12 (D)		7,000		7,000
Total Capital Canada Ltd. (GTD by Total S.A.), 0.140%, 11–6–12 (D)		5,000		4,999
				98,493
Master Note – 0.1%
Toyota Motor Credit Corporation, 0.122%, 10–5–12 (E)		1,861		1,861
Municipal Obligations – Taxable – 0.3%
CA Statewide Cmnty Dev Auth, Multifam Hsng Rev Bonds (1030 Post Street Apts), Ser 2005 Y, 0.180%, 10–4–12 (E)		2,043		2,043

SHORT-TERM SECURITIES (Continued)	Principal		Value
Municipal Obligations – Taxable (Continued)
MS Business Fin Corp, Gulf Opp Zone Indl Dev Rev Bonds (Chevron U.S.A. Inc. Proj), Ser 2007B,
0.190%, 10–1–12 (E)	$	4,331	$	4,331
NY Hsng Fin Agy, Related West 30th Street Hsng Rev Bonds, Ser 2012 A-1 (GTD by Wells Fargo Bank, N.A.), 0.180%, 10–3–12 (E)		1,610		1,610
				7,984
United States Government Agency Obligations – 0.2%
Overseas Private Investment Corporation (GTD by United States Government),
0.170%, 10–3–12 (E)		4,000		4,000
TOTAL SHORT-TERM SECURITIES – 4.5%			$	117,338
(Cost: $117,338)
TOTAL INVESTMENT SECURITIES – 99.9%			$	2,598,137
(Cost: $2,371,223)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 0.1%				3,646
NET ASSETS – 100.0%			$	2,601,783

Notes to Schedule of Investments

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

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

(C) All or a portion of the security position is held in collateralized accounts for OTC derivatives collateral as governed by International Swaps and Derivatives Association, Inc. Master Agreements.

(D) Rate shown is the yield to maturity at September 30, 2012.

(E) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

2012 SEMIANNUAL REPORT 77

SCHEDULE OF INVESTMENTS

Ivy Mid Cap Growth Fund SEPTEMBER 30, 2012 (UNAUDITED)

The following written options were outstanding at September 30, 2012 (contracts and exercise prices unrounded):

Underlying Security	Counterparty, if OTC	Type	Number of Contracts		Expiration Month		Exercise Price		Premium Received		Market Value
Fortune Brands Home & Security, Inc.	Citibank, N.A.	Call		5,895		October 2012	$	24.00	$	1,419	$	(1,835	)
Martin Marietta Materials, Inc.	Deutsche Bank AG	Call		2,554		October 2012		86.00		2,311		(376	)
Ubiquiti Networks, Inc.	UBS Securities LLC	Put		769		October 2012		29.00		1,332		(1,331	)
	Morgan Stanley Smith Barney LLC	Put		770		October 2012		29.00		1,330		(1,332	)
	Morgan Stanley Smith Barney LLC	Put		1,044		October 2012		30.00		1,907		(1,911	)
	UBS Securities LLC	Put		1,920		October 2012		30.00		3,590		(3,514	)
									$	11,889	$	(10,299	)

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 2 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks	$	2,480,799	$	—	$	—
Short-Term Securities		—		117,338		—
Total	$	2,480,799	$	117,338	$	—
Liabilities
Written Options	$	—	$	10,299	$	—

The following acronyms are used throughout this schedule:

ADR = American Depositary Receipts

GTD = Guaranteed

OTC = Over the Counter

See Accompanying Notes to Financial Statements.

78 SEMIANNUAL REPORT 2012

PORTFOLIO HIGHLIGHTS

Ivy Money Market Fund

ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Corporate Obligations	58.4%
Commercial Paper	28.7%
Notes	26.7%
Certificate Of Deposit	3.0%
Municipal Obligations	37.4%
United States Government and Government Agency Obligations	3.5%
Cash and Other Assets, Net of Liabilities	0.7%

Lipper Rankings

Category: Lipper Money Market Funds	Rank	Percentile
1 Year	42/245	18
3 Year	29/233	13
5 Year	40/222	18
10 Year	74/182	41

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

2012 SEMIANNUAL REPORT 79

SCHEDULE OF INVESTMENTS

Ivy Money Market Fund (in thousands)

SEPTEMBER 30, 2012 (UNAUDITED)

CORPORATE OBLIGATIONS	Principal		Value
Certificate Of Deposit
Banco del Estado de Chile:
0.980%, 7–19–13	$	4,500	$	4,500
0.800%, 9–10–13		1,365		1,365
TOTAL CERTIFICATE OF DEPOSIT – 3.0%				5,865
Commercial Paper
BHP Billiton Finance (USA) Limited (GTD by BHP Billiton Limited):
0.180%, 10–2–12 (A)		2,000		2,000
0.190%, 11–13–12 (A)		2,200		2,199
Chicago Midway Intl Arpt, 2003 Program, Ser C (GTD by JPMorgan Chase & Co.),
0.220%, 11–14–12 (A)		2,100		2,100
Coca-Cola Company (The):
0.220%, 11–19–12 (A)		1,000		1,000
0.200%, 1–10–13 (A)		1,200		1,199
0.240%, 3–1–13 (A)		2,000		1,998
Corporacion Andina de Fomento:
0.390%, 10–4–12 (A)		1,000		1,000
0.260%, 10–22–12 (A)		1,600		1,600
0.350%, 12–4–12 (A)		1,300		1,299
0.800%, 5–28–13 (A)		4,825		4,799
Danaher Corporation:
0.160%, 10–15–12 (A)		1,000		1,000
0.160%, 10–22–12 (A)		4,500		4,499
Kroger Co. (The),
0.390%, 10–1–12 (A)		960		960
L’Air Liquide S.A.:
0.180%, 10–1–12 (A)		1,100		1,100
0.160%, 10–12–12 (A)		1,354		1,354
0.180%, 10–15–12 (A)		1,000		1,000
Muni Elec Auth GA, Gen Resolution Proj Bond Anticipation Notes, Ser B (Taxable), (GTD by Wells Fargo Bank, N.A.),
0.180%, 10–4–12 (A)		6,000		6,000
Muni Impvt Corp of Los Angeles, Lease Rev (GTD by JPMorgan Chase & Co.),
0.200%, 11–5–12 (A)		1,000		1,000
River Fuel Funding Company #3, Inc. (GTD by Bank of Nova Scotia),
0.180%, 10–31–12 (A)		3,755		3,754
River Fuel Trust #1 (GTD by Bank of Nova Scotia):
0.230%, 10–2–12 (A)		3,592		3,592
0.240%, 10–31–12 (A)		1,800		1,800
Unilever Capital Corporation,
0.450%, 1–17–13 (A)		1,600		1,598
Wisconsin Electric Power Co.:
0.230%, 10–4–12 (A)		3,700		3,700
0.210%,10–11–12 (A)		6,075		6,075
TOTAL COMMERCIAL PAPER – 28.7%				56,626

CORPORATE OBLIGATIONS (Continued)	Principal		Value
Notes
American Honda Finance Corp. (GTD by Honda Motor Co.):
0.510%, 11–2–12 (B)	$	1,200	$	1,200
0.660%, 12–7–12 (B)		4,300		4,300
Banco del Estado de Chile,
0.990%, 12–24–12 (B)		3,000		3,000
Bank of Nova Scotia,
0.700%, 10–19–12 (B)		2,800		2,805
BellSouth Corporation (GTD by AT&T Inc.),
3.950%, 4–26–13 (B)		7,000		7,128
Caterpillar Inc.,
0.530%, 11–21–12 (B)		2,250		2,251
General Electric Capital Corporation:
5.250%, 10–19–12		6,596		6,610
2.800%, 1–8–13		750		755
5.450%, 1–15–13		1,100		1,115
General Electric Company,
5.000%, 2–1–13		250		254
IBM International Group Capital LLC (GTD by International Business Machines Corporation),
0.710%, 11–26–12 (B)		1,500		1,500
Kimberly-Clark Corporation,
4.028%, 12–19–12		7,300		7,357
The Academy of the New Church, Var Rate Demand Bonds, Ser 2008 (GTD by Wachovia Bank, N.A.),
0.210%, 10–4–12 (B)		1,985		1,985
Toyota Motor Credit Corporation:
0.650%, 10–24–12 (B)		1,300		1,300
0.590%, 12–17–12 (B)		7,300		7,300
Trap Rock Industries, Inc., Var Demand Bonds, Ser 2005 (GTD by Wachovia Bank, N.A.),
0.210%, 10–4–12 (B)		1,345		1,345
Wachovia Corporation, (GTD by Wells Fargo Bank, N.A.),
5.500%, 5–1–13		2,500		2,573
TOTAL NOTES – 26.7%				52,778
TOTAL CORPORATE OBLIGATIONS – 58.4%			$	115,269
(Cost: $115,269)

MUNICIPAL OBLIGATIONS	Principal		Value
Arizona – 0.2%
The Indl Dev Auth of Phoenix, AZ, Adj Mode Multifam Hsng Rev Rfdg Bonds (Paradise Lakes Apt Proj), Ser 2007A (GTD by Wachovia Bank, N.A.),
0.190%, 10–4–12 (B)	$	412	$	412
California – 3.3%
CA Muni Fin Auth, Recovery Zone Fac Bonds (Chevron U.S.A. Inc. Proj), Ser 2010C (GTD by Chevron Corporation),
0.190%, 10–1–12 (B)		1,300		1,300
CA Statewide Cmnty Dev Auth, Multifam Hsng Rev Bonds (Wyndover Apts), Ser 2004 LL (GTD by United States Government),
0.170%, 10–4–12 (B)		3,165		3,165
Irvine Unif Sch Dist, Cmnty Fac Dist No. 09-1, Adj Rate Spl Tax Bonds, Ser 2012 A (GTD by U.S. Bank,N.A.),
0.170%, 10–1–12 (B)		2,000		2,000
				6,465
Colorado – 5.1%
Castle Rock, CO, Cert of Part, Ser 2008 (GTD by Wells Fargo Bank, N.A.),
0.240%, 10–3–12 (B)		5,415		5,415
CO Hsng and Fin Auth, Multifam Hsng Rev Bonds (Greentree Vlg Apts Proj), Ser 2007 (GTD by U.S. Bank, N.A.), 0.200%, 10–4–12 (B)		3,980		3,980
Exempla Gen Impvt Dist of Lafayette, CO, Spl Impvt Dist No. 02-01, Spl Assmt Rev Rfdg and Impvt Bonds, Ser 2002 (GTD by Wells Fargo Bank, N.A.), 0.190%, 10–4–12 (B)		475		475
Sheridan Redev Agy CO Tax, Var Rfdg S Santa Fe Dr Corridor Redev PJ-Ser A-1 (GTD by JPMorgan Chase & Co.), 0.500%, 10–4–12 (B)		250		250
				10,120

80 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Money Market Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

MUNICIPAL OBLIGATIONS (Continued)	Principal		Value
Georgia – 1.6%
Dev Auth of Monroe Cty, Pollutn Ctl Rev Bonds (GAPower Co Plant Scherer Proj), First Ser 2008 (GTD by Georgia Power Company), 0.240%, 10–1–12 (B)	$	3,083	$	3,083
Illinois – 0.7%
IL Fin Auth, Var Rate Demand Rev Bonds (Provena Health), Ser 2009B (GTD by JPMorgan Chase & Co.), 0.200%, 10–1–12 (B)		1,000		1,000
IL Fin Auth, Var Rate Demand Rev Bonds (The Univ of Chicago Med Ctr), Ser D (GTD by JPMorgan Chase & Co.), 0.190%, 10–1–12 (B)		310		310
				1,310
Indiana – 2.5%
IN Fin Auth, Hlth Sys Rev Bonds (Sisters of St. Francis Hlth Svcs, Inc. Oblig Group), Ser 2009H (GTD by JPMorgan Chase Bank, N.A.), 0.180%, 10–3–12 (B)		5,000		5,000
Louisiana – 1.3%
LA Pub Fac Auth, Rev Bonds (Air Products and Chemicals Proj), Ser 2008A (GTD by Air Products and Chemicals, Inc.), 0.180%, 10–1–12 (B)		2,111		2,111
Parish of St. Bernard, LA, Exempt Fac Rev Bonds (Mobil Oil Corp Proj), Ser 1996 (GTD by Exxon Mobil Corporation), 0.210%, 10–1–12 (B)		500		500
				2,611
Maryland – 1.0%
MD Hlth and Higher Edu Fac Auth Rev Bonds, Anne Arundel Hlth Sys Issue, Ser 2009A (GTD by Toronto Dominion Bank), 0.190%, 10–3–12 (B)		1,915		1,915
Minnesota – 0.4%
Minneapolis, MN, Var Rate Demand Rev Bonds (People Serving People Proj), Ser 2000A, 0.200%, 10–1–12 (B)		690		690

MUNICIPAL OBLIGATIONS (Continued)	Principal		Value
Mississippi – 7.9%
MS Business Fin Corp, Adj Mode Indl Dev Rev Bonds (Belk, Inc. Proj), Ser 2005 (GTD by Wachovia Bank, N.A.), 0.210%, 10–4–12 (B)	$	4,925	$	4,925
MS Business Fin Corp, Gulf Opp Zone Indl Dev Rev Bonds (Chevron U.S.A. Inc. Proj), Ser 2007D (GTD by Chevron Corporation), 0.190%, 10–1–12 (B)		7,300		7,300
MS Business Fin Corp, Gulf Opp Zone Indl Dev Rev Bonds (Chevron U.S.A. Inc. Proj), Ser 2010J (GTD by Chevron Corporation), 0.190%, 10–1–12 (B)		3,400		3,400
				15,625
Missouri – 0.5%
Kansas City, MO, Var Rate Demand Taxable Spl Oblig Rfdg Bonds (President Hotel Redev Proj), Ser 2009B (GTD by JPMorgan Chase & Co.), 0.250%, 10–3–12 (B)		950		950
New York – 1.0%
NY Hsng Fin Agy, Related-Caroline Apt Hsng Rev Bonds, Ser 2008A (GTD by Federal Home Loan Mortgage Corporation), 0.190%, 10–3–12 (B)		2,000		2,000
Texas – 5.9%
Harris Cnty Hosp Dist, Sr Lien Rfdg Rev Bonds, Ser 2010 (GTD by JPMorgan Chase & Co.), 0.180%, 10–4–12 (B)		6,760		6,760
Port Arthur Navigation Dist Indl Dev Corp, Exempt Fac Var Rate Rev Bonds (Air Products Proj), Ser 2005 (GTD by Air Products and Chemicals, Inc.), 0.180%, 10–1–12 (B)		2,925		2,925
Port Arthur Navigation Dist Indl Dev Corp, Exempt Fac Var Rate Rev Bonds (Air Products Proj), Ser 2006 (GTD by Air Products and Chemicals, Inc.), 0.180%, 10–1–12 (B)		2,000		2,000
				11,685

MUNICIPAL OBLIGATIONS (Continued)	Principal		Value
Wisconsin – 2.1%
Ladysmith, WI, Var Rate Demand Indl Dev Rev Bonds (Indeck Ladysmith, LLC Proj), Ser 2009A (GTD by Wells Fargo Bank, N.A.), 0.260%, 10–4–12 (B)	$	2,280	$	2,280
WI Hlth and Edu Fac Auth, Var Rate Demand Rev Bonds (Wausau Hosp, Inc.), Ser 1998B (GTD by JPMorgan Chase Bank, N.A.), 0.180%, 10–3–12 (B)		770		770
WI Hlth and Edu Fac Auth, Var Rate Rev Bonds (Aurora Hlth Care Inc.), Ser 2008-A (GTD by U.S. Bank, N.A.), 0.180%, 10–3–12 (B)		1,100		1,100
				4,150
Wyoming – 3.9%
Uinta Cnty, WY, Pollutn Ctl Rfdg Rev Bonds (Chevron U.S.A. Inc. Proj), Ser 1992 (GTD by Chevron Corporation), 0.190%, 10–1–12 (B)		7,783		7,783
TOTAL MUNICIPAL OBLIGATIONS – 37.4%			$	73,799
(Cost: $73,799)
UNITED STATES GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS
Treasury Bills
United States Treasury Bills:
0.080%, 12–13–12		1,000		1,000
0.140%, 3–28–13		1,300		1,299
TOTAL TREASURY BILLS – 1.2%			$	2,299
United States Government Agency Obligations
Overseas Private Investment Corporation (GTD by United States Government):
0.160%, 10–3–12 (B)		1,614		1,614
0.160%, 10–3–12 (B)		833		833
0.500%, 12–9–12 (B)		985		985

2012 SEMIANNUAL REPORT 81

SCHEDULE OF INVESTMENTS

Ivy Money Market Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

UNITED STATES GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Continued)	Principal		Value
United States Government Agency Obligations (Continued)
Totem Ocean Trailer Express, Inc. (GTD by United States Government), 0.640%, 10–15–12 (B)	$	1,199	$	1,199
TOTAL UNITED STATES GOVERNMENT AGENCY OBLIGATIONS – 2.3%			$	4,631
TOTAL UNITED STATES GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS – 3.5%			$	6,930
(Cost: $6,930)
TOTAL INVESTMENT SECURITIES –99.3%			$	195,998
(Cost: $195,998)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 0.7%				1,346
NET ASSETS – 100.0%			$	197,344

Notes to Schedule of Investments

(A) Rate shown is the yield to maturity at September 30, 2012.

(B) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets or the next demand date.

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Corporate Obligations	$	—	$	115,269	$	—
Municipal Obligations		—		73,799		—
United States Government Agency Obligations		—		6,930		—
Total	$	—	$	195,998	$	—

The following acronym is used throughout this schedule:

GTD = Guaranteed

See Accompanying Notes to Financial Statements.

82 SEMIANNUAL REPORT 2012

PORTFOLIO HIGHLIGHTS

Ivy Municipal Bond Fund

ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Bonds	84.3%
Municipal Bonds	84.3%
Cash and Cash Equivalents	15.7%

Lipper Rankings

Category: Lipper General Municipal Debt Funds	Rank	Percentile
1 Year	197/251	79
3 Year	89/222	40
5 Year	48/199	24
10 Year	64/163	40

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Quality Weightings

Investment Grade	79.2%
AAA	2.0%
AA	25.3%
A	29.8%
BBB	22.1%
Non-Investment Grade	5.1%
Below CCC	0.1%
Non-rated	5.0%
Cash and Cash Equivalents	15.7%

Our preference is to always use ratings obtained from Standard & Poor’s. For securities not rated by Standard & Poor’s, ratings are obtained from Moody’s.

2012 SEMIANNUAL REPORT 83

SCHEDULE OF INVESTMENTS

Ivy Municipal Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

MUNICIPAL BONDS	Principal		Value
Alabama – 1.5%
The Pub Edu Bldg Auth of Tuscaloosa, Student Hsng Rev Bonds (Univ of AL Ridgecrest Residential Proj), Ser 2008, 6.750%, 7–1–33	$	500	$	595
The Spl Care Fac Fin Auth of Birmingham – Children’s Hosp, Hlth Care Fac Rev Bonds, Children’s Hosp, Ser 2009, 6.000%, 6–1–39		750		891
Water Works Board of Birmingham, AL, Water Rev Bonds, Ser 2009-A, 5.125%, 1–1–34		750		836
				2,322
Arizona – 1.6%
AZ Cert of Part, Ser 2010A (Insured by AGM), 5.250%, 10–1–26		1,000		1,166
Bullhead City, AZ, Bullhead Prkwy Impvt Dist, Impvt Bonds, 6.100%, 1–1–13		175		177
Rio Nuevo Multipurp Fac Dist (Tucson, AZ), Sub Lien Excise Tax Rev Bonds, Ser 2008, 6.625%, 7–15–25		500		596
Univ Med Ctr Corp (Tucson, AZ), Hosp Rev Bonds, Ser 2009, 6.500%, 7–1–39		500		583
				2,522
California – 10.7%
Bay Area Toll Auth, San Francisco Bay Area Toll Bridge Rev Bonds, 2008 Ser D-1 Index Rate Bonds, 1.041%, 4–1–45 (A)		1,000		1,002
CA Hlth Fac Fin Auth, Rev Bonds (Adventist Hlth Sys/West), Ser 2009A, 5.750%, 9–1–39		750		843
CA Muni Fin Auth, Cmnty Hosp of Cent CA Oblig Group Cert of Part, 5.500%, 2–1–39		460		487
CA Pollutn Ctl Fin Auth, Solid Waste Disp Rev Bonds (Republic Svc, Inc. Proj) Ser 2002B, 5.250%, 6–1–23		415		478
CA Statewide Cmnty Dev Auth, Insd Rev Bonds (Henry Mayo Newhall Mem Hosp), Ser 2007A, 5.000%, 10–1–37		500		518

MUNICIPAL BONDS (Continued)	Principal		Value
California (Continued)
CA Statewide Cmnty Dev Auth, Student Hsng Rev Bonds (Univ of CA, Irvine East Campus Apt, Phase I Rfdg-CHF-Irvine, L.L.C.), Ser 2011, 5.000%, 5–15–21	$	1,195	$	1,374
CA Various Purp GO Bonds:
5.000%, 2–1–22		495		524
5.250%, 9–1–26		1,500		1,809
5.250%, 10–1–29		500		575
6.500%, 4–1–33		1,000		1,264
6.000%, 11–1–39		500		603
Cnty of Sacramento, Arpt Sys Sub and PFC/Grant Rev Bonds, Ser 2009, 5.125%, 7–1–25		500		572
Golden State Tob Securitization Corp, Tob Stlmt Asset-Bkd Bonds, Ser 2003B, 5.000%, 6–1–43		1,000		1,032
Golden State Tob Securitization Corp, Tob Stlmt Asset-Bkd Bonds, Ser 2003A-1, 6.750%, 6–1–39		200		209
Los Angeles Unif Sch Dist (Cnty of Los Angeles, CA), GO Bonds, Election of 2005, Ser 2009 F, 5.000%, 1–1–34		500		567
Mountain View Shoreline Reg Park Comnty (Santa Clara Cnty, CA), Rev Bonds, Ser 2011A, 5.000%, 8–1–21		250		277
Palomar Pomerado Hlth, San Diego Cnty, CA, Cert of Part, 6.750%, 11–1–39		250		281
Redev Agy for Riverside, Interstate 215 Corridor Redev Proj Area, 2010 Tax Alloc Bonds, Ser E, 5.250%, 10–1–20		570		608
Redev Agy for Riverside, Interstate 215 Corridor Redev Proj Area, Ser 2010 E, 6.000%, 10–1–25		445		486
Riverside Cmnty College Dist, Riverside Cnty, CA, Election of 2004, GO Bonds, Ser 2004A (Insured by NPFGC), 5.500%, 8–1–29		200		219
San Jose, CA Arpt Rev Bonds, Ser 2011A-1, 5.250%, 3–1–21		500		583

MUNICIPAL BONDS (Continued)	Principal		Value
California (Continued)
Southn CA Pub Power Auth, Transmission Proj Rev Bonds (Southn Transmission Proj), Ser 2008B, 6.000%, 7–1–27	$	500	$	598
State Pub Works Board of CA, Lease Rev Bonds (Various Cap Proj), Ser 2011A:
5.250%, 10–1–24		500		591
5.000%, 12–1–24		500		569
Trustees of the CA State Univ Syswide Rev Bonds, Ser 2002A (Insured by AMBAC):
5.500%, 11–1–12		15		15
5.500%, 11–1–15		235		236
Upland Unif Sch Dist (San Bernardino Cnty, CA), Election of 2008 GO Bonds, Ser A, 0.000%, 8–1–31 (B)		150		62
Vernon Elec Sys Rev Bonds, Ser 2012A, 5.500%, 8–1–41		315		344
				16,726
Colorado – 3.4%
Adams 12 Five Star Sch, Adams and Broomfield Cnty, CO Cert of Part, Ser 2008, 5.000%, 12–1–25		500		557
City and Cnty of Broomfield, CO, Rfdg Cert of Part, Ser 2010, 5.000%, 12–1–23		500		589
CO Edu and Cultural Fac Auth, Independent Sch Rev Rfdg Bonds (Vail Mountain Sch Proj), Ser 2010, 6.125%, 5–1–40		475		517
CO Hsng and Fin Auth, Sngl Fam Mtg Class I Bonds,Ser 2009A (Insured by FHA/VA), 5.500%, 11–1–29		400		410
CO Hsng and Fin Auth, Sngl Fam Prog Sr and Sub Bonds, Ser 2001A-2, 6.500%, 8–1–31		240		252
Denver Hlth and Hosp Auth, Hlthcare Recovery Zone, Fac Rev Bds, Ser 2010, 5.625%, 12–1–40		500		555
Joint Sch Dist No. 28J, Adams and Arapahoe Cnty, CO, GO Bonds, Ser 2008, 6.000%, 12–1–28		500		655

84 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Municipal Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

MUNICIPAL BONDS (Continued)	Principal		Value
Colorado (Continued)
Lincoln Park Metro Dist, Douglas Cnty, CO, GO Rfdg and Impvt Bonds, Ser 2008, 6.125%, 12–1–30	$	500	$	522
Platte Vly Fire Protection Dist, Weld Cnty, CO, Cert of Part, Ser 2012, 5.000%, 12–1–36		300		319
Rgnl Trans Dist, Private Activity Bonds (Denver Transit Partn Eagle P3 Proj), Ser 2010, 6.500%, 1–15–30		750		908
				5,284
Connecticut – 0.9%
Cap City Econ Dev Auth, Prkg and Enrg Fee Rev Bonds, Ser 2008D, 5.000%, 6–15–22		370		428
CT GO Bonds, Series D, 0.000%, 9–15–19 (A)(C)		1,000		1,005
				1,433
District Of Columbia – 1.7%
DC GO Rfdg Bonds, Ser 2008F (Insured by BHAC), 5.000%, 6–1–19		1,000		1,185
DC Hosp Rev Bonds (Sibley Mem Hosp Issue), Ser 2009, 6.375%, 10–1–39		750		872
Metro Washington Arpt Auth, Dulles Toll Road, Second Sr Lien Rev Bonds, Ser 2009C, 0.000%, 10–1–41 (B)		500		499
				2,556
Florida – 7.1%
Brevard Cnty Hlth Fac Auth, Hlth Rev Bonds (Hlth First, Inc. Proj), Ser 2009B, 7.000%, 4–1–39		500		616
Brevard Cnty, FL, Indl Dev Rev Bonds (TUFF FL Tech Proj), Ser 2009, 6.750%, 11–1–39		500		560
Citizens Ppty Ins Corp, Sr Secured Bonds, Ser 2012A-1, 1.430%, 6–1–15 (A)		1,000		1,005
Citizens Ppty Ins Corp, Sr Secured Rev Bonds, Ser 2010A-1, 5.250%, 6–1–17		400		463
Hillsborough Cnty Indl Dev Auth, Indl Dev Rev Bonds, Hlth Fac Proj (Univ Cmnty Hosp), Ser 2008A, 5.625%, 8–15–29		555		707

MUNICIPAL BONDS (Continued)	Principal		Value
Florida (Continued)
Hillsborough Cnty Indl Dev Auth, Indl Dev Rev Bonds, Hlth Fac Proj (Univ Cmnty Hosp), Ser 2008B, 8.000%, 8–15–32	$	600	$	858
Jacksonville, FL Better Jacksonville Sales Tax Rev Bonds, Ser 2003 (Insured by NPFGC), 5.250%, 10–1–19		250		262
Miami-Dade Cnty, FL, Aviation Rev Bonds, Miami Intl Arpt (Hub of the Americas), Ser 2009A, 5.500%, 10–1–36		500		568
Miami-Dade Cnty, FL, Aviation Rev Bonds, Ser 2010A, 5.500%, 10–1–41		385		439
Miami-Dade Cnty, FL, Aviation Rev Bonds, Ser 2010B, 5.000%, 10–1–23		500		571
Miami-Dade Cnty, FL, GO Bonds (Bldg Better Cmnty Prog), Ser 2008B, 6.250%, 7–1–26		500		601
Miami-Dade Cnty, FL, Water and Sewer Sys Rev Rfdg Bonds, Ser 2008B (Insured by AGM), 5.250%, 10–1–22		500		634
Miami-Dade Cnty, FL, Water and Sewer Sys Rev Rfdg Bonds, Ser 2008C (Insured by BHAC), 5.000%, 10–1–17		500		598
Mid-Bay Bridge Auth, Springing Lien Rev Bonds, Ser 2011A, 7.250%, 10–1–34		500		634
Pinellas Cnty Edu Fac Auth, Rev Rfdg Prog Bonds (Barry Univ Proj), Ser 2012, 5.250%, 10–1–30		750		823
Port St. Lucie, FL, Spl Assmt Rfdg Bonds (City Ctr Spl Assmt Dist), Ser 2008A, 5.750%, 7–1–20		500		584
St. Johns Cnty Indl Dev Auth, Rev Bonds (Presbyterian Ret Cmnty Proj), Ser 2010A, 5.875%, 8–1–40		500		558

MUNICIPAL BONDS (Continued)	Principal		Value
Florida (Continued)
Volusia Cnty Edu Fac Auth, Edu Fac Rev Rfdg Bonds (Embry-Riddle Aeronautical Univ, Inc. Proj.) Ser 2011, 5.250%, 10–15–22	$	500	$	569
				11,050
Georgia – 0.8%
Atlanta, GA, Water and Wastewater Rev Bonds, Ser 2009B, 5.375%, 11–1–39		500		573
Dev Auth of Alpharetta, GA, Edu Fac Rev Bonds (Fulton Science Academy Proj), Ser 2011A, 6.250%, 7–1–31		130		78
Muni Elec Auth of GA, Proj One Sub Bonds, Ser 2008D, 5.750%, 1–1–20		500		612
				1,263
Hawaii – 0.8%
HI Arpt Sys Rev Bond, Rfdg Ser 2011, 5.000%, 7–1–21		1,000		1,170
Illinois – 2.9%
Belleville, IL, Tax Incr Rfdg Rev Bonds (Frank Scott Pkwy Redev Proj), Ser 2007A:
5.000%, 5–1–26		225		219
5.700%, 5–1–36		250		252
Build IL Sales Tax Rev Bonds, Ser 2011, 5.000%, 6–15–27		500		584
Chicago GO Bonds, Proj and Rfdg, Ser 2004A (Insured by AGM), 5.250%, 1–1–21		250		263
Chicago GO Bonds, Proj Ser 2011A, 5.250%, 1–1–35		200		226
IL Fin Auth, Rev and Rfdg Bonds (Roosevelt Univ Proj), Ser 2009, 6.500%, 4–1–39		500		566
IL Fin Auth, Rev Bonds, The Univ of Chicago, Ser 2008B, 5.500%, 7–1–19		500		626
IL Fin Auth, Student Hsng Rev Bonds (CHF-DeKalb, L.L.C.–Northn IL Univ Proj), Ser 2011, 5.750%, 10–1–21		395		463
IL GO Bonds, Ser 2012A, 4.000%, 1–1–23		1,250		1,328
				4,527

2012 SEMIANNUAL REPORT 85

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Ivy Municipal Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

MUNICIPAL BONDS (Continued)	Principal		Value
Indiana – 1.4%
East Chicago Elem Sch Bldg Corp (Lake Cnty, IN), First Mtg Bonds, Ser 1993A, 5.500%, 1–15–16	$	155	$	156
Hammond IN, Redev Dist Rev Bonds (Marina Area Proj), Ser 2008, 6.000%, 1–15–17		500		529
IN Fin Auth, Fac Rev Rfdg Bonds (Miami Correctional Fac–Phase II), Ser 2008C, 5.000%, 7–1–17		500		587
IN Hlth and Edu Fac Fin Auth, Hosp Rev Bonds (Cmnty Fndtn of NW IN Oblig Group), Ser 2007, 5.500%, 3–1–37		250		264
Mt. Vernon Sch Bldg Corp of Hancock Cnty, IN, First Mtg Bonds, Ser 2007 (Insured by AGM), 5.250%, 1–15–32		500		548
				2,084
Iowa – 0.7%
Altoona, IA, Annual Appropriation Urban Renewal Tax Incr Rev Bonds, Ser 2008, 6.000%, 6–1–34		1,000		1,087
Kansas – 1.4%
Arkansas City, KS Pub Bldg Comsn, Rev Bonds (South Cent KS Rgnl Med Ctr), Ser 2009, 7.000%, 9–1–38		500		594
Sedgwick Cnty, KS and Shawnee Cnty, KS, Sngl Fam Mtg Rev Bonds (Mtg-Bkd Sec Prog), Ser 2003A-2 (Insured by GNMA/FNMA), 5.650%, 6–1–35		90		97
Shawnee Cnty, KS Cert of Part (First Responders Comm Proj), Ser 2012, 5.000%, 9–1–24		1,050		1,204
Unif Govt of Wyandotte Cnty/Kansas City, KS, Sales Tax Spl Oblig (Redev Proj Area B–Major Multi-Sport Athletic Complex Proj), Ser 2010B, 0.000%, 6–1–21 (B)		400		283
				2,178
Kentucky – 1.9%
Cmnwlth of KY, State Ppty and Bldg Comsn, Rev and Rev Rfdg Bonds, Proj No. 90, 5.750%, 11–1–19		500		623

MUNICIPAL BONDS (Continued)	Principal		Value
Kentucky (Continued)
KY Econ Dev Fin Auth, Hosp Rev Bonds, Ser 2010A:
5.500%, 6–1–21	$	500	$	585
6.500%, 3–1–45		675		805
Louisville Rgnl Arpt Auth, Arpt Sys Rev Bonds, Ser 2008A, 5.250%, 7–1–28		500		544
Tpk Auth of KY, Econ Dev Road Rev Bonds (Revitalization Proj), Ser 2008A, 5.000%, 7–1–16		330		382
				2,939
Louisiana – 3.2%
LA Citizens Prop Ins Corp, Assmt Rev Rfdg Bonds, Ser 2012, 5.000%, 6–1–24		500		571
LA Local Govt Envirnmt Fac and Cmnty Dev Auth, Hosp Rev Bonds (Women’s Hosp Fndtn Gulf Opp Zone Proj), Ser 2010B, 6.000%, 10–1–44		750		853
New Orleans Aviation Board, Rev Rfdg Bonds (Restructuring GARBs), Ser 2009A-1, 6.000%, 1–1–23		500		593
New Orleans, LA, GO Rfdg Bonds, Ser 2012 (Insured by AGM), 5.000%, 12–1–26		1,500		1,747
Rgnl Transit Auth, New Orleans, LA, Sales Tax RevBonds, Ser 2010 (Insured by AGM), 5.000%, 12–1–22		1,000		1,183
				4,947
Maryland – 1.1%
MD Econ Dev Corp, Pollutn Ctl Rev Rfdg Bonds (Potomac Elec Proj), Ser 2006, 6.200%, 9–1–22		500		617
MD Hlth and Higher Edu Fac Auth Rev Bonds, Johns Hopkins Hlth Sys Oblig Group Issue, Ser 2012D, 0.974%, 5–15–38 (A)		1,000		1,003
				1,620
Massachusetts – 1.0%
MA Dev Fin Agy, Rev Bonds, Foxborough Rgnl Charter Sch Issue, Ser 2010, 6.375%, 7–1–30		500		571
MA Edu Fin Auth, Edu Loan Rev Bonds, Issue I, Ser 2009, 6.000%, 1–1–28		390		449

MUNICIPAL BONDS (Continued)	Principal		Value
Massachusetts (Continued)
MA Port Auth, PFC Rev Rfdg Bonds, Ser 2010-E, 5.000%, 7–1–15	$	500	$	545
				1,565
Michigan – 2.7%
Detroit, MI, Water Supply Sys Rev, Sr Lien Bonds, Ser 2011-A, 5.750%, 7–1–37		500		561
Kalamazoo Hosp Fin Auth, Hosp Rev Rfdg Bonds (Bronson Methodist Hosp), Ser 2003A, 5.000%, 5–15–26		500		545
MI Fin Auth Rev Bonds (Detroit Sch Dist), Ser 2011, 5.500%, 6–1–21		1,000		1,162
MI State Hosp Fin Auth, Hosp Rev and Rfdg Bonds (Henry Ford Hlth Sys), Ser 2009, 5.750%, 11–15–39		750		840
State Bldg Auth, MI, 2006 Rev Rfdg Bonds (Fac Prog), Ser IA (Insured by FGIC), 0.000%, 10–15–22 (B)		1,000		659
State Bldg Auth, MI, 2008 Rev Rfdg Bonds (Fac Prog), Ser I, 5.000%, 10–15–18		305		367
				4,134
Minnesota – 0.4%
Minneapolis-St. Paul Metro Arpt Comsn, Sub Arpt Rev Rfdg Bonds, Ser 2010D, 5.000%, 1–1–20		500		575
Mississippi – 0.6%
The Univ of Southn MS, S.M. Edu Bldg Corp, Rev Bonds (Campus Fac Impvt Proj), Ser 2009, 5.375%, 9–1–36		750		865
Missouri – 4.0%
Belton, MO, Tax Incr Rev Bonds (Belton Town Centre Proj), Ser 2004, 6.250%, 3–1–24		200		201
Broadway-Fairview Trans Dev Dist (Columbia, MO), Trans Sales Tax Rev Bonds, Ser 2006A, 6.125%, 12–1–36		175		147
Hlth and Edu Fac Auth, Hlth Fac Rev Bonds (The Children’s Mercy Hosp), Ser 2009, 5.625%, 5–15–39		750		832
Indl Dev Auth of Joplin, MO, Hlth Fac Rev Bonds (Freeman Hlth Sys), Ser 2011, 5.500%, 2–15–31		750		839

86 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Municipal Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

MUNICIPAL BONDS (Continued)	Principal		Value
Missouri (Continued)
Indl Dev Auth of Kansas City, MO, Rev Bonds (Plaza Library Proj), Ser 2004, 5.900%, 3–1–24	$	200	$	203
MO Dev Fin Board, Infra Fac Rev Bonds (Branson Landing Proj), Ser 2004A, 5.250%, 12–1–19		65		69
MO Dev Fin Board, Infra Fac Rev Bonds (Independence, MO–Events Ctr Proj), Ser 2009A, 6.625%, 4–1–33		580		607
Platte Cnty R-III Sch Dist Bldg Corp, Leasehold Rfdg and Impvt Rev Bonds, Ser 2008, 5.000%, 3–1–28		340		382
Pub Water Supply Dist No. 1 of Lincoln Cnty, MO, Cert of Part, Ser 2009, 6.750%, 6–15–35		500		545
St. Louis Cnty, MO Indl Dev Auth, Sr Living Fac Rev Bonds (Friendship Vlg Sunset Hills), Ser 2012, 5.000%, 9–1–32		1,120		1,200
The Indl Dev Auth of Moberly, MO, Annual Appropriation Recovery Zone Fac Bonds (Proj Sugar), Ser 2010-C, 6.000%, 9–1–24 (D)		500		175
The Indl Dev Auth of Platte Cnty, MO, Trans Rev Bonds (Zona Rosa Phase II Retail Proj), Ser 2007, 6.850%, 4–1–29		250		259
The Indl Dev Auth of St. Joseph, MO, Spl Oblig Rev Bonds (St. Joseph Sewage Sys Impvt Proj), Ser 2007, 4.375%, 4–1–18		100		110
The Indl Dev Auth of St. Louis, MO, Sr Living Fac Rev Bonds (Friendship Vlg of West Cnty), Ser 2007A, 5.500%, 9–1–28		500		526
				6,095
Nevada – 0.9%
Las Vegas Redev Agy, NV, Tax Incr Rev Bonds, Ser 2009A, 8.000%, 6–15–30		500		579
Overton Power Dist No. 5 (NV), Spl Oblig Rev Bonds, Ser 2008:
6.000%, 12–1–16		75		85
6.250%, 12–1–17		270		313
Overton Power District No. 5 (NV), Spl Oblig Rev Bonds, Ser 2008, 6.500%, 12–1–18		290		346
				1,323

MUNICIPAL BONDS (Continued)	Principal		Value
New Hampshire – 0.9%
NH Hlth and Edu Fac Auth, Rev Bonds, Rivermead Issue, Ser 2011A, 6.875%, 7–1–41	$	150	$	169
NH Hlth and Edu Fac Auth, FHA Insd Mtg Rev Bonds, LRGHlthcare Issue, Ser 2009 (Insured by FHA), 7.000%, 4–1–38		500		623
NH Hlth and Edu Fac Auth, Hosp Rev Bonds, Catholic Med Ctr Issue, Ser 2002A, 6.125%, 7–1–32		245		248
NH Hsng Fin Auth, Sngl Fam Mtg Acquisition Rev Bonds, Ser 2008, 6.000%, 7–1–38		415		416
				1,456
New Jersey – 5.2%
Casino Reinvestment Dev Auth, Hotel Room Fee Rev Bonds, Ser 2004 (Insured by AMBAC), 5.250%, 1–1–19		640		686
NJ Econ Dev Auth, Rev Bonds (Provident Group-Montclair Ppty L.L.C.–Montclair St Univ Student Hsng Proj), Ser 2010A, 5.750%, 6–1–31		850		962
NJ Econ Dev Auth, Sch Fac Constr Bonds, Ser 2005O, 5.125%, 3–1–30		250		271
NJ Econ Dev Auth, Sch Fac Constr Notes, Ser 2012 H, 1.080%, 2–1–17 (A)		2,000		2,002
NJ Econ Dev Auth, Sch Fac Constr Rfdg Bonds, Ser 2011EE, 5.250%, 9–1–24		500		603
NJ Higher Edu Student Assistance Auth, Student Loan Rev Bonds, Ser 2011-1, 5.000%, 12–1–19		500		567
NJ Hlth Care Fac Fin Auth, Rev and Rfdg Bonds, Barnabas Hlth Issue, Ser 2011A, 5.625%, 7–1–37		500		554
NJ Hlth Care Fac Fin Auth, Rev Bonds, Virtua Hlth Issue, Ser 2009A, 5.500%, 7–1–38		500		556
NJ Trans Trust Fund Auth, Trans Sys Bonds, Ser 2006A (Insured by AGM/CR), 5.500%, 12–15–22		500		632
NJ Trans Trust Fund Auth, Trans Sys Bonds, Ser 2003B-2, 5.000%, 12–15–16		500		581

MUNICIPAL BONDS (Continued)	Principal		Value
New Jersey (Continued)
Passaic Vly Sewerage Commissioners (NJ), Sewer Sys Bonds, Ser G, 5.750%, 12–1–21	$	435	$	534
				7,948
New Mexico – 0.1%
NM Mtg Fin Auth, Sngl Fam Mtg Prog Class I Bonds, Ser 2006D (Insured by GNMA/FNMA/FHLMC), 6.000%, 1–1–37		60		64
NM Mtg Fin Auth, Sngl Fam Mtg Prog Class I Bonds, Ser 2008D-2 (Insured by GNMA/FNMA/FHLMC), 5.250%, 7–1–30		110		118
				182
New York – 2.2%
NY Enrg Research and Dev Auth, Pollutn Ctl Rev Bonds (Niagara Mohowak Power Corp Proj), Ser 1985 A (Insured by AMBAC), 0.536%, 12–1–23 (A)		1,380		1,334
NYC Indl Dev Agy, Pilot Rev Bonds (Yankee Stadium Proj), Ser 2009A:
0.000%, 3–1–25 (B)		500		324
0.000%, 3–1–26 (B)		500		309
0.000%, 3–1–27 (B)		500		291
Port Auth of NY and NJ, Consolidated Bonds, One Hundred Fifty-Second Ser (Insured by BHAC), 5.750%, 11–1–30		500		582
Suffolk Cnty Indl Dev Agy, Civic Fac Rev Bonds (The Southampton Hosp Assoc Civic Fac), Ser 1999A, 7.250%, 1–1–20		95		95
Suffolk Cnty Indl Dev Agy, Civic Fac Rev Bonds (The Southampton Hosp Assoc Civic Fac), Ser 1999B, 7.625%, 1–1–30		475		476
				3,411
North Carolina – 1.0%
NC Eastn Muni Power Agy, Power Sys Rev Bonds, Ser 2008C, 6.000%, 1–1–19		250		293
NC Med Care Comsn, Hlth Care Fac Rev Rfdg Bonds (Univ Hlth Sys of Eastn Carolina), Ser 2008E-2, 6.000%, 12–1–36		500		550
NC Tpk Auth, Triangle Expressway Sys Rev Bonds, Ser 2009A, 0.000%, 1–1–37 (B)		500		165

2012 SEMIANNUAL REPORT 87

SCHEDULE OF INVESTMENTS

Ivy Municipal Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

MUNICIPAL BONDS (Continued)	Principal		Value
North Carolina (Continued)
Oak Island, NC, Enterprise Sys Rev Bonds, Ser 2009, 6.000%, 6–1–34	$	500	$	581
				1,589
Ohio – 1.0%
OH Air Quality Dev Auth, Envirnmt Impvt Rev Bonds (Buckeye Power, Inc. Proj), Ser 2010, 5.750%, 12–1–30		500		562
OH Major New State Infra Proj Rev Bonds, Ser 2008-I, 6.000%, 6–15–17		395		485
Toledo-Lucas Cnty Port Auth, Dev Rev Bonds (NW OH Bond Fund), (Midwest Terminals Proj) Ser 2007C, 6.000%, 11–15–27		445		492
				1,539
Oklahoma – 1.0%
Cleveland Cnty Justice Auth, Sales Tax Rev Bonds (Cleveland Cnty Detention Fac Proj), Ser 2009B, 5.750%, 3–1–29		335		360
Grand River Dam Auth, Rev Bonds, Ser 2008A (Insured by BHAC), 5.000%, 6–1–18		905		1,092
Tulsa Pub Fac Auth, Assembly Ctr Lease Payment Rev Bonds, Rfdg Ser 1985, 6.600%, 7–1–14		125		133
				1,585
Oregon – 0.2%
Hosp Fac Auth of Clackamas Cnty, OR, Rev Bonds (Legacy Hlth Sys), Ser 2009A, 5.500%, 7–15–35		250		280
Pennsylvania – 3.5%
Allegheny Cnty Arpt Auth, Arpt Rev Rfdg Bonds (Pittsburg Intl Arpt), Ser 2010A, 5.000%, 1–1–17		250		282
Dauphin Cnty Gen Auth, Hlth Sys Rev Bonds (Pinnacle Hlth Sys Proj), Ser 2009A, 6.000%, 6–1–36		600		678
Lycoming Cnty Auth, Hlth Sys Rev Bonds (Susquehanna Hlth Sys Proj), Ser 2009A, 5.750%, 7–1–39		500		550
PA Higher Edu Fac Auth, Rev Bonds (Shippensburg Univ Student Svc, Inc. Student Hsng Proj at Shippensburg Univ of PA), Ser 2011, 6.000%, 10–1–26		500		575

MUNICIPAL BONDS (Continued)	Principal		Value
Pennsylvania (Continued)
PA Tpk Comsn, Tpk Sub Rev Bonds, Ser 2009D, 5.500%, 12–1–41	$	750	$	843
PA Tpk Comsn, Tpk Sub Rev Bonds, Ser 2010B-2, 0.000%, 12–1–28 (B)		1,500		1,501
Philadelphia Auth Indl Dev Rev Bonds (Mariana Bracetti Academy Charter Sch Proj), Ser 2011, 7.250%, 12–15–31		400		444
Philadelphia, PA, GO Rfdg Bonds, Ser 2008A (Insured by AGM), 5.250%, 12–15–24		445		506
				5,379
Puerto Rico – 3.7%
Cmnwlth of PR, Pub Impvt Rfdg Bonds (GO Bonds), Ser 2007A, 5.500%, 7–1–21		500		541
Cmnwlth of PR, Pub Impvt Rfdg GO Bonds, Ser 2012A, 5.500%, 7–1–39		1,250		1,292
PR Aqueduct and Sewer Auth, Rev Bonds, Ser A, 6.000%, 7–1–44		700		738
PR Aqueduct and Sewer Auth, Rev Bonds, Ser A (Sr Lien), 6.000%, 7–1–38		500		528
PR Elec Power Auth, Power Rev Bonds, Ser 2010XX, 5.750%, 7–1–36		750		802
PR Elec Power Auth, Power Rev Rfdg Bonds, Ser DDD, 5.000%, 7–1–21		1,000		1,083
PR Pub Fin Corp (Cmnwlth Approp Bonds), 2011 Ser B, 5.500%, 8–1–31		250		262
PR Sales Tax Fin Corp, Sales Tax Rev Bonds, First Sub Ser 2010A, 0.000%, 8–1–33 (B)		500		430
				5,676
Rhode Island – 0.6%
RI Student Loan Auth, Student Loan Prog Rev Bonds, Sr Ser 2008A, 5.250%, 12–1–18		600		673
RI Student Loan Auth, Student Loan Prog Rev Bonds, Sr Ser 2009A, 6.250%, 12–1–27		185		212
				885
Tennessee – 0.4%
The Hlth, Edu and Hsng Fac Board of Shelby, TN, Rev Bonds (Methodist Le Bonheur Hlthcare), Ser 2008C, 5.250%, 6–1–18		500		589

MUNICIPAL BONDS (Continued)	Principal		Value
Texas – 8.0%
Arlington, TX, Spl Tax Rev Bonds, Ser 2008 (Insured by BHAC), 5.000%, 8–15–18	$	300	$	356
Bexar Cnty Hlth Fac Dev Corp, Rev Bonds (Army Ret Residence Fndtn Proj), Ser 2010, 6.200%, 7–1–45		250		282
Board of Regents, TX State Univ Sys, Rev Fin Sys Rev Bonds, Ser 2008, 5.250%, 3–15–19		355		432
Cass Cnty Indl Dev Corp, Envirnmt Impvt Rev Rfdg Bonds, Ser 2009A, 9.250%, 3–1–24		500		655
Clifton Higher Edu Fin Corp, Edu Rev Bonds (IDEA Pub Sch), Ser 2011, 5.750%, 8–15–41		500		557
El Paso, TX (El Paso Cnty), Water and Sewer Rev Rfdg Bonds, Ser 2008C, 5.000%, 3–1–17		500		589
Harris Cnty Cultural Edu Fac Fin Corp, Med Fac Rev Rfdg Bonds (Baylor College of Medicine), Ser 2008D, 5.000%, 11–15–16		200		229
Hopkins Cnty Hosp Dist, Hosp Rev Bonds, Ser 2008, 6.000%, 2–15–33		500		515
Houston Higher Edu Fin Corp, Edu Rev Bonds (Cosmos Fndtn, Inc.), Ser 2011A, 6.500%, 5–15–31		1,000		1,188
Houston, TX Arpt Sys, Sub Lien Rev Rfdg Bonds, Ser 2012A, 5.000%, 7–1–32		500		558
Houston, TX, Combined Util Sys, First Lien Rev Rfdg Bonds (SIFMA Index Floating Rate Bonds), Ser 2012C, 0.780%, 5–15–34 (A)		500		500
Howard Cnty, TX GO Bonds, Ser 2008, 4.650%, 2–15–24		505		539
Lower Colorado River Auth, Rfdg Rev Bonds, Ser 2008A, 5.750%, 5–15–23		500		592
Lufkin Hlth Fac Dev Corp, Rev Rfdg and Impvt Bonds (Mem Hlth Sys of East TX), Ser 2009, 6.250%, 2–15–37		500		546
Mission Econ Dev Corp, Solid Waste Disp Rev Bonds (Dallas Clean Enrg McCommas Bluff, LLC Proj), Ser 2011, 5.625%, 12–1–17		505		530

88 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Municipal Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

MUNICIPAL BONDS (Continued)	Principal		Value
Texas (Continued)
North TX Twy Auth, Sys Rev Rfdg Bonds, Ser 2008A, 6.000%, 1–1–25	$	500	$	588
North TX Twy Auth, Sys Rev Rfdg Bonds, Ser 2008D, 0.000%, 1–1–30 (B)		1,000		488
Prosper, TX (Collin Cnty), Combination Tax and Rev Cert of Oblig, Ser 2008, 5.500%, 2–15–20		500		593
Tarrant Cnty Cultural Edu Fac Fin Corp, Ret Fac Rev Bonds (NW Sr Hsng Corp–Edgemere Proj), Ser 2006A, 6.000%, 11–15–36		500		532
Tarrant Cnty Cultural Edu Fac Fin Corp, Ret Fac Rev Bonds (Buckingham Sr Living Cmnty, Inc. Proj), Ser 2007, 5.625%, 11–15–27		250		260
Trinity River Auth of TX (Tarrant Cnty Water Proj), Impvt Rev Bonds, Ser 2008, 5.750%, 2–1–26		325		380
TX Private Activity Bond Surface Trans Corp, Sr Lien Rev Bonds (North Tarrant Express Managed Lanes Proj), Ser 2009, 6.875%, 12–31–39		500		603
TX Private Activity Bond Surface Trans Corp, Sr Lien Rev Bonds (LBJ Infra Group LLC IH-635 Managed Lanes Proj), Ser 2010, 7.500%, 6–30–33		750		952
				12,464
Vermont – 0.1%
VT Hsng Fin Agy, Sngl Fam Hsng Bonds, Ser 27 (Insured by AGM), 5.500%, 11–1–37		90		93
Virgin Islands – 1.1%
VI Pub Fin Auth, Sub Rev Bonds (VI Matching Fund Loan Note–Cruzan Proj), Ser 2009A, 6.000%, 10–1–39		500		560
VI Pub Fin Auth, Sub Rev Bonds (VI Matching Fund Loan Note–Diageo Proj), Ser 2009A, 5.000%, 10–1–25		1,000		1,101
				1,661

MUNICIPAL BONDS (Continued)	Principal		Value
Virginia – 0.9%
Indl Dev Auth of Washington Cnty, VA, Hosp Rev Bonds (Mountain States Hlth Alliance), Ser 2009C, 7.500%, 7–1–29	$	500	$	631
VA Hsng Dev Auth, Cmnwlth Mtg Bonds, Ser 2008E, 5.500%, 7–1–20		490		533
VA Pub Bldg Auth, Pub Fac Rev Bonds, Ser 2008B, 5.250%, 8–1–22		250		299
				1,463
Washington – 1.3%
Pub Util Dist No. 1, Pend Oreille Cnty, WA, Box Canyon Production Sys Rev Bonds, Ser 2010, 5.750%, 1–1–41		750		840
WA Hlth Care Fac Auth, Rev Bonds (Swedish Hlth Svc), Ser 2009A, 6.500%, 11–15–14		500		565
WA Hlth Care Fac Auth, Rev Bonds (Virginia Mason Med Ctr), Ser 2007C, 5.500%, 8–15–36		500		538
				1,943
West Virginia – 0.6%
Brooke Cnty, WV, Rev Bonds (Bethany College), Ser 2011A, 6.500%, 10–1–31		300		350
WV Hosp Fin Auth, Hosp Rev Rfdg and Impvt Bonds (WV Utd Hlth Sys Oblig Group), Ser 2009C, 5.500%, 6–1–39		500		547
				897
Wisconsin – 1.2%
Milwaukee Cnty, WI, Arpt Rev Rfdg Bonds, Ser 2010B, 5.000%, 12–1–19		1,000		1,185
WI Hlth and Edu Fac Auth, Rev Bonds (Pro Hlth Care, Inc. Oblig Group), Ser 2009, 6.625%, 2–15–39		500		593
				1,778
Wyoming – 0.6%
Hsng Auth of Cheyenne, Hsng Rev Bonds (Foxcrest II Proj), Ser 2004, 5.750%, 6–1–34		300		302
WY Muni Power Agy, Power Supply Sys Rev Bonds, Ser 2008A, 5.250%, 1–1–23		500		568
				870
TOTAL MUNICIPAL BONDS – 84.3%			$	129,953
(Cost: $116,929)

SHORT – TERM SECURITIES	Principal		Value
Commercial Paper – 7.6%
Ecolab Inc.:
0.340%, 10–4–12 (E)	$	3,000	$	3,000
0.350%, 10–11–12 (E)		3,000		3,000
Kroger Co. (The), 0.400%, 10–2–12 (E)		3,497		3,497
Wisconsin Electric Power Co., 0.200%, 10–1–12 (E)		2,208		2,208
				11,705
Master Note – 0.0%
Toyota Motor Credit Corporation, 0.122%, 10–5–12 (F)		34		34
Municipal Obligations – 8.1%
Bartow, GA Dev Auth Pollutn Ctl Rev Bonds (GA Power Co Plant Proj), First Ser 1997, 0.240%, 10–1–12 (F)		2,000		2,000
CA Hlth Fac Fin Auth, Var Rate Hosp Rev Bonds (Adventist Hlth Sys/West), Ser 1998B (GTD by Bank of America, N.A.), 0.170%, 10–1–12 (F)		2,500		2,500
Fremont (Alameda Cnty, CA), Fremont Public Fin Auth (U.S. Bank, N.A.), 0.170%, 10–4–12 (F)		3,950		3,950
Los Angeles, CA, Wastewater Sys Sub Rev Bonds, Var Rate Rfdg, Ser 2008-A (GTD by Bank of America, N.A.), 0.180%, 10–4–12 (F)		518		518
MS Business Fin Corp, Gulf Opp Zone Indl Dev Rev Bonds (Chevron U.S.A. Inc. Proj), Ser 2007B, 0.190%, 10–1–12 (F)		3,500		3,500
				12,468
TOTAL SHORT-TERM SECURITIES – 15.7%			$	24,207
(Cost: $24,207)
TOTAL INVESTMENT SECURITIES – 100.0%			$	154,160
(Cost: $141,136)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 0.0%				71
NET ASSETS – 100.0%			$	154,231

2012 SEMIANNUAL REPORT 89

SCHEDULE OF INVESTMENTS

Ivy Municipal Bond Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

Notes to Schedule of Investments

(A) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012.

(B) Zero coupon bond.

(C) Purchased on a when-issued basis with settlement subsequent to September 30, 2012.

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

(E) Rate shown is the yield to maturity at September 30, 2012.

(F) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Municipal Bonds	$	—	$	128,444	$	1,509
Short-Term Securities		—		24,207		—
Total	$	—	$	152,651	$	1,509

The following acronym is used throughout this schedule:

AGM = Assured Guaranty Municipal

AMBAC = American Municipal Bond Assurance Corp.

BHAC = Berkshire Hathaway Assurance Corporation

CR = Custodial Receipts

FGIC = Financial Guaranty Insurance Co.

FHA = Federal Housing Administration

FHLMC = Federal Home Loan Mortgage Corp.

FNMA = Federal National Mortgage Association

GNMA = Government National Mortgage Association

GTD = Guaranteed

NPFGC = National Public Finance Guarantee Corp.

VA = Department of Veterans Affairs

See Accompanying Notes to Financial Statements.

90 SEMIANNUAL REPORT 2012

PORTFOLIO HIGHLIGHTS

Ivy Municipal High Income Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Bonds	91.6%
Municipal Bonds	91.6%
Cash and Cash Equivalents	8.4%

Lipper Rankings

Category: Lipper High Yield Municipal Debt Funds	Rank	Percentile
1 Year	94/118	79
3 Year	12/101	12

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Quality Weightings

Investment Grade	45.4%
AA	5.6%
A	11.5%
BBB	28.3%
Non-Investment Grade	46.2%
BB	6.3%
B	2.1%
CCC	1.7%
Below CCC	0.0%
Non-rated	36.1%
Cash and Cash Equivalents	8.4%

Our preference is to always use ratings obtained from Standard & Poor’s. For securities not rated by Standard & Poor’s, ratings are obtained from Moody’s.

2012 SEMIANNUAL REPORT 91

SCHEDULE OF INVESTMENTS

Ivy Municipal High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

MUNICIPAL BONDS	Principal		Value
Alabama – 1.1%
AL 21st Century Auth, Tob Stlmt Rev Bonds, Ser 2012-A, 5.000%, 6–1–21	$	1,000	$	1,207
Fairfield, AL GO Warrants, Ser 2012, 6.000%, 6–1–37		8,485		8,801
Indl Dev Board of Selma, AL, Gulf Opp Zone Bonds (Intl Paper Co Proj), Ser 2011A, 5.375%, 12–1–35		5,750		6,287
				16,295
Arizona – 2.9%
AZ Hlth Fac Auth, Rev Bonds (Banner Hlth), Ser 2007B, 1.051%, 1–1–37 (A)		25,000		18,872
Indl Dev Auth of Mohave Cnty, Correctional Fac Contract Rev Bonds (Mohave Prison, LLC Expansion Proj), Ser 2008: 7.500%, 5–1–19		1,825		2,229
8.000%, 5–1–25		7,500		9,317
Indl Dev Auth of Tempe, AZ, Rev Rfdg Bonds (Friendship Vlg of Tempe), Ser 2012A: 6.000%, 12–1–27		2,390		2,639
6.250%, 12–1–42		2,150		2,326
6.250%, 12–1–46		1,000		1,080
Indl Dev Auth of Yavapai, Edu Rev Bonds (AZ Agribusiness and Equine Ctr, Inc. Proj), Ser 2011, 7.875%, 3–1–42		3,500		3,936
The Indl Dev Auth of Pima, Edu Rev Bonds (Noah Webster Basic Sch Proj), Ser 2004A, 6.125%, 12–15–34		1,315		1,329
The Indl Dev Auth of Tucson, Edu Rev Bonds (Agribusiness and Equine Ctr Proj), Ser 2004A, 6.125%, 9–1–34		500		501
				42,229
Arkansas – 0.0%
Pub Fac Board of Benton Cnty, AR, Charter Sch Lease Rev Bonds (BCCSO Proj), Ser 2010A, 6.000%, 6–1–40		500		534
California – 8.8%
Adelanto Pub Auth, Fixed Rate Rfdg Rev Bonds (Util Sys Proj), Ser 2009A, 6.750%, 7–1–39		4,000		4,379

MUNICIPAL BONDS (Continued)	Principal		Value
California (Continued)
Anaheim Cmnty Facs Dist No. 08-1 (Platinum Triangle), Spl Tax Bonds, Ser 2010, 6.250%, 9–1–40	$	5,275	$	5,448
Arpt Comsn of San Francisco, San Francisco Intl Arpt, Second Ser Rev Rfdg Bonds, Ser 2012A: 5.000%, 5–1–28		2,500		2,960
5.000%, 5–1–29		1,750		2,063
CA Muni Fin Auth, Edu Fac Rev Bonds (Literacy First Proj), Ser 2010B, 6.000%, 9–1–30		1,085		1,108
CA Muni Fin Auth, Edu Fac Rev Bonds (American Heritage Edu Fndtn Proj), Ser 2006A, 5.250%, 6–1–36		1,150		1,042
CA Muni Fin Auth, Edu Fac Rev Bonds (King/Chavez Academies Proj), Ser 2009A, 8.750%, 10–1–39		1,505		1,771
CA Muni Fin Auth, Edu Fac Rev Bonds (King/Chavez Academies Proj), Taxable Ser 2009B, 8.000%, 10–1–22		400		470
CA Statewide Cmnty Dev Auth Sr Living Rev Bonds (Southn CA Presbyterian Homes), Ser 2009, 6.625%, 11–15–24		2,490		2,903
CA Statewide Cmnty Dev Auth, Rev Bonds (Thomas Jefferson Sch of Law), Ser 2008 A: 7.250%, 10–1–32		3,400		3,675
7.250%, 10–1–38		5,000		5,339
CA Statewide Cmnty Dev Auth, Sch Fac Rev Bonds (Aspire Pub Sch), Ser 2010: 6.000%, 7–1–40		7,375		7,653
6.350%, 7–1–46		250		264
CA Statewide Cmnty Dev Auth, Sr Living Rev Bonds (Southrn CA Presbyterian Homes), Ser 2009, 7.000%, 11–15–29		2,000		2,360
CA Statewide Cmnty Dev Auth, Sr Living Rev Bonds (Southn CA Presbyterian Homes), Ser 2009, 7.250%, 11–15–41		6,000		6,983
CA Various Purp GO Bonds: 6.000%, 4–1–35		500		601
6.000%, 4–1–38		5,225		6,232
6.000%, 11–1–39		4,445		5,365
Cert of Part, Oro Grande Elem Sch Dist, Ser 2010, 6.125%, 9–15–40		1,500		1,644

MUNICIPAL BONDS (Continued)	Principal		Value
California (Continued)
Cmnty Redev Agy of Hawthorne, Cmnty Fac Dist No. 1999-1 (Gateway Ctr), 2010 Spl Tax Rfdg Bonds, 6.125%, 10–1–25	$	2,200	$	2,286
Golden State Tob Securitization Corp, Tob Stlmt Asset-Bkd Bonds, Ser 2007A-1, 5.125%, 6–1–47		1,000		770
Inland Empire Tob Securitization Auth, Tob Stlmt Asset-Bkd Bonds (Inland Empire Tob Securitization Corp), Ser 2007, 4.625%, 6–1–21		4,880		4,472
Lompoc Redev Agy (Santa Barbara Cnty, CA), Old Town Lompoc Redev Proj, Tax Alloc Bonds, Ser 2010: 5.750%, 9–1–29		225		235
5.750%, 9–1–31		365		379
6.000%, 9–1–39		1,000		1,044
Palomar Pomerado Hlth, San Diego Cnty, CA, Cert of Part, 6.750%, 11–1–39		4,935		5,551
Palomar Pomerado Hlth, San Diego Cnty, CA, Cert of Part, 6.000%, 11–1–41		3,000		3,243
Redev Agy for Riverside, Interstate 215 Corridor Redev Proj Area, 2010 Tax Alloc Bonds, Ser E, 6.500%, 10–1–40		2,705		3,023
Redev Agy of Hollister, Cmnty Dev Proj Tax Alloc Bonds (Cnty of San Benito, CA), Ser 2009: 6.750%, 10–1–29		75		82
7.000%, 10–1–32		510		566
Redev Agy of San Buenaventura, Merged San Buenaventura Redev Proj, 2008 Tax Alloc Bonds, 8.000%, 8–1–38		100		112
San Buenaventura Rev Bonds (Cmnty Mem Hlth Sys), Ser 2011:
7.000%, 12–1–26		5,000		6,167
8.000%, 12–1–26		1,400		1,833
8.000%, 12–1–31		9,400		12,127
7.500%, 12–1–41		5,500		6,816
San Diego Cnty Rgnl Arpt Auth, Sub Arpt Rev Bonds, Ser 2010A, 5.000%, 7–1–21		2,000		2,401
San Jose, CA Arpt Rev Bonds, Ser 2011A-1, 5.250%, 3–1–34		2,500		2,803

92 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Municipal High Income Fund (in thousands)

SEPTEMBER 30, 2012 (UNAUDITED)

MUNICIPAL BONDS (Continued)	Principal		Value
California (Continued)
San Mateo Cmnty Fac Dist No. 2008-1 (Bay Meadows), Spl Tax Bonds, Ser 2012, 6.000%, 9–1–42	$	8,000	$	8,625
Tob Securitization Auth of Southn CA, Tob Stlmt Asset-Bkd Bonds (San Diego Cnty Tob Asset Securitization Corp.), Ser 2006A, 4.750%, 6–1–25		5,630		5,648
				130,443
Colorado – 4.0%
Arkansas River Power Auth, CO, Power Rev Impvt Bonds, Ser 2008, 6.000%, 10–1–40		9,100		9,591
Arkansas River Power Auth, CO, Power Rev Impvt Bonds, Ser 2010, 6.125%, 10–1–40		5,000		5,408
Church Ranch Metro Dist, Westminster, CO, GO Ltd Tax Bonds, Ser 2003, 6.000%, 12–1–33		1,160		1,160
CO Edu and Cultural Fac Auth, Charter Sch Rev Bonds (The Classical Academy Proj), Ser 2008A, 7.400%, 12–1–38		85		101
CO Edu and Cultural Fac Auth, Charter Sch Rev Bonds (Twin Peaks Charter Academy Proj), Ser 2008, 7.000%, 11–15–38		230		264
CO Edu and Cultural Fac Auth, Independent Sch Rev Rfdg Bonds (Vail Mountain Sch Proj), Ser 2010, 6.125%, 5–1–40		1,000		1,089
CO Hlth Fac Auth Rev Bonds (CO Sr Residences Proj), Ser 2012: 6.750%, 6–1–32		2,610		2,783
7.125%, 6–1–47		3,000		3,213
CO Hlth Fac Auth, Rev Bonds (Christian Living Cmnty – Clermont Park Proj), Ser 2006A, 5.750%, 1–1–37		1,460		1,507
CO Hlth Fac Auth, Rev Bonds (Christian Living Cmnty—Clermont Park Proj), Ser 2009A: 7.250%, 1–1–19		100		105
9.000%, 1–1–34		30		32

MUNICIPAL BONDS (Continued)	Principal		Value
Colorado (Continued)
CO Hlth Fac Auth, Rev Bonds (Total Longterm Care Natl Oblig Group Proj), Ser 2010A, 6.250%, 11–15–40	$	1,250	$	1,381
Denver Hlth and Hosp Auth, Hlthcare Rev Bonds, Ser 2009A, 6.250%, 12–1–33		835		920
Kremmling Mem Hosp Dist Proj, Ser 2010, 7.125%, 12–1–45		4,345		4,884
Lincoln Park Metro Dist, Douglas Cnty, CO, GO Rfdg and Impvt Bonds, Ser 2008, 6.200%, 12–1–37		3,500		3,656
North Range Metro Dist No. 2, Adams Cnty, CO, Ltd Tax GO Bonds, Ser 2007, 5.500%, 12–15–27		4,660		4,631
Rgnl Trans Dist, Private Activity Bonds (Denver Transit Partn Eagle P3 Proj), Ser 2010: 6.500%, 1–15–30		3,000		3,636
6.000%, 1–15–41		2,990		3,467
Sorrel Ranch Metro Dist, Arapahoe Cnty, CO, GO Ltd Tax Bonds, Ser 2006, 5.750%, 12–1–36		4,325		4,204
Tallgrass Metro Dist, Arapahoe Cnty, CO, GO Ltd Tax Rfdg and Impvt Bonds, Ser 2007, 5.250%, 12–1–37		3,829		3,629
Tallyn’s Reach Metro Dist No. 3 (Aurora, CO), GO Bonds, Ser 2004, 6.625%, 12–1–13		500		536
Wildgrass Metro Dist, Broomfield Cnty, CO, GO Ltd Tax Rfdg Bonds, Ser 2007, 6.200%, 12–1–34		2,529		2,576
				58,773
Connecticut – 0.8%
CT GO Bonds, Series D:
0.000%, 9–15–18 (A)(B)		2,000		2,009
0.000%,9–15–19 (A)(B)		2,000		2,010
Eastn CT Res Recovery Auth, Solid Waste Rev Bonds (Wheelabrator Lisbon Proj), Ser 1993A, 5.500%, 1–1–14		75		75

MUNICIPAL BONDS (Continued)	Principal		Value
Connecticut (Continued)
Harbor Point Infra Impvt Dist (Harbor Point Proj), Spl Oblig Rev Bonds, Ser 2010A, 7.875%, 4–1–39	$	2,000	$	2,285
Stamford, CT Spl Oblig Rev Bonds (Mill River Corridor Proj), Ser 2011A, 7.000%, 4–1–41		5,000		5,305
				11,684
Delaware – 0.9%
DE Econ Dev Auth, Exempt Fac Rev Bonds (Indian River Power LLC Proj), Ser 2010, 5.375%, 10–1–45		7,000		7,653
Sussex Cnty, DE, Recovery Zone Fac Bonds (Indian River Power LLC Proj), Ser 2010, 6.000%, 10–1–40		4,500		5,157
				12,810
District Of Columbia – 0.1%
Metro WA Arpts Auth, Dulles Toll Road, Second Sr Lien Rev Bonds, Ser 2010B, 0.000%, 10–1–44 (C)		1,000		855
Florida – 4.2%
Brevard Cnty, FL, Indl Dev Rev Bonds (TUFF FL Tech Proj), Ser 2009: 6.500%, 11–1–29		710		792
6.750%, 11–1–39		1,490		1,669
Cap Trust Agy, Rev Bonds (Million Air One LLC Gen Aviation Fac Proj), Ser 2011, 7.750%, 1–1–41		5,685		6,351
Citizens Ppty Ins Corp, Sr Secured Bonds, Ser 2012A-1, 1.430%, 6–1–15 (A)		20,000		20,084
FL Dev Fin Corp, Edu Fac Rev Bonds (Renaissance Charter Sch, Inc. Proj), Ser 2010A: 6.000%, 9–15–30		5,000		5,458
6.000%, 9–15–40		2,000		2,145
FL Hurricane Catastrophe Fund Fin Corp, Rev Bonds, Ser 2010A, 5.000%, 7–1–15		1,000		1,113
Hillsborough Cnty Indl Dev Auth, Indl Dev Rev Bonds, Hlth Fac Proj (Univ Cmnty Hosp), Ser 2008B, 8.000%, 8–15–32		350		500

2012 SEMIANNUAL REPORT 93

SCHEDULE OF INVESTMENTS

Ivy Municipal High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

MUNICIPAL BONDS (Continued)	Principal		Value
Florida (Continued)
Lee Cnty Indl Dev Auth, Hlthcare Fac Rfdg Rev Bonds (Cypress Cove at HealthPark FL, Inc. Proj), Ser2012, 6.500%, 10–1–47	$	6,000	$	6,371
Miami-Dade Cnty, FL, Aviation Rev Bonds, Ser 2010B, 5.000%, 10–1–25		1,000		1,159
Mid-Bay Bridge Auth, Springing Lien Rev Bonds, Ser2011A, 7.250%, 10–1–40		4,800		6,064
Mid-Bay Bridge Auth, Springing Lien Rev Bonds, Ser 2011A, 7.250%, 10–1–34		5,200		6,592
St. Johns Cnty Indl Dev Auth, Rev Bonds (Presbyterian Ret Cmnty Proj), Ser 2010A, 6.000%, 8–1–45		4,220		4,728
				63,026
Georgia – 0.7%
DeKalb Cnty, GA, Hosp Auth, Rev Anticipation Cert (DeKalb Med Ctr, Inc. Proj), Ser 2010, 6.125%, 9–1–40		2,500		2,898
Dev Auth of Alpharetta, GA, Edu Fac Rev Bonds (Fulton Science Academy Proj), Ser 2011A, 6.500%, 7–1–41		3,400		2,040
Dev Auth of Clayton Cnty, GA, Spl Fac Rev Bonds (Delta Air Lines, Inc. Proj), Ser 2009A, 8.750%, 6–1–29		3,700		4,578
Savannah Econ Dev Auth, First Mtg Rev Bonds (The Marshes of Skidaway Island Proj), Ser 2003A: 7.400%, 1–1–24		250		259
7.400%, 1–1–34		815		844
				10,619
Guam – 0.9%
Cert of Part (JFK High Sch Proj), Dept of Edu, GU, 6.625%, 12–1–30		1,400		1,538
Cert of Part (JFK High Sch Proj), Dept of Edu, GU, Ser 2010A, 6.875%, 12–1–40		3,500		3,842
Govt of GU, GO Bonds, Ser 2009A: 5.750%, 11–15–14		80		80
7.000%, 11–15–39		7,000		7,892
				13,352

MUNICIPAL BONDS (Continued)	Principal		Value
Hawaii – 0.6%
Dept of Budget and Fin of HI, Spl Purp Sr Living Rev Bonds (15 Craigside Proj), Ser 2009A: 8.750%, 11–15–29	$	1,450	$	1,729
9.000%, 11–15–44		4,200		5,028
Kaua’I Cmnty Fac Dist No. 2008-1 (Kukul’ula Dev Proj), Spl Tax Rev Bonds, Ser 2012, 5.750%, 5–15–42		2,000		2,064
				8,821
Idaho – 0.1%
ID Hsng and Fin Assoc (Compass Pub Charter Sch, Inc. Proj), Ser 2010A: 6.250%, 7–1–40		1,000		1,066
6.250%, 7–1–45		550		556
				1,622
Illinois – 8.7%
Belleville, IL, Tax Incr Rfdg Rev Bonds (Frank Scott Pkwy Redev Proj), Ser 2007A: 5.000%, 5–1–26		1,340		1,305
5.700%, 5–1–36		4,160		4,193
Cert of Part, Metra Market of Chicago, L.L.C. Redev Proj, Ser A, 6.870%, 2–15–24		1,500		1,592
Chicago Midway Arpt, Second Lien Rev Bonds, Ser 2010B, 5.000%, 1–1–34		1,500		1,620
Chicago O’Hare Intl Arpt, Gen Arpt Third Lien Rev Bonds, Ser 2011A, 5.750%, 1–1–39		1,000		1,173
Chicago Recovery Zone Fac Rev Bonds (Asphalt Operating Svc of Chicago Proj), Ser 2010, 6.125%, 12–1–18		2,500		2,633
Cook Cnty, IL Recovery Zone Fac Rev Bonds (Navistar Intl Corp Proj), Ser 2010, 6.500%, 10–15–40		11,000		11,446
Fairview Heights, IL, Tax Incr Rfdg Rev Bonds (Shoppes at St. Clair Square Redev Proj), Ser 2009A, 8.000%, 12–1–28		425		452
IL Fin Auth, Rev Bonds (Greenfields of Geneva Proj), Ser 2010C-3, 6.250%, 2–15–16		3,000		3,003

MUNICIPAL BONDS (Continued)	Principal		Value
Illinois (Continued)
IL Fin Auth, Rev Bonds (Navistar Intl Corp Proj), Ser 2010, 6.500%, 10–15–40	$	9,000	$	9,365
IL Fin Auth, Rev and Rfdg Bonds (Roosevelt Univ Proj), Ser 2009, 6.500%, 4–1–44		10,000		11,278
IL Fin Auth, Rev Bonds (Admiral at the Lake Proj), Ser 2010A, 8.000%, 5–15–40		12,000		14,131
IL Fin Auth, Rev Bonds (Admiral at the Lake Proj),Ser 2010A, 8.000%, 5–15–46		5,000		5,878
IL Fin Auth, Rev Bonds (Admiral at the Lake Proj), Ser 2010D-3, 6.000%, 5–15–17		4,000		4,009
IL Fin Auth, Rev Bonds (Silver Cross Hosp and Med Ctrs), Ser 2009, 7.000%, 8–15–44		11,985		14,403
IL Fin Auth, Rev Bonds (Three Crowns Park Proj), Ser 2006A: 5.875%, 2–15–26		1,000		1,035
5.875%, 2–15–38		2,450		2,512
Springfield, Sangamon Cnty, IL, Spl Svc Area (Legacy Pointe), Tax Bonds, Ser 2009, 7.875%, 3–1–32		500		539
Springfield, Sangamon Cnty, IL, Spl Svc Area (Legacy Pointe), Tax Bonds, Ser 2010, 7.500%, 3–1–32		1,500		1,596
SW IL Dev Auth, Local Govt Prog Rev Bonds (City of Belleville-Carlyle/Green Mount Redev Proj), Ser 2011A, 7.000%, 7–1–41		6,000		6,318
SW IL Dev Auth, Local Govt Prog Rev Bonds (Granite City Proj), Ser 2008, 7.000%, 12–1–18		1,805		2,406
SW IL Dev Auth, Local Govt Prog Rev Bonds (Granite City Proj), Ser 2009, 8.000%, 1–15–22		575		613
SW IL Dev Auth, Local Govt Prog Rev Rfdg Bonds (Granite City Proj), Ser 2012, 5.250%, 3–1–23 (B)		6,000		6,137
Upper IL River Vly Dev Auth (Pleasant View Luther Home Proj), Rev Bonds, Ser 2010: 7.250%, 11–15–40		1,100		1,187
7.375%, 11–15–45		1,500		1,617

94 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Municipal High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

MUNICIPAL BONDS (Continued)	Principal		Value
Illinois (Continued)
Upper IL River Vly Dev Auth Multi-Fam Hsng Rev Bonds (Deer Park of Huntley Proj), Ser 2012, 6.500%, 12–1–32	$	4,935	$	5,015
Vlg of Matteson, Cook Cnty, IL, GO Cap Apprec Debt Cert, Ser 2010, 0.000%, 12–1–29 (C)		1,840		1,426
Vlg of Riverdale, Cook Cnty, IL, Unlimited Tax GO Bonds, Ser 2011, 8.000%, 10–1–36		10,255		11,536
				128,418
Indiana – 2.5%
City of Carmel, IN, Rev Bonds, Ser 2012A: 7.000%, 11–15–27		1,550		1,629
7.000%, 11–15–32		2,000		2,045
7.125%, 11–15–42		7,500		7,625
Hammond IN, Redev Dist Rev Bonds (Marina Area Proj), Ser 2008, 6.000%, 1–15–17		10		11
Hendricks Cnty Redev Dist, Tax Incr Rev Rfdg Bonds, Ser 2010B, 6.450%, 1–1–23		220		234
IN Fin Auth, Rev Bonds (Irvington Cmnty Sch Proj), Ser 2009A, 9.000%, 7–1–39		1,075		1,329
IN Fin Auth, Midwestrn Disaster Relief Rev Bonds (OH Vly Elec Corp Proj), Ser 2012A, 5.000%, 6–1–39		7,000		7,417
Lake Station 2008 Bldg Corp, Lake Station, IN, First Mtg Bonds, Ser 2010, 6.000%, 7–15–27		3,170		3,590
Rockport, IN, Pollutn Ctrl Rev Rfdg Bonds (IN MI Power Co Proj), Ser 2009A, 6.250%, 6–1–25		1,000		1,082
Terre Haute, IN Rev Bonds (Westminister Vlg Proj),Ser 2012, 6.000%, 8–1–39		5,000		4,973
Whitestown, IN, Econ Dev Tax Incr Rev Bonds (Perry Indl Park and Whitestown Crossing Proj), Ser 2010A, 7.000%, 2–1–30		1,960		2,076
Whiting, IN, Redev Dist Tax Incr Rev Bonds (Standard Avenue Proj), Ser 2006, 5.350%, 1–15–27		4,005		3,996

MUNICIPAL BONDS (Continued)	Principal		Value
Indiana (Continued)
Whiting, IN, Redev Dist Tax Incr Rev Bonds (Lakefront Dev Proj), Ser 2010, 6.750%, 1–15–32	$	1,400	$	1,497
				37,504
Iowa – 0.2%
IA Fin Auth, Ret Cmnty Rev Bonds (Edgewater LLC Proj), Ser 2007A, 6.750%, 11–15–37		3,000		3,020
Kansas – 0.8%
Arkansas City, KS Pub Bldg Comsn, Rev Bonds (South Cent KS Rgnl Med Ctr), Ser 2009, 7.000%, 9–1–38		500		594
Atchison, KS, Hosp Rev Bonds (Atchison Hosp Assoc), Ser 2009, 6.000%, 9–1–30 (A)		1,000		1,053
Lawrence, KS (The Bowersock Mills & Power Co Hydroelec Proj) Indl Rev Bonds (Recovery Zone Fac Bonds), Ser 2010A, 7.625%, 8–1–37		4,000		4,282
Olathe, KS, Spl Oblig Tax Incr Rev Bonds (West Vlg Ctr Proj), Ser 2007: 5.450%, 9–1–22		500		356
5.500%, 9–1–26		500		351
Olathe, KS, Sr Living Fac Rev Bonds (Catholic Care Campus, Inc.), Ser 2006A, 6.000%, 11–15–38		5,000		5,120
Unif Govt of Wyandotte Cnty/Kansas City, KS, Sales Tax Spl Oblig (Redev Proj Area B –Major Multi-Sport Athletic Complex Proj), Ser 2010B, 0.000%, 6–1–21 (C)		1,100		779
				12,535
Kentucky – 1.6%
KY Econ Dev Fin Auth, Hosp Rev Bonds, Ser 2010A: 6.375%, 6–1–40		12,000		14,255
6.500%, 3–1–45		6,000		7,160
Murray, KY, Hosp Fac Rev Bonds (Murray-Calloway Cnty Pub Hosp Corp Proj), Ser 2010, 6.375%, 8–1–40		2,000		2,197
				23,612

MUNICIPAL BONDS (Continued)	Principal		Value
Louisiana – 0.6%
LA Local Govt Envirnmt, Fac and Comm Dev Auth, Rev Bonds (Westlake Chemical Corp Projs) (Ike Zone), Ser 2010A-2, 6.500%, 11–1–35	$	7,475	$	8,726
New Orleans Aviation Board, Gulf Opp Zone CFC Rev Bonds (Consolidated Rental Car Proj), Ser 2009A, 6.500%, 1–1–40		745		833
				9,559
Maine – 0.0%
Portland, ME, Gen Arpt Rev Bonds, Ser 2010, 5.000%, 1–1–30		500		556
Maryland – 0.4%
MD Econ Dev Corp, Econ Dev Rev Bonds (Terminal Proj), Ser B, 5.750%, 6–1–35		500		543
MD Econ Dev Corp, Port Fac Rfdg Rev Bonds (CNX Marine Terminals Inc. Port of Baltimore Fac), Ser 2010, 5.750%, 9–1–25		4,350		4,745
				5,288
Massachusetts – 1.0%
MA Dev Fin Agy, Sr Living Fac Rev Bonds (The Groves in Lincoln Issue), Ser 2009A, 7.875%, 6–1–44		200		109
MA Dev Fin Agy, Sr Living Fac Rev Bonds (The Groves in Lincoln Issue), Ser 2009C-2, 6.250%, 6–1–14		55		38
MA Port Auth, Spl Fac Rev Bonds (Delta Air Lines,Inc., Proj), Ser 2001B (Auction Rate Sec) (InsuredBy AMBAC), 0.451%, 1–1–31 (A)		20,000		14,750
				14,897
Michigan – 6.4%
Detroit, MI Sewage Disp Sys, Sr Lien Rev Rfdg Bonds (Modal Fixed Rate), Ser 2001(C-1), 7.000%, 7–1–27		6,000		7,459
Detroit, MI Sewage Disp Sys, Sr Lien Rev Rfdg Bonds (Modal Fixed Rate), Ser 2003(B), 7.500%, 7–1–33		5,500		6,951

2012 SEMIANNUAL REPORT 95

SCHEDULE OF INVESTMENTS

Ivy Municipal High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

MUNICIPAL BONDS (Continued)	Principal		Value
Michigan (Continued)
Detroit, MI Water and Sewage Dept, Sewage Disp Sys Rev and Rev Rfdg Sr Lien Bonds, Ser 2012 A, 5.250%, 7–1–39	$	5,000	$	5,342
Detroit, MI, GO Bonds, Ser 2004-A(1) (Insured by AMBAC), 5.250%, 4–1–23		1,420		1,261
Econ Dev Corp of Oakland Cnty, Ltd Oblig Rev Rfdg Bonds (The Roman Catholic Archdiocese of Detroit), Ser 2011, 6.500%, 12–1–20		6,425		6,769
Flint Hosp Bldg Auth, Bldg Auth Rev Rental Bonds (Hurley Med Ctr), Ser 2010: 7.375%, 7–1–35		1,600		1,875
7.500%, 7–1–39		2,500		2,918
Flint Hosp Bldg Auth, Rev Rfdg Bonds (Hurley Med Ctr), Ser 2003, 6.000%, 7–1–20		4,115		4,193
Kent Hosp Fin Auth Rev Bonds (Metro Hosp Proj), Ser 2005A: 6.000%, 7–1–35		2,785		2,918
6.250%, 7–1–40		15,500		16,318
MI Fin Auth, Pub Sch Academy Ltd Oblig Rev and Rev Rfdg Bonds (MI Technical Academy Proj), Ser 2012: 7.100%, 10–1–31		1,000		1,052
7.450%, 10–1–41		2,000		2,103
MI Fin Auth, Pub Sch Academy Ltd Oblig Rev Bonds (Hanley Intl Academy, Inc. Proj), Ser 2010A, 6.125%, 9–1–40		4,535		4,644
MI Fin Auth, Rev Bonds (Sch Dist of Detroit), Ser2012, 5.000%, 6–1–20		1,425		1,622
MI Fin Auth, Sr Edu Fac Rev Bonds (St. Catherine of Siena Academy Proj), Ser 2010A, 8.500%, 10–1–45		13,000		14,962
MI Fin Auth, State Aid Rev Notes (Sch Dist of Detroit), Ser 2001A-1, 8.000%, 10–1–30		2,480		2,813
MI Tob Stlmt Fin Auth, Tob Stlmt Asset-Backed Bonds, Ser 2008A, 6.875%, 6–1–42		5,000		5,061

MUNICIPAL BONDS (Continued)	Principal		Value
Michigan (Continued)
Royal Oak Hosp Fin Auth, Hosp Rev and Rfdg Bonds (William Beaumont Hosp Oblig Group), Ser 2009V: 8.000%, 9–1–29	$	55	$	70
8.250%, 9–1–39		4,750		6,118
Royal Oak Hosp Fin Auth, Hosp Rev and Rfdg Bonds (William Beaumont Hosp Oblig Group), Ser 2009W, 6.000%, 8–1–39		150		171
				94,620
Minnesota – 0.5%
Minneapolis Hlth Care Sys Rev Bonds (Fairview Hlth Svc), Ser 2008B, 6.500%, 11–15–38		4,350		5,317
Tob Securitization Auth, MN Tob Stlmt Rev Bonds, Ser 2011B, 5.250%, 3–1–31		1,500		1,682
				6,999
Missouri – 4.4%
Arnold, MO, Real Ppty Tax Incr Rev Bonds (Arnold Triangle Redev Proj), Ser 2009A, 7.750%, 5–1–28		605		677
Belton, MO Tax Incr Rev Bonds (Belton MarketplaceRedev Proj), Ser 2012, 6.375%, 12–1–29		2,155		2,173
Belton, MO, Tax Incr Rev Bonds (Belton Town Centre Proj), Ser 2004: 6.000%, 3–1–19		2,610		2,629
6.250%, 3–1–24		1,100		1,107
Belton, MO, Tax Incr Rev Bonds (Belton Town Centre Proj), Ser 2006, 5.625%, 3–1–25		520		512
Broadway-Fairview Trans Dev Dist (Columbia, MO), Trans Sales Tax Rev Bonds, Ser 2006A, 6.125%, 12–1–36		200		169
Grindstone Plaza Trans Dev Dist (Columbia, MO), Trans Sales Tax Rev Bonds, Ser 2006A: 5.250%, 10–1–21		250		215
5.400%, 10–1–26		385		308
5.500%, 10–1–31		425		327
5.550%, 10–1–36		325		243
Hanley/Eager Road Trans Dev Dist, Rfdg Rev Bonds,Ser 2012A, 6.000%, 3–1–42		1,500		1,534

MUNICIPAL BONDS (Continued)	Principal		Value
Missouri (Continued)
Hlth and Edu Fac Auth of MO, Edu Fac Rfdg Rev Bonds, Rockhurst Univ, Ser 2011A: 6.500%, 10–1–30	$	1,000	$	1,156
6.500%, 10–1–35		1,000		1,154
Indl Dev Auth of Kansas City, MO, Sales Tax Rev Bonds (Ward Prkwy Ctr Cmnty Impvt Dist Proj), Ser 2011, 6.750%, 10–1–41		2,400		2,518
Indl Dev Auth of Kirkwood, MO, Ret Cmnty Rev Bonds (Aberdeen Heights Proj), Ser 2010A, 8.250%, 5–15–45		1,000		1,204
Jennings, MO, Tax Incr and Cmnty Impvt Rfdg Rev Bonds (Northland Redev Area Proj), Ser 2006, 5.000%, 11–1–23		2,360		2,313
Lakeside 370 Levee Dist (St. Charles Cnty, MO), Levee Dist Impvt Bonds, Ser 2008: 6.000%, 4–1–18		1,170		760
7.000%, 4–1–28		535		348
Land Clearance for Redev Auth of St. Louis, Recovery Zone Fac Bonds (Kiel Opera House Proj), Ser 2010B, 7.000%, 9–1–35		1,000		1,060
Lee’s Summit, MO, Tax Incr Rev Bonds (Summit Fair Proj) Ser 2011, 7.250%, 4–1–30		5,000		5,296
Liberty, MO, Tax Incr Rev Bonds (Liberty Triangle Proj), Ser 2007, 5.500%, 10–1–22		205		196
Manchester, MO, Tax Increment and Trans Rfdg Rev Bonds (Hwy 141/Manchester Road Proj), Ser 2010, 6.875%, 11–1–39		5,090		5,437
Meadows Trans Dev Dist (Lake Saint Louis, MO), Ser 2010, 5.400%, 5–1–35		1,315		1,378
MO Dev Fin Board, Research Fac Rev Bonds (Midwest Research Institute Proj), Ser 2007, 4.500%, 11–1–27		225		233
St. Louis Cnty, MO, Rev Notes (Lambert Arpt Eastn Perimeter Redev Proj-RPA1), Sr Ser B, 9.000%, 11–1–31		8,975		9,459

96 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Municipal High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

MUNICIPAL BONDS (Continued)	Principal		Value
Missouri (Continued)
St. Louis Muni Fin Corp, Compound Int Leasehold Rev Bonds (Convention Ctr Cap Impvt Proj), Ser 2010A (Insured by AGM): 0.000%, 7–15–36 (C)	$	750	$	233
0.000%, 7–15–37 (C)		1,500		438
Tax Incr Fin Comsn of Kansas City, MO, Tax Incr Rev Bonds (Brywood Ctr Proj), Ser 2010A, 8.000%, 4–1–33		3,950		2,765
The Elm Point Commons Cmnty Impvt Dist (St. Charles, MO), Spl Assmt Bonds, Ser 2007, 5.750%, 3–1–27		105		104
The Indl Dev Auth of Bridgeton, MO, Sales Tax Rev Bonds (Hilltop Cmnty Impvt Dist Proj), Ser 2008A, 5.875%, 11–1–35		250		227
The Indl Dev Auth of Kansas City, MO, Hlth Care Fac First Mtg Rev Bonds (The Bishop Spencer Place Proj), Ser 1994: 6.250%, 1–1–24		1,425		1,464
6.500%, 1–1–35		7,000		7,152
The Indl Dev Auth of Lee’s Summit, MO, Infra Fac Rev Bonds (Kensington Farms Impvt Proj), Ser 2007, 5.750%, 3–1–29		1,000		943
The Indl Dev Auth of Moberly, MO, Annual Appropriation Recovery Zone Fac Bonds (Proj Sugar), Ser 2010-C,
6.000%, 9–1–24 (D)		2,000		700
The Indl Dev Auth of Platte Cnty, MO, Trans Rev Bonds (Zona Rosa Phase II Retail Proj), Ser 2007,
6.850%, 4–1–29		220		228
The Indl Dev Auth of St. Joseph, MO, Hlthcare Rev Bonds (Living Cmnty of St. Joseph Proj), Ser 2002,
7.000%, 8–15–32		7,000		7,032
The Indl Dev Auth of St. Louis, MO, Tax Incr and Cmnty Impvt Dist Rfdg Rev Bonds (Loughborough Commons Redev Proj), Ser 2007,
5.750%, 11–1–27		940		948

MUNICIPAL BONDS (Continued)	Principal		Value
Missouri (Continued)
Univ Place Trans Dev Dist (St. Louis Cnty, MO), Sub Trans Sales Tax and Spl Assmt Rev Bonds, Ser 2009,
7.500%, 4–1–32	$	1,150	$	1,332
				65,972
Nebraska – 1.2%
Cent Plains Enrg Proj, Gas Proj Rev Bonds (Proj No. 3), Ser 2012:
5.250%, 9–1–37		14,000		15,052
5.000%, 9–1–42		3,000		3,146
				18,198
Nevada – 0.3%
Las Vegas Redev Agy, NV, Tax Incr Rev Bonds, Ser 2009A:
6.000%, 6–15–15		2,100		2,231
8.000%, 6–15–30		1,500		1,736
Overton Power Dist No. 5 (NV), Spl Oblig Rev Bonds, Ser 2008,
8.000%, 12–1–38		265		320
				4,287
New Hampshire – 0.2%
NH Hlth and Edu Fac Auth, Rev Bonds, Rivermead Issue, Ser 2011A,
6.875%, 7–1–41		2,300		2,597
New Jersey – 1.2%
Newark NJ, Tax Anticipation Notes, Ser 2012A,
2.400%, 2–20–13		7,000		7,009
NJ Econ Dev Auth, Cigarette Tax Rev Rfdg Bonds, Ser 2012:
5.000%, 6–15–26		1,000		1,102
5.000%, 6–15–28		1,000		1,092
5.000%, 6–15–29		500		544
NJ Econ Dev Auth, Spl Fac Rev Bonds (Continental Airlines, Inc. Proj), Ser 1999,
5.250%, 9–15–29		5,000		5,111
NJ Econ Dev Auth, Spl Fac Rev Bonds (Continental Airlines, Inc. Proj), Ser 2000,
7.000%, 11–15–30		2,000		2,009
NJ Edu Fac Auth, Rev Rfdg Bonds, Univ of Medicine and Dentistry of NJ Issue, Ser 2009B:
7.125%, 12–1–23		850		1,062
7.500%, 12–1–32		450		551
				18,480

MUNICIPAL BONDS (Continued)	Principal		Value
New York – 6.0%
Battery Park City Auth, Jr Rev Bonds (Auction RateSec) Ser 2003C-2 (Insured by AMBAC),
0.456%, 11–1–31 (A)	$	9,900	$	9,009
Battery Park City Auth, Jr Rev Bonds (Auction RateSec) Ser 2003C-4 (Insured by AMBAC),
0.438%, 11–1–31 (A)		11,700		10,647
Cnty of Rockland, NY, GO Rev Anticipation Notes, Ser 2012 B,
3.750%, 6–28–13		4,000		4,052
Dormitory Auth, Sch Dist Rev Bond Fin Prog, Ser 2010A (Insured by AGM),
5.000%, 10–1–22		1,000		1,196
Hudson Yards Infra Corp, Hudson Yards Sr Rev Bonds, Ser 2012A,
5.750%, 2–15–47		5,000		5,909
Nassau Cnty Indl Dev Agy, Continuing Care Ret Cmnty Rev Bonds (Amsterdam at Harborside Proj), Ser 2007A:
6.500%, 1–1–27		6,750		4,640
6.700%, 1–1–43		12,000		8,245
NY Enrg Research and Dev Auth, Fac Rev Bonds (Consolidated Edison Co of NY, Inc. Proj) Ser 2004B (Insured by SGI),
0.280%, 5–1–32 (A)		4,525		3,688
NY Enrg Research and Dev Auth, Fac Rev Bonds (Consolidated Edison Co of NY, Inc. Proj), Sub Ser 2004B-2 (Insured by SGI),
0.298%, 10–1–35 (A)		7,150		5,523
NY Enrg Research and Dev Auth, Pollutn Ctl Rev Bonds (Niagara Mohawk Power Corp Proj), Ser B (Insured by AMBAC),
0.536%, 12–1–25 (A)		18,180		16,816
NYC Indl Dev Agy, Spl Fac Rev Bonds (American Airlines, Inc. JFK Intl Arpt Proj), Ser 2005:
7.500%, 8–1–16 (D)		3,825		4,042
7.750%, 8–1–31 (D)		5,295		5,594
Rockland, NY, Rev Anticipation Notes, Ser 2012C,
2.500%, 9–24–13		6,570		6,602
Suffolk Cnty Indl Dev Agy, Civic Fac Rev Bonds (The Southampton Hosp Assoc Civic Fac), Ser 1999A:
7.250%, 1–1–20		310		311
7.250%, 1–1–30		1,940		1,942

2012 SEMIANNUAL REPORT 97

SCHEDULE OF INVESTMENTS

Ivy Municipal High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

MUNICIPAL BONDS (Continued)	Principal		Value
New York (Continued)
Suffolk Cnty Indl Dev Agy, Civic Fac Rev Bonds (The Southampton Hosp Assoc Civic Fac), Ser 1999B,
7.625%, 1–1–30	$	700	$	701
				88,917
North Carolina – 1.5%
NC Med Care Comsn, Ret Fac First Mtg Rev Bonds (Galloway Ridge Proj), Ser 2010A,
6.000%, 1–1–39		1,520		1,651
Wake Cnty Indl Fac and Pollutn Ctl Fin Auth, Pollutn Ctl Rev Rfdg Bonds (Carolina Power & Light Co Proj), Ser 1994A (Insured by AMBAC),
0.263%, 5–1–24 (A)		23,800		20,646
				22,297
Ohio – 2.4%
Cleveland-Cuyahoga Cnty Port Auth, Dev Rev Bonds (Garfield Heights Proj), Ser 2004D,
5.250%, 5–15–23		1,230		1,127
Cleveland-Cuyahoga Cnty Port Auth, Dev Rev Bonds (Flats East Dev Proj), Ser 2010B,
7.000%, 5–15–40		2,600		2,893
Columbus-Franklin Cnty Fin Auth, Dev Rev Bonds (Cent OH Rgnl Bond Fund), (One Neighborhood Proj), Ser 2010A,
6.500%, 11–15–39		1,225		1,262
Greene Cnty Port Auth, Adult Svc Fac Rev Bonds (Greene, Inc. Proj), Ser 2009,
7.500%, 12–1–33		500		602
OH Air Quality Dev Auth, Air Quality Rev Bonds (OH Vly Elec Corp Proj), Ser 2009E,
5.625%, 10–1–19		11,090		13,060
OH Higher Edu Fac Rev Bonds (Ashland Univ 2010 Proj),
6.250%, 9–1–24		945		1,012
OH Hosp Fac Rev Bonds (Summa Hlth Sys 2010 Proj),
5.750%, 11–15–40		500		560
SE OH Port Auth, Hosp Fac Rev Rfdg and Impvt Bonds(Mem Hlth Sys of OH),
6.000%, 12–1–42		3,750		3,945

MUNICIPAL BONDS (Continued)	Principal		Value
Ohio (Continued)
Toledo-Lucas Cnty Port Auth, Dev Rev Bonds (Toledo Sch for the Arts Proj), Ser 2007B,
5.500%, 5–15–28	$	880	$	944
Toledo-Lucas Cnty Port Auth, Dev Rev Bonds (Toledo Express Arpt Proj), Ser 2004C,
6.375%, 11–15–32		310		326
Toledo-Lucas Cnty Port Auth, Spl Assmt Rev Bonds (Crocker Park Pub Impvt Proj), Ser 2003,
5.375%, 12–1–35		9,000		9,253
				34,984
Oklahoma – 0.7%
OK Cnty Fin Auth, Ret Fac Rev Bonds (Concordia Life Care Cmnty), Ser 2005:
6.125%, 11–15–25		2,000		2,066
6.000%, 11–15–38		7,495		7,622
				9,688
Oregon – 1.1%
Hosp Fac Auth of Deschutes Cnty, OR, Hosp Rev Rfdg Bonds (Cascade Hlthcare Cmnty, Inc.), Ser 2008,
8.250%, 1–1–38		1,240		1,593
Hosp Fac Auth of Salem, OR, Rev Rfdg Bonds (Cap Manor, Inc.), Ser 2012:
6.000%, 5–15–42		2,900		3,126
6.000%, 5–15–47		1,600		1,720
OR Fac Auth, Rev Bonds (Concordia Univ Proj), Ser 2010A:
6.125%, 9–1–30		1,135		1,255
6.375%, 9–1–40		1,750		1,939
Port of Portland, OR, Portland Intl Arpt, Passenger Fac Charge Rev Bonds, Ser 2011A,
5.500%, 7–1–30		5,180		6,191
				15,824
Pennsylvania – 3.5%
Butler Cnty Hosp Auth, Hosp Rev Bonds (Butler Hlth Sys Proj), Ser 2009B,
7.250%, 7–1–39		200		242
Cumberland Cnty Muni Auth, Rfdg Rev Bonds (Asbury PA Oblig Group), Ser 2010,
6.125%, 1–1–45		5,000		5,294

MUNICIPAL BONDS (Continued)	Principal		Value
Pennsylvania (Continued)
Delaware Cnty Indl Dev Auth, Charter Sch Rev Bonds (Chester Cmnty Charter Sch Proj), Ser 2010A,
6.125%, 8–15–40	$	18,500	$	17,143
Hosp and Higher Edu Fac Auth of Philadelphia, Hosp Rev Bonds (Temple Univ Hlth Sys Oblig Grp), Ser 2012A,
5.625%, 7–1–42		5,500		5,845
PA Econ Dev Fin Auth, Solid Waste Disp Rev Bonds (Waste Mgmt, Inc. Proj), Ser 2004A,
4.700%, 11–1–21		675		727
PA Higher Edu Fac Auth, Rev Bonds (Edinboro Univ Fndtn Student Hsng Proj at Edinboro Univ of PA), Ser 2010,
6.000%, 7–1–43		2,530		2,853
PA Higher Edu Fac Auth, Student Hsng Rev Bonds (Univ Ppty, Inc. Student Hsng Proj at East Stroudsburg Univ of PA), Ser 2010,
6.000%, 7–1–21		1,000		1,191
Philadelphia Auth Indl Dev, Rev Bonds (Global Leadership Academy Charter Sch Proj), Ser 2010,
6.375%, 11–15–40		1,000		1,056
Philadelphia Auth Indl Dev, Rev Bonds (Mariana Bracetti Academy Charter Sch Proj), Ser 2011:
7.150%, 12–15–36		6,000		6,548
7.625%, 12–15–41		6,925		7,763
Philadelphia Auth Indl Dev, Rev Bonds (New Foundations Charter Sch Proj), Ser 2012,
6.625%, 12–15–41		2,000		2,188
Philadelphia, PA, Gas Works Rev Bonds (1998 Gen Ordinace), Ninth Ser,
5.250%, 8–1–40		1,250		1,336
The Borough of Langhorne Manor, Higher Edu and Hlth Auth (Bucks Cnty, PA), Hosp Rev Bonds (Lower Bucks Hosp), Ser 1992,
7.300%, 7–1–12 (D)		70		24
				52,210

98 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Municipal High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

MUNICIPAL BONDS (Continued)	Principal		Value
Puerto Rico – 3.1%
Cmnwlth of PR, Pub Impvt Rfdg Bonds (GO Bonds), Ser 2011 C,
6.500%, 7–1–40	$	3,000	$	3,376
Cmnwlth of PR, Pub Impvt Rfdg GO Bonds, Ser 2012A:
5.750%, 7–1–28		3,000		3,278
5.500%, 7–1–39		5,000		5,163
PR Aqueduct and Sewer Auth, Rev Bonds, Ser A,
6.000%, 7–1–47		5,000		5,302
PR Elec Power Auth, Power Rev Bonds, Ser 2010XX:
5.750%, 7–1–36		2,415		2,583
5.250%, 7–1–40		5,270		5,343
PR Elec Power Auth, Power Rev Bonds, Ser 2012A,
5.000%, 7–1–42		5,000		5,000
PR Pub Fin Corp (Cmnwlth Approp Bonds), 2011 Ser B:
6.000%, 8–1–25		3,900		4,469
6.000%, 8–1–26		1,000		1,140
PR Sales Tax Fin Corp, Sales Tax Rev Bonds, First Sub Ser 2009A,
6.375%, 8–1–39		8,000		9,297
PR Sales Tax Fin Corp, Sales Tax Rev Bonds, First Sub Ser 2010C,
6.500%, 8–1–35		1,000		1,192
				46,143
Rhode Island – 0.4%
Tob Stlmt Fin Corp, Tob Stlmt Asset-Bkd Bonds, Ser 2002A,
6.250%, 6–1–42		6,390		6,522
South Carolina – 0.3%
Piedmont Muni Pwr Agy, SC, Elec Rev Rfdg Bonds, Ser 2008C,
5.750%, 1–1–34		1,550		1,864
SC Jobs - Econ Dev Auth, Student Hsng Rev Bonds (Coastal Hsng Fndtn, LLC Proj), Ser 2009A:
6.000%, 4–1–30		1,510		1,617
6.500%, 4–1–42		750		821
				4,302
Tennessee – 0.6%
The Hlth and Edu Fac Board of Johnson City, TN, Hosp Rfdg Rev Bonds (Mountain States Hlth Alliance), Ser 2006A,
5.500%, 7–1–36		8,515		9,040

MUNICIPAL BONDS (Continued)	Principal		Value
Tennessee (Continued)
The Hlth and Edu Fac Board of Johnson City, TN, Hosp Rfdg Rev Bonds (Mountain States Hlth Alliance), Ser 2010A,
6.500%, 7–1–38	$	500	$	597
				9,637
Texas – 11.9%
Bexar Cnty Hlth Fac Dev Corp, Rev Bonds (Army Ret Residence Fndtn Proj), Ser 2010,
6.200%, 7–1–45		3,250		3,669
Cass Cnty Indl Dev Corp, Envirnmt Impvt Rev Bonds, Ser 2009A,
9.500%, 3–1–33		500		653
Cent TX Rgnl Mobility Auth, Sr Lien Rev Bonds, Ser 2010:
0.000%, 1–1–36 (C)		500		145
0.000%, 1–1–40 (C)		500		115
Cent TX Rgnl Mobility Auth, Sr Lien Rev Bonds, Ser 2011,
6.250%, 1–1–46		3,000		3,537
Dallas and Fort Worth, TX, Dallas/Fort Worth Intl Arpt, Joint Rev Rfdg Bonds, Ser 2012B,
5.000%, 11–1–32		5,000		5,644
Hackberry, TX, Combination Spl Assmt and Contract Rev Road Bonds (Hackberry Hidden Cove Pub Impvt Dist No. 2 Proj), Ser 2009A:
8.625%, 9–1–29		125		137
9.000%, 9–1–38		1,250		1,358
Harris Cnty Cultural Edu Fac Fin Corp, Rev Rfdg Bonds (Space Ctr Houston Proj), Sr Ser 2009,
7.000%, 8–15–28		500		529
Harris Cnty Indl Dev Corp, Arpt Fac Rev Rfdg Bonds (Continental Airlines, Inc. Proj), Ser 1998,
5.375%, 7–1–19		4,500		4,501
Harris Cnty, TX, Toll Road Sr Lien, Rev Rfdg Bonds (SIFMA Index Bonds), Ser 2012A:
0.810%, 8–15–17 (A)		2,110		2,113
0.960%, 8–15–18 (A)		2,000		2,003
Hopkins Cnty Hosp Dist, Hosp Rev Bonds, Ser 2008,
6.000%, 2–15–38		250		257
Houston Higher Edu Fin Corp, Edu Rev Bonds (Cosmos Fndtn, Inc.), Ser 2011A,
6.875%, 5–15–41		2,800		3,418

MUNICIPAL BONDS (Continued)	Principal		Value
Texas (Continued)
Houston, TX Arpt Sys, Sub Lien Rev Rfdg Bonds, Ser 2011B:
5.000%, 7–1–25	$	1,000	$	1,185
5.000%, 7–1–26		2,680		3,130
La Vernia Higher Edu Fin Corp (KIPP, Inc.), Ser 2009A,
6.375%, 8–15–44		2,000		2,309
La Vernia Higher Edu Fin Corp (Winfree Academy Charter Sch), Edu Rev Bonds, Ser 2009,
9.000%, 8–15–38		2,560		3,095
Love Field Arpt Modernization Corp, Spl Fac Rev Bonds (SW Airlines Co.—Love Field Modernization Prog Proj), Ser 2012,
5.000%, 11–1–28		4,000		4,308
Lubbock Hlth Fac Dev Corp, First Mtg Rev and RfdgBonds (Carillon Sr LifeCare Cmnty Proj), Ser 2005A,
6.500%, 7–1–26		1,500		1,563
Lubbock Hlth Fac Dev Corp, First Mtg Rev and Rfdg Bonds (Carillon Sr LifeCare Cmnty Proj), Ser 2005A,
6.625%, 7–1–36		7,000		7,218
Lufkin Hlth Fac Dev Corp, Rev Rfdg and Impvt Bonds (Mem Hlth Sys of East TX), Ser 2007,
5.500%, 2–15–37		6,025		6,215
Lufkin Hlth Fac Dev Corp, Rev Rfdg and Impvt Bonds (Mem Hlth Sys of East TX), Ser 2009,
6.250%, 2–15–37		5,000		5,465
Mission Econ Dev Corp, Solid Waste Disp Rev Bonds (Dallas Clean Enrg McCommas Bluff, LLC Proj), Ser 2011,
6.875%, 12–1–24		2,540		2,696
North TX Twy Auth, Spl Proj Sys Rev Bonds Convertible Cap Apprec Bonds, Ser 2011C,
0.000%, 9–1–43 (C)		8,500		6,237
Pharr, TX Higher Edu Fin Auth, Edu Rev Bonds (Idea Pub Sch), Ser 2009A:
6.250%, 8–15–29		350		397
6.500%, 8–15–39		200		229
Red River Hlth Fac Dev Corp, First Mtg Rev Bonds (Eden Home, Inc. Proj), Ser 2012:
7.000%, 12–15–32		6,200		6,547
7.250%, 12–15–42		3,800		3,984

2012 SEMIANNUAL REPORT 99

SCHEDULE OF INVESTMENTS

Ivy Municipal High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

MUNICIPAL BONDS (Continued)	Principal		Value
Texas (Continued)
Tarrant Cnty Cultural Edu Fac Fin Corp, Charter Sch Rev Bonds (Trinity Basin Preparatory Proj), Ser 2009A,
7.750%, 6–1–39	$	155	$	178
Tarrant Cnty Cultural Edu Fac Fin Corp, Ret Fac Rev Bonds (NW Sr Hsng Corp–Edgemere Proj), Ser 2006A:
6.000%, 11–15–26		2,035		2,178
6.000%, 11–15–36		6,615		7,040
Tarrant Cnty Cultural Edu Fac Fin Corp, Ret Fac Rev Bonds (Buckingham Sr Living Cmnty, Inc. Proj), Ser 2007:
5.500%, 11–15–22		3,000		3,155
5.625%, 11–15–27		250		260
5.750%, 11–15–37		11,840		12,263
Tarrant Cnty Cultural Edu Fac Fin Corp, Ret Fac Rev Bonds (Mirador Proj), Ser 2010A:
8.000%, 11–15–29		2,500		2,814
8.125%, 11–15–39		5,000		5,592
Travis Cnty Hlth Fac Dev Corp, Ret Fac Rev Bonds (Querencia at Barton Creek Proj), Ser 2005A,
5.100%, 11–15–15		400		417
TX Private Activity Bond Surface Trans Corp, Sr Lien Rev Bonds (North Tarrant Express Managed Lanes Proj), Ser 2009,
6.875%, 12–31–39		11,975		14,430
TX Private Activity Bond Surface Trans Corp, Sr Lien Rev Bonds (LBJ Infra Group LLC IH-635 Managed Lanes Proj), Ser 2010:
7.500%, 6–30–32		2,000		2,545
7.500%, 6–30–33		2,700		3,427
7.000%, 6–30–40		15,880		19,438
TX Pub Fin Auth Charter Sch Fin Corp, Edu Rev Bonds (Cosmos Fndtn, Inc.), Ser 2010A,
6.200%, 2–15–40		10,000		11,543
TX Pub Fin Auth Charter Sch Fin Corp, Edu Rev Bonds (Odyssey Academy, Inc.), Ser 2010A,
7.125%, 2–15–40		2,000		2,188
Wise Cnty, TX, Lease Rev Bonds (Parker Cnty Jr College Dist Proj), Ser 2011,
8.000%, 8–15–34		5,000		5,788
				175,913

MUNICIPAL BONDS (Continued)	Principal		Value
Utah – 0.4%
Muni Bldg Auth of Uintah Cnty, UT, Lease Rev Bonds, Ser 2008A,
5.300%, 6–1–28	$	350	$	390
UT State Charter Sch Fin Auth, Charter Sch Rev Bonds (Paradigm High Sch), Ser 2010,
6.375%, 7–15–40		2,160		2,228
UT State Charter Sch Fin Auth, Charter Sch Rev Bonds (North Davis Preparatory Academy), Ser 2010,
6.250%, 7–15–30		1,015		1,068
UT State Charter Sch Fin Auth, Charter Sch Rev Bonds (North Star Academy Proj), Ser 2010B,
7.000%, 7–15–45		2,100		2,308
				5,994
Virgin Islands – 0.1%
VI Pub Fin Auth, Sub Rev Bonds (VI Matching Fund Loan Note–Diageo Proj), Ser 2009A,
6.625%, 10–1–29		935		1,101
Virginia – 2.2%
Econ Dev Auth of James City Cnty, VA, Residential Care Fac Rev Bonds (VA Utd Methodist Homes of Williamsburg, Inc.), Ser 2007A:
5.150%, 7–1–17		715		673
5.400%, 7–1–27		1,580		1,391
5.500%, 7–1–37		2,600		2,146
Indl Dev Auth of Smyth Cnty, VA, Hosp Rev Bonds (Mountain States Hlth Alliance), Ser 2009A,
8.000%, 7–1–38		470		591
Indl Dev Auth of Washington Cnty, VA, Hosp Rev Bonds (Mountain States Hlth Alliance), Ser 2009C:
7.250%, 7–1–19		860		995
7.500%, 7–1–29		25		32
Mosaic Dist Cmnty Dev Auth, Fairfax Cnty, VA, Rev Bonds Ser 2011A,
6.875%, 3–1–36		4,300		4,870
Norfolk Redev and Hsng Auth, First Mtg Rev Bonds (Fort Norfolk Ret Cmnty, Inc. – Harbor’s Edge Proj), Ser 2004A,
6.125%, 1–1–35		1,000		1,007

MUNICIPAL BONDS (Continued)	Principal		Value
Virginia (Continued)
Norfolk Redev and Hsng Auth, Multifam Rental Hsng Fac Rev Bonds (1016 Ltd Partnership –Sussex Apt Proj), Ser 1996,
8.000%, 9–1–26	$	455	$	457
VA Small Business Fin Auth Sr Lien Rev Bonds (95 Express Lanes LLC Proj), Ser 2012,
5.000%, 7–1–34		3,000		3,161
VA Small Business Fin Auth, Sr Lien Rev Bonds (Elizabeth River Crossing Opco, LLC Proj), Ser 2012:
6.000%, 1–1–37		12,500		14,381
5.500%, 1–1–42		2,500		2,758
				32,462
Washington – 1.0%
Indl Dev Corp of the Port of Seattle, spl Fac RevRfdg Bonds (Delta Air Lines, Inc. Proj), Ser 2012,
5.000%, 4–1–30		4,000		4,023
Port of Seattle, Intermediate Lien Rev Rfdg Bonds, Ser 2012A,
5.000%, 8–1–33		1,635		1,913
Port of Sunnyside, Yakima Cnty, WA, Rev Bonds (Indl Wastewater Treatment Sys), Ser 2008,
6.625%, 12–1–21		2,250		2,624
Pub Hosp Dist No. 1, Skagit Cnty, WA (Skagit Vly Hosp), Hosp Rev Bonds, Ser 2005,
5.375%, 12–1–22		500		536
Pub Hosp Dist No. 1, Skagit Cnty, WA (Skagit Vly Hosp), Hosp Rev Bonds, Ser 2007,
5.625%, 12–1–25		500		553
WA Hlth Care Fac Auth, Rev Bonds (Cent WA Hlth Svcs Assoc), Ser 2009:
6.250%, 7–1–24		795		951
7.000%, 7–1–31		1,580		1,887
7.000%, 7–1–39		2,000		2,329
WA Hlth Care Fac Auth, Rev Bonds (Seattle Cancer Care Alliance), Ser 2008,
7.375%, 3–1–38		250		309
				15,125

100 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Municipal High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

MUNICIPAL BONDS (Continued)	Principal		Value
West Virginia – 0.3%
Brooke Cnty, WV, Rev Bonds (Bethany College), Ser 2011A,
6.750%, 10–1–37	$	4,000	$	4,657
Wisconsin – 1.0%
Pub Fin Auth Sr Arpt Fac Rev and Rfdg Bonds (TrIps Obligated Group), Ser 2012B,
5.000%, 7–1–42		2,500		2,519
WI Hlth and Edu Fac Auth, Rev Bonds (Beaver Dam Cmnty Hosp, Inc. Proj), Ser 2004A,
6.750%, 8–15–34		1,000		1,032
WI Hlth and Edu Fac Auth, Rev Bonds (Beloit College), Ser 2010A:
6.125%, 6–1–35		1,220		1,384
6.125%, 6–1–39		250		283
WI Hlth and Edu Fac Auth, Rev Bonds (Saint John’s Cmnty, Inc.), Ser 2009:
7.250%, 9–15–29		2,180		2,541
7.625%, 9–15–39		5,500		6,392
				14,151
TOTAL MUNICIPAL BONDS – 91.6%			$	1,357,532
(Cost: $1,273,004)
SHORT-TERM SECURITIES
Commercial Paper – 2.8%
Becton Dickinson & Co.,
0.220%, 10–17–12 (E)		5,350		5,349
Bemis Company, Inc.,
0.380%, 10–22–12 (E)		6,000		5,999
Danaher Corporation,
0.160%, 10–4–12 (E)		3,500		3,500
Ecolab Inc.,
0.340%, 10–10–12 (E)		7,000		6,999
Harley-Davidson Funding Corp. (GTD by Harley-Davidson, Inc.),
0.330%, 10–9–12 (E)		3,000		3,000
Kroger Co. (The):
0.400%, 10–2–12 (E)		5,421		5,421
0.400%, 10–3–12 (E)		6,000		6,000

SHORT-TERM SECURITIES (Continued)	Principal		Value
Commercial Paper (Continued)
Wisconsin Electric Power Co.:
0.200%, 10–1–12 (E)	$	1,283	$	1,283
0.210%, 10–11–12 (E)		5,000		5,000
				42,551
Municipal Obligations – 4.3%
CA Hlth Fac Fin Auth, Var Rate Hosp Rev Bonds (Adventist Hlth Sys/West), Ser 1998B (GTD by Bank of America, N.A.),
0.170%, 10–1–12 (F)		1,400		1,400
City of Whittier, Hlth Fac Rev Bonds (Presbyterian Intercmnty Hosp), Ser 2009 (GTD by U.S. Bank, N.A.),
0.150%, 10–3–12 (F)		834		834
IL Fin Auth, Var Rate Demand Rev Bonds (The CarleFndtn), Ser 2009 (GTD by JPMorgan Chase Bank, N.A.),
0.180%, 10–4–12 (F)		3,000		3,000
IL Fin Auth, Var Rate Demand Rev Bonds (The Univ of Chicago Med Ctr), Ser D (GTD by JPMorgan Chase & Co.),
0.190%, 10–1–12 (F)		3,000		3,000
Irvine Unif Sch Dist, Cmnty Fac Dist No. 09-1, Adj Rate Spl Tax Bonds, Ser 2012 A (GTD by U.S. Bank,N.A.),
0.170%, 10–1–12 (F)		2,415		2,415
LA Pub Fac Auth, Rev Bonds (Air Products and Chemicals Proj), Ser 2008A (GTD by Air Products and Chemicals, Inc.),
0.180%, 10–1–12 (F)		7,000		7,000
MI Strategic Fund, Var Rate Demand Ltd Oblig Rev Bonds (Air Products and Chemicals, Inc. Proj), Ser2007 (GTD by Bank of New York (The)),
0.180%, 10–1–12 (F)		13,270		13,270
MS Business Fin Corp, Gulf Opp Zone Indl Dev Rev Bonds (Chevron U.S.A. Inc. Proj), Ser 2007B,
0.190%, 10–1–12 (F)		8,929		8,929

SHORT-TERM SECURITIES (Continued)	Principal		Value
Municipal Obligations (Continued)
MS Business Fin Corp, Gulf Opp Zone Indl Dev Rev Bonds (Chevron U.S.A. Inc. Proj), Ser 2007D (GTD by Chevron Corporation),
0.190%, 10–1–12 (F)	$	2,000	$	2,000
MS Business Fin Corp, Gulf Opp Zone Indl Dev Var Rev Bonds (Chevron U.S.A. Inc. Proj), Ser E (GTD by Chevron Corporation),
0.190%, 10–1–12 (F)		12,056		12,056
Parish of St. Bernard, LA, Exempt Fac Rev Bonds (Mobil Oil Corp Proj), Ser 1996 (GTD by Exxon Mobil Corporation),
0.210%, 10–1–12 (F)		3,775		3,775
Port Arthur Navigation Dist Indl Dev Corp, Exempt Fac Var Rate Rev Bonds (Air Products Proj), Ser 2005 (GTD by Air Products and Chemicals, Inc.),
0.180%, 10–1–12 (F)		1,500		1,500
Univ of KS Hosp Auth, Var Rate Demand Hlth Fac Rev Bonds (KU Hlth Sys), Ser 2004,
0.200%, 10–1–12 (F)		3,870		3,870
				63,049
TOTAL SHORT-TERM SECURITIES – 7.1%			$	105,600
(Cost: $105,600)
TOTAL INVESTMENT SECURITIES – 98.7%			$	1,463,132
(Cost: $1,378,604)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 1.3%				19,971
NET ASSETS – 100.0%			$	1,483,103

2012 SEMIANNUAL REPORT 101

SCHEDULE OF INVESTMENTS

Ivy Municipal High Income Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

Notes to Schedule of Investments

(A) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012.

(B) Purchased on a when-issued basis with settlement subsequent to September 30, 2012.

(C) Zero coupon bond.

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

(E) Rate shown is the yield to maturity at September 30, 2012.

(F) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Municipal Bonds	$	—	$	1,272,964	$	84,568
Short-Term Securities		—		105,600		—
Total	$	—	$	1,378,564	$	84,568

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

	Municipal Bonds
Beginning Balance 4-1-12	$	724
Net realized gain (loss)		—
Net unrealized appreciation (depreciation)		(1,013	)
Purchases		80,713
Sales		—
Transfers into Level 3 during the period		4,144
Transfers out of Level 3 during the period		—
Ending Balance 9-30-12	$	84,568
Net change in unrealized appreciation (depreciation) for all Level 3 investments still held as of 9-30-12	$	(1,013	)

Quantitative Information about Level 3 fair value measurements:

	Fair Value at 9-30-12	Valuation Technique(s)	Unobservable Input(s)	Input Value(s)
Assets
Municipal Bonds	$84,568	Third-party vendor pricing service	Vendor Quotes	34.00- 92.50%

The following acronym is used throughout this schedule:

AMBAC = American Municipal Bond Assurance Corp.

AGM = Assured Guaranty Municipal

GTD = Guaranteed

SGI = Syncora Guarantee, Inc.

See Accompanying Notes to Financial Statements.

102 SEMIANNUAL REPORT 2012

PORTFOLIO HIGHLIGHTS

Ivy Pacific Opportunities Fund

ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	95.8%
Financials	30.6%
Consumer Discretionary	11.7%
Information Technology	10.9%
Energy	10.5%
Telecommunication Services	10.5%
Industrials	8.6%
Materials	6.7%
Consumer Staples	5.0%
Utilities	1.3%
Bonds	0.0%
Corporate Debt Securities	0.0%
Cash and Cash Equivalents	4.2%

Lipper Rankings

Category: Lipper Pacific Ex Japan Funds	Rank	Percentile
1 Year	80/95	84
3 Year	47/52	89
5 Year	23/31	72
10 Year	18/27	65

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Country Weightings

Pacific Basin	95.8%
China	24.0%
South Korea	15.7%
Hong Kong	13.8%
India	10.3%
Taiwan	10.0%
Singapore	8.8%
Thailand	6.6%
Other Pacific Basin	6.6%
Cash and Cash Equivalents and Options	4.2%

Top 10 Equity Holdings

Company	Country	Sector	Industry
Samsung Electronics Co., Ltd.	South Korea	Information Technology	Semiconductors
Galaxy Entertainment Group Limited, ADR	Hong Kong	Consumer Discretionary	Casinos & Gaming
PetroChina Company Limited, H Shares	China	Energy	Integrated Oil & Gas
Industrial and Commercial Bank of China Limited, H Shares	China	Financials	Diversified Banks
LG Chem, Ltd.	South Korea	Materials	Commodity Chemicals
AIA Group Limited	Hong Kong	Financials	Life & Health Insurance
SembCorp Industries Ltd	Singapore	Industrials	Industrial Conglomerates
China Mobile Limited	China	Telecommunication Services	Wireless Telecommunication Service
Keppel Corporation Limited	Singapore	Industrials	Industrial Conglomerates
StarHub Ltd	Singapore	Telecommunication Services	Wireless Telecommunication Service

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

2012 SEMIANNUAL REPORT 103

SCHEDULE OF INVESTMENTS

Ivy Pacific Opportunities Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
China – 24.0%
ANTA Sports Products Limited		14,421	$	11,084
Belle International Holdings Limited		1,839		3,330
Bona Film Group Limited, ADR (A)		601		3,143
Brilliance China Automotive Holdings Limited (A)		3,202		3,531
China Communications Construction Company Limited, H Shares		13,764		11,130
China Communications Services Corporation Limited,H Shares		23,364		13,529
China Minsheng Banking Corp., Ltd., H Shares (A)		5,000		3,946
China Minsheng Banking Corp., Ltd., H Shares (A)(B)		17,161		13,544
China Mobile Limited (A)		1,374		15,230
China Resources Power Holdings Company Limited		4,070		8,913
China Zenix Auto International Limited, ADR		600		1,932
CITIC Securities Company Limited, H Shares (A)		7,823		13,801
Industrial and Commercial Bank of China Limited, H Shares (A)		29,069		17,170
Longtop Financial Technologies Limited, ADR (A)		195		—	*
PetroChina Company Limited, H Shares		13,168		17,254
Ping An Insurance Group Co of China Ltd		1,325		8,845
Tencent Holdings Limited		403		13,731
Xueda Education Group, ADR (A)		238		785
				160,898
Hong Kong – 13.8%
AIA Group Limited (A)		4,314		16,077
Cheung Kong (Holdings) Limited		678		9,942
China Modern Dairy Holdings Ltd., H Shares (A)		22,464		5,852
China Overseas Land & Investment Limited		5,322		13,535
China Resources Cement Holdings Limited (A)		12,458		7,246
CNOOC Limited		3,061		6,277
Galaxy Entertainment Group Limited, ADR (A)		5,937		19,907
Sun Hung Kai Properties Limited		949		13,903
				92,739

COMMON STOCKS (Continued)	Shares		Value
India – 10.3%
Cairn India Limited (A)		1,980	$	12,427
Coal India Limited		1,426		9,702
Federal Bank Limited (The)		125		1,059
Grasim Industries Limited		169		10,597
Hexaware Technologies Limited		595		1,374
Housing Development Finance Corporation Limited (A)(B)		497		7,302
ICICI Bank Limited		564		11,321
Infrastructure Development Finance Company Limited (A)		1,325		3,880
State Bank of India		277		11,772
				69,434
Indonesia – 2.9%
PT Bumi Serpong Damai Tbk		50,975		6,019
PT Indocement Tunggal Prakarsa Tbk.		4,738		10,074
PT United Tractors Tbk		1,466		3,170
				19,263
Malaysia – 2.4%
Telekom Malaysia Berhad		6,308		12,776
UEM Land Holdings Berhad (A)		5,598		3,077
				15,853
Philippines – 1.3%
GT Capital Holdings Incorporated (B)		451		5,891
Megaworld Corporation		55,451		2,964
				8,855
Singapore – 8.8%
Global Logistic Properties Limited (A)(B)		847		1,732
Golden Agri-Resources Ltd.		10,191		5,481
Keppel Corporation Limited		1,621		15,057
Keppel Land Limited		2,298		6,648
SembCorp Industries Ltd		3,447		15,928
StarHub Ltd		4,777		14,480
				59,326
South Korea – 15.7%
Dongbu Insurance Co., Ltd.		243		10,576
GLOVIS Co., Ltd.		46		9,982
Hyundai Mobis		38		10,521
Hyundai Motor Company		63		14,293
LG Chem, Ltd.		57		16,909
Samsung Electronics Co., Ltd.		17		20,491
Shinhan Financial Group		285		9,731
SK Energy Co., Ltd.		86		13,088
				105,591

COMMON STOCKS (Continued)	Shares		Value
Taiwan – 10.0%
Delta Electronics, Inc.		1,772	$	6,861
Hiwin Technologies Corp.		338		2,478
MediaTek Incorporation		942		9,946
Novatek Microelectronics Corp.		2,784		10,067
Taiwan Mobile Co., Ltd.		3,869		14,123
Taiwan Semiconductor Manufacturing Company Ltd.		3,689		11,301
Uni-President Enterprises Corp.		7,182		12,740
				67,516
Thailand – 6.6%
Bangkok Bank Public Company Limited		1,881		12,285
BEC World Public Company Limited		5,158		10,390
PTT Public Company Limited		1,157		12,362
Thai Union Frozen Products Public Company Limited		3,848		9,157
				44,194
TOTAL COMMON STOCKS – 95.8%			$	643,669
(Cost: $583,247)
CORPORATE DEBT SECURITIES – 0.0%	Principal
India – 0.0%
Dr. Reddy’s Laboratories Ltd., 9.250%, 3–24–14 (C)		INR1,480	$	143
(Cost: $–)
SHORT-TERM SECURITIES
Master Note – 0.6%
Toyota Motor Credit Corporation, 0.122%, 10–5–12 (D)	$	3,798	$	3,798
TOTAL SHORT-TERM SECURITIES – 0.6%			$	3,798
(Cost: $3,798)
TOTAL INVESTMENT SECURITIES – 96.4%			$	647,610
(Cost: $587,045)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 3.6%				24,345
NET ASSETS – 100.0%			$	671,955

104 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Pacific Opportunities Fund (in thousands)

SEPTEMBER 30, 2012 (UNAUDITED)

Notes to Schedule of Investments

* Not shown due to rounding.

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

(B) Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2012, the total value of these securities amounted to $28,469 or 4.2% of net assets.

(C) Principal amount and exercise prices are denominated in the indicated foreign currency, where applicable (INR—Indian Rupee).

(D) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date the variable rate resets.

The following total return swap agreements were outstanding at September 30, 2012:

Counterparty	Notional Amount	Underlying Security	Termination Date		Financing Fee#		Unrealized Depreciation
UBS AG, London	$4,651	China Vanke Company Ltd.		6–19–13		USD LIBOR + 0.700%	$	(50	)

# The Fund pays the financing fee multiplied by the notional amount each month. On the termination date of the swap contracts, the Fund will pay/receive the return of the underlying security.

The following written options were outstanding at September 30, 2012 (contracts and exercise prices unrounded):

Underlying Security	Counterparty, if OTC	Type	Number of Contracts		Expiration Month		Exercise Price		Premium Received		Market Value
Baidu.com, Inc., ADR	N/A	Put		579		December 2012	$	100.00	$	231	$	(187	)

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks
Consumer Discretionary	$	78,917	$	—	$	—
Consumer Staples		33,230		—		—
Energy		71,110		—		—
Financials		205,019		—		—
Industrials		57,744		—		—
Information Technology		73,772		—		—	*
Materials		44,826		—		—
Telecommunication Services		70,138		—		—
Utilities		8,913		—		—
Total Common Stocks	$	643,669	$	—	$	—	*
Corporate Debt Securities		—		143		—
Short-Term Securities		—		3,798		—
Total	$	643,669	$	3,941	$	—	*
Liabilities
Written Options	$	187	$	—	$	—
Swap Agreements	$	—	$	50	$	—

The following acronyms are used throughout this schedule:

ADR = American Depositary Receipts

OTC = Over the Counter

2012 SEMIANNUAL REPORT 105

SCHEDULE OF INVESTMENTS

Ivy Pacific Opportunities Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

Market Sector Diversification
(as a % of net assets)
Financials	30.6	%
Consumer Discretionary	11.7	%
Information Technology	10.9	%
Telecommunication Services	10.5	%
Energy	10.5	%
Industrials	8.6	%
Materials	6.7	%
Consumer Staples	5.0	%
Utilities	1.3	%
Health Care	0.0	%
Other+	4.2	%

+Includes cash and cash equivalents and other assets and liabilities

See Accompanying Notes to Financial Statements.

106 SEMIANNUAL REPORT 2012

PORTFOLIO HIGHLIGHTS

Ivy Small Cap Growth Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	97.3%
Information Technology	29.5%
Industrials	18.4%
Financials	14.9%
Health Care	14.0%
Consumer Discretionary	12.1%
Energy	4.8%
Consumer Staples	3.3%
Materials	0.3%
Cash and Cash Equivalents	2.7%

Lipper Rankings

Category: Lipper Small-Cap Growth Funds	Rank	Percentile
1 Year	326/537	61
3 Year	129/482	27
5 Year	57/420	14
10 Year	49/269	19

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Top 10 Equity Holdings

Company	Sector
Ultimate Software Group, Inc. (The)	Information Technology
SVB Financial Group	Financials
Volcano Corporation	Health Care
Affiliated Managers Group, Inc.	Financials
Panera Bread Company, Class A	Consumer Discretionary
Westinghouse Air Brake Technologies Corporation	Industrials
Portfolio Recovery Associates, Inc.	Industrials
OSI Systems, Inc.	Information Technology
United Natural Foods, Inc.	Consumer Staples
ACI Worldwide, Inc.	Information Technology

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

2012 SEMIANNUAL REPORT 107

SCHEDULE OF INVESTMENTS

Ivy Small Cap Growth Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Advertising – 0.4%
Acquity Group Ltd, ADR (A)		349	$	3,412
Air Freight & Logistics – 1.6%
Hub Group, Inc. (A)		426		12,635
Apparel Retail – 2.3%
Tilly’s, Class A (A)		165		3,021
Zumiez Inc. (A)		535		14,835
				17,856
Apparel, Accessories & Luxury Goods – 2.6%
Quiksilver, Inc. (A)		1,072		3,557
Under Armour, Inc., Class A (A)		304		16,958
				20,515
Application Software – 10.3%
ACI Worldwide, Inc. (A)		448		18,920
Qlik Technologies Inc. (A)		562		12,590
SS&C Technologies Holdings, Inc. (A)		329		8,304
Synchronoss Technologies, Inc. (A)		378		8,665
Tyler Technologies, Inc. (A)		109		4,798
Ultimate Software Group, Inc. (The) (A)		269		27,491
				80,768
Asset Management & Custody Banks – 4.0%
Affiliated Managers Group, Inc. (A)		192		23,567
Safeguard Scientifics, Inc. (A)		477		7,476
				31,043
Automotive Retail – 0.3%
Lithia Motors, Inc.		60		2,012
Biotechnology – 3.3%
Cepheid (A)		253		8,714
Incyte Corporation (A)		788		14,219
Ironwood Pharmaceuticals, Inc., Class A (A)		234		2,991
				25,924
Brewers – 0.7%
Boston Beer Company, Inc. (The), Class A (A)		48		5,386
Communications Equipment – 3.8%
Aruba Networks, Inc. (A)		680		15,299
Finisar Corporation (A)		574		8,211
JDS Uniphase Corporation (A)		209		2,587
Procera Networks, Inc. (A)		172		4,035
				30,132
Construction & Farm Machinery & Heavy Trucks – 2.9%
Westinghouse Air Brake Technologies Corporation		287		23,011

COMMON STOCKS (Continued)	Shares		Value
Consumer Finance – 1.9%
First Cash Financial Services, Inc. (A)		318	$	14,619
Data Processing & Outsourced Services – 2.0%
Jack Henry & Associates, Inc.		418		15,823
Distributors – 1.2%
Pool Corporation		236		9,796
Diversified Support Services – 2.8%
Portfolio Recovery Associates, Inc. (A)		213		22,263
Electrical Components & Equipment – 0.7%
II-VI Incorporated (A)		268		5,105
Electronic Equipment & Instruments – 2.7%
OSI Systems, Inc. (A)		275		21,441
Electronic Manufacturing Services – 1.5%
IPG Photonics Corporation (A)		211		12,062
Environmental & Facilities Services – 3.4%
Team, Inc. (A)		366		11,651
Waste Connections, Inc.		506		15,300
				26,951
Fertilizers & Agricultural Chemicals – 0.3%
American Vanguard Corporation		59		2,046
Food Distributors – 2.6%
United Natural Foods, Inc. (A)		346		20,204
Health Care Equipment – 5.7%
DexCom, Inc. (A)		607		9,123
Heartware International, Inc. (A)		75		7,125
Thoratec Corporation (A)		134		4,633
Volcano Corporation (A)		850		24,275
				45,156
Health Care Facilities – 2.6%
Community Health Systems, Inc. (A)		355		10,333
LifePoint Hospitals, Inc. (A)		240		10,284
				20,617
Health Care Supplies – 1.1%
Endologix, Inc. (A)		597		8,251
Health Care Technology – 1.3%
athenahealth, Inc. (A)		107		9,810
Human Resource & Employment Services – 0.9%
Kforce Inc. (A)		583		6,868

COMMON STOCKS (Continued)	Shares		Value
Internet Software & Services – 1.0%
Demandware, Inc. (A)		102	$	3,242
ExactTarget, Inc. (A)		172		4,166
Trulia, Inc. (A)		31		664
				8,072
Leisure Facilities – 2.2%
Vail Resorts, Inc.		302		17,416
Office Services & Supplies – 0.7%
United Stationers Inc.		203		5,282
Oil & Gas Equipment & Services – 1.4%
Dril-Quip, Inc. (A)		143		10,293
Forum Energy Technologies, Inc. (A)		31		761
				11,054
Oil & Gas Exploration & Production – 3.4%
Bonanza Creek Energy, Inc. (A)		147		3,454
Gulfport Energy Corporation (A)		232		7,256
Laredo Petroleum Holdings, Inc. (A)		156		3,433
Oasis Petroleum LLC (A)		209		6,171
Rosetta Resources Inc. (A)		135		6,467
				26,781
Regional Banks – 8.1%
Bank of the Ozarks, Inc.		376		12,971
Signature Bank (A)		247		16,535
SVB Financial Group (A)		440		26,597
UMB Financial Corporation		167		8,144
				64,247
Research & Consulting Services – 0.1%
CoStar Group, Inc. (A)		6		480
Restaurants – 3.1%
Panera Bread Company, Class A (A)		138		23,497
Semiconductors – 3.6%
Cavium Inc. (A)		233		7,766
Power Integrations, Inc.		200		6,074
Semtech Corporation (A)		572		14,383
				28,223
Specialized REITs – 0.9%
Strategic Hotels & Resorts, Inc. (A)		1,143		6,869
Systems Software – 4.6%
Eloqua, Inc. (A)		85		1,679
MICROS Systems, Inc. (A)		359		17,649
NetSuite Inc. (A)		259		16,525
				35,853

108 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Small Cap Growth Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS (Continued)	Shares		Value
Trading Companies & Distributors – 3.2%
Beacon Roofing Supply, Inc. (A)		247	$	7,042
Rush Enterprises, Inc. (A)		59		1,140
Watsco, Inc.		226		17,114
				25,296
Trucking – 2.1%
Landstar System, Inc.		340		16,089
TOTAL COMMON STOCKS – 97.3%			$	762,865
(Cost: $583,461)

SHORT-TERM SECURITIES	Principal		Value
Commercial Paper – 1.6%
Ecolab Inc., 0.340%, 10-4-12 (B)	$	4,000	$	4,000
Freddie Mac Discount Notes, 0.130%, 12-18-12 (B)		3,000		2,999
Wisconsin Electric Power Co.: 0.200%, 10-1-12 (B)		2,526		2,526
0.190%, 10-3-12 (B)		3,000		3,000
				12,525

SHORT-TERM SECURITIES (Continued)	Principal		Value
Master Note – 0.5%
Toyota Motor Credit Corporation, 0.122%, 10-5-12 (C)	$	4,011	$	4,011
TOTAL SHORT-TERM SECURITIES – 2.1%			$	16,536
(Cost: $16,536)
TOTAL INVESTMENT SECURITIES – 99.4%			$	779,401
(Cost: $599,997)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 0.6%				4,346
NET ASSETS – 100.0%			$	783,747

Notes to Schedule of Investments

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

(B) Rate shown is the yield to maturity at September 30, 2012.

(C) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks	$	762,865	$	—	$	—
Short-Term Securities		—		16,536		—
Total	$	762,865	$	16,536	$	—

The following acronyms are used throughout this schedule:

REIT = Real Estate Investment Trust

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 109

PORTFOLIO HIGHLIGHTS

Ivy Small Cap Value Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	90.4%
Consumer Discretionary	23.1%
Financials	21.4%
Energy	11.0%
Information Technology	8.4%
Materials	8.0%
Industrials	7.2%
Health Care	5.8%
Utilities	4.4%
Consumer Staples	1.1%
Cash and Cash Equivalents	9.6%

Lipper Rankings

Category: Lipper Small-Cap Value Funds	Rank	Percentile
1 Year	148/275	54
3 Year	167/222	75
5 Year	75/193	39
10 Year	65/112	58

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Top 10 Equity Holdings

Company	Sector
Triumph Group, Inc.	Industrials
Visteon Corporation	Consumer Discretionary
McDermott International, Inc.	Energy
Cinemark Holdings, Inc.	Consumer Discretionary
Community Health Systems, Inc.	Health Care
First Horizon National Corporation	Financials
Great Plains Energy Incorporated	Utilities
Boise Inc.	Materials
Hanesbrands Inc.	Consumer Discretionary
Lexington Corporation Properties Trust	Financials

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

110 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Small Cap Value Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Aerospace & Defense – 3.0%
Triumph Group, Inc.		127	$	7,955
Apparel Retail – 1.2%
AnnTaylor Stores Corporation (A)		82		3,101
Apparel, Accessories & Luxury Goods – 4.0%
Hanesbrands Inc. (A)		178		5,687
Jones Apparel Group, Inc.		357		4,592
				10,279
Application Software – 1.0%
Synchronoss Technologies, Inc. (A)		113		2,590
Auto Parts & Equipment – 4.6%
Dana Holding Corporation		314		3,863
Visteon Corporation (A)		174		7,750
				11,613
Broadcasting – 3.7%
Belo Corp., Class A		694		5,433
Entercom Communications Corp. (A)		620		4,251
				9,684
Construction & Farm Machinery & Heavy Trucks – 2.4%
Accuride Corporation (A)		381		1,776
Manitowoc Company, Inc. (The)		325		4,339
				6,115
Data Processing & Outsourced Services – 1.8%
CoreLogic Inc. (A)		180		4,773
Electric Utilities – 2.3%
Great Plains Energy Incorporated		268		5,973
Food Retail – 0.3%
Roundy’s Supermarkets, Inc.		145		877
Forest Products – 1.4%
Louisiana-Pacific Corporation (A)		280		3,504
Gas Utilities – 2.1%
Southwest Gas Corporation		120		5,324
Health Care Facilities – 5.3%
Community Health Systems, Inc. (A)		229		6,684
HealthSouth Corporation (A)		164		3,934
LifePoint Hospitals, Inc. (A)		71		3,029
				13,647
Health Care Services – 0.5%
Team Health Holdings, Inc. (A)		47		1,281

COMMON STOCKS (Continued)	Shares		Value
Homebuilding – 2.0%
M.D.C. Holdings, Inc.		133	$	5,110
Movies & Entertainment – 2.7%
Cinemark Holdings, Inc.		312		7,000
Office REITs – 2.2%
Lexington Corporation Properties Trust		581		5,611
Oil & Gas Equipment & Services – 4.6%
GulfMark Offshore, Inc. (A)		148		4,900
McDermott International, Inc. (A)		573		7,006
				11,906
Oil & Gas Exploration & Production – 3.2%
EV Energy Partners, L.P.		57		3,522
Oasis Petroleum LLC (A)		72		2,128
Petroleum Development Corporation (A)		82		2,606
				8,256
Oil & Gas Storage & Transportation – 3.2%
Atlas Pipeline Partners, L.P.		87		2,966
EQT Midstream Partners, LP (A)		92		2,661
MarkWest Energy Partners, L.P.		47		2,569
				8,196
Paper Packaging – 2.3%
Boise Inc.		667		5,844
Personal Products – 0.8%
Inter Parfums, Inc.		111		2,031
Property & Casualty Insurance – 2.1%
Argo Group International Holdings, Ltd.		164		5,312
Publishing – 4.2%
E. W. Scripps Company (The) (A)		417		4,442
Valassis Communications, Inc. (A)		162		3,987
Washington Post Company, Class B (The)		7		2,469
				10,898
Regional Banks – 7.9%
Bank of Marin Bancorp		71		3,004
First Horizon National Corporation		681		6,556
First Niagara Financial Group, Inc.		593		4,800
Wintrust Financial Corporation		51		1,920
Zions Bancorporation		217		4,474
				20,754

COMMON STOCKS (Continued)	Shares		Value
Reinsurance – 4.2%
Endurance Specialty Holdings Ltd.		143	$	5,509
Reinsurance Group of America, Incorporated		92		5,324
				10,833
Restaurants – 0.7%
Bloomin’ Brands, Inc. (A)		117		1,924
Semiconductor Equipment – 1.4%
Teradyne, Inc. (A)		248		3,532
Semiconductors – 2.9%
Freescale Semiconductor, Inc. (A)		406		3,859
Spansion Inc. (A)		309		3,680
				7,539
Specialized REITs – 1.7%
Strategic Hotels & Resorts, Inc. (A)		732		4,396
Specialty Chemicals – 4.3%
Ashland Inc.		70		5,005
Cytec Industries Inc.		57		3,728
RPM International Inc.		93		2,654
				11,387
Technology Distributors – 1.3%
Insight Enterprises, Inc. (A)		186		3,243
Thrifts & Mortgage Finance – 1.9%
Capitol Federal Financial		403		4,822
Trucking – 1.8%
Marten Transport, Ltd.		189		3,313
Werner Enterprises, Inc.		57		1,227
				4,540
TOTAL COMMON STOCKS – 89.0%			$	229,850
(Cost: $203,358)
INVESTMENT FUNDS – 1.4%
Asset Management & Custody Banks – 1.4%
THL Credit, Inc.		264	$	3,703
(Cost: $3,396)

2012 SEMIANNUAL REPORT 111

SCHEDULE OF INVESTMENTS

Ivy Small Cap Value Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

SHORT-TERM SECURITIES	Principal		Value
Commercial Paper – 4.3%
BHP Billiton Finance (USA) Limited (GTD by BHP Billiton Limited),
0.180%, 10-2-12 (B)	$	4,000	$	4,000
Diageo Capital plc (GTD by Diageo plc),
0.300%, 10-1-12 (B)		3,010		3,010
Freddie Mac Discount Notes,
0.130%, 12-11-12 (B)		4,000		3,999
				11,009
Master Note – 1.5%
Toyota Motor Credit Corporation,
0.122%, 10-5-12 (C)		3,919		3,919

SHORT-TERM SECURITIES (Continued)	Principal		Value
Municipal Obligations – Taxable – 4.0%
MS Business Fin Corp, Gulf Opp Zone Indl Dev Rev Bonds (Chevron U.S.A. Inc. Proj), Ser 2007B,
0.190%, 10-1-12 (C)	$	2,000	$	2,000
MS Business Fin Corp, Gulf Opp Zone Indl Dev Rev Bonds (Chevron U.S.A. Inc. Proj), Ser 2010J (GTD by Chevron Corporation),
0.190%, 10-1-12 (C)		3,920		3,920

SHORT-TERM SECURITIES (Continued)	Principal		Value
Municipal Obligations – Taxable (Continued)
The Indl Dev Auth of Phoenix, AZ, Adj Mode Multifam Hsng Rev Rfdg Bonds (Paradise Lakes Apt Proj), Ser 2007A (GTD by Wachovia Bank, N.A.),
0.190%, 10-4-12 (C)	$	4,386	$	4,386
				10,306
TOTAL SHORT-TERM SECURITIES – 9.8%			$	25,234
(Cost: $25,234)
TOTAL INVESTMENT SECURITIES – 100.2%			$	258,787
(Cost: $231,988)
LIABILITIES, NET OF CASH AND OTHER ASSETS – (0.2%)				(458	)
NET ASSETS – 100.0%			$	258,329

Notes to Schedule of Investments

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

(B) Rate shown is the yield to maturity at September 30, 2012.

(C) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks	$	229,850	$	—	$	—
Investment Funds		3,703		—		—
Short-Term Securities		—		25,234		—
Total	$	233,553	$	25,234	$	—

The following acronyms are used throughout this schedule:

GTD = Guaranteed

REIT = Real Estate Investment Trust

See Accompanying Notes to Financial Statements.

112 SEMIANNUAL REPORT 2012

PORTFOLIO HIGHLIGHTS

Ivy Tax-Managed Equity Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	93.0%
Information Technology	32.6%
Consumer Discretionary	22.8%
Consumer Staples	11.4%
Industrials	8.9%
Energy	7.5%
Financials	3.7%
Health Care	3.1%
Materials	3.0%
Cash and Cash Equivalents	7.0%

Lipper Rankings

Category: Lipper Large-Cap Growth Funds	Rank	Percentile
1 Year	599/709	85
3 Year	519/648	80

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Top 10 Equity Holdings

Company	Sector
Apple Inc.	Information Technology
MasterCard Incorporated, Class A	Information Technology
Precision Castparts Corp.	Industrials
Monsanto Company	Materials
Starbucks Corporation	Consumer Discretionary
Cognizant Technology Solutions Corporation, Class A	Information Technology
Philip Morris International Inc.	Consumer Staples
Google Inc., Class A	Information Technology
Las Vegas Sands, Inc.	Consumer Discretionary
Schlumberger Limited	Energy

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

2012 SEMIANNUAL REPORT 113

SCHEDULE OF INVESTMENTS

Ivy Tax-Managed Equity Fund (in thousands)

SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Aerospace & Defense – 5.1%
Boeing Company (The)		6	$	430
Precision Castparts Corp.		4		649
				1,079
Apparel, Accessories & Luxury Goods – 1.4%
Under Armour, Inc., Class A (A)		5		287
Application Software – 2.0%
Intuit Inc.		7		432
Asset Management & Custody Banks – 1.9%
T. Rowe Price Group, Inc.		6		405
Auto Parts & Equipment – 1.4%
BorgWarner Inc. (A)		4		294
Automotive Retail – 1.4%
AutoZone, Inc. (A)		1		307
Broadcasting – 4.2%
CBS Corporation, Class B		16		572
Discovery Holding Company, Class A (A)		5		290
				862
Casinos & Gaming – 3.8%
Las Vegas Sands, Inc.		13		597
Wynn Resorts, Limited		2		215
				812
Communications Equipment – 2.1%
QUALCOMM Incorporated		7		437
Computer Hardware – 10.3%
Apple Inc. (A)		3		2,168
Consumer Finance – 1.8%
American Express Company		7		386
Data Processing & Outsourced Services – 6.2%
MasterCard Incorporated, Class A		2		740
Visa Inc., Class A		4		573
				1,313
Distillers & Vintners – 0.9%
Beam Inc.		3		200
Fertilizers & Agricultural Chemicals – 3.0%
Monsanto Company		7		643
Footwear – 2.2%
NIKE, Inc., Class B		5		473
Hotels, Resorts & Cruise Lines – 0.8%
Starwood Hotels & Resorts Worldwide, Inc.		3		178
Household Products – 1.1%
Colgate-Palmolive Company		2		238

COMMON STOCKS (Continued)	Shares		Value
Hypermarkets & Super Centers – 1.4%
Costco Wholesale Corporation		3	$	296
Industrial Machinery – 2.3%
Pall Corporation		8		480
Internet Retail – 1.8%
Amazon.com, Inc. (A)		2		387
Internet Software & Services – 3.1%
Facebook, Inc., Class A (A)		3		61
Google Inc., Class A (A)		1		604
				665
IT Consulting & Other Services – 3.0%
Cognizant Technology Solutions Corporation, Class A (A)		9		636
Managed Health Care – 1.8%
UnitedHealth Group Incorporated		7		373
Movies & Entertainment – 1.8%
Walt Disney Company (The)		7		384
Oil & Gas Equipment & Services – 7.5%
Core Laboratories N.V.		2		207
Halliburton Company		8		272
National Oilwell Varco, Inc.		7		522
Schlumberger Limited		8		586
				1,587
Packaged Foods & Meats – 1.0%
Mead Johnson Nutrition Company		3		205
Personal Products – 1.7%
Estee Lauder Companies, Inc. (The), Class A		6		369
Pharmaceuticals – 1.3%
Allergan, Inc.		3		281
Railroads – 1.5%
Kansas City Southern		4		327
Restaurants – 4.0%
Starbucks Corporation		13		641
YUM! Brands, Inc.		3		208
				849
Semiconductor Equipment – 1.5%
ASML Holding N.V., NY Registry Shares		2		119
Lam Research Corporation (A)		6		196
				315

COMMON STOCKS (Continued)	Shares		Value
Semiconductors – 2.2%
Altera Corporation		8	$	256
Broadcom Corporation, Class A		6		203
				459
Soft Drinks – 2.3%
Coca-Cola Company (The)		9		330
PepsiCo, Inc.		2		161
				491
Systems Software – 2.2%
Oracle Corporation		10		305
VMware, Inc., Class A (A)		2		166
				471
Tobacco – 3.0%
Philip Morris International Inc.		7		620
TOTAL COMMON STOCKS – 93.0%			$	19,709
(Cost: $15,982)
SHORT-TERM SECURITIES	Principal
Master Note – 6.9%
Toyota Motor Credit Corporation, 0.122%, 10-5-12 (B)	$	1,468		1,468
TOTAL SHORT-TERM SECURITIES – 6.9%			$	1,468
(Cost: $1,468)
TOTAL INVESTMENT SECURITIES – 99.9%			$	21,177
(Cost: $17,450)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 0.1%				24
NET ASSETS – 100.0%			$	21,201

114 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Tax-Managed Equity Fund (in thousands)

SEPTEMBER 30, 2012 (UNAUDITED)

Notes to Schedule of Investments

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

(B) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks	$	19,709	$	—	$	—
Short-Term Securities		—		1,468		—
Total	$	19,709	$	1,468	$	—

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 115

PORTFOLIO HIGHLIGHTS

Ivy Value Fund ALL DATA IS AS OF SEPTEMBER 30, 2012 (UNAUDITED)

Asset Allocation

Stocks	94.2%
Financials	27.9%
Energy	21.5%
Health Care	15.8%
Consumer Discretionary	8.4%
Information Technology	8.0%
Telecommunication Services	3.9%
Consumer Staples	3.5%
Industrials	2.1%
Utilities	2.1%
Materials	1.0%
Cash and Cash Equivalents	5.8%

Lipper Rankings

Category: Lipper Large-Cap Value Funds	Rank	Percentile
1 Year	299/451	67
3 Year	260/409	64
5 Year	105/347	31
10 Year	107/225	48

Past performance is no guarantee of future results. Rankings are for Class A shares and are based on average annual total returns, but do not consider sales charges. Rankings for other share classes may vary.

Top 10 Equity Holdings

Company	Sector
JPMorgan Chase & Co.	Financials
AT&T Inc.	Telecommunication Services
Capital One Financial Corporation	Financials
UnitedHealth Group Incorporated	Health Care
Marathon Petroleum Corporation	Energy
Teva Pharmaceutical Industries Limited, ADR	Health Care
ACE Limited	Financials
Marathon Oil Corporation	Energy
MetLife, Inc.	Financials
Time Warner Cable Inc.	Consumer Discretionary

See your advisor or www.ivyfunds.com for more information on the Fund’s most recently published Top 10 Equity Holdings.

116 SEMIANNUAL REPORT 2012

SCHEDULE OF INVESTMENTS

Ivy Value Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

COMMON STOCKS	Shares		Value
Biotechnology – 2.0%
Amgen Inc.		30	$	2,504
Cable & Satellite – 3.1%
Time Warner Cable Inc.		41		3,897
Computer Hardware – 1.1%
Hewlett-Packard Company		81		1,375
Computer Storage & Peripherals – 0.3%
EMC Corporation (A)		12		330
Consumer Finance – 3.8%
Capital One Financial Corporation		83		4,738
Department Stores – 1.7%
Macy’s Inc.		55		2,058
Drug Retail – 2.7%
CVS Corporation		70		3,365
Electronic Manufacturing Services – 1.5%
TE Connectivity Ltd.		53		1,796
Fertilizers & Agricultural Chemicals – 1.0%
Mosaic Company (A)		21		1,221
General Merchandise Stores – 2.0%
Target Corporation		38		2,437
Health Care Distributors – 2.0%
McKesson Corporation (B)		29		2,495
Home Improvement Retail – 1.6%
Lowe’s Companies, Inc.		66		1,999
Industrial Machinery – 2.1%
Parker Hannifin Corporation		31		2,591
Integrated Telecommunication Services – 3.9%
AT&T Inc.		129		4,856
Investment Banking & Brokerage – 2.8%
Goldman Sachs Group, Inc. (The)		31		3,479
Life & Health Insurance – 3.2%
MetLife, Inc.		116		3,987

COMMON STOCKS (Continued)	Shares		Value
Managed Health Care – 8.5%
Aetna Inc.		74	$	2,922
UnitedHealth Group Incorporated		84		4,666
WellPoint, Inc. (B)		48		2,779
				10,367
Mortgage REITs – 1.0%
American Capital Agency Corp. (B)		37		1,280
Multi-Utilities – 2.1%
PG&E Corporation		62		2,633
Office Electronics – 1.7%
Xerox Corporation (B)		280		2,053
Oil & Gas Exploration & Production – 5.7%
ConocoPhillips		54		3,082
Marathon Oil Corporation		136		4,019
				7,101
Oil & Gas Refining & Marketing – 5.4%
Marathon Petroleum Corporation		78		4,239
Phillips 66 (B)		54		2,490
				6,729
Oil & Gas Storage & Transportation – 10.4%
Access Midstream Partners, L.P.		15		507
Kinder Morgan Management, LLC (A)		25		1,884
MarkWest Energy Partners, L.P.		59		3,227
Plains All American Pipeline, L.P.		44		3,889
Regency Energy Partners LP		138		3,216
				12,723
Other Diversified Financial Services – 8.3%
Citigroup Inc.		117		3,822
JPMorgan Chase & Co.		157		6,358
				10,180
Packaged Foods & Meats – 0.8%
Kraft Foods Group, Inc. (A)		21		951

COMMON STOCKS (Continued)	Shares		Value
Pharmaceuticals – 3.3%
Teva Pharmaceutical Industries Limited, ADR		100	$	4,137
Property & Casualty Insurance – 3.3%
ACE Limited		54		4,105
Regional Banks – 1.4%
SunTrust Banks, Inc.		59		1,679
Reinsurance – 4.1%
RenaissanceRe Holdings Ltd.		34		2,589
Validus Holdings, Ltd.		74		2,516
				5,105
Semiconductor Equipment – 1.8%
Lam Research Corporation (A)		74		2,341
Systems Software – 1.6%
Oracle Corporation		64		2,022
TOTAL COMMON STOCKS – 94.2%			$	116,534
(Cost: $99,593)
SHORT-TERM SECURITIES	Principal
Commercial Paper – 2.0%
McCormick & Co. Inc., 0.210%, 10–1–12 (C)	$	2,471		2,471
Master Note – 3.1%
Toyota Motor Credit Corporation, 0.122%, 10–5–12 (D)		3,839		3,839
TOTAL SHORT-TERM SECURITIES – 5.1%			$	6,310
(Cost: $6,310)
TOTAL INVESTMENT SECURITIES – 99.3%			$	122,844
(Cost: $105,903)
CASH AND OTHER ASSETS, NET OF LIABILITIES – 0.7%				839
NET ASSETS – 100.0%			$	123,683

Notes to Schedule of Investments

*Not shown due to rounding.

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

(B) All or a portion of the security position is held in collateralized accounts to cover potential obligations with respect to outstanding written options.

(C) Rate shown is the yield to maturity at September 30, 2012.

(D) Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2012. Date shown represents the date that the variable rate resets.

2012 SEMIANNUAL REPORT 117

SCHEDULE OF INVESTMENTS

Ivy Value Fund (in thousands) SEPTEMBER 30, 2012 (UNAUDITED)

The following written options were outstanding at September 30, 2012 (contracts and exercise prices unrounded):

Underlying Security	Counterparty, if OTC	Type	Number of Contracts		Expiration Month		Exercise Price		Premium Received		Market Value
Aetna Inc.	N/A	Put		96		November 2012	$	35.00	$	5	$	(4	)
Apple Inc.	N/A	Put		18		November 2012		625.00		13		(30	)
	N/A	Put		18		December 2012		610.00		16		(34	)
McKesson Corporation	N/A	Call		86		November 2012		92.50		9		(3	)
Phillips 66	N/A	Call		111		November 2012		50.00		9		(8	)
Target Corporation	N/A	Put		57		October 2012		55.00		4		—	*
WellPoint, Inc.	N/A	Call		58		October 2012		67.50		4		—	*
	N/A	Put		64		November 2012		52.50		5		(5	)
Xerox Corporation	N/A	Call		436		October 2012		7.00		11		(19	)
	N/A	Call		1,137		October 2012		9.00		7		(2	)
									$	83	$	(105	)

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of September 30, 2012. See Note 3 to the Financial Statements for further information regarding fair value measurement.

	Level 1		Level 2		Level 3
Assets
Investments in Securities
Common Stocks	$	116,534	$	—	$	—
Short-Term Securities		—		6,310		—
Total	$	116,534	$	6,310	$	—
Liabilities
Written Options	$	105	$	—	$	—

The following acronyms are used throughout this schedule:

ADR = American Depositary Receipts

OTC = Over the Counter

REIT = Real Estate Investment Trust

See Accompanying Notes to Financial Statements.

118 SEMIANNUAL REPORT 2012

STATEMENTS OF ASSETS AND LIABILITIES

Ivy Funds AS OF SEPTEMBER 30, 2012 (UNAUDITED)

(In thousands, except per share amounts)	Ivy Bond Fund			Ivy Core Equity Fund			Ivy Cundill Global Value Fund			Ivy Dividend Opportunities Fund			Ivy European Opportunities Fund			Ivy Global Bond Fund		Ivy Global Equity Income Fund
ASSETS
Investments in unaffiliated securities at market value+	$	598,332		$	379,066		$	214,643		$	352,238		$	205,473		$	234,101	$	37,537
Investments at Market Value		598,332			379,066			214,643			352,238			205,473			234,101		37,537
Cash		201			2			124			1			1			25		29
Restricted cash+		—			—			—			—			—			260		—
Investment securities sold receivable		21,995			2,893			19			804			9,335			1,255		186
Dividends and interest receivable		4,047			562			945			1,158			1,281			3,375		218
Capital shares sold receivable		1,420			1,258			111			323			155			852		248
Receivable from affiliates		5			4			41			8			—			295		28
Unrealized appreciation on forward foreign currency contracts		—			—			6			—			—			70		—
Variation margin receivable		15			—			—			—			—			—		—
Prepaid and other assets		50			51			44			48			42			39		73
Total Assets		626,065			383,836			215,933			354,580			216,287			240,272		38,319
LIABILITIES
Investment securities purchased payable		52,305			2,870			168			2,187			718			625		1,849
Capital shares redeemed payable		1,077			652			561			649			194			870		2
Distributions payable		110			—			—			—			—			—		—
Trustees and Chief Compliance Officer fees payable		53			78			90			19			57			5		—	*
Distribution and service fees payable		15			13			6			10			5			7		1
Shareholder servicing payable		160			106			143			118			121			90		4
Investment management fee payable		24			22			18			20			16			12		2
Accounting services fee payable		14			11			8			9			8			8		2
Unrealized depreciation on forward foreign currency contracts		—			—			313			—			—			17		—
Written options at market value+		—			—			—			—			10			—		—
Other liabilities		99			26			40			25			44			35		9
Total Liabilities		53,857			3,778			1,347			3,037			1,173			1,669		1,869
Total Net Assets	$	572,208		$	380,058		$	214,586		$	351,543		$	215,114		$	238,603	$	36,450
NET ASSETS
Capital paid in (shares authorized – unlimited)	$	581,088		$	297,808		$	270,778		$	304,517		$	364,621		$	233,205	$	33,367
Undistributed (distributions in excess of) net investment income		(1,553	)		(232	)		506			1,414			1,456			1,427		186
Accumulated net realized gain (loss)		(20,855	)		(2,216	)		(53,176	)		(34,851	)		(190,417	)		596		352
Net unrealized appreciation (depreciation)		13,528			84,698			(3,522	)		80,463			39,454			3,375		2,545
Total Net Assets	$	572,208		$	380,058		$	214,586		$	351,543		$	215,114		$	238,603	$	36,450
CAPITAL SHARES OUTSTANDING:
Class A		46,305			19,285			14,291			16,652			7,118			15,619		1,598
Class B		1,081			524			582			894			199			592		103
Class C		4,054			9,665			1,689			2,601			420			3,848		321
Class E		396			299			48			217			3			N/A		N/A
Class I		729			2,953			302			846			1,543			2,631		934
Class Y		509			1,651			845			815			65			529		302
NET ASSET VALUE PER SHARE:
Class A		$10.78			$11.25			$12.15			$15.98			$23.05			$10.28		$11.19
Class B		$10.78			$10.00			$11.49			$15.81			$21.65			$10.27		$11.18
Class C		$10.78			$10.22			$11.61			$15.86			$21.95			$10.27		$11.18
Class E		$10.78			$11.23			$12.22			$15.94			$23.24			N/A		N/A
Class I		$10.78			$12.18			$12.36			$16.01			$23.28			$10.28		$11.19
Class Y		$10.78			$11.91			$12.28			$16.00			$23.25			$10.28		$11.19
+COST
Investments in unaffiliated securities at cost	$	584,789		$	294,367		$	217,797		$	271,775		$	166,129		$	230,782	$	34,993
Written options premiums received at cost		—			—			—			—			180			—		—

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 119

STATEMENTS OF ASSETS AND LIABILITIES

Ivy Funds AS OF SEPTEMBER 30, 2012 (UNAUDITED)

(In thousands, except per share amounts)	Ivy Global Income Allocation Fund			Ivy High Income Fund		Ivy International Core Equity Fund			Ivy International Growth Fund			Ivy Large Cap Growth Fund			Ivy Limited- Term Bond Fund			Ivy Managed European/Pacific Fund
ASSETS
Investments in unaffiliated securities at market value+	$	296,191		$	6,624,601	$	1,489,011		$	229,531		$	1,379,003		$	1,594,875		$	301
Investments in affiliated securities at market value+		—			—		—			—			—			—			79,692
Investments at Market Value		296,191			6,624,601		1,489,011			229,531			1,379,003			1,594,875			79,993
Cash		1,081			18,942		12			7			1			483			1
Cash denominated in foreign currencies at market value+		—			65		5,053			—			—			—			—
Restricted cash+		—			—		—			4,136			—			—			—
Investment securities sold receivable		4,107			35,413		20,525			5			70,015			—			40
Dividends and interest receivable		3,624			102,758		8,058			791			1,214			11,165			—	*
Capital shares sold receivable		680			55,047		3,653			182			1,450			5,364			86
Receivable from affiliates		154			24		8			—			396			4			—
Unrealized appreciation on forward foreign currency contracts		—			6,181		503			498			—			—			—
Prepaid and other assets		45			4,334		97			42			83			104			37
Total Assets		305,882			6,847,365		1,526,920			235,192			1,452,162			1,611,995			80,157
LIABILITIES
Investment securities purchased payable		573			274,376		6,456			—			—			12,459			25
Capital shares redeemed payable		408			9,280		2,337			242			59,476			3,537			81
Distributions payable		—			3,909		—			—			—			194			—
Trustees and Chief Compliance Officer fees payable		29			60		40			67			87			43			3
Distribution and service fees payable		7			179		27			5			31			47			2
Shareholder servicing payable		122			1,281		509			86			569			325			20
Investment management fee payable		18			279		105			16			81			58			—	*
Accounting services fee payable		9			22		22			8			23			22			2
Unrealized depreciation on forward foreign currency contracts		—			850		376			—			—			—			—
Unrealized depreciation on swap agreements		—			—		—			77			—			—			—
Other liabilities		82			255		405			45			67			226			13
Total Liabilities		1,248			290,491		10,277			546			60,334			16,911			146
Total Net Assets	$	304,634		$	6,556,874	$	1,516,643		$	234,646		$	1,391,828		$	1,595,084		$	80,011
NET ASSETS
Capital paid in (shares authorized — unlimited)	$	337,962		$	6,260,099	$	1,551,943		$	238,748		$	1,173,070		$	1,545,021		$	99,038
Undistributed (distributions in excess of) net investment income		2,550			220		21,496			1,882			(1,378	)		(1,382	)		(292	)
Accumulated net realized gain (loss)		(53,721	)		55,528		(123,190	)		(25,654	)		(140,166	)		3,319			(29,429	)
Net unrealized appreciation		17,843			241,027		66,394			19,670			360,302			48,126			10,694
Total Net Assets	$	304,634		$	6,556,874	$	1,516,643		$	234,646		$	1,391,828		$	1,595,084		$	80,011
CAPITAL SHARES OUTSTANDING:
Class A		17,343			307,581		49,584			4,646			65,854			100,482			10,003
Class B		469			14,737		992			93			1,036			2,379			171
Class C		1,396			144,962		7,476			768			5,619			21,127			182
Class E		136			745		198			3			351			310			24
Class I		1,716			224,995		34,947			1,222			11,541			11,363			45
Class R		N/A			N/A		N/A			N/A			1,910			N/A			N/A
Class Y		331			76,521		9,412			345			8,040			5,990			100
NET ASSET VALUE PER SHARE:
Class A		$14.25			$8.52		$14.85			$33.53			$14.79			$11.26			$7.61
Class B		$14.03			$8.52		$13.43			$29.81			$12.83			$11.26			$7.39
Class C		$14.10			$8.52		$13.46			$29.79			$13.41			$11.26			$7.43
Class E		$14.25			$8.52		$14.93			$33.64			$14.78			$11.26			$7.64
Class I		$14.35			$8.52		$14.95			$33.99			$15.20			$11.26			$7.71
Class R		N/A			N/A		N/A			N/A			$14.55			N/A			N/A
Class Y		$14.30			$8.52		$14.95			$33.64			$15.02			$11.26			$7.64
+COST
Investments in unaffiliated securities at cost	$	278,333		$	6,389,021	$	1,422,632		$	210,395		$	1,018,701		$	1,546,749		$	301
Investments in affiliated securities at cost		—			—		—			—			—			—			68,998
Cash denominated in foreign currencies at cost		—			65		5,053			—			—			—			—

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

120 SEMIANNUAL REPORT 2012

STATEMENTS OF ASSETS AND LIABILITIES

Ivy Funds AS OF SEPTEMBER 30, 2012 (UNAUDITED)

(In thousands, except per share amounts)	Ivy Managed International Opportunities Fund			Ivy Micro Cap Growth Fund			Ivy Mid Cap Growth Fund			Ivy Money Market Fund			Ivy Municipal Bond Fund			Ivy Municipal High Income Fund			Ivy Pacific Opportunities Fund
ASSETS
Investments in unaffiliated securities at market value+	$	188		$	77,848		$	2,598,137		$	195,998		$	154,160		$	1,463,132		$	647,610
Investments in affiliated securities at market value+		190,051			—			—			—			—			—			—
Investments at Market Value		190,239			77,848			2,598,137			195,998			154,160			1,463,132			647,610
Cash		1			1			1,642			3			1			1			—
Cash denominated in foreign currencies at market value+		—			—			—			—			—			—			4,600
Restricted cash+		—			—			—			—			—			—			4,938
Investment securities sold receivable		290			1,205			1,162			—			1,060			12,045			17,506
Dividends and interest receivable		—	*		55			1,116			634			1,757			21,717			983
Capital shares sold receivable		105			104			9,934			1,118			561			9,406			514
Receivable from affiliates		—			—			6			590			—	*		14			—
Prepaid and other assets		41			27			7,460			53			44			212			51
Total Assets		190,676			79,240			2,619,457			198,396			157,583			1,506,527			676,202
LIABILITIES
Investment securities purchased payable		10			274			1,538			—			3,000			18,986			2,441
Capital shares redeemed payable		320			220			4,753			938			258			3,616			942
Distributions payable		—			—			—			1			32			469			—
Trustees and Chief Compliance Officer fees payable		6			1			38			19			9			7			47
Overdraft due to custodian		—			—			—			—			—			—			1
Distribution and service fees payable		4			2			45			4			5			36			12
Shareholder servicing payable		38			34			695			58			21			186			293
Investment management fee payable		1			6			177			7			7			58			53
Accounting services fee payable		4			4			23			6			6			26			14
Unrealized depreciation on swap agreements		—			—			—			—			—			—			50
Written options at market value+		—			—			10,299			—			—			—			187
Other liabilities		18			15			106			19			14			40			207
Total Liabilities		401			556			17,674			1,052			3,352			23,424			4,247
Total Net Assets	$	190,275		$	78,684		$	2,601,783		$	197,344		$	154,231		$	1,483,103		$	671,955
NET ASSETS
Capital paid in (shares authorized – unlimited)	$	210,967		$	64,184		$	2,400,190		$	197,382		$	141,714		$	1,397,709		$	683,668
Undistributed (distributions in excess of) net investment income		260			(1,070	)		(9,401	)		—			30			1,155			3,116
Accumulated net realized loss		(39,196	)		(1,434	)		(17,510	)		(38	)		(537	)		(289	)		(75,524	)
Net unrealized appreciation		18,244			17,004			228,504			—			13,024			84,528			60,695
Total Net Assets	$	190,275		$	78,684		$	2,601,783		$	197,344		$	154,231		$	1,483,103		$	671,955
CAPITAL SHARES OUTSTANDING:
Class A		21,118			3,682			52,054			147,857			9,655			94,289			36,227
Class B		284			86			1,181			8,677			305			3,106			748
Class C		586			221			9,160			36,222			2,519			52,984			1,423
Class E		22			N/A			197			4,626			N/A			N/A			8
Class I		47			196			52,707			N/A			100			117,717			10,860
Class R		N/A			N/A			3,451			N/A			N/A			N/A			N/A
Class Y		76			30			23,181			N/A			58			6,011			426
NET ASSET VALUE PER SHARE:
Class A		$8.60			$18.69			$18.06			$1.00			$12.20			$5.41			$13.52
Class B		$8.45			$18.25			$15.86			$1.00			$12.20			$5.41			$11.46
Class C		$8.48			$18.39			$16.54			$1.00			$12.20			$5.41			$11.91
Class E		$8.61			N/A			$17.80			$1.00			N/A			N/A			$13.68
Class I		$8.65			$18.83			$18.87			N/A			$12.20			$5.41			$13.87
Class R		N/A			N/A			$17.91			N/A			N/A			N/A			N/A
Class Y		$8.60			$18.72			$18.60			N/A			$12.20			$5.41			$13.77
+COST
Investments in unaffiliated securities at cost	$	188		$	60,844		$	2,371,223		$	195,998		$	141,136		$	1,378,604		$	587,045
Investments in affiliated securities at cost		171,807			—			—			—			—			—			—
Cash denominated in foreign currencies at cost		—			—			—			—			—			—			4,600
Written options premiums received at cost		—			—			11,889			—			—			—			231

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 121

STATEMENTS OF ASSETS AND LIABILITIES

Ivy Funds AS OF SEPTEMBER 30, 2012 (UNAUDITED)

(In thousands, except per share amounts)	Ivy Small Cap Growth Fund			Ivy Small Cap Value Fund			Ivy Tax- Managed Equity Fund			Ivy Value Fund
ASSETS
Investments in unaffiliated securities at market value+	$	779,401		$	258,787		$	21,177		$	122,844
Investments at Market Value		779,401			258,787			21,177			122,844
Cash		1			1			1			982
Investment securities sold receivable		5,604			747			—			1,052
Dividends and interest receivable		65			107			16			161
Capital shares sold receivable		1,403			306			15			127
Receivable from affiliates		7			—			—			—
Prepaid and other assets		66			40			33			31
Total Assets		786,547			259,988			21,242			125,197
LIABILITIES
Investment securities purchased payable		1,165			1,090			—			1,017
Capital shares redeemed payable		1,107			334			25			286
Trustees and Chief Compliance Officer fees payable		136			24			—	*		13
Distribution and service fees payable		26			6			1			3
Shareholder servicing payable		250			141			5			59
Investment management fee payable		55			18			—			7
Accounting services fee payable		18			8			1			6
Written options at market value+		—			—			—			105
Other liabilities		43			38			9			18
Total Liabilities		2,800			1,659			41			1,514
Total Net Assets	$	783,747		$	258,329		$	21,201		$	123,683
NET ASSETS
Capital paid in (shares authorized – unlimited)	$	593,390		$	224,793		$	17,795		$	108,577
Undistributed (distributions in excess of) net investment income		(7,542	)		(189	)		(15	)		263
Accumulated net realized gain (loss)		18,495			6,926			(306	)		(2,076	)
Net unrealized appreciation		179,404			26,799			3,727			16,919
Total Net Assets	$	783,747		$	258,329		$	21,201		$	123,683
CAPITAL SHARES OUTSTANDING:
Class A		16,361			13,251			1,361			6,184
Class B		768			272			54			198
Class C		13,094			995			71			441
Class E		185			7			N/A			6
Class I		7,332			1,019			71			116
Class R		1,204			N/A			N/A			N/A
Class Y		12,224			1,299			66			90
NET ASSET VALUE PER SHARE:
Class A		$14.87			$15.35			$13.08			$17.63
Class B		$12.82			$13.75			$12.82			$16.77
Class C		$13.40			$14.23			$12.81			$17.20
Class E		$14.82			$15.68			N/A			$17.68
Class I		$17.43			$16.06			$13.15			$17.67
Class R		$14.82			N/A			N/A			N/A
Class Y		$16.92			$15.80			$13.10			$17.66
+COST
Investments in unaffiliated securities at cost	$	599,997		$	231,988		$	17,450		$	105,903
Written options premiums received at cost		—			—			—			83

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

122 SEMIANNUAL REPORT 2012

STATEMENTS OF OPERATIONS

Ivy Funds FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2012 (UNAUDITED)

(In thousands)	Ivy Bond Fund			Ivy Core Equity Fund			Ivy Cundill Global Value Fund			Ivy Dividend Opportunities Fund			Ivy European Opportunities Fund			Ivy Global Bond Fund			Ivy  Global Equity Income Fund(1)
INVESTMENT INCOME
Dividends from unaffiliated securities	$	6		$	2,696		$	3,211		$	5,057		$	3,754		$	27		$	568
Foreign dividend withholding tax		—			(27	)		(287	)		(23	)		(488	)		(5	)		(36	)
Interest and amortization from unaffiliated securities		9,234			9			23			16			24			6,010			2
Total Investment Income		9,240			2,678			2,947			5,050			3,290			6,032			534
EXPENSES
Investment management fee		1,410			1,232			1,093			1,199			1,010			748			67
Distribution and service fees:
Class A		585			252			218			322			200			199			10
Class B		55			25			39			70			23			30			4
Class C		209			475			105			205			47			201			11
Class E		5			3			1			4			—	*		N/A			N/A
Class Y		9			22			14			17			2			7			3
Shareholder servicing:
Class A		501			236			466			309			429			200			6
Class B		25			12			32			24			19			12			—	*
Class C		37			116			30			38			17			32			—	*
Class E		11			8			3			13			—	*		N/A			N/A
Class I		5			24			3			11			37			23			5
Class Y		6			14			10			10			1			5			2
Registration fees		61			44			40			40			38			36			10
Custodian fees		34			8			21			6			24			18			5
Trustees and Chief Compliance Officer fees		9			7			6			5			5			3			—	*
Accounting services fee		76			57			47			53			47			47			8
Professional fees		36			18			25			17			25			33			2
Other		37			20			20			16			21			21			18
Total Expenses		3,111			2,573			2,173			2,359			1,945			1,615			151
Less:
Expenses in excess of limit		(5	)		(4	)		(41	)		(8	)		—			(295	)		(28	)
Total Net Expenses		3,106			2,569			2,132			2,351			1,945			1,320			123
Net Investment Income		6,134			109			815			2,699			1,345			4,712			411
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments in unaffiliated securities		7,220			6,355			(2,378	)		7,168			(654	)		628			352
Futures contracts		(979	)		—			—			—			—			—			—
Forward foreign currency contracts		—			—			(13	)		—			—			(12	)		—
Foreign currency exchange transactions		—			—			(33	)		—			(20	)		3			14
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated securities		12,937			4,856			(21,606	)		(2,394	)		735			255			2,544
Futures contracts		(625	)		—			—			—			—			—			—
Written options		—			—			—			—			169			—			—
Forward foreign currency contracts		—			—			(1,780	)		—			—			419			—
Foreign currency exchange transactions		—			(1	)		(24	)		—			(38	)		2			1
Net Realized and Unrealized Gain (Loss)		18,553			11,210			(25,834	)		4,774			192			1,295			2,911
Net Increase (Decrease) in Net Assets Resulting from Operations	$	24,687		$	11,319		$	(25,019	)	$	7,473		$	1,537		$	6,007		$	3,322

* Not shown due to rounding.

(1) Period from June 4, 2012 (commencement of operations of the Fund) to Septermber 30, 2012.

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 123

STATEMENTS OF OPERATIONS

Ivy Funds FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2012 (UNAUDITED)

(In thousands)	Ivy Global Income Allocation Fund			Ivy High Income Fund			Ivy International Core Equity Fund			Ivy International Growth Fund			Ivy Large Cap Growth Fund			Ivy Limited- Term Bond Fund			Ivy Managed European/ Pacific Fund
INVESTMENT INCOME
Dividends from unaffiliated securities	$	8,313		$	947		$	30,567		$	3,406		$	7,797		$	—		$	—
Foreign dividend withholding tax		(797	)		—			(2,807	)		(277	)		—			—			—
Interest and amortization from unaffiliated securities		2,325			224,967			72			18			30			18,941			—	*
Foreign interest withholding tax		2			(13	)		—			(1	)		—			—			—
Total Investment Income		9,843			225,901			27,832			3,146			7,827			18,941			—	*
EXPENSES
Investment management fee		1,052			14,105			6,121			884			4,869			3,451			19
Distribution and service fees:
Class A		287			2,730			877			161			1,189			1,369			92
Class B		34			531			68			14			68			134			6
Class C		90			5,138			512			113			381			1,204			7
Class E		2			7			4			—	*		6			4			—	*
Class R		N/A			N/A			N/A			N/A			63			N/A			N/A
Class Y		6			683			179			14			147			81			1
Shareholder servicing:
Class A		411			1,624			1,058			210			1,094			794			45
Class B		19			68			29			6			29			25			2
Class C		21			461			95			47			73			135			1
Class E		7			17			13			—	*		16			4			—	*
Class I		29			1,193			378			20			182			90			—	*
Class R		N/A			N/A			N/A			N/A			32			N/A			N/A
Class Y		4			432			114			9			90			51			—	*
Registration fees		48			157			76			39			56			85			38
Custodian fees		68			79			182			26			20			25			1
Trustees and Chief Compliance Officer fees		5			72			22			5			23			22			1
Accounting services fee		51			134			134			43			136			134			13
Professional fees		31			64			32			25			27			27			11
Other		19			339			104			15			92			78			6
Total Expenses		2,184			27,834			9,998			1,631			8,593			7,713			243
Less:
Expenses in excess of limit		(154	)		(24	)		(8	)		—			(396	)		(4	)		—
Total Net Expenses		2,030			27,810			9,990			1,631			8,197			7,709			243
Net Investment Income (Loss)		7,813			198,091			17,842			1,515			(370	)		11,232			(243	)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments in unaffiliated securities		(14,668	)		38,234			(82,906	)		1,039			48,983			3,850			—
Investments in affiliated securities		—			—			—			—			—			—			(1,394	)
Swap agreements		—			—			—			266			—			—			—
Forward foreign currency contracts		1,148			2,160			3,570			212			—			—			—
Foreign currency exchange transactions		(62	)		(257	)		154			(12	)		—			—			—
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated securities		9,962			101,500			33,334			(1,495	)		(82,680	)		11,269			—	*
Investments in affiliated securities		—			—			—			—			—			—			8
Swap agreements		—			—			—			(41	)		—			—			—
Forward foreign currency contracts		(2,189	)		7,036			(10,520	)		(833	)		—			—			—
Foreign currency exchange transactions		11			171			(69	)		(4	)		—			—			—
Net Realized and Unrealized Gain (Loss)		(5,798	)		148,844			(56,437	)		(868	)		(33,697	)		15,119			(1,386	)
Net Increase (Decrease) in Net Assets Resulting from Operations	$	2,015		$	346,935		$	(38,595	)	$	647		$	(34,067	)	$	26,351		$	(1,629	)

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

124 SEMIANNUAL REPORT 2012

STATEMENTS OF OPERATIONS

Ivy Funds FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2012 (UNAUDITED)

(In thousands)	Ivy Managed International Opportunities Fund			Ivy Micro Cap Growth Fund			Ivy Mid Cap Growth Fund			Ivy Money Market Fund			Ivy Municipal Bond Fund			Ivy Municipal High Income Fund			Ivy Pacific Opportunities Fund
INVESTMENT INCOME
Dividends from unaffiliated securities	$	—		$	96		$	8,332		$	—		$	—		$	—		$	11,368
Dividends from affiliated securities		732			—			—			—			—			—			—
Foreign dividend withholding tax		—			—			—	*		—			—			—			(878	)
Interest and amortization from unaffiliated securities		—	*		3			105			374			2,849			32,197			73
Foreign interest withholding tax		—			—			—			—			—			—			(3	)
Total Investment Income		732			99			8,437			374			2,849			32,197			10,560
EXPENSES
Investment management fee		46			364			9,347			419			373			3,205			3,088
Distribution and service fees:
Class A		221			83			948			—			135			570			594
Class B		12			7			88			43			18			73			45
Class C		25			20			705			199			145			1,227			88
Class E		—	*		N/A			4			—			N/A			N/A			—	*
Class R		N/A			N/A			137			N/A			N/A			N/A			N/A
Class Y		1			1			519			N/A			1			37			7
Shareholder servicing:
Class A		85			115			816			116			53			138			1,022
Class B		3			5			27			7			1			7			39
Class C		3			6			140			25			14			55			40
Class E		—	*		N/A			13			5			N/A			N/A			—	*
Class I		—	*		3			711			N/A			1			419			100
Class R		N/A			N/A			72			N/A			N/A			N/A			N/A
Class Y		—	*		1			328			N/A			—	*		23			5
Registration fees		40			34			90			47			37			84			50
Custodian fees		1			4			33			6			5			21			214
Trustees and Chief Compliance Officer fees		3			1			32			3			2			17			11
Accounting services fee		22			24			136			42			34			136			86
Professional fees		11			14			28			17			22			53			41
Other		13			4			189			13			8			72			43
Total Expenses		486			686			14,363			942			849			6,137			5,473
Less:
Expenses in excess of limit		—			—			(6	)		(589	)		—	*		(114	)		—
Total Net Expenses		486			686			14,357			353			849			6,023			5,473
Net Investment Income (Loss)		246			(587	)		(5,920	)		21			2,000			26,174			5,087
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments in unaffiliated securities		—			1,492			(22,468	)		1			(11	)		417			(57,966	)
Investments in affiliated securities		(5,515	)		—			—			—			—			—			—
Written options		—			—			(7,734	)		—			—			—			302
Swap agreements		—			—			—			—			—			—			481
Foreign currency exchange transactions		—			—			(8	)		—			—			—			(395	)
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated securities		—	*		(3,401	)		(2,606	)		—			3,761			40,262			31,606
Investments in affiliated securities		3,001			—			—			—			—			—			—
Written options		—			—			1,661			—			—			—			13
Swap agreements		—			—			—			—			—			—			(639	)
Foreign currency exchange transactions		—			—			—			—			—			—			123
Net Realized and Unrealized Gain (Loss)		(2,514	)		(1,909	)		(31,155	)		1			3,750			40,679			(26,475	)
Net Increase (Decrease) in Net Assets Resulting from Operations	$	(2,268	)	$	(2,496	)	$	(37,075	)	$	22		$	5,750		$	66,853		$	(21,388	)
*Notshown due to rounding.

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 125

STATEMENTS OF OPERATIONS

Ivy Funds FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2012 (UNAUDITED)

(In thousands)	Ivy Small Cap Growth Fund			Ivy Small Cap Value Fund			Ivy Tax- Managed Equity Fund			Ivy Value Fund
INVESTMENT INCOME
Dividends from unaffiliated securities	$	835		$	1,558		$	101		$	1,170
Foreign dividend withholding tax		—			—			—	*		(7	)
Interest and amortization from unaffiliated securities		17			24			1			4
Total Investment Income		852			1,582			102			1,167
EXPENSES
Investment management fee		3,181			1,073			63			416
Distribution and service fees:
Class A		291			249			20			130
Class B		48			19			3			16
Class C		864			71			4			38
Class E		3			—	*		N/A			—	*
Class R		42			N/A			N/A			N/A
Class Y		246			25			1			2
Shareholder servicing:
Class A		394			458			18			176
Class B		27			16			—	*		11
Class C		189			29			1			11
Class E		12			—	*		N/A			—	*
Class I		95			12			1			2
Class R		22			N/A			N/A			N/A
Class Y		153			19			1			1
Registration fees		53			47			32			40
Custodian fees		13			6			2			6
Trustees and Chief Compliance Officer fees		14			4			—	*		2
Accounting services fee		100			48			7			33
Professional fees		24			22			13			17
Other		37			29			2			11
Total Expenses		5,808			2,127			168			912
Less:
Expenses in excess of limit		(7	)		—			(63	)		—
Total Net Expenses		5,801			2,127			105			912
Net Investment Income (Loss)		(4,949	)		(545	)		(3	)		255
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments in unaffiliated securities		25,008			8,446			57			2,447
Written options		—			—			—			270
Swap agreements		189			—			—			—
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated securities		(2,094	)		(1,767	)		(71	)		(1,838	)
Written options		—			—			—			3
Swap agreements		(412	)		—			—			—
Net Realized and Unrealized Gain (Loss)		22,691			6,679			(14	)		882
Net Increase (Decrease) in Net Assets Resulting from Operations	$	17,742		$	6,134		$	(17	)	$	1,137

* Not shown due to rounding.

See Accompanying Notes to Financial Statements.

126 SEMIANNUAL REPORT 2012

STATEMENTS OF CHANGES IN NET ASSETS

Ivy Funds

	Ivy Bond Fund						Ivy Core Equity Fund						Ivy Cundill Global Value Fund
(In thousands)	Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)	$	6,134		$	6,984		$	109		$	(233	)	$	815		$	297
Net realized gain (loss) on investments		6,241			7,402			6,355			(8,275	)		(2,424	)		26,341
Net change in unrealized appreciation (depreciation)		12,312			13,441			4,855			30,002			(23,410	)		(44,049	)
Net Increase (Decrease) in Net Assets Resulting from Operations		24,687			27,827			11,319			21,494			(25,019	)		(17,411	)
Distributions to Shareholders From:
Net investment income:
Class A		(6,849	)		(12,418	)		—			—			—			(131	)
Class B		(104	)		(203	)		—			—			—			—
Class C		(460	)		(840	)		—			—			—			—
Class E		(61	)		(117	)		—			—			—			(1	)
Class I		(106	)		(108	)		—			—			—			(40	)
Class Y		(107	)		(239	)		—			—			—			(112	)
Advisor Class		N/A			N/A			N/A			N/A			N/A			N/A
Net realized gains:
Class A		—			—			—			(6,156	)		—			—
Class B		—			—			—			(142	)		—			—
Class C		—			—			—			(3,047	)		—			—
Class E		—			—			—			(83	)		—			—
Class I		—			—			—			(993	)		—			—
Class Y		—			—			—			(587	)		—			—
Advisor Class		N/A			N/A			N/A			N/A			N/A			N/A
Total Distributions to Shareholders		(7,687	)		(13,925	)		—			(11,008	)		—			(284	)
Capital Share Transactions		52,322			108,996			19,438			71,255			(15,760	)		(55,855	)
Net Increase (Decrease) in Net Assets		69,322			122,898			30,757			81,741			(40,779	)		(73,550	)
Net Assets, Beginning of Period		502,886			379,988			349,301			267,560			255,365			328,915
Net Assets, End of Period	$	572,208		$	502,886		$	380,058		$	349,301		$	214,586		$	255,365
Undistributed (distributions in excess of) net investment income	$	(1,553	)	$	—		$	(232	)	$	(341	)	$	506		$	(276	)

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 127

STATEMENTS OF CHANGES IN NET ASSETS

Ivy Funds

	Ivy Dividend  Opportunities Fund						Ivy European Opportunities Fund						Ivy Global Bond Fund
(In thousands)	Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	2,699		$	3,573		$	1,345		$	890		$	4,712		$	8,677
Net realized gain (loss) on investments		7,168			(3,514	)		(674	)		(14,694	)		619			(171	)
Net change in unrealized appreciation (depreciation)		(2,394	)		(6,070	)		866			(2,652	)		676			(2,327	)
Net Increase (Decrease) in Net Assets Resulting from Operations		7,473			(6,011	)		1,537			(16,456	)		6,007			6,179
Distributions to Shareholders From:
Net investment income:
Class A		(1,168	)		(2,880	)		—			(508	)		(2,833	)		(5,780	)
Class B		(9	)		(47	)		—			—			(84	)		(166	)
Class C		(50	)		(214	)		—			—			(568	)		(1,286	)
Class E		(13	)		(35	)		—			(1	)		N/A			N/A
Class I		(81	)		(201	)		—			(409	)		(550	)		(1,122	)
Class Y		(67	)		(190	)		—			(10	)		(105	)		(400	)
Advisor Class		N/A			N/A			N/A			N/A			N/A			N/A
Net realized gains:
Class A		—			—			—			—			—			(664	)
Class B		—			—			—			—			—			(23	)
Class C		—			—			—			—			—			(174	)
Class E		—			—			—			—			N/A			N/A
Class I		—			—			—			—			—			(119	)
Class Y		—			—			—			—			—			(44	)
Advisor Class		N/A			N/A			N/A			N/A			N/A			N/A
Total Distributions to Shareholders		(1,388	)		(3,567	)		—			(928	)		(4,140	)		(9,778	)
Capital Share Transactions		(5,179	)		14,125			(24,610	)		(9,505	)		(2,789	)		11,628
Net Increase (Decrease) in Net Assets		906			4,547			(23,073	)		(26,889	)		(922	)		8,029
Net Assets, Beginning of Period		350,637			346,090			238,187			265,076			239,525			231,496
Net Assets, End of Period	$	351,543		$	350,637		$	215,114		$	238,187		$	238,603		$	239,525
Undistributed net investment income	$	1,414		$	103		$	1,456		$	131		$	1,427		$	679

See Accompanying Notes to Financial Statements.

128 SEMIANNUAL REPORT 2012

STATEMENTS OF CHANGES IN NET ASSETS

Ivy Funds

	Ivy Global Equity Income Fund			Ivy Global Income Allocation Fund						Ivy High Income Fund
(In thousands)	Period from 6-4-12 to 9-30-12 (Unaudited)			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	411		$	7,813		$	11,298		$	198,091		$	217,356
Net realized gain (loss) on investments		366			(13,582	)		4,155			40,137			39,483
Net change in unrealized appreciation (depreciation)		2,545			7,784			(14,337	)		108,707			28,546
Net Increase in Net Assets Resulting from Operations		3,322			2,015			1,116			346,935			285,385
Distributions to Shareholders From:
Net investment income:
Class A		(105	)		(5,327	)		(9,592	)		(79,922	)		(99,008	)
Class B		(6	)		(120	)		(248	)		(3,497	)		(4,494	)
Class C		(20	)		(357	)		(752	)		(34,055	)		(38,936	)
Class E		N/A			(43	)		(89	)		(195	)		(322	)
Class I		(83	)		(850	)		(2,203	)		(57,940	)		(52,814	)
Class Y		(25	)		(145	)		(199	)		(19,990	)		(21,310	)
Net realized gains:
Class A		—			—			—			—			(29,118	)
Class B		—			—			—			—			(1,375	)
Class C		—			—			—			—			(11,800	)
Class E		N/A			—			—			—			(93	)
Class I		—			—			—			—			(14,130	)
Class Y		—			—			—			—			(6,001	)
Total Distributions to Shareholders		(239	)		(6,842	)		(13,083	)		(195,599	)		(279,401	)
Capital Share Transactions		33,367			6,098			21,498			1,894,908			2,431,279
Net Increase in Net Assets		36,450			1,271			9,531			2,046,244			2,437,263
Net Assets, Beginning of Period		—			303,363			293,832			4,510,630			2,073,367
Net Assets, End of Period	$	36,450		$	304,634		$	303,363		$	6,556,874		$	4,510,630
Undistributed net investment income	$	186		$	2,550		$	1,738		$	220		$	—

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 129

STATEMENTS OF CHANGES IN NET ASSETS

Ivy Funds

	Ivy International Core Equity Fund						Ivy International Growth Fund						Ivy Large Cap Growth Fund
(In thousands)	Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)	$	17,842		$	23,257		$	1,515		$	1,442		$	(370	)	$	(927	)
Net realized gain (loss) on investments		(79,182	)		(26,649	)		1,505			5,875			48,983			4,635
Net change in unrealized appreciation (depreciation)		22,745			(91,339	)		(2,373	)		(5,861	)		(82,680	)		164,728
Net Increase (Decrease) in Net Assets Resulting from Operations		(38,595	)		(94,731	)		647			1,456			(34,067	)		168,436
Distributions to Shareholders From:
Net investment income:
Class A		—			(11,555	)		—			—			—			—
Class B		—			(186	)		—			—			—			—
Class C		—			(1,589	)		—			—			—			—
Class E		—			(49	)		—			—			—			—
Class I		—			(8,073	)		—			—			—			—
Class R		N/A			N/A			N/A			N/A			—			—
Class Y		—			(2,059	)		—			—			—			—
Net realized gains:
Class A		—			(9,413	)		—			—			—			—
Class B		—			(242	)		—			—			—			—
Class C		—			(1,814	)		—			—			—			—
Class E		—			(41	)		—			—			—			—
Class I		—			(5,315	)		—			—			—			—
Class R		N/A			N/A			N/A			N/A			—			—
Class Y		—			(1,550	)		—			—			—			—
Total Distributions to Shareholders		—			(41,886	)		—			—			—			—
Capital Share Transactions		37,406			400,092			20,036			3,487			(57,362	)		366,302
Net Increase (Decrease) in Net Assets		(1,189	)		263,475			20,683			4,943			(91,429	)		534,738
Net Assets, Beginning of Period		1,517,832			1,254,357			213,963			209,020			1,483,257			948,519
Net Assets, End of Period	$	1,516,643		$	1,517,832		$	234,646		$	213,963		$	1,391,828		$	1,483,257
Undistributed (distributions in excess of) net investment income	$	21,496		$	3,500		$	1,882		$	379		$	(1,378	)	$	(1,008	)

See Accompanying Notes to Financial Statements.

130 SEMIANNUAL REPORT 2012

STATEMENTS OF CHANGES IN NET ASSETS

Ivy Funds

	Ivy Limited-Term Bond Fund						Ivy Managed European/Pacific Fund						Ivy Managed International Opportunities Fund
(In thousands)	Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)	$	11,232		$	22,745		$	(243	)	$	463		$	246		$	2,918
Net realized gain (loss) on investments		3,850			9,425			(1,394	)		(727	)		(5,515	)		(452	)
Net change in unrealized appreciation (depreciation)		11,269			11,762			8			(10,824	)		3,001			(17,383	)
Net Increase (Decrease) in Net Assets Resulting from Operations		26,351			43,932			(1,629	)		(11,088	)		(2,268	)		(14,917	)
Distributions to Shareholders From:
Net investment income:
Class A		(9,525	)		(19,288	)		—			(498	)		—			(2,798	)
Class B		(124	)		(315	)		—			—	*		—			(27	)
Class C		(1,230	)		(3,042	)		—			(2	)		—			(51	)
Class E		(25	)		(34	)		—			(1	)		—			(3	)
Class I		(1,149	)		(1,984	)		—			(3	)		—			(8	)
Class Y		(561	)		(1,106	)		—			(6	)		—			(13	)
Net realized gains:
Class A		—			(4,380	)		—			—			—			—
Class B		—			(117	)		—			—			—			—
Class C		—			(1,079	)		—			—			—			—
Class E		—			(7	)		—			—			—			—
Class I		—			(415	)		—			—			—			—
Class Y		—			(243	)		—			—			—			—
Total Distributions to Shareholders		(12,614	)		(32,010	)		—			(510	)		—			(2,900	)
Capital Share Transactions		111,182			317,744			(673	)		615			(2,124	)		14,954
Net Increase (Decrease) in Net Assets		124,919			329,666			(2,302	)		(10,983	)		(4,392	)		(2,863	)
Net Assets, Beginning of Period		1,470,165			1,140,499			82,313			93,296			194,667			197,530
Net Assets, End of Period	$	1,595,084		$	1,470,165		$	80,011		$	82,313		$	190,275		$	194,667
Undistributed (distributions in excess of) net investment income	$	(1,382	)	$	—		$	(292	)	$	(49	)	$	260		$	14

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 131

STATEMENTS OF CHANGES IN NET ASSETS

Ivy Funds

	Ivy Micro Cap Growth Fund						Ivy Mid Cap Growth Fund						Ivy Money Market Fund
(In thousands)	Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)	$	(587	)	$	(1,318	)	$	(5,920	)	$	(8,461	)	$	21		$	48
Net realized gain (loss) on investments		1,492			(1,885	)		(30,210	)		37,587			1			8
Net change in unrealized appreciation (depreciation)		(3,401	)		5,185			(945	)		83,047			—			—
Net Increase (Decrease) in Net Assets Resulting from Operations		(2,496	)		1,982			(37,075	)		112,173			22			56
Distributions to Shareholders From:
Net investment income:
Class A		—			—			—			—			(16	)		(36	)
Class B		—			—			—			—			(1	)		(2	)
Class C		—			—			—			—			(4	)		(9	)
Class E		N/A			N/A			—			—			—	*		(1	)
Class I		—			—			—			—			N/A			N/A
Class R		N/A			N/A			—			—			N/A			N/A
Class Y		—			—			—			—			N/A			N/A
Net realized gains:
Class A		—			(4,742	)		—			(13,340	)		—			—
Class B		—			(78	)		—			(423	)		—			—
Class C		—			(241	)		—			(2,788	)		—			—
Class E		N/A			N/A			—			(79	)		—			—
Class I		—			(197	)		—			(12,754	)		N/A			N/A
Class R		N/A			N/A			—			(988	)		N/A			N/A
Class Y		—			(29	)		—			(8,563	)		N/A			N/A
Total Distributions to Shareholders		—			(5,287	)		—			(38,935	)		(21	)		(48	)
Capital Share Transactions		(190	)		(3,059	)		571,234			1,196,684			(26,574	)		22,509
Net Increase (Decrease) in Net Assets		(2,686	)		(6,364	)		534,159			1,269,922			(26,573	)		22,517
Net Assets, Beginning of Period		81,370			87,734			2,067,624			797,702			223,917			201,400
Net Assets, End of Period	$	78,684		$	81,370		$	2,601,783		$	2,067,624		$	197,344		$	223,917
Distributions in excess of net investment income	$	(1,070	)	$	(483	)	$	(9,401	)	$	(3,473	)	$	—		$	—

* Not shown due to rounding.

See Accompanying Notes to Financial Statements.

132 SEMIANNUAL REPORT 2012

STATEMENTS OF CHANGES IN NET ASSETS

Ivy Funds

	Ivy Municipal Bond Fund						Ivy Municipal High Income Fund						Ivy Pacific Opportunities Fund
(In thousands)	Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	2,000		$	3,641		$	26,174		$	29,801		$	5,087		$	681
Net realized gain (loss) on investments		(11	)		(21	)		417			15			(57,578	)		12,008
Net change in unrealized appreciation (depreciation)		3,761			8,223			40,262			57,017			31,103			(122,804	)
Net Increase (Decrease) in Net Assets Resulting from Operations		5,750			11,843			66,853			86,833			(21,388	)		(110,115	)
Distributions to Shareholders From:
Net investment income:
Class A		(1,602	)		(2,825	)		(9,270	)		(11,527	)		—			(1,988	)
Class B		(40	)		(74	)		(239	)		(272	)		—			—
Class C		(324	)		(676	)		(4,081	)		(4,696	)		—			—
Class E		N/A			N/A			N/A			N/A			—			(1	)
Class I		(18	)		(31	)		(11,524	)		(12,148	)		—			(1,777	)
Class Y		(10	)		(27	)		(604	)		(641	)		—			(55	)
Net realized gains:
Class A		—			—			—			—			—			(17,464	)
Class B		—			—			—			—			—			(477	)
Class C		—			—			—			—			—			(887	)
Class E		N/A			N/A			N/A			N/A			—			(4	)
Class I		—			—			—			—			—			(4,887	)
Class Y		—			—			—			—			—			(240	)
Total Distributions to Shareholders		(1,994	)		(3,633	)		(25,718	)		(29,284	)		—			(27,780	)
Capital Share Transactions		20,140			35,547			405,806			625,684			15,072			(784	)
Net Increase (Decrease) in Net Assets		23,896			43,757			446,941			683,233			(6,316	)		(138,679	)
Net Assets, Beginning of Period		130,335			86,578			1,036,162			352,929			678,271			816,950
Net Assets, End of Period	$	154,231		$	130,335		$	1,483,103		$	1,036,162		$	671,955		$	678,271
Undistributed (distributions in excess of) net investment income	$	30		$	24		$	1,155		$	699		$	3,116		$	(1,576	)

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 133

STATEMENTS OF CHANGES IN NET ASSETS

Ivy Funds

	Ivy Small Cap Growth Fund						Ivy Small Cap Value Fund						Ivy Tax-Managed Equity Fund
(In thousands)	Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12			Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss	$	(4,949	)	$	(9,523	)	$	(545	)	$	(60	)	$	(3	)	$	(43	)
Net realized gain (loss) on investments		25,197			17,226			8,446			(857	)		57			(315	)
Net change in unrealized appreciation (depreciation)		(2,506	)		(29,560	)		(1,767	)		(26,060	)		(71	)		1,882
Net Increase (Decrease) in Net Assets Resulting from Operations		17,742			(21,857	)		6,134			(26,977	)		(17	)		1,524
Distributions to Shareholders From:
Net investment income:
Class A		—			—			—			(192	)		—			—
Class B		—			—			—			—			—			—
Class C		—			—			—			—			—			—
Class E		—			—			—			(1	)		N/A			N/A
Class I		—			—			—			(58	)		—			—
Class R		—			—			N/A			N/A			N/A			N/A
Class Y		—			—			—			(76	)		—			—
Net realized gains:
Class A		—			(8,083	)		—			(19,215	)		—			—
Class B		—			(396	)		—			(488	)		—			—
Class C		—			(6,961	)		—			(1,628	)		—			—
Class E		—			(89	)		—			(10	)		N/A			N/A
Class I		—			(3,379	)		—			(840	)		—			—
Class R		—			(561	)		N/A			N/A			N/A			N/A
Class Y		—			(6,252	)		—			(1,963	)		—			—
Total Distributions to Shareholders		—			(25,721	)		—			(24,471	)		—			—
Capital Share Transactions		(12,025	)		44,439			(14,764	)		8,395			2,585			5,369
Net Increase (Decrease) in Net Assets		5,717			(3,139	)		(8,630	)		(43,053	)		2,568			6,893
Net Assets, Beginning of Period		778,030			781,169			266,959			310,012			18,633			11,740
Net Assets, End of Period	$	783,747		$	778,030		$	258,329		$	266,959		$	21,201		$	18,633
Undistributed (distributions in excess of) net investment income	$	(7,542	)	$	(2,593	)	$	(189	)	$	356		$	(15	)	$	(12	)

See Accompanying Notes to Financial Statements.

134 SEMIANNUAL REPORT 2012

STATEMENTS OF CHANGES IN NET ASSETS

Ivy Funds

	Ivy Value Fund
(In thousands)	Six months ended 9-30-12 (Unaudited)			Year ended 3-31-12
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	255		$	742
Net realized gain (loss) on investments		2,717			(1,361	)
Net change in unrealized appreciation (depreciation)		(1,835	)		1,325
Net Increase in Net Assets Resulting from Operations		1,137			706
Distributions to Shareholders From:
Net investment income:
Class A		(511	)		(697	)
Class B		—			—
Class C		(21	)		(8	)
Class E		(1	)		(1	)
Class I		(18	)		(53	)
Class Y		(9	)		(14	)
Net realized gains:
Class A		—			(1,012	)
Class B		—			(36	)
Class C		—			(85	)
Class E		—			(1	)
Class I		—			(34	)
Class Y		—			(11	)
Total Distributions to Shareholders		(560	)		(1,952	)
Capital Share Transactions		1,318			20,988
Net Increase in Net Assets		1,895			19,742
Net Assets, Beginning of Period		121,788			102,046
Net Assets, End of Period	$	123,683		$	121,788
Undistributed net investment income	$	263		$	568

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 135

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY BOND FUND

	Net Asset Value, Beginning of Period		Net Investment Income			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	10.44	$	0.13	(3)	$	0.37		$	0.50		$	(0.16	)	$	—		$	(0.16	)
Year ended 3-31-2012		10.10		0.17	(3)		0.51			0.68			(0.34	)		—			(0.34	)
Year ended 3-31-2011		9.82		0.29	(3)		0.40			0.69			(0.32	)		(0.09	)		(0.41	)
Year ended 3-31-2010		8.76		0.33	(3)		1.07			1.40			(0.34	)		—			(0.34	)
Year ended 3-31-2009		9.84		0.36			(1.06	)		(0.70	)		(0.38	)		—			(0.38	)
Year ended 3-31-2008		10.46		0.47			(0.62	)		(0.15	)		(0.47	)		—			(0.47	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		10.44		0.07	(3)		0.37			0.44			(0.10	)		—			(0.10	)
Year ended 3-31-2012		10.10		0.06	(3)		0.51			0.57			(0.23	)		—			(0.23	)
Year ended 3-31-2011		9.82		0.18	(3)		0.40			0.58			(0.21	)		(0.09	)		(0.30	)
Year ended 3-31-2010		8.76		0.22	(3)		1.07			1.29			(0.23	)		—			(0.23	)
Year ended 3-31-2009		9.84		0.24			(1.06	)		(0.82	)		(0.26	)		—			(0.26	)
Year ended 3-31-2008		10.46		0.36			(0.62	)		(0.26	)		(0.36	)		—			(0.36	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		10.44		0.09	(3)		0.37			0.46			(0.12	)		—			(0.12	)
Year ended 3-31-2012		10.10		0.09	(3)		0.51			0.60			(0.26	)		—			(0.26	)
Year ended 3-31-2011		9.82		0.21	(3)		0.40			0.61			(0.24	)		(0.09	)		(0.33	)
Year ended 3-31-2010		8.76		0.28	(3)		1.06			1.34			(0.28	)		—			(0.28	)
Year ended 3-31-2009		9.84		0.27	(3)		(1.05	)		(0.78	)		(0.30	)		—			(0.30	)
Year ended 3-31-2008		10.46		0.39			(0.62	)		(0.23	)		(0.39	)		—			(0.39	)
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		10.44		0.12	(3)		0.38			0.50			(0.16	)		—			(0.16	)
Year ended 3-31-2012		10.10		0.17	(3)		0.51			0.68			(0.34	)		—			(0.34	)
Year ended 3-31-2011		9.82		0.28	(3)		0.40			0.68			(0.31	)		(0.09	)		(0.40	)
Year ended 3-31-2010		8.76		0.34	(3)		1.07			1.41			(0.35	)		—			(0.35	)
Year ended 3-31-2009		9.84		0.34			(1.06	)		(0.72	)		(0.36	)		—			(0.36	)
Year ended 3-31-2008(5)		10.46		0.43	(3)		(0.62	)		(0.19	)		(0.43	)		—			(0.43	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		10.44		0.14	(3)		0.38			0.52			(0.18	)		—			(0.18	)
Year ended 3-31-2012		10.10		0.20	(3)		0.51			0.71			(0.37	)		—			(0.37	)
Year ended 3-31-2011		9.82		0.32	(3)		0.40			0.72			(0.35	)		(0.09	)		(0.44	)
Year ended 3-31-2010		8.76		0.38	(3)		1.06			1.44			(0.38	)		—			(0.38	)
Year ended 3-31-2009		9.84		0.39			(1.06	)		(0.67	)		(0.41	)		—			(0.41	)
Year ended 3-31-2008(5)		10.46		0.50	(3)		(0.62	)		(0.12	)		(0.50	)		—			(0.50	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		10.44		0.13	(3)		0.37			0.50			(0.16	)		—			(0.16	)
Year ended 3-31-2012		10.10		0.18	(3)		0.51			0.69			(0.35	)		—			(0.35	)
Year ended 3-31-2011		9.82		0.30	(3)		0.40			0.70			(0.33	)		(0.09	)		(0.42	)
Year ended 3-31-2010		8.76		0.35	(3)		1.07			1.42			(0.36	)		—			(0.36	)
Year ended 3-31-2009		9.84		0.33	(3)		(1.03	)		(0.70	)		(0.38	)		—			(0.38	)
Year ended 3-31-2008		10.46		0.46	(3)		(0.62	)		(0.16	)		(0.46	)		—			(0.46	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(6) For the fiscal year ended March 31, 2008.

136 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	10.78		4.78	%	$	499			1.08	%(4)		2.35	%(4)		—	%		—	%		149	%
Year ended 3-31-2012		10.44		6.83			437			1.11			1.68			—			—			309
Year ended 3-31-2011		10.10		7.08			333			1.14			2.97			—			—			432
Year ended 3-31-2010		9.82		16.27			168			1.21			3.58			—			—			410
Year ended 3-31-2009		8.76		-7.22			98			1.25			3.89			—			—			441
Year ended 3-31-2008		9.84		-1.51			95			1.21			4.57			—			—			75
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		10.78		4.25			12			2.10	(4)		1.33	(4)		—			—			149
Year ended 3-31-2012		10.44		5.68			10			2.19			0.61			—			—			309
Year ended 3-31-2011		10.10		5.94			9			2.22			1.87			2.23			1.86			432
Year ended 3-31-2010		9.82		14.84			6			2.41			2.36			—			—			410
Year ended 3-31-2009		8.76		-8.45			3			2.60			2.51			—			—			441
Year ended 3-31-2008		9.84		-2.59			2			2.31			3.46			—			—			75
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		10.78		4.40			44			1.81	(4)		1.62	(4)		—			—			149
Year ended 3-31-2012		10.44		6.03			40			1.84			0.92			—			—			309
Year ended 3-31-2011		10.10		6.31			26			1.85			2.16			—			—			432
Year ended 3-31-2010		9.82		15.44			19			1.95			2.87			—			—			410
Year ended 3-31-2009		8.76		-7.99			13			2.06			2.92			—			—			441
Year ended 3-31-2008		9.84		-2.31			5			2.02			3.76			—			—			75
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		10.78		4.75			4			1.14	(4)		2.29	(4)		1.38	(4)		2.05	(4)		149
Year ended 3-31-2012		10.44		6.79			4			1.14			1.66			1.42			1.38			309
Year ended 3-31-2011		10.10		7.01			3			1.19			2.87			1.47			2.59			432
Year ended 3-31-2010		9.82		16.30			2			1.21			3.56			1.68			3.09			410
Year ended 3-31-2009		8.76		-7.37			1			1.37			3.73			1.77			3.33			441
Year ended 3-31-2008(5)		9.84		-1.85			1			1.59	(4)		4.14	(4)		—			—			75	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		10.78		4.94			8			0.79	(4)		2.60	(4)		—			—			149
Year ended 3-31-2012		10.44		7.19			4			0.77			1.96			—			—			309
Year ended 3-31-2011		10.10		7.43			1			0.80			3.34			—			—			432
Year ended 3-31-2010		9.82		16.73			1			0.84			3.84			—			—			410
Year ended 3-31-2009		8.76		-6.88			—	*		0.88			4.26			—			—			441
Year ended 3-31-2008(5)		9.84		-1.17			—	*		0.91	(4)		4.87	(4)		—			—			75	(6)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		10.78		4.80			5			1.01	(4)		2.44	(4)		—			—			149
Year ended 3-31-2012		10.44		6.91			8			1.03			1.78			—			—			309
Year ended 3-31-2011		10.10		7.17			7			1.05			3.00			—			—			432
Year ended 3-31-2010		9.82		16.41			6			1.09			3.58			—			—			410
Year ended 3-31-2009		8.76		-7.23			1			1.19			3.61			1.21			3.59			441
Year ended 3-31-2008		9.84		-1.60			—	*		1.34			4.42			—			—			75

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 137

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY CORE EQUITY FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income		Distributions From Net Realized Gains			Distributions From Return of Capital			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	10.91	$	0.01	(3)	$	0.33		$	0.34		$	—	$	—		$	—		$	—
Year ended 3-31-2012		10.68		0.02	(3)		0.58			0.60			—		(0.37	)		—			(0.37	)
Year ended 3-31-2011		8.91		(0.01	)(3)		1.95			1.94			—		(0.17	)		—			(0.17	)
Year ended 3-31-2010		6.04		0.00	(3)		2.89			2.89			—		—			(0.02	)		(0.02	)
Year ended 3-31-2009		9.33		0.00			(3.27	)		(3.27	)		—		—			(0.02	)		(0.02	)
Year ended 3-31-2008		10.03		0.01			0.25			0.26			—		(0.96	)		—			(0.96	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		9.75		(0.04	)(3)		0.29			0.25			—		—			—			—
Year ended 3-31-2012		9.59		(0.08	)(3)		0.52			0.44			—		(0.28	)		—			(0.28	)
Year ended 3-31-2011		8.10		(0.10	)(3)		1.76			1.66			—		(0.17	)		—			(0.17	)
Year ended 3-31-2010		5.54		(0.06	)(3)		2.62			2.56			—		—			—			—
Year ended 3-31-2009		8.64		(0.11	)		(2.98	)		(3.09	)		—		—			(0.01	)		(0.01	)
Year ended 3-31-2008		9.34		(0.06	)		0.22			0.16			—		(0.86	)		—			(0.86	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		9.95		(0.03	)(3)		0.30			0.27			—		—			—			—
Year ended 3-31-2012		9.77		(0.06	)(3)		0.55			0.49			—		(0.31	)		—			(0.31	)
Year ended 3-31-2011		8.23		(0.07	)(3)		1.78			1.71			—		(0.17	)		—			(0.17	)
Year ended 3-31-2010		5.61		(0.04	)(3)		2.66			2.62			—		—			—			—
Year ended 3-31-2009		8.74		(0.06	)		(3.05	)		(3.11	)		—		—			(0.02	)		(0.02	)
Year ended 3-31-2008		9.44		(0.05	)		0.22			0.17			—		(0.87	)		—			(0.87	)
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		10.89		0.01	(3)		0.33			0.34			—		—			—			—
Year ended 3-31-2012		10.67		0.01	(3)		0.59			0.60			—		(0.38	)		—			(0.38	)
Year ended 3-31-2011		8.90		0.00	(3)		1.94			1.94			—		(0.17	)		—			(0.17	)
Year ended 3-31-2010		6.03		0.00	(3)		2.89			2.89			—		—			(0.02	)		(0.02	)
Year ended 3-31-2009		9.33		0.02	(3)		(3.30	)		(3.28	)		—		—			(0.02	)		(0.02	)
Year ended 3-31-2008(5)		10.05		(0.03	)(3)		0.26			0.23			—		(0.95	)		—			(0.95	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		11.78		0.03	(3)		0.37			0.40			—		—			—			—
Year ended 3-31-2012		11.50		0.05	(3)		0.64			0.69			—		(0.41	)		—			(0.41	)
Year ended 3-31-2011		9.55		0.03	(3)		2.09			2.12			—		(0.17	)		—			(0.17	)
Year ended 3-31-2010		6.47		(0.01	)(3)		3.13			3.12			—		—			(0.04	)		(0.04	)
Year ended 3-31-2009		9.93		0.08	(3)		(3.52	)		(3.44	)		—		—			(0.02	)		(0.02	)
Year ended 3-31-2008(5)		10.52		0.10			0.30			0.40			—		(0.99	)		—			(0.99	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		11.54		0.02	(3)		0.35			0.37			—		—			—			—
Year ended 3-31-2012		11.27		0.03	(3)		0.63			0.66			—		(0.39	)		—			(0.39	)
Year ended 3-31-2011		9.39		0.01	(3)		2.04			2.05			—		(0.17	)		—			(0.17	)
Year ended 3-31-2010		6.36		0.00	(3)		3.06			3.06			—		—			(0.03	)		(0.03	)
Year ended 3-31-2009		9.80		0.06	(3)		(3.48	)		(3.42	)		—		—			(0.02	)		(0.02	)
Year ended 3-31-2008		10.49		0.06	(3)		0.22			0.28			—		(0.97	)		—			(0.97	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(6) For the fiscal year ended March 31, 2008.

138 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average  Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment (Loss) to Average  Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	11.25		3.21	%	$	217			1.27	%(4)		0.25	%(4)		—	%		—	%		26	%
Year ended 3-31-2012		10.91		6.16			196			1.30			0.15			—			—			65
Year ended 3-31-2011		10.68		21.99			139			1.40			-0.10			—			—			107
Year ended 3-31-2010		8.91		47.83			97			1.44			0.19			—			—			101
Year ended 3-31-2009		6.04		-35.09			65			1.46			0.38			—			—			115
Year ended 3-31-2008		9.33		1.52			88			1.35			0.36			—			—			81
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		10.00		2.67			5			2.28	(4)		-0.76	(4)		—			—			26
Year ended 3-31-2012		9.75		5.05			5			2.36			-0.89			—			—			65
Year ended 3-31-2011		9.59		20.73			5			2.46			-1.19			—			—			107
Year ended 3-31-2010		8.10		46.21			5			2.51			-0.87			—			—			101
Year ended 3-31-2009		5.54		-35.75			4			2.48			-0.68			—			—			115
Year ended 3-31-2008		8.64		0.65			9			2.27			-0.51			—			—			81
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		10.22		2.71			99			2.03	(4)		-0.52	(4)		—			—			26
Year ended 3-31-2012		9.95		5.46			99			2.08			-0.61			—			—			65
Year ended 3-31-2011		9.77		21.01			105			2.15			-0.87			—			—			107
Year ended 3-31-2010		8.23		46.70			96			2.20			-0.57			—			—			101
Year ended 3-31-2009		5.61		-35.63			75			2.21			-0.42			—			—			115
Year ended 3-31-2008		8.74		0.78			135			2.11			-0.34			—			—			81
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		11.23		3.12			3			1.35	(4)		0.17	(4)		1.62	(4)		-0.10	(4)		26
Year ended 3-31-2012		10.89		6.13			3			1.35			0.10			1.72			-0.27			65
Year ended 3-31-2011		10.67		22.02			2			1.35			-0.05			1.92			-0.62			107
Year ended 3-31-2010		8.90		48.03			1			1.35			0.26			2.16			-0.55			101
Year ended 3-31-2009		6.03		-35.20			1			1.56			0.31			2.12			-0.25			115
Year ended 3-31-2008(5)		9.33		1.22			1			1.80	(4)		-0.43	(4)		—			—			81	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		12.18		3.40			36			0.94	(4)		0.59	(4)		—			—			26
Year ended 3-31-2012		11.78		6.57			28			0.94			0.47			—			—			65
Year ended 3-31-2011		11.50		22.41			5			0.99			0.33			—			—			107
Year ended 3-31-2010		9.55		48.34			3			0.99			0.55			—			—			101
Year ended 3-31-2009		6.47		-34.68			—	*		0.97			1.03			—			—			115
Year ended 3-31-2008(5)		9.93		2.80			—	*		0.99	(4)		0.72	(4)		—			—			81	(6)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		11.91		3.21			20			1.19	(4)		0.33	(4)		—			—			26
Year ended 3-31-2012		11.54		6.35			18			1.20			0.27			—			—			65
Year ended 3-31-2011		11.27		22.04			11			1.24			0.06			—			—			107
Year ended 3-31-2010		9.39		48.15			5			1.24			0.39			—			—			101
Year ended 3-31-2009		6.36		-34.94			4			1.23			0.71			—			—			115
Year ended 3-31-2008		9.80		1.67			2			1.22			0.60			—			—			81

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 139

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY CUNDILL GLOBAL VALUE FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Distributions From Return of Capital			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	13.44	$	0.05	(3)	$	(1.34	)	$	(1.29	)	$	—		$	—		$	—		$	—
Year ended 3-31-2012		14.00		0.02	(3)		(0.57	)		(0.55	)		(0.01	)		—			—			(0.01	)
Year ended 3-31-2011		12.63		0.03	(3)		1.34			1.37			—			—			—			—
Year ended 3-31-2010		8.55		0.04	(3)		4.15			4.19			(0.08	)		—			(0.03	)		(0.11	)
Year ended 3-31-2009		12.97		0.16			(4.55	)		(4.39	)		(0.03	)		—	*		—			(0.03	)
Year ended 3-31-2008		16.28		0.18			(2.00	)		(1.82	)		(0.18	)		(1.31	)		—			(1.49	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		12.78		(0.01	)(3)		(1.28	)		(1.29	)		—			—			—			—
Year ended 3-31-2012		13.43		(0.09	)(3)		(0.56	)		(0.65	)		—			—			—			—
Year ended 3-31-2011		12.22		(0.07	)(3)		1.28			1.21			—			—			—			—
Year ended 3-31-2010		8.31		(0.04	)(3)		3.99			3.95			(0.03	)		—			(0.01	)		(0.04	)
Year ended 3-31-2009		12.68		0.01			(4.38	)		(4.37	)		—			—			—			—
Year ended 3-31-2008		15.93		0.03	(3)		(1.93	)		(1.90	)		(0.04	)		(1.31	)		—			(1.35	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		12.88		0.02	(3)		(1.29	)		(1.27	)		—			—			—			—
Year ended 3-31-2012		13.48		(0.05	)(3)		(0.55	)		(0.60	)		—			—			—			—
Year ended 3-31-2011		12.23		(0.03	)(3)		1.28			1.25			—			—			—			—
Year ended 3-31-2010		8.30		0.00	(3)		3.99			3.99			(0.05	)		—			(0.01	)		(0.06	)
Year ended 3-31-2009		12.62		0.06			(4.38	)		(4.32	)		—			—			—			—
Year ended 3-31-2008		15.88		0.05			(1.92	)		(1.87	)		(0.08	)		(1.31	)		—			(1.39	)
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		13.49		0.07	(3)		(1.34	)		(1.27	)		—			—			—			—
Year ended 3-31-2012		14.04		0.05	(3)		(0.57	)		(0.52	)		(0.03	)		—			—			(0.03	)
Year ended 3-31-2011		12.64		0.06	(3)		1.34			1.40			—			—			—			—
Year ended 3-31-2010		8.55		0.06	(3)		4.16			4.22			(0.10	)		—			(0.03	)		(0.13	)
Year ended 3-31-2009		12.93		0.10			(4.48	)		(4.38	)		—			—			—			—
Year ended 3-31-2008(5)		16.23		0.02	(3)		(1.87	)		(1.85	)		(0.14	)		(1.31	)		—			(1.45	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		13.64		0.09	(3)		(1.37	)		(1.28	)		—			—			—			—
Year ended 3-31-2012		14.23		0.10	(3)		(0.59	)		(0.49	)		(0.10	)		—			—			(0.10	)
Year ended 3-31-2011		12.76		0.11	(3)		1.36			1.47			—			—			—			—
Year ended 3-31-2010		8.64		0.07	(3)		4.22			4.29			(0.13	)		—			(0.04	)		(0.17	)
Year ended 3-31-2009		13.11		0.05	(3)		(4.43	)		(4.38	)		(0.09	)		—	*		—			(0.09	)
Year ended 3-31-2008(5)		16.29		0.24	(3)		(1.87	)		(1.63	)		(0.24	)		(1.31	)		—			(1.55	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		13.56		0.08	(3)		(1.36	)		(1.28	)		—			—			—			—
Year ended 3-31-2012		14.15		0.11	(3)		(0.59	)		(0.48	)		(0.11	)		—			—			(0.11	)
Year ended 3-31-2011		12.69		0.11	(3)		1.35			1.46			—			—			—			—
Year ended 3-31-2010		8.58		0.07	(3)		4.22			4.29			(0.14	)		—			(0.04	)		(0.18	)
Year ended 3-31-2009		13.02		0.14	(3)		(4.49	)		(4.35	)		(0.09	)		—	*		—			(0.09	)
Year ended 3-31-2008		16.33		0.25	(3)		(2.01	)		(1.76	)		(0.24	)		(1.31	)		—			(1.55	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(6) For the fiscal year ended March 31, 2008.

140 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average  Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income (Loss) to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	12.15		-9.60	%	$	172			1.90	%(4)		0.79	%(4)		1.93	%(4)		0.76	%(4)		5	%
Year ended 3-31-2012		13.44		-3.93			200			1.86			0.16			—			—			38
Year ended 3-31-2011		14.00		10.85			250			1.83			0.27			—			—			46
Year ended 3-31-2010		12.63		49.03			255			1.90			0.57			1.92			0.55			35
Year ended 3-31-2009		8.55		-33.87			207			1.81			1.26			—			—			43
Year ended 3-31-2008		12.97		-12.07			443			1.59			1.05			—			—			39
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		11.49		-10.09			7			2.96	(4)		-0.22	(4)		—			—			5
Year ended 3-31-2012		12.78		-4.84			10			2.81			-0.76			—			—			38
Year ended 3-31-2011		13.43		9.90			16			2.74			-0.61			—			—			46
Year ended 3-31-2010		12.22		47.51			20			2.81			-0.29			—			—			35
Year ended 3-31-2009		8.31		-34.46			17			2.71			0.35			—			—			43
Year ended 3-31-2008		12.68		-12.83			37			2.48			0.18			—			—			39
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		11.61		-9.86			20			2.42	(4)		0.29	(4)		—			—			5
Year ended 3-31-2012		12.88		-4.45			26			2.42			-0.39			—			—			38
Year ended 3-31-2011		13.48		10.22			36			2.41			-0.28			—			—			46
Year ended 3-31-2010		12.23		48.10			43			2.46			0.08			—			—			35
Year ended 3-31-2009		8.30		-34.23			40			2.42			0.72			—			—			43
Year ended 3-31-2008		12.62		-12.65			99			2.25			0.37			—			—			39
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		12.22		-9.41			1			1.59	(4)		1.09	(4)		2.45	(4)		0.22	(4)		5
Year ended 3-31-2012		13.49		-3.66			1			1.59			0.42			2.36			-0.35			38
Year ended 3-31-2011		14.04		11.08			1			1.59			0.46			2.37			-0.32			46
Year ended 3-31-2010		12.64		49.41			—	*		1.59			0.75			2.63			-0.29			35
Year ended 3-31-2009		8.55		-33.87			—	*		1.93			0.98			2.72			0.19			43
Year ended 3-31-2008(5)		12.93		-12.31			—	*		2.31	(4)		0.29	(4)		—			—			39	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		12.36		-9.38			4			1.30	(4)		1.42	(4)		—			—			5
Year ended 3-31-2012		13.64		-3.32			5			1.27			0.75			—			—			38
Year ended 3-31-2011		14.23		11.52			6			1.28			0.85			—			—			46
Year ended 3-31-2010		12.76		49.77			6			1.31			0.93			—			—			35
Year ended 3-31-2009		8.64		-33.46			4			1.25			1.25			—			—			43
Year ended 3-31-2008(5)		13.11		-10.93			2			1.21	(4)		1.45	(4)		—			—			39	(6)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		12.28		-9.44			11			1.43	(4)		1.25	(4)		1.58	(4)		1.10	(4)		5
Year ended 3-31-2012		13.56		-3.24			13			1.20			0.85			1.54			0.51			38
Year ended 3-31-2011		14.15		11.51			20			1.20			0.85			1.54			0.51			46
Year ended 3-31-2010		12.69		50.14			17			1.20			1.12			1.55			0.77			35
Year ended 3-31-2009		8.58		-33.44			9			1.19			1.59			1.50			1.28			43
Year ended 3-31-2008		13.02		-11.73			8			1.20			1.42			1.45			1.17			39

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 141

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY DIVIDEND OPPORTUNITIES FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	15.70	$	0.13	(3)	$	0.22		$	0.35		$	(0.07	)	$	—		$	(0.07	)
Year ended 3-31-2012		16.14		0.18	(3)		(0.44	)		(0.26	)		(0.18	)		—			(0.18	)
Year ended 3-31-2011		13.61		0.13	(3)		2.55			2.68			(0.15	)		—			(0.15	)
Year ended 3-31-2010		9.86		0.12	(3)		3.74			3.86			(0.11	)		—			(0.11	)
Year ended 3-31-2009		16.05		0.12	(3)		(6.19	)		(6.07	)		(0.12	)		—			(0.12	)
Year ended 3-31-2008		15.70		0.13	(3)		0.54			0.67			(0.14	)		(0.18	)		(0.32	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		15.54		0.06	(3)		0.22			0.28			(0.01	)		—			(0.01	)
Year ended 3-31-2012		15.98		0.04	(3)		(0.43	)		(0.39	)		(0.05	)		—			(0.05	)
Year ended 3-31-2011		13.49		0.00	(3)		2.52			2.52			(0.03	)		—			(0.03	)
Year ended 3-31-2010		9.79		0.00	(3)		3.71			3.71			(0.01	)		—			(0.01	)
Year ended 3-31-2009		15.93		0.00			(6.14	)		(6.14	)		—			—			—
Year ended 3-31-2008		15.63		(0.03	)		0.53			0.50			(0.02	)		(0.18	)		(0.20	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		15.59		0.07	(3)		0.22			0.29			(0.02	)		—			(0.02	)
Year ended 3-31-2012		16.03		0.07	(3)		(0.43	)		(0.36	)		(0.08	)		—			(0.08	)
Year ended 3-31-2011		13.53		0.03	(3)		2.54			2.57			(0.07	)		—			(0.07	)
Year ended 3-31-2010		9.81		0.04	(3)		3.71			3.75			(0.03	)		—			(0.03	)
Year ended 3-31-2009		15.95		0.03	(3)		(6.14	)		(6.11	)		(0.03	)		—			(0.03	)
Year ended 3-31-2008		15.63		0.00			0.54			0.54			(0.04	)		(0.18	)		(0.22	)
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		15.66		0.12	(3)		0.22			0.34			(0.06	)		—			(0.06	)
Year ended 3-31-2012		16.10		0.17	(3)		(0.44	)		(0.27	)		(0.17	)		—			(0.17	)
Year ended 3-31-2011		13.58		0.13	(3)		2.54			2.67			(0.15	)		—			(0.15	)
Year ended 3-31-2010		9.84		0.13	(3)		3.73			3.86			(0.12	)		—			(0.12	)
Year ended 3-31-2009		16.01		0.10			(6.17	)		(6.07	)		(0.10	)		—			(0.10	)
Year ended 3-31-2008(5)		15.76		(0.01	)(3)		0.51			0.50			(0.07	)		(0.18	)		(0.25	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		15.73		0.16	(3)		0.22			0.38			(0.10	)		—			(0.10	)
Year ended 3-31-2012		16.17		0.24	(3)		(0.45	)		(0.21	)		(0.23	)		—			(0.23	)
Year ended 3-31-2011		13.63		0.18	(3)		2.56			2.74			(0.20	)		—			(0.20	)
Year ended 3-31-2010		9.88		0.17	(3)		3.75			3.92			(0.17	)		—			(0.17	)
Year ended 3-31-2009		16.07		0.08	(3)		(6.10	)		(6.02	)		(0.17	)		—			(0.17	)
Year ended 3-31-2008(5)		15.76		0.20			0.47			0.67			(0.18	)		(0.18	)		(0.36	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		15.72		0.14	(3)		0.22			0.36			(0.08	)		—			(0.08	)
Year ended 3-31-2012		16.16		0.19	(3)		(0.44	)		(0.25	)		(0.19	)		—			(0.19	)
Year ended 3-31-2011		13.63		0.15	(3)		2.55			2.70			(0.17	)		—			(0.17	)
Year ended 3-31-2010		9.87		0.14	(3)		3.75			3.89			(0.13	)		—			(0.13	)
Year ended 3-31-2009		16.06		0.14	(3)		(6.19	)		(6.05	)		(0.14	)		—			(0.14	)
Year ended 3-31-2008		15.70		0.14	(3)		0.55			0.69			(0.15	)		(0.18	)		(0.33	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(6) For the fiscal year ended March 31, 2008.

142 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	15.98		2.24	%	$	267			1.27	%(4)		1.68	%(4)		—	%		—	%		23	%
Year ended 3-31-2012		15.70		-1.54			261			1.29			1.21			—			—			37
Year ended 3-31-2011		16.14		19.85			252			1.33			0.94			—			—			45
Year ended 3-31-2010		13.61		39.29			182			1.40			1.02			—			—			46
Year ended 3-31-2009		9.86		-37.92			133			1.40			1.00			—			—			30
Year ended 3-31-2008		16.05		4.10			148			1.37			0.77			—			—			30
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		15.81		1.80			14			2.12	(4)		0.82	(4)		—			—			23
Year ended 3-31-2012		15.54		-2.35			15			2.18			0.30			—			—			37
Year ended 3-31-2011		15.98		18.69			16			2.25			0.02			—			—			45
Year ended 3-31-2010		13.49		37.88			10			2.44			-0.01			—			—			46
Year ended 3-31-2009		9.79		-38.54			9			2.43			-0.04			—			—			30
Year ended 3-31-2008		15.93		3.09			11			2.34			-0.16			—			—			30
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		15.86		1.92			41			1.96	(4)		0.98	(4)		—			—			23
Year ended 3-31-2012		15.59		-2.23			43			2.00			0.48			—			—			37
Year ended 3-31-2011		16.03		19.07			50			2.02			0.24			—			—			45
Year ended 3-31-2010		13.53		38.30			43			2.09			0.35			—			—			46
Year ended 3-31-2009		9.81		-38.33			37			2.11			0.39			—			—			30
Year ended 3-31-2008		15.95		3.32			24			2.15			0.00			—			—			30
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		15.94		2.18			3			1.37	(4)		1.58	(4)		1.83	(4)		1.12	(4)		23
Year ended 3-31-2012		15.66		-1.61			3			1.37			1.14			1.92			0.59			37
Year ended 3-31-2011		16.10		19.80			3			1.37			0.89			2.03			0.23			45
Year ended 3-31-2010		13.58		39.33			2			1.37			1.06			2.35			0.08			46
Year ended 3-31-2009		9.84		-37.98			2			1.60			0.78			2.27			0.11			30
Year ended 3-31-2008(5)		16.01		3.01			2			2.17	(4)		-0.18	(4)		—			—			30	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		16.01		2.40			14			0.93	(4)		2.02	(4)		—			—			23
Year ended 3-31-2012		15.73		-1.18			14			0.94			1.60			—			—			37
Year ended 3-31-2011		16.17		20.32			7			0.97			1.31			—			—			45
Year ended 3-31-2010		13.63		39.80			6			0.98			1.51			—			—			46
Year ended 3-31-2009		9.88		-37.60			2			0.99			1.75			—			—			30
Year ended 3-31-2008(5)		16.07		4.08			—	*		1.00	(4)		1.17	(4)		—			—			30	(6)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		16.00		2.29			13			1.17	(4)		1.75	(4)		—			—			23
Year ended 3-31-2012		15.72		-1.43			15			1.19			1.27			—			—			37
Year ended 3-31-2011		16.16		19.99			18			1.21			1.05			—			—			45
Year ended 3-31-2010		13.63		39.58			16			1.23			1.19			—			—			46
Year ended 3-31-2009		9.87		-37.79			15			1.24			1.08			—			—			30
Year ended 3-31-2008		16.06		4.23			12			1.26			0.78			—			—			30

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 143

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY EUROPEAN OPPORTUNITIES FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Distributions From Return of Capital
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	22.89	$	0.12	(3)	$	0.04		$	0.16		$	—		$	—		$	—
Year ended 3-31-2012		24.61		0.07	(3)		(1.72	)		(1.65	)		(0.07	)		—			—
Year ended 3-31-2011		21.44		(0.01	)(3)		3.24			3.23			(0.06	)		—			—
Year ended 3-31-2010		15.08		0.27	(3)		6.43			6.70			(0.34	)		—			—
Year ended 3-31-2009		34.70		1.18			(18.18	)		(17.00	)		(1.16	)		(1.44	)		(0.02	)
Year ended 3-31-2008		40.58		0.60			(1.98	)		(1.38	)		(0.50	)		(4.00	)		—
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		21.62		0.01	(3)		0.02			0.03			—			—			—
Year ended 3-31-2012		23.40		(0.13	)(3)		(1.65	)		(1.78	)		—			—			—
Year ended 3-31-2011		20.53		(0.21	)(3)		3.08			2.87			—	*		—			—
Year ended 3-31-2010		14.50		0.10	(3)		6.14			6.24			(0.21	)		—			—
Year ended 3-31-2009		33.35		1.06	(3)		(17.56	)		(16.50	)		(0.89	)		(1.44	)		(0.02	)
Year ended 3-31-2008		39.14		0.27	(3)		(1.90	)		(1.63	)		(0.16	)		(4.00	)		—
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		21.86		0.06	(3)		0.03			0.09			—			—			—
Year ended 3-31-2012		23.58		(0.06	)(3)		(1.66	)		(1.72	)		—			—			—
Year ended 3-31-2011		20.63		(0.14	)(3)		3.11			2.97			(0.02	)		—			—
Year ended 3-31-2010		14.55		0.18	(3)		6.17			6.35			(0.27	)		—			—
Year ended 3-31-2009		33.49		1.02			(17.54	)		(16.52	)		(0.96	)		(1.44	)		(0.02	)
Year ended 3-31-2008		39.28		0.32			(1.91	)		(1.59	)		(0.20	)		(4.00	)		—
Class E Shares(5)
Six-month period ended 9-30-2012 (unaudited)		23.02		0.18	(3)		0.04			0.22			—			—			—
Year ended 3-31-2012		24.76		0.18	(3)		(1.74	)		(1.56	)		(0.18	)		—			—
Year ended 3-31-2011		21.48		0.09	(3)		3.28			3.37			(0.09	)		—			—
Year ended 3-31-2010		15.08		0.39	(3)		6.44			6.83			(0.43	)		—			—
Year ended 3-31-2009		34.73		1.09			(18.00	)		(16.91	)		(1.28	)		(1.44	)		(0.02	)
Year ended 3-31-2008(6)		40.69		0.73			(2.11	)		(1.38	)		(0.58	)		(4.00	)		—
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		23.04		0.20	(3)		0.04			0.24			—			—			—
Year ended 3-31-2012		24.82		0.21	(3)		(1.75	)		(1.54	)		(0.24	)		—			—
Year ended 3-31-2011		21.51		0.12	(3)		3.29			3.41			(0.10	)		—			—
Year ended 3-31-2010		15.09		0.44	(3)		6.43			6.87			(0.45	)		—			—
Year ended 3-31-2009		34.80		0.95	(3)		(17.87	)		(16.92	)		(1.33	)		(1.44	)		(0.02	)
Year ended 3-31-2008(6)		40.73		0.35	(3)		(1.61	)		(1.26	)		(0.67	)		(4.00	)		—
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		23.04		0.16	(3)		0.05			0.21			—			—			—
Year ended 3-31-2012		24.75		0.17	(3)		(1.75	)		(1.58	)		(0.13	)		—			—
Year ended 3-31-2011		21.50		0.09	(3)		3.24			3.33			(0.08	)		—			—
Year ended 3-31-2010		15.10		0.33	(3)		6.48			6.81			(0.41	)		—			—
Year ended 3-31-2009		34.75		1.20			(18.14	)		(16.94	)		(1.25	)		(1.44	)		(0.02	)
Year ended 3-31-2008		40.61		0.61			(1.91	)		(1.30	)		(0.56	)		(4.00	)		—

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) Class is closed to investment.

(6) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(7) For the fiscal year ended March 31, 2008.

144 SEMIANNUAL REPORT 2012

	Total Distributions			Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	—		$	23.05		0.70	%	$	164			1.83	%(4)		1.07	%(4)		27	%
Year ended 3-31-2012		(0.07	)		22.89		-6.67			167			1.84			0.33			49
Year ended 3-31-2011		(0.06	)		24.61		15.07			197			1.82			-0.07			66
Year ended 3-31-2010		(0.34	)		21.44		44.42			189			1.98			1.35			100
Year ended 3-31-2009		(2.62	)		15.08		-49.74			136			1.84			4.03			88
Year ended 3-31-2008		(4.50	)		34.70		-4.52			390			1.58			1.43			65
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		—			21.65		0.14			4			2.90	(4)		0.07	(4)		27
Year ended 3-31-2012		—			21.62		-7.61			5			2.84			-0.63			49
Year ended 3-31-2011		—	*		23.40		13.99			8			2.81			-1.01			66
Year ended 3-31-2010		(0.21	)		20.53		43.02			9			2.96			0.47			100
Year ended 3-31-2009		(2.35	)		14.50		-50.19			8			2.73			3.59			88
Year ended 3-31-2008		(4.16	)		33.35		-5.27			37			2.35			0.68			65
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		—			21.95		0.41			9			2.42	(4)		0.54	(4)		27
Year ended 3-31-2012		—			21.86		-7.29			11			2.47			-0.26			49
Year ended 3-31-2011		(0.02	)		23.58		14.41			15			2.46			-0.65			66
Year ended 3-31-2010		(0.27	)		20.63		43.62			19			2.55			0.87			100
Year ended 3-31-2009		(2.42	)		14.55		-50.07			16			2.47			3.55			88
Year ended 3-31-2008		(4.20	)		33.49		-5.16			57			2.26			0.78			65
Class E Shares(5)
Six-month period ended 9-30-2012 (unaudited)		—			23.24		0.96			—	*		1.32	(4)		1.57	(4)		27
Year ended 3-31-2012		(0.18	)		23.02		-6.18			—	*		1.32			0.80			49
Year ended 3-31-2011		(0.09	)		24.76		15.71			—	*		1.32			0.40			66
Year ended 3-31-2010		(0.43	)		21.48		45.28			—	*		1.37			1.92			100
Year ended 3-31-2009		(2.74	)		15.08		-49.46			—	*		1.36			4.14			88
Year ended 3-31-2008(6)		(4.58	)		34.73		-4.52			—	*		1.28	(4)		1.78	(4)		65	(7)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		—			23.28		1.00			36			1.18	(4)		1.81	(4)		27
Year ended 3-31-2012		(0.24	)		23.04		-6.06			53			1.19			0.94			49
Year ended 3-31-2011		(0.10	)		24.82		15.87			43			1.18			0.52			66
Year ended 3-31-2010		(0.45	)		21.51		45.52			34			1.23			2.15			100
Year ended 3-31-2009		(2.79	)		15.09		-49.39			23			1.22			4.08			88
Year ended 3-31-2008(6)		(4.67	)		34.80		-4.24			53			1.17	(4)		1.44	(4)		65	(7)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		—			23.25		0.91			2			1.43	(4)		1.48	(4)		27
Year ended 3-31-2012		(0.13	)		23.04		-6.30			2			1.45			0.75			49
Year ended 3-31-2011		(0.08	)		24.75		15.52			2			1.45			0.38			66
Year ended 3-31-2010		(0.41	)		21.50		45.09			3			1.51			1.74			100
Year ended 3-31-2009		(2.71	)		15.10		-49.52			2			1.49			4.27			88
Year ended 3-31-2008		(4.56	)		34.75		-4.33			4			1.41			1.60			65

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 145

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY GLOBAL BOND FUND

	Net Asset Value, Beginning of Period		Net Investment Income			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	10.20	$	0.21	(3)	$	0.05		$	0.26		$	(0.18	)	$	—		$	(0.18	)
Year ended 3-31-2012		10.35		0.39	(3)		(0.11	)		0.28			(0.39	)		(0.04	)		(0.43	)
Year ended 3-31-2011		10.30		0.36	(3)		0.08			0.44			(0.33	)		(0.06	)		(0.39	)
Year ended 3-31-2010		9.39		0.37	(3)		0.82			1.19			(0.28	)		—			(0.28	)
Year ended 3-31-2009(5)		10.00		0.19	(3)		(0.53	)		(0.34	)		(0.15	)		(0.12	)		(0.27	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		10.19		0.17	(3)		0.05			0.22			(0.14	)		—			(0.14	)
Year ended 3-31-2012		10.35		0.31	(3)		(0.12	)		0.19			(0.31	)		(0.04	)		(0.35	)
Year ended 3-31-2011		10.29		0.28	(3)		0.09			0.37			(0.25	)		(0.06	)		(0.31	)
Year ended 3-31-2010		9.38		0.32	(3)		0.80			1.12			(0.21	)		—			(0.21	)
Year ended 3-31-2009(5)		10.00		0.16	(3)		(0.58	)		(0.42	)		(0.08	)		(0.12	)		(0.20	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		10.19		0.17	(3)		0.05			0.22			(0.14	)		—			(0.14	)
Year ended 3-31-2012		10.35		0.31	(3)		(0.12	)		0.19			(0.31	)		(0.04	)		(0.35	)
Year ended 3-31-2011		10.29		0.28	(3)		0.09			0.37			(0.25	)		(0.06	)		(0.31	)
Year ended 3-31-2010		9.38		0.30	(3)		0.82			1.12			(0.21	)		—			(0.21	)
Year ended 3-31-2009(5)		10.00		0.16	(3)		(0.58	)		(0.42	)		(0.08	)		(0.12	)		(0.20	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		10.19		0.22	(3)		0.07			0.29			(0.20	)		—			(0.20	)
Year ended 3-31-2012		10.35		0.41	(3)		(0.11	)		0.30			(0.42	)		(0.04	)		(0.46	)
Year ended 3-31-2011		10.30		0.39	(3)		0.08			0.47			(0.36	)		(0.06	)		(0.42	)
Year ended 3-31-2010		9.39		0.40	(3)		0.82			1.22			(0.31	)		—			(0.31	)
Year ended 3-31-2009(5)		10.00		0.25	(3)		(0.57	)		(0.32	)		(0.17	)		(0.12	)		(0.29	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		10.20		0.21	(3)		0.05			0.26			(0.18	)		—			(0.18	)
Year ended 3-31-2012		10.36		0.39	(3)		(0.12	)		0.27			(0.39	)		(0.04	)		(0.43	)
Year ended 3-31-2011		10.30		0.36	(3)		0.09			0.45			(0.33	)		(0.06	)		(0.39	)
Year ended 3-31-2010		9.39		0.37	(3)		0.82			1.19			(0.28	)		—			(0.28	)
Year ended 3-31-2009(5)		10.00		0.23	(3)		(0.57	)		(0.34	)		(0.15	)		(0.12	)		(0.27	)

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from April 4, 2008 (commencement of operations of the class) through March 31, 2009.

(6) For the fiscal year ended March 31, 2009.

146 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)		Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	10.28		2.61	%	$	161		0.99	%(4)		4.05	%(4)		1.26	%(4)		3.78	%(4)		14	%
Year ended 3-31-2012		10.20		2.74			158		0.99			3.81			1.25			3.55			26
Year ended 3-31-2011		10.35		4.34			141		0.99			3.50			1.25			3.24			26
Year ended 3-31-2010		10.30		12.84			89		0.99			3.95			1.32			3.62			19
Year ended 3-31-2009(5)		9.39		-3.35			32		1.01	(4)		2.87	(4)		1.56	(4)		2.32	(4)		18	(6)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		10.27		2.22			6		1.74	(4)		3.30	(4)		2.19	(4)		2.85	(4)		14
Year ended 3-31-2012		10.19		1.96			6		1.74			3.05			2.26			2.53			26
Year ended 3-31-2011		10.35		3.66			7		1.74			2.76			2.06			2.44			26
Year ended 3-31-2010		10.29		12.01			6		1.74			3.22			2.00			2.96			19
Year ended 3-31-2009(5)		9.38		-4.11			6		1.76	(4)		1.85	(4)		2.16	(4)		1.45	(4)		18	(6)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		10.27		2.22			40		1.74	(4)		3.30	(4)		1.91	(4)		3.12	(4)		14
Year ended 3-31-2012		10.19		1.96			41		1.74			3.06			1.93			2.87			26
Year ended 3-31-2011		10.35		3.66			44		1.74			2.76			1.92			2.58			26
Year ended 3-31-2010		10.29		12.01			33		1.74			3.20			1.97			2.97			19
Year ended 3-31-2009(5)		9.38		-4.10			13		1.74	(4)		2.03	(4)		2.17	(4)		1.61	(4)		18	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		10.28		2.74			27		0.74	(4)		4.30	(4)		0.91	(4)		4.12	(4)		14
Year ended 3-31-2012		10.19		3.00			28		0.74			4.07			0.91			3.90			26
Year ended 3-31-2011		10.35		4.61			25		0.74			3.76			0.92			3.58			26
Year ended 3-31-2010		10.30		13.13			14		0.74			4.20			0.96			3.98			19
Year ended 3-31-2009(5)		9.39		-3.11			5		0.76	(4)		2.80	(4)		1.21	(4)		2.35	(4)		18	(6)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		10.28		2.61			5		0.99	(4)		4.05	(4)		1.16	(4)		3.87	(4)		14
Year ended 3-31-2012		10.20		2.74			7		0.99			3.78			1.16			3.61			26
Year ended 3-31-2011		10.36		4.44			15		0.99			3.51			1.17			3.33			26
Year ended 3-31-2010		10.30		12.84			14		0.99			3.96			1.22			3.73			19
Year ended 3-31-2009(5)		9.39		-3.34			8		1.01	(4)		2.65	(4)		1.47	(4)		2.19	(4)		18	(6)

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 147

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY GLOBAL EQUITY INCOME FUND

	Net Asset Value, Beginning of Period		Net Investment Income			Net Realized and Unrealized Gain on Investments		Total from Investment Operations		Distributions From Net Investment Income			Distributions From Net Realized Gains		Total Distributions
Class A Shares
Period ended 9-30-2012 (unaudited)(3)	$	10.00	$	0.15	(4)	$	1.12	$	1.27	$	(0.08	)	$	—	$	(0.08	)
Class B Shares
Period ended 9-30-2012 (unaudited)(3)		10.00		0.12	(4)		1.12		1.24		(0.06	)		—		(0.06	)
Class C Shares
Period ended 9-30-2012 (unaudited)(3)		10.00		0.12	(4)		1.12		1.24		(0.06	)		—		(0.06	)
Class I Shares
Period ended 9-30-2012 (unaudited)(3)		10.00		0.16	(4)		1.12		1.28		(0.09	)		—		(0.09	)
Class Y Shares
Period ended 9-30-2012 (unaudited)(3)		10.00		0.15	(4)		1.12		1.27		(0.08	)		—		(0.08	)

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) For the period from June 4, 2012 (commencement of operations of the class) through September 30, 2012.

(4) Based on average weekly shares outstanding.

(5) Annualized.

(6) For the period ended September 30, 2012.

148 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)		Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Period ended 9-30-2012 (unaudited)(3)	$	11.19		12.69	%	$	18		1.29	%(5)		4.33	%(5)		1.54	%(5)		4.08	%(5)		31	%(6)
Class B Shares
Period ended 9-30-2012 (unaudited)(3)		11.18		12.35			1		2.04	(5)		3.35	(5)		2.24	(5)		3.15	(5)		31	(6)
Class C Shares
Period ended 9-30-2012 (unaudited)(3)		11.18		12.41			4		1.95	(5)		3.46	(5)		2.15	(5)		3.26	(5)		31	(6)
Class I Shares
Period ended 9-30-2012 (unaudited)(3)		11.19		12.79			10		.94	(5)		4.44	(5)		1.29	(5)		4.09	(5)		31	(6)
Class Y Shares
Period ended 9-30-2012 (unaudited)(3)		11.19		12.72			3		1.19	(5)		4.18	(5)		1.54	(5)		3.83	(5)		31	(6)

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 149

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY GLOBAL INCOME ALLOCATION FUND(+)

	Net Asset Value, Beginning of Period		Net Investment Income			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	14.52	$	0.36	(3)	$	(0.31	)	$	0.05		$	(0.32	)	$	—		$	(0.32	)
Year ended 3-31-2012		15.19		0.57	(3)		(0.57	)		0.00			(0.67	)		—			(0.67	)
Year ended 3-31-2011		13.59		0.36	(3)		1.54			1.90			(0.30	)		—			(0.30	)
Year ended 3-31-2010		9.56		0.26	(3)		3.79			4.05			(0.02	)		—			(0.02	)
Year ended 3-31-2009		16.36		0.33			(6.08	)		(5.75	)		(0.57	)		(0.48	)		(1.05	)
Year ended 3-31-2008		16.81		0.37			0.14			0.51			(0.55	)		(0.41	)		(0.96	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		14.29		0.29	(3)		(0.30	)		(0.01	)		(0.25	)		—			(0.25	)
Year ended 3-31-2012		14.93		0.43	(3)		(0.57	)		(0.14	)		(0.50	)		—			(0.50	)
Year ended 3-31-2011		13.40		0.23	(3)		1.51			1.74			(0.21	)		—			(0.21	)
Year ended 3-31-2010		9.52		0.12	(3)		3.76			3.88			—	*		—			—	*
Year ended 3-31-2009		16.31		0.16			(6.01	)		(5.85	)		(0.46	)		(0.48	)		(0.94	)
Year ended 3-31-2008		16.77		0.20			0.14			0.34			(0.39	)		(0.41	)		(0.80	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		14.38		0.31	(3)		(0.31	)		0.00			(0.28	)		—			(0.28	)
Year ended 3-31-2012		15.02		0.49	(3)		(0.58	)		(0.09	)		(0.55	)		—			(0.55	)
Year ended 3-31-2011		13.46		0.28	(3)		1.52			1.80			(0.24	)		—			(0.24	)
Year ended 3-31-2010		9.53		0.18	(3)		3.77			3.95			(0.02	)		—			(0.02	)
Year ended 3-31-2009		16.33		0.20			(6.03	)		(5.83	)		(0.49	)		(0.48	)		(0.97	)
Year ended 3-31-2008		16.78		0.24			0.15			0.39			(0.43	)		(0.41	)		(0.84	)
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		14.52		0.36	(3)		(0.31	)		0.05			(0.32	)		—			(0.32	)
Year ended 3-31-2012		15.20		0.59	(3)		(0.58	)		0.01			(0.69	)		—			(0.69	)
Year ended 3-31-2011		13.59		0.38	(3)		1.54			1.92			(0.31	)		—			(0.31	)
Year ended 3-31-2010		9.54		0.27	(3)		3.80			4.07			(0.02	)		—			(0.02	)
Year ended 3-31-2009		16.33		0.28	(3)		(6.05	)		(5.77	)		(0.54	)		(0.48	)		(1.02	)
Year ended 3-31-2008(5)		16.85		0.17	(3)		0.18			0.35			(0.46	)		(0.41	)		(0.87	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		14.62		0.39	(3)		(0.31	)		0.08			(0.35	)		—			(0.35	)
Year ended 3-31-2012		15.31		0.64	(3)		(0.58	)		0.06			(0.75	)		—			(0.75	)
Year ended 3-31-2011		13.67		0.45	(3)		1.53			1.98			(0.34	)		—			(0.34	)
Year ended 3-31-2010		9.57		0.33	(3)		3.80			4.13			(0.03	)		—			(0.03	)
Year ended 3-31-2009		16.38		0.35	(3)		(6.05	)		(5.70	)		(0.63	)		(0.48	)		(1.11	)
Year ended 3-31-2008(5)		16.86		0.30	(3)		0.23			0.53			(0.60	)		(0.41	)		(1.01	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		14.57		0.36	(3)		(0.29	)		0.07			(0.34	)		—			(0.34	)
Year ended 3-31-2012		15.25		0.59	(3)		(0.57	)		0.02			(0.70	)		—			(0.70	)
Year ended 3-31-2011		13.63		0.41	(3)		1.53			1.94			(0.32	)		—			(0.32	)
Year ended 3-31-2010		9.57		0.28	(3)		3.80			4.08			(0.02	)		—			(0.02	)
Year ended 3-31-2009		16.38		0.45			(6.19	)		(5.74	)		(0.59	)		(0.48	)		(1.07	)
Year ended 3-31-2008		16.82		0.39			0.14			0.53			(0.56	)		(0.41	)		(0.97	)

+ Ivy Global Income Allocation Fund (formerly Ivy International Balanced Fund) changed its name and investment objective effective June 4, 2012.

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(6) For the fiscal year ended March 31, 2008.

150 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)		Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income to Average  Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	14.25		0.46	%	$	246		1.35	%(4)		5.21	%(4)		1.46	%(4)		5.10	%(4)		67	%
Year ended 3-31-2012		14.52		0.23			228		1.44			3.94			—			—			61
Year ended 3-31-2011		15.19		14.08			213		1.44			2.56			—			—			71
Year ended 3-31-2010		13.59		42.40			183		1.51			2.05			—			—			131
Year ended 3-31-2009		9.56		-36.02			128		1.46			2.45			—			—			22
Year ended 3-31-2008		16.36		2.84			260		1.33			2.11			—			—			24
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		14.03		0.01			7		2.31	(4)		4.27	(4)		2.42	(4)		4.16	(4)		67
Year ended 3-31-2012		14.29		-0.75			7		2.41			3.05			—			—			61
Year ended 3-31-2011		14.93		13.04			8		2.41			1.62			—			—			71
Year ended 3-31-2010		13.40		40.79			8		2.56			1.04			—			—			131
Year ended 3-31-2009		9.52		-36.62			6		2.44			1.48			—			—			22
Year ended 3-31-2008		16.31		1.85			13		2.28			1.15			—			—			24
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		14.10		0.06			20		2.02	(4)		4.55	(4)		2.08	(4)		4.49	(4)		67
Year ended 3-31-2012		14.38		-0.41			19		2.10			3.41			—			—			61
Year ended 3-31-2011		15.02		13.42			23		2.10			1.93			—			—			71
Year ended 3-31-2010		13.46		41.42			24		2.15			1.44			—			—			131
Year ended 3-31-2009		9.53		-36.50			20		2.13			1.76			—			—			22
Year ended 3-31-2008		16.33		2.14			42		2.04			1.34			—			—			24
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		14.25		0.47			2		1.33	(4)		5.22	(4)		1.87	(4)		4.68	(4)		67
Year ended 3-31-2012		14.52		0.30			2		1.33			4.07			1.90			3.50			61
Year ended 3-31-2011		15.20		14.25			2		1.33			2.65			2.05			1.93			71
Year ended 3-31-2010		13.59		42.72			1		1.33			2.19			2.35			1.17			131
Year ended 3-31-2009		9.54		-36.11			1		1.63			2.10			1.84			1.90			22
Year ended 3-31-2008(5)		16.33		1.92			1		2.23	(4)		1.00	(4)		—			—			24	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		14.35		0.67			25		0.91	(4)		5.54	(4)		0.98	(4)		5.47	(4)		67
Year ended 3-31-2012		14.62		0.67			43		0.99			4.39			—			—			61
Year ended 3-31-2011		15.31		14.63			42		0.99			3.08			—			—			71
Year ended 3-31-2010		13.67		43.15			45		1.00			2.63			—			—			131
Year ended 3-31-2009		9.57		-35.72			34		0.99			2.72			—			—			22
Year ended 3-31-2008(5)		16.38		2.99			45		0.98	(4)		2.14	(4)		—			—			24	(6)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		14.30		0.55			5		1.17	(4)		5.09	(4)		1.24	(4)		5.02	(4)		67
Year ended 3-31-2012		14.57		0.38			4		1.26			4.12			—			—			61
Year ended 3-31-2011		15.25		14.33			6		1.25			2.80			—			—			71
Year ended 3-31-2010		13.63		42.69			6		1.26			2.10			—			—			131
Year ended 3-31-2009		9.57		-35.95			1		1.33			2.75			—			—			22
Year ended 3-31-2008		16.38		2.96			3		1.26			2.06			—			—			24

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 151

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY HIGH INCOME FUND

	Net Asset Value, Beginning of Period		Net Investment Income			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	8.30	$	0.31	(3)	$	0.23		$	0.54		$	(0.32	)	$	—		$	(0.32	)
Year ended 3-31-2012		8.46		0.64	(3)		0.02			0.66			(0.65	)		(0.17	)		(0.82	)
Year ended 3-31-2011		8.32		0.69	(3)		0.50			1.19			(0.69	)		(0.36	)		(1.05	)
Year ended 3-31-2010		6.58		0.64	(3)		1.93			2.57			(0.66	)		(0.17	)		(0.83	)
Year ended 3-31-2009		8.01		0.65			(1.46	)		(0.81	)		(0.62	)		—			(0.62	)
Year ended 3-31-2008		8.92		0.66			(0.92	)		(0.26	)		(0.65	)		—			(0.65	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		8.30		0.28	(3)		0.22			0.50			(0.28	)		—			(0.28	)
Year ended 3-31-2012		8.46		0.58	(3)		0.02			0.60			(0.59	)		(0.17	)		(0.76	)
Year ended 3-31-2011		8.32		0.62	(3)		0.50			1.12			(0.62	)		(0.36	)		(0.98	)
Year ended 3-31-2010		6.57		0.57	(3)		1.94			2.51			(0.59	)		(0.17	)		(0.76	)
Year ended 3-31-2009		8.01		0.59			(1.48	)		(0.89	)		(0.55	)		—			(0.55	)
Year ended 3-31-2008		8.92		0.56			(0.91	)		(0.35	)		(0.56	)		—			(0.56	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		8.30		0.28	(3)		0.23			0.51			(0.29	)		—			(0.29	)
Year ended 3-31-2012		8.46		0.58	(3)		0.03			0.61			(0.60	)		(0.17	)		(0.77	)
Year ended 3-31-2011		8.32		0.63	(3)		0.50			1.13			(0.63	)		(0.36	)		(0.99	)
Year ended 3-31-2010		6.58		0.60	(3)		1.92			2.52			(0.61	)		(0.17	)		(0.78	)
Year ended 3-31-2009		8.01		0.58			(1.44	)		(0.86	)		(0.57	)		—			(0.57	)
Year ended 3-31-2008		8.92		0.59			(0.92	)		(0.33	)		(0.58	)		—			(0.58	)
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		8.30		0.29	(3)		0.22			0.51			(0.29	)		—			(0.29	)
Year ended 3-31-2012		8.46		0.62	(3)		0.01			0.63			(0.62	)		(0.17	)		(0.79	)
Year ended 3-31-2011		8.32		0.67	(3)		0.50			1.17			(0.67	)		(0.36	)		(1.03	)
Year ended 3-31-2010		6.57		0.61	(3)		1.95			2.56			(0.64	)		(0.17	)		(0.81	)
Year ended 3-31-2009		8.00		0.63			(1.46	)		(0.83	)		(0.60	)		—			(0.60	)
Year ended 3-31-2008(5)		8.92		0.62	(3)		(0.93	)		(0.31	)		(0.61	)		—			(0.61	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		8.30		0.32	(3)		0.23			0.55			(0.33	)		—			(0.33	)
Year ended 3-31-2012		8.46		0.66	(3)		0.03			0.69			(0.68	)		(0.17	)		(0.85	)
Year ended 3-31-2011		8.32		0.72	(3)		0.50			1.22			(0.72	)		(0.36	)		(1.08	)
Year ended 3-31-2010		6.58		0.69	(3)		1.91			2.60			(0.69	)		(0.17	)		(0.86	)
Year ended 3-31-2009		8.01		0.68			(1.45	)		(0.77	)		(0.66	)		—			(0.66	)
Year ended 3-31-2008(5)		8.92		0.79	(3)		(0.94	)		(0.15	)		(0.76	)		—			(0.76	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		8.30		0.31	(3)		0.23			0.54			(0.32	)		—			(0.32	)
Year ended 3-31-2012		8.46		0.64	(3)		0.03			0.67			(0.66	)		(0.17	)		(0.83	)
Year ended 3-31-2011		8.32		0.69	(3)		0.50			1.19			(0.69	)		(0.36	)		(1.05	)
Year ended 3-31-2010		6.58		0.66	(3)		1.92			2.58			(0.67	)		(0.17	)		(0.84	)
Year ended 3-31-2009		8.02		0.73	(3)		(1.53	)		(0.80	)		(0.64	)		—			(0.64	)
Year ended 3-31-2008		8.92		0.68			(0.92	)		(0.24	)		(0.66	)		—			(0.66	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(6) For the fiscal year ended March 31, 2008.

152 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	8.52		6.50	%	$	2,621			0.95	%(4)		7.41	%(4)		—	%		—	%		28	%
Year ended 3-31-2012		8.30		8.47			1,847			1.00			7.87			—			—			80
Year ended 3-31-2011		8.46		15.21			1,027			1.08			8.22			—			—			89
Year ended 3-31-2010		8.32		40.44			649			1.13			8.24			—			—			84
Year ended 3-31-2009		6.58		-10.29			231			1.34			9.33			—			—			77
Year ended 3-31-2008		8.01		-3.04			127			1.36			7.76			—			—			83
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		8.52		6.11			126			1.68	(4)		6.68	(4)		—			—			28
Year ended 3-31-2012		8.30		7.63			90			1.79			7.10			—			—			80
Year ended 3-31-2011		8.46		14.31			50			1.88			7.43			—			—			89
Year ended 3-31-2010		8.32		39.36			31			2.00			7.36			—			—			84
Year ended 3-31-2009		6.57		-11.37			10			2.46			8.16			—			—			77
Year ended 3-31-2008		8.01		-4.06			7			2.43			6.62			—			—			83
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		8.52		6.14			1,235			1.64	(4)		6.72	(4)		—			—			28
Year ended 3-31-2012		8.30		7.73			850			1.70			7.16			—			—			80
Year ended 3-31-2011		8.46		14.42			416			1.77			7.52			—			—			89
Year ended 3-31-2010		8.32		39.45			249			1.83			7.50			—			—			84
Year ended 3-31-2009		6.58		-10.99			54			2.10			8.72			—			—			77
Year ended 3-31-2008		8.01		-3.84			14			2.18			6.86			—			—			83
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		8.52		6.24			6			1.36	(4)		7.02	(4)		1.42	(4)		6.96	(4)		28
Year ended 3-31-2012		8.30		8.08			5			1.36			7.55			1.45			7.47			80
Year ended 3-31-2011		8.46		14.86			4			1.36			7.95			1.59			7.72			89
Year ended 3-31-2010		8.32		40.29			2			1.36			8.02			1.83			7.55			84
Year ended 3-31-2009		6.57		-10.52			1			1.60			9.12			1.81			8.91			77
Year ended 3-31-2008(5)		8.00		-3.69			1			1.97	(4)		7.19	(4)		—			—			83	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		8.52		6.63			1,917			0.71	(4)		7.65	(4)		—			—			28
Year ended 3-31-2012		8.30		8.78			1,255			0.73			8.07			—			—			80
Year ended 3-31-2011		8.46		15.56			384			0.79			8.49			—			—			89
Year ended 3-31-2010		8.32		40.89			199			0.82			8.48			—			—			84
Year ended 3-31-2009		6.58		-9.89			9			0.90			10.28			—			—			77
Year ended 3-31-2008(5)		8.01		-1.90			—	*		0.99	(4)		8.11	(4)		—			—			83	(6)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		8.52		6.51			652			0.95	(4)		7.41	(4)		0.96	(4)		7.40	(4)		28
Year ended 3-31-2012		8.30		8.51			464			0.99			7.84			—			—			80
Year ended 3-31-2011		8.46		15.25			192			1.05			8.22			—			—			89
Year ended 3-31-2010		8.32		40.49			103			1.09			8.28			—			—			84
Year ended 3-31-2009		6.58		-10.23			38			1.14			9.69			—			—			77
Year ended 3-31-2008		8.02		-2.78			4			1.20			7.85			—			—			83

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 153

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY INTERNATIONAL CORE EQUITY FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	15.26	$	0.17	(3)	$	(0.58	)	$	(0.41	)	$	—		$	—		$	—
Year ended 3-31-2012		17.14		0.27	(3)		(1.66	)		(1.39	)		(0.27	)		(0.22	)		(0.49	)
Year ended 3-31-2011		14.84		0.18	(3)		2.27			2.45			(0.15	)		—			(0.15	)
Year ended 3-31-2010		9.54		0.13	(3)		5.27			5.40			(0.10	)		—			(0.10	)
Year ended 3-31-2009		17.11		0.17			(7.22	)		(7.05	)		(0.19	)		(0.33	)		(0.52	)
Year ended 3-31-2008		17.63		0.10			0.98			1.08			(0.09	)		(1.51	)		(1.60	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		13.86		0.10	(3)		(0.53	)		(0.43	)		—			—			—
Year ended 3-31-2012		15.64		0.14	(3)		(1.53	)		(1.39	)		(0.17	)		(0.22	)		(0.39	)
Year ended 3-31-2011		13.59		0.05	(3)		2.06			2.11			(0.06	)		—			(0.06	)
Year ended 3-31-2010		8.77		0.02	(3)		4.82			4.84			(0.02	)		—			(0.02	)
Year ended 3-31-2009		15.74		0.05			(6.62	)		(6.57	)		(0.07	)		(0.33	)		(0.40	)
Year ended 3-31-2008		16.31		(0.02	)		0.88			0.86			—			(1.43	)		(1.43	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		13.88		0.11	(3)		(0.53	)		(0.42	)		—			—			—
Year ended 3-31-2012		15.65		0.17	(3)		(1.53	)		(1.36	)		(0.19	)		(0.22	)		(0.41	)
Year ended 3-31-2011		13.58		0.07	(3)		2.08			2.15			(0.08	)		—			(0.08	)
Year ended 3-31-2010		8.76		0.05	(3)		4.82			4.87			(0.05	)		—			(0.05	)
Year ended 3-31-2009		15.72		0.10			(6.63	)		(6.53	)		(0.10	)		(0.33	)		(0.43	)
Year ended 3-31-2008		16.30		0.00	(3)		0.88			0.88			—			(1.46	)		(1.46	)
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		15.33		0.17	(3)		(0.57	)		(0.40	)		—			—			—
Year ended 3-31-2012		17.21		0.27	(3)		(1.67	)		(1.40	)		(0.26	)		(0.22	)		(0.48	)
Year ended 3-31-2011		14.90		0.17	(3)		2.29			2.46			(0.15	)		—			(0.15	)
Year ended 3-31-2010		9.59		0.16	(3)		5.27			5.43			(0.12	)		—			(0.12	)
Year ended 3-31-2009		17.05		0.16			(7.20	)		(7.04	)		(0.09	)		(0.33	)		(0.42	)
Year ended 3-31-2008(5)		17.63		(0.02	)		0.98			0.96			(0.03	)		(1.51	)		(1.54	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		15.33		0.20	(3)		(0.58	)		(0.38	)		—			—			—
Year ended 3-31-2012		17.22		0.32	(3)		(1.66	)		(1.34	)		(0.33	)		(0.22	)		(0.55	)
Year ended 3-31-2011		14.90		0.23	(3)		2.30			2.53			(0.21	)		—			(0.21	)
Year ended 3-31-2010		9.58		0.20	(3)		5.30			5.50			(0.18	)		—			(0.18	)
Year ended 3-31-2009		17.20		0.20			(7.23	)		(7.03	)		(0.26	)		(0.33	)		(0.59	)
Year ended 3-31-2008(5)		17.71		0.16			1.01			1.17			(0.17	)		(1.51	)		(1.68	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		15.35		0.18	(3)		(0.58	)		(0.40	)		—			—			—
Year ended 3-31-2012		17.23		0.29	(3)		(1.66	)		(1.37	)		(0.29	)		(0.22	)		(0.51	)
Year ended 3-31-2011		14.92		0.20	(3)		2.28			2.48			(0.17	)		—			(0.17	)
Year ended 3-31-2010		9.59		0.04	(3)		5.43			5.47			(0.14	)		—			(0.14	)
Year ended 3-31-2009		17.19		0.19			(7.24	)		(7.05	)		(0.22	)		(0.33	)		(0.55	)
Year ended 3-31-2008		17.70		0.15	(3)		0.97			1.12			(0.12	)		(1.51	)		(1.63	)

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(6) For the fiscal year ended March 31, 2008.

154 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)		Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income to Average  Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	14.85		-2.69	%	$	737		1.47	%(4)		2.35	%(4)		—	%		—	%		36	%
Year ended 3-31-2012		15.26		-7.86			717		1.49			1.75			—			—			88
Year ended 3-31-2011		17.14		16.60			673		1.46			1.21			—			—			101
Year ended 3-31-2010		14.84		56.68			430		1.59			1.09			—			—			94
Year ended 3-31-2009		9.54		-41.28			152		1.64			1.44			—			—			108
Year ended 3-31-2008		17.11		5.39			222		1.53			0.65			—			—			101
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		13.43		-3.10			13		2.36	(4)		1.50	(4)		—			—			36
Year ended 3-31-2012		13.86		-8.68			15		2.36			1.02			—			—			88
Year ended 3-31-2011		15.64		15.56			20		2.35			0.40			—			—			101
Year ended 3-31-2010		13.59		55.20			17		2.54			0.19			—			—			94
Year ended 3-31-2009		8.77		-41.84			8		2.55			0.59			—			—			108
Year ended 3-31-2008		15.74		4.56			16		2.35			-0.09			—			—			101
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		13.46		-2.95			101		2.10	(4)		1.75	(4)		—			—			36
Year ended 3-31-2012		13.88		-8.45			113		2.13			1.18			—			—			88
Year ended 3-31-2011		15.65		15.88			132		2.13			0.55			—			—			101
Year ended 3-31-2010		13.58		55.61			85		2.21			0.47			—			—			94
Year ended 3-31-2009		8.76		-41.64			30		2.29			0.81			—			—			108
Year ended 3-31-2008		15.72		4.68			45		2.20			-0.02			—			—			101
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		14.93		-2.61			3		1.53	(4)		2.31	(4)		2.10	(4)		1.74	(4)		36
Year ended 3-31-2012		15.33		-7.88			3		1.53			1.74			2.09			1.18			88
Year ended 3-31-2011		17.21		16.56			3		1.53			1.13			2.16			0.50			101
Year ended 3-31-2010		14.90		56.68			2		1.53			1.23			2.53			0.23			94
Year ended 3-31-2009		9.59		-41.34			1		1.87			1.22			2.74			0.35			108
Year ended 3-31-2008(5)		17.05		4.70			1		2.38	(4)		-0.51	(4)		—			—			101	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		14.95		-2.48			522		1.07	(4)		2.76	(4)		—			—			36
Year ended 3-31-2012		15.33		-7.47			505		1.07			2.07			—			—			88
Year ended 3-31-2011		17.22		17.03			307		1.08			1.51			—			—			101
Year ended 3-31-2010		14.90		57.44			93		1.12			1.55			—			—			94
Year ended 3-31-2009		9.58		-40.98			33		1.12			1.86			—			—			108
Year ended 3-31-2008(5)		17.20		5.83			23		1.13	(4)		0.69	(4)		—			—			101	(6)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		14.95		-2.61			141		1.32	(4)		2.54	(4)		—			—			36
Year ended 3-31-2012		15.35		-7.67			165		1.33			1.88			—			—			88
Year ended 3-31-2011		17.23		16.72			120		1.34			1.36			—			—			101
Year ended 3-31-2010		14.92		57.10			88		1.36			0.82			—			—			94
Year ended 3-31-2009		9.59		-41.12			11		1.38			1.64			—			—			108
Year ended 3-31-2008		17.19		5.50			10		1.39			0.77			—			—			101

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 155

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY INTERNATIONAL GROWTH FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains		Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	33.45	$	0.24	(3)	$	(0.16	)	$	0.08		$	—		$	—	$	—
Year ended 3-31-2012		33.23		0.26	(3)		(0.04	)		0.22			—			—		—
Year ended 3-31-2011		29.04		0.39	(3)		4.42			4.81			(0.62	)		—		(0.62	)
Year ended 3-31-2010		19.83		0.27	(3)		9.18			9.45			(0.24	)		—		(0.24	)
Year ended 3-31-2009		36.27		0.34			(16.52	)		(16.18	)		(0.26	)		—		(0.26	)
Year ended 3-31-2008		34.60		0.15			1.59			1.74			(0.07	)		—		(0.07	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		29.88		0.08	(3)		(0.15	)		(0.07	)		—			—		—
Year ended 3-31-2012		29.99		(0.04	)(3)		(0.07	)		(0.11	)		—			—		—
Year ended 3-31-2011		26.32		0.08	(3)		3.99			4.07			(0.40	)		—		(0.40	)
Year ended 3-31-2010		18.06		0.02	(3)		8.29			8.31			(0.05	)		—		(0.05	)
Year ended 3-31-2009		33.04		0.03	(3)		(14.98	)		(14.95	)		(0.03	)		—		(0.03	)
Year ended 3-31-2008		31.79		(0.23	)(3)		1.48			1.25			—			—		—
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		29.85		0.09	(3)		(0.15	)		(0.06	)		—			—		—
Year ended 3-31-2012		29.93		(0.02	)(3)		(0.06	)		(0.08	)		—			—		—
Year ended 3-31-2011		26.27		0.10	(3)		3.97			4.07			(0.41	)		—		(0.41	)
Year ended 3-31-2010		18.02		0.01	(3)		8.30			8.31			(0.06	)		—		(0.06	)
Year ended 3-31-2009		32.97		0.05	(3)		(14.94	)		(14.89	)		(0.06	)		—		(0.06	)
Year ended 3-31-2008		31.71		(0.25	)		1.51			1.26			—			—		—
Class E Shares(5)
Six-month period ended 9-30-2012 (unaudited)		33.52		0.28	(3)		(0.16	)		0.12			—			—		—
Year ended 3-31-2012		33.22		0.33	(3)		(0.03	)		0.30			—			—		—
Year ended 3-31-2011		29.04		0.45	(3)		4.42			4.87			(0.69	)		—		(0.69	)
Year ended 3-31-2010		19.83		0.35	(3)		9.18			9.53			(0.32	)		—		(0.32	)
Year ended 3-31-2009		36.28		0.37			(16.50	)		(16.13	)		(0.32	)		—		(0.32	)
Year ended 3-31-2008(6)		34.54		0.19			1.67			1.86			(0.12	)		—		(0.12	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		33.84		0.30	(3)		(0.15	)		0.15			—			—		—
Year ended 3-31-2012		33.50		0.37	(3)		(0.03	)		0.34			—			—		—
Year ended 3-31-2011		29.26		0.69	(3)		4.28			4.97			(0.73	)		—		(0.73	)
Year ended 3-31-2010		19.98		0.28	(3)		9.35			9.63			(0.35	)		—		(0.35	)
Year ended 3-31-2009		36.57		0.38			(16.60	)		(16.22	)		(0.37	)		—		(0.37	)
Year ended 3-31-2008(6)		34.52		0.10			2.12			2.22			(0.17	)		—		(0.17	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		33.54		0.26	(3)		(0.16	)		0.10			—			—		—
Year ended 3-31-2012		33.28		0.29	(3)		(0.03	)		0.26			—			—		—
Year ended 3-31-2011		29.06		0.58	(3)		4.31			4.89			(0.67	)		—		(0.67	)
Year ended 3-31-2010		19.86		0.28	(3)		9.23			9.51			(0.31	)		—		(0.31	)
Year ended 3-31-2009		36.27		0.35			(16.49	)		(16.14	)		(0.27	)		—		(0.27	)
Year ended 3-31-2008		34.59		0.31			1.42			1.73			(0.05	)		—		(0.05	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) Class is closed to investment.

(6) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(7) For the fiscal year ended March 31, 2008.

156 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	33.53		0.27	%	$	155			1.50	%(4)		1.52	%(4)		—	%		—	%		20	%
Year ended 3-31-2012		33.45		0.66			151			1.52			0.81			—			—			49
Year ended 3-31-2011		33.23		16.67			142			1.62			1.28			—			—			74
Year ended 3-31-2010		29.04		47.70			120			1.61			1.04			—			—			80
Year ended 3-31-2009		19.83		-44.65			83			1.57			1.09			—			—			93
Year ended 3-31-2008		36.27		5.01			163			1.42			0.35			—			—			103
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		29.81		-0.23			3			2.46	(4)		0.59	(4)		—			—			20
Year ended 3-31-2012		29.88		-0.34			3			2.55			-0.16			—			—			49
Year ended 3-31-2011		29.99		15.53			4			2.61			0.29			—			—			74
Year ended 3-31-2010		26.32		46.03			4			2.69			0.06			—			—			80
Year ended 3-31-2009		18.06		-45.25			4			2.62			0.11			—			—			93
Year ended 3-31-2008		33.04		3.96			10			2.45			-0.67			—			—			103
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		29.79		-0.23			23			2.42	(4)		0.63	(4)		—			—			20
Year ended 3-31-2012		29.85		-0.24			25			2.46			-0.09			—			—			49
Year ended 3-31-2011		29.93		15.55			31			2.59			0.31			—			—			74
Year ended 3-31-2010		26.27		46.15			31			2.62			0.07			—			—			80
Year ended 3-31-2009		18.02		-45.19			24			2.54			0.16			—			—			93
Year ended 3-31-2008		32.97		3.97			53			2.42			-0.65			—			—			103
Class E Shares(5)
Six-month period ended 9-30-2012 (unaudited)		33.64		0.36			—	*		1.27	(4)		1.77	(4)		—			—			20
Year ended 3-31-2012		33.52		0.90			—	*		1.29			1.04			—			—			49
Year ended 3-31-2011		33.22		16.88			—	*		1.40			1.49			—			—			74
Year ended 3-31-2010		29.04		48.11			—	*		1.32			1.31			—			—			80
Year ended 3-31-2009		19.83		-44.52			—	*		1.34			1.31			—			—			93
Year ended 3-31-2008(6)		36.28		5.34			—	*		1.27	(4)		0.49	(4)		—			—			103	(7)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		33.99		0.41			42			1.15	(4)		1.83	(4)		—			—			20
Year ended 3-31-2012		33.84		1.05			24			1.17			1.14			—			—			49
Year ended 3-31-2011		33.50		17.09			23			1.25			1.85			—			—			74
Year ended 3-31-2010		29.26		48.28			36			1.18			1.22			—			—			80
Year ended 3-31-2009		19.98		-44.42			15			1.18			1.37			—			—			93
Year ended 3-31-2008(6)		36.57		6.39			21			1.15	(4)		0.32	(4)		—			—			103	(7)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		33.64		0.30			12			1.40	(4)		1.60	(4)		—			—			20
Year ended 3-31-2012		33.54		0.78			11			1.40			0.93			1.42			0.91			49
Year ended 3-31-2011		33.28		16.93			9			1.42			1.62			1.58			1.46			74
Year ended 3-31-2010		29.06		47.95			3			1.42			1.16			1.48			1.10			80
Year ended 3-31-2009		19.86		-44.55			2			1.43			1.21			1.50			1.14			93
Year ended 3-31-2008		36.27		4.99			3			1.44			0.31			—			—			103

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 157

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY LARGE CAP GROWTH FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	15.14	$	0.00	(3)	$	(0.35	)	$	(0.35	)	$	—		$	—		$	—
Year ended 3-31-2012		13.61		(0.01	)(3)		1.54			1.53			—			—			—
Year ended 3-31-2011		11.85		0.00	(3)		1.77			1.77			(0.01	)		—			(0.01	)
Year ended 3-31-2010		8.71		0.04	(3)		3.15			3.19			(0.05	)		—			(0.05	)
Year ended 3-31-2009		13.17		0.04	(3)		(4.49	)		(4.45	)		(0.01	)		—			(0.01	)
Year ended 3-31-2008		11.82		(0.02	)(3)		1.49			1.47			—			(0.12	)		(0.12	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		13.20		(0.07	)(3)		(0.30	)		(0.37	)		—			—			—
Year ended 3-31-2012		11.99		(0.13	)(3)		1.34			1.21			—			—			—
Year ended 3-31-2011		10.55		(0.13	)(3)		1.57			1.44			—			—			—
Year ended 3-31-2010		7.82		(0.09	)(3)		2.82			2.73			—			—			—
Year ended 3-31-2009		11.98		(0.10	)(3)		(4.06	)		(4.16	)		—			—			—
Year ended 3-31-2008		10.89		(0.16	)		1.37			1.21			—			(0.12	)		(0.12	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		13.78		(0.05	)(3)		(0.32	)		(0.37	)		—			—			—
Year ended 3-31-2012		12.49		(0.11	)(3)		1.40			1.29			—			—			—
Year ended 3-31-2011		10.95		(0.09	)(3)		1.63			1.54			—			—			—
Year ended 3-31-2010		8.09		(0.05	)(3)		2.91			2.86			—			—			—
Year ended 3-31-2009		12.33		(0.05	)(3)		(4.19	)		(4.24	)		—			—			—
Year ended 3-31-2008		11.18		(0.13	)(3)		1.40			1.27			—			(0.12	)		(0.12	)
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		15.13		0.00	(3)		(0.35	)		(0.35	)		—			—			—
Year ended 3-31-2012		13.60		(0.01	)(3)		1.54			1.53			—			—			—
Year ended 3-31-2011		11.84		(0.01	)(3)		1.78			1.77			(0.01	)		—			(0.01	)
Year ended 3-31-2010		8.70		0.03	(3)		3.16			3.19			(0.05	)		—			(0.05	)
Year ended 3-31-2009		13.16		0.04	(3)		(4.49	)		(4.45	)		(0.01	)		—			(0.01	)
Year ended 3-31-2008(5)		11.84		(0.02	)(3)		1.46			1.44			—			(0.12	)		(0.12	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		15.54		0.02	(3)		(0.36	)		(0.34	)		—			—			—
Year ended 3-31-2012		13.93		0.02	(3)		1.59			1.61			—			—			—
Year ended 3-31-2011		12.12		0.03	(3)		1.81			1.84			(0.03	)		—			(0.03	)
Year ended 3-31-2010		8.91		0.06	(3)		3.22			3.28			(0.07	)		—			(0.07	)
Year ended 3-31-2009		13.46		0.06	(3)		(4.58	)		(4.52	)		(0.03	)		—			(0.03	)
Year ended 3-31-2008(5)		11.99		0.01	(3)		1.58			1.59			—			(0.12	)		(0.12	)
Class R Shares
Six-month period ended 9-30-2012 (unaudited)		14.92		(0.03	)(3)		(0.34	)		(0.37	)		—			—			—
Year ended 3-31-2012		13.46		(0.05	)(3)		1.51			1.46			—			—			—
Year ended 3-31-2011		11.74		(0.03	)(3)		1.75			1.72			—			—			—
Year ended 3-31-2010		8.63		0.00	(3)		3.12			3.12			(0.01	)		—			(0.01	)
Year ended 3-31-2009		13.08		0.02	(3)		(4.47	)		(4.45	)		—			—			—
Year ended 3-31-2008		11.78		(0.06	)(3)		1.48			1.42			—			(0.12	)		(0.12	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		15.36		0.00	(3)		(0.34	)		(0.34	)		—			—			—
Year ended 3-31-2012		13.80		0.01	(3)		1.55			1.56			—			—			—
Year ended 3-31-2011		12.01		0.01	(3)		1.80			1.81			(0.02	)		—			(0.02	)
Year ended 3-31-2010		8.83		0.05	(3)		3.19			3.24			(0.06	)		—			(0.06	)
Year ended 3-31-2009		13.35		0.05	(3)		(4.55	)		(4.50	)		(0.02	)		—			(0.02	)
Year ended 3-31-2008		11.97		(0.01	)(3)		1.51			1.50			—			(0.12	)		(0.12	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(6) For the fiscal year ended March 31, 2008.

158 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income (Loss) to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	14.79		-2.31	%	$	974			1.15	%(4)		-0.05	%(4)		1.22	%(4)		-0.12	%(4)		45	%
Year ended 3-31-2012		15.14		11.24			995			1.15			-0.06			1.22			-0.13			57
Year ended 3-31-2011		13.61		14.98			550			1.15			0.01			1.25			-0.09			91
Year ended 3-31-2010		11.85		36.63			464			1.15			0.33			1.30			0.18			60
Year ended 3-31-2009		8.71		-33.80			335			1.15			0.40			1.34			0.21			76
Year ended 3-31-2008		13.17		12.32			278			1.15			-0.13			1.29			-0.27			79
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		12.83		-2.80			13			2.14	(4)		-1.05	(4)		2.17	(4)		-1.08	(4)		45
Year ended 3-31-2012		13.20		10.09			15			2.18			-1.10			2.22			-1.14			57
Year ended 3-31-2011		11.99		13.65			10			2.32			-1.17			—			—			91
Year ended 3-31-2010		10.55		34.91			9			2.41			-0.94			—			—			60
Year ended 3-31-2009		7.82		-34.73			7			2.49			-1.01			—			—			76
Year ended 3-31-2008		11.98		10.98			13			2.32			-1.28			—			—			79
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		13.41		-2.69			75			1.93	(4)		-0.83	(4)		—			—			45
Year ended 3-31-2012		13.78		10.33			81			1.95			-0.86			—			—			57
Year ended 3-31-2011		12.49		14.06			53			1.98			-0.83			—			—			91
Year ended 3-31-2010		10.95		35.35			50			2.02			-0.54			—			—			60
Year ended 3-31-2009		8.09		-34.39			33			2.08			-0.54			—			—			76
Year ended 3-31-2008		12.33		11.23			34			2.07			-1.04			—			—			79
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		14.78		-2.31			5			1.15	(4)		-0.05	(4)		1.60	(4)		-0.50	(4)		45
Year ended 3-31-2012		15.13		11.25			5			1.15			-0.06			1.62			-0.53			57
Year ended 3-31-2011		13.60		14.99			2			1.15			-0.02			1.83			-0.70			91
Year ended 3-31-2010		11.84		36.67			1			1.15			0.31			2.05			-0.59			60
Year ended 3-31-2009		8.70		-33.83			1			1.15			0.38			2.27			-0.74			76
Year ended 3-31-2008(5)		13.16		12.05			—	*		1.15	(4)		-0.13	(4)		1.75	(4)		-0.73	(4)		79	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		15.20		-2.19			176			0.88	(4)		0.22	(4)		0.89	(4)		0.21	(4)		45
Year ended 3-31-2012		15.54		11.56			242			0.89			0.18			—			—			57
Year ended 3-31-2011		13.93		15.22			173			0.92			0.22			—			—			91
Year ended 3-31-2010		12.12		36.86			270			0.92			0.56			—			—			60
Year ended 3-31-2009		8.91		-33.61			102			0.92			0.87			—			—			76
Year ended 3-31-2008(5)		13.46		13.15			2			0.96	(4)		0.09	(4)		—			—			79	(6)
Class R Shares
Six-month period ended 9-30-2012 (unaudited)		14.55		-2.48			28			1.48	(4)		-0.37	(4)		—			—			45
Year ended 3-31-2012		14.92		10.85			24			1.48			-0.39			—			—			57
Year ended 3-31-2011		13.46		14.65			20			1.46			-0.29			—			—			91
Year ended 3-31-2010		11.74		36.18			13			1.46			0.00			—			—			60
Year ended 3-31-2009		8.63		-34.02			4			1.47			0.15			—			—			76
Year ended 3-31-2008		13.08		11.94			1			1.49			-0.48			—			—			79
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		15.02		-2.28			121			1.06	(4)		0.04	(4)		1.12	(4)		-0.03	(4)		45
Year ended 3-31-2012		15.36		11.38			121			1.06			0.04			1.14			-0.04			57
Year ended 3-31-2011		13.80		15.09			142			1.06			0.10			1.16			0.00			91
Year ended 3-31-2010		12.01		36.69			112			1.06			0.41			1.17			0.30			60
Year ended 3-31-2009		8.83		-33.74			79			1.06			0.42			1.19			0.29			76
Year ended 3-31-2008		13.35		12.42			109			1.06			-0.04			1.19			-0.17			79

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 159

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY LIMITED-TERM BOND FUND

	Net Asset Value, Beginning of Period		Net Investment Income			Net Realized and Unrealized Gain on Investments		Total from Investment Operations		Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	11.16	$	0.09	(3)	$	0.11	$	0.20	$	(0.10	)	$	—		$	(0.10	)
Year ended 3-31-2012		11.04		0.20	(3)		0.20		0.40		(0.23	)		(0.05	)		(0.28	)
Year ended 3-31-2011		11.06		0.25	(3)		0.02		0.27		(0.27	)		(0.02	)		(0.29	)
Year ended 3-31-2010		10.77		0.31	(3)		0.33		0.64		(0.32	)		(0.03	)		(0.35	)
Year ended 3-31-2009		10.48		0.31			0.29		0.60		(0.31	)		—			(0.31	)
Year ended 3-31-2008		10.15		0.38			0.33		0.71		(0.38	)		—			(0.38	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		11.16		0.04	(3)		0.11		0.15		(0.05	)		—			(0.05	)
Year ended 3-31-2012		11.04		0.11	(3)		0.20		0.31		(0.14	)		(0.05	)		(0.19	)
Year ended 3-31-2011		11.06		0.16	(3)		0.02		0.18		(0.18	)		(0.02	)		(0.20	)
Year ended 3-31-2010		10.77		0.22	(3)		0.33		0.55		(0.23	)		(0.03	)		(0.26	)
Year ended 3-31-2009		10.48		0.23			0.29		0.52		(0.23	)		—			(0.23	)
Year ended 3-31-2008		10.15		0.29			0.33		0.62		(0.29	)		—			(0.29	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		11.16		0.05	(3)		0.11		0.16		(0.06	)		—			(0.06	)
Year ended 3-31-2012		11.04		0.12	(3)		0.20		0.32		(0.15	)		(0.05	)		(0.20	)
Year ended 3-31-2011		11.06		0.17	(3)		0.02		0.19		(0.19	)		(0.02	)		(0.21	)
Year ended 3-31-2010		10.77		0.24	(3)		0.33		0.57		(0.25	)		(0.03	)		(0.28	)
Year ended 3-31-2009		10.48		0.24			0.29		0.53		(0.24	)		—			(0.24	)
Year ended 3-31-2008		10.15		0.29			0.33		0.62		(0.29	)		—			(0.29	)
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		11.16		0.08	(3)		0.11		0.19		(0.09	)		—			(0.09	)
Year ended 3-31-2012		11.04		0.19	(3)		0.20		0.39		(0.22	)		(0.05	)		(0.27	)
Year ended 3-31-2011		11.06		0.24	(3)		0.02		0.26		(0.26	)		(0.02	)		(0.28	)
Year ended 3-31-2010		10.77		0.31	(3)		0.34		0.65		(0.33	)		(0.03	)		(0.36	)
Year ended 3-31-2009		10.48		0.34			0.29		0.63		(0.34	)		—			(0.34	)
Year ended 3-31-2008(5)		10.15		0.40			0.33		0.73		(0.40	)		—			(0.40	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		11.16		0.10	(3)		0.11		0.21		(0.11	)		—			(0.11	)
Year ended 3-31-2012		11.04		0.23	(3)		0.20		0.43		(0.26	)		(0.05	)		(0.31	)
Year ended 3-31-2011		11.06		0.28	(3)		0.02		0.30		(0.30	)		(0.02	)		(0.32	)
Year ended 3-31-2010		10.77		0.35	(3)		0.33		0.68		(0.36	)		(0.03	)		(0.39	)
Year ended 3-31-2009		10.48		0.35			0.29		0.64		(0.35	)		—			(0.35	)
Year ended 3-31-2008(5)		10.15		0.49			0.33		0.82		(0.49	)		—			(0.49	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		11.16		0.09	(3)		0.11		0.20		(0.10	)		—			(0.10	)
Year ended 3-31-2012		11.04		0.21	(3)		0.19		0.40		(0.23	)		(0.05	)		(0.28	)
Year ended 3-31-2011		11.06		0.25	(3)		0.02		0.27		(0.27	)		(0.02	)		(0.29	)
Year ended 3-31-2010		10.77		0.32	(3)		0.33		0.65		(0.33	)		(0.03	)		(0.36	)
Year ended 3-31-2009		10.48		0.32			0.29		0.61		(0.32	)		—			(0.32	)
Year ended 3-31-2008		10.15		0.39			0.33		0.72		(0.39	)		—			(0.39	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(6) For the fiscal year ended March 31, 2008.

160 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	11.26		1.78	%	$	1,132			0.89	%(4)		1.56	%(4)		—	%		—	%		17	%
Year ended 3-31-2012		11.16		3.66			1,046			0.90			1.84			—			—			40
Year ended 3-31-2011		11.04		2.45			794			0.93			2.18			—			—			54
Year ended 3-31-2010		11.06		6.03			570			1.00			2.84			—			—			33
Year ended 3-31-2009		10.77		5.89			289			0.91			2.89			1.06			2.74			20
Year ended 3-31-2008		10.48		7.13			72			1.19			3.70			1.27			3.62			86
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		11.26		1.37			27			1.70	(4)		0.75	(4)		—			—			17
Year ended 3-31-2012		11.16		2.80			26			1.74			1.00			—			—			40
Year ended 3-31-2011		11.04		1.61			24			1.75			1.36			—			—			54
Year ended 3-31-2010		11.06		5.16			21			1.82			2.06			—			—			33
Year ended 3-31-2009		10.77		5.04			20			1.73			2.08			1.88			1.93			20
Year ended 3-31-2008		10.48		6.21			6			2.07			2.83			2.15			2.75			86
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		11.26		1.41			238			1.61	(4)		0.84	(4)		—			—			17
Year ended 3-31-2012		11.16		2.89			242			1.65			1.10			—			—			40
Year ended 3-31-2011		11.04		1.72			216			1.65			1.47			—			—			54
Year ended 3-31-2010		11.06		5.27			213			1.71			2.14			—			—			33
Year ended 3-31-2009		10.77		5.11			157			1.59			2.12			1.74			1.97			20
Year ended 3-31-2008		10.48		6.19			15			2.09			2.81			2.17			2.73			86
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		11.26		1.72			3			1.00	(4)		1.45	(4)		1.01	(4)		1.44	(4)		17
Year ended 3-31-2012		11.16		3.58			3			1.00			1.72			1.09			1.63			40
Year ended 3-31-2011		11.04		2.35			1			1.00			2.08			1.19			1.89			54
Year ended 3-31-2010		11.06		6.07			—	*		0.98			2.78			—			—			33
Year ended 3-31-2009		10.77		6.15			—	*		0.73			3.21			0.88			3.06			20
Year ended 3-31-2008(5)		10.48		7.31			—	*		0.98	(4)		3.93	(4)		1.06	(4)		3.85	(4)		86	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		11.26		1.91			128			0.65	(4)		1.80	(4)		—			—			17
Year ended 3-31-2012		11.16		3.92			102			0.66			2.07			—			—			40
Year ended 3-31-2011		11.04		2.71			51			0.68			2.43			—			—			54
Year ended 3-31-2010		11.06		6.35			37			0.73			3.09			—			—			33
Year ended 3-31-2009		10.77		6.26			6			0.57			3.22			0.72			3.07			20
Year ended 3-31-2008(5)		10.48		8.31			—	*		0.89	(4)		4.02	(4)		0.97	(4)		3.94	(4)		86	(6)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		11.26		1.78			67			0.89	(4)		1.56	(4)		0.90	(4)		1.55	(4)		17
Year ended 3-31-2012		11.16		3.66			51			0.90			1.85			0.92			1.84			40
Year ended 3-31-2011		11.04		2.45			54			0.93			2.19			0.94			2.18			54
Year ended 3-31-2010		11.06		6.07			57			0.98			2.87			—			—			33
Year ended 3-31-2009		10.77		5.95			37			0.86			2.89			1.01			2.74			20
Year ended 3-31-2008		10.48		7.25			2			1.09			3.79			1.17			3.71			86

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 161

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY MANAGED EUROPEAN/PACIFIC FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Distributions From Return of Capital			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	7.76	$	(0.02	)(3)	$	(0.13	)	$	(0.15	)	$	—		$	—		$	—		$	—
Year ended 3-31-2012		8.90		0.05	(3)		(1.14	)		(1.09	)		(0.05	)		—			—			(0.05	)
Year ended 3-31-2011		7.80		(0.04	)(3)		1.14			1.10			—			—			—			—
Year ended 3-31-2010		4.90		(0.03	)(3)		2.94			2.91			—	*		—			(0.01	)		(0.01	)
Year ended 3-31-2009		9.81		0.19			(4.46	)		(4.27	)		(0.31	)		(0.33	)		—			(0.64	)
Year ended 3-31-2008(5)		10.00		0.47	(3)		(0.15	)		0.32			(0.51	)		—			—			(0.51	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		7.58		(0.05	)(3)		(0.14	)		(0.19	)		—			—			—			—
Year ended 3-31-2012		8.74		(0.03	)(3)		(1.13	)		(1.16	)		—	*		—			—			—	*
Year ended 3-31-2011		7.71		(0.11	)(3)		1.14			1.03			—			—			—			—
Year ended 3-31-2010		4.86		(0.08	)(3)		2.93			2.85			—			—			—			—
Year ended 3-31-2009		9.78		0.12			(4.46	)		(4.34	)		(0.25	)		(0.33	)		—			(0.58	)
Year ended 3-31-2008(5)		10.00		0.44	(3)		(0.21	)		0.23			(0.45	)		—			—			(0.45	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		7.60		(0.05	)(3)		(0.12	)		(0.17	)		—			—			—			—
Year ended 3-31-2012		8.77		(0.02	)(3)		(1.14	)		(1.16	)		(0.01	)		—			—			(0.01	)
Year ended 3-31-2011		7.73		(0.10	)(3)		1.14			1.04			—			—			—			—
Year ended 3-31-2010		4.87		(0.07	)(3)		2.93			2.86			—	*		—			—	*		—	*
Year ended 3-31-2009		9.79		0.13			(4.46	)		(4.33	)		(0.26	)		(0.33	)		—			(0.59	)
Year ended 3-31-2008(5)		10.00		0.45	(3)		(0.21	)		0.24			(0.45	)		—			—			(0.45	)
Class E Shares(7)
Six-month period ended 9-30-2012 (unaudited)		7.79		(0.02	)(3)		(0.13	)		(0.15	)		—			—			—			—
Year ended 3-31-2012		8.93		0.06	(3)		(1.14	)		(1.08	)		(0.06	)		—			—			(0.06	)
Year ended 3-31-2011		7.81		(0.03	)(3)		1.15			1.12			—			—			—			—
Year ended 3-31-2010		4.91		(0.01	)(3)		2.93			2.92			(0.01	)		—			(0.01	)		(0.02	)
Year ended 3-31-2009		9.81		0.20			(4.45	)		(4.25	)		(0.32	)		(0.33	)		—			(0.65	)
Year ended 3-31-2008(5)		10.00		0.49	(3)		(0.16	)		0.33			(0.52	)		—			—			(0.52	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		7.84		(0.01	)(3)		(0.12	)		(0.13	)		—			—			—			—
Year ended 3-31-2012		8.98		0.08	(3)		(1.15	)		(1.07	)		(0.07	)		—			—			(0.07	)
Year ended 3-31-2011		7.84		(0.01	)(3)		1.15			1.14			—			—			—			—
Year ended 3-31-2010		4.92		(0.01	)(3)		2.95			2.94			—	*		—			(0.02	)		(0.02	)
Year ended 3-31-2009		9.82		0.21			(4.45	)		(4.24	)		(0.33	)		(0.33	)		—			(0.66	)
Year ended 3-31-2008(5)		10.00		0.52	(3)		(0.16	)		0.36			(0.54	)		—			—			(0.54	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		7.78		(0.02	)(3)		(0.12	)		(0.14	)		—			—			—			—
Year ended 3-31-2012		8.92		0.07	(3)		(1.16	)		(1.09	)		(0.05	)		—			—			(0.05	)
Year ended 3-31-2011		7.81		(0.04	)(3)		1.15			1.11			—			—			—			—
Year ended 3-31-2010		4.91		(0.01	)(3)		2.92			2.91			—	*		—			(0.01	)		(0.01	)
Year ended 3-31-2009		9.81		0.19			(4.45	)		(4.26	)		(0.31	)		(0.33	)		—			(0.64	)
Year ended 3-31-2008(5)		10.00		0.49	(3)		(0.16	)		0.33			(0.52	)		—			—			(0.52	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(6) For the fiscal year ended March 31, 2008.

(7) Class is closed to investment.

162 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	7.61		-1.93	%	$	77			0.60	%(4)		-0.60	%(4)		—	%		—	%		9	%
Year ended 3-31-2012		7.76		-12.18			78			0.60			0.59			—			—			11
Year ended 3-31-2011		8.90		14.10			88			0.60			-0.51			—			—			7
Year ended 3-31-2010		7.80		59.43			75			0.66			-0.21			—			—			13
Year ended 3-31-2009		4.90		-43.93			39			0.72			2.51			—			—			25
Year ended 3-31-2008(5)		9.81		2.67			54			0.88	(4)		6.52	(4)		0.89	(4)		6.51	(4)		0	*(6)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		7.39		-2.51			1			1.53	(4)		-1.53	(4)		—			—			9
Year ended 3-31-2012		7.58		-13.25			1			1.51			-0.34			—			—			11
Year ended 3-31-2011		8.74		13.36			2			1.49			-1.41			—			—			7
Year ended 3-31-2010		7.71		58.64			2			1.60			-1.14			—			—			13
Year ended 3-31-2009		4.86		-44.75			1			1.70			1.53			—			—			25
Year ended 3-31-2008(5)		9.78		1.87			1			1.77	(4)		5.43	(4)		1.78	(4)		5.42	(4)		0	*(6)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		7.43		-2.24			1			1.38	(4)		-1.38	(4)		—			—			9
Year ended 3-31-2012		7.60		-13.25			2			1.42			-0.24			—			—			11
Year ended 3-31-2011		8.77		13.45			2			1.39			-1.30			—			—			7
Year ended 3-31-2010		7.73		58.76			2			1.43			-0.97			—			—			13
Year ended 3-31-2009		4.87		-44.59			1			1.52			1.53			—			—			25
Year ended 3-31-2008(5)		9.79		1.90			3			1.65	(4)		6.18	(4)		1.66	(4)		6.17	(4)		0	*(6)
Class E Shares(7)
Six-month period ended 9-30-2012 (unaudited)		7.64		-1.93			—	*		0.47	(4)		-0.47	(4)		—			—			9
Year ended 3-31-2012		7.79		-12.05			—	*		0.48			0.70			—			—			11
Year ended 3-31-2011		8.93		14.34			—	*		0.48			-0.39			—			—			7
Year ended 3-31-2010		7.81		59.40			—	*		0.49			-0.06			—			—			13
Year ended 3-31-2009		4.91		-43.74			—	*		0.53			2.49			—			—			25
Year ended 3-31-2008(5)		9.81		2.79			—	*		0.79	(4)		4.44	(4)		0.80	(4)		4.43	(4)		0	*(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		7.71		-1.66			—	*		0.23	(4)		-0.23	(4)		—			—			9
Year ended 3-31-2012		7.84		-11.80			—	*		0.24			1.00			—			—			11
Year ended 3-31-2011		8.98		14.54			—	*		0.23			-0.16			—			—			7
Year ended 3-31-2010		7.84		59.76			—	*		0.23			0.20			—			—			13
Year ended 3-31-2009		4.92		-43.56			—	*		0.27			2.73			—			—			25
Year ended 3-31-2008(5)		9.82		3.07			—	*		0.55	(4)		4.67	(4)		0.56	(4)		4.66	(4)		0	*(6)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		7.64		-1.80			1			0.45	(4)		-0.45	(4)		—			—			9
Year ended 3-31-2012		7.78		-12.11			1			0.53			0.91			—			—			11
Year ended 3-31-2011		8.92		14.21			1			0.59			-0.50			—			—			7
Year ended 3-31-2010		7.81		59.32			—	*		0.55			0.05			—			—			13
Year ended 3-31-2009		4.91		-43.84			—	*		0.73			2.45			—			—			25
Year ended 3-31-2008(5)		9.81		2.77			—	*		0.81	(4)		4.76	(4)		0.82	(4)		4.75	(4)		0	*(6)

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 163

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY MANAGED INTERNATIONAL OPPORTUNITIES FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Distributions From Return of Capital			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	8.70	$	0.01	(3)	$	(0.11	)	$	(0.10	)	$	—		$	—		$	—		$	—
Year ended 3-31-2012		9.56		0.14	(3)		(0.86	)		(0.72	)		(0.14	)		—			—			(0.14	)
Year ended 3-31-2011		8.44		0.03	(3)		1.14			1.17			(0.03	)		—			(0.02	)		(0.05	)
Year ended 3-31-2010		5.62		0.01	(3)		2.85			2.86			(0.02	)		—			(0.02	)		(0.04	)
Year ended 3-31-2009		10.06		0.21			(4.21	)		(4.00	)		(0.27	)		(0.15	)		(0.02	)		(0.44	)
Year ended 3-31-2008(5)		10.00		0.35	(3)		0.04			0.39			(0.33	)		—			—			(0.33	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		8.59		(0.02	)(3)		(0.12	)		(0.14	)		—			—			—			—
Year ended 3-31-2012		9.48		0.06	(3)		(0.87	)		(0.81	)		(0.08	)		—			—			(0.08	)
Year ended 3-31-2011		8.38		(0.04	)(3)		1.14			1.10			—	*		—			—	*		—	*
Year ended 3-31-2010		5.59		(0.04	)(3)		2.83			2.79			—			—			—			—
Year ended 3-31-2009		10.04		0.16	(3)		(4.23	)		(4.07	)		(0.21	)		(0.15	)		(0.02	)		(0.38	)
Year ended 3-31-2008(5)		10.00		0.33	(3)		(0.02	)		0.31			(0.27	)		—			—			(0.27	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		8.61		(0.02	)(3)		(0.11	)		(0.13	)		—			—			—			—
Year ended 3-31-2012		9.49		0.07	(3)		(0.86	)		(0.79	)		(0.09	)		—			—			(0.09	)
Year ended 3-31-2011		8.40		(0.03	)(3)		1.13			1.10			(0.01	)		—			—	*		(0.01	)
Year ended 3-31-2010		5.59		(0.03	)(3)		2.84			2.81			—			—			—			—
Year ended 3-31-2009		10.04		0.15	(3)		(4.22	)		(4.07	)		(0.21	)		(0.15	)		(0.02	)		(0.38	)
Year ended 3-31-2008(5)		10.00		0.30	(3)		0.02			0.32			(0.28	)		—			—			(0.28	)
Class E Shares(7)
Six-month period ended 9-30-2012 (unaudited)		8.70		0.02	(3)		(0.11	)		(0.09	)		—			—			—			—
Year ended 3-31-2012		9.57		0.15	(3)		(0.88	)		(0.73	)		(0.14	)		—			—			(0.14	)
Year ended 3-31-2011		8.45		0.05	(3)		1.13			1.18			(0.04	)		—			(0.02	)		(0.06	)
Year ended 3-31-2010		5.62		0.01	(3)		2.86			2.87			(0.02	)		—			(0.02	)		(0.04	)
Year ended 3-31-2009		10.06		0.23			(4.23	)		(4.00	)		(0.28	)		(0.14	)		(0.02	)		(0.44	)
Year ended 3-31-2008(5)		10.00		0.38	(3)		0.02			0.40			(0.34	)		—			—			(0.34	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		8.73		0.03	(3)		(0.11	)		(0.08	)		—			—			—			—
Year ended 3-31-2012		9.58		0.16	(3)		(0.85	)		(0.69	)		(0.16	)		—			—			(0.16	)
Year ended 3-31-2011		8.46		0.05	(3)		1.14			1.19			(0.04	)		—			(0.03	)		(0.07	)
Year ended 3-31-2010		5.63		0.02	(3)		2.87			2.89			(0.03	)		—			(0.03	)		(0.06	)
Year ended 3-31-2009		10.07		0.24			(4.21	)		(3.97	)		(0.30	)		(0.15	)		(0.02	)		(0.47	)
Year ended 3-31-2008(5)		10.00		0.41	(3)		0.02			0.43			(0.36	)		—			—			(0.36	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		8.69		0.02	(3)		(0.11	)		(0.09	)		—			—			—			—
Year ended 3-31-2012		9.55		0.16	(3)		(0.88	)		(0.72	)		(0.14	)		—			—			(0.14	)
Year ended 3-31-2011		8.43		0.03	(3)		1.14			1.17			(0.03	)		—			(0.02	)		(0.05	)
Year ended 3-31-2010		5.61		0.01	(3)		2.85			2.86			(0.02	)		—			(0.02	)		(0.04	)
Year ended 3-31-2009		10.06		0.22			(4.22	)		(4.00	)		(0.28	)		(0.15	)		(0.02	)		(0.45	)
Year ended 3-31-2008(5)		10.00		0.37	(3)		0.03			0.40			(0.34	)		—			—			(0.34	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(6) For the fiscal year ended March 31, 2008.

(7) Class is closed to investment.

164 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	8.60		-1.15	%	$	182			0.49	%(4)		0.30	%(4)		—	%		—	%		19	%
Year ended 3-31-2012		8.70		-7.42			185			0.50			1.58			—			—			8
Year ended 3-31-2011		9.56		13.88			188			0.50			0.38			—			—			22
Year ended 3-31-2010		8.44		50.82			152			0.55			0.30			—			—			9
Year ended 3-31-2009		5.62		-40.20			84			0.57			2.85			—			—			16
Year ended 3-31-2008(5)		10.06		3.75			100			0.67	(4)		4.67	(4)		0.68	(4)		4.66	(4)		—	(6)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		8.45		-1.51			2			1.40	(4)		-0.60	(4)		—			—			19
Year ended 3-31-2012		8.59		-8.42			3			1.39			0.66			—			—			8
Year ended 3-31-2011		9.48		13.14			3			1.36			-0.47			—			—			22
Year ended 3-31-2010		8.38		49.91			4			1.43			-0.58			—			—			9
Year ended 3-31-2009		5.59		-40.93			3			1.41			1.92			—			—			16
Year ended 3-31-2008(5)		10.04		2.98			4			1.48	(4)		4.05	(4)		1.49	(4)		4.04	(4)		—	(6)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		8.48		-1.51			5			1.29	(4)		-0.49	(4)		—			—			19
Year ended 3-31-2012		8.61		-8.25			5			1.30			0.79			—			—			8
Year ended 3-31-2011		9.49		13.05			5			1.26			-0.38			—			—			22
Year ended 3-31-2010		8.40		50.27			5			1.32			-0.46			—			—			9
Year ended 3-31-2009		5.59		-40.91			3			1.35			2.19			—			—			16
Year ended 3-31-2008(5)		10.04		3.05			4			1.44	(4)		3.70	(4)		1.45	(4)		3.69	(4)		—	(6)
Class E Shares(7)
Six-month period ended 9-30-2012 (unaudited)		8.61		-1.03			—	*		0.39	(4)		0.40	(4)		—			—			19
Year ended 3-31-2012		8.70		-7.45			—	*		0.40			1.66			—			—			8
Year ended 3-31-2011		9.57		13.94			—	*		0.41			0.48			—			—			22
Year ended 3-31-2010		8.45		51.16			—	*		0.42			0.41			—			—			9
Year ended 3-31-2009		5.62		-40.12			—	*		0.45			2.83			—			—			16
Year ended 3-31-2008(5)		10.06		3.82			—	*		0.60	(4)		3.57	(4)		0.61	(4)		3.56	(4)		—	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		8.65		-0.92			—	*		0.16	(4)		0.64	(4)		—			—			19
Year ended 3-31-2012		8.73		-7.04			1			0.15			1.89			—			—			8
Year ended 3-31-2011		9.58		14.09			—	*		0.16			0.54			—			—			22
Year ended 3-31-2010		8.46		51.31			—	*		0.16			0.66			—			—			9
Year ended 3-31-2009		5.63		-39.86			—	*		0.18			3.08			—			—			16
Year ended 3-31-2008(5)		10.07		4.10			—	*		0.36	(4)		3.81	(4)		0.37	(4)		3.80	(4)		—	(6)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		8.60		-1.04			1			0.35	(4)		0.41	(4)		—			—			19
Year ended 3-31-2012		8.69		-7.42			1			0.46			1.85			—			—			8
Year ended 3-31-2011		9.55		13.90			1			0.50			0.40			0.52			0.38			22
Year ended 3-31-2010		8.43		50.91			—	*		0.55			0.28			0.58			0.25			9
Year ended 3-31-2009		5.61		-40.21			—	*		0.59			2.56			0.60			2.55			16
Year ended 3-31-2008(5)		10.06		3.81			—	*		0.64	(4)		3.83	(4)		0.65	(4)		3.82	(4)		—	(6)

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 165

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY MICRO CAP GROWTH FUND

	Net Asset Value, Beginning of Period		Net Investment Loss			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From  Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	19.27	$	(0.13	)(3)	$	(0.45	)	$	(0.58	)	$	—		$	—		$	—
Year ended 3-31-2012		19.63		(0.29	)(3)		1.27			0.98			—			(1.34	)		(1.34	)
Year ended 3-31-2011		15.78		(0.30	)(3)		4.80			4.50			(0.05	)		(0.60	)		(0.65	)
Year ended 3-31-2010		9.77		(0.29	)(3)		6.69			6.40			—			(0.39	)		(0.39	)
Year ended 3-31-2009(5)		10.00		(0.02	)		(0.21	)		(0.23	)		—			—			—
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		18.93		(0.23	)(3)		(0.45	)		(0.68	)		—			—			—
Year ended 3-31-2012		19.27		(0.49	)(3)		1.26			0.77			—			(1.11	)		(1.11	)
Year ended 3-31-2011		15.63		(0.52	)(3)		4.71			4.19			—			(0.55	)		(0.55	)
Year ended 3-31-2010		9.76		(0.51	)(3)		6.66			6.15			—			(0.28	)		(0.28	)
Year ended 3-31-2009(5)		10.00		(0.04	)		(0.20	)		(0.24	)		—			—			—
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		19.04		(0.20	)(3)		(0.45	)		(0.65	)		—			—			—
Year ended 3-31-2012		19.42		(0.43	)(3)		1.25			0.82			—			(1.20	)		(1.20	)
Year ended 3-31-2011		15.69		(0.43	)(3)		4.75			4.32			—			(0.59	)		(0.59	)
Year ended 3-31-2010		9.76		(0.44	)(3)		6.68			6.24			—			(0.31	)		(0.31	)
Year ended 3-31-2009(5)		10.00		(0.03	)		(0.21	)		(0.24	)		—			—			—
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		19.37		(0.10	)(3)		(0.44	)		(0.54	)		—			—			—
Year ended 3-31-2012		19.73		(0.21	)(3)		1.26			1.05			—			(1.41	)		(1.41	)
Year ended 3-31-2011		15.79		(0.22	)(3)		4.82			4.60			(0.06	)		(0.60	)		(0.66	)
Year ended 3-31-2010		9.77		(0.24	)(3)		6.68			6.44			—			(0.42	)		(0.42	)
Year ended 3-31-2009(5)		10.00		(0.02	)		(0.21	)		(0.23	)		—			—			—
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		19.29		(0.12	)(3)		(0.45	)		(0.57	)		—			—			—
Year ended 3-31-2012		19.64		(0.26	)(3)		1.28			1.02			—			(1.37	)		(1.37	)
Year ended 3-31-2011		15.70		(0.26	)(3)		4.78			4.52			—			(0.58	)		(0.58	)
Year ended 3-31-2010		9.77		(0.31	)(3)		6.63			6.32			—			(0.39	)		(0.39	)
Year ended 3-31-2009(5)		10.00		(0.02	)		(0.21	)		(0.23	)		—			—			—

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from February 17, 2009 (commencement of operations of the class) through March 31, 2009.

(6) For the fiscal year ended March 31, 2009.

166 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average  Net Assets Including Expense Waiver			Ratio of Net Investment Loss to Average  Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Loss to Average  Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	18.69		-3.01	%	$	68			1.76	%(4)		-1.50	%(4)		—	%		—	%		23	%
Year ended 3-31-2012		19.27		6.56			72			1.78			-1.63			—			—			78
Year ended 3-31-2011		19.63		28.73			78			1.88			-1.69			—			—			78
Year ended 3-31-2010		15.78		66.16			28			2.17			-2.08			2.79			-2.70			94
Year ended 3-31-2009(5)		9.77		-2.30			3			2.55	(4)		-2.38	(4)		—			—			5	(6)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		18.25		-3.59			2			2.88	(4)		-2.62	(4)		—			—			23
Year ended 3-31-2012		18.93		5.28			1			2.99			-2.84			—			—			78
Year ended 3-31-2011		19.27		27.00			1			3.20			-3.02			—			—			78
Year ended 3-31-2010		15.63		63.49			—	*		3.91			-3.82			4.13			-4.04			94
Year ended 3-31-2009(5)		9.76		-2.40			—	*		3.49	(4)		-3.32	(4)		—			—			5	(6)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		18.39		-3.36			4			2.50	(4)		-2.24	(4)		—			—			23
Year ended 3-31-2012		19.04		5.65			4			2.62			-2.47			—			—			78
Year ended 3-31-2011		19.42		27.72			4			2.66			-2.48			—			—			78
Year ended 3-31-2010		15.69		64.45			1			3.29			-3.19			3.51			-3.41			94
Year ended 3-31-2009(5)		9.76		-2.40			—	*		3.24	(4)		-3.07	(4)		—			—			5	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		18.83		-2.79			4			1.31	(4)		-1.07	(4)		—			—			23
Year ended 3-31-2012		19.37		7.00			3			1.34			-1.19			—			—			78
Year ended 3-31-2011		19.73		29.36			3			1.41			-1.24			—			—			78
Year ended 3-31-2010		15.79		66.68			—	*		1.89			-1.79			2.23			-2.13			94
Year ended 3-31-2009(5)		9.77		-2.30			—	*		1.97	(4)		-1.80	(4)		—			—			5	(6)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		18.72		-2.90			1			1.58	(4)		-1.33	(4)		—			—			23
Year ended 3-31-2012		19.29		6.79			1			1.59			-1.45			—			—			78
Year ended 3-31-2011		19.64		29.00			1			1.67			-1.45			—			—			78
Year ended 3-31-2010		15.70		65.38			—	*		2.35			-2.27			2.57			-2.49			94
Year ended 3-31-2009(5)		9.77		-2.30			—	*		2.21	(4)		-2.03	(4)		—			—			5	(6)

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 167

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY MID CAP GROWTH FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income		Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	18.62	$	(0.05	)(3)	$	(0.51	)	$	(0.56	)	$	—	$	—		$	—
Year ended 3-31-2012		18.36		(0.12	)(3)		0.85			0.73			—		(0.47	)		(0.47	)
Year ended 3-31-2011		13.95		(0.05	)(3)		4.46			4.41			—		—			—
Year ended 3-31-2010		8.57		(0.06	)(3)		5.44			5.38			—		—			—
Year ended 3-31-2009		12.77		(0.05	)		(4.15	)		(4.20	)		—		—			—
Year ended 3-31-2008		13.07		(0.09	)		(0.21	)		(0.30	)		—		—			—
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		16.42		(0.11	)(3)		(0.45	)		(0.56	)		—		—			—
Year ended 3-31-2012		16.40		(0.25	)(3)		0.74			0.49			—		(0.47	)		(0.47	)
Year ended 3-31-2011		12.58		(0.18	)(3)		4.00			3.82			—		—			—
Year ended 3-31-2010		7.81		(0.16	)(3)		4.93			4.77			—		—			—
Year ended 3-31-2009		11.79		(0.17	)(3)		(3.81	)		(3.98	)		—		—			—
Year ended 3-31-2008		12.18		(0.30	)		(0.09	)		(0.39	)		—		—			—
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		17.11		(0.11	)(3)		(0.46	)		(0.57	)		—		—			—
Year ended 3-31-2012		17.04		(0.23	)(3)		0.77			0.54			—		(0.47	)		(0.47	)
Year ended 3-31-2011		13.04		(0.15	)(3)		4.15			4.00			—		—			—
Year ended 3-31-2010		8.06		(0.14	)(3)		5.12			4.98			—		—			—
Year ended 3-31-2009		12.09		(0.19	)		(3.84	)		(4.03	)		—		—			—
Year ended 3-31-2008		12.48		(0.25	)		(0.14	)		(0.39	)		—		—			—
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		18.37		(0.07	)(3)		(0.50	)		(0.57	)		—		—			—
Year ended 3-31-2012		18.17		(0.15	)(3)		0.82			0.67			—		(0.47	)		(0.47	)
Year ended 3-31-2011		13.81		(0.07	)(3)		4.43			4.36			—		—			—
Year ended 3-31-2010		8.48		(0.05	)(3)		5.38			5.33			—		—			—
Year ended 3-31-2009		12.68		(0.06	)		(4.14	)		(4.20	)		—		—			—
Year ended 3-31-2008(5)		13.13		(0.22	)(3)		(0.23	)		(0.45	)		—		—			—
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		19.43		(0.03	)(3)		(0.53	)		(0.56	)		—		—			—
Year ended 3-31-2012		19.07		(0.07	)(3)		0.90			0.83			—		(0.47	)		(0.47	)
Year ended 3-31-2011		14.42		0.01	(3)		4.64			4.65			—		—			—
Year ended 3-31-2010		8.81		0.00	(3)		5.61			5.61			—		—			—
Year ended 3-31-2009		13.07		0.00			(4.26	)		(4.26	)		—		—			—
Year ended 3-31-2008(5)		13.28		(0.03	)(3)		(0.18	)		(0.21	)		—		—			—
Class R Shares
Six-month period ended 9-30-2012 (unaudited)		18.49		(0.08	)(3)		(0.50	)		(0.58	)		—		—			—
Year ended 3-31-2012		18.27		(0.16	)(3)		0.85			0.69			—		(0.47	)		(0.47	)
Year ended 3-31-2011		13.90		(0.08	)(3)		4.45			4.37			—		—			—
Year ended 3-31-2010		8.54		(0.07	)(3)		5.43			5.36			—		—			—
Year ended 3-31-2009		12.73		(0.06	)		(4.13	)		(4.19	)		—		—			—
Year ended 3-31-2008		13.05		(0.10	)		(0.22	)		(0.32	)		—		—			—
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		19.17		(0.05	)(3)		(0.52	)		(0.57	)		—		—			—
Year ended 3-31-2012		18.86		(0.10	)(3)		0.88			0.78			—		(0.47	)		(0.47	)
Year ended 3-31-2011		14.29		(0.02	)(3)		4.59			4.57			—		—			—
Year ended 3-31-2010		8.74		(0.01	)(3)		5.56			5.55			—		—			—
Year ended 3-31-2009		12.97		(0.01	)		(4.22	)		(4.23	)		—		—			—
Year ended 3-31-2008		13.23		(0.07	)		(0.19	)		(0.26	)		—		—			—

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(6) For the fiscal year ended March 31, 2008.

168 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Loss to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	18.06		-3.01	%	$	939			1.35	%(4)		-0.60	%(4)		—	%		—	%		15	%
Year ended 3-31-2012		18.62		4.29			636			1.40			-0.69			—			—			29
Year ended 3-31-2011		18.36		31.61			369			1.49			-0.34			—			—			39
Year ended 3-31-2010		13.95		62.78			162			1.65			-0.51			1.67			-0.53			40
Year ended 3-31-2009		8.57		-32.89			75			1.65			-0.39			1.78			-0.52			49
Year ended 3-31-2008		12.77		-2.37			108			1.60			-0.67			—			—			42
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		15.86		-3.41			19			2.19	(4)		-1.43	(4)		—			—			15
Year ended 3-31-2012		16.42		3.33			17			2.35			-1.63			—			—			29
Year ended 3-31-2011		16.40		30.37			12			2.47			-1.32			—			—			39
Year ended 3-31-2010		12.58		61.08			7			2.68			-1.53			—			—			40
Year ended 3-31-2009		7.81		-33.76			4			2.92			-1.69			—			—			49
Year ended 3-31-2008		11.79		-3.20			9			2.56			-1.62			—			—			42
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		16.54		-3.33			152			2.07	(4)		-1.32	(4)		—			—			15
Year ended 3-31-2012		17.11		3.50			135			2.14			-1.44			—			—			29
Year ended 3-31-2011		17.04		30.68			69			2.16			-1.02			—			—			39
Year ended 3-31-2010		13.04		61.79			17			2.35			-1.21			2.38			-1.24			40
Year ended 3-31-2009		8.06		-33.33			6			2.35			-1.10			2.59			-1.34			49
Year ended 3-31-2008		12.09		-3.13			10			2.35			-1.41			2.38			-1.44			42
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		17.80		-3.10			4			1.60	(4)		-0.85	(4)		1.94	(4)		-1.19	(4)		15
Year ended 3-31-2012		18.37		4.00			3			1.60			-0.88			1.97			-1.25			29
Year ended 3-31-2011		18.17		31.57			3			1.60			-0.44			2.09			-0.93			39
Year ended 3-31-2010		13.81		62.85			1			1.60			-0.46			2.60			-1.46			40
Year ended 3-31-2009		8.48		-33.12			—	*		1.99			-0.71			3.12			-1.84			49
Year ended 3-31-2008(5)		12.68		-3.43			—	*		2.52	(4)		-1.61	(4)		—			—			42	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		18.87		-2.83			995			1.04	(4)		-0.29	(4)		—			—			15
Year ended 3-31-2012		19.43		4.65			788			1.05			-0.38			—			—			29
Year ended 3-31-2011		19.07		32.25			116			1.08			0.04			—			—			39
Year ended 3-31-2010		14.42		63.68			6			1.14			-0.03			—			—			40
Year ended 3-31-2009		8.81		-32.59			—	*		1.17			0.09			—			—			49
Year ended 3-31-2008(5)		13.07		-1.58			1			1.17	(4)		-0.23	(4)		—			—			42	(6)
Class R Shares
Six-month period ended 9-30-2012 (unaudited)		17.91		-3.14			62			1.63	(4)		-0.88	(4)		—			—			15
Year ended 3-31-2012		18.49		4.09			50			1.63			-0.93			—			—			29
Year ended 3-31-2011		18.27		31.44			21			1.63			-0.48			—			—			39
Year ended 3-31-2010		13.90		62.76			4			1.67			-0.57			—			—			40
Year ended 3-31-2009		8.54		-32.91			—	*		1.72			-0.45			—			—			49
Year ended 3-31-2008		12.73		-2.45			—	*		1.68			-0.75			—			—			42
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		18.60		-2.97			431			1.28	(4)		-0.53	(4)		—			—			15
Year ended 3-31-2012		19.17		4.44			439			1.25			-0.55			1.30			-0.60			29
Year ended 3-31-2011		18.86		31.98			207			1.25			-0.10			1.34			-0.19			39
Year ended 3-31-2010		14.29		63.50			54			1.25			-0.11			1.38			-0.24			40
Year ended 3-31-2009		8.74		-32.61			9			1.25			0.00			1.40			-0.15			49
Year ended 3-31-2008		12.97		-1.97			12			1.25			-0.33			1.40			-0.48			42

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 169

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY MONEY MARKET FUND

	Net Asset Value, Beginning of Period		Net Investment Income(3)		Net Realized and Unrealized Gain on Investments		Total from Investment Operations		Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	1.00	$	0.00	$	0.00	$	0.00	$	—	*	$	—		$	—	*
Year ended 3-31-2012		1.00		0.00		0.00		0.00		—	*		—			—	*
Year ended 3-31-2011		1.00		0.00		0.00		0.00		—	*		—	*		—	*
Year ended 3-31-2010		1.00		0.01		0.00		0.01		(0.01	)		—	*		(0.01	)
Year ended 3-31-2009		1.00		0.02		0.00		0.02		(0.02	)		—			(0.02	)
Year ended 3-31-2008		1.00		0.04		0.00		0.04		(0.04	)		—			(0.04	)
Class B Shares(5)
Six-month period ended 9-30-2012 (unaudited)		1.00		0.00		0.00		0.00		—	*		—			—	*
Year ended 3-31-2012		1.00		0.00		0.00		0.00		—	*		—			—	*
Year ended 3-31-2011		1.00		0.00		0.00		0.00		—	*		—	*		—	*
Year ended 3-31-2010		1.00		0.00		0.00		0.00		—	*		—	*		—	*
Year ended 3-31-2009		1.00		0.01		0.00		0.01		(0.01	)		—			(0.01	)
Year ended 3-31-2008		1.00		0.03		0.00		0.03		(0.03	)		—			(0.03	)
Class C Shares(5)
Six-month period ended 9-30-2012 (unaudited)		1.00		0.00		0.00		0.00		—	*		—			—	*
Year ended 3-31-2012		1.00		0.00		0.00		0.00		—	*		—			—	*
Year ended 3-31-2011		1.00		0.00		0.00		0.00		—	*		—	*		—	*
Year ended 3-31-2010		1.00		0.00		0.00		0.00		—	*		—	*		—	*
Year ended 3-31-2009		1.00		0.01		0.00		0.01		(0.01	)		—			(0.01	)
Year ended 3-31-2008		1.00		0.03		0.00		0.03		(0.03	)		—			(0.03	)
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		1.00		0.00		0.00		0.00		—	*		—			—	*
Year ended 3-31-2012		1.00		0.00		0.00		0.00		—	*		—			—	*
Year ended 3-31-2011		1.00		0.00		0.00		0.00		—	*		—	*		—	*
Year ended 3-31-2010		1.00		0.00		0.00		0.00		—	*		—	*		—	*
Year ended 3-31-2009		1.00		0.01		0.00		0.01		(0.01	)		—			(0.01	)
Year ended 3-31-2008(6)		1.00		0.04		0.00		0.04		(0.04	)		—			(0.04	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) These shares are not available for direct investment. However, they are available by exchange from Class B or Class C shares of another Ivy Fund.

(6) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

170 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)		Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income(Loss) to Average Net Assets Excluding Expense Waiver(2)
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	1.00		0.01	%	$	147		0.34	%(4)		0.02	%(4)		0.67	%(4)		-0.31	%(4)
Year ended 3-31-2012		1.00		0.02			171		0.28			0.02			0.66			-0.36
Year ended 3-31-2011		1.00		0.04			159		0.43			0.02			0.69			-0.24
Year ended 3-31-2010		1.00		0.53			195		0.65			0.50			0.65			0.50
Year ended 3-31-2009		1.00		1.65			219		0.73			1.51			—			—
Year ended 3-31-2008		1.00		4.19			91		0.88			4.02			—			—
Class B Shares(5)
Six-month period ended 9-30-2012 (unaudited)		1.00		0.01			9		0.34	(4)		0.02	(4)		1.68	(4)		-1.32	(4)
Year ended 3-31-2012		1.00		0.02			8		0.28			0.02			1.73			-1.43
Year ended 3-31-2011		1.00		0.04			7		0.43			0.02			1.80			-1.35
Year ended 3-31-2010		1.00		0.16			9		1.07			0.16			1.75			-0.52
Year ended 3-31-2009		1.00		0.74			19		1.61			0.58			1.70			0.49
Year ended 3-31-2008		1.00		3.25			7		1.80			3.01			—			—
Class C Shares(5)
Six-month period ended 9-30-2012 (unaudited)		1.00		0.01			36		0.34	(4)		0.02	(4)		1.65	(4)		-1.29	(4)
Year ended 3-31-2012		1.00		0.02			41		0.28			0.02			1.64			-1.34
Year ended 3-31-2011		1.00		0.04			32		0.43			0.02			1.67			-1.22
Year ended 3-31-2010		1.00		0.16			39		1.08			0.16			1.67			-0.43
Year ended 3-31-2009		1.00		0.78			91		1.58			0.58			1.63			0.53
Year ended 3-31-2008		1.00		3.31			18		1.73			3.03			—			—
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		1.00		0.01			5		0.34	(4)		0.02	(4)		0.75	(4)		-0.39	(4)
Year ended 3-31-2012		1.00		0.02			4		0.28			0.02			0.78			-0.48
Year ended 3-31-2011		1.00		0.04			3		0.43			0.02			0.79			-0.34
Year ended 3-31-2010		1.00		0.49			4		0.69			0.49			0.70			0.48
Year ended 3-31-2009		1.00		1.51			5		0.88			1.31			—			—
Year ended 3-31-2008(6)		1.00		4.07			1		0.93	(4)		3.77	(4)		—			—

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 171

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY MUNICIPAL BOND FUND

	Net Asset Value, Beginning of Period		Net Investment Income			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains		Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	11.88	$	0.18	(3)	$	0.33		$	0.51		$	(0.19	)	$	—	$	(0.19	)
Year ended 3-31-2012		10.95		0.42	(3)		0.93			1.35			(0.42	)		—		(0.42	)
Year ended 3-31-2011		11.16		0.43	(3)		(0.21	)		0.22			(0.43	)		—		(0.43	)
Year ended 3-31-2010		10.41		0.45	(3)		0.75			1.20			(0.45	)		—		(0.45	)
Year ended 3-31-2009		10.80		0.39	(3)		(0.39	)		0.00			(0.39	)		—		(0.39	)
Year ended 3-31-2008		11.12		0.39	(3)		(0.32	)		0.07			(0.39	)		—		(0.39	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		11.88		0.14	(3)		0.32			0.46			(0.14	)		—		(0.14	)
Year ended 3-31-2012		10.95		0.33	(3)		0.93			1.26			(0.33	)		—		(0.33	)
Year ended 3-31-2011		11.16		0.34	(3)		(0.21	)		0.13			(0.34	)		—		(0.34	)
Year ended 3-31-2010		10.41		0.36	(3)		0.75			1.11			(0.36	)		—		(0.36	)
Year ended 3-31-2009		10.80		0.31	(3)		(0.39	)		(0.08	)		(0.31	)		—		(0.31	)
Year ended 3-31-2008		11.12		0.31			(0.32	)		(0.01	)		(0.31	)		—		(0.31	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		11.88		0.14	(3)		0.32			0.46			(0.14	)		—		(0.14	)
Year ended 3-31-2012		10.95		0.33	(3)		0.93			1.26			(0.33	)		—		(0.33	)
Year ended 3-31-2011		11.16		0.34	(3)		(0.21	)		0.13			(0.34	)		—		(0.34	)
Year ended 3-31-2010		10.41		0.37	(3)		0.75			1.12			(0.37	)		—		(0.37	)
Year ended 3-31-2009		10.80		0.31	(3)		(0.39	)		(0.08	)		(0.31	)		—		(0.31	)
Year ended 3-31-2008		11.12		0.31			(0.32	)		(0.01	)		(0.31	)		—		(0.31	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		11.88		0.19	(3)		0.33			0.52			(0.20	)		—		(0.20	)
Year ended 3-31-2012		10.95		0.44	(3)		0.93			1.37			(0.44	)		—		(0.44	)
Year ended 3-31-2011		11.16		0.45	(3)		(0.21	)		0.24			(0.45	)		—		(0.45	)
Year ended 3-31-2010(5)		11.10		0.19	(3)		0.06			0.25			(0.19	)		—		(0.19	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		11.88		0.18	(3)		0.32			0.50			(0.18	)		—		(0.18	)
Year ended 3-31-2012		10.95		0.42	(3)		0.93			1.35			(0.42	)		—		(0.42	)
Year ended 3-31-2011		11.16		0.43	(3)		(0.21	)		0.22			(0.43	)		—		(0.43	)
Period ended 3-31-2010(7)		11.30		0.22	(3)		(0.14	)		0.08			(0.22	)		—		(0.22	)
Period ended 9-24-2008(8)		10.80		0.14	(3)		(0.36	)		(0.22	)		(0.14	)		—		(0.14	)
Year ended 3-31-2008		11.12		0.38	(3)		(0.32	)		0.06			(0.38	)		—		(0.38	)
Year ended 3-31-2007		11.04		0.39	(3)		0.08			0.47			(0.39	)		—		(0.39	)
Year ended 3-31-2006		11.13		0.42			(0.09	)		0.33			(0.42	)		—		(0.42	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from November 4, 2009 (commencement of operations of the class) through March 31, 2010.

(6) For the fiscal year ended March 31, 2010.

(7) For the period from October 8, 2009 (recommencement of operations) through March 31, 2010.

(8) For the period from April 1, 2008 through September 24, 2008 when all outstanding Class Y shares were redeemed at the ending net asset value shown.

(9) For the fiscal year ended March 31, 2009.

172 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average  Net Assets Including Expense Waiver			Ratio of Net Investment Income to Average  Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income to Average  Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	12.20		4.24	%	$	117			1.02	%(4)		2.98	%(4)		—	%		—	%		4	%
Year ended 3-31-2012		11.88		12.49			97			1.06			3.60			—			—			4
Year ended 3-31-2011		10.95		1.89			64			1.10			3.79			—			—			6
Year ended 3-31-2010		11.16		11.66			46			1.15			4.09			—			—			18
Year ended 3-31-2009		10.41		0.09			33			1.24			3.76			—			—			26
Year ended 3-31-2008		10.80		0.69			20			1.26			3.62			1.31			3.57			62
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		12.20		3.86			4			1.76	(4)		2.25	(4)		—			—			4
Year ended 3-31-2012		11.88		11.67			3			1.81			2.83			—			—			4
Year ended 3-31-2011		10.95		1.10			2			1.88			3.00			—			—			6
Year ended 3-31-2010		11.16		10.75			2			1.92			3.33			—			—			18
Year ended 3-31-2009		10.41		-0.71			2			2.02			2.98			—			—			26
Year ended 3-31-2008		10.80		-0.13			1			2.08			2.81			2.13			2.76			62
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		12.20		3.85			31			1.77	(4)		2.24	(4)		—			—			4
Year ended 3-31-2012		11.88		11.65			28			1.82			2.85			—			—			4
Year ended 3-31-2011		10.95		1.12			20			1.86			3.02			—			—			6
Year ended 3-31-2010		11.16		10.84			23			1.90			3.34			—			—			18
Year ended 3-31-2009		10.41		-0.69			22			2.00			3.00			—			—			26
Year ended 3-31-2008		10.80		-0.14			12			2.08			2.80			2.13			2.75			62
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		12.20		4.34			1			0.82	(4)		3.18	(4)		—			—			4
Year ended 3-31-2012		11.88		12.75			1			0.85			3.79			—			—			4
Year ended 3-31-2011		10.95		2.10			1			0.88			4.02			—			—			6
Year ended 3-31-2010(5)		11.16		2.27			—	*		0.91	(4)		4.32	(4)		—			—			18	(6)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		12.20		4.23			1			1.02	(4)		2.99	(4)		1.08	(4)		2.93	(4)		4
Year ended 3-31-2012		11.88		12.51			1			1.06			3.63			1.11			3.58			4
Year ended 3-31-2011		10.95		1.90			1			1.10			3.78			1.13			3.75			6
Period ended 3-31-2010(7)		11.16		0.68			—	*		1.15	(4)		4.10	(4)		1.17	(4)		4.08	(4)		18	(6)
Period ended 9-24-2008(8)		10.44		-2.08			—			1.51	(4)		3.42	(4)		—			—			26	(9)
Year ended 3-31-2008		10.80		0.58			—	*		1.38			3.50			1.43			3.45			62
Year ended 3-31-2007		11.12		4.36			—	*		1.23			3.55			1.47			3.31			26
Year ended 3-31-2006		11.04		2.98			—	*		0.92			3.74			1.35			3.31			20

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 173

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY MUNICIPAL HIGH INCOME FUND

	Net Asset Value, Beginning of Period		Net Investment Income			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	5.23	$	0.11	(3)	$	0.18		$	0.29		$	(0.11	)	$	—		$	(0.11	)
Year ended 3-31-2012		4.75		0.25	(3)		0.48			0.73			(0.25	)		—			(0.25	)
Year ended 3-31-2011		4.84		0.22	(3)		(0.09	)		0.13			(0.22	)		—	*		(0.22	)
Year ended 3-31-2010(5)		4.21		0.22	(3)		0.63			0.85			(0.21	)		(0.01	)		(0.22	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		5.23		0.09	(3)		0.18			0.27			(0.09	)		—			(0.09	)
Year ended 3-31-2012		4.75		0.20	(3)		0.49			0.69			(0.21	)		—			(0.21	)
Year ended 3-31-2011		4.84		0.18	(3)		(0.09	)		0.09			(0.18	)		—	*		(0.18	)
Year ended 3-31-2010(5)		4.21		0.17	(3)		0.64			0.81			(0.17	)		(0.01	)		(0.18	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		5.23		0.09	(3)		0.18			0.27			(0.09	)		—			(0.09	)
Year ended 3-31-2012		4.75		0.21	(3)		0.48			0.69			(0.21	)		—			(0.21	)
Year ended 3-31-2011		4.84		0.19	(3)		(0.09	)		0.10			(0.19	)		—	*		(0.19	)
Year ended 3-31-2010(5)		4.21		0.18	(3)		0.63			0.81			(0.17	)		(0.01	)		(0.18	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		5.23		0.12	(3)		0.18			0.30			(0.12	)		—			(0.12	)
Year ended 3-31-2012		4.75		0.25	(3)		0.48			0.73			(0.25	)		—			(0.25	)
Year ended 3-31-2011		4.84		0.24	(3)		(0.09	)		0.15			(0.24	)		—	*		(0.24	)
Year ended 3-31-2010(6)		4.21		0.23	(3)		0.63			0.86			(0.22	)		(0.01	)		(0.23	)
Period ended 5-17-2009(7)		4.48		0.16	(3)		(0.27	)		(0.11	)		(0.16	)		—			(0.16	)
Year ended 9-30-2008(7)		5.00		0.24			(0.51	)		(0.27	)		(0.25	)		—			(0.25	)
Year ended 9-30-2007(7)		5.10		0.25			(0.10	)		0.15			(0.25	)		—			(0.25	)
Year ended 9-30-2006(7)		4.98		0.25			0.12			0.37			(0.25	)		—			(0.25	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		5.23		0.11	(3)		0.18			0.29			(0.11	)		—			(0.11	)
Year ended 3-31-2012		4.75		0.24	(3)		0.49			0.73			(0.25	)		—			(0.25	)
Year ended 3-31-2011		4.84		0.22	(3)		(0.09	)		0.13			(0.22	)		—	*		(0.22	)
Year ended 3-31-2010(5)		4.21		0.15	(3)		0.64			0.79			(0.15	)		(0.01	)		(0.16	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from May 18, 2009 (commencement of operations of the class) through March 31, 2010.

(6) The Ivy Municipal High Income Fund commenced operations on May 18, 2009 after the reorganization of the Class Y shares of Waddell & Reed Advisors Municipal High Income Fund into Class I shares of the Fund. The information shown is for a share outstanding during the fiscal period from May 18, 2009 through March 31, 2010 for Ivy Municipal High Income Fund.

(7) The information shown is for a share outstanding during the fiscal year or period ended for Class Y of the Waddell & Reed Advisors Municipal High Income Fund prior to the reorganization.

(8) The return shown for Class Y is hypothetical because there were no shares or assets for the period from July 28, 2009 through October 7, 2009. Class A data has been substituted for Class Y data during that period.

174 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Income to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	5.41		5.58	%	$	511			0.85	%(4)		4.14	%(4)		0.87	%(4)		4.12	%(4)		4	%
Year ended 3-31-2012		5.23		15.62			384			0.87			4.88			0.90			4.85			4
Year ended 3-31-2011		4.75		2.71			146			0.94			4.63			0.98			4.59			13
Year ended 3-31-2010(5)		4.84		20.45			25			0.95	(4)		5.41	(4)		1.68	(4)		4.68	(4)		14
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		5.41		5.17			17			1.63	(4)		3.35	(4)		1.65	(4)		3.33	(4)		4
Year ended 3-31-2012		5.23		14.70			12			1.67			4.07			1.70			4.04			4
Year ended 3-31-2011		4.75		1.87			4			1.72			3.82			1.76			3.78			13
Year ended 3-31-2010(5)		4.84		19.59			2			1.72	(4)		4.52	(4)		2.38	(4)		3.86	(4)		14
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		5.41		5.20			286			1.58	(4)		3.40	(4)		1.60	(4)		3.38	(4)		4
Year ended 3-31-2012		5.23		14.77			198			1.62			4.12			1.65			4.09			4
Year ended 3-31-2011		4.75		1.91			65			1.67			3.89			1.71			3.85			13
Year ended 3-31-2010(5)		4.84		19.55			8			1.76	(4)		4.54	(4)		2.42	(4)		3.88	(4)		14
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		5.41		5.66			637			0.69	(4)		4.29	(4)		0.71	(4)		4.27	(4)		4
Year ended 3-31-2012		5.23		15.82			416			0.70			5.04			0.74			5.00			4
Year ended 3-31-2011		4.75		2.98			131			0.70			4.90			0.79			4.81			13
Year ended 3-31-2010(6)		4.84		20.68			8			0.70	(4)		5.77	(4)		1.53	(4)		4.94	(4)		14
Period ended 5-17-2009(7)		4.21		-4.72			—	*		0.87	(4)		6.35	(4)		0.91	(4)		6.31	(4)		28
Year ended 9-30-2008(7)		4.48		-5.67			—	*		0.70			5.03			0.74			4.99			26
Year ended 9-30-2007(7)		5.00		2.92			—	*		0.75			4.90			0.79			4.86			33
Year ended 9-30-2006(7)		5.10		7.61			—	*		0.75			4.96			—			—			29
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		5.41		5.58			32			0.85	(4)		4.14	(4)		0.96	(4)		4.03	(4)		4
Year ended 3-31-2012		5.23		15.65			26			0.87			4.83			0.99			4.71			4
Year ended 3-31-2011		4.75		2.73			6			0.94			4.76			1.05			4.65			13
Year ended 3-31-2010(5)		4.84		19.02	(8)		1			1.10	(4)		5.10	(4)		1.76	(4)		4.44	(4)		14

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 175

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY PACIFIC OPPORTUNITIES FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	13.98	$	0.10	(3)	$	(0.56	)	$	(0.46	)	$	—		$	—		$	—
Year ended 3-31-2012		16.94		0.01	(3)		(2.39	)		(2.38	)		(0.06	)		(0.52	)		(0.58)
Year ended 3-31-2011		14.84		(0.01	)(3)		2.11			2.10			—			—			—
Year ended 3-31-2010		8.86		(0.08	)(3)		6.06			5.98			—			—			—
Year ended 3-31-2009		17.61		0.05			(6.96	)		(6.91	)		—			(1.84	)		(1.84)
Year ended 3-31-2008		16.91		(0.01	)		2.80			2.79			(0.05	)		(2.04	)		(2.09)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		11.92		0.02	(3)		(0.48	)		(0.46	)		—			—			—
Year ended 3-31-2012		14.64		(0.13	)(3)		(2.07	)		(2.20	)		—			(0.52	)		(0.52)
Year ended 3-31-2011		12.97		(0.15	)(3)		1.82			1.67			—			—			—
Year ended 3-31-2010		7.83		(0.19	)(3)		5.33			5.14			—			—			—
Year ended 3-31-2009		16.01		(0.09	)		(6.30	)		(6.39	)		—			(1.79	)		(1.79)
Year ended 3-31-2008		15.49		(0.19	)		2.56			2.37			—			(1.85	)		(1.85)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		12.36		0.04	(3)		(0.49	)		(0.45	)		—			—			—
Year ended 3-31-2012		15.10		(0.08	)(3)		(2.14	)		(2.22	)		—			(0.52	)		(0.52)
Year ended 3-31-2011		13.33		(0.10	)(3)		1.87			1.77			—			—			—
Year ended 3-31-2010		8.01		(0.17	)(3)		5.49			5.32			—			—			—
Year ended 3-31-2009		16.27		(0.09	)		(6.37	)		(6.46	)		—			(1.80	)		(1.80)
Year ended 3-31-2008		15.73		(0.14	)		2.58			2.44			—			(1.90	)		(1.90)
Class E Shares(5)
Six-month period ended 9-30-2012 (unaudited)		14.12		0.13	(3)		(0.57	)		(0.44	)		—			—			—
Year ended 3-31-2012		17.15		0.06	(3)		(2.41	)		(2.35	)		(0.16	)		(0.52	)		(0.68)
Year ended 3-31-2011		14.98		0.05	(3)		2.12			2.17			—			—			—
Year ended 3-31-2010		8.90		(0.01	)(3)		6.09			6.08			—			—			—
Year ended 3-31-2009		17.62		0.07			(6.93	)		(6.86	)		—			(1.86	)		(1.86)
Year ended 3-31-2008(6)		16.88		0.06			2.82			2.88			(0.10	)		(2.04	)		(2.14)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		14.30		0.14	(3)		(0.57	)		(0.43	)		—			—			—
Year ended 3-31-2012		17.39		0.08	(3)		(2.46	)		(2.38	)		(0.19	)		(0.52	)		(0.71)
Year ended 3-31-2011		15.16		0.05	(3)		2.18			2.23			—			—			—
Year ended 3-31-2010		9.00		(0.01	)(3)		6.17			6.16			—			—			—
Year ended 3-31-2009		17.77		0.10	(3)		(7.00	)		(6.90	)		—			(1.87	)		(1.87)
Year ended 3-31-2008(6)		17.00		(0.03	)(3)		2.98			2.95			(0.14	)		(2.04	)		(2.18)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		14.22		0.12	(3)		(0.57	)		(0.45	)		—			—			—
Year ended 3-31-2012		17.25		0.05	(3)		(2.44	)		(2.39	)		(0.12	)		(0.52	)		(0.64)
Year ended 3-31-2011		15.08		0.03	(3)		2.14			2.17			—			—			—
Year ended 3-31-2010		8.98		(0.05	)(3)		6.15			6.10			—			—			—
Year ended 3-31-2009		17.75		0.08			(6.99	)		(6.91	)		—			(1.86	)		(1.86)
Year ended 3-31-2008		17.03		0.01			2.83			2.84			(0.08	)		(2.04	)		(2.12)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) Class is closed to investment.

(6) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(7) For the fiscal year ended March 31, 2008

176 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	13.52		-3.29	%	$	489			1.79	%(4)		1.53	%(4)		97	%
Year ended 3-31-2012		13.98		-13.71			504			1.75			0.04			97
Year ended 3-31-2011		16.94		14.15			600			1.72			-0.07			137
Year ended 3-31-2010		14.84		67.50			514			1.83			-0.61			81
Year ended 3-31-2009		8.86		-38.76			239			1.92			0.37			112
Year ended 3-31-2008		17.61		14.30			471			1.74			-0.08			96
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		11.46		-3.78			9			2.98	(4)		0.32	(4)		97
Year ended 3-31-2012		11.92		-14.69			10			2.88			-1.03			97
Year ended 3-31-2011		14.64		12.88			16			2.81			-1.07			137
Year ended 3-31-2010		12.97		65.65			17			2.91			-1.64			81
Year ended 3-31-2009		7.83		-39.46			10			3.07			-0.77			112
Year ended 3-31-2008		16.01		13.16			21			2.74			-1.05			96
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		11.91		-3.64			17			2.56	(4)		0.74	(4)		97
Year ended 3-31-2012		12.36		-14.37			20			2.51			-0.63			97
Year ended 3-31-2011		15.10		13.28			32			2.46			-0.73			137
Year ended 3-31-2010		13.33		66.42			35			2.56			-1.38			81
Year ended 3-31-2009		8.01		-39.22			16			2.69			-0.36			112
Year ended 3-31-2008		16.27		13.36			38			2.49			-0.82			96
Class E Shares(5)
Six-month period ended 9-30-2012 (unaudited)		13.68		-3.12			—	*		1.37	(4)		1.94	(4)		97
Year ended 3-31-2012		14.12		-13.32			—	*		1.37			0.41			97
Year ended 3-31-2011		17.15		14.49			—	*		1.36			0.30			137
Year ended 3-31-2010		14.98		68.32			—	*		1.42			-0.11			81
Year ended 3-31-2009		8.90		-38.43			—	*		1.44			0.79			112
Year ended 3-31-2008(6)		17.62		14.79			—	*		1.43	(4)		0.26	(4)		96	(7)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		13.87		-3.01			151			1.25	(4)		2.03	(4)		97
Year ended 3-31-2012		14.30		-13.28			138			1.25			0.52			97
Year ended 3-31-2011		17.39		14.71			159			1.24			0.28			137
Year ended 3-31-2010		15.16		68.44			104			1.29			-0.11			81
Year ended 3-31-2009		9.00		-38.34			45			1.31			0.81			112
Year ended 3-31-2008(6)		17.77		15.10			38			1.31	(4)		0.06	(4)		96	(7)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		13.77		-3.17			6			1.50	(4)		1.84	(4)		97
Year ended 3-31-2012		14.22		-13.48			6			1.50			0.30			97
Year ended 3-31-2011		17.25		14.39			9			1.50			0.22			137
Year ended 3-31-2010		15.08		67.93			9			1.55			-0.38			81
Year ended 3-31-2009		8.98		-38.47			4			1.57			0.69			112
Year ended 3-31-2008		17.75		14.48			7			1.55			0.06			96

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 177

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY SMALL CAP GROWTH FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income		Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	14.51	$	(0.09	)(3)	$	0.45		$	0.36		$	—	$	—		$	—
Year ended 3-31-2012		15.39		(0.17	)(3)		(0.21	)		(0.38	)		—		(0.50	)		(0.50	)
Year ended 3-31-2011		11.40		(0.13	)(3)		4.12			3.99			—		—			—
Year ended 3-31-2010		7.08		(0.12	)(3)		4.44			4.32			—		—			—
Year ended 3-31-2009		10.31		(0.12	)		(3.04	)		(3.16	)		—		(0.07	)		(0.07	)
Year ended 3-31-2008		12.98		(0.13	)(3)		(0.71	)		(0.84	)		—		(1.83	)		(1.83	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		12.57		(0.14	)(3)		0.39			0.25			—		—			—
Year ended 3-31-2012		13.56		(0.28	)(3)		(0.21	)		(0.49	)		—		(0.50	)		(0.50	)
Year ended 3-31-2011		10.15		(0.23	)(3)		3.64			3.41			—		—			—
Year ended 3-31-2010		6.37		(0.20	)(3)		3.98			3.78			—		—			—
Year ended 3-31-2009		9.39		(0.37	)		(2.58	)		(2.95	)		—		(0.07	)		(0.07	)
Year ended 3-31-2008		11.97		(0.23	)		(0.64	)		(0.87	)		—		(1.71	)		(1.71	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		13.12		(0.12	)(3)		0.40			0.28			—		—			—
Year ended 3-31-2012		14.07		(0.24	)(3)		(0.21	)		(0.45	)		—		(0.50	)		(0.50	)
Year ended 3-31-2011		10.49		(0.20	)(3)		3.78			3.58			—		—			—
Year ended 3-31-2010		6.56		(0.16	)(3)		4.09			3.93			—		—			—
Year ended 3-31-2009		9.62		(0.28	)		(2.71	)		(2.99	)		—		(0.07	)		(0.07	)
Year ended 3-31-2008		12.22		(0.23	)		(0.62	)		(0.85	)		—		(1.75	)		(1.75	)
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		14.47		(0.09	)(3)		0.44			0.35			—		—			—
Year ended 3-31-2012		15.36		(0.18	)(3)		(0.21	)		(0.39	)		—		(0.50	)		(0.50	)
Year ended 3-31-2011		11.38		(0.14	)(3)		4.12			3.98			—		—			—
Year ended 3-31-2010		7.06		(0.11	)(3)		4.43			4.32			—		—			—
Year ended 3-31-2009		10.29		(0.13	)(3)		(3.03	)		(3.16	)		—		(0.07	)		(0.07	)
Year ended 3-31-2008(5)		13.03		(0.18	)(3)		(0.77	)		(0.95	)		—		(1.79	)		(1.79	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		16.98		(0.07	)(3)		0.52			0.45			—		—			—
Year ended 3-31-2012		17.83		(0.13	)(3)		(0.22	)		(0.35	)		—		(0.50	)		(0.50	)
Year ended 3-31-2011		13.14		(0.09	)(3)		4.78			4.69			—		—			—
Year ended 3-31-2010		8.12		(0.07	)(3)		5.09			5.02			—		—			—
Year ended 3-31-2009		11.73		(0.07	)(3)		(3.47	)		(3.54	)		—		(0.07	)		(0.07	)
Year ended 3-31-2008(5)		14.35		0.09			(0.82	)		(0.73	)		—		(1.89	)		(1.89	)
Class R Shares
Six-month period ended 9-30-2012 (unaudited)		14.48		(0.10	)(3)		0.44			0.34			—		—			—
Year ended 3-31-2012		15.38		(0.19	)(3)		(0.21	)		(0.40	)		—		(0.50	)		(0.50	)
Year ended 3-31-2011		11.40		(0.15	)(3)		4.13			3.98			—		—			—
Year ended 3-31-2010		7.08		(0.12	)(3)		4.44			4.32			—		—			—
Year ended 3-31-2009		10.30		(0.15	)		(3.00	)		(3.15	)		—		(0.07	)		(0.07	)
Year ended 3-31-2008		12.96		(0.19	)		(0.65	)		(0.84	)		—		(1.82	)		(1.82	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		16.50		(0.09	)(3)		0.51			0.42			—		—			—
Year ended 3-31-2012		17.38		(0.16	)(3)		(0.22	)		(0.38	)		—		(0.50	)		(0.50	)
Year ended 3-31-2011		12.85		(0.12	)(3)		4.65			4.53			—		—			—
Year ended 3-31-2010		7.96		(0.10	)(3)		4.99			4.89			—		—			—
Year ended 3-31-2009		11.53		(0.10	)(3)		(3.40	)		(3.50	)		—		(0.07	)		(0.07	)
Year ended 3-31-2008		14.31		(0.11	)		(0.81	)		(0.92	)		—		(1.86	)		(1.86	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(6) For the fiscal year ended March 31, 2008.

178 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Loss to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Loss to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	14.87		2.48	%	$	243			1.51	%(4)		-1.28	%(4)		—	%		—	%		16	%
Year ended 3-31-2012		14.51		-1.98			241			1.50			-1.21			—			—			65
Year ended 3-31-2011		15.39		35.00			240			1.51			-1.05			—			—			53
Year ended 3-31-2010		11.40		61.02			132			1.66			-1.24			—			—			72
Year ended 3-31-2009		7.08		-30.58			66			1.71			-1.38			—			—			85
Year ended 3-31-2008		10.31		-8.32			97			1.56			-1.00			—			—			79
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		12.82		1.99			10			2.49	(4)		-2.26	(4)		—			—			16
Year ended 3-31-2012		12.57		-3.07			10			2.57			-2.27			—			—			65
Year ended 3-31-2011		13.56		33.60			11			2.54			-2.08			—			—			53
Year ended 3-31-2010		10.15		59.34			8			2.77			-2.34			—			—			72
Year ended 3-31-2009		6.37		-31.35			6			2.75			-2.43			—			—			85
Year ended 3-31-2008		9.39		-9.19			12			2.45			-1.87			—			—			79
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		13.40		2.14			176			2.13	(4)		-1.91	(4)		—			—			16
Year ended 3-31-2012		13.12		-2.67			181			2.17			-1.87			—			—			65
Year ended 3-31-2011		14.07		34.13			207			2.18			-1.71			—			—			53
Year ended 3-31-2010		10.49		59.91			154			2.29			-1.86			—			—			72
Year ended 3-31-2009		6.56		-31.01			103			2.34			-2.01			—			—			85
Year ended 3-31-2008		9.62		-8.91			187			2.20			-1.62			—			—			79
Class E Shares
Six-month period ended 9-30-2012 (unaudited)		14.82		2.42			3			1.55	(4)		-1.33	(4)		2.08	(4)		-1.86	(4)		16
Year ended 3-31-2012		14.47		-2.05			3			1.56			-1.27			2.08			-1.79			65
Year ended 3-31-2011		15.36		34.97			3			1.56			-1.08			2.17			-1.69			53
Year ended 3-31-2010		11.38		61.19			1			1.56			-1.14			2.69			-2.27			72
Year ended 3-31-2009		7.06		-30.64			1			1.90			-1.57			2.82			-2.49			85
Year ended 3-31-2008(5)		10.29		-9.15			1			2.26	(4)		-1.79	(4)		—			—			79	(6)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		17.43		2.65			128			1.07	(4)		-0.85	(4)		—			—			16
Year ended 3-31-2012		16.98		-1.54			119			1.07			-0.79			—			—			65
Year ended 3-31-2011		17.83		35.69			84			1.07			-0.61			—			—			53
Year ended 3-31-2010		13.14		61.82			8			1.10			-0.68			—			—			72
Year ended 3-31-2009		8.12		-30.12			4			1.09			-0.76			—			—			85
Year ended 3-31-2008(5)		11.73		-6.82			2			1.10	(4)		-0.52	(4)		—			—			79	(6)
Class R Shares
Six-month period ended 9-30-2012 (unaudited)		14.82		2.35			18			1.67	(4)		-1.45	(4)		—			—			16
Year ended 3-31-2012		14.48		-2.11			17			1.66			-1.37			—			—			65
Year ended 3-31-2011		15.38		34.91			15			1.62			-1.16			—			—			53
Year ended 3-31-2010		11.40		61.02			4			1.64			-1.24			—			—			72
Year ended 3-31-2009		7.08		-30.52			—	*		1.63			-1.30			—			—			85
Year ended 3-31-2008		10.30		-8.35			—	*		1.64			-1.10			—			—			79
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		16.92		2.55			206			1.31	(4)		-1.09	(4)		—			—			16
Year ended 3-31-2012		16.50		-1.75			207			1.32			-1.03			—			—			65
Year ended 3-31-2011		17.38		35.25			222			1.33			-0.86			—			—			53
Year ended 3-31-2010		12.85		61.43			124			1.35			-0.92			—			—			72
Year ended 3-31-2009		7.96		-30.30			70			1.34			-1.01			—			—			85
Year ended 3-31-2008		11.53		-8.13			124			1.33			-0.76			—			—			79

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 179

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY SMALL CAP VALUE FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	14.96	$	(0.03	)(3)	$	0.42		$	0.39		$	—		$	—		$	—
Year ended 3-31-2012		18.12		0.00	(3)		(1.69	)		(1.69	)		(0.01	)		(1.46	)		(1.47	)
Year ended 3-31-2011		14.99		0.03	(3)		3.10			3.13			—			—			—
Year ended 3-31-2010		9.87		(0.07	)(3)		5.19			5.12			—			—			—
Year ended 3-31-2009		12.96		(0.06	)		(3.03	)		(3.09	)		—			—			—
Year ended 3-31-2008		16.22		(0.10	)		(2.28	)		(2.38	)		—			(0.88	)		(0.88	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		13.48		(0.10	)(3)		0.37			0.27			—			—			—
Year ended 3-31-2012		16.66		(0.15	)(3)		(1.57	)		(1.72	)		—			(1.46	)		(1.46	)
Year ended 3-31-2011		13.95		(0.15	)(3)		2.86			2.71			—			—			—
Year ended 3-31-2010		9.29		(0.21	)(3)		4.87			4.66			—			—			—
Year ended 3-31-2009		12.34		(0.23	)		(2.82	)		(3.05	)		—			—			—
Year ended 3-31-2008		15.48		(0.35	)		(2.08	)		(2.43	)		—			(0.71	)		(0.71	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		13.92		(0.08	)(3)		0.39			0.31			—			—			—
Year ended 3-31-2012		17.09		(0.10	)(3)		(1.61	)		(1.71	)		—			(1.46	)		(1.46	)
Year ended 3-31-2011		14.25		(0.08	)(3)		2.92			2.84			—			—			—
Year ended 3-31-2010		9.45		(0.16	)(3)		4.96			4.80			—			—			—
Year ended 3-31-2009		12.51		(0.11	)		(2.95	)		(3.06	)		—			—			—
Year ended 3-31-2008		15.69		(0.28	)		(2.14	)		(2.42	)		—			(0.76	)		(0.76	)
Class E Shares(5)
Six-month period ended 9-30-2012 (unaudited)		15.25		0.00	(3)		0.43			0.43			—			—			—
Year ended 3-31-2012		18.43		0.07	(3)		(1.71	)		(1.64	)		(0.08	)		(1.46	)		(1.54	)
Year ended 3-31-2011		15.19		0.10	(3)		3.14			3.24			—			—			—
Year ended 3-31-2010		9.94		(0.01	)(3)		5.26			5.25			—			—			—
Year ended 3-31-2009		12.98		0.01			(3.05	)		(3.04	)		—			—			—
Year ended 3-31-2008(6)		16.23		(0.02	)		(2.30	)		(2.32	)		—			(0.93	)		(0.93	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		15.61		0.01	(3)		0.44			0.45			—			—			—
Year ended 3-31-2012		18.83		0.07	(3)		(1.73	)		(1.66	)		(0.10	)		(1.46	)		(1.56	)
Year ended 3-31-2011		15.49		0.13	(3)		3.21			3.34			—			—			—
Year ended 3-31-2010		10.13		0.00	(3)		5.36			5.36			—			—			—
Year ended 3-31-2009		13.20		0.02	(3)		(3.09	)		(3.07	)		—			—			—
Year ended 3-31-2008(6)		16.43		(0.01	)		(2.26	)		(2.27	)		—			(0.96	)		(0.96	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		15.38		(0.01	)(3)		0.43			0.42			—			—			—
Year ended 3-31-2012		18.58		0.04	(3)		(1.72	)		(1.68	)		(0.06	)		(1.46	)		(1.52	)
Year ended 3-31-2011		15.33		0.08	(3)		3.17			3.25			—			—			—
Year ended 3-31-2010		10.05		(0.02	)(3)		5.30			5.28			—			—			—
Year ended 3-31-2009		13.13		(0.01	)(3)		(3.07	)		(3.08	)		—			—			—
Year ended 3-31-2008		16.42		(0.04	)(3)		(2.32	)		(2.36	)		—			(0.93	)		(0.93	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) Class is closed to investment.

(6) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(7) For the fiscal year ended March 31, 2008.

180 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	15.35		2.54	%	$	203			1.69	%(4)		-0.43	%(4)		31	%
Year ended 3-31-2012		14.96		-8.06			209			1.67			0.00			50
Year ended 3-31-2011		18.12		20.88			254			1.65			0.19			73
Year ended 3-31-2010		14.99		51.87			202			1.77			-0.55			100
Year ended 3-31-2009		9.87		-23.84			106			1.93			-0.54			101
Year ended 3-31-2008		12.96		-15.19			104			1.76			-0.63			118
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		13.75		2.00			4			2.79	(4)		-1.54	(4)		31
Year ended 3-31-2012		13.48		-9.09			4			2.78			-1.09			50
Year ended 3-31-2011		16.66		19.43			6			2.85			-1.07			73
Year ended 3-31-2010		13.95		50.16			7			2.99			-1.77			100
Year ended 3-31-2009		9.29		-24.72			4			3.04			-1.67			101
Year ended 3-31-2008		12.34		-16.14			5			2.83			-1.69			118
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		14.23		2.23			14			2.38	(4)		-1.13	(4)		31
Year ended 3-31-2012		13.92		-8.80			16			2.40			-0.72			50
Year ended 3-31-2011		17.09		19.93			19			2.42			-0.57			73
Year ended 3-31-2010		14.25		50.79			14			2.55			-1.33			100
Year ended 3-31-2009		9.45		-24.46			6			2.72			-1.34			101
Year ended 3-31-2008		12.51		-15.91			8			2.54			-1.40			118
Class E Shares(5)
Six-month period ended 9-30-2012 (unaudited)		15.68		2.82			—	*		1.23	(4)		0.02	(4)		31
Year ended 3-31-2012		15.25		-7.68			—	*		1.23			0.44			50
Year ended 3-31-2011		18.43		21.33			—	*		1.24			0.61			73
Year ended 3-31-2010		15.19		52.82			—	*		1.27			-0.05			100
Year ended 3-31-2009		9.94		-23.42			—	*		1.30			0.07			101
Year ended 3-31-2008(6)		12.98		-14.82			—	*		1.26	(4)		-0.14	(4)		118	(7)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		16.06		2.88			16			1.12	(4)		0.13	(4)		31
Year ended 3-31-2012		15.61		-7.59			16			1.11			0.48			50
Year ended 3-31-2011		18.83		21.56			4			1.12			0.78			73
Year ended 3-31-2010		15.49		52.91			2			1.18			0.04			100
Year ended 3-31-2009		10.13		-23.26			1			1.18			0.20			101
Year ended 3-31-2008(6)		13.20		-14.39			—	*		1.19	(4)		-0.07	(4)		118	(7)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		15.80		2.73			21			1.39	(4)		-0.14	(4)		31
Year ended 3-31-2012		15.38		-7.87			22			1.39			0.28			50
Year ended 3-31-2011		18.58		21.20			26			1.39			0.47			73
Year ended 3-31-2010		15.33		52.54			19			1.40			-0.17			100
Year ended 3-31-2009		10.05		-23.46			8			1.42			-0.06			101
Year ended 3-31-2008		13.13		-14.89			14			1.39			-0.25			118

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 181

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY TAX-MANAGED EQUITY FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income		Distributions From Net Realized Gains		Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	13.15	$	0.00	(3)	$	(0.07	)	$	(0.07	)	$	—	$	—	$	—
Year ended 3-31-2012		12.15		(0.03	)(3)		1.03			1.00			—		—		—
Year ended 3-31-2011		10.78		(0.10	)(3)		1.47			1.37			—		—		—
Year ended 3-31-2010(5)		8.62		(0.11	)(3)		2.27			2.16			—		—		—
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		12.92		(0.03	)(3)		(0.07	)		(0.10	)		—		—		—
Year ended 3-31-2012		12.01		(0.10	)(3)		1.01			0.91			—		—		—
Year ended 3-31-2011		10.72		(0.17	)(3)		1.46			1.29			—		—		—
Year ended 3-31-2010(5)		8.62		(0.15	)(3)		2.25			2.10			—		—		—
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		12.91		(0.04	)(3)		(0.06	)		(0.10	)		—		—		—
Year ended 3-31-2012		12.01		(0.11	)(3)		1.01			0.90			—		—		—
Year ended 3-31-2011		10.72		(0.17	)(3)		1.46			1.29			—		—		—
Year ended 3-31-2010(5)		8.62		(0.15	)(3)		2.25			2.10			—		—		—
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		13.27		0.02	(3)		(0.14	)		(0.12	)		—		—		—
Year ended 3-31-2012		12.22		0.00	(3)		1.05			1.05			—		—		—
Year ended 3-31-2011		10.81		(0.08	)(3)		1.49			1.41			—		—		—
Year ended 3-31-2010(6)		8.62		(0.07	)(3)		2.26			2.19			—		—		—
Period ended 5-17-2009(7)		11.51		(0.07	)(3)		(2.82	)		(2.89	)		—		—		—
Year ended 6-30-2008(7)		11.00		(0.12	)		0.63			0.51			—		—		—
Year ended 6-30-2007(7)		9.32		(0.02	)		1.70			1.68			—		—		—
Year ended 6-30-2006(7)		8.76		(0.05	)(3)		0.61			0.56			—		—		—
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		13.16		0.01	(3)		(0.07	)		(0.06	)		—		—		—
Year ended 3-31-2012		12.15		(0.02	)(3)		1.03			1.01			—		—		—
Year ended 3-31-2011		10.78		(0.10	)(3)		1.47			1.37			—		—		—
Year ended 3-31-2010(5)		8.62		(0.07	)(3)		2.23			2.16			—		—		—

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) For the period from May 18, 2009 (commencement of operations of the class) through March 31, 2010.

(6) The Ivy Tax-Managed Equity Fund commenced operations on May 18, 2009 after the reorganization of the Class Y shares of Waddell & Reed Advisors Tax-Managed Equity Fund into Class I shares of the Fund. The information shown is for a share outstanding during the fiscal period from May 18, 2009 through March 31, 2010 for Ivy Tax-Managed Equity Fund.

(7) The information shown is for a share outstanding during the fiscal year or period ended for Class Y of the Waddell & Reed Advisors Tax-Managed Equity Fund prior to the reorganization.

(8) The return shown for Class Y is hypothetical because there were no shares or assets for the period from July 28, 2009 through October 7, 2009. Class A data has been substituted for Class Y data during that period.

182 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Loss to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	13.08		-0.53	%	$	17			1.06	%(4)		0.00	%(4)		1.71	%(4)		-0.65	%(4)		11	%
Year ended 3-31-2012		13.15		8.23			15			1.32			-0.27			1.97			-0.92			26
Year ended 3-31-2011		12.15		12.71			9			2.10			-0.93			2.75			-1.58			41
Year ended 3-31-2010(5)		10.78		25.06			3			2.57	(4)		-1.26	(4)		4.33	(4)		-3.02	(4)		19
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		12.82		-0.77			1			1.60	(4)		-0.55	(4)		2.25	(4)		-1.20	(4)		11
Year ended 3-31-2012		12.92		7.58			1			1.90			-0.85			2.55			-1.50			26
Year ended 3-31-2011		12.01		12.03			1			2.74			-1.56			3.39			-2.21			41
Year ended 3-31-2010(5)		10.72		24.36			—	*		3.12	(4)		-1.81	(4)		4.88	(4)		-3.57	(4)		19
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		12.81		-0.78			1			1.68	(4)		-0.62	(4)		2.33	(4)		-1.27	(4)		11
Year ended 3-31-2012		12.91		7.49			1			1.97			-0.92			2.62			-1.57			26
Year ended 3-31-2011		12.01		12.03			1			2.75			-1.57			3.40			-2.22			41
Year ended 3-31-2010(5)		10.72		24.36			1			3.13	(4)		-1.82	(4)		4.89	(4)		-3.58	(4)		19
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		13.15		-0.90			1			0.73	(4)		0.35	(4)		1.38	(4)		-0.30	(4)		11
Year ended 3-31-2012		13.27		8.59			1			1.02			0.03			1.67			-0.62			26
Year ended 3-31-2011		12.22		13.04			1			1.87			-0.70			2.52			-1.35			41
Year ended 3-31-2010(6)		10.81		25.41			1			2.11	(4)		-0.82	(4)		4.03	(4)		-2.74	(4)		19
Period ended 5-17-2009(7)		8.62		-25.11			—	*		2.42	(4)		-1.05	(4)		—			—			40
Year ended 6-30-2008(7)		11.51		4.64			—	*		2.11			-0.97			—			—			27
Year ended 6-30-2007(7)		11.00		18.03			—	*		1.24			-0.23			—			—			55
Year ended 6-30-2006(7)		9.32		6.39			—	*		1.30			-0.60			—			—			100
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		13.10		-0.46			1			0.98	(4)		0.08	(4)		1.63	(4)		-0.57	(4)		11
Year ended 3-31-2012		13.16		8.31			1			1.25			-0.17			1.90			-0.82			26
Year ended 3-31-2011		12.15		12.71			1			2.09			-0.91			2.74			-1.56			41
Year ended 3-31-2010(5)		10.78		25.06	(8)		—	*		2.52	(4)		-1.11	(4)		4.28	(4)		-2.87	(4)		19

See Accompanying Notes to Financial Statements.

2012 SEMIANNUAL REPORT 183

FINANCIAL HIGHLIGHTS

Ivy Funds FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD

IVY VALUE FUND

	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investments			Total from Investment Operations			Distributions From Net Investment Income			Distributions From Net Realized Gains			Distributions From Return of Capital			Total Distributions
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	17.57	$	0.04	(3)	$	0.10		$	0.14		$	(0.08	)	$	—		$	—		$	(0.08	)
Year ended 3-31-2012		17.93		0.13	(3)		(0.19	)		(0.06	)		(0.12	)		(0.18	)		—			(0.30	)
Year ended 3-31-2011		15.56		(0.02	)(3)		2.39			2.37			—			—			—			—
Year ended 3-31-2010		9.94		0.02	(3)		5.65			5.67			(0.03	)		—			(0.02	)		(0.05	)
Year ended 3-31-2009		15.95		0.13			(6.03	)		(5.90	)		(0.11	)		—			—			(0.11	)
Year ended 3-31-2008		19.04		0.12			(1.85	)		(1.73	)		(0.12	)		(1.24	)		—			(1.36	)
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		16.72		(0.05	)(3)		0.10			0.05			—			—			—			—
Year ended 3-31-2012		17.15		(0.07	)(3)		(0.18	)		(0.25	)		—			(0.18	)		—			(0.18	)
Year ended 3-31-2011		15.12		(0.25	)(3)		2.28			2.03			—			—			—			—
Year ended 3-31-2010		9.78		(0.17	)(3)		5.51			5.34			—			—			—			—
Year ended 3-31-2009		15.76		(0.10	)		(5.88	)		(5.98	)		—			—			—			—
Year ended 3-31-2008		18.83		(0.09	)		(1.80	)		(1.89	)		—			(1.18	)		—			(1.18	)
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		17.16		(0.02	)(3)		0.11			0.09			(0.05	)		—			—			(0.05	)
Year ended 3-31-2012		17.53		0.00	(3)		(0.17	)		(0.17	)		(0.02	)		(0.18	)		—			(0.20	)
Year ended 3-31-2011		15.34		(0.14	)(3)		2.33			2.19			—			—			—			—
Year ended 3-31-2010		9.86		(0.08	)(3)		5.56			5.48			—			—			—			—
Year ended 3-31-2009		15.83		0.00	(3)		(5.97	)		(5.97	)		—			—			—			—
Year ended 3-31-2008		18.90		(0.06	)		(1.81	)		(1.87	)		—			(1.20	)		—			(1.20	)
Class E Shares(5)
Six-month period ended 9-30-2012 (unaudited)		17.61		0.07	(3)		0.11			0.18			(0.11	)		—			—			(0.11	)
Year ended 3-31-2012		18.03		0.18	(3)		(0.19	)		(0.01	)		(0.23	)		(0.18	)		—			(0.41	)
Year ended 3-31-2011		15.60		0.04	(3)		2.39			2.43			—			—			—			—
Year ended 3-31-2010		9.95		0.06	(3)		5.70			5.76			(0.06	)		—			(0.05	)		(0.11	)
Year ended 3-31-2009		15.97		0.20			(6.04	)		(5.84	)		(0.18	)		—			—			(0.18	)
Year ended 3-31-2008(6)		19.09		0.18			(1.90	)		(1.72	)		(0.16	)		(1.24	)		—			(1.40	)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		17.61		0.08	(3)		0.10			0.18			(0.12	)		—			—			(0.12	)
Year ended 3-31-2012		18.05		0.21	(3)		(0.20	)		0.01			(0.27	)		(0.18	)		—			(0.45	)
Year ended 3-31-2011		15.60		0.08	(3)		2.37			2.45			—			—			—			—
Year ended 3-31-2010		9.95		0.06	(3)		5.71			5.77			(0.06	)		—			(0.06	)		(0.12	)
Year ended 3-31-2009		15.97		0.22			(6.04	)		(5.82	)		(0.20	)		—			—			(0.20	)
Year ended 3-31-2008(6)		19.10		0.20			(1.90	)		(1.70	)		(0.19	)		(1.24	)		—			(1.43	)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		17.59		0.06	(3)		0.11			0.17			(0.10	)		—			—			(0.10	)
Year ended 3-31-2012		17.99		0.14	(3)		(0.17	)		(0.03	)		(0.19	)		(0.18	)		—			(0.37	)
Year ended 3-31-2011		15.58		0.02	(3)		2.39			2.41			—			—			—			—
Year ended 3-31-2010		9.95		0.04	(3)		5.67			5.71			(0.04	)		—			(0.04	)		(0.08	)
Year ended 3-31-2009		15.96		0.26			(6.11	)		(5.85	)		(0.16	)		—			—			(0.16	)
Year ended 3-31-2008		19.04		0.16	(3)		(1.85	)		(1.69	)		(0.15	)		(1.24	)		—			(1.39	)

* Not shown due to rounding.

(1) Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods less than one year are not annualized.

(2) Ratios excluding expense waivers are included only for periods in which the class had waived or reimbursed expenses.

(3) Based on average weekly shares outstanding.

(4) Annualized.

(5) Class is closed to investment.

(6) For the period from April 2, 2007 (commencement of operations of the class) through March 31, 2008.

(7) For the fiscal year ended March 31, 2008.

184 SEMIANNUAL REPORT 2012

	Net Asset Value, End of Period		Total Return(1)			Net Assets, End of Period (in millions)			Ratio of Expenses to Average Net Assets Including Expense Waiver			Ratio of Net Investment Income (Loss) to Average Net Assets Including Expense Waiver			Ratio of Expenses to Average Net Assets Excluding Expense Waiver(2)			Ratio of Net Investment Loss to Average Net Assets Excluding Expense Waiver(2)			Portfolio Turnover Rate
Class A Shares
Six-month period ended 9-30-2012 (unaudited)	$	17.63		0.84	%	$	109			1.47	%(4)		0.49	%(4)		—	%		—	%		38	%
Year ended 3-31-2012		17.57		-0.13			106			1.53			0.77			—			—			54
Year ended 3-31-2011		17.93		15.23			87			1.59			-0.12			1.66			-0.19			40
Year ended 3-31-2010		15.56		57.09			56			1.85			0.26			—			—			77
Year ended 3-31-2009		9.94		-37.09			34			1.79			0.98			—			—			57
Year ended 3-31-2008		15.95		-9.83			57			1.52			0.63			—			—			66
Class B Shares
Six-month period ended 9-30-2012 (unaudited)		16.77		0.30			3			2.57	(4)		-0.60	(4)		—			—			38
Year ended 3-31-2012		16.72		-1.34			3			2.78			-0.47			—			—			54
Year ended 3-31-2011		17.15		13.43			3			3.12			-1.66			—			—			40
Year ended 3-31-2010		15.12		54.60			3			3.40			-1.28			—			—			77
Year ended 3-31-2009		9.78		-37.94			2			3.08			-0.35			—			—			57
Year ended 3-31-2008		15.76		-10.72			4			2.51			-0.35			—			—			66
Class C Shares
Six-month period ended 9-30-2012 (unaudited)		17.20		0.52			8			2.19	(4)		-0.22	(4)		—			—			38
Year ended 3-31-2012		17.16		-0.85			8			2.25			0.02			—			—			54
Year ended 3-31-2011		17.53		14.28			8			2.40			-0.92			—			—			40
Year ended 3-31-2010		15.34		55.58			5			2.70			-0.63			—			—			77
Year ended 3-31-2009		9.86		-37.71			2			2.79			0.01			—			—			57
Year ended 3-31-2008		15.83		-10.56			4			2.41			-0.25			—			—			66
Class E Shares(5)
Six-month period ended 9-30-2012 (unaudited)		17.68		1.06			—	*		1.15	(4)		0.81	(4)		—			—			38
Year ended 3-31-2012		17.61		0.26			—	*		1.18			1.08			—			—			54
Year ended 3-31-2011		18.03		15.58			—	*		1.24			0.22			—			—			40
Year ended 3-31-2010		15.60		58.05			—	*		1.29			0.82			—			—			77
Year ended 3-31-2009		9.95		-36.75			—	*		1.25			1.52			—			—			57
Year ended 3-31-2008(6)		15.97		-9.76			—	*		1.18	(4)		0.98	(4)		—			—			66	(7)
Class I Shares
Six-month period ended 9-30-2012 (unaudited)		17.67		1.06			2			1.03	(4)		0.96	(4)		—			—			38
Year ended 3-31-2012		17.61		0.38			3			1.06			1.25			—			—			54
Year ended 3-31-2011		18.05		15.71			2			1.12			0.47			—			—			40
Year ended 3-31-2010		15.60		58.20			—	*		1.15			0.87			—			—			77
Year ended 3-31-2009		9.95		-36.67			—	*		1.11			1.66			—			—			57
Year ended 3-31-2008(6)		15.97		-9.63			—	*		1.07	(4)		1.09	(4)		—			—			66	(7)
Class Y Shares
Six-month period ended 9-30-2012 (unaudited)		17.66		1.00			2			1.28	(4)		0.68	(4)		—			—			38
Year ended 3-31-2012		17.59		0.09			2			1.31			0.86			—			—			54
Year ended 3-31-2011		17.99		15.47			2			1.37			0.11			—			—			40
Year ended 3-31-2010		15.58		57.52			1			1.54			0.57			—			—			77
Year ended 3-31-2009		9.95		-36.80			—	*		1.40			1.41			—			—			57
Year ended 3-31-2008		15.96		-9.60			—	*		1.31			0.85			—			—			66

See Accompanying Notes to Financial Statements.

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NOTES TO FINANCIAL STATEMENTS

Ivy Funds SEPTEMBER 30, 2012 (UNAUDITED)

1. ORGANIZATION

Ivy Funds, a Delaware statutory trust (the Trust), is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. Ivy Bond Fund, Ivy Core Equity Fund, Ivy Cundill Global Value Fund, Ivy Dividend Opportunities Fund, Ivy European Opportunities Fund, Ivy Global Bond Fund, Ivy Global Equity Income Fund, Ivy Global Income Allocation Fund, Ivy High Income Fund, Ivy International Core Equity Fund, Ivy International Growth Fund, Ivy Large Cap Growth Fund, Ivy Limited-Term Bond Fund, Ivy Managed European/Pacific Fund, Ivy Managed International Opportunities Fund, Ivy Micro Cap Growth Fund, Ivy Mid Cap Growth Fund, Ivy Money Market Fund, Ivy Municipal Bond Fund, Ivy Municipal High Income Fund, Ivy Pacific Opportunities Fund, Ivy Small Cap Growth Fund, Ivy Small Cap Value Fund, Ivy Tax-Managed Equity Fund and Ivy Value Fund (each, a Fund) are 25 series of the Trust and are the only series of the Trust included in these financial statements. The investment objective(s), policies and risk factors of each Fund are described more fully in the Funds’ Prospectus and Statement of Additional Information. Each Fund’s investment manager is Ivy Investment Management Company (IICO or the Manager).

Each Fund offers Class A, Class B and Class C shares. Certain Funds may also offer Class E, Class I, Class R and/or Class Y shares. Class A and Class E shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B and Class C shares are sold without a front-end sales charge, but may be subject to a contingent deferred sales charge (CDSC). Class I, Class R and Class Y shares are sold without either a front-end sales charge or a CDSC. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Net investment income, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer agent and shareholder servicing fees, directly attributable to that class. Class A, B, C, E, R and Y have a distribution and service plan. Class I shares are not included in the plan. Class B shares will automatically convert to Class A shares 96 months after the date of purchase.

2. SIGNIFICANT ACCOUNTING POLICIES

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

Security Transactions and Related Investment Income. Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses are calculated on the identified cost basis. Interest income is recorded on the accrual basis and includes paydown gain (loss) and accretion of discounts and amortization of premiums. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. All or a portion of the distributions received from a real estate investment trust or publicly traded partnership may be designated as a reduction of cost of the related investment and/or realized gain.

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

Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class.

It is the policy of each Fund to distribute all of its taxable income and capital gains to its shareholders and otherwise qualify as a regulated investment company under Subchapter M of the Internal Revenue Code. In addition, each Fund intends to pay distributions as required to avoid imposition of excise tax. Accordingly, no provision has been made for Federal income taxes. Management of the Trust periodically reviews all tax positions to assess that it is more likely than not that the position would be sustained upon examination by the relevant tax authority based on the technical merits of each position. As of and for the period ended September 30, 2012, management believes that no liability for unrecognized tax positions is required. The Funds are subject to examination by U.S. federal and state authorities for returns filed for tax years after 2007.

Dividends and Distributions to Shareholders. Dividends and distributions to shareholders are recorded by each Fund on the business day following record date. Net investment income dividends and capital gains distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. If the total dividends and distributions made in any tax year exceeds net investment income and accumulated realized capital gains, a portion of the total distribution may be treated as a tax return of capital.

Segregation and Collateralization. In cases in which the 1940 Act and the interpretive positions of the Securities and Exchange Commission (SEC) require that a Fund either deliver collateral or segregate assets in connection with certain investments (e.g., dollar rolls, financial futures contracts, foreign currency exchange contracts, options written, securities with extended settlement periods and swaps), the Fund will segregate collateral or designate on its books and records cash or other liquid securities having a market value at least equal to the amount that is required to be physically segregated for the benefit of the counterparty. Furthermore, based on requirements and agreements with certain exchanges and third party

186 SEMIANNUAL REPORT 2012

broker-dealers, each party has requirements to deliver/deposit cash or securities as collateral for certain investments. Certain countries require that cash reserves be held while investing in companies incorporated in that country. These cash reserves and cash collateral that has been pledged to cover obligations of the Funds under derivative contracts, if any, will be reported separately on the Statements of Assets and Liabilities as “Restricted cash.” Securities collateral pledged for the same purpose, if any, is noted in the Schedule of Investments.

Concentration of Market and Credit Risk. In the normal course of business, the Funds invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations (issuer credit risk). The value of securities held by the Funds may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Funds; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to issuer credit risk, the Funds may be exposed to counterparty credit risk, or the risk that an entity with which the Funds have unsettled or open transactions may fail to or be unable to perform on its commitments. The Funds manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Funds’ Statement of Assets and Liabilities, less any collateral held by the Funds.

Certain Funds may hold high-yield and/or non-investment-grade bonds, which may be subject to a greater degree of credit risk. Credit risk relates to the ability of the issuer to meet interest or principal payments or both as they become due. The Funds may acquire securities in default and are not obligated to dispose of securities whose issuers subsequently default.

Certain Funds may enter into financial instrument transactions (such as swaps, futures, options and other derivatives) that may have off-balance sheet market risk. Off-balance sheet market risk exists when the maximum potential loss on a particular financial instrument is greater than the value of such financial instrument, as reflected in the Statement of Assets and Liabilities.

If a Fund invests directly in foreign currencies or in securities that trade in, and receive revenues in, foreign currencies, or in financial derivatives that provide exposure to foreign currencies, it will be subject to the risk that those currencies will decline in value relative to the base currency of the Fund, or, in the case of hedging positions, that the Fund’s base currency will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the United States or abroad.

Refer to prospectus for all risks associated with owning shares in the Funds.

Inflation-Indexed Bonds. Certain Funds may invest in inflation-indexed bonds. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted to the rate of inflation. The interest rate on these bonds is generally fixed at issuance at a rate lower than typical bonds. Over the life of an inflation-indexed bond, however, interest will be paid based on a principal value, which is adjusted for inflation. Any increase or decrease in the principal amount of an inflation-indexed bond will be included as interest income on the Statement of Operations, even though investors do not receive their principal until maturity.

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

Payment In-Kind Securities. Certain Funds may invest in payment in-kind securities. Payment in-kind securities (“PIKs”) give the issuer the option at each interest payment date of making interest payments in either cash or additional debt securities. Those additional debt securities usually have the same terms, including maturity dates and interest rates, and associated risks as the original bonds. The daily market quotations of the original bonds may include the accrued interest (referred to as a dirty price) and require a pro-rata adjustment from the unrealized appreciation or depreciation on investments to interest receivable on the Statement of Assets and Liabilities.

Securities on a When-Issued or Delayed Delivery Basis. Certain Funds may purchase securities on a “when-issued” basis, and may purchase or sell securities on a “delayed delivery” basis. “When-issued” or “delayed delivery” refers to securities whose terms and indenture are available and for which a market exists, but which are not available for immediate delivery. Delivery and payment for securities that have been purchased by a Fund on a when-issued basis normally take place within six months and possibly as long as two years or more after the trade date. During this period, such securities do not earn interest, are subject to market fluctuation and may increase or decrease in value prior to their delivery. The purchase of securities on a when-issued basis may increase the volatility of a Fund’s net asset value to the extent the Fund executes such transactions while remaining substantially fully invested. When a Fund engages in when-issued or delayed delivery transactions, it relies on the buyer or seller, as the case may be, to complete the transaction. Their failure to do so may cause the Fund to lose the opportunity to obtain or dispose of the security at a price and yield IICO, or the Fund’s investment subadviser, as applicable, consider advantageous.

The Fund maintains internally designated assets with a market value equal to or greater than the amount of its purchase commitments. The Fund may also sell securities that it purchased on a when-issued or delayed delivery basis prior to settlement of the original purchase.

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

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Certain senior loans contain provisions that obligate a Fund to fund future commitments at the borrower’s discretion. See Note 10 in the Notes to the Financial Statements for more information regarding commitments.

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

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

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

New Accounting Pronouncements. In December 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) to enhance disclosures requiring improved information about financial instruments and derivative instruments that are subject to offsetting (“netting”) on the Statements of Assets and Liabilities. This information will enable users of the entity’s financial statements to evaluate the effect or potential effect of netting arrangements on the entity’s financial position. The ASU is effective prospectively during interim or annual periods beginning on or after January 1, 2013. At this time, management is evaluating the implications of these changes on the financial statements.

Estimates. 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.

Subsequent Events. Management has performed a review for subsequent events through the date this report was issued.

3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Each Fund’s investments are reported at fair value. Fair value is defined as the price that each Fund would receive upon selling an asset or would pay upon satisfying a liability in an orderly transaction between market participants at the measurement date. Each Fund calculates the net asset value of its shares as of the close of the NYSE, normally 4:00 P.M. Eastern time, on each day the NYSE is open for trading.

Equity securities traded on U.S. or foreign securities exchanges or included in a national market system are valued at the official closing price at the close of each business day unless otherwise stated below. Over-the-counter (OTC) equity securities and listed securities for which no price is readily available are valued at the average of the last bid and asked prices.

Security prices for fixed-income securities are typically based on quotes that are obtained from an independent pricing service authorized by the Board. To determine values of fixed-income securities, the independent pricing service utilizes such factors as current quotations by broker/dealers, coupon, maturity, quality, type of issue, trading characteristics, and other yield and risk factors it deems relevant in determining valuations. Securities that cannot be valued by the independent pricing service may be valued using quotes obtained from dealers that make markets in the securities.

Precious metals are valued at the last traded spot price prior to the close of the NYSE.

Listed options are ordinarily valued at the mean of the last bid and ask price provided by an independent pricing service unless the price is unavailable, in which case they are valued at a quotation obtained from a broker-dealer. OTC options are ordinarily valued at the mean of the last bid and ask price provided by an independent pricing service for a comparable listed option unless such a price is unavailable, in which case they are valued at a quotation obtained from a broker-dealer. If no comparable listed option exists from which to obtain a price from an independent pricing service and a quotation cannot be obtained from a broker-dealer, the OTC option will be valued using a model reasonably designed to provide a current market price. Swaps are valued by an independent pricing service unless the price is unavailable, in which case they are valued at the price provided by a dealer in that security. Futures contracts traded on an exchange are generally valued at the settlement price. Mutual funds, including investment funds, typically are valued at the net asset value reported as of the valuation date.

Forward foreign currency contracts are valued based upon the closing prices of the forward currency rates determined at the close of the NYSE.

Senior loans are valued using a price or composite price from one or more brokers or dealers as obtained from an independent pricing service.

Short-term securities with maturities of 60 days or less are valued on the basis of amortized cost (which approximates market value), whereby a portfolio security is valued at its cost initially, and thereafter valued to reflect a constant amortization to maturity of any discount or premium.

Because many foreign markets close before the NYSE, events may occur between the close of the foreign market and the close of the NYSE that could have a material impact on the valuation of foreign securities. IICO, pursuant to procedures adopted by the Board, evaluates the impact of these events

188 SEMIANNUAL REPORT 2012

and may adjust the valuation of foreign securities to reflect the fair value as of the close of the NYSE. In addition, all securities for which market values are not readily available or are deemed unreliable are appraised at fair value as determined in good faith under the supervision of the Board.

Accounting standards establish a framework for measuring fair value and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the factors that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

An individual investment’s fair value measurement is assigned a level based upon the observability of the inputs which are significant to the overall valuation.

The three-tier hierarchy of inputs is summarized as follows:

Level 1 – Observable input such as quoted prices, available in active markets, for identical assets or liabilities.

Level 2 – Significant other observable inputs, which may include, but are not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs.

Level 3 – Significant unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available, which may include assumptions made by the Board or persons acting at their direction that are used in determining the fair market value of investments.

A description of the valuation techniques applied to the Funds’ major classes of assets and liabilities measured at fair value on a recurring basis follows:

Asset-Backed Securities and Mortgage-Backed Securities. The fair value of asset-backed securities and mortgage- backed securities are estimated using recently executed transactions and based on models that consider the estimated cash flows of each debt tranche of the issuer, establish a benchmark yield, and develop an estimated tranche specific spread to the benchmark yield based on the unique attributes of the tranche including, but not limited to, the prepayment speed assumptions and attributes of the collateral. To the extent the inputs are observable and timely, the values would be categorized in Level 2 of the fair value hierarchy, otherwise they would be categorized as Level 3.

Bank Loans. The fair value of bank loans is estimated using recently executed transactions, market price quotations, credit/market events, and cross-asset pricing. Inputs are generally observable market inputs obtained from independent sources. Bank loans are generally categorized in Level 2 of the fair value hierarchy, unless key inputs are unobservable in which case they would then be in Level 3.

Bullion. The fair value of bullion is at the last settlement price at the end of each day on the board of trade or exchange upon which they are traded and are categorized in Level 1 of the fair value hierarchy.

Corporate Bonds. The fair value of corporate bonds is estimated using various techniques, which consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, fundamental data relating to the issuer, and credit default swap spreads adjusted for any basis difference between cash and derivative instruments. While most corporate bonds are categorized in Level 2 of the fair value hierarchy, in instances where lower relative weight is placed on transaction prices, quotations, or similar observable inputs, they are categorized in Level 3 of the fair value hierarchy.

Derivative Instruments. Listed derivatives that are actively traded are valued based on quoted prices from the exchange and are categorized in Level 1 of the fair value hierarchy. OTC derivative contracts include forward foreign currency contracts, swap agreements, and option contracts related to interest rates, foreign currencies, credit standing of reference entities, equity prices, or commodity prices. Depending on the product and the terms of the transaction, the fair value of the OTC derivative products are modeled taking into account the counterparties’ creditworthiness and using a series of techniques, including simulation models. Many pricing models do not entail material subjectivity because the methodologies employed do not necessitate significant judgments and the pricing inputs are observed from actively quoted markets, as is the case with interest rate swap and option contracts. A substantial majority of OTC derivative products valued by the Funds using pricing models fall into this category and are categorized within Level 2 of the fair value hierarchy.

Equity Securities. Securities are stated at the last reported sales price or closing price on the day of valuation taken from the primary exchange where the security is principally traded. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy.

Foreign securities, for which the primary trading market closes at the same time or after the NYSE, are valued based on quotations from the primary market in which they are traded and categorized in Level 1. Because many foreign securities markets and exchanges close prior to the close of the NYSE, closing prices for foreign securities in those markets or on those exchanges do not reflect the events that occur after that close. Certain foreign securities may be fair valued using a pricing service that considers the correlation of the trading patterns of the foreign security to the intra-day trading in the U.S. markets for investments such as American Depositary Receipts, financial futures, Exchange Traded Funds, and the movement of the certain indices of securities based on a statistical analysis of their historical relationship; such valuations generally are categorized in Level 2.

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Preferred stock, repurchase agreements, and other equities traded on inactive markets or valued by reference to similar instruments are also generally categorized in Level 2.

Municipal Bonds. Municipal bonds are fair valued based on pricing models that take into account, among other factors, information received from market makers and broker-dealers, current trades, bid-wants lists, offerings, market movements, the callability of the bond, state of issuance, benchmark yield curves, and bond insurance. To the extent that these inputs are observable and timely, the fair values of municipal bonds would be categorized as Level 2; otherwise the fair values would be categorized as Level 3.

Restricted Securities. Restricted securities that are deemed to be both Rule 144A securities and illiquid, as well as restricted securities held in non-public entities are included in Level 3 of the fair value hierarchy because they trade infrequently, and, therefore, the inputs are unobservable. Restricted securities that are valued at a discount to similar publicly traded securities and may be categorized as Level 2 of the fair value hierarchy to the extent that the discount is considered to be insignificant to the fair value measurement in its entirety; otherwise they may be categorized as Level 3.

U.S. Government and Agency Securities. U.S. government and agency securities are normally valued using a model that incorporates market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers, quoted market prices, and reference data. Accordingly, U.S. government and agency securities are normally categorized in Level 1 or 2 of the fair value hierarchy depending on the liquidity and transparency of the market.

Transfers from Level 2 to Level 3 occurred generally due to the lack of observable market data due to decreased market activity or information for these securities. Transfers from Level 3 to Level 2 occurred generally due to the increased availability of observable market data due to increased market activity or information. Transfers in and out of Level 3 represent the value at the later of the beginning of the period or the purchase date of the security.

There were no transfers between Levels 1, 2, or 3 during the period ended September 30, 2012.

Securities and other assets for which market quotes are not readily available are valued at fair value as determined in good faith by the Board or persons acting at their direction and are categorized as Level 3 of the fair value hierarchy.

Market quotes are considered not readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade information or broker quotes), including where events occur after the close of the relevant market, but prior to the NYSE Close, that materially affect the values of a Fund’s securities or assets. In addition, market quotes are considered not readily available when, due to extraordinary circumstances, the exchanges or markets on which the securities trades do not open for trading for the entire day and no other market prices are available. The Board has delegated to the investment manager, WRIMCO, the responsibility for monitoring significant events that may materially affect the values of a Fund’s securities or assets and for determining whether the value of the applicable securities or assets should be re-evaluated in light of such significant events. The Board has adopted methods for valuing securities and other assets in circumstances where market quotes are not readily available, and has delegated the responsibility for applying the valuation methods to WRIMCO. For instances in which daily market quotes are not readily available, investments may be valued, pursuant to guidelines established by the Board, with reference to other securities or indices. In the event that the security or asset cannot be valued pursuant to one of the valuation methods established by the Board, the value of the security or asset will be determined in good faith by the Valuation Committee of the Board, generally based upon recommendations provided by IICO. When a Fund uses these fair valuation methods applied by IICO that use significant unobservable inputs to determine its NAV, securities will be priced by a method that the Board or persons acting at their direction believe accurately reflects fair value and are categorized as Level 3 of the fair value hierarchy. These methods may require subjective determinations about the value of a security. While the Trust’s policy is intended to result in a calculation of a Fund’s NAV that fairly reflects security values as of the time of pricing, the Trust cannot guarantee that values determined by the Board or persons acting at their direction would accurately reflect the price that a Fund could obtain for a security if it were to dispose of that security as of the time of pricing (for instance, in a forced or distressed sale). The prices used by a Fund may differ from the value that would be realized if the securities were sold.

For fair valuations using unobservable inputs, U.S. GAAP requires a reconciliation of the beginning to ending balances for reported fair values that presents changes attributable to total realized and unrealized gains or losses, purchases and sales, and transfers in or out of the Level 3 category during the period. The end of period timing recognition is used for the transfers between Levels of the Funds’ assets and liabilities. In accordance with the requirements of U.S. GAAP, a fair value hierarchy and Level 3 reconciliation, if any, have been included in the Notes to the Schedule of Investments for each respective Fund.

Net realized gain (loss) and net unrealized appreciation (depreciation), shown on the reconciliation of Level 3 investments if applicable, are included on the Statement of Operations in net realized gain (loss) on investments in unaffiliated securities and in net change in unrealized appreciation (depreciation) on investments in unaffiliated securities, respectively. Additionally, the net change in unrealized appreciation for all Level 3 investments still held as of September 30, 2012, if applicable, is included on the Statement of Operations in net change in unrealized appreciation (depreciation) on investments in unaffiliated securities.

The Funds may own different types of assets that are classified as Level 2 or Level 3. Assets classified as Level 2 can have a variety of observable inputs, including, but not limited to, benchmark yields, reported trades, broker quotes, benchmark securities, and bid/offer quotations. These observable inputs are collected and utilized, primarily by an independent pricing service, in different evaluated pricing approaches depending upon the specific asset to determine a value.

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3. DERIVATIVE INSTRUMENTS ($ amounts in thousands unless indicated otherwise)

The following disclosures contain information on why and how the Funds use derivative instruments, the associated risks of investing in derivative instruments, and how derivative instruments affect the Funds’ financial position and results of operations when presented by primary underlying risk exposure. Please see the prospectus for a full discussion of risks of investing in derivative instruments.

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

Risks to a Fund related to the use of such contracts include both market and credit risk. Market risk is the risk that the value of the forward contract will depreciate due to unfavorable changes in the exchange rates. Credit risk arises from the possibility that the counterparty will default. If the counterparty defaults, a Fund’s maximum loss will consist of the aggregate unrealized gain on appreciated contracts that is not collateralized.

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

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

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

Option Contracts. 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 a 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. When an option expires on its stipulated expiration date or a 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 a Fund has realized a gain or loss. For each Fund, when a written put is exercised, the cost basis of the securities purchased by a Fund is reduced by the amount of the premium received.

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

Swap Agreements. Certain Funds may invest in swap agreements.

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

The creditworthiness of firms with which a Fund enters into a swap agreement is monitored by IICO. If a firm’s creditworthiness declines, the value of the agreement would likely decline, potentially resulting in losses. If a default occurs by the counterparty to such a transaction, the Fund will have contractual remedies pursuant to the agreement related to the transaction. The maximum loss a Fund may incur consists of the aggregate unrealized gain on appreciated contracts that is not collateralized.

2012 SEMIANNUAL REPORT 191

Collateral. A Fund may mitigate credit risk through Credit Support Annexes (“CSA”) included with an International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreement, which is the standard contract governing most derivative transactions between the Fund and each of its counterparties. The CSA allows the Fund and its counterparty to offset certain derivative financial instruments’ payables and/or receivables with collateral, which is generally held by the Fund’s custodian. The amount of collateral moved to/from applicable counterparties is based upon minimum transfer amounts specified in the CSA. To the extent amounts due to the Fund from its counterparties are not fully collateralized contractually or otherwise, the Fund bears the risk of loss from counterparty non-performance. See Note 2 “Segregation and Collateralization” for additional information with respect to collateral practices.

Additional Disclosure Related to Derivative Instruments

Fair values of derivative instruments as of September 30, 2012:

		Assets			Liabilities
Fund	Type of Risk Exposure	Statement of Assets & Liabilities Location	Value		Statement of Assets & Liabilities Location	Value
Ivy Bond Fund	Interest rate				Unrealized depreciation on futures contracts*		$15
Ivy Cundill Global Value Fund	Foreign currency	Unrealized appreciation on forward foreign currency contracts		$6	Unrealized depreciation on forward foreign currency contracts		313
Ivy European Opportunities Fund	Equity	Investments in unaffiliated securities at market value**		82	Written options at market value		10
Ivy Global Bond Fund	Foreign currency	Unrealized appreciation on forward foreign currency contracts		70	Unrealized depreciation on forward foreign currency contracts		17
Ivy High Income Fund	Foreign currency	Unrealized appreciation on forward foreign currency contracts		6,181	Unrealized depreciation on forward foreign currency contracts		850
Ivy International Core Equity Fund	Foreign currency	Unrealized appreciation on forward foreign currency contracts		503	Unrealized depreciation on forward foreign currency contracts		376
Ivy International Growth Fund	Equity				Unrealized depreciation on swap agreements		77
	Foreign currency	Unrealized appreciation on forward foreign currency contracts		498
Ivy Mid Cap Growth Fund	Equity				Written options at market value		10,299
Ivy Pacific Opportunities Fund	Equity				Unrealized depreciation on swap agreements		50
	Equity				Written options at market value		187
Ivy Value Fund	Equity				Written options at market value		105

* The fair value presented includes cumulative gain (loss) on open futures contracts; however, the value reflected in the accompanying Statements of Assets and Liabilities is only the unsettled variation margin receivable (payable) as of September 30, 2012.

**Purchased options are reported as investments in unaffiliated securities and are reflected in the accompanying Schedule of Investments.

Amount of realized gain (loss) on derivatives recognized in the Statement of Operations for the period ended September 30, 2012:

		Net realized gain (loss) on:
Fund	Type of Risk Exposure	Investments in unaffiliated securities*		Swap agreements		Futures contracts		Written options		Forward foreign currency contracts		Total
Ivy Bond Fund	Interest rate		$—		$—		$(979)		$—		$—		$(979)
Ivy Cundill Global Value Fund	Foreign currency		—		—		—		—		(13)		(13)
Ivy Global Bond Fund	Foreign currency		—		—		—		—		(12)		(12)
Ivy Global Income Allocation Fund	Foreign currency		—		—		—		—		1,148		1,148
Ivy High Income Fund	Foreign currency		—		—		—		—		2,160		2,160
Ivy International Core Equity Fund	Foreign currency		—		—		—		—		3,570		3,570
Ivy International Growth Fund	Equity		—		266		—		—		212		478
Ivy Mid Cap Growth Fund	Equity		(5,755)		—		—		(7,734)		—		(13,489)
Ivy Pacific Opportunities Fund	Equity		—		481		—		302		—		783
Ivy Small Cap Growth Fund	Equity		—		189		—		—		—		189
Ivy Value Fund	Equity		451		—		—		270		—		721

*Purchased options are reported as investments in unaffiliated securities and are reflected in the accompanying Schedule of Investments.

192 SEMIANNUAL REPORT 2012

Change in unrealized appreciation (depreciation) on derivatives recognized in the Statement of Operations for the period ended September 30, 2012:

		Net change in unrealized appreciation (depreciation) on:
Fund	Type of Risk Exposure	Investments in unaffiliated securities*			Swap agreements			Futures contracts			Written options		Forward foreign currency contracts			Total
Ivy Bond Fund	Interest rate	$	—		$	—		$	(625	)	$	—	$	—		$	(625	)
Ivy Cundill Global Value Fund	Foreign currency		—			—			—			—		(1,780	)		(1,780	)
Ivy European Opportunities Fund	Equity		(572	)		—			—			169		—			(403	)
Ivy Global Bond Fund	Foreign currency		—			—			—			—		419			419
Ivy Global Income Allocation Fund	Foreign currency		—			—			—			—		(2,189	)		(2,189	)
Ivy High Income Fund	Foreign currency		—			—			—			—		7,036			7,036
Ivy International Core Equity Fund	Foreign currency		—			—			—			—		(10,520	)		(10,520	)
Ivy International Growth Fund	Equity		—			(41	)		—			—		—			(41	)
	Foreign currency		—			—			—			—		(833	)		(833	)
Ivy Mid Cap Growth Fund	Equity		273			—			—			1,661		—			1,934
Ivy Pacific Opportunities Fund	Equity		—			(639	)		—			13		—			(626	)
Ivy Small Cap Growth Fund	Equity		—			(412	)		—			—		—			(412	)
Ivy Value Fund	Equity		—			—			—			3		—			3

*Purchased options are reported as investments in unaffiliated securities and are reflected in the accompanying Schedule of Investments.

During the period ended September 30, 2012, the average derivative volume was as follows:

Fund	Long  forward contracts(1)		Short  forward contracts(1)		Long  futures contracts(1)		Short  futures contracts(1)		Swap agreements(2)		Purchased options(1)		Written options(1)
Ivy Bond Fund	$	—	$	—	$	18,520	$	32,394	$	—	$	—	$	—
Ivy Cundill Global Value Fund		28,025		28,127		—		—		—		—		—
Ivy European Opportunities Fund		—		—		—		—		—		88		20
Ivy Global Bond Fund		14,700		14,844		—		—		—		—		—
Ivy Global Income Allocation Fund		12,431		11,849		—		—		—		—		—
Ivy High Income Fund		300,861		294,626		—		—		—		—		—
Ivy International Core Equity Fund		117,706		115,068		—		—		—		—		—
Ivy International Growth Fund		32,194		31,474		—		—		261		—		—
Ivy Mid Cap Growth Fund		—		—		—		—		—		686		6,749
Ivy Pacific Opportunities Fund				—		—		—		7,470		11		214
Ivy Small Cap Growth Fund		—		—		—		—		11		—		—
Ivy Value Fund		—		—		—		—		—		—		138

(1) Average market value outstanding during the period.

(2) Average notional amount outstanding during the period.

Objectives and Strategies

Ivy Bond Fund. The Fund’s objective in using derivatives during the period was to adjust the overall duration of the portfolio. To achieve this objective, the Fund primarily utilized Treasury futures contracts of varying lengths to either shorten or lengthen the duration of the Fund, as determined by the Fund’s subadvisor.

Ivy Cundill Global Value Fund. The Fund’s objective in using derivatives during the period was to hedge the exposure to foreign currencies of securities held in the Fund. To achieve this objective, the Fund utilized forward contracts.

Ivy European Opportunities Fund. The Fund’s objective in using derivatives during the period was to manage the exposure to various foreign currencies. To achieve this objective, the Fund utilized forward contracts to either increase or decrease exposure to a given currency.

Ivy Global Bond Fund. The Fund’s objective in using derivatives during the period was to manage the exposure to various foreign currencies. To achieve this objective, the Fund utilized forward contracts to either hedge a position held by the Fund, to gain exposure to a currency where a foreign bond is not available, or to take a fundamental position long or short in a particular currency.

Ivy Global Income Allocation Fund. The Fund’s objective in using derivatives during the period was to manage the exposure to various foreign currencies. To achieve this objective, the Fund utilized forward contracts to either increase or decrease exposure to a given currency.

Ivy High Income Fund. The Fund’s objective in using derivatives during the period was to hedge the exposure to foreign currencies of securities held in the Fund. To achieve this objective, the Fund utilized forward contracts.

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

2012 SEMIANNUAL REPORT 193

Ivy International Growth Fund. The Fund’s objectives in using derivatives during the period included managing the exposure to various foreign currencies and gaining exposure to certain individual securities that are not available for direct purchase. To manage foreign currency exposure, the Fund utilized forward contracts to either increase or decrease exposure to a given currency. To gain exposure to certain individual securities, the Fund utilized total return swaps.

Ivy Mid Cap Growth Fund. The Fund’s objectives in using derivatives during the period included gaining exposure to certain sectors, hedging certain event risks on positions held by the Fund and hedging market risk on equity securities. To achieve these objectives, the Fund utilized futures on domestic indices and options, both written and purchased, on either an index or on individual or baskets of equity securities.

Ivy Pacific Opportunities Fund. The Fund’s objectives in using derivatives during the period included managing the exposure to various foreign currencies, hedging certain event risks on positions held by the Fund and gaining exposure to certain individual securities that are not available for direct purchase. To manage foreign currency exposure, the Fund utilized forward contracts to either increase or decrease exposure to a given currency. To hedge event risk, the Fund utilized options, both written and purchased, on individual equity securities. To gain exposure to certain individual securities, the Fund utilized total return swaps.

Ivy Small Cap Growth Fund. The Fund’s objectives in using derivatives during the period included hedging market risk on equity securities and increasing exposure to various equity sectors and markets. To achieve these objectives, the Fund utilized total return swaps, futures on domestic equity indices and options, both written and purchased, on individual equity securities owned by the Fund.

Ivy Value Fund. The Fund’s objectives in using derivatives during the period included generating additional income from written option premiums and gaining exposure to, or facilitate trading in, certain securities. To achieve these objectives, the Fund utilized written options on individual equity securities.

5. WRITTEN OPTION ACTIVITY ($ amounts in thousands)

Transactions in written options were as follows:

Fund	Outstanding at 3-31-12		Options written		Options closed			Options exercised			Options expired			Outstanding at 9-30-12
Ivy European Opportunities Fund
Number of Contracts		—		537		—			—			—			537
Premium Received	$	—	$	180	$	—		$	—		$	—		$	180
Ivy Mid Cap Growth Fund
Number of Contracts		8,710		65,194		(54,424	)		—			(6,528	)		12,952
Premium Received	$	1,731	$	34,644	$	(23,484	)	$	—		$	(1,002	)	$	11,889
Ivy Pacific Opportunities Fund
Number of Contracts		1,605		18,223		(13,018	)		(2,556	)		(3,675	)		579
Premium Received	$	142	$	1,651	$	(906	)	$	(145	)	$	(511	)	$	231
Ivy Value Fund
Number of Contracts		2,609		5,968		(1,718	)		(1,795	)		(2,983	)		2,081
Premium Received	$	159	$	365	$	(91	)	$	(109	)	$	(241	)	$	83

6. INVESTMENT MANAGEMENT AND PAYMENTS TO AFFILIATED PERSONS ($ amounts in thousands unless indicated otherwise)

Management Fees. IICO, a wholly owned subsidiary of Waddell & Reed Financial, Inc. (WDR), serves as each Fund’s investment manager. The management fee is accrued daily by each Fund at the following annual rates as a percentage of average daily net assets:

Fund (M - Millions)	$0 to $250M			$250 to $500M			$500 to $1,000M			$1,000 to $1,500M			$1,500 to $2,000M			$2,000 to $3,000M			$3,000 to $5,000M			$5,000 to $6,000M			Over $6,000M
Ivy Bond Fund		0.525	%		0.525	%		0.500	%		0.450	%		0.400	%		0.400	%		0.400	%		0.400	%		0.400	%
Ivy Core Equity Fund		0.700			0.700			0.700			0.650			0.650			0.600			0.550			0.525			0.500
Ivy Cundill Global Value Fund		1.000			1.000			0.850			0.830			0.830			0.800			0.760			0.760			0.760
Ivy Dividend Opportunities Fund		0.700			0.700			0.700			0.650			0.650			0.600			0.550			0.550			0.550
Ivy European Opportunities Fund		0.900			0.850			0.750			0.750			0.750			0.750			0.750			0.750			0.750
Ivy Global Bond Fund		0.625			0.625			0.600			0.550			0.500			0.500			0.500			0.500			0.500
Ivy Global Equity Income Fund		0.700			0.700			0.700			0.650			0.650			0.600			0.550			0.550			0.550
Ivy Global Income Allocation Fund		0.700			0.700			0.700			0.650			0.650			0.600			0.550			0.550			0.550
Ivy High Income Fund		0.625			0.625			0.600			0.550			0.500			0.500			0.500			0.500			0.500
Ivy International Core Equity Fund		0.850			0.850			0.850			0.830			0.830			0.800			0.700			0.700			0.700
Ivy International Growth Fund		0.850			0.850			0.850			0.830			0.830			0.800			0.700			0.700			0.700
Ivy Large Cap Growth Fund		0.700			0.700			0.700			0.650			0.650			0.600			0.550			0.550			0.550
Ivy Limited-Term Bond Fund		0.500			0.500			0.450			0.400			0.350			0.350			0.350			0.350			0.350
Ivy Managed European/Pacific Fund		0.050			0.050			0.050			0.050			0.050			0.050			0.050			0.050			0.050
Ivy Managed International Opportunities Fund		0.050			0.050			0.050			0.050			0.050			0.050			0.050			0.050			0.050
Ivy Micro Cap Growth Fund		0.950			0.950			0.950			0.930			0.930			0.900			0.860			0.860			0.860

194 SEMIANNUAL REPORT 2012

Fund (M - Millions)	$0 to $250M			$250 to $500M			$500 to $1,000M			$1,000 to $1,500M			$1,500 to $2,000M			$2,000 to $3,000M			$3,000 to $5,000M			$5,000 to $6,000M			Over $6,000M
Ivy Mid Cap Growth Fund		0.850	%		0.850	%		0.850	%		0.830	%		0.830	%		0.800	%		0.760	%		0.760	%		0.760	%
Ivy Money Market Fund		0.400			0.400			0.400			0.400			0.400			0.400			0.400			0.400			0.400
Ivy Municipal Bond Fund		0.525			0.525			0.500			0.450			0.400			0.400			0.400			0.400			0.400
Ivy Municipal High Income Fund		0.525			0.525			0.500			0.450			0.400			0.400			0.400			0.400			0.400
Ivy Pacific Opportunities Fund		1.000			1.000			0.850			0.830			0.830			0.800			0.760			0.760			0.760
Ivy Small Cap Growth Fund		0.850			0.850			0.850			0.830			0.830			0.800			0.760			0.760			0.760
Ivy Small Cap Value Fund		0.850			0.850			0.850			0.830			0.830			0.800			0.760			0.760			0.760
Ivy Tax-Managed Equity Fund		0.650			0.650			0.650			0.600			0.600			0.550			0.500			0.500			0.500
Ivy Value Fund		0.700			0.700			0.700			0.650			0.650			0.600			0.550			0.550			0.550

For the period from May 18, 2009 to September 30, 2016, IICO voluntarily agreed to reduce the management fee paid to 0.485%, on an annual basis, of net assets for any day that Ivy Municipal High Income Fund’s net assets are below $500 million.

For Funds managed solely by IICO, 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. See Expense Reimbursements and/or Waivers below for amounts waived during the period ended September 30, 2012.

IICO has entered into Subadvisery Agreements with the following entities on behalf of certain Funds:

Under an agreement between IICO and Mackenzie Financial Corporation (Mackenzie), Mackenzie serves as subadviser to Ivy Cundill Global Value Fund. Under an agreement between IICO and Wall Street Associates, Wall Street Associates serves as subadviser to Ivy Micro Cap Growth Fund. Under an agreement between IICO and Advantus Capital Management, Inc. (Advantus), Advantus serves as subadviser to Ivy Bond Fund. Each subadviser makes investment decisions in accordance with the Fund’s investment objectives, policies and restrictions under the supervision of IICO and the oversight of the Board. IICO pays all costs applicable of the subadvisers.

Accounting Services Fees. The Trust has an Accounting Services Agreement with Waddell & Reed Services Company, doing business as WI Services Company (WISC), an indirect subsidiary of WDR. Under the agreement, WISC acts as the agent in providing bookkeeping and accounting services and assistance to the Trust, including maintenance of Fund records, pricing of Fund shares and preparation of certain shareholder reports. For these services, each Fund, other than Ivy Managed European/Pacific Fund and Ivy Managed International Opportunities Fund (the Ivy Managed Funds), pays WISC a monthly fee of one-twelfth of the annual fee based on the average net asset levels shown in the following table:

(M - Millions)	$0 to $10M		$10 to $25M		$25 to $50M		$50 to $100M		$100 to $200M		$200 to $350M		$350 to $550M		$550 to $750M		$750 to $1,000M		Over $1,000M
Annual Fee Rate	$	0.00	$	11.50	$	23.10	$	35.50	$	48.40	$	63.20	$	82.50	$	96.30	$	121.60	$	148.50

In addition, for each class of shares in excess of one, each Fund pays WISC a monthly per-class fee equal to 2.5% of the monthly accounting services base fee.

Under the Accounting and Administrative Services Agreement for the Ivy Managed Funds, each Fund pays WISC a monthly fee of one-twelfth of the annual fee shown in the following table:

(M - Millions)	$0 to $10M		$10 to $25M		$25 to $50M		$50 to $100M		$100 to $200M		$200 to $350M		$350 to $550M		$550 to $750M		$750 to $1,000M		Over $1,000M
Annual Fee Rate	$	0.000	$	5.748	$	11.550	$	17.748	$	24.198	$	31.602	$	41.250	$	48.150	$	60.798	$	74.250

In addition, for each class of shares in excess of one, each of the Ivy Managed Funds pays WISC a monthly per-class fee equal to 1.25% of the monthly accounting services base fee.

Administrative Fee. Each Fund also pays WISC a monthly fee at the annual rate of 0.01%, or one basis point, for the first $1 billion of net assets with no fee charged for net assets in excess of $1 billion. This fee is voluntarily waived by WISC until a Fund’s net assets are at least $10 million and is included in “Accounting services fee” on the Statement of Operations.

Shareholder Servicing. General. Under the Shareholder Servicing Agreement between the Trust and WISC, with respect to Class A, Class B, Class C and Class E shares, for each shareholder account that was in existence at any time during the prior month, each Fund pays a monthly fee that ranges from $1.5042 to $1.6958 per account; however, WISC has agreed to reduce that fee if the number of total shareholder accounts within the Complex (Waddell & Reed Advisors Funds, InvestEd Portfolios and Ivy Funds) reaches certain levels. 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. Effective June 6, 2011 for Class R shares, each Fund pays a monthly fee equal to one-twelfth of 0.25 of 1% of the average daily net assets of the class for the preceding month. Prior to June 6, 2011 the fee was 0.20 of 1%. For Class I and 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 WISC for certain out-of-pocket costs for all classes.

Networked accounts. For certain networked accounts (that is, those accounts whose Fund shares are purchased through certain financial intermediaries), WISC has agreed to reduce its per account fees charged to the Funds to $0.50 per month per shareholder account. Additional fees

2012 SEMIANNUAL REPORT 195

may be paid by the Funds to those intermediaries. If the aggregate annual rate of the WISC transfer agent fee and the costs charged by the financial services companies exceeds $18.00 per account for a Fund, WISC will reimburse the Fund the amount in excess of $18.00.

Broker accounts. Certain broker-dealers that maintain shareholder accounts with each Fund through an omnibus account provide transfer agent and other shareholder-related services that would otherwise be provided by WISC if the individual accounts that comprise the omnibus account were opened by their beneficial owners directly. Each Fund may pay such broker-dealers a per account fee for each open account within the omnibus account, or a fixed rate fee, based on the average daily net asset value of the omnibus account (or a combination thereof).

Distribution and Service Plan. Class A and Class E Shares. Under a Distribution and Service Plan adopted by the Trust pursuant to Rule 12b–1 under the 1940 Act (the Distribution and Service Plan), each Fund, other than Ivy Money Market Fund, may pay a distribution and/or service fee to Ivy Funds Distributors, Inc. (IFDI) for Class A and Class E shares 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 and Class E shares and/or provision of personal services to Fund shareholders and/or maintenance of shareholder accounts of that class.

Class B and Class C Shares. Under the Distribution and Service Plan, each Fund may pay IFDI a service fee not to exceed 0.25% and a distribution fee not to exceed 0.75% of the Fund’s average annual net assets for Class B and Class C shares to compensate IFDI for its services in connection with the distribution of shares of that class and/or provision of personal services to Class B or Class C shareholders and/or maintenance of shareholder accounts of that class.

Class R Shares. Under the Distribution and Service Plan, each Fund may pay IFDI a fee of up to 0.50%, on an annual basis, of the average daily net assets of the Fund’s Class R shares to compensate IFDI for, either directly or through third parties, distributing the Class R shares of that Fund, providing personal services to Class R shareholders and/or maintaining Class R shareholder accounts.

Class Y Shares. Under the Distribution and Service 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 services to Class Y shareholders and/or maintaining Class Y shareholder accounts.

Sales Charges. As principal underwriter for the Trust’s shares, IFDI receives sales commissions (which are not an expense of the Trust) for sales of Class A and Class E shares. A CDSC may be assessed against a shareholder’s redemption amount of Class B, Class C or certain Class A and Class E shares and is paid to IFDI. During the period ended September 30, 2012, IFDI received the following amounts in sales commissions and CDSCs:

	Gross Sales Commissions		CDSC											Commissions Paid(1)
			Class A			Class B			Class C			Class E
Ivy Bond Fund	$	157	$	—	*	$	13		$	1		$	—	$	186
Ivy Core Equity Fund		107		—	*		2			1			—		126
Ivy Cundill Global Value Fund		58		—	*		3			—	*		—		60
Ivy Dividend Opportunities Fund		96		—			11			1			—		102
Ivy European Opportunities Fund		49		—	*		2			—	*		—		50
Ivy Global Bond Fund		44		—	*		5			2			—		68
Ivy Global Equity Income Fund		25		—			—			—			—		23
Ivy Global Income Allocation Fund		121		—			3			—	*		—		133
Ivy High Income Fund		1,515		17			100			102			—		5,189
Ivy International Core Equity Fund		177		—	*		18			4			—		219
Ivy International Growth Fund		28		—	*		2			—	*		—		37
Ivy Large Cap Growth Fund		182		—			8			2			—		205
Ivy Limited-Term Bond Fund		911		41			31			23			—		1,143
Ivy Managed European/Pacific Fund		29		—	*		—	*		—	*		—		26
Ivy Managed International Opportunities Fund		57		—	*		2			—	*		—		52
Ivy Micro Cap Growth Fund		77		—	*		—	*		—	*		—		75
Ivy Mid Cap Growth Fund		183		—	*		18			15			—		537
Ivy Money Market Fund		11		6			25			14			—		11
Ivy Municipal Bond Fund		81		12			2			1			—		103
Ivy Municipal High Income Fund		315		11			11			32			—		1,140
Ivy Pacific Opportunities Fund		230		—	*		6			—	*		—		236
Ivy Small Cap Growth Fund		117		—	*		7			4			—		185
Ivy Small Cap Value Fund		63		1			3			1			—		65
Ivy Tax-Managed Equity Fund		7		—	*		—			—	*		—		9
Ivy Value Fund		20		—	*		2			1			—		23

* Not shown due to rounding.

(1) IFDI reallowed/paid this portion of the sales charge to financial advisors and selling broker-dealers.

196 SEMIANNUAL REPORT 2012

Expense Reimbursements and/or Waivers. Fund and class expense limitations and related waivers/reimbursements for the period ended September 30, 2012 were as follows:

Fund Name	Share Class Name	Type of Expense Limit	Commencement Date	End Date	Expense Limit	Amount of Expense Waiver/ Reimbursement			Expense Reduced
Ivy Bond Fund	Class E	Contractual	1-31-2011	7-31-2013	1.14%	$	5		12b-1 Fees and/or Shareholder Servicing
	Class I	Contractual	1-31-2011	7-31-2013	0.84%	$	—		Shareholder Servicing
	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	—		N/A
Ivy Core Equity Fund	Class E	Contractual	8-1-2008	7-31-2013	1.35%	$	4		12b-1 Fees and/or Shareholder Servicing
	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	—		N/A
Ivy Cundill Global Value Fund	Class A	Contractual	8-1-2012	7-13-2013	1.90%	$	29		12b-1 Fees and/or Shareholder Servicing
	Class E	Contractual	8-1-2008	7-31-2013	1.59%	$	3		12b-1 Fees and/or Shareholder Servicing
	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	9		12b-1 Fees and/or Shareholder Servicing
Ivy Dividend Opportunities Fund	Class E	Contractual	8-1-2008	7-31-2013	1.37%	$	8		12b-1 Fees and/or Shareholder Servicing
	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	—		N/A
Ivy European Opportunities Fund	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	—		N/A
Ivy Global Bond Fund	All Classes	Contractual	6-2-2008	7-31-2013	N/A	$	6	(1)	Investment Management Fee
	Class A	Contractual	6-2-2008	7-31-2013	0.99%	$	211		12b-1 Fees and/or Shareholder Servicing
	Class B	Contractual	6-2-2008	7-31-2013	1.74%	$	13		12b-1 Fees and/or Shareholder Servicing
	Class C	Contractual	6-2-2008	7-31-2013	1.74%	$	35		12b-1 Fees and/or Shareholder Servicing
	Class I	Contractual	6-2-2008	7-31-2013	0.74%	$	25		Shareholder Servicing
	Class Y	Contractual	6-2-2008	7-31-2013	0.99%	$	5		12b-1 Fees and/or Shareholder Servicing
	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	—		N/A
Ivy Global Equity Income Fund	All Classes	Contractual	6-4-2012	7-31-2013	Net assets under $25 million	$	19		Management Fee
	Class A	Contractual	6-4-2012	7-31-2013	1.30%	$	2		12b-1 Fees and/or Shareholder Servicing
	Class B	Contractual	6-4-2012	7-31-2013	2.17%	$	—		12b-1 Fees and/or Shareholder Servicing
	Class C	Contractual	6-4-2012	7-31-2013	1.96%	$	—		12b-1 Fees and/or Shareholder Servicing

2012 SEMIANNUAL REPORT 197

Fund Name	Share Class Name	Type of Expense Limit		Commencement Date		End Date		Expense Limit	Amount of Expense Waiver/ Reimbursement			Expense Reduced
	Class I		Contractual		6-4-2012		7-31-2013	0.94%	$	5		Shareholder Servicing
	Class Y		Contractual		6-4-2012		7-31-2013	1.19%	$	2		12b-1 Fees and/or Shareholder Servicing
	Class Y		Contractual		6-4-2012		7-31-2013	Not to exceed Class A	$	—		N/A
Ivy Global Income Allocation Fund	All Classes		Contractual		6-4-2012		7-31-2013	N/A	$	30	(1)	Investment Management Fee
	Class A		Contractual		6-4-2012		7-31-2013	1.35%	$	100		12b-1 Fees and/or Shareholder Servicing
	Class B		Contractual		6-4-2012		7-31-2013	2.30%	$	3		12b-1 Fees and/or Shareholder Servicing
	Class C		Contractual		6-4-2012		7-31-2013	2.02%	$	4		12b-1 Fees and/or Shareholder Servicing
	Class I		Contractual		6-4-2012		7-31-2013	0.91%	$	11		Shareholder Servicing
	Class E		Contractual		6-4-2012		7-31-2013	1.33%	$	5		12b-1 Fees and/or Shareholder Servicing
	Class Y		Contractual		6-4-2012		7-31-2013	1.17%	$	1		12b-1 Fees and/or Shareholder Servicing
	Class Y		Contractual		8-1-2011		7-31-2013	Not to exceed Class A	$	—		N/A
Ivy High Income Fund	Class E		Contractual		8-1-2008		7-31-2013	1.36%	$	2		12b-1 Fees and/or Shareholder Servicing
	Class Y		Contractual		8-1-2011		7-31-2013	Not to exceed Class A	$	22		12b-1 Fees and/or Shareholder Servicing
Ivy International Core Equity Fund	Class E		Contractual		8-1-2008		7-31-2013	1.53%	$	8		12b-1 Fees and/or Shareholder Servicing
	Class Y		Contractual		8-1-2011		7-31-2013	Not to exceed Class A	$	—		N/A
Ivy International Growth Fund	Class Y		Contractual		8-1-2011		7-31-2013	Not to exceed Class A	$	—		N/A
Ivy Large Cap Growth Fund	Class A		Contractual		6-1-2006		7-31-2014	1.15%	$	328		12b-1 Fees and/or Shareholder Servicing
	Class B		Contractual		6-13-2011		7-31-2014	2.15%	$	2		12b-1 Fees and/or Shareholder Servicing
	Class C		Contractual		6-13-2011		7-31-2014	1.95%	$	—		12b-1 Fees and/or Shareholder Servicing
	Class E		Contractual		8-1-2008		7-31-2014	1.15%	$	11		12b-1 Fees and/or Shareholder Servicing
	Class I		Contractual		6-13-2011		7-31-2014	0.88%	$	10		Shareholder Servicing
	Class Y		Contractual		6-1-2006		7-31-2014	1.06%	$	45		12b-1 Fees and/or Shareholder Servicing
	Class Y		Contractual		8-1-2011		7-31-2013	Not to exceed Class A	$	—		N/A

198 SEMIANNUAL REPORT 2012

Fund Name	Share Class Name	Type of Expense Limit	Commencement Date	End Date	Expense Limit	Amount of Expense Waiver/ Reimbursement			Expense Reduced
Ivy Limited-Term Bond Fund	Class E	Contractual	8-1-2010	7-31-2013	1.00%	$	—	*	12b-1 Fees and/or Shareholder Servicing
	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	4		12b-1 Fees and/or Shareholder Servicing
Ivy Managed European/Pacific Fund	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	—		N/A
Ivy Managed International Opportunities Fund	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	—		N/A
Ivy Micro Cap Growth Fund	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	—		N/A
Ivy Mid Cap Growth Fund	Class E	Contractual	8-1-2008	7-31-2013	1.60%	$	6		12b-1 Fees and/or Shareholder Servicing
	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	—		N/A
Ivy Money Market Fund	Class A	Voluntary	N/A	N/A	To maintain minimum yield(2)	$	262		12b-1 Fees and/or Shareholder Servicing
	Class B	Voluntary	N/A	N/A	To maintain minimum yield(2)	$	57		12b-1 Fees and/or Shareholder Servicing
	Class C	Voluntary	N/A	N/A	To maintain minimum yield(2)	$	261		12b-1 Fees and/or Shareholder Servicing
	Class E	Voluntary	N/A	N/A	To maintain minimum yield(2)	$	9		12b-1 Fees and/or Shareholder Servicing
Ivy Municipal Bond Fund	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	—	*	N/A
Ivy Municipal High Income Fund	All Classes	Voluntary	N/A	N/A	Reduction of investment management fee	$	100		Investment Management Fee
	Class A	Contractual	5-18-2009	7-31-2013	0.95%	$	—		12b-1 Fees and/or Shareholder Servicing
	Class I	Contractual	5-18-2009	7-31-2013	0.70%	$	—		Shareholder Servicing
	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	14		12b-1 Fees and/or Shareholder Servicing
Ivy Pacific Opportunities Fund	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	—		N/A
Ivy Small Cap Growth Fund	Class E	Contractual	8-1-2008	7-31-2013	1.56%	$	7		12b-1 Fees and/or Shareholder Servicing
	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	—		N/A
Ivy Small Cap Value Fund	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	—		N/A
Ivy Tax-Managed Equity Fund	All Classes	Voluntary	N/A	N/A	Net assets under $25 million	$	63		Investment Management Fee
	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	—		N/A
Ivy Value Fund	Class A	Contractual	8-1-2010	7-31-2013	1.55%	$	—		12b-1 Fees and/or Shareholder Servicing
	Class Y	Contractual	8-1-2011	7-31-2013	Not to exceed Class A	$	—		N/A

* Not shown due to rounding.

(1) Due to Class A, Class B, Class C, Class I and/or Class Y contractual expense limits, investment management fees were waived for all share classes.

(2) Minimum yield was 0.02% throughout the period of this report.

2012 SEMIANNUAL REPORT 199

Any amounts due to the Funds as a reimbursement but not paid as of September 30, 2012 are shown as a receivable from affiliates on the Statement of Assets and Liabilities.

7. AFFILIATED COMPANY TRANSACTIONS (All amounts in thousands)

A summary of the transactions in affiliated companies during the period ended September 30, 2012 follows:

	3-31-12 Share Balance		Purchases at Cost		Sales at Cost		Realized Gain/(Loss)(1)			Distributions Received		9-30-12 Share Balance		9-30-12 Market Value
Ivy Managed European/Pacific Fund
Ivy European Opportunities Fund, Class I		912	$	364	$	6,967	$	(661	)	$	—		657	$	15,295
Ivy Pacific Opportunities Fund, Class I		4,284		6,764		2,759		(733	)		—		4,643		64,397
							$	(1,394	)	$	—			$	79,692
	3-31-12 Share Balance		Purchases at Cost		Sales at Cost		Realized Gain/(Loss)(1)			Distributions Received		9-30-12 Share Balance		9-30-12 Market Value
Ivy Managed International Opportunities Fund
Ivy European Opportunities Fund, Class I		1,292	$	517	$	15,704	$	(3,621	)	$	—		797	$	18,553
Ivy Global Income Allocation Fund, Class I		2,647		1,420		21,644		(803	)		732		1,304		18,716
Ivy International Core Equity Fund, Class I(2)		2,532		691		1,641		(314	)		—		2,489		37,206
Ivy International Growth Fund, Class I		588		18,190		787		3			—		1,102		37,457
Ivy Pacific Opportunities Fund, Class I		4,722		14,358		3,080		(780	)		—		5,632		78,119
							$	(5,515	)	$	732			$	190,051

(1) Included in Realized Gain/Loss, if applicable, are distributions from capital gains from the underlying securities.

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

8. INVESTMENT SECURITIES TRANSACTIONS ($ amounts in thousands)

The cost of purchases and the proceeds from maturities and sales of investment securities (excluding short-term securities) for the period ended September 30, 2012, were as follows:

	Purchases				Sales
	U.S. Government		Other Issuers		U.S. Government		Other Issuers
Ivy Bond Fund	$	635,339	$	175,957	$	612,079	$	157,717
Ivy Core Equity Fund		—		108,091		—		89,988
Ivy Cundill Global Value Fund		—		9,461		—		30,329
Ivy Dividend Opportunities Fund		—		74,182		—		78,669
Ivy European Opportunities Fund		—		52,215		—		62,918
Ivy Global Bond Fund		5,457		26,294		9,826		23,344
Ivy Global Equity Income Fund		—		39,646		—		8,847
Ivy Global Income Allocation Fund		4,781		191,608		—		193,584
Ivy High Income Fund		—		3,196,767		—		1,444,405
Ivy International Core Equity Fund		—		500,060		—		491,766
Ivy International Growth Fund		—		57,874		—		37,493
Ivy Large Cap Growth Fund		—		624,299		—		690,274
Ivy Limited-Term Bond Fund		109,037		298,019		105,004		143,264
Ivy Managed European/Pacific Fund		—		7,128		—		8,333
Ivy Managed International Opportunities Fund		—		35,176		—		37,339
Ivy Micro Cap Growth Fund		—		16,849		—		17,764
Ivy Mid Cap Growth Fund		—		841,761		—		313,028
Ivy Money Market Fund		—		—		—		—
Ivy Municipal Bond Fund		—		13,371		—		4,507
Ivy Municipal High Income Fund		—		451,283		—		47,384
Ivy Pacific Opportunities Fund		—		621,323		—		592,260
Ivy Small Cap Growth Fund		—		117,347		—		147,016
Ivy Small Cap Value Fund		—		70,677		—		87,936
Ivy Tax-Managed Equity Fund		—		4,568		—		1,960
Ivy Value Fund		—		43,639		—		46,081

200 SEMIANNUAL REPORT 2012

9. CAPITAL SHARE TRANSACTIONS (All amounts in thousands)

The Trust has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class of each Fund. On April 1, 2010, all Advisor Class shares were converted to Class I. Transactions in shares of beneficial interest were as follows:

	Ivy Bond Fund												Ivy Core Equity Fund
	Six months ended 9-30-12						Year ended 3-31-12						Six months ended 9-30-12						Year ended 3-31-12
	Shares			Value			Shares			Value			Shares			Value			Shares			Value
Shares issued from sale of shares:
Class A		9,180		$	97,561			21,562		$	222,387			3,761		$	40,357			9,386		$	94,671
Class B		266			2,832			467			4,829			89			845			160			1,429
Class C		920			9,780			3,004			31,026			721			7,018			1,228			11,236
Class E		43			453			102			1,060			63			676			87			881
Class I		520			5,515			444			4,589			2,584			31,058			2,504			27,627
Class Y		62			659			303			3,153			286			3,237			1,149			12,497
Shares issued in connection with merger of Ivy Mortgage Securities Fund:
Class A		—			—			—			—			—			—			—			—
Class B		—			—			—			—			—			—			—			—
Class C		—			—			—			—			—			—			—			—
Class E		—			—			—			—			—			—			—			—
Class I		—			—			—			—			—			—			—			—
Class Y		—			—			—			—			—			—			—			—
Shares issued in reinvestment of distributions to shareholders:
Class A		582			6,192			1,055			10,894			—			—			629			5,945
Class B		8			90			17			173			—			—			16			135
Class C		33			355			62			639			—			—			326			2,812
Class E		5			58			11			110			—			—			8			78
Class I		8			86			6			66			—			—			44			452
Class Y		10			105			22			231			—			—			35			346
Shares redeemed:
Class A		(5,305	)		(56,384	)		(13,731	)		(141,382	)		(2,515	)		(27,096	)		(4,990	)		(49,850	)
Class B		(165	)		(1,748	)		(450	)		(4,633	)		(94	)		(900	)		(201	)		(1,821	)
Class C		(694	)		(7,372	)		(1,814	)		(18,724	)		(994	)		(9,662	)		(2,366	)		(21,719	)
Class E		(44	)		(472	)		(54	)		(554	)		(8	)		(91	)		(24	)		(247	)
Class I		(149	)		(1,593	)		(233	)		(2,429	)		(2,020	)		(24,096	)		(626	)		(6,563	)
Class Y		(356	)		(3,795	)		(237	)		(2,439	)		(170	)		(1,908	)		(626	)		(6,654	)
Net increase		4,924		$	52,322			10,536		$	108,996			1,703		$	19,438			6,739		$	71,255

	Ivy Cundill Global Value Fund												Ivy Dividend Opportunities Fund
	Six months ended 9-30-12						Year ended 3-31-12						Six months ended 9-30-12						Year ended 3-31-12
	Shares			Value			Shares			Value			Shares			Value			Shares			Value
Shares issued from sale of shares:
Class A		1,183		$	14,152			2,334		$	29,583			1,963		$	30,121			5,429		$	80,275
Class B		13			147			44			545			81			1,225			210			3,128
Class C		23			271			92			1,124			167			2,546			448			6,656
Class E		4			42			9			107			18			279			38			569
Class I		32			393			129			1,721			60			936			699			10,941
Class Y		83			992			283			3,639			57			867			162			2,429
Shares issued in reinvestment of distributions to shareholders:
Class A		—	*		—	*		11			128			73			1,136			193			2,797
Class B		—			—			—			—			—	*		7			3			38
Class C		—			—			—			—			3			41			12			175
Class E		—			—			—	*		1			1			13			2			34
Class I		—			—			3			32			2			29			5			68
Class Y		—			—			10			112			4			61			12			167
Shares redeemed:
Class A		(1,860	)		(22,196	)		(5,270	)		(66,258	)		(2,050	)		(31,574	)		(4,552	)		(67,351	)
Class B		(221	)		(2,477	)		(480	)		(5,753	)		(122	)		(1,862	)		(258	)		(3,761	)
Class C		(307	)		(3,475	)		(784	)		(9,447	)		(315	)		(4,810	)		(860	)		(12,462	)
Class E		(6	)		(67	)		(10	)		(129	)		(16	)		(247	)		(29	)		(422	)
Class I		(81	)		(960	)		(185	)		(2,394	)		(79	)		(1,207	)		(269	)		(3,919	)
Class Y		(210	)		(2,582	)		(704	)		(8,866	)		(179	)		(2,740	)		(357	)		(5,237	)
Net increase (decrease)		(1,347	)	$	(15,760	)		(4,518	)	$	(55,855	)		(332	)	$	(5,179	)		888		$	14,125

2012 SEMIANNUAL REPORT 201

	Ivy European Opportunities Fund												Ivy Global Bond Fund
	Six months ended 9-30-12						Year ended 3-31-12						Six months ended 9-30-12						Year ended 3-31-12
	Shares			Value			Shares			Value			Shares			Value			Shares			Value
Shares issued from sale of shares:
Class A		665		$	14,641			1,765		$	39,677			2,175		$	22,123			7,545		$	76,959
Class B		5			103			14			288			75			759			302			3,079
Class C		7			167			27			594			259			2,629			1,555			15,876
Class E		—			—	*		—			—	*		N/A			N/A			N/A			N/A
Class I		44			979			705			15,352			479			4,847			2,240			22,856
Class Y		3			76			12			279			67			686			121			1,237
Shares issued in reinvestment of distributions to shareholders:
Class A		—			—			25			496			248			2,520			561			5,678
Class B		—			—			—			—			7			67			14			143
Class C		—			—			—			—			45			459			114			1,150
Class E		—			—			—			—			N/A			N/A			N/A			N/A
Class I		—			—			20			405			45			457			96			973
Class Y		—			—			—	*		10			8			85			34			342
Shares redeemed:
Class A		(865	)		(19,088	)		(2,476	)		(56,375	)		(2,223	)		(22,591	)		(6,304	)		(64,161	)
Class B		(43	)		(896	)		(119	)		(2,515	)		(59	)		(604	)		(414	)		(4,281	)
Class C		(73	)		(1,536	)		(194	)		(4,168	)		(473	)		(4,809	)		(1,904	)		(19,422	)
Class E		—			—			—			—			N/A			N/A			N/A			N/A
Class I		(809	)		(18,831	)		(131	)		(2,958	)		(678	)		(6,893	)		(1,938	)		(19,702	)
Class Y		(10	)		(225	)		(25	)		(590	)		(249	)		(2,524	)		(891	)		(9,099	)
Net increase (decrease)		(1,076	)	$	(24,610	)		(377	)	$	(9,505	)		(274	)	$	(2,789	)		1,131		$	11,628

	Ivy Global Equity Income Fund						Ivy Global Income Allocation Fund
	Period from 6-4-12 to 9-30-12						Six months ended 9-30-12						Year ended 3-31-12
	Shares			Value			Shares			Value			Shares			Value
Shares issued from sale of shares:
Class A		2,513		$	26,830			3,267		$	45,339			4,659		$	66,683
Class B		204			2,170			47			645			100			1,407
Class C		621			6,618			278			3,833			187			2,668
Class E		N/A			N/A			11			157			35			518
Class I		1,836			19,557			280			3,917			385			5,621
Class Y		602			6,416			280			3,737			55			794
Shares issued in reinvestment of distributions to shareholders:
Class A		6			70			378			5,186			673			9,351
Class B		—	*		—	*		8			104			15			211
Class C		—	*		1			24			324			49			679
Class E		N/A			N/A			3			41			6			84
Class I		—	*		2			61			832			155			2,173
Class Y		—			—			9			119			8			111
Shares redeemed:
Class A		(921	)		(10,188	)		(2,022	)		(27,922	)		(3,628	)		(52,291	)
Class B		(101	)		(1,137	)		(86	)		(1,167	)		(149	)		(2,095	)
Class C		(300	)		(3,388	)		(226	)		(3,105	)		(458	)		(6,563	)
Class E		N/A			N/A			(12	)		(172	)		(22	)		(306	)
Class I		(902	)		(10,197	)		(1,550	)		(22,306	)		(382	)		(5,412	)
Class Y		(300	)		(3,387	)		(252	)		(3,464	)		(142	)		(2,135	)
Net increase		3,258		$	33,367			498		$	6,098			1,546		$	21,498

202 SEMIANNUAL REPORT 2012

	Ivy High Income Fund
	Six months ended 9-30-12						Year ended 3-31-12
	Shares			Value			Shares			Value
Shares issued from sale of shares:
Class A		121,070		$	1,012,239			159,004		$	1,297,026
Class B		4,607			38,519			5,781			47,356
Class C		48,267			403,740			67,305			549,622
Class E		159			1,331			247			2,022
Class I		92,852			777,223			140,838			1,148,502
Class Y		40,289			336,886			53,478			437,421
Shares issued in reinvestment of distributions to shareholders:
Class A		7,706			64,546			12,952			105,353
Class B		290			2,426			449			3,648
Class C		2,969			24,865			4,275			34,766
Class E		23			190			49			402
Class I		4,800			40,211			4,808			39,170
Class Y		2,082			17,439			2,975			24,223
Shares redeemed:
Class A		(43,647	)		(363,945	)		(70,914	)		(578,747	)
Class B		(908	)		(7,588	)		(1,416	)		(11,571	)
Class C		(8,639	)		(72,149	)		(18,416	)		(150,868	)
Class E		(56	)		(472	)		(110	)		(903	)
Class I		(23,849	)		(199,062	)		(39,829	)		(325,948	)
Class Y		(21,783	)		(181,491	)		(23,209	)		(190,195	)
Net increase		226,232		$	1,894,908			298,267		$	2,431,279

	Ivy International Core Equity Fund												Ivy International Growth Fund
	Six months ended 9-30-12						Year ended 3-31-12						Six months ended 9-30-12						Year ended 3-31-12
	Shares			Value			Shares			Value			Shares			Value			Shares			Value
Shares issued from sale of shares:
Class A		9,018		$	128,501			21,094		$	325,913			476		$	15,174			1,057		$	33,641
Class B		45			578			221			3,205			8			231			14			412
Class C		486			6,318			2,037			29,155			24			690			63			1,816
Class E		15			214			39			618			—			—	*		—			—	*
Class I		7,912			112,786			23,549			359,530			557			18,796			145			4,769
Class Y		2,141			30,871			6,344			94,567			77			2,471			165			5,129
Shares issued in reinvestment of distributions to shareholders:
Class A		—			—			1,406			19,359			—			—			—			—
Class B		—			—			28			354			—			—			—			—
Class C		—			—			214			2,684			—			—			—			—
Class E		—			—			6			87			—			—			—			—
Class I		—			—			812			11,222			—			—			—			—
Class Y		—			—			247			3,413			—			—			—			—
Shares redeemed:
Class A		(6,364	)		(90,869	)		(14,815	)		(224,907	)		(338	)		(10,833	)		(834	)		(26,633	)
Class B		(147	)		(1,911	)		(435	)		(5,964	)		(19	)		(540	)		(52	)		(1,514	)
Class C		(1,151	)		(14,875	)		(2,518	)		(34,330	)		(83	)		(2,380	)		(256	)		(7,239	)
Class E		(15	)		(209	)		(27	)		(421	)		—			—			—			—
Class I		(5,929	)		(84,391	)		(9,239	)		(141,644	)		(51	)		(1,628	)		(114	)		(3,587	)
Class Y		(3,482	)		(49,607	)		(2,794	)		(42,749	)		(60	)		(1,945	)		(101	)		(3,307	)
Net increase		2,529		$	37,406			26,169		$	400,092			591		$	20,036			87		$	3,487

	Ivy Large Cap Growth Fund								Ivy Limited-Term Bond Fund
	Six months ended 9-30-12				Year ended 3-31-12				Six months ended 9-30-12				Year ended 3-31-12
	Shares		Value		Shares		Value		Shares		Value		Shares		Value
Shares issued from sale of shares:
Class A		7,362	$	106,247		17,548	$	235,759		26,593	$	297,956		63,303	$	706,671
Class B		80		996		167		1,981		381		4,262		1,113		12,424
Class C		464		6,090		928		11,426		3,327		37,258		12,639		141,196
Class E		47		685		55		752		91		1,016		169		1,885
Class I		1,310		19,463		5,590		76,299		4,843		54,257		12,233		136,451
Class R		606		8,611		549		7,407		N/A		N/A		N/A		N/A
Class Y		1,099		16,173		2,409		33,003		3,523		39,495		4,171		46,562

2012 SEMIANNUAL REPORT 203

	Ivy Large Cap Growth Fund												Ivy Limited-Term Bond Fund
	Six months ended 9-30-12						Year ended 3-31-12						Six months ended 9-30-12						Year ended 3-31-12
	Shares			Value			Shares			Value			Shares			Value			Shares			Value
Shares issued in connection with merger of Ivy Capital Appreciation Fund:
Class A		—		$	—			27,058		$	351,460			N/A			N/A			N/A			N/A
Class B		—			—			479			5,471			N/A			N/A			N/A			N/A
Class C		—			—			2,336			27,798			N/A			N/A			N/A			N/A
Class E		—			—			207			2,680			N/A			N/A			N/A			N/A
Class I		—			—			2,134			28,391			N/A			N/A			N/A			N/A
Class R		—			—			—			—			N/A			N/A			N/A			N/A
Class Y		—			—			330			4,341			N/A			N/A			N/A			N/A
Shares issued in reinvestment of distributions to shareholders:
Class A		—			—			—			—			795			8,913			1,967			21,937
Class B		—			—			—			—			9			99			28			310
Class C		—			—			—			—			86			963			274			3,058
Class E		—			—			—			—			2			25			4			40
Class I		—			—			—			—			66			738			136			1,513
Class R		—			—			—			—			N/A			N/A			N/A			N/A
Class Y		—			—			—			—			40			454			101			1,127
Shares redeemed:
Class A		(7,247	)		(104,989	)		(19,244	)		(257,673	)		(20,677	)		(231,665	)		(43,374	)		(484,020	)
Class B		(148	)		(1,862	)		(409	)		(4,843	)		(377	)		(4,228	)		(930	)		(10,379	)
Class C		(707	)		(9,286	)		(1,649	)		(20,146	)		(3,919	)		(43,910	)		(10,879	)		(121,232	)
Class E		(46	)		(657	)		(32	)		(437	)		(16	)		(183	)		(72	)		(796	)
Class I		(5,347	)		(80,783	)		(4,528	)		(61,640	)		(2,646	)		(29,659	)		(7,881	)		(87,876	)
Class R		(306	)		(4,279	)		(401	)		(5,284	)		N/A			N/A			N/A			N/A
Class Y		(940	)		(13,771	)		(5,123	)		(70,443	)		(2,194	)		(24,609	)		(4,580	)		(51,127	)
Net increase (decrease)		(3,773	)	$	(57,362	)		28,404		$	366,302			9,927		$	111,182			28,422		$	317,744

	Ivy Managed European/Pacific Fund												Ivy Managed International Opportunities  Fund
	Six months ended 9-30-12						Year ended 3-31-12						Six months ended 9-30-12						Year ended 3-31-12
	Shares			Value			Shares			Value			Shares			Value			Shares			Value
Shares issued from sale of shares:
Class A		1,040		$	7,578			2,788		$	22,018			2,268		$	18,691			6,348		$	55,568
Class B		6			46			19			155			14			117			76			677
Class C		14			103			42			350			67			561			221			1,899
Class E		—			—			—			—			—			—			—			—
Class I		3			20			18			143			3			26			25			210
Class Y		3			19			53			401			6			45			54			487
Shares issued in reinvestment of distributions to shareholders:
Class A		—			—			72			494			—			—			356			2,775
Class B		—			—			—	*		—	*		—			—			3			25
Class C		—			—			—	*		1			—			—			6			48
Class E		—			—			—			—			—			—			—			—
Class I		—			—			—	*		1			—			—			—	*		4
Class Y		—			—			1			4			—			—			1			9
Shares redeemed:
Class A		(1,084	)		(7,903	)		(2,703	)		(21,716	)		(2,448	)		(20,189	)		(5,030	)		(43,814	)
Class B		(22	)		(159	)		(52	)		(406	)		(36	)		(297	)		(135	)		(1,188	)
Class C		(42	)		(295	)		(77	)		(607	)		(93	)		(757	)		(177	)		(1,529	)
Class E		—			—			—			—			—			—			—			—
Class I		(3	)		(24	)		(18	)		(148	)		(16	)		(131	)		(6	)		(49	)
Class Y		(8	)		(58	)		(10	)		(75	)		(23	)		(190	)		(19	)		(168	)
Net increase (decrease)		(93	)	$	(673	)		133		$	615			(258	)	$	(2,124	)		1,723		$	14,954

204 SEMIANNUAL REPORT 2012

	Ivy Micro Cap Growth Fund												Ivy Mid Cap Growth Fund
	Six months ended 9-30-12						Year ended 3-31-12						Six months ended 9-30-12						Year ended 3-31-12
	Shares			Value			Shares			Value			Shares			Value			Shares			Value
Shares issued from sale of shares:
Class A		497		$	8,925			1,714		$	32,193			23,030		$	398,552			24,106		$	421,451
Class B		16			272			25			447			268			4,105			528			8,243
Class C		35			618			75			1,363			2,156			34,699			5,333			86,492
Class E		N/A			N/A			N/A			N/A			29			498			52			889
Class I		72			1,251			149			2,638			18,038			327,627			42,992			778,110
Class R		N/A			N/A			N/A			N/A			1,242			21,474			2,183			37,728
Class Y		8			186			36			602			7,239			130,306			21,087			381,794
Shares issued in reinvestment of distributions to shareholders:
Class A		—			—			297			4,645			—			—			764			12,603
Class B		—			—			5			76			—			—			26			378
Class C		—			—			14			222			—			—			145			2,207
Class E		N/A			N/A			N/A			N/A			—			—			5			79
Class I		—			—			12			190			—			—			628			10,795
Class R		N/A			N/A			N/A			N/A			—			—			45			743
Class Y		—			—			2			28			—			—			423			7,179
Shares redeemed:
Class A		(486	)		(8,745	)		(2,328	)		(41,007	)		(5,108	)		(89,362	)		(10,856	)		(184,445	)
Class B		(7	)		(115	)		(23	)		(390	)		(138	)		(2,114	)		(260	)		(4,002	)
Class C		(32	)		(568	)		(90	)		(1,576	)		(890	)		(14,248	)		(1,633	)		(25,783	)
Class E		N/A			N/A			N/A			N/A			(15	)		(250	)		(28	)		(485	)
Class I		(78	)		(1,380	)		(119	)		(2,193	)		(5,857	)		(106,882	)		(9,163	)		(160,713	)
Class R		N/A			N/A			N/A			N/A			(507	)		(8,740	)		(669	)		(11,585	)
Class Y		(35	)		(634	)		(16	)		(297	)		(6,949	)		(124,431	)		(9,611	)		(164,994	)
Net increase (decrease)		(10	)	$	(190	)		(247	)	$	(3,059	)		32,538		$	571,234			66,097		$	1,196,684

	Ivy Money Market Fund												Ivy Municipal Bond Fund
	Six months ended 9-30-12						Year ended 3-31-12						Six months ended 9-30-12						Year ended 3-31-12
	Shares			Value			Shares			Value			Shares			Value			Shares			Value
Shares issued from sale of shares:
Class A		78,013		$	78,013			263,590		$	263,590			2,278		$	27,555			4,546		$	52,621
Class B		2,547			2,547			11,815			11,815			50			611			187			2,167
Class C		19,150			19,150			75,157			75,157			366			4,431			1,004			11,621
Class E		1,817			1,817			2,923			2,923			N/A			N/A			N/A			N/A
Class I		N/A			N/A			N/A			N/A			56			671			40			460
Class Y		N/A			N/A			N/A			N/A			39			468			18			205
Shares issued in reinvestment of distributions to shareholders:
Class A		13			13			28			28			118			1,429			214			2,473
Class B		1			1			1			1			2			27			4			42
Class C		4			4			8			8			18			222			39			453
Class E		—	*		—	*		1			1			N/A			N/A			N/A			N/A
Class I		N/A			N/A			N/A			N/A			1			9			1			14
Class Y		N/A			N/A			N/A			N/A			—	*		4			1			11
Shares redeemed:
Class A		(100,217	)		(100,217	)		(252,261	)		(252,261	)		(924	)		(11,175	)		(2,394	)		(27,649	)
Class B		(2,366	)		(2,366	)		(10,738	)		(10,738	)		(33	)		(396	)		(70	)		(817	)
Class C		(24,372	)		(24,372	)		(65,597	)		(65,597	)		(229	)		(2,765	)		(495	)		(5,737	)
Class E		(1,164	)		(1,164	)		(2,418	)		(2,418	)		N/A			N/A			N/A			N/A
Class I		N/A			N/A			N/A			N/A			(40	)		(489	)		(10	)		(117	)
Class Y		N/A			N/A			N/A			N/A			(38	)		(462	)		(17	)		(200	)
Net increase (decrease)		(26,574	)	$	(26,574	)		22,509		$	22,509			1,664		$	20,140			3,068		$	35,547

2012 SEMIANNUAL REPORT 205

	Ivy Municipal High Income Fund												Ivy Pacific Opportunities Fund
	Six months ended 9-30-12						Year ended 3-31-12						Six months ended 9-30-12						Year ended 3-31-12
	Shares			Value			Shares			Value			Shares			Value			Shares			Value
Shares issued from sale of shares:
Class A		28,713		$	153,221			55,812		$	282,211			4,261		$	55,754			10,348		$	152,973
Class B		1,018			5,431			1,456			7,383			30			340			116			1,507
Class C		16,880			90,120			27,026			136,745			47			540			229			3,158
Class E		N/A			N/A			N/A			N/A			—			—	*		—			—
Class I		51,683			275,899			64,903			327,621			1,837			24,332			1,057			15,995
Class Y		1,856			9,924			4,905			24,797			95			1,246			75			1,154
Shares issued in reinvestment of distributions to shareholders:
Class A		1,328			7,110			1,740			8,790			—			—			1,506			19,205
Class B		22			117			25			128			—			—			41			450
Class C		483			2,588			544			2,751			—			—			66			746
Class E		N/A			N/A			N/A			N/A			—			—			—			—
Class I		1,442			7,723			1,515			7,657			—			—			509			6,633
Class Y		112			599			124			629			—			—			23			294
Shares redeemed:
Class A		(8,959	)		(47,992	)		(15,187	)		(76,436	)		(4,057	)		(53,024	)		(11,247	)		(167,941	)
Class B		(149	)		(797	)		(141	)		(715	)		(155	)		(1,718	)		(366	)		(4,740	)
Class C		(2,366	)		(12,657	)		(3,336	)		(16,714	)		(249	)		(2,856	)		(806	)		(10,824	)
Class E		N/A			N/A			N/A			N/A			—			—			—			—
Class I		(15,012	)		(80,517	)		(14,471	)		(72,722	)		(602	)		(7,962	)		(1,111	)		(16,296	)
Class Y		(925	)		(4,963	)		(1,285	)		(6,441	)		(120	)		(1,580	)		(195	)		(3,098	)
Net increase (decrease)		76,126		$	405,806			123,630		$	625,684			1,087		$	15,072			245		$	(784	)

	Ivy Small Cap Growth Fund												Ivy Small Cap Value Fund
	Six months ended 9-30-12						Year ended 3-31-12						Six months ended 9-30-12						Year ended 3-31-12
	Shares			Value			Shares			Value			Shares			Value			Shares			Value
Shares issued from sale of shares:
Class A		2,159		$	30,684			7,527		$	106,797			1,162		$	16,824			3,754		$	58,392
Class B		90			1,103			215			2,667			9			118			59			852
Class C		609			7,808			2,136			27,825			60			805			383			5,760
Class E		17			239			39			555			—			—	*		—			—
Class I		1,109			18,473			5,724			93,488			102			1,531			991			15,690
Class R		270			3,808			813			11,500			N/A			N/A			N/A			N/A
Class Y		1,138			18,446			4,861			76,932			167			2,488			543			8,697
Shares issued in reinvestment of distributions to shareholders:
Class A		—			—			612			7,774			—			—			1,450			18,919
Class B		—			—			34			381			—			—			39			457
Class C		—			—			560			6,456			—			—			106			1,288
Class E		—			—			7			84			—			—			—			—
Class I		—			—			167			2,481			—			—			40			547
Class R		—			—			23			290			N/A			N/A			N/A			N/A
Class Y		—			—			407			5,879			—			—			142			1,903
Shares redeemed:
Class A		(2,500	)		(35,220	)		(7,010	)		(95,428	)		(1,850	)		(26,853	)		(5,286	)		(81,311	)
Class B		(105	)		(1,285	)		(276	)		(3,337	)		(65	)		(841	)		(137	)		(1,889	)
Class C		(1,317	)		(16,866	)		(3,620	)		(45,842	)		(192	)		(2,576	)		(493	)		(6,991	)
Class E		(13	)		(175	)		(36	)		(511	)		—			—			—			—
Class I		(759	)		(12,595	)		(3,613	)		(58,572	)		(107	)		(1,630	)		(215	)		(3,333	)
Class R		(243	)		(3,420	)		(654	)		(9,081	)		N/A			N/A			N/A			N/A
Class Y		(1,434	)		(23,025	)		(5,492	)		(85,899	)		(311	)		(4,630	)		(663	)		(10,586	)
Net increase (decrease)		(979	)	$	(12,025	)		2,424		$	44,439			(1,025	)	$	(14,764	)		713		$	8,395

206 SEMIANNUAL REPORT 2012

	Ivy Tax-Managed Equity Fund												Ivy Value Fund
	Six months ended 9-30-12						Year ended 3-31-12						Six months ended 9-30-12						Year ended 3-31-12
	Shares			Value			Shares			Value			Shares			Value			Shares			Value
Shares issued from sale of shares:
Class A		317		$	4,027			716		$	8,524			889		$	14,895			2,581		$	42,562
Class B		49			613			3			40			17			272			77			1,229
Class C		55			693			8			88			38			614			140			2,273
Class E		N/A			N/A			N/A			N/A			—			—			—			—
Class I		63			801			—	*		5			25			436			154			2,637
Class Y		26			334			34			420			5			92			50			836
Shares issued in reinvestment of distributions to shareholders:
Class A		—			—			—			—			30			494			106			1,635
Class B		—			—			—			—			—			—			2			35
Class C		—			—			—			—			1			13			4			59
Class E		N/A			N/A			N/A			N/A			—			—			—			—
Class I		—			—			—			—			1			13			4			55
Class Y		—			—			—			—			—	*		1			1			9
Shares redeemed:
Class A		(147	)		(1,879	)		(274	)		(3,248	)		(741	)		(12,505	)		(1,511	)		(24,565	)
Class B		(45	)		(561	)		—			—			(21	)		(335	)		(46	)		(709	)
Class C		(34	)		(423	)		(14	)		(178	)		(62	)		(1,025	)		(153	)		(2,400	)
Class E		N/A			N/A			N/A			N/A			—			—			—			—
Class I		(58	)		(742	)		(1	)		(17	)		(92	)		(1,537	)		(107	)		(1,727	)
Class Y		(22	)		(278	)		(20	)		(265	)		(7	)		(110	)		(59	)		(941	)
Net increase		204		$	2,585			452		$	5,369			83		$	1,318			1,243		$	20,988

10. COMMITMENTS ($ amounts in thousands)

Bridge loan commitments may obligate a Fund to furnish temporary financing to a borrower until permanent financing can be arranged. At September 30, 2012, Ivy High Income Fund had outstanding bridge loan commitments of $734,040,000 In connection with these commitments, the Fund earns a commitment fee, typically set as a percentage of the commitment amount. Such fee income is included in interest income in the Statements of Operations.

11. FEDERAL INCOME TAX MATTERS ($ amounts in thousands)

For Federal income tax purposes, cost of investments owned at September 30, 2012 and the related unrealized appreciation (depreciation) were as follows:

Fund	Cost of Investments		Gross Appreciation		Gross Depreciation		Net Unrealized Appreciation (Depreciation)
Ivy Bond Fund	$	585,411	$	24,949	$	12,028	$	12,921
Ivy Core Equity Fund		295,032		85,658		1,624		84,034
Ivy Cundill Global Value Fund		221,023		23,686		30,066		(6,380	)
Ivy Dividend Opportunities Fund		272,269		82,601		2,632		79,969
Ivy European Opportunities Fund		167,581		44,878		6,986		37,892
Ivy Global Bond Fund		230,782		9,200		5,881		3,319
Ivy Global Equity Income Fund		35,026		2,690		179		2,511
Ivy Global Income Allocation Fund		278,982		21,819		4,610		17,209
Ivy High Income Fund		6,389,188		270,282		34,869		235,413
Ivy International Core Equity Fund		1,430,350		113,974		55,313		58,661
Ivy International Growth Fund		210,663		28,828		9,960		18,868
Ivy Large Cap Growth Fund		1,027,125		357,046		5,168		351,878
Ivy Limited-Term Bond Fund		1,546,749		49,418		1,292		48,126
Ivy Managed European/Pacific Fund		81,053		711		1,771		(1,060	)
Ivy Managed International Opportunities Fund		184,886		5,353		—		5,353
Ivy Micro Cap Growth Fund		61,326		19,739		3,217		16,522
Ivy Mid Cap Growth Fund		2,372,405		314,660		88,928		225,732
Ivy Money Market Fund		195,998		—		—		—
Ivy Municipal Bond Fund		141,113		13,482		435		13,047
Ivy Municipal High Income Fund		1,377,733		93,570		8,171		85,399
Ivy Pacific Opportunities Fund		593,286		72,142		17,818		54,324
Ivy Small Cap Growth Fund		602,065		197,770		20,434		177,336
Ivy Small Cap Value Fund		232,113		36,036		9,362		26,674
Ivy Tax-Managed Equity Fund		17,452		3,920		195		3,725
Ivy Value Fund		107,249		18,404		2,809		15,595

2012 SEMIANNUAL REPORT 207

For Federal income tax purposes, the Funds’ distributed and undistributed earnings and profit for the year ended March 31, 2012 and the post-October and late-year ordinary activity updated with information available through the date of this report were as follows:

Fund	Distributed Ordinary Income		Undistributed Ordinary Income		Distributed Long-Term Capital Gains		Undistributed Long-Term Capital Gains		Tax Return of Capital		Post- October Capital Losses Deferred		Late- Year Ordinary Losses Deferred
Ivy Bond Fund	$	13,874	$	1,878	$	—	$	—	$	—	$	—	$	—
Ivy Core Equity Fund		2,801		—		8,207		—		—		2,364		266
Ivy Cundill Global Value Fund		285		—		—		—		—		—		188
Ivy Dividend Opportunities Fund		3,566		120		—		—		—		3,970		—
Ivy European Opportunities Fund		928		186		—		—		—		3,150		—
Ivy Global Bond Fund		9,088		683		690		—		—		—		—
Ivy Global Income Allocation Fund		13,083		2,407		—		—		—		4,064		—
Ivy High Income Fund		236,785		15,030		40,893		834		—		—		—
Ivy International Core Equity Fund		23,513		5,126		18,373		—		—		7,937		—
Ivy International Growth Fund		—		485		—		—		—		902		—
Ivy Large Cap Growth Fund		—		—		—		—		—		10,866		928
Ivy Limited-Term Bond Fund		25,739		324		6,242		—		—		534		—
Ivy Managed European/Pacific Fund		510		—		—		—		—		—		47
Ivy Managed International Opportunities Fund		2,900		18		—		—		—		126		—
Ivy Micro Cap Growth Fund		2,220		—		3,067		—		—		1,020		295
Ivy Mid Cap Growth Fund		—		—		38,935		15,516		—		2,554		3,444
Ivy Money Market Fund		46		19		—		—		—		—		—
Ivy Municipal Bond Fund		3,625		54		—		—		—		—		—
Ivy Municipal High Income Fund		28,985		509		—		—		—		81		—
Ivy Pacific Opportunities Fund		3,822		—		23,959		—		—		12,713		219
Ivy Small Cap Growth Fund		—		—		25,721		—		—		3,446		2,463
Ivy Small Cap Value Fund		327		—		24,144		—		—		327		1,007
Ivy Tax-Managed Equity Fund		—		—		—		—		—		254		12
Ivy Value Fund		773		420		1,179		24		—		3,250		—

Internal Revenue Code regulations permit each Fund to elect to defer into its next fiscal year capital losses incurred between each November 1 and the end of its fiscal year. Each Fund is also permitted to defer into its next fiscal year late-year ordinary losses that arise from the netting of activity generated between each November 1 and the end of its fiscal year on certain specified ordinary items along with the activity generated between each January 1 and the end of its fiscal year on all other non-specified ordinary items. Distributions shown above may be reported differently to individual shareholders.

Accumulated capital losses represent net capital loss carryovers as of March 31, 2012 that may be available to offset future realized capital gains and thereby reduce future capital gains distributions. Under the Regulated Investment Company Modernization Act of 2010 (the “Modernization Act”), a Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. Any losses incurred during those future taxable years will be required to be utilized prior to any losses incurred in pre-enactment taxable years which have only an eight year carryforward period. As a result of this ordering rule, pre-enactment capital loss carryovers may expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under the previous law. The Fund’s first fiscal year end subject to the Modernization Act is March 31, 2012. The following table shows the expiration dates for capital loss carryovers from pre-enactment taxable years and the amounts of capital loss carryovers, if any, by each of the applicable Funds electing to be taxed as a RIC during the year ended March 31, 2012:

	Pre-Enactment														Post-Enactment
Fund	2013		2014		2015		2016		2017		2018		2019		Short-Term Capital Loss Carryover		Long-Term Capital Loss Carryover
Ivy Bond Fund	$	—	$	164	$	484	$	902	$	6,180	$	18,060	$	—	$	—	$	1,386
Ivy Core Equity Fund		—		—		—		—		—		—		—		5,268		—
Ivy Cundill Global Value Fund		—		—		—		—		—		46,431		—		—		—
Ivy Dividend Opportunities Fund		—		—		—		—		971		36,103		—		475		—
Ivy European Opportunities Fund		—		—		—		—		43,096		132,101		—		3,744		5,800
Ivy Global Bond Fund		—		—		—		—		—		—		—		—		214
Ivy Global Income Allocation Fund		—		—		—		—		—		34,018		—		—		—
Ivy High Income Fund		—		—		—		—		—		—		—		—		—
Ivy International Core Equity Fund		—		—		—		—		—		—		—		11,008		—
Ivy International Growth Fund		—		—		—		—		752		23,988		—		—		—
Ivy Large Cap Growth Fund		—		—		—		—		13,093		156,418		—		—		—

208 SEMIANNUAL REPORT 2012

	Pre-Enactment														Post-Enactment
Fund	2013		2014		2015		2016		2017		2018		2019		Short-Term Capital Loss Carryover		Long-Term Capital Loss Carryover
Ivy Limited-Term Bond Fund	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Ivy Managed European/Pacific Fund		—		—		—		—		—		15,270		297		—		—
Ivy Managed International Opportunities Fund		—		—		—		—		—		9,289		10,440		—		—
Ivy Micro Cap Growth Fund		—		—		—		—		—		—		—		1,503		—
Ivy Mid Cap Growth Fund		—		—		—		—		—		—		—		—		—
Ivy Money Market Fund		—		—		—		—		—		—		38		—		—
Ivy Municipal Bond Fund		—		—		—		89		101		84		146		99		—
Ivy Municipal High Income Fund		—		—		—		—		—		—		—		626		—
Ivy Pacific Opportunities Fund		—		—		—		—		—		—		—		—		—
Ivy Small Cap Growth Fund		—		—		—		—		—		—		—		—		—
Ivy Small Cap Value Fund		—		—		—		—		—		—		—		—		—
Ivy Tax-Managed Equity Fund		—		—		—		—		—		7		38		60		—
Ivy Value Fund		—		—		—		—		—		—		—		—		—

Ivy Mortgage Securities Fund was merged into Ivy Bond Fund as of January 24, 2011. At the time of the merger, Ivy Mortgage Securities Fund had capital loss carryovers available to offset future gains of the Ivy Bond Fund. These carryovers are limited to $4,298 for each period ending from March 31, 2013 through 2018, plus any unused limitations from prior years.

Ivy Capital Appreciation Fund was merged into Ivy Large Cap Growth Fund as of June 13, 2011. At the time of the merger, Ivy Capital Appreciation Fund had capital loss carryovers available to offset future gains of the Ivy Large Cap Growth Fund. These carryovers are limited to $40,531 for the period ending March 31, 2013 and $18,066 for each period ending from March 31, 2014 through 2017 plus any unused limitations from prior years.

2012 SEMIANNUAL REPORT 209

RENEWAL OF INVESTMENT MANAGEMENT AGREEMENT

Ivy Funds

At a meeting of the Board of Trustees (the “Board”) of Ivy Funds (the “Trust”) held on August 14, 2012 (the “Meeting”), the trustees, including all of the trustees who are not “interested persons,” as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (“Independent Trustees”), unanimously approved the continuance of the Investment Management Agreement between Ivy Investment Management Company (“IICO”) and the Trust, on behalf of each of its series (each a “Fund,” and together, the “Funds”), and the continuance of the Investment Subadvisory Agreements between IICO and:

• Advantus Capital Management, Inc. (with respect to Ivy Bond Fund and Ivy Real Estate Securities Fund)

• Mackenzie Financial Corporation (with respect to Ivy Global Natural Resources Fund and Ivy Cundill Global Value Fund)

• Wall Street Associates (with respect to Ivy Micro Cap Growth Fund)

(each such subadviser referred to herein as a “Subadviser”).

The Independent Trustees were assisted in their review by independent legal counsel, and met with such counsel separately from representatives of IICO and the interested trustee. Independent legal counsel explained 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 and the Subadvisers, profitability (including any fall-out benefits) from the relationships with the Funds, economies of scale, the role played by the Independent Trustees, and information on comparative fees and expenses. The Board considered the written responses produced by IICO and each Subadviser in response to a 15(c) due diligence request list submitted by the Independent Trustees’ counsel prior to the meeting. Included in those responses, which had been provided to the Board prior to the telephonic meeting in July, was a Fund-by-Fund profitability analysis prepared by IICO, an explanation of the methodology by which the profitability analysis was calculated and extensive materials on performance, expenses and comparable fund information from Lipper, Inc., an independent mutual fund rating service. The Independent Trustees also met with independent counsel to review the materials and to discuss information provided by an independent fee consultant. As a result of their review, the Independent Trustees requested and subsequently received supplemental information prior to the Meeting. The Independent Trustees further reviewed these materials extensively among themselves, with their independent legal counsel and independent fee consultant, and with the other Board members at an executive session of the Independent Trustees on August 13^th, as well as at the Meeting, during which the Board considered various factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Board’s determination to approve the agreements are discussed separately below.

Nature, Extent and Quality of Services

The Board considered the nature, extent and quality of services provided to the Funds by IICO and each Subadviser, taking into account the large amount of materials produced by IICO and each Subadviser in response to the 15(c) due diligence request lists submitted on their behalf by counsel. They also considered the knowledge they had received from the regular meetings of the Board, including from the materials provided in connection with those meetings, such as the experience, resources and key personnel of IICO and each Subadviser, as well as the other services provided to the Funds by IICO and each Subadviser (such as, managing the quality of execution of portfolio transactions and the selection of broker-dealers for those transactions, monitoring adherence to each 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 also took into account the compliance environment at IICO and each Subadviser, noting the resources that IICO has dedicated towards compliance and monitoring the Subadvisers. The Board also considered the positive coverage and high rankings the Funds have received in the national media. The Board concluded that the nature and extent of the services provided by IICO and each Subadviser were appropriate and that the Funds were likely to benefit from the continued provision of those services.

Benefits from the Relationship with Funds

The Board next discussed whether IICO or any Subadviser derives any other direct or indirect benefit from serving the Funds. The Board considered the character and amount of benefits that accrue to each organization from its respective relationship with a Fund, including the fact that a variety of services are provided by affiliates of IICO, including distribution, shareholder servicing, administrative and fund accounting services. After full consideration of these and other factors, the Board concluded that none of IICO, any Subadviser or any of their affiliates receive any additional direct or indirect benefits that would preclude the Board from approving the continuation of an investment advisory agreement with IICO or any investment subadvisory agreement with a Subadviser.

Economies of Scale

The Board discussed whether economies of scale are being realized by the Funds and whether fee levels reflect those economies of scale for the benefit of the Funds’ shareholders. In that context, the Board discussed the current level of the Funds’ advisory fee breakpoints, nature of the asset class and also considered the current and anticipated asset levels of the Funds and the potential for growth in each Fund. The Board also considered information provided by the independent consultant regarding economies of scale. The Board concluded that, except for those Funds with expense reductions, the Funds’ asset sizes and fee structures did not warrant the restructuring or reevaluation of the fee breakpoints for the Funds at the current time.

210 SEMIANNUAL REPORT 2012

Performance of the Funds and Costs of Services Provided

The Board considered, on a Fund by Fund basis, the performance of each Fund and the costs of the services provided, focusing on a number of Funds that the independent fee consultant had identified. Specifically, the Board examined the investment performance of each Fund, including quartile ranking for short- and long-term time periods and each Fund’s performance against its peers. The Board also examined the performance of each Fund against its respective Lipper index for the same periods. After extensively reviewing all of the performance information provided, the Board concluded that the Funds’ performance in each asset class was acceptable. Although the performance of some of the focus Funds identified by the independent fee consultant lagged that of their peers or respective Lipper index, the Board recognized that IICO, or the applicable Subadviser, had taken, or was taking, steps to address that underperformance, and determined to continue to monitor closely the performance of those Funds.

The Board also considered the expenses of each Fund, the expense ratio of each Fund, and the expense limitation arrangements entered into by IICO in light of the services provided by IICO and each Subadviser. The Board also compared each Fund’s expenses, including advisory, distribution and shareholder servicing fees, with the expenses and advisory fees of other investment advisers managing similarly situated funds, as well as the advisory fees that IICO (or an affiliate) charges for providing advisory services to other accounts in the same asset class for certain Funds. In that regard, the Board noted that IICO performs significant additional services for the Funds as compared to those other accounts. The Board also took into account the information on IICO’s profitability in managing the Funds, including the methodology used to calculate profitability. The Board finally considered the amount of assets in each Fund, each Fund’s average account size and how those factors affect the Funds’ expense ratios, noting that, expenses generally decreased since last year’s review. The Board reviewed the Funds’ operating expenses and compared them to each Fund’s peer funds. The Board asked for, and IICO agreed to, expense reductions for certain Funds. After completing this examination, the Board concluded that each Fund’s expenses are appropriate at the current time.

Independent Fee Consultant Review

During August of 2012, and as part of their regularly scheduled meetings, the Disinterested Trustees of Ivy Funds (collectively, the “Ivy Funds” and any separate series thereof an “Ivy Fund”) reviewed a substantial amount of information in connection with considering the continuation of the existing investment management agreement currently in effect between Ivy Investment Management Company (“IICO”) and the Ivy Funds. The Disinterested Trustees of the Ivy Funds engaged an independent fee consultant to assist them in evaluating the reasonableness of the management fees charged by IICO to the Ivy Funds. The independent fee consultant’s review addressed the following fee-related factors:

1. The nature, extent and quality of IICO’s services to the Ivy Funds, including performance

2. Management fees (including any components thereof) charged by other mutual fund companies for like services

3. Management fees (including any components thereof) charged to institutional and other clients of IICO for like services

4. Costs to IICO and its affiliates of supplying services pursuant to the management fee agreement, and profit margins of IICO and its affiliates from supplying such services

5. Possible economies of scale as an Ivy Fund grows larger

The following summarizes the findings of the independent fee consultant retained by the Disinterested Trustees.¹

Summary Findings

The report stated that IICO delivered strong levels of performance in the longer-term periods and service to the Ivy Funds in relation to its management fees and relative to investment advisers of comparable mutual funds. For the three-year period ended March 31, 2012, when compared to their respective peer groups established by Lipper, Inc. (“Lipper”), approximately 19% of the Ivy Funds were in the top quintile of performance and 31% of the Ivy Funds were in the top two quintiles of performance. For the one-year period, 28% of the Ivy Funds were in the top two quintiles. For the five-year period, 58% of the Funds were in the top two quartiles and 79% were in the top three quartiles. The independent fee consultant noted that the Ivy Funds’ performance appeared to be grounded in a number of institutional competitive advantages at IICO, including stock selection ability, ability to attract top talent, strategic vision, performance-focused culture, ability to manage smaller AUM funds, ability to serve small account sizes and an effective trading infrastructure, and that these factors offer the Ivy Funds a reasonable expectation of strong investment and service performance over the long term.

The report stated that for the 12 months ended March 31, 2012, the total expense ratios of the Ivy Funds were 4% below the mean total expense ratios of comparable Lipper Expense Group peers and 15% below average total expense ratios of funds in the Lipper Expense Universe. The management fees for the Ivy Funds on average were approximately 8% below the mean management fees for their Lipper Expense Groups and approximately 11% below the mean for their Lipper Expense Universe. The independent fee consultant noted that the Ivy Funds’ small average

¹  The independent fee consultant’s evaluation was based on information provided by IICO, Lipper, Inc., other information providers and other independent analyses. The term “management fees” refers to the actual annual advisory and administrative fees, net of any fee waivers, paid by an Ivy Fund to IICO, as a percentage of average net assets. The term “total expenses” refers to the total annual expenses, net of any fee waivers, paid by an Ivy Fund, as a percentage of average net assets. Where these terms are used in reference to groups of Ivy Funds, numbers expressed are usually on an asset-weighted basis. Fee and performance data used in screening methodologies are usually for the period ending March 31, 2012. Lipper report data reflects Class A shares.

2012 SEMIANNUAL REPORT 211

account size introduces certain biases in the Lipper analyses that works against Ivy Funds in Lipper expense comparisons and, as a result, the Lipper findings may be considered conservative in that regard. The independent fee consultant found that within the larger Lipper averages, the management fees and total expenses of individual Ivy Funds and share classes are reasonable relative to their performance.

The report also stated that the management fees IICO charges to the Ivy Funds are reasonable in relation to the management fees it charges to its institutional account clients. The report noted that these institutional account clients have different service and infrastructure needs and in addition, based on industry data, the average spread between management fees charged to the Ivy Funds and those it charges to institutional account clients is reasonably close to the average fee spreads observed at other investment advisers in industry surveys.

The independent fee consultant found that the level of profit earned by IICO from managing the Ivy Funds appears to be reasonable. The report noted that IICO’s overall profitability from managing the Ivy Funds and its other operations is below the profitability of other similarly-sized, publicly traded mutual fund managers, but appears adequate to enable IICO to continue to provide quality support to the Ivy Funds and their shareholders.

The report stated that the independent fee consultant found the Ivy Funds’ fees and expenses reasonable in light of any possible economies of scale that may exist. The report went on to state that the Ivy Funds’ shareholders may realize lower expenses from growth in assets under management through management fee breakpoints, declines in transfer agency expenses, declines in custody contract rates and declines in other non-management expenses.

Conclusions

The independent fee consultant believes that the services provided by IICO and its affiliates and expenses incurred by the Ivy Funds in the previous twelve months are reasonable and provide adequate justification for renewal of the Ivy Funds’ existing advisory agreements.

Approval of Ivy Global Equity Income Fund

At a meeting of the Board of Trustees (the “Board”) of Ivy Funds (the “Trust”) held on May 22, 2012, the trustees, including all of the trustees who are not “interested persons” as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended (“Independent Trustees”), considered and approved an amendment to the Investment Management Agreement (the “Agreement”) between Ivy Investment Management Company (“IICO”) and the Trust, on behalf of Ivy Global Equity Income Fund (the “Fund”), to include the Fund under the Agreement. The Fund is a newly created series of the Trust.

The Independent Trustees were assisted in their consideration of the Agreement by independent legal counsel, and met with such counsel separately from representatives of IICO and the interested trustee. Independent legal counsel had provided the Board with a memorandum that discussed the various factors that the Board should consider as part of its consideration of the Agreement, including, among other things, the nature and the quality of the services proposed to be provided to the Fund by IICO, IICO’s projected profitability (including any fall-out benefits) from its proposed relationship with the Fund, projected economies of scale, the role played by the Independent Trustees and information on comparative fees and expenses. The material factors and conclusions that formed the basis for the Board’s determination to approve the Agreement are discussed below.

In considering the Agreement, the Board noted that the Fund would be managed in a substantially similar fashion as the equity portion of the Ivy Global Income Allocation Fund. Although the Fund has not yet commenced operations and therefore the Board did not have specific information to examine, the Board concluded that the Fund appeared to be designed to be able to achieve acceptable performance. The Board also considered the proposed expenses of the Fund, the cost of the services proposed to be provided by IICO, including as compared to the other funds in the Ivy Funds family, and the proposed expense cap agreement, and concluded that the proposed expenses of the Fund were acceptable. The Board, however, did not discuss the projected profitability of IICO in managing the Fund because the Fund had not yet commenced operations, but noted that it would monitor profitability once the Fund began operations. The Board considered the nature, extent and quality of services proposed to be provided to the Fund by IICO, taking into account the investment objective and strategy of the Fund based upon its experience with IICO, as well as the materials previously provided to the Board on the Fund. In addition, the Board reviewed the resources and key personnel of IICO, especially those proposed to provide investment management services to the Fund. The Board also considered other services proposed to be provided to the Fund by IICO, based upon its current experiences with IICO, such as monitoring adherence to the Ivy Funds’ 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 policies and procedures and with applicable securities laws and regulations. The Board concluded that the nature and extent of the services proposed to be provided by IICO are reasonable, considering the quality of the services currently provided by IICO for other funds of the Ivy Funds. The Board also discussed whether IICO would derive any other direct or indirect benefits from serving as investment adviser to the Fund. The Board considered the benefits that would 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 consideration of these and other factors, the Board concluded that neither IICO nor its affiliates would receive any additional direct benefits that would preclude the Board from approving the Agreement for the Fund. The Board did not discuss possible economies of scale because the Fund had not commenced operations, but took note of the Fund’s proposed advisory fee schedule.

212 SEMIANNUAL REPORT 2012

PROXY VOTING INFORMATION

Ivy Funds

Proxy Voting Guidelines

A description of the policies and procedures Ivy Funds 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 Trust 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

Ivy Funds

Portfolio holdings can be found on the Trust’s website at www.ivyfunds.com. Alternatively, a complete schedule of portfolio holdings of each Fund for the first and third quarters of each fiscal year is filed with the SEC and can be found on the Trust’s Form N-Q. These holdings may be viewed 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.

TO ALL TRADITIONAL IRA PLANHOLDERS:

Ivy Funds

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. A 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.

2012 SEMIANNUAL REPORT 213

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214 SEMIANNUAL REPORT 2012

The Ivy Funds Family

Domestic Equity Funds

Ivy Core Equity Fund

Ivy Dividend Opportunities Fund

Ivy Large Cap Growth Fund

Ivy Micro Cap Growth Fund

Ivy Mid Cap Growth Fund

Ivy Small Cap Growth Fund

Ivy Small Cap Value Fund

Ivy Tax-Managed Equity Fund

Ivy Value Fund

Global/International Funds

Ivy Cundill Global Value Fund

Ivy European Opportunities Fund

Ivy Global Equity Income Fund

Ivy Global Income Allocation Fund

Ivy International Core Equity Fund

Ivy International Growth Fund

Ivy Managed European/Pacific Fund

Ivy Managed International Opportunities Fund

Ivy Pacific Opportunities Fund

Specialty Funds

Ivy Asset Strategy Fund

Ivy Asset Strategy New Opportunities Fund

Ivy Balanced Fund

Ivy Energy Fund

Ivy Global Natural Resources Fund

Ivy Real Estate Securities Fund

Ivy Science and Technology Fund

Fixed Income Funds

Ivy Bond Fund

Ivy Global Bond Fund

Ivy High Income Fund

Ivy Limited-Term Bond Fund

Ivy Money Market Fund

Ivy Municipal Bond Fund

Ivy Municipal High Income 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, or summary prospectus, carefully before investing.

2012 SEMIANNUAL REPORT 215

SEMIANN-IVYFUNDS (9-12)

ITEM 2.    CODE OF ETHICS

Required in annual report only.

ITEM 3.    AUDIT COMMITTEE FINANCIAL EXPERT

Required in annual report only.

ITEM 4.    PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Required in annual report only.

ITEM 5.    AUDIT COMMITTEE OF LISTED REGISTRANTS

Not applicable.

ITEM 6.    SCHEDULE OF INVESTMENTS.

See Item 1 Shareholder Report.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not applicable.

ITEM 8.    PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS

Not applicable.

ITEM 10.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s board of 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
(Registrant)
By	/s/ Mara D. Herrington
	Mara D. Herrington, Vice President and Secretary

Date: December 6, 2012

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 6, 2012

By	/s/ Joseph W. Kauten
	Joseph W. Kauten, Vice President and Principal Financial Officer

Date: December 6, 2012

EX-99.CERT

EXHIBIT 99.CERT

CERTIFICATION

I, Henry J. Herrmann, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: December 6, 2012	/s/ Henry J. Herrmann
	Henry J. Herrmann, Principal Executive Officer

CERTIFICATION

I, Joseph W. Kauten, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: December 6, 2012	/s/ Joseph W. Kauten
	Joseph W. Kauten, Principal Financial Officer

EX-99.906CERT

EXHIBIT 99.906 CERT

CERTIFICATION UNDER SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

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

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

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

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

By	/s/ Henry J. Herrmann
	Henry J. Herrmann, Principal Executive Officer

Date: December 6, 2012

By	/s/ Joseph W. Kauten
	Joseph W. Kauten, Principal Financial Officer

Date: December 6, 2012