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Ivy Mid Cap Income Opportunities Fund

  • $14.38 NAV as of 7/13/2018
  • ($0.05) / 0.35% Daily NAV Change
  • 5.48% YTD (NAV)

Summary

Dividend income, not just for large caps

Total return potential with lower volatility
By focusing on dividend-paying stocks, the Fund has the potential to lower the volatility of a mid-cap portfolio and provide a growing stream of income while providing capital appreciation for the long-term.
Strategy
A concentrated, equally weighted portfolio focusing on mid-cap companies emphasizing investments in dividend-paying and other income-producing securities.
Experienced management
Portfolio management team has a combined 40+ years of industry experience and more than 20 years of mid-cap experience.

Morningstar Style Box

Value
Medium
Source: Morningstar

Portfolio Management

Kimberly A. Scott, CFA

  • Ivy Investment Management Company
  • 3 Years with Fund
  • 31 Years in Industry
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Kim Scott is co-portfolio manager of the mid cap growth product suite of mutual funds and institutional accounts. She has been portfolio manager of Ivy Mid Cap Growth Fund since 2001 and of Ivy VIP Mid Cap Growth since 2005. She has been co-portfolio manager of Ivy Mid Cap Income Opportunities Fund since 2014. She assumed co-portfolio manager responsibilities for the mid cap growth product suite in 2016. Ms. Scott joined the organization in 1999 as an equity investment analyst. She was appointed assistant vice president in 2000. She was appointed vice president in 2001 and senior vice president in 2004. Prior to joining the firm, Ms. Scott served in various levels of research positions throughout her career affiliated with the following companies: Bartlett & Company, NBD Bank, Johnson Investment Counsel, Inc. and the University of Cincinnati Medical Center. Her primary responsibilities included fundamental analysis of companies and equities for mutual funds, separate accounts, and personal trusts. Through this experience, Ms. Scott provided sector coverage for consumer non-durables, technology, retail, food and beverage, and tobacco. Ms. Scott graduated from the University of Kansas in 1982 with a BS in Microbiology. She earned an MBA in Finance from the University of Cincinnati in 1987. Ms. Scott is a CFA charterholder. She is a member of the CFA Institute and the CFA Society of Kansas City.

Nathan A. Brown, CFA

  • Ivy Investment Management Company
  • 3 Years with Fund
  • 19 Years in Industry
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Nathan Brown is co-portfolio manager of the mid cap growth product suite of mutual funds and institutional accounts. He has been co-portfolio manager of Ivy Mid Cap Income Opportunities Fund since 2014. He had been assistant portfolio manager of Ivy Mid Cap Growth Fund and Ivy VIP Mid Cap Growth since 2011. He was named co-portfolio manager of the mid cap growth product suite in 2016. Mr. Brown joined the organization in 2003 as an equity investment analyst. He was appointed assistant vice president in 2010 and vice president in 2014. Prior to joining the firm, Mr. Brown interned with Morgan Keegan. From 1999 to 2001 he completed five rotations at General Electric-Aircraft Engine's financial management program. In 1999 he was a securities analyst for Krause Fund, where his responsibilities were concentrated in the utilities sector. Mr. Brown graduated with honors from the University of Iowa, Henry B. Tippie School of Business in 1999 with a BBA in Finance. He earned an MBA with an emphasis in Finance and Accounting from Vanderbilt University, Owen Graduate School of Management in 2003. Mr. Brown is a CFA charterholder. He is a member of the CFA Institute and the CFA Society of Kansas City.

Growth of a $10,000 Investment
through 6/30/2018

Assumes an investment over 10 years or life of the share class, reinvestment of dividends and capital gains, and does not include the effect of sales charges or taxes.

Documents

Perspectives

MCIO
  • Ivy Mid Cap Income Opportunities Fund

An income fund focused on earnings growth

For most of calendar year 2016, the market favored equity strategies focused on high-dividend yields. However, the market changed direction after the U.S. election, when investors re-embraced risk and adopted a more pro-growth, pro-cyclical investment stance.

Quarterly Fund Commentary

Daily Prices as of 7/13/2018

Net Asset Value (NAV) $14.38
Daily NAV Change ($) ($0.05) 0.35%
Weekly NAV Change ($) $0.16 1.13%
Public Offering Price (POP) $14.38

Fund Facts

Ticker Symbol IVOYX
CUSIP 46600B706
Fund Code 733
Fund Type Domestic Equity
Fund Inception 10/1/2014
Class Inception 10/1/2014
Fiscal Year End March
Dividends Paid March, June, September, December
Fund Assets (as of 6/30/2018) $349.6 mil
Total Equity Holdings (as of 6/30/2018) 35
Total Holdings (as of 6/30/2018) 36
Portfolio Turnover Rate (as of 3/31/2018) 42%
Lipper Category Mid-Cap Core Funds
Morningstar Category Mid-Cap Value
Benchmark Russell Mid Cap TR USD

Performance

Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.

Class Y shares are not subject to sales charges.

Monthly Rates of Return

Average Annual Total Returns as of 6/30/2018
(Returns for periods of less than 1-yr are not annualized)
 
Lipper Mid-Cap Core Funds 1.58% 10.44% 7.84% 10.38% 8.80%
Russell Mid Cap TR USD 2.35% 12.33% 9.58% 12.22% 10.23%
Fund at NAV 2.40% 11.93% 10.33% 10.70%

Quarterly Rates of Return

Average Annual Total Returns as of 6/30/2018
(Returns for periods of less than 1-yr are not annualized)
 
Lipper Mid-Cap Core Funds 1.58% 10.44% 7.84% 10.38% 8.80%
Russell Mid Cap TR USD 2.35% 12.33% 9.58% 12.22% 10.23%
Fund at NAV 2.40% 11.93% 10.33% 10.70%

Calendar Year Return

  2013
Russell Mid Cap TR USD 13.22 -2.44 13.80 18.52
Class Y -3.54 22.38 11.96

Morningstar Ratings as of 6/30/2018 Morningstar Logo

Category: Mid-Cap Value
Ratings are based on risk-adjusted returns
Overall out of 365
3 Year out of 365
5 Year out of —
10 Year out of —

Lipper Ranking through 6/30/2018 Lipper Logo

Category: Mid-Cap Core Funds
 
Rankings are based on average annual total returns, but do not consider sales charges.
1 Year 175/454 39
3 Year 65/366 18
5 Year
10 Year

Expense Ratios as of 7/5/2017

Net 1.35%
Gross 1.37%

5-Year Standard Deviation as of

Russell Mid Cap TR USD N/A

Distributions

Historical Prices Inception 10/1/2014

7/2/2018 $13.99 NO NO
7/3/2018 $14.00 NO NO
7/5/2018 $14.13 NO NO
7/6/2018 $14.22 NO NO
7/9/2018 $14.31 NO NO
7/10/2018 $14.33 NO NO
7/11/2018 $14.25 NO NO
7/12/2018 $14.33 NO NO
7/13/2018 $14.38 NO NO

Historical Distributions Inception 10/1/2014

3/15/2018 $0.025 Long: $0.000 Short: $0.000 $14.13 3/15/2018
12/14/2017 $0.109 Long: $0.000 Short: $0.000 $13.49 12/14/2017
9/14/2017 $0.035 Long: $0.000 Short: $0.000 $12.69 9/14/2017
6/15/2017 $0.012 Long: $0.000 Short: $0.000 $12.67 6/15/2017
3/16/2017 $0.001 Long: $0.000 Short: $0.000 $12.83 3/16/2017
12/8/2016 $0.067 Long: $0.000 Short: $0.000 $12.52 12/8/2016
9/15/2016 $0.035 Long: $0.000 Short: $0.000 $11.61 9/15/2016
12/10/2015 $0.072 Long: $0.000 Short: $0.015 $10.25 12/10/2015
9/10/2015 $0.04 Long: $0.000 Short: $0.000 $10.22 9/10/2015
6/11/2015 $0.04 Long: $0.000 Short: $0.000 $11.02 6/11/2015
3/12/2015 $0.015 Long: $0.000 Short: $0.000 $10.97 3/12/2015
12/11/2014 $0.036 Long: $0.000 Short: $0.003 $10.59 12/11/2014

*Special Dividend
The table includes the daily prices at NAV (net asset value) for the history of this fund's selected share class. NAV is the amount per share you would receive if you sold shares that day.

12-Month Trailing Dist. Yield as of 6/30/2018

NAV 1.53%
With Sales Charge 1.53%

Annualized 30-Day SEC Yield as of 6/30/2018

Subsidized - NAV 1.33%
Unsubsidized - NAV 1.33%

Portfolio

Top 10 Equity Holdings as a % of net assets 6/30/2018

RPM International, Inc. RPM International Inc. (RPM), through its subsidiaries manufacture, market and sell various specialty chemical product lines, including specialty paints, protective coatings, roofing systems, sealants and adhesives. 3.27%
Targa Resources Corp. Targa Resources Corp. (Targa), formerly Targa Resources Investments Inc., is a sole member of Targa Resources GP LLC, the managing general partner of Targa Resources Partners LP (the Partnership). 3.05%
Clorox Co. (The) The Clorox Co. manufactures and markets consumer and institutional products in segments including Cleaning, Lifestyle, Household and International. These include a wide range of laundry, cleaning, packaging, food, water filtration, personal care and other products. Clorox was founded in 1913 and is headquartered in Oakland, CA. 3.01%
Kellogg Co. Kellogg Company, together with its subsidiaries, manufactures and markets ready-to-eat cereal and convenience foods. The company operates through U.S. Morning Foods, U.S. Snacks, U.S. Specialty, North America Other, Europe, Latin America, and Asia Pacific segments. 2.99%
OGE Energy Corp. OGE Energy Corp., through its principal subsidiary Oklahoma Gas and Electric Company, generates, transmits, and distributes electricity to wholesale and retail customers in communities in Oklahoma and western Arkansas. The Company, through Enogex Inc., operates natural gas transmission and gathering pipelines, has interests in gas processing plants, and markets electricity. 2.95%
Broadridge Financial Solutions, Inc. Broadridge Financial Solutions, Inc. provides technology-based outsourcing solutions to the financial services industry to help serve retail and institutional customers across the entire investment processing cycle. 2.89%
Leggett & Platt, Inc. Leggett & Platt conceives, designs, and produces a diverse array of products that can be found in most homes, offices, and vehicles. Leggett & Platt, which pioneered sleep technology when it introduced its bedspring more than 125 years ago, is a diversified manufacturer, serving a broad suite of customers and U.S. companies. 2.89%
American Campus Communities, Inc. American Campus Communities, Inc. is a self-managed and self-administered equity real estate investment trust. 2.88%
HealthSouth Corp. Encompass Health (formerly HealthSouth) is one of the largest U.S. providers of in-patient rehabilitation hospitals and home-based care services. It operates in 36 states and Puerto Rico. 2.87%
Snap-on, Inc. Snap-on Inc. develops, manufactures and distributes tool and equipment solutions worldwide. Customers include professional service technicians and motor service shop owners, among others 2.86%

Total Portfolio Holdings

Updated quarterly, upon availability.

Market Capitalization
as a % of equity assets as of 6/30/2018

Large ( > $10 bil) 48.3%
Medium ($2 - $10 bil) 49.0%
Small ( < $2 bil) 2.8%
Median Market Cap (as of 6/30/2018) $9.1 bil

Top 10 Industry Allocation
as a % of Equity Holdings as of 6/30/2018

Paper Packaging 8.4%
Data Processing & Outsourced Services 5.8%
Regional Banks 5.6%
Health Care Services 5.5%
Specialty Chemicals 3.3%
Oil & Gas Storage & Transportation 3.1%
Household Products 3.1%
Packaged Foods & Meats 3.0%
Electric Utilities 3.0%
Home Furnishings 2.9%

Sector Allocation
as a % of equity assets as of 6/30/2018

Consumer Discretionary 22.79%
Industrials 16.77%
Materials 14.55%
Information Technology 13.92%
Financials 8.48%
Health Care 8.38%
Consumer Staples 6.09%
Energy 3.10%
Utilities 3.00%
Real Estate 2.92%

Portfolio Composition
as a % of net assets as of 6/30/2018

Domestic Common Stock 98.48%
Cash and Cash Equivalents 1.52%

Equity Country Allocation
as a % of equity assets as of 6/30/2018

United States 100.0%

Total Portfolio Holdings

Updated quarterly, upon availability.

Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.

Risk Factors: The value of the Fund’s shares will change, and you could lose money on your investment. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Investing in mid-cap stocks may carry more risk than investing in stocks of larger, more well-established companies. The Fund’s emphasis on dividend-paying stocks involves the risk that such stocks may fall out of favor with investors and underperform non-dividend paying stocks and the market as a whole over any period of time. In addition, there is no guarantee that the companies in which the Fund invests will declare dividends in the future or that dividends, if declared, will remain at current levels or increase over time. The amount of any dividend the company may pay may fluctuate significantly. In addition, the value of dividend-paying common stocks can decline when interest rates rise as fixed-income investments become more attractive to investors. This risk may be greater due to the current period of historically low interest rates. The Fund typically holds a limited number of stocks (generally 35 to 50). As a result, the appreciation or depreciation of any one security held by the Fund will have a greater impact on the Fund’s net asset value than it would if the Fund invested in a large number of securities. Not all funds or fund classes may be offered at all broker/dealers. These and other risks are more fully described in the Fund’s prospectus.

Index Description: Russell Midcap is an unmanaged index comprised of securities that represent the mid-cap sector of the stock market. It is not possible to invest directly in an index.

Fee Waiver and/or Expense Reimbursement: Through July 31, 2018, Ivy Investment Management Company (IICO), the Fund’s investment manager, Ivy Distributors, Inc. (IDI), the Fund’s distributor, and/or Waddell & Reed Services Company,doing business as WI Services Company (WISC), the Fund’s transfer agent, have contractually agreed to reimburse sufficient management fees, 12b-1 fees and/or shareholder servicing fees tocap the total annual ordinary fund operating expenses for Class A shares at 1.35%, Class C shares at 2.07%, Class E shares at 1.30%, Class I shares at 1.05%, Class R shares at 1.80%, Class N shares at 1.05% and Class Y shares at 1.35%. Prior to that date, the expense limitation may not be terminated by IICO, IDI, WISC or the Board of Trustees (Board)

Pricing: All prices and year-to-date returns are based on closing quotes unless noted, as supplied to the NASDAQ by 6:00 p.m. Eastern time. YTD Prices can be updated 3 to 4 hours after the Daily Pricing information which can result in mismatching data.

Style Analysis: The Morningstar Style Box reveals a fund's investment style. For equity funds the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend, or growth). For fixed-income funds, the vertical axis shows the credit quality of the bonds owned and the horizontal axis shows interest rate sensitivity as measured by a bond's effective duration. Morningstar seeks credit rating information from fund companies on a periodic basis (e.g., quarterly). In compiling credit rating information, Morningstar instructs fund companies to only use ratings that have been assigned by the following Nationally Recognized Statistical Rating Organizations (NRSROs): Moody's, Standard & Poor's, Fitch, and Egan-Jones. If two NRSROs have rated a security, fund companies are to report the lowest rating; if three or more NRSROs have rated the same security differently, fund companies are to report the rating that is in the middle. For example, if NRSRO X rates a security AA-, NRSRO Y rates the same security an A and NRSRO Z rates it a BBB+, the fund company should use the credit rating of 'A' in its reporting to Morningstar. PLEASE NOTE: Morningstar, Inc. is not itself an NRSRO nor does it issue a credit rating on the fund. An NRSRO rating on a fixed-income security can change from time-to-time. For credit quality, Morningstar combines the credit rating information provided by the fund companies with an average default rate calculation to come up with a weighted-average credit quality. The weighted-average credit quality is currently a letter that roughly corresponds to the scale used by a leading NRSRO. Bond funds are assigned a style box placement of "low", "medium", or "high" based on their average credit quality. Funds with a low credit quality are those whose weighted-average credit quality is determined to be less than "BBB-"; medium are those less than "AA-", but greater or equal to "BBB-"; and high are those with a weighted-average credit quality of "AA-" or higher. When classifying a bond portfolio, Morningstar first maps the NRSRO credit ratings of the underlying holdings to their respective default rates (as determined by Morningstar's analysis of actual historical default rates). Morningstar then averages these default rates to determine the average default rate for the entire bond fund. Finally, Morningstar maps this average default rate to its corresponding credit rating along a convex curve. For interest-rate sensitivity, Morningstar obtains from fund companies the average effective duration. Generally, Morningstar classifies a fixed-income fund's interest-rate sensitivity based on the effective duration of the Morningstar Core Bond Index (MCBI), which is currently three years. The classification of Limited will be assigned to those funds whose average effective duration is between 25% to 75% of MCBI's average effective duration; funds whose average effective duration is between 75% to 125% of the MCBI will be classified as Moderate; and those that are at 125% or greater of the average effective duration of the MCBI will be classified as Extensive. For municipal bond funds, Morningstar also obtains from fund companies the average effective duration. In these cases static breakpoints are utilized. These breakpoints are as follows: (i) Limited: 4.5 years or less; (ii) Moderate: more than 4.5 years but less than 7 years; and (iii) Extensive: more than 7 years. In addition, for non-US taxable and non-US domiciled fixed income funds static duration breakpoints are used: (i) Limited: less than or equal to 3.5 years; (ii) Moderate: greater than 3.5 and less than equal to 6 years; (iii) Extensive: greater than 6 years.

Unsubsidized yields reflect what the yield would have been without the effect of reimbursements and waivers. The adviser and its affiliates have or may voluntarily waive a portion of their fees (including, but not limited to, distribution and service (12b-1) fees) and reimburse certain expenses. There is no guarantee that the fund will avoid a negative yield. Such undertaking may be amended or withdrawn at any time.

30-Day SEC Yield: is calculated based on a formula mandated by the Securities and Exchange Commission (SEC) that calculates a fund's hypothetical annualized income, as a percentage of its assets. A security's income, for the purposes of this calculation, is based on the current market yield to maturity (in the case of bonds) or projected dividend yield (for stocks) of the fund's holdings over a trailing 30 day period. This hypothetical income will differ (at times, significantly) from the fund's actual experience; as a result, income distributions from the fund may be higher or lower than implied by the SEC yield.

12-Month Trailing Distribution Yield: at NAV refers to the 12-month historical cash flow paid over the past 12 months in dividends, divided by the past months ending NAV.

The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance, and does not include the effects of sales charges. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

© 2018 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

Information is subject to change and is not intended to represent any past or future investment recommendations.

YTD Prices can be updated 3 to 4 hours after the Daily Pricing information which can result in mismatching data.