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Ivy VIP Small Cap Growth

  • $10.93 NAV as of 10/18/2018
  • ($-0.19) / -1.70% Daily NAV Change
  • 10.45% YTD (NAV)

Summary

Seeking small companies with significant growth potential

Sound philosophy
Seeks small-cap growth companies that are industry leaders, serving markets that are growing substantially and producing solid financial returns.
Experience & vision
Combined, the team has 75+ years of industry experience and 20+ years of experience working with small-cap strategies.
Consistent process
Since lead portfolio manager Tim Miller assumed management duties in April 2010, the Fund has had competitive performance versus its Morningstar Small Growth peers.

Morningstar Style Box

Growth
Medium
Source: Morningstar

Portfolio Management

Timothy J. Miller, CFA

  • Ivy Investment Management Company
  • 2 Years with Fund
  • 39 Years in Industry
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Tim Miller is co-portfolio manager of the small cap growth product suite of mutual funds and institutional accounts. He has been portfolio manager of the Ivy Small Cap Growth Fund since 2010. He was appointed to the leadership role of the small cap growth team and assumed co-portfolio manager responsibilities of the small cap growth product suite in 2016. Mr. Miller joined the organization in 2008 as a vice president and portfolio manager. He held portfolio manager responsibilities for Ivy Small Cap Value Fund and Ivy VIP Small Cap Value from 2008 to 2010. He was appointed senior vice president in 2011. Prior to joining the firm, Mr. Miller managed his personal funds in a hedged equity style from 2004 to 2007. From 1992 through mid-2004, he was affiliated with INVESCO Funds Group, including serving four years as its chief investment officer, five years as head of the growth funds group, and from 1993-2004 as lead manager of the INVESCO Dynamics Fund. Early in Mr. Miller's career, he spent 13 years affiliated with Mississippi Valley Advisors in St. Louis, as assistant director of equity research and co-manager of a small cap value fund. Mr. Miller graduated from St. Louis University in 1979 with a BSBA in Finance. He earned an MBA from the University of Missouri/St. Louis in 1983. Mr. Miller is a CFA charterholder. He is a member of the CFA Institute, the Denver Society of Security Analysts and the CFA Society of Kansas City.

Kenneth G. McQuade

  • Ivy Investment Management Company
  • 12 Years with Fund
  • 23 Years in Industry
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Ken McQuade is co-portfolio manager of the small cap growth product suite of mutual funds and institutional accounts. He has been portfolio manager of Ivy VIP Small Cap Growth since 2006. He was named co-portfolio manager of the small cap growth product suite in 2016. Mr. McQuade joined the organization in 1997 as an equity investment analyst. He was appointed assistant vice president in 2000. He assumed assistant portfolio manager responsibilities for small cap growth institutional accounts in 2003. He was appointed vice president in 2004 and senior vice president in 2016. Mr. McQuade earned a BS in Finance from Bradley University in 1992. Prior to joining the firm, he was affiliated with A.G. Edwards & Sons as a health care investment analyst.

Bradley P. Halverson, CFA

  • Ivy Investment Management Company
  • 2 Years with Fund
  • 16 Years in Industry
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Brad Halverson is co-portfolio manager of the small cap growth product suite of mutual funds and institutional accounts. He was named co-portfolio manager of the product suite in 2016. Mr. Halverson joined the organization in 2008 as an equity investment analyst on the Small Cap Growth team. He was appointed assistant vice president in 2013 and vice president in 2015. He was named assistant portfolio manager of small cap growth institutional accounts, serving in the role from 2014 to 2016. Prior to joining the firm, Mr. Halverson was associated with Northpointe Capital as an equity analyst responsible for researching growth stocks across micro, small, and mid cap portfolios. From 2002 to 2004 he was an associate in health care investment banking for A.G. Edwards & Sons, Inc. He was affiliated with Pricewaterhouse Coopers, LLP in positions of increasing responsibility from 1995 through 2000 culminating as a manager in business advisory services. Mr. Halverson graduated from Brigham Young University in 1995 with a BS and MS in Accounting. He earned an MBA with an emphasis in Finance and Corporate Strategy from the University of Michigan in 2002. Mr. Halverson is a CFA charterholder. He is a member of the CFA Institute. He is a former Certified Public Accountant (CPA).

Growth of a $10,000 Investment
through 9/30/2018

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

Quarterly Fund Commentary

Daily Prices as of 10/18/2018

Net Asset Value (NAV) $10.93
Daily NAV Change ($) ($-0.19) -1.70%
Weekly NAV Change ($) $0.30 2.79%
Public Offering Price (POP) $10.93

Fund Facts

CUSIP 46600H786
Fund Code 859
Fund Type Domestic Equity
Fund Inception 5/3/1994
Class Inception 5/3/1994
Fiscal Year End December
Dividends Paid May
Fund Assets (as of 9/30/2018) $345.3 mil
Total Equity Holdings (as of 9/30/2018) 86
Total Holdings (as of 9/30/2018) 94
Portfolio Turnover Rate (as of 6/30/2018) 23%
Morningstar Category Small Growth
Lipper Category Small-Cap Growth Funds
Benchmark Russell 2000 Growth 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.

Monthly Rates of Return

Average Annual Total Returns as of 9/30/2018
(Returns for periods of less than 1-yr are not annualized)
 
Russell 2000 Growth TR USD 15.76% 21.06% 17.98% 12.14% 12.65%
Morningstar Small Growth 18.94% 24.44% 18.39% 11.75% 12.57%
Fund at NAV 19.98% 26.46% 15.10% 11.12% 11.53% 10.76%

Quarterly Rates of Return

Average Annual Total Returns as of 9/30/2018
(Returns for periods of less than 1-yr are not annualized)
 
Russell 2000 Growth TR USD 15.76% 21.06% 17.98% 12.14% 12.65%
Morningstar Small Growth 18.94% 24.44% 18.39% 11.75% 12.57%
Fund at NAV 19.98% 26.46% 15.10% 11.12% 11.53% 10.76%

Calendar Year Return

Indexes 2013
Russell 2000 Growth TR USD 22.17 11.32 -1.38 5.60 43.30
Class II 23.12 2.91 1.88 1.59 43.36

Morningstar Ratings as of 9/30/2018 Morningstar Logo

Category: Small Growth
Ratings are based on risk-adjusted returns
Overall out of 606
3 Year out of 606
5 Year out of 532
10 Year out of 404

Morningstar Ranking as of 9/30/2018 Morningstar Logo

Category: Small Growth
 
Morningstar Ranking / # of Funds in Category displays the fund's actual rank within its Morningstar Category based on average annual total return and number of Funds in that Category. The Morningstar Percentile Ranking compares a Fund's Morningstar risk and return scores with all the Funds in the same Category, where 1% = Best and 100% = Worst.
1 Year 28/76 40
3 Year 71/75 85
5 Year 52/73 62
10 Year 49/64 71

Expense Ratios as of 4/30/2018

Net 1.14%
Gross 1.17%

3-Year Standard Deviation as of 9/30/2018

Russell 2000 Growth TR USD 14.14

3-Year MPT* Statistics as of 9/30/2018

*Modern Portfolio Theory
Alpha -1.42
Beta 0.93
R-Squared 89.17
Sharpe Ratio 1.08
Capture Ratio Upside: 87.64%
Downside: 92.44%

Distributions

Historical Prices Inception 5/3/1994

10/1/2018 $11.70 NO NO
10/2/2018 $11.53 NO NO
10/3/2018 $11.63 NO NO
10/4/2018 $11.41 NO NO
10/5/2018 $11.34 NO NO
10/8/2018 $11.21 NO NO
10/9/2018 $11.15 NO NO
10/10/2018 $10.80 NO NO
10/11/2018 $10.63 NO NO
10/12/2018 $10.79 NO NO
10/15/2018 $10.81 NO NO
10/16/2018 $11.16 NO NO
10/17/2018 $11.12 NO NO
10/18/2018 $10.93 NO NO

Historical Distributions Inception 5/3/1994

5/16/2018 $0.0482 Long: $1.357 Short: $0.501 $10.87 5/16/2018
5/17/2017 $0 Long: $0.259 Short: $0.000 $10.08 5/17/2017
5/18/2016 $0 Long: $1.067 Short: $0.000 $8.43 5/18/2016
5/20/2015 $0 Long: $1.972 Short: $0.000 $11.77 5/20/2015
5/21/2014 $0 Long: $1.181 Short: $0.441 $10.81 5/21/2014

*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 9/30/2018

NAV 0.35%
With Sales Charge 0.35%

Portfolio

Top 10 Equity Holdings as a % of net assets 9/30/2018

Teladoc Health, Inc. 2.93%
AMN Healthcare Services, Inc. U.S. health care staffing, recruitment and workforce solutions company 2.74%
Proofpoint, Inc. 2.25%
Mercury Computer Systems, Inc. Mercury Systems is a commercial provider of secure sensor and mission processing subsystems. Mercury’s solutions power a variety of critical defense and intelligence programs. 2.13%
John Bean Technologies Corp. John Bean Technologies Corp. designs, manufactures, tests and services systems and products for global industrial food processing customers through its FoodTech segment and for domestic and international air transportation customers through its AeroTech segment. 2.01%
Texas Roadhouse, Inc., Class A 1.98%
Paycom Software, Inc. Paycom Software, Inc. designs and develops software solutions. The Company provides data analytical software products to manage the employment life cycle from recruitment to retirement. Paycom Software serves customers in the United States. 1.95%
Wingstop, Inc. 1.73%
HealthEquity, Inc. 1.73%
Grand Canyon Education, Inc. Grand Canyon Education, Inc. provides online postsecondary education services in the United States. It focuses on offering graduate and undergraduate degree programs in education, business, and healthcare disciplines. 1.71%

Total Portfolio Holdings

Updated quarterly, upon availability.

Market Capitalization
as a % of equity assets as of 9/30/2018

Large ( > $10 bil) 1.3%
Medium ($2 - $10 bil) 86.0%
Small ( < $2 bil) 12.6%
Median Market Cap (as of 9/30/2018) $3.3 bil

Top 10 Industry Allocation
as a % of Equity Holdings as of 9/30/2018

Health Care Equipment 9.9%
Application Software 7.8%
Health Care Services 7.8%
Internet Software & Services 7.6%
Industrial Machinery 7.1%
Systems Software 4.4%
Restaurants 4.0%
Oil & Gas Exploration & Production 3.7%
Regional Banks 3.7%
Apparel Retail 3.7%

Sector Allocation
as a % of equity assets as of 9/30/2018

Information Technology 27.06%
Health Care 25.02%
Consumer Discretionary 22.03%
Industrials 14.32%
Financials 6.27%
Energy 3.89%
Consumer Staples 1.07%
Real Estate 0.34%

Portfolio Composition
as a % of net assets as of 9/30/2018

Domestic Common Stock 91.42%
Cash and Cash Equivalents 6.84%
Foreign Common Stock 1.72%
Other Financial Instruments 0.02%

Equity Country Allocation
as a % of equity assets as of 9/30/2018

United States 96.4%
Jersey 1.7%
Netherlands 1.6%
France 0.2%
United Kingdom 0.2%

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 Portfolio’s shares will change, and you could lose money on your investment. Investing in small-cap stocks may carry more risk than investing in stocks of larger more well-established companies. The Portfolio may invest in Initial Public Offerings (IPOs), which can have a significant positive impact on the Portfolio’s performance that may not be replicated in the future. These and other risks are more fully described in the Portfolio’s prospectus.

Index Description: Russell 2000 Growth is an unmanaged index comprised of securities that represent the small cap sector of the stock market. It is not possible to invest directly in an index.

Annuities are long-term financial products designed for retirement purposes. Annuity and life insurance guarantees are based on the financial strength and claims-paying ability of the issuing insurance company. The guarantees have no bearing on the performance of a variable investment option. Variable investment options are subject to market risk, including loss of principal. There are charges and expenses associated with annuities and variable life insurance products, including mortality and expense risk charges, management fees, administrative fees, expenses for optional riders and deferred sales charges for early withdrawals. Withdrawals before age 59 1/2 may be subject to a 10% IRS tax penalty and surrender charges may apply.

Fee Waiver and/or Expense Reimbursement: Through April 30, 2019, Ivy Investment Management Company (IICO), the Portfolio’s investment manager, Ivy Distributors, Inc. (IDI), the Portfolio ’s distributor, and/or Waddell & Reed Services Company, doing business as WI Services Company (WISC), the Portfolio’s transfer agent, have contractually agreed to reimburse sufficient management fees, 12b-1 fees and/or shareholder servicing fees to cap the total annual ordinary portfolio operating expenses (which would exclude interest, taxes, brokerage commissions, acquired fund fees and expenses and extraordinary expenses, if any) for Class II shares at 1.14%. Prior to that date, the expense limitation may not be terminated without the consent of the Board of Trustees.

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.

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.

Alpha, Beta, R-Squared, Standard Deviation, Sharpe Ratio and Capture Ratio are 5 year statistics. Alpha is a measure of a fund's actual returns and expected performance, given its level of risk (as measured by beta). Beta reflects the sensitivity of the fund's return to fluctuations in the market index. R-squared indicates how much of a fund's fluctuations were attributable to movements in the fund's benchmark. Standard deviation is a measure of how volatile a fund's returns are. Sharpe ratio is a measure of a fund's risk-adjusted performance. Capture ratio reflects the annualized product of fund vs. index returns for all months in which the index had a positive return (upside capture) or negative return (downside capture).

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.