[IVY FUNDS LOGO]
Ivy Cundill Global Value Fund
Ivy Developing Markets Fund
Ivy European Opportunities Fund
Ivy Global Fund
Ivy Global Natural Resources Fund
Ivy Global Science & Technology Fund
Ivy International Fund
Ivy International Small Companies Fund
Ivy International Value Fund
Ivy Pacific Opportunities Fund
Ivy Growth Fund
Ivy US Blue Chip Fund
Ivy US Emerging Growth Fund
Ivy Bond Fund
Ivy Money Market Fund
Each, a series of Ivy Fund (the "Funds")
Supplement Dated December 23, 2002 To
Statements of Additional Information Dated April 30, 2002
On December 16, 2002, Waddell & Reed Financial, Inc. ("Waddell & Reed"), a U.S. mutual fund firm, completed its acquisition of the entire operation of Mackenzie Investment Management Inc. ("MIMI"). Ivy Management, Inc. ("IMI"), which provides business management services to the Funds and investment advisory services to all Funds other than Ivy Global Natural Resources Fund, and Ivy Mackenzie Distributors, Inc. ("IMDI"), the Funds' distributor, are now indirect subsidiaries of Waddell & Reed.
Under the Investment Company Act of 1940, the transaction resulted in a change of control of IMI, and, therefore, constituted an assignment of the Funds' business management and, for all Funds other than Ivy Global Natural Resources Fund, investment advisory agreements and, for Ivy Cundill Global Value Fund, Ivy European Opportunities Fund and Ivy International Small Companies Fund, subadvisory agreements, which resulted in a termination of those agreements. At meetings of shareholders held on December 10, 2002, shareholders of the Funds approved new business management and, if applicable, investment advisory agreements and subadvisory agreements. The new agreements are substantially identical in all respects to the agreements in effect prior to December 16, 2002 except for the dates of execution and termination and other non-material changes, with the exception of the new agreements between IMI, Henderson Global Investors (North America) Inc. ("HGINA") and Henderson Investment Management Ltd. ("Henderson") with respect to Ivy European Opportunities Fund and Ivy International Small Companies Fund (the "New Henderson Agreements"). Under the New Henderson Agreements, HGINA will act as subadviser to IMI for these two Funds. Henderson, the two Funds' former subadviser, continues as a subadviser, but pursuant to a subadvisory agreement with HGINA instead of with IMI. The New Henderson Agreements also increased the subadvisory fee rates that IMI pays to HGINA for the subadvisory services (although the overall advisory fee rates each of the two Funds pays for advisory services has not changed). Under the New Henderson Agreements, IMI pays HGINA for its services a fee payable monthly at an annual rate of 0.45% of the first $100,000,000 of net assets and 0.40% thereafter of the portion of each Fund's average daily net as sets managed by HGINA. Henderson's existing portfolio management team continues to manage these two Funds.
IMI is a wholly owned subsidiary of Ivy Acquisition Corporation ("IAC"), 925 South Federal Highway, Suite 600, Boca Raton, Florida 33432. IAC is a wholly owned subsidiary of Waddell & Reed, which is located at 6300 Lamar Avenue, Overland Park, Kansas 66202.
Effective December 17, 2002, IAC assumed all of MIMI's duties under the Fund Accounting Services Agreement and the Administrative Services Agreement.
This second paragraph under "Trustees and Officers" and the tables and footnotes following that paragraph are revised in their entirety to read as follows:
The address for each Trustee and Executive Officer in the following tables is 925 South Federal Highway, Suite 600, Boca Raton, Florida 33432. Each Trustee and Officer serves an indefinite term, until he or she dies, resigns or becomes disqualified. The non-Independent Trustees (as defined below) and Executive Officers of the Trust and their principal occupations during the past five years are:
Name and Age
|
Position(s) Held with Trust
|
Term of Office and Length of Time Served
|
Principal
Occupation(s)
During Past 5 Years
| Total Number of Ivy Funds Overseen |
Other
Directorships
Held
|
Keith A. Tucker*
(57) | Trustee and Chairman | Trustee since December 16, 2002 | Chairman of the Board, Director and CEO of Waddell & Reed; Chairman of the Board of Waddell & Reed, Inc. ("WRI") (underwriter); Chairman of the Board and Director of Waddell & Reed Investment Management Co. ("WRIMCO"); Chairman of the Board and Director of Waddell & Reed Services Co.; President and CEO of Waddell & Reed Financial Services, Inc.; Chairman of the Board of Waddell & Reed Development, Inc.; Chairman of the Board of Waddell & Reed Distributors, Inc. | 16 | Chairman of the Board and Director of Waddell & Reed Advisors Funds (20 portfolios overseen); Chairman of the Board and Director of W&R Funds, Inc. (12 portfolios overseen); Chairman of the Board and Director of W&R Target Funds, Inc. (12 portfolios overseen); Chairman of the Board and Director of Waddell & Reed InvestEd Portfolios, Inc. (3 portfolios overseen). |
Henry J. Herrmann*
(60) | Trustee and President | Trustee since December 16, 2002 | Chairman of the Board, CEO and President of IMI and IAC; President, Chief Investment Officer and Director of Waddell & Reed; President and CEO of WRIMCO; Chief Investment Officer of WRIMCO; Chief Investment Officer of Waddell & Reed Financial Services, Inc.; Executive Vice President of Waddell & Reed Financial Services, Inc.; formerly, Chairman of the Board of Austin, Calvert & Flavin, Inc. | 16 | Chairman of the Board and Director, Ivy Mackenzie Services Corporation; Director of WRI; Director of Waddell & Reed Development, Inc.; Director of Waddell & Reed Services Co.; Director of Austin Calvert & Flavin, Inc.; Director and President of Waddell & Reed Advisors Funds (20 portfolios overseen); Director and President of W&R Funds, Inc. (12 portfolios overseen); Director and President of W&R Target Funds, Inc. (12 portfolios overseen); Director and President of Waddell & Reed InvestEd Portfolios, Inc. (3 portfolios overseen). |
Keith J. Carlson
(45) | Principal Executive Officer | Appointed December 17, 2002 | Director, CEO and President, IMDI; formerly, Trustee and Chairman of the Trust; formerly, Director, Chairman and Senior Vice President of IMI; formerly, Director, President and Chief Executive Officer of MIMI; formerly, Director, President and Chairman of Ivy Mackenzie Services Corp. | 16 | None. |
Kristen A. Richards
(35) | Secretary and Vice President | Appointed December 17, 2002 | Vice President, Associate General Counsel and Chief Compliance Officer of IAC, IMI and WRIMCO; Vice President, Secretary and Associate General Counsel of each of the Waddell & Reed Advisors Funds, W&R Funds, Inc., W&R Target Funds, Inc. and W&R InvestEd Portfolios, Inc.; formerly Assistant Secretary of each of those funds; formerly, Compliance Officer of WRIMCO. | 16 | None. |
Beverly J. Yanowitch
(52) | Treasurer | 1 year | Senior Vice President, Chief Financial Officer and Treasurer of IAC, IMI and Ivy Mackenzie Services Corporation; Senior Vice President, Treasurer and Director, IMDI; formerly, Vice President, Chief Financial Officer and Treasurer of MIMI. | 16 | None. |
* Trustees considered by the Trust and its counsel to be "interested persons" (as defined in the 1940 Act) of the Funds or of their investment manager because of their employment by Waddell & Reed or its subsidiaries.
The Trustees who are not "interested persons" of the Trust within the meaning of Section 2(a)(19) of the 1940 Act ("Independent Trustees") and their principal occupations during the past five years are:
Name and Age
|
Position(s) Held with Trust
|
Term of Office and Length of Time Served
|
Principal
Occupation(s)
During Past 5 Years
| Total Number of Ivy Funds Overseen |
Other
Directorships
Held
|
Jarold W. Boettcher (62) | Trustee | Trustee since December 16, 2002 | President of Boettcher Enterprises, Inc. (diversified agricultural products and services); President of Boettcher Supply, Inc. (electrical and plumbing supplies distributor). | 16 | Director of Guaranty State Bank & Trust Co.; Director of Guaranty, Inc. |
James D. Gressett
(52) | Trustee | Trustee since December 16, 2002 | CEO of PacPizza, Inc.; Secretary of Street Homes, LLP; formerly, President of Alien, Inc. (real estate development). | 16 | Director of Collins Financial Services. |
Joseph Harroz, Jr.
(35) | Trustee | Trustee since December 16, 2002 | General Counsel, University of Oklahoma, Cameron University and Rogers State University; University-wide Vice President of the University of Oklahoma; Adjunct Professor of Law, University of Oklahoma College of Law; Managing Member, Harroz Investment, LLC (commercial real estate); Managing Member, JHJ Investments, LLC (commercial real estate). | 16 | Co-Lead Independent Director of Waddell & Reed Advisors Funds (20 portfolios overseen); Co-Lead Independent Director of W&R Target Funds, Inc. (12 portfolios overseen); Co-Lead Independent Director of W&R Funds, Inc. (12 portfolios overseen); Co-Lead Independent Director of Waddell & Reed InvestEd Portfolios, Inc. (3 portfolios overseen). |
Glendon E. Johnson, Jr. (51) | Trustee | Trustee since December 16, 2002 | Of Counsel, Lee & Smith, PC (law firm); Member/Manager, Castle Valley Ranches, LLC, formerly Partner, Kelley, Drye & Warren LLP (law firm). | 16 | None. |
Eleanor B. Schwartz (65)
|
Trustee
|
Trustee since December 16, 2002
|
Professor of Business Administration, University of Missouri-Kansas City; formerly, Chancellor of University of Missouri-Kansas City.
|
16
|
Director of Waddell & Reed Advisors Funds (20 portfolios overseen); Director of W&R Target Funds, Inc. (12 portfolios overseen); Director of W&R Funds, Inc. (12 portfolios overseen); Director of Waddell & Reed InvestEd Portfolios, Inc. (3 portfolios overseen).
|
Michael G. Smith
(58) | Trustee | Trustee since December 16, 2002 | Associated with Graue Mill Partners, LLC; formerly, Managing Director-Institutional Sales, Merrill Lynch. | 16 | None. |
Edward M. Tighe
(60) | Trustee | 3 years | Chairman, CEO and Director of JBE Technology Group, Inc. (telecommunications and computer network consulting); President of Global Mutual Fund Services.; President and CEO of Global Technology. | 16 | Director of Hansberger Institutional Funds (2 portfolios overseen); Director of Asgard Holding, LLC. |
Each of the foregoing Trustees other than Mr. Edward Tighe was elected at a shareholder meeting held on December 10, 2002 and became a Trustee upon the closing of the acquisition of IAC by Waddell & Reed on December 16, 2002.
The following sentences are added after the first table under "Compensation Table" under "Trustees and Officers":
Trustee Compensation and Share Ownership. None of the currently serving Trustees other than Mr. Tighe received any compensation from the Funds for the fiscal year ended December 31, 2001.
As of December 31, 2001, none of the currently serving Trustees other than Mr. Tighe owned any shares of any of the Funds.
[IVY LOGO]
Ivy Cundill Global Value Fund
Ivy Developing Markets Fund
Ivy European Opportunities Fund
Ivy Global Fund
Ivy Global Natural Resources Fund
Ivy Global Science & Technology Fund
Ivy International Fund
Ivy International Growth Fund
Ivy International Small Companies Fund
Ivy International Value Fund
Ivy Pacific Opportunities Fund
Ivy Growth Fund
Ivy US Blue Chip Fund
Ivy US Emerging Growth Fund
Ivy Bond Fund
Ivy Money Market Fund
Each, a series of Ivy Fund (the "Funds")
Supplement Dated January 10, 2003 To Prospectus Dated April 30, 2002
(as supplemented on May 16, 2002, August 29, 2002 and December 23, 2002)
and To Statement of Additional Information Dated April 30, 2002
(as supplemented on December 23, 2002)
Until December 31, 2002, Ivy Management, Inc. ("IMI") provided business
management services to the Funds and investment advisory services to all
Funds other than Ivy Global Natural Resources Fund.
On December 31, 2002, IMI, an indirect wholly owned subsidiary of Waddell &
Reed Financial, Inc. ("Waddell & Reed") and a wholly owned subsidiary of
Ivy Acquisition Corporation ("IAC"), merged with and into IAC, a wholly
owned subsidiary of Waddell & Reed. IAC is an SEC-registered investment
adviser with approximately $1.6 billion in assets under management as of
December 31, 2002 (after giving effect to the merger). Upon effectiveness
of the merger, IAC changed its name to Waddell & Reed Ivy Investment
Company ("WRIICO").
Effective December 31, 2002, WRIICO assumed all of IMI's duties with
respect to the Funds and began providing business management services to
the Funds and investment advisory services to all Funds other than Ivy
Global Natural Resources Fund. The terms and conditions of the agreements
under which WRIICO provides those services to the Funds are exactly the
same as the terms and conditions of the agreements in effect prior to
December 31, 2002 between the Funds and IMI. IMI employees or officers who
were serving as portfolio managers of the Funds continue to serve as
portfolio managers of the Funds after the merger, as employees or officers
of WRIICO. Each of the portfolio managers who was an employee or officer of
IMI has the same title with WRIICO as he or she had with IMI.
Effective December 31, 2002, Ivy Mackenzie Services, Inc. changed its name
to Ivy Services, Inc.
Currently Deloitte & Touche LLP serves as the independent auditors to the
Funds, and Bell, Boyd & Lloyd LLC serves as counsel for the Funds and to
the Independent Trustees.
