Ivy Funds NCSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-1028

Ivy Funds

(Exact name of registrant as specified in charter)

6300 Lamar Avenue, Overland Park, Kansas 66202

(Address of principal executive offices) (Zip code)

Kristen A. Richards
6300 Lamar Avenue
Overland Park, Kansas 66202

(Name and address of agent for service)

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

Date of fiscal year end: March 31

Date of reporting period: September 30, 2004

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

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

ITEM 1. REPORTS TO STOCKHOLDERS.

Semiannual Report

September 30, 2004

Ivy Balanced Fund

Ivy Bond Fund

Ivy Cash Reserves Fund

Ivy Cundill Global Value Fund

Ivy Dividend Income Fund

Ivy European Opportunities Fund

Ivy Global Natural Resources Fund

Ivy International Fund

Ivy International Balanced Fund

Ivy International Value Fund

Ivy Mortgage Securities Fund

Ivy Pacific Opportunities Fund

Ivy Real Estate Securities Fund

Ivy Small Cap Value Fund

Ivy Value Fund

3		President's Letter
5		Illustration of Fund Expenses
21		Ivy Balanced Fund
36		Ivy Bond Fund
51		Ivy Cash Reserves Fund
62		Ivy Cundill Global Value Fund
75		Ivy Dividend Income Fund
87		Ivy European Opportunities Fund
100		Ivy Global Natural Resources Fund
113		Ivy International Fund
127		Ivy International Balanced Fund
142		Ivy International Value Fund
155		Ivy Mortgage Securities Fund
168		Ivy Pacific Opportunities Fund
181		Ivy Real Estate Securities Fund
192		Ivy Small Cap Value Fund
208		Ivy Value Fund
221		Notes to Financial Statements
253		Report of Independent Registered Public Accounting Firm
254		Shareholder Meeting Results
255		Proxy Voting Information
256		Quarterly Portfolio Schedule Information
257		IRA Disclosure

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

President's Letter

September 30, 2004

Dear Shareholder:

Enclosed is our report on your Fund's operations for the six months ended September 30, 2004.

After a strong start at the beginning of 2004, the markets showed disappointing performance for the next six months. The S&P 500 had a negative return of 0.18 percent for the period, while the Dow Jones Industrial Average declined 1.65 percent. Bonds fared slightly better, with the Lehman Brothers U.S. Credit Index showing a positive return of 0.63 percent for the period.

This essentially flat period for the markets was the result of a number of factors. First and foremost, the high price of oil picked the pockets of both consumers and corporations and acted as a drag on economic growth. In addition, the Federal Reserve Board went into tightening mode, raising interest rates on June 30 for the first time in nearly four years. Election uncertainty, the situation in Iraq, hurricanes and talk about the economy hitting a "soft spot" also shook investor confidence.

Economic growth did slow considerably in 2004, but that wasn't entirely unexpected. The previous growth rate - fueled by last year's package of tax cuts, a boost in government spending and interest rate reductions - was, in our view, unsustainably high. Now that we've passed the one-year anniversary of the government's stimulus package, we feel that we can expect lower, but still respectable, economic growth.

Looking ahead, we are reasonably optimistic about the economy and the markets. We see GDP expanding in the 3 percent range, steady job creation, relatively tame inflation and continued strength in corporate earnings. However, we do anticipate some moderation in the growth of the economy due to higher energy prices and the slow tightening of monetary policy. But as long as inflation remains in check, we do not expect the Fed to aggressively raise interest rates. A gradual rise seems much more likely in our opinion.

As for the markets, we think that many of the current uncertainties will be resolved and that investors will once again focus on the positives: strong corporate earnings, ongoing job creation and solid economic growth. History suggests that the stock market generally follows corporate profit trends, which are currently positive. Once the overhangs, such as election uncertainty and rising energy prices, are out of the way, we believe stock prices should follow earnings and show moderate but solid gains.

Keep in mind, however, that uncertainty is a core feature of the financial markets. That's why we believe that adhering to the fundamental principles of investing is the best way to achieve your long-term financial goals. By investing regularly and diversifying your portfolio among different asset classes and investment styles, you can maximize the potential for return and help reduce risk. You'll also be better equipped to handle market volatility.

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

Thank you for your ongoing dedication and partnership.

Respectfully,

Henry J. Herrmann, CFA
President

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

Illustration of Fund Expenses

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, redemption fees and exchange fees; and (2) ongoing costs, including management fees, distribution and service fees, and other Fund expenses. The following 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, 2004.

Actual Expenses

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

Hypothetical Example for Comparison Purposes

The second line for each share class of the tables below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the 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 line of each share class 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.

Balanced Fund Expenses
For the Six Months Ended September 30, 2004	Beginning Account Value 3-31-04		Ending Account Value 9-30-04		Annualized Expense Ratio Based on the Six-Month Period		Expenses Paid During Period*

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	1,001	1.59	%	$	7.97
Class B		1,000		996	2.64			13.19
Class C		1,000		997	2.42			12.12
Class Y		1,000		1,003	1.34			6.71
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,017	1.59	%	$	8.04
Class B		1,000		1,012	2.64			13.30
Class C		1,000		1,013	2.42			12.22
Class Y		1,000		1,018	1.34			6.76

*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, 2004, and divided by 365.

(1)This section uses the Fund's actual total return and actual Fund expenses. It is a guide to the actual expenses paid by the Fund in the period. The "Ending Account Value" shown is computed using the Fund's actual return and the "Expenses Paid During Period" column shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. A shareholder may use the information here, together with the dollar amount invested, to estimate the expenses that were paid over the period. For every thousand dollars a shareholder has invested, the expenses are listed in the fourth column.

(2)This section uses a hypothetical 5% return and actual Fund expenses. It helps to compare the Fund's ongoing costs with other mutual funds. A shareholder can compare the Fund's ongoing costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.

The above illustration is based on ongoing costs only and does not include any transactional costs, such as sales loads, redemption fees or exchange fees.

Bond Fund Expenses
For the Six Months Ended September 30, 2004	Beginning Account Value 3-31-04		Ending Account Value 9-30-04		Annualized Expense Ratio Based on the Six-Month Period		Expenses Paid During Period*

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	1,006	1.15	%	$	5.77
Class B		1,000		999	2.50			12.50
Class C		1,000		998	2.72			13.65
Class Y		1,000		1,004	1.56			7.83
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,019	1.15	%	$	5.81
Class B		1,000		1,013	2.50			12.59
Class C		1,000		1,011	2.72			13.74
Class Y		1,000		1,017	1.56			7.89

The above illustration is based on ongoing costs only and does not include any transactional costs, such as sales loads, redemption fees or exchange fees.

Cash Reserves Fund Expenses
For the Six Months Ended September 30, 2004	Beginning Account Value 3-31-04		Ending Account Value 9-30-04		Annualized Expense Ratio Based on the Six-Month Period		Expenses Paid During Period*

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	1,002	0.85	%	$	4.26
Class B		1,000		1,002	0.85			4.26
Class C		1,000		1,002	0.85			4.26
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,021	0.85	%	$	4.29
Class B		1,000		1,021	0.85			4.29
Class C		1,000		1,021	0.85			4.29

The above illustration is based on ongoing costs only and does not include any transactional costs, such as sales loads, redemption fees or exchange fees.

Cundill Global Value Fund Expenses
For the Six Months Ended September 30, 2004	Beginning Account Value 3-31-04		Ending Account Value 9-30-04		Annualized Expense Ratio Based on the Six-Month Period		Expenses Paid During Period*

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	1,007	1.81	%	$	9.11
Class B		1,000		1,003	2.69			13.53
Class C		1,000		1,004	2.50			12.58
Class Y		1,000		1,010	1.20			6.05
Class I		1,000		1,008	1.59			7.99
Advisor Class		1,000		1,010	1.23			6.20
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,016	1.81	%	$	9.15
Class B		1,000		1,012	2.69			13.59
Class C		1,000		1,013	2.50			12.63
Class Y		1,000		1,019	1.20			6.08
Class I		1,000		1,017	1.59			8.03
Advisor Class		1,000		1,019	1.23			6.23

The above illustration is based on ongoing costs only and does not include any transactional costs, such as sales loads, redemption fees or exchange fees.

Dividend Income Fund Expenses
For the Six Months Ended September 30, 2004	Beginning Account Value 3-31-04		Ending Account Value 9-30-04		Annualized Expense Ratio Based on the Six-Month Period		Expenses Paid During Period*

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	1,015	1.69	%	$	8.54
Class B		1,000		1,010	2.55			12.84
Class C		1,000		1,010	2.52			12.69
Class Y		1,000		1,015	1.52			7.69
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,017	1.69	%	$	8.55
Class B		1,000		1,012	2.55			12.86
Class C		1,000		1,012	2.52			12.71
Class Y		1,000		1,017	1.52			7.70

The above illustration is based on ongoing costs only and does not include any transactional costs, such as sales loads, redemption fees or exchange fees.

European Opportunities Fund Expenses
For the Six Months Ended September 30, 2004	Beginning Account Value 3-31-04		Ending Account Value 9-30-04		Annualized Expense Ratio Based on the Six-Month Period		Expenses Paid During Period*

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	1,018	1.89	%	$	9.57
Class B		1,000		1,014	2.65			13.38
Class C		1,000		1,014	2.65			13.36
Class Y		1,000		1,018	1.68			8.51
Advisor Class		1,000		1,020	1.42			7.18
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,016	1.89	%	$	9.56
Class B		1,000		1,012	2.65			13.37
Class C		1,000		1,012	2.65			13.35
Class Y		1,000		1,017	1.68			8.50
Advisor Class		1,000		1,018	1.42			7.17

The above illustration is based on ongoing costs only and does not include any transactional costs, such as sales loads, redemption fees or exchange fees.

Global Natural Resources Fund Expenses
For the Six Months Ended September 30, 2004	Beginning Account Value 3-31-04		Ending Account Value 9-30-04		Annualized Expense Ratio Based on the Six-Month Period		Expenses Paid During Period*

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	1,124	1.69	%	$	9.01
Class B		1,000		1,119	2.54			13.51
Class C		1,000		1,120	2.40			12.75
Class Y		1,000		1,126	1.20			6.40
Advisor Class		1,000		1,124	1.61			8.59
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,017	1.69	%	$	8.55
Class B		1,000		1,012	2.54			12.83
Class C		1,000		1,013	2.40			12.11
Class Y		1,000		1,019	1.20			6.08
Advisor Class		1,000		1,017	1.61			8.16

The above illustration is based on ongoing costs only and does not include any transactional costs, such as sales loads, redemption fees or exchange fees.

International Fund Expenses
For the Six Months Ended September 30, 2004	Beginning Account Value 3-31-04		Ending Account Value 9-30-04		Annualized Expense Ratio Based on the Six-Month Period		Expenses Paid During Period*

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	957	1.65	%	$	8.11
Class B		1,000		951	2.82			13.81
Class C		1,000		952	2.75			13.46
Class Y		1,000		957	1.69			8.29
Class I		1,000		957	1.47			7.20
Advisor Class		1,000		952	2.68			13.12
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,017	1.65	%	$	8.36
Class B		1,000		1,011	2.82			14.23
Class C		1,000		1,011	2.75			13.87
Class Y		1,000		1,017	1.69			8.54
Class I		1,000		1,018	1.47			7.43
Advisor Class		1,000		1,012	2.68			13.53

The above illustration is based on ongoing costs only and does not include any transactional costs, such as sales loads, redemption fees or exchange fees.

International Balanced Fund Expenses
For the Six Months Ended September 30, 2004	Beginning Account Value 3-31-04		Ending Account Value 9-30-04		Annualized Expense Ratio Based on the Six-Month Period		Expenses Paid During Period*

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	1,016	1.52	%	$	7.69
Class B		1,000		1,009	2.85			14.35
Class C		1,000		1,010	2.66			13.41
Class Y		1,000		1,016	1.44			7.30
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,017	1.52	%	$	7.70
Class B		1,000		1,011	2.85			14.36
Class C		1,000		1,012	2.66			13.42
Class Y		1,000		1,018	1.44			7.30

The above illustration is based on ongoing costs only and does not include any transactional costs, such as sales loads, redemption fees or exchange fees.

International Value Fund Expenses
For the Six Months Ended September 30, 2004	Beginning Account Value 3-31-04		Ending Account Value 9-30-04		Annualized Expense Ratio Based on the Six-Month Period		Expenses Paid During Period*

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	968	2.13	%	$	10.50
Class B		1,000		966	2.88			14.18
Class C		1,000		966	2.92			14.37
Class Y		1,000		970	1.87			9.25
Advisor Class		1,000		970	1.97			9.72
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,014	2.13	%	$	10.75
Class B		1,000		1,011	2.88			14.51
Class C		1,000		1,010	2.92			14.70
Class Y		1,000		1,016	1.87			9.46
Advisor Class		1,000		1,015	1.97			9.95

The above illustration is based on ongoing costs only and does not include any transactional costs, such as sales loads, redemption fees or exchange fees.

Mortgage Securities Fund Expenses
For the Six Months Ended September 30, 2004	Beginning Account Value 3-31-04		Ending Account Value 9-30-04		Annualized Expense Ratio Based on the Six-Month Period		Expenses Paid During Period*

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	1,014	0.95	%	$	4.79
Class B		1,000		1,008	2.16			10.86
Class C		1,000		1,009	2.03			10.23
Class Y		1,000		1,013	1.12			5.65
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,020	0.95	%	$	4.81
Class B		1,000		1,014	2.16			10.89
Class C		1,000		1,015	2.03			10.26
Class Y		1,000		1,019	1.12			5.66

The above illustration is based on ongoing costs only and does not include any transactional costs, such as sales loads, redemption fees or exchange fees.

Pacific Opportunities Fund Expenses
For the Six Months Ended September 30, 2004	Beginning Account Value 3-31-04		Ending Account Value 9-30-04		Annualized Expense Ratio Based on the Six-Month Period		Expenses Paid During Period*

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	962	2.51	%	$	12.36
Class B		1,000		957	3.31			16.22
Class C		1,000		958	3.47			17.03
Class Y		1,000		964	2.12			10.43
Advisor Class		1,000		967	1.71			8.41
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,012	2.51	%	$	12.68
Class B		1,000		1,008	3.31			16.65
Class C		1,000		1,008	3.47			17.46
Class Y		1,000		1,014	2.12			10.70
Advisor Class		1,000		1,017	1.71			8.62

The above illustration is based on ongoing costs only and does not include any transactional costs, such as sales loads, redemption fees or exchange fees.

Real Estate Securities Fund Expenses
For the Six Months Ended September 30, 2004	Beginning Account Value 3-31-04		Ending Account Value 9-30-04		Annualized Expense Ratio Based on the Six-Month Period		Expenses Paid During Period*

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	1,020	1.75	%	$	8.84
Class B		1,000		1,014	2.90			14.66
Class C		1,000		1,016	2.61			13.19
Class Y		1,000		1,021	1.48			7.52
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,016	1.75	%	$	8.82
Class B		1,000		1,011	2.90			14.64
Class C		1,000		1,012	2.61			13.17
Class Y		1,000		1,018	1.48			7.51

The above illustration is based on ongoing costs only and does not include any transactional costs, such as sales loads, redemption fees or exchange fees.

Small Cap Value Fund Expenses
For the Six Months Ended September 30, 2004	Beginning Account Value 3-31-04		Ending Account Value 9-30-04		Annualized Expense Ratio Based on the Six-Month Period		Expenses Paid During Period*

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	980	1.69	%	$	8.38
Class B		1,000		974	3.16			15.63
Class C		1,000		975	2.76			13.69
Class Y		1,000		981	1.56			7.74
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,017	1.69	%	$	8.53
Class B		1,000		1,009	3.16			15.91
Class C		1,000		1,011	2.76			13.94
Class Y		1,000		1,017	1.56			7.89

The above illustration is based on ongoing costs only and does not include any transactional costs, such as sales loads, redemption fees or exchange fees.

Value Fund Expenses
For the Six Months Ended September 30, 2004	Beginning Account Value 3-31-04		Ending Account Value 9-30-04		Annualized Expense Ratio Based on the Six-Month Period		Expenses Paid During Period*

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	1,006	1.46	%	$	7.36
Class B		1,000		1,001	2.57			12.90
Class C		1,000		1,001	2.43			12.17
Class Y		1,000		1,006	1.35			6.77
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,018	1.46	%	$	7.41
Class B		1,000		1,012	2.57			12.98
Class C		1,000		1,013	2.43			12.24
Class Y		1,000		1,018	1.35			6.81

The above illustration is based on ongoing costs only and does not include any transactional costs, such as sales loads, redemption fees or exchange fees.

Shareholder Summary of IVY Balanced Fund

Portfolio Highlights

On September 30, 2004, Ivy Balanced Fund had net assets totaling $99,192,178 invested in a diversified portfolio of:

74.37%		Common Stocks
13.81%		United States Government Securities
9.92%		Corporate Debt Securities
1.27%		Cash and Cash Equivalents
0.63%		Other Government Security

As a shareholder of the Fund, for every $100 you had invested on September 30, 2004, your Fund owned:


Common Stocks	$	74.37
United States Government Securities	$	13.81
Corporate Debt Securities	$	9.92
Cash and Cash Equivalents	$	1.27
Other Government Security	$	0.63

Financial Services Stocks	$	14.16
United States Government Securities	$	13.81
Corporate Debt Securities	$	9.92
Health Care Stocks	$	9.23
Technology Stocks	$	9.20
Energy Stocks	$	7.29
Utilities Stocks	$	5.14
Raw Materials Stocks	$	4.46
Consumer Nondurables Stocks	$	4.57
Consumer Services Stocks	$	4.23
Miscellaneous Stocks	$	4.06
Capital Goods Stocks	$	3.83
Business Equipment and Services Stocks	$	3.62
Retail Stocks	$	2.42
Multi-Industry Stocks	$	2.16
Cash and Cash Equivalents	$	1.27
Other Government Security	$	0.63

The Investments of Ivy Balanced Fund
September 30, 2004
COMMON STOCKS		Shares		Value


Aircraft - 2.03%
Lockheed Martin Corporation		36,100	$	2,013,658


Aluminum - 1.23%
Alcoa Incorporated		36,300		1,219,317


Banks - 3.41%
Citigroup Inc.		32,800		1,447,136
Northern Trust Corporation		22,300		909,728
Wells Fargo & Company		17,200		1,025,636

				3,382,500

Beverages - 0.77%
Brown-Forman Corporation, Class B		16,600		760,280


Broadcasting - 0.69%
Cox Communications, Inc., Class A*		20,600		682,478


Business Equipment and Services - 3.62%
Cintas Corporation		22,400		941,136
First Data Corporation		25,600		1,113,600
Manpower Inc.		34,500		1,534,905

				3,589,641

Capital Equipment - 1.97%
Ingersoll-Rand Company Limited, Class A		28,800		1,957,536


Chemicals - Petroleum and Inorganic - 0.80%
Dow Chemical Company (The)		17,600		795,168


Chemicals - Specialty - 1.65%
Air Products and Chemicals, Inc.		30,100		1,636,838


Computers - Micro - 2.56%
Apple Computer, Inc.*		28,600		1,108,536
Dell Inc.*		40,283		1,432,061

				2,540,597

Computers - Peripherals - 3.89%
Check Point Software Technologies Ltd.*		31,300		531,318
EMC Corporation*	103,900			1,199,006
Microsoft Corporation		77,158		2,133,033

				3,863,357

Cosmetics and Toiletries - 2.29%
Avon Products, Inc.		25,100		1,096,368
Estee Lauder Companies Inc. (The), Class A		28,100		1,174,580

				2,270,948

Electrical Equipment - 1.86%
Emerson Electric Co.		12,800		792,192
Molex Incorporated, Class A		40,000		1,051,800

				1,843,992

Electronic Components - 0.72%
Intel Corporation		35,900		719,436


Finance Companies - 3.55%
Countrywide Financial Corporation		31,400		1,236,846
Fannie Mae		14,600		925,640
SLM Corporation		30,400		1,355,840

				3,518,326

Food and Related - 1.12%
Dean Foods Company*		37,000		1,110,740


Forest and Paper Products - 1.51%
International Paper Company		20,100		812,241
Sealed Air Corporation*		14,900		690,615

				1,502,856

Health Care - Drugs - 4.70%
Abbott Laboratories		13,700		580,332
Allergan, Inc.		13,500		979,425
Amgen Inc.*		16,900		959,836
Novartis AG, ADR		16,100		751,387
Pfizer Inc.		45,450		1,390,770

				4,661,750

Health Care - General - 2.78%
Biomet, Inc.		34,900		1,635,937
Johnson & Johnson		19,900		1,120,967

				2,756,904

Hospital Supply and Management - 1.75%
Medtronic, Inc.		33,400		1,733,460


Household - General Products - 0.39%
Colgate-Palmolive Company		8,500		384,030


Insurance - Life - 1.54%
Lincoln National Corporation		32,600		1,532,200


Insurance - Property and Casualty - 2.35%
Berkshire Hathaway Inc., Class B*		500		1,435,500
Chubb Corporation (The)		12,800		899,584

				2,335,084

Leisure Time Industry - 2.78%
Royal Caribbean Cruises Ltd.		32,200		1,403,920
Walt Disney Company (The)		60,000		1,353,000

				2,756,920

Motion Pictures - 0.76%
News Corporation Limited (The), ADR		23,000		756,010


Motor Vehicle Parts - 1.28%
Eaton Corporation		20,000		1,268,200


Multiple Industry - 2.16%
General Electric Company		63,680		2,138,374


Petroleum - International - 4.32%
BP p.l.c., ADR		24,700		1,420,991
Burlington Resources Inc.		33,300		1,358,640
Exxon Mobil Corporation		31,200		1,507,896

				4,287,527

Petroleum - Services - 2.97%
Nabors Industries Ltd.*		30,576		1,447,774
Schlumberger Limited		22,200		1,494,282

				2,942,056

Retail - General Merchandise - 2.42%
Costco Wholesale Corporation		35,600		1,478,290
Wal-Mart Stores, Inc.		17,400		925,680

				2,403,970

Security and Commodity Brokers - 3.31%
American Express Company		34,300		1,765,078
Morgan Stanley		30,700		1,513,510

				3,278,588

Steel - 0.78%
United States Steel Corporation		20,500		771,210


Trucking and Shipping - 1.27%
Expeditors International of Washington, Inc.		24,400		1,261,114


Utilities - Electric - 3.49%
Dominion Resources, Inc.		19,700		1,285,425
Exelon Corporation		36,800		1,350,192
Southern Company		27,500		824,450

				3,460,067

Utilities - Telephone - 1.65%
AT&T Corp.		30,000		429,600
SBC Communications Inc.		46,600		1,209,270

				1,638,870


TOTAL COMMON STOCKS - 74.37%			$	73,774,002

(Cost: $66,479,274)


CORPORATE DEBT SECURITIES	Principal Amount in Thousands

Banks - 0.30%
Wells Fargo Bank, N.A.,
7.55%, 6-21-10	$	250	293,005


Beverages - 0.35%
Diageo Capital plc,
3.5%, 11-19-07		350	350,792


Broadcasting - 0.90%
Clear Channel Communications, Inc.,
4.25%, 5-15-09		900	891,795


Business Equipment and Services - 0.40%
PHH Corporation,
7.125%, 3-1-13		350	400,279


Chemicals - Specialty - 0.37%
Vulcan Materials Company,
6.4%, 2-1-06		350	366,819


Finance Companies - 2.66%
American International Group,
3.85%, 11-26-07 (A)	500		505,626
Banco Hipotecario Nacional:
7.916%, 7-25-09 (A)	7		325
8.0%, 3-31-11 (A)	502		75,283
First Union-Lehman Brothers-Bank of America Commercial Mortgage Trust,
6.56%, 11-18-35	500		543,349
General Motors Acceptance Corporation,
6.125%, 8-28-07	300		316,067
Prudential Insurance Company of America,
6.6%, 5-15-08 (A)	750		833,460
Unilever Capital Corporation,
5.9%, 11-15-32	350		362,681

			2,636,791

Food and Related - 0.83%
Archer-Daniels-Midland Company,
7.0%, 2-1-31	700		824,279


Insurance - Life - 0.50%
StanCorp Financial Group, Inc.,
6.875%, 10-1-12	450		494,742


Multiple Industry - 1.46%
Cargill, Inc.,
6.375%, 6-1-12 (A)	400		443,968
General Electric Capital Corporation,
2.85%, 1-30-06	1,000		1,002,555

			1,446,523

Railroad - 0.31%
Union Pacific Corporation,
7.6%, 5-1-05	300		308,526


Real Estate Investment Trust - 0.85%
Vornado Realty L.P.,
5.625%, 6-15-07	800		839,338


Utilities - Electric - 0.99%
Dominion Resources, Inc.,
7.625%, 7-15-05	950		986,404


TOTAL CORPORATE DEBT SECURITIES - 9.92%		$	9,839,293
(Cost: $9,659,209)


OTHER GOVERNMENT SECURITY - 0.63%

Canada
Hydro-Quebec,
8.0%, 2-1-13	500	622,715

(Cost: $593,813)


UNITED STATES GOVERNMENT SECURITIES


Mortgage-Backed Obligations - 9.34%
Federal National Mortgage Association Fixed Rate Pass-Through Certificates:
6.23%, 1-1-08	432	459,862
6.0%, 9-1-17	751	791,206
5.0%, 1-1-18	722	735,860
5.5%, 4-1-18	718	743,862
6.5%, 10-1-28	258	273,827
6.5%, 2-1-29	71	75,082
7.0%, 5-1-31	60	64,478
7.5%, 5-1-31	99	106,493
7.0%, 7-1-31	92	98,690
7.0%, 9-1-31	127	136,188
7.0%, 9-1-31	83	88,295
7.0%, 11-1-31	320	339,188
6.5%, 2-1-32	287	301,744
7.0%, 2-1-32	364	388,442
7.0%, 2-1-32	191	203,372
6.5%, 3-1-32	82	86,315
7.0%, 3-1-32	205	218,977
7.0%, 6-1-32	61	65,169
7.0%, 7-1-32	369	393,611
6.5%, 8-1-32	157	164,885
6.0%, 9-1-32	1,030	1,067,486
6.5%, 9-1-32	241	254,307
5.5%, 5-1-33	490	497,554
5.5%, 5-1-33	367	372,692
5.5%, 5-1-33	315	319,706
5.5%, 6-1-33	479	486,755
Government National Mortgage Association Fixed Rate Pass-Through Certificates,
7.375%, 11-15-11	509	532,327

		9,266,373


Treasury Obligations - 4.47%
United States Treasury Bond,
7.5%, 11-15-16	500		642,559
United States Treasury Notes:
3.0%, 2-15-08	900		900,527
3.875%, 2-15-13	1,250		1,242,188
3.625%, 5-15-13	750		731,660
4.25%, 8-15-13	900		913,465

			4,430,399


TOTAL UNITED STATES GOVERNMENT SECURITIES - 13.81%		$	13,696,772

(Cost: $13,594,064)

TOTAL SHORT-TERM SECURITIES - 1.21%		$	1,200,000

(Cost: $1,200,000)

TOTAL INVESTMENT SECURITIES - 99.94%		$	99,132,782

(Cost: $91,526,360)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.06%			59,396


NET ASSETS - 100.00%		$	99,192,178

Notes to Schedule of Investments
	*No dividends were paid during the preceding 12 months.
(A)	Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2004, the total value of these securities amounted to $1,858,662 or 1.87% of net assets.
	See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
	See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY BALANCED FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (cost - $91,526) (Notes 1 and 3)	$	99,133
Cash		- -	*
Receivables:
Dividends and interest		290
Fund shares sold		116
Prepaid and other assets		20

Total assets		99,559

LIABILITIES
Payable to Fund shareholders		231
Accrued management fee (Note 2)		57
Accrued shareholder servicing (Note 2)		27
Accrued service fee (Note 2)		20
Accrued accounting and administrative services fees (Note 2)		4
Accrued distribution fee (Note 2)		1
Other		27

Total liabilities		367

Total net assets	$	99,192

NET ASSETS
Capital paid in	$	102,290
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		6
Accumulated undistributed net realized loss on investment transactions	(10,710		)
Net unrealized appreciation in value of investments		7,606

Net assets applicable to outstanding units of capital	$	99,192

Net asset value per share (net assets divided by shares outstanding):
Class A		$13.31
Class B		$13.28
Class C		$13.30
Class Y		$13.32
Capital shares outstanding:
Class A		3,800
Class B		76
Class C		44
Class Y		3,531

*Not shown due to rounding.

See Notes to Financial Statements

Statement of Operations
      IVY BALANCED FUND
      For the Six Months Ended September 30, 2004
      (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	614
Dividends (net of foreign withholding taxes of $2)		541

Total income	1,155

Expenses (Note 2):
Investment management fee		352
Shareholder servicing:
Class A		98
Class B		2
Class C		1
Class Y		38
Service fee:
Class A		62
Class B		1
Class C		1
Class Y		61
Accounting and administrative services fees		27
Audit fees		13
Legal fees		11
Custodian fees		5
Distribution fee:
Class A		1
Class B		3
Class C		2
Other		65

Total expenses		743

Net investment income		412

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on investments	(395		)
Unrealized appreciation in value of investments during the period		96

Net loss on investments	(299		)

Net increase in net assets resulting from operations	$	113

See Notes to Financial Statements

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

	For the six months ended			For the fiscal period ended			For the fiscal year ended
	9-30-04			3-31-04			9-30-03

INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	412		$	387		$	619
Realized net gain (loss) on investments		(395	)		2,589			937
Unrealized appreciation		96			3,716			6,415

Net increase in net assets resulting from operations		113			6,692			7,971

Distributions to shareholders from (Note 1F):^⁽¹⁾
Net investment income:
Class A		(198	)		(167	)		(510	)
Class B		- -			- -	*		(67	)
Class C		- -			- -	*		(15	)
Class Y		(236	)		(223	)		N/A
Realized gains on investment transactions:
Class A		- -			- -			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -			N/A

		(434	)		(390	)		(592	)

Capital share transactions (Note 5)		(5,358	)		48,637			(8,018	)

Total increase (decrease)		(5,679	)		54,939			(639	)
NET ASSETS
Beginning of period	104,871				49,932			50,571

End of period	$	99,192		$	104,871		$	49,932

Undistributed net investment income	$	6		$	28		$	31

*Not shown due to rounding.
(1)See "Financial Highlights" on pages 32 - 35.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal period ended				For the fiscal year ended September 30,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	13.35		$	12.18		$	10.54		$	11.45		$	19.73		$	17.88		$	16.50

Income (loss) from investment operations:
Net investment income			0.05			0.05			0.16			0.23			0.22			0.31			0.31
Net realized and unrealized gain (loss) on investments			(0.04	)		1.16			1.64			(0.89	)		(6.08	)		2.55			2.30

Total from investment operations			0.01			1.21			1.80			(0.66	)		(5.86	)		2.86			2.61

Less distributions from:
Net investment income			(0.05	)		(0.04	)		(0.16	)		(0.25	)		(0.20	)		(0.30	)		(0.31	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(2.22	)		(0.71	)		(0.92	)

Total distributions			(0.05	)		(0.04	)		(0.16	)		(0.25	)		(2.42	)		(1.01	)		(1.23	)

Net asset value, end of period		$	13.31		$	13.35		$	12.18		$	10.54		$	11.45		$	19.73		$	17.88

Total return^⁽¹⁾			0.09	%		10.06	%		17.17	%^⁽²⁾		- -5.91	%	- -32.35		%		16.22	%		16.08	%
Net assets, end of period (in millions)			$51			$52			$38			$37			$45			$78			$74
Ratio of expenses to average net assets including voluntary expense waiver			1.59	%^⁽³⁾		1.52	%^{⁽³⁾⁽⁴⁾}		1.29	%		1.22	%		1.12	%		1.11	%		1.10	%
Ratio of net investment income to average net assets including voluntary expense waiver			0.71	%^⁽³⁾		0.86	%^{⁽³⁾⁽⁴⁾}		1.41	%		1.84	%		1.57	%		1.58	%		1.77	%
Ratio of expenses to average net assets excluding voluntary expense waiver			NA			1.57	%^{⁽³⁾⁽⁴⁾}		1.62	%		1.52	%		1.40	%		1.20	%		1.10	%
Ratio of net investment income to average net assets excluding voluntary expense waiver			NA			0.81	%^{⁽³⁾⁽⁴⁾}		1.08	%		1.54	%		1.29	%		1.49	%		1.77	%
Portfolio turnover rate			18	%		29	%		110	%		129	%		158	%		132	%		101	%

(1)Total return calculated without taking into account the sales load deducted on an initial purchase.

(2)Advantus Capital reimbursed the Fund for losses related to certain investment trades. With reimbursed losses, the total return for Class A, for the year ended September 30, 2003, would have been 17.26%.

(3)Annualized.

(4)In connection with the reorganization plan effected Decemer 8, 2003, Class B and Class C shares of the predecessor Advantus Fund were exchanged into Class A shares at the time of the merger. The ratios shown above reflect a blended rate that includes the effect of income and expenses for those Class B and Class C shares from October 1, 2003 up to the time of merger. Actual expenses that applied to Class A shareholders were lower than shown above.

See Notes to Financial Statements

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

	For the six months ended				For the period from 12-8-03^⁽¹⁾ to
	9-30-04				3-31-04

Net asset value, beginning of period		$	13.33		$	12.96

Income (loss) from investment operations:
Net investment income (loss)			(0.01	)		0.01
Net realized and unrealized gain (loss) on investments			(0.04	)		0.39

Total from investment operations			(0.05	)		0.40

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

Total distributions			(0.00	)		(0.03	)

Net asset value, end of period		$	13.28		$	13.33

Total return			- -0.38	%		3.05	%
Net assets, end of period (in thousands)		$1,005				$338
Ratio of expenses to average net assets			2.64	%^⁽²⁾		2.76	%^⁽²⁾
Ratio of net investment loss to average net assets			- -0.35	%^⁽²⁾		- -0.42	%^⁽²⁾
Portfolio turnover rate			18	%		29	%^⁽³⁾

(1)Commencement of operations of the class.
(2)Annualized.
(3)For the six months ended March 31, 2004.

See Notes to Financial Statements

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

	For the six months ended				For the period from 12-8-03⁽¹⁾ to
	9-30-04				3-31-04

Net asset value, beginning of period		$	13.34		$	12.96

Income (loss) from investment operations:
Net investment income (loss)			(0.00	)		0.02
Net realized and unrealized gain (loss) on investments			(0.04	)		0.39

Total from investment operations			(0.04	)		0.41

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

Total distributions			(0.00	)		(0.03	)

Net asset value, end of period		$	13.30		$	13.34

Total return			- -0.30	%		3.13	%
Net assets, end of period (in thousands)			$589			$301
Ratio of expenses to average net assets			2.42	%^⁽²⁾		2.43	%^⁽²⁾
Ratio of net investment loss to average net assets			- -0.11	%^⁽²⁾		- -0.12	%^⁽²⁾
Portfolio turnover rate			18	%		29	%^⁽³⁾

(1)Commencement of operations of the class.
(2)Annualized.
(3)For the six months ended March 31, 2004.

See Notes to Financial Statements

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

	For the six months ended				For the period from 12-8-03⁽¹⁾to
	9-30-04				3-31-04

Net asset value, beginning of period		$	13.35		$	12.96

Income (loss) from investment operations:
Net investment income			0.06			0.04
Net realized and unrealized gain (loss) on investments			(0.02	)		0.40

Total from investment operations			0.04			0.44

Less distributions from:
Net investment income			(0.07	)		(0.05	)
Capital gains			(0.00	)		(0.00	)

Total distributions			(0.07	)		(0.05	)

Net asset value, end of period		$	13.32		$	13.35

Total return			0.26	%		3.43	%
Net assets, end of period (in millions)			$47			$53
Ratio of expenses to average net assets			1.34	%^⁽²⁾		1.36	%^⁽²⁾
Ratio of net investment income to average net assets			0.96	%^⁽²⁾		0.97	%^⁽²⁾
Portfolio turnover rate			18	%		29	%^⁽³⁾

(1)Commencement of operations of the class.
(2)Annualized.
(3)For the six months ended March 31, 2004.

See Notes to Financial Statements

SHAREHOLDER SUMMARY OF IVY BOND FUND

Portfolio Highlights

On September 30, 2004, Ivy Bond Fund had net assets totaling $23,927,713 invested in a
diversified portfolio of:

97.74%		Bonds
1.24%		Cash and Cash Equivalents
1.02%		Preferred Stocks

As a shareholder of the Fund, for every $100 you had invested on September 30, 2004,
your Fund owned:


Corporate Bonds	$	52.10
United States Government Securities	$	44.95
Cash and Cash Equivalents	$	1.24
Preferred Stocks	$	1.02
Municipal Bond	$	0.69

On September 30, 2004, the breakdown of bonds (by ratings) held by the Fund was as follows:


AAA	50.74	%
AA	6.36	%
A	8.58	%
BBB	20.20	%
Non-rated	11.86	%
Cash and Cash Equivalents and Equities	2.26	%

The Investments of Ivy Bond Fund
September 30, 2004
PREFERRED STOCKS	Shares			Value


Real Estate Investment Trust
PS Business Parks, Inc., 7% Cumulative*		5,000	$	122,500
Public Storage, Inc., 6.25% Cumulative		5,000		120,400


TOTAL PREFERRED STOCKS - 1.02%			$	242,900

(Cost: $250,000)

CORPORATE DEBT SECURITIES	Principal Amount in Thousands


Banks - 1.84%
Citigroup Inc.,
5.0%, 9-15-14 (A)	$	206	206,256
Wells Fargo Bank, N.A.,
7.55%, 6-21-10		200	234,404

			440,660

Beverages - 1.31%
Miller Brewing Company,
5.5%, 8-15-13 (A)		300	312,794


Business Equipment and Services - 1.06%
International Lease Finance Corporation,
4.35%, 9-15-08		200	203,872
R.R. Donnelley & Sons Company,
3.75%, 4-1-09		50	49,249

			253,121

Finance Companies - Asset Backed - 19.17%
Associates Manufactured Housing,
7.725%, 6-15-28		200	212,456
BlackRock Capital Finance,
7.75%, 9-25-26 (A)		205	214,721
Capital One Multi-asset Execution Trust,
6.0%, 8-15-13		200	212,965
First Union National Bank-Chase Manhattan Bank Commercial Mortgage Trust Commercial Mortgage Pass-through Certificates,
7.062%, 6-15-31		169	188,638
Fund American Companies, Inc.,
5.875%, 5-15-13		200	204,184
GS Mortgage Securities Corporation II,
7.24161%, 7-13-30		250	273,412


Goldman Sachs Capital I,
6.345%, 2-15-34	200		200,630
Green Tree Financial Corporation:
6.4%, 10-15-18	147		152,576
8.9%, 4-15-25	39		40,270
7.35%, 5-15-27	71		75,588
Hilton Hotel Pool Trust 2000-HLTA C,
7.458%, 10-3-15 (A)	125		142,174
MASTR Asset Securitization Trust 2003-10,
5.5%, 11-25-33	249		250,811
MMCA Auto Owner Trust 2002- 4, Class C Asset Backed Notes,
4.56%, 11-16-09	60		60,613
MMCA Automobile Trust 2002-1,
5.37%, 1-15-10	269		267,835
Metropolitan Asset Funding, Inc.,
7.525%, 4-20-27 (A)	400		413,449
Mortgage Capital Funding, Inc.,
7.28803%, 6-18-30	160		182,538
National Collegiate Trust 1997-S2 (The),
7.24%, 9-20-14	314		316,516
Origen Manufactured Housing Contract Trust 2004-A,
5.7%, 1-15-35	100		98,782
Origen Manufactured Housing Contract Trust 2004-B,
5.73%, 11-15-35	50		49,080
Paine Webber Mortgage Acceptance Corporation,
7.655%, 1-2-12 (A)	250		269,665
Sequoia Mortgage Funding Company,
6.38%, 8-28-31 (A)	18		18,270
St. George Funding Company LLC,
8.485%, 12-29- 49 (A)	200		229,876
Structured Asset Securities Corporation,
5.63%, 5-25-34	250		252,299
Wachovia Commercial Mortgage Securities, Inc.,
4.50967%, 7-15- 41	250		260,815

			4,588,163

Finance Companies - Collateralized Mortgage Obligations - 8.42%
277 Park Avenue Finance Corporation:
7.58%, 5-12-12 (A)	182		198,830
7.68%, 5-12-12 (A)	300		330,390
Asset Securitization Corporation:
1.82878%, 10-13-26 (A)	2,308		115,736
7.63909%, 11-13-29	200		218,819
Banco Hipotecario Nacional,
7.916%, 7-25-09 (A)	7		368
Bear Stearns Commercial Mortgage Securities Inc.:
6.0%, 7-15-31 (A)	100		103,684
5.426%, 5-14-16 (A)	200		204,244
Credit Suisse First Boston Mortgage Securities Corp.:
6.0%, 11-25-18	118		121,584
4.9%, 12-15-36	250		253,566
Ford Motor Credit Company,
7.375%, 10-28-09	150		164,300
General Motors Acceptance Corporation,
6.125%, 8-28-07	125		131,694
Mellon Residential Funding,
6.75%, 6-26-28	172		172,037

			2,015,252

Health Care - General - 0.44%
Boston Scientific Corporation,
5.45%, 6-15-14	100		104,748


Insurance - Life - 1.15%
StanCorp Financial Group, Inc.,
6.875%, 10-1-12	250		274,857


Insurance - Property and Casualty - 2.30%
Allstate Life Global Funding,
3.5%, 7-30-07	175		175,734
Assurant, Inc.:
5.625%, 2-15-14	50		51,307
6.75%, 2-15-34	150		157,536
Principal Life Global,
6.25%, 2-15-12 (A)	150		165,601

			550,178

Multiple Industry - 3.94%
CRH America, Inc.:
5.3%, 10-15-13	100		102,962
6.4%, 10-15-33	100		107,051
Cargill, Inc.,
6.375%, 6-1-12 (A)	200		221,984
Household Finance Corporation,
3.38%, 12-16-04	200		200,567
Pennsylvania Electric Company,
5.125%, 4-1-14	150		149,509
Tyco International Group S.A.,
6.0%, 11-15-13	150		161,886

			943,959

Petroleum - Domestic - 0.89%
Valero Logistics Operations, L.P.,
6.05%, 3-15-13	200		211,913


Petroleum - International - 0.68%
Husky Energy, Inc.,
6.25%, 6-15-12	150		163,149


Petroleum - Services - 0.55%
Magellan Midstream Partners, L.P.,
6.45%, 6-1-14	125		131,412


Railroad - 1.52%
Norfolk Southern Corporation,
9.0%, 3-1-21	200		262,942
Union Pacific Corporation,
5.214%, 9-30-14 (A)	100		99,616

			362,558

Real Estate Investment Trust - 2.74%
Arden Realty Limited Partnership,
5.2%, 9-1-11	50		50,488
Healthcare Realty Trust Incorporated,
5.125%, 4-1-14	150		145,184
Pan Pacific Retail Properties, Inc.,
4.7%, 6-1-13	100		95,625
Vornado Realty L.P.,
5.625%, 6-15-07	200		209,834
Weingarten Realty Investors,
7.22%, 6-1-05	150		154,618

			655,749

Savings and Loans - 0.93%
Washington Mutual Bank,
5.65%, 8-15-14	215		222,873


Security and Commodity Brokers - 0.70%
Morgan Stanley Dean Witter & Co.,
6.75%, 4-15-11	150		168,083


Textile - 0.89%
Mohawk Industries, Inc.,
6.5%, 4-15-07	200		213,769


Utilities - Electric - 2.39%
Oncor Electric Delivery Company,
7.25%, 1-15-33	200		235,315
Pacific Gas and Electric Company,
6.05%, 3-1-34	125		127,225
Public Service Electric and Gas Company,
5.375%, 9-1-13	200		208,997

			571,537

Utilities - Telephone - 1.18%
Sprint Capital Corporation and Sprint Corporation,
8.375%, 3-15-12	150		181,670
United States Cellular Corporation,
6.7%, 12-15-33	100		99,847

			281,517


TOTAL CORPORATE DEBT SECURITIES - 52.10%		$	12,466,292
(Cost: $12,098,243)


MUNICIPAL OBLIGATION - 0.69%


Minnesota
City of Eden Prairie, Minnesota, Multifamily Housing Revenue Refunding Bonds (GNMA Collateralized Mortgage Loan - Parkway Apartments Project),
7.35%, 2-20-09	155		166,137

(Cost: $155,000)


UNITED STATES GOVERNMENT SECURITIES


Agency Obligations - 9.26%
Federal Home Loan Mortgage Corporation:
5.5%, 7-15-06	475		497,729
2.5%, 12- 4-06	550		545,350
3.375%, 4-15-09	600		593,120
4.5%, 7-15-13	200		200,126
Federal National Mortgage Association:
3.5%, 1-28-08	150		149,429
5.125%, 1-2-14	225		229,202

			2,214,956


Mortgage-Backed Obligations - 28.89%
Federal Home Loan Mortgage Corporation Fixed Rate Participation Certificates:
3.5%, 2-15-30	125		117,945
6.5%, 9-1-32	381		401,484
5.5%, 5-1-34	271		275,693
5.5%, 5-1-34	196		199,825
5.0%, 9-1-34	50		49,573
5.5%, 10-1-34	250		253,359
Federal National Mortgage Association Fixed Rate Pass-Through Certificates:
6.23%, 1-1-08	144		153,288
6.0%, 9-1-17	195		205,714
5.0%, 7-1-18	222		226,937
7.5%, 5-1-31	227		245,664
7.0%, 9-1-31	76		81,231
7.0%, 11-1-31	178		188,438
6.5%, 12-1-31	97		102,397
7.0%, 2-1-32	166		176,565
7.0%, 3-1-32	174		186,013
6.5%, 4-1-32	44		45,941
6.5%, 5-1-32	47		49,527
6.5%, 7-1-32	118		124,696
6.5%, 8-1-32	114		120,170
6.5%, 8-1-32	94		98,721
6.5%, 9-1-32	152		160,013
6.5%, 9-1-32	68		71,950
6.0%, 10-1-32	226		235,522
6.5%, 10-1-32	207		218,497
6.0%, 11-1-32	209		217,216
6.0%, 3-1-33	161		167,818
5.5%, 4-1-33	253		256,775
5.5%, 5-1-33	181		184,511
5.0%, 8-1-33	115		113,798
5.5%, 3-1-34	245		248,930
5.5%, 3-1-34	115		116,408
6.0%, 3-1-34	180		186,497
5.5%, 4-1-34	243		247,813
5.5%, 4-1-34	244		247,484
5.0%, 5-1-34	123		121,640
5.0%, 5-1-34	98		97,454
5.5%, 5-1-34	245		248,030
5.0%, 10-1-34	475		469,953

			6,913,490

Treasury Obligations - 6.36%
United States Treasury Bonds:
6.125%, 11-15-27	350		406,328
5.375%, 2-15-31	175		187,469
United States Treasury Notes:
1.875%, 1-31-06	175		173,961
2.25%, 2-15-07	100		98,934
4.75%, 5-15-14	625		656,055

			1,522,747

Treasury Inflation Protected Obligation - 0.44%
United States Treasury Note,
1.875%, 7-15-13 (B)	103		104,375


TOTAL UNITED STATES GOVERNMENT SECURITIES - 44.95%		$	10,755,568
(Cost: $10,655,682)

TOTAL SHORT-TERM SECURITIES - 3.72%		$	890,000

(Cost: $890,000)

TOTAL INVESTMENT SECURITIES - 102.48%		$	24,520,897

(Cost: $24,048,925)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (2.48%)			(593,184	)


NET ASSETS - 100.00%		$	23,927,713

Notes to Schedule of Investments
	*No dividends were paid during the preceding 12 months.
(A)	Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2004, the total value of these securities amounted to $3,247,658 or 13.57% of net assets.
(B)	The interest rate for this security is a stated rate, but the interest payments are determined by multiplying the inflation-adjusted principal by one half of the stated rate for each semiannual interest payment date.
	See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
	See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
     IVY BOND FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (cost-$24,049) (Notes 1 and 3)	$	24,521
Cash		1
Receivables:
Investment securities sold		654
Dividends and interest		210
Fund shares sold		72
Prepaid and other assets		49

Total assets		25,507

LIABILITIES
Payable for investment securities purchased		1,478
Payable to Fund shareholders		68
Accrued management fee (Note 2)		10
Accrued shareholder servicing (Note 2)		9
Dividend payable		8
Accrued distribution and service fees (Note 2)		5
Accrued accounting and administrative services fees (Note 2)		1

Total liabilities		1,579

Total net assets	$	23,928

NET ASSETS
Capital paid in	$	23,793
Accumulated undistributed income (loss):
Accumulated undistributed net realized loss on investment transactions		(337	)
Net unrealized appreciation in value of investments		472

Net assets applicable to outstanding units of capital	$	23,928

Net asset value per share (net assets divided by shares outstanding):
Class A		$10.66
Class B		$10.66
Class C		$10.66
Class Y		$10.66
Capital shares outstanding:
Class A		2,172
Class B		43
Class C		27
Class Y		3

See Notes to Financial Statements

Statement of Operations
      IVY BOND FUND
      For the Six Months Ended September 30, 2004
      (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	621
Dividends		8

Total income		629

Expenses (Note 2):
Investment management fee		61
Shareholder servicing:
Class A		48
Class B		1
Class C		1
Class Y		- -	*
Registration fees		29
Service fee:
Class A		28
Class B		- -	*
Class C		- -	*
Class Y		- -	*
Audit fees		11
Accounting and administrative services fees		7
Custodian fees		5
Distribution fee:
Class A		- -	*
Class B		1
Class C		1
Other		7

Total		200
Less expenses in excess of contractual limit (Note 2)		(64	)

Total expenses		136

Net investment income		493

REALIZED AND UNREALIZED LOSS ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on investments		(77	)
Unrealized depreciation in value of investments during the period	(283		)

Net loss on investments	(360		)

Net increase in net assets resulting from operations	$	133

*Not shown due to rounding.

See Notes to Financial Statements

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

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the fiscal year ended 9-30-03

INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	493		$	470		$	1,003
Realized net gain (loss) on investments		(77	)		249			602
Unrealized depreciation		(283	)		(25	)		(268	)

Net increase in net assets resulting from operations		133			694			1,337

Distributions to shareholders from (Note 1F):^⁽¹⁾
Net investment income:
Class A		(496	)		(457	)		(754	)
Class B		(5	)		(1	)		(198	)
Class C		(3	)		- -	*		(39	)
Class Y		(1	)		- -	*		N/A
Realized gains on investment transactions:
Class A		- -			- -			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -			N/A

		(505	)		(458	)		(991	)

Capital share transactions (Note 5)		783			(420	)		(1,372	)

Total increase (decrease)		411			(184	)		(1,026	)
NET ASSETS
Beginning of period		23,517			23,701			24,727

End of period	$	23,928		$	23,517		$	23,701

Undistributed net investment income (loss)	$	- -		$	(-	)*	$	(12	)

*Not shown due to rounding.

(1)See "Financial Highlights" on pages 47 - 50.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal period ended			For the fiscal year ended September 30,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	10.83		$	10.73		$	10.57		$	10.30		$	9.60		$	9.71		$	10.69

Income (loss) from investment operations:
Net investment income			0.22			0.23			0.45			0.52			0.58			0.58			0.54
Net realized and unrealized gain (loss) on investments			(0.16	)		0.09			0.15			0.27			0.70		(0.11		)		(0.79	)

Total from investment operations			0.06			0.32			0.60			0.79			1.28			0.47			(0.25	)

Less distributions from:
Net investment income			(0.23	)		(0.22	)		(0.44	)		(0.52	)		(0.58	)	(0.58		)		(0.54	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)		(0.19	)

Total distributions			(0.23	)		(0.22	)		(0.44	)		(0.52	)		(0.58	)	(0.58		)		(0.73	)

Net asset value, end of period		$	10.66		$	10.83		$	10.73		$	10.57		$	10.30		$	9.60			$9.71

Total return^⁽¹⁾			0.58	%		3.03	%		5.84	%		7.90	%		13.68	%		5.04	%		- -2.36	%
Net assets, end of period (in millions)			$23			$23			$18			$17			$16			$15			$18
Ratio of expenses to average net assets including reimbursement			1.15	%^⁽²⁾		1.46	%^{⁽²⁾⁽³⁾}		1.15	%		1.15	%		1.15	%		1.15	%		1.15	%
Ratio of net investment income to average net assets including reimbursement			4.32	%^⁽²⁾		4.53	%^{⁽²⁾⁽³⁾}		4.25	%		5.07	%		5.77	%		6.08	%		5.41	%
Ratio of expenses to average net assets excluding reimbursement			1.72	%^⁽²⁾		2.36	%^{⁽²⁾⁽³⁾}		2.01	%		1.92	%		1.99	%		1.84	%		1.55	%
Ratio of net investment income to average net assets excluding reimbursement			3.74	%^⁽²⁾		3.64	%^{⁽²⁾⁽³⁾}		3.39	%		4.30	%		4.93	%		5.39	%		5.01	%
Portfolio turnover rate			56	%		78	%		119	%		148	%		252	%		191	%		212	%

(1)Total return calculated without taking into account the sales load deducted on an initial purchase.

(2)Annualized.

(3)In connection with the reorganization plan effected December 8, 2003, Class B and Class C shares of the predecessor Advantus Fund were exchanged into Class A shares at the time of the merger. The ratios shown above reflect a blended rate that includes the effect of income and expenses for those Class B and Class C shares from October 1, 2003 up to the time of merger. Expenses for Class A shares before and after the merger were limited to 1.15% of average net assets.

See Notes to Financial Statements

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

				For the period from 12-8-03⁽¹⁾to 3-31-04

Net asset value, beginning of period	$	10.83		$	10.64

Income (loss) from investment operations:
Net investment income		0.15			0.11
Net realized and unrealized gain (loss) on investments		(0.16	)		0.19

Total from investment operations		(0.01	)		0.30

Less distributions from:
Net investment income		(0.16	)		(0.11	)
Capital gains		(0.00	)		(0.00	)

Total distributions		(0.16	)		(0.11	)

Net asset value, end of period	$	10.66		$	10.83

Total return		- -0.09	%		2.77	%
Net assets, end of period (in thousands)		$455			$287
Ratio of expenses to average net assets		2.50	%^⁽²⁾		2.76	%^⁽²⁾
Ratio of net investment income to average net assets		2.96	%^⁽²⁾		3.04	%^⁽²⁾
Portfolio turnover rate		56	%		78	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the six months ended March 31, 2004.

See Notes to Financial Statements

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

				For the period from 12-8-03⁽¹⁾to 3-31-04

Net asset value, beginning of period	$	10.83		$	10.64

Income (loss) from investment operations:
Net investment income		0.14			0.11
Net realized and unrealized gain (loss) on investments		(0.17	)		0.19

Total from investment operations		(0.03	)		0.30

Less distributions from:
Net investment income		(0.14	)		(0.11	)
Capital gains		(0.00	)		(0.00	)

Total distributions		(0.14	)		(0.11	)

Net asset value, end of period	$	10.66		$	10.83

Total return		- -0.20	%		2.77	%
Net assets, end of period (in thousands)		$288			$115
Ratio of expenses to average net assets		2.72	%^⁽²⁾		2.61	%^⁽²⁾
Ratio of net investment income to average net assets		2.70	%^⁽²⁾		3.09	%^⁽²⁾
Portfolio turnover rate		56	%		78	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the six months ended March 31, 2004.

See Notes to Financial Statements

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

				For the period from 12-8-03⁽¹⁾to 3-31-04

Net asset value, beginning of period	$	10.83		$	10.64

Income (loss) from investment operations:
Net investment income		0.20			0.13
Net realized and unrealized gain (loss) on investments		(0.17	)		0.19

Total from investment operations		0.03			0.32

Less distributions from:
Net investment income		(0.20	)		(0.13	)
Capital gains		(0.00	)		(0.00	)

Total distributions		(0.20	)		(0.13	)

Net asset value, end of period	$	10.66		$	10.83

Total return		0.38	%		3.03	%
Net assets, end of period (in thousands)		$31			$25
Ratio of expenses to average net assets		1.56	%^⁽²⁾		1.54	%^⁽²⁾
Ratio of net investment income to average net assets		3.89	%^⁽²⁾		3.99	%^⁽²⁾
Portfolio turnover rate		56	%		78	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the six months ended March 31, 2004.

See Notes to Financial Statements

SHAREHOLDER SUMMARY OF IVY CASH RESERVES FUND Portfolio Highlights

On September 30, 2004, Ivy Cash Reserves Fund had net assets totaling $6,864,568.

As a shareholder of the Fund, for every $100 you had invested on September 30, 2004, your
Fund owned:

Corporate Obligations - Notes	$	28.64
Corporate Obligations - Commercial Paper	$	28.63
Municipal Obligations	$	19.60
United States Government Securities	$	18.94
Corporate Obligations - Certificates of Deposit	$	3.86
Cash and Other Assets, Net of Liabilities	$	0.33

The Investments of Ivy Cash Reserves Fund
September 30, 2004
CORPORATE OBLIGATIONS	Principal Amount in Thousands			Value


Certificates of Deposit - 3.86%
Banks
Citibank, N.A.:
1.65%, 11-22-04	$	165	$	165,000
1.86%, 12-20-04		100		100,000

				265,000

Commercial Paper
Finance Companies - 11.60%
Ciesco, LLC,
1.55%, 10-5-04		250		249,957
PACCAR Financial Corp.:
1.55%, 10-13-04		150		149,923
1.63%, 11- 4-04		172		171,735
USAA Capital Corp.,
1.88%, 10-1-04		225		225,000

				796,615

Food and Related - 2.18%
Golden Peanut Co.,
1.85%, 12-10-04		150		149,460


Household - General Products - 3.64%
Fortune Brands Inc.,
1.59%, 10-18-04		250		249,812


Multiple Industry - 4.35%
General Electric Capital Corporation,
1.8%, 12-8-04		300		298,980


Security and Commodity Brokers - 6.86%
Prudential Funding Corp.,
1.71%, 10-18-04		300		299,758
UBS Finance Delaware LLC,
1.88%, 10-1-04		171		171,000

				470,758


Total Commercial Paper - 28.63%				1,965,625


Notes
Banks - 1.46%
Wells Fargo & Company,
1.73%, 10-15-04		100		100,000


Health Care - Drugs - 8.81%
Merck & Co., Inc.,
4.484%, 2-22-05 (A)		400		405,003
Pfizer Inc.,
1.7475%, 10-7-04		200		200,000

				605,003

Health Care - General - 2.91%
ACTS Retirement - Life Communities, Inc., Variable Rate Demand Bonds, Series 2003A,
1.84%, 10-7-04		200		200,000


Leisure Time Industry - 2.41%
Berkeley Hills Country Club, Inc. (Wachovia Bank N.A.),
1.91%, 10-7-04		165		165,000


Retail - General Merchandise - 2.09%
Target Corporation,
7.5%, 2-15-05		140		143,164


Retail - Specialty Stores - 2.84%
El Dorado Enterprises of Miami, Inc. (Wachovia Bank, N.A.),
1.91%, 10-7-04		195		195,000


Utilities - Telephone - 8.12%
BellSouth Corporation,
4.119%, 4-26-05 (A)		300		304,221
SBC Communications Inc.,
4.206%, 6-5-05 (A)		250		253,338

				557,559


Total Notes - 28.64%				1,965,726


TOTAL CORPORATE OBLIGATIONS - 61.13%			$	4,196,351

(Cost: $4,196,351)

MUNICIPAL OBLIGATIONS


California - 8.89%
California Pollution Control Financing Authority, Environmental Improvement Revenue Bonds, Air Products Manufacturing Corporation, Taxable Series 1997A,
1.62%, 10-7-04	310		310,000
County of Sacramento, Taxable Pension Funding Bonds, Series 1995B (Bayerische Landesbank Girozentrale, New York Branch),
1.83%, 10-6-04	300		300,000

			610,000

Florida - 1.97%
University of South Florida Research Foundation, Incorporated, Variable Rate Demand Revenue Bonds (Interdisciplinary Research Building Project), Taxable Series 2004B (Bank of America, N.A.),
1.8%, 10-6-04	135		135,000


Maryland - 2.91%
Mayor and City Council of Baltimore (City of Baltimore, Maryland), General Obligation Bonds, Consolidated Public Improvement Bonds, Series 2003C (Variable Rate Demand/Taxable),
1.8%, 10-7-04	200		200,000


New York - 1.46%
The City of New York, General Obligation Bonds, Fiscal 1995 Series B, Taxable Adjustable Rate Bonds (Bayerische Landesbank Girozentrale, New York Branch),
1.76%, 12-1-04	100		100,000


Texas - 4.37%
Gulf Coast Waste Disposal Authority, Pollution Control Revenue Bonds (Amoco Oil Company Project), Taxable Series 1995,
1.57%, 10- 4-04	300		300,000


TOTAL MUNICIPAL OBLIGATIONS - 19.60%		$	1,345,000

(Cost: $1,345,000)

UNITED STATES GOVERNMENT SECURITIES


Federal Home Loan Bank:
1.47%, 3-1-05	200		200,000
1.3%, 4-27-05	200		200,000
1.35%, 4-29-05	200		200,000
Overseas Private Investment Corporation:
1.82%, 10-6-04	270		270,000
1.86%, 10-6-04	430		430,233

TOTAL UNITED STATES GOVERNMENT SECURITIES - 18.94%		$	1,300,233

(Cost: $1,300,233)

TOTAL INVESTMENT SECURITIES - 99.67%		$	6,841,584

(Cost: $6,841,584)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.33%			22,984


NET ASSETS - 100.00%		$	6,864,568

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, 2004, the total value of these securities amounted to $962,562 or 14.02% of net assets.
	See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
	See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY CASH RESERVES FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (cost-$6,842) (Notes 1)	$	6,842
Receivables:
Interest		30
Fund shares sold		- -	*
Prepaid and other assets		31

Total assets		6,903

LIABILITIES
Payable to Fund shareholders		28
Accrued shareholder servicing (Note 2)		5
Accrued management fee (Note 2)		2
Due to custodian		2
Dividends payable		1

Total liabilities		38

Total net assets	$	6,865

NET ASSETS
Capital paid in	$	6,865

Net assets applicable to outstanding units of capital	$	6,865

Net asset value per share (net assets divided by shares outstanding):
Class A		$1.00
Class B		$1.00
Class C		$1.00
Capital shares outstanding:
Class A		4,946
Class B		1,834
Class C		85

*Not shown due to rounding.

See Notes to Financial Statements

Statement of Operations
      IVY CASH RESERVES FUND
      For the Six Months Ended September 30, 2004
      (In Thousands)

INVESTMENT INCOME
Interest and amortization (Note 1B)	$	50

Expenses (Note 2):
Shareholder servicing:
Class A		16
Class B		4
Class C		1
Registration fees		24
Investment management fee		15
Audit fees		8
Legal fees		8
Custodian fees		5

Total		81
Less expenses in excess of contractual limit (Note 2)	(49		)

Total expenses		32

Net investment income		18

Net increase in net assets resulting from operations	$	18

See Notes to Financial Statements

Statement of Changes in Net Assets
IVY CASH RESERVES FUND
(In Thousands)

	For the six months ended			For the fiscal period ended			For the fiscal year ended
	9-30-04			3-31-04			12-31-03

DECREASE IN NET ASSETS
Operations:
Net investment income	$	18		$	6		$	56

Net increase in net assets resulting from operations		18			6			56

Distributions to shareholders from net investment income (Note 1F):^⁽¹⁾
Class A		(13	)		(4	)		(33	)
Class B		(5	)		(2	)		(18	)
Class C		- -	*		- -	*		(5	)

		(18	)		(6	)		(56	)

Capital share transactions (Note 5)	(2,057		)		(478	)	(12,202		)

Total decrease	(2,057		)		(478	)	(12,202		)
NET ASSETS
Beginning of period		8,922			9,400		21,602

End of period	$	6,865		$	8,922		$	9,400

Undistributed net investment income	$	-		$	-		$	-

*Not shown due to rounding.

(1)See "Financial Highlights" on pages 59 - 61.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

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

Net investment income			0.00	*		0.00	*		0.00	*		0.01	^⁽¹⁾		0.03			0.05			0.04
Less dividends declared		(0.00		)*	(0.00		)*	(0.00		)*	(0.01		)	(0.03		)	(0.05		)	(0.04		)

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

Total return			0.24	%		0.07	%		0.33	%		0.78	%		3.12	%		5.37	%		4.16	%
Net assets, end of period (in millions)			$5			$6			$6			$15			$13			$20			$19
Ratio of expenses to average net assets including reimbursement			0.85	%^⁽²⁾		0.85	%^⁽²⁾		0.85	%		0.88	%		0.87	%		0.85	%		0.88	%
Ratio of net investment income to average net assets including reimbursement			0.48	%^⁽²⁾		0.29	%^⁽²⁾		0.35	%		0.78	%		3.12	%		5.38	%		4.17	%
Ratio of expenses to average net assets excluding reimbursement			2.16	%^⁽²⁾		2.36	%^⁽²⁾		1.80	%		1.73	%		1.59	%		1.52	%		1.40	%
Ratio of net investment income (loss) to average net assets excluding reimbursement		- -0.83		%^⁽²⁾	- -1.22		%^⁽²⁾	- -0.60		%	- -0.07		%		2.40	%		4.71	%		3.65	%

*Not shown due to rounding.

(1)Based on average shares outstanding.

(2)Annualized.

See Notes to Financial Statements

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

	For the six months ended			For the fiscal period ended			For the fiscal year ended December 31,
	9-30-04			3-31-04			2003			2002			2001			2000			1999

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

Net investment income		0.00	*		0.00	*		0.00	*		0.01	^⁽¹⁾		0.03			0.05			0.04
Less dividends declared	(0.00		)*	(0.00		)*	(0.00		)*	(0.01		)	(0.03		)	(0.05		)	(0.04		)

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

Total return		0.24	%		0.07	%		0.36	%		0.85	%		3.19	%		5.35	%		4.30	%
Net assets, end of period (in millions)		$2			$3			$3			$6			$7			$6			$7
Ratio of expenses to average net assets including reimbursement		0.85	%^⁽²⁾		0.85	%^⁽²⁾		0.83	%		0.80	%		0.80	%		0.87	%		0.77	%
Ratio of net investment income to average net assets including reimbursement		0.47	%^⁽²⁾		0.29	%^⁽²⁾		0.38	%		0.85	%		3.19	%		5.36	%		4.28	%
Ratio of expenses to average net assets excluding reimbursement		2.16	%^⁽²⁾		2.32	%^⁽²⁾		1.77	%		1.65	%		1.52	%		1.54	%		1.29	%
Ratio of net investment income (loss) to average net assets excluding reimbursement	- -0.85		%^⁽²⁾	- -1.18		%^⁽²⁾	- -0.56		%		0.00	%		2.47	%		4.69	%		3.76	%

*Not shown due to rounding.

(1)Based on average shares outstanding.

(2)Annualized.

See Notes to Financial Statements

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

	For the six months ended			For the fiscal period ended			For the fiscal year ended December 31,
	9-30-04			3-31-04			2003			2002			2001			2000			1999

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

Net investment income		0.00	*		0.00	*		0.00	*		0.01	^⁽¹⁾		0.03			0.05			0.04
Less dividends declared	(0.00		)*	(0.00		)*	(0.00		)*	(0.01		)	(0.03		)	(0.05		)	(0.04		)

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

Total return		0.24	%		0.07	%		0.40	%		0.74	%		3.10	%		5.65	%		4.14	%
Net assets, end of period (in thousands)		$85		$167			$184			$813			$519		$1,975				$372
Ratio of expenses to average net assets including reimbursement		0.85	%^⁽²⁾		0.85	%^⁽²⁾		0.72	%		0.84	%		0.88	%		0.72	%		0.87	%
Ratio of net investment income to average net assets including reimbursement		0.48	%^⁽²⁾		0.29	%^⁽²⁾		0.52	%		0.82	%		3.10	%		5.51	%		4.18	%
Ratio of expenses to average net assets excluding reimbursement		2.17	%^⁽²⁾		3.91	%^⁽²⁾		1.66	%		1.69	%		1.60	%		1.39	%		1.39	%
Ratio of net investment income (loss) to average net assets excluding reimbursement	- -0.84		%^⁽²⁾	- -2.77		%^⁽²⁾	- -0.42		%	- -0.03		%		2.38	%		4.84	%		3.66	%

*Not shown due to rounding.

(1)Based on average shares outstanding

(2)Annualized.

See Notes to Financial Statements

SHAREHOLDER SUMMARY OF IVY CUNDILL GLOBAL VALUE FUND

Portfolio Highlights

On September 30, 2004, Ivy Cundill Global Value Fund had net assets totaling $242,721,279 invested in a diversified portfolio of:

70.88%		Common Stocks
29.12%		Cash and Cash Equivalents and Unrealized Loss on Open Forward Currency Contracts

As a shareholder of the Fund, for every $100 you had invested on September 30, 2004,
your Fund was invested by geographic region and by industry, respectively, as follows:

Pacific Basin	$	52.48
Cash and Cash Equivalents and Unrealized Loss on Open Forward Currency Contracts	$	29.12
United States	$	7.76
Europe	$	4.80
Canada	$	4.12
Other	$	1.72

Cash and Cash Equivalents and Unrealized Loss on Open Forward Currency Contracts	$	29.12
Financial Services Stocks	$	16.60
Consumer Nondurables Stocks	$	12.62
Multi-Industry Stocks	$	11.08
Consumer Services Stocks	$	9.58
Capital Goods Stocks	$	5.10
Shelter Stocks	$	4.12
Business Equipment and Services Stocks	$	3.49
Health Care Stocks	$	2.55
Consumer Durables Stocks	$	2.52
Raw Materials Stocks	$	2.44
Utilities Stocks	$	0.78

COMMON STOCKS			Shares		Value
The Investments of Ivy Cundill Global Value Fund
September 30, 2004


Bermuda - 1.72%
Guoco Group Limited (A)			492,000	$	4,179,864


Canada - 4.12%
Legacy Hotels Real Estate Investment Trust (A)			1,139,200		6,011,918
Legacy Hotels Real Estate Investment Trust (A) (B)			753,900		3,978,569

					9,990,487

Germany - 2.44%
Henkel Kommanditgesellschaft auf Aktien (A)			85,125		5,925,423


Hong Kong - 5.22%
CITIC Pacific Limited (A)			2,000,000		5,142,278
First Pacific Company Limited (A)*		27,000,000			7,530,681

					12,672,959

Italy - 2.36%
Italmobiliare S.p.A., Non-Convertible Savings Shares (A)			154,565		5,720,237


Japan - 38.89%
AIFUL Corporation (A)			31,700		3,109,733
Asatsu-DK Inc. (A)			308,000		8,468,987
Coca-Cola West Japan Company Limited (A)			265,100		6,447,370
Kikkoman Corporation (A)			400,000		3,524,661
Kirin Brewery Company, Limited (A)			1,260,000		10,885,430
Lion Corporation (A)			900,000		4,998,412
Nikko Cordial Corporation (A)			2,456,000		9,962,630
Nintendo Co., Ltd. (A)			50,000		6,116,430
Nippon Television Network Corporation (A)			77,000		11,641,363
NIPPONKOA Insurance Company, Limited (A)			1,900,000		10,638,414
Sankyo Co., Ltd. (A)			56,000		1,184,083
Shiseido Company, Limited (A)			305,000		3,750,397
Takefuji Corporation (A)			160,000		10,236,399
Tokyo Broadcasting System, Inc. (A)			220,000		3,431,916

					94,396,225

Korea - 3.27%
Korea Electric Power Corporation (A)			100,000		1,888,841
Korea Tobacco & Ginseng Corporation (A)			225,020		5,950,377
Korea Tobacco & Ginseng Corporation, GDR (B)			7,000		92,330

					7,931,548

Malaysia - 2.74%
Arab-Malaysian Corporation Berhad (A)*		20,587,100			6,663,719


Singapore - 2.36%
Singapore Press Holdings Limited (A)			2,040,000		5,740,679


United States - 7.76%
Liberty Media Corporation, Class A*			73,000		636,560
Liberty Media International, Inc., Class A*			293,751		9,786,315
Loews Corporation			37,000		2,164,500
MCI, Inc.*			265,000		4,429,475
Mattel, Inc.			100,000		1,813,000

					18,829,850


TOTAL COMMON STOCKS - 70.88%				$	172,050,991

(Cost: $157,326,163)

UNREALIZED LOSS ON OPEN FORWARD CURRENCY CONTRACTS - (0.09%)		Face Amount in Thousands


Euro, 1-14-05 (C)		EUR7,151			(232,405	)
Euro, 3-18-05 (C)			1,065		(23,049	)
Hong Kong Dollar, 1-14-05 (C)		HKD33,191			7,996
Hong Kong Dollar, 3-18-05 (C)			86,966		(144	)
Japanese Yen, 1-14-05 (C)	JPY4,491,016				341,421
Japanese Yen, 3-18-05 (C)			4,521,415		(179,303	)
Singapore Dollar, 1-14-05 (C)			SGD9,766		(71,240	)
South Korean Won, 1-14-05 (C)	KRW6,942,782				(56,523	)
South Korean Won, 3-18-05 (C)			1,170,127		6,619

				$	(206,628	)


SHORT-TERM SECURITIES		Principal Amount in Thousands


Commercial Paper
Finance Companies - 2.47%
Ciesco, LLC,
1.55%, 10-5-04			$ 6,000		5,998,967


Retail - General Merchandise - 1.65%
Wal-Mart Stores, Inc.,
1.55%, 10-29-04			4,000		3,995,178


Total Commercial Paper - 4.12%					9,994,145


Repurchase Agreement - 5.97%
Merrill Lynch, Pierce, Fenner & Smith Inc., 1.7% Repurchase Agreement dated 9-30-04, to be repurchased at $14,498,685 on 10-1-04 (D)	14,498		14,498,000


United States Government Securities - 18.10% Treasury Obligations
United States Treasury Bills:
1.51%, 10-7-04	6,000		5,998,495
1.52%, 10-7-04	3,000		2,999,240
1.55%, 10-7-04	9,000		8,997,682
1.51%, 10-21-04	5,000		4,995,806
1.51%, 11-18-04	2,000		1,995,987
1.58%, 12-9-04	15,000		14,954,747
1.75%, 1-20-05	4,000		3,978,417

			43,920,374


TOTAL SHORT-TERM SECURITIES - 28.19%		$	68,412,519

(Cost: $68,412,519)

TOTAL INVESTMENT SECURITIES - 98.98%		$	240,256,882

(Cost: $225,738,682)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.02%			2,464,397


NET ASSETS - 100.00%		$	242,721,279

Notes to Schedule of Investments
	*No dividends were paid during the preceding 12 months.
(A)	Listed on an exchange outside the United States.
(B)	Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2004, the total value of these securities amounted to $4,070,899 or 1.68% of net assets.
(C)	Principal amounts are denominated in the indicated foreign currency, where applicable (EUR - Euro; HKD - Hong Kong Dollar; JPY - Japanese Yen; SGD - Singapore Dollar; KRW - Korean Won).
(D)	Collateralized by $14,799,512 Federal National Mortgage Association Bond, 6% due 8-15-33; market value and accrued interest aggregate $14,911,352.
	See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
	See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY CUNDILL GLOBAL VALUE FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (Notes 1 and 3):
Securities (cost - $211,241)	$	225,759
Repurchase agreements (cost - $14,498)		14,498

		240,257
Receivables:
Fund shares sold		3,282
Dividends and interest		203
Prepaid and other assets		41

Total assets		243,783

LIABILITIES
Payable for investment securities purchased		521
Accrued management fee (Note 2)		187
Payable to Fund shareholders		120
Accrued shareholder servicing (Note 2)		64
Accrued service fee (Note 2)		46
Due to custodian		46
Accrued distribution fee (Note 2)		42
Accrued accounting and administrative services fees (Note 2)		8
Other		28

Total liabilities		1,062

Total net assets	$	242,721

NET ASSETS
Capital paid in	$	228,588
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(726	)
Accumulated undistributed net realized gain on investment transactions		340
Net unrealized appreciation in value of investments		14,519

Net assets applicable to outstanding units of capital	$	242,721

Net asset value per share (net assets divided by shares outstanding):
Class A		$12.66
Class B		$12.42
Class C		$12.35
Class Y		$12.70
Advisor Class		$12.66
Class I		$12.59
Capital shares outstanding:
Class A		12,664
Class B		1,821
Class C		3,961
Class Y		632
Advisor Class		218
Class I		5

See Notes to Financial Statements

Statement of Operations
      IVY CUNDILL GLOBAL VALUE FUND
      For the Six Months Ended September 30, 2004
      (In Thousands)

INVESTMENT LOSS
Income (Note 1B):
Dividends (net of foreign withholding taxes of $71)	$	811
Interest and amortization		355

Total income		1,166

Expenses (Note 2):
Investment management fee		818
Shareholder servicing:
Class A		168
Class B		36
Class C		50
Class Y		4
Advisor Class		1
Class I		- -	*
Distribution fee:
Class A		18
Class B		62
Class C		135
Service fee:
Class A		111
Class B		21
Class C		45
Class Y		7
Accounting and administrative services fees		37
Custodian fees		20
Legal fees		15
Audit fees		9
Other		108

Total		1,665
Less expenses in excess of voluntary limit (Note 2)		(9	)

Total expenses		1,656

Net investment loss		(490	)

REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		118
Realized net gain on forward currency contracts		426
Realized net gain on foreign currency transactions		30

Realized net gain on investments		574

Unrealized appreciation in value of securities during the period		623
Unrealized appreciation in value of forward currency contracts during the period		1,333

Unrealized appreciation in value of investments during the period		1,956

Net gain on investments		2,530

Net increase in net assets resulting from operations	$	2,040

*Not shown due to rounding.

See Notes to Financial Statements

Statement of Changes in Net Assets
IVY CUNDILL GLOBAL VALUE FUND
(In Thousands)

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the fiscal year ended 12-31-03

INCREASE IN NET ASSETS
Operations:
Net investment loss	$	(490	)	$	(123	)	$	(56	)
Realized net gain (loss) on investments		574			(300	)		704
Unrealized appreciation		1,956			7,959			4,839


Net increase in net assets resulting from operations		2,040			7,536			5,487

Distributions to shareholders from (Note 1F):^⁽¹⁾
Net investment income:
Class A		- -			- -			(81	)
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -			(3	)
Advisor Class		- -			- -			(16	)
Class I		- -			- -			- -	*
Realized gains on investment transactions:
Class A		- -			- -			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -			- -
Advisor Class		- -			- -			- -
Class I		- -			- -			- -

		- -			- -			(100	)

Capital share transactions (Note 5)		141,117			39,733			41,413

Total increase		143,157			47,269			46,800
NET ASSETS
Beginning of period		99,564			52,295			5,495

End of period	$	242,721		$	99,564		$	52,295

Undistributed net investment loss	$	(726	)	$	(266	)	$	(158	)

*Not shown due to rounding.

(1)See "Financial Highlights" on pages 69 - 74.

See Notes to Financial Statements

Financial Highlights
     IVY CUNDILL GLOBAL VALUE FUND
      Class A Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

		For the six months ended				For the fiscal period ended				For the fiscal year ended December 31,						For the period from 9-4-01^⁽¹⁾to
		9-30-04				3-31-04				2003			2002			12-31-01

Net asset value, beginning of period		$	12.57			$	11.41			$	8.39		$	9.64		$	10.15

Income (loss) from investment operations:
Net investment income (loss)			(0.00	)			0.01				0.01		(0.00		)^⁽²⁾		0.01
Net realized and unrealized gain (loss) on investments			0.09				1.15				3.05		(1.17		)		(0.23	)

Total from investment operations			0.09				1.16				3.06		(1.17		)		(0.22	)

Less distributions from:
Net investment income			(0.00	)			(0.00	)			(0.04	)	(0.00		)		(0.02	)
Capital gains			(0.00	)			(0.00	)			(0.00	)	(0.08		)		(0.27	)

Total distributions			(0.00	)			(0.00	)			(0.04	)	(0.08		)		(0.29	)

Net asset value, end of period		$	12.66			$	12.57			$	11.41		$	8.39		$	9.64

Total return^⁽³⁾			0.72	%			10.17	%			36.43	%	-12.17		%		- -2.07	%
Net assets, end of period (in thousands)	$160,335				$58,678				$29,530			$1,403					$213
Ratio of expenses to average net assets including reimbursement			1.81	%^⁽⁴⁾			1.70	%^⁽⁴⁾			2.05	%		2.28	%		4.47	%^⁽⁴⁾
Ratio of net investment income (loss) to average net assets including reimbursement			- -0.38	%^⁽⁴⁾			- -0.09	%^⁽⁴⁾			0.18	%		0.02	%		0.94	%^⁽⁴⁾
Ratio of expenses to average net assets excluding reimbursement			NA				1.84	%^⁽⁴⁾			2.21	%		4.97	%		31.77	%^⁽⁴⁾
Ratio of net investment income (loss) to average net assets excluding reimbursement			NA				- -0.23	%^⁽⁴⁾			0.02	%	- -2.67		%	- -26.36		%^⁽⁴⁾
Portfolio turnover rate			1	%			1	%			24	%		122	%		57	%^⁽⁵⁾

(1)Commencement of operations of the class.

(2)Based on average shares outstanding.

(3)Total return calculated without taking into account the sales load deducted on an initial purchase.

(4)Annualized.

(5)For the 12 months ended December 31, 2001.

See Notes to Financial Statements

Financial Highlights
     IVY CUNDILL GLOBAL VALUE FUND
      Class B Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended			For the fiscal period ended			For the fiscal year ended December 31,						For the period from 9-26-01⁽¹⁾ to
	9-30-04			3-31-04			2003			2002			12-31-01

Net asset value, beginning of period	$	12.38		$	11.26		$	8.32		$	9.61		$	9.26

Income (loss) from investment operations:
Net investment income (loss)		(0.02	)		(0.02	)		(0.06	)	(0.05		)^⁽²⁾		0.01
Net realized and unrealized gain (loss) on investments		0.06			1.14			3.00		(1.16		)		0.62

Total from investment operations		0.04			1.12			2.94		(1.21		)		0.63

Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.02		)
Capital gains		(0.00	)		(0.00	)		(0.00	)	(0.08		)	(0.26		)

Total distributions		(0.00	)		(0.00	)		(0.00	)	(0.08		)	(0.28		)

Net asset value, end of period	$	12.42		$	12.38		$	11.26		$	8.32		$	9.61

Total return		0.32	%		9.95	%		35.34	%	- -12.62		%		6.91	%
Net assets, end of period (in millions)		$23			$12			$7			$2			$1
Ratio of expenses to average net assets including reimbursement		2.69	%^⁽³⁾		2.52	%^⁽³⁾		3.20	%		2.84	%		6.04	%^⁽³⁾
Ratio of net investment income (loss) to average net assets including reimbursement		- -1.29	%^⁽³⁾		- -1.31	%^⁽³⁾		- -1.13	%	- -0.54		%		0.60	%^⁽³⁾
Ratio of expenses to average net assets excluding reimbursement		NA			2.67	%^⁽³⁾		3.36	%		5.53	%	39.53		%^⁽³⁾
Ratio of net investment loss to average net assets excluding reimbursement		NA			- -1.46	%^⁽³⁾		- -1.29	%	- -3.23		%	- -32.89		%^⁽³⁾
Portfolio turnover rate		1	%		1	%		24	%		122	%		57	%^⁽⁴⁾

(1)Commencement of operations of the class.

(2)Based on average shares outstanding.

(3)Annualized.

(4)For the 12 months ended December 31, 2001.

See Notes to Financial Statements

Financial Highlights
     IVY CUNDILL GLOBAL VALUE FUND
      Class C Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

		For the six months ended				For the fiscal period ended				For the fiscal year ended December 31,						For the period from 10-19-01^⁽¹⁾ to
		9-30-04				3-31-04				2003			2002			12-31-01

Net asset value, beginning of period		$	12.30			$	11.19			$	8.26		$	9.57		$	9.44

Income (loss) from investment operations:
Net investment income (loss)			(0.03	)			(0.01	)			(0.03	)	(0.07		)^⁽²⁾		0.01
Net realized and unrealized gain (loss) on investments			0.08				1.12				2.96		(1.16		)		0.40

Total from investment operations			0.05				1.11				2.93		(1.23		)		0.41

Less distributions from:
Net investment income			(0.00	)			(0.00	)			(0.00	)	(0.00		)	(0.02		)
Capital gains			(0.00	)			(0.00	)			(0.00	)	(0.08		)	(0.26		)

Total distributions			(0.00	)			(0.00	)			(0.00	)	(0.08		)	(0.28		)

Net asset value, end of period		$	12.35			$	12.30			$	11.19		$	8.26		$	9.57

Total return			0.41	%			9.92	%			35.47	%	- -12.88		%		4.44	%
Net assets, end of period (in thousands)	$48,927				$23,840				$11,235				$446				$30
Ratio of expenses to average net assets including reimbursement			2.50	%^⁽³⁾			2.35	%^⁽³⁾			2.93	%		3.10	%		7.71	%^⁽³⁾
Ratio of net investment income (loss) to average net assets including reimbursement			- -1.09	%^⁽³⁾			- -1.09	%^⁽³⁾			- -0.83	%	- -0.80		%		0.99	%^⁽³⁾
Ratio of expenses to average net assets excluding reimbursement			NA				2.50	%^⁽³⁾			3.10	%		5.79	%	51.61		%^⁽³⁾
Ratio of net investment loss to average net assets excluding reimbursement			NA				- -1.23	%^⁽³⁾			- -1.00	%	- -3.49		%	-42.91		%^⁽³⁾
Portfolio turnover rate			1	%			1	%			24	%		122	%		57	%^⁽⁴⁾

(1)Commencement of operations of the class.

(2)Based on average shares outstanding.

(3)Annualized.

(4)For the 12 months ended December 31, 2001.

See Notes to Financial Statements

Financial Highlights
     IVY CUNDILL GLOBAL VALUE FUND
      Class Y Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the period from 7-24-03⁽¹⁾to 12-31-03

Net asset value, beginning of period	$	12.58		$	11.40		$	9.84

Income (loss) from investment operations:
Net investment income (loss)		0.02			(0.01	)		0.02
Net realized and unrealized gain on investments		0.10			1.19			1.58

Total from investment operations		0.12			1.18			1.60

Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.04	)
Capital gains		(0.00	)		(0.00	)		(0.00	)

Total distributions		(0.00	)		(0.00	)		(0.04	)

Net asset value, end of period	$	12.70		$	12.58		$	11.40

Total return		0.95	%		10.35	%		16.28	%
Net assets, end of period (in millions)		$8			$2			$1
Ratio of expenses to average net assets including reimbursement		1.20	%^⁽²⁾		1.20	%^⁽²⁾		1.76	%^⁽²⁾
Ratio of net investment income (loss) to average net assets including reimbursement		0.21	%^⁽²⁾		- -0.32	%^⁽²⁾		0.55	%^⁽²⁾
Ratio of expenses to average net assets excluding reimbursement		1.55	%^⁽²⁾		1.80	%^⁽²⁾		2.09	%^⁽²⁾
Ratio of net investment income (loss) to average net assets excluding reimbursement		- -0.13	%^⁽²⁾		- -0.92	%^⁽²⁾		0.22	%^⁽²⁾
Portfolio turnover rate		1	%		1	%		24	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the 12 months ended December 31, 2003.

See Notes to Financial Statements

Financial Highlights
     IVY CUNDILL GLOBAL VALUE FUND
      Advisor Class Shares⁽¹⁾
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended			For the fiscal period ended			For the fiscal year ended December 31,									For the period from 4-19-00^⁽²⁾to
	9-30-04			3-31-04			2003			2002			2001			12-31-00

Net asset value, beginning of period	$	12.54		$	11.37		$	8.34		$	9.55		$	10.07		$	10.00

Income (loss) from investment operations:
Net investment income (loss)		(0.01	)		(0.01	)		(0.01	)		0.04	^⁽³⁾		0.03			0.05
Net realized and unrealized gain (loss) on investments		0.13			1.18			3.10		(1.17		)		(0.25	)		0.41

Total from investment operations		0.12			1.17			3.09		(1.13		)		(0.22	)		0.46

Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.06	)	(0.00		)		(0.02	)		(0.19	)
Capital gains		(0.00	)		(0.00	)		(0.00	)	(0.08		)		(0.28	)		(0.20	)

Total distributions		(0.00	)		(0.00	)		(0.06	)	(0.08		)		(0.30	)		(0.39	)

Net asset value, end of period	$	12.66		$	12.54		$	11.37		$	8.34		$	9.55		$	10.07

Total return		0.96	%		10.29	%		37.11	%	- -11.86		%		- -2.13	%		4.66	%
Net assets, end of period (in millions)		$3			$3			$3			$2			$1			$1
Ratio of expenses to average net assets including reimbursement		1.23	%^⁽⁴⁾		1.26	%^⁽⁴⁾		2.12	%		1.83	%		1.40	%		1.95	%^⁽⁴⁾
Ratio of net investment income (loss) to average net assets including reimbursement		0.11	%^⁽⁴⁾		- -0.17	%^⁽⁴⁾		- -0.07	%		0.47	%		0.37	%		0.70	%^⁽⁴⁾
Ratio of expenses to average net assets excluding reimbursement		NA			1.41	%^⁽⁴⁾		2.28	%		4.52	%		10.30	%		19.15	%^⁽⁴⁾
Ratio of net investment loss to average net assets excluding reimbursement		NA			- -0.32	%^⁽⁴⁾		- -0.23	%	- -2.22		%		- -8.53	%	- -16.50		%^⁽⁴⁾
Portfolio turnover rate		1	%		1	%		24	%		122	%		57	%		53	%

(1)See Note 5 to financial statements.

(2)Commencement of operations of the class.

(3)Based on average shares outstanding.

(4)Annualized.

See Notes to Financial Statements

Financial Highlights
     IVY CUNDILL GLOBAL VALUE FUND
      Class I Shares⁽¹⁾
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the fiscal year ended 12-31-03			For the period from 11-5-02⁽²⁾to 12-31-02

Net asset value, beginning of period	$	12.49		$	11.33		$	8.31		$	8.85

Income (loss) from investment operations:
Net investment income (loss)		(0.01	)		(0.01	)		0.00			0.26
Net realized and unrealized gain (loss) on investments		0.11			1.17			3.08		(0.72		)

Total from investment operations		0.10			1.16			3.08		(0.46		)

Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.06	)	(0.00		)
Capital gains		(0.00	)		(0.00	)		(0.00	)	(0.08		)

Total distributions		(0.00	)		(0.00	)		(0.06	)	(0.08		)

Net asset value, end of period	$	12.59		$	12.49		$	11.33		$	8.31

Total return		0.80	%		10.24	%		37.12	%	- -5.23		%
Net assets, end of period (in thousands)		$63			$63			$57			$42
Ratio of expenses to average net assets including reimbursement		1.59	%^⁽³⁾		1.39	%^⁽³⁾		2.03	%	11.51		%^⁽³⁾
Ratio of net investment income (loss) to average net assets including reimbursement		- -0.24	%^⁽³⁾		- -0.29	%^⁽³⁾		0.03	%		2.96	%^⁽³⁾
Ratio of expenses to average net assets excluding reimbursement		NA			1.53	%^⁽³⁾		2.20	%	28.44		%^⁽³⁾
Ratio of net investment loss to average net assets excluding reimbursement		NA			- -0.44	%^⁽³⁾		- -0.13	%	- -13.97		%^⁽³⁾
Portfolio turnover rate		1	%		1	%		24	%		122	%^⁽⁴⁾

(1)See Note 5 to financial statements.

(2)Commencement of operations of the class.

(3)Annualized.

(4)For the 12 months ended December 31, 2002.

See Notes to Financial Statements

SHAREHOLDER SUMMARY OF IVY DIVIDEND INCOME FUND

Portfolio Highlights

On September 30, 2004, Ivy Dividend Income Fund had net assets totaling $34,448,019 invested in a diversified portfolio of:

91.66%		Common Stocks
8.34%		Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2004,
your Fund owned:

Financial Services Stocks	$	16.93
Energy Stocks	$	15.52
Consumer Nondurables Stocks	$	9.48
Health Care Stocks	$	9.19
Cash and Cash Equivalents	$	8.34
Technology Stocks	$	7.84
Utilities Stocks	$	7.83
Consumer Services Stocks	$	5.46
Capital Goods Stocks	$	4.32
Shelter Stocks	$	4.04
Transportation Stocks	$	3.23
Multi-Industry Stocks	$	2.96
Raw Materials Stocks	$	2.37
Business Equipment and Services Stocks	$	1.40
Retail Stocks	$	1.09

The Investments of Ivy Dividend Income Fund
September 30, 2004
COMMON STOCKS	Shares		Value


Aircraft - 1.83%
Goodrich Corporation	10,400	$	326,144
Lockheed Martin Corporation	5,450		304,001

			630,145

Aluminum - 0.89%
Alcoa Incorporated	9,100		305,669


Banks - 3.77%
Bank of America Corporation	12,600		545,958
Citigroup Inc.	7,200		317,664
Wells Fargo & Company	7,300		435,299

			1,298,921

Beverages - 2.02%
Anheuser-Busch Companies, Inc.	4,800		239,760
Diageo plc, ADR	9,050		456,392

			696,152

Business Equipment and Services - 1.40%
Genuine Parts Company	12,600		483,588


Capital Equipment - 3.58%
Caterpillar Inc.	6,850		551,083
Deere & Company	10,550		681,003

			1,232,086

Chemicals - Petroleum and Inorganic - 1.48%
Dow Chemical Company (The)	5,900		266,562
du Pont (E.I.) de Nemours and Company	5,650		241,820

			508,382

Computers - Peripherals - 4.15%
Microsoft Corporation	29,000		801,705
SAP Aktiengesellschaft, ADR	16,100		627,095

			1,428,800

Electrical Equipment - 0.74%
Emerson Electric Co.	4,100		253,749


Electronic Components - 1.86%
Microchip Technology Incorporated	16,150		432,739
Texas Instruments Incorporated	9,800		208,544

			641,283

Finance Companies - 3.57%
Fannie Mae	7,827		496,232
SLM Corporation	16,450		733,670

			1,229,902

Food and Related - 1.36%
ConAgra Foods, Inc.	18,250		469,207


Forest and Paper Products - 1.03%
International Paper Company	8,750		353,587


Health Care - Drugs - 4.55%
Abbott Laboratories	11,900		504,084
Eli Lilly and Company	7,250		435,362
Pfizer Inc.	20,550		628,830

			1,568,276

Health Care - General - 2.93%
Boston Scientific Corporation*	13,450		534,369
Wyeth	12,700		474,980

			1,009,349

Hospital Supply and Management - 1.71%
Medtronic, Inc.	11,350		589,065


Hotels and Gaming - 4.17%
Harrah's Entertainment, Inc.	6,600		349,668
Mandalay Resort Group	5,150		353,547
Starwood Hotels & Resorts Worldwide, Inc.	15,800		733,436

			1,436,651

Household - General Products - 2.21%
Colgate-Palmolive Company	8,200		370,476
Procter & Gamble Company (The)	7,200		389,664

			760,140

Insurance - Property and Casualty - 1.24%
MGIC Investment Corporation	6,419		427,184


Multiple Industry - 2.96%
General Electric Company	30,350		1,019,153


Petroleum - International - 7.91%
Anadarko Petroleum Corporation	11,950		793,002
BP p.l.c., ADR	6,150		353,810
Burlington Resources Inc.	13,250		540,600
Exxon Mobil Corporation	21,500		1,039,095

			2,726,507

Petroleum - Services - 7.61%
Baker Hughes Incorporated	15,550		679,846
BJ Services Company*	8,500		445,485
Patterson-UTI Energy, Inc.	33,350		635,318
Schlumberger Limited	10,100		679,831
Transocean Inc.*	5,100		182,478

			2,622,958

Publishing - 1.29%
Knight-Ridder, Inc.	6,800		445,060


Railroad - 0.98%
Union Pacific Corporation	5,750		336,950


Real Estate Investment Trust - 3.01%
Equity Office Properties Trust	8,950		243,887
Maguire Properties, Inc.	5,800		140,998
ProLogis	7,700		271,348
Simon Property Group, Inc.	7,100		380,773

			1,037,006

Retail - General Merchandise - 1.09%
May Department Stores Company (The)	14,700		376,761


Savings and Loans - 0.65%
Capitol Federal Financial	6,950		223,755


Security and Commodity Brokers - 7.70%
Chicago Mercantile Exchange Holdings Inc.	5,900		951,670
Goldman Sachs Group, Inc. (The)	4,100		382,284
Merrill Lynch & Co., Inc.	7,300		362,956
Morgan (J.P.) Chase & Co.	8,500		337,705
Morgan Stanley	7,050		347,565
New York Community Bancorp, Inc.	13,250		272,155

			2,654,335

Tobacco - 3.89%
Altria Group, Inc.	17,550		825,552
Reynolds American Inc.	7,550		513,702

			1,339,254

Trucking and Shipping - 2.25%
United Parcel Service, Inc., Class B	10,200		774,384


Utilities - Electric - 2.36%
Dominion Resources, Inc.	6,150		401,288
Westar Energy, Inc.	20,350		411,070

			812,358

Utilities - Gas and Pipeline - 1.81%
Kinder Morgan, Inc.	9,950		625,059


Utilities - Telephone - 3.66%
BellSouth Corporation	15,350		416,292
SBC Communications Inc.	15,900		412,605
Vodafone Group Plc, ADR	17,900		431,569

			1,260,466


TOTAL COMMON STOCKS - 91.66%		$	31,576,142

(Cost: $29,336,378)

TOTAL SHORT-TERM SECURITIES - 8.15%		$	2,806,000

(Cost: $2,806,000)

TOTAL INVESTMENT SECURITIES - 99.81%		$	34,382,142

(Cost: $32,142,378)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.19%			65,877


NET ASSETS - 100.00%		$	34,448,019

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

Statement of Assets and Liabilities
      IVY DIVIDEND INCOME FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (cost-$32,142) (Notes 1 and 3)	$	34,382
Receivables:
Investment securities sold		255
Fund shares sold		137
Dividends and interest		65
Prepaid and other assets		26

Total assets		34,865

LIABILITIES
Payable for investment securities purchased		344
Payable to Fund shareholders		43
Accrued shareholder servicing (Note 2)		10
Due to custodian		5
Accrued accounting and administrative services fees (Note 2)		2
Accrued investment management fee (Note 2)		1
Accrued distribution and service fees (Note 2)		- -	*
Other		12

Total liabilities		417

Total net assets	$	34,448

NET ASSETS
Capital paid in	$	32,162
Accumulated undistributed income:
Accumulated undistributed net investment income		17
Accumulated undistributed net realized gain on investment transactions		29
Net unrealized appreciation in value of investments		2,240

Net assets applicable to outstanding units of capital	$	34,448

Net asset value per share (net assets divided by shares outstanding):
Class A		$11.22
Class B		$11.16
Class C		$11.16
Class Y		$11.22
Capital shares outstanding:
Class A		1,979
Class B		338
Class C		677
Class Y		82

*Not shown due to rounding.

See Notes to Financial Statements

Statement of Operations
      IVY DIVIDEND INCOME FUND
      For the Six Months Ended September 30, 2004
      (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $1)	$	312
Interest and amortization		14

Total income		326

Expenses (Note 2):
Investment management fee		102
Shareholder servicing:
Class A		25
Class B		6
Class C		11
Class Y		1
Distribution fee:
Class A		5
Class B		12
Class C		25
Service fee:
Class A		19
Class B		4
Class C		8
Class Y		1
Registration fees		31
Accounting and administrative services fees		14
Audit fees		9
Legal fees		6
Custodian fees		1
Other		7

Total expenses		287

Net investment income		39

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on securities	(102		)
Unrealized appreciation in value of securities during the period		520

Net gain on investments		418

Net increase in net assets resulting from operations	$	457

See Notes to Financial Statements

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

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the fiscal period ended 12-31-03

INCREASE IN NET ASSETS
Operations:
Net investment income (loss)	$	39		$	(3	)	$	64
Realized net gain (loss) on investments		(102	)		149			(14	)
Unrealized appreciation (depreciation)		520			(49	)		1,769

Net increase in net assets resulting from operations		457			97			1,819

Distributions to shareholders from net investment income (Note 1F):^⁽¹⁾
Class A		(22	)		(7	)		(49	)
Class B		- -			- -			(1	)
Class C		- -			- -			(3	)
Class Y		(1	)		(1	)		(3	)

		(23	)		(8	)		(56	)

Capital share transactions (Note 5)		8,345			2,982			20,835

Total increase		8,779			3,071			22,598
NET ASSETS
Beginning of period		25,669			22,598			0

End of period	$	34,448		$	25,669		$	22,598

Undistributed net investment income	$	17		$	1		$	8

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

See Notes to Financial Statements

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

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the period from 6-30-03⁽¹⁾to 12-31-03

Net asset value, beginning of period	$	11.07		$	11.03		$	10.00

Income from investment operations:
Net investment income		0.02			0.01			0.04
Net realized and unrealized gain on investments		0.14			0.04			1.03

Total from investment operations		0.16			0.05			1.07

Less distributions from:
Net investment income		(0.01	)		(0.01	)		(0.04	)
Capital gains		(0.00	)		(0.00	)		(0.00	)

Total distributions		(0.01	)		(0.01	)		(0.04	)

Net asset value, end of period	$	11.22		$	11.07		$	11.03

Total return⁽²⁾		1.46	%		0.41	%		10.70	%
Net assets, end of period (in millions)		$22			$17			$16
Ratio of expenses to average net assets including voluntary expense waiver		1.69	%^⁽³⁾		2.00	%^⁽³⁾		1.11	%^⁽³⁾
Ratio of net investment income to average net assets including voluntary expense waiver		0.55	%^⁽³⁾		0.20	%^⁽³⁾		1.34	%^⁽³⁾
Ratio of expenses to average net assets excluding voluntary expense waiver		- -	^⁽⁴⁾		2.40	%^⁽³⁾		1.81	%^⁽³⁾
Ratio of net investment income (loss) to average net assets excluding voluntary expense waiver		- -	^⁽⁴⁾		- -0.20	%^⁽³⁾		0.64	%^⁽³⁾
Portfolio turnover rate		15	%		12	%		16	%

(1)Commencement of operations of the class.

(2)Total return calculated without taking into account the sales load deducted on an initial purchase.

(3)Annualized.

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

See Notes to Financial Statements

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

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the period from 6-30-03⁽¹⁾to 12-31-03

Net asset value, beginning of period	$	11.05		$	11.03		$	10.00

Income (loss) from investment operations:
Net investment income (loss)		(0.01	)		(0.02	)		0.01
Net realized and unrealized gain on investments		0.12			0.04			1.03

Total from investment operations		0.11			0.02			1.04

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

Total distributions		(0.00	)		(0.00	)		(0.01	)

Net asset value, end of period	$	11.16		$	11.05		$	11.03


Total return		1.00	%		0.18	%		10.36	%
Net assets, end of period (in millions)		$4			$2			$2
Ratio of expenses to average net assets including voluntary expense waiver		2.55	%^⁽²⁾		2.99	%^⁽²⁾		2.03	%^⁽²⁾
Ratio of net investment income (loss) to average net assets including voluntary expense waiver		- -0.30	%^⁽²⁾		- -0.81	%^⁽²⁾		0.36	%^⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver		- -	^⁽³⁾		3.39	%^⁽²⁾		2.73	%^⁽²⁾
Ratio of net investment loss to average net assets excluding voluntary expense waiver		- -	^⁽³⁾		- -1.21	%^⁽²⁾		- -0.34	%^⁽²⁾
Portfolio turnover rate		15	%		12	%		16	%

(1)Commencement of operations of the class.

(2)Annualized.

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

See Notes to Financial Statements

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

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the period from 6-30-03⁽¹⁾to 12-31-03

Net asset value, beginning of period	$	11.05		$	11.03		$	10.00

Income (loss) from investment operations:
Net investment income (loss)		(0.01	)		(0.02	)		0.01
Net realized and unrealized gain on investments		0.12			0.04			1.03

Total from investment operations		0.11			0.02			1.04

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

Total distributions		(0.00	)		(0.00	)		(0.01	)

Net asset value, end of period	$	11.16		$	11.05		$	11.03

Total return		1.00	%		0.18	%		10.38	%
Net assets, end of period (in millions)		$7			$6			$5
Ratio of expenses to average net assets including voluntary expense waiver		2.52	%^⁽²⁾		2.88	%^⁽²⁾		1.98	%^⁽²⁾
Ratio of net investment income (loss) to average net assets including voluntary expense waiver		- -0.29	%^⁽²⁾		- -0.68	%^⁽²⁾		0.45	%^⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver		- -	^⁽³⁾		3.28	%^⁽²⁾		2.68	%^⁽²⁾
Ratio of net investment loss to average net assets excluding voluntary expense waiver		- -	^⁽³⁾		- -1.08	%^⁽²⁾		- -0.25	%^⁽²⁾
Portfolio turnover rate		15	%		12	%		16	%

(1)Commencement of operations of the class.

(2)Annualized.

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

See Notes to Financial Statements

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

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the period from 6-30-03⁽¹⁾to 12-31-03

Net asset value, beginning of period	$	11.07		$	11.03		$	10.00

Income from investment operations:
Net investment income		0.03			0.01			0.05
Net realized and unrealized gain on investments		0.14			0.04			1.03

Total from investment operations		0.17			0.05			1.08

Less distributions from:
Net investment income		(0.02	)		(0.01	)		(0.05	)
Capital gains		(0.00	)		(0.00	)		(0.00	)

Total distributions		(0.02	)		(0.01	)		(0.05	)

Net asset value, end of period	$	11.22		$	11.07		$	11.03

Total return		1.52	%		0.42	%		10.78	%
Net assets, end of period (in millions)		$1			$1			$1
Ratio of expenses to average net assets including voluntary expense waiver		1.52	%^⁽²⁾		1.91	%^⁽²⁾		1.25	%^⁽²⁾
Ratio of net investment income to average net assets including voluntary expense waiver		0.69	%^⁽²⁾		0.28	%^⁽²⁾		1.08	%^⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver		- -	^⁽³⁾		2.31	%^⁽²⁾		1.95	%^⁽²⁾
Ratio of net investment income (loss) to average net assets excluding voluntary expense waiver		- -	^⁽³⁾		- -0.12	%^⁽²⁾		0.38	%^⁽²⁾
Portfolio turnover rate		15	%		12	%		16	%

(1)Commencement of operations of the class.

(2)Annualized.

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

See Notes to Financial Statements

SHAREHOLDER SUMMARY OF IVY EUROPEAN OPPORTUNITIES FUND

Portfolio Highlights

On September 30, 2004, Ivy European Opportunities Fund had net assets totaling $140,861,991 invested in a diversified portfolio of:

95.00%		Common Stocks
5.00%		Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2004,
your Fund was invested by geographic region and by industry, respectively, as follows:

Europe	$	82.95
Scandinavia	$	7.79
Cash and Cash Equivalents	$	5.00
South America	$	2.58
Other	$	1.13
Pacific Basin	$	0.55

Financial Services Stocks	$	14.35
Multi-Industry Stocks	$	11.04
Utilities Stocks	$	11.01
Capital Goods Stocks	$	10.25
Consumer Nondurables Stocks	$	9.68
Energy Stocks	$	7.23
Retail Stocks	$	6.47
Business Equipment and Services Stocks	$	6.45
Health Care Stocks	$	6.10
Consumer Durables Stocks	$	5.46
Cash and Cash Equivalents	$	5.00
Technology Stocks	$	2.19
Shelter Stocks	$	1.95
Transportation Stocks	$	1.18
Consumer Services Stocks	$	1.09
Raw Materials Stocks	$	0.55

The Investments of Ivy European Opportunities Fund
September 30, 2004
COMMON STOCKS		Shares		Value


Argentina - 2.58%
NDS Group plc, ADR*		135,000	$	3,638,250


Australia - 0.55%
Centamin Egypt Limited (A)*		5,000,000		780,433


Austria - 5.04%
Andritz AG (A)		24,000		1,342,742
Erste Bank der oesterreichischen Sparkassen AG (A)*		28,000		1,164,902
Telekom Austria Aktiengesellschaft (A)		119,000		1,667,027
Wienerberger AG (A)		78,000		2,925,420

				7,100,091

Belgium - 0.65%
Omega Pharma S.A. (A)		18,626		910,461


Bermuda - 1.13%
Alea Group Holdings (Bermuda) Ltd (A)*		410,971		1,584,154


Czech Republic - 1.71%
CESKY TELECOM, a.s., GDR Registered Shares		100,000		1,305,000
Zentiva N.V., GDR (B)*		50,000		1,100,000

				2,405,000

Finland - 1.06%
Elcoteq Network Corporation, Class A (A)		80,000		1,490,280


France - 10.67%
Compagnie de Saint-Gobain (A)		32,000		1,642,487
France Telecom (A)*		124,900		3,111,573
Iliad SA (A)		154,000		3,633,799
Renault (A)		23,114		1,890,242
Sanofi-Aventis (A)		48,800		3,539,316
THOMSON (A)		58,000		1,214,429

				15,031,846

Germany - 10.55%
Deutsche Post AG (A)		85,400		1,655,569
freenet.de AG (A)*		63,000		1,120,393
Hannover Ruckversicherungs-Aktiengesellschaft (A)		50,000		1,617,575
Hochtief Aktiengesellschaft (A)		58,600		1,442,407
Hypo Real Estate Holding AG (A)*		57,000		1,946,678
mobilcom Aktiengesellschaft (A)		190,000		2,772,542
Pfleiderer Ag, Registered Shares (A)*		372,554		3,007,386
Porsche AG (A)		2,000		1,294,805

				14,857,355

Ireland - 1.60%
eircom Group plc (A)*		1,200,000		2,250,323


Italy - 2.62%
AZIMUT HOLDING S.P.A. (A)*		567,000		2,387,093
ENEL S.p.A. (A)		160,000		1,307,472

				3,694,565

Netherlands - 4.18%
Aalberts Industries N.V. (A)		85,000		3,087,674
Buhrmann NV (A)		166,909		1,258,216
New Skies Satellites N.V. (A)		195,736		1,538,725

				5,884,615

Spain - 5.22%
ACS Actividades de Construccion y Servicios, S.A. (A)		195,200		3,556,285
Altadis, S.A. (A)		62,000		2,109,740
Repsol YPF, S.A. (A)		77,000		1,690,673

				7,356,698

Sweden - 6.73%
AB Volvo, Class B (A)		29,000		1,022,949
Oriflame Cosmetics S.A., SDR (A)*		99,564		2,247,973
Scania AB, Class B (A)		53,500		1,810,062
Song Networks Holding AB (A)*		357,000		4,397,698

				9,478,682

Switzerland - 1.40%
Credit Suisse Group, Registered Shares (A)*		61,716		1,972,556


United Kingdom - 39.31%
Admiral Group Plc (A)*		520,026		2,710,342
British American Tobacco p.l.c. (A)		140,000		2,029,398
Center Parcs (UK) Group Plc (A)*		250,000		359,678
Collins Stewart Tullett plc (A)(C)*		48,000		304,030
Egg plc (A)*		1,160,000		1,973,297
Enterprise Inns plc (A)		160,000		1,650,446
Evolution Group Plc (The) (A)		1,200,000		3,290,035
Friends Provident plc (A)		600,000		1,512,004
Halfords Group Plc (A)*		625,000		3,302,703
ICAP plc (A)		230,009		915,744
iSOFT Group plc (A)		225,000		1,588,012
Imperial Tobacco Group PLC (A)		70,000		1,525,215
Inter-Alliance Group PLC (A)(B)*	21,000,000			300,229
Interserve Plc (A)		333,000		1,715,989
Kensington Group plc (A)		143,000		1,036,701
MFI Furniture Group Plc (A)		550,000		1,050,078
Man Group plc (A)		51,682		1,112,059
Omega International Group PLC (A)*		270,000		640,091
Persimmon plc (A)		120,000		1,436,540
Photo-Me International plc (A)*		986,331		1,909,911
Premier Brands Foods plc (A)*		390,000		1,626,830
Punch Taverns plc (A)		318,368		2,903,799
Regal Petroleum plc (A)*		250,700		1,637,827
Regal Petroleum plc (A)(B)*		1,050,000		6,859,668
Rexam PLC (A)		200,000		1,532,816
Royal Bank of Scotland Group plc (The) (A)		51,690		1,492,952
Shire Pharmaceuticals Group plc (A)*		322,000		3,046,186
Smith & Nephew plc (A)		120,000		1,103,193
Taylor Woodrow plc (A)		275,000		1,310,110
tesco plc (A)		678,221		3,501,092

				55,376,975


TOTAL COMMON STOCKS - 95.00%			$	133,812,284

(Cost: $111,054,606)

TOTAL SHORT-TERM SECURITIES - 5.33%			$	7,511,033

(Cost: $7,511,033)

TOTAL INVESTMENT SECURITIES - 100.33%			$	141,323,317

(Cost: $118,565,639)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.33%)				(461,326	)


NET ASSETS - 100.00%			$	140,861,991

Notes to Schedule of Investments
	*No dividends were paid during the preceding 12 months.
(A)	Listed on an exchange outside the United States.
(B)	Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2004, the total value of these securities amounted to $8,259,897 or 5.86% of net assets.
(C)	Security valued in good faith by the Valuation Committee of the Board of Trustees. See Note 1 to financial statements.
	See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
	See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY EUROPEAN OPPORTUNITIES FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (cost-$118,566) (Notes 1 and 3)	$	141,323
Receivables:
Investment securities sold		1,064
Fund shares sold		1,023
Dividends and interest		395
Prepaid and other assets		20

Total assets		143,825

LIABILITIES
Payable for investment securities purchased		2,268
Payable to Fund shareholders		381
Accrued management fee (Note 2)		110
Accrued shareholder servicing (Note 2)		57
Due to custodian		37
Accrued distribution fee (Note 2)		35
Accrued service fee (Note 2)		27
Accrued accounting and administrative services fees (Note 2)		6
Other		42

Total liabilities		2,963

Total net assets	$	140,862

NET ASSETS
Capital paid in	$	185,520
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		354
Accumulated undistributed net realized loss on investment transactions		(67,781	)
Net unrealized appreciation in value of investments		22,769

Net assets applicable to outstanding units of capital	$	140,862

Net asset value per share (net assets divided by shares outstanding):
Class A		$22.69
Class B		$21.96
Class C		$22.04
Class Y		$22.71
Advisor Class		$22.93
Capital shares outstanding:
Class A		3,362
Class B		1,425
Class C		1,247
Class Y		84
Advisor Class		170

See Notes to Financial Statements

Statement of Operations
      IVY EUROPEAN OPPORTUNITIES FUND
      For the Six Months Ended September 30, 2004
      (In Thousands)

INVESTMENT INCOME			��
Income (Note 1B):
Dividends (net of foreign withholding taxes of $223)	$	1,647
Interest and amortization		47

Total income		1,694

Expenses (Note 2):
Investment management fee		660
Shareholder servicing:
Class A		117
Class B		55
Class C		46
Class Y		1
Advisor Class		3
Class I		- -	*
Distribution fee:
Class A		9
Class B		116
Class C		99
Service fee:
Class A		77
Class B		38
Class C		33
Class Y		2
Custodian fees		36
Accounting and administrative services fees		34
Audit fees		20
Legal fees		18
Other		89

Total expenses		1,453

Net investment income		241

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		4,256
Realized net gain on foreign currency transactions		30

Realized net gain on investments		4,286
Unrealized depreciation in value of investments during the period	(3,721		)

Net gain on investments		565

Net increase in net assets resulting from operations	$	806

*Not shown due to rounding.

See Notes to Financial Statements

Statement of Changes in Net Assets
IVY EUROPEAN OPPORTUNITIES FUND
(In Thousands)

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the fiscal year ended 12-31-03

INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)	$	241		$	(340	)	$	(109	)
Realized net gain (loss) on investments		4,286			7,171		(22,435		)
Unrealized appreciation (depreciation)		(3,721	)		4,089			53,169

Net increase in net assets resulting from operations		806			10,920			30,625

Distributions to shareholders from (Note 1F):⁽¹⁾
Net investment income:
Class A		- -			- -			(80	)
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -			(9	)
Advisor Class		- -			- -			(27	)
Class I		- -			- -			- -	*
Realized gains on investment transactions:
Class A		- -			- -			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -			- -
Advisor Class		- -			- -			- -
Class I		- -			- -			- -

		- -			- -			(116	)

Capital share transactions (Note 5)		(6,181	)		38,536			(3,890	)

Total increase (decrease)		(5,375	)		49,456			26,619
NET ASSETS
Beginning of period		146,237			96,781			70,162

End of period	$	140,862		$	146,237		$	96,781

Undistributed net investment income (loss)	$	354		$	83		$	(114	)

*Not shown due to rounding.

(1)See "Financial Highlights" on pages 94 - 99.

See Notes to Financial Statements

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

	For the six months ended			For the fiscal period ended			For the fiscal year ended December 31,												For the period from 5-4-99⁽¹⁾to
	9-30-04			3-31-04			2003			2002			2001			2000			12-31-99

Net asset value, beginning of period	$	22.30		$	19.89		$	13.20		$	13.65		$	17.25		$	17.13		$	10.01

Income (loss) from investment operations:
Net investment income (loss)		0.08			(0.03	)		0.02		0.01		^⁽²⁾		(0.08	)		(0.07	)		0.00
Net realized and unrealized gain (loss) on investments		0.31			2.44			6.71			(0.46	)		(3.49	)		0.82			16.35

Total from investment operations		0.39			2.41			6.73			(0.45	)		(3.57	)		0.75			16.35

Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.04	)		(0.00	)		(0.00	)		(0.00	)		(0.01	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.03	)		(0.63	)		(9.22	)

Total distributions		(0.00	)		(0.00	)		(0.04	)		(0.00	)		(0.03	)		(0.63	)		(9.23	)

Net asset value, end of period	$	22.69		$	22.30		$	19.89		$	13.20		$	13.65		$	17.25		$	17.13

Total return⁽³⁾		1.75	%		12.12	%		51.02	%		- -3.30	%	- -20.67		%		4.51	%	215.58		%
Net assets, end of period (in millions)		$76			$79			$38			$20			$31			$55			$14
Ratio of expenses to average net assets including reimbursement		1.89	%^⁽⁴⁾		1.72	%^⁽⁴⁾		2.26	%		2.15	%		2.15	%		1.83	%		2.22	%^⁽⁴⁾
Ratio of net investment income (loss) to average net assets including reimbursement		0.70	%^⁽⁴⁾		- -0.61	%^⁽⁴⁾		0.18	%		0.06	%		- -0.44	%		- -0.36	%		- -0.15	%^⁽⁴⁾
Ratio of expenses to average net assets excluding reimbursement		NA			NA			NA			2.15	%		2.17	%		NA			6.10	%^⁽⁴⁾
Ratio of net investment income (loss) to average net assets excluding reimbursement		NA			NA			NA			0.06	%		- -0.46	%		NA			-4.03	%^⁽⁴⁾
Portfolio turnover rate		38	%		31	%		123	%		69	%		66	%		46	%		108	%

(1)Commencement of operations of the class.

(2)Based on average shares outstanding.

(3)Total return calculated without taking into account the sales load deducted on an initial purchase.

(4)Annualized.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,												For the period from 5-24-99^⁽¹⁾to
	9-30-04				3-31-04			2003			2002			2001			2000			12-31-99

Net asset value, beginning of period		$	21.66		$	19.36		$	12.93		$	13.54		$	17.26		$	17.13		$	10.21

Income (loss) from investment operations:
Net investment loss			(0.01	)		(0.09	)		(0.07	)		(0.10	)^⁽²⁾		(0.20	)		(0.18	)		(0.01	)
Net realized and unrealized gain (loss) on investments			0.31			2.39			6.50			(0.51	)		(3.49	)		0.83			16.15

Total from investment operations			0.30			2.30			6.43			(0.61	)		(3.69	)		0.65			16.14

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.03	)		(0.52	)		(9.22	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.03	)		(0.52	)		(9.22	)

Net asset value, end of period		$	21.96		$	21.66		$	19.36		$	12.93		$	13.54		$	17.26		$	17.13

Total return			1.39	%		11.88	%		49.73	%		-4.51	%	- -21.35		%		4.12	%	209.41		%
Net assets, end of period (in millions)			$31			$32			$29			$25			$34			$57			$6
Ratio of expenses to average net assets including reimbursement			2.65	%^⁽³⁾		2.58	%^⁽³⁾		3.00	%		2.92	%		2.89	%		2.59	%		2.96	%^⁽³⁾
Ratio of net investment loss to average net assets including reimbursement			- -0.11	%^⁽³⁾		- -1.57	%^⁽³⁾		- -0.47	%		- -0.70	%		- -1.18	%		- -1.12	%		- -0.89	%^⁽³⁾
Ratio of expenses to average net assets excluding reimbursement			NA			NA			NA			2.92	%		2.91	%		NA			6.84	%^⁽³⁾
Ratio of net investment loss to average net assets excluding reimbursement			NA			NA			NA			- -0.70	%		- -1.20	%		NA			-4.77	%^⁽³⁾
Portfolio turnover rate			38	%		31	%		123	%		69	%		66	%		46	%		108	%

(1)Commencement of operations of the class.

(2)Based on average shares outstanding.

(3)Annualized.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,												For the period from 10-24-99^⁽¹⁾ to
	9-30-04				3-31-04			2003			2002			2001			2000			12-31-99

Net asset value, beginning of period		$	21.74		$	19.43		$	12.98		$	13.59		$	17.32		$	17.13		$	11.57

Income (loss) from investment operations:
Net investment loss			(0.01	)		(0.08	)		(0.07	)		(0.10	)^⁽²⁾		(0.22	)		(0.22	)		(0.01	)
Net realized and unrealized gain (loss) on investments			0.31			2.39			6.52			(0.51	)		(3.48	)		0.88			6.00

Total from investment operations			0.30			2.31			6.45			(0.61	)		(3.70	)		0.66			5.99

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.01	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.03	)		(0.47	)		(0.42	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.03	)		(0.47	)		(0.43	)

Net asset value, end of period		$	22.04		$	21.74		$	19.43		$	12.98		$	13.59		$	17.32		$	17.13

Total return			1.38	%		11.89	%		49.69	%		-4.49	%	- -21.32		%		3.98	%		51.80	%
Net assets, end of period (in millions)			$28			$27			$23			$19			$25			$50			$8
Ratio of expenses to average net assets including reimbursement			2.65	%^⁽³⁾		2.56	%^⁽³⁾		2.98	%		2.92	%		2.91	%		2.58	%		2.96	%^⁽³⁾
Ratio of net investment loss to average net assets including reimbursement			- -0.11	%^⁽³⁾		- -1.54	%^⁽³⁾		- -0.43	%		- -0.70	%		- -1.20	%		- -1.11	%		- -0.89	%^⁽³⁾
Ratio of expenses to average net assets excluding reimbursement			NA			NA			NA			2.92	%		2.93	%		NA			6.84	%^⁽³⁾
Ratio of net investment loss to average net assets excluding reimbursement			NA			NA			NA			- -0.70	%		- -1.22	%		NA			-4.77	%^⁽³⁾
Portfolio turnover rate			38	%		31	%		123	%		69	%		66	%		46	%		108	%

(1)Commencement of operations of the class.

(2)Based on average shares outstanding.

(3)Annualized.

See Notes to Financial Statements

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

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the period from 7-24-03⁽¹⁾to 12-31-03

Net asset value, beginning of period	$	22.30		$	19.89		$	14.88

Income (loss) from investment operations:
Net investment income (loss)		0.07	^⁽²⁾		(0.02	)		(0.04	)
Net realized and unrealized gain on investments		0.34	^⁽²⁾		2.43			5.12

Total from investment operations		0.41			2.41			5.08

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

Total distributions		(0.00	)		(0.00	)		(0.07	)

Net asset value, end of period	$	22.71		$	22.30		$	19.89

Total return		1.84	%		12.12	%		34.14	%
Net assets, end of period (in millions)		$2			$4			$3
Ratio of expenses to average net assets		1.68	%^⁽³⁾		1.75	%^⁽³⁾		1.51	%^⁽³⁾
Ratio of net investment income (loss) to average net assets		0.60	%^⁽³⁾		- -0.71	%^⁽³⁾		- -0.58	%^⁽³⁾
Portfolio turnover rate		38	%		31	%		123	%^⁽⁴⁾

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(3)For the 12 months ended December 31, 2003.

See Notes to Financial Statements

Financial Highlights
     IVY EUROPEAN OPPORTUNITIES FUND
      Advisor Class Shares⁽¹⁾
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended			For the fiscal period ended			For the fiscal year ended December 31,												For the period from 5-3-99^⁽²⁾to
	9-30-04			3-31-04			2003			2002			2001			2000			12-31-99

Net asset value, beginning of period	$	22.48		$	20.03		$	13.34		$	13.80		$	17.39		$	17.23		$	10.01

Income (loss) from investment operations:
Net investment income (loss)		0.17			(0.01	)		0.24		0.06		⁽³⁾		(0.02	)		(0.02	)		0.00
Net realized and unrealized gain (loss) on investments		0.28			2.46			6.58			(0.52	)		(3.54	)		0.85			16.46

Total from investment operations		0.45			2.45			6.82			(0.46	)		(3.56	)		0.83			16.46

Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.13	)		(0.00	)		(0.00	)		(0.00	)		(0.02	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.03	)		(0.67	)		(9.22	)

Total distributions		(0.00	)		(0.00	)		(0.13	)		(0.00	)		(0.03	)		(0.67	)		(9.24	)

Net asset value, end of period	$	22.93		$	22.48		$	20.03		$	13.34		$	13.80		$	17.39		$	17.23

Total return		2.00	%		12.23	%		51.12	%		- -3.33	%	- -20.44		%		5.01	%	217.16		%
Net assets, end of period (in millions)		$4			$4			$4			$6			$9			$19			$5
Ratio of expenses to average net assets including reimbursement		1.42	%^⁽⁴⁾		1.41	%^⁽⁴⁾		1.96	%		1.81	%		1.72	%		1.55	%		1.93	%^⁽⁴⁾
Ratio of net investment income (loss) to average net assets including reimbursement		1.16	%^⁽⁴⁾		- -0.41	%^⁽⁴⁾		1.02	%		0.40	%		0.00	%		- -0.09	%		0.14	%^⁽⁴⁾
Ratio of expenses to average net assets excluding reimbursement		NA			NA			NA			1.81	%		1.74	%		NA			5.81	%^⁽⁴⁾
Ratio of net investment income (loss) to average net assets excluding reimbursement		NA			NA			NA			0.40	%		- -0.02	%		NA			- -3.74	%^⁽⁴⁾
Portfolio turnover rate		38	%		31	%		123	%		69	%		66	%		46	%		108	%

(1)See Note 5 to financial statements.

(2)Commencement of operations of the class.

(3)Based on average shares outstanding.

(4)Annualized.

See Notes to Financial Statements

Financial Highlights
     IVY EUROPEAN OPPORTUNITIES FUND
      Class I Shares⁽¹⁾
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the fiscal period ended				For the fiscal year ended December 31,									For the period from 3-16-00^⁽²⁾ to
	3-31-04				2003			2002			2001			12-31-00

Net asset value, beginning of period		$	20.04		$	13.32		$	13.78		$	17.37		$	26.00

Income (loss) from investment operations:
Net investment income (loss)			0.04			0.12			0.07	^⁽³⁾		(0.01	)		(0.01	)
Net realized and unrealized gain (loss) on investments			2.40			6.71			(0.53	)		(3.55	)		(7.92	)

Total from investment operations			2.44			6.83			(0.46	)		(3.56	)		(7.93	)

Less distributions from:
Net investment income			(0.00	)		(0.11	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.03	)		(0.70	)

Total distributions			(0.00	)		(0.11	)		(0.00	)		(0.03	)		(0.70	)

Net asset value, end of period		$	22.48		$	20.04		$	13.32		$	13.78		$	17.37

Total return			12.18	%		51.28	%		- -3.34	%	- -20.46		%	- -30.40		%
Net assets, end of period (in thousands)			$19			$32			$30			$13			$17
Ratio of expenses to average net assets including reimbursement			1.43	%^⁽⁴⁾		2.05	%		1.65	%		1.80	%		1.54	%^⁽⁴⁾
Ratio of net investment income (loss) to average net assets including reimbursement			- -0.40	%^⁽⁴⁾		0.60	%		0.56	%		- -0.08	%		- -0.07	%^⁽⁴⁾
Ratio of expenses to average net assets excluding reimbursement			NA			NA			1.65	%		1.82	%		NA
Ratio of net investment income (loss) to average net assets excluding reimbursement			NA			NA			0.56	%		- -0.10	%		NA
Portfolio turnover rate			31	%		123	%		69	%		66	%		46	%^⁽⁵⁾

(1)See Note 5 to financial statements.

(2)Commencement of operations of the class.

(3)Based on average shares outstanding.

(4)Annualized.

(5)For the 12 months ended December 31, 2000.

See Notes to Financial Statements

SHAREHOLDER SUMMARY OF IVY GLOBAL NATURAL RESOURCES FUND

Portfolio Highlights

On September 30, 2004, Ivy Global Natural Resources Fund had net assets totaling $594,593,704 invested in a diversified portfolio of:

94.69%		Common Stocks and Warrants
5.28%		Cash and Cash Equivalents and Unrealized Loss on Open Forward Currency Contracts
0.03%		Preferred Stock

As a shareholder of the Fund, for every $100 you had invested on September 30, 2004,
your Fund was invested by geographic region and by industry, respectively, as follows:

Canada	$	38.85
United States	$	19.97
South America	$	11.29
Africa	$	7.29
Europe	$	6.31
Cash and Cash Equivalents and Unrealized Loss on Open Forward Currency Contracts	$	5.28
Other	$	5.09
Pacific Basin	$	4.62
Mexico	$	1.30

Energy Stocks	$	34.98
Raw Materials Stocks	$	33.48
Multi-Industry Stocks	$	10.26
Capital Goods Stocks	$	6.44
Shelter Stocks	$	6.24
Cash and Cash Equivalents and Unrealized Loss on Open Forward Currency Contracts	$	5.28
Miscellaneous Stocks	$	3.29
Preferred Stock	$	0.03

The Investments of Ivy Global Natural Resources Fund
September 30, 2004
COMMON STOCKS AND WARRANTS	Shares		Value


Australia - 0.18%
Central Asia Gold Limited (A)*	2,760,964	$	1,080,023


Belgium - 0.55%
n.v. Umicore s.a. (A)	45,000		3,283,273


Bermuda - 2.39%
Nabors Industries Ltd.*	300,000		14,205,000


Brazil - 8.49%
Aracruz Celulose S.A., ADR	275,000		9,108,000
Caemi Mineracao e Metalurgia S.A. (A)*	9,500,000		5,974,843
Companhia Vale do Rio Doce, ADR	600,000		13,482,000
Petroleo Brasileiro S.A. - Petrobras	58,000		2,044,500
Suzono Bahia Sul Papal E Celulose S.A.	3,000,000		12,421,383
Votorantim Celulose e Papel S.A., ADR	215,000		7,428,250

			50,458,976

Canada - 38.85%
APF Energy Trust (A)	121,315		1,126,860
Agricore United (A)*	162,000		993,354
Alcan Inc. (A)	400,000		19,147,084
CHC Helicopter Corporation, Class A (A)	245,000		9,498,378
Calfrac Well Services Ltd. (A)*	531,000		14,242,345
Cambior Inc. (A)*	150,000		456,919
Cameco Corporation (A)	65,000		5,160,812
Canfor Corporation (A)*	335,100		4,228,851
Clear Energy Inc. (A)*	548,250		1,821,861
Cyries Energy Inc. (A)*	62,220		334,754
Domtar Inc. (A)	325,000		3,908,537
Espoir Exploration Corp., Class A Special Warrants (A)(B)*	330,000		953,003
Falconbridge Limited (A)	295,000		7,842,393
Ferus Gas Industries Trust (A)(B)*	615,000		1,216,473
First Quantum Minerals Ltd. (A)*	694,600		9,177,799
Forte Resources Inc. (A)(B)*	450,000		1,103,727
Guinor Gold Corporation (A)*	4,141,875		3,506,453
Guinor Gold Corporation, Special Warrants (A)*	1,000,000		846,586
High Point Resources Inc. (A)*	640,300		957,486
High Point Resources Inc. (A)(B)*	290,000		433,658
IAMGOLD Corporation (A)	1,180,000		9,448,216
IAMGOLD Corporation (A)(B)	125,000		1,000,870
Inco Limited (A)*	125,000		4,885,671
Mustang Resources Inc., Class A (A)(B)*	179,700		1,015,179
Pason Systems Inc. (A)	112,000		2,753,256
Petro-Canada (A)	100,000		5,201,361
PetroKazakhstan Inc., Class A (A)	300,000		10,185,141
Placer Dome Inc. (A)	650,000		12,959,886
Precision Drilling Corporation (A)*	450,000		25,859,245
Progress Energy Ltd. (A)*	311,100		3,679,836
Rider Resources Ltd. (A)*	320,000		1,240,604
Rio Narcea Gold Mines, Ltd. (A)*	452,208		1,119,876
Savanna Energy Services Corp. (A)*	882,400		9,006,219
Sino-Forest Corporation, Class A (A)*	2,250,000		5,999,288
Technicoil Corporation (A)(B)*	3,800,000		4,750,000
Trican Well Service Ltd. (A)*	504,000		19,140,755
West Fraser Timber Co. Ltd. (A)*	125,000		5,305,997
Western Oil Sands Inc., Class A (A)*	475,000		14,183,480
zed.i solutions inc. (A)*	2,886,300		4,544,455
zed.i solutions inc. (A)(B)*	1,300,000		1,760,282

			230,996,950

Cayman Islands - 2.70%
Noble Corporation*	357,000		16,047,150


China - 4.44%
Aluminum Corporation of China Limited, ADR	125,000		8,295,000
China Petroleum & Chemical Corporation, ADR	275,000		11,288,750
Sinopec Zhenhai Refining & Chemical Company Limited, H Shares (A)	6,500,000		6,834,998

			26,418,748

France - 0.40%
L'Air Liquide S.A. (A)	15,000		2,352,780


Germany - 1.16%
BASF Aktiengesellschaft (A)	80,000		4,699,350
Bayer Aktiengesellschaft (A)	80,000		2,185,744

			6,885,094

Italy - 0.66%
Saipem S.p.A. (A)	350,000		3,933,718


Mexico - 1.30%
Cemex, S.A. de C.V., ADR	275,700		7,758,198


Peru - 2.80%
Compania de Minas Buenaventura S.A.A., ADR	700,000		16,625,000


Russia - 0.81%
Open Joint Stock Company "Mining and Metallurgical Company Norilsk Nickel", ADR	75,500		4,794,250


South Africa - 7.26%
Anglo American Platinum Corporation Limited (A)	60,000		2,520,269
Gold Fields Limited, ADR	375,000		5,118,750
Impala Platinum Holdings Limited (A)	225,000		18,033,357
Mvelaphanda Resources Limited (A)*	4,799,210		13,933,310
Sappi Limited, ADR	250,000		3,580,000

			43,185,686

United Kingdom - 2.73%
Boc Group plc (A)	170,000		2,719,617
Highland Gold Mining Limited (A)	475,000		2,149,019
Randgold Resources Limited, ADR*	1,147,400		11,353,523

			16,222,159

United States - 19.97%
Alcoa Incorporated	307,000		10,312,130
Arch Coal, Inc.	310,000		11,001,900
BJ Services Company*	181,000		9,486,210
Cal Dive International, Inc.*	50,000		1,783,500
ConocoPhillips	30,000		2,485,500
Cooper Cameron Corporation*	200,000		10,968,000
Delta Petroleum Corporation*	91,300		1,188,726
Delta Petroleum Corporation (B)*	100,000		1,302,000
du Pont (E.I.) de Nemours and Company	39,000		1,669,200
KFx Inc.*	275,000		2,120,250
Patterson-UTI Energy, Inc.	725,000		13,811,250
Peabody Energy Corporation	275,000		16,362,500
Pioneer Drilling Company*	452,000		3,796,800
Plains Exploration and Production Company*	250,000		5,965,000
Praxair, Inc.	55,000		2,350,700
Smith International, Inc.*	170,000		10,324,100
Tidewater Inc.	80,000		2,604,000
Valero Energy Corporation	140,000		11,229,400

			118,761,166


TOTAL COMMON STOCKS AND WARRANTS - 94.69%		$	563,008,171

(Cost: $465,007,190)


PREFERRED STOCK - 0.03%

South Africa
Anglo American Platinum Corporation Limited, 6.38% Convertible (A)	11,054	$	219,014

(Cost: $166,006)


UNREALIZED LOSS ON OPEN FORWARD CURRENCY CONTRACTS - (1.35%)	Face Amount in Thousands

Canadian Dollar, 10-6-04 (C)	CAD77,000			(3,006,450	)
Canadian Dollar, 10-20-04 (C)		42,000		(1,460,988	)
Canadian Dollar, 11-10-04 (C)		42,000		(1,456,590	)
Canadian Dollar, 11-24-04 (C)		31,000		(368,365	)
Canadian Dollar, 12-8-04 (C)		46,000		(1,068,019	)
Canadian Dollar, 12-22-04 (C)		46,000		(1,090,707	)
South African Rand, 10-6-04 (C)	ZAR59,400			171,597
South African Rand, 11-10-04 (C)		88,500		367,010
South African Rand, 12-15-04 (C)		64,400		(115,375	)

			$	(8,027,887	)


TOTAL SHORT-TERM SECURITIES - 5.85%			$	34,762,658

(Cost: $34,762,658)

TOTAL INVESTMENT SECURITIES - 99.22%			$	589,961,956

(Cost: $499,935,854)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.78%				4,631,748


NET ASSETS - 100.00%			$	594,593,704

Notes to Schedule of Investments
	*No dividends were paid during the preceding 12 months.
(A)	Listed on an exchange outside the United States.
(B)	Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2004, the total value of these securities amounted to $13,535,192 or 2.28% of net assets.
(C)	Principal amounts are denominated in the indicated foreign currency, where applicable (CAD - Canadian Dollar, ZAR - South African Rand).
	See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
	See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY GLOBAL NATURAL RESOURCES FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (cost-$499,936) (Notes 1 and 3)	$	589,962
Receivables:
Investment securities sold		13,668
Fund shares sold		11,408
Dividends and interest		393
Prepaid and other assets		74

Total assets		615,505

LIABILITIES
Payable for investment securities purchased		16,705
Due to custodian		2,964
Accrued management fee (Note 2)		436
Payable to Fund shareholders		368
Accrued shareholder servicing (Note 2)		119
Accrued service fee (Note 2)		109
Accrued distribution fee (Note 2)		102
Accrued accounting and administrative services fees (Note 2)		12
Other		96

Total liabilities		20,911

Total net assets	$	594,594

NET ASSETS
Capital paid in	$	502,391
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(2,225	)
Accumulated undistributed net realized gain on investment transactions		4,359
Net unrealized appreciation in value of investments		90,069

Net assets applicable to outstanding units of capital	$	594,594

Net asset value per share (net assets divided by shares outstanding):
Class A		$19.82
Class B		$19.06
Class C		$18.72
Class Y		$19.89
Advisor Class		$19.64
Capital shares outstanding:
Class A		20,208
Class B		2,902
Class C		6,934
Class Y		426
Advisor Class		28

See Notes to Financial Statements

Statement of Operations
      IVY GLOBAL NATURAL RESOURCES FUND
      For the Six Months Ended September 30, 2004
      (In Thousands)

INVESTMENT LOSS
Income (Note 1B):
Dividends (net of foreign withholding taxes of $144)	$	2,391
Interest and amortization		129

Total income		2,520

Expenses (Note 2):
Investment management fee		1,997
Shareholder servicing:
Class A		319
Class B		64
Class C		111
Class Y		5
Advisor Class		1
Service fee:
Class A		312
Class B		49
Class C		110
Class Y		6
Distribution fee:
Class A		22
Class B		148
Class C		330
Legal fees		85
Accounting and administrative services fees		62
Custodian fees		51
Audit fees		19
Other		196

Total		3,887
Less expenses in excess of voluntary limit (Note 2)		(45	)

Total expenses		3,842

Net investment loss		(1,322	)

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		9,149
Realized net loss on foreign currency transactions		(110	)

Realized net gain on investments		9,039

Unrealized appreciation in value of securities during the period		60,463
Unrealized depreciation in value of forward currency contracts during the period		(6,686	)

Unrealized appreciation in value of investments during the period		53,777

Net gain on investments		62,816

Net increase in net assets resulting from operations	$	61,494

See Notes to Financial Statements

Statement of Changes in Net Assets
IVY GLOBAL NATURAL RESOURCES FUND
(In Thousands)

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the fiscal year ended 12-31-03

INCREASE IN NET ASSETS
Operations:
Net investment loss	$	(1,322	)	$	(567	)	$	(548	)
Realized net gain on investments		9,039			4,448			542
Unrealized appreciation		53,777			7,776			27,890

Net increase in net assets resulting from operations		61,494			11,657			27,884

Distributions to shareholders from (Note 1F):^⁽¹⁾
Net investment income:
Class A		- -			- -			(267	)
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -			(3	)
Advisor Class		- -			- -			(4	)
Realized gains on investment transactions:
Class A		- -			- -			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -			- -
Advisor Class		- -			- -			- -

		- -			- -			(274	)

Capital share transactions (Note 5)		242,957			126,275			93,172

Total increase		304,451			137,932			120,782
NET ASSETS
Beginning of period		290,143			152,211			31,429

End of period	$	594,594		$	290,143		$	152,211

Undistributed net investment loss	$	(2,225	)	$	(793	)	$	(1,119	)

(1)See "Financial Highlights" on pages 108 - 112.

See Notes to Financial Statements

Financial Highlights
     IVY GLOBAL NATURAL RESOURCES FUND
      Class A Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	17.63		$	16.69		$	11.50		$	11.05		$	9.74		$	8.91		$	6.32

Income (loss) from investment operations:
Net investment income (loss)			(0.02	)		0.03			0.10			(0.11	)^⁽¹⁾		0.04	^⁽¹⁾	(0.07		)		0.00	^⁽¹⁾
Net realized and unrealized gain on investments			2.21			0.91			5.14			0.63			1.45			0.95			2.59

Total from investment operations			2.19			0.94			5.24			0.52			1.49			0.88			2.59

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.05	)		(0.00	)		(0.18	)	(0.05		)	(0.00		)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.07	)		(0.00	)	(0.00		)	(0.00		)

Total distributions			(0.00	)		(0.00	)		(0.05	)		(0.07	)		(0.18	)	(0.05		)	(0.00		)

Net asset value, end of period		$	19.82		$	17.63		$	16.69		$	11.50		$	11.05		$	9.74		$	8.91

Total return^⁽²⁾			12.42	%		5.63	%		45.61	%		4.66	%		15.40	%		9.86	%	40.98		%
Net assets, end of period (in millions)			$401			$192			$95			$17			$8			$6			$6
Ratio of expenses to average net assets including reimbursement			1.69	%^⁽³⁾		1.65	%^⁽³⁾		1.89	%		2.22	%		2.25	%		2.29	%		2.16	%
Ratio of net investment income (loss) to average net assets including reimbursement			- -0.43	%^⁽³⁾		- -0.80	%^⁽³⁾		- -0.66	%		- -0.91	%		0.38	%	- -0.69		%		0.02	%
Ratio of expenses to average net assets excluding reimbursement			NA			NA			NA			2.38	%		3.71	%		4.54	%		4.53	%
Ratio of net investment loss to average net assets excluding reimbursement			NA			NA			NA			- -1.07	%		- -1.08	%	- -2.94		%	- -2.35		%
Portfolio turnover rate			37	%		29	%		58	%		67	%		169	%		134	%		157	%

(1)Based on average shares outstanding.

(2)Total return calculated without taking into account the sales load deducted on an initial purchase.

(3)Annualized.

See Notes to Financial Statements

Financial Highlights
     IVY GLOBAL NATURAL RESOURCES FUND
      Class B Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	17.04		$	16.16		$	11.19		$	10.81		$	9.56		$	8.77		$	6.27

Income (loss) from investment operations:
Net investment loss			(0.01	)		(0.01	)		(0.06	)		(0.19	)^⁽¹⁾		(0.02	)^⁽¹⁾	(0.09		)	(0.04		)^⁽¹⁾
Net realized and unrealized gain on investments			2.03			0.89			5.03			0.57			1.42			0.90			2.54

Total from investment operations			2.02			0.88			4.97			0.38			1.40			0.81			2.50

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.15	)	(0.02		)	(0.00		)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.15	)	(0.02		)	(0.00		)

Net asset value, end of period		$	19.06		$	17.04		$	16.16		$	11.19		$	10.81		$	9.56		$	8.77

Total return			11.85	%		5.45	%		44.42	%		3.52	%		14.73	%		9.27	%	39.87		%
Net assets, end of period (in millions)			$55			$30			$21			$9			$5			$3			$3
Ratio of expenses to average net assets including reimbursement			2.54	%^⁽²⁾		2.42	%^⁽²⁾		2.90	%		2.93	%		2.87	%		2.80	%		2.71	%
Ratio of net investment loss to average net assets including reimbursement			- -1.28	%^⁽²⁾		- -1.59	%^⁽²⁾		- -1.54	%		- -1.62	%		- -0.24	%	- -1.20		%	- -0.53		%
Ratio of expenses to average net assets excluding reimbursement			NA			NA			NA			3.09	%		4.33	%		5.05	%		5.08	%
Ratio of net investment loss to average net assets excluding reimbursement			NA			NA			NA			- -1.78	%		- -1.70	%	- -3.45		%	- -2.90		%
Portfolio turnover rate			37	%		29	%		58	%		67	%		169	%		134	%		157	%

(1)Based on average shares outstanding.

(2)Annualized.

See Notes to Financial Statements

Financial Highlights
     IVY GLOBAL NATURAL RESOURCES FUND
      Class C Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	16.72		$	15.86		$	10.97		$	10.61		$	9.40		$	8.63		$	6.21

Income (loss) from investment operations:
Net investment income (loss)			(0.05	)		0.00			0.04			(0.18	)^⁽¹⁾		(0.02	)^⁽¹⁾	(0.07		)	(0.04		)^⁽¹⁾
Net realized and unrealized gain on investments			2.05			0.86			4.85			0.55			1.39			0.89			2.46

Total from investment operations			2.00			0.86			4.89			0.37			1.37			0.82			2.42

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.16	)	(0.05		)	(0.00		)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.01	)		(0.00	)	(0.00		)	(0.00		)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.01	)		(0.16	)	(0.05		)	(0.00		)

Net asset value, end of period		$	18.72		$	16.72		$	15.86		$	10.97		$	10.61		$	9.40		$	8.63

Total return			11.96	%		5.42	%		44.58	%		3.46	%		14.62	%		9.49	%	38.97		%
Net assets, end of period (in thousands)	$129,850			$63,783			$33,738				$5,189			$1,788			$715			$472
Ratio of expenses to average net assets including reimbursement			2.40	%^⁽²⁾		2.38	%^⁽²⁾		2.65	%		2.94	%		2.86	%		2.70	%		2.73	%
Ratio of net investment loss to average net assets including reimbursement			- -1.19	%^⁽²⁾		- -1.54	%^⁽²⁾		- -1.48	%	- -1.64		%	- -0.23		%	- -1.10		%	- -0.55		%
Ratio of expenses to average net assets excluding reimbursement			2.48	%^⁽²⁾		NA			NA			3.10	%		4.32	%		4.95	%		5.10	%
Ratio of net investment loss to average net assets excluding reimbursement			- -1.26	%^⁽²⁾		NA			NA		- -1.80		%		- -1.69	%	- -3.35		%	- -2.92		%
Portfolio turnover rate			37	%		29	%		58	%		67	%		169	%		134	%		157	%

(1)Based on average shares outstanding.

(2)Annualized.

See Notes to Financial Statements

Financial Highlights
     IVY GLOBAL NATURAL RESOURCES FUND
      Class Y Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

				For the fiscal period ended 3-31-04			For the period from 7-24-03^⁽¹⁾ to 12-31-03

Net asset value, beginning of period	$	17.66		$	16.70		$	12.60

Income (loss) from investment operations:
Net investment income (loss)		(0.01	)		0.01			0.00
Net realized and unrealized gain on investments		2.24			0.95			4.16

Total from investment operations		2.23			0.96			4.16

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

Total distributions		(0.00	)		(0.00	)		(0.06	)

Net asset value, end of period	$	19.89		$	17.66		$	16.70

Total return		12.63	%		5.75	%		33.03	%
Net assets, end of period (in millions)		$8			$4			$1
Ratio of expenses to average net assets including reimbursement		1.20	%^⁽²⁾		1.20	%^⁽²⁾		1.39	%^⁽²⁾
Ratio of net investment income (loss) to average net assets including reimbursement		0.03	%^⁽²⁾		- -0.35	%^⁽²⁾		- -0.54	%^⁽²⁾
Ratio of expenses to average net assets excluding reimbursement		1.61	%^⁽²⁾		1.63	%^⁽²⁾		NA
Ratio of net investment loss to average net assets excluding reimbursement		- -0.38	%^⁽²⁾		- -0.79	%^⁽²⁾		NA
Portfolio turnover rate		37	%		29	%		58	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the 12 months ended December 31, 2003.

See Notes to Financial Statements

Financial Highlights
     IVY GLOBAL NATURAL RESOURCES FUND
      Advisor Class Shares⁽¹⁾
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,												For the period from 4-8-99^⁽²⁾ to
	9-30-04				3-31-04			2003			2002			2001			2000			12-31-99

Net asset value, beginning of period		$	17.47		$	16.54		$	11.43		$	11.02		$	9.74		$	8.90		$	7.00

Income (loss) from investment operations:
Net investment income (loss)			(0.04	)		(0.03	)		(0.58	)		(0.07	)		0.09	^⁽³⁾	(0.05		)		0.02	^⁽³⁾
Net realized and unrealized gain on investments			2.21			0.96			5.78			0.56			1.43			0.95			1.88

Total from investment operations			2.17			0.93			5.20			0.49			1.52			0.90			1.90

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.09	)		(0.00	)		(0.24	)	(0.06		)	(0.00		)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.08	)		(0.00	)	(0.00		)	(0.00		)

Total distributions			(0.00	)		(0.00	)		(0.09	)		(0.08	)		(0.24	)	(0.06		)	(0.00		)

Net asset value, end of period		$	19.64		$	17.47		$	16.54		$	11.43		$	11.02		$	9.74		$	8.90

Total return			12.42	%		5.62	%		45.55	%		4.46	%		15.71	%	10.17		%	27.14		%
Net assets, end of period (in thousands)			$543			$512			$484			$570			$465			$22			$26
Ratio of expenses to average net assets including reimbursement			1.61	%^⁽⁴⁾		1.57	%^⁽⁴⁾		2.19	%		1.82	%		1.78	%		2.02	%		1.87	%^⁽⁴⁾
Ratio of net investment income (loss) to average net assets including reimbursement			- -0.33	%^⁽⁴⁾		- -0.74	%^⁽⁴⁾		- -0.41	%		- -0.51	%		0.85	%	- -0.42		%		0.31	%^⁽⁴⁾
Ratio of expenses to average net assets excluding reimbursement			NA			NA			NA			1.98	%		3.24	%		4.27	%		4.24	%^⁽⁴⁾
Ratio of net investment loss to average net assets excluding reimbursement			NA			NA			NA		- -0.67		%	- -0.61		%	- -2.67		%	- -2.06		%^⁽⁴⁾
Portfolio turnover rate			37	%		29	%		58	%		67	%		169	%		134	%		157	%^⁽⁵⁾

(1)See Note 5 to financial statements.

(2)Commencement of operations of the class.

(3)Based on average shares outstanding.

(4)Annualized.

(5)For the 12 months ended December 31, 1999.

See Notes to Financial Statements

SHAREHOLDER SUMMARY OF IVY INTERNATIONAL FUND

Portfolio Highlights

On September 30, 2004, Ivy International Fund had net assets totaling $153,908,738 invested in a diversified portfolio of:

97.59%		Common Stocks
2.41%		Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2004, your
Fund was invested by geographic region and by industry, respectively, as follows:

Europe	$	68.45
Pacific Basin	$	21.24
Scandinavia	$	3.28
Canada	$	2.75
Cash and Cash Equivalents	$	2.41
United States	$	1.42
Mexico	$	0.45

Financial Services Stocks	$	20.65
Consumer Goods Stocks	$	13.41
Utilities Stocks	$	9.48
Energy Stocks	$	8.05
Health Care Stocks	$	7.66
Capital Goods Stocks	$	7.16
Retail Stocks	$	7.02
Technology Stocks	$	6.38
Business Equipment and Services Stocks	$	5.02
Consumer Services Stocks	$	4.52
Multi-Industry Stocks	$	4.44
Raw Materials Stocks	$	2.46
Cash and Cash Equivalents	$	2.41
Transportation Stocks	$	1.34

The Investments of Ivy International Fund
September 30, 2004
COMMON STOCKS	Shares		Value


Australia - 2.43%
Australia and New Zealand Banking Group Limited (A)	74,700	$	1,029,223
News Corporation Limited (The) (A)	200,000		1,653,081
Westpac Banking Corporation (A)	82,000		1,053,176

			3,735,480

Austria - 2.18%
Erste Bank der oesterreichischen Sparkassen AG (A)*	80,600		3,353,254


Canada - 2.75%
EnCana Corporation (A)	55,100		2,543,781
Shoppers Drug Mart Corporation (A)(B)*	62,350		1,687,135

			4,230,916

China - 1.04%
Ping An Insurance (Group) Company of China, Ltd. (A)(B)*	1,089,000		1,598,986


Denmark - 0.55%
A.P. Moller-Maersk A/S (A)	110		842,680


France - 12.64%
AXA (A)	45,000		910,375
Credit Agricole S.A. (A)	65,300		1,780,870
France Telecom (A)*	35,700		889,377
JCDecaux S.A. (A)*	70,000		1,590,874
Lafarge (A)	14,000		1,224,886
PagesJaunes (A)(B)*	110,000		2,113,341
Pernod Ricard (A)	12,550		1,666,127
Schneider Electric SA (A)	29,000		1,874,586
TF1 (A)	28,130		797,907
THOMSON (A)	50,000		1,046,922
Total S.A. (A)	19,324		3,935,750
VINCI (A)	14,050		1,616,621

			19,447,636

Germany - 13.53%
Allianz Aktiengesellschaft, Registered Shares (A)	32,000		3,215,031
BASF Aktiengesellschaft (A)	43,350		2,546,460
Deutsche Telekom AG, Registered Shares (A)*	76,000		1,406,327
E.ON AG (A)	11,100		816,767
Fresenius AG (A)	5,430		440,419
Henkel Kommanditgesellschaft auf Aktien (A)	5,450		400,687
ProSieben- Sat.1 Meida Aktiengesellschaft (A)	95,000		1,734,313
PUMA Aktiengesellschaft Rudolf Dassler Sport (A)	20,000		5,340,170
RWE Aktiengesellschaft (A)	26,000		1,239,913
SAP Aktiengesellschaft (A)	10,900		1,698,857
Siemens AG (A)	26,982		1,977,028

			20,815,972

Ireland - 4.36%
Anglo Irish Bank Corporation plc (Great Britain) (A)	186,719		3,450,468
Anglo Irish Bank Corporation plc (Ireland) (A)	32,500		595,336
CRH public limited company (A)	60,700		1,439,822
DEPFA BANK plc (A)(B)	90,000		1,223,892

			6,709,518

Italy - 4.77%
Assicurazioni Generali SpA (A)	36,700		1,008,635
Banco Popolare di Verona e Novara S.c. a r.l. (A)	65,130		1,142,095
Eni S.p.A. (A)	120,000		2,688,465
Saipem S.p.A. (A)	75,000		842,940
Snam Rete Gas S.p.A. (A)	345,000		1,666,692

			7,348,827

Japan - 16.02%
ACOM CO., LTD. (A)	20,000		1,237,806
Asahi Glass Company, Limited (A)	108,000		983,021
Canon Inc. (A)	51,970		2,442,984
Honda Motor Co., Ltd. (A)	21,900		1,061,264
Hoya Corporation (A)	19,000		1,991,470
iShares MSCI Japan Index Fund	400,000		3,880,000
Kao Corporation (A)	108,000		2,386,497
Kabushiki Kaisha Mitsubishi Tokyo Financial Group (A)	190		1,584,555
Nikko Cordial Corporation (A)	342,000		1,387,304
Nippon Telegraph and Telephone Corporation (A)	360		1,434,185
Nomura Holdings, Inc. (A)	113,300		1,454,871
Takeda Chemical Industries, Ltd. (A)	33,000		1,497,345
Tokyo Gas Co., Ltd. (A)	350,000		1,241,889
Toyota Motor Corporation (A)	54,200		2,075,629

			24,658,820

Mexico - 0.45%
Grupo Televisa, S.A., GDR	13,200		696,036


Netherlands - 1.58%
Euronext N.V. (A)	32,930		936,922
Koninklijke Philips Electronics N.V., Ordinary Shares (A)	65,000		1,488,541

			2,425,463

South Korea - 1.26%
Samsung Electronics Co., Ltd. (A)	4,890		1,944,959


Sweden - 2.73%
Telefonaktiebolaget LM Ericsson, Class B (A)*	1,355,350		4,204,193


Switzerland - 10.89%
Baloise-Holding, Registered Shares (A)	19,500		754,632
Clariant Ltd., Registered Shares (A)	70,000		839,349
Credit Suisse Group, Registered Shares (A)*	50,400		1,610,876
Holcim Ltd, Registered Shares (A)	20,100		1,061,586
Nestle S.A., Registered Shares (A)	10,280		2,358,101
Novartis AG, Registered Shares (A)	91,600		4,275,842
Roche Holdings AG, Genussschein (A)	23,900		2,472,810
Serono S.A., Class B (A)	1,000		618,383
UBS AG (A)	39,260		2,767,849

			16,759,428

Taiwan - 0.49%
AU Optronics Corp., ADR	60,600		758,712


United Kingdom - 18.50%
BAA plc (A)	121,000		1,212,019
BP p.l.c. (A)	337,700		3,223,741
British Sky Broadcasting Group plc (A)	141,982		1,231,408
Compass Group PLC (A)	582,240		2,323,364
Diageo plc (A)	57,000		711,755
GlaxoSmithKline plc (A)	114,660		2,471,327
ITV plc (A)	436,000		850,179
NEXT plc (A)	89,970		2,658,830
Reckitt Benckiser plc (A)	102,065		2,500,933
Royal Bank of Scotland Group plc (The) (A)	84,900		2,452,151
tesco plc (A)	800,000		4,129,735
Vodafone Group Plc (A)	1,307,000		3,128,080
WPP Group plc (A)	170,000		1,582,854

			28,476,376

United States - 1.42%
iShares MSCI Pacific ex-Japan Index Fund	15,000		1,200,150
Research In Motion Limited*	13,000		992,355

			2,192,505


TOTAL COMMON STOCKS - 97.59%		$	150,199,761

(Cost: $127,850,648)


TOTAL SHORT-TERM SECURITIES - 2.79%	$	4,289,701

(Cost: $4,289,701)

TOTAL INVESTMENT SECURITIES - 100.38%	$	154,489,462

(Cost: $132,140,349)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.38%)		(580,724	)


NET ASSETS - 100.00%	$	153,908,738

Notes to Schedule of Investments
	*No dividends were paid during the preceding 12 months.
(A)	Listed on an exchange outside the United States.
(B)	Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2004, the total value of these securities amounted to $6,623,354 or 4.30% of net assets.
	See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
	See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY INTERNATIONAL FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (cost-$132,140) (Notes 1 and 3)		$	154,489
Receivables:
Dividends and interest			611
Fund shares sold			49
Prepaid and other assets			24

Total assets			155,173

LIABILITIES
Payable to Fund shareholders			783
Due to custodian			151
Accrued management fee (Note 2)			127
Accrued shareholder servicing (Note 2)			74
Accrued distribution fee (Note 2)			26
Accrued service fee (Note 2)			26
Accrued accounting and administrative services fees (Note 2)			6
Other			71

Total liabilities			1,264

Total net assets		$	153,909

NET ASSETS
Capital paid in		$	446,918
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss			(159	)
Accumulated undistributed net realized loss on investment transactions		(315,236		)
Net unrealized appreciation in value of investments			22,386

Net assets applicable to outstanding units of capital		$	153,909

Net asset value per share (net assets divided by shares outstanding):
Class A			$20.43
Class B			$19.14
Class C			$19.04
Class Y			$20.43
Advisor Class			$20.61
Class I			$20.66
Capital shares outstanding:
Class A	5,501,671
Class B	1,663,420
Class C			481,149
Class Y			7,476
Advisor Class			24
Class I			18,416

See Notes to Financial Statements.

Statement of Operations
      IVY INTERNATIONAL FUND
      For the Six Months Ended September 30, 2004
      (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $209)	$	1,673
Interest and amortization		27

Total income		1,700

Expenses (Note 2):
Investment management fee		833
Shareholder servicing:
Class A		142
Class B		113
Class C		26
Class Y		- -	*
Advisor Class		- -	*
Class I		1
Distribution fee:
Class A		- -	*
Class B		145
Class C		37
Service fee:
Class A		110
Class B		48
Class C		12
Class Y		- -	*
Accounting and administrative services fees		36
Custodian fees		28
Legal fees		22
Audit fees		20
Other		84

Total expenses		1,657

Net investment income		43

REALIZED AND UNREALIZED LOSS ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on securities		(4,198	)
Realized net loss on foreign currency transactions		(150	)

Realized net loss on investments		(4,348	)
Unrealized depreciation in value of investments during the period		(3,596	)

Net loss on investments		(7,944	)

Net decrease in net assets resulting from operations	$	(7,901	)

*Not shown due to rounding.

See Notes to Financial Statements.

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

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the fiscal year ended 12-31-03

DECREASE IN NET ASSETS
Operations:
Net investment income (loss)	$	43		$	(292	)	$	(812	)
Realized net gain (loss) on investments		(4,348	)		4,763			(33,074	)
Unrealized appreciation (depreciation)		(3,596	)		1,782			77,768

Net increase (decrease) in net assets resulting from operations		(7,901	)		6,253			43,882

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

		- -			- -			- -

Capital share transactions (Note 5)		(23,893	)		(11,627	)		(62,837	)

Total decrease		(31,794	)		(5,374	)		(18,955	)
NET ASSETS
Beginning of period		185,703			191,077			210,032

End of period	$	153,909		$	185,703		$	191,077

Undistributed net investment loss	$	(159	)	$	(52	)	$	(52	)

(1)See "Financial Highlights" on pages 121-126.

See Notes to Financial Statements.

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

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	21.34		$	20.64		$	16.35		$	20.69		$	26.20		$	47.09		$	41.20

Income (loss) from investment operations:
Net investment income (loss)			0.05			(0.01	)		(0.02	)		0.06	^⁽¹⁾		0.05			0.19			0.30
Net realized and unrealized gain (loss) on investments			(0.96	)		0.71			4.31			(4.40	)		(5.56	)	(12.44		)		8.31

Total from investment operations			(0.91	)		0.70			4.29			(4.34	)		(5.51	)	(12.25		)		8.61

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.04	)		(0.24	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.60	)		(2.48	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.64	)		(2.72	)

Net asset value, end of period		$	20.43		$	21.34		$	20.64		$	16.35		$	20.69		$	26.20		$	47.09

Total return^⁽²⁾			-4.27	%		3.39	%		26.24	%	- -20.96		%	- -21.03		%	- -17.26		%		21.05	%
Net assets, end of period (in millions)			$112			$125			$124			$127			$345			$588		$1,574
Ratio of expenses to average net assets including reimbursement			1.65	%^⁽³⁾		1.69	%^⁽³⁾		1.81	%		1.89	%		1.60	%		1.66	%		1.66	%
Ratio of net investment income (loss) to average net assets including reimbursement			0.37	%^⁽³⁾		- -0.26	%^⁽³⁾		- -0.07	%		0.32	%		0.18	%		0.37	%		0.63	%
Ratio of expenses to average net assets excluding reimbursement			NA			NA			NA			1.89	%		1.66	%		NA			NA
Ratio of net investment income to average net assets excluding reimbursement			NA			NA			NA			0.32	%		0.12	%		NA			NA
Portfolio turnover rate			27	%		27	%		136	%		34	%		43	%		91	%		7	%

(1)Based on average shares outstanding.

(2)Total return calculated without taking into account the sales load deducted on an initial purchase.

(3)Annualized.

See Notes to Financial Statements.

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

	For the six months ended				For the fiscal period ended				For the fiscal year ended December 31,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	20.12		$	19.52		$	15.62		$	20.03		$	25.64		$	46.78		$	40.97

Income (loss) from investment operations:
Net investment loss			(0.19	)		(0.07	)		(0.23	)		(0.12	)^⁽¹⁾		(0.21	)		(0.17	)		(0.06	)
Net realized and unrealized gain (loss) on investments			(0.79	)		0.67			4.13			(4.29	)		(5.40	)	(12.33		)		8.27

Total from investment operations			(0.98	)		0.60			3.90			(4.41	)		(5.61	)	(12.50		)		8.21

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.04	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.60	)		(2.40	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.64	)		(2.40	)

Net asset value, end of period		$	19.14		$	20.12		$	19.52		$	15.62		$	20.03		$	25.64		$	46.78

Total return			-4.87	%		3.08	%		24.97	%	- -22.00		%	- -21.88		%	- -17.95		%		20.15	%
Net assets, end of period (in millions)			$32			$49			$55			$68			$137			$281			$541
Ratio of expenses to average net assets including reimbursement			2.82	%^⁽²⁾		2.75	%^⁽²⁾		2.84	%		2.85	%		2.54	%		2.50	%		2.42	%
Ratio of net investment loss to average net assets including reimbursement			- -0.71	%^⁽²⁾		- -1.35	%^⁽²⁾		- -1.06	%		- -0.64	%		- -0.76	%		- -0.47	%		- -0.13	%
Ratio of expenses to average net assets excluding reimbursement			NA			NA			NA			2.85	%		2.60	%		NA			NA
Ratio of net investment loss to average net assets excluding reimbursement			NA			NA			NA			- -0.64	%		- -0.82	%		NA			NA
Portfolio turnover rate			27	%		27	%		136	%		34	%		43	%		91	%		7	%

(1)Based on average shares outstanding.

(2)Annualized.

See Notes to Financial Statements.

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

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	20.00		$	19.39		$	15.52		$	19.90		$	25.46		$	46.57		$	40.79

Income (loss) from investment operations:
Net investment loss			(0.10	)		(0.07	)		(0.20	)		(0.11	)^⁽¹⁾		(0.21	)		(0.19	)		(0.05	)
Net realized and unrealized gain (loss) on investments			(0.86	)		0.68			4.07			(4.27	)		(5.35	)	(12.28		)		8.23

Total from investment operations			(0.96	)		0.61			3.87			(4.38	)		(5.56	)	(12.47		)		8.18

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.04	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.60	)		(2.40	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.64	)		(2.40	)

Net asset value, end of period		$	19.04		$	20.00		$	19.39		$	15.52		$	19.90		$	25.46		$	46.57

Total return			-4.80	%		3.15	%		24.94	%	- -22.00		%	- -21.84		%	- -17.97		%		20.16	%
Net assets, end of period (in millions)			$9			$11			$12			$14			$26			$57			$143
Ratio of expenses to average net assets including reimbursement			2.75	%^⁽²⁾		2.67	%^⁽²⁾		2.80	%		2.83	%		2.54	%		2.49	%		2.42	%
Ratio of net investment loss to average net assets including reimbursement			- -0.72	%^⁽²⁾		- -1.25	%^⁽²⁾		- -0.94	%		- -0.62	%		- -0.76	%		- -0.46	%		- -0.13	%
Ratio of expenses to average net assets excluding reimbursement			NA			NA			NA			2.83	%		2.60	%		NA			NA
Ratio of net investment loss to average net assets excluding reimbursement			NA			NA			NA			- -0.62	%		- -0.82	%		NA			NA
Portfolio turnover rate			27	%		27	%		136	%		34	%		43	%		91	%		7	%

(1)Based on average shares outstanding.

(2)Annualized.

See Notes to Financial Statements.

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

				For the fiscal period ended 3-31-04			For the period from 7-24-03^⁽¹⁾ to 12-31-03

Net asset value, beginning of period	$	21.35		$	20.65		$	17.69

Income (loss) from investment operations:
Net investment income (loss)		0.01			(0.02	)		0.02
Net realized and unrealized gain (loss) on investments		(0.93	)		0.72			2.94

Total from investment operations		(0.92	)		0.70			2.96

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

Total distributions		(0.00	)		(0.00	)		(0.00	)

Net asset value, end of period	$	20.43		$	21.35		$	20.65

Total return		-4.31	%		3.39	%		16.73	%
Net assets, end of period (in thousands)		$153			$140			$135
Ratio of expenses to average net assets		1.69	%^⁽²⁾		1.76	%^⁽²⁾		0.59	%^⁽²⁾
Ratio of net investment income (loss) to average net assets		0.23	%^⁽²⁾		- -0.32	%^⁽²⁾		0.24	%^⁽²⁾
Portfolio turnover rate		27	%		27	%		136	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the twelve months ended December 31, 2003.

See Notes to Financial Statements.

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

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,									For the period from 8-31-00^⁽²⁾to
	9-30-04				3-31-04			2003			2002^⁽³⁾			2001			12-31-00

Net asset value, beginning of period		$	21.66		$	21.00		$	16.85		$	20.67		$	26.25		$	40.05

Income (loss) from investment operations:
Net investment income (loss)			(0.08	)		(0.08	)		(1.00	)		(0.24	)		0.01			0.02
Net realized and unrealized gain (loss) on investments			(0.97	)		0.74			5.15			(3.58	)		(5.59	)		(5.18	)

Total from investment operations			(1.05	)		0.66			4.15			(3.82	)		(5.58	)		(5.16	)

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.04	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.60	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.64	)

Net asset value, end of period		$	20.61		$	21.66		$	21.00		$	16.85		$	20.67		$	26.25

Total return			-4.85	%		3.14	%		25.00	%	- -18.71		%	- -21.26		%	- -12.09		%
Net assets, end of period (in thousands)			$1			$1			$1			$2			$5			$4
Ratio of expenses to average net assets including reimbursement			2.68	%^⁽⁴⁾		2.35	%^⁽⁴⁾		2.72	%		3.46	%		1.69	%		2.10	%^⁽⁴⁾
Ratio of net investment income (loss) to average net assets including reimbursement			- -0.81	%^⁽⁴⁾		- -1.58	%^⁽⁴⁾		- -0.98	%		- -1.24	%		0.09	%		- -0.08	%^⁽⁴⁾
Ratio of expenses to average net assets excluding reimbursement			NA			NA			NA			3.46	%		1.75	%		NA
Ratio of net investment income (loss) to average net assets excluding reimbursement			NA			NA			NA			- -1.24	%		0.03	%		NA
Portfolio turnover rate			27	%		27	%		136	%		34	%		43	%		91	%^⁽⁵⁾

(1)See Note 5 to financial statements.

(2)Commencement of operations of the class.

(3)Advisor Class Shares were outstanding for the period from 1-1-02 through 6-11-02 and from
7-3-02 through 12-31-02.

(4)Annualized.

(5)For the 12 months ended December 31, 2000.

See Notes to Financial Statements.

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

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	21.58		$	20.86		$	16.48		$	20.85		$	26.35		$	47.09		$	41.21

Income (loss) from investment operations:
Net investment income (loss)			0.25			(0.00	)		(0.08	)		0.14	^⁽²⁾		0.15			0.64			0.52
Net realized and unrealized gain (loss) on investments			(1.17	)		0.72			4.46			(4.51	)		(5.65	)	(12.74		)		8.34

Total from investment operations			(0.92	)		0.72			4.38			(4.37	)		(5.50	)	(12.10		)		8.86

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.04	)		(0.42	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.60	)		(2.56	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.64	)		(2.98	)

Net asset value, end of period		$	20.66		$	21.58		$	20.86		$	16.48		$	20.85		$	26.35		$	47.09

Total return			-4.26	%		3.45	%		26.58	%	- -20.95		%	- -20.87		%	- -16.92		%		21.66	%
Net assets, end of period (in thousands)		$380			$669			$684			$1,304		$17,062			$33,907			$166,816
Ratio of expenses to average net assets including reimbursement			1.47	%^⁽³⁾		1.38	%^⁽³⁾		1.66	%		1.51	%		1.24	%		1.24	%		1.18	%
Ratio of net investment income to average net assets including reimbursement			0.74	%^⁽³⁾		0.04	%^⁽³⁾		0.06	%		0.70	%		0.54	%		0.79	%		1.11	%
Ratio of expenses to average net assets excluding reimbursement			NA			NA			NA			1.51	%		1.30	%		NA			NA
Ratio of net investment income to average net assets excluding reimbursement			NA			NA			NA			0.70	%		0.48	%		NA			NA
Portfolio turnover rate			27	%		27	%		136	%		34	%		43	%		91	%		7	%

(1)See Note 5 to financial statements.

(2)Based on average shares outstanding.

(3)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY INTERNATIONAL BALANCED FUND

Portfolio Highlights

On September 30, 2004, Ivy International Balanced Fund had net assets totaling $70,487,095 invested in a diversified portfolio of:

59.16%		Common Stocks
31.41%		Other Government Securities
9.43%		Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2004, your Fund was invested by geographic region and by industry, respectively, as follows:

Europe	$	46.22
Pacific Basin	$	23.38
Scandinavia	$	15.70
Cash and Cash Equivalents	$	9.43
Canada	$	3.03
Caribbean	$	0.80
Mexico	$	0.76
Middle East	$	0.68

Other Government Securities	$	31.41
Utilities Stocks	$	10.42
Cash and Cash Equivalents	$	9.43
Financial Services Stocks	$	9.23
Raw Materials Stocks	$	5.45
Technology Stocks	$	4.53
Miscellaneous Stocks	$	4.44
Energy Stocks	$	4.15
Consumer Durables Stocks	$	3.44
Multi-Industry Stocks	$	3.38
Consumer Services Stocks	$	3.32
Health Care Stocks	$	3.15
Capital Goods Stocks	$	3.02
Consumer Nondurables Stocks	$	2.32
Business Equipment and Services Stocks	$	2.31

The Investments of Ivy International Balanced Fund
September 30, 2004
COMMON STOCKS	Shares		Value


Australia - 3.23%
AMP Limited (A)	39,890	$	180,024
Iluka Resources Limited (A)	191,820		675,319
John Fairfax Holdings Limited (A)	178,850		480,664
National Australia Bank Limited (A)	21,100		412,385
Qantas Airways Limited (A)	157,000		392,371
Qantas Airways Limited (A)(B)	54,528		136,275

			2,277,038

Belgium - 0.48%
Belgacom SA de droit public/NV van publiek recht (A)(B)*	9,400		336,674


Bermuda - 0.80%
ACE Limited	7,600		304,456
XL Capital Ltd, Class A	3,500		258,965

			563,421

Canada - 2.11%
BCE Inc. (A)	17,000		366,524
Barrick Gold Corporation (A)	35,800		753,446
Husky Energy Inc. (A)	15,150		369,071

			1,489,041

China - 0.45%
China Telecom Corporation Limited (A)	610,000		197,516
China Telecom Corporation Limited (A)(B)	360,000		116,567

			314,083

Denmark - 2.61%
ISS A/S (A)	9,200		487,516
Vestas Wind Systems A/S (A)*	93,333		1,351,336

			1,838,852

Finland - 2.10%
Metso Corporation (A)	36,600		469,535
Sampo Oyj, Class A (A)	6,025		66,594
Stora Enso Oyj, Class R (A)	35,050		473,591
UPM-Kymmene Corporation (A)	24,810		472,341

			1,482,061

France - 3.03%
AXA (A)	28,400		574,547
Compagnie Generale des Etablissements Michelin, Class B (A)	7,400		376,057
Sanofi-Aventis (A)	4,998		362,490
SUEZ (A)	8,800		188,630
Total S.A. (A)	3,110		633,419

			2,135,143

Germany - 2.26%
Bayer Aktiengesellschaft (A)	15,000		409,827
Deutsche Post AG (A)	21,840		423,392
E.ON AG (A)	6,860		504,777
Volkswagen Aktiengesellschaft (A)	9,430		257,059

			1,595,055

Hong Kong - 1.99%
Bank of East Asia, Limited (The) (A)	121,800		342,060
Cheung Kong (Holdings) Limited (A)	47,000		402,310
China Mobile (Hong Kong) Limited, ADR	19,410		296,973
Hutchison Whampoa Limited, Ordinary Shares (A)	46,000		359,831

			1,401,174

Israel - 0.68%
Check Point Software Technologies Ltd.*	28,200		478,695


Italy - 0.96%
Eni S.p.A. (A)	30,300		678,837


Japan - 3.82%
Hitachi, Ltd. (A)	34,000		205,490
NEC Corporation (A)	37,000		221,271
Nintendo Co., Ltd. (A)	5,200		636,109
Nippon Telegraph and Telephone Corporation (A)	114		454,159
Ono Pharmaceutical Co., Ltd. (A)	14,000		621,262
Sony Corporation (A)	14,300		487,935
Takeda Chemical Industries, Ltd. (A)	1,500		68,061

			2,694,287

Mexico - 0.76%
Telefonos de Mexico, S.A. de C.V., ADR	16,500		532,455


Netherlands - 4.21%
Akzo Nobel N.V. (A)	15,580		550,086
ING Groep N.V., Certicaaten Van Aandelen (A)	27,960		705,582
Koninklijke Philips Electronics N.V., Ordinary Shares (A)	29,500		675,569
Reed Elsevier NV (A)	36,300		467,490
Wolters Kluwer nv, Certicaaten Van Aandelen (A)	34,000		572,143

			2,970,870

Norway - 1.12%
Telenor ASA (A)	100,850		768,537
Telenor ASA (A)(B)	2,550		19,432

			787,969

Singapore - 0.44%
DBS Group Holdings Ltd (A)	33,000		313,465


South Korea - 4.99%
KT Corporation, ADR	48,730		880,551
Kookmin Bank, ADR*	9,390		298,978
Korea Electric Power Corporation	22,050		232,628
POSCO, ADR	12,900		488,265
SK Telecom Co., Ltd., ADR	31,300		608,785
Samsung Electronics Co., Ltd. (A)	530		210,803
Samsung Electronics Co., Ltd., GDR*	4,010		793,980

			3,513,990

Spain - 1.44%
Iberdrola, S.A. (A)	26,772		555,244
Repsol YPF, S.A. (A)	20,550		451,212
Telefonica, S.A., BDR (A)	548		8,157

			1,014,613

Sweden - 2.85%
ForeningsSparbanken AB (A)	24,300		505,291
Nordea AB, FDR (A)	113,190		923,549
Securitas AB, Class B (A)	43,600		580,472

			2,009,312

Switzerland - 2.57%
Lonza Group Ltd, Registered Shares (A)	5,800		262,600
Nestle S.A., Registered Shares (A)	4,100		940,488
Swiss Reinsurance Company, Registered Shares (A)	5,350		308,307
UBS AG (A)	4,300		303,152

			1,814,547

Taiwan - 1.11%
Compal Electronics Inc., GDR	41,500		205,852
Chunghwa Telecom Co., Ltd., ADR	32,600		574,086

			779,938

United Kingdom - 15.15%
AMVESCAP PLC (A)	26,400		142,731
Abbey National plc (A)	57,700		584,750
BAE SYSTEMS plc (A)	179,510		730,121
BHP Billiton Plc (A)	66,820		703,174
BP p.l.c. (A)	82,800		790,423
Boots Group PLC (A)	37,700		438,009
Brambles Industries plc (A)	16,400		76,201
British Sky Broadcasting Group plc (A)	50,900		441,455
Cadbury Schweppes plc (A)	45,500		349,951
Compass Group PLC (A)	98,610		393,492
GlaxoSmithKline plc (A)	35,000		754,373
Kidde plc (A)	137,200		306,639
Lloyds TSB Group plc (A)	74,800		584,102
National Grid Transco plc (A)	63,700		537,483
Pearson plc (A)	34,900		373,267
Rentokil Initial plc (A)	176,770		481,451
Rolls-Royce plc (A)	120,600		552,718
"Shell" Transport and Trading Company, p.l.c. (The) (A)	96,200		705,948
Shire Pharmaceuticals Group plc (A)*	44,000		416,249
Smiths Group plc (A)	39,780		534,165
Unilever PLC (A)	42,200		343,471
Vodafone Group Plc (A)	183,400		438,936

			10,679,109


TOTAL COMMON STOCKS - 59.16%		$	41,700,629

(Cost: $36,304,558)

OTHER GOVERNMENT SECURITIES	Principal Amount in Thousands


Australia - 1.85%
New South Wales Treasury Corporation,
6.5%, 5-1-06 (B)(C)	AUD550		404,451
Queensland Treasury Corporation:
6.5%, 6-14-05 (C)		14	10,227
6.0%, 8-14-13 (C)		1,200	893,368

			1,308,046

Austria - 1.38%
Republic of Austria:
5.5%, 10-20-07 (C)	EUR360		480,274
4.0%, 7-15-09 (C)		70	89,641
5.0%, 7-15-12 (C)		300	401,651

			971,566

Belgium - 1.20%
Belgium Government Bond:
4.75%, 9-28-06 (C)		100	129,259
7.5%, 7-29-08 (C)		405	581,867
5.0%, 9-28-12 (C)		100	133,763

			844,889

Canada - 0.92%
Canadian Government Bond,
6.0%, 6-1-11 (C)	CAD748		648,036


Denmark - 1.05%
Denmark Government Bond:
5.0%, 8-15-05 (C)	DKK2,864		488,267
5.0%, 11-15-13 (C)		1,400	249,135

			737,402


Finland - 1.37%
Finland Government Bond:
3.0%, 7- 4-08 (C)		EUR400			495,640
5.0%, 4-25-09 (C)			60		80,010
5.75%, 2-23-11 (C)			280		390,306

					965,956

France - 2.39%
France Government Bond OAT:
4.0%, 10-25-09 (C)			712		911,645
4.0%, 4-25-13 (C)			620		776,321

					1,687,966

Germany - 1.34%
Deutsche Bundesrepublik:
6.0%, 7- 4-07 (C)			531		713,923
5.0%, 7- 4-11 (C)			170		228,237

					942,160

Ireland - 1.03%
Ireland Government Bond,
5.0%, 4-18-13 (C)			540		723,648


Italy - 1.80%
Italy Buoni Poliennali Del Tesoro:
7.75%, 11-1-06 (C)			479		655,603
5.5%, 11-1-10 (C)			447		612,682

					1,268,285

Netherlands - 1.86%
Netherlands Government Bond,
5.75%, 2-15-07 (C)			990		1,312,981


New Zealend - 2.79%
New Zealand Government Bond:
7.0%, 7-15-09 (C)		NZD1,950			1,363,093
6.0%, 11-15-11 (C)			900		603,146

					1,966,239

Norway - 1.44%
Norway Government Bond,
6.75%, 1-15-07 (C)		NOK6,285			1,017,558


Poland - 1.56%
Poland Government Bond:
8.5%, 11-12-06 (C)		PLN2,650			775,372
8.5%, 5-12-07 (C)			1,100		323,294

					1,098,666

Spain - 2.63%
Spain Government Bond:
10.15%, 1-31-06 (C)		EUR294			401,319
4.8%, 10-31-06 (C)			100		129,542
6.0%, 1-31-08 (C)			350		475,859
5.0%, 7-30-12 (C)			630		844,972

					1,851,692

Sweden - 3.16%
Sweden Government Bond:
8.0%, 8-15-07 (C)		SEK9,180			1,420,507
6.5%, 5-5-08 (C)			1,800		271,836
5.5%, 10-8-12 (C)			3,580		534,361

					2,226,704

Thailand - 2.71%
Thailand Government Bond:
6.0%, 3-5-05 (C)	THB16,000				393,265
8.5%, 10-14-05 (C)			45,700		1,177,505
8.0%, 12-8-06 (C)			12,500		338,032

					1,908,802

United Kingdom - 0.93%
United Kingdom Treasury,
7.5%, 12-7-06 (C)		GBP343			656,667


TOTAL OTHER GOVERNMENT SECURITIES - 31.41%				$	22,137,263
(Cost: $18,216,172)

TOTAL SHORT-TERM SECURITIES - 6.69%				$	4,719,000

(Cost: $4,719,000)

TOTAL INVESTMENT SECURITIES - 97.26%				$	68,556,892

(Cost: $59,239,730)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 2.74%					1,930,203


NET ASSETS - 100.00%				$	70,487,095

Notes to Schedule of Investments
	*No dividends were paid during the preceding 12 months.
(A)	Listed on an exchange outside the United States.
(B)	Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2004, the total value of these securities amounted to $1,013,399 or 1.44% of net assets.
(C)	Principal amounts are denominated in the indicated foreign currency, where appliccable (AUD - Australian Dollar, CAD - Canadian Dollar, DKK - Danish Krone, EUR - Euro, GBP - Great Britain Pound, NOK - Norwegian Krone, NZD - New Zealand Dollar, PLN - Polish Zloty, SEK - Swedish Krona, THB - Thailand Baht).
	See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
	See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY INTERNATIONAL BALANCED FUND
      September 30, 2004
      (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost-$59,240) (Notes 1 and 3)	$	68,557
Cash		11
Cash denominated in foreign currencies (cost - $398)		398
Receivables:
Investment securities sold		950
Dividends and interest		707
Fund shares sold		257
Prepaid and other assets		20

Total assets		70,900

LIABILITIES
Payable for investment securities purchased		272
Accrued management fee (Note 2)		39
Payable to Fund shareholders		37
Accrued service fee (Note 2)		14
Accrued shareholder servicing (Note 2)		14
Accrued accounting and administrative services fees (Note 2)		4
Accrued distribution fee (Note 2)		1
Other		32

Total liabilities		413

Total net assets	$	70,487

NET ASSETS
Capital paid in	$	60,341
Accumulated undistributed income:
Accumulated undistributed net investment income		392
Accumulated undistributed net realized gain on investment transactions		419
Net unrealized appreciation in value of investments		9,335

Net assets applicable to outstanding units of capital	$	70,487

Net asset value per share (net assets divided by shares outstanding):
Class A	$13.11
Class B	$13.10
Class C	$13.10
Class Y	$13.11
Capital shares outstanding:
Class A		5,168
Class B		97
Class C		93
Class Y		18

See Notes to Financial Statements.

Statement of Operations
      IVY INTERNATIONAL BALANCED FUND
      For the Six Months Ended September 30, 2004
      (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $101)	$	751
Interest and amortization		483

Total income		1,234

Expenses (Note 2):
Investment management fee		222
Service fee:
Class A		75
Class B		1
Class C		1
Class Y		- -	*
Shareholder servicing:
Class A		61
Class B		3
Class C		2
Class Y		- -	*
Registration fees		31
Accounting and administrative services fees		22
Custodian fees		19
Audit fees		14
Legal fees		8
Distribution fee:
Class A		2
Class B		3
Class C		3
Other		25

Total expenses		492

Net investment income		742

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		966
Realized net loss on foreign currency transactions		(27	)

Realized net gain on investments		939
Unrealized depreciation in value of investments during the period		(503	)

Net gain on investments		436

Net increase in net assets resulting from operations	$	1,178

* Not shown due to rounding.

See Notes to Financial Statements.

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

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the fiscal year ended 9-30-03

INCREASE IN NET ASSETS
Operations:
Net investment income	$	742		$	396		$	887
Realized net gain on investments		939			1,276			864
Unrealized appreciation (depreciation)		(503	)		6,602			9,936

Net increase in net assets resulting from operations		1,178			8,274			11,687

Distributions to shareholders from (Note 1F):^⁽¹⁾
Net investment income:
Class A		(781	)		(781	)		- -
Class B		(4	)		- -	*		- -
Class C		(4	)		- -	*		- -
Class Y		(2	)		- -	*		N/A
Realized gains on investment transactions:
Class A		- -			- -			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -			N/A
Tax return of capital:
Class A		- -			- -			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -			N/A

		(791	)		(781	)		- -

Capital share transactions (Note 5)		9,660			3,407			(2,324	)

Total increase		10,047			10,900			9,363
NET ASSETS
Beginning of period		60,440			49,540			40,177

End of period	$	70,487		$	60,440		$	49,540

Undistributed net investment income	$	392		$	468		$	639

*Not shown due to rounding.

(1)See "Financial Highlights" on pages 138-141.

See Notes to Financial Statements.

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

	For the six months ended				For the fiscal period ended			For the fiscal year ended September 30,
	For the six months ended				For the fiscal period ended			For the fiscal year ended September 30,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	13.07		$	11.33		$	8.72		$	9.28		$	11.59		$	11.80		$	10.56

Income (loss) from investment operations:
Net investment income			0.14			0.09			0.21			0.18			0.18			0.23			0.21
Net realized and unrealized gain (loss) on investments			0.06			1.83			2.40		(0.59		)		(1.28	)		0.50			1.52

Total from investment operations			0.20			1.92			2.61		(0.41		)		(1.10	)		0.73			1.73

Less distributions from:
Net investment income			(0.16	)		(0.18	)		(0.00	)	(0.00		)		(0.11	)		(0.36	)		(0.11	)
Capital gains			(0.00	)		(0.00	)		(0.00	)	(0.13		)		(1.10	)		(0.58	)		(0.38	)
Tax return of capital			(0.00	)		(0.00	)		(0.00	)	(0.02		)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.16	)		(0.18	)		(0.00	)	(0.15		)		(1.21	)		(0.94	)		(0.49	)

Net asset value, end of period		$	13.11		$	13.07		$	11.33		$	8.72		$	9.28		$	11.59		$	11.80

Total return^⁽¹⁾			1.56	%		17.05	%		29.93	%	-4.62		%	- -10.57		%		6.26	%		16.65	%
Net assets, end of period (in millions)			$68			$60			$46			$36			$40			$48			$50
Ratio of expenses to average net assets including reimbursement			1.52	%^⁽²⁾		1.54	%^⁽²⁾		1.67	%		1.62	%		1.62	%		1.52	%		1.63	%
Ratio of net investment income to average net assets including reimbursement			2.37	%^⁽²⁾		1.43	%^⁽²⁾		2.06	%		1.84	%		1.60	%		1.92	%		1.77	%
Ratio of expenses to average net assets excluding reimbursement			NA			1.60	%^⁽²⁾		1.71	%		1.72	%		1.73	%		1.65	%		1.70	%
Ratio of net investment income to average net assets excluding reimbursement			NA			1.37	%^⁽²⁾		2.02	%		1.74	%		1.49	%		1.79	%		1.70	%
Portfolio turnover rate			8	%		15	%		39	%		48	%		36	%		44	%		74	%

(1)Total return calculated without taking into account the sales load deducted on an initial purchase.

(2)Annualized.

See Notes to Financial Statements.

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

				For the period from 12-8-03^⁽¹⁾ to 3-31-04

Net asset value, beginning of period	$	13.04		$	12.34

Income from investment operations:
Net investment income		0.03	^⁽²⁾		0.19
Net realized and unrealized gain on investments		0.09	^⁽²⁾		0.69

Total from investment operations		0.12			0.88

Less distributions from:
Net investment income		(0.06	)		(0.18	)
Capital gains		(0.00	)		(0.00	)

Total distributions		(0.06	)		(0.18	)

Net asset value, end of period	$	13.10		$	13.04

Total return		0.93	%		7.18	%
Net assets, end of period (in thousands)	$1,271				$225
Ratio of expenses to average net assets		2.85	%^⁽³⁾		3.01	%^⁽³⁾
Ratio of net investment income to average net assets		0.53	%^⁽³⁾		1.09	%^⁽³⁾
Portfolio turnover rate		8	%		15	%^⁽⁴⁾

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(4)For the six months ended March 31, 2004.

See Notes to Financial Statements.

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

				For the period from 12-8-03^⁽¹⁾ to 3-31-04

Net asset value, beginning of period	$	13.04		$	12.34

Income from investment operations:
Net investment income		0.05	^⁽²⁾		0.19
Net realized and unrealized gain on investments		0.08	^⁽²⁾		0.69

Total from investment operations		0.13			0.88

Less distributions from:
Net investment income		(0.07	)		(0.18	)
Capital gains		(0.00	)		(0.00	)

Total distributions		(0.07	)		(0.18	)

Net asset value, end of period	$	13.10		$	13.04

Total return		0.99	%		7.18	%
Net assets, end of period (in thousands)	$1,218				$307
Ratio of expenses to average net assets		2.66	%^⁽³⁾		2.86	%^⁽³⁾
Ratio of net investment income to average net assets		0.84	%^⁽³⁾		1.13	%^⁽³⁾
Portfolio turnover rate		8	%		15	%^⁽⁴⁾

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(4)For the six months ended March 31, 2004.

See Notes to Financial Statements.

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

				For the period from 12-8-03^⁽¹⁾ to 3-31-04

Net asset value, beginning of period	$	13.07		$	12.34

Income from investment operations:
Net investment income		0.06			0.21
Net realized and unrealized gain on investments		0.14			0.70

Total from investment operations		0.20			0.91

Less distributions from:
Net investment income		(0.16	)		(0.18	)
Capital gains		(0.00	)		(0.00	)

Total distributions		(0.16	)		(0.18	)

Net asset value, end of period	$	13.11		$	13.07

Total return		1.57	%		7.47	%
Net assets, end of period (in thousands)		$236			$185
Ratio of expenses to average net assets including reimbursement		1.44	%^⁽²⁾		1.79	%^⁽²⁾
Ratio of net investment income to average net assets including reimbursement		2.51	%^⁽²⁾		2.00	%^⁽²⁾
Portfolio turnover rate		8	%		15	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the six months ended March 31, 2004.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY INTERNATIONAL VALUE FUND

Portfolio Highlights

On September 30, 2004, Ivy International Value Fund had net assets totaling $36,590,380 invested in a diversified portfolio of:

95.80%		Common Stocks
2.18%		Cash and Cash Equivalents
2.02%		Other Government Security

As a shareholder of the Fund, for every $100 you had invested on September 30, 2004,
your Fund was invested by geographic region and by industry, respectively, as follows:

Europe	$	70.36
Pacific Basin	$	23.68
Cash and Cash Equivalents	$	2.18
Scandinavia	$	1.57
Canada	$	1.49
South America	$	0.72

Financial Services Stocks	$	17.40
Utilities Stocks	$	15.73
Capital Goods Stocks	$	10.67
Consumer Services Stocks	$	10.27
Health Care Stocks	$	9.23
Energy Stocks	$	8.40
Consumer Goods Stocks	$	6.28
Raw Materials Stocks	$	3.84
Transportation Stocks	$	3.84
Business Equipment and Services Stocks	$	3.13
Technology Stocks	$	2.83
Shelter Stocks	$	2.75
Cash and Cash Equivalents	$	2.18
Other Government Security	$	2.02
Retail Stocks	$	1.43

The Investments of Ivy International Value Fund
September 30, 2004
COMMON STOCKS		Shares		Value


Australia - 1.23%
Australia and New Zealand Banking Group Limited (A)		16,200	$	223,205
Westpac Banking Corporation (A)		17,800		228,616

				451,821

Austria - 2.49%
Telekom Austria Aktiengesellschaft (A)		25,000		350,216
Wienerberger AG (A)		15,000		562,581

				912,797

Belgium - 1.95%
Fortis (A)		30,000		713,099


Brazil - 0.72%
Embraer-Empresa Brasileira de Aeronautica S.A.		10,000		264,000


Canada - 1.49%
EnCana Corporation (A)		11,800		544,766


Denmark - 0.63%
A.P. Moller-Maersk A/S (A)		30		229,822


Finland - 0.94%
Nokia Corporation, Series A, ADR		25,000		343,000


France - 10.64%
ALSTOM (A)*		100,000		59,611
Credit Agricole S.A. (A)		15,510		422,991
Lafarge (A)		2,560		223,979
Lagardere SCA (A)		10,000		620,205
Metropole Television SA (A)		15,000		401,258
PagesJaunes (A)(B)*		30,000		576,366
Peugeot S.A. (A)		10,000		615,982
Sanofi-Aventis (A)		7,872		570,932
Unibail Holding (A)		2,000		240,804
VINCI (A)		1,400		161,087

				3,893,215

Germany - 13.91%
Continental Aktiengesellschaft (A)		15,000		814,065
Deutsche Post AG (A)		40,000		775,442
Deutsche Telekom AG, Registered Shares (A)*		17,300		320,125
E.ON AG (A)		10,000		735,826
Fresenius AG (A)		1,190		96,519
Heidelberger Druckmaschinen Aktiengesellschaft (A)*		15,000		446,153
Hypo Real Estate Holding AG (A)*		20,000		683,045
Munchener Ruckversicherungs - Gesellschaft Aktiengesellschaft (A)		4,000		383,995
ProSieben- Sat.1 Meida Aktiengesellschaft (A)		30,000		547,678
RWE Aktiengesellschaft (A)		6,000		286,134

				5,088,982

Hong Kong - 1.39%
Beijing Capital Land Limited, Class H (A)	2,000,000			507,816


Ireland - 1.25%
Anglo Irish Bank Corporation plc (Ireland) (A)		25,000		457,951


Italy - 5.63%
Beni Stabili SpA (A)		300,000		257,446
Eni S.p.A. (A)		31,730		710,875
Fondiaria-SAI S.p.A. (A)		10,000		225,653
Italmobiliare S.p.A., Non-Convertible Savings Shares (A)		5,000		185,043
Saipem S.p.A. (A)		17,500		196,686
Snam Rete Gas S.p.A. (A)		100,000		483,099

				2,058,802

Japan - 19.89%
Asatsu-DK Inc. (A)		8,000		219,974
Electric Power Development Co., Ltd. (A)(B)*		30,000		762,966
Ichiyoshi Securities Co., Ltd. (A)		100,000		754,118
Japan Tobacco Inc. (A)		30		251,009
Kao Corporation (A)		24,000		530,332
Nikko Cordial Corporation (A)		81,000		328,572
Nikko Exchange Traded Index (A)		8,410		836,459
Nippon Mining Holdings, Inc. (A)(B)		100,000		506,375
Nippon Telegraph and Telephone Corporation (A)		100		398,385
Secom Co., Ltd. (A)		10,000		347,566
Sega Sammy Holdings Inc. (A)(C)*		10,000		489,941
Shimano Inc. (A)		25,000		638,640
Takeda Chemical Industries, Ltd. (A)		15,000		680,612
Tokyo Gas Co., Ltd. (A)		150,000		532,238

				7,277,187

Luxembourg - 1.82%
ARCELOR (A)		36,000		665,261


Netherlands - 2.36%
Euronext N.V. (A)		7,350		209,122
Royal Boskalis Westminster nv, Certicaaten Van Aandelen (A)		8,800		233,328
Wolters Kluwer nv, Certicaaten Van Aandelen (A)		25,000		420,693

				863,143

Portugal - 0.90%
Portugal Telecom, SGPS, S.A., Registered Shares (A)		30,000		330,470


South Korea - 1.17%
Samsung Electronics Co., Ltd. (A)		1,080		429,561


Spain - 4.72%
Altadis, S.A. (A)		10,000		340,280
Enagas, S.A. (A)		70,000		837,165
Repsol YPF, S.A. (A)		25,000		548,920

				1,726,365

Switzerland - 8.70%
Clariant Ltd., Registered Shares (A)		15,500		185,856
Credit Suisse Group, Registered Shares (A)*		11,950		381,944
Holcim Ltd, Registered Shares (A)		10,085		532,641
Nestle S.A., Registered Shares (A)		2,440		559,705
Novartis AG, Registered Shares (A)		20,400		952,262
Zurich Financial Services (A)*		4,000		571,062

				3,183,470

United Kingdom - 13.97%
BAA plc (A)		40,000		400,668
BP p.l.c. (A)		80,200		765,603
British Sky Broadcasting Group plc (A)		33,461		290,207
Compass Group PLC (A)		131,170		523,419
GlaxoSmithKline plc (A)		50,000		1,077,676
Imperial Chemical Industries PLC (A)		102,000		389,484
Lloyds TSB Group plc (A)		100,000		780,886
Vedanta Resources plc (A)(B)		25,200		164,176
Vodafone Group Plc (A)		300,000		717,998

				5,110,117


TOTAL COMMON STOCKS - 95.80%			$	35,051,645

(Cost: $31,398,703)

OTHER GOVERNMENT SECURITY - 2.02%	Principal Amount in Thousands


Germany
Bundesschatzanweisungen Treasury Note,
3.0%, 12-10-04 (D)	EUR 595		$	740,017

(Cost: $722,513)

TOTAL SHORT-TERM SECURITIES - 4.00%			$	1,463,000

(Cost: $1,463,000)


TOTAL INVESTMENT SECURITIES - 101.82%	$	37,254,662

(Cost: $33,584,216)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (1.82%)		(664,282	)


NET ASSETS - 100.00%	$	36,590,380

Notes to Schedule of Investments
	*No dividends were paid during the preceding 12 months.
(A)	Listed on an exchange outside the United States.
(B)	Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2004, the total value of these securities amounted to $2,009,883 or 5.49% of net assets.
(C)	Security valued in good faith by the Valuation Committee of the Board of Trustees. See Note 1 to financial statements.
(D)	Principal amounts are denominated in the indicated foreign currency, where appliccable (EUR - Euro).
	See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
	See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
     IVY INTERNATIONAL VALUE FUND
      September 30, 2004
      (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost-$33,584) (Notes 1 and 3)	$	37,255
Receivables:
Dividends and interest		198
Fund shares sold		19
Prepaid and other assets		32

Total assets		37,504

LIABILITIES
Payable for investment securities purchased		735
Payable to Fund shareholders		57
Accrued management fee (Note 2)		30
Accrued shareholder servicing (Note 2)		23
Due to custodian		17
Accrued distribution fee (Note 2)		16
Accrued service fee (Note 2)		8
Accrued accounting and administrative services fees (Note 2)		2
Other		26

Total liabilities		914

Total net assets	$	36,590

NET ASSETS
Capital paid in	$	47,338
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(2	)
Accumulated undistributed net realized loss on investment transactions	(14,418		)
Net unrealized appreciation in value of investments		3,672

Net assets applicable to outstanding units of capital	$	36,590

Net asset value per share (net assets divided by shares outstanding):
Class A		$9.82
Class B		$9.27
Class C		$9.26
Class Y		$9.85
Advisor Class		$9.74
Capital shares outstanding:
Class A		1,048
Class B		2,109
Class C		706
Class Y		19
Advisor Class		3

See Notes to Financial Statements.

Statement of Operations
      IVY INTERNATIONAL VALUE FUND
      For the Six Months Ended September 30, 2004
      (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $63)	$	527
Interest and amortization		9

Total income		536

Expenses (Note 2):
Investment management fee		192
Distribution fee:
Class A		1
Class B		80
Class C		26
Shareholder servicing:
Class A		21
Class B		48
Class C		16
Class Y		- -	*
Advisor Class		- -	*
Service fee:
Class A		11
Class B		27
Class C		9
Class Y		- -	*
Audit fees		19
Custodian fees		16
Accounting and administrative services fees		15
Legal fees		7
Other		18

Total expenses		506

Net investment income		30

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		1,893
Realized net loss on foreign currency transactions		(27	)

Realized net gain on investments		1,866
Unrealized depreciation in value of investments during the period		(3,324	)

Net loss on investments		(1,458	)

Net decrease in net assets resulting from operations	$	(1,428	)

*Not shown due to rounding.

See Notes to Financial Statements.

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

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the fiscal year ended 12-31-03

DECREASE IN NET ASSETS
Operations:
Net investment income (loss)	$	30		$	(110	)	$	(285	)
Realized net gain (loss) on investments		1,866			1,854			(1,906	)
Unrealized appreciation (depreciation)		(3,324	)		(57	)		11,851

Net increase (decrease) in net assets resulting from operations		(1,428	)		1,687			9,660

Distributions to shareholders from net investment income (Note 1F):^⁽¹⁾
Class A		- -			- -			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -			- -
Advisor Class		- -			- -			- -

		- -			- -			- -

Capital share transactions (Note 5)		(3,887	)		(1,848	)	(12,918		)

Total decrease		(5,315	)		(161	)		(3,258	)
NET ASSETS
Beginning of period		41,905			42,066			45,324

End of period	$	36,590		$	41,905		$	42,066

Undistributed net investment loss	$	(2	)	$	(5	)	$	(8	)

(1)See "Financial Highlights" on pages 150-154.

See Notes to Financial Statements.

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

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	10.14		$	9.73		$	7.65		$	9.10		$	11.01		$	11.99		$	9.48

Income (loss) from investment operations:
Net investment income (loss)			0.02			(0.01	)	(0.02		)		0.08	^⁽¹⁾		0.07			0.14			0.09
Net realized and unrealized gain (loss) on investments			(0.34	)		0.42			2.10		(1.53		)		(1.96	)		(1.01	)		2.54

Total from investment operations			(0.32	)		0.41			2.08		(1.45		)		(1.89	)		(0.87	)		2.63

Less distributions from:
Net investment income			(0.00	)		(0.00	)	(0.00		)	(0.00		)		(0.02	)		(0.04	)		(0.10	)
Capital gains			(0.00	)		(0.00	)	(0.00		)	(0.00		)		(0.00	)		(0.07	)		(0.02	)

Total distributions			(0.00	)		(0.00	)	(0.00		)	(0.00		)		(0.02	)		(0.11	)		(0.12	)

Net asset value, end of period		$	9.82		$	10.14		$	9.73		$	7.65		$	9.10		$	11.01		$	11.99

Total return^⁽²⁾			- -3.16	%		4.21	%	27.19		%	- -15.93		%	- -17.17		%		- -7.25	%		27.79	%
Net assets, end of period (in millions)			$10			$10			$9			$8			$13			$24			$33
Ratio of expenses to average net assets including reimbursement			2.13	%^⁽³⁾		2.16	%^⁽³⁾	2.28		%		1.77	%		1.77	%		1.74	%		1.72	%
Ratio of net investment income (loss) to average net assets including reimbursement			0.66	%^⁽³⁾		- -0.41	%^⁽³⁾	- -0.19		%		0.91	%		0.58	%		0.96	%		0.92	%
Ratio of expenses to average net assets excluding reimbursement			NA			NA			NA			2.32	%		2.15	%		1.92	%		1.87	%
Ratio of net investment income to average net assets excluding reimbursement			NA			NA			NA			0.36	%		0.20	%		0.78	%		0.77	%
Portfolio turnover rate			42	%		23	%		148	%		48	%		39	%		36	%		21	%

(1)Based on average shares outstanding.

(2)Total return calculated without taking into account the sales load deducted on an initial purchase.

(3)Annualized.

See Notes to Financial Statements.

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

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	9.60		$	9.24		$	7.32		$	8.97		$	10.94		$	11.91		$	9.42

Income (loss) from investment operations:
Net investment income (loss)		(0.01		)	(0.03		)	(0.08		)		0.01	^⁽¹⁾		(0.02	)		0.02			0.01
Net realized and unrealized gain (loss) on investments		(0.32		)		0.39			2.00		(1.66		)		(1.93	)		(0.96	)		2.51

Total from investment operations		(0.33		)		0.36			1.92		(1.65		)		(1.95	)		(0.94	)		2.52

Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.02	)		(0.01	)		(0.01	)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.00	)		(0.02	)		(0.02	)

Total distributions		(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.02	)		(0.03	)		(0.03	)

Net asset value, end of period		$	9.27		$	9.60		$	9.24		$	7.32		$	8.97		$	10.94		$	11.91

Total return		- -3.44		%	3.90		%	26.23		%	- -18.39		%	- -17.84		%	- -7.94		%	26.81		%
Net assets, end of period (in millions)			$20			$24			$25		$28			$46			$76			$95
Ratio of expenses to average net assets including reimbursement		2.88		%^⁽²⁾	2.91		%^⁽²⁾	2.95		%	2.50		%	2.50		%	2.51		%	2.51		%
Ratio of net investment income (loss) to average net assets including reimbursement		- -0.02		%^⁽²⁾	- -1.20		%^⁽²⁾	- -0.82		%	0.18		%	- -0.15		%	0.20		%	0.12		%
Ratio of expenses to average net assets excluding reimbursement		NA			NA			NA			3.05		%	2.88		%	2.69		%	2.66		%
Ratio of net investment income (loss) to average net assets excluding reimbursement		NA			NA			NA			- -0.37		%	- -0.53		%	0.02		%	- -0.03		%
Portfolio turnover rate			42	%	23		%	148		%	48		%	39		%	36		%	21		%

(1)Based on average shares outstanding.

(2)Annualized.

See Notes to Financial Statements.

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

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	9.59		$	9.23		$	7.32		$	8.97		$	10.94		$	11.92		$	9.42

Income (loss) from investment operations:
Net investment income (loss)		(0.01		)	(0.03		)	(0.08		)		0.01	^⁽¹⁾		(0.02	)		0.02			0.02
Net realized and unrealized gain (loss) on investments		(0.32		)		0.39			1.99		(1.66		)		(1.93	)		(0.97	)		2.51

Total from investment operations		(0.33		)		0.36			1.91		(1.65		)		(1.95	)		(0.95	)		2.53

Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.02	)		(0.01	)		(0.01	)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.00	)		(0.02	)		(0.02	)

Total distributions		(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.02	)		(0.03	)		(0.03	)

Net asset value, end of period		$	9.26		$	9.59		$	9.23		$	7.32		$	8.97		$	10.94		$	11.92

Total return		- -3.44		%		3.90	%	26.09		%	- -18.39		%	- -17.84		%		- -7.97	%		26.91	%
Net assets, end of period (in millions)			$7			$8			$8			$9			$16			$30			$44
Ratio of expenses to average net assets including reimbursement			2.92	%^⁽²⁾		3.01	%^⁽²⁾		3.01	%		2.50	%		2.51	%		2.51	%		2.49	%
Ratio of net investment income (loss) to average net assets including reimbursement		- -0.06		%^⁽²⁾	- -1.30		%^⁽²⁾	- -0.82		%		0.18	%		- -0.16	%		0.19	%		0.14	%
Ratio of expenses to average net assets excluding reimbursement			NA			NA			NA			3.05	%		2.89	%		2.69	%		2.64	%
Ratio of net investment income (loss) to average net assets excluding reimbursement			NA			NA			NA		- -0.37		%	- -0.54		%	0.01		%	- -0.01		%
Portfolio turnover rate			42	%		23	%		148	%		48	%		39	%		36	%		21	%

(1)Based on average shares outstanding.

(2)Annualized.

See Notes to Financial Statements.

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

				For the fiscal period ended 3-31-04

Net asset value, beginning of period	$	10.15		$	9.74		$	8.16

Income (loss) from investment operations:
Net investment income (loss)		0.03		(0.01		)	(0.01		)
Net realized and unrealized gain (loss) on investments	(0.33		)		0.42			1.59

Total from investment operations	(0.30		)		0.41			1.58

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

Total distributions	(0.00		)	(0.00		)	(0.00		)

Net asset value, end of period	$	9.85		$	10.15		$	9.74

Total return		- -2.96	%		4.21	%	19.36		%
Net assets, end of period (in thousands)	$184			$145			$125
Ratio of expenses to average net assets		1.87	%^⁽²⁾		2.08	%^⁽²⁾		1.47	%^⁽²⁾
Ratio of net investment income (loss) to average net assets		0.97	%^⁽²⁾		- -0.31	%^⁽²⁾	- -0.38		%^⁽²⁾
Portfolio turnover rate		42	%		23	%		148	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the twelve months ended December 31, 2003.

See Notes to Financial Statements.

Financial Highlights
IVY INTERNATIONAL VALUE FUND
Advisor Class Shares^⁽¹⁾ For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	10.04		$	9.63		$	7.54		$	9.14		$	11.03		$	11.99		$	9.48

Income (loss) from investment operations:
Net investment income (loss)			0.17			(0.00	)		0.67			0.10	^⁽²⁾		0.11			0.50			0.04
Net realized and unrealized gain (loss) on investments			(0.47	)		0.41			1.42		(1.70		)		(1.98	)		(1.33	)		2.64

Total from investment operations			(0.30	)		0.41			2.09		(1.60		)		(1.87	)		(0.83	)		2.68

Less distributions from:
Net investment income			(0.00	)		(0.00	)	(0.00		)	(0.00		)		(0.02	)		(0.05	)		(0.10	)
Capital gains			(0.00	)		(0.00	)	(0.00		)	(0.00		)		(0.00	)		(0.08	)		(0.07	)

Total distributions			(0.00	)		(0.00	)	(0.00		)	(0.00		)		(0.02	)		(0.13	)		(0.17	)

Net asset value, end of period		$	9.74		$	10.04		$	9.63		$	7.54		$	9.14		$	11.03		$	11.99

Total return		- -2.99		%	4.26		%	27.72		%	-17.51		%	- -17.03		%	- -6.90		%	28.30		%
Net assets, end of period (in thousands)		$32			$41			$39			$124			$377			$668			$2,748
Ratio of expenses to average net assets including reimbursement			1.97	%^⁽³⁾	1.62		%^⁽³⁾	2.59		%	1.50		%		1.47	%		1.35	%		1.38	%
Ratio of net investment income to average net assets including reimbursement			0.83	%^⁽³⁾	0.11		%^⁽³⁾	1.43		%	1.18		%		0.89	%		1.36	%		1.25	%
Ratio of expenses to average net assets excluding reimbursement			NA			NA			NA		2.05		%		1.85	%		1.53	%		1.53	%
Ratio of net investment income to average net assets excluding reimbursement			NA			NA			NA		0.63		%		0.51	%		1.18	%		1.10	%
Portfolio turnover rate			42	%		23	%		148	%		48	%		39	%		36	%		21	%

(1)See Note 5 to financial statements.

(2)Based on average shares outstanding.

(3)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY MORTGAGE SECURITIES FUND

Portfolio Highlights

On September 30, 2004, Ivy Mortgage Securities Fund had net assets totaling $166,136,037 invested in a diversified portfolio of:

62.81%		United States Government Bonds
		Corporate Bonds:
31.64%		Finance Companies
3.00%		Other
2.13%		Cash and Cash Equivalents
0.42%		Municipal Bond

As a shareholder of the Fund, for every $100 you had invested on September 30, 2004, your Fund owned:

United States Government Bonds	$	62.81
Corporate Bonds:
Finance Companies	$	31.64
Other	$	3.00
Cash and Cash Equivalents	$	2.13
Municipal Bond	$	0.42

The Investments of Ivy Mortgage Securities Fund
September 30, 2004
CORPORATE DEBT SECURITIES	Principal Amount in Thousands			Value


Banks - 1.19%
Banc of America Funding Corporation,
5.08035%, 9-20-34	$	1,970	$	1,983,695


Finance Companies - 31.64%
277 Park Avenue Finance Corporation,
7.58%, 5-12-12 (A)		185		203,061
Asset Securitization Corporation, Interest Only:
1.82878%, 10-13-26 (A)		9,988		500,866
2.24313%, 8-13-29		10,516		810,801
Associates Manufactured Housing,
7.9%, 3-15-27		1,800		1,922,336
Banco Hipotecario Nacional:
7.916%, 7-25-09 (A)		23		1,164
2.57%, 3-25-11 (A)		10		500
7.54%, 5-31-17 (A)		236		23,640
BankAmerica Manufactured Housing Contract Trust:
7.8%, 10-10-26		2,000		2,165,717
7.015%, 1-10-28		1,448		1,539,522
BlackRock Capital Finance,
7.75%, 9-25-26 (A)		1,093		1,145,178
Capital One Multi-asset Execution Trust,
6.0%, 8-15-13		265		282,178
Citicorp Mortgage Securities, Inc.,
6.31238%, 9-25-14		457		462,545
Collateralized Mortgage Obligation Trust,
5.0%, 7-1-18		62		62,219
Conseco Finance Securitizations Corp.,
6.981%, 8-15-33		1,200		1,263,366
Credit Suisse First Boston Mortgage Securities Corp.,
6.0%, 11-25-18		1,293		1,337,422
CHL Mortgage Pass-Through Trust 2003-28,
4.15%, 8-25-33		1,500		1,434,898
FFCA Secured Lending Corporation:
2.91125%, 2-18-22		1,500		1,356,454
3.16125%, 2-18-22		1,000		893,628
Franchise Finance Corporation of America,
7.8%, 6-1-20		310		322,269
8.91%, 6-25-14		1,250		1,243,883
GMAC MORTGAGE Corporation Loan Trust 2004-AR2,
4.524%, 8-19-34		1,980		1,980,939
GMAC Commerical Mortgage Securities,
5.94%, 7-1-13 (A)		404		405,560
GRMT Fairbanks Trust,
3.91125%, 6-20-32 (A)		1,031		1,029,137
GSR Mortgage Loan Trust 2004-9,
3.932%, 8-1-34		1,500		1,438,399
Green Tree Financial Corporation:
8.3%, 11-15-19		381		405,202
9.1%, 4-15-25		1,075		1,230,672
Hilton Hotel Pool Trust 2000-HLTA C,
7.458%, 10-3-15 (A)		500		568,697
JP Morgan Mortgage Trust 2004-A3,
4.3372%, 7-25-34		1,996		1,955,222
Lehman ABS Manufactured Housing Contract,
5.873%, 5-15-22		1,153		1,199,983
MASTR Asset Securitization Trust 2003-10,
5.5%, 11-25-33		2,001		2,015,448
MMCA Automobile Trust 2002-1,
5.37%, 1-15-10		790		787,749
Metropolitan Asset Funding, Inc.,
6.98%, 5-20-12 (A)		198		197,662
Mid-State Trust:
8.33%, 4-1-30		871		943,171
7.34%, 7-1-35		2,011		2,163,409
7.4%, 7-1-35		1,898		2,017,322
7.79%, 7-1-35		809		876,646
Mortgage Capital Funding, Inc.,
7.28803%, 6-18-30		1,600		1,825,380
Oakwood Mortgage Investors, Inc.:
8.1%, 10-15-21 (A)		916		969,668
7.375%, 8-15-27		819		864,207
Origen Manufactured Housing Contract Trust 2004-A:
2.02%, 10-15-13		167		166,148
5.91%, 1-15-35		1,000		983,065
Origen Manufactured Housing Contract Trust 2004-B,
4.75%, 8-15-21		400		397,375
Paine Webber Mortgage Acceptance Corporation,
7.655%, 1-2-12 (A)		2,450		2,642,716
Prudential Home Mortgage Securities:
6.82626%, 9-28-08 (A)		55		54,596
6.85144%, 4-28-24		16		15,736
7.948%, 9-28-24 (A)		63		62,600
Prudential Securities Secured Financing Corporation,
7.7347%, 6-16-31		1,500		1,683,335
Sequoia Mortgage Funding Company,
6.38%, 8-28-31 (A)		128		127,892
Structured Asset Mortgage Investments, Inc.:
6.75%, 4-30-30		47		47,417
6.75%, 4-30-30		104		104,164
Structured Asset Securities Corporation,
5.63%, 5-25-34		1,100		1,110,117
Vanderbilt Mortgage and Finance, Inc.:
7.525%, 7-7-14		246		249,998
7.07%, 12-7-14		654		664,164
7.955%, 12-7-24		1,000		1,102,736
7.525%, 11-7-26		915		979,530
Wells Fargo Mortgage Backed Securities 2004-Q Trust,
4.975%, 9-25-34		1,899		1,899,968
Whole Auto Loan Trust,
6.0%, 4-15-09		429		428,073

				52,565,750

Real Estate Investment Trust - 0.47%
Covenant Retirement Communities, Inc.,
7.0%, 6-1-06		750		773,459


Security and Commodity Brokers - 1.34%
Bear Stearns Commercial Mortgage Securities Inc.,
8.0%, 11-25-29		835		843,667
Bear Stearns Mortgage Securities, Inc.,
5.064%, 5-14-16 (A)		1,350		1,380,219

				2,223,886


TOTAL CORPORATE DEBT SECURITIES - 34.64%			$	57,546,790

(Cost: $56,719,743)


MUNICIPAL OBLIGATION - 0.42%


California
City of Pleasant Hill, Taxable Multifamily Housing Revenue Refunding Bonds, Series 1995A (GNMA Collateralized - Chateau Project),
7.95%, 9-20-15		667	$	695,588

(Cost: $674,902)


UNITED STATES GOVERNMENT SECURITIES


Mortgage-Backed Obligations
Federal Home Loan Mortgage Corporation, Fixed Rate Participation Certificates:
5.5%, 12-1-17		1,300		1,348,731
3.5%, 2-15-30		2,000		1,887,125
3.75%, 2-15-30		1,500		1,431,201
6.5%, 9-1-32		2,040		2,150,807
5.5%, 5-1-34		1,920		1,954,913
5.5%, 5-1-34		1,374		1,398,777


Federal National Mortgage Association, Fixed Rate Pass-Through Certificates:
6.0%, 1-1-18	996		1,044,636
5.5%, 2-1-18	798		827,842
5.0%, 5-1-18	2,314		2,360,451
4.5%, 5-1-19	250		249,422
4.5%, 7-1-19	500		498,792
5.5%, 1-1-24	916		938,795
7.0%, 11-1-31	444		471,095
6.5%, 2-1-32	331		348,166
6.5%, 2-1-32	284		299,500
6.5%, 2-1-32	241		254,347
7.0%, 2-1-32	534		569,441
7.0%, 3-1-32	746		795,852
6.5%, 4-1-32	149		157,167
6.5%, 5-1-32	282		297,164
7.0%, 6-1-32	1,690		1,799,120
6.5%, 7-1-32	1,267		1,336,032
6.0%, 9-1-32	272		282,534
6.0%, 10-1-32	1,849		1,925,735
6.0%, 10-1-32	1,604		1,670,205
6.0%, 10-1-32	1,312		1,366,093
6.5%, 10-1-32	126		132,422
6.0%, 11-1-32	1,391		1,448,769
6.0%, 11-1-32	843		877,572
6.0%, 3-1-33	2,099		2,186,075
6.0%, 3-1-33	2,015		2,097,722
6.0%, 3-1-33	1,368		1,424,366
6.0%, 3-1-33	397		413,863
5.5%, 4-1-33	2,736		2,781,723
5.5%, 5-1-33	1,062		1,078,157
5.5%, 5-1-33	454		461,276
5.0%, 8-1-33	964		955,901
5.0%, 11-1-33	4,677		4,640,205
5.0%, 1-1-34	4,707		4,669,248
5.0%, 3-1-34	1,654		1,638,447
5.5%, 3-1-34	3,840		3,909,373
6.0%, 3-1-34	1,381		1,430,432
5.5%, 4-1-34	6,533		6,628,097
5.5%, 4-1-34	2,921		2,973,751
5.0%, 5-1-34	2,264		2,242,627
5.5%, 6-1-34	1,254		1,272,541
5.5%, 7-1-34	2,487		2,529,980
5.0%, 8-1-34	6,896		6,832,319
6.0%, 8-1-34	1,983		2,054,208
5.5%, 9-1-34	1,902		1,931,246
6.0%, 9-1-34	1,979		2,049,687
6.5%, 9-1-34	4,146		4,352,687
4.5%, 10-1-34	750		722,109
5.5%, 10-1-34	4,600		4,661,815
5.5%, 10-1-34	2,000		2,026,250
Government National Mortgage Association, Fixed Rate Pass-Through Certificates:
7.875%, 5-15-17	733		800,536
6.25%, 7-15-24	364		385,767
5.0%, 10-1-34	3,000		2,983,125
Government National Mortgage Association, Agency REMIC/CMO, Interest Only:
1.34086%, 3-16-34	9,080		564,500
1.22897%, 7-16- 40	9,066		520,487
0.39766%, 3-16- 42	21,778		423,193
United States Department of Veterans Affairs, Guaranteed REMIC Pass-Through Certificates, Vendee Mortgage Trust:
1995-1 Class 1,
7.21928%, 2-15-25	399		433,274
1995-1 Class 2,
7.7925%, 2-15-25	143		154,919

TOTAL UNITED STATES GOVERNMENT SECURITIES - 62.81%		$	104,352,612
(Cost: $103,981,252)

TOTAL SHORT-TERM SECURITIES - 9.71%		$	16,129,718

(Cost: $16,129,718)

TOTAL INVESTMENT SECURITIES - 107.58%		$	178,724,708

(Cost: $177,505,615)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (7.58%)			(12,588,671	)


NET ASSETS - 100.00%		$	166,136,037

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, 2004, the total value of these securities amounted to $9,313,156 or 5.61% of net assets.
	See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
	See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
     IVY MORTGAGE SECURITIES FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (cost-$177,506) (Notes 1 and 3)	$	178,725
Receivables:
Investment securities sold		6,595
Fund shares sold		1,890
Dividends and interest		832
Prepaid and other assets		73

Total assets		188,115

LIABILITIES
Payable for investment securities purchased		21,164
Due to custodian		389
Payable to Fund shareholders		218
Accrued management fee (Note 2)		66
Dividends payable		56
Accrued shareholder servicing (Note 2)		42
Accrued service fee (Note 2)		33
Accrued accounting and administrative services fees (Note 2)		6
Accrued distribution fee (Note 2)		5

Total liabilities		21,979

Total net assets	$	166,136

NET ASSETS
Capital paid in	$	164,747
Accumulated undistributed income:
Accumulated undistributed net investment income		4
Accumulated undistributed net realized gain on investment transactions		166
Net unrealized appreciation in value of investments		1,219

Net assets applicable to outstanding units of capital	$	166,136

Net asset value per share (net assets divided by shares outstanding):
Class A		$10.85
Class B		$10.85
Class C		$10.85
Class Y		$10.85
Capital shares outstanding:
Class A		14,085
Class B		382
Class C		500
Class Y		350

See Notes to Financial Statements.

Statement of Operations
      IVY MORTGAGE SECURITIES FUND
      For the Six Months Ended September 30, 2004
      (In Thousands)

INVESTMENT INCOME
Interest and amortization (Note 1B)	$	4,279

Expenses (Note 2):
Investment management fee		370
Shareholder servicing:
Class A		200
Class B		5
Class C		5
Class Y		3
Service fee:
Class A		170
Class B		3
Class C		4
Class Y		4
Registration fees		38
Accounting and administrative services fees		33
Distribution fee:
Class A		4
Class B		9
Class C		11
Legal fees		20
Audit fees		13
Custodian fees		13
Other		48

Total		953
Less expenses in excess of contractual limit (Note 2)		(217	)

Total expenses		736

Net investment income		3,543

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		397
Unrealized depreciation in value of investments during the period	(1,662		)

Net loss on investments	(1,265		)

Net increase in net assets resulting from operations	$	2,278

See Notes to Financial Statements.

Statement of Changes in Net Assets
IVY MORTGAGE SECURITIES FUND
(In Thousands)

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the fiscal year ended 9-30-03

INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	3,543		$	3,138		$	6,503
Realized net gain (loss) on investments		397			(158	)		464
Unrealized appreciation (depreciation)		(1,662	)		809			(1,864	)

Net increase in net assets resulting from operations		2,278			3,789			5,103

Distributions to shareholders from (Note 1F):^⁽¹⁾
Net investment income:
Class A		(3,353	)		(3,101	)		(4,223	)
Class B		(43	)		(5	)		(1,558	)
Class C		(56	)		(8	)		(600	)
Class Y		(75	)		(35	)		N/A
Realized gains on investment transactions:
Class A		- -			(495	)		- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			(9	)		N/A
Tax return of capital:
Class A		- -			- -			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -			N/A

		(3,527	)		(3,653	)		(6,381	)

Capital share transactions (Note 5)		27,240			(2,289	)		35,890

Total increase (decrease)		25,991			(2,153	)		34,612
NET ASSETS
Beginning of period		140,145			142,298			107,686

End of period	$	166,136		$	140,145		$	142,298

Undistributed net investment income (loss)	$	4		$	(7	)	$	4

(1)See "Financial Highlights" on pages 164-167.

See Notes to Financial Statements.

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

	For the six months ended					For the fiscal period ended				For the fiscal year ended September 30,
	For the six months ended					For the fiscal period ended				For the fiscal year ended September 30,
	9-30-04					3-31-04				2003			2002			2001			2000			1999

Net asset value, beginning of period		$	10.96		$		10.97		$		11.07		$	10.99		$	10.37		$	10.30		$	10.75

Income (loss) from investment operations:
Net investment income			0.26				0.25				0.59			0.70			0.73			0.69			0.69
Net realized and unrealized gain (loss) on investments			(0.11	)			0.03				(0.12	)		0.11			0.65			0.09			(0.45	)

Total from investment operations			0.15				0.28				0.47			0.81			1.38			0.78			0.24

Less distributions from:
Net investment income			(0.26	)			(0.25	)			(0.57	)		(0.72	)		(0.72	)		(0.70	)		(0.68	)
Capital gains			(0.00	)			(0.04	)			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Tax return of capital			(0.00	)			(0.00	)			(0.00	)		(0.01	)		(0.04	)		(0.01	)		(0.01	)

Total distributions			(0.26	)			(0.29	)			(0.57	)		(0.73	)		(0.76	)		(0.71	)		(0.69	)

Net asset value, end of period		$	10.85		$		10.96		$		10.97		$	11.07		$	10.99		$	10.37		$	10.30

Total return^⁽¹⁾			1.43	%			2.70	%			4.19	%^⁽²⁾		7.88	%	13.90		%		7.70	%		2.26	%
Net assets, end of period (in millions)			$153				$134				$91			$67			$42			$32			$34
Ratio of expenses to average net assets including reimbursement			0.95	%^⁽³⁾			1.05	%^{^(3,4)}			0.97	%		0.95	%		0.95	%		0.95	%		0.95	%
Ratio of net investment income to average net assets including reimbursement			4.83	%^⁽³⁾			4.56	%^{^(3,4)}			5.27	%		6.24	%		6.75	%		6.81	%		6.29	%
Ratio of expenses to average net assets excluding reimbursement			1.26	%^⁽³⁾			1.38	%^{^(3,4)}			1.12	%		1.21	%		1.31	%		1.32	%		1.21	%
Ratio of net investment income to average net assets excluding reimbursement			4.52	%^⁽³⁾			4.22	%^{^(3,4)}			5.12	%		5.98	%		6.39	%		6.44	%		6.03	%
Portfolio turnover rate			100	%			57	%			83	%		99	%		55	%		65	%		127	%

(1)Total return calculated without taking into account the sales load deducted on an initial purchase.

(3)Annualized.

(4)In connection with the reorganization plan described in Note 8, Class B and Class C shares of the predecessor Advantus Fund were exchanged into Class A shares at the time of the merger. The ratios shown reflect a blended rate that includes income and expenses for those Class B and Class C shares before October 1, 2003 up to the time of merger. Expenses for Class A shares before and after the merger were limited to 0.95% of average net assets.

See Notes to Financial Statements.

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

	For the six months ended 9-30-04			For the period from 12-8-03^⁽¹⁾ to 3-31-04

Net asset value, beginning of period	$	10.96		$	10.87

Income (loss) from investment operations:
Net investment income		0.20			0.12
Net realized and unrealized gain (loss) on investments		(0.11	)		0.13

Total from investment operations		0.09			0.25

Less distributions from:
Net investment income		(0.20	)		(0.12	)
Capital gains		(0.00	)		(0.04	)

Total distributions		(0.20	)		(0.16	)

Net asset value, end of period	$	10.85		$	10.96

Total return		0.84	%		2.32	%
Net assets, end of period (in millions)		$4			$1
Ratio of expenses to average net assets		2.16	%^⁽²⁾		1.89	%^⁽²⁾
Ratio of net investment income to average net assets		3.53	%^⁽²⁾		3.59	%^⁽²⁾
Portfolio turnover rate		100	%		57	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the six months ended March 31, 2004.

See Notes to Financial Statements.

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

	For the six months ended 9-30-04			For the period from 12-8-03^⁽¹⁾ to 3-31-04

Net asset value, beginning of period	$	10.96		$	10.87

Income (loss) from investment operations:
Net investment income		0.20			0.12
Net realized and unrealized gain (loss) on investments		(0.11	)		0.13

Total from investment operations		0.09			0.25

Less distributions from:
Net investment income		(0.20	)		(0.12	)
Capital gains		(0.00	)		(0.04	)

Total distributions		(0.20	)		(0.16	)

Net asset value, end of period	$	10.85		$	10.96

Total return		0.90	%		2.32	%
Net assets, end of period (in millions)		$5			$2
Ratio of expenses to average net assets		2.03	%^⁽²⁾		1.86	%^⁽²⁾
Ratio of net investment income to average net assets		3.65	%^⁽²⁾		3.61	%^⁽²⁾
Portfolio turnover rate		100	%		57	%^⁽³⁾

(1)Commencement of operations of the class.
(2)Annualized.
(3)For the six months ended March 31, 2004.

See Notes to Financial Statements.

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

	For the six months ended 9-30-04			For the period from 12-8-03^⁽¹⁾ to 3-31-04

Net asset value, beginning of period	$	10.96		$	10.87

Income (loss) from investment operations:
Net investment income		0.25			0.15
Net realized and unrealized gain (loss) on investments		(0.11	)		0.13

Total from investment operations		0.14			0.28

Less distributions from:
Net investment income		(0.25	)		(0.15	)
Capital gains		(0.00	)		(0.04	)

Total distributions		(0.25	)		(0.19	)

Net asset value, end of period	$	10.85		$	10.96

Total return		1.34	%		2.56	%
Net assets, end of period (in millions)		$4			$3
Ratio of expenses to average net assets		1.12	%^⁽²⁾		1.09	%^⁽²⁾
Ratio of net investment income to average net assets		4.66	%^⁽²⁾		4.38	%^⁽²⁾
Portfolio turnover rate		100	%		57	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the six months ended March 31, 2004.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY PACIFIC OPPORTUNITIES FUND

Portfolio Highlights

On September 30, 2004, Ivy Pacific Opportunities Fund had net assets totaling $46,795,373 invested in a diversified portfolio of:

88.02%		Common Stocks
11.98%		Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2004,
your Fund was invested by geographic region and by industry, respectively, as follows:

Pacific Basin	$	76.38
Cash and Cash Equivalents	$	11.98
United States	$	5.18
Other	$	3.12
Canada	$	2.42
Europe	$	0.92

Financial Services Stocks	$	17.02
Multi-Industry Stocks	$	16.87
Technology Stocks	$	12.25
Cash and Cash Equivalents	$	11.98
Raw Materials Stocks	$	7.84
Consumer Nondurables Stocks	$	5.56
Consumer Services Stocks	$	4.54
Energy Stocks	$	3.58
Utilities Stocks	$	3.51
Business Equipment and Services Stocks	$	3.28
Retail Stocks	$	2.92
Shelter Stocks	$	2.85
Capital Goods Stocks	$	2.26
Consumer Durables Stocks	$	2.24
Transportation Stocks	$	2.07
Health Care Stocks	$	1.23

The Investments of Ivy Pacific Opportunities Fund
September 30, 2004
COMMON STOCKS	Shares		Value


Australia - 9.82%
Australia and New Zealand Banking Group Limited (A)	57,390	$	790,724
Foster's Group Limited (A)	112,840		386,636
iShares MSCI Australia Index Fund	94,320		1,371,413
News Corporation Limited (The) (A)	82,058		678,242
Novogen LTD (A)*	160,510		575,554
Westpac Banking Corporation (A)	61,740		792,965

			4,595,534

Bermuda - 2.03%
Li & Fung Limited (A)	150,000		215,437
Pacific Basin Shipping Limited (A)(B)*	1,700,000		735,756

			951,193

Canada - 2.42%
Sino-Forest Corporation, Class A (A)*	208,360		555,561
Sino-Forest Corporation, Class A (A)(B)*	217,000		578,598

			1,134,159

Cayman Islands - 1.09%
Tencent Holding Limited (A)(B)*	1,050,000		511,663


China - 10.98%
51job, Inc., ADR*	33,000		684,915
Aluminum Corporation of China Limited, H Shares (A)	922,000		597,081
Chaoda Modern Agriculture (Holdings) Limited (A)	1,000,000		333,414
China Pet & Chem Sinopec (A)	2,500,000		1,017,876
China Resources Power Holdings Company Limited (A)(B)	1,000,000		573,858
Huaneng Power International, Inc., H Shares (A)	300,000		242,367
Ping An Insurance (Group) Company of China, Ltd. (A)(B)*	330,500		485,275
Ports Design Limited (A)(B)	200,000		369,321
Shanghai Forte Land Co., Ltd., H Shares (A)	1,372,000		360,678
Wah Sang Gas Holdings Limited (A)*	736,000		15,101
Xinao Gas Holdings Limited (A)(B)*	900,000		458,766

			5,138,652

Hong Kong - 7.71%
ASM Pacific Technology Limited (A)	90,000		294,879
CITIC Pacific Limited (A)	100,000		257,114
Dah Sing Financial Holdings Limited (A)	70,000		500,442
Denway Motors Limited (A)	1,000,000		333,415
Hutchison Whampoa Limited, Ordinary Shares (A)	42,000		328,542
Johnson Electric Holdings Limited (A)	600,000		588,605
Lee & Man Paper Manufacturing Limited (A)(B)	400,000		305,203
Oriental Press Group Limited (A)	2,254,000		867,134
Oriental Press Group Limited (A)(B)	350,000		134,648

			3,609,982

India - 6.67%
Housing Development Finance Corporation Limited (A)	61,240		536,900
ITC Limited (A)	34,000		841,972
Infosys Technologies Limited (A)	17,200		634,547
Reliance Industries Limited (A)	55,000		620,261
Tata Consultancy Services (A)(B)*	21,699		485,028

			3,118,708

Indonesia - 3.34%
PT Astra International Tbk (A)	667,000		499,066
PT Bank Central Asia Tbk (A)	2,009,500		438,995
PT Bank Rakyat Indonesia (A)	2,122,500		475,273
PT Gudang Garam Tbk (A)	106,000		150,519

			1,563,853

Malaysia - 4.41%
AMMB Holdings Berhad (A)	444,100		385,666
Genting Berhad (A)	100,000		444,737
Malayan Banking Berhad (A)	151,400		438,263
Malaysia International Shipping Corporation Berhad (A)	130,300		438,905
Maxis Communications Berhad (A)	160,000		357,895

			2,065,466

Singapore - 5.43%
DBS Group Holdings Ltd (A)	100,000		949,893
Haw Par Corporation Limited (A)	2		6
Keppel Corporation Limited (A)	94,850		444,856
Keppel Land Limited (A)	591,000		666,647
Venture Corporation Limited (A)	49,000		479,993

			2,541,395

South Korea - 16.19%
Daelim Industrial Co., Ltd. (A)	10,910		468,993
Hana Bank (A)	35,510		844,962
Hanwha Chemical Corporation (A)	98,920		764,557
Hyundai Department Store Co., Ltd. (A)	14,760		416,587
Kookmin Bank (A)*	16,300		515,966
Korea Tobacco & Ginseng Corporation (A)	33,690		890,891
Korean Air Lines Co., Ltd. (A)*	38,650		528,647
LG Chem, Ltd. (A)*	24,150		916,504
Samsung Electronics Co., Ltd. (A)	5,600		2,227,356

			7,574,463

Taiwan - 8.38%
AU Optronics Corp., ADR	37,002		463,268
Formosa Plastics Corporation (A)	420,753		656,226
Hon Hai Precision Industry Co., Ltd. (A)	217,352		748,342
Ishares MSCI Taiwan Index Fund	49,920		534,144
Quanta Computer Inc. (A)	158,577		272,991
Realtek Semiconductor Corporation (A)	125,000		132,055
Sampo Corporation (A)	972,300		214,591
Taiwan Semiconductor Manufacturing Company Ltd. (A)	376,983		480,354
United Microelectronics Corporation (A)*	691,222		416,987

			3,918,958

Thailand - 3.45%
C.P. Seven Eleven Public Company Limited (A)	413,500		579,159
KASIKORNBANK PUBLIC COMPANY LIMITED (A)*	337,200		378,648
PTT Public Company Limited (A)	160,500		655,023

			1,612,830

United Kingdom - 0.92%
Standard Chartered PLC (A)	25,000		429,592


United States - 5.18%
iShares MSCI Pacific ex-Japan Index Fund	21,790		1,743,418
UTStarcom, Inc.*	42,150		679,669

			2,423,087


TOTAL COMMON STOCKS - 88.02%		$	41,189,535

(Cost: $39,001,164)


SHORT-TERM SECURITIES	Principal Amount in Thousands

Banks - 4.54%
Rabobank USA Financial Corp.,
1.87%, 10-1-04	$	2,123		2,123,000


Food and Related - 6.70%
Archer Daniels Midland Company:
1.77%, 10-5-04		1,638		1,637,678
1.77%, 10-19-04		1,500		1,498,672

				3,136,350


TOTAL SHORT-TERM SECURITIES - 11.24%			$	5,259,350

(Cost: $5,259,350)

TOTAL INVESTMENT SECURITIES - 99.26%			$	46,448,885

(Cost: $44,260,514)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.74%				346,488


NET ASSETS - 100.00%			$	46,795,373


Notes to Schedule of Investments
	*No dividends were paid during the preceding 12 months.
(A)	Listed on an exchange outside the United States.
(B)	Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2004, the total value of these securities amounted to $4,638,116 or 9.91% of net assets.
	See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
	See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
     IVY PACIFIC OPPORTUNITIES FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (cost - $44,261) (Notes 1 and 3)	$	46,449
Cash denominated in foreign currencies (cost - $744)		738
Receivables:
Fund shares sold		128
Dividends and interest		124
Prepaid and other assets		33

Total assets		47,472

LIABILITIES
Payable for investment securities purchased		462
Payable to Fund shareholders		56
Accrued management fee (Note 2)		37
Accrued shareholder servicing (Note 2)		25
Accrued service fee (Note 2)		9
Accrued distribution fee (Note 2)		5
Accrued accounting and administrative services fees (Note 2)		2
Due to custodian		2
Other		79

Total liabilities		677

Total net assets	$	46,795

NET ASSETS
Capital paid in	$	52,164
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(161	)
Accumulated undistributed net realized loss on investment transactions		(7,349	)
Net unrealized appreciation in value of investments		2,141

Net assets applicable to outstanding units of capital	$	46,795

Net asset value per share (net assets divided by shares outstanding):
Class A		$9.19
Class B		$8.62
Class C		$8.71
Class Y		$9.23
Advisor Class		$8.97
Capital shares outstanding:
Class A		4,043
Class B		613
Class C		426
Class Y		62
Advisor Class		6

See Notes to Financial Statements.

Statement of Operations
      IVY PACIFIC OPPORTUNITIES FUND
      For the Six Months Ended September 30, 2004
      (In Thousands)

INVESTMENT LOSS
Income (Note 1B):
Dividends (net of foreign withholding taxes of $31)	$	403
Interest and amortization		21

Total income		424

Expenses (Note 2):
Investment management fee		207
Shareholder servicing:
Class A		84
Class B		16
Class C		9
Class Y		1
Advisor Class		- -	*
Service fee:
Class A		33
Class B		6
Class C		4
Class Y		1
Custodian fees		41
Distribution fee:
Class A		8
Class B		19
Class C		11
Registration fees		33
Accounting and administrative services fees		15
Audit fees		10
Legal fees		6
Other		27

Total expenses		531

Net investment loss		(107	)

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		458
Realized net loss on foreign currency transactions		(52	)

Realized net gain on investments		406
Unrealized depreciation in value of investments during the period		(1,594	)

Net loss on investments		(1,188	)

Net decrease in net assets resulting from operations	$	(1,295	)

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Changes in Net Assets
IVY PACIFIC OPPORTUNITIES FUND
(In Thousands)

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the fiscal year ended 12-31-03

INCREASE IN NET ASSETS
Operations:
Net investment loss	$	(107	)	$	(104	)	$	(85	)
Realized net gain on investments		406			1,428			2,573
Unrealized appreciation (depreciation)		(1,594	)		(248	)		4,130

Net increase (decrease) in net assets resulting from operations		(1,295	)		1,076			6,618

Distributions to shareholders from net investment income (Note 1F):^⁽¹⁾
Class A		- -			- -			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -			- -
Advisor Class		- -			- -			- -

		- -			- -			- -

Capital share transactions (Note 5)		9,755			11,319			10,753

Total increase		8,460			12,395			17,371
NET ASSETS
Beginning of period		38,335			25,940			8,569

End of period	$	46,795		$	38,335		$	25,940

Undistributed net investment loss	$	(161	)	$	(24	)	$	(108	)

(1)See "Financial Highlights" on pages 176-180.

See Notes to Financial Statements.

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

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	9.55		$	9.11	��	$	5.96		$	6.72		$	7.42		$	9.15		$	6.30

Income (loss) from investment operations:
Net investment income (loss)		(0.02		)		0.00		(0.02		)		0.01	^⁽¹⁾	(0.03		)^⁽¹⁾		0.07			0.08
Net realized and unrealized gain (loss) on investments		(0.34		)		0.44			3.17		(0.77		)	(0.66		)	(1.74		)		2.86

Total from investment operations		(0.36		)		0.44			3.15		(0.76		)	(0.69		)	(1.67		)		2.94

Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.01		)	(0.06		)	(0.08		)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.01		)

Total distributions		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.01		)	(0.06		)	(0.09		)

Net asset value, end of period		$	9.19		$	9.55		$	9.11		$	5.96		$	6.72		$	7.42		$	9.15

Total return^⁽²⁾		- -3.77		%		4.83	%	52.85		%	- -11.31		%	- -9.29		%	- -18.25		%	46.72		%
Net assets, end of period (in millions)			$37			$29			$18			$5			$6			$9			$13
Ratio of expenses to average net assets including reimbursement			2.51	%^⁽³⁾		2.07	%^⁽³⁾		2.64	%		2.21	%		2.21	%		2.16	%		2.19	%
Ratio of net investment income (loss) to average net assets including reimbursement		- -0.36		%^⁽³⁾	- -1.07		%^⁽³⁾	- -0.39		%		0.20	%	- -0.49		%		0.83	%		1.01	%
Ratio of expenses to average net assets excluding reimbursement			NA			NA			2.73	%		3.52	%		3.57	%		3.10	%		2.84	%
Ratio of net investment income (loss) to average net assets excluding reimbursement			NA			NA		- -0.48		%	- -1.11		%	- -1.85		%	- -0.11		%		0.36	%
Portfolio turnover rate			37	%		61	%		187	%		16	%		82	%		108	%		23	%

(1)Based on average shares outstanding.

(2)Total return calculated without taking into account the sales load deducted on an initial purchase.

(3)Annualized.

See Notes to Financial Statements.

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

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	9.01		$	8.61		$	5.75		$	6.56		$	7.33		$	9.04		$	6.24

Income (loss) from investment operations:
Net investment income (loss)		(0.05		)	(0.04		)	(0.06		)	(0.04		)^⁽¹⁾	(0.08		)^⁽¹⁾		0.01		0.02
Net realized and unrealized gain (loss) on investments		(0.34		)	0.44				2.92		(0.77		)	(0.68		)	(1.71		)		2.81

Total from investment operations		(0.39		)	0.40				2.86		(0.81		)	(0.76		)	(1.70		)		2.83

Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.01		)	(0.01		)	(0.02		)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.01		)

Total distributions		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.01		)	(0.01		)	(0.03		)

Net asset value, end of period		$	8.62		$	9.01		$	8.61		$	5.75		$	6.56		$	7.33		$	9.04

Total return		- - 4.33		%		4.65	%	49.74		%	- -12.35		%	- -10.35		%	- -18.80		%	45.33		%
Net assets, end of period (in millions)			$5			$6			$6			$3			$4			$6			$8
Ratio of expenses to average net assets including reimbursement			3.31	%^⁽²⁾		2.86	%^⁽²⁾		3.46	%		2.96	%		2.95	%		2.92	%		2.97	%
Ratio of net investment income (loss) to average net assets including reimbursement		- -1.14		%^⁽²⁾	- -1.92		%^⁽²⁾	- -1.15		%	- -0.55		%	- -1.22		%		0.07	%		0.24	%
Ratio of expenses to average net assets excluding reimbursement			NA			NA			3.55	%		4.27	%		4.31	%		3.86	%		3.62	%
Ratio of net investment loss to average net assets excluding reimbursement			NA			NA		- -1.24		%	- -1.86		%	- -2.58		%	- -0.87		%	- -0.41		%
Portfolio turnover rate			37	%		61	%		187	%		16	%		82	%		108	%		23	%

(1)Based on average shares outstanding.

(2)Annualized.

See Notes to Financial Statements.

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

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	9.09		$	8.68		$	5.75		$	6.55		$	7.31		$	9.07		$	6.25

Income (loss) from investment operations:
Net investment income (loss)		(0.04		)	(0.02		)	(0.05		)	(0.03		)^⁽¹⁾	(0.08		)^⁽¹⁾		0.01			0.02
Net realized and unrealized gain (loss) on investments		(0.34		)		0.43			2.98		(0.77		)	(0.67		)	(1.71		)		2.82

Total from investment operations		(0.38		)		0.41			2.93		(0.80		)	(0.75		)	(1.70		)		2.84

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

Total distributions		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.01		)	(0.06		)	(0.02		)

Net asset value, end of period		$	8.71		$	9.09		$	8.68		$	5.75		$	6.55		$	7.31		$	9.07

Total return		- - 4.18		%		4.72	%	50.96		%	- -12.21		%	- -10.25		%	- -18.79		%	45.41		%
Net assets, end of period (in millions)			$4			$3			$2			$1			$1			$2			$1
Ratio of expenses to average net assets including reimbursement			3.47	%^⁽²⁾		2.57	%^⁽²⁾		3.48	%		2.94	%		2.90	%		3.03	%		3.03	%
Ratio of net investment income (loss) to average net assets including reimbursement		- -1.31		%^⁽²⁾	- -1.59		%^⁽²⁾	- -1.14		%	- -0.53		%	- -1.18		%	- -0.03		%		0.18	%
Ratio of expenses to average net assets excluding reimbursement			NA			NA			3.57	%		4.25	%		4.26	%		3.97	%		3.68	%
Ratio of net investment loss to average net assets excluding reimbursement			NA			NA		- -1.23		%	- -1.84		%	- -2.54		%	- -0.97		%	- -0.47		%
Portfolio turnover rate			37	%		61	%		187	%		16	%		82	%		108	%		23	%

(1)Based on average shares outstanding.

(2)Annualized.

See Notes to Financial Statements.

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

	For the six months ended 9-30-04				For the fiscal period ended 3-31-04			For the period from 7-24-03^⁽¹⁾to 12-31-03

Net asset value, beginning of period		$	9.58		$	9.13		$	6.85

Income (loss) from investment operations:
Net investment income (loss)			0.01		(0.00		)	(0.01		)
Net realized and unrealized gain (loss) on investments		(0.36		)		0.45			2.29

Total from investment operations		(0.35		)		0.45			2.28

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

Total distributions		(0.00		)	(0.00		)	(0.00		)

Net asset value, end of period		$	9.23		$	9.58		$	9.13

Total return		- -3.65		%	4.93		%	33.28		%
Net assets, end of period (in thousands)		$571			$707			$497
Ratio of expenses to average net assets including reimbursement			2.12	%^⁽²⁾	1.64		%^⁽²⁾	2.01		%^⁽²⁾
Ratio of net investment income (loss) to average net assets including reimbursement			0.07	%^⁽²⁾	- -0.68		%^⁽²⁾	- -0.40		%^⁽²⁾
Ratio of expenses to average net assets excluding reimbursement			2.28	%^⁽²⁾	NA			2.18		%^⁽²⁾
Ratio of net investment loss to average net assets excluding reimbursement		- -0.09		%^⁽²⁾	NA			- -0.57		%^⁽²⁾
Portfolio turnover rate			37	%	61		%	187		%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the 12 months ended December 31, 2003.

See Notes to Financial Statements.

Financial Highlights
     IVY PACIFIC OPPORTUNITIES FUND
      Advisor Class Shares^⁽¹⁾
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal period ended			For the fiscal year ended December 31,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	9.28		$	8.85		$	5.81		$	6.59		$	7.30		$	9.03		$	6.27

Income (loss) from investment operations:
Net investment income (loss)			0.02		(0.01		)	(0.01		)		0.04	^⁽²⁾	(0.02		)^⁽²⁾		0.12	^⁽²⁾		0.04
Net realized and unrealized gain (loss) on investments		(0.33		)		0.44			3.05		(0.82		)	(0.68		)	(1.82		)		2.86

Total from investment operations		(0.31		)		0.43			3.04		(0.78		)	(0.70		)	(1.70		)		2.90

Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.01		)	(0.03		)	(0.13		)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.01		)

Total distributions		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.01		)	(0.03		)	(0.14		)

Net asset value, end of period		$	8.97		$	9.28		$	8.85		$	5.81		$	6.59		$	7.30		$	9.03

Total return		- -3.34		%	4.86		%	52.32		%	- -11.84		%	- -9.58		%	- -18.77		%	46.29		%
Net assets, end of period (in thousands)		$56			$58			$55			$34			$3			$42			$313
Ratio of expenses to average net assets including reimbursement		1.71		%^⁽³⁾	1.82		%^⁽³⁾	2.49		%	1.74		%	2.03		%	1.77		%	1.79		%
Ratio of net investment income (loss) to average net assets including reimbursement		0.47		%^⁽³⁾	- -0.88		%^⁽³⁾	- -0.09		%	0.67		%	- -0.31		%	1.23		%	1.42		%
Ratio of expenses to average net assets excluding reimbursement		NA			NA			2.65		%	3.05		%	3.39		%	2.71		%	2.44		%
Ratio of net investment income (loss) to average net assets excluding reimbursement		NA			NA			- -0.25		%	- -0.64		%	- -1.67		%	0.29		%	0.77		%
Portfolio turnover rate			37	%	61		%	187		%	16		%	82		%	108		%	23		%

(1)See Note 5 to financial statements.

(2)Based on average shares outstanding.

(3)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY REAL ESTATE SECURITIES FUND

Portfolio Highlights

On September 30, 2004, Ivy Real Estate Securities Fund had net assets totaling $198,391,599 invested in a diversified portfolio of:

96.41%		Common Stocks
3.12%		Cash and Cash Equivalents
0.47%		Preferred Stocks

As a shareholder of the Fund, for every $100 you had invested on September 30, 2004,
your Fund owned:

Shelter Stocks	$	80.87
Consumer Services Stocks	$	8.88
Business Equipment and Services Stocks	$	3.36
Cash and Cash Equivalents	$	3.12
Preferred Stocks	$	2.28
Retail Stocks	$	1.02
Health Care Stocks	$	0.47

The Investments of Ivy Real Estate Securities Fund
September 30, 2004
COMMON STOCKS	Shares		Value


Business Equipment and Services - 3.36%
Brookfield Properties Corporation	206,400	$	6,658,464


Homebuilders, Mobile Homes - 0.47%
WCI Communities, Inc.*	40,100		934,330


Hotels and Gaming - 8.88%
Fairmont Hotels & Resorts Inc.	83,900		2,292,148
Hilton Hotels Corporation	380,100		7,161,084
Starwood Hotels & Resorts Worldwide, Inc.	175,800		8,160,636

			17,613,868

Multiple Industry - 2.28%
Boardwalk Real Estate Investment Trust (A)	335,740		4,515,847


Real Estate Investment Trust - 80.40%
Affordable Residential Communities Inc.	31,100		454,060
Alexandria Real Estate Equities, Inc.	57,200		3,759,184
American Campus Communities, Inc.*	194,100		3,602,496
AvalonBay Communities, Inc.	10,800		650,376
BRE Properties, Inc., Class A	44,200		1,695,070
Biomed Realty Trust, Inc.*	247,800		4,358,802
Boston Properties, Inc.	119,600		6,624,644
Brandywine Realty Trust	190,800		5,433,984
CBL & Associates Properties, Inc.	32,200		1,962,590
Camden Property Trust	31,600		1,459,920
Capital Automotive REIT	40,400		1,263,510
CarrAmerica Realty Corporation	62,700		2,050,290
Colonial Properties Trust	24,300		977,346
Cousins Properties Incorporated	119,600		4,103,476
Developers Diversified Realty Corporation	173,500		6,792,525
Entertainment Properties Trust	54,500		2,060,100
Equity One, Inc.	206,700		4,055,454
Equity Residential	179,300		5,558,300
Essex Property Trust, Inc.	11,668		838,346
Extra Space Storage Inc.	233,000		2,970,750
First Potomac Realty Trust	143,500		2,964,710
General Growth Properties, Inc.	234,800		7,278,800
Global Signal Inc.	31,500		721,350
Gramercy Capital Corp.*	168,800		2,633,280
Hersha Hospitality Trust	251,800		2,366,920
Home Properties, Inc.	37,200		1,471,632
Host Marriott Corporation*	159,700		2,240,591
Kimco Realty Corporation	103,950		5,332,635
Kite Realty Group Trust*	268,500		3,530,775
LTC Properties, Inc.	78,900		1,411,521
Liberty Property Trust	56,400		2,246,976
Mack-Cali Realty Corporation	24,800		1,098,640
Maguire Properties, Inc.	43,900		1,067,209
Mills Corporation (The)	169,600		8,797,152
Newcastle Investment Corp.	62,600		1,921,820
Omega Healthcare Investors, Inc.	82,700		889,852
PS Business Parks, Inc.	89,300		3,558,605
Prentiss Properties Trust	121,600		4,377,600
ProLogis	334,162		11,775,869
Regency Centers Corporation	18,700		869,363
Rouse Company (The)	76,400		5,109,632
Simon Property Group, Inc.	109,400		5,867,122
Spirit Finance Corporation (B)*	70,700		707,000
Strategic Hotel Capital, L.L.C.*	300,100		4,057,352
Tanger Factory Outlet Centers, Inc.	83,800		3,752,564
United Dominion Realty Trust, Inc.	314,600		6,238,518
Ventas, Inc.	117,800		3,053,376
Winston Hotels, Inc.	327,300		3,502,110

			159,514,197

Retail - Specialty Stores - 1.02%
Forest City Enterprises, Inc., Class A	36,800		2,027,680


TOTAL COMMON STOCKS - 96.41%		$	191,264,386

(Cost: $161,102,016)


PREFERRED STOCKS - 0.47%


Real Estate Investment Trust
LaSalle Hotel Properties, 8.375% Cumulative	9,500		247,000
PS Business Parks, Inc., 7% Cumulative*	17,400		426,300
Winston Hotels, Inc., 8% Cumulative*	10,500		261,450

(Cost: $935,000)		$	934,750


TOTAL SHORT-TERM SECURITIES - 3.82%		$	7,571,492

(Cost: $7,571,492)

TOTAL INVESTMENT SECURITIES - 100.70%		$	199,770,628

(Cost: $169,608,508)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.70%)			(1,379,029	)


NET ASSETS - 100.00%		$	198,391,599

Notes to Schedule of Investments
	*No dividends were paid during the preceding 12 months.
(A)	Listed on an exchange outside the United States.
(B)	Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2004, the total value of this security amounted to 0.36% of net assets.
	See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
	See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities
      IVY REAL ESTATE SECURITIES FUND
      September 30, 2004
      (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $169,609) (Notes 1 and 3)	$	199,771
Receivables:
Investment securities sold		2,289
Fund shares sold		1,437
Dividends and interest		762
Prepaid and other assets		27

Total assets		204,286

LIABILITIES
Payable for investment securities purchased		5,354
Payable to Fund shareholders		257
Accrued management fee (Note 2)		139
Accrued shareholder servicing (Note 2)		40
Accrued service fee (Note 2)		39
Due to custodian		20
Accrued accounting and administrative services fees (Note 2)		6
Accrued distribution fee (Note 2)		6
Other		33

Total liabilities		5,894

Total net assets	$	198,392

NET ASSETS
Capital paid in	$	161,612
Accumulated undistributed income:
Accumulated undistributed net investment income		116
Accumulated undistributed net realized gain on investment transactions		6,502
Net unrealized appreciation in value of investments		30,162

Net assets applicable to outstanding units of capital	$	198,392

Net asset value per share (net assets divided by shares outstanding):
Class A		$17.24
Class B		$17.21
Class C		$17.24
Class Y		$17.25
Capital shares outstanding:
Class A		4,654
Class B		272
Class C		325
Class Y		6,255

See Notes to Financial Statements.

Statement of Operations
      IVY REAL ESTATE SECURITIES FUND
      For the Six Months Ended September 30, 2004
      (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $26)	$	3,458
Interest and amortization		34

Total income		3,492

Expenses (Note 2):
Investment management fee		681
Shareholder servicing:
Class A		105
Class B		11
Class C		8
Class Y		66
Service fee:
Class A		62
Class B		4
Class C		4
Class Y		110
Accounting and administrative services fees		33
Distribution fee:
Class A		9
Class B		11
Class C		13
Custodian fees		14
Audit fees		13
Legal fees		9
Other		84

Total expenses		1,237

Net investment income		2,255

REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		2,910
Realized net gain on foreign currency transactions		3

Realized net gain on investments		2,913
Unrealized appreciation in value of investments during the period		455

Net gain on investments		3,368

Net increase in net assets resulting from operations	$	5,623

See Notes to Financial Statements.

Statement of Changes in Net Assets
IVY REAL ESTATE SECURITIES FUND
(In Thousands)

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the fiscal year ended 7-31-03

INCREASE IN NET ASSETS
Operations:
Net investment income	$	2,255		$	1,534		$	1,259
Realized net gain on investments		2,913			4,501			244
Unrealized appreciation		455			18,481			8,144

Net increase in net assets resulting from operations		5,623			24,516			9,647

Distributions to shareholders from (Note 1F):^⁽¹⁾
Net investment income:
Class A		(315	)		(542	)		(1,712	)
Class B		- -			- -	*		(57	)
Class C		(4	)		(1	)		- -
Class Y		(552	)		(848	)		N/A
Realized gains on investment transactions:
Class A		- -			(262	)		(765	)
Class B		- -			- -	*		(31	)
Class C		- -			(1	)		- -
Class Y		- -			(826	)		N/A

		(871	)		(2,480	)		(2,565	)

Capital share transactions (Note 5)		54,996			54,223			21,903

Total increase		59,748			76,259			28,985
NET ASSETS
Beginning of period		138,644			62,385			33,400

End of period	$	198,392		$	138,644		$	62,385

Undistributed net investment income (loss)	$	116			($152	)	$	- -

*Not shown due to rounding.

(1)See "Financial Highlights" on pages 188-191.

See Notes to Financial Statements.

Financial Highlights
      IVY REAL ESTATE SECURITIES FUND
      Class A Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal period ended			For the fiscal year ended July 31,											For the period from 2-25-99^⁽¹⁾ to
	9-30-04				3-31-04			2003			2002			2001			2000		7-31-99

Net asset value, beginning of period		$	16.99		$	13.42		$	11.93		$	11.67		$	11.23		$	10.25		$	10.02

Income from investment operations:
Net investment income			0.02			0.62			0.48			0.32			0.51			0.43			0.18
Net realized and unrealized gain on investments			0.31			3.38			1.72			1.01			0.47			1.00			0.31

Total from investment operations			0.33			4.00			2.20			1.33			0.98			1.43			0.49

Less distributions from:
Net investment income			(0.08	)		(0.24	)		(0.48	)		(0.28	)		(0.54	)		(0.41	)		(0.26	)
Capital gains			(0.00	)		(0.19	)		(0.23	)		(0.79	)		(0.00	)		(0.04	)		(0.00	)

Total distributions			(0.08	)		(0.43	)		(0.71	)		(1.07	)		(0.54	)		(0.45	)		(0.26	)

Net asset value, end of period		$	17.24		$	16.99		$	13.42		$	11.93		$	11.67		$	11.23		$	10.25

Total return^⁽²⁾			1.96	%		29.78	%		19.65	%		12.31	%		9.10	%		14.89	%		4.78	%
Net assets, end of period (in millions)			$80			$44			$60			$32			$17			$12			$6
Ratio of expenses to average net assets including voluntary expense waiver			1.75	%^⁽³⁾		1.48	%^{^(3,4)}		1.46	%		1.50	%		1.50	%		1.50	%		1.50	%^⁽³⁾
Ratio of net investment income to average net assets including voluntary expense waiver			2.89	%^⁽³⁾		4.35	%^{^(3,4)}		2.95	%		2.83	%		4.29	%		4.26	%		4.09	%^⁽³⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			NA			1.49	%^{^(3,4)}		1.46	%		1.69	%		1.99	%		2.72	%		3.49	%^⁽³⁾
Ratio of net investment income to average net assets excluding voluntary expense waiver			NA			4.34	%^{^(3,4)}		2.95	%		2.64	%		3.81	%		3.04	%		2.10	%^⁽³⁾
Portfolio turnover rate			37	%		35	%		48	%		101	%		173	%		117	%		52	%

(1)Commencement of operations of the class.

(2)Total return calculated without taking into account the sales load deducted on an initial purchase.

(3)Annualized.

(4)In connection with the reorganization plan described in Note 8, Class B and Class C shares of the predecessor Advantus Fund were exchanged into Class A shares at the time of the merger. The ratios shown above reflect a blended rate that includes the effect of income and expenses for those Class B and Class C shares from August 1, 2003 up to the time of merger. Actual expenses that applied to Class A shareholders were lower than shown above.

See Notes to Financial Statements.

Financial Highlights
      IVY REAL ESTATE SECURITIES FUND
      Class B Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:



Net asset value, beginning of period	$	16.97		$	15.18

Income from investment operations:
Net investment income		0.15			0.07
Net realized and unrealized gain on investments		0.09			2.08

Total from investment operations		0.24			2.15

Less distributions from:
Net investment income		(0.00	)		(0.17	)
Capital gains		(0.00	)		(0.19	)

Total distributions		(0.00	)		(0.36	)

Net asset value, end of period	$	17.21		$	16.97

Total return		1.42	%		14.46	%
Net assets, end of period (in millions)	$5			$2
Ratio of expenses to average net assets		2.90	%^⁽²⁾		3.02	%^⁽²⁾
Ratio of net investment income (loss) to average net assets		1.79	%^⁽²⁾		- -5.40	%^⁽²⁾
Portfolio turnover rate		37	%		35	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the eight months ended March 31, 2004.

See Notes to Financial Statements.

Financial Highlights
     IVY REAL ESTATE SECURITIES FUND
      Class C Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:



Net asset value, beginning of period	$	16.99		$	15.18

Income from investment operations:
Net investment income		0.16			0.08
Net realized and unrealized gain on investments		0.10			2.09

Total from investment operations		0.26			2.17

Less distributions from:
Net investment income		(0.01	)		(0.17	)
Capital gains		(0.00	)		(0.19	)

Total distributions		(0.01	)		(0.36	)

Net asset value, end of period	$	17.24		$	16.99

Total return		1.55	%		14.59	%
Net assets, end of period (in millions)	$5			$2
Ratio of expenses to average net assets		2.61	%^⁽²⁾		2.82	%^⁽²⁾
Ratio of net investment income (loss) to average net assets		2.07	%^⁽²⁾		- - 4.46	%^⁽²⁾
Portfolio turnover rate		37	%		35	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the eight months ended March 31, 2004.

See Notes to Financial Statements.

Financial Highlights
     IVY REAL ESTATE SECURITIES FUND
      Class Y Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:



Net asset value, beginning of period	$	16.99		$	15.18

Income from investment operations:
Net investment income		0.25			0.04
Net realized and unrealized gain on investments		0.11			2.15

Total from investment operations		0.36			2.19

Less distributions from:
Net investment income		(0.10	)		(0.19	)
Capital gains		(0.00	)		(0.19	)

Total distributions		(0.10	)		(0.38	)

Net asset value, end of period	$	17.25		$	16.99

Total return		2.11	%		14.78	%
Net assets, end of period (in millions)	$108			$91
Ratio of expenses to average net assets		1.48	%^⁽²⁾		1.60	%^⁽²⁾
Ratio of net investment income to average net assets		3.11	%^⁽²⁾		0.14	%^⁽²⁾
Portfolio turnover rate		37	%		35	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the eight months ended March 31, 2004.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY SMALL CAP VALUE FUND

Portfolio Highlights

On September 30, 2004, Ivy Small Cap Value Fund had net assets totaling $115,549,338 invested in a diversified portfolio of:

95.12%		Common Stocks
4.88%		Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2004,
your Fund owned:

Technology Stocks	$	17.08
Capital Goods Stocks	$	14.51
Raw Materials Stocks	$	7.38
Energy Stocks	$	7.07
Retail Stocks	$	6.74
Financial Services Stocks	$	6.62
Business Equipment and Services Stocks	$	6.19
Health Care Stocks	$	5.69
Consumer Services Stocks	$	5.51
Cash and Cash Equivalents	$	4.88
Transportation Stocks	$	4.44
Multi-Industry Stocks	$	4.25
Consumer Nondurables Stocks	$	3.77
Shelter Stocks	$	2.80
Consumer Durables Stocks	$	1.66
Utilities Stocks	$	1.41

The Investments of Ivy Small Cap Value Fund
September 30, 2004
COMMON STOCKS	Shares		Value


Air Transportation - 1.64%
Alaska Air Group, Inc.*	16,200	$	401,436
EGL, Inc.*	29,300		887,058
Mesa Air Group, Inc.*	56,500		289,280
SkyWest, Inc.	20,800		313,768

			1,891,542

Aircraft - 1.52%
AAR CORP.*	44,300		551,535
HEICO Corporation	21,500		380,120
HEICO Corporation, Class A	1,510		20,355
Herley Industries, Inc.*	14,900		277,959
Triumph Group, Inc.*	15,700		531,131

			1,761,100

Apparel - 1.25%
OshKosh B'Gosh, Inc., Class A	17,745		360,135
Payless ShoeSource, Inc.*	67,500		683,775
Russell Corporation	23,900		402,476

			1,446,386

Banks - 0.79%
First Niagara Financial Group, Inc.	27,900		374,139
Sterling Bancshares, Inc.	40,000		537,400

			911,539

Broadcasting - 0.95%
Entercom Communications Corp.*	11,000		359,260
Gray Television, Inc.	23,100		274,890
LIN TV Corp., Class A*	23,600		459,728

			1,093,878

Business Equipment and Services - 5.25%
Carreker Corporation*	38,000		288,610
Excel Technology, Inc.*	12,200		313,967
Heidrick & Struggles International, Inc.*	30,200		869,609
John H. Harland Company	18,500		579,975
Learning Tree International, Inc.*	25,200		355,824
NCO Group, Inc.*	21,000		565,215
Perot Systems Corporation, Class A*	38,200		613,492
ProQuest Company*	13,300		341,810
PTEK Holdings, Inc.*	80,000		684,000
StarTek, Inc.	6,800		213,248
Stewart Enterprises, Inc., Class A*	119,800		830,813
Tetra Tech, Inc.*	24,200		307,098
Viad Corp	4,225		100,259

			6,063,920

Capital Equipment - 7.24%
Esterline Technologies Corporation*	17,600		538,384
Flowserve Corporation*	21,300		515,034
GrafTech International Ltd.*	56,500		788,175
Helix Technology Corporation	22,000		298,870
JLG Industries, Inc.	49,900		838,320
Joy Global Inc.	23,600		811,840
Kadant Inc.*	26,700		490,212
Manitowoc Company, Inc. (The)	20,800		737,568
Maverick Tube Corporation*	27,300		841,113
Regal-Beloit Corporation	17,000		411,230
Stewart & Stevenson Services, Inc.	26,300		464,721
Terex Corporation*	14,500		629,300
Valmont Industries, Inc.	22,400		467,488
Watts Water Technologies, Inc., Class A	19,800		531,630

			8,363,885

Chemicals - Petroleum and Inorganic - 1.37%
Agrium Inc.	71,300		1,266,288
Tredegar Corporation	17,200		313,040

			1,579,328

Chemicals - Specialty - 3.01%
Cambrex Corporation	23,400		513,630
Ferro Corporation	22,400		488,544
IMC Global Inc.*	26,900		467,791
Millennium Chemicals Inc.*	35,600		755,076
Minerals Technologies Inc.	4,800		282,528
OM Group, Inc.*	3,500		127,960
OMNOVA Solutions Inc.*	88,000		530,640
SPARTECH Corporation	12,500		313,750

			3,479,919

Coal - 1.10%
Massey Energy Company	17,300		500,489
Peabody Energy Corporation	13,000		773,500

			1,273,989

Communications Equipment - 2.66%
Advanced Fibre Communications, Inc.*	8,200		130,339
Anaren, Inc.*	27,500		368,362
Andrew Corporation*	52,600		643,561
Anixter International Inc.*	9,200		322,828
Belden CDT Inc.*	23,300		507,940
CommScope, Inc.*	29,300		632,880
Dycom Industries, Inc.*	16,300		462,757

			3,068,667

Computers - Main and Mini - 0.19%
Silicon Graphics, Inc.*	153,300		219,219


Computers - Peripherals - 2.94%
Actel Corporation*	19,900		301,087
Ascential Software Corporation*	13,700		184,745
Aspen Technology, Inc.*	69,400		484,065
Electronics for Imaging, Inc.*	27,800		452,306
Gerber Scientific, Inc.*	400		2,636
Inet Technologies, Inc.*	44,600		561,514
Keane, Inc.*	19,300		296,448
Mentor Graphics Corporation*	42,200		462,301
MRO Software, Inc.*	19,900		198,204
NMS Communications Corporation*	51,400		250,318
SimpleTech, Inc.*	56,200		203,444

			3,397,068

Construction Materials - 2.50%
Insituform Technologies, Inc., Class A*	20,400		380,664
Jacuzzi Brands, Inc.*	40,600		377,580
Martin Marietta Materials, Inc.	23,600		1,068,372
Trex Company, Inc.*	6,900		305,532
Walter Industries, Inc.	47,300		757,746

			2,889,894

Containers - 0.91%
Anchor Glass Container Corporation	44,300		365,032
Packaging Corporation of America	28,300		692,501

			1,057,533

Cosmetics and Toiletries - 0.39%
Playtex Products, Inc.*	71,900		452,970


Defense - 1.02%
Alliant Techsystems Inc.*	8,900		538,450
Teledyne Technologies Incorporated*	25,500		638,520

			1,176,970

Electrical Equipment - 0.88%
Acuity Brands, Inc.	14,500		344,665
C&D Technologies, Inc.	2,900		55,158
Federal Signal Corporation	16,800		312,144
Integrated Electrical Services, Inc.*	64,300		309,283

			1,021,250

Electronic Components - 4.73%
ATMI, Inc.*	23,600		483,446
AVX Corporation	19,400		229,890
Avnet, Inc.*	17,300		296,176
Brooks Automation, Inc.*	38,500		543,428
Cypress Semiconductor Corporation*	54,100		478,244
Hutchinson Technology Incorporated*	13,300		355,642
IXYS Corporation*	58,700		418,824
KEMET Corporation*	84,500		683,605
MKS Instruments, Inc.*	32,000		490,880
STATS ChipPAC Ltd., ADR*	16,982		101,552
Thomas & Betts Corporation	18,100		485,442
TriQuint Semiconductor, Inc.*	52,200		203,319
Varian Semiconductor Equipment Associates, Inc.*	22,300		690,519

			5,460,967

Electronic Instruments - 4.02%
BEI Technologies, Inc.	5,800		159,413
Benchmark Electronics, Inc.*	7,800		232,440
LeCroy Corporation*	20,200		336,027
Roper Industries, Inc.	14,400		827,424
Technitrol, Inc.*	84,000		1,638,000
Veeco Instruments Inc.*	68,900		1,447,245

			4,640,549

Farm Machinery - 1.43%
AGCO Corporation*	34,300		775,866
Navistar International Corporation*	23,600		877,684

			1,653,550

Finance Companies - 2.08%
American Capital Strategies, Ltd.	24,800		776,612
GATX Corporation	33,000		879,780
MCG Capital Corporation	28,300		492,420
Medallion Financial Corp.	28,700		260,309

			2,409,121

Food and Related - 0.89%
American Italian Pasta Company, Class A	13,100		342,565
Chiquita Brands International, Inc.*	5,400		94,014
Sensient Technologies Corporation	27,100		586,444

			1,023,023

Forest and Paper Products - 0.54%
Caraustar Industries, Inc.*	37,300		627,573


Furniture and Furnishings - 0.85%
La-Z-Boy Incorporated	39,700		602,646
Steelcase Inc.	27,500		385,000

			987,646

Health Care - Drugs - 1.83%
Albany Molecular Research, Inc.*	38,600		371,332
InterMune, Inc.*	30,500		361,578
Priority Healthcare Corporation, Class B*	25,700		519,012
Valeant Pharmaceuticals International	35,800		863,496

			2,115,418

Health Care - General - 1.83%
Hanger Orthopedic Group, Inc.*	28,500		142,785
Hooper Holmes, Inc.	107,200		480,256
ICU Medical, Inc.*	11,700		304,141
STERIS Corporation*	20,800		456,352
SurModics, Inc.*	15,200		360,924
VIASYS Healthcare Inc.*	22,400		374,752

			2,119,210

Homebuilders, Mobile Homes - 0.20%
Champion Enterprises, Inc.*	22,900		235,641


Hospital Supply and Management - 2.03%
Cytyc Corporation*	16,500		398,393
LifePoint Hospitals, Inc.*	18,800		562,590
Province Healthcare Company*	39,700		830,524
RehabCare Group, Inc.*	23,900		550,417

			2,341,924

Hotels and Gaming - 1.91%
Argosy Gaming Company*	29,600		1,160,320
Boyd Gaming Corporation	21,700		610,855
Penn National Gaming, Inc.*	10,900		440,524

			2,211,699

Household - General Products - 0.33%
Tupperware Corporation	22,400		380,352


Insurance - Life - 0.40%
AmerUs Group Co.	11,400		467,400


Insurance - Property and Casualty - 2.19%
Harleysville Group Inc.	29,900		619,378
Hub International Limited	21,300		385,104
Odyssey Re Holdings Corp.	23,400		519,012
Ohio Casualty Corporation*	30,500		638,212
United National Group, Ltd., Class A*	24,900		364,785

			2,526,491

Leisure Time Industry - 1.23%
Callaway Golf Company	30,700		324,499
Pinnacle Entertainment, Inc.*	38,900		536,820
Steiner Leisure Limited*	20,300		448,528
Steinway Musical Instruments, Inc.*	4,020		109,344

			1,419,191

Metal Fabrication - 1.85%
Ladish Co., Inc.*	45,201		412,685
RTI International Metals, Inc.*	22,200		430,014
Titanium Metals Corporation*	7,750		181,815
Trinity Industries, Inc.	35,700		1,112,769

			2,137,283

Mining - 0.99%
Compass Minerals International, Inc.	23,100		512,820
Phelps Dodge Corporation	6,900		635,007
			1,147,827

Motor Vehicle Parts - 1.10%
American Axle & Manufacturing Holdings, Inc.	6,400		187,264
Apogee Enterprises, Inc.	30,800		396,396
BorgWarner Inc.	12,700		549,783
Tower Automotive, Inc.*	66,100		138,149

			1,271,592

Multiple Industry - 4.25%
Assured Guaranty Ltd.	22,700		378,182
iShares Russell 2000 Index Fund	35,233		4,017,267
MoneyGram International, Inc.	17,300		295,484
Platinum Underwriters Holdings, Ltd.	7,700		225,456

			4,916,389

Non-Residential Construction - 0.61%
Comfort Systems USA, Inc.*	38,900		256,740
ElkCorp	16,000		444,160

			700,900

Petroleum - Domestic - 1.17%
Cabot Oil & Gas Corporation	15,800		709,420
Spinnaker Exploration Company*	7,700		269,808
Stone Energy Corporation*	8,400		367,584

			1,346,812

Petroleum - International - 0.56%
Vintage Petroleum, Inc.	32,100		644,247


Petroleum - Services - 4.24%
Atwood Oceanics, Inc.*	12,600		599,004
Core Laboratories N.V.*	21,200		521,308
Global Industries, Ltd.*	89,100		549,747
Grey Wolf, Inc.*	112,000		547,680
Hanover Compressor Company*	69,900		940,155
Newpark Resources, Inc.*	69,200		415,200
Veritas DGC Inc.*	25,100		571,778
W-H Energy Services, Inc.*	36,400		755,300

			4,900,172

Publishing - 1.42%
Hollinger International Inc.	8,400		145,236
Journal Register Company*	30,200		570,780
Reader's Digest Association Inc. (The), Class A	63,200		922,088

			1,638,104

Railroad - 1.52%
RailAmerica, Inc.*	29,200		322,660
Westinghouse Air Brake Technologies Corporation	76,900		1,437,261

			1,759,921

Real Estate Investment Trust - 1.21%
Heritage Property Investment Trust, Inc.	14,600		425,882
Highland Hospitality Corporation	18,900		215,460
Lexington Corporation Properties Trust	9,100		197,561
Rayonier Inc.	8,138		368,163
Reckson Associates Realty Corp.	6,600		189,750

			1,396,816

Restaurants - 1.59%
CKE Restaurants, Inc.*	39,500		436,475
California Pizza Kitchen, Inc.*	22,500		491,513
O'Charley's Inc.*	25,700		417,368
Papa John's International, Inc.*	12,100		371,651
Ryans Restaurant Group, Inc.*	8,400		124,446

			1,841,453

Retail - Food Stores - 0.66%
Longs Drug Stores Corporation	31,400		759,880


Retail - General Merchandise - 1.09%
BJ's Wholesale Club, Inc.*	22,600		617,884
Dillard's, Inc., Class A	9,600		189,504
Wild Oats Markets, Inc.*	51,900		449,194

			1,256,582

Retail - Specialty Stores - 3.40%
American Eagle Outfitters, Inc.*	8,600		316,781
Barnes & Noble, Inc.*	6,300		233,100
CSK Auto Corporation*	18,900		251,748
Charming Shoppes, Inc.*	72,900		521,600
Christopher & Banks Corporation	28,400		454,684
Furniture Brands International, Inc.	14,300		358,644
Genesco Inc.*	4,400		103,620
Hancock Fabrics, Inc.	29,000		347,420
Hollywood Entertainment Corporation*	46,700		461,629
Too, Inc.*	32,900		594,503
Tweeter Home Entertainment Group, Inc.*	50,100		282,814

			3,926,543

Security and Commodity Brokers - 1.16%
Affiliated Managers Group, Inc.*	7,400		396,196
A.G. Edwards, Inc.	11,700		405,054
Fidelity National Financial, Inc.	10,638		405,308
SWS Group, Inc.	8,200		131,856

			1,338,414

Steel - 2.01%
Allegheny Technologies Incorporated	54,300		990,975
NS Group, Inc.*	26,100		482,850
United States Steel Corporation	22,600		850,212

			2,324,037

Timesharing and Software - 0.94%
CIBER, Inc.*	59,700		448,944
EarthLink, Inc.*	55,100		567,806
Pegasystems Inc.*	9,600		67,344

			1,084,094

Tires and Rubber Products - 0.56%
Cooper Tire & Rubber Company	32,300		651,491


Trucking and Shipping - 1.28%
Kirby Corporation*	11,500		461,725
OMI Corporation	63,300		1,014,066

			1,475,791

Utilities - Electric - 0.50%
Hawaiian Electric Industries, Inc.	6,000		159,240
Westar Energy, Inc.	20,900		422,180

			581,420

Utilities - Gas and Pipeline - 0.58%
NUI Corporation	23,600		314,824
UGI Corporation	9,400		350,244

			665,068

Utilities - Telephone - 0.33%
American Tower Corporation, Class A*	24,800		380,680


TOTAL COMMON STOCKS - 95.12%		$	109,914,328

(Cost: $93,589,131)

TOTAL SHORT-TERM SECURITIES - 4.52%		$	5,218,569

(Cost: $5,218,569)

TOTAL INVESTMENT SECURITIES - 99.64%		$	115,132,897

(Cost: $98,807,700)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.36%			416,441


NET ASSETS - 100.00%		$	115,549,338

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

Statement of Assets and Liabilities
      IVY SMALL CAP VALUE FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (cost - $98,808) (Notes 1 and 3)		$	115,133
Cash			1
Receivables:
Fund shares sold			616
Investment securities sold			98
Dividends and interest			82
Prepaid and other assets			24

Total assets			115,954

LIABILITIES
Payable for investment securities purchased			142
Payable to Fund shareholders			88
Accrued management fee (Note 2)			78
Accrued shareholder servicing (Note 2)			30
Accrued service fee (Note 2)			23
Accrued accounting and administrative services fees (Note 2)			5
Accrued distribution fee (Note 2)			4
Other			35

Total liabilities	��		405

Total net assets		$	115,549

NET ASSETS
Capital paid in		$	94,626
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss			(479	)
Accumulated undistributed net realized gain on investment transactions			5,077
Net unrealized appreciation in value of investments			16,325

Net assets applicable to outstanding units of capital		$	115,549

Net asset value per share (net assets divided by shares outstanding):
Class A			$16.35
Class B			$16.17
Class C			$16.22
Class Y			$16.36
Capital shares outstanding:
Class A			5,064
Class B			175
Class C			285
Class Y			1,548

See Notes to Financial Statements

Statement of Operations
      IVY SMALL CAP VALUE FUND
      For the Six Months Ended September 30, 2004
      (In Thousands)

INVESTMENT LOSS
Income (Note 1B):
Dividends (net of foreign withholding taxes of $1)	$	374
Interest and amortization		33

Total income		407

Expenses (Note 2):
Investment management fee		439
Shareholder servicing:
Class A		100
Class B		9
Class C		9
Class Y		22
Service fee:
Class A		85
Class B		2
Class C		4
Class Y		33
Custodian fees		39
Accounting and administrative services fees		29
Distribution fee:
Class A		5
Class B		7
Class C		12
Audit fees		11
Legal fees		7
Other		72

Total expenses		885

Net investment loss		(478	)

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		3,080
Unrealized depreciation in value of investments during the period		(4,381	)

Net loss on investments		(1,301	)

Net decrease in net assets resulting from operations	$	(1,779	)

See Notes to Financial Statements

Statement of Changes in Net Assets
IVY SMALL CAP VALUE FUND
(In Thousands)

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the fiscal year ended 7-31-03

INCREASE IN NET ASSETS
Operations:
Net investment loss	$	(478	)	$	(382	)	$	(494	)
Realized net gain (loss) on investments		3,080			5,963			(2,980	)
Unrealized appreciation (depreciation)		(4,381	)		12,506			11,321

Net increase (decrease) in net assets resulting from operations		(1,779	)		18,087			7,847

Distributions to shareholders from (Note 1F):^⁽¹⁾
Net investment income:
Class A		- -			- -			(9	)
Class B		- -			- -			(1	)
Class C		- -			- -			(1	)
Class Y		- -			- -			N/A
Realized gains on investment transactions:
Class A		- -			(75	)		(3,990	)
Class B		- -			- -	*		(345	)
Class C		- -			- -	*		(400	)
Class Y		- -			(30	)		N/A

		- -			(105	)		(4,746	)

Capital share transactions (Note 5)		24,421			9,597			3,148

Total increase		22,642			27,579			6,249
NET ASSETS
Beginning of period		92,907			65,328			59,079

End of period	$	115,549		$	92,907		$	65,328

Undistributed net investment income (loss)	$	(479	)	$	(1	)	$	- -

*Not shown due to rounding.

(1)See "Financial Highlights" on pages 204-207.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal period ended			For the fiscal year ended July 31,
	9-30-04				3-31-04			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	16.68		$	13.02		$	12.25		$	15.05		$	11.47		$	11.20		$	12.03

Income (loss) from investment operations:
Net investment income (loss)			(0.06	)		(0.08	)		(0.09	)		(0.08	)		(0.06	)		0.05			0.10
Net realized and unrealized gain (loss) on investments			(0.27	)		3.76			1.74			(1.84	)		4.04			0.32			(0.59	)

Total from investment operations			(0.33	)		3.68			1.65			(1.92	)		3.98			0.37			(0.49	)

Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)*		(0.00	)		(0.00	)		(0.10	)		(0.09	)
Capital gains			(0.00	)		(0.02	)		(0.88	)		(0.88	)		(0.40	)		(0.00	)		(0.23	)
Tax return of capital			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.02	)

Total distributions			(0.00	)		(0.02	)		(0.88	)		(0.88	)		(0.40	)		(0.10	)		(0.34	)

Net asset value, end of period		$	16.35		$	16.68		$	13.02		$	12.25		$	15.05		$	11.47		$	11.20

Total return^⁽¹⁾			- -1.98	%		28.29	%		14.91	%	- -13.27		%		35.18	%		3.74	%		- -3.89	%
Net assets, end of period (in millions)			$83			$65			$59			$53			$55			$31			$32
Ratio of expenses to average net assets including voluntary expense waiver			1.69	%^⁽²⁾		1.65	%^{^(2,3)}		1.53	%		1.27	%		1.40	%		1.40	%		1.40	%
Ratio of net investment income (loss) to average net assets including voluntary expense waiver			- -0.90	%^⁽²⁾		- -0.76	%^{^(2,3)}		- -0.82	%		- -0.57	%		- -0.56	%		0.63	%		0.81	%
Ratio of expenses to average net assets excluding voluntary expense waiver			NA			NA			1.53	%		1.37	%		1.51	%		1.71	%		1.64	%
Ratio of net investment income (loss) to average net assets excluding voluntary expense waiver			NA			NA			- -0.82	%		- -0.67	%		- -0.67	%		0.32	%		0.57	%
Portfolio turnover rate			16	%		27	%		54	%		37	%		38	%		169	%		104	%

*Not shown due to rounding.

(1)Total return calculated without taking into account the sales load deducted on an initial purchase.

(2)Annualized.

(3)In connection with the reorganization plan described in Note 8, Class B and Class C shares of the predecessor Advantus Fund were exchanged into Class A shares at the time of the merger. The ratios shown above reflect a blended rate that includes the effect of income and expenses for those Class B and Class C shares from August 1, 2003 up to the time of merger. Actual expenses that applied to Class A shareholders were lower than shown above.

See Notes to Financial Statements

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

	For the six months ended 9-30-04			For the period from 12-8-03^⁽¹⁾ to 3-31-04

Net asset value, beginning of period	$	16.61		$	15.27

Income (loss) from investment operations:
Net investment loss		(0.17	)		(0.05	)
Net realized and unrealized gain (loss) on investments		(0.27	)		1.41

Total from investment operations		(0.44	)		1.36

Less distributions from:
Net investment income		(0.00	)		(0.00	)
Capital gains		(0.00	)		(0.02	)

Total distributions		(0.00	)		(0.02	)

Net asset value, end of period	$	16.17		$	16.61

Total return		- -2.65	%		8.93	%
Net assets, end of period (in millions)		$3			$1
Ratio of expenses to average net assets		3.16	%^⁽²⁾		3.79	%^⁽²⁾
Ratio of net investment loss to average net assets		- -2.34	%^⁽²⁾		- -2.93	%^⁽²⁾
Portfolio turnover rate		16	%		27	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the eight months ended March 31, 2004.

See Notes to Financial Statements.

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

	For the six months ended 9-30-04			For the period from 12-8-03^⁽¹⁾ to 3-31-04

Net asset value, beginning of period	$	16.63		$	15.27

Income (loss) from investment operations:
Net investment loss		(0.14	)		(0.05	)
Net realized and unrealized gain (loss) on investments		(0.27	)		1.43

Total from investment operations		(0.41	)		1.38

Less distributions from:
Net investment income		(0.00	)		(0.00	)
Capital gains		(0.00	)		(0.02	)

Total distributions		(0.00	)		(0.02	)

Net asset value, end of period	$	16.22		$	16.63

Total return		- -2.47	%		9.06	%
Net assets, end of period (in millions)		$5			$2
Ratio of expenses to average net assets		2.76	%^⁽²⁾		2.83	%^⁽²⁾
Ratio of net investment loss to average net assets		- -1.95	%^⁽²⁾		- -2.00	%^⁽²⁾
Portfolio turnover rate		16	%		27	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the eight months ended March 31, 2004.

See Notes to Financial Statements

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

	For the six months ended 9-30-04			For the period from 12-8-03^⁽¹⁾ to 3-31-04

Net asset value, beginning of period	$	16.68		$	15.27

Income (loss) from investment operations:
Net investment loss		(0.07	)		(0.04	)
Net realized and unrealized gain (loss) on investments		(0.25	)		1.47

Total from investment operations		(0.32	)		1.43

Less distributions from:
Net investment income		(0.00	)		(0.00	)
Capital gains		(0.00	)		(0.02	)

Total distributions		(0.00	)		(0.02	)

Net asset value, end of period	$	16.36		$	16.68

Total return		- -1.92	%		9.38	%
Net assets, end of period (in millions)		$25			$25
Ratio of expenses to average net assets		1.56	%^⁽²⁾		1.60	%^⁽²⁾
Ratio of net investment loss to average net assets		- -0.78	%^⁽²⁾		- -0.82	%^⁽²⁾
Portfolio turnover rate		16	%		27	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the eight months ended March 31, 2004.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY VALUE FUND

Portfolio Highlights

On September 30, 2004, Ivy Value Fund had net assets totaling $84,737,950 invested in a
diversified portfolio of:

97.11%		Common Stocks
2.89%		Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2004,
your Fund owned:

Financial Services Stocks	$	27.02
Utilities Stocks	$	11.53
Energy Stocks	$	11.23
Technology Stocks	$	9.08
Consumer Services Stocks	$	7.69
Consumer Nondurables Stocks	$	6.54
Multi-Industry Stocks	$	4.28
Health Care Stocks	$	4.24
Retail Stocks	$	3.49
Raw Materials Stocks	$	3.29
Business Equipment and Services Stocks	$	3.16
Cash and Cash Equivalents	$	2.89
Shelter Stocks	$	2.45
Capital Goods Stocks	$	2.36
Transportation Stocks	$	0.75

The Investments of Ivy Value Fund
September 30, 2004
COMMON STOCKS	Shares		Value


Aircraft - 3.15%
Lockheed Martin Corporation	28,500	$	1,589,730
Northrop Grumman Corporation*	20,200		1,077,266

			2,666,996

Aluminum - 0.83%
Alcoa Incorporated	20,900		702,031


Banks - 11.00%
Bank of America Corporation	76,256		3,304,172
Citigroup Inc. (A)	59,013		2,603,654
National City Corporation	19,050		735,711
U.S. Bancorp	24,508		708,281
Wachovia Corporation	16,350		767,632
Wells Fargo & Company	20,200		1,204,526

			9,323,976

Beverages - 1.55%
Coca-Cola Company (The)	12,800		512,640
Diageo plc, ADR	15,950		804,359

			1,316,999

Broadcasting - 2.62%
Cox Communications, Inc., Class A*	18,400		609,592
Viacom Inc., Class B	48,000		1,610,880

			2,220,472

Business Equipment and Services - 3.16%
ARAMARK Corporation, Class B	17,200		415,208
Office Depot, Inc. (A)*	62,150		934,115
Waste Management, Inc.	48,600		1,328,724

			2,678,047

Capital Equipment - 2.36%
Illinois Tool Works Inc. (A)	14,640		1,364,009
Ingersoll-Rand Company Limited, Class A	9,350		635,520

			1,999,529

Chemicals - Petroleum and Inorganic - 1.97%
Dow Chemical Company (The)	19,050		860,679
du Pont (E.I.) de Nemours and Company	18,950		811,060

			1,671,739

Chemicals - Specialty - 0.49%
Air Products and Chemicals, Inc.	7,600		413,288


Communications Equipment - 1.06%
Comverse Technology, Inc.*	47,800		901,269


Computers - Main and Mini - 1.49%
Hewlett-Packard Company	37,400		701,250
International Business Machines Corporation	6,550		561,597

			1,262,847

Computers - Peripherals - 2.72%
Amdocs Limited*	33,750		736,763
Microsoft Corporation	27,900		771,296
Oracle Corporation*	70,300		794,038

			2,302,097

Cosmetics and Toiletries - 0.86%
NBTY, Inc. (A)*	33,700		726,572


Electronic Components - 0.66%
Texas Instruments Incorporated	26,250		558,600


Finance Companies - 4.70%
Fannie Mae	27,400		1,737,160
Freddie Mac	34,400		2,244,256

			3,981,416

Food and Related - 2.36%
J.M. Smucker Company (The)	18,800		834,908
Unilever N.V., NY Shares	20,200		1,167,560

			2,002,468

Forest and Paper Products - 0.64%
International Paper Company	13,400		541,494


Furniture and Furnishings - 1.81%
Masco Corporation	44,400		1,533,132


Health Care - Drugs - 1.22%
MedImmune, Inc.*	5,400		127,899
Shire Pharmaceuticals Group plc, ADR*	31,750		909,479

			1,037,378

Health Care - General - 0.99%
Da Vita Inc.*	7,800		242,970
Wyeth	16,000		598,400

			841,370

Hospital Supply and Management - 2.03%
PacifiCare Health Systems, Inc.*	46,800		1,717,560


Insurance - Property and Casualty - 3.78%
Allstate Corporation (The)	13,100		628,669
American International Group, Inc.	12,000		815,880
Assurant, Inc.	47,500		1,235,000
St. Paul Companies, Inc. (The) (A)	15,952		527,373

			3,206,922

Leisure Time Industry - 2.29%
Brunswick Corporation	19,600		896,896
Cendant Corporation	48,300		1,043,280

			1,940,176

Motion Pictures - 2.11%
News Corporation Limited (The), ADR	38,300		1,199,939
Time Warner Inc.*	36,350		586,689

			1,786,628

Multiple Industry - 4.28%
General Electric Company	108,000		3,626,640


Petroleum - Domestic - 0.42%
ENSCO International Incorporated	10,900		356,103


Petroleum - International - 10.25%
ChevronTexaco Corporation (A)	36,000		1,931,040
ConocoPhillips	13,200		1,093,620
Devon Energy Corporation (A)	16,900		1,200,069
Exxon Mobil Corporation	92,306		4,461,149

			8,685,878

Petroleum - Services - 0.56%
Baker Hughes Incorporated (A)	10,900		476,548


Publishing - 0.67%
Gannett Co., Inc.	6,750		565,380


Railroad - 0.75%
Union Pacific Corporation	10,800		632,880


Restaurants - 0.85%
CKE Restaurants, Inc.*	64,800		716,040


Retail - General Merchandise - 1.02%
Dollar General Corporation	42,850		863,427


Retail - Specialty Stores - 1.62%
Abercrombie & Fitch Co., Class A	43,600		1,373,400


Security and Commodity Brokers - 7.54%
Merrill Lynch & Co., Inc.	8,000		397,760
Morgan (J.P.) Chase & Co. (A)	78,502		3,118,884
Morgan Stanley	19,040		938,672
Prudential Financial, Inc.	41,050		1,930,992

			6,386,308

Tobacco - 1.77%
Altria Group, Inc. (A)	31,800		1,495,872


Utilities - Electric - 4.77%
Dominion Resources, Inc.	17,300		1,128,825
Entergy Corporation (A)	16,900		1,024,309
PPL Corporation	20,300		957,754
Pepco Holdings, Inc.	47,000		935,300

			4,046,188

Utilities - Gas and Pipeline - 1.12%
Kinder Morgan, Inc.	15,100		948,582


Utilities - Telephone - 5.64%
CenturyTel, Inc. (A)	16,400		561,536
SBC Communications Inc.	37,900		983,505
Sprint Corporation	58,200		1,171,566
Verizon Communications Inc.	29,800		1,173,524
Vodafone Group Plc, ADR	37,050		893,275

			4,783,406


TOTAL COMMON STOCKS - 97.11%		$	82,289,658

(Cost: $73,375,305)

TOTAL SHORT-TERM SECURITIES - 2.44%		$	2,069,000

(Cost: $2,069,000)

TOTAL INVESTMENT SECURITIES - 99.55%		$	84,358,658

(Cost: $75,444,305)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.45%			379,292


NET ASSETS - 100.00%		$	84,737,950

Notes to Schedule of Investments

*No dividends were paid during the preceding 12 months.

(A)

Securities serve as cover for the following written call options outstanding at September 30, 2004. (See Note 6 to financial statements):

Underlying
Security

Contracts Subject
to Call

Expiration Month/
Exercise Price

Premium Received

Market Value

Altria Group, Inc.

January/57

2,223

546

Baker Hughes Incorporated

109

October/42.5

7,165

19,075

CenturyTel, Inc.

164

December/35

12,464

17,466

ChevronTexaco Corporation

November/55

3,358

3,910

Costco Wholesale Corporation

October/43.5

4,692

1,463

Devon Energy Corporation

October/75

4,472

650

Entergy Corporation

169

February/66

12,844

7,436

Illinois Tool Works Inc.

October/95

3,468

1,530

Unilever N.V., NY Shares

October/63

4,209

54,895

52,145

In addition to the above written call options, the following written put options were outstanding as of September 30, 2004. (See Note 6 to financial statements):

Underlying
Security

Contracts Subject
to Put

Expiration Month/
Exercise Price

Premium Received

Market Value

NBTY, Inc.

December/17.5

2,573

$2,573

Office Depot, Inc.

244

October/15

8,296

6,100

St. Paul Companies, Inc. (The)

November/30

1,056

1,080

11,925

$9,753

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

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

Statement of Assets and Liabilities
      IVY VALUE FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (cost-$75,444) (Notes 1 and 3)	$	84,359
Receivables:
Investment securities sold		564
Dividends and interest		120
Fund shares sold		111
Prepaid and other assets		23

Total assets		85,177

LIABILITIES
Payable to Fund shareholders		144
Due to custodian		119
Outstanding written options - at value (Note 6)		62
Accrued management fee (Note 2)		49
Accrued shareholder servicing (Note 2)		20
Accrued service fee (Note 2)		17
Accrued accounting and administrative services fees (Note 2)		4
Accrued distribution fee (Note 2)		2
Other		22

Total liabilities		439

Total net assets	$	84,738

NET ASSETS
Capital paid in	$	82,281
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		61
Accumulated undistributed net realized loss on investment transactions		(6,523	)
Net unrealized appreciation in value of investments		8,919

Net assets applicable to outstanding units of capital	$	84,738

Net asset value per share (net assets divided by shares outstanding):
Class A		$14.59
Class B		$14.51
Class C		$14.53
Class Y		$14.59
Capital shares outstanding:
Class A		4,060
Class B		90
Class C		129
Class Y		1,530

See Notes to Financial Statements

Statement of Operations
      IVY VALUE FUND
      For the Six Months Ended September 30, 2004
      (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $2)	$	807
Interest and amortization		12

Total income		819

Expenses (Note 2):
Investment management fee		280
Service fee:
Class A		69
Class B		1
Class C		2
Class Y		28
Shareholder servicing:
Class A		64
Class B		2
Class C		3
Class Y		17
Registration fees		32
Accounting and administrative services fees		23
Audit fees		11
Distribution fee:
Class A		1
Class B		3
Class C		5
Legal fees		6
Custodian fees		5
Other		31

Total expenses		583

Net investment income		236

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		1,788
Realized net gain on written options		113

Realized net gain on investments		1,901

Unrealized depreciation in value of securities during the period	(1,592		)
Unrealized depreciation in value of written options during the period		(20	)

Unrealized depreciation in value of investments during the period	(1,612		)

Net gain on investments		289

Net increase in net assets resulting from operations	$	525

See Notes to Financial Statements

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

	For the six months ended 9-30-04			For the fiscal period ended 3-31-04			For the fiscal year ended 7-31-03

INCREASE IN NET ASSETS
Operations:
Net investment income	$	236		$	270		$	623
Realized net gain (loss) on investments		1,901			6,937			(4,680	)
Unrealized appreciation (depreciation)		(1,612	)		3,654			8,632

Net increase in net assets resulting from operations		525			10,861			4,575

Distributions to shareholders from (Note 1F):^⁽¹⁾
Net investment income:
Class A		(119	)		(248	)		(556	)
Class B		- -			- -	*		(12	)
Class C		- -			- -	*		(1	)
Class Y		(56	)		(80	)		N/A
Realized gains on investment transactions:
Class A		- -			- -			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -			N/A

		(175	)		(328	)		(569	)

Capital share transactions (Note 5)		8,406			(3,504	)		129

Total increase		8,756			7,029			4,135
NET ASSETS
Beginning of period		75,982			68,953			64,818

End of period	$	84,738		$	75,982		$	68,953

Undistributed net investment income (loss)	$	61		$	(-	)*	$	58

*Not shown due to rounding.

(1)See "Financial Highlights" on pages 217-220.

See Notes to Financial Statements

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

	For the fiscal period ended			For the six months ended			For the fiscal year ended			For the period from 10-1-01 to			For the fiscal year ended September 30,
	9-30-04			3-31-04			7-31-03			7-31-02			2001			2000			1999			1998

Net asset value, beginning of period	$	14.54		$	12.54		$	11.81		$	12.59		$	15.08		$	15.14		$	13.88		$	18.68

Income (loss) from investment operations:
Net investment income		0.04			0.08			0.12			0.08			0.09			0.06			0.15			0.16
Net realized and unrealized gain (loss) on investments		0.04			1.98			0.72			(0.78	)		(2.50	)		0.13			1.26			(3.04	)

Total from investment operations		0.08			2.06			0.84			(0.70	)		(2.41	)		0.19			1.41			(2.88	)

Less distributions from:
Net investment income		(0.03	)		(0.06	)		(0.11	)		(0.08	)		(0.08	)		(0.11	)		(0.15	)		(0.16	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.13	)		(0.00	)		(1.76	)
Tax return of capital		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.01	)		(0.00	)		(0.00	)

Total distributions		(0.03	)		(0.06	)		(0.11	)		(0.08	)		(0.08	)		(0.25	)		(0.15	)		(1.92	)

Net asset value, end of period	$	14.59		$	14.54		$	12.54		$	11.81		$	12.59		$	15.08		$	15.14		$	13.88

Total return^⁽¹⁾		0.55	%		16.32	%		7.23	%		- -5.72	%	- -15.97		%		1.26	%		10.13	%	- -16.45		%
Net assets, end of period (in millions)		$59			$52			$64			$58			$66			$81			$93			$94
Ratio of expenses to average net assets including voluntary expense waiver		1.46	%^⁽²⁾		1.45	%^{^(2,3)}		1.29	%		1.24	%^⁽²⁾		1.24	%		1.24	%		1.21	%		1.16	%
Ratio of net investment income to average net assets including voluntary expense waiver		0.59	%^⁽²⁾		0.61	%^{^(2,3)}		1.05	%		0.70	%^⁽²⁾		0.61	%		0.43	%		0.94	%		0.98	%
Ratio of expenses to average net assets excluding voluntary expense waiver		NA			1.52	%^{^(2,3)}		1.50	%		1.41	%^⁽²⁾		1.39	%		1.34	%		1.23	%		1.25	%
Ratio of net investment income to average net assets excluding voluntary expense waiver		NA			0.53	%^{^(2,3)}		0.84	%		0.53	%^⁽²⁾		0.46	%		0.33	%		0.92	%		0.89	%
Portfolio turnover rate		34	%		86	%		123	%		95	%		148	%		180	%		79	%		114	%

(1)Total return calculated without taking into account the sales load deducted on an initial purchase.

(2)Annualized.

(3)In connection with the reorganization plan described in Note 8, Class B and Class C shares of the predecessor Advantus Fund were exchanged into Class A shares at the time of the merger. The ratios shown above reflect a blended rate that included the effect of income and expenses for those Class B and Class C shares from August 1, 2003 up to the time of merger. Actual expenses that applied to Class A shareholders were lower than shown above.

See Notes to Financial Statements

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

	For the six months ended 9-30-04			For the period from 12-8-03^⁽¹⁾ to 3-31-04

Net asset value, beginning of period	$	14.50		$	13.63

Income (loss) from investment operations:
Net investment income (loss)		(0.00	)		0.01
Net realized and unrealized gain on investments		0.01			0.90

Total from investment operations		0.01			0.91

Less distributions from:
Net investment income		(0.00	)		(0.04	)
Capital gains		(0.00	)		(0.00	)

Total distributions		(0.00	)		(0.04	)

Net asset value, end of period	$	14.51		$	14.50

Total return		0.07	%		6.65	%
Net assets, end of period (in millions)		$1			$1
Ratio of expenses to average net assets		2.57	%^⁽²⁾		3.12	%^⁽²⁾
Ratio of net investment loss to average net assets		- -0.48	%^⁽²⁾		- -1.29	%^⁽²⁾
Portfolio turnover rate		34	%		86	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the eight months ended March 31, 2004.

See Notes to Financial Statements

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

	For the six months ended 9-30-04			For the period from 12-8-03^⁽¹⁾ to 3-31-04

Net asset value, beginning of period	$	14.51		$	13.63

Income (loss) from investment operations:
Net investment income (loss)		(0.00	)		0.02
Net realized and unrealized gain on investments		0.02			0.90

Total from investment operations		0.02			0.92

Less distributions from:
Net investment income		(0.00	)		(0.04	)
Capital gains		(0.00	)		(0.00	)

Total distributions		(0.00	)		(0.04	)

Net asset value, end of period	$	14.53		$	14.51

Total return		0.14	%		6.73	%
Net assets, end of period (in millions)		$2			$1
Ratio of expenses to average net assets		2.43	%^⁽²⁾		2.90	%^⁽²⁾
Ratio of net investment loss to average net assets		- -0.34	%^⁽²⁾		- -1.18	%^⁽²⁾
Portfolio turnover rate		34	%		86	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the eight months ended March 31, 2004.

See Notes to Financial Statements

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

	For the six months ended 9-30-04			For the period from 12-8-03^⁽¹⁾ to 3-31-04

Net asset value, beginning of period	$	14.54		$	13.63

Income from investment operations:
Net investment income		0.05			0.01
Net realized and unrealized gain on investments		0.04			0.95

Total from investment operations		0.09			0.96

Less distributions from:
Net investment income		(0.04	)		(0.05	)
Capital gains		(0.00	)		(0.00	)

Total distributions		(0.04	)		(0.05	)

Net asset value, end of period	$	14.59		$	14.54

Total return		0.60	%		7.05	%
Net assets, end of period (in millions)		$23			$22
Ratio of expenses to average net assets		1.35	%^⁽²⁾		1.48	%^⁽²⁾
Ratio of net investment income to average net assets		0.70	%^⁽²⁾		0.35	%^⁽²⁾
Portfolio turnover rate		34	%		86	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the eight months ended March 31, 2004.

See Notes to Financial Statements.

Notes To Financial Statements

September 30, 2004

Note 1 - Significant Accounting Policies

Ivy Funds (formerly Ivy Fund) (the "Trust") is organized as a Massachusetts business trust under a Declaration of Trust dated December 21, 1983 and is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The Trust issues fifteen series of capital shares; each series represents ownership of a separate mutual fund ("Fund"). Ivy Balanced Fund, Ivy Bond Fund, Ivy Cash Reserves Fund, Ivy Cundill Global Value Fund, Ivy Dividend Income Fund, Ivy European Opportunities Fund, Ivy Global Natural Resources Fund, Ivy International Fund, Ivy International Balanced Fund, Ivy International Value Fund, Ivy Mortgage Securities Fund, Ivy Pacific Opportunities Fund, Ivy Real Estate Securities Fund, Ivy Small Cap Value Fund and Ivy Value Fund (the "Funds") are those mutual funds. The assets belonging to each Fund are held separately by the custodian. The capital shares of each Fund represent a pro rata beneficial interest in the principal, ne t income and realized and unrealized capital gains or losses of its respective investments and other assets. Effective for the fiscal period ended March 31, 2004, the Trust changed its fiscal year end for both financial reporting and Federal income tax purposes to March 31 from December 31. Those funds that were formerly Advantus funds (Ivy Real Estate Securities Fund, Ivy Small Cap Value Fund and Ivy Value Fund) and that had a July 31 year end have also changed to March 31 for both financial reporting and Federal income tax purposes; those funds that were formerly Advantus funds (Ivy Balanced Fund, Ivy Bond Fund, Ivy International Balanced Fund and Ivy Mortgage Securities Fund) and that had a September 30 year end have changed to March 31 for both financial reporting and Federal income tax purposes. The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generall y accepted in the United States of America.

A. Security valuation - Each stock and convertible bond is valued at the latest sale price thereof on each business day of the fiscal period as reported by the principal securities exchange on which the issue is traded or, if no sale is reported for a stock, the average of the latest bid and asked prices. Bonds, other than convertible bonds, are valued using a pricing system provided by a pricing service or dealer in bonds. Convertible bonds are valued using this pricing system only on days when there is no sale reported. Stocks which are traded over-the-counter are priced using the Nasdaq Stock Market, which provides information on bid and asked prices quoted by major dealers in such stocks. Restricted securities and securities for which quotations are not readily available or are deemed not to be reliable because of significant events or circumstances identified between the closing of their principal markets and the closing of the New York Stock Exchange are valued as determined in good faith in a ccordance with procedures established by and under the general supervision of the Trust's Board of Trustees. Short-term debt securities are valued at amortized cost, which approximates market value. Short-term debt securities denominated in foreign currencies are valued at amortized cost in that currency. See Note 1C.
B. Security transactions and related investment income - Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Securities gains and losses are calculated on the identified cost basis. Premium and discount on the purchase of bonds are amortized for both financial and tax reporting purposes over the remaining lives of the bonds. Dividend income is recorded on the ex-dividend date except that certain dividends from foreign securities are recorded as soon as the Fund is informed of the ex-dividend date. Interest income is recorded on the accrual basis. See Note 3 - Investment Securities Transactions.
C. Foreign currency translations - All assets and liabilities denominated in foreign currencies are translated into United States dollars daily. Purchases and sales of investment securities and accruals of income and expenses are translated at the rate of exchange prevailing on the date of the transaction. For assets and liabilities other than investments in securities, net realized and unrealized gains and losses from foreign currency translation arise from changes in currency exchange rates. The Trust combines fluctuations from currency exchange rates and fluctuations in market value when computing net realized and unrealized gain or loss from investments.
D. Forward foreign currency exchange contracts - A forward foreign currency exchange contract (Forward Contract) is an obligation to purchase or sell a specific currency at a future date at a fixed price. Forward Contracts are "marked-to-market" daily at the applicable translation rates and the resulting unrealized gains or losses are reflected in the Trust's financial statements. Gains or losses are realized by the Trust at the time the forward contract is extinguished. Contracts may be extinguished either by entry into a closing transaction or by delivery of the currency. Risks may arise from the possibility that the other party will not complete the obligations of the contract and from unanticipated movements in the value of the foreign currency relative to the United States dollar. The Trust uses forward contracts to attempt to reduce the overall risk of its investments.
E. Federal income taxes - It is the Trust's policy to distribute all of its taxable income and capital gains to its shareholders and otherwise qualify as a regulated investment company under Subchapter M of the Internal Revenue Code. In addition, the Trust intends to pay distributions as required to avoid imposition of excise tax. Accordingly, provision has not been made for Federal income taxes. See Note 4 - Federal Income Tax Matters.
F. Dividends and distributions - Dividends and distributions to shareholders are recorded by each Fund on the business day following record date. Net investment income dividends and capital gains distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as deferral of wash sales and post-October losses, foreign currency transactions, net operating losses and expiring capital loss carryovers. At September 30, 2004, the following amounts were reclassified:

				Capital Paid-in

Bond Fund	$	11,643		$	(11,643	)
Mortgage Securities Fund		(4,662	)		4,662
Pacific Opportunities Fund		22,000		(22,000		)

G. Repurchase agreements - Repurchase agreements are collateralized by the value of the resold securities which, during the entire period of the agreement, remains at least equal to the value of the loan, including accrued interest thereon. The collateral for the repurchase agreement is held by the Trust's custodian bank.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

Note 2 - Investment Management and Payments to Affiliated Persons

Waddell & Reed Ivy Investment Company ("WRIICO"), a wholly owned subsidiary of Waddell & Reed Financial, Inc. ("WDR") , serves as the investment manager for each Fund. WRIICO provides advice and supervises investments for which services it is paid a fee. The fee is payable by each Fund at the following annual rates:

Fund	Net Asset Breakpoints	Annual Rate

Ivy Balanced Fund	Up to $1 Billion	0.70%
	Over $1 Billion up to $2 Billion	0.65%
	Over $2 Billion up to $3 Billion	0.60%
	Over $3 Billion	0.55%

Ivy Bond Fund	Up to $500 Million	0.525%
	Over $500 Million and up to $1 Billion	0.50%
	Over $1 Billion and up to $1.5 Billion	0.45%
	Over $1.5 Billion	0.40%

Ivy Cash Reserves Fund (formerly Ivy Money Market Fund)	All levels	0.40%

Ivy Cundill Global Value Fund	Up to $500 Million	1.00%
	Over $500 Million and up to $1 Billion	0.85%
	Over $1 Billion and up to $2 Billion	0.83%
	Over $2 Billion and up to $3 Billion	0.80%
	Over $3 Billion	0.76%

Ivy Dividend Income Fund	Up to $1 Billion	0.70%
	Over $1 Billion up to $2 Billion	0.65%
	Over $2 Billion up to $3 Billion	0.60%
	Over $3 Billion	0.55%

Ivy European Opportunities Fund	Up to $250 Million	1.00%
	Over $250 Million up to $500 Million	0.85%
	Over $500 Million	0.75%

Ivy Global Natural Resources Fund	Up to $500 Million	1.00%
	Over $500 Million and up to $1 Billion	0.85%
	Over $1 Billion and up to $2 Billion	0.83%
	Over $2 Billion and up to $3 Billion	0.80%
	Over $3 Billion	0.76%

Ivy International Fund	Up to $2 Billion	1.00%
	Over $2 Billion up to $2.5 Billion	0.90%
	Over $2.5 Billion up to $3 Billion	0.80%
	Over $3 Billion	0.70%

Ivy International Balanced Fund	Up to $1 Billion	0.70%
	Over $1 Billion up to $2 Billion	0.65%
	Over $2 Billion up to $3 Billion	0.60%
	Over $3 Billion	0.55%

Ivy International Value Fund	Up to $500 Million	1.00%
	Over $500 Million and up to $1 Billion	0.85%
	Over $1 Billion and up to $2 Billion	0.83%
	Over $2 Billion and up to $3 Billion	0.80%
	Over $3 Billion	0.76%

Ivy Mortgage Securities Fund	Up to $500 Million	0.50%
	Over $500 Million and up to $1 Billion	0.45%
	Over $1 Billion and up to $1.5 Billion	0.40%
	Over $1.5 Billion	0.35%

Ivy Pacific Opportunities Fund	Up to $500 Million	1.00%
	Over $500 Million and up to $1 Billion	0.85%
	Over $1 Billion and up to $2 Billion	0.83%
	Over $2 Billion and up to $3 Billion	0.80%
	Over $3 Billion	0.76%

Ivy Real Estate Securities Fund	Up to $1 Billion	0.90%
	Over $1 Billion up to $2 Billion	0.87%
	Over $2 Billion up to $3 Billion	0.84%
	Over $3 Billion	0.80%

Ivy Small Cap Value Fund	Up to $1 Billion	0.85%
	Over $1 Billion up to $2 Billion	0.83%
	Over $2 Billion up to $3 Billion	0.80%
	Over $3 Billion	0.76%

Ivy Value Fund	Up to $1 Billion	0.70%
	Over $1 Billion up to $2 Billion	0.65%
	Over $2 Billion up to $3 Billion	0.60%
	Over $3 Billion	0.55%

These fees are accrued daily and are paid monthly. However, WRIICO has voluntarily agreed to waive its management fee for Ivy Dividend Income Fund on any day that the Fund's net assets are less than $25 million, subject to WRIICO's right to change or modify this waiver.

The Investment Advisory Agreement between the Trust on behalf of Global Natural Resources Fund and Mackenzie Financial Corporation ("MFC") lapsed on February 28, 2003, due to an administrative error that was not discovered until late in 2003. Consequently, at a special shareholder meeting held on September 9, 2004, the shareholders of Global Natural Resources Fund, in conjunction with the authorization and recommendation of the Board of Trustees of Ivy Funds, approved the following: (i) a new investment management agreement between the Trust, on behalf of Global Natural Resources Fund and WRIICO, including a fee payable to WRIICO, by Global Natural Resources Fund, at an annual rate of 1.00% of Global Natural Resources Fund's average daily net assets up to $500 million, 0.85% of net assets over $500 million and up to $1 billion, 0.83% of net assets over $1 billion and up to $2 billion, 0.80% of net assets over $2 billion and up to $3 billion, and 0.76% of net assets over $3 billion; (ii) a sub-advis ory agreement between WRIICO and MFC with respect to Global Natural Resources Fund, including a fee payable to MFC, by WRIICO, at an annual rate of 0.50% of Global Natural Resources Fund's average daily net assets up to $500 million, 0.425% of net assets over $500 million and up to $1 billion, 0.415% of net assets over $1 billion and up to $2 billion, 0.40% of net assets over $2 billion and up to $3 billion, and 0.38% of net assets over $3 billion; (iii) the retention of fees paid and payment of fees payable for investment advisory services rendered by MFC for the period from March 1, 2003 through the effective date of the sub-advisory agreement, September 9, 2004.

Peter Cundill & Associates, Inc. serves as subadvisor to Ivy Cundill Global Value Fund under an agreement with WRIICO and receives a fee that is shown in the following table.

Fund	Net Asset Breakpoints	Annual Rate

Ivy Cundill Global Value Fund	On the first $500 Million	0.50	%
	On the next $500 Million	0.425	%
	On the next $1 Billion	0.415	%
	On the next $1 Billion	0.40	%
	On all assets exceeding $3 Billion	0.38	%

Henderson Global Investors (North America) Inc. ("HGINA") serves as subadvisor to Ivy European Opportunities Fund under an agreement with WRIICO. Henderson Investment Management Ltd., under a sub-advisory agreement with HGINA, serves as subadvisor to the Fund. Prior to July 1, 2004 HGINA received 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 the Fund's average daily net assets managed by HGINA. Effective July 1, 2004, HGINA receives a fee payable monthly at an annual rate of 0.50% of net assets.

Advantus Capital Management, Inc. serves as subadvisor to Ivy Bond Fund, Ivy Mortgage Securities Fund and Ivy Real Estate Securities Fund under an agreement with WRIICO and receives a fee that is equal to, on an annual basis, 0.27%, 0.30% and 0.55% of the respective Fund's average net assets.

State Street Research & Management Company ("SSRM") serves as subadvisor to Ivy Small Cap Value Fund under an agreement with WRIICO and receives a fee that is equal to, on an annual basis, 0.50% of the Fund's average net assets.

MetLife, Inc., the parent company of SSRM announced that it has entered into an agreement to sell SSRM to Blackrock, Inc. The transaction is expected to close in January 2005 and will automatically terminate the Fund's investment sub-advisory agreement with SSRM. WRIICO has proposed a new investment sub-advisory agreement with Blackrock Financial Management, Inc., a wholly-owned subsidiary of BlackRock, Inc.

Templeton Investment Counsel, LLC serves as subadvisor to Ivy International Balanced Fund under an agreement with WRIICO and receives a fee that is shown in the following table.

Fund	Net Asset Breakpoints	Annual Rate

Ivy International Balanced Fund	On the first $100 Million	0.50%
	All assets exceeding $100 Million	0.40%

Pursuant to a Master Fund Accounting Services Agreement, WRIICO provides certain accounting and pricing services for each Fund. As of March 18, 2003, WRIICO assigned its responsibilities under the Accounting Services Agreement to Waddell & Reed Services Company ("WRSCO"), an indirect subsidiary of WDR. For these services, each Fund pays WRSCO a monthly fee of one-twelfth of the annual fee shown in the following table.



Average Net Asset Level (in millions)					Annual Fee Rate for Each Level

From	$	0 to	$	10		$	0
From	$	10 to	$	25		$	11,500
From	$	25 to	$	50		$	23,100
From	$	50 to	$	100		$	35,500
From	$	100 to	$	200		$	48,400
From	$	200 to	$	350		$	63,200
From	$	350 to	$	550		$	82,500
From	$	550 to	$	750		$	96,300
From	$	750 to	$	1,000		$	121,600
	$	1,000 and Over				$	148,500

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

Under the Shareholder Servicing Agreement, with respect to Class A, Class B, Class C, Class I and Advisor Class shares, for each shareholder account that was in existence at any time during the prior month: Ivy Balanced Fund, Ivy Dividend Income Fund, Ivy International Balanced Fund, Ivy Real Estate Securities Fund, Ivy Small Cap Value Fund and Ivy Value Fund pay WRSCO a monthly fee of $1.5792; Ivy Bond Fund and Ivy Mortgage Securities Fund pay WRSCO a monthly fee of $1.6958; and Ivy Cundill Global Value Fund, Ivy European Opportunities Fund, Ivy Global Natural Resources Fund, Ivy International Fund, Ivy International Value Fund and Ivy Pacific Opportunities Fund each pay the Agent a monthly fee of $1.5042. Ivy Cash Reserves Fund pays the Agent 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. For Class Y shares, each Fund pays the Agent a monthly f ee at an annual rate of 0.15% of the average daily net assets of the class for the preceding month. Each Fund also reimburses WRSCO for certain out-of-pocket costs for all classes. 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 WRSCO if the individual accounts that comprise the omnibus account were opened by their beneficial owners directly. WRSCO pays such broker-dealers a per account fee for each open account within the omnibus account, or a fixed rate (e.g., 0.10%) fee, based on the average daily net asset value of the omnibus account (or a combination thereof).

Pursuant to an Administrative Services Agreement, WRIICO provides certain administrative services to each Fund. The administrative fee for each Fund is a monthly fee at the annual rate of 0.01% of each Fund's average daily net assets.

Outside of providing administrative services to the Trust, as described above, WRIICO may also act on behalf of Ivy Funds Distributor, Inc. ("IFDI"), a wholly-owned subsidiary of WRIICO, in paying commissions to broker-dealers with respect to sales of shares of each Fund.

As principal underwriter for the Trust's shares, IFDI receives sales commissions (which are not an expense of the Trust) for Class A shares. A contingent deferred sales charge ("CDSC") may be assessed against a shareholder's redemption amount of Class B, Class C or certain Class A shares and is paid to IFDI. During the period ended September 30, 2004, IFDI received the following amounts in sales commissions and deferred sales charges:

			CDSC

			Class A		Class B		Class C

Ivy Balanced Fund	$	55,442	$	-	$	1,625	$	26
Ivy Bond Fund		41,551		-		282		439
Ivy Cash Reserves Fund		- -		-		2,244		360
Ivy Cundill Global Value Fund		869,750		-		14,812		4,266
Ivy Dividend Income Fund		130,529		-		3,548		1,229
Ivy European Opportunities Fund		307,194		-		41,361		7,810
Ivy Global Natural Resources Fund		1,059,789		-		53,945		36,580
Ivy International Fund		5,605		-		6,339		9
Ivy International Balanced Fund		111,164		-		503		20
Ivy International Value Fund		23,418		-		2,834		215
Ivy Mortgage Securities Fund		377,161		-		2,816		3,460
Ivy Pacific Opportunities Fund		173,801		-		2,075		707
Ivy Real Estate Securities Fund		460,700		-		3,570		1,142
Ivy Small Cap Value Fund		260,000		-		4,148		426
Ivy Value Fund		64,183		-		396		67

With respect to Class A, Class B and Class C shares, IFDI pays sales commissions and all expenses in connection with the sale of the Trust's shares, except for registration fees and related expenses. During the period ended September 30, 2004, IFDI paid the following amounts:

Ivy Balanced Fund	$	66,372
Ivy Bond Fund		43,440
Ivy Cash Reserves Fund		- -
Ivy Cundill Global Value Fund		1,313,666
Ivy Dividend Income Fund		174,421
Ivy European Opportunities Fund		411,390
Ivy Global Natural Resources Fund		2,113,640
Ivy International Fund		12,353
Ivy International Balanced Fund		135,423
Ivy International Value Fund		27,210
Ivy Mortgage Securities Fund		455,750
Ivy Pacific Opportunities Fund		194,438
Ivy Real Estate Securities Fund		528,418
Ivy Small Cap Value Fund		306,169
Ivy Value Fund		74,003

Under a Distribution and Service Plan for Class A shares adopted by the Trust pursuant to Rule 12b-1 under the Investment Company Act of 1940, each Fund (except for Ivy Cash Reserves Fund) may pay a distribution and/or service fee to IFDI in an amount not to exceed 0.25% of the Fund's average annual net assets. The fee is to be paid to reimburse IFDI for amounts it expends in connection with the distribution of the Class A shares and/or provision of personal services to Fund shareholders and/or maintenance of shareholder accounts.

Under the Distribution and Service Plan adopted by the Trust for Class B shares and Class C shares, respectively, each Fund (except for Ivy Cash Reserves Fund) may pay IFDI a service fee not to exceed 0.25% and a distribution fee not to exceed 0.75% of a Fund's average annual net assets attributable to that class to compensate IFDI for its services in connection with the distribution of shares of that class and/or the service and/or maintenance of shareholder accounts of that class. The Class B Plan and the Class C Plan each permit IFDI to receive compensation, through the distribution fee and service fee, respectively, for its distribution activities for that class, which are similar to the distribution activities described with respect to the Class A Plan, and for its activities in providing personal services to shareholders of that class and/or maintaining shareholder accounts of that class, which are similar to the corresponding activities for which it is entitled to compensation under the Class A Plan.

Under the Class Y Plan, each Fund (except for Ivy Cash Reserves Fund) may pay IFDI a fee of up to 0.25%, on an annual basis, of the average daily net assets of a Fund's Class Y shares to compensate IFDI for, either directly or through third parties, distributing the Class Y shares of that Fund, providing personal service to Class Y shareholders and/or maintaining Class Y shareholder accounts.

For Ivy Cundill Global Value Fund, Ivy European Opportunities Fund, Ivy Global Natural Resources Fund, Ivy International Fund, Ivy International Value Fund and Ivy Pacific Opportunities Fund, WRIICO has agreed to reimburse a Fund's expenses, for the calendar year ended December 31, 2004, and for the following six years, to the extent necessary to ensure that the Fund's annual operating expenses, when calculated at the Fund level, do not exceed 2.5% (0.85% for Cash Reserves Fund) of the Fund's average net assets (excluding 12b-1 fees and certain other expenses.) During the period ended September 30, 2004, WRIICO reimbursed Funds' expenses (in thousands) as shown in the following table:

Ivy Cash Reserves Fund

During the period ended September 30, 2004, WRIICO reimbursed Fund's expenses (in thousands) as follows:

Ivy Cundill Global Value Fund		$	9
Ivy Global Natural Resources Fund			45

WRIICO has agreed to reimburse Ivy Bond Fund's 12b-1 expenses applicable to Class A shares and sufficient transfer agency fees to limit to the extent necessary to ensure that the Fund's annual operating expenses for Class A shares do not exceed 1.15% through December 31, 2004. WRIICO has agreed to reimburse Ivy Mortgage Securities Fund's 12b-1 expenses applicable to Class A shares to limit to the extent necessary to ensure that the Fund's annual operating expenses for Class A shares do not exceed 0.95% through December 31, 2004. During the period ended September 30, 2004, WRIICO reimbursed Funds' expenses (in thousands) as shown in the following table:

Ivy Bond Fund		$	64
Ivy Mortgage Securities Fund			222

In addition, IFDI and WRSCO have voluntarily agreed to waive sufficient Fund expenses to ensure that the total annual fund operating exenses do not exceed the following levels for the specified funds/classes:

Fund and Class	Expense Limitation (as a percentage of average net assets of each Class)

Ivy Cundill Global Value Fund, Class A			1.90%
Ivy Cundill Global Value Fund, Class C			2.55%
Ivy Cundill Global Value Fund, Class Y			1.20%
Ivy Global Natural Resources Fund, Class A			1.70%
Ivy Global Natural Resources Fund, Class C			2.40%
Ivy Global Natural Resources Fund, Class Y			1.20%

The Trust paid Directors' regular compensation of $61,484, which is included in other expenses.

Note 3 - Investment Securities Transactions

Investment securities transactions for the period ended September 30, 2004 are summarized as follows:

		Ivy Balanced Fund		Ivy Bond Fund		Ivy Cundill Global Value Fund

Purchases of investment securities, excluding short-term and U.S. government securities	$	17,815,957	$	4,182,765	$	102,298,680
Purchases of U.S. government securities		- -		9,221,522		- -
Purchases of short-term securities		180,984,382		66,678,660		1,174,076,692
Proceeds from maturities and sales of investment securities, excluding short-term and U.S. government securities		22,511,896		4,965,781		606,801
Proceeds from maturities and sales of U.S. government securities		- -		7,704,967		- -
Proceeds from maturities and sales of short-term securities		181,744,834		66,643,000		1,136,887,887

		Ivy Dividend Income Fund	Ivy European Opportunities Fund			Ivy Global Natural Resources Fund

Purchases of investment securities, excluding short-term and U.S. government securities	$	10,279,184	$	47,683,222	$	353,458,516
Purchases of U.S. government securities		- -		- -		- -
Purchases of short-term securities		266,724,538		439,359,719		853,483,822
Proceeds from maturities and sales of investment securities, excluding short-term and U.S. government securities		4,094,515		57,889,621		143,356,711
Proceeds from maturities and sales of U.S. government securities		- -		- -		- -
Proceeds from maturities and sales of short-term securities		264,352,000		433,521,866		826,678,304

	Ivy International Fund		Ivy International Balanced Fund		Ivy International Value Fund

Purchases of investment securities, excluding short-term and U.S. government securities	$	43,841,074	$	13,250,272	$	15,733,854
Purchases of U.S. government securities		- -		- -		- -
Purchases of short-term securities		289,713,356		365,135,232		119,577,255
Proceeds from maturities and sales of investment securities, excluding short-term and U.S. government securities		70,471,842		4,556,503		20,348,451
Proceeds from maturities and sales of U.S. government securities		- -		- -		- -
Proceeds from maturities and sales of short-term securities		286,370,236		363,859,455		118,238,000

		Ivy Mortgage Securities Fund	Ivy Pacific Opportunities Fund			Ivy Real Estate Securities Fund

Purchases of investment securities, excluding short-term and U.S. government securities	$	21,851,523	$	22,005,184	$	116,116,394
Purchases of U.S. government securities		147,910,617		- -		- -
Purchases of short-term securities		715,907,427		281,931,534		396,433,091
Proceeds from maturities and sales of investment securities, excluding short-term and U.S. government securities		17,168,555		13,892,250		55,385,539
Proceeds from maturities and sales of U.S. government securities		128,505,504		- -		- -
Proceeds from maturities and sales of short-term securities		712,572,228		278,701,773		397,338,401

		Ivy Small Cap Value Fund		Ivy Value Fund

Purchases of investment securities, excluding short-term and U.S. government securities	$	36,832,764	$	33,890,051
Purchases of U.S. government securities		- -		- -
Purchases of short-term securities		372,617,818		232,724,237
Proceeds from maturities and sales of investment securities, excluding short-term and U.S. government securities		15,517,765		26,517,666
Proceeds from maturities and sales of U.S. government securities		- -		- -
Proceeds from maturities and sales of short-term securities		369,586,812		231,789,584

For Federal income tax purposes, cost of investments owned at September 30, 2004 and the related unrealized appreciation (depreciation) were as follows:

	Cost		Appreciation		Depreciation		Aggregate Appreciation

Ivy Balanced Fund	$	91,594,725	$	8,739,171	$	1,201,114	$	7,538,057
Ivy Bond Fund		24,048,925		619,168		147,196		471,972
Ivy Cash Reserves Fund		6,841,584		- -		- -		- -
Ivy Cundill Global Value Fund		227,185,883		14,911,427		1,840,428		13,070,999
Ivy Dividend Income Fund		32,142,535		3,023,512		783,905		2,239,607
Ivy European Opportunities Fund		118,630,903		26,274,492		3,582,078		22,692,414
Ivy Global Natural Resources Fund		493,003,002		100,059,008		3,100,054		96,958,954
Ivy International Fund		132,502,325		26,694,984		4,707,847		21,987,137
Ivy International Balanced Fund		59,285,053		11,113,599		1,841,760		9,271,839
Ivy International Value Fund		33,714,353		4,652,093		1,111,784		3,540,309
Ivy Mortgage Securities Fund		177,531,489		2,661,442		1,468,223		1,193,219
Ivy Pacific Opportunities Fund		44,323,092		4,305,778		2,179,985		2,125,793
Ivy Real Estate Securities Fund		169,709,628		30,392,936		331,936		30,061,000
Ivy Small Cap Value Fund		98,977,537		22,290,462		6,135,102		16,155,360
Ivy Value Fund		75,580,409		10,036,124		1,257,875		8,778,249

Note 4 - Federal Income Tax Matters

For Federal income tax purposes, the Funds' distributed and undistributed earnings and profit for the fiscal year ended March 31, 2004 and the related Capital Loss Carryover and Post-October activity were as follows:

	Ivy Balanced Fund		Ivy Bond Fund

Net ordinary income	$	387,931	$	469,814	$	6,546
Distributed ordinary income		389,824		474,817		8,780
Undistributed ordinary income		29,091		7,431		5,873

Realized long-term capital gains		- -		- -		- -
Distributed long-term capital gains		- -		- -		- -
Undistributed long-term capital gains		- -		- -		-

Capital loss carryover		- -		- -		- -

Post-October losses deferred		- -		- -		-

	Ivy Cundill Global Value Fund			Ivy Dividend Income Fund

Net ordinary income	$	819,976		$	129,131		$	- -
Distributed ordinary income		- -			7,680			- -
Undistributed ordinary income		1,289,967	*		129,646	*		91,085	*

Realized long-term capital gains		- -			2,366			- -
Distributed long-term capital gains		- -			- -			- -
Undistributed long-term capital gains		- -			2,366			-

Capital loss carryover		1,281,671			- -			-

Post-October losses deferred		- -			- -			-

	Ivy Global Natural Resources Fund		Ivy International Fund

Net ordinary income	$	- -	$	-	$	610,867
Distributed ordinary income		- -		-		780,577
Undistributed ordinary income		139,038		-		469,036

Realized long-term capital gains		- -		-		- -
Distributed long-term capital gains		- -		-		- -
Undistributed long-term capital gains		- -		-		-

Capital loss carryover		- -		-		- -

Post-October losses deferred		- -		-		- -
*Includes amount from December 31, 2003.

	Ivy International Value Fund		Ivy Mortgage Securities Fund

Net ordinary income	$	-	$	3,213,770	$	-
Distributed ordinary income		-		3,382,257		-
Undistributed ordinary income		-		51,813		-

Realized long-term capital gains		-		- -		-
Distributed long-term capital gains		-		351,353		-
Undistributed long-term capital gains		-		- -		-

Capital loss carryover		-		- -		-

Post-October losses deferred		-		205,306		-

	Ivy Real Estate Securities Fund		Ivy Small Cap Value Fund		Ivy Value Fund

Net ordinary income	$	3,692,417	$	1,026,254	$	271,014
Distributed ordinary income		2,201,673		107		328,144
Undistributed ordinary income		1,744,672		1,026,147		453

Realized long-term capital gains		1,617,387		1,148,837		- -
Distributed long-term capital gains		278,496		104,518		- -
Undistributed long-term capital gains		1,338,890		1,148,837		- -

Capital loss carryover		- -		- -		- -

Post-October losses deferred		- -		- -		- -

Internal Revenue Code regulations permit each Fund to defer into its next fiscal year net capital losses or net long-term capital losses and currency losses incurred between each November 1 and the end of its fiscal year ("post-October losses").

Capital Loss Carryovers are available to offset future realized capital gain net income for Federal income tax purposes. The following shows the totals by year in which the capital loss carryovers will expire if not utilized.


		Ivy Balanced Fund	Ivy Bond Fund		Ivy Cundill Global Value Fund
March 31, 2008	$	- -	$	30,780	$	- -
March 31, 2009		- -		223,474		60,918
March 31, 2010		10,157,223		- -		268,343
March 31, 2012		- -		- -		1,281,671

Total carryover	$	10,157,223	$	254,254	$	1,610,932

	Ivy European Opportunities Fund		Ivy Global Natural Resources Fund		Ivy International Fund

March 31, 2005	$	- -	$	143,237	$	- -
March 31, 2006		- -		143,237		- -
March 31, 2007		- -		4,023,421		- -
March 31, 2009		30,418,750		- -		136,920,994
March 31, 2010		29,411,986		1,275,367		126,565,198
March 31, 2011		12,058,021		288,710		47,213,802

Total carryover	$	71,888,757	$	5,873,972	$	310,699,994



March 31, 2005	$	- -	$	- -	$	157,220
March 31, 2006		- -		1,315,291		3,986,093
March 31, 2007		- -		- -		285,649
March 31, 2008		- -		1,064,641		1,009,302
March 31, 2009		- -		3,396,958		2,024,330
March 31, 2010		- -		8,128,361		277,529
March 31, 2011		501,780		2,150,884		- -

Total carryover	$	501,780	$	16,056,135	$	7,740,123

	Ivy Value Fund

March 31, 2010	$	2,071,410
March 31, 2011		6,210,683

Total carryover	$	8,282,093

Ivy Developing Markets Fund was merged into Ivy Pacific Opportunities Fund as of June 16, 2003 (see Note 7). At the time of the merger, Ivy Developing Markets Fund had capital loss carryovers available to offset future gains of the Ivy Pacific Opportunities Fund. These carryovers are limited to $157,220 for each period ending from March 31, 2005 through 2010 plus any unused limitations from prior years.

Note 5 - Multiclass Operations

Each Fund within the Trust (other than Ivy Cash Reserves Fund) offers four classes of shares, Class A, Class B, Class C and Class Y, each of which have equal rights as to assets and voting privileges. Ivy Cundill Global Value Fund, Ivy European Opportunities Fund, Ivy Global Natural Resources Fund, Ivy International Fund, Ivy International Value Fund and Ivy Pacific Opportunities Fund also offered Advisor Class shares and Ivy Cundill Global Value Fund, Ivy European Opportunities Fund and Ivy International Fund also offered Class I shares. Advisor Class and Class I shares are no longer available for investment. Ivy Cash Reserves Fund Class A is closed to new investors. Ivy Cash Reserves Fund Class B and Class C are both closed to direct investment. A comprehensive discussion of the terms under which shares of each class are offered is contained in the Prospectuses and the Statement of Additional Information for the Trust.

Income, non-class specific expenses, and realized and unrealized gains and losses are allocated daily to each class of shares based on the value of their relative net assets as of the beginning of each day adjusted for the prior day's capital share activity.

Transactions in capital stock for the fiscal period ended September 30, 2004 are summarized below. Amounts are in thousands.


	Ivy Balanced Fund			Ivy Bond Fund			Ivy Cash Reserves Fund
Shares issued from sale of shares:
Class A		260			248			655
Class B		58			22			63
Class C		27			26			13
Class Y		175			1			NA
Shares issued from reinvestment of dividends and/or capital gains distribution:
Class A		14			33			12
Class B		- -			1			5
Class C		- -			- -	*		- -	*
Class Y		18			- -	*		NA
Shares redeemed:
Class A		(341	)		(239	)		(1,456	)
Class B		(8	)		(7	)		(1,254	)
Class C		(5	)		(10	)		(95	)
Class Y		(604	)		- -	*		NA

Increase (decrease) in outstanding capital shares		(406	)		75			(2,057	)


Value issued from sale of shares:
Class A	$	3,438		$	2,598		$	655
Class B		760			235			63
Class C		354			273			13
Class Y		2,313			5			NA
Value issued from reinvestment of dividends and/or capital gains distribution:
Class A		188			347			12
Class B		- -			5			5
Class C		- -			3			- -	*
Class Y		236			1			NA
Value redeemed:
Class A		(4,503	)		(2,511	)		(1,456	)
Class B		(99	)		(70	)		(1,254	)
Class C		(65	)		(103	)		(95	)
Class Y		(7,980	)		- -	*		NA

Increase (decrease) in outstanding capital	$	(5,358	)	$	783		$	(2,057	)

*Not shown due to rounding.

	Ivy Cundill Global Value Fund			Ivy Dividend Income Fund

Shares issued from sale of shares:
Class A		8,582			717			1,733
Class B		957			148			194
Class C		2,127			224			216
Class Y		495			26			52
Advisor Class		- -			NA			- -
Class I		- -			NA			- -
Shares issued from reinvestment of dividends:
Class A		- -			2			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -	*		- -
Advisor Class		- -			NA			- -
Class I		- -			NA			- -
Shares redeemed:
Class A		(586	)		(260	)		(1,936	)
Class B		(86	)		(43	)		(226	)
Class C		(102	)		(58	)		(221	)
Class Y		(35	)		- -	*		(131	)
Advisor Class		(24	)		NA			(22	)
Class I		- -			NA			(1	)

Increase (decrease) in outstanding capital shares		11,328			756			(342	)


Value issued from sale of shares:
Class A	$	107,513		$	7,905		$	38,502
Class B		11,796			1,624			4,173
Class C		25,973			2,460			4,653
Class Y		6,185			291			1,159
Advisor Class		- -			NA			- -
Class I		- -			NA			- -
Value issued from reinvestment of dividends:
Class A		- -			20			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			1			- -
Advisor Class		- -			NA			- -
Class I		- -			NA			- -
Value redeemed:
Class A		(7,304	)		(2,856	)		(41,655	)
Class B		(1,057	)		(464	)		(4,809	)
Class C		(1,249	)		(632	)		(4,728	)
Class Y		(436	)		(4	)		(2,963	)
Advisor Class		(304	)		NA			(494	)
Class I		- -			NA			(19	)

Increase (decrease) in outstanding capital	$	141,117		$	8,345		$	(6,181	)

*Not shown due to rounding.

				Ivy International Fund

Shares issued from sale of shares:
Class A		11,386			551			726
Class B		1,357			19			81
Class C		3,508			5			74
Class Y		251			1			7
Advisor Class		- -	*		- -			NA
Class I		NA			- -			NA
Shares issued from reinvestment of dividends:
Class A		- -			- -			20
Class B		- -			- -			- -	*
Class C		- -			- -			- -	*
Class Y		- -			- -			- -	*
Advisor Class		- -			- -			NA
Class I		NA			- -			NA
Shares redeemed:
Class A		(2,057	)		(904	)		(145	)
Class B		(243	)		(791	)		(3	)
Class C		(389	)		(72	)		(5	)
Class Y		(25	)		- -	*		(3	)
Advisor Class		(2	)		- -			NA
Class I		NA			(13	)		NA

Increase (decrease) in outstanding capital shares		13,786			(1,204	)		752


Value issued from sale of shares:
Class A	$	202,517		$	11,382		$	9,330
Class B		23,279			367			1,032
Class C		59,105			87			951
Class Y		4,523			19			91
Advisor Class		- -	*		- -			NA
Class I		NA			- -	*		NA
Value issued from reinvestment of dividends:
Class A		- -			- -			252
Class B		- -			- -			4
Class C		- -			- -			4
Class Y		- -			- -			2
Advisor Class		- -			- -			NA
Class I		NA			- -			NA
Value redeemed:
Class A		(35,516	)		(18,710	)	(1,858		)
Class B		(4,168	)		(15,376	)		(38	)
Class C		(6,312	)		(1,397	)		(67	)
Class Y		(442	)		- -	*		(43	)
Advisor Class		(29	)		- -			NA
Class I		NA			(265	)		NA

Increase (decrease) in outstanding capital	$	242,957		$	(23,893	)	$	9,660

*Not shown due to rounding.

				Ivy Mortgage Securities Fund

Shares issued from sale of shares:
Class A		247			3,571			1,580
Class B		60			287			320
Class C		28			399			170
Class Y		7			121			19
Advisor Class		- -			NA			- -
Shares issued from reinvestment of dividends and/or capital gains distribution:
Class A		- -			247			- -
Class B		- -			4			- -
Class C		- -			5			- -
Class Y		- -			7			- -
Advisor Class		- -			NA			- -
Shares redeemed:
Class A		(154	)		(1,995	)		(590	)
Class B		(494	)		(18	)		(329	)
Class C		(118	)		(65	)		(54	)
Class Y		(3	)		(35	)		(31	)
Advisor Class		(1	)		NA			- -	*

Increase (decrease) in outstanding capital shares		(428	)		2,528			1,085


Value issued from sale of shares:
Class A	$	2,418		$	38,416		$	14,161
Class B		563			3,088			2,652
Class C		260			4,301			1,449
Class Y		73			1,307			171
Advisor Class		- -			NA			- -
Value issued from reinvestment of dividends and/or capital gains distribution:
Class A		- -			2,656			- -
Class B		- -			39			- -
Class C		- -			53			- -
Class Y		- -			75			- -
Advisor Class		- -			NA			- -
Value redeemed:
Class A		(1,512	)	(21,422		)		(5,227	)
Class B		(4,577	)		(193	)		(2,732	)
Class C		(1,075	)		(696	)		(440	)
Class Y		(30	)		(384	)		(279	)
Advisor Class		(7	)		NA			- -	*

Increase (decrease) in outstanding capital	$	(3,887	)	$	27,240		$	9,755

*Not shown due to rounding.

				Ivy Small Cap Value Fund			Ivy Value Fund

Shares issued from sale of shares:
Class A		2,428			1,384			614
Class B		184			132			58
Class C		222			190			83
Class Y		1,409			323			109
Shares issued from reinvestment of dividends and/or capital gains distribution:
Class A		16			- -			4
Class B		- -			- -			- -
Class C		- -	*		- -			- -
Class Y		33			- -			4
Shares redeemed:
Class A		(366	)		(232	)		(161	)
Class B		(15	)		(13	)		(3	)
Class C		(27	)		(9	)		(4	)
Class Y		(537	)		(275	)		(122	)

Increase in outstanding capital shares		3,347			1,500			582


Value issued from sale of shares:
Class A	$	39,114		$	22,356		$	8,875
Class B		2,950			2,124			833
Class C		3,582			3,064			1,199
Class Y		23,127			5,368			1,590
Value issued from reinvestment of dividends and/or capital gains distribution:
Class A		260			- -			50
Class B		- -			- -			- -
Class C		4			- -			- -
Class Y		552			- -			56
Value redeemed:
Class A		(5,752	)		(3,763	)	(2,332		)
Class B		(239	)		(201	)		(47	)
Class C		(422	)		(136	)		(61	)
Class Y		(8,180	)		(4,391	)	(1,757		)

Increase in outstanding capital	$	54,996		$	24,421		$	8,406

*Not shown due to rounding.

Transactions in capital stock for the fiscal period ended March 31, 2004 are summarized below. Amounts are in thousands.

	Ivy Balanced Fund			Ivy Bond Fund

Shares issued from sale of shares:
Class A		239			158			210
Class B		25			26			3,509
Class C		23			11			1,052
Class Y		4,445			2			NA
Shares issued from reinvestment of dividends and/or capital gains distribution:
Class A		12			29			4
Class B		- -	*		- -	*		2
Class C		- -	*		- -	*		-	*
Class Y		17			- -	*		NA
Shares redeemed:
Class A		(492	)		(265	)		(712	)
Class B		- -	*		- -	*	(3,473		)
Class C		- -	*		- -	*	(1,070		)
Class Y		(520	)		- -			NA

Increase (decrease) in outstanding capital shares		3,749			(39	)		(478	)

Value issued from sale of shares:
Class A	$	3,172		$	1,660		$	210
Class B		340			285			3,509
Class C		300			118			1,052
Class Y		57,725			25			NA
Value issued from reinvestment of dividends and/or capital gains distribution:
Class A		158			307			4
Class B		- -	*		- -	*		2
Class C		- -	*		- -	*		-	*
Class Y		222			- -	*		NA
Value redeemed:
Class A		(6,318	)	(2,811		)		(712	)
Class B		(2	)		- -	*	(3,473		)
Class C		(1	)		(4	)	(1,070		)
Class Y		(6,959	)		- -			NA

Increase (decrease) in outstanding capital	$	48,637		$	(420	)	$	(478	)

*Not shown due to rounding.

				Ivy Dividend Income Fund

Shares issued from sale of shares:
Class A		2,186			478			2,570
Class B		319			104			166
Class C		976			132			222
Class Y		91			1			30
Advisor Class		- -			NA			- -
Class I		- -			NA			- -
Shares issued from reinvestment of dividends:
Class A		- -			1			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -	*		- -
Advisor Class		- -			NA			- -
Class I		- -			NA			- -
Shares redeemed:
Class A		(106	)		(384	)		(893	)
Class B		(35	)		(11	)		(211	)
Class C		(43	)		(49	)		(162	)
Class Y		(20	)		- -	*		(6	)
Advisor Class		(8	)		NA			(17	)
Class I		- -			NA			(1	)

Increase in outstanding capital shares		3,360			272			1,698


Value issued from sale of shares:
Class A	$	26,037		$	5,304		$	57,649
Class B		3,746			1,155			3,486
Class C		11,364			1,454			4,819
Class Y		1,099			15			671
Advisor Class		- -			NA			- -
Class I		- -			NA			- -
Value issued from reinvestment of dividends:
Class A		- -			6			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -	*		- -
Advisor Class		- -			NA			- -
Class I		- -			NA			- -
Value redeemed:
Class A		(1,261	)	(4,290		)	(19,595		)
Class B		(412	)		(119	)		(4,452	)
Class C		(499	)		(543	)		(3,521	)
Class Y		(242	)		- -	*		(135	)
Advisor Class		(99	)		NA			(370	)
Class I		- -			NA			(16	)

Increase in outstanding capital	$	39,733		$	2,982		$	38,536

*Not shown due to rounding.

				Ivy International Fund

Shares issued from sale of shares:
Class A		5,636			273			329
Class B		555			17			21
Class C		1,762			34			24
Class Y		138			- -	*		14
Advisor Class		- -			- -			NA
Class I		NA			- -			NA
Shares issued from reinvestment of dividends:
Class A		- -			- -			15
Class B		- -			- -			- -	*
Class C		- -			- -			- -	*
Class Y		- -			- -			- -	*
Advisor Class		- -			- -			NA
Class I		NA			- -			NA
Shares redeemed:
Class A		(470	)		(421	)		(159	)
Class B		(87	)		(388	)		(2	)
Class C		(75	)		(82	)		- -	*
Class Y		(14	)		- -	*		- -	*
Advisor Class		- -			- -			NA
Class I		NA			(2	)		NA

Increase (decrease) in outstanding capital shares		7,445			(569	)		242


Value issued from sale of shares:
Class A	$	96,849		$	5,826		$	4,355
Class B		9,252			350			272
Class C		28,811			681			307
Class Y		2,350			1			190
Advisor Class		- -			- -			NA
Class I		NA			- -			NA
Value issued from reinvestment of dividends:
Class A		- -			- -			188
Class B		- -			- -			- -	*
Class C		- -			- -			- -	*
Class Y		- -			- -			- -	*
Advisor Class		- -			- -			NA
Class I		NA			- -			NA
Value redeemed:
Class A		(8,075	)	(8,982		)	(1,877		)
Class B		(1,439	)	(7,828		)		(25	)
Class C		(1,225	)	(1,636		)		- -	*
Class Y		(248	)		- -	*		(3	)
Advisor Class		- -			- -			NA
Class I		NA			(39	)		NA

Increase (decrease) in outstanding capital	$	126,275		$	(11,627	)	$	3,407

*Not shown due to rounding.

				Ivy Mortgage Securities Fund

Shares issued from sale of shares:
Class A		138			1,699			1,310
Class B		66			109			469
Class C		29			163			96
Class Y		2			289			58
Advisor Class		- -			NA			- -
Shares issued from reinvestment of dividends and/or capital gains distribution:
Class A		- -			239			- -
Class B		- -			- -	*		- -
Class C		- -			1			- -
Class Y		- -			4			- -
Advisor Class		- -			NA			- -
Shares redeemed:
Class A		(89	)		(2,641	)		(191	)
Class B		(248	)		- -	*		(505	)
Class C		(93	)		(3	)		(26	)
Class Y		- -	*		(35	)		(39	)
Advisor Class		- -			NA			- -

Increase (decrease) in outstanding capital shares		(195	)		(175	)		1,172


Value issued from sale of shares:
Class A	$	1,392		$	18,245		$	12,673
Class B		631			1,188			4,292
Class C		277			1,779			889
Class Y		18			3,140			566
Advisor Class		- -			NA			- -
Value issued from reinvestment of dividends and/or capital gains distribution:
Class A		- -			2,562			- -
Class B		- -			5			- -
Class C		- -			8			- -
Class Y		- -			43			- -
Advisor Class		- -			NA			- -
Value redeemed:
Class A		(907	)	(28,848		)		(1,855	)
Class B		(2,366	)		(1	)		(4,627	)
Class C		(890	)		(28	)		(240	)
Class Y		(3	)		(382	)		(379	)
Advisor Class		- -			NA			- -

Increase (decrease) in outstanding capital	$	(1,848	)	$	(2,289	)	$	11,319

*Not shown due to rounding.

				Ivy Small Cap Value Fund			Ivy Value Fund

Shares issued from sale of shares:
Class A		3,076			844			356
Class B		104			56			37
Class C		136			107			49
Class Y		5,370			1,688			1,828
Shares issued from reinvestment of dividends and/or capital gains distribution:
Class A		38			1			8
Class B		- -	*		- -	*		- -	*
Class C		- -	*		- -			- -	*
Class Y		112			2			6
Shares redeemed:
Class A		(5,188	)		(1,966	)		(2,266	)
Class B		(2	)		(1	)		(2	)
Class C		(6	)		(3	)		- -	*
Class Y		(132	)		(190	)		(295	)

Increase (decrease) in outstanding capital shares		3,508			538			(279	)


Value issued from sale of shares:
Class A	$	46,287		$	13,860		$	5,069
Class B		1,681			915			532
Class C		2,182			1,745			713
Class Y		82,285			26,101			24,996
Value issued from reinvestment of dividends and/or capital gains distribution:
Class A		557			20			101
Class B		1			- -	*		- -	*
Class C		1			- -			- -	*
Class Y		1,674			30			80
Value redeemed:
Class A	(78,286		)	(29,974		)	(30,768		)
Class B		(23	)		(7	)		(24	)
Class C		(94	)		(46	)		(2	)
Class Y		(2,042	)		(3,047	)		(4,201	)

Increase (decrease) in outstanding capital	$	54,223		$	9,597		$	(3,504	)

*Not shown due to rounding.

Transactions in capital stock for the fiscal year ended July 31, 2003 are summarized below. Amounts are in thousands.

				Ivy Small Cap Value Fund				Ivy Value Fund

Shares issued from sale of shares:
Class A		2,470			1,498			954
Class B		76			75			33
Class C		NA			377			3
Shares issued from reinvestment of dividends and/or capital gains distribution:
Class A		180			145			27
Class B		7			32			1
Class C		NA			16			- -	*
Shares redeemed:
Class A		(867	)		(1,436	)		(821	)
Class B		(15	)		(81	)		(177	)
Class C		NA			(430	)		(14	)

Increase in outstanding capital shares		1,851			196			6


Value issued from sale of shares:
Class A	$	28,996		$	16,953		$	10,775
Class B		896			814			363
Class C		NA			4,256			34
Value issued from reinvestment of dividends and/or capital gains distribution:
Class A		2,069			1,572			300
Class B		79			337			11
Class C		NA			164			1
Value redeemed:
Class A		(9,968	)	(15,623		)		(9,201	)
Class B		(169	)		(853	)		(1,999	)
Class C		NA			(4,472	)		(155	)

Increase in outstanding capital	$	21,903		$	3,148		$	129

*Not shown due to rounding.

Transactions in capital stock for the fiscal year ended September 30, 2003 are summarized below. Amounts are in thousands.

				Ivy Bond Fund

Shares issued from sale of shares:
Class A		385			473			1,231
Class B		44			106			45
Class C		8			32			167
Shares issued from reinvestment of dividends:
Class A		42			44			- -
Class B		6			16			- -
Class C		1			3			- -
Shares redeemed:
Class A		(831	)		(499	)		(1,379	)
Class B		(298	)		(268	)		(104	)
Class C		(59	)		(37	)		(195	)

Decrease in outstanding capital shares		(702	)		(130	)		(235	)


Value issued from sale of shares:
Class A	$	4,362		$	5,036		$	11,909
Class B		494			1,123			419
Class C		90			340			1,502
Value issued from reinvestment of dividends:
Class A		476			469			- -
Class B		63			173			- -
Class C		13			33			- -
Value redeemed:
Class A		(9,475	)		(5,304	)	(13,381		)
Class B		(3,364	)		(2,849	)		(996	)
Class C		(677	)		(393	)		(1,777	)

Decrease in outstanding capital	$	(8,018	)	$	(1,372	)	$	(2,324	)



Shares issued from sale of shares:
Class A		4,792
Class B		1,189
Class C		881
Shares issued from reinvestment of dividends:
Class A		277
Class B		113
Class C		44
Shares redeemed:
Class A		(2,835	)
Class B		(683	)
Class C		(533	)

Increase in outstanding capital shares		3,245


Value issued from sale of shares:
Class A	$	52,795
Class B		13,137
Class C		9,731
Value issued from reinvestment of dividends:
Class A		3,045
Class B		1,247
Class C		485
Value redeemed:
Class A	(31,178		)
Class B		(7,526	)
Class C		(5,846	)

Increase in outstanding capital	$	35,890

Transactions in capital stock for the fiscal year ended December 31, 2003 are summarized below. Amounts are in thousands.

	Ivy Cash Reserves Fund			Ivy Cundill Global Value Fund			Ivy Dividend Income Fund

Shares issued from sale of shares:
Class A		3,858			2,575			1,485
Class B		13,680			497			142
Class C		58,100			1,182			438
Class Y		NA			120			55
Advisor Class		NA			143			NA
Class I		NA			- -	*		NA
Shares issued from reinvestment of dividends:
Class A		33			7			5
Class B		18			- -			- -	*
Class C		3			- -			- -	*
Class Y		NA			- -	*		- -	*
Advisor Class		NA			1			NA
Class I		NA			- -	*		NA
Shares redeemed:
Class A		(12,342	)		(161	)		(64	)
Class B		(16,820	)		(83	)		(3	)
Class C		(58,732	)		(232	)		(10	)
Class Y		NA			(19	)		- -	*
Advisor Class		NA			(76	)		NA
Class I		NA			- -	*		NA

Increase (decrease) in outstanding capital shares		(12,202	)		3,954			2,048


Value issued from sale of shares:
Class A	$	3,858		$	27,522		$	15,123
Class B		13,680			5,090			1,446
Class C		58,100			11,674			4,455
Class Y		NA			1,282			549
Advisor Class		NA			1,190			NA
Class I		NA			- -	*		NA
Value issued from reinvestment of dividends:
Class A		33			77			47
Class B		18			- -			1
Class C		3			- -			3
Class Y		NA			3			2
Advisor Class		NA			15			NA
Class I		NA			- -	*		NA
Value redeemed:
Class A		(12,342	)		(1,671	)		(655	)
Class B		(16,820	)		(785	)		(28	)
Class C		(58,732	)		(2,000	)		(108	)
Class Y		NA			(206	)		- -	*
Advisor Class		NA			(778	)		NA
Class I		NA			- -	*		NA

Increase (decrease) in outstanding capital	$	(12,202	)	$	41,413		$	20,835

*Not shown due to rounding.

				Ivy Global Natural Resources Fund

Shares issued from sale of shares:
Class A		932			4,740			3,995
Class B		491			776			99
Class C		597			1,833			2,887
Class Y		139			79			6
Advisor Class		3,100			205			- -
Class I		- -			NA			959
Shares issued from reinvestment of dividends:
Class A		4			14			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -	*		- -	*		- -
Advisor Class		- -			- -	*		- -
Class I		1			NA			- -
Shares redeemed:
Class A		(597	)		(524	)		(5,742	)
Class B		(892	)		(226	)		(1,674	)
Class C		(893	)		(178	)		(3,164	)
Class Y		(1	)		(2	)		- -	*
Advisor Class		(3,322	)		(225	)		- -	*
Class I		(1	)		NA			(1,006	)

Increase (decrease) in outstanding capital shares		(442	)		6,492			(3,640	)


Value issued from sale of shares:
Class A	$	15,854		$	68,336		$	67,491
Class B		7,360			10,480			1,593
Class C		7,935			24,953			44,651
Class Y		2,176			1,181			117
Advisor Class		39,824			2,276			- -	*
Class I		- -	*		NA			15,323
Value issued from reinvestment of dividends:
Class A		70			226			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		1			3			- -
Advisor Class		12			2			- -
Class I		- -	*		NA			- -
Value redeemed:
Class A		(8,450	)		(6,805	)		(98,667	)
Class B	(12,783		)		(2,747	)		(27,506	)
Class C	(12,151		)		(2,162	)		(49,741	)
Class Y		(8	)		(21	)		- -	*
Advisor Class	(43,719		)		(2,550	)		(3	)
Class I		(11	)		NA			(16,095	)

Increase (decrease) in outstanding capital	$	(3,890	)	$	93,172		$	(62,837	)

*Not shown due to rounding.



Shares issued from sale of shares:
Class A		407			2,262
Class B		468			1,770
Class C		2,462			420
Class Y		13			55
Advisor Class		899			- -
Shares issued in connection with merger of Ivy Developing Markets Fund:
Class A		NA			262
Class B		NA			229
Class C		NA			56
Class Y		NA			- -
Advisor Class		NA			5
Shares issued from reinvestment of dividends:
Class A		- -			- -
Class B		- -			- -
Class C		- -			- -
Class Y		- -			- -
Advisor Class		- -			- -
Shares redeemed:
Class A		(528	)		(1,480	)
Class B		(1,587	)		(1,808	)
Class C		(2,863	)		(330	)
Class Y		- -	*		(1	)
Advisor Class		(911	)		(4	)

Increase (decrease) in outstanding capital shares		(1,640	)		1,436


Value issued from sale of shares:
Class A	$	3,283		$	16,622
Class B		3,706			11,146
Class C		17,505			2,577
Class Y		105			428
Advisor Class		6,790			- -
Value issued in connection with merger of Ivy Developing Markets Fund:
Class A		NA			1,714
Class B		NA			1,432
Class C		NA			353
Class Y		NA			- -
Advisor Class		NA			34
Value issued from reinvestment of dividends:
Class A		- -			- -
Class B		- -			- -
Class C		- -			- -
Class Y		- -			- -
Advisor Class		- -			- -
Value redeemed:
Class A		(4,223	)		(9,618	)
Class B		(12,340	)	(11,772		)
Class C		(20,799	)		(2,046	)
Class Y		- -	*		(7	)
Advisor Class		(6,945	)		(110	)

Increase (decrease) in outstanding capital	$	(12,918	)	$	10,753

*Not shown due to rounding.

NOTE 6 - Options

Options purchased by a Fund are accounted for in the same manner as marketable portfolio securities. The cost of portfolio securities acquired through the exercise of call options is increased by the premium paid to purchase the call. The proceeds from securities sold through the exercise of put options are decreased by the premium paid to purchase the put.

When the Fund writes (sells) an option, an amount equal to the premium received by the Fund is recorded as a liability. The amount of the liability is subsequently adjusted to reflect the current market value of the option written. The current market value of an option is the last sales price on the principal exchange on which the option is traded or, in the absence of transactions, the mean between the bid and asked prices or at a value supplied by a broker-dealer. When an option expires on its stipulated expiration date or the Fund enters into a closing purchase transaction, the Fund realizes a gain (or loss if the cost of a closing purchase transaction exceeds the premium received when the call option was sold) and the liability related to such option is extinguished. When a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether the Fund has realized a gain or loss. For each Fund, when a written put is exercised, the cost basis of the securities purchased by the Fund is reduced by the amount of the premium received.

For Ivy Value Fund, transactions in call options written were as follows:

			Premiums Received

Outstanding at March 31, 2004	258		$	13,810
Options written	1,932			160,988
Options terminated in closing purchase transactions	(416	)	(52,781		)
Options exercised	(374	)	(30,078		)
Options expired	(675	)	(37,044		)

Outstanding at September 30, 2004	725		$	54,895

For Ivy Value Fund, transactions in put options written were as follows:

			Premiums Received

Outstanding at March 31, 2004	1,278		$	29,478
Options written	1,376			63,255
Options terminated in closing purchase transactions	- -			- -
Options exercised	(760	)	(30,269		)
Options expired	(1,543	)	(50,539		)

Outstanding at September 30, 2004	351		$	11,925

NOTE 7 - Acquisition of Ivy Developing Markets Fund

On June 16, 2003, Ivy Pacific Opportunities Fund acquired all the net assets of Ivy Developing Markets Fund pursuant to a plan of reorganization approved by the shareholders of Ivy Developing Markets Fund on June 10, 2003. The acquisition was accomplished by a tax-free exchange of 551,715 shares of Ivy Pacific Opportunities Fund (valued at $3,533,026) for the 576,365 shares of Ivy Developing Markets Fund outstanding on June 16, 2003. Ivy Developing Markets Fund had net assets of $3,533,026, including $229,612 of net unrealized appreciation in value of investment and $12,504,526 of accumulated net realized losses on investments, which were combined with those of Ivy Pacific Opportunities Fund. The aggregate net assets of Ivy Pacific Opportunities Fund and Ivy Developing Markets Fund immediately before the acquisition were $9,010,093 and $3,533,026, respectively. The aggregate net assets of Ivy Pacific Opportunities Fund and Ivy Developing Markets Fund immediately following the acquisition were $12,543,119 and $0, respectively.

NOTE 8 - Reorganization Plan for Ivy Balanced Fund, Ivy Bond Fund, Ivy International Balanced Fund, Ivy Mortgage Securities Fund, Ivy Real Estate Securities Fund, Ivy Small Cap Value Fund and Ivy Value Fund

On December 8, 2003, the Trust's Board of Trustees approved a plan of reorganization, subject to shareholder approval and certain other conditions, whereby Ivy Balanced Fund, Ivy Bond Fund, Ivy International Balanced Fund, Ivy Mortgage Securities Fund, Ivy Real Estate Securities Fund, Ivy Small Cap Value Fund and Ivy Value Fund would acquire the assets and liabilities of Advantus Spectrum Fund, Advantus Bond Fund, Advantus International Balanced Fund, Advantus Mortgage Securities Fund, Advantus Real Estate Securities Fund, Advantus Venture Fund and Advantus Cornerstone Fund, respectively, in exchange for newly issued Class A shares of the above mentioned Ivy Funds. Advantus Spectrum Fund, Advantus Bond Fund, Advantus International Balanced Fund, Advantus Mortgage Securities Fund, Advantus Real Estate Securities Fund, Advantus Venture Fund and Advantus Cornerstone Fund had three classes of shares, Class A, Class B and Class C.

Report of Independent Registered Public Accounting Firm

The Board of Trustees and
Shareholders of Ivy Funds:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Balanced Fund, Bond Fund, Cash Reserves Fund, Cundill Global Value Fund, Dividend Income Fund, European Opportunities Fund, Global Natural Resources Fund, International Fund, International Balanced Fund, International Value Fund, Mortgage Securities Fund, Pacific Opportunities Fund, Real Estate Securities Fund, Small Cap Value Fund and Value Fund (collectively the "Funds") comprising Ivy Funds as of September 30, 2004, and the related statements of operations for the six-month period then ended, and the statements of changes in net assets and financial highlights for the periods presented (except as noted below). These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial statements and the financial highlights of the Real Estate Securities Fund, Small Cap Value Fund and Value Fund for each of the periods presented in the five-year period ended July 31, 2003 were audited by other auditors whose report, dated September 5, 2003, expressed an unqualified opinion on those financial statements and financial highlights. The financial statements and the financial highlights of the Balanced Fund, Bond Fund, International Balanced Fund and Mortgage Securities Fund for each of the periods presented in the five-year period ended September 30, 2003 were audited by other auditors whose report, dated November 7, 2003, expressed an unqualified opinion on those financial statements and financial highlights. The financial highlights of the Cash Reserves Fund, Cundill Global Value Fund, European Opportunities Fund, Global Natural Resources Fund, International Fund, International Value Fund and Pacific Opportunities Fund for each of the periods presented in the three-year period ended December 31, 2001 were audited by other auditors who se report, dated February 8, 2002, expressed an unqualified opinion on those financial statements and financial highlights.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2004, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the respective Funds of Ivy Funds as of September 30, 2004, the results of their operations for the six-month period then ended, the changes in their net assets and their financial highlights for the periods presented (except as noted above), in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP
Kansas City, Missouri
November 16, 2004

Shareholder Meeting Results

On September 9, 2004, a special shareholder meeting (the "Meeting") for Ivy Global Natural Resources Fund, a series of Ivy Trust, was held at the offices of Waddell & Reed Financial, Inc., 6300 Lamar Avenue, Overland Park, Kansas, 66202. The meeting was held for the following purposes (and with the following results):

Proposal 1(a): To approve a new investment management agreement between the Trust, on behalf of Ivy Global Natural Resources Fund, and Waddell & Reed Ivy Investment Company.

	For	Against	Abstain
	17,997,636.790	205,354.709	270,586.684

Proposal 1(b): To approve a sub-advisory agreement between Waddell & Reed Ivy Investment Company and Mackenzie Financial Corporation with respect to Ivy Global Natural Resources Fund.

	For	Against	Abstain
	17,949,323.881	234,122.902	290,131.400

Proposal 2: To approve the retention of fees paid and payment of fees payable for investment advisory services rendered by Mackenzie Financial Corporation for the period from March 1, 2003 through the effective date of the proposed sub-advisory agreement.

	For	Against	Abstain
	17,717,698.487	444,301.890	311,577.806

Proxy Voting Information 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 800.777.6472 and (ii) on the Securities and Exchange Commission's ("SEC") website at
http://www.sec.gov.

Proxy Voting Records

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12 month period ending June 30 is available on Form N-PX through the Fund's website at http://www.ivyfunds.com and on the SEC's website at http://www.sec.gov.

Quarterly Portfolio Schedule Information

Beginning with the quarter ending December 31, 2004, a complete schedule of portfolio holdings for the first and third quarters of each fiscal year will be filed with the SEC on the Fund's Form N-Q. Form N-Q may be obtained in the following ways:

On the SEC's website at http://www.sec.gov.
For review and copy at the SEC's Public Reference Room in Washington, DC. Information on the operations of the Public Reference Room may be obtained by calling 1.800.SEC.0330.
On the Fund's website at http://www.ivyfunds.com.

To all Traditional IRA Planholders:

As required by law, we are hereby providing notice to you that income tax may be withheld automatically from any distribution or withdrawal from a traditional IRA. We will not withhold taxes unless you make a written election to have taxes withheld. The election may be made on the distribution/withdrawal form provided by Waddell & Reed, Inc. which can be obtained from your Waddell & Reed representative or by submitting Internal Revenue Service Form W-4P. Once made, an election can be revoked by providing written notice to Waddell & Reed, Inc. If you elect not to have tax withheld you may be required to make payments of estimated tax. Penalties may be imposed by the IRS if withholding and estimated tax payments are not adequate.

The statements of operations and statement of changes for Ivy Pacific Opportunities Fund and Note 5 and Note 7 to the financial statements for the reporting period ended June 30, 2003 and contained in the shareholder report for that period have been reclassified to reflect revised information. The reports sent to shareholders for the reporting periods thereafter, including this report, contain the revised information and amended filings have been submitted to conform to the current presentation. The changes to the report dated June 30, 2003 had no impact on the Fund or the Fund's total net assets.

THE IVY FUNDS FAMILY

Global/International Funds

Cundill Global Value Fund
European Opportunities Fund
International Fund
International Balanced Fund
International Growth Fund
International Value Fund
Pacific Opportunities Fund

Domestic Equity Funds

Core Equity Fund
Dividend Income Fund
Large Cap Growth Fund
Mid Cap Growth Fund
Small Cap Growth Fund
Small Cap Value Fund
Tax-Managed Equity Fund
Value Fund

Fixed Income Funds

Bond Fund
High Income Fund
Limited-Term Bond Fund
Mortgage Securities Fund
Municipal Bond Fund

Money Market Fund

Money Market Fund

Specialty Funds

Asset Strategy Fund
Balanced Fund
Global Natural Resources Fund
Real Estate Securities Fund
Science and Technology Fund

1.800.777.6472
Visit us online at www.ivyfunds.com

The Ivy Funds are managed by Waddell & Reed Ivy Investment Company and distributed by its subsidiary, Ivy Funds Distributor, Inc.

Waddell & Reed Financial, Inc., the ultimate parent company of Ivy Funds Distributor, Inc., acquired the investment adviser to the Ivy Funds in December 2002.

Investors should consider the investment objectives, risks, charges and expenses of a fund carefully before investing. For a prospectus containing this and other information for the Ivy Funds, call your financial advisor or visit us online at www.ivyfunds.com. Please read the prospectus carefully before investing.

WRR3300SA

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.

Provided in shareholder report.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The Registrant has no such procedures.

ITEM 10. 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 over the registrant's last fiscal half-year that has affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

ITEM 11. 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/Kristen A. Richards
	Kristen A. Richards, Vice President and Secretary

Date December 9, 2004

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 9, 2004


By	/s/Theodore W. Howard
	Theodore W. Howard, Treasurer and Principal Financial Officer

Date December 9, 2004

Ivy Funds Inactive N-CSRSCertified semi-annual shareholder report (management investment company)

Semiannual Report

Ivy Balanced Fund

Ivy Bond Fund

Ivy Cash Reserves Fund

Ivy Cundill Global Value Fund

Ivy Dividend Income Fund

Ivy European Opportunities Fund

Ivy Global Natural Resources Fund

Ivy International Fund

Ivy International Balanced Fund

Ivy International Value Fund

Ivy Mortgage Securities Fund

Ivy Pacific Opportunities Fund

Ivy Real Estate Securities Fund

Ivy Small Cap Value Fund

Ivy Value Fund

CONTENTS

President's Letter

Illustration of Fund Expenses

The Investments of Ivy Balanced Fund

The Investments of Ivy Bond Fund

The Investments of Ivy Cash Reserves Fund

The Investments of Ivy Cundill Global Value Fund

The Investments of Ivy Dividend Income Fund

The Investments of Ivy European Opportunities Fund

The Investments of Ivy Global Natural Resources Fund

The Investments of Ivy International Fund

The Investments of Ivy International Balanced Fund

The Investments of Ivy International Value Fund

The Investments of Ivy Mortgage Securities Fund

The Investments of Ivy Pacific Opportunities Fund

The Investments of Ivy Real Estate Securities Fund

The Investments of Ivy Small Cap Value Fund

The Investments of Ivy Value Fund

Notes To Financial Statements

Report of Independent Registered Public Accounting Firm

Shareholder Meeting Results

Global/International Funds

Domestic Equity Funds

Fixed Income Funds

Money Market Fund

Specialty Funds

1.800.777.6472Visit us online at www.ivyfunds.com

1.800.777.6472
Visit us online at www.ivyfunds.com