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

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-01028

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, 2005

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, 2005

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

3	President's Letter
5	Illustration of Fund Expenses
13	Ivy Balanced Fund
29	Ivy Bond Fund
47	Ivy Cash Reserves Fund
58	Ivy Cundill Global Value Fund
71	Ivy Dividend Income Fund
84	Ivy European Opportunities Fund
97	Ivy Global Natural Resources Fund
111	Ivy International Fund
125	Ivy International Balanced Fund
141	Ivy International Value Fund
154	Ivy Mortgage Securities Fund
171	Ivy Pacific Opportunities Fund
184	Ivy Real Estate Securities Fund
195	Ivy Small Cap Value Fund
208	Ivy Value Fund
221	Notes to Financial Statements
250	Report of Independent Registered Public Accounting Firm
251	Renewal of Investment Management Agreements
258	Proxy Voting Information
258	Quarterly Portfolio Schedule Information
258	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 in the Funds unless preceded or accompanied by a current Ivy Funds prospectus and current performance information.

President's Letter
September 30, 2005

Dear Shareholder:

Enclosed is our report on your Fund's operations for the six months ended September 30, 2005. Over the period, the financial markets remained fairly resilient in the face of challenges from a variety of directions. The S&P 500 Index increased 5.02 percent during the six-month period, while the Dow Jones Industrial Average rose 1.76 percent. Bonds also rose slightly, with the Citigroup Broad Investment Grade Index returning 2.43 percent over the last six months.

Between April and September, the financial markets weathered increasing energy prices, rising interest rates, budding inflationary pressures and, most dramatically, the fallout from two major hurricanes that tragically struck this country's Gulf Coast. Hurricane Katrina silenced an entire major American city, along with the largest port facility in the country, which is the fifth largest port in the world. Compounded by Hurricane Rita several weeks later, it brought devastating circumstances across four states and an economic impact that is still being evaluated.

Despite the setbacks, the U.S. economy has remained solid. Corporate profits overall have generally been relatively strong, and global economies remain fundamentally sound. We do believe, however, that economic growth likely will slow somewhat in the U.S. in the third and fourth quarters of 2005, due to higher interest rates and higher energy prices.

The Federal Reserve apparently believes the economy is sound enough that it has continued its campaign of steadily raising short-term interest rates. Most recently, the Fed enacted another quarter-point increase in late September, bringing interest rates to 3.75 percent. The Fed stated that it still believes monetary conditions remain "accommodative," indicating apparently that they intend to continue raising rates somewhat further.

The other major development during the period was the rapid rise of oil prices. Crude oil hovered just above $40 per barrel at the onset of 2005. By the end of September, the price surpassed $65 per barrel. The world is facing constraints in supply such as we have never seen before. Many are forecasting that prices may ease some toward year-end, but we believe that, longer term, higher prices are here to stay. As investors, we must remain aware of that reality, its impact on the world economies, and any opportunities that it may create.

Regardless of the short-term challenges brought on by economic or geopolitical events - and although past performance is no guarantee of future results - stocks have historically continued to rise over time. That is why we believe it is important to develop and maintain a long-term financial plan for your personal situation. Through appropriate diversification among four or five or so different asset classes, you can potentially provide more balance to your investment portfolio over time.

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

Thank you for your partnership and your continued commitment to your investment program.

Respectfully,
Henry J. Herrmann, CFA
President

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

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, 2005.

Actual Expenses

The first line for each share class in the following tables 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 ch arged 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 following tables 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 to tal costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Ivy Balanced Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return (1)
Class A	$	1,000	$	1,036.30		1.43	%	$	7.32
Class B		1,000		1,030.80		2.43			12.37
Class C		1,000		1,031.50		2.34			11.94
Class Y		1,000		1,037.20		1.27			6.47
Based on 5% Return (2)
Class A	$	1,000	$	1,017.88		1.43	%	$	7.25
Class B		1,000		1,012.89		2.43			12.26
Class C		1,000		1,013.32		2.34			11.83
Class Y		1,000		1,018.72		1.27			6.41

Ivy Bond Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return (1)
Class A	$	1,000	$	1,019.90		1.25	%	$	6.32
Class B		1,000		1,014.00		2.41			12.15
Class C		1,000		1,014.30		2.33			11.78
Class Y		1,000		1,019.30		1.37			6.92
Based on 5% Return (2)
Class A	$	1,000	$	1,018.81		1.25	%	$	6.32
Class B		1,000		1,013.00		2.41			12.15
Class C		1,000		1,013.37		2.33			11.78
Class Y		1,000		1,018.22		1.37			6.91

Ivy Cash Reserves Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return (1)
Class A	$	1,000	$	1,010.10		1.25	%	$	6.30
Class B		1,000		1,010.10		1.25			6.30
Class C		1,000		1,010.10		1.25			6.30
Based on 5% Return (2)
Class A	$	1,000	$	1,018.80		1.25	%	$	6.33
Class B		1,000		1,018.80		1.25			6.33
Class C		1,000		1,018.80		1.25			6.33

Ivy Cundill Global Value Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return (1)
Class A	$	1,000	$	1,087.00		1.68	%	$	8.81
Class B		1,000		1,082.00		2.56			13.36
Class C		1,000		1,083.80		2.33			12.19
Class Y		1,000		1,089.70		1.17			6.15
Class I		1,000		1,088.30		1.31			6.88
Advisor Class		1,000		1,090.10		1.15			6.04
Based on 5% Return (2)
Class A	$	1,000	$	1,016.63		1.68	%	$	8.51
Class B		1,000		1,012.24		2.56			12.91
Class C		1,000		1,013.37		2.33			11.78
Class Y		1,000		1,019.18		1.17			5.95
Class I		1,000		1,018.48		1.31			6.65
Advisor Class		1,000		1,019.29		1.15			5.84

Ivy Dividend Income Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return (1)
Class A	$	1,000	$	1,098.40		1.51	%	$	7.92
Class B		1,000		1,094.30		2.36			12.41
Class C		1,000		1,093.50		2.33			12.25
Class Y		1,000		1,099.20		1.36			7.16
Based on 5% Return (2)
Class A	$	1,000	$	1,017.52		1.51	%	$	7.62
Class B		1,000		1,013.22		2.36			11.93
Class C		1,000		1,013.37		2.33			11.78
Class Y		1,000		1,018.25		1.36			6.88

Ivy European Opportunities Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return (1)
Class A	$	1,000	$	1,039.60		1.73	%	$	8.85
Class B		1,000		1,035.90		2.49			12.68
Class C		1,000		1,035.80		2.43			12.40
Class Y		1,000		1,040.20		1.54			7.88
Advisor Class		1,000		1,041.70		1.24			6.36
Based on 5% Return (2)
Class A	$	1,000	$	1,016.39		1.73	%	$	8.75
Class B		1,000		1,012.61		2.49			12.54
Class C		1,000		1,012.89		2.43			12.26
Class Y		1,000		1,017.35		1.54			7.79
Advisor Class		1,000		1,018.84		1.24			6.29

Ivy Global Natural Resources Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return (1)
Class A	$	1,000	$	1,182.80		1.45	%	$	7.92
Class B		1,000		1,177.30		2.28			12.47
Class C		1,000		1,178.20		2.19			11.98
Class Y		1,000		1,184.10		1.20			6.57
Advisor Class		1,000		1,183.50		1.31			7.18
Based on 5% Return (2)
Class A	$	1,000	$	1,017.81		1.45	%	$	7.32
Class B		1,000		1,013.62		2.28			11.53
Class C		1,000		1,014.07		2.19			11.08
Class Y		1,000		1,019.05		1.20			6.08
Advisor Class		1,000		1,018.49		1.31			6.64

Ivy International Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return (1)
Class A	$	1,000	$	1,145.70		1.65	%	$	8.85
Class B		1,000		1,138.50		2.88			15.44
Class C		1,000		1,140.10		2.68			14.38
Class Y		1,000		1,145.70		1.62			8.73
Class I		1,000		1,146.10		1.41			7.61
Advisor Class		1,000		1,127.40		4.65			24.79
Based on 5% Return (2)
Class A	$	1,000	$	1,016.82		1.65	%	$	8.32
Class B		1,000		1,010.63		2.88			14.52
Class C		1,000		1,011.63		2.68			13.52
Class Y		1,000		1,016.93		1.62			8.21
Class I		1,000		1,017.98		1.41			7.15
Advisor Class		1,000		1,001.76		4.65			23.33

Ivy International Balanced Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return (1)
Class A	$	1,000	$	1,037.70		1.44	%	$	7.34
Class B		1,000		1,031.80		2.61			13.31
Class C		1,000		1,033.10		2.33			11.88
Class Y		1,000		1,037.20		1.43			7.30
Based on 5% Return (2)
Class A	$	1,000	$	1,017.87		1.44	%	$	7.26
Class B		1,000		1,011.97		2.61			13.18
Class C		1,000		1,013.38		2.33			11.77
Class Y		1,000		1,017.90		1.43			7.23

Ivy International Value Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return (1)
Class A	$	1,000	$	1,158.50		1.94	%	$	10.52
Class B		1,000		1,154.00		2.73			14.77
Class C		1,000		1,154.10		2.76			14.90
Class Y		1,000		1,159.80		1.82			9.84
Advisor Class		1,000		1,159.70		1.88			10.16
Based on 5% Return (2)
Class A	$	1,000	$	1,015.32		1.94	%	$	9.82
Class B		1,000		1,011.36		2.73			13.79
Class C		1,000		1,011.24		2.76			13.91
Class Y		1,000		1,015.96		1.82			9.18
Advisor Class		1,000		1,015.66		1.88			9.48

Ivy Mortgage Securities Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return (1)
Class A	$	1,000	$	1,020.60		0.95	%	$	4.81
Class B		1,000		1,014.50		2.15			10.85
Class C		1,000		1,015.60		1.94			9.82
Class Y		1,000		1,020.10		1.05			5.32
Based on 5% Return (2)
Class A	$	1,000	$	1,020.31		0.95	%	$	4.81
Class B		1,000		1,014.30		2.15			10.85
Class C		1,000		1,015.33		1.94			9.81
Class Y		1,000		1,019.80		1.05			5.32

Ivy Pacific Opportunities Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return (1)
Class A	$	1,000	$	1,155.50		2.05	%	$	11.10
Class B		1,000		1,150.40		3.00			16.16
Class C		1,000		1,150.90		2.88			15.54
Class Y		1,000		1,157.50		1.74			9.42
Advisor Class		1,000		1,159.00		1.47			7.96
Based on 5% Return (2)
Class A	$	1,000	$	1,014.77		2.05	%	$	10.38
Class B		1,000		1,010.04		3.00			15.11
Class C		1,000		1,010.62		2.88			14.53
Class Y		1,000		1,016.34		1.74			8.80
Advisor Class		1,000		1,017.70		1.47			7.44

Ivy Real Estate Securities Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return (1)
Class A	$	1,000	$	1,158.90		1.66	%	$	9.00
Class B		1,000		1,153.20		2.68			14.48
Class C		1,000		1,153.50		2.48			13.39
Class Y		1,000		1,160.40		1.40			7.59
Based on 5% Return (2)
Class A	$	1,000	$	1,016.73		1.66	%	$	8.41
Class B		1,000		1,011.62		2.68			13.53
Class C		1,000		1,012.63		2.48			12.52
Class Y		1,000		1,018.04		1.40			7.09

Ivy Small Cap Value Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return (1)
Class A	$	1,000	$	1,055.10		1.81	%	$	9.34
Class B		1,000		1,050.00		2.84			14.61
Class C		1,000		1,051.60		2.55			13.11
Class Y		1,000		1,057.30		1.41			7.28
Based on 5% Return (2)
Class A	$	1,000	$	1,015.98		1.81	%	$	9.16
Class B		1,000		1,010.82		2.84			14.33
Class C		1,000		1,012.29		2.55			12.86
Class Y		1,000		1,017.99		1.41			7.14

Ivy Value Fund Expenses
For the Six Months Ended September 30, 2005	Beginning Account Value 3-31-05		Ending Account Value 9-30-05		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return (1)
Class A	$	1,000	$	1,032.70		1.57	%	$	8.02
Class B		1,000		1,027.50		2.53			12.86
Class C		1,000		1,028.10		2.45			12.43
Class Y		1,000		1,033.40		1.32			6.72
Based on 5% Return (2)
Class A	$	1,000	$	1,017.18		1.57	%	$	7.96
Class B		1,000		1,012.38		2.53			12.77
Class C		1,000		1,012.81		2.45			12.34
Class Y		1,000		1,018.46		1.32			6.67

*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, 2005, 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 illustrations are based on ongoing costs only and do 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, 2005, Ivy Balanced Fund had net assets totaling $97,336,757 invested in a diversified portfolio of:

75.00%	Common Stocks
12.00%	United States Government and Government Agency Obligations
7.59%	Corporate Debt Securities
4.79%	Cash and Cash Equivalents
0.62%	Other Government Security

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Common Stocks	$	75.00
United States Government and Government Agency Obligations	$	12.00
Corporate Debt Securities	$	7.59
Cash and Cash Equivalents	$	4.79
Other Government Security	$	0.62

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Technology Stocks	$	15.39
United States Government and Government Agency Obligations	$	12.00
Financial Services Stocks	$	11.36
Health Care Stocks	$	10.86
Corporate Debt Securities	$	7.59
Energy Stocks	$	7.39
Consumer Nondurables Stocks	$	5.76
Cash and Cash Equivalents	$	4.79
Utilities Stocks	$	4.66
Multi-Industry Stocks	$	3.91
Capital Goods Stocks	$	3.62
Business Equipment and Services Stocks	$	3.29
Retail Stocks	$	3.01
Consumer Services Stocks	$	2.82
Miscellaneous Stocks	$	2.93
Other Government Security	$	0.62

The Investments of Ivy Balanced Fund
September 30, 2005
COMMON STOCKS	Shares			Value
Aircraft - 1.16%
Boeing Company (The)		16,600	$	1,127,970
Banks - 3.72%
Citigroup Inc.		33,700		1,534,024
Northern Trust Corporation		27,800		1,405,429
Wachovia Corporation		14,300		680,537
				3,619,990
Beverages - 1.02%
Brown-Forman Corporation, Class B		16,600		988,364
Business Equipment and Services - 1.40%
Cintas Corporation		33,200		1,363,026
Capital Equipment - 1.91%
Caterpillar Inc.		13,700		804,875
Ingersoll-Rand Company Limited, Class A		27,600		1,055,148
				1,860,023
Chemicals - Specialty - 0.84%
Air Products and Chemicals, Inc.		14,900		821,586
Communications Equipment - 1.74%
Nokia Corporation, Series A, ADR		56,200		950,342
Plantronics, Inc.		24,200		745,602
				1,695,944
Computers - Micro - 1.94%
Apple Computer, Inc.*		17,400		932,901
Dell Inc.*		27,883		953,459
				1,886,360
Computers - Peripherals - 7.15%
Check Point Software Technologies Ltd.*		36,600		888,648
EMC Corporation*		83,800		1,084,372
Electronic Arts Inc.*		12,000		682,740
Microsoft Corporation		77,158		1,984,890
Oracle Corporation*		92,000		1,140,340
Symantec Corporation*		51,900		1,175,275
				6,956,265
Defense - 1.66%
General Dynamics Corporation		13,500		1,613,925
Electrical Equipment - 0.94%
Emerson Electric Co.		12,800		919,040
Electronic Instruments - 1.74%
Lam Research Corporation*		26,600		810,369
Novellus Systems, Inc.		35,200		882,992
				1,693,361
Finance Companies - 2.15%
SLM Corporation		39,100		2,097,324
Food and Related - 2.04%
Campbell Soup Company		41,800		1,243,550
Kellogg Company		16,000		738,080
				1,981,630
Furniture and Furnishings - 1.06%
Masco Corporation		33,500		1,027,780
Health Care - Drugs - 4.27%
Allergan, Inc.		13,500		1,236,870
Amgen Inc.*		16,900		1,346,085
Gilead Sciences, Inc.*		15,500		755,005
Novartis AG, ADR		16,100		821,100
				4,159,060
Health Care - General - 3.25%
Biomet, Inc.		27,400		950,917
Boston Scientific Corporation*		23,800		556,206
Johnson & Johnson		26,200		1,657,936
				3,165,059
Hospital Supply and Management - 3.34%
Medtronic, Inc.		21,800		1,168,916
UnitedHealth Group Incorporated		24,300		1,365,660
WellPoint, Inc.*		9,400		712,708
				3,247,284
Household - General Products - 1.51%
Colgate-Palmolive Company		27,900		1,472,841
Insurance - Property and Casualty - 3.49%
Allstate Corporation (The)		21,000		1,161,090
Berkshire Hathaway Inc., Class B*		400		1,092,400
Chubb Corporation (The)		12,800		1,146,240
				3,399,730
Motion Pictures - 1.79%
News Corporation Limited, Class A		63,400		988,406
News Corporation Limited, Class B		46,000		759,000
				1,747,406
Multiple Industry - 3.91%
General Electric Company		63,680		2,144,106
Las Vegas Sands, Inc.*		22,100		727,311
NRG Energy, Inc.*		22,000		937,200
				3,808,617
Non-Residential Construction - 0.77%
Fluor Corporation		11,700		753,246
Petroleum - International - 4.32%
BP p.l.c., ADR		19,000		1,346,150
ChevronTexaco Corporation		13,500		873,855
Exxon Mobil Corporation		31,200		1,982,448
				4,202,453
Petroleum - Services - 3.07%
Nabors Industries Ltd.*		12,100		869,143
Schlumberger Limited		25,100		2,117,938
				2,987,081
Publishing - 1.03%
Meredith Corporation		20,100		1,002,789
Retail - Food Stores - 1.16%
Walgreen Co.		26,000		1,129,700
Retail - General Merchandise - 1.85%
Kohl's Corporation*		13,700		687,466
Target Corporation		21,500		1,116,495
				1,803,961
Security and Commodity Brokers - 2.00%
American Express Company		17,800		1,022,432
Franklin Resources, Inc.		11,000		923,560
				1,945,992
Timesharing and Software - 1.89%
eBay Inc.*		23,100		951,605
Paychex, Inc.		23,900		885,853
				1,837,458
Tobacco - 1.19%
Altria Group, Inc.		15,700		1,157,247
Trucking and Shipping - 1.03%
Expeditors International of Washington, Inc.		17,600		999,240
Utilities - Electric - 3.45%
Dominion Resources, Inc.		15,700		1,352,398
Exelon Corporation		26,000		1,389,440
PPL Corporation		19,000		614,270
				3,356,108
Utilities - Telephone - 1.21%
Vodafone Group Plc, ADR		45,200		1,173,844
TOTAL COMMON STOCKS - 75.00%			$	73,001,704
(Cost: $63,828,054)

CORPORATE DEBT SECURITIES	Principal Amount in Thousands
Banks - 0.29%
Wells Fargo Bank, N.A.,
7.55%, 6-21-10	$	250		279,521
Beverages - 0.35%
Diageo Capital plc,
3.5%, 11-19-07		350		342,200
Business Equipment and Services - 0.39%
PHH Corporation,
7.125%, 3-1-13		350		376,963
Chemicals - Specialty - 0.36%
Vulcan Materials Company,
6.4%, 2-1-06		350		351,689
Finance Companies - 2.56%
American International Group,
3.85%, 11-26-07 (A)		500		491,013
Banco Hipotecario Nacional:
7.916%, 7-25-09 (A)		7		162
8.0%, 3-31-11 (A)		383		57,476
First Union-Lehman Brothers-Bank of America       Commercial Mortgage Trust,
6.56%, 11-18-35	472			490,016
General Motors Acceptance Corporation,
6.125%, 8-28-07		300		295,319
Prudential Insurance Company of America,
6.6%, 5-15-08 (A)		750		790,133
Unilever Capital Corporation,
5.9%, 11-15-32		350		369,124
				2,493,243
Food and Related - 0.85%
Archer-Daniels-Midland Company,
7.0%, 2-1-31		700		828,504
Insurance - Life - 0.50%
StanCorp Financial Group, Inc.,
6.875%, 10-1-12		450		485,477
Multiple Industry - 1.46%
Cargill, Inc.,
6.375%, 6-1-12 (A)		400		430,856
General Electric Capital Corporation,
2.85%, 1-30-06	1,000			995,959
				1,426,815
Real Estate Investment Trust - 0.83%
Vornado Realty L.P.,
5.625%, 6-15-07		800		806,669
TOTAL CORPORATE DEBT SECURITIES - 7.59%			$	7,391,081
(Cost: $7,286,197)
OTHER GOVERNMENT SECURITY - 0.62%
Canada
Hydro-Quebec,
8.0%, 2-1-13		500	$	600,214
(Cost: $584,487)

UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS
Mortgage-Backed Obligations - 6.72%
Federal National Mortgage Association Fixed Rate       Pass-Through Certificates:
6.23%, 1-1-08	427			436,037
6.0%, 9-1-17		537		554,223
5.0%, 1-1-18		596		594,930
5.5%, 4-1-18		543		551,648
6.5%, 10-1-28		195		203,458
6.5%, 2-1-29		47		49,472
7.0%, 5-1-31		41		43,296
7.5%, 5-1-31		73		78,347
7.0%, 7-1-31		64		67,984
7.0%, 9-1-31		88		92,632
7.0%, 9-1-31		67		70,385
7.0%, 11-1-31		211		220,642
6.5%, 2-1-32		228		236,399
7.0%, 2-1-32		279		293,325
7.0%, 2-1-32		136		143,032
6.5%, 3-1-32		66		68,560
7.0%, 3-1-32		147		154,535
7.0%, 6-1-32		46		48,016
7.0%, 7-1-32		281		296,425
6.5%, 8-1-32		113		116,783
6.0%, 9-1-32		822		836,440
6.5%, 9-1-32		186		192,768
5.5%, 5-1-33		386		385,679
5.5%, 5-1-33		229		229,495
5.5%, 5-1-33		205		205,446
5.5%, 6-1-33		369		368,809
				6,538,766
Treasury Obligations - 5.28%
United States Treasury Bond,
7.5%, 11-15-16		500		632,851
United States Treasury Notes:
3.0%, 2-15-08		900		876,199
4.0%, 3-15-10		800		792,875
3.875%, 2-15-13	1,250			1,217,823
3.625%, 5-15-13		750		719,356
4.25%, 8-15-13		900		896,906
				5,136,010
TOTAL UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS - 12.00%			$	11,674,776
(Cost: $11,770,457)

SHORT-TERM SECURITIES
Capital Equipment - 2.05%
Caterpillar Inc.,
3.75%, 10-7-05	$2,000		1,998,750
Publishing - 3.23%
Tribune Co.,
3.91%, 10-3-05	3,143		3,142,317
TOTAL SHORT-TERM SECURITIES - 5.28%		$	5,141,067
(Cost: $5,141,067)
TOTAL INVESTMENT SECURITIES - 100.49%		$	97,808,842
(Cost: $88,610,262)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.49%)			(472,085	)
NET ASSETS - 100.00%		$	97,336,757

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, 2005, the total value of these securities amounted to $1,769,640 or 1.82% 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, 2005
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $88,610) (Notes 1 and 3)	$	97,809
Cash		174
Receivables:
Investment securities sold		738
Dividends and interest		258
Fund shares sold		39
Prepaid and other assets		19
Total assets		99,037
LIABILITIES
Payable for investment securities purchased		1,387
Payable to Fund shareholders		185
Accrued management fee (Note 2)		56
Accrued shareholder servicing (Note 2)		25
Accrued service fee (Note 2)		20
Accrued accounting services fee (Note 2)		4
Accrued distribution fee (Note 2)		2
Other		21
Total liabilities		1,700
Total net assets	$	97,337
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	92,201
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		72
Accumulated undistributed net realized loss on investment transactions		(4,135	)
Net unrealized appreciation in value of investments		9,199
Net assets applicable to outstanding units of capital	$	97,337
Net asset value per share (net assets divided by shares outstanding):
Class A	$14.45
Class B	$14.41
Class C	$14.42
Class Y	$14.45
Capital shares outstanding:
Class A		3,866
Class B		125
Class C		92
Class Y		2,655

See Notes to Financial Statements.

Statement of Operations
     IVY BALANCED FUND
     For the Six Months Ended September 30, 2005
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	604
Dividends (net of foreign withholding taxes of $-*)		532
Total income		1,136
Expenses (Note 2):
Investment management fee		347
Service fee:
Class A		67
Class B		2
Class C		1
Class Y		52
Shareholder servicing:
Class A		82
Class B		5
Class C		2
Class Y		31
Accounting services fee		24
Audit fees		14
Distribution fee:
Class A		2
Class B		6
Class C		4
Custodian fees		6
Other		45
Total expenses		690
Net investment income		446
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		2,647
Unrealized appreciation in value of investments during the period		461
Net gain on investments		3,108
Net increase in net assets resulting from operations	$	3,554

*Not shown due to rounding.

See Notes to Financial Statements.

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

	For the six months ended September 30,				For the fiscal year ended March 31,
	2005				2005
DECREASE IN NET ASSETS
Operations:
Net investment income		$	446			$	1,125
Realized net gain on investments			2,647				3,533
Unrealized appreciation			461				1,228
Net increase in net assets resulting                        from operations			3,554				5,886
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A			(223	)			(522	)
Class B			(-	)			(-	)*
Class C			(-	)			(1	)
Class Y			(196	)			(585	)
Realized gains on investment transactions:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)
			(419	)			(1,108	)
Capital share transactions (Note 5)			(6,212	)			(9,235	)
Total decrease			(3,077	)			(4,457	)
NET ASSETS
Beginning of period		100,414					104,871
End of period		$	97,337			$	100,414
Undistributed net investment income		$	72			$	45

*Not shown due to rounding.
(1)See "Financial Highlights" on pages 25 - 28.

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 year ended				For the fiscal period ended				For the fiscal year ended September 30,
	9-30-05				3-31-05				3-31-04				2003			2002			2001				2000
Net asset value,     beginning of period		$	14.00			$	13.35			$	12.18		$	10.54		$	11.45		$	19.73		$	17.88
Income (loss) from     investment operations:
Net investment income			0.06				0.14				0.05			0.16			0.23			0.22			0.31
Net realized and         unrealized         gain (loss) on         investments			0.45				0.65				1.16			1.64			(0.89	)		(6.08	)		2.55
Total from     investment operations			0.51				0.79				1.21			1.80			(0.66	)		(5.86	)		2.86
Less distributions from:
Net investment income			(0.06	)			(0.14	)			(0.04	)		(0.16	)		(0.25	)		(0.20	)		(0.30	)
Capital gains			(0.00	)			(0.00	)			(0.00	)		(0.00	)		(0.00	)		(2.22	)		(0.71	)
Total distributions			(0.06	)			(0.14	)			(0.04	)		(0.16	)		(0.25	)		(2.42	)		(1.01	)
Net asset value,         end of period		$	14.45			$	14.00			$	13.35		$	12.18		$	10.54		$	11.45		$	19.73
Total return (1)			3.63	%			5.90	%			10.06	%		17.17	% (2)		- -5.91	%	- -32.35		%		16.22	%
Net assets, end of period     (in millions)			$56				$54				$52			$38			$37			$45			$78
Ratio of expenses to     average net assets     including voluntary     expense waiver			1.43	% (3)			1.53	%			1.52	% (3)(4)		1.29	%		1.22	%		1.12	%		1.11	%
Ratio of net investment     income to average     net assets including     voluntary expense     waiver			0.86	% (3)			1.02	%			0.86	% (3)(4)		1.41	%		1.84	%		1.57	%		1.58	%
Ratio of expenses to     average net assets     excluding voluntary     expense waiver			NA				NA				1.57	% (3)(4)		1.62	%		1.52	%		1.40	%		1.20	%
Ratio of net investment     income to average net     assets excluding     voluntary expense     waiver			NA				NA				0.81	% (3)(4)		1.08	%		1.54	%		1.29	%		1.49	%
Portfolio turnover rate			27	%			37	%			29	%		110	%		129	%		158	%		132	%

(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 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 the 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 fiscal year ended			For the period from 12-8-03 (1) to
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	13.98		$	13.33		$	12.96
Income (loss) from investment operations:
Net investment income (loss)			(0.01	)		0.01			0.01
Net realized and unrealized gain             on investments			0.44			0.64			0.39
Total from investment operations			0.43			0.65			0.40
Less distributions from:
Net investment income			(0.00	)		(0.00	)*		(0.03	)
Capital gains			(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.00	)		(0.00	)		(0.03	)
Net asset value, end of period		$	14.41		$	13.98		$	13.33
Total return			3.08	%		4.90	%		3.05	%
Net assets, end of period (in thousands)		$1,802			$1,503				$338
Ratio of expenses to average net assets			2.43	% (2)		2.52	%		2.76	% (2)
Ratio of net investment income       (loss) to average net assets			- -0.13	% (2)		0.06	%		- -0.42	% (2)
Portfolio turnover rate			27	%		37	%		29	% (3)

*Not shown due to rounding.
(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 fiscal year ended			For the period from 12-8-03 (1) to
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	13.98		$	13.34		$	12.96
Income (loss) from investment operations:
Net investment income (loss)			(0.00	)		0.03			0.02
Net realized and unrealized gain             on investments			0.44			0.63			0.39
Total from investment operations			0.44			0.66			0.41
Less distributions from:
Net investment income			(0.00	)		(0.02	)		(0.03	)
Capital gains			(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.00	)		(0.02	)		(0.03	)
Net asset value, end of period		$	14.42		$	13.98		$	13.34
Total return			3.15	%		4.98	%		3.13	%
Net assets, end of period (in thousands)		$1,321				$898			$301
Ratio of expenses to average net assets			2.34	% (2)		2.38	%		2.43	% (2)
Ratio of net investment income       (loss) to average net assets			- -0.04	% (2)		0.19	%		- -0.12	% (2)
Portfolio turnover rate			27	%		37	%		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 fiscal year ended			For the period from 12-8-03 (1) to
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	14.00		$	13.35		$	12.96
Income from investment operations:
Net investment income			0.07			0.17			0.04
Net realized and unrealized gain             on investments			0.45			0.65			0.40
Total from investment operations			0.52			0.82			0.44
Less distributions from:
Net investment income			(0.07	)		(0.17	)		(0.05	)
Capital gains			(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.07	)		(0.17	)		(0.05	)
Net asset value, end of period		$	14.45		$	14.00		$	13.35
Total return			3.72	%		6.16	%		3.43	%
Net assets, end of period (in millions)			$38			$44			$53
Ratio of expenses to average net assets			1.27	% (2)		1.30	%		1.36	% (2)
Ratio of net investment income to       average net assets			1.03	% (2)		1.25	%		0.97	% (2)
Portfolio turnover rate			27	%		37	%		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, 2005, Ivy Bond Fund had net assets totaling $56,352,477 invested in a diversified portfolio of:

97.52%	Bonds
1.56%	Cash and Cash Equivalents
0.92%	Preferred Stocks

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

United States Government Agency Obligations	$	32.26
Other Corporate Bonds	$	27.97
Corporate Collateralized Mortgage Obligations	$	16.81
United States Government Treasury Obligations	$	14.27
Corporate Asset-Backed Bonds	$	5.98
Cash and Cash Equivalents and Taxable Municipal Bond	$	1.79
Preferred Stocks	$	0.92

On September 30, 2005, the breakdown of bonds (by ratings) held by the Fund was as follows:

AAA	50.87	%
AA	6.17	%
A	8.95	%
BBB	18.37	%
BB	4.07	%
Non-rated	9.09	%
Cash and Cash Equivalents and Equities	2.48	%

The Investments of Ivy Bond Fund
September 30, 2005
PREFERRED STOCKS	Shares			Value
Real Estate Investment Trust
PS Business Parks, Inc., 7.0% Cumulative		10,500	$	260,925
Public Storage, Inc., 6.25% Cumulative		10,500		256,200
TOTAL PREFERRED STOCKS - 0.92%			$	517,125
(Cost: $520,050)

CORPORATE DEBT SECURITIES	Principal Amount in Thousands
Banks - 0.18%
Wachovia Bank, N.A.,
4.8%, 11-1-14	$	100	98,188
Broadcasting - 0.59%
Cox Communications, Inc.,
7.75%, 11-1-10		300	331,970
Business Equipment and Services - 2.65%
HSBC Finance Corporation,
4.625%, 9-15-10		225	222,116
International Lease Finance Corporation:
4.875%, 9-1-10		500	497,553
5.875%, 5-1-13		250	260,519
R.R. Donnelley & Sons Company,
4.95%, 5-15-10 (A)		375	373,152
Willis North America Inc.,
5.125%, 7-15-10		140	139,897
			1,493,237
Chemicals - Specialty - 0.46%
National Collegiate Trust 1997-S2 (The),
7.24%, 9-20-14		267	261,180
Computers - Peripherals - 0.49%
Computer Associates International, Inc.,
5.625%, 12-1-14 (A)		275	272,942

Finance Companies - Asset Backed - 5.98%
ABFS Mortgage Loan Trust 2002-  4,
7.423%, 12-15-33		120		121,584
Associates Manufactured Housing Contract       Pass-Through Certificates:
6.9%, 6-15-27		95		95,903
7.725%, 6-15-28		200		207,849
Banc of America Commercial Mortgage Inc.,       Commercial Mortgage Pass-Through Certificates,       Series 2002-2,
6.2%, 7-11-  43 (A)		275		279,954
Bank of America Mortgage Securities, Inc.,
5.75%, 8-25-34		121		121,097
BlackRock Capital Finance,
7.75%, 9-25-26 (A)		168		170,864
First Union National Bank-Chase Manhattan Bank       Commercial Mortgage Trust Commercial Mortgage       Pass-through Certificates,
7.062%, 6-15-31		169		179,940
Fund American Companies, Inc.,
5.875%, 5-15-13		275		275,048
GS Mortgage Securities Corporation II,
7.08314%, 7-13-30		500		518,449
GS Mortgage Securities Corporation II, Commercial       Mortgage Pass-Through Certificates, Series 2001-LI B,
6.733%, 2-14-16 (A)		225		238,732
Green Tree Financial Corporation:
6.4%, 10-15-18		110		111,022
7.35%, 5-15-27		58		60,716
Metropolitan Asset Funding, Inc.,
7.525%, 4-20-27 (A)		235		234,035
Origen Manufactured Housing Contract Trust 2004-A,
5.7%, 1-15-35		100		100,941
Origen Manufactured Housing Contract Trust 2004-B,
5.73%, 11-15-35		50		49,682
Origen Manufactured Housing Contract Trust 2005-A,
5.86%, 6-15-36		120		118,624
Paine Webber Mortgage Acceptance Corporation,
7.655%, 1-2-12 (A)		250		258,603
St. George Funding Company LLC,
8.485%, 12-29-  49 (A)		200		219,129
Sequoia Mortgage Funding Company,
6.38%, 8-28-31 (A)		8		8,452
				3,370,624
Finance Companies - Collateralized Mortgage Obligations - 16.81%
277 Park Avenue Finance Corporation,
7.58%, 5-12-12 (A)	171			176,684
Asset Securitization Corporation:
1.6584%, 10-13-26 (Interest Only) (A)	2,150			76,167
7.35707%, 11-13-29		200		207,745
Banco Hipotecario Nacional,
7.916%, 7-25-09 (A)		7		184
Bear Stearns Commercial Mortgage Securities Inc.:
5.426%, 5-14-16 (A)		200		202,695
6.0%, 7-15-31 (A)		100		102,881
5.468%, 6-11-  41	1,500			1,545,771
Charlie Mac Trust 2004-2,
5.0%, 10-25-34		239		232,448
Chase Mortgage Finance Trust, Series 2003-S11,
5.5%, 10-25-33		144		142,262
Citibank Credit Card Issuance Trust, Class 2005-C1,
5.5%, 3-24-17		200		203,517
Credit Suisse First Boston Mortgage Securities Corp.,
6.0%, 11-25-18		79		79,896
Global Mortgage Securitization 2005-A Ltd. and       Global Mortgage Securitization 2005-A LLC,
5.25%, 4-25-32		215		208,803
Global Mortgage Securitization Ltd. and Global       Mortgage Securitization, LLC:
5.25%, 11-25-32 (A)		334		327,228
5.25%, 11-25-32 (A)		287		281,721
Hilton Hotel Pool Trust:
4.21625%, 10-3-15 (A)		790		794,535
7.653%, 10-3-15 (A)		295		316,029
Home Equity Loan Trust 2003-HS2,
5.09%, 7-25-33		200		198,144
J.P. Morgan Mortgage Trust 2005-S2,
5.66485%, 9-25-35		529		528,408
LB-UBS Commercial Mortgage Trust 2005-C1,
4.742%, 2-15-30		250		245,249
MASTR Asset Securitization Trust 2003-10,
5.5%, 11-25-33		214		212,521
MMCA Auto Owner Trust 2002-3,
4.6%, 8-17-09	500			502,032
MMCA Auto Owner Trust 2002-  4, Class C Asset       Backed Notes,
4.56%, 11-16-09		120		119,214
MMCA Automobile Trust 2002-1,
5.37%, 1-15-10		268		268,256
Mellon Residential Funding,
6.75%, 6-26-28		101		100,312
Meristar Commerical Mortgage Trust 1999-C1,
8.29%, 3-3-16 (A)		200		226,443
Multi Security Asset Trust LP, Commercial Mortgage-Backed       Securities Pass-Through Certificates:
Series 2005-RR4:
1.0668%, 11-28-35 (Interest Only) (A)	6,523			230,163
5.88%, 11-28-35 (A)		155		149,142
5.88%, 11-28-35 (A)		105		103,689
Nomura Asset Securities Corporation, Commercial       Mortgage Pass-Through Certificates, Series1998-D6,
6.0%, 3-15-30 (A)		300		312,656
RAMP Series 2003-RS11 Trust,
6.092%, 12-25-33		250		251,307
RAMP Series 2003-RS7 Trust,
5.92%, 8-25-33		200		202,011
RAMP Series 2003-RS8 Trust,
5.683%, 9-25-33		200		201,963
Structured Asset Securities Corporation,
5.63%, 5-25-34		250		249,183
Vanderbilt Mortgage and Finance, Inc.:
8.75%, 1-7-16		317		324,711
4.73938%, 3-7-28		147		146,408
				9,470,378
Finance Companies - Miscellaneous - 7.82%
Block Financial Corporation,
5.125%, 10-30-14		80		77,628
Caithness Coso Funding Corp.,
5.489%, 6-15-19 (A)		265		265,133
Capital One Financial Corporation,
5.5%, 6-1-15		450		452,639
Centex Home Equity Loan Trust 2005-C,
5.048%, 6-25-35		370		363,636
Colonial Realty Limited Partnership,
5.5%, 10-1-15		370		363,591
CountryPlace Manufactured Housing Contract Trust 2005-1,
5.2%, 12-15-35 (A)		300		291,565
ERAC USA Finance Company,
5.6%, 5-1-15 (A)		510		515,279
FBG Finance Limited,
5.875%, 6-15-35 (A)		240		235,220
FFCA Secured Lending Corporation,
6.73%, 10-18-25 (A)		137		138,322
Ford Motor Credit Company,
4.74%, 11-16-06		350		348,761
General Motors Acceptance Corporation,
4.50875%, 1-16-07		550		540,542
JPMorgan Chase Capital XV,
5.875%, 3-15-35		340		332,811
RALI Series 2003-QS10 Trust,
5.75%, 5-25-33		251		252,523
Selkirk Cogen Funding Corporation,
8.65%, 12-26-07		221		229,682
				4,407,332
Health Care - Drugs - 0.48%
AmerisourceBergen Corporation:
5.625%, 9-15-12 (A)		150		147,750
5.875%, 9-15-15 (A)		125		123,438
				271,188
Hospital Supply and Management - 0.37%
WellPoint, Inc.,
5.95%, 12-15-34		200		208,512
Insurance - Life - 0.86%
StanCorp Financial Group, Inc.,
6.875%, 10-1-12		450		485,477
Insurance - Property and Casualty - 3.08%
Allstate Life Global Funding,
3.5%, 7-30-07		175		171,331
American General Finance Corporation,
4.875%, 5-15-10		520		518,897
Assurant, Inc.,
6.75%, 2-15-34		200		215,143
Berkshire Hathaway Finance Corporation,
4.75%, 5-15-12 (A)		315		311,449
Principal Life Global:
6.25%, 2-15-12 (A)		150		160,984
5.25%, 1-15-13 (A)		350		356,866
				1,734,670
Multiple Industry - 0.87%
Household Finance Corporation,
4.125%, 11-16-09		250		243,464
Pennsylvania Electric Company,
5.125%, 4-1-14		250		248,251
				491,715
Petroleum - Canada - 0.44%
Canadian Natural Resources Limited,
5.85%, 2-1-35		250		248,277
Petroleum - Domestic - 0.78%
Valero Logistics Operations, L.P.,
6.05%, 3-15-13		425		441,661
Petroleum - International - 0.28%
Husky Energy, Inc.,
6.25%, 6-15-12		150		159,160
Petroleum - Services - 0.71%
Energy Transfer Partners, L.P.,
5.95%, 2-1-15		400		397,984
Railroad - 0.89%
Norfolk Southern Corporation,
5.59%, 5-17-25		200		199,925
Union Pacific Corporation,
5.214%, 9-30-14 (A)		300		302,223
				502,148
Real Estate Investment Trust - 3.09%
Arden Realty Limited Partnership,
5.25%, 3-1-15		300		294,158
Healthcare Realty Trust Incorporated,
5.125%, 4-1-14		325		312,874
Nationwide Health Properties, Inc.,
6.0%, 5-20-15		265		265,239
Simon Property Group, L.P.,
5.1%, 6-15-15		475		465,590
Vornado Realty L.P.,
5.625%, 6-15-07		400		403,334
				1,741,195
Security and Commodity Brokers - 2.67%
Credit Suisse First Boston (USA), Inc.,
5.125%, 8-15-15		200		199,283
Goldman Sachs Group, Inc. (The),
4.5%, 6-15-10		525		516,642
Morgan Stanley Dean Witter & Co.,
6.75%, 4-15-11		500		543,920
Nuveen Investments, Inc.,
5.5%, 9-15-15		250		246,978
				1,506,823
Textile - 0.36%
Mohawk Industries, Inc.,
6.5%, 4-15-07		200		204,977
Utilities - Electric - 0.90%
Oncor Electric Delivery Company,
7.0%, 9-1-22		450		504,069
TOTAL CORPORATE DEBT SECURITIES - 50.76%			$	28,603,707
(Cost: $28,864,000)

MUNICIPAL OBLIGATION - TAXABLE - 0.23%
Minnesota
City of Eden Prairie, Minnesota, Taxable Multifamily       Housing Revenue Refunding Bonds       (GNMA Collateralized Mortgage Loan - Parkway       Apartments Project), Series 2000B,
7.35%, 2-20-09	125		$	129,165
(Cost: $125,000)
UNITED STATES GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS
Agency Obligations - 4.07%
Federal Home Loan Bank,
3.25%, 8-11-06	1,225			1,213,890
Federal National Mortgage Association:
4.25%, 5-15-09		500		495,974
5.125%, 1-2-14		575		583,836
				2,293,700
Mortgage-Backed Obligations - 28.19%
Federal Home Loan Mortgage Corporation Fixed Rate       Participation Certificates:
3.5%, 2-15-30		125		118,299
6.5%, 9-1-32		283		293,778
5.5%, 5-1-34		180		181,012
5.5%, 5-1-34		241		241,578
5.5%, 6-1-34	1,922			1,923,177
5.0%, 9-1-34		46		44,820
5.5%, 9-1-34		196		196,170
5.5%, 10-1-34		458		459,051
5.5%, 7-1-35		294		294,630
5.5%, 10-1-35		380		380,000

Federal National Mortgage Association Fixed Rate       Pass-Through Certificates:
6.23%, 1-1-08		142		145,346
6.0%, 9-1-17		140		144,098
5.5%, 3-1-18		151		153,288
5.0%, 6-1-18		553		551,632
5.0%, 7-1-18		191		191,284
4.5%, 9-1-20	1,560			1,528,144
7.5%, 5-1-31		169		180,736
7.0%, 9-1-31		62		64,754
7.0%, 11-1-31	117			122,579
6.5%, 12-1-31		71		73,661
7.0%, 2-1-32		127		133,330
7.0%, 3-1-32		125		131,272
6.5%, 4-1-32	33			33,912
6.5%, 5-1-32		34		35,537
6.5%, 7-1-32		94		98,071
6.5%, 8-1-32		82		85,113
6.5%, 8-1-32		71		73,821
6.5%, 9-1-32		117		121,292
6.5%, 9-1-32		51		53,154
6.0%, 10-1-32		165		168,534
6.5%, 10-1-32		165		171,045
6%, 11-1-32		174		178,289
6.0%, 3-1-33		128		130,599
5.5%, 4-1-33		203		203,630
6.0%, 4-1-33		295		300,004
5.5%, 5-1-33		154		153,966
5.5%, 3-1-34		217		217,755
5.5%, 3-1-34		83		83,234
5.5%, 4-1-34		213		214,013
5.5%, 4-1-34		69		69,096
5.0%, 5-1-34		83		81,185
5.5%, 5-1-34		192		192,336
5.5%, 10-1-34		330		329,794
5.5%, 11-1-34	1,630			1,629,800
6.0%, 11-1-34	1,462			1,487,284
5.5%, 2-1-35		239		239,271
5.0%, 5-1-35		59		57,407
5.0%, 7-1-35		229		224,671
5.0%, 7-1-35		110		107,430
5.0%, 7-1-35		99		96,608
Government National Mortgage Association Agency       REMIC/CMO (Interest Only),
0.979%, 6-17-  45	5,233			318,744
Government National Mortgage Association Fixed       Rate Pass-Through Certificates,
5.0%, 11-15-33	1,187			1,176,049
				15,884,283
Treasury Inflation Protected Obligation - 2.10%
United States Treasury Notes,
1.875%, 7-15-13 (B)	1,100			1,186,016
Treasury Obligations - 12.17%
United States Treasury Bond,
5.375%, 2-15-31	570			638,578
United States Treasury Notes:
1.875%, 1-31-06		575		571,451
2.5%, 10-31-06		550		540,611
2.25%, 2-15-07		100		97,465
3.625%, 6-30-07		500		495,234
3.375%, 10-15-09	4,390			4,254,358
4.25%, 11-15-14		260		258,142
				6,855,839
TOTAL UNITED STATES GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS- 46.53%			$	26,219,838
(Cost: $26,387,074)
SHORT-TERM SECURITIY - 2.29%
United States Government Agency Obligation
Federal Home Loan Mortgage Corporation,
3.18%, 10-3-05	1,293		$	1,292,772
(Cost: $1,292,772)
TOTAL INVESTMENT SECURITIES - 100.73%			$	56,762,607
(Cost: $57,188,896)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.73%)				(410,130	)
NET ASSETS - 100.00%			$	56,352,477

Notes to Schedule of Investments

      Certain acronyms are used within the body of the Fund's holdings. The definitions of these acronyms are as follows: REMIC - Real Estate Mortgage Investment Conduit; CMO - Collateralized Mortgage Obligation.

(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, 2005, the total value of these securities amounted to $8,204,309 or 14.56% 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, 2005
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $57,189) (Notes 1 and 3)	$	56,763
Receivables:
Dividends and interest		472
Investment securities sold		172
Fund shares sold		114
Prepaid and other assets		19
Total assets		57,540
LIABILITIES
Payable for investment securities purchased		911
Payable to Fund shareholders		135
Due to custodian		56
Accrued management fee (Note 2)		24
Dividends payable		17
Accrued service fee (Note 2)		12
Accrued shareholder servicing (Note 2)		12
Accrued accounting services fee (Note 2)		4
Accrued distribution fee (Note 2)		1
Other		16
Total liabilities		1,188
Total net assets	$	56,352
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	56,796
Accumulated undistributed loss:
Accumulated undistributed net realized loss on                 investment transactions		(18	)
Net unrealized depreciation in value of investments		(426	)
Net assets applicable to outstanding units of capital	$	56,352
Net asset value per share (net assets divided by shares outstanding):
Class A	$10.52
Class B	$10.52
Class C	$10.52
Class Y	$10.52
Capital shares outstanding:
Class A		5,143
Class B		105
Class C		105
Class Y		3

See Notes to Financial Statements.

Statement of Operations
     IVY BOND FUND
     For the Six Months Ended September 30, 2005
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	1,372
Dividends		17
Total income		1,389
Expenses (Note 2):
Investment management fee		142
Service fee:
Class A		64
Class B		1
Class C		1
Class Y		- -	*
Shareholder servicing:
Class A		46
Class B		3
Class C		2
Class Y		- -	*
Registration fees		25
Accounting services fee		22
Audit fees		12
Custodian fees		7
Distribution fee:
Class A		1
Class B		4
Class C		3
Legal fees		- -	*
Other		14
Total expenses		347
Net investment income		1,042
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		153
Unrealized depreciation in value of investments during the period		(183	)
Net loss on investments		(30	)
Net increase in net assets resulting from operations	$	1,012

*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 September 30,				For the fiscal year ended March 31,
	2005				2005
INCREASE IN NET ASSETS
Operations:
Net investment income		$	1,042			$	1,376
Realized net gain on investments			153				89
Unrealized depreciation			(183	)			(998	)
Net increase in net assets                     resulting from operations			1,012				467
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A			(1,017	)			(1,367	)
Class B			(13	)			(12	)
Class C			(12	)			(7	)
Class Y			(1	)			(1	)
Realized gains on investment transactions:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)
			(1,043	)			(1,387	)
Capital share transactions (Note 5)			5,660				28,126
Total increase			5,629				27,206
NET ASSETS
Beginning of period			50,723				23,517
End of period		$	56,352			$	50,723
Undistributed net investment income		$	- -			$	1

(1)See "Financial Highlights" on pages 43 - 46.

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 year ended			For the fiscal period ended			For the fiscal year ended September 30,
	9-30-05				3-31-05			3-31-04			2003			2002			2001			2000
Net asset value,     beginning of period		$	10.52		$	10.83		$	10.73		$	10.57		$	10.30		$	9.60		$	9.71
Income (loss) from     investment operations:
Net investment income			0.20			0.41			0.23			0.45			0.52			0.58			0.58
Net realized and         unrealized gain (loss)         on investments			0.00			(0.30	)		0.09			0.15			0.27			0.70		(0.11		)
Total from investment     operations			0.20			0.11			0.32			0.60			0.79			1.28			0.47
Less distributions from:
Net investment income			(0.20	)		(0.42	)		(0.22	)		(0.44	)		(0.52	)		(0.58	)	(0.58		)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)
Total distributions			(0.20	)		(0.42	)		(0.22	)		(0.44	)		(0.52	)		(0.58	)	(0.58		)
Net asset value,     end of period		$	10.52		$	10.52		$	10.83		$	10.73		$	10.57		$	10.30		$	9.60
Total return (1)			1.99	%		1.04	%		3.03	%		5.84	%		7.90	%		13.68	%		5.04	%
Net assets, end of period     (in millions)			$54			$49			$23			$18			$17			$16			$15
Ratio of expenses to     average net assets     including reimbursement			1.25	% (2)		1.17	%		1.46	%(2)(3)		1.15	%		1.15	%		1.15	%		1.15	%
Ratio of net investment     income to average     net assets including     reimbursement			3.89	% (2)		3.84	%		4.53	%(2)(3)		4.25	%		5.07	%		5.77	%		6.08	%
Ratio of expenses to     average net assets     excluding reimbursement			- -			1.43	%		2.36	%(2)(3)		2.01	%		1.92	%		1.99	%		1.84	%
Ratio of net investment     income to average     net assets excluding     reimbursement			- -			3.58	%		3.64	%(2)(3)		3.39	%		4.30	%		4.93	%		5.39	%
Portfolio turnover rate			73	%		200	%		78	%		119	%		148	%		252	%		191	%

(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 six months ended				For the fiscal year ended			For the period from 12-8-03 (1) to
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	10.52		$	10.83		$	10.64
Income (loss) from investment operations:
Net investment income			0.14			0.28			0.11
Net realized and unrealized gain             (loss) on investments			0.00			(0.31	)		0.19
Total from investment operations			0.14			(0.03	)		0.30
Less distributions from:
Net investment income			(0.14	)		(0.28	)		(0.11	)
Capital gains			(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.14	)		(0.28	)		(0.11	)
Net asset value, end of period		$	10.52		$	10.52		$	10.83
Total return			1.40	%	- -0.23		%		2.77	%
Net assets, end of period (in thousands)		$1,106				$744			$287
Ratio of expenses to average net assets			2.41	% (2)		2.45	%		2.76	% (2)
Ratio of net investment income to       average net assets			2.73	% (2)		2.63	%		3.04	% (2)
Portfolio turnover rate			73	%		200	%		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 six months ended				For the fiscal year ended			For the period from 12-8-03 (1) to
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	10.52		$	10.83		$	10.64
Income (loss) from investment operations:
Net investment income			0.15			0.27			0.11
Net realized and unrealized gain             (loss) on investments			0.00			(0.31	)		0.19
Total from investment operations			0.15			(0.04	)		0.30
Less distributions from:
Net investment income			(0.15	)		(0.27	)		(0.11	)
Capital gains			(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.15	)		(0.27	)		(0.11	)
Net asset value, end of period		$	10.52		$	10.52		$	10.83
Total return			1.43	%		- -0.40	%		2.77	%
Net assets, end of period (in thousands)		$1,106				$547			$115
Ratio of expenses to average net assets			2.33	% (2)		2.59	%		2.61	% (2)
Ratio of net investment income to       average net assets			2.80	% (2)		2.47	%		3.09	% (2)
Portfolio turnover rate			73	%		200	%		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 six months ended				For the fiscal year ended			For the period from 12-8-03 (1) to
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	10.52		$	10.83		$	10.64
Income (loss) from investment operations:
Net investment income			0.20			0.39			0.13
Net realized and unrealized gain             (loss) on investments			0.00			(0.31	)		0.19
Total from investment operations			0.20			0.08			0.32
Less distributions from:
Net investment income			(0.20	)		(0.39	)		(0.13	)
Capital gains			(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.20	)		(0.39	)		(0.13	)
Net asset value, end of period		$	10.52		$	10.52		$	10.83
Total return			1.93	%		0.75	%		3.03	%
Net assets, end of period (in thousands)			$26			$34			$25
Ratio of expenses to average net assets			1.37	% (2)		1.46	%		1.54	% (2)
Ratio of net investment income to       average net assets			3.79	% (2)		3.65	%		3.99	% (2)
Portfolio turnover rate			73	%		200	%		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, 2005, Ivy Cash Reserves Fund had net assets totaling $5,120,204.

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Corporate Obligations - Notes	$	34.99
Municipal Obligations - Taxable	$	28.41
Corporate Obligations - Commercial Paper	$	18.62
United States Government Agency Obligations and       Cash and Cash Equivalents	$	15.54
Corporate Obligations - Certificates of Deposit	$	2.44

The Investments of Ivy Cash Reserves Fund
September 30, 2005
CORPORATE OBLIGATIONS	Principal Amount in Thousands			Value
Certificate of Deposit - 2.44%
Banks
Citibank, N.A.,
3.77%, 11-22-05	$125		$	125,000
Commercial Paper
Finance Companies - 11.80%
Ciesco, LLC,
3.6%, 10-7-05		250		249,850
PACCAR Financial Corp.,
3.49%, 1-19-06		257		254,259
Vehicle Services of America Ltd. (Bank of America, N.A.),
3.72%, 10-13-05		100		99,876
				603,985
Multiple Industry - 4.38%
General Electric Capital Corporation,
3.64%, 10-26-05		225		224,431
Security and Commodity Brokers - 2.44%
UBS Finance Delaware LLC (UBS AG),
3.3%, 10-3-05		125		124,977
Total Commercial Paper - 18.62%				953,393
Notes
Banks - 5.05%
Bank of New York Company Inc. (The),
2.2%, 5-12-06		160		158,542
Wells Fargo & Company,
3.75813%, 10-17-05		100		100,000
				258,542
Business Equipment and Services - 3.13%
Berkeley Hills Country Club, Inc., Incremental            Taxable Variable Rate Demand Bonds,            Series 2000 (Wachovia Bank, N.A.),
3.91%, 10-6-05		160		160,000
Computers - Main and Mini - 1.95%
International Business Machines Corporation,
3.6725%, 10-11-05	100			100,000
Finance Companies - 7.32%
Caterpillar Financial Services Corp.,
2.65%, 1-30-06		150		149,522
Park Street Properties I, LLC, Taxable Variable            Rate Demand Notes, Series 2004            (University of Wisconsin - Madison Projects),            (U.S. Bank, National Association),
3.79%, 10-6-05		125		125,000
Unilever Capital Corporation,
6.875%, 11-1-05		100		100,323
				374,845
Health Care - Drugs - 4.88%
Lilly (Eli) and Company,
3.66%, 10-3-05		250		250,000
Multiple Industry - 4.88%
The Salvation Army, Taxable Multi-Modal Revenue            Bonds, Series 2005A (The Bank of New York),
3.82%, 10-6-05		250		250,000
Retail - General Merchandise - 4.94%
Wal-Mart Stores, Inc.,
5.586%, 6-1-06		250		252,957
Retail - Specialty Stores - 2.84%
El Dorado Enterprises of Miami, Inc., Taxable Variable            Rate Demand Bonds, Series 1999 (Wachovia Bank, N.A.),
3.91%, 10-6-05		145		145,000
Total Notes - 34.99%				1,791,344
TOTAL CORPORATE OBLIGATIONS - 56.05%			$	2,869,737
(Cost: $2,869,737)

MUNICIPAL OBLIGATIONS - TAXABLE
California - 10.74%
California Pollution Control Financing Authority,       Environmental Improvement Revenue Bonds       (Air Products and Chemicals, Inc./Wilmington       Facility), Taxable Series 1997A,
3.71%, 11-2-05	250			250,000
County of Sacramento, Taxable Pension Funding       Bonds, Series 1995B (Bayerische Landesbank       Girozentrale, New York Branch),
3.85%, 10-5-05		300		300,000
				550,000
Florida - 2.64%
University of South Florida Research Foundation,       Incorporated, Variable Rate Demand Revenue       Bonds (Interdisciplinary Research Building Project),       Taxable Series 2004B (Bank of America, N.A.),
3.8%, 10-5-05		135		135,000
Maryland - 5.66%
Mayor and City Council of Baltimore (City of Baltimore,       Maryland), General Obligation Bonds, Consolidated       Public Improvement Refunding Bonds, Series 2003C       (Variable Rate Demand/Taxable), (Financial Security       Assurance Inc.),
3.84%, 10-6-05		290		290,000
New York - 3.51%
The City of New York, General Obligation Bonds,       Fiscal 1995 Series B, Taxable Adjustable Rate Bonds       (Bayerische Landesbank Girozentrale, New York Branch),
3.71%, 11-7-05		100		100,000
Nassau County Industrial Development Agency,       Taxable Variable Rate Demand Revenue Bonds       (57 Seaview Realty Associates, LLC 2004 Project),       (Wachovia Bank, N.A.),
3.84%, 10-6-05		80		80,000
				180,000
Texas - 3.91%
Gulf Coast Waste Disposal Authority, Pollution Control       Revenue Bonds (Amoco Oil Company Project),       Taxable Series 1995,
3.66%, 10-6-05		200		200,000
Washington - 1.95%
Washington State Housing Finance Commission,       Taxable Variable Rate Demand Multifamily       Revenue Bonds (Columbia Heights Retirement       Project), Series 2004 B (Wells Fargo Bank, N.A.),
3.87%, 10-  3-05	100			100,000
TOTAL MUNICIPAL OBLIGATIONS - TAXABLE - 28.41%			$	1,455,000
(Cost: $1,455,000)
UNITED STATES GOVERNMENT AGENCY OBLIGATIONS
Federal Home Loan Bank,
3.6809%, 10-13-05		100		100,000
Federal National Mortgage Association,
4.05%, 8-14-06		170		170,000
Overseas Private Investment Corporation:
3.8%, 10-5-05		210		210,000
3.84%, 10-5-05		384		383,721
TOTAL UNITED STATES GOVERNMENT       AGENCY OBLIGATIONS - 16.87%			$	863,721
(Cost: $863,721)
TOTAL INVESTMENT SECURITIES - 101.33%			$	5,188,458
(Cost: $5,188,458)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (1.33%)				(68,254	)
NET ASSETS - 100.00%			$	5,120,204

Notes to Schedule of Investments

      See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

Statement of Assets and Liabilities
     IVY CASH RESERVES FUND
     September 30, 2005
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $5,188) (Note 1)	$	5,188
Cash		40
Receivables:
Interest		23
Fund shares sold		2
Prepaid and other assets		23
Total assets		5,276
LIABILITIES
Payable to Fund shareholders		149
Accrued shareholder servicing (Note 2)		4
Accrued management fee (Note 2)		2
Dividends payable		1
Total liabilities		156
Total net assets	$	5,120
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	5,120
Net assets applicable to outstanding units of capital	$	5,120
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		3,809
Class B		1,238
Class C		73

See Notes to Financial Statements.

Statement of Operations
     IVY CASH RESERVES FUND
     For the Six Months Ended September 30, 2005
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	91
Expenses (Note 2):
Registration fees		19
Shareholder servicing:
Class A		13
Class B		3
Class C		- -	*
Investment management fee		11
Audit fees		9
Prospectus printing		9
Custodian fees		2
Other		2
Total		68
Less expenses in excess of contractual limit (Note 2)	(33		)
Total expenses		35
Net investment income		56
Net increase in net assets resulting from operations	$	56

*Not shown due to rounding.

See Notes to Financial Statements.

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

	For the six months ended September 30,				For the fiscal year ended March 31,
	2005				2005
DECREASE IN NET ASSETS
Operations:
Net investment income		$	56			$	53
Net increase in net assets                        resulting from operations			56				53
Distributions to shareholders from net            investment income (Note 1F): (1)
Class A			(42	)			(39	)
Class B			(13	)			(13	)
Class C			(1	)			(1	)
			(56	)			(53	)
Capital share transactions (Note 5)			(715	)		(3,087		)
Total decrease			(715	)		(3,087		)
NET ASSETS
Beginning of period			5,835				8,922
End of period		$	5,120			$	5,835
Undistributed net investment income		$	- -			$	- -

(1)See "Financial Highlights" on pages 55 - 57.

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 year ended			For the fiscal period ended			For the fiscal year ended December 31,
	9-30-05				3-31-05			3-31-04			2003			2002			2001			2000
Net asset value,      beginning of period		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income			0.01			0.01			0.00	*		0.00	*		0.01	(1)		0.03			0.05
Less dividends declared		(0.01		)	(0.01		)	(0.00		)*	(0.00		)*	(0.01		)	(0.03		)	(0.05		)
Net asset value,      end of period		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return			1.01	%		0.78	%		0.07	%		0.33	%		0.78	%		3.12	%		5.37	%
Net assets, end of period      (in millions)			$4			$4			$6			$6			$15			$13			$20
Ratio of expenses      to average net      assets including      reimbursement			1.25	%(2)		0.94	%		0.85	%(2)		0.85	%		0.88	%		0.87	%		0.85	%
Ratio of net investment      income to average      net assets including      reimbursement			2.00	%(2)		0.77	%		0.29	%(2)		0.35	%		0.78	%		3.12	%		5.38	%
Ratio of expenses      to average net      assets excluding      reimbursement			2.47	%(2)		2.09	%		2.36	%(2)		1.80	%		1.73	%		1.59	%		1.52	%
Ratio of net investment      income (loss) to average      net assets excluding      reimbursement			0.78	%(2)	- -0.38		%	- -1.22		%(2)	- -0.60		%	- -0.07		%		2.40	%		4.71	%

*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 year ended			For the fiscal period ended			For the fiscal year ended December 31,
	9-30-05				3-31-05			3-31-04			2003			2002			2001			2000
Net asset value,      beginning of period		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income			0.01			0.01			0.00	*		0.00	*		0.01	(1)		0.03			0.05
Less dividends declared		(0.01		)	(0.01		)	(0.00		)*	(0.00		)*	(0.01		)	(0.03		)	(0.05		)
Net asset value,      end of period		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return			1.01	%		0.78	%		0.07	%		0.36	%		0.85	%		3.19	%		5.35	%
Net assets, end of period      (in millions)			$1			$1			$3			$3			$6			$7			$6
Ratio of expenses      to average net      assets including      reimbursement			1.25	%(2)		0.92	%		0.85	%(2)		0.83	%		0.80	%		0.80	%		0.87	%
Ratio of net investment      income to average      net assets including      reimbursement			2.00	%(2)		0.72	%		0.29	%(2)		0.38	%		0.85	%		3.19	%		5.36	%
Ratio of expenses      to average net      assets excluding      reimbursement			2.25	%(2)		1.84	%		2.32	%(2)		1.77	%		1.65	%		1.52	%		1.54	%
Ratio of net investment      income (loss) to      average net assets      excluding reimbursement			1.01	%(2)	- -0.20		%	- -1.18		%(2)	- -0.56		%		0.00	%		2.47	%		4.69	%

*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 year ended			For the fiscal period ended			For the fiscal year ended December 31,
	9-30-05				3-31-05			3-31-04			2003			2002			2001			2000
Net asset value,      beginning of period		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income			0.01			0.01			0.00	*		0.00	*		0.01	(1)		0.03			0.05
Less dividends declared		(0.01		)	(0.01		)	(0.00		)*	(0.00		)*	(0.01		)	(0.03		)	(0.05		)
Net asset value,      end of period		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return			1.01	%		0.78	%		0.07	%		0.40	%		0.74	%		3.10	%		5.65	%
Net assets, end of period      (in thousands)			$73			$90		$167			$184			$813			$519			$1,975
Ratio of expenses to average      net assets including      reimbursement			1.25	% (2)		0.94	%		0.85	%(2)		0.72	%		0.84	%		0.88	%		0.72	%
Ratio of net investment      income to average      net assets including      reimbursement			1.98	% (2)		0.77	%		0.29	%(2)		0.52	%		0.82	%		3.10	%		5.51	%
Ratio of expenses      to average net      assets excluding      reimbursement			2.85	%(2)		2.60	%		3.91	%(2)		1.66	%		1.69	%		1.60	%		1.39	%
Ratio of net investment      income (loss) to average      net assets excluding      reimbursement			0.38	%(2)	- -0.89		%	- -2.77		%(2)	- -0.42		%	- -0.03		%		2.38	%		4.84	%

*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, 2005, Ivy Cundill Global Value Fund had net assets totaling $681,753,795 invested in a diversified portfolio of:

80.19%	Common Stocks
19.81%	Cash and Cash Equivalents and Unrealized Gain (Loss) on        Open Forward Currency Contracts

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005, your Fund was invested by geographic region and by industry, respectively, as follows:

Pacific Basin	$	55.14
Cash and Cash Equivalents and Unrealized Gain (Loss) on       Open Forward Currency Contracts	$	19.81
United States	$	11.24
Canada	$	6.63
Europe	$	5.99
Other	$	1.19

Financial Services Stocks	$	21.51
Cash and Cash Equivalents and Unrealized Gain (Loss) on       Open Forward Currency Contracts	$	19.81
Consumer Services Stocks	$	15.50
Consumer Nondurables Stocks	$	14.82
Multi-Industry Stocks	$	5.69
Capital Goods Stocks	$	5.58
Utilities Stocks	$	4.35
Business Equipment and Services Stocks	$	3.55
Technology Stocks	$	3.49
Miscellaneous Stocks	$	2.96
Consumer Durables Stocks	$	2.74

The Investments of Ivy Cundill Global Value Fund
September 30, 2005
COMMON STOCKS		Shares		Value
Bermuda - 1.19%
Guoco Group Limited (A)		800,000	$	8,116,121
Canada - 6.63%
Fairfax Financial Holdings Limited (A)		187,000		32,391,674
Legacy Hotels Real Estate Investment Trust (A)		1,371,200		8,255,268
Legacy Hotels Real Estate Investment Trust (A)(B)		753,900		4,538,832
				45,185,774
Germany - 2.34%
Henkel Kommanditgesellschaft auf Aktien (A)		86,525		7,344,695
Munchener Ruckversicherungs-Gesellschaft (A)		75,184		8,585,261
				15,929,956
Hong Kong - 3.41%
CITIC Pacific Limited (A)		2,000,000		5,594,658
First Pacific Company Limited (A)*	51,290,000			17,686,435
				23,281,093
Italy - 3.65%
Italmobiliare S.p.A., Non-Convertible Savings Shar (A)		472,111		24,883,885
Japan - 39.84%
AIFUL Corporation (A)		47,550		3,983,619
Asatsu-DK Inc. (A)		776,800		24,224,746
Coca-Cola West Japan Company Limited (A)		1,132,500		25,340,704
Kirin Brewery Company, Limited (A)		3,000,000		33,035,282
Lion Corporation (A)		2,500,000		15,328,371
Mabuchi Motor Co., Ltd. (A)		483,000		23,827,688
Nikko Cordial Corporation (A)		3,050,000		35,278,597
Nintendo Co., Ltd. (A)		160,300		18,696,842
Nippon Television Network Corporation (A)		180,000		27,702,066
NIPPONKOA Insurance Company, Limited (A)		1,900,000		14,645,642
TV Asahi Corporation (A)		6,612		16,833,617
Takefuji Corporation (A)		420,180		32,758,605
				271,655,779
Malaysia - 1.93%
Arab-Malaysian Corporation Berhad (A)*	45,057,700			13,150,297
Singapore - 3.36%
Singapore Press Holdings Limited (A)		8,382,000		22,885,668
South Korea - 6.60%
Dongwon Financial Holding Co., Ltd. (A)		371,000		10,855,238
Korea Electric Power Corporation (A)		200,000		6,830,391
Korea Tobacco & Ginseng Corporation (A)		630,000		27,317,728
				45,003,357
United States - 11.24%
DIRECTV Group, Inc. (The)*		1,700,000		25,466,000
Liberty Global, Inc., Series A*		293,751		7,956,246
Liberty Global, Inc., Series C*		293,751		7,565,557
Liberty Media Corporation, Class A*		1,587,000		12,775,350
MCI, Inc.		900,000		22,846,500
				76,609,653
TOTAL COMMON STOCKS - 80.19%			$	546,701,583
(Cost: $468,093,914)

UNREALIZED GAIN (LOSS) ON OPEN FORWARD CURRENCY CONTRACTS - 1.69%		Face Amount in Thousands
Euro, 10-7-05 (C)	EUR11,212				672,232
Euro, 1-27-06 (C)			16,737		(68,988	)
Japanese Yen, 10-7-05 (C)	JPY11,672,831				8,954,835
Japanese Yen, 1-27-06 (C)	11,657,210				1,317,755
Singapore Dollar, 10-7-05 (C)	SGD13,960				207,698
Singapore Dollar, 1-27-06 (C)			19,942		36,996
South Korean Won, 10-7-05 (C)	KRW11,381,698				377,257
South Korean Won, 1-27-06 (C)	25,522,840				42,136
				$	11,539,921

SHORT-TERM SECURITIES	Principal Amount in Thousands
Repurchase Agreement - 4.19%
J.P. Morgan Securities Inc., 2.75% Repurchase       Agreement dated 9-30-05 to be repurchased at       $28,557,543 on 10-3-05 (D)	$28,551			28,551,000
United States Government Securities
Treasury Obligations - 16.81%
United States Treasury Bills:
3.13%, 10-6-05		25,000		24,989,132
3.025%, 10-20-05		10,000		9,984,035
3.08%, 10-20-05		10,000		9,983,745
3.375%, 11-3-05		10,000		9,969,062
3.265%, 11-17-05		15,000		14,936,061
3.32%, 11-17-05		20,000		19,913,311
3.31%, 11-25-05		15,000		14,924,146
3.37%, 12-29-05		10,000		9,916,686
				114,616,178
TOTAL SHORT-TERM SECURITIES - 21.00%			$	143,167,178
(Cost: $143,167,178)
TOTAL INVESTMENT SECURITIES - 102.88%			$	701,408,682
(Cost: $611,261,092)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (2.88%)				(19,654,887	)
NET ASSETS - 100.00%			$	681,753,795

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, 2005, the total value of this security amounted to 0.67% of net assets.

(C)Principal amounts are denominated in the indicated foreign currency, where applicable (EUR - Euro, JPY - Japanese Yen, KRW - Korean Won, SGD - Singapore Dollar).

(D)Collateralized by $28,255,283 United States Treasury Note, 6.5% due 10-15-06; market value and accrued interest aggregate $29,107,557.

      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, 2005
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (Notes 1 and 3):
Securities (cost - $582,710)	$	672,858
Repurchase agreement (cost - $28,551)		28,551
		701,409
Receivables:
Fund shares sold		7,210
Dividends and interest		1,313
Prepaid and other assets		56
Total assets		709,988
LIABILITIES
Payable for investment securities purchased		26,447
Payable to Fund shareholders		710
Accrued management fee (Note 2)		515
Accrued shareholder servicing (Note 2)		188
Accrued service fee (Note 2)		133
Accrued distribution fee (Note 2)		116
Due to custodian		42
Accrued accounting services fee (Note 2)		9
Accrued administrative fee (Note 2)		6
Other		68
Total liabilities		28,234
Total net assets	$	681,754
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	586,239
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(1,268	)
Accumulated undistributed net realized gain on                   investment transactions		6,638
Net unrealized appreciation in value of investments		90,145
Net assets applicable to outstanding units of capital	$	681,754
Net asset value per share (net assets divided by shares outstanding):
Class A		$14.99
Class B		$14.65
Class C		$14.61
Class Y		$15.06
Advisor Class		$15.01
Class I		$14.91
Capital shares outstanding:
Class A		31,200
Class B		3,309
Class C		10,198
Class Y		894
Advisor Class		207
Class I		2

See Notes to Financial Statements.

Statement of Operations
     IVY CUNDILL GLOBAL VALUE FUND
     For the Six Months Ended September 30, 2005
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $349)	$	3,653
Interest and amortization		2,006
Total income		5,659
Expenses (Note 2):
Investment management fee		2,741
Shareholder servicing:
Class A		618
Class B		93
Class C		136
Class Y		9
Advisor Class		1
Class I		- -	*
Service fee:
Class A		420
Class B		52
Class C		148
Class Y		14
Distribution fee:
Class A		58
Class B		157
Class C		445
Custodian fees		74
Accounting services fee		50	��
Administrative fee		28
Audit fees		11
Legal fees		10
Other		173
Total		5,238
Less expenses in excess of voluntary limit (Note 2)		(18	)
Total expenses		5,220
Net investment income		439
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		10,168
Realized net gain on foreign currency transactions		163
Realized net gain on investments		10,331
Unrealized appreciation in value of securities during the period		33,615
Unrealized appreciation in value of forward currency contracts            during the period		7,348
Unrealized appreciation in value of investments during the period		40,963
Net gain on investments		51,294
Net increase in net assets resulting from operations	$	51,733

*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 September 30, 2005				For the fiscal year ended March 31, 2005
INCREASE IN NET ASSETS
Operations:
Net investment income (loss)		$	439		$	(356	)
Realized net gain (loss) on investments			10,331			(3,283	)
Unrealized appreciation			40,963			36,619
Net increase in net assets                        resulting from operations			51,733			32,980
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A			(-	)		(1,187	)
Class B			(-	)		(-	)
Class C			(-	)		(-	)
Class Y			(-	)		(76	)
Advisor Class			(-	)		(27	)
Class I			(-	)		(1	)
Realized gains on investment transactions:
Class A			(-	)		(-	)
Class B			(-	)		(-	)
Class C			(-	)		(-	)
Class Y			(-	)		(-	)
Advisor Class			(-	)		(-	)
Class I			(-	)		(-	)
			(-	)		(1,291	)
Capital share transactions (Note 5)			162,533			336,235
Total increase			214,266			367,924
NET ASSETS
Beginning of period			467,488			99,564
End of period		$	681,754		$	467,488
Undistributed net investment loss		$	(1,268	)	$	(1,870	)

(1)See "Financial Highlights" on pages 65 - 70.

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 year ended				For the fiscal period ended				For the fiscal year ended December 31,						For the period from 9- 4-01 (1) to
	9-30-05				3-31-05				3-31-04				2003				2002		12-31-01
Net asset value,       beginning of period		$	13.79			$	12.57			$	11.41		$	8.39			$	9.64		$	10.15
Income (loss) from       investment operations:
Net investment             income (loss)			0.03				0.04				0.01			0.01			(0.00		) (2)		0.01
Net realized and             unrealized gain (loss)             on investments			1.17				1.25				1.15			3.05			(1.17		)		(0.23	)
Total from investment       operations			1.20				1.29				1.16			3.06			(1.17		)		(0.22	)
Less distributions from:
Net investment income			(0.00	)			(0.07	)			(0.00	)		(0.04	)		(0.00		)		(0.02	)
Capital gains			(0.00	)			(0.00	)			(0.00	)		(0.00	)		(0.08		)		(0.27	)
Total distributions			(0.00	)			(0.07	)			(0.00	)		(0.04	)		(0.08		)		(0.29	)
Net asset value,       end of period		$	14.99			$	13.79			$	12.57		$	11.41			$	8.39		$	9.64
Total return (3)			8.70	%			10.29	%			10.17	%		36.43	%	- -12.17			%	- -2.07		%
Net assets, end of period       (in thousands)	$467,657			$320,750				$58,678				$29,530			$1,403						$213
Ratio of expenses to       average net assets       including reimbursement			1.68	% (4)			1.74	%			1.70	% (4)		2.05	%			2.28	%		4.47	% (4)
Ratio of net investment       income (loss) to       average net assets       including reimbursement			0.35	% (4)			0.08	%			- -0.09	% (4)		0.18	%			0.02	%		0.94	% (4)
Ratio of expenses to       average net assets       excluding reimbursement			- -				- -				1.84	% (4)		2.21	%			4.97	%		31.77	% (4)
Ratio of net investment       income (loss) to       average net assets       excluding reimbursement			- -				- -				- -0.23	% (4)		0.02	%		- -2.67		%	- -26.36		% (4)
Portfolio turnover rate			5	%			5	%			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 year ended				For the fiscal period ended				For the fiscal year ended December 31,							For the period from 9-26-01 (1) to
	9-30-05				3-31-05				3-31-04				2003				2002			12-31-01
Net asset value,       beginning of period		$	13.54			$	12.38			$	11.26		$	8.32			$	9.61		$	9.26
Income (loss) from       investment operations:
Net investment             income (loss)			(0.02	)			(0.01	)			(0.02	)		(0.06	)		(0.05		) (2)		0.01
Net realized and             unrealized gain (loss)             on investments			1.13				1.17				1.14			3.00			(1.16		)		0.62
Total from investment       operations			1.11				1.16				1.12			2.94			(1.21		)		0.63
Less distributions from:
Net investment income			(0.00	)			(0.00	)			(0.00	)		(0.00	)		(0.00		)	(0.02		)
Capital gains			(0.00	)			(0.00	)			(0.00	)		(0.00	)		(0.08		)	(0.26		)
Total distributions			(0.00	)			(0.00	)			(0.00	)		(0.00	)		(0.08		)	(0.28		)
Net asset value,       end of period		$	14.65			$	13.54			$	12.38		$	11.26			$	8.32		$	9.61
Total return			8.20	%			9.37	%			9.95	%		35.34	%	- -12.62			%		6.91	%
Net assets, end of period       (in millions)			$49				$37				$12			$7				$2			$1
Ratio of expenses to       average net assets       including reimbursement			2.56	% (3)			2.62	%			2.52	% (3)		3.20	%			2.84	%		6.04	% (3)
Ratio of net investment       income (loss) to       average net assets       including reimbursement			- -0.52	% (3)			- -0.86	%			- -1.31	% (3)		- -1.13	%		- -0.54		%		0.60	% (3)
Ratio of expenses to       average net assets       excluding reimbursement			- -				- -				2.67	% (3)		3.36	%			5.53	%	39.53		% (3)
Ratio of net investment       loss to average       net assets excluding       reimbursement			- -				- -				- -1.46	% (3)		- -1.29	%		- -3.23		%	- -32.89		% (3)
Portfolio turnover rate			5	%			5	%			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 year ended				For the fiscal period ended				For the fiscal year ended December 31,							For the period from 10-19-01 (1) to
	9-30-05				3-31-05				3-31-04				2003				2002			12-31-01
Net asset value,       beginning of period		$	13.48			$	12.30			$	11.19		$	8.26			$	9.57		$	9.44
Income (loss) from       investment operations:
Net investment             income (loss)			(0.00	)			(0.02	)			(0.01	)		(0.03	)		(0.07		) (2)		0.01
Net realized and             unrealized gain (loss)             on investments			1.13				1.20				1.12			2.96			(1.16		)		0.40
Total from investment       operations			1.13				1.18				1.11			2.93			(1.23		)	0.41
Less distributions from:
Net investment income			(0.00	)			(0.00	)			(0.00	)		(0.00	)		(0.00		)	(0.02		)
Capital gains			(0.00	)			(0.00	)			(0.00	)		(0.00	)		(0.08		)	(0.26		)
Total distributions			(0.00	)			(0.00	)			(0.00	)		(0.00	)		(0.08		)	(0.28		)
Net asset value,       end of period		$	14.61			$	13.48			$	12.30		$	11.19			$	8.26		$	9.57
Total return			8.38	%			9.59	%			9.92	%		35.47	%	- -12.88			%		4.44	%
Net assets, end of period       (in thousands)	$148,955			$96,375				$23,840				$11,235					$446			$30
Ratio of expenses to       average net assets       including reimbursement			2.33	% (3)			2.42	%			2.35	% (3)		2.93	%			3.10	%		7.71	% (3)
Ratio of net investment       income (loss) to       average net assets       including reimbursement			- -0.30	% (3)			- -0.62	%			- -1.09	% (3)		- -0.83	%		- -0.80		%		0.99	% (3)
Ratio of expenses to       average net assets       excluding reimbursement			- -				- -				2.50	% (3)		3.10	%			5.79	%	51.61		% (3)
Ratio of net investment       loss to average       net assets excluding      reimbursement			- -				- -				- -1.23	% (3)		- -1.00	%		- -3.49		%	- -  42.91		% (3)
Portfolio turnover rate			5	%			5	%			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			For the fiscal year ended			For the fiscal period ended			For the period from 7-24-03 (1) to
	9-30-05			3-31-05			3-31-04			12-31-03
Net asset value,       beginning of period	$	13.82		$	12.58		$	11.40		$	9.84
Income (loss) from       investment operations:
Net investment income (loss)		0.06			0.07			(0.01	)		0.02
Net realized and unrealized             gain on investments		1.18			1.29			1.19			1.58
Total from investment operations		1.24			1.36			1.18			1.60
Less distributions from:
Net investment income		(0.00	)		(0.12	)		(0.00	)		(0.04	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Total distributions		(0.00	)		(0.12	)		(0.00	)		(0.04	)
Net asset value, end of period	$	15.06		$	13.82		$	12.58		$	11.40
Total return		8.97	%		10.90	%		10.35	%		16.28	%
Net assets, end of period       (in millions)		$13			$10			$2			$1
Ratio of expenses to average       net assets including       reimbursement		1.17	% (2)		1.20	%		1.20	% (2)		1.76	% (2)
Ratio of net investment       income (loss) to average       net assets including       reimbursement		0.86	% (2)		0.52	%		- -0.32	% (2)		0.55	% (2)
Ratio of expenses to average       net assets excluding       reimbursement		1.49	% (2)		1.56	%		1.80	% (2)		2.09	% (2)
Ratio of net investment       income (loss) to average       net assets excluding       reimbursement		0.54	% (2)		0.16	%		- -0.92	% (2)		0.22	% (2)
Portfolio turnover rate		5	%		5	%		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 year ended				For the fiscal period ended				For the fiscal year ended December 31,									For the period from 4-19-00 (2) to
	9-30-05				3-31-05				3-31-04				2003				2002			2001		12-31-00
Net asset value,       beginning of period		$	13.77			$	12.54			$	11.37		$	8.34			$	9.55		$	10.07		$	10.00
Income (loss) from       investment operations:
Net investment            income (loss)			0.05				0.04				(0.01	)		(0.01	)			0.04	(3)		0.03			0.05
Net realized and            unrealized gain (loss)            on investments			1.19				1.32				1.18			3.10			(1.17		)		(0.25	)		0.41
Total from investment operations			1.24				1.36				1.17			3.09			(1.13		)		(0.22	)		0.46
Less distributions from:
Net investment income			(0.00	)			(0.13	)			(0.00	)		(0.06	)		(0.00		)		(0.02	)		(0.19	)
Capital gains			(0.00	)			(0.00	)			(0.00	)		(0.00	)		(0.08		)		(0.28	)		(0.20	)
Total distributions			(0.00	)			(0.13	)			(0.00	)		(0.06	)		(0.08		)		(0.30	)		(0.39	)
Net asset value,       end of period		$	15.01			$	13.77			$	12.54		$	11.37			$	8.34		$	9.55		$	10.07
Total return			9.01	%			10.86	%			10.29	%		37.11	%	- -11.86			%	- -2.13		%		4.66	%
Net assets, end of period       (in millions)			$3				$3				$3			$3				$2			$1			$1
Ratio of expenses to       average net assets       including       reimbursement			1.15	%(4)			1.23	%			1.26	%(4)		2.12	%			1.83	%		1.40	%		1.95	%(4)
Ratio of net investment       income (loss) to       average net assets       including       reimbursement			0.89	%(4)			0.41	%			- -0.17	%(4)		- -0.07	%			0.47	%		0.37	%		0.70	%(4)
Ratio of expenses to       average net assets       excluding       reimbursement			- -				- -				1.41	%(4)		2.28	%			4.52	%		10.30	%		19.15	%(4)
Ratio of net investment       loss to average net       assets excluding       reimbursement			- -				- -				- -0.32	%(4)		- -0.23	%		- -2.22		%		- -8.53	%	- -16.50		%(4)
Portfolio turnover rate			5	%			5	%			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				For the fiscal year ended			For the fiscal period ended			For the fiscal year ended			For the period from 11-5-02(2) to
	9-30-05				3-31-05			3-31-04			12-31-03			12-31-02
Net asset value,       beginning of period		$	13.70		$	12.49		$	11.33		$	8.31		$	8.85
Income (loss) from       investment operations:
Net investment             income (loss)			(0.41	)		0.02			(0.01	)		0.00			0.26
Net realized and             unrealized gain (loss)             on investments			1.62			1.30			1.17			3.08			(0.72	)
Total from investment operations			1.21			1.32			1.16			3.08			(0.46	)
Less distributions from:
Net investment income			(0.00	)		(0.11	)		(0.00	)		(0.06	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.08	)
Total distributions			(0.00	)		(0.11	)		(0.00	)		(0.06	)		(0.08	)
Net asset value,       end of period		$	14.91		$	13.70		$	12.49		$	11.33		$	8.31
Total return			8.83	%		10.62	%		10.24	%		37.12	%		- -5.23	%
Net assets, end of period       (in thousands)			$22			$70			$63			$57			$42
Ratio of expenses to average       net assets including       reimbursement			1.31	% (3)		1.49	%		1.39	% (3)		2.03	%		11.51	% (3)
Ratio of net investment       income (loss) to average       net assets including       reimbursement			0.75	% (3)		0.16	%	- -0.29		% (3)		0.03	%		2.96	% (3)
Ratio of expenses to average       net assets excluding       reimbursement			NA			NA			1.53	% (3)		2.20	%		28.44	% (3)
Ratio of net investment       loss to average net       assets excluding       reimbursement			NA			NA		- -0.44		% (3)		- -0.13	%	- -13.97		% (3)
Portfolio turnover rate			5	%		5	%		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, 2005, Ivy Dividend Income Fund had net assets totaling $65,796,685 invested in a diversified portfolio of:

89.89%	Common Stocks
10.11%	Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Energy Stocks	$	21.56
Financial Services Stocks	$	13.17
Cash and Cash Equivalents	$	10.11
Consumer Nondurables Stocks	$	8.42
Technology Stocks	$	7.61
Utilities Stocks	$	7.04
Capital Goods Stocks	$	6.57
Health Care Stocks	$	6.35
Consumer Services Stocks	$	4.68
Multi-Industry Stocks	$	4.28
Raw Materials Stocks	$	3.66
Transportation Stocks	$	2.56
Shelter Stocks	$	2.28
Miscellaneous Stocks	$	1.71

The Investments of Ivy Dividend Income Fund
September 30, 2005
COMMON STOCKS	Shares			Value
Aircraft - 3.36%
Boeing Company (The)		15,350	$	1,043,033
Goodrich Corporation		16,250		720,525
Lockheed Martin Corporation		7,300		445,592
				2,209,150
Aluminum - 0.59%
Alcoa Incorporated		16,000		390,720
Banks - 1.25%
Bank of America Corporation		19,500		820,950
Beverages - 1.41%
Diageo plc, ADR		15,950		925,260
Business Equipment and Services - 1.09%
Genuine Parts Company		16,700		716,430
Capital Equipment - 3.72%
Caterpillar Inc.		20,150		1,183,813
Deere & Company		20,650		1,263,780
				2,447,593
Chemicals - Petroleum and Inorganic - 1.21%
Dow Chemical Company (The)		9,700		404,199
du Pont (E.I.) de Nemours and Company		10,050		393,658
				797,857
Chemicals - Specialty - 0.50%
Air Products and Chemicals, Inc.		5,950		328,083
Computers - Peripherals - 3.11%
Microsoft Corporation		43,700		1,124,183
SAP Aktiengesellschaft, ADR		21,350		925,096
				2,049,279
Electrical Equipment - 0.59%
Emerson Electric Co.		5,400		387,720
Electronic Components - 1.14%
Microchip Technology Incorporated		10,350		311,638
Texas Instruments Incorporated		13,000		440,700
				752,338
Finance Companies - 3.00%
SLM Corporation		36,855		1,976,902
Food and Related - 0.41%
Campbell Soup Company		9,000		267,750
Health Care - Drugs - 2.56%
Abbott Laboratories		17,700		750,480
Pfizer Inc.		37,500		936,375
				1,686,855
Health Care - General - 0.99%
Johnson & Johnson		10,250		648,620
Hospital Supply and Management - 2.80%
Medtronic, Inc.		25,100		1,345,862
PacifiCare Health Systems, Inc.*		6,250		498,625
				1,844,487
Hotels and Gaming - 4.10%
Harrah's Entertainment, Inc.		14,450		941,995
Starwood Hotels & Resorts Worldwide, Inc.		30,700		1,755,119
				2,697,114
Household - General Products - 2.54%
Colgate-Palmolive Company		18,000		950,220
Procter & Gamble Company (The)		12,100		719,466
				1,669,686
Insurance - Property and Casualty - 2.44%
Allstate Corporation (The)		17,650		975,868
St. Paul Companies, Inc. (The)		14,100		632,667
				1,608,535
Leisure Time Industry - 0.58%
Carnival Corporation		7,600		379,848
Mining - 1.36%
Freeport-McMoRan Copper & Gold Inc., Class B		18,400		894,056
Multiple Industry - 4.28%
3M Company		4,450		326,452
General Electric Company		49,750		1,675,083
NRG Energy, Inc.*		7,550		321,630
Valor Communications Group, Inc.		36,100		492,043
				2,815,208
Non-Residential Construction - 2.26%
Fluor Corporation		23,150		1,490,397
Petroleum - International - 9.81%
Anadarko Petroleum Corporation		16,450		1,575,088
BP p.l.c., ADR		10,150		719,128
Burlington Resources Inc.		21,950		1,784,974
Exxon Mobil Corporation		31,250		1,985,625
Marathon Oil Corporation		5,650		389,454
				6,454,269
Petroleum - Services - 11.75%
BJ Services Company		22,600		813,374
Baker Hughes Incorporated		28,250		1,685,960
National Oilwell Varco, Inc.*		12,350		812,630
Patterson-UTI Energy, Inc.		40,800		1,470,636
Schlumberger Limited		18,200		1,535,716
Transocean Inc.*		13,000		797,030
Weatherford International Ltd.*		8,950		614,507
				7,729,853
Railroad - 0.83%
Union Pacific Corporation		7,600		544,920
Real Estate Investment Trust - 2.28%
ProLogis		13,900		615,909
Simon Property Group, Inc.		11,900		882,028
				1,497,937
Retail - General Merchandise - 0.62%
Federated Department Stores, Inc.		6,081		406,636
Savings and Loans - 0.48%
Capitol Federal Financial		9,250		316,119
Security and Commodity Brokers - 6.00%
Alliance Capital Management L.P.		6,900		330,165
Chicago Mercantile Exchange Holdings Inc.		3,700		1,248,010
Franklin Resources, Inc.		3,900		327,444
Marsh & McLennan Companies, Inc.		24,050		730,879
Merrill Lynch & Co., Inc.		9,650		592,028
Morgan (J.P.) Chase & Co.		21,152		717,687
				3,946,213
Tobacco - 4.06%
Altria Group, Inc.		25,000		1,842,750
Reynolds American Inc.		10,000		830,200
				2,672,950
Trucking and Shipping - 1.73%
United Parcel Service, Inc., Class B		16,450		1,137,189
Utilities - Electric - 1.57%
Dominion Resources, Inc.		8,200		706,348
NiSource Inc.		13,550		328,587
				1,034,935
Utilities - Gas and Pipeline - 2.96%
Enbridge Inc.		21,250		678,300
Kinder Morgan, Inc.		13,200		1,269,312
				1,947,612
Utilities - Telephone - 2.51%
BellSouth Corporation		20,350		535,205
Iowa Telecommunications Services, Inc.		29,800		501,236
Vodafone Group Plc, ADR		23,750		616,787
				1,653,228
TOTAL COMMON STOCKS - 89.89%			$	59,146,699
(Cost: $48,648,466)

SHORT-TERM SECURITIES	Principal Amount in Thousands
Commercial Paper
Forest and Paper Products - 2.74%
Sonoco Products Co.,
3.94%, 10-3-05	$	1,802		1,801,606
Multiple Industry - 3.04%
Michigan Consolidated Gas Co.,
3.87%, 10-5-05		2,000		1,999,140
Security and Commodity Brokers - 3.04%
UBS Finance Delaware LLC (UBS AG),
3.8%, 10-6-05		2,000		1,998,944
Total Commercial Paper - 8.82%				5,799,690
United States Government Agency Obligation - 3.81%
Federal Home Loan Mortgage Corporation,
3.18%, 10-3-05		2,509		2,508,557
TOTAL SHORT-TERM SECURITIES - 12.63%			$	8,308,247
(Cost: $8,308,247)
TOTAL INVESTMENT SECURITIES - 102.52%			$	67,454,946
(Cost: $56,956,713)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (2.52%)				(1,658,261	)
NET ASSETS - 100.00%			$	65,796,685

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, 2005
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $56,957) (Notes 1 and 3)	$	67,455
Cash		- -	*
Receivables:
Investment securities sold		281
Fund shares sold		204
Dividends and interest		124
Prepaid and other assets		29
Total assets		68,093
LIABILITIES
Payable for investment securities purchased		2,186
Payable to Fund shareholders		72
Accrued shareholder servicing (Note 2)		20
Accrued accounting services fee (Note 2)		4
Accrued distribution and service fees (Note 2)		1
Accrued management fee (Note 2)		1
Other		12
Total liabilities		2,296
Total net assets	$	65,797
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	55,417
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		46
Accumulated undistributed net realized loss                  on investment transactions		(164	)
Net unrealized appreciation in value of investments		10,498
Net assets applicable to outstanding units of capital	$	65,797
Net asset value per share (net assets divided by shares outstanding):
Class A	$13.28
Class B	$13.23
Class C	$13.22
Class Y	$13.28
Capital shares outstanding:
Class A		3,465
Class B		511
Class C		898
Class Y		88

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Operations
     IVY DIVIDEND INCOME FUND
     For the Six Months Ended September 30, 2005
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $1)	$	572
Interest and amortization		73
Total income		645
Expenses (Note 2):
Investment management fee		193
Shareholder servicing:
Class A		53
Class B		12
Class C		19
Class Y		1
Service fee:
Class A		40
Class B		8
Class C		13
Class Y		1
Distribution fee:
Class A		7
Class B		23
Class C		40
Registration fees		27
Accounting services fee		21
Audit fees		10
Custodian fees		5
Other		13
Total expenses		486
Net investment income		159
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on securities		(293	)
Unrealized appreciation in value of securities during the period		5,348
Net gain on investments		5,055
Net increase in net assets resulting from operations	$	5,214

See Notes to Financial Statements.

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

	For the six months ended September 30,				For the fiscal year ended March 31,
	2005				2005
INCREASE IN NET ASSETS
Operations:
Net investment income		$	159			$	239
Realized net gain (loss) on investments			(293	)			130
Unrealized appreciation			5,348				3,430
Net increase in net assets                        resulting from operations			5,214				3,799
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A			(131	)			(208	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(5	)			(9	)
Realized gains on investment transactions:
Class A			(-	)			(84	)
Class B			(-	)			(16	)
Class C			(-	)			(29	)
Class Y			(-	)			(3	)
			(136	)			(349	)
Capital share transactions (Note 5)			11,779				19,821
Total increase			16,857				23,271
NET ASSETS
Beginning of period			48,940				25,669
End of period		$	65,797			$	48,940
Undistributed net investment income		$	46			$	23

(1)See "Financial Highlights" on pages 80 - 83.

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				For the fiscal year ended			For the fiscal period ended			For the period from 6-30-03 (1) to
	9-30-05				3-31-05			3-31-04			12-31-03
Net asset value,      beginning of period		$	12.13		$	11.07		$	11.03		$	10.00
Income from investment operations:
Net investment income			0.05			0.09			0.01			0.04
Net realized and unrealized           gain on investments			1.14			1.10			0.04			1.03
Total from investment operations			1.19			1.19			0.05			1.07
Less distributions from:
Net investment income			(0.04	)		(0.09	)		(0.01	)		(0.04	)
Capital gains			(0.00	)		(0.04	)		(0.00	)		(0.00	)
Total distributions			(0.04	)		(0.13	)		(0.01	)		(0.04	)
Net asset value, end of period		$	13.28		$	12.13		$	11.07		$	11.03
Total return (2)			9.84	%		10.78	%		0.41	%		10.70	%
Net assets, end of period      (in millions)			$46			$32			$17			$16
Ratio of expenses to average      net assets including      voluntary expense waiver			1.51	% (3)		1.59	%		2.00	% (3)		1.11	% (3)
Ratio of net investment income      to average net assets      including voluntary      expense waiver			0.83	% (3)		0.94	%		0.20	% (3)		1.34	% (3)
Ratio of expenses to average      net assets excluding      voluntary expense waiver			- -	(4)		- -	(4)		2.40	% (3)		1.81	% (3)
Ratio of net investment income      (loss) to average net assets      excluding voluntary expense      waiver			- -	(4)		- -	(4)		- -0.20	% (3)		0.64	% (3)
Portfolio turnover rate			9	%		32	%		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				For the fiscal year ended			For the fiscal period ended			For the period from 6-30-03 (1) to
	9-30-05				3-31-05			3-31-04			12-31-03
Net asset value,      beginning of period		$	12.09		$	11.05		$	11.03		$	10.00
Income (loss) from      investment operations:
Net investment           income (loss)			(0.00	)		0.02			(0.02	)		0.01
Net realized and unrealized           gain on investments			1.14			1.06			0.04			1.03
Total from investment operations			1.14			1.08			0.02			1.04
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.01	)
Capital gains			(0.00	)		(0.04	)		(0.00	)		(0.00	)
Total distributions			(0.00	)		(0.04	)		(0.00	)		(0.01	)
Net asset value, end of period		$	13.23		$	12.09		$	11.05		$	11.03
Total return			9.43	%		9.76	%		0.18	%		10.36	%
Net assets, end of period      (in millions)			$7			$6			$2			$2
Ratio of expenses to average      net assets including      voluntary expense waiver			2.36	% (2)		2.44	%		2.99	% (2)		2.03	% (2)
Ratio of net investment income ��    (loss) to average net assets      including voluntary expense      waiver			- -0.05	% (2)		0.11	%		- -0.81	% (2)		0.36	% (2)
Ratio of expenses to average      net assets excluding      voluntary expense waiver			- -	(3)		- -	(3)		3.39	% (2)		2.73	% (2)
Ratio of net investment loss      to average net assets excluding      voluntary expense waiver			- -	(3)		- -	(3)		- -1.21	% (2)		- -0.34	% (2)
Portfolio turnover rate			9	%		32	%		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				For the fiscal year ended			For the fiscal period ended			For the period from 6-30-03(1) to
	9-30-05				3-31-05			3-31-04			12-31-03
Net asset value, beginning of period		$	12.09		$	11.05		$	11.03		$	10.00
Income (loss) from investment operations:
Net investment income (loss)			(0.00	)		0.01			(0.02	)		0.01
Net realized and unrealized gain on investments			1.13			1.07			0.04			1.03
Total from investment operations			1.13			1.08			0.02			1.04
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.01	)
Capital gains			(0.00	)		(0.04	)		(0.00	)		(0.00	)
Total distributions			(0.00	)		(0.04	)		(0.00	)		(0.01	)
Net asset value, end of period		$	13.22		$	12.09		$	11.05		$	11.03
Total return			9.35	%		9.76	%		0.18	%		10.38	%
Net assets, end of period      (in millions)			$12			$10			$6			$5
Ratio of expenses to average      net assets including      voluntary expense waiver			2.33	%(2)		2.42	%		2.88	%(2)		1.98	%(2)
Ratio of net investment      income (loss) to average      net assets including      voluntary expense waiver			- -0.02	%(2)		0.10	%		- -0.68	%(2)		0.45	%(2)
Ratio of expenses to average      net assets excluding      voluntary expense waiver			- -	(3)		- -	(3)		3.28	%(2)		2.68	%(2)
Ratio of net investment loss      to average net assets      excluding voluntary expense      waiver			- -	(3)		- -	(3)		- -1.08	%(2)		- -0.25	%(2)
Portfolio turnover rate			9	%		32	%		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				For the fiscal year ended			For the fiscal period ended			For the period from 6-30-03(1) to
	9-30-05				3-31-05			3-31-04			12-31-03
Net asset value,       beginning of period		$	12.13		$	11.07		$	11.03		$	10.00
Income from investment operations:
Net investment income			0.06			0.11			0.01			0.05
Net realized and unrealized             gain on investments			1.14			1.10			0.04			1.03
Total from investment operations			1.20			1.21			0.05			1.08
Less distributions from:
Net investment income			(0.05	)		(0.11	)		(0.01	)		(0.05	)
Capital gains			(0.00	)		(0.04	)		(0.00	)		(0.00	)
Total distributions			(0.05	)		(0.15	)		(0.01	)		(0.05	)
Net asset value, end of period		$	13.28		$	12.13		$	11.07		$	11.03
Total return			9.92	%		10.94	%		0.42	%		10.78	%
Net assets, end of period       (in millions)			$1			$1			$1			$1
Ratio of expenses to average       net assets including       voluntary expense waiver			1.36	%(2)		1.44	%		1.91	% (2)		1.25	%(2)
Ratio of net investment income       to average net assets including       voluntary expense waiver			0.95	%(2)		1.09	%		0.28	% (2)		1.08	%(2)
Ratio of expenses to average       net assets excluding       voluntary expense waiver			-	(3)		- -	(3)		2.31	% (2)		1.95	%(2)
Ratio of net investment income       (loss) to average net assets       excluding voluntary expense       waiver			-	(3)		- -	(3)		- -0.12	% (2)		0.38	%(2)
Portfolio turnover rate			9	%		32	%		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, 2005, Ivy European Opportunities Fund had net assets totaling $297,272,528 invested in a diversified portfolio of:

95.23%	Common Stocks
4.77%	Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005, your Fund was invested by geographic region and by industry, respectively, as follows:

Europe	$	92.85
Cash and Cash Equivalents	$	4.77
South America	$	1.69
Pacific Basin	$	0.69

Financial Services Stocks	$	14.38
Consumer Nondurables Stocks	$	14.11
Utilities Stocks	$	12.50
Energy Stocks	$	11.99
Retail Stocks	$	10.28
Multi-Industry Stocks	$	8.23
Capital Goods Stocks	$	7.76
Miscellaneous Stocks	$	5.91
Transportation Stocks	$	5.70
Cash and Cash Equivalents	$	4.77
Business Equipment and Services Stocks	$	4.37

The Investments of Ivy European Opportunities Fund
September 30, 2005
COMMON STOCKS	Shares		Value
Argentina - 1.69%
NDS Group plc, ADR*	135,000	$	5,017,950
Australia - 0.69%
Centamin Egypt Limited*(A)	7,700,000		2,057,444
Austria - 6.90%
AGRANA Beteiligungs-AG (A)	17,500		1,701,311
Andritz AG (A)	20,000		1,994,839
OMV Aktiengesellschaft (A)	180,000		10,690,347
Telekom Austria Aktiengesellschaft (A)	138,000		2,745,248
Wienerberger AG (A)	86,000		3,389,568
			20,521,313
Czech Republic - 0.45%
Zentiva N.V., GDR (B)	28,909		1,326,923
France - 10.93%
Bouygues SA (A)	87,000		4,043,877
France Telecom (A)	290,000		8,324,090
Iliad SA (A)	119,595		6,627,022
Technip-Coflexip (A)	100,000		5,918,648
Total S.A. (A)	27,800		7,588,683
			32,502,320
Germany - 13.29%
Allianz Aktiengesellschaft, Registered Shares (A)	26,000		3,512,725
cash.life AG (A)	5,504		221,630
Deutsche Post AG (A)	320,000		7,492,787
Deutsche Telekom AG, Registered Shares (A)	390,000		7,097,329
Hypo Real Estate Holding AG (A)	35,000		1,775,354
mobilcom Aktiengesellschaft (A)	190,000		4,378,045
Pfleiderer Ag, Registered Shares*(A)	490,000		9,382,451
Siemens AG (A)	73,000		5,628,906
			39,489,227
Greece - 1.61%
Coca-Cola Hellenic Bottling Company S.A. (A)	165,000		4,783,720
Hungary - 0.85%
MOL Magyar Olaj-es Gazipari Rt. (A)	7,778		860,020
National Savings and Commercial Bank Ltd. (A)	42,500		1,670,417
			2,530,437
Italy - 7.47%
AZIMUT HOLDING S.P.A. (A)	567,000		4,586,724
ENEL S.p.A. (A)	1,226,792		10,572,910
Eni S.p.A. (A)	125,000		3,712,677
Geox S.p.A. (A)(B)	232,000		2,313,177
UniCredito Italiano S.p.A. (A)	180,000		1,014,728
			22,200,216
Netherlands - 3.99%
Aalberts Industries N.V. (A)	74,000		3,918,159
Buhrmann NV (A)	110,000		1,328,811
Pyaterochka Holding N.V., GDR*	325,385		6,621,585
			11,868,555
Norway - 3.21%
Statoil ASA (A)	385,000		9,550,506
Spain - 6.50%
ACS Actividades de Construccion y Servicios, S.A. (A)	10,000		291,485
Altadis, S.A. (A)	165,000		7,391,759
Banco Santander Central Hispano, S.A. (A)	600,000		7,882,716
Cintra Concesiones de Intraestructuras de Transporte (A)	274,000		3,764,448
			19,330,408
Sweden - 1.23%
Oriflame Cosmetics S.A., Swedish Depositary Receipts (A)	126,000		3,665,626
Switzerland - 2.21%
Credit Suisse Group, Registered Shares (A)	100,000		4,426,761
Unaxis Holding AG, Registered Shares (A)*	16,089		2,129,207
			6,555,968
United Kingdom - 34.21%
Admiral Group Plc (A)	650,000		4,872,221
BAA plc (A)	325,000		3,576,784
Body Shop International PLC (The) (A)	1,100,000		4,190,551
British American Tobacco p.l.c. (A)	400,000		8,402,267
Center Parcs (UK) Group Plc (A)	155,000		166,758
Enterprise Inns plc (A)	160,000		2,377,468
Evolution Group Plc (The) (A)	2,300,000		6,044,200
Halfords Group Plc (A)	1,000,000		5,114,730
IP2IPO Group plc (A)*	323,941		2,985,224
iSOFT Group plc (A)	405,000		3,085,769
Imperial Tobacco Group PLC (A)	70,000		2,004,974
Interserve Plc (A)	333,000		2,099,641
Investec plc (A)	108,000		4,114,359
Kensington Group plc (A)	197,000		2,289,688
MFI Furniture Group Plc (A)	1,715,525		3,290,418
Man Group plc (A)	107,000		3,125,135
Millfield Group plc (A)*	431,305		221,514
Old Mutual plc (A)	1,500,000		3,670,701
Omega International Group PLC (A)	270,000		752,394
Peninsular and Oriental Steam Navigation Company (The) (A)	1,000,000		5,890,758
Persimmon plc (A)	100,000		1,513,255
Photo-Me International plc (A)	600,000		1,232,826
Premier Brands Foods plc (A)	1,016,000		5,496,712
Punch Taverns plc (A)	318,368		4,492,045
Regal Petroleum plc (A)*	900,461		1,487,884
Regal Petroleum plc (A)(B)*	1,050,000		1,734,976
Shire Pharmaceuticals Group plc (A)	150,000		1,824,107
Taylor Woodrow plc (A)	325,000		1,858,609
tesco plc (A)	1,700,000		9,279,708
Travis Perkins plc (A)	180,000		4,501,668
			101,697,344
TOTAL COMMON STOCKS - 95.23%		$	283,097,957
(Cost: $227,235,416)

SHORT-TERM SECURITIES	Principal Amount in Thousands
Security and Commodity Brokers
Greenwich Capital Holdings Inc. (Royal Bank of       Scotland PLC (The)),
3.87%, 10-3-05	$	8,487		8,485,176
UBS Finance Delaware LLC (UBS AG),
3.8%, 10-6-05		5,000		4,997,361
TOTAL SHORT-TERM SECURITIES - 4.54%			$	13,482,537
(Cost: $13,482,537)
TOTAL INVESTMENT SECURITIES - 99.77%			$	296,580,494
(Cost: $240,717,953)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.23%				692,034
NET ASSETS - 100.00%			$	297,272,528

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, 2005, the total value of these securities amounted to $5,375,076 or 1.81% 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 EUROPEAN OPPORTUNITIES FUND
     September 30, 2005
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $240,718) (Notes 1 and 3)	$	296,580
Receivables:
Fund shares sold		739
Dividends and interest		556
Investment securities sold		549
Prepaid and other assets		41
Total assets		298,465
LIABILITIES
Due to custodian		380
Payable to Fund shareholders		322
Accrued management fee (Note 2)		240
Accrued shareholder servicing (Note 2)		102
Accrued service fee (Note 2)		61
Accrued distribution fee (Note 2)		54
Accrued accounting services fee (Note 2)		6
Accrued administrative fee (Note 2)		2
Other		25
Total liabilities		1,192
Total net assets	$	297,273
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	290,389
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		1,627
Accumulated undistributed net realized loss on                investment transactions		(50,595	)
Net unrealized appreciation in value of investments		55,852
Net assets applicable to outstanding units of capital	$	297,273
Net asset value per share (net assets divided by shares outstanding):
Class A	$29.43
Class B	$28.30
Class C	$28.40
Class Y	$29.47
Advisor Class	$29.74
Capital shares outstanding:
Class A		6,906
Class B		1,407
Class C		1,641
Class Y		141
Advisor Class		117

See Notes to Financial Statements.

Statement of Operations
     IVY EUROPEAN OPPORTUNITIES FUND
     For the Six Months Ended September 30, 2005
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $277)	$	3,795
Interest and amortization		437
Total income		4,232
Expenses (Note 2):
Investment management fee		1,371
Shareholder servicing:
Class A		329
Class B		66
Class C		66
Class Y		3
Advisor Class		2
Service fee:
Class A		205
Class B		49
Class C		56
Class Y		5
Distribution fee:
Class A		27
Class B		146
Class C		169
Custodian fees		46
Accounting services fee		35
Audit fees		21
Administrative fee		14
Legal fees		6
Other		77
Total expenses		2,693
Net investment income		1,539
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		9,047
Realized net gain on foreign currency transactions		156
Realized net gain on investments		9,203
Unrealized appreciation in value of investments during the period		187
Net gain on investments		9,390
Net increase in net assets resulting from operations	$	10,929

See Notes to Financial Statements.

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

	For the six months ended September 30,				For the fiscal year ended March 31,
	2005				2005
INCREASE IN NET ASSETS
Operations:
Net investment income (loss)		$	1,539			$	(527	)
Realized net gain on investments			9,203				12,332
Unrealized appreciation			187				29,175
Net increase in net assets                     resulting from operations			10,929				40,980
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A			(-	)			(64	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(6	)
Advisor Class			(-	)			(21	)
Realized gains on investment transactions:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)
Advisor Class			(-	)			(-	)
			(-	)			(91	)
Capital share transactions (Note 5)			23,456				75,762
Total increase			34,385				116,651
NET ASSETS
Beginning of period			262,888				146,237
End of period		$	297,273			$	262,888
Undistributed net investment income (loss)		$	1,627			$	(68	)

(1)See "Financial Highlights" on pages 92 - 96.

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 year ended			For the fiscal period ended			For the fiscal year ended December 31,
	9-30-05				3-31-05			3-31-04			2003			2002			2001			2000
Net asset value,      beginning of period		$	28.31		$	22.30		$	19.89		$	13.20		$	13.65		$	17.25		$	17.13
Income (loss) from      investment operations:
Net investment           income (loss)			0.17			(0.03	)		(0.03	)		0.02			0.01	(1)		(0.08	)		(0.07	)
Net realized and           unrealized gain (loss)           on investments			0.95			6.05			2.44			6.71			(0.46	) (2)		(3.49	) (2)		0.82
Total from investment      operations			1.12			6.02			2.41			6.73			(0.45	)		(3.57	)		0.75
Less distributions from:
Net investment           income			(0.00	)		(0.01	)		(0.00	)		(0.04	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.03	)		(0.63	)
Total distributions			(0.00	)		(0.01	)		(0.00	)		(0.04	)		(0.00	)		(0.03	)		(0.63	)
Net asset value, end of period		$	29.43		$	28.31		$	22.30		$	19.89		$	13.20		$	13.65		$	17.25
Total return (3)			3.96	%		27.02	%		12.12	%		51.02	%		- -3.30	% (2)		-20.67	% (2)		4.51	%
Net assets, end of period      (in millions)			$203			$170			$79			$38			$20			$31			$55
Ratio of expenses to      average net assets      including reimbursement			1.73	% (4)		1.79	%		1.72	% (4)		2.26	%		2.15	%		2.15	%		1.83	%
Ratio of net investment      income (loss) to average      net assets including      reimbursement			1.30	% (4)		- -0.07	%		- -0.61	% (4)		0.18	%		0.06	%		- -0.44	%		- -0.36	%
Ratio of expenses to      average net assets      excluding reimbursement			NA			NA			NA			NA			2.15	%		2.17	%		NA
Ratio of net investment      income (loss) to      average net assets      excluding      reimbursement			NA			NA			NA			NA			0.06	%		- -0.46	%		NA
Portfolio turnover rate			30	%		63	%		31	%		123	%		69	%		66	%		46	%

(1)Based on average shares outstanding.
(2)Includes redemption fees added to capital.
(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 year ended			For the fiscal period ended				For the fiscal year ended December 31,
	9-30-05				3-31-05			3-31-04				2003			2002			2001			2000
Net asset value,      beginning of period		$	27.32		$	21.66			$	19.36		$	12.93		$	13.54		$	17.26		$	17.13
Income (loss) from      investment operations:
Net investment           income (loss)			0.08			(0.17	)			(0.09	)		(0.07	)		(0.10	)(1)		(0.20	)		(0.18	)
Net realized and           unrealized gain (loss)           on investments			0.90			5.83				2.39			6.50			(0.51	)		(3.49	)		0.83
Total from investment      operations			0.98			5.66				2.30			6.43			(0.61	)		(3.69	)		0.65
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	)		(0.00	)		(0.03	)		(0.52	)
Total distributions			(0.00	)		(0.00	)			(0.00	)		(0.00	)		(0.00	)		(0.03	)		(0.52	)
Net asset value,      end of period		$	28.30		$	27.32			$	21.66		$	19.36		$	12.93		$	13.54		$	17.26
Total return			3.59	%		26.13	%			11.88	%		49.73	%	-4.51		%	- -21.35		%		4.12	%
Net assets, end of period      (in millions)			$40			$40				$32			$29			$25			$34			$57
Ratio of expenses      to average net      assets including      reimbursement			2.49	%(2)		2.53	%			2.58	%(2)		3.00	%		2.92	%		2.89	%		2.59	%
Ratio of net investment      income (loss) to      average net      assets including      reimbursement			0.62	%(2)		- -0.73	%			- -1.57	%(2)		- -0.47	%		- -0.70	%		- -1.18	%		- -1.12	%
Ratio of expenses to      average net assets      excluding reimbursement			NA			NA				NA			NA			2.92	%		2.91	%		NA
Ratio of net investment      loss to average net      assets excluding      reimbursement			NA			NA				NA			NA			- -0.70	%		- -1.20	%		NA
Portfolio turnover rate			30	%		63	%			31	%		123	%		69	%		66	%		46	%

(1)Based on average shares outstanding.
(2)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 year ended			For the fiscal period ended				For the fiscal year ended December 31,
	9-30-05				3-31-05			3-31-04				2003			2002			2001			2000
Net asset value,      beginning of period		$	27.42		$	21.74			$	19.43		$	12.98		$	13.59		$	17.32		$	17.13
Income (loss) from      investment operations:
Net investment           income (loss)			0.09			(0.14	)			(0.08	)		(0.07	)		(0.10	) (1)		(0.22	)		(0.22	)
Net realized and           unrealized gain (loss)           on investments			0.89			5.82				2.39			6.52			(0.51	)		(3.48	)		0.88
Total from investment      operations			0.98			5.68				2.31			6.45			(0.61	)		(3.70	)		0.66
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	)		(0.00	)		(0.03	)		(0.47	)
Total distributions			(0.00	)		(0.00	)			(0.00	)		(0.00	)		(0.00	)		(0.03	)		(0.47	)
Net asset value,      end of period		$	28.40		$	27.42			$	21.74		$	19.43		$	12.98		$	13.59		$	17.32
Total return			3.58	%		26.13	%			11.89	%		49.69	%	-4.49		%	- -21.32		%		3.98	%
Net assets, end of period      (in millions)			$47			$45				$27			$23			$19			$25			$50
Ratio of expenses to      average net assets      including reimbursement			2.43	%(2)		2.51	%			2.56	%(2)		2.98	%		2.92	%		2.91	%		2.58	%
Ratio of net investment      income (loss) to average      net assets including      reimbursement			0.66	%(2)		- -0.79	%			- -1.54	%(2)		- -0.43	%		- -0.70	%		- -1.20	%		- -1.11	%
Ratio of expenses to      average net assets      excluding reimbursement			NA			NA				NA			NA			2.92	%		2.93	%		NA
Ratio of net investment      loss to average net      assets excluding      reimbursement			NA			NA				NA			NA			- -0.70	%		- -1.22	%		NA
Portfolio turnover rate			30	%		63	%			31	%		123	%		69	%		66	%		46	%

(1)Based on average shares outstanding.
(2)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				For the fiscal year ended			For the fiscal period ended			For the period from 7-24-03 (1) to
	9-30-05				3-31-05			3-31-04			12-31-03
Net asset value,      beginning of period		$	28.33		$	22.30		$	19.89		$	14.88
Income (loss) from      investment operations:
Net investment           income (loss)			0.21			0.09			(0.02	)		(0.04	)
Net realized and           unrealized gain           on investments			0.93			6.00			2.43			5.12
Total from investment      operations			1.14			6.09			2.41			5.08
Less distributions from:
Net investment income			(0.00	)		(0.06	)		(0.00	)		(0.07	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.00	)		(0.06	)		(0.00	)		(0.07	)
Net asset value,      end of period		$	29.47		$	28.33		$	22.30		$	19.89
Total return			4.02	%		27.32	%		12.12	%		34.14	%
Net assets, end of period      (in millions)			$4			$4			$4			$3
Ratio of expenses to      average net assets			1.54	% (2)		1.61	%		1.75	% (2)		1.51	% (2)
Ratio of net investment      income (loss) to      average net assets			1.47	% (2)		0.53	%		- -0.71	% (2)		- -0.58	% (2)
Portfolio turnover rate			30	%		63	%		31	%		123	% (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 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 year ended				For the fiscal period ended				For the fiscal year ended December 31,
	9-30-05				3-31-05				3-31-04				2003			2002			2001			2000
Net asset value,      beginning of period		$	28.55			$	22.48			$	20.03		$	13.34		$	13.80		$	17.39		$	17.23
Income (loss) from      investment operations:
Net investment           income (loss)			0.42				0.21				(0.01	)		0.24			0.06	(2)		(0.02	)		(0.02	)
Net realized and           unrealized gain (loss)           on investments			0.77				5.99				2.46			6.58			(0.52	)		(3.54	)		0.85
Total from investment      operations			1.19				6.20				2.45			6.82			(0.46	)		(3.56	)		0.83
Less distributions from:
Net investment income			(0.00	)			(0.13	)			(0.00	)		(0.13	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)			(0.00	)			(0.00	)		(0.00	)		(0.00	)		(0.03	)		(0.67	)
Total distributions			(0.00	)			(0.13	)			(0.00	)		(0.13	)		(0.00	)		(0.03	)		(0.67	)
Net asset value,      end of period		$	29.74			$	28.55			$	22.48		$	20.03		$	13.34		$	13.80		$	17.39
Total return			4.17	%			27.64	%			12.23	%		51.12	%	- -3.33		%	- -20.44		%		5.01	%
Net assets, end of period      (in millions)			$3				$4				$4			$4			$6			$9			$19
Ratio of expenses to      average net assets      including reimbursement			1.24	% (3)			1.36	%			1.41	%(3)		1.96	%		1.81	%		1.72	%		1.55	%
Ratio of net investment      income (loss) to      average net assets      including reimbursement			1.96	% (3)			0.51	%			- -0.41	%(3)		1.02	%		0.40	%		0.00	%		- -0.09	%
Ratio of expenses to      average net assets      excluding reimbursement			NA				NA				NA			NA			1.81	%		1.74	%		NA
Ratio of net investment      income (loss) to      average net assets      excluding reimbursement			NA				NA				NA			NA			0.40	%		- -0.02	%		NA
Portfolio turnover rate			30	%			63	%			31	%		123	%		69	%		66	%		46	%

(1)See Note 5 to financial statements.
(2)Based on average shares outstanding.
(3)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY GLOBAL NATURAL RESOURCES FUND

Portfolio Highlights

On September 30, 2005, Ivy Global Natural Resources Fund had net assets totaling $2,127,117,536 invested in a diversified portfolio of:

94.03%	Common Stocks and Warrants
5.97%	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, 2005, your Fund was invested by geographic region and by industry, respectively, as follows:

United States	$	37.23
South America	$	16.33
Canada	$	15.72
Pacific Basin	$	11.43
Africa	$	6.15
Cash and Cash Equivalents and Unrealized Loss on       Open Forward Currency Contracts	$	5.97
Europe	$	3.62
Other	$	2.57
Mexico	$	0.98

Raw Materials Stocks	$	39.13
Energy Stocks	$	29.12
Multi-Industry Stocks	$	13.74
Shelter Stocks	$	5.99
Cash and Cash Equivalents and Unrealized Loss       on Open Forward Currency Contracts	$	5.97
Capital Goods Stocks	$	4.05
Miscellaneous Stocks	$	2.00

The Investments of Ivy Global Natural Resources Fund
September 30, 2005
COMMON STOCKS AND WARRANT		Shares		Value
Australia - 0.06%
Central Asia Gold Limited (A)*		2,710,964	$	1,348,966
Bermuda - 2.49%
China Gas Holdings Limited (A)*	145,001,000			22,617,270
Golar LNG Limited*		1,100,000		14,195,500
Tsakos Energy Navigation Limited		450,000		16,209,000
				53,021,770
Brazil - 13.64%
Aracruz Celulose S.A., ADR		1,215,000		49,304,700
Caemi Mineracao e Metalurgia S.A. (A)		20,000,000		31,566,676
Companhia Siderurgica Nacional, ADR		950,000		22,059,000
Companhia Vale do Rio Doce, ADR		1,550,000		67,983,000
Petroleo Brasileiro S.A. - Petrobras, ADR		575,000		41,106,750
Suzano Bahia Sul Papel E Celulose S.A. (A)		10,525,000		59,227,311
Votorantim Celulose e Papel S.A., ADR		1,400,000		18,760,000
				290,007,437
Canada - 15.72%
Barrick Gold Corporation (A)		1,025,000		29,708,867
Cambior Inc. (A)*		13,881,900		29,370,839
Cambior Inc., Warrants (A)*		350,000		39,133
Eldorado Gold Corporation (A)*		1,765,700		6,241,530
Ferus Gas Industries Trust (A)(B)*		615,000		1,322,353
Glamis Gold Ltd. (A)*		1,507,200		33,055,474
Goldcorp Inc. (A)		711,900		14,266,165
Guinor Gold Corporation (A)*		6,308,575		7,487,601
Guinor Gold Corporation (A)(B)*		12,963,700		15,386,519
Hydrogenics Corporation (A)*		1,650,000		6,456,954
IAMGOLD Corporation (A)		2,400,000		17,607,293
IAMGOLD Corporation (A)(B)		125,000		917,047
Inco Limited (A)		425,000		20,100,413
Kinross Gold Corporation (A)*		4,500,000		34,561,796
Placer Dome Inc. (A)		2,300,000		39,345,489
Pure Energy Services Ltd. (A)(B)*		423,000		3,274,275
Savanna Energy Services Corp. (A)*		600,000		14,175,626
Trican Well Service Ltd. (A)*		500,000		18,194,719
Western Oil Sands Inc., Class A (A)*		990,600		23,472,117
ZENON Environmental Inc. (A)*		600,000		12,570,740
zed.i solutions inc. (A)*		4,000,000		5,160,403
zed.i solutions inc. (A)(B)*		1,300,000		1,677,131
				334,392,484
Cayman Islands - 0.08%
Apex Silver Mines Limited*		108,600		1,706,106
China - 7.35%
Aluminum Corporation of China Limited, ADR		350,000		21,969,500
Aluminum Corporation of China Limited, H Shares (A)		22,662,000		14,314,564
China Petroleum and Chemical Corporation, Class H (A)		48,000,000		21,966,123
China Petroleum & Chemical Corporation, ADR		400,000		18,104,000
China Shenhua Energy Company Limited, H shares (A)*		10,689,000		12,538,982
China Shenhua Energy Company Limited, H shares (A)(B)*		9,311,000		10,922,487
Sino-Forest Corporation, Class A (A)*		5,600,000		16,231,186
Sinopec Zhenhai Refining & Chemical Company Limited,       H Shares (A)		25,000,000		27,393,199
Yanzhou Coal Mining Company Limited, Class H (A)		16,300,000		12,922,500
				156,362,541
Mexico - 0.98%
Cemex, S.A. de C.V., ADR		400,000		20,920,000
Peru - 2.69%
Compania de Minas Buenaventura S.A.A., ADR		1,845,000		57,287,250
Russia - 0.81%
OAO LUKOIL, ADR		300,000		17,310,000
South Africa - 6.15%
AngloGold Ashanti Limited, ADR		875,000		37,126,250
Gold Fields Limited, ADR		1,750,000		25,427,500
Impala Platinum Holdings Limited (A)		425,000		48,299,250
Mvelaphanda Resources Limited (A)*		6,500,000		19,872,208
				130,725,208
South Korea - 1.10%
S-Oil Corporation (A)		285,000		23,376,343
Thailand - 2.92%
Thai Oil Public Company Limited (A)		34,000,000		62,089,116
United Kingdom - 2.81%
Highland Gold Mining Limited (A)		3,812,200		14,814,057
Randgold Resources Limited, ADR*		2,050,000		32,072,250
Titanium Resources Group Ltd. (A)*		13,057,059		12,838,520
				59,724,827
United States - 37.23%
Air Products and Chemicals, Inc.		600,000		33,084,000
Airgas, Inc.		400,000		11,852,000
Arch Coal, Inc.		600,000		40,500,000
Atwood Oceanics, Inc.*		400,000		33,684,000
Bunge Limited		300,000		15,786,000
Century Aluminum Company*		1,200,000		26,952,000
ChevronTexaco Corporation		1,150,000		74,439,500
Compass Minerals International, Inc.		500,000		11,500,000
du Pont (E.I.) de Nemours and Company		800,000		31,336,000
Exxon Mobil Corporation		650,000		41,301,000
Huntsman Corporation*		1,800,000		35,190,000
KFx Inc.*		531,300		9,095,856
Lubrizol Corporation (The)		250,000		10,832,500
Massey Energy Company		900,000		45,963,000
Maverick Tube Corporation*		600,000		18,000,000
Nalco Holdings LLC*		3,500,000		59,045,000
Newmont Mining Corporation		810,000		38,207,700
Offshore Logistics, Inc.*		650,000		24,050,000
Patterson-UTI Energy, Inc.		800,000		28,836,000
Peabody Energy Corporation		500,000		42,175,000
Praxair, Inc.		750,000		35,947,500
Rohm and Haas Company		875,000		35,988,750
Sigma-Aldrich Corporation		131,250		8,407,219
streetTRACKS Gold Trust*		200,000		9,344,000
Transocean Inc.*		900,000		55,179,000
Valero Energy Corporation		134,000		15,150,040
				791,846,065
TOTAL COMMON STOCKS AND WARRANT - 94.03%			$	2,000,118,113
(Cost: $1,619,834,593)

UNREALIZED GAIN (LOSS) ON OPEN FORWARD       CURRENCY CONTRACTS - (0.51%)		Face Amount in Thousands
Canadian Dollar, 10-19-05 (C)	CAD117,500				(4,723,359	)
Canadian Dollar, 11-23-05 (C)		113,000			(2,890,160	)
Canadian Dollar, 12-7-05 (C)		127,250			(2,245,271	)
South African Rand, 10-19-05 (C)	ZAR96,000				(788,888	)
South African Rand, 11-23-05 (C)			88,400		(284,183	)
South African Rand, 12-7-05 (C)		117,810			131,629
South African Rand, 12-21-05 (C)		113,300			(70,605	)
				$	(10,870,837	)

SHORT-TERM SECURITIES	Principal Amount in Thousands
Certificate of Deposit - 0.47%
Banks
Wells Fargo Bank, N.A.,
3.74%, 10-18-05	$10,000			10,000,000
Commercial Paper
Banks - 0.70%
Rabobank USA Financial Corp.            (Rabobank Nederland),
3.73%, 10-6-05		15,000		14,992,229
Finance Companies - 1.60%
BP Capital Markets p.l.c.,
3.88%, 10-3-05		15,000		14,996,767
PACCAR Financial Corp.,
3.72%, 10-11-05		10,000		9,989,667
Sony Capital Corp.,
3.8%, 10-21-05		9,000		8,981,000
				33,967,434
Health Care - General - 0.46%
ACTS Retirement - Life Communities, Inc.,            Variable Rate Demand Bonds, Series 2003A            (Bank of America, N.A.),
3.82%, 10-6-05		9,845		9,845,000
Security and Commodity Brokers - 2.86%
Greenwich Capital Holdings Inc.            (Royal Bank of Scotland PLC (The)),
3.87%, 10-3-05	36,535			36,527,145
UBS Finance Delaware LLC,
3.74%, 10-5-05		10,000		9,995,844
UBS Finance Delaware LLC (UBS AG):
3.75%, 10-17-05		4,400		4,392,667
3.74%, 10-  4-05		10,000		9,996,883
				60,912,539
Total Commercial Paper - 5.62%				119,717,202
Municipal Obligation - Taxable - 0.13%
Kansas
City of Park City, Kansas, Taxable Industrial Revenue            Bonds (The Hayes Company, Inc.), Series 2001            (U.S. Bank, National Association),
3.93%, 10-3-05		2,700		2,700,000
TOTAL SHORT-TERM SECURITIES - 6.22%			$	132,417,202
(Cost: $132,417,202)
TOTAL INVESTMENT SECURITIES - 99.74%			$	2,121,664,478
(Cost: $1,752,251,795)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.26%				5,453,058
NET ASSETS - 100.00%			$	2,127,117,536

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, 2005, the total value of these securities amounted to $33,499,812 or 1.57% of net assets.

(C)Principal amounts are denominated in the indicated foreign currency, were 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, 2005
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $1,752,252) (Notes 1 and 3)	$	2,121,664
Receivables:
Fund shares sold		18,586
Investment securities sold		6,425
Dividends and interest		1,582
Prepaid and other assets		71
Total assets		2,148,328
LIABILITIES
Payable for investment securities purchased		15,770
Payable to Fund shareholders		1,555
Accrued management fee (Note 2)		1,435
Due to custodian		1,067
Accrued service fee (Note 2)		409
Accrued shareholder servicing (Note 2)		397
Accrued distribution fee (Note 2)		386
Accrued accounting services fee (Note 2)		14
Accrued administrative fee (Note 2)		8
Other		169
Total liabilities		21,210
Total net assets	$	2,127,118
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	1,613,600
Accumulated undistributed income:
Accumulated undistributed net investment income		3,300
Accumulated undistributed net realized gain on investment transactions		140,815
Net unrealized appreciation in value of investments		369,403
Net assets applicable to outstanding units of capital	$	2,127,118
Net asset value per share (net assets divided by shares outstanding):
Class A	$26.79
Class B	$25.57
Class C	$25.12
Class Y	$26.88
Advisor Class	$26.57
Capital shares outstanding:
Class A		52,259
Class B		6,307
Class C		20,267
Class Y		2,100
Advisor Class		14

See Notes to Financial Statements.

Statement of Operations
     IVY GLOBAL NATURAL RESOURCES FUND
     For the Six Months Ended September 30, 2005
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $690)	$	16,371
Interest and amortization		1,081
Total income		17,452
Expenses (Note 2):
Investment management fee		7,204
Service fee:
Class A		1,268
Class B		159
Class C		483
Class Y		44
Distribution fee:
Class A		72
Class B		477
Class C		1,448
Shareholder servicing:
Class A		1,158
Class B		188
Class C		409
Class Y		28
Advisor Class		1
Custodian fees		188
Accounting services fee		82
Administrative fee		50
Audit fees		23
Legal fees		14
Other		401
Total		13,697
Less expenses in excess of voluntary limit (Note 2)		(32	)
Total expenses		13,665
Net investment income		3,787
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		59,538
Realized net gain on foreign currency transactions		405
Realized net gain on investments		59,943
Unrealized appreciation in value of securities during the period		255,632
Unrealized depreciation in value of forward currency contracts            during the period		(6,495	)
Unrealized appreciation in value of investments during the period		249,137
Net gain on investments		309,080
Net increase in net assets resulting from operations	$	312,867

See Notes to Financial Statements.

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

	For the six months ended September 30,				For the fiscal year ended March 31,
	2005				2005
INCREASE IN NET ASSETS
Operations:
Net investment income (loss)		$	3,787			$	(4,973	)
Realized net gain on investments			59,943				91,084
Unrealized appreciation			249,137				83,974
Net increase in net assets
resulting from operations			312,867				170,085
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A			(-	)			(101	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(41	)
Advisor Class			(-	)			(1	)
Realized gains on investment transactions:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)
Advisor Class			(-	)			(-	)
			(-	)			(143	)
Capital share transactions (Note 5)			475,169				878,997
Total increase			788,036				1,048,939
NET ASSETS
Beginning of period			1,339,082				290,143
End of period		$	2,127,118			$	1,339,082
Undistributed net investment income (loss)		$	3,300			$	(892	)

(1)See "Financial Highlights" on pages 106 - 110.

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 year ended			For the fiscal period ended			For the fiscal year ended December 31,
	9-30-05			3-31-05			3-31-04			2003			2002			2001			2000
Net asset value,      beginning of period	$	22.65		$	17.63		$	16.69		$	11.50		$	11.05		$	9.74		$	8.91
Income (loss) from      investment operations:
Net investment           income (loss)		0.07			(0.04	)		0.03			0.10			(0.11	) (1)		0.04	(1)	(0.07		)
Net realized and unrealized           gain on investments		4.07			5.06			0.91			5.14			0.63	(2)		1.45			0.95
Total from investment      operations		4.14			5.02			0.94			5.24			0.52			1.49			0.88
Less distributions from:
Net investment income		(0.00	)		(0.00	)*		(0.00	)		(0.05	)		(0.00	)		(0.18	)	(0.05		)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.07	)		(0.00	)	(0.00		)
Total distributions		(0.00	)		(0.00	)*		(0.00	)		(0.05	)		(0.07	)		(0.18	)	(0.05		)
Net asset value,      end of period	$	26.79		$	22.65		$	17.63		$	16.69		$	11.50		$	11.05		$	9.74
Total return (3)		18.28	%		28.50	%		5.63	%		45.61	%		4.66	%(2)		15.40	%		9.86	%
Net assets, end of period      (in millions)	$1,400			$895			$192			$95			$17			$8			$6
Ratio of expenses to      average net assets      including reimbursement		1.45	%(4)		1.55	%		1.65	%(4)		1.89	%		2.22	%		2.25	%		2.29	%
Ratio of net investment      income (loss) to average      net assets including      reimbursement		0.71	%(4)		- -0.52	%		- -0.80	%(4)		- -0.66	%		- -0.91	%		0.38	%	- -0.69		%
Ratio of expenses to      average net assets      excluding reimbursement		NA			NA			NA			NA			2.38	%		3.71	%		4.54	%
Ratio of net investment loss      to average net assets      excluding reimbursement		NA			NA			NA			NA			- -1.07	%		- -1.08	%	- -2.94		%
Portfolio turnover rate		53	%		110	%		29	%		58	%		67	%		169	%		134	%

*Not shown due to rounding.
(1)Based on average shares outstanding.
(2)Includes redemption fees added to capital.
(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 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 year ended			For the fiscal period ended			For the fiscal year ended December 31,
	9-30-05			3-31-05			3-31-04			2003			2002			2001			2000
Net asset value,      beginning of period	$	21.72		$	17.04		$	16.16		$	11.19		$	10.81		$	9.56		$	8.77
Income (loss) from      investment operations:
Net investment           income (loss)		0.02			(0.04	)		(0.01	)		(0.06	)		(0.19	) (1)		(0.02	) (1)	(0.09		)
Net realized and unrealized           gain on investments		3.83			4.72			0.89			5.03			0.57			1.42			0.90
Total from investment      operations		3.85			4.68			0.88			4.97			0.38			1.40			0.81
Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.15	)	(0.02		)
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	)		(0.00	)		(0.15	)	(0.02		)
Net asset value,      end of period	$	25.57		$	21.72		$	17.04		$	16.16		$	11.19		$	10.81		$	9.56
Total return		17.73	%		27.46	%		5.45	%		44.42	%		3.52	%		14.73	%		9.27	%
Net assets, end of period      (in millions)	$161			$110			$30			$21			$9			$5			$3
Ratio of expenses to      average net assets      including reimbursement		2.28	%(2)		2.39	%		2.42	%(2)		2.90	%		2.93	%		2.87	%		2.80	%
Ratio of net investment loss      to average net assets      including reimbursement		- -0.10	%(2)		- -1.35	%		- -1.59	%(2)		- -1.54	%		- -1.62	%		- -0.24	%	- -1.20		%
Ratio of expenses to      average net assets      excluding reimbursement		NA			NA			NA			NA			3.09	%		4.33	%		5.05	%
Ratio of net investment loss      to average net assets      excluding reimbursement		NA			NA			NA			NA			- -1.78	%		- -1.70	%	- -3.45		%
Portfolio turnover rate		53	%		110	%		29	%		58	%		67	%		169	%		134	%

(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 year ended			For the fiscal period ended			For the fiscal year ended December 31,
	9-30-05			3-31-05			3-31-04			2003			2002			2001			2000
Net asset value,      beginning of period	$	21.32		$	16.72		$	15.86		$	10.97		$	10.61		$	9.40		$	8.63
Income (loss) from      investment operations:
Net investment           income (loss)		0.01			(0.09	)		0.00			0.04			(0.18	) (1)		(0.02	)(1)	(0.07		)
Net realized and unrealized           gain on investments		3.79			4.69			0.86			4.85			0.55			1.39			0.89
Total from investment      operations		3.80			4.60			0.86			4.89			0.37			1.37			0.82
Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.16	)	(0.05		)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.01	)		(0.00	)	(0.00		)
Total distributions		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.01	)		(0.16	)	(0.05		)
Net asset value,      end of period	$	25.12		$	21.32		$	16.72		$	15.86		$	10.97		$	10.61		$	9.40
Total return		17.82	%		27.51	%		5.42	%		44.58	%		3.46	%		14.62	%		9.49	%
Net assets, end of period      (in millions)	$509			$312			$64			$34			$5			$2			$1
Ratio of expenses to      average net assets      including reimbursement		2.19	%(2)		2.31	%		2.38	%(2)		2.65	%		2.94	%		2.86	%		2.70	%
Ratio of net investment loss      to average net assets      including reimbursement		- -0.04	%(2)		- -1.28	%		- -1.54	%(2)		- -1.48	%		- -1.64	%		- -0.23	%	- -1.10		%
Ratio of expenses to      average net assets      excluding reimbursement		NA			NA			NA			NA			3.10	%		4.32	%		4.95	%
Ratio of net investment loss      to average net assets      excluding reimbursement		NA			NA			NA			NA			- -1.80	%		- -1.69	%	- -3.35		%
Portfolio turnover rate		53	%		110	%		29	%		58	%		67	%		169	%		134	%

(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 six months ended				For the fiscal year ended				For the fiscal period ended				For the period from 7-24-03 (1) to
	9-30-05				3-31-05				3-31-04				12-31-03
Net asset value,      beginning of period		$	22.70			$	17.66			$	16.70			$	12.60
Income (loss) from      investment operations:
Net investment           income (loss)			0.09	(2)			(0.02	)			0.01				0.00
Net realized and unrealized           gain on investments			4.09	(2)			5.13				0.95				4.16
Total from investment operations			4.18				5.11				0.96				4.16
Less distributions from:
Net investment income			(0.00	)			(0.07	)			(0.00	)			(0.06	)
Capital gains			(0.00	)			(0.00	)			(0.00	)			(0.00	)
Total distributions			(0.00	)			(0.07	)			(0.00	)			(0.06	)
Net asset value, end of period		$	26.88			$	22.70			$	17.66			$	16.70
Total return			18.41	%			28.98	%			5.75	%			33.03	%
Net assets, end of period      (in millions)		$57				$21				$4				$1
Ratio of expenses to      average net assets      including reimbursement			1.20	% (3)			1.20	%			1.20	% (3)			1.39	% (3)
Ratio of net investment      income (loss) to average      net assets including      reimbursement			0.75	% (3)			- -0.19	%			- -0.35	% (3)			- -0.54	% (3)
Ratio of expenses to      average net assets      excluding reimbursement			1.38	% (3)			1.48	%			1.63	% (3)			NA
Ratio of net investment      income (loss) to average      net assets excluding      reimbursement			0.57	% (3)			- -0.47	%			- -0.79	% (3)			NA
Portfolio turnover rate			53	%			110	%			29	%			58	% (4)

(1)Commencement of operations of the class.
(2)Based on average weekly shares outstanding.
(3)Annualized.
(4)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 year ended			For the fiscal period ended			For the fiscal year ended December 31,
	9-30-05			3-31-05			3-31-04			2003			2002			2001			2000
Net asset value,      beginning of period	$	22.45		$	17.47		$	16.54		$	11.43		$	11.02		$	9.74		$	8.90
Income (loss) from      investment operations:
Net investment           income (loss)		0.04			(0.14	)		(0.03	)		(0.58	)		(0.07	)		0.09	(2)	(0.05		)
Net realized and      unrealized gain      on investments		4.08			5.14			0.96			5.78			0.56			1.43			0.95
Total from investment      operations		4.12			5.00			0.93			5.20			0.49			1.52			0.90
Less distributions from:
Net investment income		(0.00	)		(0.02	)		(0.00	)		(0.09	)		(0.00	)		(0.24	)	(0.06		)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.08	)		(0.00	)	(0.00		)
Total distributions		(0.00	)		(0.02	)		(0.00	)		(0.09	)		(0.08	)		(0.24	)	(0.06		)
Net asset value,      end of period	$	26.57		$	22.45		$	17.47		$	16.54		$	11.43		$	11.02		$	9.74
Total return		18.35	%		28.63	%		5.62	%		45.55	%		4.46	%		15.71	%	10.17		%
Net assets, end of period      (in thousands)	$373			$476			$512			$484			$570			$465			$22
Ratio of expenses to      average net assets      including reimbursement		1.31	%(3)		1.47	%		1.57	%(3)		2.19	%		1.82	%		1.78	%		2.02	%
Ratio of net investment      income (loss) to average      net assets including      reimbursement		1.06	%(3)		- -0.36	%		- -0.74	%(3)		- -0.41	%		- -0.51	%		0.85	%	- -0.42		%
Ratio of expenses to      average net assets      excluding reimbursement		NA			NA			NA			NA			1.98	%		3.24	%		4.27	%
Ratio of net investment      loss to average      net assets excluding      reimbursement		NA			NA			NA			NA			- -0.67	%		- -0.61	%	- -2.67		%
Portfolio turnover rate		53	%		110	%		29	%		58	%		67	%		169	%		134	%

(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 FUND

Portfolio Highlights

On September 30, 2005, Ivy International Fund had net assets totaling $149,781,343 invested in a diversified portfolio of:

97.85%	Common Stocks
2.15%	Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005, your Fund was invested by geographic region and by industry, respectively, as follows:

Europe	$	60.59
Pacific Basin	$	31.84
Canada	$	3.02
Cash and Cash Equivalents	$	2.15
United States	$	1.31
Mexico	$	1.09

Financial Services Stocks	$	25.19
Energy Stocks	$	14.47
Consumer Goods Stocks	$	12.27
Capital Goods Stocks	$	10.80
Utilities Stocks	$	7.60
Technology Stocks	$	6.96
Raw Materials Stocks	$	4.78
Health Care Stocks	$	3.82
Business Equipment and Services Stocks	$	3.75
Multi-Industry Stocks	$	3.02
Shelter Stocks	$	2.97
Retail Stocks	$	2.22
Cash and Cash Equivalents	$	2.15

The Investments of Ivy International Fund
September 30, 2005
COMMON STOCKS		Shares		Value
Australia - 1.15%
Westpac Banking Corporation (A)		107,000	$	1,721,722
Austria - 6.74%
Bank Austria Creditanstalt (A)		20,000		2,235,480
OMV Aktiengesellschaft (A)		100,000		5,939,082
Raiffeisen International Bank-Holding AG (A)*		28,700		1,916,331
				10,090,893
Belgium - 0.44%
KBC Group NV (A)		8,150		660,271
Canada - 3.02%
EnCana Corporation (A)		57,300		3,343,773
Shoppers Drug Mart Corporation (A)(B)		33,350		1,178,881
				4,522,654
Finland - 0.57%
Nokia OYJ (A)		51,000		854,550
France - 7.35%
France Telecom (A)		55,050		1,580,142
Sanofi-Aventis (A)		22,400		1,851,080
Total S.A. (A)		17,000		4,640,561
VINCI (A)		34,200		2,945,417
				11,017,200
Germany - 8.43%
Allianz Aktiengesellschaft, Registered Shares (A)		10,000		1,351,048
BASF Aktiengesellschaft (A)		24,200		1,820,934
Bayerische Hypo- und Vereinsbank AG (A)*		86,000		2,418,905
Commerzbank Aktiengesellschaft (A)		40,000		1,095,262
Continental Aktiengesellschaft (A)		12,400		1,017,700
Deutsche Telekom AG, Registered Shares (A)		40,000		727,931
Fresenius AG (A)		5,430		752,221
PUMA Aktiengesellschaft Rudolf Dassler Sport (A)		3,050		825,092
Siemens AG (A)		34,000		2,621,682
				12,630,775
Ireland - 4.23%
Anglo Irish Bank Corporation plc (Great Britian) (A)		280,000		3,803,128
Anglo Irish Bank Corporation plc (Ireland) (A)		65,000		885,213
CRH public limited company (A)		60,700		1,645,280
				6,333,621
Italy - 1.58%
Assicurazioni Generali SpA (A)		36,700		1,157,536
Saipem S.p.A. (A)		72,000		1,214,212
				2,371,748
Japan - 29.03%
ACOM CO., LTD. (A)		20,000		1,451,790
Bank of Fukuoka, Ltd. (The) (A)		120,000		864,731
Canon Inc. (A)		36,070		1,947,840
CREDIT SAISON CO., LTD. (A)		48,000		2,105,801
DENSO CORPORATION (A)		41,000		1,188,301
Dentsu Inc. (A)*		290		822,623
FANUC LTD (A)		10,000		808,704
Honda Motor Co., Ltd. (A)		21,900		1,238,585
Hoya Corporation (A)		50,800		1,687,143
iShares MSCI Japan Index Fund		300,000		3,657,000
Japan Tobacco Inc. (A)		115		1,813,417
Kabushiki Kaisha Mitsubishi Tokyo Financial Group (A)		250		3,281,505
Mitsubishi Corporation (A)		144,000		2,841,563
Mitsubishi Estate Co., Ltd. (A)		62,000		850,954
Mizuho Financial Group, Inc. (A)		350		2,226,138
Nippon Telegraph and Telephone Corporation (A)		360		1,769,634
Nomura Holdings, Inc. (A)		62,300		966,483
ORIX Corporation (A)		12,300		2,221,292
SMC Corporation (A)		14,300		1,903,475
Sega Sammy Holdings Inc. (A)		49,200		1,941,735
Shinsei Bank, Limited (A)(B)		120,000		755,847
Sumitomo Mitsui Financial Group, Inc. (A)		120		1,131,128
TDK Corporation (A)		20,600		1,468,123
Taisei Corporation (A)		220,000		905,079
Tokyo Electric Power Company, Incorporated (The) (A)		32,000		809,056
Toyota Motor Corporation (A)		61,500		2,817,249
				43,475,196
Mexico - 1.09%
Cemex, S.A. de C.V., ADR		31,305		1,637,251
Netherlands - 1.05%
Royal DSM Heerlen (A)		40,000		1,571,735
Norway - 0.70%
Statoil ASA (A)		42,000		1,041,873
Russia - 1.54%
OAO LUKOIL, ADR		40,000		2,308,000
Singapore - 0.53%
DBS Group Holdings Ltd (A)		85,300		796,489
South Korea - 1.13%
Samsung Electronics Co., Ltd. (A)		3,000		1,692,249
Spain - 4.20%
Enagas, S.A. (A)		150,000		2,695,485
Fadesa Inmobiliaria, S.A. (A)		100,000		3,593,980
				6,289,465
Sweden - 1.24%
Telefonaktiebolaget LM Ericsson, B Shares (A)		510,000		1,862,034
Switzerland - 7.38%
Compagnie Financiere Richemont SA (A)		34,600		1,369,940
Credit Suisse Group, Registered Shares (A)		30,800		1,363,442
Holcim Ltd, Registered Shares (A)		22,400		1,487,392
Nestle S.A., Registered Shares (A)		10,280		3,009,981
Novartis AG, Registered Shares (A)		61,600		3,124,258
Zurich Financial Services, Registered Shares (A)*		4,100		698,432
				11,053,445
United Kingdom - 15.14%
BAE SYSTEMS plc (A)		150,000		908,746
BHP Billiton Plc (A)		164,700		2,660,809
BP p.l.c. (A)		300,000		3,563,556
British American Tobacco p.l.c. (A)		100,000		2,100,567
IG Group Holdings plc (A)(B)*		155,000		472,936
RHM plc (A)(B)*		450,000		2,436,552
Reckitt Benckiser plc (A)		51,500		1,568,644
Royal Bank of Scotland Group plc (The) (A)		75,900		2,153,885
Smiths Group plc (A)		51,500		871,065
tesco plc (A)		392,000		2,139,791
Vodafone Group Plc (A)	1,460,000			3,798,128
				22,674,679
United States - 1.31%
Inco Limited		23,600		1,117,460
Schlumberger Limited		10,000		843,800
				1,961,260
TOTAL COMMON STOCKS - 97.85%			$	146,567,110
(Cost: $110,328,632)

SHORT-TERM SECURITY - 2.28%	Principal Amount in Thousands			Value
Finance Companies
BP Capital Markets p.l.c.,
3.88%, 10-3-05	$	3,411	$	3,410,265
(Cost: $3,410,265)
TOTAL INVESTMENT SECURITIES - 100.13%			$	149,977,375
(Cost: $113,738,897)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.13%)				(196,032	)
NET ASSETS - 100.00%			$	149,781,343

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, 2005, the total value of these securities amounted to $4,844,216 or 3.23% 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, 2005
     (In Thousands, Except for Per Share and Share Amounts)

ASSETS
Investment securities - at value (cost - $113,739) (Notes 1 and 3)		$	149,977
Receivables:
Dividends and interest			512
Fund shares sold			44
Prepaid and other assets			30
Total assets			150,563
LIABILITIES
Payable to Fund shareholders			339
Due to custodian			157
Accrued management fee (Note 2)			122
Accrued shareholder servicing (Note 2)			54
Accrued service fee (Note 2)			25
Accrued distribution fee (Note 2)			11
Accrued accounting services fee (Note 2)			5
Accrued administrative fee (Note 2)			1
Other			68
Total liabilities			782
Total net assets		$	149,781
NET ASSETS
Capital paid in (shares authorized - unlimited)		$	404,671
Accumulated undistributed income (loss):
Accumulated undistributed net investment income			293
Accumulated undistributed net realized loss                on investment transactions	(291,430			)
Net unrealized appreciation in value of investments			36,247
Net assets applicable to outstanding units of capital		$	149,781
Net asset value per share (net assets divided by shares outstanding):
Class A			$26.19
Class B			$24.25
Class C			$24.17
Class Y			$26.19
Advisor Class			$25.75
Class I			$26.51
Capital shares outstanding:
Class A	4,987,641
Class B			396,096
Class C			373,596
Class Y			9,456
Advisor Class			24
Class I			10,981

See Notes to Financial Statements.

Statement of Operations
     IVY INTERNATIONAL FUND
     For the Six Months Ended September 30, 2005
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $201)	$	1,866
Interest and amortization		38
Total income		1,904
Expenses (Note 2):
Investment management fee		724
Shareholder servicing:
Class A		153
Class B		33
Class C		16
Class Y		- -	*
Advisor Class		- -	*
Class I		- -	*
Service fee:
Class A		120
Class B		14
Class C		11
Class Y		- -	*
Distribution fee:
Class A		1
Class B		41
Class C		33
Accounting services fee		27
Custodian fees		25
Audit fees		22
Administrative fee		7
Other		76
Total expenses		1,303
Net investment income		601
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		5,358
Realized net loss on foreign currency transactions		(64	)
Realized net gain on investments		5,294
Unrealized appreciation in value of investments during the period		13,678
Net gain on investments		18,972
Net increase in net assets resulting from operations	$	19,573

*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 September 30,				For the fiscal year ended March 31,
	2005				2005
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)		$	601			$	(639	)
Realized net gain on investments			5,294				14,032
Unrealized appreciation (depreciation)			13,678				(3,413	)
Net increase in net assets resulting                     from operations			19,573				9,980
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)			(18,882	)			(46,593	)
Total increase (decrease)			691				(36,613	)
NET ASSETS
Beginning of period			149,090				185,703
End of period		$	149,781			$	149,090
Undistributed net investment income (loss)		$	293			$	(244	)

(1)See "Financial Highlights" on pages 119 - 124.

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 year ended			For the fiscal period ended			For the fiscal year ended December 31,
	9-30-05				3-31-05			3-31-04			2003			2002			2001			2000
Net asset value,      beginning of period		$	22.86		$	21.34		$	20.64		$	16.35		$	20.69		$	26.20		$	47.09
Income (loss) from      investment operations:
Net investment           income (loss)			0.13			(0.02	)		(0.01	)		(0.02	)		0.06	(1)		0.05			0.19
Net realized and           unrealized gain (loss)           on investments			3.20			1.54			0.71			4.31			(4.40	)		(5.56	)		(12.44	)
Total from investment      operations			3.33			1.52			0.70			4.29			(4.34	)		(5.51	)		(12.25	)
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.04	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.60	)
Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.64	)
Net asset value,      end of period		$	26.19		$	22.86		$	21.34		$	20.64		$	16.35		$	20.69		$	26.20
Total return (2)			14.57	%		7.12	%		3.39	%		26.24	%	- -20.96		%	- -21.03		%	- -17.26		%
Net assets, end of period      (in millions)			$131			$122			$125			$124			$127			$345			$588
Ratio of expenses to      average net assets      including reimbursement			1.65	%(3)		1.61	%		1.69	%(3)		1.81	%		1.89	%		1.60	%		1.66	%
Ratio of net investment      income (loss) to      average net assets      including reimbursement			0.97	%(3)		- -0.15	%		- -0.26	%(3)		- -0.07	%		0.32	%		0.18	%		0.37	%
Ratio of expenses to      average net assets      excluding reimbursement			NA			NA			NA			NA			1.89	%		1.66	%		NA
Ratio of net investment      income to average      net assets excluding      reimbursement			NA			NA			NA			NA			0.32	%		0.12	%		NA
Portfolio turnover rate			27	%		76	%		27	%		136	%		34	%		43	%		91	%

(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 year ended			For the fiscal period ended			For the fiscal year ended December 31,
	9-30-05				3-31-05			3-31-04			2003			2002			2001			2000
Net asset value,      beginning of period		$	21.30		$	20.12		$	19.52		$	15.62		$	20.03		$	25.64		$	46.78
Income (loss) from      investment operations:
Net investment loss			(0.01	) (1)		(0.22	)(1)		(0.07	)		(0.23	)		(0.12	)(1)		(0.21	)		(0.17	)
Net realized and           unrealized gain           (loss) on investments			2.96	(1)		1.40	(1)		0.67			4.13			(4.29	)(1)		(5.40	)	(12.33		)
Total from investment      operations			2.95			1.18			0.60			3.90			(4.41	)		(5.61	)	(12.50		)
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.04	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.60	)
Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.64	)
Net asset value,      end of period		$	24.25		$	21.30		$	20.12		$	19.52		$	15.62		$	20.03		$	25.64
Total return			13.85	%		5.87	%		3.08	%		24.97	%	- -22.00		%	- -21.88		%	- -17.95		%
Net assets, end of period      (in millions)			$10			$17			$49			$55			$68			$137			$281
Ratio of expenses to      average net assets      including reimbursement			2.88	%(2)		2.75	%		2.75	%(2)		2.84	%		2.85	%		2.54	%		2.50	%
Ratio of net investment      loss to average net      assets including      reimbursement			- -0.13	%(2)		- -1.09	%		- -1.35	%(2)		- -1.06	%		- -0.64	%		- -0.76	%		- -0.47	%
Ratio of expenses to      average net assets      excluding reimbursement			NA			NA			NA			NA			2.85	%		2.60	%		NA
Ratio of net investment      loss to average net      assets excluding      reimbursement			NA			NA			NA			NA			- -0.64	%		- -0.82	%		NA
Portfolio turnover rate			27	%		76	%		27	%		136	%		34	%		43	%		91	%

(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 year ended			For the fiscal period ended			For the fiscal year ended December 31,
	9-30-05				3-31-05			3-31-04			2003			2002			2001			2000
Net asset value,      beginning of period		$	21.20		$	20.00		$	19.39		$	15.52		$	19.90		$	25.46		$	46.57
Income (loss) from      investment operations:
Net investment loss			(0.06	)		(0.32	)		(0.07	)		(0.20	)		(0.11	)(1)		(0.21	)		(0.19	)
Net realized and           unrealized gain           (loss) on investments			3.03			1.52			0.68			4.07			(4.27	)(1)		(5.35	)	(12.28		)
Total from investment      operations			2.97			1.20			0.61			3.87			(4.38	)		(5.56	)	(12.47		)
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.04	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.60	)
Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.64	)
Net asset value,      end of period		$	24.17		$	21.20		$	20.00		$	19.39		$	15.52		$	19.90		$	25.46
Total return			14.01	%		6.00	%		3.15	%		24.94	%	- -22.00		%	- -21.84		%	- -17.97		%
Net assets, end of period      (in millions)			$9			$9			$11			$12			$14			$26			$57
Ratio of expenses to      average net assets      including reimbursement			2.68	%(2)		2.64	%		2.67	%(2)		2.80	%		2.83	%		2.54	%		2.49	%
Ratio of net investment      loss to average net      assets including      reimbursement			- -0.04	%(2)		- -1.14	%		- -1.25	%(2)		- -0.94	%		- -0.62	%		- -0.76	%		- -0.46	%
Ratio of expenses to      average net assets      excluding reimbursement			NA			NA			NA			NA			2.83	%		2.60	%		NA
Ratio of net investment      loss to average net      assets excluding      reimbursement			NA			NA			NA			NA			- -0.62	%		- -0.82	%		NA
Portfolio turnover rate			27	%		76	%		27	%		136	%		34	%		43	%		91	%

(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 six months ended			For the fiscal year ended			For the fiscal period ended			For the period from 7-24-2003(1) to
	9-30-05			3-31-05			3-31-04			12-31-03
Net asset value,      beginning of period	$	22.86		$	21.35		$	20.65		$	17.69
Income (loss) from      investment operations:
Net investment           income (loss)		0.13			(0.09	)		(0.02	)		0.02
Net realized and           unrealized gain           on investments		3.20			1.60			0.72			2.94
Total from investment operations		3.33			1.51			0.70			2.96
Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Total distributions		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Net asset value,      end of period	$	26.19		$	22.86		$	21.35		$	20.65
Total return		14.57	%		7.07	%		3.39	%		16.73	%
Net assets, end of period      (in thousands)		$248			$229			$140			$135
Ratio of expenses to      average net assets		1.62	%(2)		1.66	%		1.76	%(2)		0.59	%(2)
Ratio of net investment      income (loss) to      average net assets		0.96	%(2)		- -0.33	%		- -0.32	%(2)		0.24	%(2)
Portfolio turnover rate		27	%		76	%		27	%		136	%(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 INTERNATIONAL FUND
     Advisor Class Shares ⁽¹⁾
     For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended			For the fiscal period ended			For the fiscal year ended December 31,								For the period from 8-31-00 (2) to
	9-30-05				3-31-05			3-31-04			2003		2002 (3)				2001		12-31-00
Net asset value,      beginning of period		$	22.84		$	21.66		$	21.00		$	16.85		$	20.67		$	26.25		$	40.05
Income (loss) from      investment operations:
Net investment           income (loss)			(0.25	)		(0.38	)		(0.08	)		(1.00	)		(0.24	)		0.01			0.02
Net realized and           unrealized gain           (loss) on investments			3.16			1.56			0.74			5.15			(3.58	)		(5.59	)		(5.18	)
Total from investment      operations			2.91			1.18			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	)		(0.00	)		(0.04	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.60	)
Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.64	)
Net asset value,      end of period		$	25.75		$	22.84		$	21.66		$	21.00		$	16.85		$	20.67		$	26.25
Total return			12.74	%		5.45	%		3.14	%		25.00	%	- -18.71		%	- -21.26		%	- -12.09		%
Net assets, end of period      (in thousands)			$1			$1			$1			$1			$2			$5			$4
Ratio of expenses to      average net assets      including reimbursement			4.65	%(4)		3.11	%		2.35	%(4)		2.72	%		3.46	%		1.69	%		2.10	%(4)
Ratio of net investment      income (loss) to      average net assets      including reimbursement			- -2.15	%(4)		- -1.75	%		- -1.58	%(4)		- -0.98	%		- -1.24	%		0.09	%		- -0.08	%(4)
Ratio of expenses to      average net assets      excluding reimbursement			NA			NA			NA			NA			3.46	%		1.75	%		NA
Ratio of net investment      income (loss) to      average net assets      excluding reimbursement			NA			NA			NA			NA			- -1.24	%		0.03	%		NA
Portfolio turnover rate			27	%		76	%		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 year ended			For the fiscal period ended			For the fiscal year ended December 31,
	9-30-05				3-31-05			3-31-04			2003			2002			2001			2000
Net asset value,      beginning of period		$	23.13		$	21.58		$	20.86		$	16.48		$	20.85		$	26.35		$	47.09
Income (loss) from      investment operations:
Net investment           income (loss)			0.37			0.29			(0.00	)		(0.08	)		0.14	(2)		0.15			0.64
Net realized and           unrealized gain (loss)           on investments			3.01			1.26			0.72			4.46			(4.51	)(2)		(5.65	)	(12.74		)
Total from investment      operations			3.38			1.55			0.72			4.38			(4.37	)		(5.50	)	(12.10		)
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.04	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.60	)
Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(8.64	)
Net asset value,      end of period		$	26.51		$	23.13		$	21.58		$	20.86		$	16.48		$	20.85		$	26.35
Total return			14.61	%		7.18	%		3.45	%		26.58	%	- -20.95		%	- -20.87		%	- -16.92		%
Net assets, end of period      (in thousands)			$291			$345			$669			$684	$1,304			$17,062			$33,907
Ratio of expenses to      average net assets      including reimbursement			1.41	%(3)		1.47	%		1.38	%(3)		1.66	%		1.51	%		1.24	%		1.24	%
Ratio of net investment      income to average      net assets including      reimbursement			1.26	%(3)		0.20	%		0.04	%(3)		0.06	%		0.70	%		0.54	%		0.79	%
Ratio of expenses to      average net assets      excluding reimbursement			NA			NA			NA			NA			1.51	%		1.30	%		NA
Ratio of net investment      income to average      net assets excluding      reimbursement			NA			NA			NA			NA			0.70	%		0.48	%		NA
Portfolio turnover rate			27	%		76	%		27	%		136	%		34	%		43	%		91	%

(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, 2005, Ivy International Balanced Fund had net assets totaling $127,708,174 invested in a diversified portfolio of:

61.47%	Common Stocks and Right
30.18%	Other Government Securities
8.35%	Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005, your Fund was invested by geographic region and by industry, respectively, as follows:

Europe	$	56.11
Pacific Basin	$	25.78
Cash and Cash Equivalents	$	8.35
Canada	$	5.73
Caribbean	$	1.42
Mexico	$	1.07
Middle East	$	0.91
Africa	$	0.63

Other Government Securities	$	30.18
Financial Services Stocks	$	10.88
Utilities Stocks	$	10.76
Cash and Cash Equivalents	$	8.35
Technology Stocks	$	5.11
Shelter Stocks	$	4.32
Energy Stocks	$	4.25
Miscellaneous Stocks	$	3.34
Health Care Stocks	$	3.21
Consumer Nondurables Stocks	$	3.08
Capital Goods Stocks	$	3.03
Retail Stocks	$	2.81
Raw Materials Stocks	$	2.80
Multi-Industry Stocks	$	2.69
Consumer Services Stocks	$	2.68
Consumer Durables Stocks	$	2.51

The Investments of Ivy International Balanced Fund
September 30, 2005
COMMON STOCKS AND RIGHT		Shares		Value
Australia - 1.50%
National Australia Bank Limited (A)		54,242	$	1,367,112
Qantas Airways Limited (A)		157,000		403,484
Qantas Airways Limited (A)(B)		54,528		140,135
				1,910,731
Belgium - 0.39%
Agfa-Gevaert N.V. (A)*		20,620		496,944
Bermuda - 1.42%
ACE Limited		22,750		1,070,843
XL Capital Ltd, Class A		10,870		739,486
				1,810,329
Canada - 1.42%
Barrick Gold Corporation (A)		35,400		1,026,043
Domtar Inc. (A)		122,610		787,733
				1,813,776
China - 0.90%
China Telecom Corporation Limited (A)	2,700,000			1,018,060
China Telecom Corporation Limited (A)(B)		360,000		135,741
				1,153,801
Denmark - 1.77%
Vestas Wind Systems A/S (A)*		93,333		2,254,973
Finland - 2.15%
Stora Enso Oyj, Class R (A)		103,390		1,421,704
UPM-Kymmene Corporation (A)		66,310		1,327,082
				2,748,786
France - 3.35%
AXA (A)		28,400		779,685
France Telecom (A)		21,604		620,116
SUEZ (A)		22,400		647,541
Sanofi-Aventis (A)		13,848		1,144,364
Total S.A. (A)		3,970		1,083,708
				4,275,414
Germany - 3.33%
Bayer Aktiengesellschaft (A)		20,100		738,819
Deutsche Post AG (A)		63,460		1,485,913
E.ON AG (A)		10,660		981,500
Munchener Ruckversicherungs-Gesellschaft Aktiengesellschaft,       Registered Shares (A)		5,360		612,058
Volkswagen Aktiengesellschaft (A)		9,430		430,271
				4,248,561
Hong Kong - 2.37%
Bank of East Asia, Limited (The) (A)		136,200		398,554
Cheung Kong (Holdings) Limited (A)		108,000		1,219,584
Hutchison Whampoa Limited, Ordinary Shares (A)		136,000		1,406,915
				3,025,053
Israel - 0.91%
Check Point Software Technologies Ltd.*		47,610		1,155,971
Italy - 0.89%
Eni S.p.A. (A)		38,100		1,131,624
Japan - 5.40%
Hitachi, Ltd. (A)		150,000		950,095
KDDI CORPORATION (A)		196		1,105,052
Konica Minolta Holdings, Inc. (A)		55,500		504,568
Nintendo Co., Ltd. (A)		5,000		583,183
Nippon Telegraph and Telephone Corporation (A)		194		953,636
Nomura Holdings, Inc. (A)		36,900		572,443
Sony Corporation (A)		27,500		903,625
Takeda Chemical Industries, Ltd. (A)		22,300		1,328,001
				6,900,603
Mexico - 1.07%
Telefonos de Mexico, S.A. de C.V., ADR		64,280		1,367,236
Netherlands - 3.71%
Akzo Nobel N.V. (A)		21,570		940,377
ING Groep N.V., Certicaaten Van Aandelen (A)		46,290		1,378,774
Koninklijke Philips Electronics N.V., Ordinary Shares (A)		48,410		1,286,555
Reed Elsevier NV (A)		82,170		1,133,861
				4,739,567
Norway - 1.71%
Norske Skogindustrier ASA (A)		43,870		647,934
Norske Skogindustrier ASA, Rights (A)*		43,870		77,015
Telenor ASA (A)		160,750		1,435,553
Telenor ASA (A)(B)		2,550		22,772
				2,183,274
Portugal - 0.55%
Portugal Telecom, SGPS, S.A., Ordinary Shares (A)		76,340		697,381
Singapore - 1.10%
DBS Group Holdings Ltd (A)		33,000		308,138
Venture Corporation Limited (A)		128,000		1,096,862
				1,405,000
South Africa - 0.63%
Sappi Limited (A)		69,000		810,725
South Korea - 3.86%
KT Corporation, ADR		48,730		1,096,425
Kookmin Bank, ADR		16,440		974,070
POSCO, ADR		9,340		528,270
SK Telecom Co., Ltd., ADR		41,000		895,440
Samsung Electronics Co., Ltd. (A)		530		298,964
Samsung Electronics Co., Ltd., GDR (B)		4,010		1,140,845
				4,934,014
Spain - 2.42%
Gamesa Corporacion Tecnologica, S.A. (A)		53,110		815,852
Iberdrola, S.A. (A)		17,743		495,855
Repsol YPF, S.A. (A)		39,250		1,271,932
Telefonica, S.A., ADR		10,025		494,433
Telefonica, S.A., Brazilian Depositary Receipts (A)		570		9,327
				3,087,399
Sweden - 2.23%
ForeningsSparbanken AB (A)		24,300		587,812
Nordea Bank AB, Finnish Depositary Receipts (A)		113,190		1,126,530
Securitas AB, Class B (A)		73,500		1,137,888
				2,852,230
Switzerland - 2.31%
Lonza Group Ltd, Registered Shares (A)		5,800		342,336
Nestle S.A., Registered Shares (A)		4,100		1,200,479
Swiss Reinsurance Company, Registered Shares (A)		11,950		784,727
UBS AG (A)		7,400		628,863
				2,956,405
Taiwan - 2.27%
Chunghwa Telecom Co., Ltd., ADR		24,700		457,197
Compal Electronics Inc., GDR		53,235		262,683
Compal Electronics Inc., GDR (B)		128,409		633,621
Lite-On Technology Corporation, GDR		75,868		847,024
Mega Financial Holding Company (A)*	1,107,000			700,506
				2,901,031
United Kingdom - 13.81%
AMVESCAP PLC (A)		26,400		171,347
BAE SYSTEMS plc (A)		179,510		1,087,527
BP p.l.c. (A)		82,800		983,541
Boots Group PLC (A)		64,600		693,295
British Sky Broadcasting Group plc (A)		134,780		1,332,373
Cadbury Schweppes plc (A)		72,900		735,442
Compass Group PLC (A)		608,600		2,213,862
GlaxoSmithKline plc (A)		42,970		1,092,837
Pearson plc (A)		82,670		960,855
Rentokil Initial plc (A)		376,520		1,097,373
Rolls-Royce plc (A)*		120,600		794,443
Royal Bank of Scotland Group plc (The) (A)		52,590		1,492,396
Royal Dutch Shell plc, Class B (A)		27,641		954,533
Shire Pharmaceuticals Group plc (A)		44,000		535,071
Smiths Group plc (A)		39,780		672,834
Unilever PLC (A)		95,630		998,483
Vodafone Group Plc (A)		437,630		1,138,476
Wm MORRISON SUPERMARKETS PLC (A)		216,740		679,475
				17,634,163
TOTAL COMMON STOCKS AND RIGHT- 61.47%			$	78,494,991
(Cost: $64,844,195)

OTHER GOVERNMENT SECURITIES
Australia - 1.08%
New South Wales Treasury Corporation,
6.5%, 5-1-06 (B)(C)	AUD550				421,754
Queensland Treasury Corporation:
6.0%, 8-14-13 (C)			1,200		944,074
6.0%, 10-14-15 (C)			10		7,905
					1,373,733
Austria - 0.75%
Republic of Austria:
5.5%, 10-20-07 (C)	EUR360				459,158
4.0%, 7-15-09 (C)			70		88,358
5.0%, 7-15-12 (C)			300		406,746
					954,262
Belgium - 0.64%
Belgium Government Bond:
4.75%, 9-28-06 (C)		EUR100			123,118
7.5%, 7-29-08 (C)			405		552,504
5.0%, 9-28-12 (C)			100		135,867
					811,489
Canada - 4.31%
Canadian Government Bond:
3.0%, 6-1-06 (C)	CAD950				816,206
3.25%, 12-1-06 (C)			3,550		3,053,024
4.5%, 9-1-07 (C)			1,040		913,880
6.0%, 6-1-11 (C)			748		718,388
					5,501,498
Denmark - 0.20%
Denmark Government Bond,
5.0%, 11-15-13 (C)	DKK1,400				258,556
Finland - 0.75%
Finland Government Bond:
3.0%, 7-  4-08 (C)	EUR400				487,691
5.0%, 4-25-09 (C)			60		78,008
5.75%, 2-23-11 (C)			280		386,377
					952,076
France - 1.33%
France Government Bond OAT:
4.0%, 10-25-09 (C)			712		901,457
4.0%, 4-25-13 (C)			620		796,787
					1,698,244
Germany - 0.71%
Deutsche Bundesrepublik:
6.0%, 7-  4-07 (C)			531		677,578
5.0%, 7-  4-11 (C)			170		228,118
					905,696
Ireland - 0.58%
Ireland Government Bond,
5.0%, 4-18-13 (C)			540		737,723
Italy - 0.95%
Italy Buoni Poliennali Del Tesoro:
7.75%, 11-1-06 (C)		EUR479			609,249
5.5%, 11-1-10 (C)			447		605,413
					1,214,662
Netherlands - 0.97%
Netherlands Government Bond,
5.75%, 2-15-07 (C)			990		1,244,840
New Zealand - 1.58%
New Zealand Government Bond:
7.0%, 7-15-09 (C)		NZD1,950			1,396,978
6.0%, 11-15-11 (C)	900				626,684
					2,023,662
Norway - 2.15%
Norway Government Bond,
6.75%, 1-15-07 (C)	NOK17,135				2,750,823
Poland - 2.92%
Poland Government Bond:
8.5%, 11-12-06 (C)		PLN2,410			771,004
8.5%, 5-12-07 (C)			1,100		358,302
6.0%, 5-24-09 (C)			4,275		1,369,367
6.25%, 10-24-15 (C)	3,250				1,115,758
5.75%, 9-23-22 (C)			320		108,484
					3,722,915
Singapore - 2.00%
Singapore Government Bond,
2.625%, 10-1-07 (C)	SGD4,300				2,557,764
South Korea - 3.30%
South Korea Treasury Bond:
4.75%, 3-3-07 (C)	KRW2,300,000				2,212,898
3.75%, 9-10-07 (C)	1,100,000				1,039,327
4.5%, 9-9-08 (C)	1,000,000				956,392
					4,208,617
Spain - 1.40%
Spain Government Bond:
10.15%, 1-31-06 (C)		EUR294			362,297
4.8%, 10-31-06 (C)	100				123,468
6.0%, 1-31-08 (C)			350		454,263
5.0%, 7-30-12 (C)			630		853,616
					1,793,644
Sweden - 2.07%
Sweden Government Bond:
8.0%, 8-15-07 (C)		SEK6,180			880,853
6.5%, 5-5-08 (C)			1,800		255,978
5.5%, 10-8-12 (C)	3,580				536,963
3.5%, 12-1-15 (C)(D)			6,234		972,421
					2,646,215
Thailand - 2.00%
Thailand Government Bond:
8.5%, 10-14-05 (C)	THB45,700				1,114,146
8.0%, 12-8-06 (C)			41,250		1,051,637
Thailand Treasury Bill:
0.0%, 2-23-06 (C)			12,900		311,147
0.0%, 3-9-06 (C)			3,420		82,372
					2,559,302
United Kingdom - 0.49%
United Kingdom Treasury,
7.5%, 12-7-06 (C)	GBP343				627,574
TOTAL OTHER GOVERNMENT SECURITIES - 30.18%				$	38,543,295
(Cost: $34,595,081)

SHORT-TERM SECURITIES
Banks - 4.16%
Rabobank USA Financial Corp. (Rabobank Nederland),
3.88%, 10-3-05	$5,313			5,311,855
Finance Companies - 0.65%
BP Capital Markets p.l.c.,
3.88%, 10-3-05		830		829,821
Security and Commodity Brokers - 1.25%
UBS Finance Delaware LLC (UBS AG),
3.75%, 10-17-05		1,600		1,597,333
TOTAL SHORT-TERM SECURITIES - 6.06%			$	7,739,009
(Cost: $7,739,009)
TOTAL INVESTMENT SECURITIES - 97.71%			$	124,777,295
(Cost: $107,178,285)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 2.29%				2,930,879
NET ASSETS - 100.00%			$	127,708,174

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, 2005, the total value of these securities amounted to $2,494,868 or 1.95% of net assets.

(C)Principal amounts are denominated in the indicated foreign currency, where applicable (AUD - Australian Dollar, CAD - Canadian Dollar, DKK - Danish Krone, EUR - Euro, GBP - Great Britain Pound, KRW - South Korean Won, NOK - Norwegian Krone, NZD - New Zealand Dollar, PLN - Polish Zloty, SEK - Swedish Krona, SGD - Singapore Dollar, THB - Thailand Baht).

(D)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 INTERNATIONAL BALANCED FUND
     September 30, 2005
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $107,178) (Notes 1 and 3)	$	124,777
Cash denominated in foreign currencies (cost - $436)		435
Receivables:
Investment securities sold		3,044
Dividends and interest		1,150
Fund shares sold		392
Prepaid and other assets		24
Total assets		129,822
LIABILITIES
Payable for investment securities purchased		1,381
Due to custodian		391
Payable to Fund shareholders		159
Accrued management fee (Note 2)		73
Accrued shareholder servicing (Note 2)		36
Accrued service fee (Note 2)		26
Accrued distribution fee (Note 2)		8
Accrued accounting services fee (Note 2)		5
Other		35
Total liabilities		2,114
Total net assets	$	127,708
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	105,078
Accumulated undistributed income:
Accumulated undistributed net investment income		870
Accumulated undistributed net realized gain
on investment transactions		4,177
Net unrealized appreciation in value of investments		17,583
Net assets applicable to outstanding units of capital	$	127,708
Net asset value per share (net assets divided by shares outstanding):
Class A	$15.08
Class B	$15.04
Class C	$15.05
Class Y	$15.07
Capital shares outstanding:
Class A		7,601
Class B		313
Class C		522
Class Y		36

See Notes to Financial Statements.

Statement of Operations
     IVY INTERNATIONAL BALANCED FUND
     For the Six Months Ended September 30, 2005
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $164)	$	1,368
Interest and amortization		860
Total income		2,228
Expenses (Note 2):
Investment management fee		417
Shareholder servicing:
Class A		134
Class B		13
Class C		12
Class Y		1
Service fee:
Class A		124
Class B		5
Class C		8
Class Y		1
Distribution fee:
Class A		11
Class B		15
Class C		24
Custodian fees		39
Registration fees		32
Accounting services fee		32
Audit fees		15
Other		24
Total expenses		907
Net investment income		1,321
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		2,510
Realized net gain on foreign currency transactions		61
Realized net gain on investments		2,571
Unrealized appreciation in value of investments during the period		714
Net gain on investments		3,285
Net increase in net assets resulting from operations	$	4,606

See Notes to Financial Statements.

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

	For the six months ended September 30,				For the fiscal year ended March 31,
	2005				2005
INCREASE IN NET ASSETS
Operations:
Net investment income		$	1,321			$	1,257
Realized net gain on investments			2,571				2,637
Unrealized appreciation			714				7,031
Net increase in net assets                     resulting from operations			4,606				10,925
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A			(743	)			(1,453	)
Class B			(4	)			(11	)
Class C			(15	)			(12	)
Class Y			(4	)			(5	)
Realized gains on investment transactions:
Class A			(-	)			(393	)
Class B			(-	)			(9	)
Class C			(-	)			(9	)
Class Y			(-	)			(2	)
			(766	)			(1,894	)
Capital share transactions (Note 5)			19,160				35,237
Total increase			23,000				44,268
NET ASSETS
Beginning of period			104,708				60,440
End of period		$	127,708			$	104,708
Undistributed net investment income		$	870			$	254

(1)See "Financial Highlights" on pages 137 - 140.

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 year ended				For the fiscal period ended				For the fiscal year ended September 30,
	9-30-05				3-31-05				3-31-04				2003			2002			2001			2000
Net asset value,      beginning of period		$	14.63			$	13.07			$	11.33		$	8.72		$	9.28		$	11.59		$	11.80
Income (loss) from      investment operations:
Net investment income			0.16				0.22				0.09			0.21			0.18			0.18			0.23
Net realized and      unrealized gain (loss)      on investments			0.39				1.69				1.83			2.40		(0.59		)		(1.28	)		0.50
Total from investment      operations			0.55				1.91				1.92			2.61		(0.41		)		(1.10	)		0.73
Less distributions from:
Net investment income			(0.10	)			(0.28	)			(0.18	)		(0.00	)	(0.00		)		(0.11	)		(0.36	)
Capital gains			(0.00	)			(0.07	)			(0.00	)		(0.00	)	(0.13		)		(1.10	)		(0.58	)
Tax return of capital			(0.00	)			(0.00	)			(0.00	)		(0.00	)	(0.02		)		(0.00	)		(0.00	)
Total distributions			(0.10	)			(0.35	)			(0.18	)		(0.00	)	(0.15		)		(1.21	)		(0.94	)
Net asset value,       end of period		$	15.08			$	14.63			$	13.07		$	11.33		$	8.72		$	9.28		$	11.59
Total return (1)			3.77	%			14.81	%			17.05	%		29.93	%	-4.62		%	- -10.57		%		6.26	%
Net assets, end of period      (in millions)		$115				$97				$60			$46			$36			$40			$48
Ratio of expenses to      average net assets      including reimbursement			1.44	%(2)			1.42	%			1.54	%(2)(3)		1.67	%		1.62	%		1.62	%		1.52	%
Ratio of net investment      income to average      net assets including      reimbursement			2.32	%(2)			1.71	%			1.43	%(2)(3)		2.06	%		1.84	%		1.60	%		1.92	%
Ratio of expenses to      average net assets      excluding reimbursement			NA				NA				1.60	%(2)(3)		1.71	%		1.72	%		1.73	%		1.65	%
Ratio of net investment      income to average      net assets excluding      reimbursement			NA				NA				1.37	%(2)(3)		2.02	%		1.74	%		1.49	%		1.79	%
Portfolio turnover rate			8	%			16	%			15	%		39	%		48	%		36	%		44	%

(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. Actual expenses that applied to Class A shareholders were lower than shown above.

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 six months ended				For the fiscal year ended			For the period from 12-8-03(1) to
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	14.59		$	13.04		$	12.34
Income from investment operations:
Net investment income			0.05			0.03	(2)		0.19
Net realized and unrealized           gain on investments			0.42			1.70	(2)		0.69
Total from investment operations			0.47			1.73			0.88
Less distributions from:
Net investment income			(0.02	)		(0.11	)		(0.18	)
Capital gains			(0.00	)		(0.07	)		(0.00	)
Total distributions			(0.02	)		(0.18	)		(0.18	)
Net asset value, end of period		$	15.04		$	14.59		$	13.04
Total return			3.18	%		13.37	%		7.18	%
Net assets, end of period      (in thousands)		$	4,708		$	3,049			$225
Ratio of expenses to average      net assets			2.61	%(3)		2.64	%		3.01	%(3)
Ratio of net investment income      to average net assets			1.03	%(3)		0.20	%		1.09	%(3)
Portfolio turnover rate			8	%		16	%		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 six months ended				For the fiscal year ended			For the period from 12-8-03(1) to
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	14.60		$	13.04		$	12.34
Income from investment operations:
Net investment income			0.05			0.07	(2)		0.19
Net realized and unrealized           gain on investments			0.43			1.69	(2)		0.69
Total from investment operations			0.48			1.76			0.88
Less distributions from:
Net investment income			(0.03	)		(0.13	)		(0.18	)
Capital gains			(0.00	)		(0.07	)		(0.00	)
Total distributions			(0.03	)		(0.20	)		(0.18	)
Net asset value, end of period		$	15.05		$	14.60		$	13.04
Total return			3.31	%		13.58	%		7.18	%
Net assets, end of period      (in thousands)		$	7,852		$	3,968			$307
Ratio of expenses to average      net assets			2.33	%(3)		2.44	%		2.86	%(3)
Ratio of net investment income to      average net assets			1.24	%(3)		0.44	%		1.13	%(3)
Portfolio turnover rate			8	%		16	%		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 six months ended				For the fiscal year ended			For the period from 12-8-03(1) to
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	14.63		$	13.07		$	12.34
Income from investment operations:
Net investment income			0.16	(2)		0.24	(2)		0.21
Net realized and unrealized           gain on investments			0.38	(2)		1.67	(2)		0.70
Total from investment operations			0.54			1.91			0.91
Less distributions from:
Net investment income			(0.10	)		(0.28	)		(0.18	)
Capital gains			(0.00	)		(0.07	)		(0.00	)
Total distributions			(0.10	)		(0.35	)		(0.18	)
Net asset value, end of period		$	15.07		$	14.63		$	13.07
Total return			3.72	%		14.84	%		7.47	%
Net assets, end of period      (in thousands)			$546			$397			$185
Ratio of expenses to average      net assets			1.43	%(3)		1.40	%		1.79	%(3)
Ratio of net investment income to      average net assets			2.28	%(3)		1.72	%		2.00	%(3)
Portfolio turnover rate			8	%		16	%		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.

SHAREHOLDER SUMMARY OF IVY INTERNATIONAL VALUE FUND

Portfolio Highlights

On September 30, 2005, Ivy International Value Fund had net assets totaling $56,715,138 invested in a diversified portfolio of:

90.68%	Common Stocks
9.32%	Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005, your Fund was invested by geographic region and by industry, respectively, as follows:

Europe	$	55.01
Pacific Basin	$	31.30
Cash and Cash Equivalents	$	9.32
United States	$	2.17
Canada	$	1.43
South America	$	0.77

Financial Services Stocks	$	25.60
Capital Goods Stocks	$	10.70
Energy Stocks	$	10.09
Cash and Cash Equivalents	$	9.32
Utilities Stocks	$	8.19
Shelter Stocks	$	7.90
Consumer Goods Stocks	$	7.13
Multi-Industry Stocks	$	6.69
Raw Materials Stocks	$	4.84
Business Equipment and Services Stocks	$	3.07
Consumer Services Stocks	$	2.86
Technology Stocks	$	2.46
Health Care Stocks	$	1.15

The Investments of Ivy International Value Fund
September 30, 2005
COMMON STOCKS		Shares		Value
Australia - 0.50%
Westpac Banking Corporation (A)		17,800	$	286,417
Austria - 3.74%
OMV Aktiengesellschaft (A)		25,000		1,484,770
Raiffeisen International Bank-Holding AG (A)*		9,500		634,325
				2,119,095
Belgium - 1.93%
Fortis (A)		30,000		867,243
KBC Group NV (A)		2,800		226,841
				1,094,084
Brazil - 0.77%
Companhia Vale do Rio Doce, ADR		10,000		438,600
Canada - 1.43%
EnCana Corporation (A)		13,900		811,142
Finland - 2.29%
Neste Oil Corporation (A)(B)*		35,000		1,297,018
France - 6.20%
ALSTOM (A)*		2,500		118,697
Nexity (A)		10,000		504,840
Peugeot S.A. (A)		10,000		679,130
Sanofi-Aventis (A)		7,872		650,522
Technip-Coflexip (A)		16,000		946,984
Unibail Holding (A)		2,000		290,403
Vivendi Universal (A)		10,000		326,463
				3,517,039
Germany - 7.57%
Bayerische Hypo- und Vereinsbank AG (A)*		28,500		801,614
Commerzbank Aktiengesellschaft (A)		38,000		1,040,499
Continental Aktiengesellschaft (A)		8,000		656,580
elexis AG (A)*		30,000		768,078
Hypo Real Estate Holding AG (A)		10,000		507,244
IVG Immobilien AG (A)(B)*		25,000		516,559
				4,290,574
Hong Kong - 1.01%
Beijing Capital Land Limited, Class H (A)	2,000,000			573,646
Ireland - 1.11%
Bank of Ireland (A)		40,000		629,848
Italy - 2.83%
BUZZI UNICEM SpA (A)		30,000		471,665
Banca Popolare di Milano Scarl (A)*		50,000		512,353
Beni Stabili SpA (A)		300,000		316,246
Fondiaria-SAI S.p.A. (A)		10,000		303,505
				1,603,769
Japan - 28.16%
Asatsu-DK Inc. (A)		12,000		374,224
Bank of Fukuoka, Ltd. (The) (A)		100,000		720,610
Chubu Electric Power Company, Incorporated (A)		20,000		488,041
Electric Power Development Co., Ltd. (A)(B)		30,000		1,001,630
Hokuhoku Financial Group, Inc. (A)		200,000		754,085
Ichiyoshi Securities Co., Ltd. (A)		100,000		1,132,890
iShares MSCI Japan Index Fund		200,000		2,438,000
Kabushiki Kaisha Mitsubishi Tokyo Financial Group (A)		90		1,181,342
Kubota Corporation (A)		100,000		692,420
Mitsubishi Corporation (A)		45,000		887,988
Mitsubishi Estate Co., Ltd. (A)		22,000		301,951
Mitsui Trust Holdings, Inc. (A)		25,000		346,210
Mizuho Financial Group, Inc. (A)		120		763,247
Nikko Exchange Traded Index (A)		8,410		1,017,216
Nippon Telegraph and Telephone Corporation (A)		120		589,878
Nishi-Nippon City Bank, Ltd. (The) (A)		100,000		495,970
Secom Co., Ltd. (A)		10,000		480,994
Sega Sammy Holdings Inc. (A)		20,000		789,323
Sumitomo Mitsui Financial Group, Inc. (A)		100		942,607
Tochigi Bank, Ltd. (The) (A)		50,000		355,460
Tokyo Electric Power Company, Incorporated (The) (A)		8,500		214,906
				15,968,992
Korea - 1.63%
iShares MSCI South Korea Index Fund		10,000		394,500
Kyeryong Construction Industrial Co. Ltd (A)		20,000		528,588
				923,088
Netherlands - 4.12%
Royal Boskalis Westminster nv, Certicaaten Van Aandelen (A)		8,800		437,913
Royal DSM Heerlen (A)		20,000		785,868
SBM Offshore N.V. (A)		10,000		834,188
Wolters Kluwer nv, Certicaaten Van Aandelen (A)		15,000		279,104
				2,337,073
Norway - 1.53%
Stolt Offshore S.A. (A)*		75,000		867,274
Spain - 7.92%
Altadis, S.A. (A)		10,000		447,985
Enagas, S.A. (A)		70,000		1,257,893
Fadesa Inmobiliaria, S.A. (A)		40,000		1,437,592
Fadesa Inmobiliaria, S.A. (A)(B)		15,000		539,097
Repsol YPF, S.A. (A)		25,000		810,148
				4,492,715
Switzerland - 3.94%
Chocoladefabriken Lindt & Sprungli AG Registered Shares (A)		30		495,983
Credit Suisse Group, Registered Shares (A)		10,700		473,663
Holcim Ltd, Registered Shares (A)		7,750		514,611
Verwaltungs- und Privat-Bank Aktiengesellschaft (A)		3,000		493,665
Zurich Financial Services, Registered Shares (A)*		1,500		255,524
				2,233,446
United Kingdom - 11.83%
BAE SYSTEMS plc (A)		100,000		605,831
BHP Billiton Plc (A)		60,600		979,023
British American Tobacco p.l.c. (A)		40,000		840,227
RHM plc (A)(B)*		150,000		812,184
Royal Bank of Scotland Group plc (The) (A)		27,900		791,744
Royal Dutch Shell plc, Class A (A)		40,000		1,320,758
Vedanta Resources plc (A)(B)		25,200		266,671
Vodafone Group Plc (A)		420,000		1,092,612
				6,709,050
United States - 2.17%
Inco Limited		15,000		710,250
iShares MSCI EAFE Index Fund		9,000		522,810
				1,233,060
TOTAL COMMON STOCKS - 90.68%			$	51,425,930
(Cost: $39,083,638)

SHORT-TERM SECURITIES	Principal Amount in Thousands
Finance Companies - 3.52%
BP Capital Markets p.l.c.,
3.88%, 10-3-05	$	2,000		1,999,569
Security and Commodity Brokers - 5.30%
Greenwich Capital Holdings Inc. (Royal Bank       of Scotland PLC (The)),
3.87%, 10-3-05		2,007		2,006,569
UBS Finance Delaware LLC (UBS AG),
3.75%, 10-17-05		1,000		998,333
				3,004,902
TOTAL SHORT-TERM SECURITIES - 8.82%			$	5,004,471
(Cost: $5,004,471)
TOTAL INVESTMENT SECURITIES - 99.50%			$	56,430,401
(Cost: $44,088,109)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.50%				284,737
NET ASSETS - 100.00%			$	56,715,138

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, 2005, the total value of these securities amounted to $4,433,159 or 7.82% 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 VALUE FUND
     September 30, 2005
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $44,088) (Notes 1 and 3)	$	56,430
Cash denominated in foreign currencies (cost - $175)		175
Receivables:
Investment securities sold		512
Fund shares sold		182
Dividends and interest		147
Prepaid and other assets		29
Total assets		57,475
LIABILITIES
Payable for investment securities purchased		502
Payable to Fund shareholders		91
Due to custodian		50
Accrued management fee (Note 2)		44
Accrued shareholder servicing (Note 2)		20
Accrued distribution fee (Note 2)		14
Accrued service fee (Note 2)		11
Accrued accounting services fee (Note 2)		3
Accrued administrative fee (Note 2)		1
Other		24
Total liabilities		760
Total net assets	$	56,715
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	53,431
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		74
Accumulated undistributed net realized loss                  on investment transactions		(9,133	)
Net unrealized appreciation in value of investments		12,343
Net assets applicable to outstanding units of capital	$	56,715
Net asset value per share (net assets divided by shares outstanding):
Class A		$13.45
Class B		$12.59
Class C		$12.58
Class Y		$13.50
Advisor Class		$13.36
Capital shares outstanding:
Class A		2,397
Class B		1,249
Class C		651
Class Y		40
Advisor Class		1

See Notes to Financial Statements.

Statement of Operations
     IVY INTERNATIONAL VALUE FUND
     For the Six Months Ended September 30, 2005
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $58)	$	588
Interest and amortization		72
Total income		660
Expenses (Note 2):
Investment management fee		240
Distribution fee:
Class A		3
Class B		63
Class C		27
Shareholder servicing:
Class A		35
Class B		26
Class C		12
Class Y		- -	*
Advisor Class		- -	*
Service fee:
Class A		27
Class B		21
Class C		9
Class Y		1
Registration fees		31
Audit fees		20
Accounting services fee		15
Custodian fees		13
Administrative fee		3
Other		16
Total expenses		562
Net investment income		98
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		2,305
Realized net loss on foreign currency transactions		(17	)
Realized net gain on investments		2,288
Unrealized appreciation in value of investments during the period		5,056
Net gain on investments		7,344
Net increase in net assets resulting from operations	$	7,442

*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				For the fiscal year ended
	September 30, 2005				March 31, 2005
INCREASE IN NET ASSETS
Operations:
Net investment income (loss)		$	98			$	(152	)
Realized net gain on investments			2,288				4,881
Unrealized appreciation			5,056				291
Net increase in net assets                     resulting from operations			7,442				5,020
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)
Advisor Class			(-	)			(-	)
Realized gains on investment transactions:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)
Advisor Class			(-	)			(-	)
			(-	)			(-	)
Capital share transactions (Note 5)			5,129				(2,781	)
Total increase			12,571				2,239
NET ASSETS
Beginning of period			44,144				41,905
End of period		$	56,715			$	44,144
Undistributed net investment income (loss)		$	74			$	(7	)

(1)See "Financial Highlights" on pages 149 - 153.

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 year ended			For the fiscal period ended			For the fiscal year ended December 31,
	9-30-05				3-31-05			3-31-04			2003			2002			2001			2000
Net asset value,      beginning of period		$	11.61		$	10.14		$	9.73		$	7.65		$	9.10		$	11.01		$	11.99
Income (loss) from      investment operations:
Net investment           income (loss)			(0.01	)		(0.02	)		(0.01	)	(0.02		)		0.08	(1)		0.07			0.14
Net realized and           unrealized gain (loss)           on investments			1.85			1.49			0.42			2.10		(1.53		) (2)		(1.96	)(2)		(1.01	)
Total from investment      operations			1.84			1.47			0.41			2.08		(1.45		)		(1.89	)		(0.87	)
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)		(0.02	)		(0.04	)
Capital gains			(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)		(0.00	)		(0.07	)
Total distributions			(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)		(0.02	)		(0.11	)
Net asset value,      end of period		$	13.45		$	11.61		$	10.14		$	9.73		$	7.65		$	9.10		$	11.01
Total return (3)			15.85	%		14.50	%		4.21	%	27.19		%	- -15.93		%(2)	- -17.17		%(2)		- -7.25	%
Net assets, end of period      (in millions)			$32			$17			$10			$9			$8			$13			$24
Ratio of expenses to      average net assets      including reimbursement			1.94	%(4)		1.99	%		2.16	%(4)		2.28	%		1.77	%		1.77	%		1.74	%
Ratio of net investment      income (loss) to      average net assets      including reimbursement			0.69	%(4)		0.09	%		- -0.41	%(4)	- -0.19		%		0.91	%		0.58	%		0.96	%
Ratio of expenses to      average net assets      excluding reimbursement			NA			NA			NA			NA			2.32	%		2.15	%		1.92	%
Ratio of net investment      income to average      net assets excluding      reimbursement			NA			NA			NA			NA			0.36	%		0.20	%		0.78	%
Portfolio turnover rate			43	%		106	%		23	%		148	%		48	%		39	%		36	%

(1)Based on average shares outstanding.
(2)Includes redemption fees added to capital.
(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 INTERNATIONAL VALUE FUND
     Class B Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended				For the fiscal period ended				For the fiscal year ended December 31,
	9-30-05				3-31-05				3-31-04				2003			2002			2001			2000
Net asset value,      beginning of period		$	10.91			$	9.60			$	9.24		$	7.32		$	8.97		$	10.94		$	11.91
Income (loss) from      investment operations:
Net investment           income (loss)			(0.02	)			(0.08	)		(0.03		)	(0.08		)		0.01	(1)		(0.02	)		0.02
Net realized and           unrealized gain (loss)           on investments			1.70				1.39				0.39			2.00		(1.66		)		(1.93	)		(0.96	)
Total from investment      operations			1.68				1.31				0.36			1.92		(1.65		)		(1.95	)		(0.94	)
Less distributions from:
Net investment income			(0.00	)			(0.00	)		(0.00		)	(0.00		)	(0.00		)		(0.02	)		(0.01	)
Capital gains			(0.00	)			(0.00	)		(0.00		)	(0.00		)	(0.00		)		(0.00	)		(0.02	)
Total distributions			(0.00	)			(0.00	)		(0.00		)	(0.00		)	(0.00		)		(0.02	)		(0.03	)
Net asset value,      end of period		$	12.59			$	10.91			$	9.60		$	9.24		$	7.32		$	8.97		$	10.94
Total return			15.40	%			13.65	%			3.90	%	26.23		%	- -18.39		%	- -17.84		%		- -7.94	%
Net assets, end of period      (in millions)			$16				$20				$24			$25			$28			$46			$76
Ratio of expenses to      average net assets      including reimbursement			2.73	%(2)			2.76	%			2.91	%(2)		2.95	%		2.50	%		2.50	%		2.51	%
Ratio of net investment      income (loss) to average      net assets including      reimbursement			0.18	%(2)			- -0.58	%		- -1.20		%(2)	- -0.82		%		0.18	%		- -0.15	%		0.20	%
Ratio of expenses to      average net assets      excluding reimbursement			NA				NA				NA			NA			3.05	%		2.88	%		2.69	%
Ratio of net investment      income (loss) to average      net assets excluding      reimbursement			NA				NA				NA			NA		- -0.37		%		- -0.53	%		0.02	%
Portfolio turnover rate			43	%			106	%			23	%		148	%		48	%		39	%		36	%

(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 year ended				For the fiscal period ended				For the fiscal year ended December 31,
	9-30-05				3-31-05				3-31-04				2003			2002			2001			2000
Net asset value,      beginning of period		$	10.90			$	9.59			$	9.23		$	7.32		$	8.97		$	10.94		$	11.92
Income (loss) from      investment operations:
Net investment           income (loss)			0.00				(0.07	)		(0.03		)	(0.08		)		0.01	(1)		(0.02	)		0.02
Net realized and           unrealized gain (loss)           on investments			1.68				1.38				0.39			1.99		(1.66		)		(1.93	)		(0.97	)
Total from investment      operations			1.68				1.31				0.36			1.91		(1.65		)		(1.95	)		(0.95	)
Less distributions from:
Net investment income			(0.00	)			(0.00	)		(0.00		)	(0.00		)	(0.00		)		(0.02	)		(0.01	)
Capital gains			(0.00	)			(0.00	)		(0.00		)	(0.00		)	(0.00		)		(0.00	)		(0.02	)
Total distributions			(0.00	)			(0.00	)		(0.00		)	(0.00		)	(0.00		)		(0.02	)		(0.03	)
Net asset value,      end of period		$	12.58			$	10.90			$	9.59		$	9.23		$	7.32		$	8.97		$	10.94
Total return			15.41	%			13.66	%			3.90	%	26.09		%	- -18.39		%	- -17.84		%	- -7.97		%
Net assets, end of period      (in millions)			$8				$7				$8			$8			$9			$16			$30
Ratio of expenses to      average net assets      including reimbursement			2.76	%(2)			2.79	%			3.01	%(2)		3.01	%		2.50	%		2.51	%		2.51	%
Ratio of net investment      income (loss) to      average net assets      including reimbursement			0.03	%(2)			- -0.63	%		- -1.30		%(2)	- -0.82		%		0.18	%		- -0.16	%		0.19	%
Ratio of expenses to      average net assets      excluding reimbursement			NA				NA				NA			NA			3.05	%		2.89	%		2.69	%
Ratio of net investment      income (loss) to average      net assets excluding      reimbursement			NA				NA				NA			NA		- -0.37		%		- -0.54	%		0.01	%
Portfolio turnover rate			43	%			106	%			23	%		148	%		48	%		39	%		36	%

(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 six months ended				For the fiscal year ended			For the fiscal period ended			For the period from 7-24-03(1) to
	9-30-05				3-31-05			3-31-04			12-31-03
Net asset value,      beginning of period		$	11.64		$	10.15		$	9.74		$	8.16
Income (loss) from      investment operations:
Net investment loss			(0.01	)		(0.01	)		(0.01	)	(0.01		)
Net realized and unrealized           gain on investments			1.87			1.50			0.42			1.59
Total from investment operations			1.86			1.49			0.41			1.58
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)	(0.00		)
Capital gains			(0.00	)		(0.00	)		(0.00	)	(0.00		)
Total distributions			(0.00	)		(0.00	)		(0.00	)	(0.00		)
Net asset value, end of period		$	13.50		$	11.64		$	10.15		$	9.74
Total return		15.98		%	14.68		%		4.21	%	19.36		%
Net assets, end of period      (in thousands)			$541			$294			$145		$125
Ratio of expenses to      average net assets			1.82	%(2)		1.82	%		2.08	%(2)	1.47		%(2)
Ratio of net investment income      (loss) to average net assets			0.73	%(2)		0.29	%	- -0.31		%(2)	- -0.38		%(2)
Portfolio turnover rate			43	%		106	%		23	%		148	%(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 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 year ended				For the fiscal period ended				For the fiscal year ended December 31,
	9-30-05				3-31-05				3-31-04				2003			2002			2001			2000
Net asset value,      beginning of period		$	11.52			$	10.04			$	9.63		$	7.54		$	9.14		$	11.03		$	11.99
Income (loss) from      investment operations:
Net investment           income (loss)			0.08	(2)			0.03	(2)			(0.00	)		0.67			0.10	(2)		0.11			0.50
Net realized and           unrealized gain (loss)           on investments			1.76	(2)			1.45	(2)			0.41			1.42		(1.70		)(2)		(1.98	)		(1.33	)
Total from investment      operations			1.84				1.48				0.41			2.09		(1.60		)		(1.87	)		(0.83	)
Less distributions from:
Net investment income			(0.00	)			(0.00	)			(0.00	)	(0.00		)	(0.00		)		(0.02	)		(0.05	)
Capital gains			(0.00	)			(0.00	)			(0.00	)	(0.00		)	(0.00		)		(0.00	)		(0.08	)
Total distributions			(0.00	)			(0.00	)			(0.00	)	(0.00		)	(0.00		)		(0.02	)		(0.13	)
Net asset value,      end of period		$	13.36			$	11.52			$	10.04		$	9.63		$	7.54		$	9.14		$	11.03
Total return			15.97	%			14.74	%			4.26	%	27.72		%	- -17.51		%	- -17.03		%	- -6.90		%
Net assets, end of period      (in thousands)			$7				$31				$41			$39		$124				$377			$668
Ratio of expenses to      average net assets      including reimbursement			1.88	%(3)			1.91	%			1.62	% (3)		2.59	%		1.50	%		1.47	%		1.35	%
Ratio of net investment      income to average      net assets including      reimbursement			1.31	%(3)			0.29	%			0.11	% (3)		1.43	%		1.18	%		0.89	%		1.36	%
Ratio of expenses to      average net assets      excluding reimbursement			NA				NA				NA			NA			2.05	%		1.85	%		1.53	%
Ratio of net investment      income to average      net assets excluding      reimbursement			NA				NA				NA			NA			0.63	%		0.51	%		1.18	%
Portfolio turnover rate			43	%			106	%			23	%		148	%		48	%		39	%		36	%

(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, 2005, Ivy Mortgage Securities Fund had net assets totaling $259,146,236 invested in a diversified portfolio of:

53.06%	United States Government Bonds
44.64%	Corporate Bonds
2.30%	Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

United States Government Bonds	$	53.06
Corporate Bonds:
Finance Companies	$	44.10
Other	$	0.54
Cash and Cash Equivalents	$	2.30

The Investments of Ivy Mortgage Securities Fund
September 30, 2005
CORPORATE DEBT SECURITIES	Principal Amount in Thousands			Value
Finance Companies - 44.10%
277 Park Avenue Finance Corporation,
7.58%, 5-12-12 (A)	$	175	$	180,443
ABFS Mortgage Loan Trust 2001-2,
6.99%, 12-25-31		1,851		1,877,037
ABFS Mortgage Loan Trust 2002- 4,
7.423%, 12-15-33		1,485		1,504,601
Asset Securitization Corporation (Interest Only):
1.6584%, 10-13-26 (A)		9,305		329,626
2.33%, 8-13-29		7,643		630,266
Associates Manufactured Housing Contract       Pass-Through Certificates,
7.9%, 3-15-27		1,800		1,894,787
Banc of America Alternative Loan Trust 2004-11,
6.0%, 12-25-34		1,745		1,750,781
Banc of America Alternative Loan Trust 2005-6,
6.0%, 7-25-35		1,170		1,174,548
Banc of America Commercial Mortgage Inc.,       Commercial Mortgage Pass-Through Certificates:
Series 2001-PB1,
6.15%, 5-11-35 (A)		2,000		2,062,330
Series 2002-2,
6.2%, 7-11-  43 (A)		1,200		1,221,619
Banc of America Funding 2004-2 Trust,
6.5%, 7-20-32		1,271		1,309,763
Banc of America Funding Corporation,
5.01850%, 9-20-34		1,607		1,591,524
Banc of America Mortgage Trust 2004-2:
5.0%, 3-25-19		338		331,504
5.0%, 3-25-19		263		255,986
Banc of America Mortgage Trust 2004-3:
4.875%, 4-25-19		456		444,560
4.875%, 4-25-19		244		236,035
Banc of America Structured Securities Trust 2002-X1 F,
6.274%, 10-11-33 (A)		1,750		1,839,991
Banco Hipotecario Nacional:
7.916%, 7-25-09 (A)		23		582
2.57%, 3-25-11 (A)		10		250
7.54%, 5-31-17 (A)		124		6,193
Bank of America Mortgage Securities, Inc.,
5.75%, 8-25-34		1,488		1,487,763
BankAmerica Manufactured Housing Contract Trust:
7.8%, 10-10-26		2,000		2,078,638
7.015%, 1-10-28		1,448		1,488,803
Bear Stearns Commercial Mortgage Securities       Trust 2005-PWR9,
4.943%, 9-11- 42		1,850		1,830,761
BlackRock Capital Finance,
7.75%, 9-25-26 (A)		899		911,272
C-Bass Mortgage Loan Asset-Backed Certificates:
Series 2005-CB1,
4.974%, 1-25-35		2,800		2,744,987
Series 2005-CB3,
5.109%, 12-25-34		1,254		1,224,950
Series 2005-CB6,
4.27063%, 7-25-35		590		590,000
CHL Mortgage Pass-Through Trust 2003-28,
4.15%, 8-25-33		1,500		1,409,191
Centex Home Equity Loan Trust 2005-C,
5.048%, 6-25-35		2,301		2,261,421
Charlie Mac Trust 2004-2,
5.0%, 10-25-34		2,743		2,668,504
Chase Mortgage Finance Trust:
Series 2003-S2,
5.0%, 3-25-18		1,293		1,290,255
Series 2003-S11,
5.5%, 10-25-33		1,077		1,066,968
Citicorp Mortgage Securities, Inc.,
6.27124%, 9-25-14		370		369,409
Collateralized Mortgage Obligation Trust,
5.0%, 7-1-18		45		45,378
Conseco Finance Securitizations Corp.,
6.981%, 6-15-32		1,200		1,221,563
CountryPlace Manufactured Housing Contract Trust 2005-1:
4.42%, 12-15-35 (A)		1,050		1,035,796
4.8%, 12-15-35 (A)		1,275		1,248,624
Countrywide Home Loans, Inc. Asset-Backed       Certificates, Series 2005-10,
4.915%, 2-25-36		5,000		4,912,791
Credit Suisse First Boston Mortgage Securities Corp.,
6.0%, 11-25-18		869		878,851
FFCA Secured Lending Corporation:
4.88938%, 2-18-22 (A)		1,500		1,400,421
5.13938%, 2-18-22 (A)		1,000		925,397
First Franklin Mortgage Loan Trust 2004-FFB,
5.7341%, 6-25-24		2,175		2,190,790
GMAC Commercial Mortgage Securities,
5.94%, 7-1-13 (A)		307		307,213
GRMT Fairbanks Trust,
5.89625%, 6-20-32 (A)		798		805,583
Global Mortgage Securitization 2005-A Ltd. and       Global Mortgage Securitization 2005-A LLC,
5.25%, 4-25-32		881		854,193
Global Mortgage Securitization Ltd. and Global       Mortgage Securitization, LLC:
5.25%, 11-25-32 (A)		1,230		1,203,263
5.25%, 11-25-32 (A)		573		563,441
Green Tree Financial Corporation:
7.65%, 4-15-19		1,089		1,132,440
8.3%, 11-15-19		272		283,965
9.1%, 4-15-25		1,075		1,344,302
Hilton Hotel Pool Trust:
4.21625%, 10-3-15 (A)		500		502,870
7.653%, 10-3-15 (A)		1,345		1,440,877
Home Equity Loan Trust 2003-HS2,
5.09%, 7-25-33		1,000		990,718
J.P. Morgan Chase Commercial Mortgage Securities Corp.,
6.2207%, 10-12-37 (A)		2,300		2,422,731
J.P. Morgan Mortgage Trust 2004-A3,
4.32075%, 7-25-34		1,785		1,743,299
J.P. Morgan Mortgage Trust 2005-S2,
5.66485%, 9-25-35		2,320		2,315,921
LB Commercial Mortgage Trust,
6.0%, 10-15-35 (A)		1,780		1,812,285
Lehman ABS Manufactured Housing Contract Trust 2001-B,
5.873%, 5-15-22		1,109		1,126,131
MASTR Asset Securitization Trust 2003-10,
5.5%, 11-25-33	1,719			1,707,755
MMCA Automobile Trust 2002-1,
5.37%, 1-15-10		790		788,989
Metropolitan Asset Funding, Inc.,
6.98%, 5-20-12 (A)		104		104,130
Mid-State Capital Corporation 2004-1 Trust:
6.005%, 8-15-37		448		463,158
6.497%, 8-15-37		1,630		1,655,651
Mid-State Trust:
7.34%, 7-1-35		1,742		1,834,384
7.4%, 7-1-35		1,644		1,727,019
7.79%, 7-1-35		722		758,645
Money Store Trust 1998-B (The),
3.91813%, 8-15-29		2,493		2,492,699
Multi Security Asset Trust LP, Commercial Mortgage-Backed       Securities Pass-Through Certificates, Series 2005-RR4:
1.0668%, 11-28-35 (Interest Only) (A)	33,476			1,181,214
5.88%, 11-28-35 (A)		680		654,299
5.88%, 11-28-35 (A)		340		335,755
NationsLink Funding Corporation, Commercial Mortgage       Pass-Through Certificates, Series 1998-2,
5.0%, 8-20-30 (A)		1,000		948,326
Nomura Asset Securities Corporation, Commercial Mortgage       Pass-Through Certificates, Series 1998-D6,
6.0%, 3-15-30 (A)		1,650		1,719,607
Oakwood Mortgage Investors, Inc.:
8.1%, 10-15-21 (A)		697		711,681
7.375%, 8-15-27		622		640,006
Origen Manufactured Housing Contract Trust 2004-A:
2.02%, 10-15-13		51		50,931
5.7%, 1-15-35		543		548,112
5.91%, 1-15-35		1,600		1,614,918
Origen Manufactured Housing Contract Trust 2004-B,
4.75%, 8-15-21		400		390,609
Origen Manufactured Housing Contract Trust 2005-A,
4.97%, 10-15-21		935		929,116
Paine Webber Mortgage Acceptance Corporation,
7.655%, 1-2-12 (A)		2,450		2,534,314
Prudential Home Mortgage Securities:
6.98%, 9-28-08 (A)		22		22,198
6.73%, 4-28-24 (A)		7		6,824
8.03304%, 9-28-24 (A)		37		36,634
RALI Series 2003-QS11 Trust,
5.75%, 6-25-33		2,580		2,595,613
RAMP Series 2003-RS11 Trust,
6.092%, 12-25-33		2,000		2,010,457
RAMP Series 2005-RS1 Trust,
5.145%, 1-25-35		1,075		1,056,792
RFMSI Series 2004-S5 Trust:
4.5%, 5-25-19		381		363,645
4.5%, 5-25-19		190		179,635
Salomon Brothers Mortgage Securities VII, Inc., Mortgage       Pass-Through Certificates, Series 1997-HUD1,
7.75%, 12-25-30		2,016		2,106,550
Sequoia Mortgage Funding Company,
6.38%, 8-28-31 (A)		59		59,164
Structured Asset Mortgage Investments, Inc.:
6.75%, 4-30-30		27		27,268
6.75%, 4-30-30		12		12,404
Structured Asset Securities Corporation:
5.63%, 5-25-34		1,100		1,096,405
6.0%, 6-25-34		2,750		2,768,037
Vanderbilt Mortgage and Finance, Inc.:
7.525%, 7-7-14		112		113,202
7.07%, 12-7-14		384		389,257
7.955%, 12-7-24		1,000		1,061,870
7.525%, 11-7-26		915		949,634
Wells Fargo Mortgage Backed Securities: 2003-K Trust (The),
4.52024%, 11-25-33		1,200		1,178,979
2004-1 Trust (The),
5.5%, 2-25-34		1,690		1,674,768
				114,274,845
Real Estate Investment Trust - 0.29%
Covenant Retirement Communities, Inc.,
7.0%, 6-1-06		750		750,074
Security and Commodity Brokers - 0.25%
Bear Stearns Mortgage Securities Inc.,
8.0%, 11-25-29		658		656,487
TOTAL CORPORATE DEBT SECURITIES - 44.64%			$	115,681,406
(Cost: $117,032,448)

UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS
Mortgage-Backed Obligations
Federal Home Loan Mortgage Corporation Fixed Rate       Participation Certificates:
6.0%, 4-1-17		2,124		2,182,574
5.5%, 12-1-17		1,015		1,031,965
5.5%, 9-1-19		2,047		2,077,557
5.5%, 5-1-20		2,180		2,211,994
3.5%, 2-15-30		2,000		1,892,785
6.5%, 9-1-32		1,518		1,573,812
5.5%, 5-1-34		1,706		1,713,010
5.5%, 5-1-34		1,262		1,267,084
6.5%, 5-1-34		1,385		1,424,526
5.5%, 10-1-34		1,382		1,384,277
5.5%, 7-1-35		3,926		3,928,398
5.5%, 10-1-35		5,275		5,275,000
Federal National Mortgage Association Fixed Rate       Pass-Through Certificates:
6.0%, 1-1-18		681		700,588
5.5%, 2-1-18		636		646,233
5.5%, 3-1-18		2,985		3,029,946
5.0%, 5-1-18		1,911		1,908,951
5.0%, 10-1-18		2,002		1,998,420
5.0%, 11-1-19		2,000		1,994,376
5.5%, 10-1-20		3,500		3,550,313
5.5%, 2-1-24		728		732,874
6.0%, 8-1-29		576		586,997
7.0%, 11-1-31		292		306,447
6.5%, 2-1-32		264		272,768
6.5%, 2-1-32		217		224,085
6.5%, 2-1-32		191		198,022
7.0%, 2-1-32		381		400,490
7.0%, 3-1-32		534		561,645
6.5%, 4-1-32		112		116,013
6.5%, 5-1-32		206		213,221
6.5%, 7-1-32		1,010		1,050,765
6.0%, 9-1-32		215		219,936
6.0%, 10-1-32		1,347		1,378,011
6.0%, 10-1-32		1,304		1,336,239
6.5%, 10-1-32		100		103,664
6.0%, 11-1-32		1,160		1,189,137
6.0%, 11-1-32		680		697,260
6.0%, 3-1-33		1,727		1,770,074
6.0%, 3-1-33		1,596		1,632,483
6.0%, 3-1-33		1,213		1,243,126
6.0%, 3-1-33		333		341,176
5.5%, 4-1-33		2,203		2,205,989
5.5%, 5-1-33		766		765,826
5.5%, 5-1-33		384		384,915
6.0%, 6-1-33		2,381		2,420,743
5.0%, 11-1-33		2,117		2,076,844
6.0%, 12-1-33		729		745,657
5.0%, 1-1-34		2,083		2,044,251
5.0%, 3-1-34		4,364		4,282,344
5.0%, 3-1-34		475		466,068
5.5%, 3-1-34		3,380		3,392,400
5.5%, 4-1-34		2,559		2,568,153
5.5%, 4-1-34		3,048		3,047,724
5.0%, 5-1-34		223		218,145
5.5%, 7-1-34		2,277		2,284,845
6.0%, 8-1-34		823		837,048
5.5%, 9-1-34		1,826		1,828,086
6.0%, 9-1-34		1,505		1,530,742
6.5%, 9-1-34		2,791		2,872,318
5.5%, 10-1-34		2,580		2,581,350
5.5%, 11-1-34		987		987,595
6.0%, 11-1-34		731		743,642
6.5%, 11-1-34		138		141,979
6.0%, 12-1-34	7,445			7,570,576
5.5%, 1-1-35		931		931,019
5.5%, 2-1-35		3,351		3,353,907
5.5%, 2-1-35		2,635		2,636,050
5.5%, 2-1-35		1,438		1,437,598
4.802%, 3-1-35		3,045		3,027,273
5.0%, 3-1-35		243		238,257
6.5%, 3-1-35		2,070		2,132,411
6.0%, 4-1-35		2,534		2,576,739
5.0%, 5-1-35		1,006		985,324
5.176%, 6-1-35		1,462		1,464,721
6.0%, 6-1-35		3,704		3,766,729
5.5%, 7-1-35		998		997,693
Government National Mortgage Association Agency       REMIC/CMO (Interest Only):
1.30541%, 3-16-34		8,835		494,489
1.1722%, 7-16-40		8,568		412,918
0.37035%, 3-16-42	21,393			377,985
0.979%, 6-17-45	20,526			1,250,266
Government National Mortgage Association Fixed       Rate Pass-Through Certificates:
7.875%, 5-15-17		699		730,304
6.25%, 7-15-24		357		372,508
5.0%, 11-15-33		813		805,951
5.0%, 7-15-34		1,206		1,194,600
5.5%, 12-15-34		2,310		2,332,328
5.5%, 12-15-34		1,488		1,502,476
5.5%, 12-15-34		812		819,958
5.5%, 10-1-35		2,840		2,865,736
United States Department of Veterans Affairs,       Guaranteed REMIC Pass-Through Certificates,       Vendee Mortgage Trust:
1995-1 Class 1,
7.21251%, 2-15-25		311		325,388
1995-1 Class 2,
7.7925%, 2-15-25		110		115,390
TOTAL UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS - 53.06%			$	137,511,500
(Cost: $139,089,962)

SHORT-TERM SECURITIES
Finance Companies - 3.08%
PACCAR Financial Corp.,
3.7%, 10-5-05	3,000		2,998,767
Prudential Funding LLC,
3.7%, 10-13-05	5,000		4,993,833
			7,992,600
Household - General Products - 1.15%
Fortune Brands Inc.,
3.87%, 10-17-05	2,985		2,979,866
		��
Publishing - 1.42%
Tribune Co.,
3.91%, 10-3-05	3,668		3,667,203
Utilities - Telephone - 1.43%
SBC Communications Inc.,
3.65%, 10-12-05	3,700		3,695,874
TOTAL SHORT-TERM SECURITIES - 7.08%		$	18,335,543
(Cost: $18,335,543)
TOTAL INVESTMENT SECURITIES - 104.78%		$	271,528,449
(Cost: $274,457,953)
LIABILITIES, NET OF CASH(B) AND OTHER ASSETS - (4.78%)			(12,382,213	)
NET ASSETS - 100.00%		$	259,146,236

Notes to Schedule of Investments
Certain acronyms are used within the body of the Fund's holdings. The definitions of these acronyms are as follows: REMIC - Real Estate Mortgage Investment Conduit; CMO - Collateralized Mortgage Obligation.
(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, 2005, the total value of these securities amounted to $28,534,953 or 11.01% of net assets.
(B)Cash serves as collateral for the following open futures contract at September 30, 2005. (See Note 8 to financial statements):
	Type	Number of Contracts	Expiration Date	Market Value	Cost
	United States Treasury Note	60	20-Dec-05	$6,595,313	$6,743,138
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, 2005
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $274,458) (Notes 1 and 3)	$	271,528
Initial margin deposit		45
Receivables:
Investment securities sold		5,670
Dividends and interest		1,269
Fund shares sold		994
Variation margin		20
Prepaid and other assets		105
Total assets		279,631
LIABILITIES
Payable for investment securities purchased		19,438
Payable to Fund shareholders		501
Due to custodian		190
Accrued management fee (Note 2)		106
Dividends payable		97
Accrued shareholder servicing (Note 2)		75
Accrued service fee (Note 2)		53
Accrued distribution fee (Note 2)		17
Accrued accounting services fee (Note 2)		8
Total liabilities		20,485
Total net assets	$	259,146
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	262,069
Accumulated undistributed loss:
Accumulated undistributed net realized loss                 on investment transactions		(141	)
Net unrealized depreciation in value of investments		(2,782	)
Net assets applicable to outstanding units of capital	$	259,146
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		21,027
Class B		920
Class C		1,693
Class Y		663

See Notes to Financial Statements.

Statement of Operations
     IVY MORTGAGE SECURITIES FUND
     For the Six Months Ended September 30, 2005
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	6,338
Expenses (Note 2):
Investment management fee		590
Shareholder servicing:
Class A		287
Class B		22
Class C		23
Class Y		5
Service fee:
Class A		239
Class B		11
Class C		20
Class Y		8
Distribution fee:
Class A		17
Class B		33
Class C		60
Accounting services fee		46
Registration fees		41
Custodian fees		20
Audit fees		14
Other		57
Total		1,493
Less expenses in excess of contractual limit (Note 2)		(238	)
Total expenses		1,255
Net investment income		5,083
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on investments		(73	)
Unrealized depreciation in value of investments during the period		(716	)
Net loss on investments		(789	)
Net increase in net assets resulting from operations	$	4,294

See Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended
	September 30, 2005				March 31, 2005
INCREASE IN NET ASSETS
Operations:
Net investment income		$	5,083			$	7,628
Realized net gain (loss) on investments			(73	)			333
Unrealized depreciation			(716	)			(4,568	)
Net increase in net assets                       resulting from operations			4,294				3,393
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A			(4,533	)			(7,110	)
Class B			(140	)			(133	)
Class C			(272	)			(203	)
Class Y			(138	)			(170	)
Realized gains on investment transactions:
Class A			(-	)			(153	)
Class B			(-	)			(5	)
Class C			(-	)			(8	)
Class Y			(-	)			(4	)
			(5,083	)			(7,786	)
Capital share transactions (Note 5)			47,206				76,977
Total increase			46,417				72,584
NET ASSETS
Beginning of period			212,729				140,145
End of period		$	259,146			$	212,729
Undistributed net investment income		$	- -			$	- -

(1)See "Financial Highlights" on pages 167 - 170.

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 year ended			For the fiscal period ended				For the fiscal year ended September 30,
	9-30-05				3-31-05			3-31-04				2003			2002			2001			2000
Net asset value,       beginning of period		$	10.68		$	10.96			$	10.97		$	11.07		$	10.99		$	10.37		$	10.30
Income (loss) from       investment operations:
Net investment income			0.23			0.49				0.25			0.59			0.70			0.73			0.69
Net realized and             unrealized gain (loss)             on investments			(0.02	)		(0.27	)			0.03			(0.12	)		0.11			0.65			0.09
Total from investment       operations			0.21			0.22				0.28			0.47			0.81			1.38			0.78
Less distributions from:
Net investment income			(0.23	)		(0.49	)			(0.25	)		(0.57	)		(0.72	)		(0.72	)		(0.70	)
Capital gains			(0.00	)		(0.01	)			(0.04	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Tax return of capital			(0.00	)		(0.00	)			(0.00	)		(0.00	)		(0.01	)		(0.04	)		(0.01	)
Total distributions			(0.23	)		(0.50	)			(0.29	)		(0.57	)		(0.73	)		(0.76	)		(0.71	)
Net asset value,       end of period		$	10.66		$	10.68			$	10.96		$	10.97		$	11.07		$	10.99		$	10.37
Total return(1)			2.06	%		2.12	%			2.70	%		4.19	%(2)		7.88	%		13.90	%		7.70	%
Net assets, end of period       (in millions)			$224			$188				$134			$91			$67			$42			$32
Ratio of expenses to average       net assets including       reimbursement			0.95	%(3)		0.95	%			1.05	%(3)(4)		0.97	%		0.95	%		0.95	%		0.95	%
Ratio of net investment       income to average       net assets including       reimbursement			4.42	%(3)		4.59	%			4.56	%(3)(4)		5.27	%		6.24	%		6.75	%		6.81	%
Ratio of expenses to average       net assets excluding       reimbursement			1.18	%(3)		1.23	%			1.38	%(3)(4)		1.12	%		1.21	%		1.31	%		1.32	%
Ratio of net investment       income to average       net assets excluding       reimbursement			4.19	%(3)		4.31	%			4.22	%(3)(4)		5.12	%		5.98	%		6.39	%		6.44	%
Portfolio turnover rate			96	%		200	%			57	%		83	%		99	%		55	%		65	%

(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 4.28%.
(3)Annualized.
(4)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 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				For the fiscal year ended			For the period from 12-8-03(1) to
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	10.68		$	10.96		$	10.87
Income (loss) from investment operations:
Net investment income			0.17			0.37			0.12
Net realized and unrealized             gain (loss) on investments			(0.02	)		(0.27	)		0.13
Total from investment operations			0.15			0.10			0.25
Less distributions from:
Net investment income			(0.17	)		(0.37	)		(0.12	)
Capital gains			(0.00	)		(0.01	)		(0.04	)
Total distributions			(0.17	)		(0.38	)		(0.16	)
Net asset value, end of period		$	10.66		$	10.68		$	10.96
Total return			1.45	%		0.92	%		2.32	%
Net assets, end of period (in millions)			$10			$7			$1
Ratio of expenses to average net assets			2.15	%(2)		2.16	%		1.89	%(2)
Ratio of net investment income to       average net assets			3.23	%(2)		3.29	%		3.59	%(2)
Portfolio turnover rate			96	%		200	%		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				For the fiscal year ended			For the period from 12-8-03(1) to
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	10.68		$	10.96		$	10.87
Income (loss) from investment operations:
Net investment income			0.18			0.38			0.12
Net realized and unrealized             gain (loss) on investments			(0.02	)		(0.27	)		0.13
Total from investment operations			0.16			0.11			0.25
Less distributions from:
Net investment income			(0.18	)		(0.38	)		(0.12	)
Capital gains			(0.00	)		(0.01	)		(0.04	)
Total distributions			(0.18	)		(0.39	)		(0.16	)
Net asset value, end of period		$	10.66		$	10.68		$	10.96
Total return			1.56	%		1.05	%		2.32	%
Net assets, end of period (in millions)			$18			$12			$2
Ratio of expenses to average net assets			1.94	%(2)		2.03	%		1.86	%(2)
Ratio of net investment income to       average net assets			3.43	%(2)		3.41	%		3.61	%(2)
Portfolio turnover rate			96	%		200	%		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				For the fiscal year ended			For the period from 12-8-03(1) to
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	10.68		$	10.96		$	10.87
Income (loss) from investment operations:
Net investment income			0.23			0.48			0.15
Net realized and unrealized             gain (loss) on investments			(0.02	)		(0.27	)		0.13
Total from investment operations			0.21			0.21			0.28
Less distributions from:
Net investment income			(0.23	)		(0.48	)		(0.15	)
Capital gains			(0.00	)		(0.01	)		(0.04	)
Total distributions			(0.23	)		(0.49	)		(0.19	)
Net asset value, end of period		$	10.66		$	10.68		$	10.96
Total return			2.01	%		1.95	%		2.56	%
Net assets, end of period (in millions)			$7			$6			$3
Ratio of expenses to average net assets			1.05	%(2)		1.12	%		1.09	%(2)
Ratio of net investment income to       average net assets			4.32	%(2)		4.41	%		4.38	%(2)
Portfolio turnover rate			96	%		200	%		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, 2005, Ivy Pacific Opportunities Fund had net assets totaling $122,533,570 invested in a diversified portfolio of:

92.66%	Common Stocks
7.34%	Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund was invested by geographic region and by industry, respectively, as follows:

Pacific Basin	$	89.75
Cash and Cash Equivalents	$	7.34
United States	$	1.57
Europe	$	1.34

Multi-Industry Stocks	$	19.70
Financial Services Stocks	$	17.43
Technology Stocks	$	12.08
Shelter Stocks	$	8.76
Energy Stocks	$	8.29
Cash and Cash Equivalents	$	7.34
Raw Materials Stocks	$	5.94
Utilities Stocks	$	5.14
Capital Goods Stocks	$	5.02
Consumer Goods Stocks	$	4.99
Miscellaneous Stocks	$	3.23
Business Equipment and Services Stocks	$	2.08

The Investments of Ivy Pacific Opportunities Fund
September 30, 2005
COMMON STOCKS	Shares		Value
Australia - 3.28%
BHP Billiton Plc (A)	87,170	$	1,479,087
Novogen LTD (A)*	260,510		959,552
Rio Tinto Limited (A)	35,020		1,579,408
			4,018,047
China - 14.93%
Aluminum Corporation of China Limited, H Shares (A)	922,000		582,386
China Medical Technologies, Inc.*	50,000		1,104,250
China Mobile (Hong Kong) Limited (A)	260,000		1,273,623
China Netcom Group Corporation (Hong Kong) Limited (A)	916,500		1,577,239
China Petroleum & Chemical Corporation, H Shares (A)	4,500,000		2,059,324
China Resources Power Holdings Company Limited (A)	500,000		319,050
China Resources Power Holdings Company Limited (A)(B)	1,000,000		638,100
China Shenhua Energy Company Limited, H shares (A)(B)*	1,500,000		1,759,610
China Yurun Food Group Limited (A)(B)*	2,000,000		953,928
eLong, Inc., ADR*	39,950		496,579
Heng Tai Consumables Group Limited (A)	3,110,000		549,243
PetroChina Company Limited (A)(B)	2,000,000		1,675,819
PORTS DESIGN LIMITED (A)	500,000		567,200
PORTS DESIGN LIMITED (A)(B)	500,000		567,200
Seec Media Group Limited (A)	3,000,000		135,355
Sino-Forest Corporation, Class A (A)*	208,360		603,916
Sino-Forest Corporation, Class A (A)(B)*	217,000		628,959
The9 Limited, ADR*	20,000		374,800
Wah Sang Gas Holdings Limited (A)(C)*	736,000		15,180
Weichai Power Co., Ltd. (A)	500,000		1,111,842
ZTE Corporation, H Shares (A)	400,000		1,301,983
			18,295,586
Hong Kong - 11.58%
ASM Pacific Technology Limited (A)	250,000		1,216,580
Cheung Kong (Holdings) Limited (A)	220,000		2,484,338
Chitaly Holdings Limited (A)	1,240,000		703,328
Dah Sing Financial Holdings Limited (A)	200,010		1,340,722
GST Holdings Limited (A)(B)*	2,250,000		382,860
Hutchison Whampoa Limited, Ordinary Shares (A)	180,000		1,862,093
Lee & Man Paper Manufacturing Limited (A)	670,000		634,813
Lee & Man Paper Manufacturing Limited (A)(B)	400,000		378,993
Pacific Basin Shipping Limited (A)(B)	1,700,000		838,232
Panva Gas Holdings Limited (A)*	1,223,000		559,679
Sinolink Worldwide Holdings Limited (A)	5,678,000		1,229,670
Sun Hung Kai Properties Limited (A)	100,000		1,035,785
Wharf (Holdings) Limited (The) (A)	392,000		1,528,605
			14,195,698
India - 3.78%
Infosys Technologies Limited (A)	30,000		1,715,746
Jet Airways (India) Private Limited (A)(B)*	12,000		304,472
ONGC Videsh Limited (A)	108,460		2,614,524
			4,634,742
Indonesia - 0.69%
PT Astra International Tbk (A)	500,000		473,301
PT International Nickel Indonesia Tbk (A)	245,000		368,689
			841,990
Malaysia - 5.61%
Arab-Malaysian Corporation Berhad (A)*	2,500,000		729,637
Genting Berhad (A)	200,000		1,135,580
IOI Corporation Berhad (A)	400,000		1,262,935
iShares MSCI Malaysia Index Fund	268,250		1,963,590
Malayan Banking Berhad (A)	151,400		465,970
Malaysia International Shipping Corporation Berhad (A)	185,100		913,468
Maxis Communications Berhad (A)	160,000		401,167
			6,872,347
Singapore - 7.63%
DBS Group Holdings Ltd (A)	250,000		2,334,377
Keppel Corporation Limited (A)	230,000		1,726,257
Keppel Land Limited (A)	750,000		1,639,974
SembCorp Industries Ltd (A)	611,000		1,083,269
Singapore Telecommunications Limited (A)	1,000,000		1,447,905
Venture Corporation Limited (A)	130,000		1,114,000
			9,345,782
South Korea - 23.51%
Cheil Industries Inc. (A)	57,230		1,229,808
Daelim Industrial Co., Ltd. (A)	17,060		1,204,543
Hana Bank (A)	109,000		4,025,806
Honam Petrochemical Corp. (A)*	30,000		1,496,546
Hynix Semiconductor Inc. (A)*	22,000		485,418
Hyundai Mipo Dockyard Co., Ltd. (A)	22,000		1,582,886
Hyundai Motor Company (A)	30,000		2,345,549
KT Corporation (A)	24,530		1,036,595
Kookmin Bank (A)	66,500		3,923,398
Kyeryong Construction Industrial Co. Ltd (A)	46,000		1,215,752
LG Chem, Ltd. (A)	18,500		796,863
SK Corporation (A)	25,000		1,450,979
SK Telecom Co., Ltd. (A)	6,000		1,165,579
Samsung Electronics Co., Ltd. (A)	10,400		5,866,462
Samsung SDI Co., Ltd. (A)	9,450		983,620
			28,809,804
Taiwan - 12.23%
Cathay Financial Holding Co., Ltd. (A)	1,230,000		2,294,251
China Steel Corporation (A)	1,500,000		1,337,914
Chinatrust Financial Holding Company, Ltd. (A)	2,259,870		1,947,577
Chunghwa Telecom Co., Ltd., ADR	115,000		2,128,650
iShares MSCI Taiwan Index Fund	250,000		2,927,500
MediaTek Incorporation (A)	17,000		160,339
Quanta Computer Inc. (A)	819,306		1,343,044
TSRC Corporation (A)	2,456,000		1,221,117
Taiwan Semiconductor Manufacturing Company Ltd. (A)	1,013,227		1,627,343
			14,987,735
Thailand - 6.51%
Bangkok Bank Public Company Limited (A)	650,000		1,804,237
C.P. Seven Eleven Public Company Limited (A)	4,205,000		634,794
LAND AND HOUSES PUBLIC COMPANY LIMITED (A)	3,405,700		750,465
PTT Public Company Limited (A)	239,000		1,419,917
Silicon Motion Technology Corporation, ADR*	101,600		1,537,208
Thai Oil Public Company Limited (A)	400,000		730,460
Thai Oil Public Company Limited (A)(B)	600,000		1,095,690
			7,972,771
United Kingdom - 1.34%
Standard Chartered PLC (A)	75,000		1,643,592
United States - 1.57%
UTStarcom, Inc.*	85,000		694,025
iShares MSCI Pacific ex-Japan Index Fund	11,900		1,227,485
			1,921,510
TOTAL COMMON STOCKS - 92.66%		$	113,539,604
(Cost: $97,279,506)

SHORT-TERM SECURITY - 4.79%	Principal Amount in Thousands
Finance Companies
BP Capital Markets p.l.c.,
3.88%, 10-3-05	$	5,867	$	5,865,735
(Cost: $5,865,735)
TOTAL INVESTMENT SECURITIES - 97.45%			$	119,405,339
(Cost: $103,145,241)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 2.55%				3,128,231
NET ASSETS - 100.00%			$	122,533,570

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, 2005, the total value of these securities amounted to $9,223,863 or 7.53% of net assets.

(C)Security valued in good faith under procedures established by the Board of Directors.

      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, 2005
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $103,145) (Notes 1 and 3)	$	119,405
Cash denominated in foreign currencies (cost - $3,138)		3,133
Receivables:
Fund shares sold		595
Dividends and interest		869
Prepaid and other assets		34
Total assets		124,036
LIABILITIES
Payable for investment securities purchased		963
Payable to Fund shareholders		136
Accrued management fee (Note 2)		96
Accrued shareholder servicing (Note 2)		51
Accrued service fee (Note 2)		24
Accrued distribution fee (Note 2)		11
Accrued accounting services fee (Note 2)		4
Due to custodian		2
Accrued administrative fee (Note 2)		1
Other		214
Total liabilities		1,502
Total net assets	$	122,534
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	104,961
Accumulated undistributed income:
Accumulated undistributed net investment income		659
Accumulated undistributed net realized gain                 on investment transactions		729
Net unrealized appreciation in value of investments		16,185
Net assets applicable to outstanding units of capital	$	122,534
Net asset value per share (net assets divided by shares outstanding):
Class A		$12.26
Class B		$11.40
Class C		$11.52
Class Y		$12.35
Advisor Class		$12.03
Capital shares outstanding:
Class A		8,344
Class B		695
Class C		902
Class Y		151
Advisor Class		5

See Notes to Financial Statements.

Statement of Operations
     IVY PACIFIC OPPORTUNITIES FUND
     For the Six Months Ended September 30, 2005
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $299)	$	1,841
Interest and amortization		65
Total income		1,906
Expenses (Note 2):
Investment management fee		481
Shareholder servicing:
Class A		182
Class B		22
Class C		22
Class Y		1
Advisor Class		- -	*
Service fee:
Class A		83
Class B		9
Class C		10
Class Y		2
Custodian fee		69
Distribution fee:
Class A		17
Class B		25
Class C		32
Accounting services fee		22
Audit fees		12
Administrative fee		5
Legal fees		2
Other		56
Total expenses		1,052
Net investment income		854
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		4,198
Realized net loss on foreign currency transactions		(191	)
Realized net gain on investments		4,007
Unrealized appreciation in value of investments during the period		9,798
Net gain on investments		13,805
Net increase in net assets resulting from operations	$	14,659

*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				For the fiscal year ended
	September 30, 2005				March 31, 2005
INCREASE IN NET ASSETS
Operations:
Net investment income (loss)		$	854			$	(495	)
Realized net gain on investments			4,007				4,068
Unrealized appreciation			9,798				2,652
Net increase in net assets                       resulting from operations			14,659				6,225
Distributions to shareholders from (Note1F): (1)
Net investment income:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)
Advisor Class			(-	)			(-	)
Realized gains on investment transactions:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)
Advisor Class			(-	)			(-	)
			(-	)			(-	)
Capital share transactions (Note 5)			29,085				34,230
Total increase			43,744				40,455
NET ASSETS
Beginning of period			78,790				38,335
End of period		$	122,534			$	78,790
Undistributed net investment income (loss)		$	659			$	(4	)

(1)See "Financial Highlights" on pages 179 - 183.

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 year ended			For the fiscal period ended				For the fiscal year ended December 31,
	9-30-05				3-31-05			3-31-04				2003			2002			2001			2000
Net asset value,       beginning of period		$	10.61		$	9.55			$	9.11		$	5.96		$	6.72		$	7.42		$	9.15
Income (loss) from       investment operations:
Net investment             income (loss)			0.08			(0.07	)			0.00		(0.02		)		0.01	(1)	(0.03		)(1)		0.07
Net realized and             unrealized gain (loss)             on investments			1.57			1.13				0.44			3.17		(0.77		) (2)	(0.66		)(2)	(1.74		)
Total from investment       operations			1.65			1.06				0.44			3.15		(0.76		)	(0.69		)	(1.67		)
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00		)	(0.00		)	(0.00		)	(0.01		)	(0.06		)
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		)	(0.00		)	(0.01		)	(0.06		)
Net asset value,       end of period		$	12.26		$	10.61			$	9.55		$	9.11		$	5.96		$	6.72		$	7.42
Total return(3)			15.55	%		11.10	%			4.83	%	52.85		%	- -11.31		%(2)	- -9.29		%(2)	- -18.25		%
Net assets, end of period       (in millions)			$102			$64				$29			$18			$5			$6			$9
Ratio of expenses to average       net assets including       reimbursement			2.05	%(4)		2.22	%			2.07	%(4)		2.64	%		2.21	%		2.21	%		2.16	%
Ratio of net investment       income (loss) to average       net assets including       reimbursement			1.90	%(4)		- -0.80	%		- -1.07		%(4)	- -0.39		%		0.20	%	- -0.49		%		0.83	%
Ratio of expenses to average       net assets excluding       reimbursement			NA			NA				NA			2.73	%		3.52	%		3.57	%		3.10	%
Ratio of net investment loss       to average net assets       excluding reimbursement			NA			NA				NA		- -0.48		%	- -1.11		%	- -1.85		%	- -0.11		%
Portfolio turnover rate			47	%		87	%			61	%		187	%		16	%		82	%		108	%

(1)Based on average shares outstanding.
(2)Includes redemption fees added to capital.
(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 PACIFIC OPPORTUNITIES FUND
     Class B Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended			For the fiscal period ended				For the fiscal year ended December 31,
	9-30-05				3-31-05			3-31-04				2003			2002				2001			2000
Net asset value,       beginning of period		$	9.91		$	9.01			$	8.61		$	5.75		$	6.56			$	7.33		$	9.04
Income (loss) from       investment operations:
Net investment             income (loss)			0.06		(0.13		)		(0.04		)	(0.06		)	(0.04		) (1)		(0.08		) (1)		0.01
Net realized and             unrealized gain (loss)             on investments			1.43			1.03				0.44			2.92		(0.77		)		(0.68		)	(1.71		)
Total from investment       operations			1.49			0.90				0.40			2.86		(0.81		)		(0.76		)	(1.70		)
Less distributions from:
Net investment income			(0.00	)	(0.00		)		(0.00		)	(0.00		)	(0.00		)		(0.01		)	(0.01		)
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		)	(0.00		)		(0.01		)	(0.01		)
Net asset value,       end of period		$	11.40		$	9.91			$	9.01		$	8.61		$	5.75			$	6.56		$	7.33
Total return			15.04	%		9.99	%			4.65	%	49.74		%	-12.35		%	- -10.35			%	- -18.80		%
Net assets, end of period       (in millions)			$8			$6				$6			$6			$3				$4			$6
Ratio of expenses to average       net assets including       reimbursement			3.00	%(2)		3.06	%			2.86	%(2)		3.46	%		2.96	%			2.95	%		2.92	%
Ratio of net investment       income (loss) to average       net assets including       reimbursement			1.06	%(2)		- -1.57	%		- -1.92		%(2)	- -1.15		%	- -0.55		%		- -1.22		%		0.07	%
Ratio of expenses to average       net assets excluding       reimbursement			NA			NA				NA			3.55	%		4.27	%			4.31	%		3.86	%
Ratio of net investment       loss to average net       assets excluding       reimbursement			NA			NA				NA		- -1.24		%	- -1.86		%		- -2.58		%	- -0.87		%
Portfolio turnover rate			47	%		87	%			61	%		187	%		16	%			82	%		108	%

(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 year ended			For the fiscal period ended				For the fiscal year ended December 31,
	9-30-05				3-31-05			3-31-04				2003				2002				2001				2000
Net asset value,       beginning of period		$	10.01		$	9.09			$	8.68		$	5.75			$	6.55			$	7.31			$	9.07
Income (loss) from       investment operations:
Net investment             income (loss)			0.06			(0.09	)		(0.02		)	(0.05		)		(0.03		)(1)		(0.08		)(1)			0.01
Net realized and             unrealized gain (loss)             on investments			1.45			1.01				0.43			2.98			(0.77		)		(0.67		)		(1.71		)
Total from investment       operations			1.51			0.92				0.41			2.93			(0.80		)		(0.75		)		(1.70		)
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00		)	(0.00		)		(0.00		)		(0.01		)		(0.06		)
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		)		(0.00		)		(0.01		)		(0.06		)
Net asset value,       end of period		$	11.52		$	10.01			$	9.09		$	8.68			$	5.75			$	6.55			$	7.31
Total return			15.09	%		10.12	%			4.72	%	50.96		%	- -12.21			%	- -10.25			%	- -18.79			%
Net assets, end of period       (in millions)			$11			$7				$3			$2				$1				$1				$2
Ratio of expenses to average       net assets including       reimbursement			2.88	%(2)		3.06	%			2.57	%(2)		3.48	%			2.94	%			2.90	%			3.03	%
Ratio of net investment       income (loss) to average       net assets including       reimbursement			1.12	%(2)		- -1.68	%		- -1.59		%(2)	- -1.14		%		- -0.53		%		- -1.18		%		- -0.03		%
Ratio of expenses to average       net assets excluding       reimbursement			NA			NA				NA			3.57	%			4.25	%			4.26	%			3.97	%
Ratio of net investment loss       to average net assets       excluding reimbursement			NA			NA				NA		- -1.23		%		- -1.84		%		- -2.54		%		- -0.97		%
Portfolio turnover rate			47	%		87	%			61	%		187	%			16	%			82	%			108	%

(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				For the fiscal year ended			For the fiscal period ended			For the period from 7-24-03(1) to
	9-30-05				3-31-05			3-31-04			12-31-03
Net asset value,       beginning of period		$	10.67		$	9.58		$	9.13		$	6.85
Income (loss) from       investment operations:
Net investment income (loss)			0.09			(0.04	)	(0.00		)	(0.01		)
Net realized and unrealized             gain on investments			1.59			1.13			0.45			2.29
Total from investment operations			1.68			1.09			0.45			2.28
Less distributions from:
Net investment income			(0.00	)		(0.00	)	(0.00		)	(0.00		)
Capital gains			(0.00	)		(0.00	)	(0.00		)	(0.00		)
Total distributions			(0.00	)		(0.00	)	(0.00		)	(0.00		)
Net asset value, end of period		$	12.35		$	10.67		$	9.58		$	9.13
Total return			15.75	%		11.38	%		4.93	%	33.28		%
Net assets, end of period       (in thousands)		$1,864			$1,100			$707			$497
Ratio of expenses to average       net assets including       reimbursement			1.74	%(2)		1.88	%		1.64	%(2)		2.01	%(2)
Ratio of net investment       income (loss) to average       net assets including       reimbursement			2.15	%(2)	- -0.47		%	- -0.68		%(2)	- -0.40		%(2)
Ratio of expenses to average       net assets excluding       reimbursement			NA			NA			NA			2.18	%(2)
Ratio of net investment loss       to average net assets       excluding reimbursement			NA			NA			NA		- -0.57		%(2)
Portfolio turnover rate			47	%		87	%		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 year ended			For the fiscal period ended				For the fiscal year ended December 31,
	9-30-05				3-31-05			3-31-04				2003			2002			2001			2000
Net asset value,       beginning of period		$	10.38		$	9.28			$	8.85		$	5.81		$	6.59		$	7.30		$	9.03
Income (loss) from       investment operations:
Net investment             income (loss)			0.14	(2)		(0.01	)		(0.01		)	(0.01		)		0.04	(2)	(0.02		)(2)		0.12	(2)
Net realized and             unrealized gain (loss)             on investments			1.51	(2)		1.11				0.44			3.05		(0.82		)	(0.68		)	(1.82		)
Total from investment       operations			1.65			1.10				0.43			3.04		(0.78		)	(0.70		)	(1.70		)
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00		)	(0.00		)	(0.00		)	(0.01		)	(0.03		)
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		)	(0.00		)	(0.01		)	(0.03		)
Net asset value,       end of period		$	12.03		$	10.38			$	9.28		$	8.85		$	5.81		$	6.59		$	7.30
Total return			15.90	%		11.85	%			4.86	%	52.32		%	- -11.84		%	- -9.58		%	- -18.77		%
Net assets, end of period       (in thousands)			$65			$64				$58			$55			$34			$3			$42
Ratio of expenses to average       net assets including       reimbursement			1.47	%(3)		1.56	%			1.82	%(3)		2.49	%		1.74	%		2.03	%		1.77	%
Ratio of net investment       income (loss) to average       net assets including       reimbursement			2.65	%(3)		- -0.06	%		- -0.88		%(3)	- -0.09		%		0.67	%	- -0.31		%		1.23	%
Ratio of expenses to average       net assets excluding       reimbursement			NA			NA				NA			2.65	%		3.05	%		3.39	%		2.71	%
Ratio of net investment       income (loss) to average       net assets excluding       reimbursement			NA			NA				NA		- -0.25		%	- -0.64		%	- -1.67		%		0.29	%
Portfolio turnover rate			47	%		87	%			61	%		187	%		16	%		82	%		108	%

(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, 2005, Ivy Real Estate Securities Fund had net assets totaling $418,269,556 invested in a diversified portfolio of:

99.11%	Common Stocks
0.89%	Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Shelter Stocks	$	79.65
Consumer Services Stocks	$	9.12
Multi-Industry Stocks	$	5.27
Business Equipment and Services Stocks	$	3.73
Retail Stocks	$	1.34
Cash and Cash Equivalents	$	0.89

The Investments of Ivy Real Estate Securities Fund
September 30, 2005
COMMON STOCKS	Shares		Value
Business Equipment and Services - 3.73%
Brookfield Properties Corporation	529,000	$	15,589,630
Hotels and Gaming - 9.12%
Hilton Hotels Corporation	677,300		15,117,336
Marriott International, Inc., Class A	72,100		4,542,300
Starwood Hotels & Resorts Worldwide, Inc.	323,100		18,471,627
			38,131,263
Multiple Industry - 5.27%
DiamondRock Hospitality Company	377,600		4,436,800
Eagle Hospitality Properties Trust, Inc.	100,400		1,001,992
Education Realty Trust, Inc.	396,200		6,616,540
NorthStar Realty Finance Corp.	455,700		4,279,023
Sunstone Hotel Investors, Inc.	153,900		3,753,621
Thomas Properties Group, Inc.	150,200		1,939,833
			22,027,809
Real Estate Investment Trust - 79.65%
Alexandria Real Estate Equities, Inc.	58,600		4,845,634
American Campus Communities, Inc.	351,300		8,438,226
Archstone-Smith Trust	191,200		7,623,144
Arden Realty, Inc.	68,400		2,816,028
AvalonBay Communities, Inc.	113,500		9,726,950
BioMed Realty Trust, Inc.	398,612		9,885,578
Boston Properties, Inc.	119,300		8,458,370
Brandywine Realty Trust	327,900		10,194,411
Camden Property Trust	229,600		12,800,200
Columbia Equity Trust, Inc.*	132,000		1,927,200
Cousins Properties Incorporated	181,400		5,481,908
Developers Diversified Realty Corporation	336,100		15,695,870
Equity Lifestyle Properties, Inc.	37,400		1,683,000
Equity Office Properties Trust	122,400		4,003,704
Equity One, Inc.	317,000		7,370,250
Equity Residential	338,400		12,808,440
Essex Property Trust, Inc.	33,500		3,015,000
Extra Space Storage Inc.	160,234		2,464,399
First Industrial Realty Trust, Inc.	126,600		5,070,330
First Potomac Realty Trust	112,900		2,901,530
General Growth Properties, Inc.	396,740		17,825,528
Gramercy Capital Corp.	144,000		3,450,240
Hersha Hospitality Trust	275,200		2,732,736
Host Marriott Corporation	332,500		5,619,250
Kimco Realty Corporation	414,900		13,036,158
Kite Realty Group Trust	548,100		8,177,652
Liberty Property Trust	89,100		3,790,314
Maguire Properties, Inc.	165,600		4,976,280
Mills Corporation (The)	237,400		13,075,992
Newcastle Investment Corp.	115,600		3,225,240
Pan Pacific Retail Properties, Inc.	26,700		1,759,530
Prentiss Properties Trust	156,400		6,349,840
ProLogis	640,465		28,379,004
Public Storage, Inc.	94,400		6,324,800
Regency Centers Corporation	69,500		3,992,775
SL Green Realty Corp.	27,900		1,902,222
Simon Property Group, Inc.	312,800		23,184,736
Spirit Finance Corporation	436,500		4,910,625
Spirit Finance Corporation (A)	70,700		795,375
Strategic Hotel Capital, L.L.C.	329,600		6,018,496
Trizec Properties, Inc.	419,400		9,671,364
United Dominion Realty Trust, Inc.	356,542		8,450,045
Ventas, Inc.	219,800		7,077,560
Vornado Realty Trust	104,000		9,008,480
Winston Hotels, Inc.	222,200		2,222,000
			333,166,414
Retail - Specialty Stores - 1.34%
Forest City Enterprises, Inc., Class A	147,378		5,615,102
TOTAL COMMON STOCKS - 99.11%		$	414,530,218
(Cost: $335,668,434)

SHORT-TERM SECURITIES	Principal Amount in Thousands
Security and Commodity Brokers - 0.45%
Greenwich Capital Holdings Inc. (Royal Bank of       Scotland PLC (The)),
3.87%, 10-3-05	$	1,889		1,888,594
Utilities - Electric - 0.29%
Wisconsin Electric Power Co.,
3.88%, 10-3-05		1,222		1,221,737
TOTAL SHORT-TERM SECURITIES - 0.74%			$	3,110,331
(Cost: $3,110,331)
TOTAL INVESTMENT SECURITIES - 99.85%			$	417,640,549
(Cost: $338,778,765)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.15%				629,007
NET ASSETS - 100.00%			$	418,269,556

Notes to Schedule of Investments

      *No dividends were paid during the preceding 12 months.

(A)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, 2005, the total value of this security amounted to 0.19% 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, 2005
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $338,779) (Notes 1 and 3)	$	417,641
Cash		82
Receivables:
Dividends and interest		2,182
Fund shares sold		933
Investment securities sold		186
Prepaid and other assets		26
Total assets		421,050
LIABILITIES
Payable for investment securities purchased		1,804
Payable to Fund shareholders		393
Accrued management fee (Note 2)		307
Accrued shareholder servicing (Note 2)		113
Accrued service fee (Note 2)		85
Accrued distribution fee (Note 2)		16
Accrued accounting services fee (Note 2)		11
Other		51
Total liabilities		2,780
Total net assets	$	418,270
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	324,859
Accumulated undistributed income:
Accumulated undistributed net investment income		78
Accumulated undistributed net realized gain                  on investment transactions		14,471
Net unrealized appreciation in value of investments		78,862
Net assets applicable to outstanding units of capital	$	418,270
Net asset value per share (net assets divided by shares outstanding):
Class A		$20.92
Class B		$20.85
Class C		$20.87
Class Y		$20.93
Capital shares outstanding:
Class A		9,665
Class B		616
Class C		668
Class Y		9,045

See Notes to Financial Statements.

Statement of Operations
     IVY REAL ESTATE SECURITIES FUND
     For the Six Months Ended September 30, 2005
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $29)	$	4,769
Interest and amortization		109
Total income		4,878
Expenses (Note 2):
Investment management fee		1,674
Shareholder servicing:
Class A		344
Class B		38
Class C		28
Class Y		129
Service fee:
Class A		185
Class B		15
Class C		15
Class Y		216
Distribution fee:
Class A		34
Class B		44
Class C		46
Accounting services fee		60
Custodian fees		17
Audit fees		14
Legal fees		1
Other		120
Total expenses		2,980
Net investment income		1,898
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		8,356
Realized net gain on foreign currency transactions		- -	*
Realized net gain on investments		8,356
Unrealized appreciation in value of investments during the period		40,515
Net gain on investments		48,871
Net increase in net assets resulting from operations	$	50,769

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Changes in Net Assets
     IVY REAL ESTATE SECURITIES FUND
     (In Thousands)
     

	For the six months ended				For the fiscal year ended
	September 30, 2005				March 31, 2005
INCREASE IN NET ASSETS
Operations:
Net investment income		$	1,898			$	2,657
Realized net gain on investments			8,356				13,738
Unrealized appreciation			40,515				9,265
Net increase in net assets                        resulting from operations			50,769				25,660
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A			(799	)			(1,366	)
Class B			(-	)			(33	)
Class C			(5	)			(58	)
Class Y			(1,016	)			(1,924	)
Realized gains on investment transactions:
Class A			(-	)			(4,340	)
Class B			(-	)			(275	)
Class C			(-	)			(308	)
Class Y			(-	)			(4,922	)
			(1,820	)			(13,226	)
Capital share transactions (Note 5)			46,675				171,568
Total increase			95,624				184,002
NET ASSETS
Beginning of period			322,646				138,644
End of period		$	418,270			$	322,646
Undistributed net investment income (loss)		$	78			$	(-	)*

*Not shown due to rounding.
(1)See "Financial Highlights" on pages 191 - 194.

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 year ended				For the fiscal period ended				For the fiscal year ended July 31,
	9-30-05				3-31-05				3-31-04				2003			2002			2001			2000
Net asset value,       beginning of period		$	18.13			$	16.99			$	13.42		$	11.93		$	11.67		$	11.23		$	10.25
Income from investment       operations:
Net investment income			0.07				0.15	(1)			0.62			0.48			0.32			0.51			0.43
Net realized and             unrealized gain             on investments			2.81				1.93	(1)			3.38			1.72			1.01			0.47			1.00
Total from investment       operations			2.88				2.08				4.00			2.20			1.33			0.98			1.43
Less distributions from:
Net investment income			(0.09	)			(0.25	)			(0.24	)		(0.48	)		(0.28	)		(0.54	)		(0.41	)
Capital gains			(0.00	)			(0.69	)			(0.19	)		(0.23	)		(0.79	)		(0.00	)		(0.04	)
Total distributions			(0.09	)			(0.94	)			(0.43	)		(0.71	)		(1.07	)		(0.54	)		(0.45	)
Net asset value,       end of period		$	20.92			$	18.13			$	16.99		$	13.42		$	11.93		$	11.67		$	11.23
Total return (2)			15.89	%			12.09	%			29.78	%		19.65	%		12.31	%		9.10	%		14.89	%
Net assets, end of period       (in millions)			$202				$155				$44			$60			$32			$17			$12
Ratio of expenses to       average net assets       including voluntary       expense waiver			1.66	%(3)			1.67	%			1.48	%(3)(4)		1.46	%		1.50	%		1.50	%		1.50	%
Ratio of net investment       income to average       net assets including       voluntary expense       waiver			0.94	%(3)			0.95	%			4.35	%(3)(4)		2.95	%		2.83	%		4.29	%		4.26	%
Ratio of expenses to       average net assets       excluding voluntary       expense waiver			NA				NA				1.49	%(3)(4)		1.46	%		1.69	%		1.99	%		2.72	%
Ratio of net investment       income to average       net assets excluding       voluntary expense       waiver			NA				NA				4.34	%(3)(4)		2.95	%		2.64	%		3.81	%		3.04	%
Portfolio turnover rate			15	%			48	%			35	%		48	%		101	%		173	%		117	%

(1)Based on average weekly shares outstanding.
(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 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 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:

	For the six months ended				For the fiscal year ended			For the period from 12-8-03(1) through
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	18.08		$	16.97		$	15.18
Income (loss) from investment operations:
Net investment income (loss)			(0.00	)		(0.07	)(2)		0.07
Net realized and unrealized             gain on investments			2.77			1.95	(2)		2.08
Total from investment operations			2.77			1.88			2.15
Less distributions from:
Net investment income			(0.00	)		(0.08	)		(0.17	)
Capital gains			(0.00	)		(0.69	)		(0.19	)
Total distributions			(0.00	)		(0.77	)		(0.36	)
Net asset value, end of period		$	20.85		$	18.08		$	16.97
Total return			15.32	%		10.91	%		14.46	%
Net assets, end of period (in millions)			$13			$10			$2
Ratio of expenses to average net assets			2.68	%(3)		2.73	%		3.02	%(3)
Ratio of net investment loss to       average net assets		- -0.03		%(3)		- -0.24	%		- -5.40	%(3)
Portfolio turnover rate			15	%		48	%		35	%(4)

(1)Commencement of operations of the class.
(2)Based on average weekly shares outstanding.
(3)Annualized.
(4)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:

	For the six months ended				For the fiscal year ended			For the period from 12-8-03(1) through
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	18.10		$	16.99		$	15.18
Income from investment operations:
Net investment income			0.02			0.12			0.08
Net realized and unrealized             gain on investments			2.76			1.82			2.09
Total from investment operations			2.78			1.94			2.17
Less distributions from:
Net investment income			(0.01	)		(0.14	)		(0.17	)
Capital gains			(0.00	)		(0.69	)		(0.19	)
Total distributions			(0.01	)		(0.83	)		(0.36	)
Net asset value, end of period		$	20.87		$	18.10		$	16.99
Total return			15.35	%		11.21	%		14.59	%
Net assets, end of period (in millions)			$14			$10			$2
Ratio of expenses to average net assets			2.48	%(2)		2.49	%		2.82	%(2)
Ratio of net investment income       (loss) to average net assets			0.13	%(2)		0.14	%		- -  4.46	%(2)
Portfolio turnover rate			15	%		48	%		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:

	For the six months ended				For the fiscal year ended			For the period from 12-8-03(1) through
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	18.14		$	16.99		$	15.18
Income from investment operations:
Net investment income			0.13			0.26	(2)		0.04
Net realized and unrealized             gain on investments			2.78			1.87	(2)		2.15
Total from investment operations			2.91			2.13			2.19
Less distributions from:
Net investment income			(0.12	)		(0.29	)		(0.19	)
Capital gains			(0.00	)		(0.69	)		(0.19	)
Total distributions			(0.12	)		(0.98	)		(0.38	)
Net asset value, end of period		$	20.93		$	18.14		$	16.99
Total return			16.04	%		12.40	%		14.78	%
Net assets, end of period (in millions)			$189			$148			$91
Ratio of expenses to average net assets			1.40	%(3)		1.44	%		1.60	%(3)
Ratio of net investment income to       average net assets			1.24	%(3)		1.59	%		0.14	%(3)
Portfolio turnover rate			15	%		48	%		35	%(4)

(1)Commencement of operations of the class.
(2)Based on average weekly shares outstanding.
(3)Annualized.
(4)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, 2005, Ivy Small Cap Value Fund had net assets totaling $116,870,718 invested in a diversified portfolio of:

93.09%	Common Stocks
6.91%	Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Financial Services Stocks	$	16.65
Business Equipment and Services Stocks	$	12.12
Technology Stocks	$	9.16
Retail Stocks	$	8.73
Consumer Services Stocks	$	8.22
Multi-Industry Stocks	$	7.92
Cash and Cash Equivalents	$	6.91
Consumer Nondurables Stocks	$	5.42
Energy Stocks	$	5.05
Health Care Stocks	$	4.81
Utilities Stocks	$	3.68
Capital Goods Stocks	$	3.63
Shelter Stocks	$	3.48
Consumer Durables Stocks	$	2.38
Raw Materials Stocks	$	1.84

The Investments of Ivy Small Cap Value Fund
September 30, 2005
COMMON STOCKS	Shares			Value
Banks - 8.40%
Cathay General Bancorp		27,700	$	981,411
Central Pacific Financial Corp.		24,100		847,838
First Niagara Financial Group, Inc.	106,700			1,538,614
Gold Banc Corporation, Inc.	113,900			1,691,415
Taylor Capital Group, Inc.		20,700		783,288
Trustmark Corporation		55,500		1,545,398
Umpqua Holdings Corporation		40,600		986,377
Wintrust Financial Corporation		28,600		1,438,008
				9,812,349
Business Equipment and Services - 8.40%
Brink's Company (The)		61,000		2,504,660
Heidrick & Struggles International, Inc.*		49,600		1,604,808
Laidlaw International, Inc.	115,200			2,784,384
Lennox International Inc.		54,300		1,488,363
ProQuest Company*		18,100		655,220
RSA Security Inc.*		61,500		780,435
				9,817,870
Capital Equipment - 0.67%
Actuant Corporation, Class A*		16,800		786,240
Chemicals - Specialty - 1.05%
Airgas, Inc.		41,600		1,232,608
Coal - 1.72%
Foundation Coal Holdings, Inc.		52,200		2,007,090
Communications Equipment - 2.34%
Dycom Industries, Inc.*		55,100		1,114,122
Polycom, Inc.*		31,800		514,047
Tekelec*		52,800		1,103,784
				2,731,953
Computers - Peripherals - 4.76%
Borland Software Corporation*	167,100			971,686
Electronics for Imaging, Inc.*		77,800		1,785,121
Imation Corp.		20,000		857,400
Novatel Wireless, Inc.*		58,100		838,964
TIBCO Software Inc.*	132,529			1,105,955
				5,559,126
Construction Materials - 1.03%
Walter Industries, Inc.		24,500		1,198,540
Containers - 3.10%
AptarGroup, Inc.		18,300		911,523
Jarden Corporation*		54,750		2,248,582
Packaging Corporation of America		24,100		467,781
				3,627,886
Electronic Components - 2.06%
Axcelis Technologies, Inc.*		97,800		510,027
Brooks Automation, Inc.*		32,900		438,392
Integrated Device Technology, Inc.*		47,000		504,545
Thomas & Betts Corporation*		27,700		953,157
				2,406,121
Finance Companies - 1.00%
Allmerica Financial Corporation*		28,400		1,168,376
Food and Related - 1.83%
Chiquita Brands International Inc.		29,000		810,550
Hain Celestial Group, Inc. (The)*		38,900		753,493
Lance, Inc.		32,700		570,451
				2,134,494
Forest and Paper Products - 1.92%
Bowater Incorporated		36,800		1,040,336
OfficeMax Incorporated		38,100		1,206,627
				2,246,963
Health Care - General - 4.43%
Amedisys, Inc.*		17,800		694,022
dj Orthopedics, Inc.*		52,382		1,515,935
PolyMedica Corporation		28,000		977,340
Sybron Dental Specialties, Inc.*		48,000		1,995,840
				5,183,137
Homebuilders, Mobile Homes - 0.37%
Fleetwood Enterprises, Inc.*		35,000		430,500
Hospital Supply and Management - 0.38%
LifePoint Hospitals, Inc.*		10,246		447,955
Hotels and Gaming - 3.58%
Gaylord Entertainment Company*		49,900		2,377,735
Kerzner International Limited*		20,900		1,160,995
Pinnacle Entertainment, Inc.*		35,300		647,049
				4,185,779
Household - General Products - 0.49%
Church & Dwight Co., Inc.		15,400		568,876
Household - Major Appliances - 0.96%
Briggs & Stratton Corporation		32,400		1,120,716
Insurance - Life - 1.21%
Universal American Financial Corp.*		62,400		1,420,536
Insurance - Property and Casualty - 1.80%
Max Re Capital Ltd.		85,200		2,109,978
Leisure Time Industry - 1.73%
K2 Inc.*		85,700		976,980
RC2 Corporation*		31,100		1,050,092
				2,027,072
Motor Vehicle Parts - 0.71%
Tenneco Automotive Inc.*		47,200		826,472
Motor Vehicles - 0.71%
Winnebago Industries, Inc.		28,500		825,645
Multiple Industry - 7.92%
Alpha Natural Resources, Inc.*		37,600		1,129,504
Aspen Insurance Holdings Limited		40,200		1,187,910
Diamond Foods, Inc.*		27,700		478,794
ITC Holdings Corp.		38,100		1,104,138
James River Group, Inc.*		15,400		272,272
K&F Industries Holdings, Inc.*		49,100		821,443
NorthWestern Corporation		53,300		1,608,328
Sunstone Hotel Investors, Inc.		23,400		570,726
TreeHouse Foods, Inc.*		34,800		935,424
U-Store-It Trust		56,600		1,147,282
				9,255,821
Non-Residential Construction - 1.93%
Washington Group International, Inc.*		41,900		2,255,268
Petroleum - Domestic - 2.46%
Comstock Resources, Inc.*		29,900		981,019
Whiting Petroleum Corporation*		43,300		1,898,272
				2,879,291
Petroleum - International - 0.87%
Vintage Petroleum, Inc.		22,200		1,013,652
Publishing - 2.91%
Banta Corporation		48,000		2,442,720
PRIMEDIA Inc.*	233,300			954,197
				3,396,917
Real Estate Investment Trust - 1.19%
HomeBanc Corp.		84,600		653,112
Trustreet Properties, Inc.		47,200		738,680
				1,391,792
Restaurants - 1.78%
Landry's Restaurants, Inc.		19,200		562,560
Lone Star Steakhouse & Saloon, Inc.		20,100		523,203
Triarc Companies, Inc.		59,200		994,560
				2,080,323
Retail - General Merchandise - 1.61%
BJ's Wholesale Club, Inc.*		35,900		998,020
Saks Incorporated*		18,100		334,850
Stage Stores, Inc.		20,550		550,329
				1,883,199
Retail - Specialty Stores - 5.34%
AnnTaylor Stores Corporation*		21,300		565,515
Finish Line, Inc. (The), Class A		62,400		908,856
Handleman Company		98,800		1,247,844
Linens 'n Things, Inc.*		63,000		1,682,100
Pier 1 Imports, Inc.		72,900		821,583
Sports Authority, Inc. (The)*		34,300		1,009,792
				6,235,690
Savings and Loans - 1.25%
Sterling Financial Corporation*		64,800		1,458,648
Security and Commodity Brokers - 2.99%
Affiliated Managers Group, Inc.*		31,400		2,273,988
National Financial Partners Corp.		27,000		1,218,780
				3,492,768
Steel - 0.79%
Lone Star Technologies, Inc.*		16,600		922,794
Timesharing and Software - 3.72%
Digitas Inc.*		74,100		840,294
FileNet Corporation*		29,500		822,607
Hyperion Solutions Corporation*		21,900		1,065,873
Manhattan Associates, Inc.*		39,800		920,773
Per-Se Technologies, Inc.*		33,900		699,188
				4,348,735
Utilities - Electric - 2.30%
Black Hills Corporation		19,900		863,063
PNM Resources, Inc.		63,700		1,826,279
				2,689,342
Utilities - Telephone - 1.38%
Dobson Communications Corporation, Class A*		87,200		669,260
UbiquiTel Inc.*	108,300			946,542
				1,615,802
TOTAL COMMON STOCKS - 93.09%			$	108,796,324
(Cost: $100,478,402)

SHORT-TERM SECURITIES	Principal Amount in Thousands
Security and Commodity Brokers - 2.57%
Greenwich Capital Holdings Inc. (Royal Bank of       Scotland PLC (The)),
3.87%, 10-3-05	$	3,001		3,000,355
Utilities - Electric - 3.14%
Wisconsin Electric Power Co.,
3.88%, 10-3-05		3,675		3,674,208
TOTAL SHORT-TERM SECURITIES - 5.71%				$6,674,563
(Cost: $6,674,563)
TOTAL INVESTMENT SECURITIES - 98.80%			$	115,470,887
(Cost: $107,152,965)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.20%				1,399,831
NET ASSETS - 100.00%			$	116,870,718

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, 2005
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $107,153) (Notes 1 and 3)	$	115,471
Receivables:
Investment securities sold		3,508
Fund shares sold		227
Dividends and interest		60
Prepaid and other assets		26
Total assets		119,292
LIABILITIES
Payable for investment securities purchased		1,987
Payable to Fund shareholders		152
Accrued management fee (Note 2)		81
Due to custodian		77
Accrued shareholder servicing (Note 2)		54
Accrued service fee (Note 2)		24
Accrued distribution fee (Note 2)		10
Accrued accounting services fee (Note 2)		5
Other		31
Total liabilities		2,421
Total net assets	$	116,871
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	88,150
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(453	)
Accumulated undistributed net realized gain                 on investment transactions		20,856
Net unrealized appreciation in value of investments		8,318
Net assets applicable to outstanding units of capital	$	116,871
Net asset value per share (net assets divided by shares outstanding):
Class A		$17.81
Class B		$17.42
Class C		$17.53
Class Y		$17.89
Capital shares outstanding:
Class A		4,360
Class B		372
Class C		506
Class Y		1,335

See Notes to Financial Statements.

Statement of Operations
     IVY SMALL CAP VALUE FUND
     For the Six Months Ended September 30, 2005
     (In Thousands)

INVESTMENT LOSS
Income (Note 1B):
Dividends	$	513
Interest and amortization		59
Total income		572
Expenses (Note 2):
Investment management fee		472
Shareholder servicing:
Class A		189
Class B		24
Class C		21
Class Y		18
Service fee:
Class A		77
Class B		8
Class C		10
Class Y		30
Distribution fee:
Class A		14
Class B		22
Class C		31
Accounting services fee		32
Audit fees		12
Custodian fees		6
Other		53
Total expenses		1,019
Net investment loss		(447	)
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments	10,336
Unrealized depreciation in value of investments during the period	(3,890		)
Net gain on investments		6,446
Net increase in net assets resulting from operations	$	5,999

See Notes to Financial Statements.

Statement of Changes in Net Assets
     IVY SMALL CAP VALUE FUND
     (In Thousands)
     

	For the six months ended				For the fiscal year ended
	September 30, 2005				March 31, 2005
INCREASE IN NET ASSETS
Operations:
Net investment loss		$	(447	)		$	(801	)
Realized net gain on investments			10,336				15,607
Unrealized depreciation			(3,890	)			(8,498	)
Net increase in net assets                       resulting from operations			5,999				6,308
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)
Realized gains on investment transactions:
Class A			(-	)			(3,850	)
Class B			(-	)			(279	)
Class C			(-	)			(418	)
Class Y			(-	)			(1,741	)
			(-	)			(6,288	)
Capital share transactions (Note 5)			7,263				10,682
Total increase			13,262				10,702
NET ASSETS
Beginning of period			103,609				92,907
End of period		$	116,871			$	103,609
Undistributed net investment loss		$	(453	)		$	(6	)

(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 year ended				For the fiscal period ended			For the fiscal year ended July 31,
	9-30-05				3-31-05				3-31-04			2003			2002			2001			2000
Net asset value,       beginning of period		$	16.88			$	16.68		$	13.02		$	12.25		$	15.05		$	11.47		$	11.20
Income (loss) from       investment operations:
Net investment             income (loss)			(0.06	)			(0.13	)		(0.08	)		(0.09	)		(0.08	)		(0.06	)		0.05
Net realized and             unrealized gain (loss)             on investments			0.99				1.52			3.76			1.74			(1.84	)		4.04			0.32
Total from investment       operations			0.93				1.39			3.68			1.65			(1.92	)		3.98			0.37
Less distributions from:
Net investment income			(0.00	)			(0.00	)		(0.00	)		(0.00	)*		(0.00	)		(0.00	)		(0.10	)
Capital gains			(0.00	)			(1.19	)		(0.02	)		(0.88	)		(0.88	)		(0.40	)		(0.00	)
Total distributions			(0.00	)			(1.19	)		(0.02	)		(0.88	)		(0.88	)		(0.40	)		(0.10	)
Net asset value,       end of period		$	17.81			$	16.88		$	16.68		$	13.02		$	12.25		$	15.05		$	11.47
Total return(1)			5.51	%			8.23	%		28.29	%		14.91	%	- -13.27		%		35.18	%		3.74	%
Net assets, end of period       (in millions)			$78				$66			$65			$59			$53			$55			$31
Ratio of expenses to       average net assets       including voluntary       expense waiver			1.81	%(2)			1.76	%		1.65	%(2)(3)		1.53	%		1.27	%		1.40	%		1.40	%
Ratio of net investment income       (loss) to average net       assets including voluntary       expense waiver			- -0.78	%(2)			- -0.79	%		- -0.76	%(2)(3)		- -0.82	%		- -0.57	%		- -0.56	%		0.63	%
Ratio of expenses to average       net assets excluding       voluntary expense waiver			NA				NA			NA			1.53	%		1.37	%		1.51	%		1.71	%
Ratio of net investment income       (loss) to average net assets       excluding voluntary       expense waiver			NA				NA			NA			- -0.82	%		- -0.67	%		- -0.67	%		0.32	%
Portfolio turnover rate			88	%			124	%		27	%		54	%		37	%		38	%		169	%

*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 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 August 1, 2003 up to the time of the 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				For the fiscal year ended			For the period from 12-8-03(1) to
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	16.59		$	16.61		$	15.27
Income (loss) from investment operations:
Net investment loss			(0.14	)		(0.23	)		(0.05	)
Net realized and unrealized             gain on investments			0.97			1.40			1.41
Total from investment operations			0.83			1.17			1.36
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(1.19	)		(0.02	)
Total distributions			(0.00	)		(1.19	)		(0.02	)
Net asset value, end of period		$	17.42		$	16.59		$	16.61
Total return			5.00	%		6.92	%		8.93	%
Net assets, end of period (in millions)			$6			$5			$1
Ratio of expenses to average net assets			2.84	%(2)		3.02	%		3.79	%(2)
Ratio of net investment loss to       average net assets			- -1.80	%(2)		- -1.88	%		- -2.93	%(2)
Portfolio turnover rate			88	%		124	%		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				For the fiscal year ended			For the period from 12-8-03(1) to
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	16.67		$	16.63		$	15.27
Income (loss) from investment operations:
Net investment loss			(0.12	)		(0.19	)		(0.05	)
Net realized and unrealized             gain on investments			0.98			1.42			1.43
Total from investment operations			0.86			1.23			1.38
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(1.19	)		(0.02	)
Total distributions			(0.00	)		(1.19	)		(0.02	)
Net asset value, end of period		$	17.53		$	16.67		$	16.63
Total return			5.16	%		7.28	%		9.06	%
Net assets, end of period (in millions)			$9			$8			$2
Ratio of expenses to average net assets			2.55	%(2)		2.65	%		2.83	%(2)
Ratio of net investment loss to       average net assets			- -1.52	%(2)		- -1.53	%		- -2.00	%(2)
Portfolio turnover rate			88	%		124	%		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				For the fiscal year ended			For the period from 12-8-03(1) to
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	16.92		$	16.68		$	15.27
Income (loss) from investment operations:
Net investment loss			(0.03	)		(0.10	)		(0.04	)
Net realized and unrealized             gain on investments			1.00			1.53			1.47
Total from investment operations			0.97			1.43			1.43
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(1.19	)		(0.02	)
Total distributions			(0.00	)		(1.19	)		(0.02	)
Net asset value, end of period		$	17.89		$	16.92		$	16.68
Total return			5.73	%		8.48	%		9.38	%
Net assets, end of period (in millions)			$24			$25			$25
Ratio of expenses to average net assets			1.41	%(2)		1.53	%		1.60	%(2)
Ratio of net investment loss to       average net assets			- -0.39	%(2)		- -0.56	%		- -0.82	%(2)
Portfolio turnover rate			88	%		124	%		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, 2005, Ivy Value Fund had net assets totaling $77,096,197 invested in a
diversified portfolio of:

98.40%	Common Stocks
1.48%	Cash and Cash Equivalents
0.12%	Preferred Stock

As a shareholder of the Fund, for every $100 you had invested on September 30, 2005,
your Fund owned:

Financial Services Stocks	$	28.39
Energy Stocks	$	16.00
Utilities Stocks	$	11.98
Technology Stocks	$	10.50
Consumer Nondurables Stocks	$	6.44
Consumer Services Stocks	$	4.57
Multi-Industry Stocks	$	4.22
Health Care Stocks	$	3.76
Business Equipment and Services Stocks	$	2.86
Raw Materials Stocks	$	2.78
Retail Stocks	$	2.43
Shelter Stocks	$	1.97
Cash and Cash Equivalents	$	1.48
Transportation Stocks	$	1.39
Capital Goods Stocks	$	1.11
Preferred Stock	$	0.12

The Investments of Ivy Value Fund
September 30, 2005
COMMON STOCKS	Shares		Value
Aircraft - 2.28%
Lockheed Martin Corporation	28,800	$	1,757,952
Aluminum - 0.48%
Alcoa Incorporated (A)	15,300		373,626
Banks - 9.35%
Bank of America Corporation	55,956		2,355,748
Citigroup Inc.	47,213		2,149,136
Mellon Financial Corporation	43,100		1,377,907
Wachovia Corporation	12,050		573,460
Wells Fargo & Company	12,900		755,553
			7,211,804
Beverages - 1.96%
Diageo plc, ADR (A)	12,950		751,230
Molson Coors Brewing Company, Class B (A)	11,900		761,719
			1,512,949
Broadcasting - 1.52%
Viacom Inc., Class B	35,400		1,168,554
Business Equipment and Services - 2.86%
ARAMARK Corporation, Class B	44,100		1,177,911
Waste Management, Inc. (A)	36,000		1,029,960
			2,207,871
Capital Equipment - 1.11%
Illinois Tool Works Inc.	10,440		859,525
Chemicals - Petroleum and Inorganic - 0.70%
du Pont (E.I.) de Nemours and Company	13,750		538,587
Chemicals - Specialty - 1.60%
Air Products and Chemicals, Inc. (A)	6,200		341,868
Scotts Miracle-Gro Company (The)	10,100		888,093
			1,229,961
Communications Equipment - 0.99%
Cisco Systems, Inc.*	42,500		761,812
Computers - Main and Mini - 0.70%
International Business Machines Corporation	6,750		541,485
Computers - Peripherals - 5.49%
Lexmark International, Inc., Class A (A)*	9,200		561,660
Microsoft Corporation	36,400		936,390
Oracle Corporation*	97,200		1,204,794
Symantec Corporation (A)*	67,500		1,528,537
			4,231,381
Cosmetics and Toiletries - 0.78%
NBTY, Inc.*	25,500		599,250
Electronic Components - 1.04%
Intel Corporation (A)	32,500		800,962
Finance Companies - 5.54%
Fannie Mae	43,700		1,958,634
Freddie Mac	40,900		2,309,214
			4,267,848
Food and Related - 1.35%
J.M. Smucker Company (The)	21,400		1,038,756
Furniture and Furnishings - 1.97%
Masco Corporation	49,500		1,518,660
Health Care - Drugs - 1.58%
Pfizer Inc.	48,700		1,216,039
Health Care - General - 2.18%
Da Vita Inc.*	24,800		1,142,536
Wyeth	11,600		536,732
			1,679,268
Insurance - Life - 0.52%
UnumProvident Corporation	19,500		399,750
Insurance - Property and Casualty - 5.98%
Allstate Corporation (The)	28,600		1,581,294
Assurant, Inc.	36,000		1,370,160
St. Paul Companies, Inc. (The)	37,052		1,662,523
			4,613,977
Leisure Time Industry - 1.27%
Cendant Corporation	47,400		978,336
Motion Pictures - 1.20%
News Corporation Limited, Class A	59,100		921,369
Multiple Industry - 4.22%
General Electric Company	79,300		2,670,031
NRG Energy, Inc.*	13,700		583,620
			3,253,651
Petroleum - International - 16.00%
Burlington Resources Inc. (A)	16,700		1,358,044
ChevronTexaco Corporation	47,500		3,074,675
ConocoPhillips (A)	21,300		1,489,083
Devon Energy Corporation (A)	29,400		2,018,016
Exxon Mobil Corporation	69,206		4,397,349
			12,337,167
Publishing - 0.58%
Gannett Co., Inc.	6,550		450,836
Railroad - 1.39%
Union Pacific Corporation	14,900		1,068,330
Retail - Food Stores - 0.25%
Rite Aid Corporation*	49,600		192,448
Retail - General Merchandise - 2.18%
Dollar General Corporation	39,050		716,177
Family Dollar Stores, Inc.	48,600		965,682
			1,681,859
Security and Commodity Brokers - 7.00%
Marsh & McLennan Companies, Inc. (A)	34,000		1,033,260
Merrill Lynch & Co., Inc.	10,500		644,175
Morgan (J.P.) Chase & Co.	65,002		2,205,518
Morgan Stanley (A)	14,140		762,712
Prudential Financial, Inc.	11,150		753,294
			5,398,959
Tobacco - 2.35%
Altria Group, Inc.	24,600		1,813,266
Utilities - Electric - 4.98%
Dominion Resources, Inc. (A)	12,200		1,050,908
Exelon Corporation	20,600		1,100,864
NiSource Inc.	16,200		392,850
PPL Corporation	40,000		1,293,200
			3,837,822
Utilities - Gas and Pipeline - 1.14%
Enbridge Inc.	27,600		880,992
Utilities - Telephone - 5.86%
Iowa Telecommunications Services, Inc.	44,700		751,854
SBC Communications Inc.	50,800		1,217,676
Sprint Nextel Corporation (A)	45,700		1,086,746
Verizon Communications Inc.	22,700		742,063
Vodafone Group Plc, ADR	27,850		723,265
			4,521,604
TOTAL COMMON STOCKS - 98.40%		$	75,866,656
(Cost: $67,554,087)
PREFERRED STOCK - 0.12%
Finance Companies
Federal National Mortgage Association, 5.375%, Convertible	1	$	91,600
(Cost: $100,000)

SHORT-TERM SECURITY - 1.26%	Principal Amount in Thousands
Utilities - Electric
Wisconsin Electric Power Co.,
3.88%, 10-3-05	$	971	$	970,791
(Cost: $970,791)
TOTAL INVESTMENT SECURITIES - 99.78%			$	76,929,047
(Cost: $68,624,878)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.22%				167,150
NET ASSETS - 100.00%			$	77,096,197

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, 2005 (See Note 6 to financial statements):
	Underlying Security	Contracts Subject to Call	Expiration Month/ Exercise Price	Premium Received			Market Value
	Alcoa Incorporated	153	November/29		$	4,590	$	151
	Burlington Resources Inc.	31	October/80			5,617		9,300
	ConocoPhillips	35	November/75			3,745		4,550
	Dominion Resources, Inc.	30	October/80			3,510		19,500
	Devon Energy Corporation	41	October/62.5			2,788		27,388
	Intel Corporation	75	October/27.5			2,910		300
	Marsh & McLennan       Companies, Inc.	139	October/30			3,336		11,120
	Morgan Stanley	75	November/57			3,150		3,186
	Sprint Nextel Corporation	225	November/27.5			7,650		1,125
	Waste Management, Inc.	137	October/30			2,945		1,370
					$	40,241	$	77,990
In addition to the above written call options, the following written put options were outstanding as of September 30, 2005 (See Note 6 to financial statements):
	Underlying Security	Contracts Subject to Put	Expiration Month/ Exercise Price	Premium Received			Market Value
	Air Products and Chemicals, Inc.	35	December/50		$	1,680	$	1,750
	Diageo plc, ADR	39	October/55			2,462		975
	Lexmark International, Inc.,       Class A	31	October/60			4,092		3,100
	Symantec Corporation	184	November/18.5			3,680		920
		173	October/20			4,370		865
		173	October/18.5			8,131		138
	Molson Coors Brewing       Company, Class B	29	October/55			2,117		145
					$	26,532	$	7,893
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 VALUE FUND
     September 30, 2005
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $68,625) (Notes 1 and 3)	$	76,929
Receivables:
Fund shares sold		272
Dividends and interest		118
Investment securities sold		2
Prepaid and other assets		21
Total assets		77,342
LIABILITIES
Outstanding written options - at value (premium received - $67) (Note 6)		86
Accrued management fee (Note 2)		45
Payable to Fund shareholders		31
Accrued shareholder servicing (Note 2)		26
Accrued service fee (Note 2)		16
Due to custodian		14
Accrued accounting services fee (Note 2)		4
Accrued distribution fee (Note 2)		4
Other		20
Total liabilities		246
Total net assets	$	77,096
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	69,996
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		52
Accumulated undistributed net realized loss                 on investment transactions		(1,237	)
Net unrealized appreciation in value of investments		8,285
Net assets applicable to outstanding units of capital	$	77,096
Net asset value per share (net assets divided by shares outstanding):
Class A	$16.51
Class B	$16.41
Class C	$16.45
Class Y	$16.51
Capital shares outstanding:
Class A		3,145
Class B		227
Class C		215
Class Y		1,085

See Notes to Financial Statements.

Statement of Operations
     IVY VALUE FUND
     For the Six Months Ended September 30, 2005
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $1)	$	783
Interest and amortization		31
Total income		814
Expenses (Note 2):
Investment management fee		253
Shareholder servicing:
Class A		88
Class B		9
Class C		8
Class Y		15
Service fee:
Class A		55
Class B		4
Class C		4
Class Y		25
Accounting services fee		23
Distribution fee:
Class A		3
Class B		12
Class C		12
Audit fees		12
Custodian fees		7
Other		44
Total expenses		574
Net investment income		240
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		2,954
Realized net loss on purchased options		(30	)
Realized net gain on written options		123
Realized net loss on foreign currency transactions		(-	)*
Realized net gain on investments		3,047
Unrealized depreciation in value of securities during the period		(897	)
Unrealized depreciation in value of written options during the period		(33	)
Unrealized depreciation in value of investments during the period		(930	)
Net gain on investments		2,117
Net increase in net assets resulting from operations	$	2,357

*Not shown due to rounding.

See Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended
	September 30, 2005				March 31, 2005
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income		$	240			$	734
Realized net gain on investments			3,047				9,988
Unrealized depreciation			(930	)			(1,316	)
Net increase in net assets resulting                       from operations			2,357				9,406
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A			(159	)			(461	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(91	)			(210	)
Realized gains on investment transactions:
Class A			(-	)			(-	)
Class B			(-	)			(-	)
Class C			(-	)			(-	)
Class Y			(-	)			(-	)
			(250	)			(671	)
Capital share transactions (Note 5)			8,585			(18,313		)
Total increase (decrease)			10,692				(9,578	)
NET ASSETS
Beginning of period			66,404				75,982
End of period		$	77,096			$	66,404
Undistributed net investment income		$	52			$	62

(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 six months ended				For the fiscal year ended			For the fiscal period ended			For the fiscal year ended			For the period from 10-1-01 to			For the fiscal year ended September 30,
	9-30-05				3-31-05			3-31-04			7-31-03			7-31-02			2001			2000			1999
Net asset value,       beginning of period		$	16.04		$	14.54		$	12.54		$	11.81		$	12.59		$	15.08		$	15.14		$	13.88
Income (loss) from       investment       operations:
Net investment             income			0.05			0.15			0.08			0.12			0.08			0.09			0.06			0.15
Net realized and             unrealized gain             (loss) on             investments			0.48			1.48			1.98			0.72			(0.78	)		(2.50	)		0.13			1.26
Total from investment       operations			0.53			1.63			2.06			0.84			(0.70	)		(2.41	)		0.19			1.41
Less distributions from:
Net investment             income			(0.06	)		(0.13	)		(0.06	)		(0.11	)		(0.08	)		(0.08	)		(0.11	)		(0.15	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.13	)		(0.00	)
Tax return of capital			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.01	)		(0.00	)
Total distributions			(0.06	)		(0.13	)		(0.06	)		(0.11	)		(0.08	)		(0.08	)		(0.25	)		(0.15	)
Net asset value,       end of period		$	16.51		$	16.04		$	14.54		$	12.54		$	11.81		$	12.59		$	15.08		$	15.14
Total return(1)			3.27	%		11.21	%		16.32	%		7.23	%		- -5.72	%	- -15.97		%		1.26	%		10.13	%
Net assets, end of period       (in millions)			$52			$41			$52			$64			$58			$66			$81			$93
Ratio of expenses to       average net assets       including voluntary       expense waiver			1.57	%(2)		1.47	%		1.45	%(2)(3)		1.29	%		1.24	%(2)		1.24	%		1.24	%		1.21	%
Ratio of net investment       income to average       net assets including       voluntary expense       waiver			0.68	%(2)		0.92	%		0.61	%(2)(3)		1.05	%		0.70	%(2)		0.61	%		0.43	%		0.94	%
Ratio of expenses to       average net assets       excluding voluntary       expense waiver			NA			NA			1.52	%(2)(3)		1.50	%		1.41	%(2)		1.39	%		1.34	%		1.23	%
Ratio of net investment       income to average       net assets excluding       voluntary expense       waiver			NA			NA			0.53	%(2)(3)		0.84	%		0.53	%(2)		0.46	%		0.33	%		0.92	%
Portfolio turnover rate			16	%		81	%		86	%		123	%		95	%		148	%		180	%		79	%

(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 August 1, 2003 up to the time of the 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				For the fiscal year ended			For the period from 12-8-03(1) to
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	15.97		$	14.50		$	13.63
Income (loss) from investment operations:
Net investment income (loss)			(0.02	)		0.03			0.01
Net realized and unrealized gain             on investments			0.46			1.44			0.90
Total from investment operations			0.44			1.47			0.91
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		$	16.41		$	15.97		$	14.50
Total return			2.75	%		10.14	%		6.65	%
Net assets, end of period (in millions)			$4			$2			$1
Ratio of expenses to average net assets			2.53	%(2)		2.53	%		3.12	%(2)
Ratio of net investment income (loss)       to average net assets			- -0.28	%(2)		0.07	%		- -1.29	%(2)
Portfolio turnover rate			16	%		81	%		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				For the fiscal year ended			For the period from 12-8-03 (1) to
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	16.00		$	14.51		$	13.63
Income (loss) from investment operations:
Net investment income (loss)			(0.02	)		0.03			0.02
Net realized and unrealized gain             on investments			0.47			1.46			0.90
Total from investment operations			0.45			1.49			0.92
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		$	16.45		$	16.00		$	14.51
Total return			2.81	%		10.27	%		6.73	%
Net assets, end of period (in millions)			$3			$3			$1
Ratio of expenses to average net assets			2.45	%(2)		2.42	%		2.90	%(2)
Ratio of net investment income (loss)       to average net assets			- -0.19	%(2)		0.15	%		- -1.18	%(2)
Portfolio turnover rate			16	%		81	%		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				For the fiscal year ended			For the period from 12-8-03(1) to
	9-30-05				3-31-05			3-31-04
Net asset value, beginning of period		$	16.05		$	14.54		$	13.63
Income from investment operations:
Net investment income			0.07			0.17			0.01
Net realized and unrealized gain             on investments			0.46			1.49			0.95
Total from investment operations			0.53			1.66			0.96
Less distributions from:
Net investment income			(0.07	)		(0.15	)		(0.05	)
Capital gains			(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.07	)		(0.15	)		(0.05	)
Net asset value, end of period		$	16.51		$	16.05		$	14.54
Total return			3.34	%		11.44	%		7.05	%
Net assets, end of period (in millions)			$18			$20			$22
Ratio of expenses to average net assets			1.32	%(2)		1.34	%		1.48	%(2)
Ratio of net investment income to       average net assets			0.91	%(2)		1.09	%		0.35	%(2)
Portfolio turnover rate			16	%		81	%		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, 2005


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, net income and realized and unrealized capital gains or losses of its respective investments and other assets. 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 generally 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 at fair value as determined in goo d faith under procedures established by and under the general supervision of the Trust's Board of Trustees. In deciding whether to make fair value adjustments, each Fund reviews a variety of factors, including news relating to security specific events, developments in foreign markets, the performance of U.S. securities markets, and the performance of instruments trading in U.S. markets that represent foreign securities. In these cases, the Fund may utilize information from a pricing service to adjust closing market quotations of foreign securities to reflect what it believes to be fair value. 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.

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.

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

Ivy Investment Management Company (IICO), a wholly owned subsidiary of Waddell & Reed Financial, Inc. (WDR) , serves as the investment manager for each Fund. Prior to March 8, 2005, IICO was known as Waddell & Reed Ivy Investment Company. IICO 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, IICO 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 IICO'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 IICO, including a fee payable to IICO, 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 subadvisory agreement bet ween IICO and MFC with respect to Global Natural Resources Fund, including a fee payable to MFC, by IICO, 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 subadvisory agreement, September 9, 2004.

Cundill Investment Research Ltd. serves as subadvisor to Ivy Cundill Global Value Fund under an agreement with IICO 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 IICO. Henderson Investment Management Ltd., under a subadvisory 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 average 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 IICO and receives a fee 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) served as subadvisor to Ivy Small Cap Value Fund under an agreement with IICO and received a fee equal to, on an annual basis, 0.50% of the Fund's average net assets.

MetLife, Inc., (MetLife), the parent company of State Street Research & Management Company (State Street) entered into an agreement in the fall of 2004 to sell SSRM Holding, Inc., and its subsidiary, State Street, to BlackRock, Inc. The sale was completed in January 2005, and, when completed, resulted in the automatic termination of the former investment subadvisory agreement for that Fund. IICO proposed to the Board of Trustees, and the Board approved, a new subadvisory agreement with BlackRock Financial Management, Inc., an indirect wholly owned subsidiary of BlackRock, Inc. At a special meeting of shareholders held January 27, 2005, the new agreement was also approved by shareholders.

BlackRock Financial Management, Inc. receives a fee equal to, on an annual basis, 0.50% of the Fund's average net assets.

Templeton Investment Counsel, LLC serves as subadvisor to Ivy International Balanced Fund under an agreement with IICO 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, IICO provides certain accounting and pricing services for each Fund. As of March 18, 2003, IICO 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:

Accounting Services Fee
	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, IICO 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.

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 six month period ended September 30, 2005, IFDI received the following amounts in sales commissions and CDSC:

	Sales Commissions			CDSC
				Class A		Class B		Class C
Ivy Balanced Fund		$	84,475	$	427	$	1,713		$	324
Ivy Bond Fund			93,988		- -		1,784			269
Ivy Cash Reserves Fund			- -		- -		534			- -
Ivy Cundill Global Value Fund			1,564,804		74		38,675			14,420
Ivy Dividend Income Fund			182,806		- -		3,874			447
Ivy European Opportunities Fund			672,411		1,192		44,297			6,419
Ivy Global Natural Resources Fund			2,690,218		13,080		148,987			69,328
Ivy International Fund			12,338		- -		4,907			3
Ivy International Balanced Fund			417,899		46		3,891			570
Ivy International Value Fund			58,691		- -		3,118			33
Ivy Mortgage Securities Fund			692,287		1,909		4,300			3,864
Ivy Pacific Opportunities Fund			407,352		6		2,067			972
Ivy Real Estate Securities Fund			799,399		3,223		14,692			1,842
Ivy Small Cap Value Fund			268,587		457		4,981			575
Ivy Value Fund			185,945		1,445		2,766			312

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 six month period ended September 30, 2005, IFDI paid the following amounts:

Ivy Balanced Fund	$	96,124
Ivy Bond Fund		103,420
Ivy Cash Reserves Fund		- -
Ivy Cundill Global Value Fund		2,170,416
Ivy Dividend Income Fund		209,805
Ivy European Opportunities Fund		810,587
Ivy Global Natural Resources Fund		4,846,736
Ivy International Fund		16,511
Ivy International Balanced Fund		471,241
Ivy International Value Fund		93,454
Ivy Mortgage Securities Fund		794,826
Ivy Pacific Opportunities Fund		443,493
Ivy Real Estate Securities Fund		879,566
Ivy Small Cap Value Fund		302,420
Ivy Value Fund		199,125

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 attributable to that class. 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 a Distribution and Service Plan for Class B and Class C 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 IFDI a service fee in an amount not to exceed 0.25% of the Fund's average annual net assets attributable to that class. The fee is to be paid to reimburse IFDI for amounts it expends in connection with the provision of personal services to Fund shareholders and/or maintenance of shareholder accounts.

Under the Distribution and Service Plan for Class B shares and Class C 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 IFDI a distribution fee not to exceed 0.75% of the 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. The Class B Plan and the Class C Plan each permit IFDI to receive compensation, through the distribution fee for its distribution activities for that class.

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 attributable to that class 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 maintenance of Class Y shareholder accounts.

For Ivy Cundill Global Value Fund, Ivy Global Natural Resources Fund, Ivy International Value Fund and Ivy Pacific Opportunities Fund, IICO has agreed to reimburse a Fund's expenses, for the calendar year ended December 31, 2004, and for the following seven years, to the extent necessary to ensure that the Fund's annual operating expenses, when calculated at the Fund level, do not exceed 2.50% (0.85% through December 31, 2004, then 1.25% for Cash Reserves Fund) of the Fund's average net assets (excluding 12b-1 fees and certain other expenses.) During the six month period ended September 30, 2005, IICO reimbursed the Fund's expenses (in thousands) as shown in the following table:

Ivy Cash Reserves Fund $ 33

IICO has agreed to reimburse Ivy Mortgage Securities Fund's 12b-1 expenses applicable to Class A shares to ensure that the Fund's annual operating expenses for Class A shares do not exceed 0.95% through September 30, 2005. During the six month period ended September 30, 2005, IICO reimbursed Funds' expenses (in thousands) as shown in the following table:

Ivy Mortgage Securities Fund $ 238

In addition, IFDI and WRSCO have voluntarily agreed to waive sufficient Fund expenses to ensure that the total annual fund operating expenses 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%

During the six month period ended September 30, 2005, IICO reimbursed the Fund's expenses (in thousands) as shown:

Ivy Cundill Global Value Fund, Class Y	$	18
Ivy Global Natural Resources Fund, Class Y		32

These reimbursements serve to reduce distribution and service fees.

The Trust paid Directors' regular compensation of $112,136, which is included in other expenses.



NOTE 3 - Investment Securities Transactions

Investment securities transactions for the six month period ended September 30, 2005 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	$	24,110,539	$	13,131,550	$	206,448,920
Purchases of U.S. government securities		795,500		30,936,541		- -
Purchases of short-term securities		466,167,187		365,475,033		1,823,835,335
Proceeds from maturities and sales of investment       securities, excluding short-term and       U.S. government securities		28,603,954		8,760,843		20,854,534
Proceeds from maturities and sales of       U.S. government securities		1,409,488		29,839,329		- -
Proceeds from maturities and sales of       short-term securities		466,700,250		368,707,874		1,819,375,810

	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	$	12,902,748	$	117,722,072	$	1,255,534,503
Purchases of U.S. government securities		- -		- -		- -
Purchases of short-term securities		406,274,063		1,722,343,700		4,304,049,726
Proceeds from maturities and sales of investment       securities, excluding short-term and       U.S. government securities		4,627,718		75,124,884		825,297,036
Proceeds from maturities and sales of U.S.       government securities		- -		- -		- -
Proceeds from maturities and sales of short-term       securities		400,263,451		1,742,416,878		4,272,094,370

	Ivy International Fund		Ivy International Balanced Fund		Ivy International Value Fund
Purchases of investment securities, excluding       short-term and U.S. government securities	$	38,698,057	$	27,918,773	$	22,283,882
Purchases of U.S. government securities		- -		- -		- -
Purchases of short-term securities		259,143,738		699,701,045		404,744,418
Proceeds from maturities and sales of investment       securities, excluding short-term and       U.S. government securities		57,341,565		9,018,031		18,840,180
Proceeds from maturities and sales of       U.S. government securities		- -		- -		- -
Proceeds from maturities and sales of       short-term securities		259,608,382		701,603,320		403,422,000

		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		$	49,892,851	$	68,923,729	$	107,131,603
Purchases of U.S. government securities			218,434,688		- -		- -
Purchases of short-term securities			1,380,253,178		373,117,082		519,889,402
Proceeds from maturities and sales of investment       securities, excluding short-term and       U.S. government securities	19,044,138				42,148,453		55,007,263
Proceeds from maturities and sales of       U.S. government securities			203,703,466		- -		- -
Proceeds from maturities and sales of       short-term securities			1,394,807,284		377,300,539		520,147,390

	Ivy Small Cap Value Fund			Ivy Value Fund
Purchases of investment securities, excluding       short-term and U.S. government securities	$	93,502,683	$	21,146,873
Purchases of U.S. government securities		- -		- -
Purchases of short-term securities		427,362,949		239,350,114
Purchases of options		- -		105,124
Proceeds from maturities and sales of investment       securities, excluding short-term and       U.S. government securities		93,200,173		11,584,922
Proceeds from maturities and sales of       U.S. government securities		- -		- -
Proceeds from maturities and sales of       short-term securities		423,114,533		240,485,000
Proceeds from options		- -		75,238

For Federal income tax purposes, cost of investments owned at September 30, 2005 and the related unrealized appreciation (depreciation) were as follows:

	Cost		Appreciation		Depreciation		Aggregate Appreciation (Depreciation)
Ivy Balanced Fund	$	88,678,627	$	10,622,709	$	1,492,494	$	9,130,215
Ivy Bond Fund		57,199,907		202,500		639,800		(437,300	)
Ivy Cash Reserves Fund		5,188,458		-		-		- -
Ivy Cundill Global Value Fund		624,936,440		85,389,661		8,917,419		76,472,242
Ivy Dividend Income Fund		56,962,944		11,315,648		823,646		10,492,002
Ivy European Opportunities Fund		240,740,191		64,993,908		9,153,605		55,840,303
Ivy Global Natural Resources Fund	1,743,119,611		406,004,387		27,459,520		378,544,867
Ivy International Fund		114,171,168		36,160,536		354,329		35,806,207
Ivy International Balanced Fund		107,223,914		19,439,953		1,886,572		17,553,381
Ivy International Value Fund		44,218,246		12,397,782		185,627		12,212,155
Ivy Mortgage Securities Fund		274,457,953		950,057		3,879,561		(2,929,504	)
Ivy Pacific Opportunities Fund		103,315,314		19,069,360		2,979,335		16,090,025
Ivy Real Estate Securities Fund		339,348,172		78,511,894		219,517		78,292,377
Ivy Small Cap Value Fund		107,202,028		11,071,371		2,802,512		8,268,859
Ivy Value Fund		68,726,444		10,852,123		2,649,520		8,202,603

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, 2005 and the related Capital Loss Carryover and Post-October activity were as follows:

	Ivy Balanced Fund				Ivy Bond Fund			Ivy Cash Reserves Fund
Net ordinary income		$	1,130,450		$	1,379,097		$	53,041
Distributed ordinary income			1,108,112			1,354,137			51,821
Undistributed ordinary income			51,428	*		29,817	*		7,040	*
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			Ivy European Opportunities Fund
Net ordinary income		$	230,382	$	240,855		$	-
Distributed ordinary income			1,291,233		346,502			91,085
Undistributed ordinary income			229,115		23,999	*		-
Realized long-term capital gains			758,807		138,492			-
Distributed long-term capital gains			-		2,423			-
Undistributed long-term capital gains			758,807		138,435			-
Capital loss carryover			-		-			-
Post-October losses deferred			-		-		52,629

	Ivy Global Natural Resources Fund			Ivy International Fund		Ivy International Balanced Fund
Net ordinary income		$	75,812,078	$	- -	$	1,270,583
Distributed ordinary income			142,978		- -		1,480,880
Undistributed ordinary income			75,808,139		- -		258,739	*
Realized long-term capital gains			4,114,584		- -		2,125,614
Distributed long-term capital gains			- -		- -		412,844
Undistributed long-term capital gains			4,114,584		-		1,712,770
Capital loss carryover			-		-		- -
Post-October losses deferred			163,319	75,328			- -

	Ivy International Value Fund			Ivy Mortgage Securities Fund			Ivy Pacific Opportunities Fund
Net ordinary income		$	- -	$	7,805,417		$	- -
Distributed ordinary income			- -		7,735,756			- -
Undistributed ordinary income			- -		121,474	*		- -
Realized long-term capital gains			- -		- -			-
Distributed long-term capital gains			- -		-			- -
Undistributed long-term capital gains			- -		-			- -
Capital loss carryover			- -		-			- -
Post-October losses deferred			- -		67,640			- -

      *This entire amount was distributed prior to September 30, 2005.

	Ivy Real Estate Securities Fund			Ivy Small Cap Value Fund		Ivy Value Fund
Net ordinary income		$	8,543,008	$	363,331	$	738,395
Distributed ordinary income			7,952,101		1,389,478		671,473
Undistributed ordinary income			2,335,579		- -		67,374	*
Realized long-term capital gains			8,360,455		14,773,027		- -
Distributed long-term capital gains			5,273,969		4,898,757		- -
Undistributed long-term capital gains			4,425,377		11,023,106		- -
Capital loss carryover			- -		- -		- -
Post-October losses deferred			-		-		665

      *This entire amount was distributed prior to September 30, 2005.

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 European Opportunities Fund
March 31, 2009		$	- -	$	140,416	$	18,150,159
March 31, 2010			6,713,370		- -		29,411,986
March 31, 2011			- -		- -		12,058,021
Total carryover		$	6,713,370	$	140,416	$	59,620,166

	Ivy Global Natural Resources Fund			Ivy International Fund		Ivy International Value Fund
March 31, 2006		$	143,237	$	- -	$	- -
March 31, 2007			143,237		- -		- -
March 31, 2009			- -		122,715,107		1,028,432
March 31, 2010			167,845		126,565,198		8,128,361
March 31, 2011			- -		47,213,802		2,150,884
Total carryover		$	454,319	$	296,494,107	$	11,307,677

	Ivy Pacific Opportunities Fund			Ivy Value Fund
March 31, 2006		$	157,220	$	- -
March 31, 2007			157,220		- -
March 31, 2008			584,487		- -
March 31, 2009			2,024,330		- -
March 31, 2010			277,530		- -
March 31, 2011			- -		4,156,539
Total carryover		$	3,200,787	$	4,156,539

Ivy Developing Markets Fund was merged into Ivy Pacific Opportunities Fund as of June 16, 2003. 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, 2006 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 six months ended September 30, 2005 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			381			614			443
Class B			38			46			169
Class C			34			71			14
Class Y			88			2			NA
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A			15			37			40
Class B			- -			1			12
Class C			- -			1			1
Class Y			14			- -	*		NA
Shares redeemed:
Class A			(391	)		(203	)	(1,087		)
Class B			(20	)		(13	)		(276	)
Class C			(6	)		(19	)		(31	)
Class Y			(589	)		(3	)		NA
Increase (decrease) in outstanding capital shares			(436	)		534			(715	)
Value issued from sale of shares:
Class A		$	5,441		$	6,508		$	443
Class B			532			485			169
Class C			479			749			14
Class Y			1,260			19			NA
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A			213			394			40
Class B			- -			13			12
Class C			- -			11			1
Class Y			196			1			NA
Value redeemed:
Class A		(5,565		)	(2,163		)	(1,087		)
Class B			(286	)		(133	)		(276	)
Class C			(89	)		(196	)		(31	)
Class Y		(8,393		)		(28	)		NA
Increase (decrease) in outstanding capital		$	(6,212	)	$	5,660		$	(715	)

      *Not shown due to rounding.

	Ivy Cundill Global Value Fund				Ivy Dividend Income Fund			Ivy European Opportunities Fund
Shares issued from sale of shares:
Class A			10,097			1,057			1,990
Class B			760			91			160
Class C			3,552			167			239
Class Y			263			6			44
Advisor Class			- -			NA			- -
Class I			- -			NA			NA
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A			- -			10			- -
Class B			- -			- -			- -
Class C			- -			- -			- -
Class Y			- -			- -	*		- -
Advisor Class			- -			NA			- -
Class I			- -			NA			NA
Shares redeemed:
Class A			(2,155	)		(266	)		(1,072	)
Class B			(210	)		(44	)		(234	)
Class C			(502	)		(93	)		(231	)
Class Y			(89	)		(6	)		(39	)
Advisor Class			(11	)		NA			(32	)
Class I			(4	)		NA			NA
Increase in outstanding capital shares			11,701			922			825
*Not shown due to rounding.
Value issued from sale of shares:
Class A		$	141,198		$	13,413		$	55,714
Class B			10,377			1,143			4,326
Class C			48,484			2,109			6,490
Class Y			3,710			74			1,237
Advisor Class			- -			NA			- -
Class I			- -			NA			NA
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A			- -			121			- -
Class B			- -			- -			- -
Class C			- -			- -			- -
Class Y			- -			4			- -
Advisor Class			- -			NA			- -
Class I			- -			NA			NA
Value redeemed:
Class A			(30,074	)		(3,311	)	(29,902		)
Class B			(2,857	)		(539	)		(6,261	)
Class C			(6,842	)		(1,157	)		(6,176	)
Class Y			(1,258	)		(78	)		(1,077	)
Advisor Class			(155	)		NA			(895	)
Class I			(50	)		NA			NA
Increase in outstanding capital		$	162,533		$	11,779		$	23,456

	Ivy Global Natural Resources Fund				Ivy International Fund			Ivy International Balanced Fund
Shares issued from sale of shares:
Class A			17,191			527			2,605
Class B			1,672			16			131
Class C			6,682			6			289
Class Y			1,307			- -	*		27
Advisor Class			- -			- -			NA
Class I			NA			- -			NA
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A			- -			- -			34
Class B			- -			- -			- -	*
Class C			- -			- -			1
Class Y			- -			- -			- -	*
Advisor Class			- -			- -			NA
Class I			NA			- -			NA
Shares redeemed:
Class A			(4,437	)		(893	)		(1,688	)
Class B			(448	)		(428	)		(28	)
Class C			(1,038	)		(53	)		(40	)
Class Y			(151	)		(1	)		(19	)
Advisor Class			(7	)		(-	)		NA
Class I			NA			(4	)		NA
Increase (decrease) in outstanding capital shares			20,771			(830	)		1,312
*Not shown due to rounding.
Value issued from sale of shares:
Class A		$	399,679		$	12,165		$	38,210
Class B			37,205			350			1,913
Class C			146,169			140			4,205
Class Y			30,257			5			397
Advisor Class			- -			- -			NA
Class I			NA			- -			NA
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A			- -			- -			502
Class B			- -			- -			4
Class C			- -			- -			14
Class Y			- -			- -			3
Advisor Class			- -			- -			NA
Class I			NA			- -			NA
Value redeemed:
Class A		(101,991		)		(21,094	)	(24,835		)
Class B			(9,687	)		(9,167	)		(405	)
Class C			(22,726	)		(1,169	)		(579	)
Class Y			(3,574	)		(20	)		(269	)
Advisor Class			(163	)		(-	)		NA
Class I			NA			(92	)		NA
Increase (decrease) in outstanding capital		$	475,169		$	(18,882	)	$	19,160

	Ivy International Value Fund				Ivy Mortgage Securities Fund			Ivy Pacific Opportunities Fund
Shares issued from sale of shares:
Class A			1,128			6,124			2,845
Class B			123			300			138
Class C			70			683			246
Class Y			20			209			77
Advisor Class			- -			NA			- -
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A			- -			368			- -
Class B			- -			12			- -
Class C			- -			22			- -
Class Y			- -			12			- -
Advisor Class			- -			NA			- -
Shares redeemed:
Class A			(202	)		(3,054	)		(515	)
Class B			(666	)		(37	)		(97	)
Class C			(79	)		(181	)		(76	)
Class Y			(5	)		(71	)		(30	)
Advisor Class			(2	)		NA			(1	)
Increase in outstanding capital shares			387			4,387			2,587
Value issued from sale of shares:
Class A		$	13,588		$	65,847		$	31,970
Class B			1,390			3,220			1,453
Class C			813			7,348			2,627
Class Y			244			2,248			873
Advisor Class			- -			NA			- -
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A			- -			3,959			- -
Class B			- -			126			- -
Class C			- -			239			- -
Class Y			- -			131			- -
Advisor Class			- -			NA			- -
Value redeemed:
Class A			(2,445	)	(32,797		)		(5,687	)
Class B			(7,473	)		(402	)		(995	)
Class C			(894	)		(1,944	)		(810	)
Class Y			(67	)		(769	)		(338	)
Advisor Class			(27	)		NA			(8	)
Increase in outstanding capital		$	5,129		$	47,206		$	29,085

	Ivy Real Estate Securities Fund				Ivy Small Cap Value Fund			Ivy Value Fund
Shares issued from sale of shares:
Class A			2,653			897			926
Class B			152			84			88
Class C			174			94			61
Class Y			1,485			139			48
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A			37			- -			10
Class B			- -			- -			- -
Class C			- -	*		- -			- -
Class Y			49			- -			5
Shares redeemed:
Class A			(1,542	)		(457	)		(330	)
Class B			(86	)		(30	)		(18	)
Class C			(74	)		(54	)		(21	)
Class Y			(648	)		(247	)		(237	)
Increase in outstanding capital shares			2,200			426			532
Value issued from sale of shares:
Class A		$	53,332		$	15,475		$	15,014
Class B			3,023			1,407			1,409
Class C			3,487			1,597			975
Class Y			30,327			2,437			781
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A			772			- -			157
Class B			- -			- -			- -
Class C			5			- -			- -
Class Y			1,016			- -			91
Value redeemed:
Class A		(29,450		)	(7,937		)	(5,357		)
Class B			(1,677	)		(508	)		(287	)
Class C			(1,454	)		(912	)		(339	)
Class Y		(12,706		)	(4,296		)	(3,859		)
Increase in outstanding capital		$	46,675		$	7,263		$	8,585

      *Not shown due to rounding.

Transactions in capital stock for the fiscal year ended March 31, 2005 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			705			3,057			1,367
Class B			104			75			144
Class C			52			56			43
Class Y			292			1			NA
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A			36			62			37
Class B			- -	*		1			12
Class C			- -	*		1			1
Class Y			42			- -	*		NA
Shares redeemed:
Class A			(747	)		(554	)		(2,727	)
Class B			(22	)		(32	)		(1,844	)
Class C			(11	)		(15	)		(120	)
Class Y			(1,134	)		(-	)*		NA
Increase (decrease) in outstanding capital shares			(683	)		2,652			(3,087	)
Value issued from sale of shares:
Class A		$	9,634		$	32,423		$	1,367
Class B			1,406			801			144
Class C			710			592			43
Class Y			3,944			9			NA
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A			497			654			37
Class B			- -	*		12			12
Class C			1			7			1
Class Y			585			1			NA
Value redeemed:
Class A		(10,162		)		(5,869	)		(2,727	)
Class B			(301	)		(344	)		(1,844	)
Class C			(147	)		(160	)		(120	)
Class Y		(15,402		)		(-	)*		NA
Increase (decrease) in outstanding capital		$	(9,235	)	$	28,126		$	(3,087	)

      *Not shown due to rounding.

	Ivy Cundill Global Value Fund				Ivy Dividend Income Fund			Ivy European Opportunities Fund
Shares issued from sale of shares:
Class A			20,804			1,574			4,750
Class B			2,064			311			479
Class C			5,578			452			777
Class Y			733			36			132
Advisor Class			- -			NA			- -
Class I			- -			NA			- -
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A			84			22			2
Class B			- -			1			- -
Class C			- -			3			- -
Class Y			6			1			- -	*
Advisor Class			2			NA			- -	*
Class I			- -	*		NA			- -
Shares redeemed:
Class A			(2,298	)		(452	)		(2,328	)
Class B			(254	)		(82	)		(456	)
Class C			(367	)		(140	)		(395	)
Class Y			(190	)		(6	)		(159	)
Advisor Class			(26	)		NA			(44	)
Class I			(-	)*		NA			(1	)
Increase in outstanding capital shares			26,136			1,720			2,757
*Not shown due to rounding.
Value issued from sale of shares:
Class A		$	269,480		$	18,135		$	118,574
Class B			26,210			3,554			11,437
Class C			70,739			5,153			19,090
Class Y			9,350			413			3,295
Advisor Class			- -			NA			- -
Class I			- -			NA			- -
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A			1,105			266			60
Class B			- -			15			- -
Class C			- -			29			- -
Class Y			73			12			5
Advisor Class			26			NA			9
Class I			1			NA			- -
Value redeemed:
Class A			(30,012	)		(5,148	)		(52,016	)
Class B			(3,273	)		(925	)		(10,700	)
Class C			(4,678	)		(1,611	)		(9,153	)
Class Y			(2,455	)		(72	)		(3,757	)
Advisor Class			(331	)		NA			(1,063	)
Class I			(-	)*		NA			(19	)
Increase in outstanding capital		$	336,235		$	19,821		$	75,762

      *Not shown due to rounding.

	Ivy Global Natural Resources Fund				Ivy International Fund			Ivy International Balanced Fund
Shares issued from sale of shares:
Class A			33,383			1,339			2,674
Class B			3,977			42			202
Class C			11,806			18			269
Class Y			887			4			18
Advisor Class			- -			- -			NA
Class I			NA			- -			NA
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A			4			- -			67
Class B			- -			- -			1
Class C			- -			- -			2
Class Y			2			- -			1
Advisor Class			- -	*		- -			NA
Class I			NA			- -			NA
Shares redeemed:
Class A			(4,761	)		(1,840	)		(657	)
Class B			(683	)		(1,669	)		(13	)
Class C			(998	)		(146	)		(22	)
Class Y			(145	)		(1	)		(6	)
Advisor Class			(8	)		(-	)		NA
Class I			NA			(16	)		NA
Increase (decrease) in outstanding capital shares			43,464			(2,269	)		2,536
*Not shown due to rounding.
Value issued from sale of shares:
Class A		$	680,402		$	28,952		$	37,440
Class B			77,922			842			2,773
Class C			230,194			369			3,761
Class Y			18,430			100			250
Advisor Class			- -			- -			NA
Class I			NA			- -			NA
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A			88			- -			927
Class B			- -			- -			19
Class C			- -			- -			19
Class Y			36			- -			6
Advisor Class			- -	*		- -			NA
Class I			NA			- -			NA
Value redeemed:
Class A			(93,035	)		(39,902	)	(9,401		)
Class B			(13,133	)		(33,648	)		(179	)
Class C			(18,671	)		(2,939	)		(305	)
Class Y			(3,069	)		(22	)		(73	)
Advisor Class			(167	)		(-	)		NA
Class I			NA			(345	)		NA
Increase (decrease) in outstanding capital		$	878,997		$	(46,593	)	$	35,237

      *Not shown due to rounding.

	Ivy International Value Fund				Ivy Mortgage Securities Fund			Ivy Pacific Opportunities Fund
Shares issued from sale of shares:
Class A			838			8,854			3,999
Class B			146			620			475
Class C			75			1,151			558
Class Y			14			343			80
Advisor Class			- -			NA			- -
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A			- -			543			- -
Class B			- -			12			- -
Class C			- -			18			- -
Class Y			- -			15			- -
Advisor Class			- -			NA			- -
Shares redeemed:
Class A			(322	)		(4,069	)		(1,038	)
Class B			(897	)		(95	)		(443	)
Class C			(210	)		(162	)		(135	)
Class Y			(3	)		(103	)		(51	)
Advisor Class			(1	)		NA			(-	)*
Increase (decrease) in outstanding capital shares			(360	)		7,127			3,445
Value issued from sale of shares:
Class A		$	9,042		$	95,510		$	39,380
Class B			1,471			6,689			4,135
Class C			757			12,425			5,254
Class Y			151			3,707			807
Advisor Class			- -			NA			- -
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A			- -			5,841			- -
Class B			- -			125			- -
Class C			- -			193			- -
Class Y			- -			166			- -
Advisor Class			- -			NA			- -
Value redeemed:
Class A			(3,386	)	(43,810		)		(9,843	)
Class B			(8,744	)		(1,018	)		(3,806	)
Class C			(2,025	)		(1,742	)		(1,213	)
Class Y			(34	)		(1,109	)		(483	)
Advisor Class			(13	)		NA			(1	)
Increase (decrease) in outstanding capital		$	(2,781	)	$	76,977		$	34,230

      *Not shown due to rounding.

	Ivy Real Estate Securities Fund				Ivy Small Cap Value Fund			Ivy Value Fund
Shares issued from sale of shares:
Class A			6,630			3,066			1,569
Class B			473			273			144
Class C			500			367			146
Class Y			3,278			453			176
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A			270			221			16
Class B			16			15			- -
Class C			19			24			- -
Class Y			368			102			13
Shares redeemed:
Class A			(959	)		(3,279	)		(2,650	)
Class B			(42	)		(26	)		(22	)
Class C			(81	)		(28	)		(20	)
Class Y			(837	)		(613	)		(459	)
Increase (decrease) in outstanding capital shares			9,635			575			(1,087	)
Value issued from sale of shares:
Class A		$	116,982		$	50,982		$	23,975
Class B			8,297			4,499			2,179
Class C			8,735			6,037			2,186
Class Y			57,602			7,597			2,650
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A			5,050			3,786			258
Class B			294			256			- -
Class C			349			406			- -
Class Y			6,844			1,741			210
Value redeemed:
Class A			(16,753	)	(53,635		)	(41,999		)
Class B			(740	)		(433	)		(337	)
Class C			(1,417	)		(471	)		(304	)
Class Y			(13,675	)	(10,083		)	(7,131		)
Increase (decrease) in outstanding capital		$	171,568		$	10,682		$	(18,313	)

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:

	Number of Contracts			Premiums Received
Outstanding at March 31, 2005		333			$	28,207
Options written		2,123				129,982
Options terminated in closing purchase transactions		(96	)		(4,308		)
Options exercised		(323	)		(33,436		)
Options expired	(	1,096	)			(80,204	)
Outstanding at September 30, 2005		941			$	40,241

For Ivy Value Fund, transactions in put options written were as follows:

	Number of Contracts			Premiums Received
Outstanding at March 31, 2005		62			$	7,564
Options written		1,714				73,467
Options terminated in closing purchase transactions		(21	)			(819	)
Options exercised		(62	)		(7,564		)
Options expired	(	1,029	)		(46,116		)
Outstanding at September 30, 2005		664			$	26,532

NOTE 7 - In-Kind Redemptions

For an in-kind redemption a Fund may, under certain circumstances, distribute portfolio securities rather than cash for a redemption of Fund shares. The Fund recognizes a gain on in-kind redemptions to the extent that the value of the distributed securities on the date of the redemption exceeds the cost of those securities. Gains and losses realized from in-kind redemptions are not recognized for tax purposes but rather are reclassified from accumulated undistributed net realized loss to paid-in capital. During the fiscal year ended March 31, 2005, Ivy Value Fund realized $5,849,426 of net capital gains resulting from in-kind redemptions of $36,195,595.

NOTE 8 - Futures

The Trust may engage in buying and selling futures contracts. Upon entering into a futures contract, the Trust is required to deposit, in a segregated account, an amount of cash or United States Treasury Bills equal to a varying specified percentage of the contract amount. This amount is known as the initial margin. Subsequent payments (variation margins) are made or received by the Trust each day, dependent on the daily fluctuations in the value of the underlying debt security or index. These changes in the variation margins are recorded by the Trust as unrealized gains or losses. Upon the closing of the contracts, the cumulative net change in the variation margin is recorded as realized gain or loss. The Trust uses futures to attempt to reduce the overall risk of its investments.

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, 2005, and the related statements of operations for the six-month period then ended, the statements of changes in net assets for the six-month period then ended and the fiscal year ended March 31, 2005, and the 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 highlights of the Real Estate Securities Fund, Small Cap Value Fund and Value Fund for each of the periods ended July 31, 2003 and prior were audited by other auditors whose report, dated September 5, 2003, expressed an unqualified opinion on those financial highlights. The financial highlights of the Balanced Fund, Bond Fund, International Balanced Fund and Mortgage Securities Fund for each of the periods presented in the four-year period ended September 30, 2003 were audited by other auditors whose report, dated November 7, 2003, expressed an unqualified opinion on those 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 two-year period ended December 31, 2001 were audited by other auditors whose report, dated February 8, 2002, expressed an unqualif ied opinion on those 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. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall f inancial statement presentation. Our procedures included confirmation of securities owned as of September 30, 2005, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. 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, 2005, the results of their operations for the six-month period then ended, the changes in their net assets for the six-month period then ended and the fiscal year ended March 31, 2005, and their financial highlights for the periods presented (except as noted above in references to the reports of other auditors), in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP
Kansas City, Missouri
November 16, 2005

Renewal of Investment Management Agreements for the Ivy Funds

At a Meeting of the Board of Trustees of Ivy Funds held on August 30 and 31, 2005, the Trustees, including all of the Trustees who are not "interested persons" as defined in Section 2(a)(19) of the 1940 Act, approved the continuance of the existing management agreements between Ivy Investment Management Company (IICO) and the Funds. The existing management agreements considered were: (i) the Master Business Management and Investment Advisory Agreement between the Trust and IICO (with respect to the Ivy Cash Reserves Fund, Ivy Cundill Global Value Fund, Ivy European Opportunities Fund, Ivy International Fund, Ivy International Value Fund and Ivy Pacific Opportunities Fund); (ii) the Investment Management Agreement between the Trust and IICO (with respect to the Ivy Dividend Fund); (iii) the Investment Management Agreement between the Trust and IICO (with respect to the Ivy Balanced Fund, Ivy Bond Fund, Ivy International Balanced Fund, Ivy Mortgage Securities Fund, Ivy Real Estate Securities Fund, Iv y Small Cap Value Fund, Ivy Value Fund and Ivy Global Natural Resources Fund); and (iv) the Subadvisory Agreements between IICO and:

Henderson Investment Management Limited and Henderson Global Investors
    (North America) Inc. (Ivy European Opportunities Fund)

Cundill Investment Research Ltd. (Ivy Cundill Global Value Fund)

Advantus Capital Management, Inc. (Ivy Bond Fund, Ivy Mortgage Securities Fund,
    Ivy Real Estate Securities Fund)

Templeton Investment Counsel, LLC (Ivy International Balanced Fund)

BlackRock Financial Management, Inc. (Ivy Small Cap Value Fund)

Mackenzie Financial Corporation (Ivy Global Natural Resources Fund)

(each such subadviser referred to herein as a "Subadviser").

The Board's Independent Trustees were assisted in their review by independent legal counsel and met with such counsel separately from representatives of IICO. Independent legal counsel provided the Board with a memorandum that discussed the various factors that the Board should consider as part of its review of the various agreements, including, among other things, the nature and the quality of the services provided by IICO, profitability (including any fall-out benefits) from its relationship with the Funds, economies of scale, the role played by the Independent Trustees, and information on comparative fees and expenses. The Board also reviewed the nature and quality of the services provided by the subadvisors and considered the written responses and supplementary materials produced by IICO and each such Subadviser in response to a 15(c) due diligence request list submitted by the Independent Trustees' counsel prior to the meeting. Included in those responses, which had been provided to the Board prior to t he meeting, was a fund-by-fund profitability analysis prepared by IICO. The Board also received extensive materials on performance, expenses and comparable fund information from Lipper, Inc., an independent mutual fund rating service. Finally, the Independent Trustees received a report from two of the Independent Trustees who had been appointed to serve on an ad hoc contract review committee to conduct a preliminary review of all of this information prior to the meeting. The Independent Trustees discussed all of this material extensively among themselves and with their independent legal counsel, and then discussed these materials and related information with the full Board prior to the Board's final consideration of these issues. Based upon the examination by the Independent Trustees, the Board made the following considerations and conclusions.

Considerations with respect to each Fund

Ivy International Fund

The Board examined the investment performance of the Ivy International Fund, noting that the Fund had been in the 5th quintile for performance for every reporting period indicated in the Lipper materials. The Board also examined the performance of the Fund against its peers, as indicated in the Lipper materials for the one, three, five and seven year time period, as well against the Lipper International Large-Cap Core Index. The Board considered additional 15(c) response materials that IICO had provided, in which management asserted that the performance of the Fund recently had improved. In that regard, the Board considered the recent steps IICO has taken to enhance the Fund's performance, as well as provide additional reports to the Board in that regard. The Board further discussed management's proposal to merge the Ivy International Growth Fund, a series of Ivy Funds, Inc., into the Fund, and the possible benefits to each Fund's shareholders that such a merger might create. After extensively reviewing all of the performance information, including the fact that the Ivy International Growth Fund was proposed to be merged into the Fund, the Board concluded that the Fund's performance in this asset class appear to be improving, but should continue to be closely monitored by the Board.

The Board considered the expenses of the Fund and the cost of the services provided by IICO. The Board compared the Fund's expenses, including IICO's advisory fees, with the expenses and advisory fees of other investment advisers managing similarly situated funds. The Board then discussed the profitability to IICO in managing the Fund and how that profitability analysis was created. After considering all of this information, the Board concluded that the Fund's expenses appear to be appropriate at the current time, but that the Board should monitor those expenses closely.

The Board considered the nature, extent and quality of services provided to the Fund by IICO, taking into account the investment objective and strategy of the Fund and the knowledge the Board gained from their regular meetings with the IICO and personnel responsible for the management of the Fund, as well as the materials provided in connection with those meetings. In addition, the Board reviewed IICO's resources and key personnel, especially those who provide investment management services to the Fund. The Board also considered other services provided to the Fund by IICO, such as managing the quality of execution of portfolio transactions and the selection of broker-dealers for those transactions, monitoring adherence to the Fund's investment restrictions, producing reports, providing support services for the Board and Board committees, communicating with shareholders and overseeing the activities of other service providers, including monitoring compliance with various Fund policies and procedures and with applicable securities laws and regulations. The Board concluded that the nature and extent of the services provided by IICO are appropriate, that the quality of those services is consistent with quality norms in the industry and that the Fund is likely to benefit from the continued provision of those services.

The Board discussed whether IICO derives any other direct or indirect benefits from serving as investment adviser to the Fund. The Board considered benefits that accrue to IICO from its relationship with the Fund, including the fact that a variety of services are provided by affiliates of IICO, including distribution, shareholder servicing and transfer agency services. After full consideration of these and other factors, the Board concluded that neither IICO nor its affiliate received any additional direct benefits that would warrant re-consideration and/or preclude the Board from approving the continuation of the investment advisory contract with IICO.

The Board received and discussed information concerning whether economies of scale are being realized by the Fund and whether fee levels reflect those economies of scale for the benefit of the Fund's shareholders. The Board considered the current and anticipated asset levels of the Fund, the potential for growth in the Fund's assets, the breakpoint schedule in place, and how the proposed merger would affect each. The Board concluded that the current asset size of the Fund did not warrant reevaluating the fee schedule for the Fund at this time.

Ivy International Value Fund

The Board examined the investment performance of the Ivy International Value Fund, noting that the Fund had been in the 1st or 2nd performance quintile for the one, three, five and seven year periods, as reported in the Lipper materials. The Board also examined the performance of the Fund against its peers included in the Lipper materials for the one, three, five and seven year time period, as well against the Lipper International Large-Cap Core Index. The Board discussed the additional resources that IICO has devoted to the Fund and concluded that the Fund's performance in this asset class is acceptable.

The Board considered the expenses of the Fund and the cost of the services provided by IICO. The Board compared the Fund's expenses, including IICO's advisory fees with the expenses and advisory fees of other investment advisers managing similarly situated funds. They also considered the Fund's expenses in light of the proposed merger of the International and International Growth Funds. The Board discussed the profitability to IICO in managing the Fund and the derivation of that profitability analysis. After considering all of this information, the Board concluded that the Fund's expenses appear to be reasonable, particularly in light of IICO's profitability in managing the Fund.

The Board considered the nature, extent and quality of services provided to the Fund by IICO, taking into account the investment objective and strategy of the Fund and the knowledge the Board gained from their regular meetings with the IICO and personnel responsible for the management of the Fund, as well as the materials provided in connection with those meetings. In addition, the Board reviewed IICO's resources and key personnel, especially those who provide investment management services to the Fund. The Board also considered other services provided to the Fund by IICO, such as managing the quality of execution of portfolio transactions and the selection of broker-dealers for those transactions, monitoring adherence to the Fund's investment restrictions, producing reports, providing support services for the Board and Board committees, communicating with shareholders and overseeing the activities of other service providers, including monitoring compliance with various Fund policies and procedures and with applicable securities laws and regulations. The Board concluded that the nature and extent of the services provided by IICO are appropriate, that the quality of those services is consistent with quality norms in the industry and that the Fund is likely to benefit from the continued provision of those services.

The Board discussed whether IICO derives any other direct or indirect benefits from serving as investment adviser to the Fund. The Board considered benefits that accrue to IICO from its relationship with the Fund, including the fact that a variety of services are provided by affiliates of IICO, including distribution, shareholder servicing and transfer agency services. After full consideration of these and other factors, the Board concluded that neither IICO nor its affiliate received any additional direct benefits that would warrant re-consideration and/or preclude the Board from approving the continuation of the investment advisory contract with IICO.

The Board received and discussed information concerning whether economies of scale are being realized by the Fund and whether fee levels reflect those economies of scale for the benefit of the Fund's shareholders. The Board considered the current and anticipated asset levels of the Fund and the potential for growth in the Fund's assets. The Board concluded that the current asset size of the Fund did not warrant reevaluating the fee schedule for the Fund at this time.

Ivy Small Cap Value Fund

The Board examined the investment performance of the Ivy Small Cap Value Fund, noting that shareholders of the Fund had just recently authorized the appointment of BlackRock Financial Management, Inc. (BlackRock) as the Fund's sub-adviser. The Board also noted that the Fund had been in the 5th performance quintile for the one year period and the 4th quintile for the three year period, as reported in the Lipper materials. The Board also examined the performance of the Fund against its peers included in the Lipper materials for the one and three year time period, as well against the Lipper Small Cap Value Index. The Board discussed the long-term track record of the portfolio manager of the Fund, noting that the transition to BlackRock had occurred just seven months ago. Under those circumstances and given the Fund's performance history, the Board concluded that the Fund's performance in this asset class is acceptable.

The Board considered the expenses of the Fund and the cost of the services provided by IICO and BlackRock. The Board compared the Fund's expenses with the expenses and advisory fees of other similarly situated funds. The Board discussed the profitability to IICO in managing the Fund and the fact that IICO was exclusively responsible for paying BlackRock's fees. After considering all of this information, the Board concluded that the Fund's expenses appear to be reasonable.

The Board considered the nature, extent and quality of services provided to the Fund by IICO and BlackRock, taking into account the investment objective and strategy of the Fund and the knowledge the Board gained from their regular meetings with the BlackRock personnel directly responsible for the management of the Fund, as well as the materials provided in connection with those meetings. In addition, the Board reviewed the resources and key personnel of each organization, especially those who provide investment management services to the Fund. The Board considered other services provided to the Fund by IICO and BlackRock, such as managing the quality of execution of portfolio transactions and the selection of broker-dealers for those transactions, monitoring adherence to the Fund's investment restrictions, producing reports, providing support services for the Board and Board committees, communicating with shareholders and overseeing the activities of other service providers, including monitoring compliance with various Fund policies and procedures and with applicable securities laws and regulations. The Board concluded that the nature and extent of the services provided by each organization are appropriate, that the quality of those services is consistent with quality norms in the industry and that the Fund is likely to benefit from the continued provision of those services.

The Board discussed whether either organization derives any other direct or indirect benefits from serving the Fund. The Board considered benefits that accrue to each organization from its respective relationship with the Fund, including the fact that a variety of services are provided by affiliates of IICO, including distribution, shareholder servicing and transfer agency services. After full consideration of these and other factors, the Board concluded that none of IICO, BlackRock or any of their affiliates receive any additional direct benefits that would warrant re-consideration and/or preclude the Board from approving the continuation of the investment advisory contract with IICO or the investment sub-advisory contract with BlackRock.

The Board then received and discussed information concerning whether economies of scale are being realized by the Fund and whether fee levels reflect those economies of scale for the benefit of the Fund's shareholders. The Board considered the current and anticipated asset levels of the Fund and the potential for growth in the Fund's assets, including the fact that BlackRock believes that it might be appropriate for the Fund to close to new investors once a certain level of assets was reached. The Board concluded that the current asset size of the Fund did not warrant reevaluating the fee schedule for the Fund at this time.

Ivy Global Natural Resources Fund

The Board examined the investment performance of the Ivy Global Natural Resources Fund, noting that performance for the one year period had been in the 5th performance quintile, whereas three year performance was in the 3rd and five and seven year performance was in the top quintile. The Board discussed the recent investment strategy of the Fund's investment sub-adviser, Mackenzie Financial Corporation (MFC), and how that strategy had affected the recent performance of the Fund. They also took into account the fact that the Fund is a multi-diversified global product. Nevertheless, the Board noted that the Fund had achieved outstanding long-term returns and had been attracting assets, causing the Fund's breakpoints to become effective. The Board also examined the performance of the Fund against its peers included in the Lipper materials for the same time periods, as well against the Lipper Natural Resources Fund Index. After considering all of this information, the Board concluded that the Fund's performance in this asset class is acceptable.

The Board considered the expenses of the Fund and the cost of the services provided by IICO and MFC. The Board specifically noted that the Fund was in the 5th quintile for expense information, and compared the Fund's expenses with the expenses and advisory fees of other similarly situated funds. The Board further discussed how MFC's style impacts expenses. The Board then discussed the profitability to IICO in managing the Fund and the fact that IICO was exclusively responsible for paying MFC's fees. After considering all of this information, the Board concluded that the Fund's expenses appear to be reasonable.

The Board considered the nature, extent and quality of services provided to the Fund by IICO and MFC, taking into account the investment objective and strategy of the Fund and the knowledge the Board gained from their regular meetings with MFC personnel directly responsible for the management of the Fund, as well as the materials provided in connection with those meetings. In addition, the Board reviewed the resources and key personnel of each organization, especially those who provide investment management services to the Fund. The Board also considered other services provided to the Fund by IICO and MFC, such as managing the quality of execution of portfolio transactions and the selection of broker-dealers for those transactions, monitoring adherence to the Fund's investment restrictions, producing reports, providing support services for the Board and Board committees, communicating with shareholders and overseeing the activities of other service providers, including monitoring compliance with various Fund policies and procedures and with applicable securities laws and regulations. The Board concluded that the nature and extent of the services provided by each organization is appropriate, that the quality of those services is consistent with quality norms in the industry and that the Fund is likely to benefit from the continued provision of those services.

The Board discussed whether either organization derives any other direct or indirect benefits from serving as investment adviser or investment sub-adviser to the Fund. The Board considered benefits that accrue to each from its respective relationship with the Fund, including the fact that a variety of services are provided by affiliates of IICO, including distribution, shareholder servicing and transfer agency services. After full consideration of these and other factors, the Board concluded that none of IICO, MFC or any of their affiliate received any additional direct benefits that would warrant re-consideration and/or preclude the Board from approving the continuation of the investment advisory contract with IICO or the investment sub-advisory contract with MFC.

The Board received and discussed information concerning whether economies of scale are being realized by the Fund and whether fee levels reflect those economies of scale for the benefit of the Fund's shareholders. The Board discussed the fact that the asset-level breakpoints had become effective. The Board considered the current and anticipated asset levels of the Fund and the potential for growth in the Fund's assets. The Board concluded that the current asset size of the Fund did not warrant reevaluating the fee schedule or breakpoints for the Fund at this time.

Ivy Balanced Fund, Ivy Cash Reserves Fund, Ivy Dividend Income Fund, Ivy Pacific Opportunities Fund, Ivy Value Fund

The Board evaluated the performance of the advisory contracts with IICO for each of the remaining internally managed Funds based upon the information contained in the Lipper materials and the other materials. In that regard, the Board examined the investment performance of each Fund, including their short-term and long-term quintile rankings as reported in the Lipper materials. The Board also examined the performance of each Fund against their respective peers included in the Lipper materials, as well against the appropriate Lipper benchmark. The Board also considered the fact that the Board had met with the portfolio manager(s) of each such Fund during regularly scheduled meetings, during which they had had an opportunity to discuss all facets of each Fund, including performance. After further discussion, given each Fund's performance history, the Board concluded that each Fund's performance in their respective asset class is acceptable.

The Board considered the expenses of each Fund and the cost of the services provided by IICO. The Board compared each Fund's expenses with the expenses and advisory fees of other similarly situated funds as reported in the Lipper Reports. The Board then discussed the profitability to IICO in managing each Fund, as well as the derivation of that profitability analysis. After considering all of this information, the Board concluded that each Fund's expenses appear to be reasonable.

The Board next considered the nature, extent and quality of services provided to each Fund by IICO, taking into account the investment objective and strategy of each Fund and the knowledge the Board gained from their regular meetings with the personnel directly responsible for the management of the Fund, as well as the materials provided in connection with those meetings. In addition, the Board reviewed the resources and key personnel of IICO, especially those portfolio managers who provide investment management services to the Fund. The Board also considered other services provided to each Fund by IICO, such as managing the quality of execution of portfolio transactions and the selection of broker-dealers for those transactions, monitoring adherence to the Fund's investment restrictions, producing reports, providing support services for the Board and Board committees, communicating with shareholders and overseeing the activities of other service providers, including monitoring compliance with various Fund p olicies and procedures and with applicable securities laws and regulations. The Board concluded that the nature and extent of the services provided by IICO with respect to each Fund are appropriate, that the quality of those services is consistent with quality norms in the industry and that the Fund is likely to benefit from the continued provision of those services.

The Board next discussed whether IICO derives any other direct or indirect benefits from serving as investment adviser to each Fund. The Board considered benefits that accrue to IICO from its relationship with each respective Fund, including the fact that a variety of services are provided by affiliates of IICO, including distribution, shareholder servicing and transfer agency services. After full consideration of these and other factors, the Board concluded that neither IICO nor any of its affiliates receive any additional direct benefits that would warrant re-consideration and/or preclude the Board from approving the continuation of the investment advisory contract with IICO.

The Board finally received and discussed information concerning whether economies of scale are being realized by each Fund and whether fee levels reflect those economies of scale for the benefit of each Fund's respective shareholders. The Board considered the current and anticipated asset levels of each Fund and the potential for growth in each Fund's assets. The Board concluded that the current asset size of each Fund did not warrant reevaluating the fee schedule for any Fund at this time.

Ivy Bond Fund, Ivy Cundill Global Value Fund, Ivy European Opportunities Fund, Ivy International Balanced Fund, Ivy Mortgage Securities Fund, Ivy Real Estate Securities Fund

The Board evaluated the performance of the advisory contracts with IICO and the investment subadvisory contracts for each Subadviser for sub-advised Funds based upon the information contained in the Lipper materials and the due diligence materials that the Board had received from each Subadviser.

The Board first examined the investment performance of each such Fund, including their short-term and long-term quintile ranking, as reported in the Lipper materials. The Board also examined the performance of each Fund against the respective peers included in the Lipper materials, as well against the appropriate Lipper benchmark. The Board considered that it had met with the portfolio manager(s) of each such Fund during regularly scheduled meetings, during which they had had an opportunity to discuss all facets of the Fund, including performance. Under those circumstances and given each Fund's performance history, the Board concluded that each Fund's performance in their respective asset class is acceptable.

The Board next considered the expenses of each Fund and the cost of the services provided by IICO and the Subadviser responsible for the day-to-day management of that Fund. The Board compared each Fund's expenses with the expenses and advisory fees of other similarly situated funds. The Board then discussed the profitability to IICO in managing the Fund, the derivation of that profitability analysis and the fact that IICO was exclusively responsible for paying each Subadviser's fees. After considering all of this information, the Board concluded that the Fund's expenses appear to be reasonable.

The Board considered the nature, extent and quality of services provided to the Fund by IICO and each Subadviser, taking into account the investment objective and strategy of each Fund and the knowledge the Board gained from their regular meetings with the IICO and Subadviser personnel directly responsible for the management of the Fund, as well as the materials provided in connection with those meetings. In addition, the Board reviewed the resources and key personnel of each Subadviser organization. The Board also considered other services provided to the Fund by IICO and each Subadviser. The Board concluded that the nature and extent of the services provided by each IICO and each Subadviser for each Fund are appropriate, that the quality of those services is consistent with quality norms in the industry and that each Fund is likely to benefit from the continued provision of those services.

The Board discussed whether IICO and each Subadviser derives any other direct or indirect benefits from serving as investment adviser to the respective Fund. The Board considered benefits that accrue to each from its respective relationship with the Fund, including the fact that a variety of services are provided by affiliates of IICO, including distribution, shareholder servicing and transfer agency services. After full consideration of these and other factors, the Board concluded that none of IICO, any Subadviser or any of their affiliate received any additional direct benefits that would warrant re-consideration and/or preclude the Board from approving the continuation of the investment advisory contract with IICO or the investment sub-advisory contract with any Subadviser.

The Board received and discussed information concerning whether economies of scale are being realized by each Fund and whether fee levels reflect those economies of scale for the benefit of the Fund's shareholders. The Board considered the current and anticipated asset levels of each Fund and the potential for growth in the Fund's assets. The Board concluded that the current asset size of any Fund did not warrant reevaluating any Fund's fee schedule at this time.

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 www.sec.gov.

Proxy Voting Records

Information regarding how Ivy Funds voted proxies relating to portfolio securities during the most recent 12 month period ending June 30 is available on Form N-PX through the Ivy Funds' website at www.ivyfunds.com and on the SEC's website at www.sec.gov.

Quarterly Portfolio Schedule Information

A complete schedule of portfolio holdings for the first and third quarters of each fiscal year is filed with the Securities and Exchange Commission (SEC) on the Fund's Form N-Q. This form may be obtained in the following ways:

*   On the SEC's website at www.sec.gov.

*  For review and copy at the SEC's Public Reference Room in Washington, DC. Information
   on the operations of the Public Reference Room may be obtained by calling 1.800.SEC.0330.

*  On the Ivy Funds' website at 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. The Fund is generally required to withhold taxes unless you make a written election not to have taxes withheld. The election may be made on the distribution/withdrawal form provided by Waddell & Reed, Inc. which can be obtained from your Waddell & Reed representative or by submitting Internal Revenue Service Form W-4P. Once made, an election can be revoked by providing written notice to Waddell & Reed, Inc. If you elect not to have tax withheld you may be required to make payments of estimated tax. Penalties may be imposed by the IRS if withholding and estimated tax payments are not adequate.

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

Capital Appreciation Fund (formerly, Tax-Managed Equity Fund)

Core Equity Fund

Dividend Income Fund

Large Cap Growth Fund

Mid Cap Growth Fund

Small Cap Growth Fund

Small Cap Value Fund

Value Fund

Fixed Income Funds

Bond Fund

High Income Fund

Limited-Term Bond Fund

Mortgage Securities Fund

Municipal Bond Fund

Money Market Funds

Cash Reserves 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 Ivy Investment Management Company and distributed by its subsidiary, Ivy Funds Distributor, Inc.

Investors should consider the investment objectives, risks, charges and expenses of a fund carefully before investing. For a prospectus containing this and other information for the Ivy Funds, call your financial advisor or visit us online at www.ivyfunds.com. Please read the prospectus carefully before investing.

WRR3300SA (9-05)

ITEM 2. CODE OF ETHICS

Required in annual report only.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT

Required in annual report only.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Required in annual report only.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS

Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS.

See Item 1 Shareholder Report.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END

MANAGEMENT INVESTMENT COMPANIES

Not applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANIES AND AFFILIATED PURCHASERS

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant's board of directors.

ITEM 11. CONTROLS AND PROCEDURES.

(a)

The Registrant's Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, have concluded that such controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective and adequately designed to ensure that information required to be disclosed by the Registrant in its reports that it files or submits is accumulated and communicated to the Registrant's management, including the Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

(b)

There were no significant changes in the registrant's internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940, as amended) that occurred during the registrant's second fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

ITEM 12. EXHIBITS.

(a)(1) Required in annual report only.

(a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)).

Attached hereto as Exhibit 99.CERT.

(b) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)).

Attached hereto as Exhibit 99.906CERT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Ivy Funds

(Registrant)

By    /s/Kristen A. Richards

         Kristen A. Richards, Vice President and Secretary

Date: December 7, 2005

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 7, 2005

By    /s/Theodore W. Howard

         Theodore W. Howard, Treasurer and Principal Financial Officer

Date: December 7, 2005