Ivy Funds N-CSR Certified 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

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Ivy Funds

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(Exact name of registrant as specified in charter)

6300 Lamar Avenue, Overland Park, Kansas 66202

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(Address of principal executive offices) (Zip code)

Kristen A. Richards

6300 Lamar Avenue

Overland Park, Kansas 66202

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(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: March 31, 2008

ITEM 1. REPORTS TO STOCKHOLDERS.

Annual Report
March 31, 2008







Domestic Equity Funds

Ivy Dividend Income Fund

Ivy Small Cap Value Fund

Ivy Value Fund

Global and International Funds

Ivy Managed European/Pacific Fund

Ivy Managed International Opportunities Fund

Ivy Cundill Global Value Fund

Ivy European Opportunities Fund

Ivy International Balanced Fund

Ivy International Core Equity Fund

Ivy International Growth Fund

Ivy Pacific Opportunities Fund

Specialty Funds

Ivy Balanced Fund

Ivy Global Natural Resources Fund

Ivy Real Estate Securities Fund

Fixed-Income Funds

Ivy Bond Fund

Ivy Mortgage Securities Fund

CONTENTS

3	President's Letter
5	Illustration of Fund Expenses
15	Ivy Dividend Income Fund
34	Ivy Small Cap Value Fund
53	Ivy Value Fund
71	Ivy Managed European/Pacific Fund
87	Ivy Managed International Opportunities Fund
102	Ivy Cundill Global Value Fund
124	Ivy European Opportunities Fund
145	Ivy International Balanced Fund
170	Ivy International Core Equity Fund
190	Ivy International Growth Fund
210	Ivy Pacific Opportunities Fund
233	Ivy Balanced Fund
255	Ivy Global Natural Resources Fund
282	Ivy Real Estate Securities Fund
301	Ivy Bond Fund
330	Ivy Mortgage Securities Fund
358	Notes to Financial Statements
395	Report of Independent Registered Public Accounting Firm
396	Income Tax Information
407	Trustees and Officers
413	Annual Privacy Notice
414	Proxy Voting Information
415	Quarterly Portfolio Schedule Information
416	Householding Notice
417	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
     March 31, 2008
Dear Shareholder:

A recent study by Standard & Poor's found that the U.S. stock market experienced more daily price volatility at the start of calendar year 2008 than at any point since the 1930s. From our perspective, these do appear to be very challenging times for parts of the U.S. economy. At the same time, however, we are still seeing strong long-term global growth, benefiting many American companies, and your investments.

Enclosed is our report on Ivy Funds' operations for the recently completed fiscal year.

For the 12 months ended March 31, 2008, the S&P 500 Index fell 5.08 percent while the Lehman Brothers Aggregate Bond Index rose 7.67 percent, led by U.S. Treasuries. Despite an uncertain environment for stocks, we grew as an organization. Assets under management at Ivy Funds expanded to more than $27 billion as of the Funds' fiscal year end, nearly double the level of a year earlier.

We are very grateful for your enthusiastic support and your confidence in our ability to manage your assets. This, indeed, is a challenging time. Many economic negatives are on America's front porch: a level of price weakness and foreclosure activity in U.S. housing markets not seen since the Dust Bowl; a global credit crunch driven by an implosion of the subprime mortgage market; a U.S. dollar that is worth much less than just a few years ago; record-setting commodity prices, and the high probability of a recession in the coming months.

The positives are more subtle: exports are booming; the overall job market in the U.S. is still relatively healthy; farmers are enjoying great prices for corn; wheat and soybeans. Alternative energy and related technologies are booming and tourists are flocking to our shores to take advantage of our cheap currency to shop.

Financial conditions such as we have seen so far in 2008 are unusual, but they are not unprecedented. In fact, after the Panic of 1907 involving a Wall Street bank that speculated on copper, Congress created the Federal Reserve. We have the Fed's monetary policy system to thank for the substantial reductions in U.S. interest rates since September 2007. The Fed's moves have been designed to help offset contraction of financial credit.

Still, even with lower rates, for many people it is more difficult to buy a home or expand a consumer-focused business than it was just a year ago. As shown in the Economic Snapshot table on page four, the U.S. economy at March 31, 2008 is not in as good a shape as it was 12 months earlier. Inflation, oil prices and the unemployment rate are higher. Economic growth is weak.

Economic Snapshot
	3-31-2008			3-31-2007
U.S. unemployment rate		5.10	%		4.40	%
Inflation       (U.S. Consumer Price Index)		4.00	%		2.80	%
U.S. GDP		0.60	%		1.30	%
30-year fixed mortgage rate		5.63	%		6.13	%
Oil price per barrel	$	101.58		$	65.87

All government statistics shown are subject to periodic revision.

Source: Bloomberg, U.S. Department of Labor

The U.S. Consumer Price Index is the government's measure of the change in the retail cost of goods and services. Gross domestic product measures year-over-year changes in the output of goods and services. Mortgage rates shown reflect the average rate on a conventional loan with a 60-day lender commitment. Oil prices reflect the market price of West Texas intermediate grade crude.

As we look ahead, we recommend some caution, as we believe that the range of financial outcomes for investors is wide. Whoever holds the reigns of power in Congress and the White House after the November general election will have many long-term structural issues to address that are likely to have important economic, investment and tax implications. As always, we believe that maintaining a well-rounded portfolio is an essential element for securing your long-term financial future.

Our commitment

As investment managers, we are always mindful that we are managing other people's money. In this uncertain environment, we believe a very strong effort to manage risk takes precedence over the desire to maximize capital appreciation. With that approach in mind, we will strive to earn your continued confidence for many years to come.

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 tables are 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 March 31, 2008.

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 tables. 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 tables, a customer is charged 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 tables. Additional fees have the effect of reducing investment returns.

Hypothetical Example for Comparison Purposes

The second line for each share class in 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 tables 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 tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Ivy Dividend Income Fund Expenses
For the Six Months Ended       March 31, 2008	Beginning Account Value 9-30-07		Ending Account Value 3-31-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	920.00		1.33	%	$	6.43
Class B		1,000		915.70		2.29			11.02
Class C		1,000		916.20		2.10			10.06
Class E		1,000		915.40		2.12			10.15
Class I		1,000		921.50		0.96			4.61
Class Y		1,000		920.30		1.22			5.86
Based on 5% Return(2)
Class A	$	1,000	$	1,018.35		1.33	%	$	6.76
Class B		1,000		1,013.54		2.29			11.58
Class C		1,000		1,014.51		2.10			10.58
Class E		1,000		1,014.42		2.12			10.68
Class I		1,000		1,020.22		0.96			4.85
Class Y		1,000		1,018.90		1.22			6.16

Ivy Small Cap Value Fund Expenses
For the Six Months Ended       March 31, 2008	Beginning Account Value 9-30-07		Ending Account Value 3-31-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	861.40		1.78	%	$	8.28
Class B		1,000		856.30		2.84			13.18
Class C		1,000		857.30		2.56			11.89
Class E**		1,000		863.50		1.25			5.78
Class I		1,000		863.40		1.19			5.50
Class Y		1,000		863.20		1.39			6.43
Based on 5% Return(2)
Class A	$	1,000	$	1,016.08		1.78	%	$	8.97
Class B		1,000		1,010.82		2.84			14.28
Class C		1,000		1,012.18		2.56			12.88
Class E**		1,000		1,018.77		1.25			6.26
Class I		1,000		1,019.07		1.19			5.96
Class Y		1,000		1,018.06		1.39			6.96

See footnotes on page 14.

Ivy Value Fund Expenses
For the Six Months Ended       March 31, 2008	Beginning Account Value 9-30-07		Ending Account Value 3-31-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	861.90		1.55	%	$	7.17
Class B		1,000		857.70		2.59			11.98
Class C		1,000		858.50		2.46			11.43
Class E**		1,000		863.60		1.17			5.50
Class I		1,000		864.50		1.05			4.94
Class Y		1,000		862.90		1.30			6.05
Based on 5% Return(2)
Class A	$	1,000	$	1,017.26		1.55	%	$	7.77
Class B		1,000		1,012.07		2.59			12.98
Class C		1,000		1,012.68		2.46			12.38
Class E**		1,000		1,019.15		1.17			5.96
Class I		1,000		1,019.75		1.05			5.35
Class Y		1,000		1,018.48		1.30			6.56

Ivy Managed European/Pacific Fund Expenses
For the Six Months Ended       March 31, 2008	Beginning Account Value 9-30-07		Ending Account Value 3-31-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	862.00		0.76	%	$	3.54
Class B		1,000		857.50		1.64			7.62
Class C		1,000		857.70		1.54			7.15
Class E**		1,000		862.40		0.62			2.89
Class I		1,000		863.20		0.39			1.86
Class Y		1,000		862.10		0.65			3.07
Based on 5% Return(2)
Class A	$	1,000	$	1,021.18		0.76	%	$	3.84
Class B		1,000		1,016.79		1.64			8.27
Class C		1,000		1,017.30		1.54			7.77
Class E**		1,000		1,021.89		0.62			3.13
Class I		1,000		1,023.03		0.39			2.02
Class Y		1,000		1,021.75		0.65			3.34

See footnotes on page 14.

Ivy Managed International Opportunities Fund Expenses
For the Six Months Ended       March 31, 2008	Beginning Account Value 9-30-07		Ending Account Value 3-31-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	922.20		0.61	%	$	2.88
Class B		1,000		917.90		1.42			6.81
Class C		1,000		918.40		1.37			6.62
Class E**		1,000		922.10		0.50			2.40
Class I		1,000		923.70		0.27			1.35
Class Y		1,000		921.90		0.54			2.59
Based on 5% Return(2)
Class A	$	1,000	$	1,021.97		0.61	%	$	3.03
Class B		1,000		1,017.88		1.42			7.16
Class C		1,000		1,018.14		1.37			6.96
Class E**		1,000		1,022.52		0.50			2.53
Class I		1,000		1,023.65		0.27			1.42
Class Y		1,000		1,022.32		0.54			2.73

Ivy Cundill Global Value Fund Expenses
For the Six Months Ended       March 31, 2008	Beginning Account Value 9-30-07		Ending Account Value 3-31-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	927.10		1.64	%	$	7.90
Class B		1,000		923.80		2.53			12.22
Class C		1,000		924.10		2.32			11.16
Class E		1,000		923.60		2.47			11.93
Class I		1,000		929.50		1.22			5.88
Class Y		1,000		929.30		1.20			5.79
Advisor Class**		1,000		930.80		1.07			5.12
Based on 5% Return(2)
Class A	$	1,000	$	1,016.79		1.64	%	$	8.27
Class B		1,000		1,012.33		2.53			12.78
Class C		1,000		1,013.42		2.32			11.68
Class E		1,000		1,012.63		2.47			12.48
Class I		1,000		1,018.90		1.22			6.16
Class Y		1,000		1,018.98		1.20			6.06
Advisor Class**		1,000		1,019.67		1.07			5.35

See footnotes on page 14.

Ivy European Opportunities Fund Expenses
For the Six Months Ended       March 31, 2008	Beginning Account Value 9-30-07		Ending Account Value 3-31-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	882.60		1.59	%	$	7.44
Class B		1,000		879.00		2.37			11.18
Class C		1,000		879.60		2.27			10.62
Class E**		1,000		884.00		1.26			5.93
Class I		1,000		884.60		1.16			5.47
Class Y		1,000		883.40		1.41			6.59
Advisor Class**		1,000		884.50		1.13			5.37
Based on 5% Return(2)
Class A	$	1,000	$	1,017.07		1.59	%	$	7.97
Class B		1,000		1,013.15		2.37			11.98
Class C		1,000		1,013.66		2.27			11.38
Class E**		1,000		1,018.70		1.26			6.36
Class I		1,000		1,019.19		1.16			5.86
Class Y		1,000		1,017.96		1.41			7.06
Advisor Class**		1,000		1,019.34		1.13			5.76

Ivy International Balanced Fund Expenses
For the Six Months Ended       March 31, 2008	Beginning Account Value 9-30-07		Ending Account Value 3-31-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	965.40		1.34	%	$	6.58
Class B		1,000		961.30		2.26			11.08
Class C		1,000		962.60		2.03			9.91
Class E		1,000		961.20		2.30			11.28
Class I		1,000		967.20		0.97			4.72
Class Y		1,000		966.30		1.25			6.19
Based on 5% Return(2)
Class A	$	1,000	$	1,018.31		1.34	%	$	6.76
Class B		1,000		1,013.68		2.26			11.38
Class C		1,000		1,014.86		2.03			10.18
Class E		1,000		1,013.49		2.30			11.58
Class I		1,000		1,020.17		0.97			4.85
Class Y		1,000		1,018.75		1.25			6.36

See footnotes on page 14.

Ivy International Core Equity Fund Expenses
For the Six Months Ended       March 31, 2008	Beginning Account Value 9-30-07		Ending Account Value 3-31-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	927.60		1.52	%	$	7.32
Class B		1,000		923.80		2.35			11.35
Class C		1,000		924.30		2.19			10.58
Class E		1,000		923.80		2.40			11.54
Class I		1,000		929.70		1.13			5.40
Class Y		1,000		928.20		1.38			6.65
Based on 5% Return(2)
Class A	$	1,000	$	1,017.39		1.52	%	$	7.67
Class B		1,000		1,013.23		2.35			11.88
Class C		1,000		1,014.04		2.19			11.08
Class E		1,000		1,013.00		2.40			12.08
Class I		1,000		1,019.37		1.13			5.65
Class Y		1,000		1,018.10		1.38			6.96

Ivy International Growth Fund Expenses
For the Six Months Ended       March 31, 2008	Beginning Account Value 9-30-07		Ending Account Value 3-31-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	908.10		1.40	%	$	6.68
Class B		1,000		903.50		2.41			11.42
Class C		1,000		903.50		2.36			11.23
Class E**		1,000		908.70		1.24			5.92
Class I		1,000		909.30		1.20			5.73
Class Y		1,000		907.90		1.42			6.77
Based on 5% Return(2)
Class A	$	1,000	$	1,018.02		1.40	%	$	7.06
Class B		1,000		1,012.96		2.41			12.08
Class C		1,000		1,013.21		2.36			11.88
Class E**		1,000		1,018.78		1.24			6.26
Class I		1,000		1,019.01		1.20			6.06
Class Y		1,000		1,017.91		1.42			7.16

See footnotes on page 14.

Ivy Pacific Opportunities Fund Expenses
For the Six Months Ended       March 31, 2008	Beginning Account Value 9-30-07		Ending Account Value 3-31-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	833.80		1.71	%	$	7.79
Class B		1,000		829.50		2.70			12.35
Class C		1,000		830.10		2.46			11.26
Class E**		1,000		834.80		1.40			6.42
Class I		1,000		835.50		1.29			5.97
Class Y		1,000		834.20		1.53			7.06
Advisor Class**		1,000		835.80		1.20			5.51
Based on 5% Return(2)
Class A	$	1,000	$	1,016.47		1.71	%	$	8.57
Class B		1,000		1,011.50		2.70			13.58
Class C		1,000		1,012.72		2.46			12.38
Class E**		1,000		1,017.99		1.40			7.06
Class I		1,000		1,018.55		1.29			6.56
Class Y		1,000		1,017.33		1.53			7.77
Advisor Class**		1,000		1,019.01		1.20			6.06

Ivy Balanced Fund Expenses
For the Six Months Ended       March 31, 2008	Beginning Account Value 9-30-07		Ending Account Value 3-31-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	958.30		1.35	%	$	6.66
Class B		1,000		954.30		2.27			11.14
Class C		1,000		955.10		2.10			10.26
Class E**		1,000		959.50		1.11			5.39
Class I		1,000		960.50		1.01			4.90
Class Y		1,000		958.70		1.26			6.17
Based on 5% Return(2)
Class A	$	1,000	$	1,018.24		1.35	%	$	6.86
Class B		1,000		1,013.65		2.27			11.48
Class C		1,000		1,014.49		2.10			10.58
Class E**		1,000		1,019.46		1.11			5.55
Class I		1,000		1,019.96		1.01			5.05
Class Y		1,000		1,018.71		1.26			6.36

See footnotes on page 14.

Ivy Global Natural Resources Fund Expenses
For the Six Months Ended       March 31, 2008	Beginning Account Value 9-30-07		Ending Account Value 3-31-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	997.00		1.26	%	$	6.29
Class B		1,000		993.00		2.06			10.26
Class C		1,000		993.20		1.99			9.97
Class E		1,000		991.90		2.30			11.45
Class I		1,000		998.40		0.99			5.00
Class R		1,000		995.60		1.54			7.68
Class Y		1,000		997.40		1.20			5.99
Advisor Class**		1,000		997.40		0.90			6.29
Based on 5% Return(2)
Class A	$	1,000	$	1,018.72		1.26	%	$	6.36
Class B		1,000		1,014.70		2.06			10.38
Class C		1,000		1,015.04		1.99			10.08
Class E		1,000		1,013.52		2.30			11.58
Class I		1,000		1,020.05		0.99			5.05
Class R		1,000		1,017.32		1.54			7.77
Class Y		1,000		1,019.00		1.20			6.06
Advisor Class**		1,000		1,018.74		0.90			6.36

Ivy Real Estate Securities Fund Expenses
For the Six Months Ended       March 31, 2008	Beginning Account Value 9-30-07		Ending Account Value 3-31-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	882.60		1.72	%	$	8.10
Class B		1,000		878.00		2.80			13.15
Class C		1,000		878.80		2.58			12.12
Class E		1,000		877.80		2.88			13.52
Class I		1,000		885.20		1.16			5.47
Class R		1,000		883.00		1.68			7.91
Class Y		1,000		884.00		1.38			6.50
Based on 5% Return(2)
Class A	$	1,000	$	1,016.41		1.72	%	$	8.67
Class B		1,000		1,010.99		2.80			14.08
Class C		1,000		1,012.09		2.58			12.98
Class E		1,000		1,010.61		2.88			14.48
Class I		1,000		1,019.21		1.16			5.86
Class R		1,000		1,016.59		1.68			8.47
Class Y		1,000		1,018.08		1.38			6.96

See footnotes on page 14.

Ivy Bond Fund Expenses
For the Six Months Ended       March 31, 2008	Beginning Account Value 9-30-07		Ending Account Value 3-31-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	983.50		1.20	%	$	5.95
Class B		1,000		978.20		2.27			11.28
Class C		1,000		979.50		2.02			10.00
Class E		1,000		981.20		1.72			8.52
Class I		1,000		985.10		0.87			4.37
Class Y		1,000		983.20		1.31			6.54
Based on 5% Return(2)
Class A	$	1,000	$	1,018.98		1.20	%	$	6.06
Class B		1,000		1,013.65		2.27			11.48
Class C		1,000		1,014.88		2.02			10.18
Class E		1,000		1.016.42		1.72			8.67
Class I		1,000		1,020.65		0.87			4.45
Class Y		1,000		1,018.43		1.31			6.66

Ivy Mortgage Securities Fund Expenses
For the Six Months Ended       March 31, 2008	Beginning Account Value 9-30-07		Ending Account Value 3-31-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	948.30		1.14	%	$	5.55
Class B		1,000		943.80		2.10			10.20
Class C		1,000		944.70		1.91			9.24
Class E		1,000		944.50		1.94			9.43
Class I		1,000		950.00		0.78			3.80
Class Y		1,000		948.90		1.01			4.97
Based on 5% Return(2)
Class A	$	1,000	$	1,019.31		1.14	%	$	5.76
Class B		1,000		1,014.51		2.10			10.58
Class C		1,000		1,015.47		1.91			9.57
Class E		1,000		1,015.31		1.94			9.77
Class I		1,000		1,021.11		0.78			3.94
Class Y		1,000		1,019.95		1.01			5.15

*Fund expenses for each share class are equal to the Fund's annualized expense ratio for each share class (provided in the tables), multiplied by the average account value over the period, multiplied by 183 days in the six-month period ended March 31, 2008, and divided by 366.

**Class closed to investment.

(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 last column.

(2)This section uses a hypothetical 5% annual 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.

Manager's Discussion of Ivy Dividend Income Fund
     March 31, 2008

Below, David P. Ginther, CPA, portfolio manager of the Ivy Dividend Income Fund, discusses positioning, performance and results for the fiscal year ended March 31, 2008. He has managed the Fund since its inception and has 13 years of industry experience.

STYLE
VALUE	BLEND	GROWTH
		X	LARGE	CAPITALIZATION
			MEDIUM
			SMALL

This diagram shows the Fund's equity investment style and the size of companies in the Fund, as measured by market capitalization. Shaded areas reflect quarterly data for the past three years. Source: Morningstar

The Fund rose 4.10 percent (Class A shares at net asset value) for the 12 months ended March 31, 2008. By comparison, the Russell 1000 Index (reflecting the performance of stocks that generally represent the equity market) fell 5.41 percent, while the Lipper Equity Income Funds Universe Average (reflecting the universe of funds with similar investment objectives) declined 5.75 percent for the same period. Please note that Fund returns include applicable fees and expenses while index returns do not include any such fees.

Slower consumer spending

During the first half of the fiscal year, the global economies were strong, and the stock markets in the U.S. and overseas performed well. The favorable outlook changed in the second half when the severity of the U.S. credit crisis became more apparent. The nation's economic growth decelerated and the Federal Reserve reduced interest rates in an effort to improve conditions and avoid a financial crisis.

The deteriorating economic conditions negatively impacted stock markets worldwide. Much of the weakness was attributable to slower U.S. consumer spending. Therefore, the sectors that serve the U.S. individual consumers, such as financial services and consumer cyclicals, were the worst-performing sectors. However, the weak consumer spending in the United States did not affect industrial and infrastructure spending or growth overseas. Consequently, the areas of the stock market that performed the best were those that benefit from infrastructure spending and generate revenues outside the United States.

These sectors include industrials and energy, whose companies represented a high percentage of the Fund's holdings, which was a key driver of the Fund's performance. In addition, the Fund did not have a large exposure to financial services companies, which also contributed.

Food and oil fueled returns

Within industrials, the agriculture stocks were the best performers. Agriculture outperformed because grain prices rose during the second half of the year. Corn prices increased from lows of about $3.50 during the middle of 2007 to approximately $6 in 2008. This was attributable to low inventories and rising demand from developing countries and biofuels producers. Energy companies, benefiting from rising oil prices, also were significant contributors to performance. Oil climbed from $60 per barrel in early 2007 to nearly $112 in early 2008 because of strong demand and limited supply growth.

While industrials and energy flourished, financials floundered. The Fund has been underweight financials. Still, we were not immune to the problems. The worst-performing stocks in the Fund were bond insurers. We underestimated the magnitude of the credit problem, but because the investment was small, it only had a minor impact on performance. In addition, after years of strong stock performance, our investments in real estate investment trusts were hit because of concerns that the credit issues will impact the value of property and availability of capital, which help to drive growth rates.

The Fund owns stock in industries such as energy and industrials based on a long-term view of the global economy's direction and worldwide challenges. We believe some of these challenges provide investment opportunities, and others don't.

The credit crisis in the United States is one of the bigger challenges, in our opinion. A big question is if the situation will improve for financial services and consumer cyclical companies because of an improvement in consumer spending.

Our outlook

We think the U.S. consumer must retrench. We believe this will limit U.S. economic growth, but we don't expect the country's economy to collapse, and it even could create potential opportunities. Financial services stocks, which have performed poorly for the past year, is an area we are watching closely for new opportunities.

Even if it does fall into a recession, the U.S. economy represents only about 25 percent of the global economy, and most other countries don't face consumer credit issues. In fact, we believe the outlook for growth outside the United States is favorable. Consumers in emerging markets are spending more to raise their standard of living. Creating the infrastructure for developing countries to raise their standards of living is one of the biggest challenges the world faces, and it creates great investment opportunities. Increasing standards of living in these countries requires more infrastructure and energy, which helps to drive business spending.

Top 10 Equity Holdings as of March 31, 2007	March 31, 2008
AllianceBernstein Holding L.P. Deere & Company Schlumberger Limited Chicago Mercantile Exchange Holdings Inc. Exxon Mobil Corporation General Electric Company Altria Group, Inc. Boeing Company (The) J.P. Morgan Chase & Co. Fluor Corporation	Schlumberger Limited Deere & Company Fluor Corporation Exxon Mobil Corporation Colgate-Palmolive Company CME Group Inc. Abbott Laboratories Raytheon Company J.P. Morgan Chase & Co. Monsanto Company

See your advisor or www.ivyfunds.com for more information on the Fund's most recently published Top 10 Equity Holdings.

Companies that meet these needs will experience rising cash flows, in our opinion; these are the companies we want to own in the Fund. We intend to continue to focus more on companies that have increasing cash flows that can be used to raise dividends than of the absolute level of dividends.

As with any mutual fund, the value of the Fund's shares will change, and you could lose money on your investment. These and other risks are more fully described in the Fund's prospectus.

The Fund's performance noted above is at net asset value (NAV), and does not include the effect of any applicable sales charges. If reflected, the sales charge would reduce the performance noted.

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

Comparison of Change in Value of
$10,000 Investment

Ivy Dividend Income Fund, Class A Shares(1)	$	16,171
Russell 1000 Index	$	15,135
Lipper Equity Income Funds Universe Average	$	15,488

		IVY DIVIDEND INCOME FUND, CLASS A		RUSSELL 1000	LIPPER EQUITY INCOME FUNDS UNIVERSE
		SHARES	(1)	INDEX	AVERAGE
JUNE	2003	9,425		10,000	10,000
MARCH	2004	10,476		11,783	11,721
MARCH	2005	11,605		12,636	12,897
MARCH	2006	13,924		14,304	14,344
MARCH	2007	15,535		16,001	16,433
MARCH	2008	16,171		15,135	15,488

Please note that the performance of the Fund's other share classes will be greater or less than the performance shown above for Class A based on the differences in loads and fees paid by shareholders investing in the different classes.

(1)The value of the investment in the Fund is impacted by the sales load at the time of the investment and by the ongoing expenses of the Fund and assumes reinvestment of dividends and distributions.

Average Annual Total Return(2)
	Class A	Class B	Class C	Class E	Class I	Class Y
1-year period ended 3-31-08	- -1.89%	-0.92%	3.32%	––	––	4.23%
5-year period ended 3-31-08	––	––	––	––	––	––
10-year period ended 3-31-08	––	––	––	––	––	––
Since inception of Class(3) through 3-31-08	10.63%	10.76%	11.13%	––	––	12.15%
Cumulative return since inception of Class(3) through 3-31-08	––	––	––	- -2.91%	4.08%	––

(2)Data quoted is past performance and is based on deduction of the maximum applicable sales load for each of the periods. Current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Please visit www.ivyfunds.com for the Fund's most recent month-end performance. Class A and Class E shares carry a maximum front-end sales load of 5.75%. Class B and Class C shares carry maximum contingent deferred sales charges (CDSC) of 5% and 1%, respectively. (Accordingly, the Class C shares reflect no CDSC since it only applies to Class C shares redeemed within twelve months after purchase.) Class I and Class Y shares are not subject to sales charges.

(3)6-30-03 for Class A, Class B, Class C and Class Y shares, and 4-02-07 for Class E and Class I shares (the date on which shares were first acquired by shareholders).

Past performance is not necessarily indicative of future performance. Indexes are unmanaged. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

SHAREHOLDER SUMMARY OF IVY DIVIDEND INCOME FUND

Portfolio Highlights

On March 31, 2008, Ivy Dividend Income Fund had net assets totaling $197,162,136 invested in a diversified portfolio of:

86.33%	Domestic Common Stocks
7.44%	Foreign Common Stocks
6.23%	Cash and Cash Equivalents

Sector Weightings

As a shareholder of the Fund, for every $100 you had invested on March 31, 2008,
your Fund owned:

Financial Services Stocks	$	16.95
Energy Stocks	$	16.90
Consumer Nondurables Stocks	$	13.75
Capital Goods Stocks	$	10.86
Cash and Cash Equivalents	$	6.23
Technology Stocks	$	6.23
Raw Materials Stocks	$	5.12
Miscellaneous Stocks(1)	$	5.00
Utilities Stocks	$	4.92
Health Care Stocks	$	4.76
Multi-Industry Stocks	$	3.82
Shelter Stocks	$	2.77
Retail Stocks	$	2.69

(1)Includes $1.53 Business Equipment and Services Stocks, $1.15 Consumer Services Stocks and $2.32 Transportation Stocks.

The Investments of Ivy Dividend Income Fund
March 31, 2008
COMMON STOCKS	Shares			Value
Aircraft - 3.20%
Goodrich Corporation		31,450	$	1,808,689
Raytheon Company		69,600		4,496,856
				6,305,545
Banks - 3.85%
Bank of America Corporation		88,050		3,337,975
U.S. Bancorp		74,300		2,404,348
Wells Fargo & Company		63,400		1,844,940
				7,587,263
Beverages - 5.56%
Coca-Cola Company (The)		62,050		3,776,984
Diageo plc, ADR		42,800		3,480,496
PepsiCo, Inc.		51,400		3,711,080
				10,968,560
Business Equipment and Services - 1.00%
IntercontinentalExchange, Inc.*		15,150		1,977,075
Capital Equipment - 5.18%
Caterpillar Inc.		27,350		2,141,231
Chicago Bridge & Iron Company N.V., NY Shares		44,550		1,748,142
Deere & Company		78,500		6,314,540
				10,203,913
Chemicals - Petroleum and Inorganic - 2.19%
Monsanto Company		38,650		4,309,475
Chemicals - Specialty - 1.60%
Air Products and Chemicals, Inc.		34,300		3,155,600
Communications Equipment - 0.84%
Nokia Corporation, Series A, ADR		51,900		1,651,977
Computers - Peripherals - 1.35%
Microsoft Corporation		94,050		2,662,556
Electrical Equipment - 0.96%
Emerson Electric Co.		36,800		1,893,728
Electronic Components - 0.84%
Microchip Technology Incorporated		50,400		1,650,852
Finance Companies - 1.04%
Capital One Financial Corporation		41,800		2,057,396
Food and Related - 1.05%
Wm. Wrigley Jr. Company		32,800		2,061,152
Health Care - Drugs - 3.96%
Abbott Laboratories		83,050		4,580,207
Merck & Co., Inc.		85,150		3,231,443
				7,811,650
Hospital Supply and Management - 0.80%
Medtronic, Inc.		32,800		1,586,536
Hotels and Gaming - 1.15%
Starwood Hotels & Resorts Worldwide, Inc.		43,950		2,274,413
Household - General Products - 4.33%
Colgate-Palmolive Company		62,500		4,869,375
Procter & Gamble Company (The)		52,400		3,671,668
				8,541,043
Insurance - Life - 1.53%
Aflac Incorporated		46,300		3,007,185
Insurance - Property and Casualty - 2.19%
ACE Limited		23,800		1,310,428
Everest Re Group, Ltd.		16,300		1,459,339
Travelers Companies, Inc. (The)		32,200		1,540,770
				4,310,537
Metal Fabrication - 1.70%
Loews Corporation, Carolina Group		46,200		3,351,810
Multiple Industry - 3.82%
Altria Group, Inc.		75,800		1,682,760
Consolidated Communications Holdings, Inc.	118,050			1,784,916
General Electric Company		56,450		2,089,214
NuStar GP Holdings, LLC		78,000		1,974,180
				7,531,070
Non-Residential Construction - 3.02%
Fluor Corporation		42,150		5,949,894
Petroleum - Domestic - 1.48%
XTO Energy Inc.		47,150		2,916,699
Petroleum - International - 6.17%
Anadarko Petroleum Corporation		16,250		1,024,237
Apache Corporation		34,050		4,113,921
Exxon Mobil Corporation		64,450		5,451,181
Marathon Oil Corporation		34,650		1,580,040
				12,169,379
Petroleum - Services - 9.25%
National Oilwell Varco, Inc.*		48,400		2,825,592
Schlumberger Limited		72,850		6,337,950
Smith International, Inc.		46,900		3,012,387
Transocean Inc.		13,162		1,779,502
Weatherford International Ltd.*		47,150		3,416,961
Williams Pipeline Partners L.P.*		49,450		862,903
				18,235,295
Railroad - 2.32%
Burlington Northern Santa Fe Corporation		18,850		1,738,347
Union Pacific Corporation		22,650		2,839,857
				4,578,204
Real Estate Investment Trust - 2.77%
Douglas Emmett, Inc.		83,950		1,851,937
ProLogis		24,250		1,427,355
Simon Property Group, Inc.		23,450		2,178,740
				5,458,032
Restaurants - 1.27%
McDonald's Corporation		44,950		2,506,861
Retail - General Merchandise - 1.42%
Nordstrom, Inc.		57,350		1,869,610
Target Corporation		18,300		927,444
				2,797,054
Security and Commodity Brokers - 8.34%
AllianceBernstein Holding L.P.		55,100		3,492,238
CME Group Inc.		10,200		4,784,820
J.P. Morgan Chase & Co.	100,602			4,320,856
Merrill Lynch & Co., Inc.		42,850		1,745,709
Morgan Stanley		45,950		2,099,915
				16,443,538
Steel - 1.33%
Nucor Corporation		38,750		2,624,925
Timesharing and Software - 0.53%
Visa Inc., Class A*		16,900		1,053,884
Tobacco - 2.81%
Philip Morris International Inc.*		75,800		3,833,964
Reynolds American Inc.		28,900		1,705,967
				5,539,931
Utilities - Electric - 2.57%
Dominion Resources, Inc.		47,200		1,927,648
NRG Energy, Inc.*		80,650		3,144,544
				5,072,192
Utilities - Gas and Pipeline - 1.54%
El Paso Pipeline Partners, L.P.		63,550		1,440,043
Enbridge Inc.		38,900		1,601,124
				3,041,167
Utilities - Telephone - 0.81%
Iowa Telecommunications Services, Inc.		89,950		1,594,813
TOTAL COMMON STOCKS - 93.77%			$	184,881,204
(Cost: $155,466,423)

SHORT-TERM SECURITIES	Principal Amount in Thousands
Aircraft - 2.54%
United Technologies Corporation,
2.3%, 4-1-08	$5,000		5,000,000
Apparel - 1.01%
NIKE, Inc.,
2.28%, 4-11-08		2,000	1,998,733
Finance Companies - 1.27%
USAA Capital Corp.,
2.3%, 4-7-08		2,500	2,499,042

Motor Vehicles - 3.13%
Harley-Davidson, Inc.,
2.3%, 4-1-08	$6,166			6,166,000
Security and Commodity Brokers - 2.02%
American Express Credit Corp.,
2.71%, 4-28-08		4,000		3,991,870
TOTAL SHORT-TERM SECURITIES - 9.97%			$	19,655,645
(Cost: $19,655,645)
TOTAL INVESTMENT SECURITIES - 103.74%			$	204,536,849
(Cost: $175,122,068)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (3.74%)				(7,374,713	)
NET ASSETS - 100.00%			$	197,162,136

Notes to Schedule of Investments

Certain acronyms may be used within the body of the Fund's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.

*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
     March 31, 2008
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $175,122) (Notes 1 and 3)	$	204,537
Receivables:
Fund shares sold		941
Dividends and interest		406
Prepaid and other assets		23
Total assets		205,907
LIABILITIES
Payable for investment securities purchased		8,198
Payable to Fund shareholders		286
Accrued management fee (Note 2)		115
Accrued shareholder servicing (Note 2)		49
Accrued service fee (Note 2)		41
Due to custodian		30
Accrued accounting services fee (Note 2)		6
Accrued distribution fee (Note 2)		1
Other		19
Total liabilities		8,745
Total net assets	$	197,162
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	170,752
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(9	)
Accumulated undistributed net realized loss on investment transactions		(2,996	)
Net unrealized appreciation in value of investments		29,415
Net assets applicable to outstanding units of capital	$	197,162
Net asset value per share (net assets divided by shares outstanding):
Class A	$16.05
Class B	$15.93
Class C	$15.95
Class E	$16.01
Class I	$16.07
Class Y	$16.06
Capital shares outstanding:
Class A		9,229
Class B		656
Class C		1,514
Class E		123
Class I		6
Class Y		770

See Notes to Financial Statements.

Statement of Operations
     IVY DIVIDEND INCOME FUND
     For the Fiscal Year Ended March 31, 2008
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $16)	$	2,999
Interest and amortization		819
Total income		3,818
Expenses (Note 2):
Investment management fee		1,251
Shareholder servicing:
Class A		356
Class B		53
Class C		66
Class E		11
Class I		––	*
Class Y		13
Service fee:
Class A		316
Class B		28
Class C		57
Class Y		20
Distribution fee:
Class A		23
Class B		85
Class C		172
Class E		3
Accounting services fee		72
Audit fees		11
Custodian fees		8
Legal fees		2
Other		185
Total expenses		2,732
Net investment income		1,086
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on investments		(2,385	)
Unrealized appreciation in value of investments during the period		4,858
Net gain on investments		2,473
Net increase in net assets resulting from operations	$	3,559

*Not shown due to rounding.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,
	2008			2007
INCREASE IN NET ASSETS
Operations:
Net investment income	$	1,086		$	1,040
Realized net gain (loss) on investments		(2,385	)		2,989
Unrealized appreciation		4,858			7,777
Net increase in net assets resulting from operations		3,559			11,806
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A		(1,106	)		(963	)
Class B		(14	)		(24	)
Class C		(53	)		(61	)
Class E		(3	)		NA
Class I		(2	)		NA
Class Y		(66	)		(17	)
Realized gains on investment transactions:
Class A		(1,516	)		(1,058	)
Class B		(126	)		(106	)
Class C		(259	)		(209	)
Class E		(19	)		NA
Class I		(1	)		NA
Class Y		(95	)		(16	)
		(3,260	)		(2,454	)
Capital share transactions (Note 5)		57,974			46,283
Total increase		58,273			55,635
NET ASSETS
Beginning of period		138,889			83,254
End of period	$	197,162		$	138,889
Undistributed net investment income (loss)	$	(9	)	$	23

(1)See "Financial Highlights" on pages 28 - 33.

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 fiscal year ended March 31,												For the fiscal period ended				For the period from 6-30-03 (1) to
	2008			2007			2006			2005			3-31-04				12-31-03
Net asset value, beginning of       period	$	15.70		$	14.41		$	12.13		$	11.07			$	11.03			$	10.00
Income from investment       operations:
Net investment income		0.13	(2)		0.17	(2)		0.12	(2)		0.09				0.01				0.04
Net realized and unrealized             gain on investments		0.54	(2)		1.49	(2)		2.30	(2)		1.10				0.04				1.03
Total from investment operations		0.67			1.66			2.42			1.19				0.05				1.07
Less distributions from:
Net investment income		(0.14	)		(0.18	)		(0.11	)		(0.09	)			(0.01	)			(0.04	)
Capital gains		(0.18	)		(0.19	)		(0.03	)		(0.04	)			(0.00	)			(0.00	)
Total distributions		(0.32	)		(0.37	)		(0.14	)		(0.13	)			(0.01	)			(0.04	)
Net asset value, end of period	$	16.05		$	15.70		$	14.41		$	12.13			$	11.07			$	11.03
Total return (3)		4.10	%		11.57	%		19.99	%		10.78	%			0.41	%			10.70	%
Net assets, end of period       (in millions)	$148			$107			$61			$32				$17				$16
Ratio of expenses to average net       assets including expense       waiver		1.37	%		1.38	%		1.45	%		1.59	%			2.00	% (4)			1.11	% (4)
Ratio of net investment income to       average net assets including       expense waiver		0.77	%		1.16	%		0.92	%		0.94	%			0.20	% (4)			1.34	% (4)
Ratio of expenses to average net       assets excluding expense       waiver		1.37	% (5)		1.38	% (5)		1.45	% (5)		1.59	% (5)			2.40	% (4)			1.81	% (4)
Ratio of net investment income       (loss) to average net assets       excluding expense waiver		0.77	% (5)		1.16	% (5)		0.92	% (5)		0.94	% (5)			- -0.20	% (4)			0.64	% (4)
Portfolio turnover rate		30	%		24	%		15	%		32	%			12	%			16	%

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

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

(4)Annualized.

(5)There was no waiver of expenses during the period.

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 fiscal year ended March 31,												For the fiscal period ended				For the period from 6-30-03 (1) to
	2008			2007			2006			2005			3-31-04				12-31-03
Net asset value, beginning of       period	$	15.63		$	14.34		$	12.09		$	11.05			$	11.03			$	10.00
Income (loss) from investment       operations:
Net investment income (loss)		(0.03	)		0.05			0.01			0.02				(0.02	)			0.01
Net realized and unrealized             gain on investments		0.53			1.47			2.28			1.06				0.04				1.03
Total from investment operations		0.50			1.52			2.29			1.08				0.02				1.04
Less distributions from:
Net investment income		(0.02	)		(0.04	)		(0.01	)		(0.00	)			(0.00	)			(0.01	)
Capital gains		(0.18	)		(0.19	)		(0.03	)		(0.04	)			(0.00	)			(0.00	)
Total distributions		(0.20	)		(0.23	)		(0.04	)		(0.04	)			(0.00	)			(0.01	)
Net asset value, end of period	$	15.93		$	15.63		$	14.34		$	12.09			$	11.05			$	11.03
Total return		3.09	%		10.63	%		18.94	%		9.76	%			0.18	%			10.36	%
Net assets, end of period       (in millions)	$11			$10			$7			$6				$2				$2
Ratio of expenses to average net       assets including expense       waiver		2.34	%		2.30	%		2.32	%		2.44	%			2.99	% (2)			2.03	% (2)
Ratio of net investment income       (loss) to average net assets       including expense waiver		- -0.16	%		0.29	%		0.03	%		0.11	%			- -0.81	% (2)			0.36	% (2)
Ratio of expenses to average net       assets excluding expense       waiver		2.34	% (3)		2.30	% (3)		2.32	% (3)		2.44	% (3)			3.39	% (2)			2.73	% (2)
Ratio of net investment income       (loss) to average net assets       excluding expense waiver		- -0.16	% (3)		0.29	% (3)		0.03	% (3)		0.11	% (3)			- -1.21	% (2)			- -0.34	% (2)
Portfolio turnover rate		30	%		24	%		15	%		32	%			12	%			16	%

(1)Commencement of operations of the class.

(2)Annualized.

(3)There was no waiver of expenses during the period.

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 fiscal year ended March 31,												For the fiscal period ended				For the period from 6-30-03 (1) to
	2008			2007			2006			2005			3-31-04				12-31-03
Net asset value, beginning of       period	$	15.63		$	14.34		$	12.09		$	11.05			$	11.03			$	10.00
Income (loss) from investment       operations:
Net investment income (loss)		(0.00	)		0.07			0.01			0.01				(0.02	)			0.01
Net realized and unrealized             gain on investments		0.54			1.47			2.28			1.07				0.04				1.03
Total from investment operations		0.54			1.54			2.29			1.08				0.02				1.04
Less distributions from:
Net investment income		(0.04	)		(0.06	)		(0.01	)		(0.00	)			(0.00	)			(0.01	)
Capital gains		(0.18	)		(0.19	)		(0.03	)		(0.04	)			(0.00	)			(0.00	)
Total distributions		(0.22	)		(0.25	)		(0.04	)		(0.04	)			(0.00	)			(0.01	)
Net asset value,       end of period	$	15.95		$	15.63		$	14.34		$	12.09			$	11.05			$	11.03
Total return		3.32	%		10.74	%		18.95	%		9.76	%			0.18	%			10.38	%
Net assets, end of period       (in millions)	$24			$19			$14			$10				$6				$5
Ratio of expenses to average net       assets including expense       waiver		2.15	%		2.17	%		2.27	%		2.42	%			2.88	% (2)			1.98	% (2)
Ratio of net investment income       (loss) to average net assets       including expense waiver		0.00	%		0.42	%		0.08	%		0.10	%			- -0.68	% (2)			0.45	% (2)
Ratio of expenses to average net       assets excluding expense       waiver		2.15	% (3)		2.17	% (3)		2.27	% (3)		2.42	% (3)			3.28	% (2)			2.68	% (2)
Ratio of net investment income       (loss) to average net assets       excluding expense waiver		0.00	% (3)		0.42	% (3)		0.08	% (3)		0.10	% (3)			- -1.08	% (2)			- -0.25	% (2)
Portfolio turnover rate		30	%		24	%		15	%		32	%			12	%			16	%

(1)Commencement of operations of the class.

(2)Annualized.

(3)There was no waiver of expenses during the period.

See Notes to Financial Statements.

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

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period	$	15.76
Income (loss) from investment operations:
Net investment loss		(0.01	) (2)
Net realized and unrealized gain on investments		0.51	(2)
Total from investment operations		0.50
Less distributions from:
Net investment income		(0.07	)
Capital gains		(0.18	)
Total distributions		(0.25	)
Net asset value, end of period	$	16.01
Total return (3)		3.01	%
Net assets, end of period (in millions)	$2
Ratio of expenses to average net assets		2.17	% (4)
Ratio of net investment income to average net assets		- -0.18	% (4)
Portfolio turnover rate		30	% (5)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

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

(4)Annualized.

(5)For the twelve months ended March 31, 2008.

See Notes to Financial Statements.

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

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	15.76
Income from investment operations:
Net investment income			0.20
Net realized and unrealized gain on investments			0.47
Total from investment operations			0.67
Less distributions from:
Net investment income			(0.18	)
Capital gains			(0.18	)
Total distributions			(0.36	)
Net asset value, end of period		$	16.07
Total return			4.08	%
Net assets, end of period (in thousands)		$104
Ratio of expenses to average net assets			1.00	% (2)
Ratio of net investment income to average net assets			1.17	% (2)
Portfolio turnover rate			30	% (3)

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the twelve months ended March 31, 2008.

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 fiscal year ended March 31,												For the fiscal period ended				For the period from 6-30-03 (1) to
	2008			2007			2006			2005			3-31-04				12-31-03
Net asset value, beginning of       period	$	15.70		$	14.41		$	12.13		$	11.07			$	11.03			$	10.00
Income from investment       operations:
Net investment income		0.14	(2)		0.12	(2)		0.15	(2)		0.11				0.01				0.05
Net realized and unrealized             gain on investments		0.55	(2)		1.55	(2)		2.29	(2)		1.10				0.04				1.03
Total from investment operations		0.69			1.67			2.44			1.21				0.05				1.08
Less distributions from:
Net investment income		(0.15	)		(0.19	)		(0.13	)		(0.11	)			(0.01	)			(0.05	)
Capital gains		(0.18	)		(0.19	)		(0.03	)		(0.04	)			(0.00	)			(0.00	)
Total distributions		(0.33	)		(0.38	)		(0.16	)		(0.15	)			(0.01	)			(0.05	)
Net asset value, end of period	$	16.06		$	15.70		$	14.41		$	12.13			$	11.07			$	11.03
Total return		4.23	%		11.65	%		20.14	%		10.94	%			0.42	%			10.78	%
Net assets, end of period       (in millions)	$12			$3			$1			$1				$1				$1
Ratio of expenses to average net      assets including expense       waiver		1.26	%		1.29	%		1.34	%		1.44	%			1.91	% (3)			1.25	% (3)
Ratio of net investment income to       average net assets including       expense waiver		0.78	%		0.92	%		1.03	%		1.09	%			0.28	% (3)			1.08	% (3)
Ratio of expenses to average net       assets excluding expense       waiver		1.26	% (4)		1.29	% (4)		1.34	% (4)		1.44	% (4)			2.31	% (3)			1.95	% (3)
Ratio of net investment income       (loss) to average net assets       excluding expense waiver		0.78	% (4)		0.92	% (4)		1.03	% (4)		1.09	% (4)			- -0.12	% (3)			0.38	% (3)
Portfolio turnover rate		30	%		24	%		15	%		32	%			12	%			16	%

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(4)There was no waiver of expenses during the period.

See Notes to Financial Statements.

Manager's Discussion of Ivy Small Cap Value Fund
     March 31, 2008

Ivy Small Cap Value Fund was subadvised by BlackRock Capital Management, Inc. from the start of the fiscal year until March 24, 2008. Effective March 24, 2008, Ivy Investment Management Company, the Fund's investment manager, assumed direct investment management responsibilities of the Fund's portfolio. At that time, Timothy J. Miller of Ivy Investment Management Company began managing the Fund. Mr. Miller joined the company in February 2008 and has 29 years of industry experience. This includes more than 10 years with Invesco Funds Group, including four years as Chief Investment Officer.

Below, is a discussion of the Fund's positioning, performance and results for the fiscal year ended March 31, 2008, from the Fund's former subadvisor, BlackRock Capital Management, Inc. Mr. Miller provided the outlook portion of this discussion.

STYLE
VALUE	BLEND	GROWTH
			LARGE	CAPITALIZATION
			MEDIUM
	X		SMALL

This diagram shows the Fund's equity investment style and the size of companies in the Fund, as measured by market capitalization. Shaded areas reflect quarterly data for the past three years. Source: Morningstar.

The Fund dropped 15.19 percent (Class A Shares at net asset value) for the 12 months ended March 31, 2008. By comparison, the Russell 2000 Value Index (reflecting the performance of securities that generally represent small company value stocks) fell 16.90 percent for the same period. The Lipper Small-Cap Value Funds Universe Average (reflecting the universe of funds with similar investment objectives) fell 14.71 percent. Please note that Fund returns include applicable fees and expenses while index returns do not include any such fees.

Challenging environment

U.S. equity markets sold off sharply during the period as tumult in the residential real estate market, evaporating credit, spiking energy prices, a deteriorating employment outlook and the liquidity-driven collapse of Bear Stearns combined to pique fears of an economic recession and pressure stock prices. In this challenging environment, the Fund slightly outpaced the benchmark (before taking into account the Fund's sales charge) as relative strength in industrials, health care and consumer staples overcame weakness in materials, information technology and financials.

Positive selection in industrials, health care and consumer staples

Fear of recession here at home and a slowing global economy weighed on industrials stocks during the period. Against this backdrop, positive stock selection proved to be the most notable driver of performance. Brink's, a provider of armored car and home security services, was among the key individual contributors as management moved to unlock shareholder value with the announced spin-off of the firm's home security business. Kirby Corporation, a shipper of petroleum and petroleum-based products, also added significant value as shares moved higher on strong earnings and rising commodity prices.

In health care, positive stock selection, particularly among pharmaceutical producers and equipment and supply manufacturers, powered favorable performance comparisons. Axcan Pharma Inc. added significant value as shares of the maker of products used in the treatment of gastrointestinal ailments surged following its announced acquisition by private equity firm TPG Capital. DJO Incorporated was another significant contributor in the sector as the orthopedic device maker announced its acquisition at a significant premium in mid-July.

In the consumer staples sector, stock selection and an overweight position, particularly among food and staples retailers and food products producers, generated outperformance. BJ's Wholesale Club, Inc. and Ruddick Corporation, operator of the Harris Teeter supermarket chain, were among the standout performers. Chicken producer Pilgrim's Pride Corporation and organic foods maker The Hain Celestial Group, Inc. also contributed to relative strength in the sector.

Poor selection in metals and mining

Although an overweight position among containers and packaging producers added value, overall disappointing stock selection resulted in underperformance in the materials sector. Key areas of weakness included the metals and mining and chemicals subsectors. Largely driven by spiking commodity prices, metals and mining stocks experienced strong gains during the period. Negative stock selection and an underweight to these names detracted from sector returns.

Stock selection also hampered relative performance in information technology. The Fund experienced the greatest weakness in the volatile semiconductor-related names. Declines in shares of RF Micro Devices, Inc., PMC-Sierra, Inc. and Trident Microsystems, Inc. accounted for much of the shortfall. We eliminated positions in RF Micro Devices, Inc. and Trident Microsystems and trimmed our weighting in PMC-Sierra, Inc. during the period as we became increasingly negative in our near-term outlook for semiconductor manufacturers.

Continued fallout from the subprime mortgage crisis and tight credit markets presented a challenging environment for financials stocks. Although the Fund's thrift and mortgage finance and insurance stocks outpaced their benchmark counterparts, these relative gains were overshadowed by underperformance in the commercial bank and capital markets subsectors. Boston Private Financial and Sterling Financial were among the most notable detractors. Shares of investment bank and brokerage firm Piper Jaffray Companies also declined during the period, contributing to underperformance in the sector.

During the period, we took advantage of weakness to increase consumer discretionary exposure in the Fund, adding to existing holdings and establishing several new positions, including gaming machine maker WMS Industries and LKQ Corp., a producer of recycled automotive parts. We also added modestly to our information technology weighting, primarily within the software sub-sector. Conversely, we reduced our weightings in industrials and financials.

Top 10 Equity Holdings as of March 31, 2007	March 31, 2008
BJ's Wholesale Club, Inc. Orient-Express Hotels Ltd. DJO Incorporated Brink's Company (The) Silgan Holdings Inc. Pilgrim's Pride Corporation Hain Celestial Group, Inc. (The) Piper Jaffray Companies Texas Industries, Inc. Waste Connections, Inc.	Brink's Company (The) Ruddick Corporation LKQ Corporation Sybase, Inc. Watson Wyatt & Company Holdings, Inc.,       Class A Hain Celestial Group, Inc. (The) Texas Industries, Inc. BJ's Wholesale Club, Inc. Silgan Holdings Inc. Orient-Express Hotels Ltd.

See your advisor or www.ivyfunds.com for more information on the Fund's most recently published Top 10 Equity Holdings.

Our outlook

We believe the headwinds for the domestic consumer discretionary sector are mounting as oil and food prices continue to rise and confidence levels fade. Accordingly, we believe that it is premature to have a significant overweight in this sector and are therefore selectively cutting back in the hotels and retail space. The financial services sector, on the other hand, actually outperformed the overall Russell 2000 value benchmark in the first calendar quarter of 2008, and we believe that opportunities in this sector warrant increased exposure. Valuations are near record lows and a return to near-normal levels of profitability in some of these companies would yield dramatic stock price recoveries - a scenario that we feel will take time to unfold and will be volatile in the interim, but nevertheless poses an attractive risk/reward for certain stocks. In the commodities oriented sectors, tight global capacity utilization persists which we believe could lead to continued relative earnings strength in the energy , agricultural and metals sectors where we have also modestly increased our exposure. The magnitude of the economic slowdown will likely have a large impact on performance going forward, and we continue to be focused on those stocks whose valuations reflect a more dire scenario than we anticipate.

As with any mutual fund, the value of the Fund's shares will change, and you could lose money on your investment.

Investing in small-cap stocks may carry more risk than investing in stocks of larger, more well-established companies. Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor and, in the opinion of the Fund's manager, undervalued. The value of a security believed by the Fund's manager to be undervalued may never reach what is believed to be its full value, or such security's value may decrease. These and other risks are more fully described in the Fund's prospectus.

The Fund's performance noted above is at net asset value (NAV), and does not include the effect of any applicable sales charges. If reflected, the sales charge would reduce the performance noted.

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

Comparison of Change in Value of
$10,000 Investment

Ivy Small Cap Value Fund, Class A Shares(1)	$	18,795
Russell 2000 Value Index	$	23,165
Lipper Small-Cap Value Funds Universe Average	$	22,919

		IVY SMALL CAP VALUE FUND, CLASS A	RUSSELL 2000 VALUE	LIPPER SMALL-CAP VALUE FUNDS UNIVERSE
		SHARES	INDEX	AVERAGE
JULY	1998	9,425	10,000	10,000
JULY	1999	9,059	9,983	10,204
JULY	2000	9,397	10,494	10,735
JULY	2001	12,703	12,983	13,466
JULY	2002	11,018	12,271	12,581
JULY	2003	12,661	14,566	14,734
MARCH	2004	16,242	18,596	18,594
MARCH	2005	17,580	20,416	20,681
MARCH	2006	20,469	25,259	24,896
MARCH	2007	22,160	27,876	26,872
MARCH	2008	18,795	23,165	22,919

Please note that the performance of the Fund's other share classes will be greater or less than the performance shown above for Class A based on the differences in loads and fees paid by shareholders investing in the different classes.

(1)The value of the investment in the Fund is impacted by the sales load at the time of the investment and by the ongoing expenses of the Fund and assumes reinvestment of dividends and distributions.

Average Annual Total Return(2)
	Class A	Class B	Class C	Class E(3)	Class I	Class Y
1-year period ended 3-31-08	- -20.06%	- -19.33%	- -15.91%	––	––	- -14.89%
5-year period ended 3-31-08	12.99%	––	––	––	––	––
10-year period ended 3-31-08	5.50%	––	––	––	––	––
Since inception of Class(4) through 3-31-08	––	4.11%	4.76%	––	––	5.95%
Cumulative return since inception of Class(4) through 3-31-08	––	––	––	- -19.72%	- -14.39%	––

(2)Data quoted is past performance and is based on deduction of the maximum applicable sales load for each of the periods. Current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Please visit www.ivyfunds.com for the Fund's most recent month-end performance. Class A and Class E shares carry a maximum front-end sales load of 5.75%. Class B and Class C shares carry maximum contingent deferred sales charges (CDSC) of 5% and 1%, respectively. (Accordingly, the Class C shares reflect no CDSC since it only applies to Class C shares redeemed within twelve months after purchase.) Class I and Class Y shares are not subject to sales charges.

(3)Class E shares are not currently available for investment.

(4)12-8-03 for Class B, Class C and Class Y shares and 4-2-07 for Class E and Class I shares (the date on which shares were first acquired by shareholders).

Past performance is not necessarily indicative of future performance. Indexes are unmanaged. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

The Advantus Venture Fund merged into the Ivy Small Cap Value Fund on December 8, 2003. The performance shown for periods prior to this date is that of the Advantus Venture Fund Class A shares, restated to reflect current sales charges applicable to Ivy Small Cap Value Fund Class A shares. Performance has not been restated to reflect the fees and expenses applicable to the Ivy Small Cap Value Fund. If these expenses were reflected, performance shown would differ.

SHAREHOLDER SUMMARY OF IVY SMALL CAP VALUE FUND

Portfolio Highlights

On March 31, 2008, Ivy Small Cap Value Fund had net assets totaling $131,915,022 invested in a diversified portfolio of:

86.09%	Domestic Common Stocks
8.30%	Foreign Common Stocks
5.61%	Cash and Cash Equivalents

Sector Weightings

As a shareholder of the Fund, for every $100 you had invested on March 31, 2008,
your Fund owned:

Financial Services Stocks	$	12.75
Business Equipment and Services Stocks	$	12.10
Retail Stocks	$	10.60
Technology Stocks	$	10.26
Consumer Services Stocks	$	8.63
Consumer Nondurables Stocks	$	7.95
Capital Goods Stocks	$	7.19
Health Care Stocks	$	6.45
Cash and Cash Equivalents	$	5.61
Miscellaneous Stocks(1)	$	5.11
Energy Stocks	$	4.90
Utilities Stocks	$	4.54
Shelter Stocks	$	3.91

(1)Includes $2.86 Consumer Durables Stocks, $0.85 Raw Materials Stocks and $1.40 Transportation Stocks.

The Investments of Ivy Small Cap Value Fund
March 31, 2008
COMMON STOCKS	Shares			Value
Aircraft - 1.88%
Orbital Sciences Corporation*		102,700	$	2,475,070
Apparel - 0.74%
Albany International Corp., Class A		27,000		975,780
Banks - 7.34%
First Midwest Bancorp, Inc.		71,400		1,982,421
First Niagara Financial Group, Inc.		155,700		2,113,628
KBW, Inc.*		66,000		1,455,300
Sterling Bancshares, Inc.		137,615		1,366,517
United Bankshares, Inc.		54,489		1,450,770
Wintrust Financial Corporation		37,549		1,316,843
				9,685,479
Business Equipment and Services - 11.14%
Brink's Company (The)		81,100		5,448,298
GEO Group, Inc. (The)*		75,300		2,141,532
SkillSoft Public Limited Company*		231,334		2,419,754
Viad Corp		3,228		116,240
Waste Connections, Inc.*		51,050		1,569,277
Watson Wyatt & Company Holdings, Inc., Class A		52,900		3,002,075
				14,697,176
Capital Equipment - 4.37%
Actuant Corporation, Class A		49,800		1,504,458
Astec Industries, Inc.*		19,500		755,040
Chart Industries, Inc.*		37,200		1,257,360
Lufkin Industries, Inc.		18,200		1,162,434
Warnaco Group, Inc. (The)*		27,500		1,083,088
				5,762,380
Chemicals - Specialty - 0.85%
H.B. Fuller Company		24,000		489,840
Terra Industries Inc.*		17,900		635,987
				1,125,827
Communications Equipment - 0.70%
Polycom, Inc.*		40,900		920,864
Computers - Micro - 0.52%
Tech Data Corporation*		20,900		685,938
Computers - Peripherals - 4.19%
Epicor Software Corporation*		74,700		836,640
Lawson Software, Inc.*		201,500		1,515,280
Sybase, Inc.*		120,511		3,169,439
				5,521,359
Construction Materials - 2.12%
Texas Industries, Inc.		46,500		2,795,115
Containers - 1.99%
Silgan Holdings Inc.		52,851		2,618,239
Cosmetics and Toiletries - 1.25%
Elizabeth Arden, Inc.*		83,043		1,655,462
Defense - 0.94%
Teledyne Technologies Incorporated*		26,300		1,236,100
Electronic Components - 0.45%
PMC-Sierra, Inc.*		104,300		595,031
Electronic Instruments - 1.58%
WMS Industries Inc.*		58,100		2,089,857
Food and Related - 3.97%
Hain Celestial Group, Inc. (The)*		97,500		2,876,737
Sensient Technologies Corporation		79,900		2,356,251
				5,232,988
Health Care - General - 2.31%
Amedisys, Inc.*		45,166		1,776,153
Cooper Companies, Inc. (The)		37,000		1,273,910
				3,050,063
Hospital Supply and Management - 4.14%
AmSurg Corp.*		58,689		1,388,582
Kindred Healthcare, Inc.*		97,344		2,128,913
Magellan Health Services, Inc.*		49,040		1,947,378
				5,464,873
Hotels and Gaming - 7.85%
Morgans Hotel Group Co.*		122,943		1,796,812
Orient-Express Hotels Ltd.		57,500		2,481,700
Pinnacle Entertainment, Inc.*		151,100		1,934,080
Scientific Games Corporation, Class A*		83,349		1,759,081
Vail Resorts, Inc.*		49,387		2,384,898
				10,356,571
Insurance - Property and Casualty - 3.93%
Aspen Insurance Holdings Limited		12,000		316,560
Endurance Specialty Holdings Ltd.		25,161		920,893
IPC Holdings, Ltd.		88,549		2,476,716
Navigators Group, Inc. (The)*		8,060		438,182
Platinum Underwriters Holdings, Ltd.		31,991		1,038,428
				5,190,779
Leisure Time Industry - 0.78%
LeapFrog Enterprises, Inc.*		145,210		1,023,730
Motor Vehicle Parts - 2.86%
LKQ Corporation*		167,900		3,768,515
Non-Residential Construction - 0.70%
Perini Corporation*		25,488		923,430
Petroleum - Domestic - 0.66%
Delta Petroleum Corporation*		38,400		864,960
Petroleum - International - 1.16%
Swift Energy Company*		34,000		1,529,660
Petroleum - Services - 3.08%
Cal Dive International, Inc.*		57,600		597,888
North American Energy Partners Inc.*		84,900		1,302,366
Oil States International, Inc.*		25,500		1,142,655
W-H Energy Services, Inc.*		14,800		1,018,980
				4,061,889
Real Estate Investment Trust - 3.91%
Arbor Realty Trust, Inc.		116,029		1,749,717
Gramercy Capital Corp.		109,819		2,298,512
Redwood Trust, Inc.		30,670		1,114,854
				5,163,083
Restaurants - 1.01%
Jack in the Box Inc.		49,800		1,338,126
Retail - Food Stores - 4.00%
Longs Drug Stores Corporation		30,900		1,312,014
Ruddick Corporation		107,600		3,966,136
				5,278,150
Retail - General Merchandise - 2.05%
BJ's Wholesale Club, Inc.*		75,900		2,708,871
Retail - Specialty Stores - 3.54%
AnnTaylor Stores Corporation*		51,700		1,250,106
Children's Place Retail Stores, Inc. (The)*		37,100		910,805
Sally Holdings, Inc.*		91,334		630,205
Talbots, Inc. (The)		174,004		1,875,763
				4,666,879
Security and Commodity Brokers - 1.48%
Piper Jaffray Companies*		57,436		1,950,527
Timesharing and Software - 0.96%
Forrester Research, Inc.*		40,600		1,077,727
Guidance Software, Inc.*		21,543		192,271
				1,269,998
Trucking and Shipping - 1.40%
Kirby Corporation*		32,500		1,852,500
Utilities - Electric - 3.54%
Cleco Corporation		60,700		1,346,326
ITC Holdings Corp.		35,700		1,858,542
UIL Holdings Corporation		48,700		1,467,331
				4,672,199
Utilities - Gas and Pipeline - 1.00%
Southwest Gas Corporation		46,958		1,312,946
TOTAL COMMON STOCKS - 94.39%			$	124,520,414
(Cost: $125,199,889)

SHORT-TERM SECURITIES	Principal Amount in Thousands			Value
Commercial Paper - 1.68%
Household - General
Fortune Brands Inc.,
3.4%, 4-1-08	$2,215		$	2,215,000
United States Government and Government       Agency Obligations - 3.79%
Federal Home Loan Bank,
1.5%, 4-1-08		5,000		5,000,000
TOTAL SHORT-TERM SECURITIES - 5.47%			$	7,215,000
(Cost: $7,215,000)
TOTAL INVESTMENT SECURITIES - 99.86%			$	131,735,414
(Cost: $132,414,889)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.14%				179,608
NET ASSETS - 100.00%			$	131,915,022

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
     March 31, 2008
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $132,415) (Notes 1 and 3)	$	131,735
Receivables:
Investment securities sold		1,039
Fund shares sold		230
Dividends and interest		107
Prepaid and other assets		30
Total assets		133,141
LIABILITIES
Payable for investment securities purchased		680
Payable to Fund shareholders		296
Accrued management fee (Note 2)		94
Accrued shareholder servicing (Note 2)		67
Due to custodian		30
Accrued service fee (Note 2)		25
Accrued accounting services fee (Note 2)		6
Accrued distribution fee (Note 2)		––	*
Other		28
Total liabilities		1,226
Total net assets	$	131,915
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	144,541
Accumulated undistributed loss:
Accumulated undistributed net investment loss		(17	)
Accumulated undistributed net realized loss on investment transactions		(11,929	)
Net unrealized depreciation in value of investments		(680	)
Net assets applicable to outstanding units of capital	$	131,915
Net asset value per share (net assets divided by shares outstanding):
Class A	$12.96
Class B	$12.34
Class C	$12.51
Class E	$12.98
Class I	$13.20
Class Y	$13.13
Capital shares outstanding:
Class A		8,041
Class B		447
Class C		635
Class E		7
Class I		35
Class Y		1,046

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Operations
     IVY SMALL CAP VALUE FUND
     For the Fiscal Year Ended March 31, 2008
     (In Thousands)

INVESTMENT LOSS
Income (Note 1B):
Dividends	$	1,479
Interest and amortization		295
Total income		1,774
Expenses (Note 2):
Investment management fee		1,340
Shareholder servicing:
Class A		594
Class B		59
Class C		57
Class E		––	*
Class I		1
Class Y		27
Service fee:
Class A		284
Class B		19
Class C		27
Class Y		44
Distribution fee:
Class A		18
Class B		56
Class C		81
Class E		––	*
Registration fees		80
Accounting services fee		70
Custodian fees		18
Audit fees		13
Legal fees		2
Other		69
Total expenses		2,859
Net investment loss		(1,085	)
REALIZED AND UNREALIZED LOSS
ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on investments		(9,224	)
Unrealized depreciation in value of investments during the period		(14,609	)
Net loss on investments		(23,833	)
Net decrease in net assets resulting from operations	$	(24,918	)

*Not shown due to rounding.

See Notes to Financial Statements.

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

		For the fiscal year ended March 31,
		2008			2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss	$	(1,085	)	$	(428	)
Realized net gain (loss) on investments		(9,224	)		13,402
Unrealized depreciation		(14,609	)		(1,667	)
Net increase (decrease) in net assets resulting                        from operations		(24,918	)		11,307
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A		(––	)		(––	)
Class B		(––	)		(––	)
Class C		(––	)		(––	)
Class E		(––	)		NA
Class I		(––	)		NA
Class Y		(––	)		(––	)
Realized gains on investment transactions:
Class A		(6,914	)		(8,051	)
Class B		(343	)		(627	)
Class C		(513	)		(925	)
Class E		(6	)		NA
Class I		(31	)		NA
Class Y		(939	)		(1,624	)
		(8,746	)		(11,227	)
Capital share transactions (Note 5)		2,515			35,884
Total increase (decrease)		(31,149	)		35,964
NET ASSETS
Beginning of period		163,064			127,100
End of period	$	131,915		$	163,064
Undistributed net investment loss	$	(17	)	$	(14	)

(1)See "Financial Highlights" on pages 47 - 52.

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 fiscal year ended March 31,												For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005			3-31-04				7-31-03
Net asset value, beginning of period	$	16.22		$	16.24		$	16.88		$	16.68			$	13.02			$	12.25
Income (loss) from investment operations:
Net investment loss		(0.10	)		(0.03	)		(0.11	)		(0.13	)			(0.08	)			(0.09	)
Net realized and unrealized gain            (loss) on investments		(2.28	)		1.35			2.62			1.52				3.76				1.74
Total from investment operations		(2.38	)		1.32			2.51			1.39				3.68				1.65
Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)			(0.00	)*
Capital gains		(0.88	)		(1.34	)		(3.15	)		(1.19	)			(0.02	)			(0.88	)
Total distributions		(0.88	)		(1.34	)		(3.15	)		(1.19	)			(0.02	)			(0.88	)
Net asset value, end of period	$	12.96		$	16.22		$	16.24		$	16.88			$	16.68			$	13.02
Total return (1)	- -15.19		%		8.26	%		16.44	%		8.23	%			28.29	%			14.91	%
Net assets, end of period (in millions)	$104			$121			$86			$66				$65				$59
Ratio of expenses to average net assets		1.76	%		1.74	%		1.80	%		1.76	%			1.65	% (2)(3)			1.53	%
Ratio of net investment loss to average       net assets		- -0.63	%		- -0.24	%		- -0.76	%		- -0.79	%			- -0.76	% (2)(3)			- -0.82	%
Portfolio turnover rate		118	%		123	%		157	%		124	%			27	%			54	%

*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 fiscal year ended March 31,												For the period from 12-8-03 (1) to
	2008			2007			2006			2005			3-31-04
Net asset value, beginning of period	$	15.48		$	15.72		$	16.59		$	16.61			$	15.27
Income (loss) from investment operations:
Net investment loss		(0.35	)		(0.14	)		(0.25	)		(0.23	)			(0.05	)
Net realized and unrealized gain (loss)             on investments		(2.08	)		1.24			2.53			1.40				1.41
Total from investment operations		(2.43	)		1.10			2.28			1.17				1.36
Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Capital gains		(0.71	)		(1.34	)		(3.15	)		(1.19	)			(0.02	)
Total distributions		(0.71	)		(1.34	)		(3.15	)		(1.19	)			(0.02	)
Net asset value, end of period	$	12.34		$	15.48		$	15.72		$	16.59			$	16.61
Total return	- -16.14		%		7.11	%		15.28	%		6.92	%			8.93	%
Net assets, end of period (in millions)	$5			$9			$7			$5				$1
Ratio of expenses to average net assets		2.83	%		2.82	%		2.84	%		3.02	%			3.79	% (2)
Ratio of net investment loss to average net assets		- -1.69	%		- -1.33	%		- -1.80	%		- -1.88	%			- -2.93	% (2)
Portfolio turnover rate		118	%		123	%		157	%		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 fiscal year ended March 31,												For the period from 12-8-03 (1) to
	2008			2007			2006			2005			3-31-04
Net asset value, beginning of period	$	15.69		$	15.87		$	16.67		$	16.63			$	15.27
Income (loss) from investment operations:
Net investment loss		(0.28	)		(0.12	)		(0.21	)		(0.19	)			(0.05	)
Net realized and unrealized gain (loss)             on investments		(2.14	)		1.28			2.56			1.42				1.43
Total from investment operations		(2.42	)		1.16			2.35			1.23				1.38
Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Capital gains		(0.76	)		(1.34	)		(3.15	)		(1.19	)			(0.02	)
Total distributions		(0.76	)		(1.34	)		(3.15	)		(1.19	)			(0.02	)
Net asset value, end of period	$	12.51		$	15.69		$	15.87		$	16.67			$	16.63
Total return	- -15.91		%		7.43	%		15.64	%		7.28	%			9.06	%
Net assets, end of period (in millions)	$8			$12			$10			$8				$2
Ratio of expenses to average net assets		2.54	%		2.52	%		2.54	%		2.65	%			2.83	% (2)
Ratio of net investment loss to average net assets		- -1.40	%		- -1.04	%		- -1.50	%		- -1.53	%			- -2.00	% (2)
Portfolio turnover rate		118	%		123	%		157	%		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 E Shares ⁽¹⁾
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (2) through
	3-31-08
Net asset value, beginning of period	$	16.23
Loss from investment operations:
Net investment loss		(0.02	)
Net realized and unrealized loss on investments		(2.30	)
Total from investment operations		(2.32	)
Less distributions from:
Net investment income		(0.00	)
Capital gains		(0.93	)
Total distributions		(0.93	)
Net asset value, end of period	$	12.98
Total return (3)	- -14.82		%
Net assets, end of period (in thousands)	$85
Ratio of expenses to average net assets		1.26	% (4)
Ratio of net investment loss to average net assets		- -0.14	% (4)
Portfolio turnover rate		118	% (5)

(1)See Note 5 to Financial Statements.

(2)Commencement of operations of the class.

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

(4)Annualized.

(5)For the twelve months ended March 31, 2008.

See Notes to Financial Statements.

Financial Highlights
     IVY SMALL CAP VALUE FUND
     Class I Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period	$	16.43
Loss from investment operations:
Net investment loss		(0.01	)
Net realized and unrealized loss on investments		(2.26	)
Total from investment operations		(2.27	)
Less distributions from:
Net investment income		(0.00	)
Capital gains		(0.96	)
Total distributions		(0.96	)
Net asset value, end of period	$	13.20
Total return	- -14.39		%
Net assets, end of period (in thousands)	$463
Ratio of expenses to average net assets		1.19	% (2)
Ratio of net investment loss to average net assets		- -0.07	% (2)
Portfolio turnover rate		118	% (3)

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the twelve months ended March 31, 2008.

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 fiscal year ended March 31,												For the period from 12-8-03 (1) to
	2008			2007			2006			2005			3-31-04
Net asset value, beginning of period	$	16.42		$	16.36		$	16.92		$	16.68			$	15.27
Income (loss) from investment operations:
Net investment income (loss)		(0.04	) (2)		0.03			(0.06	)		(0.10	)			(0.04	)
Net realized and unrealized gain (loss)             on investments		(2.32	) (2)		1.37			2.65			1.53				1.47
Total from investment operations		(2.36	)		1.40			2.59			1.43				1.43
Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Capital gains		(0.93	)		(1.34	)		(3.15	)		(1.19	)			(0.02	)
Total distributions		(0.93	)		(1.34	)		(3.15	)		(1.19	)			(0.02	)
Net asset value, end of period	$	13.13		$	16.42		$	16.36		$	16.92			$	16.68
Total return	- -14.89		%		8.70	%		16.88	%		8.48	%			9.38	%
Net assets, end of period (in millions)	$14			$21			$24			$25				$25
Ratio of expenses to average net assets		1.39	%		1.39	%		1.41	%		1.53	%			1.60	% (3)
Ratio of net investment income (loss) to average       net assets		- -0.25	%		0.08	%		- -0.37	%		- -0.56	%			- -0.82	% (3)
Portfolio turnover rate		118	%		123	%		157	%		124	%			27	% (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.

Manager's Discussion of Ivy Value Fund
     March 31, 2008

Below, Matthew T. Norris, CFA, portfolio manager of the Ivy Value Fund, discusses positioning, performance and results for the fiscal year ended March 31, 2008. He has managed the Fund since its inception and has 16 years of industry experience.

STYLE
VALUE	BLEND	GROWTH
X			LARGE	CAPITALIZATION
			MEDIUM
			SMALL

This diagram shows the Fund's equity investment style and the size of companies in the Fund, as measured by market capitalization. Shaded areas reflect quarterly data for the past three years. Source: Morningstar

The Fund fell 9.83 percent (Class A shares at net asset value). By comparison, the Russell 1000 Value Index (reflecting the performance of securities that generally represent the value sector of the stock market), declined 10.00 percent during the period, and the Lipper Large-Cap Value Funds Universe Average (generally reflecting the performance of the universe of funds with similar investment objectives), decreased 8.42 percent. Please note that Fund returns include applicable fees and expenses while index returns do not include any such fees.

We were overweight energy, underweight financial services

The fiscal year featured a gradually weakening equity market finally showing signs of acceleration during the first calendar quarter of 2008; this undulating effect followed solid market performance over the last four years. Taking a look at the previous year from a sector standpoint, the financial services sector demonstrated the worst performance, while the top performers emanated from more defensive areas, such as consumer staples, as well as areas exposed to foreign growth, such as basic materials.

We did marginally better than our benchmark (before taking into account the Fund's sales charge) because we underweighted financial services. However, some of our largest holdings in this sector over the past year such as Bank of America Corporation declined substantially as a result of mounting subprime mortgage and credit card losses, and this negatively affected the Fund's results relative to our peers. Bank of America Corporation, one of the nation's largest commercial banks, reported $7.3 billion in writeoffs from subprime mortgage lending this past year. We maintained a position because we feel they have enough access to resources to recover. The bank received a $13 billion capital infusion this past year from various investors.

In general, the equity market decline largely has been driven by a vicious and continuing credit cycle. In an effort to keep pace with earnings growth, financial companies had been too willing to lend money to high-risk borrowers who were without means to repay their loans. The devastating effect has been increased credit losses and a restriction on lending of all types, as financial institutions have become leery of lending money to anyone. The Federal Reserve has responded to this debacle by lowering short-term interest rates, which can have mixed results: while such a move likely will encourage lending, it typically takes close to a year for these actions to have any noticeable effect.

Given all this, the Fund has been positioned defensively, holding extra cash reserves during this sell off. Many of the financial companies are reaching valuations where we feel the bad news is baked in; as such, we anticipate increasing our exposure to financials over time.

Our outlook

We plan to make no changes in the management philosophy of the Fund. We continue to search diligently, one company at a time, for names that we think offer good value investment opportunities. We continue to believe this is the best way to achieve strong, consistent returns over a full market cycle.

Top 10 Equity Holdings as of March 31, 2007	March 31, 2008
Exxon Mobil Corporation Bank of America Corporation J.P.Morgan Chase & Co. Hewlett-Packard Company Unum Group Altria Group, Inc. ChevronTexaco Corporation Travelers Companies, Inc. (The) Citigroup Inc. FirstEnergy Corp.	Bank of America Corporation Chevron Corporation Raytheon Company Exxon Mobil Corporation McKesson Corporation Mirant Corporation NRG Energy, Inc. Hewlett-Packard Company Verizon Communications Inc. Travelers Companies, Inc. (The)

See your advisor or www.ivyfunds.com for more information on the Fund's most recently published Top 10 Equity Holdings.

As with any mutual fund, the value of the Fund's shares will change, and you could lose money on your investment.

Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor and, in the opinion of the Fund's manager, undervalued. The value of a security believed by the Fund's manager to be undervalued may never reach what is believed to be its full value, or such security's value may decrease. These and other risks are more fully described in the Fund's prospectus.

The Fund's performance noted above is at net asset value (NAV), and does not include the effect of any applicable sales charges. If reflected, the sales charge would reduce the performance noted.

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

Comparison of Change in Value of
$10,000 Investment

Ivy Value Fund, Class A Shares(1)	$	12,816
Russell 1000 Value Index	$	19,278
Lipper Large-Cap Value Funds Universe Average	$	17,500

		IVY VALUE FUND, CLASS A	RUSSELL 1000	LIPPER LARGE-CAP VALUE FUNDS UNIVERSE
		SHARES	VALUE INDEX	AVERAGE
SEPT	1998	9,425	10,000	10,000
SEPT	1999	10,366	11,874	11,549
SEPT	2000	10,504	12,920	12,667
SEPT	2001	8,827	11,765	11,763
JULY	2002	8,320	10,913	10,822
JULY	2003	8,922	12,084	11,743
MARCH	2004	10,394	14,297	13,731
MARCH	2005	11,559	16,179	15,026
MARCH	2006	12,454	18,329	16,773
MARCH	2007	14,213	21,420	19,108
MARCH	2008	12,816	19,278	17,500

Please note that the performance of the Fund's other share classes will be greater or less than the performance shown above for Class A based on the differences in loads and fees paid by shareholders investing in the different classes.

(1)The value of the investment in the Fund is impacted by the sales load at the time of the investment and by the ongoing expenses of the Fund and assumes reinvestment of dividends and distributions.

Average Annual Total Return(2)
	Class A	Class B	Class C	Class E(3)	Class I	Class Y
1-year period ended 3-31-08	- -15.02%	- -14.07%	- -10.56%	––	––	- -9.60%
5-year period ended 3-31-08	9.71%	––	––	––	––	––
10-year period ended 3-31-08	0.54%	––	––	––	––	––
Since inception of Class(4) through 3-31-08	––	5.20%	5.72%	––	––	6.85%
Cumulative return since inception of Class(4) through 3-31-08	––	––	––	- -14.95%	- -9.63%	––

(2)Data quoted is past performance and is based on deduction of the maximum applicable sales load for each of the periods. Current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Please visit www.ivyfunds.com for the Fund's most recent month-end performance. Class A and Class E shares carry a maximum front-end sales load of 5.75%. Class B and Class C shares carry maximum contingent deferred sales charges (CDSC) of 5% and 1%, respectively. (Accordingly, the Class C shares reflect no CDSC since it only applies to Class C shares redeemed within twelve months after purchase.) Class I and Class Y shares are not subject to sales charges.

(3)Class E shares are not currently available for investment.

(4)12-8-03 for Class B, Class C and Class Y shares and 4-2-07 for Class E and Class I shares (the date on which shares were first acquired by shareholders).

Past performance is not necessarily indicative of future performance. Indexes are unmanaged. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

The Advantus Cornerstone Fund merged into the Ivy Value Fund on December 8, 2003. The performance shown for periods prior to this date is that of the Advantus Cornerstone Fund Class A shares, restated to reflect current sales charges applicable to Ivy Value Fund Class A shares. Performance has not been restated to reflect the fees and expenses applicable to the Ivy Value Fund. If these expenses were reflected, performance shown would differ.

SHAREHOLDER SUMMARY OF IVY VALUE FUND

Portfolio Highlights

On March 31, 2008, Ivy Value Fund had net assets totaling $65,476,961 invested in a diversified portfolio of:

91.45%	Domestic Common Stocks
4.39%	Foreign Common Stocks
4.16%	Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on March 31, 2008,
your Fund owned:

Sector Weightings

Financial Services Stocks	$	17.96
Energy Stocks	$	17.30
Technology Stocks	$	16.71
Utilities Stocks	$	11.13
Health Care Stocks	$	10.14
Miscellaneous Stocks(1)	$	9.87
Consumer Nondurables Stocks	$	8.70
Cash and Cash Equivalents	$	4.16
Capital Goods Stocks	$	4.03

(1)Includes $1.53 Business Equipment and Services Stocks, $1.34 Multi-Industry Stocks, $2.39 Raw Materials Stocks, $1.76 Retail Stocks, $0.46 Shelter Stocks and $2.39 Transportation Stocks.

The Investments of Ivy Value Fund
March 31, 2008
COMMON STOCKS	Shares			Value
Aircraft - 5.20%
Lockheed Martin Corporation		6,500	$	645,450
Raytheon Company		42,700		2,758,847
				3,404,297
Banks - 4.59%
Bank of America Corporation		79,256		3,004,595
Beverages - 1.01%
Diageo plc, ADR		8,150		662,758
Business Equipment and Services - 1.53%
Office Depot, Inc.		16,300		180,115
Waste Management, Inc.		24,400		818,864
				998,979
Capital Equipment - 2.14%
Illinois Tool Works Inc.		28,980		1,397,705
Communications Equipment - 2.03%
Nokia Corporation, Series A, ADR		41,700		1,327,311
Computers - Main and Mini - 7.57%
Hewlett-Packard Company		51,900		2,369,754
International Business Machines Corporation		16,100		1,853,754
Xerox Corporation		49,100		735,027
				4,958,535
Computers - Peripherals - 0.80%
EMC Corporation (A)*		36,700		526,278
Containers - 1.06%
Pactiv Corporation*		26,600		697,186
Defense - 1.11%
General Dynamics Corporation		8,700		725,319
Finance Companies - 3.79%
Blackstone Group L.P. (The)		17,100		271,548
Capital One Financial Corporation		30,400		1,496,288
Discover Financial Services		13,350		218,540
Fannie Mae		18,900		497,448
				2,483,824
Food and Related - 3.59%
General Mills, Inc.		19,400		1,161,672
Kraft Foods Inc.		38,221		1,185,233
				2,346,905
Health Care - Drugs - 6.40%
Endo Pharmaceuticals Holdings Inc.*		41,900		1,002,458
McKesson Corporation		49,500		2,592,315
Pfizer Inc.		28,600		598,598
				4,193,371
Health Care - General - 2.22%
AmerisourceBergen Corporation		35,500		1,454,790
Hospital Supply and Management - 1.52%
Coventry Health Care, Inc.*		24,700		996,645
Insurance - Property and Casualty - 6.18%
Aetna Inc.		15,700		660,813
Allstate Corporation (The)		9,800		470,988
Everest Re Group, Ltd. (A)		7,800		698,334
Travelers Companies, Inc. (The)		42,452		2,031,328
XL Capital Ltd, Class A		6,300		186,165
				4,047,628
Metal Fabrication - 1.89%
Loews Corporation, Carolina Group		17,000		1,233,350
Mining - 1.13%
Freeport-McMoRan Copper & Gold Inc., Class B		7,700		740,894
Multiple Industry - 1.34%
Altria Group, Inc.		39,400		874,680
Petroleum - International - 17.30%
Apache Corporation		10,500		1,268,610
Chevron Corporation		34,200		2,919,312
ConocoPhillips		25,500		1,943,355
Devon Energy Corporation		12,900		1,345,857
Exxon Mobil Corporation		32,206		2,723,983
Marathon Oil Corporation		24,700		1,126,320
				11,327,437
Railroad - 2.39%
Union Pacific Corporation (A)		12,500		1,567,250
Real Estate Investment Trust - 0.46%
Annaly Capital Management, Inc.		19,700		301,804
Retail - General Merchandise - 1.43%
Macy's Inc.		40,600		936,236
Retail - Specialty Stores - 0.33%
Home Depot, Inc. (The)		7,600		212,572
Security and Commodity Brokers - 3.40%
J.P. Morgan Chase & Co.		36,202		1,554,876
Morgan Stanley (A)		14,700		671,790
				2,226,666
Steel - 1.26%
Nucor Corporation		12,200		826,428
Tobacco - 3.04%
Philip Morris International Inc.*		39,400		1,992,852
Utilities - Electric - 7.76%
Mirant Corporation*		70,200		2,554,578
NRG Energy, Inc.*		64,800		2,526,552
				5,081,130
Utilities - Telephone - 3.37%
Sprint Nextel Corporation		20,700		138,483
Verizon Communications Inc.		56,800		2,070,360
				2,208,843
TOTAL COMMON STOCKS - 95.84%			$	62,756,268
(Cost: $55,393,205)

COMMERCIAL PAPER - 4.44%	Principal Amount in Thousands
Household - General Products
Fortune Brands Inc.,
3.4%, 4-1-08		$2,907	$	2,907,000
(Cost: $2,907,000)
TOTAL INVESTMENT SECURITIES - 100.28%			$	65,663,268
(Cost: $58,300,205)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.28%)				(186,307	)
NET ASSETS - 100.00%			$	65,476,961

Notes to Schedule of Investments
Certain acronyms may be used within the body of the Fund's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.
*No dividends were paid during the preceding 12 months.
(A)Securities serve as cover for the following written options outstanding at March 31, 2008. (See Note 6 to financial statements):
	Underlying Security	Contracts Subject to Call	Expiration Month/ Exercise Price	Premium Received			Market Value
	Union Pacific Corporation	17	April/135		$	2,839	$	1,088
	Underlying Security	Contracts Subject to Put	Expiration Month/ Exercise Price	Premium Received			Market Value
	EMC Corporation	218	April/14		$	10,464	$	7,194
	Morgan Stanley	64	April/35			7,168		1,920
	Everest Re Group, Ltd.	27	April/85			2,710		2,295
					$	20,342	$	11,409
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
     March 31, 2008
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $58,300) (Notes 1 and 3)	$	65,663
Receivables:
Fund shares sold		116
Dividends and interest		111
Investment securities sold		28
Prepaid and other assets		23
Total assets		65,941
LIABILITIES
Payable to Fund shareholders		258
Payable for investment securities purchased		75
Accrued management fee (Note 2)		40
Accrued shareholder servicing (Note 2)		31
Accrued service fee (Note 2)		24
Outstanding written options - at value (premium received - $23) (Note 6)		12
Accrued accounting services fee (Note 2)		4
Accrued distribution fee (Note 2)		––	*
Due to custodian		––	*
Other		20
Total liabilities		464
Total net assets	$	65,477
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	60,697
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		15
Accumulated undistributed net realized loss on investment transactions		(2,609	)
Net unrealized appreciation in value of investments		7,374
Net assets applicable to outstanding units of capital	$	65,477
Net asset value per share (net assets divided by shares outstanding):
Class A	$15.95
Class B	$15.76
Class C	$15.83
Class E	$15.97
Class I	$15.97
Class Y	$15.96
Capital shares outstanding:
Class A		3,578
Class B		263
Class C		231
Class E		6
Class I		6
Class Y		26

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Operations
     IVY VALUE FUND
     For the Fiscal Year Ended March 31, 2008
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $1)	$	1,672
Interest and amortization		144
Total income		1,816
Expenses (Note 2):
Investment management fee		594
Shareholder servicing:
Class A		255
Class B		34
Class C		24
Class E		––	*
Class I		––	*
Class Y		1
Service fee:
Class A		175
Class B		15
Class C		13
Class Y		1
Distribution fee:
Class A		8
Class B		44
Class C		38
Class E		––	*
Registration fees		71
Accounting services fee		48
Audit fees		13
Custodian fees		11
Legal fees		1
Other		36
Total expenses		1,382
Net investment income		434
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		2,014
Realized net loss on written options		(358	)
Realized net gain on investments		1,656
Unrealized depreciation in value of securities during the period	(10,139		)
Unrealized depreciation in value of written options during the period		(13	)
Unrealized depreciation in value of investments during the period	(10,152		)
Net loss on investments		(8,496	)
Net decrease in net assets resulting from operations	$	(8,062	)

*Not shown due to rounding.

See Notes to Financial Statements.

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

	For the Fiscal Year ended March 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
��      Net investment income	$	434		$	544
Realized net gain on investments		1,656			2,770
Unrealized appreciation (depreciation)		(10,152	)		7,603
Net increase (decrease) in net assets resulting                        from operations		(8,062	)		10,917
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A		(458	)		(470	)
Class B		(––	)		(––	)
Class C		(––	)		(1	)
Class E		(1	)		NA
Class I		(1	)		NA
Class Y		(3	)		(51	)
Realized gains on investment transactions:
Class A		(4,876	)		(1,502	)
Class B		(372	)		(120	)
Class C		(322	)		(106	)
Class E		(7	)		NA
Class I		(7	)		NA
Class Y		(19	)		(8	)
		(6,066	)		(2,258	)
Capital share transactions (Note 5)		(4,139	)		(4,333	)
Total increase (decrease)		(18,267	)		4,326
NET ASSETS
Beginning of period		83,744			79,418
End of period	$	65,477		$	83,744
Undistributed net investment income	$	15		$	44

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

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,												For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005			3-31-04				7-31-03
Net asset value, beginning of period	$	19.04		$	17.17		$	16.04		$	14.54			$	12.54			$	11.81
Income (loss) from investment      operations:
Net investment income		0.12			0.13			0.10			0.15				0.08				0.12
Net realized and unrealized gain       (loss) on investments		(1.85	)		2.28			1.14			1.48				1.98				0.72
Total from investment operations		(1.73	)		2.41			1.24			1.63				2.06				0.84
Less distributions from:
Net investment income		(0.12	)		(0.13	)		(0.11	)		(0.13	)			(0.06	)			(0.11	)
Capital gains		(1.24	)		(0.41	)		(0.00	)		(0.00	)			(0.00	)			(0.00	)
Total distributions		(1.36	)		(0.54	)		(0.11	)		(0.13	)			(0.06	)			(0.11	)
Net asset value, end of period	$	15.95		$	19.04		$	17.17		$	16.04			$	14.54			$	12.54
Total return (1)		- -9.83	%		14.12	%		7.75	%		11.21	%			16.32	%			7.23	%
Net assets, end of period       (in millions)	$57			$73			$58			$41				$52				$64
Ratio of expenses to average net       assets including expense waiver		1.52	%		1.49	%		1.53	%		1.47	%			1.45	% (2)(3)			1.29	%
Ratio of net investment income to       average net assets including       expense waiver		0.63	%		0.76	%		0.65	%		0.92	%			0.61	% (2)(3)			1.05	%
Ratio of expenses to average net       assets excluding expense waiver		1.52	% (4)		1.49	% (4)		1.53	% (4)		1.47	% (4)			1.52	% (2)(3)			1.50	%
Ratio of net investment income to       average net assets excluding       expense waiver		0.63	% (4)		0.76	% (4)		0.65	% (4)		0.92	% (4)			0.53	% (2)(3)			0.84	%
Portfolio turnover rate		66	%		61	%		63	%		81	%			86	%			123	%

(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.

(4)There was no waiver of expenses during the period.

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 fiscal year ended March 31,											For the period from 12-8-03 (1) to
	2008			2007			2006			2005		3-31-04
Net asset value, beginning of period	$	18.83		$	17.04		$	15.97		$	14.50		$	13.63
Income (loss) from investment operations:
Net investment income (loss)		(0.09	)		(0.03	)		(0.04	)		0.03			0.01
Net realized and unrealized gain (loss)             on investments		(1.80	)		2.23			1.12			1.44			0.90
Total from investment operations		(1.89	)		2.20			1.08			1.47			0.91
Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.01	)		(0.00	)		(0.04	)
Capital gains		(1.18	)		(0.41	)		(0.00	)		(0.00	)		(0.00	)
Total distributions		(1.18	)		(0.41	)		(0.01	)		(0.00	)		(0.04	)
Net asset value, end of period	$	15.76		$	18.83		$	17.04		$	15.97		$	14.50
Total return	- -10.72		%		12.99	%		6.73	%		10.14	%		6.65	%
Net assets, end of period (in millions)	$4			$6			$5			$2			$1
Ratio of expenses to average net assets		2.51	%		2.46	%		2.50	%		2.53	%		3.12	% (2)
Ratio of net investment income (loss) to average       net assets		- -0.35	%		- -0.21	%		- -0.33	%		0.07	%		- -1.29	% (2)
Portfolio turnover rate		66	%		61	%		63	%		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 fiscal year ended March 31,											For the period from 12-8-03 (1) to
	2008			2007			2006			2005		3-31-04
Net asset value, beginning of period	$	18.90		$	17.08		$	16.00		$	14.51		$	13.63
Income (loss) from investment operations:
Net investment income (loss)		(0.06	)		(0.01	)		(0.04	)		0.03			0.02
Net realized and unrealized gain (loss)             on investments		(1.81	)		2.24			1.13			1.46			0.90
Total from investment operations		(1.87	)		2.23			1.09			1.49			0.92
Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.01	)		(0.00	)		(0.04	)
Capital gains		(1.20	)		(0.41	)		(0.00	)		(0.00	)		(0.00	)
Total distributions		(1.20	)		(0.41	)		(0.01	)		(0.00	)		(0.04	)
Net asset value, end of period	$	15.83		$	18.90		$	17.08		$	16.00		$	14.51
Total return	- -10.56		%		13.09	%		6.80	%		10.27	%		6.73	%
Net assets, end of period (in millions)	$4			$5			$4			$3			$1
Ratio of expenses to average net assets		2.41	%		2.38	%		2.41	%		2.42	%		2.90	% (2)
Ratio of net investment income (loss) to average       net assets		- -0.25	%		- -0.12	%		- -0.23	%		0.15	%		- -1.18	% (2)
Portfolio turnover rate		66	%		61	%		63	%		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 E Shares ⁽¹⁾
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (2) through
	3-31-08
Net asset value, beginning of period		$	19.09
Income (loss) from investment operations:
Net investment income			0.18
Net realized and unrealized loss on investments			(1.90	)
Total from investment operations			(1.72	)
Less distributions from:
Net investment income			(0.16	)
Capital gains			(1.24	)
Total distributions			(1.40	)
Net asset value, end of period		$	15.97
Total return (3)			- -9.76	%
Net assets, end of period (in thousands)		$90
Ratio of expenses to average net assets			1.18	% (4)
Ratio of net investment income to average net assets			0.98	% (4)
Portfolio turnover rate			66	% (5)

(1)See Note 5 to Financial Statements.

(2)Commencement of operations of the class.

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

(4)Annualized.

(5)For the twelve months ended March 31, 2008.

See Notes to Financial Statements.

Financial Highlights
     IVY VALUE FUND
     Class I Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	19.10
Income (loss) from investment operations:
Net investment income			0.20
Net realized and unrealized loss on investments			(1.90	)
Total from investment operations			(1.70	)
Less distributions from:
Net investment income			(0.19	)
Capital gains			(1.24	)
Total distributions			(1.43	)
Net asset value, end of period		$	15.97
Total return			- -9.63	%
Net assets, end of period (in thousands)		$90
Ratio of expenses to average net assets			1.07	% (2)
Ratio of net investment income to average net assets			1.09	% (2)
Portfolio turnover rate			66	% (3)

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the twelve months ended March 31, 2008.

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 fiscal year ended March 31,											For the period from 12-8-03 (1) to
	2008			2007			2006			2005		3-31-04
Net asset value, beginning of period	$	19.04		$	17.18		$	16.05		$	14.54		$	13.63
Income (loss) from investment operations:
Net investment income		0.16	(2)		0.22	(2)		0.13			0.17			0.01
Net realized and unrealized gain (loss)             on investments		(1.85	)(2)		2.22	(2)		1.15			1.49			0.95
Total from investment operations		(1.69	)		2.44			1.28			1.66			0.96
Less distributions from:
Net investment income		(0.15	)		(0.17	)		(0.15	)		(0.15	)		(0.05	)
Capital gains		(1.24	)		(0.41	)		(0.00	)		(0.00	)		(0.00	)
Total distributions		(1.39	)		(0.58	)		(0.15	)		(0.15	)		(0.05	)
Net asset value, end of period	$	15.96		$	19.04		$	17.18		$	16.05		$	14.54
Total return		- -9.60	%		14.28	%		7.99	%		11.44	%		7.05	%
Net assets, end of period (in thousands)	$419			$294		$12,286			$20,286			$22,379
Ratio of expenses to average net assets		1.31	%		1.29	%		1.31	%		1.34	%		1.48	% (3)
Ratio of net investment income to average net assets		0.85	%		0.96	%		0.89	%		1.09	%		0.35	% (3)
Portfolio turnover rate		66	%		61	%		63	%		81	%		86	% (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.

Manager's Discussion of
Ivy Managed European/Pacific Fund
     March 31, 2008

Below, Michael L. Avery, portfolio manager of the Ivy Managed European/Pacific Fund, discusses positioning, performance and results for the fiscal period ended March 31, 2008. He has managed the Fund since its inception on April 2, 2007, and has 29 years of industry experience.

Investment Styles of Underlying Funds

[1] Ivy European Opportunities Fund

[2] Ivy Pacific Opportunities Fund

STYLE
VALUE	BLEND	GROWTH
	[1][2]		LARGE	CAPITALIZATION
			MEDIUM
			SMALL

This diagram shows the equity investment style and the size of companies, as measured by market capitalization, within each of the underlying funds that comprise the Ivy Managed European/Pacific Fund. The diagram reflects quarterly data for the past three years for the underlying funds. Source: Morningstar

The Fund rose 2.67 percent (Class A shares at net asset value) for the fiscal period beginning on April 2, 2007 and ended on March 31, 2008. By comparison, the MSCI AC Asia ex Japan Index (reflecting the performance of stocks that generally represent the Asia equity market, not including Japan) climbed 19.12 percent, and the MSCI Europe Index rose 0.18 percent for the same period. The MSCI Europe Index reflects the performance of stocks that generally represent the Eurozone and other parts of Europe. Please note that Fund returns include applicable fees and expenses while index returns do not include any such fees.

Asia outpaced Europe for most of the fiscal year

Economies in Europe and Asia started strong during the Fund's initial fiscal period. A rapid expansion in Germany, along with merger-and-acquisition activity, drove European markets the first half of the period. Asia also experienced impressive growth, fueled by exports, rising real estate values, infrastructure build-out and domestic consumption.

That positive momentum gave way to significant declines in the second six months of the fiscal period, however. Credit woes in the U.S., triggered by subprime losses, spread to international economies starting last summer. Europe also was hampered by central bank intervention, significant deleveraging and news of the debacle surrounding a series of tiered and incorrect bets made by two Bear Stearns hedge funds, which led to them using bank money in an effort to protect clients.

The Bank of England cut base rates by 25 basis points (0.25 percent) to 5.25 percent in response to increased signs of economic weakness. Compared with the aggressive moves by the U.S. Federal Reserve, however, the European Central Bank seems more concerned about inflation and may be much slower to adjust interest rates further. The continued divergence in U.S. and European monetary policy pushed the value of the euro above $1.50 for the first time.

In Asia, growth during the first three quarters of the fiscal period gave way to rising inflation and investor anxiety. The final three months of the period, in fact, proved to be the single most challenging quarter in the Asian equity market in 30 years. The stock markets in China and Asia both dropped more than 20 percent as the Asian economy faced multiple headwinds and investors lost their appetite for risk. Rising inflation and volatility related to the western world's credit crisis fueled investor concerns that China's government would raise interest rates.

Weighting focused on Europe

By investing in two Ivy international funds, the Fund seeks to benefit from a combined portfolio of stocks in Europe and Asia-Pacific. During our initial fiscal period, we allocated the greatest portion of the portfolio (about 60 percent as of March 31, 2008) to Ivy European Opportunities Fund. Although we feel this region has lower long-term growth prospects than Asia, we believed Europe offered more relative stability, less volatility and greater value than developing markets such as China and India, which suffered sharp declines in the final quarter of the fiscal period.

The European weighting increased the Fund's exposure to strong gains from stock selection in the energy sector. However, the Fund also suffered from the hard-hit financial sector, notably in Germany during the latter part of 2007 following the rescue of a German bank and problems in Lower Saxony.

Over the longer term, we may shift the mix back toward the Ivy Pacific Opportunities Fund (about 40 percent as of March 31, 2008) if this region becomes more attractive and high levels of inflation become less of an issue. In Asian-Pacific markets, high growth in domestic demand and the positive effects of global economic rebalancing are forces that we believe will ultimately reward investors. At the end of the fiscal period, the underlying Ivy Pacific Opportunities Fund was overweight industrials and information technology, and was underweight consumer staples and health care.

Our outlook

We expect markets to remain volatile in the near term, driven by sharp swings in investment sentiment. With a dim U.S. economic outlook, we believe the full implications for growth in the rest of the world have yet to be fully felt.

Many companies in Europe have not witnessed much of a slowdown so far, but the real question is how the environment will develop as the year progresses. Business confidence remains at relatively high levels, too. The closely-watched German IFO survey, which is positively correlated with developments in the German and Eurozone economies, is still at a level consistent with economic growth close to its trend rate.

While worldwide gross domestic product (GDP) growth for 2008 is forecast at 3.7 percent, down from early projections of 4.1 percent, we expect China, supported by robust domestic demand, to maintain GDP growth in the 9 percent range and India to post GDP growth of 7 percent. However, considering that export-driven economies of South Korea, Taiwan and Singapore depend on the health of the U.S., we expect ongoing weakness there.

Despite the sharp losses during the first three months of calendar year 2008, we remain positive on Asia because we believe that much of the region's economic fundamentals appear solid and we feel growth remains intact. Despite higher inflation, we see no real effort by governments to curb capital expenditures on infrastructure. We acknowledge that China may need more aggressive monetary tightening, but we believe this appropriate and responsible policy will help set the stage for continued economic and corporate gains.

As with any mutual fund, the value of the Fund's shares will change, and you could lose money on your investment. International investing involves additional risks, including currency fluctuations, political or economic conditions affecting the foreign country, and differences in accounting standards and foreign regulations. These and other risks are more fully described in the Fund's prospectus.

The Fund's performance noted above is at net asset value (NAV), and does not include the effect of any applicable sales charges. If reflected, the sales charge would reduce the performance noted.

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

Comparison of Change in Value of
$10,000 Investment

Ivy Managed European/Pacific Fund:
Class A Shares(1)(2)	$	9,676
Class B Shares(2)	$	10,187
Class C Shares(2)	$	10,190
Class E Shares(1)(2)	$	10,279
Class I Shares(2)	$	10,307
Class Y Shares(2)	$	10,277
MSCI Europe Index(3)	$	10,018
MSCI AC Asia ex Japan Index(3)	$	11,912

		IVY MANAGED EUROPEAN/ PACIFIC FUND, CLASS A	IVY MANAGED EUROPEAN/ PACIFIC FUND, CLASS B	IVY MANAGED EUROPEAN/ PACIFIC FUND, CLASS C	IVY MANAGED EUROPEAN/ PACIFIC FUND, CLASS E	IVY MANAGED EUROPEAN/ PACIFIC FUND, CLASS I	IVY MANAGED EUROPEAN/ PACIFIC FUND, CLASS Y	MSCI EUROPE	MSCI AC ASIA ex JAPAN
		SHARES	SHARES	SHARES	SHARES	SHARES	SHARES	INDEX	INDEX
Inception 4/2/07		9,425	10,000	10,000	10,000	10,000	10,000	10,000	10,000
JUNE	2007	10,415	11,040	11,030	11,050	11,060	11,050	10,831	11,610
SEPT	2007	11,225	11,880	11,880	11,920	11,940	11,920	11,014	13,792
DEC	2007	11,245	11,874	11,866	11,945	11,976	11,953	10,963	13,907
MARCH	2008	9,676	10,187	10,190	10,279	10,307	10,277	10,018	11,912

(1)The value of the investment in the Fund is impacted by the sales load at the time of the investment.

(2)The value of the investment in the Fund is impacted by the ongoing expenses of the Fund and assumes reinvestment of dividends and distributions.

(3)Because the Fund commenced operations on a date other than at the end of a month, and partial month calculations of the performance of the indexes (including income) are not available, investment in the indexes was effected as of March 31, 2007.

Cumulative Annual Total Return(4)
	Class A	Class B	Class C	Class E(5)	Class I	Class Y
1-year period ended 3-31-08	––	––	––	––	––	––
5-year period ended 3-31-08	––	––	––	––	––	––
10-year period ended 3-31-08	––	––	––	––	––	––
Since inception of Class(6) through 3-31-08	- -3.24%	- -3.02%	0.92%	- -3.12%	3.07%	2.77%

(4)Data quoted is past performance and is based on deduction of the maximum applicable sales load for each of the periods. Current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Please visit www.ivyfunds.com for the Fund's most recent month-end performance. Class A and Class E shares carry a maximum front-end sales load of 5.75%. Class B and Class C shares carry maximum contingent deferred sales charges (CDSC) of 5% and 1%, respectively. Class I and Class Y shares are not subject to sales charges.

(5)Class E shares are not currently available for investment.

(6)4-2-07 for Class A, Class B, Class C, Class E, Class I and Class Y shares (the date on which shares were first acquired by shareholders).

Past performance is not necessarily indicative of future performance. Indexes are unmanaged. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

SHAREHOLDER SUMMARY OF
IVY MANAGED EUROPEAN/PACIFIC FUND

Portfolio Highlights

As a shareholder of Ivy Managed European/Pacific Fund, for every $100 you had invested on March 31, 2008, your Fund owned:

Ivy European Opportunities Fund,       Class I	$	59.76
Ivy Pacific Opportunities Fund,       Class I	$	40.17
Cash and Cash Equivalents	$	0.07

The Investments of Ivy Managed European/Pacific Fund
March 31, 2008
AFFILIATED MUTUAL FUNDS		Shares			Value
Ivy European Opportunities Fund, Class I			997,705	$	34,720,142
Ivy Pacific Opportunities Fund, Class I	1,313,345				23,338,133
TOTAL AFFILIATED MUTUAL FUNDS - 99.93%				$	58,058,275
(Cost: $67,831,249)

SHORT-TERM SECURITIES - 0.28%	Principal Amount in Thousands
Repurchase Agreement
J.P. Morgan Securities, Inc., 1.1%       Repurchase Agreement dated 3-31-08 to be       repurchased at $161,005 on 4-1-08 (A) (Cost: $161,000)		$161	$	161,000
TOTAL INVESTMENT SECURITIES - 100.21%			$	58,219,275
(Cost: $67,992,249)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.21%)				(120,648	)
NET ASSETS - 100.00%			$	58,098,627

Notes to Schedule of Investments

(A)Collateralized by $124,000 United States Treasury Bond, 6.875% due 8-15-25; market value and accrued interest aggregate $164,556.

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 MANAGED EUROPEAN/PACIFIC FUND
     March 31, 2008
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (Notes 1 and 3):
Investments in affiliated mutual funds (cost - $67,831)	$	58,058
Repurchase agreement (cost - $161)		161
		58,219
Cash		1
Receivable for Fund shares sold		447
Prepaid and other assets		40
Total assets		58,707
LIABILITIES
Payable for investment securities purchased		525
Payable to Fund shareholders		59
Accrued shareholder servicing (Note 2)		7
Accrued accounting services fee (Note 2)		2
Accrued management fee (Note 2)		2
Accrued distribution fee (Note 2)		––	*
Accrued service fee (Note 2)		––	*
Other		13
Total liabilities		608
Total net assets	$	58,099
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	65,425
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(––	)*
Accumulated undistributed net realized gain on investment transactions		2,447
Net unrealized depreciation in value of investments		(9,773	)
Net assets applicable to outstanding units of capital	$	58,099
Net asset value per share (net assets divided by shares outstanding):
Class A	$9.81
Class B	$9.78
Class C	$9.79
Class E	$9.81
Class I	$9.82
Class Y	$9.81
Capital shares outstanding:
Class A		5,464
Class B		140
Class C		250
Class E		21
Class I		21
Class Y		29

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Operations
     IVY MANAGED EUROPEAN/PACIFIC FUND
     For the Period from April 2, 2007 ⁽¹⁾ through March 31, 2008
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends from affiliated mutual funds	$	2,318
Interest and amortization		17
Total income		2,335
Expenses (Note 2):
Registration fees		117
Distribution fee:
Class A		40
Class B		7
Class C		11
Class E		1
Service fee:
Class A		31
Class B		2
Class C		4
Class Y		1
Shareholder servicing:
Class A		31
Class B		2
Class C		2
Class E		––	*
Class I		––	*
Class Y		––	*
Investment management fee		16
Accounting services fee		13
Custodian fees		4
Audit fees		––	*
Legal fees		––	*
Other		18
Total		300
Less voluntary waiver of investment management fee (Note 2)		(2	)
Total expenses		298
Net investment income		2,037
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on investments in affiliated mutual funds		(30	)
Capital gains distributions from affiliated mutual funds		2,579
Realized net gain on investments		2,549
Unrealized depreciation in value of affiliated mutual funds during the period		(9,773	)
Net loss on investments		(7,224	)
Net decrease in net assets resulting from operations	$	(5,187	)

*Not shown due to rounding.

(1)Commencement of operations.

See Notes to Financial Statements.

Statement of Changes in Net Assets
     IVY MANAGED EUROPEAN/PACIFIC FUND
     (In Thousands)
     

	For the period from 4-2-07 (1) through
	3-31-08
INCREASE IN NET ASSETS
Operations:
Net investment income	$	2,037
Realized net gain on investments		2,549
Unrealized depreciation		(9,773	)
Net decrease in net assets resulting from operations		(5,187	)
Distributions to shareholders from (Note 1F): (2)
Net investment income:
Class A		(1,962	)
Class B		(50	)
Class C		(92	)
Class E		(11	)
Class I		(11	)
Class Y		(13	)
Realized gains on investment transactions:
Class A		(––	)
Class B		(––	)
Class C		(––	)
Class E		(––	)
Class I		(––	)
Class Y		(––	)
		(2,139	)
Capital share transactions (Note 5)		65,425
Total increase		58,099
NET ASSETS
Beginning of period		––
End of period	$	58,099
Undistributed net investment loss	$	(––	)*

*Not shown due to rounding.

(1)Commencement of operations.

(2)See "Financial Highlights" on pages 81 - 86.

See Notes to Financial Statements.

Financial Highlights
     IVY MANAGED EUROPEAN/PACIFIC FUND
     Class A Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period	$	10.00
Income (loss) from investment operations:
Net investment income		0.47	(2)
Net realized and unrealized loss on investments		(0.15	) (2)
Total from investment operations		0.32
Less distributions from:
Net investment income		(0.51	)
Capital gains		(0.00	)
Total distributions		(0.51	)
Net asset value, end of period	$	9.81
Total return (3)		2.67	%
Net assets, end of period (in millions)	$54
Ratio of expenses to average net assets including expense waiver		0.88	% (4)
Ratio of net investment income to average net assets including expense waiver		6.52	% (4)
Ratio of expenses to average net assets excluding expense waiver		0.89	% (4)
Ratio of net investment income to average net assets excluding expense waiver		6.51	% (4)
Portfolio turnover rate		0	%*

*Not shown due to rounding.

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

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

(4)Annualized.

See Notes to Financial Statements.

Financial Highlights
     IVY MANAGED EUROPEAN/PACIFIC FUND
     Class B Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period	$	10.00
Income (loss) from investment operations:
Net investment income		0.44	(2)
Net realized and unrealized loss on investments		(0.21	) (2)
Total from investment operations		0.23
Less distributions from:
Net investment income		(0.45	)
Capital gains		(0.00	)
Total distributions		(0.45	)
Net asset value, end of period	$	9.78
Total return		1.87	%
Net assets, end of period (in millions)	$1
Ratio of expenses to average net assets including expense waiver		1.77	% (3)
Ratio of net investment income to average net assets including expense waiver		5.43	% (3)
Ratio of expenses to average net assets excluding expense waiver		1.78	% (3)
Ratio of net investment income to average net assets excluding expense waiver		5.42	% (3)
Portfolio turnover rate		0	%*

*Not shown due to rounding.

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

See Notes to Financial Statements.

Financial Highlights
     IVY MANAGED EUROPEAN/PACIFIC FUND
     Class C Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period	$	10.00
Income (loss) from investment operations:
Net investment income		0.45	(2)
Net realized and unrealized loss on investments		(0.21	) (2)
Total from investment operations		0.24
Less distributions from:
Net investment income		(0.45	)
Capital gains		(0.00	)
Total distributions		(0.45	)
Net asset value, end of period	$	9.79
Total return		1.90	%
Net assets, end of period (in millions)	$3
Ratio of expenses to average net assets including expense waiver		1.65	% (3)
Ratio of net investment income to average net assets including expense waiver		6.18	% (3)
Ratio of expenses to average net assets excluding expense waiver		1.66	% (3)
Ratio of net investment income to average net assets excluding expense waiver		6.17	% (3)
Portfolio turnover rate		0	%*

*Not shown due to rounding.

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

See Notes to Financial Statements.

Financial Highlights
     IVY MANAGED EUROPEAN/PACIFIC FUND
     Class E Shares ⁽¹⁾
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (2) through
	3-31-08
Net asset value, beginning of period	$	10.00
Income (loss) from investment operations:
Net investment income		0.49	(3)
Net realized and unrealized loss on investments		(0.16	) (3)
Total from investment operations		0.33
Less distributions from:
Net investment income		(0.52	)
Capital gains		(0.00	)
Total distributions		(0.52	)
Net asset value, end of period	$	9.81
Total return (4)		2.79	%
Net assets, end of period (in thousands)	$206
Ratio of expenses to average net assets including expense waiver		0.79	% (5)
Ratio of net investment income to average net assets including expense waiver		4.44	% (5)
Ratio of expenses to average net assets excluding expense waiver		0.80	% (5)
Ratio of net investment income to average net assets excluding expense waiver		4.43	% (5)
Portfolio turnover rate		0	%*

*Not shown due to rounding.

(1)See Note 5 to Financial Statements.

(2)Commencement of operations of the class.

(3)Based on average weekly shares outstanding.

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

(5)Annualized.

See Notes to Financial Statements.

Financial Highlights
     IVY MANAGED EUROPEAN/PACIFIC FUND
     Class I Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period	$	10.00
Income (loss) from investment operations:
Net investment income		0.52	(2)
Net realized and unrealized loss on investments		(0.16	) (2)
Total from investment operations		0.36
Less distributions from:
Net investment income		(0.54	)
Capital gains		(0.00	)
Total distributions		(0.54	)
Net asset value, end of period	$	9.82
Total return		3.07	%
Net assets, end of period (in thousands)	$206
Ratio of expenses to average net assets including expense waiver		0.55	% (3)
Ratio of net investment income to average net assets including expense waiver		4.67	% (3)
Ratio of expenses to average net assets excluding expense waiver		0.56	% (3)
Ratio of net investment income to average net assets excluding expense waiver		4.66	% (3)
Portfolio turnover rate		0	%*

*Not shown due to rounding.

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

See Notes to Financial Statements.

Financial Highlights
     IVY MANAGED EUROPEAN/PACIFIC FUND
     Class Y Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period	$	10.00
Income (loss) from investment operations:
Net investment income		0.49	(2)
Net realized and unrealized loss on investments		(0.16	) (2)
Total from investment operations		0.33
Less distributions from:
Net investment income		(0.52	)
Capital gains		(0.00	)
Total distributions		(0.52	)
Net asset value, end of period	$	9.81
Total return		2.77	%
Net assets, end of period (in thousands)	$280
Ratio of expenses to average net assets including expense waiver		0.81	% (3)
Ratio of net investment income to average net assets including expense waiver		4.76	% (3)
Ratio of expenses to average net assets excluding expense waiver		0.82	% (3)
Ratio of net investment income to average net assets excluding expense waiver		4.75	% (3)
Portfolio turnover rate		0	%*

*Not shown due to rounding.

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

See Notes to Financial Statements.

Manager's Discussion of
Ivy Managed International Opportunities Fund
     March 31, 2008

Below, Michael L. Avery, portfolio manager of the Ivy Managed International Opportunities Fund, discusses positioning, performance and results for the fiscal period ended March 31, 2008. He has managed the Fund since its inception on April 2, 2007, and has 29 years of industry experience.

Investment Styles of Underlying Funds

[1] Ivy International Balanced Fund

[2] Ivy International Core Equity Fund

[3] Ivy International Growth Fund

[4] Ivy European Opportunities Fund

[5] Ivy Pacific Opportunities Fund

STYLE
VALUE	BLEND	GROWTH
[1]	[2][4][5]	[3]	LARGE	CAPITALIZATION
			MEDIUM
			SMALL

This diagram shows the equity investment style and the size of companies, as measured by market capitalization, within each of the underlying funds that comprise the Ivy Managed International Opportunities Fund. The diagram reflects quarterly data for the past three years for the underlying funds. Source: Morningstar

MATURITY
SHORT	INTER	LONG
X			HIGH	CREDIT QUALITY
			MEDIUM
			LOW

This diagram shows the fixed-income investment style of Ivy International Balanced Fund, one of Ivy Managed International Opportunities Fund's underlying funds, by displaying the average credit quality of the bonds owned in the underlying fund as well as the underlying Fund's interest rate sensitivity, as measured by average maturity. The diagram reflects quarterly data for the past three years for the underlying fund. Source: Morningstar

The Fund increased 3.75 percent (Class A shares at net asset value) for the fiscal period beginning on April 2, 2007 and ended on March 31, 2008. In comparison, the Fund's benchmark, the MSCI AC World ex U.S.A. Index (reflecting the performance of stocks that generally represent the international equity market), rose 2.58 percent for the same period. Please note that Fund returns include applicable fees and expenses while index returns do not include any such fees.

Commodity prices and inflation surge

The global economy started the fiscal period strong. In particular, Europe was driven by rapid expansion in Germany and merger-and-acquisition activity. But turbulence in the U.S. marketplace, dragged down by a credit crisis related to the nation's subprime loan losses, spread internationally and slowed global growth in the second half, especially during the final quarter of the fiscal period.

In the capital markets, investors reassessed the risk in stock, bond and credit markets. With the Federal Reserve's aggressive approach, the Bank of England cut base rates by 25 basis points (0.25 percent) to 5.25 percent in response to increased signs of economic weakness. The European Central Bank, however, seemed more concerned about inflation and may be much slower to adjust interest rates further. The continued divergence in U.S. and European monetary policy pushed the Euro's value above $1.50 for the first time. Europe also was dominated by the debacle surrounding a series of tiered and incorrect bets made by two Bear Stearns hedge funds that led to them using bank money in an effort to protect clients.

During the fiscal period, prices for oil, agricultural and industrial commodities, as well as precious metals like silver and gold, increased significantly and contributed to global inflation. Although many financial institutions were hurt by their subprime loan exposure, abundant global liquidity sources such as sovereign wealth funds offered some relief with quick recapitalizations during the period.

For most of the period, growth remained robust in Asia ex-Japan, where China's demand for commodities continued to have a significant impact on commodity prices and related equities. However, by the fiscal period's fourth quarter, stock markets in China and India both dropped more than 20 percent as the Asian economy faced multiple headwinds and investors lost their appetite for risk.

The international growth category outperformed value during the fiscal period. Value stocks had been supported by a huge leverage buyout cycle, which peaked in the spring. By fall almost no deals were announced and previously announced deals often fell apart, driven by the high cost of borrowing. Also, international fixed-income markets demonstrated strength.

An attempt to balance risks and growth potential

The Fund invests in a diversified portfolio of international stocks, with a modest complement of bonds, by investing primarily in Ivy international mutual funds. Each underlying fund, in turn, invests in a diversified portfolio of foreign securities.

In our initial fiscal period we allocated the greatest portion of the portfolio to Ivy International Balanced Fund (at approximately 40 percent of net assets at March 31, 2008). This permitted the overall portfolio to gain exposure to international fixed-income markets that did well during the period. On the equity side, this underlying Fund also benefited from:

• an overweight in the telecommunications sector
• stock selection within the industrials and telecom-services sectors and
• an underweight in financials, a sector which did badly this past year on a global basis due to subprime mortgage exposure in the U.S.

Compared to our baseline target of 20 percent allocation to each underlying Fund, we were underweighted in Ivy Pacific Opportunities Fund (approximately 9.7 percent of net assets at March 31, 2008). This tactical positioning reflected our concern with short-term market and inflation risks in Asia, especially China and India, which dropped sharply in the first calendar quarter of 2008. Our underweighting helped preserve capital as Asian markets fell and aided the overall portfolio's fiscal period results.

The overall portfolio was also slightly underweight Ivy International Growth Fund and Ivy European Opportunities Fund for the fiscal period. We did not want to be overexposed to established European markets given current indicators of slowing economic growth in much of the Eurozone. (See Portfolio Highlights pie chart on page 91 for additional information).

Our outlook

We believe some of the best investment opportunities going forward will be in developing countries with the strongest growth. However, we feel that investors must understand that growth in and of itself does not guarantee strong asset price appreciation. Several other factors are important as well. Our analysis of overseas markets has brought to the fore a new aspect of global re-balancing - the development of direct ties between emerging markets such as China and Brazil, India and Indonesia, the Middle East and Russia. There are two implications to this, in our opinion. There is:

• Less reliance on the U.S. as an export market and
• Less reason for a country to tie its currency (and monetary policy) to the U.S. dollar. There is a sea change in the global economy.

As the world becomes less U.S.-centric, the economic center of the world is changing. We expect to position the portfolio in underlying Funds that we feel can take advantage of this change. Strong global demand and the relatively weak U.S. currency have contributed to continued price increases in agricultural commodities, industrial materials and traditional energy sources like oil and natural gas as well as related equities.

While we feel that long-term structural trends remain intact and Asia is likely to continue to report economic outperformance, we believe that there is a risk that policy tightening in major emerging-market countries lowers global growth on the margin. Europe also faces headwinds to growth, given past interest rate tightening, significant currency strengthening and underlying money market tensions.

As with any mutual fund, the value of the Fund's shares will change, and you could lose money on your investment. International investing involves additional risks, including currency fluctuations, political or economic conditions affecting the foreign country, and differences in accounting standards and foreign regulations. Fixed-income securities are subject to interest rate risk and, as such, the Fund's net asset value may fall as interest rates rise. These and other risks are more fully described in the Fund's prospectus.

The Fund's performance noted above is at net asset value (NAV), and does not include the effect of any applicable sales charges. If reflected, the sales charge would reduce the performance noted.

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

Comparison of Change in Value of
$10,000 Investment

Ivy Managed International Opportunities Fund:
Class A Shares(1)(2)	$	9,778
Class B Shares(2)	$	10,298
Class C Shares(2)	$	10,305
Class E Shares(1)(2)	$	10,382
Class I Shares(2)	$	10,410
Class Y Shares(2)	$	10,380
MSCI AC World ex U.S.A. Index(3)	$	10,258

		IVY MANAGED INTER- NATIONAL OPPOR- TUNITIES FUND, CLASS A	IVY MANAGED INTER- NATIONAL OPPOR- TUNITIES FUND, CLASS B	IVY MANAGED INTER- NATIONAL OPPOR- TUNITIES FUND, CLASS C	IVY MANAGED INTER- NATIONAL OPPOR- TUNITIES FUND, CLASS E	IVY MANAGED INTER- NATIONAL OPPOR- TUNITIES FUND, CLASS I	IVY MANAGED INTER- NATIONAL OPPOR- TUNITIES FUND, CLASS Y	MSCI AC WORLD ex U.S.A.
		SHARES	SHARES	SHARES	SHARES	SHARES	SHARES	INDEX
Inception 4/2/07		9,425	10,000	10,000	10,000	10,000	10,000	10,000
JUNE	2007	10,132	10,730	10,740	10,750	10,760	10,750	10,842
SEPT	2007	10,603	11,220	11,220	11,260	11,270	11,260	11,350
DEC	2007	10,692	11,273	11,290	11,353	11,371	11,350	11,280
MARCH	2008	9,778	10,298	10,305	10,382	10,410	10,380	10,258

(1)The value of the investment in the Fund is impacted by the sales load at the time of the investment.

(2)The value of the investment in the Fund is impacted by the ongoing expenses of the Fund and assumes reinvestment of dividends and distributions.

(3)Because the Fund commenced operations on a date other than at the end of a month, and partial month calculations of the performance of the index (including income) are not available, investment in the indexes was effected as of March 31, 2007.

Cumulative Annual Total Return(4)
	Class A	Class B	Class C	Class E (5)	Class I	Class Y
1-year period ended 3-31-08	––	––	––	––	––	––
5-year period ended 3-31-08	––	––	––	––	––	––
10-year period ended 3-31-08	––	––	––	––	––	––
Since inception of Class(6) through 3-31-08	- -2.22%	- -2.02%	2.05%	- -2.15%	4.10%	3.81%

(4)Data quoted is past performance and is based on deduction of the maximum applicable sales load for each of the periods. Current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Please visit www.ivyfunds.com for the Fund's most recent month-end performance. Class A and Class E shares carry a maximum front-end sales load of 5.75%. Class B and Class C shares carry maximum contingent deferred sales charges (CDSC) of 5% and 1%, respectively. Class I and Class Y shares are not subject to sales charges.

(5)Class E shares are not currently available for investment.

(6)4-2-07 for Class A, Class B, Class C, Class E, Class I and Class Y shares (the date on which shares were first acquired by shareholders).

Past performance is not necessarily indicative of future performance. Indexes are unmanaged. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

SHAREHOLDER SUMMARY OF
IVY MANAGED INTERNATIONAL OPPORTUNITIES FUND

Portfolio Highlights

As a shareholder of Ivy Managed International Opportunities Fund, for every $100 you had invested on March 31, 2008, your Fund owned:

Ivy International Balanced Fund,       Class I	$	40.81
Ivy International Core Equity Fund,       Class I	$	20.19
Ivy International Growth Fund,       Class I	$	14.99
Ivy European Opportunities Fund,       Class I	$	14.32
Ivy Pacific Opportunities Fund,       Class I	$	9.69

The Investments of Ivy Managed International Opportunities Fund
March 31, 2008
AFFILIATED MUTUAL FUNDS		Shares			Value
Ivy European Opportunities Fund, Class I			445,783	$	15,513,254
Ivy International Balanced Fund, Class I	2,697,979				44,192,895
Ivy International Core Equity Fund, Class I	1,271,275				21,865,932
Ivy International Growth Fund, Class I			443,964		16,235,738
Ivy Pacific Opportunities Fund, Class I			590,760		10,497,808
TOTAL AFFILIATED MUTUAL FUNDS - 100.00%				$	108,305,627
(Cost: $116,978,998)

SHORT-TERM SECURITIES - 0.50%	Principal Amount in Thousands
Repurchase Agreement
J.P. Morgan Securities, Inc., 1.1%       Repurchase Agreement dated 3-31-08 to be       repurchased at $541,017 on 4-1-08 (A)	$541	$	541,000
(Cost: $541,000)
TOTAL INVESTMENT SECURITIES - 100.50%		$	108,846,627
(Cost: $117,519,998)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.50%)			(538,632	)
NET ASSETS - 100.00%		$	108,307,995

Notes to Schedule of Investments

(A)Collateralized by $414,000 United States Treasury Bond, 6.875% due 8-15-25; market value and accrued interest aggregate $549,405.

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 MANAGED INTERNATIONAL OPPORTUNITIES FUND
     March 31, 2008
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (Notes 1 and 3):
Investments in affiliated mutual funds (cost - $116,979)	$	108,306
Repurchase agreement (cost - $541)		541
		108,847
Cash		1
Receivables:
Fund shares sold		613
Interest		––	*
Prepaid and other assets		38
Total assets		109,499
LIABILITIES
Payable for investment securities purchased		1,017
Payable to Fund shareholders		144
Accrued shareholder servicing (Note 2)		9
Accrued management fee (Note 2)		4
Accrued accounting services fee (Note 2)		3
Accrued distribution fee (Note 2)		1
Accrued service fee (Note 2)		––	*
Other		13
Total liabilities		1,191
Total net assets	$	108,308
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	114,703
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		106
Accumulated undistributed net realized gain on investment transactions		2,172
Net unrealized depreciation in value of investments		(8,673	)
Net assets applicable to outstanding units of capital	$	108,308
Net asset value per share (net assets divided by shares outstanding):
Class A	$10.06
Class B	$10.04
Class C	$10.04
Class E	$10.06
Class I	$10.07
Class Y	$10.06
Capital shares outstanding:
Class A		9,952
Class B		362
Class C		367
Class E		21
Class I		21
Class Y		44

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Operations
     IVY MANAGED INTERNATIONAL OPPORTUNITIES FUND
     For the Period from April 2, 2007 ⁽¹⁾ through March 31, 2008
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends from affiliated mutual funds	$	2,952
Interest and amortization		31
Total income		2,983
Expenses (Note 2):
Registration fees		122
Distribution fee:
Class A		71
Class B		14
Class C		16
Class E		1
Service fee:
Class A		58
Class B		5
Class C		5
Class Y		1
Shareholder servicing:
Class A		40
Class B		2
Class C		2
Class E		––	*
Class I		––	*
Class Y		––	*
Investment management fee		28
Accounting services fee		20
Custodian fees		4
Legal fees		1
Audit fees		––	*
Other		20
Total		410
Less voluntary waiver of investment management fee (Note 2)		(1	)
Total expenses		409
Net investment income		2,574
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Capital gains distributions from affiliated mutual funds		2,172
Unrealized depreciation in value of affiliated mutual funds during the period		(8,673	)
Net loss on investments		(6,501	)
Net decrease in net assets resulting from operations	$	(3,927	)

*Not shown due to rounding.

(1)Commencement of operations.

See Notes to Financial Statements.

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

	For the period from 4-2-07 (1) through
	3-31-08
INCREASE IN NET ASSETS
Operations:
Net investment income	$	2,574
Realized net gain on investments		2,172
Unrealized depreciation		(8,673	)
Net decrease in net assets resulting from operations		(3,927	)
Distributions to shareholders from (Note 1F): (2)
Net investment income:
Class A		(2,299	)
Class B		(67	)
Class C		(75	)
Class E		(7	)
Class I		(7	)
Class Y		(13	)
Realized gains on investment transactions:
Class A		(––	)
Class B		(––	)
Class C		(––	)
Class E		(––	)
Class I		(––	)
Class Y		(––	)
		(2,468	)
Capital share transactions (Note 5)		114,703
Total increase		108,308
NET ASSETS
Beginning of period		––
End of period	$	108,308
Undistributed net investment income	$	106

(1)Commencement of operations.

(2)See "Financial Highlights" on pages 96 - 101.

See Notes to Financial Statements.

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

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	10.00
Income from investment operations:
Net investment income			0.35	(2)
Net realized and unrealized gain on investments			0.04	(2)
Total from investment operations			0.39
Less distributions from:
Net investment income			(0.33	)
Capital gains			(0.00	)
Total distributions			(0.33	)
Net asset value, end of period		$	10.06
Total return (3)			3.75	%
Net assets, end of period (in millions)		$100
Ratio of expenses to average net assets including expense waiver			0.67	% (4)
Ratio of net investment income to average net assets including expense waiver			4.67	% (4)
Ratio of expenses to average net assets excluding expense waiver			0.68	% (4)
Ratio of net investment income to average net assets excluding expense waiver			4.66	% (4)
Portfolio turnover rate			0	%

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

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

(4)Annualized.

See Notes to Financial Statements.

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

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	10.00
Income (loss) from investment operations:
Net investment income			0.33	(2)
Net realized and unrealized loss on investments			(0.02	) (2)
Total from investment operations			0.31
Less distributions from:
Net investment income			(0.27	)
Capital gains			(0.00	)
Total distributions			(0.27	)
Net asset value, end of period		$	10.04
Total return			2.98	%
Net assets, end of period (in millions)		$4
Ratio of expenses to average net assets including expense waiver			1.48	% (3)
Ratio of net investment income to average net assets including expense waiver			4.05	% (3)
Ratio of expenses to average net assets excluding expense waiver			1.49	% (3)
Ratio of net investment income to average net assets excluding expense waiver			4.04	% (3)
Portfolio turnover rate			0	%

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

See Notes to Financial Statements.

Financial Highlights
     IVY MANAGED INTERNATIONAL OPPORTUNITIES FUND
     Class C Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	10.00
Income from investment operations:
Net investment income			0.30	(2)
Net realized and unrealized gain on investments			0.02	(2)
Total from investment operations			0.32
Less distributions from:
Net investment income			(0.28	)
Capital gains			(0.00	)
Total distributions			(0.28	)
Net asset value, end of period		$	10.04
Total return			3.05	%
Net assets, end of period (in millions)		$4
Ratio of expenses to average net assets including expense waiver			1.44	% (3)
Ratio of net investment income to average net assets including expense waiver			3.70	% (3)
Ratio of expenses to average net assets excluding expense waiver			1.45	% (3)
Ratio of net investment income to average net assets excluding expense waiver			3.69	% (3)
Portfolio turnover rate			0	%

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

See Notes to Financial Statements.

Financial Highlights
     IVY MANAGED INTERNATIONAL OPPORTUNITIES FUND
     Class E Shares ⁽¹⁾
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (2) through
	3-31-08
Net asset value, beginning of period		$	10.00
Income from investment operations:
Net investment income			0.38	(3)
Net realized and unrealized gain on investments			0.02	(3)
Total from investment operations			0.40
Less distributions from:
Net investment income			(0.34	)
Capital gains			(0.00	)
Total distributions			(0.34	)
Net asset value, end of period		$	10.06
Total return (4)			3.82	%
Net assets, end of period (in thousands)		$208
Ratio of expenses to average net assets including expense waiver			0.60	% (5)
Ratio of net investment income to average net assets including expense waiver			3.57	% (5)
Ratio of expenses to average net assets excluding expense waiver			0.61	% (5)
Ratio of net investment income to average net assets excluding expense waiver			3.56	% (5)
Portfolio turnover rate			0	%

(1)See Note 5 to Financial Statements.

(2)Commencement of operations of the class.

(3)Based on average weekly shares outstanding.

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

(5)Annualized.

See Notes to Financial Statements.

Financial Highlights
     IVY MANAGED INTERNATIONAL OPPORTUNITIES FUND
     Class I Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	10.00
Income from investment operations:
Net investment income			0.41	(2)
Net realized and unrealized gain on investments			0.02	(2)
Total from investment operations			0.43
Less distributions from:
Net investment income			(0.36	)
Capital gains			(0.00	)
Total distributions			(0.36	)
Net asset value, end of period		$	10.07
Total return			4.10	%
Net assets, end of period (in thousands)		$208
Ratio of expenses to average net assets including expense waiver			0.36	% (3)
Ratio of net investment income to average net assets including expense waiver			3.81	% (3)
Ratio of expenses to average net assets excluding expense waiver			0.37	% (3)
Ratio of net investment income to average net assets excluding expense waiver			3.80	% (3)
Portfolio turnover rate			0	%

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

See Notes to Financial Statements.

Financial Highlights
     IVY MANAGED INTERNATIONAL OPPORTUNITIES FUND
     Class Y Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	10.00
Income from investment operations:
Net investment income			0.37	(2)
Net realized and unrealized gain on investments			0.03	(2)
Total from investment operations			0.40
Less distributions from:
Net investment income			(0.34	)
Capital gains			(0.00	)
Total distributions			(0.34	)
Net asset value, end of period		$	10.06
Total return			3.81	%
Net assets, end of period (in thousands)			$446
Ratio of expenses to average net assets including expense waiver			0.64	% (3)
Ratio of net investment income to average net assets including expense waiver			3.83	% (3)
Ratio of expenses to average net assets excluding expense waiver			0.65	% (3)
Ratio of net investment income to average net assets excluding expense waiver			3.82	% (3)
Portfolio turnover rate			0	%

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

See Notes to Financial Statements.

Managers' Discussion of
Ivy Cundill Global Value Fund
     March 31, 2008

Ivy Cundill Global Value Fund is subadvised by Mackenzie Financial Corporation.

Below, Peter Cundill, CFA, Hiok Hhu Ng, CFA, Wade S. Burton, CFA, and Andrew Massie, portfolio managers of the Ivy Cundill Global Value Fund, discuss positioning, performance and results for the fiscal year ended March 31, 2008.

Mr. Cundill has 30 years of industry experience and has managed the Fund since its inception. Mr. Ng has seven years of industry experience and has managed the Fund for four years. Mr. Burton and Mr. Massie began managing the Fund in December 2007. Mr. Burton has 13 years of industry experience while Mr. Massie has 25 years of industry experience.

STYLE
VALUE	BLEND	GROWTH
X			LARGE	CAPITALIZATION
			MEDIUM
			SMALL

This diagram shows the Fund's equity investment style and the size of companies in the Fund, as measured by market capitalization. Shaded areas reflect quarterly data for the past three years. Source: Morningstar

The Fund fell 12.07 percent (Class A shares at net asset value) for the year ended March 31, 2008. By comparison, the MSCI World Index (generally reflecting the performance of securities that represent the global stock market) declined 3.26 percent. The Lipper Global Funds Universe Average (reflecting the universe of funds with similar investment objectives) declined 2.13 percent for the same period. A second, much smaller peer group, the Lipper Global Small/Mid-Cap Value Funds Universe Average, declined 13.16 percent for the fiscal year. Please note that Fund returns include applicable fees and expenses while index returns do not include any such fees.

The currency hedge strategy

Performance of the Fund was affected by several factors this year, not the least of which was the weakening U.S. dollar. Unlike the benchmark, the Fund hedges currency where we believe it is economic to do so. The Fund's currency hedge does not allow it to profit from dollar weakness; however, we feel currency hedging can be very beneficial in helping to smooth volatility and allows us to focus on individual security fundamentals. We remain committed to the hedging strategy at this time.

True to a deep-value approach to investing, the Fund does not track benchmark weightings with respect to geographic region nor industry. Again this year, Japan was a difficult market, albeit cheap. Japanese consumer finance companies AIFUL Corporation and Takefuji Corporation failed to perform and were instrumental in the Fund's substantial underperformance. We believe the worst is behind in terms of consumer legal issues affecting each company.

What's positive is that the management of both companies own significant quantities of stock and are very entrepreneurial; thus we believe their interests are largely aligned with the Fund. In the case of Takefuji Corporation, the Fund is being paid to be patient through a dividend yielding 9.0 percent.

In direct contrast to consumer finance is the Fund's position in Kirin Brewery Company, Limited. The Japanese food-and-beverage producer has begun to bear fruit, with the stock in yen up for the fiscal year as well as the past quarter. In general, Kirin's expansion outside Japan is beginning to impact earnings and, as a consequence, the firm has been upgraded by Japanese and global investment firms. We will monitor what we consider to be the company's fair value and, to the extent its fair value grows, the Fund will likely continue to hold Kirin Brewery Company, Limited; if not we may need to sell our position in the company.

Clearly, the U.S. correction in housing prices and the ensuing subprime and credit crisis have impacted not only U.S. but all global stock markets, with many of the worst hit in Europe. Neither Asia nor the emerging markets have been spared. We question if the worst is over or yet to come. Adherence to a deep-value approach to investing means this question doesn't need to be answered - it is an advantage of the style. While poor performance is frustrating, we estimate the value of the securities in the Fund are largely unchanged and, therefore, believe it is a question of time and patience until the discount to value narrows through rising stock prices.

Through the year the Fund remained highly concentrated, in line with our approach to investing. In the quarter just past, the opportunity to augment the process with additional investment personnel from the Cundill team has resulted in a repositioning of the securities portfolio. This has given us the ability to add a couple of new security names to the Fund while reducing certain exposure levels. Given the global market environment, we believe the timing should be fortuitous. The expectation is that this restocking of the shelves will continue through the current quarter, as individual stocks present opportunity and where we can identify margin-of-safety.

Top 10 Equity Holdings as of March 31, 2007	March 31, 2008
Nikko Cordial Corporation AIFUL Corporation Takefuji Corporation Korea Tobacco & Ginseng Corporation Munchener Ruckversicherungs-Gesellschaft       Aktiengesellschaft, Registered Shares       Italmobiliare S.p.A.,       Non-Convertible Savings Shares Singapore Press Holdings Limited Korea Electric Power Corporation Mabuchi Motor Co., Ltd. Asatsu-DK Inc.	Munchener Ruckversicherungs-Gesellschaft       Aktiengesellschaft, Registered Shares Pfizer Inc. AIFUL Corporation Thai Beverage Public Company Limited Seven & i Holdings Co., Ltd. Asatsu-DK Inc. Mediaset S.p.A. Coca-Cola West Holdings Company, Limited Singapore Press Holdings Limited First Pacific Company Limited

See your advisor or www.ivyfunds.com for more information on the Fund's most recently published Top 10 Equity Holdings.

We believe fiscal year 2008 will be a difficult though transformative year; if we are patient we believe we will be rewarded. As noted, we do not follow the benchmark sector weightings. Our communications sector encompasses not only mobile and fixed-line telecom companies, but also broadcast and media represented the largest sector of investment. Representative telecom names include mobile provider SK Telecom Co., Ltd., the largest mobile provider in South Korea. The company generates ample free cash flow, of which a large portion is retuned to shareholders through share buy-backs and dividends.

Financials is the largest sector in the Fund, and Munchener Ruckversicherungs-Gesellschaft Aktiengesellschaft, Registered Shares is the Fund's largest holding. We added to the position marginally on the weakness in its stock price. Other examples of financial stocks in the Fund include property and casualty insurance companies and Japanese consumer finance firms. Absent are banks. Over the last six months we have spent much analytical time on global banks and have short-listed a few candidates. However, from a fundamental value perspective, we feel it is very difficult to fully understand all the risks inherent in their balance sheets; therefore, the companies' margin-of-safety is difficult to quantify. As always, a company's price can mitigate certain risks.

Our outlook

The Cundill deep-value approach to investing is not predicated on forecasts and predictions of macro-economic events or, for that matter, the future value of a barrel of oil. It is grounded in fundamental investing, one holding at a time. As deep-value investors, the past couple of years have been difficult, as they have been for many others practicing this craft. What we have seen in broad global markets, as a result of the credit crunch and likely recession, is a correction that is painful for families and investors alike but, from the perspective of a value shop, creates potential opportunity. Is it over or just beginning? We do not pretend to know. What we do know is that over the last few months we have seen and acted on the chance to buy what are, in our view, some remarkably inexpensive stocks that we feel patience could reward.

As with any mutual fund, the value of the Fund's shares will change, and you could lose money on your investment.

International investing involves additional risks, including currency fluctuations, political or economic conditions affecting the foreign country, and differences in accounting standards and foreign regulations. Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor and, in the opinion of the Fund's manager, undervalued. The value of a security believed by the Fund's manager to be undervalued may never reach what is believed to be its full value, or such security's value may decrease. These and other risks are more fully described in the Fund's prospectus.

The Fund's performance noted above is at net asset value (NAV), and does not include the effect of any applicable sales charges. If reflected, the sales charge would reduce the performance noted.

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

Comparison of Change in Value of
$10,000 Investment

Ivy Cundill Global Value Fund, Class A Shares(1)	$	15,370
MSCI World Index(2)	$	17,317
Lipper Global Funds Universe Average(2)	$	18,162
Lipper Global Small/Mid-Cap Value Funds Universe Average(2)	$	17,039

	IVY CUNDILL GLOBAL VALUE FUND, CLASS A		MSCI WORLD	LIPPER GLOBAL FUNDS UNIVERSE		LIPPER GLOBAL SMALL/MID-CAP VALUE FUNDS UNIVERSE
		SHARES	INDEX		AVERAGE		AVERAGE
Inception 9/4/01		9,425	10,000		10,000		10,000
DEC	2001	9,230	10,859		10,971		10,448
DEC	2002	8,107	8,699		9,046		9,153
DEC	2003	11,060	11,580		11,998		12,458
MARCH	2004	12,185	11,883		12,426		13,720
MARCH	2005	13,438	13,138		13,541		15,119
MARCH	2006	15,789	15,505		16,280		17,740
MARCH	2007	17,480	17,900		18,557		19,621
MARCH	2008	15,370	17,317		18,162		17,039

Please note that the performance of the Fund's other share classes will be greater or less than the performance shown above for Class A based on the differences in loads and fees paid by shareholders investing in the different classes.

(1)The value of the investment in the Fund is impacted by the sales load at the time of the investment and by the ongoing expenses of the Fund and assumes reinvestment of dividends and distributions.

(2)Because the Fund commenced operations on a date other than at the end of a month, and partial month calculations of the performance of the indexes (including income) are not available, investment in the indexes was effected as of September 30, 2001.

Average Annual Total Return(3)
	Class A	Class B	Class C	Class E	Class I	Class Y	Advisor Class(4)
1-year period ended 3-31-08	- -17.13%	- -16.01%	- -12.65%	––	––	- -11.73%	- -11.54%
5-year period ended 3-31-08	13.21%	13.47%	13.78%	––	––	––	15.15%
10-year period ended 3-31-08	––	––	––	––	––	––	––
Since inception of Class(5) through 3-31-08	6.76%	8.43%	8.23%	––	––	11.23%	7.37%
Cumulative return since inception of Class(5) through 3-31-08	––	––	––	- -17.35%	- -10.93%	––	––

(3)Data quoted is past performance and is based on deduction of the maximum applicable sales load for each of the periods. Current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Please visit www.ivyfunds.com for the Fund's most recent month-end performance. Class A and Class E shares carry a maximum front-end sales load of 5.75%. Class B and Class C shares carry maximum contingent deferred sales charges (CDSC) of 5% and 1%, respectively. (Accordingly, the Class C shares reflect no CDSC since it only applies to Class C shares redeemed within twelve months after purchase.) Class I and Class Y shares are not subject to sales charges.

(4)Advisor Class shares are no longer available for investment.

(5)9-4-01 for Class A shares, 9-26-01 for Class B shares, 10-19-01 for Class C shares, 4-2-07 for Class E and Class I shares, 7-24-03 for Class Y shares and 4-19-00 for Advisor Class shares (the date on which shares were first acquired by shareholders).

Past performance is not necessarily indicative of future performance. Indexes are unmanaged. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

SHAREHOLDER SUMMARY OF IVY CUNDILL GLOBAL VALUE FUND

Portfolio Highlights

On March 31, 2008, Ivy Cundill Global Value Fund had net assets totaling $591,028,121 invested in a diversified portfolio of:

74.18%	Foreign Common Stocks
11.87%	Domestic Common Stocks
13.95%	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 March 31, 2008, your Fund was invested by country and by industry, respectively, as follows:

Country Weightings

Japan	$	28.01
Cash and Cash Equivalents and Unrealized Loss       on Open Forward Currency Contracts	$	13.95
United States	$	11.87
South Korea	$	10.06
Italy	$	7.79
Germany	$	7.69
Canada	$	5.76
Bermuda	$	5.07
Thailand	$	4.68
Singapore	$	4.27
Cayman Islands	$	0.85

Sector Weightings

Financial Services Stocks	$	17.91
Consumer Services Stocks	$	15.69
Consumer Nondurables Stocks	$	14.47
Cash and Cash Equivalents and Unrealized Loss on       Open Forward Currency Contracts	$	13.95
Technology Stocks	$	7.05
Retail Stocks	$	6.58
Utilities Stocks	$	6.57
Multi-Industry Stocks	$	5.07
Health Care Stocks	$	4.91
Business Equipment and Services Stocks	$	4.47
Capital Goods Stocks	$	3.33

The Investments of Ivy Cundill Global Value Fund
March 31, 2008
COMMON STOCKS	Shares				Value
Bermuda - 5.07%
First Pacific Company Limited (A)		37,650,000		$	24,817,318
Montpelier Re Holdings Ltd.			320,095		5,137,526
					29,954,844
Canada - 5.76%
Fairfax Financial Holdings Limited (A)			76,400		22,247,513
Loblaw Companies Limited (A)			399,000		11,820,927
					34,068,440
Cayman Islands - 0.85%
Semiconductor Manufacturing International       Corporation (A)*		72,552,000			5,034,028
Germany - 7.69%
Deutsche Telekom AG, Registered Shares (A)			680,000		11,379,675
Munchener Ruckversicherungs-Gesellschaft       Aktiengesellschaft, Registered Shares (A)			174,138		34,090,261
					45,469,936
Italy - 7.79%
Italmobiliare S.p.A., Non-Convertible Savings       Shares (A)			299,008		19,684,933
Mediaset S.p.A. (A)			2,850,030		26,367,086
					46,052,019
Japan - 28.01%
AIFUL Corporation (A)			1,756,100		28,205,418
Asatsu-DK Inc. (A)			742,300		26,436,246
Coca-Cola West Holdings Company,       Limited (A)			1,048,000		25,232,745
Kirin Brewery Company, Limited (A)			1,071,000		20,253,160
Mabuchi Motor Co., Ltd. (A)			353,000		17,033,808
Seven & i Holdings Co., Ltd. (A)			1,079,500		27,074,137
Takefuji Corporation (A)			1,006,570		21,306,809
					165,542,323
Singapore - 4.27%
Singapore Press Holdings Limited (A)			7,544,000		25,211,522
South Korea - 10.06%
Korea Tobacco & Ginseng Corporation (A)			158,296		12,403,463
SK Telecom Co., Ltd. (A)			109,350		20,592,493
SK Telecom Co., Ltd., ADR			318,866		6,890,694
Samsung Electronics Co., Ltd. (A)			43,460		19,572,030
					59,458,680
Thailand - 4.68%
Thai Beverage Public Company Limited (A)	143,580,000				27,642,631
United States - 11.87%
DIRECTV Group, Inc. (The)*			999,642		24,761,132
Liberty Media Corporation, Series A       Liberty Entertainment*			728,000		16,369,080
Pfizer Inc.			1,388,000		29,050,840
					70,181,052
TOTAL COMMON STOCKS - 86.05%				$	508,615,475
(Cost: $474,316,686)

UNREALIZED GAIN (LOSS) ON OPEN FORWARD CURRENCY CONTRACTS - (1.22%)		Face Amount in Thousands
Euro, 6-20-08 (short) (B)	EUR18,208				(1,640,156	)
Euro, 10-10-08 (short) (B)	32,821				(928,425	)
Japanese Yen, 6-20-08 (short) (B)	JPY1,950,372				(1,205,444	)
Japanese Yen, 10-10-08 (short) (B)	16,079,555				(3,839,781	)
Singapore Dollar, 6-20-08 (short) (B)	SGD37,833				(852,079	)
Singapore Dollar, 10-10-08 (short) (B)			24,704		(109,893	)
South Korean Won, 6-20-08 (short) (B)	KRW8,437,997				468,854
South Korean Won, 10-10-08 (short) (B)	43,067,371				881,537
				$	(7,225,387	)

SHORT-TERM SECURITIES - 5.75%	Principal Amount in Thousands
Repurchase Agreements
J.P. Morgan Securities Inc., 1.1% Repurchase       Agreement dated 3-31-08 to be repurchased       at $33,964,038 on 4-1-08 (C) (Cost: $33,963,000)	$33,963	$	33,963,000
TOTAL INVESTMENT SECURITIES - 90.58%		$	535,353,088
(Cost: $508,279,686)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 9.42%			55,675,033
NET ASSETS - 100.00%		$	591,028,121

Notes to Schedule of Investments

Certain acronyms may be used within the body of the Fund's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.

*No dividends were paid during the preceding 12 months.

(A)Listed on an exchange outside the United States.

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

(C)Collateralized by $24,349,000 United States Treasury Bond, 7.625% due 2-15-25; market value and accrued interest aggregate $34,542,693.

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
     March 31, 2008
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (Notes 1 and 3):
Securities (cost - $474,317)	$	501,390
Repurchase agreement (cost - $33,963)		33,963
		535,353
Cash denominated in foreign currencies (cost - $35,646)		35,857
Receivables:
Investment securities sold		22,897
Dividends and interest		4,444
Fund shares sold		652
Prepaid and other assets		33
Total assets		599,236
LIABILITIES
Payable to Fund shareholders		5,237
Payable for investment securities purchased		1,575
Accrued management fee (Note 2)		493
Due to custodian		257
Accrued shareholder servicing (Note 2)		256
Accrued service fee (Note 2)		183
Accrued accounting services fee (Note 2)		9
Accrued administrative fee (Note 2)		5
Accrued distribution fee (Note 2)		3
Other		190
Total liabilities		8,208
Total net assets	$	591,028

NET ASSETS
Capital paid in (shares authorized - unlimited)	$	590,035
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(1,139	)
Accumulated undistributed net realized loss on investment transactions		(25,100	)
Net unrealized appreciation in value of investments		27,232
Net assets applicable to outstanding units of capital	$	591,028
Net asset value per share (net assets divided by shares outstanding):
Class A	$12.97
Class B	$12.68
Class C	$12.62
Class E	$12.93
Class I	$13.11
Class Y	$13.02
Advisor Class	$13.01
Capital shares outstanding:
Class A		34,122
Class B		2,906
Class C		7,843
Class E		32
Class I		131
Class Y		618
Advisor Class		182

See Notes to Financial Statements.

Statement of Operations
     IVY CUNDILL GLOBAL VALUE FUND
     For the Fiscal Year Ended March 31, 2008
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $1,865)	$	18,838
Interest and amortization		3,610
Total income		22,448
Expenses (Note 2):
Investment management fee		7,997
Shareholder servicing:
Class A		1,761
Class B		207
Class C		344
Class E		3
Class I		3
Class Y		19
Advisor Class		1
Class II		––	*
Service fee:
Class A		1,435
Class B		126
Class C		448
Class Y		29
Distribution fee:
Class A		80
Class B		379
Class C		1,343
Class E		1
Custodian fees		266
Accounting services fee		145
Administrative fee		85
Legal fees		15
Audit fees		12
Other		432
Total		15,131
Less expenses in excess of voluntary limit (Note 2)		(29	)
Total expenses		15,102
Net investment income		7,346

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		50,103
Realized net loss on forward currency contracts		(45,398	)
Realized net gain on foreign currency transactions		489
Realized net gain on investments		5,194
Unrealized depreciation in value of securities during the period		(109,497	)
Unrealized depreciation in value of forward currency contracts during the period		(3,660	)
Unrealized depreciation in value of investments during the period		(113,157	)
Net loss on investments		(107,963	)
Net decrease in net assets resulting from operations	$	(100,617	)

*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 fiscal year ended March 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	7,346		$	5,753
Realized net gain on investments		5,194			79,392
Unrealized appreciation (depreciation)	(113,157		)		10,677
Net increase (decrease) in net assets resulting from operations	(100,617		)		95,822
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A		(6,280	)		(4,498	)
Class B		(120	)		(––	)
Class C		(749	)		(219	)
Class E		(3	)		NA
Class I		(29	)		NA
Class Y		(154	)		(146	)
Advisor Class		(46	)		(37	)
Class II		(––	)		(––	)*
Realized gains on investment transactions:
Class A		(45,728	)		(30,521	)
Class B		(4,026	)		(2,704	)
Class C		(12,421	)		(10,901	)
Class E		(31	)		NA
Class I		(159	)		NA
Class Y		(834	)		(689	)
Advisor Class		(233	)		(142	)
Class II		(––	)		(1	)
		(70,813	)		(49,858	)
Capital share transactions (Note 5)	(235,499		)		38,788
Total increase (decrease)	(406,929		)		84,752
NET ASSETS
Beginning of period		997,957			913,205
End of period	$	591,028		$	997,957
Undistributed net investment loss	$	(1,139	)	$	(1,593	)

*Not shown due to rounding.

(1)See "Financial Highlights" on pages 117 - 123.

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 fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of period	$	16.28		$	15.52		$	13.79		$	12.57		$	11.41			$	8.39
Income (loss) from investment       operations:
Net investment income		0.18			0.13			0.17			0.04			0.01				0.01
Net realized and unrealized gain            (loss) on investments		(2.00	)		1.49			2.21			1.25			1.15				3.05
Total from investment operations		(1.82	)		1.62			2.38			1.29			1.16				3.06
Less distributions from:
Net investment income		(0.18	)		(0.11	)		(0.16	)		(0.07	)		(0.00	)			(0.04	)
Capital gains		(1.31	)		(0.75	)		(0.49	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(1.49	)		(0.86	)		(0.65	)		(0.07	)		(0.00	)			(0.04	)
Net asset value, end of period	$	12.97		$	16.28		$	15.52		$	13.79		$	12.57			$	11.41
Total return (1)	- -12.07		%		10.71	%		17.49	%		10.29	%		10.17	%			36.43	%
Net assets, end of period       (in millions)	$443			$688			$625			$321			$59				$30
Ratio of expenses to average net assets       including reimbursement		1.59	%		1.55	%		1.62	%		1.74	%		1.70	% (3)			2.05	%
Ratio of net investment income (loss) to       average net assets including       reimbursement		1.05	%		0.81	%		1.09	%		0.08	%		- -0.09	% (3)			0.18	%
Ratio of expenses to average net assets       excluding reimbursement		1.59	% (2)		1.55	% (2)		1.62	% (2)		1.74	% (2)		1.84	% (3)			2.21	%
Ratio of net investment income (loss)       to average net assets excluding       reimbursement		1.05	% (2)		0.81	% (2)		1.09	% (2)		0.08	% (2)		- -0.23	% (3)			0.02	%
Portfolio turnover rate		39	%		42	%		4	%		5	%		1	%			24	%

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

(2)There was no waiver of expenses during the period.

(3)Annualized.

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 fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of       period	$	15.93		$	15.23		$	13.54		$	12.38		$	11.26			$	8.32
Income (loss) from investment       operations:
Net investment income (loss)		0.03	(1)		(0.01	)		0.06			(0.01	)		(0.02	)			(0.06	)
Net realized and unrealized            gain (loss) on investments		(1.93	) (1)		1.46			2.14			1.17			1.14				3.00
Total from investment operations		(1.90	)		1.45			2.20			1.16			1.12				2.94
Less distributions from:
Net investment income		(0.04	)		(0.00	)		(0.02	)		(0.00	)		(0.00	)			(0.00	)
Capital gains		(1.31	)		(0.75	)		(0.49	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(1.35	)		(0.75	)		(0.51	)		(0.00	)		(0.00	)			(0.00	)
Net asset value, end of period	$	12.68		$	15.93		$	15.23		$	13.54		$	12.38			$	11.26
Total return	- -12.83		%		9.82	%		16.43	%		9.37	%		9.95	%			35.34	%
Net assets, end of period       (in millions)	$37			$59			$57			$37			$12				$7
Ratio of expenses to average net       assets including reimbursement		2.48	%		2.44	%		2.51	%		2.62	%		2.52	% (3)			3.20	%
Ratio of net investment income       (loss) to average net assets       including reimbursement		0.18	%		- -0.07	%		0.21	%		- -0.86	%		- -1.31	% (3)			- -1.13	%
Ratio of expenses to average net       assets excluding reimbursement		2.48	% (2)		2.44	% (2)		2.51	% (2)		2.62	% (2)		2.67	% (3)			3.36	%
Ratio of net investment income       (loss) to average net assets       excluding reimbursement		0.18	% (2)		- -0.07	% (2)		0.21	% (2)		- -0.86	% (2)		- -1.46	% (3)			- -1.29	%
Portfolio turnover rate		39	%		42	%		4	%		5	%		1	%			24	%

(1)Based on average weekly shares outstanding.

(2)There was no waiver of expenses during the period.

(3)Annualized.

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 fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of period	$	15.88		$	15.16		$	13.48		$	12.30		$	11.19			$	8.26
Income (loss) from investment       operations:
Net investment income (loss)		0.05			0.03			0.08			(0.02	)		(0.01	)			(0.03	)
Net realized and unrealized gain       (loss) on investments		(1.92	)		1.46			2.14			1.20			1.12				2.96
Total from investment operations		(1.87	)		1.49			2.22			1.18			1.11				2.93
Less distributions from:
Net investment income		(0.08	)		(0.02	)		(0.05	)		(0.00	)		(0.00	)			(0.00	)
Capital gains		(1.31	)		(0.75	)		(0.49	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(1.39	)		(0.77	)		(0.54	)		(0.00	)		(0.00	)			(0.00	)
Net asset value, end of period	$	12.62		$	15.88		$	15.16		$	13.48		$	12.30			$	11.19
Total return	- -12.65		%		10.03	%		16.70	%		9.59	%		9.92	%			35.47	%
Net assets, end of period       (in millions)	$99			$233			$211			$96			$24				$11
Ratio of expenses to average net       assets including reimbursement		2.25	%		2.21	%		2.28	%		2.42	%		2.35	% (2)			2.93	%
Ratio of net investment income (loss)       to average net assets including       reimbursement		0.37	%		0.15	%		0.43	%		- -0.62	%		- -1.09	% (2)			- -0.83	%
Ratio of expenses to average net       assets excluding reimbursement		2.25	% (1)		2.21	% (1)		2.28	% (1)		2.42	% (1)		2.50	% (2)			3.10	%
Ratio of net investment income (loss)       to average net assets excluding       reimbursement		0.37	% (1)		0.15	% (1)		0.43	% (1)		- -0.62	% (1)		- -1.23	% (2)			- -1.00	%
Portfolio turnover rate		39	%		42	%		4	%		5	%		1	%			24	%

(1)There was no waiver of expenses during the period.

(2)Annualized.

See Notes to Financial Statements.

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

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	16.23
Income (loss) from investment operations:
Net investment income			0.02	(2)
Net realized and unrealized loss on investments			(1.87	) (2)
Total from investment operations			(1.85	)
Less distributions from:
Net investment income			(0.14	)
Capital gains			(1.31	)
Total distributions			(1.45	)
Net asset value, end of period		$	12.93
Total return (3)		- -12.31		%
Net assets, end of period (in thousands)		$413
Ratio of expenses to average net assets			2.31	% (4)
Ratio of net investment income to average net assets			0.29	% (4)
Portfolio turnover rate			39	% (5)

(1)Commencement of operations of the class.

(2)Based on average weekly 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 March 31, 2008.

See Notes to Financial Statements.

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

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	16.29
Income (loss) from investment operations:
Net investment income			0.24	(2)
Net realized and unrealized loss on investments			(1.87	) (2)
Total from investment operations			(1.63	)
Less distributions from:
Net investment income			(0.24	)
Capital gains			(1.31	)
Total distributions			(1.55	)
Net asset value, end of period		$	13.11
Total return		- -10.93		%
Net assets, end of period (in millions)		$2
Ratio of expenses to average net assets			1.21	% (3)
Ratio of net investment income to average net assets			1.45	% (3)
Portfolio turnover rate			39	% (4)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(4)For the 12 months ended March 31, 2008.

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 fiscal year ended March 31,											For the fiscal period ended				For the period from 7-24-03 (1) to
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of period	$	16.33		$	15.56		$	13.82		$	12.58		$	11.40			$	9.84
Income (loss) from investment operations:
Net investment income (loss)		0.25	(2)		0.19			0.19			0.07			(0.01	)			0.02
Net realized and unrealized gain (loss)             on investments		(2.01	) (2)		1.49			2.26			1.29			1.19				1.58
Total from investment operations		(1.76	)		1.68			2.45			1.36			1.18				1.60
Less distributions from:
Net investment income		(0.24	)		(0.16	)		(0.22	)		(0.12	)		(0.00	)			(0.04	)
Capital gains		(1.31	)		(0.75	)		(0.49	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(1.55	)		(0.91	)		(0.71	)		(0.12	)		(0.00	)			(0.04	)
Net asset value, end of period	$	13.02		$	16.33		$	15.56		$	13.82		$	12.58			$	11.40
Total return	- -11.73		%		11.14	%		17.99	%		10.90	%		10.35	%			16.28	%
Net assets, end of period (in millions)	$8			$15			$17			$10			$2				$1
Ratio of expenses to average net assets       including reimbursement		1.20	%		1.20	%		1.19	%		1.20	%		1.20	% (3)			1.76	% (3)
Ratio of net investment income (loss) to       average net assets including       reimbursement		1.42	%		1.18	%		1.46	%		0.52	%		- -0.32	% (3)			0.55	% (3)
Ratio of expenses to average net assets       excluding reimbursement		1.45	%		1.42	%		1.46	%		1.56	%		1.80	% (3)			2.09	% (3)
Ratio of net investment income (loss) to       average net assets excluding       reimbursement		1.17	%		0.96	%		1.19	%		0.16	%		- -0.92	% (3)			0.22	% (3)
Portfolio turnover rate		39	%		42	%		4	%		5	%		1	%			24	% (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 CUNDILL GLOBAL VALUE FUND
     Advisor Class Shares ⁽¹⁾
     For a Share of Capital Stock Outstanding Throughout Each Period:

	For the fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of period	$	16.30		$	15.54		$	13.77		$	12.54		$	11.37			$	8.34
Income (loss) from investment       operations:
Net investment income (loss)		0.25			0.21			0.22			0.04			(0.01	)			(0.01	)
Net realized and unrealized gain       (loss) on investments		(1.97	)		1.49			2.23			1.32			1.18				3.10
Total from investment operations		(1.72	)		1.70			2.45			1.36			1.17				3.09
Less distributions from:
Net investment income		(0.26	)		(0.19	)		(0.19	)		(0.13	)		(0.00	)			(0.06	)
Capital gains		(1.31	)		(0.75	)		(0.49	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(1.57	)		(0.94	)		(0.68	)		(0.13	)		(0.00	)			(0.06	)
Net asset value, end of period	$	13.01		$	16.30		$	15.54		$	13.77		$	12.54			$	11.37
Total return	- -11.54		%		11.33	%		18.09	%		10.86	%		10.29	%			37.11	%
Net assets, end of period       (in millions)	$2			$3			$3			$3			$3				$3
Ratio of expenses to average net       assets including reimbursement		1.05	%		1.05	%		1.12	%		1.23	%		1.26	% (3)			2.12	%
Ratio of net investment income (loss)       to average net assets including       reimbursement		1.62	%		1.31	%		1.57	%		0.41	%		- -0.17	% (3)			- -0.07	%
Ratio of expenses to average net       assets excluding reimbursement		1.05	% (2)		1.05	% (2)		1.12	% (2)		1.23	% (2)		1.41	% (3)			2.28	%
Ratio of net investment income (loss)       to average net assets excluding       reimbursement		1.62	% (2)		1.31	% (2)		1.57	% (2)		0.41	% (2)		- -0.32	% (3)			- -0.23	%
Portfolio turnover rate		39	%		42	%		4	%		5	%		1	%			24	%

(1)See Note 5 to financial statements.

(2)There was no waiver of expenses during the period.

(3)Annualized.

See Notes to Financial Statements.

Manager's Discussion of
Ivy European Opportunities Fund
     March 31, 2008

Ivy European Opportunities Fund is subadvised by Henderson Investment Management Ltd.

Below, Paul Casson, portfolio manager of the Ivy European Opportunities Fund, discusses positioning, performance and results for the fiscal year ended March 31, 2008. Mr. Casson has managed the Fund for two years and has 10 years of industry experience. He is part of the Pan-European Equities team at Henderson, headed by Stephen Peak, who served as portfolio manager of the Fund for seven years until April 2006. Mr. Peak has 30 years of industry experience.

STYLE
VALUE	BLEND	GROWTH
	X		LARGE	CAPITALIZATION
			MEDIUM
			SMALL

This diagram shows the Fund's equity investment style and the size of companies in the Fund, as measured by market capitalization. Shaded areas reflect quarterly data for the past three years. Source: Morningstar

The Fund fell 4.52 percent (Class A shares at net asset value) for the fiscal year ended March 31, 2008. This underperformed the 0.18 percent increase in the MSCI Europe Index, which reflects the performance of securities that generally represent the European stock market. The Lipper European Region Funds Universe Average (reflecting the universe of funds with similar investment objectives) declined 3.16 percent for the same period. Please note that Fund returns include applicable fees and expenses while index returns do not include any such fees.

Merger growth, then a credit purge

After a strong first half of calendar year 2007, driven by the rapid expansion in Germany and mergers-and-acquisition activity, the main European markets were severely winded by the fallout from the summer credit crunch. News in June was dominated by the debacle surrounding a series of tiered and incorrect bets made by two Bear Stearns hedge funds, which led to their use of bank money to protect clients. The latter part of the year continued in a similar manner, with significant volatility brought about by escalating subprime woes, concerns that a credit crunch would bring the end of the European mergers-and-acquisition boom, intervention by central banks, significant deleveraging and mixed macroeconomic data.

Not surprisingly, January 2008 brought about an implosion of what confidence remained in equity markets. The positive reaction to aggressive interest rate cuts by the Federal Reserve proved to be temporary and was followed by the turmoil of the massive trading loss at a French bank. During February, poor survey data from the U.S. was a cause for concern, and oil prices again touched nearly $112 per barrel, leading to the prospect of stagflation in the world's largest economy weighing heavily on investor sentiment. Markets were given some positive encouragement when Warren Buffet offered to re-insure $800 billion of municipal bonds previously guaranteed by troubled U.S. bond insurers. However, this positive news again proved to be only temporary as negative sentiment soon took hold once more.

Meanwhile, the Bank of England cut base rates by 25 basis points to 5.25 percent in response to increased signs of economic weakness, while the Fed cut short-term interest rates another 75 basis points in March. In light of these actions, the European Central Bank seems to be concerned about a rise in inflation expectations and may be much slower to adjust interest rates further. Given all this, the continued divergence in U.S. and European monetary policy pushed the euro through the $1.50 barrier for the first time.

German financials hurt results

With regard to sector performance, the hardest hit area of the Fund was our financials exposure, with Germany being singled out for special attention during the latter part of 2007 following the rescue of German bank IKB and the problems in Lower Saxony. Particularly poor performers were Commerzbank Aktiengesellschaft and Hypo Real Estate Holding AG. That said, we find the area of financials the most interesting right now. Most major economies have been affected by a bankrupt bank (i.e. Bear Stearns, IKB and Northern Rock).   It appears that regulators and central banks now appreciate that liquidity must be made freely available to allow solid banks to proceed with recapitalizing and readjusting their balance sheets. The result of this has been a lot of opportunity and new holdings over the quarter, including the Bank of Ireland and Deutsche Postbank AG. These companies, along with our other financial holdings - Aurora Russia Limited, Lloyds TSB Group plc and Man Group plc - all outperformed the market to a significant degree during the fiscal year. We feel the process of healing has begun, but a lot of patience will be required.

Cash is precious in this environment, and we have been looking to buy stocks where share prices have dislocated from fundamental values in a big way. We have bought into HBOS plc, a U.K. bank with a strong retail franchise and a clear run at some of the market share ceded by the destruction of the Northern Rock franchise.

Elsewhere, offshore drilling contractor SeaDrill Limited was the leading positive performer over the reporting year, having also had a strong end to the first quarter for 2008. The company reported results significantly ahead of market expectations and announced its first dividend.

Other notable activity included a new position in Capita Group Plc (The). This was somewhat opportunistic as we placed the trade during a collapse in the share price following the loss of a transport contract in London. Considering our opinion that the sell off was greatly exaggerated, we managed to pick up what we consider to be a cheap stock. We bought a stake in Ashtead Group plc, the U.K. provider of rental equipment to industrial and commercial users. The shares appeared to us to be oversold, and we viewed the weakness as a good buying opportunity.

Top 10 Equity Holdings as of March 31, 2007	March 31, 2008
Commerzbank Aktiengesellschaft National Bank of Greece S.A. StatoilHydro ASA Hypo Real Estate Holding AG Akzo Nobel N.V. Alpha Bank Peugeot S.A. CRH public limited company Royal Bank of Scotland Group plc (The) Pfleiderer AG, Registered Shares	Royal Bank of Scotland Group plc (The) Peugeot S.A. Alpha Bank SeaDrill Limited RWE Aktiengesellschaft CRH public limited company Sanofi-Aventis Imperial Tobacco Group PLC Continental Aktiengesellschaft National Bank of Greece S.A.

See your advisor or www.ivyfunds.com for more information on the Fund's most recently published Top 10 Equity Holdings.

In health care, Sanofi-Aventis got punished on a refusal by the FDA to approve its Accomplia drug for sale in the U.S. We feel this should have been offset by positive news on a patent trial for another drug, Plavix, but wasn't.   Hence, we took the opportunity to make our holding more meaningful as negative sentiment has masked what we view as attractive fundamental valuation.

Above all, it's worth noting that business confidence in Europe remains at relatively high levels. The closely watched German IFO survey, which is positively correlated with developments in the German and Eurozone economies, is still at a level consistent with economic growth close to its trend rate.

Our outlook

We expect markets to remain volatile in the near term, driven by sharp swings in investment sentiment. The economic outlook in the U.S. remains challenging, in our opinion, and we believe the full implications for growth in the rest of the world have yet to be fully felt. Many European companies have not witnessed much of a slowdown so far, but the real question is how the environment will develop as the year progresses. However, we believe difficult markets can generate opportunities to buy good companies at attractive prices, and we will continue in our effort to take advantage of any such opportunities.

As with any mutual fund, the value of the Fund's shares will change, and you could lose money on your investment. International investing involves additional risks, including currency fluctuations, political or economic conditions affecting the foreign country, and differences in accounting standards and foreign regulations. These and other risks are more fully described in the Fund's prospectus.

The Fund's performance noted above is at net asset value (NAV), and does not include the effect of any applicable sales charges. If reflected, the sales charge would reduce the performance noted.

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

Comparison of Change in Value of
$10,000 Investment

Ivy European Opportunities Fund, Class A Shares(1)	$	71,445
MSCI Europe Index (2)	$	18,442
Lipper European Region Funds Universe Average(2)	$	23,275

		IVY EUROPEAN OPPORTUNITIES FUND, CLASS A	MSCI EUROPE	LIPPER EUROPEAN REGION FUNDS UNIVERSE
		SHARES	INDEX	AVERAGE
Inception 5/4/99		9,425	10,000	10,000
DEC	1999	29,743	12,077	13,469
DEC	2000	31,084	11,063	12,811
DEC	2001	24,661	8,862	10,329
DEC	2002	23,848	7,233	8,911
DEC	2003	36,016	10,021	12,514
MARCH	2004	40,380	10,110	12,913
MARCH	2005	51,291	12,170	15,525
MARCH	2006	61,249	14,682	19,410
MARCH	2007	74,830	18,409	24,035
MARCH	2008	71,445	18,442	23,275

Please note that the performance of the Fund's other share classes will be greater or less than the performance shown above for Class A based on the differences in loads and fees paid by shareholders investing in the different classes.

(1)The value of the investment in the Fund is impacted by the sales load at the time of the investment and by the ongoing expenses of the Fund and assumes reinvestment of dividends and distributions.

(2)Because the Fund commenced operations on a date other than at the end of a month, and partial month calculations of the performance of the indexes (including income) are not available, investment in the indexes was effected as of May 31, 1999.

Average Annual Total Return(3)
	Class A	Class B	Class C	Class E(4)	Class I	Class Y	Advisor Class(4)
1-year period ended 3-31-08	- -10.01%	-8.68%	- -5.16%	––	––	-4.33%	-4.12%
5-year period ended 3-31-08	26.49%	27.00%	27.13%	––	––	––	28.57%
10-year period ended 3-31-08	––	––	––	––	––	––	––
Since inception of Class (5) through 3-31-08	24.68%	24.46%	15.68%	––	––	23.40%	25.96%
Cumulative return since inception of Class (5) through 3-31-08	––	––	––	- -10.01%	-  4.24%	––	––

(3)Data quoted is past performance and is based on deduction of the maximum applicable sales load for each of the periods. Current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Please visit www.ivyfunds.com for the Fund's most recent month-end performance. Class A and Class E shares carry a maximum front-end sales load of 5.75%. Class B and Class C shares carry maximum contingent deferred sales charges (CDSC) of 5% and 1%, respectively. (Accordingly, the Class C shares reflect no CDSC since it only applies to Class C shares redeemed within twelve months after purchase.) Class I and Class Y shares are not subject to sales charges.

(4)Class E shares are not currently available for investment. Advisor Class shares are no longer available for investment.

(5)5-4-99 for Class A shares, 5-24-99 for Class B shares, 10-24-99 for Class C shares, 4-2-07 for Class E and Class I shares, 7-24-03 for Class Y shares and 5-3-99 for Advisor Class shares (the date on which shares were first acquired by shareholders).

Past performance is not necessarily indicative of future performance. Indexes are unmanaged. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

SHAREHOLDER SUMMARY OF IVY EUROPEAN OPPORTUNITIES FUND

Portfolio Highlights

On March 31, 2008, Ivy European Opportunities Fund had net assets totaling $542,711,377 invested in a diversified portfolio of:

94.19%	Foreign Common Stocks and Rights
5.81%	Cash and Cash Equivalents

Country Weightings

As a shareholder of the Fund, for every $100 you had invested on March 31, 2008, your Fund was invested by country and by industry, respectively, as follows:

United Kingdom	$	22.00
Germany	$	13.52
France	$	11.48
Bahamas/Caribbean(1)	$	8.08
Greece	$	7.64
Other Europe(2)	$	6.74
Cash and Cash Equivalents	$	5.81
Ireland	$	5.80
Netherlands	$	5.54
Spain	$	4.88
Italy	$	3.36
Norway	$	2.97
Other (3)	$	2.18

(1)Includes $3.19 Bermuda, $2.73 British Virgin Islands and $2.16 Cayman Islands.

(2)Includes $1.73 Belgium, $1.82 Luxembourg, $2.25 Sweden and $0.94 Switzerland.

(3)Includes $2.18 Cyprus.

Sector Weightings

Financial Services Stocks	$	26.79
Energy Stocks	$	11.14
Utilities Stocks	$	9.52
Capital Goods Stocks	$	9.38
Consumer Durables Stocks	$	7.49
Consumer Nondurables Stocks	$	6.32
Cash and Cash Equivalents	$	5.81
Consumer Services Stocks	$	5.56
Transportation Stocks	$	5.35
Miscellaneous Stocks(4)	$	3.49
Raw Materials Stocks	$	3.23
Retail Stocks	$	2.97
Health Care Stocks	$	2.95

(4)Includes $1.24 Business Equipment and Services Stocks and $2.25 Multi-Industry Stocks.

The Investments of Ivy European Opportunities Fund
March 31, 2008
COMMON STOCKS AND RIGHTS		Shares		Value
Belgium - 1.73%
Fortis (A)		372,938	$	9,385,125
Bermuda - 3.19%
SeaDrill Limited (A)		645,456		17,301,392
British Virgin Islands - 2.73%
Inmarsat plc (A)	1,677,463			14,789,786
Cayman Islands - 2.16%
Subsea 7 Inc. (A)*		518,208		11,702,636
Cyprus - 2.18%
Prosafe ASA (A)		754,126		11,847,198
France - 11.48%
Altamir Amboise (A)		484,911		4,868,938
Altamir Amboise, Rights (A)*		620,694		127,390
France Telecom (A)		317,313		10,670,446
Peugeot S.A. (A)		251,804		19,523,049
Sanofi-Aventis (A)		213,157		15,991,570
TOTAL S.A. (A)		150,058		11,144,011
				62,325,404
Germany - 13.52%
Bayer Aktiengesellschaft (A)		86,156		6,909,782
Commerzbank Aktiengesellschaft (A)		423,748		13,339,756
Continental Aktiengesellschaft (A)		147,829		15,186,424
DaimlerChrysler AG, Registered Shares (A)		69,487		5,949,196
Deutsche Post AG (A)		322,362		9,863,083
Deutsche Postbank AG (A)		60,774		5,819,206
RWE Aktiengesellschaft (A)		132,070		16,313,536
				73,380,983
Greece - 7.64%
Alpha Bank (A)		544,526		18,053,150
Coca-Cola Hellenic Bottling Company S.A. (A)		41,073		1,912,906
National Bank of Greece S.A. (A)		287,027		15,144,128
OPAP S.A. (A)		178,021		6,346,149
				41,456,333
Ireland - 5.80%
Bank of Ireland (A)		386,922		5,726,771
CRH public limited company (A)		430,057		16,267,766
Grafton Group plc, Units (A)*		151,493		1,387,189
IAWS Group, plc (A)		344,056		8,087,959
				31,469,685
Italy - 3.36%
AZIMUT HOLDING S.P.A. (A)		438,876		4,552,210
Eni S.p.A. (A)		255,102		8,699,268
UniCredit S.p.A. (A)		748,220		5,008,530
				18,260,008
Luxembourg - 1.82%
SES GLOBAL S.A., Fiduciary Deposit Receipts (A)		466,742		9,851,977
Netherlands - 5.54%
Akzo Nobel N.V. (A)		132,516		10,632,076
Heineken N.V. (A)		143,796		8,352,023
TNT N.V. (A)		298,381		11,084,298
				30,068,397
Norway - 2.97%
BW Offshore Limited (A)*		753,896		2,250,281
StatoilHydro ASA (A)		463,590		13,892,178
				16,142,459
Spain - 4.88%
Banco Bilbao Vizcaya Argentaria, S.A. (A)		545,783		12,020,134
FOMENTO DE CONSTRUCCIONES Y       CONTRATAS, S.A. (A)		142,802		9,401,246
Industria de Diseno Textil, S.A. (A)		91,332		5,074,080
				26,495,460
Sweden - 2.25%
Investor AB, B Shares (A)		542,916		12,220,944
Switzerland - 0.94%
UBS AG (A)		175,672		5,105,119
United Kingdom - 22.00%
Ashtead Group plc (A)		6,431,327		7,913,594
Aurora Russia Limited (A)*		1,460,000		2,564,352
British Sky Broadcasting Group plc (A)		500,476		5,527,515
Capita Group Plc (The) (A)		398,291		5,363,297
Compass Group PLC (A)		977,187		6,249,598
HBOS plc (A)		507,971		5,645,578
Imperial Tobacco Group PLC (A)		346,887		15,958,165
Investec plc (A)		356,195		2,392,919
Lloyds TSB Group plc (A)		1,022,122		9,148,729
MAXjet Airways, Inc. (A)(B)*		150,000		1
MAXjet Airways, Inc. (A)(B)(C)*		1,129,023		2
Man Group plc (A)		1,145,289		12,603,702
Regal Petroleum plc (A)*		266,965		646,392
Regal Petroleum plc (A)(D)*		1,050,000		2,542,322
Royal Bank of Scotland Group plc (The) (A)		2,937,592		19,661,875
tesco plc (A)		643,957		4,843,704
Vodafone Group Plc (A)		3,298,660		9,878,893
William Hill PLC (A)		1,132,896		8,448,323
				119,388,961
TOTAL COMMON STOCKS AND RIGHTS - 94.19%			$	511,191,867
(Cost: $497,426,734)

SHORT-TERM SECURITIES	Principal Amount in Thousands
Aircraft - 1.03%
United Technologies Corporation,
2.3%, 4-1-08	$5,589		5,589,000
Beverages - 0.74%
Coca-Cola Company (The),
2.2%, 4-14-08		4,000	3,996,822
Chemicals - Petroleum and Inorganic - 0.73%
E.I. du Pont de Nemours and Company,
2.22%, 4-30-08		4,000	3,992,847
Computers - Main and Mini - 0.55%
IBM International Group Capital LLC,
2.25%, 4-3-08		3,000	2,999,625
Finance Companies - 1.84%
USAA Capital Corp.,
2.3%, 4-7-08	10,000		9,996,167

Health Care - General - 0.11%
Johnson & Johnson,
1.985%, 4-7-08	577			576,809
Motor Vehicles - 0.25%
Harley-Davidson, Inc.,
2.3%, 4-1-08		1,348		1,348,000
TOTAL SHORT-TERM SECURITIES - 5.25%			$	28,499,270
(Cost: $28,499,270)
TOTAL INVESTMENT SECURITIES - 99.44%			$	539,691,137
(Cost: $525,926,004)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.56%				3,020,240
NET ASSETS - 100.00%			$	542,711,377

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 valued in good faith by the Valuation Committee subject to the supervision of the Board of Trustees.
(C)Restricted security. At March 31, 2008, the following restricted security was owned:
	Security	Acquisition Date	Shares	Cost	Market Value
	MAXjet Airways, Inc.	6-8-07	1,129,023	$3,066,488		$2
The total market value of this restricted security represented approximately 0.00% of net assets at March 31, 2008.
(D)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. This security has been determined to be illiquid under guidelines established by the Board of Trustees. At March 31, 2008, the total value of this security amounted to 0.47% 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
     March 31, 2008
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $525,926) (Notes 1 and 3)	$	539,691
Receivables:
Dividends and interest		2,950
Investment securities sold		1,724
Fund shares sold		1,153
Prepaid and other assets		32
Total assets		545,550
LIABILITIES
Payable to Fund shareholders		1,175
Payable for investment securities purchased		616
Accrued management fee (Note 2)		415
Accrued shareholder servicing (Note 2)		179
Due to custodian		178
Accrued service fee (Note 2)		135
Accrued accounting services fee (Note 2)		8
Accrued administrative fee (Note 2)		4
Accrued distribution fee (Note 2)		2
Other		127
Total liabilities		2,839
Total net assets	$	542,711
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	510,171
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(57	)
Accumulated undistributed net realized gain on                   investment transactions		18,781
Net unrealized appreciation in value of investments		13,816
Net assets applicable to outstanding units of capital	$	542,711
Net asset value per share (net assets divided by shares outstanding):
Class A	$34.70
Class B	$33.35
Class C	$33.49
Class E	$34.73
Class I	$34.80
Class Y	$34.75
Advisor Class	$35.07
Capital shares outstanding:
Class A		11,234
Class B		1,106
Class C		1,691
Class E		3
Class I		1,523
Class Y		128
Advisor Class		52

See Notes to Financial Statements.

Statement of Operations
     IVY EUROPEAN OPPORTUNITIES FUND
     For the Fiscal Year Ended March 31, 2008
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $1,166)	$	16,457
Interest and amortization		1,151
Total income		17,608
Expenses (Note 2):
Investment management fee		5,297
Shareholder servicing:
Class A		1,299
Class B		165
Class C		154
Class E		––	*
Class I		45
Class Y		7
Advisor Class		3
Service fee:
Class A		1,026
Class B		131
Class C		172
Class Y		13
Distribution fee:
Class A		58
Class B		387
Class C		505
Class E		––	*
Custodian fees		251
Accounting services fee		107
Administrative fee		59
Audit fees		23
Legal fees		8
Other		290
Total expenses		10,000
Net investment income		7,608
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		66,202
Realized net loss on foreign currency transactions		(317	)
Realized net gain on investments		65,885
Unrealized depreciation in value of investments during the period	(105,031		)
Net loss on investments		(39,146	)
Net decrease in net assets resulting from operations	$	(31,538	)

*Not shown due to rounding.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,
	2008			2007
INCREASE IN NET ASSETS
Operations:
Net investment income	$	7,608		$	3,038
Realized net gain on investments		65,885			42,154
Unrealized appreciation (depreciation)	(105,031		)		38,366
Net increase (decrease) in net assets resulting from operations		(31,538	)		83,558
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A		(5,178	)		(3,582	)
Class B		(201	)		(171	)
Class C		(324	)		(263	)
Class E		(1	)		NA
Class I		(656	)		NA
Class Y		(73	)		(69	)
Advisor Class		(34	)		(33	)
Realized gains on investment transactions:
Class A		(41,414	)		(––	)
Class B		(5,059	)		(––	)
Class C		(6,646	)		(––	)
Class E		(10	)		NA
Class I		(3,916	)		NA
Class Y		(521	)		(––	)
Advisor Class		(201	)		(––	)
		(64,234	)		(4,118	)
Capital share transactions (Note 5)		123,754			99,354
Total increase		27,982			178,794
NET ASSETS
Beginning of period		514,729			335,935
End of period	$	542,711		$	514,729
Undistributed net investment loss	$	(57	)	$	(881	)

(1)See "Financial Highlights" on pages 138 - 144.

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 fiscal year ended March 31,												For the fiscal period ended			For the fiscal year ended
	2008			2007			2006			2005			3-31-04			12-31-03
Net asset value, beginning of period	$	40.58		$	33.58		$	28.31		$	22.30		$	19.89		$	13.20
Income (loss) from investment operations:
Net investment income (loss)		0.60			0.31			0.10			(0.03	)		(0.03	)		0.02
Net realized and unrealized gain (loss)             on investments		(1.98	)		7.11			5.37			6.05			2.44			6.71
Total from investment operations		(1.38	)		7.42			5.47			6.02			2.41			6.73
Less distributions from:
Net investment income		(0.50	)		(0.42	)		(0.20	)		(0.01	)		(0.00	)		(0.04	)
Capital gains		(4.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Total distributions		(4.50	)		(0.42	)		(0.20	)		(0.01	)		(0.00	)		(0.04	)
Net asset value, end of period	$	34.70		$	40.58		$	33.58		$	28.31		$	22.30		$	19.89
Total return (1)	- 4.52		%		22.17	%		19.41	%		27.02	%		12.12	%		51.02	%
Net assets, end of period (in millions)	$390			$389			$235			$170			$79			$38
Ratio of expenses to average net assets		1.58	%		1.64	%		1.72	%		1.79	%		1.72	% (2)		2.26	%
Ratio of net investment income (loss) to       average net assets		1.43	%		0.91	%		0.35	%		- -0.07	%		- -0.61	% (2)		0.18	%
Portfolio turnover rate		65	%		42	%		62	%		63	%		31	%		123	%

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

(2)Annualized.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,												For the fiscal period ended			For the fiscal year ended
	2008			2007			2006			2005			3-31-04			12-31-03
Net asset value, beginning of period	$	39.14		$	32.40		$	27.32		$	21.66		$	19.36		$	12.93
Income (loss) from investment operations:
Net investment income (loss)		0.27	(1)		0.09			(0.11	)		(0.17	)		(0.09	)		(0.07	)
Net realized and unrealized gain (loss)             on investments		(1.90	) (1)		6.78			5.19			5.83			2.39			6.50
Total from investment operations		(1.63	)		6.87			5.08			5.66			2.30			6.43
Less distributions from:
Net investment income		(0.16	)		(0.13	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains		(4.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Total distributions		(4.16	)		(0.13	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Net asset value, end of period	$	33.35		$	39.14		$	32.40		$	27.32		$	21.66		$	19.36
Total return		- -5.27	%		21.24	%		18.59	%		26.13	%		11.88	%		49.73	%
Net assets, end of period (in millions)	$37			$52			$44			$40			$32			$29
Ratio of expenses to average net assets		2.35	%		2.40	%		2.45	%		2.53	%		2.58	% (2)		3.00	%
Ratio of net investment income (loss) to       average net assets		0.68	%		0.27	%		- -0.30	%		- -0.73	%		- -1.57	% (2)		- -0.47	%
Portfolio turnover rate		65	%		42	%		62	%		63	%		31	%		123	%

(1)Based on average weekly 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 fiscal year ended March 31,												For the fiscal period ended			For the fiscal year ended
	2008			2007			2006			2005			3-31-04			12-31-03
Net asset value, beginning of period	$	39.28		$	32.52		$	27.42		$	21.74		$	19.43		$	12.98
Income (loss) from investment operations:
Net investment income (loss)		0.32			0.12			(0.09	)		(0.14	)		(0.08	)		(0.07	)
Net realized and unrealized gain             (loss) on investments		(1.91	)		6.81			5.19			5.82			2.39			6.52
Total from investment operations		(1.59	)		6.93			5.10			5.68			2.31			6.45
Less distributions from:
Net investment income		(0.20	)		(0.17	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains		(4.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Total distributions		(4.20	)		(0.17	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Net asset value, end of period	$	33.49		$	39.28		$	32.52		$	27.42		$	21.74		$	19.43
Total return		- -5.16	%		21.33	%		18.60	%		26.13	%		11.89	%		49.69	%
Net assets, end of period (in millions)	$57			$65			$51			$45			$27			$23
Ratio of expenses to average net assets		2.26	%		2.32	%		2.42	%		2.51	%		2.56	% (1)		2.98	%
Ratio of net investment income (loss) to       average net assets		0.78	%		0.32	%		- -0.29	%		- -0.79	%		- -1.54	% (1)		- -0.43	%
Portfolio turnover rate		65	%		42	%		62	%		63	%		31	%		123	%

(1)Annualized.

See Notes to Financial Statements.

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

	For the period from 4-2-07 (2) through
	03-31-08
Net asset value, beginning of period		$	40.69
Income (loss) from investment operations:
Net investment income			0.73
Net realized and unrealized loss on investments			(2.11	)
Total from investment operations			(1.38	)
Less distributions from:
Net investment income			(0.58	)
Capital gains			(4.00	)
Total distributions			(4.58	)
Net asset value, end of period		$	34.73
Total return (3)		-4.52		%
Net assets, end of period (in thousands)		$95
Ratio of expenses to average net assets			1.28	% (4)
Ratio of net investment income to average net assets			1.78	% (4)
Portfolio turnover rate			65	% (5)

(1)See Note 5 to financial statements.

(2)Commencement of operations of the class.

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

(4)Annualized.

(5)For the twelve months ended March 31, 2008.

See Notes to Financial Statements.

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

	For the period from 4-2-07 (1) through
	03-31-08
Net asset value, beginning of period		$	40.73
Income (loss) from investment operations:
Net investment income			0.35	(2)
Net realized and unrealized loss on investments			(1.61	) (2)
Total from investment operations			(1.26	)
Less distributions from:
Net investment income			(0.67	)
Capital gains			(4.00	)
Total distributions			(4.67	)
Net asset value, end of period		$	34.80
Total return		-4.24		%
Net assets, end of period (in millions)		$53
Ratio of expenses to average net assets			1.17	% (3)
Ratio of net investment income to average net assets			1.44	% (3)
Portfolio turnover rate			65	% (4)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(4)For the twelve months ended March 31, 2008.

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 fiscal year ended March 31,												For the fiscal period ended			For the period from 7-24-03 (1) to
	2008			2007			2006			2005			3-31-04			12-31-03
Net asset value, beginning of period	$	40.61		$	33.60		$	28.33		$	22.30		$	19.89		$	14.88
Income (loss) from investment operations:
Net investment income (loss)		0.61			0.44			0.18			0.09			(0.02	)		(0.04	)
Net realized and unrealized gain             (loss) on investments		(1.91	)		7.05			5.34			6.00			2.43			5.12
Total from investment operations		(1.30	)		7.49			5.52			6.09			2.41			5.08
Less distributions from:
Net investment income		(0.56	)		(0.48	)		(0.25	)		(0.06	)		(0.00	)		(0.07	)
Capital gains		(4.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Total distributions		(4.56	)		(0.48	)		(0.25	)		(0.06	)		(0.00	)		(0.07	)
Net asset value, end of period	$	34.75		$	40.61		$	33.60		$	28.33		$	22.30		$	19.89
Total return	-4.33		%		22.38	%		19.60	%		27.32	%		12.12	%		34.14	%
Net assets, end of period (in millions)	$4			$7			$4			$4			$4			$3
Ratio of expenses to average net assets		1.41	%		1.44	%		1.55	%		1.61	%		1.75	% (2)		1.51	% (2)
Ratio of net investment income (loss) to       average net assets		1.60	%		1.14	%		0.60	%		0.53	%		- -0.71	% (2)		- -0.58	% (2)
Portfolio turnover rate		65	%		42	%		62	%		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 fiscal year ended March 31,												For the fiscal period ended			For the fiscal year ended
	2008			2007			2006			2005			3-31-04			12-31-03
Net asset value, beginning of period	$	40.96		$	33.88		$	28.55		$	22.48		$	20.03		$	13.34
Income (loss) from investment operations:
Net investment income (loss)		0.92			0.94			0.35	(2)		0.21			(0.01	)		0.24
Net realized and unrealized gain             (loss) on investments		(2.13	)		6.73			5.32	(2)		5.99			2.46			6.58
Total from investment operations		(1.21	)		7.67			5.67			6.20			2.45			6.82
Less distributions from:
Net investment income		(0.68	)		(0.59	)		(0.34	)		(0.13	)		(0.00	)		(0.13	)
Capital gains		(4.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Total distributions		(4.68	)		(0.59	)		(0.34	)		(0.13	)		(0.00	)		(0.13	)
Net asset value, end of period	$	35.07		$	40.96		$	33.88		$	28.55		$	22.48		$	20.03
Total return	-4.12		%		22.76	%		20.00	%		27.64	%		12.23	%		51.12	%
Net assets, end of period (in millions)	$2			$2			$2			$4			$4			$4
Ratio of expenses to average net assets		1.15	%		1.19	%		1.25	%		1.36	%		1.41	% (3)		1.96	%
Ratio of net investment income (loss) to       average net assets		1.94	%		1.60	%		1.13	%		0.51	%		- -0.41	% (3)		1.02	%
Portfolio turnover rate		65	%		42	%		62	%		63	%		31	%		123	%

(1)See Note 5 to financial statements.

(2)Based on average shares outstanding.

(3)Annualized.

See Notes to Financial Statements.

Managers' Discussion of
Ivy International Balanced Fund
     March 31, 2008

Ivy International Balanced Fund is subadvised by Templeton Investment Counsel, LLC.

Below, Michael Hasenstab and Edgerton Tucker Scott III, CFA, portfolio managers of the Ivy International Balanced Fund, discuss positioning, performance and results for the fiscal year ended March 31, 2008. Mr. Hasenstab has managed the Fund for two years and has 12 years of industry experience. Mr. Scott has managed the Fund since its inception and has 13 years of industry experience.

The Fund rose 2.84 percent (Class A shares at net asset value) for the 12 months ended March 31, 2008. The Fund's equity benchmark, the MSCI AC World Excluding U.S.A. Index (an index that generally reflects the performance of international stock markets) increased 2.58 percent for the period. The Fund's international fixed-income benchmark, the J.P. Morgan Non-U.S. Government Bond Index (generally reflecting the performance of international government bonds), rose 22.19 percent. Multiple indexes are presented because the Fund invests in stocks, bonds and other instruments.

For the fiscal year, the Lipper Mixed-Asset Target Allocation Growth Funds Universe Average (reflecting the performance of funds with similar objectives) fell 2.22 percent for the 12 months ended March 31, 2008.

Please note that Fund returns include applicable fees and expenses while index returns do not include any such fees.

STYLE
VALUE	BLEND	GROWTH
X			LARGE	CAPITALIZATION
			MEDIUM
			SMALL

This diagram shows the Fund's equity investment style and the size of companies in the Fund, as measured by market capitalization. Shaded areas reflect quarterly data for the past three years. Source: Morningstar

MATURITY
SHORT	INTER	LONG
X			HIGH	CREDIT QUALITY
			MEDIUM
			LOW

This diagram shows the Fund's fixed-income investment style by displaying the average credit quality of the bonds owned and the Fund's interest rate sensitivity, as measured by average maturity. Shaded areas show the past three years of quarterly data. Source: Morningstar

During the past fiscal year, prices for oil and agricultural and industrial commodities, as well as precious metals like silver and gold, increased significantly and contributed to global inflation. While inflationary pressures remained a major concern within the euro-zone, the U.S. focused on reigniting its economy through fiscal and monetary policies. Despite possible further pressure to prices, since September the Federal Reserve Board (Fed) has reduced its federal funds target rate from 5.25 percent to 3 percent. The Fed's interest rate reductions pressured the U.S. dollar as other countries' central banks generally left rates unchanged, and the dollar's value declined against many of the world's currencies. The dollar's weakness was another reason for higher commodity prices, as most commodities are priced in U.S. dollars.

Weaker U.S. dollar boosted returns

Against this challenging economic backdrop, global equity markets were volatile, particularly in the second half of the period when few stocks escaped unscathed. A weaker currency contributed to boosting returns for U.S.-based investors of foreign equities. A slew of negative economic data and the outlook for decelerating corporate earnings and profit margins contrasted sharply with the relatively strong position of many corporate balance sheets. Although many financial institutions were hurt by their subprime loan exposure, abundant global liquidity sources, such as sovereign wealth funds, enabled the institutions to replenish their capital base during the period.

Energy, materials stocks didn't meet our value screen

In a volatile period for global equity markets, the equity portion of the Fund showed mixed results. Over the past 12 months, the energy and materials sectors were the best performers in the stock market, but the Fund's relatively lower weighting in these sectors detracted mildly from the Fund's relative performance.

Our strategy has always been to populate portfolios with stocks we consider undervalued, with a caveat that distinguishes our investment process: a time horizon (five-year target holding period) that exceeds that of most investors. Based on our forward-looking models for individual companies, the Fund's average weightings in the energy and materials sectors remained well below index weightings.

A near-term risk to the Fund is that relative performance could potentially lag if these sectors were favored strongly in the broader market, which was the case over the last fiscal year. While it is disappointing to underperform over any period, our valuation-driven work has indicated that better long-term opportunities may exist elsewhere (like media and telecom services, where the Fund maintained overweight positions relative to its benchmark).

Top 10 Equity Holdings as of March 31, 2007	March 31, 2008
Sanofi-Aventis BP p.l.c. Royal Bank of Scotland Group plc (The) France Telecom ING Groep N.V., Certicaaten Van Aandelen GlaxoSmithKline plc Compass Group PLC Group 4 Securicor plc Mega Financial Holding Company Vestas Wind Systems A/S	France Telecom ING Groep N.V., Certicaaten Van Aandelen Adecco S.A. Mega Financial Holding Company Samsung Electronics Co., Ltd. Sanofi-Aventis Vodafone Group Plc Novartis AG, Registered Shares GlaxoSmithKline plc BP p.l.c.

See your advisor or www.ivyfunds.com for more information on the Fund's most recently published Top 10 Equity Holdings.

While the Fund had minimal exposure to metals and mining stocks, which performed strongly, it was overweight in paper and forest products, which performed poorly during the period. In short, we believe these results underscore the patient approach associated with our investment process.

The consumer discretionary sector, which includes media, specialty retailers, auto parts manufacturers, and makers of household durable goods, is an area where our analysts have identified potentially rewarding long-term investment opportunities. This explains our relative overweight in this sector when compared to the index. This sector also negatively impacted the Fund's relative performance, as concern about the economy translated into a pessimistic outlook for the sector. However, we are confident about the longer-term prospects for the Fund's holdings. In fact, during this period we used price weakness as an opportunity to add to existing positions and initiate new positions.

The Fund's underweight in the financials sector has preserved relative performance since the credit contraction began last summer. We have continued to closely monitor banks and brokerages to identify underleveraged firms with minimal exposure to complex debt securities whose price weakness has been more reflective of sector trends than bottom-up value metrics. While selective companies do fit this profile, we have remained generally skeptical of future earnings sources for firms that we believe have long relied on financial engineering to manufacture profits, and mispriced leverage.

Industrials and telecom helped results

During the period, the Fund benefited from strong absolute and relative performance of its industrials and telecommunications services holdings. The Fund remained overweight in the telecommunications sector, on the basis of high free cash flow and broad exposure to many of the world's fastest growing consumer markets. While higher exposure to telecom companies benefited the Fund's relative performance, our stock selection within the industrials and telecom-services sectors contributed largely to the Fund's strong performance in these sectors.

Portfolio Characteristics
As of March 31, 2008
Average maturity	4.70 years
Effective duration	2.30 years
Weighted average bond rating	AA

A flight to quality, and Mexico

Shifting to the fixed income portion of the Fund, tensions in the bank sector and flight to quality drove Treasury yields lower in developed bond markets while financial market contagion pushed yields higher in peripheral bond markets. While economic activity was reasonably good outside of the U.S. this past fiscal year, we extended duration in countries such as Mexico and South Korea where we believed the market was too optimistic in its expectations for the economy to fully decouple from the events in the global credit market or the economic slowdown in the U.S. Overall, however, Fund positioning with respect to interest rates and duration broadly detracted from our results over the fiscal year because we were underweight in developed markets at the onset of the global credit shock.

Among non-dollar currencies, we think rebalancing of the global economy favors Asia. Also, in our view, peripheral European currencies have more attractive valuations than the euro, particularly relative to fundamentals. During the fiscal year, we added exposure to the yen and the Swiss franc since the currencies tend to perform well in rising environments of risk aversion and help reduce volatility.

Our outlook

Though conditions in financial markets remain strained and economic activity seems likely to slow in the near-term, we believe that the current dislocation in global equities should represent little more to the long-term investor than the periodic rebalancing of wayward market trends. Corporate earnings have begun to come under pressure; however, there are still a number of geographically diversified companies with strong brand equity and abundant debt-free capital that should be able to self-fund growth in difficult credit markets and emerge as leaders of the next market cycle. We are often (though not always) finding these opportunities among larger-capitalization, non-financial companies that we feel have the size and balance sheet strength to weather the latter stages of the current market cycle. In our view, these companies have the potential to return significant value to patient, long-term investors over the coming years. We aim to take advantage of market weakness to add to existing positions and wil l continue to look for what we feel are attractive valuations as opportunities arise amid shifts in the global economy.

As with any mutual fund, the value of the Fund's shares will change, and you could lose money on your investment.

International investing involves additional risks, including currency fluctuations, political or economic conditions affecting the foreign country, and differences in accounting standards and foreign regulations. Fixed-income securities are subject to interest rate risk and, as such, the Fund's net asset value may fall as interest rates rise. These and other risks are more fully described in the Fund's prospectus.

The Fund's performance noted above is at net asset value (NAV), and does not include the effect of any applicable sales charges. If reflected, the sales charge would reduce the performance noted.

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

Comparison of Change in Value of
$10,000 Investment

Ivy International Balanced Fund, Class A Shares(1)	$	23,159
MSCI AC World ex U.S.A Index	$	25,031
J.P. Morgan Non-U.S. Government Bond Index	$	17,968
Lipper Mixed-Asset Target Allocation Growth Funds       Universe Average	$	16,581

		IVY INTERNATIONAL BALANCED FUND, CLASS A	MSCI AC WORLD ex U.S.A.	J.P. MORGAN NON-U.S. GOVERNMENT BOND	LIPPER MIXED-ASSET TARGET ALLOCATION GROWTH FUNDS UNIVERSE
		SHARES	INDEX	INDEX	AVERAGE
SEPT	1998	9,425	10,000	10,000	10,000
SEPT	1999	10,994	13,342	10,028	11,544
SEPT	2000	11,684	13,997	9,205	13,064
SEPT	2001	10,449	9,897	9,632	11,269
SEPT	2002	9,967	8,605	10,643	10,093
SEPT	2003	12,950	11,104	12,543	11,852
MARCH	2004	15,157	13,632	13,605	13,193
MARCH	2005	17,402	15,833	14,546	13,919
MARCH	2006	19,168	20,286	13,596	15,464
MARCH	2007	22,518	24,402	14,704	16,956
MARCH	2008	23,159	25,031	17,968	16,581

Please note that the performance of the Fund's other share classes will be greater or less than the performance shown above for Class A based on the differences in loads and fees paid by shareholders investing in the different classes.

(1)The value of the investment in the Fund is impacted by the sales load at the time of the investment and by the ongoing expenses of the Fund and assumes reinvestment of dividends and distributions.

Average Annual Total Return(2)
	Class A	Class B	Class C	Class E	Class I	Class Y
1-year period ended 3-31-08	- -3.07%	- -2.05%	2.14%	––	––	2.96%
5-year period ended 3-31-08	16.37%	––	––	––	––	––
10-year period ended 3-31-08	7.12%	––	––	––	––	––
Since inception of Class(3) through 3-31-08	––	10.67%	11.25%	––	––	12.25%
Cumulative return since inception of Class(3) through 3-31-08	––	––	––	- -3.95%	2.99%	––

(2)Data quoted is past performance and is based on deduction of the maximum applicable sales load for each of the periods. Current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Please visit www.ivyfunds.com for the Fund's most recent month-end performance. Class A and Class E shares carry a maximum front-end sales load of 5.75%. Class B and Class C shares carry maximum contingent deferred sales charges (CDSC) of 5% and 1%, respectively. (Accordingly, the Class C shares reflect no CDSC since it only applies to Class C shares redeemed within twelve months after purchase.) Class I and Class Y shares are not subject to sales charges.

(3)12-8-03 for Class B, Class C, and Class Y shares and 4-2-07 for Class E and Class I shares (the date on which shares were first acquired by shareholders).

Past performance is not necessarily indicative of future performance. Indexes are unmanaged. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

The Advantus International Balanced Fund merged into the Ivy International Balanced Fund on December 8, 2003. The performance shown for periods prior to this date is that of the Advantus International Balanced Fund Class A shares, restated to reflect current sales charges applicable to Ivy International Balanced Fund Class A shares. Performance has not been restated to reflect the fees and expenses applicable to the Ivy International Balanced Fund. If these expenses were reflected, performance shown would differ.

SHAREHOLDER SUMMARY OF IVY INTERNATIONAL BALANCED FUND

Portfolio Highlights

On March 31, 2008, Ivy International Balanced Fund had net assets totaling $364,666,739 invested in a diversified portfolio of:

60.76%	Foreign Common Stocks
32.92%	Other Government Securities
6.32%	Cash and Cash Equivalents and Unrealized Gain on       Open Forward Currency Contracts

As a shareholder of the Fund, for every $100 you had invested on March 31, 2008, your Fund was invested by country and by industry, respectively, as follows:

Country Weightings

Europe	$	64.58
United Kingdom	$	14.94
Germany	$	12.96
Other Europe(1)	$	10.80
France	$	10.22
Switzerland	$	5.21
Sweden	$	4.28
Poland	$	3.10
Norway	$	3.07
Pacific Basin	$	24.48
South Korea	$	6.06
Taiwan	$	4.85
Japan	$	4.66
Other Pacific Basin(2)	$	3.23
Singapore	$	2.95
Malaysia	$	2.73
Cash and Cash Equivalents and Unrealized Gain on       Open Forward Currency Contracts	$	6.32
North America(3)	$	2.70
Other(4)	$	1.92

(1)Includes $0.76 Austria, $0.74 Belgium, $0.47 Denmark, $1.27 Finland, $0.34 Greece, $0.24 Ireland, $2.49 Italy, $2.87 Netherlands and $1.62 Spain.

(2)Includes $2.14 Australia, $0.38 China, $0.62 Hong Kong and $0.09 New Zealand.

(3)Includes $2.70 Mexico.

(4)Includes $0.09 Bermuda, $0.70 Cayman Islands, $0.83 Israel and $0.30 Supranational.

Sector Weightings

Other Government Securities	$	32.92
Financial Services Stocks	$	13.32
Utilities Stocks	$	9.09
Technology Stocks	$	8.58
Miscellaneous Stocks(5)	$	6.96
Cash and Cash Equivalents and Unrealized Gain on       Open Forward Currency Contracts	$	6.32
Health Care Stocks	$	4.49
Business Equipment and Services Stocks	$	4.35
Energy Stocks	$	3.69
Consumer Services Stocks	$	3.60
Consumer Durables Stocks	$	3.59
Retail Stocks	$	3.09

(5)Includes $1.89 Capital Goods Stocks, $1.85 Consumer Nondurables Stocks, $0.62 Multi-Industry Stocks, $0.21 Raw Material Stocks, $1.80 Shelter Stocks and $0.59 Transportation Stocks.

The Investments of Ivy International Balanced Fund
March 31, 2008
COMMON STOCKS		Shares			Value
Australia - 0.76%
Downer EDI Limited (A)			481,443	$	2,754,346
Austria - 0.73%
Telekom Austria Aktiengesellschaft (A)			128,820		2,662,184
Belgium - 0.52%
Belgacom SA (A)			42,790		1,894,917
Bermuda - 0.09%
Invesco Ltd.			13,200		321,552
Cayman Islands - 0.70%
ACE Limited			46,490		2,559,739
China - 0.38%
China Telecom Corporation Limited (A)	1,848,000				1,158,762
China Telecom Corporation Limited (A)(B)			360,000		225,733
					1,384,495
Denmark - 0.47%
Vestas Wind Systems A/S (A)*			15,630		1,707,473
Finland - 0.94%
Stora Enso Oyj, Class R (A)			104,960		1,211,313
UPM-Kymmene Corporation (A)			124,110		2,204,319
					3,415,632
France - 7.20%
AXA S.A. (A)			109,570		3,976,910
France Telecom (A)			220,724		7,422,398
Sanofi-Aventis (A)			69,548		5,217,665
Sanofi-Aventis (A)(C)			21,600		1,620,486
THOMSON (A)			286,940		1,993,237
TOTAL S.A. (A)			52,520		3,900,382
Vivendi Universal (A)			54,670		2,136,187
					26,267,265
Germany - 4.54%
Bayerische Motoren Werke Aktiengesellschaft (A)			47,660		2,636,533
Deutsche Post AG (A)			70,260		2,149,696
Infineon Technologies AG (A)*			354,580		2,502,285
Munchener Ruckversicherungs-Gesellschaft Aktiengesellschaft, Registered Shares (A)			17,210		3,369,129
SAP Aktiengesellschaft (A)			63,190		3,132,514
Siemens AG (A)			25,310		2,764,716
					16,554,873
Hong Kong - 0.62%
Hutchison Whampoa Limited, Ordinary Shares (A)			239,000		2,261,742
Israel - 0.83%
Check Point Software Technologies Ltd.*			135,710		3,034,476
Italy - 1.98%
Eni S.p.A. (A)			83,858		2,859,653
Mediaset S.p.A. (A)			341,234		3,156,930
UniCredit S.p.A. (A)			179,693		1,202,852
					7,219,435
Japan - 4.66%
AIFUL Corporation (A)			54,200		870,528
Kabushiki Kaisha Mitsubishi Tokyo Financial       Group (A)			321,000		2,769,462
Konica Minolta Holdings, Inc. (A)			76,500		1,039,135
NGK SPARK PLUG CO., LTD. (A)			207,000		2,691,332
Promise Co., Ltd. (A)			46,200		1,327,879
Sony Corporation (A)			61,500		2,449,388
Toyota Motor Corporation (A)			35,400		1,765,028
USS Co., Ltd. (A)			58,990		4,083,377
					16,996,129
Netherlands - 2.87%
ING Groep N.V., Certicaaten Van Aandelen (A)			156,530		5,861,751
Koninklijke Philips Electronics N.V., Ordinary       Shares (A)			40,460		1,547,727
Reed Elsevier NV (A)			159,231		3,036,754
					10,446,232
Norway - 1.01%
Norske Skogindustrier ASA (A)			163,411		569,589
Telenor ASA (A)			163,300		3,126,602
					3,696,191
Singapore - 1.93%
DBS Group Holdings Ltd (A)			33,000		431,545
Flextronics International Ltd.*			237,690		2,227,155
Singapore Telecommunications Limited (A)			931,000		2,644,637
Venture Corporation Limited (A)			226,000		1,730,568
					7,033,905
South Korea - 2.37%
KT Corporation, ADR			48,730		1,157,338
Kookmin Bank, ADR			16,440		921,462
Samsung Electronics Co., Ltd. (A)			8,435		5,306,210
Samsung Electronics Co., Ltd., GDR (B)			4,010		1,261,287
					8,646,297
Spain - 1.62%
Gamesa Corporacion Tecnologica, S.A. (A)			53,110		2,423,200
Telefonica, S.A., ADR			40,135		3,472,079
Telefonica, S.A., Brazilian Depositary Receipts (A)			569		16,214
					5,911,493
Sweden - 1.54%
Securitas AB, Class B (A)			105,270		1,390,761
Securitas Systems AB, Class B (A)			432,360		1,258,838
Telefonaktiebolaget LM Ericsson, B Shares (A)	1,502,130				2,947,708
					5,597,307
Switzerland - 5.21%
Adecco S.A. (A)			92,830		5,360,790
Lonza Group Ltd, Registered Shares (A)			5,800		769,167
Nestle S.A., Registered Shares (A)			7,930		3,962,604
Novartis AG, Registered Shares (A)			93,980		4,816,818
Swiss Reinsurance Company, Registered Shares (A)			26,800		2,341,053
UBS AG (A)			60,150		1,747,990
					18,998,422
Taiwan - 4.85%
Chunghwa Telecom Co., Ltd., ADR			159,657		4,154,275
Compal Electronics Inc., GDR			55,072		264,213
Compal Electronics Inc., GDR (B)			134,498		645,268
Lite-On Technology Corporation (A)			343,233		399,391
Lite-On Technology Corporation, GDR (A)			259,308		3,017,334
Mega Financial Holding Company (A)	6,790,000				5,330,618
Taiwan Semiconductor Manufacturing       Company Ltd. (A)	1,874,000				3,892,408
					17,703,507
Thailand - 0.00%
Advanced Info Service Public Company Limited (A)			3,000		9,528
United Kingdom - 14.94%
Aviva plc (A)			296,630		3,635,244
BAE Systems plc (A)			93,350		899,003
BP p.l.c. (A)			424,390		4,312,376
British Sky Broadcasting Group plc (A)			230,870		2,549,847
Compass Group PLC (A)			560,920		3,587,363
GlaxoSmithKline plc (A)			222,200		4,700,919
Group 4 Securicor plc (A)			897,590		4,057,120
HBOS plc (A)			156,420		1,738,448
HSBC Holdings plc (A)			190,630		3,140,153
Kingfisher plc (A)			914,860		2,396,680
Old Mutual plc (A)	1,645,380				3,608,361
Pearson plc (A)			167,620		2,267,113
Persimmon plc (A)			169,640		2,575,557
Rentokil Initial plc (A)			376,520		726,707
Royal Bank of Scotland Group plc (The) (A)			557,470		3,731,255
Royal Dutch Shell plc, Class B (A)			71,241		2,397,935
Unilever PLC (A)			52,092		1,756,491
Vodafone Group Plc (A)	1,678,587				5,027,068
Vodafone Group Plc, ADR			6,590		194,471
tesco plc (A)			157,950		1,188,065
					54,490,176
TOTAL COMMON STOCKS - 60.76%				$	221,567,316
(Cost: $215,053,951)

OTHER GOVERNMENT SECURITIES
Australia - 1.38%
New South Wales Treasury Corporation,
6.0%, 5-1-12 (D)	AUD4,600		4,075,516
Queensland Treasury Corporation,
6.0%, 7-14-09 (D)		1,050	949,754
			5,025,270
Austria - 0.03%
Republic of Austria,
4.0%, 7-15-09 (D)		EUR70	110,816
Belgium - 0.22%
Belgium Government Bonds:
7.5%, 7-29-08 (D)		405	646,126
5.0%, 9-28-12 (D)		100	164,888
			811,014
Finland - 0.33%
Finland Government Bonds:
3.0%, 7-  4-08 (D)		400	629,766
5.0%, 4-25-09 (D)		60	95,876
5.75%, 2-23-11 (D)		280	466,740
			1,192,382

France - 3.02%
France O.A.T.,
4.25%, 10-25-17 (D)	EUR6,920			11,018,653
Germany - 8.42%
Deutsche Bundesrepublik,
5.0%, 7-4-11 (D)		170		279,806
KfW, Frankfurt/Main, Federal Republic of Germany:
2.0%, 2-27-09 (D)	CHF3,100			3,096,466
3.0%, 12-4-09 (D)		3,100		3,131,893
0.6575%, 8-8-11 (D)(E)	JPY2,410,000			24,179,544
				30,687,709
Greece - 0.34%
Hellenic Republic Government Bond,
2.125%, 4-10-09 (D)	CHF1,250			1,245,747
Ireland - 0.24%
Ireland Government Bond,
5.0%, 4-18-13 (D)	EUR540			895,607
Italy - 0.51%
Italian Republic Government Bond,
3.5%, 9-25-08 (D)	CHF1,850			1,867,336
Malaysia - 2.73%
Bank Negara Monetary Note,
0.0%, 9-23-08 (D)	MYR4,530			1,394,070
Malaysian Government Bonds:
7.0%, 3-15-09 (D)		580		187,405
3.756%, 4-28-11 (D)		8,550		2,697,218
3.461%, 7-31-13 (D)		12,435		3,871,886
3.814%, 2-15-17 (D)		1,955		610,980
4.24%, 2-7-18 (D)		3,750		1,207,981
				9,969,540
Mexico - 2.70%
United Mexican States Government Bonds:
8.0%, 12-19-13 (D)	MXN34,000			3,283,155
7.25%, 12-15-16 (D)	35,000			3,250,147
10.0%, 12-5-24 (D)		28,500		3,298,076
				9,831,378
New Zealand - 0.09%
New Zealand Government Bond,
6.0%, 11-15-11 (D)	NZD410			317,794
Norway - 2.06%
Norway Government Bond,
5.5%, 5-15-09 (D)	NOK36,280			7,153,173
Norway Treasury Bills:
0.0%, 6-18-08 (D)		370		71,907
0.0%, 9-17-08 (D)		1,550		297,609
				7,522,689
Poland - 3.10%
Poland Government Bonds:
5.75%, 6-24-08 (D)	1,200			538,487
6.0%, 5-24-09 (D)	PLN9,425			4,218,301
6.25%, 10-24-15 (D)		3,250		1,476,615
5.75%, 9-23-22 (D)		11,570		5,074,337
				11,307,740
Singapore - 1.02%
Singapore Government Bond,
4.375%, 1-15-09 (D)	SGD5,000			3,729,616
South Korea - 3.69%
South Korea Treasury Bonds:
4.75%, 6-10-09 (D)	KRW1,100,000			1,105,949
5.25%, 9-10-12 (D)	4,100,000			4,160,630
5.5%, 9-10-17 (D)	4,000,000			4,106,500
5.25%, 3-10-27 (D)	4,053,000			4,069,603
				13,442,682
Supranational - 0.30%
European Investment Bank,
0.7512%, 9-21-11 (D)(E)	JPY110,000			1,103,381
Sweden - 2.74%
Sweden Government Bond,
5.0%, 1-28-09 (D)	SEK51,100			8,655,055
Sweden Treasury Bills:
0.0%, 6-18-08 (D)		4,000		667,630
0.0%, 9-17-08 (D)		4,000		660,995
				9,983,680
TOTAL OTHER GOVERNMENT SECURITIES - 32.92%			$	120,063,034
(Cost: $109,637,919)

UNREALIZED GAIN (LOSS) ON       OPEN FORWARD CURRENCY       CONTRACTS - 0.77%		Face Amount in Thousands
Mexican Peso, 2-11-09 (Short) (D)	MXN105,500				(164,135	)
South Korean Won, 2-13-09 (Short) (D)	KRW9,182,050				361,948
South Korean Won, 2-25-09 (Short) (D)			512,950		21,871
South Korean Won, 2-27-09 (Short) (D)			521,021		22,806
South Korean Won, 3-27-09 (Short) (D)	1,100,000				9,765
South Korean Won, 3-  4-09 (Short) (D)			518,210		25,636
Swedish Krona, 11-12-08 (Long) (D)	SEK124,600				1,777,186
Swiss Franc, 2-11-09 (Long) (D)	CHF7,723				751,104
Swiss Franc, 3-27-09 (Long) (D)			1,136		16,202
				$	2,822,383
SHORT-TERM SECURITIES		Principal Amount in Thousands
Motor Vehicles - 1.37%
Harley-Davidson Funding Corp.,
2.15%, 5-2-08		$5,000			4,990,743
Forest and Paper Products - 2.48%
Sonoco Products Co.,
3.55%, 4-1-08			9,039		9,039,000
TOTAL SHORT-TERM SECURITIES - 3.85%				$	14,029,743
(Cost: $14,029,743)
TOTAL INVESTMENT SECURITIES - 98.30%				$	358,482,476
(Cost: $338,721,613)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.70%					6,184,263
NET ASSETS - 100.00%				$	364,666,739

Notes to Schedule of Investments

Certain acronyms may be used within the body of the Fund's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.

*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. These securities have been determined to be illiquid under guidelines established by the Board of Trustees. At March 31, 2008, the total value of these securities amounted to $2,132,288, or 0.58% of net assets.

(C)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. This security has been determined to be liquid under guidelines established by the Board of Trustees. At March 31, 2008, the total value of this security amounted to 0.44% of net assets.

(D)Principal amounts are denominated in the indicated foreign currency, where applicable (AUD - Australian Dollar, CHF - Swiss Franc, EUR - Euro, JPY - Japanese Yen, KRW - South Korean Won, MYR - Malaysian Ringgit, MXN - Mexician Peso, NOK - Norwegian Krone, NZD - New Zealand Dollar, PLN - Polish Zloty, SEK - Swedish Krona, SGD - Singapore Dollar).

(E)Variable rate security. Interest rate disclosed is that which is in effect at March 31, 2008.

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
     March 31, 2008
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $338,722) (Notes 1 and 3)	$	358,482
Cash denominated in foreign currencies (cost - $999)		1,087
Receivables:
Dividends and interest		3,197
Investment securities sold		2,533
Fund shares sold		1,190
Prepaid and other assets		28
Total assets		366,517
LIABILITIES
Payable to investment securities purchased		818
Payable to Fund shareholders		459
Accrued management fee (Note 2)		212
Due to custodian		131
Accrued shareholder servicing (Note 2)		87
Accrued service fee (Note 2)		70
Accrued accounting services fee (Note 2)		11
Accrued distribution fee (Note 2)		1
Other		61
Total liabilities		1,850
Total net assets	$	364,667
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	335,194
Accumulated undistributed income:
Accumulated undistributed net investment income		3,686
Accumulated undistributed net realized gain on investment transactions		5,819
Net unrealized appreciation in value of investments		19,968
Net assets applicable to outstanding units of capital	$	364,667
Net asset value per share (net assets divided by shares outstanding):
Class A	$16.36
Class B	$16.31
Class C	$16.33
Class E	$16.33
Class I	$16.38
Class Y	$16.38
Capital shares outstanding:
Class A		15,887
Class B		806
Class C		2,588
Class E		47
Class I		2,752
Class Y		209

See Notes to Financial Statements.

Statement of Operations
     IVY INTERNATIONAL BALANCED FUND
     For the Fiscal Year Ended March 31, 2008
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $748)	$	7,148
Interest and amortization (net of foreign withholding taxes of $35)		4,136
Total income		11,284
Expenses (Note 2):
Investment management fee		2,324
Shareholder servicing:
Class A		609
Class B		57
Class C		80
Class E		5
Class I		35
Class Y		4
Service fee:
Class A		565
Class B		33
Class C		96
Class Y		5
Distribution fee:
Class A		72
Class B		99
Class C		289
Class E		1
Custodian fees		123
Accounting services fee		113
Audit fees		16
Legal fees		5
Other		182
Total expenses		4,713
Net investment income		6,571
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		11,356
Realized net gain on foreign currency transactions		6,401
Realized net gain on investments		17,757
Unrealized depreciation in value of securities during the period		(20,845	)
Unrealized appreciation in value of forward currency contracts            during the period		2,822
Unrealized depreciation in value of investments during the period		(18,023	)
Net loss on investments		(266	)
Net increase in net assets resulting from operations	$	6,305

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,
	2008			2007
INCREASE IN NET ASSETS
Operations:
Net investment income	$	6,571		$	2,622
Realized net gain on investments		17,757			8,507
Unrealized appreciation (depreciation)		(18,023	)		19,022
Net increase in net assets resulting from operations		6,305			30,151
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A		(8,021	)		(4,320	)
Class B		(300	)		(158	)
Class C		(979	)		(332	)
Class E		(12	)		NA
Class I		(888	)		NA
Class Y		(66	)		(28	)
Realized gains on investment transactions:
Class A		(6,161	)		(5,577	)
Class B		(324	)		(387	)
Class C		(1,037	)		(669	)
Class E		(13	)		NA
Class I		(766	)		NA
Class Y		(51	)		(38	)
		(18,618	)		(11,509	)
Capital share transactions (Note 5)		98,036			132,436
Total increase		85,723			151,078
NET ASSETS
Beginning of period		278,944			127,866
End of period	$	364,667		$	278,944
Undistributed net investment income	$	3,686		$	980

(1)See "Financial Highlights" on pages 164 - 169.

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 fiscal year ended March 31,												For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005			3-31-04				9-30-03
Net asset value, beginning of period	$	16.81		$	15.15		$	14.63		$	13.07			$	11.33			$	8.72
Income from investment operations:
Net investment income		0.37			0.24	(1)		0.29			0.22				0.09				0.21
Net realized and unrealized gain            on investments		0.14			2.36	(1)		1.14			1.69				1.83				2.40
Total from investment operations		0.51			2.60			1.43			1.91				1.92				2.61
Less distributions from:
Net investment income		(0.55	)		(0.43	)		(0.36	)		(0.28	)			(0.18	)			(0.00	)
Capital gains		(0.41	)		(0.51	)		(0.55	)		(0.07	)			(0.00	)			(0.00	)
Total distributions		(0.96	)		(0.94	)		(0.91	)		(0.35	)			(0.18	)			(0.00	)
Net asset value, end of period	$	16.36		$	16.81		$	15.15		$	14.63			$	13.07			$	11.33
Total return (2)		2.84	%		17.48	%		10.14	%		14.81	%			17.05	%			29.93	%
Net assets, end of period       (in millions)	$260			$235			$112			$97				$60				$46
Ratio of expenses to average net       assets including reimbursement		1.33	%		1.38	%		1.45	%		1.42	%			1.54	% (3)(4)			1.67	%
Ratio of net investment income to       average net assets including       reimbursement		2.11	%		1.52	%		1.94	%		1.71	%			1.43	% (3)(4)			2.06	%
Ratio of expenses to average net       assets excluding reimbursement		1.33	% (5)		1.38	% (5)		1.45	% (5)		1.42	% (5)			1.60	% (3)(4)			1.71	%
Ratio of net investment income to       average net assets excluding       reimbursement		2.11	% (5)		1.52	% (5)		1.94	% (5)		1.71	% (5)			1.37	% (3)(4)			2.02	%
Portfolio turnover rate		24	%		22	%		27	%		16	%			15	%			39	%

(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 October 1, 2003 up to the time of merger. Actual expenses that applied to Class A shareholders were lower than shown above.

(5)There was no waiver of expenses during the period.

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 fiscal year ended March 31,													For the period from 12-8-03 (1) to
		2008				2007			2006			2005			3-31-04
Net asset value, beginning of period		$	16.77			$	15.11		$	14.59		$	13.04			$	12.34
Income from investment operations:
Net investment income			0.20				0.07	(2)		0.08			0.03	(2)			0.19
Net realized and unrealized gain on investments			0.14				2.37	(2)		1.18			1.70	(2)			0.69
Total from investment operations			0.34				2.44			1.26			1.73				0.88
Less distributions from:
Net investment income			(0.39	)			(0.27	)		(0.19	)		(0.11	)			(0.18	)
Capital gains			(0.41	)			(0.51	)		(0.55	)		(0.07	)			(0.00	)
Total distributions			(0.80	)			(0.78	)		(0.74	)		(0.18	)			(0.18	)
Net asset value, end of period		$	16.31			$	16.77		$	15.11		$	14.59			$	13.04
Total return			1.85	%			16.38	%		8.93	%		13.37	%			7.18	%
Net assets, end of period (in thousands)	$13,152				$12,056				$5,548			$3,049				$225
Ratio of expenses to average net assets			2.28	%			2.35	%		2.59	%		2.64	%			3.01	% (3)
Ratio of net investment income to average net assets			1.15	%			0.46	%		0.73	%		0.20	%			1.09	% (3)
Portfolio turnover rate			24	%			22	%		27	%		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 fiscal year ended March 31,													For the period from 12-8-03 (1) to
		2008				2007			2006			2005			3-31-04
Net asset value, beginning of period		$	16.78			$	15.12		$	14.60		$	13.04			$	12.34
Income from investment operations:
Net investment income			0.24				0.11	(2)		0.11			0.07	(2)			0.19		��
Net realized and unrealized gain on investments			0.15				2.37	(2)		1.19			1.69	(2)			0.69
Total from investment operations			0.39				2.48			1.30			1.76				0.88
Less distributions from:
Net investment income			(0.43	)			(0.31	)		(0.23	)		(0.13	)			(0.18	)
Capital gains			(0.41	)			(0.51	)		(0.55	)		(0.07	)			(0.00	)
Total distributions			(0.84	)			(0.82	)		(0.78	)		(0.20	)			(0.18	)
Net asset value, end of period		$	16.33			$	16.78		$	15.12		$	14.60			$	13.04
Total return			2.14	%			16.64	%		9.21	%		13.58	%			7.18	%
Net assets, end of period (in thousands)	$42,246				$29,921				$9,422			$3,968				$307
Ratio of expenses to average net assets			2.04	%			2.12	%		2.29	%		2.44	%			2.86	% (3)
Ratio of net investment income to average       net assets			1.34	%			0.70	%		0.98	%		0.44	%			1.13	% (3)
Portfolio turnover rate			24	%			22	%		27	%		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 E Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	16.85
Income from investment operations:
Net investment income			0.17	(2)
Net realized and unrealized gain on investments			0.18	(2)
Total from investment operations			0.35
Less distributions from:
Net investment income			(0.46	)
Capital gains			(0.41	)
Total distributions			(0.87	)
Net asset value, end of period		$	16.33
Total return (3)			1.92	%
Net assets, end of period (in millions)		$1
Ratio of expenses to average net assets			2.23	% (4)
Ratio of net investment income to average net assets			1.00	% (4)
Portfolio turnover rate			24	% (5)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

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

(4)Annualized.

(5)For the twelve months ended March 31, 2008.

See Notes to Financial Statements.

Financial Highlights
     IVY INTERNATIONAL BALANCED FUND
     Class I Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	16.86
Income from investment operations:
Net investment income			0.30	(2)
Net realized and unrealized gain on investments			0.23	(2)
Total from investment operations			0.53
Less distributions from:
Net investment income			(0.60	)
Capital gains			(0.41	)
Total distributions			(1.01	)
Net asset value, end of period		$	16.38
Total return			2.99	%
Net assets, end of period (in millions)		$45
Ratio of expenses to average net assets			0.98	% (3)
Ratio of net investment income to average net assets			2.14	% (3)
Portfolio turnover rate			24	% (4)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(4)For the twelve months ended March 31, 2008.

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 fiscal year ended March 31,												For the period from 12-8-03 (1) to
	2008			2007			2006			2005			3-31-04
Net asset value, beginning of period	$	16.82		$	15.15		$	14.63		$	13.07			$	12.34
Income from investment operations:
Net investment income		0.39			0.25	(2)		0.29	(2)		0.24	(2)			0.21
Net realized and unrealized gain             on investments		0.14			2.37	(2)		1.14	(2)		1.67	(2)			0.70
Total from investment operations		0.53			2.62			1.43			1.91				0.91
Less distributions from:
Net investment income		(0.56	)		(0.44	)		(0.36	)		(0.28	)			(0.18	)
Capital gains		(0.41	)		(0.51	)		(0.55	)		(0.07	)			(0.00	)
Total distributions		(0.97	)		(0.95	)		(0.91	)		(0.35	)			(0.18	)
Net asset value, end of period	$	16.38		$	16.82		$	15.15		$	14.63			$	13.07
Total return		2.96	%		17.61	%		10.18	%		14.84	%			7.47	%
Net assets, end of period (in thousands)	$3,433			$1,665			$662			$397				$185
Ratio of expenses to average net assets		1.26	%		1.24	%		1.41	%		1.40	%			1.79	% (3)
Ratio of net investment income to average       net assets		2.06	%		1.64	%		1.99	%		1.72	%			2.00	% (3)
Portfolio turnover rate		24	%		22	%		27	%		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.

Managers' Discussion of
Ivy International Core Equity Fund
     March 31, 2008

Below, John C. Maxwell, CFA, and Thomas A. Mengel, portfolio managers of the Ivy International Core Equity Fund, discuss positioning, performance and results for the fiscal year ended March 31, 2008. Mr. Maxwell has managed the Fund for two years and has 15 years of industry experience. Mr. Mengel has managed the Fund for five years and has 21 years of industry experience.

STYLE
VALUE	BLEND	GROWTH
	X		LARGE	CAPITALIZATION
			MEDIUM
			SMALL

This diagram shows the Fund's equity investment style and the size of companies in the Fund, as measured by market capitalization. Shaded areas reflect quarterly data for the past three years. Source: Morningstar

The Fund rose 5.39 percent (Class A shares at net asset value) for the 12 months ended March 31, 2008, outpacing its benchmark. The MSCI EAFE Index (Europe, Australia, Far East - an index that generally reflects the performance of the international securities markets) fell 2.70 percent for the period. The Lipper International Large-Cap Core Funds Universe Average (reflecting the performance of funds with similar objectives) declined 1.39 percent for the fiscal year. Please note that Fund returns include applicable fees and expenses while index returns do not include any such fees.

Strong stocks in the right sectors drove performance

The driver of our outperformance last year was stock selection. Our stock selection was strongest in telecom services, energy, materials and consumer staples. These sectors were four of the five best performing sectors last year and the Fund outpaced the index in each. Consumer discretionary and utilities were two sectors where we underperformed. Consumer discretionary was one of the worst performers, and we were overweight. The utilities sector was another underperformer and an area in which we were significantly underweight.

We manage the Fund more around sectors than countries, so the countries that fared well generally had exposure to the stronger sectors mentioned above. Our best-performing market was Switzerland, where we were overweight and significantly outperformed a better-than-average market. During the fiscal year, we had about 7 percent of assets invested in emerging markets - these stocks provided solid performance versus the benchmark. The worst-performing large market in the index was Japan, and fortunately we were underweight. However, the Japanese stocks we held performed slightly below the index. Our Japanese holdings focused on the consumer discretionary, industrial and information technology sectors - all were below average performers.

Steady results in a volatile year

Our performance this past fiscal year benefited greatly from our move to stable growth stocks, which we started in the second quarter of fiscal year 2007. Having a growth versus value tilt helped a great deal last year as the international growth index beat value by nearly 900 basis points. Value stocks had been supported by a huge leverage buyout cycle which peaked in the spring. By fall almost no deals were announced and previously announced deals often fell apart driven by the high cost of borrowing. Interest rate spreads on high yielding international corporate bonds moved from 200 basis points in April to 400 basis points at the end of summer and peaked at over 800 basis points in early March 2008. Our emphasis on higher quality growth rather than value stocks helped us have steady performance ahead of the market and our peers - each quarter during the last fiscal year.

Up until mid-November, we stayed on the offense, running low levels of cash and having above-average exposure to securities leveraged to a rising market. In November we began raising cash and reduced the beta of the fund. Our reasoning was that despite large efforts by assorted central banks it was becoming increasingly clear that the subprime contagion was large and spreading. Even the overnight lending (money market) market was not functioning properly. Financial institutions lacked the confidence to borrow from one another.

In addition to subprime there were other issues. The U.S. economy was on a slowing trajectory and likely entered recession in the March 2008 quarter. With its heavy U.S. consumer-related exports, we feel the already fragile Japanese market is also likely to enter a recession. While Europe has seemed stronger, a number of markets like the UK and Spain are slowing and could follow the U.S. into a recession. At the same time the emerging world continued to see higher and higher inflation, linked to rising energy and food prices. During the third quarter of the fiscal year oil hit the $100/barrel level and moved to as much as $112 a barrel in the first calendar quarter of 2008.

We maintained a defensive approach until mid March. Then we cut our cash position by half to less than 5 percent of assets. Generally speaking we were purchasing stocks with economic sensitivity that had been hit hard in the recent sell off. Why the change? Basically the unusually aggressive nature of the U.S. Federal Reserve made us feel that they and other central bankers as well as governments and private institutions are going to go to great lengths to halt the credit crisis. The Fed's assistance in the bailing out of The Bear Stearns Companies, Inc. after cutting rates 300 basis points in six months were the actions that encouraged us to become a little more aggressive. Since mid March spreads on risky loans have stabilized or improved. In the case of international high yield bonds, spreads have narrowed by 100 basis points to the mid 700's.

Top 10 Equity Holdings as of March 31, 2007	March 31, 2008
BAE Systems plc TOTAL S.A. Siemens AG Nestle S.A., Registered Shares Toyota Motor Corporation Vivendi Universal Heineken N.V. Petroleo Brasileiro S.A. - Petrobras, ADR Prudential plc L'Oreal	Nestle S.A., Registered Shares Svenska Cellulosa Aktiebolaget SCA      (publ), Class B Heineken N.V. Nintendo Co., Ltd. BAE Systems plc Roche Holdings AG, Genussschein Telefonica, S.A. Mitsubishi Electric Corporation Vodafone Group Plc Fresenius AG

See your advisor or www.ivyfunds.com for more information on the Fund's most recently published Top 10 Equity Holdings.

Focus on cash flow strength

As we enter next year, we feel the Fund is defensively positioned through overweights in consumer staples, non-pharmaceutical health care, and wireless telecom services and underweights in basic materials and financials. In general, many of the companies we own possess better than average cash generation as compared to their competitors. From a thematic standpoint we are overweight companies that generally benefit from the following two themes:

1. the strengthening emerging markets' consumers and
2. large investments in infrastructure globally - most particularly energy related.

Our ideal stock is of a company exposed to one of two themes: a company that is experiencing solid sales growth, and has a strong balance sheet and generates significant cash. Up until March our primary emphasis has been stable and secular growth stocks. Our most recent purchases include a balance of value stocks with some economic sensitivity.

Our outlook

We are not sounding the all clear signal; as discussed above, we believe a lot of issues remain. However, we believe many of the issues are discounted at current equity prices. We do believe there is a good chance that global growth will at least stabilize in the back half of the calendar year and we are currently moving the Fund in this direction. The risk continues that the recession is deep and we will be monitoring for signs that this is the case.

If we could only monitor one thing right now it would be credit spreads. They are wide due to concerns about the subprime contagion spreading further and slowing economies. If spreads stabilize and narrow - which we think is increasingly likely - then we feel the aggressive actions by the Fed and other central bankers will flow through to the global economy and markets.

Emerging markets inflation is next on our list of concerns to monitor. This is a big issue particularly since the price inflation is greatest in everyday items like energy and food. In some less developed countries food and energy can represent as much as 50 percent of purchased goods.

In the longer term, we believe that the foundation for the global economic expansion and longer term bull market is the free flow of money and goods around the world. If credit conditions stabilize and improve so should money flows, in our opinion. Global trade seems solidly open, but food prices are causing some countries to cease exports in an effort to address shortages at home - we are keeping a close eye on these developments.

As with any mutual fund, the value of the Fund's shares will change, and you could lose money on your investment. International investing involves additional risks, including currency fluctuations, political or economic conditions affecting the foreign country, and differences in accounting standards and foreign regulations. These and other risks are more fully described in the Fund's prospectus.

The Fund's performance noted above is at net asset value (NAV), and does not include the effect of any applicable sales charges. If reflected, the sales charge would reduce the performance noted.

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

Comparison of Change in Value of
$10,000 Investment

Ivy International Core Equity Fund, Class A Shares(1)	$	19,780
MSCI EAFE Index (with net dividends)	$	17,421
Lipper International Large-Cap Core Funds Universe Average	$	16,897

		IVY INTERNATIONAL CORE EQUITY FUND, CLASS A	MSCI EAFE	LIPPER INTERNATIONAL LARGE-CAP CORE FUNDS UNIVERSE
		SHARES	INDEX	AVERAGE
DEC	1998	9,425	10,000	10,000
DEC	1999	12,044	12,697	13,932
DEC	2000	11,171	10,898	11,738
DEC	2001	9,253	8,561	9,232
DEC	2002	7,778	7,196	7,642
DEC	2003	9,893	9,973	10,073
MARCH	2004	10,310	10,406	10,413
MARCH	2005	11,805	11,973	11,683
MARCH	2006	15,994	14,895	14,602
MARCH	2007	18,768	17,904	17,135
MARCH	2008	19,780	17,421	16,897

Please note that the performance of the Fund's other share classes will be greater or less than the performance shown above for Class A based on the differences in loads and fees paid by shareholders investing in the different classes.

(1)The value of the investment in the Fund is impacted by the sales load at the time of the investment and by the ongoing expenses of the Fund and assumes reinvestment of dividends and distributions.

Average Annual Total Return(2)
	Class A	Class B	Class C	Class E	Class I	Class Y
1-year period ended 3-31-08	-0.67%	0.70%	4.68%	––	––	5.50%
5-year period ended 3-31-08	20.86%	21.20%	21.34%	––	––	––
10-year period ended 3-31-08	6.19%	5.75%	5.75%	––	––	––
Since inception of Class(3) through 3-31-08	––	––	––	––	––	20.50%
Cumulative return since inception of Class(3) through 3-31-08	––	––	––	- -1.32%	5.83%	––

(2)Data quoted is past performance and is based on deduction of the maximum applicable sales load for each of the periods. Current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Please visit www.ivyfunds.com for the Fund's most recent month-end performance. Class A and Class E shares carry a maximum front-end sales load of 5.75%. Class B and Class C shares carry maximum contingent deferred sales charges (CDSC) of 5% and 1%, respectively. (Accordingly, the Class C shares reflect no CDSC since it only applies to Class C shares redeemed within twelve months after purchase.) Class I and Class Y shares are not subject to sales charges.

(3) 4-2-07 for Class E and Class I shares, and 7-24-03 for Class Y shares (the date on which shares were first acquired by shareholders).

Past performance is not necessarily indicative of future performance. Indexes are unmanaged. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

SHAREHOLDER SUMMARY OF IVY INTERNATIONAL CORE EQUITY FUND

Portfolio Highlights

On March 31, 2008, Ivy International Core Equity Fund had net assets totaling $317,158,871 invested in a diversified portfolio of:

90.72%	Foreign Common Stocks
6.00%	Cash and Cash Equivalents and Unrealized Gain       on Open Forward Currency Contracts
3.28%	Foreign Preferred Stocks

As a shareholder of the Fund, for every $100 you had invested on March 31, 2008, your Fund was invested by country and by industry, respectively, as follows:

Country Weightings

Europe	$	66.50
United Kingdom	$	18.12
Germany	$	10.59
Switzerland	$	9.69
France	$	8.55
Sweden	$	6.22
Other Europe(1)	$	6.03
Norway	$	4.67
Netherlands	$	2.63
Pacific Basin	$	24.72
Japan	$	14.29
Other Pacific Basin(2)	$	6.88
Hong Kong	$	3.55
Cash and Cash Equivalents and Unrealized Gain       on Open Forward Currency Contracts	$	6.00
Other(3)	$	2.78

(1)Includes $1.26 Finland, $1.42 Ireland, $1.48 Italy and $1.87 Spain.

(2)Includes $1.67 Australia, $2.22 China and $2.99 Singapore.

(3)Includes $1.52 Brazil and $1.26 Canada.

Sector Weightings

Financial Services Stocks	$	12.09
Consumer Nondurables Stocks	$	10.97
Capital Goods Stocks	$	10.75
Utilities Stocks	$	9.98
Miscellaneous Stocks(4)	$	7.63
Business Equipment and Services Stocks	$	6.88
Health Care Stocks	$	6.28
Raw Materials Stocks	$	6.13
Cash and Cash Equivalents and Unrealized Gain on       Open Forward Currency Contracts	$	6.00
Shelter Stocks	$	5.62
Technology Stocks	$	5.14
Consumer Durables Stocks	$	4.76
Energy Stocks	$	4.30
Transportation Stocks	$	3.47

(4)Includes $2.75 Consumer Services Stocks, $2.44 Multi-Industry Stocks and $2.44 Retail Stocks.

The Investments of Ivy International Core Equity Fund
March 31, 2008
COMMON STOCKS		Shares			Value
Australia - 1.67%
Telstra Corporation Limited (A)			1,319,260	$	5,304,963
Brazil - 1.52%
Petroleo Brasileiro S.A. - Petrobras, ADR			47,150		4,814,487
Canada - 1.26%
Shoppers Drug Mart Corporation (A)			79,150		4,005,116
China - 2.22%
China Mobile Limited (A)			229,500		3,414,788
SINA Corporation*			103,030		3,630,777
					7,045,565
Finland - 1.26%
Nokia OYJ (A)			126,620		4,006,038
France - 8.55%
ALSTOM (A)			17,330		3,757,054
AXA S.A. (A)			136,610		4,958,343
Publicis Groupe S.A. (A)			113,600		4,340,190
TOTAL S.A. (A)			73,620		5,467,367
VINCI (A)			62,870		4,544,951
Vivendi Universal (A)			103,260		4,034,804
					27,102,709
Germany - 7.31%
Bayer Aktiengesellschaft (A)			61,420		4,925,934
Beiersdorf Aktiengesellschaft (A)			56,560		4,743,321
Commerzbank Aktiengesellschaft (A)			168,750		5,312,318
Deutsche Borse AG (A)			27,030		4,381,317
Siemens AG (A)			34,890		3,811,179
					23,174,069
Hong Kong - 3.55%
CNOOC Limited (A)			2,266,000		3,348,345
Cheung Kong (Holdings) Limited (A)			333,000		4,728,017
Hutchison Whampoa Limited, Ordinary Shares (A)			336,000		3,179,688
					11,256,050
Ireland - 1.42%
Allied Irish Banks, p.l.c. (A)			212,790		4,505,003
Italy - 1.48%
UniCredit S.p.A. (A)			699,962		4,685,497
Japan - 14.29%
Central Japan Railway Company (A)			370		3,823,234
Chiyoda Corporation (A)			477,000		4,330,708
JGC Corporation (A)			278,000		4,244,743
KDDI CORPORATION (A)			610		3,726,826
Mitsubishi Electric Corporation (A)			667,000		5,767,998
Mitsui Fudosan Co., Ltd. (A)			212,000		4,208,949
Nintendo Co., Ltd. (A)			12,600		6,497,191
Nissin Kogyo Co., Ltd. (A)			234,000		4,138,664
Suzuki Motor Corporation (A)			205,700		5,189,963
Toyota Motor Corporation (A)			68,300		3,405,407
					45,333,683
Netherlands - 2.63%
Heineken N.V. (A)			143,740		8,348,770
Norway - 4.67%
Aker Kvaerner ASA (A)			148,440		3,381,354
Cermaq ASA (A)			271,100		3,433,768
Orkla ASA (A)			360,600		4,567,381
Songa Offshore ASA (A)*			257,080		3,432,883
					14,815,386
Singapore - 2.99%
DBS Group Holdings Ltd (A)			429,000		5,610,084
Singapore Telecommunications Limited (A)			1,357,000		3,854,750
					9,464,834
Spain - 1.87%
Telefonica, S.A. (A)			206,590		5,936,026
Sweden - 6.22%
Atlas Copco AB, Class A (A)*			227,650		3,888,768
Elekta AB (publ), B Shares (A)			186,660		3,219,982
H & M Hennes & Mauritz AB (A)			60,980		3,745,921
Svenska Cellulosa Aktiebolaget SCA (publ),       Class B (A)			487,200		8,875,923
					19,730,594
Switzerland - 9.69%
Compagnie Financiere Richemont SA (A)			80,160		4,495,934
Nestle S.A., Registered Shares (A)			20,420		10,203,832
Roche Holdings AG, Genussschein (A)			33,970		6,393,105
Syngenta AG (A)			16,110		4,720,582
TEMENOS Group AG (A)*			187,950		4,920,653
					30,734,106
United Kingdom - 18.12%
Anglo American plc (A)*			83,850		5,038,954
BAE Systems plc (A)			667,050		6,423,999
BAE Systems plc (A)(B)			100,000		963,046
Barclays PLC (A)			478,270		4,299,845
British American Tobacco p.l.c. (A)			94,580		3,549,542
Delek Global Real Estate Limited (A)(B)			396,262		666,505
Informa plc (A)			755,890		4,699,278
Intertek Group plc (A)			200,670		4,110,017
National Grid plc (A)			270,710		3,715,164
Prudential plc (A)			348,220		4,599,210
Serco Group plc (A)			525,440		4,731,744
Smith & Nephew plc (A)			348,870		4,614,719
Vodafone Group Plc (A)			1,899,409		5,688,388
WPP Group plc (A)			364,820		4,351,456
					57,451,867
TOTAL COMMON STOCKS - 90.72%				$	287,714,763
(Cost: $279,686,239)
PREFERRED STOCKS
Germany
Fresenius AG (A)			67,510		5,663,759
Henkel Kommanditgesellschaft auf Aktien (A)			102,990		4,755,936
TOTAL PREFERRED STOCKS - 3.28%				$	10,419,695
(Cost: $9,898,931)
UNREALIZED GAIN (LOSS) ON       OPEN FORWARD CURRENCY       CONTRACTS - 0.11%		Face Amount in Thousands
Australian Dollar, 6-5-08 (long) (C)	AUD8,800				276,777
Australian Dollar, 6-5-08 (long) (C)			4,200		(78,290	)
Singapore Dollar, 6-5-08 (long) (C)	SGD4,500				138,962
				$	337,449

SHORT-TERM SECURITIES	Principal Amount in Thousands
Beverages - 0.94%
Coca-Cola Company (The),
2.2%, 4-14-08	$3,000			2,997,617
Chemicals - Specialty - 0.45%
Air Products and Chemicals, Inc.,
2.2%, 4-16-08		1,424		1,422,695
Finance Companies - 2.68%
Avon Capital Corp.,
2.53%, 4-21-08		3,500		3,495,080
USAA Capital Corp.,
2.3%, 4-7-08		5,000		4,998,083
				8,493,163
Motor Vehicles - 1.04%
Harley-Davidson, Inc.,
2.3%, 4-1-08		3,291		3,291,000
TOTAL SHORT-TERM SECURITIES - 5.11%			$	16,204,475
(Cost: $16,204,475)
TOTAL INVESTMENT SECURITIES - 99.22%			$	314,676,382
(Cost: $305,789,645)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.78%				2,482,489
NET ASSETS - 100.00%			$	317,158,871

Notes to Schedule of Investments

Certain acronyms may be used within the body of the Fund's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.

*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. These securities have been determined to be liquid under guidelines established by the Board of Trustees. At March 31, 2008, the total value of these securities amounted to $1,629,551 or 0.51% of net assets.

(C)Principal amounts are denominated in the indicated foreign currency, where applicable (AUD - Australian Dollar, SGD - Singapore Dollar).

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 CORE EQUITY FUND
     March 31, 2008
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $305,790) (Notes 1 and 3)	$	314,676
Receivables:
Investment securities sold		5,107
Fund shares sold		2,370
Dividends and interest		1,424
Prepaid and other assets		33
Total assets		323,610
LIABILITIES
Payable for investment securities purchased		5,518
Payable to Fund shareholders		462
Accrued management fee (Note 2)		222
Accrued shareholder servicing (Note 2)		89
Accrued service fee (Note 2)		63
Due to custodian		28
Accrued accounting services fee (Note 2)		6
Accrued administrative fee (Note 2)		3
Accrued distribution fee (Note 2)		1
Other		59
Total liabilities		6,451
Total net assets	$	317,159
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	300,691
Accumulated undistributed income:
Accumulated undistributed net investment income		525
Accumulated undistributed net realized gain on investment transactions		7,022
Net unrealized appreciation in value of investments		8,921
Net assets applicable to outstanding units of capital	$	317,159
Net asset value per share (net assets divided by shares outstanding):
Class A	$17.11
Class B	$15.74
Class C	$15.72
Class E	$17.05
Class I	$17.20
Class Y	$17.19
Capital shares outstanding:
Class A		12,978
Class B		990
Class C		2,887
Class E		66
Class I		1,328
Class Y		595

See Notes to Financial Statements.

Statement of Operations
     IVY INTERNATIONAL CORE EQUITY FUND
     For the Fiscal Year Ended March 31, 2008
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $468)	$	5,360
Interest and amortization		619
Total income		5,979
Expenses (Note 2):
Investment management fee		2,351
Shareholder servicing:
Class A		556
Class B		58
Class C		81
Class E		8
Class I		19
Class Y		9
Advisor Class		––	*
Service fee:
Class A		447
Class B		43
Class C		103
Class Y		14
Distribution fee:
Class A		53
Class B		127
Class C		308
Class E		2
Custodian fees		80
Accounting services fee		73
Administrative fee		28
Audit fees		22
Legal fees		4
Other		202
Total expenses		4,588
Net investment income		1,391

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Operations
     IVY INTERNATIONAL CORE EQUITY FUND
     For the Fiscal Year Ended March 31, 2008
     (In Thousands)                                                                                                             (Continued)

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities	$	18,490
Realized net gain on forward currency contracts		655
Realized net gain on foreign currency transactions		229
Realized net gain on investments		19,374
Unrealized depreciation in value of securities during the period	(13,130		)
Unrealized appreciation in value of forward currency contracts during the period		337
Unrealized depreciation in value of investments during the period	(12,793		)
Net gain on investments		6,581
Net increase in net assets resulting from operations	$	7,972

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,
	2008			2007
INCREASE IN NET ASSETS
Operations:
Net investment income	$	1,391		$	672
Realized net gain on investments		19,374			21,872
Unrealized appreciation (depreciation)		(12,793	)		3,107
Net increase in net assets resulting from operations		7,972			25,651
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A		(976	)		(435	)
Class B		(––	)		(––	)
Class C		(––	)		(––	)
Class E		(1	)		NA
Class I		(142	)		NA
Class Y		(36	)		(7	)
Advisor Class		(––	)		(––	)*
Realized gains on investment transactions:
Class A		(16,690	)		(5,291	)
Class B		(1,367	)		(666	)
Class C		(3,600	)		(1,213	)
Class E		(71	)		NA
Class I		(1,288	)		NA
Class Y		(471	)		(77	)
Advisor Class		(––	)		(––	)*
		(24,642	)		(7,689	)
Capital share transactions (Note 5)		118,394			99,073
Total increase		101,724			117,035
NET ASSETS
Beginning of period		215,435			98,400
End of period	$	317,159		$	215,435
Undistributed net investment income	$	525		$	60

*Not shown due to rounding.

(1)See "Financial Highlights" on pages 184 - 189.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of period	$	17.63		$	15.73		$	11.61		$	10.14		$	9.73			$	7.65
Income (loss) from investment operations:
Net investment income (loss)		0.10			0.10	(1)		(0.06	)		(0.02	)		(0.01	)		(0.02		)
Net realized and unrealized gain             on investments		0.98			2.59	(1)		4.18			1.49			0.42				2.10
Total from investment operations		1.08			2.69			4.12			1.47			0.41				2.08
Less distributions from:
Net investment income		(0.09	)		(0.06	)		(0.00	)		(0.00	)		(0.00	)		(0.00		)
Capital gains		(1.51	)		(0.73	)		(0.00	)		(0.00	)		(0.00	)		(0.00		)
Total distributions		(1.60	)		(0.79	)		(0.00	)		(0.00	)		(0.00	)		(0.00		)
Net asset value, end of period	$	17.11		$	17.63		$	15.73		$	11.61		$	10.14			$	9.73
Total return (2)		5.39	%		17.35	%		35.49	%		14.50	%		4.21	%		27.19		%
Net assets, end of period (in millions)	$222			$161			$67			$17			$10				$9
Ratio of expenses to average net assets		1.53	%		1.56	%		1.82	%		1.99	%		2.16	% (3)			2.28	%
Ratio of net investment income (loss) to       average net assets		0.65	%		0.63	%		0.14	%		0.09	%		- -0.41	% (3)		- -0.19		%
Portfolio turnover rate		101	%		108	%		90	%		106	%		23	%			148	%

(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.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of period	$	16.31		$	14.67		$	10.91		$	9.60		$	9.24			$	7.32
Income (loss) from investment operations:
Net investment loss		(0.02	)		(0.00	) (1)		(0.12	)		(0.08	)	(0.03		)		(0.08		)
Net realized and unrealized gain             on investments		0.88			2.37	(1)		3.88			1.39			0.39				2.00
Total from investment operations		0.86			2.37			3.76			1.31			0.36				1.92
Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)		(0.00		)
Capital gains		(1.43	)		(0.73	)		(0.00	)		(0.00	)	(0.00		)		(0.00		)
Total distributions		(1.43	)		(0.73	)		(0.00	)		(0.00	)	(0.00		)		(0.00		)
Net asset value, end of period	$	15.74		$	16.31		$	14.67		$	10.91		$	9.60			$	9.24
Total return		4.56	%		16.39	%		34.46	%		13.65	%		3.90	%		26.23		%
Net assets, end of period (in millions)	$16			$17			$15			$20			$24				$25
Ratio of expenses to average net assets		2.35	%		2.35	%		2.62	%		2.76	%		2.91	% (2)			2.95	%
Ratio of net investment loss to average       net assets		- -0.09	%		- -0.03	%		- -0.41	%		- -0.58	%	- -1.20		% (2)		- -0.82		%
Portfolio turnover rate		101	%		108	%		90	%		106	%		23	%			148	%

(1)Based on average weekly shares outstanding.

(2)Annualized.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of period	$	16.30		$	14.65		$	10.90		$	9.59		$	9.23			$	7.32
Income (loss) from investment operations:
Net investment loss		(0.00	) (1)		(0.01	) (1)		(0.02	)		(0.07	)	(0.03		)		(0.08		)
Net realized and unrealized gain            on investments		0.88	(1)		2.39	(1)		3.77			1.38			0.39				1.99
Total from investment operations		0.88			2.38			3.75			1.31			0.36				1.91
Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)		(0.00		)
Capital gains		(1.46	)		(0.73	)		(0.00	)		(0.00	)	(0.00		)		(0.00		)
Total distributions		(1.46	)		(0.73	)		(0.00	)		(0.00	)	(0.00		)		(0.00		)
Net asset value, end of period	$	15.72		$	16.30		$	14.65		$	10.90		$	9.59			$	9.23
Total return		4.68	%		16.48	%		34.40	%		13.66	%		3.90	%		26.09		%
Net assets, end of period (in millions)	$45			$34		��	$15			$7			$8				$8
Ratio of expenses to average net assets		2.20	%		2.29	%		2.58	%		2.79	%		3.01	% (2)			3.01	%
Ratio of net investment loss to average       net assets	- -0.02		%		- -0.08	%		- -0.50	%	- -0.63		%	- -1.30		% (2)		- -0.82		%
Portfolio turnover rate		101	%		108	%		90	%		106	%		23	%			148	%

(1)Based on average weekly shares outstanding.

(2)Annualized.

See Notes to Financial Statements.

Financial Highlights
     IVY INTERNATIONAL CORE EQUITY FUND
     Class E Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through 3-31-08
Net asset value, beginning of period		$	17.63
Income (loss) from investment operations:
Net investment loss			(0.02	)
Net realized and unrealized gain on investments			0.98
Total from investment operations			0.96
Less distributions from:
Net investment income			(0.03	)
Capital gains			(1.51	)
Total distributions			(1.54	)
Net asset value, end of period		$	17.05
Total return (2)			4.70	%
Net assets, end of period (in millions)		$1
Ratio of expenses to average net assets			2.38	% (3)
Ratio of net investment loss to average net assets			- -0.51	% (3)
Portfolio turnover rate			101	% (4)

(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)For the twelve months ended March 31, 2008.

See Notes to Financial Statements.

Financial Highlights
     IVY INTERNATIONAL CORE EQUITY FUND
     Class I Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through 3-31-08
Net asset value, beginning of period		$	17.71
Income from investment operations:
Net investment income			0.16
Net realized and unrealized gain on investments			1.01
Total from investment operations			1.17
Less distributions from:
Net investment income			(0.17	)
Capital gains			(1.51	)
Total distributions			(1.68	)
Net asset value, end of period		$	17.20
Total return			5.83	%
Net assets, end of period (in millions)		$23
Ratio of expenses to average net assets			1.13	% (2)
Ratio of net investment income to average net assets			0.69	% (2)
Portfolio turnover rate			101	% (3)

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the twelve months ended March 31, 2008.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,											For the fiscal period ended				For the period from 7-24-03 (1) to
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of period	$	17.70		$	15.79		$	11.64		$	10.15		$	9.74			$	8.16
Income (loss) from investment operations:
Net investment income (loss)		0.15	(2)		0.12	(2)		(0.06	)		(0.01	)		(0.01	)		(0.01		)
Net realized and unrealized gain on             investments		0.97	(2)		2.59	(2)		4.21			1.50			0.42				1.59
Total from investment operations		1.12			2.71			4.15			1.49			0.41				1.58
Less distributions from:
Net investment income		(0.12	)		(0.07	)		(0.00	)		(0.00	)		(0.00	)		(0.00		)
Capital gains		(1.51	)		(0.73	)		(0.00	)		(0.00	)		(0.00	)		(0.00		)
Total distributions		(1.63	)		(0.80	)		(0.00	)		(0.00	)		(0.00	)		(0.00		)
Net asset value, end of period	$	17.19		$	17.70		$	15.79		$	11.64		$	10.15			$	9.74
Total return		5.50	%		17.47	%		35.65	%		14.68	%		4.21	%		19.36		%
Net assets, end of period (in thousands)	$10,233			$3,848			$1,025			$294			$145				$125
Ratio of expenses to average net assets		1.39	%		1.45	%		1.72	%		1.82	%		2.08	% (3)			1.47	% (3)
Ratio of net investment income (loss) to       average net assets		0.77	%		0.76	%		0.13	%		0.29	%		- -0.31	% (3)		- -0.38		% (3)
Portfolio turnover rate		101	%		108	%		90	%		106	%		23	%			148	% (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.

Manager's Discussion of
Ivy International Growth Fund
     March 31, 2008

Below, Thomas A. Mengel, portfolio manager of the Ivy International Growth Fund, discusses positioning, performance and results for the fiscal year ended March 31, 2008. He has managed the Fund for five years and has 21 years of industry experience.

STYLE
VALUE	BLEND	GROWTH
		X	LARGE	CAPITALIZATION
			MEDIUM
			SMALL

This diagram shows the Fund's equity investment style and the size of companies in the Fund, as measured by market capitalization. Shaded areas reflect quarterly data for the past three years. Source: Morningstar

The Fund rose 5.01 percent (Class A shares at net asset value) for the 12 months ended March 31, 2008 while its peer group, the Lipper International Large-Cap Growth Funds Universe Average (reflecting the performance of funds with similar objectives) rose 0.78 percent for the same period. Please note that Fund returns include applicable fees and expenses while index returns do not include any such fees.

During the fiscal year, we adopted a new benchmark for the Fund, the MSCI EAFE Growth Index, an index that generally reflects the performance of growth-style stocks in developed overseas markets. We feel this index is more representative of the international growth stock universe in which the Fund typically invests. This benchmark rose 1.91 percent for the fiscal year. The Fund's prior benchmark, the MSCI EAFE Index, which contains both growth and value-style stocks in developed overseas markets, fell 2.70 percent for the fiscal year. For comparison purposes, both indexes will be shown in this year's report.

Summer optimism fades

The first two quarters of the fiscal year were marked by relatively strong market conditions, while the second half was characterized by a high degree of global market volatility and uncertainty. As the fiscal year progressed, we saw a meltdown of the subprime mortgage market that in turn led to huge asset writedowns and capital bailouts of major global banks. Sovereign wealth funds in the Middle East, China and elsewhere stepped up to inject capital and liquidity.

Overall, the Japanese equity market proved to be a big disappointment this past year as its domestic economy appeared to be slipping into recession while corporate earnings disappointed investors. The European Central Bank (ECB) remained hesitant to reduce interest rates amid fears of inflation.

Top 10 Equity Holdings as of March 31, 2007	March 31, 2008
VINCI Anglo Irish Bank Corporation plc      (Great Britain) Toyota Motor Corporation Nestle S.A., Registered Shares Roche Holdings AG, Genussschien Mitsubishi Estate Co., Ltd. Siemens AG Reckitt Benckiser Group plc Banca Intesa S.p.A. Research In Motion Limited	Nestle S.A., Registered Shares Deutsche Borse AG Research In Motion Limited Bayer Aktiengesellschaft British American Tobacco p.l.c. VINCI Nintendo Co., Ltd. China Mobile Limited Roche Holdings AG, Genussschein Reckitt Benckiser Group plc

See your advisor or www.ivyfunds.com for more information on the Fund's most recently published Top 10 Equity Holdings.

We believe many companies outside the financial sector in Europe are benefiting from exports and restructuring, and positioned the Fund accordingly. Within Europe, country performance has varied widely, with Germany a source of export-driven strength and Italy a source of weakness given its equity market's high weighting in financials. Across the world, large company stocks generally outpaced small-caps, while growth stocks outpaced value. These trends, which accelerated this past summer, were positive for the Fund during the first half of the fiscal year.

Global credit crunch undermines growth

By contrast, the second half of the fiscal year was a very difficult period across nearly all developed and emerging markets. Most major indexes dropped substantially this past winter, led by China and India. The U.S. dollar slipped to record lows against the euro, raising some concern among European exporters that their competitive position was being eroded. The European Commission said in late March that the Eurozone economy "continues to face strong headwinds, including persistent uncertainties about the duration and the ultimate cost of the financial turmoil, a weakening U.S. economy and surging commodity prices. In spite of its sound economic fundamentals, the euro area is starting to feel the pinch." We also began to see signs of a slowdown in Europe, but we think robust Asian demand may continue to offset weakness in exports to the U.S. In March 2008, the global financial sector was pounded amid the collapse of Bear Stearns in the U.S. Still, inflation remains the primary concern for the ECB . The ECB injected liquidity into the system, acting in concert with the U.S. Federal Reserve, but kept interest rates at a six-year high.

Given this environment, we further reduced our exposure to the financial sector, selling some of our insurance holdings, a Greek bank, mining and industrial holdings. To date, insurers have not been buffeted by the same subprime lending problems as global banks, but some investors fear problems may be afoot. We also raised cash and adopted a more defensive positioning within the Fund. We also added a 3 percent currency position in the Japanese yen. In the current environment, we have favored consumer staples such as Nestle S.A., Registered Shares. Late in the fiscal year, we added Heineken N.V. to the Fund. Both companies are seeing strong growth in demand in Eastern Europe, and have been making acquisitions there. Heineken N.V. recently bought a Romanian brewer and Nestle S.A., Registered Shares bought a Greek ice cream manufacturer. We remained underweight the U.K. and Japan. We continue to like restructuring stories in Europe such as Siemens AG. From a thematic standpoint, we also continued to look for ex posure to companies benefiting from growth in global trade.

Our outlook

From a financial perspective, it appears a global bear market has arrived, as prices on exchanges from Asia to Europe appear firmly coupled with the negative factors affecting stocks in the U.S. From the economic perspective, however, the picture is mixed, suggesting long-term de-coupling between the U.S. and higher growth areas. We believe Asia's long-term growth in domestic demand and consumption will continue at a strong pace. We feel that companies in Europe are also likely to benefit from exports to Asia even if exports to the U.S. decline. Business confidence in Germany, the region's largest economy, unexpectedly rose for a third month in March 2008. Unemployment in the Eurozone region remains at a record low of 7.1 percent. Over the long term, we believe lower interest rates in the U.S. should be stimulative to growth stocks in major developed markets, potentially benefiting our investing style. It may take a long time, however, for Europe and emerging markets to cut the cost of credit given rising ra tes of global inflation, especially in commodities.

As with any mutual fund, the value of the Fund's shares will change, and you could lose money on your investment. International investing involves additional risks, including currency fluctuations, political or economic conditions affecting the foreign country, and differences in accounting standards and foreign regulations. These and other risks are more fully described in the Fund's prospectus.

The Fund's performance noted above is at net asset value (NAV), and does not include the effect of any applicable sales charges. If reflected, the sales charge would reduce the performance noted.

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

Comparison of Change in Value of
$10,000 Investment

Ivy International Growth Fund, Class A Shares(1)	$	13,196
MSCI EAFE Growth Index	$	14,059
MSCI EAFE Index	$	17,421
Lipper International Large-Cap Growth Funds Universe Average	$	15,330

		IVY INTERNATIONAL GROWTH FUND, CLASS A	MSCI EAFE GROWTH	LIPPER INTERNATIONAL LARGE-CAP GROWTH FUNDS UNIVERSE
		SHARES	INDEX	AVERAGE
DEC	1998	9,425	10,000	10,000
DEC	1999	11,409	12,946	14,073
DEC	2000	9,440	9,772	11,355
DEC	2001	7,455	7,370	8,731
DEC	2002	5,892	6,189	7,078
DEC	2003	7,438	8,169	9,162
MARCH	2004	7,690	8,493	9,505
MARCH	2005	8,238	9,402	10,298
MARCH	2006	10,786	11,715	13,101
MARCH	2007	12,566	13,796	15,212
MARCH	2008	13,196	14,059	15,330

Please note that the performance of the Fund's other share classes will be greater or less than the performance shown above for Class A based on the differences in loads and fees paid by shareholders investing in the different classes.

(1)The value of the investment in the Fund is impacted by the sales load at the time of the investment and by the ongoing expenses of the Fund and assumes reinvestment of dividends and distributions.

Average Annual Total Return(2)
	Class A	Class B	Class C	Class E(3)	Class I	Class Y
1-year period ended 3-31-08	- -1.03%	- -0.04%	3.97%	––	––	4.99%
5-year period ended 3-31-08	17.64%	17.66%	17.86%	––	––	––
10-year period ended 3-31-08	2.34%	1.89%	1.94%	––	––	––
Since inception of Class(4) through 3-31-08	––	––	––	––	––	16.78%
Cumulative return since inception of Class(4) through 3-31-08	––	––	––	- -0.72%	6.39%	––

(2)Data quoted is past performance and is based on deduction of the maximum applicable sales load for each of the periods. Current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Please visit www.ivyfunds.com for the Fund's most recent month-end performance. Class A and Class E shares carry a maximum front-end sales load of 5.75%. Class B and Class C shares carry maximum contingent deferred sales charges (CDSC) of 5% and 1%, respectively. (Accordingly, the Class C shares reflect no CDSC since it only applies to Class C shares redeemed within twelve months after purchase.) Class I and Class Y shares are not subject to sales charges.

(3)Class E shares are not currently available for investment.

(4)4-2-07 for Class E and Class I shares and 7-24-03 for Class Y shares (the date on which shares were first acquired by shareholders).

Past performance is not necessarily indicative of future performance. Indexes are unmanaged. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

SHAREHOLDER SUMMARY OF IVY INTERNATIONAL GROWTH FUND

Portfolio Highlights

On March 31, 2008, Ivy International Growth Fund had net assets totaling $250,282,323 invested in a diversified portfolio of:

89.50%	Foreign Common and Preferred Stocks
6.82%	Cash and Cash Equivalents and Unrealized Gain       on Open Forward Currency Contracts
3.68%	Domestic Common Stocks and Investment Funds

As a shareholder of the Fund, for every $100 you had invested on March 31, 2008, your Fund was invested by country and by industry, respectively, as follows:

Country Weightings

Europe	$	64.09
Germany	$	16.96
United Kingdom	$	15.19
Switzerland	$	11.51
Other Europe(1)	$	9.12
France	$	7.07
Italy	$	4.24
Pacific Basin	$	19.59
Japan	$	12.02
Other Pacific Basin(2)	$	7.57
Cash and Cash Equivalents and Unrealized Gain on       Open Forward Currency Contracts	$	6.82
North America	$	5.67
United States	$	3.68
Canada	$	1.99
Other(3)	$	3.83

(1)Includes $2.06 Finland, $2.79 Greece, $0.42 Ireland, $1.24 Netherlands, $0.92 Spain
and $1.69 Sweden.

(2)Includes $2.29 Australia, $2.83 China, $2.02 Hong Kong and $0.43 India.

(3)Includes $0.75 Bermuda and $3.08 Brazil.

Sector Weightings

Consumer Nondurables Stocks	$	15.84
Capital Goods Stocks	$	13.42
Financial Services Stocks	$	12.87
Utilities Stocks	$	10.33
Raw Materials Stocks	$	8.09
Cash and Cash Equivalents and Unrealized Gain on         Forward Currency Contracts	$	6.82
Consumer Durables Stocks	$	6.72
Miscellaneous Stocks(5)	$	4.73
Health Care Stocks	$	3.97
Retail Stocks	$	3.79
Business Equipment and Services Stocks	$	3.78
Multi-Industry Stocks	$	3.58
Energy Stocks	$	3.44
Technology Stocks	$	2.62

(5)Includes $0.88 Consumer Services Stocks, $1.89 Shelter Stocks and $1.96 Transportation Stocks.

The Investments of Ivy International Growth Fund
March 31, 2008
COMMON STOCKS		Shares			Value
Australia - 2.29%
Boart Longyear Limited (A)(B)*	1,240,000			$	2,073,825
Novogen LTD (A)*			474,580		433,719
Telstra Corporation Limited (A)			800,000		3,216,933
					5,724,477
Bermuda - 0.75%
Esprit Holdings Limited (A)			156,000		1,872,164
Brazil - 3.08%
Bolsa de Mercadorias & Futuros (A)			90,000		810,908
Bolsa de Mercadorias & Futuros (A)(B)			71,100		640,617
Bolsa de Valores de Sao Paulo (A)(B)			156,000		2,111,472
Petroleo Brasileiro S.A. - Petrobras, ADR			40,600		4,145,666
					7,708,663
Canada - 1.99%
Shoppers Drug Mart Corporation (A)			50,000		2,530,079
Shoppers Drug Mart Corporation (A)(B)			48,450		2,451,647
					4,981,726
China - 2.83%
China Mobile Limited (A)			346,000		5,148,221
SINA Corporation*			55,000		1,938,200
					7,086,421
Finland - 2.06%
Fortum Oyj (A)			72,000		2,933,834
Nokia OYJ (A)			70,000		2,214,679
					5,148,513
France - 7.07%
ALSTOM (A)			7,000		1,517,564
AXA S.A. (A)			35,000		1,270,346
L'Oreal (A)			19,200		2,438,307
LVMH Moet Hennessy - Louis Vuitton (A)			16,000		1,780,837
Pernod Ricard (A)			17,500		1,800,256
TOTAL S.A. (A)			35,000		2,599,264
VINCI (A)			87,000		6,289,339
					17,695,913
Germany - 14.88%
Bayer Aktiengesellschaft (A)			82,960		6,653,460
Beiersdorf Aktiengesellschaft (A)			30,000		2,515,906
Commerzbank Aktiengesellschaft (A)			85,000		2,675,834
Deutsche Borse AG (A)			46,300		7,504,809
E.ON AG (A)			24,000		4,478,616
elexis AG (A)			40,000		1,079,869
Linde Aktiengesellschaft (A)			21,700		3,065,839
Siemens AG (A)			41,500		4,533,217
Vossloh AG (A)			21,450		3,013,925
Wacker Construction Equipment AG (A)*			36,000		722,376
Wacker Construction Equipment AG (A)(B)*			49,500		993,267
					37,237,118
Greece - 2.79%
Bank of Cyprus Limited (A)			201,000		2,379,975
Hellenic Exchanges Holding S.A. (A)			150,000		3,561,674
National Bank of Greece S.A. (A)			20,000		1,055,241
					6,996,890
Hong Kong - 2.02%
CNOOC Limited (A)	1,270,000				1,876,610
Cheung Kong (Holdings) Limited (A)			60,000		851,895
Hutchison Whampoa Limited, Ordinary Shares (A)			247,000		2,337,449
					5,065,954
India - 0.43%
ICICI Bank Limited, ADR			28,000		1,069,320
Ireland - 0.42%
Allied Irish Banks, p.l.c. (A)			50,000		1,058,556
Italy - 4.24%
Banca Intesa S.p.A. (A)			190,000		1,339,338
DiaSorin S.p.A. (A)(B)*			40,000		818,427
Prysmian SpA (A)(B)*			28,500		608,326
Saipem S.p.A. (A)			89,000		3,602,659
UniCredit S.p.A. (A)			635,001		4,250,650
					10,619,400
Japan - 12.02%
Canon Inc. (A)			31,000		1,427,468
Central Japan Railway Company (A)			200		2,066,613
East Japan Railway Company (A)			160		1,330,658
Japan Tobacco Inc. (A)			760		3,804,575
Komatsu Ltd. (A)			46,000		1,275,983
Kurita Water Industries Ltd. (A)			60,000		2,209,069
Mitsubishi Electric Corporation (A)			235,000		2,032,203
Mitsubishi Estate Co., Ltd. (A)			160,000		3,884,430
Nintendo Co., Ltd. (A)			10,200		5,259,631
Shin-Etsu Chemical Co., Ltd. (A)			42,000		2,169,944
Suzuki Motor Corporation (A)			90,000		2,270,766
Toyota Motor Corporation (A)			47,000		2,343,399
					30,074,739
Netherlands - 1.24%
Heineken N.V. (A)			53,500		3,107,411
Spain - 0.92%
Telefonica, S.A. (A)			80,000		2,298,669
Sweden - 1.69%
Atlas Copco AB, Class A (A)*			93,000		1,588,647
H & M Hennes & Mauritz AB (A)			42,900		2,635,290
					4,223,937
Switzerland - 11.51%
Compagnie Financiere Richemont SA (A)			21,800		1,222,697
Holcim Ltd, Registered Shares (A)			35,300		3,707,371
Julius Baer Holding Ltd., Bearer Shares (A)			38,000		2,800,926
Nestle S.A., Registered Shares (A)			18,750		9,369,336
Roche Holdings AG, Genussschein (A)			26,000		4,893,163
Swatch Group Ltd (The), Bearer Shares (A)			8,200		2,192,226
Syngenta AG (A)			10,810		3,167,566
Zurich Financial Services, Registered Shares (A)			4,600		1,448,646
					28,801,931
United Kingdom - 15.19%
BAE Systems plc (A)			451,000		4,343,337
British American Tobacco p.l.c. (A)			177,000		6,642,725
Diageo plc (A)			85,000		1,713,934
IG Group Holdings plc (A)(B)			272,000		1,766,567
Informa plc (A)			355,000		2,206,993
Intertek Group plc (A)			145,000		2,969,814
National Grid plc (A)			250,000		3,430,944
Reckitt Benckiser Group plc (A)			87,500		4,846,736
Serco Group plc (A)			150,000		1,350,795
Tanfield Group PLC (A)*	1,000,000				1,925,100
Vodafone Group Plc (A)	1,450,000				4,342,489
Xstrata plc (A)			35,500		2,484,937
					38,024,371
United States - 2.78%
Research In Motion Limited*			62,000		6,959,500
TOTAL COMMON STOCKS - 90.20%				$	225,755,673
(Cost: $185,593,025)
PREFERRED STOCKS
Germany
Fresenius AG (A)			45,000		3,775,280
Henkel Kommanditgesellschaft auf Aktien (A)			31,000		1,431,537
TOTAL PREFERRED STOCKS - 2.08%				$	5,206,817
(Cost: $3,624,322)
INVESTMENT FUNDS - 0.90%
United States
streetTRACKS Gold Trust* (Cost: $2,426,803)			25,000	$	2,259,500
UNREALIZED GAIN ON       OPEN FORWARD CURRENCY       CONTRACTS - 0.13%		Face Amount in Thousands
Japanese Yen, 9-3-08 (long) (C)	JPY775,000			$	332,292

SHORT-TERM SECURITIES	Principal Amount in Thousands
Beverages - 2.00%
Coca-Cola Company (The),
2.2%, 4-14-08	$5,000			4,996,028
Finance Companies - 1.20%
Prudential Funding LLC,
2.25%, 4-28-08		3,000		2,994,937
Forest and Paper Products - 2.00%
Kimberly-Clark Worldwide Inc.,
2.18%, 4-8-08		5,000		4,997,881
Health Care - General - 1.76%
Johnson & Johnson,
1.92%, 4-7-08		4,423		4,421,585
TOTAL SHORT-TERM SECURITIES - 6.96%			$	17,410,431
(Cost: $17,410,431)
TOTAL INVESTMENT SECURITIES - 100.27%			$	250,964,713
(Cost: $209,054,581)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.27%)				(682,390	)
NET ASSETS - 100.00%			$	250,282,323

Notes to Schedule of Investments

Certain acronyms may be used within the body of the Fund's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.

*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. These securities have been determined to be liquid under guidelines established by the Board of Trustees. At March 31, 2008, the total value of these securities amounted to $11,464,148 or 4.58% of net assets.

(C)Principal amounts are denominated in the indicated foreign currency, where applicable (JPY - Japanese Yen).

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 GROWTH FUND
     March 31, 2008
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $209,055) (Notes 1 and 3)	$	250,965
Receivables:
Dividends and interest		1,179
Investment securities sold		685
Fund shares sold		409
Prepaid and other assets		27
Total assets		253,265
LIABILITIES
Payable for investment securities purchased		2,199
Payable to Fund shareholders		245
Accrued management fee (Note 2)		179
Due to custodian		85
Accrued service fee (Note 2)		81
Accrued shareholder servicing (Note 2)		78
Accrued accounting services fee (Note 2)		6
Accrued administrative fee (Note 2)		2
Accrued distribution fee (Note 2)		1
Other		107
Total liabilities		2,983
Total net assets	$	250,282
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	452,924
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		13
Accumulated undistributed net realized loss on investment transactions	(244,674		)
Net unrealized appreciation in value of investments		42,019
Net assets applicable to outstanding units of capital	$	250,282
Net asset value per share (net assets divided by shares outstanding):
Class A	$36.27
Class B	$33.04
Class C	$32.97
Class E	$36.28
Class I	$36.57
Class Y	$36.27
Capital shares outstanding:
Class A		4,485
Class B		305
Class C		1,614
Class E		3
Class I		571
Class Y		92

See Notes to Financial Statements.

Statement of Operations
     IVY INTERNATIONAL GROWTH FUND
     For the Fiscal Year Ended March 31, 2008
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $383)	$	4,086
Interest and amortization		417
Total income		4,503
Expenses (Note 2):
Investment management fee		2,187
Shareholder servicing:
Class A		359
Class B		49
Class C		229
Class E		––	*
Class I		18
Class Y		7
Advisor Class		––	*
Class II		1
Distribution fee:
Class A		23
Class B		86
Class C		436
Class E		––	*
Service fee:
Class A		323
Class B		28
Class C		145
Class Y		9
Custodian fees		118
Accounting services fee		74
Administrative fee		26
Audit fees		24
Other		173
Total expenses		4,315
Net investment income		188
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		26,797
Realized net loss on foreign currency transactions		(24	)
Realized net gain on investments		26,773
Unrealized depreciation in value of investments during the period	(16,069		)
Net gain on investments		10,704
Net increase in net assets resulting from operations	$	10,892

*Not shown due to rounding.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,
	2008			2007
INCREASE IN NET ASSETS
Operations:
Net investment income	$	188		$	535
Realized net gain on investments		26,773			34,584
Unrealized depreciation		(16,069	)		(1,366	)
Net increase in net assets resulting from operations		10,892			33,753
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A		(320	)		(236	)
Class B		(––	)		(––	)
Class C		(––	)		(––	)
Class E		(––	)*		NA
Class I		(76	)		NA
Class Y		(5	)		(8	)
Advisor Class		(––	)		(––	)
Class II		(1	)		(1	)
Realized gains on investment transactions:
Class A		(––	)		(––	)
Class B		(––	)		(––	)
Class C		(––	)		(––	)
Class E		(––	)		NA
Class I		(––	)		NA
Class Y		(––	)		(––	)
Advisor Class		(––	)		(––	)
Class II		(––	)		(––	)
		(402	)		(245	)
Capital share transactions (Note 5)		1,559			(26,372	)
Total increase		12,049			7,136
NET ASSETS
Beginning of period		238,233			231,097
End of period	$	250,282		$	238,233
Undistributed net investment income	$	13		$	251

*Not shown due to rounding.

(1)See "Financial Highlights" on pages 204 - 209.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of period	$	34.60		$	29.74		$	22.86		$	21.34		$	20.64			$	16.35
Income (loss) from investment operations:
Net investment income (loss)		0.15			0.19			0.08			(0.02	)		(0.01	)			(0.02	)
Net realized and unrealized gain            on investments		1.59			4.72			6.97			1.54			0.71				4.31
Total from investment operations		1.74			4.91			7.05			1.52			0.70				4.29
Less distributions from:
Net investment income		(0.07	)		(0.05	)		(0.17	)		(0.00	)		(0.00	)			(0.00	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(0.07	)		(0.05	)		(0.17	)		(0.00	)		(0.00	)			(0.00	)
Net asset value, end of period	$	36.27		$	34.60		$	29.74		$	22.86		$	21.34			$	20.64
Total return (1)		5.01	%		16.51	%		30.92	%		7.12	%		3.39	%			26.24	%
Net assets, end of period (in millions)	$163			$165			$156			$122			$125				$124
Ratio of expenses to average net assets		1.42	%		1.46	%		1.59	%		1.61	%		1.69	% (2)			1.81	%
Ratio of net investment income (loss) to      average net assets		0.35	%		0.55	%		0.25	%		- -0.15	%		- -0.26	% (2)			- -0.07	%
Portfolio turnover rate		103	%		97	%		75	%		76	%		27	%			136	%

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

(2)Annualized.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of period	$	31.79		$	27.58		$	21.30		$	20.12		$	19.52			$	15.62
Income (loss) from investment       operations:
Net investment loss		(0.23	) (1)		(0.15	) (1)		(0.17	) (1)		(0.22	) (1)		(0.07	)			(0.23	)
Net realized and unrealized gain             on investments		1.48	(1)		4.36	(1)		6.45	(1)		1.40	(1)		0.67				4.13
Total from investment operations		1.25			4.21			6.28			1.18			0.60				3.90
Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Net asset value, end of period	$	33.04		$	31.79		$	27.58		$	21.30		$	20.12			$	19.52
Total return		3.96	%		15.23	%		29.48	%		5.87	%		3.08	%			24.97	%
Net assets, end of period (in millions)	$10			$11			$13			$17			$49				$55
Ratio of expenses to average net assets		2.45	%		2.55	%		2.74	%		2.75	%		2.75	% (2)			2.84	%
Ratio of net investment loss to average       net assets		- -0.67	%		- -0.53	%		- -0.72	%		- -1.09	%		- -1.35	% (2)			- -1.06	%
Portfolio turnover rate		103	%		97	%		75	%		76	%		27	%			136	%

(1)Based on average weekly shares outstanding.

(2)Annualized.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of period	$	31.71		$	27.52		$	21.20		$	20.00		$	19.39			$	15.52
Income (loss) from investment operations:
Net investment loss		(0.25	)		(0.15	)		(0.09	) (1)		(0.32	)		(0.07	)			(0.20	)
Net realized and unrealized gain             on investments		1.51			4.34			6.41	(1)		1.52			0.68				4.07
Total from investment operations		1.26			4.19			6.32			1.20			0.61				3.87
Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Net asset value, end of period	$	32.97		$	31.71		$	27.52		$	21.20		$	20.00			$	19.39
Total return		3.97	%		15.23	%		29.81	%		6.00	%		3.15	%			24.94	%
Net assets, end of period (in millions)	$53			$57			$56			$9			$11				$12
Ratio of expenses to average net assets		2.42	%		2.54	%		2.43	%		2.64	%		2.67	% (2)			2.80	%
Ratio of net investment loss to average       net assets		- -0.65	%		- -0.53	%		- -0.39	%		- -1.14	%		- -1.25	% (2)			- -0.94	%
Portfolio turnover rate		103	%		97	%		75	%		76	%		27	%			136	%

(1)Based on average weekly shares outstanding.

(2)Annualized.

See Notes to Financial Statements.

Financial Highlights
     IVY INTERNATIONAL GROWTH FUND
     Class E Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (2) through
	3-31-08
Net asset value, beginning of period		$	34.54
Income from investment operations:
Net investment income			0.19
Net realized and unrealized gain on investments			1.67
Total from investment operations			1.86
Less distributions from:
Net investment income			(0.12	)
Capital gains			(0.00	)
Total distributions			(0.12	)
Net asset value, end of period		$	36.28
Total return (3)			5.34	%
Net assets, end of period (in thousands)		$105
Ratio of expenses to average net assets			1.27	% (4)
Ratio of net investment income to average net assets			0.49	% (4)
Portfolio turnover rate			103	% (5)

(1) See Note 5 to financial statements.

(2)Commencement of operations of the class.

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

(4)Annualized.

(5)For the 12 months ended March 31, 2008.

See Notes to Financial Statements.

Financial Highlights
     IVY INTERNATIONAL GROWTH FUND
     Class I Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	34.52
Income from investment operations:
Net investment income			0.10
Net realized and unrealized gain on investments			2.12
Total from investment operations			2.22
Less distributions from:
Net investment income			(0.17	)
Capital gains			(0.00	)
Total distributions			(0.17	)
Net asset value, end of period		$	36.57
Total return			6.39	%
Net assets, end of period (in millions)		$21
Ratio of expenses to average net assets			1.15	% (2)
Ratio of net investment income to average net assets			0.32	% (2)
Portfolio turnover rate			103	% (3)

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the 12 months ended March 31, 2008.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,											For the fiscal period ended				For the period from 7-24-03 (1) to
		2008			2007			2006			2005	3-31-04				12-31-03
Net asset value, beginning of period	$	34.59		$	29.74		$	22.86		$	21.35		$	20.65			$	17.69
Income (loss) from investment operations:
Net investment income (loss)		0.31			0.28			0.18	(2)		(0.09	)		(0.02	)			0.02
Net realized and unrealized gain             on investments		1.42			4.63			6.87	(2)		1.60			0.72				2.94
Total from investment operations		1.73			4.91			7.05			1.51			0.70				2.96
Less distributions from:
Net investment income		(0.05	)		(0.06	)		(0.17	)		(0.00	)		(0.00	)			(0.00	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(0.05	)		(0.06	)		(0.17	)		(0.00	)		(0.00	)			(0.00	)
Net asset value, end of period	$	36.27		$	34.59		$	29.74		$	22.86		$	21.35			$	20.65
Total return		4.99	%		16.50	%		30.95	%		7.07	%		3.39	%			16.73	%
Net assets, end of period (in thousands)	$3,327			$4,960			$6,144			$229			$140				$135
Ratio of expenses to average net assets		1.44	%		1.46	%		1.58	%		1.66	%		1.76	% (3)			0.59	% (3)
Ratio of net investment income (loss)       to average net assets		0.31	%		0.65	%		0.81	%		- -0.33	%		- -0.32	% (3)			0.24	% (3)
Portfolio turnover rate		103	%		97	%		75	%		76	%		27	%			136	% (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.

Manager's Discussion of
Ivy Pacific Opportunities Fund
     March 31, 2008

Below, Frederick Jiang, CFA, CPA, portfolio manager of the Ivy Pacific Opportunities Fund, discusses positioning, performance and results for the fiscal year ended March 31, 2008. He has managed the Fund for four years and has 13 years of industry experience.

STYLE
VALUE	BLEND	GROWTH
	X		LARGE	CAPITALIZATION
			MEDIUM
			SMALL

This diagram shows the Fund's equity investment style and the size of companies in the Fund, as measured by market capitalization. Shaded areas reflect quarterly data for the past three years. Source: Morningstar

The Fund rose 14.30 percent (Class A shares at net asset value) for the fiscal year. This was less than the 19.12 percent increase of the MSCI AC Asia ex Japan Index (an index that generally reflects the performance of Asian stock markets, not including Japan). The Lipper Pacific Ex-Japan Funds Universe Average (reflecting the universe of funds with similar investment objectives) increased 13.95 percent for the same period. Please note that Fund returns include applicable fees and expenses while index returns do not include any such fees.

Stock selection drove results

Stock selection in financials, energy, materials and industrials was the primary factor affecting our fiscal year results. During the first three quarters of the fiscal year, many of our stock selections in China and Hong Kong served us well, as we recorded strong relative returns in those markets. We also substantially increased the Fund's position in Indian stocks during calendar year 2007, and this helped as well.

However, during the last quarter of the fiscal year - the first three months of 2008 - a different story emerged. Since January 2008, we have faced the single most challenging period for the Asian equity market since 1994. China's and India's stock markets both dropped more than 20 percent as the Asian economy faced multiple headwinds and investors lost their appetite for risk.

Within the Fund, we also saw weakness in our information technology and utilities stock selection this past fiscal year. In addition, we were underweight in information technology and consumer staples relative to the Fund's benchmark and this was a negative factor in our yearly results.

Stock market drop may create opportunity

Equity valuations have become much more attractive following the sharp decline in Asian markets, in our view. By the end of the fiscal year, price-earnings ratios (P/Es, or stock price divided by earnings per share) for Chinese stocks had dropped to 13 times earnings (from 18) while P/E ratios for Indian stocks dropped to 18 times earnings (from 24). Rising inflation and equity market volatility related to the western world's credit crisis fueled investor anxiety and expectations that China's government would raise interest rates. Global economic growth is being weighed down by the potential for a recession in the U.S., the International Monetary Fund has reported. In early calendar year 2008, the IMF cut its forecast to 3.7 percent global gross domestic product (GDP) growth this year, down from 4.1 percent.

However, developing markets' GDP growth has remained resilient, with strong expected domestic demand in China likely to keep its GDP growth in the 9 to 10 percent range (down from 11.9 percent). We think India's growth rate should come in at about 7 percent this year, or nearly double the world average. Given that the export-driven economies of South Korea, Taiwan and Singapore are still dependent on the overall health of the U.S., we saw additional equity market weakness there.

In the final months of the fiscal year, we raised cash and initiated a short position on the Hang Seng Index (Hong Kong). This helped preserve capital to some degree even as Chinese stocks plummeted. After about a month and a half, as valuations became more attractive near the end of the quarter, we removed this hedging strategy. Also, in an effort to help mitigate the effect of the falling U.S. dollar, we held positions in Taiwan and Singapore dollars. This was also beneficial as the dollar sank to record lows. We reduced our position in South Korea given its relatively heavy export dependence on the U.S.

Overall, our portfolio reflects two consistent themes - the ongoing buildout of Asian infrastructure and the long-term growth in domestic consumer consumption across the continent. We maintained significant holdings in steel/construction, machinery and power generation equipment. On the consumption side, we are positioned with significant holdings in retailers, telecom and property developers.

Our outlook

Despite the market typhoon of the first three months of calendar year 2008, we remain positive because we believe much of Asia's economic growth is intact. In fact, we think that better equity valuations in China make an even stronger case for holding an overweight position there. Despite higher inflation, we see no real effort by governments to pare back capital expenditures on infrastructure. We still predict that through 2012, spending is likely to exceed $1.6 trillion and be closer to $2 trillion for items such as power plants, highways, rail service and ports. The continuing need for greater capacity in these areas is helping to drive growth. Asian economic fundamentals appear solid, in our opinion. This region continues to benefit from high growth and strong balance sheets. We acknowledge that China may need more aggressive monetary tightening, but we believe this appropriate and responsible policy will help set the stage for continued economic and corporate gains.

Top 10 Equity Holdings as of March 31, 2007	March 31, 2008
Kookmin Bank Samsung Electronics Co., Ltd. Xinhua Finance Media, ADR iShares MSCI Singapore Index Fund Wistron Corporation Korea Investment Holdings Co., Ltd. China Mobile Limited Taiwan Semiconductor Manufacturing       Company Ltd. Keppel Land Limited AU Optronics Corp., ADR	Bharat Heavy Electricals Limited iShares MSCI Taiwan Index Fund Kookmin Bank Samsung Corporation TATA POWER COMPANY LIMITED (THE) Daelim Industrial Co., Ltd. Shimao Property Holdings Limited Reliance Industries Limited Hyundai Department Store Co., Ltd. Agile Property Holdings Limited

See your advisor or www.ivyfunds.com for more information on the Fund's most recently published Top 10 Equity Holdings.

As with any mutual fund, the value of the Fund's shares will change, and you could lose money on your investment. International investing involves additional risks, including currency fluctuations, political or economic conditions affecting the foreign country, and differences in accounting standards and foreign regulations. These and other risks are more fully described in the Fund's prospectus.

The Fund's performance noted above is at net asset value (NAV), and does not include the effect of any applicable sales charges. If reflected, the sales charge would reduce the performance noted.

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

Comparison of Change in Value of
$10,000 Investment

Ivy Pacific Opportunities Fund, Class A Shares(1)	$	30,974
MSCI AC Asia ex Japan Index	$	32,261
Lipper Pacific Ex-Japan Funds Universe Average	$	36,257

		IVY PACIFIC OPPORTUNITIES FUND, CLASS A	MSCI AC ASIA ex JAPAN	LIPPER PACIFIC EX-JAPAN FUNDS UNIVERSE
		SHARES	INDEX	AVERAGE
DEC	1998	9,425	10,000	10,000
DEC	1999	13,828	16,467	16,935
DEC	2000	11,305	10,667	12,193
DEC	2001	10,255	10,257	12,300
DEC	2002	9,095	9,403	11,288
DEC	2003	13,902	13,821	16,351
MARCH	2004	14,573	14,907	17,471
MARCH	2005	16,191	16,524	19,489
MARCH	2006	22,103	21,922	25,370
MARCH	2007	27,099	27,083	31,817
MARCH	2008	30,974	32,261	36,257

Please note that the performance of the Fund's other share classes will be greater or less than the performance shown above for Class A based on the differences in loads and fees paid by shareholders investing in the different classes.

(1)The value of the investment in the Fund is impacted by the sales load at the time of the investment and by the ongoing expenses of the Fund and assumes reinvestment of dividends and distributions.

Average Annual Total Return(2)
	Class A	Class B	Class C	Class E(3)	Class I	Class Y	Advisor Class (3)
1-year period ended 3-31-08	7.73%	9.16%	13.36%	––	––	14.48%	14.86%
5-year period ended 3-31-08	27.22%	27.11%	27.65%	––	––	––	29.23%
10-year period ended 3-31-08	9.46%	8.94%	9.15%	––	––	––	10.07%
Since inception of Class (4) through 3-31-08	––	––	––	––	––	26.40%	––
Cumulative return since inception of Class(4) through 3-31-08	––	––	––	8.19%	15.10%	––	––

(2)Data quoted is past performance and is based on deduction of the maximum applicable sales load for each of the periods. Current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Please visit www.ivyfunds.com for the Fund's most recent month-end performance. Class A and Class E shares carry a maximum front-end sales load of 5.75%. Class B and Class C shares carry maximum contingent deferred sales charges (CDSC) of 5% and 1%, respectively. (Accordingly, the Class C shares reflect no CDSC since it only applies to Class C shares redeemed within twelve months after purchase.) Class I and Class Y shares are not subject to sales charges.

(3)Class E shares are not currently available for investment. Advisor Class shares are no longer available for investment.

(4)4-2-07 for Class E and Class I shares and 7-24-03 for Class Y shares (the date on which shares were first acquired by shareholders).

Past performance is not necessarily indicative of future performance. Indexes are unmanaged. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

SHAREHOLDER SUMMARY OF IVY PACIFIC OPPORTUNITIES FUND

Portfolio Highlights

On March 31, 2008, Ivy Pacific Opportunities Fund had net assets totaling $575,259,584 invested in a diversified portfolio of:

92.45%	Foreign Common Stocks and Investment Funds
7.55%	Cash and Cash Equivalents and Unrealized Gain on Open Forward Currency Contracts

As a shareholder of the Fund, for every $100 you had invested on March 31, 2008, your Fund was invested by country and by industry, respectively, as follows:

Country Weightings

South Korea	$	17.46
China	$	15.83
India	$	11.91
Taiwan	$	10.34
Cayman Islands	$	9.01
Singapore	$	7.71
Cash and Cash Equivalents and Unrealized Gain on       Open Forward Currency Contracts	$	7.55
Hong Kong	$	6.86
Other Pacific Basin(1)	$	4.91
Malaysia	$	4.54
Bermuda	$	3.88

(1)Includes $3.48 Indonesia, $1.08 Thailand and $0.35 Vietnam.

Sector Weightings

Financial Services Stocks	$	21.18
Business Equipment and Services Stocks	$	11.97
Capital Goods Stocks	$	11.66
Multi-Industry Stocks	$	11.02
Utilities Stocks	$	8.53
Cash and Cash Equivalents and Unrealized Gain on       Open Forward Currency Contracts	$	7.55
Shelter Stocks	$	6.29
Raw Materials Stocks	$	5.53
Miscellaneous Stocks(1)	$	5.47
Technology Stocks	$	4.42
Retail Stocks	$	3.53
Energy Stocks	$	2.85

(1)Includes $1.31 Consumer Durables Stocks, $2.40 Consumer Nondurables Stocks, $0.74 Consumer Services Stocks and $1.02 Transportation Stocks.

The Investments of Ivy Pacific Opportunities Fund
March 31, 2008
COMMON STOCKS		Shares			Value
Bermuda - 3.88%
COSCO Pacific Limited (A)			3,000,000	$	5,851,477
China Yurun Food Group Limited (A)			6,832,000		8,629,266
Enerchina Holdings Limited (A)*	56,718,000				1,931,253
REXCAPITAL Financial Holdings Limited (A)*	52,975,000				5,921,922
Wah Sang Gas Holdings Limited (A)(B)*			736,000		—	**
					22,333,918
Cayman Islands - 9.01%
Agile Property Holdings Limited (A)			8,798,000		9,281,103
Ctrip.com International, Ltd.			170,000		9,007,450
Heng Tai Consumables Group Limited (A)*	21,375,000				2,966,213
KWG Property Holding Limited (A)*			7,001,500		5,919,561
Shimao Property Holdings Limited (A)			5,502,500		9,870,019
Simcere Pharmaceutical Group, ADR*			543,506		5,685,073
Tencent Holdings Limited (A)			1,600,000		9,117,717
					51,847,136
China - 15.83%
Agria Corporation, ADR*			25,000		208,750
Bank of Communications Co., Ltd. (A)			7,498,000		8,757,534
CNinsure Inc., ADR*			86,931		1,010,138
China BlueChemical Ltd., H Shares (A)			8,982,000		4,754,915
China CITIC Bank Corporation Limited,       H Shares (A)*	17,503,000				9,243,295
China Merchants Bank Co., Limited,       H Shares (A)			1,851,500		6,411,431
China Merchants Bank Co., Limited,       H Shares (A)(C)			2,000,000		6,925,662
China Nepstar Chain Drugstore Ltd., ADR*			100,000		1,360,000
China Oilfield Services Limited (A)			5,424,000		8,892,889
China Railway Construction Corporation Limited,       H Shares (A)(C)*			3,000,000		4,124,559
China Resources Power Holdings Company       Limited (A)			3,182,000		6,255,530
China Shenhua Energy Company Limited,       H shares (A)(C)			1,200,000		4,795,282
ChinaEdu Corporation, ADR*			350,000		2,345,000
Honghua Group Limited (A)(C)*			4,000,000		1,295,189
Ping An Insurance (Group) Company of       China, Ltd., H Shares (A)			1,243,500		8,811,783
SINA Corporation*			163,440		5,759,626
VisionChina Media Inc., ADR*			200,000		2,200,000
Yingli Green Energy Holding Company Limited, ADR*			462,600		7,910,460
					91,062,043
Hong Kong - 6.86%
Bank of East Asia, Limited (The) (A)			1,178,600		5,898,565
Beijing Enterprises Holdings Limited (A)			1,538,000		5,869,286
CNOOC Limited (A)			5,716,000		8,446,223
Cheung Kong (Holdings) Limited (A)			443,000		6,289,824
Hang Lung Properties Limited (A)			1,651,000		5,844,417
Lee & Man Paper Manufacturing Limited (A)			2,194,000		3,512,588
Pan Asia Environmental Protection Group       Limited (A)(D)*	13,372,000				3,608,180
					39,469,083
India - 11.91%
Bharat Heavy Electricals Limited (A)			340,670		17,503,492
Bharti Airtel Limited (A)*			435,520		8,969,302
CESC Limited (A)(C)			450,000		4,622,258
ICICI Bank Limited, ADR			171,140		6,535,837
Nagarjuna Construction Company Limited (A)			1,435,470		7,681,840
Reliance Industries Limited (A)			168,940		9,540,983
TATA POWER COMPANY LIMITED (THE) (A)			419,150		12,239,138
United Breweries (Holdings) Limited (A)(D)*			79,400		1,420,472
					68,513,322
Indonesia - 3.48%
PT Astra International Tbk (A)			2,866,000		7,550,299
PT Bank Rakyat Indonesia (A)			9,512,500		6,510,456
Perusahaan Perseroan (Persero) PT Telekomunikasi       Indonesia Tbk			141,520		5,935,349
					19,996,104
Malaysia - 4.54%
Amalgamated Containers Berhad (A)*			2,530,190		4,944,095
Bumiputra-Commerce Holdings Berhad (A)			1,356,000		4,218,290
Gamuda Berhad (A)			6,354,500		6,556,151
Genting Berhad (A)			2,067,900		4,234,718
IOI Corporation Berhad (A)			50		111
LION DIVERSIFIED HOLDINGS BERHAD (A)			1,946,300		754,545
Sime Darby Berhad (A)*			1,848,000		5,402,157
					26,110,067
Singapore - 7.71%
Cambridge Industrial Trust (A)(C)			9,500,000		4,244,615
DBS Group Holdings Ltd (A)			626,000		8,186,276
Keppel Corporation Limited (A)			1,230,080		8,847,246
Keppel Land Limited (A)			1,742,000		7,023,938
SembCorp Industries Ltd (A)			1,424,000		4,210,600
Singapore Telecommunications Limited (A)			2,139,350		6,077,125
United Overseas Bank Limited (A)			414,000		5,756,809
					44,346,609
South Korea - 17.46%
Daegu Bank, Ltd. (A)			443,300		5,953,340
Daelim Industrial Co., Ltd. (A)			79,840		10,198,172
ForHuman Co., Ltd. (A)*			200,603		3,949,871
Hyundai Department Store Co., Ltd. (A)			96,340		9,290,120
Hyundai Development Company -       Engineering & Construction (A)			107,060		7,307,776
KCC Corporation (A)			11,340		5,244,328
Kookmin Bank (A)			257,020		14,377,652
Korea Investment Holdings Co., Ltd. (A)			97,780		4,591,074
Kyeryong Construction Industrial Co. Ltd (A)			102,500		3,503,433
LG Chem, Ltd. (A)			85,000		6,351,290
Lotte Shopping Co., Ltd. (A)			17,000		5,149,695
NHN Corporation (A)*			28,620		6,678,530
POSCO (A)			11,110		5,339,890
Samsung Corporation (A)*			178,390		12,500,900
					100,436,071
Taiwan - 7.32%
Cathay Financial Holding Co., Ltd. (A)			2,145,662		5,473,718
Fubon Financial Holding Co., Ltd. (A)			5,573,000		6,328,890
Hon Hai Precision Ind. Co., Ltd. (A)			1,219,200		6,983,025
InnoLux Display Corporation (A)(C)*			700,000		3,682,070
MediaTek Incorporation (A)			539,700		7,106,108
TSRC Corporation (A)			3,195,000		5,174,345
Taiwan Semiconductor Manufacturing       Company Ltd. (A)			3,546,005		7,365,260
					42,113,416
Thailand - 1.08%
Advanced Info Service Public Company Limited (A)			961,500		3,053,835
PTT Public Company Limited (A)			315,000		3,161,505
					6,215,340
TOTAL COMMON STOCKS - 89.08%				$	512,443,109
(Cost: $468,264,643)

INVESTMENT FUNDS
Taiwan - 3.02%
iShares MSCI Taiwan Index Fund			1,096,810		17,384,438
Vietnam - 0.35%
Vietnam Azalea Fund Limited (E)(F)*			500,000		1,986,500
TOTAL INVESTMENT FUNDS - 3.37%				$	19,370,938
(Cost: $19,626,645)
UNREALIZED GAIN ON       OPEN FORWARD CURRENCY       CONTRACTS - 0.00%		Face Amount in Thousands
Singapore Dollar, 3-16-09 (long) (G)	SGD32,500			$	27,037
SHORT-TERM SECURITIES - 1.24%		Principal Amount in Thousands
United States Government Agency Obligations
Federal Home Loan Bank,
1.5%, 4-1-08		$7,127		$	7,127,000
(Cost: $7,127,000)
TOTAL INVESTMENT SECURITIES - 93.69%				$	538,968,084
(Cost: $495,018,288)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 6.31%					36,291,500
NET ASSETS - 100.00%				$	575,259,584

Notes to Schedule of Investments
Certain acronyms may be used within the body of the Fund's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.
*No dividends were paid during the preceding 12 months.
**Not shown due to rounding.
(A)Listed on an exchange outside the United States.
(B)Security valued in good faith by the Valuation Committee subject to the supervision of the Board of Trustees.
(C)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. These securities have been determined to be liquid under guidelines established by the Board of Trustees. At March 31, 2008, the total value of these securities amounted to $29,689,635 or 5.16% of net assets.
(D)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. These securities have been determined to be illiquid under guidelines established by the Board of Trustees. At March 31, 2008, the total value of these securities amounted to $5,028,652 or 0.87% of net assets.
(E)Deemed to be an affiliate due to the Fund owning at least 5% of the outstanding voting securities. The Fund and other mutual funds managed by its investment manager, Ivy Investment Management Company, or other related parties together own 30% of the outstanding shares of this security. See Note 8 to financial statements.
(F)Restricted security. At March 31, 2008, the following restricted security was owned:
	Security	Acquisition Date	Shares	Cost	Market Value
	Vietnam Azalea Fund Limited	6-14-07	500,000	$2,150,000	$1,986,500
The total market value of restricted securities represents approximately 0.35% of net assets at March 31, 2008.
(G)Principal amounts are denominated in the indicated foreign currency, where applicable (SGD - Singapore Dollar).
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
     March 31, 2008
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (Notes 1 and 3):
Securities (cost - $492,868)	$	536,982
Affiliated company (cost - $2,150)		1,986
		538,968
Cash denominated in foreign currencies (cost - $29,930)		30,362
Receivables:
Investment securities sold		15,615
Fund shares sold		1,554
Dividends and interest		1,265
Prepaid and other assets		35
Total assets		587,799
LIABILITIES
Payable for investment securities purchased		10,091
Payable to Fund shareholders		1,312
Accrued management fee (Note 2)		476
Accrued shareholder servicing (Note 2)		192
Accrued service fee (Note 2)		118
Due to custodian		105
Accrued accounting services fee (Note 2)		9
Accrued administrative fee (Note 2)		5
Accrued distribution fee (Note 2)		1
Other		230
Total liabilities		12,539
Total net assets	$	575,260

NET ASSETS
Capital paid in (shares authorized - unlimited)	$	486,934
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(924	)
Accumulated undistributed net realized gain on investment transactions		44,914
Net unrealized appreciation in value of investments		44,336
Net assets applicable to outstanding units of capital	$	575,260
Net asset value per share (net assets divided by shares outstanding):
Class A	$17.61
Class B	$16.01
Class C	$16.27
Class E	$17.62
Class I	$17.77
Class Y	$17.75
Advisor Class	$17.19
Capital shares outstanding:
Class A		26,768
Class B		1,307
Class C		2,306
Class E		7
Class I		2,150
Class Y		402
Advisor Class		6

See Notes to Financial Statements.

Statement of Operations
     IVY PACIFIC OPPORTUNITIES FUND
     For the Fiscal Year Ended March 31, 2008
     (In Thousands)

INVESTMENT LOSS
Income (Note 1B):
Dividends (net of foreign withholding taxes of $1,003)	$	9,041
Interest and amortization		726
Total income		9,767
Expenses (Note 2):
Investment management fee		5,800
Shareholder servicing:
Class A		1,546
Class B		133
Class C		129
Class E		––	*
Class I		37
Class Y		12
Advisor Class		––	*
Service fee:
Class A		1,166
Class B		61
Class C		106
Class Y		19
Custodian fee		655
Distribution fee:
Class A		75
Class B		183
Class C		318
Class E		––	*
Accounting services fee		106
Administrative fee		59
Audit fees		12
Legal fees		9
Other		324
Total expenses		10,750
Net investment loss		(983	)

REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities (net of foreign withholding taxes of $284)	$	95,286
Realized net loss on written options		(12,735	)
Realized net gain on futures contracts		8,409
Realized net loss on foreign currency transactions		(1,106	)
Realized net gain on investments		89,854
Unrealized depreciation in value of securities during the period (1)		(37,070	)
Unrealized appreciation in value of forward currency contracts during the period		27
Unrealized appreciation in value of foreign currency exchange transactions during            the period		390
Unrealized depreciation in value of investments during the period		(36,653	)
Net gain on investments		53,201
Net increase in net assets resulting from operations	$	52,218

*Not shown due to rounding.

(1)Includes $164 in depreciation of affiliated security.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,
	2008			2007
INCREASE IN NET ASSETS
Operations:
Net investment loss	$	(983	)	$	(768	)
Realized net gain on investments		89,854			26,457
Unrealized appreciation (depreciation)		(36,653	)		41,957
Net increase in net assets resulting from operations		52,218			67,646
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A		(1,229	)		(189	)
Class B		(––	)		(––	)
Class C		(––	)		(––	)
Class E		(1	)		NA
Class I		(212	)		NA
Class Y		(34	)		(18	)
Advisor Class		(1	)		(––	)*
Realized gains on investment transactions:
Class A		(50,174	)		(11,514	)
Class B		(2,457	)		(669	)
Class C		(4,433	)		(1,077	)
Class E		(12	)		NA
Class I		(3,011	)		NA
Class Y		(815	)		(239	)
Advisor Class		(11	)		(3	)
		(62,390	)		(13,709	)
Capital share transactions (Note 5)		148,302			159,167
Total increase		138,130			213,104
NET ASSETS
Beginning of period		437,130			224,026
End of period	$	575,260		$	437,130
Undistributed net investment loss	$	(924	)	$	(678	)

*Not shown due to rounding.

(1)See "Financial Highlights" on pages 226 - 232.

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 fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of       period	$	16.91		$	14.32		$	10.61		$	9.55		$	9.11			$	5.96
Income (loss) from investment       operations:
Net investment income             (loss)		(0.01	)		(0.02	)		0.02	(1)		(0.07	)		0.00			(0.02		)
Net realized and unrealized             gain on investments		2.80			3.23			3.83	(1)		1.13			0.44				3.17
Total from investment       operations		2.79			3.21			3.85			1.06			0.44				3.15
Less distributions from:
Net investment income		(0.05	)		(0.01	)		(0.04	)		(0.00	)	(0.00		)		(0.00		)
Capital gains		(2.04	)		(0.61	)		(0.10	)		(0.00	)	(0.00		)		(0.00		)
Total distributions		(2.09	)		(0.62	)		(0.14	)		(0.00	)	(0.00		)		(0.00		)
Net asset value, end of period	$	17.61		$	16.91		$	14.32		$	10.61		$	9.55			$	9.11
Total return (2)		14.30	%		22.60	%		36.51	%		11.10	%		4.83	%		52.85		%
Net assets, end of period       (in millions)	$471			$375			$191			$64			$29				$18
Ratio of expenses to average       net assets including       reimbursement		1.74	%		1.84	%		1.95	%		2.22	%		2.07	% (3)			2.64	%
Ratio of net investment income       (loss) to average net assets       including reimbursement		- -0.08	%		- -0.14	%		0.24	%		- -0.80	%	- -1.07		% (3)		- -0.39		%
Ratio of expenses to average       net assets excluding       reimbursement		1.74	% (4)		1.84	% (4)		1.95	% (4)		2.22	% (4)		2.07	% (3)(4)			2.73	%
Ratio of net investment income       (loss) to average net assets       excluding reimbursement		- -0.08	% (4)		- -0.14	% (4)		0.24	% (4)		- -0.80	% (4)	- -1.07		% (3)(4)		- -0.48		%
Portfolio turnover rate		96	%		74	%		87	%		87	%		61	%			187	%

(1)Based on average shares outstanding.

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

(3)Annualized.

(4)There was no waiver of expenses during the period.

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 fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning       of period	$	15.49		$	13.29		$	9.91		$	9.01		$	8.61			$	5.75
Income (loss) from investment       operations:
Net investment loss		(0.19	)		(0.07	)		(0.06	) (1)	(0.13		)	(0.04		)		(0.06		)
Net realized and unrealized             gain on investments		2.56			2.88			3.54	(1)		1.03			0.44				2.92
Total from investment operations		2.37			2.81			3.48			0.90			0.40				2.86
Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)		(0.00		)
Capital gains		(1.85	)		(0.61	)		(0.10	)	(0.00		)	(0.00		)		(0.00		)
Total distributions		(1.85	)		(0.61	)		(0.10	)	(0.00		)	(0.00		)		(0.00		)
Net asset value, end of period	$	16.01		$	15.49		$	13.29		$	9.91		$	9.01			$	8.61
Total return		13.16	%		21.33	%		35.26	%		9.99	%		4.65	%		49.74		%
Net assets, end of period       (in millions)	$21			$20			$11			$6			$6				$6
Ratio of expenses to average net       assets including       reimbursement		2.74	%		2.88	%		2.91	%		3.06	%		2.86	% (2)			3.46	%
Ratio of net investment loss to       average net assets including       reimbursement		- -1.05	%		- -1.15	%		- -0.51	%	- -1.57		%	- -1.92		% (2)		- -1.15		%
Ratio of expenses to average net       assets excluding       reimbursement		2.74	% (3)		2.88	% (3)		2.91	% (3)		3.06	% (3)		2.86	% (2)(3)			3.55	%
Ratio of net investment loss to       average net assets excluding       reimbursement		- -1.05	% (3)		- -1.15	% (3)		- -0.51	% (3)	- -1.57		% (3)	- -1.92		% (2)(3)		- -1.24		%
Portfolio turnover rate		96	%		74	%		87	%		87	%		61	%			187	%

(1)Based on average shares outstanding.

(2)Annualized.

(3)There was no waiver of expenses during the period.

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 fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning       of period	$	15.73		$	13.45		$	10.01		$	9.09		$	8.68			$	5.75
Income (loss) from investment       operations:
Net investment loss		(0.14	)		(0.08	)		(0.06	) (1)		(0.09	)	(0.02		)		(0.05		)
Net realized and unrealized             gain on investments		2.58			2.97			3.60	(1)		1.01			0.43				2.98
Total from investment operations		2.44			2.89			3.54			0.92			0.41				2.93
Less distributions from:
Net investment income		(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)		(0.00		)
Capital gains		(1.90	)		(0.61	)		(0.10	)		(0.00	)	(0.00		)		(0.00		)
Total distributions		(1.90	)		(0.61	)		(0.10	)		(0.00	)	(0.00		)		(0.00		)
Net asset value, end of period	$	16.27		$	15.73		$	13.45		$	10.01		$	9.09			$	8.68
Total return		13.36	%		21.68	%		35.51	%		10.12	%		4.72	%		50.96		%
Net assets, end of period       (in millions)	$38			$34			$18			$7			$3				$2
Ratio of expenses to average net       assets including       reimbursement		2.49	%		2.60	%		2.75	%		3.06	%		2.57	% (2)			3.48	%
Ratio of net investment loss to       average net assets including       reimbursement		- -0.82	%		- -0.87	%		- -0.50	%		- -1.68	%	- -1.59		% (2)		- -1.14		%
Ratio of expenses to average net       assets excluding       reimbursement		2.49	% (3)		2.60	% (3)		2.75	% (3)		3.06	% (3)		2.57	% (2)(3)			3.57	%
Ratio of net investment loss to       average net assets excluding       reimbursement		- -0.82	% (3)		- -0.87	% (3)		- -0.50	% (3)		- -1.68	% (3)	- -1.59		% (2)(3)		- -1.23		%
Portfolio turnover rate		96	%		74	%		87	%		87	%		61	%			187	%

(1)Based on average shares outstanding.

(2)Annualized.

(3)There was no waiver of expenses during the period.

See Notes to Financial Statements.

Financial Highlights
     IVY PACIFIC OPPORTUNITIES FUND
     Class E Shares ⁽¹⁾
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (2) through
	3-31-08
Net asset value, beginning of period		$	16.88
Income from investment operations:
Net investment income			0.06
Net realized and unrealized gain on investments			2.82
Total from investment operations			2.88
Less distributions from:
Net investment income			(0.10	)
Capital gains			(2.04	)
Total distributions			(2.14	)
Net asset value, end of period		$	17.62
Total return (3)			14.79	%
Net assets, end of period (in thousands)		$115
Ratio of expenses to average net assets			1.43	% (4)
Ratio of net investment income to average net assets			0.26	% (4)
Portfolio turnover rate			96	% (5)

(1)See Note 5 to financial statements.

(2)Commencement of operations of the class.

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

(4)Annualized.

(5)For the 12 months ended March 31, 2008.

See Notes to Financial Statements.

Financial Highlights
     IVY PACIFIC OPPORTUNITIES FUND
     Class I Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	17.00
Income (loss) from investment operations:
Net investment loss			(0.03	) (2)
Net realized and unrealized gain on investments			2.98	(2)
Total from investment operations			2.95
Less distributions from:
Net investment income			(0.14	)
Capital gains			(2.04	)
Total distributions			(2.18	)
Net asset value, end of period		$	17.77
Total return			15.10	%
Net assets, end of period (in millions)		$38
Ratio of expenses to average net assets			1.31	% (3)
Ratio of net investment income to average net assets			0.06	% (3)
Portfolio turnover rate			96	% (4)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(4)For the twelve months ended March 31, 2008.

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 fiscal year ended March 31,											For the fiscal period ended				For the period from 7-24-03 (1) to
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of       period	$	17.03		$	14.41		$	10.67		$	9.58		$	9.13			$	6.85
Income (loss) from       investment operations:
Net investment income            (loss)		0.01			0.02			0.04	(2)		(0.04	)	(0.00		)		(0.01		)
Net realized and             unrealized gain             on investments		2.83			3.26			3.87	(2)		1.13			0.45				2.29
Total from investment       operations		2.84			3.28			3.91			1.09			0.45				2.28
Less distributions from:
Net investment income		(0.08	)		(0.05	)		(0.07	)		(0.00	)	(0.00		)		(0.00		)
Capital gains		(2.04	)		(0.61	)		(0.10	)		(0.00	)	(0.00		)		(0.00		)
Total distributions		(2.12	)		(0.66	)		(0.17	)		(0.00	)	(0.00		)		(0.00		)
Net asset value, end of       period	$	17.75		$	17.03		$	14.41		$	10.67		$	9.58			$	9.13
Total return		14.48	%		22.95	%		36.90	%		11.38	%		4.93	%		33.28		%
Net assets, end of period       (in thousands)	$7,144			$8,101			$3,790			$1,100			$707				$497
Ratio of expenses to average       net assets including       reimbursement		1.55	%		1.58	%		1.68	%		1.88	%		1.64	% (3)			2.01	% (3)
Ratio of net investment       income (loss) to average       net assets including       reimbursement		0.06	%		0.11	%		0.46	%		- -0.47	%	- -0.68		% (3)		- -0.40		% (3)
Ratio of expenses to average       net assets excluding       reimbursement		1.55	% (4)		1.58	% (4)		1.68	% (4)		1.88	% (4)		1.64	% (3)(4)			2.18	% (3)
Ratio of net investment       income (loss) to average       net assets excluding       reimbursement		0.06	% (4)		0.11	% (4)		0.46	% (4)		- -0.47	% (4)	- -0.68		% (3)(4)		- -0.57		% (3)
Portfolio turnover rate		96	%		74	%		87	%		87	%		61	%			187	% (5)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(4)There was no waiver of expenses during the period.

(5)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 fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of       period	$	16.54		$	14.01		$	10.38		$	9.28		$	8.85			$	5.81
Income (loss) from investment       operations:
Net investment income (loss)		0.09			0.09			0.14	(2)		(0.01	)	(0.01		)		(0.01		)
Net realized and unrealized            gain on investments		2.76			3.15			3.70	(2)		1.11			0.44				3.05
Total from investment operations		2.85			3.24			3.84			1.10			0.43				3.04
Less distributions from:
Net investment income		(0.16	)		(0.10	)		(0.11	)		(0.00	)	(0.00		)		(0.00		)
Capital gains		(2.04	)		(0.61	)		(0.10	)		(0.00	)	(0.00		)		(0.00		)
Total distributions		(2.20	)		(0.71	)		(0.21	)		(0.00	)	(0.00		)		(0.00		)
Net asset value, end of period	$	17.19		$	16.54		$	14.01		$	10.38		$	9.28			$	8.85
Total return		14.86	%		23.33	%		37.28	%		11.85	%		4.86	%		52.32		%
Net assets, end of period       (in thousands)	$102			$89			$76			$64			$58				$55
Ratio of expenses to average net       assets including      reimbursement		1.22	%		1.28	%		1.42	%		1.56	%		1.82	% (3)			2.49	%
Ratio of net investment income       (loss) to average net assets       including reimbursement		0.46	%		0.55	%		1.12	%		- -0.06	%	- -0.88		% (3)		- -0.09		%
Ratio of expenses to average       net assets excluding       reimbursement		1.22	% (4)		1.28	% (4)		1.42	% (4)		1.56	% (4)		1.82	% (3)(4)			2.65	%
Ratio of net investment income       (loss) to average net assets       excluding reimbursement		0.46	% (4)		0.55	% (4)		1.12	% (4)		- -0.06	% (4)	- -0.88		% (3)(4)		- -0.25		%
Portfolio turnover rate		96	%		74	%		87	%		87	%		61	%			187	%

(1)See Note 5 to financial statements.

(2)Based on average shares outstanding.

(3)Annualized.

(4)There was no waiver of expenses during the period.

See Notes to Financial Statements.

Manager's Discussion of Ivy Balanced Fund
     March 31, 2008

Below, Cynthia P. Prince-Fox, portfolio manager of the Ivy Balanced Fund, discusses positioning, performance and results for the fiscal year ended March 31, 2008. She has managed the Fund for four years and has 25 years of industry experience.

The Fund increased 7.05 percent (Class A shares at net asset value) for the 12 months ended March 31, 2008. This was higher than the S&P 500 Index (reflecting the performance of large and medium-size U.S. stocks), which decreased 5.08 percent for the same period. The Fund's return was less than the Citigroup Treasury/Government Sponsored/Credit Index (generally reflecting the performance of funds in the bond market), which increased 8.72 percent. The Fund's peer group, the Lipper Mixed-Asset Target Allocation Growth Funds Universe Average (reflecting the performance of funds with similar objectives), decreased 2.22 percent. Multiple indices are presented because the Fund invests in both stocks and bonds. Please note that Fund returns include applicable fees and expenses while index returns do not include any such fees.

Technology and financial weightings drove results

The Fund maintained a higher allocation in equities versus fixed income securities throughout the fiscal year, which had a positive impact on overall performance for most of the fiscal year. The equity portion substantially outperformed the S&P 500 primarily as a result of maintaining a significant relative underweight in financials coupled with strong stock selection in technology, which performed exceptionally well. To us, this sector's returns confirmed our ongoing investment thesis regarding worldwide telecommunications growth. Several of our telecom holdings benefited from solid global demand.

STYLE
VALUE	BLEND	GROWTH
		X	LARGE	CAPITALIZATION
			MEDIUM
			SMALL

This diagram shows the Fund's equity investment style and the size of companies in the Fund, as measured by market capitalization. Shaded areas reflect quarterly data for the past three years. Source: Morningstar

MATURITY
SHORT	INTER	LONG
X			HIGH	CREDIT QUALITY
			MEDIUM
			LOW

This diagram shows the Fund's fixed-income investment style by displaying the average credit quality of the bonds owned and the Fund's interest rate sensitivity, as measured by average maturity. Shaded areas show the past three years of quarterly data. Source: Morningstar

Our decision earlier this year to significantly underweight the financials sector in light of our concerns regarding the mortgage and housing markets also proved a significant driver of relative performance. The Fund's allocation to the sector was significantly less than the S&P 500 allocation of roughly 20 percent. The fixed-income portion of the Fund modestly outperformed the broad investment-grade indices, primarily because we focused on high-quality government bonds. We did maintain some cash in the Fund as a result of earlier stock sales, which also aided performance.

A number of concerns, such as the mortgage and housing markets, high energy prices, employment data, a weak U.S. dollar and interest rate uncertainty led to the volatility in both the equity and fixed-income markets. High debt levels combined with low savings rates pressed consumers to shift buying patterns away from large-ticket purchases, particularly those related to housing. As a result, the consumer discretionary sector was one of the worst-performing areas for the year. The financials sector was negatively impacted by the mortgage and housing market crises, precipitated in part by overzealous subprime lending in recent years. Conversely, the energy, technology and industrial sectors of the market posted strong performance for the fiscal year. Rising commodity prices drove performance in the case of energy. Solid international demand for technology and infrastructure development boosted performance in other sectors.

Overall, we placed our greatest emphasis on consumer staples, industrials and energy, relative to the weightings found in the S&P 500. While the financials sector started as our largest weighted sector in the Fund, we were underweight in banks for most of the year. We further reduced our financial weightings as we became concerned that write-offs related to subprime lending would be larger than we had anticipated. We have preferred to invest in financial stocks that we feel should benefit from increasing global wealth management and electronic trading.

Decoupling still evident

Has the U.S. economy decoupled from the rest of the world - and does it matter? We think the answer is both yes and no. China is still growing its gross domestic product by an estimated 11 percent, despite a slowing in the U.S., and it would appear that China and India's dependence on the U.S as an export market has lessened as their economies emerge as self-sustaining. On the other hand, Europe and Japan have coupled with the U.S. slowdown, a trend that has been the most troublesome development, in our opinion. We believe that the rest of the world is in the midst of an unprecedented economic boom in which the U.S. consumer ends up being only a modest detractor to global growth, and we have positioned the Fund accordingly. We believe we remain positioned to benefit from global growth, but recognize that in a slowing environment, growth may be difficult to find in other than traditionally defensive sectors.

Elsewhere, the housing sector has had a very hard landing. As it stands now, new home sales are down approximately 50 percent from a peak selling rate established in the summer of 2005. Couple that with new home prices falling an average 15 percent year-on-year, and the assumption that consumer spending will be challenged in the coming months is a likely outcome. One of the most critical questions before the markets today is: Will the U.S. consumer enter a protracted downturn as their most significant financial asset declines further in value? We think the answer is yes, but the good news is that we have already witnessed a fairly significant reduction in sales of autos, homes and home-related goods. The surprise has been the insatiable appetite for the latest electronic gadget or gizmo.

Top 10 Equity Holdings as of March 31, 2007	March 31, 2008
Exxon Mobil Corporation General Dynamics Corporation General Electric Company Cisco Systems, Inc. Colgate-Palmolive Company Schlumberger Limited Apple Inc. Johnson & Johnson UBS AG PepsiCo, Inc.	General Dynamics Corporation Exxon Mobil Corporation Colgate-Palmolive Company Schlumberger Limited Nokia Corporation, Series A, ADR Fluor Corporation PepsiCo, Inc. Johnson & Johnson Cisco Systems, Inc. General Electric Company

See your advisor or www.ivyfunds.com for more information on the Fund's most recently published Top 10 Equity Holdings.

Meanwhile, on the other side of the world, business is booming. Foreign-generated profits by U.S. multinational corporations rose by a healthy 14 percent in the first half of 2007. That was in stark contrast to a decline in domestically-generated earnings. So the second part of the question is: Will the U.S. consumer retrenchment bring down the rest of the world? This is a question we have been asking ourselves for months. As stated above, we think the evidence, so far, would suggest the rest of the world is in the midst of an unprecedented economic boom in which the U.S. consumer ends up being only a modest detractor to global growth.

Bond Portfolio Characteristics
As of March 31, 2008
Average maturity	3.15 years
Effective duration	2.36 years
Weighted average bond rating	AAA

Our outlook

From a big-picture standpoint, we still believe there is the potential for additional shocks to the financials sector that could disrupt short-term performance. Fundamentally, we feel confident about the growth prospects for our holdings. As we have written before, we have positioned the Fund in two ways: one, in an effort to take advantage of global growth, and two, to own companies that we feel are less likely to be impacted by cyclical forces in the U.S. economy. Globally, economies are slowing or are expected to slow due to slowing U.S. export growth, but our exporters should continue to fare better, relatively speaking. One big advantage is that the real trade-weighted dollar is approximately ten percent lower than a year ago, the steepest yearly decline since the late 1980s. Given this, we feel that U.S. multinationals and companies with international exposure should continue to be beneficiaries during this period.

As with any mutual fund, the value of the Fund's shares will change, and you could lose money on your investment. These and other risks are more fully described in the Fund's prospectus.

The Fund's performance noted above is at net asset value (NAV), and does not include the effect of any applicable sales charges. If reflected, the sales charge would reduce the performance noted.

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

Comparison of Change in Value of
$10,000 Investment

Ivy Balanced Fund, Class A Shares(1)	$	13,957
S&P 500 Index	$	15,160
Citigroup Treasury/Government Sponsored/Credit Index	$	16,965
Lipper Mixed-Asset Target Allocation Growth Funds       Universe Average	$	16,581

		IVY BALANCED FUND CLASS A,	S&P 500	CITIGROUP TREASURY GOVT SPONSORED CREDIT	LIPPER MIXED-ASSET TARGET ALLOCATION GROWTH FUNDS UNIVERSE
		SHARES	INDEX	INDEX	AVERAGE
SEPT	1998	9,425	10,000	10,000	10,000
SEPT	1999	10,940	12,780	9,855	11,544
SEPT	2000	12,714	14,473	10,513	13,064
SEPT	2001	8,601	10,615	11,925	11,269
SEPT	2002	8,093	8,440	12,985	10,093
SEPT	2003	9,483	10,502	13,845	11,852
MARCH	2004	10,445	11,980	14,281	13,193
MARCH	2005	11,052	12,782	14,355	13,919
MARCH	2006	12,125	14,282	14,668	15,464
MARCH	2007	13,038	15,972	15,605	16,956
MARCH	2008	13,957	15,160	16,965	16,581

Please note that the performance of the Fund's other share classes will be greater or less than the performance shown above for Class A based on the differences in loads and fees paid by shareholders investing in the different classes.

(1)The value of the investment in the Fund is impacted by the sales load at the time of the investment and by the ongoing expenses of the Fund and assumes reinvestment of dividends and distributions.

Average Annual Total Return(2)
	Class A	Class B	Class C	Class E(3)	Class I	Class Y
1-year period ended 3-31-08	0.90%	2.08%	6.27%	––	––	7.16%
5-year period ended 3-31-08	9.19%	––	––	––	––	––
10-year period ended 3-31-08	3.28%	––	––	––	––	––
Since inception of Class(4) through 3-31-08	––	6.39%	6.93%	––	––	7.97%
Cumulative return since inception of Class(4) through 3-31-08	––	––	––	0.95%	7.25%	––

(2)Data quoted is past performance and is based on deduction of the maximum applicable sales load for each of the periods. Current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Please visit www.ivyfunds.com for the Fund's most recent month-end performance. Class A and Class E shares carry a maximum front-end sales load of 5.75%. Class B and Class C shares carry maximum contingent deferred sales charges (CDSC) of 5% and 1%, respectively. (Accordingly, the Class C shares reflect no CDSC since it only applies to Class C shares redeemed within twelve months after purchase.) Class I and Class Y shares are not subject to sales charges.

(3)Class E shares are not currently available for investment.

(4)12-8-03 for Class B, Class C and Class Y shares, and 4-2-07 for Class E and Class I shares (the date on which shares were first acquired by shareholders).

Past performance is not necessarily indicative of future performance. Indexes are unmanaged. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

The Advantus Spectrum Fund merged into the Ivy Balanced Fund on December 8, 2003. The performance shown for periods prior to this date is that of the Advantus Spectrum Fund Class A shares, restated to reflect current sales charges applicable to Ivy Balanced Fund Class A shares. Performance has not been restated to reflect the fees and expenses applicable to the Ivy Balanced Fund. If these expenses were reflected, performance shown would differ.

SHAREHOLDER SUMMARY OF IVY BALANCED FUND

Portfolio Highlights

On March 31, 2008, Ivy Balanced Fund had net assets totaling $96,696,882 invested in a diversified portfolio of:

62.32%	Domestic Common Stocks
15.81%	Cash and Cash Equivalents
14.29%	United States Government and Government Agency Obligations
3.58%	Foreign Common Stocks
3.20%	Domestic Corporate Debt Securities
0.62%	Other Government Securities
0.15%	Domestic Preferred Stocks
0.03%	Foreign Corporate Debt Securities

Asset Allocation

As a shareholder of the Fund, for every $100 you had invested on March 31, 2008,
your Fund owned:

Stocks	$	66.05
Technology Stocks	$	13.20
Health Care Stocks	$	10.40
Consumer Nondurables Stocks	$	8.87
Financial Services Stocks	$	7.74
Energy Stocks	$	7.32
Miscellaneous Stocks(1)	$	5.29
Capital Goods Stocks	$	4.68
Utilities Stocks	$	3.17
Consumer Services Stocks	$	2.82
Raw Materials Stocks	$	2.56
Bonds	$	18.14
United States Government and Government Agency Obligations	$	14.29
Corporate Debt Securities	$	3.23
Other Government Securities	$	0.62
Cash and Cash Equivalents	$	15.81

(1)Includes $1.40 Business Equipment and Services Stocks, $1.95 Multi-Industry Stocks, $1.19 Retail Stocks and $0.75 Transportation Stocks.

The Investments of Ivy Balanced Fund
March 31, 2008
COMMON STOCKS	Shares			Value
Aircraft - 1.28%
Boeing Company (The)		16,600	$	1,234,542
Banks - 1.55%
Northern Trust Corporation		22,600		1,500,414
Beverages - 4.55%
Anheuser-Busch Companies, Inc.		15,000		711,750
Brown-Forman Corporation, Class B		12,400		821,128
Coca-Cola Company (The)		18,700		1,138,269
PepsiCo, Inc.		24,000		1,732,800
				4,403,947
Business Equipment and Services - 0.79%
Pitney Bowes Inc.		21,800		763,436
Capital Equipment - 1.45%
Joy Global Inc.		21,500		1,399,758
Chemicals - Petroleum and Inorganic - 1.14%
E.I. du Pont de Nemours and Company		23,600		1,103,536
Chemicals - Specialty - 1.42%
Air Products and Chemicals, Inc.		14,900		1,370,800
Communications Equipment - 5.08%
Cisco Systems, Inc.*		69,800		1,682,529
Nokia Corporation, Series A, ADR		64,500		2,053,035
QUALCOMM Incorporated		28,600		1,172,171
				4,907,735
Computers - Micro - 1.60%
Apple Inc.		10,800		1,550,016
Computers - Peripherals - 1.16%
Microsoft Corporation		39,758		1,125,549
Defense - 2.90%
General Dynamics Corporation		33,600		2,801,232
Electrical Equipment - 1.19%
Emerson Electric Co.		22,400		1,152,704
Electronic Components - 1.18%
Microchip Technology Incorporated		34,700		1,136,598
Food and Related - 1.37%
Wm. Wrigley Jr. Company		21,100		1,325,924
Health Care - Drugs - 5.28%
Abbott Laboratories		27,700		1,527,655
Allergan, Inc.		14,600		823,294
Genentech, Inc.*		13,700		1,112,166
Gilead Sciences, Inc.*		31,800		1,638,177
				5,101,292
Health Care - General - 4.03%
DENTSPLY International Inc.		35,000		1,351,875
Johnson & Johnson		26,200		1,699,594
Zimmer Holdings, Inc.*		10,900		848,674
				3,900,143
Hospital Supply and Management - 1.09%
Medtronic, Inc.		21,800		1,054,466
Hotels and Gaming - 0.90%
Las Vegas Sands, Inc.*		11,800		868,952
Household - General Products - 2.44%
Colgate-Palmolive Company		30,300		2,360,673
Insurance - Life - 1.54%
Aflac Incorporated		23,000		1,493,850
Insurance - Property and Casualty - 2.58%
Berkshire Hathaway Inc., Class B*		300		1,341,870
Travelers Companies, Inc. (The)		24,000		1,148,400
				2,490,270
Motion Pictures - 1.23%
News Corporation Limited, Class A		63,400		1,188,750
Multiple Industry - 1.95%
Altria Group, Inc.		9,800		217,560
General Electric Company		44,980		1,664,710
				1,882,270
Non-Residential Construction - 2.04%
Fluor Corporation		14,000		1,976,240
Petroleum - International - 5.19%
BP p.l.c., ADR		23,200		1,407,080
Chevron Corporation		13,500		1,152,360
Exxon Mobil Corporation		29,100		2,461,278
				5,020,718
Petroleum - Services - 2.13%
Schlumberger Limited		23,700		2,061,900
Publishing - 0.69%
Meredith Corporation		17,400		665,550
Retail - General Merchandise - 1.19%
Wal-Mart Stores, Inc.		21,900		1,153,692
Security and Commodity Brokers - 1.92%
CME Group Inc.		1,500		703,650
J.P. Morgan Chase & Co.		26,800		1,151,060
				1,854,710
Timesharing and Software - 0.61%
Paychex, Inc.		17,300		592,957
Tobacco - 0.51%
Philip Morris International Inc.*		9,800		495,684
Trucking and Shipping - 0.75%
Expeditors International of Washington, Inc.		16,100		726,191
Utilities - Electric - 1.66%
Exelon Corporation		19,700		1,601,019
Utilities - Telephone - 1.51%
AT&T Inc.		38,100		1,459,230
TOTAL COMMON STOCKS - 65.90%			$	63,724,748
(Cost: $45,204,873)

PREFERRED STOCKS - 0.15%
Finance Companies
Freddie Mac, 8.375% (Cost: $152,500)	6,100	$	148,840

CORPORATE DEBT SECURITIES	Principal Amount in Thousands
Banks - 0.28%
Wells Fargo Bank, N.A.,
7.55%, 6-21-10		$  250		271,531
Finance Companies - 1.25%
Banco Hipotecario Nacional:
7.916%, 7-25-09 (A)(B)		7		65
8.0%, 3-31-11 (A)(B)		130		32,593
First Union-Lehman Brothers-Bank of America       Commercial Mortgage Trust,
6.56%, 11-18-35		71		70,845
Prudential Insurance Company of America,
6.6%, 5-15-08 (A)		750		752,284
Unilever Capital Corporation,
5.9%, 11-15-32		350		356,796
				1,212,583
Food and Related - 1.22%
Archer-Daniels-Midland Company,
7.0%, 2-1-31		700		755,255
Cargill, Inc.,
6.375%, 6-1-12 (C)		400		421,781
				1,177,036
Insurance - Life - 0.48%
StanCorp Financial Group, Inc.,
6.875%, 10-1-12		450		459,896
TOTAL CORPORATE DEBT SECURITIES - 3.23%			$	3,121,046
(Cost: $3,058,660)
OTHER GOVERNMENT SECURITIES - 0.62%
Canada
Hydro-Quebec,
8.0%, 2-1-13 (Cost: $559,048)		500	$	597,197

UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS
Mortgage-Backed Obligations - 3.95%
Federal National Mortgage Association Fixed Rate       Pass-Through Certificates:
6.0%, 9-1-17	328			339,038
5.0%, 1-1-18		374		379,886
5.5%, 4-1-18		240		246,515
6.5%, 10-1-28		128		134,237
6.5%, 2-1-29		26		27,399
7.0%, 5-1-31		25		26,783
7.5%, 5-1-31		48		51,605
7.0%, 7-1-31		39		41,331
7.0%, 9-1-31		56		59,857
7.0%, 9-1-31		38		41,017
7.0%, 11-1-31		133		141,863
6.5%, 2-1-32		149		157,179
7.0%, 2-1-32		143		153,166
7.0%, 2-1-32		82		88,529
6.5%, 3-1-32		44		46,357
7.0%, 3-1-32		89		95,758
7.0%, 6-1-32		29		31,220
7.0%, 7-1-32		147		156,672
6.5%, 8-1-32		65		68,543
6.0%, 9-1-32		560		576,933
6.5%, 9-1-32		134		141,068
5.5%, 5-1-33		274		277,407
5.5%, 5-1-33		160		162,233
5.5%, 5-1-33		113		114,495
5.5%, 6-1-33		256		259,421
				3,818,512
Treasury Obligations - 10.34%
United States Treasury Bond,
7.5%, 11-15-16		500		653,125
United States Treasury Notes:
4.0%, 3-15-10		800		837,313
4.25%, 10-15-10	2,000			2,132,188
3.875%, 2-15-13	1,250			1,335,059
3.625%, 5-15-13		750		792,481
4.25%, 8-15-13		900		980,227
4.25%, 8-15-15	3,000			3,268,125
				9,998,518
TOTAL UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS - 14.29%			$	13,817,030
(Cost: $12,997,048)

SHORT-TERM SECURITIES
Commercial Paper
Aluminum - 1.50%
Alcoa Incorporated,
3.35%, 4-17-08	1,450		1,447,841
Capital Equipment - 1.55%
Illinois Tool Works Inc.,
2.2%, 4-18-08	1,500		1,498,441
Electrical Equipment - 2.07%
W.W. Grainger, Inc.,
2.5%, 4-17-08	2,000		1,997,778
Finance Companies - 1.55%
Prudential Funding LLC,
2.25%, 4-28-08	1,500		1,497,469
Restaurants - 3.10%
Starbucks Corporation,
3.35%, 4-1-08	3,000		3,000,000
Security and Commodity Brokers - 2.06%
American Express Credit Corp.,
2.71%, 4-28-08	2,000		1,995,935
Total Commercial Paper - 11.83%			11,437,464
United States Government Agency Obligations - 4.03%
Federal Home Loan Bank,
1.5%, 4-1-08	3,896		3,896,000
TOTAL SHORT-TERM SECURITIES - 15.86%		$	15,333,464
(Cost: $15,333,464)
TOTAL INVESTMENT SECURITIES - 100.05%		$	96,742,325
(Cost: $77,305,593)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.05%)			(45,443	)
NET ASSETS - 100.00%		$	96,696,882

Notes to Schedule of Investments

Certain acronyms may be used within the body of the Fund's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.

*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. These securities have been determined to be illiquid under guidelines established by the Board of Trustees. At March 31, 2008, the total value of these securites amounted to $784,942, or 0.81% of net assets.

(B)No or partial interest was received on the last interest due date.

(C)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. This security has been determined to be liquid under guidelines established by the Board of Trustees. At March 31, 2008, the total value of this security amounted to 0.44% 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
     March 31, 2008
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $77,306) (Notes 1 and 3)	$	96,742
Receivables:
Dividends and interest		251
Fund shares sold		193
Prepaid and other assets		23
Total assets		97,209
LIABILITIES
Payable to Fund shareholders		380
Accrued management fee (Note 2)		57
Accrued service fee (Note 2)		29
Accrued shareholder servicing (Note 2)		21
Accrued accounting services fee (Note 2)		4
Accrued distribution fee (Note 2)		––	*
Due to custodian		––	*
Other		21
Total liabilities		512
Total net assets	$	96,697
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	78,083
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		24
Accumulated undistributed net realized loss on investment transactions		(847	)
Net unrealized appreciation in value of investments		19,437
Net assets applicable to outstanding units of capital	$	96,697
Net asset value per share (net assets divided by shares outstanding):
Class A	$16.64
Class B	$16.60
Class C	$16.61
Class E	$16.65
Class I	$16.65
Class Y	$16.64
Capital shares outstanding:
Class A		3,782
Class B		178
Class C		242
Class E		6
Class I		6
Class Y		1,597

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Operations
     IVY BALANCED FUND
     For the Fiscal Year Ended March 31, 2008
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	1,314
Dividends (net of foreign withholding taxes of $12)		1,169
Total income		2,483
Expenses (Note 2):
Investment management fee		686
Service fee:
Class A		151
Class B		7
Class C		9
Class Y		70
Shareholder servicing:
Class A		153
Class B		11
Class C		8
Class E		––	*
Class I		––	*
Class Y		43
Accounting services fee		52
Distribution fee:
Class A		7
Class B		21
Class C		26
Class E		––	*
Audit fees		14
Custodian fees		7
Legal fees		1
Other		101
Total expenses		1,367
Net investment income		1,116
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		1,341
Unrealized appreciation in value of investments during the period		4,030
Net gain on investments		5,371
Net increase in net assets resulting from operations	$	6,487

*Not shown due to rounding.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	1,116		$	987
Realized net gain on investments		1,341			3,925
Unrealized appreciation		4,030			1,967
Net increase in net assets resulting from operations		6,487			6,879
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A		(740	)		(661	)
Class B		(7	)		(3	)
Class C		(15	)		(11	)
Class E		(1	)		NA
Class I		(2	)		NA
Class Y		(353	)		(411	)
Realized gains on investment transactions:
Class A		(1,854	)		(––	)
Class B		(85	)		(––	)
Class C		(100	)		(––	)
Class E		(3	)		NA
Class I		(3	)		NA
Class Y		(794	)		(––	)
		(3,957	)		(1,086	)
Capital share transactions (Note 5)		827			(11,344	)
Total increase (decrease)		3,357			(5,551	)
NET ASSETS
Beginning of period		93,340			98,891
End of period	$	96,697		$	93,340
Undistributed net investment income	$	24		$	26

(1)See "Financial Highlights" on pages 249 - 254.

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 fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				9-30-03
Net asset value, beginning of period	$	16.18		$	15.22		$	14.00		$	13.35		$	12.18			$	10.54
Income from investment operations:
Net investment income		0.20			0.16			0.15			0.14			0.05				0.16
Net realized and unrealized             gain on investments		0.97			0.98			1.21			0.65			1.16				1.64
Total from investment operations		1.17			1.14			1.36			0.79			1.21				1.80
Less distributions from:
Net investment income		(0.20	)		(0.18	)		(0.14	)		(0.14	)		(0.04	)			(0.16	)
Capital gains		(0.51	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(0.71	)		(0.18	)		(0.14	)		(0.14	)		(0.04	)			(0.16	)
Net asset value, end of period	$	16.64		$	16.18		$	15.22		$	14.00		$	13.35			$	12.18
Total return (1)		7.05	%		7.53	%		9.71	%		5.90	%		10.06	%			17.17	% (2)
Net assets, end of period       (in millions)	$63			$59			$57			$54			$52				$38
Ratio of expenses to average net       assets including expense waiver		1.38	%		1.39	%		1.42	%		1.53	%		1.52	% (3)(4)			1.29	%
Ratio of net investment income to       average net assets including       expense waiver		1.16	%		1.03	%		1.00	%		1.02	%		0.86	% (3)(4)			1.41	%
Ratio of expenses to average net       assets excluding expense waiver		1.38	% (5)		1.39	% (5)		1.42	% (5)		1.53	% (5)		1.57	% (3)(4)			1.62	%
Ratio of net investment income to       average net assets excluding       expense waiver		1.16	% (5)		1.03	% (5)		1.00	% (5)		1.02	% (5)		0.81	% (3)(4)			1.08	%
Portfolio turnover rate		9	%		23	%		49	%		37	%		29	%			110	%

(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.

(5)There was no waiver of expenses during the period.

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 fiscal year ended March 31,												For the period from 12-8-03 (1) to
	2008			2007			2006			2005			3-31-04
Net asset value, beginning of period	$	16.14		$	15.18		$	13.98		$	13.33			$	12.96
Income from investment operations:
Net investment income		0.04			0.01			0.00			0.01				0.01
Net realized and unrealized gain on investments		0.97			0.98			1.21			0.64				0.39
Total from investment operations		1.01			0.99			1.21			0.65				0.40
Less distributions from:
Net investment income		(0.04	)		(0.03	)		(0.01	)		(0.00	)*			(0.03	)
Capital gains		(0.51	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(0.55	)		(0.03	)		(0.01	)		(0.00	)*			(0.03	)
Net asset value, end of period	$	16.60		$	16.14		$	15.18		$	13.98			$	13.33
Total return		6.08	%		6.49	%		8.62	%		4.90	%			3.05	%
Net assets, end of period (in thousands)	$2,958			$2,506			$1,995			$1,503				$338
Ratio of expenses to average net assets		2.30	%		2.39	%		2.41	%		2.52	%			2.76	% (2)
Ratio of net investment income (loss) to average       net assets		0.24	%		0.03	%		0.01	%		0.06	%			- -0.42	% (2)
Portfolio turnover rate		9	%		23	%		49	%		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 fiscal year ended March 31,												For the period from 12-8-03 (1) to
	2008			2007			2006			2005			3-31-04
Net asset value, beginning of period	$	16.15		$	15.20		$	13.98		$	13.34			$	12.96
Income from investment operations:
Net investment income		0.07			0.04			0.03			0.03				0.02
Net realized and unrealized gain on investments		0.97			0.97			1.20			0.63				0.39
Total from investment operations		1.04			1.01			1.23			0.66				0.41
Less distributions from:
Net investment income		(0.07	)		(0.06	)		(0.01	)		(0.02	)			(0.03	)
Capital gains		(0.51	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(0.58	)		(0.06	)		(0.01	)		(0.02	)			(0.03	)
Net asset value, end of period	$	16.61		$	16.15		$	15.20		$	13.98			$	13.34
Total return		6.27	%		6.67	%		8.80	%		4.98	%			3.13	%
Net assets, end of period (in thousands)	$4,019			$3,018			$1,996			$898				$301
Ratio of expenses to average net assets		2.11	%		2.16	%		2.25	%		2.38	%			2.43	% (2)
Ratio of net investment income (loss) to average       net assets		0.42	%		0.27	%		0.21	%		0.19	%			- -0.12	% (2)
Portfolio turnover rate		9	%		23	%		49	%		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 E Shares ⁽¹⁾
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (2) through
	3-31-08
Net asset value, beginning of period		$	16.21
Income from investment operations:
Net investment income			0.24
Net realized and unrealized gain on investments			0.94
Total from investment operations			1.18
Less distributions from:
Net investment income			(0.23	)
Capital gains			(0.51	)
Total distributions			(0.74	)
Net asset value, end of period		$	16.65
Total return (3)			7.11	%
Net assets, end of period (in thousands)		$107
Ratio of expenses to average net assets			1.15	% (4)
Ratio of net investment income to average net assets			1.39	% (4)
Portfolio turnover rate			9	% (5)

(1)See Note 5 to financial statements.

(2)Commencement of operations of the class.

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

(4)Annualized.

(5)For the twelve months ended March 31, 2008.

See Notes to Financial Statements.

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

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	16.21
Income from investment operations:
Net investment income			0.26
Net realized and unrealized gain on investments			0.95
Total from investment operations			1.21
Less distributions from:
Net investment income			(0.26	)
Capital gains			(0.51	)
Total distributions			(0.77	)
Net asset value, end of period		$	16.65
Total return			7.25	%
Net assets, end of period (in thousands)		$107
Ratio of expenses to average net assets			1.04	% (2)
Ratio of net investment income to average net assets			1.51	% (2)
Portfolio turnover rate			9	% (3)

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the twelve months ended March 31, 2008.

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 fiscal year ended March 31,												For the period from 12-8-03 (1) to
	2008			2007			2006			2005			3-31-04
Net asset value, beginning of period	$	16.18		$	15.22		$	14.00		$	13.35			$	12.96
Income from investment operations:
Net investment income		0.22			0.18			0.17			0.17				0.04
Net realized and unrealized gain on investments		0.97			0.98			1.21			0.65				0.40
Total from investment operations		1.19			1.16			1.38			0.82				0.44
Less distributions from:
Net investment income		(0.22	)		(0.20	)		(0.16	)		(0.17	)			(0.05	)
Capital gains		(0.51	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(0.73	)		(0.20	)		(0.16	)		(0.17	)			(0.05	)
Net asset value, end of period	$	16.64		$	16.18		$	15.22		$	14.00			$	13.35
Total return		7.16	%		7.67	%		9.89	%		6.16	%			3.43	%
Net assets, end of period (in millions)	$27			$28			$38			$44				$53
Ratio of expenses to average net assets		1.28	%		1.26	%		1.26	%		1.30	%			1.36	% (2)
Ratio of net investment income to average       net assets		1.27	%		1.16	%		1.15	%		1.25	%			0.97	% (2)
Portfolio turnover rate		9	%		23	%		49	%		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.

Manager's Discussion of
Ivy Global Natural Resources Fund
     March 31, 2008

Ivy Global Natural Resources Fund is subadvised by Mackenzie Financial Corporation.

Below, Frederick Sturm, CFA, portfolio manager of the Ivy Global Natural Resources Fund, discusses positioning, performance and results for the fiscal year ended March 31, 2008. He has managed the Fund since its inception 11 years ago. He has 26 years of industry experience.

The Fund climbed 26.65 percent (Class A shares at net asset value) for the 12 months ended March 31, 2008. This was less than the MSCI Commodity-Related Index (reflecting the performance of the global natural resource markets), which increased 31.39 percent for the same period. The Lipper Natural Resources Funds Universe Average (reflecting the Fund's peer group of funds with similar investment objectives) advanced 25.73 percent. Please note that Fund returns include applicable fees and expenses while index returns do not include any such fees.

Oil, U.S. gasoline prices hit record highs

This past fiscal year was one for the record books, especially for oil prices, which set a new high of nearly $112 a barrel in the first calendar quarter of 2008. Gasoline prices also climbed well over $3 a gallon in the United States.

To us, the message from the commodity markets seems to be that global expansion continues, sponsored by emerging market needs. Financial stress and increased investor speculation has caused cross-currents that may take time to resolve. For instance, despite stronger economic conditions, many emerging market stocks declined slightly more than U.S. stocks over the fiscal year.

Top 10 Equity Holdings as of March 31, 2007	March 31, 2008
Companhia Vale do Rio Doce, ADR Diamond Offshore Drilling, Inc. Noble Corporation Arch Coal, Inc. Valero Energy Corporation Gold Fields Limited Vallourec GlobalSantaFe Corporation Peabody Energy Corporation Smith International, Inc.	Open Joint Stock Company Gazprom, ADR Renewable Energy Corporation ASA Shin-Etsu Chemical Co., Ltd. Peabody Energy Corporation CONSOL Energy Inc. Smith International, Inc. General Electric Company Halliburton Company Domtar Corporation Allegheny Technologies Incorporated

See your advisor or www.ivyfunds.com for more information on the Fund's most recently published Top 10 Equity Holdings.

During the fiscal year the Fund provided attractive returns but did not do as well as our benchmark because, consistent with our investment strategy, the Fund was not as heavily concentrated in oil and metals as the benchmark. However, compared with many of our peers and the broader equity market, as measured by the S&P 500 Index, the Fund did well in three sectors - energy, materials and industrials. Mild detractors from return included information technology and consumer staples, sectors where we were substantially underweighted relative to the overall stock market.

We remained fully invested amid market weakness

In response to a global liquidity and credit crunch, the Federal Reserve has substantially reduced its short-term interest rate target, and allowed non-bank financial companies access to liquidity directly from the central bank. This last action is unprecedented, and we think may be the bell-ringing event that gives investors confidence the Fed is prepared to do what it takes to not let the credit and equity slides continue. Bank lending practices may have been lax, but corporate balance sheets for most companies remain quite strong, in our view. We believe leading global companies should make it through this period in good financial shape.

Consumer and investor sentiment has been rattled. In our view, trouble had been brewing for nine months, but sentiment surveys suggest many investors have finally given in. Sentiment readings are now as low as in 2002-2003, and if history is any guide, we believe that now is a good time to look for deals. This is why the Fund kept cash to minimum levels during the fiscal year despite the temptation to show conservative cash reserves.

U.S. bashing offers buying opportunity

Speculators and some investors have piled on "anti-U.S. economy", "anti-U.S. market" and "anti-U.S. dollar" bets, creating some interesting opportunities. The declining U.S. dollar attracted speculators to commodities that have been in uptrends, from gold to grains, perhaps pushing prices to short-term excess. If markets get a sniff of recovery, then we believe these trades could potentially reverse. Gold looks vulnerable to just such a correction/consolidation within a long-term uptrend that we believe will still bring higher prices. In our view, however, gold still does not look expensive compared to its cost of production, other metals like copper, and other resources like oil. We have managed the Fund with a period of consolidation in mind for precious metals and have roughly cut exposure to precious metals in half to redeploy to chemical companies in the U.S. and Japan. We also responded to the share price sell-off in General Electric Company by adding to our holdings of th is global titan and leader in many resource sectors, including renewable wind energy. This company is not as direct a participant as some in the renewable energy space, but we do use it as a test for relative attractiveness compared to other companies and we therefore find ourselves adding to, or reducing holdings based on our relative valuation criteria.

U.S. exports, agriculture now more competitive

There are concrete examples in business that the six-year decline in the U.S. dollar is significantly helping the competitiveness of U.S. companies, and we feel this may help stabilize the dollar and the U.S. economy. Given the mothballing of so many basic businesses, it may come as a surprise that it is now cheaper to produce steel in the U.S. than in China. Imports to America are declining to the benefit of domestic companies. This plays well into the hands of North American iron-ore producers, where we have added Cleveland-Cliffs Inc. We also added U.S.-based paper producer Domtar Corporation as a beneficiary of a lower U.S. dollar.

The agricultural commodities sector has had the latest pulse of popularity as low inventories are creating a hoarding mentality that in turn is causing a rush of buying. Corn, wheat and rice have all spiked. This is naturally encouraging more aggressive planting by farmers and extra spending on seeds and fertilizers. Where we feel valuations are still appealing, the Fund has been participating with seed producer E.I. du Pont de Nemours and Company, Russian fertilizer company Uralkali Group, GDR and Bunge Limited as examples.

We see energy as remaining a key theme. Emerging markets like China and India simply cannot industrialize for a higher standard of living without utilizing energy per capita in a manner similar to other industrialized nations. The problem is today they consume two barrels of oil per person per year whereas Japan and Korea are closer to fifteen. Natural gas stocks have had a good rise from oversold levels late in calendar year 2007, in our view. The Fund has not had significant direct exposure, but we think service companies like Halliburton Company stand to benefit.

Coal remains attractive, while renewable energy has been cloudy

Coal competes as an electricity input source and we continue to favor U.S.-based coal producers for their deep and undervalued asset base. We stress the importance of having access to prospective land in order to continue to grow. Leading energy producers in Russia that have government sponsorship stand out to us as offering interesting long-term prospects and Open Joint Stock Company Gazprom, ADR remains a top holding. We also continue to like the implications for growth in renewable energy like solar. This sector was a disappointment in the first calendar quarter of 2008, with declines of 50 percent. Not only did we remain invested, but we acquired more on the expectation of long-term growth. We prefer integrated players and added Renewable Energy Corporation ASA in Norway.

Our outlook

When market conditions get shakier, even long-term investors get wrapped up in short-term headlines. By definition, in the eye of a storm, the majority of the evidence must tilt to the negative, but if we peel back the proverbial onion currently putting some tears into the eyes of some, we believe that we can find a number of worthwhile opportunities. We believe there are far too many experts trying to make short-term forecasts about the latest short-term trend in the most recent "hot" commodity. We continue to advocate a position of persistent but moderated bullishness with an eye to returns over the three- to five-year period. When we consider long-term trends of aspirations in the emerging world, we feel this still offers good logic to maintaining exposure to good quality resource companies.

As with any mutual fund, the value of the Fund's shares will change, and you could lose money on your investment.

Investing in companies involved in one specified sector may be more risky and volatile than an investment with greater diversification. International investing involves additional risks including currency fluctuations, political or economic conditions affecting the foreign country and differences in accounting standards and foreign regulations. These and other risks are more fully described in the Fund's prospectus.

The Fund's performance noted above is at net asset value (NAV), and does not include the effect of any applicable sales charges. If reflected, the sales charge would reduce the performance noted.

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

Comparison of Change in Value of
$10,000 Investment

Ivy Global Natural Resources Fund, Class A Shares (1)	$	71,724
MSCI Commodity-Related Index	$	47,471
Lipper Natural Resources Funds Universe Average	$	51,499

		IVY GLOBAL NATURAL RESOURCES FUND, CLASS A	MSCI COMMODITY- RELATED	LIPPER NATURAL RESOURCES FUNDS UNIVERSE
		SHARES	INDEX	AVERAGE
DEC	1998	9,425	10,000	10,000
DEC	1999	13,287	12,145	13,032
DEC	2000	14,597	14,032	16,532
DEC	2001	16,844	13,822	14,901
DEC	2002	17,630	13,094	14,008
DEC	2003	25,671	18,874	18,556
MARCH	2004	27,117	20,031	19,576
MARCH	2005	34,844	24,060	26,849
MARCH	2006	49,047	30,860	37,467
MARCH	2007	56,631	36,130	40,962
MARCH	2008	71,724	47,471	51,499

Please note that the performance of the Fund's other share classes will be greater or less than the performance shown above for Class A based on the differences in loads and fees paid by shareholders investing in the different classes.

(1)The value of the investment in the Fund is impacted by the sales load at the time of the investment and by the ongoing expenses of the Fund and assumes reinvestment of dividends and distributions.

Average Annual Total Return(2)
	Class A	Class B	Class C	Class E	Class I	Class R	Class Y	Advisor Class(3)
1-year period ended 3-31-08	19.37%	21.64%	25.72%	––	––	26.31%	26.74%	27.09%
5-year period ended 3-31-08	32.47%	32.90%	33.07%	––	––	––	––	34.32%
10-year period ended 3-31-08	17.11%	16.90%	16.77%	––	––	––	––	––
Since inception of Class(4) through 3-31-08	––	––	––	––	––	25.78%	32.56%	24.09%
Cumulative return since inception of Class(4) through 3-31-08	––	––	––	17.27%	26.14%	––	––	––

(2)Data quoted is past performance and is based on deduction of the maximum applicable sales load for each of the periods. Current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Please visit www.ivyfunds.com for the Fund's most recent month-end performance. Class A and Class E shares carry a maximum front-end sales load of 5.75%. Class B and Class C shares carry maximum contingent deferred sales charges (CDSC) of 5% and 1%, respectively. (Accordingly, the Class C shares reflect no CDSC since it only applies to Class C shares redeemed within twelve months after purchase.) Class I, Class R and Class Y shares are not subject to sales charges.

(3)Advisor Class shares are no longer available for investment.

(4)4-2-07 for Class E and Class I shares, 12-29-05 for Class R shares, 7-24-03 for Class Y shares, and 4-8-99 for Advisor Class shares (the date on which shares were first acquired by shareholders).

Past performance is not necessarily indicative of future performance. Indexes are unmanaged. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

SHAREHOLDER SUMMARY OF IVY GLOBAL NATURAL RESOURCES FUND

Portfolio Highlights

On March 31, 2008, Ivy Global Natural Resources Fund had net assets totaling $8,173,770,278 invested in a diversified portfolio of:

60.95%	Foreign Common Stocks
38.79%	Domestic Common Stocks
0.26%	Cash and Cash Equivalents, Corporate Debt Securities,      Preferred Stocks and Unrealized Gain on Open Forward      Currency Contracts

As a shareholder of the Fund, for every $100 you had invested on March 31, 2008, your Fund was invested by country and by industry, respectively, as follows:

Country Weightings

North America	$	49.07
United States	$	38.92
Canada	$	9.35
Mexico	$	0.80
Europe	$	21.03
Russia	$	7.23
Other Europe(1)	$	6.24
Norway	$	3.89
Germany	$	3.67
Pacific Basin	$	11.01
Other Pacific Basin(2)	$	6.12
Japan	$	4.89
South America	$	10.67
Brazil	$	10.10
Other South America(3)	$	0.57
Bahamas/Caribbean	$	6.24
Cayman Islands	$	3.73
Other Bahamas/Caribbean(4)	$	2.51
Other(5)	$	1.43
Middle East(6)	$	0.42
Cash and Cash Equivalents and Unrealized Gain      Open Forward Currency Contracts	$	0.13

(1)Includes $2.04 France, $2.18 Luxembourg, $0.25 Netherlands, $1.46 Spain and $0.31 United Kingdom.

(2)Includes $0.75 Australia, $2.02 China, $0.18 Hong Kong, $0.22 Malaysia, $1.20 Papua New Guinea, $0.14 Philippines, $0.05 Singapore, $1.10 Taiwan and $0.46 Thailand.

(3)Includes $0.57 Chile.

(4)Includes $2.09 Bermuda and $0.42 British Virgin Islands.

(5)Includes $1.43 South Africa.

(6)Includes $0.11 Cyprus and $0.31 Kazakhstan.

Sector Weightings

Energy Stocks	$	35.71
Raw Materials Stocks	$	26.23
Capital Goods Stocks	$	9.42
Multi-Industry Stocks	$	9.32
Shelter Stocks	$	5.57
Technology Stocks	$	3.71
Miscellaneous Stocks(7)	$	3.45
Business Equipment and Services Stocks	$	3.33
Utilities Stocks	$	3.00
Cash and Cash Equivalents, Corporate Debt Securities,      Preferred Stocks and Unrealized Gain on      Open Forward Currency Contracts	$	0.26

(7)Includes $2.06 Consumer Nondurables Stocks, $0.06 Financial Services Stocks, $1.19 Health Care Stocks and $0.14 Transportation Stocks.

The Investments of Ivy Global Natural Resources Fund
March 31, 2008
COMMON STOCKS		Shares			Value
Australia - 0.75%
Paladin Energy Ltd (A)*		10,000,000		$	44,717,229
Sino Gold Mining Limited (A)*			2,087,617		14,251,834
Sino Gold Mining Limited (A)(B)*			289,500		1,976,371
					60,945,434
Bermuda - 2.09%
Aquarius Platinum Limited (A)			3,800,000		56,222,835
Katanga Mining Limited (A)*			447,900		6,807,190
SeaDrill Limited (A)			2,000,000		53,609,827
Weatherford International Ltd*			750,000		54,352,500
					170,992,352
Brazil - 10.10%
Bradespar S.A. (A)			3,602,100		97,509,403
Brasil Ecodiesel Industria e Comercio de       Biocombustiveis e Oleos Vegetais S.A. (A)*			1,200,000		3,118,482
CESP - Companhia Energetica       de Sao Paulo (A)*			1,500,000		25,047,017
CPFL Energia S.A. (A)			850,000		17,099,789
CPFL Energia S.A., ADR			275,000		16,769,500
Companhia de Saneamento Basico do Estado       de Sao Paulo-SABESP (A)			750,000		16,678,065
Companhia de Saneamento Basico do Estado       de Sao Paulo - SABESP, ADR			850,000		37,680,500
Companhia de Transmissao de Energia       Eletrica Paulista (A)
			423,600		9,813,267
Companhia Energetica de Minas       Gerais - CEMIG (A)			2,010,900		36,110,708
Companhia Energetica de Minas       Gerais - CEMIG, ADR			3,000,000		54,120,000
Companhia Vale do Rio Doce, ADR			1,500,000		51,960,000
Companhia Vale do Rio Doce, ADR			1,500,000		43,725,000
Cosan S.A. Industria e Comercio, Class A*			2,500,000		30,800,000
Petroleo Brasileiro S.A. - Petrobras, ADR			400,000		40,844,000
Suzano Bahia Sul Papel E Celulose S.A. (A)			9,917,200		149,715,979
Usinas Siderurgicas de Minas Gerais S.A. -       USIMINA S.A. (A)
			2,000,000		116,487,149
Votorantim Celulose e Papel S.A. (A)			1,000,000		28,312,532
Votorantim Celulose e Papel S.A., ADR			1,750,000		49,892,500
					825,683,891
British Virgin Islands - 0.42%
ReneSola Ltd., ADR*			3,000,000		34,080,000
Canada - 9.35%
ARISE Technologies Corporation (A)*			5,000,000		9,255,200
Agnico-Eagle Mines Limited (A)			1,000,000		67,826,002
Aquiline Resources Inc. (A)*			1,752,300		15,176,528
Cameco Corporation (A)			4,000,000		131,871,986
Ferus Trust (B)(C)*			615,000		1,605,728
First Quantum Minerals Ltd. (A)			700,000		56,766,525
First Uranium Corporation (A)*			600,000		4,454,187
Gerdau Ameristeel Corporation			2,884,700		40,703,117
IAMGOLD Corporation (A)			6,910,900		51,236,737
Kinross Gold Corporation (A)			1,500,000		33,464,855
Nexen Inc. (A)			2,500,000		74,187,734
Pason Systems Inc. (A)			2,534,600		37,286,239
Silver Wheaton Corp. (A)*			8,000,000		124,156,072
Trican Well Service Ltd. (A)			3,500,000		73,276,828
UTS Energy Corporation (A)*			6,250,000		31,845,195
Uranium Participation Corporation (A)(B)*			785,000		7,303,571
Xtreme Coil Drilling Corp. (A)(B)*			576,000		4,208,680
					764,625,184
Cayman Islands - 3.73%
China High Speed Transmission Equipment       Group Co., Ltd. (A)*		14,000,000			20,399,221
Noble Corporation			3,000,000		149,010,000
Transocean Inc.			1,000,000		135,200,000
					304,609,221
Chile - 0.57%
Sociedad Quimica y Minera       de Chile S.A., ADR			2,000,000		46,760,000
China - 2.02%
JA Solar Holdings Co., Ltd., ADR*			2,000,000		37,090,000
Yingli Green Energy Holding Company       Limited, ADR*			7,500,000		128,250,000
					165,340,000
Cyprus - 0.11%
Buried Hill Energy (Cyprus) Public Company Limited (A)(B)(C)*			3,335,000		9,338,000
France - 2.04%
Saft Groupe SA (A)			150,000		5,917,968
Schneider Electric SA (A)			400,000		51,757,945
Vallourec (A)			450,000		109,244,407
					166,920,320
Germany - 3.67%
Q-Cells AG (A)*			1,000,000		100,629,924
SGL Carbon AG (A)*			2,450,000		155,801,140
Siemens AG (A)			400,000		43,693,658
					300,124,722
Hong Kong - 0.18%
Guangdong Investment Limited (A)		30,000,000			14,917,798
Japan - 4.89%
IBIDEN CO., LTD. (A)			2,000,000		78,651,685
NGK INSULATORS, LTD. (A)			3,527,900		62,431,938
Shin-Etsu Chemical Co., Ltd. (A)			5,000,000		258,326,645
					399,410,268
Kazakhstan - 0.31%
Joint Stock Company KazMunaiGas Exploration Production, GDR (A)*			1,000,000		25,050,000
Luxembourg - 2.18%
Tenaris S.A., ADR			2,500,000		124,625,000
Ternium S.A., ADR			1,500,000		53,820,000
					178,445,000
Malaysia - 0.22%
Kuala Lumpur Kepong Berhad (A)			3,500,000		17,727,060
Mexico - 0.80%
Cemex, S.A. de C.V., ADR*			2,500,000		65,300,000
Netherlands - 0.25%
AMG Advanced Metallurgical Group N.V. (A)*			250,000		20,129,142
Norway - 3.89%
Aker Kvaerner ASA(A)			2,000,000		45,558,534
Renewable Energy Corporation ASA (A)*			9,757,000		272,073,601
					317,632,135
Papua New Guinea - 1.20%
Lihir Gold Limited (A)*		30,000,000			98,427,176
Philippines - 0.14%
PNOC Energy Development Corporation (A)		80,000,000			11,299,976
Russia - 7.23%
OAO LUKOIL, ADR			1,000,000		85,800,000
OJSC Oil Company, Rosneft GDR (A)		10,000,000			90,500,000
Open Joint Stock Company Gazprom, ADR (A)			7,000,000		354,550,000
Uralkali Group, GDR (A)*			1,456,300		59,708,300
					590,558,300
Singapore - 0.05%
Bio-Treat Technology Limited (A)		10,000,000			3,668,858
South Africa - 1.43%
Impala Platinum Holdings Limited (A)			2,500,000		96,485,820
Mvelaphanda Resources Limited (A)*			2,000,000		15,533,909
Simmer and Jack Mines, Limited (A)*			7,500,000		4,808,878
					116,828,607
Spain - 1.46%
ACCIONA, S.A. (A)			400,000		107,134,399
Gamesa Corporacion Tecnologica, S.A. (A)			274,300		12,515,227
					119,649,626
Taiwan - 1.10%
Epistar Corporation (A)		20,000,000			56,024,622
Everlight Electronics Co., Ltd (A)		10,000,000			33,904,442
					89,929,064
Thailand - 0.46%
Thai Oil Public Company Limited (A)		17,000,000			37,795,776
United Kingdom - 0.31%
Pangea DiamondFields plc (A)(B)*			2,150,000		2,133,487
Randgold Resources Limited, ADR			500,000		23,175,000
					25,308,487
United States - 38.79%
Allegheny Technologies Incorporated			2,340,000		166,982,400
Andersons, Inc. (The)			750,000		33,427,500
Boardwalk Pipeline Partners, LP			750,000		18,457,500
Bunge Limited			750,000		65,160,000
CONSOL Energy Inc.			3,500,000		242,165,000
Celanese Corporation, Series A			750,000		29,287,500
Cleveland-Cliffs Inc			1,200,000		143,784,000
Commercial Metals Company			268,350		8,042,449
Complete Production Services, Inc.*			2,738,400		62,818,896
Copano Energy, L.L.C., Units			650,000		22,200,750
Cytec Industries Inc.			400,000		21,540,000
Domtar Corporation*		25,000,000			170,750,000
E.I. du Pont de Nemours and Company			1,305,000		61,021,800
Energy Transfer Partners, L.P.			1,000,000		45,670,000
First Solar, Inc.*			400,000		92,332,000
General Electric Company			4,750,000		175,797,500
Halliburton Company			4,400,000		173,052,000
Helix Energy Solutions Group, Inc.*			2,000,000		63,000,000
Hercules Incorporated			3,650,000		66,758,500
Hornbeck Offshore Services, Inc.*			675,000		30,827,250
International Paper Company			2,070,000		56,304,000
Marathon Oil Corporation			1,500,000		68,400,000
Peabody Energy Corporation			4,900,000		249,900,000
Penn Virginia Corporation			750,000		33,067,500
Plains All American Pipeline, L.P.			750,000		35,655,000
Praxair, Inc.			1,250,000		105,287,500
Rock-Tenn Company, Class A			711,900		21,335,643
Rockwood Holdings, Inc.*			3,500,000		114,695,000
Schlumberger Limited			1,053,300		91,637,100
Smith International, Inc.			3,500,000		224,805,000
Sunoco, Inc.			2,900,000		152,163,000
SunPower Corporation, Class A*			1,300,000		96,752,500
Superior Energy Services, Inc.*			1,454,800		57,639,176
Tesoro Corporation			2,900,000		87,000,000
W-H Energy Services, Inc.*			750,000		51,637,500
Williams Partners L.P.			1,000,000		31,500,000
					3,170,853,964
TOTAL COMMON STOCKS - 99.74%				$	8,152,350,361
(Cost: $7,038,495,708)
PREFERRED STOCKS - 0.13%
United States
Konarka Technologies, Inc.,       8.0% Cumulative (B)(C)*			3,500,000	$	10,850,000
(Cost: $10,850,000)
CORPORATE DEBT SECURITIES - 0.08%		Principal Amount in Thousands
Brazil
Bahia Sul Celulose S.A.,
8.6141%, 12-1-12 (B)(C)(D)(E)	BRL10,692			$	6,093,349
(Cost: $5,205,851)

UNREALIZED GAIN (LOSS) ON       OPEN FORWARD CURRENCY       CONTRACTS - 0.00%	Face Amount in Thousands
British Pound, 5-7-08 (short) (D)	GBP8,100			(152,518	)
British Pound, 6-18-08 (short) (D)		6,700		119,269
Canadian Dollar, 4-9-08 (short) (D)	CAD71,500			1,752,657
Canadian Dollar, 4-16-08 (short) (D)		87,500		948,112
Canadian Dollar, 4-23-08 (short) (D)		91,000		2,447,232
Canadian Dollar, 5-7-08 (short) (D)		62,000		1,493,618
Canadian Dollar, 5-28-08 (short) (D)		45,000		1,675,694
Canadian Dollar, 6-  4-08 (short) (D)		52,660		1,710,272
Euro, 4-9-08 (short) (D)	EUR22,950			(2,471,043	)
Euro, 4-23-08 (short) (D)		40,000		(4,160,618	)
Euro, 4-30-08 (short) (D)		45,000		(910,701	)
Euro, 6-25-08 (short) (D)		22,950		55,593
Euro, 5-7-08 (short) (D)		24,000		(2,758,141	)
Euro, 5-14-08 (short) (D)		22,950		(2,470,047	)
Euro, 5-22-08 (short) (D)		22,950		(2,465,942	)
Euro, 6-  4-08 (short) (D)		45,000		(963,578	)
Euro, 6-11-08 (short)( D)		40,000		(841,178	)
South African Rand, 4-9-08 (short) (D)	ZAR10,000			190,956
South African Rand, 4-16-08 (short) (D)		147,500		2,080,303
South African Rand, 4-23-08 (short) (D)		130,000		1,228,293
South African Rand, 4-30-08 (short) (D)		130,000		1,200,995
South African Rand, 5-7-08 (short) (D)		162,500		1,562,910
South African Rand, 5-14-08 (short) (D)		131,150		411,217
South African Rand, 5-22-08 (short) (D)		119,000		739,397
South African Rand, 6-19-08 (short) (D)		150,000		(160,574	)
			$	262,178
TOTAL INVESTMENT SECURITIES - 99.95%			$	8,169,555,888
(Cost: $7,054,551,559)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.05%				4,214,390
NET ASSETS - 100.00%			$	8,173,770,278

Notes to Schedule of Investments

Certain acronyms may be used within the body of the Fund's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.

*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. These securities have been determined to be illiquid under guidelines established by the Board of Trustees. At March 31, 2008, the total value of these securities amounted to $43,509,186 or 0.53% of net assets.

(C)Securities valued in good faith by the Valuation Committee subject to the supervision of the Board of Trustees.

(D)Principal amounts are denominated in the indicated foreign currency, where applicable (BRL - Brazilian Real, CAD - Canadian Dollar, EUR - Euro, GBP - British Pound, ZAR - South African Rand).

(E)Variable rate security. Interest rate disclosed is that which is in effect at March 31, 2008.

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
     March 31, 2008
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $7,054,552) (Notes 1 and 3)	$	8,169,556
Cash denominated in foreign currencies (cost - $68,810)		69,506
Receivables:
Investment securities sold		84,501
Fund shares sold		24,763
Dividends and interest		12,716
Prepaid and other assets		96
Total assets		8,361,138
LIABILITIES
Payable for investment securities purchased		146,554
Payable to Fund shareholders		22,278
Due to custodian		7,079
Accrued management fee (Note 2)		5,488
Accrued service fee (Note 2)		2,742
Accrued shareholder servicing (Note 2)		1,509
Accrued distribution fee (Note 2)		49
Accrued accounting services fee (Note 2)		15
Accrued administrative fee (Note 2)		8
Other		1,646
Total liabilities		187,368
Total net assets	$	8,173,770

NET ASSETS
Capital paid in (shares authorized - unlimited)	$	6,415,781
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(86,577	)
Accumulated undistributed net realized gain on investment transactions		729,546
Net unrealized appreciation in value of investments		1,115,020
Net assets applicable to outstanding units of capital	$	8,173,770
Net asset value per share (net assets divided by shares outstanding):
Class A	$36.53
Class B	$34.27
Class C	$33.47
Class E	$36.41
Class I	$36.74
Class R	$36.30
Class Y	$36.62
Advisor Class	$36.16
Capital shares outstanding:
Class A		141,450
Class B		10,070
Class C		52,261
Class E		83
Class I		1,946
Class R		678
Class Y		22,189
Advisor Class		10

See Notes to Financial Statements.

Statement of Operations
     IVY GLOBAL NATURAL RESOURCES FUND
     For the Fiscal Year Ended March 31, 2008
     (In Thousands)

INVESTMENT LOSS
Income (Note 1B):
Dividends (net of foreign withholding taxes of $6,317)	$	89,147
Interest and amortization (net of foreign withholding taxes of $78)		11,782
Total income		100,929
Expenses (Note 2):
Investment management fee		57,406
Service fee:
Class A		11,109
Class B		860
Class C		3,917
Class R		31
Class Y		1,455
Distribution fee:
Class A		517
Class B		2,515
Class C		11,752
Class E		4
Class R		31
Shareholder servicing:
Class A		7,196
Class B		665
Class C		2,034
Class E		18
Class I		59
Class R		25
Class Y		891
Advisor Class		––	*
Custodian fees		1,932
Accounting services fee		174
Administrative fee		100
Legal fees		86
Audit fees		28
Other		2,114
Total		104,919
Less expenses in excess of voluntary limit (Note 2)		(317	)
Total expenses		104,602
Net investment loss		(3,673	)

REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities	$	1,341,905
Realized net loss on forward currency contracts		(74,474	)
Realized net loss on foreign currency transactions		(4,314	)
Realized net gain on investments		1,263,117
Unrealized appreciation in value of securities during the period		166,827
Unrealized appreciation in value of forward currency contracts during the period		4,052
Unrealized appreciation in value of foreign currency exchange transactions             during the period		57
Unrealized appreciation in value of investments during the period		170,936
Net gain on investments		1,434,053
Net increase in net assets resulting from operations	$	1,430,380

*Not shown due to rounding.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,
	2008			2007
INCREASE IN NET ASSETS
Operations:
Net investment income (loss)	$	(3,673	)	$	14,992
Realized net gain on investments		1,263,117			369,398
Unrealized appreciation		170,936			225,771
Net increase in net assets resulting from operations		1,430,380			610,161
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A		(65,248	)		(14,592	)
Class B		(695	)		(––	)
Class C		(7,927	)		(––	)
Class E		(18	)		NA
Class I		(846	)		NA
Class R		(226	)		(4	)
Class Y		(11,854	)		(1,219	)
Advisor Class		(7	)		(2	)
Realized gains on investment transactions:
Class A		(404,076	)		(261,685	)
Class B		(30,582	)		(23,885	)
Class C		(149,863	)		(96,422	)
Class E		(168	)		NA
Class I		(3,528	)		NA
Class R		(1,246	)		(115	)
Class Y		(56,028	)		(17,486	)
Advisor Class		(30	)		(28	)
		(732,342	)		(415,438	)
Capital share transactions (Note 5)		2,390,679			1,406,805
Total increase		3,088,717			1,601,528
NET ASSETS
Beginning of period		5,085,053			3,483,525
End of period	$	8,173,770		$	5,085,053
Undistributed net investment income (loss)	$	(86,577	)	$	4,963

(1)See "Financial Highlights" on pages 274 - 281.

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 fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of period	$	31.67		$	30.13		$	22.65		$	17.63		$	16.69			$	11.50
Income (loss) from investment operations:
Net investment income (loss)		0.05	(1)		0.17	(1)		0.12			(0.04	)		0.03				0.10
Net realized and unrealized gain             on investments		8.54	(1)		4.40	(1)		8.88			5.06			0.91				5.14
Total from investment operations		8.59			4.57			9.00			5.02			0.94				5.24
Less distributions from:
Net investment income		(0.52	)		(0.16	)		(0.00	)		(0.00	)*		(0.00	)			(0.05	)
Capital gains		(3.21	)		(2.87	)		(1.52	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(3.73	)		(3.03	)		(1.52	)		(0.00	)*		(0.00	)			(0.05	)
Net asset value, end of period	$	36.53		$	31.67		$	30.13		$	22.65		$	17.63			$	16.69
Total return (2)		26.65	%		15.47	%		40.76	%		28.50	%		5.63	%			45.61	%
Net assets, end of period (in millions)	$5,168			$3,360			$2,343			$895			$192				$95
Ratio of expenses to average net assets		1.27	%		1.31	%		1.40	%		1.55	%		1.65	% (3)			1.89	%
Ratio of net investment income (loss) to       average net assets		0.14	%		0.57	%		0.73	%		- -0.52	%		- -0.80	% (3)			- -0.66	%
Portfolio turnover rate		142	%		106	%		104	%		110	%		29	%			58	%

*Not shown due to rounding.

(1)Based on average shares outstanding.

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

(3)Annualized.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of period	$	29.78		$	28.57		$	21.72		$	17.04		$	16.16			$	11.19
Income (loss) from investment operations:
Net investment income (loss)		(0.23	) (1)		(0.05	)		0.03			(0.04	)		(0.01	)			(0.06	)
Net realized and unrealized gain             on investments		8.00	(1)		4.13			8.34			4.72			0.89				5.03
Total from investment operations		7.77			4.08			8.37			4.68			0.88				4.97
Less distributions from:
Net investment income		(0.07	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Capital gains		(3.21	)		(2.87	)		(1.52	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(3.28	)		(2.87	)		(1.52	)		(0.00	)		(0.00	)			(0.00	)
Net asset value, end of period	$	34.27		$	29.78		$	28.57		$	21.72		$	17.04			$	16.16
Total return		25.64	%		14.55	%		39.59	%		27.46	%		5.45	%			44.42	%
Net assets, end of period (in millions)	$345			$272			$223			$110			$30				$21
Ratio of expenses to average net assets		2.07	%		2.12	%		2.23	%		2.39	%		2.42	% (2)			2.90	%
Ratio of net investment loss to average       net assets		- -0.64	%		- -0.24	%		- -0.10	%		- -1.35	%		- -1.59	% (2)			- -1.54	%
Portfolio turnover rate		142	%		106	%		104	%		110	%		29	%			58	%

(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 fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of period	$	29.19		$	28.04		$	21.32		$	16.72		$	15.86			$	10.97
Income (loss) from investment operations:
Net investment income (loss)		(0.20	) (1)		(0.03	)		0.02			(0.09	)		0.00				0.04
Net realized and unrealized gain on             investments		7.86	(1)		4.05			8.22			4.69			0.86				4.85
Total from investment operations		7.66			4.02			8.24			4.60			0.86				4.89
Less distributions from:
Net investment income		(0.17	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Capital gains		(3.21	)		(2.87	)		(1.52	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(3.38	)		(2.87	)		(1.52	)		(0.00	)		(0.00	)			(0.00	)
Net asset value, end of period	$	33.47		$	29.19		$	28.04		$	21.32		$	16.72			$	15.86
Total return		25.72	%		14.65	%		39.72	%		27.51	%		5.42	%			44.58	%
Net assets, end of period (in millions)	$1,749			$1,138			$801			$312			$64				$34
Ratio of expenses to average net assets		1.99	%		2.04	%		2.15	%		2.31	%		2.38	% (2)			2.65	%
Ratio of net investment loss to average       net assets		- -0.58	%		- -0.16	%		- -0.02	%		- -1.28	%		- -1.54	% (2)			- -1.48	%
Portfolio turnover rate		142	%		106	%		104	%		110	%		29	%			58	%

(1)Based on average shares outstanding.

(2)Annualized.

See Notes to Financial Statements.

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

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	32.00
Income (loss) from investment operations:
Net investment income			0.03
Net realized and unrealized gain on investments			7.94
Total from investment operations			7.97
Less distributions from:
Net investment income			(0.35	)
Capital gains			(3.21	)
Total distributions			(3.56	)
Net asset value, end of period		$	36.41
Total return (2)			24.42	%
Net assets, end of period (in millions)		$3
Ratio of expenses to average net assets			2.29	% (3)
Ratio of net investment loss to average net assets			- -1.02	% (3)
Portfolio turnover rate			142	% (4)

(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)For the twelve months ended March 31, 2008.

See Notes to Financial Statements.

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

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	32.16
Income from investment operations:
Net investment income			0.05	(2)
Net realized and unrealized gain on investments			8.51	(2)
Total from investment operations			8.56
Less distributions from:
Net investment income			(0.77	)
Capital gains			(3.21	)
Total distributions			(3.98	)
Net asset value, end of period		$	36.74
Total return			26.14	%
Net assets, end of period (in millions)		$71
Ratio of expenses to average net assets			1.00	% (3)
Ratio of net investment income to average net assets			0.30	% (3)
Portfolio turnover rate			142	% (4)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(4)For the twelve months ended March 31, 2008.

See Notes to Financial Statements.

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

		For the fiscal year ended March 31,						For the period from 12-29-05 (1) to
		2008			2007			3-31-06
Net asset value, beginning of period		$	31.62		$	30.10			$	26.11
Income from investment operations:
Net investment income			0.24			0.05	(2)			0.06
Net realized and unrealized gain on investments			8.23			4.44	(2)			3.93
Total from investment operations			8.47			4.49				3.99
Less distributions from:
Net investment income			(0.58	)		(0.10	)			(0.00	)
Capital gains			(3.21	)		(2.87	)			(0.00	)
Total distributions			(3.79	)		(2.97	)			(0.00	)
Net asset value, end of period		$	36.30		$	31.62			$	30.10
Total return			26.31	%		15.20	%			15.28	%
Net assets, end of period (in thousands)	$24,623				$3,893				$115
Ratio of expenses to average net assets			1.55	%		1.58	%			1.69	% (3)
Ratio of net investment income (loss) to average net assets			- -0.22	%		0.23	%			0.82	% (3)
Portfolio turnover rate			142	%		106	%			104	% (4)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(4)For the 12 months ended March 31, 2006.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,											For the fiscal period ended				For the period from 7-24-03 (1) to
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning       of period	$	31.84		$	30.27		$	22.70		$	17.66		$	16.70			$	12.60
Income (loss) from investment       operations:
Net investment income (loss)		0.17			0.21	(2)		0.24	(2)		(0.02	)		0.01				0.00
Net realized and unrealized             gain on investments		8.50			4.43	(2)		8.85	(2)		5.13			0.95				4.16
Total from investment operations		8.67			4.64			9.09			5.11			0.96				4.16
Less distributions from:
Net investment income		(0.68	)		(0.20	)		(0.00	)		(0.07	)		(0.00	)			(0.06	)
Capital gains		(3.21	)		(2.87	)		(1.52	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(3.89	)		(3.07	)		(1.52	)		(0.07	)		(0.00	)			(0.06	)
Net asset value, end of period	$	36.62		$	31.84		$	30.27		$	22.70		$	17.66			$	16.70
Total return		26.74	%		15.63	%		41.07	%		28.98	%		5.75	%			33.03	%
Net assets, end of period       (in millions)	$813			$311			$116			$21			$4				$1
Ratio of expenses to average net       assets including       reimbursement		1.20	% (4)		1.20	% (4)		1.20	% (4)		1.20	% (4)		1.20	% (3)(4)			1.39	% (3)
Ratio of net investment income       (loss) to average net assets       including reimbursement		0.16	% (4)		0.66	% (4)		0.91	% (4)		- -0.19	% (4)		- -0.35	% (3)(4)			- -0.54	% (3)
Ratio of expenses to average net       assets excluding       reimbursement		1.26	% (4)		1.27	% (4)		1.35	% (4)		1.48	% (4)		1.63	% (3)(4)			1.39	% (3)(5)
Ratio of net investment income       (loss) to average net assets       excluding reimbursement		0.11	% (4)		0.59	% (4)		0.76	% (4)		- -0.47	% (4)		- -0.79	% (3)(4)			- -0.54	% (3)(5)
Portfolio turnover rate		142	%		106	%		104	%		110	%		29	%			58	% (6)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(4)See Note 2.

(5)There was no waiver of expenses during the period.

(6)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 fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				12-31-03
Net asset value, beginning of period	$	31.48		$	29.92		$	22.45		$	17.47		$	16.54			$	11.43
Income (loss) from investment operations:
Net investment income (loss)		0.26			0.31			0.13			(0.14	)		(0.03	)			(0.58	)
Net realized and unrealized gain             on investments		8.43			4.34			8.86			5.14			0.96				5.78
Total from investment operations		8.69			4.65			8.99			5.00			0.93				5.20
Less distributions from:
Net investment income		(0.80	)		(0.22	)		(0.00	)		(0.02	)		(0.00	)			(0.09	)
Capital gains		(3.21	)		(2.87	)		(1.52	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(4.01	)		(3.09	)		(1.52	)		(0.02	)		(0.00	)			(0.09	)
Net asset value, end of period	$	36.16		$	31.48		$	29.92		$	22.45		$	17.47			$	16.54
Total return		27.09	%		15.86	%		41.09	%		28.63	%		5.62	%			45.55	%
Net assets, end of period (in thousands)	$375			$322			$368			$476			$512				$484
Ratio of expenses to average net assets		0.93	%		0.95	%		1.25	%		1.47	%		1.57	% (2)			2.19	%
Ratio of net investment income (loss) to       average net assets		0.52	%		0.94	%		0.97	%		- -0.36	%		- -0.74	% (2)			- -0.41	%
Portfolio turnover rate		142	%		106	%		104	%		110	%		29	%			58	%

(1)See Note 5 to financial statements.

(2)Annualized.

See Notes to Financial Statements.

Managers' Discussion of
Ivy Real Estate Securities Fund
     March 31, 2008

Ivy Real Estate Securities Fund is subadvised by Advantus Capital Management, Inc.

Below, Joseph R. Betlej, CFA, and Lowell R. Bolken, the Fund's portfolio managers, discuss positioning, performance and results for the fiscal year ended March 31, 2008. Mr. Betlej has managed the Fund since its inception and has 23 years of industry experience. Mr. Bolken has managed the Fund for two years and has 18 years of industry experience.

STYLE
VALUE	BLEND	GROWTH
			LARGE	CAPITALIZATION
	X		MEDIUM
			SMALL

This diagram shows the Fund's equity investment style and the size of companies in the Fund, as measured by market capitalization. Shaded areas reflect quarterly data for the past three years. Source: Morningstar

The Fund fell 18.13 percent (Class A shares at net asset value) for the 12 months ended March 31, 2008. By comparison, the Dow Jones Wilshire Real Estate Securities Index (an unmanaged group of securities generally representative of the commercial real estate market) fell 18.95 percent for the fiscal year, while the Lipper Real Estate Funds Universe Average (a group of funds with similar investment objectives) decreased 18.73 percent. Please note that Fund returns include applicable fees and expenses while index returns do not include any such fees.

Housing market concerns spread to commercial properties

The seven-year bull run for real estate securities ended this past fiscal year. At the outset of the period, the weak housing market and growing delinquencies in the residential mortgage market began to influence commercial real estate. The initial reaction was an increased cost of borrowing for commercial real estate, better reflecting the risk of investing in commercial mortgages. As the market came off what could be described as one of the best financing environments, real estate values that had benefited from aggressive financing began to decline. The effect, however, was muted until June and July of 2007, when much-publicized hedge fund and collateralized debt obligations collapsed, causing lenders to finance significantly less against the value of commercial real estate. This "de-leveraging" exacerbated the decline in prices of real estate investment trust (REIT) stocks, but had little effect on commercial property values at that point, as few transactions occurred to document a decline.

Later in 2007, when banks and other financial institutions began recognizing significant write-downs on their loan portfolios, the financing markets virtually closed. It was not until significant financial stimulus by the Federal Reserve Board and other governmental authorities in early 2008 that investors became more confident in the financing markets and commercial real estate valuations. This change allowed for a slight rebound in the stock valuations at the end of the Fund's fiscal year.

During the significant decline in the financial markets in the past year, fundamentals for commercial real estate remained solid. Occupancies remained essentially flat and rental rate growth continued for most property types. Delinquencies of greater than 60 days for commercial real estate loans remained at historic lows of around 0.3 percent, compared with levels exceeding 20 percent for subprime residential mortgages.

The disparity between the public and private markets for commercial real estate widened, and many investors saw the environment as beneficial for mergers and acquisitions. A number of hotel companies as well as other property types were acquired while the window for acquisition financing was still open.

Best performing property types for the year were health care (recognized as defensive), hotel managers and franchisers (merger-and-acquisition influence) and apartments and self-storage companies (beneficiaries of a weakened housing economy). Weaker performers included REIT hotels (expected margin declines), office companies (weakening demand and jobs market) and regional malls (weakening tenants and consumer).

Portfolio positioned as defensive

With the financial market's influence on property and stock valuations, the portfolio became decidedly more defensive as the year progressed. Defensive property types such as health care real estate and grocery-anchored shopping centers were increasingly favored. Apartment and self-storage companies were increased as they benefited from weakness in the housing market. Cash levels in the portfolio were raised in an effort to take advantage of the increasing volatility in the market. Companies that had higher quality balance sheets - giving them the opportunity to skirt difficulties and take advantage of market opportunities - were favored. As the sell-off in the stocks persisted, even the quality names sold off. The markets provided a number of opportunities to buy stocks that had been trading at significant discounts to their underlying assets.

Our outlook

The slide in real estate stock prices of the past year was contrary to the solid earnings growth that these companies continued to demonstrate. In our opinion, the stock prices reflected more of a weakness in the capital markets, particularly debt financing. The lower stock prices, in turn, helped to reduce valuation multiples to more reasonable levels. Aggressive moves by the Fed and other governmental entities appear to have eased the financing crisis somewhat. We believe there will, however, be a residual effect from the feeble financial markets on future earnings, corporate decision making and job growth - all of which look to affect the quality of the real estate markets. We feel office company earnings are most suspect, particularly those owning buildings serving tenants in the financial sector; we believe weakening demand will negatively influence the rental rate growth that drove this sector in recent times. Hotels potentially could see tough times if corporate earnings weakness cuts budgets for the business traveler. If consumers lose confidence in the job market, the resulting headlines likely will affect sentiment in retail property companies, but should have little effect, in our view, on earnings in the near term due to the long-term nature of leases in these properties.

Top 10 Equity Holdings as of March 31, 2007	March 31, 2008
Simon Property Group, Inc. ProLogis Vornado Realty Trust Boston Properties, Inc. Host Hotels & Resorts, Inc. Public Storage, Inc. Archstone-Smith Trust Brookfield Properties Corporation Equity Residential AvalonBay Communities, Inc.	Simon Property Group, Inc. ProLogis Vornado Realty Trust Public Storage, Inc. Boston Properties, Inc. Kimco Realty Corporation Essex Property Trust, Inc. Equity Residential Macerich Company (The) General Growth Properties, Inc.

See your advisor or www.ivyfunds.com for more information on the Fund's most recently published Top 10 Equity Holdings.

Finally, the modest growth in the economy could be a positive for REITs, because current pricing for real estate stocks assumes a fairly dramatic slowdown in earnings and considerable defaults in commercial real estate mortgage loans.

As with any mutual fund, the value of the Fund's shares will change, and you could lose money on your investment. Investment risks associated with real estate securities, in addition to other risks, include rental income fluctuation, depreciation, property tax value changes and differences in real estate market values. Real estate securities are subject to interest rate risk and, as such, the Fund's net asset value may fall as interest rates rise. These and other risks are more fully described in the Fund's prospectus.

The Fund's performance noted above is at net asset value (NAV), and does not include the effect of any applicable sales charges. If reflected, the sales charge would reduce the performance noted.

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

Comparison of Change in Value of
$10,000 Investment

Ivy Real Estate Securities Fund, Class A Shares(1)	$	31,515
Dow Jones Wilshire Real Estate Securities Index(2)	$	35,459
Lipper Real Estate Funds Universe Average(2)	$	33,857

		IVY REAL ESTATE SECURITIES FUND, CLASS A	DOW JONES WILSHIRE REAL ESTATE SECURITIES	LIPPER REAL ESTATE FUNDS UNIVERSE
		SHARES	INDEX	AVERAGE
Inception	2/25/99	9,425	10,000	10,000
JULY	1999	9,965	10,582	10,630
JULY	2000	11,448	12,525	12,314
JULY	2001	12,488	14,028	13,662
JULY	2002	14,025	15,283	15,151
JULY	2003	16,781	17,751	17,616
MARCH	2004	21,778	22,712	22,612
MARCH	2005	24,411	25,510	24,925
MARCH	2006	32,595	35,870	34,074
MARCH	2007	38,491	43,747	41,663
MARCH	2008	31,515	35,459	33,857

Please note that the performance of the Fund's other share classes will be greater or less than the performance shown above for Class A based on the differences in loads and fees paid by shareholders investing in the different classes.

(1)The value of the investment in the Fund is impacted by the sales load at the time of the investment and by the ongoing expenses of the Fund and assumes reinvestment of dividends and distributions.

(2)Because the Fund commenced operations on a date other than at the end of a month, and partial month calculations of the performance of the indexes (including income) are not available, investment in the indexes was effected as of February 28, 1999.

Past performance is not necessarily indicative of future performance. Indexes are unmanaged. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

Average Annual Total Return(3)
	Class A	Class B	Class C	Class E	Class I	Class R	Class Y
1-year period ended 3-31-08	- -22.83%	- -21.94%	- -18.84%	––	––	- -18.12%	- -17.89%
5-year period ended 3-31-08	16.12%	––	––	––	––	––	––
10-year period ended 3-31-08	––	––	––	––	––	––	––
Since inception of Class(4) through 3-31-08	13.44%	11.01%	11.57%	––	––	3.80%	12.74%
Cumulative return since inception of Class(4) through 3-31-08	––	––	––	- -24.17%	- -18.17%	––	––

(3)Data quoted is past performance and is based on deduction of the maximum applicable sales load for each of the periods. Current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Please visit www.ivyfunds.com for the Fund's most recent month-end performance. Class A and Class E shares carry a maximum front-end sales load of 5.75%. Class B and Class C shares carry maximum contingent deferred sales charges (CDSC) of 5% and 1%, respectively. (Accordingly, the Class C shares reflect no CDSC since it only applies to Class C shares redeemed within twelve months after purchase.) Class I, Class R and Class Y shares are not subject to sales charges.

(4)2-25-99 for Class A shares, 12-8-03 for Class B, Class C and Class Y shares, 4-2-07 for Class E and Class I shares and 12-29-05 for Class R shares (the date on which shares were first acquired by shareholders).

Past performance is not necessarily indicative of future performance. Indexes are unmanaged. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

The Advantus Real Estate Securities Fund merged into the Ivy Real Estate Securities Fund on December 8, 2003. The performance shown for periods prior to this date is that of the Advantus Real Estate Securities Fund Class A shares, restated to reflect current sales charges applicable to Ivy Real Estate Securities Fund Class A shares. Performance has not been restated to reflect the fees and expenses applicable to the Ivy Real Estate Securities Fund. If these expenses were reflected, performance shown would differ.

SHAREHOLDER SUMMARY OF IVY REAL ESTATE SECURITIES FUND

Portfolio Highlights

On March 31, 2008, Ivy Real Estate Securities Fund had net assets totaling $400,226,631 invested in a diversified portfolio of:

92.47%	Domestic Common Stocks
5.72%	Cash and Cash Equivalents
1.81%	Foreign Common Stocks

Sector Weightings

As a shareholder of the Fund, for every $100 you had invested on March 31, 2008,
your Fund owned:

Shelter Stocks	$	89.83
Cash and Cash Equivalents	$	5.72
Miscellaneous Stocks(1)	$	2.30
Business Equipment and Services Stocks	$	2.15

(1)Includes $0.95 Consumer Services Stocks, $0.33 Energy Stocks, $0.74 Multi-Industry Stocks and $0.28 Utilities Stocks.

The Investments of Ivy Real Estate Securities Fund
March 31, 2008
COMMON STOCKS	Shares			Value
Business Equipment and Services - 2.15%
Brookfield Properties Corporation		375,200	$	7,245,112
Forest City Enterprises, Inc., Class A		36,778		1,353,430
				8,598,542
Coal - 0.33%
Sun Healthcare Group, Inc.		99,900		1,314,184
Hotels and Gaming - 0.95%
Gaylord Entertainment Company		43,200		1,308,528
Marriott International, Inc., Class A		72,800		2,501,408
				3,809,936
Multiple Industry - 0.74%
Cogdell Spencer Inc.		51,600		811,152
DuPont Fabros Technology, Inc.		129,600		2,137,104
				2,948,256
Real Estate Investment Trust - 89.83%
AMB Property Corporation		177,100		9,637,782
Acadia Realty Trust		127,500		3,079,125
Alexandria Real Estate Equities, Inc.		67,400		6,249,328
American Campus Communities, Inc.		141,213		3,863,588
Apartment Investment and Management Company,       Class A		107,317		3,843,022
AvalonBay Communities, Inc.		109,900		10,607,548
BRE Properties, Inc., Class A		77,500		3,530,900
BioMed Realty Trust, Inc.		109,112		2,606,686
Boston Properties, Inc.		178,600		16,443,702
Camden Property Trust		81,600		4,096,320
Corporate Office Properties Trust		193,487		6,503,098
Cousins Properties Incorporated		50,400		1,245,384
Developers Diversified Realty Corporation		163,000		6,826,440
Digital Realty Trust, Inc.		217,200		7,710,600
Douglas Emmett, Inc.		276,197		6,092,906
EastGroup Properties, Inc.		61,100		2,838,706
Entertainment Properties Trust		40,500		1,997,865
Equity Residential		281,400		11,675,286
Essex Property Trust, Inc.		103,800		11,831,124
Extra Space Storage Inc.		88,600		1,434,434
Federal Realty Investment Trust		96,300		7,506,585
General Growth Properties, Inc.		284,932		10,875,854
Gramercy Capital Corp.		81,000		1,695,330
Health Care Property Investors, Inc.		252,200		8,526,882
Health Care REIT, Inc.		109,300		4,932,709
Healthcare Realty Trust Incorporated		91,400		2,390,110
Hersha Hospitality Trust		220,500		1,991,115
Home Properties, Inc.		39,800		1,910,002
Host Hotels & Resorts, Inc.		559,647		8,909,580
iStar Financial Inc.		85,500		1,199,565
Kilroy Realty Corporation		120,800		5,932,488
Kimco Realty Corporation		311,700		12,209,289
LaSalle Hotel Properties		112,800		3,240,744
Liberty Property Trust		123,600		3,845,196
Macerich Company (The)		156,200		10,976,174
Maguire Properties, Inc.		91,500		1,309,365
Mid-America Apartment Communities, Inc.		68,600		3,419,024
National Retail Properties, Inc.		132,600		2,923,830
Nationwide Health Properties, Inc.		150,700		5,086,125
PS Business Parks, Inc.		82,500		4,281,750
ProLogis		471,265		27,738,658
Public Storage, Inc.		201,500		17,856,930
Regency Centers Corporation		114,000		7,382,640
SL Green Realty Corp.		91,000		7,413,770
Simon Property Group, Inc.		334,016		31,033,427
Strategic Hotels & Resorts, Inc.		72,100		946,673
Tanger Factory Outlet Centers, Inc.		68,400		2,631,348
Taubman Centers, Inc.		118,400		6,168,640
UDR, Inc.		110,300		2,704,556
Ventas, Inc.		193,895		8,707,824
Vornado Realty Trust		221,000		19,052,410
Washington Real Estate Investment Trust		78,100		2,610,102
				359,522,539
Utilities - Telephone - 0.28%
Crown Castle International Corp.*		33,100		1,141,619
TOTAL COMMON STOCKS - 94.28%			$	377,335,076
(Cost: $321,639,644)

SHORT-TERM SECURITIES	Principal Amount in Thousands			Value
Commercial Paper
Beverages - 1.36%
Coca-Cola Company (The),
2.2%, 4-14-08	$ 3,000			2,997,617
PepsiCo, Inc.,
2.16%, 4-30-08		2,454		2,449,730
				5,447,347
Capital Equipment - 1.00%
Illinois Tool Works Inc.,
2.35%, 4-1-08		4,000		4,000,000
Forest and Paper Products - 2.50%
Kimberly-Clark Worldwide Inc.,
2.18%, 4-8-08	10,000			9,995,761
Total Commercial Paper - 4.86%				19,443,108
United States Government Agency Obligations - 1.36%
Federal Home Loan Bank,
1.5%, 4-1-08		5,461		5,461,000
TOTAL SHORT-TERM SECURITIES - 6.22%			$	24,904,108
(Cost: $24,904,108)
TOTAL INVESTMENT SECURITIES - 100.50%			$	402,239,184
(Cost: $346,543,752)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.50%)				(2,012,553	)
NET ASSETS - 100.00%			$	400,226,631

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 REAL ESTATE SECURITIES FUND
     March 31, 2008
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $346,544) (Notes 1 and 3)	$	402,239
Cash		52
Receivables:
Investment securities sold		1,646
Dividends and interest		1,496
Fund shares sold		644
Prepaid and other assets		39
Total assets		406,116
LIABILITIES
Payable for investment securities purchased		3,786
Payable to Fund shareholders		1,490
Accrued management fee (Note 2)		299
Accrued shareholder servicing (Note 2)		164
Accrued service fee (Note 2)		61
Accrued accounting services fee (Note 2)		11
Accrued distribution fee (Note 2)		1
Other		77
Total liabilities		5,889
Total net assets	$	400,227
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	349,548
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		1,132
Accumulated undistributed net realized loss on investment transactions		(6,148	)
Net unrealized appreciation in value of investments		55,695
Net assets applicable to outstanding units of capital	$	400,227
Net asset value per share (net assets divided by shares outstanding):
Class A	$19.34
Class B	$19.15
Class C	$19.22
Class E	$19.36
Class I	$19.43
Class R	$19.35
Class Y	$19.35
Capital shares outstanding:
Class A		13,071
Class B		657
Class C		687
Class E		22
Class I		62
Class R		9
Class Y		6,191

See Notes to Financial Statements.

Statement of Operations
     IVY REAL ESTATE SECURITIES FUND
     For the Fiscal Year Ended March 31, 2008
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Dividends (net of foreign withholding taxes of $60)	$	12,360
Interest and amortization		460
Total income		12,820
Expenses (Note 2):
Investment management fee		4,738
Shareholder servicing:
Class A		1,320
Class B		115
Class C		91
Class E		5
Class I		3
Class R		––	*
Class Y		256
Service fee:
Class A		751
Class B		43
Class C		47
Class R		––	*
Class Y		423
Distribution fee:
Class A		47
Class B		127
Class C		142
Class E		1
Class R		––	*
Accounting services fee		153
Registration fees		110
Custodian fees		31
Audit fees		15
Legal fees		10
Other		189
Total expenses		8,617
Net investment income		4,203
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		15,420
Unrealized depreciation in value of investments during the period		(134,861	)
Net loss on investments		(119,441	)
Net decrease in net assets resulting from operations	$	(115,238	)

*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 fiscal year ended March 31,
	2008			2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	4,203		$	3,791
Realized net gain on investments		15,420			36,618
Unrealized appreciation (depreciation)		(134,861	)		57,001
Net increase (decrease) in net assets resulting from operations		(115,238	)		97,410
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A		(1,960	)		(1,898	)
Class B		(8	)		(––	)
Class C		(17	)		(––	)
Class E		(1	)		NA
Class I		(15	)		NA
Class R		(1	)		(1	)
Class Y		(1,363	)		(1,896	)
Realized gains on investment transactions:
Class A		(25,382	)		(13,023	)
Class B		(1,303	)		(719	)
Class C		(1,366	)		(855	)
Class E		(35	)		NA
Class I		(120	)		NA
Class R		(14	)		(5	)
Class Y		(12,133	)		(9,462	)
		(43,718	)		(27,859	)
Capital share transactions (Note 5)		(148,593	)		134,609
Total increase (decrease)		(307,549	)		204,160
NET ASSETS
Beginning of period		707,776			503,616
End of period	$	400,227		$	707,776
Undistributed net investment income	$	1,132		$	294

(1)See "Financial Highlights" on pages 294 - 300.

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 fiscal year ended March 31,												For the fiscal period ended				For the fiscal year ended
	2008				2007		2006			2005			3-31-04				7-31-03
Net asset value, beginning of period	$	26.14		$	23.11		$	18.13		$	16.99			$	13.42			$	11.93
Income (loss) from investment      operations:
Net investment income		0.19			0.10			0.15			0.15	(1)			0.62				0.48
Net realized and unrealized gain            (loss) on investments		(4.87	)		4.05			5.81			1.93	(1)			3.38				1.72
Total from investment. operations		(4.68	)		4.15			5.96			2.08				4.00				2.20
Less distributions from:
Net investment income		(0.15	)		(0.15	)		(0.18	)		(0.25	)			(0.24	)			(0.48	)
Capital gains		(1.97	)		(0.97	)		(0.80	)		(0.69	)			(0.19	)			(0.23	)
Total distributions		(2.12	)		(1.12	)		(0.98	)		(0.94	)			(0.43	)			(0.71	)
Net asset value, end of period	$	19.34		$	26.14		$	23.11		$	18.13			$	16.99			$	13.42
Total return (2)	- -18.13		%		18.09	%		33.53	%		12.09	%			29.78	%			19.65	%
Net assets, end of period       (in millions)	$253			$395			$256			$155				$44				$60
Ratio of expenses to average net       assets including expense waiver		1.67	%		1.57	%		1.64	%		1.67	%			1.48	% (3)(4)			1.46	%
Ratio of net investment income to       average net assets including       expense waiver		0.70	%		0.54	%		0.91	%		0.95	%			4.35	% (3)(4)			2.95	%
Ratio of expenses to average net       assets excluding expense waiver		1.67	% (5)		1.57	% (5)		1.64	% (5)		1.67	% (5)			1.49	% (3)(4)			1.46	% (5)
Ratio of net investment income to       average net assets excluding       expense waiver		0.70	% (5)		0.54	% (5)		0.91	% (5)		0.95	% (5)			4.34	% (3)(4)			2.95	% (5)
Portfolio turnover rate		27	%		35	%		35	%		48	%			35	%			48	%

(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.

(5)There was no waiver of expenses during the period.

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 fiscal year ended March 31,												For the period from 12-8-03 (1) to
	2008			2007			2006			2005			3-31-04
Net asset value, beginning of period	$	25.91		$	23.00		$	18.08		$	16.97		$	15.18
Income (loss) from investment operations:
Net investment income (loss)		(0.08	)		(0.09	)		0.01			(0.07	) (2)		0.07
Net realized and unrealized gain (loss) on             investments		(4.79	)		3.97			5.72			1.95	(2)		2.08
Total from investment operations		(4.87	)		3.88			5.73			1.88			2.15
Less distributions from:
Net investment income		(0.01	)		(0.00	)		(0.01	)		(0.08	)		(0.17	)
Capital gains		(1.88	)		(0.97	)		(0.80	)		(0.69	)		(0.19	)
Total distributions		(1.89	)		(0.97	)		(0.81	)		(0.77	)		(0.36	)
Net asset value, end of period	$	19.15		$	25.91		$	23.00		$	18.08		$	16.97
Total return	- -18.98		%		16.93	%		32.19	%		10.91	%		14.46	%
Net assets, end of period (in millions)	$13			$22			$15			$10			$2
Ratio of expenses to average net assets		2.71	%		2.57	%		2.66	%		2.73	%		3.02	% (3)
Ratio of net investment income (loss) to average net       assets		- -0.24	%		- -0.42	%		0.01	%		- -0.24	%		- -5.40	% (3)
Portfolio turnover rate		27	%		35	%		35	%		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 fiscal year ended March 31,												For the period from 12-8-03 (1) to
	2008			2007			2006			2005			3-31-04
Net asset value, beginning of period	$	26.01		$	23.04		$	18.10		$	16.99		$	15.18
Income (loss) from investment operations:
Net investment income (loss)		0.00			(0.06	)		0.03			0.12			0.08
Net realized and unrealized gain (loss) on             investments		(4.85	)		4.00			5.73			1.82			2.09
Total from investment operations		(4.85	)		3.94			5.76			1.94			2.17
Less distributions from:
Net investment income		(0.02	)		(0.00	)		(0.02	)		(0.14	)		(0.17	)
Capital gains		(1.92	)		(0.97	)		(0.80	)		(0.69	)		(0.19	)
Total distributions		(1.94	)		(0.97	)		(0.82	)		(0.83	)		(0.36	)
Net asset value, end of period	$	19.22		$	26.01		$	23.04		$	18.10		$	16.99
Total return	- -18.84		%		17.17	%		32.38	%		11.21	%		14.59	%
Net assets, end of period (in millions)	$13			$26			$17			$10			$2
Ratio of expenses to average net assets		2.50	%		2.39	%		2.46	%		2.49	%		2.82	% (2)
Ratio of net investment income (loss) to average net       assets		0.03	%		- -0.28	%		0.15	%		0.14	%	- 4.46		% (2)
Portfolio turnover rate		27	%		35	%		35	%		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 E Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	26.37
Loss from investment operations:
Net investment loss			(0.32	) (2)
Net realized and unrealized loss on investments			(4.78	) (2)
Total from investment operations			(5.10	)
Less distributions from:
Net investment income			(0.03	)
Capital gains			(1.88	)
Total distributions			(1.91	)
Net asset value, end of period		$	19.36
Total return (3)		- -19.55		%
Net assets, end of period (in thousands)		$425
Ratio of expenses to average net assets			2.77	% (4)
Ratio of net investment loss to average net assets			- -1.47	% (4)
Portfolio turnover rate			27	% (5)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

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

(4)Annualized.

(5)For the twelve months ended March 31, 2008.

See Notes to Financial Statements.

Financial Highlights
     IVY REAL ESTATE SECURITIES FUND
     Class I Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	26.38
Income (loss) from investment operations:
Net investment income			0.18	(2)
Net realized and unrealized loss on investments			(4.92	) (2)
Total from investment operations			(4.74	)
Less distributions from:
Net investment income			(0.24	)
Capital gains			(1.97	)
Total distributions			(2.21	)
Net asset value, end of period		$	19.43
Total return		- -18.17		%
Net assets, end of period (in millions)		$1
Ratio of expenses to average net assets			1.17	% (3)
Ratio of net investment income to average net assets			0.75	% (3)
Portfolio turnover rate			27	% (4)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(4)For the twelve months ended March 31, 2008.

See Notes to Financial Statements.

Financial Highlights
     IVY REAL ESTATE SECURITIES FUND
     Class R Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:

	For the fiscal year ended March 31,						For the period from 12-29-05 (1) to
	2008			2007			3-31-06
Net asset value, beginning of period	$	26.14		$	23.11			$	20.55
Income (loss) from investment operations:
Net investment income (loss)		0.12			0.15				(0.20	)
Net realized and unrealized gain (loss) on investments		(4.81	)		3.98				2.79
Total from investment operations		(4.69	)		4.13				2.59
Less distributions from:
Net investment income		(0.13	)		(0.13	)			(0.03	)
Capital gains		(1.97	)		(0.97	)			(0.00	)
Total distributions		(2.10	)		(1.10	)			(0.03	)
Net asset value, end of period	$	19.35		$	26.14			$	23.11
Total return	- -18.12		%		17.98	%			12.59	%
Net assets, end of period (in thousands)	$175			$158				$113
Ratio of expenses to average net assets		1.68	%		1.68	%			1.73	% (2)
Ratio of net investment income (loss) to average net assets		0.26	%		0.43	%			- -3.64	% (2)
Portfolio turnover rate		27	%		35	%			35	% (3)

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the 12 months ended March 31, 2006.

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 fiscal year ended March 31,												For the period from 12-8-03 (1) through
	2008			2007			2006			2005			3-31-04
Net asset value, beginning of period	$	26.15		$	23.12		$	18.14		$	16.99		$	15.18
Income (loss) from investment operations:
Net investment income		0.36			0.23			0.27			0.26	(2)		0.04
Net realized and unrealized gain (loss) on             investments		(4.99	)		3.97			5.75			1.87	(2)		2.15
Total from investment operations		(4.63	)		4.20			6.02			2.13			2.19
Less distributions from:
Net investment income		(0.20	)		(0.20	)		(0.24	)		(0.29	)		(0.19	)
Capital gains		(1.97	)		(0.97	)		(0.80	)		(0.69	)		(0.19	)
Total distributions		(2.17	)		(1.17	)		(1.04	)		(0.98	)		(0.38	)
Net asset value, end of period	$	19.35		$	26.15		$	23.12		$	18.14		$	16.99
Total return	- -17.89		%		18.32	%		33.86	%		12.40	%		14.78	%
Net assets, end of period (in millions)	$120			$265			$216			$148			$91
Ratio of expenses to average net assets		1.38	%		1.37	%		1.39	%		1.44	%		1.60	% (3)
Ratio of net investment income to average net assets		1.19	%		0.94	%		1.27	%		1.59	%		0.14	% (3)
Portfolio turnover rate		27	%		35	%		35	%		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.

Managers' Discussion of Ivy Bond Fund
     March 31, 2008

The Ivy Bond Fund is subadvised by Advantus Capital Management, Inc.

Below, Thomas B. Houghton, CFA, David W. Land, CFA, and Christopher R. Sebald, CFA, portfolio managers of the Ivy Bond Fund, discuss positioning, performance and results for the fiscal year ended March 31, 2008. Mr. Houghton has 15 years of industry experience, Mr. Land has 17 years of industry experience and Mr. Sebald has 19 years of industry experience.

MATURITY
SHORT	INTER	LONG
X			HIGH	CREDIT QUALITY
			MEDIUM
			LOW

This diagram shows the Fund's fixed-income investment style by displaying the average credit quality of the bonds owned and the Fund's interest rate sensitivity, as measured by average maturity. Shaded areas reflect quarterly data for the past three years. Source: Morningstar

The Fund declined 1.51 percent (Class A shares at net asset value) for the 12 months ended March 31, 2008, underperforming both its benchmark and peer group. The Citigroup Broad Investment Grade Index (reflecting the performance of securities that generally represent the bond market) climbed 8.41 percent, while the Lipper Corporate Debt Funds A-Rated Universe Average (reflecting the universe of funds with similar investment objectives) returned 3.25 percent for the same period. Please note that Fund returns include applicable fees and expenses while index returns do not include any such fees.

Lack of agency securities

The Fund's performance was influenced mainly by its lack of holdings in agency pass-through securities. Agency mortgage-backed securities outperformed all other mortgage and structured-finance sectors, particularly in the second half of the period. Part of this outperformance was the result of actions taken by the Federal Reserve. In response to the liquidity crisis, the Fed began making collateralized loans to banks and was willing to accept agency pass-throughs as a form of collateral. This action provided support to pass-throughs that hadn't been there previously. The decline in the housing market and subsequent losses in subprime securities caused all non-agency securities to underperform pass-throughs from the Government National Mortgage Association (GNMA), Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (FHLC), regardless of the credit fundamentals. The sub-prime impact on the entire fixed-income market was surprising and swift, and as losses at major banks mounted, funding became scarce and prices suffered.

As the fixed-income market began to deteriorate, even many of the highest-rated securities and money market strategies (once believed safe) were called into question. Several thousand collateralized debt obligation securities (CDOs) were downgraded, putting further pressure on the markets. Because many of these securities originally were rated AAA, their downgrade and higher probability of default was a shock to investors and caused price declines and avoidance of nearly all structured-finance securities. Many of these CDOs were held in investment vehicles that received funding in the money markets sector. As a result, funding in general dried up and trading volume for fixed-income securities fell significantly.

As the markets deteriorated and consumer and residential lending became scarce, we grew concerned about the economy's ability to avoid a recession. As a result, we expected the Fed to cut its target interest rate more than the market estimated; we expected longer-term rates to fall, as well. Therefore, we positioned the Fund longer in duration in an effort to take advantage of falling rates.

Portfolio Characteristics
As of March 31, 2008
Average maturity	7.20 years
Effective duration	4.42 years
Weighted average bond rating	AA

Subprime fears mattered more than fundamentals

Throughout the year, we continued to employ a relatively value-oriented trading strategy based on our fundamental forecast for individual securities. While this strategy generated strong results in the beginning of the year, it was less successful later as the markets became overwhelmed by subprime contagion risk and forced selling of securities by leveraged institutions.

The Fund did not own any CDOs. It did hold positions in non-agency residential mortgage-backed securities, including subprime and ALT-A. However, our focus on the higher parts of the capital structure, the highest quality originators and detailed underwriting benefited the Fund. At the same time, the Fund's emphasis on mortgage-related securities - including commercial mortgage-backed securities, asset-backed securities and non-agency residential mortgage securities - negatively affected performance. Such securities, even though not fundamentally affected by subprime, were caught up in the market contagion and performed poorly.

Our outlook

We expect more cuts in the federal funds rate in coming months. Consumer spending already appears to be slowing and unemployment claims are rising. We believe the "pull-back" in lending terms is likely to cut deeper into the economy as consumers and firms face potentially higher lending costs and less favorable terms. While this forecast anticipates a greater degree of stress in the financial markets, we expect the investment-grade fixed-income sector to reach some level of stability in the coming months.

We believe there likely will be a slow recovery in the highest quality sectors of the market as funding and liquidity conditions improve with the injection of money from central banks around the world. Additionally, in our opinion, the recapitalization of the large-bank sector provides a much better credit story going forward for these institutions, even though their earning picture remains unclear.

As with any mutual fund, the value of the Fund's shares will change, and you could lose money on your investment. Fixed-income securities are subject to interest rate risk and, as such, the Fund's net asset value may fall as interest rates rise.

Certain U.S. government securities in which the Fund may invest, such as Treasury securities and securities issued by the Government National Mortgage Association (Ginnie Mae), are backed by the full faith and credit of the U.S. government. However, other U.S. government securities in which the Fund may invest, such as securities issued by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Banks (FHLB) are not backed by the full faith and credit of the U.S. government, are not insured or guaranteed by the U.S. government and, instead, may be supported only by the right of the issuer to borrow from the U.S. Treasury or by the credit of the issuer.

These and other risks are more fully described in the Fund's prospectus.

The Fund's performance noted above is at net asset value (NAV), and does not include the effect of any applicable sales charges. If reflected, the sales charge would reduce the performance noted.

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

Comparison of Change in Value of
$10,000 Investment

Ivy Bond Fund, Class A Shares(1)	$	13,892
Citigroup Broad Investment Grade Index	$	17,017
Lipper Corporate Debt Funds A-Rated Universe Average	$	15,295

		IVY BOND FUND, CLASS A	CITIGROUP BROAD INVESTMENT GRADE	LIPPER CORPORATE DEBT FUNDS A RATED UNIVERSE
		SHARES	INDEX	AVERAGE
SEPT	1998	9,425	10,000	10,000
SEPT	1999	9,177	9,973	9,776
SEPT	2000	9,639	10,664	10,308
SEPT	2001	10,958	12,057	11,492
SEPT	2002	11,824	13,066	12,272
SEPT	2003	12,517	13,783	13,147
SEPT	2004	12,970	14,205	13,586
MARCH	2005	13,030	14,379	13,725
MARCH	2006	13,257	14,725	13,966
MARCH	2007	14,105	15,698	14,812
MARCH	2008	13,892	17,017	15,295

Please note that the performance of the Fund's other share classes will be greater or less than the performance shown above for Class A based on the differences in loads and fees paid by shareholders investing in the different classes.

(1)The value of the investment in the Fund is impacted by the sales load at the time of the investment and by the ongoing expenses of the Fund and assumes reinvestment of dividends and distributions.

Average Annual Total Return(2)
	Class A	Class B	Class C	Class E	Class I	Class Y
1-year period ended 3-31-08	- -7.17%	- -6.36%	- -2.31%	––	––	- -1.60%
5-year period ended 3-31-08	1.48%	––	––	––	––	––
10-year period ended 3-31-08	3.82%	––	––	––	––	––
Since inception of Class (3) through 3-31-08	––	0.88%	1.40%	––	––	2.33%
Cumulative return since inception of Class(3) through 3-31-08	––	––	––	- -7.49%	- -1.17%	––

(2)Data quoted is past performance and is based on deduction of the maximum applicable sales load for each of the periods. Current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Please visit www.ivyfunds.com for the Fund's most recent month-end performance. Class A and Class E shares carry a maximum front-end sales load of 5.75%. Class B and Class C shares carry maximum contingent deferred sales charges (CDSC) of 5% and 1%, respectively. (Accordingly, the Class C shares reflect no CDSC since it only applies to Class C shares redeemed within twelve months after purchase.) Class I and Class Y shares are not subject to sales charges.

(3)12-08-03 for Class B, Class C and Class Y shares, and 4-02-07 for Class E and Class I shares (the date on which shares were first acquired by shareholders).

Past performance is not necessarily indicative of future performance. Indexes are unmanaged. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

The Advantus Bond Fund merged into the Ivy Bond Fund on December 8, 2003. The performance shown for periods prior to this date is that of the Advantus Bond Fund Class A shares, restated to reflect current sales charges applicable to Ivy Bond Fund Class A shares. Performance has not been restated to reflect the fees and expenses applicable to the Ivy Bond Fund. If these expenses were reflected, performance shown would differ.

SHAREHOLDER SUMMARY OF IVY BOND FUND

Portfolio Highlights

On March 31, 2008, Ivy Bond Fund had net assets totaling $103,441,670 invested in a diversified portfolio of:

92.36%	Bonds
7.21%	Cash and Cash Equivalents
0.43%	Preferred Stocks

Sector Weightings

As a shareholder of the Fund, for every $100 you had invested on March 31, 2008,
your Fund owned:

Corporate Bonds	$	51.10
United States Government Treasury Obligations	$	26.86
United States Government Agency Mortgage-Backed Obligations	$	13.91
Cash and Cash Equivalents	$	7.21
United States Government Agency Obligations	$	0.49
Preferred Stocks	$	0.43

Quality Weightings

On March 31, 2008, the breakdown of bonds (by ratings) held by the Fund was as follows:

AAA	57.60	%
AA	2.99	%
A	4.19	%
BBB	18.87	%
BB	5.21	%
B	0.23	%
Non-rated	3.27	%
Cash and Cash Equivalents and Equities	7.64	%

Ratings reflected in the wheel are taken from the following sources in order of preference: Standard & Poor's and Moody's.

The Investments of Ivy Bond Fund
March 31, 2008
PREFERRED STOCKS	Shares			Value
Real Estate Investment Trust
PS Business Parks, Inc., 7.0% Cumulative		10,500	$	229,320
Public Storage, Inc., 6.25% Cumulative		10,500		214,515
TOTAL PREFERRED STOCKS - 0.43%			$	443,835
(Cost: $519,889)

CORPORATE DEBT SECURITIES	Principal Amount in Thousands
Aluminum - 0.19%
Steelcase Inc.,
6.5%, 8-15-11		$ 185	198,390
Asset-Backed Securities - 2.85%
ABFS Mortgage Loan Trust 2002-4,
7.423%, 12-15-33 (A)		120	88,837
Associates Manufactured Housing Contract       Pass-Through Certificates,
7.725%, 6-15-28		103	105,721
C-Bass 2006-CB2 Trust,
5.86%, 12-25-36		530	447,542
C-Bass 2006-MH1 Trust:
6.24%, 10-25-36 (A)(B)		104	107,829
6.25%, 10-25-36 (A)(B)		170	173,981
Centex Home Equity Loan Trust 2005-C,
5.048%, 6-25-35 (A)		370	321,726
Citibank Credit Card Issuance Trust, Class 2005-C1,
5.5%, 3-24-17		200	162,574
CountryPlace Manufactured Housing Contract       Trust 2005-1,
5.2%, 12-15-35 (A)(C)		300	226,781
Green Tree Financial Corporation:
6.4%, 10-15-18		56	57,163
7.35%, 5-15-27		32	33,185
Home Equity Loan Trust 2003-HS2,
5.09%, 7-25-33 (A)		26	22,942
MBNA Credit Card Master Note Trust,
6.8%, 7-15-14		325	299,964

Origen Manufactured Housing Contract:       Trust 2004-A,
5.7%, 1-15-35		100		93,461
Trust 2004-B,
5.73%, 11-15-35		50		44,575
Trust 2005-A:
4.49%, 5-15-18		133		133,313
5.86%, 6-15-36 (A)		120		113,324
Trust 2005-B,
5.605%, 5-15-22		80		79,555
Vanderbilt Mortgage and Finance, Inc.,
4.125%, 3-7-28 (A)		147		146,611
WFS Financial 2005-2 Owner Trust,
4.39%, 11-19-12		144		144,887
Wells Fargo Mortgage Backed Securities 2003-9 Trust,
5.25%, 8-25-33 (B)		269		145,238
				2,949,209
Banks - 0.47%
PNC Preferred Funding Trust III,
8.7%, 2-19-49 (A)(B)		500		487,500
Broadcasting - 0.46%
Cox Communications, Inc.,
7.125%, 10-1-12		450		476,752
Business Equipment and Services - 0.97%
HSBC Finance Corporation,
5.7%, 6-1-11		400		402,832
International Lease Finance Corporation:
6.375%, 3-25-13		360		359,874
5.625%, 9-20-13		250		244,851
				1,007,557
Chemicals - Specialty - 0.56%
National Collegiate Trust 1997-S2 (The),
7.24%, 9-20-14		136		113,427
Valspar Corporation (The),
6.05%, 5-1-17		500		468,445
				581,872
Computers - Peripherals - 0.29%
Intuit Inc.,
5.75%, 3-15-17		310		300,515
Collateralized Mortgage Obligations - 5.07%
Banc of America:
Alternative Loan Trust 2005-10:
5.66714%, 11-25-35 (A)		278		205,589
5.66714%, 11-25-35 (A)		134		93,826
Alternative Loan Trust 2005-12:
5.80926%, 1-25-36 (A)		297		212,678
5.80926%, 1-25-36 (A)		215		94,322
Alternative Loan Trust 2006-  4,
6.22473%, 5-25-46 (A)		321		248,862
Alternative Loan Trust 2006-8,
6.25061%, 11-25-46 (A)		143		40,799
Mortgage 2007-1 Trust:
6.0%, 3-25-37		245		221,094
6.0%, 3-25-37		168		122,673
Mortgage Trust 2004-7,
5.75%, 8-25-34		85		78,276
Banco Hipotecario Nacional,
7.916%, 7-25-09 (C)(F)		7		74
BlackRock Capital Finance,
7.75%, 9-25-26 (B)		98		78,169
Chase Mortgage Finance Trust, Series 2003-S11,
5.5%, 10-25-33		113		107,690
CitiMortgage Alternative Loan Trust, Series 2007-A7:
6.23759%, 7-25-37 (A)		154		30,187
6.25%, 7-25-37		442		377,877
Credit Suisse First Boston Mortgage Securities Corp.,
6.0%, 11-25-18		39		38,795
Global Mortgage Securitization 2005-A Ltd. and       Global Mortgage Securitization 2005-A LLC:
5.25%, 4-25-32		184		161,928
5.39334%, 4-25-32 (A)		272		163,663
Global Mortgage Securitization Ltd. and Global       Mortgage Securitization, LLC:
5.25%, 11-25-32 (C)		281		263,849
5.25%, 11-25-32 (C)		241		228,441
J.P. Morgan Mortgage Trust:
2005-S2,
5.67279%, 9-25-35 (A)		503		377,341
2006-S3,
6.5%, 8-25-36		395		362,979
Lehman XS Trust, Series 2005-8,
5.69%, 12-25-35		585		568,150
MASTR Asset Securitization Trust 2003-10,
5.5%, 11-25-33	175			172,669
Mellon Residential Funding,
6.75%, 6-25-28		35		35,205
RALI Series 2003-QS10 Trust,
5.75%, 5-25-33		240		185,612
Structured Asset Securities Corporation,
5.63%, 5-25-34 (A)		175		145,582
Wells Fargo Alternative Loan 2007-PA3 Trust,
6.20176%, 7-25-37 (A)		871		630,993
				5,247,323
Conduit - 11.19%
Banc of America Commercial Mortgage Inc.,       Commercial Mortgage Pass-Through Certificates:
Series 2001-1,
6.125%, 4-15-36 (B)		380		337,795
Series 2002-2,
6.2%, 7-11-43 (B)		275		240,365
Series 2005-6,
5.18056%, 9-10-47(A)		350		348,211
Banc of America Commercial Mortgage Trust 2007-1,
5.451%, 1-15-49		500		485,945
Bear Stearns Commercial Mortgage Securities Inc.,       Series 1999-WF2:
6.0%, 7-15-31 (B)		500		347,041
6.0%, 7-15-31 (B)		100		82,074
Bear Stearns Commercial Mortgage Securities Trust:
2004-PWR4,
5.46799%, 6-11-41 (A)	1,500			1,527,422
2002-TOP6,
6.0%, 10-15-36 (B)		320		233,373
Bear Stearns Mortgage Funding Trust 2006-SL6,
3.19875%, 1-25-37 (A)		265		1,225
CD 2006-CD2 Mortgage Trust,
5.80516%, 1-15-46 (A)(C)		710		597,825
CD 2007-CD4 Commercial Mortgage Trust,
5.883%, 12-11-49 (C)		480		202,725
CHL Mortgage Pass-Through Trust 2004-J4,
5.25%, 5-25-34		683		470,248
COMM 2006-CNL2:
5.57%, 2-5-19 (A)(B)		725		616,853
5.57%, 2-5-19 (A)(B)		95		84,351
Capital One Multi-asset Execution Trust,
5.75%, 7-15-20		295		296,047
Commercial Mortgage Asset Trust,
6.0%, 11-17-32		225		163,701
Discover Card Execution Note Trust,
5.65%, 3-16-20		385		384,380
First Horizon Mortgage Pass-Through Trust 2003-8,
5.12905%, 10-25-33 (A)		94		51,812
GE Capital Commercial Mortgage Corp. 2002-2,
6.039%, 8-11-36 (B)		565		513,472
GE Commercial Mortgage Corporation,       Series 2007-C1 Trust,
5.543%, 12-10-49 (A)		340		332,479
GS Mortgage Securities Corporation II, Commercial       Mortgage Pass-Through Certificates,       Series 2001-LI B,
6.733%, 2-14-16 (B)		225		246,926
Hilton Hotel Pool Trust:
3.61938%, 10-3-15 (A)(B)		790		791,098
7.653%, 10-3-15 (B)		430		477,669
Hometown Commercial Capital, LLC       Hometown Commercial Mortgage       Pass-Through Notes 2006-1,
5.506%, 11-11-38 (C)		452		436,845
Hometown Commercial Trust 2007-1,       Commercial Mortgage-Backed Notes,       Series 2007-1,
6.057%, 4-11-17 (C)		470		417,188
Multi Security Asset Trust LP, Commercial Mortgage-       Backed Securities Pass-Through Certificates,       Series 2005-RR4:
1.1548%, 11-28-35 (Interest Only) (A)(C)	4,837			81,621
5.88%, 11-28-35 (A)(C)		155		60,498
5.88%, 11-28-35 (A)(C)		105		46,233
Nomura Asset Securities Corporation, Commercial       Mortgage Pass-Through Certificates,       Series1998-D6,
6.0%, 3-15-30 (B)		500		436,240
Wachovia Bank Commercial Mortgage Trust (The),
4.942%, 11-15-34 (B)		285		222,170
Wachovia Bank Commercial Mortgage Trust       Commercial Mortgage Pass-Through Certificates:
Series 2006-C26,
6.011%, 6-15-45 (A)		450		459,184
Series 2007- C31,
5.509%, 4-15-47		595		579,112
				11,572,128
Construction Materials - 0.96%
Crane Co.,
6.55%, 11-15-36		540		501,934
USG Corporation:
6.3%, 11-15-16		400		316,000
7.75%, 1-15-18		200		178,000
				995,934
Electronic Components - 0.36%
Tyco Electronics Ltd.:
6.55%, 10-1-17 (B)		190		199,231
7.125%, 10-1-37 (B)		165		172,198
				371,429
Finance Companies - 15.71%
Allied Capital Corporation,
6.625%, 7-15-11		685		719,544
American Capital Strategies, Ltd.,
6.85%, 8-1-12		435		429,988
Asset Securitization Corporation:
7.20838%, 2-14-43 (A)		170		146,181
1.60556%, 10-13-26 (Interest Only) (A)(B)		926		31,692
CSAB Mortgage-Backed Trust 2006-2,
6.08%, 9-25-36 (A)		650		458,450
CSFB Commercial Mortgage Trust 2003-C4,
5.322%, 8-15-36 (A)(B)		500		355,092
CWHEQ Home Equity Loan Trust:
Series 2006-S6,
5.962%, 3-25-34		210		143,782
Series 2007-S2,
5.934%, 5-25-37		580		370,226
Capital Auto Receivables Asset Trust:       2006-1,
7.16%, 1-15-13 (B)		245		250,679
2007-1,
6.57%, 9-16-13 (B)		625		567,189
2007-2,
8.3%, 2-18-14 (B)		275		274,768
2007-3,
8.0%, 3-17-14 (B)		480		451,840
Capmark Financial Group Inc.:
5.875%, 5-10-12 (B)		540		342,243
6.3%, 5-10-17 (B)		200		119,989
CarMax Auto Owner Trust 2007-3,
7.58%, 3-17-14		380		364,639
Cendant Mortgage Corporation and Bishop's       Gate Residential Mortgage Trust,
6.25%, 6-25-32		117		79,453
Colonial Bank, N.A.,
6.375%, 12-1-15		400		344,864
ERAC USA Finance Company:
5.9%, 11-15-15 (B)		265		236,673
7.0%, 10-15-37 (B)		225		184,966
FirstEnergy Generation Corp.,
6.85%, 6-1-34		295		307,980
Flagstar Home Equity Loan Trust 2007-1,
5.997%, 1-25-35 (A)(C)		415		262,165
Ford Credit Auto Owner Trust:       2006-B,
7.12%, 2-15-13 (B)		140		129,746
2006-C,
6.89%, 5-15-13		200		188,561
2007-A,
7.05%, 12-15-13 (B)		175		153,419
Fund American Companies, Inc.,
5.875%, 5-15-13		560		583,971
GMAC LLC,
6.625%, 5-15-12		320		242,155
GMACM Home Equity Loan Trust:       2006-HE3,
6.088%, 10-25-36 (A)		485		278,173
2007-HE1,
5.952%, 8-25-37 (A)		570		354,606
Goldman Sachs Capital I,
6.345%, 2-15-34		5		4,329
J.P. Morgan Alternative Loan Trust 2006-A7,
5.75%, 12-25-36 (A)		645		525,440
J.P. Morgan Chase Commercial Mortgage       Securities Trust:
2006-LDP8,
5.37%, 5-15-45	1,000			971,402
2007-LDP11,
6.00724%, 6-15-49 (A)	1,500			1,498,294
J.P. Morgan Mortgage Acquisition Trust:       2006-CW2,
6.337%, 8-25-36 (A)		590		454,695
2006-WF1,
6.41%, 7-25-36 (A)	1,095			735,928
JPMorgan Auto Receivables Trust 2007-A,
7.09%, 2-15-14 (C)		311		296,311
JPMorgan Chase Capital XVIII,
6.95%, 8-17-36		325		299,421
Lazard Group LLC,
6.85%, 6-15-17		750		702,784
Morgan Stanley Capital I Trust 2004-TOP15,
5.03%, 6-13-41	1,000			978,310
Morgan Stanley Capital I, Inc., Commercial       Mortgage Pass-Through Certificates,       Series 1998-XL2,
6.6505%, 10-3-34 (A)		500		491,142
RASC Series 2003-KS10 Trust,
6.41%, 12-25-33		94		54,184
Symetra Financial Corporation,
8.3%, 10-15-37 (B)		500		471,055
TimberStar Trust I,
6.2082%, 10-15-36 (B)		460		390,209
				16,246,538
Hospital Supply and Management - 0.92%
Laboratory Corporation of America Holdings:
5.5%, 2-1-13		215		214,442
5.625%, 12-15-15		285		282,040
UnitedHealth Group,
6.875%, 2-15-38		470		449,063
				945,545
Household - General Products - 0.63%
Estee Lauder Companies Inc. (The),
6.0%, 5-15-37		670		646,741
Insurance - Life - 0.70%
StanCorp Financial Group, Inc.:
6.875%, 10-1-12		450		459,896
6.9%, 5-29-67		300		266,764
				726,660
Insurance - Property and Casualty - 1.34%
Commerce Group, Inc. (The),
5.95%, 12-9-13		615		632,148
Liberty Mutual Holding Company Inc.,
7.8%, 3-15-37 (C)		360		303,567
Willis North America Inc.,
6.2%, 3-28-17		455		454,375
				1,390,090
Petroleum - Domestic - 1.53%
Buckeye Partners, L.P.,
6.05%, 1-15-18		405		413,948
Plains Exploration & Production Company,
7.75%, 6-15-15		750		748,125
Williams Partners L.P. and Williams Partners       Finance Corporation,
7.25%, 2-1-17		420		422,100
				1,584,173
Real Estate Investment Trust - 2.69%
Camden Property Trust,
4.7%, 7-15-09		600		596,062
Equity One, Inc.:
6.25%, 1-15-17		285		256,682
6.0%, 9-15-17		185		163,503
Healthcare Realty Trust Incorporated,
5.125%, 4-1-14		660		613,044
Highwoods Realty Limited Partnership,
5.85%, 3-15-17		405		346,179
Nationwide Health Properties, Inc.,
6.0%, 5-20-15		440		432,002
Realty Income Corporation,
6.75%, 8-15-19		395		374,867
				2,782,339
Security and Commodity Brokers - 1.28%
Janus Capital Group Inc.:
6.25%, 6-15-12		315		320,159
6.7%, 6-15-17		300		292,305
Jefferies Group, Inc.,
6.25%, 1-15-36		400		302,844
Lehman Brothers Holdings Inc.,
6.5%, 7-19-17		430		408,626
				1,323,934
Timesharing and Software - 0.67%
Fiserv, Inc.:
6.125%, 11-20-12		340		350,515
6.8%, 11-20-17		335		346,434
				696,949
Utilities - Electric - 0.68%
MidAmerican Energy Holdings Company,
6.125%, 4-1-36		475		459,225
Pennsylvania Electric Company,
5.125%, 4-1-14		250		241,250
				700,475
Utilities - Gas and Pipeline - 1.23%
American Water Capital Corp.,
6.593%, 10-15-37 (B)		500		500,827
NGPL PipeCo LLC,
7.768%, 12-15-37 (B)		745		765,707
				1,266,534
Utilities - Telephone - 0.34%
Nextel Communications, Inc.,
6.875%, 10-31-13		440		347,600
TOTAL CORPORATE DEBT SECURITIES - 51.09%			$	52,846,187
(Cost: $59,448,677)
UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS
Agency Obligations - 0.49%
Federal National Mortgage Association,
4.25%, 5-15-09		500		511,092

Mortgage-Backed Obligations - 13.91%
Federal Home Loan Mortgage Corporation Fixed Rate       Participation Certificates:
3.5%, 2-15-30		105		102,501
6.5%, 9-1-32		194		204,735
6.0%, 11-1-33		415		428,132
5.5%, 5-1-34		167		170,014
5.5%, 5-1-34		112		113,794
5.5%, 6-1-34	1,382			1,398,797
5.0%, 9-1-34		39		38,367
5.5%, 9-1-34		137		138,470
5.5%, 10-1-34		308		312,376
5.5%, 7-1-35		396		400,366
5.5%, 7-1-35		189		190,936
5.5%, 10-1-35		514		520,828
7.0%, 12-1-37		658		691,524
Federal National Mortgage Association Fixed Rate       Pass-Through Certificates:
5.5%, 1-1-17		150		153,597
6.0%, 9-1-17		85		88,150
5.5%, 3-1-18		95		97,320
5.0%, 6-1-18		351		355,985
5.0%, 7-1-18		124		126,273
7.5%, 5-1-31		109		119,044
7.0%, 9-1-31		35		37,736
7.0%, 11-1-31		74		78,813
6.5%, 12-1-31		46		48,561
7.0%, 2-1-32		65		69,621
7.0%, 3-1-32		76		81,343
6.5%, 4-1-32		21		21,602
6.5%, 5-1-32		21		22,110
6.5%, 7-1-32		56		59,155
6.5%, 8-1-32		48		49,955
6.5%, 8-1-32		47		49,618
6.5%, 9-1-32		84		88,762
6.5%, 9-1-32		33		35,201
6.0%, 10-1-32		109		112,978
6.5%, 10-1-32		97		102,745
6.0%, 11-1-32		115		119,718
6.0%, 3-1-33	86			89,046
5.5%, 4-1-33		150		152,146
6.0%, 4-1-33		175		179,832
5.5%, 5-1-33		108		109,296
6.0%, 10-1-33		157		162,701
5.5%, 1-1-34		104		105,188
5.5%, 1-1-34		103		104,579
6.0%, 1-1-34		410		422,026
5.5%, 2-1-34		235		237,203
5.5%, 3-1-34		146		148,439
5.5%, 3-1-34		63		64,178
5.5%, 4-1-34		154		156,409
5.5%, 4-1-34		46		46,606
5.0%, 5-1-34		68		67,236
5.5%, 5-1-34		123		124,792
5.5%, 11-1-34	1,266			1,281,061
6.0%, 11-1-34		648		666,024
5.5%, 2-1-35		178		179,593
6.0%, 4-1-35		975		998,766
5.0%, 7-1-35		193		191,487
5.0%, 7-1-35		97		96,641
5.0%, 7-1-35		83		82,322
5.0%, 7-1-35		45		44,713
5.5%, 8-1-35		113		114,432
5.5%, 10-1-35		854		867,349
Government National Mortgage Association Agency       REMIC/CMO:
0.97826%, 6-17-45 (Interest Only) (A)	4,906			210,004
5.5%, 4-1-35		845		861,372
				14,392,568
Treasury Inflation Protected Obligation - 1.32%
United States Treasury Note,
1.875%, 7-15-13 (D)	1,100			1,362,962
Treasury Obligations - 25.54%
United States Treasury Bond,
5.375%, 2-15-31	3,200			3,703,251
United States Treasury Notes:
3.125%, 11-30-09	8,900			9,123,888
4.125%, 8-31-12	1,500			1,610,157
3.625%, 12-31-12	6,615			6,977,793
4.75%, 8-15-17 (E)	2,525			2,793,872
4.25%, 11-15-17	2,070			2,209,079
				26,418,040
TOTAL UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS - 41.26%			$	42,684,662
(Cost: $41,477,049)
SHORT-TERM SECURITIES
Aluminum - 0.97%
Alcoa Incorporated,
3.35%, 4-17-08	1,000			998,511
Finance Companies - 1.45%
Prudential Funding LLC,
2.25%, 4-28-08	1,500			1,497,469
Resturaunts - 4.52%
Starbucks Corporation,
3.35%, 4-1-08	4,680			4,680,000
Security and Commodity Brokers - 1.45%
American Express Credit Corp.,
2.71%, 4-28-08	1,500			1,496,951
TOTAL SHORT-TERM SECURITIES - 8.39%			$	8,672,931
(Cost: $8,672,931)
TOTAL INVESTMENT SECURITIES - 101.17%			$	104,647,615
(Cost: $110,118,546)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (1.17%)				(1,205,945	)
NET ASSETS - 100.00%			$	103,441,670

Notes to Schedule of Investments
Certain acronyms may be used within the body of the Fund's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.
(A)Variable rate security. Interest rate disclosed is that which is in effect at March 31, 2008.
(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. These securities have been determined to be liquid under guidelines established by the Board of Trustees. At March 31, 2008, the total value of these securities amounted to $11,219,667, or 10.85% of net assets.
(C)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. These securities have been determined to be illiquid under guidelines established by the Board of Trustees. At March 31, 2008, the total value of these securities amounted to $3,424,123, or 3.31% of net assets.
(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.
(E)Security serves as collateral for the following open futures contracts at March 31, 2008. (See Note 7 to financial statement):
	Description	Type	Number of Contracts	Expiration Date		Market Value	Unrealized Appreciation (Depreciation)
	U.S. 2 Year     Treasury Note	Long	30	6-30-08	$	6,439,688		$	36,882
	U.S. 5 Year     Treasury Note	Short	(28)	6-30-08		(3,198,563)			(5,554)
	U.S. 10 Year     Treasury Note	Short	(31)	6-18-08		(3,687,547)			(96,148)
	U.S. 30 Year     Treasury Bond	Short	(32)	6-19-08		(3,801,500)			(60,160)
					$	(4,247,922)		$	(124,980)
(F)No or partial interest was received on the last interest due 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
     March 31, 2008
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $110,119) (Notes 1 and 3)	$	104,648
Cash		7
Receivables:
Dividends and interest		912
Fund shares sold		432
Variation margin (Note 7)		3
Prepaid and other assets		29
Total assets		106,031
LIABILITIES
Payable for investment securities purchased		2,077
Payable to Fund shareholders		316
Accrued management fee (Note 2)		46
Dividends payable		40
Accrued service fee (Note 2)		38
Accrued shareholder servicing (Note 2)		23
Accrued accounting services fee (Note 2)		5
Accrued distribution fee (Note 2)		––	*
Other		44
Total liabilities		2,589
Total net assets	$	103,442
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	109,647
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		––
Accumulated undistributed net realized loss on investment transactions		(609	)
Net unrealized depreciation in value of investments		(5,596	)
Net assets applicable to outstanding units of capital	$	103,442
Net asset value per share (net assets divided by shares outstanding):
Class A	$9.84
Class B	$9.84
Class C	$9.84
Class E	$9.84
Class I	$9.84
Class Y	$9.84
Capital shares outstanding:
Class A		9,620
Class B		252
Class C		534
Class E		83
Class I		18
Class Y		2

*Not shown due to rounding.

See Notes to Financial Statements.

Statement of Operations
     IVY BOND FUND
     For the Fiscal Year Ended March 31, 2008
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	5,000
Dividends		34
Total income		5,034
Expenses (Note 2):
Investment management fee		459
Service fee:
Class A		195
Class B		6
Class C		12
Class Y		––	*
Shareholder servicing:
Class A		169
Class B		12
Class C		13
Class E		3
Class I		––	*
Class Y		––	*
Registration fees		80
Distribution fee:
Class A		5
Class B		16
Class C		35
Class E		1
Accounting services fee		51
Audit fees		13
Custodian fees		13
Legal fees		1
Other		32
Total expenses		1,116
Net investment income		3,918
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on securities		(98	)
Realized net gain on futures		76
Realized net loss on investments		(22	)
Unrealized depreciation in value of securities during the period		(5,344	)
Unrealized depreciation in value of futures during the period		(208	)
Unrealized depreciation in value of investments during the period		(5,552	)
Net loss on investments		(5,574	)
Net decrease in net assets resulting from operations	$	(1,656	)

*Not shown due to rounding.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,
		2008			2007
INCREASE IN NET ASSETS
Operations:
Net investment income	$	3,918		$	2,846
Realized net loss on investments		(22	)		(186	)
Unrealized appreciation (depreciation)		(5,552	)		1,245
Net increase (decrease) in net assets resulting from operations		(1,656	)		3,905
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A		(3,640	)		(2,687	)
Class B		(75	)		(55	)
Class C		(177	)		(102	)
Class E		(18	)		NA
Class I		(8	)		NA
Class Y		(––	)*		(2	)
Realized gains on investment transactions:
Class A		(––	)		(––	)
Class B		(––	)		(––	)
Class C		(––	)		(––	)
Class E		(––	)		NA
Class I		(––	)		NA
Class Y		(––	)		(––	)
		(3,918	)		(2,846	)
Capital share transactions (Note 5)		38,841			10,386
Total increase		33,267			11,445
NET ASSETS
Beginning of period		70,175			58,730
End of period	$	103,442		$	70,175
Undistributed net investment income	$	––		$	––

*Not shown due to rounding

(1)See "Financial Highlights" on pages 324 - 329.

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 fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				9-30-03
Net asset value, beginning of period	$	10.46		$	10.28		$	10.52		$	10.83		$	10.73			$	10.57
Income (loss) from investment operations:
Net investment income		0.47			0.46			0.42			0.41			0.23				0.45
Net realized and unrealized gain (loss)            on investments		(0.62	)		0.18			(0.24	)		(0.30	)		0.09				0.15
Total from investment operations		(0.15	)		0.64			0.18			0.11			0.32				0.60
Less distributions from:
Net investment income		(0.47	)		(0.46	)		(0.42	)		(0.42	)		(0.22	)			(0.44	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(0.47	)		(0.46	)		(0.42	)		(0.42	)		(0.22	)			(0.44	)
Net asset value, end of period	$	9.84		$	10.46		$	10.28		$	10.52		$	10.83			$	10.73
Total return (1)		- -1.51	%		6.40	%		1.74	%		1.04	%		3.03	%			5.84	%
Net assets, end of period (in millions)	$95			$64			$56			$49			$23				$18
Ratio of expenses to average net assets       including reimbursement		1.21	%		1.20	%		1.23	%		1.17	%		1.46	% (2)(3)			1.15	%
Ratio of net investment income to average       net assets including reimbursement		4.57	%		4.48	%		4.03	%		3.84	%		4.53	% (2)(3)			4.25	%
Ratio of expenses to average net assets       excluding reimbursement		1.21	% (4)		1.20	% (4)		1.23	% (4)		1.43	%		2.36	% (2)(3)			2.01	%
Ratio of net investment income to average       net assets excluding reimbursement		4.57	% (4)		4.48	% (4)		4.03	% (4)		3.58	%		3.64	% (2)(3)			3.39	%
Portfolio turnover rate		75	%		91	%		126	%		200	%		78	%			119	%

(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.

(4)There was no waiver of expenses during the period.

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 fiscal year ended March 31,												For the period from 12-8-03 (1) to
	2008			2007			2006			2005			3-31-04
Net asset value, beginning of period	$	10.46		$	10.28		$	10.52		$	10.83			$	10.64
Income (loss) from investment operations:
Net investment income		0.36			0.34			0.30			0.28				0.11
Net realized and unrealized gain (loss) on             investments		(0.62	)		0.18			(0.24	)		(0.31	)			0.19
Total from investment operations		(0.26	)		0.52			0.06			(0.03	)			0.30
Less distributions from:
Net investment income		(0.36	)		(0.34	)		(0.30	)		(0.28	)			(0.11	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(0.36	)		(0.34	)		(0.30	)		(0.28	)			(0.11	)
Net asset value, end of period	$	9.84		$	10.46		$	10.28		$	10.52			$	10.83
Total return		- -2.59	%		5.22	%		0.57	%		- -0.23	%			2.77	%
Net assets, end of period (in thousands)	$2,476			$1,828			$1,451			$744				$287
Ratio of expenses to average net assets		2.31	%		2.32	%		2.38	%		2.45	%			2.76	% (2)
Ratio of net investment income to average net assets		3.46	%		3.37	%		2.90	%		2.63	%			3.04	% (2)
Portfolio turnover rate		75	%		91	%		126	%		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 fiscal year ended March 31,												For the period from 12-8-03 (1) to
	2008			2007			2006			2005			3-31-04
Net asset value, beginning of period	$	10.46		$	10.28		$	10.52		$	10.83			$	10.64
Income (loss) from investment operations:
Net investment income		0.39			0.37			0.31			0.27				0.11
Net realized and unrealized gain (loss) on             investments		(0.62	)		0.18			(0.24	)		(0.31	)			0.19
Total from investment operations		(0.23	)		0.55			0.07			(0.04	)			0.30
Less distributions from:
Net investment income		(0.39	)		(0.37	)		(0.31	)		(0.27	)			(0.11	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(0.39	)		(0.37	)		(0.31	)		(0.27	)			(0.11	)
Net asset value, end of period	$	9.84		$	10.46		$	10.28		$	10.52			$	10.83
Total return		- -2.31	%		5.48	%		0.66	%		- -0.40	%			2.77	%
Net assets, end of period (in thousands)	$5,259			$4,096			$1,737			$547				$115
Ratio of expenses to average net assets		2.02	%		2.06	%		2.28	%		2.59	%			2.61	% (2)
Ratio of net investment income to average net assets		3.76	%		3.62	%		3.01	%		2.47	%			3.09	% (2)
Portfolio turnover rate		75	%		91	%		126	%		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 E Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	10.46
Income (loss) from investment operations:
Net investment income			0.43	(2)
Net realized and unrealized loss on investments			(0.62	) (2)
Total from investment operations			(0.19	)
Less distributions from:
Net investment income			(0.43	)
Capital gains			(0.00	)
Total distributions			(0.43	)
Net asset value, end of period		$	9.84
Total return (3)			- -1.85	%
Net assets, end of period (in thousands)		$811
Ratio of expenses to average net assets			1.59	% (4)
Ratio of net investment income to average net assets			4.14	% (4)
Portfolio turnover rate			75	% (5)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

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

(4)Annualized.

(5)For the twelve months ended March 31, 2008.

See Notes to Financial Statements.

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

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	10.46
Income (loss) from investment operations:
Net investment income			0.50	(2)
Net realized and unrealized loss on investments			(0.62	) (2)
Total from investment operations			(0.12	)
Less distributions from:
Net investment income			(0.50	)
Capital gains			(0.00	)
Total distributions			(0.50	)
Net asset value, end of period		$	9.84
Total return			- -1.17	%
Net assets, end of period (in thousands)		$180
Ratio of expenses to average net assets			0.91	% (3)
Ratio of net investment income to average net assets			4.87	% (3)
Portfolio turnover rate			75	% (4)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(4)For the twelve months ended March 31, 2008.

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 fiscal year ended March 31,												For the period from 12-8-03 (1) to
	2008			2007			2006			2005			3-31-04
Net asset value, beginning of period	$	10.46		$	10.28		$	10.52		$	10.83			$	10.64
Income (loss) from investment operations:
Net investment income		0.46	(2)		0.46			0.41			0.39				0.13
Net realized and unrealized gain (loss) on            investments		(0.62	) (2)		0.18			(0.24	)		(0.31	)			0.19
Total from investment operations		(0.16	)		0.64			0.17			0.08				0.32
Less distributions from:
Net investment income		(0.46	)		(0.46	)		(0.41	)		(0.39	)			(0.13	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)			(0.00	)
Total distributions		(0.46	)		(0.46	)		(0.41	)		(0.39	)			(0.13	)
Net asset value, end of period	$	9.84		$	10.46		$	10.28		$	10.52			$	10.83
Total return		- -1.60	%		6.43	%		1.62	%		0.75	%			3.03	%
Net assets, end of period (in thousands)	$24			$42			$20			$34				$25
Ratio of expenses to average net assets		1.34	%		1.09	%		1.34	%		1.46	%			1.54	% (3)
Ratio of net investment income to average net assets		4.42	%		4.60	%		3.91	%		3.65	%			3.99	% (3)
Portfolio turnover rate		75	%		91	%		126	%		200	%			78	% (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.

Managers' Discussion of
Ivy Mortgage Securities Fund
     March 31, 2008

Ivy Mortgage Securities Fund is subadvised by Advantus Capital Management, Inc.

Below, Christopher R. Sebald, CFA, and David W. Land, CFA, the Fund's portfolio managers, discuss the Fund's positioning, performance and results for the fiscal year ended March 31, 2008. Mr. Sebald has 19 years of industry experience and has managed the Fund for five years. Mr. Land has 17 years of industry experience and has managed the Fund for four years.

MATURITY
SHORT	INTER	LONG
	X		HIGH	CREDIT QUALITY
			MEDIUM
			LOW

This diagram shows the Fund's fixed-income investment style by displaying the average credit quality of the bonds owned and the Fund's interest rate sensitivity, as measured by average maturity. Shaded areas reflect quarterly data for the past three years. Source: Morningstar

The Fund fell 4.69 percent (Class A shares at net asset value), performing below its benchmark index and its peer group for the 12 months ended March 31, 2008. In comparison, the Lehman Brothers Mortgage-Backed Securities Index (reflecting the performance of securities that generally represent the mortgage-backed securities market) increased 7.93 percent, while the Lipper U.S. Mortgage Funds Universe Average (reflecting the performance of the universe of funds with similar investment objectives), increased 3.07 percent. Please note that Fund returns include applicable fees and expenses while index returns do not include any such fees.

Lack of agency securities hurt results

The Fund's performance was negatively affected by its lack of holdings in agency pass-through securities. Agency mortgage-backed securities outperformed all other mortgage and structured-finance sectors, particularly in the second half of the fiscal year. Agencies did well as the result of actions taken by the Federal Reserve Board. In response to the liquidity crisis, the Fed began making collateralized loans to banks and was willing to accept agency pass-throughs as a form of collateral. This action provided support to pass-throughs that hadn't been previously available. The decline in the housing market and subsequent losses in subprime securities caused all non-agency securities to underperform, regardless of the credit fundamentals. The subprime impact on the entire fixed-income market was surprising and swift, and as losses at major banks mounted, funding became scarce and prices suffered.

As the fixed-income market began to deteriorate, even many of the highest-rated securities and money market strategies (once believed safe) were called into question. Several thousand collateralized debt obligation securities (CDOs) were downgraded, putting further pressure on the markets. Because many of these securities originally were rated AAA, their downgrade and higher probability of default was a shock to investors and caused price declines and avoidance of nearly all structured-finance securities. Many of these CDOs were held in investment vehicles that received funding in the money markets sector; as a result, funding in general dried up and fixed-income trading volumes fell significantly.

As the markets deteriorated and consumer and residential lending became scarce, we grew concerned about the economy's ability to avoid a recession. As a result, we expected the Federal Reserve to cut its target interest rate more than the market estimated; we expected longer-term rates to fall, as well. Therefore, we positioned the Fund longer in duration in an effort to take advantage of falling rates.

Subprime fears mattered more than fundamentals

Throughout the year, we continued to employ a relatively value-oriented trading strategy based on our fundamental forecast for individual securities. While this strategy generated strong results in the beginning of the year, it was less successful later as the markets became overwhelmed by subprime contagion risk and forced selling of securities by leveraged institutions.

The Fund did not own any CDOs. It did hold positions in non-agency residential mortgage-backed securities, including subprime and ALT-A. However, our focus on the higher parts of the capital structure, the highest quality originators and detailed underwriting benefited the Fund. At the same time, the Fund's emphasis on mortgage-related securities - including commercial mortgage-backed securities, asset-backed securities and non-agency residential mortgage securities - negatively affected performance. Such securities, even though not fundamentally affected by subprime, were caught up in the market contagion and performed poorly.

Portfolio Characteristics
As of March 31, 2008
Average maturity	5.25 years
Effective duration	3.28 years
Weighted average bond rating	AAA

Our outlook

We expect more cuts in the federal funds rate in the coming months. (Federal funds are overnight borrowings by banks to maintain their bank reserves at the Fed. Commercial banks keep reserves at Federal Reserve banks to meet reserve requirements and to clear financial transactions.)

Consumer spending already appears to be slowing and unemployment claims are rising. We believe the "pull-back" in lending terms is likely to cut deeper into the economy as consumers and firms face potentially higher lending costs and less favorable terms. While this forecast anticipates a greater degree of stress in the financial markets, we expect the investment-grade fixed-income sector to reach some level of stability in the coming months.

We believe there likely will be a slow recovery in the highest-quality sectors of the market as funding and liquidity conditions improve with the injection of money from central banks around the world. Additionally, in our opinion, the recapitalization of the large-bank sector provides a much better credit story going forward for these institutions, even though their earning picture remains unclear.

As with any mutual fund, the value of the Fund's shares will change, and you could lose money on your investment. The risks incurred by mortgage securities include, but are not limited to, reinvestment of pre-paid loans at lower rates of return. In addition, the net asset value of mortgage securities may fluctuate in response to changes in interest rates and are not guaranteed. Fixed-income securities are subject to interest rate risk and, as such, the Fund's net asset value may fall as interest rates rise. These and other risks are more fully described in the Fund's prospectus.

The Fund's performance noted above is at net asset value (NAV), and does not include the effect of any applicable sales charges. If reflected, the sales charge would reduce the performance noted.

Certain U.S. government securities in which the Fund may invest, such as Treasury securities and securities issued by the Government National Mortgage Association (Ginnie Mae), are backed by the full faith and credit of the U.S. government. However, other U.S. government securities in which the Fund may invest, such as securities issued by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Banks (FHLB) are not backed by the full faith and credit of the U.S. government, are not insured or guaranteed by the U.S. government and, instead, may be supported only by the right of the issuer to borrow from the U.S. Treasury or by the credit of the issuer.

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

Comparison of Change in Value of
$10,000 Investment

Ivy Mortgage Securities Fund, Class A Shares(1)	$	14,430
Lehman Brothers Mortgage-Backed Securities Index	$	17,153
Lipper U.S. Mortgage Funds Universe Average	$	15,321

		IVY MORTGAGE SECURITIES FUND, CLASS A	LEHMAN BROTHERS MORTGAGE- BACKED SECURITIES	LIPPER U.S. MORTGAGE FUNDS UNIVERSE
		SHARES	INDEX	AVERAGE
SEPT	1998	9,425	10,000	10,000
SEPT	1999	9,611	10,227	10,045
SEPT	2000	10,351	10,986	10,688
SEPT	2001	11,790	12,343	11,928
SEPT	2002	12,719	13,251	12,785
SEPT	2003	13,255	13,715	13,178
MARCH	2004	13,613	14,109	13,500
MARCH	2005	13,902	14,475	13,731
MARCH	2006	14,214	14,863	14,021
MARCH	2007	15,140	15,892	14,864
MARCH	2008	14,430	17,153	15,321

Please note that the performance of the Fund's other share classes will be greater or less than the performance shown above for Class A based on the differences in loads and fees paid by shareholders investing in the different classes.

(1)The value of the investment in the Fund is impacted by the sales load at the time of the investment and by the ongoing expenses of the Fund and assumes reinvestment of dividends and distributions.

Average Annual Total Return(2)
	Class A	Class B	Class C	Class E	Class I	Class Y
1-year period ended 3-31-08	- -10.17%	- -9.25%	- -5.43%	––	––	-4.57%
5-year period ended 3-31-08	0.90%	––	––	––	––	––
10-year period ended 3-31-08	4.23%	––	––	––	––	––
Since inception of Class (3) through 3-31-08	––	0.49%	1.08%	––	––	1.98%
Cumulative return since inception of class (3) through 3-31-08	––	––	––	- -10.65%	- -  4.05%	––

(2)Data quoted is past performance and is based on deduction of the maximum applicable sales load for each of the periods. Current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Please visit www.ivyfunds.com for the Fund's most recent month-end performance. Class A and Class E shares carry a maximum front-end sales load of 5.75%. Class B and Class C shares carry maximum contingent deferred sales charges (CDSC) of 5% and 1%, respectively. (Accordingly, the Class C shares reflect no CDSC since it only applies to Class C shares redeemed within twelve months after purchase.) Class I and Class Y shares are not subject to sales charges.

(3)12-8-03 for Class B, Class C and Class Y shares and 4-2-07 for Class E and Class I shares (the date on which shares were first acquired by shareholders).

Past performance is not necessarily indicative of future performance. Indexes are unmanaged. The performance graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.

The Advantus Mortgage Securities Fund merged into the Ivy Mortgage Securities Fund on December 8, 2003. The performance shown for periods prior to this date is that of the Advantus Mortgage Securities Fund Class A shares, restated to reflect current sales charges applicable to Ivy Mortgage Securities Fund Class A shares. Performance has not been restated to reflect the fees and expenses applicable to the Ivy Mortgage Securities Fund. If these expenses were reflected, performance shown would differ.

SHAREHOLDER SUMMARY OF IVY MORTGAGE SECURITIES FUND

Portfolio Highlights

On March 31, 2008, Ivy Mortgage Securities Fund had net assets totaling $292,995,061 invested in a diversified portfolio of:

56.33%	Corporate Bonds
42.36%	United States Government and Government Agency Obligations
1.31%	Cash and Cash Equivalents

Quality Weightings

On March 31, 2008, the breakdown of bonds (by ratings) held by the Fund was as follows:

AAA	73.53	%
AA	9.37	%
A	5.25	%
BBB	6.33	%
BB	3.33	%
Non-Rated	0.88	%
Cash and Cash Equivalents	1.31	%

Ratings reflected in the wheel are taken from the following sources in order of preference: Standard & Poor's, Moody's or management's internal ratings, where no other ratings are available.

The Investments of Ivy Mortgage Securities Fund
March 31, 2008
CORPORATE DEBT SECURITIES	Principal Amount in Thousands					Value
Finance Companies
ABFS Mortgage Loan Trust:
2001-2,
6.99%, 12-25-31 (A)			$    988		$	984,271
2002-4,
7.423%, 12-15-33 (A)			1,820			1,347,361
Aames Mortgage Trust 2001-4,
6.65%, 1-25-32 (A)			427			368,947
Asset Securitization Corporation:
1.60556%, 10-13-26 (A) (B) (Interest Only)			4,007			137,151
8.62125%, 8-13-29 (A) (Interest Only)			1,288			287,771
7.20838%, 2-14-  43 (A)			1,430			1,229,640
Associates Manufactured Housing Contract       Pass-Through Certificates,
7.9%, 3-15-27			954			972,957
Banc of America Alternative Loan Trust:       2004-11,
6.0%, 12-25-34			1,079			1,092,278
2005-6,
6.0%, 7-25-35			831			768,222
2005-8:
5.57722%, 9-25-35 (A)			2,025			1,459,957
5.57722%, 9-25-35 (A)			402			241,391
2005-10,
5.66714%, 11-25-35 (A)			1,145			616,796
2005-12,
5.80926%, 1-25-36 (A)			1,618			961,922
2006-  4:
6.22473%, 5-25-  46 (A)			889			379,851
6.22473%, 5-25-  46 (A)			637			493,952
2006-6,
6.0%, 6-25-  46			3,070			2,445,931
Banc of America Commercial Mortgage Inc.,       Commercial Mortgage Pass-Through Certificates:
Series 2002-2,
6.2%, 7-11-  43 (B)			1,200			1,048,866
Series 2003-1,
4.9%, 9-11-36 (B)			1,000			813,968
Series 2004-6,
5.104%, 12-10-  42 (A) (B)			800			574,279
Banc of America Commercial Mortgage       Trust 2007-1,
5.451%, 1-15-  49			1,000			971,890
Banc of America Funding 2004-2 Trust,
6.5%, 7-20-32			1,197			1,109,956
Banc of America Funding Corporation,
5.00944%, 9-20-34 (A)			1,224			1,072,834
Banc of America Mortgage 2005-J Trust,
5.09067%, 11-25-35 (A)			1,890			1,838,747
Banc of America Mortgage 2007-1 Trust:
6.0%, 3-25-37			3,596			2,783,831
6.0%, 3-25-37			1,000			902,425
Banc of America Mortgage Alternative       Loan Trust 2003-5,
5.5%, 7-25-33			1,265			584,467
Banc of America Mortgage Trust:       2003-9,
5.5%, 12-25-33			809			454,371
2004-1,
5.5%, 2-25-34			1,910			1,469,080
2004-2:
5.0%, 3-25-19			288			268,746
5.0%, 3-25-19			224			203,904
5.5%, 3-25-34			471			384,661
2004-3:
4.875%, 4-25-19			389			354,832
4.875%, 4-25-19			209			184,487
2004-7,
5.75%, 8-25-34			1,039			961,674
Banc of America Structured Securities       Trust 2002-X1 F,
6.274%, 10-11-33 (B)			1,750			1,643,667
Banco Hipotecario Nacional:
7.916%, 7-25-09 (C)(E)			23			233
2.57%, 3-25-11 (C)(E)			10			100
7.54%, 5-31-17 (C)(E)			—	*		1
BankAmerica Manufactured Housing Contract Trust:
7.8%, 10-10-26			1,836			1,903,433
7.015%, 1-10-28			858			877,270
Bear Stearns Commercial Mortgage Securities Inc.:       Series 2001-TOP2 Trust Fund,
7.49158%, 2-15-35 (A) (B)			3,000			2,857,528
Series 2000-WF1 Trust Fund,
6.5%, 2-15-32			1,015			946,021
Bear Stearns Commercial Mortgage Securities Trust       2002-TOP6,
6.0%, 10-15-36 (B)			938			683,710
Bear Stearns Mortgage Funding Trust 2006-SL2,
3.00875%, 9-25-36 (A)(F)			1,174			2,533
Bear Stearns Mortgage Securities Inc.,
8.0%, 11-25-29			387			400,129
BlackRock Capital Finance,
7.75%, 9-25-26 (B)			523			416,898
C-Bass:       2005-CB3 Trust,
5.109%, 12-25-34 (A)			1,254			1,147,955
2006-CB2 Trust,
5.717%, 12-25-36 (A)			48			47,832
2006-MH1 Trust,
5.97%, 10-25-36 (A) (B)			1,435			1,482,686
Mortgage Loan Trust 2007-CB2,
5.891%, 2-25-37 (A)			362			354,643
CHEQ Home Equity Loan Trust, Series 2006-S2,
2.70875%, 7-25-27 (A)			816			751,424
CHL Mortgage Pass-ThroughTrust:       2002-32,
5.53811%, 1-25-33 (A)			1,331			1,002,723
2003-28,
4.15%, 8-25-33			1,500			1,382,547
2003-HYB2,
3.97107%, 7-19-33 (A)			1,929			1,734,796
COMM 2006-CNL2,
5.5699%, 2-5-19 (A) (B)			925			821,315
CSAB Mortgage-Backed Trust 2006-2,
6.08%, 9-25-36 (A)			3,540			2,496,787
CSFB Commercial Mortgage Trust 2003-C4,
5.322%, 8-15-36 (A) (B)			1,000			710,185
CWHEQ Home Equity Loan Trust, Series 2006-S3,
6.518%, 1-25-29 (A)			2,135			1,077,657
Capital Auto Receivables Asset Trust:       2006-1,
7.16%, 1-15-13 (B)			1,140			1,166,423
2007-2,
8.3%, 2-18-14 (B)			1,105			1,104,067
Centex Home Equity Loan Trust 2005-C,
5.048%, 6-25-35 (A)			2,301			2,000,786
Chase Mortgage Finance Trust:       Series 2003-S2,
5.0%, 3-25-18			1,555			1,508,977
Series 2003-S11,
5.5%, 10-25-33			851			807,672
Citicorp Residential Mortgage Trust,       Series 2006-2,
5.872%, 9-25-36 (A)			740			734,842
CitiMortgage Alternative Loan Trust:
Series 2006-A7,
6.0%, 12-25-36 (A)			3,417			2,662,477
Series 2007-A7,
6.23759%, 7-25-37 (A)			642			125,616
Collateralized Mortgage Obligation Trust,
5.0%, 7-1-18			31			31,227
Commercial Mortgage Asset Trust,
7.8%, 11-17-32 (A)			1,000			1,102,683
Conseco Finance Securitizations Corp.,
6.981%, 6-15-32			863			831,632
CountryPlace Manufactured Housing Contract Trust       2005-1,
4.8%, 12-15-35 (A) (C)			1,275			1,133,206
Countrywide Home Loans Alternative Loan       Trust 2004-J9,
4.586%, 10-25-34 (A)			1,705			1,483,132
Countrywide Home Loans, Inc. Asset-Backed Certificates,       Series 2005-10,
4.915%, 2-25-36 (A)			5,000			4,445,845
Credit Suisse Commercial Mortgage Trust Series 2006-C5,
5.311%, 12-15-39			1,000			971,339
Credit Suisse First Boston Mortgage Securities Corp.,
6.0%, 11-25-18			432			426,743
FFCA Secured Lending Corporation:
3.875%, 2-18-22 (A) (C)			1,500			1,430,590
4.125%, 2-18-22 (A) (C)			1,000			943,226
First Horizon Mortgage Pass-Through Trust:       2003-8,
5.12905%, 10-25-33 (A)			364			199,846
2007-  4,
5.5%, 8-25-22			1,170			1,164,533
Flagstar Home Equity Loan Trust 2007-1,
5.997%, 1-25-35 (A) (C)			1,630			1,029,707
Ford Credit Auto Owner Trust:       2006-B,
7.12%, 2-15-13 (B)			635			588,491
2007-A,
7.05%, 12-15-13 (B)			390			341,905
GMAC Commercial Mortgage Securities,
5.94%, 7-1-13 (B)			101			96,844
GS Mortgage Securities Trust 2007-GG10,
5.79923%, 8-10-  45 (A)			1,500			1,497,611
Global Mortgage Securitization 2005-A Ltd. and       Global Mortgage Securitization 2005-A LLC:
5.25%, 4-25-32			753			662,433
5.39334%, 4-25-32 (A)			1,171			705,010
Global Mortgage Securitization Ltd. and Global       Mortgage Securitization, LLC:
5.25%, 11-25-32 (C)			1,033			970,210
5.25%, 11-25-32 (C)			482			456,882
Green Tree Financial Corporation:
7.65%, 4-15-19			605			624,697
8.3%, 11-15-19			442			459,412
9.1%, 4-15-25			1,075			1,117,672
9.0%, 6-15-25			1,052			1,130,100
Greenwich Capital Commercial Funding Corp.,       Commercial Mortgage Trust 2002-C1,
5.5%, 1-11-35 (B)			780			653,349
Hilton Hotel Pool Trust:
3.61938%, 10-3-15 (A) (B)			500			500,695
7.653%, 10-3-15 (B)			1,955			2,171,728
Home Equity Loan Trust 2003-HS2,
5.09%, 7-25-33 (A)			129			114,710
Hometown Commercial Capital, LLC Hometown       Commercial Mortgage Pass-Through       Notes 2006-1,
5.506%, 11-11-38 (C)			2,039			1,969,921
Impac CMB Trust Series 2003-2F,
6.0%, 1-25-33 (A)			836			546,103
J.P. Morgan Alternative Loan Trust 2005-S1       Mortgage Pass-Through Certificates,       Series 2005-S1,
6.0%, 12-25-35			960			949,928
J.P. Morgan Alternative Loan Trust 2006-A6,
5.95%, 11-25-36 (A)			2,500			2,071,173
J.P. Morgan Chase Commercial Mortgage       Securities Corp.,
6.2207%, 10-12-37 (B)			2,300			2,099,885
J.P. Morgan Chase Commercial Mortgage Securities:       Trust 2006-LDP8,
5.37%, 5-15-  45			500			485,701
Trust 2007-LDP10,
5.42%, 1-15-  49			3,000			2,902,849
J.P. Morgan Mortgage Acquisition Trust:       2006-CW2,
6.337%, 8-25-36 (A)			2,725			2,100,076
2006-WF1,
6.41%, 7-25-36 (A)			2,510			1,686,922
J.P. Morgan Mortgage Trust:       2004-A3,
4.29509%, 7-25-34 (A)			1,359			1,166,463
2005-S2:
5.67279%, 9-25-35 (A)			2,207			1,653,821
6.5%, 9-25-35			2,225			2,129,203
2006-A2:
3.75414%, 11-25-33 (A)			1,446			1,295,932
3.81672%, 8-25-34 (A)			2,103			1,659,160
2006-A6,
6.04397%, 10-25-36 (A)			2,510			2,354,796
2006-S3:
6.187%, 8-25-36			1,188			853,720
6.5%, 8-25-36			1,810			1,663,270
2007-A1,
4.81508%, 7-25-35 (A)			2,179			1,984,833
2007-A2,
5.70783%, 4-25-37 (A)			3,308			3,208,412
LB-UBS Commercial Mortgage Trust 2003-C3,
4.846%, 2-15-37 (A) (B)			300			234,753
Lehman Mortgage Trust Mortgage Pass-Through       Certificates, Series 2006-5,
6.88627%, 9-25-36 (A)			1,998			730,194
Lehman XS Trust, Series 2005-8,
5.69%, 12-25-35			3,057			2,968,948
MASTR Asset Securitization Trust:       2003-6,
5.5%, 7-25-33			1,635			1,607,256
2003-10,
5.5%, 11-25-33			1,402			1,387,515
Mid-State Capital Corporation 2004-1 Trust:
6.005%, 8-15-37			368			372,943
6.497%, 8-15-37			1,158			1,190,217
Morgan Stanley Capital I Trust 2003-IQ5,
5.97415%, 4-15-38 (A) (B)			2,348			1,735,869
Morgan Stanley Dean Witter Capital I Inc.       Trust 2002-WL1,
6.48368%, 4-25-17 (A)			239			235,621
Multi Security Asset Trust LP, Commercial Mortgage-       Backed Securities Pass-Through Certificates,       Series 2005-RR4:
1.1548%, 11-28-35 (A) (C) (Interest Only)		24,823				418,886
5.88%, 11-28-35 (A) (C)			680			265,412
5.88%, 11-28-35 (A) (C)			340			149,706
Multi Security Asset Trust, Commercial Mortgage       Pass-Through Certificates, Series 2005-RR4,
5.0%, 11-28-35 (C)			2,000			1,700,625
NationsLink Funding Corporation, Commercial       Mortgage Pass-Through Certificates,       Series 1998-2,
5.0%, 8-20-30 (B)			1,000			715,331
Oakwood Mortgage Investors, Inc.:
8.1%, 10-15-21 (B)			234			240,273
7.375%, 8-15-27			228			234,378
Office Portfolio Trust, Commerical Mortgage Pass-       Through Certificates, Series 2001-HRPT,
6.778%, 2-3-16 (B)			700			621,872
Origen Manufactured Housing Contract Trust:       2004-A,
5.7%, 1-15-35			543			507,492
2004-B,
4.75%, 8-15-21			400			383,092
2005-A,
4.97%, 10-15-21			935			952,307
2005-B:
5.605%, 5-15-22			360			357,997
5.91%, 1-15-37			700			679,934
PHH Alternative Mortgage Trust, Series 2007-1,       Class II-B-2,
6.0%, 2-25-37			1,554			875,246
Prudential Home Mortgage Securities,
6.97988%, 9-28-08 (A) (B)			1			498
6.72999%, 4-28-24 (A) (C)			3			2,888
8.0377%, 9-28-24 (A) (B)			22			19,877
RALI Series:
2003-QS10 Trust,
5.5%, 5-25-33			2,202			1,958,329
2003-QS11 Trust,
5.75%, 6-25-33			2,471			1,879,674
RAMP Series 2005-RS1 Trust,
5.145%, 1-25-35 (A)			1,075			970,159
RASC Series 2003-KS10 Trust,
6.41%, 12-25-33			292			167,969
RBSGC Mortgage Loan Trust 2007-B,
5.45042%, 7-25-35 (A)			2,948			2,901,445
RESI Finance Limited Partnership 2003-C and       RESI Finance DE Corporation 2003-C,
4.45813%, 9-10-35 (A) (C)			1,414			1,135,046
RFMSI Series 2004-S5 Trust:
4.5%, 5-25-19			326			296,492
4.5%, 5-25-19			162			143,762
Salomon Brothers Mortgage Securities VII, Inc.,       Mortgage Pass-Through Certificates,       Series 1997-HUD1,
7.75%, 12-25-30 (A)			1,101			1,138,800
Structured Adjustable Rate Mortgage Loan Trust,       Series 2005-21,
5.4%, 11-25-35 (A)			1,575			1,250,959
Structured Asset Mortgage Investments, Inc.:
5.80078%, 4-30-30 (A)			19			16,821
5.80078%, 4-30-30 (A)			9			7,147
Structured Asset Securities Corporation:
5.54%, 11-25-32 (A)			221			206,016
5.25%, 8-25-33			1,302			990,935
5.25%, 8-25-33			567			361,328
5.63%, 5-25-34 (A)			770			640,559
6.0%, 6-25-34 (A)			2,127			1,778,129
Vanderbilt Mortgage and Finance, Inc.,
7.955%, 12-7-24			542			590,319
Wachovia Bank Commercial Mortgage Trust (The),
4.942%, 11-15-34 (B)			964			751,479
Washington Mutual MSC Mortgage Pass-Through       Certificates Series 2002-MS11 Trust,
5.6087%, 12-25-32 (A)			929			744,826
Wells Fargo Alternative Loan 2007-PA3 Trust:
5.75%, 7-25-37			1,079			879,787
6.20176%, 7-25-37 (A)			1,781			1,290,831
6.20176%, 7-25-37 (A)			1,557			531,311
Wells Fargo Mortgage Backed Securities :       2003-2 Trust,
5.25%, 2-25-18			257			223,610
2003-  4 Trust,
5.5%, 6-25-33			929			575,376
2003-9 Trust,
5.25%, 8-25-33 (B)			1,124			605,994
2004-1 Trust,
5.5%, 2-25-34			1,622			1,272,761
2005-16 Trust,
5.75%, 1-25-36			500			455,267
TOTAL CORPORATE DEBT SECURITIES - 56.33%					$	165,046,236
(Cost: $195,426,936)

UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS
Agency Obligations - 0.32%
Federal Home Loan Bank,
3.625%, 12-17-10		400		411,158
Federal National Mortgage Association,
5.0%, 9-15-08 (D)		500		506,617
				917,775
Mortgage-Backed Obligations - 40.94%
Federal Home Loan Mortgage Corporation       Adjustable Rate Participation Certificates,
11.46792%, 3-15-09 (A)		199		203,110
Federal Home Loan Mortgage Corporation       Agency REMIC/CMO,
5.0%, 6-15-31		2,000		1,991,864
Federal Home Loan Mortgage Corporation       Fixed Rate Participation Certificates:
5.5%, 12-1-17		637		654,271
5.5%, 9-1-19		957		979,426
3.5%, 2-15-30		1,678		1,640,016
6.5%, 9-1-32		1,038		1,096,792
5.3%, 1-15-33		206		209,060
5.0%, 7-15-33		2,064		2,064,753
5.5%, 5-1-34		1,186		1,205,549
5.5%, 5-1-34		783		796,558
6.5%, 5-1-34		755		785,818
5.5%, 10-1-34		928		941,975
6.5%, 10-1-34		4,935		5,118,523
5.0%, 5-15-35		2,196		2,063,147
5.5%, 7-1-35		2,516		2,545,808
5.0%, 8-1-35		865		858,275
5.5%, 10-1-35		1,522		1,543,195
5.0%, 12-1-35		792		785,453
7.0%, 12-1-37		833		874,883
Federal National Mortgage Association Adjustable       Rate Pass-Through Certificates,
4.642%, 7-1-35 (A)		1,129		1,142,826
Federal National Mortgage Association Fixed Rate       Pass-Through Certificates:
6.0%, 1-1-18		349		359,329
5.5%, 2-1-18		385		395,850
5.0%, 5-1-18		1,227		1,245,530
5.0%, 10-1-18		1,226		1,243,797
5.5%, 9-1-19		306		313,172
5.5%, 2-1-24		475		483,488
6.0%, 8-1-29		391		403,509
7.0%, 11-1-31		184		197,031
6.5%, 2-1-32		172		181,360
6.5%, 2-1-32		130		137,026
6.5%, 2-1-32		112		118,525
7.0%, 2-1-32		231		247,880
7.0%, 3-1-32		324		348,024
6.5%, 4-1-32		71		73,902
6.5%, 5-1-32		126		132,657
6.5%, 5-1-32		83		86,895
6.5%, 7-1-32		601		633,801
6.0%, 9-1-32		140		145,434
6.5%, 9-1-32		71		74,113
6.0%, 10-1-32		920		954,250
6.0%, 10-1-32		890		923,757
6.5%, 10-1-32		59		62,270
6.0%, 11-1-32		769		798,486
6.0%, 11-1-32		453		469,783
6.0%, 3-1-33		1,203		1,248,238
6.0%, 3-1-33		1,073		1,113,072
6.0%, 3-1-33		807		837,155
6.0%, 3-1-33		232		240,164
5.5%, 4-1-33		1,623		1,648,247
5.5%, 5-1-33		515		521,735
5.5%, 5-1-33		269		273,239
6.0%, 6-1-33		2,464		2,536,606
6.5%, 8-1-33		42		44,228
6.0%, 10-1-33		237		244,829
5.0%, 11-1-33		1,631		1,618,389
6.0%, 12-1-33		486		502,446
5.5%, 1-1-34		1,441		1,459,223
5.5%, 2-1-34		4,497		4,539,159
7.0%, 2-1-34		404		423,947
5.0%, 3-1-34		922		914,616
5.0%, 3-1-34		398		395,018
5.5%, 3-1-34		2,117		2,152,097
5.5%, 4-1-34		1,847		1,876,906
5.5%, 4-1-34		584		590,563
5.0%, 5-1-34		182		180,664
5.5%, 7-1-34		1,691		1,718,670
6.0%, 8-1-34		625		642,962
5.5%, 9-1-34		1,159		1,175,828
6.0%, 9-1-34		773		794,666
6.5%, 9-1-34		916		952,278
5.5%, 10-1-34		1,813		1,835,739
5.5%, 11-1-34		685		695,199
6.0%, 11-1-34		324		333,012
6.5%, 11-1-34		63		65,247
6.0%, 12-1-34		2,231		2,292,845
5.5%, 1-1-35		601		608,414
4.5%, 2-1-35		445		430,061
5.5%, 2-1-35		2,270		2,302,923
6.5%, 3-1-35		1,102		1,148,554
5.0%, 4-1-35		1,600		1,583,501
6.0%, 4-1-35		1,625		1,664,609
6.0%, 4-1-35		1,558		1,599,208
6.0%, 6-1-35		2,588		2,659,848
5.0%, 7-1-35		760		753,410
5.5%, 7-1-35		759		767,468
5.5%, 10-1-35		1,586		1,610,183
5.5%, 10-1-35		872		885,617
5.5%, 2-1-36		1,543		1,539,512
6.5%, 2-1-36		622		648,679
6.5%, 6-1-36		1,114		1,155,297
6.0%, 8-1-36		1,962		2,012,028
6.0%, 11-1-36		2,045		2,097,289
6.0%, 5-1-37		954		977,659
6.5%, 8-1-37		1,899		1,968,725
6.5%, 9-1-37		1,908		1,977,976
7.0%, 10-1-37		298		312,731
7.0%, 10-1-37		234		245,990
Government National Mortgage Association       Agency REMIC/CMO (Interest Only):
1.04712%, 3-16-34 (A)	7,104			254,611
0.80114%, 7-16-  40 (A)		3,768		104,667
0.22005%, 3-16-  42 (A)	14,104			116,082
0.97826%, 6-17-  45 (A)	19,245			823,738
Government National Mortgage Association Fixed       Rate Pass-Through Certificates:
7.875%, 5-15-17		600		620,793
6.25%, 7-15-24		220		229,611
5.5%, 3-16-32		4,575		4,693,934
5.0%, 7-15-33		949		951,238
5.0%, 12-1-33		700		699,782
5.0%, 7-15-34		818		819,803
5.5%, 12-15-34		942		962,811
5.5%, 12-15-34		550		562,230
5.0%, 1-15-35		1,630		1,631,730
5.5%, 4-1-35		3,000		3,058,125
5.0%, 12-15-35		1,829		1,830,979
6.0%, 4-1-37		1,875		1,934,766
United States Department of Veterans Affairs,       Guaranteed REMIC Pass-Through Certificates,       Vendee Mortgage Trust, 1995-1:
Class 1,
7.20581%, 2-15-25 (A)		216		235,172
Class 2,
7.7925%, 2-15-25		68		73,789
				119,951,701
Treasury Obligations - 1.10%
United States Treasury Notes:
4.5%, 3-31-12 (D)		2,000		2,174,218
3.625%, 12-31-12		1,000		1,054,844
				3,229,062
TOTAL UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS - 42.36%			$	124,098,538
(Cost: $123,460,657)

SHORT-TERM SECURITIES
Commercial Paper
Beverages - 0.68%
Coca-Cola Company (The),
2.25%, 4-14-08	2,000		1,998,375
Computers - Main and Mini - 1.03%
IBM International Group Capital LLC,
2.25%, 4-3-08	3,000		2,999,625
Electrical Equipment - 1.02%
W.W. Grainger, Inc.,
2.6%, 4-9-08	3,000		2,998,267
Food and Related - 1.02%
Archer Daniels Midland Company,
2.95%, 4-21-08	3,000		2,995,083
Forest and Paper Products - 1.71%
Kimberly-Clark Worldwide Inc.,
2.18%, 4-8-08	5,000		4,997,881
Utilities - Electric - 0.68%
Wisconsin Electric Power Co.,
2.47%, 4-  4-08	2,000		1,999,588
Total Commercial Paper - 6.14%			17,988,819
United States Government Agency Obligations - 1.42%
Federal Home Loan Bank,
1.5%, 4-1-08	4,160		4,160,000
TOTAL SHORT-TERM SECURITIES - 7.56%		$	22,148,819
(Cost: $22,148,819)
TOTAL INVESTMENT SECURITIES - 106.25%		$	311,293,593
(Cost: $341,036,412)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (6.25%)			(18,298,532	)
NET ASSETS - 100.00%		$	292,995,061

Notes to Schedule of Investments
Certain acronyms may be used within the body of the Fund's holdings. The definitions of these acronyms are as follows: ADR - American Depositary Receipts; CMO - Collateralized Mortgage Obligation; GDR - Global Depositary Receipts; and REMIC - Real Estate Mortgage Investment Conduit.
*Not shown due to rounding.
(A)Variable rate security. Interest rate disclosed is that which is in effect at March 31, 2008.
(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. These securities have been determined to be liquid under guidelines established by the Board of Trustees. At March 31, 2008, the total value of these securities amounted to $24,839,586 or 8.48% of net assets.
(C)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. These securities have been determined to be illiquid under guidelines established by the Board of Trustees. At March 31, 2008, the total value of these securities amounted to $11,606,639 or 3.96% of net assets.
(D)Securities serve as collateral for the following open futures contracts at March 31, 2008. (See Note 7 to financial statements):
	Description	Type	Expiration Date	Number of Contracts	Market Value		Unrealized Depreciation
	United States 5 Year     Treasury Note	Short	6-30-08	(244)		$27,873,188		$     (63,214)
	United States 10 Year     Treasury Note	Short	6-18-08	(444)		52,815,190		(1,560,589)
						$80,688,378		$(1,623,803)
(E)No or partial interest was received on the last interest due date.
(F)Issuer has notified holders that principal will not be repaid.
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
     March 31, 2008
     (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $341,036) (Notes 1 and 3)	$	311,294
Receivables:
Interest		1,484
Fund shares sold		351
Prepaid and other assets		31
Total assets		313,160
LIABILITIES
Payable for investment securities purchased		18,797
Payable to Fund shareholders		545
Variation margin (Note 7)		168
Dividends payable		154
Accrued management fee (Note 2)		128
Accrued service fee (Note 2)		99
Accrued shareholder servicing (Note 2)		97
Due to custodian		75
Accrued accounting services fee (Note 2)		8
Accrued distribution fee (Note 2)		1
Other		93
Total liabilities		20,165
Total net assets	$	292,995
NET ASSETS
Capital paid in (shares authorized - unlimited)	$	327,559
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		––
Accumulated undistributed net realized loss on investment transactions		(3,197	)
Net unrealized depreciation in value of investments		(31,367	)
Net assets applicable to outstanding units of capital	$	292,995
Net asset value per share (net assets divided by shares outstanding):
Class A	$9.62
Class B	$9.62
Class C	$9.62
Class E	$9.62
Class I	$9.62
Class Y	$9.62
Capital shares outstanding:
Class A		26,564
Class B		1,161
Class C		1,732
Class E		31
Class I		26
Class Y		938

See Notes to Financial Statements.

Statement of Operations
     IVY MORTGAGE SECURITIES FUND
     For the Fiscal Year Ended March 31, 2008
     (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	19,546
Expenses (Note 2):
Investment management fee		1,651
Shareholder servicing:
Class A		772
Class B		60
Class C		57
Class E		2
Class I		––	*
Class Y		19
Service fee:
Class A		690
Class B		31
Class C		47
Class Y		31
Distribution fee:
Class A		27
Class B		92
Class C		142
Class E		1
Accounting services fee		104
Custodian fees		27
Audit fees		15
Legal fees		5
Other		221
Total expenses		3,994
Net investment income		15,552
REALIZED AND UNREALIZED LOSS
ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on securities		(1,754	)
Realized net loss on futures		(503	)
Realized net loss on investments		(2,257	)
Unrealized depreciation in value of securities during the period		(26,242	)
Unrealized depreciation in value of futures contracts during the period		(1,615	)
Unrealized depreciation in value of investments during the period		(27,857	)
Net loss on investments		(30,114	)
Net decrease in net assets resulting from operations	$	(14,562	)

*Not shown due to rounding.

See Notes to Financial Statements.

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

	For the fiscal year ended March 31,
		2008			2007
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	15,552		$	14,172
Realized net loss on investments		(2,257	)		(111	)
Unrealized appreciation (depreciation)		(27,857	)		3,634
Net increase (decrease) in net assets resulting                        from operations		(14,562	)		17,695
Distributions to shareholders from (Note 1F): (1)
Net investment income:
Class A		(13,698	)		(12,512	)
Class B		(468	)		(422	)
Class C		(759	)		(765	)
Class E		(9	)		NA
Class I		(13	)		NA
Class Y		(605	)		(473	)
Realized gains on investment transactions:
Class A		(––	)		(––	)
Class B		(––	)		(––	)
Class C		(––	)		(––	)
Class E		(––	)		NA
Class I		(––	)		NA
Class Y		(––	)		(––	)
		(15,552	)		(14,172	)
Capital share transactions (Note 5)		1,606			38,091
Total increase (decrease)		(28,508	)		41,614
NET ASSETS
Beginning of period		321,503			279,889
End of period	$	292,995		$	321,503
Undistributed net investment income	$	––		$	––

(1)See "Financial Highlights" on pages 352 - 357.

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 fiscal year ended March 31,											For the fiscal period ended				For the fiscal year ended
	2008			2007			2006			2005		3-31-04				9-30-03
Net asset value, beginning of period	$	10.59		$	10.44		$	10.68		$	10.96		$	10.97			$	11.07
Income (loss) from investment       operations:
Net investment income		0.49			0.51			0.48			0.49			0.25				0.59
Net realized and unrealized gain             (loss) on investments		(0.97	)		0.15			(0.24	)		(0.27	)		0.03				(0.12	)
Total from investment operations		(0.48	)		0.66			0.24			0.22			0.28				0.47
Less distributions from:
Net investment income		(0.49	)		(0.51	)		(0.48	)		(0.49	)		(0.25	)			(0.57	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.01	)		(0.04	)			(0.00	)
Total distributions		(0.49	)		(0.51	)		(0.48	)		(0.50	)		(0.29	)			(0.57	)
Net asset value, end of period	$	9.62		$	10.59		$	10.44		$	10.68		$	10.96			$	10.97
Total return (1)	- 4.69		%		6.52	%		2.24	%		2.12	%		2.70	%			4.19	% (2)
Net assets, end of period (in millions)	$256			$278			$243			$188			$134				$91
Ratio of expenses to average net assets       including expense waiver		1.14	%		1.14	%		1.05	%		0.95	%		1.05	% (3)(4)			0.97	%
Ratio of net investment income to       average net assets including       expense waiver		4.80	%		4.90	%		4.51	%		4.59	%		4.56	% (3)(4)			5.27	%
Ratio of expenses to average net assets       excluding expense waiver		1.14	% (5)		1.14	% (5)		1.16	%		1.23	%		1.38	% (3)(4)			1.12	%
Ratio of net investment income to       average net assets excluding       expense waiver		4.80	% (5)		4.90	% (5)		4.40	%		4.31	%		4.22	% (3)(4)			5.12	%
Portfolio turnover rate		98	%		121	%		154	%		200	%		57	%			83	%

(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.

(5)There was no waiver of expenses during the period.

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 fiscal year ended March 31,											For the period from 12-8-03 (1) to
	2008			2007			2006			2005		3-31-04
Net asset value, beginning of period	$	10.59		$	10.44		$	10.68		$	10.96		$	10.87
Income (loss) from investment operations:
Net investment income		0.39			0.40			0.36			0.37			0.12
Net realized and unrealized gain (loss)             on investments		(0.97	)		0.15			(0.24	)		(0.27	)		0.13
Total from investment operations		(0.58	)		0.55			0.12			0.10			0.25
Less distributions from:
Net investment income		(0.39	)		(0.40	)		(0.36	)		(0.37	)		(0.12	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.01	)		(0.04	)
Total distributions		(0.39	)		(0.40	)		(0.36	)		(0.38	)		(0.16	)
Net asset value, end of period	$	9.62		$	10.59		$	10.44		$	10.68		$	10.96
Total return		- -5.62	%		5.45	%		1.12	%		0.92	%		2.32	%
Net assets, end of period (in millions)	$11			$12			$11			$7			$1
Ratio of expenses to average net assets		2.11	%		2.16	%		2.16	%		2.16	%		1.89	% (2)
Ratio of net investment income to average net assets		3.82	%		3.88	%		3.41	%		3.29	%		3.59	% (2)
Portfolio turnover rate		98	%		121	%		154	%		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 fiscal year ended March 31,											For the period from 12-8-03 (1) to
	2008			2007			2006			2005		3-31-04
Net asset value, beginning of period	$	10.59		$	10.44		$	10.68		$	10.96		$	10.87
Income (loss) from investment operations:
Net investment income		0.41			0.42			0.38			0.38			0.12
Net realized and unrealized gain (loss)             on investments		(0.97	)		0.15			(0.24	)		(0.27	)		0.13
Total from investment operations		(0.56	)		0.57			0.14			0.11			0.25
Less distributions from:
Net investment income		(0.41	)		(0.42	)		(0.38	)		(0.38	)		(0.12	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.01	)		(0.04	)
Total distributions		(0.41	)		(0.42	)		(0.38	)		(0.39	)		(0.16	)
Net asset value, end of period	$	9.62		$	10.59		$	10.44		$	10.68		$	10.96
Total return		- -5.43	%		5.69	%		1.34	%		1.05	%		2.32	%
Net assets, end of period (in millions)	$17			$19			$19			$12			$2
Ratio of expenses to average net assets		1.92	%		1.93	%		1.93	%		2.03	%		1.86	% (2)
Ratio of net investment income to average net assets		4.02	%		4.11	%		3.63	%		3.41	%		3.61	% (2)
Portfolio turnover rate		98	%		121	%		154	%		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 E Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	10.59
Income (loss) from investment operations:
Net investment income			0.44
Net realized and unrealized loss on investments			(0.97	)
Total from investment operations			(0.53	)
Less distributions from:
Net investment income			(0.44	)
Capital gains			(0.00	)
Total distributions			(0.44	)
Net asset value, end of period		$	9.62
Total return (2)			- -5.20	%
Net assets, end of period (in thousands)		$294
Ratio of expenses to average net assets			1.73	% (3)
Ratio of net investment income to average net assets			4.20	% (3)
Portfolio turnover rate			98	% (4)

(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)For the twelve months ended March 31, 2008.

See Notes to Financial Statements.

Financial Highlights
     IVY MORTGAGE SECURITIES FUND
     Class I Shares
     For a Share of Capital Stock Outstanding Throughout the Period:

	For the period from 4-2-07 (1) through
	3-31-08
Net asset value, beginning of period		$	10.59
Income (loss) from investment operations:
Net investment income			0.57
Net realized and unrealized loss on investments			(0.97	)
Total from investment operations			(0.40	)
Less distributions from:
Net investment income			(0.57	)
Capital gains			(0.00	)
Total distributions			(0.57	)
Net asset value, end of period		$	9.62
Total return		-4.05		%
Net assets, end of period (in thousands)		$251
Ratio of expenses to average net assets			0.78	% (2)
Ratio of net investment income to average net assets			5.15	% (2)
Portfolio turnover rate			98	% (3)

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the twelve months ended March 31, 2008.

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 fiscal year ended March 31,											For the period from 12-8-03 (1) to
	2008			2007			2006			2005		3-31-04
Net asset value, beginning of period	$	10.59		$	10.44		$	10.68		$	10.96		$	10.87
Income (loss) from investment operations:
Net investment income		0.51			0.52			0.48			0.48			0.15
Net realized and unrealized gain (loss)             on investments		(0.97	)		0.15			(0.24	)		(0.27	)		0.13
Total from investment operations		(0.46	)		0.67			0.24			0.21			0.28
Less distributions from:
Net investment income		(0.51	)		(0.52	)		(0.48	)		(0.48	)		(0.15	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.01	)		(0.04	)
Total distributions		(0.51	)		(0.52	)		(0.48	)		(0.49	)		(0.19	)
Net asset value, end of period	$	9.62		$	10.59		$	10.44		$	10.68		$	10.96
Total return	-4.57		%		6.66	%		2.26	%		1.95	%		2.56	%
Net assets, end of period (in millions)	$9			$13			$7			$6			$3
Ratio of expenses to average net assets		1.01	%		1.00	%		1.03	%		1.12	%		1.09	% (2)
Ratio of net investment income to average net assets		4.93	%		5.04	%		4.53	%		4.41	%		4.38	% (2)
Portfolio turnover rate		98	%		121	%		154	%		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.

Notes to Financial Statements
     March 31, 2008NOTE 1 - Significant Accounting Policies

Ivy Funds (the Trust) is organized as a Massachusetts business trust under a Declaration of Trust dated December 21, 1983, as amended, and is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The Trust issues sixteen series of capital shares; each series represents ownership of a separate mutual fund (Fund). 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. 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 Sto ck Exchange are valued at fair value as determined in good faith under procedures established by and under the general supervision of the Trust's Board of Trustees. Management's valuation committee makes fair value determinations for the Trust, subject to the supervision of the Board of Trustees. Short-term debt securities, purchased with less than 60 days to maturity, 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 incom e is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Fund is informed of the ex-dividend date. Interest income is recorded on the accrual basis. See Note 3 - Investment Securities Transactions.

C. Foreign currency translations - All assets and liabilities denominated in foreign currencies are translated into United States dollars daily. Purchases and sales of investment securities and accruals of income and expenses are translated at the rate of exchange prevailing on the date of the transaction. For assets and liabilities other than investments in securities, net realized and unrealized gains and losses from foreign currency translation arise from changes in currency exchange rates. The Trust combines fluctuations from currency exchange rates and fluctuations in market value when computing net realized and unrealized gain or loss from investments.

D. Forward foreign currency exchange contracts - A forward foreign currency exchange contract (Forward Contract) is an obligation to purchase or sell a specific currency at a future date at a fixed price. Forward Contracts are marked-to-market daily at the applicable translation rates and the resulting unrealized gains or losses are reflected in the Trust's financial statements. Gains or losses are realized by the Trust at the time the Forward Contract is extinguished. Contracts may be extinguished either by entry into a closing transaction or by delivery of the currency. Risks may arise from the possibility that the other party will not complete the obligations of the contract and from unanticipated movements in the value of the foreign currency relative to the United States dollar. The Trust uses Forward Contracts to attempt to reduce the overall risk of its investments.

E. Federal income taxes - It is the Trust's policy to distribute all of its taxable income and capital gains to its shareholders and otherwise qualify as a regulated investment company under Subchapter M of the Internal Revenue Code. In addition, the Trust intends to pay distributions as required to avoid imposition of excise tax. Accordingly, provision has not been made for Federal income taxes. See Note 4 - Federal Income Tax Matters.

F. Dividends and distributions - Dividends and distributions to shareholders are recorded by each Fund on the business day following record date. Net investment income dividends and capital gains distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as deferral of wash sales and post-October losses, foreign currency transactions, net operating losses and expiring capital loss carryovers. At March 31, 2008, the following amounts were reclassified:

	Accumulated Undistributed Net Realized Gain (Loss)				Accumulated Undistributed Net Investment Income				Additional Paid-in Capital
Ivy Dividend Income Fund		$	––			$	126,218			$	(126,218	)
Ivy Small Cap Value Fund			––				1,081,549			(1,081,549		)
Ivy Managed European/Pacific Fund			(101,834	)		101,834					––
Ivy Pacific Opportunities Fund		(2,214,471		)			2,214,471				––
Ivy Global Natural Resources Fund			1,045,981				(1,045,981	)			––

Net investment income and net assets were not affected by these changes.

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 custodian bank.

H. New accounting pronouncements - During the year ended March 31, 2008, the Trust instituted Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109 (FIN 48) with the impact of such adoption being recognized on September 30, 2007 in accordance with guidance provided by the Securities and Exchange Commission. FIN 48 did not have a material effect on the net asset value, financial condition or results of operations of the Trust as there was no liability required for the recognition of unrecognized tax benefits during the year, nor were there any such liabilities to be recorded to the beginning net asset value of the Trust. The Trust is subject to examination by U.S. federal, state and foreign tax authorities for returns filed for years ending after March 31, 2004.

In September 2006, FASB issued Statement on Financial Accounting Standards (SFAS) No. 157, "Fair Value Measurements." SFAS No. 157 defines fair value for purposes of financial statement presentation, establishes a hierarchy for measuring fair value in accordance with generally accepted accounting principles and expands financial statement disclosures about fair value measurements that are relevant to mutual funds. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Trust will institute SFAS No. 157 during 2008 and its potential impact, if any, on its financial statements is currently being assessed by management.

In March 2008, FASB issued Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133" (SFAS 161). SFAS 161 amends and expands disclosures about derivative instruments and hedging activities. SFAS 161 requires qualitative disclosures about the objectives and strategies of derivative instruments, quantitative disclosures about the fair value amounts of and gains and losses on derivative instruments, and disclosures of credit-risk-related contingent features in hedging activities. SFAS 161 is effective for fiscal years beginning after November 15, 2008. The Trust will institute SFAS 161 during 2009 and its potential impact, if any, on its financial statements is currently being assessed by management.

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. 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 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 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%
Ivy Managed European/       Pacific Fund	All levels	0.05%
Ivy Managed International       Opportunities Fund	All levels	0.05%
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 European Opportunities Fund	Up to $250 Million	1.00%
	Over $250 Million up to $500 Million	0.85%
	Over $500 Million	0.75%
Ivy International Balanced Fund	Up to $1 Billion	0.70%
	Over $1 Billion and up to $2 Billion	0.65%
	Over $2 Billion and up to $3 Billion	0.60%
	Over $3 Billion	0.55%
Ivy International Core Equity Fund	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	0.70%
Ivy International Growth Fund	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	0.70%
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 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 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 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 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 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%

These fees are accrued daily and are paid monthly. However, IICO has voluntarily agreed to waive its management fee for Ivy Dividend Income Fund, Ivy Managed European/Pacific Fund and Ivy Managed International Opportunities 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. During the fiscal year ended March 31, 2008, IICO voluntarily waived its fee (in thousands) as shown in the following table:

Ivy Managed European/Pacific Fund	$	2
Ivy Managed International Opportunities Fund		1

Mackenzie Financial Corporation (MFC) serves as subadvisor to Ivy Global Natural Resources Fund under an agreement with IICO and receives a fee as follows: 0.50% of the 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.

As of December 7, 2006, MFC also serves as subadvisor to Ivy Cundill Global Value Fund under an agreement with IICO and receives a fee as follows:

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%

MFC was the interim subadvisor to Ivy Cundill Global Value Fund from September 22, 2006 until December 7, 2006. Prior to September 22, 2006, Cundill Investment Research Ltd. served as subadvisor to the Fund.

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. 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.

Effective March 24, 2008, IICO serves as investment manager to Ivy Small Cap Value Fund. From February 2, 2007 to March 24, 2008, BlackRock Capital Management, Inc. 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.

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 net 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, other than Ivy Managed European/Pacific Fund and Ivy Managed International Opportunities Fund (the Ivy Managed Funds), 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 Accounting and Administrative Services Agreement for the Ivy Managed Funds, each Fund pays WRSCO, for its services, a monthly fee of one-twelfth of the annual fee shown in the following table:

Accounting and Administrative Services Fee
	Average Net Asset Level (in millions)						Annual Fee Rate for Each Level
	From	$	0	to	$	10		$	0
	From	$	10	to	$	25		$	5,748
	From	$	25	to	$	50		$	11,550
	From	$	50	to	$	100		$	17,748
	From	$	100	to	$	200		$	24,198
	From	$	200	to	$	350		$	31,602
	From	$	350	to	$	550		$	41,250
	From	$	550	to	$	750		$	48,150
	From	$	750	to	$	1,000		$	60,798
		$	1,000 and Over					$	74,250

In addition, for each class of shares in excess of one, each of the Ivy Managed Funds pays WRSCO a monthly per-class fee equal to 1.25% of the monthly accounting services base fee.

Under the Shareholder Servicing Agreement, except for the Ivy Managed Funds, with respect to Class A, Class B, Class C, Class E and Advisor Class, 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 Growth Fund, Ivy International Core Equity Fund and Ivy Pacific Opportunities Fund each pay WRSCO a monthly fee of $1.5042. For Class I and Class Y shares, each Fund pays WRSCO a monthly fee at an annual rate of 0.15% of the average daily net assets of the class for the preceding month. For Class R shares, each Fund pays WRSCO a monthly fee at an annual rate of 0.20% of the average daily net assets of the class for the preceding month. Effective September 1, 2006, the Shareholder Servicing Agreement with respect to Class A, Class B and Class C shares has been revised so that each Fund pays WRSCO an annual fee (payable monthly) for each account of the Fund that is non-networked and is as shown above; however, WRSCO has agreed to reduce that fee if the number of total shareholders accounts within the Complex (Waddell & Reed Advisors Funds, Waddell & Reed InvestEd Porfolios, Inc., Ivy Funds and Ivy Funds, Inc.) reaches certain levels. For certain networked accounts (that is, those accounts whose Fund shares are purchased through certain intermediaries), WRSCO has agreed to reduce its per account fees charged to the Funds to $0.50 per month per shareholder account. Additional fees may be paid by the Funds to those intermediaries. 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 a n 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).

Under the Shareholder Servicing Agreement for the Ivy Managed Funds, no fee is charged to the Ivy Managed Funds as compensation for services rendered under this Shareholder Servicing Agreement. The Ivy Managed Funds do, however, reimburse any out-of-pocket expenses incurred by WRSCO in the performance of its duties under this Agreement, including long distance telephone communications costs; microfilm and storage costs for certain documents; forms, printing and mailing costs; charges of any sub-agent used by WRSCO in performing services under the Shareholder Servicing Agreement; and costs of legal and special services not provided by Ivy Funds Distributor, Inc. (IFDI), IICO or WRSCO.

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 and Class E 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 and Class E shares and is paid to IFDI. During the fiscal year ended March 31, 2008, IFDI received the following amounts in sales commissions and CDSC:

	Sales Commissions			CDSC
				Class A		Class B		Class C		Class E
Ivy Dividend Income Fund		$	514,211	$	75	$	13,789	$	2,720	$	––
Ivy Small Cap Value Fund			365,561		2,068		8,657		506		––
Ivy Value Fund			132,385		––		2,392		454		––
Ivy Managed European/      Pacific Fund			463,262		––		406		655		––
Ivy Managed International      Opportunities Fund			682,758		7		2,077		1,129		––
Ivy Cundill Global Value Fund			1,046,729		3,910		101,259		12,239		––
Ivy European      Opportunities Fund			1,268,405		1,203		35,519		8,079		––
Ivy International      Balanced Fund			681,497		1,267		10,586		7,604		––
Ivy International      Core Equity Fund			624,216		89		5,836		3,219		––
Ivy International Growth Fund			184,776		141		9,804		959		––
Ivy Pacific Opportunities Fund			1,975,248		450		23,698		6,158		––
Ivy Balanced Fund			108,508		837		2,163		447		––
Ivy Global Natural      Resources Fund	6,373,984				6,077		417,069		157,777		––
Ivy Real Estate Securities Fund			918,314		2,606		24,014		4,669		––
Ivy Bond Fund			183,377		3,563		1,848		742		––
Ivy Mortgage Securities Fund			420,677		775		26,325		3,058		––

With respect to Class A, Class B, Class C and Class E 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 fiscal year ended March 31, 2008, IFDI paid the following amounts:

Ivy Dividend Income Fund	$	584,889
Ivy Small Cap Value Fund		387,418
Ivy Value Fund		148,226
Ivy Managed European/Pacific Fund		417,451
Ivy Managed International Opportunities Fund		618,259
Ivy Cundill Global Value Fund		1,238,571
Ivy European Opportunities Fund		1,417,505
Ivy International Balanced Fund		893,461
Ivy International Core Equity Fund		858,286
Ivy International Growth Fund		233,393
Ivy Pacific Opportunities Fund		2,107,630
Ivy Balanced Fund		114,308
Ivy Global Natural Resources Fund		11,941,672
Ivy Real Estate Securities Fund		969,887
Ivy Bond Fund		191,758
Ivy Mortgage Securities Fund		443,185

Under a Distribution and Service Plan for Class A, Class B, Class C, Class E, Class R and Class Y shares adopted by the Trust on behalf of each Fund (other than the Ivy Managed European/Pacific Fund and Ivy Managed International Opportunities Fund) and a Distribution and Service Plan for Class A, Class B, Class C, Class E and Class Y shares adopted by the Trust on behalf of the Ivy Managed European/Pacific Fund and Ivy Managed International Opportunities Fund, each Fund may pay certain amounts pursuant to Rule 12b-1 under the Investment Company Act of 1940. For Class A shares, each 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 (or compensate IFDI with respect to Ivy Managed European/Pacific Fund and Ivy Managed International Opportunities Fund) 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.

For Class B and Class C shares shares, each 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 (or compensate IFDI with respect to Ivy Managed European/Pacific Fund and Ivy Managed International Opportunities Fund) for amounts it expends in connection with the provision of personal services to Fund shareholders and/or maintenance of shareholder accounts.

For Class B shares and Class C shares, each 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.

For Class E shares, each Fund may pay IFDI, the principal underwriter for the Fund, a fee up to 0.25% of the Fund's average annual net assets attributable to Class E shares, paid daily, to compensate IFDI for its costs and expenses in connection with, either directly or through others, the distribution of the Class E shares, the provision of personal services to Class E shareholders and/or maintenance of Class E shareholder accounts. The Class E Plan permits IFDI to be compensated for these Class E-related distribution activities through the distribution fee, subject to the limit contained in the Plan. The Class E Plan also permits IFDI to be compensated for amounts it expends: in compensating, training and supporting registered financial advisors, sales manager and/or other appropriate personnel in providing personal services to Class E shareholders of the funds and/or maintaining Class E shareholder accounts; increasing services provided to Class E shareholders of the Funds by office personnel located at f ield sales offices; engaging in other activities useful in providing personal service to Class E shareholders of the Funds and/or maintenance of Class E shareholder accounts; and in compensating broker-dealers and other third parties who may regularly sell Class E shares of the Funds, and may regularly provide shareholder services and/or maintain shareholder accounts with respect to Class E shares.

For Class R shares of Ivy Global Natural Resources Fund and Ivy Real Estate Securities Fund, each Fund may pay IFDI a fee of up to 0.50%, 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 R shares of that Fund, providing personal service to Class R shareholders and/or maintenance of Class R shareholder accounts.

For Class Y shares, each 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 Core Equity Fund and Ivy Pacific Opportunities Fund, IICO has contractually agreed to reimburse a Fund's expenses, for the calendar year ended December 31, 2006, and for the following five 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% of the Fund's average net assets (excluding 12b-1 fees and certain other expenses). During the fiscal year ended March 31, 2008, IICO did not reimburse any expenses under this agreement.

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 fiscal year ended March 31, 2008, IFDI reimbursed the Fund's service fees (in thousands) as shown:

Ivy Cundill Global Value Fund, Class Y	$	29
Ivy Global Natural Resources Fund, Class Y		317

During the fiscal year ended March 31, 2008, the Funds paid Trustees' regular compensation of $459,723, which is included in other expenses.

The Funds have adopted an Expense Reimbursement Plan regarding the Service Fees paid by Class A, Class B and Class C. The Plan allows for the current payment of expenses from prior years that were not paid at that time due to the respective Class at the 0.25% limit for reimbursement. In future years, should a Class have Service Fees below the 0.25% limit, IFDI could at that time request payment of some or all of the amounts disclosed below, still subject to the 0.25% limit:

	Class A		Class B		Class C
Ivy Dividend Income Fund	$	41,540	$	110	$	17,736
Ivy Small Cap Value Fund		78,924		249		10,399
Ivy Value Fund		24,255		143		1,446
Ivy Cundill Global Value Fund		367,131		923		31,561
Ivy European Opportunities Fund		178,640		166		28,579
Ivy International Balanced Fund		119,694		123		24,840
Ivy International Core Equity Fund		90,995		1,431		26,392
Ivy International Growth Fund		218,605		1,278		6,283
Ivy Pacific Opportunities Fund		188,197		621		44,264
Ivy Balanced Fund		19,351		163		3,958
Ivy Global Natural Resources Fund		730,677		11,607		335,688
Ivy Real Estate Securities Fund		196,827		355		20,941
Ivy Bond Fund		28,479		43		5,538
Ivy Mortgage Securities Fund		155,284		2		29,535

The Funds have not recorded a liability for this potential reimbursement since the obligation to reimburse for these unrecovered service fees ceases upon termination of the expense reimbursement plan.

NOTE 3 - Investment Securities Transactions

Investment securities transactions for the fiscal year ended March 31, 2008 are summarized as follows:

	Ivy Dividend Income Fund		Ivy Small Cap Value Fund		Ivy Value Fund
Purchases of investment securities,      excluding short-term and      U.S. government securities	$	102,268,492	$	178,608,494	$	53,400,848
Purchases of U.S. government      securities		––		––		––
Purchases of short-term securities		1,504,375,755		900,593,014		622,533,849
Purchases of options		––		––		32,056
Proceeds from maturities and sales      of investment securities, excluding      short-term and U.S. government      securities		48,594,140		183,284,332		62,407,816
Proceeds from maturities and sales      of U.S. government securities		––		––		––
Proceeds from maturities and sales      of short-term securities		1,494,850,783		903,923,490		623,465,584
Proceeds from options		––		––		20,735

	Ivy Managed European/ Pacific Fund		Ivy Managed International Opportunities Fund		Ivy Cundill Global Value Fund
Purchases of investment securities,      excluding short-term and      U.S. government securities	$	67,995,209	$	116,978,998	$	296,852,625
Purchases of U.S. government      securities		––		––		––
Purchases of short-term securities		103,344,000		195,733,000		19,729,920,647
Proceeds from maturities and sales      of investment securities,      excluding short-term and      U.S. government securities		134,389		––	��	602,278,945
Proceeds from maturities and sales      of U.S. government securities		––		––		––
Proceeds from maturities and sales      of short-term securities	103,183,000			195,192,000		19,822,794,000

	Ivy European Opportunities Fund		Ivy International Balanced Fund		Ivy International Core Equity Fund
Purchases of investment      securities, excluding short-term      and U.S. government securities	$	409,010,749	$	180,944,883	$	355,299,737
Purchases of U.S. government      securities		––		––		––
Purchases of short-term securities		2,699,581,964		1,676,067,719		1,485,558,632
Proceeds from maturities and      sales of investment securities,      excluding short-term and      U.S. government securities		368,744,140		69,861,377		265,654,516
Proceeds from maturities and      sales of U.S. government      securities		––		––		––
Proceeds from maturities and      sales of short-term securities		2,681,896,595		1,703,704,995		1,479,498,907

	Ivy International Growth Fund		Ivy Pacific Opportunities Fund		Ivy Balanced Fund
Purchases of investment securities,      excluding short-term and      U.S. government securities	$	255,752,080	$	595,536,558	$	8,302,024
Purchases of U.S. government      securities		––		––		––
Purchases of short-term securities		1,292,450,132		1,624,583,413		885,087,772
Purchases of options		––		3,600,005		––
Proceeds from maturities and sales      of investment securities, excluding      short-term and U.S. government      securities		264,896,263		547,723,547		19,514,721
Proceeds from maturities and sales      of U.S. government securities		––		––		900,000
Proceeds from maturities and sales      of short-term securities		1,278,347,959		1,631,723,512		875,192,927
Proceeds from options		––		337,500		––

	Ivy Global Natural Resources Fund		Ivy Real Estate Securities Fund		Ivy Bond Fund
Purchases of investment securities,      excluding short-term and      U.S. government securities	$	11,478,473,894	$	141,565,207	$	37,873,404
Purchases of U.S. government      securities		––		––		57,785,909
Purchases of short-term securities		13,786,307,511		1,105,252,126		814,296,505
Proceeds from maturities and sales      of investment securities,      excluding short-term and      U.S. government securities		9,808,322,353		335,351,444		24,600,137
Proceeds from maturities and sales      of U.S. government securities		––		––		36,452,869
Proceeds from maturities and sales      of short-term securities		13,862,810,378		1,090,102,834		811,084,829

	Ivy Mortgage Securities Fund
Purchases of investment securities, excluding short-term and      U.S. government securities	$	47,422,143
Purchases of U.S. government securities		268,371,271
Purchases of short-term securities		2,250,536,769
Proceeds from maturities and sales of investment securities,      excluding short-term and U.S. government securities		33,039,580
Proceeds from maturities and sales of U.S. government securities		280,660,540
Proceeds from maturities and sales of short-term securities		2,247,231,924

For Federal income tax purposes, cost of investments owned at March 31, 2008 and the related unrealized appreciation (depreciation) were as follows:

	Cost		Appreciation		Depreciation		Aggregate Appreciation (Depreciation)
Ivy Dividend      Income Fund	$	175,151,648	$	34,254,357	$	4,869,156	$	29,385,201
Ivy Small Cap      Value Fund		132,896,699		10,661,927		11,823,212		(1,161,285	)
Ivy Value Fund		59,109,581		11,146,586		4,592,899		6,553,687
Ivy Managed      European/      Pacific Fund		68,020,464		––		9,801,189		(9,801,189	)
Ivy Managed      International      Opportunities      Fund		117,519,998		––		8,673,371		(8,673,371	)
Ivy Cundill Global      Value Fund		508,325,096		99,898,655		66,607,248		33,291,407
Ivy European      Opportunities Fund		528,127,007		61,735,414		50,171,284		11,564,130
Ivy International      Balanced Fund		338,742,712		42,477,147		25,559,766		16,917,381
Ivy International Core      Equity Fund		306,188,663		26,102,431		17,813,199		8,289,232
Ivy International      Growth Fund		209,087,065		50,986,729		9,441,373		41,545,356
Ivy Pacific      Opportunities Fund		503,234,550		78,583,921		42,850,387		35,733,534
Ivy Balanced Fund		77,307,331		19,946,903		511,909		19,434,994
Ivy Global Natural      Resources Fund		7,176,492,409		1,245,311,448		252,510,147		992,801,301
Ivy Real Estate      Securities Fund		347,937,384		70,717,388		16,415,090		54,302,298
Ivy Bond Fund		110,134,997		1,546,271		7,033,653		(5,487,382	)
Ivy Mortgage      Securities Fund		341,144,446		2,492,509		32,343,362		(29,850,853	)

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, 2008 and the related net capital losses and post-October activity were as follows:

	Ivy Dividend Income Fund		Ivy Small Cap Value Fund		Ivy Value Fund
Net ordinary income	$	1,115,752	$	––	$	435,800
Distributed ordinary income		1,145,140		4,223,778		1,419,592
Undistributed ordinary income		––		––		27,335
Realized long-term capital gains		580,376		2,336,081		3,768,568
Distributed long-term capital gains		2,015,803		4,522,035		4,646,513
Undistributed long-term capital gains		––		1,111		610
Net capital losses		––		––		––
Post-October losses deferred		2,965,587		11,448,396		1,800,947

	Ivy Managed European/ Pacific Fund		Ivy Managed International Opportunities Fund			Ivy Cundill Global Value Fund
Net ordinary income	$	2,036,791		$	2,574,430	$	18,490,783
Distributed ordinary income		2,036,791			2,468,124		28,868,415
Undistributed ordinary income		––			106,306		858,386
Realized long-term capital gains		2,577,102			2,171,746		22,751,359
Distributed long-term capital gains		101,834			––		41,944,816
Undistributed long-term capital gains		2,475,268			2,171,746		3,183
Net capital losses		––			––		––
Post-October losses deferred		––			––		33,237,072

	Ivy European Opportunities Fund		Ivy International Balanced Fund		Ivy International Core Equity Fund
Net ordinary income	$	16,685,716	$	15,221,467	$	12,288,974
Distributed ordinary income		15,290,384		12,128,367		15,229,537
Undistributed ordinary income		2,156,824		5,042,647		3,450,991
Realized long-term capital gains		57,537,576		11,890,591		9,027,111
Distributed long-term capital gains		48,944,506		6,489,354		9,412,743
Undistributed long-term capital gains		18,952,359		7,325,446		4,710,841
Net capital losses		––		––		––
Post-October losses deferred		540,853		––		––

	Ivy International Growth Fund			Ivy Pacific Opportunities Fund		Ivy Balanced Fund
Net ordinary income		$	155,242	$	51,357,085	$	1,718,157
Distributed ordinary income			402,130		48,093,720		1,717,894
Undistributed ordinary income			75,196		17,772,429		39,048
Realized long-term capital gains			––		45,757,101		1,586,143
Distributed long-term capital gains			––		14,296,128		2,238,984
Undistributed long-term capital gains			––		35,672,676		184
Net capital losses			––		––		––
Post-October losses deferred			––		895,059		845,565

	Ivy Global Natural Resources Fund		Ivy Real Estate Securities Fund		Ivy Bond Fund
Net ordinary income	$	589,906,320	$	4,215,012	$	3,919,498
Distributed ordinary income		416,921,811		9,990,006		3,908,121
Undistributed ordinary income		248,854,949		1,310,436		47,586
Realized long-term capital gains		777,184,161		20,858,688		––
Distributed long-term capital gains		315,419,590		33,727,709		––
Undistributed long-term capital gains		540,665,321		1,531		––
Net capital losses		––		––		––
Post-October losses deferred		23,987,686		4,882,240		––

	Ivy Mortgage Securities Fund
Net ordinary income	$	15,559,407
Distributed ordinary income		15,549,194
Undistributed ordinary income		187,175
Realized long-term capital gains		––
Distributed long-term capital gains		––
Undistributed long-term capital gains		––
Net capital losses		902,106
Post-October losses deferred		1,450,090

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 incurred in the eight taxable years succeeding the loss year for Federal income tax purposes. The following shows the totals by year in which the capital loss carryovers will expire if not utilized.

	Ivy International Growth Fund		Ivy Pacific Opportunities Fund
March 31, 2009	$	50,885,086		$	157,220
March 31, 2010		146,210,535			157,220
March 31, 2011		47,213,802			––
Total carryover	$	244,309,423		$	314,440

	Ivy Bond Fund		Ivy Mortgage Securities Fund
March 31, 2014	$	––	$	164,447
March 31, 2015		335,409		484,106
March 31, 2016		––		902,106
Total carryover	$	338,409	$	1,550,659

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 March 31, 2009 and 2010 plus any unused limitations from prior year.

Ivy International Growth Fund was merged into Ivy International Growth Fund (formerly, Ivy International Fund) as of March 27, 2006. At the time of the merger, Ivy International Growth Fund had capital loss carryovers available to offset future gains of the Ivy International Fund. These carryovers are limited to $10,637,438 for the period ending March 31, 2009 and $3,234,412 for the period ending March 31, 2010 plus any unused limitations from prior year and the amount of certain built-in gains realized, if any.

Note 5 - Multiclass Operations

Each Fund within the Trust offers five classes of shares, Class A, Class B, Class C, Class I and Class Y, and all Funds except Ivy Small Cap Value Fund, Ivy Value Fund, Ivy Managed European/Pacific Fund, Ivy Managed International Opportunities Fund, Ivy European Opportunities Fund, Ivy International Growth Fund, Ivy Pacific Opportunities Fund and Ivy Balanced Fund offer Class E shares to the public. Each share class has equal rights as to assets and voting privileges. In addition, Ivy Global Natural Resources Fund and Ivy Real Estate Securities Fund offer Class R shares, which also have equal rights as to assets and voting privileges. Ivy Cundill Global Value Fund, Ivy European Opportunities Fund, Ivy Pacific Opportunities Fund and Ivy Global Natural Resources Fund also offered Advisor Class shares. Advisor Class shares are no longer available for 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 I nformation for the Trust.

Income, non-class specific expenses, and realized and unrealized gains and losses are allocated daily to each class of shares based on the value of their relative net assets as of the beginning of each day adjusted for the prior day's capital share activity.

Transactions in capital stock for the fiscal year ended March 31, 2008 are summarized below. Amounts are in thousands.

	Ivy Dividend Income Fund				Ivy Small Cap Value Fund
Shares issued from sale of shares:
Class A			4,850				3,446
Class B			221				107
Class C			678				128
Class E			134				6
Class I			6				48
Class Y			719				131
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A			144				474
Class B			7				22
Class C			16				35
Class E			1				––	*
Class I			––	*			2
Class Y			4				65
Shares redeemed:
Class A			(2,574	)			(3,327	)
Class B			(212	)			(234	)
Class C			(419	)			(315	)
Class E			(11	)			(––	)
Class I			(––	)			(15	)
Class Y			(120	)			(451	)
Increase in outstanding capital shares			3,444				122
*Not shown due to rounding.
Value issued from sale of shares:
Class A		$	81,475			$	52,888
Class B			3,680				1,584
Class C			11,355				1,921
Class E			2,304				100
Class I			100				778
Class Y			12,095				1,985
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A			2,518				6,794
Class B			128				306
Class C			282				483
Class E			21				6
Class I			2				31
Class Y			60				938
Value redeemed:
Class A		(43,339		)		(50,030		)
Class B			(3,556	)			(3,376	)
Class C			(6,973	)			(4,582	)
Class E		(196		)			(––	)
Class I		(––		)			(232	)
Class Y		(1,982		)			(7,079	)
Increase in outstanding capital		$	57,974			$	2,515

	Ivy Value Fund				Ivy Managed European/ Pacific Fund				Ivy Managed International Opportunities Fund
Shares issued from sale of shares:
Class A			1,215				5,764				10,440
Class B			92				159				398
Class C			93				254				406
Class E			5				20				20
Class I			5				20				20
Class Y			11				28				43
Shares issued from reinvestment       of dividends and/or capital       gains distribution:
Class A			290				178				215
Class B			21				5				6
Class C			18				8				7
Class E			––	*			1				1
Class I			––	*			1				1
Class Y			1				1				1
Shares redeemed:
Class A			(1,727	)			(478	)			(703	)
Class B			(162	)			(24	)			(42	)
Class C			(154	)			(12	)			(46	)
Class E			(––	)			(––	)			(––	)
Class I			(––	)			(––	)			(––	)
Class Y			(2	)			(––	)			(––	)*
Increase (decrease) in       outstanding capital shares			(294	)			5,925				10,767
*Not shown due to rounding.
Value issued from sale of shares:
Class A		$	23,306			$	63,478			$	111,227
��   Class B			1,750				1,743				4,237
Class C			1,774				2,828				4,287
Class E			100				200				200
Class I			100				200				200
Class Y			185				283				456
Value issued from reinvestment       of dividends and/or capital       gains distribution:
Class A			5,180				1,938				2,280
Class B			360				50				65
Class C			310				89				73
Class E			7				10				7
Class I			8				11				7
Class Y			22				13				13
Value redeemed:
Class A		(31,497		)		(5,029		)		(7,406		)
Class B			(2,919	)			(264	)		(456		)
Class C			(2,797	)			(125	)		(483		)
Class E			(––	)			(––	)			(––	)
Class I			(––	)			(––	)			(––	)
Class Y			(28	)			(––	)			(4	)
Increase (decrease) in       outstanding capital		$	(4,139	)		$	65,425			$	114,703

	Ivy Cundill Global Value Fund				Ivy European Opportunities Fund				Ivy International Balanced Fund
Shares issued from sale of shares:
Class A			7,452				3,662				5,434
Class B			275				246				250
Class C			1,219				373				1,450
Class E			31				3				46
Class I			173				1,434				2,667
Class Y			211				49				200
Advisor Class			––				3				NA
Class II			––				NA				NA
Shares issued from reinvestment       of dividends and/or capital       gains distribution:
Class A			3,403				1,143				769
Class B			258				113				30
Class C			813				142				102
Class E			2				––	*			1
Class I			13				118				97
Class Y			59				15				3
Advisor Class			19				3				NA
Class II			––				NA				NA
Shares redeemed:
Class A			(18,983	)			(3,156	)			(4,313	)
Class B			(1,309	)			(571	)			(193	)
Class C			(8,863	)			(471	)			(747	)
Class E			(2	)			(––	)			(1	)
Class I			(55	)			(29	)			(12	)
Class Y			(583	)			(115	)			(92	)
Advisor Class			(34	)			(9	)			NA
Class II			(2	)			NA				NA
Increase (decrease) in       outstanding capital shares			(15,903	)			2,953				5,691
*Not shown due to rounding.
Value issued from sale of shares:
Class A		$	116,197			$	150,552			$	93,333
Class B			4,131				9,926				4,244
Class C			18,952				14,778				25,015
Class E			487				100				783
Class I			2,793				58,674				45,814
Class Y			3,209				2,024				3,389
Advisor Class			––				97				NA
Class II			––				NA				NA
Value issued from reinvestment of dividends and/or capital gains distribution:
Class A			48,928				44,135				13,166
Class B			3,631				4,191				519
Class C			11,392				5,317				1,744
Class E			34				11				25
Class I			188				4,571				1,654
Class Y			852				580				46
Advisor Class			277				101				NA
Class II			––				NA				NA
Value redeemed:
Class A		(286,653		)		(125,648		)		(73,971		)
Class B			(19,233	)		(21,682		)			(3,296	)
Class C			(130,403	)			(17,803	)		(12,642		)
Class E			(23	)			(––	)			(13	)
Class I			(843	)			(1,199	)			(203	)
Class Y			(8,874	)			(4,619	)			(1,571	)
Advisor Class			(516	)			(352	)			NA
Class II			(25	)			NA				NA
Increase (decrease) in outstanding capital		$	(235,499	)		$	123,754			$	98,036

	Ivy International Core Equity Fund				Ivy International Growth Fund				Ivy Pacific Opportunities Fund
Shares issued from sale of shares:
Class A			5,995				789				9,852
Class B			311				42				387
Class C			1,251				133				761
Class E			65				3				6
Class I			1,270				593				2,094
Class Y			459				16				260
Advisor Class			––				––				––
Class II			NA				––				NA
Shares issued from reinvestment of       dividends and/or capital       gains distribution:
Class A			844				7				2,325
Class B			47				––				117
Class C			162				––				191
Class E			4				––	*			1
Class I			77				2				149
Class Y			25				––	*			39
Advisor Class			––				––				1
Class II			NA				––	*			NA
Shares redeemed:
Class A			(2,976	)			(1,081	)			(7,611	)
Class B			(413	)			(96	)			(477	)
Class C			(606	)			(299	)			(786	)
Class E			(3	)			(––	)			(––	)
Class I			(18	)			(24	)			(93	)
Class Y			(106	)			(68	)			(372	)
Advisor Class			(––	)*			(––	)*			(––	)
Class II			NA				(9	)			NA
Increase in outstanding       capital shares			6,388				8				6,844
*Not shown due to rounding.
Value issued from sale of shares:
Class A		$	111,517			$	29,963			$	201,372
Class B			5,340				1,415				7,206
Class C			21,399				4,596				15,041
Class E			1,197				100				100
Class I			23,654				22,300				42,320
Class Y			8,284				600				5,567
Advisor Class			––				––				––
Class II			NA				––				NA
Value issued from reinvestment of       dividends and/or capital       gains distribution:
Class A			15,658				265				49,834
Class B			804				––				2,296
Class C			2,762				––				3,788
Class E			72				––	*			13
Class I			1,430				59				3,223
Class Y			458				5				834
Advisor Class			––				––				12
Class II			NA				1				NA
Value redeemed:
Class A		(54,756		)		(40,504		)		(151,434		)
Class B		(7,063		)			(3,310	)			(8,705	)
Class C			(10,068	)		(10,278		)			(14,352	)
Class E			(60	)			(––	)			(––	)
Class I			(340	)			(901	)			(1,857	)
Class Y			(1,893	)			(2,424	)			(6,956	)
Advisor Class			(1	)			(1	)			(––	)
Class II			NA				(327	)			NA
Increase in outstanding capital		$	118,394			$	1,559			$	148,302
*Not shown due to rounding.

	Ivy Balanced Fund				Ivy Global Natural Resources Fund				Ivy Real Estate Securities Fund
Shares issued from sale of shares:
Class A			736				55,612				3,497
Class B			52				1,955				102
Class C			144				16,928				141
Class E			6				79				22
Class I			6				1,881				94
Class R			NA				636				3
Class Y			178				14,190				214
Advisor Class			NA				––	*			NA
Shares issued from reinvestment       of dividends and/or capital       gains distribution:
Class A			142				10,279				1,329
Class B			5				688				62
Class C			5				3,486				66
Class E			––	*			5				2
Class I			––	*			114				7
Class R			NA				32				1
Class Y			65				1,708				675
Advisor Class			NA				1				NA
Shares redeemed:
Class A			(766	)			(30,526	)			(6,872	)
Class B			(33	)			(1,695	)			(344	)
Class C			(94	)			(7,152	)			(516	)
Class E			(––	)			(2	)			(2	)
Class I			(––	)			(49	)			(39	)
Class R			NA				(113	)			(1	)
Class Y			(404	)			(3,472	)			(4,826	)
Advisor Class			NA				(1	)			NA
Increase (decrease) in outstanding       capital shares			42				64,584				(6,385	)
*Not shown due to rounding.
Value issued from sale of shares:
Class A		$	12,611			$	2,067,009			$	79,829
Class B			877				68,577				2,333
Class C			2,471				581,343				3,288
Class E			100				2,930				532
Class I			100				68,389				2,408
Class R			NA				23,676				74
Class Y			3,067				528,496				4,733
Advisor Class			NA				3				NA
Value issued from reinvestment       of dividends and/or capital       gains distribution:
Class A			2,489				391,527				26,473
Class B			88				24,609				1,224
Class C			94				121,921				1,305
Class E			4				186				35
Class I			5				4,374				135
Class R			NA				1,236				15
Class Y			1,146				65,199				13,488
Advisor Class			NA				37				NA
Value redeemed:
Class A		(13,091		)		(1,124,546		)		(152,493		)
Class B			(573	)			(58,685	)			(7,458	)
Class C			(1,605	)			(241,166	)			(11,542	)
Class E			(––	)		(71		)		(33		)
Class I			(––	)		(1,821		)		(872		)
Class R			NA			(4,175		)		(22		)
Class Y			(6,956	)		(128,331		)		(112,045		)
Advisor Class			NA				(38	)			NA
Increase (decrease) in       outstanding capital		$	827			$	2,390,679			$	(148,593	)

	Ivy Bond Fund				Ivy Mortgage Securities Fund
Shares issued from sale of shares:
Class A			4,751				9,682
Class B			143				434
Class C			527				680
Class E			83				32
Class I			19				34
Class Y			2				493
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A			217				1,210
Class B			7				42
Class C			14				66
Class E			2				1
Class I			1				1
Class Y			––	*			44
Shares redeemed:
Class A			(1,485	)			(10,536	)
Class B			(73	)			(400	)
Class C			(398	)			(835	)
Class E			(3	)			(2	)
Class I			(1	)			(9	)
Class Y			(4	)			(845	)
Increase in outstanding capital shares			3,802				92
Value issued from sale of shares:
Class A		$	48,475			$	100,326
Class B			1,467				4,501
Class C			5,385				7,030
Class E			851				334
Class I			196				360
Class Y			25				5,119
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A			2,204				12,454
Class B			69				431
Class C			139				684
Class E			18				9
Class I			8				13
Class Y			––	*			459
Value redeemed:
Class A		(15,108		)		(108,564		)
Class B		(747		)			(4,126	)
Class C		(4,059		)			(8,610	)
Class E		(26		)			(23	)
Class I		(14		)			(96	)
Class Y		(42		)			(8,695	)
Increase in outstanding capital		$	38,841			$	1,606
*Not shown due to rounding.

Transactions in capital stock for the fiscal year ended March 31, 2007 are summarized below. Amounts are in thousands.

	Ivy Dividend Income Fund			Ivy Small Cap Value Fund
Shares issued from sale of shares:
Class A		3,823				3,124
Class B		242				170
Class C		498				279
Class Y		137				328
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A		127				494
Class B		8				38
Class C		17				57
Class Y		2				100
Shares redeemed:
Class A		(1,412	)			(1,460	)
Class B		(107	)			(98	)
Class C		(240	)			(172	)
Class Y		(26	)			(615	)
Increase in outstanding capital shares		3,069				2,245
Value issued from sale of shares:
Class A	$	57,590			$	50,177
Class B		3,622				2,628
Class C		7,446				4,335
Class Y		2,107				5,363
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A		1,941				7,895
Class B		126				582
Class C		259				882
Class Y		26				1,623
Value redeemed:
Class A	(21,237		)		(23,341		)
Class B	(1,609		)			(1,509	)
Class C	(3,596		)			(2,691	)
Class Y	(392		)		(10,060		)
Increase in outstanding capital	$	46,283			$	35,884

	Ivy Value Fund			Ivy Cundill Global Value Fund
Shares issued from sale of shares:
Class A		1,485				11,695
Class B		130				586
Class C		118				3,326
Class Y		78				196
Advisor Class		NA				––
Class II		NA				––
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A		105				2,079
Class B		6				161
Class C		6				641
Class Y		3				39
Advisor Class		NA				11
Class II		NA				––	*
Shares redeemed:
Class A		(1,195	)		(11,797		)
Class B		(94	)			(831	)
Class C		(85	)			(3,225	)
Class Y		(780	)			(361	)
Advisor Class		NA				(20	)
Class II		NA				(––	)
Increase (decrease) in outstanding capital shares		(223	)			2,500
Value issued from sale of shares:
Class A	$	26,492			$	181,422
Class B		2,306				8,886
Class C		2,080				50,324
Class Y		1,375				3,046
Advisor Class		NA				––
Class II		NA				––
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A		1,951				32,120
��   Class B		119				2,444
Class C		104				9,682
Class Y		59				602
Advisor Class		NA				173
Class II		NA				1
Value redeemed:
Class A	(21,241		)		(182,765		)
Class B	(1,660		)			(12,526	)
Class C	(1,501		)			(48,759	)
Class Y	(14,417		)			(5,541	)
Advisor Class		NA				(321	)
Class II		NA				(––	)
Increase (decrease) in outstanding capital	$	(4,333	)		$	38,788
*Not shown due to rounding.

	Ivy European Opportunities Fund				Ivy International Balanced Fund				Ivy International Core Equity Fund
Shares issued from sale of shares:
Class A			4,299				7,862				5,938
Class B			270				576				464
Class C			431				1,287				1,226
Class Y			110				83				199
Advisor Class			––				NA				––
Shares issued from reinvestment       of dividends and/or capital       gains distribution:
Class A			88				566				292
Class B			4				29				21
Class C			5				56				56
Class Y			2				3				5
Advisor Class			––	*			NA				––
Shares redeemed:
Class A			(1,798	)			(1,840	)			(1,416	)
Class B			(310	)			(253	)			(440	)
Class C			(348	)			(182	)			(231	)
Class Y			(50	)			(31	)			(52	)
Advisor Class			(19	)			NA				(––	)
Increase in outstanding capital shares			2,684				8,156				6,062
Value issued from sale of shares:
Class A		$	155,748			$	127,445			$	97,987
Class B			9,546				9,278				7,113
Class C			15,127				20,788				18,787
Class Y			4,028				1,362				3,361
Advisor Class			––				NA				––
Value issued from reinvestment of       dividends and/or capital       gains distribution:
Class A			3,391				9,230				4,915
Class B			136				472				328
Class C			198				914				877
Class Y			68				53				83
Advisor Class			12				NA				––
Value redeemed:
Class A		(64,019		)		(29,494		)		(23,415		)
Class B			(10,625	)			(4,181	)		(6,571		)
Class C			(11,838	)			(2,929	)		(3,545		)
Class Y			(1,746	)			(502	)			(847	)
Advisor Class			(672	)			NA				(––	)
Increase in outstanding capital		$	99,354			$	132,436			$	99,073
*Not shown due to rounding.

	Ivy International Growth Fund				Ivy Pacific Opportunities Fund
Shares issued from sale of shares:
Class A			672				12,129
Class B			81				699
Class C			133				1,079
Class Y			44				444
Advisor Class			––				––
Class II			––				NA
Shares issued from reinvestment of       dividends and/or capital gains distribution:
Class A			6				702
Class B			––				43
Class C			––				61
Class Y			––	*			15
Advisor Class			––				––	*
Class II			––	*			NA
Shares redeemed:
Class A			(1,134	)			(3,940	)
Class B			(192	)			(298	)
Class C			(396	)			(371	)
Class Y			(108	)			(246	)
Advisor Class			(––	)			(––	)*
Class II			(1	)			NA
Increase (decrease) in outstanding capital shares			(895	)			10,317
Value issued from sale of shares:
Class A		$	20,944			$	186,431
Class B			2,325				9,928
Class C			3,806				15,685
Class Y			1,416				6,813
Advisor Class			––				––
Class II			––				NA
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A			187				11,390
Class B			––				636
Class C			––				927
Class Y			7				250
Advisor Class			––				1
Class II			1				NA
Value redeemed:
Class A		(34,986		)		(59,663		)
Class B			(5,467	)		(4,184		)
Class C			(11,362	)			(5,310	)
Class Y			(3,203	)			(3,734	)
Advisor Class			(––	)			(3	)
Class II			(40	)			NA
Increase (decrease) in outstanding capital		$	(26,372	)		$	159,167
*Not shown due to rounding.

	Ivy Balanced Fund				Ivy Global Natural Resources Fund
Shares issued from sale of shares:
Class A			763				44,041
Class B			74				2,245
Class C			117				14,135
Class R			NA				128
Class Y			605				6,910
Advisor Class			NA				––
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A			40				7,438
Class B			––	*			648
Class C			1				2,648
Class R			NA				3
Class Y			26				425
Advisor Class			NA				1
Shares redeemed:
Class A			(891	)			(23,141	)
Class B			(50	)			(1,584	)
Class C			(62	)			(6,347	)
Class R			NA				(12	)
Class Y			(1,352	)			(1,415	)
Advisor Class			NA				(3	)
Increase (decrease) in outstanding capital shares			(729	)			46,120
*Not shown due to rounding.
Value issued from sale of shares:
Class A		$	11,988			$	1,355,319
Class B			1,146				65,627
Class C			1,841				404,164
Class R			NA				3,867
Class Y			9,521				214,763
Advisor Class			NA				––
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A			636				228,809
Class B			3				18,786
Class C			8				75,247
Class R			NA				110
Class Y			411				13,131
Advisor Class			NA				25
Value redeemed:
Class A			(13,917	)			(705,593	)
Class B			(773	)			(45,518	)
Class C			(968	)			(178,056	)
Class R			NA				(369	)
Class Y			(21,240	)			(43,417	)
Advisor Class			NA				(90	)
Increase (decrease) in outstanding capital		$	(11,344	)		$	1,406,805

	Ivy Real Estate Securities Fund				Ivy Bond Fund				Ivy Mortgage Securities Fund
Shares issued from sale of shares:
Class A			6,162				1,752				9,873
Class B			273				96				358
Class C			402				403				806
Class R			1				NA				NA
Class Y			2,397				4				926
Shares issued from reinvestment       of dividends and/or capital       gains distribution:
Class A			564				123				1,061
Class B			27				5				36
Class C			31				8				63
Class R			––	*			NA				NA
Class Y			446				––	*			36
Shares redeemed:
Class A			(2,689	)			(1,129	)			(7,938	)
Class B			(108	)			(67	)			(327	)
Class C			(162	)			(189	)			(854	)
Class R			(––	)*			NA				NA
Class Y			(2,052	)			(2	)			(425	)
Increase in outstanding capital shares			5,292				1,004				3,615
Value issued from sale of shares:
Class A		$	153,443			$	18,156			$	103,705
Class B			6,799				996				3,756
Class C			9,917				4,183				8,470
Class R			26				NA				NA
Class Y			59,904				42				9,736
Value issued from reinvestment of       dividends and/or capital       gains distribution:
Class A			14,369				1,280				11,153
Class B			693				50				375
Class C			802				80				665
Class R			5				NA				NA
Class Y			11,342				2				380
Value redeemed:
Class A		(66,195		)		(11,724		)		(83,295		)
Class B			(2,682	)			(699	)			(3,431	)
Class C			(3,986	)			(1,956	)			(8,958	)
Class R		(––		)*		NA				NA
Class Y		(49,828		)		(24		)		(4,465		)
Increase in outstanding capital		$	134,609			$	10,386			$	38,091
*Not shown due to rounding.

NOTE 6 - Options

Options purchased by a Fund are accounted for in the same manner as marketable portfolio securities. The cost of portfolio securities acquired through the exercise of call options is increased by the premium paid to purchase the call. The proceeds from securities sold through the exercise of put options are decreased by the premium paid to purchase the put.

When a 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 a 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 sec urities purchased by the Fund is reduced by the amount of the premium received.

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

	Number of Contracts			Premiums Received
Outstanding at March 31, 2007		977			$	51,169
Options written		2,998				279,285
Options terminated in closing purchase transactions		(791	)			(55,461	)
Options exercised		(1,000	)			(97,624	)
Options expired		(2,167	)		(174,530		)
Outstanding at March 31, 2008		17			$	2,839

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

	Number of Contracts			Premiums Received
Outstanding at March 31, 2007		214			$	34,127
Options written		2,821				351,422
Options terminated in closing purchase transactions		(832	)		(171,790		)
Options exercised		(774	)			(90,510	)
Options expired		(1,120	)		(102,907		)
Outstanding at March 31, 2008		309			$	20,342

For Ivy Pacific Opportunities Fund, transactions in written call options were as follows:

	Number of Contracts			Premiums Received
Outstanding at March 31, 2007		––		$	––
Options written		321,429			1,476,002
Options terminated in closing purchase transactions		(321,429	)	(1,476,002		)
Options exercised		(––	)		(––	)
Options expired		(––	)		(––	)
Outstanding at March 31, 2008		––		$	––

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

	Number of Contracts			Premiums Received
Outstanding at March 31, 2007		––		$	––
Options written		321,429			540,001
Options terminated in closing purchase transactions		(––	)		(––	)
Options exercised		(––	)		(––	)
Options expired		(321,429	)	(540,001		)
Outstanding at March 31, 2008		––		$	––

NOTE 7 - 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 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.

NOTE 8 - Affiliated Company Transactions

The Ivy Managed Funds make investments in funds within the Ivy Funds family, which funds may be deemed to be under common control because the Funds share the same Board of Trustees. A summary of the transactions in each underlying fund during the fiscal year ended March 31, 2008 follows:

	3/31/07 Share Balance	Purchase Cost	Sales Cost	Realized Gain/ (Loss)	Distributions Received (1)	3/31/08 Share Balance	3/31/08 Market Value
Ivy Managed European/Pacific Fund
Ivy European Opportunities     Fund, Class I	––	$40,838,663	$98,200	$(17,566)	$2,979,268	997,705	$34,720,142
Ivy Pacific Opportunities     Fund, Class I	––	27,156,546	65,759	(12,004)	1,916,950	1,313,345	23,338,133
Ivy Managed International Opportunities Fund
Ivy European Opportunities     Fund, Class I	––	18,051,070	––	––	1,272,763	445,783	15,513,254
Ivy International     Balanced Fund,     Class I	––	46,348,117	––	––	1,605,963	2,697,979	44,192,895
Ivy International     Core Equity Fund,     Class I	––	23,733,908	––	––	1,362,831	1,271,275	21,865,932
Ivy International     Growth Fund,     Class I	––	16,832,175	––	––	53,867	443,964	16,235,738
Ivy Pacific Opportunities     Fund, Class I	––	12,013,729	––	––	828,190	590,760	10,497,808
(1)Distributions received includes distributions from net investment income and/or from capital gains from the underlying funds.

In connection with the Ivy Pacific Opportunities Fund's investment in Vietnam Azalea Fund Limited (VAF), Ivy Pacific Opportunities Fund is contractually committed to provide additional capital of up to $2,850,000 if and when VAF requests such contributions or draw downs. The total commitment is limited to $5,000,000. At March 31, 2008, Ivy Pacific Opportunities Fund had made a total contribution of $2,150,000.

A summary of the transactions for the affiliated company transactions during the fiscal year ended March 31, 2008 follows:

	3/31/07 Share Balance	Purchase Cost	Sales Cost	Realized Gain/ (Loss)	Distributions Received	3/31/08 Share Balance	3/31/08 Market Value
Ivy Pacific Opportunities Fund
Vietnam Azalea Fund     Limited (1)	––	$2,150,000	$––	$––	$––	500,000	$1,986,500
(1)Non-income producing during the period.

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 Ivy Funds (the "Trust") comprising Ivy Dividend Income Fund, Ivy Small Cap Value Fund, Ivy Value Fund, Ivy Managed European/Pacific Fund, Ivy Managed International Opportunities Fund, Ivy Cundill Global Value Fund, Ivy European Opportunities Fund, Ivy International Balanced Fund, Ivy International Core Equity Fund, Ivy International Growth Fund, Ivy Pacific Opportunities Fund, Ivy Balanced Fund, Ivy Global Natural Resources Fund, Ivy Real Estate Securities Fund, Ivy Bond Fund, and Ivy Mortgage Securities Fund as of March 31, 2008, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the periods presented in the two year period then ended, and the financial highlights for the periods presented (except as noted below). These financial statements and financial highlights are the responsibility of the Trust's management. O ur responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights of the Ivy Real Estate Securities Fund, Ivy Small Cap Value Fund and Ivy Value Fund for each of the periods ended July 31, 2003 were audited by other auditors whose report, dated September 5, 2003, expressed an unqualified opinion on those financial highlights. The financial highlights of the Ivy Balanced Fund, Ivy Bond Fund, Ivy International Balanced Fund and Ivy Mortgage Securities Fund for each of the periods ended September 30, 2003 were audited by other auditors whose report, dated November 7, 2003, expressed an unqualified 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 Trust is 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 Trust's 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 overa ll financial statement presentation. Our procedures included confirmation of securities owned as of March 31, 2008, 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 March 31, 2008, the results of their operations for the year then ended, the changes in their net assets for each of the periods presented in the two year period then ended, and the financial highlights for the periods presented (except as noted above in reference 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
May 20, 2008

Income Tax Information

The tax status of dividends paid will be reported to you on Form 1099-DIV after the close of the applicable calendar year.

The amounts of the dividends and long-term capital gains below, multiplied by the number of shares owned by you in the Funds shown on the record dates, will give you the total amounts to be reported in your Federal income tax return for the years in which they were received or reinvested.

			PER-SHARE AMOUNTS REPORTABLE AS:
			For Individuals										For Corporations
Record Date	Total		Qual-ifying		Non- Qual-ifying		Long-Term Capital Gain		1250 Gain		28% Gain		Qual-ifying		Non- Qual-ifying		Long-Term Capital Gain		1250 Gain		28% Gain
Ivy Dividend Income Fund
Class A
6-13-07	$	0.0350	$	0.0350	$	––	$	––	$	––	$	––	$	0.0350	$	––	$	––	$	––	$	––
9-12-07		0.0450		0.0450		––		––		––		––		0.0450		––		––		––		––
12-12-07		0.2384		0.0580		––		0.1804		––		––		0.0580		––		0.1804		––		––
3-12-08		––		––		––		––		––		––		––		––		––		––		––
Total	$	0.3184	$	0.1380	$	––	$	0.1804	$	––	$	––	$	0.1380	$	––	$	0.1804	$	––	$	––
Class B
6-13-07	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––
9-12-07		0.0050		0.0050		––		––		––		––		0.0050		––		––		––		––
12-12-07		0.1954		0.0150		––		0.1804		––		––		0.0150		––		0.1804		––		––
3-12-08		––		––		––		––		––		––		––		––		––		––		––
Total	$	0.2004	$	0.0200	$	––	$	0.1804	$	––	$	––	$	0.0200	$	––	$	0.1804	$	––	$	––
Class C
6-13-07	$	0.0030	$	0.0030	$	––	$	––	$	––	$	––	$	0.0030	$	––	$	––	$	––	$	––
9-12-07		0.0120		0.0120		––		––		––		––		0.0120		––		––		––		––
12-12-07		0.2034		0.0230		––		0.1804		––		––		0.0230		––		0.1804		––		––
3-12-08		––		––		––		––		––		––		––		––		––		––		––
Total	$	0.2184	$	0.0380	$	––	$	0.1804	$	––	$	––	$	0.0380	$	––	$	0.1804	$	––	$	––
Class E
6-13-07	$	0.0350	$	0.0350	$	––	$	––	$	––	$	––	$	0.0350	$	––	$	––	$	––	$	––
9-12-07		0.0180		0.0180		––		––		––		––		0.0180		––		––		––		––
12-12-07		0.1924		0.0120		––		0.1804		––		––		0.0120		––		0.1804		––		––
3-12-08		––		––		––		––		––		––		––		––		––		––		––
Total	$	0.2454	$	0.0650	$	––	$	0.1804	$	––	$	––	$	0.0650	$	––	$	0.1804	$	––	$	––
Class I
6-13-07	$	0.0450	$	0.0450	$	––	$	––	$	––	$	––	$	0.0450	$	––	$	––	$	––	$	––
9-12-07		0.0600		0.0600		––		––		––		––		0.0600		––		––		––		––
12-12-07		0.2554		0.0750		––		0.1804		––		––		0.0750		––		0.1804		––		––
3-12-08		––		––		––		––		––		––		––		––		––		––		––
Total	$	0.3604	$	0.1800	$	––	$	0.1804	$	––	$	––	$	0.1800	$	––	$	0.1804	$	––	$	––
Ivy Dividend Income Fund
Class Y
6-13-07	$	0.0390	$	0.0390	$	––	$	––	$	––	$	––	$	0.0390	$	––	$	––	$	––	$	––
9-12-07		0.0480		0.0480		––		––		––		––		0.0480		––		––		––		––
12-12-07		0.2434		0.0630		––		0.1804		––		––		0.0630		––		0.1804		––		––
3-12-08		––		––		––		––		––		––		––		––		––		––		––
Total	$	0.3304	$	0.1500	$	––	$	0.1804	$	––	$	––	$	0.1500	$	––	$	0.1804	$	––	$	––
Ivy Small Cap Value Fund
Class A
6-13-07	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––
9-12-07		––		––		––		––		––		––		––		––		––		––		––
12-12-07		0.8819		0.0478		0.3838		0.4503		––		––		0.0479		0.3837		0.4503		––		––
3-12-08		––		––		––		––		––		––		––		––		––		––		––
Total	$	0.8819	$	0.0478	$	0.3838	$	0.4503	$	––	$	––	$	0.0479	$	0.3837	$	0.4503	$	––	$	––
Class B
6-13-07	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––
9-12-07		––		––		––		––		––		––		––		––		––		––		––
12-12-07		0.7119		0.0290		0.2326		0.4503		––		––		0.0291		0.2325		0.4503		––		––
3-12-08		––		––		––		––		––		––		––		––		––		––		––
Total	$	0.7119	$	0.0290	$	0.2326	$	0.4503	$	––	$	––	$	0.0291	$	0.2325	$	0.4503	$	––	$	––
Class C
6-13-07	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––
9-12-07		––		––		––		––		––		––		––		––		––		––		––
12-12-07		0.7589		0.0342		0.2744		0.4503		––		––		0.0343		0.2743		0.4503		––		––
3-12-08		––		––		––		––		––		––		––		––		––		––		––
Total	$	0.7589	$	0.0342	$	0.2744	$	0.4503	$	––	$	––	$	0.0343	$	0.2743	$	0.4503	$	––	$	––
Class E
6-13-07	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––
9-12-07		––		––		––		––		––		––		––		––		––		––		––
12-12-07		0.9329		0.0535		0.4291		0.4503		––		––		0.0536		0.4290		0.4503		––		––
3-12-08		––		––		––		––		––		––		––		––		––		––		––
Total	$	0.9329	$	0.0535	$	0.4291	$	0.4503	$	––	$	––	$	0.0536	$	0.4290	$	0.4503	$	––	$	––
Class I
6-13-07	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––
9-12-07		––		––		––		––		––		––		––		––		––		––		––
12-12-07		0.9569		0.0562		0.4504		0.4503		––		––		0.0563		0.4503		0.4503		––		––
3-12-08		––		––		––		––		––		––		––		––		––		––		––
Total	$	0.9569	$	0.0562	$	0.4504	$	0.4503	$	––	$	––	$	0.0563	$	0.4503	$	0.4503	$	––	$	––
Ivy Small Cap Value Fund
Class Y
6-13-07	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––
9-12-07		––		––		––		––		––		––		––		––		––		––		––
12-12-07		0.9339		0.0536		0.4300		0.4503		––		––		0.0537		0.4299		0.4503		––		––
3-12-08		––		––		––		––		––		––		––		––		––		––		––
Total	$	0.9339	$	0.0536	$	0.4300	$	0.4503	$	––	$	––	$	0.0537	$	0.4299	$	0.4503	$	––	$	––
Ivy Value Fund
Class A
6-13-07	$	0.0300	$	0.0300	$	––	$	––	$	––	$	––	$	0.0300	$	––	$	––	$	––	$	––
9-12-07		0.0300		0.0300		––		––		––		––		0.0300		––		––		––		––
12-12-07		1.2769		0.2540		––		1.0229		––		––		0.2540		––		1.0229		––		––
3-12-08		0.0200		0.0200		––		––		––		––		0.0200		––		––		––		––
Total	$	1.3569	$	0.3340	$	––	$	1.0229	$	––	$	––	$	0.3340	$	––	$	1.0229	$	––	$	––
Class B
6-13-07	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––
9-12-07		––		––		––		––		––		––		––		––		––		––		––
12-12-07		1.1829		0.1600		––		1.0229		––		––		0.1600		––		1.0229		––		––
3-12-08		––		––		––		––		––		––		––		––		––		––		––
Total	$	1.1829	$	0.1600	$	––	$	1.0229	$	––	$	––	$	0.1600	$	––	$	1.0229	$	––	$	––
Class C
6-13-07	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––
9-12-07		––		––		––		––		––		––		––		––		––		––		––
12-12-07		1.1989		0.1760		––		1.0229		––		––		0.1760		––		1.0229		––		––
3-12-08		––		––		––		––		––		––		––		––		––		––		––
Total	$	1.1989	$	0.1760	$	––	$	1.0229	$	––	$	––	$	0.1760	$	––	$	1.0229	$	––	$	––
Class E
6-13-07	$	0.0300	$	0.0300	$	––	$	––	$	––	$	––	$	0.0300	$	––	$	––	$	––	$	––
9-12-07		0.0370		0.0370		––		––		––		––		0.0370		––		––		––		––
12-12-07		1.2939		0.2710		––		1.0229		––		––		0.2710		––		1.0229		––		––
3-12-08		0.0360		0.0360		––		––		––		––		0.0360		––		––		––		––
Total	$	1.3969	$	0.3740	$	––	$	1.0229	$	––	$	––	$	0.3740	$	––	$	1.0229	$	––	$	––
Class I
6-13-07	$	0.0500	$	0.0500	$	––	$	––	$	––	$	––	$	0.0500	$	––	$	––	$	––	$	––
9-12-07		0.0460		0.0460		––		––		––		––		0.0460		––		––		––		––
12-12-07		1.2979		0.2750		––		1.0229		––		––		0.2750		––		1.0229		––		––
3-12-08		0.0410		0.0410		––		––		––		––		0.0410		––		––		––		––
Total	$	1.4349	$	0.4120	$	––	$	1.0229	$	––	$	––	$	0.4120	$	––	$	1.0229	$	––	$	––
Ivy Value Fund
Class Y
6-13-07	$	0.0400	$	0.0400	$	––	$	––	$	––	$	––	$	0.0400	$	––	$	––	$	––	$	––
9-12-07		0.0370		0.0370		––		––		––		––		0.0370		––		––		––		––
12-12-07		1.2859		0.2630		––		1.0229		––		––		0.2630		––		1.0229		––		––
3-12-08		0.0300		0.0300		––		––		––		––		0.0300		––		––		––		––
Total	$	1.3929	$	0.3700	$	––	$	1.0229	$	––	$	––	$	0.3700	$	––	$	1.0229	$	––	$	––
Ivy Managed European/Pacific Fund
Class A
12-18-07	$	0.5070	$	0.1802	$	0.3268	$	––	$	––	$	––	$	––	$	0.5070	$	––	$	––	$	––
Class B
12-18-07	$	0.4530	$	0.1610	$	0.2920	$	––	$	––	$	––	$	––	$	0.4530	$	––	$	––	$	––
Class C
12-18-07	$	0.4450	$	0.1582	$	0.2868	$	––	$	––	$	––	$	––	$	0.4450	$	––	$	––	$	––
Class E
12-18-07	$	0.5210	$	0.1852	$	0.3358	$	––	$	––	$	––	$	––	$	0.5210	$	––	$	––	$	––
Class I
12-18-07	$	0.5400	$	0.1920	$	0.3480	$	––	$	––	$	––	$	––	$	0.5400	$	––	$	––	$	––
Class Y
12-18-07	$	0.5180	$	0.1841	$	0.3339	$	––	$	––	$	––	$	––	$	0.5180	$	––	$	––	$	––
Ivy Managed International Opportunities Fund
Class A
12-18-07	$	0.3320	$	0.1399	$	0.1921	$	––	$	––	$	––	$	––	$	0.3320	$	––	$	––	$	––
Class B
12-18-07	$	0.2730	$	0.1151	$	0.1579	$	––	$	––	$	––	$	––	$	0.2730	$	––	$	––	$	––
Class C
12-18-07	$	0.2800	$	0.1180	$	0.1620	$	––	$	––	$	––	$	––	$	0.2800	$	––	$	––	$	––
Class E
12-18-07	$	0.3400	$	0.1433	$	0.1967	$	––	$	––	$	––	$	––	$	0.3400	$	––	$	––	$	––
Class I
12-18-07	$	0.3580	$	0.1509	$	0.2071	$	––	$	––	$	––	$	––	$	0.3580	$	––	$	––	$	––
Class Y
12-18-07	$	0.3380	$	0.1425	$	0.1955	$	––	$	––	$	––	$	––	$	0.3380	$	––	$	––	$	––

Ivy Cundill Global Value Fund
Class A
12-12-07	$	1.5186*	$	0.2732	$	0.3787	$	0.8667	$	––	$	––	$	0.0279	$	0.6240	$	0.8667	$	––	$	––
Class B
12-12-07	$	1.3776*	$	0.2141	$	0.2968	$	0.8667	$	––	$	––	$	0.0219	$	0.4890	$	0.8667	$	––	$	––
Class C
12-12-07	$	1.4176*	$	0.2309	$	0.3200	$	0.8667	$	––	$	––	$	0.0236	$	0.5273	$	0.8667	$	––	$	––
Class E
12-12-07	$	1.4766*	$	0.2556	$	0.3543	$	0.8667	$	––	$	––	$	0.0261	$	0.5838	$	0.8667	$	––	$	––
Class I
12-12-07	$	1.5776*	$	0.2980	$	0.4129	$	0.8667	$	––	$	––	$	0.0304	$	0.6805	$	0.8667	$	––	$	––
Class Y
12-12-07	$	1.5816*	$	0.2996	$	0.4153	$	0.8667	$	––	$	––	$	0.0306	$	0.6843	$	0.8667	$	––	$	––
Advisor Class
12-12-07	$	1.5956*	$	0.3055	$	0.4234	$	0.8667	$	––	$	––	$	0.0312	$	0.6977	$	0.8667	$	––	$	––
Ivy European Opportunities Fund
Class A
12-12-07	$	4.5680*	$	1.0050	$	0.1741	$	3.3889	$	––	$	––	$	––	$	1.1791	$	3.3889	$	––	$	––
Class B
12-12-07	$	4.2270*	$	0.7143	$	0.1238	$	3.3889	$	––	$	––	$	––	$	0.8381	$	3.3889	$	––	$	––
Class C
12-12-07	$	4.2630*	$	0.7450	$	0.1291	$	3.3889	$	––	$	––	$	––	$	0.8741	$	3.3889	$	––	$	––
Class E
12-12-07	$	4.6500*	$	1.0749	$	0.1862	$	3.3889	$	––	$	––	$	––	$	1.2611	$	3.3889	$	––	$	––
Class I
12-12-07	$	4.7380*	$	1.1499	$	0.1992	$	3.3889	$	––	$	––	$	––	$	1.3491	$	3.3889	$	––	$	––
Class Y
12-12-07	$	4.6300*	$	1.0578	$	0.1833	$	3.3889	$	––	$	––	$	––	$	1.2411	$	3.3889	$	––	$	––
Advisor Class
12-12-07	$	4.7490*	$	1.1593	$	0.2008	$	3.3889	$	––	$	––	$	––	$	1.3601	$	3.3889	$	––	$	––
Ivy International Balanced Fund
Class A
6-13-07	$	0.1747*	$	0.0805	$	0.0942	$	––	$	––	$	––	$	––	$	0.1747	$	––	$	––	$	––
9-12-07		0.0844*		0.0389		0.0455		––		––		––		––		0.0844		––		––		––
12-12-07		0.6316*		0.1433		0.1677		0.3206		––		––		––		0.3110		0.3206		––		––
3-12-08		0.0889*		0.0152		0.0737		––		––		––		––		0.0889		––		––		––
Total	$	0.9796*	$	0.2779	$	0.3811	$	0.3206	$	––	$	––	$	––	$	0.6590	$	0.3206	$	––	$	––
Class B
6-13-07	$	0.1367*	$	0.0630	$	0.0737	$	––	$	––	$	––	$	––	$	0.1367	$	––	$	––	$	––
9-12-07		0.0444*		0.0205		0.0239		––		––		––		––		0.0444		––		––		––
12-12-07		0.5886*		0.1235		0.1445		0.3206		––		––		––		0.2680		0.3206		––		––
3-12-08		0.0519*		0.0089		0.0430		––		––		––		––		0.0519		––		––		––
Total	$	0.8216*	$	0.2159	$	0.2851	$	0.3206	$	––	$	––	$	––	$	0.5010	$	0.3206	$	––	$	––
Class C
6-13-07	$	0.1447*	$	0.0667	$	0.0780	$	––	$	––	$	––	$	––	$	0.1447	$	––	$	––	$	––
9-12-07		0.0544*		0.0251		0.0293		––		––		––		––		0.0544		––		––		––
12-12-07		0.5996*		0.1286		0.1504		0.3206		––		––		––		0.2790		0.3206		––		––
3-12-08		0.0629*		0.0107		0.0522		––		––		––		––		0.0629		––		––		––
Total	$	0.8616*	$	0.2311	$	0.3099	$	0.3206	$	––	$	––	$	––	$	0.5410	$	0.3206	$	––	$	––
Class E
6-13-07	$	0.1747*	$	0.0805	$	0.0942	$	––	$	––	$	––	$	––	$	0.1747	$	––	$	––	$	––
9-12-07		0.0744*		0.0343		0.0401		––		––		––		––		0.0744		––		––		––
12-12-07		0.5966*		0.1272		0.1488		0.3206		––		––		––		0.2760		0.3206		––		––
3-12-08		0.0499*		0.0085		0.0414		––		––		––		––		0.0499		––		––		––
Total	$	0.8956*	$	0.2505	$	0.3245	$	0.3206	$	––	$	––	$	––	$	0.5750	$	0.3206	$	––	$	––
Class I
6-13-07	$	0.1867*	$	0.0860	$	0.1007	$	––	$	––	$	––	$	––	$	0.1867	$	––	$	––	$	––
9-12-07		0.0984*		0.0453		0.0531		––		––		––		––		0.0984		––		––		––
12-12-07		0.6466*		0.1502		0.1758		0.3206		––		––		––		0.3260		0.3206		––		––
3-12-08		0.1039*		0.0177		0.0862		––		––		––		––		0.1039		––		––		––
Total	$	1.0356*	$	0.2992	$	0.4158	$	0.3206	$	––	$	––	$	––	$	0.7150	$	0.3206	$	––	$	––
Class Y
6-13-07	$	0.1767*	$	0.0814	$	0.0953	$	––	$	––	$	––	$	––	$	0.1767	$	––	$	––	$	––
9-12-07		0.0864*		0.0398		0.0466		––		––		––		––		0.0864		––		––		––
12-12-07		0.6346*		0.1447		0.1693		0.3206		––		––		––		0.3140		0.3206		––		––
3-12-08		0.0919*		0.0157		0.0762		––		––		––		––		0.0919		––		––		––
Total	$	0.9896*	$	0.2816	$	0.3874	$	0.3206	$	––	$	––	$	––	$	0.6690	$	0.3206	$	––	$	––
Ivy International Core Equity Fund
Class A
12-12-07	$	1.6133*	$	0.3520	$	0.6628	$	0.5985	$	––	$	––	$	––	$	1.0148	$	0.5985	$	––	$	––
Class B
12-12-07	$	1.4483*	$	0.2948	$	0.5550	$	0.5985	$	––	$	––	$	––	$	0.8498	$	0.5985	$	––	$	––
Class C
12-12-07	$	1.4783*	$	0.3052	$	0.5746	$	0.5985	$	––	$	––	$	––	$	0.8798	$	0.5985	$	––	$	––
Class E
12-12-07	$	1.5523*	$	0.3309	$	0.6229	$	0.5985	$	––	$	––	$	––	$	0.9538	$	0.5985	$	––	$	––
Class I
12-12-07	$	1.6913*	$	0.3791	$	0.7137	$	0.5985	$	––	$	––	$	––	$	1.0928	$	0.5985	$	––	$	––
Class Y
12-12-07	$	1.6403*	$	0.3614	$	0.6804	$	0.5985	$	––	$	––	$	––	$	1.0418	$	0.5985	$	––	$	––
Advisor Class
12-12-07	$	1.4423*	$	0.2927	$	0.5511	$	0.5985	$	––	$	––	$	––	$	0.8438	$	0.5985	$	––	$	––
Ivy International Growth Fund
Class A
12-12-07	$	0.1286*	$	0.1286	$	––	$	––	$	––	$	––	$	0.0002	$	0.1284	$	––	$	––	$	––
Class B
12-12-07	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––
Class C
12-12-07	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––
Class E
12-12-07	$	0.1726*	$	0.1726	$	––	$	––	$	––	$	––	$	0.0003	$	0.1723	$	––	$	––	$	––
Class I
12-12-07	$	0.2316*	$	0.2316	$	––	$	––	$	––	$	––	$	0.0004	$	0.2312	$	––	$	––	$	––
Class Y
12-12-07	$	0.1096*	$	0.1096	$	––	$	––	$	––	$	––	$	0.0002	$	0.1094	$	––	$	––	$	––
Advisor Class
12-12-07	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––
Class II
12-12-07	$	0.1906*	$	0.1906	$	––	$	––	$	––	$	––	$	0.0003	$	0.1903	$	––	$	––	$	––
Ivy Pacific Opportunities Fund
Class A
12-12-07	$	2.1145*	$	0.0725	$	1.5675	$	0.4745	$	––	$	––	$	––	$	1.6400	$	0.4745	$	––	$	––
Class B
12-12-07	$	1.8775*	$	0.0621	$	1.3409	$	0.4745	$	––	$	––	$	––	$	1.4030	$	0.4745	$	––	$	––
Class C
12-12-07	$	1.9285*	$	0.0643	$	1.3897	$	0.4745	$	––	$	––	$	––	$	1.4540	$	0.4745	$	––	$	––
Class E
12-12-07	$	2.1605*	$	0.0745	$	1.6115	$	0.4745	$	––	$	––	$	––	$	1.6860	$	0.4745	$	––	$	––
Class I
12-12-07	$	2.2085*	$	0.0767	$	1.6573	$	0.4745	$	––	$	––	$	––	$	1.7340	$	0.4745	$	––	$	––
Class Y
12-12-07	$	2.1485*	$	0.0740	$	1.6000	$	0.4745	$	––	$	––	$	––	$	1.6740	$	0.4745	$	––	$	––
Advisor Class
12-12-07	$	2.2205*	$	0.0772	$	1.6688	$	0.4745	$	––	$	––	$	––	$	1.7460	$	0.4745	$	––	$	––
Ivy Balanced Fund
Class A
6-13-07	$	0.0450	$	0.0303	$	0.0147	$	––	$	––	$	––	$	0.0271	$	0.0179	$	––	$	––	$	––
9-12-07		0.0450		0.0276		0.0174		––		––		––		0.0242		0.0208		––		––		––
12-12-07		0.5779		0.1074		0.0676		0.4029		––		––		0.0942		0.0808		0.4029		––		––
3-12-08		0.0450		0.0450		––		––		––		––		0.0445		0.0005		––		––		––
Total	$	0.7129	$	0.2103	$	0.0997	$	0.4029	$	––	$	––	$	0.1900	$	0.1200	$	0.4029	$	––	$	––
Class B
6-13-07	$	0.0050	$	0.0034	$	0.0016	$	––	$	––	$	––	$	0.0030	$	0.0020	$	––	$	––	$	––
9-12-07		0.0050		0.0031		0.0019		––		––		––		0.0027		0.0023		––		––		––
12-12-07		0.5359		0.0816		0.0514		0.4029		––		––		0.0716		0.0614		0.4029		––		––
3-12-08		0.0070		0.0070		––		––		––		––		0.0069		0.0001		––		––		––
Total	$	0.5529	$	0.0951	$	0.0549	$	0.4029	$	––	$	––	$	0.0842	$	0.0658	$	0.4029	$	––	$	––
Class C
6-13-07	$	0.0150	$	0.0101	$	0.0049	$	––	$	––	$	––	$	0.0090	$	0.0060	$	––	$	––	$	––
9-12-07		0.0130		0.0080		0.0050		––		––		––		0.0070		0.0060		––		––		––
12-12-07		0.5429		0.0859		0.0541		0.4029		––		––		0.0753		0.0647		0.4029		––		––
3-12-08		0.0140		0.0140		––		––		––		––		0.0138		0.0002		––		––		––
Total	$	0.5849	$	0.1180	$	0.0640	$	0.4029	$	––	$	––	$	0.1051	$	0.0769	$	0.4029	$	––	$	––
Class E
6-13-07	$	0.0450	$	0.0303	$	0.0147	$	––	$	––	$	––	$	0.0271	$	0.0179	$	––	$	––	$	––
9-12-07		0.0560		0.0344		0.0216		––		––		––		0.0301		0.0259		––		––		––
12-12-07		0.5889		0.1141		0.0719		0.4029		––		––		0.1001		0.0859		0.4029		––		––
3-12-08		0.0550		0.0550		––		––		––		––		0.0544		0.0006		––		––		––
Total	$	0.7449	$	0.2338	$	0.1082	$	0.4029	$	––	$	––	$	0.2117	$	0.1303	$	0.4029	$	––	$	––
Ivy Balanced Fund
Class I
6-13-07	$	0.0550	$	0.0370	$	0.0180	$	––	$	––	$	––	$	0.0331	$	0.0219	$	––	$	––	$	––
9-12-07		0.0610		0.0374		0.0236		––		––		––		0.0328		0.0282		––		––		––
12-12-07		0.5929		0.1166		0.0734		0.4029		––		––		0.1022		0.0878		0.4029		––		––
3-12-08		0.0590		0.0590		––		––		––		––		0.0583		0.0007		––		––		––
Total	$	0.7679	$	0.2500	$	0.1150	$	0.4029	$	––	$	––	$	0.2264	$	0.1386	$	0.4029	$	––	$	––
Class Y
6-13-07	$	0.0490	$	0.0330	$	0.0160	$	––	$	––	$	––	$	0.0295	$	0.0195	$	––	$	––	$	––
9-12-07		0.0500		0.0307		0.0193		––		––		––		0.0269		0.0231		––		––		––
12-12-07		0.5819		0.1098		0.0692		0.4029		––		––		0.0963		0.0827		0.4029		––		––
3-12-08		0.0490		0.0490		––		––		––		––		0.0485		0.0005		––		––		––
Total	$	0.7299	$	0.2225	$	0.1045	$	0.4029	$	––	$	––	$	0.2012	$	0.1258	$	0.4029	$	––	$	––
Ivy Global Natural Resources Fund
Class A
12-12-07	$	3.7511*	$	0.2836	$	1.8970	$	1.5554	$	––	$	0.0151	$	0.1605	$	2.0201	$	1.5554	$	––	$	0.0151
Class B
12-12-07	$	3.3051*	$	0.2256	$	1.5090	$	1.5554	$	––	$	0.0151	$	0.1277	$	1.6069	$	1.5554	$	––	$	0.0151
Class C
12-12-07	$	3.4021*	$	0.2382	$	1.5934	$	1.5554	$	––	$	0.0151	$	0.1348	$	1.6968	$	1.5554	$	––	$	0.0151
Class E
12-12-07	$	3.5811*	$	0.2615	$	1.7491	$	1.5554	$	––	$	0.0151	$	0.1480	$	1.8626	$	1.5554	$	––	$	0.0151
Class I
12-12-07	$	4.0031*	$	0.3164	$	2.1162	$	1.5554	$	––	$	0.0151	$	0.1791	$	2.2535	$	1.5554	$	––	$	0.0151
Class R
12-12-07	$	3.8151*	$	0.2920	$	1.9526	$	1.5554	$	––	$	0.0151	$	0.1652	$	2.0794	$	1.5554	$	––	$	0.0151
Class Y
12-12-07	$	3.9121*	$	0.3046	$	2.0370	$	1.5554	$	––	$	0.0151	$	0.1724	$	2.1692	$	1.5554	$	––	$	0.0151
Advisor Class
12-12-07	$	4.0271*	$	0.3195	$	2.1371	$	1.5554	$	––	$	0.0151	$	0.1808	$	2.2758	$	1.5554	$	––	$	0.0151

Ivy Real Estate Securities Fund
Class A
6-13-07	$	0.0200	$	0.0003	$	0.0197	$	––	$	––	$	––	$	0.0003	$	0.0197	$	––	$	––	$	––
9-12-07		0.0200		0.0003		0.0197		––		––		––		0.0003		0.0197		––		––		––
12-12-07		2.0135		0.0052		0.3678		1.6244		0.0161		––		0.0052		0.3678		1.6244		0.0161		––
3-12-08		0.0600		0.0024		0.0576		––		––		––		0.0024		0.0576		––		––		––
Total	$	2.1135	$	0.0082	$	0.4648	$	1.6244	$	0.0161	$	––	$	0.0082	$	0.4648	$	1.6244	$	0.0161	$	––
Class B
6-13-07	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––
9-12-07		––		––		––		––		––		––		––		––		––		––		––
12-12-07		1.8825		0.0033		0.2387		1.6244		0.0161		––		0.0033		0.2387		1.6244		0.0161		––
3-12-08		0.0120		0.0005		0.0115		––		––		––		0.0005		0.0115		––		––		––
Total	$	1.8945	$	0.0038	$	0.2502	$	1.6244	$	0.0161	$	––	$	0.0038	$	0.2502	$	1.6244	$	0.0161	$	––
Class C
6-13-07	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––	$	––
9-12-07		––		––		––		––		––		––		––		––		––		––		––
12-12-07		1.9155		0.0038		0.2712		1.6244		0.0161		––		0.0038		0.2712		1.6244		0.0161		––
3-12-08		0.0240		0.0009		0.0231		––		––		––		0.0009		0.0231		––		––		––
Total	$	1.9395	$	0.0047	$	0.2943	$	1.6244	$	0.0161	$	––	$	0.0047	$	0.2943	$	1.6244	$	0.0161	$	––
Class E
6-13-07	$	0.0200	$	0.0003	$	0.0197	$	––	$	––	$	––	$	0.0003	$	0.0197	$	––	$	––	$	––
9-12-07		––		––		––		––		––		––		––		––		––		––		––
12-12-07		1.8835		0.0034		0.2396		1.6244		0.0161		––		0.0034		0.2396		1.6244		0.0161		––
3-12-08		0.0070		0.0003		0.0067		––		––		––		0.0003		0.0067		––		––		––
Total	$	1.9105	$	0.0040	$	0.2660	$	1.6244	$	0.0161	$	––	$	0.0040	$	0.2660	$	1.6244	$	0.0161	$	––
Class I
6-13-07	$	0.0400	$	0.0006	$	0.0394	$	––	$	––	$	––	$	0.0006	$	0.0394	$	––	$	––	$	––
9-12-07		0.0460		0.0006		0.0454		––		––		––		0.0006		0.0454		––		––		––
12-12-07		2.0385		0.0055		0.3925		1.6244		0.0161		––		0.0055		0.3925		1.6244		0.0161		––
3-12-08		0.0850		0.0034		0.0816		––		––		––		0.0034		0.0816		––		––		––
Total	$	2.2095	$	0.0101	$	0.5589	$	1.6244	$	0.0161	$	––	$	0.0101	$	0.5589	$	1.6244	$	0.0161	$	––
Class R
6-13-07	$	0.0120	$	0.0002	$	0.0118	$	––	$	––	$	––	$	0.0002	$	0.0118	$	––	$	––	$	––
9-12-07		0.0150		0.0002		0.0148		––		––		––		0.0002		0.0148		––		––		––
12-12-07		2.0105		0.0051		0.3649		1.6244		0.0161		––		0.0051		0.3649		1.6244		0.0161		––
3-12-08		0.0630		0.0025		0.0605		––		––		––		0.0025		0.0605		––		––		––
Total	$	2.1005	$	0.0080	$	0.4520	$	1.6244	$	0.0161	$	––	$	0.0080	$	0.4520	$	1.6244	$	0.0161	$	––
Ivy Real Estate Securities Fund
Class Y
6-13-07	$	0.0310	$	0.0004	$	0.0306	$	––	$	––	$	––	$	0.0004	$	0.0306	$	––	$	––	$	––
9-12-07		0.0360		0.0005		0.0355		––		––		––		0.0005		0.0355		––		––		––
12-12-07		2.0275		0.0053		0.3817		1.6244		0.0161		––		0.0054		0.3816		1.6244		0.0161		––
3-12-08		0.0770		0.0030		0.0740		––		––		––		0.0030		0.0740		––		––		––
Total	$	2.1715	$	0.0092	$	0.5218	$	1.6244	$	0.0161	$	––	$	0.0093	$	0.5217	$	1.6244	$	0.0161	$	––
*Includes gross up of pass-through foreign tax credit.

Dividends are declared and recorded by each of the following Funds on each day the New York Stock Exchange is open for business. Dividends are paid monthly usually on the 27th of the month or on the preceding business day if the 27th is a weekend or holiday.

The table below shows the taxability of dividends and long-term capital gains paid during the fiscal year ended March 31, 2008:

		PER-SHARE AMOUNTS REPORTABLE AS:
		For Individuals			For Corporations
Record Date	Total	Non- Qualifying	Long-Term Capital Gain		Qualifying	Non- Qualifying	Long-Term Capital Gain
Ivy Bond Fund
April 2007 through     March 2008	100.0000%	100.0000%		— %	— %	100.0000%	— %
Ivy Mortgage Securities Fund
April 2007 through     March 2008	100.0000%	100.0000%		— %	— %	100.0000%	— %

CORPORATION DEDUCTIONS - Under Federal tax law, the amounts reportable as Qualifying Dividends are eligible for the dividends received deduction in the year received as provided by Section 243 of the Internal Revenue Code.

Internal Revenue Code regulations permit each qualifying Fund to elect to pass through a foreign tax credit to shareholders with respect to foreign taxes paid by the Fund. Ivy Cundill Global Value Fund, Ivy European Opportunities Fund, Ivy International Balanced Fund, Ivy International Core Equity Fund, Ivy International Growth Fund, Ivy Pacific Opportunities Fund and Ivy Global Natural Resources Fund, elected to pass through to their shareholders $1,878,271, $1,165,721, $783,077, $468,116, $382,540, $1,003,026 and $6,394,627, respectively, of creditable foreign taxes paid on income derived from sources within any foreign country or possession of the United States in the amounts of $19,068,690, $17,622,393, $11,965,642, $5,859,898, $4,468,540, $10,043,598 and $70,039,005, respectively.

The tax status of dividends paid and the pass-through of foreign taxes paid will be reported to you on Form 1099-DIV after the close of the applicable calendar year.

The Board of Trustees of Ivy Funds

The Waddell & Reed Fund Complex (Fund Complex) is comprised of the Ivy Family of Funds and the Advisors Fund Complex. The Ivy Family of Funds is comprised of the funds in Ivy Funds (17 portfolios) and Ivy Funds, Inc. (12 portfolios). The Advisors Fund Complex is comprised of each of the funds in the Waddell & Reed Advisors Funds (21 portfolios), Waddell & Reed InvestEd Portfolios, Inc. (3 portfolios) and W&R Target Funds, Inc. (25 portfolios).

Each of the individuals listed below serves as a trustee or director for each of the funds within the Ivy Family of Funds. Eleanor B. Schwartz, Joseph Harroz, Jr., Jarold W. Boettcher and Henry J. Herrmann also serve as directors of each of the funds in the Advisors Fund Complex. Each Trustee serves an indefinite term, until he or she dies, resigns, is removed or becomes disqualified.

A Trustee is considered by Ivy Funds and its counsel to be an "interested person" of the Funds or of their investment manager by virtue of his or her employment by Waddell & Reed Financial, Inc. (WDR) or its wholly owned subsidiaries. The other Trustees (more than a majority of the total number) are independent; that is, they are not employees or officers of, and have no financial interest in, WDR or any of its wholly owned subsidiaries, including Ivy Funds Distributor, Inc. (IFDI), Ivy Investment Management Company (IICO) (formerly, Waddell & Reed Ivy Investment Company), and Waddell & Reed Services Company (WRSCO).

Additional Information about Trustees

The Statement of Additional Information (SAI) for Ivy Funds includes additional information about Fund Trustees. The SAI is available without charge, upon request, by calling 1.800.777.6472. It is also available on the Ivy Funds website, www.ivyfunds.com.

INDEPENDENT TRUSTEES

Name, address, age	Position held with Fund and length of service	Principal occupation during the past five years	Other directorships
Jarold W. Boettcher 6300 Lamar Avenue Overland Park, KS 66202 Age: 67	Trustee since 2002	President of Boettcher Enterprises, Inc. (agriculture products and services) (1979 to present), Boettcher Supply, Inc. (electrical and plumbing supplies distributor) (1979 to present), Boettcher Aerial, Inc. (aerial ag applicator) (1983 to present); Member, Kansas Board of Regents (2007 to present)	Director of Guaranty State Bank & Trust Co. (financial services); Director of Guaranty, Inc. (financial services); Trustee, Kansas Public Employees Retirement System; Director of Advisors Fund Complex (49 portfolios overseen)
James D. Gressett 6300 Lamar Avenue Overland Park, KS 66202 Age: 57	Trustee since 2002	Secretary of Streetman Homes, LLP (homebuilding company) (2001 to present); Chief Executive Officer (CEO) of PacPizza LLC (Pizza Hut franchise) (2000 to 2004)	Director of Collins Financial Services (debt recovery company)
Joseph Harroz, Jr. 6300 Lamar Avenue Overland Park, KS 66202 Age: 41	Independent Chair since 2006 Trustee since 2002	Vice President and General Counsel of the Board of Regents, University of Oklahoma (1996 to present); Adjunct Professor, University of Oklahoma School of Law (1997 to present); Managing Member, Harroz Investments, LLC (commercial enterprise investments) (1998 to present)	Director and Shareholder of Valliance Bank NA (financial services); Independent Director, LSQ Manager, Inc. (real estate) (2007 to present); Independent Director, Graymark Healthcare (medical holding company) (2008); Director, Melbourne Family Support Organization (non-profit); Director, Norman Economic Development Coalition (non-profit); Director of Advisors Fund Complex (49 portfolios overseen)
Glendon E. Johnson, Jr. 6300 Lamar Avenue Overland Park, KS 66202 Age: 56	Trustee since 2002	Of Counsel, Lee & Smith, PC (law firm) (1996 to present); Member/Manager, Castle Valley Ranches, LLC (ranching) (1995 to present)	None
Eleanor B. Schwartz 6300 Lamar Avenue Overland Park, KS 66202 Age: 71	Trustee since 2002	Professor Emeritus, University of Missouri at Kansas City (2003 to present); Professor of Business Administration, University of Missouri at Kansas City (1980 to 2003)	Director of Advisors Fund Complex (49 portfolios overseen)
Michael G. Smith 6300 Lamar Avenue Overland Park, KS 66202 Age: 63	Trustee since 2002	Retired	Director of Executive Board, Cox Business School, Southern Methodist University; Director of Northwestern Mutual Life Series Funds & Mason Street Advisors Funds (18 portfolios overseen)
Edward M. Tighe 6300 Lamar Avenue Overland Park, KS 66202 Age: 64	Trustee since 1999	Retired; CEO and Director of Asgard Holding, LLC (computer network and security services) (2002 to 2004); CEO and Director of JBE Technology Group, Inc. (telecommunications services) (2001 to 2003)	None

INTERESTED TRUSTEE

Name, address, age	Position held with Fund and length of service	Principal occupation during the past five years	Other directorships
Henry J. Herrmann 6300 Lamar Avenue Overland Park, KS 66202 Age: 64	Trustee since 2002 President since 2002	CEO of WDR (2005 to present); President, CEO and Chairman of WRIMCO (1993 to present); President, CEO and Chairman of IICO, an affiliate of WDR (2002 to present); formerly, President and CIO of WDR, WRIMCO and IICO (until 2005); President and Director/Trustee of each of the funds in the Fund Complex	Director of WDR, WRSCO and Waddell & Reed; Director, Austin, Calvert & Flavin, Inc., an affiliate of WRIMCO

OFFICERS

The Board has appointed officers who are responsible for the day-to-day business decisions based on policies it has established. The officers serve at the pleasure of the Board. In addition to Mr. Herrmann, who is President, the principal officers of Ivy Funds are:

Name, address, age	Position held with Fund and length of service	Principal occupation during the past five years	Other directorships
Mara D. Herrington 6300 Lamar Avenue Overland Park, KS 66202 Age: 44	Vice President since 2006 Secretary since 2006	Vice President and Secretary of each of the funds in the Fund Complex (2006 to present); Vice President of WRIMCO and IICO (2006 to present); formerly, Vice President and Associate General Counsel, Deutsche Investment Management Americas, Inc. (financial services) (1994 to 2005)	None
Joseph W. Kauten 6300 Lamar Avenue Overland Park, KS 66202 Age: 39	Vice President since 2006 Treasurer since 2006 Principal Financial Officer since 2007 Principal Accounting Officer since 2006	Principal Financial Officer of each of the funds in the Fund Complex (2007 to present); Vice President, Treasurer and Principal Accounting Officer of each of the funds in the Fund Complex (2006 to present); Assistant Treasurer of each of the funds in the Fund Complex (2003 to 2006); Senior Manager, Deloitte & Touche LLP (accounting services) (2001 to 2003)	None
Kristen A. Richards 6300 Lamar Avenue Overland Park, KS 66202 Age: 40	Vice President since 2002 Assistant Secretary since 2006 Associate General Counsel since 2002	Senior Vice President of WRIMCO and IICO (2007 to present); Associate General Counsel and Chief Compliance Officer of WRIMCO (2000 to present) and IICO (2002 to present); Vice President and Associate General Counsel of each of the funds in the Fund Complex (2000 to present); Assistant Secretary of each of the funds in the Fund Complex (2006 to present); formerly, Vice President of WRIMCO (2000 to 2007) and IICO (2002 to 2007); formerly, Secretary of each of the funds in the Fund Complex (2000 to 2006)	None
Scott J. Schneider 6300 Lamar Avenue Overland Park, KS 66202 Age: 40	Chief Compliance Officer since 2004 Vice President since 2006	Chief Compliance Officer (2004 to present) and Vice President (2006 to present) of each of the funds in the Fund Complex; formerly, Senior Attorney and Compliance Officer for each of the funds in the Fund Complex (2000 to 2004)	None
Daniel C. Schulte 6300 Lamar Avenue Overland Park, KS 66202 Age: 42	Vice President since 2002 General Counsel since 2002 Assistant Secretary since 2002	Senior Vice President and General Counsel of WDR, Waddell & Reed, WRIMCO and WRSCO (2000 to present); Senior Vice President and General Counsel of IICO (2002 to present); Vice President, General Counsel and Assistant Secretary of each of the funds in the Fund Complex (2000 to present)	None

Ivy Funds Annual Privacy Notice

The following privacy notice is issued by Ivy Funds (the Funds), Ivy Investment Management Company ("IICO") and Ivy Funds Distributor, Inc. (IFDI).

Information Collected

We collect nonpublic personal information about you from your account application and other forms that you may deliver to us, and from your transactions with us and our affiliates. This is information that regulators consider necessary for the proper servicing of your account. In order to effect your transactions and service your account properly, we may disclose all of the information that we collect, as described above, to firms that assist us in servicing your account, such as our transfer agent.

Confidentiality of Information Collected

All records containing your nonpublic personal information are kept at our various service providers. These entities include IICO, IFDI and our transfer agent and administrative services provider. We require these affiliates, and any non-affiliated service providers, to protect the confidentiality of your information and to use the information only for the purposes for which disclosure to them is made. The Funds, IICO, IFDI and other service providers restrict access to nonpublic personal information about you to those employees who need to know that information to provide products and services to you and maintain physical, electronic, and procedural safeguards that comply with federal standards to maintain the security of your nonpublic personal information.

Disclosure of Information in Limited Circumstances

We do not disclose nonpublic personal information about present or former customers to non-affiliated third parties, except as permitted or required by law. In connection with servicing your account, your nonpublic personal information may be shared among the entities named in this notice, their affiliates, and non-affiliates, including a transfer agent or other service companies. We will adhere to the policies and practices above for both current and former customers.

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.

Householding Notice

If you currently receive one copy of the shareholder reports and prospectus for your household (even if more than one person in your household owns shares of the Fund) and you would prefer to receive separate shareholder reports and prospectuses for each account holder living at your address, you can do either of the following:

Fax your request to 800.532.2749.

Write to us at the address listed on the back cover.

Please list each account for which you would like to receive separate shareholder reports and prospectus mailings. We will resume sending separate documents within 30 days of receiving your request.

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. A 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

Domestic Equity Funds      

Capital Appreciation 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

Global/International Funds      

Cundill Global Value Fund
European Opportunities Fund
International Balanced Fund
International Core Equity Fund
International Growth Fund
Managed European/Pacific Fund
Managed International Opportunities Fund
Pacific Opportunities Fund

Specialty Funds      

Asset Strategy Fund
Balanced Fund
Energy Fund
Global Natural Resources Fund
Real Estate Securities Fund
Science and Technology Fund

Fixed Income Funds      

Bond Fund
Global Strategic Income Fund
High Income Fund
Limited-Term Bond Fund
Mortgage Securities Fund
Money Market Fund
Municipal Bond 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.

WRR3300A (3-08)

ITEM 2. CODE OF ETHICS
(a)	As of March 31, 2008, the Registrant has adopted a code of ethics (the "Code"), as defined in Item 2 of Form N-CSR, that applies to the Principal Executive Officer and Principal Financial Officer or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. A copy of this code of ethics is filed as an exhibit to this Form N-CSR.
(b)	There have been no amendments, during the period covered by this report, to a provision of the Code that applies to the registrant's Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer or Controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the Code.
(c)	During the period covered by this report, the registrant did not grant any waivers, including an implicit waiver, from a provision of the Code that applies to the registrant's Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer or Controller, or persons performing similar functions, regardless of whether those individuals were employed by the registrant or a third party, that related to one or more of the items set forth in paragraph (b) of this item's instructions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Directors of the Registrant has determined that each of Jarold W. Boettcher, Glendon E. Johnson, Jr. and Edward M. Tighe is an audit committee financial expert, as defined in Item 3 of Form N-CSR, serving on its audit committee. Each of Mr. Boettcher, Mr. Johnson and Mr. Tighe is independent for purposes of Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a)	Audit Fees
	The aggregate fees billed for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for each of the last two fiscal years are as follows:
			2007	$233,000
			2008	147,900
(b)	Audit-Related Fees
	The aggregate fees billed for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's annual financial statements and are not reported under paragraph (a) of this Item are as follows:
			2007	$1,420
			2008	2,166
	These fees are related to the review of Form N-1A.
(c)	Tax Fees
	The aggregate fees billed for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning are as follows:
			2007	$32,650
			2008	30,400
	These fees are related to the review of the registrant's tax returns.
(d)	All Other Fees
	The aggregate fees billed for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this item are as follows:
			2007	$3,030
			2008	3,752
	These fees are related to the review of internal control.
(e)	(1)	Registrant's audit committee considers with the principal accountants all audit services to be provided by the principal accountants and pre-approves all such audit services.
		The audit committee shall pre-approve all non-audit services to be provided by the principal accountants to the registrant; provided that the pre-approval requirement does not apply to non-audit services that (i) were not identified as such at the time of the pre-approval and (ii) do not aggregate more than 5% of total fees paid to the principal accountants by the registrant during the fiscal year in which the services are provided, if the audit committee approves the provision of such non-audit services prior to the completion of the audit.
		The audit committee shall pre-approve all non-audit services to be provided by the principal accountants to the investment adviser (not including any subadvisor whose role is primarily portfolio management and is subcontracted and overseen by the investment advisor) or any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant if the engagement relates directly to the operations or financial reporting of the registrant; provided that the pre-approval requirement does not apply to non-audit services that (i) were not identified as such at the time of the pre-approval and (ii) do not aggregate more than 5% of total fees paid to the principal accountants by the registrant for all services and by the registrant's investment adviser for non-audit services if the engagement relates directly to the operations or financial reporting of the registrant during the fiscal year in which those services are provided, if the audit committee approves the provision of such non-audit services prior to the completion of the audit.
(e)	(2)	None of the services described in each of paragraphs (b) through (d) of this Item were approved by the audit committee pursuant to the waiver provisions of paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f)	Not applicable
(g)	$37,100 and $36,318 are the aggregate non-audit fees billed in each of the last two fiscal years for services rendered by the principal accountant to the registrant. $119,600 and $136,635 are the aggregate non-audit fees billed in each of the last two fiscal years for services rendered by the principal accountant to the investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant.
(h)	Not Applicable.
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 quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) The Code described in Item 2 of this Form N-CSR.
Attached hereto as Exhibit 99.CODE.
(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/Mara D. Herrington
	Mara D. Herrington, Vice President and Secretary
Date:	June 6, 2008
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:	June 6, 2008
By	/s/Joseph W. Kauten
	Joseph W. Kauten, Vice President and Principal Financial Officer
Date:	June 6, 2008