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

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

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-6569

Ivy Funds, Inc.

(Exact name of registrant as specified in charter)

6300 Lamar Avenue, Overland Park, Kansas 66202

(Address of principal executive offices) (Zip code)

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

(Name and address of agent for service)

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

Date of fiscal year end: March 31

Date of reporting period: September 30, 2004

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

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

ITEM 1. REPORTS TO STOCKHOLDERS.

Semiannual Report

September 30, 2004

Ivy Asset Strategy Fund

Ivy Core Equity Fund

Ivy High Income Fund

Ivy International Growth Fund

Ivy Large Cap Growth Fund

Ivy Limited-Term Bond Fund

Ivy Mid Cap Growth Fund

Ivy Money Market Fund

Ivy Municipal Bond Fund

Ivy Science and Technology Fund

Ivy Small Cap Growth Fund

Ivy Tax-Managed Equity Fund


3		President's Letter
5		Illustration of Fund Expenses
18		Ivy Asset Strategy Fund
33		Ivy Core Equity Fund
45		Ivy High Income Fund
66		Ivy International Growth Fund
78		Ivy Large Cap Growth Fund
89		Ivy Limited-Term Bond Fund
101		Ivy Mid Cap Growth Fund
113		Ivy Money Market Fund
126		Ivy Municipal Bond Fund
142		Ivy Science and Technology Fund
153		Ivy Small Cap Growth Fund
165		Ivy Tax-Managed Equity Fund
177		Notes to Financial Statements
204		Report of Independent Registered Public Accounting Firm
205		Proxy Voting Information
206		Quarterly Portfolio Schedule Information
207		IRA Disclosure

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

President's Letter

September 30, 2004

DEAR SHAREHOLDER:

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

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

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

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

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

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

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

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

Thank you for your ongoing dedication and partnership.

Respectfully,

Henry J. Herrmann, CFA
President

The opinions expressed in this letter are those of the President of the Corporation 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 the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, redemption fees and exchange fees; and (2) ongoing costs, including management fees, distribution and service fees, and other Fund expenses. The following table is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the six-month period ended September 30, 2004.

Actual Expenses

The first line for each share class in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, a $7,500 account value divided by $1,000 = 7.5), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. There may be additional fees charged to holders of certain accounts that are not included in the expenses shown in the table. These fees apply to Individual Retirement Accounts (IRAs), IRA Rollovers, Roth IRAs, Conversion Roth IRAs, Simplified Employee Pension (SEP), Simple IRAs, Tax-Sheltered Accounts (TSAs), Keogh Plans, Owner Only 401(k) (Exclusive K) Plans and Final Pay Plans. As of the close of the six months covered by the table, a customer is 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 table. Additional fees have the effect of reducing investment returns.

Hypothetical Example for Comparison Purposes

The second line for each share class of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees or exchange fees. Therefore, the second line of each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total c osts of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

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

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	1,005		1.41	%	$	7.08
Class B		1,000		1,001		2.28			11.43
Class C		1,000		1,001		2.21			11.10
Class Y		1,000		1,005		1.33			6.71
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,018		1.41	%	$	7.12
Class B		1,000		1,014		2.28			11.51
Class C		1,000		1,014		2.21			11.18
Class Y		1,000		1,018		1.33			6.75

*Fund expenses for each share class are equal to the Fund's annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by 183 days in the six-month period ended September 30, 2004, and divided by 365.

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

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

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

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

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	1,027		1.54	%	$	7.84
Class B		1,000		1,023		2.40			12.16
Class C		1,000		1,023		2.23			11.33
Class Y		1,000		1,028		1.23			6.28
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,017		1.54	%	$	7.80
Class B		1,000		1,013		2.40			12.10
Class C		1,000		1,014		2.23			11.28
Class Y		1,000		1,019		1.23			6.25

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

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

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	1,026		1.43	%	$	7.26
Class B		1,000		1,021		2.29			11.62
Class C		1,000		1,022		2.23			11.28
Class Y		1,000		1,026		1.32			6.72
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,018		1.43	%	$	7.23
Class B		1,000		1,014		2.29			11.58
Class C		1,000		1,014		2.23			11.24
Class Y		1,000		1,018		1.32			6.69

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

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

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	951		1.94	%	$	9.48
Class B		1,000		945		2.99			14.56
Class C		1,000		946		2.80			13.64
Class Y		1,000		953		1.62			7.95
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,015		1.94	%	$	9.79
Class B		1,000		1,010		2.99			15.05
Class C		1,000		1,011		2.80			14.10
Class Y		1,000		1,017		1.62			8.21

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

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

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	962		1.50	%	$	7.38
Class B		1,000		957		2.55			12.52
Class C		1,000		958		2.25			11.04
Class Y		1,000		964		1.20			5.91
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,018		1.50	%	$	7.59
Class B		1,000		1,012		2.55			12.87
Class C		1,000		1,014		2.25			11.36
Class Y		1,000		1,019		1.20			6.08

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

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

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	997		1.30	%	$	6.49
Class B		1,000		993		2.21			11.06
Class C		1,000		993		2.14			10.69
Class Y		1,000		998		1.18			5.89
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,019		1.30	%	$	6.56
Class B		1,000		1,014		2.21			11.18
Class C		1,000		1,014		2.14			10.81
Class Y		1,000		1,019		1.18			5.96

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

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

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	1,017		1.65	%	$	8.34
Class B		1,000		1,011		2.88			14.51
Class C		1,000		1,014		2.35			11.86
Class Y		1,000		1,020		1.25			6.33
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,017		1.65	%	$	8.34
Class B		1,000		1,011		2.88			14.51
Class C		1,000		1,013		2.35			11.86
Class Y		1,000		1,019		1.25			6.33

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

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

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	1,002		0.91	%	$	4.58
Class B		1,000		1,000		1.33			6.69
Class C		1,000		1,000		1.31			6.55
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,020		0.91	%	$	4.63
Class B		1,000		1,018		1.33			6.75
Class C		1,000		1,019		1.31			6.61

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

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

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	1,017		0.87	%	$	4.40
Class B		1,000		1,013		1.70			8.57
Class C		1,000		1,013		1.73			8.70
Class Y		1,000		1,016		1.06			5.34
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,021		0.87	%	$	4.41
Class B		1,000		1,017		1.70			8.59
Class C		1,000		1,016		1.73			8.72
Class Y		1,000		1,020		1.06			5.35

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

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

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	982		1.78	%	$	8.82
Class B		1,000		976		3.01			14.92
Class C		1,000		977		2.63			13.03
Class Y		1,000		983		1.49			7.41
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,016		1.78	%	$	8.97
Class B		1,000		1,010		3.01			15.19
Class C		1,000		1,012		2.63			13.26
Class Y		1,000		1,018		1.49			7.54

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

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

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	946		1.52	%	$	7.42
Class B		1,000		942		2.55			12.40
Class C		1,000		943		2.28			11.08
Class Y		1,000		948		1.37			6.69
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,017		1.52	%	$	7.69
Class B		1,000		1,012		2.55			12.85
Class C		1,000		1,014		2.28			11.49
Class Y		1,000		1,018		1.37			6.93

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

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

Based on Actual Fund Return^⁽¹⁾
Class A	$	1,000	$	983		1.20	%	$	5.96
Class B		1,000		975		2.05			10.17
Class C		1,000		978		2.15			10.66
Class Y		1,000		1,008		1.18			5.94
Based on 5% Return^⁽²⁾
Class A	$	1,000	$	1,019		1.20	%	$	6.07
Class B		1,000		1,015		2.05			10.38
Class C		1,000		1,014		2.15			10.86
Class Y		1,000		1,019		1.18			5.98

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

SHAREHOLDER SUMMARY OF IVY ASSET STRATEGY FUND

Portfolio Highlights

On September 30, 2004, Ivy Asset Strategy Fund had net assets totaling $78,630,659 invested in a diversified portfolio of:

70.32%		Common Stocks
9.83%		Bullion
6.30%		United States Government Securities
5.44%		Cash and Cash Equivalents and Unrealized Loss on Open Forward Currency Contracts
4.25%		Corporate Debt Securities
3.86%		Other Government Securities

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

Common Stocks	$	70.32
Bullion	$	9.83
United States Government Securities	$	6.30
Cash and Cash Equivalents and Unrealized Loss on Open Forward Currency Contracts	$	5.44
Corporate Debt Securities	$	4.25
Other Government Securities	$	3.86

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

Raw Materials Stocks	$	18.37
Energy Stocks	$	11.70
Bullion	$	9.83
Capital Goods Stocks	$	6.51
United State Government Securities	$	6.30
Technology Stocks	$	6.28
Miscellaneous Stocks	$	5.44
Cash and Cash Equivalents and Unrealized Loss on Open Forward Currency Contracts	$	5.44
Multi-Industry Stocks	$	5.35
Corporate Debt Securities	$	4.25
Consumer Nondurables Stocks	$	4.24
Shelter Stocks	$	4.13
Other Government Securities	$	3.86
Utilities Stocks	$	3.76
Health Care Stocks	$	2.73
Consumer Durables Stocks	$	1.81


The Investments of Ivy Asset Strategy Fund
*September 30, 2004*
BULLION - 9.83%	Troy Ounces		Value


Gold	18,469	$	7,728,248

(Cost: $6,932,526)


COMMON STOCKS		Shares


Air Transportation - 0.48%
BAA plc (A)		37,490	375,526


Aircraft - 1.99%
Lockheed Martin Corporation		14,100	786,498
United Technologies Corporation		8,300	775,054

			1,561,552

Aluminum - 2.23%
Alcan Inc.		20,600	984,680
Aluminum Corporation of China Limited, H Shares (A)	1,186,000		768,046

			1,752,726

Broadcasting - 1.09%
Cox Communications, Inc., Class A*		25,800	854,754


Business Equipment and Services - 1.48%
First Data Corporation		17,700	769,950
Mitsubishi Corporation (A)		36,300	392,334

			1,162,284

Capital Equipment - 3.03%
Caterpillar Inc.		17,100	1,375,695
Chicago Bridge & Iron Company N.V., NY Shares		8,104	243,039
Deere & Company		11,800	761,690

			2,380,424

Chemicals - Petroleum and Inorganic - 0.24%
LG Chem, Ltd. (A)*		4,900	185,957


Coal - 2.14%
Peabody Energy Corporation (B)		28,300	1,683,850


Computers - Micro - 0.48%
Dell Inc.*		10,600	376,830


Computers - Peripherals - 0.67%
Lexmark International, Inc.*		6,300	529,263


Construction Materials - 1.98%
Cemex, S.A. de C.V., ADR (A)		55,380	1,558,393



Consumer Electronics - 0.85%
Matsushita Electric Industrial Co., Ltd. (A)		50,000		667,453


Cosmetics and Toiletries - 0.99%
Avon Products, Inc.		17,900		781,872


Electronic Components - 3.14%
Motorola, Inc.		23,000		414,920
Samsung Electronics Co., Ltd. (A)		4,260		1,694,381
Texas Instruments Incorporated		16,900		359,632

				2,468,933

Food and Related - 3.25%
Archer Daniels Midland Company		80,700		1,370,286
Bunge Limited		27,950		1,117,441
J.M. Smucker Company (The)		1,600		71,056

				2,558,783

Forest and Paper Products - 1.81%
Aracruz Celulose S.A., ADR		16,200		536,544
Weyerhaeuser Company		13,400		890,832

				1,427,376

Gold and Precious Metals - 5.37%
Agnico-Eagle Mines Limited		22,500		321,300
Barrick Gold Corporation		84,400		1,775,776
Open Joint Stock Company "Mining and Metallurgical Company Norilsk Nickel", ADR		18,675		1,185,863
Yanzhou Coal Mining Company Limited, Class H (A)*		724,000		937,716

				4,220,655

Health Care - Drugs - 1.21%
Gilead Sciences, Inc.*		5,400		201,825
Pfizer Inc.		24,400		746,640

				948,465

Health Care - General - 0.75%
Boston Scientific Corporation*		10,100		401,273
Schein (Henry), Inc.*		3,000		186,915

				588,188

Hospital Supply and Management - 0.77%
Caremark Rx, Inc.*		19,000		609,330


Mining - 10.53%
Alumina Limited (A)		169,500		690,056
BHP Billiton Plc (A)		111,550		1,160,386
Companhia Vale do Rio Doce, ADR		106,200		2,386,314
Freeport-McMoRan Copper & Gold Inc., Class B		55,076		2,230,578
Inco Limited*		12,400		484,220
Rio Tinto plc (A)		49,300		1,325,783

				8,277,337

Motor Vehicle Parts - 0.44%
Denway Motors Limited (A)*	1,034,000			344,751


Motor Vehicles - 0.52%
Toyota Motor Corporation (A)		10,600		405,935


Multiple Industry - 5.35%
AU Optronics Corp., ADR		46,800		585,936
BUCYRUS International, Inc., Class A*		8,500		285,812
General Electric Company		56,300		1,890,554
Hutchison Whampoa Limited, Ordinary Shares (A)		185,000		1,447,147

				4,209,449

Nonresidential Construction - 1.50%
Fluor Corporation		8,514		379,043
Hyundai Heavy Industries Co., Ltd. (A)		29,850		803,604

				1,182,647

Petroleum - International - 6.53%
Anadarko Petroleum Corporation		24,741		1,641,813
Burlington Resources Inc.		34,716		1,416,413
Exxon Mobil Corporation		42,953		2,075,919

				5,134,145

Petroleum - Services - 3.03%
Baker Hughes Incorporated		9,000		393,480
Schlumberger Limited		23,500		1,581,785
Transocean Inc.*		11,300		404,314

				2,379,579

Railroad - 0.97%
Union Pacific Corporation		13,000		761,800


Real Estate Investment Trust - 2.32%
Keppel Land Limited (A)	313,000			353,063
Mitsubishi Estate Co., Ltd. (A)		69,000		720,087
Mitsui Fudosan Co., Ltd. (A)		72,000		748,782

				1,821,932

Restaurants - 0.29%
Panera Bread Company, Class A*		6,180		231,966


Security and Commodity Brokers - 1.13%
Chicago Mercantile Exchange Holdings Inc.		5,500		887,150


Utilities - Electric - 3.25%
Dominion Resources, Inc.		17,300		1,128,825
Huaneng Power International, Inc., H Shares (A)	1,280,000			1,034,098
Veolia Environment (A)		13,750		395,654

				2,558,577

Utilities - Telephone - 0.51%
Vodafone Group Plc		16,700		402,637


TOTAL COMMON STOCKS - 70.32%			$	55,290,519
(Cost: $49,772,495)


CORPORATE DEBT SECURITIES	Principal Amount in Thousands


Capital Equipment - 0.42%
Hyundai Motor Company,
5.3%, 12-19-08 (C)	$	320	328,454


Construction Materials - 0.43%
Interface, Inc.:
7.3%, 4-1-08		160	160,800
9.5%, 2-1-14		170	175,950

			336,750

Forest and Paper Products - 0.33%
Abitibi-Consolidated Inc.,
8.3%, 8-1-05		250	258,125


Furniture and Furnishings - 0.13%
Leggett & Platt, Incorporated,
7.65%, 2-15-05		100	101,678


Multiple Industry - 0.79%
Hutchison Whampoa International (03/33) Limited,
6.25%, 1-24-14 (C)		160	164,190
National Rural Utilities Cooperative Finance Corporation,
3.0%, 2-15-06		250	250,911
Sino-Forest Corporation,
9.125%, 8-17-11 (C)		200	205,500

			620,601

Security and Commodity Brokers - 0.25%
SLM Corporation,
4.0%, 7-25-14		200	199,532



Utilities - Electric - 0.96%
Dominion Resources, Inc.,
7.625%, 7-15-05			250		259,580
Scana Corporation,
2.16125%, 11-15-06			500		500,927

					760,507

Utilities - Telephone - 0.94%
Open Joint Stock Company "Vimpel-Communications",
10.0%, 6-16-09 (C)			700		742,000


TOTAL CORPORATE DEBT SECURITIES - 4.25%				$	3,347,647
(Cost: $3,285,023)

OTHER GOVERNMENT SECURITIES


Japan - 2.97%
Japanese Government 15 Year Floating Rate Bond,
1.03%, 1-20-18 (D)	JPY 250,000				2,340,623


South Korea - 0.89%
Korea Development Bank (The),
1.97%, 10-29-06 (D)		KRW 700			697,389



TOTAL OTHER GOVERNMENT SECURITIES - 3.86%				$	3,038,012

(Cost: $3,024,347)

UNITED STATES GOVERNMENT SECURITIES


Mortgage-Backed Obligations - 1.78%
Federal Home Loan Mortgage Corporation Agency REMIC/CMO Interest Only:
5.5%, 7-15-19			1,174		81,079
5.0%, 2-15-20			725		78,003
5.0%, 6-15-22			969		76,688
5.0%, 7-15-22			3,391		285,901
5.5%, 8-15-22			1,000		119,238
5.5%, 12-15-22			366		44,425
5.0%, 1-15-23			660		57,913
5.5%, 9-15-23			1,201		117,965
5.5%, 10-15-23			2,596		246,633
5.5%, 11-15-23			1,100		163,110
5.5%, 11-25-25			1,205		132,468

					1,403,423



Treasury Obligations - 4.52%
United States Treasury Note,
1.5%, 3-31-06			3,600		3,553,031


TOTAL UNITED STATES GOVERNMENT SECURITIES - 6.30%				$	4,956,454

(Cost: $5,002,440)

UNREALIZED GAIN (LOSS) ON OPEN FORWARD CURRENCY CONTRACTS - (0.22%)		Face Amount in Thousands


Australian Dollar, 5-19-05 (D)	AUD2,300				(97,872	)
British Pound, 11-24-04 (D)	GBP600				(5,232	)
British Pound, 11-24-04 (D)			600		(17,068	)
Euro Dollar, 1-31-05 (D)	EUR1,700				45,755
Euro Dollar, 1-31-05 (D)			1,700		(87,344	)
Japanese Yen, 11-24-04 (D)	JPY118,171				(12,335	)
Japanese Yen, 11-24-04 (D)		118,171			45,488
Japanese Yen, 1-31-05 (D)		224,250			(57,710	)
Japanese Yen, 1-31-05 (D)		224,250			12,277

				$	(174,041	)


TOTAL SHORT-TERM SECURITIES - 7.25%				$	5,697,316

(Cost: $5,697,316)

TOTAL INVESTMENT SECURITIES - 101.59%				$	79,884,155

(Cost: $73,714,147)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (1.59%)					(1,253,496	)


NET ASSETS - 100.00%				$	78,630,659

Notes to Schedule of Investments

*No dividends were paid during the preceding 12 months.

(A)

Listed on an exchange outside the United States.

(B)

Security serves as cover for the following written call options outstanding at September 30, 2004. (See Note 6 to financial statements):

Underlying
Security

Contracts
Subject
to Call

Expiration Month/
Exercise Price

Premium Received

Market Value

Peabody Energy Corporation

283

December/65

19,277

36,790

(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. At September 30, 2004, the total value of these securities amounted to $1,440,144 or 1.83% of net assets.

(D)

Principal amounts are denominated in the indicated foreign currency, where applicable (AUD - Australian Dollar, EUR - Euro, GBP - British Pound, JPY - Japanese Yen, KRW - South Korean Won).

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 ASSET STRATEGY FUND
      September 30, 2004
      (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (Notes 1 and 3):
Bullion (cost - $6,933)	$	7,728
Securities (cost - $66,782)		72,156

		79,884
Receivables:
Fund shares sold		193
Dividends and interest		179
Investment securities sold		87
Prepaid and other assets		25

Total assets		80,368

LIABILITIES
Payable for investment securities purchased		1,497
Payable to Fund shareholders		154
Outstanding written options at market (Note 6)		37
Accrued shareholder servicing (Note 2)		24
Due to custodian		12
Accrued accounting and administrative services fees (Note 2)		4
Accrued distribution and service fees (Note 2)		1
Accrued management fee (Note 2)		1
Accrued service fee (Note 2)		1
Other		6

Total liabilities		1,737

Total net assets	$	78,631

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	61
Additional paid-in capital		71,618
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(68	)
Accumulated undistributed net realized gain on investment transactions		866
Net unrealized appreciation in value of investments		6,154

Net assets applicable to outstanding units of capital	$	78,631

Net asset value per share (net assets divided by shares outstanding):
Class A	$12.85
Class B	$12.82
Class C	$12.82
Class Y	$12.86
Capital shares outstanding:
Class A		1,637
Class B		663
Class C		3,624
Class Y		204
Capital shares authorized	200,000

See Notes to Financial Statements.

Statement of Operations

      IVY ASSET STRATEGY FUND
      For the Six Months Ended September 30, 2004
      (In Thousands)

INVESTMENT LOSS
Income (Note 1B):
Dividends (net of foreign withholding taxes of $16)	$	452
Interest and amortization		262

Total income		714

Expenses (Note 2):
Investment management fee		259
Distribution fee:
Class A		4
Class B		28
Class C		173
Shareholder servicing:
Class A		24
Class B		15
Class C		65
Class Y		2
Service fee:
Class A		19
Class B		9
Class C		58
Class Y		2
Accounting and administrative services fees		23
Custodian fees		22
Legal fees		16
Audit fees		10
Other		9

Total expenses		738

Net investment loss		(24	)

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		279
Realized net gain on futures contracts		18
Realized net gain on written options		36
Realized net loss on purchased options	(16		)
Realized net loss on foreign currency transactions		(36	)

Realized net gain on investments		281

Unrealized appreciation in value of securities during the period		205
Unrealized depreciation in value of written options during the period		(17	)
Unrealized depreciation in value of forward currency contracts during the period	(210		)

Unrealized depreciation in value of investments during the period		(22	)

Net gain on investments		259

Net increase in net assets resulting from operations	$	235

See Notes to Financial Statements.

Statement of Changes in Net Assets

IVY ASSET STRATEGY FUND
(In Thousands)

	For the six months ended 9-30-04

INCREASE IN NET ASSETS
Operations:
Net investment loss	$	(24	)	$	(70	)
Realized net gain on investments		281			3,660
Unrealized appreciation (depreciation)		(22	)		6,241

Net increase in net assets resulting from operations		235			9,831

Distributions to shareholders from (Note 1F):^⁽¹⁾
Net investment income:
Class A		(101	)		(122	)
Class B		(9	)		(11	)
Class C		(60	)		(145	)
Class Y		(11	)		(13	)
Realized gains on investment transactions:
Class A		- -			- -
Class B		- -			- -
Class C		- -			- -
Class Y		- -			- -

		(181	)		(291	)

Capital share transactions (Note 5)		3,239			1,359

Total increase		3,293			10,899
NET ASSETS
Beginning of period		75,338			64,439

End of period	$	78,631		$	75,338

Undistributed net investment income (loss)	$	(68	)	$	173

(1)See "Financial Highlights" on pages 29 - 32.

See Notes to Financial Statements.

Financial Highlights

      IVY ASSET STRATEGY FUND
      Class A Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

				For the fiscal year ended March 31,								For the period from 7-10-00^⁽¹⁾ to
	9-30-04			2004			2003			2002		3-31-01

Net asset value, beginning of period	$	12.86		$	11.18		$	11.33		$	11.98		$	15.22

Income (loss) from investment operations:
Net investment income		0.03			0.08			0.16			0.25			0.15
Net realized and unrealized gain (loss) on investments		0.03			1.71			(0.16	)		(0.40	)		(0.60	)

Total from investment operations		0.06			1.79			(0.00	)		(0.15	)		(0.45	)

Less distributions from:
Net investment income		(0.07	)		(0.11	)		(0.15	)		(0.30	)		(0.13	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.20	)		(2.66	)

Total distributions		(0.07	)		(0.11	)		(0.15	)		(0.50	)		(2.79	)

Net asset value, end of period	$	12.85		$	12.86		$	11.18		$	11.33		$	11.98

Total return^⁽²⁾		0.47	%		16.06	%		0.00	%		- -1.25	%		- -3.77	%
Net assets, end of period (in millions)	$21			$17			$9			$4			$2
Ratio of expenses to average net assets		1.41	%^⁽³⁾		1.47	%		1.40	%		1.45	%		1.26	%^⁽³⁾
Ratio of net investment income to average net assets		0.51	%^⁽³⁾		0.53	%		1.23	%		2.28	%		2.26	%^⁽³⁾
Portfolio turnover rate		72	%		254	%		109	%		143	%		215	%^⁽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 fiscal year ended March 31, 2001.

See Notes to Financial Statements.

Financial Highlights

      IVY ASSET STRATEGY 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 7-3-00^⁽¹⁾ to
	9-30-04			2004			2003			2002		3-31-01

Net asset value, beginning of period	$	12.83		$	11.17		$	11.32		$	11.97		$	15.21

Income (loss) from investment operations:
Net investment income (loss)		(0.02	)		(0.03	)		0.05			0.17			0.07
Net realized and unrealized gain (loss) on investments		0.03			1.71			(0.15	)		(0.41	)		(0.60	)

Total from investment operations		0.01			1.68			(0.10	)		(0.24	)		(0.53	)

Less distributions from:
Net investment income		(0.02	)		(0.02	)		(0.05	)		(0.21	)		(0.05	)
Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.20	)		(2.66	)

Total distributions		(0.02	)		(0.02	)		(0.05	)		(0.41	)		(2.71	)

Net asset value, end of period	$	12.82		$	12.83		$	11.17		$	11.32		$	11.97

Total return		0.05	%		15.07	%		- -0.92	%		- -2.03	%		-4.35	%
Net assets, end of period (in millions)	$8			$7			$3			$3			$2
Ratio of expenses to average net assets		2.28	%^⁽²⁾		2.38	%		2.35	%		2.25	%		2.15	%^⁽²⁾
Ratio of net investment income (loss) to average net assets		- -0.36	%^⁽²⁾		- -0.40	%		0.31	%		1.50	%		1.37	%^⁽²⁾
Portfolio turnover rate		72	%		254	%		109	%		143	%		215	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements.

Financial Highlights

IVY ASSET STRATEGY FUND
Class C Shares^⁽¹⁾ For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended March 31,
	9-30-04				2004			2003			2002			2001			2000

Net asset value, beginning of period		$	12.83		$	11.17		$	11.32		$	11.97		$	15.21		$	11.20

Income (loss) from investment operations:
Net investment income (loss)			(0.01	)		(0.03	)		0.05			0.19			0.11			0.03
Net realized and unrealized gain (loss) on investments			0.02			1.73			(0.14	)		(0.43	)		(0.62	)		4.33

Total from investment operations			0.01			1.70			(0.09	)		(0.24	)		(0.51	)		4.36

Less distributions from:
Net investment income			(0.02	)		(0.04	)		(0.06	)		(0.21	)		(0.07	)		(0.05	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.20	)		(2.66	)		(0.30	)

Total distributions			(0.02	)		(0.04	)		(0.06	)		(0.41	)		(2.73	)		(0.35	)

Net asset value, end of period		$	12.82		$	12.83		$	11.17		$	11.32		$	11.97		$	15.21

Total return			0.05	%		15.21	%		- -0.79	%		- -1.98	%		-4.22	%		39.60	%
Net assets, end of period (in millions)		$46			$49			$51			$47			$54			$52
Ratio of expenses to average net assets			2.21	%^⁽²⁾		2.27	%		2.20	%		2.20	%		2.15	%		2.24	%
Ratio of net investment income (loss) to average net assets			- -0.28	%^⁽²⁾		- -0.26	%		0.46	%		1.59	%		0.86	%		0.24	%
Portfolio turnover rate			72	%		254	%		109	%		143	%		215	%		204	%

(1)See Note 5.

(2)Annualized.

See Notes to Financial Statements.

Financial Highlights

      IVY ASSET STRATEGY FUND
      Class Y Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended March 31,
	9-30-04				2004			2003			2002			2001			2000

Net asset value, beginning of period		$	12.87		$	11.18		$	11.33		$	11.98		$	15.26		$	11.21

Income (loss) from investment operations:
Net investment income			0.04			0.09			0.11			0.28			0.24			0.15
Net realized and unrealized gain (loss) on investments			0.02			1.71			(0.10	)		(0.42	)		(0.63	)		4.33

Total from investment operations			0.06			1.80			0.01			(0.14	)		(0.39	)		4.48

Less distributions from:
Net investment income			(0.07	)		(0.11	)		(0.16	)		(0.31	)		(0.23	)		(0.13	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.20	)		(2.66	)		(0.30	)

Total distributions			(0.07	)		(0.11	)		(0.16	)		(0.51	)		(2.89	)		(0.43	)

Net asset value, end of period		$	12.86		$	12.87		$	11.18		$	11.33		$	11.98		$	15.26

Total return			0.51	%		16.19	%		0.08	%		- -1.14	%		- -3.39	%		40.85	%
Net assets, end of period (in thousands)		$2,627			$1,991			$1,150			$627			$550			$508
Ratio of expenses to average net assets			1.33	%^⁽¹⁾		1.39	%		1.32	%		1.33	%		1.32	%		1.33	%
Ratio of net investment income to average net assets			0.60	%^⁽¹⁾		0.67	%		1.34	%		2.44	%		1.71	%		1.14	%
Portfolio turnover rate			72	%		254	%		109	%		143	%		215	%		204	%

(1)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY CORE EQUITY FUND

Portfolio Highlights

On September 30, 2004, Ivy Core Equity Fund had net assets totaling $262,103,929 invested in a diversified portfolio of:

99.06%		Common Stocks
0.94%		Cash and Cash Equivalents

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

Technology Stocks	$	18.15
Energy Stocks	$	17.39
Health Care Stocks	$	11.61
Financial Services Stocks	$	9.74
Consumer Nondurables Stocks	$	7.42
Retail Stocks	$	6.50
Utilities Stocks	$	5.75
Consumer Services Stocks	$	5.15
Capital Goods Stocks	$	4.56
Raw Materials Stocks	$	4.21
Multi Industry Stocks	$	3.57
Transportation Stocks	$	3.52
Cash and Cash Equivalents and Miscellaneous Stocks	$	2.43


The Investments of Ivy Core Equity Fund
*September 30, 2004*
COMMON STOCKS	Shares		Value


Aircraft - 5.55%
Goodrich Corporation	84,707	$	2,656,412
Lockheed Martin Corporation	145,804		8,132,947
United Technologies Corporation	40,100		3,744,538

			14,533,897

Aluminum - 0.12%
Alcoa Incorporated	9,000		302,310


Banks - 3.45%
Bank of America Corporation	2		87
Citigroup Inc.	1		44
U.S. Bancorp	107,255		3,099,669
Wells Fargo & Company	99,686		5,944,276

			9,044,076

Beverages - 4.19%
Anheuser-Busch Companies, Inc.	40,874		2,041,656
Coca-Cola Company (The)	158,128		6,333,026
PepsiCo, Inc.	53,666		2,610,851

			10,985,533

Broadcasting - 3.73%
Comcast Holdings Corporation, Class A*	93,700		2,618,915
Cox Communications, Inc., Class A*	117,612		3,896,486
Liberty Media Corporation, Class A*	372,208		3,245,654

			9,761,055

Capital Equipment - 4.56%
Caterpillar Inc.	39,923		3,211,805
Deere & Company	92,911		5,997,405
Illinois Tool Works Inc.	29,466		2,745,347

			11,954,557

Chemicals - Petroleum and Inorganic - 1.00%
du Pont (E.I.) de Nemours and Company	61,168		2,617,990


Chemicals - Specialty - 2.52%
Air Products and Chemicals, Inc.	121,559		6,610,378


Communications Equipment - 1.29%
Avaya Inc.*	1		14
Cisco Systems, Inc.*	187,500		3,385,312

			3,385,326

Computers - Micro - 2.80%
Apple Computer, Inc. (A)*	83,900		3,251,964
Dell Inc.*	114,988		4,087,823

			7,339,787

Computers - Peripherals - 5.83%
Microsoft Corporation	191,560		5,295,676
Oracle Corporation*	259,200		2,927,664
SAP Aktiengesellschaft, ADR	181,147		7,055,676

			15,279,016

Cosmetics and Toiletries - 0.51%
Avon Products, Inc.	30,900		1,349,712


Electronic Components - 2.27%
Analog Devices, Inc.	42,732		1,657,147
Intel Corporation	150,416		3,014,337
Texas Instruments Incorporated	60,200		1,281,056

			5,952,540

Electronic Instruments - 0.41%
Applied Materials, Inc.*	65,100		1,073,825


Finance Companies - 1.12%
Fannie Mae	46,100		2,922,740


Food and Related - 1.51%
Kellogg Company	92,553		3,948,311


Health Care - Drugs - 6.24%
Amgen Inc.*	47,588		2,702,760
Gilead Sciences, Inc.*	38,400		1,435,200
Novartis AG, Registered Shares (B)	82,400		3,846,391
Pfizer Inc.	273,223		8,360,624

			16,344,975

Health Care - General - 2.16%
Wyeth	151,597		5,669,728


Hospital Supply and Management - 3.21%
Aetna Inc.	14,900		1,488,957
Caremark Rx, Inc.*	16,300		522,741
Guidant Corporation	12,300		812,292
Medtronic, Inc.	82,701		4,292,182
UnitedHealth Group Incorporated	17,600		1,297,824

			8,413,996

Hotels and Gaming - 1.10%
Marriott International, Inc., Class A	55,278		2,872,245


Household - General Products - 1.21%
Colgate-Palmolive Company	70,268		3,174,708


Insurance - Property and Casualty - 4.38%
American International Group, Inc.	73,914		5,025,413
Berkshire Hathaway Inc., Class B*	2,250		6,459,750

			11,485,163

Leisure Time Industry - 0.32%
Carnival Corporation	17,500		827,575


Mining - 0.57%
Phelps Dodge Corporation	16,200		1,490,886


Multiple Industry - 3.57%
General Electric Company	278,857		9,364,018


Petroleum - International - 9.79%
Anadarko Petroleum Corporation	133,661		8,869,744
Burlington Resources Inc.	213,036		8,691,869
Exxon Mobil Corporation	167,479		8,094,260

			25,655,873

Petroleum - Services - 7.60%
Baker Hughes Incorporated	223,831		9,785,891
Nabors Industries Ltd.*	61,331		2,904,023
Schlumberger Limited	86,588		5,828,238
Transocean Inc.*	39,300		1,406,154

			19,924,306

Railroad - 1.04%
Union Pacific Corporation	46,473		2,723,318


Retail - General Merchandise - 5.31%
Costco Wholesale Corporation	190,838		7,924,548
Kohl's Corporation*	42,000		2,023,980
Wal-Mart Stores, Inc.	74,800		3,979,360

			13,927,888

Retail - Specialty Stores - 1.19%
Best Buy Co., Inc. (A)	57,716		3,130,516


Security and Commodity Brokers - 0.79%
Goldman Sachs Group, Inc. (The)	22,100		2,060,604


Timesharing and Software - 1.49%
eBay Inc.*	42,600		3,917,709


Trucking and Shipping - 2.48%
United Parcel Service, Inc., Class B	85,566		6,496,171


Utilities - Electric - 2.98%
Dominion Resources, Inc.	119,772		7,815,123


Utilities - Telephone - 2.77%
Sprint Corporation	38,600		777,018
Vodafone Group Plc, ADR	269,177		6,489,857

			7,266,875


TOTAL COMMON STOCKS - 99.06%		$	259,622,730

(Cost: $196,296,577)

TOTAL SHORT-TERM SECURITIES - 0.95%		$	2,498,000

(Cost: $2,498,000)

TOTAL INVESTMENT SECURITIES - 100.01%		$	262,120,730

(Cost: $198,794,577)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.01%)			(16,801	)


NET ASSETS - 100.00%		$	262,103,929

Notes to Schedule of Investments

*No dividends were paid during the preceding 12 months.

(A)

Security serves as cover for the following written call options outstanding as of September 30, 2004. (See Note 6 to financial statements):

Underlying
Security

Contracts
Subject
to Call

Expiration Month/
Exercise Price

Premium Received

Market Value

Apple Computer, Inc.

159

November/45

10,161

10,335

Best Buy Co., Inc.

380

December/60

29,563

28,500

39,724

38,835

(B)

Listed on an exchange outside the United States.

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 CORE EQUITY FUND
      September 30, 2004
      (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $198,795) (Notes 1 and 3)	$	262,121
Receivables:
Investment securities sold		1,704
Dividends and interest		280
Fund shares sold		164
Prepaid and other assets		27

Total assets		264,296

LIABILITIES
Payable to Fund shareholders		1,092
Payable for investment securities purchased		820
Accrued shareholder servicing (Note 2)		124
Outstanding written options at market (Note 6)		39
Due to custodian		16
Accrued accounting and administrative services fees (Note 2)		8
Accrued management fee (Note 2)		5
Accrued distribution fee (Note 2)		4
Accrued service fee (Note 2)		2
Other		82

Total liabilities		2,192

Total net assets	$	262,104

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	325
Additional paid-in capital		262,295
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(891	)
Accumulated undistributed net realized loss on investment transactions		(62,952	)
Net unrealized appreciation in value of investments		63,327

Net assets applicable to outstanding units of capital	$	262,104

Net asset value per share (net assets divided by shares outstanding):
Class A	$8.30
Class B	$7.96
Class C	$8.00
Class Y	$8.60
Capital shares outstanding:
Class A		7,621
Class B		1,504
Class C		23,133
Class Y		200
Capital shares authorized		400,000

See Notes to Financial Statements.

Statement of Operations

      IVY CORE EQUITY FUND
      For the Six Months Ended September 30, 2004
      (In Thousands)

INVESTMENT LOSS
Income (Note 1B):
Dividends (net of foreign withholding taxes of $6)	$	1,922
Interest and amortization		23

Total income		1,945

Expenses (Note 2):
Investment management fee		953
Distribution fee:
Class A		5
Class B		45
Class C		720
Shareholder servicing:
Class A		145
Class B		32
Class C		373
Class Y		2
Service fee:
Class A		78
Class B		15
Class C		240
Class Y		2
Accounting and administrative services fees		48
Legal fees		41
Audit fees		18
Custodian fees		9
Other		86

Total expenses		2,812

Net investment loss		(867	)

REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		5,781
Realized net gain on foreign currency transactions		8

Realized net gain on investments		5,789
Unrealized appreciation in value of investments during the period		1,477

Net gain on investments		7,266

Net increase in net assets resulting from operations	$	6,399

See Notes to Financial Statements.

Statement of Changes in Net Assets

IVY CORE EQUITY FUND
(In Thousands)


	For the six months ended 9-30-04				For the fiscal year ended 3-31-04
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss	$	(867	)	$	(887	)
Realized net gain on investments		5,789			15,261
Unrealized appreciation		1,477			33,183

Net increase in net assets resulting from operations		6,399			47,557

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

		- -			- -

Capital share transactions (Note 5)		(33,550	)		21,718

Total increase (decrease)		(27,151	)		69,275
NET ASSETS
Beginning of period		289,255			219,980

End of period	$	262,104		$	289,255

Undistributed net investment loss	$	(891	)	$	(32	)

(1)See "Financial Highlights" on pages 41 - 44.

See Notes to Financial Statements.

Financial Highlights

IVY CORE EQUITY FUND^⁽¹⁾ Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended												For the period from 7-3-00^⁽²⁾ to
	For the six months ended				For the fiscal year ended March 31,								For the period from 7-3-00^⁽²⁾ to
	9-30-04				2004			2003			2002		3-31-01

Net asset value, beginning of period		$	8.08		$	6.63		$	8.89		$	9.51		$	13.89

Income (loss) from investment operations:
Net investment income (loss)			0.01			0.01		(0.08		)	(0.20		)		0.00
Net realized and unrealized gain (loss) on investments			0.21			1.44		(2.18		)	(0.11		)		(2.00	)

Total from investment operations			0.22			1.45		(2.26		)	(0.31		)		(2.00	)

Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.00	)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.31		)		(2.38	)

Total distributions		(0.00		)	(0.00		)	(0.00		)	(0.31		)		(2.38	)

Net asset value, end of period		$	8.30		$	8.08		$	6.63		$	8.89		$	9.51

Total return^⁽³⁾			2.72	%	21.87		%	- -25.42		%	- -3.18		%	- -16.72		%
Net assets, end of period (in millions)		$63			$75			$13			$9			$4
Ratio of expenses to average net assets			1.54	%^⁽⁴⁾		1.46	%		1.31	%		1.26	%		1.18	%^⁽⁴⁾
Ratio of net investment income (loss) to average net assets		- -0.12		%^⁽⁴⁾		0.24	%		0.28	%	- -0.11		%		- -0.11	%^⁽⁴⁾
Portfolio turnover rate			17	%		59	%		39	%		22	%		39	%^⁽⁵⁾

(1)Core Equity Fund (formerly Total Return Fund) changed its name effective October 2, 2000.

(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 fiscal year ended March 31, 2001.

See Notes to Financial Statements.

Financial Highlights

IVY CORE EQUITY FUND^⁽¹⁾ Class B Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended													For the period from 7-11-00^⁽²⁾ to
	For the six months ended				For the fiscal year ended March 31,									For the period from 7-11-00^⁽²⁾ to
	9-30-04				2004			2003			2002			3-31-01

Net asset value, beginning of period		$	7.78		$	6.45		$	8.74		$	9.44			$	14.10

Income (loss) from investment operations:
Net investment loss		(0.04		)	(0.05		)	(0.06		)	(0.14					(0.05	)
Net realized and unrealized gain (loss) on investments			0.22			1.38		(2.23		)	(0.25					(2.23	)

Total from investment operations			0.18			1.33		(2.29		)	(0.39		)			(2.28	)

Less distributions from:
Net investment income		(0.00			(0.00		)	(0.00		)	(0.00		)			(0.00	)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.31		)			(2.38	)

Total distributions		(0.00		)	(0.00		)	(0.00		)	(0.31		)			(2.38	)

Net asset value, end of period		$	7.96		$	7.78		$	6.45		$	8.74			$	9.44

Total return			2.31	%	20.62		%	- -26.20		%	-4.06		%		- -18.50		%
Net assets, end of period (in millions)		$12			$12			$5			$6				$5
Ratio of expenses to average net assets			2.40	%^⁽³⁾		2.42	%		2.36	%		2.18	%			2.11	%^⁽³⁾
Ratio of net investment loss to average net assets		- -0.96		%^⁽³⁾	- -0.66		%	- -0.76		%	- -1.04		%			- -1.02	%^⁽³⁾
Portfolio turnover rate			17	%		59	%		39	%		22	%			39	%^⁽⁴⁾

(1)Core Equity Fund (formerly Total Return Fund) changed its name effective October 2, 2000.

(2)Commencement of operations of the class.

(3)Annualized.

(4)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements

Financial Highlights

IVY CORE EQUITY FUND^⁽¹⁾ Class C Shares^⁽²⁾ For a Share of Capital Stock Outstanding Throughout Each Period:

	9-30-04				2004			2003			2002			2001			2000
	For the six months ended				For the fiscal year ended March 31,

Net asset value, beginning of period		$	7.82		$	6.48		$	8.76		$	9.45		$	13.76		$	11.52

Income (loss) from investment operations:
Net investment loss		(0.04		)	(0.04		)	(0.04		)	(0.08		)		(0.11	)		(0.01	)
Net realized and unrealized gain (loss) on investments			0.22			1.38		(2.24		)	(0.30		)		(1.82	)		2.71

Total from investment operations			0.18			1.34		(2.28		)	(0.38		)		(1.93	)		2.70

Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.00	)		(0.03	)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.31		)		(2.38	)		(0.43	)

Total distributions		(0.00		)	(0.00		)	(0.00		)	(0.31		)		(2.38	)		(0.46	)

Net asset value, end of period		$	8.00		$	7.82		$	6.48		$	8.76		$	9.45		$	13.76

Total return			2.30	%	20.68		%	- -26.03		%	- -3.94		%	- -16.40		%		23.98	%
Net assets, end of period (in millions)		$185			$200			$200			$356			$440			$585
Ratio of expenses to average net assets			2.23	%^⁽³⁾		2.27	%		2.18	%		2.05	%		1.97	%		1.98	%
Ratio of net investment loss to average net assets		- -0.80		%^⁽³⁾	- -0.45		%	- -0.58		%	- -0.91		%		- -0.93	%		- -0.12	%
Portfolio turnover rate			17	%		59	%		39	%		22	%		39	%		76	%

(1)Core Equity Fund (formerly Total Return Fund) changed its name effective October 2, 2000.

(2)See Note 5.

(3)Annualized.

See Notes to Financial Statements.

Financial Highlights

IVY CORE EQUITY FUND^⁽¹⁾ Class Y Shares
For a Share of Capital Stock Outstanding Throughout Each Period:


	For the six months ended
	For the six months ended				For the fiscal year ended March 31,
	9-30-04				2004			2003			2002			2001			2000

Net asset value, beginning of period		$	8.37		$	6.86		$	9.19		$	9.82		$	14.08		$	11.78

Income (loss) from investment operations:
Net investment income (loss)			0.09			0.05			0.04		(0.11		)		(0.04	)		0.06
Net realized and unrealized gain (loss) on investments			0.14			1.46		(2.37		)	(0.21		)		(1.84	)		2.80

Total from investment operations			0.23			1.51		(2.33		)	(0.32		)		(1.88	)		2.86

Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)		(0.00	)		(0.13	)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.31		)		(2.38	)		(0.43	)

Total distributions		(0.00		)	(0.00		)	(0.00		)	(0.31		)		(2.38	)		(0.56	)

Net asset value, end of period		$	8.60		$	8.37		$	6.86		$	9.19		$	9.82		$	14.08

Total return			2.75	%	22.01		%	- -25.35		%	- -3.18		%	- -15.62		%		24.96	%
Net assets, end of period (in millions)		$2			$2			$2			$4			$2			$2
Ratio of expenses to average net assets			1.23	%^⁽²⁾		1.26	%		1.20	%		1.17	%		1.15	%		1.16	%
Ratio of net investment income (loss) to average net assets		- -0.53		%^⁽²⁾		0.61	%		0.40	%	- -0.03		%		- -0.11	%		0.67	%
Portfolio turnover rate			17	%		59	%		39	%		22	%		39	%		76	%

(1)Core Equity Fund (formerly Total Return Fund) changed its name effective October 2, 2000.

(2)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY HIGH INCOME FUND

Portfolio Highlights

On September 30, 2004, Ivy High Income Fund had net assets totaling $61,026,627 invested in a diversified portfolio of:


93.47%		Corporate Debt Securities
5.96%		Cash and Cash Equivalents
0.57%		Common and Preferred Stocks, Right and Warrant

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


Consumer Services Bonds	$	12.79
Utilities Bonds	$	11.23
Capital Goods Bonds	$	10.39
Consumer Nondurables Bonds	$	10.16
Retail Bonds	$	6.62
Business Equipment and Services Bonds	$	6.59
Financial Services Bonds	$	6.09
Cash and Cash Equivalents	$	5.96
Energy Bonds	$	5.65
Shelter Bonds	$	4.97
Raw Materials Bonds	$	4.79
Health Care Bonds	$	3.87
Consumer Durables Bonds	$	3.76
Technology Bonds	$	3.55
Multi-Industry Bonds	$	2.42
Transportation Bonds	$	0.59
Common and Preferred Stocks, Right and Warrant	$	0.57

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


A	0.49	%
BBB	1.25	%
BB	11.95	%
B	60.14	%
Below B	18.80	%
Non-rated	0.84	%
Cash and Cash Equivalents and Equities	6.53	%


The Investments of Ivy High Income Fund
*September 30, 2004*
COMMON STOCKS, RIGHT AND WARRANT	Shares		Value


Communications Equipment - 0.00%
ONO Finance Plc, Rights (A)*	250	$	250


Multiple Industry - 0.19%
ADESA, Inc.*	6,900		113,367


Utilities - Telephone - 0.11%
IWO Holdings, Inc., Warrants (A)*	250		3
US Unwired, Inc., Class A*	25,280		67,497

			67,500


TOTAL COMMON STOCKS, RIGHT AND WARRANT - 0.30%		$	181,117

(Cost: $219,470)

PREFERRED STOCKS


Apparel - 0.25%
Anvil Holdings, Inc., 13.0%*	14,774		151,435


Broadcasting - 0.02%
Adelphia Communications Corporation, 13.0%*	2,500		15,625


TOTAL PREFERRED STOCKS - 0.27%		$	167,060

(Cost: $520,004)


CORPORATE DEBT SECURITIES	Principal Amount in Thousands


Aircraft - 1.89%
BE Aerospace, Inc.,
8.5%, 10-1-10	$	200	218,000
Bombardier Recreational Products Inc.,
8.375%, 12-15-13 (A)		75	78,938
L-3 Communications Corporation,
6.125%, 1-15-14		300	300,000
Orbital Sciences Corporation,
9.0%, 7-15-11		500	556,250

			1,153,188

Aluminum - 0.43%
Century Aluminum Company,
7.5%, 8-15-14 (A)		250	263,125



Apparel - 1.44%
Anvil Knitwear, Inc.,
10.875%, 3-15-07	100		82,000
Perry Ellis International, Inc.,
8.875%, 9-15-13	750		795,000

			877,000

Beverages - 0.45%
Constellation Brands, Inc.,
8.125%, 1-15-12	250		274,375


Broadcasting - 3.29%
CCH II and CCH II Capital,
10.25%, 9-15-10	320		326,800
Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation:
10.0%, 4-1-09	250		202,500
0.0%, 1-15-12 (B)	500		280,000
8.0%, 4-30-12 (A)	300		299,250
Entravision Communications Corporation,
8.125%, 3-15-09	100		106,250
Gray Communications Systems, Inc.,
9.25%, 12-15-11	375		420,937
Susquehanna Media Co.,
7.375%, 4-15-13	250		262,500
Young Broadcasting Inc.,
8.5%, 12-15-08	100		106,250

			2,004,487

Business Equipment and Services - 6.37%
Alderwoods Group, Inc.,
7.75%, 9-15-12 (A)	625		660,937
Argo-Tech Corporation,
9.25%, 6-1-11 (A)	75		80,438
Armor Holdings, Inc.,
8.25%, 8-15-13	250		275,625
IESI Corporation,
10.25%, 6-15-12	100		108,000
Iron Mountain Incorporated,
8.625%, 4-1-13	300		325,500
Nextel Partners, Inc.,
8.125%, 7-1-11	400		424,000
Owens & Minor, Inc.,
8.5%, 7-15-11	250		276,250
Synagro Technologies, Inc.,
9.5%, 4-1-09	500		535,000
UCAR Finance Inc.,
10.25%, 2-15-12	275		314,875
Vertis, Inc.:
9.75%, 4-1-09	25		26,875
10.875%, 6-15-09	500		537,500
13.5%, 12-7-09 (A)	325		325,000

			3,890,000

Capital Equipment - 3.12%
Atrium Companies, Inc.,
10.5%, 5-1-09	750		787,500
Case New Holland Inc.,
9.25%, 8-1-11 (A)	400		448,000
Esterline Technologies Corporation,
7.75%, 6-15-13	250		267,500
Mueller Group, Inc.:
6.44375%, 11-1-11 (A)	100		103,000
10.0%, 5-1-12 (A)	275		297,000

			1,903,000

Chemicals - Petroleum and Inorganic - 1.39%
Berry Plastics Corporation,
10.75%, 7-15-12	150		169,500
PolyOne Corporation,
8.875%, 5-1-12	500		510,000
Resolution Performance Products LLC and RPP Capital Corporation,
13.5%, 11-15-10	175		169,750

			849,250

Chemicals - Specialty - 1.68%
Buckeye Technologies Inc.:
8.0%, 10-15-10	250		245,000
8.5%, 10-1-13	250		268,750
Ethyl Corporation,
8.875%, 5-1-10	475		513,000

			1,026,750

Coal - 0.45%
Southern Star Central Corp.,
8.5%, 8-1-10	250		272,500


Communications Equipment - 0.91%
EchoStar DBS Corporation,
9.125%, 1-15-09	250		278,125
General Cable Corporation,
9.5%, 11-15-10	250		277,500

			555,625

Computers - Peripherals - 0.42%
Activant Solutions Inc.,
10.5%, 6-15-11	250		257,500


Construction Materials - 4.80%
Ames True Temper, Inc.,
10.0%, 7-15-12 (A)	125		127,656
Brand Services, Inc.,
12.0%, 10-15-12	100		113,500
Interface, Inc.:
10.375%, 2-1-10	250		283,750
9.5%, 2-1-14	250		258,750
Jacuzzi Brands, Inc.,
9.625%, 7-1-10	500		552,500
MAAX Corporation,
9.75%, 6-15-12 (A)	500		530,000
Norcraft Companies, L.P. and Norcraft Finance Corp.,
9.0%, 11-1-11 (A)	500		545,000
Ply Gem Industries, Inc.,
9.0%, 2-15-12 (A)	400		399,000
WII Components, Inc.,
10.0%, 2-15-12	125		121,250

			2,931,406

Containers - 3.70%
Alltrista Corporation,
9.75%, 5-1-12	250		276,250
Crown European Holdings,
9.5%, 3-1-11	500		557,500
MDP Acquisitions plc,
9.625%, 10-1-12	280		316,400
Owens-Brockway Glass Container Inc.,
8.75%, 11-15-12	520		577,200
Pliant Corporation,
0.0%, 6-15-09 (B)	500		427,500
Stone Container Finance Company of Canada II,
7.375%, 7-15-14 (A)	100		104,750

			2,259,600

Cosmetics and Toiletries - 0.60%
Armkel, LLC and Armkel Finance, Inc.,
9.5%, 8-15-09	100		109,000
Chattem, Inc.,
7.0%, 3-1-14	250		254,375

			363,375

Defense - 0.17%
DRS Technologies, Inc.,
6.875%, 11-1-13	100		104,000


Electrical Equipment - 2.33%
Coleman Cable Inc.,
9.875%, 10-1-12 (A)	400		406,500
Communications & Power Industries, Inc.,
8.0%, 2-1-12	100		104,500
Nortek, Inc.,
8.5%, 9-1-14 (A)	350		366,625
Rayovac Corporation,
8.5%, 10-1-13	400		434,000
Rexnord Corporation,
10.125%, 12-15-12	100		113,000

			1,424,625

Electronic Instruments - 0.16%
Fisher Scientific International Inc.,
8.125%, 5-1-12	87		97,005


Finance Companies - 4.96%
Cellu Tissue Holdings, Inc.,
9.75%, 3-15-10 (A)	100		101,500
Dollar Financial Group, Inc.,
9.75%, 11-15-11	150		159,000
Equinox Holdings, Inc.,
9.0%, 12-15-09	185		190,550
MSW Energy Holdings LLC and MSW Energy Finance Co., Inc.,
8.5%, 9-1-10	100		109,500
Nexstar Broadcasting, Inc.,
7.0%, 1-15-14	175		172,375
Pinnacle Foods Holding Corporation,
8.25%, 12-1-13 (A)	300		282,750
Qwest Capital Funding, Inc.,
7.75%, 8-15-06	250		250,938
Standard Aero Holdings, Inc.,
8.25%, 9-1-14 (A)	250		258,750
Toll Corp.,
8.0%, 5-1-09	500		520,000
UAP Holding Corp.,
0.0%, 7-15-12 (A)(B)	250		191,250
Vanguard Health Holding Company I, LLC and Vanguard Holding Company I, Inc.,
0.0%, 10-1-15 (A)(B)	500		288,750
Vanguard Health Holding Company II, LLC and Vanguard Holding Company II, Inc.,
9.0%, 10-1-14 (A)	500		501,250

			3,026,613

Food and Related - 1.72%
American Seafoods Group LLC and American Seafoods, Inc.,
10.125%, 4-15-10	425		454,750
Chiquita Brands International, Inc.,
7.5%, 11-1-04 (A)	150		150,000
Merisant Company,
9.5%, 7-15-13 (A)	150		142,500
Pilgrim's Pride Corporation:
9.625%, 9-15-11	125		140,000
9.25%, 11-15-13	150		165,000

			1,052,250

Forest and Paper Products - 1.66%
Georgia-Pacific Corporation:
7.375%, 7-15-08	300		327,000
8.875%, 2-1-10	200		234,000
8.0%, 1-15-24	250		284,375
Jefferson Smurfit Corporation,
8.25%, 10-1-12	150		165,375

			1,010,750

Furniture and Furnishings - 1.37%
Associated Materials Incorporated:
9.75%, 4-15-12	505		579,488
0.0%, 3-1-14 (A)(B)	350		254,625

			834,113

Health Care - General - 1.63%
Encore Medical IHC, Inc.,
9.75%, 10-1-12 (A)	500		493,750
MQ Associates, Inc.,
0.0%, 8-15-12 (A)(B)	625		393,750
Medical Device Manufacturing, Inc.,
10.0%, 7-15-12 (A)	100		106,000

			993,500

Homebuilders, Mobile Homes - 0.25%
Technical Olympic USA, Inc.,
7.5%, 3-15-11	150		152,625


Hospital Supply and Management - 2.24%
Psychiatric Solutions, Inc.,
10.625%, 6-15-13	400		452,000
Triad Hospitals, Inc.,
7.0%, 11-15-13	250		254,375
US Oncology, Inc.,
9.0%, 8-15-12 (A)	500		517,500
United Surgical Partners Holdings, Inc.,
10.0%, 12-15-11	125		142,813

			1,366,688

Hotels and Gaming - 3.00%
Inn of the Mountain Gods Resort and Casino,
12.0%, 11-15-10	435		498,075
John Q Hammons Hotels, L.P. and John Q Hammons Hotels Finance Corporation III,
8.875%, 5-15-12	300		334,500
MGM MIRAGE,
8.5%, 9-15-10	250		284,063
Premier Entertainment Biloxi LLC and Premier Finance
Biloxi Corp.,
10.75%, 2-1-12	100		105,500
Turning Stone Casino Resort Enterprise,
9.125%, 12-15-10 (A)	100		108,000
Venetian Casino Resort, LLC and Las Vegas Sands, Inc.,
11.0%, 6-15-10	250		289,375
Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp.,
12.0%, 11-1-10	167		208,750

			1,828,263

Household - General Products - 2.25%
Graham Packaging Company, L.P. and GPC Capital Corp. I:
8.50%, 10-15-12 (A)	50		51,000
9.875%, 10-15-14 (A)	100		102,375
Nebraska Book Company, Inc.,
8.625%, 3-15-12	1,050		1,044,750
Sealy Mattress Company,
8.25%, 6-15-14	175		176,750

			1,374,875

Leisure Time Industry - 1.08%
Hollywood Park, Inc.,
9.25%, 2-15-07	125		128,125
Pinnacle Entertainment, Inc.,
8.25%, 3-15-12	250		250,625
Royal Caribbean Cruises Ltd.,
8.0%, 5-15-10	250		281,562

			660,312

Metal Fabrication - 0.14%
IMCO Recycling Inc.,
10.375%, 10-15-10	75		82,500


Mining - 1.29%
Compass Minerals International, Inc.,
0.0%, 6-1-13 (B)	1,000		790,000


Motion Pictures - 4.14%
AMC Entertainment Inc.,
5.97%, 8-15-10 (A)	125		128,750
Carmike Cinemas, Inc.,
7.5%, 2-15-14	500		506,250
Cinemark, Inc.,
0.0%, 3-15-14 (B)	900		618,750
Cinemark USA, Inc.,
9.0%, 2-1-13	100		111,750
LCE Acquisition Corporation,
9.0%, 8-1-14 (A)	1,125		1,161,563

			2,527,063

Motor Vehicle Parts - 0.75%
Tenneco Automotive Inc.,
10.25%, 7-15-13	400		456,000


Motor Vehicles - 2.62%
AutoNation, Inc.,
9.0%, 8-1-08	250		287,500
Group 1 Automotive, Inc.,
8.25%, 8-15-13	125		131,875
Sonic Automotive, Inc.,
8.625%, 8-15-13	750		793,125
United Auto Group, Inc.,
9.625%, 3-15-12	350		385,875

			1,598,375

Multiple Industry - 2.42%
ADESA, Inc.,
7.625%, 6-15-12	100		103,000
Buckeye Cellulose Corporation,
9.25%, 9-15-08	145		145,000
Doane Pet Care Company,
10.75%, 3-1-10	300		320,250
MCI, Inc.:
5.908%, 5-1-07	68		67,405
6.688%, 5-1-09	68		65,535
7.735%, 5-1-14	60		56,850
Muzak LLC and Muzak Finance Corp.,
10.0%, 2-15-09	500		442,500
Tyco International Group S.A.,
3.125%, 1-15-23, Convertible (A)	100		149,750
WESCO Distribution, Inc.,
9.125%, 6-1-08	125		128,906

			1,479,196

Petroleum - Domestic - 1.25%
Encore Acquisition Company,
8.375%, 6-15-12	100		111,500
Exco Resources, Inc.,
7.25%, 1-15-11	350		371,000
Frontier Oil Corporation,
6.625%, 10-1-11 (A)	50		50,625
KCS Energy, Inc.,
7.125%, 4-1-12	100		104,500
Whiting Petroleum Corporation,
7.25%, 5-1-12	125		126,250

			763,875

Petroleum - International - 0.21%
Newfield Exploration Company,
6.625%, 9-1-14 (A)	125		130,312


Petroleum - Services - 3.74%
Foundation PA Coal Company,
7.25%, 8-1-14 (A)	100		106,250
GulfTerra Energy Partners, L.P.,
8.5%, 6-1-10	359		417,786
Hanover Compressor Company:
0.0%, 3-31-07	375		316,875
8.625%, 12-15-10	650		705,250
9.0%, 6-1-14	100		109,750
Pemex Project Funding Master Trust,
7.375%, 12-15-14	300		327,000
R&B Falcon Corporation,
9.5%, 12-15-08	250		301,165

			2,284,076

Publishing - 1.28%
Dex Media East LLC and Dex Media East Finance Co.,
12.125, 11-15-12	97		120,765
Dex Media, Inc.,
8.0%, 11-15-13	250		262,500
Dex Media West LLC and Dex Media West Finance Co.:
8.5%, 8-15-10	100		113,500
9.875%, 8-15-13	244		286,700

			783,465

Railroad - 0.59%
Kansas City Southern Railway Company (The),
7.5%, 6-15-09	350		357,875


Real Estate Investment Trust - 1.69%
Host Marriott, L.P.:
9.25%, 10-1-07	250		280,000
7.125%, 11-1-13	250		262,500
Meritage Corporation:
9.75%, 6-1-11	250		280,625
7.0%, 5-1-14	200		205,000

			1,028,125

Restaurant - 0.63%
Pierre Merger Corp.,
9.875%, 7-15-12 (A)	375		386,250


Retail - Food Stores - 0.26%
Couche-Tard U.S. L.P. and Couche-Tard Financing Corp.,
7.5%, 12-15-13	150		159,750


Retail - General Merchandise - 0.97%
Domino's Inc.,
8.25%, 7-1-11	110		119,075
Roundy's, Inc.,
8.875%, 6-15-12	300		323,250
Stater Bros. Holdings Inc.,
5.38%, 6-15-10 (A)	150		152,250
			594,575
Retail - Specialty Stores - 4.76%
CSK Auto, Inc.,
7.0%, 1-15-14	500		483,750
Cole National Group, Inc.,
8.875%, 5-15-12	350		396,375
FTD, Inc.,
7.75%, 2-15-14	300		299,250
Jean Coutu Group (PJC) Inc. (The):
7.625%, 8-1-12 (A)	250		254,375
8.5%, 8-1-14 (A)	250		248,125
Jo-Ann Stores, Inc.,
7.5%, 3-1-12	500		522,500
United Rentals (North America), Inc.:
6.5%, 2-15-12	500		481,250
7.0%, 2-15-14	250		221,875

			2,907,500

Security and Commodity Brokers - 1.13%
Global Cash Access, L.L.C. and Global Cash Access Finance Corporation,
8.75%, 3-15-12 (A)	650		689,000


Timesharing and Software - 0.22%
NTL Cable PLC,
8.75%, 4-15-14 (A)	125		135,312


Tires and Rubber Products - 0.39%
GEO Sub Corp.,
11.0%, 5-15-12 (A)	250		236,250


Utilities - Gas and Pipeline - 2.50%
ANR Pipeline Company,
8.875%, 3-15-10	100		112,500
AmeriGas Partners, L.P. and AP Eagle Finance Corp.,
8.875%, 5-20-11	100		110,250
Northwest Pipeline Corporation,
8.125%, 3-1-10	450		504,563
Williams Companies, Inc. (The):
8.125%, 3-15-12	250		288,125
7.75%, 6-15-31	500		507,500

			1,522,938

Utilities - Telephone - 8.73%
Alamosa (Delaware), Inc.:
0.0%, 7-31-09 (B)	500		515,000
8.5%, 1-31-12	175		177,187
American Tower Corporation:
9.375%, 2-1-09	578		612,680
7.5%, 5-1-12	250		255,000
American Towers, Inc.,
7.25%, 12-1-11	250		260,000
Centennial Communications Corp., Centennial Cellular Operating Co. LLC and Centennial Puerto Rico Operations Corp.,
8.125%, 2-1-14 (A)	100		95,375
Crown Castle International Corp.:
9.375%, 8-1-11	314		361,100
7.5%, 12-1-13	250		261,875
Nextel Communications, Inc.,
7.375%, 8-1-15	500		537,500
Qwest Services Corporation and Qwest Communications International Inc.,
13.0%, 12-15-07 (A)	500		568,750
SBA Communications Corporation,
10.25%, 2-1-09	500		535,000
US Unwired Inc.,
10.0%, 6-15-12	750		778,125
Ubiquitel Operating Company:
0.0%, 4-15-10 (B)	250		263,125
9.875%, 3-1-11 (A)	100		104,125

			5,324,842


TOTAL CORPORATE DEBT SECURITIES - 93.47%		$	57,044,079
(Cost: $54,196,265)

TOTAL SHORT-TERM SECURITIES - 5.19%		$	3,164,000

(Cost: $3,164,000)

TOTAL INVESTMENT SECURITIES - 99.23%		$	60,556,256

(Cost: $58,099,739)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.77%			470,371


NET ASSETS - 100.00%		$	61,026,627

Notes to Schedule of Investments
	*No dividends were paid during the preceding 12 months.
(A)	Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers At September 30, 2004, the total value of these securities amounted to $13,576,284 or 22.25% of net assets.
(B)	The security does not bear interest for an initial period of time and subsequently becomes interest bearing.
	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 HIGH INCOME FUND
      September 30, 2004
      (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $58,100) (Notes 1 and 3)	$	60,556
Cash	1
Receivables:
Dividends and interest	1,080
Investment securities sold	254
Fund shares sold	136
Prepaid and other assets	29

Total assets	62,056

LIABILITIES
Payable for investment securities purchased	850
Payable to Fund shareholders	109
Dividends payable	33
Accrued shareholder servicing (Note 2)	17
Accrued accounting and administrative services fees (Note 2)	4
Accrued distribution and service fees (Note 2)	1
Accrued management fee (Note 2)	1
Other	14

Total liabilities	1,029

Total net assets	$	61,027

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	69
Additional paid-in capital	62,861
Accumulated undistributed income (loss):
Accumulated undistributed net realized loss on investment transactions	(4,360		)
Net unrealized appreciation in value of investments	2,457

Net assets applicable to outstanding units of capital	$	61,027

Net asset value per share (net assets divided by shares outstanding):
Class A		$8.79
Class B		$8.79
Class C		$8.79
Class Y		$8.79
Capital shares outstanding:
Class A	2,703
Class B	490
Class C	2,552
Class Y	1,197
Capital shares authorized	200,000

See Notes to Financial Statements.

Statement of Operations

      IVY HIGH INCOME FUND
      For the Six Months Ended September 30, 2004
      (In Thousands)

INVESTMENT INCOME
Income (Note 1B):
Interest and amortization	$	2,163
Dividends	8

Total income	2,171

Expenses (Note 2):
Investment management fee	173
Distribution fee:
Class A		5
Class B	14
Class C	84
Shareholder servicing:
Class A	27
Class B	8
Class C	33
Class Y	7
Service fee:
Class A	20
Class B	5
Class C	28
Class Y	12
Accounting and administrative services fees	22
Audit fees	9
Legal fees	7
Custodian fees	6
Other	37

Total expenses	497

Net investment income	1,674

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments	246
Unrealized depreciation in value of investments during the period	(541		)

Net loss on investments	(295		)

Net increase in net assets resulting from operations	$	1,379

See Notes to Financial Statements.

Statement of Changes in Net Assets

IVY HIGH INCOME FUND
(In Thousands)


	For the six months ended 9-30-04				For the fiscal year ended 3-31-04
INCREASE IN NET ASSETS
Operations:	��
Net investment income	$	1,674		$	2,761
Realized net gain on investments	246			1,460
Unrealized appreciation (depreciation)	(541		)	2,221

Net increase in net assets resulting from operations	1,379			6,442

Distributions to shareholders from (Note 1F):^⁽¹⁾
Net investment income:
Class A	(631		)	(719		)
Class B	(107		)	(145		)
Class C	(626		)	(1,244		)
Class Y	(318		)	(645		)
Realized gains on investment transactions:
Class A	- -			- -
Class B	- -			- -
Class C	- -			- -
Class Y	- -			- -

	(1,682		)	(2,753		)

Capital share transactions (Note 5)	7,122			20,419

Total increase	6,819			24,108
NET ASSETS
Beginning of period	54,208			30,100

End of period	$	61,027		$	54,208

Undistributed net investment income	$	- -		$	8

(1)See "Financial Highlights" on pages 62 - 65.

See Notes to Financial Statements.

Financial Highlights

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

	For the six months ended					For the fiscal year ended March 31,								For the period from 7-3-00^⁽¹⁾ to
	For the six months ended													For the period from 7-3-00^⁽¹⁾ to
	9-30-04					2004			2003			2002		3-31-01

Net asset value, beginning of period		$	8.85			$	8.07		$	8.48		$	8.54		$	9.04

Income (loss) from investment operations:
Net investment income		0.28				0.56			0.64			0.74			0.58
Net realized and unrealized gain (loss) on investments		(0.06		)		0.78			(0.41		)	(0.06		)	(0.50		)

Total from investment operations		0.22				1.34			0.23			0.68			0.08

Less distributions from:
Net investment income		(0.28		)		(0.56		)	(0.64		)	(0.74		)	(0.58		)
Capital gains		(0.00		)		(0.00		)	(0.00		)	(0.00		)	(0.00		)

Total distributions		(0.28		)		(0.56		)	(0.64		)	(0.74		)	(0.58		)

Net asset value, end of period		$	8.79			$	8.85		$	8.07		$	8.48		$	8.54

Total return^⁽²⁾		2.56		%		17.24		%	3.02		%	8.46		%	0.90		%
Net assets, end of period (in thousands)	$23,762				$18,036				$6,269			$1,895			$442
Ratio of expenses to average net assets including voluntary expense waiver		1.43		%^⁽³⁾		1.39		%	0.91		%	0.84		%	1.05		%^⁽³⁾
Ratio of net investment income to average net assets including voluntary expense waiver		6.38		%^⁽³⁾		6.62		%	7.83		%	9.00		%	9.01		%^⁽³⁾
Ratio of expenses to average net assets excluding voluntary expense waiver		- -		^⁽⁴⁾		- -		^⁽⁴⁾	1.44		%	1.14		%	1.42		%^⁽³⁾
Ratio of net investment income to average net assets excluding voluntary expense waiver		- -		^⁽⁴⁾		- -		^⁽⁴⁾	7.30		%	8.70		%	8.64		%^⁽³⁾
Portfolio turnover rate			33	%		78		%	52		%	82		%	115		%^⁽⁵⁾

(1)Commencement of operations of the class.

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

(3)Annualized.

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

(5)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements.

Financial Highlights

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

	For the six months ended				For the fiscal year ended March 31,								For the period from 7-18-00^⁽¹⁾ to

	9-30-04				2004			2003			2002		3-31-01

Net asset value, beginning of period		$	8.85		$	8.07		$	8.48		$	8.54		$	9.03

Income (loss) from investment operations:
Net investment income			0.24			0.50			0.56			0.68			0.48
Net realized and unrealized gain (loss) on investments		(0.06		)		0.78		(0.41		)	(0.06		)	(0.49		)

Total from investment operations			0.18			1.28			0.15			0.62		(0.01		)

Less distributions from:
Net investment income		(0.24		)	(0.50		)	(0.56		)	(0.68		)	(0.48		)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)

Total distributions		(0.24		)	(0.50		)	(0.56		)	(0.68		)	(0.48		)

Net asset value, end of period		$	8.79		$	8.85		$	8.07		$	8.48		$	8.54

Total return			2.12	%	16.22		%		2.06	%		7.64	%		0.09	%
Net assets, end of period (in millions)		$4			$4			$2			$1			$1
Ratio of expenses to average net assets including voluntary expense waiver			2.29	%^⁽²⁾		2.28	%		1.84	%		1.74	%		1.85	%^⁽²⁾
Ratio of net investment income to average net assets including voluntary expense waiver			5.52	%^⁽²⁾		5.78	%		6.90	%		8.09	%		8.30	%^⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			- -	^⁽³⁾		- -	^⁽³⁾		2.37	%		2.36	%		2.50	%^⁽²⁾
Ratio of net investment income to average net assets excluding voluntary expense waiver			- -	^⁽³⁾		- -	^⁽³⁾		6.37	%		7.47	%		7.65	%^⁽²⁾
Portfolio turnover rate			33	%		78	%		52	%		82	%		115	%^⁽⁴⁾

(1)Commencement of operations of the class.

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

(4)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements

Financial Highlights

IVY HIGH INCOME FUND
Class C Shares^⁽¹⁾ For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended March 31,
	For the six months ended
	9-30-04				2004			2003			2002			2001			2000

Net asset value, beginning of period		$	8.85		$	8.07		$	8.48		$	8.54		$	9.27		$	9.94

Income (loss) from investment operations:
Net investment income			0.24			0.50			0.57			0.68			0.73			0.69
Net realized and unrealized gain (loss) on investments		(0.06		)		0.78		(0.41		)	(0.06		)	(0.73		)	(0.67		)

Total from investment operations			0.18			1.28			0.16			0.62			0.00			0.02

Less distributions from:
Net investment income		(0.24		)	(0.50		)	(0.57		)	(0.68		)	(0.73		)	(0.69		)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)

Total distributions		(0.24		)	(0.50		)	(0.57		)	(0.68		)	(0.73		)	(0.69		)

Net asset value, end of period		$	8.79		$	8.85		$	8.07		$	8.48		$	8.54		$	9.27

Total return			2.15	%	16.30		%		2.15	%		7.58	%		0.18	%		0.17	%
Net assets, end of period (in millions)		$22			$23			$18			$17			$19			$23
Ratio of expenses to average net assets including voluntary expense waiver			2.23	%^⁽²⁾		2.21	%		1.74	%		1.82	%		1.78	%		2.17	%
Ratio of net investment income to average net assets including voluntary expense waiver			5.59	%^⁽²⁾		5.89	%		7.05	%		8.01	%		8.38	%		7.16	%
Ratio of expenses to average net assets excluding voluntary expense waiver			- -	^⁽³⁾		- -	^⁽³⁾		2.27	%		2.46	%		2.41	%		2.26	%
Ratio of net investment income to average net assets excluding voluntary expense waiver			- -	^⁽³⁾		- -	^⁽³⁾		6.52	%		7.36	%		7.75	%		7.07	%
Portfolio turnover rate			33	%		78	%		52	%		82	%		115	%		71	%

(1)See Note 5.

(2)Annualized.

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

See Notes to Financial Statements.

Financial Highlights

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

	For the six months ended					For the fiscal year ended March 31,
	For the six months ended
	9-30-04					2004			2003			2002			2001			2000

Net asset value, beginning of period		$	8.85			$	8.07		$	8.48		$	8.54		$	9.27		$	9.94

Income (loss) from investment operations:
Net investment income			0.28				0.58			0.64			0.75			0.78			0.77
Net realized and unrealized gain (loss) on investments		(0.06		)			0.78		(0.41		)	(0.06		)	(0.73		)	(0.67		)

Total from investment operations			0.22				1.36			0.23			0.69			0.05			0.10

Less distributions from:
Net investment income		(0.28		)		(0.58		)	(0.64		)	(0.75		)	(0.78		)	(0.77		)
Capital gains		(0.00		)		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)

Total distributions		(0.28		)		(0.58		)	(0.64		)	(0.75		)	(0.78		)	(0.77		)

Net asset value, end of period		$	8.79			$	8.85		$	8.07		$	8.48		$	8.54		$	9.27

Total return			2.61	%		17.36		%		3.03	%		8.50	%		0.79	%		0.94	%
Net assets, end of period (in thousands)	$10,521				$9,698			$3,643				$64			$12			$6
Ratio of expenses to average net assets including voluntary expense waiver			1.32	%^⁽¹⁾			1.30	%		1.08	%		0.79	%		1.20	%		1.40	%
Ratio of net investment income to average net assets including voluntary expense waiver			6.49	%^⁽¹⁾			6.82	%		7.22	%		8.99	%		8.95	%		7.85	%
Ratio of expenses to average net assets excluding voluntary expense waiver			- -	^⁽²⁾			- -	^⁽²⁾		1.61	%		1.08	%		1.62	%		1.46	%
Ratio of net investment income to average net assets excluding voluntary expense waiver			- -	^⁽²⁾			- -	^⁽²⁾		6.69	%		8.71	%		8.52	%		7.79	%
Portfolio turnover rate			33	%			78	%		52	%		82	%		115	%		71	%

(1)Annualized.

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

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY INTERNATIONAL GROWTH FUND

Portfolio Highlights

On September 30, 2004, Ivy International Growth Fund had net assets totaling $67,310,022 invested in a diversified portfolio of:


96.49%		Common Stocks
3.51%		Cash and Cash Equivalents

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


Europe	$	66.18
Pacific Basin	$	23.13
Cash and Cash Equivalents	$	3.51
Canada	$	3.20
Scandinavia	$	2.91
United States	$	0.62
Mexico	$	0.45


Financial Services Stocks	$	21.59
Consumer Nondurables Stocks	$	9.63
Utilities Stocks	$	9.45
Health Care Stocks	$	7.79
Energy Stocks	$	7.59
Business Equipment and Services Stocks	$	7.50
Retail Stocks	$	7.35
Consumer Services Stocks	$	6.60
Capital Goods Stocks	$	6.58
Technology Stocks	$	6.11
Miscellaneous Stocks	$	3.54
Cash and Cash Equivalents	$	3.51
Consumer Durables Stocks	$	2.76


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


Australia - 4.78%
Australia and New Zealand Banking Group Limited (A)	28,800	$	396,809
News Corporation Limited (The) (A)	86,000		710,825
Novogen LTD (A)*	474,580		1,701,739
Westpac Banking Corporation (A)	31,600		405,858

			3,215,231

Austria - 2.13%
Erste Bank der oesterreichischen Sparkassen AG (A)*	34,500		1,435,326


Canada - 3.20%
EnCana Corporation (A)	21,700		1,001,816
Shoppers Drug Mart Corporation (A)(B)*	42,600		1,152,718

			2,154,534

China - 1.02%
Ping An Insurance (Group) Company of China, Ltd. (A)(B)*	466,000		684,231


France - 9.93%
AXA (A)	18,600		376,288
Credit Agricole S.A. (A)	27,900		760,892
JCDecaux S.A. (A)*	30,000		681,803
Lafarge (A)	4,600		402,463
Pernod Ricard (A)	5,400		716,899
Publicis Groupe S.A. (A) (C)	30,000		857,284
Schneider Electric SA (A)	9,500		614,088
Total S.A. (A)	7,720		1,572,345
VINCI (A)	6,100		701,878

			6,683,940

Germany - 12.75%
Allianz Aktiengesellschaft, Registered Shares (A)	11,400		1,145,355
BASF Aktiengesellschaft (A)	18,500		1,086,725
Deutsche Telekom AG, Registered Shares (A)	31,500		582,886
E.ON AG (A)	4,800		353,196
Fresenius AG (A)	2,100		170,328
Munchener Ruckversicherungs - Gesellschaft Aktiengesellschaft (A)	2,800		268,797
ProSieben- Sat.1 Meida Aktiengesellschaft (A)	40,000		730,237
PUMA Aktiengesellschaft Rudolf Dassler Sport (A)	8,000		2,136,068
RWE Aktiengesellschaft (A)	11,100		529,347
SAP Aktiengesellschaft, ADR (A)	4,700		732,535
Siemens AG (A)	11,522		844,241

			8,579,715


Greece - 2.99%
Alpha Bank (A)	5,000		127,419
Alpha Bank (A)(B)	27,000		688,062
National Bank of Greece S.A. (A)	30,000		729,492
Societe Anonyme GERMANOS INDUSTRIAL AND COMMERCIAL COMPANY OF ELECTRONIC AND TELECOMMUNICATIONS MATERIALS AND TELECOMMUNICATIONS SERVICE PROVIDER (A)	20,000		468,941

			2,013,914

Ireland - 2.07%
Anglo Irish Bank Corporation plc (Ireland) (A)	20,000		366,360
CRH public limited company (A)	26,000		616,728
DEPFA BANK plc (A)	30,000		407,964

			1,391,052

Italy - 4.63%
Assicurazioni Generali SpA (A)	14,900		409,500
Banco Popolare di Verona e Novara S.c. a r.l. (A)	25,400		445,405
Eni S.p.A. (A)	51,500		1,153,800
Saipem S.p.A. (A)	35,000		393,372
Snam Rete Gas S.p.A. (A)	148,000		714,987

			3,117,064

Japan - 15.64%
ACOM CO., LTD. (A)	8,100		501,311
Asahi Glass Company, Limited (A)	46,000		418,694
Bank of Yokohama, Ltd. (The) (A)(B)	130,000		698,398
Bellsystem24, Inc. (A)	3,000		757,385
Canon Inc. (A)	20,930		983,869
Hokuto Corporation (A)	20		319
Honda Motor Co., Ltd. (A)	8,800		426,444
Hoya Corporation (A)	8,000		838,514
Kabushiki Kaisha Mitsubishi Tokyo Financial Group (A)	83		692,200
Kao Corporation (A)	45,000		994,374
Nikko Cordial Corporation (A)	146,000		592,241
Nippon Telegraph and Telephone Corporation (A)	100		398,385
Nomura Holdings, Inc. (A)	48,600		624,066
ORIX Corporation (A)	7,000		717,818
Takeda Chemical Industries, Ltd. (A)	13,000		589,863
Tokyo Gas Co., Ltd. (A)	142,000		503,852
Toyota Motor Corporation (A)	20,700		792,722

			10,530,455

Mexico - 0.45%
Grupo Televisa, S.A., GDR	5,700		300,561


Netherlands - 0.95%
Koninklijke Philips Electronics N.V., Ordinary Shares (A)	28,000		641,218


Norway - 0.34%
Opera Software ASA (A) (B)*	175,000		228,989


South Korea - 1.21%
Samsung Electronics Co., Ltd. (A)	2,040		811,394


Spain - 3.79%
Gestevision Telecinco, S.A. (A)(B)*	100,000		1,808,207
Telefonica, S.A. (A)	49,500		740,762

			2,548,969

Sweden - 2.57%
Telefonaktiebolaget LM Ericsson, Class B (A)*	557,275		1,728,625


Switzerland - 9.09%
Credit Suisse Group, Registered Shares (A)*	21,500		687,179
Holcim Ltd, Registered Shares (A)	8,300		438,366
Nestle S.A., Registered Shares (A)	4,400		1,009,304
Novartis AG, Registered Shares (A)	37,100		1,731,810
Roche Holdings AG, Genussschein (A)	10,200		1,055,342
UBS AG (A)	17,000		1,198,508

			6,120,509

Taiwan - 0.48%
AU Optronics Corp., ADR	26,100		326,772


United Kingdom - 17.85%
BAA plc (A)	55,000		550,918
BP p.l.c. (A)	144,400		1,378,467
British Sky Broadcasting Group plc (A)	60,810		527,404
Compass Group PLC (A)	240,500		959,688
Diageo plc (A)	24,300		303,432
ITV plc (A)	186,300		363,276
NEXT plc (A)	38,700		1,143,678
Reckitt Benckiser plc (A)	53,834		1,319,113
Royal Bank of Scotland Group plc (The) (A)	31,000		895,367
Taylor Nelson Sofres plc (A)	221,160		888,518
tesco plc (A)	328,000		1,693,192
Vodafone Group Plc (A)	560,000		1,340,264
WPP Group plc (A)	70,000		651,763

			12,015,080

United States - 0.62%
Research In Motion Limited*	5,500	$	419,842


TOTAL COMMON STOCKS - 96.49%		$	64,947,421

(Cost: $55,515,644)

TOTAL SHORT-TERM SECURITIES - 2.21%		$	1,490,000

(Cost: $ 1,490,000)

TOTAL INVESTMENT SECURITIES - 98.70%		$	66,437,421

(Cost: $57,005,644)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.30%			872,601


NET ASSETS - 100.00%		$	67,310,022

Notes to Schedule of Investments
	*No dividends were paid during the preceding 12 months.
(A)	Listed on an exchange outside the United States.
(B)	Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2004, the total value of these securities amounted to $5,260,605 or 7.82% of net assets.
(C)	Security valued in good faith by the Valuation Committee of the Board of Directors. See Note 1 to financial statements.
	See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
	See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

Statement of Assets and Liabilities

      IVY INTERNATIONAL GROWTH FUND
      September 30, 2004
      (In Thousands, Except for Per Share Amounts)

ASSETS
Investment securities - at value (cost - $57,006) (Notes 1 and 3)	$	66,437
Receivables:
Investment securities sold		1,281
Dividends and interest		217
Fund shares sold		55
Prepaid and other assets		24

Total assets		68,014

LIABILITIES
Payable for investment securities purchased		350
Payable to Fund shareholders		254
Accrued shareholder servicing (Note 2)		50
Due to custodian		9
Accrued accounting and administrative services fees (Note 2)		4
Accrued distribution and service fees (Note 2)		2
Accrued management fee (Note 2)		2
Other		33

Total liabilities		704

Total net assets	$	67,310

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	68
Additional paid-in capital		110,387
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(197	)
Accumulated undistributed net realized loss on investment transactions	(52,395		)
Net unrealized appreciation in value of investments		9,447

Net assets applicable to outstanding units of capital	$	67,310

Net asset value per share (net assets divided by shares outstanding):
Class A	$10.08
Class B	$9.63
Class C	$9.72
Class Y	$10.99
Capital shares outstanding:
Class A		1,136
Class B		447
Class C		4,762
Class Y		480
Capital shares authorized	400,000

See Notes to Financial Statements.

Statement of Operations

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

INVESTMENT LOSS
Income (Note 1B):
Dividends (net of foreign withholding taxes of $68)	$	635
Interest and amortization		17

Total income		652

Expenses (Note 2):
Investment management fee		297
Shareholder servicing:
Class A		31
Class B		18
Class C		160
Class Y		5
Distribution fee:
Class A		4
Class B		17
Class C		184
Service fee:
Class A		11
Class B		6
Class C		61
Class Y		6
Accounting and administrative services fees		23
Custodian fees		22
Legal fees		13
Audit fees		12
Other		34

Total expenses		904

Net investment loss		(252	)

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		520
Realized net loss on foreign currency transactions		(77	)

Realized net gain on investments		443
Unrealized depreciation in value of investments during the period		(4,160	)

Net loss on investments		(3,717	)

Net decrease in net assets resulting from operations	$	(3,969	)

See Notes to Financial Statements.

Statement of Changes in Net Assets

IVY INTERNATIONAL GROWTH FUND
(In Thousands)


	For the six months ended 9-30-04			For the fiscal year ended 3-31-04
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss	$	(252	)	$	(527	)
Realized net gain on investments		443			7,464
Unrealized appreciation (depreciation)		(4,160	)		17,303

Net increase (decrease) in net assets resulting from operations		(3,969	)		24,240

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

Capital share transactions (Note 5)		(4,329	)	(13,138		)

Total increase (decrease)		(8,298	)		11,102
NET ASSETS
Beginning of period		75,608			64,506

End of period	$	67,310		$	75,608

Undistributed net investment income (loss)	$	(197	)	$	132

(1)See "Financial Highlights" on pages 74 - 77.

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 six months ended												For the period from 7-3-00^⁽¹⁾ to
	For the six months ended				For the fiscal year ended March 31,								For the period from 7-3-00^⁽¹⁾ to
	9-30-04				2004			2003			2002		3-31-01

Net asset value, beginning of period		$	10.60		$	7.57		$	9.82		$	12.03		$	24.33

Income (loss) from investment operations:
Net investment loss			(0.00	)		(0.02	)	(0.03		)		(0.17	)		(0.02	)
Net realized and unrealized gain (loss) on investments			(0.52	)		3.05		(2.22		)		(2.01	)		(6.46	)

Total from investment operations			(0.52	)		3.03		(2.25		)		(2.18	)		(6.48	)

Less distributions from:
Net investment income			(0.00	)		(0.00	)	(0.00		)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)	(0.00		)		(0.03	)		(5.82	)

Total distributions			(0.00	)		(0.00	)	(0.00		)		(0.03	)		(5.82	)

Net asset value, end of period		$	10.08		$	10.60		$	7.57		$	9.82		$	12.03

Total return^⁽²⁾			-4.91	%		40.03	%	- -22.91		%	- -18.12		%	- -29.73		%
Net assets, end of period (in millions)		$12			$12			$5			$7			$5
Ratio of expenses to average net assets			1.94	%^⁽³⁾		2.01	%		2.10	%		1.89	%		1.72	%^⁽³⁾
Ratio of net investment loss to average net assets			- -0.09	%^⁽³⁾		- -0.23	%	- -0.10		%		- -0.49	%		- -0.31	%^⁽³⁾
Portfolio turnover rate			36	%		176	%		108	%		134	%		103	%^⁽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 fiscal year ended March 31, 2001.

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 six months ended												For the period from 7-10-00^⁽¹⁾ to
	For the six months ended				For the fiscal year ended March 31,								For the period from 7-10-00^⁽¹⁾ to
	9-30-04				2004			2003			2002		3-31-01

Net asset value, beginning of period		$	10.19		$	7.35		$	9.65		$	11.94		$	24.59

Income (loss) from investment operations:
Net investment loss			(0.06	)		(0.12	)	(0.11		)		(0.19	)		(0.09	)
Net realized and unrealized gain (loss) on investments			(0.50	)		2.96		(2.19		)		(2.07	)		(6.74	)

Total from investment operations			(0.56	)		2.84		(2.30		)		(2.26	)		(6.83	)

Less distributions from:
Net investment income			(0.00	)		(0.00	)	(0.00		)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)	(0.00		)		(0.03	)		(5.82	)

Total distributions			(0.00	)		(0.00	)	(0.00		)		(0.03	)		(5.82	)

Net asset value, end of period		$	9.63		$	10.19		$	7.35		$	9.65		$	11.94

Total return			- -5.50	%		38.64	%	- -23.83		%	- -18.93		%	- -30.89		%
Net assets, end of period (in millions)		$4			$5			$2			$2			$2
Ratio of expenses to average net assets			2.99	%^⁽²⁾		3.02	%		3.24	%		2.89	%		2.61	%^⁽²⁾
Ratio of net investment loss to average net assets			- -1.13	%^⁽²⁾		- -1.46	%	- -1.22		%		- -1.42	%		- -1.30	%^⁽²⁾
Portfolio turnover rate			36	%		176	%		108	%		134	%		103	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements.

Financial Highlights

IVY INTERNATIONAL GROWTH FUND
Class C Shares^⁽¹⁾ For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended March 31,
	For the six months ended
	9-30-04				2004				2003			2002			2001			2000

Net asset value, beginning of period		$	10.27		$	7.40			$	9.69		$	11.96		$	28.58		$	15.58

Income (loss) from investment operations:
Net investment loss			(0.06	)		(0.10	)		(0.08		)		(0.11	)		(0.17	)		(0.34	)
Net realized and unrealized gain (loss) on investments			(0.49	)		2.97			(2.21		)		(2.13	)	(10.63		)		15.14

Total from investment operations			(0.55	)		2.87			(2.29		)		(2.24	)	(10.80		)		14.80

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		)		(0.03	)		(5.82	)		(1.80	)

Total distributions			(0.00	)		(0.00	)		(0.00		)		(0.03	)		(5.82	)		(1.80	)

Net asset value, end of period		$	9.72		$	10.27			$	7.40		$	9.69		$	11.96		$	28.58

Total return		- -5.36		%		38.78	%	- -23.63			%	- -18.73		%	-40.45		%		97.89	%
Net assets, end of period (in millions)		$46			$54				$46			$74			$123			$233
Ratio of expenses to average net assets			2.80	%^⁽²⁾		2.85	%			2.93	%		2.62	%		2.36	%		2.37	%
Ratio of net investment loss to average net assets			- -0.93	%^⁽²⁾		- -0.96	%		- -0.86		%		- -1.03	%		- -1.03	%		- -1.48	%
Portfolio turnover rate			36	%		176	%			108	%		134	%		103	%		126	%

(1)See Note 5.

(2)Annualized.

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 six months ended				For the fiscal year ended March 31,
	For the six months ended
	9-30-04				2004			2003			2002			2001			2000

Net asset value, beginning of period		$	11.53		$	8.17		$	10.55		$	12.87		$	29.86		$	16.08

Income (loss) from investment operations:
Net investment income (loss)			(0.07	)		0.10			(0.16	)		(0.18	)		(0.17	)		(1.41	)
Net realized and unrealized gain (loss) on investments			(0.47	)		3.26			(2.22	)		(2.11	)	(11.00		)		16.99

Total from investment operations			(0.54	)		3.36			(2.38	)		(2.29	)	(11.17		)		15.58

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	)		(0.03	)		(5.82	)		(1.80	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.03	)		(5.82	)		(1.80	)

Net asset value, end of period		$	10.99		$	11.53		$	8.17		$	10.55		$	12.87		$	29.86

Total return			-4.68	%		41.13	%	- -22.56		%	- -17.79		%	- -39.91		%		99.74	%
Net assets, end of period (in thousands)		$5,283			$5,191		$11,205				$8,314			$6,594			$5,296
Ratio of expenses to average net assets			1.62	%^⁽¹⁾		1.62	%		1.63	%		1.52	%		1.44	%		1.48	%
Ratio of net investment income (loss) to average net assets			0.23	%^⁽¹⁾		0.63	%		0.39	%		- -0.11	%		- -0.02	%		- -0.80	%
Portfolio turnover rate			36	%		176	%		108	%		134	%		103	%		126	%

(1)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY LARGE CAP GROWTH FUND

Portfolio Highlights

On September 30, 2004, the Ivy Large Cap Growth Fund had net assets totaling $142,088,754 invested in a diversified portfolio of:


97.74%		Common Stocks
2.26%		Cash and Cash Equivalents

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


Health Care Stocks	$	19.66
Technology Stocks	$	19.41
Financial Services Stocks	$	13.18
Business Equipment and Services Stocks	$	9.53
Multiple Industry Stocks	$	7.53
Consumer Nondurables Stocks	$	6.91
Consumer Durables Stocks	$	6.68
Retail Stocks	$	6.22
Energy Stocks	$	4.52
Miscellaneous Stocks	$	4.10
Cash and Cash Equivalents	$	2.26


The Investments of Ivy Large Cap Growth Fund
*September 30, 2004*
COMMON STOCKS	Shares		Value


Aircraft - 1.98%
Lockheed Martin Corporation	50,500	$	2,816,890


Apparel - 0.00%
Coach, Inc.*	50		2,121


Business Equipment and Services - 5.66%
First Data Corporation	93,600		4,071,600
Robert Half International Inc.	75,110		1,935,585
Staples, Inc.	68,357		2,036,697

			8,043,882

Computers - Micro - 4.54%
Apple Computer, Inc.*	95,400		3,697,704
Dell Inc.*	77,336		2,749,295

			6,446,999

Computers - Peripherals - 10.50%
Electronic Arts Inc.*	93,300		4,291,333
Microsoft Corporation	207,373		5,732,827
SAP Aktiengesellschaft, ADR	125,650		4,894,067

			14,918,227

Consumer Electronics - 3.61%
Harman International Industries, Incorporated*	47,667		5,136,119


Cosmetics & Toiletries - 4.05%
Avon Products, Inc.	131,700		5,752,656


Electronic Components - 2.39%
Intel Corporation	50		1,002
Linear Technology Corporation	37		1,341
Microchip Technology Incorporated	126,400		3,386,888
Xilinx, Inc.	50		1,350

			3,390,581

Finance Companies - 4.08%
SLM Corporation	129,850		5,791,310


Health Care - Drugs - 10.42%
Alcon, Inc.	60,800		4,876,160
Genentech, Inc.*	34,500		1,808,490
Gilead Sciences, Inc.*	103,200		3,857,100
Pfizer Inc.	139,200		4,259,520

			14,801,270

Health Care - General - 4.34%
Boston Scientific Corporation*	39,200		1,557,416
Zimmer Holdings, Inc.*	58,250		4,604,080

			6,161,496

Hospital Supply and Management - 4.90%
Medtronic, Inc.	94,850		4,922,715
UnitedHealth Group Incorporated	27,700		2,042,598

			6,965,313

Household - General Products - 2.86%
Procter & Gamble Company (The)	75,000		4,059,000


Leisure Time Industry - 2.45%
Carnival Corporation	73,644		3,482,625


Motor Vehicles - 3.07%
Harley-Davidson, Inc.	73,347		4,359,746


Multiple Industry - 7.53%
3M Company	33,600		2,686,992
General Electric Company	135,389		4,546,363
Research In Motion Limited*	45,360		3,462,556

			10,695,911

Petroleum - Services - 4.52%
Smith International, Inc.*	105,712		6,419,890


Retail - Food Stores - 2.74%
Walgreen Co.	108,714		3,895,223


Retail - General Merchandise - 2.00%
Costco Wholesale Corporation	68,336		2,837,652
Dollar General Corporation	50		1,007

			2,838,659

Retail - Specialty Stores - 1.48%
Home Depot Inc. (The)	53,500		2,097,200


Security and Commodity Brokers - 9.10%
Chicago Mercantile Exchange Holdings Inc.	48,343		7,797,726
Goldman Sachs Group, Inc. (The)	22,800		2,125,872
Legg Mason, Inc.	56,475		3,008,423

			12,932,021

Timesharing and Software - 3.87%
Automatic Data Processing, Inc.	51,000		2,107,320
eBay Inc.*	36,900		3,393,508

			5,500,828

Trucking & Shipping - 1.65%
Expeditors International of Washington, Inc.	45,500		2,351,667


TOTAL COMMON STOCKS - 97.74%		$	138,859,634

(Cost: $122,909,067)

TOTAL SHORT-TERM SECURITIES - 3.42%		$	4,857,787

(Cost: $4,857,787)

TOTAL INVESTMENT SECURITIES - 101.16%		$	143,717,421

(Cost: $127,766,854)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (1.16%)			(1,628,667	)


NET ASSETS - 100.00%		$	142,088,754

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 LARGE CAP GROWTH FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (cost - $127,767) (Notes 1 and 3)	$	143,717
Receivables:
Investment securities sold		2,624
Fund shares sold		369
Dividends and interest		47
Prepaid and other assets		51

Total assets		146,808

LIABILITIES
Payable for investment securities purchased		4,114
Payable to Fund shareholders		525
Accrued shareholder servicing (Note 2)		49
Accrued accounting and administrative services fees (Note 2)		5
Accrued management fee (Note 2)		3
Due to custodian		2
Accrued distribution and service fees (Note 2)		1
Other		20

Total liabilities		4,719

Total net assets	$	142,089

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	160
Additional paid-in capital		157,941
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(526	)
Accumulated undistributed net realized loss on investment transactions		(31,437	)
Net unrealized appreciation in value of investments		15,951

Net assets applicable to outstanding units of capital	$	142,089

Net asset value per share (net assets divided by shares outstanding):
Class A	$8.92
Class B	$8.45
Class C	$8.61
Class Y	$8.98
Capital shares outstanding:
Class A		8,126
Class B		799
Class C		1,313
Class Y		5,740
Capital shares authorized		400,000

See Notes to Financial Statements

Statement of Operations
      IVY LARGE CAP GROWTH FUND
      For the Fiscal Year Ended September 30, 2004
      (In Thousands)

INVESTMENT LOSS
Income (Note 1B):
Dividends (net of foreign withholding taxes of $9)	$	546
Interest and amortization		19

Total income		565

Expenses (Note 2):
Investment management fee		509
Shareholder servicing:
Class A		157
Class B		21
Class C		24
Class Y		41
Service fee:
Class A		81
Class B		8
Class C		14
Class Y		67
Distribution fee:
Class A		12
Class B		23
Class C		42
Accounting and administrative services fees		33
Legal fees		18
Audit fees		14
Custodian fees		6
Other		72

Total		1,142
Less expenses in excess of voluntary limit (Note 2)		(56	)

Total expense		1,086

Net investment loss		(521	)

REALIZED AND UNREALIZED LOSS
ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on investments		(3,624	)
Unrealized depreciation in value of investments during the period		(1,895	)

Net loss on investments		(5,519	)

Net decrease in net assets resulting from operations	$	(6,040	)

See Notes to Financial Statements

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

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

INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss	$	(521	)	$	(757	)
Realized net loss on investments		(3,624	)		(238	)
Unrealized appreciation (depreciation)		(1,895	)		12,605

Net increase (decrease) in net assets resulting from operations		(6,040	)		11,610

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

		- -			- -

Capital share transactions (Note 5)		(3,628	)		112,338

Total increase (decrease)		(9,668	)		123,948
NET ASSETS
Beginning of period		151,757			27,809

End of period	$	142,089		$	151,757

Undistributed net investment loss	$	(526	)	$	(5	)

(1)See "Financial Highlights" on pages 85 - 88.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal year ended March 31,										For the period from 6-30-00^⁽¹⁾ to
	9-30-04				2004				2003			2002			3-31-01

Net asset value, beginning of period		$	9.27		$	7.24			$	9.21		$	9.48		$	10.00

Income (loss) from investment operations:
Net investment income (loss)		(0.03		)	(0.04		)		(0.03		)	(0.04		)		0.05
Net realized and unrealized gain (loss) on investments		(0.32		)		2.07			(1.94		)	(0.23		)		(0.45	)

Total from investment operations		(0.35		)		2.03			(1.97		)	(0.27		)		(0.40	)

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

Total distributions		(0.00		)	(0.00		)		(0.00		)	(0.00		)		(0.12	)

Net asset value, end of period		$	8.92		$	9.27			$	7.24		$	9.21		$	9.48

Total return^⁽²⁾		- -3.78		%	28.04		%	- -21.39			%	- -2.85		%	-4.27		%
Net assets, end of period (in millions)		$72			$76				$21			$20			$19
Ratio of expenses to average net assets including voluntary expense waiver			1.50	%^⁽³⁾		1.55	%			1.28	%		1.58	%		1.13	%^⁽³⁾
Ratio of net investment income (loss) to average net assets including voluntary expense waiver		- -0.76		%^⁽³⁾	- -0.89		%		- -0.23		%	- -0.38		%		0.89	%^⁽³⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			1.58	%^⁽³⁾		- -	^⁽⁴⁾			1.66	%		1.69	%		1.34	%^⁽³⁾
Ratio of net investment income (loss) to average net assets excluding voluntary expense waiver		- -0.84		%^⁽³⁾		- -	^⁽⁴⁾		- -0.61		%	- -0.49		%		0.68	%^⁽³⁾
Portfolio turnover rate			80	%		162	%			72	%		99	%		75	%

(1)Commencement of operations of the class.

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

(3)Annualized.

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

See Notes to Financial Statements

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

	For the six months ended				For the fiscal year ended March 31,										For the period from 7-6-00^⁽¹⁾ to
	9-30-04				2004				2003			2002			3-31-01

Net asset value, beginning of period		$	8.83		$	6.99			$	9.05		$	9.44		$	10.02

Income (loss) from investment operations:
Net investment loss		(0.03		)	(0.13		)		(0.14		)	(0.16		)		(0.03	)
Net realized and unrealized gain (loss) on investments		(0.35		)		1.97			(1.92		)	(0.23		)		(0.49	)

Total from investment operations		(0.38		)		1.84			(2.06		)	(0.39		)		(0.52	)

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

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

Net asset value, end of period		$	8.45		$	8.83			$	6.99		$	9.05		$	9.44

Total return		-4.30		%	26.32		%	- -22.76			%	-4.13		%	- -5.32		%
Net assets, end of period (in millions)		$7			$5				$2			$2			$2
Ratio of expenses to average net assets including voluntary expense waiver			2.55	%^⁽²⁾		2.85	%			2.93	%		2.98	%		2.53	%^⁽²⁾
Ratio of net investment loss to average net assets including voluntary expense waiver		- -1.77		%^⁽²⁾	- -2.16		%		- -1.87		%	- -1.79		%		- -0.60	%^⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			- -	^⁽³⁾		- -	^⁽³⁾			3.31	%		3.19	%		3.00	%^⁽²⁾
Ratio of net investment loss to average net assets excluding voluntary expense waiver			- -	^⁽³⁾		- -	^⁽³⁾		- -2.25		%	- -2.00		%		- -1.07	%^⁽²⁾
Portfolio turnover rate			80	%		162	%			72	%		99	%		75	%

(1)Commencement of operations of the class.

(2)Annualized.

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

See Notes to Financial Statements

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

	For the six months ended				For the fiscal year ended March 31,										For the period from 7-3-00^⁽¹⁾ to
	9-30-04				2004				2003			2002			3-31-01

Net asset value, beginning of period		$	8.99		$	7.08			$	9.10		$	9.45		$	10.00

Income (loss) from investment operations:
Net investment income loss		(0.06		)	(0.11		)		(0.10		)	(0.12		)		(0.00	)
Net realized and unrealized gain (loss) on investments		(0.32		)		2.02			(1.92		)	(0.23		)		(0.48	)

Total from investment operations		(0.38		)		1.91			(2.02		)	(0.35		)		(0.48	)

Less distributions from:
Net investment income		(0.00		)	(0.00		)		(0.00		)	(0.00		)		(0.01	)
Capital gains		(0.00		)	(0.00		)		(0.00		)	(0.00		)		(0.06	)

Total distributions		(0.00		)	(0.00		)		(0.00		)	(0.00		)		(0.07	)

Net asset value, end of period		$	8.61		$	8.99			$	7.08		$	9.10		$	9.45

Total return		-4.23		%	26.98		%	- -22.28			%	- -3.60		%		-4.93	%
Net assets, end of period (in millions)		$11			$11				$4			$7			$7
Ratio of expenses to average net assets including voluntary expense waiver			2.25	%^⁽²⁾		2.44	%			2.26	%		2.51	%		2.06	%^⁽²⁾
Ratio of net investment loss to average net assets including voluntary expense waiver		- -1.51		%^⁽²⁾	- -1.75		%		- -1.20		%	- -1.31		%		- -0.08	%^⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			2.33	%^⁽²⁾		- -	^⁽³⁾			2.64	%		2.68	%		2.44	%^⁽²⁾
Ratio of net investment loss to average net assets excluding voluntary expense waiver		- -1.59		%^⁽²⁾		- -	^⁽³⁾		- -1.58		%	- -1.48		%		- -0.46	%^⁽²⁾
Portfolio turnover rate			80	%		162	%			72	%		99	%		75	%

(1)Commencement of operations of the class.

(2)Annualized.

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

See Notes to Financial Statements

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

	For the six months ended					For the fiscal year ended March 31,										For the period from 7-6-00^⁽¹⁾ to
	9-30-04					2004				2003			2002			3-31-01

Net asset value, beginning of period		$	9.32			$	7.26			$	9.22		$	9.48		$	10.02

Income (loss) from investment operations:
Net investment income (loss)		(0.02		)		(0.03		)		(0.30		)	(0.01		)		0.09
Net realized and unrealized gain (loss) on investments		(0.32		)			2.09			(1.66		)	(0.25		)		(0.50	)

Total from investment operations		(0.34		)			2.06			(1.96		)	(0.26		)		(0.41	)

Less distributions from:
Net investment income		(0.00		)		(0.00		)		(0.00		)	(0.00		)		(0.07	)
Capital gains		(0.00		)		(0.00		)		(0.00		)	(0.00		)		(0.06	)

Total distributions		(0.00		)		(0.00		)		(0.00		)	(0.00		)		(0.13	)

Net asset value, end of period		$	8.98			$	9.32			$	7.26		$	9.22		$	9.48

Total return		- -3.65		%		28.38		%	- -21.26			%	- -2.74		%	-4.38		%
Net assets, end of period (in thousands)	$51,550				$59,483					$892			$768			$279
Ratio of expenses to average net assets including voluntary expense waiver			1.20	%^⁽²⁾			1.26	%			1.05	%		1.36	%		1.13	%^⁽²⁾
Ratio of net investment income (loss) to average net assets including voluntary expense waiver		- -0.46		%^⁽²⁾		- -0.64		%			0.00	%	- -0.20		%		1.11	%^⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			1.28	%^⁽²⁾			- -	^⁽³⁾			1.43	%		1.45	%		1.34	%^⁽²⁾
Ratio of net investment income (loss) to average net assets excluding voluntary expense waiver		- -0.54		%^⁽²⁾			- -	^⁽³⁾		- -0.38		%	- -0.29		%		0.90	%^⁽²⁾
Portfolio turnover rate			80	%			162	%			72	%		99	%		75	%

(1)Commencement of operations of the class.

(2)Annualized.

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

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY LIMITED-TERM BOND FUND

Portfolio Highlights

On September 30, 2004, Ivy Limited-Term Bond Fund had net assets totaling $70,677,507 invested in a diversified portfolio of:


47.72%		Corporate Debt Securities
46.42%		United States Government Securities
5.86%		Cash and Cash Equivalents

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


Corporate Debt Securities	$	47.72
United States Government Mortgage-Backed Securities	$	23.44
United States Government Treasury Securities	$	17.50
Cash and Cash Equivalents	$	5.86
United States Government Agency Securities	$	5.48

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



AAA	49.26	%
AA	1.50	%
A	15.94	%
BBB	27.44	%
Cash and Cash Equivalents	5.86	%


The Investments of Ivy Limited-Term Bond Fund
*September 30, 2004*
CORPORATE DEBT SECURITIES	Principal Amount in Thousands			Value


Aircraft - 2.79%
Raytheon Company,
6.75%, 8-15-07	$	1,800	$	1,968,698


Banks - 2.06%
First Union Corporation,
6.875%, 9-15-05		1,397		1,451,732


Broadcasting - 1.19%
Clear Channel Communications, Inc.,
4.625%, 1-15-08		829		844,212


Business Equipment and Services - 3.12%
USA Waste Services, Inc.,
7.125%, 10-1-07		2,000		2,206,418


Capital Equipment - 1.18%
John Deere Capital Corporation,
5.125%, 10-19-06		800		832,302


Finance Companies - 5.16%
Ford Motor Credit Company,
6.875%, 2-1-06		2,000		2,092,844
General Motors Acceptance Corporation,
6.625%, 10-15-05		1,500		1,552,095

				3,644,939

Food and Related - 1.01%
Kellogg Company,
4.875%, 10-15-05		700		714,589


Insurance - Property and Casual - 1.28%
American General Finance Corporation,
6.75%, 11-15-04		900		904,712


Multiple Industry - 5.86%
General Electric Capital Corporation,
2.85%, 1-30-06		2,000		2,005,110
Honeywell International Inc.,
6.875%, 10-3-05		1,100		1,144,336
Household Finance Corporation,
6.5%, 1-24-06		950		995,921

				4,145,367

Petroleum - International - 3.14%
Anadarko Petroleum Corporation,
5.375%, 3-1-07		2,025		2,137,473
Chevron Corporation Profit Sharing/Savings Plan Trust Fund,
8.11%, 12-1-04		83		83,954

				2,221,427

Railroad - 5.98%
Norfolk Southern Corporation,
7.35%, 5-15-07		1,850		2,023,682
Union Pacific Corporation:
7.6%, 5-1-05		1,595		1,640,330
6.7%, 12-1-06		525		562,264

				4,226,276

Security and Commodity Brokers - 2.25%
CIT Group Holdings, Inc. (The),
6.625%, 6-15-05		600		617,228
Salomon Smith Barney Holdings Inc.,
6.25%, 6-15-05		950		976,142

				1,593,370

Utilities - Electric - 9.58%
Dominion Resources, Inc.,
7.625%, 7-15-05		2,200		2,284,304
Kansas City Power & Light Company,
7.125%, 12-15-05		950		1,001,135
National Rural Utilities Cooperative Finance Corporation,
6.0%, 5-15-06		2,000		2,097,348
PacifiCorp,
6.75%, 4-1-05		1,000		1,019,793
Wisconsin Energy Corporation,
5.875%, 4-1-06		350		366,413

				6,768,993

Utilities - Telephone - 3.12%
GTE Corporation,
6.36%, 4-15-06		2,100		2,204,769


TOTAL CORPORATE DEBT SECURITIES - 47.72%			$	33,727,804

(Cost: $33,225,780)


UNITED STATES GOVERNMENT SECURITIES


Agency Obligations - 5.48%
Federal Home Loan Bank,
7.125%, 2-15-05	1,780		1,814,261
Federal National Mortgage Association,
4.25%, 7-15-07	2,000		2,058,726

			3,872,987

Mortgage-Backed Obligations - 23.44%
Federal Home Loan Mortgage Corporation Agency REMIC/CMO:
4.0%,12-15-12	1,208		1,206,670
3.5%, 12-15-16	1,368		1,345,115
5.5%, 7-15-17 (Interest Only)	1,000		104,273
5.5%, 10-15-23 (Interest Only)	5,000		510,471
Federal Home Loan Mortgage Corporation Fixed Rate Participation Certificates:
4.5%, 5-1-10	1,071		1,085,769
5.5%, 2-1-16	102		105,804
5.5%, 1-1-17	314		325,587
5.5%, 5-1-17	298		308,665
4.5%, 4-1-18	1,584		1,582,889
Federal Home Loan Mortgage Corporation Non-Agency REMIC/CMO,
5.5%, 10-1-34 (Interest Only)	1,564		187,230
Federal National Mortgage Association Agency REMIC/CMO,
5.0%, 3-25-16 (Interest Only)	1,800		155,038
Federal National Mortgage Association Fixed Rate Pass-Through Certificates:
8.0%, 2-1-08	4		4,437
6.5%, 12-1-10	45		47,455
6.0%, 1-1-11	46		48,831
6.5%, 2-1-11	81		85,884
7.0%, 5-1-11	36		37,866
7.0%, 7-1-11	35		36,907
7.0%, 9-1-12	28		30,021
6.0%, 11-1-13	83		86,940
7.0%, 9-1-14	63		67,047
7.0%, 10-1-14	66		69,830
6.0%, 6-1-16	56		58,548
6.5%, 6-1-16	127		134,860
5.5%, 2-1-17	929		962,142
5.0%, 11-1-17	1,031		1,050,559
5.5%, 1-1-18	1,081		1,119,886
7.0%, 4-1-26	34		35,767
Government National Mortgage Association Fixed Rate Pass-Through Certificates:
6.5%, 1-15-14	105		111,602
6.0%, 5-15-14	325		343,590
5.5%, 1-15-17	476		496,389
6.0%, 1-15-17	327		345,077
5.5%, 7-15-17	944		985,257
5.0%, 12-15-17	1,475		1,515,930
4.0%, 9-15-18	1,775		1,735,526
7.0%, 10-15-28	86		91,893
7.0%, 4-15-29	48		50,984
7.0%, 7-15-29	94		100,591

			16,571,330

Treasury Obligations - 17.50%
United States Treasury Notes:
2.0%, 8-31-05	2,000		1,996,954
2.75%, 6-30-06	1,500		1,506,212
4.75%, 11-15-08	2,000		2,120,000
3.125%, 4-15-09	500		496,621
5.0%, 8-15-11	2,000		2,149,454
4.375%, 8-15-12	2,000		2,061,876
3.5%, 11-15-16	2,000		2,035,078

			12,366,195


TOTAL UNITED STATES GOVERNMENT SECURITIES - 46.42%		$	32,810,512

(Cost: $32,621,102)

TOTAL SHORT-TERM SECURITIES - 3.27%		$	2,309,513

(Cost: $2,309,513)

TOTAL INVESTMENT SECURITIES - 97.41%		$	68,847,829

(Cost: $68,156,395)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 2.59%			1,829,678


NET ASSETS - 100.00%		$	70,677,507

Notes to Schedule of Investments
	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 LIMITED-TERM BOND FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (cost - $68,156) (Notes 1 and 3)	$	68,848
Cash		1
Receivables:
Fund shares sold		1,166
Interest		889
Prepaid and other assets		31

Total assets		70,935

LIABILITIES
Payable to Fund shareholders		195
Accrued shareholder servicing (Note 2)		20
Dividends payable		15
Accrued accounting and administrative services fees (Note 2)		4
Accrued distribution and service fees (Note 2)		1
Accrued management fee (Note 2)		1
Other		21

Total liabilities		257

Total net assets	$	70,678

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	69
Additional paid-in capital		70,407
Accumulated undistributed income (loss):
Accumulated undistributed net realized loss on investment transactions		(489	)
Net unrealized appreciation in value of investments		691

Net assets applicable to outstanding units of capital	$	70,678

Net asset value per share (net assets divided by shares outstanding):
Class A	$10.31
Class B	$10.31
Class C	$10.31
Class Y	$10.31
Capital shares outstanding:
Class A		4,070
Class B		643
Class C		1,915
Class Y		226
Capital shares authorized	200,000

See Notes to Financial Statements

Statement of Operations
      IVY LIMITED-TERM BOND FUND
      For the Fiscal Year Ended September 30, 2004
      (In Thousands)

INVESTMENT INCOME
Interest and amortization (Note 1B)	$	1,302

Expenses (Note 2):
Investment management fee		161
Distribution fee:
Class A		9
Class B		23
Class C		77
Shareholder servicing:
Class A		40
Class B		12
Class C		35
Class Y		2
Service fee:
Class A		36
Class B		8
Class C		26
Class Y		3
Accounting and administrative services fees		22
Audit fees		10
Legal fees		10
Custodian fees		4
Other		54

Total expenses		532

Net investment income		770

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		16
Unrealized depreciation in value of investments during the period	(1,035		)

Net loss on investments	(1,019		)

Net decrease in net assets resulting from operations	$	(249	)

See Notes to Financial Statements

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

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

INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	770		$	1,765
Realized net gain on investments		16			249
Unrealized depreciation		(1,035	)		(87	)

Net increase (decrease) in net assets resulting from operations		(249	)		1,927

Distributions to shareholders from
net investment income (Note 1F):^⁽¹⁾
Class A		(492	)		(1,111	)
Class B		(55	)		(110	)
Class C		(194	)		(493	)
Class Y		(29	)		(51	)

		(770	)		(1,765	)

Capital share transactions (Note 5)		7,507		(13,816		)

Total increase (decrease)		6,488		(13,654		)
NET ASSETS
Beginning of period		64,190			77,844

End of period	$	70,678		$	64,190

Undistributed net investment income	$	- -		$	- -

(1)See "Financial Highlights" on pages 97 - 100.

See Notes to Financial Statements

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

	For the six months ended					For the fiscal year ended March 31,										For the period from 8-17-00^⁽¹⁾ to
	9-30-04					2004				2003			2002			3-31-01

Net asset value, beginning of period		$	10.48			$	10.45			$	10.20		$	10.17		$	9.84

Income (loss) from investment operations:
Net investment income			0.14				0.29				0.36			0.51			0.36
Net realized and unrealized gain (loss) on investments			(0.17	)			0.03				0.25			0.03			0.33

Total from investment operations			(0.03	)			0.32				0.61			0.54			0.69

Less distributions from:
Net investment income			(0.14	)			(0.29	)			(0.36	)		(0.51	)		(0.36	)
Capital gains			(0.00	)			(0.00	)			(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.14	)			(0.29	)			(0.36	)		(0.51	)		(0.36	)

Net asset value, end of period		$	10.31			$	10.48			$	10.45		$	10.20		$	10.17

Total return^⁽²⁾			- -0.26	%			3.13	%			6.15	%		5.42	%		7.01	%
Net assets, end of period (in thousands)	$41,970				$34,970				$39,765				$	6,124			$494
Ratio of expenses to average net assets including voluntary expense waiver			1.30	%^⁽³⁾			1.18	%			1.09	%		1.04	%		0.85	%^⁽³⁾
Ratio of net investment income to average net assets including voluntary expense waiver			2.74	%^⁽³⁾			2.79	%			3.32	%		4.76	%		5.83	%^⁽³⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			- -	^⁽⁴⁾			- -	^⁽⁴⁾			- -	^⁽⁴⁾		1.19	%		1.09	%^⁽³⁾
Ratio of net investment income to average net assets excluding voluntary expense waiver			- -	^⁽⁴⁾			- -	^⁽⁴⁾			- -	^⁽⁴⁾		4.61	%		5.59	%^⁽³⁾
Portfolio turnover rate			15	%			30	%			49	%		33	%		16	%^⁽⁵⁾

(1)Commencement of operations of the class.

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

(3)Annualized.

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

(5)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal year ended March 31,									For the period from 7-3-00^⁽¹⁾ to
	9-30-04					2004		2003			2002			3-31-01

Net asset value, beginning of period		$	10.48		$	10.45		$	10.20		$	10.17		$	9.80

Income (loss) from investment operations:
Net investment income			0.09			0.19			0.27			0.42			0.36
Net realized and unrealized gain (loss) on investments			(0.17	)		0.03			0.25			0.03			0.37

Total from investment operations			(0.08	)		0.22			0.52			0.45			0.73

Less distributions from:
Net investment income			(0.09	)		(0.19	)		(0.27	)		(0.42	)		(0.36	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.09	)		(0.19	)		(0.27	)		(0.42	)		(0.36	)

Net asset value, end of period		$	10.31		$	10.48		$	10.45		$	10.20		$	10.17

Total return			- -0.72	%		2.18	%		5.18	%		4.52	%		7.54	%
Net assets, end of period (in thousands)		$6,633			$5,812			$5,471			$1,419			$425
Ratio of expenses to average net assets including voluntary expense waiver			2.21	%^⁽²⁾		2.11	%		2.01	%		1.88	%		1.81	%^⁽²⁾
Ratio of net investment income to average net assets including voluntary expense waiver			1.82	%^⁽²⁾		1.86	%		2.47	%		4.02	%		4.91	%^⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			- -	^⁽³⁾		- -	^⁽³⁾		- -	^⁽³⁾		2.15	%		2.33	%^⁽²⁾
Ratio of net investment income to average net assets excluding voluntary expense waiver			- -	^⁽³⁾		- -	^⁽³⁾		- -	^⁽³⁾		3.76	%		4.39	%^⁽²⁾
Portfolio turnover rate			15	%		30	%		49	%		33	%		16	%^⁽⁴⁾

(1)Commencement of operations of the class.

(2)Annualized.

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

(4)For the fiscal year ended March 31, 2001

See Notes to Financial Statements

Financial Highlights
     IVY LIMITED-TERM BOND FUND
      Class C Shares^⁽¹⁾
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended March 31,
	9-30-04				2004			2003			2002			2001			2000

Net asset value, beginning of period		$	10.48		$	10.45		$	10.20		$	10.17		$	9.76		$	10.16

Income (loss) from investment operations:
Net investment income			0.10			0.20			0.27			0.42			0.48			0.47
Net realized and unrealized gain (loss) on investments			(0.17	)		0.03			0.25			0.03			0.41			(0.40	)

Total from investment operations			(0.07	)		0.23			0.52			0.45			0.89			0.07

Less distributions from:
Net investment income			(0.10	)		(0.20	)		(0.27	)		(0.42	)		(0.48	)		(0.47	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.10	)		(0.20	)		(0.27	)		(0.42	)		(0.48	)		(0.47	)

Net asset value, end of period		$	10.31		$	10.48		$	10.45		$	10.20		$	10.17		$	9.76

Total return			- -0.68	%		2.23	%		5.22	%		4.46	%		9.48	%		0.73	%
Net assets, end of period (in millions)		$20			$22			$30			$20			$18			$19
Ratio of expenses to average net assets including voluntary expense waiver			2.14	%^⁽²⁾		2.05	%		1.98	%		1.94	%		1.82	%		1.81	%
Ratio of net investment income to average net assets including voluntary expense waiver			1.89	%^⁽²⁾		1.92	%		2.59	%		4.04	%		4.97	%		4.75	%
Ratio of expenses to average net assets excluding voluntary expense waiver			- -	^⁽³⁾		- -	^⁽³⁾		- -	^⁽³⁾		2.21	%		2.34	%		2.19	%
Ratio of net investment income to average net assets excluding voluntary expense waiver			- -	^⁽³⁾		- -	^⁽³⁾		- -	^⁽³⁾		3.77	%		4.44	%		4.37	%
Portfolio turnover rate			15	%		30	%		49	%		33	%		16	%		37	%

(1)See Note 5.

(2)Annualized.

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

See Notes to Financial Statements

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-04				2004			2003			2002			2001			2000

Net asset value, beginning of period		$	10.48		$	10.45		$	10.20		$	10.17		$	9.76		$	10.16

Income (loss) from investment operations:
Net investment income			0.30			0.29			0.36			0.51			0.59			0.57
Net realized and unrealized gain (loss) on investments			(0.17	)		0.03			0.25			0.03			0.41			(0.40	)

Total from investment operations			0.13			0.32			0.61			0.54			1.00			0.17

Less distributions from:
Net investment income			(0.30	)		(0.29	)		(0.36	)		(0.51	)		(0.59	)		(0.57	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.30	)		(0.29	)		(0.36	)		(0.51	)		(0.59	)		(0.57	)

Net asset value, end of period		$	10.31		$	10.48		$	10.45		$	10.20		$	10.17		$	9.76

Total return			- -0.20	%		3.18	%		6.14	%		5.41	%		10.56	%		1.69	%
Net assets, end of period (in thousands)		$2,331			$1,820			$2,149			$906			$1,836			$1,229
Ratio of expenses to average net assets including voluntary expense waiver			1.18	%^⁽¹⁾		1.13	%		1.09	%		1.04	%		0.83	%		0.69	%
Ratio of net investment income to average net assets including voluntary expense waiver			2.86	%^⁽¹⁾		2.83	%		3.42	%		4.97	%		5.95	%		6.03	%
Ratio of expenses to average net assets excluding voluntary expense waiver			- -	^⁽²⁾		- -	^⁽²⁾		- -	^⁽²⁾		1.18	%		1.07	%		0.84	%
Ratio of net investment income to average net assets excluding voluntary expense waiver			- -	^⁽²⁾		- -	^⁽²⁾		- -	^⁽²⁾		4.83	%		5.71	%		5.88	%
Portfolio turnover rate			15	%		30	%		49	%		33	%		16	%		37	%

(1)Annualized.

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

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY MID CAP GROWTH FUND

Portfolio Highlights

On September 30, 2004, the Ivy Mid Cap Growth Fund had net assets totaling $81,305,143 invested in a diversified portfolio of:


95.22%		Common Stocks
3.86%		Cash and Cash Equivalents
0.92%		Preferred Stock

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


Health Care Stocks	$	20.69
Technology Stocks	$	19.48
Business Equipment and Services Stocks	$	18.30
Financial Services Stocks	$	7.70
Capital Goods Stocks	$	6.88
Consumer Nondurables Stocks	$	6.40
Miscellaneous Stocks	$	6.02
Consumer Services Stocks	$	4.88
Energy Stocks	$	4.87
Cash and Cash Equivalents	$	3.86
Preferred Stock	$	0.92


The Investments of Ivy Mid Cap Growth Fund
*September 30, 2004*
COMMON STOCKS	Shares		Value


Aircraft - 2.34%
Goodrich Corporation	19,150	$	600,544
L-3 Communications Holdings, Inc.	19,400		1,299,800

			1,900,344

Banks - 4.30%
Northern Trust Corporation	33,750		1,376,831
Synovus Financial Corp.	81,050		2,119,458

			3,496,289

Beverages - 2.36%
Brown-Forman Corporation, Class B	17,450		799,210
Coca-Cola Enterprises Inc.	59,050		1,116,045

			1,915,255

Broadcasting - 0.94%
Cox Radio, Inc., Class A*	51,100		762,412


Business Equipment and Services - 6.33%
Cintas Corporation	29,650		1,245,745
Lamar Advertising Company*	54,700		2,271,418
Stericycle, Inc.*	35,550		1,631,212

			5,148,375

Capital Equipment - 2.14%
IDEX Corporation	51,325		1,742,997


Communications Equipment - 1.48%
Juniper Networks, Inc.*	35,700		842,699
McData Corporation, Class A*	72,900		363,406

			1,206,105

Computers - Micro - 3.67%
Apple Computer, Inc.(A)*	66,450		2,575,602
Sun Microsystems, Inc.*	102,150		411,154

			2,986,756

Computers - Peripherals - 4.35%
EMC Corporation*	94,800		1,093,992
Electronic Arts Inc.*	21,250		977,394
Mercury Interactive Corporation*	24,800		864,032
Siebel Systems, Inc.*	79,200		598,356

			3,533,774

Cosmetics and Toiletries - 2.52%
Estee Lauder Companies Inc. (The), Class A	49,000		2,048,200


Electrical Equipment - 1.92%
Molex Incorporated	8,750		260,881
Molex Incorporated, Class A	49,450		1,300,288

			1,561,169

Electronic Components - 6.34%
Altera Corporation*	30,500		595,665
Analog Devices, Inc.	16,800		651,504
Microchip Technology Incorporated	50,450		1,351,808
Network Appliance, Inc.*	88,400		2,034,084
Semtech Corporation*	27,200		521,560

			5,154,621

Electronic Instruments - 1.30%
Lam Research Corporation*	48,200		1,054,375


Food and Related - 1.52%
Hershey Foods Corporation	26,400		1,233,144


Health Care - Drugs - 9.00%
Advancis Pharmaceutical Corporation*	30,689		249,962
Allergan, Inc.	22,400		1,625,120
Cephalon, Inc.*	21,050		1,008,190
Forest Laboratories, Inc.*	27,300		1,227,954
Gilead Sciences, Inc.(A)*	37,500		1,401,562
ICOS Corporation*	31,350		756,632
Neurocrine Biosciences, Inc.*	16,450		776,522
Salix Pharmaceuticals, Ltd.*	12,370		265,646

			7,311,588

Health Care - General - 6.06%
Biomet, Inc.	52,625		2,466,797
Kyphon Inc.*	34,000		842,860
Schein (Henry), Inc.*	25,950		1,616,815

			4,926,472

Hospital Supply and Management - 5.63%
Bard (C. R.), Inc.	47,750		2,704,082
Laboratory Corporation of America Holdings*	42,900		1,875,588

			4,579,670

Hotels and Gaming - 1.55%
Starwood Hotels & Resorts Worldwide, Inc.	27,200		1,262,624


Metal Fabrication - 2.82%
Fastenal Company	39,750		2,289,401


Motor Vehicles - 1.25%
Harley-Davidson, Inc.	17,150		1,019,396


Multiple Industry - 1.38%
AXIS Capital Holdings Limited	43,100		1,120,600


Petroleum - Domestic - 0.91%
XTO Energy Inc.	22,850		742,168


Petroleum - Internationals - 3.40%
Burlington Resources Inc.	44,850		1,829,880
Noble Energy, Inc.	16,000		931,840

			2,761,720

Petroleum - Services - 0.56%
Smith International, Inc.*	7,500		455,475


Publishing - 2.39%
Getty Images, Inc.*	35,150		1,943,795


Restaurants - 0.58%
Starbucks Corporation*	10,350		470,873


Retail - General Merchandise - 1.24%
Cabela's Incorporated, Class A*	9,000		214,650
Nordstrom, Inc.	20,750		793,480

			1,008,130

Security and Commodity Brokers - 3.40%
Ameritrade Holding Corporation*	97,350		1,169,660
Chicago Mercantile Exchange Holdings Inc.	9,900		1,596,870

			2,766,530

Timesharing and Software - 11.97%
Alliance Data Systems Corporation*	64,750		2,626,260
eBay Inc.*	39,450		3,628,019
Global Payments Inc.	16,150		864,832
Paychex, Inc.	47,650		1,435,695
Total System Services, Inc.	46,500		1,173,660

			9,728,466

Trucking and Shipping - 1.57%
C.H. Robinson Worldwide, Inc.	27,500		1,275,587


TOTAL COMMON STOCKS - 95.22%		$	77,406,311

(Cost: $61,312,752)


PREFERRED STOCK - 0.92%


Security and Commodity Brokers
Prudential Financial, Inc. and Prudential Financial Capital Trust I, 6.75% Equity Security Units, Convertible*	10,650	$	744,169

(Cost: $584,212)

TOTAL SHORT-TERM SECURITIES - 3.35%		$	2,725,000

(Cost: $2,725,000)

TOTAL INVESTMENT SECURITIES - 99.49%		$	80,875,480

(Cost: $64,621,964)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.51%			429,663


NET ASSETS - 100.00%		$	81,305,143


Notes to Schedule of Investments
	*No dividends were paid during the preceding 12 months.
(A)	Security serves as cover for the following written call options outstanding as of September 30, 2004. (See Note 6 to financial statements):
	Underlying Security	Contracts Subject to Call	Expiration Month/ Exercise Price	Premium Received			Market Value

	Apple Computer, Inc.	322	October/40		$	24,312	$	33,810
	Gilead Sciences, Inc.	125	November/40			10,760		10,625

					$	35,072	$	44,435

	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 MID CAP GROWTH FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (cost - $64,622) (Notes 1 and 3)	$	80,875
Receivables:
Investment securities sold		518
Fund shares sold		219
Dividends and interest		44
Prepaid and other assets		42

Total assets		81,698

LIABILITIES
Payable to Fund shareholders		213
Payable for investment securities purchased		75
Outstanding written options at market (Note 6)		44
Accrued shareholder servicing (Note 2)		39
Due to custodian		15
Accrued accounting and administrative services fees (Note 2)		4
Accrued management fee (Note 2)		2
Accrued distribution and service fees (Note 2)		1

Total liabilities		393

Total net assets	$	81,305

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	89
Additional paid-in capital	113,544
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(486	)
Accumulated undistributed net realized loss on investment transactions	(48,087		)
Net unrealized appreciation in value of investments		16,245

Net assets applicable to outstanding units of capital	$	81,305

Net asset value per share (net assets divided by shares outstanding):
Class A	$9.24
Class B	$8.85
Class C	$8.98
Class Y	$9.27
Capital shares outstanding:
Class A		6,348
Class B		1,223
Class C		1,146
Class Y		161
Capital shares authorized	350,000

See Notes to Financial Statements

Statement of Operations
      IVY MID CAP GROWTH FUND
      For the Fiscal Year Ended September 30, 2004
      (In Thousands)

INVESTMENT LOSS
Income (Note 1B):
Dividends	$	218
Interest and amortization		27

Total income		245

Expenses (Note 2):
Investment management fee		323
Shareholder servicing:
Class A		117
Class B		42
Class C		21
Class Y		1
Distribution fee:
Class A		11
Class B		41
Class C		38
Service fee:
Class A		56
Class B		14
Class C		13
Class Y		2
Accounting and administrative services fees		23
Legal fees		14
Audit fees		11
Custodian fees		4
Other		52

Total		783
Less expenses in excess of voluntary limit (Note 2)		(54	)

Total expenses		729

Net investment loss		(484	)

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		906
Realized net loss on written options		(147	)
Realized net gain on purchased options		26

Realized net gain on investments		785

Unrealized appreciation in value of securities during the period		986
Unrealized depreciation in value of written options during the period		(22	)

Unrealized appreciation in value of investments during the period		964

Net gain on investments		1,749

Net increase in net assets resulting from operations	$	1,265

See Notes to Financial Statements

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

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

INCREASE IN NET ASSETS
Operations:
Net investment loss	$	(484	)	$	(820	)
Realized net gain (loss) on investments		785			(874	)
Unrealized appreciation		964			14,284

Net increase in net assets resulting from operations		1,265			12,590

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

		- -			- -

Capital share transactions (Note 5)		7,410			41,350

Total increase		8,675			53,940
NET ASSETS
Beginning of period		72,630			18,690

End of period	$	81,305		$	72,630

Undistributed net investment loss	$	(486	)	$	(2	)

(1)See "Financial Highlights" on pages 109 - 112.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal year ended March 31,										For the period from 6-30-00^⁽¹⁾to
	9-30-04				2004				2003			2002			3-31-01

Net asset value, beginning of period		$	9.09		$	6.67			$	8.91		$	9.11		$	10.00

Income (loss) from investment operations:
Net investment income (loss)		(0.05		)	(0.08		)		(0.05		)		0.02			0.11
Net realized and unrealized gain (loss) on investments			0.20			2.50			(2.19		)	(0.17		)		(0.65	)

Total from investment operations			0.15			2.42			(2.24		)	(0.15		)		(0.54	)

Less distributions from:
Net investment income		(0.00		)	(0.00		)		(0.00		)*	(0.05		)		(0.06	)
Capital gains		(0.00		)	(0.00		)		(0.00		)	(0.00		)		(0.29	)

Total distributions		(0.00		)	(0.00		)		(0.00		)	(0.05		)		(0.35	)

Net asset value, end of period		$	9.24		$	9.09			$	6.67		$	8.91		$	9.11

Total return^⁽²⁾			1.65	%	36.28		%	- -25.13			%	- -1.67		%		- -5.88	%
Net assets, end of period (in millions)		$59			$50				$14			$15			$11
Ratio of expenses to average net assets including voluntary expense waiver			1.65	%^⁽³⁾		1.84	%			1.17	%		1.17	%		1.01	%^⁽³⁾
Ratio of net investment income (loss) to average net assets including voluntary expense waiver		- -1.04		%^⁽³⁾	- -1.20		%		- -0.49		%		0.34	%		1.85	%^⁽³⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			1.80	%^⁽³⁾		1.89	%			2.02	%		1.84	%		1.65	%^⁽³⁾
Ratio of net investment income (loss) to average net assets excluding voluntary expense waiver		- -1.19		%^⁽³⁾	- -1.25		%		- -1.34		%	- -0.33		%		1.21	%^⁽³⁾
Portfolio turnover rate			15	%		24	%			36	%		39	%		110	%

*Not shown due to rounding.

(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.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal year ended March 31,										For the period from 7-6-00^⁽¹⁾ to
	9-30-04				2004				2003			2002			3-31-01

Net asset value, beginning of period		$	8.75		$	6.49			$	8.81		$	9.07		$	10.01

Income (loss) from investment operations:
Net investment income (loss)		(0.11		)	(0.17		)		(0.14		)	(0.09		)		0.02
Net realized and unrealized gain (loss) on investments			0.21			2.43			(2.18		)	(0.17		)		(0.66	)

Total from investment operations			0.10			2.26			(2.32		)	(0.26		)		(0.64	)

Less distributions from:
Net investment income		(0.00		)	(0.00		)		(0.00		)	(0.00		)		(0.01	)
Capital gains		(0.00		)	(0.00		)		(0.00		)	(0.00		)		(0.29	)

Total distributions		(0.00		)	(0.00		)		(0.00		)	(0.00		)		(0.30	)

Net asset value, end of period		$	8.85		$	8.75			$	6.49		$	8.81		$	9.07

Total return			1.14	%	34.82		%	- -26.33			%	- -2.87		%		- -6.85	%
Net assets, end of period (in millions)		$11			$12				$2			$2			$2
Ratio of expenses to average net assets including voluntary expense waiver			2.88	%^⁽²⁾		3.04	%			2.73	%		2.49	%		2.40	%^⁽²⁾
Ratio of net investment income (loss) to average net assets including voluntary expense waiver		- -2.24		%^⁽²⁾	- -2.37		%		- -2.05		%	- -0.95		%		0.44	%^⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			NA			3.09	%			3.58	%		3.90	%		3.93	%^⁽²⁾
Ratio of net investment loss to average net assets excluding voluntary expense waiver			NA		- -2.43		%		- -2.90		%	- -2.37		%		- -1.09	%^⁽²⁾
Portfolio turnover rate			15	%		24	%			36	%		39	%		110	%

(1)Commencement of operations of the class.

(2)Annualized.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal year ended March 31,										For the period from 7-3-00^⁽¹⁾ to
	9-30-04				2004				2003			2002			3-31-01

Net asset value, beginning of period		$	8.86		$	6.56			$	8.85		$	9.08		$	10.00

Income (loss) from investment operations:
Net investment income (loss)		(0.08		)	(0.13		)		(0.10		)	(0.05		)		0.04
Net realized and unrealized gain (loss) on investments			0.20			2.43			(2.19		)	(0.18		)		(0.66	)

Total from investment operations			0.12			2.30			(2.29		)	(0.23		)		(0.62	)

Less distributions from:
Net investment income		(0.00		)	(0.00		)		(0.00		)	(0.00		)		(0.01	)
Capital gains		(0.00		)	(0.00		)		(0.00		)	(0.00		)		(0.29	)

Total distributions		(0.00		)	(0.00		)		(0.00		)	(0.00		)		(0.30	)

Net asset value, end of period		$	8.98		$	8.86			$	6.56		$	8.85		$	9.08

Total return			1.36	%	35.06		%	- -25.88			%	- -2.53		%		- -6.58	%
Net assets, end of period (in millions)		$10			$10				$3			$4			$4
Ratio of expenses to average net assets including voluntary expense waiver			2.35	%^⁽²⁾		2.59	%			2.18	%		2.10	%		1.99	%^⁽²⁾
Ratio of net investment income (loss) to average net assets including voluntary expense waiver		- -1.76		%^⁽²⁾	- -1.98		%		- -1.50		%	- -0.55		%		0.84	%^⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			2.55	%^⁽²⁾		2.64	%			3.03	%		3.30	%		3.26	%^⁽²⁾
Ratio of net investment loss to average net assets excluding voluntary expense waiver		- -1.96		%^⁽²⁾	- -2.03		%		- -2.35		%	- -1.74		%		- -0.43	%^⁽²⁾
Portfolio turnover rate			15	%		24	%			36	%		39	%		110	%

(1)Commencement of operations of the class.

(2)Annualized.

See Notes to Financial Statements

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

	For the six months ended					For the fiscal year ended March 31,										For the period from 7-10-00^⁽¹⁾ to
	9-30-04					2004				2003			2002			3-31-01

Net asset value, beginning of period		$	9.09			$	6.67			$	8.91		$	9.11		$	10.23

Income (loss) from investment operations:
Net investment income (loss)		(0.03		)		(0.05		)		(0.01		)		0.00			0.11
Net realized and unrealized gain (loss) on investments			0.21				2.47			(2.20		)	(0.14		)		(0.88	)

Total from investment operations			0.18				2.42			(2.21		)	(0.14		)		(0.77	)

Less distributions from:
Net investment income		(0.00		)		(0.00		)		(0.03		)	(0.06		)		(0.06	)
Capital gains		(0.00		)		(0.00		)		(0.00		)	(0.00		)		(0.29	)

Total distributions		(0.00		)		(0.00		)		(0.03		)	(0.06		)		(0.35	)

Net asset value, end of period		$	9.27			$	9.09			$	6.67		$	8.91		$	9.11

Total return			1.98	%		36.28		%	- -24.86			%	- -1.52		%		- -7.97	%
Net assets, end of period (in thousands)	$1,494				$1,363					$329			$438			$184
Ratio of expenses to average net assets including voluntary expense waiver			1.25	%^⁽²⁾			1.72	%			0.86	%		0.83	%		1.03	%^⁽²⁾
Ratio of net investment income (loss) to average net assets including voluntary expense waiver		- -0.62		%^⁽²⁾		- -0.91		%		- -0.18		%		0.50	%		1.77	%^⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			1.51	%^⁽²⁾			1.77	%			1.71	%		1.30	%		1.68	%^⁽²⁾
Ratio of net investment income (loss) to average net assets excluding voluntary expense waiver		- -0.88		%^⁽²⁾		- -0.96		%		- -1.03		%		0.03	%		1.11	%^⁽²⁾
Portfolio turnover rate			15	%			24	%			36	%		39	%		110	%

(1)Commencement of operations of the class.

(2)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY MONEY MARKET FUND

Portfolio Highlights

On September 30, 2004, Ivy Money Market Fund had net assets totaling $49,008,469.

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


Corporate Obligations - Notes	$	36.83
Corporate Obligations - Commercial Paper	$	26.28
Municipal Obligations	$	18.22
United States Government Securities	$	12.38
Corporate Obligations - Certificates of Deposit	$	5.92
Cash and Other Assets, Net of Liabilities	$	0.37


The Investments of Ivy Money Market Fund
*September 30, 2004*
CORPORATE OBLIGATIONS	Principal Amount in Thousands			Value


Certificates of Deposit - 5.92%
Banks
Citibank, N.A.:
1.65%, 11-22-04	$	1,200	$	1,200,000
1.86%, 12-20-04		1,000		1,000,000
Wells Fargo & Company,
1.76%, 10-20-04		700		700,000

				2,900,000

Commercial Paper
Banks - 2.83%
Bank of America Corporation:
1.49%, 10- 4-04		1,000		999,876
1.73%, 12-13-04		390		388,632

				1,388,508

Capital Equipment - 4.49%
Caterpillar Inc.:
1.75%, 10- 4-04		1,200		1,199,825
1.71%, 10-15-04		1,000		999,335

				2,199,160

Finance Companies - 4.68%
Ciesco, LLC:
1.55%, 10-5-04		500		499,914
1.72%, 11-8-04		600		598,911
1.79%, 11-16-04		1,200		1,197,255

				2,296,080

Food and Related - 4.58%
Archer Daniels Midland Company,
1.77%, 10-19-04		500		499,557
Golden Peanut Co.:
1.81%, 11-24-04		750		747,964
1.85%, 12-8-04		500		498,253
McCormick & Co. Inc.,
1.81%, 11-23-04		500		498,668

				2,244,442

Household - General Products - 0.51%
Fortune Brands Inc.,
1.59%, 10-18-04		250		249,812


Multiple Industry - 1.02%
General Electric Capital Corporation,
1.8%, 12-8-04		500		498,300


Retail - General Merchandise - 0.61%
Wal-Mart Stores, Inc.,
1.75%, 10-5-04		300		299,942


Security and Commodity Brokers - 5.52%
Prudential Funding Corp.,
1.71%, 10-18-04		2,300		2,298,143
UBS Finance Delaware LLC,
1.88%, 10-1-04		407		407,000

				2,705,143

Utilities - Telephone - 2.04%
BellSouth Corporation,
1.77%, 10-25-04		1,000		998,820


Total Commercial Paper - 26.28%				12,880,207


Notes
Banks - 8.63%
Bank of America Corporation,
1.91%, 11-13-04		1,000		1,001,363
NationsBanc Corp.,
6.875%, 2-15-05		1,500		1,530,224
Wells Fargo & Company:
1.69%, 10- 4-04		500		500,000
1.73%, 10-15-04		1,200		1,200,000

				4,231,587

Business Equipment and Services - 1.90%
Playworld Systems Incorporated (Wachovia Bank, N.A.),
1.91%, 10-6-04		930		930,000


Electrical Equipment - 0.43%
Emerson Electric Co.,
7.875%, 6-1-05		205		212,722


Health Care - Drugs - 6.88%
Merck & Co., Inc.,
4.484%, 2-22-05 (A)		1,900		1,923,763
Pfizer Inc.,
1.7475%, 10-7-04		1,450		1,450,000

				3,373,763

Health Care - General - 2.04%
ACTS Retirement - Life Communities, Inc., Variable Rate Demand Bonds, Series 2003A,
1.84%, 10-7-04		1,000		1,000,000


Hospital Supply and Management - 0.81%
Autumn House at Powder Mill, Inc. (Suntrust Bank),
1.85%, 10-7-04		150		150,000
Meriter Management Services, Inc. (U.S. Bank Milwaukee, National Association),
1.8%, 10-6-04		245		245,000

				395,000

Household - General Products - 2.55%
Procter & Gamble Company (The),
1.83%, 10-7-04		1,250		1,250,000


Insurance - Property and Casualty - 2.04%
MBIA Global Funding, LLC (MBIA Insurance Corporation),
1.8%, 10-29-04		1,000		1,000,000


Multiple Industry - 2.07%
General Electric Capital Corporation,
6.5%, 1-25-05		1,000		1,015,845


Publishing - 1.66%
Gannett Co., Inc.,
4.95%, 4-1-05		800		811,544


Retail - General Merchandise - 3.50%
Target Corporation,
7.5%, 2-15-05		600		613,560
Wal-Mart Stores, Inc.,
1.6975%, 11-22-04		1,100		1,100,166

				1,713,726

Trucking and Shipping - 1.11%
Volpe Family Partnership, L.P. (Wachovia Bank, N.A.),
1.89%, 10-7-04		545		545,000


Utilities - Telephone - 3.21%
BellSouth Corporation,
4.119%, 4-26-05 (A)		1,100		1,115,478
SBC Communications Inc.,
4.206%, 6-5-05 (A)		450		456,008

				1,571,486


Total Notes - 36.83%				18,050,673


TOTAL CORPORATE OBLIGATIONS - 69.03%			$	33,830,880

(Cost: $33,830,880)


MUNICIPAL OBLIGATIONS


California - 8.11%
California Pollution Control Financing Authority, Environmental Improvement Revenue Bonds:
Air Products and Chemicals, Inc./Wilmington Facility, Taxable Series 1997A,
1.62%, 10-7-04	1,800	1,800,000
Air Products Manufacturing Corporation, Taxable Series 1997A,
1.62%, 10-7-04	600	600,000
County of Sacramento, Taxable Pension Funding Bonds, Series 1995B (Bayerische Landesbank Girozentrale, New York Branch),
1.83%, 10-6-04	1,575	1,575,000

		3,975,000

Florida - 1.02%
University of South Florida Research Foundation, Incorporated, Variable Rate Demand Revenue Bonds,
Multi-Tenant Office Building Project, Taxable Series 2004C (Bank of America, N.A.),
1.8%, 10-6-04	500	500,000



Maryland - 2.87%
Mayor and City Council of Baltimore (City of Baltimore, Maryland), General Obligation Bonds, Consolidated Public Improvement Bonds:
Series 2003D (Variable Rate Demand/Taxable),
1.8%, 10-7-04	905		905,000
Series 2003C (Variable Rate Demand/Taxable),
1.8%, 10-7-04	500		500,000

			1,405,000

New York - 0.66%
The City of New York, General Obligation Bonds, Fiscal 1995 Series B, Taxable Adjustable Rate Bonds (Bayerische Landesbank Girozentrale, New York Branch),
1.76%, 12-1-04	325		325,000


Texas - 4.28%
Gulf Coast Waste Disposal Authority, Pollution Control Revenue Bonds (Amoco Oil Company Project), Taxable Series 1995:
1.57%, 10- 4-04	1,500		1,500,000
1.7%, 11-9-04	600		600,000

			2,100,000

Washington - 1.28%
Washington State Housing Finance Commission:
Taxable Variable Rate Demand Multifamily Revenue Bonds:
Springfield Meadows Apartments Project, Series 2001B (U.S. Bank, National Association),
1.93%, 10- 4-04	240		240,000
Brittany Park Project, Series 1996B (U.S. Bank of Washington, National Association),
1.74%, 10-7-04	95		95,000
Taxable Variable Rate Demand Nonprofit Revenue Bonds, Virginia Mason Research Center Project, Series 1997B (U.S. Bank, National Association),
1.89%, 10-7-04	290		290,000

			625,000


TOTAL MUNICIPAL OBLIGATIONS - 18.22%		$	8,930,000
(Cost: $8,930,000)


UNITED STATES GOVERNMENT SECURITIES


Federal Home Loan Bank:
1.3%, 2-23-05	300		300,000
1.47%, 3-1-05	1,000		1,000,000
1.3%, 4-27-05	1,500		1,500,000
1.35%, 4-29-05	800		800,000
1.555%, 5-3-05	750		750,000
Overseas Private Investment Corporation:
1.82%, 10-6-04	1,287		1,287,000
1.86%, 10-6-04	430		430,233

TOTAL UNITED STATES GOVERNMENT SECURITIES - 12.38%		$	6,067,233

(Cost: $6,067,233)

TOTAL INVESTMENT SECURITIES - 99.63%		$	48,828,113

(Cost: $48,828,113)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.37%			180,356


NET ASSETS - 100.00%		$	49,008,469

Notes to Schedule of Investments
(A)	Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2004, the total value of these securities amounted to $3,495,249 or 7.13% 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 MONEY MARKET FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (cost - $48,828) (Notes 1 and 3)	$	48,828
Cash		256
Receivables:
Interest		229
Fund shares sold		42
Prepaid and other assets		63

Total assets		49,418

LIABILITIES
Payable to Fund shareholders		381
Accrued shareholder servicing (Note 2)		22
Accrued accounting and administrative services fees (Note 2)		2
Accrued management fee (Note 2)		1
Dividends payable		4

Total liabilities		410

Total net assets	$	49,008

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	490
Additional paid-in capital		48,518

Net assets applicable to outstanding units of capital	$	49,008

Net asset value per share (net assets divided by shares outstanding):
Class A	$1.00
Class B	$1.00
Class C	$1.00
Capital shares outstanding:
Class A		42,503
Class B		1,784
Class C		4,721
Capital shares authorized	300,000

See Notes to Financial Statements

Statement of Operations
      IVY MONEY MARKET FUND
      For the Fiscal Year Ended September 30, 2004
      (In Thousands)

INVESTMENT INCOME
Interest and amortization (Note 1B)	$	334

Expenses (Note 2):
Shareholder servicing:
Class A		99
Class B		2
Class C		6
Investment management fee		102
Registration fees		28
Distribution fee:
Class B		6
Class C		19
Accounting and administrative services fees		18
Legal fees		11
Audit fees		10
Service fee:
Class B		2
Class C		6
Custodian fees		5
Other		15

Total		329
Less expenses in excess of voluntary waiver of (Note 2):
Class A shareholder servicing		(62	)
Class B service and distribution fees		(5	)
Class C service and distribution fees		(17	)

Total expenses		245

Net investment income		89

Net increase in net assets resulting from operations	$	89

See Notes to Financial Statements

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

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

INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	89		$	116

Net increase in net assets resulting from operations		89			116

Distributions to shareholders from net investment income (Note 1F):^⁽¹⁾
Class A		(89	)		(114	)
Class B		- -	*		- -	*
Class C		- -	*		(2	)

		(89	)		(116	)

Capital share transactions (Note 5)		(3,272	)		30,964

Total increase (decrease)		(3,272	)		30,964
NET ASSETS
Beginning of period		52,280			21,316

End of period	$	49,008		$	52,280

Undistributed net investment income	$	- -		$	- -

*Not shown due to rounding.

(1)See "Financial Highlights" on pages 123 - 125.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal year ended March 31,									For the period from 6-30-00^⁽¹⁾ to
	9-30-04				2004			2003			2002			3-31-01

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

Net investment income			0.0021			0.0061			0.0124			0.0259				0.0413
Less dividends declared		(0.0021		)	(0.0061		)	(0.0124		)	(0.0259		)		(0.0413		)

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

Total return			0.20%			0.62%			1.25%			2.70%				4.11%
Net assets, end of period (in millions)			$43			$45		$10			$5				$5
Ratio of expenses to average net assets including voluntary expense waiver			0.91%^⁽²⁾			0.67%			0.52%			0.81%				0.92%^⁽²⁾
Ratio of net investment income to average net assets including voluntary expense waiver			0.40%^⁽²⁾			0.48%			1.26%			2.60%				5.49%^⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			1.19%^⁽²⁾			0.87%			0.92%			1.03%				1.18%^⁽²⁾
Ratio of net investment income to average net assets excluding voluntary expense waiver			0.12%^⁽²⁾			0.28%			0.86%			2.38%				5.23%^⁽²⁾

(1)Commencement of operations of the class.

(2)Annualized.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal year ended March 31,									For the period from 7-12-00^⁽¹⁾ to
	9-30-04				2004			2003			2002			3-31-01

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

Net investment income			0.0000	*		0.0002			0.0015			0.0147				0.0299
Less dividends declared		(0.0000		)*	(0.0002		)	(0.0015		)	(0.0147		)		(0.0299		)

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

Total return			0.01%			0.02%			0.16%			1.55%				2.97%
Net assets, end of period (in thousands)		$1,784			$1,225			$1,188			$578				$431
Ratio of expenses to average net assets including voluntary expense waiver			1.33%^⁽²⁾			1.14%			1.59%			1.88%				2.29%^⁽²⁾
Ratio of net investment income to average net assets including voluntary expense waiver			0.01%^⁽²⁾			0.02%			0.14%			1.33%				4.05%^⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			1.94%^⁽²⁾			1.34%			2.06%			2.39%				2.94%^⁽²⁾
Ratio of net investment income (loss) to average net assets excluding voluntary expense waiver		- -0.60%^⁽²⁾			- -0.18%			- -0.33%				0.82%				3.41%^⁽²⁾

*Not shown due to rounding.

(1)Commencement of operations of the class.

(2)Annualized.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal year ended March 31,									For the period from 7-3-00^⁽¹⁾ to
	9-30-04				2004			2003			2002			3-31-01

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

Net investment income			0.0000	*		0.0002			0.0019			0.0157				0.0332
Less dividends declared		(0.0000		)*	(0.0002		)	(0.0019		)	(0.0157		)		(0.0332		)

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

Total return			0.01%			0.02%			0.20%			1.63%				3.32%
Net assets, end of period (in millions)		$5			$6			$10			$7				$10
Ratio of expenses to average net assets including voluntaryexpense waiver			1.31%^⁽²⁾			1.16%			1.56%			1.81%				1.98%^⁽²⁾
Ratio of net investment income to average net assets including voluntary expense waiver			0.01%^⁽²⁾			0.03%			0.18%			1.58%				4.34%^⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			1.97%^⁽²⁾			1.35%			1.99%			2.31%				2.54%^⁽²⁾
Ratio of net investment income (loss) to average net assets excluding voluntary expense waiver		- -0.66%^⁽²⁾			- -0.17%			- -0.25%				1.08%				3.78%^⁽²⁾

*Not shown due to rounding.

(1)Commencement of operations of the class.

(2)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY MUNICIPAL BOND FUND

Portfolio Highlights

On September 30, 2004, Ivy Municipal Bond Fund had net assets totaling $25,973,373 invested in a diversified portfolio.

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


Education Revenue Bonds	$	13.48
City and County General Obligation Bonds	$	13.00
Housing Revenue Bonds	$	8.93
Other Municipal Bonds	$	8.56
Sales Revenue Bonds	$	8.27
School General Obligation Bonds	$	7.05
Hospital Revenue Bonds	$	6.83
Airport Revenue Bonds	$	6.65
Transportation Revenue Bonds	$	6.43
Public Power Revenue Bonds	$	6.10
Special Tax Bonds	$	5.93
Lease/Certificate of Participation Bonds	$	4.51
Cash and Cash Equivalents	$	2.14
Water and Sewer Revenue Bonds	$	2.12

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



AAA	57.21	%
AA	14.91	%
A	8.84	%
BBB	11.75	%
Non-rated	5.15	%
Cash and Cash Equivalents	2.14	%


2004 TAX YEAR TAXABLE EQUIVALENT YIELDS^⁽¹⁾
If your Taxable Income is:								Your Marginal Tax			Equivalent Tax Free Yields
	Joint Return				Single Return			Bracket Is			3%	4%	5%	6%

$	0	- -	14,300	$	0	- -	7,150		10	%	3.33%	4.44%	5.56%	6.67%
$	14,301	- -	58,100	$	7,151	- -	29,050		15	%	3.53%	4.71%	5.88%	7.06%
$	58,101	- -	117,250	$	29,051	- -	70,350		25	%	4.00%	5.33%	6.67%	8.00%
$	117,251	- -	178,650	$	70,351	- -	146,750		28	%	4.17%	5.56%	6.94%	8.33%
$	178,651	- -	319,100	$	146,751	- -	319,100		33	%	4.48%	5.97%	7.46%	8.96%
$	319,101 and above			$	319,101 and above				35	%	4.62%	6.15%	7.69%	9.23%

(1)Table is for illustration only and does not represent the actual performance of Ivy Municipal Bond Fund.


The Investments of Ivy Municipal Bond Fund
*September 30, 2004*
MUNICIPAL BONDS	Principal Amount in Thousands			Value


Arizona - 2.49%
The Industrial Development Authority of the City of Phoenix, Arizona, Single Family Mortgage Revenue Bonds, Series 2002-1A,
6.2%, 3-1-34	$	365	$	394,496
City of Bullhead City, Arizona, Bullhead Parkway Improvement District, Improvement Bonds,
6.1%, 1-1-13		250		253,435

				647,931

California - 7.85%
San Mateo County Community College District (County of San Mateo, California), 2002 General Obligation Bonds (Election of 2001), Series A (Current Interest Bonds),
5.375%, 9-1-15		500		567,195
Trustees of the California State University Systemwide Revenue Bonds, Series 2002A,
5.5%, 11-1-15		250		283,573
Moreno Valley Unified School District, General Obligation Bonds, 2004 Election, Series A (Riverside County, California),
5.25%, 8-1-22		240		259,896
State of California Various Purpose General Obligation Bonds,
5.0%, 2-1-22		245		255,555
State of California Department of Water Resources, Power Supply Revenue Bonds, Series 2002A,
5.5%, 5-1-08		215		238,226
State of California, Economic Recovery Bonds, Series 2004B,
5.0%, 7-1-23		200		217,884
Riverside Community College District, Riverside County, California, Election of 2004, General Obligation Bonds, Series 2004A,
5.5%, 8-1-29		200		216,218

				2,038,547

Colorado - 4.01%
City of Aspen, Colorado, Sales Tax Revenue Bonds, Series 1999,
5.25%, 11-1-15		500		536,005
El Paso County School District No. 12 - Cheyenne Mountain, El Paso County, Colorado, General Obligation Refunding Bonds, Series 2002,
0.0%, 9-15-12		685		504,783

				1,040,788

Florida - 5.37%
School District of Hillsborough County, Florida, Sales Tax Revenue Bonds, Series 2002,
5.375%, 10-1-13		500		559,320
Polk County, Florida, Capital Improvement and Refunding Revenue Bonds, Series 2002,
5.25%, 12-1-09		500		557,645
City of Jacksonville, Florida, Better Jacksonville Sales Tax Revenue Bonds, Series 2003,
5.25%, 10-1-19		250		278,593

				1,395,558

Georgia - 0.90%
Hospital Authority of Cobb County (Georgia), Revenue Anticipation Refunding and Improvement Certificates, Series 2003,
5.25%, 4-1-20		210		233,132


Illinois - 7.70%
Village of Bedford Park, Cook County, Illinois, Water Revenue Bonds, Series 2000A,
6.0%, 12-15-12		955		1,102,834
Bloomington-Normal Airport Authority of McLean County, Illinois, Central Illinois Regional Airport, Passenger Facility Charge Revenue Bonds, Series 2001,
6.05%, 12-15-19		645		623,805
City of Chicago, General Obligation Bonds, Project and Refunding, Series 2004A,
5.25%, 1-1-21		250		273,115

				1,999,754

Indiana - 7.85%
New Albany-Floyd County School Building Corporation, First Mortgage Bonds, Series 2002 (Floyd County, Indiana),
5.75%, 7-15-17		675		768,231
Ball State University Board of Trustees, Ball State University Student Fee Bonds, Series K,
5.75%, 7-1-18		500		565,220
East Chicago Elementary School Building Corporation (Lake County, Indiana), First Mortgage Bonds, Series 1993A,
5.5%, 1-15-16		375		381,454
Dyer (Indiana) Redevelopment Authority, Economic Development Lease Rental Bonds, Series 1999,
6.5%, 1-15-24		300		324,042

				2,038,947

Kansas - 5.11%
Sedgwick County, Kansas and Shawnee County, Kansas, Single Family Mortgage Revenue Bonds (Mortgage-Backed Securities Program):
2002 Series A-5,
5.55%, 12-1-33		500		530,435
2003 Series A-2,
4.0%, 6-1-35		395		425,798
2001 Series A-1 (AMT),
6.3%, 12-1-32		345		371,558

				1,327,791

Louisiana - 3.17%
State of Louisiana, Gasoline and Fuels Tax Revenue Bonds, 2002 Series A,
5.25%, 6-1-13		500		559,005
Louisiana Local Government Environmental Facilities and Community Development Authority, Mortgage Revenue Bonds, Series 2004A (GNMA Collateralized - Cypress Apartments Project),
5.5%, 4-20-38		250		265,402

				824,407

Maryland - 2.11%
Maryland Transportation Authority, Airport Parking Revenue Bonds, Series 2002B, Baltimore/Washington International Airport Projects (Qualified Airport Bonds - AMT),
5.375%, 3-1-15		500		548,750


Massachusetts - 0.85%
Massachusetts Bay Transportation Authority, Assessment Bonds, 2004 Series A,
5.25%, 7-1-20		200		220,328


Michigan - 1.74%
City of Detroit, Michigan, General Obligation Bonds (Unlimited Tax), Series 2004-A(1),
5.25%, 4-1-23		420		452,516


Minnesota - 4.88%
City of Perham, Minnesota, General Obligation Disposal System Revenue Bonds, Series 2001,
6.0%, 5-1-22		500		533,165
City of Victoria, Minnesota, Private School Facility Revenue Bonds (Holy Family Catholic High School Project), Series 1999A,
5.6%, 9-1-19		400		400,996
City of Minneapolis, Minnesota, General Obligation Convention Center Bonds, Series 2002,
5.0%, 12-1-10		300		333,483

				1,267,644

Missouri - 5.19%
The City of St. Louis, Missouri, Airport Revenue Bonds, Series 2001A (Airport Development Program),
5.0%, 7-1-11		500		555,745
City of Kearney, Missouri, General Obligation Bonds, Series 2001,
5.5%, 3-1-16		350		389,207
The Industrial Development Authority of the City of Kansas City, Missouri, Revenue Bonds, Series 2004 (Plaza Library Project),
5.9%, 3-1-24		200		201,566
City of Belton, Missouri, Tax Increment Revenue Bonds (Belton Town Centre Project), Series 2004,
6.25%, 3-1-24		200		200,832

				1,347,350

Nebraska - 1.86%
Nebraska Higher Education Loan Program, Inc., Senior Subordinate Bonds, 1993-2, Series A-5A,
6.2%, 6-1-13		450		483,930


Nevada - 1.08%
Carson City, Nevada Hospital Revenue Bonds (Carson-Tahoe Hospital Project), Series 2002,
6.0%, 9-1-15		255		281,097


New Jersey - 2.32%
New Jersey Transportation Trust Fund Authority, Transportation System Bonds, 2004 Series B,
5.25%, 12-15-11		300		337,791
New Jersey Economic Development Authority, School Facilities Construction Bonds, 2004 Series I,
5.25%, 9-1-24		250		264,022

				601,813

New York - 11.74%
The City of New York, General Obligation Bonds:
Fiscal 2003 Series A Current Interest Bonds,
5.5%, 8-1-10		500		558,935
Fiscal 2004 Series E,
5.25%, 8-1-09		250		274,950
The Port Authority of New York and New Jersey, Consolidated Bonds, One Hundred Twenty-Seventh Series,
5.5%, 12-15-14		500		557,835
Dormitory Authority of the State of New York, Third General Resolution Revenue Bonds (State University Educational Facilities Issue), Series 2002B,
5.25%, 11-15-23		500		554,130
New York State Thruway Authority, State Personal Income Tax Revenue Bonds (Transportation), Series 2002A,
5.25%, 3-15-10		500		552,940
New York City, Municipal Water Finance Authority, Water and Sewer System Revenue Bonds, Fiscal 2003 Series D,
5.0%, 6-15-09		500		549,905

				3,048,695

Oklahoma - 1.55%
Tulsa Public Facilities Authority (Oklahoma), Assembly Center Lease Payment Revenue Bonds, Refunding Series 1985,
6.6%, 7-1-14		335		402,777


Pennsylvania - 3.50%
The School District of Philadelphia, Pennsylvania, General Obligation Bonds, Series A of 2002,
5.5%, 2-1-18		500		572,760
Schuylkill County Industrial Development Authority, Variable Rate Demand Revenue Bonds (Pine Grove Landfill, Inc. Project), 1995 Series,
5.1%, 10-1-19		320		335,270

				908,030

Rhode Island - 2.87%
Rhode Island Health and Educational Building Corporation, Hospital Financing Revenue Bonds, St. Joseph Health Services of Rhode Island Issue, Series 1999,
5.4%, 10-1-09		725		745,061


South Carolina - 2.13%
South Carolina Public Service Authority, Santee Cooper, Revenue Obligations, 2002 Refunding Series D,
5.0%, 1-1-10		500		552,465


Texas - 4.33%
Lufkin Health Facilities Development Corporation, Health System Revenue and Refunding Bonds (Memorial Health System of East Texas), Series 1995,
6.875%, 2-15-26		490		515,456
Texas Department of Housing and Community Affairs, Single Family Mortgage Revenue Bonds, 1997 Series D (AMT) TEAMS Structure,
5.7%, 9-1-29		320		331,296
Pflugerville Independent School District (Travis County, Texas), Unlimited Tax School Building Bonds, Series 2001,
5.5%, 8-15-19		250		277,355

				1,124,107

Virginia - 2.16%
City of Chesapeake, Virginia, General Obligation Public Improvement and Refunding Bonds, Series of 2001,
5.5%, 12-1-17		500		560,775


Washington - 3.06%
Energy Northwest:
Project No. 1 Refunding Electric Revenue Bonds, Series 2002-A,
5.75%, 7-1-16		500		571,290
Columbia Generating Station Electric Revenue Refunding Bonds, Series 2004-A,
5.25%, 7-1-10		200		223,218

				794,508

Wyoming - 2.04%
Wyoming Student Loan Corporation, Student Loan Revenue Refunding Bonds, Series 1999A (Non-AMT),
6.2%, 6-1-24		500		529,980


TOTAL MUNICIPAL BONDS - 97.86%			$	25,416,681

(Cost: $24,264,621)

TOTAL SHORT-TERM SECURITIES - 2.56%			$	666,000

(Cost: $666,000)

TOTAL INVESTMENT SECURITIES - 100.42%			$	26,082,681

(Cost: $24,930,621)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.42%)				(109,308	)


NET ASSETS - 100.00%			$	25,973,373

Notes to Schedule of Investments
	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 MUNICIPAL BOND FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (cost - $24,931) (Notes 1 and 3)	$	26,083
Cash		1
Receivables:
Interest		332
Fund shares sold		19
Prepaid and other assets		26

Total assets		26,461

LIABILITIES
Payable for investment securities purchased		339
Payable to Fund shareholders		132
Accrued shareholder servicing (Note 2)		5
Dividends payable		5
Accrued accounting and administrative services fees (Note 2)		2
Accrued distribution and service fees (Note 2)		1
Other		4

Total liabilities		488

Total net assets	$	25,973

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	23
Additional paid-in capital		25,404
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		9
Accumulated undistributed net realized loss on investment transactions		(615	)
Net unrealized appreciation in value of investments		1,152

Net assets applicable to outstanding units of capital	$	25,973

Net asset value per share (net assets divided by shares outstanding):
Class A	$11.29
Class B	$11.29
Class C	$11.29
Class Y	$11.29
Capital shares outstanding:
Class A		444
Class B		86
Class C		1,766
Class Y		4
Capital shares authorized	200,000

See Notes to Financial Statements

Statement of Operations
      IVY MUNICIPAL BOND FUND
      For the Fiscal Year Ended September 30, 2004
      (In Thousands)

INVESTMENT INCOME
Interest and amortization (Note 1B)	$	553

Expenses (Note 2):
Distribution fee:
Class A		1
Class B		4
Class C		72
Investment management fee		65
Service fee:
Class A		4
Class B		1
Class C		24
Class Y		- -	*
Shareholder servicing:
Class A		3
Class B		1
Class C		20
Class Y		- -	*
Registration fees		20
Audit fees		10
Accounting and administrative services fees		8
Legal fees		4
Custodian fees		2
Other		2

Total		241
Less voluntary waiver of investment management fee (Note 2)		(48	)

Total expenses		193

Net investment income		360

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		24
Unrealized depreciation in value of investments during the period		(68	)

Net loss on investments		(44	)

Net increase in net assets resulting from operations	$	316

*Not shown due to rounding.

See Notes to Financial Statements

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

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

INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	360		$	702
Realized net gain on investments		24			268
Unrealized appreciation (depreciation)		(68	)		208

Net increase in net assets resulting from operations		316			1,178

Distributions to shareholders from net investment income (Note 1F):^⁽¹⁾
Class A		(81	)		(123	)
Class B		(14	)		(19	)
Class C		(276	)		(554	)
Class Y		- -	*		- -	*

		(371	)		(696	)

Capital share transactions (Note 5)		698			(2,997	)

Total increase (decrease)		643			(2,515	)
NET ASSETS
Beginning of period		25,330			27,845

End of period	$	25,973		$	25,330

Undistributed net investment income	$	9		$	20

*Not shown due to rounding.

(1)See "Financial Highlights" on pages 138 - 141.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal year ended March 31,									For the period from 9-15-00^⁽¹⁾ to
	9-30-04				2004			2003			2002			3-31-01

Net asset value, beginning of period		$	11.31		$	11.10		$	10.61		$	10.52		$	10.33

Income (loss) from investment operations:
Net investment income			0.20			0.37			0.42			0.47			0.26
Net realized and unrealized gain (loss) on investments			(0.01	)		0.21			0.49			0.09			0.19

Total from investment operations			0.19			0.58			0.91			0.56			0.45

Less distributions from:
Net investment income			(0.21	)		(0.37	)		(0.42	)		(0.47	)		(0.26	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.21	)		(0.37	)		(0.42	)		(0.47	)		(0.26	)

Net asset value, end of period		$	11.29		$	11.31		$	11.10		$	10.61		$	10.52

Total return^⁽²⁾			1.70	%		5.36	%		8.71	%		5.38	%		4.32	%
Net assets, end of period (in millions)		$5			$4			$3			$2			$1
Ratio of expenses to average net assets including voluntary expense waiver			0.87	%^⁽³⁾		1.25	%		1.15	%		1.17	%		1.21	%^⁽³⁾
Ratio of net investment income to average net assets including voluntary expense waiver			3.61	%^⁽³⁾		3.35	%		3.79	%		4.37	%		4.69	%^⁽³⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			1.26	%^⁽³⁾		- -			- -			- -			- -
Ratio of net investment income to average net assets excluding voluntary expense waiver			3.22	%^⁽³⁾		- -			- -			- -			- -
Portfolio turnover rate			9	%		11	%		40	%		36	%		35	%^⁽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 fiscal year ended March 31, 2001.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal year ended March 31,									For the period from 8-8-00^⁽¹⁾ to
	9-30-04				2004			2003			2002			3-31-01

Net asset value, beginning of period		$	11.31		$	11.10		$	10.61		$	10.52		$	10.26

Income (loss) from investment operations:
Net investment income			0.16			0.28			0.33			0.32			0.22
Net realized and unrealized gain (loss) on investments			(0.02	)		0.21			0.49			0.09			0.26

Total from investment operations			0.14			0.49			0.82			0.41			0.48

Less distributions from:
Net investment income			(0.16	)		(0.28	)		(0.33	)		(0.32	)		(0.22	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.16	)		(0.28	)		(0.33	)		(0.32	)		(0.22	)

Net asset value, end of period		$	11.29		$	11.31		$	11.10		$	10.61		$	10.52

Total return			1.28	%		4.50	%		7.81	%		3.97	%		4.66	%
Net assets, end of period (in thousands)		$971			$863			$532			$120			$37
Ratio of expenses to average net assets including voluntary expense waiver			1.70	%^⁽²⁾		2.06	%		1.96	%		2.44	%		2.82	%^⁽²⁾
Ratio of net investment income to average net assets assets including voluntary expense waiver			2.79	%^⁽²⁾		2.54	%		2.98	%		3.09	%		3.11	%^⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			2.09	%^⁽²⁾		- -			- -			- -			- -
Ratio of net investment income to average net assets excluding voluntary expense waiver			2.40	%^⁽²⁾		- -			- -			- -			- -
Portfolio turnover rate			9	%		11	%		40	%		36	%		35	% ^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements

Financial Highlights
     IVY MUNICIPAL BOND FUND
      Class C Shares⁽¹⁾
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended March 31,
	9-30-04				2004			2003			2002			2001			2000

Net asset value, beginning of period		$	11.31		$	11.10		$	10.61		$	10.52		$	10.11		$	11.24

Income (loss) from investment operations:
Net investment income			0.15			0.28			0.32			0.37			0.40			0.42
Net realized and unrealized gain (loss) on investments			(0.01	)		0.21			0.49			0.09			0.41			(1.11	)

Total from investment operations			0.14			0.49			0.81			0.46			0.81			(0.69	)

Less distributions from:
Net investment income			(0.16	)		(0.28	)		(0.32	)		(0.37	)		(0.40	)		(0.42	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.02	)

Total distributions			(0.16	)		(0.28	)		(0.32	)		(0.37	)		(0.40	)		(0.44	)

Net asset value, end of period		$	11.29		$	11.31		$	11.10		$	10.61		$	10.52		$	10.11

Total return			1.27	%		4.45	%		7.75	%		4.40	%		8.22	%		- -6.21	%
Net assets, end of period (in millions)		$20			$20			$25			$24			$26			$28
Ratio of expenses to average net assets including voluntary expense waiver			1.73	%^⁽²⁾		2.10	%		2.03	%		2.13	%		2.13	%		1.98	%
Ratio of net investment income to average net assets including voluntary expense waiver			2.77	%^⁽²⁾		2.50	%		2.95	%		3.44	%		3.94	%		3.94	%
Ratio of expenses to average net assets excluding voluntary expense waiver			2.12	%^⁽²⁾		- -			- -			- -			- -			- -
Ratio of net investment income to average net assets excluding voluntary expense waiver			2.38	%^⁽²⁾		- -			- -			- -			- -			- -
Portfolio turnover rate			9	%		11	%		40	%		36	%		35	%		17	%

(1)See Note 5.

(2)Annualized.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-04				2004			2003			2002			2001			2000

Net asset value, beginning of period		$	11.31		$	11.10		$	10.61		$	10.52		$	10.11		$	11.24

Income (loss) from investment operations:
Net investment income			0.19			0.35			0.40			0.44			0.47			0.48
Net realized and unrealized gain (loss) on investments			(0.01	)		0.21			0.49			0.09			0.41			(1.11	)

Total from investment operations			0.18			0.56			0.89			0.53			0.88			(0.63	)

Less distributions from:
Net investment income			(0.20	)		(0.35	)		(0.40	)		(0.44	)		(0.47	)		(0.48	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.02	)

Total distributions			(0.20	)		(0.35	)		(0.40	)		(0.44	)		(0.47	)		(0.50	)

Net asset value, end of period		$	11.29		$	11.31		$	11.10		$	10.61		$	10.52		$	10.11

Total return			1.61	%		5.13	%		8.52	%		5.10	%		9.04	%		- -5.69	%
Net assets, end of period (in thousands)		$48			$5			$4			$2			$2			$2
Ratio of expenses to average net assets including voluntary expense waiver			1.06	%^⁽¹⁾		1.44	%		1.33	%		1.44	%		1.47	%		1.40	%
Ratio of net investment income to average net assets including voluntary expense waiver			3.47	%^⁽¹⁾		3.14	%		3.64	%		4.09	%		4.61	%		4.52	%
Ratio of expenses to average net assets excluding voluntary expense waiver			1.46	%^⁽¹⁾		- -			- -			- -			- -			- -
Ratio of net investment income to average net assets excluding voluntary expense waiver			3.07	%^⁽¹⁾		- -			- -			- -			- -			- -
Portfolio turnover rate			9	%		11	%		40	%		36	%		35	%		17	%

(1)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY SCIENCE AND TECHNOLOGY FUND

Portfolio Highlights

On September 30, 2004, Science and Technology Fund had net assets totaling $152,412,410 invested in a diversified portfolio of:


91.01%		Common Stocks
8.99%		Cash and Cash Equivalents

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


Health Care Stocks	$	32.31
Technology Stocks	$	29.27
Multi-Industry Stocks	$	11.01
Business Equipment and Services Stocks	$	9.77
Cash and Cash Equivalents	$	8.99
Miscellaneous Stocks	$	5.58
Consumer Durables Stocks	$	3.07


The Investments of Ivy Science and Technology Fund
*September 30, 2004*
COMMON STOCKS	Shares		Value


Broadcasting - 2.00%
XM Satellite Radio Holdings Inc., Class A*	98,100	$	3,044,043


Business Equipment and Services - 8.27%
CheckFree Corporation*	145,800		4,028,454
Euronet Worldwide, Inc.*	160,600		3,007,235
First Data Corporation	120,900		5,259,150
SI International, Inc.*	13,900		304,549

			12,599,388

Communications Equipment - 4.51%
Cisco Systems, Inc.*	70,600		1,274,683
Foundry Networks, Inc.*	52,700		500,386
NETGEAR, Inc.*	77,900		952,717
Nokia Corporation, Series A, ADR	126,200		1,731,464
Scientific-Atlanta, Inc.	93,200		2,415,744

			6,874,994

Computers - Micro - 1.55%
Dell Inc.*	66,300		2,356,965


Computers - Peripherals - 11.99%
Amdocs Limited*	116,990		2,553,892
Check Point Software Technologies Ltd.*	84,000		1,425,900
Computer Associates International, Inc.	58,600		1,541,180
EMC Corporation*	321,800		3,713,572
Hypercom Corporation*	119,900		884,862
Macromedia, Inc.*	32,500		652,438
Microsoft Corporation	121,700		3,364,397
Oracle Corporation*	101,100		1,141,925
Symbol Technologies, Inc.	237,515		3,002,190

			18,280,356

Consumer Electronics - 3.07%
Garmin Ltd.	108,200		4,679,109


Electronic Components - 11.22%
Amphenol Corporation, Class A*	64,200		2,199,492
Analog Devices, Inc.	32,700		1,268,106
Cherokee International Corporation*	70,200		578,448
Mediatek Incorporation	198,498		1,331,810
Microchip Technology Incorporated	143,800		3,853,121
Motorola, Inc.	87,300		1,574,892
Samsung Electronics Co., Ltd. (A)	13,100		5,210,421
United Microelectronics Corporation*	321,328		1,086,089

			17,102,379

Health Care - Drugs - 13.13%
Alcon, Inc.	81,450		6,532,290
Amgen Inc.*	46,400		2,635,288
Corgentech Inc.*	42,500		724,837
Forest Laboratories, Inc.*	48,800		2,195,024
Genzyme Corporation*	81,300		4,416,622
IVAX Corporation*	182,962		3,503,722

			20,007,783

Health Care - General - 5.41%
Advanced Medical Optics, Inc.*	34,400		1,361,208
Boston Scientific Corporation*	173,400		6,889,182

			8,250,390

Hospital Supply and Management - 13.77%
Anthem, Inc.*	17,700		1,544,325
Cerner Corporation*	159,700		6,917,405
Guidant Corporation	55,600		3,671,824
HCA Inc.	77,800		2,968,070
UnitedHealth Group Incorporated	52,800		3,893,472
WellCare Group, Inc.*	105,100		1,991,645

			20,986,741

Multiple Industry - 11.01%
AU Optronics Corp., ADR	46,700		584,684
Critical Therapeutics, Inc.*	93,600		549,432
Cytokinetics, Incorporated*	28,400		377,862
Radiation Therapy Services, Inc.*	62,000		715,480
Research In Motion Limited*	190,650		14,553,268

			16,780,726

Security and Commodity Brokers - 2.05%
Chicago Mercantile Exchange Holdings Inc.	19,400		3,129,220


Timesharing and Software - 1.50%
Alliance Data Systems Corporation*	56,400		2,287,584


Utilities - Telephone - 1.53%
NII Holdings, Inc. Class B*	27,750		1,144,826
Telesystem International Wireless Inc.*	125,000		1,181,250

			2,326,076


TOTAL COMMON STOCKS - 91.01%		$	138,705,754

(Cost: $120,203,117)


SHORT-TERM SECURITIES	Principal Amount in Thousands


Finance Companies - 1.97%
Deere (John) Capital Corporation,
1.84%, 10-19-04	$	3,000		2,997,240


Food and Related - 3.77%
Archer Daniels Midland Company,
1.77%, 10-5-04		3,362		3,361,339
ConAgra Foods, Inc.,
1.9%, 10-1-04		2,389		2,389,000

				5,750,339

Retail - General Merchandise - 1.96%
Wal-Mart Stores, Inc.,
1.75%, 10-26-04		3,000		2,996,354


Security and Commodity Brokers - 1.38%
Prudential Funding Corp.,
1.71%, 10-18-04		2,100		2,098,304


Utilities - Gas and Pipeline - 2.62%
Michigan Consolidated Gas Co.,
1.81%, 10-4-04		4,000		3,999,397


TOTAL SHORT-TERM SECURITIES - 11.70%			$	17,841,634

(Cost: $17,841,634)

TOTAL INVESTMENT SECURITIES - 102.71%			$	156,547,388

(Cost: $138,044,751)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (2.71%)				(4,134,978	)


NET ASSETS - 100.00%			$	152,412,410

Notes to Schedule of Investments
	*No dividends were paid during the preceding 12 months.
(A)	Listed on an exchange outside the United States.
	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 SCIENCE AND TECHNOLOGY FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (cost - $138,045) (Notes 1 and 3)	$	156,547
Cash denominated in foreign currencies (cost - $5)		5
Receivables:
Investment securities sold		4,017
Fund shares sold		516
Dividends and interest		51
Prepaid and other assets		27

Total assets		161,163

LIABILITIES
Payable for investment securities purchased		8,157
Payable to Fund shareholders		428
Accrued shareholder servicing (Note 2)		82
Due to custodian		7
Accrued accounting and administrative services fees (Note 2)		6
Accrued management fee (Note 2)		4
Accrued distribution fee (Note 2)		2
Accrued service fee (Note 2)		1
Other		64

Total liabilities		8,751

Total net assets	$	152,412

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	81
Additional paid-in capital		175,870
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(1,454	)
Accumulated undistributed net realized loss on investment transactions		(40,588	)
Net unrealized appreciation in value of investments		18,503

Net assets applicable to outstanding units of capital	$	152,412

Net asset value per share (net assets divided by shares outstanding):
Class A	$19.19
Class B	$18.31
Class C	$18.55
Class Y	$19.73
Capital shares outstanding:
Class A		2,195
Class B		594
Class C		4,472
Class Y		835
Capital shares authorized		400,000

See Notes to Financial Statements

Statement of Operations
      IVY SCIENCE AND TECHNOLOGY FUND
      For the Fiscal Year Ended September 30, 2004
      (In Thousands)

INVESTMENT LOSS
Income (Note 1B):
Dividends (net of foreign withholding taxes of $22)	$	192
Interest and amortization		67

Total income		259

Expenses (Note 2):
Investment management fee		615
Distribution fee:
Class A		9
Class B		40
Class C		319
Shareholder servicing:
Class A		84
Class B		47
Class C		229
Class Y		9
Service fee:
Class A		40
Class B		13
Class C		106
Class Y		13
Custodian fees		59
Accounting and administrative services fees		33
Legal fees		18
Audit fees		10
Other		56

Total expenses		1,700

Net investment loss		(1,441	)

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on securities		3,495
Realized net loss on foreign currency transactions		(3	)

Realized net gain on investments		3,492
Unrealized depreciation in value of investments during the period		(5,286	)

Net loss on investments		(1,794	)

Net decrease in net assets resulting from operations	$	(3,235	)

See Notes to Financial Statements

Statement of Changes in Net Assets
IVY SCIENCE AND TECHNOLOGY FUND
(In Thousands)

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

INCREASE IN NET ASSETS
Operations:
Net investment loss	$	(1,441	)	$	(2,412	)
Realized net gain (loss) on investments		3,492			(2,583	)
Unrealized appreciation (depreciation)		(5,286	)		41,698

Net increase (decrease) in net assets resulting from operations		(3,235	)		36,703

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

		- -			- -

Capital share transactions (Note 5)		10,399			16,811

Total increase		7,164			53,514
NET ASSETS
Beginning of period		145,248			91,734

End of period	$	152,412		$	145,248

Undistributed net investment loss	$	(1,454	)	$	(10	)

(1)See "Financial Highlights" on pages 149 - 152.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal year ended March 31,									For the period from 7-3-00^⁽¹⁾ to
	9-30-04				2004			2003			2002			3-31-01

Net asset value, beginning of period		$	19.55		$	14.17		$	18.19		$	17.93		$	34.91

Income (loss) from investment operations:
Net investment income (loss)			(0.18	)		(0.19	)		(0.32	)		(0.45	)		0.02
Net realized and unrealized gain (loss) on investments			(0.18	)		5.57			(3.70	)		0.73			(9.35	)

Total from investment operations			(0.36	)		5.38			(4.02	)		0.28			(9.33	)

Less distributions from capital gains			(0.00	)		(0.00	)		(0.00	)		(0.02	)		(7.65	)

Net asset value, end of period		$	19.19		$	19.55		$	14.17		$	18.19		$	17.93

Total return^⁽²⁾			- -1.84	%		37.97	%	- -22.10		%		1.56	%	- -31.95		%
Net assets, end of period (in millions)		$42			$36			$14			$12			$6
Ratio of expenses to average net assets			1.78	%^⁽³⁾		1.80	%		1.79	%		1.75	%		1.70	%^⁽³⁾
Ratio of net investment income (loss) to average net assets			- -1.42	%^⁽³⁾		- -1.35	%		- -0.92	%		- -0.76	%		0.26	%^⁽³⁾
Portfolio turnover rate			60	%		114	%		74	%		91	%		111	%^⁽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 fiscal year ended March 31, 2001.

See Notes to Financial Statements

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

	9-30-04				2004			2003			2002			3-31-01
	For the six months ended				For the fiscal year ended March 31,									For the period from 7-3-00^⁽¹⁾to

Net asset value, beginning of period		$	18.77		$	13.77		$	17.88		$	17.80		$	34.91

Income (loss) from investment operations:
Net investment loss			(0.23	)		(0.39	)		(0.34	)		(0.38	)		(0.06	)
Net realized and unrealized gain (loss) on investments			(0.23	)		5.39			(3.77	)		0.48			(9.40	)

Total from investment operations			(0.46	)		5.00			(4.11	)		0.10			(9.46	)

Less distributions from capital gains			(0.00	)		(0.00	)		(0.00	)		(0.02	)		(7.65	)

Net asset value, end of period		$	18.31		$	18.77		$	13.77		$	17.88		$	17.80

Total return			- -2.45	%		36.31	%	- -22.99		%		0.56	%	- -32.37		%
Net assets, end of period (in millions)		$11			$11			$4			$4			$3
Ratio of expenses to average net assets			3.01	%^⁽²⁾		3.06	%		3.00	%		2.75	%		2.53	%^⁽²⁾
Ratio of net investment loss to average net assets			- -2.66	%^⁽²⁾		- -2.60	%		- -2.12	%		- -1.73	%		- -0.55	%^⁽²⁾
Portfolio turnover rate			60	%		114	%		74	%		91	%		111	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements

Financial Highlights
     IVY SCIENCE AND TECHNOLOGY FUND
      Class C Shares⁽¹⁾
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended March 31,
	9-30-04				2004			2003			2002			2001			2000

Net asset value, beginning of period		$	18.98		$	13.88		$	17.97		$	17.83		$	45.03		$	17.45

Income (loss) from investment operations:
Net investment loss			(0.22	)		(0.38	)		(0.25	)		(0.24	)		(0.12	)		(0.95	)
Net realized and unrealized gain (loss) on investments			(0.21	)		5.48			(3.84	)		0.40		(19.43		)		28.77

Total from investment operations			(0.43	)		5.10			(4.09	)		0.16		(19.55		)		27.82

Less distributions from capital gains			(0.00	)		(0.00	)		(0.00	)		(0.02	)		(7.65	)		(0.24	)

Net asset value, end of period		$	18.55		$	18.98		$	13.88		$	17.97		$	17.83		$	45.03

Total return			- -2.27	%		36.74	%	- -22.76		%		0.89	%	- 47.49		%	159.75		%
Net assets, end of period (in millions)		$83			$89			$70			$112			$134			$283
Ratio of expenses to average net assets			2.63	%^⁽²⁾		2.66	%		2.67	%		2.45	%		2.27	%		2.20	%
Ratio of net investment loss to average net assets			- -2.27	%^⁽²⁾		- -2.15	%		- -1.77	%		- -1.40	%		- -0.44	%		- -1.68	%
Portfolio turnover rate			60	%		114	%		74	%		91	%		111	%		44	%

(1)See Note 5.

(2)Annualized.

See Notes to Financial Statements

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

	For the six months ended			For the fiscal year ended March 31,
	9-30-04			2004			2003			2002			2001			2000

Net asset value, beginning of period	$	20.07		$	14.51		$	18.54		$	18.21		$	45.36		$	17.65

Income (loss) from investment operations:
Net investment loss		(0.27	)		(0.15	)		(0.26	)		(0.51	)		(0.01	)		(6.09	)
Net realized and unrealized gain (loss) on investments		(0.07	)		5.71			(3.77	)		0.86		(19.49		)		34.04

Total from investment operations		(0.34	)		5.56			(4.03	)		0.35		(19.50		)		27.95

Less distributions from capital gains		(0.00	)		(0.00	)		(0.00	)		(0.02	)		(7.65	)		(0.24	)

Net asset value, end of period	$	19.73		$	20.07		$	14.51		$	18.54		$	18.21		$	45.36

Total return		- -1.69	%		38.32	%	- -21.74		%		1.92	%	- 47.00		%	158.67		%
Net assets, end of period (in millions)	$16			$9			$3			$3			$1			$2
Ratio of expenses to average net assets		1.49	%^⁽¹⁾		1.45	%		1.41	%		1.39	%		1.35	%		1.36	%
Ratio of net investment income (loss) to average net assets		- -1.14	%^⁽¹⁾		- -1.03	%		- -0.53	%		- -0.43	%		0.47	%		- -0.96	%
Portfolio turnover rate		60	%		114	%		74	%		91	%		111	%		44	%

(1)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY SMALL CAP GROWTH FUND

Portfolio Highlights

On September 30, 2004, Ivy Small Cap Growth Fund had net assets totaling $473,205,734 invested in a diversified portfolio of:


92.10%		Common Stocks and Warrants
7.90%		Cash and Cash Equivalents

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


Technology Stocks	$	22.19
Health Care Stocks	$	20.74
Business Equipment and Services Stocks	$	13.80
Cash and Cash Equivalents	$	7.90
Energy Stocks	$	6.63
Retail Stocks	$	5.93
Consumer Nondurables Stocks	$	5.91
Miscellaneous Stocks	$	5.21
Financial Services Stocks	$	4.69
Capital Goods Stocks	$	3.67
Consumer Services Stocks	$	3.33


The Investments of Ivy Small Cap Growth Fund
*September 30, 2004*
COMMON STOCKS AND WARRANTS	Shares		Value


Apparel - 2.05%
Quiksilver, Inc.*	381,000	$	9,685,020


Banks - 2.92%
City National Corporation	123,300		8,008,335
Southwest Bancorporation of Texas, Inc.	289,450		5,817,945

			13,826,280

Beverages - 1.04%
Mondavi (Robert) Corporation (The), Class A*	126,241		4,937,917


Broadcasting - 1.37%
Cox Radio, Inc., Class A*	277,860		4,145,671
Entercom Communications Corp.*	70,850		2,313,961

			6,459,632

Business Equipment and Services - 7.90%
Acxiom Corporation	261,900		6,216,196
CheckFree Corporation*	351,644		9,715,924
Entegris, Inc.*	19,880		165,899
Hewitt Associates, Inc., Class A*	167,950		4,443,957
MAXIMUS, Inc.*	53,550		1,542,775
Resources Connection, Inc.*	241,501		9,132,360
Sapient Corporation*	809,700		6,173,963

			37,391,074

Capital Equipment - 2.84%
Chicago Bridge & Iron Company N.V., NY Shares	222,600		6,675,774
Nordson Corporation	197,223		6,766,721

			13,442,495

Chemicals - Specialty - 1.64%
Minerals Technologies Inc.	131,750		7,754,805


Communications Equipment - 2.95%
ADTRAN, Inc.	209,750		4,760,276
Inter-Tel, Incorporated	326,050		7,062,243
Tekelec*	126,650		2,121,388

			13,943,907

Computers - Peripherals - 13.75%
Avid Technology, Inc.*	288,900		13,527,743
Cognex Corporation	306,000		8,018,730
Kronos Incorporated	217,900		9,661,686
Macromedia, Inc.*	401,000		8,050,075
MICROS Systems, Inc.*	174,300		8,725,458
National Instruments Corporation	310,850		9,417,201
Take-Two Interactive Software, Inc.*	233,250		7,663,429

			65,064,322

Cosmetics and Toiletries - 1.25%
NBTY, Inc.*	273,550		5,897,738


Electrical Equipment - 0.83%
Power-One, Inc.*	608,950		3,939,907


Electronic Components - 2.11%
FormFactor, Inc.*	242,850		4,702,790
Semtech Corporation*	274,950		5,272,166

			9,974,956

Electronic Instruments - 3.38%
APW Ltd., Warrants (A)*	19		0
FLIR Systems, Inc.*	152,200		8,905,983
WMS Industries Inc.*	275,700		7,082,733

			15,988,716

Finance Companies - 1.77%
Financial Federal Corporation*	223,250		8,367,410


Food and Related - 1.57%
J.M. Smucker Company (The)	167,600		7,443,116


Health Care - Drugs - 5.35%
Andrx Corporation*	257,600		5,753,496
Angiotech Pharmaceuticals, Inc.*	351,000		7,116,525
Martek Biosciences Corporation*	179,172		8,730,156
Taro Pharmaceutical Industries Ltd.*	158,900		3,711,904

			25,312,081

Health Care - General - 9.86%
Advanced Neuromodulation Systems, Inc.*	230,600		6,996,404
American Medical Systems Holdings, Inc.*	77,700		2,820,898
Hologic, Inc.*	224,400		4,312,968
Intuitive Surgical, Inc.*	147,550		3,662,191
Omnicare, Inc.	313,850		8,900,786
ResMed Inc.*	188,750		8,986,388
Schein (Henry), Inc.*	104,000		6,479,720
Wright Medical Group, Inc.*	178,700		4,491,625

			46,650,980

Hospital Supply and Management - 5.53%
Advisory Board Company (The)*	162,335		5,443,904
Cerner Corporation*	318,850		13,810,988
LabOne, Inc.*	178,260		5,231,931
Odyssey HealthCare, Inc.*	94,200		1,672,521

			26,159,344

Motor Vehicle Parts - 1.79%
Gentex Corporation	241,550		8,479,613


Multiple Industry - 0.43%
Cogent, Inc.*	46,400		846,800
Santarus, Inc.*	130,000		1,190,150

			2,036,950

Petroleum - Domestic - 1.01%
Western Gas Resources, Inc.	167,100		4,777,389


Petroleum - International - 3.37%
Newfield Exploration Company*	260,800		15,971,392


Petroleum - Services - 2.25%
Patterson-UTI Energy, Inc.	559,250		10,653,712


Publishing - 1.96%
Getty Images, Inc.*	167,894		9,284,538


Railroad - 1.35%
Kansas City Southern*	419,750		6,367,607


Restaurants - 2.91%
Panera Bread Company, Class A*	164,400		6,170,754
Sonic Corp.*	298,275		7,620,926

			13,791,680

Retail - Specialty Stores - 3.02%
Abercrombie & Fitch Co., Class A	213,700		6,731,550
O'Reilly Automotive, Inc.*	197,650		7,559,124

			14,290,674

Timesharing and Software - 5.90%
Digitas Inc.*	714,000		5,529,930
FactSet Research Systems, Inc.	301,050		14,510,610
MicroStrategy Incorporated, Class A*	191,918		7,872,476

			27,913,016


TOTAL COMMON STOCKS AND WARRANTS - 92.10%		$	435,806,271

(Cost: $370,718,400)

TOTAL SHORT-TERM SECURITIES - 7.56%		$	35,804,063

(Cost: $35,804,063)

TOTAL INVESTMENT SECURITIES - 99.66%		$	471,610,334

(Cost: $406,522,463)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.34%			1,595,400


NET ASSETS - 100.00%		$	473,205,734

Notes to Schedule of Investments
	*No dividends were paid during the preceding 12 months.
(A)	Security valued in good faith by the Valuation Committee of the Board of Directors. See Note 1 to financial statements.
	See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
	See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

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

ASSETS
Investment securities - at value (cost - $406,522) (Notes 1 and 3)	$	471,610
Receivables:
Investment securities sold		5,947
Fund shares sold		306
Dividends and interest		8
Prepaid and other assets		31

Total assets		477,902

LIABILITIES
Payable for investment securities purchased		2,325
Payable to Fund shareholders		2,000
Accrued shareholder servicing (Note 2)		154
Due to Custodian		61
Accrued accounting and administrative services fees (Note 2)		11
Accrued management fee (Note 2)		11
Accrued distribution fee (Note 2)		7
Accrued service fee (Note 2)		3
Other		124

Total liabilities		4,696

Total net assets	$	473,206

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	443
Additional paid-in capital		491,938
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(4,353	)
Accumulated undistributed net realized loss on investment transactions		(79,910	)
Net unrealized appreciation in value of investments		65,088

Net assets applicable to outstanding units of capital	$	473,206

Net asset value per share (net assets divided by shares outstanding):
Class A	$10.75
Class B	$10.28
Class C	$10.39
Class Y	$11.62
Capital shares outstanding:
Class A		5,720
Class B		1,224
Class C		28,274
Class Y		9,057
Capital shares authorized		400,000

See Notes to Financial Statements

Statement of Operations
      IVY SMALL CAP GROWTH FUND
      For the Fiscal Year Ended September 30, 2004
      (In Thousands)

INVESTMENT LOSS
Income (Note 1B):
Dividends	$	518
Interest and amortization		291

Total income		809

Expenses (Note 2):
Investment management fee		2,210
Distribution fee:
Class A		13
Class B		48
Class C		1,174
Shareholder servicing:
Class A		123
Class B		36
Class C		478
Class Y		86
Service fee:
Class A		91
Class B		16
Class C		391
Class Y		139
Accounting and administrative services fees		73
Legal fees		65
Custodian fees		18
Audit fees		16
Other		143

Total expenses		5,120

Net investment loss		(4,311	)

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
Realized net gain on investments		24,397
Unrealized depreciation in value of investments during the period		(50,579	)

Net loss on investments		(26,182	)

Net decrease in net assets resulting from operations	$	(30,493	)

See Notes to Financial Statements

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

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

INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss	$	(4,311	)	$	(8,396	)
Realized net gain on investments		24,397			14,860
Unrealized appreciation (depreciation)		(50,579	)		130,559

Net increase (decrease) in net assets resulting from operations		(30,493	)		137,023

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

		- -			- -

Capital share transactions (Note 5)		(59,301	)		83,571

Total increase (decrease)		(89,794	)		220,594
NET ASSETS
Beginning of period		563,000			342,406

End of period	$	473,206		$	563,000

Undistributed net investment loss	$	(4,353	)	$	(42	)

(1)See "Financial Highlights" on pages 161 - 164.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal year ended March 31,									For the period from 7-3-00^⁽¹⁾ to
	9-30-04				2004			2003			2002			3-31-01

Net asset value, beginning of period		$	11.36		$	8.25		$	10.59		$	9.43		$	19.64

Income (loss) from investment operations:
Net investment loss			(0.02	)		(0.08	)		(0.23	)		(0.59	)		(0.02	)
Net realized and unrealized gain (loss) on investments			(0.59	)		3.19			(2.11	)		1.75			(4.74	)

Total from investment operations			(0.61	)		3.11			(2.34	)		1.16			(4.76	)

Less distributions from capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(5.45	)

Net asset value, end of period		$	10.75		$	11.36		$	8.25		$	10.59		$	9.43

Total return^⁽²⁾			- -5.37	%		37.70	%	- -22.10		%		12.30	%	- -28.30		%
Net assets, end of period (in millions)		$61			$92			$20			$16			$4
Ratio of expenses to average net assets			1.51	%^⁽³⁾		1.48	%		1.54	%		1.39	%		1.49	%^⁽³⁾
Ratio of net investment loss to average net assets			- -1.21	%^⁽³⁾		- -1.21	%		- -1.22	%		- -0.93	%		- -0.39	%^⁽³⁾
Portfolio turnover rate			45	%		91	%		31	%		29	%		48	%^⁽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 fiscal year ended March 31, 2001.

See Notes to Financial Statements

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

	For the six months ended				For the fiscal year ended March 31,									For the period from 7-6-00^⁽¹⁾to
	9-30-04				2004			2003			2002			3-31-01


Net asset value, beginning of period		$	10.91		$	8.01		$	10.40		$	9.36		$	19.26

Income (loss) from investment operations:
Net investment loss			(0.12	)		(0.20	)		(0.21	)		(0.26	)		(0.06	)
Net realized and unrealized gain (loss) on investments			(0.51	)		3.10			(2.18	)		1.30			(4.39	)

Total from investment operations			(0.63	)		2.90			(2.39	)		1.04			(4.45	)

Less distributions from capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(5.45	)

Net asset value, end of period		$	10.28		$	10.91		$	8.01		$	10.40		$	9.36

Total return			- -5.78	%		36.21	%	- -22.98		%		11.11	%	- -27.29		%
Net assets, end of period (in millions)		$13			$13			$7			$8			$5
Ratio of expenses to average net assets			2.55	%^⁽²⁾		2.57	%		2.64	%		2.43	%		2.31	%^⁽²⁾
Ratio of net investment loss to average net assets			- -2.24	%^⁽²⁾		- -2.29	%		- -2.31	%		- -1.94	%		- -1.18	%^⁽²⁾
Portfolio turnover rate			45	%		91	%		31	%		29	%		48	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the fiscal year ended March 31, 2001.

See Notes to Financial Statements

Financial Highlights
     IVY SMALL CAP GROWTH FUND⁽¹⁾
      Class C Shares⁽²⁾
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended March 31,
	9-30-04				2004			2003			2002			2001			2000

Net asset value, beginning of period		$	11.02		$	8.07		$	10.44		$	9.38		$	21.64		$	14.74

Income (loss) from investment operations:
Net investment loss			(0.12	)		(0.21	)		(0.16	)		(0.16	)		(0.10	)		(0.18	)
Net realized and unrealized gain (loss) on investments			(0.51	)		3.16			(2.21	)		1.22			(6.71	)		10.22

Total from investment operations			(0.63	)		2.95			(2.37	)		1.06			(6.81	)		10.04

Less distributions from capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(5.45	)		(3.14	)

Net asset value, end of period		$	10.39		$	11.02		$	8.07		$	10.44		$	9.38		$	21.64

Total return			- -5.72	%		36.56	%	- -22.70		%		11.30	%	- -35.17		%		73.38	%
Net assets, end of period (in millions)		$294			$334			$273			$435			$459			$801
Ratio of expenses to average net assets			2.28	%^⁽³⁾		2.31	%		2.31	%		2.20	%		2.12	%		2.11	%
Ratio of net investment loss to average net assets			- -1.97	%^⁽³⁾		- -2.03	%		- -1.98	%		- -1.70	%		- -0.81	%		- -0.90	%
Portfolio turnover rate			45	%		91	%		31	%		29	%		48	%		82	%

(1)Small Cap Growth Fund (formerly Growth Fund) changed its name effective June 30, 2000.

(2)See Note 5.

(3)Annualized.

See Notes to Financial Statements

Financial Highlights
     IVY SMALL CAP GROWTH FUND⁽¹⁾
      Class Y Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended March 31,
	9-30-04				2004			2003			2002			2001			2000

Net asset value, beginning of period		$	12.26		$	8.89		$	11.39		$	10.14		$	22.65		$	15.21

Income (loss) from investment operations:
Net investment loss			(0.04	)		(0.10	)		(0.11	)		(0.34	)		(0.20	)		(0.15	)
Net realized and unrealized gain (loss) on investments			(0.60	)		3.47			(2.39	)		1.59			(6.86	)		10.73

Total from investment operations			(0.64	)		3.37			(2.50	)		1.25			(7.06	)		10.58

Less distributions from capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(5.45	)		(3.14	)

Net asset value, end of period		$	11.62		$	12.26		$	8.89		$	11.39		$	10.14		$	22.65

Total return			- -5.22	%		37.91	%	- -21.95		%		12.33	%	- -34.67		%		74.71	%
Net assets, end of period (in millions)		$105			$124			$42			$48			$21			$17
Ratio of expenses to average net assets			1.37	%^⁽²⁾		1.35	%		1.33	%		1.31	%		1.30	%		1.30	%
Ratio of net investment loss to average net assets			- -1.06	%^⁽²⁾		- -1.09	%		- -1.00	%		- -0.83	%		- -0.02	%		- -0.09	%
Portfolio turnover rate			45	%		91	%		31	%		29	%		48	%		82	%

(1)Small Cap Growth Fund (formerly Growth Fund) changed its name effective June 30, 2000.

(2)Annualized.

See Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY TAX-MANAGED EQUITY FUND

Portfolio Highlights

On September 30, 2004, Ivy Tax-Managed Equity Fund had net assets totaling $10,317,601 invested in a diversified portfolio of:


84.84%		Common Stocks
15.16%		Cash and Cash Equivalents

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


Health Care Stocks	$	25.00
Technology Stocks	$	16.45
Cash and Cash Equivalents	$	15.16
Energy Stocks	$	9.56
Financial Services Stocks	$	8.73
Multi-Industry Stocks	$	6.58
Retail Stocks	$	5.67
Business Equipment and Services Stocks	$	4.46
Consumer Services Stocks	$	2.87
Miscellaneous Stocks	$	2.77
Consumer Nondurables Stocks	$	2.75


The Investments of Ivy Tax-Managed Equity Fund
September 30, 2004
COMMON STOCKS		Shares			Value


Air Transportation - 0.85%
Southwest Airlines Co.			6,400	$	87,168


Aircraft - 2.31%
Lockheed Martin Corporation			2,100		117,138
United Technologies Corporation			1,300		121,394

					238,532

Aluminum - 0.98%
Alcoa Incorporated			3,000		100,770


Apparel - 1.15%
Coach, Inc.*			2,800		118,776


Banks - 0.85%
Citigroup Inc.			2,000		88,240


Broadcasting - 0.94%
Comcast Holdings Corporation, Class A*			700		19,764
Viacom Inc., Class B			2,300		77,188

					96,952

Capital Equipment - 0.94%
Deere & Company			1,500		96,825


Communications Equipment - 1.40%
Cisco Systems, Inc.*			8,000		144,440


Computers - Micro - 2.41%
Dell Inc.*			7,000		248,850


Computers - Peripherals - 5.64%
Lexmark International, Inc.*			1,600		134,416
Microsoft Corporation	11,400				315,153
SAP Aktiengesellschaft, ADR			3,400		132,430

					581,999

Electronic Components - 3.85%
Analog Devices, Inc.			1,500		58,170
Intel Corporation			7,000		140,280
Microchip Technology Incorporated			3,700		99,142
Texas Instruments Incorporated			4,700		100,016

					397,608

Electronic Instruments - 0.84%
KLA-Tencor Corporation*			2,100		87,097


Finance Companies - 0.92%
Fannie Mae			1,500		95,100


Health Care - Drugs - 17.50%
Allergan, Inc.			3,000		217,650
Amgen Inc.*			3,200		181,744
Barr Laboratories, Inc.*			3,600		149,148
Forest Laboratories, Inc.*			6,200		278,876
Genentech, Inc.*			4,000		209,680
Gilead Sciences, Inc.*			8,400		313,950
MedImmune, Inc.*			3,500		82,898
Neurocrine Biosciences, Inc.*			2,200		103,851
Pfizer Inc.			4,000		122,400
Teva Pharmaceutical Industries Limited, ADR			5,600		145,348

					1,805,545

Health Care - General - 5.97%
Boston Scientific Corporation*			4,600		182,758
St. Jude Medical, Inc.*			2,000		150,540
Wyeth			2,500		93,500
Zimmer Holdings, Inc.*			2,400		189,696

					616,494

Hospital Supply and Management - 1.53%
Caremark Rx, Inc.*			1,700		54,519
Guidant Corporation			700		46,228
HCA Inc.			1,500		57,225

					157,972

Hotels & Gaming - 0.87%
International Game Technology			2,500		89,875


Insurance - Property and Casualty - 0.89%
Berkshire Hathaway Inc., Class B*			32		91,872


Leisure Time Industry - 1.06%
Royal Caribbean Cruises Ltd.			2,500		109,000


Multiple Industry - 6.58%
3M Company			1,100		87,967
General Electric Company			8,500		285,430
Research In Motion Limited*			4,000		305,340

					678,737

Petroleum - International - 5.59%
Anadarko Petroleum Corporation			1,900		126,084
Apache Corporation			3,200		160,352
Burlington Resources Inc.			3,200		130,560
Exxon Mobil Corporation			3,300		159,489

					576,485

Petroleum - Services - 3.97%
Nabors Industries Ltd.*			2,000		94,700
Patterson-UTI Energy, Inc.			8,400		160,020
Schlumberger Limited			2,300		154,813

					409,533

Restaurants - 1.72%
Applebee's International, Inc.			2,800		70,868
P.F. Chang's China Bistro, Inc.*			2,200		106,700

					177,568

Retail - General Merchandise - 3.95%
Costco Wholesale Corporation			3,400		141,185
Wal-Mart Stores, Inc.			5,000		266,000

					407,185

Security and Commodity Brokers - 6.07%
Chicago Mercantile Exchange Holdings Inc.			1,900		306,470
Goldman Sachs Group, Inc. (The)			2,000		186,480
Merrill Lynch & Co., Inc.			700		34,804
Morgan Stanley			2,000		98,600

					626,354

Timesharing and Software - 4.46%
eBay Inc.*			5,000		459,825


Tobacco - 1.60%
Altria Group, Inc.			3,500		164,640


TOTAL COMMON STOCKS - 84.84%				$	8,753,442

(Cost: $7,549,819)



SHORT-TERM SECURITY - 15.55%	Principal Amount in Thousands

Repurchase Agreement
Merrill Lynch & Co., Inc., 1.7% Repurchase Agreement dated 9-30-04 to be repurchased at $1,604,076 on 10-1-04 (A)	$	1,604	$	1,604,000

(Cost: $1,604,000)

TOTAL INVESTMENT SECURITIES - 100.39%			$	10,357,442

(Cost: $9,153,819)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.39%)				(39,841	)


NET ASSETS - 100.00%			$	10,317,601

Notes to Schedule of Investments
	*No dividends were paid during the preceding 12 months.
(A)	Collateralized by $2,551,866 GNMA, 6.5% due 8-15-32; market value and accrued interest aggregate $2,712,279.
	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 TAX-MANAGED EQUITY FUND
      September 30, 2004
      (In Thousands, Except fot Per Share Amounts)

ASSETS
Investment securities - at value (Notes 1 and 3):
Securities (cost - $7,550)	$	8,753
Repurchase Agreement (cost - $1,604)		1,604

		10,357
Cash		1
Receivables:
Fund shares sold		123
Dividends and interest		6
Prepaid and other assets		25

Total assets		10,512

LIABILITIES
Payable for investment securities purchased		173
Payable to Fund shareholders		13
Accrued shareholder servicing (Note 2)		2
Accrued accounting and administrative services fees (Note 2)		1
Other		5

Total liabilities		194

Total net assets	$	10,318

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	14
Additional paid-in capital		12,046
Accumulated undistributed income (loss):
Accumulated undistributed net investment loss		(32	)
Accumulated undistributed net realized loss on investment transactions		(2,914	)
Net unrealized appreciation in value of investments		1,204

Net assets applicable to outstanding units of capital	$	10,318

Net asset value per share (net assets divided by shares outstanding):
Class A	$7.39
Class B	$7.08
Class C	$7.08
Class Y	$7.39
Capital shares outstanding:
Class A		1,039
Class B		127
Class C		228
Class Y		17
Capital shares authorized	350,000

See Notes to Financial Statements

Statement of Operations
     IVY TAX-MANAGED EQUITY FUND
      For the Fiscal Year Ended September 30, 2004
      (In Thousands)

INVESTMENT LOSS
Income (Note 1B):
Dividends	$	26
Interest and amortization		6

Total income		32

Expenses (Note 2):
Investment management fee		29
Registration fees		16
Audit fees		12
Service fee:
Class A		7
Class B		1
Class C		2
Class Y		- -	*
Shareholder servicing:
Class A		6
Class B		1
Class C		3
Distribution fee:
Class A		1
Class B		3
Class C		6
Custodian fees		2
Legal fees		2
Accounting and administrative services fee		1
Other		1

Total		93
Less voluntary waiver of investment management fee (Note 2)		(29	)

Total expenses		64

Net investment loss		(32	)

REALIZED AND UNREALIZED LOSS
ON INVESTMENTS (NOTES 1 AND 3)
Realized net loss on securities		(41	)
Realized net loss on written options		(1	)

Realized net loss on investments		(42	)
Unrealized depreciation in value of investments during the period		(93	)

Net loss on investments		(135	)

Net decrease in net assets resulting from operations	$	(167	)

*Not shown due to rounding.

See Notes to Financial Statements

Statement of Changes in Net Assets
IVY TAX-MANAGED EQUITY FUND
(In Thousands)

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

INCREASE IN NET ASSETS
Operations:
Net investment loss	$	(32	)	$	(76	)
Realized net gain (loss) on investments		(42	)		313
Unrealized appreciation (depreciation)		(93	)		1,288

Net increase (decrease) in net assets resulting from operations		(167	)		1,525

Capital share transactions (Note 5)		2,623			1,872

Total increase		2,456			3,397
NET ASSETS
Beginning of period		7,862			4,465

End of period	$	10,318		$	7,862

Undistributed net investment loss	$	(32	)	$	(-	)*

*Not shown due to rounding.

See Notes to Financial Statements

Financial Highlights
     IVY TAX-MANAGED EQUITY FUND
      Class A Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended March 31,											For the period from 6-30-00^⁽¹⁾ to
	9-30-04				2004				2003				2002			3-31-01

Net asset value, beginning of period		$	7.52		$	5.73			$	6.43			$	7.19		$	10.00

Income (loss) from investment operations:
Net investment income (loss)		(0.03		)	(0.06		)		(0.03		)		(0.08		)		0.00
Net realized and unrealized gain (loss) on investments		(0.10		)		1.85			(0.67		)		(0.68		)		(2.81	)

Total from investment operations		(0.13		)		1.79			(0.70		)		(0.76		)		(2.81	)

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

Total distributions		(0.00		)	(0.00		)		(0.00		)		(0.00		)		(0.00	)

Net asset value, end of period		$	7.39		$	7.52			$	5.73			$	6.43		$	7.19

Total return^⁽²⁾		- -1.73		%	31.24		%	- -10.89			%	- -10.57			%	- -28.10		%
Net assets, end of period (in millions)		$8			$6				$4				$4			$4
Ratio of expenses to average net assets including voluntary expense waiver			1.20	%^⁽³⁾		1.47	%			1.50	%			1.62	%		1.27	%^⁽³⁾
Ratio of net investment loss to average net assets including voluntary expense waiver		- -0.48		%^⁽³⁾	- -1.05		%		- -0.67		%		- -0.92		%		- -0.09	%^⁽³⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			1.85	%^⁽³⁾		2.12	%			2.15	%			2.17	%		1.80	%^⁽³⁾
Ratio of net investment loss to average net assets excluding voluntary expense waiver		- -1.13		%^⁽³⁾	- -1.70		%		- -1.32		%		- -1.46		%		- -0.62	%^⁽³⁾
Portfolio turnover rate			33	%		115	%			145	%			96	%		73	%

(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.

See Notes to Financial Statements

Financial Highlights
     IVY TAX-MANAGED EQUITY FUND
      Class B Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended				For the fiscal year ended March 31,											For the period from 7-13-00^⁽¹⁾to
	9-30-04				2004				2003				2002			3-31-01

Net asset value, beginning of period		$	7.26		$	5.58			$	6.31			$	7.12		$	10.06

Income (loss) from investment operations:
Net investment loss		(0.00		)	(0.09		)		(0.11		)		(0.13		)		(0.05	)
Net realized and unrealized gain (loss) on investments		(0.18		)		1.77			(0.62		)		(0.68		)		(2.89	)

Total from investment operations		(0.18		)		1.68			(0.73		)		(0.81		)		(2.94	)

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

Total distributions		(0.00		)	(0.00		)		(0.00		)		(0.00		)		(0.00	)

Net asset value, end of period		$	7.08		$	7.26			$	5.58			$	6.31		$	7.12

Total return		- -2.48		%	30.11		%	- -11.57			%	- -11.38			%	- -29.22		%
Net assets, end of period (in thousands)		$897			$538				$247				$358			$296
Ratio of expenses to average net assets including voluntary expense waiver			2.05	%^⁽²⁾		2.28	%			2.47	%			2.56	%		2.45	%^⁽²⁾
Ratio of net investment loss to average net assets including voluntary expense waiver		- -1.31		%^⁽²⁾	- -1.87		%		- -1.63		%		- -1.86		%		- -1.74	%^⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			2.70	%^⁽²⁾		2.93	%			3.12	%			3.42	%		3.48	%^⁽²⁾
Ratio of net investment loss to average net assets excluding voluntary expense waiver		- -1.96		%^⁽²⁾	- -2.52		%		- -2.28		%		- -2.71		%		- -2.77	%^⁽²⁾
Portfolio turnover rate			33	%		115	%			145	%			96	%		73	%

(1)Commencement of operations of the class.

(2)Annualized.

See Notes to Financial Statements

Financial Highlights
     IVY TAX-MANAGED EQUITY FUND
      Class C Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:

	For the six months ended					For the fiscal year ended March 31,											For the period from 7-6-00^⁽¹⁾ to
	9-30-04					2004				2003				2002			3-31-01

Net asset value, beginning of period		$	7.24			$	5.57			$	6.32			$	7.13		$	10.01

Income (loss) from investment operations:
Net investment loss		(0.01		)		(0.11		)		(0.12		)		(0.19		)		(0.06	)
Net realized and unrealized gain (loss) on investments		(0.15		)			1.78			(0.63		)		(0.62		)		(2.82	)

Total from investment operations		(0.16		)			1.67			(0.75		)		(0.81		)		(2.88	)

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

Total distributions		(0.00		)		(0.00		)		(0.00		)		(0.00		)		(0.00	)

Net asset value, end of period		$	7.08			$	7.24			$	5.57			$	6.32		$	7.13

Total return		- -2.21		%		29.98		%	- -11.87			%	- -11.36			%	- -28.77		%
Net assets, end of period (in thousands)	$1,617				$1,374					$685				$865			$2
Ratio of expenses to average net assets including voluntary expense waiver			2.15	%^⁽²⁾			2.46	%			2.64	%			2.76	%		2.35	%^⁽²⁾
Ratio of net investment loss to average net assets including voluntary expense waiver		- -1.45		%^⁽²⁾		- -2.05		%		- -1.81		%		- -2.07		%		- -1.52	%^⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			2.80	%^⁽²⁾			3.11	%			3.29	%			3.69	%		3.34	%^⁽²⁾
Ratio of net investment loss to average net assets excluding voluntary expense waiver		- -2.10		%^⁽²⁾		- -2.70		%		- -2.46		%		- -2.99		%		- -2.50	%^⁽²⁾
Portfolio turnover rate			33	%			115	%			145	%			96	%		73	%

(1)Commencement of operations of the class.

(2)Annualized.

See Notes to Financial Statements

Financial Highlights
     IVY TAX-MANAGED EQUITY FUND
      Class Y Shares
      For a Share of Capital Stock Outstanding Throughout Each Period:



Net asset value, beginning of period	$	7.33

Income (loss) from investment operations:
Net investment loss	(0.00		)
Net realized and unrealized gain on investments		0.06

Total from investment operations		0.06

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

Total distributions	(0.00		)

Net asset value, end of period	$	7.39

Total return	0.82		%
Net assets, end of period (in thousands)	$17
Ratio of expenses to average net assets including voluntary expense waiver		1.18	%^⁽²⁾
Ratio of net investment loss to average net assets including voluntary expense waiver	- -0.45		%^⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver		1.83	%^⁽²⁾
Ratio of net investment loss to average net assets excluding voluntary expense waiver	- -1.10		%^⁽²⁾
Portfolio turnover rate		33	%^⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the six months ended September 30, 2004.

See Notes to Financial Statements.

Notes to Financial Statements

September 30, 2004

Note 1 - Significant Accounting Policies

Ivy Funds, Inc. (formerly W&R Funds, Inc.) (the "Corporation") is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The Corporation issues twelve series of capital shares; each series represents ownership of a separate mutual 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 Corporation 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. Gold bullion is valued at the last settlement price for current delivery as calculated by the Commodity Exchange, Inc. as of the close of that exchange. Restricted securities and securities for which quotations are not readily available or are deemed not to be reliable because of significant events or circumsta nces identified between the closing of their principal markets and the closing of the New York Stock Exchange are valued as determined in good faith in accordance with procedures established by and under the general supervision of the Corporation's Board of Directors. Short-term debt securities are valued at amortized cost, which approximates market value. Short-term debt securities denominated in foreign currencies are valued at amortized cost in that currency.
B. Security transactions and related investment income - Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Securities gains and losses are calculated on the identified cost basis. Premium and discount on the purchase of bonds are amortized for both financial and tax reporting purposes over the remaining lives of the bonds. Dividend income is recorded on the ex-dividend date except that certain dividends from foreign securities are recorded as soon as the Fund is informed of the ex-dividend date. Interest income is recorded on the accrual basis. See Note 3 - Investment Securities Transactions.
C. Foreign currency translations - All assets and liabilities denominated in foreign currencies are translated into United States dollars daily. Purchases and sales of investment securities and accruals of income and expenses are translated at the rate of exchange prevailing on the date of the transaction. For assets and liabilities other than investments in securities, net realized and unrealized gains and losses from foreign currency translation arise from changes in currency exchange rates. The Corporation 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 Corporation's financial statements. Gains or losses are realized by the Corporation 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 Corporation uses forward contracts to attempt to reduce the overall risk of its investments.
E. Federal income taxes - It is the Corporation'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 Corporation 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 the applicable record date. Net investment income dividends and capital gains distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as deferral of wash sales and post-October losses, foreign currency transactions, net operating losses and expiring capital loss carryovers. G. Repurchase agreements - Repurchase agreements are collateralized by the value of the resold securities which, during the entire period of the agreement, remains at least equal to the value of the loan, including accrued interest thereon. The collateral for the repurchase agreement is held by the Trust's custodian bank.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

Note 2 - Investment Management and Payments to Affiliated Persons

Waddell & Reed Ivy Investment Company ("WRIICO"), a wholly owned subsidiary of Waddell & Reed Financial, Inc. ("WDR"), serves as the Corporation's investment manager. WRIICO provides advice and supervises investments for which services it is paid a fee. Prior to June 30, 2003, Waddell & Reed Investment Management Company (WRIMCO), a wholly owned subsidiary of Waddell & Reed, Inc. (W&R), served as the investment manager. On June 30, 2003, WRIMCO assigned the investment management agreement between it and the Corporation to WRIICO, an affiliated entity. The fee is payable by each Fund at the following annual rates:

Fund	Net Assets Breakpoints	Annual Rate

Ivy Asset Strategy Fund	Up to $1 Billion	..700%
	Over $1 Billion up to $2 Billion	..650%
	Over $2 Billion up to $3 Billion	..600%
	Over $3 Billion	..550%

Ivy Core Equity Fund	Up to $1 Billion	..700%
	Over $1 Billion up to $2 Billion	..650%
	Over $2 Billion up to $3 Billion	..600%
	Over $3 Billion	..550%

Ivy High Income Fund	Up to $500 Million	..625%
	Over $500 Million up to $1 Billion	..600%
	Over $1 Billion up to $1.5 Billion	..550%
	Over $1.5 Billion	..500%

Ivy International Growth Fund	Up to $1 Billion	..850%
	Over $1 Billion up to $2 Billion	..830%
	Over $2 Billion up to $3 Billion	..800%
	Over $3 Billion	..760%

Ivy Large Cap Growth Fund	Up to $1 Billion	..700%
	Over $1 Billion up to $2 Billion	..650%
	Over $2 Billion up to $3 Billion	..600%
	Over $3 Billion	..550%

Ivy Limited-Term Bond Fund	Up to $500 Million	..500%
	Over $500 Million up to $1 Billion	..450%
	Over $1 Billion up to $1.5 Billion	..400%
	Over $1.5 Billion	..350%

Ivy Mid Cap Growth Fund	Up to $1 Billion	..850%
	Over $1 Billion up to $2 Billion	..830%
	Over $2 Billion up to $3 Billion	..800%
	Over $3 Billion	..760%

Ivy Money Market Fund	All levels	..400%

Ivy Municipal Bond Fund	Up to $500 Million	..525%
	Over $500 Million up to $1 Billion	..500%
	Over $1 Billion up to $1.5 Billion	..450%
	Over $1.5 Billion	..400%

Ivy Science and Technology Fund	Up to $1 Billion	..850%
	Over $1 Billion up to $2 Billion	..830%
	Over $2 Billion up to $3 Billion	..800%
	Over $3 Billion	..760%

Ivy Small Cap Growth Fund	Up to $1 Billion	..850%
	Over $1 Billion up to $2 Billion	..830%
	Over $2 Billion up to $3 Billion	..800%
	Over $3 Billion	..760%

Ivy Tax-Managed Equity Fund	Up to $1 Billion	..650%
	Over $1 Billion up to $2 Billion	..600%
	Over $2 Billion up to $3 Billion	..550%
	Over $3 Billion	..500%

The fee is accrued and paid daily. However, WRIICO has agreed to waive a Fund's management fee on any day that the Fund's net assets are less than $25 million, subject to WRIICO's right to change or modify this waiver. During the period ended September 30, 2004, WRIICO voluntarily waived its fee as shown in the following table:

Ivy Municipal Bond Fund		$	48,335
Ivy Tax-Managed Equity Fund			29,018

The Corporation has an Accounting Services Agreement with Waddell & Reed Services Company ("WRSCO"), an indirect subsidiary of WDR. Under the agreement, WRSCO acts as the agent in providing bookkeeping and accounting services and assistance to the Corporation, including maintenance of Fund records, pricing of Fund shares, preparation of prospectuses for existing shareholders, preparation of proxy statements and certain shareholder reports. For these services, each of the Funds paid WRSCO a monthly fee of one-twelfth of the annual fee shown in the following table.



Average Net Asset Level (in millions)					Annual Fee Rate for Each Level

From	$	0 to	$	10		$	0
From	$	10 to	$	25		$	11,500
From	$	25 to	$	50		$	23,100
From	$	50 to	$	100		$	35,500
From	$	100 to	$	200		$	48,400
From	$	200 to	$	350		$	63,200
From	$	350 to	$	550		$	82,500
From	$	550 to	$	750		$	96,300
From	$	750 to	$	1,000		$	121,600
	$	1,000 and Over				$	148,500

In addition, for each class of shares in excess of one, each Fund pays the Agent a monthly per-class fee equal to 2.5% of the monthly accounting services base fee.

Each Fund also pays monthly a fee at the annual rate of 0.01% or one basis point for the first $1 billion of net assets with no fee charged for net assets in excess of $1 billion. This fee may be voluntarily waived until Fund net assets are at least $10 million.

Under the Shareholder Servicing Agreement between the Corporation and WRSCO, with respect to Class A, Class B and Class C shares, for each shareholder account that was in existence at any time during the prior month: Ivy Asset Strategy Fund pays a monthly fee of $1.5792; Ivy High Income Fund, Ivy Limited-Term Bond Fund and Ivy Municipal Bond Fund each pay a monthly fee of $1.6958; and Ivy Core Equity Fund, Ivy International Growth Fund, Ivy Large Cap Growth Fund, Ivy Mid Cap Growth Fund, Ivy Science and Technology Fund, Ivy Small Cap Growth Fund and Ivy Tax-Managed Equity Fund each pay a monthly fee of $1.5042. Ivy Money Market Fund pays a monthly fee of $1.75 for each shareholder account that was in existence at any time during the prior month plus, for Class A shareholder accounts, $0.75 for each shareholder check processed in the prior month. Ivy Limited-Term Bond Fund Class A, which also has check writing privileges, pays $0.75 for each shareholder check processed in the prior month. For Class Y shares, each Fund pays a monthly fee equal to one-twelfth of 0.15 of 1% of the average daily net assets of the class for the preceding month. Each Fund also reimburses WRSCO for certain out-of-pocket costs for all classes.

Prior to June 16, 2003, Waddell & Reed, Inc. ("W&R") served as underwriter for the Corporation's shares. On June 16, 2003, W&R assigned the underwriting agreement to Ivy Funds Distributor, Inc. ("IFDI"), a wholly-owned subsidiary of WRIICO. As principal underwriter for the Corporation's shares, IFDI receives sales commissions (which are not an expense of the Corporation) for Class A shares. A contingent deferred sales charge ("CDSC") may be assessed against a shareholder's redemption amount of Class B, Class C or certain Class A shares and is paid to IFDI. During the period ended September 30, 2004, IFDI received the following amounts in sales commissions and deferred sales charges:

			CDSC

			Class A		Class B		Class C

Ivy Asset Strategy Fund	$	98,884	$	- -	$	9,315	$	1,902
Ivy Core Equity Fund		55,571		- -		13,787		4,360
Ivy High Income Fund		131,238		- -		3,422		3,288
Ivy International Growth Fund		21,998		- -		4,243		821
Ivy Large Cap Growth Fund		239,527		- -		8,604		854
Ivy Limited-Term Bond Fund		81,835		- -		6,763		1,375
Ivy Mid Cap Growth Fund		117,430		- -		10,056		352
Ivy Money Market Fund		- -		- -		29,492		56
Ivy Municipal Bond Fund		13,021		- -		894		262
Ivy Science and Technology Fund		103,715		- -		11,582		3,050
Ivy Small Cap Growth Fund		143,546		- -		9,569		4,956
Ivy Tax-Managed Equity Fund		19,671		- -		1,539		31

With respect to Class A, Class B and Class C shares, IFDI pays sales commissions and all expenses in connection with the sale of the Corporation's shares, except for registration fees and related expenses. During the period ended September 30, 2004, the following amounts were paid:

Ivy Asset Strategy Fund	$	149,761
Ivy Core Equity Fund		99,899
Ivy High Income Fund		165,949
Ivy International Growth Fund		34,801
Ivy Large Cap Growth Fund		300,727
Ivy Limited-Term Bond Fund		105,999
Ivy Mid Cap Growth Fund		147,303
Ivy Money Market Fund		- -
Ivy Municipal Bond Fund		28,315
Ivy Science and Technology Fund		163,414
Ivy Small Cap Growth Fund		227,379
Ivy Tax-Managed Equity Fund		34,400

Under a Distribution and Service Plan for Class A shares adopted by the Corporation pursuant to Rule 12b-1 under the Investment Company Act of 1940, 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. The fee is to be paid to compensate IFDI for amounts it expends in connection with the distribution of the Class A shares and/or provision of personal services to Fund shareholders and/or maintenance of shareholder accounts.

Under the Distribution and Service Plan adopted by the Corporation for Class B shares and Class C shares, respectively, each Fund may pay IFDI a service fee not to exceed 0.25% and a distribution fee not to exceed 0.75% of a Fund's average annual net assets attributable to that class to compensate IFDI for its services in connection with the distribution of shares of that class and/or the service and/or maintenance of shareholder accounts of that class. The Class B Plan and the Class C Plan each permit IFDI to receive compensation, through the distribution fee and service fee, respectively, for its distribution activities for that class, which are similar to the distribution activities described with respect to the Class A Plan, and for its activities in providing personal services to shareholders of that class and/or maintaining shareholder accounts of that class, which are similar to the corresponding activities for which it is entitled to compensation under the Class A Plan. Under the Class Y Plan, each F und may pay IFDI a fee of up to 0.25%, on an annual basis, of the average daily net assets of the Fund's Class Y shares to compensate IFDI for, either directly or through third parties, distributing the Class Y shares of that Fund, providing personal service to Class Y shareholders and/or maintaining Class Y shareholder accounts.

In the current environment of low interest rates, IFDI has voluntarily agreed to reimburse sufficient expenses to any class of Ivy Money Market Fund in order to insure the yield of that class remains at or above 0.01%. As of September 30, 2004, the amount of fees (in thousands) reimbursed to Ivy Money Market Fund, by class, are as follows:

Class A	$	62
Class B		5
Class C		17

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 Large Cap Growth Fund, Class A			1.50%
Ivy Large Cap Growth Fund, Class C			2.25%
Ivy Large Cap Growth Fund, Class Y			1.20%
Ivy Mid Cap Growth Fund, Class A			1.65%
Ivy Mid Cap Growth Fund, Class C			2.35%
Ivy Mid Cap Growth Fund, Class Y			1.25%

As of September 30, 2004, the amount of fees (in thousands) reimbursed under these agreements, by class, are as follows:

Ivy Large Cap Growth Fund
Class A	$	30
Class C		4
Class Y		22
Ivy Mid Cap Growth Fund
Class A	$	41
Class C		10
Class Y		2

The Corporation paid Directors' fees of $67,730, which are included in other expenses.

Note 3 - Investment Securities Transactions

Investment securities transactions for the period ended September 30, 2004 are summarized as follows:

	Ivy Asset Strategy Fund		Ivy Core Equity Fund		Ivy High Income Fund

Purchases of investment securities, excluding short-term and U.S. government securities	$	48,386,518	$	44,430,257	$	22,352,424
Purchases of bullion		977,493		- -		- -
Purchases of U.S. government securities		592,507		- -		- -
Purchases of short-term securities		351,423,507		248,449,889		228,071,615
Purchases of options		876,806		- -		- -
Proceeds from maturities and sales of investment securities, excluding short-term and U.S. government securities		41,302,373		79,157,443		17,373,455
Proceeds from sales of bullion		1,048,575		- -		- -
Proceeds from maturities and sales of U.S. government securities		1,700,000		- -		- -
Proceeds from maturities and sales of short-term securities		350,123,462		247,623,604		225,629,404
Proceeds from options		916,392		39,724		- -


		Ivy International Growth Fund		Ivy Large Cap Growth Fund		Ivy Limited- Term Bond Fund

Purchases of investment securities, excluding short-term and U.S. government securities	$	24,387,778	$	117,460,087	$	2,937,981
Purchases of U.S. government securities		- -		- -		13,115,477
Purchases of short-term securities		253,478,720		247,769,565		161,540,233
Proceeds from maturities and sales of investment securities, excluding short-term and U.S. government securities		29,679,595		112,809,275		6,552,098
Proceeds from maturities and sales of U.S. government securities		- -		- -		3,068,949
Proceeds from maturities and sales of short-term securities		252,002,000		248,883,416		161,172,759

		Ivy Mid Cap Growth Fund		Ivy Municipal Bond Fund		Ivy Science and Technology Fund

Purchases of investment securities, excluding short-term and U.S. government securities	$	18,709,601	$	2,768,410	$	81,282,210
Purchases of U.S. government securities		- -		- -		- -
Purchases of short-term securities		311,163,487		42,379,134		408,296,293
Purchases of options		354,323		- -		- -
Proceeds from maturities and sales of investment securities, excluding short-term and U.S. government securities		10,705,184		2,191,306		80,920,080
Proceeds from maturities and sales of U.S. government securities		- -		- -		- -
Proceeds from maturities and sales of short-term securities		312,856,000		41,877,000		396,774,039
Proceeds from options		252,827		- -		- -

	Ivy Small Cap Growth Fund		Ivy Tax-Managed Equity Fund

Purchases of investment securities, excluding short-term and U.S. government securities	$	215,911,659	$	3,926,897
Purchases of short-term securities		966,588,887		119,535,198
Proceeds from maturities and sales of investment securities, excluding short-term and U.S. government securities		278,798,125		2,647,556
Proceeds from maturities and sales of short-term securities		971,527,687		118,065,937

For Federal income tax purposes, cost of investments owned at September 30, 2004 and the related unrealized appreciation (depreciation) were as follows:

	Cost		Appreciation		Depreciation

Ivy Asset Strategy Fund	$	73,604,970	$	6,913,068	$	633,883	$	6,279,185
Ivy Core Equity Fund		198,843,178		68,893,822		5,616,270		63,277,552
Ivy High Income Fund		58,099,739		3,099,831		643,314		2,456,517
Ivy International Growth Fund		57,490,993		10,721,427		1,774,999		8,946,428
Ivy Large Cap Growth Fund		127,819,756		17,692,983		1,795,318		15,897,665
Ivy Limited-Term Bond Fund		68,156,395		821,763		130,329		691,434
Ivy Mid Cap Growth Fund		64,846,979		18,593,153		2,564,652		16,028,501
Ivy Money Market Fund		48,828,113		- -		- -		- -
Ivy Municipal Bond Fund		24,976,290		1,125,019		18,628		1,106,391
Ivy Science and Technology Fund		138,120,807		23,093,573		4,666,992		18,426,581
Ivy Small Cap Growth Fund		406,522,463		85,172,877		20,085,006		65,087,871
Ivy Tax-Managed Equity Fund		9,167,830		1,439,535		249,923		1,189,612

NOTE 4 - Federal Income Tax Matters

For Federal income tax purposes, the Fund's distributed and undistributed earnings and profit for the fiscal year ended March 31, 2004 and the related Capital Loss Carryover and Post-October activity were as follows:

	Ivy Asset Strategy Fund		Ivy Core Equity Fund		Ivy High Income Fund

Net ordinary income	$	440,231	$	- -	$	2,763,449
Distributed ordinary income		291,111		- -		2,744,773
Undistributed ordinary income		178,363		- -		53,789

Realized long-term capital gains		705,308		- -		- -
Distributed long-term capital gains		- -		- -		- -
Undistributed long-term capital gains		- -		- -		-

Capital loss carryover		- -		- -		- -

Post-October losses deferred		- -		- -		- -

			Ivy Large Cap Growth Fund		Ivy Limited- Term Bond Fund

Net ordinary income	$	596,184	$	- -	$	1,770,254
Distributed ordinary income		- -		- -		1,776,136
Undistributed ordinary income		596,184		- -		18,832

Realized long-term capital gains		- -		- -		- -
Distributed long-term capital gains		- -		- -		- -
Undistributed long-term capital gains		- -		- -		-

Capital loss carryover		- -		697,963		- -

Post-October losses deferred		- -		- -		- -

	Ivy Mid Cap Growth Fund		Ivy Money Market Fund		Ivy Municipal Bond Fund

Net ordinary income	$	- -	$	117,772	$	697,921
Distributed ordinary income		- -		115,726		699,824
Undistributed ordinary income		- -		3,225		7,984

Realized long-term capital gains		- -		- -		- -
Distributed long-term capital gains		- -		- -		- -
Undistributed long-term capital gains		- -		- -		-

Capital loss carryover		949,121		- -		- -

Post-October losses deferred		- -		- -		- -

			Ivy Small Cap Growth Fund

Net ordinary income	$	-	$	-	$	-
Distributed ordinary income		- -		- -		- -
Undistributed ordinary income		- -		- -		- -

Realized long-term capital gains		- -		- -		- -
Distributed long-term capital gains		- -		- -		- -
Undistributed long-term capital gains		- -		- -		-

Capital loss carryover		398,136		4,914,132		-

Post-October losses deferred		3,098,656		- -		-

Internal Revenue Code regulations permit each Fund to defer into its next fiscal year net capital losses or net long-term capital losses incurred between each November 1 and the end of its fiscal year ("post-October losses").

Capital loss carryovers are available to offset future realized capital gain net income for Federal income tax purposes. The following shows the totals by year in which the capital loss carryovers will expire if not utilized.

	Ivy Core Equity Fund		Ivy High Income Fund		Ivy International Growth Fund		Ivy Large Cap Growth Fund

March 31, 2008	$	- -	$	- -	$	- -	$	1,248,351
March 31, 2009		9,081,397		2,151,588		2,037,316		11,368,220
March 31, 2010		24,707,301		1,271,702		30,977,184		9,290,552
March 31, 2011		34,598,073		1,182,962		19,867,500		4,727,341
March 31, 2012		- -		- -		- -		697,963

Total carryover	$	68,386,771	$	4,606,252	$	52,882,000	$	27,332,427

	Ivy Limited-Term Bond Fund			Ivy Mid Cap Growth Fund	Ivy Municipal Bond Fund		Ivy Science and Technology Fund

March 31, 2008	$	- -	$	- -	$	- -	$	1,283,191
March 31, 2009		48,397		24,758,168		278,317		1,113,450
March 31, 2010		- -		17,363,901		230,753		21,834,936
March 31, 2011		456,813		5,387,010		75,199		16,278,545
March 31, 2012		- -		949,121		- -		398,136

Total carryover	$	505,210	$	48,458,200	$	584,269	$	40,908,258

	Ivy Small Cap Growth Fund		Ivy Tax-Managed Equity Fund

March 31, 2008	$	7,487,458	$	- -
March 31, 2009		3,509,351		- -
March 31, 2010		62,608,681		1,843,804
March 31, 2011		25,225,254		1,005,096
March 31, 2012		4,914,132		- -

Total carryover	$	103,744,876	$	2,848,900

Ivy U.S. Blue Chip Fund was merged into Ivy Core Equity Fund as of June 16, 2003 (see Note 8) and Advantus Index 500 Fund was merged into Ivy Core Equity Fund as of December 8, 2003 (see Note 9). At the time of the mergers, Ivy U.S. Blue Chip Fund and Advantus Index 500 Fund had capital loss carryovers available to offset future gains of the Ivy Core Equity Fund. Ivy US Blue Chip Fund's carryovers are limited to $1,479,061 for each period ending from March 31, 2005 through 2011 plus any unused limitations from prior years.

Ivy Global Fund and Ivy International Small Companies Fund were merged into Ivy International Growth Fund as of June 16, 2003 (see Note 8). At the time of the merger, Ivy Global Fund and Ivy International Small Companies Fund had capital loss carryovers available to offset future gains of the Ivy International Growth Fund. These carryovers are limited to $181,724 and $225,739, respectively, for each period ending from March 31, 2005 through 2011 plus any unused limitations from prior years.

Advantus Horizon Fund was merged into Ivy Large Cap Growth Fund as of December 8, 2003 (see Note 9). At the time of the merger, Advantus Horizon Fund had capital loss carryovers available to offset future gains of the Ivy Large Cap Growth Fund. These carryovers are limited to $3,296,848 for the period ending March 31, 2005 and $1,383,732 for each period ending from March 31,2006 through 2010 plus any unused limitations from prior years and the amount of certain built-in gains realized, if any.

Ivy US Emerging Growth Fund was merged into Ivy Mid Cap Growth fund as of June 16, 2003 (see Note 8). At the time of the merger, Ivy Mid Cap Growth Fund had capital loss carryovers available to offset future gains. These carryovers are limited to $2,119,084 for the period ending March 31, 2005 and $1,182,294 for each period from March 31, 2006 through 2011 and $197,085 for the period ending March 31, 2012 plus any unused limitations from prior years.

Ivy Global Science & Technology Fund was merged into Ivy Science and Technology Fund as of June 16, 2003 (see Note 8). At the time of the merger, Ivy Global Science & Technology Fund had capital loss carryovers available to offset future gains of the Ivy Science and Technology Fund. These carryovers are limited to $741,602 for the period ending March 31, 2005 and $413,760 for each period ending from March 31, 2006 through 2011 plus any unused limitations from prior years.

Advantus Enterprise Fund was merged into Ivy Small Cap Growth Fund as of December 8, 2003 (see Note 9). At the time of the merger, Advantus Enterprise Fund had capital loss carryovers available to offset future gains of the Ivy Small Cap Growth Fund. These carryovers are limited to $2,719,520 for the period ending March 31, 2005 and $2,069,323 for each period ending from March 31, 2006 through 2010 and $564,364 for the period ending March 31, 2011 plus any unused limitations from prior years.

Note 5 - Multiclass Operations

Each Fund within the Corporation currently offers four classes of shares, Class A, Class B, Class C and Class Y (other than Money Market Fund which offers only Class A shares), each of which have equal rights as to assets and voting privileges. Ivy Money Market Fund Class B and Class C 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 Prospectus and the Statement of Additional Information for the Corporation.

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.

For Funds in existence on March 24, 2000, Class B shares were combined with Class C shares and were redesignated Class C shares on that date.

Transactions in capital stock for the fiscal period ended September 30, 2004 are summarized below. Amounts are in thousands.

				Ivy Core Equity Fund			Ivy High Income Fund

Shares issued from sale of shares:
Class A		489			540			1,027
Class B		158			194			135
Class C		238			587			265
Class Y		70			15			86
Shares issued from reinvestment of dividends:
Class A		8			- -			59
Class B		- -	*		- -			10
Class C		5			- -			68
Class Y		1			- -			37
Shares redeemed:
Class A		(229	)		(2,188	)		(421	)
Class B		(48	)		(250	)		(58	)
Class C		(410	)		(3,045	)		(368	)
Class Y		(21	)		(62	)		(22	)

Increase (decrease) in outstanding capital shares		261			(4,209	)		818


Value issued from sale of shares:
Class A	$	6,030		$	4,410		$	8,934
Class B		1,938			1,521			1,169
Class C		2,935			4,621			2,300
Class Y		864			128			753
Value issued from reinvestment of dividends:
Class A		97			- -			515
Class B		9			- -			86
Class C		59			- -			594
Class Y		11			- -			317
Value redeemed:
Class A	(2,817		)		(17,793	)	(3,654		)
Class B		(595	)		(1,965	)		(509	)
Class C	(5,028		)		(23,947	)	(3,193		)
Class Y		(264	)		(525	)		(190	)

Increase (decrease) in outstanding capital	$	3,239		$	(33,550	)	$	7,122

*Not shown due to rounding.

				Ivy Large Cap Growth Fund			Ivy Limited-Term Bond Fund

Shares issued from sale of shares:
Class A		127			2,300			1,486
Class B		34			338			162
Class C		147			311			206
Class Y		71			331			64
Shares issued from reinvestment of dividends:
Class A		- -			- -			46
Class B		- -			- -			5
Class C		- -			- -			18
Class Y		- -			- -			3
Shares redeemed:
Class A		(132	)		(2,323	)		(799	)
Class B		(61	)		(151	)		(79	)
Class C		(595	)		(256	)		(369	)
Class Y		(41	)		(971	)		(15	)

Increase (decrease) in outstanding capital shares		(450	)		(421	)		728


Value issued from sale of shares:
Class A	$	1,289		$	20,789		$	15,300
Class B		335			2,869			1,672
Class C		1,441			2,707			2,122
Class Y		783			2,965			657
Value issued from reinvestment of dividends:
Class A		- -			- -			473
Class B		- -			- -			50
Class C		- -			- -			185
Class Y		- -			- -			28
Value redeemed:
Class A		(1,336	)	(20,622		)		(8,220	)
Class B		(592	)		(1,263	)		(809	)
Class C		(5,799	)		(2,193	)		(3,803	)
Class Y		(450	)		(8,880	)		(148	)

Increase (decrease) in outstanding capital	$	(4,329	)	$	(3,628	)	$	7,507

				Ivy Money Market Fund			Ivy Municipal Bond Fund

Shares issued from sale of shares:
Class A		1,428			22,824			112
Class B		149			4,675			21
Class C		144			5,040			153
Class Y		32			N/A			4
Shares issued from reinvestment of dividends:
Class A		- -			85			6
Class B		- -			- -	*		1
Class C		- -			- -	*		22
Class Y		- -			N/A			- -	*
Shares redeemed:
Class A		(546	)	(25,811		)		(70	)
Class B		(254	)		(4,117	)		(12	)
Class C		(125	)		(5,968	)		(176	)
Class Y		(21	)		N/A			- -

Increase (decrease) in outstanding capital shares		807			(3,272	)		61


Value issued from sale of shares:
Class A	$	13,034		$	22,824		$	1,247
Class B		1,311			4,675			234
Class C		1,284			5,040			1,716
Class Y		296			N/A			42
Value issued from reinvestment of dividends:
Class A		- -			85			65
Class B		- -			- -	*		9
Class C		- -			- -	*		250
Class Y		- -			N/A			- -	*
Value redeemed:
Class A		(4,978	)	(25,811		)		(779	)
Class B		(2,235	)		(4,117	)		(134	)
Class C		(1,107	)		(5,968	)		(1,952	)
Class Y		(195	)		N/A			- -

Increase (decrease) in outstanding capital	$	7,410		$	(3,272	)	$	698

*Not shown due to rounding.


				Ivy Small Cap Growth Fund		Ivy Tax-Managed Equity Fund

Shares issued from sale of shares:
Class A		611			1,661			300
Class B		99			188			61
Class C		245			764			75
Class Y		479			921			17
Shares issued from reinvestment of dividends:
Class A		- -			- -			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -			- -
Shares redeemed:
Class A		(262	)		(4,090	)		(52	)
Class B		(68	)		(125	)		(9	)
Class C		(491	)		(2,782	)		(36	)
Class Y		(96	)		(1,985	)		- -

Increase (decrease) in outstanding capital shares		517			(5,448	)		356


Value issued from sale of shares:
Class A	$	11,733		$	18,254		$	2,229
Class B		1,805			2,004			438
Class C		4,534			8,161			529
Class Y		9,387			10,903			125
Value issued from reinvestment of dividends:
Class A		- -			- -			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -			- -
Value redeemed:
Class A		(4,953	)		(44,267	)		(384	)
Class B		(1,232	)		(1,292	)		(63	)
Class C		(9,005	)		(29,461	)		(251	)
Class Y		(1,870	)		(23,603	)		- -

Increase (decrease) in outstanding capital	$	10,399		$	(59,301	)	$	2,623

Transactions in capital stock for the fiscal year ended March 31, 2004 are summarized below. Amounts are in thousands.

				Ivy Core Equity Fund			Ivy High Income Fund

Shares issued from sale of shares:
Class A		1,053			5,603			1,618
Class B		390			1,371			258
Class C		619			2,100			966
Class Y		136			189			1,152
Shares issued in connection with mergers of Ivy US Blue Chip Fund and Advantus Index 500 Fund:
Class A		N/A			7,526			N/A
Class B		N/A			1,048			N/A
Class C		N/A			63			N/A
Class Y		N/A			69			N/A
Shares issued from reinvestment of dividends:
Class A		10			- -			71
Class B		1			- -			14
Class C		12			- -			139
Class Y		1			- -			75
Shares redeemed:
Class A		(537	)		(5,808	)		(428	)
Class B		(141	)		(1,567	)		(80	)
Class C		(1,359	)		(7,452	)		(807	)
Class Y		(86	)		(369	)		(583	)

Increase in outstanding capital shares		99			2,773			2,395


Value issued from sale of shares:
Class A	$	12,565		$	36,676		$	13,999
Class B		4,632			8,830			2,234
Class C		7,365			22,358			8,268
Class Y		1,644			1,361			9,619
Value issued in connection with mergers of Ivy US Blue Chip Fund and Advantus Index 500 Fund:
Class A		N/A			57,881			N/A
Class B		N/A			7,641			N/A
Class C		N/A			463			N/A
Class Y		N/A			533			N/A
Value issued from reinvestment of dividends:
Class A		118			- -			612
Class B		11			- -			117
Class C		145			- -			1,194
Class Y		13			- -			642
Value redeemed:
Class A		(6,418	)	(44,359		)		(3,657	)
Class B		(1,674	)	(11,548		)		(691	)
Class C	(16,033		)	(55,231		)		(6,938	)
Class Y		(1,009	)		(2,887	)		(4,980	)

Increase in outstanding capital	$	1,359		$	21,718		$	20,419

				Ivy Large Cap Growth Fund			Ivy Limited- Term Bond Fund

Shares issued from sale of shares:
Class A		4,008			3,672			2,509
Class B		361			433			357
Class C		578			895			600
Class Y		10,647			7,115			355
Shares issued in connection with merger of Advantus Horizon Fund:
Class A		N/A			3,201			N/A
Shares issued in connection with mergers of Ivy International Small Companies Fund and Ivy Global Fund:
Class A		648			N/A			N/A
Class B		272			N/A			N/A
Class C		109			N/A			N/A
Class Y		30			N/A			N/A
Shares issued from reinvestment of dividends:
Class A		- -			- -			103
Class B		- -			- -			10
Class C		- -			- -			46
Class Y		- -			- -			5
Shares redeemed:
Class A		(4,232	)		(1,581	)		(3,081	)
Class B		(411	)		(91	)		(336	)
Class C		(1,695	)		(251	)		(1,500	)
Class Y		(11,599	)		(858	)		(392	)

Increase (decrease) in outstanding capital shares		(1,284	)		12,535			(1,324	)


Value issued from sale of shares:
Class A	$	33,106		$	33,918		$	26,204
Class B		3,526			3,634			3,725
Class C		12,513			7,655			6,261
Class Y		89,992			62,609			3,720
Value issued in connection with merger of Advantus Horizon Fund:
Class A		N/A			29,203			N/A
Value issued in connection with merger of Ivy International Small Companies Fund and Ivy Global Fund:
Class A		5,646			N/A			N/A
Class B		2,298			N/A			N/A
Class C		928			N/A			N/A
Class Y		284			N/A			N/A
Value issued from reinvestment of dividends:
Class A		- -			- -			1,079
Class B		- -			- -			106
Class C		- -			- -			476
Class Y		- -			- -			50
Value redeemed:
Class A	(36,188		)		(13,747	)		(32,153	)
Class B		(3,580	)		(777	)		(3,509	)
Class C	(14,976		)		(2,196	)		(15,667	)
Class Y	(106,687		)		(7,961	)		(4,108	)

Increase (decrease) in outstanding capital	$	(13,138	)	$	112,338	$		(13,816	)

				Ivy Money Market Fund			Ivy Municipal Bond Fund

Shares issued from sale of shares:
Class A		4,450			29,888			390
Class B		1,514			4,918			44
Class C		912			10,784			85
Class Y		358			N/A			- -	*
Shares issued in connection with merger of Advantus Money Market Fund:
Class A		N/A			32,239			N/A
Shares issued in connection with merger of Ivy US Emerging Growth Fund:
Class A		2,114			N/A			N/A
Class B		1,208			N/A			N/A
Class C		160			N/A			N/A
Class Y		39			N/A			N/A
Shares issued from reinvestment of dividends:
Class A		- -			111			9
Class B		- -			- -	*		1
Class C		- -			2			45
Class Y		- -			N/A			- -	*
Shares redeemed:
Class A		(3,153	)	(27,380		)		(241	)
Class B		(1,628	)		(4,881	)		(17	)
Class C		(424	)	(14,717		)		(585	)
Class Y		(297	)		N/A			- -	*

Increase (decrease) in outstanding capital shares		5,253			30,964			(269	)

*Not shown due to rounding.

Value issued from sale of shares:
Class A	$	36,931		$	29,888		$	4,386
Class B		11,807			4,918			495
Class C		6,784			10,784			957
Class Y		2,216			N/A			1
Value issued in connection with merger of Advantus Money Market Fund:
Class A		N/A			32,239			N/A
Value issued in connection with merger of Ivy US Emerging Growth Fund:
Class A		16,592			N/A			N/A
Class B		9,204			N/A			N/A
Class C		1,230			N/A			N/A
Class Y		308			N/A			N/A
Value issued from reinvestment of dividends:
Class A		- -			111			96
Class B		- -			- -	*		11
Class C		- -			2			509
Class Y		- -			N/A			- -	*
Value redeemed:
Class A	(25,327		)	(27,380		)		(2,706	)
Class B	(12,667		)		(4,881	)		(190	)
Class C		(3,390	)	(14,717		)		(6,556	)
Class Y		(2,338	)		N/A			- -

Increase (decrease) in outstanding capital	$	41,350		$	30,964		$	(2,997	)

*Not shown due to rounding.

				Ivy Small Cap Growth Fund		Ivy Tax-Managed Equity Fund

Shares issued from sale of shares:
Class A		1,269			4,917			322
Class B		392			475			39
Class C		676			2,790			89
Class Y		552			11,693			- -
Shares issued in connection with merger of Advantus Enterprise Fund:
Class A		N/A			4,061			N/A
Shares issued in connection with merger of Ivy Global Science and Technology Fund:
Class A		287			N/A			N/A
Class B		245			N/A			N/A
Class C		56			N/A			N/A
Class Y		7			N/A			N/A
Shares issued from reinvestment of dividends:
Class A		- -			- -			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -			- -
Shares redeemed:
Class A		(720	)		(3,270	)		(147	)
Class B		(361	)		(184	)		(9	)
Class C		(1,077	)		(6,332	)		(22	)
Class Y		(328	)		(6,339	)		- -

Increase in outstanding capital shares		998			7,811			272


Value issued from sale of shares:
Class A	$	15,942		$	47,321		$	2,202
Class B		5,032			4,653			270
Class C		22,515			32,820			606
Class Y		5,915			125,087			- -
Value issued in connection with merger of Advantus Enterprise Fund:
Class A		N/A			43,667			N/A
Value issued in connection with merger of Ivy Global Science and Technology Fund:
Class A		4,548			N/A			N/A
Class B		3,771			N/A			N/A
Class C		860			N/A			N/A
Class Y		119			N/A			N/A
Value issued from reinvestment of dividends:
Class A		- -			- -			- -
Class B		- -			- -			- -
Class C		- -			- -			- -
Class Y		- -			- -			- -
Value redeemed:
Class A	(12,236		)		(32,941	)		(994	)
Class B		(5,784	)		(1,860	)		(62	)
Class C	(17,948		)		(62,826	)		(150	)
Class Y		(5,923	)		(72,350	)		- -

Increase in outstanding capital	$	16,811		$	83,571		$	1,872

Note 6 - Options

Options purchased by a Fund are accounted for in the same manner as marketable portfolio securities. The cost of portfolio securities acquired through the exercise of call options is increased by the premium paid to purchase the call. The proceeds from securities sold through the exercise of put options are decreased by the premium paid to purchase the put.

When the Fund writes (sells) an option, an amount equal to the premium received by the Fund is recorded as a liability. The amount of the liability is subsequently adjusted to reflect the current market value of the option written. The current market value of an option is the last sales price on the principal exchange on which the option is traded or, in the absence of transactions, the mean between the bid and asked prices or at a value supplied by a broker-dealer. When an option expires on its stipulated expiration date or the Fund enters into a closing purchase transaction, the Fund realizes a gain (or loss if the cost of a closing purchase transaction exceeds the premium received when the call option was sold) and the liability related to such option is extinguished. When a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether the Fund has realized a gain or loss. For each Fund, when a written put is exercised, the cost basis of the securities purchased by the Fund is reduced by the amount of the premium received.

For Ivy Asset Strategy Fund, transactions in call options written were as follows:

			Premiums Received

Outstanding at March 31, 2004	- -		$	-
Options written	2,610			482,233
Options terminated in closing purchase transactions	(2,327	)	(462,956		)
Options exercised	- -			- -
Options expired	- -			- -

Outstanding at September 30, 2004	283		$	19,277

For Ivy Core Equity Fund, transactions in call options written were as follows:

		Premiums Received

Outstanding at March 31, 2004	- -	$	-
Options written	539		39,724
Options terminated in closing purchase transactions	- -		- -
Options exercised	- -		- -
Options expired	- -		- -

Outstanding at September 30, 2004	539	$	39,724

For Ivy Mid Cap Growth Fund, transactions in call options written were as follows:

			Premiums Received

Outstanding at March 31, 2004	107		$	19,288
Options written	2,999			214,643
Options terminated in closing purchase transactions	(2,507	)	(187,568		)
Options exercised	(21	)		(3,300	)
Options expired	(131	)		(7,991	)

Outstanding at September 30, 2004	447		$	35,072

For Ivy Tax-Managed Equity Fund, transactions in call options written were as follows:

			Premiums Received

Outstanding at March 31, 2004	7		$	854
Options written	- -			- -
Options terminated in closing purchase transactions	(7	)	(854		)
Options exercised	- -			- -
Options expired	- -			- -

Outstanding at September 30, 2004	- -		$	- -

Note 7 - Futures

The Corporation may engage in buying and selling futures contracts. Upon entering into a futures contract, the Corporation is required to deposit, in a segregated account, an amount of cash or United States Treasury Bills equal to a varying specified percentage of the contract amount. This amount is known as the initial margin. Subsequent payments ("variation margins") are made or received by the Corporation 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 Corporation 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 Corporation uses futures to attempt to reduce the overall risk of its investments.

Note 8 - Acquisitions of Ivy Global Fund, Ivy Global Science and Technology Fund, Ivy International Small Companies Fund, Ivy US Blue Chip Fund and Ivy US Emerging Growth Fund

On June 16, 2003, Ivy Core Equity Fund acquired all the net assets of Ivy US Blue Chip Fund pursuant to a plan of reorganization approved by the shareholders of Ivy US Blue Chip Fund on June 10, 2003. The acquisition was accomplished by a tax-free exchange of 4,455,649 shares of Ivy Core Equity Fund (valued at $33,237,149) for the 4,314,763 shares of Ivy US Blue Chip Fund outstanding on June 16, 2003. Ivy US Blue Chip Fund had net assets of $33,237,149, including $3,400,840 of net unrealized appreciation in value of investments and $17,432,572 of accumulated net realized losses on investments, which were combined with those of Ivy Core Equity Fund. The aggregate net assets of Ivy Core Equity Fund and Ivy US Blue Chip Fund immediately before the acquisition were $243,451,378 and $33,237,149, respectively. The aggregate net assets of Ivy Core Equity Fund and Ivy US Blue Chip Fund immediately following the acquisition were $276,688,527 and $0, respectively.

On June 16, 2003, Ivy International Growth Fund acquired all the net assets of Ivy Global Fund pursuant to a plan of reorganization approved by the shareholders of Ivy Global Fund on June 10, 2003. The acquisition was accomplished by a tax-free exchange of 471,708 shares of Ivy International Growth Fund (valued at $4,084,583) for the 555,824 shares of Ivy Global Fund outstanding on June 16, 2003. Ivy Global Fund had net assets of $4,084,583, including $187,112 of net unrealized appreciation in value of investments and $3,440,525 of accumulated net realized losses on investments, which were combined with those of Ivy International Growth Fund. The aggregate net assets of Ivy International Growth Fund and Ivy Global Fund immediately before the acquisition were $75,960,531 and $4,084,583, respectively. The aggregate net assets of Ivy International Growth Fund and Ivy Global Fund immediately following the acquisition were $80,045,114 and $0, respectively.

On June 16, 2003, Ivy International Growth Fund acquired all the net assets of Ivy International Small Companies Fund pursuant to a plan of reorganization approved by the shareholders of Ivy International Small Companies Fund on June 12, 2003. The acquisition was accomplished by a tax-free exchange of 586,893 shares of Ivy International Growth Fund (valued at $5,072,637) for the 746,180 shares of Ivy International Small Companies Fund outstanding on June 16, 2003. Ivy International Small Companies Fund had net assets of $5,072,637, including $410,933 of net unrealized appreciation in value of investments and $11,716,558 of accumulated net realized losses on investments, which were combined with those of Ivy International Growth Fund. The aggregate net assets of Ivy International Growth Fund and Ivy International Small Companies Fund immediately before the acquisition were $75,960,531 and $5,072,637, respectively. The aggregate net assets of Ivy International Growth Fund and Ivy International Small Companies Fund immediately following the acquisition were $81,033,168 and $0, respectively.

On June 16, 2003, Ivy Science and Technology Fund acquired all the net assets of Ivy Global Science and Technology Fund pursuant to a plan of reorganization approved by the shareholders of Ivy Global Science and Technology Fund on June 10, 2003. The acquisition was accomplished by a tax-free exchange of 594,910 shares of Ivy Science and Technology Fund (valued at $9,297,885) for the 1,192,759 shares of Ivy Global Science and Technology Fund outstanding on June 16, 2003. Ivy Global Science and Technology Fund had net assets of $9,297,885, including $1,112,396 of net unrealized appreciation in value of investments and $48,964,829 of accumulated net realized losses on investments, which were combined with those of Ivy Science and Technology Fund. The aggregate net assets of Ivy Science and Technology Fund and Ivy Global Science and Technology Fund immediately before the acquisition were $102,611,502 and $9,297,885, respectively. The aggregate net assets of Ivy Science and Technology Fund and Ivy Global Science and Technology Fund immediately following the acquisition were $111,909,387 and $0, respectively.

On June 16, 2003, Ivy Mid Cap Growth Fund acquired all the net assets of Ivy US Emerging Growth Fund pursuant to a plan of reorganization approved by the shareholders of Ivy US Emerging Growth Fund on June 10, 2003. The acquisition was accomplished by a tax-free exchange of 3,520,272 shares of Ivy Mid Cap Growth Fund (valued at $27,334,380) for the 1,980,747 shares of Ivy US Emerging Growth Fund outstanding on June 16, 2003. Ivy US Emerging Growth Fund had net assets of $27,334,380, including $3,678,066 of net unrealized appreciation in value of investments and $41,518,711 of accumulated net realized losses on investments, which were combined with those of Ivy Mid Cap Growth Fund. The aggregate net assets of Ivy Mid Cap Growth Fund and Ivy US Emerging Growth Fund immediately before the acquisition were $26,567,950 and $27,334,380, respectively. The aggregate net assets of Ivy Mid Cap Growth Fund and Ivy US Emerging Growth Fund immediately following the acquisition were $53,902,330 and $0, respectively.

Note 9 - Acquisitions of Advantus Enterprise Fund, Advantus Horizon Fund, Advantus Index 500 Fund and Advantus Money Market Fund

On December 8, 2003, Ivy Core Equity Fund acquired all the net assets of Advantus Index 500 Fund pursuant to a plan of reorganization approved by the shareholders of Advantus Index 500 Fund on November 26, 2003. The acquisition was accomplished by a tax-free exchange of 4,249,982 shares of Ivy Core Equity Fund (valued at $33,280,493) for the 2,400,840 shares of Advantus Index 500 Fund outstanding on December 8, 2003. Advantus Index 500 Fund had net assets of $33,277,474, including $5,911,503 of net unrealized appreciation in value of investments and $6,876,798 of accumulated net realized losses on investments, which were combined with those of Ivy Core Equity Fund. The aggregate net assets of Ivy Core Equity Fund and Advantus Index 500 Fund immediately before the acquisition were $266,407,080 and $33,277,474, respectively. The aggregate net assets of Ivy Core Equity Fund and Advantus Index 500 Fund immediately following the acquisition were $299,687,573 and $0, respectively. Advantus Index 500 Fund Class A, B and C shares merged into Ivy Core Equity Fund Class A.

On December 8, 2003, Ivy Large Cap Growth Fund acquired all the net assets of Advantus Horizon Fund pursuant to a plan of reorganization approved by the shareholders of Advantus Horizon Fund on November 26, 2003. The acquisition was accomplished by a tax-free exchange of 3,201,030 shares of Ivy Large Cap Growth Fund (valued at $29,203,164) for the 2,185,881 shares of Advantus Horizon Fund outstanding on December 8, 2003. Advantus Horizon Fund had net assets of $29,192,654, including $6,087,063 of net unrealized appreciation in value of investments and $15,819,183 of accumulated net realized losses on investments, which were combined with those of Ivy Large Cap Growth Fund. The aggregate net assets of Ivy Large Cap Growth Fund and Advantus Horizon Fund immediately before the acquisition were $111,801,149 and $29,192,654, respectively. The aggregate net assets of Ivy Large Cap Growth Fund and Advantus Horizon Fund immediately following the acquisition were $141,004,313 and $0, respectively. Advantus Horizon Fu nd Class A, B and C shares merged into Ivy Large Cap Growth Fund Class A.

On December 8, 2003, Ivy Money Market Fund acquired all the net assets of Advantus Money Market Fund pursuant to a plan of reorganization approved by the shareholders of Advantus Money Market Fund on November 26, 2003. The acquisition was accomplished by a tax-free exchange of 32,238,877 shares of Ivy Money Market Fund (valued at $32,238,877) for the 32,238,877 shares of Advantus Money Market Fund outstanding on December 8, 2003. Advantus Money Market Fund had net assets of $32,238,877, including $0 of net unrealized appreciation in value of investments and $0 of accumulated net realized losses on investments, which were combined with those of Ivy Money Market Fund. The aggregate net assets of Ivy Money Market Fund and Advantus Money Market Fund immediately before the acquisition were $21,990,069 and $32,238,877, respectively. The aggregate net assets of Ivy Money Market Fund and Advantus Money Market Fund immediately following the acquisition were $54,228,946 and $0, respectively. Advantus Money Market Clas s A, B and C shares merged into Ivy Money Market Class A.

On December 8, 2003, Ivy Small Cap Growth Fund acquired all the net assets of Advantus Enterprise Fund pursuant to a plan of reorganization approved by the shareholders of Advantus Enterprise Fund on November 26, 2003. The acquisition was accomplished by a tax-free exchange of 4,061,128 shares of Ivy Small Cap Growth Fund (valued at $43,666,738) for the 4,672,306 shares of Advantus Enterprise Fund outstanding on December 8, 2003. Advantus Enterprise Fund had net assets of $43,656,594, including $6,463,903 of net unrealized appreciation in value of investments and $18,900,444 of accumulated net realized losses on investments, which were combined with those of Ivy Small Cap Growth Fund. The aggregate net assets of Ivy Small Cap Growth Fund and Advantus Enterprise Fund immediately before the acquisition were $524,433,879 and $43,656,594, respectively. The aggregate net assets of Ivy Small Cap Growth Fund and Advantus Enterprise Fund immediately following the acquisition were $568,100,617 and $0, respectively. A dvantus Enterprise Fund Class A, B and C shares merged into Ivy Small Cap Growth Fund Class A.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders,
Ivy Funds, Inc.:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Asset Strategy Fund, Core Equity Fund, High Income Fund, International Growth Fund, Large Cap Growth Fund, Limited-Term Bond Fund, Mid Cap Growth Fund, Money Market Fund, Municipal Bond Fund, Science and Technology Fund, Small Cap Growth Fund and Tax-Managed Equity Fund (collectively the "Funds") comprising Ivy Funds, Inc. as of September 30, 2004, and the related statements of operations for the six-month period then ended, the statements of changes in net assets for the six-month period then ended and the fiscal year ended March 31, 2004, and the financial highlights for the periods presented. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2004, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of each of the respective Funds comprising Ivy Funds, Inc., as of September 30, 2004, the results of their operations for the six-month period then ended, the changes in their net assets for the six-month period then ended and the fiscal year ended March 31, 2004 and their financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP
Kansas City, Missouri
November 16, 2004

Proxy Voting Information

Proxy Voting Guidelines

A description of the policies and procedures Ivy Funds, Inc. uses to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling 1.800.777.6472 and (ii) on the Securities and Exchange Commission's ("SEC") website at
http://www.sec.gov.

Proxy Voting Records

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

Quarterly Portfolio Schedule Information

Beginning with the quarter ending December 31, 2004, a complete schedule of portfolio holdings for the first and third quarters of each fiscal year will be filed with the SEC on the Fund's Form N-Q. Form N-Q may be obtained in the following ways:

* On the SEC's website at http://www.sec.gov.
* For review and copy at the SEC's Public Reference Room in Washington, DC. Information on the operations of the Public Reference Room may be obtained by callling 1.800.SEC.0330.
* On the Fund's website at http://www.ivyfunds.com.

To all Traditional IRA Planholders:

As required by law, we are hereby providing notice to you that income tax may be withheld automatically from any distribution or withdrawal from a traditional IRA. We will not withhold taxes unless you make a written election to have taxes withheld. The election may be made on the distribution/withdrawal form provided by Waddell & Reed, Inc. which can be obtained from your Waddell & Reed representative or by submitting Internal Revenue Service Form W-4P. Once made, an election can be revoked by providing written notice to Waddell & Reed, Inc. If you elect not to have tax withheld you may be required to make payments of estimated tax. Penalties may be imposed by the IRS if withholding and estimated tax payments are not adequate.

The statements of operations and statements of changes in net assets for Ivy Core Equity Fund, Ivy International Growth Fund, Ivy Mid Cap Growth Fund and Ivy Science and Technology Fund and Note 5 and Note 9 to the financial statements for the reporting period ended September 30, 2003 and contained in the shareholder reports for that period have been reclassified to reflect revised information. The reports sent to shareholders for the reporting periods thereafter, including this report, contain the revised information and amended filings have been submitted to conform to the current presentation. The changes to the report dated September 30, 2003 had no impact on the Funds or the Funds' total net assets.

THE IVY FUNDS FAMILY

Global/International Funds

Cundill Global Value Fund
European Opportunities Fund
International Fund
International Balanced Fund
International Growth Fund
International Value Fund
Pacific Opportunities Fund

Domestic Equity Funds

Core Equity Fund
Dividend Income Fund
Large Cap Growth Fund
Mid Cap Growth Fund
Small Cap Growth Fund
Small Cap Value Fund
Tax-Managed Equity Fund
Value Fund

Fixed Income Funds

Bond Fund
High Income Fund
Limited-Term Bond Fund
Mortgage Securities Fund
Municipal Bond Fund

Money Market Fund

Money Market Fund

Specialty Funds

Asset Strategy Fund
Balanced Fund
Global Natural Resources Fund
Real Estate Securities Fund
Science and Technology Fund

1.800.777.6472
Visit us online at www.ivyfunds.com

The Ivy Funds are managed by Waddell & Reed Ivy Investment Company and distributed by its subsidiary, Ivy Funds Distributor, Inc.

Waddell & Reed Financial, Inc., the ultimate parent company of Ivy Funds Distributor, Inc., acquired the investment adviser to the Ivy Funds in December 2002.

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

WRR3000SA (09-04)

ITEM 2. CODE OF ETHICS.

Required in annual report only.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Required in annual report only.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Required in annual report only.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS.

Provided in shareholder report.

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

Not applicable.

ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The Registrant has no such procedures.

ITEM 10. CONTROLS AND PROCEDURES.


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

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

ITEM 11. EXHIBITS.


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

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

Attached hereto as Exhibit 99.CERT.


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

Attached hereto as Exhibit 99.906CERT.

SIGNATURES

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

Ivy Funds, Inc.
(Registrant)


By	/s/Kristen A. Richards
	Kristen A. Richards, Vice President and Secretary

Date December 9, 2004

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


By	/s/Henry J. Herrmann
	Henry J. Herrmann, President and Principal Executive Officer

Date December 9, 2004


By	/s/Theodore W. Howard
	Theodore W. Howard, Treasurer and Principal Financial Officer

Date December 9, 2004

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

Semiannual Report

Ivy Asset Strategy Fund

Ivy Core Equity Fund

Ivy High Income Fund

Ivy International Growth Fund

Ivy Large Cap Growth Fund

Ivy Limited-Term Bond Fund

Ivy Mid Cap Growth Fund

Ivy Money Market Fund

Ivy Municipal Bond Fund

Ivy Science and Technology Fund

Ivy Small Cap Growth Fund

Ivy Tax-Managed Equity Fund

CONTENTS

President's Letter

Illustration of Fund Expenses

The Investments of Ivy Asset Strategy Fund

Statement of Assets and Liabilities

Statement of Operations

Statement of Changes in Net Assets

Financial Highlights

Financial Highlights

Financial Highlights

Financial Highlights

The Investments of Ivy Core Equity Fund

Statement of Assets and Liabilities

Statement of Operations

Statement of Changes in Net Assets

Financial Highlights

Financial Highlights

Financial Highlights

Financial Highlights

The Investments of Ivy High Income Fund

Statement of Assets and Liabilities

Statement of Operations

Statement of Changes in Net Assets

Financial Highlights

Financial Highlights

Financial Highlights

Financial Highlights

The Investments of Ivy International Growth Fund

Statement of Assets and Liabilities

Statement of Operations

Statement of Changes in Net Assets

Financial Highlights

Financial Highlights

Financial Highlights

Financial Highlights

The Investments of Ivy Large Cap Growth Fund

The Investments of Ivy Limited-Term Bond Fund

The Investments of Ivy Mid Cap Growth Fund

The Investments of Ivy Money Market Fund

The Investments of Ivy Municipal Bond Fund

The Investments of Ivy Science and Technology Fund

The Investments of Ivy Small Cap Growth Fund

The Investments of Ivy Tax-Managed Equity Fund

Notes to Financial Statements

Report of Independent Registered Public Accounting Firm

Global/International Funds

Domestic Equity Funds

Fixed Income Funds

Money Market Fund

Specialty Funds

1.800.777.6472Visit us online at www.ivyfunds.com

1.800.777.6472
Visit us online at www.ivyfunds.com