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

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-6569

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Ivy Funds, Inc.

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(Exact name of registrant as specified in charter)

6300 Lamar Avenue, Overland Park, Kansas 66202

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(Address of principal executive offices) (Zip code)

Kristen A. Richards

6300 Lamar Avenue

Overland Park, Kansas 66202

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(Name and address of agent for service)

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

Date of fiscal year end: March 31

Date of reporting period: September 30, 2008

ITEM 1. REPORTS TO STOCKHOLDERS.

Semiannual Report
September 30, 2008

Domestic Equity Funds
      Ivy Capital Appreciation Fund
      Ivy Core Equity Fund
      Ivy Large Cap Growth Fund
      Ivy Mid Cap Growth Fund
      Ivy Small Cap Growth Fund
Specialty Funds
      Ivy Asset Strategy Fund
      Ivy Energy Fund
      Ivy Science and Technology Fund
Fixed-Income Funds
      Ivy High Income Fund
      Ivy Limited-Term Bond Fund
      Ivy Money Market Fund
      Ivy Municipal Bond Fund

3	President's Letter
5	Illustration of Fund Expenses
12	Ivy Capital Appreciation Fund
29	Ivy Core Equity Fund
43	Ivy Large Cap Growth Fund
58	Ivy Mid Cap Growth Fund
74	Ivy Small Cap Growth Fund
89	Ivy Asset Strategy Fund
115	Ivy Energy Fund
129	Ivy Science and Technology Fund
147	Ivy High Income Fund
167	Ivy Limited-Term Bond Fund
185	Ivy Money Market Fund
198	Ivy Municipal Bond Fund
217	Notes to Financial Statements
253	Renewal of Investment Management Agreement
257	Proxy Voting Information
257	Quarterly Portfolio Schedule Information
258	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 in the Funds unless preceded or accompanied by a current Ivy Funds, Inc. prospectus and current performance information.

President's Letter
     September 30, 2008
DEAR SHAREHOLDER:

Not since the founding of our organization more than 70 years ago have investors faced so many challenges in such a short period of time. In a single calendar quarter, this country's largest savings and loan, its largest insurance company, its two largest mortgage providers, its largest brokerage firm and a leading commercial bank were the subject of a takeover, bailout or failure. On top of that, some money market funds in the industry have been unable to maintain a $1 a share net asset value. A severe credit crunch has taken hold.

Confidence has been shaken in bond and stock markets around the globe, and mutual fund returns of the past year reflect the emotional insecurity that comes with hard times. Enclosed is our report on your Ivy Fund(s) operations for the first six months of the current fiscal year. For the six months ended Sept. 30, 2008, the S&P 500 Index fell 11.3 percent, with most of the drop occurring in September. September was also the worst month for U.S. corporate bonds in more than two decades.

Can we learn from history?

While unusual in modern times, a rapidly unfolding financial panic is nothing new in American history. In fact, prior to the creation of the Federal Reserve bank system in 1912, the U.S. experienced seven major financial crises between 1819 and 1907. In some respects, some of the same issues that plague us today - fallout from excessive commodity and property speculation, war-related debt and populist dislike of government bailouts - parallel the challenges that generations past have had to deal with. Our leaders met these problems successfully, though very often not promptly.

For example, history judged President Martin Van Buren harshly for failing to take timely steps to limit economic damage from the Panic of 1837, which occurred just five weeks after he took office. The ensuing depression lasted for six years, and out of 850 banks in the United States at the time, 343 closed entirely and 62 failed partially. We hope Washington can learn from the many lessons of history and take appropriate and rapid action to revive credit markets and restore investor faith.

A need for global leadership

We believe that today's U.S. government safety nets and financial safeguards - including the Fed, deposit insurance on bank accounts, unemployment insurance, municipal bond default insurance and social security - are likely to help cushion the effects of the economic downturn that our country appears to face in the coming months. However, the scope of the current financial crisis is global, and this is a new phenomenon. It is one that we think may require coordinated central bank and fiscal policy action from Brussels to Beijing to resolve. It will likely test whether we are becoming one world that can act together for the common good, or one where national trade supremacy, resource hoarding and/or parochial political interests take precedence.

Economic Snapshot
	9-30-2008			3-31-2008
U.S. unemployment rate		6.10	%		5.10	%
Inflation (U.S. Consumer Price Index)		4.90	%		4.00	%
U.S. GDP		-0.30	%		0.60	%
30-year fixed mortgage rate		5.82	%		5.63	%
Oil price per barrel	$	100.64		$	101.58

Sources: Bloomberg, U.S. Department of Labor

All government statistics shown are subject to periodic revision.

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

For many people it is more difficult to buy a home or expand a consumer-focused business than it was just a year ago. As shown in the Economic Snapshot table to the left, the U.S. economy at Sept. 30, 2008 is not in as good a shape as it was six months earlier. The unemployment rate is higher. The economy has contracted.

We believe that the investing and economic climate will get better in time, although not right away. With perseverance, initiative and ingenuity, we believe the strengths of our nation's character will surface and prosperity will be restored. In this uncertain environment, we believe a very strong effort to manage risk is paramount. With that approach in mind, we will strive to earn your continued confidence for many years to come.

Respectfully,

Henry J. Herrmann, CFA
President

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

Illustration of Fund Expenses

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, redemption fees and exchange fees; and (2) ongoing costs, including management fees, distribution and service fees, and other Fund expenses. The following tables are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Each 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, 2008.

Actual Expenses

The first line for each share class in the following tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, a $7,500 account value divided by $1,000 = 7.5), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. There may be additional fees charged to holders of certain accounts that are not included in the expenses shown in the tables. These fees apply to Individual Retirement Accounts (IRAs), IRA Rollovers, Roth IRAs, Conversion Roth IRAs, Simplified Employee Pension (SEP), Simple IRAs, Tax-Sheltered Accounts (TSAs), Keogh Plans, Owner Only 401(k) (Exclusive K) Plans and Final Pay Plans. As of the close of the six months covered by the tables, a customer is charged an annual fee of $15 within each plan type. This fee is waived for IRA Rollovers and Conversion Roth IRAs if the customer owns another type of IRA. Coverdell Education Savings Account plans are charged an annual fee of $10 per customer. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value as such additional expenses are not reflected in the information provided in the expense tables. Additional fees have the effect of reducing investment returns.

Hypothetical Example for Comparison Purposes

The second line for each share class in the following tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of five percent 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 five percent hypothetical example with the five percent hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees or exchange fees. Therefore, the second line of each share class in the tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Ivy Capital Appreciation Fund Expenses
For the Six Months Ended       September 30, 2008	Beginning Account Value 3-31-08		Ending Account Value 9-30-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	856.80		1.20	%	$	5.57
Class B		1,000		851.90		2.13			9.91
Class C		1,000		854.30		1.89			8.81
Class E		1,000		856.70		1.28			5.94
Class I		1,000		858.30		0.88			4.09
Class Y		1,000		857.10		1.14			5.29
Based on 5% Return(2)
Class A	$	1,000	$	1,019.07		1.20	%	$	6.06
Class B		1,000		1,014.37		2.13			10.78
Class C		1,000		1,015.57		1.89			9.57
Class E		1,000		1,018.67		1.28			6.46
Class I		1,000		1,020.67		0.88			4.45
Class Y		1,000		1,019.37		1.14			5.76

See footnotes on page 11.

Ivy Core Equity Fund Expenses
For the Six Months Ended       September 30, 2008	Beginning Account Value 3-31-08		Ending Account Value 9-30-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	916.40		1.44	%	$	6.90
Class B		1,000		912.00		2.41			11.57
Class C		1,000		911.90		2.17			10.42
Class E		1,000		914.20		1.74			8.33
Class I		1,000		918.40		0.96			4.60
Class Y		1,000		917.30		1.24			5.94
Based on 5% Return(2)
Class A	$	1,000	$	1,017.87		1.44	%	$	7.26
Class B		1,000		1,012.97		2.41			12.18
Class C		1,000		1,014.17		2.17			10.98
Class E		1,000		1,016.37		1.74			8.77
Class I		1,000		1,020.27		0.96			4.85
Class Y		1,000		1,018.87		1.24			6.26

Ivy Large Cap Growth Fund Expenses
For the Six Months Ended       September 30, 2008	Beginning Account Value 3-31-08		Ending Account Value 9-30-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	880.80		1.16	%	$	5.45
Class B		1,000		875.60		2.41			11.35
Class C		1,000		877.50		2.05			9.67
Class E		1,000		881.50		1.16			5.46
Class I		1,000		881.90		0.94			4.42
Class R		1,000		879.20		1.48			6.95
Class Y		1,000		880.90		1.06			4.98
Based on 5% Return(2)
Class A	$	1,000	$	1,019.27		1.16	%	$	5.86
Class B		1,000		1,012.97		2.41			12.18
Class C		1,000		1,014.77		2.05			10.38
Class E		1,000		1,019.27		1.16			5.86
Class I		1,000		1,020.37		0.94			4.75
Class R		1,000		1,017.67		1.48			7.47
Class Y		1,000		1,019.77		1.06			5.35

Ivy Mid Cap Growth Fund Expenses
For the Six Months Ended       September 30, 2008	Beginning Account Value 3-31-08		Ending Account Value 9-30-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	905.20		1.56	%	$	7.43
Class B		1,000		899.90		2.75			13.11
Class C		1,000		902.40		2.35			11.22
Class E		1,000		901.40		2.29			10.93
Class I		1,000		907.40		1.16			5.53
Class R		1,000		904.90		1.72			8.19
Class Y		1,000		906.70		1.26			6.01
Based on 5% Return(2)
Class A	$	1,000	$	1,017.27		1.56	%	$	7.87
Class B		1,000		1,011.27		2.75			13.88
Class C		1,000		1,013.27		2.35			11.88
Class E		1,000		1,013.57		2.29			11.58
Class I		1,000		1,019.27		1.16			5.86
Class R		1,000		1,016.47		1.72			8.67
Class Y		1,000		1,018.77		1.26			6.36

Ivy Small Cap Growth Fund Expenses
For the Six Months Ended       September 30, 2008	Beginning Account Value 3-31-08		Ending Account Value 9-30-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	918.50		1.64	%	$	7.87
Class B		1,000		913.70		2.63			12.63
Class C		1,000		914.80		2.29			11.01
Class E		1,000		915.40		2.15			10.34
Class I		1,000		920.70		1.08			5.19
Class R		1,000		918.40		1.64			7.87
Class Y		1,000		919.30		1.34			6.43
Based on 5% Return(2)
Class A	$	1,000	$	1,016.87		1.64	%	$	8.27
Class B		1,000		1,011.87		2.63			13.28
Class C		1,000		1,013.57		2.29			11.58
Class E		1,000		1,014.27		2.15			10.88
Class I		1,000		1,019.67		1.08			5.45
Class R		1,000		1,016.87		1.64			8.27
Class Y		1,000		1,018.37		1.34			6.76

Ivy Asset Strategy Fund Expenses
For the Six Months Ended       September 30, 2008	Beginning Account Value 3-31-08		Ending Account Value 9-30-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	833.60		1.02	%	$	4.68
Class B		1,000		829.90		1.85			8.51
Class C		1,000		830.40		1.78			8.15
Class E		1,000		832.20		1.26			5.77
Class I		1,000		834.50		0.80			3.67
Class R**		1,000		842.90		1.30			2.03
Class Y		1,000		833.30		1.06			4.86
Based on 5% Return(2)
Class A	$	1,000	$	1,019.97		1.02	%	$	5.15
Class B		1,000		1,015.77		1.85			9.37
Class C		1,000		1,016.17		1.78			8.97
Class E		1,000		1,018.77		1.26			6.36
Class I		1,000		1,021.07		0.80			4.04
Class R**		1,000		1,018.57		1.30			6.56
Class Y		1,000		1,019.77		1.06			5.35

Ivy Energy Fund Expenses
For the Six Months Ended       September 30, 2008	Beginning Account Value 3-31-08		Ending Account Value 9-30-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	823.00		1.60	%	$	7.29
Class B		1,000		818.80		2.57			11.73
Class C		1,000		819.20		2.45			11.19
Class E***		1,000		823.30		1.44			6.56
Class I		1,000		824.30		1.36			6.20
Class Y		1,000		822.30		1.60			7.29
Based on 5% Return(2)
Class A	$	1,000	$	1,017.07		1.60	%	$	8.07
Class B		1,000		1,012.17		2.57			12.98
Class C		1,000		1,012.77		2.45			12.38
Class E***		1,000		1,017.87		1.44			7.26
Class I		1,000		1,018.27		1.36			6.86
Class Y		1,000		1,017.07		1.60			8.07

Ivy Science and Technology Fund Expenses
For the Six Months Ended       September 30, 2008	Beginning Account Value 3-31-08		Ending Account Value 9-30-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	922.50		1.48	%	$	7.11
Class B		1,000		917.80		2.49			11.99
Class C		1,000		918.70		2.27			10.94
Class E		1,000		919.70		2.07			9.98
Class I		1,000		924.40		1.08			5.20
Class R		1,000		922.00		1.62			7.78
Class Y		1,000		923.10		1.34			6.44
Based on 5% Return(2)
Class A	$	1,000	$	1,017.67		1.48	%	$	7.47
Class B		1,000		1,012.57		2.49			12.58
Class C		1,000		1,013.67		2.27			11.48
Class E		1,000		1,014.67		2.07			10.48
Class I		1,000		1,019.67		1.08			5.45
Class R		1,000		1,016.97		1.62			8.17
Class Y		1,000		1,018.37		1.34			6.76

Ivy High Income Fund Expenses
For the Six Months Ended       September 30, 2008	Beginning Account Value 3-31-08		Ending Account Value 9-30-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	978.20		1.38	%	$	6.82
Class B		1,000		973.00		2.47			12.23
Class C		1,000		974.00		2.23			11.05
Class E		1,000		976.60		1.85			9.19
Class I		1,000		980.90		0.90			4.46
Class Y		1,000		978.70		1.18			5.84
Based on 5% Return(2)
Class A	$	1,000	$	1,018.17		1.38	%	$	6.96
Class B		1,000		1,012.67		2.47			12.48
Class C		1,000		1,013.87		2.23			11.28
Class E		1,000		1,015.77		1.85			9.37
Class I		1,000		1,020.57		0.90			4.55
Class Y		1,000		1,019.17		1.18			5.96

Ivy Limited-Term Bond Fund Expenses
For the Six Months Ended       September 30, 2008	Beginning Account Value 3-31-08		Ending Account Value 9-30-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	1,002.20		1.06	%	$	5.31
Class B		1,000		998.00		1.87			9.39
Class C		1,000		998.20		1.84			9.19
Class E***		1,000		1,003.70		0.76			3.81
Class I		1,000		1,004.30		0.64			3.21
Class Y		1,000		1,002.60		0.96			4.81
Based on 5% Return(2)
Class A	$	1,000	$	1,019.77		1.06	%	$	5.35
Class B		1,000		1,015.67		1.87			9.47
Class C		1,000		1,015.87		1.84			9.27
Class E***		1,000		1,021.27		0.76			3.84
Class I		1,000		1,021.87		0.64			3.23
Class Y		1,000		1,020.27		0.96			4.85

Ivy Money Market Fund Expenses
For the Six Months Ended       September 30, 2008	Beginning Account Value 3-31-08		Ending Account Value 9-30-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	1,009.60		0.82	%	$	4.12
Class B		1,000		1,005.00		1.72			8.62
Class C		1,000		1,005.30		1.66			8.32
Class E		1,000		1,009.10		0.90			4.52
Based on 5% Return(2)
Class A	$	1,000	$	1,020.97		0.82	%	$	4.14
Class B		1,000		1,016.47		1.72			8.67
Class C		1,000		1,016.77		1.66			8.37
Class E		1,000		1,020.57		0.90			4.55

Ivy Municipal Bond Fund Expenses
For the Six Months Ended       September 30, 2008	Beginning Account Value 3-31-08		Ending Account Value 9-30-08		Annualized Expense Ratio Based on the Six-Month Period			Expenses Paid During Period*
Based on Actual Fund Return(1)
Class A	$	1,000	$	970.40		1.32	%	$	6.50
Class B		1,000		966.40		2.13			10.52
Class C		1,000		966.50		2.11			10.42
Based on 5% Return(2)
Class A	$	1,000	$	1,018.47		1.32	%	$	6.66
Class B		1,000		1,014.37		2.13			10.78
Class C		1,000		1,014.47		2.11			10.68

*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, 2008, and divided by 365.

**Actual inception date of Class R shares for Ivy Asset Strategy Fund is 7-31-08 (the date on which shares were first acquired by shareholders). The calculations are based on 62 days in the period ended September 30, 2008.

***Class closed to investment.

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

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

The above illustrations are based on ongoing costs only and do not include any transactional costs, such as sales loads, redemption fees or exchange fees.

SHAREHOLDER SUMMARY OF IVY CAPITAL APPRECIATION FUND

Portfolio Highlights

On September 30, 2008, Ivy Capital Appreciation Fund had net assets totaling $596,921
(in thousands) invested in a diversified portfolio of:

100.44%	Domestic Common Stocks
1.76%	Foreign Common Stocks
-2.20%	Cash and Cash Equivalents and Options

Sector Weightings

As a shareholder of the Fund, for every $100 you had invested on September 30, 2008,
your Fund owned:

Information Technology Stocks	$	27.51
Industrials Stocks	$	18.36
Consumer Staples Stocks	$	12.96
Health Care Stocks	$	11.39
Energy Stocks	$	10.11
Financials Stocks	$	8.57
Consumer Discretionary Stocks	$	6.92
Miscellaneous Stocks,(1) Cash and       Cash Equivalents and Options	$	4.18

(1)Includes $5.27 Materials Stocks and $1.11 Telecommunications Services Stocks.

The Investments of Ivy Capital Appreciation Fund
September 30, 2008
(In Thousands)                                                                                                                     (Unaudited)
COMMON STOCKS		Shares			Value
Aerospace & Defense - 12.65%
Boeing Company (The)			75	$	4,301
General Dynamics Corporation			220		16,196
Precision Castparts Corp. (A)			265		20,877
Raytheon Company			290		15,518
Rockwell Collins, Inc.			260		12,503
Spirit AeroSystems Holdings, Inc. (B)			270		4,339
United Technologies Corporation (A)			30		1,802
					75,536
Apparel, Accessories & Luxury Goods - 1.42%
Coach, Inc. (A)(B)			275		6,886
Under Armour, Inc., Class A (A)(B)			50		1,588
					8,474
Asset Management & Custody Banks - 1.40%
Janus Capital Group Inc. (A)			345		8,377
Biotechnology - 8.65%
Amgen Inc. (A)(B)			125		7,402
BioMarin Pharmaceutical Inc. (A)(B)			250		6,629
Genentech, Inc. (A)(B)			195		17,293
Gilead Sciences, Inc. (A)(B)			445		20,312
					51,636
Casinos & Gaming - 0.36%
Las Vegas Sands, Inc. (A)(B)			60		2,167
Communications Equipment - 7.08%
Cisco Systems, Inc. (B)			635		14,319
Nokia Corporation, Series A, ADR			330		6,155
QUALCOMM Incorporated			55		2,364
Research In Motion Limited (B)			285		19,453
					42,291
Computer Hardware - 8.53%
Apple Inc. (A)(B)			220		25,011
Hewlett-Packard Company			560		25,894
					50,905
Construction & Engineering - 1.76%
Fluor Corporation (A)			75		4,177
Foster Wheeler Ltd. (A)(B)			175		6,322
					10,499
Construction & Farm Machinery & Heavy Trucks - 3.06%
Deere & Company (A)			290		14,355
Manitowoc Company, Inc. (The)			250		3,888
					18,243
Data Processing & Outsourced Services - 2.06%
Visa Inc., Class A (A)			200		12,278
Department Stores - 1.80%
Kohl's Corporation (A)(B)			120		5,530
Nordstrom, Inc. (A)			180		5,187
					10,717
Fertilizers & Agricultural Chemicals - 3.95%
Monsanto Company (A)			238		23,557
Health Care Equipment - 1.58%
Hologic, Inc. (B)			490		9,437
Health Care Supplies - 0.63%
DENTSPLY International Inc.			100		3,754
Household Products - 2.62%
Colgate-Palmolive Company			50		3,768
Procter & Gamble Company (The)			170		11,847
					15,615
Hypermarkets & Super Centers - 1.41%
Costco Wholesale Corporation (A)			130		8,440
Integrated Oil & Gas - 1.20%
Exxon Mobil Corporation			60		4,659
Occidental Petroleum Corporation (A)			35		2,466
					7,125
Internet Software & Services - 5.37%
Google Inc., Class A (B)			80		32,041
Investment Banking & Brokerage - 4.58%
Charles Schwab Corporation (The) (A)			475		12,350
Goldman Sachs Group, Inc. (The) (A)			117		14,976
					27,326
Oil & Gas Drilling - 2.25%
Nabors Industries Ltd. (B)			85		2,118
Transocean Inc. (A)			103		11,314
					13,432
Oil & Gas Equipment & Services - 6.29%
Halliburton Company			95		3,077
Schlumberger Limited (A)			310		24,208
Smith International, Inc. (A)			175		10,262
					37,547
Oil & Gas Exploration & Production - 0.37%
Ultra Petroleum Corp. (A)(B)			40		2,214
Pharmaceuticals - 0.53%
Abbott Laboratories (A)			55		3,167
Railroads - 0.89%
Union Pacific Corporation (A)			75		5,337
Restaurants - 3.34%
McDonald's Corporation (A)			165		10,180
YUM! Brands, Inc.			300		9,783
					19,963
Soft Drinks - 5.73%
Coca-Cola Company (The)			290		15,335
Hansen Natural Corporation (A)(B)			200		6,045
PepsiCo, Inc. (A)			180		12,829
					34,209
Specialized Finance - 2.59%
CME Group Inc. (A)			40		15,440
Specialty Chemicals - 1.32%
Albemarle Corporation			256		7,908
Systems Software - 4.47%
Microsoft Corporation	1,000				26,680
Tobacco - 3.20%
Lorillard, Inc. (A)			140		9,961
Philip Morris International Inc.			190		9,139
					19,100
Wireless Telecommunication Service - 1.11%
NII Holdings, Inc. (A)(B)			175		6,633
TOTAL COMMON STOCKS - 102.20%				$	610,048
(Cost: $714,762)

CALL OPTIONS	Number of Contracts
Google Inc., Class A,
Dec 660, Expires 12-22-08		- -	*		8
Precision Castparts Corp.,
Dec 140, Expires 12-22-08		1			6
TOTAL CALL OPTIONS - 0.00%				$	14
(Cost: $300)
TOTAL INVESTMENT SECURITIES - 102.20%				$	610,062
(Cost: $715,062)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (2.20%)					(13,141	)
NET ASSETS - 100.00%				$	596,921

Notes to Schedule of Investments

(A)Securities serve as cover for the following written options outstanding at September 30, 2008:

Underlying Security	Contracts Subject to Call	Expiration Month/ Exercise Price	Premium Received			Market Value
Abbott Laboratories:	1	January/65.0		$	78		$	65
Amgen Inc.:	-*	January/75.0			87			34
	-*	January/80.0			11			3
Apple Inc.:	1	January/175.0			199			82
BioMarin Pharmaceutical Inc.:	1	October/35.0			87			7
	1	January/35.0			79			31
Charles Schwab Corporation (The):	1	January/27.5			87			77

CME Group Inc.:	-*	December/410.0	42	86
	-*	December/420.0	103	224
	-*	December/450.0	1	2
	-*	January/410.0	163	274
	-*	January/460.0	323	373
Coach, Inc.:	1	January/40.0	137	21
Costco Wholesale Corporation:	-*	January/80.0	60	27
Deere & Company:	1	January/80.0	74	16
Fluor Corporation:	-*	October/77.5	15	1
	-*	January/85.0	19	6
	-*	January/87.5	30	12
	-*	January/92.5	30	7
Foster Wheeler Ltd.:	-*	January/60.0	48	15
	-*	January/62.5	14	5
Genentech, Inc.:	-*	December/95.0	79	143
Gilead Sciences, Inc.:	2	January/65.0	211	78
Goldman Sachs Group, Inc. (The):	-*	January/170.0	9	5
	-*	January/195.0	78	9
Hansen Natural Corporation:	1	December/35.0	370	554
	1	December/40.0	117	124
Janus Capital Group Inc.:	1	December/35.0	48	11
	1	January/30.0	101	92
Kohl's Corporation:	1	January/60.0	198	90
	1	January/70.0	44	10
Las Vegas Sands, Inc.:	-*	December/65.0	88	18
Lorillard, Inc.:	-*	January/85.0	80	82
	-*	January/90.0	56	56
McDonald's Corporation:	1	December/70.0	62	25
Monsanto Company:	1	October/140.0	73	4
	-*	January/150.0	200	66
	1	January/165.0	98	32
NII Holdings, Inc.:	-*	December/55.0	69	13
	-*	December/60.0	57	11
	-*	January/60.0	131	16
Nordstrom, Inc.:	1	January/40.0	87	42
	1	January/45.0	45	14

Occidental Petroleum Corporation:	-*	November/90.0		69		21
	-*	January/110.0		15		4
PepsiCo, Inc.:	-*	January/80.0		33		26
Precision Castparts Corp.:	-*	December/120.0		105		10
Schlumberger Limited:	1	January/110.0		277		124
	1	January/120.0		172		26
Smith International, Inc.:	-*	January/85.0		62		24
	1	January/90.0		156		25
Transocean Inc.:	-*	January/155.0		17		6
	-*	January/160.0		29		13
Ultra Petroleum Corp.:	-*	December/90.0		38		8
Under Armour, Inc.:	-*	October/35.0		22		15
Union Pacific Corporation:	-*	January/92.5		64		25
United Technologies Corporation:	-*	January/75.0		18		10
Visa Inc.:	1	January/90.0		122		33
			$	5,187	$	3,233

Underlying Security	Contracts Subject to Put	Expiration Month/ Exercise Price	Premium Received			Market Value
Apple Inc.:	-*	January/115.0		$	152		$	731
BioMarin Pharmaceutical Inc.:	1	January/100.0			75			87
Coach, Inc.:	1	January/22.5			68			148
Costco Wholesale Corporation:	-*	January/50.0			14			16
	-*	January/55.0			63			59
Deere & Company:	1	December/55.0			104			514
	1	January/52.5			90			432
	1	January/55.0			132			546
Fluor Corporation:	-*	October/75.0			104			966
	-*	January/50.0			23			65
General Dynamics Corporation:	1	January/75.0			53			304
Gilead Sciences, Inc.:	-*	January/42.5			40			124
	1	January/45.0			85			252
Goldman Sachs Group, Inc. (The):	-*	October/125.0			52			139
	-*	October/140.0			54			223
	-*	January/115.0			75			183

	Google Inc.:	-*	December/400.0		102		344
		-*	January/380.0		62		103
	Halliburton Company:	1	January/35.0		94		452
	Hansen Natural Corporation:	1	December/22.5		492		514
	Janus Capital Group Inc.:	1	January/17.5		47		76
		1	January/20.0		81		160
	Lorillard, Inc.:	-*	December/60.0		67		109
	Monsanto Company:	-*	October/85.0		85		85
		1	October/95.0		179		291
		-*	October/100.0		35		102
		-*	January/85.0		42		86
	Nike, Inc.:	1	January/50.0		90		44
	Occidental Petroleum Corporation:	-*	November/65.0		56		117
	Precision Castparts Corp.:	1	December/70.0		113		255
		-*	December/75.0		37		149
	Research In Motion Limited:	1	December/85.0		172		1,085
		1	December/90.0		258		1,295
	Schlumberger Limited:	1	November/80.0		160		479
		1	January/75.0		181		409
	Smith International, Inc.:	-*	October/60.0		32		155
		-*	January/50.0		41		109
		-*	January/60.0		90		261
	Transocean Inc.:	-*	November/105.0		39		118
		-*	November/115.0		117		350
		-*	January/105.0		66		182
	Ultra Petroleum Corp.:	-*	December/55.0		16		44
	Under Armour, Inc.:	-*	October/25.0		2		1
	Union Pacific Corporation:	1	November/65.0		51		128
	Visa Inc.:	-*	December/55.0		73		151
		-*	January/50.0		44		93
	YUM! Brands, Inc.:	-*	January/30.0		28		39
				$	4,136	$	12,575
*Not shown due to rounding as amount is less than 500.

(B)No dividends were paid during the preceding 12 months.

The following acronym is used throughout this portfolio: ADR = American Depositary Receipts

See Accompanying Notes to Financial Statements.

Statement of Assets and Liabilities
     IVY CAPITAL APPRECIATION FUND
     September 30, 2008
     (In Thousands, Except for Per Share Amounts)                                                           (Unaudited)

ASSETS
Investment securities - at value (cost - $715,062)	$	610,062
Receivables:
Investment securities sold		14,930
Fund shares sold		1,673
Dividends and interest		675
Prepaid and other assets		132
Total assets		627,472
LIABILITIES
Outstanding written options at market (premium received - $9,323)		15,808
Payable for investment securities purchased		10,425
Due to custodian		3,092
Payable to Fund shareholders		1,017
Accrued shareholder servicing		179
Accrued accounting services fee		14
Accrued management fee		11
Accrued distribution and service fees		5
Total liabilities		30,551
Total net assets	$	596,921
NET ASSETS
$0.01 par value capital stock:
Capital stock	$	724
Additional paid-in capital		769,623
Accumulated loss:
Accumulated net investment loss		(598	)
Accumulated net realized loss on investment transactions		(61,343	)
Net unrealized depreciation in value of investments	(111,485		)
Net assets applicable to outstanding units of capital	$	596,921
Net asset value per share (net assets divided by shares outstanding):
Class A	$8.32
Class B	$7.71
Class C	$7.74
Class E	$8.31
Class I	$8.36
Class Y	$8.34
Capital shares outstanding:
Class A		37,958
Class B		1,170
Class C		8,856
Class E		264
Class I		18,603
Class Y		5,507
Capital shares authorized		300,000

See Accompanying Notes to Financial Statements.

Statement of Operations
     IVY CAPITAL APPRECIATION FUND
     For the Six Months Ended September 30, 2008
     (In Thousands)                                                                                                             (Unaudited)

INVESTMENT LOSS
Income:
Dividends (net of foreign withholding taxes of $64)	$	3,429
Interest and amortization		315
Total income		3,744
Expenses:
Investment management fee		2,308
Distribution and service fees:
Class A		496
Class B		58
Class C		411
Class E		3
Class Y		73
Shareholder servicing:
Class A		470
Class B		23
Class C		101
Class E		9
Class I		124
Class Y		49
Accounting services fee		94
Custodian fees		20
Audit fees		11
Legal fees		5
Other		82
Total		4,337
Less expenses in excess of limit		(6	)
Total expenses		4,331
Net investment loss		(587	)
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Realized net loss on securities		(25,628	)
Realized net gain on written options		7,569
Realized net loss on investments		(18,059	)
Unrealized depreciation in value of securities during the period		(87,784	)
Unrealized depreciation in value of written options during the period		(6,484	)
Unrealized depreciation in value of investments during the period		(94,268	)
Net loss on investments		(112,327	)
Net decrease in net assets resulting from operations	$	(112,914	)

See Accompanying Notes to Financial Statements.

Statement of Changes in Net Assets
     IVY CAPITAL APPRECIATION FUND
     (In Thousands)                                                                                                                (Unaudited)
     

	For the six months ended September 30,				For the fiscal year ended March 31,
	2008				2008
INCREASE IN NET ASSETS
Operations:
Net investment loss		$	(587	)	$	(533	)
Realized net loss on investments			(18,059	)		(38,841	)
Unrealized depreciation			(94,268	)		(25,582	)
Net decrease in net assets resulting                       from operations		(112,914		)		(64,956	)
Distributions to shareholders from:(1)
Net investment income:
Class A			(––	)		(––	)
Class B			(––	)		(––	)
Class C			(––	)		(––	)
Class E			(––	)		(––	)
Class I			(––	)		(––	)
Class Y			(––	)		(––	)
Realized gains on investment transactions:
Class A			(––	)		(3,693	)
Class B			(––	)		(35	)
Class C			(––	)		(272	)
Class E			(––	)		(22	)
Class I			(––	)		(138	)
Class Y			(––	)		(566	)
			(––	)		(4,726	)
Capital share transactions			152,520			543,587
Total increase			39,606			473,905
NET ASSETS
Beginning of period			557,315			83,410
End of period		$	596,921		$	557,315
Accumulated net investment loss		$	(598	)	$	(11	)

(1)See "Financial Highlights" on pages 23 - 28.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY CAPITAL APPRECIATION FUND⁽¹⁾
     Class A Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	9.71		$	10.09		$	9.16		$	7.99		$	7.52		$	5.73
Income (loss) from       investment operations:
Net investment income (loss)		(0.01		)(2)		(0.00	)(2)		0.00	(2)	(0.03		)(2)	(0.02		)	(0.06		)
Net realized and unrealized             gain (loss) on investments		(1.38		)(2)		(0.27	)(2)		0.93	(2)		1.20	(2)		0.49			1.85
Total from investment operations		(1.39		)		(0.27	)		0.93			1.17			0.47			1.79
Less distributions from:
Net investment income		(0.00		)		(0.00	)		(0.00	)	(0.00		)	(0.00		)	(0.00		)
Capital gains		(0.00		)		(0.11	)		(0.00	)	(0.00		)	(0.00		)	(0.00		)
Total distributions		(0.00		)		(0.11	)		(0.00	)	(0.00		)	(0.00		)	(0.00		)
Net asset value, end of period		$	8.32		$	9.71		$	10.09		$	9.16		$	7.99		$	7.52
Total return(3)	- -14.32			%		- -2.83	%		10.15	%	14.64		%		6.25	%	31.24		%
Net assets, end of period       (in millions)		$316			$393			$58			$36			$11			$6
Ratio of expenses to average       net assets including       expense waiver			1.20	%(4)		1.15	%		1.35	%		1.30	%		1.19	%		1.47	%
Ratio of net investment income       (loss) to average net assets       including expense waiver		- -0.16		%(4)		- -0.01	%		0.05	%	- -0.29		%		0.03	%	- -1.05		%
Ratio of expenses to average       net assets excluding       expense waiver			1.20	%(4)(5)		1.15	%(5)		1.40	%		1.55	%		1.84	%		2.12	%
Ratio of net investment income       (loss) to average net assets       excluding waiver		- -0.16		%(4)(5)		- -0.01	%(5)		0.00	%	- -0.54		%	- -0.62		%	- -1.70		%
Portfolio turnover rate			29	%		81	%		95	%		60	%		62	%		115	%

(1)Capital Appreciation Fund (formerly Tax-Managed Equity Fund) changed its name effective March 31, 2005.

(2)Based on average weekly shares outstanding.

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

(4)Annualized.

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY CAPITAL APPRECIATION FUND⁽¹⁾
     Class B Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	9.05		$	9.43		$	8.65		$	7.62		$	7.26		$	5.58
Income (loss) from       investment operations:
Net investment loss		(0.05		)(2)	(0.10		)(2)	(0.09		)(2)	(0.11		)(2)	(0.01		)	(0.09		)
Net realized and unrealized             gain (loss) on investments		(1.29		)(2)	(0.25		)(2)		0.87	(2)		1.14	(2)		0.37			1.77
Total from investment operations		(1.34		)	(0.35		)		0.78			1.03			0.36			1.68
Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)
Capital gains		(0.00		)	(0.03		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)
Total distributions		(0.00		)	(0.03		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)
Net asset value, end of period		$	7.71		$	9.05		$	9.43		$	8.65		$	7.62		$	7.26
Total return	- -14.81			%	- -3.76		%		9.02	%	13.52		%		4.96	%	30.11		%
Net assets, end of period       (in millions)		$9			$12			$4			$2			$1			$1
Ratio of expenses to average       net assets including       expense waiver			2.13	%(3)		2.13	%		2.47	%		2.31	%		2.03	%		2.28	%
Ratio of net investment loss       to average net assets       including expense waiver		- -1.09		%(3)	- -0.99		%	- -1.07		%	- -1.30		%	- -0.81		%	- -1.87		%
Ratio of expenses to average       net assets excluding       expense waiver			2.13	%(3)(4)		2.13	%(4)		2.51	%		2.56	%		2.68	%		2.93	%
Ratio of net investment loss       to average net assets       excluding expense waiver		- -1.09		%(3)(4)	- -0.99		%(4)	- -1.11		%	- -1.55		%	- -1.46		%	- -2.52		%
Portfolio turnover rate			29	%		81	%		95	%		60	%		62	%		115	%

(1)Capital Appreciation Fund (formerly Tax-Managed Equity Fund) changed its name effective March 31, 2005.

(2)Based on average weekly shares outstanding.

(3)Annualized.

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY CAPITAL APPRECIATION FUND⁽¹⁾
     Class C Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	9.06		$	9.45		$	8.64		$	7.60		$	7.24		$	5.57
Income (loss) from       investment operations:
Net investment income (loss)		(0.04		)(2)	(0.08		)(2)	(0.07		)(2)	(0.09		)(2)		0.03		(0.11		)
Net realized and unrealized             gain (loss) on investments		(1.28		)(2)	(0.28		)(2)		0.88	(2)		1.13	(2)		0.33			1.78
Total from investment operations		(1.32		)	(0.36		)		0.81			1.04			0.36			1.67
Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)
Capital gains		(0.00		)	(0.03		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)
Total distributions		(0.00		)	(0.03		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)
Net asset value, end of period		$	7.74		$	9.06		$	9.45		$	8.64		$	7.60		$	7.24
Total return	- -14.57			%	- -3.82		%		9.38	%	13.68		%		4.97	%	29.98		%
Net assets, end of period       (in millions)		$68			$80			$11			$7			$2			$1
Ratio of expenses to average       net assets including       expense waiver			1.89	%(3)		1.89	%		2.14	%		2.07	%		2.15	%		2.46	%
Ratio of net investment loss       to average net assets       including expense waiver		- -0.86		%(3)	- -0.77		%	- -0.75		%	- -1.05		%	- -0.96		%	- -2.05		%
Ratio of expenses to average       net assets excluding       expense waiver			1.89	%(3)(4)		1.89	%(4)		2.18	%		2.32	%		2.80	%		3.11	%
Ratio of net investment loss       to average net assets       excluding expense waiver		- -0.86		%(3)(4)	- -0.77		%(4)	- -0.79		%	- -1.30		%	- -1.61		%	- -2.70		%
Portfolio turnover rate			29	%		81	%		95	%		60	%		62	%		115	%

(1)Capital Appreciation Fund (formerly Tax-Managed Equity Fund) changed its name effective March 31, 2005.

(2)Based on average weekly shares outstanding.

(3)Annualized.

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY CAPITAL APPRECIATION FUND
     Class E Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                             (Unaudited)

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	9.70			$	10.12
Loss from investment operations:
Net investment loss		(0.01		)(2)			(0.03	)(2)
Net realized and unrealized loss on investments		(1.38		)(2)			(0.30	)(2)
Total from investment operations		(1.39		)			(0.33	)
Less distributions from:
Net investment income		(0.00		)			(0.00	)
Capital gains		(0.00		)			(0.09	)
Total distributions		(0.00		)			(0.09	)
Net asset value, end of period		$	8.31			$	9.70
Total return(3)	- -14.33			%			- -3.40	%
Net assets, end of period (in millions)		$2				$2
Ratio of expenses to average net assets       including expense waiver			1.28	%(4)			1.35	%(4)
Ratio of net investment loss to average net       assets including expense waiver		- -0.25		%(4)			- -0.28	%(4)
Ratio of expenses to average net assets       excluding expense waiver			1.75	%(4)			1.73	%(4)
Ratio of net investment loss to average net       assets excluding expense waiver		- -0.72		%(4)			- -0.66	%(4)
Portfolio turnover rate			29	%			81	%(5)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

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

(4)Annualized.

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY CAPITAL APPRECIATION FUND
     Class I Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                             (Unaudited)

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	9.74			$	10.14
Income (loss) from investment operations:
Net investment income			0.01	(2)			0.02	(2)
Net realized and unrealized loss on investments		(1.39		)(2)			(0.29	)(2)
Total from investment operations		(1.38		)			(0.27	)
Less distributions from:
Net investment income		(0.00		)			(0.00	)
Capital gains		(0.00		)			(0.13	)
Total distributions		(0.00		)			(0.13	)
Net asset value, end of period		$	8.36			$	9.74
Total return	- -14.17			%			- -2.83	%
Net assets, end of period (in millions)		$155				$12
Ratio of expenses to average net assets			0.88	%(3)			0.86	%(3)
Ratio of net investment income to average net assets			0.23	%(3)			0.23	%(3)
Portfolio turnover rate			29	%			81	%(4)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY CAPITAL APPRECIATION FUND ⁽¹⁾
     Class Y Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended					For the fiscal year ended March 31,										For the period from 9-15-04(2) to
	9-30-08					2008				2007			2006			3-31-05
Net asset value,       beginning of period		$	9.73			$	10.10			$	9.16		$	7.99			$	7.33
Income (loss) from       investment operations:
Net investment income (loss)		(0.01		)(3)			0.00	(3)			0.01	(3)	(0.02		)(3)			0.03
Net realized and unrealized             gain (loss) on investments		(1.38		)(3)			(0.26	)(3)			0.93	(3)		1.19	(3)			0.63
Total from investment operations		(1.39		)			(0.26	)			0.94			1.17				0.66
Less distributions from:
Net investment income		(0.00		)			(0.00	)			(0.00	)	(0.00		)		(0.00		)
Capital gains		(0.00		)			(0.11	)			(0.00	)	(0.00		)		(0.00		)
Total distributions		(0.00		)			(0.11	)			(0.00	)	(0.00		)		(0.00		)
Net asset value, end of period		$	8.34			$	9.73			$	10.10		$	9.16			$	7.99
Total return	- -14.29			%			- -2.83	%		10.37		%	14.64		%			9.00	%
Net assets, end of period       (in thousands)	$46,908				$58,005				$10,049				$798				$108
Ratio of expenses to average       net assets including       expense waiver			1.14	%(4)			1.14	%			1.27	%		1.20	%			1.11	%(4)
Ratio of net investment income       (loss) to average net assets       including expense waiver		- -0.11		%(4)			- -0.00	%			0.16	%	- -0.23		%			0.47	%(4)
Ratio of expenses to average       net assets excluding       expense waiver			1.14	%(4)(5)			1.14	%(5)			1.31	%		1.45	%			1.76	%(4)
Ratio of net investment income       (loss) to average net assets       excluding expense waiver		- -0.11		%(4)(5)			- -0.00	%(5)			0.12	%	- -0.48		%		- -0.18		%(4)
Portfolio turnover rate			29	%			81	%			95	%		60	%			62	%(6)

(1)Capital Appreciation Fund (formerly Tax-Managed Equity Fund) changed its name effective March 31, 2005.

(2)Commencement of operations of the class.

(3)Based on average weekly shares outstanding.

(4)Annualized.

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

(6)For the 12 months ended March 31, 2005.

See Accompanying Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY CORE EQUITY FUND

Portfolio Highlights

On September 30, 2008, Ivy Core Equity Fund had net assets totaling $205,448 (in thousands) invested in a diversified portfolio of:

86.12%	Domestic Common Stocks
10.33%	Cash and Cash Equivalents
3.55%	Foreign Common Stocks

Sector Weightings

As a shareholder of the Fund, for every $100 you had invested on September 30, 2008,
your Fund owned:

Information Technology Stocks	$	16.20
Consumer Staples Stocks	$	15.32
Health Care Stocks	$	14.36
Industrials Stocks	$	14.24
Financials Stocks	$	14.13
Cash and Cash Equivalents	$	10.33
Energy Stocks	$	9.19
Consumer Discretionary Stocks	$	3.35
Miscellaneous Stocks(1)	$	2.88

(1)Includes $2.06 Materials Stocks and $0.82 Utilities Stocks.

The Investments of Ivy Core Equity Fund
September 30, 2008
(In Thousands)                                                                                                                       (Unaudited)
COMMON STOCKS	Shares		Value
Aerospace & Defense - 7.87%
General Dynamics Corporation		63	$	4,660
Lockheed Martin Corporation		55		6,010
Raytheon Company		103		5,496
				16,166
Auto Parts & Equipment - 0.51%
BorgWarner Inc.		32		1,042
Biotechnology - 2.04%
Amgen Inc. (A)		71		4,193
Brewers - 1.97%
Molson Coors Brewing Company, Class B		86		4,034
Communications Equipment - 2.96%
QUALCOMM Incorporated		96		4,113
Telefonaktiebolaget LM Ericsson, ADR		206		1,955
				6,068
Computer Hardware - 8.03%
Apple Inc. (A)		56		6,412
Hewlett-Packard Company		218		10,089
				16,501
Construction & Farm Machinery & Heavy Trucks - 2.59%
Deere & Company		108		5,322
Consumer Finance - 3.45%
American Express Company		47		1,654
Capital One Financial Corporation		107		5,442
				7,096
Data Processing & Outsourced Services - 0.46%
Visa Inc., Class A		15		946
Diversified Banks - 0.63%
Wells Fargo & Company		34		1,284
Fertilizers & Agricultural Chemicals - 1.59%
Monsanto Company		33		3,256
Food Retail - 1.09%
Kroger Co. (The)		82		2,245
Health Care Equipment - 6.15%
Baxter International Inc.		55		3,629
Becton, Dickinson and Company		45		3,636
Medtronic, Inc.		107		5,371
				12,636
Home Entertainment Software - 3.38%
Activision Blizzard, Inc. (A)		335		5,162
Nintendo Co., Ltd. (B)		4		1,782
				6,944
Home Improvement Retail - 1.55%
Home Depot, Inc. (The)		104		2,690
Sherwin-Williams Company (The)		9		503
				3,193
Hypermarkets & Super Centers - 2.10%
Costco Wholesale Corporation		66		4,311
Independent Power Producers & Energy Traders - 0.82%
NRG Energy, Inc. (A)		68		1,693
Industrial Gases - 0.47%
Air Products and Chemicals, Inc.		14		970
Integrated Oil & Gas - 3.70%
Exxon Mobil Corporation		98		7,594
Investment Banking & Brokerage - 4.30%
Charles Schwab Corporation (The)		340		8,832
Life Sciences Tools & Services - 1.75%
Thermo Fisher Scientific Inc. (A)		66		3,602
Oil & Gas Equipment & Services - 4.81%
National Oilwell Varco, Inc. (A)		43		2,140
Schlumberger Limited		45		3,520
Smith International, Inc.		56		3,307
Weatherford International Ltd. (A)		36		915
				9,882
Oil & Gas Exploration & Production - 0.68%
XTO Energy Inc.		30		1,405
Other Diversified Financial Services - 5.75%
Bank of America Corporation		105		3,675
J.P. Morgan Chase & Co.		174		8,140
				11,815
Packaged Foods & Meats - 1.28%
General Mills, Inc.		38		2,632
Pharmaceuticals - 4.42%
Abbott Laboratories		59		3,380
Novartis AG, Registered Shares (B)		68		3,559
Schering-Plough Corporation		116		2,144
				9,083
Railroads - 3.78%
Union Pacific Corporation		109		7,778
Restaurants - 1.29%
YUM! Brands, Inc.		81		2,641
Semiconductor Equipment - 1.37%
Applied Materials, Inc.		186		2,819
Soft Drinks - 4.15%
Coca-Cola Company (The)		161		8,530
Tobacco - 4.73%
Lorillard, Inc.		71		5,059
Philip Morris International Inc.		97		4,661
				9,720
TOTAL COMMON STOCKS - 89.67%			$	184,233
(Cost: $167,390)

SHORT-TERM SECURITIES	Principal
Commercial Paper
Avon Capital Corp. (Avon Products, Inc.),
2.200%, 10-3-08		$	4,000		3,999
Diageo Capital plc (Diageo plc),
6.000%, 10-1-08			9,487		9,487
E.I. du Pont de Nemours and Company,
2.100%, 10-20-08			3,000		2,997
Merck & Co., Inc.,
2.100%, 10-15-08			2,000		1,998
TOTAL SHORT-TERM SECURITIES - 9.00%				$	18,481
(Cost: $18,481)
TOTAL INVESTMENT SECURITIES - 98.67%				$	202,714
(Cost: $185,871)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.33%					2,734
NET ASSETS - 100.00%				$	205,448

Notes to Schedule of Investments

(A)No dividends were paid during the preceding 12 months.

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

Securities with an aggregate market value of $5,341, representing 2.60% of net assets, have been valued in good faith by the Valuation Committee subject to the supervision of the Board of Directors.

The following acronym is used throughout this portfolio:

ADR = American Depositary Receipts

See Accompanying Notes to Financial Statements.

Statement of Assets and Liabilities
     IVY CORE EQUITY FUND
     September 30, 2008
     (In Thousands, Except for Per Share Amounts)                                                           (Unaudited)

ASSETS
Investment securities - at value (cost - $185,871)	$	202,714
Receivables:
Investment securities sold		3,473
Fund shares sold		459
Dividends and interest		327
Prepaid and other assets		42
Total assets		207,015
LIABILITIES
Payable for investment securities purchased		750
Payable to Fund shareholders		611
Accrued shareholder servicing		80
Due to custodian		19
Accrued accounting services fee		8
Accrued management fee		4
Accrued distribution and service fees		4
Other		91
Total liabilities		1,567
Total net assets	$	205,448
NET ASSETS
$0.01 par value capital stock:
Capital stock	$	250
Additional paid-in capital		194,221
Accumulated undistributed income (loss):
Accumulated net investment loss		(627	)
Accumulated net realized loss on investment transactions		(5,245	)
Net unrealized appreciation in value of investments		16,849
Net assets applicable to outstanding units of capital	$	205,448
Net asset value per share (net assets divided by shares outstanding):
Class A	$8.55
Class B	$7.88
Class C	$7.97
Class E	$8.53
Class I	$9.12
Class Y	$8.99
Capital shares outstanding:
Class A		9,513
Class B		852
Class C		14,317
Class E		77
Class I		28
Class Y		261
Capital shares authorized		300,000

See Accompanying Notes to Financial Statements.

Statement of Operations
     IVY CORE EQUITY FUND
     For the Six Months Ended September 30, 2008
     (In Thousands)                                                                                                             (Unaudited)

INVESTMENT LOSS
Income:
Dividends (net of foreign withholding taxes of $3)	$	1,524
Interest and amortization		147
Total income		1,671
Expenses:
Distribution and service fees:
Class A		114
Class B		42
Class C		666
Class E		1
Class Y		3
Investment management fee		826
Shareholder servicing:
Class A		142
Class B		21
Class C		203
Class E		3
Class I		––	*
Class Y		2
Accounting services fee		47
Audit fees		14
Custodian fees		6
Legal fees		1
Other		132
Total		2,223
Less expenses in excess of limit		(1	)
Total expenses		2,222
Net investment loss		(551	)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Realized net gain on securities		8,241
Realized net loss on foreign currency transactions		(4	)
Realized net gain on investments		8,237
Unrealized depreciation in value of investments during the period		(26,769	)
Net loss on investments		(18,532	)
Net decrease in net assets resulting from operations	$	(19,083	)

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

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

	For the six months ended September 30,				For the fiscal year ended March 31,
	2008				2008
DECREASE IN NET ASSETS
Operations:
Net investment loss		$	(551	)	$	(254	)
Realized net gain (loss) on investments			8,237			(264	)
Unrealized appreciation (depreciation)			(26,769	)		4,552
Net increase (decrease) in net assets                       resulting from operations			(19,083	)		4,034
Distributions to shareholders from:(1)
Net investment income:
Class A			(––	)		(––	)
Class B			(––	)		(––	)
Class C			(––	)		(––	)
Class E			(––	)		(––	)
Class I			(––	)		(––	)
Class Y			(––	)		(––	)
Realized gains on investment transactions:
Class A			(––	)		(8,361	)
Class B			(––	)		(890	)
Class C			(––	)		(13,130	)
Class E			(––	)		(33	)
Class I			(––	)		(20	)
Class Y			(––	)		(190	)
			(––	)		(22,624	)
Capital share transactions			(10,457	)		(1,975	)
Total decrease			(29,540	)		(20,565	)
NET ASSETS
Beginning of period			234,988			255,553
End of period		$	205,448		$	234,988
Accumulated net investment loss		$	(627	)	$	(72	)

(1)See "Financial Highlights" on pages 37 - 42.

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	9.33		$	10.03		$	10.24		$	9.03		$	8.08		$	6.63
Income (loss) from       investment operations:
Net investment income (loss)		(0.00		)		0.01			(0.00	)		(0.00	)		0.02			0.01
Net realized and unrealized             gain (loss) on investments		(0.78		)		0.25			0.88			1.21			0.93			1.44
Total from investment operations		(0.78		)		0.26			0.88			1.21			0.95			1.45
Less distributions from:
Net investment income		(0.00		)		(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Capital gains		(0.00		)		(0.96	)		(1.09	)		(0.00	)	(0.00		)	(0.00		)
Total distributions		(0.00		)		(0.96	)		(1.09	)		(0.00	)	(0.00		)	(0.00		)
Net asset value, end of period		$	8.55		$	9.33		$	10.03		$	10.24		$	9.03		$	8.08
Total return(1)		- -8.36		%		1.52	%		8.54	%		13.40	%	11.76		%	21.87		%
Net assets, end of period       (in millions)		$81			$88			$83			$74			$65			$75
Ratio of expenses to       average net assets			1.44	%(2)		1.35	%		1.37	%		1.42	%		1.50	%		1.46	%
Ratio of net investment income       (loss) to average net assets		- -0.01		%(2)		0.36	%		0.21	%		- -0.03	%		0.07	%		0.24	%
Portfolio turnover rate			45	%		81	%		114	%		79	%		42	%		59	%

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

(2)Annualized.

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	8.64		$	9.34		$	9.70		$	8.63		$	7.78		$	6.45
Income (loss) from       investment operations:
Net investment loss		(0.08		)	(0.06		)	(0.07		)	(0.10		)	(0.07		)	(0.05		)
Net realized and unrealized             gain (loss) on investments		(0.68		)		0.22			0.80			1.17			0.92			1.38
Total from investment operations		(0.76		)		0.16			0.73			1.07			0.85			1.33
Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)
Capital gains		(0.00		)	(0.86		)	(1.09		)	(0.00		)	(0.00		)	(0.00		)
Total distributions		(0.00		)	(0.86		)	(1.09		)	(0.00		)	(0.00		)	(0.00		)
Net asset value, end of period		$	7.88		$	8.64		$	9.34		$	9.70		$	8.63		$	7.78
Total return		- -8.80		%		0.65	%		7.45	%	12.40		%	10.93		%	20.62		%
Net assets, end of period       (in millions)		$7			$9			$11			$11			$12			$12
Ratio of expenses to       average net assets			2.41	%(1)		2.27	%		2.29	%		2.32	%		2.36	%		2.42	%
Ratio of net investment loss       to average net assets		- -0.99		%(1)	- -0.51		%	- -0.71		%	- -0.94		%	- -0.77		%	- -0.66		%
Portfolio turnover rate			45	%		81	%		114	%		79	%		42	%		59	%

(1)Annualized.

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	8.74		$	9.44		$	9.77		$	8.68		$	7.82		$	6.48
Income (loss) from       investment operations:
Net investment loss		(0.05		)	(0.05		)	(0.06		)	(0.09		)	(0.06		)	(0.04		)
Net realized and unrealized             gain (loss) on investments		(0.72		)		0.22			0.82			1.18			0.92			1.38
Total from investment operations		(0.77		)		0.17			0.76			1.09			0.86			1.34
Less distributions from:
Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)
Capital gains		(0.00		)	(0.87		)	(1.09		)	(0.00		)	(0.00		)	(0.00		)
Total distributions		(0.00		)	(0.87		)	(1.09		)	(0.00		)	(0.00		)	(0.00		)
Net asset value, end of period		$	7.97		$	8.74		$	9.44		$	9.77		$	8.68		$	7.82
Total return		- -8.81		%		0.78	%		7.71	%	12.56		%	11.00		%	20.68		%
Net assets, end of period       (in millions)		$114			$135			$159			$173			$183			$200
Ratio of expenses to       average net assets			2.17	%(1)		2.11	%		2.13	%		2.17	%		2.22	%		2.27	%
Ratio of net investment loss       to average net assets		- -0.76		%(1)	- -0.34		%	- -0.55		%	- -0.79		%	- -0.63		%	- -0.45		%
Portfolio turnover rate			45	%		81	%		114	%		79	%		42	%		59	%

(1)Annualized.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY CORE EQUITY FUND
     Class E Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                            (Unaudited)

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	9.33		$	10.05
Income (loss) from investment operations:
Net investment loss		(0.01		)(2)		(0.03	)(2)
Net realized and unrealized gain (loss)             on investments		(0.79		)(2)		0.26	(2)
Total from investment operations		(0.80		)		0.23
Less distributions from:
Net investment income		(0.00		)		(0.00	)
Capital gains		(0.00		)		(0.95	)
Total distributions		(0.00		)		(0.95	)
Net asset value, end of period		$	8.53		$	9.33
Total return(3)		- -8.58		%		1.22	%
Net assets, end of period (in thousands)		$659			$592
Ratio of expenses to average net assets       including expense waiver			1.74	%(4)		1.80	%(4)
Ratio of net investment loss to average net       assets including expense waiver		- -0.30		%(4)	- -0.43		%(4)
Ratio of expenses to average net assets       excluding expense waiver			2.07	%(4)		1.80	%(4)(5)
Ratio of net investment loss to average net       assets excluding expense waiver		- -0.63		%(4)	- -0.43		%(4)(5)
Portfolio turnover rate			45	%		81	%(6)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

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

(4)Annualized.

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

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY CORE EQUITY FUND
   �� Class I Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                            (Unaudited)

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	9.93		$	10.52
Income (loss) from investment operations:
Net investment income (loss)		0.02		(2)		0.10
Net realized and unrealized gain (loss)             on investments		(0.83		)(2)		0.30
Total from investment operations		(0.81		)		0.40
Less distributions from:
Net investment income		(0.00		)		(0.00	)
Capital gains		(0.00		)		(0.99	)
Total distributions		(0.00		)		(0.99	)
Net asset value, end of period		$	9.12		$	9.93
Total return		- -8.16		%		2.80	%
Net assets, end of period (in thousands)		$255			$225
Ratio of expenses to average net assets			0.96	%(3)		0.99	%(3)
Ratio of net investment income       to average net assets			0.45	%(3)		0.72	%(3)
Portfolio turnover rate			45	%		81	%(4)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

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

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	9.80		$	10.49		$	10.65		$	9.38		$	8.37		$	6.86
Income (loss) from       investment operations:
Net investment income			0.01	(1)		0.06	(1)		0.04	(1)		0.09			0.25			0.05
Net realized and unrealized             gain (loss) on investments		(0.82		)(1)		0.22	(1)		0.89	(1)		1.18			0.76			1.46
Total from investment operations		(0.81		)		0.28			0.93			1.27			1.01			1.51
Less distributions from:
Net investment income		(0.00		)		(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Capital gains		(0.00		)		(0.97	)		(1.09	)		(0.00	)	(0.00		)	(0.00		)
Total distributions		(0.00		)		(0.97	)		(1.09	)		(0.00	)	(0.00		)	(0.00		)
Net asset value, end of period		$	8.99		$	9.80		$	10.49		$	10.65		$	9.38		$	8.37
Total return		- -8.27		%		1.67	%		8.69	%		13.54	%	12.07		%	22.01		%
Net assets, end of period       (in millions)		$3			$2			$3			$2			$2			$2
Ratio of expenses to       average net assets			1.24	%(2)		1.22	%		1.21	%		1.22	%		1.24	%		1.26	%
Ratio of net investment income       to average net assets			0.18	%(2)		0.60	%		0.35	%		0.16	%		0.34	%		0.61	%
Portfolio turnover rate			45	%		81	%		114	%		79	%		42	%		59	%

(1)Based on average weekly shares outstanding.

(2)Annualized.

See Accompanying Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY LARGE CAP GROWTH FUND

Portfolio Highlights

On September 30, 2008, Ivy Large Cap Growth Fund had net assets totaling $543,000
(in thousands) invested in a diversified portfolio of:

94.65%	Domestic Common Stocks
5.35%	Cash and Cash Equivalents

As a shareholder of the Fund, for every $100 you had invested on September 30, 2008,
your Fund owned:

Sector Weightings

Information Technology Stocks	$	21.69
Health Care Stocks	$	19.51
Consumer Staples Stocks	$	14.18
Industrials Stocks	$	10.57
Energy Stocks	$	8.71
Financials Stocks	$	8.59
Consumer Discretionary Stocks	$	6.10
Cash and Cash Equivalents	$	5.35
Materials Stocks	$	5.30

The Investments of Ivy Large Cap Growth Fund
September 30, 2008
(In Thousands)                                                                                                                       (Unaudited)
COMMON STOCKS	Shares		Value
Aerospace & Defense - 5.71%
General Dynamics Corporation		162	$	11,927
Lockheed Martin Corporation		23		2,544
Raytheon Company		211		11,312
United Technologies Corporation		87		5,237
				31,020
Application Software - 1.00%
Adobe Systems Incorporated (A)		137		5,422
Asset Management & Custody Banks - 0.41%
T. Rowe Price Group, Inc.		39		2,235
Biotechnology - 7.31%
Genentech, Inc. (A)		171		15,164
Gilead Sciences, Inc. (A)		537		24,507
				39,671
Casinos & Gaming - 0.31%
Wynn Resorts, Limited		20		1,665
Communications Equipment - 7.10%
Cisco Systems, Inc. (A)		351		7,909
QUALCOMM Incorporated		545		23,439
Research In Motion Limited (A)		106		7,208
				38,556
Computer Hardware - 7.33%
Apple Inc. (A)		171		19,395
Hewlett-Packard Company		441		20,410
				39,805
Construction & Farm Machinery & Heavy Trucks - 2.07%
Deere & Company		227		11,246
Data Processing & Outsourced Services - 1.36%
MasterCard Incorporated, Class A		32		5,692
Visa Inc., Class A		28		1,695
				7,387
Department Stores - 0.78%
Kohl's Corporation (A)		92		4,249
Diversified Banks - 2.81%
Wells Fargo & Company		407		15,275
Electrical Components & Equipment - 2.79%
Emerson Electric Co.		371		15,141
Fertilizers & Agricultural Chemicals - 3.97%
Monsanto Company		218		21,558
Health Care Equipment - 2.66%
Baxter International Inc.		221		14,472
Health Care Supplies - 2.92%
Alcon, Inc.		98		15,844
Home Entertainment Software - 1.13%
Activision Blizzard, Inc. (A)		398		6,126
Household Products - 5.20%
Colgate-Palmolive Company		375		28,241
Hypermarkets & Super Centers - 4.12%
Wal-Mart Stores, Inc.		373		22,357
Industrial Gases - 1.33%
Praxair, Inc.		101		7,253
Internet Software & Services - 1.53%
Google Inc., Class A (A)		21		8,291
Investment Banking & Brokerage - 1.75%
Goldman Sachs Group, Inc. (The)		74		9,482
Life & Health Insurance - 1.46%
Aflac Incorporated		135		7,925
Life Sciences Tools & Services - 1.50%
Thermo Fisher Scientific Inc. (A)		148		8,162
Oil & Gas Equipment & Services - 8.71%
Schlumberger Limited		228		17,820
Smith International, Inc.		373		21,868
Weatherford International Ltd. (A)		303		7,613
				47,301
Other Diversified Financial Services - 1.02%
J.P. Morgan Chase & Co.		119		5,539
Pharmaceuticals - 5.12%
Abbott Laboratories		483		27,782
Restaurants - 5.01%
McDonald's Corporation		297		18,319
YUM! Brands, Inc.		273		8,899
				27,218
Semiconductors - 2.24%
Microchip Technology Incorporated		414		12,171
Soft Drinks - 4.86%
Coca-Cola Company (The)		270		14,277
PepsiCo, Inc.		170		12,102
				26,379
Specialized Finance - 1.14%
CME Group Inc.		16		6,193
TOTAL COMMON STOCKS - 94.65%			$	513,966
(Cost: $509,607)

SHORT-TERM SECURITIES	Principal
Commercial Paper - 2.22%
Automatic Data Processing Inc.,
2.000%, 10-1-08	$	419		419
Danaher Corporation,
1.800%, 10-3-08		4,610		4,610
IBM International Group Capital LLC (International       Business Machines Corporation),
2.280%, 10-2-08		3,000		3,000
Johnson & Johnson,
2.030%, 11-4-08		4,000		3,992
				12,021
United States Government Obligations - 1.54%
United States Treasury Bills:
0.150%, 10-9-08		5,360		5,360
0.320%, 10-30-08		3,000		2,999
				8,359
TOTAL SHORT-TERM SECURITIES - 3.76%			$	20,380
(Cost: $20,380)
TOTAL INVESTMENT SECURITIES - 98.41%			$	534,346
(Cost: $529,987)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.59%				8,654
NET ASSETS - 100.00%			$	543,000

Notes to Schedule of Investments

(A)No dividends were paid during the preceding 12 months.

See Accompanying Notes to Financial Statements.

Statement of Assets and Liabilities
     IVY LARGE CAP GROWTH FUND
     September 30, 2008
     (In Thousands, Except for Per Share Amounts)                                                           (Unaudited)

ASSETS
Investment securities - at value (cost - $529,987)	$	534,346
Receivables:
Fund shares sold		8,113
Investment securities sold		4,296
Dividends and interest		451
Prepaid and other assets		347
Total assets		547,553
LIABILITIES
Payable for investment securities purchased		2,762
Payable to Fund shareholders		1,106
Due to custodian		523
Accrued shareholder servicing		136
Accrued accounting services fee		12
Accrued management fee		10
Accrued distribution and service fees		4
Total liabilities		4,553
Total net assets	$	543,000
NET ASSETS
$0.01 par value capital stock:
Capital stock	$	469
Additional paid-in capital		565,252
Accumulated undistributed income (loss):
Accumulated net investment loss		(3	)
Accumulated net realized loss on investment transactions		(27,077	)
Net unrealized appreciation in value of investments		4,359
Net assets applicable to outstanding units of capital	$	543,000
Net asset value per share (net assets divided by shares outstanding):
Class A	$11.60
Class B	$10.49
Class C	$10.82
Class E	$11.60
Class I	$11.87
Class R	$11.50
Class Y	$11.76
Capital shares outstanding:
Class A		30,028
Class B		969
Class C		3,510
Class E		51
Class I		4,784
Class R		250
Class Y		7,326
Capital shares authorized		255,000

See Accompanying Notes to Financial Statements.

Statement of Operations
     IVY LARGE CAP GROWTH FUND
     For the Six Months Ended September 30, 2008
     (In Thousands)                                                                                                             (Unaudited)

INVESTMENT INCOME
Income:
Dividends (net of foreign withholding taxes of $41)	$	2,770
Interest and amortization		275
Total income		3,045
Expenses:
Investment management fee		1,707
Distribution and service fees:
Class A		392
Class B		63
Class C		193
Class E		1
Class R		5
Class Y		135
Shareholder servicing:
Class A		426
Class B		33
Class C		49
Class E		2
Class I		13
Class R		2
Class Y		82
Accounting services fee		72
Custodian fees		16
Audit fees		14
Legal fees		3
Other		166
Total		3,374
Less expenses in excess of limit		(359	)
Total expenses		3,015
Net investment income		30
REALIZED AND UNREALIZED LOSS
ON INVESTMENTS
Realized net loss on investments		(16,224	)
Unrealized depreciation in value of investments during the period		(56,176	)
Net loss on investments		(72,400	)
Net decrease in net assets resulting from operations	$	(72,370	)

See Accompanying Notes to Financial Statements.

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

	For the six months ended September 30,				For the fiscal year ended March 31,
	2008				2008
INCREASE IN NET ASSETS
Operations:
Net investment income (loss)		$	30		$	(754	)
Realized net gain (loss) on investments			(16,224	)		1,641
Unrealized appreciation (depreciation)			(56,176	)		13,352
Net increase (decrease) in net assets                       resulting from operations			(72,370	)		14,239
Distributions to shareholders from:(1)
Net investment income:
Class A			(––	)		(––	)
Class B			(––	)		(––	)
Class C			(––	)		(––	)
Class E			(––	)		(––	)
Class I			(––	)		(––	)
Class R			(––	)		(––	)
Class Y			(––	)		(––	)
Realized gains on investment transactions:
Class A			(––	)		(2,520	)
Class B			(––	)		(133	)
Class C			(––	)		(253	)
Class E			(––	)		(2	)
Class I			(––	)		(11	)
Class R			(––	)		(3	)
Class Y			(––	)		(904	)
			(––	)		(3,826	)
Capital share transactions			178,853			174,385
Total increase			106,483			184,798
NET ASSETS
Beginning of period			436,517			251,719
End of period		$	543,000		$	436,517
Accumulated net investment loss		$	(3	)	$	(33	)

(1)See "Financial Highlights" on pages 51 - 57.

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	13.17		$	11.82		$	11.61		$	9.54		$	9.27		$	7.24
Income (loss) from       investment operations:
Net investment             income (loss)			0.01	(1)		(0.02	)(1)		(0.03	)		(0.06	)	(0.03		)	(0.04		)
Net realized and unrealized             gain (loss) on investments			(1.58	)(1)		1.49	(1)		0.24			2.13			0.30			2.07
Total from investment operations			(1.57	)		1.47			0.21			2.07			0.27			2.03
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Capital gains			(0.00	)		(0.12	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Total distributions			(0.00	)		(0.12	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Net asset value, end of period		$	11.60		$	13.17		$	11.82		$	11.61		$	9.54		$	9.27
Total return(2)		- -11.92		%		12.32	%		1.81	%		21.70	%		2.91	%	28.04		%
Net assets, end of period       (in millions)		$349			$278			$162			$157			$82			$76
Ratio of expenses to average       net assets including       expense waiver			1.16	%(3)		1.15	%		1.20	%		1.41	%		1.50	%		1.55	%
Ratio of net investment income       (loss) to average net assets       including expense waiver			0.09	%(3)		- -0.13	%		- -0.25	%		- -0.62	%	- -0.31		%	- -0.89		%
Ratio of expenses to average       net assets excluding       expense waiver			1.35	%(3)		1.29	%		1.39	%		1.41	%(4)		1.52	%		1.55	%(4)
Ratio of net investment loss       to average net assets       excluding expense waiver			- -0.10	%(3)		- -0.27	%		- -0.44	%		- -0.62	%(4)	- -0.33		%	- -0.89		%(4)
Portfolio turnover rate			33	%		79	%		93	%		79	%		131	%		162	%

(1)Based on average weekly shares outstanding.

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

(3)Annualized.

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

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	11.98		$	10.89		$	10.83		$	8.99		$	8.83		$	6.99
Income (loss) from       investment operations:
Net investment loss			(0.07	)(1)		(0.16	)		(0.12	)		(0.14	)	(0.05		)	(0.13		)
Net realized and unrealized             gain (loss) on investments			(1.42	)(1)		1.37			0.18			1.98			0.21			1.97
Total from investment operations			(1.49	)		1.21			0.06			1.84			0.16			1.84
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Capital gains			(0.00	)		(0.12	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Total distributions			(0.00	)		(0.12	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Net asset value, end of period		$	10.49		$	11.98		$	10.89		$	10.83		$	8.99		$	8.83
Total return		- -12.44		%		10.98	%		0.55	%		20.47	%		1.81	%	26.32		%
Net assets, end of period       (in millions)		$10			$13			$12			$11			$8			$5
Ratio of expenses to       average net assets			2.41	%(2)		2.32	%		2.42	%		2.45	%		2.53	%		2.85	%
Ratio of net investment       loss to average net assets			- -1.18	%(2)		- -1.28	%		- -1.48	%		- -1.65	%	- -1.30		%	- -2.16		%
Portfolio turnover rate			33	%		79	%		93	%		79	%		131	%		162	%

(1)Based on average weekly shares outstanding.

(2)Annualized.

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	12.33		$	11.18		$	11.09		$	9.18		$	8.99		$	7.08
Income (loss) from       investment operations:
Net investment loss			(0.05	)(1)		(0.13	)(1)		(0.12	)		(0.10	)	(0.09		)	(0.11		)
Net realized and unrealized             gain (loss) on investments			(1.46	)(1)		1.40	(1)		0.21			2.01			0.28			2.02
Total from investment operations			(1.51	)		1.27			0.09			1.91			0.19			1.91
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Capital gains			(0.00	)		(0.12	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Total distributions			(0.00	)		(0.12	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Net asset value, end of period		$	10.82		$	12.33		$	11.18		$	11.09		$	9.18		$	8.99
Total return		- -12.25		%		11.23	%		0.81	%		20.81	%		2.11	%	26.98		%
Net assets, end of period       (in millions)		$38			$34			$19			$17			$12			$11
Ratio of expenses to average       net assets including       expense waiver			2.05	%(2)		2.07	%		2.18	%		2.21	%		2.25	%		2.44	%
Ratio of net investment loss       to average net assets       including expense waiver			- -0.81	%(2)		- -1.04	%		- -1.23	%		- -1.42	%	- -1.06		%	- -1.75		%
Ratio of expenses to average       net assets excluding       expense waiver			2.05	%(2)(3)		2.07	%(3)		2.18	%(3)		2.21	%(3)		2.28	%		2.44	%(3)
Ratio of net investment loss       to average net assets       excluding expense waiver			- -0.81	%(2)(3)		- -1.04	%(3)		- -1.23	%(3)		- -1.42	%(3)	- -1.09		%	- -1.75		%(3)
Portfolio turnover rate			33	%		79	%		93	%		79	%		131	%		162	%

(1)Based on average weekly shares outstanding.
(2)Annualized.
(3)There was no waiver of expenses during the period.

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	13.16		$	11.84
Income (loss) from investment operations:
Net investment income (loss)			0.01	(2)		(0.02	)(2)
Net realized and unrealized gain (loss) on investments			(1.57	)(2)		1.46	(2)
Total from investment operations			(1.56	)		1.44
Less distributions from:
Net investment income			(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.12	)
Total distributions			(0.00	)		(0.12	)
Net asset value, end of period		$	11.60		$	13.16
Total return(3)		- -11.85		%		12.05	%
Net assets, end of period (in thousands)		$588			$439
Ratio of expenses to average net assets       including expense waiver			1.16	%(4)		1.15	%(4)
Ratio of net investment income (loss) to average       net assets including expense waiver			0.09	%(4)		- -0.13	%(4)
Ratio of expenses to average net assets       excluding expense waiver			1.92	%(4)		1.75	%(4)
Ratio of net investment loss to average net assets       excluding expense waiver			- -0.67	%(4)		- -0.73	%(4)
Portfolio turnover rate			33	%		79	%(5)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

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

(4)Annualized.

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

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	13.46		$	11.99
Income (loss) from investment operations:
Net investment income			0.02	(2)		0.01	(2)
Net realized and unrealized gain (loss) on investments			(1.61	)(2)		1.58	(2)
Total from investment operations			(1.59	)		1.59
Less distributions from:
Net investment income			(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.12	)
Total distributions			(0.00	)		(0.12	)
Net asset value, end of period		$	11.87		$	13.46
Total return		- -11.81		%		13.15	%
Net assets, end of period (in millions)		$57			$2
Ratio of expenses to average net assets			0.94	%(3)		0.96	%(3)
Ratio of net investment income to average net assets			0.28	%(3)		0.09	%(3)
Portfolio turnover rate			33	%		79	%(4)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

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

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,						For the period from 12-29-05(1) to
	9-30-08				2008			2007			3-31-06
Net asset value, beginning of period		$	13.08		$	11.78		$	11.60		$	11.27
Income (loss) from investment operations:
Net investment loss			(0.02	)(2)		(0.06	)(2)		(0.06	)		(0.03	)
Net realized and unrealized gain             (loss) on investments			(1.56	)(2)		1.48	(2)		0.24			0.36
Total from investment operations			(1.58	)		1.42			0.18			0.33
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.12	)		(0.00	)		(0.00	)
Total distributions			(0.00	)		(0.12	)		(0.00	)		(0.00	)
Net asset value, end of period		$	11.50		$	13.08		$	11.78		$	11.60
Total return		- -12.08		%		11.94	%		1.55	%		2.93	%
Net assets, end of period (in thousands)		$2,878			$761			$117			$103
Ratio of expenses to average net assets			1.48	%(3)		1.49	%		1.51	%		1.56	%(3)
Ratio of net investment loss       to average net assets			- -0.25	%(3)		- -0.48	%		- -0.57	%		- -0.88	%(3)
Portfolio turnover rate			33	%		79	%		93	%		79	%(4)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(4)For the 12 months ended March 31, 2006.

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	13.35		$	11.97		$	11.74		$	9.62		$	9.32		$	7.26
Income (loss) from       investment operations:
Net investment income (loss)			0.01	(1)		(0.01	)(1)		(0.01	)		(0.04	)		0.00		(0.03		)
Net realized and unrealized             gain (loss) on investments			(1.60	)(1)		1.51	(1)		0.24			2.16			0.30			2.09
Total from investment operations			(1.59	)		1.50			0.23			2.12			0.30			2.06
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Capital gains			(0.00	)		(0.12	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Total distributions			(0.00	)		(0.12	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Net asset value, end of period		$	11.76		$	13.35		$	11.97		$	11.74		$	9.62		$	9.32
Total return		- -11.91		%		12.42	%		1.96	%		22.04	%		3.22	%	28.38		%
Net assets, end of period       (in millions)		$86			$109			$59			$66			$50			$59
Ratio of expenses to average       net assets including       expense waiver			1.06	%(2)		1.06	%		1.08	%		1.20	%		1.20	%		1.26	%
Ratio of net investment income       (loss) to average net assets       including expense waiver			0.18	%(2)		- -0.04	%		- -0.13	%		- -0.40	%	- -0.01		%	- -0.64		%
Ratio of expenses to average       net assets excluding       expense waiver			1.18	%(2)		1.19	%		1.19	%		1.21	%		1.25	%		1.26	%(3)
Ratio of net investment income       (loss) to average net assets       excluding expense waiver			0.06	%(2)		- -0.17	%		- -0.24	%		- -0.41	%	- -0.06		%	- -0.64		%(3)
Portfolio turnover rate			33	%		79	%		93	%		79	%		131	%		162	%

(1)Based on average weekly shares outstanding.

(2)Annualized.

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

See Accompanying Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY MID CAP GROWTH FUND

Portfolio Highlights

On September 30, 2008, the Ivy Mid Cap Growth Fund had net assets totaling $138,920
(in thousands) invested in a diversified portfolio of:

89.47%	Domestic Common Stocks
8.26%	Cash and Cash Equivalents
2.27%	Foreign Common Stocks

Sector Weightings

As a shareholder of the Fund, for every $100 you had invested on September 30, 2008,
your Fund owned:

Information Technology Stocks	$	24.21
Health Care Stocks	$	15.89
Industrials Stocks	$	15.16
Consumer Discretionary Stocks	$	12.87
Financials Stocks	$	9.99
Cash and Cash Equivalents	$	8.26
Energy Stocks	$	6.94
Consumer Staples Stocks	$	4.12
Miscellaneous Stocks(1)	$	2.56

(1)Includes $1.77 Materials Stocks and $0.79 Utilities Stocks.

The Investments of Ivy Mid Cap Growth Fund
September 30, 2008
(In Thousands)                                                                                                                       (Unaudited)
COMMON STOCKS	Shares			Value
Air Freight & Logistics - 3.46%
C.H. Robinson Worldwide, Inc.		53	$	2,702
Expeditors International of Washington, Inc.		60		2,109
				4,811
Apparel Retail - 3.85%
J. Crew Group, Inc. (A)		95		2,727
Urban Outfitters, Inc. (A)		82		2,626
				5,353
Application Software - 1.42%
Solera Holdings, Inc. (A)		69		1,970
Auto Parts & Equipment - 0.46%
BorgWarner Inc.		19		632
Catalog Retail - 1.23%
Coldwater Creek Inc. (A)		294		1,708
Computer Storage & Peripherals - 3.83%
Data Domain, Inc. (A)		133		2,967
NetApp, Inc. (A)		129		2,358
				5,325
Data Processing & Outsourced Services - 5.54%
Global Payments Inc.		96		4,284
Paychex, Inc.		103		3,405
				7,689
Department Stores - 1.27%
Saks Incorporated (A)		190		1,759
Distillers & Vintners - 2.03%
Brown-Forman Corporation, Class B		39		2,822
Electrical Components & Equipment - 1.45%
Cooper Industries, Ltd., Class A		24		941
Hubbell Incorporated, Class B		31		1,079
				2,020
Electronic Equipment & Instruments - 1.14%
FLIR Systems, Inc. (A)		41		1,587
Environmental & Facilities Services - 2.95%
Stericycle, Inc. (A)		70		4,104
Food Retail - 1.17%
Whole Foods Market, Inc. (B)		81		1,628
Gas Utilities - 0.79%
Equitable Resources, Inc.		30		1,099
Health Care Distributors - 3.43%
Henry Schein, Inc. (A)		88		4,757
Health Care Equipment - 7.83%
C. R. Bard, Inc.		52		4,929
Hologic, Inc. (A)		159		3,059
Hospira, Inc. (A)		76		2,886
				10,874
Health Care Supplies - 2.44%
DENTSPLY International Inc.		90		3,395
Industrial Machinery - 3.82%
Donaldson Company, Inc.		26		1,083
Graco Inc.		30		1,067
IDEX Corporation		102		3,152
				5,302
Internet Software & Services - 4.01%
Akamai Technologies, Inc. (A)		96		1,664
DealerTrack Holdings, Inc. (A)		95		1,596
eBay Inc. (A)		103		2,314
				5,574
Investment Banking & Brokerage - 1.68%
TD Ameritrade Holding Corporation (A)		142		2,337
Motorcycle Manufacturers - 1.10%
Harley-Davidson, Inc.		41		1,524
Office Electronics - 0.48%
Zebra Technologies Corporation, Class A (A)		24		665
Oil & Gas Equipment & Services - 4.26%
BJ Services Company		58		1,118
Complete Production Services, Inc. (A)		59		1,187
Dresser-Rand Group Inc. (A)		35		1,109
National Oilwell Varco, Inc. (A)		22		1,123
Smith International, Inc.		24		1,378
				5,915
Oil & Gas Exploration & Production - 2.68%
Continental Resources, Inc. (A)		8		294
Noble Energy, Inc.		40		2,240
XTO Energy Inc.		26		1,197
				3,731
Paper Packaging - 1.76%
Packaging Corporation of America		62		1,446
Sealed Air Corporation		46		1,004
				2,450
Personal Products - 0.92%
Bare Escentuals, Inc. (A)		117		1,272
Pharmaceuticals - 2.20%
Allergan, Inc.		59		3,054
Property & Casualty Insurance - 1.59%
AXIS Capital Holdings Limited		70		2,209
Publishing - 1.62%
Meredith Corporation		80		2,255
Regional Banks - 4.76%
Marshall & Ilsley Corporation		49		987
Signature Bank (A)		58		2,043
Synovus Financial Corp.		186		1,923
Zions Bancorporation		43		1,654
				6,607
Research & Consulting Services - 0.67%
Dun & Bradstreet Corporation (The)		10		925
Restaurants - 2.28%
Chipotle Mexican Grill, Inc., Class A (A)		19		1,049
P.F. Chang's China Bistro, Inc. (A)		90		2,119
				3,168
Semiconductors - 6.67%
Broadcom Corporation, Class A (A)		103		1,917
Linear Technology Corporation		48		1,457
Microchip Technology Incorporated		144		4,234
PMC-Sierra, Inc. (A)		223		1,656
				9,264
Specialized Finance - 1.96%
CME Group Inc.		7		2,721
Specialty Stores - 1.06%
PetSmart, Inc.		60		1,476
Systems Software - 1.12%
McAfee, Inc. (A)		46		1,561
Trading Companies & Distributors - 2.81%
Fastenal Company		79		3,899
TOTAL COMMON STOCKS - 91.74%			$	127,442
(Cost: $124,951)

SHORT-TERM SECURITIES	Principal
Commercial Paper - 7.23%
Automatic Data Processing Inc.,
2.000%, 10-1-08	$	2,056	2,056
Merck & Co., Inc.,
2.100%, 10-15-08		2,000	1,998
Shell International Finance B.V. and Royal Dutch Shell plc       (Royal Dutch Shell plc),
2.100%, 10-9-08		6,000	5,997
			10,051

United States Government Obligations - 1.44%
United States Treasury Bills,
0.300%, 10-23-08	2,000		2,000
TOTAL SHORT-TERM SECURITIES - 8.67%		$	12,051
(Cost: $12,051)
TOTAL INVESTMENT SECURITIES - 100.41%		$	139,493
(Cost: $137,002)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.41%)			(573	)
NET ASSETS - 100.00%		$	138,920

Notes to Schedule of Investments
(A)No dividends were paid during the preceding 12 months.
(B)Security serves as cover for the following written options outstanding at September 30, 2008:
	Underlying Security	Contracts Subject to Call	Expiration Month/ Exercise Price	Premium Received		Market Value
	Whole Foods Market, Inc.:	1	November/24.0		$116		$35
See Accompanying Notes to Financial Statements.

Statement of Assets and Liabilities
     IVY MID CAP GROWTH FUND
     September 30, 2008
     (In Thousands, Except for Per Share Amounts)                                                           (Unaudited)

ASSETS
Investment securities - at value (cost - $137,002)	$	139,493
Receivables:
Dividends and interest		140
Fund shares sold		136
Prepaid and other assets		132
Total assets		139,901
LIABILITIES
Payable for investment securities purchased		513
Payable to Fund shareholders		345
Accrued shareholder servicing		72
Outstanding written options - at value (premium received $116)		35
Accrued accounting services fee		6
Due to custodian		6
Accrued management fee		3
Accrued distribution and service fees		1
Total liabilities		981
Total net assets	$	138,920
NET ASSETS
$0.01 par value capital stock:
Capital stock	$	121
Additional paid-in capital		149,993
Accumulated undistributed income (loss):
Accumulated net investment loss		(440	)
Accumulated net realized loss on investment transactions		(13,326	)
Net unrealized appreciation in value of investments		2,572
Net assets applicable to outstanding units of capital	$	138,920
Net asset value per share (net assets divided by shares outstanding):
Class A	$11.56
Class B	$10.61
Class C	$10.91
Class E	$11.43
Class I	$11.86
Class R	$11.52
Class Y	$11.76
Capital shares outstanding:
Class A		9,416
Class B		792
Class C		853
Class E		41
Class I		35
Class R		11
Class Y		963
Capital shares authorized		200,000

See Accompanying Notes to Financial Statements.

Statement of Operations
     IVY MID CAP GROWTH FUND
     For the Six Months Ended September 30, 2008
     (In Thousands)                                                                                                             (Unaudited)

INVESTMENT LOSS
Income:
Dividends (net of foreign withholding taxes of $––*)	$	668
Interest and amortization		150
Total income		818
Expenses:
Investment management fee		636
Shareholder servicing:
Class A		245
Class B		31
Class C		23
Class E		4
Class I		––	*
Class R		––	*
Class Y		10
Distribution and service fees:
Class A		146
Class B		48
Class C		50
Class E		1
Class R		––	*
Class Y		15
Accounting services fee		35
Audit fees		13
Custodian fees		6
Legal fees		1
Other		49
Total		1,313
Less expenses in excess of limit		(73	)
Total expenses		1,240
Net investment loss		(422	)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Realized net gain on securities		8,826
Realized net loss on written options		(1,697	)
Realized net gain on investments		7,129
Unrealized depreciation in value of securities during the period		(21,872	)
Unrealized appreciation in value of written options during the period		265
Unrealized depreciation in value of investments during the period		(21,607	)
Net loss on investments		(14,478	)
Net decrease in net assets resulting from operations	$	(14,900	)

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

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

	For the six months ended September 30,				For the fiscal year ended March 31,
	2008				2008
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss		$	(422	)	$	(1,156	)
Realized net gain on investments			7,129			14,240
Unrealized depreciation			(21,607	)		(17,001	)
Net decrease in net assets                       resulting from operations			(14,900	)		(3,917	)
Distributions to shareholders from:(1)
Net investment income:
Class A			(––	)		(––	)
Class B			(––	)		(––	)
Class C			(––	)		(––	)
Class E			(––	)		(––	)
Class I			(––	)		(––	)
Class R			(––	)		(––	)
Class Y			(––	)		(––	)
Realized gains on investment transactions:
Class A			(––	)		(––	)
Class B			(––	)		(––	)
Class C			(––	)		(––	)
Class E			(––	)		(––	)
Class I			(––	)		(––	)
Class R			(––	)		(––	)
Class Y			(––	)		(––	)
			(––	)		(––	)
Capital share transactions			12,849			7,420
Total increase (decrease)			(2,051	)		3,503
NET ASSETS
Beginning of period			140,971			137,468
End of period		$	138,920		$	140,971
Accumulated net investment loss		$	(440	)	$	(18	)

(1)See "Financial Highlights" on pages 67 - 73.

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	12.77		$	13.07		$	12.59		$	9.99		$	9.09		$	6.67
Income (loss) from       investment operations:
Net investment loss			(0.04	)		(0.09	)		(0.06	)		(0.04	)	(0.09		)	(0.08		)
Net realized and unrealized             gain (loss) on investments			(1.17	)		(0.21	)		0.54			2.64			0.99			2.50
Total from investment operations			(1.21	)		(0.30	)		0.48			2.60			0.90			2.42
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Net asset value, end of period		$	11.56		$	12.77		$	13.07		$	12.59		$	9.99		$	9.09
Total return(1)			- -9.48	%		- -2.37	%		3.89	%		26.03	%		9.90	%	36.28		%
Net assets, end of period       (in millions)		$109			$108			$104			$105			$68			$50
Ratio of expenses to average       net assets including       expense waiver			1.56	%(2)		1.60	%		1.59	%		1.62	%		1.65	%		1.84	%
Ratio of net investment loss to       average net assets including       expense waiver			- -0.48	%(2)		- -0.67	%		- -0.48	%		- -0.30	%	- -0.95		%	- -1.20		%
Ratio of expenses to average       net assets excluding       expense waiver			1.64	%(2)		1.60	%(3)		1.59	%(3)		1.62	%(3)		1.70	%		1.89	%
Ratio of net investment loss to       average net assets excluding       expense waiver			- -0.56	%(2)		- -0.67	%(3)		- -0.48	%(3)		- -0.30	%(3)	- -1.00		%	- -1.25		%
Portfolio turnover rate			30	%		42	%		25	%		28	%		25	%		24	%

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

(2)Annualized.

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

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	11.79		$	12.18		$	11.85		$	9.50		$	8.75		$	6.49
Income (loss) from       investment operations:
Net investment loss			(0.09	)		(0.30	)		(0.23	)		(0.18	)	(0.23		)	(0.17		)
Net realized and unrealized             gain (loss) on investments			(1.09	)		(0.09	)		0.56			2.53			0.98			2.43
Total from investment operations			(1.18	)		(0.39	)		0.33			2.35			0.75			2.26
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Net asset value, end of period		$	10.61		$	11.79		$	12.18		$	11.85		$	9.50		$	8.75
Total return		- -10.01		%		- -3.20	%		2.79	%		24.74	%		8.57	%	34.82		%
Net assets, end of period       (in millions)		$9			$9			$11			$12			$11			$12
Ratio of expenses to average       net assets including       expense waiver			2.75	%(1)		2.56	%		2.62	%		2.70	%		2.81	%		3.04	%
Ratio of net investment loss to       average net assets including       expense waiver			- -1.66	%(1)		- -1.62	%		- -1.52	%		- -1.43	%	- -2.12		%	- -2.37		%
Ratio of expenses to average       net assets excluding       expense waiver			2.75	%(1)(2)		2.56	%(2)		2.62	%(2)		2.70	%(2)		2.81	%(2)		3.09	%
Ratio of net investment loss to       average net assets excluding       expense waiver			- -1.66	%(1)(2)		- -1.62	%(2)		- -1.52	%(2)		- -1.43	%(2)	- -2.12		%(2)	- -2.43		%
Portfolio turnover rate			30	%		42	%		25	%		28	%		25	%		24	%

(1)Annualized.

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

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	12.09		$	12.48		$	12.10		$	9.67		$	8.86		$	6.56
Income (loss) from       investment operations:
Net investment loss			(0.06	)		(0.25	)		(0.19	)		(0.12	)	(0.15		)	(0.13		)
Net realized and unrealized             gain (loss) on investments			(1.12	)		(0.14	)		0.57			2.55			0.96			2.43
Total from investment operations			(1.18	)		(0.39	)		0.38			2.43			0.81			2.30
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)	(0.00		)
Net asset value, end of period		$	10.91		$	12.09		$	12.48		$	12.10		$	9.67		$	8.86
Total return			- -9.76	%		- -3.13	%		3.14	%		25.13	%		9.14	%	35.06		%
Net assets, end of period       (in millions)		$9			$10			$12			$14			$11			$10
Ratio of expenses to average       net assets including       expense waiver			2.35	%(1)		2.35	%		2.35	%		2.35	%		2.35	%		2.59	%
Ratio of net investment loss to       average net assets including       expense waiver			- -1.26	%(1)		- -1.41	%		- -1.25	%		- -1.09	%	- -1.66		%	- -1.98		%
Ratio of expenses to average       net assets excluding       expense waiver			2.53	%(1)		2.38	%		2.42	%		2.40	%		2.46	%		2.64	%
Ratio of net investment loss to       average net assets excluding       expense waiver			- -1.44	%(1)		- -1.44	%		- -1.32	%		- -1.14	%	- -1.77		%	- -2.03		%
Portfolio turnover rate			30	%		42	%		25	%		28	%		25	%		24	%

(1)Annualized.

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	12.68		$	13.13
Loss from investment operations:
Net investment loss			(0.07	)		(0.22	)(2)
Net realized and unrealized loss on investments			(1.18	)		(0.23	)(2)
Total from investment operations			(1.25	)		(0.45	)
Less distributions from:
Net investment income			(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)
Total distributions			(0.00	)		(0.00	)
Net asset value, end of period		$	11.43		$	12.68
Total return(3)			- -9.86	%		- -3.43	%
Net assets, end of period (in thousands)		$464			$413
Ratio of expenses to average net assets       including expense waiver			2.29	%(4)		2.52	%(4)
Ratio of net investment loss to average net       assets including expense waiver			- -1.21	%(4)		- -1.61	%(4)
Ratio of expenses to average net assets       excluding expense waiver			3.03	%(4)		2.52	%(4)(5)
Ratio of net investment loss to average net       assets excluding expense waiver			- -1.95	%(4)		- -1.61	%(4)(5)
Portfolio turnover rate			30	%		42	%(6)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

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

(4)Annualized.

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

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

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	13.07		$	13.28
Loss from investment operations:
Net investment loss			(0.00	)(2)		(0.03	)(2)
Net realized and unrealized loss on investments			(1.21	)(2)		(0.18	)(2)
Total from investment operations			(1.21	)		(0.21	)
Less distributions from:
Net investment income			(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)
Total distributions			(0.00	)		(0.00	)
Net asset value, end of period		$	11.86		$	13.07
Total return			- -9.26	%		- -1.58	%
Net assets, end of period (in thousands)			$418		$508
Ratio of expenses to average net assets			1.16	%(3)		1.17	%(3)
Ratio of net investment loss to average net assets			- -0.06	%(3)		- -0.23	%(3)
Portfolio turnover rate			30	%		42	%(4)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

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

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,						For the period from 12-29-05(1) to
	9-30-08				2008			2007			3-31-06
Net asset value, beginning of period		$	12.73		$	13.05		$	12.58		$	11.77
Income (loss) from investment operations:
Net investment income (loss)			(0.04	)		(0.10	)		(0.07	)		0.02
Net realized and unrealized             gain (loss) on investments			(1.17	)		(0.22	)		0.54			0.79
Total from investment operations			(1.21	)		(0.32	)		0.47			0.81
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)
Net asset value, end of period		$	11.52		$	12.73		$	13.05		$	12.58
Total return			- -9.51	%		- -2.45	%		3.74	%		6.88	%
Net assets, end of period (in thousands)		$131			$133			$111			$107
Ratio of expenses to average net assets			1.72	%(2)		1.68	%		1.71	%		1.75	%(2)
Ratio of net investment income       (loss) to average net assets			- -0.61	%(2)		- -0.75	%		- -0.59	%		0.73	%(2)
Portfolio turnover rate			30	%		42	%		25	%		28	%(3)

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the 12 months ended March 31, 2006.

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	12.97		$	13.23		$	12.70		$	10.04		$	9.09		$	6.67
Income (loss) from       investment operations:
Net investment             income (loss)			(0.01	)		(0.07	)		(0.03	)		0.05	(1)		(0.06	)	(0.05		)
Net realized and unrealized             gain (loss) on investments			(1.20	)		(0.19	)		0.56			2.61	(1)		1.01			2.47
Total from investment       operations			(1.21	)		(0.26	)		0.53			2.66			0.95			2.42
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)
Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)	(0.00		)
Net asset value, end of period		$	11.76		$	12.97		$	13.23		$	12.70		$	10.04		$	9.09
Total return			- -9.33	%		- -1.97	%		4.17	%		26.50	%		10.45	%	36.28		%
Net assets, end of period       (in millions)		$11			$12			$10		$9				$2			$1
Ratio of expenses to average       net assets including       expense waiver			1.26	%(2)		1.25	%		1.25	%		1.25	%		1.25	%		1.72	%
Ratio of net investment income       (loss) to average net assets       including expense waiver			- -0.16	%(2)		- -0.33	%		- -0.15	%		0.43	%		- -0.55	%	- -0.91		%
Ratio of expenses to average       net assets excluding       expense waiver			1.41	%(2)		1.40	%		1.42	%		1.43	%		1.48	%		1.77	%
Ratio of net investment income       (loss) to average net assets       excluding expense waiver			- -0.31	%(2)		- -0.48	%		- -0.32	%		0.25	%		- -0.78	%	- -0.96		%
Portfolio turnover rate			30	%		42	%		25	%		28	%		25	%		24	%

(1)Based on average weekly shares outstanding.

(2)Annualized.

See Accompanying Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY SMALL CAP GROWTH FUND

Portfolio Highlights

On September 30, 2008, Ivy Small Cap Growth Fund had net assets totaling $368,106
(in thousands) invested in a diversified portfolio of:

81.67%	Domestic Common Stocks
13.57%	Cash and Cash Equivalents
4.76%	Foreign Common Stocks

Sector Weightings

As a shareholder of the Fund, for every $100 you had invested on September 30, 2008,
your Fund owned:

Information Technology Stocks	$	26.12
Health Care Stocks	$	15.35
Industrials Stocks	$	14.56
Cash and Cash Equivalents	$	13.57
Consumer Discretionary Stocks	$	12.23
Energy Stocks	$	7.77
Financials Stocks	$	5.46
Consumer Staples Stocks	$	4.94

The Investments of Ivy Small Cap Growth Fund
September 30, 2008
(In Thousands)                                                                                                                       (Unaudited)
COMMON STOCKS	Shares		Value
Aerospace & Defense - 1.90%
Ladish Co., Inc. (A)		345	$	7,004
Apparel Retail - 1.03%
Zumiez Inc. (A)		231		3,803
Apparel, Accessories & Luxury Goods - 1.43%
Under Armour, Inc., Class A (A)		165		5,247
Application Software - 11.50%
ACI Worldwide, Inc. (A)		626		11,002
Blackboard Inc. (A)		246		9,925
Concur Technologies, Inc. (A)		80		3,070
FactSet Research Systems, Inc.		143		7,447
Sonic Solutions (A)		804		3,542
Ultimate Software Group, Inc. (The) (A)		272		7,355
				42,341
Auto Parts & Equipment - 2.42%
LKQ Corporation (A)		414		7,029
Nissin Kogyo Co., Ltd. (B)		143		1,885
				8,914
Casinos & Gaming - 4.13%
Scientific Games Corporation, Class A (A)		661		15,219
Computer Hardware - 1.82%
Stratasys, Inc. (A)		382		6,687
Construction & Engineering - 1.69%
Chicago Bridge & Iron Company N.V., NY Shares		324		6,230
Construction & Farm Machinery & Heavy Trucks - 2.01%
Westinghouse Air Brake Technologies Corporation		144		7,377
Education Services - 3.22%
Capella Education Company (A)		216		9,318
K12 Inc. (A)		95		2,515
				11,833
Electrical Components & Equipment - 1.35%
General Cable Corporation (A)		140		4,974
Electronic Components - 2.68%
DTS, Inc. (A)		354		9,853
Electronic Manufacturing Services - 0.78%
Maxwell Technologies, Inc. (A)		25		340
Trimble Navigation Limited (A)		98		2,549
				2,889
Health Care Distributors - 1.12%
PSS World Medical, Inc. (A)		211		4,114
Health Care Equipment - 7.45%
ABIOMED, Inc. (A)		315		5,590
NuVasive, Inc. (A)		241		11,867
Volcano Corporation (A)		575		9,949
				27,406
Health Care Services - 2.09%
Healthways, Inc. (A)		477		7,704
Health Care Technology - 4.69%
Cerner Corporation (A)		265		11,823
Omnicell, Inc. (A)		310		4,078
Phase Forward Incorporated (A)		66		1,377
				17,278
Human Resource & Employment Services - 4.32%
Resources Connection, Inc. (A)		704		15,884
Insurance Brokers - 0.55%
eHealth, Inc. (A)		127		2,016
Internet Software & Services - 5.62%
Bankrate, Inc. (A)		137		5,376
CyberSource Corporation (A)		266		4,280
DealerTrack Holdings, Inc. (A)		128		2,147
Omniture, Inc. (A)		322		5,896
VistaPrint Limited (A)		90		2,972
				20,671
Oil & Gas Equipment & Services - 7.77%
Core Laboratories N.V.		64		6,454
Dril-Quip, Inc. (A)		361		15,655
Oceaneering International, Inc. (A)		122		6,511
				28,620
Packaged Foods & Meats - 2.30%
Smart Balance, Inc. (A)		698		4,594
TreeHouse Foods, Inc. (A)		130		3,858
				8,452
Personal Products - 2.64%
Alberto-Culver Company		218		5,928
Bare Escentuals, Inc. (A)		350		3,801
				9,729
Research & Consulting Services - 2.20%
Advisory Board Company (The) (A)		176		5,312
CoStar Group, Inc. (A)		62		2,799
				8,111
Specialized Finance - 4.91%
Financial Federal Corporation		163		3,733
Portfolio Recovery Associates, Inc. (A)		293		14,360
				18,093
Systems Software - 3.72%
MICROS Systems, Inc. (A)		513		13,692
Trucking - 1.09%
Knight Transportation, Inc.		237		4,018
TOTAL COMMON STOCKS - 86.43%			$	318,159
(Cost: $332,266)

SHORT-TERM SECURITIES	Principal
Commercial Paper - 12.82%
Air Products and Chemicals, Inc.,
1.500%, 10-1-08	$	8,180		8,180
Avon Capital Corp. (Avon Products, Inc.),
2.200%, 10-3-08		5,000		5,000
Campbell Soup Co.,
1.930%, 10-14-08		4,000		3,997
Danaher Corporation,
1.800%, 10-6-08		3,000		2,999
Illinois Tool Works Inc.,
2.270%, 10-20-08		5,000		4,994
Merck & Co., Inc.,
2.100%, 10-15-08		2,000		1,998
Procter & Gamble International Funding S.C.A.       (Procter & Gamble Company (The)),
2.100%, 10-7-08		4,000		3,999
Shell International Finance B.V. and Royal Dutch Shell plc       (Royal Dutch Shell plc),
2.100%, 10-9-08		7,000		6,997
Toyota Motor Credit Corporation,
2.650%, 10-7-08		5,000		4,998
Wisconsin Electric Power Co.,
2.750%, 10-10-08		4,000		3,997
				47,159
United States Government Obligations - 0.81%
United States Treasury Bills,
0.320%, 10-30-08		3,000		2,999
TOTAL SHORT-TERM SECURITIES - 13.63%			$	50,158
(Cost: $50,158)
TOTAL INVESTMENT SECURITIES - 100.06%			$	368,317
(Cost: $382,424)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.06%)				(211	)
NET ASSETS - 100.00%			$	368,106

Notes to Schedule of Investments

(A)No dividends were paid during the preceding 12 months.

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

See Accompanying Notes to Financial Statements.

Securities with an aggregate market value of $1,885, representing 0.51% of net assets, have been valued in good faith by the Valuation Committee subject to the supervision of the Board of Directors.

Statement of Assets and Liabilities
     IVY SMALL CAP GROWTH FUND
     September 30, 2008
     (In Thousands, Except for Per Share Amounts)                                                           (Unaudited)

ASSETS
Investment securities - at value (cost - $382,424)	$	368,317
Receivables:
Investment securities sold		3,004
Fund shares sold		160
Dividends and interest		23
Prepaid and other assets		47
Total assets		371,551
LIABILITIES
Payable for investment securities purchased		2,208
Payable to Fund shareholders		869
Accrued shareholder servicing		126
Due to custodian		55
Accrued accounting services fee		11
Accrued management fee		9
Accrued distribution and service fees		6
Other		161
Total liabilities		3,445
Total net assets	$	368,106
NET ASSETS
$0.01 par value capital stock:
Capital stock	$	389
Additional paid-in capital		414,654
Accumulated loss:
Accumulated net investment loss		(3,384	)
Accumulated net realized loss on investment transactions		(29,446	)
Net unrealized depreciation in value of investments		(14,107	)
Net assets applicable to outstanding units of capital	$	368,106
Net asset value per share (net assets divided by shares outstanding):
Class A	$9.47
Class B	$8.58
Class C	$8.80
Class E	$9.42
Class I	$10.80
Class R	$9.46
Class Y	$10.60
Capital shares outstanding:
Class A		9,514
Class B		1,047
Class C		17,576
Class E		65
Class I		137
Class R		39
Class Y		10,548
Capital shares authorized		375,000

See Accompanying Notes to Financial Statements.

Statement of Operations
     IVY SMALL CAP GROWTH FUND
     For the Six Months Ended September 30, 2008
     (In Thousands)                                                                                                            (Unaudited)

INVESTMENT LOSS
Income:
Interest and amortization	$	439
Dividends (net of foreign withholding taxes of $14)		229
Total income		668
Expenses:
Investment management fee		1,800
Distribution and service fees:
Class A		127
Class B		56
Class C		911
Class E		1
Class R		1
Class Y		158
Shareholder servicing:
Class A		189
Class B		32
Class C		270
Class E		4
Class I		1
Class R		––	*
Class Y		97
Accounting services fee		69
Audit fees		19
Custodian fees		9
Legal fees		5
Other		182
Total		3,931
Less expenses in excess of limit		(2	)
Total expenses		3,929
Net investment loss		(3,261	)
REALIZED AND UNREALIZED LOSS
ON INVESTMENTS
Realized net loss on investments		(24,681	)
Unrealized depreciation in value of investments during the period		(5,020	)
Net loss on investments		(29,701	)
Net decrease in net assets resulting from operations	$	(32,962	)

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

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

	For the six months ended September 30,				For the fiscal year ended March 31,
	2008				2008
DECREASE IN NET ASSETS
Operations:
Net investment loss		$	(3,261	)	$	(6,453	)
Realized net gain (loss) on investments			(24,681	)		65,663
Unrealized depreciation			(5,020	)		(98,127	)
Net decrease in net assets resulting                       from operations			(32,962	)		(38,917	)
Distributions to shareholders from:(1)
Net investment income:
Class A			(––	)		(––	)
Class B			(––	)		(––	)
Class C			(––	)		(––	)
Class E			(––	)		(––	)
Class I			(––	)		(––	)
Class R			(––	)		(––	)
Class Y			(––	)		(––	)
Realized gains on investment transactions:
Class A			(––	)		(15,185	)
Class B			(––	)		(2,019	)
Class C			(––	)		(32,390	)
Class E			(––	)		(82	)
Class I			(––	)		(240	)
Class R			(––	)		(25	)
Class Y			(––	)		(19,201	)
			(––	)		(69,142	)
Capital share transactions			(21,582	)		(6,971	)
Total decrease			(54,544	)	(115,030		)
NET ASSETS
Beginning of period			422,650			537,680
End of period		$	368,106		$	422,650
Accumulated net investment loss		$	(3,384	)	$	(123	)

(1)See "Financial Highlights" on pages 82 - 88.

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	10.31		$	12.98		$	14.87		$	12.32		$	11.36		$	8.25
Income (loss) from       investment operations:
Net investment loss			(0.07	)(1)		(0.13	)(1)		(0.12	)(1)		(0.21	)		(0.08	)		(0.08	)
Net realized and unrealized             gain (loss) on investments			(0.77	)(1)		(0.71	)(1)		0.18	(1)		3.22			1.04			3.19
Total from investment operations			(0.84	)		(0.84	)		0.06			3.01			0.96			3.11
Less distributions from:												��
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(1.83	)		(1.95	)		(0.46	)		(0.00	)		(0.00	)
Total distributions			(0.00	)		(1.83	)		(1.95	)		(0.46	)		(0.00	)		(0.00	)
Net asset value, end of period		$	9.47		$	10.31		$	12.98		$	14.87		$	12.32		$	11.36
Total return(2)			- -8.15	%		- -8.32	%		0.76	%		24.70	%		8.45	%		37.70	%
Net assets, end of period       (in millions)		$90			$97			$109			$141			$72			$92
Ratio of expenses to       average net assets			1.64	%(3)		1.56	%		1.49	%		1.50	%		1.54	%		1.48	%
Ratio of net investment       loss to average net assets			- -1.32	%(3)		- -1.00	%		- -0.86	%		- -0.90	%		- -1.14	%		- -1.21	%
Portfolio turnover rate			43	%		79	%		96	%		87	%		83	%		91	%

(1)Based on average weekly shares outstanding.

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

(3)Annualized.

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	9.39		$	11.97		$	13.99		$	11.73		$	10.91		$	8.01
Income (loss) from       investment operations:
Net investment loss		(0.18		)		(0.23	)		(0.24	)		(0.23	)		(0.23	)		(0.20	)
Net realized and unrealized             gain (loss) on investments		(0.63		)		(0.64	)		0.17			2.95			1.05			3.10
Total from investment operations		(0.81		)		(0.87	)		(0.07	)		2.72			0.82			2.90
Less distributions from:
Net investment income		(0.00		)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains		(0.00		)		(1.71	)		(1.95	)		(0.46	)		(0.00	)		(0.00	)
Total distributions		(0.00		)		(1.71	)		(1.95	)		(0.46	)		(0.00	)		(0.00	)
Net asset value, end of period		$	8.58		$	9.39		$	11.97		$	13.99		$	11.73		$	10.91
Total return		- -8.63		%		- -9.19	%		- -0.15	%		23.46	%		7.52	%		36.21	%
Net assets, end of period       (in millions)		$9			$12			$16			$19			$15			$13
Ratio of expenses to       average net assets			2.63	%(1)		2.45	%		2.45	%		2.45	%		2.52	%		2.57	%
Ratio of net investment       loss to average net assets		- -2.32		%(1)		- -1.87	%		- -1.82	%		- -1.86	%		- -2.11	%		- -2.29	%
Portfolio turnover rate			43	%		79	%		96	%		87	%		83	%		91	%

(1)Annualized.

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	9.62		$	12.22		$	14.20		$	11.87		$	11.02		$	8.07
Income (loss) from       investment operations:
Net investment loss		(0.15		)		(0.23	)		(0.23	)		(0.25	)		(0.24	)		(0.21	)
Net realized and unrealized             gain (loss) on investments		(0.67		)		(0.62	)		0.20			3.04			1.09			3.16
Total from investment operations		(0.82		)		(0.85	)		(0.03	)		2.79			0.85			2.95
Less distributions from:
Net investment income		(0.00		)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains		(0.00		)		(1.75	)		(1.95	)		(0.46	)		(0.00	)		(0.00	)
Total distributions		(0.00		)		(1.75	)		(1.95	)		(0.46	)		(0.00	)		(0.00	)
Net asset value, end of period		$	8.80		$	9.62		$	12.22		$	14.20		$	11.87		$	11.02
Total return		- -8.52		%		- -8.91	%		0.14	%		23.78	%		7.71	%		36.56	%
Net assets, end of period       (in millions)		$155			$187			$259			$328			$308			$334
Ratio of expenses to       average net assets			2.29	%(1)		2.20	%		2.20	%		2.20	%		2.26	%		2.31	%
Ratio of net investment       loss to average net assets		- -1.98		%(1)		- -1.62	%		- -1.57	%		- -1.62	%		- -1.85	%		- -2.03	%
Portfolio turnover rate			43	%		79	%		96	%		87	%		83	%		91	%

(1)Annualized.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY SMALL CAP GROWTH FUND
     Class E Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                            (Unaudited)

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	10.29		$	13.03
Loss from investment operations:
Net investment loss		(0.10		)(2)	(0.18		)(2)
Net realized and unrealized loss on investments		(0.77		)(2)	(0.77		)(2)
Total from investment operations		(0.87		)	(0.95		)
Less distributions from:
Net investment income		(0.00		)		(0.00	)
Capital gains		(0.00		)		(1.79	)
Total distributions		(0.00		)		(1.79	)
Net asset value, end of period		$	9.42		$	10.29
Total return(3)		- -8.46		%		- -9.15	%
Net assets, end of period (in millions)		$1			$1
Ratio of expenses to average net assets       including expense waiver			2.15	%(4)		2.26	%(4)
Ratio of net investment loss to average net       assets including expense waiver		- -1.83		%(4)		- -1.79	%(4)
Ratio of expenses to average net assets       excluding expense waiver			2.66	%(4)		2.26	%(4)
Ratio of net investment loss to average net       assets excluding expense waiver		- -2.34		%(4)		- -1.79	%(4)(5)
Portfolio turnover rate			43	%		79	%(6)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

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

(4)Annualized.

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

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY SMALL CAP GROWTH FUND
     Class I Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                            (Unaudited)

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	11.73		$	14.35
Income (loss) from investment operations:
Net investment income			(0.07	)		0.09
Net realized and unrealized loss on investments			(0.86	)		(0.82	)
Total from investment operations			(0.93	)		(0.73	)
Less distributions from:
Net investment income			(0.00	)		(0.00	)
Capital gains			(0.00	)		(1.89	)
Total distributions			(0.00	)		(1.89	)
Net asset value, end of period		$	10.80		$	11.73
Total return			- -7.93	%		- -6.82	%
Net assets, end of period (in millions)		$1			$2
Ratio of expenses to average net assets			1.08	%(2)		1.10	%(2)
Ratio of net investment loss to average net assets			- -0.77	%(2)		- -0.52	%(2)
Portfolio turnover rate			43	%		79	%(3)

(1)Commencement of operations of the class.

(2)Annualized.

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY SMALL CAP GROWTH FUND
     Class R Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended March 31,						For the period from 12-29-05(1) to
	9-30-08					2008			2007		3-31-06
Net asset value, beginning of period		$	10.30		$	12.96		$	14.87		$	13.78
Income (loss) from investment operations:
Net investment loss			(0.08	)		(0.19	)		(0.15	)		(0.04	)
Net realized and unrealized gain             (loss) on investments			(0.76	)		(0.65	)		0.19			1.13
Total from investment operations			(0.84	)		(0.84	)		0.04			1.09
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(1.82	)		(1.95	)		(0.00	)
Total distributions			(0.00	)		(1.82	)		(1.95	)		(0.00	)
Net asset value, end of period		$	9.46		$	10.30		$	12.96		$	14.87
Total return			- -8.16	%		- -8.35	%		0.62	%		7.91	%
Net assets, end of period (in thousands)		$365			$352			$114			$108
Ratio of expenses to average net assets			1.64	%(2)		1.64	%		1.63	%		1.67	%(2)
Ratio of net investment loss       to average net assets			- -1.31	%(2)		- -1.10	%		- -1.01	%		- -0.99	%(2)
Portfolio turnover rate			43	%		79	%		96	%		87	%(3)

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the 12 months ended March 31, 2006.

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	11.53		$	14.31		$	16.15		$	13.33		$	12.26		$	8.89
Income (loss) from       investment operations:
Net investment loss			(0.05	)		(0.11	)		(0.11	)		(0.16	)		(0.09	)		(0.10	)
Net realized and unrealized             gain (loss) on investments			(0.88	)		(0.81	)		0.22			3.44			1.16			3.47
Total from investment operations			(0.93	)		(0.92	)		0.11			3.28			1.07			3.37
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(1.86	)		(1.95	)		(0.46	)		(0.00	)		(0.00	)
Total distributions			(0.00	)		(1.86	)		(1.95	)		(0.46	)		(0.00	)		(0.00	)
Net asset value, end of period		$	10.60		$	11.53		$	14.31		$	16.15		$	13.33		$	12.26
Total return			- -8.07	%		- -8.13	%		1.02	%		24.86	%		8.73	%		37.91	%
Net assets, end of period       (in millions)		$112			$124			$154			$173			$115			$124
Ratio of expenses to       average net assets			1.34	%(1)		1.33	%		1.32	%		1.33	%		1.36	%		1.35	%
Ratio of net investment       loss to average net assets			- -1.02	%(1)		- -0.76	%		- -0.70	%		- -0.74	%		- -0.95	%		- -1.09	%
Portfolio turnover rate			43	%		79	%		96	%		87	%		83	%		91	%

(1)Annualized.

See Accompanying Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY ASSET STRATEGY FUND

Portfolio Highlights

On September 30, 2008, Ivy Asset Strategy Fund had net assets totaling $13,422,902
(in thousands) invested in a diversified portfolio of:

36.59%	Cash and Cash Equivalents
22.18%	Domestic Common Stocks
21.87%	Foreign Common Stocks
12.74%	Bullion (Gold)
3.27%	Other Government Securities
1.91%	United States Government Obligations
1.25%	Domestic and Foreign Corporate Debt Securities
0.19%	United States Government Agency Obligations

As a shareholder of the Fund, for every $100 you had invested on September 30, 2008, your Fund was invested by industry and geographic regions, respectively, as follows:

Asset Allocation

Stocks	$	44.05
Information Technology Stocks	$	8.26
Consumer Staples Stocks	$	8.09
Energy Stocks	$	7.41
Materials Stocks	$	6.11
Consumer Discretionary Stocks	$	4.28
Industrials Stocks	$	3.74
Health Care Stocks	$	3.27
Financials Stocks	$	2.89
Cash and Cash Equivalents	$	36.59
Bullion (Gold)	$	12.74
Bonds	$	6.62
Other Government Securities	$	3.27
United States Government Obligations	$	1.91
Corporate Debt Securities	$	1.25
United States Government Agency Obligations	$	0.19

Country Weightings

Cash and Cash Equivalents	$	36.59
North America	$	24.30
United States	$	24.28
Mexico	$	0.02
Bullion (Gold)	$	12.74
Pacific Basin	$	12.19
Other Pacific Basin(1)	$	4.91
China	$	3.67
Japan	$	3.61
Europe(2)	$	9.19
South America(3)	$	2.89
Bahamas/Caribbean(4)	$	1.97
Middle East(5)	$	0.13

(1)Includes $0.84 Australia, $0.10 Hong Kong, $0.89 India, $0.29 Singapore, $1.53 South Korea,
$1.22 Taiwan and $0.04 Vietnam.

(2)Includes $1.01 Finland, $0.83 France, $0.05 Luxembourg, $1.92 Norway, $1.27 Russia,
$2.06 Switzerland, and $2.05 United Kingdom.

(3)Includes $0.03 Argentina and $2.86 Brazil.

(4)Includes $0.22 Bahamas, $0.08 British Virgin Islands and $1.67 Cayman Islands.

(5)Includes $0.13 Egypt.

The Investments of Ivy Asset Strategy Fund
September 30, 2008
(In Thousands)                                                                                                                       (Unaudited)
COMMON STOCKS	Shares			Value
Agricultural Products - 0.00%
IOI Corporation Berhad (A)		- -	*	$	- -	*
Kuala Lumpur Kepong Berhad (A)		190			533
					533
Automobile Manufacturers - 1.14%
Honda Motor Co., Ltd. (A)(B)		5,044			152,993
Biotechnology - 3.27%
Genentech, Inc. (B)		2,726			241,702
Gilead Sciences, Inc. (B)		4,312			196,814
					438,516
Communications Equipment - 2.18%
Nokia Corporation, Series A, ADR		7,268			135,540
QUALCOMM Incorporated		3,645			156,670
					292,210
Computer Hardware - 3.02%
Hewlett-Packard Company		5,219			241,310
High Tech Computer Corp. (A)(B)	10,582				164,246
					405,556
Construction & Engineering - 0.13%
Orascom Construction Industries Company (OCI), GDR (A)		163			17,005
Construction & Farm Machinery & Heavy Trucks - 1.23%
Deere & Company		3,338			165,230
Diversified Banks - 2.82%
Industrial and Commercial Bank of China (Asia) Limited (A)(B)	625,077				377,794
Diversified Metals & Mining - 3.81%
BHP Billiton Plc (A)(B)	11,978				271,353
Southern Copper Corporation	12,569				239,808
					511,161
Education Services - 1.29%
New Oriental Education & Technology Group Inc., ADR (B)(C)		2,707			173,873
Fertilizers & Agricultural Chemicals - 1.31%
Monsanto Company		1,778			175,960
Food Distributors - 0.30%
Olam International Limited (A)	30,965				39,493
Heavy Electrical Equipment - 0.83%
ALSTOM (A)		1,470			111,560
Home Entertainment Software - 2.47%
Nintendo Co., Ltd. (A)		781			331,237
Hotels, Resorts & Cruise Lines - 0.82%
Ctrip.com International, Ltd.		2,846			110,010
Integrated Oil & Gas - 1.66%
Petroleo Brasileiro S.A. - Petrobras, ADR		5,069			222,799
Oil & Gas Drilling - 2.43%
SeaDrill Limited (A)		5,657			117,201
Transocean Inc.		1,901			208,828
					326,029
Oil & Gas Equipment & Services - 2.25%
Schlumberger Limited		2,072			161,770
Smith International, Inc.		2,387			139,964
					301,734
Oil & Gas Exploration & Production - 0.18%
OAO NOVATEK, GDR (A)		533			24,336
Oil & Gas Refining & Marketing - 0.89%
Reliance Industries Limited (A)		2,843			119,487
Packaged Foods & Meats - 1.88%
Nestle S.A., Registered Shares (A)		3,869			167,199
Perdigao S.A. (A)		4,667			85,647
					252,846
Personal Products - 0.34%
Hengan International Group Company Limited (A)	16,076				45,749
Railroads - 1.55%
ALL - America Latina Logistica S.A. (A)		7,656			52,584
Union Pacific Corporation		2,196			156,245
					208,829
Restaurants - 1.03%
YUM! Brands, Inc.		4,223			137,727
Semiconductor Equipment - 0.59%
Applied Materials, Inc.		5,275			79,862
Soft Drinks - 1.86%
Coca-Cola Company (The)		4,721			249,669
Specialized Finance - 0.03%
BM&F BOVESPA S.A. - Bolsa de Valores,       Mercadorias e Futuros (A)(B)(F)		1,044			4,597
Tobacco - 3.71%
Korea Tobacco & Ginseng Corporation (A)		2,746			204,966
Philip Morris International Inc.		6,083			292,616
					497,582
TOTAL COMMON STOCKS - 43.02%				$	5,774,377
(Cost: $6,573,787)
INVESTMENT FUNDS
Gold & Precious Metals - 0.99%
SPDR Gold Trust (B)		1,559			132,658
Multiple Industry - 0.04%
Vietnam Azalea Fund Limited (B)(D)(E)		1,100			5,071
TOTAL INVESTMENT FUNDS - 1.03%				$	137,729
(Cost: $146,622)

CORPORATE DEBT SECURITIES		Principal
Automobile Mfg. / Vehicle Parts - 0.00%
Hyundai Motor Company,
5.300%, 12-19-08 (F)		$	320		321
Banking - 0.03%
Banco BMG S.A.,
8.750%, 7-1-10 (G)			1,333		1,280
PT Bank Rakyat Indonesia (Persero),
7.750%, 10-30-13			1,950		1,942
Russian Standard Bank:
7.500%, 10-7-10			1,400		896
7.500%, 10-7-10 (G)			200		140
					4,258
Beverage / Bottling - 0.04%
AmBev International Finance Co. Ltd.,
9.500%, 7-24-17 (H)	BRL12,000				4,730
Building Products - 0.01%
Desarrolladora Homex, S.A. de C.V.,
7.500%, 9-28-15		$	900		792
Consumer Products / Tobacco - 0.00%
Central European Distribution Corporation,
8.000%, 7-25-12 (F)(H)	EUR320				410
Finance Companies - 0.08%
C5 Capital (SPV) Limited,
6.196%, 12-31-49 (G)(I)		$10,750			10,381
Toyota Motor Credit Corporation,
6.520%, 1-18-15 (I)			325		304
					10,685
Metals / Mining - 0.28%
Evraz Group S.A.:
8.875%, 4-24-13 (G)		34,000			25,840
8.250%, 11-10-15			1,500		1,102
8.250%, 11-10-15 (G)			500		360
Evraz Securities S.A.,
10.875%, 8-3-09			3,500		3,407
Norilsk Nickel Finance Luxembourg S.A.,
7.125%, 9-30-09			3,225		2,999
Vedanta Resources plc:
6.625%, 2-22-10			3,500		3,325
6.625%, 2-22-10 (G)			550		523
					37,556
Paper / Forest Products - 0.05%
Kimberly-Clark de Mexico, S.A. de C.V.,
8.875%, 8-1-09 (F)			1,500		1,565
Sino-Forest Corporation:
9.125%, 8-17-11			4,000		3,960
9.125%, 8-17-11 (G)			700		693
					6,218
Real Estate Management & Development - 0.01%
Shimao Property Holdings Limited,
8.000%, 12-1-16 (G)			4,000		2,072
Transportation - Other - 0.33%
Noble Group Limited:
8.500%, 5-30-13			2,500		2,125
8.500%, 5-30-13 (F)		14,100			11,632
Ultrapetrol (Bahamas) Limited,
9.000%, 11-24-14		33,260			30,267
					44,024
Utilities - 0.12%
CESP - Companhia Energetica de Sao Paulo,
9.750%, 1-15-15 (F)(H)	BRL23,100				12,189
Compania de Transporte de Energia Electrica en Alta       Tension TRANSENER S.A.:
8.875%, 12-15-16		$	3,350		1,976
8.875%, 12-15-16 (G)			3,000		1,770
					15,935
Wireless - 0.30%
Mobile TeleSystems OJSC,
8.700%, 6-12-18 (H)	RUB1,144,000				40,571
Open Joint Stock Company "Vimpel-Communications",
8.000%, 2-11-10		$	750		702
					41,273
TOTAL CORPORATE DEBT SECURITIES - 1.25%				$	168,274
(Cost: $196,277)

OTHER GOVERNMENT SECURITIES
Australia - 0.84%
Commonwealth of Australia Treasury Bonds,
5.750%, 4-15-12 (H)	AUD140,000				112,739
Norway - 1.05%
Norway Government Bonds,
6.000%, 5-16-11 (H)	NOK795,000				140,568
Russia - 0.57%
Open Joint Stock Company "Russian Railroads",
8.500%, 7-6-11 (H)	RUB2,130,000				76,368
Switzerland - 0.81%
Switzerland Government Bonds,
3.500%, 8-7-10 (H)	CHF118,250				108,914
TOTAL OTHER GOVERNMENT SECURITIES - 3.27%				$	438,589
(Cost: $484,543)
UNITED STATES GOVERNMENT AGENCY OBLIGATIONS
Mortgage-Backed Obligations
Federal Home Loan Mortgage Corporation Agency       REMIC/CMO (Interest Only): (J)
4.500%, 8-15-17		$4,003			294
5.500%, 9-15-17			3,870		515
5.000%, 11-15-17			1,948		240
5.000%, 5-15-18			3,270		734
5.000%, 4-15-19			164		21
5.000%, 4-15-19			333		44
5.000%, 7-15-21			126		3
5.000%, 11-15-22			441		65
5.000%, 1-15-23			23		- -	*
5.500%, 3-15-23			3,161		619
5.000%, 4-15-23			78		2
5.000%, 5-15-23			301		45
5.000%, 6-15-23			2,400		369
5.000%, 6-15-23			2,977		451

5.000%, 8-15-23			229		37
5.500%, 11-15-23			286		8
5.500%, 11-15-23			433		9
5.000%, 9-15-24			245		8
5.500%, 9-15-24			114		4
5.500%, 4-15-25			103		4
5.500%, 4-15-25			53		5
5.000%, 9-15-25			470		14
5.500%, 10-15-25			3,569		749
5.000%, 4-15-26			1,548		71
5.000%, 10-15-28			990		141
5.500%, 2-15-30			185		15
5.000%, 8-15-30			256		21
5.000%, 10-15-30			1,250		280
5.500%, 3-15-31			289		32
5.500%, 10-15-32			3,397		575
5.500%, 1-15-33			2,470		567
5.500%, 5-15-33			2,548		573
5.000%, 7-15-33			2,749		592
6.000%, 11-15-35			2,461		553
Federal National Mortgage Association Agency       REMIC/CMO (Interest Only): (J)
5.500%, 11-25-17			218		8
5.000%, 5-25-22			171		32
5.000%, 7-25-23			4,632		840
5.000%, 8-25-23			1,405		217
5.000%, 11-25-23			2,337		387
5.500%, 9-25-25			117		3
5.500%, 11-25-25			261		7
4.500%, 4-25-30			2,153		293
5.000%, 9-25-30			1,994		271
5.000%, 3-25-31			5,603		848
5.000%, 8-15-31			3,562		706
5.500%, 6-25-33			3,559		719
5.500%, 8-25-33			7,021		1,441
5.500%, 12-25-33			3,042		575
5.500%, 4-25-34			6,248		1,371
5.500%, 8-25-35			3,595		987
5.500%, 11-25-36		10,437			2,421
Government National Mortgage Association Agency       REMIC/CMO (Interest Only): (J)
5.000%, 1-20-30			599		49
5.000%, 6-20-31			626		61
5.500%, 3-20-32			2,821		402
5.000%, 10-20-32			1,685		404
7.000%, 5-20-33			5,884		1,351
5.500%, 7-16-33			2,716		643
5.000%, 7-20-33			128		20
5.500%, 11-20-33			686		103
5.500%, 6-20-35			6,233		1,399
5.500%, 7-20-35			1,075		128
5.500%, 7-20-35			2,524		605
5.500%, 10-16-35			5,877		1,346
TOTAL UNITED STATES GOVERNMENT AGENCY       OBLIGATIONS - 0.19%				$	25,297
(Cost: $24,661)
UNITED STATES GOVERNMENT OBLIGATIONS
Treasury Obligations
United States Treasury Bonds,
4.500%, 5-15-38	249,600				257,010
TOTAL UNITED STATES GOVERNMENT OBLIGATIONS - 1.91%				$	257,010
(Cost: $262,988)
BULLION		Troy Ounces
Gold			1,976		1,709,567
TOTAL BULLION - 12.74%				$	1,709,567
(Cost: $1,653,357)

SHORT-TERM SECURITIES	Principal
Repurchase Agreements - 2.90%
J.P. Morgan Securities, Inc., Repurchase Agreement       dated 9-30-08 to be repurchased at $165,342,
0.050%, 10-1-08 (K)	$	165,342	165,342
J.P. Morgan Securities, Inc., Repurchase Agreement       dated 9-30-08 to be repurchased at $62,902,
0.050%, 10-1-08 (L)		62,902	62,902
J.P. Morgan Securities, Inc., Repurchase Agreement       dated 9-30-08 to be repurchased at $69,247,
0.050%, 10-1-08 (M)		69,247	69,247
J.P. Morgan Securities, Inc., Repurchase Agreement       dated 9-30-08 to be repurchased at $91,181,
0.050%, 10-1-08 (N)		91,181	91,181
			388,672
United States Government Agency Obligations - 0.04%
Overseas Private Investment Corporation,
2.450%, 10-1-08 (I)		5,000	5,000
United States Government Obligations - 30.57%
United States Treasury Bills:
1.985%, 10-16-08		57,000	56,953
1.970%, 10-16-08		30,000	29,975
1.930%, 10-30-08		35,000	34,945
1.980%, 10-30-08		26,000	25,958
2.135%, 11-6-08		160,000	159,658
1.950%, 11-6-08		75,000	74,854
1.890%, 11-6-08		25,070	25,023
2.110%, 11-13-08		35,000	34,912
1.910%, 11-13-08		90,000	89,795
2.150%, 11-13-08		175,000	174,551
2.210%, 11-13-08		80,000	79,789
1.950%, 11-20-08		130,000	129,648
1.960%, 11-20-08		170,000	169,537
2.160%, 11-20-08		300,000	299,100

2.000%, 12-4-08	150,000		149,467
2.085%, 12-4-08	150,000		149,444
2.110%, 12-4-08	55,000		54,794
2.255%, 12-4-08	70,000		69,719
1.940%, 12-4-08	210,000		209,276
2.000%, 12-4-08	120,000		119,573
2.130%, 12-11-08	75,000		74,685
2.160%, 12-11-08	130,000		129,446
2.220%, 12-11-08	150,000		149,343
2.190%, 12-11-08	50,000		49,784
2.205%, 12-18-08	125,000		124,403
2.050%, 12-26-08	80,000		79,608
2.110%, 12-26-08	80,000		79,597
2.245%, 12-26-08	75,000		74,598
2.110%, 1-2-09	80,000		79,564
2.100%, 1-2-09	170,000		169,078
2.040%, 1-8-09	80,000		79,551
1.840%, 1-15-09	200,000		198,916
1.910%, 1-29-09	80,000		79,491
1.910%, 2-5-09	100,000		99,326
1.920%, 2-5-09	69,000		68,533
1.910%, 2-12-09	160,000		158,862
1.910%, 2-19-09	215,000		213,392
1.900%, 2-26-09	60,000		59,531
			4,104,679
TOTAL SHORT-TERM SECURITIES - 33.51%		$	4,498,351
(Cost: $4,498,351)
TOTAL INVESTMENT SECURITIES - 96.92%		$	13,009,194
(Cost: $13,840,586)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 3.08%			413,708
NET ASSETS - 100.00%		$	13,422,902

Notes to Schedule of Investments
The following forward currency contracts were outstanding at September 30, 2008:
	Type	Currency	Currency Amount Covered by Contract		Settlement Date	Unrealized Appreciation			Unrealized Depreciation
	Sell	British Pound		18,583	1-12-09		$	3,053		$	-
	Sell	British Pound		266,000	9-4-09			-			6,986
	Buy	United Arab Emirates Dirham		282,060	11-17-08			-			1,981
	Buy	United Arab Emirates Dirham		235,663	1-25-10			-			2,191
	Buy	United Arab Emirates Dirham		480,250	3-11-10			-			6,515
	Buy	United Arab Emirates Dirham		123,500	3-24-10			-			2,067
	Buy	United Arab Emirates Dirham		100,800	4-5-10			-			1,532
							$	3,053		$	21,272

*Not shown due to rounding as amount is less than 500.
(A)Listed on an exchange outside the United States.
(B)No dividends were paid during the preceding 12 months.
(C)Deemed to be an affiliate due to the Fund owning at least 5% of the voting securities.
(D)Illiquid restricted security. At September 30, 2008, the following security was owned:
	Security	Acquisition Date	Shares	Cost	Market Value
	Vietnam Azalea Fund Limited	6-14-07	1,100	$6,380		$5,071
The total value of this security represented approximately 0.04% of net assets at September 30, 2008
(E)Deemed to be an affiliate due to the Fund owning at least 5% of the voting securities. The Fund and other mutual funds managed by its investment manager, Waddell & Reed Investment Management Company, or other related parties together own 30% of the outstanding shares of this security at September 30, 2008.
(F)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers.These securities have been determined to be illiquid under guidelines established by the Board of Directors. At September 30, 2008, the total value of these securities amounted to $30,714 or 0.23% of net assets.
(G)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers.These securities have been determined to be liquid under guidelines established by the Board of Directors. At September 30, 2008, the total value of these securities amounted to $43,059 or 0.32% of net assets.

(H)Principal amounts are denominated in the indicated foreign currency, where applicable (AUD - Australian Dollar, BRL - Brazilian Real, CHF - Swiss Franc, EUR - Euro, NOK - Norwegian Krone and RUB - Russian Ruble).

(I)Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2008.

(J)Amount shown in principal column represents notional amount for computation of interest.

(K)Collateralized by $117,264 United States Treasury Bond, 8.750% due 8-15-20; market value and accrued interest aggregate $167,763.

(L)Collateralized by $49,054 United States Treasury Bond, 6.875% due 8-15-25; market value and accrued interest aggregate $63,739.

(M)Collateralized by $63,871 United States Treasury Bond, 12.500% due 8-15-14; market value and accrued interest aggregate $70,791.

(N)Collateralized by $85,000 United States Treasury Note, 4.875% due 8-15-16; market value and accrued interest aggregate $92,407.

Securities with an aggregate market value of $2,145,153, representing 15.98% of net assets, have been valued in good faith by the Valuation Committee subject to the supervision of the Board of Directors.

The following acronyms are used throughout this portfolio: ADR = American Depositary Receipts CMO = Collateralized Mortgage Obligation GDR = Global Depositary Receipts REMIC = Real Estate Mortgage Investment Conduit
Industry classifications are unaudited.
	Country Diversification
	(as a % of net assets)
	United States	73.62%
	China	3.68%
	Japan	3.61%
	Other	19.09%
See Accompanying Notes to Financial Statements.

Statement of Assets and Liabilities
     IVY ASSET STRATEGY FUND
     September 30, 2008
     (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value:
Securities (cost - $11,596,877)	$	10,732,011
Bullion (cost - $1,653,357)		1,709,567
Repurchase agreements (cost - $388,672)		388,672
Affiliated company (cost - $201,680)		178,944
		13,009,194
Cash		145,637
Cash denominated in foreign currencies (cost - $32,749)		32,810
Receivables:
Investment securities sold		859,790
Fund shares sold		67,875
Dividends and interest		37,202
Unrealized appreciation on forward currency contracts		3,053
Prepaid and other assets		473
Total assets		14,156,034
LIABILITIES
Payable for investment securities purchased		663,895
Payable to Fund shareholders		40,943
Unrealized depreciation on forward currency contracts		21,272
Accrued shareholder servicing		2,113
Accrued management fee		210
Accrued distribution and service fees		207
Accrued accounting services fee		22
Other		4,470
Total liabilities		733,132
Total net assets	$	13,422,902

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	6,002
Additional paid-in capital		14,864,304
Accumulated loss:
Accumulated net investment loss		(5,455	)
Accumulated net realized loss on investment transactions		(588,548	)
Net unrealized depreciation in value of investments		(853,401	)
Net assets applicable to outstanding units of capital	$	13,422,902
Net asset value per share (net assets divided by shares outstanding):
Class A	$22.55
Class B	$22.06
Class C	$22.13
Class E	$22.52
Class I	$22.65
Class R	$22.54
Class Y	$22.56
Capital shares outstanding:
Class A		258,303
Class B		16,158
Class C		240,350
Class E		652
Class I		14,445
Class R		4
Class Y		70,255
Capital shares authorized		1,300,000

See Accompanying Notes to Financial Statements.

Statement of Operations
     IVY ASSET STRATEGY FUND
     For the Six Months Ended September 30, 2008
     (In Thousands)                                                                                                            (Unaudited)

INVESTMENT INCOME
Income:
Dividends (net of foreign withholding taxes of $3,619)	$	77,030
Interest and amortization		73,394
Total income		150,424
Expenses:
Investment management fee		41,173
Distribution and service fees:
Class A		7,944
Class B		1,912
Class C		28,580
Class E		18
Class R		––	*
Class Y		2,269
Shareholder servicing:
Class A		3,538
Class B		363
Class C		3,732
Class E		40
Class I		190
Class R		––	*
Class Y		1,510
Custodian fees		3,729
Accounting services fee		134
Legal fees		100
Audit fees		36
Other		1,651
Total		96,919
Less expenses in excess of limit		(155	)
Total expenses		96,764
Net investment income		53,660

REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized net loss on securities		(1,416,596	)
Realized net loss on forward currency contracts		(41,068	)
Realized net loss on written options		(39,616	)
Realized net gain on swap agreements		97
Realized net loss on futures contracts		(234,520	)
Realized net loss on foreign currency exchange transactions		(51,097	)
Realized loss on investments		(1,782,800	)
Unrealized depreciation in value of securities during the period**		(918,647	)
Unrealized depreciation in value of forward currency contracts            during the period		(132,637	)
Unrealized depreciation in value of foreign currency exchange            transactions during the period		(4,065	)
Unrealized depreciation in value of investments during the period		(1,055,349	)
Net loss on investments		(2,838,149	)
Net decrease in net assets resulting from operations	$	(2,784,489	)

*Not shown due to rounding.
**Includes $22,376 in unrealized depreciation of affiliated securities.

See Accompanying Notes to Financial Statements.

Statement of Changes in Net Assets
     IVY ASSET STRATEGY FUND
     (In Thousands)                                                                                                                (Unaudited)
     

	For the six months ended September 30,				For the fiscal year ended March 31,
	2008				2008
INCREASE IN NET ASSETS
Operations:
Net investment income		$	53,660		$	20,181
Realized net gain (loss) on investments			(1,782,800	)		1,125,618
Unrealized appreciation (depreciation)			(1,055,349	)		32,658
Net increase (decrease) in net assets                       resulting from operations			(2,784,489	)		1,178,457
Distributions to shareholders from:(1)
Net investment income:
Class A			(4,415	)		(18,268	)
Class B			(––	)		(––	)
Class C			(––	)		(––	)
Class E			(––	)		(6	)
Class I			(231	)		(74	)
Class R			(––	)		NA
Class Y			(1,203	)		(4,268	)
Realized gains on investment transactions:
Class A			(––	)		(23,122	)
Class B			(––	)		(1,177	)
Class C			(––	)		(17,638	)
Class E			(––	)		(34	)
Class I			(––	)		(95	)
Class R			(––	)		NA
Class Y			(––	)		(7,377	)
			(5,849	)		(72,059	)
Capital share transactions			3,962,442			8,551,278
Total increase			1,172,104			9,657,676
NET ASSETS
Beginning of period			12,250,798			2,593,122
End of period		$	13,422,902		$	12,250,798
Accumulated net investment loss		$	(5,455	)	$	(2,169	)

(1)See "Financial Highlights" on pages 108 - 114.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY ASSET STRATEGY FUND
     Class A Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	27.06		$	20.65		$	18.76		$	14.21		$	12.86		$	11.18
Income (loss) from       investment operations:
Net investment income			0.14	(1)		0.21	(1)		0.25	(1)		0.05			0.06			0.08
Net realized and unrealized             gain (loss) on investments			(4.63	)(1)		6.61	(1)		1.81	(1)		4.68			1.47			1.71
Total from investment operations			(4.49	)		6.82			2.06			4.73			1.53			1.79
Less distributions from:
Net investment income			(0.02	)		(0.21	)		(0.02	)		(0.04	)		(0.07	)		(0.11	)
Capital gains			(0.00	)		(0.20	)		(0.15	)		(0.14	)		(0.11	)		(0.00	)
Total distributions			(0.02	)		(0.41	)		(0.17	)		(0.18	)		(0.18	)		(0.11	)
Net asset value, end of period		$	22.55		$	27.06		$	20.65		$	18.76		$	14.21		$	12.86
Total return(2)		- -16.64		%		33.19	%		11.04	%		33.40	%		12.02	%		16.06	%
Net assets, end of period       (in millions)		$5,822			$5,379			$1,118			$269			$39			$17
Ratio of expenses to       average net assets			1.02	%(3)		1.00	%		1.13	%		1.28	%		1.44	%		1.47	%
Ratio of net investment income       to average net assets			1.06	%(3)		0.70	%		1.28	%		0.69	%		0.56	%		0.53	%
Portfolio turnover rate			121	%		57	%		123	%		53	%		98	%		254	%

(1)Based on average weekly shares outstanding.

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

(3)Annualized.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY ASSET STRATEGY FUND
     Class B Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	26.57		$	20.22		$	18.50		$	14.11		$	12.83		$	11.17
Income (loss) from       investment operations:
Net investment income (loss)			0.03	(1)		(0.02	)(1)		0.08			0.01			(0.03	)		(0.03	)
Net realized and unrealized       gain (loss) on investments			(4.54	)(1)		6.50	(1)		1.79			4.52			1.44			1.71
Total from investment operations			(4.51	)		6.48			1.87			4.53			1.41			1.68
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)*		(0.02	)		(0.02	)
Capital gains			(0.00	)		(0.13	)		(0.15	)		(0.14	)		(0.11	)		(0.00	)
Total distributions			(0.00	)		(0.13	)		(0.15	)		(0.14	)		(0.13	)		(0.02	)
Net asset value, end of period		$	22.06		$	26.57		$	20.22		$	18.50		$	14.11		$	12.83
Total return		- -17.01		%		32.07	%		10.16	%		32.22	%		11.02	%		15.07	%
Net assets, end of period       (in millions)		$356			$330			$119			$37			$11			$7
Ratio of expenses to       average net assets			1.85	%(2)		1.83	%		1.98	%		2.14	%		2.30	%		2.38	%
Ratio of net investment income       (loss) to average net assets			0.23	%(2)		- -0.09	%		0.43	%		- -0.13	%		- -0.30	%		- -0.40	%
Portfolio turnover rate			121	%		57	%		123	%		53	%		98	%		254	%

*Not shown due to rounding.

(1)Based on average weekly shares outstanding.

(2)Annualized.

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	26.64		$	20.27		$	18.54		$	14.12		$	12.83		$	11.17
Income (loss) from       investment operations:
Net investment income (loss)			0.04	(1)		(0.01	)(1)		0.07			0.01			(0.03	)		(0.03	)
Net realized and unrealized             gain (loss) on investments			(4.55	)(1)		6.53	(1)		1.81			4.56			1.45			1.73
Total from investment operations			(4.51	)		6.52			1.88			4.57			1.42			1.70
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.01	)		(0.02	)		(0.04	)
Capital gains			(0.00	)		(0.15	)		(0.15	)		(0.14	)		(0.11	)		(0.00	)
Total distributions			(0.00	)		(0.15	)		(0.15	)		(0.15	)		(0.13	)		(0.04	)
Net asset value, end of period		$	22.13		$	26.64		$	20.27		$	18.54		$	14.12		$	12.83
Total return		- -16.96		%		32.18	%		10.19	%		32.45	%		11.11	%		15.21	%
Net assets, end of period       (in millions)		$5,317			$4,854			$1,153			$250			$55			$49
Ratio of expenses to       average net assets			1.78	%(2)		1.77	%		1.90	%		2.01	%		2.21	%		2.27	%
Ratio of net investment income       (loss) to average net assets			0.30	%(2)		- -0.07	%		0.52	%		- -0.01	%		- -0.22	%		- -0.26	%
Portfolio turnover rate			121	%		57	%		123	%		53	%		98	%		254	%

(1)Based on average weekly shares outstanding.

(2)Annualized.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY ASSET STRATEGY FUND
     Class E Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                            (Unaudited)

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	27.05		$	20.69
Income (loss) from investment operations:
Net investment income			0.11	(2)		0.05	(2)
Net realized and unrealized gain (loss)             on investments			(4.64	)(2)		6.57	(2)
Total from investment operations			(4.53	)		6.62
Less distributions from:
Net investment income			(0.00	)		(0.11	)
Capital gains			(0.00	)		(0.15	)
Total distributions			(0.00	)		(0.26	)
Net asset value, end of period		$	22.52		$	27.05
Total return(3)		- -16.78		%		32.15	%
Net assets, end of period (in millions)		$15			$11
Ratio of expenses to average net assets       including expense waiver			1.26	%(4)		1.63	%(4)
Ratio of net investment income (loss) to       average net assets including expense waiver			0.84	%(4)		- -0.05	%(4)
Ratio of expenses to average net assets       excluding expense waiver			1.53	%(4)		1.63	%(4)(5)
Ratio of net investment income (loss) to       average net assets excluding expense waiver			0.57	%(4)		- -0.05	%(4)(5)
Portfolio turnover rate			121	%		57	%(6)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

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

(4)Annualized.

(5)There was no waiver during the period.

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY ASSET STRATEGY FUND
     Class I Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                            (Unaudited)

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	27.17		$	20.71
Income (loss) from investment operations:
Net investment income			0.18	(2)		0.34	(2)
Net realized and unrealized gain (loss)             on investments			(4.68	)(2)		6.56	(2)
Total from investment operations			(4.50	)		6.90
Less distributions from:
Net investment income			(0.02	)		(0.24	)
Capital gains			(0.00	)		(0.20	)
Total distributions			(0.02	)		(0.44	)
Net asset value, end of period		$	22.65		$	27.17
Total return		- -16.55		%		33.45	%
Net assets, end of period (in millions)		$327			$104
Ratio of expenses to average net assets			0.80	%(3)		0.82	%(3)
Ratio of net investment income to average net assets			1.38	%(3)		0.84	%(3)
Portfolio turnover rate			121	%		57	%(4)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY ASSET STRATEGY FUND
     Class R Shares
     For a Share of Capital Stock Outstanding Throughout the Period:                  (Unaudited)

	For the period from 7-31-08(1) through
	9-30-08
Net asset value, beginning of period		$	26.74
Income (loss) from investment operations:
Net investment income			0.16	(2)
Net realized and unrealized loss on investments			(4.36	)(2)
Total from investment operations			(4.20	)
Less distributions from:
Net investment income			(0.00	)
Capital gains			(0.00	)
Total distributions			(0.00	)
Net asset value, end of period		$	22.54
Total return		- -15.71		%
Net assets, end of period (in thousands)		$93
Ratio of expenses to average net assets			1.30	%(3)
Ratio of net investment income to average net assets			1.33	%(3)
Portfolio turnover rate			121	%(4)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(4)For the six months ended September 30, 2008.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY ASSET STRATEGY FUND
     Class Y Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	27.08		$	20.67		$	18.78		$	14.22		$	12.87		$	11.18
Income (loss) from       investment operations:
Net investment income			0.14	(1)		0.18	(1)		0.26	(1)		0.05			0.08			0.09
Net realized and unrealized             gain (loss) on investments			(4.64	)(1)		6.62	(1)		1.80	(1)		4.69			1.45			1.71
Total from investment operations			(4.50	)		6.80			2.06			4.74			1.53			1.80
Less distributions from:
Net investment income			(0.02	)		(0.19	)		(0.02	)		(0.04	)		(0.07	)		(0.11	)
Capital gains			(0.00	)		(0.20	)		(0.15	)		(0.14	)		(0.11	)		(0.00	)
Total distributions			(0.02	)		(0.39	)		(0.17	)		(0.18	)		(0.18	)		(0.11	)
Net asset value, end of period		$	22.56		$	27.08		$	20.67		$	18.78		$	14.22		$	12.87
Total return		- -16.67		%		33.07	%		11.04	%		33.46	%		12.05	%		16.19	%
Net assets, end of period       (in millions)		$1,585			$1,573			$203			$29			$4			$2
Ratio of expenses to average       net assets including       expense waiver			1.06	%(2)		1.07	%		1.15	%		1.22	%		1.35	%		1.39	%
Ratio of net investment income       to average net assets       including expense waiver			1.01	%(2)		0.57	%		1.30	%		0.81	%		0.66	%		0.67	%
Ratio of expenses to average       net assets excluding       expense waiver			1.07	%(2)		1.07	%(3)		1.15	%(3)		1.22	%(3)		1.35	%(3)		1.39	%(3)
Ratio of net investment income       to average net assets       excluding expense waiver			1.00	%(2)		0.57	%(3)		1.30	%(3)		0.81	%(3)		0.66	%(3)		0.67	%(3)
Portfolio turnover rate			121	%		57	%		123	%		53	%		98	%		254	%

(1)Based on average weekly shares outstanding.

(2)Annualized.

(3)There was no waiver during the period.

See Accompanying Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY ENERGY FUND

Portfolio Highlights

On September 30, 2008, Ivy Energy Fund had net assets totaling $39,428 (in thousands) invested in a diversified portfolio of:

77.20%	Domestic Common Stocks
12.84%	Foreign Common Stocks
9.96%	Cash and Cash Equivalents and Options

As a shareholder of the Fund, for every $100 you had invested on September 30, 2008, your Fund was invested by industry as follows:

Sector Weightings

Energy Stocks	$	72.61
Industrials Stocks	$	10.28
Cash and Cash Equivalents and Options	$	9.96
Utilities Stocks	$	3.94
Information Technology Stocks	$	2.05
Financials Stocks	$	1.16

The Investments of Ivy Energy Fund
September 30, 2008
(In Thousands)                                                                                                                       (Unaudited)
COMMON STOCKS	Shares		Value
Coal & Consumable Fuels - 3.28%
Arch Coal, Inc.		9	$	300
Cameco Corporation		6		135
CONSOL Energy Inc.		5		232
Foundation Coal Holdings, Inc.		6		202
Peabody Energy Corporation		9		423
				1,292
Construction & Engineering - 4.40%
Chicago Bridge & Iron Company N.V., NY Shares		21		403
Fluor Corporation		13		719
Jacobs Engineering Group Inc. (A)		7		405
Shaw Group Inc. (The) (A)		7		208
				1,735
Construction & Farm Machinery & Heavy Trucks - 1.23%
Bucyrus International, Inc., Class A		11		484
Electric Utilities - 2.68%
Entergy Corporation		6		559
Exelon Corporation		8		499
				1,058
Electrical Components & Equipment - 4.02%
Energy Conversion Devices, Inc. (A)		6		335
First Solar, Inc. (A)		4		812
GT Solar International, Inc. (A)		21		221
Suntech Power Holdings Co., Ltd., ADR (A)		6		219
				1,587
Electronic Equipment & Instruments - 0.85%
SunPower Corporation, Class A (A)		5		333
Environmental & Facilities Services - 0.60%
EnergySolutions, Inc.		24		237
Independent Power Producers & Energy Traders - 1.26%
Mirant Corporation (A)		11		200
NRG Energy, Inc. (A)		12		297
				497
Industrial Machinery - 0.03%
John Bean Technologies Corporation (A)		1		12
Integrated Oil & Gas - 12.79%
BP p.l.c., ADR		11		541
ConocoPhillips		10		711
Exxon Mobil Corporation		14		1,122
Hess Corporation		5		404
Marathon Oil Corporation		10		385
Occidental Petroleum Corporation		13		886
Petroleo Brasileiro S.A. - Petrobras, ADR		8		369
SandRidge Energy, Inc. (A)		14		283
Suncor Energy Inc.		8		343
				5,044
Oil & Gas Drilling - 7.56%
ENSCO International Incorporated		8		437
Helmerich & Payne, Inc.		22		935
Nabors Industries Ltd. (A)		27		660
Patterson-UTI Energy, Inc.		18		351
Transocean Inc.		5		599
				2,982
Oil & Gas Equipment & Services - 24.02%
Baker Hughes Incorporated		8		487
BJ Services Company		27		525
Cameron International Corporation (A)		22		865
Complete Production Services, Inc. (A)		34		684
FMC Technologies, Inc. (A)		10		479
Halliburton Company		32		1,048
Honghua Group Limited (A)(B)	345			67
NATCO Group Inc., Class A (A)		10		408
National Oilwell Varco, Inc. (A)		24		1,206
Schlumberger Limited		17		1,302
Smith International, Inc.		16		962
Technip SA, ADR		4		208
Tenaris S.A., ADR		12		464
Weatherford International Ltd. (A)		31		767
				9,472
Oil & Gas Exploration & Production - 21.09%
Anadarko Petroleum Corporation		8		406
Apache Corporation		10		1,022
CNOOC Limited, ADR		3		286
Continental Resources, Inc. (A)		22		855
Devon Energy Corporation		10		882
EOG Resources, Inc.		9		761
Helix Energy Solutions Group, Inc. (A)		18		426
Newfield Exploration Company (A)		17		555
Noble Energy, Inc.		11		602
Southwestern Energy Company (A)		33		997
Talisman Energy Inc.		26		368
Ultra Petroleum Corp. (A)		8		451
XTO Energy Inc.		15		704
				8,315
Oil & Gas Refining & Marketing - 1.75%
CVR Energy, Inc. (A)		18		156
Sunoco, Inc.		6		226
Valero Energy Corporation		10		307
				689
Oil & Gas Storage & Transportation - 2.12%
El Paso Pipeline Partners, L.P.		18		286
Enbridge Inc.		14		548
				834
Semiconductor Equipment - 1.20%
Applied Materials, Inc.		31		474
Specialized Finance - 1.16%
IntercontinentalExchange, Inc. (A)		6		456
TOTAL COMMON STOCKS - 90.04%			$	35,501
(Cost: $41,624)

PUT OPTIONS	Number of Contracts
Morgan Stanley & Co. International plc Custom       Solar Basket Collar,
Nov. 90, Expires 11-24-08		2,560	$	307
TOTAL PUT OPTIONS - 0.78%			$	307
(Cost: $230)
SHORT-TERM SECURITIES	Principal
Commercial Paper
Air Products and Chemicals, Inc.,
1.500%, 10-1-08	$	1,055		1,055
Automatic Data Processing Inc.,
2.000%, 10-1-08		1,400		1,400
Walgreen Co.,
1.000%, 10-1-08		996		996
TOTAL SHORT-TERM SECURITIES - 8.75%			$	3,451
(Cost: $3,451)
TOTAL INVESTMENT SECURITIES - 99.57%			$	39,259
(Cost: $45,305)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.43%				169
NET ASSETS - 100.00%			$	39,428

Notes to Schedule of Investments
The following written call options were outstanding at September 30, 2008:
	Underlying Security	Contracts Subject to Call	Expiration Month/ Exercise Price	Premium Received		Market Value
	Morgan Stanley & Co. International plc       Custom Solar Basket Collar	2,560	November/110.0		$223		$54
(A)No dividends were paid during the preceding 12 months.
(B)Listed on an exchange outside the United States.
Securities with an aggregate market value of $67, representing 0.17% of net assets, have been valued in good faith by the Valuation Committee subject to the supervision of the Board of Directors.
The following acronym is used throughout this portfolio: ADR = American Depositary Receipts
See Accompanying Notes to Financial Statements.

Statement of Assets and Liabilities
     IVY ENERGY FUND
     September 30, 2008
     (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $45,305)	$	39,259
Receivables:
Fund shares sold		201
Dividends and interest		25
Prepaid and other assets		70
Total assets		39,555
LIABILITIES
Outstanding written options at value (premium received - $22)		54
Payable to Fund shareholders		22
Payable for investment securities purchased		19
Accrued shareholder servicing		18
Due to custodian		10
Accrued accounting services fee		3
Accrued management fee		1
Accrued distribution and service fees		––	*
Total liabilities		127
Total net assets	$	39,428
NET ASSETS
$0.01 par value capital stock:
Capital stock	$	35
Additional paid-in capital		46,496
Accumulated loss:
Accumulated net investment loss		(195	)
Accumulated net realized loss on investment transactions		(1,031	)
Net unrealized depreciation in value of investments		(5,877	)
Net assets applicable to outstanding units of capital	$	39,428
Net asset value per share (net assets divided by shares outstanding):
Class A	$11.25
Class B	$11.07
Class C	$11.10
Class E	$11.27
Class I	$11.31
Class Y	$11.29
Capital shares outstanding:
Class A		2,740
Class B		176
Class C		349
Class E		10
Class I		10
Class Y		227
Capital shares authorized	150,000

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

Statement of Operations
     IVY ENERGY FUND
     For the Six Months Ended September 30, 2008
     (In Thousands)                                                                                                            (Unaudited)

INVESTMENT LOSS
Income:
Dividends (net of foreign withholding taxes of $3)	$	163
Interest and amortization		54
Total income		217
Expenses:
Investment management fee		203
Distribution and service fees:
Class A		44
Class B		12
Class C		22
Class E		––	*
Class Y		7
Shareholder servicing:
Class A		65
Class B		5
Class C		6
Class E		––	*
Class I		––	*
Class Y		5
Registration fees		39
Accounting services fee		18
Audit fees		11
Custodian fees		5
Legal fees		––	*
Other		16
Total		458
Less expenses in excess of limit		(46	)
Total expenses		412
Net investment loss		(195	)
REALIZED AND UNREALIZED LOSS
ON INVESTMENTS
Realized net loss on investments		(64	)
Unrealized depreciation in value of investments during the period		(10,305	)
Net loss on investments		(10,369	)
Net decrease in net assets resulting from operations	$	(10,564	)

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

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

	For the six months ended September 30,				For the fiscal year ended March 31,
	2008				2008
INCREASE IN NET ASSETS
Operations:
Net investment loss		$	(195	)	$	(139	)
Realized net loss on investments			(64	)		(871	)
Unrealized appreciation (depreciation)		(10,305		)		4,102
Net increase (decrease) in net assets                       resulting from operations		(10,564		)		3,092
Distributions to shareholders from:(1)
Net investment income:
Class A			(––	)		(––	)
Class B			(––	)		(––	)
Class C			(––	)		(––	)
Class E			(––	)		(––	)
Class I			(––	)		(––	)
Class Y			(––	)		(––	)
Return of capital:
Class A			(––	)		(33	)
Class B			(––	)		(––	)
Class C			(––	)		(––	)
Class E			(––	)		(––	)
Class I			(––	)		(1	)
Class Y			(––	)		(8	)
			(––	)		(42	)
Capital share transactions			12,979			26,373
Total increase			2,415			29,423
NET ASSETS
Beginning of period			37,013			7,590
End of period		$	39,428		$	37,013
Accumulated net investment loss		$	(195	)	$	(––	)*

*Not shown due to rounding.

(1)See "Financial Highlights" on pages 123 - 128.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY ENERGY FUND
     Class A Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended			For the period from 4-3-06(1) to
	9-30-08				3-31-08			3-31-07
Net asset value, beginning of period		$	13.67		$	10.35		$	10.00
Income (loss) from investment operations:
Net investment loss			(0.05	)(2)		(0.07	)(2)		(0.09	)
Net realized and unrealized gain             (loss) on investments			(2.37	)(2)		3.41	(2)		0.44
Total from investment operations			(2.42	)		3.34			0.35
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)
Return of capital			(0.00	)		(0.02	)		(0.00	)
Total distributions			(0.00	)		(0.02	)		(0.00	)
Net asset value, end of period		$	11.25		$	13.67		$	10.35
Total return(3)		- -17.70		%		32.27	%		3.50	%
Net assets, end of period (in millions)		$31			$27			$5
Ratio of expenses to average net assets       including expense waiver			1.60	%(4)		1.66	%		2.74	%(4)
Ratio of net investment loss to average       net assets including expense waiver			- -0.69	%(4)		- -0.53	%		- -1.30	%(4)
Ratio of expenses to average net assets       excluding expense waiver			1.85	%(4)		2.01	%		3.58	%(4)
Ratio of net investment loss to average       net assets excluding expense waiver			- -0.94	%(4)		- -0.88	%		- -2.14	%(4)
Portfolio turnover rate			1	%		35	%		11	%

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

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

(4)Annualized.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY ENERGY FUND
     Class B Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended			For the period from 4-3-06(1) to
	9-30-08				3-31-08			3-31-07
Net asset value, beginning of period		$	13.52		$	10.29		$	10.00
Income (loss) from investment operations:
Net investment loss			(0.12	)(2)		(0.16	)(2)		(0.13	)
Net realized and unrealized gain             (loss) on investments			(2.33	)(2)		3.39	(2)		0.42
Total from investment operations			(2.45	)		3.23			0.29
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)
Return of capital			(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.00	)		(0.00	)		(0.00	)
Net asset value, end of period		$	11.07		$	13.52		$	10.29
Total return		- -18.12		%		31.39	%		2.90	%
Net assets, end of period (in millions)		$2			$2			$1
Ratio of expenses to average net assets       including expense waiver			2.57	%(3)		2.44	%		3.13	%(3)
Ratio of net investment loss to average       net assets including expense waiver			- -1.66	%(3)		- -1.26	%		- -1.64	%(3)
Ratio of expenses to average net assets       excluding expense waiver			2.67	%(3)		2.79	%		3.97	%(3)
Ratio of net investment loss to average       net assets excluding expense waiver			- -1.76	%(3)		- -1.61	%		- -2.48	%(3)
Portfolio turnover rate			1	%		35	%		11	%

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY ENERGY FUND
     Class C Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended			For the period from 4-3-06(1) to
	9-30-08				3-31-08			3-31-07
Net asset value, beginning of period		$	13.55		$	10.30		$	10.00
Income (loss) from investment operations:
Net investment loss			(0.11	)(2)		(0.14	)(2)		(0.14	)
Net realized and unrealized gain             (loss) on investments			(2.34	)(2)		3.39	(2)		0.44
Total from investment operations			(2.45	)		3.25			0.30
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)
Return of capital			(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.00	)		(0.00	)		(0.00	)
Net asset value, end of period		$	11.10		$	13.55		$	10.30
Total return		- -18.08		%		31.55	%		3.00	%
Net assets, end of period (in millions)		$4			$3			$1
Ratio of expenses to average net assets       including expense waiver			2.45	%(3)		2.28	%		3.17	%(3)
Ratio of net investment loss to average       net assets including expense waiver			- -1.54	%(3)		- -1.09	%		- -1.72	%(3)
Ratio of expenses to average net assets       excluding expense waiver			2.45	%(3)(4)		2.63	%		4.01	%(3)
Ratio of net investment loss to average       net assets excluding expense waiver			- -1.54	%(3)(4)		- -1.44	%		- -2.56	%(3)
Portfolio turnover rate			1	%		35	%		11	%

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY ENERGY FUND
     Class E Shares⁽¹⁾
     For a Share of Capital Stock Outstanding Throughout Each Period:                         (Unaudited)

	For the six months ended				For the period from 4-2-07(2) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	13.69		$	10.48
Income (loss) from investment operations:
Net investment income (loss)			(0.04	)(3)		0.08	(3)
Net realized and unrealized gain (loss)             on investments			(2.38	)(3)		3.19	(3)
Total from investment operations			(2.42	)		3.27
Less distributions from:
Net investment income			(0.00	)		(0.00	)
Return of capital			(0.00	)		(0.06	)
Total distributions			(0.00	)		(0.06	)
Net asset value, end of period		$	11.27		$	13.69
Total return(4)		- -17.68		%		31.15	%
Net assets, end of period (in thousands)		$130			$131
Ratio of expenses to average net assets       including expense waiver			1.44	%(5)		1.31	%(5)
Ratio of net investment loss to average       net assets including expense waiver			- -0.53	%(5)		- -0.06	%(5)
Ratio of expenses to average net assets       excluding expense waiver			1.44	%(5)(6)		1.66	%(5)
Ratio of net investment loss to average       net assets excluding expense waiver			- -0.53	%(5)(6)		- -0.41	%(5)
Portfolio turnover rate			1	%		35	%(7)

(1)Class is closed.

(2)Commencement of operations of the class.

(3)Based on average weekly shares outstanding.

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

(5)Annualized.

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

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

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	13.72		$	10.51
Income (loss) from investment operations:
Net investment income (loss)			(0.03	)(2)		0.10	(2)
Net realized and unrealized gain (loss)             on investments			(2.38	)(2)		3.19	(2)
Total from investment operations			(2.41	)		3.29
Less distributions from:
Net investment income			(0.00	)		(0.00	)
Return of capital			(0.00	)		(0.08	)
Total distributions			(0.00	)		(0.08	)
Net asset value, end of period		$	11.31		$	13.72
Total return		- -17.57		%		31.26	%
Net assets, end of period (in thousands)		$131			$131
Ratio of expenses to average net assets       including expense waiver			1.36	%(3)		1.19	%(3)
Ratio of net investment income (loss) to average       net assets including expense waiver			- -0.44	%(3)		0.05	%(3)
Ratio of expenses to average net assets       excluding expense waiver			1.36	%(3)(4)		1.54	%(3)
Ratio of net investment loss to average       net assets excluding expense waiver			- -0.44	%(3)(4)		- -0.30	%(3)
Portfolio turnover rate			1	%		35	%(5)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(4)There was no waiver during the period.

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY ENERGY FUND
     Class Y Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended			For the period from 4-3-06(1) to
	9-30-08				3-31-08			3-31-07
Net asset value, beginning of period		$	13.73		$	10.38		$	10.00
Income (loss) from investment operations:
Net investment loss			(0.05	)(2)		(0.07	)(2)		(0.08	)
Net realized and unrealized gain             (loss) on investments			(2.39	)(2)		3.46	(2)		0.46
Total from investment operations			(2.44	)		3.39			0.38
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)
Return of capital			(0.00	)		(0.04	)		(0.00	)
Total distributions			(0.00	)		(0.04	)		(0.00	)
Net asset value, end of period		$	11.29		$	13.73		$	10.38
Total return		- -17.77		%		32.67	%		3.80	%
Net assets, end of period (in millions)		$2			$5			$1
Ratio of expenses to average net assets       including expense waiver			1.60	%(3)		1.55	%		2.32	%(3)
Ratio of net investment loss to average       net assets including expense waiver			- -0.68	%(3)		- -0.51	%		- -0.82	%(3)
Ratio of expenses to average net assets       excluding expense waiver			1.60	%(3)(4)		1.90	%		3.16	%(3)
Ratio of net investment loss to average       net assets excluding expense waiver			- -0.68	%(3)(4)		- -0.86	%		- -1.66	%(3)
Portfolio turnover rate			1	%		35	%		11	%

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(4)The Fund's waiver provides no impact to the ratios due to rounding.

See Accompanying Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY SCIENCE AND TECHNOLOGY FUND

Portfolio Highlights

On September 30, 2008, Ivy Science and Technology Fund had net assets totaling $601,622
(in thousands) invested in a diversified portfolio of:

69.55%	Common Stocks
30.45%	Cash and Cash Equivalents and Options

Sector Weightings

As a shareholder of the Fund, for every $100 you had invested on September 30, 2008,
your Fund owned:

Information Technology Stocks	$	34.29
Cash and Cash Equivalents and Options	$	30.45
Health Care Stocks	$	14.44
Consumer Staples Stocks	$	5.23
Industrials Stocks	$	4.78
Energy Stocks	$	4.70
Miscellaneous Stocks(1)	$	4.16
Materials Stocks	$	1.95

(1)Includes $1.90 Consumer Discretionary Stocks, $1.30 Financials Stocks and
$0.96 Telecommunication Services Stocks.

The Investments of Ivy Science and Technology Fund
September 30, 2008
(In Thousands)                                                                                                                       (Unaudited)
COMMON STOCKS	Shares		Value
Agricultural Products - 5.23%
Archer Daniels Midland Company		660	$	14,454
Bunge Limited		270		17,027
				31,481
Application Software - 9.63%
ACI Worldwide, Inc. (A)		977		17,165
Aspen Technology, Inc. (A)		1,872		24,007
Citrix Systems, Inc. (A)		207		5,235
Lawson Software, Inc. (A)		1,646		11,517
				57,924
Biotechnology - 5.41%
Amgen Inc. (A)		125		7,414
Genzyme Corporation (A)(B)		252		20,373
Isis Pharmaceuticals, Inc. (A)		281		4,753
				32,540
Communications Equipment - 2.53%
Research In Motion Limited (A)(B)		223		15,245
Computer Hardware - 2.05%
Apple Inc. (A)		108		12,301
Computer Storage & Peripherals - 0.61%
Netezza Corporation (A)		228		2,423
Novatel Wireless, Inc. (A)		200		1,215
				3,638
Consumer Electronics - 1.43%
Garmin Ltd. (A)		254		8,620
Consumer Finance - 0.47%
Global Cash Access, Inc. (A)		558		2,823
Data Processing & Outsourced Services - 3.66%
Euronet Worldwide, Inc. (A)		465		7,794
Fidelity National Information Services, Inc.		252		4,645
Lender Processing Services, Inc. (A)		314		9,574
				22,013
Diversified Chemicals - 1.95%
E.I. du Pont de Nemours and Company		178		7,178
FMC Corporation		88		4,522
				11,700
Electrical Components & Equipment - 0.68%
Power-One, Inc. (A)		1,192		1,644
Ultralife Corporation (A)		309		2,419
				4,063
Electronic Equipment & Instruments - 0.38%
IPG Photonics Corporation (A)		117		2,287
General Merchandise Stores - 0.47%
Conn's, Inc. (A)		151		2,827
Health Care Distributors - 0.70%
Animal Health International, Inc. (A)		501		4,214
Health Care Equipment - 0.35%
Insulet Corporation (A)		150		2,090
Health Care Facilities - 1.32%
HealthSouth Corporation (A)		430		7,916
Health Care Services - 1.25%
HMS Holdings Corp. (A)		314		7,534
Health Care Supplies - 0.37%
TranS1 Inc. (A)		226		2,238
Health Care Technology - 5.04%
Cerner Corporation (A)		605		26,983
Eclipsys Corporation (A)		161		3,371
				30,354
Home Entertainment Software - 2.33%
Activision Blizzard, Inc. (A)		63		973
Nintendo Co., Ltd. (C)		31		13,065
				14,038
Industrial Machinery - 4.10%
ESCO Technologies Inc. (A)		504		24,283
Pentair, Inc.		12		408
				24,691
Integrated Telecommunication Services - 0.96%
AT&T Inc.		208		5,796
Internet Software & Services - 2.01%
SAVVIS, Inc. (A)		344		4,634
Yahoo! Inc. (A)		431		7,447
				12,081
IT Consulting & Other Services - 2.17%
Telvent GIT, S.A. (C)		260		5,511
Telvent GIT, S.A.		321		7,569
				13,080
Life & Health Insurance - 0.83%
Amil Participacoes S.A. (C)		829		4,966
Oil & Gas Equipment & Services - 0.93%
ION Geophysical Corporation (A)		395		5,607
Oil & Gas Exploration & Production - 3.77%
Noble Energy, Inc.		408		22,686
Semiconductor Equipment - 0.34%
EMCORE Corporation (A)		416		2,061
Semiconductors - 8.58%
Cree, Inc. (A)		953		21,724
Maxim Integrated Products, Inc.		321		5,791
PMC-Sierra, Inc. (A)		1,336		9,934
Samsung Electronics Co., Ltd. (C)		31		14,160
				51,609
TOTAL COMMON STOCKS - 69.55%			$	418,423
(Cost: $453,042)

CALL OPTIONS	Number of Contracts
Research In Motion Limited:
Nov 80, Expires 11-24-08		1	$	362
Dec125, Expires 12-22-08		- -*		5
TOTAL CALL OPTIONS - 0.06%			$	367
(Cost: $445)
PUT OPTIONS
Cerner Corporation,
Dec 40, Expires 12-22-08		- -*		6
Genzyme Corporation,
Jan 70, Expires 1-20-09		2		448
Research In Motion Limited,
Dec 90, Expires 12-22-08		- -*		294
TOTAL PUT OPTIONS - 0.12%			$	748
(Cost: $902)

SHORT-TERM SECURITIES	Principal
Commercial Paper - 25.12%
Air Products and Chemicals, Inc.,
1.500%, 10-1-08	$	24,906	24,906
Automatic Data Processing Inc.,
2.000%, 10-1-08		2,797	2,797
Campbell Soup Co.:
2.200%, 10-7-08		3,000	2,999
1.930%, 10-14-08		5,000	4,996
Caterpillar Inc.,
2.100%, 10-28-08		10,000	9,984
Coca-Cola Company (The),
2.100%, 10-22-08		9,000	8,989
Danaher Corporation,
1.750%, 10-6-08		7,000	6,998
Deere (John) Capital Corporation,
2.500%, 10-24-08		5,000	4,992
E.I. du Pont de Nemours and Company,
2.100%, 10-22-08		5,000	4,994
IBM International Group Capital LLC (International Business       Machines Corporation),
2.280%, 10-2-08		7,000	7,000

Illinois Tool Works Inc.,
2.270%, 10-20-08		7,500		7,491
Johnson & Johnson,
2.035%, 11-3-08		10,000		9,981
Kellogg Co.,
4.750%, 10-7-08		4,000		3,997
Merck & Co., Inc.,
2.100%, 10-15-08		2,000		1,998
PepsiCo, Inc.,
2.050%, 10-2-08		5,000		5,000
Pfizer Inc.,
1.800%, 10-8-08		11,000		10,996
Procter & Gamble International Funding S.C.A. (Procter &       Gamble Company (The)):
2.095%, 10-7-08		4,000		3,999
2.100%, 10-7-08		5,000		4,998
Toyota Motor Credit Corporation,
2.650%, 10-7-08		10,000		9,996
Walt Disney Company (The),
2.020%, 10-14-08		10,000		9,993
Wisconsin Electric Power Co.,
2.750%, 10-10-08		4,000		3,997
				151,101
United States Government Obligations - 4.15%
United States Treasury Bills:
0.100%, 10-23-08		5,000		5,000
0.300%, 10-23-08		15,000		14,997
0.320%, 10-30-08		5,000		4,999
				24,996
TOTAL SHORT-TERM SECURITIES - 29.27%			$	176,097
(Cost: $176,097)
TOTAL INVESTMENT SECURITIES - 99.00%			$	595,635
(Cost: $630,486)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.00%				5,987
NET ASSETS - 100.00%	��		$	601,622

Notes to Schedule of Investments

(A)No dividends were paid during the preceding 12 months.

(B)Securities serve as cover for the following written options outstanding at September 30, 2008:

	Underlying Security	Contracts Subject to Call	Expiration Month/ Exercise Price	Premium Received			Market Value
	Cerner Corporation:	-*	December/50.0		$	6		$	7
	Genzyme Corporation:	2	January/82.5			799			955
	Research In Motion Limited:	-*	December/125.0			81			5
					$	886		$	967
*Not shown due to rounding as amount is less than 500.
	Underlying Security	Contracts Subject to Put	Expiration Month/ Exercise Price	Premium Received			Market Value
	Research In Motion Limited:	-*	December/90.0		$	149		$	290
*Not shown due to rounding as amount is less than 500.

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

Securities with an aggregate market value of $32,736, representing 5.44% of net assets, have been valued in good faith by the Valuation Committee appointed by the Board of Directors.

See Accompanying Notes to Financial Statements.

Statement of Assets and Liabilities
     IVY SCIENCE AND TECHNOLOGY FUND
     September 30, 2008
     (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $630,486)	$	595,635
Cash denominated in foreign currencies (cost - $6,029)		5,696
Receivables:
Fund shares sold		4,268
Dividends and interest		190
Investment securities sold		6
Prepaid and other assets		57
Total assets		605,852
LIABILITIES
Payable to Fund shareholders		1,675
Outstanding written options at market (premium received - $1,035)		1,257
Due to custodian		969
Accrued shareholder servicing		183
Accrued accounting services fee		15
Accrued management fee		14
Payable for investment securities purchased		8
Accrued distribution and service fees		7
Other		102
Total liabilities		4,230
Total net assets	$	601,622

NET ASSETS
$0.01 par value capital stock:
Capital stock	$	235
Additional paid-in capital		607,585
Accumulated undistributed income (loss):
Accumulated net investment loss		(1,993	)
Accumulated undistributed net realized gain on                 investment transactions		31,200
Net unrealized depreciation in value of investments		(35,405	)
Net assets applicable to outstanding units of capital	$	601,622
Net asset value per share (net assets divided by shares outstanding):
Class A	$25.71
Class B	$23.57
Class C	$24.08
Class E	$25.53
Class I	$27.13
Class R	$25.64
Class Y	$26.65
Capital shares outstanding:
Class A		10,397
Class B		759
Class C		5,130
Class E		66
Class I		561
Class R		168
Class Y		6,442
Capital shares authorized		300,000

See Accompanying Notes to Financial Statements.

Statement of Operations
     IVY SCIENCE AND TECHNOLOGY FUND
     For the Six Months Ended September 30, 2008
     (In Thousands)                                                                                                            (Unaudited)

INVESTMENT LOSS
Income:
Interest and amortization	$	2,283
Dividends (net of foreign withholding taxes of $38)		1,063
Total income		3,346
Expenses:
Investment management fee		2,655
Distribution and service fees:
Class A		346
Class B		105
Class C		661
Class E		2
Class R		9
Class Y		223
Shareholder servicing:
Class A		366
Class B		51
Class C		202
Class E		11
Class I		10
Class R		4
Class Y		142
Accounting services fee		85
Custodian fees		39
Audit fees		18
Legal fees		3
Other		185
Total		5,117
Less expenses in excess of limit		(5	)
Total expenses		5,112
Net investment loss		(1,766	)
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized net gain on securities		12,845
Realized net gain on written options		3,389
Realized net loss on foreign currency exchange transactions		(177	)
Realized net gain on investments		16,057
Unrealized depreciation in value of securities during the period		(68,246	)
Unrealized depreciation in value of written options during the period		(1,505	)
Unrealized depreciation in value of investments during the period		(69,751	)
Net loss on investments		(53,694	)
Net decrease in net assets resulting from operations	$	(55,460	)

See Accompanying Notes to Financial Statements.

Statement of Changes in Net Assets
     IVY SCIENCE AND TECHNOLOGY FUND
     (In Thousands)                                                                                                                (Unaudited)
     

	For the six months ended September 30,				For the fiscal year ended March 31,
	2008				2008
INCREASE IN NET ASSETS
Operations:
Net investment loss		$	(1,766	)	$	(3,067	)
Realized net gain on investments			16,057			67,264
Unrealized depreciation			(69,751	)		(38,020	)
Net increase (decrease) in net assets                       resulting from operations			(55,460	)		26,177
Distributions to shareholders from:(1)
Net investment income:
Class A			(––	)		(––	)
Class B			(––	)		(––	)
Class C			(––	)		(––	)
Class E			(––	)		(––	)
Class I			(––	)		(––	)
Class R			(––	)		(––	)
Class Y			(––	)		(––	)
Realized gains on investment transactions:
Class A			(––	)		(27,369	)
Class B			(––	)		(2,369	)
Class C			(––	)		(13,353	)
Class E			(––	)		(111	)
Class I			(––	)		(295	)
Class R			(––	)		(131	)
Class Y			(––	)		(15,381	)
			(––	)		(59,009	)
Capital share transactions			102,849			196,375
Total increase			47,389			163,543
NET ASSETS
Beginning of period			554,233			390,690
End of period		$	601,622		$	554,233
Accumulated net investment loss		$	(1,993	)	$	(50	)

(1)See "Financial Highlights" on pages 140 - 146.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY SCIENCE AND TECHNOLOGY FUND
     Class A Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	27.87		$	28.70		$	27.08		$	21.34		$	19.55		$	14.17
Income (loss) from       investment operations:
Net investment loss			(0.09	)		(0.17	)		(0.23	)		(0.30	)		(0.28	)		(0.19	)
Net realized and unrealized             gain (loss) on investments			(2.07	)		2.78			1.91			6.04			2.07			5.57
Total from investment operations			(2.16	)		2.61			1.68			5.74			1.79			5.38
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(3.44	)		(0.06	)		(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.00	)		(3.44	)		(0.06	)		(0.00	)		(0.00	)		(0.00	)
Net asset value, end of period		$	25.71		$	27.87		$	28.70		$	27.08		$	21.34		$	19.55
Total return(1)			- -7.75	%		8.27	%		6.22	%		26.90	%		9.16	%		37.97	%
Net assets, end of period       (in millions)		$267			$245			$185			$164			$55			$36
Ratio of expenses to       average net assets			1.48	%(2)		1.43	%		1.47	%		1.51	%		1.70	%		1.80	%
Ratio of net investment loss       to average net assets			- -0.40	%(2)		- -0.39	%		- -0.88	%		- -1.02	%		- -1.09	%		- -1.35	%
Portfolio turnover rate			27	%		96	%		81	%		112	%		106	%		114	%

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

(2)Annualized.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY SCIENCE AND TECHNOLOGY FUND
     Class B Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	25.68		$	26.66		$	25.42		$	20.24		$	18.77		$	13.77
Income (loss) from       investment operations:
Net investment loss			(0.19	)(1)		(0.28	)		(0.48	)		(0.40	)		(0.42	)		(0.39	)
Net realized and unrealized             gain (loss) on investments			(1.92	)(1)		2.42			1.78			5.58			1.89			5.39
Total from investment operations			(2.11	)		2.14			1.30			5.18			1.47			5.00
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(3.12	)		(0.06	)		(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.00	)		(3.12	)		(0.06	)		(0.00	)		(0.00	)		(0.00	)
Net asset value, end of period		$	23.57		$	25.68		$	26.66		$	25.42		$	20.24		$	18.77
Total return			- -8.22	%		7.19	%		5.13	%		25.59	%		7.83	%		36.31	%
Net assets, end of period       (in millions)		$18			$20			$19			$18			$12			$11
Ratio of expenses to       average net assets			2.49	%(2)		2.42	%		2.51	%		2.58	%		2.90	%		3.06	%
Ratio of net investment loss       to average net assets			- -1.43	%(2)		- -1.39	%		- -1.91	%		- -2.10	%		- -2.31	%		- -2.60	%
Portfolio turnover rate			27	%		96	%		81	%		112	%		106	%		114	%

(1)Based on average weekly shares outstanding.

(2)Annualized.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY SCIENCE AND TECHNOLOGY FUND
     Class C Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	26.21		$	27.14		$	25.84		$	20.53		$	18.98		$	13.88
Income (loss) from       investment operations:
Net investment loss			(0.10	)		(0.26	)		(0.49	)		(0.43	)		(0.42	)		(0.38	)
Net realized and unrealized             gain (loss) on investments			(2.03	)		2.50			1.85			5.74			1.97			5.48
Total from investment operations			(2.13	)		2.24			1.36			5.31			1.55			5.10
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(3.17	)		(0.06	)		(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.00	)		(3.17	)		(0.06	)		(0.00	)		(0.00	)		(0.00	)
Net asset value, end of period		$	24.08		$	26.21		$	27.14		$	25.84		$	20.53		$	18.98
Total return			- -8.13	%		7.38	%		5.32	%		25.86	%		8.17	%		36.74	%
Net assets, end of period       (in millions)		$124			$122			$109			$113			$88			$89
Ratio of expenses to       average net assets			2.27	%(1)		2.26	%		2.33	%		2.38	%		2.58	%		2.66	%
Ratio of net investment loss       to average net assets			- -1.21	%(1)		- -1.23	%		- -1.74	%		- -1.90	%		- -2.00	%		- -2.15	%
Portfolio turnover rate			27	%		96	%		81	%		112	%		106	%		114	%

(1)Annualized.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY SCIENCE AND TECHNOLOGY FUND
     Class E Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                         (Unaudited)

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	27.76		$	28.79
Income (loss) from investment operations:
Net investment loss			(0.11	)		(0.44	)(2)
Net realized and unrealized gain (loss)             on investments			(2.12	)		2.69	(2)
Total from investment operations			(2.23	)		2.25
Less distributions from:
Net investment income			(0.00	)		(0.00	)
Capital gains			(0.00	)		(3.28	)
Total distributions			(0.00	)		(3.28	)
Net asset value, end of period		$	25.53		$	27.76
Total return(3)			- -8.03	%		6.98	%
Net assets, end of period (in millions)		$2			$1
Ratio of expenses to average net assets       including expense waiver			2.07	%(4)		2.61	%(4)
Ratio of net investment loss to average       net assets including expense waiver			- -1.00	%(4)		- -1.46	%(4)
Ratio of expenses to average net assets       excluding expense waiver			2.72	%(4)		2.61	%(4)(5)
Ratio of net investment loss to average net       assets excluding expense waiver			- -1.65	%(4)		- -1.46	%(4)(5)
Portfolio turnover rate			27	%		96	%(6)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

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

(4)Annualized.

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

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY SCIENCE AND TECHNOLOGY FUND
     Class I Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                          (Unaudited)

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	29.35		$	29.71
Income (loss) from investment operations:
Net investment income			0.00	(2)		0.02	(2)
Net realized and unrealized gain (loss)             on investments			(2.22	)(2)		3.16	(2)
Total from investment operations			(2.22	)		3.18
Less distributions from:
Net investment income			(0.00	)		(0.00	)
Capital gains			(0.00	)		(3.54	)
Total distributions			(0.00	)		(3.54	)
Net asset value, end of period		$	27.13		$	29.35
Total return			- -7.56	%		9.89	%
Net assets, end of period (in millions)		$15			$9
Ratio of expenses to average net assets			1.08	%(3)		1.10	%(3)
Ratio of net investment income to       average net assets			0.01	%(3)		0.05	%(3)
Portfolio turnover rate			27	%		96	%(4)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY SCIENCE AND TECHNOLOGY FUND
     Class R Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended March 31,						For the period from 12-29-05(1) to
	9-30-08				2008			2007			3-31-06
Net asset value, beginning of period		$	27.81		$	28.64		$	27.07		$	25.77
Income (loss) from investment operations:
Net investment loss			(0.14	)		(0.15	)(2)		(0.27	)		(0.09	)
Net realized and unrealized gain             (loss) on investments			(2.03	)		2.68	(2)		1.90			1.39
Total from investment operations			(2.17	)		2.53			1.63			1.30
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(3.36	)		(0.06	)		(0.00	)
Total distributions			(0.00	)		(3.36	)		(0.06	)		(0.00	)
Net asset value, end of period		$	25.64		$	27.81		$	28.64		$	27.07
Total return			- -7.80	%		8.03	%		6.03	%		5.05	%
Net assets, end of period (in thousands)		$4,310			$2,185			$429			$105
Ratio of expenses to average net assets			1.62	%(3)		1.63	%		1.65	%		1.68	%(3)
Ratio of net investment loss       to average net assets			- -0.55	%(3)		- -0.50	%		- -1.08	%		- -1.29	%(3)
Portfolio turnover rate			27	%		96	%		81	%		112	%(4)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

(4)For the 12 months ended March 31, 2006.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY SCIENCE AND TECHNOLOGY FUND
     Class Y Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	28.87		$	29.62		$	27.92		$	21.96		$	20.07		$	14.51
Income (loss) from       investment operations:
Net investment loss			(0.08	)		(0.09	)(1)		(0.22	)		(0.27	)		(0.18	)(1)		(0.15	)
Net realized and unrealized             gain (loss) on investments			(2.14	)		2.81	(1)		1.98			6.23			2.07	(1)		5.71
Total from investment operations			(2.22	)		2.72			1.76			5.96			1.89			5.56
Less distributions from:
Net investment income			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Capital gains			(0.00	)		(3.47	)		(0.06	)		(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.00	)		(3.47	)		(0.06	)		(0.00	)		(0.00	)		(0.00	)
Net asset value, end of period		$	26.65		$	28.87		$	29.62		$	27.92		$	21.96		$	20.07
Total return			- -7.69	%		8.38	%		6.32	%		27.14	%		9.42	%		38.32	%
Net assets, end of period       (in millions)		$172			$155			$78			$57			$33			$9
Ratio of expenses to       average net assets			1.34	%(2)		1.34	%		1.35	%		1.37	%		1.45	%		1.45	%
Ratio of net investment loss       to average net assets			- -0.27	%(2)		- -0.28	%		- -0.76	%		- -0.88	%		- -0.87	%		- -1.03	%
Portfolio turnover rate			27	%		96	%		81	%		112	%		106	%		114	%

(1)Based on average weekly shares outstanding.

(2)Annualized.

See Accompanying Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY HIGH INCOME FUND

Portfolio Highlights

On September 30, 2008, Ivy High Income Fund had net assets totaling $170,305 (in thousands) invested in a diversified portfolio of:

74.99%	Domestic Corporate Debt Securities
13.52%	Senior Loans
10.39%	Cash and Cash Equivalents
0.77%	Foreign Corporate Debt Securities
0.33%	Domestic Common Stocks

Sector Weightings

As a shareholder of the Fund, for every $100 you had invested on September 30, 2008,
your Fund owned:

Corporate Debt	$	75.76
Consumer Discretionary Bonds	$	24.08
Industrials Bonds	$	17.33
Financial Bonds	$	8,54
Health Care Bonds	$	7.89
Consumer Staples Bonds	$	6.39
Materials Bonds	$	4.58
Information Technology Bonds	$	3.48
Utilities Bonds	$	2.77
Energy Bonds	$	0.70
Senior Loans	$	13.52
Consumer Discretionary Senior Loans	$	3.90
Utilities Senior Loans	$	3.34
Health Care Senior Loans	$	2.32
Miscellaneous Senior Loans(1)	$	1.50
Consumer Staples Senior Loans	$	1.44
Industrials Senior Loans	$	1.02
Cash and Cash Equivalents and       Domestic Common Stocks	$	10.72

(1)Includes $0.51 Commercial and Professional Services Senior Loans, $0.53 Financials Senior Loans and $0.46 Media Senior Loans.

Quality Weightings

On September 30, 2008, the breakdown of bonds (by ratings) held by the Fund was as follows:

Investment Grade
AA	0.49	%
A	1.10	%
Non-Investment Grade
BBB	3.11	%
BB	15.55	%
B	43.94	%
Below B	22.49	%
Non-rated	2.60	%
Cash and Cash Equivalents and Common Stocks	10.72	%

Ratings reflected in the wheel are taken from Standard & Poor's and Moody's.

The Investments of Ivy High Income Fund
September 30, 2008
(In Thousands)                                                                                                                       (Unaudited)
COMMON STOCKS	Shares		Value
Casinos & Gaming - 0.03%
Pinnacle Entertainment, Inc. (A)		7	$	53
Commodity Chemicals - 0.03%
Innophos Holdings, Inc.		2		41
Consumer Finance - 0.08%
Global Cash Access, Inc. (A)		28		142
Oil & Gas Storage & Transportation - 0.19%
Inergy, L.P.		15		321
TOTAL COMMON STOCKS - 0.33%			$	557
(Cost: $775)

CORPORATE DEBT SECURITIES	Principal
Apparel, Accessories & Luxury Goods - 0.81%
Oxford Industries, Inc.,
8.875%, 6-1-11	$	225	203
Perry Ellis International, Inc.,
8.875%, 9-15-13		1,335	1,175
			1,378
Automobile Manufacturers - 0.80%
General Motors Corporation,
7.200%, 1-15-11		750	441
UCI Holdco, Inc.,
10.319%, 12-15-13 (B)(C)		1,224	925
			1,366
Automotive Retail - 2.64%
AutoNation, Inc.:
4.791%, 4-15-13 (B)		1,000	842
7.000%, 4-15-14		2,500	2,175
Group 1 Automotive, Inc.,
8.250%, 8-15-13		1,625	1,479
			4,496
Building Products - 5.69%
CPG International I Inc.,
10.500%, 7-1-13		500	340
Interface, Inc.:
10.375%, 2-1-10		250	255
9.500%, 2-1-14		2,045	2,065

Norcraft Companies, L.P. and Norcraft Finance Corp.,
9.750%, 9-1-12			200		180
Nortek, Inc.,
10.000%, 12-1-13 (D)			1,000		880
PIH Acquisition Co.,
10.750%, 10-1-13			675		405
Ply Gem Industries, Inc.:
9.000%, 2-15-12			3,500		1,908
11.750%, 6-15-13 (D)			4,250		3,655
					9,688
Cable & Satellite - 1.21%
DirecTV Holdings LLC and DirecTV Financing Co.,
7.625%, 5-15-16 (D)			1,500		1,357
EchoStar DBS Corporation,
7.750%, 5-31-15			850		720
					2,077
Casinos & Gaming - 5.69%
Inn of the Mountain Gods Resort and Casino,
12.000%, 11-15-10			1,500		1,020
Mandalay Resort Group,
9.375%, 2-15-10			750		690
MGM MIRAGE:
8.500%, 9-15-10			1,250		1,150
8.375%, 2-1-11			500		409
6.750%, 9-1-12			1,500		1,174
Pinnacle Entertainment, Inc.:
8.250%, 3-15-12			2,445		2,362
8.750%, 10-1-13			1,000		958
7.500%, 6-15-15			1,750		1,295
Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp.,
6.625%, 12-1-14			750		639
					9,697
Chemicals - 3.20%
Compass Minerals International, Inc.,
12.000%, 6-1-13			610		646
Mosaic Company (The):
7.375%, 12-1-14 (D)			195		202
7.625%, 12-1-16 (D)			3,400		3,472
Nalco Company,
7.750%, 11-15-11			1,150		1,127
					5,447
Consumer Finance - 2.59%
ASG Consolidated LLC and ASG Finance, Inc.,
0.000%, 11-1-11 (E)		3,350			2,981
Global Cash Access, L.L.C. and Global Cash Access       Finance Corporation,
8.750%, 3-15-12			1,622		1,427
					4,408
Consumer Products - 2.56%
Visant Holding Corp.:
0.000%, 12-1-13 (E)			400		362
8.750%, 12-1-13			4,350		3,991
					4,353
Containers - 2.79%
Freescale Semiconductor, Inc.:
8.875%, 12-15-14			1,000		690
6.694%, 12-15-14 (B)			1,000		670
Graham Packaging Company, L.P. and GPC Capital Corp. I:
8.500%, 10-15-12			1,000		925
9.875%, 10-15-14			750		653
Solo Cup Company,
8.500%, 2-15-14			2,250		1,800
					4,738
Diversified Banks - 0.77%
FCE Bank plc,
7.875%, 2-15-11 (F)	GBP1,000				1,316
Finance - 2.48%
Ford Motor Credit Company:
9.750%, 9-15-10		$2,000			1,434
8.000%, 12-15-16			1,500		948
General Motors Acceptance Corporation,
6.875%, 9-15-11			2,250		1,005
Goldman Sachs Group, Inc. (The),
6.150%, 4-1-18			1,000		832
					4,219
Gas Pipe Lines - 0.30%
Sonat Inc.,
7.625%, 7-15-11			500		506
Health Care Facilities / Supplies - 7.31%
Biomet, Inc.,
11.625%, 10-15-17		2,500			2,513
HCA Inc.:
6.750%, 7-15-13			750		630
9.625%, 11-15-16			1,750		1,662
HealthSouth Corporation,
9.133%, 6-15-14 (B)			2,150		2,086
ReAble Therapeutics Finance LLC and ReAble       Therapeutics Finance Corporation:
11.750%, 11-15-14			2,000		1,790
10.875%, 11-15-14			300		287
Rural/Metro Corporation,
0.000%, 3-15-16 (E)			320		208
US Oncology, Inc.:
9.000%, 8-15-12			2,000		2,000
10.750%, 8-15-14			1,275		1,281
					12,457
Household Products - 1.64%
Sealy Mattress Company,
8.250%, 6-15-14			500		392
Simmons Bedding Company,
7.875%, 1-15-14			1,000		750
Simmons Company,
0.000%, 12-15-14 (E)			2,955		1,655
					2,797
Lodging - 1.28%
Gaylord Entertainment Company,
8.000%, 11-15-13			2,500		2,175
Packaged Foods & Meats - 2.71%
Central Garden & Pet Company,
9.125%, 2-1-13			6,000		4,620
Paper & Forest Products - 3.42%
Buckeye Technologies Inc.:
8.000%, 10-15-10			4,846		4,483
8.500%, 10-1-13			1,440		1,339
					5,822
Pharmaceuticals - 0.58%
Warner Chilcott Corporation,
8.750%, 2-1-15			1,000		985
Precious Metals & Minerals - 0.58%
Freeport-McMoRan Copper & Gold Inc.,
8.250%, 4-1-15		1,000			983
Railroads - 0.34%
Kansas City Southern Railway Company (The),
7.500%, 6-15-09			580		580
Restaurants - 1.80%
NPC International, Inc.,
9.500%, 5-1-14			3,750		3,075
Retail Stores - 7.66%
Dollar General Corporation:
10.625%, 7-15-15			1,000		985
11.875%, 7-15-17			6,250		5,781
Jostens IH Corp.,
7.625%, 10-1-12			500		459
Michaels Stores, Inc.,
11.375%, 11-1-16			2,200		1,040
Neiman Marcus Group, Inc. (The):
10.375%, 10-15-15			1,000		837
9.000%, 10-15-15			2,000		1,675
Pantry, Inc. (The),
7.750%, 2-15-14			775		599
Sonic Automotive, Inc.,
8.625%, 8-15-13			750		510
Stater Bros. Holdings Inc.,
8.125%, 6-15-12			500		490
Toys "R" Us, Inc.,
7.875%, 4-15-13			850		663
					13,039
Secondary Oil & Gas Producers - 0.70%
Petrohawk Energy Corporation,
9.125%, 7-15-13			1,000		940
R&B Falcon Corporation,
9.500%, 12-15-08			250		253
					1,193
Service - Other - 11.50%
Allied Waste Industries, Inc.,
6.500%, 11-15-10			750		733
Education Management LLC and Education       Management Finance Corp.:
8.750%, 6-1-14			1,000		835
10.250%, 6-1-16			7,500		6,000
Expedia, Inc.,
8.500%, 7-1-16 (D)			2,325		2,092
Iron Mountain Incorporated,
8.625%, 4-1-13			1,000		985
Laureate Education, Inc.:
11.000%, 8-15-15 (C)(D)			1,028		849
10.000%, 8-15-15 (D)			3,000		2,550
11.750%, 8-15-17 (D)			500		425
Lender Processing Services, Inc.,
8.125%, 7-1-16 (D)			1,000		975
Reddy Ice Holdings, Inc.,
0.000%, 11-1-12 (E)			1,435		1,105
West Corporation:
9.500%, 10-15-14			175		134
11.000%, 10-15-16			4,020		2,895
					19,578
Technology - 2.24%
SunGard Data Systems Inc.,
10.250%, 8-15-15			1,000		867
Xerox Capital Trust I,
8.000%, 2-1-27			3,250		2,950
					3,817
Utilities - 0.73%
Energy Future Competitive Holdings Company and Texas       Competitive Electric Holdings Company LLC,
10.250%, 11-1-15 (D)			1,375		1,241
Wireless Telecommunication Service - 1.74%
MetroPCS Communications, Inc.,
9.250%, 11-1-14			1,475		1,379
Sprint Capital Corporation,
7.625%, 1-30-11			1,750		1,593
					2,972
TOTAL CORPORATE DEBT SECURITIES - 75.76%				$	129,023
(Cost: $146,388)

SENIOR LOANS
Automotive Manufacturers - 0.57%
General Motors Corporation,
0.000%, 11-29-13 (B)	1,500			964
Broadcast/Outdoor - 0.46%
High Plains Broadcasting Operating Company LLC,
8.210%, 9-14-16 (B)		194		164
Newport Television LLC & NTV Finance Corp.,
8.210%, 9-14-16 (B)		734		619
				783
Casinos & Gaming - 1.80%
Las Vegas Sands, LLC,
4.560%, 5-23-14 (B)		4,000		3,073
Consumer Finance - 0.53%
Venetian Macau Limited:
5.060%, 5-25-13 (B)		366		333
5.060%, 5-25-13 (B)		634		576
				909
Consumer Products - 1.44%
Wm. Wrigley Jr. Company,
0.000%, 7-17-14 (B)		2,500		2,452
Health Care Facilities / Supplies - 2.33%
CHS/Community Health Systems, Inc.:
1.000%, 7-25-14 (B)		97		86
4.719%, 7-25-14 (B)		459		403
5.060%, 7-25-14 (B)		1,443		1,267
HCA Inc.,
5.051%, 11-18-13 (B)		2,487		2,202
				3,958
Retail Stores - 1.53%
Dollar General Corporation:
5.219%, 7-6-14 (B)		500		433
5.219%, 7-6-14 (B)		1,167		1,010
5.219%, 7-6-14 (B)		333		288
Neiman Marcus Group, Inc. (The),
4.565%, 4-6-13 (B)		1,000		872
				2,603
Service - Other - 0.51%
VNU, Inc.:
4.803%, 8-9-13 (B)		371		326
4.803%, 8-9-13 (B)		617		543
				869
Technology - 1.01%
SunGard Data Systems Inc.,
2.803%, 2-28-14 (B)	1,990			1,727
Utilities - 3.34%
Calpine Corporation,
5.685%, 3-29-14 (B)		3,482		2,971
Energy Future Competitive Holdings Company and Texas       Competitive Electric Holdings Company, LLC:
6.169%, 10-10-14 (B)		17		14
5.989%, 10-10-14 (B)		95		80
5.989%, 10-10-14 (B)		582		489
6.303%, 10-10-14 (B)		893		753
6.302%, 10-10-14 (B)		1,631		1,371
Texas Competitive Electric,
6.169%, 10-10-14 (B)		8		6
				5,684
TOTAL SENIOR LOANS - 13.52%			$	23,022
(Cost: $24,993)
SHORT-TERM SECURITIES
Commercial Paper
Alcoa Incorporated,
5.850%, 10-10-08		1,500		1,498
Clorox Co.:
5.000%, 10-1-08		5,687		5,687
6.000%, 10-7-08		2,000		1,998
Kellogg Co.:
5.000%, 10-3-08		2,000		1,999
4.750%, 10-8-08		1,500		1,499
Wisconsin Electric Power Co.,
2.750%, 10-10-08		3,000		2,998
TOTAL SHORT-TERM SECURITIES - 9.20%			$	15,679
(Cost: $15,679)
TOTAL INVESTMENT SECURITIES - 98.81%			$	168,281
(Cost: $187,835)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.19%				2,024
NET ASSETS - 100.00%			$	170,305

Notes to Schedule of Investments
The following forward currency contracts were outstanding at September 30, 2008:
	Type	Currency	Currency Amount Covered by Contract	Settlement Date	Unrealized Appreciation			Unrealized Depreciation
	Sell	British Pound	39	2-17-09		$	3		$	-
	Sell	British Pound	39	8-17-09			3			-
	Sell	British Pound	39	2-16-10			2			-
	Sell	British Pound	40	8-16-10			2			-
	Sell	British Pound	1,040	2-15-11			54			-
						$	64		$	-

(A)No dividends were paid during the preceding 12 months.

(B)Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2008.

(C)Payment in kind bonds.

(D)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities have been determined to be liquid under guidelines established by the Board of Directors. At September 30, 2008, the total value of these securities amounted to $17,698 or 10.39% of net assets.

(E)Securities do not bear interest for an initial period of time and subsequently become interest bearing.

(F)Principal amounts are denominated in the indicated foreign currency, where applicable (GBP - British Pound).

See Accompanying Notes to Financial Statements.

Statement of Assets and Liabilities
     IVY HIGH INCOME FUND
     September 30, 2008
     (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $187,835)	$	168,281
Cash		1,044
Receivables:
Investment securities sold		6,683
Dividends and interest		3,983
Fund shares sold		313
Unrealized appreciation on forward currency contracts		64
Prepaid and other assets		44
Total assets		180,412
LIABILITIES
Payable for investment securities purchased		9,208
Payable to Fund shareholders		769
Accrued shareholder servicing		58
Accrued accounting services fee		6
Accrued management fee		3
Accrued distribution and service fees		2
Other		61
Total liabilities		10,107
Total net assets	$	170,305
NET ASSETS
$0.01 par value capital stock:
Capital stock	$	225
Additional paid-in capital		196,173
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		857
Accumulated net realized loss on investment transactions		(7,456	)
Net unrealized depreciation in value of investments		(19,494	)
Net assets applicable to outstanding units of capital	$	170,305
Net asset value per share (net assets divided by shares outstanding):
Class A	$7.55
Class B	$7.55
Class C	$7.55
Class E	$7.55
Class I	$7.56
Class Y	$7.56
Capital shares outstanding:
Class A		18,605
Class B		957
Class C		1,816
Class E		106
Class I		37
Class Y		1,026
Capital shares authorized		175,000

See Accompanying Notes to Financial Statements.

Statement of Operations
     IVY HIGH INCOME FUND
     For the Six Months Ended September 30, 2008
     (In Thousands)                                                                                                            (Unaudited)

INVESTMENT INCOME
Income:
Interest and amortization	$	8,212
Dividends		––	*
Total income		8,212
Expenses:
Investment management fee		533
Distribution and service fees:
Class A		178
Class B		38
Class C		75
Class E		1
Class Y		6
Shareholder servicing:
Class A		211
Class B		22
Class C		29
Class E		4
Class I		––	*
Class Y		4
Accounting services fee		36
Audit fees		16
Custodian fees		4
Legal fees		1
Other		118
Total		1,276
Less expenses in excess of limit		(2	)
Total expenses		1,274
Net investment income		6,938
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized net loss on securities		(4,898	)
Realized net loss on foreign currency transactions		(5	)
Realized net loss on investments		(4,903	)
Unrealized depreciation in value of securities during the period		(6,785	)
Unrealized appreciation in value of forward currenct contracts            during the period		64
Unrealized depreciation in value of investments during the period		(6,721	)
Net loss on investments	(11,624		)
Net decrease in net assets resulting from operations	$	(4,686	)

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

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

	For the six months ended September 30,				For the fiscal year ended March 31,
	2008				2008
INCREASE IN NET ASSETS
Operations:
Net investment income		$	6,938		$	10,289
Realized net loss on investments			(4,903	)		(374	)
Unrealized depreciation			(6,721	)		(15,331	)
Net decrease in net assets resulting                       from operations			(4,686	)		(5,416	)
Distributions to shareholders from:(1)
Net investment income:
Class A			(5,245	)		(8,074	)
Class B			(240	)		(465	)
Class C			(486	)		(1,122	)
Class E			(25	)		(31	)
Class I			(13	)		(19	)
Class Y			(183	)		(387	)
Realized gains on investment transactions:
Class A			(––	)		(––	)
Class B			(––	)		(––	)
Class C			(––	)		(––	)
Class E			(––	)		(––	)
Class I			(––	)		(––	)
Class Y			(––	)		(––	)
			(6,192	)		(10,098	)
Capital share transactions			28,127			54,878
Total increase			17,249			39,364
NET ASSETS
Beginning of period			153,056			113,692
End of period		$	170,305		$	153,056
Accumulated undistributed net investment income		$	857		$	116

(1)See "Financial Highlights" on pages 161 - 166.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY HIGH INCOME FUND
     Class A Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	8.01		$	8.92		$	8.60		$	8.69		$	8.85		$	8.07
Income (loss) from       investment operations:
Net investment income			0.33			0.66			0.62			0.58			0.57			0.56
Net realized and unrealized             gain (loss) on investments		(0.49		)	(0.92		)		0.32		(0.09		)	(0.16		)		0.78
Total from investment operations		(0.16		)	(0.26		)		0.94			0.49			0.41			1.34
Less distributions from:
Net investment income		(0.30		)	(0.65		)	(0.62		)	(0.58		)	(0.57		)	(0.56		)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)
Total distributions		(0.30		)	(0.65		)	(0.62		)	(0.58		)	(0.57		)	(0.56		)
Net asset value, end of period		$	7.55		$	8.01		$	8.92		$	8.60		$	8.69		$	8.85
Total return(1)		- -2.18		%	- -3.04		%	11.39		%		5.80	%		4.69	%	17.24		%
Net assets, end of period       (in millions)		$140			$127			$79			$39			$32			$18
Ratio of expenses to       average net assets			1.38	%(2)		1.36	%		1.38	%		1.45	%		1.44	%		1.39	%
Ratio of net investment income       to average net assets			8.24	%(2)		7.76	%		7.20	%		6.70	%		6.43	%		6.62	%
Portfolio turnover rate			54	%		83	%		98	%		45	%		54	%		78	%

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

(2)Annualized.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY HIGH INCOME FUND
     Class B Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	8.01		$	8.92		$	8.60		$	8.69		$	8.85		$	8.07
Income (loss) from       investment operations:
Net investment income			0.29			0.56			0.53			0.50			0.49			0.50
Net realized and unrealized             gain (loss) on investments		(0.49		)	(0.91		)		0.32		(0.09		)	(0.16		)		0.78
Total from investment operations		(0.20		)	(0.35		)		0.85			0.41			0.33			1.28
Less distributions from:
Net investment income		(0.26		)	(0.56		)	(0.53		)	(0.50		)	(0.49		)	(0.50		)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)
Total distributions		(0.26		)	(0.56		)	(0.53		)	(0.50		)	(0.49		)	(0.50		)
Net asset value, end of period		$	7.55		$	8.01		$	8.92		$	8.60		$	8.69		$	8.85
Total return		- -2.70		%	-4.06		%	10.24		%		4.85	%		3.80	%	16.22		%
Net assets, end of period       (in millions)		$7			$7			$7			$6			$5			$4
Ratio of expenses to       average net assets			2.47	%(1)		2.43	%		2.43	%		2.36	%		2.31	%		2.28	%
Ratio of net investment income       to average net assets			7.14	%(1)		6.62	%		6.14	%		5.79	%		5.56	%		5.78	%
Portfolio turnover rate			54	%		83	%		98	%		45	%		54	%		78	%

(1)Annualized.

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	8.01		$	8.92		$	8.60		$	8.69		$	8.85		$	8.07
Income (loss) from       investment operations:
Net investment income			0.30			0.59			0.55			0.51			0.50			0.50
Net realized and unrealized             gain (loss) on investments		(0.49		)	(0.92		)		0.32		(0.09		)	(0.16		)		0.78
Total from investment operations		(0.19		)	(0.33		)		0.87			0.42			0.34			1.28
Less distributions from:
Net investment income		(0.27		)	(0.58		)	(0.55		)	(0.51		)	(0.50		)	(0.50		)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)
Total distributions		(0.27		)	(0.58		)	(0.55		)	(0.51		)	(0.50		)	(0.50		)
Net asset value, end of period		$	7.55		$	8.01		$	8.92		$	8.60		$	8.69		$	8.85
Total return		- -2.60		%	- -3.84		%	10.51		%	5.00		%		3.90	%	16.30		%
Net assets, end of period       (in millions)		$14			$14			$17			$17			$22			$23
Ratio of expenses to       average net assets			2.23	%(1)		2.18	%		2.18	%		2.21	%		2.20	%		2.21	%
Ratio of net investment income       to average net assets			7.37	%(1)		6.86	%		6.39	%		5.94	%		5.67	%		5.89	%
Portfolio turnover rate			54	%		83	%		98	%		45	%		54	%		78	%

(1)Annualized.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY HIGH INCOME FUND
     Class E Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                       (Unaudited)

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	8.00		$	8.92
Income (loss) from investment operations:
Net investment income			0.31			0.62	(2)
Net realized and unrealized loss on investments		(0.48		)	(0.93		)(2)
Total from investment operations		(0.17		)	(0.31		)
Less distributions from:
Net investment income		(0.28		)	(0.61		)
Capital gains		(0.00		)	(0.00		)
Total distributions		(0.28		)	(0.61		)
Net asset value, end of period		$	7.55		$	8.00
Total return(3)		- -2.34		%	- -3.69		%
Net assets, end of period (in millions)		$1			$1
Ratio of expenses to average net assets       including expense waiver			1.85	%(4)		1.97	%(4)
Ratio of net investment income to average       net assets including expense waiver			7.78	%(4)		7.19	%(4)
Ratio of expenses to average net assets       excluding expense waiver			2.28	%(4)		1.97	%(4)(5)
Ratio of net investment income to average       net assets excluding expense waiver			7.35	%(4)		7.19	%(4)(5)
Portfolio turnover rate			54	%		83	%(6)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

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

(4)Annualized.

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

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY HIGH INCOME FUND
     Class I Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                       (Unaudited)

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	8.01		$	8.92
Income (loss) from investment operations:
Net investment income			0.37			0.79	(2)
Net realized and unrealized loss on investments		(0.51		)	(0.94		)(2)
Total from investment operations		(0.14		)	(0.15		)
Less distributions from:
Net investment income		(0.31		)	(0.76		)
Capital gains		(0.00		)	(0.00		)
Total distributions		(0.31		)	(0.76		)
Net asset value, end of period		$	7.56		$	8.01
Total return		- -1.91		%	- -1.90		%
Net assets, end of period (in thousands)		$283			$300
Ratio of expenses to average net assets			0.90	%(3)		0.99	%(3)
Ratio of net investment income to average net assets			8.69	%(3)		8.11	%(3)
Portfolio turnover rate			54	%		83	%(4)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY HIGH INCOME FUND
     Class Y Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	8.02		$	8.92		$	8.60		$	8.69		$	8.85		$	8.07
Income (loss) from       investment operations:
Net investment income			0.36	(1)		0.68			0.64			0.59			0.58			0.58
Net realized and unrealized             gain (loss) on investments		(0.51		)(1)	(0.92		)		0.32		(0.09		)	(0.16		)		0.78
Total from investment operations		(0.15		)	(0.24		)		0.96			0.50			0.42			1.36
Less distributions from:
Net investment income		(0.31		)	(0.66		)	(0.64		)	(0.59		)	(0.58		)	(0.58		)
Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)
Total distributions		(0.31		)	(0.66		)	(0.64		)	(0.59		)	(0.58		)	(0.58		)
Net asset value, end of period		$	7.56		$	8.02		$	8.92		$	8.60		$	8.69		$	8.85
Total return		- -2.13		%	- -2.78		%	11.60		%		6.00	%		4.83	%	17.36		%
Net assets, end of period       (in millions)		$8			$4			$11			$10			$9			$10
Ratio of expenses to       average net assets			1.18	%(2)		1.20	%		1.20	%		1.25	%		1.30	%		1.30	%
Ratio of net investment income       to average net assets			8.53	%(2)		7.85	%		7.37	%		6.90	%		6.57	%		6.82	%
Portfolio turnover rate			54	%		83	%		98	%		45	%		54	%		78	%

(1)Based on average weekly shares outstanding.

(2)Annualized.

See Accompanying Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY LIMITED-TERM BOND FUND

Portfolio Highlights

On September 30, 2008, Ivy Limited-Term Bond Fund had net assets totaling $173,950 (in thousands) invested in a diversified portfolio of:

38.13%	United States Government Agency Obligations
27.93%	United States Government Obligations
22.99%	Cash and Cash Equivalents
9.44%	Domestic Corporate Debt Securities
1.12%	Foreign Corporate Debt Securities
0.39%	Municipal Obligations - Taxable

Sector Weightings

As a shareholder of the Fund, for every $100 you had invested on September 30, 2008,
your Fund owned:

Bonds
United States Government Agency Obligations	$	38.13
United States Government Obligations	$	27.93
Cash and Cash Equivalents	$	22.99
Corporate Bonds	$	10.56
Municipal Obligations - Taxable	$	0.39

Quality Weightings

On September 30, 2008, the breakdown of bonds (by ratings) held by the Fund was as follows:

Investment Grade
AAA	66.62	%
AA	2.25	%
A	5.26	%
BBB	1.10	%
Non-Investment Grade
Not Rated	1.78	%
Cash and Cash Equivalents	22.99	%

Ratings reflected in the wheel are taken from Standard & Poor's.

Certain U.S. government securities in which the Fund may invest, such as Treasury securities and securities issued by the Government National Mortgage Association (Ginnie Mae), are backed by the full faith and credit of the U.S. government. However, other U.S. government securities in which the Fund may invest, such as securities issued by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Banks (FHLB), are not backed by the full faith and credit of the U.S. government, are not insured or guaranteed by the U.S. government and, instead, may be supported only by the right of the issuer to borrow from the U.S. Treasury or by the credit of the issuer.

On Sept. 7 2008, the Federal Housing Finance Agency (FHFA), an agency of the U.S. government, placed Fannie Mae and Freddie Mac into conservatorship, a statutory process with the objective of returning the entities to normal business operations. FHFA will act as the conservator to operate Fannie Mae and Freddie Mac until they are stabilized. It is unclear what effect this conservatorship will have on the securities issued or guaranteed by Fannie Mae or Freddie Mac.

The Investments of Ivy Limited-Term Bond Fund
September 30, 2008
(In Thousands)                                                                                                                       (Unaudited)
CORPORATE DEBT SECURITIES	Principal		Value
Banking - 1.95%
JPMorgan Chase & Co.,
5.375%, 10-1-12	$	2,000	$	1,932
Wells Fargo Financial, Inc.,
5.500%, 8-1-12		1,487		1,459
				3,391
Cable / Media - 1.14%
Cox Communications, Inc.,
4.625%, 1-15-10		1,000		986
Walt Disney Company (The),
4.700%, 12-1-12		1,000		995
				1,981
Chemicals - 0.34%
E.I. du Pont de Nemours and Company,
5.000%, 1-15-13		600		593
Electric - 0.30%
Duke Energy Corporation,
6.250%, 1-15-12		500		515
Electronics - 0.91%
Hewlett-Packard Company,
6.500%, 7-1-12		1,500		1,577
Finance - Other - 2.33%
Berkshire Hathaway Finance Corporation:
4.750%, 5-15-12		550		555
5.000%, 8-15-13 (A)		1,500		1,496
General Electric Capital Corporation:
2.910%, 4-10-12 (B)		1,000		975
5.250%, 10-19-12		550		517
TIAA Global Markets, Inc.,
5.125%, 10-10-12 (A)		500		509
				4,052
Information / Data Technology - 0.80%
Cisco Systems, Inc.,
2.892%, 2-20-09 (B)		1,000		999
IBM International Group Capital LLC,
5.050%, 10-22-12		400		403
				1,402
Leasing - 0.42%
International Lease Finance Corporation,
5.000%, 4-15-10		1,000		741
Metals / Mining - 0.58%
BHP Billiton Finance (USA) Limited,
5.000%, 12-15-10		1,000		1,006
Pharmaceuticals - 0.30%
Abbott Laboratories,
5.600%, 5-15-11		500		517
Securities - 0.27%
Merrill Lynch & Co., Inc.,
6.050%, 8-15-12		500		469
Telecommunications - 1.10%
AT&T Inc.,
4.950%, 1-15-13		500		479
British Telecommunications plc,
5.150%, 1-15-13		1,000		933
SBC Communications Inc.,
3.014%, 11-14-08 (B)		500		499
				1,911
Wireless - 0.12%
AT&T Wireless Services, Inc.,
7.875%, 3-1-11		200		210
TOTAL CORPORATE DEBT SECURITIES - 10.56%			$	18,365
(Cost: $19,101)
MUNICIPAL BONDS - TAXABLE
Missouri
Missouri Development Finance Board, Taxable Infrastructure       Facilities Revenue Bonds (City of Independence,       Missouri - Crackerneck Creek Project), Series 2006A:
5.300%, 3-1-09		150		151
5.350%, 3-1-10		515		522
TOTAL MUNICIPAL BONDS - TAXABLE - 0.39%			$	673
(Cost: $665)

UNITED STATES GOVERNMENT AGENCY OBLIGATIONS
Agency Obligations - 16.22%
Federal Agricultural Mortgage Corporation Guaranteed       Notes Trust 2006-1,
4.875%, 1-14-11 (C)	3,000		3,089
Federal Farm Credit Bank:
3.750%, 12-6-10	500		504
4.050%, 9-29-11	3,000		2,996
4.990%, 12-24-14	1,500		1,497
Federal Home Loan Bank,
5.000%, 1-15-15	1,500		1,502
Federal Home Loan Mortgage Corporation:
4.500%, 7-6-10	5,000		5,106
3.125%, 10-25-10	2,500		2,500
5.250%, 10-1-12	800		800
5.375%, 1-9-14	2,500		2,515
Federal National Mortgage Association:
5.080%, 5-14-10	3,000		3,039
5.300%, 5-7-12	1,150		1,152
5.125%, 11-2-12	1,000		1,022
4.000%, 1-18-13	2,500		2,495
			28,217
Mortgage-Backed Obligations - 20.04%
Federal Home Loan Mortgage Corporation Adjustable       Rate Participation Certificates:
5.431%, 4-1-36 (B)	732		737
5.663%, 7-1-36 (B)	1,010		1,029
Federal Home Loan Mortgage Corporation Agency       REMIC/CMO:
4.000%, 12-15-12	237		235
3.500%, 12-15-16	461		454
4.250%, 3-15-31	357		353
5.000%, 5-15-31	2,165		2,169
4.000%, 11-15-32	824		800
5.500%, 5-15-34	685		695
Federal Home Loan Mortgage Corporation Agency       REMIC/CMO (Interest Only): (D)
5.500%, 10-15-23	594		9
5.000%, 6-15-24	1,011		40
Federal Home Loan Mortgage Corporation Fixed Rate       Participation Certificates:
5.500%, 1-1-17	120		122
5.500%, 5-1-17	126		128
4.500%, 4-1-18	835		823
5.500%, 3-1-22	844		851
6.000%, 11-1-36	3,117		3,158
Federal National Mortgage Association Agency       REMIC/CMO:
5.500%, 6-25-18	2,282		2,302
5.000%, 9-25-18	1,500		1,497
5.000%, 6-25-22	631		634
5.500%, 10-25-32	1,000		993
Federal National Mortgage Association Agency       REMIC/CMO (Interest Only), (D)
5.500%, 11-25-36	1,512		351
Federal National Mortgage Association Fixed Rate       Pass-Through Certificates:
7.000%, 10-1-14	18		19
5.500%, 2-1-17	383		389
5.000%, 11-1-17	455		458
5.500%, 1-1-18	387		394
5.000%, 3-1-18	696		698
4.500%, 6-1-19	534		525
4.500%, 8-1-19	843		827
5.000%, 12-1-19	504		504
5.500%, 11-1-22	1,690		1,706
5.000%, 5-1-28	2,443		2,397
5.000%, 6-25-32	3,250		3,205
5.500%, 2-1-33	952		952
6.500%, 11-1-37	2,857		2,915
5.500%, 1-25-39	853		861
Government National Mortgage Association Fixed Rate       Pass-Through Certificates:
5.000%, 12-15-17	778		792
4.000%, 9-15-18	873		846
			34,868
Non-Agency REMIC/CMO - 1.87%
Federal Home Loan Mortgage Corporation Non-Agency       REMIC/CMO,
5.500%, 3-15-31	1,500		1,523
Government National Mortgage Association Non-Agency       REMIC/CMO:
4.000%, 1-16-30	59		56
4.585%, 8-16-34	1,700		1,666
			3,245
TOTAL UNITED STATES GOVERNMENT AGENCY       OBLIGATIONS - 38.13%		$	66,330
(Cost: $66,201)
UNITED STATES GOVERNMENT OBLIGATIONS
Treasury Obligations
United States Treasury Notes:
4.000%, 4-15-10	5,000		5,167
4.500%, 11-15-10	5,000		5,267
4.500%, 2-28-11	5,000		5,291
5.000%, 8-15-11	3,000		3,241
4.500%, 11-30-11	6,000		6,379
4.625%, 2-29-12	5,000		5,339
4.125%, 8-31-12	4,500		4,747
3.875%, 2-15-13	6,000		6,248
4.250%, 8-15-13	6,500		6,906
TOTAL UNITED STATES GOVERNMENT       OBLIGATIONS - 27.93%		$	48,585
(Cost: $48,054)

SHORT-TERM SECURITIES
Commercial Paper - 18.40%
Air Products and Chemicals, Inc.,
1.500%, 10-1-08	3,266		3,266
Automatic Data Processing Inc.,
2.000%, 10-1-08	3,000		3,000
Avon Capital Corp. (Avon Products, Inc.),
2.200%, 10-3-08	7,500		7,499
Campbell Soup Co.,
1.930%, 10-14-08	4,000		3,997
Danaher Corporation,
1.800%, 10-6-08	3,000		2,999
General Mills, Inc.,
2.800%, 10-9-08	2,500		2,499
Johnson & Johnson,
2.030%, 11-4-08	3,000		2,994
Nestle Finance International Ltd.,
2.200%, 10-23-08	1,350		1,348
Procter & Gamble International Funding S.C.A.       (Procter & Gamble Company (The)),
2.190%, 10-17-08	2,000		1,998
Walgreen Co.,
1.000%, 10-1-08	2,400		2,400
			32,000
United States Government Obligations - 1.72%
United States Treasury Bills,
0.300%, 10-23-08	3,000		3,000
TOTAL SHORT-TERM SECURITIES - 20.12%		$	35,000
(Cost: $35,000)
TOTAL INVESTMENT SECURITIES - 97.13%		$	168,953
(Cost: $169,021)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 2.87%			4,997
NET ASSETS - 100.00%		$	173,950

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. These securities have been determined to be illiquid under guidelines established by the Board of Directors. At September 30, 2008, the total value of these securities amounted to $2,005 or 1.15% of net assets.

(B)Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2008.

(C)Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. This security has been determined to be liquid under guidelines established by the Board of Directors. At September 30, 2008, the total value of this security amounted to 1.78% of net assets.

(D)Amount shown in principal column represents notional amount for computation of interest.

The following acronyms are used throughout this portfolio:
CMO = Collateralized Mortgage Obligation
REMIC = Real Estate Mortgage Investment Conduit

See Accompanying Notes to Financial Statements.

Statement of Assets and Liabilities
     IVY LIMITED-TERM BOND FUND
     September 30, 2008
     (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $169,021)	$	168,953
Cash		6,066
Receivables:
Fund shares sold		5,067
Interest		1,173
Investment securities sold		53
Prepaid and other assets		44
Total assets		181,356
LIABILITIES
Payable for investment securities purchased		6,268
Payable to Fund shareholders		1,051
Accrued shareholder servicing		31
Dividends payable		17
Accrued accounting services fee		6
Accrued distribution and service fees		2
Accrued management fee		2
Other		29
Total liabilities		7,406
Total net assets	$	173,950
NET ASSETS
$0.01 par value capital stock:
Capital stock	$	168
Additional paid-in capital		173,997
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		––
Accumulated net realized loss on investment transactions		(147	)
Net unrealized depreciation in value of investments		(68	)
Net assets applicable to outstanding units of capital	$	173,950
Net asset value per share (net assets divided by shares outstanding):
Class A	$10.33
Class B	$10.33
Class C	$10.33
Class E	$10.33
Class I	$10.33
Class Y	$10.33
Capital shares outstanding:
Class A		11,149
Class B		876
Class C		4,253
Class E		11
Class I		21
Class Y		530
Capital shares authorized		150,000

See Accompanying Notes to Financial Statements.

Statement of Operations
     IVY LIMITED-TERM BOND FUND
     For the Six Months Ended September 30, 2008
     (In Thousands)                                                                                                            (Unaudited)

INVESTMENT INCOME
Income:
Interest and amortization	$	2,310
Expenses:
Investment management fee		270
Distribution and service fees:
Class A		103
Class B		32
Class C		87
Class E		––	*
Class Y		2
Shareholder servicing:
Class A		103
Class B		11
Class C		25
Class E		––	*
Class I		––	*
Class Y		2
Registration fees		40
Accounting services fee		29
Audit fees		10
Custodian fees		5
Legal fees		1
Other		26
Total		746
Less expenses in excess of limit		(81	)
Total expenses		665
Net investment income		1,645
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Realized net gain on investments		76
Unrealized depreciation in value of investments during the period	(1,842		)
Net loss on investments	(1,766		)
Net decrease in net assets resulting from operations	$	(121	)

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

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

	For the six months ended September 30,				For the fiscal year ended March 31,
	2008				2008
INCREASE IN NET ASSETS
Operations:
Net investment income		$	1,645		$	2,348
Realized net gain on investments			76			455
Unrealized appreciation (depreciation)			(1,842	)		1,968
Net increase (decrease) in net assets                       resulting from operations			(121	)		4,771
Distributions to shareholders from:(1)
Net investment income:
Class A			(1,324	)		(1,806	)
Class B			(78	)		(151	)
Class C			(209	)		(337	)
Class E			(2	)		(4	)
Class I			(2	)		(5	)
Class Y			(30	)		(45	)
Realized gains on investment transactions:
Class A			(––	)		(––	)
Class B			(––	)		(––	)
Class C			(––	)		(––	)
Class E			(––	)		(––	)
Class I			(––	)		(––	)
Class Y			(––	)		(––	)
			(1,645	)		(2,348	)
Capital share transactions			80,821			39,040
Total increase			79,055			41,463
NET ASSETS
Beginning of period			94,895			53,432
End of period		$	173,950		$	94,895
Accumulated undistributed net investment income		$	––		$	––

(1)See "Financial Highlights" on pages 179 - 184.

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	10.48		$	10.15		$	10.00		$	10.14		$	10.48		$	10.45
Income (loss) from       investment operations:
Net investment income			0.17			0.38			0.33			0.30			0.28			0.29
Net realized and             unrealized gain             (loss) on investments			(0.15	)		0.33			0.15			(0.14	)		(0.34	)		0.03
Total from investment       operations			0.02			0.71			0.48			0.16			(0.06	)		0.32
Less distributions from:
Net investment income			(0.17	)		(0.38	)		(0.33	)		(0.30	)		(0.28	)		(0.29	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.17	)		(0.38	)		(0.33	)		(0.30	)		(0.28	)		(0.29	)
Net asset value, end of period		$	10.33		$	10.48		$	10.15		$	10.00		$	10.14		$	10.48
Total return(1)			0.22	%		7.13	%		4.89	%		1.59	%		- -0.60	%		3.13	%
Net assets, end of period       (in millions)		$115			$72			$35			$33			$38			$35
Ratio of expenses to average       net assets including       expense waiver			1.06	%(2)		1.19	%		1.33	%		1.31	%		1.27	%		1.18	%
Ratio of net investment       income to average       net assets including       expense waiver			3.23	%(2)		3.70	%		3.30	%		2.98	%		2.71	%		2.79	%
Ratio of expenses to average       net assets excluding       expense waiver			1.21	%(2)		1.27	%		1.33	%(3)		1.31	%(3)		1.27	%(3)		1.18	%(3)
Ratio of net investment       income to average       net assets excluding       expense waiver			3.08	%(2)		3.62	%		3.30	%(3)		2.98	%(3)		2.71	%(3)		2.79	%(3)
Portfolio turnover rate			9	%		86	%		41	%		28	%		36	%		30	%

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

(2)Annualized.

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

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	10.48		$	10.15		$	10.00		$	10.14		$	10.48		$	10.45
Income (loss) from       investment operations:
Net investment income			0.13			0.29			0.24			0.21			0.18			0.19
Net realized and             unrealized gain (loss)             on investments			(0.15	)		0.33			0.15			(0.14	)		(0.34	)		0.03
Total from investment       operations			(0.02	)		0.62			0.39			0.07			(0.16	)		0.22
Less distributions from:
Net investment income			(0.13	)		(0.29	)		(0.24	)		(0.21	)		(0.18	)		(0.19	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.13	)		(0.29	)		(0.24	)		(0.21	)		(0.18	)		(0.19	)
Net asset value, end of period		$	10.33		$	10.48		$	10.15		$	10.00		$	10.14		$	10.48
Total return			- -0.20	%		6.21	%		3.94	%		0.68	%		- -1.51	%		2.18	%
Net assets, end of period       (in millions)		$9			$6			$5			$5			$7			$6
Ratio of expenses to average       net assets including    ��  expense waiver			1.87	%(1)		2.07	%		2.23	%		2.22	%		2.20	%		2.11	%
Ratio of net investment       income to average       net assets including       expense waiver			2.41	%(1)		2.83	%		2.39	%		2.06	%		1.78	%		1.86	%
Ratio of expenses to average       net assets excluding       expense waiver			2.02	%(1)		2.15	%		2.23	%(2)		2.22	%(2)		2.20	%(2)		2.11	%(2)
Ratio of net investment       income to average       net assets excluding       expense waiver			2.26	%(1)		2.75	%		2.39	%(2)		2.06	%(2)		1.78	%(2)		1.86	%(2)
Portfolio turnover rate			9	%		86	%		41	%		28	%		36	%		30	%

(1)Annualized.

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

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	10.48		$	10.15		$	10.00		$	10.14		$	10.48		$	10.45
Income (loss) from       investment operations:
Net investment income			0.13			0.29			0.24			0.21			0.19			0.20
Net realized and             unrealized gain             (loss) on investments			(0.15	)		0.33			0.15			(0.14	)		(0.34	)		0.03
Total from investment       operations			(0.02	)		0.62			0.39			0.07			(0.15	)		0.23
Less distributions from:
Net investment income			(0.13	)		(0.29	)		(0.24	)		(0.21	)		(0.19	)		(0.20	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.13	)		(0.29	)		(0.24	)		(0.21	)		(0.19	)		(0.20	)
Net asset value, end of period		$	10.33		$	10.48		$	10.15		$	10.00		$	10.14		$	10.48
Total return			- -0.18	%		6.19	%		3.98	%		0.73	%		- -1.45	%		2.23	%
Net assets, end of period       (in millions)		$44			$15			$12			$13			$17			$22
Ratio of expenses to average       net assets including       expense waiver			1.84	%(1)		2.09	%		2.20	%		2.17	%		2.14	%		2.05	%
Ratio of net investment       income to average       net assets including       expense waiver			2.40	%(1)		2.81	%		2.42	%		2.12	%		1.84	%		1.92	%
Ratio of expenses to average       net assets excluding       expense waiver			1.99	%(1)		2.17	%		2.20	%(2)		2.17	%(2)		2.14	%(2)		2.05	%(2)
Ratio of net investment       income to average net       assets excluding       expense waiver			2.25	%(1)		2.73	%		2.42	%(2)		2.12	%(2)		1.84	%(2)		1.92	%(2)
Portfolio turnover rate			9	%		86	%		41	%		28	%		36	%		30	%

(1)Annualized.

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

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the period from 4-2-07(2) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	10.48		$	10.15
Income (loss) from investment operations:
Net investment income			0.19			0.40
Net realized and unrealized gain (loss)             on investments			(0.15	)		0.33
Total from investment operations			0.04			0.73
Less distributions from:
Net investment income			(0.19	)		(0.40	)
Capital gains			(0.00	)		(0.00	)
Total distributions			(0.19	)		(0.40	)
Net asset value, end of period		$	10.33		$	10.48
Total return(3)			0.37	%		7.31	%
Net assets, end of period (in thousands)		$111			$107
Ratio of expenses to average net assets       including expense waiver			0.76	%(4)		0.98	%(4)
Ratio of net investment income to average       net assets including expense waiver			3.55	%(4)		3.93	%(4)
Ratio of expenses to average net assets       excluding expense waiver			0.91	%(4)		1.06	%(4)
Ratio of net investment income to average       net assets excluding expense waiver			3.40	%(4)		3.85	%(4)
Portfolio turnover rate			9	%		86	%(5)

(1)Class is closed.

(2)Commencement of operations of the class.

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

(4)Annualized.

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

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	10.48		$	10.15
Income (loss) from investment operations:
Net investment income			0.19			0.49
Net realized and unrealized gain (loss)             on investments			(0.15	)		0.33
Total from investment operations			0.04			0.82
Less distributions from:
Net investment income			(0.19	)		(0.49	)
Capital gains			(0.00	)		(0.00	)
Total distributions			(0.19	)		(0.49	)
Net asset value, end of period		$	10.33		$	10.48
Total return			0.43	%		8.31	%
Net assets, end of period (in thousands)		$307			$131
Ratio of expenses to average net assets       including expense waiver			0.64	%(2)		0.89	%(2)
Ratio of net investment income to average       net assets including expense waiver			3.64	%(2)		4.02	%(2)
Ratio of expenses to average net assets       excluding expense waiver			0.79	%(2)		0.97	%(2)
Ratio of net investment income to average       net assets excluding expense waiver			3.49	%(2)		3.94	%(2)
Portfolio turnover rate			9	%		86	%(3)

(1)Commencement of operations of the class.

(2)Annualized.

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

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	10.48		$	10.15		$	10.00		$	10.14		$	10.48		$	10.45
Income (loss) from       investment operations:
Net investment income			0.17			0.39			0.34			0.31			0.29			0.29
Net realized and             unrealized gain (loss)             on investments			(0.15	)		0.33			0.15			(0.14	)		(0.34	)		0.03
Total from investment       operations			0.02			0.72			0.49			0.17			(0.05	)		0.32
Less distributions from:
Net investment income			(0.17	)		(0.39	)		(0.34	)		(0.31	)		(0.29	)		(0.29	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.17	)		(0.39	)		(0.34	)		(0.31	)		(0.29	)		(0.29	)
Net asset value, end of period		$	10.33		$	10.48		$	10.15		$	10.00		$	10.14		$	10.48
Total return			0.26	%		7.25	%		5.06	%		1.72	%		- -0.49	%		3.18	%
Net assets, end of period       (in millions)		$6			$2			$1			$2			$2			$2
Ratio of expenses to average       net assets including       expense waiver			0.96	%(1)		1.09	%		1.17	%		1.19	%		1.16	%		1.13	%
Ratio of net investment       income to average       net assets including       expense waiver			3.23	%(1)		3.79	%		3.44	%		3.10	%		2.82	%		2.83	%
Ratio of expenses to average       net assets excluding       expense waiver			1.11	%(1)		1.17	%		1.17	%(2)		1.19	%(2)		1.16	%(2)		1.13	%(2)
Ratio of net investment       income to average       net assets excluding       expense waiver			3.08	%(1)		3.71	%		3.44	%(2)		3.10	%(2)		2.82	%(2)		2.83	%(2)
Portfolio turnover rate			9	%		86	%		41	%		28	%		36	%		30	%

(1)Annualized.

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

See Accompanying Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY MONEY MARKET FUND

Portfolio Highlights

On September 30, 2008, Ivy Money Market Fund had net assets totaling $196,099
(in thousands).

As a shareholder of the Fund, for every $100 you had invested on September 30, 2008,
your Fund owned:

Corporate Obligations - Commercial Paper	$	46.34
Repurchase Agreements	$	26.31
United States Government and Government       Agency Obligations	$	18.48
Corporate Obligations - Notes	$	3.79
Municipal Obligations - Taxable	$	2.55
Corporate Obligations - Commercial Paper (backed by       irrevocable bank letter of credit)	$	2.08
Corporate Obligations - Notes (backed by irrevocable       bank letter of credit) and Cash and Cash Equivalents	$	0.45

Please remember that an investment in the Fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. However, shares of the Fund held at the close of business on September 19, 2008 are covered by the U.S. Department of the Treasury's Temporary Guarantee Program for Money Market Funds (the Program), subject to certain conditions and limitations. If not extended, the Program will expire on December 18, 2008. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

The Investments of Ivy Money Market Fund
September 30, 2008
(In Thousands)                                                                                                                       (Unaudited)
CORPORATE OBLIGATIONS	Principal		Value
Commercial Paper
3M Company,
5.827%, 12-12-08	$	2,425	$	2,439
AT&T Inc.:
2.220%, 10-20-08		1,200		1,199
2.250%, 10-21-08		1,080		1,079
2.140%, 10-21-08		1,250	��	1,248
Avon Capital Corp. (Avon Products, Inc.),
2.200%, 10-3-08		1,500		1,500
BellSouth Corporation (AT&T Inc.),
4.973%, 4-26-09 (A)		3,100		3,122
Campbell Soup Co.:
2.220%, 10-3-08		2,650		2,650
2.080%, 10-10-08		5,000		4,997
Coca-Cola Company (The):
2.100%, 10-22-08		4,000		3,995
2.200%, 10-30-08		2,000		1,996
2.300%, 11-14-08		1,500		1,496
Deere (John) Capital Corporation,
2.750%, 10-14-08		2,000		1,998
Deere (John) Credit Limited (Deere (John) Capital Corporation),
2.700%, 10-15-08		3,000		2,997
Hershey Company (The):
2.160%, 10-22-08		1,400		1,398
2.170%, 11-10-08		2,600		2,594
2.150%, 11-18-08		1,300		1,296
Honeywell International Inc.,
2.080%, 11-10-08		2,000		1,995
IBM International Group Capital LLC,
3.031%, 11-26-08 (A)		1,500		1,500
IBM International Group Capital LLC (International Business       Machines Corporation),
2.280%, 10-2-08		2,000		2,000
Illinois Tool Works Inc.:
2.090%, 10-16-08		3,500		3,497
2.270%, 10-20-08		2,000		1,998
Johnson & Johnson,
2.030%, 11-4-08		2,500		2,495
Kimberly-Clark Corporation,
4.420%, 12-19-08		1,500		1,500
McCormick & Co. Inc.,
2.630%, 11-25-08		1,800		1,793
McDonald's Corporation:
2.160%, 10-9-08		2,759		2,758
2.150%, 10-10-08		4,000		3,998
Merck & Co., Inc.:
2.200%, 10-6-08		2,500		2,499
2.150%, 10-16-08		2,500		2,498
Nestle Capital Corp.,
2.390%, 3-12-09		2,000		1,978
Procter & Gamble Company (The):
2.879%, 11-19-08 (A)		800		800
3.500%, 12-15-08		200		200
Procter & Gamble International Funding S.C.A.       (Procter & Gamble Company (The)):
2.250%, 10-9-08		2,100		2,099
2.280%, 10-24-08		2,500		2,496
Proctor & Gamble International Funding,
2.120%, 12-5-08		3,000		2,988
Shell International Finance B.V. and Royal Dutch Shell plc       (Royal Dutch Shell plc),
2.200%, 10-7-08		1,000		1,000
Toyota Motor Credit Corporation:
4.800%, 10-6-08		750		750
2.470%, 11-10-08		2,500		2,493
Unilever Capital Corporation:
2.487%, 10-14-08 (A)		350		350
2.700%, 11-20-08		1,050		1,046
Verizon Communications Inc.:
4.800%, 10-14-08		3,100		3,095
2.640%, 10-21-08		3,500		3,495
2.630%, 11-4-08		1,000		997
Wal-Mart Stores, Inc.,
5.748%, 6-1-09		2,500		2,550
Total Commercial Paper - 46.34%				90,872
Commercial Paper (backed by irrevocable       bank letter of credit)
River Fuel Funding Company #3, Inc. (Bank of New York (The)):
2.670%, 10-31-08		750		748
2.660%, 10-31-08		1,342		1,339
River Fuel Trust #1 (Bank of New York (The)),
2.700%, 10-31-08		2,000		1,995
Total Commercial Paper (backed by irrevocable       bank letter of credit) - 2.08%				4,082
Notes
BP Capital Markets p.l.c.,
2.918%, 12-11-08 (A)		1,500		1,500
Deere (John) Capital Corporation:
3.750%, 1-13-09		650		652
4.625%, 4-15-09		700		706
General Electric Capital Corporation:
2.507%, 10-9-08 (A)		1,300		1,300
4.000%, 2-17-09		500		502
International Business Machines Corporation:
2.476%, 10-3-08 (A)		750		750
2.517%, 10-8-08 (A)		1,000		1,000
Target Corporation,
5.400%, 10-1-08		1,024		1,024
Total Notes - 3.79%				7,434
Notes (backed by irrevocable bank letter of credit)
ETC Holdings, LLC, Taxable Variable Rate Demand Bonds,       Series 2003 (U.S. Bank National Association),
6.250%, 10-1-08 (A)		20		20
Total Notes (backed by irrevocable bank       letter of credit) - 0.01%				20
TOTAL CORPORATE OBLIGATIONS - 52.22%			$	102,408
(Cost: $102,408)

MUNICIPAL OBLIGATIONS - TAXABLE
California
California Pollution Control Financing Authority, Environmental       Improvement Revenue Bonds (Atlantic Richfield Company       Project), Series 1997, (BP p.l.c.),
2.650%, 10-9-08	5,000		5,000
TOTAL MUNICIPAL OBLIGATIONS - TAXABLE - 2.55%		$	5,000
(Cost: $5,000)
UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS
United States Government Agency Obligations
Overseas Private Investment Corporation,
2.450%, 11-17-08 (A)	1,709		1,709
Totem Ocean Trailer Express, Inc. (United States Government       Guaranteed Ship Financing Obligations),
3.069%, 10-15-08 (A)	2,500		2,500
Total United States Government Agency Obligations - 2.15%			4,209
United States Government Obligations
United States Treasury Bills:
1.880%, 10-2-08	1,500		1,500
0.350%, 10-23-08	10,000		9,998
0.990%, 10-30-08	5,000		4,996
0.100%, 11-6-08	1,000		1,000
1.880%, 11-28-08	5,500		5,483
1.600%, 1-8-09	2,500		2,489
1.550%, 1-8-09	2,500		2,489
1.920%, 2-5-09	2,100		2,086
1.900%, 2-26-09	2,000		1,985
Total United States Government Obligations - 16.33%			32,026
TOTAL UNITED STATES GOVERNMENT AND       GOVERNMENT AGENCY OBLIGATIONS - 18.48%		$	36,235
(Cost: $36,235)

REPURCHASE AGREEMENTS
Repurchase Agreements
J.P. Morgan Securities, Inc., Repurchase Agreement       dated 9-30-08 to be repurchased at $51,600,
0.050%, 10-1-08 (B)	51,600		51,600
TOTAL REPURCHASE AGREEMENTS - 26.31%		$	51,600
(Cost: $51,600)
TOTAL INVESTMENT SECURITIES - 99.56%		$	195,243
(Cost: $195,243)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.44%			856
NET ASSETS - 100.00%		$	196,099

Notes to Schedule of Investments

(A)Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2008.

(B)Collateralized by $46,286 United States Treasury Bond, 5.250% due 11-15-28; market value and accrued interest aggregate $52,280.

See Accompanying Notes to Financial Statements.

Statement of Assets and Liabilities
     IVY MONEY MARKET FUND
     September 30, 2008
     (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value:
Securities (cost - $143,643)	$	143,643
Repurchase agreements (cost - $51,600)		51,600
		195,243
Receivables:
Fund shares sold		3,085
Interest		429
Prepaid and other assets		49
Total assets		198,806
LIABILITIES
Payable to Fund shareholders		1,627
Due to custodian		1,017
Accrued shareholder servicing		27
Dividends payable		7
Accrued accounting services fee		6
Accrued distribution and service fees		2
Accrued management fee		2
Other		19
Total liabilities		2,707
Total net assets	$	196,099
NET ASSETS
$0.01 par value capital stock:
Capital stock	$	1,961
Additional paid-in capital		194,133
Accumulated undistributed income:
Accumulated undistributed net investment income		––
Accumulated undistributed net realized gain on                 investment transactions		5
Net assets applicable to outstanding units of capital	$	196,099
Net asset value per share (net assets divided by shares outstanding):
Class A	$1.00
Class B	$1.00
Class C	$1.00
Class E	$1.00
Capital shares outstanding:
Class A		125,433
Class B		14,711
Class C		53,251
Class E		2,700
Capital shares authorized		420,000

See Accompanying Notes to Financial Statements.

Statement of Operations
     IVY MONEY MARKET FUND
     For the Six Months Ended September 30, 2008
     (In Thousands)                                                                                                            (Unaudited)

INVESTMENT INCOME
Income:
Interest and amortization	$	1,662
Expenses:
Investment management fee		251
Distribution and service fees:
Class B		34
Class C		116
Shareholder servicing:
Class A		108
Class B		5
Class C		11
Class E		2
Accounting services fee		33
Audit fees		10
Custodian fees		5
Legal fees		1
Other		67
Total		643
Less expenses in excess of limit		(––	)*
Total expenses		643
Net investment income		1,019
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Realized net gain on investments		6
Net increase in net assets resulting from operations	$	1,025

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

Statement of Changes in Net Assets
     IVY MONEY MARKET FUND
     (In Thousands)                                                                                                                (Unaudited)
     

	For the six months ended September 30,				For the fiscal year ended March 31,
	2008				2008
INCREASE IN NET ASSETS
Operations:
Net investment income		$	1,019		$	3,326
Realized net gain (loss) on investments			6			(1	)
Net increase in net assets resulting                       from operations			1,025			3,325
Distributions to shareholders from:(1)
Net investment income:
Class A			(867	)		(2,890	)
Class B			(31	)		(122	)
Class C			(108	)		(295	)
Class E			(13	)		(19	)
Realized gains on investment transactions:
Class A			(––	)		(––	)
Class B			(––	)		(––	)
Class C			(––	)		(––	)
Class E			(––	)		(––	)
			(1,019	)		(3,326	)
Capital share transactions			79,106			48,438
Total increase			79,112			48,437
NET ASSETS
Beginning of period			116,987			68,550
End of period		$	196,099		$	116,987
Accumulated undistributed net investment income		$	––		$	––

(1)See "Financial Highlights" on pages 194 - 197.

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY MONEY MARKET FUND
     Class A Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income (loss) from       investment operations:
Net investment income			0.0094(1)			0.0408(1)			0.0435			0.0288			0.0083			0.0061
Net realized and             unrealized gain (loss)             on investments			0.0000(1)		(	0.0000)(1)			0.0000			0.0000			0.0000			0.0000
Total from investment       operations			0.0094			0.0408			0.0435			0.0288			0.0083			0.0061
Less distributions from:
Net investment income		(	0.0094)		(	0.0408)		(	0.0435)		(	0.0288)		(	0.0083)		(	0.0061)
Capital gains		(	0.0000)		(	0.0000)		(	0.0000)		(	0.0000)		(	0.0000)		(	0.0000)
Total distributions		(	0.0094)		(	0.0408)		(	0.0435)		(	0.0288)		(	0.0083)		(	0.0061)
Net asset value, end of period		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return			0.96	%		4.19	%		4.44	%		2.87	%		0.82	%		0.62	%
Net assets, end of period       (in millions)		$125			$91			$59			$44			$39			$45
Ratio of expenses to average       net assets including       expense waiver			0.82	%(2)		0.88	%		0.88	%(3)		0.91	%(3)		0.89	%(3)		0.67	%(3)
Ratio of net investment       income to average net       assets including       expense wavier			1.85	%(2)		4.02	%		4.38	%(3)		2.87	%(3)		0.81	%(3)		0.48	%(3)
Ratio of expenses to average       net assets excluding       expense waiver			0.82	%(2)(4)		0.88	%(4)		0.98	%(3)		1.06	%(3)		1.20	%(3)		0.87	%(3)
Ratio of net investment       income to average net       assets excluding       expense wavier			1.85	%(2)(4)		4.02	%(4)		4.28	%(3)		2.72	%(3)		0.50	%(3)		0.28	%(3)

(1)Based on average weekly shares outstanding.

(2)Annualized.

(3)Waiver of expenses to maintain yield of 0.01%.

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY MONEY MARKET FUND
     Class B Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income (loss) from       investment operations:
Net investment income			0.0048(1)			0.0316(1)			0.0338			0.0184			0.0014			0.0002
Net realized and             unrealized gain (loss)             on investments			0.0000(1)		(	0.0000)(1)			0.0000			0.0000			0.0000			0.0000
Total from investment       operations			0.0048			0.0316			0.0338			0.0184			0.0014			0.0002
Less distributions from:
Net investment income		(	0.0048)		(	0.0316)		(	0.0338)		(	0.0184)		(	0.0014)		(	0.0002)
Capital gains		(	0.0000)		(	0.0000)		(	0.0000)		(	0.0000)		(	0.0000)		(	0.0000)
Total distributions		(	0.0048)		(	0.0316)		(	0.0338)		(	0.0184)		(	0.0014)		(	0.0002)
Net asset value, end of period		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return			0.50	%		3.25	%		3.44	%		1.82	%		0.14	%		0.02	%
Net assets, end of period       (in millions)		$15			$7			$4			$2			$1			$1
Ratio of expenses to average       net assets including       expense waiver			1.72	%(2)		1.80	%		1.86	%		1.95	%		1.57	%(3)		1.14	%(3)
Ratio of net investment       income to average net       assets including       expense waiver			0.91	%(2)		3.01	%		3.43	%		1.86	%		0.12	%(3)		0.02	%(3)
Ratio of expenses to average       net assets excluding       expense waiver			1.72	%(2)(4)		1.80	%(5)		1.86	%(5)		1.95	%(5)		1.95	%(3)		1.34	%(3)
Ratio of net investment       income (loss) to average       net assets excluding       expense waiver			0.91	%(2)(4)		3.01	%(5)		3.43	%(5)		1.86	%(5)	- -0.26		%(3)	- -0.18		%(3)

(1)Based on average weekly shares outstanding.

(2)Annualized.

(3)Waiver of expenses to maintain yield of 0.01%.

(4)Waiver provides no impact to the ratios due to rounding.

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY MONEY MARKET FUND
     Class C Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                                 (Unaudited)

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income (loss) from       investment operations:
Net investment income			0.0051(1)			0.0323(1)			0.0340			0.0185			0.0013			0.0002
Net realized and             unrealized gain (loss)             on investments			0.0000(1)		(	0.0000)(1)			0.0000			0.0000			0.0000			0.0000
Total from investment       operations			0.0051			0.0323			0.0340			0.0185			0.0013			0.0002
Less distributions from:
Net investment income		(	0.0051)		(	0.0323)		(	0.0340)		(	0.0185)		(	0.0013)		(	0.0002)
Capital gains		(	0.0000)		(	0.0000)		(	0.0000)		(	0.0000)		(	0.0000)		(	0.0000)
Total distributions		(	0.0051)		(	0.0323)		(	0.0340)		(	0.0185)		(	0.0013)		(	0.0002)
Net asset value,       end of period		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return			0.53	%		3.31	%		3.45	%		1.83	%		0.12	%		0.02	%
Net assets, end of period       (in millions)		$53			$18			$6			$3			$5			$6
Ratio of expenses to average       net assets including       expense waiver			1.66	%(2)		1.73	%		1.84	%		1.94	%		1.58	%(3)		1.16	%(3)
Ratio of net investment       income to average net       assets including       expense waiver			0.93	%(2)		3.03	%		3.45	%		1.75	%		0.12	%(3)		0.03	%(3)
Ratio of expenses to       average net assets       excluding expense waiver			1.66	%(2)(4)		1.73	%(5)		1.84	%(5)		1.94	%(5)		1.99	%(3)		1.35	%(3)
Ratio of net investment       income (loss) to average       net assets excluding       expense waiver			0.93	%(2)(4)		3.03	%(5)		3.45	%(5)		1.75	%(5)	- -0.29		%(3)	- -0.17		%(3)

(1)Based on average weekly shares outstanding.

(2)Annualized.

(3)Waiver of expenses to maintain yield of 0.01%.

(4)Waiver provides no impact to the ratios due to rounding.

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

See Accompanying Notes to Financial Statements.

Financial Highlights
     IVY MONEY MARKET FUND
     Class E Shares
     For a Share of Capital Stock Outstanding Throughout Each Period:                        (Unaudited)

	For the six months ended				For the period from 4-2-07(1) through
	9-30-08				3-31-08
Net asset value, beginning of period		$	1.00		$	1.00
Income (loss) from investment operations:
Net investment income			0.0088(2)			0.0401(2)
Net realized and unrealized gain (loss)             on investments			0.0000(2)		(	0.0000)(2)
Total from investment operations			0.0088			0.0401
Less distributions from:
Net investment income		(	0.0088)		(	0.0401)
Capital gains		(	0.0000)		(	0.0000)
Total distributions		(	0.0088)		(	0.0401)
Net asset value, end of period		$	1.00		$	1.00
Total return			0.91	%		4.07	%
Net assets, end of period (in millions)			$3			$1
Ratio of expenses to average net assets			0.90	%(3)		0.93	%(3)
Ratio of net investment income to average net assets			1.70	%(3)		3.77	%(3)

(1)Commencement of operations of the class.

(2)Based on average weekly shares outstanding.

(3)Annualized.

See Accompanying Notes to Financial Statements.

SHAREHOLDER SUMMARY OF IVY MUNICIPAL BOND FUND

Portfolio Highlights

On September 30, 2008, Ivy Municipal Bond Fund had net assets totaling $40,849 (in thousands) invested in a diversified portfolio.

Sector Weightings

As a shareholder of the Fund, for every $100 you had invested on September 30, 2008,
your Fund owned:

Prerefunded Escrowed-to-Maturity Bonds	$	10.65
Transportation Revenue Bonds	$	9.70
Cash and Cash Equivalents	$	9.40
Hospital Revenue Bonds	$	8.95
Education Revenue Bonds	$	7.67
City General Obligation Bonds	$	6.71
Other Municipal Bonds(1)	$	6.64
Utility Revenue Bonds	$	6.64
Special Tax Revenue Bonds	$	6.08
Miscellaneous Municipal Bonds	$	5.44
Housing Revenue Bonds	$	5.39
Industrial Development/Pollution Control Revenue Bonds	$	3.88
State General Obligation Bonds	$	3.68
Public Power Revenue Bonds	$	3.60
Life Care/Nursing Centers Revenue Bonds	$	3.11
School General Obligation Bonds	$	2.46

(1)Includes $2.25 County General Obligation Bonds, $1.55 Lease/Certificates of Participation Revenue Bonds, $0.79 Resource Recovery Bonds and $2.05 Sales Revenue Bonds.

Quality Weightings

On September 30, 2008, the breakdown of municipal bonds (by ratings) held by the Fund, including cash and cash equivalents, was as follows:

Investment Grade
AAA	40.88	%
AA	11.38	%
A	11.61	%
BBB	18.44	%
Non-Investment Grade
BB	6.72	%
B	1.57	%
Cash and Cash Equivalents	9.40	%

Ratings reflected in the wheel are taken from the following sources in order of preference: Standard & Poor's, Moody's or management's internal ratings, where no other ratings are available.

The Investments of Ivy Municipal Bond Fund
September 30, 2008
(In Thousands)                                                                                                                       (Unaudited)
MUNICIPAL BONDS		Principal		Value
Arizona - 0.82%
Arizona Health Facilities Authority, Hospital Revenue Bonds       (Phoenix Children's Hospital), Series 2007C,
8.960%, 2-1-42 (A)		$ 125		$	113
City of Bullhead City, Arizona, Bullhead Parkway       Improvement District, Improvement Bonds,
6.100%, 1-1-13			220		220
					333
California - 7.91%
State of California, Various Purpose General Obligation Bonds,
5.000%, 2-1-22			495		481
Trustees of the California State University Systemwide Revenue       Bonds, Series 2002A,
5.500%, 11-1-15			250		267
California Statewide Communities Development Authority,       Insured Revenue Bonds (Henry Mayo Newhall Memorial       Hospital), Series 2007A,
5.000%, 10-1-37			500		424
Golden State Tobacco Securitization Corporation, Tobacco       Settlement Asset-Backed Bonds, Series 2003A-1,
6.750%, 6-1-39			200		224
Golden State Tobacco Securitization Corporation, Enhanced       Tobacco Settlement Asset-Backed Bonds, Series 2003B,
5.000%, 6-1-43		1,000			1,044
Riverside Community College District, Riverside County, California,       Election of 2004, General Obligation Bonds, Series 2004A,
5.500%, 8-1-29			200		222
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		530
Upland Unified School District (San Bernardino County, California),       Election of 2008 General Obligation Bonds, Series A,
0.000%, 8-1-31			150		38
					3,230
Colorado - 2.28%
Certificates of Participation, Series 2008, Adams 12 Five Star       Schools, Adams County and City and County of Broomfield,       Colorado,
5.000%, 12-1-25		500			458
Lincoln Park Metropolitan District, Douglas County, Colorado,       General Obligation Refunding and Improvement Bonds,       Series 2008,
6.125%, 12-1-30		500			476
					934
District Of Columbia - 2.50%
District of Columbia (Washington, D.C.), General Obligation       Refunding Bonds, Series 2008F,
5.000%, 6-1-19		1,000			1,023
Florida - 1.81%
City of Jacksonville, Florida, Better Jacksonville Sales Tax       Revenue Bonds, Series 2003,
5.250%, 10-1-19			250		253
Miami-Dade County, Florida, Water and Sewer System Revenue       Refunding Bonds, Series 2008B,
5.250%, 10-1-22			500		488
					741
Illinois - 3.14%
City of Belleville, Illinois, Tax Increment Refunding Revenue       Bonds (Frank Scott Parkway Redevelopment Project),       Series 2007A:
5.000%, 5-1-26			250		200
5.700%, 5-1-36			250		201
City of Chicago, General Obligation Bonds, Project and Refunding,       Series 2004A,
5.250%, 1-1-21			250		254
Bloomington-Normal Airport Authority of McLean County,       Illinois, Central Illinois Regional Airport, Passenger       Facility Charge Revenue Bonds, Series 2001,
6.050%, 12-15-19			645		629
					1,284
Indiana - 6.91%
Ball State University Board of Trustees, Ball State University       Student Fee Bonds, Series K,
5.750%, 7-1-18		500			540
Dyer (Indiana) Redevelopment Authority, Economic Development       Lease Rental Bonds, Series 1999,
6.500%, 1-15-24			300		312
East Chicago Elementary School Building Corporation (Lake       County, Indiana), First Mortgage Bonds, Series 1993A,
5.500%, 1-15-16		280			281
City of Hammond (Indiana), Redevelopment District Revenue       Bonds, Series 2008 (Marina Area Project),
6.000%, 1-15-17			500		471
Mt. Vernon School Building Corporation of Hancock County,       Hancock County, Indiana, First Mortgage Bonds, Series 2007,
5.250%, 1-15-32			500		485
New Albany-Floyd County School Building Corporation, First       Mortgage Bonds, Series 2002 (Floyd County, Indiana),
5.750%, 7-15-17			675		735
					2,824
Iowa - 2.24%
City of Altoona, Iowa, Annual Appropriation Urban Renewal       Tax Increment Revenue Bonds, Series 2008,
6.000%, 6-1-34		1,000			914
Kansas - 0.78%
Sedgwick County, Kansas and Shawnee County, Kansas, Single       Family Mortgage Revenue Bonds (Mortgage-Backed Securities       Program), 2001 Series A-1,
6.300%, 12-1-32 (A)			135		135
Sedgwick County, Kansas and Shawnee County, Kansas, Single       Family Mortgage Revenue Bonds (Mortgage-Backed Securities       Program), 2003 Series A-2,
5.650%, 6-1-35 (A)			185		185
					320
Kentucky - 1.93%
The Turnpike Authority of Kentucky, Economic Development Road       Revenue Bonds (Revitalization Projects), 2008 Series A,
5.000%, 7-1-16			330		348
Louisville Regional Airport Authority, Airport System Revenue       Bonds, 2008 Series A,
5.250%, 7-1-28			500		439
					787
Louisiana - 1.86%
Louisiana Local Government Environmental Facilities and       Community Development Authority, Mortgage Revenue       Bonds, Series 2004A (GNMA Collateralized - Cypress       Apartments Project),
5.500%, 4-20-38		250			232
State of Louisiana, Gasoline and Fuels Tax Revenue Bonds,       2002 Series A,
5.250%, 6-1-13			500		527
					759
Maryland - 1.22%
Maryland Transportation Authority, Airport Parking Revenue       Bonds, Series 2002B, Baltimore/Washington International       Airport Projects (Qualified Airport Bonds),
5.375%, 3-1-15			500		500
Massachusetts - 1.90%
Massachusetts Bay Transportation Authority, Assessment Bonds,       2004 Series A,
5.250%, 7-1-20			200		218
Massachusetts Educational Financing Authority, Education Loan       Revenue Bonds, Issue H, Series 2008,
6.125%, 1-1-22			395		370
Massachusetts Development Finance Agency, Revenue Bonds       (Linden Ponds, Inc. Facility), Series 2007 A,
5.750%, 11-15-42			250		190
					778
Michigan - 2.54%
City of Detroit, Michigan, General Obligation Bonds       (Unlimited Tax), Series 2004-A(1),
5.250%, 4-1-23		200			177
Garden City Hospital Finance Authority, Hospital Revenue       and Refunding Bonds (Garden City Hospital Obligated Group),       Series 1998A,
5.625%, 9-1-10			5		5
City of Kalamazoo, Hospital Finance Authority, Hospital Revenue       Refunding Bonds, (Bronson Methodist Hospital), Series 2003A,
5.000%, 5-15-26			500		445
State Building Authority, State of Michigan, 2006 Revenue       Refunding Bonds, Series IA (Facilities Program),
0.000%, 10-15-22		1,000			411
					1,038
Minnesota - 2.11%
City of Perham, Minnesota, General Obligation Disposal System       Revenue Bonds, Series 2001,
6.000%, 5-1-22			500		489
City of Victoria, Minnesota, Private School Facility Revenue Bonds       (Holy Family Catholic High School Project), Series 1999A,
5.600%, 9-1-19			400		376
					865
Missouri - 6.87%
City of Belton, Missouri, Tax Increment Revenue Bonds       (Belton Town Centre Project), Series 2004,
6.250%, 3-1-24			200		180
Broadway-Fairview Transportation Development District       (Columbia, Missouri), Transportation Sales Tax Revenue       Bonds, Series 2006A,
6.125%, 12-1-36			175		143
Grindstone Plaza Transportation Development District (Columbia,       Missouri), Transportation Sales Tax Revenue Bonds,       Series 2006A,
5.550%, 10-1-36			250		206
The Industrial Development Authority of the City of Kansas City,       Missouri, Revenue Bonds, Series 2004 (Plaza Library Project),
5.900%, 3-1-24			200		181
City of Kearney, Missouri, General Obligation Bonds, Series 2001,
5.500%, 3-1-16			350		369
Health and Educational Facilities Authority of the State of Missouri,       Health Facilities Revenue Bonds (SSM Health Care),       Series 2008A,
5.000%, 6-1-36			500		430
Missouri Development Finance Board, Infrastructure Facilities       Revenue Bonds (City of Branson, Missouri), (Branson Landing       Project), Series 2004A,
5.250%, 12-1-19			65		61
Missouri Housing Development Commission, Single Family       Mortgage Revenue Bonds (Homeownership Loan Program),       2005 Series D,
6.000%, 3-1-36			160		161
The Industrial Development Authority of the County of Platte       County, Missouri, Transportation Revenue Bonds (Zona Rosa       Phase II Retail Project), Series 2007,
6.850%, 4-1-29			250		234
Platte County R-III School District Building Corporation,       Leasehold Refunding and Improvement Revenue Bonds,       Series 2008 (Platte County R-III School District of Platte County,       Missouri Project),		340
5.000%, 3-1-28					311
The Industrial Development Authority of St. Joseph, Missouri,       Special Obligation Revenue Bonds (City of St. Joseph, Missouri -       Sewerage System Improvements Project), Series 2007,
4.375%, 4-1-18			100		96
The Industrial Development Authority of the County of St. Louis,       Missouri, Senior Living Facilities Revenue Bonds (Friendship       Village of West County), Series 2007A,
5.500%, 9-1-28			500		436
					2,808
Nebraska - 3.15%
Nebraska Higher Education Loan Program, Inc., Senior       Subordinate Bonds, 1993-2, Series A-5A,
6.200%, 6-1-13		250			250
Nebraska Public Power District, General Revenue Bonds,       2008 Series B,
5.000%, 1-1-15		1,000			1,037
					1,287
New Hampshire - 1.13%
New Hampshire Housing Finance Authority, Single Family       Mortgage Acquisition Revenue Bonds, 2008 Series,
6.000%, 7-1-38			500		463
New Jersey - 1.84%
New Jersey Economic Development Authority, School Facilities       Construction Bonds, 2005 Series O,
5.125%, 3-1-30			250		233
New Jersey Transportation Trust Fund Authority, Transportation       System Bonds, 2003 Series B-2,
5.000%, 12-15-16			500		520
					753
New Mexico - 1.39%
New Mexico Mortgage Finance Authority, Single Family Mortgage       Program Class I Bonds, 2006 Series D,
6.000%, 1-1-37			95		96
New Mexico Mortgage Finance Authority, Single Family Mortgage       Program Class I Bonds 2008 Series D-2,
5.250%, 7-1-30 (B)			500		471
					567
New York - 5.15%
The City of New York, General Obligation Bonds, Fiscal 2003       Series A Current Interest Bonds,
5.500%, 8-1-10			500		521
Dormitory Authority of the State of New York, Third General       Resolution Revenue Bonds (State University Educational       Facilities Issue), Series 2002B,
5.250%, 11-15-23 (A)			250		261
New York State Thruway Authority, State Personal Income       Tax Revenue Bonds (Transportation), Series 2002A,
5.250%, 3-15-10			500		517
The Port Authority of New York and New Jersey, Consolidated       Bonds, One Hundred Twenty-Seventh Series,
5.500%, 12-15-14			500		519
Suffolk County Industrial Development Agency (New York),       Civic Facility Revenue Bonds, Series 1999A (The Southampton       Hospital Association Civic Facility),
7.250%, 1-1-20			115		111
Suffolk County Industrial Development Agency (New York),       Civic Facility Revenue Bonds, Series 1999B (The Southampton       Hospital Association Civic Facility),
7.625%, 1-1-30			180		171
					2,100
Ohio - 2.38%
Buckeye Tobacco Settlement Financing Authority, Tobacco       Settlement Asset-Backed Bonds, Series 2007A-2,
6.000%, 6-1-42			500		388
Hamilton County, Ohio, Sewer System Improvement Revenue       Bonds, 2005 Series B (The Metropolitan Sewer District of       Greater Cincinnati),
5.000%, 12-1-30			150		141
Toledo-Lucas County Port Authority, Development Revenue       Bonds (Northwest Ohio Bond Fund), Series 2007C (Midwest       Terminals Project),
6.000%, 11-15-27			500		442
					971
Oklahoma - 4.32%
Grand River Dam Authority, Revenue Bonds, Series 2008A,
5.000%, 6-1-18			905		943
Trustees of the Tulsa Municipal Airport Trust, Revenue Bonds,       Refunding Series 2001B,
5.650%, 12-1-35 (A)			500		498
Tulsa Public Facilities Authority (Oklahoma), Assembly Center       Lease Payment Revenue Bonds, Refunding Series 1985,
6.600%, 7-1-14			295		320
					1,761
Pennsylvania - 3.13%
City of Philadelphia, Pennsylvania, General Obligation Refunding       Bonds, Series 2008A,
5.250%, 12-15-24			445		414
The School District of Philadelphia, Pennsylvania, General       Obligation Bonds, Series A of 2002, Prerefunded 2-1-12,
5.500%, 2-1-18			500		538
Schuylkill County Industrial Development Authority, Variable       Rate Demand Revenue Bonds (Pine Grove Landfill, Inc.       Project), 1995 Series,
5.100%, 10-1-19 (A)			320		321
					1,273
Puerto Rico - 1.67%
Puerto Rico Aqueduct and Sewer Authority, Revenue Bonds,       Series A (Senior Lien),
6.000%, 7-1-38			500		483
Government Development Bank for Puerto Rico, Senior Notes,       2006 Series B,
5.000%, 12-1-08			200		200
					683
Rhode Island - 0.76%
Rhode Island Health and Educational Building Corporation,       Hospital Financing Revenue Bonds, St. Joseph Health Services       of Rhode Island Issue, Series 1999,
5.400%, 10-1-09			310		310
South Carolina - 1.17%
Tobacco Settlement Revenue Management Authority, 5% Tobacco       Settlement Asset-Backed Refunding Bonds, Series 2008,
5.000%, 6-1-18			500		476
Tennessee - 1.85%
The Health, Educational and Housing Facility Board of the County       of Shelby, Tennessee, Revenue Bonds, Series 2008C,       (Methodist Le Bonheur Healthcare),
5.250%, 6-1-18		500			496
The Health, Educational and Housing Facilities Board of the County       of Sullivan, Tennessee, Hospital Revenue Bonds (Wellmont       Health System Project), Series 2006C,
5.250%, 9-1-26			300		262
					758
Texas - 9.50%
Harris County Cultural Education Facilities Finance Corporation,       Medical Facilities Revenue Refunding Bonds (Baylor College       of Medicine), Series 2008D,
5.000%, 11-15-16			200		199
Hopkins County Hospital District (A political subdivision of the       State of Texas located in Hopkins County), Hospital Revenue       Bonds, Series 2008,
6.000%, 2-15-33			500		452
Howard County, Texas, General Obligation Bonds, Series 2008,
4.650%, 2-15-24			505		432
North Central Texas Health Facilities Development Corporation,       Retirement Facility Revenue Bonds (Northwest Senior Housing       Corporation - Edgemere Project), Series 1999A,
7.250%, 11-15-19			235		251
North Texas Tollway Authority, System Revenue Refunding Bonds,       Series 2008, First Tier Current Interest Bonds, Series 2008A,
6.000%, 1-1-25			500		492
North Texas Tollway Authority, System Revenue Refunding Bonds,       Series 2008D,
0.000%, 1-1-30		1,000			255
Pflugerville Independent School District (Travis County, Texas),       Unlimited Tax School Building Bonds, Series 2001,
5.500%, 8-15-19			250		267
Prosper Independent School District (Collin and Denton Counties,       Texas), Unlimited Tax School Building and Refunding Bonds,       Series 2008,
5.000%, 2-15-18			500		519
Tarrant County Cultural Education Facilities Finance       Corporation, Retirement Facility Revenue Bonds       (Northwest Senior Housing Corporation - Edgemere Project),       Series 2006A,		500
6.000%, 11-15-36					436
Tarrant County Cultural Education Facilities Finance Corporation,       Retirement Facility Revenue Bonds (Buckingham Senior Living       Community, Inc. Project), Series 2007,
5.625%, 11-15-27	4,250				209
Board of Regents, Texas State University System, Revenue       Financing System Revenue Bonds, Series 2008,
5.250%, 3-15-19			355		367
					3,879
Vermont - 0.48%
Vermont Housing Finance Agency, Single Family Housing Bonds,       Series 27,
5.500%, 11-1-37 (A)			195		194
Virginia - 1.70%
City of Chesapeake, Virginia, General Obligation Public       Improvement and Refunding Bonds, Series of 2001,
5.500%, 12-1-17			500		528
Tobacco Settlement Financing Corporation, Tobacco Settlement       Asset-Backed Bonds, Series 2007B-1 Senior Current Interest       Bonds,
5.000%, 6-1-47			250		169
					697
Washington - 2.37%
Energy Northwest, Project No. 1 Refunding Electric Revenue       Bonds, Series 2002-A,
5.750%, 7-1-16			500		530
Washington Health Care Facilities Authority, Revenue Bonds,       Series 2007C (Virginia Mason Medical Center),
5.500%, 8-15-36			500		437
					967
Wyoming - 1.79%
Housing Authority of the City of Cheyenne, Housing Revenue       Bonds (Foxcrest II Project), Series 2004,
5.750%, 6-1-34		300			266
Wyoming Municipal Power Agency, Power Supply System       Revenue Bonds, 2008 Series A,
5.250%, 1-1-23			500		467
					733
TOTAL MUNICIPAL BONDS - 90.60%				$	37,010
(Cost: $39,019)
SHORT-TERM SECURITIES
Commercial Paper
Air Products and Chemicals, Inc.,
1.500%, 10-1-08		1,821			1,821
Automatic Data Processing Inc.,
2.000%, 10-1-08		2,000			2,000
TOTAL SHORT-TERM SECURITIES - 9.36%				$	3,821
(Cost: $3,821)
TOTAL INVESTMENT SECURITIES - 99.96%				$	40,831
(Cost: $42,840)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.04%					18
NET ASSETS - 100.00%				$	40,849

Notes to Schedule of Investments

(A)Variable rate security. Interest rate disclosed is that which is in effect at September 30, 2008.

See Accompanying Notes to Financial Statements.

Statement of Assets and Liabilities
     IVY MUNICIPAL BOND FUND
     September 30, 2008
     (In Thousands, Except for Per Share Amounts)                                                          (Unaudited)

ASSETS
Investment securities - at value (cost - $42,840)	$	40,831
Receivables:
Interest		512
Fund shares sold		221
Prepaid and other assets		32
Total assets		41,596
LIABILITIES
Payable for investment securities purchased		500
Payable to Fund shareholders		170
Due to custodian		45
Dividends payable		7
Accrued shareholder servicing		6
Accrued accounting services fee		2
Accrued distribution and service fees		1
Accrued management fee		1
Other		15
Total liabilities		747
Total net assets	$	40,849
NET ASSETS
$0.01 par value capital stock:
Capital stock	$	40
Additional paid-in capital		43,526
Accumulated undistributed income (loss):
Accumulated undistributed net investment income		10
Accumulated net realized loss on investment transactions		(718	)
Net unrealized depreciation in value of investments		(2,009	)
Net assets applicable to outstanding units of capital	$	40,849
Net asset value per share (net assets divided by shares outstanding):
Class A	$10.29
Class B	$10.29
Class C	$10.29
Class Y	$10.30
Capital shares outstanding:
Class A		2,451
Class B		95
Class C		1,422
Class Y		––	*
Capital shares authorized	100,000

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

Statement of Operations
     IVY MUNICIPAL BOND FUND
     For the Six Months Ended September 30, 2008
     (In Thousands)                                                                                                            (Unaudited)

INVESTMENT INCOME
Income:
Interest and amortization	$	911
Expenses:
Distribution and service fees:
Class A		29
Class B		5
Class C		64
Class Y		––	*
Investment management fee		98
Shareholder servicing:
Class A		17
Class B		1
Class C		13
Class Y		––	*
Registration fees		30
Accounting services fee		14
Audit fees		12
Custodian fees		3
Other		13
Total expenses		299
Net investment income		612
REALIZED AND UNREALIZED LOSS
ON INVESTMENTS
Realized net loss on investments		(118	)
Unrealized depreciation in value of investments during the period		(1,882	)
Net loss on investments		(2,000	)
Net decrease in net assets resulting from operations	$	(1,388	)

*Not shown due to rounding.

See Accompanying Notes to Financial Statements.

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

	For the six months ended September 30,				For the fiscal year ended March 31,
	2008				2008
INCREASE IN NET ASSETS
Operations:
Net investment income		$	612		$	878
Realized net loss on investments			(118	)		(52	)
Unrealized depreciation			(1,882	)		(835	)
Net decrease in net assets resulting                       from operations			(1,388	)		(9	)
Distributions to shareholders from:(1)
Net investment income:
Class A			(422	)		(468	)
Class B			(13	)		(29	)
Class C			(179	)		(376	)
Class Y			(––	)*		(1	)
Realized gains on investment transactions:
Class A			(––	)		(––	)
Class B			(––	)		(––	)
Class C			(––	)		(––	)
Class Y			(––	)		(––	)
			(614	)		(874	)
Capital share transactions			9,882			8,819
Total increase			7,880			7,936
NET ASSETS
Beginning of period			32,969			25,033
End of period		$	40,849		$	32,969
Accumulated undistributed net investment income		$	10		$	12

*Not shown due to rounding.

(1)See "Financial Highlights" on pages 214 - 216.

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	10.80		$	11.12		$	11.04		$	11.13		$	11.31		$	11.10
Income (loss) from       investment operations:
Net investment income			0.19	(1)		0.39	(1)		0.41	(1)		0.42			0.38			0.37
Net realized and unrealized             gain (loss) on investments			(0.51	)(1)		(0.32	)(1)		0.08	(1)		(0.09	)		(0.17	)		0.21
Total from investment operations			(0.32	)		0.07			0.49			0.33			0.21			0.58
Less distributions from:
Net investment income			(0.19	)		(0.39	)		(0.41	)		(0.42	)		(0.39	)		(0.37	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.19	)		(0.39	)		(0.41	)		(0.42	)		(0.39	)		(0.37	)
Net asset value, end of period		$	10.29		$	10.80		$	11.12		$	11.04		$	11.13		$	11.31
Total return(2)			- -2.96	%		0.69	%		4.51	%		3.00	%		1.89	%		5.36	%
Net assets, end of period       (in millions)		$25			$20			$9			$6			$5			$4
Ratio of expenses to average       net assets including       expense waiver			1.32	%(3)		1.26	%		1.11	%		0.90	%		1.13	%		1.25	%
Ratio of net investment income       to average net assets       including expense waiver			3.59	%(3)		3.62	%		3.67	%		3.77	%		3.42	%		3.35	%
Ratio of expenses to average       net assets excluding       expense waiver			1.32	%(3)(4)		1.31	%		1.35	%		1.33	%		1.39	%		1.25	%(4)
Ratio of net investment income       to average net assets       excluding expense waiver		��	3.59	%(3)(4)		3.57	%		3.43	%		3.34	%		3.16	%		3.35	%(4)
Portfolio turnover rate			21	%		62	%		26	%		20	%		17	%		11	%

(1)Based on average weekly shares outstanding.

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

(3)Annualized.

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

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	10.80		$	11.12		$	11.04		$	11.13		$	11.31		$	11.10
Income (loss) from       investment operations:
Net investment income			0.15			0.31			0.32			0.34			0.30			0.28
Net realized and unrealized             gain (loss) on investments			(0.51	)		(0.32	)		0.08			(0.09	)		(0.18	)		0.21
Total from investment operations			(0.36	)		(0.01	)		0.40			0.25			0.12			0.49
Less distributions from:
Net investment income			(0.15	)		(0.31	)		(0.32	)		(0.34	)		(0.30	)		(0.28	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.15	)		(0.31	)		(0.32	)		(0.34	)		(0.30	)		(0.28	)
Net asset value, end of period		$	10.29		$	10.80		$	11.12		$	11.04		$	11.13		$	11.31
Total return			- -3.36	%		- -0.13	%		3.70	%		2.20	%		1.09	%		4.50	%
Net assets, end of period       (in millions)		$1			$1			$1			$1			$1			$1
Ratio of expenses to average       net assets including       expense waiver			2.13	%(1)		2.08	%		1.85	%		1.70	%		1.90	%		2.06	%
Ratio of net investment income       to average net assets       including expense waiver			2.77	%(1)		2.81	%		2.92	%		2.96	%		2.65	%		2.54	%
Ratio of expenses to average       net assets excluding       expense waiver			2.13	%(1)(2)		2.13	%		2.09	%		2.13	%		2.16	%		2.06	%(2)
Ratio of net investment income       to average net assets       excluding expense waiver			2.77	%(1)(2)		2.76	%		2.68	%		2.53	%		2.39	%		2.54	%(2)
Portfolio turnover rate			21	%		62	%		26	%		20	%		17	%		11	%

(1)Annualized.

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

See Accompanying Notes to Financial Statements.

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

	For the six months ended				For the fiscal year ended March 31,
	9-30-08				2008			2007			2006			2005			2004
Net asset value,       beginning of period		$	10.80		$	11.12		$	11.04		$	11.13		$	11.31		$	11.10
Income (loss) from       investment operations:
Net investment income			0.15			0.31			0.32			0.34			0.29			0.28
Net realized and unrealized             gain (loss) on investments			(0.51	)		(0.32	)		0.08			(0.09	)		(0.17	)		0.21
Total from investment operations			(0.36	)		(0.01	)		0.40			0.25			0.12			0.49
Less distributions from:
Net investment income			(0.15	)		(0.31	)		(0.32	)		(0.34	)		(0.30	)		(0.28	)
Capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
Total distributions			(0.15	)		(0.31	)		(0.32	)		(0.34	)		(0.30	)		(0.28	)
Net asset value, end of period		$	10.29		$	10.80		$	11.12		$	11.04		$	11.13		$	11.31
Total return			- -3.35	%		- -0.14	%		3.69	%		2.19	%		1.04	%		4.45	%
Net assets, end of period       (in millions)		$15			$12			$15			$16			$18			$20
Ratio of expenses to average       net assets including       expense waiver			2.11	%(1)		2.08	%		1.87	%		1.69	%		1.93	%		2.10	%
Ratio of net investment income       to average net assets       including expense waiver			2.78	%(1)		2.80	%		2.90	%		2.97	%		2.62	%		2.50	%
Ratio of expenses to average       net assets excluding       expense waiver			2.11	%(1)(2)		2.13	%		2.11	%		2.12	%		2.19	%		2.10	%(2)
Ratio of net investment income       to average net assets       excluding expense waiver			2.78	%(1)(2)		2.75	%		2.66	%		2.54	%		2.36	%		2.50	%(2)
Portfolio turnover rate			21	%		62	%		26	%		20	%		17	%		11	%

(1)Annualized.

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

See Accompanying Notes to Financial Statements.

Notes to Financial Statements
     September 30, 2008                                                                                                                   (Unaudited)
      (In Thousands, Except Where Otherwise Noted)


NOTE 1 - Significant Accounting Policies

Ivy Funds, Inc. (the Corporation) is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The Corporation issues 12 series of capital shares; each series represents ownership of a separate mutual fund (Fund). The assets belonging to each Fund are held separately by the custodian. The capital shares of each Fund represent a pro rata 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. Securities for which quotations are not readily available or are deemed not to be reliable because of significant events or ci rcumstances identified between the closing of their principal markets and the closing of the New York Stock Exchange are valued at fair value as determined in good faith under procedures established by and under the general supervision of the Corporation's Board of Directors. Management's valuation committee makes fair value determinations for the Corporation, subject to the supervision of the Board of Directors. Short-term debt securities, purchased with less than 60 days to maturity, are valued at amortized cost, which approximates market value. Short-term debt securities denominated in foreign currencies are valued at amortized cost in that currency, prior to translation.

      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 bo th financial and tax reporting purposes over the remaining lives of the bonds. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the Corporation is informed of the ex-dividend date. Interest income is recorded on the accrual basis. See Note 4 - 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 or for investment purposes.

      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 continue to qualify as a regulated investment company under the Internal Revenue Code. Accordingly, provision has not been made for Federal income taxes. Management of the Corporation periodically reviews all tax positions to assess that it is more likely than not that the position would be sustained upon examination by the relevant tax authority based on the technical merits of each position. As of September 30, 2008, management believes that under this standard no liability for unrecognized tax positions is required. The Corporation is subject to examination by U.S. federal and state authorities for returns filed for years after 2004. See Note 5 - 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 custodian bank.

      H. Concentration of Risk - Asset Strategy Fund may have a significant investment in international securities. International investing involves additional risks, including currency fluctuations, political or economic conditions affecting the foreign country, investment and repatriation restrictions, and limited and less reliable investor information. Energy Fund seeks to achieve its objective by investing, under normal market conditions, at least 80% of its net assets in securities of companies within the energy sector, which includes all aspects of the energy industry, including exploration, discovery, production, distribution or infrastructure of energy and/or alternative energy sources. Investing in companies involved in one specified sector may be more risky than an investment with greater diversification. Science and Technology Fund seeks to achieve its objective by concentrating its investments primarily in equity securities of science or technology companies or companies benefited by the application of scientific or technological discoveries. Investing in companies involved in one specified sector may be more risky than an investment with greater diversification.

      I. New Accounting Pronouncements - In March 2008, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133" (SFAS 161). SFAS 161 amends and expands disclosures about derivative instruments and hedging activities. SFAS 161 requires qualitative disclosures about the objectives and strategies of derivative instruments, quantitative disclosures about the fair value amounts of and gains and losses on derivative instruments, and disclosures of credit-risk-related contingent features in hedging activities. SFAS 161 is effective for fiscal years beginning after November 15, 2008. The Corporation will institute SFAS 161 during the fiscal year ending March 31, 2010 and its potential impact, if any, on its financial statements is currently being assessed by management.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

NOTE 2 - Investment Management and Payments to Affiliated Persons

Ivy Investment Management Company (IICO), a wholly owned subsidiary of Waddell & Reed Financial, Inc. (WDR), serves as the Corporation's investment manager. Prior to March 8, 2005, IICO was known as Waddell & Reed Ivy Investment Company. IICO provides advice and supervises investments, for which services it is paid a fee. 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 Waddell & Reed Ivy Investment Company, an affiliated entity. The fee is payable by each Fund at the following annual rates:

Fund	Net Asset Breakpoints	Annual Rate
Ivy Capital Appreciation 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%
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 up to $5 Billion	.550%
	Over $5 Billion	.525%
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 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 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 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 Energy 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 Science and Technology Fund	Up to $1Billion	.850%
	Over $1 Billion up to $2 Billion	.830%
	Over $2 Billion up to $3 Billion	.800%
	Over $3 Billion	.760%
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 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 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%

The fee is accrued and paid daily. However, IICO has voluntarily agreed to waive a Fund's management fee on any day that the Fund's net assets are less than $25 million, subject to IICO's right to change or modify this waiver.

For the period from October 1, 2007 through September 30, 2008, IICO contractually agreed to reduce the management fee for Ivy Limited-Term Bond Fund to:

Ivy Limited-Term Bond Fund	Up to $500 Million	.350%
	Over $500 Million up to $1 Billion	.300%
	Over $1 Billion up to $1.5 Billion	.250%
	Over $1.5 Billion	.200%

During the six-month period ended September 30, 2008, IICO waived $81 under that agreement.

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 pays WRSCO a monthly fee of one-twelfth of the annual fee shown in the following table:

Accounting Services Fee
Average Net Asset Level (in millions)						Annual Fee Rate for Each Level
From	$	0	to	$	10	$	0
From	$	10	to	$	25	$	11.5
From	$	25	to	$	50	$	23.1
From	$	50	to	$	100	$	35.5
From	$	100	to	$	200	$	48.4
From	$	200	to	$	350	$	63.2
From	$	350	to	$	550	$	82.5
From	$	550	to	$	750	$	96.3
From	$	750	to	$	1,000	$	121.6
	$	1,000 and Over				$	148.5

In addition, for each class of shares in excess of one, each Fund pays WRSCO a monthly per-class fee equal to 2.5% of the monthly accounting services base fee. 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 a Fund's net assets are at least $10 million.

Under the Shareholder Servicing Agreement between the Corporation and WRSCO, with respect to Class A, Class B, Class C, and Class E 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 Capital Appreciation Fund, Ivy Core Equity Fund, Ivy Energy Fund, Ivy Large Cap Growth Fund, Ivy Mid Cap Growth Fund, Ivy Science and Technology Fund and Ivy Small Cap Growth 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 R shares, ea ch Fund pays a monthly fee equal to one-twelfth of 0.20 of 1% of the average daily net assets of the class for the preceding month. For Class I and 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. Effective September 1, 2006, the Shareholder Servicing Agreement with respect to Class A, Class B and Class C shares was revised so that each Fund pays WRSCO an annual fee (payable monthly) for each account of the Fund that is non-networked and is as shown above; however, WRSCO has agreed to reduce that fee if the number of total shareholder accounts within the Complex (Waddell & Reed Advisors Funds, Waddell & Reed InvestEd Portfolios, Inc., Ivy Funds and Ivy Funds, Inc.) reaches certain levels. For certain networked accounts (that is, those accounts whose Fund shares are purchased through certain financial intermediaries), WRSCO has agreed to reduce its per account fees charged to the Funds to $0.50 per mon th per shareholder account. Additional fees may be paid by the Funds to those intermediaries, not to exceed $1.50 per shareholder account per month. Each Fund also reimburses WRSCO for certain out-of-pocket costs for all classes. Certain broker-dealers that maintain shareholder accounts with each Fund through an omnibus account provide transfer agent and other shareholder-related services that would otherwise be provided by WRSCO if the individual accounts that comprise the omnibus account were opened by their beneficial owners directly. WRSCO pays such broker-dealers a per account fee for each open account within the omnibus account, or a fixed rate (e.g., 0.10%) fee, based on the average daily net asset value of the omnibus account (or a combination thereof).

As principal underwriter for the Corporation's shares, Ivy Funds Distributor, Inc. (IFDI) receives sales commissions (which are not an expense of the Corporation) for Class A and Class E shares. A contingent deferred sales charge (CDSC) may be assessed against a shareholder's redemption amount of Class B, Class C or certain Class A and Class E shares and is paid to IFDI. During the six-month period ended September 30, 2008, IFDI received the following amounts in sales commissions and CDSC:

	Sales Commissions			CDSC
				Class A			Class B			Class C			Class E
Ivy Capital Appreciation Fund		$	253	$	1		$	15		$	6		$	––
Ivy Core Equity Fund			62		––	*		6			1			––
Ivy Large Cap Growth Fund			353		1			7			3			––
Ivy Mid Cap Growth Fund			89		––	*		7			––	*		––
Ivy Small Cap Growth Fund			101		––	*		7			2			––
Ivy Asset Strategy Fund			4,694		116			280			821			––
Ivy Energy Fund			153		––	*		1			1			––
Ivy Science and Technology Fund			196		2			19			21			––
Ivy High Income Fund			177		1			5			2			––
Ivy Limited-Term Bond Fund			81		––			7			4			––
Ivy Money Market Fund			––		––	*		22			13			––
Ivy Municipal Bond Fund			46		1			––	*		1			––
*Not shown due to rounding.

With respect to Class A, Class B, Class C and Class E shares, IFDI pays sales commissions and all expenses in connection with the sale of the Corporation's shares, except for registration fees and related expenses. During the six-month period ended September 30, 2008, the following amounts were paid:

Ivy Capital Appreciation Fund	$	337
Ivy Core Equity Fund		77
Ivy Large Cap Growth Fund		439
Ivy Mid Cap Growth Fund		91
Ivy Small Cap Growth Fund		123
Ivy Asset Strategy Fund		25,559
Ivy Energy Fund		173
Ivy Science and Technology Fund		388
Ivy High Income Fund		187
Ivy Limited-Term Bond Fund		109
Ivy Money Market Fund		––
Ivy Municipal Bond Fund		51

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 provision of personal services to Class B or Class C shareholders and/or maintenance of shareholder accounts of that class. Under the Class E Plan, each Fund pays IFDI a fee not to exceed 0.25% of the Fund's average annual net assets attributable to Class E shares, paid daily to compensate IFDI for its costs and expenses in connection with, either directly or through others, the distribution of the Class E shares, the provision of personal services to Class E shareholders and/or maintenance of Class E shareholder accounts. Under the Class Y Plan, each Fund may pay IFDI a fee of up to 0.25%, on an annual basis, of the average da ily 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 services to Class Y shareholders and/or maintaining Class Y shareholder accounts. Under the Class R Plan, each Fund may pay IFDI a fee of up to 0.50%, on an annual basis, of the average daily net assets of the Fund's Class R shares to compensate IFDI for, either directly or through third parties, distributing the Class R shares of that Fund, providing personal services to Class R shareholders and/or maintaining Class R shareholder accounts.

IFDI and WRSCO have voluntarily agreed to waive sufficient expenses of Class B and Class C shares of Ivy Money Market Fund to maintain the yield at 0.20%. This waiver serves to reduce shareholder servicing. For the six-month period ended September 30, 2008, the following expenses were waived:

Ivy Money Market Fund
Class B	––	*
Class C	––	*
*Not shown due to rounding.

Effective June 1, 2006 through July 31, 2009, IFDI and WRSCO have contractually agreed to reimburse sufficient 12b-1 and/or shareholder servicing fees to cap the expenses for Ivy Large Cap Growth Fund as follows:

Fund and Class	June 1, 2006 to July 31, 2009 Expense Limitation
Ivy Large Cap Growth Fund, Class A		1.15	%
Ivy Large Cap Growth Fund, Class Y		1.06	%

During the six-month period ended September 30, 2008, the amount of fees reimbursed under this agreement was as follows:

Ivy Large Cap Growth Fund
Class A	$	292
Class Y		65

For the period from August 1, 2006 through July 31, 2008, IFDI and WRSCO have contractually agreed to reimburse sufficient 12b-1 and/or shareholder servicing fees to cap the expenses for Ivy Capital Appreciation Class A and Class E shares at 1.35%. For the six-month period ended September 30, 2008, no 12b-1 and/or shareholder servicing fees were waived.

In addition, IFDI and WRSCO have voluntarily agreed to waive sufficient expenses of Class A, Class C and Class Y of Ivy Mid Cap Growth Fund to ensure that the total annual Fund operating expenses do not exceed the following levels:

Fund and Class	Expense Limitation (as a percentage of average net assets of each Class)
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	%

During the six-month period ended September 30, 2008, the amount of fees waived under this agreement was as follows:

Ivy Mid Cap Growth Fund
Class A	$	52
Class C		9
Class Y		10

This waiver serves to reduce distribution and service fees.


Effective March 1, 2008 through July 31, 2009, IICO, IFDI and WRSCO have contractually agreed to waive sufficient management fees, 12b-1 fees and/or shareholder servicing fees to cap the expenses for Ivy Energy Fund's shares as follows:

Fund and Class	March 1, 2008 to July 31, 2009 Expense Limitation
Ivy Energy Fund, Class A		1.60	%
Ivy Energy Fund, Class B		2.60	%
Ivy Energy Fund, Class C		2.60	%
Ivy Energy Fund, Class I		1.60	%
Ivy Energy Fund, Class Y		1.60	%

During the six-month period ended September 30, 2008, the amount of fees waived under this agreement is as follows:

Ivy Energy Fund
Class A	$	45
Class B		1
Class Y		––	*
This waiver serves to reduce distribution and service fees.
*Not shown due to rounding.

From August 1, 2008 through July 31, 2009, IFDI and WRSCO have contractually agreed to reimburse sufficient 12b-1 and/or shareholder servicing fees to insure that the total annual Class E operating expenses do not exceed the following levels for the following Funds:

	Class E
Ivy Capital Appreciation Fund		1.15	%
Ivy Core Equity Fund		1.35	%
Ivy Large Cap Growth Fund		1.15	%
Ivy Mid Cap Growth Fund		1.60	%
Ivy Small Cap Growth Fund		1.56	%
Ivy Asset Strategy Fund		1.00	%
Ivy Science and Technology Fund		1.43	%
Ivy High Income Fund		1.36	%
Ivy Money Market Fund		0.88	%

During the six-month period ended September 30, 2008, the following amounts were reimbursed as shown:

	Class E
Ivy Capital Appreciation Fund		$	6
Ivy Core Equity Fund			1
Ivy Large Cap Growth Fund			2
Ivy Mid Cap Growth Fund			2
Ivy Small Cap Growth Fund			2
Ivy Asset Strategy Fund			20
Ivy Science and Technology Fund			5
Ivy High Income Fund			2

In addition, effective September 1, 2008, IFDI and WRSCO have voluntarily agreed to waive sufficient Fund Class Y expenses to ensure that Class Y expenses do not surpass Class A expenses. The affected Funds and the amount of the waivers were as follows:

	Class Y
Ivy Asset Strategy Fund		$	135

During the six-month period ended September 30, 2008, the Corporation paid Directors' regular compensation of $174, which is included in other expenses.

NOTE 3 - Investment Valuations

The Corporation has instituted Financial Accounting Standards Board Statement of Financial Accounting Standards No.157, Fair Value Measurements (FAS 157). In accordance with FAS 157, fair value is defined as the price that each Fund would receive upon selling an asset or paying to transfer a liability in an orderly transaction between market participants at the measurement date. FAS 157 also establishes a framework for measuring fair value and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity's own assumptions about the assumptions that market partici pants would use in pricing the asset or liability developed based on the best information available in the circumstances. An individual investment's fair value measurement is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.

Level 1 - quoted prices in active markets for identical securities

Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3 - significant unobservable inputs (including each Fund's own assumptions in determining the fair value of investments)

The following tables summarize the valuation of each Fund's investments by the above FAS 157 fair value hierarchy levels as of September 30, 2008:

	Investments			Other Financial Instruments+
Ivy Capital Appreciation Fund
Level 1 - Quoted Prices		$	610,048		$	(15,794	)
Level 2 - Other Significant Observable Inputs			––			––
Level 3 - Significant Unobservable Inputs			––			––
Total		$	610,048		$	(15,794	)
Ivy Core Equity Fund
Level 1 - Quoted Prices		$	178,892		$	––
Level 2 - Other Significant Observable Inputs			23,822			––
Level 3 - Significant Unobservable Inputs			––			––
Total		$	202,714		$	––
Ivy Large Cap Growth Fund
Level 1 - Quoted Prices		$	513,966		$	––
Level 2 - Other Significant Observable Inputs			20,380			––
Level 3 - Significant Unobservable Inputs			––			––
Total		$	534,346		$	––
Ivy Mid Cap Growth Fund
Level 1 - Quoted Prices		$	127,442		$	––
Level 2 - Other Significant Observable Inputs			12,051			––
Level 3 - Significant Unobservable Inputs			––			(35	)
Total		$	139,493		$	(35	)
Ivy Small Cap Growth Fund
Level 1 - Quoted Prices		$	316,274		$	––
Level 2 - Other Significant Observable Inputs			52,043			––
Level 3 - Significant Unobservable Inputs			––			––
Total		$	368,317		$	––
Ivy Asset Strategy Fund
Level 1 - Quoted Prices		$	5,485,597		$	(18,219	)
Level 2 - Other Significant Observable Inputs			7,456,307			––
Level 3 - Significant Unobservable Inputs			81,439			––
Total		$	13,023,343		$	(18,219	)
Ivy Energy Fund
Level 1 - Quoted Prices		$	35,434		$	––
Level 2 - Other Significant Observable Inputs			3,518			––
Level 3 - Significant Unobservable Inputs			––			253
Total		$	38,952		$	253
Ivy Science and Technology Fund
Level 1 - Quoted Prices		$	385,688		$	651
Level 2 - Other Significant Observable Inputs			208,832			––
Level 3 - Significant Unobservable Inputs			––			(793	)
Total		$	594,520		$	(142	)
Ivy High Income Fund
Level 1 - Quoted Prices		$	557		$	64
Level 2 - Other Significant Observable Inputs			167,078			––
Level 3 - Significant Unobservable Inputs			646			––
Total		$	168,281		$	64
Ivy Limited-Term Bond Fund
Level 1 - Quoted Prices		$	168,953		$	––
Level 2 - Other Significant Observable Inputs			––			––
Level 3 - Significant Unobservable Inputs			––			––
Total		$	168,953		$	––
Ivy Money Market Fund
Level 1 - Quoted Prices		$	195,243		$	––
Level 2 - Other Significant Observable Inputs			––			––
Level 3 - Significant Unobservable Inputs			––			––
Total		$	195,243		$	––
Ivy Municipal Bond Fund
Level 1 - Quoted Prices		$	40,831		$	––
Level 2 - Other Significant Observable Inputs			––			––
Level 3 - Significant Unobservable Inputs			––			––
Total		$	40,831		$	––
+Other financial instruments are derivative instruments not reflected in the schedule of investments, such as options, futures, forward currency contracts and swap contracts, which are valued at the unrealized appreciation or depreciation on the instrument.

The following tables are a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:

	Investments			Other Financial Instruments+
Ivy Mid Cap Growth Fund
Beginning balance 4-1-08		$	––		$	––
Net realized gain (loss)			––			––
Net change in unrealized appreciation (depreciation)			––			81
Net purchases (sales)			––			(116	)
Transfers in and/or out of Level 3			––			––
Ending Balance 9-30-08		$	––		$	(35	)
Net change in unrealized appreciation (depreciation)             from investments still held as of 9-30-08		$	––		$	81
Ivy Asset Strategy Fund
Beginning balance 4-1-08		$	53,511		$	––
Net realized gain (loss)			––			––
Net change in unrealized appreciation (depreciation)			(15,072)			––
Net purchases (sales)			91,726			––
Transfers in and/or out of Level 3			(48,726)			––
Ending Balance 9-30-08		$	81,439		$	––
Net change in unrealized appreciation (depreciation)             from investments still held as of 9-30-08		$	53,511		$	––
Ivy Energy Fund
Beginning balance 4-1-08		$	––		$	––
Net realized gain (loss)			––			––
Net change in unrealized appreciation (depreciation)			––			246
Net purchases (sales)			––			7
Transfers in and/or out of Level 3			––			––
Ending Balance 9-30-08		$	––		$	253
Net change in unrealized appreciation (depreciation)             from investments still held as of 9-30-08		$	––		$	246
Ivy Science and Technology Fund
Beginning balance 4-1-08		$	––		$	1
Net realized gain (loss)			––			(170	)
Net change in unrealized appreciation (depreciation)			––			(475	)
Net purchases (sales)			––			(148	)
Transfers in and/or out of Level 3			––			(1	)
Ending Balance 9-30-08		$	––		$	(793	)
Net change in unrealized appreciation (depreciation)             from investments still held as of 9-30-08		$	––		$	(666	)
Ivy High Income Fund
Beginning balance 4-1-08		$	––		$	––
Net realized gain (loss)			––			––
Net change in unrealized appreciation (depreciation)			––			––
Net purchases (sales)			––			––
Transfers in and/or out of Level 3			646			––
Ending Balance 9-30-08		$	646		$	––
Net change in unrealized appreciation (depreciation)             from investments still held as of 9-30-08		$	5		$	––
+Other financial instruments are derivative instruments not reflected in the schedule of investments, such as options, futures, forward currency contracts and swap contracts, which are valued at the unrealized appreciation or depreciation on the instrument.

NOTE 4 - Investment Securities Transactions

For the six-month period ended September 30, 2008, the cost of purchases and the proceeds from maturities and sales of investments securities, other than U.S. Government and short-term securities, were as follows:

	Purchases		Sales
Ivy Capital Appreciation Fund	$	379,068	$	193,831
Ivy Core Equity Fund		100,199		119,624
Ivy Large Cap Growth Fund		309,158		148,733
Ivy Mid Cap Growth Fund		50,891		40,294
Ivy Small Cap Growth Fund		162,996		205,992
Ivy Asset Strategy Fund		10,273,680		11,087,757
Ivy Energy Fund		12,631		428
Ivy Science and Technology Fund		199,490		114,554
Ivy High Income Fund		108,365		80,722
Ivy Limited-Term Bond Fund		4,147		––
Ivy Money Market Fund		––		––
Ivy Municipal Bond Fund		15,273		6,379

Purchases and proceeds from maturities and sales of U.S. Government securities were:

	Purchases			Sales
Ivy Asset Strategy Fund		$	262,988	$	453,039
Ivy Limited-Term Bond Fund			59,570		8,182

Purchases and proceeds from maturities and sales of affiliates included above were:

	Purchases		Sales
Ivy Asset Strategy Fund	$	196,950	$	––

For Federal income tax purposes, cost of investments owned at September 30, 2008 and the related unrealized appreciation (depreciation) were as follows:

	Cost		Appreciation		Depreciation		Aggregate Appreciation (Depreciation)
Ivy Capital Appreciation Fund	$	717,371	$	13,730	$	121,039	$	(107,309	)
Ivy Core Equity Fund		185,871		27,400		10,557		16,843
Ivy Large Cap Growth Fund		530,689		37,812		34,155		3,657
Ivy Mid Cap Growth Fund		138,715		20,719		19,941		778
Ivy Small Cap GrowthFund		384,409		35,370		51,462		(16,092	)
Ivy Asset StrategyFund	13,838,152			83,417		930,594	(847,177		)
Ivy Energy Fund		45,701		1,672		8,114		(6,442	)
Ivy Science and Technology Fund		632,055		37,248		73,668		(36,420	)
Ivy High Income Fund		187,945		145		19,745		(19,600	)
Ivy Limited-Term Bond Fund		169,038		990		1,075		(85	)
Ivy Money Market Fund		195,243		––		––		––
Ivy Municipal Bond Fund		42,852		289		2,310		(2,021	)

NOTE 5 - Federal Income Tax Matters

For Federal income tax purposes, the Funds' distributed and undistributed earnings and profit for the fiscal year ended March 31, 2008 and the related net capital losses and post-October activity were as follows:

	Ivy Capital Appreciation Fund		Ivy Core Equity Fund		Ivy Large Cap Growth Fund
Net ordinary income	$	2,863	$	1,222	$	––
Distributed ordinary income		2,863		1,222		––
Undistributed ordinary income		––		––		––
Realized long-term capital gains		1,008		5,646		3,257
Distributed long-term capital gains		1,481		21,531		3,257
Undistributed long-term capital gains		––		––		––
Post-October losses deferred		40,745		9,049		3,242

	Ivy Mid Cap Growth Fund		Ivy Small Cap Growth Fund		Ivy Asset Strategy Fund
Net ordinary income	$	––	$	3,634	$	922,937
Distributed ordinary income		––		3,634		45,821
Undistributed ordinary income		––		––		908,145
Realized long-term capital gains		––		54,539		322,481
Distributed long-term capital gains		––		65,508		26,238
Undistributed long-term capital gains		––		2,713		322,481
Post-October losses deferred		––		––		7,497

	Ivy Energy Fund		Ivy Science and Technology Fund		Ivy High Income Fund
Net ordinary income	$	––	$	21,140	$	10,218
Distributed ordinary income		––		11,512		10,186
Undistributed ordinary income		––		9,628		146	*
Realized long-term capital gains		––		43,874		––
Distributed long-term capital gains		––		47,497		––
Return of capital		42		––		––
Undistributed long-term capital gains		––		8,149		––
Post-October losses deferred		562		––		613
*This entire amount was distributed prior to September 30, 2008.

	Ivy Limited-Term Bond Fund				Ivy Money Market Fund			Ivy Municipal Bond Fund
Net ordinary income		$	2,350		$	3,328		$	875
Distributed ordinary income			2,334			3,331			870
Undistributed ordinary income			48	*		40	*		19	*
Realized long-term capital gains			––			––			––
Distributed long-term capital gains			––			––			––
Undistributed long-term capital gains			––			––			––
Post-October losses deferred			––			––			4
*This entire amount was distributed prior to September 30, 2008.

Internal Revenue Code regulations permit each Fund to defer into its next fiscal year net capital losses or net long-term capital losses and currency losses incurred between each November 1 and the end of its fiscal year (post-October losses).

Capital loss carryovers are available to offset future realized capital gain net income incurred in the eight taxable years succeeding the loss year for Federal income tax purposes. The following shows the totals by year in which the capital loss carryovers will expire if not utilized.

	Ivy Core Equity Fund			Ivy Large Cap Growth Fund		Ivy Mid Cap Growth Fund
March 31, 2009		$	––	$	2,323	$	––
March 31, 2010			2,958		2,102		12,594
March 31, 2011			1,479		––		5,387
March 31, 2012			––		––		758
Total carryover		$	4,437	$	4,425	$	18,739

	Ivy Small Cap Growth Fund			Ivy Science and Technology Fund		Ivy High Income Fund
March 31, 2009		$	2,069	$	414	$	––
March 31, 2010			2,069		413		326
March 31, 2011			565		414		1,183
March 31, 2014			––		––		105
Total carryover		$	4,703	$	1,241	$	1,614

	Ivy Limited-Term Bond Fund			Ivy Money Market Fund		Ivy Municipal Bond Fund
March 31, 2009		$	––	$	––	$	179
March 31, 2010			––		––		231
March 31, 2011			89		––		75
March 31, 2014			117		––		––
March 31, 2016			––		1		89
Total carryover		$	206	$	1	$	574

Ivy US Blue Chip Fund was merged into Ivy Core Equity Fund as of June 16, 2003 and Advantus Index 500 Fund was merged into Ivy Core Equity Fund as of December 8, 2003. At the time of the mergers, Ivy US 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 for each period ending from March 31, 2009 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. 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 $1,384 for each period ending from March 31, 2009 through 2010 plus any unused limitations from prior year 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. 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 $4,096 for the period ending March 31, 2009 and $1,182 for each period ending from March 31, 2010 through 2011 and $197 for the period ending March 31, 2012 plus any unused limitations from prior years.

Advantus Enterprise Fund was merged into Ivy Small Cap Growth Fund as of December 8, 2003. 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 $2,069 for each period ending from March 31, 2009 through 2010 and $564 for the period ending March 31, 2011 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. 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 $414 for each period ending from March 31, 2009 through 2011 plus any unused limitations from prior years.

NOTE 6 - Multiclass Operations

Each Fund within the Corporation currently offers five classes of shares, Class A, Class B, Class C, Class I and Class Y (other than Money Market Fund which offers Class A and Class E shares and Municipal Bond Fund which does not offer Class E and Class I shares), and all Funds except Ivy Energy Fund, Ivy Limited-Term Bond Fund and Ivy Municipal Bond Fund offer Class E shares. Each share class has equal rights as to assets and voting privileges. In addition, Asset Strategy Fund, Large Cap Growth Fund, Mid Cap Growth Fund, Science and Technology Fund and Small Cap Growth Fund offer Class R shares, which also 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; investments via exchange into Class B and Class C are permitted. Ivy Municipal Bond Class Y 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 St atement 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.

Transactions in capital stock for the six-month period ended September 30, 2008 are summarized below.

	Ivy Capital Appreciation Fund				Ivy Core Equity Fund			Ivy Large Cap Growth Fund
Shares issued from sale of shares:
Class A			8,926			973			13,597
Class B			157			47			162
Class C			1,739			572			1,204
Class E			20			16			19
Class I			18,352			6			4,690
Class R			NA			NA			226
Class Y			1,072			46			1,848
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A			––			––			––
Class B			––			––			––
Class C			––			––			––
Class E			––			––			––
Class I			––			––			––
Class R			NA			NA			––
Class Y			––			––			––
Shares redeemed:
Class A			(11,419	)		(953	)		(4,705	)
Class B			(334	)		(217	)		(268	)
Class C			(1,673	)		(1,655	)		(422	)
Class E			(18	)		(3	)		(1	)
Class I			(1,005	)		(––	)*		(20	)
Class R			NA			NA			(35	)
Class Y			(1,529	)		(14	)		(2,681	)
Increase (decrease) in outstanding       capital shares			14,288			(1,182	)		13,614
*Not shown due to rounding.
Value issued from sale of shares:
Class A		$	88,095		$	9,238		$	179,331
Class B			1,453			408			1,958
Class C			15,886			5,056			14,901
Class E			194			158			250
Class I			189,645			57			61,391
Class R			NA			NA			2,968
Class Y			10,672			459			24,867
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A			––			––			––
Class B			––			––			––
Class C			––			––			––
Class E			––			––			––
Class I			––			––			––
Class R			NA			NA			––
Class Y			––			––			––
Value redeemed:
Class A		(110,618		)	(9,059		)	(62,051		)
Class B			(3,063	)		(1,900	)		(3,229	)
Class C		(14,935		)		(14,713	)	(5,188		)
Class E			(172	)		(24	)		(18	)
Class I			(9,660	)		(2	)		(264	)
Class R			NA			NA			(432	)
Class Y			(14,977	)		(135	)		(35,631	)
Increase (decrease) in outstanding capital		$	152,520		$	(10,457	)	$	178,853

	Ivy Mid Cap Growth Fund			Ivy Small Cap Growth Fund			Ivy Asset Strategy Fund
Shares issued from sale of shares:
Class A		1,964			1,358			106,475
Class B		145			54			5,041
Class C		139			522			76,296
Class E		10			9			255
Class I		4			9			12,794
Class R		1			7			4
Class Y		195			848			29,059
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A		––			––			143
Class B		––			––			––
Class C		––			––			––
Class E		––			––			––
Class I		––			––			8
Class R		––			––			––
Class Y		––			––			15
Shares redeemed:
Class A		(1,042	)		(1,253	)		(47,064	)
Class B		(138	)		(250	)		(1,308	)
Class C		(115	)		(2,427	)		(18,102	)
Class E		(2	)		(2	)		(15	)
Class I		(8	)		(20	)		(2,217	)
Class R		(––	)*		(3	)		(––	)
Class Y		(172	)		(1,041	)		(16,908	)
Increase (decrease) in outstanding       capital shares		981			(2,189	)		144,476
*Not shown due to rounding.
Value issued from sale of shares:
Class A	$	25,316		$	14,359		$	2,850,610
Class B		1,722			517			132,085
Class C		1,690			5,151			2,016,086
Class E		127			98			6,793
Class I		56			103			342,372
Class R		11			77			109
Class Y		2,518			10,018			778,977
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A		––			––			3,856
Class B		––			––			––
Class C		––			––			––
Class E		––			––			––
Class I		––			––			213
Class R		––			––			––
Class Y		––			––			414
Value redeemed:
Class A	(13,207		)	(13,179		)	(1,200,108		)
Class B		(1,612	)		(2,359	)		(32,876	)
Class C	(1,417		)	(23,864		)		(450,234	)
Class E		(25	)		(21	)	(381		)
Class I		(101	)		(245	)	(56,383		)
Class R		(––	)*		(28	)	(––		)
Class Y		(2,229	)	(12,209		)	(429,091		)
Increase (decrease) in outstanding capital	$	12,849		$	(21,582	)	$	3,962,442
*Not shown due to rounding.

	Ivy Energy Fund			Ivy Science and Technology Fund			Ivy High Income Fund
Shares issued from sale of shares:
Class A		1,327			3,438			4,738
Class B		55			139			206
Class C		197			1,111			319
Class E		––			20			31
Class I		––			301			7
Class R		NA			101			NA
Class Y		110			2,283			686
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A		––			––			621
Class B		––			––			25
Class C		––			––			55
Class E		––			––			3
Class I		––			––			2
Class R		NA			––			NA
Class Y		––			––			22
Shares redeemed:
Class A		(519	)	(1,817		)	(2,556		)
Class B		(20	)		(177	)		(93	)
Class C		(74	)		(626	)	(370		)
Class E		(––	)		(2	)		(3	)
Class I		(––	)		(53	)		(9	)
Class R		NA			(11	)		NA
Class Y		(272	)		(1,200	)		(246	)
Increase in outstanding capital shares		804			3,507			3,438
Value issued from sale of shares:
Class A	$	20,067		$	97,884		$	38,583
Class B		837			3,632			1,699
Class C		3,012			29,788			2,588
Class E		––			566			249
Class I		––			8,897			57
Class R		NA			2,866			NA
Class Y		1,659			67,715			5,509
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A		––			––			5,036
Class B		––			––			203
Class C		––			––			445
Class E		––			––			25
Class I		––			––			13
Class R		NA			––			NA
Class Y		––			––			182
Value redeemed:
Class A	(7,441		)	(50,878		)	(20,640		)
Class B		(267	)		(4,453	)		(753	)
Class C		(1,025	)		(16,413	)	(2,970		)
Class E		(––	)		(62	)		(22	)
Class I		(––	)		(1,557	)		(69	)
Class R		NA			(311	)		NA
Class Y		(3,863	)		(34,825	)		(2,008	)
Increase in outstanding capital	$	12,979		$	102,849		$	28,127

	Ivy Limited- Term Bond Fund			Ivy Money Market Fund			Ivy Municipal Bond Fund
Shares issued from sale of shares:
Class A		6,097			94,785			993
Class B		433			14,594			30
Class C		3,298			53,367			359
Class E		––			1,885			NA
Class I		12			NA			NA
Class Y		417			NA			––
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A		125			854			37
Class B		7			28			––	*
Class C		17			96			14
Class E		––	*		13			NA
Class I		––	*		NA			NA
Class Y		2			NA			––	*
Shares redeemed:
Class A		(1,956	)	(61,717		)	(389		)
Class B		(151	)		(6,520	)		(10	)
Class C		(468	)	(18,051		)	(117		)
Class E		(––	)		(228	)		NA
Class I		(4	)		NA			NA
Class Y		(42	)		NA			(2	)
Increase in outstanding capital shares		7,787			79,106			915
*Not shown due to rounding.
Value issued from sale of shares:
Class A	$	63,194		$	94,785		$	10,719
Class B		4,484			14,594			321
Class C		34,226			53,367			3,852
Class E		––			1,885			NA
Class I		124			NA			NA
Class Y		4,329			NA			––
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A		1,298			854			398
Class B		67			28			5
Class C		172			96			143
Class E		2			13			NA
Class I		2			NA			NA
Class Y		22			NA			––	*
Value redeemed:
Class A	(20,223		)	(61,717		)	(4,167		)
Class B		(1,560	)	(6,520		)		(105	)
Class C	(4,839		)	(18,051		)	(1,259		)
Class E		(––	)	(228		)	NA
Class I		(40	)	NA			NA
Class Y		(437	)	NA			(25		)
Increase in outstanding capital	$	80,821		$	79,106		$	9,882
*Not shown due to rounding.

Transactions in capital stock for the fiscal year ended March 31, 2008 are summarized below.

	Ivy Capital Appreciation Fund				Ivy Core Equity Fund			Ivy Large Cap Growth Fund
Shares issued from sale of shares:
Class A			42,294			2,530			18,353
Class B			1,238			121			667
Class C			8,788			660			1,921
Class E			283			61			34
Class I			1,400			31			146
Class R			NA			NA			51
Class Y			6,219			123			5,714
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A			301			755			151
Class B			2			87			9
Class C			25			1,304			14
Class E			2			3			––	*
Class I			1			2			1
Class R			NA			NA			––	*
Class Y			4			17			56
Shares redeemed:
Class A			(7,926	)		(2,064	)		(11,090	)
Class B			(281	)		(296	)		(681	)
Class C			(1,227	)		(3,446	)		(857	)
Class E			(22	)		(1	)		(1	)
Class I			(145	)		(10	)		(33	)
Class R			NA			NA			(3	)
Class Y			(1,254	)		(189	)		(2,557	)
Increase (decrease) in outstanding       capital shares			49,702			(312	)		11,895
*Not shown due to rounding.
Value issued from sale of shares:
Class A		$	462,019		$	26,526		$	252,724
Class B			12,786			1,193			8,165
Class C			90,966			6,514			25,207
Class E			3,240			625			448
Class I			15,590			333			1,833
Class R			NA			NA			713
Class Y			68,226			1,342			82,757
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A			3,417			7,935			2,265
Class B			23			851			119
Class C			270			12,855			204
Class E			22			33			2
Class I			10			20			11
Class R			NA			NA			3
Class Y			49			189			845
Value redeemed:
Class A		(83,186		)	(21,456		)	(147,074		)
Class B			(2,801	)		(2,864	)		(8,423	)
Class C		(11,956		)	(33,936		)	(10,825		)
Class E			(251	)		(10	)		(11	)
Class I			(1,504	)		(109	)		(432	)
Class R			NA			NA			(43	)
Class Y			(13,333	)		(2,016	)		(34,103	)
Increase (decrease) in outstanding capital		$	543,587		$	(1,975	)	$	174,385

	Ivy Mid Cap Growth Fund			Ivy Small Cap Growth Fund				Ivy Asset Strategy Fund
Shares issued from sale of shares:
Class A		2,665			3,219			160,137
Class B		107			130			7,401
Class C		137			895			133,488
Class E		33			57			420
Class I		53			149			3,943
Class R		2			27			NA
Class Y		465			1,849			52,799
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A		––			1,250			1,403
Class B		––			180			34
Class C		––			2,819			478
Class E		––			7			1
Class I		––			18			6
Class R		––			1			NA
Class Y		––			1,404			147
Shares redeemed:
Class A		(2,149	)		(3,451	)		(16,956	)
Class B		(221	)		(356	)		(904	)
Class C		(281	)		(5,433	)		(8,664	)
Class E		(1	)		(6	)		(10	)
Class I		(14	)		(18	)		(88	)
Class R		(1	)		(2	)		NA
Class Y		(276	)		(3,289	)		(4,691	)
Increase (decrease) in outstanding       capital shares		519			(550	)		328,944
Value issued from sale of shares:
Class A	$	36,612		$	41,516		$	4,203,333
Class B		1,374			1,542			187,936
Class C		1,782			10,526			3,404,363
Class E		454			778			10,744
Class I		714			2,152			106,333
Class R		33			293			NA
Class Y		6,557			26,147			1,379,525
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A		––			14,855			37,018
Class B		––			1,958			930
Class C		––			31,323			12,946
Class E		––			81			40
Class I		––			240			169
Class R		––			16			NA
Class Y		––			18,652			3,911
Value redeemed:
Class A	(29,595		)	(43,972		)	(430,452		)
Class B		(2,833	)		(4,088	)		(22,351	)
Class C	(3,676		)	(63,426		)		(218,454	)
Class E		(8	)		(81	)	(274		)
Class I		(200	)		(250	)	(2,331		)
Class R		(7	)		(27	)	NA
Class Y		(3,787	)	(45,206		)	(122,108		)
Increase (decrease) in outstanding capital	$	7,420		$	(6,971	)	$	8,551,278

	Ivy Energy Fund			Ivy Science and Technology Fund			Ivy High Income Fund
Shares issued from sale of shares:
Class A		2,285			4,502			10,397
Class B		90			208			277
Class C		153			1,164			431
Class E		10			47			79
Class I		9			346			40
Class R		NA			65			NA
Class Y		386			3,462			241
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A		2			854			922
Class B		––			79			46
Class C		––			414			123
Class E		––	*		4			4
Class I		––	*		9			2
Class R		NA			4			NA
Class Y		––	*		443			46
Shares redeemed:
Class A		(861	)	(3,018		)	(4,329		)
Class B		(23	)		(184	)		(278	)
Class C		(27	)		(945	)	(686		)
Class E		(––	)		(2	)		(8	)
Class I		(––	)		(43	)		(5	)
Class R		NA			(6	)		NA
Class Y		(49	)		(1,182	)		(934	)
Increase in outstanding capital shares		1,975			6,221			6,368
*Not shown due to rounding.
Value issued from sale of shares:
Class A	$	30,208		$	138,971		$	89,371
Class B		1,134			5,955			2,399
Class C		1,969			34,028			3,719
Class E		100			1,449			691
Class I		100			10,872			350
Class R		NA			1,949			NA
Class Y		5,269			110,615			2,070
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A		32			25,555			7,825
Class B		––			2,175			394
Class C		––			11,688			1,052
Class E		––	*		111			31
Class I		1			295			21
Class R		NA			119			NA
Class Y		7			13,729			396
Value redeemed:
Class A	(11,166		)	(90,402		)	(36,798		)
Class B		(299	)		(5,112	)		(2,388	)
Class C		(346	)		(27,101	)	(5,829		)
Class E		(––	)		(75	)		(68	)
Class I		(––	)		(1,333	)		(42	)
Class R		NA			(169	)		NA
Class Y		(636	)		(36,944	)		(8,316	)
Increase in outstanding capital	$	26,373		$	196,375		$	54,878
*Not shown due to rounding.

	Ivy Limited- Term Bond Fund			Ivy Money Market Fund			Ivy Municipal Bond Fund
Shares issued from sale of shares:
Class A		4,997			166,003			1,217
Class B		294			9,473			36
Class C		791			26,834			166
Class E		10			1,143			NA
Class I		19			NA			NA
Class Y		120			NA			––
Shares issued from reinvestment of dividends       and/or capital gains distribution:
Class A		170			2,777			40
Class B		13			111			1
Class C		30			282			26
Class E		––	*		19			NA
Class I		––	*		NA			NA
Class Y		4			NA			––	*
Shares redeemed:
Class A		(1,739	)	(136,395		)	(236		)
Class B		(213	)		(6,327	)		(70	)
Class C		(602	)		(15,349	)	(379		)
Class E		(––	)		(133	)		NA
Class I		(6	)		NA			NA
Class Y		(102	)		NA			(––	)
Increase in outstanding capital shares		3,786			48,438			801
*Not shown due to rounding.
Value issued from sale of shares:
Class A	$	51,369		$	166,003		$	13,364
Class B		3,027			9,473			393
Class C		8,174			26,834			1,820
Class E		100			1,143			NA
Class I		187			NA			NA
Class Y		1,236			NA			––
Value issued from reinvestment of dividends       and/or capital gains distribution:
Class A		1,745			2,777			445
Class B		132			111			12
Class C		311			282			292
Class E		4			19			NA
Class I		5			NA			NA
Class Y		37			NA			––	*
Value redeemed:
Class A	(17,826		)	(136,395		)	(2,589		)
Class B		(2,187	)	(6,327		)		(774	)
Class C	(6,169		)	(15,349		)	(4,144		)
Class E		(––	)	(133		)	NA
Class I		(64	)	NA			NA
Class Y		(1,041	)	NA			(––		)
Increase in outstanding capital	$	39,040		$	48,438		$	8,819
*Not shown due to rounding.

NOTE 7 - Options

Options purchased by a Fund are accounted for in the same manner as marketable portfolio securities. The cost of portfolio securities acquired through the exercise of call options is increased by the premium paid to purchase the call. The proceeds from securities sold through the exercise of put options are decreased by the premium paid to purchase the put.

When a Fund writes (sells) an option, an amount equal to the premium received by a Fund is recorded as a liability. The amount of the liability is subsequently adjusted to reflect the current market value of the option written. The current market value of an option is the last sales price on the principal exchange on which the option is traded or, in the absence of transactions, the mean between the bid and asked prices or at a value supplied by a broker-dealer. When an option expires on its stipulated expiration date or a Fund enters into a closing purchase transaction, the Fund realizes a gain (or loss if the cost of a closing purchase transaction exceeds the premium received when the call option was sold) and the liability related to such option is extinguished. When a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether a Fund has realized a gain or loss. For each Fund, when a written put is exercised, the cost basis of the securit ies purchased by a Fund is reduced by the amount of the premium received. Investments in options, whether purchased or written, involve certain risks. Writing put options and purchasing call options may increase the Fund's exposure to the underlying security (or basket of securities). Purchasing put options and writing call options may decrease the Fund's exposure to the underlying security (or basket of securities). With written options, there may be times when the Fund will be required to purchase or sell securities to meet its obligation under the option contract where the required action is not beneficial to the Fund, due to unfavorable movement of the market price of the underlying security (or basket of securities). Additionally, to the extent the Fund enters into over-the-counter (OTC) option transactions with counterparties, the Fund will be exposed to the risk that counterparties to these OTC transactions will be unable to meet their obligations under the terms of the transaction.

For Ivy Capital Appreciation Fund, transactions in written call options were as follows:

	Number of Contracts			Premiums Received
Outstanding at March 31, 2008		––	*	$	12
Options written		59			13,295
Options terminated in closing purchase transactions	(32		)	(7,671		)
Options exercised	(––		)		(––	)
Options expired		(3	)		(449	)
Outstanding at September 30, 2008		24		$	5,187

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

	Number of Contracts			Premiums Received
Outstanding at March 31, 2008		––		$	––
Options written		25			5,262
Options terminated in closing purchase transactions		(3	)	(624		)
Options exercised		(1	)		(226	)
Options expired		(2	)	(276		)
Outstanding at September 30, 2008		19		$	4,136

For Ivy Mid Cap Growth Fund, transactions in written call options were as follows:

	Number of Contracts				Premiums Received
Outstanding at March 31, 2008		81			$	357
Options written			1			116
Options terminated in closing purchase transactions		(81		)	(320		)
Options exercised			(––	)*		(37	)
Options expired			(––	)	(––		)
Outstanding at September 30, 2008			1		$	116

For Ivy Asset Strategy Fund, transactions in written call options were as follows:

	Number of Contracts				Premiums Received
Outstanding at March 31, 2008			––		$	––
Options written			586			39,616
Options terminated in closing purchase transactions		(586		)	(39,616		)
Options exercised		(––		)	(––		)
Options expired			(––	)		(––	)
Outstanding at September 30, 2008			––		$	––
*Not shown due to rounding.

For Energy Fund, transactions in written call options were as follows:

	Number of Contracts			Premiums Received
Outstanding at March 31, 2008		––		$	––
Options written		3			223
Options terminated in closing purchase transactions		(––	)	(––		)
Options exercised		(––	)	(––		)
Options expired		(––	)		(––	)
Outstanding at September 30, 2008		3		$	223

For Ivy Science and Technology Fund, transactions in written call options were as follows:

	Number of Contracts				Premiums Received
Outstanding at March 31, 2008			10		$	2,313
Options written			7			4,458
Options terminated in closing purchase transactions		(7		)	(3,656		)
Options exercised			(1	)		(790	)
Options expired			(7	)	(1,439		)
Outstanding at September 30, 2008			2		$	886

For Ivy Science and Technology Fund, transactions in written put options were as follows:

	Number of Contracts			Premiums Received
Outstanding at March 31, 2008		––		$	––
Options written		––	*		149
Options terminated in closing purchase transactions		(––	)	(––		)
Options exercised		(––	)		(––	)
Options expired		(––	)	(––		)
Outstanding at September 30, 2008		––	*	$	149
*Not shown due to rounding.

NOTE 8 - Swaps

Each Fund, excluding Money Market Fund, may invest in swap agreements, which are agreements to exchange the return generated by one instrument for the return generated by another instrument. Each Fund may enter into credit default, total return, variance and other swap agreements to attempt to: 1) preserve a return or a spread on a particular investment or portion of its portfolio; 2) protect against any increase in the price of securities the Fund anticipates purchasing at a later date; or 3) enhance yield.

Credit default swaps involve the exchange of a fixed rate premium for protection against the loss in value of an underlying security in the event of a defined credit event, such as payment default or bankruptcy. Under a credit default swap one party acts as a guarantor by receiving the fixed periodic payment in exchange for the commitment to purchase the underlying security at par if the defined credit event occurs. Each Fund may enter into credit default swaps in which either it or its counterparty act as the guarantor.

Total return swaps involve a commitment to pay periodic interest payments in exchange for a market-linked return based on a security or a basket of securities representing a variety of securities or a particular index. To the extent the total return of the security, index or other financial measure underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the Fund will receive a payment from or make a payment to the counterparty.

Variance swaps involve a contract in which two parties agree to exchange cash flows based on the measured variance of a specified underlying security or index during a certain time period. On the trade date, the two parties agree on the strike price of the contract (the reference level against which cash flows are exchanged), as well as the number of units in the transaction and the length of the contract. Like an option contract, the value of a variance swap is influenced by both realized and implied volatility, as well as the passage of time. Each Fund may enter into variance swaps to manage volatility risk.

The creditworthiness of firms with which a Fund enters into a swap agreement is monitored by IICO. If a firm's creditworthiness declines, the value of the agreement would likely decline, potentially resulting in losses. If a default occurs by the counterparty to such a transaction, the Fund will have contractual remedies pursuant to the agreement related to the transaction.

Swaps are marked-to-market daily based on valuations provided by a pricing vendor or a broker-dealer. Changes in value are recorded as unrealized appreciation (depreciation) in the Statement of Operations. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with the custodian or counterparty. Payments received or made at the beginning of the measurement period are reflected as such on the Statement of Assets and Liabilities. These upfront payments, as well as any periodic payments, are recorded as realized gain or loss in the Statement of Operations. Gains or losses may be realized upon termination of the swap agreement.

Entering into swap agreements involves certain risks. Among these are possible failure of the counterparty to fulfill its obligations, possible lack of liquidity, and unfavorable changes in interest rates or underlying investments.

NOTE 9 - Futures

No price is paid upon entering into a futures contract. Instead, upon entering into a futures contract, a Fund is required to deposit, in a segregated account, an amount of cash of liquid securities 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 Fund 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 Fund 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. A Fund uses futures to attempt to reduce the overall risk of its investments or to enhance returns. The risks of futures contracts include the possibility there may be an illiquid secondary market, that a change in the value of the contract may not correlate with the changes in the value of the underlying securities or ind ex, and/or the possible inability of the counterparty to fulfill its obligations under the agreement.

NOTE 10 - Commitment

In connection with Ivy Asset Strategy Fund's investment in Vietnam Azalea Fund Limited (VAF), the Fund is contractually committed to provide additional capital of up to $4,620 if and when VAF requests such contributions or draw downs. The total commitment is limited to $11,000. At September 30, 2008, Ivy Asset Strategy Fund had made a total contribution of $6,380. No public market currently exists for the shares of VAF nor are the shares listed on any securities exchange. VAF intends to become listed within one year after the final commitment has been drawn down.

NOTE 11 - Affiliated Company Transactions

A summary of transactions for affiliated companies during the six-month period ended September 30, 2008 follows:

	4-1-08 Share Balance	Purchase Cost	Sales Cost	Realized Gain/ (Loss)	Distributions Received	9-30-08 Share Balance	9-30-08 Market Value
Ivy Asset Strategy Fund
New Oriental Education     & Technology     Group Inc., ADR(1)	––	$195,300	$ ––	$ ––	$ ––	2,707	$173,873
Vietnam Azalea     Fund Limited(1)	1,100	1,650	––	––	––	1,100	5,071
(1)Non-income producing during the period.

NOTE 12 - Senior Loans

Ivy High Income Fund invests in senior secured corporate loans either as an original lender or as a purchaser of a loan assignment or a participation interest in a loan. Senior Loans are generally made to U.S. and foreign borrowers that are corporations, partnerships, or other business entities. Senior Loans are generally readily marketable, but some loans may be illiquid or be subject to some restrictions on resale. These loans are valued using a composite price from more than one broker or dealer as obtained from a pricing service. As of September 30, 2008, securities with an aggregate market value of $23,022 representing 13.52% of the Fund's net assets were comprised of senior loans.

As of September, 30, 2008, the Fund had unfunded loan commitments of approximately $671. The Fund is obligated to fund these loan commitments at the borrower's discretion. Funded portions of these commitments are presented in the Schedule of Investments while unfunded commitments are as follows:

Borrower	Unfunded Commitment Amount	9-30-08 Value of Unfunded Commitment
CHS/Community Health Systems, Inc.	$98	$85

NOTE 13 - Subsequent Event

On October 3, 2008, the Board of Directors of the Ivy Money Market Fund approved the participation by the Fund in the U.S. Department of the Treasury's Temporary Guarantee Program for Money Market Funds through December 18, 2008 (the Program). Under the program, in the event that the market-based net asset value per share of the fund falls below $0.995 and the Fund liquidates its holdings, the Program will provide coverage to shareholders in the Fund for up to $1.00 per share for the lesser of either the number of shares the investor held in the Fund at the close of business on September 19, 2008 or the number of shares the investor held the date the market-based net asset value per share fell below $0.955. The Program applies only to shareaholders of record who maintain a positive account balance in the Fund from the close of business on September 19, 2008 through the date on which the Fund's market-based net asset value per share falls below $0.995. Participation in the initial three months of the Program (that is, until December 18, 2008) requires a payment to the U.S. Department of the Treasury of 0.01% based on the net asset value of the Fund as of September 19, 2008. This expense will be borne by the Fund without regard to any expense limitation currently in effect for the Fund.

Renewal of Investment Management Agreement
for Ivy Funds, Inc.

At a meeting of the Board of Directors of the Corporation held on August 26 and 27, 2008, the Directors, including all of the Directors who are not "interested persons" as defined in Section 2(a)(19) of the Investment Company Act of 1940 (the "Independent Directors"), unanimously approved the continuance of the existing Investment Management Agreement between IICO and the Corporation (with respect to Ivy Asset Strategy Fund, Ivy Capital Appreciation Fund, Ivy Core Equity Fund, Ivy Energy Fund, Ivy High Income 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 and Ivy Small Cap Growth Fund).

The Independent Directors were assisted in their review by independent legal counsel, and met with such counsel separately from representatives of IICO. Independent legal counsel provided the Board with a memorandum that discussed the various factors that the Board should consider as part of its review of the various agreements, including, among other things, the nature and the quality of the services provided by IICO, profitability (including any fall-out benefits) from the relationships with the Funds, economies of scale, the role played by the Independent Directors, and information on comparative fees and expenses. The Board also considered the written responses and supplementary materials produced by IICO in response to a 15(c) due diligence request list submitted by the Independent Directors' counsel prior to the meeting. Included in those responses, which had been provided to the Board prior to the meeting, was a Fund-by-Fund profitability analysis prepared by IICO, as well as an explanation of the met hodology by which the profitability analysis was calculated. The Board also received extensive materials on performance, expenses and comparable fund information from Lipper, Inc., an independent mutual fund rating service. Finally, the Independent Directors received and reviewed a considerable amount of information that their independent fee consultant had provided to them. The Independent Directors previously had reviewed these materials during a telephonic meeting earlier in August. They further reviewed these materials extensively among themselves, with their independent legal counsel and independent fee consultant, and with the other Board members at the August 26th and 27th Board meeting, after which the Board considered various factors described below, none of which by itself was considered dispositive. However, the material factors and conclusions that formed the basis for the Board's determination to approve the agreements are discussed separately below.

Nature, Extent and Quality of Services

The Board considered the nature, extent and quality of services provided to all the Funds by IICO, taking into account the vast amount of materials produced by IICO in response to the 15(c) due diligence request list submitted on their behalf by counsel and which they had discussed during a teleconference earlier in the month. They also considered the knowledge they had received from the regular meetings of the Board, including from the materials provided in connection with those meetings, such as the resources and key personnel of IICO as well as the other services provided to the Funds by IICO (such as, managing the quality of execution of portfolio transactions and the selection of broker-dealers for those transactions, monitoring adherence to each Fund's investment restrictions, producing reports, providing support services for the Board and Board committees, communicating with shareholders and overseeing the activities of other service providers, including monitoring compliance with various Fund policie s and procedures and with applicable securities laws and regulations). The Board also noted the accolades that the Funds had received during the year from the financial media, including Barrons. The Board concluded that the nature and extent of the services provided by IICO were appropriate, that the quality of those services had been consistent with quality norms in the industry and that the Funds were likely to benefit from the continued provision of those services.

Benefits from the Relationship with the Funds

The Board next discussed whether IICO derives any other direct or indirect benefit from serving the Funds. The Board considered benefits that accrue to IICO from its respective relationship with a Fund, including the fact that a variety of services are provided by affiliates of IICO, including distribution, shareholder servicing and transfer agency services. After full consideration of these and other factors, the Board concluded that IICO, nor any of its affiliates, receive any additional direct or indirect benefits that would preclude the Board from approving the continuation of the investment advisory contract with IICO.

Economies of Scale

The Board discussed whether economies of scale are being realized by the Funds and whether fee levels reflect those economies of scale for the benefit of the Funds' shareholders. In that context, the Board discussed the current level of the Funds' advisory fee breakpoints and also considered the current and anticipated asset levels of the Funds and the potential for growth in each Fund. The Board also noted that as the assets of the Funds continue to increase, the Funds' expense ratios generally continue to fall. The Board concluded that the Funds' asset size and fee structures did not warrant the restructuring or reevaluation of the fee breakpoints for the Funds at the current time.

Performance of the Funds and Costs of Services Provided

The Board considered, on a Fund by Fund basis, the performance of each Fund and the costs of the services provided. The Board focused particularly on the Ivy Core Equity Fund and the Ivy Capital Appreciation Fund.

Specifically, the Board examined the investment performance of each Fund, including quintile ranking for short- and long-term time periods and each Fund's performance against its peers. The Board also examined the performance of each Fund against its respective Lipper index for the same periods. After extensively reviewing all of the performance information provided, the Board concluded that the Funds' performance in each asset class was acceptable. Although the performance of some of the focus Funds lagged that of their peers or respective Lipper index, the Board recognized that IICO had taken, or was taking, the steps to address that underperformance, and determined to continue to monitor closely the performance of those Funds.

The Board also considered the expenses of each Fund, the expense ratio of each Fund, and the expense limitation arrangements entered into (and with respect to Class E and Class Y shares of certain Funds, the expense limitation agreements proposed to be entered into) by IICO in light of the services provided by IICO. The Board also compared each Fund's expenses, including advisory, distribution and shareholder servicing fees, with the expenses and advisory fees of other investment advisers managing similarly situated funds, as well as the advisory fees that IICO (or an affiliate) charges for providing advisory services to separately managed accounts in the same asset class for certain Funds. In that regard, the Board noted that IICO performs significant additional services for those Funds. The Board also took into account the information on IICO's profitability in managing the Funds, including the methodology used to calculate profitability. The Board finally considered the amount of assets in each Fund, each Fund's average account size and how those factors affect the Funds' expense ratios. After completing this examination, the Independent Directors concluded that each Fund's expenses are appropriate at the current time.

Independent Fee Consultant Review

The Disinterested Directors/Trustees for each of the mutual funds has appointed an independent fee consultant. Posted below is a summary of the written fee evaluation of such consultant for the most recent year.

During August of 2008, and as part of their regularly scheduled meetings, the Disinterested Trustees of Ivy Funds and the Disinterested Directors of Ivy Funds, Inc. (collectively, the "Ivy Funds" and any separate series thereof an "Ivy Fund") reviewed significant information in connection with considering the continuation of existing investment management agreements currently in effect between Ivy Investment Management Company ("IICO") and the Ivy Funds. Pursuant to the Assurance of Discontinuance between Waddell & Reed, Inc., Waddell & Reed Services Company ("WRSCO"), and Waddell & Reed Investment Management Company (collectively, "Waddell") and the Office of the New York Attorney General dated July 10, 2006 ("Assurance of Discontinuance"), the Disinterested Trustees/Directors of the Ivy Funds engaged an independent fee consultant to assist them in evaluating the reasonableness of the management fees charged by IICO, an affiliate of Wad dell, to the Ivy Funds. The independent fee consultant's review addressed the following fee-related factors:

1. The nature and quality of IICO's services to the Ivy Funds, including performance

2. Management fees (including any components thereof) charged by other mutual fund companies for like services

3. Management fees (including any components thereof) charged to institutional and other clients of IICO for like services

4. Costs to IICO and its affiliates of supplying services pursuant to the management fee agreements, excluding any intra-corporate profit

5. Profit margins of IICO and its affiliates from supplying such services

6. Possible economies of scale as a fund grows larger

The following summarizes the findings of the independent fee consultant retained by the Disinterested Trustees/Directors.¹

Summary Findings

The report stated that IICO delivered strong levels of performance and service to the Ivy Funds in relation to its management fees and relative to investment advisers of comparable mutual funds. For the 36 months ended March 31, 2008, when compared to their respective peer groups established by Lipper, Inc. ("Lipper"), approximately 36% of the Ivy Funds were in the top quartile of performance and 60% of the Ivy Funds were in the top two quartiles. The independent fee consultant noted that the Ivy Funds' performance appeared to be grounded in a number of institutional competitive advantages at IICO, including stock selection ability, ability to attract top talent, strategic vision, performance-focused culture, ability to manage smaller AUM funds, ability to serve small account sizes and an effective trading infrastructure.

The report stated that for the 12 months ended March 31, 2008, the total expenses of the Ivy Funds on average were 1% above the mean total expenses of their respective Lipper Expense Group peers and 9% below the mean total expenses for their Lipper Expense Universes. The management fees for the Ivy Funds on average were 0.1% above the mean management fees for their Lipper Expense Groups and 2% above the means for their Lipper Expense Universes. The independent fee consultant noted that the Ivy Funds' small average account size and small fund AUM introduces certain biases in the Lipper analyses that work against Ivy Funds in Lipper expense comparisons and, as a result, the Lipper findings may be considered conservative in that regard. The independent fee consultant found that within the larger Lipper averages the management fees and total expenses of individual Ivy Funds and share classes are reasonable relative to their performance.

The report stated that the management fees IICO charges to the Ivy Funds also are reasonable in relation to the management fees it charges to its other institutional accounts. The report noted that these institutional accounts have different service and infrastructure needs and in addition that, based on industry data, the average spread between management fees charged to the Ivy Funds and those charged to institutional accounts is below the average fee spreads observed at other investment advisers.

The independent fee consultant found that the level of profit earned by IICO from managing the Ivy Funds does not appear to be unreasonable. The report noted that Waddell's overall profitability from managing the Ivy Funds and its other operations is below the mean profitability of other publicly traded peers, but appears adequate to enable IICO to continue to provide quality support to the Ivy Funds and their shareholders.

The report stated that an economy of pricing analysis was undertaken by the independent fee consultant that showed that Ivy Funds incur lower fees and expenses with increasing fund AUM and with increasing average account size which the independent fee consultant believes should benefit Ivy Fund investors as the Ivy Funds mature.

Conclusions

The independent fee consultant concluded that the services provided by IICO and its affiliates and expenses incurred by the Ivy Funds over the year ending August 31, 2008 are reasonable and provide adequate justification for renewal of the Ivy Funds' existing advisory agreements.

      ¹The independent fee consultant's evaluation was based on information provided by IICO, Lipper, Inc., other information providers and other independent analyses. The term "management fees" refers to the actual annual advisory and administrative fees, net of any fee waivers, paid by an Ivy Fund, as a percentage of such fund's average net assets. The term "total expenses" refers to the total annual expenses, net of any fee waivers, paid by an Ivy Fund, as a percentage of such fund's average net assets. Where these terms are used in reference to groups of Ivy Funds, numbers expressed are usually on an asset-weighted basis. Fee and performance data used in screening methodologies are usually for the period ending March 31, 2008.


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 www.sec.gov.

Proxy Voting Records

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

Quarterly Portfolio Schedule Information

A complete schedule of portfolio holdings for the first and third quarters of each fiscal year is filed with the Securities and Exchange Commission (SEC) on the Corporation's Form N-Q, 60 days after the end of the quarter. This form may be obtained in the following ways:

• On the SEC's website at www.sec.gov.
• For review and copy at the SEC's Public Reference Room in Washington, DC. Information on the operations of the Public Reference Room may be obtained by calling 1.800.SEC.0330.
• On the Ivy Funds' website at www.ivyfunds.com.

To All Traditional IRA Planholders:

As required by law, we are hereby providing notice to you that income tax may be withheld automatically from any distribution or withdrawal from a traditional IRA. A Fund is generally required to withhold taxes unless you make a written election not to have taxes withheld. The election may be made on the distribution/withdrawal form provided by Waddell & Reed, Inc. which can be obtained from your Waddell & Reed financial advisor or by submitting Internal Revenue Service Form W-4P. Once made, an election can be revoked by providing written notice to Waddell & Reed, Inc. If you elect not to have tax withheld you may be required to make payments of estimated tax. Penalties may be imposed by the IRS if withholding and estimated tax payments are not adequate.

THE IVY FUNDS FAMILY

Domestic Equity Funds      

Capital Appreciation Fund
Core Equity Fund
Dividend Opportunities Fund
Large Cap Growth Fund
Mid Cap Growth Fund
Small Cap Growth Fund
Small Cap Value Fund
Value Fund

Global/International Funds      

Cundill Global Value Fund
European Opportunities Fund
International Balanced Fund
International Core Equity Fund
International Growth Fund
Managed European/Pacific Fund
Managed International Opportunities Fund
Pacific Opportunities Fund

Specialty Funds      

Asset Strategy Fund
Balanced Fund
Energy Fund
Global Natural Resources Fund
Real Estate Securities Fund
Science and Technology Fund

Fixed Income Funds      

Bond Fund
Global Bond Fund
High Income Fund
Limited-Term Bond Fund
Money Market Fund
Mortgage Securities Fund
Municipal Bond Fund

1.800.777.6472
Visit us online at www.ivyfunds.com

The Ivy Funds are managed by Ivy Investment Management Company and distributed by its subsidiary, Ivy Funds Distributor, Inc.

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

WRR3000SA (9-08)

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.
(a) See Item 1 Shareholder Report.
(b) Not Applicable
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant's board of directors.
ITEM 11. CONTROLS AND PROCEDURES.
(a)	The Registrant's Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, have concluded that such controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective and adequately designed to ensure that information required to be disclosed by the Registrant in its reports that it files or submits is accumulated and communicated to the Registrant's management, including the Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
(b)	There were no significant changes in the registrant's internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940, as amended) that occurred during the registrant's second fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Required in annual report only.
(a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)).
Attached hereto as Exhibit 99.CERT.
(b) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)).
Attached hereto as Exhibit 99.906CERT.

SIGNATURES

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

Ivy Funds, Inc.

(Registrant)

By	/s/Mara D. Herrington
	Mara D. Herrington, Vice President and Secretary
Date: December 5, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By	/s/Henry J. Herrmann
	Henry J. Herrmann, Principal Executive Officer
Date: December 5, 2008
By	/s/Joseph W. Kauten
	Joseph W. Kauten, Principal Financial Officer
Date: December 5, 2008

By	/s/Henry J. Herrmann
	Henry J. Herrmann, President and Principal Executive Officer
Date: December 5, 2008
By	/s/Joseph W. Kauten
	Joseph W. Kauten, Vice President and Principal Financial Officer
Date: December 5, 2008