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    Quarterly Fund Commentary


    Delaware Ivy Global Growth Fund (prospectus)
    December 31, 2016


    Manager(s):
    Chace Brundige, CFA
    Aditya Kapoor, CFA
    Charles John

    Market Sector Update

    • After falling the first five weeks of the quarter, global equity markets rallied into quarter-end, closing the period up more than 1%. In developed markets, the U.S. outperformed while Europe and Japan underperformed the index. Strong local currency returns in Europe and Japan were negatively impacted by a material strengthening in the U.S. dollar following the U.S. Presidential election. Emerging markets underperformed as well in the period, with material weakness in China and India.
    • Value materially outperformed growth globally during the period. Risk appetite increased following the U.S. election in November as consumer and business confidence improved. Expectations for improving economic growth drove U.S. Treasury yields higher and bond prices across many global markets lower.
    • Financials were by far the best performing sector worldwide, with U.S. stocks in the group driving the largest outperformance. Energy was also a strong performer, benefiting from higher commodity values. Consumer staples and health care were the two largest underperformers as pro-cyclical stocks outperformed.

    Portfolio Strategy

    • The Fund underperformed the benchmark during the period. The largest contribution to negative returns was the Fund’s bias towards growth stocks relative to the benchmark. Growth underperformed core as a category globally by more than 6% in the quarter.
    • Stock selection in information technology, health care and consumer discretionary negatively impacted returns. Stock selection in energy and industrials were positive contributors.
    • With continued political uncertainty, we have made an effort to move sector weightings closer to benchmark weights particularly in sectors most at risk for politics impacting business fundamentals. As a result, we continued reducing health care exposure and added to the underweight financial sector.

    Outlook

    • While we expect stable economic growth from Europe and Japan and a slightly better global economic growth environment, a number of uncertainties exist. Populist political movements continue to pose risks in many parts of the world. Europe still has to manage through the process of Britain’s exit from the European Union (EU), as well as elections in many countries where populism could gain traction (including France and Italy).
    • Discussion surrounding the U.S. exiting or renegotiating global trade agreements and possibly implementing a border tax on imported goods could have far reaching implications. Despite uncertainties in the market, we continue to believe our portfolio of strong global growers with sustainable competitive advantages and unique products that serve large end markets can drive shareholder value over time.

    The opinions expressed in this commentary are those of the Fund’s manager and are current through Dec. 31, 2016. The manager’s views are subject to change at any time based on market and other conditions, and no forecasts can be guaranteed. Past performance is not a guarantee of future results.

    Risk factors. The value of the Fund’s shares will change, and you can lose money on your investment. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. International investing involves additional risks including currency fluctuations, political or economic conditions affecting the foreign country, and differences in accounting standards and foreign regulations. These risks are magnified in emerging markets. These and other risks are more fully described in the Fund’s prospectus.

    IVY INVESTMENTSSM refers to the financial services offered by Ivy Distributors, Inc., a FINRA member broker dealer and the distributor of IVY FUNDS® mutual funds, and those financial services offered by its affiliates.

    Before investing, investors should consider carefully the investment objectives, risks, charges and expenses of a mutual fund. This and other important information is contained in the prospectus and summary prospectus, which can be obtained from a financial advisor or at www.ivyinvestments.com. Read it carefully before investing.

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