IVY FUND, 485BPOS, 1997-04-29

IVY FUND
485BPOS, 1997-04-29

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As filed with the Securities and Exchange
Commission on April 29,
1997
(File No. 2-17613)

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933 Post-Effective Amendment No. 93
[ X ]

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 Amendment No. [ X
]

IVY FUND
(Exact Name of Registrant as Specified in
Charter)

Via Mizner Financial Plaza
700 South Federal Highway - Suite 300
Boca Raton, Florida 33432
(Address of Principal Executive Offices)

Registrant's Telephone Number: (800)
777-6472

C. William Ferris
Mackenzie Investment Management Inc.
Via Mizner Financial Plaza
700 South Federal Highway - Suite 300
Boca Raton, Florida 33432
(Name and Address of Agent for Service)

Copies to:

Joseph R. Fleming, Esq.
Dechert Price & Rhoads
Ten Post Office Square, South - Suite 1230
Boston, MA 02109

[ X ] It is proposed that this filing become
effective on April 30, 1997 pursuant to
paragraph (b) of Rule 485.

The Registrant has elected to register an indefinite
number of shares of beneficial interest under the
Securities Act of 1933 pursuant to Rule 24f-2 under the
Investment Company Act of 1940; accordingly, no fee is
payable herewith. The Registrant filed on February 20,
1997 its notice pursuant to Rule 24f-2 for the
Registrant's most recent fiscal year ended December 31, 1996.

The total number of pages is __________.
The exhibit index is on page __________.

THIS POST-EFFECTIVE AMENDMENT NO. 93 IS BEING FILED IN
ORDER TO UPDATE THE FINANCIAL AND RELATED INFORMATION
FOR THESE SIXTEEN

FUNDS.

IVY FUND

CROSS REFERENCE SHEET

Post-Effective Amendment No. 93 contains (i) the
Prospectus and Statement of Additional Information to
be used with Ivy Bond Fund, Ivy Emerging Growth Fund,
Ivy Growth Fund and Ivy Growth with Income Fund; (ii)
the Prospectus and Statement of Additional Information
to be used with Ivy Asia Pacific Fund, Ivy Canada Fund,
Ivy China Region Fund, Ivy Global Fund, Ivy Global Natural
Resources Fund, Ivy Global Science & Technology Fund, Ivy
International Fund, Ivy International Small Companies Fund,
Ivy Latin America Strategy Fund and Ivy New Century
Fund; (iii) the Prospectus and Statement of Additional
Information to be used with Ivy International Bond
Fund; and the Prospectus and Statement of Additional
Information to be used with Ivy Money Market Fund, all
sixteen series of Ivy Fund (the "Trust").

Items Required by Form N-1A

PART A:

1 COVER PAGE: Cover Page

2 SYNOPSIS: Not Applicable

3 CONDENSED FINANCIAL INFORMATION: Schedule of Fees

4 GENERAL DESCRIPTION OF REGISTRANT: Investment
Objectives and Policies; Risk Factors and
Investment Techniques

5 MANAGEMENT OF THE FUND: Organization and
Management of the Fund; Investment Manager

6 CAPITAL STOCK AND OTHER SECURITIES: Dividends and
Taxes

7 PURCHASE OF SECURITIES BEING OFFERED: How to Buy
Shares; How Your Purchase Price is Determined; How
the Fund Values its Shares

8 REDEMPTION OR REPURCHASE: How to Redeem Shares;
Minimum Account Balance Requirements; Tax
Identification Number; Certificates; Exchange
Privilege; Reinvestment Privilege

9 PENDING LEGAL PROCEEDINGS: Not Applicable

PART B:

10 COVER PAGE: Cover Page

11 TABLE OF CONTENTS: Table of Contents

12 GENERAL INFORMATION AND HISTORY: Investment
Objectives and Policies

13 INVESTMENT OBJECTIVES AND POLICIES: Investment
Objectives and Policies; Investment Restrictions;
Additional Restrictions

14 MANAGEMENT OF THE FUND: Trustees and Officers;
Investment Advisory and Other Services

15 CONTROL PERSONS AND PRINCIPAL HOLDERS OF
SECURITIES: Trustees and Officers; Capitalization
and Voting Rights

16 INVESTMENT ADVISORY AND OTHER SERVICES:
Investment Advisory and Other Services

17 BROKERAGE ALLOCATION AND OTHER PRACTICES:
Brokerage Allocation; Portfolio Turnover

18 CAPITAL STOCK AND OTHER SECURITIES:
Capitalization and Voting Rights

19 PURCHASE, REDEMPTION AND PRICING OF SECURITIES
BEING OFFERED: Net Asset Value; Redemptions

20 TAX STATUS: Taxation

21 UNDERWRITERS: Investment Advisory and Other
Services

22 CALCULATION OF PERFORMANCE DATA: Performance
Information

23 FINANCIAL STATEMENTS: Financial Statements

<PAGE> 1
April 30, 1997

Ivy
U.S. Equity
and Fixed Income
Funds

- ----------------------
Prospectus
- ----------------------

Ivy Management, Inc.
Via Mizner Financial
Plaza
700 South Federal Hwy.
Boca Raton, FL 33432
1-800-456-5111

THROUGHOUT THE
CENTURIES,
THE CASTLE KEEP HAS
BEEN A SOURCE
OF LONG-RANGE VISION
AND STRATEGIC
ADVANTAGE.

Ivy Fund (the "Trust") is a registered investment company currently
consisting of sixteen separate portfolios. Four of these portfolios, as
identified below (the "Funds"), are described in this Prospectus. Each Fund
has its own investment objectives and policies, and your interest is limited
to the Fund in which you own shares.
The four Ivy U.S. equity and fixed income funds are:
Ivy Bond Fund
Ivy Emerging Growth Fund
Ivy Growth Fund
Ivy Growth with Income Fund
This Prospectus sets forth concisely the information about the Funds that a
prospective investor should know before investing. Please read it carefully and
retain it for future reference. Additional information about the Funds is
contained in the Statement of Additional Information for the Funds dated April
30, 1997 (the "SAI"), which has been filed with the Securities and Exchange
Commission ("SEC") and is incorporated by reference into this Prospectus. The
SAI is available upon request and without charge from the Trust at the
Distributor's address and telephone number below. The SEC maintains a web site
(http://www.sec.gov) that contains the SAI and other material incorporated by
reference.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

TABLE OF CONTENTS
<TABLE>
<S> <C>
Expense Information . . . . . . . . . . . . . . . . 2
The Funds' Financial Highlights . . . . . . . . . . 5
Investment Objectives and Policies . . . . . . . . 9
Risk Factors and Investment Techniques . . . . . . 10
Organization and Management of the Funds . . . . . 12
Investment Manager . . . . . . . . . . . . . . . . 12
Fund Administration and Accounting . . . . . . . . 13
Transfer Agent . . . . . . . . . . . . . . . . . . 13
Alternative Purchase Arrangements . . . . . . . . . 13
Dividends and Taxes . . . . . . . . . . . . . . . . 13
Performance Data . . . . . . . . . . . . . . . . . 14
How to Buy Shares . . . . . . . . . . . . . . . . . 14
How Your Purchase Price is Determined . . . . . . . 15
How Each Fund Values Its Shares . . . . . . . . . . 15
Initial Sales Charge Alternative-Class A Shares . . 15
Contingent Deferred Sales Charge-Class A Shares . . 16
Qualifying for a Reduced Sales Charge . . . . . . . 16
Contingent Deferred Sales Charge Alternative-
Class B and Class C Shares . . . . . . . . . . 17
How to Redeem Shares . . . . . . . . . . . . . . . 18
Minimum Account Balance Requirements . . . . . . . 19
Signature Guarantees . . . . . . . . . . . . . . . 19
Choosing a Distribution Option . . . . . . . . . . 19
Tax Identification Number . . . . . . . . . . . . . 19
Certificates . . . . . . . . . . . . . . . . . . . 19
Exchange Privilege . . . . . . . . . . . . . . . . 20
Reinvestment Privilege . . . . . . . . . . . . . . 20
Systematic Withdrawal Plan . . . . . . . . . . . . 20
Automatic Investment Method . . . . . . . . . . . . 21
Consolidated Account Statements . . . . . . . . . . 21
Retirement Plans . . . . . . . . . . . . . . . . . 21
Shareholder Inquiries . . . . . . . . . . . . . . . 21
</TABLE>

<TABLE>
<S> <C> <C> <C>
BOARD OF TRUSTEES OFFICERS TRANSFER AGENT INVESTMENT MANAGER
John S. Anderegg, Jr. Michael G. Landry, Chairman Ivy Mackenzie Ivy Management, Inc.
Paul H. Broyhill Keith J. Carlson, President Services Corp. 700 South Federal Highway
Keith J. Carlson James W. Broadfoot, Vice President P.O. Box 3022 Boca Raton, FL 33432
Stanley Channick C. William Ferris, Boca Raton, FL 33431-0922 1-800-456-5111
Frank W. DeFriece, Jr. Secretary/Treasurer 1-800-777-6472
Roy J. Glauber DISTRIBUTOR
Michael G. Landry LEGAL COUNSEL AUDITORS Ivy Mackenzie
Joseph G. Rosenthal Dechert Price & Rhoads Coopers & Lybrand L.L.P. Distributors, Inc.
Richard N. Silverman Boston, MA Ft. Lauderdale, FL Via Mizner Financial Plaza
J. Brendan Swan 700 South Federal Highway
CUSTODIAN Boca Raton, FL 33432
Brown Brothers Harriman & Co. 1-800-456-5111
Boston, MA
</TABLE>
<PAGE> 2

EXPENSE INFORMATION

The tables and examples below are designed to assist you in understanding
the various costs and expenses that you will bear directly or indirectly as an
investor in each Fund. The information is based on each Funds' expenses during
fiscal year 1996.

SHAREHOLDER TRANSACTION EXPENSES

<TABLE>
<CAPTION>
MAXIMUM SALES LOAD MAXIMUM CONTINGENT
IMPOSED ON PURCHASES DEFERRED SALES CHARGE
(AS A % OF (AS A % OF ORIGINAL
OFFERING PRICE) PURCHASE PRICE)
-------------------- ---------------------
<S> <C> <C>
IVY BOND FUND
Class A................................................... 4.75%(1) None(2)
Class B................................................... None 5.00%(3)
Class C................................................... None 1.00%(4)
Class I................................................... None None
IVY EMERGING GROWTH FUND
Class A................................................... 5.75%(1) None(2)
Class B................................................... None 5.00%(3)
Class C................................................... None 1.00%(4)
IVY GROWTH FUND
Class A................................................... 5.75%(1) None(2)
Class B................................................... None 5.00%(3)
Class C................................................... None 1.00%(4)
IVY GROWTH WITH INCOME FUND
Class A................................................... 5.75%(1) None(2)
Class B................................................... None 5.00%(3)
Class C................................................... None 1.00%(4)
</TABLE>

None of the Funds charges a redemption fee, an exchange fee, or a sales load on
reinvested dividends.
- ---------------

<TABLE>
<S> <C>
(1) Class A shares may be purchased under a variety of plans
that provide for the reduction or elimination of the sales
charge.
(2) A contingent deferred sales charge ("CDSC") may apply to the
redemption of Class A shares that are purchased without an
initial sales charge. See "Purchases of Class A Shares at
Net Asset Value" and "Contingent Deferred Sales
Charge -- Class A Shares."
(3) The maximum CDSC on Class B shares applies to redemptions
during the first year after purchase. The charge declines to
4% during the second year; 3% during the third and fourth
years; 2% during the fifth year; 1% during the sixth year;
and 0% in the seventh year and thereafter.
(4) The CDSC on Class C shares applies to redemptions during the
first year after purchase.
</TABLE>

2
<PAGE> 3

ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
12B-1 SERVICE/ TOTAL FUND
MANAGEMENT DISTRIBUTION OTHER OPERATING
FEES FEES EXPENSES EXPENSES
---------- -------------- -------- ----------
<S> <C> <C> <C> <C>
IVY BOND FUND
Class A................................................... 0.75% 0.25% 0.56% 1.56%
Class B................................................... 0.75% 1.00%(2) 0.54% 2.29%
Class C(1)................................................ 0.75% 1.00%(2) 0.60% 2.35%
Class I................................................... 0.75% 0.00% 0.47%(3) 1.22%
IVY EMERGING GROWTH FUND
Class A................................................... 0.85% 0.25% 0.66% 1.76%
Class B................................................... 0.85% 1.00%(2) 0.67% 2.52%
Class C(1)................................................ 0.85% 1.00%(2) 0.67% 2.52%
IVY GROWTH FUND
Class A................................................... 0.85% 0.05%(4) 0.55% 1.45%
Class B................................................... 0.85% 1.00%(2) 0.52% 2.37%
Class C(1)................................................ 0.85% 1.00%(2) 0.59% 2.44%
IVY GROWTH WITH INCOME FUND
Class A................................................... 0.75%(5) 0.20%(4) 0.76% 1.71%
Class B................................................... 0.75%(5) 1.00%(2) 0.70% 2.45%
Class C(1)................................................ 0.75%(5) 1.00%(2) 1.17% 2.92%
</TABLE>

- ---------------

<TABLE>
<S> <C>
(1) The inception date for Class C shares was April 30, 1996.
The expense ratios shown are estimates based on amounts
incurred by the Fund during the year ended December 31,
1996. Class C shares of Ivy Growth with Income Fund
outstanding as of April 29, 1996 were redesignated Class D
shares. Class D shares are not available for sale.
(2) Long-term investors may, as a result of the Fund's 12b-1
fees, pay more than the economic equivalent of the maximum
front-end sales charge permitted by the Rules of Fair
Practice of the National Association of Securities Dealers,
Inc. ("NASD").
(3) "Other Expenses" of Class I shares are lower than such
expenses for Class A, Class B and Class C shares. See "Fund
Administration and Accounting" and "Transfer Agent."
(4) Rule 12b-1 Service Fees paid by Class A shares may increase,
but are subject to a maximum of 0.25%. See "Alternative
Purchase Arrangements."
(5) Effective January 1, 1997, management fees for Ivy Growth
with Income Fund were reduced to 0.75% of the Fund's average
net assets. Management Fees and Total Fund Operating
Expenses reflect what management fees and expenses for the
year ended December 31, 1996 would have been had the
management fee reduction been in effect.
</TABLE>

3
<PAGE> 4

EXAMPLES

The following tables list the expenses an investor would pay on a $1,000
investment, assuming (1) 5% annual return and (2) unless otherwise noted,
redemption at the end of each time period. These examples further assume
reinvestment of all dividends and distributions, and that the percentage amounts
under "Total Fund Operating Expenses" (above) remain the same each year. THE
EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE HIGHER OR LOWER THAN THOSE SHOWN.

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
IVY BOND FUND
Class A*.................................................. $63 $ 94 $128 $224
Class B................................................... $73(1) $102(2) $143(3) $244(4)
Class B (no redemption)................................... $23 $ 72 $123 $244(4)
Class C................................................... $34(5) $ 73 $126 $269
Class C (no redemption)................................... $24 $ 73 $126 $269
Class I***................................................ $12 $ 39 $ 67 $148
IVY EMERGING GROWTH FUND
Class A**................................................. $74 $110 $147 $253
Class B................................................... $76(1) $108(2) $154(3) $267(4)
Class B (no redemption)................................... $26 $ 78 $134 $267(4)
Class C................................................... $36(5) $ 78 $134 $286
Class C (no redemption)................................... $26 $ 78 $134 $286
IVY GROWTH FUND
Class A**................................................. $71 $101 $132 $221
Class B................................................... $74(1) $104(2) $147(3) $248(4)
Class B (no redemption)................................... $24 $ 74 $127 $248(4)
Class C................................................... $35(5) $ 76 $130 $278
Class C (no redemption)................................... $25 $ 76 $130 $278
IVY GROWTH WITH INCOME FUND
Class A**................................................. $75 $111 $150 $258
Class B................................................... $76(1) $109(2) $156(3) $270(4)
Class B (no redemption)................................... $26 $ 79 $136 $270(4)
Class C................................................... $40(5) $ 93 $159 $334
Class C (no redemption)................................... $30 $ 93 $159 $334
</TABLE>

- ---------------

<TABLE>
<S> <C>
* Assumes deduction of the maximum 4.75% initial sales charge
at the time of purchase and no deduction of a CDSC at the
time of redemption.
** Assumes deduction of the maximum 5.75% initial sales charge
at the time of purchase and no deduction of a CDSC at the
time of redemption.
*** Class I shares are not subject to an initial sales charge at
the time of purchase, nor are they subject to the deduction
of a CDSC at the time of redemption.
(1) Assumes deduction of a 5% CDSC at the time of redemption.
(2) Assumes deduction of a 3% CDSC at the time of redemption.
(3) Assumes deduction of a 2% CDSC at the time of redemption.
(4) Assumes conversion to Class A shares at the end of the
eighth year, and therefore reflects Class A expenses for
years nine and ten.
(5) Assumes deduction of a 1% CDSC at the time of redemption.
</TABLE>

The purpose of the foregoing tables is to assist you in understanding the
various costs and expenses that an investor in each Fund will bear directly or
indirectly. The information presented in the tables does not reflect the charge
of $10 per transaction that would apply if a shareholder elects to have
redemption proceeds wired to his or her bank account. For a more detailed
discussion of the Funds' fees and expenses, see the following sections of this
Prospectus: "Organization and Management of the Funds," "Initial Sales Charge
Alternative -- Class A Shares," and "Contingent Deferred Sales Charge
Alternative -- Class B and Class C Shares," and the following section of the
SAI: "Investment Advisory and Other Services."

4
<PAGE> 5

THE FUNDS' FINANCIAL HIGHLIGHTS

Unless otherwise noted, the tables that follow are for fiscal periods ending
December 31 of each year. The accounting firm of Coopers & Lybrand L.L.P. has
audited Ivy Bond Fund and Ivy Emerging Growth Fund since inception, and Ivy
Growth Fund and Ivy Growth with Income Fund since December 31, 1992. Their
report is included in the Funds' Annual Reports, which are incorporated by
reference into the SAI. For periods prior to December 31, 1994, Ivy Bond Fund
was known as Mackenzie Fixed Income Trust (d/b/a Ivy Bond Fund). The information
for Ivy Growth Fund and Ivy Growth with Income Fund for fiscal periods prior to
December 31, 1992 was audited by other independent accountants. The Funds'
Annual Reports contain additional information about each Fund's performance,
including a comparison to an appropriate securities index. For a copy of your
Fund's Annual Report, call 1-800-777-6472.

Expense and income ratios have been annualized for periods of less than one
year. Beginning December 31, 1996, portfolio turnover rates have not been
annualized for periods of less than one year. Total returns do not reflect sales
charges, and are not annualized for periods of less than one year (unless
otherwise noted). In addition, for fiscal years beginning on or after September
1, 1995, registered investment companies are required to disclose average
commission rates per share for security trades on which commissions are charged.
This amount may vary from period to period and fund to fund depending on the mix
of trades executed in various markets where trading practices and commission
rate structures may differ.

As of December 31, 1996, no Class I shares of Ivy Bond Fund had been issued.
Accordingly, no financial information for these shares is presented below.

IVY BOND FUND
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------
1996 1995 1994(A) 1994(B) 1993(B) 1992(B)
SELECTED PER SHARE DATA -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....................$ 9.78 $ 9.01 $ 9.38 $ 10.34 $ 9.95 $ 9.61
-------- -------- -------- -------- -------- --------
Income from investment operations
Net investment income................................. .72 .67(e) .33(e) .63 .55 .63(e)
Net realized and unrealized gain (loss) on investments .03 .84 (.29) (.60) 1.00 .73
-------- -------- -------- -------- -------- --------
Total from investment operations................... .75 1.51 .04 .03 1.55 1.36
-------- -------- -------- -------- -------- --------
Less distributions
From net investment income............................ .72 .63 .32 .61 .64 .63
In excess of net investment income.................... .01 -- -- -- -- --
From net realized gain................................ -- -- -- .38 .52 .25
In excess of net realized gain........................ -- -- .09 -- -- --
From capital paid-in.................................. -- .11 -- -- -- .14
-------- -------- -------- -------- -------- --------
Total distributions................................ .73 .74 .41 .99 1.16 1.02
-------- -------- -------- -------- -------- --------
Net asset value, end of period..........................$ 9.80 $ 9.78 $ 9.01 $ 9.38 $ 10.34 $ 9.95
======== ======== ======== ======== ======== ========
Total return(%)......................................... 8.06 17.41 .43 0.00 16.29 14.77
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands)................$ 97,881 $108,840 $110,232 $120,073 $132,721 $102,328
Ratio of expenses to average
net assets
With expense reimbursement(%).......................... -- 1.54 1.50 -- -- 1.50
Without expense reimbursement(%)....................... 1.56 1.54 1.52 1.45 1.49 1.55
Ratio of net investment income to average net assets(%). 7.36 7.09(e) 6.92(e) 6.19 6.42 6.92(e)
Portfolio turnover rate(%).............................. 90 93 44 78 134 129

<CAPTION>
CLASS A
---------------------------------------------------
1990(B) 1989(B) 1988(B) 1987(B)
SELECTED PER SHARE DATA ----------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 10.59 $ 9.99 $ 9.39 $ 9.35
----------- ------ ------ ------
Income from investment operations
Net investment income..................................... .65(e) .77(e) .58(e) .36(e)
Net realized and unrealized gain (loss) on investments.... (.40) .75 .81 --
----------- ------ ------ ------
Total from investment operations....................... .25 1.52 1.39 .36
----------- ------ ------ ------
Less distributions
From net investment income................................ .65 .79 .60 .32
In excess of net investment income........................ -- -- -- --
From net realized gain.................................... -- -- .19 --
In excess of net realized gain............................ -- -- -- --
From capital paid-in...................................... .35 .13 -- --
----------- ------ ------ ------
Total distributions.................................... 1.00 .92 .79 .32
----------- ------ ------ ------
Net asset value, end of period.............................. $ 9.84 $10.59 $ 9.99 $ 9.39
=========== ====== ====== ======
Total return(%)............................................. 2.54 16.12 16.31 2.92
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands).................... $ 70,670 $20,753 $5,075 $ 217
Ratio of expenses to average
net assets
With expense reimbursement(%).............................. 1.36 .20 1.37 1.00
Without expense reimbursement(%)........................... 1.73 2.04 4.61 32.89
Ratio of net investment income to average net assets(%)..... 6.64(e) 8.08(e) 5.15(e) 3.80(e)
Portfolio turnover rate(%).................................. 0 0 145 0
</TABLE>

<TABLE>
<CAPTION>
CLASS B CLASS C
-------------------------------------------------- -------
1996 1995 1994(A) 1994(C) 1996(D)
SELECTED PER SHARE DATA ------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $ 9.78 $ 9.01 $ 9.38 $ 9.82 $ 9.44
------ ------ ------ ------ ------
Income (loss) from investment operations
Net investment income....................... .64 .60(e) .30(e) .10 .39
Net realized and unrealized gain (loss) on
investments................................ .04 .84 (.29) (.32) .43
------ ------ ------ ------ ------
Total from investment operations......... .68 1.44 .01 (.22) .82
------ ------ ------ ------ ------
Less distributions
From net investment income.................. .64 .56 .29 .14 .39
In excess of net investment income.......... .02 -- -- -- .05
From net realized gain...................... -- -- -- .08 --
In excess of net realized gain.............. -- -- .09 -- --
From capital paid-in........................ -- .11 -- -- --
------ ------ ------ ------ ------
Total distributions...................... .66 .67 .38 .22 .44
------ ------ ------ ------ ------
Net asset value, end of period................ $ 9.80 $ 9.78 $ 9.01 $ 9.38 $ 9.82
====== ====== ====== ====== ======
Total return(%)............................... 7.25 16.54 .06 (2.24) 8.81
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands)...... $5,300 $5,184 $2,420 $ 761 $ 618
Ratio of expenses to average net assets
With expense reimbursement(%)................ -- 2.29 2.25 -- --
Without expense reimbursement(%)............. 2.29 2.29 2.27 2.20 2.35
Ratio of net investment income to average net
assets(%).................................... 6.62 6.34(e) 6.17(e) 5.44 6.56
Portfolio turnover rate(%).................... 90 93 44 78 90
</TABLE>

- ---------------

<TABLE>
<S> <C>
(a) For the six months ended December 31, 1994.
(b) For the year ended June 30.
(c) From April 1, 1994 (commencement of operations) to June 30,
1994.
(d) From April 30, 1996 (commencement of operations) to December
31, 1996.
(e) Net investment income is net of expenses reimbursed by Ivy
Management, Inc. ("IMI").
</TABLE>

5
<PAGE> 6

IVY EMERGING GROWTH FUND

<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------
1996 1995 1994 1993(A)
SELECTED PER SHARE DATA ------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period........... $ 24.12 $ 18.38 $ 17.93 $ 10.00
------- ------- ------- -------
Income from investment operations
Net investment loss......................... (.35) (.24) (.24)(b) (.07)(b)
Net realized and unrealized gain on
investments................................ 4.84 7.90 .82 8.29
------- ------- ------- -------
Total from investment operations........... 4.49 7.66 .58 8.22
------- ------- ------- -------
Less distributions
From net realized gain...................... 2.07 1.92 -- .29
From capital paid-in........................ -- -- .13 --
------- ------- ------- -------
Total distributions........................ 2.07 1.92 .13 .29
------- ------- ------- -------
Net asset value, end of period................. $ 26.54 $ 24.12 $ 18.38 $ 17.93
======= ======= ======= =======
Total return(%)................................ 18.52 42.07 3.29 45.33(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands)....... $55,944 $39,456 $21,493 $14,212
Ratio of expenses to average net assets
With expense reimbursement(%)................. -- -- 2.20 1.93
Without expense reimbursement(%).............. 1.76 1.95 2.22 2.33
Ratio of net investment loss to average net
assets(%)..................................... (1.31) (1.39) (1.72)(b) (1.30)(b)
Portfolio turnover rate(%)..................... 68 86 67 41
Average commission rate........................ $ .0601 N/A N/A N/A
</TABLE>

<TABLE>
<CAPTION>
CLASS B CLASS C
--------------------------------------------------- -------
1996 1995 1994 1993(D) 1996(E)
SELECTED PER SHARE DATA ------- ------- ------ ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........... $ 24.12 $ 18.38 $17.93 $18.21 $29.69
------- ------- ------ ------ ------
Income (loss) from investment operations
Net investment loss......................... (.40) (.35) (.29)(b) (.04)(b) (.14)
Net realized and unrealized gain (loss) on
investments................................ 4.68 7.85 .74 .03 (1.19)
------- ------- ------ ------ ------
Total from investment operations........... 4.28 7.50 .45 (.01) (1.33)
------- ------- ------ ------ ------
Less distributions
From net realized gain...................... 2.07 1.76 -- .27 2.07
------- ------- ------ ------ ------
Total distributions........................ 2.07 1.76 -- .27 2.07
------- ------- ------ ------ ------
Net asset value, end of period................. $ 26.33 $ 24.12 $18.38 $17.93 $26.29
======= ======= ====== ====== ======
Total return(%)................................ 17.65 41.03 2.51 .05 (4.48)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands)....... $35,321 $13,985 $5,015 $1,216 $4,018
Ratio of expenses to average net assets
With expense reimbursement(%)................. -- -- 2.95 2.68 --
Without expense reimbursement(%).............. 2.52 2.70 2.97 3.08 2.52
Ratio of net investment loss to average net
assets(%)..................................... (2.07) (2.14) (2.47)(b) (2.05)(b) (2.07)
Portfolio turnover rate(%)..................... 68 86 67 41 68
Average commission rate........................ $ .0601 N/A N/A N/A $.0601
</TABLE>

- ---------------

<TABLE>
<S> <C>
(a) From March 3, 1993 (commencement of operations) to December
31, 1993.
(b) Net investment loss is net of expenses reimbursed by IMI.
(c) Total return from April 30, 1993 (when first offered for
public sale) to December 31, 1993.
(d) From October 23, 1993 (commencement of operations) to
December 31, 1993.
(e) From April 30, 1996 (commencement of operations) to December
31, 1996.
</TABLE>

6
<PAGE> 7

IVY GROWTH FUND
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
SELECTED PER SHARE DATA -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period... $ 16.75 $ 13.91 $ 15.14 $ 14.98 $ 16.91 $ 14.41 $ 15.57
-------- -------- -------- -------- -------- -------- --------
Income (loss) from investment
operations
Net investment income............... .02 .05(a) .05(a) .10(a) .17(a) .27 .31
Net realized and unrealized gain
(loss) on investment
transactions....................... 2.86 3.73 (.49) 1.74 .70 4.12 (.90)
-------- -------- -------- -------- -------- -------- --------
Total from investment operations... 2.88 3.78 (.44) 1.84 .87 4.39 (.59)
-------- -------- -------- -------- -------- -------- --------
Less distributions
From net investment income.......... .02 .02 .05 .10 .15 .27 .33
In excess of net investment
income............................. .11 -- -- -- -- -- --
From net realized gain.............. 1.74 .89 .74 1.58 2.65 1.62 .23
In excess of net realized gain...... -- .03 -- -- -- -- --
From capital paid-in................ -- -- -- -- -- -- .01
-------- -------- -------- -------- -------- -------- --------
Total distributions................ 1.87 .94 .79 1.68 2.80 1.89 .57
-------- -------- -------- -------- -------- -------- --------
Net asset value, end of period......... $ 17.76 $ 16.75 $ 13.91 $ 15.14 $ 14.98 $ 16.91 $ 14.41
======== ======== ======== ======== ======== ======== ========
Total return(%)........................ 17.22 27.33 (2.97) 12.29 5.21 30.76 (3.76)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)............................ $314,908 $289,954 $231,446 $268,533 $226.068 $231,706 $185,511
Ratio of expenses to average net assets
With expense reimbursement(%)......... 1.45 1.59 1.38 1.33 1.32 -- --
Without expense reimbursement(%)...... 1.45 1.60 1.49 1.43 1.40 1.29 1.29
Ratio of net investment income to
average net assets(%)................. .32(a) .32(a) .64(a) .98(a) 1.60 2.10
Portfolio turnover rate(%)............. 72 41 39 77 138 79 67
Average commission rate................ $ .0439 N/A N/A N/A N/A N/A N/A

<CAPTION>
CLASS A
------------------------------------
1989 1988 1987
SELECTED PER SHARE DATA -------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of period... $ 13.21 $ 12.09 $ 13.44
-------- -------- --------
Income (loss) from investment
operations
Net investment income............... .44 .40 .32
Net realized and unrealized gain
(loss) on investment
transactions....................... 3.16 1.10 (.46)
-------- -------- --------
Total from investment operations... 3.60 1.50 (.14)
-------- -------- --------
Less distributions
From net investment income.......... .44 .38 .91
In excess of net investment
income............................. -- -- --
From net realized gain.............. .80 -- .30
In excess of net realized gain...... -- -- --
From capital paid-in................ -- -- --
-------- -------- --------
Total distributions................ 1.24 .38 1.21
-------- -------- --------
Net asset value, end of period......... $ 15.57 $ 13.21 $ 12.09
======== ======== ========
Total return(%)........................ 27.24 12.40 (1.87)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)............................ $197,789 $172,163 $173,159
Ratio of expenses to average net assets
With expense reimbursement(%)......... -- -- --
Without expense reimbursement(%)...... 1.33 1.35 1.27
Ratio of net investment income to
average net assets(%)................. 2.70 2.80 2.40
Portfolio turnover rate(%)............. 86 84 74
Average commission rate................ N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
CLASS B
----------------------------------
1996 1995 1994
SELECTED PER SHARE DATA -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....................................................... $ 16.75 $ 13.91 $ 15.14
-------- -------- --------
Income (loss) from investment operations
Net investment loss(a).................................................................. (.13) (.08) (.04)
Net realized and unrealized gain (loss) on investment transactions...................... 2.81 3.71 (.54)
-------- -------- --------
Total from investment operations....................................................... 2.68 3.63 (.58)
-------- -------- --------
Less distributions
From net investment income.............................................................. -- -- --
In excess of net investment income...................................................... -- -- --
From net realized gain.................................................................. 1.74 .73 .52
In excess of net realized gain.......................................................... -- .06 .13
-------- -------- --------
Total distributions.................................................................... 1.74 .79 .65
-------- -------- --------
Net asset value, end of period............................................................. $ 17.69 $ 16.75 $ 13.91
======== ======== ========
Total return(%)............................................................................ 16.02 26.13 (3.90)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands)................................................... $ 3,850 $ 2,669 $ 1,399
Ratio of expenses to average net assets
With expense reimbursement(%)............................................................. 2.37 2.55 2.34
Without expense reimbursement(%).......................................................... 2.37 2.56 2.45
Ratio of net investment loss to average net assets(%)(a)................................... (.79) (.64) (.64)
Portfolio turnover rate(%)................................................................. 72 41 39
Average commission rate.................................................................... $ .0439 N/A N/A

<CAPTION>
CLASS B CLASS C
-------- --------
1993(B) 1996(C)
SELECTED PER SHARE DATA -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....................................................... $ 16.42 $ 18.46
-------- --------
Income (loss) from investment operations
Net investment loss(a).................................................................. -- (.06)
Net realized and unrealized gain (loss) on investment transactions...................... .37 1.02
-------- --------
Total from investment operations....................................................... .37 .96
-------- --------
Less distributions
From net investment income.............................................................. .07 --
In excess of net investment income...................................................... -- .09
From net realized gain.................................................................. 1.58 1.74
In excess of net realized gain.......................................................... -- --
-------- --------
Total distributions.................................................................... 1.65 1.83
-------- --------
Net asset value, end of period............................................................. $ 15.14 $ 17,59
======== ========
Total return(%)............................................................................ 2.34 5.20
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands)................................................... $ 65 $ 90
Ratio of expenses to average net assets
With expense reimbursement(%)............................................................. 2.31 2.44
Without expense reimbursement(%).......................................................... 2.44 2.44
Ratio of net investment loss to average net assets(%)(a)................................... (.33) (.86)
Portfolio turnover rate(%)................................................................. 77 72
Average commission rate.................................................................... N/A $ .0439
</TABLE>

- ---------------

<TABLE>
<S> <C>
(a) Net investment income (loss) is net of expenses reimbursed
by IMI.
(b) From October 23, 1993 (commencement of operations) to
December 31, 1993.
(c) From April 30, 1996 (commencement of operations) to December
31, 1996.
</TABLE>

7
<PAGE> 8

IVY GROWTH WITH INCOME FUND *
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989(A)
SELECTED PER SHARE DATA ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period........................ $ 10.98 $ 9.08 $ 9.70 $ 9.21 $ 9.74 $ 7.79 $ 8.13 $ 10.32
------- ------- ------- ------- ------- ------- ------- -------
Income (loss) from investment
operations
Net investment income........ .08 .11 .17 .08 .07 .09(c) .16 .45
Net realized and unrealized
gain (loss) on investment
transactions................ 2.16 2.13 (.36) 1.30 .18 2.72 (.18) 1.42
------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations................ 2.24 2.24 (.19) 1.38 .25 2.81 (.02) 1.87
------- ------- ------- ------- ------- ------- ------- -------
Less distributions
From net investment income... .08 .08 .17 .06 .07 .09 .18 1.08
In excess of net investment
income...................... .03 -- .01 -- -- -- -- --
From net realized gain....... 1.73 .26 .25 .83 .71 .77 .14 2.98
------- ------- ------- ------- ------- ------- ------- -------
Total distributions......... 1.84 .34 .43 .89 .78 .86 .32 4.06
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of
period......................... $ 11.38 $ 10.98 $ 9.08 $ 9.70 $ 9.21 $ 9.74 $ 7.79 $ 8.13
======= ======= ======= ======= ======= ======= ======= =======
Total return(%)................. 20.46 24.93 (2.03) 15.07 2.61 36.33 (.18) 18.06
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)..................... $63,219 $59,054 $26,017 $22,669 $19,045 $17,063 $ 9,989 $21,258
Ratio of expenses to average net
assets(%)...................... 1.81 1.96 1.84 2.14 1.94 1.50(d) 1.48 1.36
Ratio of net investment income
to average net assets(%)....... .68 1.06 1.83 .88 .73 1.10(c) 1.70 4.00
Portfolio turnover rate(%)...... 138 81 36 85 163 113 68 73
Average commission rate......... $ .0580 N/A N/A N/A N/A N/A N/A N/A

<CAPTION>
CLASS A
------------------
1988 1987
SELECTED PER SHARE DATA ------- -------
<S> <C> <C>
Net asset value, beginning of
period........................ $ 9.05 $ 12.56
-------- --------
Income (loss) from investment
operations
Net investment income........ .55 .49
Net realized and unrealized
gain (loss) on investment
transactions................ 1.44 (.28)
-------- --------
Total from investment
operations................ 1.99 .21
-------- --------
Less distributions
From net investment income... .55 .92
In excess of net investment
income...................... -- --
From net realized gain....... .17 2.80
-------- --------
Total distributions......... .72 3.72
-------- --------
Net asset value, end of
period......................... $ 10.32 $ 9.05
======== ========
Total return(%)................. 21.96 .78
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)..................... $109,507 $100,080
Ratio of expenses to average net
assets(%)...................... 1.26 1.22
Ratio of net investment income
to average net assets(%)....... 4.80 3.00
Portfolio turnover rate(%)...... 58 69
Average commission rate......... N/A N/A
</TABLE>

<TABLE>
<CAPTION>
CLASS B CLASS C
------------------------------------------------- -------
1996 1995 1994 1993(B) 1996(E)
SELECTED PER SHARE DATA ------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period................. $10.98 $ 9.08 $ 9.70 $10.43 $11.73
------ ------ ------ ------ ------
Income (loss) from investment operations
Net investment income............................. (.01) .03 .09 -- (.08)
Net realized and unrealized gain (loss) on
investment transactions.......................... 2.15 2.13 (.36) .05 1.53
------ ------ ------ ------ ------
Total from investment operations................. 2.14 2.16 (.27) .05 1.45
------ ------ ------ ------ ------
Less distributions
From net investment income........................ -- .01 .09 .01 --
In excess of net investment income................ .08 -- .01 -- .08
From net realized gain............................ 1.68 .25 .25 .77 1.73
------ ------ ------ ------ ------
Total distributions.............................. 1.76 .26 .35 .78 1.81
------ ------ ------ ------ ------
Net asset value, end of period....................... $11.36 $10.98 $ 9.08 $ 9.70 $11.37
====== ====== ====== ====== ======
Total return(%)...................................... 19.59 23.94 (2.88) .61 12.37
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands)............. $13,473 $8,868 $5,849 $ 888 $ 28
Ratio of expenses to average net assets(%)........... 2.55 2.75 2.70 3.09 3.02
Ratio of net investment income (loss) to average net
assets(%)........................................... (.06) .27 .97 (.07) (.53)
Portfolio turnover rate(%)........................... 138 81 36 85 138
Average commission rate.............................. $.0580 N/A N/A N/A $.0580
</TABLE>

- ---------------

<TABLE>
<S> <C>
* These figures are adjusted to reflect a ten-for-one stock
split on June 30, 1989. Grantham, Mayo, Van Otterloo & Co.
was subadviser to Ivy Growth with Income Fund from 4/1/84
through 6/30/89. Ivy Growth with Income Fund was formerly
known as "Ivy Institutional Investors Fund".
(a) Per share amounts have been computed using average monthly
shares.
(b) From October 23, 1993 (commencement of operations) to
December 31, 1993.
(c) Net investment income is net of expenses reimbursed by IMI.
(d) The ratio of expenses to average net assets is net of the
expenses reimbursed by IMI. If the IMI had not reimbursed
expenses during the year ended December 31, 1991, the ratio
of expenses to average net assets would have been 1.61%.
(e) From April 30, 1996 (commencement of operations) to December
31, 1996.
</TABLE>

8
<PAGE> 9

INVESTMENT OBJECTIVES AND POLICIES

Each Fund has its own investment objective and policies, which are described
below. Each Fund's investment objective is fundamental and may not be changed
without the approval of a majority of the outstanding voting shares of the Fund.
Except for a Fund's investment objective and those investment restrictions
specifically identified as fundamental, all investment policies and practices
described in this Prospectus and in the SAI are non-fundamental, and may be
changed by the Board of Trustees of the Trust ("Trustees") without shareholder
approval. There can be no assurance that a Fund's objective will be met. The
different types of securities and investment techniques used by the Funds
involve varying degrees of risk. For information about the particular risks
associated with each type of investment, see "Risk Factors and Investment
Techniques," below, and the SAI.

Whenever an investment objective, policy or restriction of a Fund described
in this Prospectus or in the SAI states a maximum percentage of assets that may
be invested in a security or other asset, or describes a policy regarding
quality standards, that percentage limitation or standard will, unless otherwise
indicated, apply to the Fund only at the time a transaction takes place. Thus,
for example, if a percentage limitation is adhered to at the time of investment,
a later increase or decrease in the percentage that results from circumstances
not involving any affirmative action by the Fund will not be considered a
violation.

IVY BOND FUND: Ivy Bond Fund seeks a high level of current income by
investing primarily in (i) investment-grade corporate bonds (those rated Aaa,
Aa, A or Baa by Moody's Investors Services, Inc. ("Moody's") or AAA, AA, A or
BBB by Standard & Poor's Corporation ("S&P"), or, if unrated, are considered by
IMI to be of comparable quality) and (ii) U.S. Government securities (including
mortgage-backed securities issued by U.S. Government agencies or
instrumentalities) that mature in more than 13 months. As a fundamental policy,
the Fund normally invests at least 65% of its total assets in these fixed income
securities. For temporary defensive purposes, the Fund may invest without limit
in U.S. Government securities maturing in 13 months or less, certificates of
deposit, bankers' acceptances, commercial paper and repurchase agreements. The
Fund may also invest up to 35% of its total assets in such money market
securities in order to meet redemptions or to maximize income to the Fund while
it is arranging longer-term investments.

The Fund may invest up to 35% of its net assets in corporate debt
securities, including zero-coupon bonds, rated Ba or below by Moody's or BB or
below by S&P, or, if unrated, are considered by IMI to be of comparable quality
(commonly referred to as "high yield" or "junk" bonds). The Fund will not invest
in debt securities rated less than C by either Moody's or S&P. During the twelve
months ended December 31, 1996, based upon the dollar-weighted average ratings
of the Fund's portfolio holdings at the end of each month during that period,
the Fund had the following percentages of its total assets invested in debt
securities rated in the categories indicated (all ratings are by either Moody's
or S&P, whichever rating is higher): 3.7% in securities rated Aaa/AAA; 0% in
securities rated Aa/AA; 1.9% in securities rated A/A; 60.4% in securities rated
Baa/BBB; 14.2% in securities rated Ba/BB; 16.3% in securities rated B/B; 0.7% in
securities rated Caa/CCC; and 0% in securities that were unrated. The asset
composition of the Fund subsequent to the period indicated may or may not
approximate these figures. See Appendix A in the SAI for a description of
Moody's and S&P's corporate bond ratings.

The Fund may invest up to 20% of its net assets in debt securities of
foreign issuers, including non-U.S. dollar-denominated debt securities, American
Depository Receipts ("ADRs"), Global Depository Receipts ("GDRs"), American
Depository Shares ("ADSs") and Global Depository Shares ("GDSs"), Eurodollar
securities and debt securities issued, assumed or guaranteed by foreign
governments or political subdivisions or instrumentalities thereof. The Fund may
also enter into forward foreign currency contracts, but not for speculative
purposes. The Fund may not invest more than 10% of the value of its net assets
in illiquid securities, such as securities subject to legal or contractual
restrictions on resale ("restricted securities"), repurchase agreements maturing
in more than seven days and other securities that are not readily marketable,
and in any case may not invest more than 5% of its net assets in restricted
securities.

The Fund may purchase put and call options, provided the premium paid for
such options does not exceed 10% of the Fund's net assets. The Fund may also
sell covered put options with respect to up to 50% of the value of its net
assets, and may write covered call options so long as not more than 20% of the
Fund's net assets is subject to being purchased upon the exercise of the calls.
For hedging purposes only, the Fund may engage in transactions in interest rate
futures contracts, currency futures contracts and options on interest rate
futures and currency futures contracts.

IVY EMERGING GROWTH FUND, IVY GROWTH FUND AND IVY GROWTH WITH INCOME
FUND: Each Fund's principal investment objective is long-term capital growth
primarily through investment in equity securities, with current income being a
secondary consideration. Ivy Growth with Income Fund has tended to emphasize
dividend-paying stocks more than the other two Funds. Under normal conditions,
each Fund invests at least 65% of its total assets in common stocks and
securities convertible into common stocks. Ivy Growth Fund and Ivy Growth with
Income Fund invest primarily in common stocks of domestic corporations with low
price-earnings ratios and rising earnings, focusing on established, financially
secure firms with capitalizations over $100 million and more than three years of
operating history. Ivy Emerging Growth Fund invests primarily in common stocks
(or securities with similar characteristics) of small and medium-sized
companies, both domestic and foreign, that are in the early stages of their life
cycles and that IMI believes have the potential to become major enterprises.

All of the Funds may invest up to 25% of their assets in foreign equity
securities, primarily those traded in European, Pacific Basin and Latin American
markets, some of which may be emerging markets involving special risks, as
described below. Individual foreign securities are selected based on value
indicators, such as a low price-earnings ratio, and are reviewed for fundamental
financial strength.

When circumstances warrant, each Fund may invest without limit in
investment-grade debt securities (e.g., U.S. Government securities or other
corporate debt securities rated at least Baa by Moody's or BBB by S&P, or, if
unrated, are considered by IMI to be of comparable quality), preferred stocks,
or cash or cash equivalents such as bank obligations (including certificates of
deposit and bankers' acceptances), commercial paper, short-term notes and
repurchase agreements.

9
<PAGE> 10

5% of its net assets in these low-rated debt securities. Neither Fund will
invest in debt securities rated less than C by either Moody's or S&P. (As of
December 31, 1996, neither Fund invested in low-rated debt securities).

As a fundamental policy, each Fund may borrow up to 10% of the value of its
total assets, but only for temporary purposes when it would be advantageous to
do so from an investment standpoint. All of the Funds may invest up to 5% of
their net assets in warrants. Each Fund may not invest more than 10% of its net
assets in illiquid securities, such as securities subject to legal or
contractual restrictions on resale ("restricted securities"), repurchase
agreements maturing in more than seven days and other securities that are not
readily marketable; and in any case may not invest more than 5% of its net
assets in restricted securities. All of the Funds may enter into forward foreign
currency contracts. Ivy Growth Fund and Ivy Growth with Income Fund may also
invest in equity real estate investment trusts.

Each of the Funds may write put options, with respect to not more than 10%
of the value of its net assets, on securities and stock indices, and may write
covered call options with respect to not more than 25% of the value of its net
assets. Each Fund may purchase options, provided the aggregate premium paid for
all options held does not exceed 5% of its net assets. For hedging purposes
only, each Fund may enter into stock index futures contracts as a means of
regulating its exposure to equity markets. A Fund's equivalent exposure in stock
index futures contracts will not exceed 15% of its total assets.

RISK FACTORS AND INVESTMENT TECHNIQUES

BANK OBLIGATIONS: The bank obligations in which the Funds may invest
include certificates of deposit, bankers' acceptances and other short-term debt
obligations. Investments in certificates of deposit and bankers' acceptances are
limited to obligations of (i) banks having total assets in excess of $1 billion,
and (ii) other banks if the principal amount of the obligation is fully insured
by the Federal Deposit Insurance Corporation ("FDIC"). Investments in
certificates of deposit of savings associations are limited to obligations of
Federal or state-chartered institutions whose total assets exceed $1 billion and
whose deposits are insured by the FDIC.

BORROWING: Borrowing may exaggerate the effect on a Fund's net asset value
of any increase or decrease in the value of the Fund's portfolio securities.
Money borrowed will be subject to interest costs (which may include commitment
fees and/or the cost of maintaining minimum average balances).

COMMERCIAL PAPER: Commercial paper represents short-term unsecured
promissory notes issued in bearer form by bank holding companies, corporations,
and finance companies. Each Fund's investments in commercial paper are limited
to obligations rated Prime-1 by Moody's or A-1 by S&P, or if not rated, issued
by companies having an outstanding debt issue currently rated Aaa or Aa by
Moody's or AAA or AA by S&P.

CONVERTIBLE SECURITIES: The convertible securities in which the Funds may
invest include corporate bonds, notes, debentures and other securities
convertible into common stocks. Because convertible securities can be converted
into equity securities, their value will normally vary in some proportion with
those of the underlying equity security. Convertible securities usually provide
a higher yield than the underlying equity, so the price decline of a convertible
security may sometimes be less substantial than that of the underlying equity
security.

DEBT SECURITIES, IN GENERAL: Investment in debt securities, including
municipal securities, involves both interest rate and credit risk. Generally,
the value of debt instruments rises and falls inversely with fluctuations in
interest rates. As interest rates decline, the value of debt securities
generally increases. Conversely, rising interest rates tend to cause the value
of debt securities to decrease. Bonds with longer maturities generally are more
volatile than bonds with shorter maturities. The market value of debt securities
also varies according to the relative financial condition of the issuer. In
general, lower-quality bonds offer higher yields due to the increased risk that
the issuer will be unable to meet its obligations on interest or principal
payments at the time called for by the debt instrument.

U.S. GOVERNMENT SECURITIES: U.S. Government securities are obligations of,
or guaranteed by, the U.S. Government, its agencies or instrumentalities. Such
securities include: (1) direct obligations of the U.S. Treasury (such as
Treasury bills, notes, and bonds) and (2) Federal agency obligations guaranteed
as to principal and interest by the U.S. Treasury (such as GNMA certificates,
which are mortgage-backed securities). When such securities are held to
maturity, the payment of principal and interest is unconditionally guaranteed by
the U.S. Government, and thus they are of the highest possible credit quality.
U.S. Government securities that are not held to maturity are subject to
variations in market value caused by fluctuations in interest rates.

Mortgage-backed securities are securities representing part ownership of a
pool of mortgage loans. Although the mortgage loans in the pool will have
maturities of up to 30 years, the actual average life of the loans typically
will be substantially less because the mortgages will be subject to principal
amortization and may be prepaid prior to maturity. In periods of falling
interest rates, the rate of prepayment tends to increase, thereby shortening the
actual average life of the security. Conversely, rising interest rates tend to
decrease the rate of prepayment, thereby lengthening the security's actual
average life (and increasing the security's price volatility.) Since it is not
possible to predict accurately the average life of a particular pool, and
because prepayments are reinvested at current rates, the market value of
mortgage-backed securities may decline during periods of declining interest
rates.

INVESTMENT-GRADE DEBT SECURITIES: Bonds rated Aaa by Moody's and AAA by S&P
are judged to be of the best quality (i.e., capacity to pay interest and repay
principal is extremely strong). Bonds rated Aa/AA are considered to be of high
quality (i.e., capacity to pay interest and repay principal is very strong and
differs from the highest rated issues only to a small degree). Bonds rated A are
viewed as having many favorable investment attributes, but elements may be
present that suggest a susceptibility to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
Bonds rated Baa/BBB (considered "medium grade" obligations) generally have an
adequate capacity to pay interest and repay principal, but lack outstanding
investment characteristics and have some speculative characteristics.

LOW-RATED DEBT SECURITIES: Securities rated lower than Baa by Moody's or
BBB by S&P, and comparable unrated securities (commonly referred to as "high
yield" or "junk" bonds), are considered to have predominately speculative
characteristics with respect to the issuer's capacity to pay interest and repay
principal. Investors in those Funds that invest in these securities should be
aware of the special risks associated with these securities.

10
<PAGE> 11

markets. Should the rating of a portfolio security be downgraded, IMI will
determine whether it is in the affected Fund's best interest to retain or
dispose of the security (unless the security is downgraded below the rating of
C, in which case IMI most likely would dispose of the security based on then
existing market conditions). For additional information regarding the risks
associated with investing in high yield bonds, see the SAI (in particular,
Appendix A, which contains a more complete description of the ratings assigned
by Moody's and S&P).

FOREIGN CURRENCY EXCHANGE TRANSACTIONS: A Fund usually effects its currency
exchange transactions on a spot (i.e., cash) basis at the spot rate prevailing
in the foreign exchange market. However, some price spread on currency exchange
(e.g., to cover service charges) is usually incurred when a Fund converts assets
from one currency to another. A Fund may also be affected unfavorably by
fluctuations in the relative rates of exchange between the currencies of
different nations.

FOREIGN SECURITIES: The foreign securities in which the Funds invest may
include non-U.S. dollar-denominated securities, Eurodollar securities, sponsored
or unsponsored ADRs, GDRs, ADSs and GDSs, and debt securities issued, assumed or
guaranteed by foreign governments (or political subdivisions or
instrumentalities thereof). Investors should consider carefully the special
risks that arise in connection with investing in securities issued by companies
and governments of foreign nations, which are in addition to those risks that
are generally associated with the Funds' investments.

In many foreign countries there is less regulation of business and industry
practices, stock exchanges, brokers and listed companies than in the United
States. For example, foreign companies are not generally subject to uniform
accounting, auditing and financial reporting standards, and foreign securities
transactions may be subject to higher brokerage costs. There also tends to be
less publicly available information about issuers in foreign countries, and
foreign securities markets of many of the countries in which the Funds may
invest may be smaller, less liquid and subject to greater price volatility than
those in the United States. Securities issued in emerging market countries,
including the developing countries of Latin America and Eastern Europe, may be
even less liquid and more volatile than securities of issuers operating in more
developed economies (e.g., countries in other parts of Europe). Generally, price
fluctuations in the Funds' foreign security holdings are likely to be high
relative to those of securities issued in the United States.

Other risks include the possibility of expropriation, nationalization or
confiscatory taxation, foreign exchange controls (which may include suspension
of the ability to transfer currency from a given country), difficulties in
pricing, default in foreign government securities, high rates of inflation,
difficulties in enforcing foreign judgments, political or social instability, or
other developments that could adversely affect the Funds' foreign investments.

The risks of investing in foreign securities (described above) are likely to
be intensified in the case of investments in issuers domiciled or doing
substantial business in countries with emerging or developing economies
("emerging markets"). For example, countries with emerging markets may have
relatively unstable governments and therefore be susceptible to sudden adverse
government action (such as nationalization of businesses, restrictions on
foreign ownership or prohibitions against repatriation of assets). Security
prices in emerging markets can also be significantly more volatile than in the
more developed nations of the world, and communications between the U.S. and
emerging market countries may be unreliable, increasing the risk of delayed
settlements of portfolio transactions or loss of certificates for portfolio
securities. Delayed settlements could cause a Fund to miss attractive investment
opportunities or impair its ability to dispose of portfolio securities,
resulting in a loss if the value of the securities subsequently declines. In
addition, many emerging markets have experienced and continue to experience
especially high rates of inflation. In certain countries, inflation has at times
accelerated rapidly to hyperinflationary levels, creating a negative interest
rate environment and sharply eroding the value of outstanding financial assets
in those countries.

In recent years, many emerging market countries around the world have
undergone political changes that have reduced government's role in economic and
personal affairs and have stimulated investment and growth. In order for these
emerging economies to continue to expand and develop industry, infrastructure
and currency reserves, continued influx of capital is essential. Historically,
there is a strong direct correlation between economic growth and stock market
returns. While this is no guarantee of future performance, IMI believes that
investment opportunities (particularly in the energy, environmental services,
natural resources, basic materials, power, telecommunications and transportation
industries) may result within the evolving economies of emerging market
countries from which the Funds and their shareholders will benefit. IMI believes
that similar investment opportunities will be created for companies involved in
providing consumer goods and services (e.g., food, beverages, autos, housing,
tourism and leisure and merchandising).

FORWARD FOREIGN CURRENCY CONTRACTS: A forward foreign currency contract
involves an obligation to purchase or sell a specific currency at a future date
at a predetermined price. Although these contracts are intended to minimize the
risk of loss due to a decline in the value of the hedged currencies, they also
tend to limit any potential gain that might result should the value of the
currencies increase. In addition, there may be an imperfect correlation between
a Fund's portfolio holdings of securities denominated in a particular currency
and forward contracts entered into by the Fund, which may prevent the Fund from
achieving the intended hedge or expose the Fund to the risk of currency exchange
loss.

OPTIONS AND FUTURES TRANSACTIONS: The Funds may use various techniques to
increase or decrease their exposure to changing security prices, interest rates,
currency exchange rates, commodity prices, or other factors that affect the
value of the Funds' securities. These techniques may involve derivative
transactions such as purchasing put and call options, selling put and call
options, and engaging in transactions in foreign currency futures, stock index
futures and related options.

Each Fund may invest in options on securities in accordance with its stated
investment objective and policies. A put option is a short-term contract that
gives the purchaser of the option, in return for a premium, the right to sell
the underlying security or currency to the seller of the option at a specified
price during the term of the option. A call option is a short-term contract that
gives the purchaser the right to buy the underlying security or currency from
the seller of the option at a specified price during the term of the option. An
option on a stock index gives the purchaser the right to receive from the seller
cash equal to the difference between the closing price of the index and the
exercise price of the option.

Each Fund may also enter into futures transactions in accordance with its
stated investment objective and policies. An interest rate futures contract is
an agreement between two parties to buy or sell a specified debt security at a
set price on a future date. A foreign currency futures contract is an agreement
to buy or sell a specified amount of a foreign currency for a set price on a
future date. A stock index futures contract is an agreement to take or make
delivery of an amount of cash based on the difference between the value of the
index at the beginning and at the end of the contract period.

11
<PAGE> 12

Investors should be aware that the risks associated with the use of options
and futures are considerable. Options and futures transactions generally involve
a small investment of cash relative to the magnitude of the risk assumed, and
therefore could result in a significant loss to a Fund if IMI judges market
conditions incorrectly or employs a strategy that does not correlate well with
the Fund's investments. A Fund may also experience a significant loss if it is
unable to close a particular position due to the lack of a liquid secondary
market. For further information regarding the use of options and futures
transactions and any associated risks, see the SAI.

REAL ESTATE INVESTMENT TRUSTS: A real estate investment trust ("REIT") is a
corporation, trust or association that invests in real estate mortgages or
equities for the benefit of its investors. REITs are dependent upon management
skill, may not be diversified and are subject to the risks of financing
projects. Equity REITs are also subject to heavy cash flow dependency, defaults
by borrowers, self-liquidation and the possibility of failing to qualify for
tax-free pass-through of income under the Internal Revenue Code of 1986, as
amended (the "Code") and to maintain exemption under the Investment Company Act
of 1940, as amended (the "1940 Act"). By investing in REITs indirectly through a
Fund, a shareholder will bear not only his/her proportionate share of the
expenses of the Fund, but also, indirectly, similar expenses of the REITs.

REPURCHASE AGREEMENTS: Repurchase agreements are agreements under which a
Fund buys a money market instrument and obtains a simultaneous commitment from
the seller to repurchase the instrument at a specified time and agreed-upon
yield. Each Fund may enter into repurchase agreements with banks or
broker-dealers deemed to be creditworthy by IMI under guidelines approved by the
Board of Trustees. A Fund could experience a delay in obtaining direct ownership
of the underlying collateral, and might incur a loss if the value of the
security should decline.

RESTRICTED AND ILLIQUID SECURITIES: An "illiquid security" is an asset that
may not be sold or disposed of in the ordinary course of business within seven
days at approximately the value at which a Fund has valued the security on its
books. A "restricted security" is a security that cannot be offered to the
public for sale without first being registered under the Securities Act of 1933,
as amended, and is considered to be illiquid until such filing takes place.
There may be a lapse of time between a Fund's decision to sell a restricted or
illiquid security and the point at which the Fund is permitted or able to sell
the security. If adverse market conditions were to develop during that period,
the Fund might obtain a price less favorable than the price that prevailed when
it decided to sell. In addition, issuers of restricted and other illiquid
securities may not be subject to the disclosure and other investor protection
requirements that would apply if their securities were publicly traded.
Securities whose proceeds are subject to limitations on repatriation of
principal or profits for more than seven days, and those for which market
quotations are not readily available, are considered illiquid for purposes of
the percentage limitations that apply to each Fund's investment in illiquid
securities.

SMALL COMPANIES: Investing in smaller company stocks involves certain
special considerations and risks that are not usually associated with investing
in larger, more established companies. For example, the securities of small or
new companies may be subject to more abrupt or erratic market movements because
they tend to be thinly traded and are subject to a greater degree to changes in
the issuer's earnings and prospects. Small companies also tend to have limited
product lines, markets or financial resources. Transaction costs associated with
trading in smaller company stocks may be higher than those of larger companies.

"WHEN-ISSUED" SECURITIES AND FIRM COMMITMENTS: Purchasing securities on a
"when-issued" or firm commitment basis involves a risk of loss if the value of
the security to be purchased declines prior to the settlement date.

ZERO COUPON BONDS: Zero coupon bonds are debt obligations issued without
any requirement for the periodic payment of interest, and are issued at a
significant discount from face value. Since the interest on such bonds is, in
effect, compounded, they are subject to greater market value fluctuations in
response to changing interest rates than debt securities that distribute income
regularly. In addition, for Federal income tax purposes, a Fund generally
recognizes and is required to distribute income generated by zero coupon bonds
currently in the amount of the unpaid accrued interest, even though the actual
income will not yet have been received by the Fund.

ORGANIZATION AND MANAGEMENT OF THE FUNDS

Each Fund is organized as a separate, diversified portfolio of the Trust, an
open-end management investment company organized as a Massachusetts business
trust on December 21, 1983. The business and affairs of each Fund are managed
under the direction of the Trustees. Information about the Trustees, as well as
the Trust's executive officers, may be found in the SAI. The Trust has an
unlimited number of authorized shares of beneficial interest, and currently has
16 separate portfolios. For periods prior to December 31, 1994, Ivy Bond Fund
was known as Mackenzie Fixed Income Trust (d/b/a Ivy Bond Fund). Each Fund has
three classes of shares, designated as Class A, Class B and Class C. Ivy Bond
Fund has a fourth class of shares designated as Class I; and Ivy Growth with
Income Fund has a fourth class of shares designated as Class D (the shares of
which are not available for sale). Shares of each Fund entitle their holders to
one vote per share (with proportionate voting for fractional shares). The shares
of each class represent an interest in the same portfolio of Fund investments.
Each class of shares, except for Class I, has a different Rule 12b-1
distribution plan and bears different distribution fees. In addition, Class I
shares of Ivy Bond Fund bear lower administrative service and transfer agency
fees than the Fund's Class A, Class B and Class C shares. Shares of each class
have equal rights as to voting, redemption, dividends and liquidation but have
exclusive voting rights with respect to their Rule 12b-1 distribution plans.

The Trust employs IMI to provide business management and investment advisory
services, Mackenzie Investment Management Inc. ("MIMI") to provide
administrative and accounting services, Ivy Mackenzie Distributors, Inc.
("IMDI") to distribute the Funds' shares and Ivy Mackenzie Services Corp.
("IMSC") to provide transfer agent and shareholder-related services for the
Funds. IMI, IMDI and IMSC are wholly-owned subsidiaries of MIMI. Until December
31, 1994, MIMI served as investment adviser to Ivy Bond Fund. As of March 31,
1997, IMI and MIMI had approximately $2.70 billion and $145 million,
respectively, in assets under management. MIMI is a subsidiary of Mackenzie
Financial Corporation ("MFC"), which has been an investment counsel and mutual
fund manager in Toronto, Ontario, Canada for more than 25 years.

INVESTMENT MANAGER

For IMI's business management and investment advisery services, each Fund
pays IMI a fee, which is accrued daily and paid monthly, based on the Fund's
average net assets. Ivy Bond Fund pays a fee that is equal, on an annual basis,
to 0.75% of the first $100 million in average net assets, reduced to 0.50% of
average net assets in excess of $100 million. For the year ended December 31,
1996, Ivy Bond Fund paid IMI an effective investment management fee of 0.75% of
the Fund's average net assets. Ivy Emerging Growth Fund and Ivy

12
<PAGE> 13

Growth Fund each pay a fee that is equal, on an annual basis, to 0.85% of its
average net assets. Ivy Growth with Income Fund pays a fee that is equal, on an
annual basis, to 0.75% of its average net assets.

IMI pays all expenses that it incurs in rendering management services to the
Funds. Each Fund bears its own operational costs. General expenses of the Trust
that are not readily identifiable as belonging to a particular series of the
Trust (or a particular class thereof) are allocated among and charged to each
series based on its relative net asset size. Expenses that are attributable to a
particular Fund (or class thereof) will be borne solely by that Fund (or class)
directly. The fees payable to IMI are subject to any reimbursement or fee waiver
to which IMI may agree.

PORTFOLIO MANAGEMENT: The following individuals have responsibilities for
management of the Funds:

- James W. Broadfoot, an Executive Vice President and Chief Investment
Officer of IMI, has been a portfolio manager for Ivy Emerging Growth Fund
since the Fund's inception in 1993, Ivy Growth Fund since 1994 and Ivy
Growth with Income Fund since 1997. Prior to joining the organization in
1990, Mr. Broadfoot was the principal in an investment counsel firm
specializing in small capitalization companies. Mr. Broadfoot has 24 years
of professional investment experience. He earned an MBA from The Wharton
School of The University of Pennsylvania and is a Chartered Financial
Analyst.

- Frank DuMond is a portfolio manager for Ivy Growth Fund and Ivy Growth
with Income Fund. Mr. DuMond has served as portfolio manager since 1997,
and prior to that served as a research analyst from 1994 through 1996. Mr.
DuMond joined the organization in 1994 and has four years of professional
investment experience. He holds a Bachelor of Science degree from the
Massachusetts Institute of Technology.

- Leslie A. Ferris, a Senior Vice President of IMI, has been a portfolio
manager for Ivy Bond Fund since 1993. Ms. Ferris joined the organization
in 1988 and has 15 years of professional investment experience. She is a
Chartered Financial Analyst and holds an MBA degree from the University of
Chicago. From 1982 to 1988 she was a portfolio manager at Kemper Financial
Services, Inc.

- Barbara Trebbi, a Senior Vice President of IMI, joined the organization in
1988 and has nine years of professional investment experience. She has
been a portfolio manager for Ivy Growth Fund since 1993. She is a
Chartered Financial Analyst and holds a Graduate Diploma from the London
School of Economics.

FUND ADMINISTRATION AND ACCOUNTING

MIMI provides various administrative services for the Funds, such as
maintaining the registration of Fund shares under state "Blue Sky" laws, and
assisting with the preparation of Federal and state income tax returns,
financial statements and periodic reports to shareholders. MIMI also assists the
Trust's legal counsel with the filing of registration statements, proxies and
other required filings under Federal and state law. Under this arrangement, the
average net assets attributable to each Fund's Class A, Class B and Class C
shares are subject to a fee accrued daily and paid monthly at the annual rate of
0.10%. The net assets attributable to Ivy Bond Fund's Class I shares are subject
to a fee at the annual rate of 0.01%.

MIMI also provides certain accounting and pricing services for the Funds
(see "Fund Accounting Services" in the SAI for more information).

TRANSFER AGENT

IMSC is the transfer and dividend-paying agent for the Funds, and also
provides certain shareholder-related services. Certain broker-dealers that
maintain shareholder accounts with the Funds through an omnibus account provide
transfer agent and other shareholder-related services that would otherwise be
provided by IMSC if the individual accounts that comprise the omnibus account
were opened by their beneficial owners directly (see "Investment Advisory and
Other Services" in the SAI).

ALTERNATIVE PURCHASE ARRANGEMENTS

CLASS A SHARES: Class A shares are subject to an initial sales charge
unless the amount you purchase is $500,000 or more (see "Contingent Deferred
Sales Charge -- Class A Shares"). Certain purchases qualify for a reduced
initial sales charge (see "Qualifying for a Reduced Sales Charge"). Class A
shares are subject to ongoing service fees at an annual rate of 0.25% of a
Fund's average net assets attributable to its Class A shares. If you do not
specify on your Account Application which class of shares you are purchasing, it
will be assumed that you are investing in Class A shares.

CLASS B AND CLASS C SHARES: Class B and Class C shares are not subject to
an initial sales charge, but are subject to a CDSC if redeemed within six years
of purchase, in the case of Class B shares, or within one year of purchase, in
the case of Class C shares. Both classes of shares are subject to ongoing
service and distribution fees at a combined annual rate of up to 1.00% of a
Fund's average net assets attributable to its Class B or Class C shares. The
ongoing distribution fee will cause these shares to have a higher expense ratio
than that of Class A shares. Also, to the extent that a Fund pays any dividends,
these higher expenses will result in lower dividends than those paid on Class A
shares.

CLASS I SHARES: Class I shares are offered by Ivy Bond Fund only to
institutions and certain individuals, and are not subject to an initial sales
charge or a CDSC, nor to ongoing service or distribution fees. Class I shares
also bear lower administrative services fees and transfer agency fees than Class
A, Class B and Class C shares.

FACTORS TO CONSIDER IN CHOOSING AN ALTERNATIVE: The multi-class structure
of the Funds allows you to choose the most beneficial way to buy shares given
the size of your purchase and the length of time you expect to hold your shares.
You should consider whether, during the anticipated life of your Fund
investment, the accumulated service and distribution fees on Class B and Class C
shares would be less than the initial sales charge and accumulated service fees
on Class A shares purchased at the same time, and to what extent this
differential would be offset by the Class A shares' potentially higher yield.
Also, sales personnel may receive different compensation depending on which
class of shares they are selling. The tables under the caption "Annual Fund
Operating Expenses" at the beginning of this Prospectus contain additional
information that is designed to assist you in making this determination.

DIVIDENDS AND TAXES

Distributions you receive from a Fund are reinvested in additional shares of
the same class of a Fund unless you elect to receive them in cash. Because of
the higher expenses associated with Class B and Class C shares, any dividend on
these shares will be lower than on Class A and Class I shares.

Ivy Growth with Income Fund intends normally to declare a daily dividend,
and pay accumulated dividends quarterly. If a shareholder of the Fund redeems
all of his/her shares at any time prior to payment of a

13
<PAGE> 14

distribution, all declarations accrued to the date of redemption are paid in
addition to the redemption proceeds. Ivy Emerging Growth Fund and Ivy Growth
Fund intend to make a distribution for each fiscal year of any net investment
income and net realized short-term capital gain, as well as any net long-term
capital gain realized during the year. In order to provide steady cash flow to
shareholders, Ivy Bond Fund intends normally to make monthly distributions of
the Fund's net investment income. The Fund intends to make a distribution for
each fiscal year of any remaining net investment income and net realized
short-term capital gain, as well as net long-term capital gain realized during
the year. Any Fund may make an additional distribution of net investment income,
net realized short-term capital gains and net realized long-term capital gains
to comply with the calendar year distribution requirement under the excise tax
provisions of Section 4982 of the Code.

TAXATION: The following discussion is intended for general information
only. You should consult with your tax adviser as to the tax consequences of an
investment in a particular Fund, including the status of distributions from the
Fund under applicable state or local law.

Each Fund intends to qualify annually as a regulated investment company
under the Code. To qualify, each Fund must meet certain income, distribution and
diversification requirements. In any year in which a Fund qualifies as a
regulated investment company and timely distributes all of its taxable income,
the Fund generally will not pay any Federal income or excise tax.

Dividends paid out of a Fund's investment company taxable income (including
dividends, interest and net short-term capital gains) will be taxable to a
shareholder as ordinary income. If a portion of a Fund's income consists of
dividends paid by U.S. corporations, a portion of the dividends paid by the Fund
may be eligible for the corporate dividends-received deduction. Distributions of
net capital gains (the excess of net long-term capital gains over net short-term
capital losses), if any, are taxable as long-term capital gains, regardless of
how long the shareholder has held a Fund's shares. Dividends are taxable to
shareholders in the same manner whether received in cash or reinvested in
additional Fund shares.

A distribution will be treated as paid on December 31 of the current
calendar year if it is declared by a Fund in October, November or December with
a record date in such a month and paid by the Fund during January of the
following calendar year. Such distributions will be taxable to shareholders in
the calendar year in which the distributions are declared, rather than the
calendar year in which the distributions are received.

Investments in securities that are issued at a discount will result each
year in income to a Fund equal to a portion of the excess of the face value of
the securities over their issue price, even though the Fund receives no cash
interest payments from the securities.

Income and gains received by a Fund from sources within foreign countries
may be subject to foreign withholding and other taxes. Unless a Fund is eligible
to and elects to "pass through" to its shareholders the amount of foreign income
and similar taxes paid by the Fund, these taxes will reduce the Fund's
investment company taxable income, and distributions of investment company
taxable income received from the Fund will be treated as U.S. source income.

Any gain or loss realized by a shareholder upon the sale or other
disposition of shares of a Fund, or upon receipt of a distribution in complete
liquidation of the Fund, generally will be a capital gain or loss which will be
long-term or short-term, generally depending upon the shareholder's holding
period for the shares.

A Fund may be required to withhold U.S. Federal income tax at the rate of
31% of all taxable distributions payable to shareholders who fail to provide the
Fund with their correct taxpayer identification number or to make required
certifications, or who have been notified by the Internal Revenue Service
("IRS") that they are subject to backup withholding. Backup withholding is not
an additional tax. Any amounts withheld may be credited against the
shareholder's U.S. Federal income tax liability.

Fund distributions may be subject to state, local and foreign taxes.
Distributions of a Fund which are derived from interest on obligations of the
U.S. Government and certain of its agencies, authorities and instrumentalities
may be exempt from state and local taxes in certain states. Further information
relating to tax consequences is contained in the SAI.

PERFORMANCE DATA

Performance information (e.g., "total return" and "yield") is computed
separately for each class of Fund shares in accordance with formulas prescribed
by the SEC. Performance information for each class may be compared in reports
and promotional literature to indices such as the Standard and Poor's 500 Stock
Index, Dow Jones Industrial Average, and Morgan Stanley Capital International
World Index. Advertisements, sales literature and communications to shareholders
may also contain statements of a Fund's current yield, various expressions of
total return and current distribution rate. Performance figures will vary in
part because of the different expense structures of the Funds' different
classes. ALL PERFORMANCE INFORMATION IS HISTORICAL AND IS NOT INTENDED TO
SUGGEST FUTURE RESULTS.

"Total return" is the change in value of an investment in a Fund for a
specified period, and assumes the reinvestment of all distributions and
imposition of the maximum applicable sales charge. "Average annual total return"
represents the average annual compound rate of return of an investment in a
particular class of Fund shares assuming the investment is held for one year,
five years and ten years as of the end of the most recent calendar quarter.
Where a Fund provides total return quotations for other periods, or based on
investments at various sales charge levels or at net asset value, "total return"
is based on the total of all income and capital gains paid to (and reinvested
by) shareholders, plus (or minus) the change in the value of the original
investment expressed as a percentage of the purchase price.

"Current yield" reflects the income per share earned by a Fund's portfolio
investments, and is calculated by dividing the Fund's net investment income per
share during a recent 30-day period by the maximum public offering price on the
last day of that period and then annualizing the result. Dividends or
distributions that were paid to a Fund's shareholders are reflected in the
"current distribution rate," which is computed by dividing the total amount of
dividends per share paid by a Fund during the preceding 12 months by the Fund's
current maximum offering price (which includes any applicable sales charge). The
"current distribution rate" will differ from the "current yield" computation
because it may include distributions to shareholders from sources other than
dividends and interest, short term capital gain and net equalization credits and
will be calculated over a different period of time.

HOW TO BUY SHARES

OPENING AN ACCOUNT: Complete and sign the Account Application on the last
page of this Prospectus. Make your check payable to the Fund in which you are
investing. No third party checks will be accepted. Deliver these items to your
registered representative or selling broker, or send them to one of the
addresses below:

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<PAGE> 15

Regular Mail:

IVY MACKENZIE SERVICES CORP.
P.O. BOX 3022
BOCA RATON, FL 33431-0922

Courier:

IVY MACKENZIE SERVICES CORP.
700 SOUTH FEDERAL HIGHWAY, SUITE 300
BOCA RATON, FL 33432

The Funds reserve the right to reject, for any reason, any purchase order.

MINIMUM INVESTMENT POLICIES: The minimum initial investment is $1,000; the
minimum additional investment is $100. Initial or additional amounts for
retirement accounts may be less (see "Retirement Plans").

Accounts in Class I of Ivy Bond Fund can be opened with a minimum initial
investment of $5,000,000; the minimum additional investment is $10,000. The
minimum initial investment in Class I of Ivy Bond Fund may be spread over the
thirteen-month period following the opening of the account.

BUYING ADDITIONAL SHARES: You may add to your account at any time through
any of the following options:

By Mail: Complete the investment slip attached to your statement, or write
instructions including the account registration, fund number, and account number
of the shares you wish to purchase. Send your check (payable to the Fund in
which you are investing) and investment slip or written instructions to one of
the addresses above.

Through your Broker: Deliver the investment slip attached to your
statement, or written instructions, along with your payment to your registered
representative or selling broker.

FIRST UNION NATIONAL BANK OF FLORIDA
JACKSONVILLE, FL
ABA#063000021
ACCOUNT #2090002063833
FOR FURTHER CREDIT TO:
YOUR IVY ACCOUNT REGISTRATION
YOUR FUND NUMBER AND ACCOUNT NUMBER

By Automatic Investment Method: Complete Sections 6A and 7B on the Account
Application (See "Automatic Investment Method" on page 21 for more information).

HOW YOUR PURCHASE PRICE IS DETERMINED

Your purchase price for Class A shares of a Fund is the net asset value
("NAV") per share plus a sales charge, which may be reduced or eliminated in
certain circumstances. The purchase price per share is known as the public
offering price. Your purchase price for Class B and Class C shares (and Class I
shares, in the case of Ivy Bond Fund) is the net asset value per share.

Share purchases will be made at the next determined price after your
purchase order is received. The price is effective for orders received by IMSC
or by your registered securities dealer prior to the time of the determination
of the NAV. Any orders received after the time of the determination of the NAV
will be entered at the next calculated price.

Orders placed with a securities dealer before the NAV is determined and that
are transmitted through the facilities of the National Securities Clearing
Corporation on the same day are confirmed at that day's price. Any loss
resulting from the dealer's failure to submit an order by the deadline will be
borne by that dealer.

You will receive an account statement after any purchase, exchange or full
liquidation. Statements related to reinvestment of dividends, capital gains,
automatic investment plans (see the SAI for further explanation) and/or
systematic withdrawal plans will be sent quarterly.

HOW EACH FUND VALUES ITS SHARES

The NAV per share is the value of one share. The NAV is determined for each
Class of shares as of the close of the New York Stock Exchange on each day the
Exchange is open by dividing the value of a Fund's net assets attributable to a
class by the number of shares of that class that are outstanding, adjusted to
the nearest cent. These procedures are described more completely in the SAI.

The Trustees have established procedures to value a Fund's securities in
order to determine the NAV. The value of a foreign security is determined as of
the normal close of trading on the foreign exchange on which it is traded or as
of the close of regular trading on the New York Stock Exchange, if that is
earlier. If no sale is reported at that time, the average between the current
bid and asked price is used. All other securities for which OTC market
quotations are readily available are valued at the average between the current
bid and asked price. Securities and other assets for which market prices are not
readily available are valued at fair value, as determined by IMI and approved in
good faith by the Board. Money market instruments of a Fund are valued at
amortized cost.

INITIAL SALES CHARGE ALTERNATIVE -- CLASS A SHARES

Shares are purchased at a public offering price equal to their NAV per share
plus a sales charge, as set forth below.

<TABLE>
<CAPTION>
SALES CHARGE
-------------------------------- PORTION OF
AS A PUBLIC
PERCENTAGE OF AS A PERCENTAGE OFFERING PRICE
IVY BOND FUND PUBLIC OF NET AMOUNT RETAINED BY
AMOUNT INVESTED OFFERING PRICE INVESTED DEALER
--------------- -------------- --------------- --------------
<S> <C> <C> <C>
Less than $100,000....................... 4.75% 4.99% 4.00%
$100,000 but less than $250,000.......... 3.75% 3.90% 3.00%
$250,000 but less than $500,000.......... 2.50% 2.56% 2.00%
$500,000 or over*........................ 0.00% 0.00% 0.00%
</TABLE>

<TABLE>
<CAPTION>
SALES CHARGE
-------------------------------- PORTION OF
IVY EMERGING GROWTH FUND, AS A PUBLIC
IVY GROWTH FUND AND PERCENTAGE OF AS A PERCENTAGE OFFERING PRICE
IVY GROWTH WITH INCOME FUND PUBLIC OF NET AMOUNT RETAINED BY
AMOUNT INVESTED OFFERING PRICE INVESTED DEALER
--------------------------- -------------- --------------- --------------
<S> <C> <C> <C>
Less than $50,000........................ 5.75% 6.10% 5.00%
$50,000 but less than $100,000........... 5.25% 5.54% 4.50%
$100,000 but less than $250,000.......... 4.50% 4.71% 3.75%
$250,000 but less than $500,000.......... 3.00% 3.09% 2.50%
$500,000 or over*........................ 0.00% 0.00% 0.00%
</TABLE>

* A CDSC may apply to the redemption of Class A shares that are purchased
without an initial sales charge. See "Contingent Deferred Sales Charge --
Class A Shares."

15
<PAGE> 16

Sales charges are not applied to any dividends or capital gains that are
reinvested in additional shares of the Fund. An investor may be charged a
transaction fee for Class A and Class I shares (in the case of Ivy Bond Fund)
purchased or redeemed at NAV through a broker or agent other than IMDI.

With respect to purchases of $500,000 or more through dealers or agents,
IMDI may, at the time of purchase, pay such dealers or agents from its own
resources a commission to compensate such dealers or agents for their
distribution assistance in connection with such purchases. The commission would
be computed as set forth below:

NAV COMMISSION TABLE

<TABLE>
<CAPTION>
PURCHASE AMOUNT COMMISSION
- --------------- ----------
<S> <C> <C>
First $3,000,000.................................................. 1.00%
Next $2,000,000.................................................. .50%
Over $5,000,000.................................................. .25%
</TABLE>

Dealers who receive 90% or more of the sales charge may be deemed to be
"underwriters" as that term is defined in the 1933 Act.

IMDI compensates participating brokers who sell Class A shares through the
initial sales charge. IMDI retains that portion of the initial sales charge that
is not reallowed to the dealers, which it may use to distribute a Fund's Class A
shares. Pursuant to a separate distribution plan for the Funds' Class A, Class B
and Class C shares, IMDI bears various promotional and sales related expenses,
including the cost of printing and mailing prospectuses to persons other than
shareholders. Pursuant to the Funds' Class A distribution plans, IMDI currently
pays a continuing service fee to qualified dealers at an annual rate of 0.25% of
qualified investments.

IMDI may from time to time pay a bonus or other incentive to dealers (other
than IMDI) which employ a registered representative who sells a minimum dollar
amount of the shares of a Fund and/or other funds distributed by IMDI during a
specified period of time. This bonus or other incentive may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and members of their
families to places within or without the U.S. or other bonuses such as gift
certificates or the cash equivalent of such bonus or incentive.

CONTINGENT DEFERRED SALES CHARGE -- CLASS A SHARES

Purchases of $500,000 or more of Class A shares will be made at NAV with no
initial sales charge, but if the shares are redeemed within 24 months after the
end of the calendar month in which the purchase was made (the CDSC period), a
CDSC of 1.00% will be imposed.

The charge will be assessed on an amount equal to the lesser of the current
market value or the original purchase cost of the Class A shares redeemed.
Accordingly, no CDSC will be imposed on increases in account value above the
initial purchase price, including any dividends or capital gains which have been
reinvested in additional Class A shares.

In determining whether a CDSC applies to a redemption, the calculation will
be determined in a manner that results in the lowest possible rate being
charged. Therefore, it will be assumed that the redemption is first made from
any shares in your account not subject to the CDSC. The CDSC is waived in
certain circumstances. See the discussion below under the caption "Waiver of
Contingent Deferred Sales Charge."

WAIVER OF CONTINGENT DEFERRED SALES CHARGE: The CDSC is waived for: (i)
redemptions in connection with distributions not exceeding 12% annually of the
initial account balance (i.e., the value of the shareholder's Class A Fund
account at the time of the initial distribution) (ia) following retirement under
a tax qualified retirement plan, or (ib) upon attaining age 59 1/2 in the case
of an IRA, a custodial account pursuant to section 403(b)(7) of the Code or a
Keogh Plan; (ii) redemption resulting from tax-free return of an excess
contribution to an IRA; or (iii) any partial or complete redemption following
the death or disability (as defined in Section 72(m)(7) of the Code) of a
shareholder from an account in which the deceased or disabled is named, provided
that the redemption is requested within one year of death or disability. IMDI
may require documentation prior to waiver of the CDSC.

Class A shareholders may exchange their Class A shares subject to a CDSC
("outstanding Class A shares") for Class A shares of another Ivy or Mackenzie
fund ("new Class A shares") on the basis of the relative NAV per Class A share,
without the payment of any CDSC that would be due upon the redemption of the
outstanding Class A shares. The original CDSC rate that would have been charged
if the outstanding Class A shares were redeemed will carry over to the new Class
A shares received in the exchange, and will be charged accordingly at the time
of redemption.

QUALIFYING FOR A REDUCED SALES CHARGE

RIGHTS OF ACCUMULATION (ROA): Rights of Accumulation ("ROA") is calculated
by determining the current market value of all Class A shares in all Ivy or
Mackenzie fund accounts (except Ivy Money Market Fund) owned by you, your
spouse, and your children under 21 years of age. ROA is also applicable to
accounts under a trustee or other single fiduciary (including retirement
accounts qualified under Section 401 of the Code). The current market value of
each of your accounts as described above is added together and then added to
your current purchase amount. If the combined total is equal or greater than a
breakpoint amount for a Fund, then you qualify for the reduced sales charge. To
reduce or eliminate the sales charge, you must complete Section 4C of the
Account Application.

LETTER OF INTENT (LOI): A Letter of Intent ("LOI") is a non-binding
agreement that states your intention to invest in additional Class A shares,
within a thirteen month period after the initial purchase, an amount equal to a
breakpoint amount for a Fund. The LOI may be backdated up to 90 days. To sign an
LOI, please complete Section 4C of the Account Application.

Should the LOI not be fulfilled within the thirteen month period, your
account will be debited for the difference between the full sales charge that
applies for the amount actually invested and the reduced sales charge actually
paid on purchases placed under the terms of the LOI.

PURCHASES OF CLASS A SHARES AT NET ASSET VALUE: Investors who held Ivy Fund
shares as of December 31, 1991, or who held shares of certain funds that were
reorganized into an Ivy or Mackenzie fund, may be exempt from sales charges on
the purchase of Class A shares of any of the Ivy or Mackenzie funds. If you
believe you may be eligible for such an exemption, please contact IMSC at
1-800-235-3322 for additional information.

16
<PAGE> 17

purchase Class A shares of a Fund without an initial sales charge or a CDSC,
provided such purchases are placed through a broker or agent who maintains an
omnibus account with that Fund. Also, clients of these advisors and planners may
make purchases under the same conditions if the purchases are through the master
account of such advisor or planner on the books of such broker or agent. This
provision applies to assets of retirement and deferred compensation plans and
trusts used to fund those plans including, but not limited to, those defined in
Section 401(a), 403(b) or 457 of the Code and "Rabbi Trusts" whose assets are
used to purchase shares of a fund through the aforementioned channels.

Class A shares of a Fund may be purchased at NAV by retirement plans
qualified under section 401(a) or 403(b) of the Code or subject to the Employee
Retirement Income Security Act of 1974, as amended. A CDSC of 1.00% will be
imposed on such purchases in the event of certain plan-level redemption
transactions within 24 months following such purchases. Class A shares of a Fund
are made available to Merrill Lynch Daily K Plan (the "Plan") participants at
NAV without an initial sales charge if the Plan has at least $3 million in
assets or 500 or more eligible employees. Class B shares of a Fund are made
available to Plan participants at NAV without a CDSC if the Plan has less than
$3 million in assets or fewer than 500 eligible employees. For further
information see "GROUP SYSTEMATIC INVESTMENT PROGRAM" in the Fund's SAI.

If investments by retirement plans at NAV are made through a dealer who has
executed a dealer agreement with respect to a Fund, IMDI may, at the time of
purchase, pay the dealer out of IMDI's own resources a commission to compensate
the dealer for its distribution assistance in connection with the retirement
plan's investment. Refer to the NAV Commission Table on page 16 of this
Prospectus. A CDSC of 1.00% will be imposed on such purchases in the event of
certain redemption transactions within 24 months following such purchases.
Please contact IMDI for additional information.

Class A shares can also be purchased without an initial sales charge, but
subject to a CDSC of 1.00% during the first 24 months, by: (a) any state, county
or city (or any instrumentality, department, authority or agency of such
entities) that is prohibited by applicable investment laws from paying a sales
charge or commission when purchasing shares of a registered investment
management company (an "eligible governmental authority"), and (b) trust
companies, bank trust departments, credit unions, savings and loans and other
similar organizations in their fiduciary capacity or for their own accounts,
subject to any minimum requirements set by IMDI (currently, these criteria
require that the amount invested or to be invested in the subsequent 13-month
period totals at least $250,000). In either case, IMDI may pay commissions to
dealers that provide distribution assistance on the same basis as in the
preceding paragraph.

Class A shares of a Fund may also be purchased without a sales charge in
connection with certain liquidation, merger or acquisition transactions
involving other investment companies or personal holding companies. Additional
information on reductions or waivers may be obtained from IMDI at the address
listed on the cover of the Prospectus.

CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE -- CLASS B AND CLASS C SHARES

Class B and Class C shares are offered at NAV per share without a front end
sales charge. Class C shares redeemed within one year of purchase will be
subject to a CDSC of 1%, and Class B shares redeemed within six years of
purchase will be subject to a CDSC at the rates set forth below. This charge
will be assessed on an amount equal to the lesser of the current market value or
the original purchase cost of the shares being redeemed. Accordingly, you will
not be assessed a CDSC on increases in account value above the initial purchase
price, including shares derived from dividends or capital gains reinvested. In
determining whether a CDSC applies to a redemption, the calculation will be
determined in a manner that results in the lowest possible rate being charged.
It will be assumed that your redemption comes first from shares you have held
beyond the requisite maximum holding period or those you acquire through
reinvestment of dividends or capital gain, and next from the shares you have
held the longest during the requisite holding period.

Proceeds from the CDSC are paid to IMDI. The proceeds are used, in whole or
in part, to defray its expenses related to providing each Fund with distribution
services in connection with the sale of Class B and Class C shares, such as
compensating selected dealers and agents for selling these shares. The
combination of the CDSC and the distribution and service fees makes it possible
for a Fund to sell Class B or Class C shares without deducting a sales charge at
the time of the purchase.

In the case of Class B shares, the amount of the CDSC, if any, will vary
depending on the number of months from the time you purchase your shares until
the time you redeem them. Solely for purposes of determining this holding
period, any purchases you make during the quarter will be aggregated and deemed
to have been made on the last day of the quarter. In the case of Class C shares,
solely for purposes of determining this holding period, any purchases you make
during a month will be deemed to have been made on the last day of the month.

<TABLE>
<CAPTION>
CONTINGENT DEFERRED
CLASS B SHARES: SALES CHARGE AS A
PERCENTAGE OF DOLLAR
AMOUNT SUBJECT TO
YEAR SINCE PURCHASE CHARGE
- ------------------- --------------------
<S> <C>
First............................................ 5%
Second........................................... 4%
Third............................................ 3%
Fourth........................................... 3%
Fifth............................................ 2%
Sixth............................................ 1%
Seventh and thereafter........................... 0%
</TABLE>

IMDI currently intends to pay to dealers a sales commission of 4% of the
sale price of Class B shares they have sold, and will receive the entire amount
of the CDSC paid by shareholders on the redemption of Class B shares to finance
the 4% commission and related marketing expenses.

With respect to Class C shares, IMDI currently intends to pay to dealers a
sales commission of 1% of the sale price of Class C shares that they have sold,
a portion of which is to compensate the dealers for providing Class C
shareholder account services during the first year of investment. IMDI will
receive the entire amount of the CDSC paid by shareholders on the redemption of
Class C shares to finance the 1% commission and related marketing expenses.

Pursuant to separate distribution plans for the Funds' Class B and Class C
shares, IMDI bears various promotional and sales related expenses, including the
cost of printing and mailing prospectuses to persons other than shareholders.
Under the Funds' Class B Plan, IMDI retains 0.75% of the continuing 1.00%
service/distribution fee assessed to Class B shareholders, and pays a continuing
service fee to qualified dealers at an annual rate of 0.25% of qualified
investments. Under the Class C Plan, IMDI pays continuing service/distribution
fees to qualified dealers at an annual rate of 1.00% of qualified

17
<PAGE> 18

investments after the first year of investment (0.25% of which represents a
service fee).

CONVERSION OF CLASS B SHARES: Your Class B shares and an appropriate
portion of both reinvested dividends and capital gains on those shares will be
converted into Class A shares automatically no later than the month following
eight years after the shares were purchased, resulting in lower annual
distribution fees. If you exchanged Class B shares into a Fund from Class B
shares of another Ivy or Mackenzie fund, the calculation will be based on the
time the shares in the original fund were purchased.

WAIVER OF CONTINGENT DEFERRED SALES CHARGE: The CDSC is waived for (i)
redemptions in connection with distributions not exceeding 12% annually of the
initial account balance (i.e., the value of the shareholder's Class B or Class C
Fund account at the time of the initial distribution) (ia) following retirement
under a tax qualified retirement plan, or (ib) upon attaining age 59 1/2 in the
case of an IRA, a custodial account pursuant to section 403(b)(7) of the Code or
a Keogh Plan; (ii) redemption resulting from tax-free return of an excess
contribution to an IRA; or (iii) any partial or complete redemption following
the death or disability (as defined in Section 72(m)(7) of the Code) of a
shareholder from an account in which the deceased or disabled is named, provided
that the redemption is requested within one year of death or disability. IMDI
may require documentation prior to waiver of the CDSC.

ARRANGEMENTS WITH BROKER-DEALERS AND OTHERS: IMDI may, at its own expense,
pay concessions in addition to those described above to dealers that satisfy
certain criteria established from time to time by IMDI. These conditions relate
to increasing sales of shares of the Funds over specified periods and to certain
other factors. These payments may, depending on the dealer's satisfaction of the
required conditions, be periodic and may be up to (i) 0.25% of the value of Fund
shares sold by the dealer during a particular period, and (ii) 0.10% of the
value of Fund shares held by the dealer's customers for more than one year,
calculated on an annual basis.

HOW TO REDEEM SHARES

You may redeem your Fund shares through your registered securities
representative, by mail, or by telephone. A CDSC may apply to certain Class A
share redemptions, to Class B share redemptions prior to conversion and to Class
C shares that are redeemed within one year of purchase. All redemptions are made
at the NAV next determined after a redemption request has been received in good
order. Requests for redemptions must be received by 4:00 p.m. Eastern time to be
processed at the NAV for that day. Any redemption request in good order that is
received after 4:00 p.m. Eastern time will be processed at the price determined
on the following business day. IF SHARES TO BE REDEEMED WERE PURCHASED BY CHECK,
PAYMENT OF THE REDEMPTION MAY BE DELAYED UNTIL THE CHECK HAS CLEARED OR FOR UP
TO 15 DAYS AFTER THE DATE OF PURCHASE. If you own shares of more than one class
of a Fund, the Fund will redeem first the shares having the highest 12b-1 fees;
any shares subject to a CDSC will be redeemed last unless you specifically elect
otherwise.

When shares are redeemed, a Fund generally sends you payment on the next
business day. Under unusual circumstances, a Fund may suspend redemptions or
postpone payment to the extent permitted by Federal securities laws. The
proceeds of the redemption may be more or less than the purchase price of your
shares, depending upon, among other factors, the market value of the Fund's
securities at the time of the redemption. If the redemption is for over $50,000,
or the proceeds are to be sent to an address other than the address of record,
or an address change has occurred in the last 30 days, it must be requested in
writing with a signature guarantee. See "Signature Guarantees," below.

If you are not certain of the requirements for a redemption, please contact
IMSC at 1-800-777-6472.

THROUGH YOUR REGISTERED SECURITIES DEALER: The Dealer is responsible for
promptly transmitting redemption orders. Redemptions requested by dealers will
be made at the NAV (less any applicable CDSC) determined at the close of regular
trading (4:00 p.m. Eastern time) on the day that a redemption request is
received in good order by IMSC.

BY MAIL: Requests for redemption in writing are considered to be in "proper
or good order" if they contain the following:

- Any outstanding certificate(s) for shares being redeemed.

- A letter of instruction, including the account registration, fund number,
account number, and dollar amount or number of shares to be redeemed.

- Signatures of all registered owners whose names appear on the account.

- Any required signature guarantees.

- Other supporting legal documentation, if required (in the case of estates,
trusts, guardianships, corporations, unincorporated associations
retirement plan trustees or others acting in representative capacities).

The dollar amount or number of shares indicated for redemption must not
exceed the available shares or NAV of your account at the next-determined
prices. If your request exceeds these limits, then the trade will be rejected in
its entirety.

Mail your request to IMSC at one of the addresses on page 15 of this
Prospectus.

BY TELEPHONE: Individual and joint accounts may redeem up to $50,000 per
day over the telephone by contacting IMSC at 1-800-777-6472. In times of unusual
economic or market changes, the telephone redemption privilege may be difficult
to implement. If you are unable to execute your transaction by telephone, you
may want to consider placing the order in writing and sending it by mail or
overnight courier.

Checks will be made payable to the current account registration and sent to
the address of record. If there has been a change of address in the last 30
days, please use the instructions for redemption requests by mail described
above. A signature guarantee would be required.

Requests for telephone redemptions will be accepted from the registered
owner of the account, the designated registered representative or the registered
representative's assistant.

Shares held in certificate form cannot be redeemed by telephone.

If Section 6E of the Account Application is not completed, telephone
redemption privileges will be provided automatically. Although telephone
redemptions may be a convenient feature, you should realize that you may be
giving up a measure of security that you may otherwise have if you terminated
the privilege and redeemed your shares in writing. If you do not wish to make
telephone redemptions or let your registered representative do so on your
behalf, you must notify IMSC in writing.

Each Fund employs reasonable procedures that require personal identification
prior to acting on redemption instructions communicated by telephone to confirm
that such instructions are genuine. In the absence of such procedures, a

18
<PAGE> 19

Fund may be liable for any losses due to unauthorized or fraudulent telephone
instructions.

Receiving Your Proceeds by Federal Funds Wire: For shareholders who
established this feature at the time they opened their account, telephone
instructions will be accepted for redemption of amounts up to $50,000 ($1,000
minimum) and proceeds will be wired on the next business day to a predesignated
bank account.

In order to add this feature to an existing account or to change existing
bank account information, please submit a letter of instructions including your
bank information to IMSC at the address provided above. The letter must be
signed by all registered owners, and their signatures must be guaranteed.

Your account will be charged a fee of $10 each time redemption proceeds are
wired to your bank. Your bank may also charge you a fee for receiving a Federal
Funds wire.

Neither IMSC nor any of the Funds can be responsible for the efficiency of
the Federal Funds wire system or the shareholder's bank.

MINIMUM ACCOUNT BALANCE REQUIREMENTS

Due to the high cost of maintaining small accounts and subject to state law
requirements, a Fund may redeem the accounts of shareholders whose investment,
including sales charges paid, has been less than $1,000 for more than 12 months.
A Fund will not redeem an account unless the shareholder has been given at least
60 days' advance notice of the Fund's intention to do so. No redemption will be
made if a shareholder's account falls below the minimum due to a reduction in
the value of the Fund's portfolio securities. This provision does not apply to
IRAs, other retirement accounts and UGMA/UTMA accounts.

SIGNATURE GUARANTEES

For your protection, and to prevent fraudulent redemptions, we require a
signature guarantee in order to accommodate the following requests:

- Redemption requests over $50,000.

- Requests for redemption proceeds to be sent to someone other than the
registered shareholder.

- Requests for redemption proceeds to be sent to an address other than the
address of record.

- Registration transfer requests.

- Requests for redemption proceeds to be wired to your bank account (if this
option was not selected on your original application, or if you are
changing the bank wire information).

A signature guarantee may be obtained only from an eligible guarantor
institution as defined in Rule 17Ad-15 of the Securities Exchange Act of 1934,
as amended. An eligible guarantor institution includes banks, brokers, dealers,
municipal securities dealers, government securities dealers, government
securities brokers, credit unions, national securities exchanges, registered
securities associations, clearing agencies and savings associations. The
signature guarantee must not be qualified in any way. Notarizations from notary
publics are not the same as signature guarantees, and are not accepted.

Circumstances other than those described above may require a signature
guarantee. Please contact IMSC at 1-800-777-6472 for more information.

CHOOSING A DISTRIBUTION OPTION

You have the option of selecting the distribution option that best suits
your needs:

AUTOMATIC REINVESTMENT OPTION -- Both dividends and capital gains are
automatically reinvested at NAV in additional shares of the same class of a Fund
unless you specify one of the other options.

INVESTMENT IN ANOTHER IVY OR MACKENZIE FUND -- Both dividends and capital
gains are automatically invested at NAV in another Ivy or Mackenzie Fund of the
same class.

DIVIDENDS IN CASH/CAPITAL GAINS REINVESTED -- Dividends will be paid in
cash. Capital gains will be reinvested at NAV in additional shares of the same
class of a Fund or another Ivy or Mackenzie Fund of the same class.

DIVIDENDS AND CAPITAL GAINS IN CASH -- Both dividends and capital gains will
be paid in cash.

If you wish to have your cash distributions deposited directly to your bank
account via electronic funds transfer, ("EFT") or if you wish to change your
distribution option, please contact IMSC at 1-800-777-6472.

If you wish to have your cash distributions go to an address other than the
address of record you must provide IMSC with a letter of instruction signed by
all registered owners with signatures guaranteed.

TAX IDENTIFICATION NUMBER

In general, to avoid being subject to a 31% U.S. Federal backup withholding
tax on dividends, capital gains distributions and redemption proceeds, you must
furnish a Fund with your certified tax identification number ("TIN") and certify
that you are not subject to backup withholding due to prior underreporting of
interest and dividends to the IRS. If you fail to provide a certified TIN, or
such other tax-related certifications as a Fund may require, within 30 days of
opening your new account, each Fund reserves the right to involuntarily redeem
your account and send the proceeds to your address of record.

You can avoid the above withholding and/or redemption by correctly
furnishing your TIN, and making certain certifications, in Section 2 of the
Account Application at the time you open your new account, unless the IRS
requires that backup withholding be applied to your account.

Certain payees, such as corporations, generally are exempt from backup
withholding. Please complete IRS Form W-9 with the Account Application to claim
this exemption. If the registration is for an UGMA/UTMA account, please provide
the social security number of the minor. Non-U.S. investors who do not have a
TIN must provide, with their Account Application, a completed IRS Form W-8.

CERTIFICATES

In order to facilitate transfers, exchanges and redemptions, most
shareholders elect not to receive certificates. Should you wish to have a
certificate issued, please contact IMSC at 1-800-777-6472 and request that one
be sent to you. (Retirement plan accounts are not eligible for this service.)
Please note that if you were to lose your certificate, you would incur an
expense to replace it.

Certificates requested by telephone for shares valued up to $50,000 will be
issued to the current registration and mailed to the address of record. Should

19
<PAGE> 20

you wish to have your certificates mailed to a different address, or registered
differently from the current registration, contact IMSC at 1-800-777-6472.

EXCHANGE PRIVILEGE

Shareholders of a Fund have an exchange privilege with other Ivy and
Mackenzie funds (except Ivy International Fund unless they have an existing Ivy
International Fund account). The Funds reserve the right to reject, for any
reason, any exchange order.

Class A shareholders may exchange their outstanding Class A shares for Class
A shares of another Ivy or Mackenzie fund on the basis of the relative NAV per
Class A share, plus an amount equal to the difference between the sales charge
previously paid on the outstanding Class A shares and the sales charge payable
at the time of the exchange on the new Class A shares. Incremental sales charges
are waived for outstanding Class A shares that have been invested for 12 months
or longer.

Class B (and Class C) shareholders may exchange their outstanding Class B
(or Class C) shares for Class B (or Class C) shares of another Ivy or Mackenzie
fund on the basis of the relative NAV per Class B (or Class C) share, without
the payment of any CDSC that would otherwise be due upon the redemption of Class
B (or Class C) shares. Class B shareholders who exercise the exchange privilege
would continue to be subject to the original Fund's CDSC schedule (or period)
following an exchange if such schedule is higher (or longer) than the CDSC for
the new Class B shares.

Class I shareholders may exchange their outstanding Class I shares for Class
I shares of another Ivy or Mackenzie fund on the basis of the relative NAV per
Class I share.

Shares resulting from the reinvestment of dividends and other distributions
will not be charged an initial sales charge or a CDSC when exchanged into
another Ivy or Mackenzie fund.

Exchanges are considered to be taxable events, and may result in a capital
gain or a capital loss for tax purposes. Before executing an exchange, you
should obtain and read the prospectus and consider the investment objective of
the fund to be purchased. Shares must be uncertificated in order to execute an
exchange. Exchanges are available only in states where they can be legally made.
This privilege is not intended to provide shareholders a means by which to
speculate on short-term movements in the market. The Funds reserve the right to
limit the frequency of exchanges. Exchanges are accepted only if the
registrations of the two accounts are identical. Amounts to be exchanged must
meet minimum investment requirements for the Ivy or Mackenzie fund into which
the exchange is made. It is the policy of the Funds to discourage the use of the
exchange privilege for the purpose of timing short-term market fluctuations. To
protect the interests of other shareholders of a Fund, a Fund may cancel the
exchange privileges of any persons that, in the opinion of the Fund, are using
market timing strategies or are making more than five exchanges per owner or
controlling person per calendar year.

With respect to shares subject to a CDSC, if less than all of an investment
is exchanged out of a Fund, the shares exchanged will reflect, pro rata, the
cost, capital appreciation and/or reinvestment of distributions of the original
investment as well as the original purchase date, for purposes of calculating
any CDSC for future redemptions of the exchanged shares.

An investor who was a shareholder of American Investors Income Fund, Inc. or
American Investors Growth Fund, Inc. prior to October 31, 1988, or a shareholder
of the Ivy Funds prior to December 31, 1991, who became a shareholder of the
Fund as a result of a reorganization or merger between the Funds may exchange
between funds without paying a sales charge. An investor who was a shareholder
of American Investors Income Fund, Inc. or American Investors Growth Fund, Inc.
on or after October 31, 1988, who became a shareholder of the Fund as a result
of the reorganization between the Funds will receive credit toward any
applicable sales charge imposed by any Ivy or Mackenzie fund into which an
exchange is made.

In calculating the sales charge assessed on an exchange, shareholders will
be allowed to use the Rights of Accumulation privilege.

EXCHANGES BY TELEPHONE: If Section 6D of the Account Application is not
completed, telephone exchange privileges will be provided automatically.
Although telephone exchanges may be a convenient feature, you should realize
that you may be giving up a measure of security that you may otherwise have if
you terminated the privilege and exchanged your shares in writing. If you do not
wish to make telephone exchanges or let your registered representative do so on
your behalf, you must notify IMSC in writing.

In order to execute an exchange, please contact IMSC at 1-800-777-6472. Have
the account number of your current fund and the exact name in which it is
registered available to give to the telephone representative.

Each Fund employs reasonable procedures that require personal identification
prior to acting on exchange instructions communicated by telephone to confirm
that such instructions are genuine. In the absence of such procedures, a Fund
may be liable for any losses due to unauthorized or fraudulent telephone
instructions.

EXCHANGES IN WRITING: In a letter, request an exchange and provide the
following information:

- The name and class of the fund whose shares you currently own.

- Your account number.

- The name(s) in which the account is registered.

- The name of the fund in which you wish your exchange to be invested.

- The number of shares or the dollar amount you wish to exchange.

The request must be signed by all registered owners.

REINVESTMENT PRIVILEGE

Investors who have redeemed Class A shares of a Fund have a one-time
privilege of reinvesting all or a part of the proceeds of the redemption back
into Class A shares of that Fund at NAV (without a sales charge) within 60 days
after the date of redemption. IN ORDER TO REINVEST WITHOUT A SALES CHARGE,
SHAREHOLDERS OR THEIR BROKERS MUST INFORM IMSC THAT THEY ARE EXERCISING THE
REINVESTMENT PRIVILEGE AT THE TIME OF REINVESTMENT. The tax status of a gain
realized on a redemption generally will not be affected by the exercise of the
reinvestment privilege, but a loss realized on a redemption generally may be
disallowed by the IRS if the reinvestment privilege is exercised within 30 days
after the redemption. In addition, upon a reinvestment, the shareholder may not
be permitted to take into account sales charges incurred on the original
purchase of shares in computing their taxable gain or loss.

SYSTEMATIC WITHDRAWAL PLAN

20
<PAGE> 21

Payments (minimum distribution amount -- $50) from your account can be made
monthly, quarterly, semi-annually, annually or on a selected monthly basis, to
yourself or any other designated payee. You may elect to have your systematic
withdrawal paid directly to your bank account via EFT, at no charge. Share
certificates must be unissued (i.e., held by a Fund) while the plan is in
effect. A Systematic Withdrawal Plan may not be established if you are currently
participating in the Automatic Investment Method. For more information, please
contact IMSC at 1-800-777-6472.

If payments you receive through the Systematic Withdrawal Plan exceed the
dividends and capital appreciation of your account, you will be reducing the
value of your account. Additional investments made by shareholders participating
in the Systematic Withdrawal Plan must equal at least $1,000 while the plan is
in effect. However, it may not be advantageous to purchase additional Class A,
Class B or Class C shares when you have a Systematic Withdrawal Plan, because
you may be subject to an initial sales charge on your purchase of Class A shares
or to a CDSC imposed on your redemptions of Class B or Class C shares. In
addition, redemptions are taxable events.

Amounts paid to you through the Systematic Withdrawal Plan are derived from
the redemption of shares in your account. Any applicable CDSC will be assessed
upon the redemptions. A CDSC will not be assessed on withdrawals not exceeding
12% annually of the initial account balance when the Systematic Withdrawal Plan
was started.

Should you wish at any time to add a Systematic Withdrawal Plan to an
existing account or change payee instructions, you will need to submit a written
request, signed by all registered owners, with signatures guaranteed.

Retirement accounts are eligible for Systematic Withdrawal Plans. Please
contact IMSC at 1-800-777-6472 to obtain the necessary paperwork to establish a
plan.

If the U.S. Postal Service cannot deliver your checks, or if deposits to a
bank account are returned for any reason, your redemptions will be discontinued.

AUTOMATIC INVESTMENT METHOD

You may authorize an investment to be automatically drawn each month from
your bank for investment in Fund shares by completing Sections 6A and 7B of the
Account Application. Attach a "voided" check to your Account Application. At
pre-specified intervals, your bank account will be debited and the proceeds will
be credited to your Ivy account. The minimum investment under this plan is $50
per month ($25 per month for retirement plans). There is no charge to you for
this program.

You may terminate or suspend your Automatic Investment Method by telephone
at any time by contacting IMSC at 1-800-777-6472.

If you have investments being withdrawn from a bank account and we are
notified that the account has been closed, your Automatic Investment Method will
be discontinued.

CONSOLIDATED ACCOUNT STATEMENTS

Shareholders with two or more Ivy or Mackenzie fund accounts having the same
taxpayer I.D. number will receive a single quarterly account statement, unless
otherwise specified. This feature consolidates the activity for each account
onto one statement. Requests for quarterly consolidated statements for all other
accounts must be submitted in writing and must be signed by all registered
owners.

RETIREMENT PLANS

The Ivy and Mackenzie family of funds offer several tax-sheltered retirement
plans that may fit your needs:

- IRA (Individual Retirement Account)

- 401(k), Money Purchase Pension and Profit Sharing Plans

- SEP-IRA (Simplified Employee Pension Plan)

- 403(b)(7) Plan

- SIMPLE Plans (Individual Retirement Account and 401(k))

Minimum initial and subsequent investments for retirement plans are $25.

Investors Bank & Trust, which serves as custodian or trustee under the
retirement plan prototypes available from each Fund, charges certain nominal
fees for annual maintenance. A portion of these fees is remitted to IMSC, as
compensation for its services to the retirement plan accounts maintained with
each Fund.

Distributions from retirement plans are subject to certain requirements
under the Code. Certain documentation, including IRS Form W4-P, must be provided
to IMSC prior to taking any distribution. Please contact IMSC for details. The
Ivy and Mackenzie family of funds and IMSC assume no responsibility to determine
whether a distribution satisfies the conditions of applicable tax laws, and will
not be responsible for any penalties assessed. For additional information,
please contact your broker, tax adviser or IMSC.

Please call IMSC at 1-800-777-6472 for complete information kits describing
the plans, their benefits, restrictions, provisions and fees.

SHAREHOLDER INQUIRIES

Inquiries regarding the Funds should be directed to IMSC at 1-800-777-6472.

21
<PAGE> 22

[This Page Intentionally Left Blank]
<PAGE> 23

ACCOUNT APPLICATION

IVY BOND FUND
IVY EMERGING GROWTH FUND
---------------------
IVY GROWTH FUND ACCOUNT NUMBER
IVY GROWTH WITH INCOME FUND

<TABLE>
<S> <S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
FUND 101/ 1 / 2 1 / 2 0 / 1 0 / X
USE ------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
ONLY Dealer # Branch # Rep # Acct Type Soc Cd Div Cd CG Cd Exc Cd Red Cd
- -----------------------------------------------------------------------------------------------------------------------------------
1 [ ] Individual ------------------------------------------------------------
Regis- [ ] Joint Tenant Owner, Custodian or Trustee
tration [ ] Estate
[ ] UGMA/UTMA ------------------------------------------------------------
[ ] Corporation Co-owner or Minor
[ ] Partnership
[ ] Sole Proprietor ------------------------------------------------------------
[ ] Trust Minor's State of Residence

---------------------- ------------------------------------------------------------
Date of Trust Street
[ ] Other _____________
------------------------------------------------------------
----------------------- City State Zip Code
- - - -
-------------------- ---------------------
Phone Number -- Day Phone Number -- Evening
- -----------------------------------------------------------------------------------------------------------------------------------

- -----------------------------------------------------------------------------------------------------------------------------------
2 - - or - Citizenship / / U.S. / / Other
Tax --------------------------- ------------------------- ------
ID# Social Security Number Tax Identification Number
UNDER PENALTIES OF PERJURY, I CERTIFY BY SIGNING IN SECTION 8 BELOW THAT: (1) THE NUMBER SHOWN IN
THIS SECTION IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (TIN), AND (2) I AM NOT SUBJECT TO BACKUP
WITHHOLDING BECAUSE: (A) I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE (IRS) THAT I AM
SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR (B)
THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING. (CROSS OUT ITEM (2) IF
YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF
UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN.) PLEASE SEE THE "TAX IDENTIFICATION
NUMBER" SECTION OF THE PROSPECTUS FOR ADDITIONAL INFORMATION ON COMPLETING THIS SECTION.
- -----------------------------------------------------------------------------------------------------------------------------------

- -----------------------------------------------------------------------------------------------------------------------------------
3 The undersigned ("Dealer") agrees to all applicable provisions in this Application, guarantees the signature and
Dealer legal capacity of the Shareholder, and agrees to notify IMSC of any purchases made under a Letter of Intent or Rights of
Informa- Accumulation.
tion
------------------------------------------------------------ ----------------------------------------------------------
Dealer Name Representative's Name and Number

------------------------------------------------------------ ----------------------------------------------------------
Branch Office Address Representative's Phone Number

------------------------------------------------------------ ----------------------------------------------------------
City State Zip Code Authorized Signature of Dealer
- -----------------------------------------------------------------------------------------------------------------------------------

- -----------------------------------------------------------------------------------------------------------------------------------
4 A. Enclosed is my check for $ _______________($1,000 minimum) made payable to the appropriate Fund.
Invest- B. Please invest in [ ] Class A shares [ ] Class B shares [ ] Class C shares [ ] Class I shares (Ivy
ments Bond Fund only) of the following Fund(s):
$ _______________ Ivy Bond Fund
$ _______________ Ivy Emerging Growth Fund
$ _______________ Ivy Growth Fund
$ _______________ Ivy Growth with Income Fund
C. I qualify for a reduced sales charge due to the following privilege (applies only to Class A shares):
[ ] New Letter of Intent (if ROA or 90-day backdate privilege is applicable, provide account(s) information
below.)
[ ] ROA with the account(s) listed below.
[ ] Existing Letter of Intent with account(s) listed below.

------------------------------------ -------------------------
Fund Name Account Number [ ] or New

------------------------------------ ------------------------- [ ] or New
Fund Name Account Number

If establishing a Letter of Intent, you will need to purchase Class A shares over a thirteen-month period
in accordance with the provisions in the Prospectus. The aggregate amount of these purchases will be
at least equal to the amount indicated below (see Prospectus for minimum amount required for reduced sales charges).
[ ] $50,000 (Except Ivy Bond Fund) [ ] $100,000 [ ] $250,000 [ ] $500,000
D. FOR DEALER USE ONLY
Confirmed trade orders: --
--------------- --------------- ------- ---------------
Confirm Number Number of Shares Trade Date
- -----------------------------------------------------------------------------------------------------------------------------------

- -----------------------------------------------------------------------------------------------------------------------------------

5 A. I would like to reinvest dividends and capital gains into additional shares of the same class in this account at
Distri- net asset value unless a different option is checked below.
bution B. [ ] Reinvest all dividends and capital gains into additional shares of the same class in an account in
Options a different Ivy or Mackenzie fund.

---------------------------------------------- ----------------------------------- [ ] New Account
Fund Name Account Number

C. [ ] Pay all dividends in cash and reinvest capital gains into additional shares of the same class in this account
or an account in a different Ivy or Mackenzie fund.

---------------------------------------------- ----------------------------------- [ ] New Account
Fund Name Account Number
D. [ ] Pay all dividends and capital gains in cash.
I REQUEST THE ABOVE CASH DISTRIBUTION, SELECTED IN C OR D ABOVE, BE:
[ ] Sent to the address listed in the registration.
[ ] Sent to the special payee listed in Section 7A [ ] (By Mail)
7B [ ] (By E.F.T.)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE> 24
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
A. [ ] AUTOMATIC INVESTMENT METHOD (AIM)
I wish to invest [ ] once per month. My bank account will be debited on or about the
[ ] twice _________________ day of the month*
[ ] 3 times _________________ day of the month
[ ] 4 times _________________ day of the month
_________________ day of the month
Please invest $ ________________ each period starting in the month of __________ in Class A [ ] or Class B [ ] or
Dollar Amount Month
Class C [ ] of ____________________________ .
Fund Name
[ ] I have attached a voided check to ensure my correct bank account will be debited.
B. [ ] SYSTEMATIC WITHDRAWAL PLANS**
I wish to automatically withdraw funds from my [ ] Monthly [ ] Quarterly [ ] Semiannually [ ] Annually
account in Class A [ ] or Class B [ ] or Class C [ ]
of _____________________________ I request the distribution be:
Fund Name [ ] Sent to the address listed in the registration.
[ ] Sent to the special payee listed in Section 7.
[ ] Once [ ] Twice [ ] 3 times [ ] 4 times per month [ ] Invested into additional shares of the same
class of a different Ivy or Mackenzie
fund: ____________________________________
Fund Name
_____________________________________
Account Number
Amount $ _______________, starting on or about the ________ day of _____________________________
Minimum $50 month*
________ day of _____________________________
month
________ day of _____________________________
month
NOTE: Account minimum: $5,000 in shares at current offering price
C. [ ] FEDERAL FUNDS WIRE FOR REDEMPTION PROCEEDS**
I authorize the Agent to honor telephone instructions for the redemption of Fund shares up to $50,000. Proceeds may
be wire transferred to the bank account designated ($1,000 minimum). (COMPLETE SECTION 7B)
D. [ ] TELEPHONIC EXCHANGES** [ ] YES [ ] NO
I authorize exchanges by telephone among the Ivy and Mackenzie family of funds, upon instructions from any
authorized person as more fully described in the Prospectus. To change this option once established, written
instructions must be received from the shareholder of record or the current registered representative.
If neither box is checked, the telephone exchange privilege will be provided automatically.
E. [ ] TELEPHONIC REDEMPTIONS** [ ] YES [ ] NO
The Fund or its agents are authorized to honor telephone instructions from any authorized person as more fully
described in the Prospectus for the redemption of Fund shares. The amount of the redemption shall not exceed $50,000
and the proceeds are to be payable to the shareholder of record and mailed to the address of record. To change this
option once established, written instructions must be received from the shareholder of record or the current
registered representative.
If neither box is checked, the telephone exchange privilege will be provided automatically.
* There must be a period of at least seven calendar days between each investment/withdrawal period.
** This option may not be selected if shares are issued in certificate form.
- ----------------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------------
7 A. MAILING ADDRESS B. FED WIRE / E.F.T. INFORMATION
Special -------------------------------------------------------------------------------------------------------------------------
Payee Please send all disbursements to this
special payee

------------------------------------------ ------------------------------------------------------------
Name of Bank or Individual Financial Institution

------------------------------------------ ------------------------------------------------------------
Account Number (if applicable) ABA # Account #

------------------------------------------ ------------------------------------------------------------
Street Street

------------------------------------------ ------------------------------------------------------------
City/State/Zip City/State/Zip
(Please attach a voided check)
- ----------------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------------
8 Investors should be aware that failure to check "No" under Section 6D or 6E above means that the Telephone
Signa- Exchange/Redemptions Privileges will be provided. The Funds employ reasonable procedures that require personal identification
tures prior to acting on exchange/redemption instructions communicated by telephone to confirm that such instructions are genuine.
In the absence of such procedures, a Fund may be liable for any losses due to unauthorized or fraudulent telephone
instructions. Please see "Exchange Privilege" and "How to Redeem Shares" in the Prospectus for more information on these
privileges.

I certify to my legal capacity to purchase or redeem shares of the Fund for my own account or for the account of the
organization named in Section 1. I have received a current Prospectus and understand its terms are incorporated in this
application by reference. I am certifying my taxpayer information as stated in Section 2.

THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS
REQUIRED TO AVOID BACKUP WITHHOLDING.

------------------------------------------------------------------- ---------------------------------------
Signature of Owner, Custodian, Trustee or Corporate Officer Date

------------------------------------------------------------------- ---------------------------------------
Signature of Joint Owner, Co-Trustee or Corporate Officer Date

- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

01IUSXX0497 (Remember to Sign Section 8)

<PAGE> 1
IVY FUNDS

April 30, 1997

Ivy
International
Equity
Funds

- -----------------------
Prospectus
- -----------------------

Ivy Management, Inc.
Via Mizner Financial
Plaza
700 South Federal Hwy.
Boca Raton, FL 33432
1-800-456-5111

THROUGHOUT THE
CENTURIES,
THE CASTLE KEEP HAS
BEEN A SOURCE
OF LONG-RANGE VISION
AND STRATEGIC
ADVANTAGE.

Ivy Fund (the "Trust") is a registered investment company currently
consisting of sixteen separate portfolios. Ten of these portfolios, as
identified below (the "Funds"), are described in this Prospectus. Each Fund has
its own investment objective and policies, and your interest is limited to the
Fund in which you own shares.
The ten Ivy international equity funds are:

Ivy Asia Pacific Fund
Ivy Canada Fund
Ivy China Region Fund
Ivy Global Fund
Ivy Global Natural Resources Fund
Ivy Global Science & Technology Fund
Ivy International Fund
Ivy International Small Companies Fund
Ivy Latin America Strategy Fund
Ivy New Century Fund

This Prospectus sets forth concisely the information about the Funds
that a prospective investor should know before investing. Please read it
carefully and retain it for future reference. Additional information about the
Funds is contained in the Statement of Additional Information for the Funds
dated April 30, 1997 (the "SAI"), which has been filed with the Securities and
Exchange Commission ("SEC") and is incorporated by reference into this
Prospectus. The SAI is available upon request and without charge from the Trust
at the Distributor's address and telephone number below. The SEC maintains a web
site (http://www.sec.gov) that contains the SAI and other material incorporated
by reference.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

TABLE OF CONTENTS
<TABLE>
<S> <C>
Expense Information . . . . . . . . . . . . . . . . . 2
The Funds Financial Highlights . . . . . . . . . . . 6
Investment Objectives and Policies . . . . . . . . . 12
Risk Factors and Investment Techniques . . . . . . . 16
Organization and Management of the Funds . . . . . . 21
Investment Manager . . . . . . . . . . . . . . . . . 21
Fund Administration and Accounting . . . . . . . . . 22
Transfer Agent . . . . . . . . . . . . . . . . . . . 22
Alternative Purchase Arrangements . . . . . . . . . . 22
Dividends and Taxes . . . . . . . . . . . . . . . . . 22
Performance Data . . . . . . . . . . . . . . . . . . 23
How to Buy Shares . . . . . . . . . . . . . . . . . . 23
How Your Purchase Price is Determined . . . . . . . . 24
How Each Fund Values its Shares . . . . . . . . . . . 24
Initial Sales Charge Alternative-Class A Shares . . . 24
Contingent Deferred Sales Charge-Class A Shares . . . 25
Qualifying for a Reduced Sales Charge . . . . . . . . 25
Contingent Deferred Sales Charge Alternative-
Class B and Class C Shares . . . . . . . . . 26
How to Redeem Shares . . . . . . . . . . . . . . . . 27
Minimum Account Balance Requirements . . . . . . . . 28
Signature Guarantees . . . . . . . . . . . . . . . . 28
Choosing a Distribution Option . . . . . . . . . . . 28
Tax Identification Number . . . . . . . . . . . . . . 28
Certificates . . . . . . . . . . . . . . . . . . . . 28
Exchange Privilege . . . . . . . . . . . . . . . . . 28
Reinvestment Privilege . . . . . . . . . . . . . . . 29
Systematic Withdrawal Plan . . . . . . . . . . . . . 29
Automatic Investment Method . . . . . . . . . . . . . 30
Consolidated Account Statements . . . . . . . . . . . 30
Retirement Plans . . . . . . . . . . . . . . . . . . 30
Shareholder Inquiries . . . . . . . . . . . . . . . . 30
</TABLE>

<TABLE>
<S> <C> <C> <C>
BOARD OF TRUSTEES OFFICERS TRANSFER AGENT INVESTMENT MANAGER
John S. Anderegg, Jr. Michael G. Landry, Chairman Ivy Mackenzie Ivy Management, Inc.
Paul H. Broyhill Keith J. Carlson, President Services Corp. 700 South Federal Highway
Keith J. Carlson James W. Broadfoot, Vice President P.O. Box 3022 Boca Raton, FL 33432
Stanley Channick C. William Ferris, Boca Raton, FL 33431-0922 1-800-456-5111
Frank W. DeFriece, Jr. Secretary/Treasurer 1-800-777-6472 DISTRIBUTOR
Roy J. Glauber AUDITORS Ivy Mackenzie
Michael G. Landry LEGAL COUNSEL Coopers & Lybrand L.L.P. Distributors, Inc.
Joseph G. Rosenthal Dechert Price & Rhoads Ft. Lauderdale, FL Via Mizner Financial Plaza
Richard N. Silverman Boston, MA 700 South Federal Highway
J. Brendan Swan Boca Raton, FL 33432
CUSTODIAN 1-800-456-5111
Brown Brothers Harriman & Co.
Boston, MA
</TABLE>
<PAGE> 2

EXPENSE INFORMATION

The tables and examples below are designed to assist you in understanding
the various costs and expenses that you will bear directly or indirectly as an
investor in the Funds. Unless otherwise noted, the information is based on each
Fund's expenses during fiscal year 1996.

SHAREHOLDER TRANSACTION EXPENSES

All Funds offer Class A, Class B and Class C shares. Class I shares are
offered by Ivy Global Science & Technology Fund, Ivy International Fund and Ivy
International Small Companies Fund only (generally referred to herein as the
"Class I Funds").

<TABLE>
<CAPTION>
MAXIMUM SALES LOAD MAXIMUM CONTINGENT
IMPOSED ON PURCHASES DEFERRED SALES CHARGE
ALL FUNDS (AS A % OF (AS A % OF ORIGINAL
OFFERING PRICE) PURCHASE PRICE)
-------------------- ---------------------
<S> <C> <C>
Class A..................................................... 5.75%(1) None(2)
Class B..................................................... None 5.00%(3)
Class C..................................................... None 1.00%(4)
Class I..................................................... None None
</TABLE>

None of the Funds charges a redemption fee, an exchange fee, or a sales load on
reinvested dividends.
- ---------------
(1) Class A shares may be purchased under a variety of plans that provide for
the reduction or elimination of the sales charge.
(2) A contingent deferred sales charge ("CDSC") may apply to the redemption of
Class A shares that are purchased without an initial sales charge. See
"Purchases of Class A Shares at Net Asset Value" and "Contingent Deferred
Sales Charge -- Class A Shares."
(3) The maximum CDSC on Class B shares applies to redemptions during the first
year after purchase. The charge declines to 4% during the second year; 3%
during the third and fourth years; 2% during the fifth year; 1% during the
sixth year; and 0% in the seventh year and thereafter.
(4) The CDSC on Class C shares applies only to redemptions during the first year
after purchase.

2
<PAGE> 3

ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT OTHER OPERATING
FEES 12B-1 SERVICE/ EXPENSES EXPENSES
(AFTER EXPENSE DISTRIBUTION (AFTER EXPENSE (AFTER EXPENSE
REIMBURSEMENTS)* FEES REIMBURSEMENTS)* REIMBURSEMENTS)*
---------------- -------------- ---------------- ----------------
<S> <C> <C> <C> <C>
IVY ASIA PACIFIC FUND**
IVY GLOBAL NATURAL RESOURCES FUND**
Class A............................................... 1.00% 0.25% 0.95% 2.20%
Class B............................................... 1.00% 1.00%(2) 0.95% 2.95%
Class C............................................... 1.00% 1.00%(2) 0.95% 2.95%
IVY CANADA FUND
Class A............................................... 0.85% 0.40% 1.54% 2.79%
Class B............................................... 0.85% 1.00%(2) 1.45% 3.30%
Class C(1)............................................ 0.85% 1.00%(2) 1.30% 3.15%
IVY CHINA REGION FUND
Class A............................................... 0.72% 0.25% 1.23% 2.20%
Class B............................................... 0.72% 1.00%(2) 1.23% 2.95%
Class C(1)............................................ 0.72% 1.00%(2) 0.99% 2.71%
IVY GLOBAL FUND
Class A............................................... 1.00% 0.25% 0.93% 2.18%
Class B............................................... 1.00% 1.00%(2) 0.94% 2.94%
Class C(1)............................................ 1.00% 1.00%(2) 1.77% 3.77%
IVY GLOBAL SCIENCE & TECHNOLOGY FUND***
Class A............................................... 0.29% 0.25% 1.65% 2.19%
Class B............................................... 0.29% 1.00%(2) 1.70% 2.99%
Class C............................................... 0.29% 1.00%(2) 1.66% 2.95%
Class I............................................... 0.29% 0.00% 1.56%(3) 1.85%
IVY INTERNATIONAL FUND
Class A............................................... 1.00% 0.25% 0.40% 1.65%
Class B............................................... 1.00% 1.00%(2) 0.45% 2.45%
Class C(1)............................................ 1.00% 1.00%(2) 0.44% 2.44%
Class I............................................... 1.00% 0.00% 0.25%(3) 1.25%
IVY INTERNATIONAL SMALL COMPANIES FUND**
Class A............................................... 1.00% 0.25% 0.95% 2.20%
Class B............................................... 1.00% 1.00%(2) 0.95% 2.95%
Class C............................................... 1.00% 1.00%(2) 0.95% 2.95%
Class I............................................... 1.00% 0.00% 0.86%(3) 1.86%
IVY LATIN AMERICA STRATEGY FUND
Class A............................................... 0.00% 0.25% 2.30% 2.55%
Class B............................................... 0.00% 1.00%(2) 2.33% 3.33%
Class C(1)............................................ 0.00% 1.00%(2) 2.46% 3.46%
IVY NEW CENTURY FUND
Class A............................................... 0.38% 0.25% 1.82% 2.45%
Class B............................................... 0.38% 1.00%(2) 1.82% 3.20%
Class C(1)............................................ 0.38% 1.00%(2) 1.78% 3.16%
</TABLE>

- ---------------

<TABLE>
<S> <C>
* Ivy Management, Inc. ("IMI") currently limits Total Fund
Operating Expenses (excluding Rule 12b-1 fees and certain
other items) for all Funds except Ivy Canada Fund and Ivy
International Fund to an annual rate of 1.95% of each Fund's
average net assets. Without expense reimbursements (or
expense offset arrangements, if applicable) Management Fees
would have been 1.00% and Total Fund Operating Expenses
(excluding Rule 12b-1 fees and certain other items) would
have increased 0.28% for each class of Ivy China Region
Fund; 0.71% for each class of Ivy Global Science &
Technology Fund; 2.34% for each class of Ivy Latin America
Strategy Fund and 0.37% for each class of Ivy New Century
Fund.
** These funds commenced operation on January 1, 1997. Expense
information is based on estimated amounts for the current
fiscal year.
*** Expense information is based on annualized amounts from July
22, 1996 (commencement of operations) to December 31, 1996.
(1) Expense information for Class C shares is based on
annualized amounts from April 30, 1996 (commencement of
operations) to December 31, 1996.
(2) Long-term investors may, as a result of the Fund's 12b-1
fees, pay more than the economic equivalent of the maximum
front-end sales charge permitted by the Rules of Fair
Practice of the National Association of Securities Dealers,
Inc. ("NASD").
(3) "Other Expenses" of Class I shares are lower than such
expenses for Class A, Class B and Class C shares. See "Fund
Administration and Accounting" in this Prospectus and
"Transfer Agent" in the SAI.
</TABLE>

3
<PAGE> 4

EXAMPLES

The following tables list the expenses that an investor would pay on a
$1,000 investment, assuming (1) 5% annual return and (2) unless otherwise noted,
redemption at the end of each time period. These examples further assume
reinvestment of all dividends and distributions, and that the percentage amounts
under "Total Fund Operating Expenses" (above) remain the same each year. THE
EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE HIGHER OR LOWER THAN THOSE SHOWN.

<TABLE>
<CAPTION>
IVY ASIA PACIFIC FUND+ 1 Year 3 Years
IVY GLOBAL NATURAL RESOURCES FUND+ ------ -------
<S> <C> <C> <C> <C>
Class A Shares*............................................. $79 $122
Class B Shares.............................................. $80(1) $121(2)
Class B Shares (no redemption).............................. $30 $ 91
Class C Shares.............................................. $40(5) $ 91
Class C Shares (no redemption).............................. $30 $ 91
</TABLE>

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
IVY CANADA FUND ------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A Shares*............................................. $84 $139 $196 $351
Class B Shares.............................................. $83(1) $132(2) $192(3) $348(4)
Class B Shares (no redemption).............................. $33 $102 $172 $348(4)
Class C Shares.............................................. $42(5) $ 97 $165 $346
Class C Shares (no redemption).............................. $32 $ 97 $165 $346
</TABLE>

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
IVY CHINA REGION FUND ------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A Shares*............................................. $79 $122 $169 $296
Class B Shares.............................................. $80(1) $121(2) $175(3) $309(4)
Class B Shares (no redemption).............................. $30 $ 91 $155 $309(4)
Class C Shares.............................................. $37(5) $ 84 $143 $304
Class C Shares (no redemption).............................. $27 $ 84 $143 $304
</TABLE>

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
IVY GLOBAL FUND ------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A Shares*............................................. $78 $122 $168 $294
Class B Shares.............................................. $80(1) $121(2) $175(3) $308(4)
Class B Shares (no redemption).............................. $30 $ 91 $155 $308(4)
Class C Shares.............................................. $48(5) $115 $194 $401
Class C Shares (no redemption).............................. $38 $115 $194 $401
</TABLE>

<TABLE>
<CAPTION>
1 Year 3 Years
IVY GLOBAL SCIENCE & TECHNOLOGY FUND ------ -------
<S> <C> <C> <C> <C>
Class A Shares*............................................. $78 $122
Class B Shares.............................................. $80(1) $122(2)
Class B Shares (no redemption).............................. $30 $ 92
Class C Shares.............................................. $40(5) $ 91
Class C Shares (no redemption).............................. $30 $ 91
Class I shares**............................................ $19 $ 58
</TABLE>

4
<PAGE> 5

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
IVY INTERNATIONAL FUND ------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A Shares*............................................. $73 $107 $142 $242
Class B Shares.............................................. $75(1) $106(2) $151(3) $259(4)
Class B Shares (no redemption).............................. $25 $ 76 $131 $259(4)
Class C Shares.............................................. $35(5) $ 76 $130 $278
Class C Shares (no redemption).............................. $25 $ 76 $130 $278
Class I Shares**............................................ $13 $ 40 $ 69 $151
</TABLE>

<TABLE>
<CAPTION>
1 Year 3 Years
IVY INTERNATIONAL SMALL COMPANIES FUND+ ------ -------
<S> <C> <C> <C> <C>
Class A Shares*............................................. $79 $122
Class B Shares.............................................. $80(1) $121(2)
Class B Shares (no redemption).............................. $30 $ 91
Class C Shares.............................................. $40(5) $ 91
Class C Shares (no redemption).............................. $30 $ 91
Class I Shares**............................................ $19 $ 58
</TABLE>

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
IVY LATIN AMERICA STRATEGY FUND ------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A Shares*............................................. $82 $132 $185 $329
Class B Shares.............................................. $84(1) $132(2) $194(3) $345(4)
Class B Shares (no redemption).............................. $34 $102 $174 $345(4)
Class C Shares.............................................. $45(5) $106 $180 $374
Class C Shares (no redemption).............................. $35 $106 $180 $374
</TABLE>

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
IVY NEW CENTURY FUND ------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A Shares*............................................. $81 $129 $181 $320
Class B Shares.............................................. $82(1) $129(2) $187(3) $333(4)
Class B Shares (no redemption).............................. $32 $ 99 $167 $333(4)
Class C Shares.............................................. $42(5) $ 97 $165 $347
Class C Shares (no redemption).............................. $32 $ 97 $165 $347
</TABLE>

- ---------------

<TABLE>
<S> <C>
* Assumes deduction of the maximum 5.75% initial sales charge
at the time of purchase and no deduction of a CDSC at the
time of redemption.
** Class I Shares are not subject to an initial sales charge at
the time of purchase, nor are they subject to the deduction
of a CDSC at the time of redemption.
+ Expense information is based on estimated amounts for the
current fiscal year.
(1) Assumes deduction of a 5% CDSC at the time of redemption.
(2) Assumes deduction of a 3% CDSC at the time of redemption.
(3) Assumes deduction of a 2% CDSC at the time of redemption.
(4) Assumes conversion to Class A shares at the end of the
eighth year, and therefore reflects Class A expenses for
years nine and ten.
(5) Assumes deduction of a 1% CDSC at the time of redemption.
</TABLE>

The purpose of the foregoing table is to assist an investor in understanding
the various costs and expenses that he or she will bear directly or indirectly.
The information presented in the table does not reflect the charge of $10 per
transaction that would apply if a shareholder elects to have redemption proceeds
wired to his or her bank account. For a more detailed discussion of the Funds'
fees and expenses, see the following sections of this Prospectus: "Organization
and Management of the Funds," "Initial Sales Charge Alternative -- Class A
Shares," and "Contingent Deferred Sales Charge Alternative -- Class B and Class
C Shares," and "Investment Advisory and Other Services" in the SAI.

5
<PAGE> 6

THE FUNDS' FINANCIAL HIGHLIGHTS

Unless otherwise noted, the tables that follow are for fiscal periods ending
December 31 of each year. The accounting firm of Coopers & Lybrand L.L.P. has
audited Ivy Canada Fund, Ivy China Region Fund, Ivy Global Fund, Ivy Global
Science & Technology Fund, Ivy Latin America Strategy Fund and Ivy New Century
Fund since their inception, and Ivy International Fund since fiscal year ended
December 31, 1992. Their report is included in these Funds' Annual Reports,
which are incorporated by reference into the SAI. The information for Ivy
International Fund for fiscal periods prior to December 31, 1992 was audited by
other independent accountants. The Annual Reports for these seven Funds contain
additional information about each Fund's performance, including a comparison to
an appropriate securities index. For a copy of your Fund's Annual Report, call
1-800-777-6472. Annual Reports are not yet available for Ivy Asia Pacific Fund,
Ivy Global Natural Resources Fund or Ivy International Small Companies Fund,
which commenced operations on January 1, 1997.

IVY CANADA FUND
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------------
1996 1995 1994(A) 1994(B) 1993(B) 1992(B) 1991(C)
SELECTED PER SHARE DATA -------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 9.21 $ 8.90 $ 9.85 $10.04 $ 7.43 $ 8.89 $ 8.55
------- ------- ------- ------- ------- ------- -------
Income (loss) from investment operations
Net investment income (loss)............... (.21) (.19)(g) (.11) (.11) (.01) (.12) (.03)
Net realized and unrealized gain (loss) on
investment transactions................... 2.29 .75 (.81) .24 3.35 (1.34) .41
------- ------- ------- ------- ------- ------- -------
Total from investment operations........ 2.08 .56 (.92) .13 3.34 (1.46) .38
------- ------- ------- ------- ------- ------- -------
Less distributions
From net investment income................. -- -- -- -- -- -- --
From net realized gain..................... 1.65 .25 -- .31 .73 -- .04
In excess of net realized gain............. -- -- -- -- -- -- --
From capital paid-in....................... -- -- .03 .01 -- -- --
------- ------- ------- ------- ------- ------- -------
Total distributions..................... 1.65 .25 .03 .32 .73 -- .04
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period............... $ 9.64 $ 9.21 $ 8.90 $ 9.85 $10.04 $ 7.43 $ 8.89
======= ======= ======= ======= ======= ======= =======
Total return(%).............................. 23.86 6.37 (9.38) 1.05 47.10 (16.42) 6.59(i)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands)..... $15,249 $19,353 $23,296 $34,549 $30,971 $11,280 $14,369
Ratio of expenses to average net assets
With expense reimbursement(%)............... -- 2.90 -- -- -- -- --
Without expense reimbursement(%)............ 2.79 3.23 2.44 2.05 2.63 2.70 2.78
Ratio of net investment income (loss) to
average net assets(%)....................... (1.78) (2.13)(g) (1.85) (1.09) (1.41) (1.39) (.52)
Portfolio turnover rate(%)................... 56 21 36 62 32 2 4
Average commission rate...................... $ .0134 N/A N/A N/A N/A N/A N/A

<CAPTION>
CLASS A
-------------------------------
1990(D) 1989(D) 1988(E)
SELECTED PER SHARE DATA ------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning of period......... $10.53 $10.15 $ 9.50
------- ------- ------
Income (loss) from investment operations
Net investment income (loss)............... .02 .15(g) .17(g)
Net realized and unrealized gain (loss) on
investment transactions................... (1.98) .50 .57
------- ------- ------
Total from investment operations........ (1.96) .65 .74
------- ------- ------
Less distributions
From net investment income................. .02 .24 .07
From net realized gain..................... -- .03 .02
In excess of net realized gain............. -- -- --
From capital paid-in....................... -- -- --
------- ------- ------
Total distributions..................... .02 .27 .09
------- ------- ------
Net asset value, end of period............... $ 8.55 $10.53 $10.15
======= ======= ======
Total return(%).............................. (18.69) 6.41 8.15
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands)..... $14,268 $16,807 $5,360
Ratio of expenses to average net assets
With expense reimbursement(%)............... -- 2.36 1.91
Without expense reimbursement(%)............ 2.89 3.14 5.05
Ratio of net investment income (loss) to
average net assets(%)....................... .16 1.57(g) 1.86(g)
Portfolio turnover rate(%)................... 0 2 3
Average commission rate...................... N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
CLASS B
------------------
1996 1995
SELECTED PER SHARE DATA ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................................................... $ 9.21 $ 8.90
------- ------
Income (loss) from investment operations
Net investment loss................................................................... (.17) (.20)(g)
Net realized and unrealized gain (loss) on investment transactions.................... 2.19 .71
------- ------
Total from investment operations................................................... 2.02 .51
------- ------
Less distributions
From net realized gain................................................................ 1.64 .20
In excess of net realized gain........................................................ -- --
------- ------
Total distributions................................................................ 1.64 .20
------- ------
Net asset value, end of period.......................................................... $ 9.59 $ 9.21
======= ======
Total return(%)......................................................................... 23.26 5.74
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands)................................................ $2,040 $1,142
Ratio of expenses to average net assets
With expense reimbursement(%).......................................................... -- 3.50
Without expense reimbursement(%)....................................................... 3.30 3.83
Ratio of net investment loss to average net assets(%)................................... (2.30) (2.73)(g)
Portfolio turnover rate(%).............................................................. 56 21
Average commission rate................................................................. $.0134 N/A

<CAPTION>
CLASS B CLASS C
---------------------- -------
1994(A) 1994(F) 1996(H)
SELECTED PER SHARE DATA ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 9.85 $10.16 $10.67
------ ------ ------
Income (loss) from investment operations
Net investment loss........................ (.09) (.02) (.14)
Net realized and unrealized gain (loss) on (.86) (.29) .72
------ ------ ------
Total from investment operations........ (.95) (.31) .58
------ ------ ------
Less distributions
From net realized gain..................... -- -- 1.63
In excess of net realized gain............. -- -- --
------ ------ ------
Total distributions..................... -- -- 1.63
------ ------ ------
Net asset value, end of period............... $ 8.90 $ 9.85 $ 9.62
====== ====== ======
Total return(%).............................. (9.64) (3.05) 6.51
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands)..... $ 741 $ 227 $ 173
Ratio of expenses to average net assets
With expense reimbursement(%)............... -- -- --
Without expense reimbursement(%)............ 3.03 2.68 3.15
Ratio of net investment loss to average net a (2.44) (1.72) (2.15)
Portfolio turnover rate(%)................... 36 62 56
Average commission rate...................... N/A N/A $.0134
</TABLE>

- ---------------

(a) For the six months ended December 31, 1994.
(b) For the year ended June 30.
(c) For the eight months ended June 30, 1991.
(d) For the year ended October 31.
(e) From November 18, 1987 (commencement of operations) to October 31, 1988.
(f) From April 1, 1994 (commencement) to June 30, 1994.
(g) Net investment income (loss) is net of expenses reimbursed by IMI.
(h) From April 30, 1996 (commencement) to December 31, 1996.
(i) Annualized.

6
<PAGE> 7

IVY CHINA REGION FUND

<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------
1996 1995 1994 1993(A)
SELECTED PER SHARE DATA --------- -------- -------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 8.58 $ 8.61 $ 11.55 $10.00
------- ------- ------- ------
Income (loss) from investment operations
Net investment income (loss)(c)........... .03 .14 .05 (.01)
Net realized and unrealized gain (loss) on
investment transactions.................. 1.74 (.01) (2.91) 1.57
------- ------- ------- ------
Total from investment operations....... 1.77 .13 (2.86) 1.56
------- ------- ------- ------
Less distributions
From net investment income................ .03 .14 .05 --
In excess of net investment income........ .02 -- .03 --
In excess of net realized gain............ -- .02 -- --
From capital paid-in...................... -- -- -- .01
------- ------- ------- ------
Total distributions.................... .05 .16 .08 .01
------- ------- ------- ------
Net asset value, end of period............... $ 10.30 $ 8.58 $ 8.61 $11.55
======= ======= ======= ======
Total return(%).............................. 20.50 1.59 (24.88) 15.65
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands)..... $15,290 $12,855 $13,180 $8,371
Ratio of expenses to average net assets
With expense reimbursement and fees paid
indirectly(%)(d).......................... 2.20 2.20 2.20 1.98
Without expense reimbursement and fees paid
indirectly(%)(d).......................... 2.48 2.73 2.76 2.45
Ratio of net investment income (loss) to
average net assets(%)(c).................... .32 1.61 .55 (.91)
Portfolio turnover rate(%)................... 22 25 4 0
Average commission rate...................... $ .0050 N/A N/A N/A
</TABLE>

<TABLE>
<CAPTION>
CLASS B CLASS C
----------------------------------------------- ---------
1996 1995 1994 1993(A) 1996(B)
SELECTED PER SHARE DATA --------- ------ ------ -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 8.58 $ 8.61 $11.55 $10.00 $ 9.44
------ ------ ------ ------ ------
Income (loss) from investment operations
Net investment income (loss)(c)........... (.04) .08 (.02) (.02) --
Net realized and unrealized gain (loss) on
investment transactions.................. 1.74 (.02) (2.92) 1.57 .89
------ ------ ------ ------ ------
Total from investment operations....... 1.70 .06 (2.94) 1.55 .89
------ ------ ------ ------ ------
Less distributions
From net investment income................ -- .08 -- -- --
In excess of net investment income........ -- -- -- -- .09
In excess of net realized gain............ -- .01 -- -- --
------ ------ ------ ------ ------
Total distributions.................... -- .09 -- -- .09
------ ------ ------ ------ ------
Net asset value, end of period............... $10.28 $ 8.58 $ 8.61 $11.55 $10.24
====== ====== ====== ====== ======
Total return(%).............................. 19.67 .83 (25.45) 15.50 9.39
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands)..... $8,995 $6,905 $7,336 $3,565 $ 449
Ratio of expenses to average net assets
With expense reimbursement and fees paid
indirectly(%)(d).......................... 2.95 2.95 2.95 2.74 2.71
Without expense reimbursement and fees paid
indirectly(%)(d).......................... 3.23 3.48 3.51 3.20 2.99
Ratio of net investment income (loss) to
average net assets(%)(c).................... (.43) .86 (.20) (1.66) (.19)
Portfolio turnover rate(%)................... 22 25 4 0 22
Average commission rate...................... $.0050 N/A N/A N/A $.0050
</TABLE>

- ---------------

(a) From October 23, 1993 (commencement of operations) to December 31, 1993.
(b) From April 30, 1996 (commencement) to December 31, 1996.
(c) Net investment income (loss) is net of expenses reimbursed by IMI.
(d) Beginning in 1995, total expenses include fees paid indirectly through an
expense offset arrangement.

7
<PAGE> 8

IVY GLOBAL FUND(G)

<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------------------------
1996 1995 1994(A) 1994(B) 1993(B) 1992(B) 1991(C)
SELECTED PER SHARE DATA --------- ------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period............................... $ 11.97 $ 11.23 $ 11.52 $ 10.62 $ 10.55 $ 9.40 $ 10.00
------- ------- ------- ------- ------- ------- -------
Income (loss) from investment
operations
Net investment income(f)........... .08 .09 -- -- .03 .06 .02
Net realized and unrealized gain
(loss) on investments............. 1.86 1.25 (.10) 1.79 .44 1.79 (.61)
------- ------- ------- ------- ------- ------- -------
Total from investment
operations..................... 1.94 1.34 (.10) 1.79 .47 1.85 (.59)
------- ------- ------- ------- ------- ------- -------
Less distributions
From net investment income......... .08 .04 -- .01 .03 .06 .01
In excess of net investment
income............................ .18 -- -- -- -- -- --
From net realized gain............. .48 .49 .09 .88 .37 .62 --
In excess of net realized gain..... -- .07 -- -- -- -- --
From capital paid-in............... -- -- .10 -- -- .02 --
------- ------- ------- ------- ------- ------- -------
Total distributions............. .74 .60 .19 .89 .40 .70 .01
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period........ $ 13.17 $ 11.97 $ 11.23 $ 11.52 $ 10.62 $ 10.55 $ 9.40
======= ======= ======= ======= ======= ======= =======
Total return(%)....................... 16.21 12.08 (1.00) 16.71 4.54 19.91 (24.65)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)........................... $24,152 $21,264 $19,327 $17,393 $12,391 $ 8,780 $ 1,667
Ratio of expenses to average net
assets
With expense reimbursement(%)........ -- 2.20 2.20 2.20 1.95 2.02 2.50
Without expense reimbursement(%)..... 2.18 2.46 2.34 2.42 2.76 2.97 11.70
Ratio of net investment income (loss)
to average net assets(%)(f).......... .58 .71 (.06) .01 .38 .82 .81
Portfolio turnover rate(%)............ 43 53 23 85 67 59 24
Average commission rate............... $ .0181 N/A N/A N/A N/A N/A N/A
</TABLE>

<TABLE>
<CAPTION>
CLASS B CLASS C
---------------------------------------------- --------
1996 1995 1994(A) 1994(D) 1996(E)
SELECTED PER SHARE DATA -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period............ $11.97 $11.23 $11.52 $12.12 $ 13.31
------ ------ ------ ------ -------
Income (loss) from investment operations
Net investment income (loss)(f).............. (.02) -- (.03) (.01) (.01)
Net realized and unrealized gain (loss) on
investments................................. 1.85 1.25 (.12) (.04) .42
------ ------ ------ ------ -------
Total from investment operations.......... 1.83 1.25 (.15) (.05) .41
------ ------ ------ ------ -------
Less distributions
In excess of net investment income........... .20 -- -- -- .30
From net realized gain....................... .48 .45 .08 .55 .48
In excess of net realized gain............... -- .06 -- -- --
From capital paid-in......................... -- -- .06 -- --
------ ------ ------ ------ -------
Total distributions....................... .68 .51 .14 .55 .78
------ ------ ------ ------ -------
Net asset value, end of period.................. $13.12 $11.97 $11.23 $11.52 $ 12.94
====== ====== ====== ====== =======
Total return(%)................................. 15.30 11.25 (1.37) (.38) 3.07
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands)........ $8,968 $4,811 $2,956 $ 376 $ 71
Ratio of expenses to average net assets
With expense reimbursement(%).................. -- 2.95 2.95 2.95 --
Without expense reimbursement(%)............... 2.94 3.21 3.09 3.17 3.77
Ratio of net investment loss to average net
assets(%)(f)................................... (.17) (.04) (.81) (.74) (1.01)
Portfolio turnover rate(%)...................... 43 53 23 85 43
Average commission rate......................... $.0181 N/A N/A N/A $ .0181
</TABLE>

- ---------------

(a) For the six months ended December 31, 1994.
(b) For the year ended June 30.
(c) From April 18, 1991 (commencement of operations) to June 30, 1991.
(d) From April 1, 1994 (commencement) to June 30, 1994.
(e) From April 30, 1996 (commencement) to December 31, 1996.
(f) Net investment income (loss) is net of expenses reimbursed by IMI.
(g) Since February 1, 1995, Ivy Global Fund's adviser has been IMI. Prior to
February 1, 1995, Ivy Global Fund's adviser was Mackenzie Investment
Management, Inc. ("MIMI").

8
<PAGE> 9

IVY GLOBAL SCIENCE & TECHNOLOGY FUND

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------- ------- -------
1996(A) 1996(A) 1996(A)
SELECTED PER SHARE DATA ------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning of period.... $10.00 $10.00 $10.00
Income from investment operations
Net investment loss(b)............... (.06) (.06) (.05)
Net realized and unrealized gain on
investments......................... 6.49 6.52 6.53
------ ------ ------
Total from investment
operations........................ 6.43 6.46 6.48
------ ------ ------
Less distributions
From net realized gain............... .03 .02 .02
------ ------ ------
Total distributions............... .03 .02 .02
------ ------ ------
Net asset value, end of period.......... $16.40 $16.44 $16.46
====== ====== ======
Total return(%)......................... 64.34 64.59 64.84
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)............................. $8,324 $3,425 $2,106
Ratio of expenses to average net assets
With expense reimbursement(%).......... 2.19 2.99 2.95
Without expense reimbursement(%)....... 2.90 3.70 3.66
Ratio of net investment loss to average
net assets(%)(b)....................... (2.18) (2.98) (2.94)
Portfolio turnover rate(%).............. 23 23 23
Average commission rate................. $.0600 $.0600 $.0600
</TABLE>

- ---------------

(a) From July 22, 1996 (commencement of operations) to December 31, 1996.
(b) Net investment loss is net of expenses reimbursed by IMI.

9
<PAGE> 10

IVY INTERNATIONAL FUND+
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
SELECTED PER SHARE DATA -------- -------- -------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 30.67 $ 27.60 $ 27.71 $ 18.88 $ 19.37 $ 16.98 $ 20.31
-------- -------- -------- -------- -------- ------- -------
Income (loss) from investment
operations
Net investment income................ .20 .25 .07 .12 .27(d) .26 .50
Net realized and unrealized gain
(loss) on investment transactions... 5.85 3.22 1.01 9.01 (.26) 2.61 (3.13)
-------- -------- -------- -------- -------- ------- -------
Total from investment
operations....................... 6.05 3.47 1.08 9.13 .01 2.87 (2.63)
-------- -------- -------- -------- -------- ------- -------
Less distributions
From net investment income........... .19 .25 .07 .08 .27 .26 .51
From net realized gain............... .64 .12 1.11 .22 .23 .22 .19
In excess of net realized gain....... -- 03 -- -- -- -- --
From capital paid-in................. -- -- .01 -- -- -- --
-------- -------- -------- -------- -------- ------- -------
Total distributions............... .83 .40 1.19 .30 .50 .48 .70
-------- -------- -------- -------- -------- ------- -------
Net asset value, end of period.......... $ 35.89 $ 30.67 $ 27.60 $ 27.71 $ 18.88 $ 19.37 $ 16.98
======== ======== ======== ======== ======== ======= =======
Total return(%)......................... 19.72 12.65 3.92 48.37 .07 16.93 (12.97)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)............................. $989,254 $475,989 $229,586 $172,539 $109,637 $97,486 $64,651
Ratio of expenses to average net
assets(%).............................. 1.65 1.52 1.58 1.61 1.71(e) 1.64 1.66
Ratio of net investment income to
average net assets(%).................. .76 .97 .30 .56 1.36(d) 1.50 2.50
Portfolio turnover rate(%).............. 14 6 7 19 20 27 29
Average commission rate................. $ .0092 N/A N/A N/A N/A N/A N/A

<CAPTION>
CLASS A
-----------------------------
1989 1988 1987
SELECTED PER SHARE DATA ------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning of period.... $ 16.62 $ 12.90 $ 12.40
------- ------- -------
Income (loss) from investment
operations
Net investment income................ .27 .12 .04
Net realized and unrealized gain
(loss) on investment transactions... 4.43 3.71 2.38
------- ------- -------
Total from investment
operations....................... 4.70 3.83 2.42
------- ------- -------
Less distributions
From net investment income........... .17 .11 .05
From net realized gain............... .84 -- 1.87
In excess of net realized gain....... -- -- --
From capital paid-in................. -- -- --
------- ------- -------
Total distributions............... 1.01 .11 1.92
------- ------- -------
Net asset value, end of period.......... $ 20.31 $ 16.62 $ 12.90
======= ======= =======
Total return(%)......................... 28.26 29.72 19.51
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)............................. $58,469 $23,637 $21,146
Ratio of expenses to average net
assets(%).............................. 1.80 1.93 1.88
Ratio of net investment income to
average net assets(%).................. 1.20 .80 .40
Portfolio turnover rate(%).............. 23 45 47
Average commission rate................. N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
CLASS B CLASS C
----------------------------------------- --------
1996 1995 1994 1993(A) 1996(C)
SELECTED PER SHARE DATA -------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $ 30.67 $ 27.60 $27.71 $25.86 $ 32.68
-------- ------- ------- ------ -------
Income (loss) from investment operations
Net investment income (loss)................... (.01) .01 (.10) (.01) --
Net realized and unrealized gain (loss) on
investment transactions....................... 5.76 3.20 .91 2.12 3.74
-------- ------- ------- ------ -------
Total from investment operations............ 5.75 3.21 .81 2.11 3.74
-------- ------- ------- ------ -------
Less distributions
From net investment income..................... -- .01 -- .04 --
In excess of net investment income............. .05 -- -- -- .20
From net realized gain......................... .64 .10 .90 .22 .64
In excess of net realized gain................. -- .03 -- -- --
From capital paid-in........................... -- -- .02 -- --
-------- ------- ------- ------ -------
Total distributions......................... .69 .14 .92 .26 .84
-------- ------- ------- ------ -------
Net asset value, end of period.................... $ 35.73 $ 30.67 $27.60 $27.71 $ 35.58
======== ======= ======= ====== =======
Total return(%)................................... 18.76 11.62 2.96 7.65 11.45
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands).......... $312,161 $74,650 $30,143 $2,846 $44,450
Ratio of expenses to average net assets(%)........ 2.45 2.44 2.50 2.59 2.44
Ratio of net investment income (loss) to average
net assets(%).................................... (.04) .05 (.62) (.42) (.03)
Portfolio turnover rate(%)........................ 14 6 7 19 14
Average commission rate........................... $ .0092 N/A N/A N/A $ .0092

<CAPTION>
CLASS I
-----------------------------
1996 1995 1994(B)
SELECTED PER SHARE DATA ------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning of period.............. $30.67 $ 27.60 $ 29.06
------- ------- -------
Income (loss) from investment operations
Net investment income (loss)................... .27 .30 .03
Net realized and unrealized gain (loss) on
investment transactions....................... 5.88 3.22 (.49)
------- ------- -------
Total from investment operations............ 6.15 3.52 (.46)
------- ------- -------
Less distributions
From net investment income..................... .27 .30 .03
In excess of net investment income............. .02 -- --
From net realized gain......................... .64 .12 .92
In excess of net realized gain................. -- .03 --
From capital paid-in........................... -- -- .05
------- ------- -------
Total distributions......................... .93 .45 1.00
------- ------- -------
Net asset value, end of period.................... $35.89 $ 30.67 $ 27.60
======= ======= =======
Total return(%)................................... 20.06 12.85 (1.64)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands).......... $53,344 $13,020 $ 4,921
Ratio of expenses to average net assets(%)........ 1.25 1.35 1.41
Ratio of net investment income (loss) to average
net assets(%).................................... 1.16 1.14 .47
Portfolio turnover rate(%)........................ 14 6 7
Average commission rate........................... $.0092 N/A N/A
</TABLE>

- ---------------

+ Since April 1, 1993, Ivy International Fund's subadviser has been Northern
Cross Investments Limited. In prior periods, Ivy International Fund had the
following subadvisers: Boston Overseas Investors, Inc., from July 1, 1990
through March 31, 1993; and Marsh & Cunningham, from November 15, 1985
through June 30, 1990.
(a) From October 23, 1993 (commencement of operations) to December 31, 1993.
(b) From October 6, 1994 (commencement) to December 31, 1994.
(c) From April 30, 1996 (commencement) to December 31, 1996.
(d) Net investment income is net of expenses reimbursed by IMI.
(e) The ratio of expenses to average net assets is net of expenses reimbursed by
IMI. If IMI had not reimbursed expenses during the year ended December 31,
1992, the ratio of expenses to average net assets would have been 1.80%.

10
<PAGE> 11

IVY LATIN AMERICA STRATEGY FUND

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
--------------------------------- --------------------------------- -------
1996 1995 1994(A) 1996 1995 1994(A) 1996(B)
SELECTED PER SHARE DATA ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period........................ $ 6.88 $ 8.37 $10.00 $ 6.88 $ 8.37 $10.00 $ 7.96
------- ------- ------- ------- ------- ------- ------
Loss from investment
operations
Net investment income
(loss)(c).................. .01 .01 -- (.03) (.02) (.01) (.02)
Net realized and unrealized
gain (loss) on investment
transactions............... 1.66 (1.45) (1.63) 1.63 (1.47) (1.62) .55
------- ------- ------- ------- ------- ------- ------
Total from investment
operations.............. 1.67 (1.44) (1.63) 1.60 (1.49) (1.63) .53
------- ------- ------- ------- ------- ------- ------
Less distributions
From net realized gain...... .04 -- -- -- -- -- .03
From capital paid-in........ -- .05 -- -- -- -- --
------- ------- ------- ------- ------- ------- ------
Total distributions...... .04 .05 -- -- -- -- .03
------- ------- ------- ------- ------- ------- ------
Net asset value, end of
period........................ $ 8.51 $ 6.88 $ 8.37 $ 8.48 $ 6.88 $ 8.37 $ 8.46
======= ======= ======= ======= ======= ======= ======
Total return(%)................ 24.22 (17.28) (16.10) 23.26 (17.90) (16.20) 6.66
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands).................... $ 4,016 $ 2,015 $ 571 $ 2,025 $ 684 $ 122 $ 111
Ratio of expenses to average
net assets
With expense reimbursement and
fees paid
indirectly(%)(d)............ 2.55 2.61 2.20 3.33 3.36 2.95 3.46
Without expense reimbursement
and fees paid
indirectly(%)(d)............ 4.89 9.26 16.22 5.67 10.01 16.97 5.80
Ratio of net investment income
(loss) to average net
assets(%)(c).................. .24 .22 .21 (.54) (.53) (.54) (.68)
Portfolio turnover rate(%)..... 20 45 82 20 45 82 20
Average commission rate........ $ .0002 N/A N/A $ .0002 N/A N/A $.0002
</TABLE>

- ---------------

(a) From November 1, 1994 (commencement of operations) to December 31, 1994.
(b) From April 30, 1996 (commencement) to December 31, 1996.
(c) Net investment income (loss) is net of expenses reimbursed by IMI.
(d) Beginning in 1995, total expenses include any fees paid indirectly. The
ratio of expenses to average net assets with expense reimbursement has been
restated for 1995.

IVY NEW CENTURY FUND

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
-------------------------------- -------------------------------- -------
1996 1995 1994(A) 1996 1995 1994(A) 1996(B)
SELECTED PER SHARE DATA ------- ------ ------- ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period.......................... $ 9.05 $ 8.64 $10.00 $ 9.05 $ 8.64 $10.00 $ 9.89
------- ------ ------- ------ ------- ------- ------
Income (loss) from investment
operations
Net investment income
(loss)(c).................... (.02) .01 -- (.06) (.02) -- (.02)
Net realized and unrealized
gain (loss) on investment
transactions................. 1.09 .54 (1.36) 1.05 .51 (1.36) .19
------- ------ ------- ------ ------- ------- ------
Total from investment
operations................ 1.07 .55 (1.36) .99 .49 (1.36) .17
------- ------ ------- ------ ------- ------- ------
Less distributions
From net investment income.... -- .01 -- -- -- -- --
From net realized gain........ -- .10 -- -- .08 -- --
In excess of net realized
gain......................... -- .03 -- -- -- -- --
------- ------ ------- ------ ------- ------- ------
Total distributions........ -- .14 -- -- .08 -- --
------- ------ ------- ------ ------- ------- ------
Net asset value, end of period... $ 10.12 $ 9.05 $ 8.64 $10.04 $ 9.05 $ 8.64 $10.06
======= ====== ======= ====== ======= ======= ======
Total return(%).................. 11.83 6.40 (13.50) 10.95 5.62 (13.60) 1.73
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)...................... $ 9,925 $3,435 $ 611 $6,269 $ 945 $ 121 $1,854
Ratio of expenses to average net
assets
With expense reimbursement and
fees paid indirectly(%)(d).... 2.45 2.55 2.20 3.20 3.30 2.95 3.16
Without expense reimbursement
and fees paid
indirectly(%)(d).............. 2.82 7.18 20.74 3.57 7.93 21.49 3.53
Ratio of net investment income to
average net assets(%)(c)........ (.23) .24 .52 (.98) (.51) (.23) (.94)
Portfolio turnover rate(%)....... 27 14 0 27 14 0 27
Average commission rate.......... $ .0018 N/A N/A $.0018 N/A N/A $.0018
</TABLE>

- ---------------

11
<PAGE> 12

INVESTMENT OBJECTIVES AND POLICIES

Whenever an investment objective, policy or restriction of a Fund described
in this Prospectus or in the SAI states a maximum percentage of assets that may
be invested in a security or other asset or describes a policy regarding quality
standards, that percentage limitation or standard will, unless otherwise
indicated, apply to the Fund only at the time a transaction takes place. Thus,
for example, if a percentage limitation is adhered to at the time of investment,
a later increase or decrease in the percentage that results from circumstances
not involving any affirmative action by the Fund will not be considered a
violation.

IVY ASIA PACIFIC FUND: The Fund's principal investment objective is long-
term growth. Consideration of current income is secondary to this principal
objective. Under normal circumstances the Fund invests at least 65% of its total
assets in securities issued in Asia-Pacific countries, which for purposes of
this Prospectus are defined to include China, Hong Kong, India, Indonesia,
Malaysia, Pakistan, the Philippines, Singapore, Sri Lanka, South Korea, Taiwan,
Thailand and Vietnam. Securities of Asia-Pacific issuers include: (a) securities
of companies organized under the laws of an Asia-Pacific country or for which
the principal securities trading market is in the Asia-Pacific region; (b)
securities that are issued or guaranteed by the government of an Asia-Pacific
country, its agencies or instrumentalities, political subdivisions or the
country's central bank; (c) securities of a company, wherever organized, where
at least 50% of the company's non-current assets, capitalization, gross revenue
or profit in any one of the two most recent fiscal years represents (directly or
indirectly through subsidiaries) assets or activities located in the
Asia-Pacific region; and (d) any of the preceding types of securities in the
form of depository shares.

The Fund may participate in markets throughout the Asia-Pacific region, and
it is expected that the Fund will be invested at all times in at least three
Asia-Pacific countries. The Fund does not expect to concentrate its investments
in any particular industry. See Appendix C to the SAI for further information
about the economic characteristics of certain Asia-Pacific countries.

The Fund may invest up to 35% of its assets in investment-grade debt
securities of government or corporate issuers in emerging market countries,
investment-grade equity and debt securities of issuers in developed countries
(including the United States), warrants, and cash or cash equivalents, such as
bank obligations (including certificates of deposit and bankers' acceptances),
commercial paper, short-term notes and repurchase agreements. For temporary
defensive purposes, the Fund may invest without limit in such instruments. The
Fund may also invest up to 5% of its net assets in zero coupon bonds, and in
debt securities rated Ba or below by Moody's Investor Services, Inc. ("Moody's")
or BB or below by Standard and Poor's Corporation ("S&P"), or if unrated, are
considered by IMI to be of comparable quality (commonly referred to as "high
yield" or "junk" bonds).

For temporary or emergency purposes, the Fund may borrow up to one-third of
the value of its total assets from banks, but may not purchase securities at any
time during which the value of the Fund's outstanding loans exceeds 10% of the
value of the Fund's assets. The Fund may engage in foreign currency exchange
transactions and enter into forward foreign currency contracts. The Fund may
also invest (i) up to 10% of its total assets in other investment companies that
invest in securities issued in Asia-Pacific countries, and (ii) up to 15% of its
net assets in restricted and other illiquid securities.

The Fund may purchase put and call options on securities and stock indices,
provided the premium paid for such options does not exceed 5% of the Fund's net
assets. The Fund may also sell covered put options with respect to up to 10% of
the value of its net assets, and may write covered call options so long as not
more than 25% of the Fund's net assets is subject to being purchased upon the
exercise of the calls. For hedging purposes only, the Fund may engage in
transactions in stock index and foreign currency futures contracts, provided
that the Fund's aggregate investment in such contracts does not exceed 15% of
its total assets.

IVY CANADA FUND: Ivy Canada Fund seeks long-term capital appreciation by
investing primarily in equity securities of Canadian companies. Canada is one of
the world's leading industrial countries and a major exporter of agricultural
products. The country is rich in natural resources such as zinc, uranium,
nickel, gold, silver, aluminum, iron and copper, and forest covers over 44% of
land areas, making Canada a leading world producer of newsprint. Canada is also
a major producer of hydroelectricity, oil and gas.

As a fundamental policy, the Fund normally invests at least 65% of its total
assets in Canadian equity securities (i.e., common and preferred stock,
securities convertible into common stock and common stock purchase warrants)
listed on Canadian stock exchanges or traded over-the-counter in Canada.
Canadian issuers are companies (i) organized under the laws of Canada, (ii) for
which the principal securities trading market is in Canada, (iii) which derive
at least 50% of their revenues or profits from goods produced or sold,
investments made or services performed in Canada, or (iv) which have at least
50% of their assets situated in Canada. The balance of the Fund's assets
ordinarily are invested in (i) bills and bonds of the Canadian Government and
the governments of the provinces or municipalities of Canada, (ii) high quality
notes and debentures of Canadian companies (i.e., those rated Aaa or Aa by
Moody's or AAA or AA by S&P, or if unrated, judged to be of comparable quality
by Mackenzie Financial Corporation ("MFC"), the Fund's Advisor), (iii) foreign
securities (including sponsored or unsponsored American Depository Receipts
("ADRs"), Global Depository Receipts ("GDRs"), American Depository Shares
("ADSs") and Global Depository Shares ("GDSs")), (iv) U.S. Government
securities, (v) equity securities and investment-grade debt securities (i.e.,
those rated Baa or higher by Moody's or BBB or higher by S&P, or if unrated, are
considered by MFC to be of comparable quality) of U.S. companies, and (vi) zero
coupon bonds that meet these credit quality standards.

The Fund may purchase securities on a "when-issued" or firm commitment
basis, engage in foreign currency exchange transactions and enter into forward
foreign currency contracts. The Fund may also invest (i) up to 10% of its total
assets in other investment companies and (ii) up to 15% of its net assets in
restricted and other illiquid securities.

12
<PAGE> 13

or municipalities of Canada (or their agencies or instrumentalities), (ii)
finance company and corporate commercial paper (and other short-term corporate
obligations rated Prime-1 by Moody's or A or better by S&P, or if unrated,
considered by MFC to be of comparable quality), (iii) obligations of banks
(i.e., certificates of deposit, time deposits and bankers' acceptances)
considered creditworthy by MFC under guidelines approved by the Trustees, and
(iv) repurchase agreements with broker-dealers and banks. For temporary or
emergency purposes, the Fund may also borrow up to 10% of the value of its total
assets from banks.

IVY CHINA REGION FUND: Ivy China Region Fund's principal investment
objective is long-term capital growth. Consideration of current income is
secondary to this principal objective. The Fund seeks to meet its objective
primarily by investing in the equity securities of companies that are expected
to benefit from the economic development and growth of China, Hong Kong and
Taiwan. A significant percentage of the Fund's assets may also be invested in
the securities markets of South Korea, Singapore, Malaysia, Thailand, Indonesia
and the Philippines (collectively, with China, Hong Kong and Taiwan, the "China
Region").

The Fund normally invests at least 65% of its total assets in "Greater China
growth companies," defined as companies (a) that are organized in or for which
the principal securities trading markets are the China Region; (b) that have at
least 50% of their assets in one or more China Region countries or derive at
least 50% of their gross sales revenues or profits from providing goods or
services to or from within one or more China Region countries; or (c) that have
at least 35% of their assets in China, Hong Kong or Taiwan, derive at least 35%
of their gross sales revenues or profits from providing goods or services to or
from within these three countries, or have significant manufacturing or other
operations in these countries. IMI's determination as to whether a company
qualifies as a Greater China growth company is based primarily on information
contained in financial statements, reports, analyses and other pertinent
information (some of which may be obtained directly from the company). The Fund
may invest 25% or more of its total assets in the securities of issuers located
in any one China Region country, and currently expects to invest more than 50%
of its total assets in Hong Kong. See Appendix C to the SAI for further
information about the economic characteristics of certain China Region
countries.

The balance of the Fund's assets ordinarily are invested in (i) certain
investment-grade debt securities and (ii) the equity securities of "China Region
associated companies," which are companies that do not meet the definition of a
Greater China growth company, but whose current or expected performance, based
on certain identified factors (such as the growth trends in the location of a
company's assets and the sources of its revenues and profits), is judged by IMI
to be strongly associated with the China Region. The investment-grade debt
securities in which the Fund may invest include (a) obligations of the U.S.
Government or its agencies or instrumentalities, (b) obligations of U.S. banks
and other banks organized and existing under the laws of Hong Kong, Taiwan or
countries that are members of the Organization for Economic Cooperation and
Development ("OECD"), and (c) obligations denominated in any currency issued by
international development institutions and Hong Kong, Taiwan and OECD member
governments and their agencies and instrumentalities, as well as repurchase
agreements with respect to any of the foregoing instruments. The Fund may also
invest in zero coupon bonds, and corporate bonds rated Baa or higher by Moody's
or BBB or higher by S&P (or if unrated, are considered by IMI to be of
comparable quality).

The Fund may invest less than 35% of its net assets in debt securities rated
Ba or below by Moody's or BB or below by S&P, or, if unrated, considered by IMI
to be of comparable quality (commonly referred to as "high yield" or "junk"
bonds). The Fund will not invest in debt securities rated less than C by either
Moody's or S&P. As of December 31, 1996, the Fund had 0.90% of its total assets
invested in low-rated debt securities.

The Fund may invest in sponsored or unsponsored ADRs, GDRs, ADSs and GDSs,
warrants, purchase securities on a "when-issued" or firm commitment basis,
engage in foreign currency exchange transactions and enter into forward foreign
currency contracts. The Fund may also invest (i) up to 10% of its total assets
in other investment companies, and (ii) up to 15% of its net assets in
restricted and other illiquid securities.

For temporary defensive purposes and during periods when IMI believes that
circumstances warrant, the Fund may reduce its position in Greater China growth
companies and Greater China associated companies and increase its investment in
cash and liquid debt securities, such as U.S. Government securities, bank
obligations, commercial paper, short-term notes and repurchase agreements. For
temporary or emergency purposes, the Fund may also borrow up to 10% of the value
of its total assets from banks.

The Fund may purchase put and call options on securities and stock indices,
provided the premium paid for such options does not exceed 5% of the Fund's net
assets. The Fund may also sell covered put options with respect to up to 10% of
the value of its net assets, and may write covered call options so long as not
more than 25% of the Fund's net assets is subject to being purchased upon the
exercise of the calls. For hedging purposes only, the Fund may engage in
transactions in stock index futures contracts, provided that the Fund's
aggregate investment in such contracts does not exceed 15% of its total assets.

IVY GLOBAL FUND: The Fund seeks long-term capital growth through a flexible
policy of investing in stocks and debt obligations of companies and governments
of any nation. Any income realized will be incidental. Under normal conditions,
the Fund will invest at least 65% of its total assets in the common stock of
companies throughout the world, with at least three different countries (one of
which may be the United States) represented in the Fund's overall portfolio
holdings. Although the Fund generally invests in common stock, it may also
invest in preferred stocks, sponsored or unsponsored ADRs, GDRs, ADSs and GDSs,
and investment-grade debt securities (i.e., those rated Baa or higher by Moody's
or BBB or higher by S&P, or if unrated, are considered by IMI to be of
comparable quality), including corporate bonds, notes, debentures, convertible
bonds and zero coupon bonds.

The Fund may invest less than 35% of its net assets in debt securities rated
Ba or below by Moody's or BB or below by S&P, or if unrated, considered by IMI
to be of comparable quality (commonly referred to as "high yield" or "junk"
bonds). The Fund will not invest in debt securities rated less than C by either
Moody's or S&P. As of December 31, 1996, the Fund had 0.94% of its total assets
invested in low-rated debt securities.

The Fund may invest in equity real estate investment trusts, warrants,
purchase securities on a "when-issued" or firm commitment basis, engage in
foreign currency exchange transactions and enter into forward foreign currency
contracts. The Fund may also invest (i) up to 10% of its total assets in other
investment companies and (ii) up to 15% of its net assets in restricted and
other illiquid securities.

For temporary defensive purposes and during periods when IMI believes that
circumstances warrant, the Fund may invest without limit in U.S. Government
securities, obligations issued by domestic or foreign banks (including
certificates of deposit, time deposits and bankers' acceptances), and domestic
or foreign commercial paper (which, if issued by a corporation, must be rated
Prime-1 by Moody's or A-1 by S&P, or if unrated has been issued by a company
that at the time of investment has an outstanding debt issue rated

13
<PAGE> 14

AAA or AA by S&P or Aaa or Aa by Moody's). The Fund may also enter into
repurchase agreements, and, for temporary or emergency purposes, may borrow up
to 10% of the value of its total assets from banks.

The Fund may purchase put and call options on stock indices, provided the
premium paid for such options does not exceed 10% of the Fund's net assets. The
Fund may also sell covered put options with respect to up to 50% of the value of
its net assets, and my write covered call options so long as not more than 20%
of the Fund's net assets is subject to being purchased upon the exercise of the
calls. For hedging purposes only, the Fund may engage in transactions in (and
options on) stock index and foreign currency futures contracts, provided that
the Fund's aggregate investment in such contracts does not exceed 20% of its
total assets.

IVY GLOBAL NATURAL RESOURCES FUND: The Fund's investment objective is
long-term growth. Any income realized will be incidental. Under normal
conditions, the Fund invests at least 65% of its total assets in the equity
securities of companies throughout the world that own, explore or develop
natural resources and other basic commodities, or supply goods and services to
such companies. Under this investment policy, at least three different countries
(one of which may be the United States) will be represented in the Fund's
overall portfolio holdings. "Natural resources" generally include precious
metals (such as gold, silver and platinum), ferrous and nonferrous metals (such
as iron, aluminum and copper), strategic metals (such as uranium and titanium),
coal, oil, natural gases, timber, undeveloped real property and agricultural
commodities. Although the Fund generally invests in common stock, it may also
invest in preferred stock, securities convertible into common stock and
sponsored or unsponsored ADRs, GDRs, ADSs and GDSs. The Fund may also invest
directly in precious metals and other physical commodities.

IMI believes that certain political and economic changes in the global
environment in recent years have had and will continue to have a profound effect
on global supply and demand of natural resources, and that rising demand from
developing markets and new sources of supply should create attractive investment
opportunities. In selecting the Fund's investments, IMI will seek to identify
securities of companies that, in IMI's opinion, appear to be undervalued
relative to the value of the companies' natural resource holdings.

For temporary defensive purposes, the Fund may invest without limit in cash
or cash equivalents, such as bank obligations (including certificates of deposit
and bankers' acceptances), commercial paper, short-term notes and repurchase
agreements. For temporary or emergency purposes, the Fund may borrow up to
one-third of the value of its total assets from banks, but may not purchase
securities at any time during which the value of the Fund's outstanding loans
exceeds 10% of the value of the Fund's total assets. The Fund may engage in
foreign currency exchange transactions and enter into forward foreign currency
contracts. The Fund may also invest (i) up to 10% of its total assets in other
investment companies and (ii) up to 15% of its net assets in restricted and
other illiquid securities.

For hedging purposes only, the Fund may engage in transactions in (and
options on) foreign currency futures contracts, provided that the Fund's
aggregate investment in such contracts does not exceed 15% of its total assets.

IVY GLOBAL SCIENCE & TECHNOLOGY FUND: The Fund's principal investment
objective is long-term capital growth. Any income realized will be incidental.
Under normal conditions, the Fund will invest at least 65% of its total assets
in the common stock of companies that are expected to benefit from the
development, advancement and use of science and technology. Under this
investment policy, at least three different countries (one of which may be the
United States) will be represented in the Fund's overall portfolio holdings.
Industries likely to be represented in the Fund's portfolio include computers
and peripheral products, software, electronic components and systems,
telecommunications, media and information services, pharmaceuticals, hospital
supply and medical devices, biotechnology, environmental services, chemicals and
synthetic materials, and defense and aerospace. The Fund may also invest in
companies that are expected to benefit indirectly from the commercialization of
technological and scientific advances. In recent years, rapid advances in these
industries have stimulated unprecedented growth. While this is no guarantee of
future performance, IMI believes that these industries offer substantial
opportunities for long-term capital appreciation.

Although the Fund generally invests in common stock, it may also invest in
preferred stock, securities convertible into common stock, sponsored or
unsponsored ADRs, GDRs, ADSs and GDSs and investment-grade debt securities
(i.e., those rated Baa or higher by Moody's or BBB or higher by S&P, or if
unrated, are considered by IMI to be of comparable quality), including corporate
bonds, notes, debentures, convertible bonds and zero-coupon bonds. The Fund may
also invest up to 5% of its net assets in debt securities that are rated Ba or
below by Moody's or BB or below by S&P, or if unrated, are considered by IMI to
be of comparable quality (commonly referred to as "high yield" or "junk" bonds).
The Fund will not invest in debt securities rated less than C by either Moody's
or S&P. (A description of the ratings assigned by Moody's and S&P is contained
in Appendix A to the SAI).

The Fund may purchase put and call options on stock indices and on
individual securities, provided the premium paid for such options does not
exceed 10% of the value of the Fund's net assets. The Fund may also sell covered
put options with respect to up to 50% of the value of its net assets, and may
sell covered call options so long as not more than 20% of the Fund's net assets
is subject to being purchased upon the exercise of the calls. For hedging
purposes only, the Fund may engage in transactions in (and options on) stock
index and foreign currency futures contracts, provided that the Fund's aggregate
investment in such contracts does not exceed 20% of the value of its total
assets.

IVY INTERNATIONAL FUND: Sales of shares of this Fund to new investors have
been suspended. See "How to Buy Shares."

The Fund's principal objective is long-term capital growth primarily through
investment in equity securities. Consideration of current income is secondary to
this principal objective. It is anticipated that at least 65% of the Fund's
total assets will be invested in common stocks (and securities convertible into
common stocks) principally traded in European, Pacific Basin and Latin American
markets. Under this investment policy, at least three different countries (other
than the United States) will be represented in the Fund's

14
<PAGE> 15

overall portfolio holdings. For temporary defensive purposes, the Fund may also
invest in equity securities principally traded in U.S. markets. The Fund's
subadviser, Northern Cross Investments Limited ("Northern Cross"), invests the
Fund's assets in a variety of economic sectors, industry segments and individual
securities in order to reduce the effects of price volatility in any one area
and to enable shareholders to participate in markets that do not necessarily
move in concert with U.S. markets. Northern Cross seeks to identify rapidly
expanding foreign economies, and then searches out growing industries and
corporations, focusing on companies with established records. Individual
securities are selected based on value indicators, such as a low price-earnings
ratio, and are reviewed for fundamental financial strength. Companies in which
investments are made will generally have at least $1 billion in capitalization
and a solid history of operations.

When economic or market conditions warrant, the Fund may invest without
limit in U.S. Government securities, investment-grade debt securities (i.e.,
those rated Baa or higher by Moody's or BBB or higher by S&P, or if unrated, are
considered by Northern Cross to be of comparable quality), preferred stocks,
sponsored or unsponsored ADRs, GDRs, ADSs and GDSs, warrants, or cash or cash
equivalents such as bank obligations (including certificates of deposit and
bankers' acceptances), commercial paper, short-term notes and repurchase
agreements. For temporary or emergency purposes, the Fund may borrow up to 10%
of the value of its total assets from banks. The Fund may also purchase
securities on a "when-issued" or firm commitment basis, and may engage in
foreign currency exchange transactions and enter into forward foreign currency
contracts. The Fund may also invest (i) up to 10% of its total assets in other
investment companies and (ii) up to 15% of its net assets in restricted and
other illiquid securities.

The Fund may purchase put and call options on securities and stock indices,
provided the premium paid for such options does not exceed 5% of the Fund's net
assets. The Fund may also sell covered put options with respect to up to 10% of
the value of its net assets, and may write covered call options so long as not
more than 25% of the Fund's net assets is subject to being purchased upon the
exercise of the calls. For hedging purposes only, the Fund may engage in
transactions in (and options on) stock index and foreign currency futures
contracts, provided that the Fund's aggregate investment in such contracts does
not exceed 15% of its total assets.

IVY INTERNATIONAL SMALL COMPANIES FUND: The Fund's principal investment
objective is long-term growth primarily through investment in foreign equity
securities. Consideration of current income is secondary to this principal
objective. Under normal circumstances the Fund invests at least 65% of its total
assets in common and preferred stocks (and securities convertible into common
stocks) of foreign issuers having total market capitalization of less than $1
billion. Under this investment policy, at least three different countries (other
than the United States) will be represented in the Fund's overall portfolio
holdings. For temporary defensive purposes, the Fund may also invest in equity
securities principally traded in the United States. The Fund will invest its
assets in a variety of economic sectors, industry segments and individual
securities in order to reduce the effects of price volatility in any area and to
enable shareholders to participate in markets that do not necessarily move in
concert with the U.S. market. The factors that IMI considers in determining the
appropriate distribution of investments among various countries and regions
include prospects for relative economic growth, expected levels of inflation,
government policies influencing business conditions and the outlook for currency
relationships.

In selecting the Fund's investments, IMI will seek to identify securities
that are attractively priced relative to their intrinsic value. The intrinsic
value of a particular security is analyzed by reference to characteristics such
as relative price/earnings ratio, dividend yield and other relevant factors
(such as applicable financial, tax, social and political conditions).

When economic or market conditions warrant, the Fund may invest without
limit in U.S. Government securities, investment-grade debt securities, zero
coupon bonds, preferred stocks, warrants, or cash or cash equivalents such as
bank obligations (including certificates of deposit and bankers' acceptances),
commercial paper, short-term notes and repurchase agreements. The Fund may also
invest up to 5% of its net assets in debt securities rated Ba or below by
Moody's or BB or below by S&P, or if unrated, are considered by IMI to be of
comparable quality (commonly referred to as "high yield" or "junk" bonds).

For temporary or emergency purposes, the Fund may borrow up to one-third of
the value of its total assets from banks, but may not purchase securities at any
time during which the value of the Fund's outstanding loans exceeds 10% of the
value of the Fund's assets. The Fund may engage in foreign currency exchange
transactions and enter into forward foreign currency contracts. The Fund may
also invest (i) up to 10% of its total assets in other investment companies and
(ii) up to 15% of its net assets in restricted and other illiquid securities.

IVY LATIN AMERICA STRATEGY FUND: The Fund's principal investment objective
is long-term capital growth. Consideration of current income is secondary to
this principal objective. Under normal conditions the Fund invests at least 65%
of its total assets in securities issued in Latin America, which for purposes of
this Prospectus is defined as Mexico, Central America, South America and the
Spanish-speaking islands of the Caribbean. Securities of Latin American issuers
include (a) securities of companies organized under the laws of a Latin American
country or for which the principal securities trading market is in Latin
America; (b) securities that are issued or guaranteed by the government of a
Latin American country, its agencies or instrumentalities, political
subdivisions or the country's central bank; (c) securities of a company,
wherever organized, where at least 50% of the company's non-current assets,
capitalization, gross revenue or profit in any one of the two most recent fiscal
years represents (directly or indirectly through subsidiaries) assets or
activities located in Latin America; or (d) any of the preceding types of
securities in the form of depository shares. The Fund may participate in markets
throughout Latin America, and it is expected that the Fund will be invested at
all times in at least three countries. Under present conditions, the Fund
expects to focus its investments in Argentina, Brazil, Chile, Mexico and
Venezuela, which IMI believes are the most developed capital markets in Latin
America. The Fund does not expect to concentrate its investments in any
particular industry.

The Fund's equity investments consist of common stock, preferred stock
(either convertible or non-convertible), sponsored or unsponsored ADRs, GDRs,
ADSs and GDSs, and warrants (any of which may be purchased through rights). The
Fund's equity securities may be listed on securities exchanges, traded
over-the-counter, or have no organized market.

The Fund may invest in debt securities (including zero coupon bonds) when
IMI anticipates that the potential for capital appreciation from debt

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<PAGE> 16

securities is likely to equal or exceed that of equity securities (e.g., a
favorable change in relative foreign exchange rates, interest rate levels or the
creditworthiness of issuers). These include debt securities issued by Latin
American Governments ("Sovereign Debt"). Most of the debt securities in which
the Fund may invest are not rated, and those that are rated are expected to be
below investment-grade (i.e., rated Ba or below by Moody's or BB or below by
S&P, or considered by IMI to be of comparable quality), and are commonly
referred to as "high yield" or "junk" bonds. As of December 31, 1996, the Fund
had 0.00% of its total assets invested in low-rated debt securities.

To meet redemptions, or while the Fund is anticipating investments in Latin
American securities, the Fund may hold cash or cash equivalents such as bank
obligations (including certificates of deposit and bankers' acceptances),
commercial paper, short-term notes and repurchase agreements. For temporary
defensive or emergency purposes, the Fund may (i) invest without limit in such
instruments, and (ii) borrow up to one-third of the value of its total assets
from banks (but may not purchase securities at any time during which the value
of the Fund's outstanding loans exceeds 10% of the value of the Fund's total
assets).

The Fund may invest in warrants, purchase securities on a "when-issued" or
firm commitment basis, engage in foreign currency exchange transactions and
enter into forward foreign currency contracts. The Fund may also invest (i) up
to 10% of its total assets in other investment companies, and (ii) up to 15% of
its net assets in restricted and other illiquid securities. The Fund will treat
any Latin American securities that are subject to restrictions on repatriation
for more than seven days, as well as any securities issued in connection with
Latin American debt conversion programs that are restricted to remittance of
invested capital or profits, as illiquid securities for purposes of this
limitation.

The Fund may purchase put and call options on securities and stock indices,
provided the premium paid for such options does not exceed 5% of the Fund's net
assets. The Fund may also sell covered put options with respect to up to 10% of
the value of its net assets, and my write covered call options so long as not
more than 25% of the Fund's net assets is subject to being purchased upon the
exercise of the calls. For hedging purposes only, the Fund may engage in
transactions in (and options on) stock index and foreign currency futures
contracts, provided that the Fund's aggregate investment in such contracts does
not exceed 15% of its total assets.

IVY NEW CENTURY FUND: The Fund's principal objective is long-term growth.
Consideration of current income is secondary to this principal objective. In
pursuing its objective, the Fund invests primarily in the equity securities of
companies that IMI believes will benefit from the economic development and
growth of emerging markets. The Fund considers countries having emerging markets
to be those that (i) are generally considered to be "developing" or "emerging"
by the World Bank and the International Finance Corporation, or (ii) are
classified by the United Nations (or otherwise regarded by their authorities) as
"emerging." Under normal market conditions, the Fund invests at least 65% of its
total assets in equity securities (including common and preferred stocks,
convertible debt obligations, warrants, options, rights, and sponsored or
unsponsored ADRs, GDRs, ADSs and GDSs that are listed on stock exchanges or
traded over-the-counter) of "Emerging Market growth companies," which are
defined as companies (a) for which the principal securities trading market is an
emerging market (as defined above), (b) that (alone or on a consolidated basis)
derives 50% or more of its total revenue either from goods, sales or services in
emerging markets, or (c) that are organized under the laws of (and with a
principal office in) an emerging market country.

The Fund normally invests its assets in the securities of issuers located in
at least three emerging market countries, and may invest 25% or more of its
total assets in the securities of issuers located in any one country. IMI's
determination as to whether a company qualifies as a Emerging Markets growth
company is based primarily on information contained in financial statements,
reports, analyses and other pertinent information (some of which may be obtained
directly from the company).

For purposes of capital appreciation, the Fund may invest up to 35% of its
assets in (i) debt securities of government or corporate issuers in emerging
market countries, (ii) equity and debt securities of issuers in developed
countries (including the United States), and (iii) cash or cash equivalents such
as bank obligations (including certificates of deposit and bankers'
acceptances), commercial paper, short-term notes and repurchase agreements. For
temporary defensive purposes, the Fund may invest without limit in such
instruments. The Fund may also invest in zero coupon bonds and purchase
securities on a "when-issued" or firm commitment basis.

The Fund will not invest more than 20% of its total assets in debt
securities rated Ba or lower by Moody's or BB or lower by S&P, or if unrated,
are considered by IMI to be of comparable quality (commonly referred to as "high
yield" or "junk" bonds). As of December 31, 1996, the Fund had 0.27% of its
total assets invested in low-rated debt securities.

For temporary or emergency purposes, the Fund may borrow up to one-third of
the value of its total assets from banks, but may not purchase securities at any
time during which the value of the Fund's outstanding loans exceeds 10% of the
value of the Fund's assets. The Fund may engage in foreign currency exchange
transactions and enter into forward foreign currency contracts. The Fund may
also invest (i) up to 10% of its total assets in other investment companies, and
(ii) up to 15% of its net assets in restricted and other illiquid securities.

The Fund may purchase put and call options on securities and stock indices,
provided the premium paid for such options does not exceed 5% of the Fund's net
assets. The Fund may also sell covered put options with respect to up to 10% of
the value of its net assets, and my write covered call options so long as not
more than 25% of the Fund's net assets is subject to being purchased upon the
exercise of the calls. For hedging purposes only, the Fund may engage in
transactions in (and options on) stock index and foreign currency futures
contracts, provided that the Fund's aggregate investment in such contracts does
not exceed 15% of its total assets.

RISK FACTORS AND INVESTMENT TECHNIQUES

SPECIAL CONSIDERATIONS RELATED TO IVY ASIA PACIFIC FUND: Certain Asia-
Pacific countries in which the Fund may invest are developing countries, and may
be in the initial stages of their industrialization cycle. The economic
structures of developing countries generally are less diverse and mature than in
the United States, and their political systems may be relatively unstable.
Historically, markets of developing countries have been more volatile than the
markets of developed countries, yet such markets often have provided higher
rates of return to investors.

Investing in securities of issuers in Asia-Pacific countries involves
certain considerations not typically associated with investing in securities of
United States companies, including (i) restrictions on foreign investment and on
repatriation of capital invested in Asian countries, (ii) currency fluctuations,
(iii) the cost of converting foreign currency into United States dollars, (iv)
potential price volatility and lesser liquidity of shares traded on Asia-

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<PAGE> 17

Pacific country securities markets and (v) political and economic risks,
including the risk of nationalization or expropriation of assets and the risk of
war.

Certain Asia-Pacific countries may be more vulnerable to the ebb and flow of
international trade and to trade barriers and other protectionist or retaliatory
measures. Investments in countries such as China that have recently opened their
capital markets and that appear to have relaxed their central planning
requirement, as well as in countries that have privatized some of their state-
owned industries, should be regarded as speculative.

The settlement period of securities transactions in foreign markets in
general may be longer than in domestic markets, and such delays may be of
particular concern in developing countries. For example, the possibility of
political upheaval and the dependence on foreign economic assistance may be
greater in developing countries than in developed countries, either one of which
may increase settlement delays.

Securities exchanges, issuers and broker-dealers in some Asia-Pacific
countries are subject to less regulatory scrutiny than in the United States. In
addition, due to the limited size of the markets for Asia-Pacific securities,
the prices for such securities may be more vulnerable to adverse publicity,
investors' perceptions or traders' positions or strategies, which could cause a
decrease not only in the value but also in the liquidity of the Fund's
investments.

SPECIAL CONSIDERATIONS RELATED TO IVY CANADA FUND: The economy of Canada is
strongly influenced by the activities of companies involved in the production
and processing of natural resources, particularly those involved in the energy
industry, industrial materials (e.g., chemicals, base metals, timber and paper)
and agricultural materials (e.g., grain cereals). The securities of companies in
the energy industry are subject to changes in value and dividend yield, which
depend, to a large extent, on the price and supply of energy fuels. Rapid price
and supply fluctuations may be caused by events relating to international
politics, energy conservation and the success of exploration projects.

SPECIAL CONSIDERATIONS RELATED TO IVY CHINA REGION FUND: Investors should
realize that China Region countries may be subject to a greater degree of
economic, political and social instability than is the case in the United States
or other developed countries. Among the factors causing this instability are (i)
authoritarian governments or military involvement in political and economic
decision making, (ii) popular unrest associated with demands for improved
political, economic and social conditions, (iii) internal insurgencies, (iv)
hostile relations with neighboring countries, (v) ethnic, religious and racial
disaffection, and (vi) changes in trading status, any one of which could disrupt
the principal financial markets in which the Fund invests and adversely affect
the value of its assets. In addition, several China Region countries have had
hostile relations with neighboring nations. For example, China continues to
claim sovereignty over Taiwan, and is scheduled to assume sovereignty over Hong
Kong in 1997.

China Region countries tend to be heavily dependent on international trade,
as a result of which their markets are highly sensitive to protective trade
barriers and the economic conditions of their principal trading partners (i.e.,
the United States, Japan and Western European countries). Protectionist trade
legislation, reduction of foreign investment in China Region economies and
general declines in the international securities markets could have a
significant adverse effect on the China Region securities markets. In addition,
certain China Region countries have in the past failed to recognize private
property rights and have at times nationalized or expropriated the assets of
private companies. There is a heightened risk in these countries that such
adverse actions might be repeated.

To take advantage of potential growth opportunities, the Fund might have
significant investments in companies with relatively small market
capitalization. Securities of smaller companies may be subject to more abrupt or
erratic market movements than the securities of larger more established
companies, both because they tend to be traded in lower volume and because the
companies are subject to greater business risk. In addition, to the extent that
any China Region country experiences rapid increases in its money supply or
investment in equity securities for speculative purposes, the equity securities
traded in such countries may trade at price-earning multiples higher than those
of comparable companies trading on securities markets in the United States,
which may not be sustainable. Finally, restrictions on foreign investment exists
to varying degrees in some China Region countries. Where such restrictions
apply, investments may be limited and may increase the Fund's expenses. The SAI
contains additional information concerning the risks associated with investing
in the China Region.

SPECIAL CONSIDERATIONS RELATED TO IVY GLOBAL SCIENCE & TECHNOLOGY FUND, IVY
INTERNATIONAL SMALL COMPANIES FUND AND IVY NEW CENTURY FUND: In light of Ivy New
Century Fund's concentration in equity securities of Emerging Market growth
companies (as defined above), an investment in the Fund should be considered
speculative. In addition, both Ivy Global Science & Technology Fund and Ivy
International Small Companies Fund are expected to have significant investments
in companies with relatively small market capitalization. Securities of smaller
companies may be subject to more abrupt or erratic market movements than the
securities of larger more established companies, both because they tend to be
traded in lower volume and because the companies are subject to greater business
risk.

Because Ivy Global Science & Technology Fund normally focuses its
investments in science and technology-related industries, the value of the
Fund's shares may be more susceptible to factors affecting those industries and
to greater market fluctuation than a fund whose portfolio holdings are more
diverse. For example, rapid advances in these industries tend to render existing
products obsolete. In addition, many companies in which the Fund is likely to
invest are subject to government regulations and approval of their products and
services, which may affect their overall profitability and cause their stock
prices to be more volatile. In selecting the Fund's portfolio of investments,
IMI will consider each company's ability to create new products, secure any
necessary regulatory approvals, and generate sufficient customer demand. A
company's failure to perform well in any one of these areas, however, could
cause its stock to decline sharply.

SPECIAL CONSIDERATIONS RELATED TO IVY GLOBAL NATURAL RESOURCES FUND: Since
the Fund normally invests a substantial portion of its assets in securities of
companies engaged in natural resources activities, the Fund may be subject to
greater risks and market fluctuations than funds with more diversified
portfolios. The value of the Fund's securities will fluctuate in response to
market conditions generally, and will be particularly sensitive to the markets
for those natural resources in which a particular issuer is involved. The values
of natural resources may also fluctuate directly with respect to real and
perceived inflationary trends and various political developments. In addition,
many natural resource companies have been subject to significant costs
associated with compliance with environmental and other safety regulations. In
selecting the Fund's portfolio of investments, IMI will consider each company's
ability to create new products, secure any necessary regulatory approvals, and
generate sufficient customer demand. A company's failure to perform well in any
one of these areas, however, could cause its stock to decline sharply.

To take advantage of potential growth opportunities, the Fund might have
significant investments in companies with relatively small market
capitalization.

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Securities of smaller companies may be subject to more abrupt or erratic market
movements than the securities of larger more established companies because they
tend to be traded in lower volume and because the companies are subject to
greater business risk.

The Fund's investments in precious metals (such as gold) and other physical
commodities are subject to special risk considerations, including substantial
price fluctuations over short periods of time. On the other hand, investments in
precious metals coins or bullion could help to moderate fluctuations in the
value of the Fund's portfolio, since the prices of precious metals have at times
tended not to fluctuate as widely as shares of issuers engaged in the mining of
precious metals. Because precious metals and other commodities do not generate
investment income, however, the return on such investments will be derived
solely from the appreciation and depreciation on such investments. The Fund may
also incur storage and other costs relating to its investments in precious
metals and other commodities, which may, under certain circumstances, exceed
custodial and brokerage costs associated with investments in other types of
securities. When the Fund purchases a precious metal, IMI currently intends that
it will only be in a form that is readily marketable.

SPECIAL CONSIDERATIONS RELATED TO IVY LATIN AMERICA STRATEGY FUND: The
securities markets of Latin American countries are substantially smaller, less
developed, less liquid and more volatile than the major securities markets in
the United States. This could cause prices to be erratic for reasons apart from
factors that affect the quality of the securities. For example, limited market
size may cause prices to be unduly influenced by traders who control large
positions. Adverse publicity and investor perception, whether or not based on
fundamental analysis, may decrease the value and liquidity of portfolio
securities, especially in these markets.

For many years, most Latin American countries have experienced substantial
(and in some periods extremely high) rates of inflation, which have had and may
continue to have very negative effects on the economies and securities markets
of these countries. In addition, certain Latin American countries are among the
largest debtors to commercial banks and foreign governments, and some have
declared moratoria on the payment of principal and/or interest on external debt.
Accordingly, the Sovereign Debt instruments in which the Fund may invest involve
a high degree of risk and should be considered equivalent in quality to debt
securities rated below investment-grade by Moody's and S&P.

The Fund is classified as a non-diversified investment company under the
1940 Act, and therefore may invest, with respect to 50% of its total assets,
more than 5% of its total assets in the securities of any one issuer.
Consequently, the performance of a single issuer in which the Fund has invested
may have a more significant effect on the overall performance of the Fund than
if the Fund were a diversified company.

BANK OBLIGATIONS: The bank obligations in which the Funds may invest
include certificates of deposit, bankers' acceptances, and other short-term debt
obligations. Investments in certificates of deposit and bankers' acceptances are
limited to obligations of (i) banks having total assets in excess of $1 billion,
and (ii) other banks if the principal amount of the obligation is fully insured
by the Federal Deposit Insurance Corporation ("FDIC"). Investments in
certificates of deposit of savings associations are limited to obligations of
Federal or state-chartered institutions whose total assets exceed $1 billion and
whose deposits are insured by the FDIC.

COMMERCIAL PAPER: Commercial paper represents short-term unsecured
promissory notes issued in bearer form by bank holding companies, corporations,
and finance companies. Each Fund's investments in commercial paper are limited
to obligations rated Prime-1 by Moody's or A-1 by S&P, or if not rated, are
issued by companies having an outstanding debt issue currently rated Aaa or Aa
by Moody's or AAA or AA by S&P.

CONVERTIBLE SECURITIES: The convertible securities in which the Funds may
invest include corporate bonds, notes, debentures and other securities
convertible into common stocks. Because convertible securities can be converted
into equity securities, their values will normally vary in some proportion with
those of the underlying equity securities. Convertible securities usually
provide a higher yield than the underlying equity, however, so that the price
decline of a convertible security may sometimes be less substantial than that of
the underlying equity security.

Mortgage-backed securities are securities representing part ownership of a
pool of mortgage loans. Although the mortgage loans in the pool will have
maturities of up to 30 years, the actual average life of the loans typically
will be substantially less because the mortgages will be subject to principal
amortization and may be prepaid prior to maturity. In periods of falling
interest rates, the rate of prepayment tends to increase, thereby shortening the
actual average life of the security. Conversely, rising interest rates tend to
decrease the rate of prepayment, thereby lengthening the security's actual
average life (and increasing the security's price volatility). Since it is not
possible to predict accurately the average life of a particular pool, and
because prepayments are reinvested at current rates, the market value of
mortgage-backed securities may decline during periods of declining interest
rates.

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elements may be present that suggest a susceptibility to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories. Bonds rated Baa/BBB (considered by Moody's to be "medium grade"
obligations) are considered to have an adequate capacity to pay interest and
repay principal, but certain protective elements may be lacking (i.e., such
bonds lack outstanding investment characteristics and have some speculative
characteristics).

LOW-RATED DEBT SECURITIES: Securities rated lower than Baa or BBB, and
comparable unrated securities (commonly referred to as "high yield" or "junk"
bonds), are considered by major credit-rating organizations to have
predominately speculative characteristics with respect to the issuer's capacity
to pay interest and repay principal. Investors in those Funds that invest in
these securities, should be willing to accept the special risks associated with
these securities.

While high yield debt securities are likely to have some quality and
protective characteristics, these qualities are largely outweighed by the risk
of exposure to adverse conditions and other uncertainties. Accordingly,
investments in such securities, while generally providing for greater income and
potential opportunity for gain than investments in higher-rated securities, also
entail greater risk (including the possibility of default or bankruptcy of the
issuer of such securities) and generally involve greater price volatility than
securities in higher rating categories. IMI seeks to reduce risk through
diversification (including investments in foreign securities), credit analysis
and attention to current developments and trends in both the economy and
financial markets. Should the rating of a portfolio security be downgraded, IMI
will determine whether it is in the affected Fund's best interest to retain or
dispose of the security (unless the security is downgraded below the rating of
C, in which case IMI most likely would dispose of the security based on then
existing market conditions). For additional information regarding the risks
associated with investing in high yield bonds, see the SAI (and, in particular,
Appendix A, which contains a more complete description of the ratings assigned
by Moody's and S&P).

In many foreign countries, there is less regulation of business and industry
practices, stock exchanges, brokers and listed companies than in the United
States. For example, foreign companies are not generally subject to uniform
accounting and financial reporting standards, and foreign securities
transactions may be subject to higher brokerage costs. There also tends to be
less publicly available information about issuers in foreign countries, and
foreign securities markets of many of the countries in which the Funds may
invest may be smaller, less liquid and subject to greater price volatility than
those in the United States. Generally, price fluctuations in the Funds' foreign
security holdings are likely to be high relative to those of securities issued
in the United States.

OPTIONS AND FUTURES TRANSACTIONS: The Funds may use various techniques to
increase or decrease their exposure to changing security prices, currency
exchange rates, commodity prices, or other factors that affect the value of the
Funds' securities. These techniques may involve derivative transac-

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tions such as purchasing put and call options, selling put and call options, and
engaging in transactions in foreign currency futures, stock index futures and
related options.

A Fund may invest in options on securities in accordance with its stated
investment objective and policies (see above). A put option is a short-term
contract that gives the purchaser of the option, in return for a premium, the
right to sell the underlying security or currency to the seller of the option at
a specified price during the term of the option. A call option is a short-term
contract that gives the purchaser the right to buy the underlying security or
currency from the seller of the option at a specified price during the term of
the option. An option on a stock index gives the purchaser the right to receive
from the seller cash equal to the difference between the closing price of the
index and the exercise price of the option.

A Fund may also enter into futures transactions in accordance with its
stated investment objective and policies. An interest rate futures contract is
an agreement between two parties to buy or sell a specified debt security at a
set price on a future date. A foreign currency futures contract is an agreement
to buy or sell a specified amount of a foreign currency for a set price on a
future date. A stock index futures contract is an agreement to take or make
delivery of an amount of cash based on the difference between the value of the
index at the beginning and at the end of the contract period.

PRECIOUS METALS AND OTHER PHYSICAL COMMODITIES: Investors in Ivy Global
Natural Resources Fund should be aware that commodities trading is generally
considered a speculative activity. For example, prices of precious metals are
affected by factors such as cyclical economic conditions, political events and
monetary policies of various countries. Accordingly, markets for precious metals
may at times be volatile and there may be sharp price fluctuations even during
periods when prices overall are rising. Investments in physical commodities may
also present practical problems of delivery, storage and maintenance, possible
illiquidity, the unavailability of accurate market valuations and increased
expenses.

SHARES OF OTHER INVESTMENT COMPANIES: As a shareholder of an investment
company, a Fund will bear its ratable share of the investment company's expenses
(including management fees, in the case of a management investment company).

SMALL COMPANIES: Investing in smaller company stocks involves certain
special considerations and risks that are not usually associated with investing
in larger, more established companies. For example, the securities of smaller
companies may be subject to more abrupt or erratic market movements, because
they tend to be thinly traded and are subject to a greater degree to changes in
the issuer's earnings and prospects. Small companies also tend to have limited
product lines, markets or financial resources. Transaction costs in smaller
company stocks also may be higher than those of larger companies.

WARRANTS: The holder of a warrant has the right to purchase a given number
of shares of a particular issuer at a specified price until expiration of the
warrant. Such investments can provide a greater potential for profit or loss
than an equivalent investment in the underlying security, and are considered
speculative investments. For example, if a warrant were not exercised by the
date of its expiration, a Fund would lose its entire investment.

ZERO COUPON BONDS: Zero coupon bonds are debt obligations issued without
any requirement for the periodic payment of interest, and are issued at a
significant discount from face value. Since the interest on such bonds is, in
effect, compounded, they are subject to greater market value fluctuations in
response to changing interest rates than debt securities that distribute income
regularly. In addition, for Federal income tax purposes a Fund generally
recognizes and is required to distribute income generated by zero coupon bonds
currently in the amount of the unpaid accrued interest, even though the actual
income will not yet have been received by the Fund.

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<PAGE> 21

ORGANIZATION AND MANAGEMENT OF THE FUNDS

Each Fund, other than Ivy Latin America Strategy Fund, is organized as a
separate, diversified portfolio of the Trust, an open-end management investment
company organized as a Massachusetts business trust on December 21, 1983. Ivy
Latin America Strategy Fund is organized as a non-diversified portfolio (see
"Special Considerations Related to Ivy Latin America Strategy Fund"). The
business and affairs of each Fund are managed under the direction of the
Trustees. Information about the Trustees, as well as the Trust's executive
officers, may be found in the SAI. The Trust has an unlimited number of
authorized shares of beneficial interest, and currently has 16 separate
portfolios. Each Fund has three classes of shares, designated as Class A, Class
B and Class C. Ivy Global Science & Technology Fund, Ivy International Fund and
Ivy International Small Companies Fund each has a fourth class of shares
designated as Class I. Shares of each Fund entitle their holders to one vote per
share (with proportionate voting for fractional shares). The shares of each
class represent an interest in the same portfolio of Fund investments. Each
class of shares, except for Class I, has a separate Rule 12b-1 distribution plan
and bears different distribution fees. In addition, Class I shares of Ivy Global
Science & Technology Fund, Ivy International Fund and Ivy International Small
Companies Fund bear lower administrative service and transfer agency fees than
each such Fund's Class A, Class B and Class C shares. Shares of each class have
equal rights as to voting, redemption, dividends and liquidation but have
exclusive voting rights with respect to their Rule 12b-1 distribution plans.

The Trust employs IMI to provide business management services to the Funds,
and investment advisory services to all of the Funds other than Ivy Canada Fund
and Ivy Global Natural Resources Fund (which are advised by MFC). MIMI provides
administrative and accounting services. Ivy Mackenzie Distributors, Inc.
("IMDI") distributes the Funds' shares, and Ivy Mackenzie Services Corp.
("IMSC") provides transfer agency and shareholder-related services for the
Funds. IMI, IMDI and IMSC are wholly-owned subsidiaries of MIMI. As of March 31,
1997, IMI and MIMI had approximately $2.70 billion and $145 million,
respectively, in assets under management. MIMI is a subsidiary of MFC, which has
been an investment counsel and mutual fund manager in Toronto, Ontario, Canada
for more than 25 years.

INVESTMENT MANAGER

IVY CANADA FUND AND IVY GLOBAL NATURAL RESOURCES FUND: For IMI's business
management services, each Fund pays IMI a fee, which is accrued daily and paid
monthly, based on the Fund's average net assets at an annual rate of 0.50%. Each
Fund pays MFC a monthly fee for advisory services, which is accrued daily and
paid monthly, based on the Fund's average net assets at an annual rate of 0.35%
and 0.50% for Ivy Canada Fund and Ivy Global Natural Resources Fund,
respectively.

IVY ASIA PACIFIC FUND, IVY CHINA REGION FUND, IVY GLOBAL SCIENCE &
TECHNOLOGY FUND, IVY INTERNATIONAL FUND, IVY INTERNATIONAL SMALL COMPANIES FUND,
IVY LATIN AMERICA STRATEGY FUND AND IVY NEW CENTURY FUND: For IMI's business
management and investment advisory services, each Fund pays IMI a fee, which is
accrued daily and paid monthly, based on the Fund's average net assets at an
annual rate of 1.00%.

IMI voluntarily limits the total operating expenses for each Fund except Ivy
International Fund (excluding Rule 12b-1 fees, interest, taxes, brokerage
commissions, litigation, indemnification, and extraordinary expenses) to an
annual rate of 1.95% of the Funds' average net assets, which may lower each
Fund's expenses and increase its total return. This voluntary expense limitation
may be terminated or revised at any time, at which point the affected Fund's
expenses may increase and its total return may be reduced.

Northern Cross currently serves as subadviser for Ivy International Fund,
for which IMI pays a fee at a rate equal, on an annual basis, to 0.60% of the
Fund's average net assets. From July 1, 1990 through March 31, 1993 and from
November 18, 1985 through June 30, 1990, Boston Overseas Investors, Inc. and
Marsh & Cunningham, Inc., respectively, provided subadvisory services to the
Fund, based on the same investment strategy and program currently employed by
Northern Cross.

IVY GLOBAL FUND: For IMI's business management and investment advisory
services, the Fund pays IMI a fee, which is accrued daily and paid monthly,
based on the Fund's average net assets at an annual rate of 1.00% of the first
$500 million in net assets and 0.75% on net assets over $500 million. For the
fiscal year ended December 31, 1996, the effective management fee paid to IMI
was 1.00% of the Fund's average net assets.

Currently, IMI voluntarily limits the Fund's total operating expenses
(excluding Rule 12b-1 fees, interest, taxes, brokerage commissions, litigation,
indemnification, and extraordinary expenses) to an annual rate of 1.95% of the
Fund's average net assets, which may lower the Fund's expenses and increase its
total return. This voluntary expense limitation may be terminated or revised at
any time, at which point the Fund's expenses may increase and its total return
may be reduced.

ALL FUNDS: IMI pays all expenses that it incurs in rendering management
services to the Funds. Each Fund bears its own operational costs. General
expenses of the Trust that are not readily identifiable as belonging to a
particular series of the Trust (or a particular class thereof) are allocated
among and charged to each series based on its relative net asset size. Expenses
that are attributable to a particular Fund (or class thereof) will be borne by
that Fund (or class) directly. The fees payable to IMI are subject to any
reimbursement or fee waiver to which IMI may agree. The investment management
fees paid by the Funds are higher than those charged by many funds that invest
primarily in U.S. securities, but not necessarily higher than the fees charged
to funds with investment objectives similar to those of the Funds.

PORTFOLIO MANAGEMENT: The following individuals have responsibilities for
management of the Funds:

- James W. Broadfoot, an Executive Vice President and Chief Investment
Officer of IMI and Vice President of the Trust, is the portfolio manager
for Ivy Global Science & Technology Fund. Prior to joining the
organization in 1990, Mr. Broadfoot was a principal in an investment
counsel firm specializing in emerging growth companies. Mr. Broadfoot has
24 years of professional investment experience, and is a Chartered
Financial Analyst. He has an MBA from The Wharton School of the University
of Pennsylvania.

- Hakan Castegren, President of Northern Cross, has been the portfolio
manager for Ivy International Fund since its inception in 1986 and has 36
years of professional investment experience. He earned his MBA from the
Stockholm School of Economics.

- Michael G. Landry is the President and a Director of IMI and MIMI and the
Chairman and a Trustee of the Trust. Mr. Landry has headed these
organizations since 1987. Previously he was a Senior Vice President and
portfolio manager with Templeton International. He has over 20 years of
professional investment experience. He has a degree in economics from
Carleton University. Mr. Landry is the portfolio manager for Ivy Global
Fund, co-manages Ivy International Small Compa-

21
<PAGE> 22

nies Fund and manages Ivy New Century Fund in conjunction with the Ivy
emerging markets research team.

- Frederick Sturm, a Senior Vice President of MFC, is the portfolio manager
of Ivy Canada Fund and Ivy Global Natural Resources Fund. Mr. Sturm joined
MFC in 1983 and has 11 years of professional investment experience. In
that time, Mr. Sturm has established a performance record in the natural
resource sector. Mr. Sturm, a Chartered Financial Analyst, is a graduate
of the University of Toronto where he earned a degree in commerce and
finance.

- Barbara Trebbi is a Senior Vice President of IMI and managing director of
the Ivy emerging markets research team. In conjunction with the Ivy
emerging markets research team she is the portfolio manager for Ivy Asia
Pacific Fund, Ivy China Region Fund and Ivy Latin America Strategy Fund.
Ms. Trebbi also co-manages Ivy International Small Companies Fund. Ms.
Trebbi joined the organization in 1988 and has nine years of professional
investment experience. She is a Chartered Financial Analyst and holds a
Graduate Diploma from the London School of Economics. In addition to Ms.
Trebbi, the Ivy emerging markets research team is comprised of Justin Lu,
who is a graduate of Shanghai International University; Oleg Makhorine,
located in Prague, who is a graduate of the Economics University of
Prague; Moira McLachlan, who earned her degree in international business
from the University of South Carolina; and Johnason Tang, located in
Shanghai, who is a graduate of Shanghai International University.

FUND ADMINISTRATION AND ACCOUNTING

MIMI provides various administrative services for the Funds, such as
maintaining the registration of Fund shares under state "Blue Sky" laws, and
assisting with the preparation of Federal and state income tax returns,
financial statements and periodic reports to shareholders. MIMI also assists the
Trust's legal counsel with the filing of registration statements, proxies and
other required filings under Federal and state law. Under this arrangement, the
average net assets attributable to each Fund's Class A, Class B and Class C
shares are subject to a fee, accrued daily and paid monthly, at an annual rate
of 0.10%. The average net assets attributable to Class I shares are subject to a
fee at the annual rate of 0.01%.

MIMI also provides certain accounting and pricing services for the Funds
(see "Fund Accounting Services" in the SAI for more information).

TRANSFER AGENT

ALTERNATIVE PURCHASE ARRANGEMENTS

CLASS A SHARES: Class A shares are subject to an initial sales charge,
unless the amount you purchase is $500,000 or more (see "Contingent Deferred
Sales Charge -- Class A Shares"). Certain purchases qualify for a reduced
initial sales charge (see "Qualifying for a Reduced Sales Charge"). Class A
shares (for all Funds except Ivy Canada Fund) are subject to ongoing service
fees at an annual rate of 0.25% of a Fund's average net assets attributable to
its Class A shares. Class A shares of Ivy Canada Fund are subject to ongoing
service and distribution fees at a combined annual rate of up to 0.40% of the
Fund's average net assets attributable to its Class A shares. If you do not
specify on your Account Application which class of shares you are purchasing, it
will be assumed that you are investing in Class A shares.

CLASS I SHARES: Class I shares are offered by Ivy Global Science &
Technology Fund, Ivy International Fund and Ivy International Small Companies
Fund only to institutions and certain individuals, and are not subject to an
initial sales charge or a CDSC, nor to ongoing service or distribution fees.
Class I shares also bear lower fees than Class A, Class B and Class C shares.

DIVIDENDS AND TAXES

DIVIDENDS: Distributions you receive from a Fund are reinvested in
additional shares of the same class of a Fund unless you elect to receive them
in cash. Dividends ordinarily will vary from one class to another.

Each Fund intends to make a distribution for each fiscal year of any net
investment income and net realized short-term capital gain, as well as any net
long-term capital gain realized during the year. An additional distribution may
be made of net investment income, net realized short-term capital gains and net
realized long-term capital gains to comply with the calendar year distribution
requirement under the excise tax provisions of Section 4982 of the Code.

Dividends paid out of a Fund's investment company taxable income (including
dividends, interest and net short-term capital gains) will be taxable

22
<PAGE> 23

to a shareholder as ordinary income. If a portion of a Fund's income consists of
dividends paid by U.S. corporations, a portion of the dividends paid by the Fund
may be eligible for the corporate dividends-received deduction. Distributions of
net capital gains (the excess of net long-term capital gains over net short-term
capital losses), if any, are taxable as long-term capital gains, regardless of
how long the shareholder has held a Fund's shares. Dividends are taxable to
shareholders in the same manner whether received in cash or reinvested in
additional Fund shares.

PERFORMANCE DATA

HOW TO BUY SHARES

Effective April 18, 1997 (the "Effective Date"), Ivy International Fund
suspended the offer of its shares to new investors. Shares of Ivy International
Fund are available for purchase only by existing shareholders of Ivy
International Fund. In addition, a prospective investor who communicated his or
her definite indication of interest in purchasing Ivy International Fund shares
within 30 days prior to the Effective Date, to either IMDI or through his or her
investment professional, may purchase Ivy International Fund shares within three
months following the Effective Date, provided the investor meets the minimum
initial investment requirement of Ivy International Fund. As of the Effective
Date, expressions of interest are no longer accepted by IMDI. Once a
shareholder's account has been liquidated, the shareholder may not invest in Ivy
International Fund at a later date.

Regular Mail:

IVY MACKENZIE SERVICES CORP.
P.O. BOX 3022
BOCA RATON, FL 33431-0922

Courier:

IVY MACKENZIE SERVICES CORP.
700 SOUTH FEDERAL HIGHWAY, SUITE 300
BOCA RATON, FL 33432

The Funds reserve the right to reject, for any reason, any purchase order.

23
<PAGE> 24

Accounts in Class I of any of the Class I Funds can be opened with a minimum
initial investment of $5,000,000; the minimum additional investment is $10,000.
The minimum initial investment in Class I of these Funds may be spread over the
thirteen-month period following the opening of the account.

BUYING ADDITIONAL SHARES: You may add to your account at any time through
any of the following options:

By Mail: Complete the investment slip attached to your statement, or write
instructions including the account registration, Fund number and account number
of the shares you wish to purchase. Send your check (payable to the Fund in
which you are investing), along with your investment slip or written
instructions, to one of the addresses above.

Through your Broker: Deliver the investment slip attached to your
statement, or written instructions, along with your payment to your registered
representative or selling broker.

By Wire: Purchases may also be made by wiring money from your bank account
to your Ivy account. Your bank may charge a fee for wiring funds. Before wiring
any funds, please call IMSC at 1-800-777-6472. Wiring instructions are as
follows:
FIRST UNION NATIONAL BANK OF FLORIDA
JACKSONVILLE, FL
ABA#063000021
ACCOUNT #2090002063833
FOR FURTHER CREDIT TO:
YOUR IVY ACCOUNT REGISTRATION
YOUR FUND NUMBER AND ACCOUNT NUMBER

By Automatic Investment Method: Complete Sections 6A and 7B on the Account
Application (see "Automatic Investment Method" on page 30 for more information).

HOW YOUR PURCHASE PRICE IS DETERMINED

Orders placed with a securities dealer before the NAV is determined that are
transmitted through the facilities of the National Securities Clearing
Corporation on the same day are confirmed at that day's price. Any loss
resulting from the dealer's failure to submit an order by the deadline will be
borne by that dealer.

HOW EACH FUND VALUES ITS SHARES

INITIAL SALES CHARGE ALTERNATIVE -- CLASS A SHARES

Shares are purchased at a public offering price equal to their NAV per share
plus a sales charge, as set forth below.

<TABLE>
<CAPTION>
SALES CHARGE
----------------------- PORTION OF
AS A AS A PUBLIC
PERCENTAGE PERCENTAGE OFFERING
OF PUBLIC OF NET PRICE
OFFERING AMOUNT RETAINED
AMOUNT INVESTED PRICE INVESTED BY DEALER
--------------- ---------- ---------- ----------
<S> <C> <C> <C>
Less than $50,000.................................... 5.75% 6.10% 5.00%
$50,000 but less than $100,000....................... 5.25% 5.54% 4.50%
$100,000 but less than $250,000...................... 4.50% 4.71% 3.75%
$250,000 but less than $500,000...................... 3.00% 3.09% 2.50%
$500,000 or over*.................................... 0.00% 0.00% 0.00%
</TABLE>

* A CDSC may apply to the redemption of Class A shares that are purchased
without an initial sales charge. See "Contingent Deferred Sales Charge --
Class A Shares."

Sales charges are not applied to any dividends or capital gains that are
reinvested in additional shares of the Fund. An investor may be charged a
transaction fee for Class A and Class I shares purchased or redeemed at NAV
through a broker or agent other than IMDI.

NAV COMMISSION TABLE
(FOR ALL IVY FUNDS EXCEPT IVY INTERNATIONAL FUND)

<TABLE>
<CAPTION>
PURCHASE AMOUNT COMMISSION
--------------- ----------
<S> <C> <C>
First $3,000,000.................................................. 1.00%
Next $2,000,000.................................................. .50%
Over $5,000,000.................................................. .25%
</TABLE>

24
<PAGE> 25

NAV COMMISSION TABLE
(IVY INTERNATIONAL FUND)

<TABLE>
<CAPTION>
PURCHASE AMOUNT COMMISSION
--------------- ----------
<S> <C> <C>
First $3,000,000.................................................. .50%
Next $2,000,000.................................................. .25%
Over $5,000,000.................................................. .10%
</TABLE>

Dealers who receive 90% or more of the sales charge may be deemed to be
"underwriters" as that term is defined in the 1933 Act.

IMDI compensates participating brokers who sell Class A shares through the
initial sales charge. IMDI retains that portion of the initial sales charge that
is not reallowed to the dealers, which it may use to distribute a Fund's Class A
shares. Pursuant to separate distribution plans for the Funds' Class A, Class B
and Class C shares, IMDI bears various promotional and sales related expenses,
including the cost of printing and mailing prospectuses to persons other than
shareholders. Pursuant to the Funds' Class A distribution plans, IMDI currently
pays a continuing service fee to qualified dealers at an annual rate of 0.25% of
qualified investments.

CONTINGENT DEFERRED SALES CHARGE -- CLASS A SHARES

Purchases of $500,000 or more of Class A shares will be made at NAV with no
initial sales charge, but if the shares are redeemed within 24 months (12
months, in the case of Ivy International Fund) after the end of the calendar
month in which the purchase was made (the CDSC period), a CDSC of 1.00% will be
imposed (0.50%, in the case of Ivy International Fund).

WAIVER OF CONTINGENT DEFERRED SALES CHARGE: The CDSC is waived for (i)
redemptions in connection with distributions not exceeding 12% annually of the
initial account balance (i.e., the value of the shareholder's Class A Fund
account at the time of the initial distribution) (ia) following retirement under
a tax qualified retirement plan, or (ib) upon attaining age 59 1/2 in the case
of an IRA, a custodial account pursuant to section 403(b)(7) of the Code or a
Keogh Plan; (ii) redemption resulting from tax-free return of an excess
contribution to an IRA; or (iii) any partial or complete redemption following
the death or disability (as defined in Section 72(m)(7) of the Code) of a
shareholder from an account in which the deceased or disabled is named, provided
that the redemption is requested within one year of death or disability. IMDI
may require documentation prior to waiver of the CDSC.

QUALIFYING FOR A REDUCED SALES CHARGE

Class A shares of a Fund may be purchased without an initial sales charge or
CDSC by (i) officers and Trustees of the Trust (and their relatives), (ii)
officers, directors, employees, retired employees, legal counsel and accountants
of IMI, MIMI, and MFC (and their relatives), and (iii) directors, officers,
partners, registered representatives, employees and retired employees (and their
relatives) of dealers having a sales agreement with IMDI (or trustees or
custodians of any qualified retirement plan or IRA established for the benefit
of any such person). In addition, certain investment advisors and financial
planners who charge a management, consulting or other fee for their services and
who place trades for their own accounts or the accounts of their clients may
purchase Class A shares of a Fund without an initial sales charge or a CDSC,
provided such purchases are placed through a broker or agent who maintains an
omnibus account with that Fund. Also, clients of these advisors and planners may
make purchases under the same conditions if the purchases are through the master
account of such advisor or planner on the books of such broker or agent. This
provision applies to assets of retirement and deferred compensation plans and
trusts used to fund those plans including, but not limited to, those

25
<PAGE> 26

defined in Section 401(a), 403(b) or 457 of the Code and "Rabbi Trusts" whose
assets are used to purchase shares of a fund through the aforementioned
channels.

Class A shares of a Fund may be purchased at NAV by retirement plans
qualified under section 401(a) or 403(b) of the Code, subject to the Employee
Retirement Income Security Act of 1974, as amended. A CDSC of 1.00% (0.50%, in
the case of Ivy International Fund) will be imposed on such purchases in the
event of certain plan-level redemption transactions within 24 months (12 months,
in the case of Ivy International Fund) following such purchases. Class A shares
of a Fund are made available to Merrill Lynch Daily K Plan (the "Plan")
participants at NAV without an initial sales charge if the Plan has at least $3
million in assets or 500 or more eligible employees. Class B shares of a Fund
are made available to Plan participants at NAV without a CDSC if the Plan has
less than $3 million in assets or fewer than 500 eligible employees. For further
information see "GROUP SYSTEMATIC INVESTMENT PROGRAM" in the Fund's SAI.

If investments by retirement plans at NAV are made through a dealer who has
executed a dealer agreement with respect to a Fund, IMDI may, at the time of
purchase, pay the dealer out of IMDI's own resources a commission to compensate
the dealer for its distribution assistance in connection with the retirement
plan's investment. Please refer to the NAV Commission Tables on page 24 of this
Prospectus. Please contact IMDI for additional information.

Class A shares can also be purchased without an initial sales charge, but
subject to a CDSC of 1.00% during the first 24 months (0.50% during the first 12
months, in the case of Ivy International Fund), by: (a) any state, county or
city (or any instrumentality, department, authority or agency of such entities)
that is prohibited by applicable investment laws from paying a sales charge or
commission when purchasing shares of a registered investment management company
(an "eligible governmental authority"), and (b) trust companies, bank trust
departments, credit unions, savings and loans and other similar organizations in
their fiduciary capacity or for their own accounts, subject to any minimum
requirements set by IMDI (currently, these criteria require that the amount
invested or to be invested in the subsequent 13-month period totals at least
$250,000). In either case, IMDI may pay commissions to dealers that provide
distribution assistance on the same basis as in the preceding paragraph.

CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE -- CLASS B AND CLASS C SHARES

Class B and Class C shares are offered at NAV per share without a front end
sales charge. Class C shares redeemed within one year of purchase will be
subject to a CDSC of 1%, and Class B shares redeemed within six years of
purchase will be subject to a CDSC at the rates set forth below. This charge
will be assessed on an amount equal to the lesser of the current market value or
the original purchase cost of the shares being redeemed. Accordingly, you will
not be assessed a CDSC on increases in account value above the initial purchase
price, including shares derived from dividends or capital gains reinvested. In
determining whether a CDSC applies to a redemption, the calculation will be
determined in a manner that results in the lowest possible rate being charged.
It will be assumed that your redemption comes first from shares you have held
beyond the requisite maximum holding period or those you acquire through
reinvestment of dividends or capital gains, and next from the shares you have
held the longest during the requisite holding period.

In the case of Class B shares, the amount of the CDSC, if any, will vary
depending on the number of years from the time you purchase your Class B shares
until the time you redeem them. Solely for purposes of determining this holding
period, any payments you make during the quarter will be aggregated and deemed
to have been made on the last day of the quarter. In the case of Class C shares,
solely for purposes of determining this holding period, any purchases you make
during a month will be deemed to have been made on the last day of the month.

<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE AS A
PERCENTAGE OF DOLLAR
CLASS B SHARES AMOUNT SUBJECT TO
YEAR SINCE PURCHASE CHARGE
------------------- --------------------
<S> <C>
First......................................... 5%
Second........................................ 4%
Third......................................... 3%
Fourth........................................ 3%
Fifth......................................... 2%
Sixth......................................... 1%
Seventh and thereafter........................ 0%
</TABLE>

IMDI currently intends to pay to dealers a sales commission of 4% of the
sale price of Class B shares that they have sold, and will receive the entire
amount of the CDSC paid by shareholders on the redemption of Class B shares to
finance the 4% commission and related marketing expenses.

26
<PAGE> 27

another Ivy or Mackenzie fund, the calculation will be based on the time the
shares in the original fund were purchased.

HOW TO REDEEM SHARES

You may redeem your Fund shares through your registered securities
representative, by mail or by telephone. A CDSC may apply to certain Class A
share redemptions, to Class B share redemptions prior to conversion and to Class
C shares that are redeemed within one year of purchase. All redemptions are made
at the NAV next determined after a redemption request has been received in good
order. Requests for redemptions must be received by 4:00 p.m. Eastern time to be
processed at the NAV for that day. Any redemption request in good order that is
received after 4:00 p.m. Eastern time will be processed at the price determined
on the following business day. IF SHARES TO BE REDEEMED WERE PURCHASED BY CHECK,
PAYMENT OF THE REDEMPTION MAY BE DELAYED UNTIL THE CHECK HAS CLEARED OR FOR UP
TO 15 DAYS AFTER THE DATE OF PURCHASE. If you own shares of more than one class
of a Fund, the Fund will redeem first the shares having the highest 12b-1 fees;
any shares subject to a CDSC will be redeemed last unless you specifically elect
otherwise.

If you are not certain of the requirements for a redemption, please contact
IMSC at 1-800-777-6472.

BY MAIL: Requests for redemption in writing are considered to be in "proper
or good order" if they contain the following:

- Any outstanding certificate(s) for shares being redeemed.

- A letter of instruction, including the account registration, fund number,
the account number and the dollar amount or number of shares to be
redeemed.

- Signatures of all registered owners whose names appear on the account.

- Any required signature guarantees.

- Other supporting legal documentation, if required (in the case of estates,
trusts, guardianships, corporations, unincorporated associations,
retirement plan trustees or others acting in representative capacities).

Mail your request to IMSC at one of the addresses on page 23 of this
Prospectus.

Requests for telephone redemptions will be accepted from the registered
owner of the account, the designated registered representative or the registered
representative's assistant.

Shares held in certificate form cannot be redeemed by telephone.

Receiving Your Proceeds By Federal Funds Wire: For shareholders who
established this feature at the time they opened their account, telephone
instructions will be accepted for redemption of amounts up to $50,000 ($1,000
minimum) and proceeds will be wired on the next business day to a predesignated
bank account.

27
<PAGE> 28

Your account will be charged a fee of $10 each time redemption proceeds are
wired to your bank. Your bank may also charge you a fee for receiving a Federal
Funds wire.

Neither IMSC nor any of the Funds can be responsible for the efficiency of
the Federal Funds wire system or the shareholder's bank.

MINIMUM ACCOUNT BALANCE REQUIREMENTS

SIGNATURE GUARANTEES

For your protection, and to prevent fraudulent redemptions, we require a
signature guarantee in order to accommodate the following requests:

- Redemption requests over $50,000.

- Requests for redemption proceeds to be sent to someone other than the
registered shareholder.

- Requests for redemption proceeds to be sent to an address other than the
address of record.

- Registration transfer requests.

- Requests for redemption proceeds to be wired to your bank account (if this
option was not selected on your original application, or if you are
changing the bank wire information).

Circumstances other than those described above may require a signature
guarantee. Please contact IMSC at 1-800-777-6472 for more information.

CHOOSING A DISTRIBUTION OPTION

You have the option of selecting the distribution option that best suits
your needs:

AUTOMATIC REINVESTMENT OPTION -- Both dividends and capital gains are
automatically reinvested at NAV in additional shares of the same class of a Fund
unless you specify one of the other options.

INVESTMENT IN ANOTHER IVY OR MACKENZIE FUND -- Both dividends and capital
gains are automatically invested at NAV in another Ivy or Mackenzie Fund of the
same class.

DIVIDENDS AND CAPITAL GAINS IN CASH -- Both dividends and capital gains will
be paid in cash.

If you wish to have your cash distributions deposited directly to your bank
account via electronic funds transfer ("EFT"), or if you wish to change your
distribution option, please contact IMSC at 1-800-777-6472.

If you wish to have your cash distributions go to an address other than the
address of record, you must provide IMSC with a letter of instruction signed by
all registered owners with signatures guaranteed.

TAX IDENTIFICATION NUMBER

Certain payees, such as corporations, generally are exempt from backup
withholding. Please complete IRS Form W-9 with the new account application to
claim this exemption. If the registration is for an UGMA/UTMA account, please
provide the social security number of the minor. Non-U.S. investors who do not
have a TIN must provide, with their Account Application, a completed IRS Form
W-8.

CERTIFICATES

Certificates requested by telephone for shares valued up to $50,000 will be
issued to the current registration and mailed to the address of record. Should
you wish to have your certificates mailed to a different address, or registered
differently from the current registration, contact IMSC at 1-800-777-6472.

EXCHANGE PRIVILEGE

28
<PAGE> 29

sales charge previously paid on the outstanding Class A shares and the sales
charge payable at the time of the exchange on the new Class A shares.
Incremental sales charges are waived for outstanding Class A shares that have
been invested for 12 months or longer.

Class B (and Class C) shareholders may exchange their outstanding Class B
(or Class C) shares for Class B (or Class C) shares of another Ivy or Mackenzie
Fund on the basis of the relative NAV per Class B (or Class C) share, without
the payment of any CDSC that would otherwise be due upon the redemption of Class
B (or Class C) shares. Class B shareholders who exercise the exchange privilege
would continue to be subject to the original Fund's CDSC schedule (or period)
following an exchange if such schedule is higher (or longer) than the CDSC for
the new Class B shares.

Class I shareholders may exchange their outstanding Class I shares for Class
I shares of another Ivy or Mackenzie Fund on the basis of the relative NAV per
Class I share.

Shares resulting from the reinvestment of dividends and other distributions
will not be charged an initial sales charge or a CDSC when exchanged into
another Ivy or Mackenzie Fund.

Exchanges are considered to be taxable events, and may result in a capital
gain or a capital loss for tax purposes. Before executing an exchange, you
should obtain and read the prospectus and consider the investment objective of
the fund to be purchased. Shares must be uncertificated in order to execute a
telephone exchange. Exchanges are available only in states where they can be
legally made. This privilege is not intended to provide shareholders a means by
which to speculate on short-term movements in the market. The Funds reserve the
right to limit the frequency of exchanges. Exchanges are accepted only if the
registrations of the two accounts are identical. Amounts to be exchanged must
meet minimum investment requirements for the Ivy or Mackenzie Fund into which
the exchange is made. It is the policy of the Funds to discourage the use of the
exchange privilege for the purpose of timing short-term market fluctuations. To
protect the interests of other shareholders of a Fund, a Fund may cancel the
exchange privileges of any persons that, in the opinion of the Fund, are using
market timing strategies or are making more than five exchanges per owner or
controlling person per calendar year.

Investors who held Ivy Fund shares as of December 31, 1991, or who held
shares of certain funds that were reorganized into an Ivy or Mackenzie fund, may
be exempt from sales charges on the exchange of shares between any of the Ivy or
Mackenzie funds. If you believe you may be eligible for such an exemption,
please contact IMSC at 1-800-235-3322 for additional information.

In calculating the sales charge assessed on an exchange, shareholders will
be allowed to use the Rights of Accumulation privilege.

EXCHANGES IN WRITING: In a letter, request an exchange and provide the
following information:

- - The name and class of the fund whose shares you currently own.

- - Your account number.

- - The name(s) in which the account is registered.

- - The name of the fund in which you wish your exchange to be invested.

- - The number of shares or the dollar amount you wish to exchange.

The request must be signed by all registered owners.

REINVESTMENT PRIVILEGE

SYSTEMATIC WITHDRAWAL PLAN

You may elect the Systematic Withdrawal Plan at any time by completing the
Account Application, which is attached to this Prospectus. You can also obtain
this application by contacting your registered representative or IMSC at
1-800-777-6472. To be eligible, you must have at least $5,000 in your account.
Payments (minimum distribution amount -- $50) from your account can be made
monthly, quarterly, semi-annually, annually or on a selected monthly basis, to
yourself or any other designated payee. You may elect to have your systematic
withdrawal paid directly to your bank account via EFT, at no charge. Share
certificates must be unissued (i.e., held by a Fund) while the plan is in
effect. A Systematic Withdrawal Plan may not be established if you are currently
participating in the Automatic Investment Method. For more information, please
contact IMSC at 1-800-777-6472.

29
<PAGE> 30

Class A shares or to a CDSC imposed on your redemptions of Class B or Class C
shares. In addition, redemptions are taxable events.

Retirement accounts are eligible for Systematic Withdrawal Plans. Please
contact IMSC at 1-800-777-6472 to obtain the necessary paperwork to establish a
plan.

If the U.S. Postal Service cannot deliver your checks, or if deposits to a
bank account are returned for any reason, your redemptions will be discontinued.

AUTOMATIC INVESTMENT METHOD

You may authorize an investment to be automatically drawn each month from
your bank for investment in Fund shares by completing Sections 6A and 7B of the
Account Application. Attach a "voided" check to your account application. At
pre-specified intervals, your bank account will be debited and the proceeds will
be credited to your Ivy Fund account. The minimum investment under this plan is
$50 per month ($25 per month for retirement plans). There is no charge to you
for this program.

You may terminate or suspend your Automatic Investment Method by telephone
at any time by contacting IMSC at 1-800-777-6472.

If you have investments being withdrawn from a bank account and we are
notified that the account has been closed, your Automatic Investment Method will
be discontinued.

CONSOLIDATED ACCOUNT STATEMENTS

RETIREMENT PLANS

The Ivy and Mackenzie family of funds offer several tax-sheltered retirement
plans that may fit your needs:

- IRA (Individual Retirement Account)

- 401(k), Money Purchase Pension and Profit Sharing Plans

- SEP-IRA (Simplified Employee Pension Plan)

- 403(b)(7) Plan

- SIMPLE Plans (Individual Retirement Account and 401(k))

Minimum initial and subsequent investments for retirement plans are $25.

Please call IMSC at 1-800-777-6472 for complete information kits describing
the plans, their benefits, restrictions, provisions and fees.

SHAREHOLDER INQUIRIES

Inquiries regarding the Funds should be directed to IMSC at 1-800-777-6472.

30
<PAGE> 31

ACCOUNT APPLICATION

<TABLE>
<S> <C> <C>
IVY ASIA PACIFIC FUND IVY GLOBAL SCIENCE & TECHNOLOGY FUND
IVY CANADA FUND IVY INTERNATIONAL FUND ------------------------
IVY CHINA REGION FUND IVY INTERNATIONAL SMALL COMPANIES FUND ACCOUNT NUMBER
IVY GLOBAL FUND IVY LATIN AMERICA STRATEGY FUND
IVY GLOBAL NATURAL RESOURCES FUND IVY NEW CENTURY FUND

- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
FUND 101/ 1 / 2 1 / 2 0 / 1 0 / X
USE ------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
ONLY Dealer # Branch # Rep # Acct Type Soc Cd Div Cd CG Cd Exc Cd Red Cd
- ----------------------------------------------------------------------------------------------------------------------------------
1 [ ] Individual
Registra- [ ] Joint Tenant ------------------------------------------------------------
tion [ ] Estate Owner, Custodian or Trustee
[ ] UGMA/UTMA
[ ] Corporation ------------------------------------------------------------
[ ] Partnership Co-owner or Minor
[ ] Sole Proprietor
[ ] Trust ------------------------------------------------------------
Minor's State of Residence
-------------------
Date of Trust ------------------------------------------------------------
[ ] Other __________ Street

------------------- ------------------------------------------------------------
City State Zip Code
- - - -
----------------------- -----------------------
Phone Number -- Day Phone Number -- Evening
- ----------------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------------
2 - - or - Citizenship: [ ] U.S. [ ] Other____________
Tax --------------------------- -------------------------
ID # Social Security Number Tax Identification Number
UNDER PENALTIES OF PERJURY, I CERTIFY BY SIGNING IN SECTION 8 BELOW THAT: (1) THE NUMBER SHOWN IN
THIS SECTION IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (TIN), AND (2) I AM NOT SUBJECT TO BACKUP
WITHHOLDING BECAUSE: (A) I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE (IRS) THAT I AM
SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR (B)
THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING. (CROSS OUT ITEM (2) IF
YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF
UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN.) PLEASE SEE THE "TAX IDENTIFICATION
NUMBER" SECTION OF THE PROSPECTUS FOR ADDITIONAL INFORMATION ON COMPLETING THIS SECTION.
- ----------------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------------
3 The undersigned ("Dealer") agrees to all applicable provisions in this Application, guarantees the signature and
Dealer legal capacity of the Shareholder, and agrees to notify IMSC of any purchases made under a Letter of Intent or Rights of
Informa- Accumulation.
tion
------------------------------------------------------------ ---------------------------------------------------------
Dealer Name Representative's Name and Number

------------------------------------------------------------ ---------------------------------------------------------
Branch Office Address Representative's Phone Number

------------------------------------------------------------ ---------------------------------------------------------
City State Zip Code Authorized Signature of Dealer
- ----------------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------------
4 A. Enclosed is my check for $ _______________($1,000 minimum) made payable to the appropriate Fund.
Invest- B. Please invest in [ ] Class A shares [ ] Class B shares [ ] Class C shares [ ] Class I shares ("*" Funds
ments only) of the following Fund(s):
$ _______________ Ivy Asia Pacific Fund $ ______________ Ivy Global Science & Technology Fund*
$ _______________ Ivy Canada Fund $ ______________ Ivy International Fund*
$ _______________ Ivy China Region Fund $ ______________ Ivy International Small Companies Fund*
$ _______________ Ivy Global Fund $ ______________ Ivy Latin America Strategy Fund
$ _______________ Ivy Global Natural Resources Fund $ ______________ Ivy New Century Fund
C. I qualify for a reduced sales charge due to the following privilege (applies only to Class A shares):
[ ] New Letter of Intent (if ROA or 90-day backdate privilege is applicable, provide account(s) information below.)
[ ] ROA with the account(s) listed below.
[ ] Existing Letter of Intent with account(s) listed below.

------------------------------------ ------------------------- [ ] or New
Fund Name Account Number

[ ] $50,000 [ ] $100,000 [ ] $250,000 [ ] $500,000

D. FOR DEALER USE ONLY
Confirmed trade orders: --
--------------- --------------- ------- ---------------
Confirm Number Number of Shares Trade Date
- ----------------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------------
5 A. I would like to reinvest dividends and capital gains into additional shares of the same class in this account at
Distri- net asset value unless a different option is checked below.
bution B. [ ] Reinvest all dividends and capital gains into additional shares of the same class in an account in a different
Options Ivy or Mackenzie fund.

---------------------------------------------- ----------------------------------- [ ] New Account
Fund Name Account Number
C. [ ] Pay all dividends in cash and reinvest capital gains into additional shares of the same class in this account
or an account in a different Ivy or Mackenzie Fund.

<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
6 A. [ ] AUTOMATIC INVESTMENT METHOD (AIM)
Op- I wish to invest [ ] once per month. My bank account will be debited on or about the
tional [ ] twice _________________ day of the month*
Special [ ] 3 times _________________ day of the month
Features [ ] 4 times _________________ day of the month
_________________ day of the month
Please invest $ ________________ each period starting in the month of __________ in [ ] Class A [ ] Class B
Dollar Amount Month
or [ ] Class C of ______________________________ .
Fund Name
[ ] I have attached a voided check to ensure my correct bank account will be debited.
B. [ ] SYSTEMATIC WITHDRAWAL PLANS**
I wish to automatically withdraw funds from my [ ] Monthly [ ] Quarterly [ ] Semiannually [ ] Annually
account in Class A [ ] Class B [ ] or I request the distribution be:
Class C [ ] of _____________________ [ ] Sent to the address listed in the registration.
Fund Name [ ] Sent to the special payee listed in Section 7.
[ ] Once [ ] Twice [ ] 3 times [ ] 4 times per month [ ] Invested into additional shares of the same
class of a different Ivy or Mackenzie
fund: ____________________
Fund Name

____________________
Account Number
Amount $ _______________, starting on or about the ________ day of ____________________________
Minimum $50 month
________ day of ____________________________
month
________ day of ____________________________
month*
NOTE: Account minimum: $5,000 in shares at current offering price
C. [ ] FEDERAL FUNDS WIRE FOR REDEMPTION PROCEEDS**
I authorize the Agent to honor telephone instructions for the redemption of Fund shares up to $50,000. Proceeds may
be wire transferred to the bank account designated ($1,000 minimum). (COMPLETE SECTION 7B)
D. [ ] TELEPHONIC EXCHANGES** [ ] YES [ ] NO
I authorize exchanges by telephone among the Ivy and Mackenzie family of funds, upon instructions from any person as
more fully described in the Prospectus. To change this option once established, written instructions must be received
from the shareholder of record or the current registered representative.
If neither box is checked, the telephone exchange privilege will be provided automatically.
E. [ ] TELEPHONIC REDEMPTIONS** [ ] YES [ ] NO
The Fund or its agents are authorized to honor telephone instructions from any person as more fully described in the
Prospectus for the redemption of Fund shares. The amount of the redemption shall not exceed $50,000 and the proceeds
are to be payable to the shareholder of record and mailed to the address of record. To change this option once
established, written instructions must be received from the shareholder of record or the current registered
representative.
If neither box is checked, the telephone exchange privilege will be provided automatically.
* There must be a period of at least seven calendar days between each investment/withdrawal period.
** This option may not be selected if shares are issued in certificate form.

- ---------------------------------------------------------------------------------------------------------------------------------
7 A. MAILING ADDRESS B. FED WIRE / E.F.T. INFORMATION
Special ------------------------------------------------------------------------------------------------------------------------
Payee Please send all disbursements to this
special payee ------------------------------------------------------------
Financial Institution
------------------------------------------
Name of Bank or Individual -------------------------- -----------------------------
ABA # Account #
------------------------------------------
Account Number (if applicable) ------------------------------------------------------------
Street
------------------------------------------
Street ------------------------------------------------------------
City/State/Zip
------------------------------------------
City/State/Zip
(Please attach a voided check)
- ------------------------------------------------------------------------------------------------------------------------------------
8 Investors should be aware that failure to check "No" under Section 6D or 6E above means that the Telephone
Signatures Exchange/Redemptions Privileges will be provided. The Funds employ reasonable procedures that require personal
identification prior to acting on exchange/redemption instructions communicated by telephone to confirm that such
instructions are genuine. In the absence of such procedures, a Fund may be liable for any losses due to unauthorized or
fraudulent telephone instructions. Please see "Exchange Privilege" and "How to Redeem Shares" in the Prospectus for more
information on these privileges.

I certify to my legal capacity to purchase or redeem shares of the Fund for my own account or for the account of the
organization named in Section 1. I have received a current Prospectus and understand its terms are incorporated
in this application by reference. I am certifying my taxpayer information as stated in Section 2.

THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE
CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.

---------------------------------------------------------------------- ------------------------
Signature of Owner, Custodian, Trustee or Corporate Officer Date

---------------------------------------------------------------------- ------------------------
Signature of Joint Owner, Co-Trustee or Corporate Officer Date
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

01INTLX0497 (Remember to Sign Section 8)

IVY INTERNATIONAL BOND FUND PROSPECTUS

April 30, 1997

______________________________________________________________

Ivy Fund (the "Trust") is a registered investment
company currently consisting of sixteen separate
portfolios. One of these portfolios, Ivy International
Bond Fund (the "Fund"), is described in this
Prospectus.

This Prospectus sets forth concisely the
information about the Fund that a prospective investor
should know before investing. Please read it carefully
and retain it for future reference. Additional
information about the Fund is contained in the
Statement of Additional Information for the Fund, dated April
30, 1997, (the "SAI"), which has been filed with the
Securities and Exchange Commission (the "SEC") and is
incorporated by reference into this Prospectus. The
SAI is available upon request and without charge from
the Trust at the Distributor's address and telephone
number below. The SEC maintains a web site
(http://www.sec.gov) that contains the SAI and other material
incorporated by reference into this Prospectus.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

TABLE OF CONTENTS
Expense Information . . . . . . . . . . . . . . . . . .
. . . . . Investment Objectives and Policies . . . . .
. . . . . . . . . . Risk Factors and Investment
Techniques . . . . . . . . . . . . . Organization and
Management of the Fund . . . . . . . . . . . . .
Investment Manager . . . . . . . . . . . . . . . . . . . . . . .
Fund Administration and Accounting . . . . . . . . . .
. . . . . Transfer Agent . . . . . . . . . . . . . . .
. . . . . . . . . . Alternative Purchase Arrangements .
. . . . . . . . . . . . . . . Dividends and Taxes . . .
. . . . . . . . . . . . . . . . . . . . Performance
Data . . . . . . . . . . . . . . . . . . . . . . . .
How to Buy Shares . . . . . . . . . . . . . . . . . . . . . . . .
How Your Purchase Price is Determined . . . . . . . . .
. . . . . How The Fund Values its Shares . . . . . . .
. . . . . . . . . . Initial Sales Charge Alternative-
Class A Shares . . . . . . . . . Contingent Deferred
Sales Charge-Class A Shares . . . . . . . . .
Qualifying for a Reduced Sales Charge . . . . . . . . . . . . . .
Contingent Deferred Sales Charge Alternative-Class B and
Class C Shares . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . How to Redeem Share . . . . . . . . .
. . . . . . . . . . . . . . Minimum Account Balance
Requirements . . . . . . . . . . . . . . Signature
Guarantees . . . . . . . . . . . . . . . . . . . . . .
Choosing a Distribution Option . . . . . . . . . . . . . . . . .

Tax Identification Number . . . . . . . . . . . . . . .
. . . . . Certificates . . . . . . . . . . . . . . . .
. . . . . . . . . . Exchange Privilege . . . . . . . .
. . . . . . . . . . . . . . . Reinvestment Privilege .
. . . . . . . . . . . . . . . . . . . . Systematic
Withdrawal Plan . . . . . . . . . . . . . . . . . . .
Automatic Investment Method . . . . . . . . . . . . . . . . . . .
Consolidated Account Statements . . . . . . . . . . . .
. . . . . Retirement Plans . . . . . . . . . . . . . .
. . . . . . . . . . Shareholder Inquiries . . . . . . .
. . . . . . . . . . . . . . .

BOARD OF TRUSTEES
John S. Anderegg, Jr.
Paul H. Broyhill
Keith J. Carlson
Stanley Channick
Frank W. DeFriece, Jr.
Roy J. Glauber
Michael G. Landry
Joseph G. Rosenthal
Richard N. Silverman
J. Brendan Swan

OFFICERS
Michael G. Landry, Chairman
Keith J. Carlson, President
James W. Broadfoot, Vice President
C. William Ferris, Secretary/Treasurer

LEGAL COUNSEL
Dechert Price & Rhoads
Boston, MA

CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA

TRANSFER AGENT
Ivy Mackenzie Services Corp.
P.O. Box 3022
Boca Raton, FL
33431-0922
1-800-777-6472

AUDITORS
Coopers & Lybrand L.L.P.
Ft. Lauderdale, FL

INVESTMENT MANAGER
Ivy Management, Inc.
700 South Federal Highway
Boca Raton, FL 33432
1-800-456-5111

DISTRIBUTOR
Ivy Mackenzie Distributors, Inc.
Via Mizner Financial Plaza
700 South Federal Highway
Boca Raton, FL 33432
1-800-456-5111

EXPENSE INFORMATION

The tables and examples below are designed to
assist you in understanding the various costs and
expenses that you will bear directly or indirectly as
an investor in the Fund. The information is based on
estimated amounts for the current fiscal year.

SHAREHOLDER TRANSACTION EXPENSES

CLASS A CLASS B
CLASS C Maximum sales load imposed on
purchases (as a percentage of
offering price at time of
purchase) 4.75%(1) None
None

Maximum contingent deferred
sales charge(as a percentage
of original purchase price) None(2) 5.00%(3)
1.00%(4)

The Fund does not charge a redemption fee, an exchange
fee, or a sales load on reinvested dividends.

(1) Class A shares may be purchased under a variety of
plans that provide for the reduction or
elimination of the sales charge.
(2) A contingent deferred sales charge ("CDSC") may
apply to the redemption of Class A shares that are
purchased without an initial sales charge. See
"Purchases of Class A Shares at Net Asset Value"
and "Contingent Deferred Sales Charge -- Class A
Shares."
(3) The maximum CDSC on Class B shares applies to
redemptions during the first year after purchase.
The charge declines to 4% during the second year;
3% during the third and fourth years; 2% during
the fifth year; 1% during the sixth year; and 0%
in the seventh year and thereafter.
(4) The CDSC on Class C shares applies to redemptions
during the first year after purchase.

ANNUAL FUND OPERATING EXPENSES[*]
(as a percentage of average net assets)

CLASS A CLASS B CLASS C[#]

Management Fees(1) 0.75% 0.75% 0.75%
12b-1
Service/Distribution
Fees 0.25% 1.00%(4) 1.00%
Other Expenses 0.50%(2) 0.50%(2) .50%
(After Expense
Reimbursements)
Total Fund Operating
Expenses(1) 1,5% 2.25%(3) 2.25%(3)
(After Expense
Reimbursements)

[*] As of April 30, 1997, the date of this
Prospectus, no shares of the Fund have been
issued. [#] The inception date for Class C shares
is April 30, 1996. [1] Ivy Management, Inc. ("IMI"),
the Fund's investment manager, currently intends
to limit the Fund's Total Fund Operating Expenses
(excluding Rule 12b-1 fees and certain other items)
to an annual rate of 1.50% of the Fund's average daily net
assets, as described in this Prospectus under
"Organization of the Fund." Without
reimbursements, total fund operating expenses may
increase.
[2] The "Other Expenses" of the Fund are based on
estimated amounts for the current fiscal year.
[3] Total Fund Operating Expenses for Class B and
Class C shares of the Fund are higher than such
expenses for other mutual funds with similar
investment objectives.
[4] Long-term investors may, as a result of the Fund's
12b-1 fees, pay more than the economic equivalent
of the maximum front-end sales charge permitted by
the Rules of Fair Practice of the National
Association of Securities Dealers, Inc.

EXAMPLE
CLASS A SHARES

The following table lists the expenses that an investor
would pay on a $1,000 investment, assuming (1) 5%
annual return and (2) unless otherwise noted,
redemption at the end of each time period. These
examples further assume reinvestment of all dividends
and distributions, and that the percentage amounts
under "Total Fund Operating Expenses"** remain the same each
year. THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION
OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE
HIGHER OR LOWER THAN THOSE SHOWN.

1 YEAR
3 YEARS

Class A Shares* $62
$92

Class B Shares $73(1)
$100(2) Class B Shares (no redemption)
$23 $70 Class C Shares
$40(3) $91 Class C Shares (no redemption)
$30 $91

* Assumes deduction of the maximum 4.75% initial
sales charge at the time of purchase and no
deduction of a CDSC at the time of redemption.

** Based on Total Fund Operating Expenses net of
expense reimbursements (see "Annual Fund Operating
Expenses Table," above).

(1) Assumes deduction of a 5% CDSC at the time of
redemption. (2) Assumes deduction of a 3% CDSC at the
time of redemption. (3) Assumes deduction of a 1% CDSC
at the time of redemption.

The purpose of the foregoing table is to assist an
investor in understanding the various costs that he or
she will bear directly or indirectly. The information
presented in the preceding table does not reflect the
charge of $10 per transaction that would apply if a
shareholder elects to have redemption proceeds wired to
his or her bank account. For a more detailed discussion
of the Fund's fees and expenses, see the following
sections of this Prospectus: "Organization and
Management of the Fund," "Initial Sales Charge Alternative --
Class A Shares" and "Contingent Deferred Sales Charge
Alternative -- Class B and Class C Shares"; and
"Investment Advisory and Other Services" in the SAI.

The percentages expressing annual fund operating
expenses are based on estimated expenses of the Fund
during the current fiscal year, except as otherwise
noted in the Expense Data Table. For a more detailed
discussion of the Fund's fees and expenses, see the
following sections of the Prospectus: "Organization and
Management of the Fund," "Initial Sales Charge Alternative--Class
A Shares," "Contingent Deferred Sales Charge
Alternative--Class B and Class C Shares," and "How to
Buy Shares," and the following section of the SAI:
"Investment Advisory and Other Services."

INVESTMENT OBJECTIVES AND POLICIES

The Fund is a non-diversified company which has a
principal investment objective of current income
primarily by investing in high-grade non-U.S. dollar-
denominated bonds (international bonds). Protection,
and possible enhancement, of principal value through
active management of currency, bond market and maturity
exposure and through security selection is a secondary objective.
There can be no assurance that the Fund's objectives
will be met. The different types of securities and
investment techniques used by the Fund involve varying
degrees of risk. For information about the particular
risks associated with each type of investment, see
"Risk Factors and Investment Techniques," below, and
the SAI.

Whenever an investment objective, policy or
restriction of the Fund described in this Prospectus or
in the SAI states a maximum percentage of assets that
may be invested in a security or other asset or
describes a policy regarding quality standards, that
percentage limitation or standard will, unless otherwise
indicated, apply to the Fund only at the time a transaction takes
place. Thus, for example, if a percentage limitation is
adhered to at the time of investment, a later increase
or decrease in the percentage that results from
circumstances not involving any affirmative action by
the Fund will not be considered a violation.

The Fund's investment objectives are fundamental and
may not be changed without the approval of a majority
of the Funds' outstanding voting shares (as defined
under the Investment Company Act of 1940, as amended
(the "1940 Act"). The Trustees may make non-material
changes in the Fund's objectives without shareholder
approval. Except for the Fund's investment objectives
and those investment restrictions specifically
identified as fundamental, all investment policies and practices
described in this Prospectus and in the SAI are non-
fundamental and may be changed by the Trustees without
shareholder approval. There can be no assurance that
the Fund's objectives will be met.

INVESTING IN INTERNATIONAL BOND MARKETS

The U.S. dollar-denominated bond market now represents
less than one half of the world's developed bond
markets. As a result, opportunities for investment in
international bond markets have become more
significant. The liquidity of international bond
markets has improved as the number of investors participating in
these markets has increased. Additionally, many
international bond markets have become more attractive
for foreign investors due to the reduction of barriers
of entry to foreign investors by deregulation and by
reduction of withholding taxes.

Concurrent with the opening of foreign markets,
restrictions on international capital flows have been
reduced or eliminated, thereby enabling investment
funds to seek the highest expected returns. As a
result, the market conditions of one nation influence
the market conditions of other countries through the
flow of international capital. The Fund is a convenient vehicle
for investing in international bond markets, some of
which may, during certain time periods, outperform the
U.S. dollar- denominated bond markets.

History has shown that returns from international bond
markets often differ from those generated by U.S. bond
markets. The variations in returns are, in part, the
result of fluctuating foreign currency exchange rates
and changes in foreign interest rates as compared with
U.S. interest rates. Although the Fund is non-
diversified under the 1940 Act, investing in the Fund can
provide an investor's existing portfolio of U.S. dollar-
denominated bonds (U.S. bonds) with international

diversification.

At times, higher investment returns may be provided by
international bonds than from U.S. bonds. For example,
international bonds may provide higher current income
and/or greater capital appreciation than U.S. bonds due
to fluctuation in foreign currencies relative to the
U.S. dollar. Of course, at any time, the opposite may
also be true.

Individual and small institutional investors often find
it difficult to participate in international bond
markets. This is due in part to the lack of current
information available about foreign entities as well as
difficulties in purchasing and selling foreign
securities, holding foreign securities in safekeeping,
and converting foreign currencies into U.S. dollars.
The Fund is a convenient and relatively low cost way for
individuals and small institutions to invest in these markets.
The Fund can provide its shareholders with potential
capital appreciation and protection, as well as income,
as is associated with a professionally managed
portfolio of high-grade international bonds. IMI has
significant experience investing in international
markets as well as in global trading, custody and
currency transactions.

In addition, the Fund offers investors the opportunity
to enjoy the benefits of all of the Ivy Mackenzie
Funds. IMI, together with its affiliate, Mackenzie
Investment Management Inc. ("MIMI"), manages a diverse
family of funds and provides a wide range of services
to help investors meet their investment needs.

RISK FACTORS AND INVESTMENT TECHNIQUES

The Fund is intended for long-term investors who can
accept the risks associated with investing in
international bonds. Total return from investment in
the Fund will consist of income after expenses, bond
price gains (or losses) in the local currency and
currency gains or losses. For federal income tax purposes,
currency gains and losses generally are regarded as ordinary
income and loss and, therefore, may increase or reduce the
amount of the Fund's distributions.

The value of the Fund's portfolio will vary in response
to a number of economic factors, the most important
being fluctuations in foreign currency exchange rates,
in market interest rates and in an issuer's
creditworthiness. Since the Fund's investments are
denominated primarily in foreign currencies, changes in
foreign currency values can significantly affect the Fund's share
price. Investors should be aware that exchange rate
movements can be significant and endure for long
periods of time. In addition, because the market value
of a debt security generally varies inversely with
changes in prevailing interest rates, the longer the
maturity of a debt security, the more volatile it will
be in terms of changes in value. There also exists the risk that
the issuer of a debt security may not be able to meet
its

obligation on interest or principal payments at the
time called for by the security.

IMI attempts to control exchange rate and interest rate
risks through active portfolio management, including
such techniques as management of currency, bond market
and maturity exposure and selection of securities based
on available yields and IMI's foreign interest rate and
currency exchange rate projections. Longer maturity
bonds tend to fluctuate more in price than shorter-term
instruments in which the Fund invests--providing
potential for both gain and loss.

Investors should not rely on an investment in the Fund
for their short-term financial needs or use the Fund as
a vehicle for playing short-term swings in the
international bond and foreign exchange markets. The
Fund should not be regarded as a total investment
program. Also, investors should be aware that
investing in international bonds may involve a higher degree of
risk than investing in U.S. bonds.

Investing in foreign securities involves special risks
and considerations not typically associated with
investing in U.S. securities. These include
differences in accounting, auditing and financial
reporting standards, generally higher commission rates
on foreign portfolio transactions, often less publicly
available information about issuers, the possibility of
expropriation or confiscatory taxation, adverse changes in
investment or exchange control regulations, political
instability which could affect U.S. investment in
foreign countries, and potential restrictions on the
flow of international capital. Additionally, dividends
or interest payable on foreign securities may be
subject to foreign taxes withheld prior to distribution
and other foreign taxes might apply. Transactions in foreign
securities may involve greater time from the trade date
until settlement than is involved for domestic
securities transactions and may involve the risk of
possible losses to the Fund due to subsequent declines
in the value of the portfolio securities. Foreign
securities often trade with less frequency and volume
than domestic securities and therefore may exhibit greater price
volatility. Because foreign securities often are
purchased with and pay in currencies of foreign
countries, the value of these assets as measured in
U.S. dollars may be affected favorably or unfavorably
by changes in currency rates and exchange control
regulations. The Fund may incur currency exchange costs when it
changes investments from one country to another.
Further, the Fund may encounter difficulties or be
unable to pursue legal remedies and obtain judgment in
foreign courts.

The Fund seeks to achieve its objective by investing
primarily in a managed portfolio of high grade bonds
denominated in foreign currencies, including European
currencies and the European Currency Unit (ECU). At
least 65% of the Fund's total assets will normally be
invested in bonds denominated in foreign currencies.
In selecting bonds for the Fund's portfolio, IMI

will consider various factors, including yields, credit
quality and the fundamental outlook for currency and
interest rate trends in different parts of the world.
IMI may also take into account the ability to hedge
currency and local bond price risk.

To be considered a high grade bond in which the Fund
primarily invests, a bond must be rated at least A or
better by Standard and Poor's Corporation ("S&P") or by
Moody's Investors Services, Inc. ("Moody's") or, if the
bond is unrated, it must be considered by IMI to be of
comparable quality in local currency terms.

The Fund may invest less than 35% of its net assets in
debt securities rated Baa or below by Moody's and/or
BBB or below by S&P or, if unrated, considered by IMI
to be of comparable quality. The Fund will not invest
in debt securities that, at the time of investment, are
rated less than C by either Moody's or S&P.

The Fund's investments may include: debt securities
issued or guaranteed by a foreign national government,
its agencies, instrumentalities or political
subdivisions; debt securities issued or guaranteed by
supranational organizations (e.g., European Investment
Bank, Inter-American Development Bank or the World
Bank); corporate debt securities; bank or bank holding
company debt securities; and other debt securities, including
those convertible into common stock. The Fund may also
invest in zero coupon securities which do not provide
for the periodic payment of interest and are sold at
significant discount from face value.

The Fund may also purchase securities which are not
publicly offered and may be subject to regulations
applicable to restricted securities.

The Fund intends to diversify among several countries
and market sectors, and to have represented, in
substantial proportions, business activities in not
less than three different countries other than the
United States. Under normal circumstances, the Fund
will invest no more than 35% of the value of its total
assets in U.S. debt securities. The Fund may engage in options,
futures, forward foreign currency contact and other
derivatives transactions, as described below, for
hedging purposes or to seek to enhance potential gain.
The Fund may invest without limit in U.S. debt
securities, including short-term money market
securities, for temporary defensive or emergency purposes. It is
not possible to predict the extent to which the Fund
might employ such optional strategies.

ADDITIONAL INFORMATION ABOUT POLICIES AND INVESTMENTS

The Fund may not make loans except through the lending
or purchase of portfolio securities or through
repurchase agreements, and may not borrow money except
as a temporary

measure for extraordinary or emergency purposes.

In addition, as a matter of non-fundamental policy, the
Fund may not invest more than 10% of its net assets in
securities which are not readily marketable, repurchase
agreements maturing in more than seven days, and
restricted securities; in no event may the Fund invest
more than 5% of its assets in restricted securities.
These instruments may be difficult to sell promptly at
an acceptable price, and the sale of certain of these
instruments may be subject to legal restrictions. Difficulty in
selling these instruments may result in a loss or may be
costly to the Fund. A description of these and other
policies and restrictions is contained under
"Investment Restrictions" in the Fund's SAI.

To protect against adverse movements of interest rates
and for purposes of liquidity, the Fund may also
purchase short-term obligations denominated in U.S. and
foreign currencies such as, but not limited to, bank
deposits, bankers' acceptances, certificates of
deposit, commercial paper, short-term government,
government agency, supranational agency and corporate
obligations, and repurchase agreements.

The Fund can use various techniques to increase or
decrease its exposure to changing security prices,
interest rates, currency exchange rates, commodity
prices, or other factors that affect security values.
These techniques may involve derivative transactions
such as buying and selling options and futures
contracts, entering into currency exchange contracts, and
purchasing indexed securities.

IMI can use these practices to adjust the risk and
return characteristics of the Fund's portfolio of
investments. If IMI judges market conditions
incorrectly or employs a strategy that does not
correlate well with the Fund's investments, these
techniques could result in a loss, regardless of whether the
intent was to reduce risk or increase return. These
techniques may increase the volatility of the Fund and
may involve a small investment of cash relative to the
magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty
to the transaction does not perform as promised.

The Fund may enter into repurchase agreements with
selected banks and broker/dealers. Under a repurchase
agreement, the Fund acquires securities, subject to the
seller's agreement to repurchase at a specified time
and price.

The Fund may purchase securities on a when-issued or
forward delivery basis, for payment and delivery at a
later date. The price and yield generally are fixed on
the date of commitment to purchase. From the time of
purchase until settlement, no interest accrues to the
Fund. At the time of settlement, the market value of
the security may differ from the purchase price.

The higher yields and high income sought by the Fund
may be obtainable from high yield, higher risk
securities in the lower rating categories of the
established rating services. These securities are
rated Baa or lower by Moody's or BBB or lower by S&P.
The Fund may invest in securities rated as low as C by
Moody's or S&P, which may indicate that the obligations are
speculative to a high degree and often in default. Securities
rated lower than Baa or BBB (and comparable unrated
securities) are commonly referred to as "high yield" or
"junk" bonds and are considered to be predominantly
speculative with respect to the issuer's continuing
ability to meet principal and interest payments.
Should the rating of a portfolio security be
downgraded, IMI will determine whether it is in the Fund's best
interest to retain or dispose of the security. However,
should any individual bond held by the Fund be
downgraded below a rating of C, IMI currently intends
to dispose of such bond based on then existing market
conditions. See Appendix A to the SAI for a more
complete description of the ratings assigned by Moody's and S&P
and their respective characteristics.

RISKS

The different types of securities and investment
techniques used by IMI all have attendant risks of
varying degrees. The Fund's investments, and
consequently its net asset value, will be subject to
the market fluctuations and risks inherent in all
securities. The following are descriptions of certain risks
related to the investments and techniques that IMI may use
from time to time.

LOW-RATED DEBT SECURITIES. The Fund may invest
less than 35% of its net assets in debt securities
rated below BBB or Baa, but no lower than C, by S&P or
Moody's. Debt obligations rated in the lower ratings
categories, or which are unrated, involve greater
volatility of price and risk of loss of principal and
income than the price and liquidity of higher rated securities.
In addition, lower ratings reflect a greater possibility
of an adverse change in financial condition affecting
the ability of the issuer to make payments of interest
and principal. The market price and liquidity of lower
rated fixed income securities generally respond to
short-term corporate and market developments to a
greater extent than the price and liquidity of higher rated
securities, because these developments are perceived to have a
more direct relationship with the ability of an issuer
of lower rated securities to meet its ongoing debt
obligations.

Reduced volume and liquidity in the high yield,
high risk bond market or the reduced availability of
market quotations may make it more difficult to dispose
of the bonds and to value accurately the Fund's assets.
The reduced availability of reliable, objective data
may increase the Fund's reliance on IMI's judgment in
valuing high yield, high risk bonds. In addition, the
Fund's investments in high yield, high risk securities
may be susceptible to adverse publicity and investor

perceptions, whether or not justified by fundamental
factors.

NON-DIVERSIFIED INVESTMENT COMPANIES. As a "non-
diversified" investment company, the Fund may invest a
greater portion of its assets in the securities of
fewer issuers, thereby exposing the Fund to greater
market and credit risk than a more broadly diversified
investment company.

REPURCHASE AGREEMENTS. Repurchase agreements are
agreements under which the Fund buys a money market
instrument and obtains a simultaneous commitment from
the seller to repurchase the instrument at a specified
time and agreed-upon yield. The Fund may enter into
repurchase agreements with banks or broker-dealers
deemed to be creditworthy by IMI under guidelines approved by the
Board of Trustees. The Fund could experience a delay in
obtaining direct ownership of the underlying
collateral, and might incur a loss if the value of the
security should decline.

ZERO COUPON SECURITIES. Zero coupon securities
are subject to greater market value fluctuations from
changing interest rates than debt obligations of
comparable maturities which make current cash interest
payments. If the Fund holds zero coupon securities in
its portfolio, it generally will recognize income currently
for federal income tax purposes in the amount of the unpaid,
accrued interest and generally will be required to
distribute dividends representing such income to
shareholders currently, even though funds representing
this income will not have been received by the Fund.
Cash to pay dividends representing unpaid, accrued
interest may be obtained from sales proceeds of portfolio
securities and from loan proceeds.

FOREIGN CURRENCY EXCHANGE TRANSACTIONS: The Fund
usually effects its currency exchange transactions on a
spot (i.e., cash) basis at the spot rate prevailing in
the foreign exchange market. However, some price spread
on currency exchange (e.g., to cover service charges)
is usually incurred when the Fund converts assets from
one currency to another. The Fund may also be affected
unfavorably by fluctuations in the relative rates of
exchange between the currencies of different nations.

FORWARD FOREIGN CURRENCY CONTRACTS: A forward
foreign currency contract involves an obligation to
purchase or sell a specific currency at a future date
at a predetermined price. Although these contracts are
intended to minimize the risk of loss due to a decline
in the value of the hedged currencies, they also tend
to limit any potential gain that might result should
the value of the currencies increase. In addition, there may be
an imperfect correlation between the Fund's portfolio
holdings of securities denominated in a particular
currency and forward contracts entered into by the
Fund, which may prevent the Fund from achieving the
intended hedge or expose the Fund to the risk of
currency exchange loss.

OPTIONS AND FUTURES TRANSACTIONS: The Fund may
use various

techniques to increase or decrease their exposure to
changing security prices, currency exchange rates,
commodity prices, or other factors that affect the
value of the Fund's securities. These techniques may
involve derivative transactions such as purchasing put
and call options, selling put and call options, and
engaging in transactions in currency rate futures, stock
index futures and related options.

The Fund may invest in options on stock indices
and on individual securities in accordance with its
stated investment objective and policies (see above). A
put option is a short-term contract that gives the
purchaser of the option, in return for a premium, the
right to sell the underlying security or currency to
the seller of the option at a specified price during the term of
the option. A call option is a short-term contract that
gives the purchaser the right to buy the underlying
security or currency from the seller of the option at a
specified price during the term of the option. An
option on a stock index gives the purchaser the right
to receive from the seller cash equal to the difference
between the closing price of the index and the exercise
price of the option.

The Fund may also enter into futures transactions
in accordance with its stated investment objective and
policies. An interest rate futures contract is an
agreement between two parties to buy or sell a
specified debt security at a set price on a future
date. A stock index futures contract is an agreement to
take or make delivery of an amount of cash based on the
difference between the value of the index at the beginning and at
the end of the contract period.

Investors should be aware that the risks
associated with the use of options and futures are
considerable. Options and futures transactions
generally involve a small investment of cash relative
to the magnitude of the risk assumed, and therefore
could result in a significant loss to the Fund if IMI judges
market conditions incorrectly or employs a strategy that does
not correlate well with the Fund's investments. The
Fund may also experience a significant loss if it is
unable to close a particular position due to the lack
of a liquid secondary market. For further information
regarding the use of options and futures transactions
and any associated risks, see the SAI.

ORGANIZATION OF THE FUND

The Fund is a separate, non-diversified portfolio
of the Trust, an open-end management investment company
organized as a Massachusetts business trust on December
21, 1983. The business and affairs of the Fund are
managed under the direction of the Trustees.
Information about the Trustees, as well as the Trust's
executive officers, may be found in the SAI. The Trust has an
unlimited number of authorized shares of beneficial
interest, and currently has sixteen series of shares.
The Trustees of the Trust also have the authority,
without shareholder approval, to

classify and reclassify the shares of the Fund into one
or more classes. The Fund has three classes of shares,
designated as Class A, Class B and Class C. Shares of
the Fund entitle their holders to one vote per share
(with proportionate voting for fractional shares). The
shares of each class represent an interest in the same
portfolio of Fund investments. Each class of shares
has a different Rule 12b-1 distribution plan and bears
different distribution fees. Shares of each class have equal
rights as to voting, redemption, dividends and liquidation
but have exclusive voting rights with respect to their
Rule 12b-1 distribution plans.

The Trust employs IMI to provide business
management and investment advisory services to the
Fund. Mackenzie Investment Management Inc. ("MIMI")
provides administrative and accounting services, Ivy
Mackenzie Distributors, Inc. ("IMDI") distributes the
Fund's shares, and Ivy Mackenzie Services Corp. ("IMSC")
provides transfer agency and shareholder-related services for the
Fund. IMI, IMDI and IMSC are wholly-owned subsidiaries
of MIMI. As of March 31, 1997, IMI and MIMI had
approximately $2.70 billion and $145 million,
respectively, in assets under management. MIMI is a
subsidiary of Mackenzie Financial Corporation ("MFC"),
which has been an investment counsel and mutual fund
manager in Toronto, Ontario, Canada for more than 25
years.

INVESTMENT MANAGER. For IMI's business management
and investment advisory services, the Fund pays IMI a
fee, which is accrued daily and paid monthly, based on
the Fund's average net assets at an annual rate of
0.75%. The fees paid by the Fund are higher than those
charged by many funds that invest primarily in U.S.
securities, but not necessarily higher than the fees charged
to funds with investment objectives similar to those of the
Fund.

Currently, IMI limits the Fund's total operating
expenses (excluding Rule 12b-1 fees, interest, taxes,
brokerage commissions, litigation, class-specific
expenses, indemnification and extraordinary expenses)
to an annual rate of 1.50% of the Fund's average net
assets, which may lower the Fund's expenses and
increase its total return. This voluntary expense limitation
expense limitation may be terminated or revised at any time,
at which point the Fund's expenses may increase and its
total return may be reduced.

IMI pays all expenses that it incurs in rendering
management services to the Fund. The Fund bears its
own operational costs. General expenses of the Trust
that are not readily identifiable as belonging to a
particular series of the Trust (or a particular class
thereof) are allocated among and charged to each series
based on its relative net asset size. Expenses that are
attributable to a particular Fund (or class thereof) will be
borne by that Fund (or class) directly. The fees payable to
IMI are subject to any reimbursement or fee waiver to
which IMI may agree.

ADMINISTRATOR. MIMI provides various
administrative services for the Fund, such as
maintaining the registration of Fund shares under state
"Blue Sky" laws, and assisting in with the preparation
of Federal and state income tax returns, financial
statements and periodic reports to shareholders. MIMI also
assists the Trust's legal counsel with the filing of
registration statements, proxies and other required
filings under Federal and state law. Under this
arrangement, the average net assets attributable to the
Fund's Class A, Class B and Class C shares are subject
to a fee, accrued daily and paid monthly, at an annual
rate of 0.10%.

MIMI also provides certain accounting and pricing
services for the Fund (see "Fund Accounting Services"
in the SAI for more information).

TRANSFER AGENT. IMSC is the transfer and
dividend-paying agent for the Fund and also provides
certain shareholder-related services . In addition,
certain broker-dealers that maintain shareholder
accounts with the Fund through an omnibus account
provide transfer agent and other shareholder-related services
that would otherwise be provided by IMSC if the individual
accounts that comprise the omnibus account were opened by
their beneficial owners directly (see "Investment
Advisory and Other Services" in the SAI).

ALTERNATIVE PURCHASE ARRANGEMENTS

CLASS A SHARES: Class A shares are subject to an
initial sales charge, unless the amount you purchase is
$500,000 or more (see "Contingent Deferred Sales Charge
- -- Class A Shares"). Certain purchases qualify for a
reduced initial sales charge (see "Qualifying for a
Reduced Sales Charge"). Class A shares are subject to
ongoing service fees at an annual rate of 0.25% of the
Fund's average net assets attributable to its Class A shares. If
you do not specify on your Account Application which
class of shares you are purchasing, it will be assumed
that you are investing in Class A shares.

CLASS B AND CLASS C SHARES. Class B and Class C
shares are not subject to an initial sales charge, but
are subject to a CDSC if redeemed within six years of
purchase, in the case of Class B shares, or within one
year of purchase, in the case of Class C shares. Both
classes of shares are subject to ongoing service and
distribution fees at a combined annual rate of up to 1.00% of the
Fund's average net assets attributable to its Class B or
Class C shares. The ongoing distribution fee will cause
these shares to have a higher expense ratio than that
of Class A shares. Also, to the extent that the Fund
pays any dividends, these higher expenses will result
in lower dividends than those paid on Class A shares.

FACTORS TO CONSIDER IN CHOOSING AN ALTERNATIVE

The multi-class structure of the Fund allows you
to choose the most beneficial way to buy shares given
the size of your purchase and the length of time you
expect to hold your shares. You should consider
whether, during the anticipated life of your Fund
investment, the accumulated service and distribution fees on
Class B and Class C shares would be less than the initial
sales charge and accumulated service fees on Class A
shares purchased at the same time, and to what extent
this differential would be offset by the Class A
shares' potentially higher return. Also, sales
personnel may receive different compensation depending on
which class of shares they are selling. The tables under the
caption "Annual Fund Operating Expenses" at the beginning of
this Prospectus contain additional information that is
designed to assist you in making this
determination.

DIVIDENDS AND TAXES

DIVIDENDS: Distributions you receive from the
Fund are reinvested in additional shares of the same
class unless you elect to receive them in cash.
Dividends ordinarily will vary from one class to
another.

The Fund intends to make a distribution for each
fiscal year of any net investment income and net
realized short-term capital gain, as well as any net
long-term capital gain, realized during the year. An
additional distribution may be made of net investment
income, net realized short-term capital gains and net
realized long-term capital gains to comply with the calendar year
distribution requirement under the excise tax provisions
of Section 4982 of the Internal Revenue Code of 1986,
as amended (the "Code").

TAXATION. The following discussion is intended
for general information only. You should consult with
your own tax adviser as to the tax consequences of an
investment in the Fund, including the status of
distributions from the Fund under applicable state or
local law.

The Fund intends to qualify annually as a regulated
investment company under the Code. To qualify, the
Fund must meet certain income, distribution and
diversification requirements. In any year in which the
Fund qualifies as a regulated investment company and
timely distributes all of its taxable income, the Fund
generally will not pay any Federal income or excise tax.

Dividends paid out of the Fund's investment company
taxable income (including dividends, interest and net
short-term capital gains) will be taxable to a
shareholder as ordinary income. If a portion of the
Fund's income consists of dividends paid by U.S.
corporations, a portion of the dividends paid by the Fund may be
eligible for the corporate dividends-received deduction.
Distributions of net capital gains (the excess of net
long-term capital gains over net short-term capital
losses), if any, are taxable as long-term capital
gains, regardless of how long the

shareholder has held the Fund's shares. Dividends are
taxable to shareholders in the same manner whether
received in cash or reinvested in additional Fund
shares.

If, for any year, the Fund's total distributions
exceed its earnings and profits, the excess will
generally be treated as a return of capital. The amount
treated as a return of capital will reduce a
shareholder's adjusted basis in his/her shares (thereby
increasing potential gain or reducing potential loss on the sale
of shares) and, to the extent that the amount exceeds
this basis, will be treated as a taxable gain.

A distribution will be treated as paid on December 31
of the current calendar year if it is declared by the
Fund in October, November or December with a record
date in such a month and paid by the Fund during
January of the following calendar year. Such
distributions will be taxable to shareholders in the calendar
year in which the distributions are declared, rather than
the calendar year in which the distributions are
received.

Investments in securities that are issued at a discount
will result each year in income to the Fund each year
equal to a portion of the excess of the face value of
the securities over their issue price, even though the
Fund receives no cash interest payments from the
securities.

Income and gains received by the Fund from sources
within foreign countries may be subject to foreign
withholding and other taxes. Unless the Fund is
eligible to and elects to "pass through" to its
shareholders the amount of foreign income and similar taxes
paid by the Fund, these taxes will reduce the Fund's
investment company taxable income, and distributions of
investment company taxable income received from the
Fund will be treated as U.S. source income.

Any gain or loss realized by a shareholder upon the
sale or other disposition of shares of the Fund, or
upon receipt of a distribution in complete liquidation
of the Fund, generally will be a capital gain or loss
which will be long-term or short-term, generally
depending upon the shareholder's holding period for the
shares.

The Fund may be required to withhold U.S. Federal
income tax at the rate of 31% of all taxable
distributions payable to shareholders who fail to
provide the Fund with their correct taxpayer
identification number or to make required
certifications, or who have been notified by the Internal Revenue
Service (the "IRS") that they are subject to backup
withholding. Backup withholding is not an additional
tax. Any amounts withheld may be credited against the
shareholder's U.S. Federal income tax liability.

Fund distributions may be subject to state, local
and foreign taxes. Distributions of the Fund which are
derived from interest

on obligations of the U.S. Government and certain of
its agencies, authorities and instrumentalities may be
exempt from state and local taxes in certain states.
Further information relating to tax consequences is
contained in the SAI.

PERFORMANCE DATA

Performance information (e.g., "total return") is
computed separately for each class of Fund shares in
accordance with formulas prescribed by the SEC.
Performance information for each class may be compared
in reports and promotional literature to indices such
as the Standard and Poor's 500 Stock Index, Dow Jones
Industrial Average, and Morgan Stanley Capital
International World Index. Advertisements, sales literature and
communications to shareholders may also contain statements
of the Fund's current yield, various expressions of
total return and current distribution rate. Performance
figures will vary in part because of the different
expense structures of the Fund's different classes. ALL
PERFORMANCE INFORMATION IS HISTORICAL AND IS NOT
INTENDED TO SUGGEST FUTURE RESULTS.

"Total return" is the change in value of an
investment in the Fund for a specified period, and
assumes the reinvestment of all distributions and
imposition of the maximum applicable sales charge.
"Average annual total return" represents the average
annual compound rate of return of an investment in a particular
class of Fund shares assuming the investment is held for
one year, five years and ten years as of the end of the
most recent calendar quarter. Where the Fund provides
total return quotations for other periods, or based on
investments at various sales charge levels or at net
asset value, "total return" is based on the total of
all income and capital gains paid to (and reinvested
by) shareholders, plus (or minus) the change in the value of the
original investment expressed as a percentage of the
purchase price.

HOW TO BUY SHARES

OPENING AN ACCOUNT: Complete and sign the Account
Application on the last page of this Prospectus. Make
your check payable to Ivy International Bond Fund. No
third party checks will be accepted. Deliver these
items to your registered representative or selling
broker, or send them to one of the addresses below:

Regular Mail:

IVY MACKENZIE SERVICES CORP.
P.O. BOX 3022
BOCA RATON, FL 33431-0922

Courier:

IVY MACKENZIE SERVICES CORP.

700 SOUTH FEDERAL HIGHWAY, SUITE 300
BOCA RATON, FL 33432

The Fund reserves the right to reject, for any
reason, any purchase order.

MINIMUM INVESTMENT POLICIES: The minimum initial
investment is $1,000; the minimum additional investment
is $100. Initial or additional amounts for retirement
accounts may be less (see "Retirement Plans").

BUYING ADDITIONAL SHARES: You may add to your
account at any time through any of the following
options:

BY MAIL: Complete the investment slip attached to
your statement, or write instructions including the
account registration, Fund number and account number of
the shares you wish to purchase. Send your check
(payable to the Fund in which you are investing), along
with your investment slip or written instructions, to
one of the addresses above.

THROUGH YOUR BROKER: Deliver the investment slip
attached to your statement, or written instructions,
along with your payment to your registered
representative or selling broker.

BY WIRE: Purchases may also be made by wiring
money from your bank account to your Ivy account. Your
bank may charge a fee for wiring funds. Before wiring
any funds, please call IMSC at 1- 800-777-6472. Wiring
instructions are as follows:

FIRST UNION NATIONAL BANK OF FLORIDA
JACKSONVILLE, FL
ABA#063000021
ACCOUNT #2090002063833
FOR FURTHER CREDIT TO:
YOUR IVY ACCOUNT REGISTRATION
YOUR FUND NUMBER AND ACCOUNT NUMBER

BY AUTOMATIC INVESTMENT METHOD: Complete Sections
6A and 7B on the Account Application (see "Automatic
Investment Method" on page _____ for more information).

HOW YOUR PURCHASE PRICE IS DETERMINED

Your purchase price for Class A shares of the Fund
is the net asset value ("NAV") per share plus a sales
charge, which may be reduced or eliminated in certain
circumstances. The purchase price per share is known
as the public offering price. Your purchase price for
Class B and Class C shares is the NAV per share.

Share purchases will be made at the next determined
price after your purchase order is received. The price
is effective for orders received by IMSC or by your
registered securities dealer

prior to the time of the determination of the NAV. Any
orders received after the time of the determination of
the NAV will be entered at the next calculated price.

Orders placed with a securities dealer before the
NAV is determined that are transmitted through the
facilities of the National Securities Clearing
Corporation on the same day are confirmed at that day's
price. Any loss resulting from the dealer's failure to
submit an order by the deadline will be borne by that
dealer.

You will receive an account statement after any
purchase, exchange or full liquidation. Statements
related to reinvestment of dividends, capital gains,
automatic investment plans (see the SAI for further
explanation) and/or systematic withdrawal plans will be
sent quarterly.

HOW THE FUND VALUES ITS SHARES

The NAV per share is the value of one share. The NAV
is determined for each Class of shares as of the close
of the New York Stock Exchange on each day the Exchange
is open by dividing the value of the Fund's net assets
attributable to a class by the number of shares of that
class that are outstanding, adjusted to the nearest
cent. These procedures are described more completely in
the SAI.

The Trust's Board of Trustees has established
procedures to value the Fund's securities in order to
determine the NAV. The value of a foreign security is
determined as of the normal close of trading on the
foreign exchange on which it is traded or as of the
close of regular trading on the New York Stock Exchange, if
that is earlier. If no sale is reported at that time, the
average between the current bid and asked prices is
used. All other securities for which OTC market
quotations are readily available are valued at the
average between the current bid and asked prices.
Securities and other assets for which market prices are
not readily available are valued at fair value, as determined by
IMI and approved in good faith by the Board. Money market
instruments of the Fund are valued at amortized
cost.

INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES

Shares are purchased at a public offering price equal
to their NAV per share plus a sales charge, as set
forth below.

SALES
CHARGE AS A AS
A PORTION OF PERCEN-
PERCEN- PUBLIC
TAGE OF TAGE OF OFFERING
PUBLIC NET PRICE
OFFERING AMOUNT RETAINED BY
PRICE INVESTED
DEALER

Less than $100,000 4.75% 4.99%
4.00% $100,000 but less than $250,000 3.75%
3.90% 3.00% $250,000 but less than $500,000
2.50% 2.56% 2.00% $500,000 or over*
0.00% 0.00% 0.00%

* A CDSC may apply to the redemption of Class A
shares that are purchased without an initial sales
charge. See "Contingent Deferred Sales Charge --
Class A Shares."

Sales charges are not applied to any dividends or
capital gains that are reinvested in additional shares
of the Fund. An investor may be charged a transaction
fee for Class A shares purchased or redeemed at NAV
through a broker or agent other than IMDI.

With respect to purchases of $500,000 or more
through dealers or agents, IMDI may, at the time of
purchase, pay such dealers or agents from its own
resources a commission to compensate such dealers or
agents for their distribution assistance in connection
with such purchases. The commission would be computed
as set forth below:

NAV COMMISSION TABLE
PURCHASE AMOUNT
COMMISSION

First $3,000,000 . . . . . . . . . . . . . . . . . . .
. . 1.00% Next $2,000,000 . . . . . . . . . . . . . . .
. . . . . . . 0.50% Over $5,000,000 . . . . . . . . . .
. . . . . . . . . . . . 0.25%

Dealers who receive 90% or more of the sales
charge may be deemed to be "underwriters" as that term
is defined in the 1933 Act.

IMDI compensates participating brokers who sell
Class A shares through the initial sales charge. IMDI
retains that portion of the initial sales charge that
is not reallowed to the dealers, which it may use to
distribute the Fund's Class A shares. Pursuant to
separate distribution plans for the Fund's Class A,
Class B and Class C shares, IMDI bears various
promotional and sales related expenses, including the cost of
printing and mailing prospectuses to persons other than
shareholders. Pursuant to the Fund's Class A distribution
plans, IMDI currently pays a continuing service fee to
qualified dealers

at an annual rate of 0.25% of qualified investments.

IMDI may from time to time pay a bonus or other
incentive to dealers (other than IMDI) which employ a
registered representative who sells a minimum dollar
amount of the shares of the Fund and/or other funds
distributed by IMDI during a specified period of time.
This bonus or other incentive may take the form of
payment for travel expenses, including lodging,
incurred in connection with trips taken by qualifying registered
representatives and members of their families to places
within or without the U.S. or other bonuses such as
gift certificates or the cash equivalent of such bonus
or incentive.

CONTINGENT DEFERRED SALES CHARGE--CLASS A SHARES

Purchases of $500,000 or more of Class A shares will be
made at NAV with no initial sales charge, but if the
shares are redeemed within 24 months after the end of
the calendar month in which the purchase was made (the
CDSC period), a CDSC of 1.00% will be imposed.

The charge will be assessed on an amount equal to
the lesser of the current market value or the original
purchase cost of the Class A shares redeemed.
Accordingly, no CDSC will be imposed on increases in
account value above the initial purchase price,
including any dividends or capital gains which have been
reinvested in additional Class A shares.

In determining whether a CDSC applies to a
redemption, the calculation will be determined in a
manner that results in the lowest possible rate being
charged. Therefore, it will be assumed that the
redemption is first made from any shares in your account
not subject to the CDSC. The CDSC is waived in certain
circumstances. See the discussion below under the caption "Waiver
of Contingent Deferred Sales Charge."

WAIVER OF CONTINGENT DEFERRED SALES CHARGE: The
CDSC is waived for: (i) redemptions in connection with
distributions not exceeding 12% annually of the initial
account balance (i.e., the value of the shareholder's
Class A Fund account at the time of the initial
distribution) (i.a) following retirement under a tax
qualified retirement plan, or (i.b) upon attaining age 59 1/2 in
the case of an IRA, a custodial account pursuant to
section 403(b)(7) of the Code or a Keogh Plan; (ii)
redemption resulting from tax-free return of an excess
contribution to an IRA; or (iii) any partial or
complete redemption following the death or disability
(as defined in Section 72(m)(7) of the Code) of a
shareholder from an account in which the deceased or disabled is
named, provided that the redemption is requested within
one year of death or disability. IMDI may require
documentation prior to waiver of the CDSC.

Class A shareholders may exchange their Class A
shares subject to a CDSC ("outstanding Class A shares")
for Class A

shares of another Ivy or Mackenzie fund ("new Class A
shares") on the basis of the relative NAV per Class A
share, without the payment of any CDSC that would be
due upon the redemption of the outstanding Class A
shares. The original CDSC rate that would have been
charged if the outstanding Class A shares were redeemed
will carry over to the new Class A shares received in the
exchange, and will be charged accordingly at the time of
redemption.

QUALIFYING FOR A REDUCED SALES CHARGE

RIGHTS OF ACCUMULATION (ROA): Rights of
Accumulation ("ROA") is calculated by determining the
current market value of all Class A shares in all Ivy
or Mackenzie fund accounts (except Ivy Money Market
Fund) owned by you, your spouse, and your children
under 21 years of age. ROA is also applicable to
accounts under a trustee or other single fiduciary (including
retirement accounts qualified under Section 401 of the
Code). The current market value of each of your
accounts as described above is added together and then
added to your current purchase amount. If the combined
total is equal or greater than a breakpoint amount for
the Fund, then you qualify for the reduced sales
charge. To reduce or eliminate the sales charge, you must
complete Section 4C of the Account Application.

LETTER OF INTENT (LOI): A Letter of Intent
("LOI") is a non-binding agreement that states your
intention to invest in additional Class A shares,
within a thirteen-month period after the initial
purchase, an amount equal to a breakpoint amount for
the Fund. The LOI may be backdated up to 90 days. To sign an LOI,
please complete Section 4C of the Account Application.

Should the LOI not be fulfilled within the
thirteen-month period, your account will be debited for
the difference between the full sales charge that
applies for the amount actually invested and the
reduced sales charge actually paid on purchases placed
under the terms of the LOI.

PURCHASES OF CLASS A SHARES AT NET ASSET VALUE:
Investors who held Ivy Fund shares as of December 31,
1991, or who held shares of certain funds that were
reorganized into an Ivy or Mackenzie fund, may be
exempt from sales charges on the purchase of Class A
shares of any of the Ivy or Mackenzie funds. If you
believe you may be eligible for such an exemption, please contact
IMSC at 1-800-235-3322 for additional information.

Class A shares of the Fund may be purchased
without an initial sales charge or CDSC by (i) officers
and Trustees of the Trust (and their relatives), (ii)
officers, directors, employees, retired employees,
legal counsel and accountants of IMI, MIMI, and MFC
(and their relatives), and (iii) directors, officers,
partners, registered representatives, employees and retired
employees (and their relatives) of dealers having a sales
agreement with IMDI (or trustees or custodians of any
qualified

retirement plan or IRA established for the benefit of
any such person). In addition, certain investment
advisers and financial planners who charge a
management, consulting or other fee for their services
and who place trades for their own accounts or the
accounts of their clients may purchase Class A shares of the Fund
without an initial sales charge or a CDSC, provided such
purchases are placed through a broker or agent who
maintains an omnibus account with the Fund. Also,
clients of these advisers and planners may make
purchases under the same conditions if the purchases
are through the master account of such adviser or
planner on the books of such broker or agent. This provision
applies to assets of retirement and deferred compensation
plans and trusts used to fund those plans including,
but not limited to, those defined in Section 401(a),
403(b) or 457 of the Code and "Rabbi Trusts" whose
assets are used to purchase shares of the Fund through
the aforementioned channels.

Class A shares of the Fund may be purchased at NAV
by retirement plans qualified under section 401(a) or
403(b) of the Code, subject to the Employee Retirement
Income Security Act of 1974, as amended. A CDSC of
1.00% will be imposed on such purchases in the event of
certain plan-level redemption transactions within 24
months following such purchases. Class A shares of a
Fund are made available to Merrill Lynch Daily K Plan
(the "Plan") participants at NAV without an initial sales charge
if the Plan has at least $3 million in assets or 500 or
more eligible employees. Class B shares of a Fund are
made available Plan participants at NAV without a CDSC
if the Plan has less than $3 million in assets or fewer
than 500 eligible employees. For further information
see "GROUP SYSTEMATIC INVESTMENT PROGRAM" in the Fund's
SAI.

If investments by retirement plans at NAV are made
through a dealer who has executed a dealer agreement
with respect to the Fund, IMDI may, at the time of
purchase, pay the dealer out of IMDI's own resources a
commission to compensate the dealer for its
distribution assistance in connection with the retirement
plan's investment. Please refer to the NAV Commission Table on
page _____ of this Prospectus. Please contact IMDI for
additional information.

Class A shares can also be purchased without an
initial sales charge, but subject to a CDSC of 1.00%
during the first 24 months by: (a) any state, county,
or city (or any instrumentality, department, authority
or agency of such entities) that is prohibited by
applicable investment laws from paying a sales charge
or commission when purchasing shares of a registered
investment management company (an "eligible
governmental authority"), and (b) trust companies, bank trust
departments, credit unions, savings and loans and other
similar organizations in their fiduciary capacity or
for their own accounts, subject to any minimum
requirements set by IMDI (currently, these criteria
require that the amount invested or to be invested in
the subsequent 13-month period totals at least

$250,000). In either case, IMDI may pay commissions to
dealers that provide distribution assistance on the
same basis as in the preceding paragraph.

Class A shares of the Fund may also be purchased
without a sales charge in connection with certain
liquidation, merger or acquisition transactions
involving other investment companies or personal
holding companies. Additional information on reductions
or waivers may be obtained from IMDI at the address listed on the
cover of the Prospectus.

CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE--CLASS B
AND CLASS C SHARES

Class B and Class C shares are offered at NAV per
share without a front end sales charge. Class C shares
redeemed within one year of purchase will be subject to
a CDSC of 1%, and Class B shares redeemed within six
years of purchase will be subject to a CDSC at the
rates set forth below. This charge will be assessed on
an amount equal to the lesser of the current market value or
the original purchase cost of the shares being redeemed.
Accordingly, you will not be assessed a CDSC on increases in
account value above the initial purchase price, including
shares derived from dividends or capital gains
reinvested. In determining whether a CDSC applies to a
redemption, the calculation will be determined in a
manner that results in the lowest possible rate being
charged. It will be assumed that your redemption comes
first from shares you have held beyond the requisite
maximum holding period or those you acquire through
reinvestment of dividends or capital gains, and next from the
shares you have held the longest during the requisite
holding period.

Proceeds from the CDSC are paid to IMDI. The
proceeds are used, in whole or in part, to defray its
expenses related to providing the Fund with
distribution services in connection with the sale of
Class B and Class C shares, such as compensating
selected dealers and agents for selling these shares. The
combination of the CDSC and the distribution and service fees
makes it possible for the Fund to sell Class B or Class C
shares without deducting a sales charge at the time of
the purchase.

In the case of Class B shares, the amount of the
CDSC, if any, will vary depending on the number of
years from the time you purchase your Class B shares
until the time you redeem them. Solely for purposes of
determining this holding period, any payments you make
during the quarter will be aggregated and deemed to
have been made on the last day of the quarter. In the
case of Class C shares, solely for purposes of determining this
holding period, any purchases you make during a month will
be deemed to have been made on the last day of the
month.

CLASS B SHARES

CONTINGENT
DEFERRED
SALES CHARGE AS
A PERCENTAGE OF
DOLLAR AMOUNT
SUBJECT TO CHARGE

First . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 5% Second . . . . . . . . . . . . . . . . . . .
. . . . . . . . 4% Third . . . . . . . . . . . . . . .
. . . . . . . . . . . . . 3% Fourth . . . . . . . . .
. . . . . . . . . . . . . . . . . . 3% Fifth . . . . .
. . . . . . . . . . . . . . . . . . . . . . . 2% Sixth
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1%
Seventh and thereafter . . . . . . . . . . . . . . . . .
0%

IMDI currently intends to pay to dealers a sales
commission of 4% of the sale price of Class B shares
that they have sold, and will receive the entire amount
of the CDSC paid by shareholders on the redemption of
Class B shares to finance the 4% commission and related
marketing expenses.

With respect to Class C shares, IMDI currently
intends to pay to dealers a sales commission of 1% of
the sale price of Class C shares that they have sold, a
portion of which is to compensate the dealers for
providing Class C shareholder account services during
the first year of investment. IMDI will receive the
entire amount of the CDSC paid by shareholders on the
redemption of Class C shares to finance the 1% commission and
related marketing expenses.

In accordance with separate distribution plans for
the Fund's Class B and Class C shares adopted pursuant
to Rule 12b-1 under the 1940 Act, IMDI bears various
promotional and sales related expenses, including the
cost of printing and mailing prospectuses to persons
other than shareholders. Under the Fund's Class B plan,
IMDI retains 0.75% of the continuing 1.00%
service/distribution fee assessed to Class B shareholders, and
pays a continuing service fee to qualified dealers at an
annual rate of 0.25% of qualified investments. Under
the Class C plan, IMDI pays continuing
service/distribution fees to qualified dealers at an
annual rate of 1.00% of qualified investments after the
first year of investment (0.25% of which represents a service
fee).

CONVERSION OF CLASS B SHARES: Your Class B shares
and an appropriate portion of both reinvested dividends
and capital gains on those shares will be converted
into Class A shares automatically no later than the
month following eight years after the shares were
purchased, resulting in lower annual distribution fees.
If you exchanged Class B shares into the Fund from Class B
shares of another Ivy or Mackenzie fund, the calculation will
be based on the time the shares in the original fund
were

purchased.

WAIVER OF CONTINGENT DEFERRED SALES CHARGE: The
CDSC is waived for: (i) redemptions in connection with
distributions not exceeding 12% annually of the initial
account balance (i.e., the value of the shareholder's
Class B or Class C Fund account at the time of the
initial distribution) (i.a) following retirement under
a tax qualified retirement plan, or (i.b) upon attaining
age 59 1/2 in the case of an IRA, a custodial account pursuant to
section 403(b)(7) of the Code or a Keogh Plan; (ii)
redemption resulting from tax-free return of an excess
contribution to an IRA; or (iii) any partial or
complete redemption following the death or disability
(as defined in Section 72(m)(7) of the Code) of a
shareholder from an account in which the deceased or
disabled is named, provided that the redemption is requested
within one year of death or disability. IMDI may require
documentation prior to waiver of the CDSC.

ARRANGEMENTS WITH BROKER-DEALERS AND OTHERS: IMDI
may, at its own expense, pay concessions in addition to
those described above to dealers that satisfy certain
criteria established from time to time by IMDI. These
conditions relate to increasing sales of shares of the
Fund over specified periods and to certain other
factors. These payments may, depending on the dealer's
satisfaction of the required conditions, be periodic and may be
up to (i) 0.25% of the value of Fund shares sold by the
dealer during a particular period, and (ii) 0.10% of
the value of Fund shares held by the dealer's customers
for more than one year, calculated on an annual basis.

HOW TO REDEEM SHARES

You may redeem your Fund shares through your
registered securities representative, by mail or by
telephone. A CDSC may apply to certain Class A share
redemptions, to Class B share redemptions prior to
conversion and to Class C shares that are redeemed
within one year of purchase. All redemptions are made at
the NAV next determined after a redemption request has been
received in good order. Requests for redemptions must be
received by 4:00 p.m. Eastern time to be processed at
the NAV for that day. Any redemption request in good
order that is received after 4:00 p.m. Eastern time
will be processed at the price determined on the
following business day. IF SHARES TO BE REDEEMED WERE
PURCHASED BY CHECK, PAYMENT OF THE REDEMPTION MAY BE DELAYED
UNTIL THE CHECK HAS CLEARED OR FOR UP TO 15 DAYS AFTER THE
DATE OF PURCHASE. If you own shares of more than one
class of the Fund, the Fund will redeem first the
shares having the highest 12b-1 fees; any shares
subject to a CDSC will be redeemed last unless you
specifically elect otherwise.

When shares are redeemed, the Fund generally sends
you payment on the next business day. Under unusual
circumstances, the Fund may suspend redemptions or
postpone payment to the extent permitted by Federal
securities laws. The proceeds of the

redemption may be more or less than the purchase price
of your shares, depending upon, among other factors,
the market value of the Fund's securities at the time
of the redemption. If the redemption is for over
$50,000, or the proceeds are to be sent to an address
other than the address of record, or an address change
has occurred in the last 30 days, it must be requested in writing
with a signature guarantee. See "Signature Guarantees,"
below.

If you are not certain of the requirements for a
redemption, please contact IMSC at 1-800-777-6472.

THROUGH YOUR REGISTERED SECURITIES DEALER: The
Dealer is responsible for promptly transmitting
redemption orders. Redemptions requested by dealers
will be made at the NAV (less any applicable CDSC)
determined at the close of regular trading (4:00 p.m.
Eastern time) on the day that a redemption request is
received in good order by IMSC.

BY MAIL: Requests for redemption in writing are
considered to be in "proper or good order" if they
contain the following:

- Any outstanding certificate(s) for shares
being redeemed.

- A letter of instruction, including the
account registration, fund number, the
account number and the dollar amount or
number of shares to be redeemed.

- Signatures of all registered owners whose
names appear on the account.

- Any required signature guarantees.

- Other supporting legal documentation, if
required (in the case of estates, trusts,
guardianships, corporations, unincorporated
associations, retirement plan trustees or
others acting in representative capacities).

The dollar amount or number of shares indicated
for redemption must not exceed the available shares or
NAV of your account at the next-determined prices. If
your request exceeds these limits, then the trade will
be rejected in its entirety.

Mail your request to IMSC at one of the addresses
on page ___ of this Prospectus.

BY TELEPHONE: Individual and joint accounts may
redeem up to $50,000 per day over the telephone by
contacting IMSC at 1- 800-777-6472. In times of unusual
economic or market changes, the telephone redemption
privilege may be difficult to implement. If you are
unable to execute your transaction by telephone, you may
want to consider placing the order in writing and sending it by
mail or overnight courier.

Checks will be made payable to the current account
registration and sent to the address of record. If there
has been a change of address in the last 30 days,
please use the instructions for redemption requests by
mail described above. A signature guarantee would be
required.

Requests for telephone redemptions will be
accepted from the registered owner of the account, the
designated registered representative or the registered
representative's assistant.

Shares held in certificate form cannot be redeemed
by telephone.

If Section 6E of the Account Application is not
completed, telephone redemption privileges will be
provided automatically. Although telephone redemptions
may be a convenient feature, you should realize that
you may be giving up a measure of security that you may
otherwise have if you terminated the privilege and
redeemed your shares in writing. If you do not wish to make
telephone redemptions or let your registered representative do
so on your behalf, you must notify IMSC in writing.

The Fund employs reasonable procedures that
require personal identification prior to acting on
redemption instructions communicated by telephone to
confirm that such instructions are genuine. In the
absence of such procedures, the Fund may be liable for
any losses due to unauthorized or fraudulent telephone
instructions.

RECEIVING YOUR PROCEEDS BY FEDERAL FUNDS WIRE:
For shareholders who established this feature at the
time they opened their account, telephone instructions
will be accepted for redemption of amounts up to
$50,000 ($1,000 minimum) and proceeds will be wired on
the next business day to a predesignated bank
account.

In order to add this feature to an existing
account or to change existing bank account information,
please submit a letter of instructions including your
bank information to IMSC at the address provided above.
The letter must be signed by all registered owners, and
their signatures must be guaranteed.

Your account will be charged a fee of $10 each
time redemption proceeds are wired to your bank. Your
bank may also charge you a fee for receiving a Federal
Funds wire.

Neither IMSC nor the Fund can be responsible for
the efficiency of the Federal Funds wire system or the
shareholder's bank.

MINIMUM ACCOUNT BALANCE REQUIREMENTS

Due to the high cost of maintaining small
accounts, the Fund may redeem the accounts of
shareholders whose investment,

including sales charges paid, has been less than $1,000
for more than 12 months. The Fund will not redeem an
account unless the shareholder has been given at least
60 days' advance notice of the Fund's intention to do
so. No redemption will be made if a shareholder's
account falls below the minimum due to a reduction in
the value of the Fund's portfolio securities. This provision
does not apply to IRAs, other retirement accounts and
UGMA/UTMA accounts.

SIGNATURE GUARANTEES

For your protection, and to prevent fraudulent
redemptions, we require a signature guarantee in order
to accommodate the following requests:

- Redemption requests over $50,000.

- Requests for redemption proceeds to be sent
to someone other than the registered
shareholder.

- Requests for redemption proceeds to be sent
to an address other than the address of
record.

- Registration transfer requests.

- Requests for redemption proceeds to be wired
to your bank account (if this option was not
selected on your original application, or if
you are changing the bank wire information).

A signature guarantee may be obtained only from an
eligible guarantor institution as defined in Rule
17Ad-15 of the Securities Exchange Act of 1934, as
amended. An eligible guarantor institution includes
banks, brokers, dealers, municipal securities dealers,
government securities dealers, government securities
brokers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings
associations. The signature guarantee must not be
qualified in any way. Notarizations from notary publics
are not the same as signature guarantees, and are not
accepted.

Circumstances other than those described above may
require a signature guarantee. Please contact IMSC at
1-800-777-6472 for more information.

CHOOSING A DISTRIBUTION OPTION

You have the option of selecting the distribution
option that best suits your needs:

AUTOMATIC REINVESTMENT OPTION -- Both dividends
and capital gains are automatically reinvested at NAV
in additional shares of the same class of the Fund
unless you specify one of the other options.

INVESTMENT IN ANOTHER IVY OR MACKENZIE FUND --
Both dividends and capital gains are automatically
invested at NAV in another Ivy or Mackenzie fund of the
same class.

DIVIDENDS IN CASH/CAPITAL GAINS REINVESTED --
Dividends will be paid in cash. Capital gains will be
reinvested at NAV in additional shares of the same
class of the Fund or another Ivy or Mackenzie fund of
the same class.

DIVIDENDS AND CAPITAL GAINS IN CASH -- Both
dividends and capital gains will be paid in cash.

If you wish to have your cash distributions
deposited directly to your bank account via electronic
funds transfer ("EFT"), or if you wish to change your
distribution option, please contact IMSC at
1-800-777-6472.

If you wish to have your cash distributions go to
an address other than the address of record, you must
provide IMSC with a letter of instruction signed by all
registered owners with signatures guaranteed.

TAX IDENTIFICATION NUMBER

In general, to avoid being subject to a 31% U.S.
Federal backup withholding tax on dividends, capital
gains distributions and redemption proceeds, you must
furnish the Fund with your certified tax identification
number ("TIN") and certify that you are not subject to
backup withholding due to prior underreporting of
interest and dividends to the IRS. If you fail to provide a
certified TIN, or such other tax-related certifications as the
Fund may require, within 30 days of opening your new
account, the Fund reserves the right to involuntarily
redeem your account and send the proceeds to your
address of record.

You can avoid the above withholding and/or
redemption by correctly furnishing your TIN, and making
certain certifications, in Section 2 of the Account
Application at the time you open your new account,
unless the IRS requires that backup withholding be
applied to your account.

Certain payees, such as corporations, generally
are exempt from backup withholding. Please complete IRS
Form W-9 with the new account application to claim this
exemption. If the registration is for an UGMA/UTMA
account, please provide the social security number of
the minor. Non-U.S. investors who do not have a TIN
must provide, with their Account Application, a
completed IRS Form W-8.

CERTIFICATES

In order to facilitate transfers, exchanges and
redemptions, most shareholders elect not to receive
certificates. Should you wish to have a certificate
issued, please contact IMSC at 1-800

777-6472 and request that one be sent to you.
(Retirement plan accounts are not eligible for this
service). Please note that if you were to lose your
certificate, you would incur an expense to replace it.

Certificates requested by telephone for shares
valued up to $50,000 will be issued to the current
registration and mailed to the address of record.
Should you wish to have your certificates mailed to a
different address, or registered differently from the
current registration, contact IMSC at 1-800-777-6472.

EXCHANGE PRIVILEGE

Shareholders of the Fund have an exchange
privilege with other Ivy and Mackenzie funds (except
Ivy International Fund unless they have an existing Ivy
International Fund account). The Fund reserves the
right to reject, for any reason, any exchange
orders.

Class A shareholders may exchange their
outstanding Class A shares for Class A shares of
another Ivy or Mackenzie fund on the basis of the
relative NAV per Class A share, plus an amount equal to
the difference between the sales charge previously paid on the
outstanding Class A shares and the sales charge payable at
the time of the exchange on the new Class A shares.
Incremental sales charges are waived for outstanding
Class A shares that have been invested for 12 months or
longer.

Class B (and Class C) shareholders may exchange
their outstanding shares for Class B (or Class C)
shares of another Ivy or Mackenzie fund on the basis of
the relative NAV per share, without the payment of any
CDSC that would otherwise be due upon redemption. Class
B shareholders who exercise the exchange privilege
would continue to be subject to the original Fund's
CDSC schedule (or period) following an exchange if such schedule
is higher (or longer) than the CDSC for the new Class B
shares.

Shares resulting from the reinvestment of
dividends and other distributions will not be charged
an initial sales charge or a CDSC when exchanged into
another Ivy or Mackenzie fund.

policy of the Fund to discourage the use of the
exchange privilege for the purpose of timing short-term
market fluctuations. To protect the interests of other
shareholders of the Fund, the Fund may cancel the
exchange privileges of any persons that, in the opinion
of the Fund, are using market timing strategies or ar
making more than five exchanges per owner or
controlling person per calendar year.

With respect to shares subject to a CDSC, if less
than all of an investment is exchanged out of the Fund,
the shares exchanged will reflect, pro rata, the cost,
capital appreciation and/or reinvestment of
distributions of the original investment as well as the
original purchase date, for purposes of calculating any
CDSC for future redemptions of the exchanged shares.

Investors who held Ivy Fund shares as of December
31, 1991, or who held shares of certain funds that were
reorganized into an Ivy or Mackenzie fund, may be
exempt from sales charges on the exchange of shares
between any of the Ivy or Mackenzie funds. If you
believe you may be eligible for such an exemption, please
contact IMSC at 1-800-235-3322 for additional information.

In calculating the sales charge assessed on an
exchange, shareholders will be allowed to use the
Rights of Accumulation privilege.

EXCHANGES BY TELEPHONE: If Section 6D of the
Account Application is not completed, telephone
exchange privileges will be provided automatically.
Although telephone exchanges may be a convenient
feature, you should realize that you may be giving up a
measure of security that you may otherwise have if you
terminated the privilege and exchanged your shares in writing. If
you do not wish to make telephone exchanges or let your
registered representative do so on your behalf, you must
notify IMSC in writing.

In order to execute an exchange, please contact
IMSC at 1- 800-777-6472. Have the account number of your
current fund and the exact name in which it is
registered available to give to the telephone
representative.

The Fund employs reasonable procedures that
require personal identification prior to acting on
exchange instructions communicated by telephone to
confirm that such instructions are genuine. In the
absence of such procedures, the Fund may be liable for
any losses due to unauthorized or fraudulent telephone
instructions.

EXCHANGES IN WRITING: In a letter, request an
exchange and provide the following information:

- The name and class of the fund whose shares you
currently own.

- Your account number.

- The name(s) in which the account is registered.

- The name of the fund in which you wish your
exchange to be invested.

- The number of shares or the dollar amount you wish
to exchange.

The request must be signed by all registered
owners.

REINVESTMENT PRIVILEGE

Investors who have redeemed Class A shares of the
Fund have a one-time privilege of reinvesting all or a
part of the proceeds of the redemption back into Class
A shares of the Fund at NAV (without a sales charge)
within 60 days after the date of redemption. IN ORDER
TO REINVEST WITHOUT A SALES CHARGE, SHAREHOLDERS OR
THEIR BROKERS MUST INFORM IMSC THAT THEY ARE EXERCISING
THE REINVESTMENT PRIVILEGE AT THE TIME OF REINVESTMENT.
The tax status of a gain realized on a redemption
generally will not be affected by the exercise of the
reinvestment privilege, but a loss realized on a redemption
generally may be disallowed by the IRS if the reinvestment
privilege is exercised within 30 days after the redemption.
In addition, upon a reinvestment, the shareholder may
not be permitted to take into account sales charges
incurred on the original purchase of shares in
computing their taxable gain or loss.

SYSTEMATIC WITHDRAWAL PLAN

You may elect the Systematic Withdrawal Plan at
any time by completing the Account Application, which
is attached to this Prospectus. You can also obtain
this application by contacting your registered
representative or IMSC at 1-800-777-6472. To be
eligible, you must have at least $5,000 in your account. Payments
(minimum distribution amount -- $50) from your account
can be made monthly, quarterly, semi-annually, annually
or on a selected monthly basis, to yourself or any
other designated payee. You may elect to have your
systematic withdrawal paid directly to your bank
account via EFT, at no charge. Share certificates must be
unissued (i.e., held by the Fund) while the plan is in effect. A
Systematic Withdrawal Plan may not be established if you
are currently participating in the Automatic Investment
Method. For more information, please contact IMSC at
1-800-777-6472.

purchase additional Class A, Class B or Class C shares
when you have a Systematic Withdrawal Plan, because you
may be subject to an initial sales charge on your
purchase of Class A shares or to a CDSC imposed on your
redemptions of Class B or Class C shares. In addition,
redemptions are taxable events.

Amounts paid to you through the Systematic
Withdrawal Plan are derived from the redemption of
shares in your account. Any applicable CDSC will be
assessed upon the redemptions. A CDSC will not be
assessed on withdrawals not exceeding 12% annually of
the initial account balance when the Systematic Withdrawal Plan
was started.

Should you wish at any time to add a Systematic
Withdrawal Plan to an existing account or change payee
instructions, you will need to submit a written
request, signed by all registered owners, with
signatures guaranteed.

Retirement accounts are eligible for Systematic
Withdrawal Plans. Please contact IMSC at 1-800-777-6472
to obtain the necessary paperwork to establish a plan.

If the U.S. Postal Service cannot deliver your
checks, or if deposits to a bank account are returned
for any reason, your redemptions will be discontinued.

AUTOMATIC INVESTMENT METHOD

You may authorize an investment to be
automatically drawn each month from your bank for
investment in Fund shares by completing Sections 6A and
7B of the Account Application. Attach a "voided" check
or deposit slip to your account application. At pre-
specified intervals, your bank account will be debited and
the proceeds will be credited to your Ivy fund account. The
minimum investment under this plan is $50 per month ($25 per
month for retirement plans). There is no charge to you
for this program.

You may terminate or suspend your Automatic
Investment Method by telephone at any time by
contacting IMSC at 1-800-777- 6472.

If you have investments being withdrawn from a
bank account and we are notified that the account has
been closed, your Automatic Investment Method will be
discontinued.

CONSOLIDATED ACCOUNT STATEMENTS

Shareholders with two or more Ivy or Mackenzie
fund accounts having the same taxpayer I.D. number will
receive a single quarterly account statement, unless
otherwise specified. This feature consolidates the
activity for each account onto one statement. Requests
for quarterly consolidated statements for all other
accounts must be submitted in writing and must be signed by

all registered owners.

RETIREMENT PLANS

The Ivy and Mackenzie family of funds offer
several tax- sheltered retirement plans that may fit
your needs:

- IRA (Individual Retirement Account)

- 401(k), Money Purchase Pension and Profit
Sharing Plans

- SEP-IRA (Simplified Employee Pension Plan)

- 403(b)(7) Plans

- SIMPLE Plans (Individual Retirement Account and
401(k))

Minimum initial and subsequent investments for
retirement plans are $25.

Investors Bank & Trust, which serves as custodian
or trustee under the retirement plan prototypes
available from the Fund, charges certain nominal fees
for annual maintenance. A portion of these fees is
remitted to IMSC, as compensation for its services to
the retirement plan accounts maintained with the Fund.

Distributions from retirement plans are subject to
certain requirements under the Code. Certain
documentation, including IRS Form W4-P, must be
provided to IMSC prior to taking any distribution.
Please contact IMSC for details. The Ivy and Mackenzie
family of funds and IMSC assume no responsibility to
determine whether a distribution satisfies the conditions of
applicable tax laws, and will not be responsible for any
penalties assessed. For additional information, please
contact your broker or tax adviser.

Please call IMSC at 1-800-777-6472 for complete
information kits describing the plans, their benefits,
restrictions, provisions and fees.

SHAREHOLDER INQUIRIES

Inquiries regarding the Fund should be directed to
IMSC at 1-800-777-6472.

IVY INTERNATIONAL BOND FUND
ACCOUNT APPLICATION
USE THIS APPLICATION FOR CLASS A, CLASS B AND
CLASS C

Please mail applications and checks to: Ivy Mackenzie
Services Corp., P.O. Box 3022, Boca Raton, FL
33431-0922.
(This application should not be used for retirement
accounts for which Ivy Fund is custodian.)

Account Number:

(Fund Use Only)

Dealer #:
Branch #:
Rep. I.D. #:
Acct. Type:
Soc Cd:
Div Cd:
CG Cd:
Exc Cd:
Red Cd:

1 REGISTRATION

/ / Individual
/ / Joint Tenant
/ / Estate
/ / UGMA/UTMA
/ / Corporation
/ / Partnership
/ / Sole Proprietor
/ / Trust
/ / Other

Date of Trust
Owner, Custodian or Trustee
Co-owner or Minor
Minor's State of Residence
Street
City
State
Zip Code
Phone Number -- Day
Phone Number -- Evening

2 TAX ID

Citizenship: / / U.S. / / Other ________________

Social Security Number
Tax Identification Number

Under penalties of perjury, I certify by signing
in Section 8 below that: (1) the number shown in
this section is my correct taxpayer identification
number (TIN), and (2) I am not subject to backup
withholding because: (a) I have not been notified
by the Internal Revenue Service (IRS) that I am
subject to backup withholding as a result of a failure to
report all interest or dividends, or (b) the IRS has
notified me that I am no longer subject to backup
withholding. (Cross out item (2) if you have been notified
by the IRS that you are currently subject to backup
withholding because of underreporting interest or
dividends on your tax return.) Please see the "Tax
Identification Number" section of the Prospectus
for additional information on completing this
section.

3 DEALER INFORMATION

The undersigned ("Dealer") agrees to all
applicable provisions in this Application,
guarantees the signature and legal capacity of the
Shareholder, and agrees to notify IMSC of any
purchases made under a Letter of Intent or Rights of
Accumulation.

Dealer Name
Branch Office Address
City
State
Zip Code
Representative's Name and Number
Representative's Phone Number
Authorized Signature of Dealer

4 INVESTMENTS

A. Enclosed is my check ($1,000 minimum) made
payable to Ivy International Bond Fund.
Please invest it in Class A __ or Class B __
or Class C shares.*

$_______________________(Amount Enclosed)

B. I qualify for an elimination of the sales
charge due to the following privilege
(applies only to Class A shares):

__ New Letter of Intent (if ROA or 90-day
backdate privilege is applicable,
provide account(s) information below.)
__ ROA with the account(s) listed below.
__ Existing Letter of Intent with account(s)
listed below.

Fund Name(s)
Account Number(s)

If establishing a Letter of Intent, you will
need to purchase Class A shares over a
thirteen-month period in accordance with the
provisions in the Prospectus. The Aggregate
amount of these purchases will be at least
equal to the amount indicated below (see Prospectus for
minimum amount required for reduced sales charges).
/ / $ 50,000
/ / $100,000
/ / $250,000
/ / $500,000

C. FOR DEALER USE
Confirmed trade orders: [Confirm Number,
Number of Shares, Trade Date]

5 DISTRIBUTION OPTIONS

I would like to reinvest dividends and capital
gains into additional shares in this account at
net asset value unless a different option is
checked below.

A. / / Reinvest all dividends and capital gains
into additional shares of a different
Ivy or Mackenzie fund.

Fund Name
Account Number

B. / / Pay all dividends in cash and reinvest
capital gains into additional shares in
this Fund or a different Ivy or
Mackenzie fund.

Fund Name
Account Number

C. / / Pay all dividends and capital gains in
cash.

I REQUEST THE ABOVE CASH DISTRIBUTION, SELECTED IN
C OR D ABOVE, BE:

/ / Sent to the address listed in the
registration. / / Sent to the special payee
listed in Section 7A / / (By Mail)
7B / / (By E.F.T.)

6 OPTIONAL SPECIAL FEATURES

A. / / Automatic Investment Method (AIM)

- I wish to invest _________________
/ / once per month
/ / twice
/ / 3 times
/ / 4 times

- My bank account will be debited on the
_________ day of the month

Please invest $___________________ each period
starting in the month of __________________ in Ivy
International Bond Fund.
/ / Class A
/ / Class B
/ / Class C

/ / I have attached a voided check to ensure my
correct bank account will be debited.

B. Systematic Withdrawal Plans**

I wish to automatically withdraw funds from my
account in Ivy International Bond Fund

/ / Monthly / / Quarterly / /Semiannually / /
Annually

/ / Once / / Twice / / 3 times / / 4 times
per month

I request the distribution be:

/ / Sent to the address listed in the
registration. / / Sent to the special payee
listed in Section 7. / / Invested into additional
shares of the same class of a different Ivy
Mackenzie fund.

Fund Name
Account Number

Amount $__________________(Minimum $50) starting
on or about the

- _______ day of the month
- _______ day of the month
- _______ day of the month*

NOTE: Account minimum: $5,000 in shares at current
offering price

C. Electronic Funds Transfer for Redemption
Proceeds**

I authorize the Agent to honor telephone
instructions for the redemption of Fund
shares up to $50,000. Proceeds may be wire
transferred to the bank account designated
($1,000 minimum). (Complete Section 7B)

D. Telephone Exchanges** / / Yes /
/ No

I authorize exchanges by telephone among the
Ivy and Mackenzie family of funds upon
instructions from any person as more fully
described in the Prospectus. To

change this option once established, written
instructions must be received from the
shareholder of record or the current
registered representative.

If neither box is checked, the telephone
exchange privilege will be provided
automatically.

E. Telephonic Redemptions** / / Yes /
/ No

The Fund or its agents are authorized to
honor telephone instructions from any person
as more fully described in the Prospectus for
the redemption of Fund shares. The amount of
the redemption shall not exceed $50,000 and
the proceeds are to be payable to the
shareholder of record and mailed to the address of
record. To change this option once established, written
instructions must be received from the shareholder
of record or the current registered
representative.

If neither box is checked, the telephone
redemption privilege will be provided
automatically.

* There must be a period of at least seven
calendar days between each
investment/withdrawal period.

** This option may not be used if shares are
issued in certificate form.

7 SPECIAL PAYEE

A. MAILING ADDRESS

Please send all disbursements to this special
payee:

Name of Bank or Individual
Account Number (If Applicable)
Street
City/State/Zip

B. FED WIRE / E.F.T. INFORMATION

Financial Institution
ABA #
Account #
Street
City/State/Zip
(Please attach a voided check)

8 SIGNATURES

Investors should be aware that the failure to
check the "No" under Section 6D or 6E above means
that the Telephone Exchange/Redemption Privileges
will be provided. The Funds employ reasonable
procedures that require personal

identification prior to acting on
exchange/redemption instructions communicated by
telephone to confirm that such instructions are
genuine. In the absence of such procedures, a Fund
may be liable for any losses due to unauthorized or
fraudulent telephone instructions. Please see "Exchange
Privilege" and "How to Redeem Shares" in the Prospectus for
more information on these privileges.

I certify to my legal capacity to purchase or
redeem shares of the Fund for my own account or
for the account of the organization named in
Section 1. I have received a current Prospectus
and understand its terms are incorporated in this
application by reference. I am certifying my taxpayer
information as stated in Section 2.

THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR
CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER
THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP
WITHHOLDING.

______________________________
________________________ Signature of Owner,
Custodian, Date
Trustee or Corporate Officer

______________________________
________________________ Signature of Joint Owner,
Date
Co-Trustee or Corporate Officer

IIIF2-1-197

<PAGE> 1

April 30, 1997

Ivy Money
Market
Fund

- ---------------------
Prospectus
- ---------------------

Ivy Management, Inc.
Via Mizner Financial
Plaza
700 South Federal Hwy.
Boca Raton, FL 33432
1-800-456-5111

THROUGHOUT THE
CENTURIES,
THE CASTLE KEEP HAS
BEEN A SOURCE
OF LONG-RANGE VISION
AND STRATEGIC
ADVANTAGE.

Ivy Fund (the "Trust") is a registered investment company currently consisting
of sixteen separate portfolios. One portfolio of the Trust, Ivy Money Market
Fund (the "Fund"), is described in this Prospectus.

This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing. Please read it carefully and
retain it for future reference. Additional information about the Fund is
contained in the Statement of Additional Information for the Fund dated April
30, 1997 (the "SAI"), which has been filed with the Securities and Exchange
Commission ("SEC") and is incorporated by reference into this Prospectus. The
SAI is available upon request and without charge from the Trust at the
Distributor's address and telephone number below. The SEC maintains a web site
(http://www.sec.gov) that contains the SAI and other material incorporated by
reference.

AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THERE IS NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE.

TABLE OF CONTENTS

<TABLE>
<S> <C>
Expense Information . . . . . . . . . . . . . . 2
The Fund's Financial Highlights . . . . . . . . 3
Investment Objective and Policies . . . . . . . 3
Risk Factors and Investment Techniques . . . . 4
Organization and Management of the Fund . . . . 4
Investment Manager . . . . . . . . . . . . . . 5
Fund Administration and Accounting . . . . . . 5
Transfer Agent . . . . . . . . . . . . . . . . 5
Dividends and Taxes . . . . . . . . . . . . . . 5
Performance Data . . . . . . . . . . . . . . . 6
How to Buy Shares . . . . . . . . . . . . . . . 6
How Your Purchase Price is Determined . . . . . 6
How the Fund Values its Shares . . . . . . . . 7
How to Redeem Shares . . . . . . . . . . . . . 7
Minimum Account Balance Requirements . . . . . 8
Signature Guarantees . . . . . . . . . . . . . 8
Choosing a Distribution Option . . . . . . . . 8
Tax Identification Number . . . . . . . . . . . 8
Certificates . . . . . . . . . . . . . . . . . 9
Exchange Privilege . . . . . . . . . . . . . . 9
Systematic Withdrawal Plan . . . . . . . . . 10
Automatic Investment Method . . . . . . . . . 10
Consolidated Account Statements . . . . . . . 10
Retirement Plans . . . . . . . . . . . . . . 10
Shareholder Inquiries . . . . . . . . . . . . 10
</TABLE>

EXPENSE INFORMATION

The table and example below are designed to assist you in understanding the
various costs and expenses that you will bear directly or indirectly as an
investor in the Fund.

SHAREHOLDER TRANSACTION EXPENSES

<TABLE>
<CAPTION>
CLASS A,
CLASS B
AND
CLASS C
SHARES
--------
<S> <C>
Maximum sales load imposed on purchases (as a percentage of
offering price)*........................................... None
The Fund has no sales load on reinvested dividends, no
deferred sales load, no redemption fees and no exchange
fees.**
</TABLE>

* Exchanges from the Fund into any other Ivy or Mackenzie fund into which
exchanges are permitted may be subject to a sales charge unless previously
paid (see "Exchange Privilege").

** The Fund does not assess a contingent deferred sales charge ("CDSC").
However, if the shares of another Ivy or Mackenzie fund that are subject to a
CDSC are exchanged for shares of the Fund, the CDSC may carry over to the
investment in the Fund and may be assessed upon redemption (see "How to
Redeem Shares" and "Exchange Privilege").

ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------- ------- -------
<S> <C> <C> <C>
Management Fees (After Expense Reimbursements)*........ 0.00% 0.00% 0.00%
12b-1 Service/Distribution Fees........................ N/A N/A N/A
Other Expenses......................................... 0.86% 0.77% 0.56%
---- ---- ----
Total Fund Operating Expenses (After Expense
Reimbursements)**..................................... 0.86% 0.77% 0.56%
==== ==== ====
</TABLE>

* Management Fees reflect expense reimbursements. Without expense
reimbursements, Management Fees would have been 0.40%.

** Ivy Management, Inc. ("IMI"), as investment adviser, currently limits the
Fund's Total Fund Operating Expenses After Expense Reimbursements (excluding
taxes, interest, litigation and indemnification expenses and other
extraordinary expenses) to an annual rate of 0.85% of the Fund's average net
assets. Without the expense reimbursements, Total Fund Operating Expenses for
the year ended December 31, 1996 would have increased 1.00% for each class of
the Fund.

EXAMPLES*

The following table lists the expenses an investor would pay on a $1,000
investment in the Fund, assuming (1) 5% annual return and (2) redemption at the
end of each time period. The Example further assumes reinvestment of all
dividends and distributions, and that the percentage amounts under "Total Fund
Operating Expenses (After Expense Reimbursements)" (above) remain the same each
year. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE HIGHER OR LOWER THAN THOSE SHOWN.

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A...................... $9 $27 $48 $106
Class B...................... $8 $25 $43 $ 98
Class C...................... $6 $18 $31 $ 70
</TABLE>

* Net of expense reimbursements. See Annual Fund Operating Expenses, above.

The information in the table above does not reflect the charge of $10 per
transaction that would apply if a shareholder elects to have redemption proceeds
wired to his/her bank account. For a more detailed discussion of the Fund's fees
and expenses, see "Organization and Management of the Fund" in this Prospectus,
and "Investment Advisory and Other Services" in the SAI.

2
<PAGE> 3

THE FUND'S FINANCIAL HIGHLIGHTS

Unless otherwise noted, the following table is for fiscal periods ending
December 31 of each year. The accounting firm of Coopers & Lybrand L.L.P. has
audited the Fund since December 31, 1992. Their report is included in the Fund's
Annual Report, which is incorporated by reference into the SAI. The information
for fiscal periods prior to December 31, 1992 was audited by other independent
accountants. The Fund's Annual Report contains additional information about the
Fund's performance. For a copy of the Fund's Annual Report, call 1-800-777-6472.

Expense and income ratios have been annualized for periods of less than one
year. Total returns do not reflect sales charges, and are not annualized for
periods of less than one year.
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
SELECTED PER SHARE DATA ---- ---- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- ------- -------
Income from investment operations
Net investment income(a)....................... .04 .05 .04 .02 .03 .05 .07
Less distributions
From net investment income..................... (.04) (.05) (.04) (.02) (.03) (.05) (.07)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= ======= =======
Total return(%)................................. 4.47 4.80 4.21 2.42 2.81 5.16 7.69
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in thousands)........ $21,359 $24,609 $26,827 $25,782 $18,839 $21,675 $26,140
Ratio of expenses to average net assets
With expense reimbursement(%).................. .86 .85 .85 .85 .85 .85 .67
Without expense reimbursement(%)............... 1.86 1.39 1.24 1.56 1.45 1.21 1.22
Ratio of net investment income to average net
assets(%)(a)................................... 4.47 4.91 3.29 2.22 2.75 5.06 7.43

<CAPTION>
CLASS A
-----------------------------
1989 1988 1987(B)
SELECTED PER SHARE DATA ------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning of period............ $ 1.00 $ 1.00 $ 1.00
------- ------- ------
Income from investment operations
Net investment income(a)....................... .09 .07 .01
Less distributions
From net investment income..................... (.09) (.07) (.01)
------- ------- ------
Net asset value, end of period.................. $ 1.00 $ 1.00 $ 1.00
======= ======= ======
Total return(%)................................. 8.87 6.89 1.86
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in thousands)........ $19,708 $11,789 $6,784
Ratio of expenses to average net assets
With expense reimbursement(%).................. .65 .68 .85
Without expense reimbursement(%)............... 1.37 1.73 1.94
Ratio of net investment income to average net
assets(%)(a)................................... 8.42 6.86 6.77
</TABLE>

<TABLE>
<CAPTION>
CLASS B CLASS C
------- -------
1996 1996(C)
SELECTED PER SHARE DATA ------- -------
<S> <C> <C>
Net asset value, beginning of period........................ $ 1.00 $ 1.00
------- -------
Income from investment operations
Net investment income(a)................................. .05 .03
Less distributions
From net investment income............................... (.05) (.03)
------- -------
Net asset value, end of period.............................. $ 1.00 $ 1.00
======= =======
Total return (%)............................................ 4.57 4.78
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in thousands).................... $3,474 $ 74
Ratio of expenses to average net assets
With expense reimbursement(%)............................ .77 .56
Without expense reimbursement(%)......................... 1.77 1.56
Ratio of net investment income to average net
assets(%)(a)............................................... 4.57 4.78
</TABLE>

- ---------------

(a) Net investment income is net of expenses reimbursed by IMI.
(b) From October 15, 1987 (commencement of operations) to December 31, 1987.
(c) From April 30, 1996 (commencement of operations) to December 31, 1996.

INVESTMENT OBJECTIVE AND POLICIES

The Fund seeks to obtain as high a level of current income as is consistent
with the preservation of capital and liquidity by investing in high-quality,
short-term securities. The Fund's investment objective is fundamental and may
not be changed without the approval of a majority of the Fund's outstanding
voting shares, although the Trustees may make non-material changes in the Fund's
objectives without shareholder approval. Except for the Fund's investment
objective and those investment restrictions specifically identified as
fundamental, all investment policies and practices described in this Prospectus
and in the SAI are not fundamental and therefore may be changed by the Trustees
without shareholder approval. There can be no assurance that the Fund will
achieve its investment objectives. The different types of securities and
investment techniques used by the Fund involve varying degrees of risk. For
information about the particular risks associated with each type of investment,
see "Investment Techniques and Risk Factors," below, and the SAI.

Whenever an investment objective, policy or restriction described in this
Prospectus or in the SAI states a maximum percentage of assets that may be
invested in a security or other asset, or describes a policy regarding quality
standards, that percentage limitation or standard will, unless otherwise
indicated, apply to the Fund only at the time a transaction takes place. Thus,
if a percentage limitation is adhered to at the time of investment, a later
increase or decrease in the percentage that results from circumstances not
involving any affirmative action by the Fund will not be considered a violation.

The Fund invests in money market instruments maturing within thirteen months
or less and maintains a portfolio with a dollar-weighted average maturity of 90
days or less. By purchasing such short-term securities, the Fund will attempt to
maintain a constant net asset value of $1.00 per share. The Fund's portfolio of
investments is actively monitored on a daily basis to maintain competitive
yields on investments.

The Fund will invest in the following categories of money market
instruments: (i) debt securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities; (ii) obligations (including certificates of
deposit and bankers' acceptances) of domestic banks and savings and loan
associations; (iii) high-quality commercial paper that at the time of purchase
is rated at least A-2 by Moody's Investors Service, Inc. ("Moody's") or P-2 by
Standard and Poor's Corporation ("S&P") or, if unrated, is issued or guaranteed
by a corporation with outstanding debt rated AA or higher by S&P or Aa or higher
by Moody's or which is judged by IMI to be of at least equivalent quality; (iv)
short-term corporate notes, bonds and debentures that at the time of purchase
are rated at least Aa by Moody's or AA by S&P or that are judged by IMI to be of
at least equivalent quality; and (v) repurchase agreements with domestic banks
for periods not exceeding seven days and only with respect to

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U.S. Government securities that throughout the period have a value at least
equal to the amount of the loan (including accrued interest).

The securities in which the Fund invests must present minimal credit risk
and be rated in one of the two highest rating categories for short-term debt
obligations by at least two major rating agencies assigning a rating to the
securities or issuer, or if only one rating agency has assigned a rating, by
that agency or determined to be of equivalent value by IMI. Purchases of
securities that are rated by only one rating agency must be previously approved
or ratified subsequently by the Trustees. Securities that are rated in the
highest category by at least two major rating agencies (or that have been issued
by an issuer that is rated with respect to a class of short-term debt
obligations, or any security within that class, comparable in priority and
quality with such securities) are designated "First Tier Securities." Securities
rated in the top two categories by at least two major rating agencies, but which
are not rated in the highest category by two or more major rating agencies, are
designated "Second Tier Securities." IMI shall determine whether a security
presents minimal credit risk under procedures adopted by the Board of Trustees.

The Fund may not invest more than 5% of its total assets in the securities
of any one issuer, except this limitation shall not apply to U.S. Government
securities. Further, the Fund will not invest more than the greater of 1% of its
total assets or one million dollars in the securities of a single issuer that
were Second Tier Securities when acquired by the Fund. In addition, the Fund may
not invest more than 5% of its total assets in securities that are Second Tier
Securities when acquired by the Fund. As a fundamental policy, the Fund may not
borrow money, except for temporary purposes, and then only in an amount not
exceeding 10% of the value of the Fund's total assets.

RISK FACTORS AND INVESTMENT TECHNIQUES

DEBT SECURITIES, IN GENERAL: Investment in debt securities involves both
interest rate and credit risk. Generally, the value of debt instruments rises
and falls inversely with fluctuations in interest rates. As interest rates
decline, the value of debt securities generally increases. Conversely, rising
interest rates tend to cause the value of debt securities to decrease. Bonds
with longer maturities generally are more volatile than bonds with shorter
maturities. The market value of debt securities also varies according to the
relative financial condition of the issuer. In general, lower-quality bonds
offer higher yields due to the increased risk that the issuer will be unable to
meet its obligations on interest or principal payments at the time called for by
the debt instrument.

INVESTMENT-GRADE DEBT SECURITIES: Bonds rated Aaa by Moody's and AAA by S&P
are judged to be of the best quality (i.e., capacity to pay interest and repay
principal is extremely strong). Bonds rated Aa/AA are considered to be of high
quality (i.e., capacity to pay interest and repay principal is very strong and
differs from the highest rated issues only to a small degree). Bonds rated A are
viewed as having many favorable investment attributes, but elements may be
present that suggest a susceptibility to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
Bonds rated Baa/BBB (considered by Moody's to be "medium grade" obligations) are
considered to have an adequate capacity to pay interest and repay principal, but
certain protective elements may be lacking (i.e., such bonds lack outstanding
investment characteristics and have some speculative characteristics).

Mortgage-backed securities are securities representing part ownership of a
pool of mortgage loans. Although the mortgage loans in the pool will have
maturities of up to 30 years, the actual average life of the loans typically
will be substantially less because the mortgages will be subject to principal
amortization and may be prepaid prior to maturity. In periods of falling
interest rates, the rate of prepayment tends to increase, thereby shortening the
actual average life of the security. Conversely, rising interest rates tend to
decrease the rate of prepayment, thereby lengthening the security's actual
average life (and increasing the security's price volatility). Since it is not
possible to predict accurately the average life of a particular pool, and
because prepayments are reinvested at current rates, the market value of
mortgage-backed securities may decline during periods of declining interest
rates.

BANK OBLIGATIONS: The bank obligations in which the Fund may invest include
certificates of deposit, bankers' acceptances, and other short-term debt
obligations. Investments in certificates of deposit and bankers' acceptances are
limited to obligations of (i) banks having total assets in excess of $1 billion,
and (ii) other banks if the principal amount of such obligation is fully insured
by the Federal Deposit Insurance Corporation ("FDIC"). Investments in
certificates of deposit of savings associations are limited to obligations of
Federal or state-chartered institutions whose total assets exceed of $1 billion
and whose deposits are insured by the FDIC.

COMMERCIAL PAPER: Commercial paper represents short-term unsecured
promissory notes issued in bearer form by bank holding companies, corporations
and finance companies. Investments in commercial paper are limited to
obligations rated Prime 1 by Moody's or A-1 by S&P or, if not rated by Moody's
or S&P, issued by companies having an outstanding debt issue currently rated Aaa
or Aa by Moody's or AAA or AA by S&P.

REPURCHASE AGREEMENTS: Repurchase agreements are agreements under which the
Fund buys a money market instrument and obtains a simultaneous commitment from
the seller to repurchase the instrument at a specified time and at an
agreed-upon yield. The Fund will not enter into a repurchase agreement with more
than seven days to maturity if, as a result, more than 10% of the Fund's net
assets would be invested in illiquid securities including such repurchase
agreements. The Fund may enter into repurchase agreements with banks or
broker-dealers deemed to be creditworthy by IMI under guidelines approved by the
Board of Trustees. The Fund could experience a delay in obtaining direct
ownership of the underlying collateral and might incur a loss if the value of
the security should decline.

BORROWING: Borrowing may exaggerate the effect on the Fund's net asset
value of any increase or decrease in the value of the Fund's portfolio
securities. Money borrowed will be subject to interest costs (which may include
commitment fees and/or the cost of maintaining minimum average balances).

ORGANIZATION AND MANAGEMENT OF THE FUND

The Fund is organized as a separate, diversified portfolio of the Trust, an
open-end management investment company organized as a Massachusetts business
trust on December 21, 1983. The business and affairs of the Fund are managed
under the direction of the Trustees. Information about the Trustees, as well as
the Trust's executive officers, may be found in the SAI. The Trust has

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<PAGE> 5

an unlimited number of authorized shares of beneficial interest, and currently
has 16 separate portfolios. The Fund has three classes of shares, designated as
Class A, Class B and Class C. The purpose of these designations is primarily to
enable the transfer agent for the Ivy and Mackenzie funds to track the
contingent deferred sales charge period that applies to Class B and Class C
shares of other Ivy and Mackenzie funds that are being exchanged for shares of
the Fund. In all other relevant respects, the Fund's Class A, Class B and Class
C shares are identical (i.e., having the same arrangement for shareholder
services and the distribution of securities). Shares of each class are entitled
to one vote per share (with proportionate voting for fractional shares), and
have equal rights as to voting, redemption, dividends and liquidation.

The Trust employs IMI to provide business management and investment advisory
services; Mackenzie Investment Management Inc. ("MIMI") to provide
administrative and accounting services; Ivy Mackenzie Distributors, Inc.
("IMDI") to distribute the Fund's shares; and Ivy Mackenzie Services Corp.
("IMSC") to provide transfer agent and shareholder-related services for the
Fund. IMI, IMDI and IMSC are wholly-owned subsidiaries of MIMI. As of March 31,
1997, IMI and MIMI had approximately $2.70 billion and $145 million,
respectively, in assets under management. MIMI is a subsidiary of Mackenzie
Financial Corporation ("MFC"), which has been an investment counsel and mutual
fund manager in Toronto, Ontario, Canada for more than 25 years.

INVESTMENT MANAGER

For IMI's business management and investment advisory services, the Fund
pays IMI a fee that is accrued daily and paid monthly, based on the Fund's daily
net assets. The fee is equal, on an annual basis, to 0.40% of the Fund's average
net assets.

IMI pays all expenses it incurs in rendering management services to the
Fund. The Fund bears its cost of operations. General expenses of the Trust that
are not readily identifiable as belonging to a particular series of the Trust
(or a particular class thereof) are allocated among and charged to each series
based on its relative net asset size. Expenses that are attributable to a
particular Fund (or class thereof) will be borne solely by that Fund (or class)
directly.

IMI currently limits the Fund's total operating expenses (excluding
interest, taxes, litigation and indemnification expenses, and other
extraordinary expenses) to an annual rate of 0.85% of the Fund's average net
assets. As long as the Fund's expense limitation continues, it may lower the
Fund's expenses and increase its yield. The Fund's expense limitation may be
terminated or revised at any time, at which time the Fund's expenses may
increase and its yield may be reduced.

PORTFOLIO MANAGEMENT: The Fund is managed by a team, with each team member
having specific responsibilities. The following individuals have
responsibilities related to the management of the Fund: Leslie A. Ferris, a
Senior Vice President of IMI and Managing Director -- Fixed Income, has been a
portfolio manager for the Fund since 1995. Ms. Ferris joined the Ivy Mackenzie
fund complex (the "Fund Complex") in 1988 and has 15 years of professional
investment experience. She is a Chartered Financial Analyst and holds an MBA
degree from The University of Chicago. Prior to joining the Fund Complex, Ms.
Ferris was a portfolio manager at Kemper Financial Services Inc. from 1982 to
1988. Michael Borowsky serves as a Portfolio Analyst for the Fund.

FUND ADMINISTRATION AND ACCOUNTING

MIMI provides various administrative services for the Fund, such as
maintaining the registration of Fund shares under state "Blue Sky" laws and
assisting with the preparation of Federal and state income tax returns,
financial statements and periodic reports to shareholders. MIMI also assists the
Trust's legal counsel with the filing of registration statements, proxies and
other required filings under Federal and state law. Under this arrangement, the
Fund's net assets are subject to a fee, accrued daily and paid monthly, at the
annual rate of 0.10%.

MIMI also provides certain accounting and pricing services for the Fund (see
"Fund Accounting Services" in the SAI for more information).

TRANSFER AGENT

IMSC is the transfer and dividend-paying agent for the Fund, and also
provides certain shareholder-related services. Certain broker-dealers that
maintain shareholder accounts with the Fund through an omnibus account provide
transfer agent and other shareholder-related services that would otherwise be
provided by IMSC if the individual accounts that comprise the omnibus account
were opened by their beneficial owners directly (see "Investment Advisory and
Other Services" in the SAI).

DIVIDENDS AND TAXES

Distributions you receive from the Fund are reinvested in additional Fund
shares of the same class unless you elect to receive them in cash. If you elect
the cash option and the U.S. Postal Service cannot deliver your checks, your
election will be converted to the reinvestment option.

TAXATION: The following discussion is intended for general information
only. You should consult with your tax advisor as to the tax consequences of an
investment in the Fund, including the status of distributions from the Fund
under applicable state or local law.

The Fund intends to qualify annually a regulated investment company under
the Internal Revenue Code of 1986, as amended (the "Code"). To qualify, the Fund
must meet certain income, distribution and diversification requirements. In any
year in which the Fund qualifies as a regulated investment company and timely
distributes all of its taxable income, the Fund generally will not pay any
Federal income or excise tax.

Dividends paid out of the Fund's investment company taxable income
(including dividends, interest and net short-term capital gain) will be taxable
to a shareholder as ordinary income. Because no portion of the Fund's income is
expected to consist of dividends paid by U.S. corporations, no portion of the
dividends paid by the Fund is expected to be eligible for the corporate
dividends-received deduction. Distributions of net capital gain (the excess of
net long-term capital gain over net short-term capital loss), if any, are
taxable as long-term capital gains, regardless of how long the shareholder has
held the Fund's shares. Dividends are taxable to shareholders in the same manner
whether received in cash or reinvested in additional Fund shares.

A distribution will be treated as paid on December 31 of the current
calendar year if it is declared by the Fund in October, November or December
with a record date in such a month and paid by the Fund during January of the
following calendar year. Such distributions will be taxable to shareholders in
the calendar year in which the distributions are declared, rather than the
calendar year in which the distributions are received.

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<PAGE> 6

Each year the Fund will notify shareholders of the tax status of dividends
and distributions.

Investments in securities that are issued at a discount will result in
income to the Fund each year equal to a portion of the excess of the face value
of the securities over their issue price, even though the Fund receives no cash
interest payments from the securities.

Shareholders generally are not expected to realize any gain or loss upon a
disposition of shares of the Fund, as long as the Fund maintains a constant net
asset value per share. In the unlikely event that the Fund were unable to do so,
any gain or loss realized by a shareholder upon the sale or other disposition of
shares of the Fund, or upon receipt of a distribution in complete liquidation of
the Fund, generally would be a capital gain or loss which would be long-term or
short-term, generally depending upon the shareholder's holding period for the
shares.

The Fund may be required to withhold U.S. Federal income tax at the rate of
31% of all taxable distributions payable to shareholders who fail to provide the
Fund with their correct taxpayer identification number or to make required
certifications, or who have been notified by the Internal Revenue Service
("IRS") that they are subject to backup withholding. Backup withholding is not
an additional tax. Any amounts withheld may be credited against the
shareholder's U.S. Federal income tax liability.

Fund distributions may be subject to state, local and foreign taxes. Fund
distributions that are derived from interest on obligations of the U.S.
Government and certain of its agencies, authorities and instrumentalities may be
exempt from state and local taxes in certain states. You should consult with
your tax advisor regarding the particular tax consequences of an investment in
the Fund. Further information relating to tax consequences is contained in the
SAI.

PERFORMANCE DATA

Comparative performance information may be used from time to time in
advertising or marketing the shares of the Fund, including data from Lipper
Analytical Services, Inc., Donoghue's Money Fund Report, The Bank Rate Monitor,
other industry publications, business periodicals, rating services and market
indices. ALL PERFORMANCE INFORMATION IS HISTORICAL AND IS NOT INTENDED TO
SUGGEST FUTURE RESULTS.

The yield of a Fund refers to the income generated by an investment in the
Fund over a seven-day period (which period will be stated in the advertisement).
This income is then annualized; that is, the amount of income generated by the
investment during that week is assumed to be generated each week over a 52 week
period and is shown as a percentage of the investment.

HOW TO BUY SHARES

OPENING AN ACCOUNT: Complete and sign the Account Application on the last
page of this Prospectus. Make your check payable to Ivy Money Market Fund. No
third party checks will be accepted. Deliver these items to your registered
representative or selling broker, or send them to one of the addresses below:

Regular Mail:

IVY MACKENZIE SERVICES CORP.
P.O. BOX 3022
BOCA RATON, FL 33431-0922

Courier:

IVY MACKENZIE SERVICES CORP.
700 SOUTH FEDERAL HIGHWAY, SUITE 300
BOCA RATON, FL 33432

The Fund reserves the right to reject, for any reason, any purchase order.

BUYING ADDITIONAL SHARES: You may add to your account at any time through
any of the following options:

By Mail: Complete the investment slip attached to your statement, or write
instructions, including the account registration, Fund number and account number
of the shares you wish to purchase. Send your check (payable to Ivy Money Market
Fund), along with your investment slip or written instructions, to one of the
addresses above.

Through your Broker: Deliver the investment slip attached to your
statement, or written instructions, along with your payment to your registered
representative or selling broker.

FIRST UNION NATIONAL BANK OF FLORIDA
JACKSONVILLE, FL
ABA#063000021
ACCOUNT #2090002063833
FOR FURTHER CREDIT TO:
YOUR IVY ACCOUNT REGISTRATION
YOUR FUND NUMBER AND ACCOUNT NUMBER

By Automatic Investment Method: Complete Sections 6A and 7B on the Account
Application (see "Automatic Investment Method" on page 10 for more information.

DIRECT PURCHASES OF CLASS B AND CLASS C SHARES: Class B and Class C shares
may be purchased directly through your election of a systematic withdrawal plan
under which specified withdrawal amounts are used to purchase Class B or Class C
shares of a different Ivy or Mackenzie fund. This arrangement is designed to
take advantage of dollar-cost averaging as a method of investment. To establish
this type of arrangement, complete section 6B of the Account Application.

HOW YOUR PURCHASE PRICE IS DETERMINED

Your purchase price is the net asset value per share ("NAV"). Share
purchases will be made at the next determined price after the purchase order is
received. The price is effective for orders received by IMSC or by your
registered securities dealer prior to the time of the determination of the net
asset value. Any orders received after the time of the determination of the net
asset value will be entered at the next calculated price.

Orders placed with a securities dealer before the net asset value is
determined and that are transmitted through the facilities of the National
Securities Clearing Corporation on the same day are confirmed at that day's
price. Any loss resulting from the dealer's failure to submit an order by the
deadline will be borne by that dealer.

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<PAGE> 7

You will receive an account statement after any purchase, exchange or full
liquidation. Statements related to reinvestment of dividends or capital gains,
automatic investment plans (see the SAI for further explanation) and/or
systematic withdrawal plans will be sent quarterly.

HOW THE FUND VALUES ITS SHARES

The Fund offers three classes of shares in this Prospectus, designated as
Class A, Class B and Class C shares. The NAV per share is the value of one Class
A, Class B, or Class C share. The NAV is determined for each Class of shares as
of the close of the New York Stock Exchange on each day the Exchange is open by
dividing the value of the Fund's net assets attributable to a class by the
number of shares of that class that are outstanding, adjusted to the nearest
cent.

For purposes of determining the aggregate net assets of the Fund, cash and
receivables will be valued at their realizable amounts. The Fund values all of
its portfolio securities using the amortized cost method, which involves valuing
a security at cost on the date of acquisition and thereafter assuming a constant
rate of accretion of discount or amortization of premium. While this method
provides certainty in valuation, it may result in periods during which value, as
determined by amortized cost, is higher or lower than the price the Fund would
receive if it sold the instrument. During such periods, the yield to an investor
in the Fund may differ somewhat from that obtained in a similar investment
company which uses available market quotations to value all of its portfolio
securities.

HOW TO REDEEM SHARES

You may redeem your Fund shares through your registered securities
representative, by mail, by telephone or by check writing. All redemptions are
made at the NAV next determined after a redemption request has been received in
good order. Requests for redemptions must be received by 4:00 p.m. Eastern time
to be processed at the NAV for that day. Any redemption request in good order
that is received after 4:00 p.m. Eastern time will be processed at the price
determined on the following business day. IF SHARES TO BE REDEEMED WERE
PURCHASED BY CHECK, PAYMENT OF THE REDEMPTION MAY BE DELAYED UNTIL THE CHECK HAS
CLEARED OR FOR UP TO 15 DAYS AFTER THE DATE OF PURCHASE, WHICHEVER IS LESS. The
Fund does not assess a CDSC. However, if the shares of another Ivy or Mackenzie
fund that are subject to a CDSC are exchanged for shares (of the same class) of
the Fund, the CDSC will carry over to the investment in the Fund and may be
assessed upon redemption.

When shares are redeemed, the Fund generally sends you payment on the next
business day. Unless otherwise requested, your redemption proceeds will be
mailed in the form of a check to your address of record. Under unusual
circumstances, the Fund may suspend redemptions or postpone payment to the
extent permitted by Federal securities laws. The proceeds of the redemption may
be more or less than the purchase price of your shares, depending upon, among
other factors, the market value of the Fund's securities at the time of the
redemption. If the redemption is for over $50,000, or the proceeds are to be
sent to an address other than the address of record, or an address change has
occurred in the last 30 days, it must be requested in writing with a signature
guarantee. See "Signature Guarantees" below.

If you are not certain of the requirements for a redemption, please contact
IMSC at 1-800-777-6472.

THROUGH YOUR REGISTERED SECURITIES DEALER: Your Dealer is responsible for
promptly transmitting redemption orders. Redemptions requested by dealers will
be made at the NAV (less any applicable CDSC) determined at the close of regular
trading (4:00 p.m. Eastern time) on the day that a redemption request is
received in good order by IMSC.

BY MAIL: Requests for redemption in writing are considered to be in "proper
or good order" if they contain the following:

- Any outstanding certificate(s) for shares being redeemed.

- A letter of instruction, including the account registration, the Fund
number, the account number, the address and the dollar amount or number of
shares to be redeemed.

- Signatures of all registered owners whose names appear on the account.

- Any required signature guarantees.

- Other supporting legal documentation, if required (in the case of estates,
trusts, guardianships, corporations, retirement plans or others acting in
representative capacities).

Mail your request to IMSC at one of the addresses on page 6 of this
Prospectus.

Requests for telephone redemptions will be accepted from the registered
owner of the account, the designated registered representative or the registered
representative's assistant.

Shares held in certificate form cannot be redeemed by telephone.

The Fund employs reasonable procedures that require personal identification
prior to acting on redemption instructions communicated by telephone to confirm
that such instructions are genuine. In the absence of such procedures, the Fund
may be liable for any losses due to unauthorized or fraudulent telephone
instructions.

RECEIVING YOUR PROCEEDS BY FEDERAL FUNDS WIRE: For shareholders who
established this feature at the time they opened their account, telephone
instructions will be accepted for redemption amounts up to $50,000 ($1,000
minimum) and proceeds will be wired on the next business day to a predesignated
bank account.

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Your account will be charged a $10 fee each time redemption proceeds are
wired to your bank. Your bank may also charge you a fee for receiving a Federal
Funds wire.

Neither IMSC nor the Fund can be responsible for the efficiency of the
Federal Funds wire system or the shareholder's bank.

BY CHECK WRITING: The check writing privilege is only available to Class A
shareholders and is not available for retirement accounts. You may write checks
against your Fund account. Checks written must be for a minimum of $100. You may
sign up for this option by completing Section 8 of the Account Application. IF
YOU ARE REDEEMING SHARES THAT HAVE BEEN PURCHASED BY CHECK, PAYMENT MAY BE
DELAYED UNTIL YOUR CHECK HAS CLEARED OR FOR UP TO 15 CALENDAR DAYS AFTER THE
DATE OF PURCHASE. Please note that all registered owners named on the account
must sign the signature card, and only registered owners may have the check
writing privilege on an account.

In order to qualify for the check writing privilege, Class A shareholders
must maintain a minimum average account balance of $1,000. Shares must be
uncertificated (i.e., held by the Fund) for any account requesting check writing
privileges. Checks can be reordered by calling IMSC at 1-800-777-6472. Checking
activity is reported on your statement, and canceled check copies are returned
to you each month. There is no limitation on the number of checks a shareholder
may write.

When a check is presented for payment, the Fund redeems a sufficient number
of shares to cover the amount of the check. Checks written on accounts with
insufficient shares will be returned to the payee marked "non-sufficient funds."
There may be a nominal charge for each supply of checks, copies of canceled
checks, stop payment orders, checks drawn for amounts less than the Fund minimum
(i.e., $100) and checks returned for "non-sufficient funds." To pay for these
charges, the Fund automatically redeems an appropriate number of the
shareholder's Fund shares after the charges are incurred.

You may not close your Fund account by writing a check, because any earned
dividends will remain in your account. The Fund reserves the right to change,
modify or terminate the check writing service at any time upon notification
mailed to your address of record.

Your account will be charged a $10 fee each time redemption proceeds are
wired to your bank.

Neither IMSC nor the Fund can be responsible for the efficiency of the
Federal Funds wire system or the shareholder's bank.

MINIMUM ACCOUNT BALANCE REQUIREMENTS

Due to the high cost of maintaining small accounts and subject to state law
requirements, the Fund may redeem the accounts of shareholders whose investment,
including sales charges paid, has been less than $1,000 for more than 12 months.
The Fund will not redeem an account unless the shareholder has been given at
least 60 days' advance notice of the Fund's intention to do so. No redemption
will be made if a shareholder's account falls below the minimum due to a
reduction in the value of the Fund's portfolio securities. This provision does
not apply to IRA's, other retirement accounts and UGMA/UTMA accounts.

SIGNATURE GUARANTEES

For your protection, and to prevent fraudulent redemptions, we require a
signature guarantee in order to accommodate the following requests:

- Redemption requests over $50,000.

- Requests for redemption proceeds to be sent to someone other than the
registered shareholder.

- Requests for redemption proceeds to be sent to an address other than the
address of record.

- Registration transfer requests.

- Requests for redemption proceeds to be wired to your bank account (if this
option was not selected on your original application, or if you are
changing the bank wire information).

Circumstances other than those described above may require a signature
guarantee. Please contact IMSC at 1-800-777-6472 for more information.

CHOOSING A DISTRIBUTION OPTION

You have the option of selecting the distribution option that best suits
your needs:

AUTOMATIC REINVESTMENT OPTION -- Both dividends and capital gains are
automatically reinvested at NAV in additional shares of the same class of the
Fund unless you specify one of the other options.

INVESTMENT IN ANOTHER IVY OR MACKENZIE FUND -- Both dividends and capital
gains are automatically invested at NAV in another Ivy or Mackenzie fund of the
same class.

DIVIDENDS IN CASH/CAPITAL GAINS REINVESTED -- Dividends will be paid in
cash. Capital gains will be reinvested at NAV in additional shares of the same
class of the Fund or another Ivy or Mackenzie fund of the same class.

DIVIDENDS AND CAPITAL GAINS IN CASH -- Both dividends and capital gains will
be paid in cash.

If you wish to have your cash distributions go to an address other than the
address of record, you must provide IMSC with a letter of instruction, signed by
all registered owners with signatures guaranteed.

TAX IDENTIFICATION NUMBER

In general, to avoid being subject to a 31% U.S. Federal backup withholding
tax on dividends, capital gain distributions and, in the event the Fund failed
to maintain a constant NAV per share, redemption proceeds, you must furnish the
Fund with your certified tax identification number ("TIN") and certify that

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<PAGE> 9

you are not subject to backup withholding due to prior under-reporting of
interest and dividends to the IRS. If you fail to provide a certified TIN, or
such other tax-related certifications as the Fund may require, within 30 days of
opening your new account, the Fund reserves the right to involuntarily redeem
your account and send the proceeds to the address of record.

Certain payees, such as corporations, generally are exempt from backup
withholding. Please complete IRS Form W-9 with the Account Application to claim
the exemption. If the registration is for a UGMA/UTMA account, please provide
the social security number of the minor. Non-U.S. investors who do not have a
TIN must provide, with the Account Application, a completed IRS Form W-8.

CERTIFICATES

Certificates for shares valued up to $50,000 will be issued to the current
registration and mailed to the address of record. Should you wish to have your
certificates mailed to a different address, or registered differently from the
current registration, contact IMSC at 1-800-777-6472.

EXCHANGE PRIVILEGE

Shareholders of the Fund have an exchange privilege with other Ivy and
Mackenzie funds (except Ivy International Fund unless they have an existing Ivy
International Fund account). The Fund reserves the right to reject, for any
reason, any exchange order.

Class A shareholders of the Fund may exchange their outstanding shares for
Class A shares of another Ivy or Mackenzie fund on the basis of the relative NAV
per Class A share, plus an amount equal to the sales charge payable with respect
to the new shares at the time of the exchange. Incremental sales charges are
waived for outstanding shares that have been invested for 12 months or longer.
Shareholders who have purchased Class B (or Class C) shares of the Fund directly
may exchange their Class B (or Class C) shares for Class B (or Class C) shares
of another Ivy or Mackenzie fund on the basis of the relative NAV per Class B
(or Class C) share (see "Direct Purchases of Class B and Class C Shares" under
"How to Buy Shares"), subject to the CDSC schedule (or period) of the fund into
which the exchange is being made (beginning with the date of the exchange).

Class B and Class C shareholders of another Ivy or Mackenzie fund may
exchange their shares for Class B and Class C shares of the Fund. Exchanges from
another Ivy or Mackenzie Fund will continue to be subject to the CDSC schedule
(or period) of the fund from which the exchange was made, but will reflect the
time the shares are held in the Fund.

Class A, Class B and Class C shares that have been acquired as a result of
the reinvestment of dividends and other distributions will not be charged an
initial sales charge or a CDSC when exchanged into another Ivy or Mackenzie
fund.

Exchanges are considered to be taxable events, and may result in a capital
gain or a capital loss for tax purposes. Before executing an exchange, you
should obtain and read the prospectus and consider the investment objective of
the fund into which the exchange is being made. Shares must be uncertificated in
order to execute an exchange. Exchanges are available only in states where they
can be legally made. This privilege is not intended to provide shareholders a
means by which to speculate on short-term movements in the market. Exchanges are
accepted only if the registrations of the two accounts are identical. Amounts to
be exchanged must meet minimum investment requirements for the Ivy or Mackenzie
fund into which the exchange is made. It is the policy of the Funds to
discourage the use of the exchange privilege for the purpose of timing
short-term market fluctuations. To protect the interests of other shareholders
of a Fund, a Fund may cancel the exchange privileges of any persons that, in the
opinion of the Fund, are using market timing strategies or are making more than
five exchanges per owner or controlling person per calendar year.

With respect to Fund shares subject to a CDSC (i.e., Class B or Class C
shares acquired through an exchange from another Ivy or Mackenzie fund), if less
than all of an investment is exchanged out of the Fund, the shares exchanged
will reflect, pro rata, the cost, capital appreciation and/or reinvestment of
distributions of the original investment as well as the original purchase date,
for purposes of calculating any CDSC for future redemptions of the exchanged
shares.

An investor who was a shareholder of American Investors Income Fund, Inc. or
American Investors Growth Fund, Inc. prior to October 31, 1988, or a shareholder
of Ivy Fund prior to December 31, 1991, who became a shareholder of the Fund as
a result of a reorganization or merger between the Funds may exchange between
funds without paying a sales charge. An investor who was a shareholder of
American Investors Income Fund, Inc. or American Investors Growth Fund, Inc. on
or after October 31, 1988 who became a shareholder of the Fund as a result or
the reorganization between the Funds will receive credit toward any applicable
sales charge imposed by any Ivy or Mackenzie fund into which an exchange is
made.

The Fund employs reasonable procedures that require personal identification
prior to acting on exchange instructions communicated by telephone to confirm
that such instructions are genuine. In the absence of such procedures, the Fund
may be liable for any losses due to unauthorized or fraudulent telephone
instructions.

EXCHANGES IN WRITING: In a letter, request an exchange and provide the
following information:

- The name of the fund whose shares you currently own.

- Your account number

- The name(s) in which the account is registered.

9
<PAGE> 10

- The name of the fund into which you wish to exchange your existing shares.

- The number of shares or the dollar amount you wish to exchange.

The request must be signed by all registered owners.

SYSTEMATIC WITHDRAWAL PLAN

You may elect the Systematic Withdrawal Plan at any time by completing
Section 6B of the Account Application. You can also obtain this application by
contacting your registered representative or IMSC at 1-800-777-6472. To be
eligible, you must have at least $5,000 in your account. Payments (minimum
distribution amount -- $50) from your account can be made monthly, quarterly,
semi-annually, annually or on a selected monthly basis, to yourself or any other
designated payee. You may elect to have your systematic withdrawal paid directly
to your bank account via EFT. Share certificates must be unissued (i.e., held by
the Fund) while the Systematic Withdrawal Plan is in effect. A Systematic
Withdrawal Plan may not be established if you are currently participating in the
Automatic Investment Method. For more information, please contact IMSC at
1-800-777-6472.

Amounts paid to you through the Systematic Withdrawal Plan are derived from
the redemption of shares in your account. Any applicable CDSC will be assessed
upon redemption. A CDSC will not be assessed on withdrawals not exceeding 12%
annually of the initial account balance when the Systematic Withdrawal Plan was
started.

Retirement accounts are eligible for Systematic Withdrawal Plans. Please
contact IMSC at 1-800-777-6472 to obtain the necessary paperwork to establish a
plan.

If the U.S. Postal Service cannot deliver your checks, or if deposits to a
bank account are returned for any reason, your redemptions will be discontinued.

AUTOMATIC INVESTMENT METHOD

You may authorize an investment to be automatically drawn each month from
your bank for investment in Fund shares by completing Sections 6A and 7B of the
Account Application. Attach a "voided" check to your account application. At
pre-specified intervals, your bank account will be debited and the proceeds will
be credited to your Ivy account. The minimum investment under this plan is $50
per month ($25 per month for retirement plans). There is no charge to you for
this program.

You may terminate or suspend your Automatic Investment Method by telephone
at any time by contacting IMSC at 1-800-777-6472.

If you have investments being withdrawn from a bank account and we are
notified that the account has been closed, your Automatic Investment Method will
be discontinued.

CONSOLIDATED ACCOUNT STATEMENTS

Shareholders with two or more Ivy or Mackenzie fund accounts having the same
tax I.D. number will receive a single quarterly account statement, unless
otherwise specified. This feature consolidates the activity for each account
onto one statement. Requests for quarterly consolidated statements for all other
accounts must be submitted in writing and must be signed by all registered
owners.

RETIREMENT PLANS

The Ivy and Mackenzie family of funds offer several tax-sheltered retirement
plans that may fit your needs:

- IRA (Individual Retirement Account)

- 401(k), Money Purchase Pension and Profit Sharing Plans

- SEP-IRA (Simplified Employee Pension Plan)

- 403(b)(7) Plan

- SIMPLE Plans (Individual Retirement Account and 401(k))

Minimum initial and subsequent investments for retirement plans are $25.

Investors Bank & Trust, which serves as custodian or trustee under the
retirement plan prototypes available from the Fund, charges certain nominal fees
for annual maintenance. A portion of these fees is remitted to IMSC, as
compensation for its services to the retirement plan accounts maintained with
the Fund.

Distributions from retirement plans are subject to certain requirements
under the Code. Certain documentation, including IRS Form W-4P, must be provided
to IMSC prior to taking any distribution. Please contact IMSC for details. The
Ivy and Mackenzie family of funds and IMSC assume no responsibility to determine
whether a distribution satisfies the conditions of applicable tax laws, and will
not be responsible for any penalties assessed. For additional information,
please contact your broker, tax advisor or IMSC.

Please call IMSC at 1-800-777-6472 for complete information kits describing
the plans and their benefits, restrictions, provisions and fees.

SHAREHOLDER INQUIRIES

Inquiries regarding the Fund should be directed to IMSC at 1-800-777-6472.

10
<PAGE> 11

ACCOUNT APPLICATION
------------------------
IVY MONEY MARKET FUND ACCOUNT NUMBER

PLEASE MAIL APPLICATIONS AND CHECKS TO: Ivy Mackenzie Services Corp., P.O. Box
3022, Boca Raton, FL 33431-0922.
(This application should not be used for retirement accounts for which Ivy is
custodian.)
<TABLE>
<S> <S> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
FUND 101/ 1 / 2 1 / 2 0 / 1 0 / X
USE ------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
ONLY Dealer # Branch # Rep # Acct Type Soc Cd Div Cd CG Cd Exc Cd Red Cd
- --------------------------------------------------------------------------------------------------------------------------------
1 [ ] Individual
Regis- [ ] Joint Tenant ------------------------------------------------------------
tration [ ] Estate Owner, Custodian or Trustee
[ ] UGMA/UTMA
[ ] Corporation ------------------------------------------------------------
[ ] Partnership Co-owner or Minor
[ ] Sole Proprietor
[ ] Trust ------------------------------------------------------------
------------------- Minor's State of Residence
[ ] Sole Proprietor
[ ] Trust ------------------------------------------------------------

------------------- ------------------------------------------------------------
Date of Trust Street
[ ] Other __________
------------------------------------------------------------
------------------- City State Zip Code
- - - -
------------------------- --------------------------
Phone Number -- Day Phone Number -- Evening
- ---------------------------------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------------------------------
2 - - or - Citizenship [ ] U.S. [ ] Other _____________
Tax --------------------------- -------------------------
ID # Social Security Number Tax Identification Number

UNDER PENALTIES OF PERJURY, I CERTIFY BY SIGNING IN SECTION 9 BELOW THAT: (1) THE NUMBER SHOWN IN
THIS SECTION IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (TIN), AND (2) I AM NOT SUBJECT TO BACKUP
WITHHOLDING BECAUSE: (A) I HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE (IRS) THAT I AM
SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR (B)
THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING. (CROSS OUT ITEM (2) IF
YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF
UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN.) PLEASE SEE THE "TAX IDENTIFICATION
NUMBER" SECTION OF THE PROSPECTUS FOR ADDITIONAL INFORMATION ON COMPLETING THIS SECTION.
- ---------------------------------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------------------------------
3 The undersigned ("Dealer") agrees to all applicable
Dealer provisions in this Application, guarantees the signature and
Informa- legal capacity of the Shareholder, and agrees to notify
tion MIISC of any purchases made under a Letter of Intent or
Rights of Accumulation.

------------------------------------------------------------ --------------------------------------------------------
Dealer Name Representative's Name and Number

------------------------------------------------------------ --------------------------------------------------------
Branch Office Address Representative's Phone Number

------------------------------------------------------------ --------------------------------------------------------
City State Zip Code Authorized Signature of Dealer
- ---------------------------------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------------------------------
4 A. Enclosed is my check ($1,000 minimum) made payable to Ivy Money Market Fund. Please invest it in
Invest- [ ] Class A [ ] Class B* or [ ] Class C* shares.
ments
$ _______________ (Amount Enclosed)

* Direct purchases of Class B and Class C shares may be made in conjunction with a systematic withdrawal
plan into the same Class of a different Ivy or Mackenzie fund. (See " Direct Purchases of Class B and Class C
Shares" under "How To Buy Shares.")
- ---------------------------------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------------------------------
5 A. I would like to reinvest dividends and capital gains into additional shares in this account at net asset
Distri- value unless a different option is checked below.
bution
Options B. [ ] Reinvest all dividends and capital gains into additional shares of a different Ivy or Mackenzie fund.

------------------------------------------- ----------------------------------- [ ] New Account
Fund Name Account Number

C. [ ] Pay all dividends in cash and reinvest capital gains into additional shares in this Fund or a different Ivy
or Mackenzie fund.

------------------------------------------- ----------------------------------- [ ] New Account
Fund Name Account Number

D. [ ] Pay all dividends and capital gains in cash.

I REQUEST THE ABOVE CASH DISTRIBUTION, SELECTED IN C OR D ABOVE, BE:

[ ] Sent to the address listed in the registration.
[ ] Sent to the special payee listed in Section 7A [ ] (By Mail)
7B [ ] (By E.F.T.)
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 12
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
6 OPTIONAL SPECIAL FEATURES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
A. [ ] AUTOMATIC INVESTMENT METHOD (AIM)
I wish to invest [ ] once per month. My bank account will be debited on or about the
[ ] twice _________________ day of the month*
[ ] 3 times _________________ day of the month
[ ] 4 times _________________ day of the month
_________________ day of the month

Please invest $ _________________ each period starting in the month of ______________ in Ivy Money Market Fund.
Dollar Amount Month

[ ] I have attached a voided check to ensure my correct bank account will be debited.

B. [ ] SYSTEMATIC WITHDRAWAL PLANS**

Class: I wish to automatically withdraw funds from my account in Ivy Money Market Fund:
[ ] Class A Shares [ ] Class B Shares [ ] Class C Shares
Frequency: [ ] Monthly If monthly, withdraw funds: [ ] One per month
[ ] Quarterly [ ] Twice per month
[ ] Semi-Annually [ ] 3 times per month
[ ] Annually [ ] 4 times per month
Payment Method: I request the withdrawal to be: [ ] Sent to the address listed in the registration
[ ] Sent to the special payee listed in Section 7A
[ ] Invested as part of a dollar-cost averaging
program into additional shares of another
Ivy or Mackenzie fund (fill out information below)

If part of a dollar-cost averaging program:____________________________________ |___|___|___|___|___|___|___|___|___|___|
Ivy or Mackenzie fund to be invested Account Number

Amount/Start Date: $ _______________, starting on or about the ________ day of the __________________________
month*
________ day of the __________________________
month
________ day of the __________________________
month
________ day of the __________________________
month

C. [ ] FEDERAL FUNDS WIRE FOR REDEMPTION PROCEEDS**
I authorize the Agent to honor telephone instructions for the redemption of Fund shares up to $50,000. Proceeds may be wire
transferred to the bank account designated ($1,000 minimum). Shares issued in certificate form may not be redeemed under this
privilege. (COMPLETE SECTION 7B)

D. [ ] TELEPHONE EXCHANGES** [ ] Yes [ ] No
I authorize exchanges by telephone among the Ivy and Mackenzie family of funds upon instructions from any person as more
fully described in the Prospectus. To change this option once established, written instructions must be received from the
shareholder of record or the current registered representative.

If neither box is checked, the telephone exchange privilege will be provided automatically.

E. [ ] TELEPHONE REDEMPTIONS** [ ] Yes [ ] No
The Fund or its agents are authorized to honor telephone instructions from any person as more fully described in the
Prospectus for the redemption of Fund shares. The amount of the redemption shall not exceed $50,000 and the proceeds are to
be payable to the shareholder of record and mailed to the address of record. To change this option once established, written
instructions must be received from the shareholder of record or the current registered representative.

If neither box is checked, the telephone redemption privilege will be provided automatically.

* There must be a period of at least seven calendar days between each investment/withdrawal period.

** This option may not be selected if shares are in certificate form.

<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
7 SPECIAL PAYEE
- ------------------------------------------------------------------------------------------------------------------------------------
[A.] MAILING ADDRESS [B.] FED WIRE / E.F.T. INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
Please send all disbursements to this special payee

-------------------------------------------------------- ------------------------------------------------------------
Name of Bank or Individual Financial Institution

-------------------------------------------------------- ------------------------------------------------------------
Account Number (If Applicable) ABA # Account#

-------------------------------------------------------- ------------------------------------------------------------
Street Street
-------------------------------------------------------- ------------------------------------------------------------
City/State/Zip City/State/Zip
(Please attach a voided check)
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
8 CHECK WRITING ENROLLMENT FORM
- ------------------------------------------------------------------------------------------------------------------------------------
THIS FEATURE IS AVAILABLE TO CLASS A SHAREHOLDERS ONLY. CHECKS MUST BE WRITTEN FOR A MINIMUM OF $100. Shares purchased in the Fund
may be subject to a holding period of up to 15 calendar days before being redeemed by check. Please see the Prospectus for details.

HOW TO ENROLL

1. ALL REGISTERED OWNERS MUST SIGN THIS FORM IN THE SPACE PROVIDED BELOW.
2. Check the appropriate Number of Signatures Required box to indicate the number of signatures required when writing checks.

<S> <C> <C>
NUMBER OF SIGNATURES REQUIRED
[ ] One signature is required [ ] More than one signature is required_____________________________ [ ] All signatures are required
number of signatures required

IF NONE OF THE ABOVE IS CHECKED THEN ALL SIGNATURES WILL BE REQUIRED

- ---------------------------------------------------------------- -------------------------
Authorized Signature Date

<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
9 SIGNATURE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>

Investors should be aware that the failure to check the "No" under Sections 6D and 6E above means that the Telephone
Exchanges/Redemptions Privileges will be provided. The Funds employ reasonable procedures that require personal identification prior
to acting on exchange/redemption instructions communicated by telephone to confirm that such instructions are genuine. In the
absence of such procedures, a Fund may be liable for any losses due to unauthorized or fraudulent telephone instructions. Please see
"Exchange Privilege" and "How to Redeem Shares" in the Prospectus for more information on these privileges.

I certify to my legal capacity to purchase or redeem shares of the Fund for my own account or for the account of the organization
named in Section 1. I have received a current Prospectus and understand its terms are incorporated in this application by reference.
I am certifying my taxpayer information as stated in Section 2.

THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED
TO AVOID BACKUP WITHHOLDING.

- ---------------------------------------------------------------------- ------------------------
Signature of Owner, Custodian, Trustee or Corporate Officer Date

- ---------------------------------------------------------------------- ------------------------
Signature of Joint Owner, Co-Trustee or Corporate Officer Date
- ------------------------------------------------------------------------------------------------------------------------------------
01IVMXX0497 (REMEMBER TO SIGN SECTION 9)

</TABLE>

IVY BOND FUND
IVY EMERGING GROWTH FUND
IVY GROWTH FUND
IVY GROWTH WITH INCOME FUND

series of

IVY FUND
Via Mizner Financial Plaza, Suite 300
700 South Federal Highway
Boca Raton, Florida 33432

STATEMENT OF ADDITIONAL INFORMATION

April 30, 1997

_________________________________________________________________

Ivy Fund (the "Trust") is an open-end management
investment company that currently consists of sixteen
fully managed portfolios, each of which (except for Ivy
Latin America Strategy Fund and Ivy International Bond
Fund) is diversified. Each of Ivy Latin America
Strategy Fund and Ivy International Bond Fund is a non-
diversified portfolio. This Statement of Additional
Information ("SAI") describes four of the portfolios, Ivy Bond
Fund, Ivy Emerging Growth Fund, Ivy Growth Fund and Ivy
Growth with Income Fund (the "Funds," each a "Fund").
The other twelve portfolios of the Trust are described
in separate Statements of Additional Information.

This SAI is not a prospectus and should be read in
conjunction with the prospectus for the Funds dated
April 30, 1997 (the "Prospectus"), which may be
obtained upon request and without charge from the Trust
at the Distributor's address and telephone number
listed below.

INVESTMENT MANAGER

Ivy Management, Inc. ("IMI")
Via Mizner Financial Plaza, Suite 300
700 South Federal Highway
Boca Raton, Florida 33432
Telephone: (800) 777-6472

DISTRIBUTOR

Ivy Mackenzie Distributors, Inc.
Via Mizner Financial Plaza, Suite 300
700 South Federal Highway
Boca Raton, Florida 33432
Telephone: (800) 456-5111

TABLE OF CONTENTS

INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . .
. . . 5 U.S. GOVERNMENT SECURITIES . . . . . . .
. . . . . . . . 7 MUNICIPAL SECURITIES . . . . .
. . . . . . . . . . . . . 8 ADJUSTABLE RATE
PREFERRED STOCKS . . . . . . . . . . . . 10
CONVERTIBLE SECURITIES . . . . . . . . . . . . . . . . . 10
SMALL COMPANY RISK . . . . . . . . . . . . . . . . . . .
11

COMMERCIAL PAPER . . . . . . . . . . . . . . . . . . .
. . . 12 BANKING INDUSTRY AND SAVINGS AND LOAN
OBLIGATIONS . . . 12 DEPOSITORY RECEIPTS . . .
. . . . . . . . . . . . . . . 12 FOREIGN
SECURITIES . . . . . . . . . . . . . . . . . . . 13
INVESTING IN EMERGING MARKETS . . . . . . . . . . . . . 14
FORWARD FOREIGN CURRENCY CONTRACTS . . . . . . . . . .
. 16 FOREIGN CURRENCIES . . . . . . . . . . . . .
. . . . . . 16 BORROWING . . . . . . . . . . . .
. . . . . . . . . . . 17 FIRM COMMITMENT
AGREEMENTS AND WHEN-ISSUED SECURITIES . 17
RESTRICTED AND ILLIQUID SECURITIES . . . . . . . . . . . 18
REAL ESTATE INVESTMENT TRUSTS (REITS) . . . . . . . . .
18 OPTIONS TRANSACTIONS . . . . . . . . . . . . .
. . . . . 19 GENERAL . . . . . . . . . . . .
. . . . . . . . . . 19 WRITING OPTIONS ON
INDIVIDUAL SECURITIES . . . . . 20
PURCHASING OPTIONS ON INDIVIDUAL SECURITIES . . . . 21
PURCHASING AND WRITING OPTIONS ON SECURITIES
INDICES . . . . . . . . . . . . . . . . . . . 21
RISKS OF OPTIONS TRANSACTIONS . . . . . . . . . .
. 22 FUTURES CONTRACTS AND OPTIONS ON FUTURES
CONTRACTS . . . 23 GENERAL . . . . . .
. . . . . . . . . . . . . 23 INTEREST
RATE FUTURES CONTRACTS . . . . . . . 25
OPTIONS ON INTEREST RATE FUTURES CONTRACTS . . 26
FOREIGN CURRENCY FUTURES CONTRACTS AND
RELATED OPTIONS . . . . . . . . . . . . . 26
RISKS ASSOCIATED WITH FUTURES AND RELATED
OPTIONS . . . . . . . . . . . . . . . . . 27
SECURITIES INDEX FUTURES CONTRACTS . . . . . . . .
. . . 29 RISKS OF SECURITIES INDEX FUTURES .
. . . . . . . . 29 COMBINED
TRANSACTIONS . . . . . . . . . . . . 31
INVESTMENT-GRADE DEBT SECURITIES . . . . . . . . . . . . 31
LOW-RATED DEBT SECURITIES . . . . . . . . . . . . . . .
31

INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . .
. . . 32

ADDITIONAL RESTRICTIONS . . . . . . . . . . . . . . . .
. . . 36

ADDITIONAL RIGHTS AND PRIVILEGES . . . . . . . . . . .
. . . 38 AUTOMATIC INVESTMENT METHOD . . . . . .
. . . . . . . . 38 EXCHANGE OF SHARES . . . . . .
. . . . . . . . . . . . . 39 INITIAL SALES
CHARGE SHARES . . . . . . . . . . . . 39
CONTINGENT DEFERRED SALES CHARGE SHARES. CLASS A . 39
CLASS B . . . . . . . . . . . . . . . . . . . . . . 39
CLASS C . . . . . . . . . . . . . . . . . . . .
. . 41 CLASS I . . . . . . . . . . . . . . .
. . . . . . . 41 LETTER OF INTENT . . . . . . . .
. . . . . . . . . . . . 42

RETIREMENT PLANS . . . . . . . . . . . . . . . . .
. . . 43 INDIVIDUAL RETIREMENT ACCOUNTS . .
. . . . . . . . 44 QUALIFIED PLANS . . . . .
. . . . . . . . . . . . . 45 DEFERRED
COMPENSATION FOR PUBLIC SCHOOLS AND
CHARITABLE ORGANIZATIONS ("403(B)(7)
ACCOUNT") . . . . . . . . . . . . . . . . . . 46
SIMPLIFIED EMPLOYEE PENSION ("SEP") IRAS . . . . . 47
REINVESTMENT PRIVILEGE . . . . . . . . . . . . . . . . .
47 RIGHTS OF ACCUMULATION . . . . . . . . . . . .
. . . . . 48 SYSTEMATIC WITHDRAWAL PLAN . . . . .
. . . . . . . . . . 49

BROKERAGE ALLOCATION . . . . . . . . . . . . . . . . .
. . . 50

TRUSTEES AND OFFICERS . . . . . . . . . . . . . . . . .
. . . 53 PERSONAL INVESTMENTS BY EMPLOYEES OF IMI
. . . . . . . . 57

COMPENSATION TABLE . . . . . . . . . . . . . . . . . .
. . . 58

INVESTMENT ADVISORY AND OTHER SERVICES . . . . . . . .
. . . 60 BUSINESS MANAGEMENT AND INVESTMENT
ADVISORY SERVICES . . 60 DISTRIBUTION SERVICES .
. . . . . . . . . . . . . . . . 63 RULE
18F-3 PLAN . . . . . . . . . . . . . . . . . . 65
RULE 12B-1 DISTRIBUTION PLANS . . . . . . . . . . . 65
CUSTODIAN . . . . . . . . . . . . . . . . . . . . . . .
70 FUND ACCOUNTING SERVICES . . . . . . . . . . .
. . . . . 70 TRANSFER AGENT AND DIVIDEND PAYING
AGENT . . . . . . . . 71 ADMINISTRATOR . . . . .
. . . . . . . . . . . . . . . . 71 AUDITORS . . .
. . . . . . . . . . . . . . . . . . . . . 72

CAPITALIZATION AND VOTING RIGHTS . . . . . . . . . . .
. . . 72

NET ASSET VALUE . . . . . . . . . . . . . . . . . . . .
. . . 75

PORTFOLIO TURNOVER . . . . . . . . . . . . . . . . . .
. . . 77

REDEMPTIONS . . . . . . . . . . . . . . . . . . . . . .
. . . 77

CONVERSION OF CLASS B SHARES . . . . . . . . . . . . .
. . . 79

TAXATION . . . . . . . . . . . . . . . . . . . . . . .
. . . 79 OPTIONS, FUTURES AND FOREIGN CURRENCY
FORWARD CONTRACTS . . . . . . . . . . . . . .
. . . . . . . 80 CURRENCY FLUCTUATIONS --
"SECTION 988" GAINS OR LOSSES . . . . . .
. . . . . . . . . . . . . . . . . . . 82
INVESTMENT IN PASSIVE FOREIGN INVESTMENT COMPANIES . . . 82
DEBT SECURITIES ACQUIRED AT A DISCOUNT . . . . . . . . .
83 DISTRIBUTIONS . . . . . . . . . . . . . . . .
. . . . . 84 DISPOSITION OF SHARES . . . . . . .
. . . . . . . . . . 85 FOREIGN WITHHOLDING TAXES
. . . . . . . . . . . . . . . 85 BACKUP
WITHHOLDING . . . . . . . . . . . . . . . . . . . 86

PERFORMANCE INFORMATION . . . . . . . . . . . . . . . .
. . . 87 YIELD . . . . . . . . . . . . . . .
. . . . . . . . 87 AVERAGE ANNUAL TOTAL
RETURN . . . . . . . . . . . . 88

OTHER QUOTATIONS, COMPARISONS AND GENERAL
INFORMATION . . . . . . . . . . . . . . . .
. 101

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . .
. . . 102

APPENDIX A
DESCRIPTION OF STANDARD & POOR'S CORPORATION
("S&P") AND MOODY'S INVESTORS SERVICE, INC.
("MOODY'S") CORPORATE BOND AND
COMMERCIAL PAPER RATINGS . . . . . . . . 103

INVESTMENT OBJECTIVES AND POLICIES

Each Fund has its own investment objectives and
policies, which are described more fully in the
Prospectus under "Investment Objectives and Policies"
and "Risk Factors and Investment Techniques." The
different types of securities and investment techniques
used by the Funds involve varying degrees of risk.

IVY BOND FUND: Ivy Bond Fund seeks a high level
of current income by investing primarily in (i)
investment-grade corporate bonds (i.e., those rated
Aaa, Aa, A or Baa by Moody's Investors Services, Inc.
("Moody's") or AAA, AA, A or BBB by Standard & Poor's
Corporation ("S&P"), or, if unrated, are considered by IMI
to be of comparable quality) and (ii) U.S. Government
securities (including mortgage-backed securities issued
by U.S. Government agencies or instrumentalities) that
mature in more than 13 months. As a fundamental policy,
the Fund normally invests at least 65% of its total
assets in these fixed income securities. For temporary
defensive purposes, the Fund may invest without limit
in U.S. Government securities maturing in 13 months or
less, certificates of deposit, bankers' acceptances, commercial
paper and repurchase agreements. The Fund may also invest
up to 35% of its total assets in such money market
securities in order to meet redemptions or to maximize
income to the Fund while it is arranging longer-term
investments.

The Fund may invest up to 35% of its net assets in
corporate debt securities, including zero coupon bonds,
rated Ba or below by Moody's or BB or below by S&P, or,
if unrated, are considered by IMI to be of comparable
quality (commonly referred to as "high yield" or "junk"
bonds). The Fund will not invest in debt securities
rated less than C by either Moody's or S&P.

The Fund may invest up to 5% of its assets in dividend-
paying common and preferred stocks (including
adjustable rate preferred stocks and securities
convertible into common stocks), municipal bonds, zero
coupon bonds, and securities sold on a "when-issued" or
firm commitment basis. As a temporary measure for
extraordinary or emergency purposes, the Fund may borrow from
banks (up to 10% of the value of its total assets). The Fund
may with approval of the Trust's Board of Trustees (the
"Trustees" or "Board"), but currently does not intend
to, lend portfolio securities valued at not more that
30% of the Fund's total assets.

The Fund may invest up to 20% of its net assets in
debt securities of foreign issuers, including non-U.S. dollar-
denominated debt securities (including American
Depository Receipts ("ADRs"), Global Depository
Receipts ("GDRs"), American Depository Shares ("ADSs")
and Global Depository Shares ("GDSs")), Eurodollar
securities and debt securities issued, assumed or
guaranteed by foreign governments or political
subdivisions or instrumentalities thereof. The Fund may also

enter into forward foreign currency contracts, but not
for speculative purposes. The Fund may not invest more
than 10% of the value of its net assets in illiquid
securities, such as securities subject to legal or
contractual restrictions on resale ("restricted
securities"), repurchase agreements maturing in more
than seven days and other securities that are not readily
marketable, and in any case may not invest more than 5% of its
net assets in restricted securities.

The Fund may purchase put and call options,
provided the premium paid for such options does not
exceed 10% of the Fund's net assets. The Fund may also
sell covered put options with respect to up to 50% of
the value of its net assets, and may write covered call
options so long as not more than 20% of the Fund's net
assets is subject to being purchased upon the exercise
of the calls. For hedging purposes only, the Fund may engage in
transactions in interest rate futures contracts, currency
futures contracts and options on interest rate futures
and currency futures contracts.

IVY EMERGING GROWTH FUND, IVY GROWTH FUND AND IVY
GROWTH WITH INCOME FUND: Each Fund's principal
investment objective is long-term capital growth,
primarily through investment in equity securities, with
current income being a secondary consideration. Ivy
Growth with Income Fund has tended to emphasize dividend-
paying stocks more than the other two Funds. Under normal
conditions, each Fund invests at least 65% of its total assets
in common stocks and securities convertible into common
stocks. Ivy Growth Fund and Ivy Growth with Income
Fund invest primarily in common stocks of domestic
corporations with low price-earnings ratios and rising
earnings, focusing on established, financially secure
firms with capitalizations over $100 million and more than
three years of operating history. Ivy Emerging Growth Fund
invests primarily in common stocks (or securities with
similar characteristics) of small and medium-sized
companies, both domestic and foreign, that are in the
early stages of their life cycles and that IMI believes
have the potential to become major enterprises.

All of the Funds may invest up to 25% of their
assets in foreign equity securities, primarily those
traded in European, Pacific Basin and Latin American
markets, some of which may be emerging markets
involving special risks, as described below.
Individual foreign securities are selected based on value
indicators, such as a low price-earnings ratio, and are reviewed
for fundamental financial strength.

When circumstances warrant, each Fund may invest
without limit in investment-grade debt securities
(e.g., U.S. Government securities or other corporate
debt securities rated at least Baa by Moody's or BBB by
S&P, or, if unrated, are considered by IMI to be of
comparable quality), preferred stocks, or cash or cash
equivalents such as bank obligations (including certificates of
deposit and bankers' acceptances), commercial paper,
short-term

notes and repurchase agreements.

Ivy Growth with Income Fund may invest less than
35% of its net assets in debt securities rated Ba or
below by Moody's or BB or below by S&P, or if unrated,
are considered by IMI to be of comparable quality
(commonly referred to as "high yield" or "junk" bonds).
Ivy Growth Fund may invest up to 5% of its net assets
in these low-rated debt securities. Neither Fund will
invest in debt securities rated less than C by either Moody's or
S&P.

As a fundamental policy, each Fund may borrow up
to 10% of the value of its total assets, but only for
temporary purposes where it would be advantageous to do
so from an investment standpoint. All of the Funds may
invest up to 5% of their net assets in warrants. Each
Fund may not invest more than 10% of the value of its
net assets in illiquid securities, such as securities
subject to legal or contractual restrictions on a
resale ("restricted securities"), repurchase agreements maturing
in more than seven days and other securities that are not
readily marketable; and in any case may not invest more
than 5% of its net assets in restricted securities. All
of the Funds may enter into forward foreign currency
contracts. Ivy Growth Fund and Ivy Growth with Income
Fund each may also invest in equity real estate
investment trusts.

Each of the Funds may write put options, with
respect to not more than 10% of the value of its net
assets, on securities and stock indices, and may write
covered call options with respect to not more than 25%
of the value of its net assets. Each Fund may purchase
options, provided the aggregate premium paid for all
options held does not exceed 5% of its net assets. For hedging
purposes only, each Fund may enter into stock index
futures contracts as a means of regulating its exposure
to equity markets. A Fund's equivalent exposure in
stock index futures contracts will not exceed 15% of
its total assets.

RISK FACTORS

U.S. GOVERNMENT SECURITIES

U.S. Government securities are obligations of, or
guaranteed by, the U.S. Government, its agencies or
instrumentalities. Securities guaranteed by the U.S.
Government include: (1) direct obligations of the U.S.
Treasury (such as Treasury bills, notes, and bonds) and
(2) Federal agency obligations guaranteed as to
principal and interest by the U.S. Treasury (such as GNMA
certificates, which are mortgage-backed securities). When such
securities are held to maturity, the payment of principal
and interest is unconditionally guaranteed by the U.S.
Government, and thus they are of the highest possible
credit quality. U.S. Government securities that are
not held to maturity are subject to variations in
market value due to fluctuations in interest rates.

Mortgage-backed securities are securities
representing part ownership of a pool of mortgage
loans. For example, GNMA certificates are such
securities in which the timely payment of principal and
interest is guaranteed by the full faith and credit of
the U.S. Government. Although the mortgage loans in the pool
will have maturities of up to 30 years, the actual average
life of the loans typically will be substantially less
because the mortgages will be subject to normal
principal amortization and may be prepaid prior to
maturity. Prepayment rates vary widely and may be
affected by changes in market interest rates. In
periods of falling interest rates, the rate of prepayment tends
to increase, thereby shortening the actual average life of
the security. Conversely, rising interest rates tend
to decrease prepayment, thereby lengthening the actual
average life of the security (and increasing the
security's price volatility). Accordingly, it is not
possible to predict accurately the average life of a
particular pool. Reinvestment of prepayment may occur
at higher or lower rates than the original yield on the
certificates. Due to the prepayment feature and the need to
reinvest prepayments of principal at current rates, mortgage-
backed securities can be less effective than typical
bonds of similar maturities at "locking in" yields
during periods of declining interest rates. Such
securities may appreciate or decline in market value
during periods of declining or rising interest rates,
respectively.

Securities issued by U.S. Government
instrumentalities and certain federal agencies are
neither direct obligations of nor guaranteed by the
U.S. Treasury; however, they involve Federal
sponsorship in one way or another. Some are backed by specific
types of collateral, some are supported by the issuer's
right to borrow from the Treasury, some are supported
by the discretionary authority of the Treasury to
purchase certain obligations of the issuer, others are
supported only by the credit of the issuing government
agency or instrumentality. These agencies and
instrumentalities include, but are not limited to, Federal Land
Banks, Farmers Home Administration, Central Bank for
Cooperatives, Federal Intermediate Credit Banks, Federal Home
Loan Banks, Federal National Mortgage Association,
Federal Home Loan Mortgage Corporation and Student Loan
Marketing Association.

MUNICIPAL SECURITIES

Municipal securities are debt obligations that
generally have a maturity at the time of issue in
excess of one year and are issued to obtain funds for
various public purposes. The two principal
classifications of municipal bonds are "general
obligation" and "revenue" bonds. General obligation bonds are
secured by the issuer's pledge of its full faith, credit
and taxing power for the payment of principal and
interest. Revenue bonds are payable only from the
revenues derived from a particular facility or class of
facilities, or, in some cases, from the proceeds of a
special excise of a specific revenue source.
Industrial development bonds or private activity bonds

are issued by or on behalf of public authorities to
obtain funds for privately-operated facilities and are
in most cases revenue bonds that generally do not carry
the pledge of the full faith and credit of the issuer
of such bonds, but depend for payment on the ability of
the industrial user to meet its obligations (or on any
property pledged as security).

The market prices of municipal securities, like
those of taxable debt securities, go up and down when
interest rates change. Thus, the net asset value per
share can be expected to fluctuate and shareholders may
receive more or less than their purchase price for
shares they redeem.

ZERO COUPON BONDS

A Fund may purchase zero coupon bonds in
accordance with the Fund's credit quality standards.
Zero coupon bonds are debt obligations issued without
any requirement for the periodic payment of interest,
and are issued at a significant discount from face
value. The discount approximates the total amount of
interest the bonds would accrue and compound over the period
until maturity at a rate of interest reflecting the market
rate at the time of issuance. If a Fund holds zero
coupon bonds in its portfolio, it would recognize
income currently for Federal income tax purposes in the
amount of the unpaid, accrued interest and generally
would be required to distribute dividends repre- senting
such income to shareholders currently, even though the
cash representing such income would not have been received by the
Fund. Cash to pay dividends representing unpaid,
accrued interest may be obtained from, for example,
sales proceeds of portfolio securities and Fund shares
and from loan proceeds. However, this may result in a
Fund's having to sell portfolio securities at a time
when it might otherwise choose not to do so, and the
Fund might incur a capital loss on such sales. Because
interest on zero coupon obligations is not distributed to a Fund
on a current basis, but is in effect compounded, the
value of such securities is subject to greater
fluctuations in response to changing interest rates
than the value of debt obligations that distribute
income regularly.

REPURCHASE AGREEMENTS

Repurchase agreements are contracts under which a
Fund buys a money market instrument and obtains a
simultaneous commitment from the seller to repurchase
the instrument at a specified time and at an agreed-
upon yield. A Fund may not enter into a repur- chase
agreement with more than seven days to maturity if, as a
result, more than 10% of that Fund's net assets would be invested
in illiquid securities, including such repurchase
agreements. Under guidelines approved by the Board,
a Fund is permitted to enter into repurchase agreements
only if the repurchase agreements are at least fully
collateralized with U.S. Government securities or other
securities that the Fund's investment adviser has
approved for use as collateral for repurchase agreements and

the collateral must be marked-to-market daily. A Fund
will enter into repurchase agreements only with banks
and broker-dealers deemed to be creditworthy by the
Fund's investment adviser under guidelines approved by
the Board. In the unlikely event of failure of the
executing bank or broker-dealer, a Fund could
experience some delay in obtaining direct ownership of the
underlying collateral and might incur a loss if the value of
the security should decline, as well as costs in
disposing of the security.

WARRANTS

A Fund's investments in warrants, valued at the
lower of cost or market, will not exceed 5% of the
value of its net assets. Included within that amount,
but not to exceed 2% of a Fund's net assets, may be
warrants that are not listed on either the New York or
the American Stock Exchanges. Warrants acquired by a
Fund in units or attached to securities will be deemed to be
without value for purposes of this restriction.

The holder of a warrant has the right, until the
warrant expires, to purchase a given number of shares
of a particular issuer at a specified price. Such
investments can provide a greater potential for profit
or loss than an equivalent investment in the underlying
security. However, prices of warrants do not
necessarily move in a tandem with the prices of the
underlying securities, and are, therefore, considered
speculative investments. Warrants pay no dividends and confer no
rights other than a purchase option. Thus, if a warrant
held by a Fund were not exercised by the date of its
expiration, the Fund would lose the entire purchase
price of the warrant.

ADJUSTABLE RATE PREFERRED STOCKS

Adjustable rate preferred stocks have a variable
dividend, generally determined on a quarterly basis
according to a formula based upon a specified premium
or discount to the yield on a particular U.S. Treasury
security rather than a dividend which is set for the
life of the issue. Although the dividend rates on
these stocks are adjusted quarterly and their market value should
therefore be less sensitive to interest rate
fluctuations than are other fixed income securities and
preferred stocks, the market values of adjustable rate
preferred stocks have fluctuated and can be expected to
continue to do so in the future.

CONVERTIBLE SECURITIES

Because convertible securities can be converted
into equity securities, their values will normally vary
in some proportion with those of the underlying equity
securities. Convertible securities usually provide a
higher yield than the underlying equity, however, so
that the price decline of a convertible security may
sometimes be less substantial than that of the
underlying equity security.

A Fund may invest in convertible securities, such
as corporate bonds, notes, debentures and other
securities that may be converted into common stock.
Investments in convertible securities can provide
income through interest and dividend payments as well
as an opportunity for capital appreciation by virtue of
their conversion or exchange features.

The convertible securities in which a Fund may
invest include preferred stock that may be converted or
exchanged at a stated or determinable exchange ratio
into underlying shares of common stock. The exchange
ratio for any particular convertible security may be
adjusted from time to time due to stock splits,
dividends, spin-offs, other corporate distributions or scheduled
changes in the exchange ratio. Convertible debt
securities and convertible preferred stocks, until
converted, have general characteristics similar to both
debt and equity securities. Although to a lesser
extent than with debt securities generally, the market
value of convertible securities tends to decline as
interest rates increase and, conversely, tends to increase as
interest rates decline. In addition, because of the
conversion or exchange feature, the market value of
convertible securities typically changes as the market
value of the underlying common stock changes, and,
therefore, also tends to follow movements in the
general market for equity securities. When the market price
of the underlying common stock increases, the price of a
convertible security tends to rise as a reflection of the
value of the underlying common stock, although
typically not as much as the price of the underlying
common stock. While no securities investments are
without risk, investments in convertible securities
generally entail less risk than investments in common
stock of the same issuer.

As debt securities, convertible securities are
investments which provide for a stream of income. Of
course, like all debt securities, there can be no
assurance of income or principal payments because the
issuers of the convertible securities may default on
their obligations. Convertible securities generally
offer lower yields than non-convertible securities of similar
quality because of their conversion or exchange features.

Convertible securities generally are subordinated
to other similar but non-convertible securities of the
same issuer, although convertible bonds, as corporate
debt obligations, are senior in right of payment to all
equity securities, and convertible preferred stock is
senior to common stock, of the same issuer. However,
convertible bonds and convertible preferred stock
typically have lower coupon rates than similar non-
convertible securities. Convertible securities may be issued
as fixed income obligations that pay current income.

SMALL COMPANY RISK

Investing in smaller company stocks involves
certain special considerations and risks that are not
usually associated with

investing in larger, more established companies. For
example, the securities of smaller companies may be
subject to more abrupt or erratic market movements,
because they tend to be thinly traded and are subject
to a greater degree to changes in the issuer's earnings
and prospects. Small companies also tend to have
limited product lines, markets or financial resources.
Transaction costs in smaller company stocks also may be higher
than those of larger companies.

COMMERCIAL PAPER

Commercial paper represents short-term unsecured
promissory notes issued in bearer form by bank holding
companies, corporations and finance companies. A Fund
may invest in commercial paper that is rated Prime-1 by
Moody's or A-1 by S&P or, if not rated by Moody's or
S&P, is issued by companies having an outstanding debt
issue rated Aaa or Aa by Moody's or AAA or AA by S&P.

BANKING INDUSTRY AND SAVINGS AND LOAN OBLIGATIONS

Certificates of deposit are negotiable
certificates issued against funds deposited in a
commercial bank for a definite period of time and
earning a specified return. Bankers' acceptances are
negotiable drafts or bills of exchange, normally drawn
by an importer or exporter to pay for specific merchandise,
which are "accepted" by a bank (meaning, in effect, that the
bank unconditionally agrees to pay the face value of
the instrument at maturity). In addition to investing
in certificates of deposit and bankers' acceptances, a
Fund may invest in time deposits in banks or savings
and loan associations. Time deposits are generally
similar to certificates of deposit, but are
uncertificated. A Fund's investments in certificates of deposit,
time deposits, and bankers' acceptances are limited to
obligations of (i) banks having total assets in excess of
$1 billion, (ii) U.S. banks which do not meet the $1
billion asset requirement, if the principal amount of
such obligation is fully insured by the Federal Deposit
Insurance Corporation (the "FDIC"), (iii) savings and
loan associations which have total assets in excess of
$1 billion and which are members of the FDIC, and (iv)
foreign banks if the obligation is, in IMI's opinion, of
an investment quality comparable to other debt securities which
may be purchased by the particular Fund. A Fund's
investments in certificates of deposit of savings
associations are limited to obligations of Federal and
state-chartered institutions whose total assets exceed
$1 billion and whose deposits are insured by the
FDIC.

DEPOSITORY RECEIPTS

independently and without the cooperation of the issuer
of the underlying sdecurities. As a result, available
information concerning the issuer may not be as current
as for sponsored depository instruments and their
prices may be more volatile than if they were sponsored
by the issuers of the underlying securities. ADRs are
publicly traded on exchanges or over-the- counter
("OTC") in the United States.

FOREIGN SECURITIES

A Fund may invest in securities of foreign
issuers, including non-U.S. dollar-denominated debt
securities, Euro dollar securities, sponsored and
unsponsored ADRs, ADSs, GDRs GDSs and debt securities
issued, assumed or guaranteed by foreign governments or
political subdivisions or the instrumentalities
thereof. Shareholders should consider carefully the substantial
risks involved in investing in securities issued by
companies and governments of foreign nations, which are
in addition to the usual risks inherent in the domestic
investments. Although a Fund intends to invest only in
nations that IMI considers to have relatively stable
and friendly governments, there is the possibility of
expropriation, nationalization, repatriation or
confiscatory taxation, taxation of income earned in a foreign
country and other foreign taxes, foreign exchange controls
(which may include suspension of the ability to
transfer currency from a given country), default in
foreign government securities, political or social
instability or diplomatic developments which could
affect investments in securities of issuers in those
nations. In addition, in many countries there is less publicly
available information about issuers than is available for
U.S. companies. For example, ownership of unsponsored
ADRs may not entitle the owner to financial or other
reports from the issuer to which it might otherwise be
entitled as the owner of a sponsored ADR. Moreover,
foreign companies are not generally subject to uniform
accounting, auditing and financial reporting standards,
and auditing practices and requirements may not be
comparable to those applicable to U.S. companies. In many
foreign countries, there is less government supervision and
regulation of business and industry practices, stock
exchanges, brokers, and listed companies than in the
United States. Foreign securities transactions may
also be subject to higher brokerage costs than domestic
securities transactions. The foreign securities
markets of many of the countries in which a Fund may
invest may also be smaller, less liquid and subject to greater
price volatility than those in the United States. In
addition, a Fund may encounter difficulties or be
unable to pursue legal remedies and obtain judgment in
foreign courts.

return is earned thereon. The inability of a Fund to
make intended security purchases due to settlement
problems could cause that Fund to miss attractive
investment opportunities. Further, the inability to
dispose of portfolio securities due to settlement
problems could result either in losses to a Fund
because of subsequent declines in the value of the portfolio
security or, if a Fund has entered into a contract to sell
the security, in possible liability to the purchaser.
Fixed commissions on some foreign securities exchanges
are generally higher than negotiated commissions on
U.S. exchanges, although IMI will endeavor to achieve
the most favorable net results on a Fund's portfolio
transactions. It may be more difficult for a Fund's
agents to keep currently informed about corporate actions
such as stock dividends or other matters that may affect the
prices of portfolio securities. Communications between the
United States and foreign countries may be less reliable
than within the United States, thus increasing the risk
of delayed settlements of portfolio transactions or
loss of certificates for portfolio securities.
Moreover, individual foreign economies may differ
favorably or unfavorably from the United States economy in
such respects as growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency
and balance of payments position. IMI seeks to
mitigate the risks to a Fund associated with the
foregoing considerations through investment variation
and continuous professional management.

INVESTING IN EMERGING MARKETS

Investors should recognize that investing in
certain foreign securities involves special
considerations, including those set forth below, that
are not typically associated with investing in United
States securities and that may affect a Fund's performance
favorably or unfavorably. (See "Foreign Securities" under the
caption "Risk Factors and Investment Techniques" in the
Prospectus.)

In recent years, many emerging market countries
around the world have undergone political changes that
have reduced government's role in economic and personal
affairs and have stimulated investment and growth.
Historically, there is a strong direct correlation
between economic growth and stock market returns.
While this is no guarantee of future performance, IMI
believes that investment opportunities (particularly in the
energy, environmental services, natural resources, basic
materials, power, telecommunications and transportation
industries) may result within the evolving economies of
emerging market countries from which the Fund and its
shareholders will benefit.

Investments in companies domiciled in developing
countries may be subject to potentially higher risks
than investments in developed countries. Such risks
include (i) less social, political and economic
stability; (ii) a small market for securities and/or a
low or nonexistent volume of trading, which

result in a lack of liquidity and in greater price
volatility; (iii) certain national policies that may
restrict a Fund's investment opportunities, including
restrictions on investment in issuers or industries
deemed sensitive to national interests; (iv) foreign
taxation; (v) the absence of developed structures
governing private or foreign investment or allowing for judicial
redress for injury to private property; (vi) the absence,
until relatively recently in certain Eastern European
countries, of a capital market structure or market-
oriented economy; (vii) the possibility that recent
favorable economic developments in Eastern Europe may
be slowed or reversed by unanticipated political or
social events in such countries; and (viii) the
possibility that currency devaluations could adversely affect the
value of a Fund's investments. Further, many emerging
markets have experienced and continue to experience
high rates of inflation.

Despite the dissolution of the Soviet Union, the
Communist Party may continue to exercise a significant
role in certain Eastern European countries. To the
extent of the Communist Party's influence, investments
in such countries will involve risks of
nationalization, expropriation and confiscatory
taxation. The communist governments of a number of Eastern
European countries expropriated large amounts of private
property in the past, in many cases without adequate
compensation, and there can be no assurance that such
expropriation will not occur in the future. In the
event of such expropriation, a Fund could lose a
substantial portion of any investments it has made in the
affected countries. Further, few (if any) accounting standards
exist in Eastern European countries. Finally, even
though certain Eastern European currencies may be
convertible into U.S. dollars, the conversion rates may
be artificial in relation to the actual market values
and may be adverse to a Fund's net asset value.

Certain Eastern European countries that do not
have well- established trading markets are characterized
by an absence of developed legal structures governing
private and foreign investments and private property.
In addition, certain countries require governmental
approval prior to investments by foreign persons, or
limit the amount of investment by foreign persons in a
particular company, or limit the investment of foreign persons
to only a specific class of securities of a company that
may have less advantageous terms than securities of the
company available for purchase by nationals.

Authoritarian governments in certain Eastern
European countries may require that a governmental or
quasi-governmental authority act as custodian of a
Fund's assets invested in such country. To the extent
such governmental or quasi-governmental authorities do
not satisfy the requirements of the Investment Company
Act of 1940, as amended (the "1940 Act"), with respect to
the custody of a Fund's cash and securities, that Fund's
investment in such countries may be limited or may be required
to

be effected through intermediaries. The risk of loss
through governmental confiscation may be increased in
such countries.

FORWARD FOREIGN CURRENCY CONTRACTS

A forward foreign currency contract (a "forward
contract") is an obligation to purchase or sell a
specific currency for an agreed price at a future date
(usually less than a year), and typically is
individually negotiated and privately traded by
currency traders and their customers. A forward contract
generally has no deposit requirement, and no commissions are
charged at any stage for trades. Although foreign exchange
dealers do not charge a fee for commissions, they do
realize a profit based on the difference between the
price at which they are buying and selling various
currencies. Although these contracts are intended to
minimize the risk of loss due to a decline in the value
of the hedged currencies, at the same time, they tend
to limit any potential gain which might result should
the value of such currencies increase.

While a Fund may enter into forward contracts to
reduce currency exchange risks, changes in currency
exchange rates may result in poorer overall performance
for a Fund than if it had not engaged in such
transactions. Moreover, there may be an imperfect
correlation between a Fund's portfolio holdings of
securities denominated in a particular currency and forward
contracts entered into by that Fund. An imperfect correlation
of this type may prevent a Fund from achieving the
intended hedge or expose the Fund to the risk of
currency exchange loss.

A Fund will not enter into or maintain a net
exposure to a forward contract where the consummation
of the contract would obligate the Fund to deliver an
amount of currency that exceeds the value of the Fund's
portfolio securities or other assets denominated in
that currency. Further, a Fund generally will not
enter into a forward contract with a term greater than one year.

To the extent required by applicable law, a Fund
will hold cash or liquid securities in a segregated
account with its custodian in an amount equal (on a
daily marked-to-market basis) to the amount of the
commitments under these contracts. At the maturity of
a forward contract, a Fund may either accept or make
delivery of the currency specified in the contract, or, prior to
maturity, enter into a closing purchase transaction
involving the purchase or sale of an offsetting
position. Closing purchase transactions with respect
to forward contracts are usually effected with the
currency trader who is a party to the original forward
contract.

FOREIGN CURRENCIES

Investment in foreign securities will usually
involve currencies of foreign countries. In addition,
a Fund may temporarily hold foreign currency deposits
during the completion

of investment programs and may purchase forward
contracts. Because of these factors, the value of the
assets of a Fund as measured in U.S. dollars may be
affected favorably or unfavorably by changes in foreign
currency exchange rates and exchange control
regulations, and the Fund may incur costs in connection
with conversions between various currencies. Although a Fund
values the Fund's assets daily in terms of U.S. dollars, a
Fund does not intend to convert its holdings of foreign
currencies into U.S. dollars on a daily basis. A Fund
may do so from time to time, and investors should be
aware of the costs of currency conversion. Although
foreign exchange dealers do not charge a fee for
conversion, they do realize a profit based on the
difference (the "spread") between the prices at which they are
buying and selling various currencies. Thus, a dealer may
offer to sell a foreign currency to a Fund at one rate,
while offering a lesser rate of exchange should the
Fund desire to resell that currency to the dealer. A
Fund will conduct its foreign currency exchange
transactions either on a cash basis at the spot rate
prevailing in the foreign currency exchange market, or through
entering into forward contracts to purchase or sell foreign
currencies.

Because a Fund normally will be invested in both
U.S. and foreign securities markets, changes in the
Fund's share price may have a low correlation with
movements in U.S. markets. A Fund's share price will
reflect movements of the stock and bond markets in
which it is invested (both U.S. and foreign), and of the
currencies in which its foreign investments are denominated.
Thus, the strength or weakness of the U.S. dollar against
foreign currencies accounts for part of a Fund's
investment performance. U.S. and foreign securities
markets do not always move in step with each other, and
the total returns from different markets may vary
significantly.

BORROWING

Borrowing may exaggerate the effect on a Fund's
net asset value of any increase or decrease in the
value of the Fund's portfolio securities. Money
borrowed will be subject to interest costs (which may
include commitment fees and/or the cost of maintaining
minimum average balances). Although the principal of a
Fund's borrowings will be fixed, the Fund's assets may change
in value during the time a borrowing is outstanding, thus
increasing exposure to capital risk. All borrowing will be
repaid before any additional investments are made.

FIRM COMMITMENT AGREEMENTS AND WHEN-ISSUED SECURITIES

agreed-upon price on a specified future date. A Fund
uses such investment techniques order to secure what is
considered to be an advantageous price and yield to the
Fund and not for purposes of leveraging the Fund's
assets. In either instance, a Fund will maintain in a
segregated account with its custodian cash or liquid
securities equal (on a daily marked-to-market basis) to
the amount of its commitment to purchase the underlying
securities.

RESTRICTED AND ILLIQUID SECURITIES

An "illiquid security" is an asset that may not be
sold or disposed of in the ordinary course of business
within seven days at approximately the value at which a
Fund has valued the security on its books. A
"restricted security" is a security that cannot be
offered to the public for sale without first being
registered under the Securities Act of 1933, and is considered to
be illiquid until such filing takes place. Restricted
securities may be sold only in privately negotiated
transactions or in a public offering with respect to
which a registration statement is in effect under the
Securities Act of 1933. Where a registration statement
is required, a Fund may be required to bear all or part
of the registration expenses. Issuers of restricted securities
may not be subject to the disclosure and other investor
protection requirements that would be applicable if their
securities were publicly traded. There may also be a lapse
of time between a Fund's decision to sell a restricted
or illiquid security and the point at which the Fund is
permitted or able to do so. If, during such a period,
adverse market conditions were to develop, a Fund might
obtain a ess favorable price than the price that
prevailed when it decided to sell. Since it is not
possible to predict with assurance that the market for securities
eligible for resale under Rule 144A will continue to be
liquid, a Fund will monitor each of its investments in
these securities, focusing on factors such as
valuation, liquidity and availability of information.
This investment practice could have the effect of
increasing the level of illiquidity in a Fund to the extent
that qualified institutional buyers become, for a time,
uninterested in purchasing these restricted securities.
Securities whose proceeds are subject to limitations on
repatriation of principal or profits for more than seven days,
and those for which market quotations are not readily
available, may be deemed illiquid for these
purposes.

REAL ESTATE INVESTMENT TRUSTS (REITS)

A Fund may invest in equity real estate investment
trusts ("REITs"). A REIT is a corporation, trust or
association that invests in real estate mortgages or
equities for the benefit of its investors. REITs are
dependent upon management skill, may not be diversified
and are subject to the risks of financing projects.
Such entities are also subject to heavy cash flow
dependency, defaults by borrowers, self-liquidation and the
possibility of failing to qualify for tax-free pass-through of

income under the Internal Revenue Code of 1986, as
amended (the "Code") and to maintain exemption from the
1940 Act. By investing in REITs indirectly through a
fund, a shareholder will bear not only his or her
proportionate share of the expenses of the Fund, but
also, indirectly, similar expenses of the REITs.

OPTIONS TRANSACTIONS

OPTIONS, IN GENERAL. A Fund may engage in
transactions in options on securities and stock indices
in accordance with the Fund's stated investment
objective and policies. A Fund may also purchase put
options on securities and may purchase and sell (write)
put and call options on stock indices. Options on
securities and stock indices purchased or written by a Fund will
be limited to options traded on national securities
exchanges, boards of trade or similar entities, or in
the OTC markets.

A call option is a short-term contract (having a
duration of less than one year) pursuant to which the
purchaser, in return for the premium paid, has the
right to buy the security underlying the option at the
specified exercise price at any time during the term of
the option. The writer of the call option, who
receives the premium, has the obligation, upon exercise of
the option, to deliver the underlying security against payment
of the exercise price. A put option is a similar
contract pursuant to which the purchaser, in return for
the premium paid, has the right to sell the security
underlying the option at the specified exercise price
at any time during the term of the option. The writer
of the put option, who receives the premium, has the
obligation, upon exercise of the option, to buy the underlying
security at the exercise price. The premium paid by the
purchaser of an option will reflect, among other things,
the relationship of the exercise price to the market
price and volatility of the underlying security, the
time remaining to expiration of the option, supply and
demand, and interest rates.

If the writer of an option wishes to terminate the
obligation, the writer may effect a "closing purchase
transaction." This is accomplished by buying an option of
the same series as the option previously written. The
effect of the purchase is that the writer's position
will be cancelled by the Options Clearing Corporation.
However, a writer may not effect a closing purchase
transaction after it has been notified of the exercise
of an option. Likewise, an investor who is the holder
of an option may liquidate his or her position by effecting a
"closing sale transaction." This is accomplished by selling
an option of the same series as the option previously
purchased. There is no guarantee that either a closing
purchase or a closing sale transaction can be effected
at any particular time or at any acceptable price. If
any call or put option is not exercised or sold, it
will become worthless on its expiration date.

A Fund will realize a gain (or a loss) on a
closing purchase

transaction with respect to a call or a put previously
written by the Fund if the premium, plus commission
costs, paid by the Fund to purchase the call or the put
is less (or greater) than the premium, less commission
costs, received by the Fund on the sale of the call or
the put. A gain also will be realized if a call or a
put that a Fund has written lapses unexercised, because the
Fund would retain the premium. Any such gains (or losses) are
considered short-term capital gains (or losses) for
Federal income tax purposes. Net short-term capital
gains, when distributed by a Fund, are taxable as
ordinary income. See "Taxation."

A Fund will realize a gain (or a loss) on a
closing sale transaction with respect to a call or a
put previously purchased by the Fund if the premium,
less commission costs, received by the Fund on the sale
of the call or the put is greater (or less) than the
premium, plus commission costs, paid by the Fund to
purchase the call or the put. If a put or a call expires
unexercised, it will become worthless on the expiration date,
and a Fund will realize a loss in the amount of the
premium paid, plus commission costs. Any such gain or
loss will be long-term or short-term gain or loss,
depending upon a Fund's holding period for the option.

Exchange-traded options generally have
standardized terms and are issued by a regulated
clearing organization (such as the Options Clearing
Corporation), which, in effect, guarantees the
completion of every exchange-traded option transaction. In
contrast, the terms of OTC options are negotiated by a Fund
and its counterparty (usually a securities dealer or a
financial institution) with no clearing organization
guarantee. When a Fund purchases an OTC option, it
relies on the party from whom it has purchased the
option (the "counterparty") to make delivery of the
instrument underlying the option. If the counterparty fails
to do so, a Fund will lose any premium paid for the option,
as well as any expected benefit of the transaction.
Accordingly, IMI will assess the creditworthiness of
each counterparty to determine the likelihood that the
terms of the OTC option will be satisfied.

WRITING OPTIONS ON INDIVIDUAL SECURITIES. A Fund
may write (sell) covered call options on the Fund's
securities in an attempt to realize a greater current
return than would be realized on the securities alone.
A Fund may also write covered call options to hedge a
possible stock or bond market decline (only to the
extent of the premium paid to the Fund for the
options). In view of the investment objectives of a Fund, the
Fund generally would write call options only in
circumstances where the investment adviser to the Fund
does not anticipate significant appreciation of the
underlying security in the near future or has otherwise
determined to dispose of the security.

A Fund may write covered call options as described
in the Fund's Prospectus. A "covered" call option
means generally that

so long as the Fund is obligated as the writer of a
call option, the Fund will (i) own the underlying
securities subject to the option, or (ii) have the
right to acquire the underlying securities through
immediate conversion or exchange of convertible
preferred stocks or convertible debt securities owned
by the Fund. Although a Fund receives premium income from these
activities, any appreciation realized on an underlying
security will be limited by the terms of the call
option. A Fund may purchase call options on individual
securities only to effect a "closing purchase
transaction."

As the writer of a call option, a Fund receives a
premium for undertaking the obligation to sell the
underlying security at a fixed price during the option
period, if the option is exercised. So long as a Fund
remains obligated as a writer of a call option, it
forgoes the opportunity to profit from increases in the
market price of the underlying security above the exercise
price of the option, except insofar as the premium represents
such a profit (and retains the risk of loss should the
value of the underlying security decline).

PURCHASING OPTIONS ON INDIVIDUAL SECURITIES. A
Fund may purchase a put option on an underlying
security owned by the Fund as a defensive technique in
order to protect against an anticipated decline in the
value of the security. A Fund, as the holder of the
put option, may sell the underlying security at the
exercise price regardless of any decline in its market price. In
order for a put option to be profitable, the market
price of the underlying security must decline
sufficiently below the exercise price to cover the
premium and transaction costs that a Fund must pay.
These costs will reduce any profit a Fund might have
realized had it sold the underlying security instead of buying
the put option. The premium paid for the put option would
reduce any capital gain otherwise available for
distribution when the security is eventually sold. The
purchase of put options will not be used by a Fund for
leverage purposes.

A Fund may also purchase a put option on an
underlying security that it owns and at the same time
write a call option on the same security with the same
exercise price and expiration date. Depending on
whether the underlying security appreciates or
depreciates in value, a Fund would sell the underlying
security for the exercise price either upon exercise of the call
option written by it or by exercising the put option held
by it. A Fund would enter into such transactions in
order to profit from the difference between the premium
received by the Fund for the writing of the call option
and the premium paid by the Fund for the purchase of
the put option, thereby increasing the Fund's current
return. A Fund may write (sell) put options on
individual securities only to effect a "closing sale
transaction."

PURCHASING AND WRITING OPTIONS ON SECURITIES
INDICES. A Fund may purchase and sell (write) put and
call options on

securities indices. An index assigns relative values
to the securities included in the index and the index
fluctuates with changes in the market values of the
securities so included. Options on indices are similar
to options on individual securities, except that,
rather than giving the purchaser the right to take
delivery of an individual security at a specified
price, they give the purchaser the right to receive cash. The
amount of cash is equal to the difference between the
closing price of the index and the exercise price of
the option, expressed in dollars, times a specified
multiple (the "multiplier"). The writer of the option
is obligated, in return for the premium received, to
make delivery of this amount.

The multiplier for an index option performs a
function similar to the unit of trading for a stock
option. It determines the total dollar value per
contract of each point in the difference between the
exercise price of an option and the current level of
the underlying index. A multiplier of 100 means that a
one-point difference will yield $100. Options on
different indices have different multipliers.

When a Fund writes a call or put option on a stock
index, the option is "covered", in the case of a call,
or "secured", in the case of a put, if the Fund
maintains in a segregated account with the Custodian
cash or liquid securities equal to the contract value.
A call option is also covered if a Fund holds a call on
the same index as the call written where the exercise
price of the call held is (i) equal to or less than the exercise
price of the call written or (ii) greater than the
exercise price of the call written, provided that the
Fund maintains in a segregated account with the
Custodian the difference in cash or liquid securities.
A put option is also "secured" if a Fund holds a put on
the same index as the put written where the exercise
price of the put held is (i) equal to or greater than
the exercise price of the put written or (ii) less than the
exercise price of the put written, provided that the Fund
maintains in a segregated account with the Custodian the
difference in cash or liquid securities.

the underlying security (or index), in the case of a
put, remains equal to or greater than the exercise
price or, in the case of a call, remains less than or
equal to the exercise price, a Fund will lose its
entire investment in the option. Also, where a put or
call option on a particular security (or index) is purchased
to hedge against price movements in a related security (or
securities), the price of the put or call option may move
more or less than the price of the related security (or
securities). In this regard, there are differences
between the securities and options markets that could
result in an imperfect correlation between these
markets, causing a given transaction not to achieve its
objective.

There can be no assurance that a liquid market
will exist when a Fund seeks to close out an option
position. Furthermore, if trading restrictions or
suspensions are imposed on the options markets, a Fund
may be unable to close out a position. Finally,
trading could be interrupted, for example, because of supply and
demand imbalances arising from a lack of either buyers or
sellers, or the options exchange could suspend trading
after the price has risen or fallen more than the
maximum amount specified by the exchange. Closing
transactions can be made for OTC options only by
negotiating directly with the counterparty or by a
transaction in the secondary market, if any such market exists.
There is no assurance that a Fund will be able to close
out an OTC option position at a favorable price prior
to its expiration. In the event of insolvency of the
counterparty, a Fund might be unable to close out an
OTC option position at any time prior to its
expiration. Although a Fund may be able to offset to some
extent any adverse effects of being unable to liquidate an
option position, the Fund may experience losses in some
cases as a result of such inability.

A Fund's options activities also may have an
impact upon the level of its portfolio turnover and
brokerage commissions. See "Portfolio Turnover."

A Fund's success in using options techniques
depends, among other things, on IMI's ability to
predict accurately the direction and volatility of
price movements in the options and securities markets,
and to select the proper type, time and duration of
options.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS

GENERAL. A Fund may enter into futures contracts
and options on futures contracts for hedging purposes.
A futures contract provides for the future sale by one
party and purchase by another party of a specified
quantity of a commodity at a specified price and time.
When a purchase or sale of a futures contract is made
by a Fund, the Fund is required to deposit with its
custodian (or broker, if legally permitted) a specified
amount of cash or U.S. Government securities ("initial margin").
The margin required for a futures contract is set by the
exchange

on which the contract is traded and may be modified
during the term of the contract. The initial margin is
in the nature of a performance bond or good faith
deposit on the futures contract which is returned to
the Fund upon termination of the contract, assuming all
contractual obligations have been satisfied. A futures
contract held by the Fund is valued daily at the official
settlement price of the exchange on which it is traded. Each
day the Fund pays or receives cash, called "variation
margin," equal to the daily change in value of the
futures contract. This process is known as "marking
to market." Variation margin does not represent a
borrowing or loan by a Fund but is instead a settlement
between the Fund and the broker of the amount one would
owe the other if the futures contract expired. In
computing daily net asset value, the Fund will mark-to-market its
open futures position.

A Fund is also required to deposit and maintain
margin with respect to put and call options on futures
contracts written by it. Such margin deposits will
vary depending on the nature of the underlying futures
contract (and the related initial margin requirements),
the current market value of the option, and other
futures positions held by a Fund.

Although some futures contracts call for making or
taking delivery of the underlying securities, generally
these obligations are closed out prior to delivery of
offsetting purchases or sales of matching futures
contracts (same exchange, underlying security or index,
and delivery month). If an offsetting purchase price
is less than the original sale price, a Fund generally
realizes a capital gain, or if it is more, the Fund
generally realizes a capital loss. Conversely, if an
offsetting sale price is more than the original purchase price, a
Fund generally realizes a capital gain, or if it is
less, the Fund generally realizes a capital loss. The
transaction costs must also be included in these
calculations.

When purchasing a futures contract, a Fund will
maintain with its Custodian (and mark-to-market on a
daily basis) cash, U.S. Government securities, or other
high grade debt securities that, when added to the
amounts deposited with a futures commission merchant
("FCM") as margin, are equal to the market value of the
futures contract. Alternatively, a Fund may "cover"
its position by purchasing a put option on the same futures
contract with a strike price as high as or higher than the
price of the contract held by the Fund.

When selling a futures contact, a Fund will
maintain with its custodian in a segregated account
(and mark-to-market on a daily basis) cash or liquid
securities that, when added to the amounts deposited
with an FCM as margin, are equal to the market value of
the instruments underlying the contract. Alternatively,
a Fund may "cover" its position by owning the instruments
underlying the contract (or, in the case of an index futures
contract, a portfolio with a volatility substantially
similar to

that of the index on which the futures contract is
based), or by holding a call option permitting the Fund
to purchase the same futures contract at a price no
higher than the price of the contract written by that
Fund (or at a higher price if the difference is
maintained in liquid assets with the Fund's
custodian).

When selling a call option on a futures contract,
a Fund will maintain with its custodian in a segregated
account (and mark-to-market on a daily basis) cash or
liquid securities that, when added to the amounts
deposited with an FCM as margin, equal the total market
value of the futures contract underlying the call
option. Alternatively, a Fund may cover its position by
entering into a long position in the same futures contract at a
price no higher than the strike price of the call option,
by owning the instruments underlying the futures
contract, or by holding a separate call option
permitting the Fund to purchase the same futures
contract at a price not higher than the strike price of
the call option sold by that Fund.

When selling a put option on a futures contract, a
Fund will maintain with its custodian (and mark-to-
market on a daily basis) cash, U.S. Government
securities, or other highly liquid debt securities that
equal the purchase price of the futures contract less
any margin on deposit. Alternatively, a Fund may cover the
position either by entering into a short position in the same
futures contract, or by owning a separate put option
permitting it to sell the same futures contract so long
as the strike price of the purchased put option is the
same or higher than the strike price of the put option
sold by the Fund.

The requirements for qualification as a regulated
investment company also may limit the extent to which a
Fund may enter into futures and futures options.

INTEREST RATE FUTURES CONTRACTS. A Fund may
engage in interest rate futures contracts transactions
for hedging purposes only. An interest rate futures
contract is an agreement between parties to buy or sell
a specified debt security at a set price on a future
date. The financial instruments that underlie interest
rate futures contracts include long-term U.S. Treasury
bonds, U.S. Treasury notes, GNMA certificates, and three-month
U.S. Treasury bills. In the case of futures contracts
traded on U.S. exchanges, the exchange itself or an
affiliated clearing corporation assumes the opposite
side of each transaction (i.e., as buyer or seller). A
futures contract may be satisfied or closed out by
delivery or purchase, as the case may be in the cash
financial instrument or by payment of the change in the cash
value of the index. Frequently, using futures to effect a
particular strategy instead of using the underlying or
related security will result in lower transaction costs
being incurred.

A Fund may sell interest rate futures contracts in
order to hedge its portfolio securities whose value may
be sensitive to

changes in interest rates. In addition, a Fund could
purchase and sell these futures contracts in order to
hedge its holdings in certain common stocks (such as
utilities, banks and savings and loans) whose value may
be sensitive to changes in interest rates. A Fund
could sell interest rate futures contracts in
anticipation of or during a market decline to attempt to offset
the decrease in market value of its securities that might
otherwise result. When a Fund is not fully invested in
securities, it could purchase interest rate futures in
order to gain rapid market exposure that may in part or
entirely offset increases in the cost of securities
that it intends to purchase. As such purchases are
made, an equivalent amount of interest rate futures
contracts will be terminated by offsetting sales. In a
substantial majority of these transactions, a Fund would purchase
such securities upon termination of the futures position
whether the futures position results from the purchase
of an interest rate futures contract or the purchase of
a call option on an interest rate futures contract, but
under unusual market conditions, a futures position may
be terminated without the corresponding purchase of
securities.

OPTIONS ON INTEREST RATE FUTURES CONTRACTS. For
hedging purposes, a Fund may also purchase and write
put and call options on interest rate futures contracts
which are traded on a U.S. exchange or board of trade
and sell or purchase such options to terminate an
existing position. Options on interest rate futures
give the purchaser the right (but not the obligation), in return
for the premium paid, to assume a position in an interest
rate futures contract at a specified exercise price at
a time during the period of the option.

Transactions in options on interest rate futures
would enable a Fund to hedge against the possibility
that fluctuations in interest rates and other factors
may result in a general decline in prices of debt
securities owned by the Fund. Assuming that any
decline in the securities being hedged is accomplished
by a rise in interest rates, the purchase of put options and sale
of call options on the futures contracts may generate
gains which can partially offset any decline in the
value of the particular Fund's portfolio securities
which have been hedged. However, if after a Fund
purchases or sells an option on a futures contract, the
value of the securities being hedged moves in the opposite
direction from that contemplated, the Fund may experience
losses in the form of premiums on such options which
would partially offset gains the Fund would have.

FOREIGN CURRENCY FUTURES CONTRACTS AND RELATED
OPTIONS. A Fund may engage in foreign currency futures
contracts and related options transactions for hedging
purposes. A foreign currency futures contract provides
for the future sale by one party and purchase by
another party of a specified quantity of a foreign
currency at a specified price and time.

An option on a foreign currency futures contract
gives the

holder the right, in return for the premium paid, to
assume a long position (call) or short position (put)
in a futures contract at a specified exercise price at
any time during the period of the option. Upon the
exercise of a call option, the holder acquires a long
position in the futures contract and the writer is
assigned the opposite short position. In the case of a
put option, the opposite is true.

A Fund may purchase call and put options on
foreign currencies as a hedge against changes in the
value of the U.S. dollar (or another currency) in
relation to a foreign currency in which portfolio
securities of the Fund may be denominated. A call
option on a foreign currency gives the buyer the right to
buy, and a put option the right to sell, a certain amount of
foreign currency at a specified price during a fixed period
of time. A Fund may invest in options on foreign
currency which are either listed on a domestic
securities exchange or traded on a recognized foreign
exchange.

In those situations where foreign currency options
may not be readily purchased (or where such options may
be deemed illiquid) in the currency in which the hedge
is desired, the hedge may be obtained by purchasing an
option on a "surrogate" currency, i.e., a currency
where there is tangible evidence of a direct
correlation in the trading value of the two currencies. A
surrogate currency's exchange rate movements parallel that of
the primary currency. Surrogate currencies are used to
hedge an illiquid currency risk, when no liquid hedge
instruments exist in world currency markets for the
primary currency.

A Fund will only enter into futures contracts and
futures options which are standardized and traded on a
U.S. or foreign exchange, board of trade, or similar
entity or quoted on an automated quotation system. A
Fund will not enter into a futures contract or purchase
an option thereon if, immediately thereafter, the
aggregate initial margin deposits for futures contracts
held by the Fund plus premiums paid by it for open
futures option positions, less the amount by which any such
positions are "in-the-money," would exceed 5% of the
liquidation value of that Fund's portfolio (or the
Fund's net asset value), after taking into account
unrealized profits and unrealized losses on any such
contracts the Fund has entered into. A call option is
"in-the-money" if the value of the futures contract
that is the subject of the option exceeds the exercise price. A
put option is "in the money" if the exercise price
exceeds the value of the futures contract that is the
subject of the option. For additional information
about margin deposits required with respect to futures
contracts and options thereon, see "Futures Contracts
and Options on Futures Contracts."

invested in the futures contract. There can be no
guarantee that there will be a correlation between
price movements in the hedging vehicle and in a Fund's
portfolio securities being hedged. In addition, there
are significant differences between the securities and
futures markets that could result in an imperfect
correlation between the markets, causing a given hedge
not to achieve its objectives. The degree of imperfection of
correlation depends on circumstances such as variations in
speculative market demand for futures and futures options
on securities, including technical influences in
futures trading and futures options, and differences
between the financial instruments being hedged and the
instruments underlying the standard contracts available
for trading in such respects as interest rate levels,
maturities, and creditworthiness of issuers. A
decision as to whether, when and how to hedge involves
the exercise of skill and judgment, and even a well-
conceived hedge may be unsuccessful to some degree because of
market behavior or unexpected interest rate trends.

Futures exchanges may limit the amount of
fluctuation permitted in certain futures contract
prices during a single trading day. The daily limit
establishes the maximum amount that the price of a
futures contract may vary either up or down from the
previous day's settlement price at the end of the current
trading session. Once the daily limit has been reached in a
futures contract subject to the limit, no more trades may be
made on that day at a price beyond that limit. The
daily limit governs only price movements during a
particular trading day and therefore does not limit
potential losses because the limit may work to prevent
the liquidation of unfavorable positions. For example,
futures prices have occasionally moved to the daily
limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of positions
and subjecting some holders of futures contracts to
substantial losses.

There can be no assurance that a liquid market
will exist at a time when a Fund seeks to close out a
futures or a futures option position, and the Fund
would remain obligated to meet margin requirements
until the position is closed. In addition, there can
be no assurance that an active secondary market will
continue to exist.

Currency futures contracts and options thereon may
be traded on foreign exchanges. Such transactions may
not be regulated as effectively as similar transactions
in the United States; may not involve a clearing
mechanism and related guarantees; and are subject to
the risk of governmental actions affecting trading in,
or the prices of, foreign securities. The value of such position
also could be adversely affected by (i) other complex
foreign political, legal and economic factors, (ii)
lesser availability than in the United States of data
on which to make trading decisions, (iii) delays in a
Fund's ability to act upon economic events occurring in
foreign markets during non business hours in

the United States, (iv) the imposition of different
exercise and settlement terms and procedures and margin
requirements than in the United States, and (v) lesser
trading volume.

SECURITIES INDEX FUTURES CONTRACTS

A Fund may enter into securities index futures
contracts as an efficient means of regulating the
Fund's exposure to the equity markets. An index
futures contract is a contract to buy or sell units of
an index at a specified future date at a price agreed
upon when the contract is made. Entering into a contract
to buy units of an index is commonly referred to as purchasing a
contract or holding a long position in the index.
Entering into a contract to sell units of an index is
commonly referred to as selling a contract or holding a
short position. The value of a unit is the current
value of the stock index. For example, the S&P 500
Index is composed of 500 selected common stocks, most of
which are listed on the New York Stock Exchange (the "Exchange").
The S&P 500 Index assigns relative weightings to the
500 common stocks included in the Index, and the Index
fluctuates with changes in the market values of the
shares of those common stocks. In the case of the S&P
500 Index, contracts are to buy or sell 500 units.
Thus, if the value of the S&P 500 Index were $150, one
contract would be worth $75,000 (500 units x $150).
The index futures contract specifies that no delivery of the
actual securities making up the index will take place.
Instead, settlement in cash must occur upon the
termination of the contract, with the settlement being
the difference between the contract price and the
actual level of the stock index at the expiration of
the contract. For example, if a Fund enters into a
futures contract to buy 500 units of the S&P 500 Index at a
specified future date at a contract price of $150 and the S&P
500 Index is at $154 on that future date, a Fund will
gain $2,000 (500 units x gain of $4). If a Fund enters
into a futures contract to sell 500 units of the stock
index at a specified future date at a contract price of
$150 and the S&P 500 Index is at $154 on that future
date, the Fund will lose $2,000 (500 units x loss of
$4).

RISKS OF SECURITIES INDEX FUTURES. A Fund's
success in using hedging techniques depends, among
other things, on IMI's ability to predict correctly the
direction and volatility of price movements in the
futures and options markets as well as in the
securities markets and to select the proper type, time and
duration of hedges. The skills necessary for successful use of
hedges are different from those used in the selection of
individual stocks.

an index, the correlation probably will not be perfect.
Consequently, a Fund will bear the risk that the prices
of the securities being hedged will not move in the
same amount as the hedging instrument. This risk will
increase as the composition of a Fund's portfolio
diverges from the composition of the hedging
instrument.

Although a Fund intends to establish positions in
these instruments only when there appears to be an
active market, there is no assurance that a liquid
market will exist at a time when the Fund seeks to
close a particular option or futures position. Trading
could be interrupted, for example, because of supply and
demand imbalances arising from a lack of either buyers or
sellers. In addition, the futures exchanges may suspend trading
after the price has risen or fallen more than the
maximum amount specified by the exchange. In some
cases, a Fund may experience losses as a result of its
inability to close out a position, and it may have to
liquidate other investments to meet its cash needs.

Although some index futures contracts call for
making or taking delivery of the underlying securities,
generally these obligations are closed out prior to
delivery by offsetting purchases or sales of matching
futures contracts (same exchange, underlying security
or index, and delivery month). If an offsetting
purchase price is less than the original sale price, a
Fund generally realizes a capital gain, or if it is more, the
Fund generally realizes a capital loss. Conversely, if an
offsetting sale price is more than the original purchase
price, a Fund generally realizes a capital gain, or if
it is less, the Fund generally realizes a capital loss.
The transaction costs must also be included in these
calculations.

A Fund will only enter into index futures
contracts or futures options that are standardized and
traded on a U.S. or foreign exchange or board of trade,
or similar entity, or quoted on an automated quotation
system. A Fund will use futures contracts and related
options only for "bona fide hedging" purposes, as such
term is defined in applicable regulations of the CFTC.

When purchasing an index futures contract, a Fund
will maintain with its custodian (and mark-to-market on
a daily basis) cash, U.S. Government securities, or
other highly liquid debt securities that, when added to
the amounts deposited with a futures commission
merchant ("FCM") as margin, are equal to the market
value of the futures contract. Alternatively, a Fund may
"cover" its position by purchasing a put option on the same
futures contract with a strike price as high as or higher
than the price of the contract held by a Fund.

When selling an index futures contract, a Fund
will maintain with its custodian (and mark-to-market on
a daily basis) liquid assets that, when added to the
amounts deposited with an FCM as

margin, are equal to the market value of the
instruments underlying the contract. Alternatively, a
Fund may "cover" its position by owning the instruments
underlying the contract (or, in the case of an index
futures contract, a portfolio with a volatility
substantially similar to that of the index on which the
futures contract is based), or by holding a call option
permitting a Fund to purchase the same futures contract at a
price no higher than the price of the contract written by the
Fund (or at a higher price if the difference is
maintained in liquid assets with the Fund's custodian).

COMBINED TRANSACTIONS. A Fund may enter into
multiple transactions, including multiple options
transactions, multiple futures transactions, multiple
currency transactions (including forward currency
contracts) and multiple interest rate transactions and
any combination of futures, options, currency and
interest rate transactions ("component" transactions),
instead of a single transaction, as part of a single or combined
strategy when, in the opinion of IMI, it is in the best
interests of a Fund to do so. A combined transaction
will usually contain elements of risk that are present
in each of its component transactions. Although
combined transactions are normally entered into based
on IMI's judgment that the combined strategies will
reduce risk or otherwise more effectively achieve the
desired portfolio management goal, it is possible that the
combination will instead increase such risks or hinder
achievement of the management objective.

INVESTMENT-GRADE DEBT SECURITIES

Bonds rated Aaa by Moody's and AAA by S&P are
judged to be of the best quality (i.e., capacity to pay
interest and repay principal is extremely strong).
Bonds rated Aa/AA are considered to be of high quality
(i.e., capacity to pay interest and repay principal is
very strong and differs from the highest rated issues
only to a small degree). Bonds rated A are viewed as
having many favorable investment attributes, but elements may be
present that suggest a susceptibility to the adverse
effects of changes in circumstances and economic
conditions than debt in higher rated categories. Bonds
rated Baa/BBB (considered by Moody's to be "medium
grade" obligations) are considered to have an adequate
capacity to pay interest and repay principal, but
certain protective elements may be lacking (i.e., such bonds lack
outstanding investment characteristics and have some
speculative characteristics). A Fund may invest in
debt securities that are given an investment-grade
rating by Moody's or S&P, and may also invest in
unrated debt securities that are considered by IMI to
be of comparable quality.

LOW-RATED DEBT SECURITIES

Ivy Bond Fund, Ivy Growth Fund and Ivy Growth with
Income Fund may invest in corporate debt securities
rated Ba or lower by Moody's, or BB or lower by S&P. A
Fund will not, however, invest

in securities that, at the time of investment, are
rated lower than C by either Moody's or S&P.
Securities rated lower than Baa or BBB (and comparable
unrated securities) are commonly referred to as "high
yield" or "junk" bonds and are considered to be
predominantly speculative with respect to the issuer's continuing
ability to meet principal and interest payments. The
lower the ratings of corporate debt securities, the
more their risks render them like equity securities.
(See Appendix A for a more complete description of the
ratings assigned by Moody's and S&P and their
respective characteristics.)

While IMI may refer to ratings issued by
established credit rating agencies, it is not IMI's
policy to rely exclusively on such ratings, but rather
to supplement such ratings with its own independent and
ongoing review of credit quality. A Fund's achievement
of its investment objective may, to the extent of its
investment in low-rated debt securities, be more dependent upon
IMI's credit analysis than would be the case if the Funds
were investing in higher quality bonds. Should the
rating of a portfolio security be downgraded, IMI will
determine whether it is in the relevant Fund's best
interest to retain or dispose of the security.
However, should any individual bond held by a Fund be
downgraded below a rating of C, IMI currently intends to
dispose of such bond based on then existing market conditions.

The secondary market on which low-rated debt
securities are traded may be less liquid than the
market for higher grade bonds. Less liquidity in the
secondary trading market could adversely affect the
price at which a Fund could sell a low-rated debt
securities, and cause large fluctuations in the daily net asset
value of the Fund's shares. Adverse publicity and
investor perceptions, whether or not based on
fundamental analysis, may decrease the value and
liquidity of low-rated debt securities, especially in a
thinly traded market. When secondary markets for high
yield securities become relatively less liquid, it may be
more difficult to value the securities, requiring additional
research and elements of judgment. Prices for low-rated
debt securities may be affected by legislative and
regulatory developments. (For example, Federal rules
require savings and loan institutions to reduce
gradually their holdings of this type of security).

INVESTMENT RESTRICTIONS

A Fund's investment objective, as set forth in the
Prospectus under "Investment Objectives and Policies,"
and the investment restrictions set forth below are
fundamental policies of the Fund and may not be changed
with respect to that Fund without the approval of a
majority (as defined in the 1940 Act) of the
outstanding voting shares of that Fund. Under these
restrictions, each of Ivy Emerging Growth Fund, Ivy Growth Fund
and Ivy Growth with Income Fund may not:

(i) purchase or sell real estate or
commodities and

commodity contracts;

(ii) purchase securities on margin;

(iii) sell securities short;

(iv) participate in an underwriting or
selling group in connection with the
public distribution of securities except
for its own capital stock;

(v) purchase from or sell to any of its
officers or trustees, or firms of which
any of them are members or which they
control, any securities (other than
capital stock of the Fund), but such
persons or firms may act as brokers for the Fund
for customary commissions to the extent permitted
by the Investment Company Act of 1940;

(vi) make an investment in securities of
companies in any one industry (except
obligations of domestic banks or the
U.S. Government, its agencies,
authorities, or instrumentalities) if such
investment would cause investments in such
industry to exceed 25% of the market value of the
Fund's total assets at the time of such
investment;

(vii) issue senior securities, except as
appropriate to evidence indebtedness
which it is permitted to incur, and
except to the extent that shares of the
separate classes or series of the Trust may be
deemed to be senior securities; provided that
collateral arrangements with respect to currency-
related contracts, futures contracts, options or
other permitted investments, including
deposits of initial and variation
margin, are not considered to be the
issuance of senior securities for
purposes of this restriction;

(viii) lend any funds or other assets, except
that this restriction shall not prohibit
(a) the entry into repurchase agreement
or (b) the purchase of publicly
distributed bonds, debentures and other
securities of a similar type, or privately placed
municipal or corporate bonds, debentures and other
securities of a type customarily purchased by
institutional investors or publicly traded
in the securities markets;

(ix) borrow money, except for temporary
purposes where investment transactions
might advantageously require it. Any
such loan may not be for a period in
excess of 60 days, and the aggregate amount of
all outstanding loans may not at any time exceed

10% of the value of the total assets of
the Fund at the time any such loan is
made.

Under the 1940 Act, a Fund is permitted, subject
to each Fund's investment restrictions, to borrow money
only from banks. The Trust has no current intention of
borrowing amounts in excess of 5% of each the Fund's
assets. Each of Ivy Emerging Growth Fund, Ivy Growth
Fund and Ivy Growth with Income Fund will continue to
interpret fundamental investment restriction (i) above
to prohibit investment in real estate limited partnership
interests; this restriction shall not, however, prohibit
investment in readily marketable securities of companies that
invest in real estate or interests therein, including
REITs.

Further, as a matter of fundamental policy, each of Ivy
Growth Fund and Ivy Growth with Income Fund may not:

(i) invest more than 5% of the value of its
total assets in the securities of any
one issuer (except obligations of
domestic banks or the U.S. Government,
its agencies, authorities and
instrumentalities);

(ii) purchase the securities of any other
open-end investment company, except as
part of a plan of merger or
consolidation; or

(iii) hold more than 10% of the voting
securities of any one issuer (except
obligations of domestic banks or the
U.S. Government, its agencies, authorities
and instrumentalities).

Further, as a matter of fundamental policy, each of Ivy
Bond Fund and Ivy Emerging Growth Fund may not:

(i) purchase securities of any one issuer
(except U.S. Government securities) if
as a result more than 5% of the Fund's
total assets would be invested in such
issuer or the Fund would own or hold more
than 10% of the outstanding voting securities of
that issuer; provided, however, that up to 25% of
the value of the Fund's total assets may be
invested without regard to these limitations.

Further, as a matter of fundamental policy, Ivy Bond
Fund may not:

(i) Make investments in securities for the
purpose of exercising control over or
management of the issuer;

(ii) Borrow amounts in excess of 10% of its
total assets, taken at the lower of cost
or market value, and then only from
banks as a temporary

measure for extraordinary or emergency
purposes.

(iii) Purchase the securities of issuers
conducting their principal business
activities in the same industry if
immediately after such purchase the
value of the Fund's investments in such industry
would exceed 25% of the value of the total assets
of the Fund;

(iv) Act as an underwriter of securities;

(v) Issue senior securities, except insofar
as the Fund may be deemed to have issued
a senior security in connection with any
repurchase agreement or any permitted
borrowing.

(vi) Invest in real estate, real estate
mortgage loans, commodities, commodity
futures contracts or interests in oil,
gas and/or mineral exploration or
development programs, although a Fund may
purchase and sell (a) securities which are secured
by real estate, (b) securities of issuers which
invest or deal in real estate, and (c) futures
contracts as described in a Fund's
Prospectus;

(vii) Participate on a joint or a joint and
several basis in any trading account in
securities. The "bunching" of orders of
the Fund--or of the Fund and of other
accounts under the investment management
of the persons rendering investment
advice to the Fund--for the sale or purchase of
portfolio securities shall not be considered
participation in a joint securities trading
account;

(viii) Purchase securities on margin, except
such short- term credits as are necessary
for the clearance of transactions. The
deposit or payment by a Fund of initial
or variation margin in connection with
futures contracts or related options transactions
is not considered the purchase of a security on
margin;

(ix) Make loans, except that this restriction
shall not prohibit (a) the purchase and
holding of a portion of an issue of
publicly distributed debt securities,
(b) the lending of portfolio securities
(provided that the loan is secured
continuously by collateral consisting of U.S.
Government securities or cash or cash equivalents
maintained on daily marked-to-market basis in an
amount at least equal to the current market
value of the securities loaned), or (c)
entry into repurchase agreements with
banks or broker

dealers;

(x) Mortgage, pledge, hypothecate or in any
manner transfer, as security for
indebtedness, any securities owned or
held by the Fund (except as may be
necessary in connection with permitted
borrowings and then not in excess of 20% of the
Fund's total assets); provided, however, this does
not prohibit escrow, collateral or margin
arrangements in connection with its use of
options, short sales, futures contracts and
options on future contracts; or

(xi) Make short sales of securities or
maintain a short position.

ADDITIONAL RESTRICTIONS

(i) purchase any security if, as a result,
the Fund would then have more than 5% of
its total assets (taken at current
value) invested in securities of
companies (including predecessors) less than three
years old.

Further, as a matter of non-fundamental policy, each of
Ivy Emerging Growth Fund, Ivy Growth Fund and Ivy
Growth with Income Fund may not:

(i) invest in oil, gas or other mineral
leases or exploration or development
programs;

(ii) engage in the purchase and sale of puts,
calls, straddles or spreads (except to
the extent described in the Prospectus
and in this SAI);

(iii) invest in companies for the purpose of
exercising control of management; or

(iv) invest more than 5% of its total assets
in warrants, valued at the lower of cost
or market, or more than 2% of its total
assets in warrants, so valued, which are
not listed on either the New York or
American Stock Exchanges.

Further, as a matter of non-fundamental policy, each of
Ivy Bond Fund, Ivy Emerging Growth Fund and Ivy Growth
with Income Fund may not:

(i) purchase or retain securities of any
company if officers and Trustees of the
Trust and officers and directors of Ivy
Management, Inc. (the Manager, with
respect to Ivy Bond Fund), MIMI or
Mackenzie Financial Corporation who individually
own more than 1/2 of 1% of the securities of that
company together own beneficially more than 5% of
such securities.

Further, as a matter of non-fundamental policy, each of
Ivy Growth Fund and Ivy Growth with Income Fund may
not:

(i) invest more than 5% of the value of its
total assets in the securities of
issuers which are not readily
marketable.

Further, as a matter of non-fundamental policy, each of
Ivy Bond Fund and Ivy Emerging Growth Fund may not:

(i) invest more than 10% of its net assets
taken at market value at the time of
investment in "illiquid securities."
Illiquid securities may include
securities subject to legal or contractual
restrictions on resale (including private
placements), repurchase agreements maturing in
more than seven days, certain options traded over
the counter that the Fund has purchased,
securities being used to cover certain options
that a fund has written, securities for which
market quotations are not readily
available, or other securities which
legally or in IMI's opinion, subject to
the Board's supervision, may be deemed
illiquid, but shall not include any
instrument that, due to the existence of a trading
market, to the Fund's compliance with certain
conditions intended to provide liquidity, or to
other factors, is liquid.

Further, as a matter of non-fundamental policy, Ivy
Emerging Growth Fund may not:

(i) purchase securities of other investment
companies, except in connection with a
merger, consolidation or sale of assets,
and except that it may purchase shares
of other investment companies subject to
such restrictions as may be imposed by the 1940
Act and rules thereunder or by any state in which
its shares are registered.

Further, as a matter of non-fundamental policy, Ivy
Bond Fund may not:

(i) purchase or sell real estate limited
partnership interests; or

(ii) purchase or sell interests in oil, gas
or mineral leases (other than securities
of companies that invest in or sponsor
such programs).

Whenever an investment objective, policy or
restriction set forth in the Prospectus or this SAI
states a maximum percentage of assets that may be
invested in any security or other asset or describes a
policy regarding quality standards, such percentage
limitation or standard shall, unless otherwise indicated, apply
to a Fund only at the time a transaction is entered into.
Accordingly, if a percentage limitation is adhered to at
the time of investment, a later increase or decrease in
the percentage which results from circumstances not
involving any affirmative action by a Fund, such as a
change in market conditions or a change in the Fund's
asset level or other circumstances beyond that Fund's
control, will not be considered a violation.

ADDITIONAL RIGHTS AND PRIVILEGES

The Trust offers, and (except as noted below)
bears the cost of providing, to investors the following
rights and privileges. The Trust reserves the right to
amend or terminate any one or more of these rights and
privileges. Notice of amendments to or terminations of
rights and privileges will be provided to shareholders
in accordance with applicable law.

Certain of the rights and privileges described
below refer to funds, other than the Funds, whose
shares are also distributed by Ivy Mackenzie
Distributors, Inc. ("IMDI")(formerly known as Mackenzie
Ivy Funds Distribution, Inc.). These funds are: Ivy
Canada Fund, Ivy China Region Fund, Ivy Global Fund, Ivy
International Fund, Ivy Latin America Strategy Fund, Ivy New
Century Fund, Ivy International Bond Fund, Ivy Global Science
& Technology Fund, Ivy Global Natural Resources Fund,
Ivy Asia Pacific Fund, Ivy International Small
Companies Fund, Ivy International Fund II (expected
effective date of May 13, 1997), Ivy Pan-Europe Fund
(expected effective date of May 13, 1997) and Ivy Money
Market Fund (the other fourteen series of the Trust);
and Mackenzie California Municipal Fund, Mackenzie Limited Term
Municipal Fund, Mackenzie National Municipal Fund and
Mackenzie New York Municipal Fund (the four series of
Mackenzie Series Trust) (collectively, with the Funds,
the "Ivy Mackenzie Funds"). Shareholders should obtain
a current prospectus before exercising any right or
privilege that may relate to these funds.

AUTOMATIC INVESTMENT METHOD

The Automatic Investment Method, which enables a
Fund shareholder to have specified amounts
automatically drawn each month from his or her bank for
investment in Fund shares, is available for Class A,
Class B and Class C shares, is available for all
classes of shares, except Class I. The minimum initial
and subsequent investment under this method is $50 per month,
(except in the case of a tax qualified retirement plan for
which

the minimum initial and subsequent investment is $25
per month). A shareholder may terminate the Automatic
Investment Method at any time upon delivery to Ivy
Mackenzie Services Corp. ("IMSC") of telephone
instructions or written notice. See "Automatic
Investment Method" in the Prospectus. To begin the plan,
complete Sections 6A and 7B of the

EXCHANGE OF SHARES

As described in the Prospectus, shareholders of
each Fund have an exchange privilege with certain other
Ivy Mackenzie Funds (except Ivy International Fund
unless you have an existing Ivy International Fund
account). Before effecting an exchange, shareholders
of each Fund should obtain and read the currently
effective prospectus for the Ivy or Mackenzie Fund into which the
exchange is to be made.

INITIAL SALES CHARGE SHARES. Class A shareholders
may exchange their Class A shares ("outstanding Class A
shares") for Class A shares of another Ivy or Mackenzie
Fund ("new Class A Shares") on the basis of the
relative net asset value per Class A share, plus an
amount equal to the difference, if any, between the
sales charge previously paid on the outstanding Class A
shares and the sales charge payable at the time of the exchange
on the new Class A shares. (The additional sales charge
will be waived for Class A shares that have been
invested for a period of 12 months or longer.) Class A
shareholders may also exchange their shares for shares
of Ivy Money Market Fund (no initial sales charge will
be assessed at the time of such an exchange).

CONTINGENT DEFERRED SALES CHARGE SHARES. CLASS A:
Class A shareholders may exchange their Class A shares
that are subject to a contingent deferred sales charge
("CDSC"), as described in the Prospectus ("outstanding
Class A shares"), for Class A shares of another Ivy or
Mackenzie Fund ("new Class A shares") on the basis of
the relative net asset value per Class A share, without
the payment of any CDSC that would otherwise be due upon the
redemption of the outstanding Class A shares. Class A
shareholders of a Fund exercising the exchange privilege will
continue to be subject to that Fund's CDSC period
following an exchange if such period is longer than the
CDSC period, if any, applicable to the new Class A
shares.

For purposes of computing the CDSC that may be
payable upon the redemption of the new Class A shares,
the holding period of the outstanding Class A shares is
"tacked" onto the holding period of the new Class A
shares.

shareholders of a Fund exercising the exchange
privilege will continue to be subject to that Fund's
CDSC schedule (or period) following an exchange if such
schedule is higher (or such period is longer) than the
CDSC schedule (or period) applicable to the new Class B
shares.

Class B shares of a Fund acquired through an
exchange of Class B shares of another Ivy or Mackenzie
Fund will be subject to that Fund's CDSC schedule (or
period) if such schedule is higher (or such period is
longer) than the CDSC schedule (or period) applicable
to the Ivy or Mackenzie Fund from which the exchange
was made.

For purposes of both the conversion feature and
computing the CDSC that may be payable upon the
redemption of the new Class B shares (prior to
conversion), the holding period of the outstanding
Class B shares is "tacked" onto the holding period of
the new Class B shares.

The following CDSC table ("Table 1") applies to
Class B shares of Ivy Global Fund, Ivy Growth Fund, Ivy
Growth with Income Fund, Ivy Emerging Growth Fund, Ivy
International Fund, Ivy China Region Fund, Ivy Latin
America Strategy Fund, Ivy New Century Fund, Ivy
International Bond Fund, Ivy Bond Fund, Ivy Canada
Fund, Ivy Global Science& Technology Fund, Ivy Global
Natural Resources Fund,Ivy Asia Pacific Fund, Ivy International
Small Companies Fund, Ivy International Fund II (expected
effective date of May 13, 1997), Ivy Pan-Europe Fund
(expected effective date of May 13, 1997), Mackenzie
California Municipal Fund, Mackenzie National Municipal
Fund, and Mackenzie New York Municipal Fund ("Table 1
Funds"):

CONTINGENT DEFERRED
SALES CHARGE AS A
PERCENTAGE OF DOLLAR
AMOUNT SUBJECT TO YEAR SINCE PURCHASE
CHARGE

First 5%
Second 4%
Third 3%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh and thereafter 0%

The following CDSC table ("Table 2") applies to
Class B shares of Mackenzie Limited Term Municipal Fund
("Table 2 Funds"):

CONTINGENT DEFERRED
SALES CHARGE AS A
PERCENTAGE OF DOLLAR
AMOUNT SUBJECT TO YEAR SINCE PURCHASE
CHARGE

First 3%
Second 2.5%
Third 2%
Fourth 1.5%
Fifth 1%
Sixth and thereafter 0%

The CDSC schedule for Table 1 Funds is higher (and
the period is longer) than the CDSC schedule (and
period) for Table 2 Funds.

If a shareholder exchanges Class B shares of a
Table 1 Fund for Class B shares of a Table 2 Fund,
Table 1 will continue to apply to the Class B shares
following the exchange. For example, an investor may
decide to exchange Class B shares of a Table 1 Fund
("outstanding Class B shares") for Class B shares of a Table
2 Fund ("new Class B shares") after having held the
outstanding Class B shares for two years. The 4% CDSC
that generally would apply to a redemption of
outstanding Class B shares held for two years would not
be deducted at the time of the exchange. If, three
years later, the investor redeems the new Class B shares, a
2% CDSC will be assessed upon the redemption because by
"tacking" the two year holding period of the
outstanding Class B shares onto the three year holding
period of the new Class B shares, the investor will be
deemed to have held the new Class B shares for five
years.

If a shareholder exchanges Class B shares of a
Table 2 Fund for Class B shares of a Table 1 Fund,
Table 1 will apply to the Class B shares following the
exchange. For example, an investor may decide to
exchange Class B shares of a Table 2 Fund ("outstanding
Class B shares") for Class B shares of a Table 1 Fund
("new Class B shares") after having held the outstanding
Class B shares for two years. The 2.5% CDSC that generally would
apply to a redemption of outstanding Class B shares held
for two years would not be deducted at the time of the
exchange. If, three years later, the investor redeems
the new Class B shares, a 2% CDSC will be assessed upon
the redemption because by "tacking" the two year
holding period of the outstanding Class B shares onto
the three year holding period of the new Class B shares, the
investor will be deemed to have held the new Class B shares
for five years.

CLASS C. Class C shareholders may exchange their
Class C shares ("outstanding Class C shares") for Class
C shares of another Ivy or Mackenzie Fund ("new Class C
shares") on the basis of the relative net asset value
per Class C share, without the payment of any CDSC that
would otherwise be due upon redemption. (Class C
shares are subject to a CDSC of 1% if redeemed within
one year of the date of purchase.)

CLASS I. Class I shareholders may exchange their
Class I shares for Class I shares of another Ivy Fund
on the basis of the relative net asset value per Class
I share.

ALL CLASSES: The minimum amount which may be
exchanged into an Ivy Mackenzie Fund in which shares
are not already held is $1,000 ($5,000,000 in the case
of Class I of Ivy Bond Fund, Ivy Global Science &
Technology Fund, Ivy International Fund, Ivy
International Fund II (expected effective date of May 13, 1997)
and Ivy International Small Companies Fund (generally
referred to herein as the "Class I Funds")). No
exchange out of a Fund (other than by a complete
exchange of all Fund shares) may be made if it would
reduce the shareholder's interest in that Fund to less
than $1,000 ($5,000,000 in the case of Class I shares of
the Class I Funds.)

Each exchange will be made on the basis of the
relative net asset values per share of each fund of the
Ivy Mackenzie Funds next computed following receipt by
IMSC of telephone instructions by IMSC or a properly
executed request. Exchanges, whether written or
telephonic, must be received by IMSC by the close of
regular trading on the Exchange (normally 4:00 p.m., eastern
time) to receive the price computed on the day of receipt.
Exchange requests received after that time will receive
the price next determined following receipt of the
request. The exchange privilege may be modified or
terminated at any time, upon at least 60 days' notice
to the extent required by applicable law. See
"Redemptions."

An exchange of shares between any of the Ivy
Mackenzie Funds will result in a taxable gain or loss.
Generally, this will be a capital gain or loss (long-
term or short-term, depending on the holding period of
the shares) in the amount of the difference between the
net asset value of the shares surrendered and the
shareholder's tax basis for those shares. However, in certain
circumstances, shareholders will be ineligible to take
sales charges into account in computing taxable gain or
loss on an exchange. See "Taxation."

With limited exceptions, gain realized by a tax-
deferred retirement plan will not be taxable to the
plan and will not be taxed to the participant until
distribution. Each investor should consult his or her
tax adviser regarding the tax consequences of an
exchange transaction.

LETTER OF INTENT

initial purchase, in which case the Letter of Intent
will be back dated. A shareholder may include, as an
accumulation credit, the value (at the applicable
offering price) of all Class A shares of Ivy Global
Fund, Ivy Growth Fund, Ivy Growth with Income Fund, Ivy
Emerging Growth Fund, Ivy International Fund, Ivy
International Bond Fund, Ivy Bond Fund, Ivy Global Science &
Technology Fund, Ivy Global Natural Resources Fund, Ivy
International Small Companies Fund, Ivy Asia Pacific Fund, Ivy
International Fund II (expected effective date of May
13, 1997), Ivy Pan-Europe Fund (expected effective date
of May 13, 1997), Ivy Latin America Strategy Fund, Ivy
China Region Fund, Ivy New Century Fund, Mackenzie
National Municipal Fund, Mackenzie Limited Term
Municipal Fund, Mackenzie California Municipal Fund and
Mackenzie New York Municipal Fund (and shares that have been
exchanged into Ivy Money Market Fund from any of the other
funds in the Ivy Mackenzie Funds) held of record by him
or her as of the date of his or her Letter of Intent.
During the term of the Letter of Intent, the Transfer
Agent will hold Class A shares representing 5% of the
indicated amount (less any accumulation credit value)
in escrow. The escrowed Class A shares will be
released when the full indicated amount has been purchased. If
the full indicated amount is not purchased during the term
of the Letter of Intent, the investor is required to
pay IMDI an amount equal to the difference between the
dollar amount of sales charge that he or she has paid
and that which he or she would have paid on his or her
aggregate purchases if the total of such purchases had
been made at a single time. Such payment will be made by an
automatic liquidation of Class A shares in the escrow
account. A Letter of Intent does not obligate the
investor to buy or the Trust to sell the indicated
amount of Class A shares, and the investor should read
carefully all the provisions of such letter before
signing.

RETIREMENT PLANS

Shares may be purchased in connection with several
types of tax-deferred retirement plans. Shares of more
than one fund distributed by IMDI may be purchased in a
single application establishing a single plan account,
and shares held in such an account may be exchanged
among the funds in the Ivy Mackenzie Funds in
accordance with the terms of the applicable plan and the
exchange privilege available to all shareholders. Initial and
subsequent purchase payments in connection with tax-
deferred retirement plans must be at least $25 per
participant.

The following fees will be charged to individual
shareholder accounts as described in the retirement
prototype plan document:

Retirement Plan New Account Fee no fee
Retirement Plan Annual Maintenance Fee $10.00 per
account

For shareholders whose retirement accounts are
diversified across several funds of the Ivy Mackenzie
Funds, the annual maintenance fee will be limited to
not more than $20.

The following discussion describes the tax
treatment of certain tax-deferred retirement plans
under current Federal income tax law. State income tax
consequences may vary. An individual considering the
establishment of a retirement plan should consult with
an attorney and/or an accountant with respect to the
terms and tax aspects of the plan.

INDIVIDUAL RETIREMENT ACCOUNTS: Shares of the
Trust may be used as a funding medium for an Individual
Retirement Account ("IRA"). Eligible individuals may
establish an IRA by adopting a model custodial account
available from IMSC, who may impose a charge for
establishing the account. Individuals should consult
their tax advisers before investing IRA assets in a Fund (which
primarily distributes exempt-interest dividends).

An individual who has not reached age 70-1/2 and
who receives compensation or earned income is eligible
to contribute to an IRA, whether or not he or she is an
active participant in a retirement plan. An individual
who receives a distribution from another IRA, a
qualified retirement plan, a qualified annuity plan or
a tax-sheltered annuity or custodial account ("403(b)
plan") that qualifies for "rollover" treatment is also eligible
to establish an IRA by rolling over the distribution
either directly or within 60 days after its receipt.
Tax advice should be obtained in connection with
planning a rollover contribution to an IRA.

In general, an eligible individual may contribute
up to the lesser of $2,000 or 100% of his or her
compensation or earned income to an IRA each year. If
a husband and wife are both employed, and both are
under age 70-1/2, each may set up his or her own IRA
within these limits. If both earn at least $2,000 per
year, the maximum potential contribution is $4,000 per year
for both. For years after 1996, the result is similar even if
one spouse has no earned income; if the joint earned
income of the spouses is at least $4,000, a
contribution of up to $2,000 may be made to each
spouse's IRA. For years before 1997, however, if one
spouse has (or elects to be treated as having) no
earned income for IRA purposes for a year, the working spouse may
contribute up to the lesser of $2,250 or 100% of his or
her compensation or earned income for the year to IRAs
for both spouses, provided that no more than $2,000 is
contributed to the IRA of one spouse. Rollover
contributions are not subject to these limits.

full deduction is only available if he or she has
adjusted gross income that is less than a specified
level ($40,000 for married couples filing a joint
return, $25,000 for single individuals, and $0 for a
married individual filing a separate return). The
deduction is phased out ratably for active participants with
adjusted gross income between certain levels ($40,000 and
$50,000 for married individuals filing a joint return,
$25,000 and $35,000 for single individuals, and $0 and
$10,000 for married individuals filing separate
returns). Individuals who are active participants with
income above the specified phase-out level may not
deduct their IRA contributions. Rollover contributions are
not includible in income for Federal income tax purposes and
therefore are not deductible from it.

Generally, earnings on an IRA are not subject to
current Federal income tax until distributed.
Distributions attributable to tax-deductible
contributions and to IRA earnings are taxed as ordinary
income. Distributions of non-deductible contributions
are not subject to Federal income tax. In general, distributions
from an IRA to an individual before he or she reaches
age 59-1/2 are subject to a nondeductible penalty tax
equal to 10% of the taxable amount of the distribution.
The 10% penalty tax does not apply to amounts withdrawn
from an IRA after the individual reaches age 59-1/2,
becomes disabled or dies, or if withdrawn in the form
of substantially equal payments over the life or life
expectancy of the individual and his or her designated benefi-
ciary, if any, or rolled over into another IRA, or, for
years after 1996, amounts withdrawn and used to pay for
deductible medical expenses and amounts withdrawn by
certain unemployed individuals not in excess of amounts
paid for certain health insurance premiums.
Distributions must begin to be withdrawn not later than
April 1 of the calendar year following the calendar
year in which the individual reaches age 70-1/2. Failure to take
certain minimum required distributions will result in
the imposition of a 50% non-deductible penalty tax.
Extremely large distributions in any one year (other
than 1997, 1998 or 1999) from an IRA (or from an IRA
and other retirement plans) may also result in a
penalty tax.

QUALIFIED PLANS: For those self-employed
individuals who wish to purchase shares of one or more
of the funds in the Ivy Mackenzie Funds through a
qualified retirement plan, a Custodial Agreement and a
Retirement Plan are available from IMSC. The
Retirement Plan may be adopted as a profit sharing plan or a
money purchase pension plan. A profit sharing plan permits
an annual contribution to be made in an amount
determined each year by the self-employed individual
within certain limits prescribed by law. A money
purchase pension plan requires annual contributions at
the level specified in the Custodial Agreement. There
is no set-up fee for qualified plans and the annual
maintenance fee is $20.00 per account.

In general, if a self-employed individual has any
common law employees, employees who have met certain
minimum age and service

requirements must be covered by the Retirement Plan. A
self- employed individual generally must contribute the
same percentage of income for common law employees as
for himself or herself.

A self-employed individual may contribute up to
the lesser of $30,000 or 25% of compensation or earned
income to a money purchase pension plan or to a
combination profit sharing and money purchase pension
plan arrangement each year on behalf of each
participant. To be deductible, total contributions to a
profit sharing plan generally may not exceed 15% of the total
compensation or earned income of all participants in the
plan, and total contributions to a combination money
purchase-profit sharing arrangement generally may not
exceed 25% of the total compensation or earned income
of all participants. The amount of compensation or
earned income of any one participant that may be
included in computing the deduction is limited (generally to
$150,000 for benefits accruing in plan years beginning after
1993, with annual inflation adjustments). A self-
employed individual's contributions to a retirement
plan on his or her own behalf must be deducted in
computing his or her earned income.

Corporate employers may also adopt the Custodial
Agreement and Retirement Plan for the benefit of their
eligible employees. Similar contribution and deduction
rules apply to corporate employers.

Distributions from the Retirement Plan generally
are made after a participant's separation from service.
A 10% penalty tax generally applies to distributions to
an individual before he or she reaches age 59-1/2,
unless the individual (1) has reached age 55 and
separated from service; (2) dies; (3) becomes disabled;
(4) uses the withdrawal to pay tax-deductible medical expenses;
(5) takes the withdrawal as part of a series of
substantially equal payments over his or her life
expectancy or the joint life expectancy of himself or
herself and a designated beneficiary; or (6) rolls over
the distribution.

The Transfer Agent will arrange for Investors Bank
& Trust to furnish custodial services to the employer
and any participating employees.

DEFERRED COMPENSATION FOR PUBLIC SCHOOLS AND
CHARITABLE ORGANIZATIONS ("403(B)(7) ACCOUNT"):
Section 403(b)(7) of the Internal Revenue Code of 1986,
as amended (the "Code") permits public school systems
and certain charitable organizations to use mutual fund
shares held in a custodial account to fund deferred
compensation arrangements with their employees. A custodial
account agreement is available for those employers whose
employees wish to purchase shares of the Trust in conjunction
with such an arrangement. The sales charge for
purchases of less than $10,000 of Class A shares is set
forth under "Retirement Plans" in the Prospectus.
Sales charges for purchases of $10,000 or more of Class
A shares are the same as those set forth under "Initial
Sales Charge Alternative -- Class A Shares" in the

Prospectus. The special application for a 403(b)(7)
Account is available from IMSC.

Distributions from the 403(b)(7) Account may be
made only following death, disability, separation from
service, attainment of age 59-1/2, or incurring a
financial hardship. A 10% penalty tax generally
applies to distributions to an individual before he or
she reaches age 59-1/2, unless the individual (1) has reached
age 55 and separated from service; (2) dies or becomes
disabled; (3) uses the withdrawal to pay tax-deductible
medical expenses; (4) takes the withdrawal as part of a
series of substantially equal payments over his or her
life expectancy or the joint life expectancy of himself
or herself and a designated beneficiary; or (5) rolls
over the distribution. There is no set-up fee for
403(b)(7) Accounts and the annual maintenance fee is $20.00 per
account.

SIMPLIFIED EMPLOYEE PENSION ("SEP") IRAS: An
employer may deduct contributions to a SEP up to the
lesser of $30,000 or 15% of compensation. SEP accounts
generally are subject to all rules applicable to IRA
accounts, except the deduction limits, and are subject
to certain employee participation requirements. No new
salary reduction SEPs ("SARSEPs") may be established after 1996,
but existing SARSEPs may continue to be maintained, and non-
salary reduction SEPs may continue to be established as
well as maintained after 1996.

SIMPLE PLANS: An employer may establish a SIMPLE
IRA or a SIMPLE 401(k) for years after 1996. An
employee can make pre-tax salary reduction
contributions to a SIMPLE Plan, up to $6,000 a year.
Subject to certain limits, the employer will either match
a portion of employee contributions, or will make a contribution
equal to 2% of each employee's compensation without
regard to the amount the employee contributes. An
employer cannot maintain a SIMPLE Plan for its
employees if any contributions or benefits are credited
to those employees under any other qualified retirement
plan maintained by the employer.

REINVESTMENT PRIVILEGE

Shareholders who have redeemed Class A shares of a
Fund may reinvest all or a part of the proceeds of the
redemption back into Class A shares of the Fund at net
asset value (without a sales charge) within 60 days
from the date of redemption. This privilege may be
exercised only once. The reinvestment will be made at
the net asset value next determined after receipt by IMSC
of the reinvestment order accompanied by the funds to be
reinvested. No compensation will be paid to any sales personnel
or dealer in connection with the transaction.

ineligible to take sales charges into account in
computing taxable gain or loss on a redemption if the
reinvestment privilege is exercised. See "Taxation."

RIGHTS OF ACCUMULATION

A scale of reduced sales charges applies to any
investment of $50,000 ($100,000 for Ivy Bond Fund) or
more in Class A shares of a Fund. See "Initial Sales
Charge Alternative -- Class A Shares" in the
Prospectus. The reduced sales charge is applicable to
investments made at one time by an individual, his or
her spouse and children under the age of 21, or a trustee or
other fiduciary of a single trust estate or single fiduciary
account (including a pension, profit sharing or other
employee benefit trust created pursuant to a plan
qualified under Section 401 of the Code). It is also
applicable to current purchases of all of the funds in
the Ivy Mackenzie Funds (except Ivy Money Market Fund)
by any of the persons enumerated above, where the
aggregate quantity of Class A shares of Ivy Global Fund, Ivy
Growth Fund, Ivy Growth with Income Fund, Ivy Emerging Growth
Fund, Ivy China Region Fund, Ivy Latin America Strategy
Fund, Ivy New Century Fund, Ivy International Bond
Fund, Ivy International Fund, Ivy Bond Fund, Ivy Canada
Fund, Ivy Global Science & Technology Fund, Ivy Global
Natural Resources Fund, Ivy International Small
Companies Fund, Ivy Asia Pacific Fund, Ivy Pan-Europe
Fund (expected effective date of May 13, 1997), Ivy
International Fund II (expected effective date of May 13, 1997),
Mackenzie National Municipal Fund, Mackenzie California
Municipal Fund, Mackenzie Limited Term Municipal Fund
and Mackenzie New York Municipal Fund (and shares that
have been exchanged into Ivy Money Market Fund from any
of the other funds in the Ivy Mackenzie Funds) and of
any other investment company distributed by IMDI,
previously purchased or acquired and currently owned,
determined at the higher of current offering price or amount
invested, plus the Class A shares being purchased, amounts to
$50,000 or more for Ivy Global Fund, Ivy Growth Fund,
Ivy Growth with Income Fund, Ivy Emerging Growth Fund,
Ivy International Fund, Ivy China Region Fund, Ivy
Latin America Strategy Fund, Ivy New Century Fund, Ivy
Global Science & Technology Fund, Ivy Global Natural
Resources Fund, Ivy International Small Companies Fund,
Ivy Asia Pacific Fund, Ivy International Fund II (expected
effective date of May 13, 1997), Ivy Pan-Europe Fund (expected
effective date of May 13, 1997) and Ivy Canada Fund;
$100,000 or more for International Bond Fund, Ivy Bond
Fund, Mackenzie National Municipal Fund, Mackenzie
California Municipal Fund and Mackenzie New York
Municipal Fund; or $25,000 or more for Mackenzie
Limited Term Municipal Fund.

At the time an investment takes place, IMSC must
be notified by the investor or his or her dealer that
the investment qualifies for the reduced sales charge
on the basis of previous investments. The reduced
sales charge is subject to confirmation of the
investor's holdings through a check of the particular
Fund's records.

SYSTEMATIC WITHDRAWAL PLAN

A shareholder (except shareholders with accounts
in Class I of the Class I Funds) may establish a
Systematic Withdrawal Plan (a "Withdrawal Plan"), by
telephone instructions or by delivery to IMSC of a
written election to have his or her shares withdrawn
periodically, accompanied by a surrender to IMSC of all share
certificates then outstanding in such shareholder's name,
properly endorsed by the shareholder. To be eligible to
elect a Withdrawal Plan, a shareholder must have at
least $5,000 in his or her account. A Withdrawal Plan
may not be established if the investor is currently
participating in the Automatic Investment Method. A
Withdrawal Plan may involve the depletion of a
shareholder's principal, depending on the amount withdrawn

A redemption under a Withdrawal Plan is a taxable
event. Shareholders contemplating participating in a
Withdrawal Plan should consult their tax advisers.

Additional investments made by investors
participating in a Withdrawal Plan must equal at least
$1,000 each while the Withdrawal Plan is in effect.
Making additional purchases while a Withdrawal Plan is
in effect may be disadvantageous to the investor
because of applicable initial sales charges or CDSCs.

An investor may terminate his or her participation
in the Withdrawal Plan at any time by delivering
written notice to IMSC. If all shares held by the
investor are liquidated at any time, participation in
the Withdrawal Plan will terminate automatically. The
Trust or IMSC may terminate the Withdrawal Plan option
at any time after reasonable notice to shareholders.

GROUP SYSTEMATIC INVESTMENT PROGRAM

Shares of each Fund (except Ivy Bond Fund) may be
purchased in connection with investment programs
established by employee or other groups using
systematic payroll deductions or other systematic
payment arrangements. The Trust does not itself
organize, offer or administer any such programs. However, it
may, depending upon the size of the program, waive the
minimum initial and additional investment requirements
for purchases by individuals in conjunction with
programs organized and offered by others. Unless
shares of a Fund are purchased in conjunction with IRAs
(see "How to Buy Shares" in the Prospectus), such group
systematic investment programs are not entitled to special tax
benefits under the Code. The Trust reserves the right to
refuse purchases at any time or suspend the offering of
shares in connection with group systematic investment
programs, and to restrict the offering of shareholder
privileges, such as check writing, simplified
redemptions and other optional privileges, as described
in the Prospectus, to shareholders using group
systematic investment programs.

With respect to each shareholder account
established on or

after September 15, 1972 under a group systematic
investment program, the Trust and IMI each currently
charge a maintenance fee of $3.00 (or portion thereof)
that for each twelve-month period (or portion thereof)
that the account is maintained. The Trust may collect
such fee (and any fees due to IMI) through a deduction
from distributions to the shareholders involved or by
causing on the date the fee is assessed a redemption in each such
shareholder account sufficient to pay such fee. The
Trust reserves the right to change these fees from time
to time without advance notice.

Class A shares of a Fund are made available to
Merrill Lynch Daily K Plan (the "Plan") participants at
NAV without an initial sales charge if:

(i) the Plan is recordkept on a daily valuation
basis by Merrill Lynch and, on the date the Plan
Sponsor signs the Merrill Lynch Recordkeeping
Service Agreement, the Plan has $3 million or more
in assets invested in broker/dealer funds not
advised or managed by Merrill Lynch Asset Management,
L.P. ("MLAM") that are made available pursuant to a Service
Agreement between Merrill Lynch and the fund's
principal underwriter or distributor and in funds
advised or managed by MLAM (collectively, the
"Applicable Investments");

(ii) the Plan is recordkept on a daily valuation
basis by an independent recordkeeper whose
services are provided through a contract or
alliance arrangement with Merrill Lynch, and on
the date the Plan Sponsor signs the Merrill Lynch
Recordkeeping Service Agreement, the Plan has $3 million or
more in assets, excluding money market funds, invested in
Applicable Investments; or

(iii) the Plan has 500 or more eligible employees,
as determined by Merrill Lynch plan conversion
manager, on the date the Plan Sponsor signs the
Merrill Lynch Recordkeeping Service Agreement.

Alternatively, Class B shares of a Fund are made
available to Plan participants at NAV without a CDSC if
the Plan conforms with the requirements for eligibility
set forth in (i) through (iii) above but either does
not meet the $3 million asset threshold or does not
have 500 or more eligible employees.

Plans recordkept on a daily basis by Merrill Lynch
or an independent recordkeeper under a contract with
Merrill Lynch that are currently investing in Class B
shares of a Fund convert to Class A shares once the
Plan has reached $5 million invested in Applicable
Investments.

BROKERAGE ALLOCATION

Subject to the overall supervision of the
President and the Board, IMI places orders for the
purchase and sale of each Fund's

portfolio securities. All portfolio transactions are
effected at the best price and execution obtainable.
Purchases and sales of debt securities are usually
principal transactions and therefore, brokerage
commissions are usually not required to be paid by the
particular Fund for such purchases and sales (although the price
paid generally includes undisclosed compensation to the
dealer). The prices paid to underwriters of newly-
issued securities usually include a concession paid by
the issuer to the underwriter, and purchases of after-
market securities from dealers normally reflect the
spread between the bid and asked prices. In connection
with OTC transactions, IMI attempts to deal directly
with the principal market makers, except in those
circumstances where IMI believes that a better price and
execution are available elsewhere.

IMI selects broker-dealers to execute transactions
and evaluates the reasonableness of commissions on the
basis of quality, quantity, and the nature of the
firms' professional services. Commissions to be
charged and the rendering of investment services,
including statistical, research, and counseling
services by brokerage firms, are factors to be
considered in the placing of brokerage business. The types of
research services provided by brokers may include general
economic and industry data, and information on securities
of specific companies. Research services furnished by
brokers through whom the Trust effects securities
transactions may be used by IMI in servicing all of its
accounts. In addition, not all of these services may
be used by IMI in connection with the services it
provides to a particular Fund or the Trust. IMI may
consider sales of shares of a Fund as a factor in the selection
of broker-dealers and may select broker-dealers who
provide it with research services. IMI will not,
however, execute brokerage transactions other than at
the best price and execution.

During the fiscal year ended June 30, 1994, during
the six- month period ended December 31, 1994 and during
the fiscal years ended December 31, 1995 and 1996, Ivy
Bond Fund paid brokerage commissions of $175,688,
$42,425, $20,912 and $398, respectively.

During the fiscal years ended December 31, 1994,
1995 and 1996, Ivy Emerging Growth Fund paid brokerage
commissions of $83,831, $302,892 and $426,676,
respectively.

During the fiscal years ended December 31, 1994,
1995 and 1996, Ivy Growth Fund paid brokerage
commissions of $265,471, $666,385 and $883,583,
respectively.

During the fiscal years ended December 31, 1994,
1995 and 1996, Ivy Growth with Income Fund paid
brokerage commissions of $34,028, $192,913 and
$293,827, respectively.

Each Fund may, under some circumstances, accept
securities in lieu of cash as payment for Fund shares.
Each of these Funds

will accept securities only to increase its holdings in
a portfolio security or to take a new portfolio
position in a security that IMI deems to be a desirable
investment for each the Fund. While no minimum has
been established, it is expected that each the Fund
will not accept securities having an aggregate value of
less than $1 million. The Trust may reject in whole or
in part any or all offers to pay for the Fund shares with
securities and may discontinue accepting securities as payment
for the Fund shares at any time without notice. The Trust
will value accepted securities in the manner and at the
same time provided for valuing portfolio securities of
each the Fund, and the Fund shares will be sold for net
asset value determined at the same time the accepted
securities are valued. The Trust will only accept
securities delivered in proper form and will not accept
securities subject to legal restrictions on transfer. The
acceptance of securities by the Trust must comply with the
applicable laws of certain states.

TRUSTEES AND OFFICERS

The Trustees and Executive Officers of the Trust,
their business addresses and principal occupations
during the past five years are:

POSITION
WITH THE BUSINESS
AFFILIATIONS NAME, ADDRESS, AGE TRUST AND
PRINCIPAL OCCUPATIONS

John S. Anderegg, Jr. Trustee Chairman,
Dynamics Research 60 Concord Street
Corp. (instruments and Wilmington, MA 01887
controls); Director, Burr- Age: 73
Brown Corp. (operational
amplifiers); Director,
Metritage Incorporated
(level measuring
instruments); Trustee of
Mackenzie Series Trust
(1992-present).

Paul H. Broyhill Trustee Chairman, BMC
Fund, Inc. 800 Hickory Blvd. (1983-
present); Chairman, Golfview Park-Box 500
Broyhill Family Foundation, Lenoir, NC 28645
Inc. (1983-Present); Age: 73
Chairman and President,
Broyhill Investments, Inc.
(1983-present); Chairman,
Broyhill Timber Resources
(1983-present); Management
of a personal
portfolio of
fixed-income and equity
investments (1983-present);
Trustee of Mackenzie Series
Trust (1988-present);
Director of The Mackenzie
Funds Inc. (1988-1995).

Stanley Channick Trustee President and
Chief 11 Bala Avenue Executive
Officer, The Bala Cynwyd, PA 19004
Whitestone Corporation Age: 73
(insurance agency);
Chairman, Scott Management
Company (administrative
services for insurance
companies); President, The
Channick Group (consultants
to insurance companies
and national
trade
associations); Trustee of
Mackenzie Series Trust
(1994-present); Director of
The Mackenzie Funds Inc.
(1994-1995).

Frank W. DeFriece, Jr. Trustee Director, Manager
and Vice The Landmark Centre
President, Director and 113 Landmark Lane,
Fund Manager, Massengill- Suite B
DeFriece Foundation Bristol, TN 37620-2285
(charitable organization) Age: 76
(1950-present); Trustee and
Vice Chairman, East
Tennessee Public
Communications Corp. (WSJK-
TV) (1984-present); Trustee
of Mackenzie Series
Trust (1985-
present); Director of
The Mackenzie Funds Inc.
(1987-1995).

Roy J. Glauber Trustee Mallinckrodt
Professor of Lyman Laboratory
Physics, Harvard of Physics
University (1974-present); Harvard University
Trustee of Mackenzie Series Cambridge, MA 02138
Trust (1994-present). Age: 71

Michael G. Landry Trustee President, Chief
Executive 700 South Federal Hwy. and Officer
and Director of Suite 300 Chairman
Mackenzie Investment Boca Raton, FL 33432
Management Inc. (1987- Age: 50
present); President, [*Deemed to be an
Director and Chairman of "interested person"
Ivy Management Inc. (1992- of the Trust, as
present); Chairman and defined
under the Director of Ivy Mackenzie
1940 Act.] Services Corp.(1993-
present); Chairman and
Director of Ivy
Mackenzie
Distributors, Inc. (1994-
present); Director and
President of Ivy Mackenzie
Distributors, Inc. (1993-
1994); Director and
President of The Mackenzie
Funds Inc. (1987-1995);
Trustee of Mackenzie
Series Trust
(1987-present);
President of Mackenzie
Series Trust (1987-1996);
Chairman of Mackenzie
Series Trust (1996-
present).

Joseph G. Rosenthal Trustee Chartered
Accountant 110 Jardin Drive (1958-
present); Trustee of Unit #12
Mackenzie Series Trust Concord, Ontario Canada
(1985-present); Director of

L4K 2T7 The Mackenzie
Funds Inc. Age: 62
(1987-1995).

Richard N. Silverman Trustee Director, Newton-
Wellesley 18 Bonnybrook Road
Hospital; Director, Beth Waban, MA 02168
Israel Hospital; Director, Age: 73
Boston Ballet; Director,
Boston Children's Museum;
Director, Brimmer and May
School.

J. Brendan Swan Trustee President,
Airspray 4701 North Federal Hwy.
International, Inc.; Suite 465
Joint Managing Director, Pompano Beach, FL 33064
Airspray International Age: 67
B.V. (an environmentally
sensitive packaging
company); Director of
Polyglass LTD.; Director,
The Mackenzie Funds Inc.
(1992-1995); Trustee of
Mackenzie Series Trust
(1992-present).

Keith J. Carlson Trustee Senior Vice
President of 700 South Federal Hwy. and
Mackenzie Investment Suite 300 President
Management, Inc. (1996 Boca Raton, FL 33432
-present); Senior Vice Age: 40
President and Director of [*Deemed to be an
Mackenzie Investment "interested
person" Management, Inc. (1994 of the
Trust, as -1996); Senior Vice
defined under the President and Treasurer of
1940 Act.] Mackenzie
Investment
Management, Inc. (1989-
1994); Senior Vice
President and Director of
Ivy Management Inc. (1994-
present); Senior Vice
President, Treasurer and
Director of Ivy Management
Inc. (1992-1994); Vice
President of The
Mackenzie Funds
Inc. (1987-1995);
Senior Vice President and
Director, Ivy Mackenzie
Services Corp. (1996-
present); President and
Director of Ivy Mackenzie
Services Corp. (1993-1996);
Trustee and President of
Mackenzie Series Trust
(1996-present); Vice
President of
Mackenzie

Series Trust
(1994-1996);
Treasurer of Mackenzie
Series Trust (1985-1994);
President, Chief Executive
Officer and Director of Ivy
Mackenzie Distributors,
Inc. (1994-present);
Executive Vice President
and Director of Ivy
Mackenzie Distributors,
Inc. (1993-1994);
Trustee of
Mackenzie Series Trust
(1996-present).

C. William Ferris Secretary/ Senior Vice
President, 700 South Federal Hwy. Treasurer Chief
Financial Officer Suite 300
and Secretary/Treasurer Boca Raton, FL 33432
of Mackenzie Investment Age: 52
Management Inc. (1995-
present); Senior Vice
President, Finance and
Administration/Compliance
Officer of Mackenzie
Investment Management Inc.
(1989-1994); Senior Vice
President, Secretary/
Treasurer and Clerk
of Ivy Management
Inc. (1994-
present); Vice President,
Finance/Administration and
Compliance Officer of Ivy
Management Inc. (1992-
1994); Senior Vice
President, Secretary/
Treasurer and Director of
Ivy Mackenzie Distributors,
Inc. (1994-present);
Secretary/Treasurer
and Director of
Ivy Mackenzie
Distributors, Inc. (1993-
1994); President and
Director of Ivy Mackenzie
Services Corp. (1996-
present); Secretary/
Treasurer and Director of
Ivy Mackenzie Services
Corp. (1993-1996);
Secretary/Treasurer of The
Mackenzie Funds Inc. (1993-
1995);
Secretary/Treasurer
of Mackenzie Series Trust
(1994-present).

James W. Broadfoot Vice Executive Vice
President,

700 South Federal Hwy. President Ivy Management
Inc. (1996- Suite 300
present); Senior Vice Boca Raton, FL 33432
President, Ivy Management, Age: 54
Inc. (1992-1996); Director
and Senior Vice President,
Mackenzie Investment
Management Inc. (1995-
present); Senior Vice
President, Mackenzie
Investment Management Inc.
(1990-1995).

PERSONAL INVESTMENTS BY EMPLOYEES OF IMI

Employees of IMI are permitted to make personal
securities transactions, subject to the requirements
and restrictions set forth in IMI's Code of Ethics.
The Code of Ethics is designed to identify and address
certain conflicts of interest between personal
investment activities and the interests of investment
advisory clients such as the Fund. Among other things, the Code
of Ethics, which generally complies with standards
recommended by the Investment Company Institute's
Advisory Group on Personal Investing, prohibits certain
types of transactions absent prior approval, applies to
portfolio managers, traders, research analysts and
others involved in the investment advisory process, and
imposes time periods during which personal transactions may
not be made in certain securities, and requires the submission
of duplicate broker confirmations and monthly reporting
of securities transactions. Exceptions to these and
other provisions of the Code of Ethics may be granted
in particular circumstances after review by appropriate
personnel.

COMPENSATION TABLE
IVY FUND
(FISCAL YEAR ENDED DECEMBER 31, 1996)

TOTAL PENSION OR
COMPENSA- RETIREMENT
TION FROM
BENEFITS ESTIMATED TRUST AND
AGGREGATE ACCRUED AS ANNUAL FUND COM-
COMPENSA- PART OF BENEFITS PLEX PAID
NAME, TION FUND UPON TO
POSITION FROM TRUST EXPENSES RETIREMENT
TRUSTEES

John S. $7,419 N/A N/A
$10,000 Anderegg, Jr.
(Trustee)

Paul H. $7,419 N/A N/A
$10,000 Broyhill
(Trustee)

Keith J. $0 N/A N/A
$0 Carlson[**]
(Trustee and
President)

Stanley $4,949 N/A N/A
$10,000 Channick[*]
(Trustee)

Frank W. $7,419 N/A N/A
$10,000 DeFriece, Jr.
(Trustee)

Roy J. $7,419 N/A N/A
$10,000 Glauber[*]
(Trustee)

Michael G. $0 N/A N/A
$0 Landry
(Trustee and
Chairman of
the Board)

Joseph G. $7,419 N/A N/A
$10,000 Rosenthal
(Trustee)

Richard N. $10,000 N/A N/A
$10,000 Silverman
(Trustee)

J. Brendan $7,419 N/A N/A
$10,000 Swan
(Trustee)

C. William $0 N/A N/A
$0 Ferris
(Secretary/Treasurer)

[*] Appointed as a Trustee of the Trust at a meeting
of the Board held on February 10, 1996.

[**] Appointed as a Trustee of the Trust at a meeting
of the Board held on December 7, 1996.

As of April 3, 1997, the Officers and Trustees of
the Trust as a group owned beneficially or of record
less than 1% of the outstanding Class A, Class B, Class
C and Class I shares of any of the Funds.

INVESTMENT ADVISORY AND OTHER SERVICES

BUSINESS MANAGEMENT AND INVESTMENT ADVISORY SERVICES

IMI provides business management and investment
advisory services to each Fund pursuant to a Business
Management and Investment Advisory Agreement (the
"Agreement"). The Agreement was approved by the
respective sole shareholder of Ivy Bond Fund on
December 31, 1994 and of Ivy Emerging Growth Fund on April 30,
1993 and by the respective shareholders of Ivy Growth Fund
and Ivy Growth with Income Fund on December 30, 1991.
Prior to the approval by the respective shareholders or
sole shareholder of each Fund, the Agreement was
approved on September 29, 1994 with respect to Ivy Bond
Fund, on February 19, 1993 with respect to Ivy Emerging
Growth Fund and October 28, 1991 with respect to Ivy
Growth Fund and Ivy Growth with Income Fund by the Board,
including a majority of the Trustees who are neither "interested
persons" (as defined in the 1940 Act) of the Trust nor
have any direct or indirect financial interest in the
operation of the distribution plan (see "Distribution
Services") or in any related agreement (the
"Independent Trustees").

Until December 31, 1994, MIMI served as the
investment adviser to Ivy Bond Fund, which Fund was a
series of Mackenzie Series Trust until it was
reorganized as a series of the Trust on December 31,
1994. On December 31, 1994, MIMI's interest in the
Agreement with respect to Ivy Bond Fund was assigned by MIMI to
IMI, which is a wholly owned subsidiary of MIMI. The
provisions of the Agreement remain unchanged by IMI's
succession to MIMI thereunder. MIMI, a Delaware
corporation, has approximately 10% of its outstanding
common stock listed for trading on the TSE. MIMI is a
subsidiary of Mackenzie Financial Corporation ("MFC"),
150 Bloor Street West, Toronto, Ontario, Canada, a public
corporation organized under the laws of Ontario whose shares are
listed for trading on The TSE. MFC is registered in
Ontario as a mutual fund dealer and advises Ivy Canada
Fund and Ivy Global Natural Resources Fund. IMI
currently acts as manager and investment adviser to the
following additional investment companies registered
under the 1940 Act (other than the Funds): Ivy China
Region Fund, Ivy Global Fund, Ivy International Fund,
Ivy Latin America Strategy Fund, Ivy New Century Fund, Ivy
International Bond Fund, Ivy Global Science & Technology Fund,
Ivy International Small Companies Fund, Ivy International
Fund II (expected effective date of May 13, 1997), Ivy
Asia Pacific Fund, Ivy Pan-Europe Fund (expected
effective date of May 13, 1997) and Ivy Money Market
Fund.

The Agreement obligates IMI to make investments
for the accounts of each Fund in accordance with its
best judgment and within the investment objectives and
restrictions set forth in the Prospectus, the 1940 Act
and the provisions of the Code relating to regulated
investment companies, subject to policy decisions
adopted by the Board. IMI also determines the
securities to be purchased or sold by these Funds and places

orders with brokers or dealers who deal in such
securities.
Under the Agreement, IMI also provides certain
business management services. IMI is obligated to (1)
coordinate with each Fund's Custodian and monitor the
services it provides to that Fund; (2) coordinate with
and monitor any other third parties furnishing services
to each Fund; (3) provide each Fund with necessary
office space, telephones and other communications
facilities as are adequate for the particular Fund's needs;
(4) provide the services of individuals competent to perform
administrative and clerical functions that are not
performed by employees or other agents engaged by the
particular Fund or by IMI acting in some other capacity
pursuant to a separate agreement or arrangements with
the Fund; (5) maintain or supervise the maintenance by
third parties of such books and records of the Trust as
may be required by applicable Federal or state law; (6)
authorize and permit IMI's directors, officers and
employees who may be elected or appointed as trustees or officers
of the Trust to serve in such capacities; and (7) take
such other action with respect to the Trust, after
approval by the Trust as may be required by applicable
law, including without limitation the rules and
regulations of the SEC and of state securities
commissions and other regulatory agencies.

Ivy Bond Fund pays IMI a monthly fee for providing
business management and investment advisory services at
an annual rate of 0.75% of the first $100 million of
the Fund's average net assets, reduced to 0.50% of the
Fund's average net assets in excess of $100 million.
Ivy Emerging Growth Fund and Ivy Growth Fund each pay
IMI a monthly fee for providing business management and
investment advisory services at an annual rate of 0.85% of each
Fund's average net assets. Ivy Growth with Income Fund
pays IMI a monthly fee for providing business
management and investment advisory services at an
annual rate of 0.75% of the Funds average net assets.

For the fiscal year ended June 30, 1994, for the
six-month period ended December 31, 1994 and for the
fiscal years ended December 31, 1995 and 1996, Ivy Bond
Fund paid IMI $984,110, $445,111 and $848,778 and
$781,647, respectively (of which IMI reimbursed $0,
$10,764 and $2,615 and $0, respectively, pursuant to
required expense limitations).

During the fiscal years ended December 31, 1994,
1995 and 1996, Ivy Emerging Growth Fund paid IMI
$168,819, $318,186 and $657,579, respectively (of which
IMI reimbursed $3,923, $0 and $0, respectively,
pursuant to voluntary expense limitations).

For the fiscal years ended December 31, 1994, 1995
and 1996, Ivy Growth Fund paid IMI $2,133,471,
$2,278,390 and $2,608,378, respectively (of which IMI
reimbursed $285,510, $11,680 and $12,486, respectively,
pursuant to voluntary expense limitations).

For the fiscal years ended December 31, 1994, 1995
and 1996, Ivy Growth with Income Fund paid IMI
$277,991, $515,787 and $629,322, respectively.

Under the Agreement, the Trust pays the following
expenses: (1) the fees and expenses of the Trust's
Independent Trustees; (2) the salaries and expenses of
any of the Trust's officers or employees who are not
affiliated with IMI; (3) interest expenses; (4) taxes
and governmental fees, including any original issue
taxes or transfer taxes applicable to the sale or delivery of
shares or certificates therefor; (5) brokerage commissions
and other expenses incurred in acquiring or disposing
of portfolio securities; (6) the expenses of
registering and qualifying shares for sale with the SEC
and with various state securities commissions; (7)
accounting and legal costs; (8) insurance premiums; (9)
fees and expenses of the Trust's Custodian and Transfer
Agent and any related services; (10) expenses of
obtaining quotations of portfolio securities and of pricing
shares; (11) expenses of maintaining the Trust's legal
existence and of shareholders' meetings; (12) expenses
of preparation and distribution to existing
shareholders of periodic reports, proxy materials and
prospectuses; and (13) fees and expenses of membership
in industry organizations.

IMI currently limits Ivy Emerging Market Fund's
total operating expenses (excluding Rule 12b-1 fees,
interest, taxes, brokerage commissions, litigation and
indemnification expenses, and other extraordinary
expenses) to an annual rate of 1.95% of the Fund's
average net assets, which may lower that Fund's
expenses and increase its yield. The Fund's expense limitation
may be terminated or revised at any time, at which time
its expenses may increase and its yield may be
reduced.

On August 23-24, 1996, the Board (including a
majority of the Independent Trustees) last approved the
continuance of the Agreement with respect to each of
Ivy Bond Fund, Ivy Emerging Growth Fund, Ivy Growth
Fund and Ivy Growth with Income Fund. Each Agreement
will continue in effect with respect to each Fund from
year to year, or for more than the initial period, as the
case may be, only so long as the continuance is specifically
approved at least annually (i) by the vote of a majority of
the Independent Trustees and (ii) either (a) by the
vote of a majority of the outstanding voting securities
(as defined in the 1940 Act) of the particular Fund or
(b) by the vote of a majority of the entire Board. If
the question of continuance of the Agreements (or
adoption of any new agreement) is presented to
shareholders, continuance (or adoption) shall be effected only if
approved by the affirmative vote of a majority of the
outstanding voting securities of the particular Fund.
See "Capitalization and Voting Rights."

Each Agreement may be terminated with respect to a
particular Fund at any time, without payment of any
penalty, by the vote of a majority of the Board, or by
a vote of a majority

of the outstanding voting securities of that Fund, on
60 days' written notice to IMI, or by IMI on 60 days'
written notice to the Trust. The Agreement shall
terminate automatically in the event of its assignment.

DISTRIBUTION SERVICES

IMDI, a wholly owned subsidiary of MIMI, serves as
the exclusive distributor of the Funds' shares pursuant
to an Amended and Restated Distribution Agreement with
the Trust dated October 23, 1991, as amended from time
to time (the "Distribution Agreement"). The
Distribution Agreement was last approved by the Board
on August 25, 1996. IMDI distributes shares of the Funds
through broker-dealers who are members of the National
Association of Securities Dealers, Inc. and who have executed
dealer agreements with IMDI. IMDI distributes shares of the
Funds on a continuous basis, but reserves the right to
suspend or discontinue distribution on that basis.
IMDI is not obligated to sell any specific amount of
Fund shares.

Pursuant to the Distribution Agreement, IMDI is
entitled to deduct a commission on all Class A Fund
shares sold equal to the difference, if any, between
the public offering price, as set forth in the Funds'
then-current prospectus, and the net asset value on
which such price is based. Out of that commission, IMDI
may reallow to dealers such concession as IMDI may determine from
time to time. In addition, IMDI is entitled to deduct a
CDSC on the redemption of Class A shares sold without
an initial sales charge and Class B and Class C shares,
in accordance with, and in the manner set forth in, the
Prospectus.

Under the Distribution Agreement, each Fund bears,
among other expenses, the expenses of registering and
qualifying its shares for sale under federal and state
securities laws and preparing and distributing to
existing shareholders periodic reports, proxy materials
and prospectuses.

During the three months ended September 30, 1993,
MIMI (which was Ivy Bond Fund's distributor at that
time) received from sales of Class A [FN][Shares of Ivy
Bond Fund outstanding as of March 31, 1994 were
designated Class A shares of the Fund.] shares of Ivy
Bond Fund $236,973 in sales commissions, of which
$46,312 was retained after dealers' reallowances. During the
nine months ended June 30, 1994, the six-month period ended
December 31, 1994 and the fiscal years ended December 31,
1995 and 1996, IMDI received from sales of Class A
shares of Ivy Bond Fund $343,167, $123,560, $101,081
and $97,905, respectively, in sales commissions, of
which $65,470, $23,740, $20,028 and $18,170,
respectively, was retained after dealers' reallowances.
During the period from April 1, 1994 (the date on which Class B
shares were first offered for sale to the public) to
December 31, 1994 and during the fiscal years ended
December 31, 1995 and 1996, IMDI received $1,296,
$9,926 and $18,328, respectively, in CDSCs paid upon
certain redemptions of Class B shares of the

Fund. During the period April 30, 1996 (the date on
which Class C shares were first offered for sale to the
public) to December 31, 1996, IMDI received no CDSCs on
certain redemptions of Class C shares of the Fund.

During the fiscal years ended December 31, 1994,
1995 and 1996, IMDI received from sales of Class A
shares of Ivy Emerging Growth Fund $193,050, $268,012
and $488,492, respectively, in sales commissions, of
which $31,480, $41,326 and $69,833, respectively, was
retained after dealers' reallowances. During the
fiscal years ended December 31, 1994, 1995 and 1996, IMDI
received $12,352, $31,687 and $34,776, respectively, in CDSCs
paid upon certain redemptions of Class B shares of the
Fund. During the period April 30, 1996 (the date on
which Class C shares were first offered for sale to the
public) to December 31, 1996, IMDI received $677 in
CDSCs paid on certain redemptions of Class C shares of
the Fund.

During the fiscal years ended December 31, 1994,
1995 and 1996, IMDI received from sales of Class A
shares of Ivy Growth Fund $70,092, $150,873 and
$$134,278, respectively, in sales commissions, of which
$10,667, $23,327 and $$20,447, respectively, was
retained after dealers' reallowances. During the
fiscal years ended December 31, 1994, 1995 and 1996, IMDI
received $4,669, $8,722 and $3,923, respectively, in CDSCs paid
upon certain redemptions of Class B shares of the Fund.
During the period April 30, 1996 (the date on which
Class C shares were first offered for sale to the
public) to December 31, 1996, IMDI received no CDSCs on
certain redemptions of Class C shares of the Fund.

During the fiscal years ended December 31, 1994,
1995 and 1996, IMDI received from sales of Class A
shares of Ivy Growth with Income Fund $236,691,
$143,107 and $96,130, respectively, in sales
commissions, of which $37,077, $22,948 and $$15,183,
respectively, was retained after dealers' re-allowances. During
the fiscal year ended December 31, 1994, IMDI received no
CDSCs on certain redemptions of Class B shares of the
Fund. During the fiscal years ended December 31, 1995
and 1996, IMDI received $26,361 and $29,227,
respectively, in CDSCs on certain redemptions of Class
B shares of the Fund. During the period April 30, 1996
(the date on which Class C shares were first offered
for sale to the public) to December 31, 1996, IMDI
received no CDSCs on certain redemptions of Class C shares of the
Fund.

penalty, by IMDI on 60 days' written notice to the
particular Fund or by a Fund by vote of either a
majority of the outstanding voting securities of the
Fund or a majority of the Independent Trustees on 60
days' written notice to IMDI. Each Distribution
Agreement shall terminate automatically in the event of its
assignment.

RULE 18F-3 PLAN. On February 23, 1995, the SEC
adopted Rule 18f-3 under the 1940 Act, which permits a
registered open-end investment company to issue
multiple classes of shares in accordance with a written
plan approved by the investment company's board of
directors/trustees and filed with the SEC. At a
meeting held on December 1-2, 1995, the Board adopted a multi-
class plan (the "Rule 18f-3 plan") on behalf of each Fund.
At a meeting held on December 7, 1996, the Board last
approved the Rule 18f-3 plan on behalf of each Fund.
The key features of the Rule 18f-3 plan are as follows:
(i) shares of each class of a Fund represent an equal
pro rata interest in that Fund and generally have
identical voting, dividend, liquidation, and other
rights, preferences, powers, restrictions, limitations,
qualifications, terms and conditions, except that each class
bears certain class-specific expenses and has separate voting
rights on certain matters that relate solely to that
class or in which the interests of shareholders of one
class differ from the interests of shareholders of
another class; (ii) subject to certain limitations
described in the Prospectus, shares of a particular
class of a Fund may be exchanged for shares of the same
class of another Ivy or Mackenzie fund; and (iii) a Fund's
Class B shares will convert automatically into Class A shares
of that Fund after a period of eight years, based on
the relative net asset value of such shares at the time
of conversion.

RULE 12B-1 DISTRIBUTION PLANS. The Trust has
adopted on behalf of each Fund, in accordance with Rule
12b-1 under the 1940 Act, separate Rule 12b-1
distribution plans pertaining to the Funds' Class A,
Class B and Class C shares (each, a "Plan"). In
adopting each Plan, a majority of the Independent Trustees have
concluded in accordance with the requirements of Rule
12b-1 that there is a reasonable likelihood that each
Plan will benefit each Fund and its shareholders. The
Trustees of the Trust believe that the Plans should
result in greater sales and/or fewer redemptions of
each Fund's shares, although it is impossible to know
for certain the level of sales and redemptions of a Fund's
shares in the absence of a Plan or under an alternative
distribution arrangement.

in specific plans. Pursuant to each Plan, service fee
payments made out of or charged against the assets
attributable to a Fund's Class A, Class B or Class C
shares must be in reimbursement for services rendered
for or on behalf of the affected class. The expenses
not reimbursed in any one month may be reimbursed in a
subsequent month. The Class A Plan does not provide
for the payment of interest or carrying charges as
distribution expenses.

Under the Funds' Class B and Class C Plans, each
Fund also pays IMDI a distribution fee, accrued daily
and paid monthly, at the annual rate of 0.75% of the
average daily net assets attributable to its Class B or
Class C shares. IMDI may reallow to dealers all or a
portion of the service and distribution fees as IMDI
may determine from time to time. The distribution fee
compensates IMDI for expenses incurred in connection with
activities primarily intended to result in the sale of the
Funds' Class B or Class C shares, including the
printing of prospectuses and reports for persons other
than existing shareholders and the preparation,
printing and distribution of sales literature and
advertising materials. Pursuant to each Class B and Class C
Plan, IMDI may include interest, carrying or other finance
charges in its calculation of distribution expenses, if not
prohibited from doing so pursuant to an order of or a
regulation adopted by the SEC.

Among other things, each Plan provides that (1)
IMDI will submit to the Board at least quarterly, and
the Trustees will review, written reports regarding all
amounts expended under the Plan and the purposes for
which such expenditures were made; (2) each Plan will
continue in effect only so long as such continuance is
approved at least annually, and any material amendment
thereto is approved, by the votes of a majority of the
Board, including the Independent Trustees, cast in person at a
meeting called for that purpose; (3) payments by each Fund
under each Plan shall not be materially increased
without the affirmative vote of the holders of a
majority of the outstanding shares of the relevant
class; and (4) while each Plan is in effect, the
selection and nomination of Trustees who are not
"interested persons" (as defined in the 1940 Act) of the Trust
shall be committed to the discretion of the Trustees who
are not "interested persons" of the Trust.

IMDI may make payments for distribution assistance
and for administrative and accounting services from
resources that may include the management fees paid by
a Fund. IMDI also may make payments (such as the
service fee payments described above) to unaffiliated
broker-dealers for services rendered in the
distribution of each Fund's shares. To qualify for such
payments, shares may be subject to a minimum holding period.
However, no such payments will be made to any dealer or
broker if at the end of each year the amount of shares
held does not exceed a minimum amount. The minimum
holding period and minimum level of holdings will be
determined from time to time by IMDI.

A report of the amount expended pursuant to each
Plan, and the purposes for which such expenditures were
incurred, must be made to the Board for its review at
least quarterly.

During the fiscal year ended June 30, 1994, the
six-month period ended December 31, 1994 and the fiscal
year ended December 31, 1995 and 1996, Ivy Bond Fund
paid IMDI $327,497, $146,362, $273,837 and $247,382,
respectively, pursuant to the Class A plan. During the
period from April 1, 1994 (the date on which Class B
shares of Ivy Bind Fund were first offered for sale to
the public) to June 30, 1994, the six-month period ended December
31, 1994 and the fiscal years ended December 31, 1995
and 1996, Ivy Bond Fund paid IMDI [$693, $7,469 $36,359
and $50,248,] respectively, pursuant to the Class B
plan. During the period April 30, 1996 (the date on
which Class C shares of Ivy Bond Fund were first
offered for sale to the public) to December 31, 1996,
Ivy Bond Fund paid IMDI $2,093 pursuant to the Class C plan.

During the fiscal years ended December 31, 1994,
1995 and 1996, the Fund paid IMDI $41,576, $70,182 and
$130,888, respectively, pursuant to the Class A Plan.
During the fiscal years ended December 31, 1994, 1995
and 1996, Ivy Emerging Growth Fund paid IMDI $32,179,
$93,593 and $240,031, respectively, pursuant to the
Class B Plan. During the period April 30, 1996 (the
date on which Class C shares of Ivy Emerging Growth Fund
were first offered for sale to the public) to December 31, 1996,
Ivy Emerging Growth Fund paid IMDI $10,082 pursuant to
the Class C plan.

During the fiscal years ended December 31, 1994,
1995 and 1996, Ivy Growth Fund paid IMDI $89,478,
$115,730 and $153,152, respectively, pursuant to the
Class A Plan. During the fiscal years ended December
31, 1994, 1995 and 1996, Ivy Growth Fund paid IMDI
$6,983, $20,164 and $32,851, respectively, pursuant to
the Class B Plan. During the period April 30, 1996 (the date on
which Class C shares of Ivy Growth Fund were first
offered for sale to the public) to December 31, 1996,
Ivy Growth Fund paid IMDI $297 pursuant to the Class C
plan.

During the fiscal years ended December 31, 1994,
1995 and 1996, Ivy Growth with Income Fund paid IMDI
$34,975, $105,143 and $126,322, respectively, pursuant
to the Class A plan. During the fiscal years ended
December 31, 1994, 1995 and 1996, Ivy Growth with
Income Fund paid IMDI $38,866, $76,355 and $114,350,
respectively, pursuant to the Class B Plan. During the period
April 30, 1996 (the date on which Class C shares of Ivy
Growth with Income Fund were first offered for sale to
the public) to December 31, 1996, Ivy Growth with
Income Fund paid IMDI $2,093 pursuant to the Class C
plan.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
A shares of Ivy Bond Fund: advertising, $17,258;
printing and mailing of prospectuses to persons other
than current shareholders, $22,910;

compensation to dealers, $47,132; compensation to sales
personnel,$150,772; seminars and meetings, $11,784;
travel and entertainment, $25,517; general and
administrative, $98,574; telephone, $4,105; and
occupancy and equipment rental, $8,800.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
B shares of Ivy Bond Fund: advertising, $876; printing
and mailing of prospectuses to persons other than
current shareholders, $1,163; compensation to dealers,
$2,393; compensation to sales personnel,$7,655;
seminars and meetings, $598; travel and entertainment,
$1,296; general and administrative, $5,005; telephone,
$208; and occupancy and equipment rental, $447.

During the period from April 30, 1996 (the date on
which Class C shares of Ivy Bond Fund were first
offered for sale to the public) to December 31, 1996,
IMDI expended the following amounts in marketing Class
C shares of Ivy Bond Fund: advertising, $36; printing
and mailing of prospectuses to persons other than
current shareholders, $48; compensation to dealers,
$100; compensation to sales personnel,$319; seminars and
meetings, $25; travel and entertainment, $54; general and
administrative, $208; telephone, $9; and occupancy and equipment
rental, $19.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
A shares of Ivy Emerging Growth Fund: advertising,
$9,484; printing and mailing of prospectuses to persons
other than current shareholders, $24,286; compensation
to dealers, $97,151; compensation to sales
personnel,$80,452; seminars and meetings, $24,288; travel and
entertainment, $13,946; general and administrative, $46,004;
telephone, $2,246; and occupancy and equipment rental,
$4,910.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
B shares of Ivy Emerging Growth Fund: advertising,
$4,348; printing and mailing of prospectuses to persons
other than current shareholders, $11,135; compensation
to dealers, $44,542; compensation to sales
personnel,$36,885; seminars and meetings, $11,135; travel and
entertainment, $6,394; general and administrative, $21,092;
telephone, $1,030; and occupancy and equipment rental,
$2,251.

During the period April 30, 1996 (the date on
which Class C shares of Ivy Emerging Growth Fund were
first offered for sale to the public) to December 31,
1996, IMDI expended the following amounts in marketing
Class C shares of Ivy Emerging Growth Fund:
advertising, $183; printing and mailing of prospectuses to
persons other than current shareholders, $468; compensation to
dealers, $1,871; compensation to sales personnel,$1,549;
seminars and meetings, $468; travel and entertainment,
$269; general and

administrative, $886; telephone, $43; and occupancy and
equipment rental, $95.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
A shares of Ivy Growth Fund: advertising, $53,668;
printing and mailing of prospectuses to persons other
than current shareholders, $56,119; compensation to
dealers, $115,522; compensation to sales
personnel,$462,760; seminars and meetings, $28,881; travel and
entertainment, $79,205; general and administrative,
$291,709; telephone, $12,719; and occupancy and
equipment rental, $27,455.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
B shares of Ivy Growth Fund: advertising, $582;
printing and mailing of prospectuses to persons other
than current shareholders, $609; compensation to
dealers, $1,254; compensation to sales
personnel,$5,021; seminars and meetings, $313; travel and
entertainment, $859; general and administrative, $3,165;
telephone, $138; and occupancy and equipment rental, $298.

During the period April 30, 1996 (the date on
which Class C shares of Ivy Growth Fund were first
offered for sale to the public) to December 31, 1996,
IMDI expended the following amounts in marketing Class
C shares of Ivy Growth Fund: advertising, $5; printing
and mailing of prospectuses to persons other than
current shareholders, $5; compensation to dealers, $11;
compensation to sales personnel,$45; seminars and meetings, $3;
travel and entertainment, $8; general and administrative,
$28; telephone, $1; and occupancy and equipment rental,
$3.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
A shares of Ivy Growth with Income Fund: advertising,
$10,965; printing and mailing of prospectuses to
persons other than current shareholders, $12,055;
compensation to dealers, $55,582; compensation to sales
personnel,$94,776; seminars and meetings, $13,895;
travel and entertainment, $16,188; general and
administrative, $60,038; telephone, $2,600; and occupancy and
equipment rental, $5,608.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
B shares of Ivy Growth with Income Fund: advertising,
$2,039; printing and mailing of prospectuses to persons
other than current shareholders, $2,242; compensation
to dealers, $10,337; compensation to sales
personnel,$17,625; seminars and meetings, $2,584;
travel and entertainment, $3,010; general and
administrative, $11,165; telephone, $484; and occupancy and
equipment rental, $1,043.

During the period April 30, 1996 (the date on
which Class C shares of Ivy Growth with Income Fund
were first offered for sale

to the public) to December 31, 1996, IMDI expended the
following amounts in marketing Class C shares of Ivy
Growth with Income Fund: advertising, $1; printing and
mailing of prospectuses to persons other than current
shareholders, $2; compensation to dealers, $7;
compensation to sales personnel, $12; seminars and
meetings, $2; travel and entertainment, $2; general and
administrative, $8; telephone, $0; and occupancy and equipment
rental, $1.

Each Plan may be amended at any time with respect
to the class of shares of the Fund to which the Plan
relates by vote of the Trustees, including a majority
of the Independent Trustees, cast in person at a
meeting called for the purpose of considering such
amendment. Each Plan may be terminated at any time with
respect to the class of shares of the particular Fund to which
the Plan relates, without payment of any penalty, by vote
of a majority of the Independent Trustees, or by vote
of a majority of the outstanding voting securities of
that class.

If the Distribution Agreement or the Distribution
Plans are terminated (or not renewed) with respect to
any of the Ivy Mackenzie Funds (or class of shares
thereof) ,each may continue in effect with respect to
any other fund (or Class of shares thereof) as to which
they have not been terminated (or have been renewed).

CUSTODIAN

Pursuant to a Custodian Agreement with the Trust,
Brown Brothers Harriman & Co. (the "Custodian"), a
private bank and member of the principal securities
exchanges, located at 40 Water Street, Boston,
Massachusetts 02109 (the "Custodian"), maintains
custody of the assets of each Fund held in the United States.
Rules adopted under the 1940 Act permit the Trust to
maintain its foreign securities and cash in the custody
of certain eligible foreign banks and securities
depositories. Pursuant to those rules, Brown Brothers
has entered into subcustodial agreements for the
holding of each Fund's foreign securities. With respect
to each Fund, Brown Brothers may receive, as partial payment for
its services, a portion of the Trust's brokerage
business, subject to its ability to provide best price
and execution.

FUND ACCOUNTING SERVICES

Pursuant to a Fund Accounting Services Agreement,
MIMI provides certain accounting and pricing services
for each Fund. As compensation for those services, Ivy
Bond Fund pays MIMI a monthly fee plus out-of-pocket
expenses as incurred. The monthly fee is based upon
the net assets of the particular Fund at the preceding
month end at the following rates: $1,000 when the net
assets are less than $20 million; $1,500 when the net assets are
$20 to $75 million; $4,000 when the net assets are $75 to
$100 million; and $6,000 when the net assets are over
$100 million. As compensation for those services,
Ivy Growth Fund, Ivy Growth

with Income Fund and Ivy Emerging Growth Fund each pays
MIMI a monthly fee plus out-of-pocket expenses as
incurred. The monthly fee is based upon the net assets
of the particular Fund at the preceding month end at
the following rates: $1,250 when net assets are $10
million and under; $2,500 when net assets are $20 over
$10 million to $40 million; $5,000 when net assets are over
$40 million to $75 million; and $6,500 when net assets are
over $75 million.

For the fiscal year ended June 30, 1994, the six
months ended December 31, 1994 and the fiscal years
ended December 31, 1995 and 1996, Ivy Bond Fund paid
$85,737, $45,015, $102,160 and $95,017, respectively,
to MIMI under such agreement. During the fiscal years
ended December 31, 1994, 1995 and 1996, Ivy Emerging
Growth Fund paid MIMI $31,948, $45,324 and $89,558, respectively,
under such agreement. During the fiscal years ended
December 31, 1994, 1995 and 1996, Ivy Growth Fund paid
MIMI $103,232, $103,945 and $131,740, respectively
under such agreement. During the fiscal years ended
December 31, 1994, 1995 and 1996, Ivy Growth with
Income Fund paid MIMI $33,702, $60,915 and $87,182,
respectively, pursuant to such agreement.

TRANSFER AGENT AND DIVIDEND PAYING AGENT

Pursuant to a Transfer Agency and Shareholder
Service Agreement, IMSC, a wholly owned subsidiary of
MIMI, is the transfer agent for each Fund. Each Fund
(except for Ivy Bond Fund) pays a monthly fee at an
annual rate of $20.00 per open account. Ivy Bond Fund
pays $20.75 per open account for Class A, Class B and
Class C and $10.25 per open account for Class I. In
addition, each Fund pays a monthly fee at an annual rate of $4.48
per account that is closed plus certain out-of-pocket
expenses. Such fees and expenses for the fiscal year
ended December 31, 1996 for Ivy Bond Fund, Ivy Emerging
Growth Fund, Ivy Growth Fund and Ivy Growth with Income
Fund totalled $189,205, $206,456, $897,128 and
$233,399, respectively. Certain broker-dealers that
maintain shareholder accounts with a Fund through an omnibus
account provide transfer agent and other shareholder-related
services that would otherwise be provided by IMSC if the
individual accounts that comprise the omnibus account
were opened by their beneficial owners directly. IMSC
pays such broker- dealers a per account fee for each
open account within the omnibus account, or a fixed
rate (e.g., .10%) fee, based on the average daily net
asset value of the omnibus account (or a combination
thereof).

ADMINISTRATOR

Pursuant to an Administrative Services Agreement,
MIMI provides certain administrative services to each
Fund. As compensation for these services, each Fund
(except for Ivy Bond Fund with respect to its Class I
shares only) pays MIMI a monthly fee at the annual rate
of .10% of that Fund's average daily net assets. Ivy
Bond Fund pays MIMI a monthly fee at the annual rate

of .01% of its average daily net assets for Class I.
Such fees for the fiscal year ended December 31, 1996
for Ivy Bond Fund, Ivy Emerging Growth Fund, Ivy Growth
Fund and Ivy Growth with Income Fund totalled $104,220,
$77,362, $306,868 and $74,038, respectively.

Outside of providing administrative services to
the Trust, as described above, MIMI may also act on
behalf of IMDI in paying commissions to broker-dealers
with respect to sales of Class B and Class C shares of
each Fund.

AUDITORS

Coopers & Lybrand L.L.P., independent certified
public accountants, 200 East Las Olas Boulevard, Suite
1700, Ft. Lauderdale, Florida 33301, has been selected
as auditors for the Trust. The audit services
performed by Coopers & Lybrand L.L.P., include audits
of the annual financial statements of each of the funds
of the Trust. Other services provided principally relate
to filings with the SEC and the preparation of the Funds' tax
returns.

CAPITALIZATION AND VOTING RIGHTS

Ivy Bond Fund results from a reorganization of
Mackenzie Fixed Income Trust, a series of Mackenzie
Series Trust, which reorganization was approved by
shareholders of the Fund on December 15, 1994. The
capitalization of the Trust consists of an unlimited
number of shares of beneficial interest (no par value
per share). When issued, shares of each class of each Fund
are fully paid, non-assessable, redeemable and fully
transferable. No class of shares of a Fund has preemptive rights
or subscription rights.

Mackenzie Growth & Income Fund, a former series of the
Company, in connection with the reorganization between
that fund and Ivy Growth with Income Fund, and are not
offered for sale to the public. On February 29, 1996,
the Trustees of the Trust resolved by written consent
to establish a new class of shares designated as "Class
C" for all Ivy Fund portfolios, and to redesignate the
shares of beneficial interest of "Ivy Growth with Income Fund--
Class C" as shares of beneficial interest of "Ivy Growth
with Income Fund--Class D," which establishment and
redesignation, respectively, became effective on April
30, 1996. The voting, dividend, liquidation and other
rights, preferences, powers, restrictions, limitations,
qualifications, terms and conditions of the Class D
shares of Ivy Growth with Income Fund, as set forth in
Ivy Fund's Declaration of Trust, as amended from time to
time, will not be changed by this redesignation.]

Shareholders have the right to vote for the
election of Trustees of the Trust and on any and all
matters on which they may be entitled to vote by law or
by the provisions of the Trust's By-Laws. The Trust is
not required to hold a regular annual meeting of
shareholders, and it does not intend to do so. Shares
of each class of each Fund entitle their holders to one
vote per share (with proportionate voting for fractional shares).
shareholders of a Fund are entitled to vote alone on
matters that only affect that Fund, only the are
entitled to vote. All classes of shares of a Fund will
vote together, except with respect to the distribution
plan applicable to that Fund's Class A, Class B or
Class C shares or when a class vote is required by the
1940 Act. On matters relating to all funds of the
Trust, but affecting the funds differently, separate votes by
the shareholders of each fund are required. Approval of an
investment advisory agreement and a change in fundamental
policies would be regarded as matters requiring separate
voting by the shareholders of each fund of the Trust.
If the Trustees determine that a matter does not affect
the interests of a Fund, then the shareholders of that
Fund will not be entitled to vote on that matter.
Matters that affect the Trust in general, such as
ratification of the selection of independent public
accountants, will be voted upon collectively by the shareholders
of all funds of the Trust.

As used in this SAI and the Prospectus, the phrase
"majority vote of the outstanding shares" of a Fund
means the vote of the lesser of: (1) 67% of the shares
of that Fund (or of the Trust) present at a meeting if
the holders of more than 50% of the outstanding shares
are present in person or by proxy; or (2) more than 50%
of the outstanding shares of that Fund (or of the
Trust).

With respect to the submission to shareholder vote
of a matter requiring separate voting by a Fund, the
matter shall have been effectively acted upon with
respect to that Fund if a majority of the outstanding
voting securities of that Fund votes for the approval
of the matter, notwithstanding that: (1) the

matter has not been approved by a majority of the
outstanding voting securities of any other fund of the
Trust; or (2) the matter has not been approved by a
majority of the outstanding voting securities of the
Trust.

The Amended and Restated Declaration of Trust
provides that the holders of not less than two-thirds
of the outstanding shares of the Trust may remove a
person serving as trustee either by declaration in
writing or at a meeting called for such purpose. The
Trustees are required to call a meeting for the purpose of
considering the removal of a person serving as Trustee if
requested in writing to do so by the holders of not less than
10% of the outstanding shares of the Trust.
Shareholders will be assisted in communicating with
other shareholders in connection with the removal of a
Trustee as if Section 26(c) of the Act were applicable.

The Trust's shares do not have cumulative voting
rights and accordingly the holders of more than 50% of
the outstanding shares could elect the entire Board, in
which case the holders of the remaining shares would
not be able to elect any Trustees.

To the knowledge of the Trust, as of March 31,
1997, no shareholder owned beneficially or of record 5%
or more of any Fund's outstanding Class A shares.

To the knowledge of the Trust, as of March 31,
1997, no shareholder owned beneficially or of record 5%
or more of any Fund's outstanding Class B shares,
except that: of the outstanding Class B shares of Ivy
Bond Fund, Merrill Lynch Pierce Fenner & Smith, 4800
Deer Lake Drive E, 3rd Floor, Jacksonville, FL 32246,
owned of record 37,887.000 shares (6.03%); of the
outstanding Class B shares of Ivy Emerging Growth Fund, Merrill
Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive E, 3rd
Floor, Jacksonville, FL 32246, owned of record
192,598.000 shares (12.60%); and of the outstanding
Class B shares of Ivy Growth Fund, IBT (custodian) FBO
G. Pattyson, P.O. Box 11, Terrace Bay, Ontario, Canada
POT 2WO, owned of record 16,058.530 shares (7.38%).

To the knowledge of the Trust, as of March 31,
1997, no shareholder owned beneficially or of record 5%
or more of any Fund's outstanding Class C shares,
except that: of the outstanding Class C shares of Ivy
Bond Fund, Eva Realty Company, 3450 N Lake Shore Drive
#3806, Chicago, IL 60657, owned of record 32,617.075
shares (28.97%), Merrill Lynch Pierce Fenner & Smith,
4800 Deer Lake Drive E, 3rd Floor, Jacksonville, FL 32246, owned
of record 26,158,000 shares (23.23%), and Painewebber FBO
Hofstein & Widman PC 401(k) PSP, 1601 Market Street,
Suite #700, Philadelphia, PA 19103, owned of record
5,979.029 shares (5.31%); of the outstanding Class C
shares of Ivy Emerging Growth Fund, Merrill Lynch
Pierce Fenner & Smith, 4800 Deer Lake Drive E, 3rd
Floor, Jacksonville, FL 32246, owned of record 88,670.000 shares
(34.83%); of the outstanding Class C shares of Ivy Growth
Fund,

Wexford Clearing Services Corp FBO Rafter L. Cattle
Co., HRC 77 #441, Uvalde, TX 78801, owned of record
4,496.509 shares (81.59%), Antionette Tafrow, 64
Barbara Drive, Trenton, NJ 08619, owned of record
293.300 (5.32%), and The Ohio Company FBO J. Finnigan,
155 East Broad Street, Columbus, OH 45255, owned of
record 276.243 shares (5.01%); and of the outstadning Class C
shares of Ivy Growth with Income Fund, Anthony L. and Marie
E. Bassano JT TEN, 8934 Bari Court, Port Richie, FL
34668, owned of record 2,833.174 shares (47.54%),
Marsha L. Yarbrough, Route 2, Box 548, West Blocton, AL
36184, owned of record 1,727.854 shares (28.99%), and
IBT (custodian) FBO Royce G. Darby, 4760 S 35th Street,
Greenfield, WI 53221, owned of record 881.587
(14.79%).

As of March 31, 1997, there were no Class I shares
of Ivy Bond Fund outstanding.

Under Massachusetts law, the Trust's shareholders
could, under certain circumstances, be held personally
liable for the obligations of the Trust. However, the
Amended and Restated Declaration of Trust disclaims
liability of the shareholders, Trustees or officers of
the Trust for acts or obligations of the Trust, which
are binding only on the assets and property of the
Trust, and requires that notice of the disclaimer be given in
each contract or obligation entered into or executed by the
Trust or its Trustees. The Amended and Restated
Declaration of Trust provides for indemnification out
of Fund property for all loss and expense of any
shareholder of a Fund held personally liable for the
obligations of that Fund. The risk of a shareholder of
the Trust incurring financial loss on account of shareholder
liability is limited to circumstances in which the Trust
itself would be unable to meet its obligations and,
thus, should be considered remote. No series of the
Trust is liable for the obligations of any other series
of the Trust. However, because the Prospectus pertains
to more than one Fund, it is possible that one of the
Funds to which the Prospectus pertains might become
liable for any misstatement, inaccuracy, or incomplete
disclosure in the Prospectus concerning any other Fund to which
the Prospectus pertains.

NET ASSET VALUE

the close of regular trading on the Exchange, if that
is earlier, and that value is then converted into its
U.S. dollar equivalent at the foreign exchange rate in
effect at noon, Eastern time, on the day the value of
the foreign security is determined. If no sale is
reported at that time, the average between the current
bid and asked price is used. All other securities for which OTC
market quotations are readily available are valued at the
average between the current bid and asked price.
Interest will be recorded as accrued. Securities and
other assets for which market prices are not readily
available are valued at fair value as determined by IMI
and approved in good faith by the Board. Money market
instruments of the Fund are valued at amortized cost,
which approximates money market value.

A Fund's liabilities are allocated between its
Classes. The total of such liabilities allocated to a
Class plus that Class's distribution fee and any other
expenses specially allocated to that Class are then
deducted from the Class's proportionate interest in
that Fund's assets, and the resulting amount for each
Class is divided by the number of shares of that Class
outstanding to produce the net asset value per share.

Portfolio securities are valued and net asset
value per share is determined as of the close of
regular trading on the Exchange (normally 4:00 p.m.,
eastern time), every Monday through Friday (exclusive
of national business holidays). The Trust's offices
will be closed, and net asset value will not be
calculated, on the following national business holidays: New
Year's Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas
Day. On those days when either or both of the Funds'
Custodian or the Exchange close early as a result of
such day being a partial holiday or otherwise, the
Trust reserves the right to advance the time on that
day by which purchase and redemption requests must be
received.

When a Fund writes an option, an amount equal to
the premium received by that Fund is included in that
Fund's Statement of Assets and Liabilities as an asset
and as an equivalent liability. The amount of the
liability will be subsequently marked-to-market daily
to reflect the current market value of the option
written. The current market value of a written option is
the last sale on the principal exchange on which such option is
traded or, in the absence of a sale, the last offering
price.

option will be the last sale price on the principal
exchange on which the option is traded or, in the
absence of a sale, the last bid price. If a Fund
exercises a call option which it has purchased, the
cost of the security which that Fund purchased upon
exercise will be increased by the premium originally paid.

The sale of shares of a Fund will be suspended
during any period when the determination of its net
asset value is suspended pursuant to rules or orders of
the SEC and may be suspended by the Board whenever in
its judgment it is in the best interest of the
particular Fund to do so.

PORTFOLIO TURNOVER

Each Fund purchases securities that are believed
by IMI to have above average potential for capital
appreciation. Common stocks are disposed of in
situations where it is believed that potential for such
appreciation has lessened or that other common stocks
have a greater potential. Therefore, a Fund may purchase
and sell securities without regard to the length of time the
security is to be, or has been, held. A change in
securities held by a Fund is known as "portfolio
turnover" and may involve the payment by that Fund of
dealer markup or underwriting commission and other
transaction costs on the sale of securities, as well as
on the reinvestment of the proceeds in other
securities. A Fund's portfolio turnover rate is calculated by
dividing the lesser of purchases or sales of portfolio
securities for the most recently completed fiscal year
by the monthly average of the value of the portfolio
securities owned by the Fund during that year. For
purposes of determining a Fund's portfolio turnover
rate, all securities whose maturities at the time of
acquisition were one year or less are excluded. The
annual portfolio turnover rates for the Funds are provided in the
Prospectus under "The Funds' Financial Highlights."

REDEMPTIONS

Shares of each Fund are redeemed at their net
asset value next determined after a proper redemption
request has been received by IMSC, less any applicable
CDSC.

Unless a shareholder requests that the proceeds of
any redemption be wired to his or her bank account,
payment for shares tendered for redemption is made by
check within seven days after tender in proper form,
except that the Trust reserves the right to suspend the
right of redemption or to postpone the date of payment
upon redemption beyond seven days, (i) for any period
during which the Exchange is closed (other than customary weekend
and holiday closings) or during which trading on the
Exchange is restricted, (ii) for any period during
which an emergency exists as determined by the SEC as a
result of which disposal of securities owned by a Fund
is not reasonably practicable or it is not reasonably
practicable for the Fund to fairly determine the value
of its net assets, or (iii) for such other periods as the

SEC may by order permit for the protection of
shareholders of a Fund.

Under unusual circumstances, when the Board deems
it in the best interest of a Fund's shareholders, the
Fund may make payment for shares repurchased or
redeemed in whole or in part in securities of that Fund
taken at current values. If any such redemption in
kind is to be made, each Fund intends to make an
election pursuant to Rule 18f-1 under the 1940 Act. This will
require the particular Fund to redeem with cash at a
shareholder's election in any case where the redemption
involves less than $250,000 (or 1% of that Fund's net
asset value at the beginning of each 90-day period
during which such redemptions are in effect, if that
amount is less than $250,000). Should payment be made
in securities, the redeeming shareholder may incur
brokerage costs in converting such securities to cash.

The Trust may redeem those accounts of
shareholders who have maintained an investment,
including sales charges paid, of less than $1,000 in a
Fund for a period of more than 12 months. All accounts
below that minimum will be redeemed simultaneously when
MIMI deems it advisable. The $1,000 balance will be determined
by actual dollar amounts invested by the shareholder,
unaffected by market fluctuations. The Trust will
notify any such shareholder by certified mail of its
intention to redeem such account, and the shareholder
shall have 60 days from the date of such letter to
invest such additional sums as shall raise the value of
such account above that minimum. Should the shareholder
fail to forward such sum within 60 days of the date of the
Trust's letter of notification, the Trust will redeem the
shares held in such account and transmit the redemption
in value thereof to the shareholder. However, those
shareholders who are investing pursuant to the
Automatic Investment Method will not be redeemed
automatically unless they have ceased making payments
pursuant to the plan for a period of at least six consecutive
months, and these shareholders will be given six-months'
notice by the Trust before such redemption.
Shareholders in a qualified retirement, pension or
profit sharing plan who wish to avoid tax consequences
must "rollover" any sum so redeemed into another
qualified plan within 60 days. The Trustees of the Trust may
change the minimum account size.

If a shareholder has given authorization for
telephonic redemption privilege, shares can be redeemed
and proceeds sent by Federal wire to a single
previously designated bank account. Delivery of the
proceeds of a wire redemption request of $250,000 or
more may be delayed by a Fund for up to seven days if deemed
appropriate under then-current market conditions. The Trust
reserves the right to change this minimum or to terminate
the telephonic redemption privilege without prior
notice. The Trust cannot be responsible for the
efficiency of the Federal wire system of the
shareholder's dealer of record or bank. The
shareholder is responsible for any charges by the shareholder's
bank.

Each Fund employs reasonable procedures that
require personal identification prior to acting on
redemption or exchange instructions communicated by
telephone to confirm that such instructions are
genuine. In the absence of such instructions, a Fund
may be liable for any losses due to unauthorized or
fraudulent telephone instructions.

CONVERSION OF CLASS B SHARES

As described in the Prospectus, Class B shares of
each Fund will automatically convert to Class A shares
of the respective Fund, based on the relative net asset
values per share of the two classes, no later than the
month following the eighth anniversary of the initial
issuance of such Class B shares of the particular Fund
occurs. For the purpose of calculating the holding period
required for conversion of Class B shares, the date of initial
issuance shall mean: (1) the date on which such Class B
shares were issued, or (2) for Class B shares obtained
through an exchange, or a series of exchanges, (subject
to the exchange privileges for Class B shares) the date
on which the original Class B shares were issued. For
purposes of conversion of Class B shares, Class B
shares purchased through the reinvestment of dividends
and capital gain distributions paid in respect of Class
B shares will be held in a separate sub-account. Each time
any Class B shares in the shareholder's regular account (other
than those shares in the sub-account) convert to Class A
shares, a pro rata portion of the Class B shares in the
sub-account will also convert to Class A shares. The
portion will be determined by the ratio that the
shareholder's Class B shares converting to Class A
shares bears to the shareholder's total Class B shares
not acquired through the reinvestment of dividends and capital
gain distributions.

TAXATION

The following is a general discussion of certain
tax rules thought to be applicable with respect to the
Funds. It is merely a summary and is not an exhaustive
discussion of all possible situations or of all
potentially applicable taxes. Accordingly,
shareholders and prospective shareholders should consult a
competent tax advisor about the tax consequences to them of
investing in the Funds.

forward contracts (other than those on foreign
currencies); or (iii) foreign currencies (or options,
futures, or forward contracts on foreign currencies)
that are not directly related to the particular Fund's
principal business of investing in stock or securities
(or options and futures with respect to stock or
securities) (the "30% Limitation"); and (c) diversify its
holdings so that, at the end of each fiscal quarter, (i) at
least 50% of the market value of the particular Fund's
assets is represented by cash, U.S. Government
securities, the securities of other regulated
investment companies and other securities, with such
other securities limited, in respect of any one issuer,
to an amount not greater than 5% of the value of the particular
Fund's total assets and 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25%
of the value of its total assets is invested in the
securities of any one issuer (other than U.S.
Government securities and the securities of other
regulated investment companies).

As a regulated investment company, each Fund
generally will not be subject to U.S. Federal income
tax on its income and gains that it distributes to
shareholders, if at least 90% of its investment company
taxable income (which includes, among other items,
dividends, interest and the excess of any short-term
capital gains over long-term capital losses) for the taxable year
is distributed. Each Fund intends to distribute all
such income.

Amounts not distributed on a timely basis in
accordance with a calendar year distribution
requirement are subject to a nondeductible 4% excise
tax at the Fund level. To avoid the tax, each Fund
must distribute during each calendar year, (1) at least
98% of its ordinary income (not taking into account any capital
gains or losses) for the calendar year, (2) at least 98%
of its capital gains in excess of its capital losses
(adjusted for certain ordinary losses) for a one-year
period generally ending on October 31 of the calendar
year, and (3) all ordinary income and capital gains for
previous years that were not distributed during such
years. To avoid application of the excise tax, each
Fund intends to make distributions in accordance with the
calendar year distribution requirements. A distribution will be
treated as paid on December 31 of the current calendar
year if it is declared by the particular Fund in
October, November or December of the year with a record
date in such a month and paid by that Fund during
January of the following year. Such distributions will
be taxable to shareholders in the calendar year the
distributions are declared, rather than the calendar
year in which the distributions are received.

OPTIONS, FUTURES AND FOREIGN CURRENCY FORWARD CONTRACTS

Fund. If the Fund enters into a closing transaction,
the difference between the amount paid to close out its
position and the premium received is short-term capital
gain or loss. If a call option written by a Fund is
exercised, thereby requiring the Fund to sell the
underlying security, the premium will increase the
amount realized upon the sale of such security and any
resulting gain or loss will be a capital gain or loss, and will
be long-term or short-term depending upon the holding
period of the security. With respect to a put or call
option that is purchased by a Fund, if the option is
sold, any resulting gain or loss will be a capital gain
or loss, and will be long-term or short-term, depending
upon the holding period of the option. If the option
expires, the resulting loss is a capital loss and is
long-term or short-term, depending upon the holding period of the
option. If the option is exercised, the cost of the
option, in the case of a call option, is added to the
basis of the purchased security and, in the case of a
put option, reduces the amount realized on the
underlying security in determining gain or loss.

Some of the options, futures and foreign currency
forward contracts in which a Fund may invest may be
"section 1256 contracts." Gains (or losses) on these
contracts generally are considered to be 60% long-term
and 40% short-term capital gains or losses; however, as
described below, foreign currency gains or losses
arising from certain section 1256 contracts are ordinary
in character. Also, section 1256 contracts held by a Fund at the
end of each taxable year (and on certain other dates
prescribed in the Code) are "marked-to-market" with the
result that unrealized gains or losses are treated as
though they were realized.

The transactions in options, futures and forward
contracts undertaken by a Fund may result in
"straddles" for Federal income tax purposes. The
straddle rules may affect the character of gains or
losses realized by a Fund. In addition, losses realized
by a Fund on positions that are part of a straddle may be
deferred under the straddle rules, rather than being taken into
account in calculating the taxable income for the taxable
year in which such losses are realized. Because only a
few regulations implementing the straddle rules have
been promulgated, the consequences of such transactions
to a Fund are not entirely clear. The straddle rules
may increase the amount of short-term capital gain
realized by a Fund, which is taxed as ordinary income
when distributed to shareholders.

A Fund may make one or more of the elections
available under the Code which are applicable to
straddles. If a Fund makes any of the elections, the
amount, character and timing of the recognition of
gains or losses from the affected straddle positions
will be determined under rules that vary according to
the election(s) made. The rules applicable under certain of the
elections may operate to accelerate the recognition of
gains or losses from the affected straddle positions.

Because application of the straddle rules may
affect the character of gains or losses, defer losses
and/or accelerate the recognition of gains or losses
from the affected straddle positions, the amount which
must be distributed to shareholders as ordinary income
or long-term capital gain may be increased or decreased
substantially as compared to a fund that did not engage
in such transactions.

The 30% Limitation and the diversification
requirements applicable to a Fund's assets may limit
the extent to which a Fund will be able to engage in
transactions in options, futures and forward contracts.

CURRENCY FLUCTUATIONS -- "SECTION 988" GAINS OR LOSSES

Gains or losses attributable to fluctuations in
exchange rates which occur between the time a Fund
accrues receivables or liabilities denominated in a
foreign currency and the time the Fund actually
collects such receivables or pays such liabilities
generally are treated as ordinary income or ordinary loss.
Similarly, on disposition of some investments, including debt
securities denominated in a foreign currency and certain
options, futures and forward contracts, gains or losses
attributable to fluctuations in the value of the
foreign currency between the date of acquisition of the
security or contract and the date of disposition also
are treated as ordinary gain or loss. These gains and
losses, referred to under the Code as "section 988"
gains or losses, increase or decrease the amount of a Fund's
investment company taxable income available to be distributed
to its shareholders as ordinary income.

INVESTMENT IN PASSIVE FOREIGN INVESTMENT COMPANIES

A Fund may invest in shares of foreign
corporations which may be classified under the Code as
passive foreign investment companies ("PFICs"). In
general, a foreign corporation is classified as a PFIC
if at least one-half of its assets constitute
investment-type assets, or 75% or more of its gross
income is investment-type income. If a Fund receives a so-called
"excess distribution" with respect to PFIC stock, the
Fund itself may be subject to a tax on a portion of the
excess distribution, whether or not the corresponding
income is distributed by the Fund to shareholders. In
general, under the PFIC rules, an excess distribution
is treated as having been realized ratably over the
period during which a Fund held the PFIC shares. A Fund
itself will be subject to tax on the portion, if any, of an
excess distribution that is so allocated to prior Fund taxable
years and an interest factor will be added to the tax,
as if the tax had been payable in such prior taxable
years. Certain distributions from a PFIC as well as
gain from the sale of PFIC shares are treated as excess
distributions. Excess distributions are characterized
as ordinary income even though, absent application of
the PFIC rules, certain excess distributions might have
been classified as capital gain.

A Fund may be eligible to elect alternative tax
treatment with respect to PFIC shares. Under an
election that currently is available in some
circumstances, a Fund generally would be required to
include in its gross income its share of the earnings
of a PFIC on a current basis, regardless of whether distributions
are received from the PFIC in a given year. If this
election were made, the special rules, discussed above,
relating to the taxation of excess distributions, would
not apply. In addition, other elections may become
available that would affect the tax treatment of PFIC
shares held by a Fund.

DEBT SECURITIES ACQUIRED AT A DISCOUNT

Some of the debt securities (with a fixed maturity
date of more than one year from the date of issuance)
that may be acquired by a Fund may be treated as debt
securities that are issued originally at a discount.
Generally, the amount of the original issue discount
("OID") is treated as interest income and is included
in income over the term of the debt security, even
though payment of that amount is not received until a later time,
usually when the debt security matures.

If a Fund invests in certain high yield original
issue discount obligations issued by corporations, a
portion of the original issue discount accruing on the
obligation may be eligible for the deduction for
dividends received by corporations. In such event,
dividends of investment company taxable income received
from the Fund by its corporate shareholders, to the
extent attributable to such portion of accrued original
issue discount, may be eligible for this deduction for
dividends received by corporations if so designated by
the Fund in a written notice to shareholders.

Some of the debt securities (with a fixed maturity
date of more than one year from the date of issuance)
that may be acquired by a Fund in the secondary market
may be treated as having market discount. Generally,
gain recognized on the disposition of, and any partial
payment of principal on, a debt security having market
discount is treated as ordinary income to the extent
the gain, or principal payment, does not exceed the
"accrued market discount" on such debt security. In addition,
the deduction of any interest expenses attributable to debt
securities having market discount may be deferred.
Market discount generally accrues in equal daily
installments. A Fund may make one or more of the
elections applicable to debt securities having market
discount, which could affect the character and timing
of recognition of income.

amount is not received until a later time, usually when
the debt security matures. A Fund may make one or more
of the elections applicable to debt securities having
acquisition discount, or OID, which could affect the
character and timing of recognition of income.

A Fund generally will be required to distribute
dividends to shareholders representing discount on debt
securities that is currently includible in income, even
though cash representing such income may not have been
received by a Fund. Cash to pay such dividends may be
obtained from sales proceeds of securities held by a
Fund.

DISTRIBUTIONS

Distributions of investment company taxable income
are taxable to a U.S. shareholder as ordinary income,
whether paid in cash or shares. Dividends paid by a
Fund to a corporate shareholder, to the extent such
dividends are attributable to dividends received from
U.S. corporations by the Fund, may qualify for the
dividends received deduction. However, the revised
alternative minimum tax applicable to corporations may
reduce the value of the dividends received deduction.
Distributions of net capital gains (the excess of net long-term
capital gains over net short-term capital losses), if any,
designated by a Fund as capital gain dividends, are
taxable as long-term capital gains, whether paid in
cash or in shares, regardless of how long the
shareholder has held a Fund's shares and are not
eligible for the dividends received deduction.
Shareholders receiving distributions in the form of newly issued
shares will have a cost basis in each share received
equal to the net asset value of a share of a Fund on
the distribution date. A distribution of an amount in
excess of a Fund's current and accumulated earnings and
profits will be treated by a shareholder as a return of
capital which is applied against and reduces the
shareholder's basis in his or her shares. To the extent that the
amount of any such distribution exceeds the
shareholder's basis in his or her shares, the excess
will be treated by the shareholder as gain from a sale
or exchange of the shares. Shareholders will be
notified annually as to the U.S. Federal tax status of
distributions and shareholders receiving distributions
in the form of newly issued shares will receive a report as to
the net asset value of the shares received.

If the net asset value of shares is reduced below
a shareholder's cost as a result of a distribution by a
Fund, such distribution generally will be taxable even
though it represents a return of invested capital.
Shareholders should be careful to consider the tax
implications of buying shares just prior to a
distribution. The price of shares purchased at this time may
reflect the amount of the forthcoming distribution. Those
purchasing just prior to a distribution will receive a
distribution which generally will be taxable to them.

DISPOSITION OF SHARES

Upon a redemption, sale or exchange of his or her
shares, a shareholder will realize a taxable gain or
loss depending upon his or her basis in the shares.
Such gain or loss will be treated as capital gain or
loss if the shares are capital assets in the
shareholder's hands and generally will be long-term or
short-term, depending upon the shareholder's holding period for
the shares. Any loss realized on a redemption sale or
exchange will be disallowed to the extent the shares
disposed of are replaced (including through
reinvestment of dividends) within a period of 61 days
beginning 30 days before and ending 30 days after the
shares are disposed of. In such a case, the basis of
the shares acquired will be adjusted to reflect the disallowed
loss. Any loss realized by a shareholder on the sale of
Fund shares held by the shareholder for six-months or
less will be treated for tax purposes as a long-term
capital loss to the extent of any distributions of
capital gain dividends received or treated as having
been received by the shareholder with respect to such
shares.

In some cases, shareholders will not be permitted
to take all or portion of their sales loads into
account for purposes of determining the amount of gain
or loss realized on the disposition of their shares.
This prohibition generally applies where (1) the
shareholder incurs a sales load in acquiring the shares
of a Fund, (2) the shares are disposed of before the 91st
day after the date on which they were acquired, and (3) the
shareholder subsequently acquires shares in a Fund or another
regulated investment company and the otherwise
applicable sales charge is reduced under a
"reinvestment right" received upon the initial purchase
of Fund shares. The term "reinvestment right" means
any right to acquire shares of one or more regulated
investment companies without the payment of a sales load or with
the payment of a reduced sales charge. Sales charges
affected by this rule are treated as if they were
incurred with respect to the shares acquired under the
reinvestment right. This provision may be applied to
successive acquisitions of fund shares.

FOREIGN WITHHOLDING TAXES

Income received by a Fund from sources within a
foreign country may be subject to withholding and other
taxes imposed by that country.

share of foreign income and similar taxes in computing
his or her taxable income or to use it as a foreign tax
credit against his or her U.S. Federal income taxes,
subject to limitations. No deduction for foreign taxes
may be claimed by a shareholder who does not itemize
deductions. Foreign taxes generally may not be
deducted by a shareholder that is an individual in computing the
alternative minimum tax. Each shareholder will be
notified within 60 days after the close of a Fund's
taxable year whether the foreign taxes paid by the Fund
will "pass-through" for that year and, if so, such
notification will designate (1) the shareholder's
portion of the foreign taxes paid to each such country
and (2) the portion of the dividend which represents
income derived from sources within each such country.

Generally, a credit for foreign taxes is subject
to the limitation that it may not exceed the
shareholder's U.S. tax attributable to his or her total
foreign source taxable income. For this purpose, if a
Fund makes the election described in the preceding
paragraph, the source of that Fund's income flows
through to its shareholders. With respect to a Fund, gains from
the sale of securities generally will be treated as
derived from U.S. sources and section 988 gains will be
treated as ordinary income derived from U.S. sources.
The limitation on the foreign tax credit is applied
separately to foreign source passive income, including
foreign source passive income received from a Fund. In
addition, the foreign tax credit may offset only 90% of
the revised alternative minimum tax imposed on corporations and
individuals.

The foregoing is only a general description of the
foreign tax credit under current law. Because
application of the credit depends on the particular
circumstances of each shareholder, shareholders are
advised to consult their own tax advisers.

BACKUP WITHHOLDING

Each Fund will be required to report to the
Internal Revenue Service ("IRS") all taxable
distributions as well as gross proceeds from the
redemption of the particular Fund's shares, except in
the case of certain exempt shareholders. All such
distributions and proceeds will be subject to withholding of
Federal income tax at a rate of 31% ("backup withholding") in
the case of non-exempt shareholders if (1) the
shareholder fails to furnish a Fund with and to certify
the shareholder's correct taxpayer identification
number or social security number, (2) the IRS notifies
the shareholder or the particular Fund that the
shareholder has failed to report properly certain interest and
dividend income to the IRS and to respond to notices to
that effect, or (3) when required to do so, the
shareholder fails to certify that he or she is not
subject to backup withholding. If the withholding
provisions are applicable, any such distributions or
proceeds, whether reinvested in additional shares or taken in
cash, will be reduced by the amounts required to be
withheld.

Distributions may also be subject to additional
state, local and foreign taxes depending on each
shareholder's particular situation. Non-U.S.
shareholders may be subject to U.S. tax rules that
differ significantly from those summarized above. This
discussion does not purport to deal with all of the tax
consequences applicable to a Fund or shareholders. Shareholders
are advised to consult their own tax advisers with
respect to the particular tax consequences to them of
an investment in a Fund.

PERFORMANCE INFORMATION

Performance information for the classes of shares
of the Funds may be compared, in reports and
promotional literature, to: (i) the S&P 500 Index, the
Dow Jones Industrial Average ("DJIA"), or other
unmanaged indices so that investors may compare each
Fund's results with those of a group of unmanaged securities
widely regarded by investors as representative of the
securities markets in general; (ii) other groups of
mutual funds tracked by Lipper Analytical Services, a
widely used independent research firm that ranks mutual
funds by overall performance, investment objectives and
assets, or tracked by other services, companies,
publications or other criteria; and (iii) the Consumer Price
Index (measure for inflation) to assess the real rate of
return from an investment in a Fund. Unmanaged indices
may assume the reinvestment of dividends but generally
do not reflect deductions or administrative and
management costs and expenses.

In addition, the Trust may, from time to time,
include the yield (with respect to Ivy Bond Fund only),
the average annual total return and the cumulative
total return of shares of a Fund in advertisements,
promotional literature or reports to shareholders or
prospective investors.

YIELD. Quotations of yield for a specific Class
of shares of a Fund will be based on all investment
income attributable to that Class earned during a
particular 30-day (or one month) period (including
dividends and interest), less expenses attributable to
that Class accrued during the period ("net investment
income"), and will be computed by dividing the net
investment income per share of that Class earned during the
period by the maximum offering price per share (in the case of
Class A shares) or the net asset value per share (in the
case of Class B and Class C shares) on the last day of
the period, according to the following formula:

YIELD = 2[({(a-b)/cd} + 1){superscript
6}-1]

Where: a = dividends and interest earned
during the period attributable
to a specific Class of shares,

b = expenses accrued for the
period attributable to that
Class (net of reimbursements),

c = the average daily number of
shares of that Class
outstanding during the period
that were entitled to receive dividends,
and

d = the maximum offering price per
share (in the case of Class A
shares) or the net asset value
per share (in the case of
Class B shares, Class C shares and Class
I shares) on the last day of the period.

The yield for Class A, Class B and Class C shares
of Ivy Bond Fund for the 30-day period ended December
31, 1996 was 6.89%, 6.51%, and 6.45%, respectively. As
of December 31, 1996, there were no outstanding Class I
shares of Ivy Bond Fund.

AVERAGE ANNUAL TOTAL RETURN. Quotations of
standardized average annual total return ("Standardized
Return") for a specific Class of shares of a Fund will
be expressed in terms of the average annual compounded
rate of return that would cause a hypothetical
investment in that Class of a Fund made on the first
day of a designated period to equal the ending redeemable value
("ERV") of such hypothetical investment on the last day of
the designated period, according to the following
formula:

P(1 + T){superscript n} = ERV

Where: P = a hypothetical initial payment of
$1,000 to purchase shares of a
specific Class

T = the average annual total return of
shares of that Class

n = the number of years

ERV = the ending redeemable value of a
hypothetical $1,000 payment made at
the beginning of the period.

For purposes of the above computation for a Fund,
it is assumed that all dividends and capital gains
distributions made by a Fund are reinvested at net
asset value in additional shares of the same Class
during the designated period. In calculating the
ending redeemable value for Class A shares and assuming
complete redemption at the end of the applicable period, the
maximum 5.75% (4.75% for Ivy Bond Fund) sales charge is
deducted from the initial $1,000 payment and, for Class
B and Class C shares, the applicable CDSC imposed upon
redemption of Class B or Class C shares held for the
period is deducted. Standardized Return quotations for
the Funds do not take into account any required
payments for federal or state income taxes.
Standardized Return quotations for Class B shares for periods of
over eight years will reflect conversion of the Class B
shares to Class A shares at the end of the eighth year.
Standardized

Return quotations are determined to the nearest 1/100
of 1%.

A Fund may, from time to time, include in
advertisements, promotional literature or reports to
shareholders or prospective investors total return data
that are not calculated according to the formula set
forth above ("Non-Standardized Return"). Neither
initial nor CDSCs are taken into account in calculating Non-
Standardized Return; a sales charge, if deducted, would reduce
the return.

The following tables summarize the calculation of
Standardized and Non-Standardized Return for the Class A,
Class B, Class C and Class I (for Ivy Bond Fund) shares
of the Funds for the periods indicated. In determining
the average annual total return for a specific Class of
shares of a Fund, recurring fees, if any, that are
charged to all shareholder accounts are taken into
consideration. For any account fees that vary with the
size of the account of a Fund, the account fee used for
purposes of the following computations is assumed to be the fee
that would be charged to the mean account size of the
particular Fund. Shares of Ivy Bond Fund outstanding
as of March 31, 1994 were designated Class A shares of
the Fund. Shares of each of Ivy Emerging Growth Fund,
Ivy Growth Fund and Ivy Growth with Income Fund
outstanding as of October 22, 1993 have been
redesignated as "Class A" shares of each respective Fund.

IVY BOND FUND

STANDARDIZED RETURN[*]
CLASS A[1] CLASS B[2] CLASS C[3] CLASS
I[7]

One year ended
December 31,
1996: 2.93% 2.25% N/A
N/A
Five years ended
December 31,
1996: 7.67% N/A N/A
N/A

Ten years ended
December 31,
1996: 9.30% N/A N/A
N/A

Inception[#] to
December 31,
1996:[8] 8.73% 6.62% 7.81%
N/A

NON-STANDARDIZED RETURN[**]
CLASS A[4] CLASS B[5] CLASS C[6] CLASS
I[7]

One year ended
December 31,

1996: 8.06% 7.25% N/A
N/A
Five years ended
December 31,
1996: 8.72% N/A N/A
N/A

Ten years ended
December 31,
1996: 9.84% N/A N/A
N/A

Inception[#] to
December 31,
1996:[8] 9.19% 7.59% 8.81%
N/A

_________________________

[*] The Standardized Return figures for Class A shares
reflect the deduction of the maximum initial sales
charge of 4.75%. The Standardized Return figures
for Class B and C shares reflect the deduction of
the applicable CDSC imposed on a redemption of
Class B or C shares held for the period. Class I
shares are not subject to an initial or a CDSC;
therefore, the Non-Standardized Return figures would be
identical to the Standardized Return figures.

[**] The Non-Standardized Return figures do not reflect
the deduction of any initial sales charge or CDSC.

[#] Until December 31, 1994, MIMI served as investment
adviser to Ivy Bond Fund, which until that date
was a series of Mackenzie Series Trust. The
inception date for the Fund (and the Class A
shares of the Fund) was September 6, 1985; the
inception date for the Class B and Class I shares of the
Fund was April 1, 1994; and the inception date for the Class
C shares of the Fund is April 30, 1996.

[1] The Standardized Return figures for Class A shares
reflect expense reimbursement. Without expense
reimbursement, the Standardized Return for Class A
shares for the one year ended December 31, 1996,
the five years ended December 31, 1996, the ten
years ended December 31, 1996 and the period from
inception through December 31, 1996 would have been
2.93%, 7.66%, 6.88% and 1.41%, respectively.

[2] The Standardized Return figures for Class B shares
reflect expense reimbursement. Without expense
reimbursement, the Standardized Return for Class B
shares for the one year ended December 31, 1996
and the period from inception through December 31,
1996 would have been 2.25% and 6.62%,
respectively. (Since the inception date for Class B shares
of the Fund was April 1, 1994, there were no Class B
shares outstanding for the duration of the five
year or ten year periods ending December 31,
1996.)

[3] The Standardized Return figure for Class C shares
reflects expense reimbursement. Without expense
reimbursement, the Standardized Return for Class C
shares for the period from inception through
December 31, 1996 would have been 7.81%. (Since
the inception date for Class C shares of the Fund was
April 30, 1996, there were no Class C shares outstanding for
the duration of the one year, five year or ten year
periods ending December 31, 1996.)

[4] The Non-Standardized Return figures for Class A
shares reflect expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class A shares for the one year ended December
31, 1996, the five years ended December 31, 1996,
the ten years ended December 31, 1996 and the
period from inception through December 31, 1996
would have been 8.06%, 8.71%, 7.42% and 1.86%,
respectively.

[5] The Non-Standardized Return figures for Class B
shares reflect expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class B shares for the one year ended December
31, 1996 and the period from inception through
December 31, 1996 would have been 7.25% and 7.59%,
respectively. (Since the inception date for Class
B shares of the Fund was April 1, 1994, there were
no Class B shares outstanding for the duration of the
five year or ten year periods ending December 31, 1996.)

[6] The Non-Standardized Return figure for Class C
shares reflects expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class C shares for the period from inception
through December 31, 1996 would have been 8.81%.
(Since the inception date for Class C shares of
the Fund was April 30, 1996, there were no Class C
shares outstanding for the duration of the one year,
five year or ten year periods ending December 31, 1996.)

[7] No Class I shares were outstanding during the time
periods indicated.

[8] The total return for a period less than a full
year is calculated on an aggregate basis and is
not annualized.

IVY EMERGING GROWTH FUND:

STANDARDIZED RETURN[*]
CLASS A[1] CLASS B[2] CLASS
C[3]

One year ended
December 31,
1996: 11.71% 12.65% N/A

Inception[#] to
December 31,
1996:[7] 26.69% 17.44%
(5.48%)

NON-STANDARDIZED RETURN[**]
CLASS A[4] CLASS B[5] CLASS
C[6]

One year ended
December 31,
1996: 18.52% 17.65% N/A

Inception[#] to
December 31,
1996:[7] 28.71% 18.10%
(4.48%)

_________________________

[*] The Standardized Return figures for Class A shares
reflect the deduction of the maximum initial sales
charge of 5.75%. The Standardized Return figures
for Class B and C shares reflect the deduction of
the applicable CDSC imposed on a redemption of
Class B or C shares held for the period.

[**] The Non-Standardized Return figures do not reflect
the deduction of any initial sales charge or CDSC.

[#] The inception date for Ivy Emerging Growth Fund
was March 3, 1993. Class A shares of the Fund
were first offered for sale to the public on April
30, 1993, and Class B shares of the Fund were
first offered for sale to the public on October
23, 1993. The inception date for the Class C shares
of the Fund was April 30, 1996

[1] The Standardized Return figures for Class A shares
reflect expense reimbursement. Without expense
reimbursement, the Standardized Return for Class A
shares for the one year ended December 31, 1996
and the period from inception through December 31,
1996 would have been 11.71% and 26.65%,
respectively.

April 30, 1996, there were no Class C shares
outstanding for the duration of the one year
period ending December 31, 1996.)

[4] The Non-Standardized Return figures for Class A
shares reflect expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class A shares for the one year ended December
31, 1996 and the period from inception through
December 31, 1996 would have been 18.52% and
28.67%, respectively.

[6] The Non-Standardized Return figure for Class C
shares reflects expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class C shares for the period from inception
through December 31, 1996 would have been (4.48%).
(Since the inception date for Class C shares of
the Fund was April 30, 1996, there were no Class C
shares outstanding for the duration of the one year
period ending December 31, 1996.)

[7] The total return for a period less than a full
year is calculated on an aggregate basis and is
not annualized.

IVY GROWTH FUND:

STANDARDIZED RETURN[*]
CLASS A[1] CLASS B[2] CLASS
C[3]

One year ended
December 31,
1996: 10.48% 11.02% N/A

Five years ended
December 31,
1996: 10.03% N/A N/A

Ten years ended
December 31,
1996: 11.09% N/A N/A

Inception[#] to
December 31,
1996:[7] 10.75% 11.36% 4.20%

NON-STANDARDIZED RETURN[**]

CLASS A[4] CLASS B[5] CLASS
C[6]

One year ended
December 31,
1996: 17.22% 16.02% N/A

Five years ended
December 31,
1996: 11.34% N/A N/A

Ten years ended
December 31,
1996: 11.75% N/A N/A

Inception[#] to
December 31,
1996:[7] 10.94% 12.09% 5.20%

_________________________

[**] The Non-Standardized Return figures do not reflect
the deduction of any initial sales charge or CDSC.

[#] The inception date for Ivy Growth Fund (and for
Class A shares of the Fund) was March 1, 1984. The
inception date for Class B shares of the Fund was
October 23, 1993. The inception date for Class C
shares of the Fund is April 30, 1996

[2] The Standardized Return figures for Class B shares
reflect expense reimbursement. Without expense
reimbursement, the Standardized Return for Class B
shares for the one year ended December 31, 1996
and the period from inception through December 31,
1996 would have been 11.02% and 11.28%,
respectively. (Since the inception date for Class B shares
of the Fund was October 23, 1993, there were no Class B
shares outstanding for the duration of the five year
or ten year periods ending December 31, 1996.)

[3] The Standardized Return figure for Class C shares
reflects expense reimbursement. Without expense
reimbursement, the Standardized Return for Class C
shares for the period from inception through
December 31, 1996 would have been 4.70%. (Since
the inception date for Class C shares of the Fund was
April 30, 1996, there were no Class C shares outstanding for
the duration of the one year, five year or ten year
periods ending December 31, 1996.)

[5] The Non-Standardized Return figures for Class B
shares reflect expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class B shares for the one year ended December
31, 1996 and the period from inception through
December 31, 1996 would have been 16.02% and
12.02%, respectively. (Since the inception date
for Class B shares of the Fund was October 23, 1993,
there were no Class B shares outstanding for the duration of
the five year or ten year periods ending December 31,
1996.)

[6] The Non-Standardized Return figure for Class C
shares reflects expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class C shares for the period from inception
through December 31, 1996 would have been 5.20%.
(Since the inception date for Class C shares of
the Fund was April 30, 1996, there were no Class C
shares outstanding for the duration of the one year,
five year or ten year periods ending December 31, 1996.)

[7] The total return for a period less than a full
year is calculated on an aggregate basis and is
not annualized.

IVY GROWTH WITH INCOME FUND:

STANDARDIZED RETURN[*]
CLASS A[1] CLASS B[2] CLASS
C[3]

One year ended
December 31,
1996: 13.53% 14.59% N/A

Five years ended
December 31,
1996: 10.41% N/A N/A

Ten years ended
December 31,
1996: 12.48% N/A N/A

Inception[#] to
December 31,
1996:[7] 14.99% 11.58%
11.37%

NON-STANDARDIZED RETURN[**]
CLASS A[4] CLASS B[5] CLASS
C[6]

One year ended
December 31,
1996: 20.46% 19.59% N/A

Five years ended
December 31,
1996: 11.73% N/A N/A

Ten years ended
December 31,
1996: 13.15% N/A N/A

Inception[#] to
December 31,
1996:[7] 15.53% 12.31%
12.37%

_________________________

[**] The Non-Standardized Return figures do not reflect
the deduction of any initial sales charge or CDSC.

[#] The inception date for Ivy Growth with Income Fund
(and the Class A shares of the Fund) was April 1,
1984; the inception date for Class B shares of the
Fund was October 23, 1993; and the inception date
for the Class C shares of the Fund is April 30,
1996. The inception of Class C shares of the Fund
coincided with the redesignation as "Class D" those shares
of Ivy Growth with Income Fund that were initially issued
as "Ivy Growth with Income Fund -- Class C" to
shareholders of Mackenzie Growth & Income Fund, a
former series of the Company, in connection with
the reorganization between that fund and Ivy
Growth with Income Fund, which shares are not
offered for sale to the public.

[1] The Standardized Return figures for Class A shares
reflect

expense reimbursement. Without expense
reimbursement, the Standardized Return for Class A
shares for the one year ended December 31, 1996,
the five years ended December 31, 1996, the ten
years ended December 31, 1996 and the period from
inception through December 31, 1996 would have been
13.53%, 10.41%, 12.47% and 14.98%, respectively.

[2] The Standardized Return figures for Class B shares
reflect expense reimbursement. Without expense
reimbursement, the Standardized Return for Class B
shares for the one year ended December 31, 1996
and the period from inception through December 31,
1996 would have been 14.59% and 11.58%,
respectively. (Since the inception date for Class B shares
of the Fund was October 23, 1993, there were no Class B
shares outstanding for the duration of the five year
or ten year periods ending December 31, 1996.)

[3] The Standardized Return figure for Class C shares
reflects expense reimbursement. Without expense
reimbursement, the Standardized Return for Class C
shares for the period from inception through
December 31, 1996 would have been 11.37%. (Since
the inception date for Class C shares of the Fund was
April 30, 1996, there were no Class C shares outstanding for
the duration of the one year, five year or ten year
periods ending December 31, 1996.)

[5] The Non-Standardized Return figures for Class B
shares reflect expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class B shares for the one year ended December
31, 1996 and the period from inception through
December 31, 1996 would have been 19.59% and
12.31%, respectively. (Since the inception date
for Class B shares of the Fund was October 23, 1993,
there were no Class B shares outstanding for the duration of
the five year or ten year periods ending December 31,
1996.)

[6] The Non-Standardized Return figure for Class C
shares reflects expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class C shares for the period from inception
through December 31, 1996 would have been 12.37%.
(Since the inception date for Class C shares of
the Fund was April 30, 1996, there were no Class C
shares outstanding for the duration of the one year,
five year or ten year periods ending December 31, 1996.)

[7] The total return for a period less than a full
year is calculated on an aggregate basis and is
not annualized.

CUMULATIVE TOTAL RETURN. Cumulative total return
is the cumulative rate of return on a hypothetical
initial investment of $1,000 in a specific Class of
shares of a Fund for a specified period. Cumulative
total return quotations reflect changes in the price of
a Fund's shares and assume that all dividends and
capital gains distributions during the period were reinvested in
the Fund shares. Cumulative total return is calculated
by computing the cumulative rates of return of a
hypothetical investment in a specific Class of shares
of a Fund over such periods, according to the following
formula (cumulative total return is then expressed as a
percentage):

C = (ERV/P) - 1

Where: C = cumulative total return

P = a hypothetical initial investment
of $1,000 to purchase shares of a
specific Class

ERV = ending redeemable value: ERV is
the value, at the end of the
applicable period, of a
hypothetical $1,000 investment made at the
beginning of the applicable period.

IVY BOND FUND. The following table summarizes the
calculation of Cumulative Total Return for the periods
indicated through December 31, 1996, assuming the
maximum 4.75% sales charge has been assessed.

SINCE ONE YEAR FIVE YEARS TEN YEARS
INCEPTION[*]

Class A 2.93% 44.71% 143.42%
158.11% Class B 2.25% N/A[**] N/A[**]
19.27% Class C N/A[**] N/A[**] N/A[**]
7.81% Class I N/A[**] N/A[**]
N/A[**] N/A[**]

The following table summarizes the calculation of
Cumulative Total Return for the periods indicated
through December 31, 1996, assuming the maximum 5.75%
sales charge has not been assessed.

SINCE ONE YEAR FIVE YEARS TEN YEARS
INCEPTION[*]

Class A 8.06% 51.92% 155.55%
170.99% Class B 7.25% N/A[**] N/A[**]
22.27% Class C N/A[**] N/A[**] N/A[**]
8.81% Class I N/A[**] N/A[**]
N/A[**] N/A[**]

___________________________

[*] Until December 31, 1994, MIMI served as investment
adviser to Ivy Bond Fund, which until that date
was a series of Mackenzie Series Trust. The
inception date for the Fund (and the Class A
shares of Ivy Bond Fund) was September 6, 1985;
the inception date for the Class B and Class I shares
of the Fund was April 1, 1994. The inception date for Class
C shares of the Fund was April 30, 1996.

[**] No such shares were outstanding for the duration
of the time period indicated.

IVY EMERGING GROWTH FUND. The following table
summarizes the calculation of Cumulative Total Return
for the periods indicated through December 31, 1996,
assuming the maximum 5.75% sales charge has been
assessed.

SINCE
ONE YEAR INCEPTION[*]

Class A 11.71% 138.24%
Class B 12.65% 67.01%
Class C N/A[**] (5.48%)

The following table summarizes the calculation of
Cumulative Total Return for the periods indicated
through December 31, 1996, assuming the maximum 5.75%
sales charge has not been assessed.

SINCE
ONE YEAR INCEPTION[*]

Class A 18.52% 152.77%
Class B 17.65% 70.01%
Class C N/A[**] (4.48%)

___________________________

[*] The inception date for Ivy Emerging Growth Fund
was March 3, 1993. Class A shares of the Fund
were first offered for sale to the public on April
30, 1993, and Class B shares of the Fund were
first offered for sale to the public on October
23, 1993. The inception date for Class C shares of
the Fund was April 30, 1996.

[**] No Class C shares were outstanding for the
duration of the time period indicated.

IVY GROWTH FUND. The following table summarizes
the calculation of Cumulative Total Return for the
periods indicated through December 31, 1996, assuming
the maximum 5.75% sales charge has been assessed.

SINCE ONE YEAR FIVE YEARS TEN YEARS
INCEPTION[*]

Class A 10.48% 61.26% 186.15%
3,571.13% Class B 11.02% N/A[**] N/A[**]
40.94% Class C N/A[**] N/A[**]
N/A[**] 4.20%

The following table summarizes the calculation of
Cumulative Total Return for the periods indicated
through December 31, 1996, assuming the maximum 5.75%
sales charge has not been assessed.

SINCE ONE YEAR FIVE YEARS TEN YEARS
INCEPTION[*]

Class A 17.22% 71.10% 203.61%
3,795.10% Class B 16.02% N/A[**] N/A[**]
43.94% Class C N/A[**] N/A[**]
N/A[**] 5.20%

___________________________

[*] The inception date for Ivy Growth Fund (and for
Class A shares of the Fund) was March 1, 1984. The
inception date for the Class B shares of the Fund
was October 23, 1993. The inception date for
Class C shares of the Fund was April 30, 1996.

[**] No such shares were outstanding for the duration
of the time period indicated.

IVY GROWTH WITH INCOME FUND. The following table
summarizes the calculation of Cumulative Total Return
for the periods indicated through December 31, 1996,
assuming the maximum 5.75% sales charge has been
assessed.

SINCE ONE YEAR FIVE YEARS TEN YEARS
INCEPTION[*]

Class A 13.53% 64.11% 224.23%
487.51% Class B 14.59% N/A[**] N/A[**]
41.83% Class C N/A[**] N/A[**] N/A[**]
11.37%

The following table summarizes the calculation of
Cumulative Total Return for the periods indicated
through December 31, 1996, assuming the maximum 5.75%
sales charge has not been assessed.

SINCE ONE YEAR FIVE YEARS TEN YEARS
INCEPTION[*]

Class A 20.46% 74.12% 244.01%
523.35% Class B 19.59% N/A[**] N/A[**]
44.83% Class C N/A[**] N/A[**] N/A[**]
12.37%

___________________________

[*] The inception date for Ivy Growth with Income Fund
(and the

Class A shares of the Fund) was April 1, 1984; the
inception date for the Class B shares of the Fund
was October 23, 1993. The inception date for
Class C shares of the Fund was April 30, 1996.

[**] No such shares were outstanding for the duration
of the time period indicated.

OTHER QUOTATIONS, COMPARISONS AND GENERAL
INFORMATION. The foregoing computation methods are
prescribed for advertising and other communications
subject to SEC Rule 482. Communications not subject to
this rule may contain a number of different measures of
performance, computation methods and assumptions, including
but not limited to: historical total returns; results of
actual or hypothetical investments; changes in
dividends, distributions or share values; or any
graphic illustration of such data. These data may
cover any period of the Trust's existence and may or may
not include the impact of sales charges, taxes or other factors.

Performance quotations for a Fund will vary from
time to time depending on market conditions, the
composition of the Fund's portfolio and operating
expenses of the Fund. These factors and possible
differences in the methods used in calculating
performance quotations should be considered when
comparing performance information regarding a Fund's shares with
information published for other investment companies and
other investment vehicles. Performance quotations
should also be considered relative to changes in the
value of a Fund's shares and the risks associated with
a Fund's investment objectives and policies. At any
time in the future, performance quotations may be
higher or lower than past performance quotations and there can
be no assurance that any historical performance quotation
will continue in the future.

The Funds may also cite endorsements or use for
comparison their performance rankings and listings
reported in such newspapers or business or consumer
publications as, among others: AAII Journal, Barron's,
Boston Business Journal, Boston Globe, Boston Herald,
Business Week, Consumer's Digest, Consumer Guide
Publications, Changing Times, Financial Planning, Financial
World, Forbes, Fortune, Growth Fund Guide, Houston Post,
Institutional Investor, International Fund Monitor, Investor's
Daily, Los Angeles Times, Medical Economics, Miami
Herald, Money Mutual Fund Forecaster, Mutual Fund
Letter, Mutual Fund Source Book, Mutual Fund Values,
National Underwriter, Nelson's Directory of Investment
Managers, New York Times, Newsweek, No Load Fund
Investor, No Load Fund* X, Oakland Tribune, Pension
World, Pensions and Investment Age, Personal Investor, Rugg and
Steele, Time, U.S. News and World Report, USA Today, The
Wall Street Journal, and Washington Post.

FINANCIAL STATEMENTS

The Funds' Portfolios of Investments as of
December 31,

1996, Statements of Assets and Liabilities as of
December 31, 1996, Statements of Operations for the
fiscal year ended December 31, 1996, Statements of
Changes in Net Assets for the fiscal years ended
December 31, 1995, and December 31, 1996, Financial
Highlights, Notes to Financial Statements, and Reports of
Independent Accountants are included in each Fund's December 31,
1996 Annual Report to shareholders, which are
incorporated by reference into this SAI.

APPENDIX A
DESCRIPTION OF STANDARD & POOR'S CORPORATION
("S&P") AND MOODY'S INVESTORS SERVICE, INC.
("MOODY'S") CORPORATE BOND AND
COMMERCIAL PAPER RATINGS

[From "Moody's Bond Record," November 1994 Issue
(Moody's Investors Service, New York, 1994), and
"Standard & Poor's Municipal Ratings Handbook," October
1994 Issue (McGraw Hill, New York, 1994).]

MOODY'S:

(a) CORPORATE BONDS. Bonds rated Aaa by Moody's
are judged by Moody's to be of the best quality,
carrying the smallest degree of investment risk.
Interest payments are protected by a large or
exceptionally stable margin and principal is secure.
Bonds rated Aa are judged by Moody's to be of high quality by all
standards. Aa bonds are rated lower than Aaa bonds
because margins of protection may not be as large as
those of Aaa bonds, or fluctuations of protective
elements may be of greater amplitude, or there may be
other elements present which make the long-term risks
appear somewhat larger than those applicable to Aaa
securities. Bonds which are rated A by Moody's possess many
favorable investment attributes and are considered as upper
medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but
elements may be present which suggest a susceptibility
to impairment sometime in the future.

Bonds rated Baa by Moody's are considered medium-
grade obligations, i.e., they are neither highly
protected nor poorly secured. Interest payments and
principal security appear adequate for the present, but
certain protective elements may be lacking or may be
characteristically unreliable over any great length of
time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as
well. Bonds which are rated Ba are judged to have
speculative elements; their future cannot be considered
well-assured. Often the protection of interest and
principal payments may be very moderate and thereby not
well safeguarded during both good and bad times over
the future. Uncertainty of position characterizes
bonds in this class. Bonds which are rated B generally lack
characteristics of the desirable investment. Assurance of
interest and principal payments of or maintenance of other
terms of the contract over any long period of time may
be small.

Bonds which are rated Caa are of poor standing.
Such issues may be in default or there may be present
elements of danger with respect to principal or
interest. Bonds which are rated Ca represent
obligations which are speculative in a high degree.
Such issues are often in default or have other marked
shortcomings. Bonds which are rated C are the lowest rated class
of bonds and issues so rated can be regarded as having
extremely

poor prospects of ever attaining any real investment
standing.

(b) COMMERCIAL PAPER. The Prime rating is the
highest commercial paper rating assigned by Moody's.
Among the factors considered by Moody's in assigning
ratings are the following: (1) evaluation of the
management of the issuer; (2) economic evaluation of
the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain
areas; (3) evaluation of the issuer's products in
relation to competition and customer acceptance; (4) liquidity;
(5) amount and quality of long-term debt; (6) trend of
earnings over a period of ten years; (7) financial
strength of a parent company and the relationships
which exist with the issuer; and (8) recognition by
management of obligations which may be present or may
arise as a result of public interest questions and
preparations to meet such obligations. Issuers within this Prime
category may be given ratings 1, 2 or 3, depending on
the relative strengths of these factors. The
designation of Prime-1 indicates the highest quality
repayment capacity of the rated issue.

S&P:

(a) CORPORATE BONDS. An S&P corporate debt
rating is a current assessment of the creditworthiness
of an obligor with respect to a specific obligation.
The ratings are based on current information furnished
by the issuer or obtained by S&P from other sources it
considers reliable. The ratings described below may be
modified by the addition of a plus or minus sign to
show relative standing within the major rating categories.

Debt rated AAA by S&P is considered by S&P to be
the highest grade obligation. Capacity to pay interest
and repay principal is extremely strong. Debt rated AA
is judged by S&P to have a very strong capacity to pay
interest and repay principal and differs from the
highest rated issues only in small degree. Debt rated
A by S&P has a strong capacity to pay interest and repay
principal, although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.

Debt rated BBB by S&P is regarded by S&P as having
an adequate capacity to pay interest and repay
principal. Although such bonds normally exhibit
adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to
lead to a weakened capacity to pay interest and repay
principal than debt in higher rated categories.

Debt rated BB, B, CCC, CC and C is regarded as
having predominately speculative characteristics with
respect to capacity to pay interest and repay
principal. BB indicates the least degree of
speculation and C the highest. While such debt will
likely have some quality and protective characteristics,
these are outweighed by large uncertainties or exposures to

adverse conditions. Debt rated BB has less near-term
vulnerability to default than other speculative issues.
However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic
conditions which could lead to inadequate capacity to
meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to
senior debt that is assigned an actual or implied BBB-
rating. Debt rated B has a greater vulnerability to default
but currently has the capacity to meet interest payments and
principal repayments. Adverse business, financial, or
economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B
rating category is also used for debt subordinated to
senior debt that is assigned an actual or implied BB or
BB- rating. Debt rated CCC has a currently
identifiable vulnerability to default, and is dependent upon
favorable business, financial, and economic conditions to
meet timely payment of interest and repayment of
principal. In the event of adverse business, financial
or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The CCC
rating category is also used for debt subordinated to
senior debt that is assigned an actual or implied B or B-
rating. The rating CC typically is applied to debt
subordinated to senior debt which is assigned an actual or
implied CCC debt rating. The rating C typically is applied to
debt subordinated to senior debt which is assigned an
actual or implied CCC- debt rating. The C rating may
be used to cover a situation where a bankruptcy
petition has been filed, but debt service payments are
continued.

(b) COMMERCIAL PAPER. An S&P commercial paper
rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of
no more than 365 days.

Commercial paper rated A by S&P has the following
characteristics: (i) liquidity ratios are adequate to
meet cash requirements; (ii) long-term senior debt
rating should be A or better, although in some cases
BBB credits may be allowed if other factors outweigh
the BBB; (iii) the issuer should have access to at
least one additional channel of borrowing; (iv) basic
earnings and cash flow should have an upward trend with
allowances made for unusual circumstances; and (v) typically the
issuer's industry should be well established and the
issuer should have a strong position within its
industry and the reliability and quality of management
should be unquestioned. Issues rated A are further
referred to by use of numbers 1, 2 and 3 to denote
relative strength within this highest classification.
For example, the A-1 designation indicates that the degree of
safety regarding timely payment of debt is strong.

Issues rated B are regarded as having only
speculative capacity for timely payment. The C rating
is assigned to short- term debt obligations with a
doubtful capacity for payment.

IVY ASIA PACIFIC FUND
IVY CANADA FUND
IVY CHINA REGION FUND
IVY GLOBAL FUND
IVY GLOBAL NATURAL RESOURCES FUND
IVY GLOBAL SCIENCE & TECHNOLOGY FUND
IVY INTERNATIONAL FUND
IVY INTERNATIONAL SMALL COMPANIES FUND
IVY LATIN AMERICA STRATEGY FUND
IVY NEW CENTURY FUND

series of

IVY FUND
Via Mizner Financial Plaza, Suite 300
700 South Federal Highway
Boca Raton, Florida 33432

STATEMENT OF ADDITIONAL INFORMATION

April 30, 1997

_________________________________________________________________

Ivy Fund (the "Trust") is an open-end management
investment company that currently consists of eighteen
fully managed portfolios, each of which (except for Ivy
Latin America Strategy Fund and Ivy International Bond
Fund) is diversified. Each of Ivy Latin America
Strategy Fund and Ivy International Bond Fund is a non-
diversified portfolio. This Statement of Additional
Information ("SAI") describes ten of the portfolios, Ivy Asia
Pacific Fund, Ivy Canada Fund, Ivy China Region Fund, Ivy
Global Fund, Ivy Global Natural Resources Fund, Ivy
Global Science & Technology Fund, Ivy International
Fund, Ivy International Small Companies Fund, Ivy Latin
America Strategy Fund and Ivy New Century Fund (the
"Funds," each a "Fund"). The other six portfolios of
the Trust are described in separate Statements of
Additional Information.

INVESTMENT MANAGER

Ivy Management, Inc. ("IMI")
Via Mizner Financial Plaza, Suite 300
700 South Federal Highway
Boca Raton, Florida 33432
Telephone: (800) 777-6472

DISTRIBUTOR

Ivy Mackenzie Distributors, Inc.
Via Mizner Financial Plaza, Suite 300
700 South Federal Highway
Boca Raton, Florida 33432
Telephone: (800) 456-5111

INVESTMENT ADVISER

(Ivy Canada Fund and Ivy Global Natural Resources
Fund only) Mackenzie Financial
Corporation
150 Bloor Street West
Suite 400
Toronto, Ontario
CANADA M5S3B5
Telephone (416) 922-5322

TABLE OF CONTENTS

INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . .
. . . 6

RISK FACTORS . . . . . . . . . . . . . . . . . . . . .
. . . 19 U.S. GOVERNMENT SECURITIES . . . . . . .
. . . . . . . . 19 CONVERTIBLE SECURITIES . . . .
. . . . . . . . . . . . . 20 DEBT SECURITIES, IN
GENERAL . . . . . . . . . . . . . . 21 ZERO
COUPON BONDS . . . . . . . . . . . . . . . . . . . 21
REPURCHASE AGREEMENTS . . . . . . . . . . . . . . . . . 22
WARRANTS . . . . . . . . . . . . . . . . . . . . . .
. . 22 SMALL COMPANIES . . . . . . . . . . . . .
. . . . . . . 22

COMMERCIAL PAPER . . . . . . . . . . . . . . . . . . .
. . . 23 BANKING INDUSTRY AND SAVINGS AND LOAN
OBLIGATIONS . . . 23 DEPOSITORY RECEIPTS . . .
. . . . . . . . . . . . . . . 23 INVESTMENT-GRADE
DEBT SECURITIES . . . . . . . . . . . . 23 LOW-
RATED DEBT SECURITIES . . . . . . . . . . . . . . . 24
FOREIGN SECURITIES . . . . . . . . . . . . . . . . . . . 25
INVESTING IN EMERGING MARKETS . . . . . . . . . .
. . . 26 CANADIAN SECURITIES . . . . . . . . . .
. . . . . . . . 28 INVESTING IN LATIN AMERICA . .
. . . . . . . . . . . . . 29 INVESTING IN ASIA
PACIFIC SECURITIES . . . . . . . . . . 31
INVESTING IN NATURAL RESOURCES . . . . . . . . . . . . . 32
INVESTING IN THE CHINA REGION . . . . . . . . . . . . .
34 PRECIOUS METALS AND OTHER PHYSICAL COMMODITIES
. . . . . 35 FORWARD FOREIGN CURRENCY CONTRACTS .
. . . . . . . . . . 35 FOREIGN CURRENCIES . . . .
. . . . . . . . . . . . . . . 36 REAL ESTATE
INVESTMENT TRUSTS (REITs) . . . . . . . . . 37
OPTIONS TRANSACTIONS . . . . . . . . . . . . . . . . . . 37
OPTIONS, IN GENERAL . . . . . . . . . . . . . . . .
37 WRITING OPTIONS ON INDIVIDUAL SECURITIES
. . . . . 39 PURCHASING OPTIONS ON
INDIVIDUAL SECURITIES . . . . 39 PURCHASING
AND WRITING OPTIONS ON SECURITIES
INDICES . . . . . . . . . . . . . . . . . . . 40
RISKS OF OPTIONS TRANSACTIONS . . . . . . . . . . . 41
FUTURES CONTRACTS . . . . . . . . . . . . . . . . . . .
42 FUTURES, IN GENERAL. . . . . . . . . . .
. . . . . 42 FOREIGN CURRENCY FUTURES
CONTRACTS. . . . . . . . . 43 RISKS
ASSOCIATED WITH FUTURES. . . . . . . . . . . 43
SECURITIES INDEX FUTURES CONTRACTS . . . . . . . . . . . 44
RISKS OF SECURITIES INDEX FUTURES . . . . . . . . .
45 COMBINED TRANSACTIONS . . . . . . .
. . . . . 46 FIRM COMMITMENT AGREEMENTS AND WHEN-
ISSUED SECURITIES . 47 RESTRICTED AND ILLIQUID
SECURITIES . . . . . . . . . . . 47 BORROWING .
. . . . . . . . . . . . . . . . . . . . . . 48
LOANS OF PORTFOLIO SECURITIES . . . . . . . . . . . . . 48

INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . .
. . . 48

ADDITIONAL RESTRICTIONS . . . . . . . . . . . . . . . .
. . . 54

ADDITIONAL RIGHTS AND PRIVILEGES . . . . . . . . . . .
. . . 56

AUTOMATIC INVESTMENT METHOD . . . . . . . . . . .
. . . 57 EXCHANGE OF SHARES . . . . . . . . . . .
. . . . . . . . 57 INITIAL SALES CHARGE
SHARES . . . . . . . . . . . . 57 CONTINGENT
DEFERRED SALES CHARGE SHARES. CLASS A . 57
CLASS B . . . . . . . . . . . . . . . . . . . . . . 58
CLASS C . . . . . . . . . . . . . . . . . . . . . . 59
CLASS I . . . . . . . . . . . . . . . . . . . .
. . 60 ALL CLASSES . . . . . . . . . . . . .
. . . . . . . 60 LETTER OF INTENT . . . . . . . .
. . . . . . . . . . . . 60 RETIREMENT PLANS . . .
. . . . . . . . . . . . . . . . . 61
INDIVIDUAL RETIREMENT ACCOUNTS . . . . . . . . . . 62
QUALIFIED PLANS . . . . . . . . . . . . . . . . . . 63
DEFERRED COMPENSATION FOR PUBLIC SCHOOLS AND
CHARITABLE ORGANIZATIONS ("403(B)(7)
ACCOUNT") . . . . . . . . . . . . . . . . . .
64 SIMPLIFIED EMPLOYEE PENSION ("SEP") IRAS
. . . . . 65 REINVESTMENT PRIVILEGE . . . . . . .
. . . . . . . . . . 65 RIGHTS OF ACCUMULATION . .
. . . . . . . . . . . . . . . 66 SYSTEMATIC
WITHDRAWAL PLAN . . . . . . . . . . . . . . . 67
GROUP SYSTEMATIC INVESTMENT PROGRAM . . . . . . . . . . 67

BROKERAGE ALLOCATION . . . . . . . . . . . . . . . . .
. . . 68 TRUSTEES AND OFFICERS .
. . . . . . . . 71 PERSONAL INVESTMENTS BY
EMPLOYEES OF IMI . . . . . . . . 75 COMPENSATION
TABLE . . . . . . . . . . . . . . . . . . . 76

INVESTMENT ADVISORY AND OTHER SERVICES . . . . . . . .
. . . 78 BUSINESS MANAGEMENT AND INVESTMENT
ADVISORY SERVICES . . 78 SUBADVISORY
CONTRACT - IVY INTERNATIONAL FUND . . 82
DISTRIBUTION SERVICES . . . . . . . . . . . . . . . . . 83
RULE 18F-3 PLAN . . . . . . . . . . . . . . . . . .
86 RULE 12B-1 DISTRIBUTION PLANS . . . . . .
. . . . . 87 CUSTODIAN . . . . . . . . . . . . .
. . . . . . . . . . 92 FUND ACCOUNTING SERVICES .
. . . . . . . . . . . . . . . 93 TRANSFER AGENT
AND DIVIDEND PAYING AGENT . . . . . . . . 94
ADMINISTRATOR . . . . . . . . . . . . . . . . . . . . . 94
AUDITORS . . . . . . . . . . . . . . . . . . . . . . . .
95

CAPITALIZATION AND VOTING RIGHTS . . . . . . . . . . .
. . . 95

NET ASSET VALUE . . . . . . . . . . . . . . . . . . . .
. . . 99

PORTFOLIO TURNOVER . . . . . . . . . . . . . . . . . .
. . . 100

REDEMPTIONS . . . . . . . . . . . . . . . . . . . . . .
. . . 101

CONVERSION OF CLASS B SHARES . . . . . . . . . . . . .
. . . 102

TAXATION . . . . . . . . . . . . . . . . . . . . . . .
. . . 103 OPTIONS, FUTURES AND FOREIGN CURRENCY
FORWARD CONTRACTS . . . . . . . . . . . . . .
. . . . . . . 104 CURRENCY FLUCTUATIONS --
"SECTION 988" GAINS OR LOSSES . . . . . .
. . . . . . . . . . . . . . . . . . . 105
INVESTMENT IN PASSIVE FOREIGN INVESTMENT COMPANIES . . . 106

DEBT SECURITIES ACQUIRED AT A DISCOUNT . . . . . .
. . . 106 DISTRIBUTIONS . . . . . . . . . . . . .
. . . . . . . . 108 DISPOSITION OF SHARES . . . .
. . . . . . . . . . . . . 108 FOREIGN WITHHOLDING
TAXES . . . . . . . . . . . . . . . 109 BACKUP
WITHHOLDING . . . . . . . . . . . . . . . . . . . 110

PERFORMANCE INFORMATION . . . . . . . . . . . . . . . .
. . . 110 AVERAGE ANNUAL TOTAL RETURN . . . .
. . . . . . . . 111 CUMULATIVE TOTAL RETURN .
. . . . . . . . . . . . . 121 OTHER
QUOTATIONS, COMPARISONS AND GENERAL
INFORMATION . . . . . . . . . . . . . . . . . 125

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . .
. . . 126

APPENDIX A

DESCRIPTION OF STANDARD & POOR'S CORPORATION
("S&P") AND MOODY'S INVESTORS SERVICE, INC.
("MOODY'S") CORPORATE BOND AND
COMMERCIAL PAPER RATINGS . . . . . . . . 127

APPENDIX B

STATEMENT OF ASSETS AND LIABILITIES
AS OF DECEMBER 10, 1996
AND
REPORT OF INDEPENDENT ACCOUNTANTS . . .
. . . 130

APPENDIX C

SELECTED ECONOMIC AND MARKET DATA FOR
ASIA PACIFIC AND CHINA REGION COUNTRIES . . .
. 136

INVESTMENT OBJECTIVES AND POLICIES

Each Fund has its own investment objectives and
policies, which are set forth below. The different
types of securities and investment techniques used by
the Funds involve varying degrees of risk.

IVY ASIA PACIFIC FUND: The Fund's principal
investment objective is long-term growth. Consideration
of current income is secondary to this principal
objective. Under normal circumstances the Fund invests
at least 65% of its total assets in securities issued
in Asia-Pacific countries, which for purposes of this
SAI are defined to include China, Hong Kong, India,
Indonesia, Malaysia, Pakistan, the Philippines, Singapore,
Sri Lanka, South Korea, Taiwan, Thailand and Vietnam.
Securities of Asia-Pacific issuers include: (a)
securities of companies organized under the laws of an
Asia-Pacific country or for which the principal
securities trading market is in the Asia-Pacific
region; (b) securities that are issued or guaranteed by the
government of an Asia-Pacific country, its agencies or
instrumentalities, political subdivisions or the country's
central bank; (c) securities of a company, wherever organized,
where at least 50% of the company's non-current assets,
capitalization, gross revenue or profit in any one of the
two most recent fiscal years represents (directly or
indirectly through subsidiaries) assets or activities
located in the Asia- Pacific region; and (d) any of the
preceding types of securities in the form of depository
shares.

The Fund may participate in markets throughout the
Asia- Pacific region, and it is expected that the Fund
will be invested at all times in at least three Asia-
Pacific countries. The Fund does not expect to
concentrate its investments in any particular industry.
See Appendix C of this SAI for further information
about the economic characteristics of certain Asia-Pacific
countries.

The Fund may invest up to 35% of its assets in investment-
grade debt securities of government or corporate
issuers in emerging market countries, investment-grade
equity and debt securities of issuers in developed
countries (including the United States), warrants, and
cash or cash equivalents, such as bank obligations
(including certificates of deposit and bankers'
acceptances), commercial paper, short-term notes and repurchase
agreements. For temporary defensive purposes, the Fund
may invest without limit in such instruments. The Fund
may also invest up to 5% of its net assets in zero
coupon bonds, and in debt securities rated Ba or below
by Moody's Investor Services, Inc. ("Moody's) or BB or
below by Standard and Poor's Corporation ("S&P"), or if
unrated, are considered by IMI to be of comparable
quality (commonly referred to as "high yield" or "junk" bonds).

For temporary or emergency purposes, the Fund may
borrow up to one-third of the value of its total assets
from banks, but may

not purchase securities at any time during which the
value of the Fund's outstanding loans exceeds 10% of
the value of the Fund's assets. The Fund may engage in
foreign currency exchange transactions and enter into
forward foreign currency contracts. The Fund may also
invest (i) up to 10% of its total assets in other
investment companies that invest in securities issued in
Asia-Pacific countries, and (ii) up to 15% of its net assets in
restricted and other illiquid securities. The Fund may
with approval of its Board of Trustees (the "Trustees"
or "Board"), but currently does not intend to, lend
portfolio securities.

The Fund may purchase put and call options on
securities and stock indices, provided the premium paid
for such options does not exceed 5% of the Fund's net
assets. The Fund may also sell covered put options
with respect to up to 10% of the value of its net
assets, and may write covered call options so long as not
more than 25% of the Fund's net assets is subject to being
purchased upon the exercise of the calls. For hedging
purposes only, the Fund may engage in transactions in
stock index and foreign currency futures contracts,
provided that the Fund's aggregate investment in such
contracts does not exceed 15% of its total assets.

IVY CANADA FUND: Ivy Canada Fund seeks long-term
capital appreciation by investing primarily in equity
securities of Canadian companies. Canada is one of the
world's leading industrial countries and a major
exporter of agricultural products. The country is rich
in natural resources such as zinc, uranium, nickel,
gold, silver, aluminum, iron and copper, and forest
covers over 44% of land areas, making Canada a leading
world producer of newsprint. Canada is also a major producer of
hydroelectricity, oil and gas.

As a fundamental policy, the Fund normally invests
at least 65% of its total assets in Canadian equity
securities (i.e., common and preferred stock,
securities convertible into common stock and common
stock purchase warrants) listed on Canadian stock
exchanges or traded over-the-counter in Canada. Canadian
issuers are companies (i) organized under the laws of Canada,
(ii) for which the principal securities trading market is in
Canada, (iii) which derive at least 50% of their
revenues or profits from goods produced or sold,
investments made or services performed in Canada, or
(iv) which have at least 50% of their assets situated
in Canada. The balance of the Fund's assets ordinarily
are invested in (i) bills and bonds of the Canadian
Government and the governments of the provinces or municipalities
of Canada, (ii) high quality notes and debentures of
Canadian companies (i.e., those rated Aaa or Aa by
Moody's or AAA or AA by S&P, or if unrated, judged to
be of comparable quality by Mackenzie Financial
Corporation ("MFC"), the Fund's Adviser), (iii) foreign
securities (including sponsored or unsponsored American
Depository Receipts ("ADRs"), Global Depository Receipts
("GDRs"), American Depository Shares ("ADSs") and Global
Depository Shares ("GDSs")), (iv) U.S. Government securities, (v)

equity securities and investment-grade debt securities
(i.e., those rated Baa or higher by Moody's or BBB or
higher by S&P, or if unrated, are considered by MFC to
be of comparable quality) of U.S. companies, and (vi)
zero coupon bonds that meet these credit quality
standards.

The Fund may purchase securities on a "when-
issued" or firm commitment basis, engage in foreign
currency exchange transactions and enter into forward
foreign currency contracts. The Fund may also invest
(i) up to 10% of its total assets in other investment
companies and (ii) up to 15% of its net assets in
restricted and other illiquid securities.

For temporary defensive purposes, the Fund may
invest without limit in U.S. or Canadian dollar-
denominated money market securities issued by entities
organized in the U.S. or Canada, such as (i)
obligations issued or guaranteed by the Canadian
Government or the governments of the provinces or municipalities
of Canada (or their agencies or instrumentalities), (ii)
finance company and corporate commercial paper (and
other short-term corporate obligations rated Prime-1 by
Moody's or A or better by S&P, or if not rated,
considered by MFC to be of comparable quality), (iii)
obligations of banks (i.e., certificates of deposit,
time deposits and bankers' acceptances) considered
creditworthy by MFC under guidelines approved by the Trustees,
and (iv) repurchase agreements with broker-dealers and
banks. For temporary or emergency purposes, the Fund
may also borrow up to 10% of the value of its total
assets from banks.

IVY CHINA REGION FUND: Ivy China Region Fund's
principal investment objective is long-term capital
growth. Consideration of current income is secondary to
this principal objective. The Fund seeks to meet its
objective primarily by investing in the equity
securities of companies that are expected to benefit from
the economic development and growth of China, Hong Kong and
Taiwan. A significant percentage of the Fund's assets may
also be invested in the securities markets of South
Korea, Singapore, Malaysia, Thailand, Indonesia and the
Philippines (collectively, with China, Hong Kong and
Taiwan, the "China Region").

in financial statements, reports, analyses and other
pertinent information (some of which may be obtained
directly from the company). The Fund may invest 25% or
more of its total assets in the securities of issuers
located in any one China Region country, and currently
expects to invest more than 50% of its total assets in
Hong Kong. See Appendix C to this SAI for further
information about the economic characteristics of certain
China Region countries.

The balance of the Fund's assets ordinarily are
invested in (i) certain investment-grade debt
securities and (ii) the equity securities of "China
Region associated companies," which are companies that
do not meet the definition of a Greater China growth
company, but whose current or expected performance, based
on certain identified factors (such as the growth trends in the
location of a company's assets and the sources of its
revenues and profits), is judged by IMI to be strongly
associated with the China Region. The investment-grade
debt securities in which the Fund may invest include
(a) obligations of the U.S. Government or its agencies
or instrumentalities, (b) obligations of U.S. banks and
other banks organized and existing under the laws of Hong
Kong, Taiwan or countries that are members of the Organization
for Economic Cooperation and Development ("OECD"), and (c)
obligations denominated in any currency issued by
international development institutions and Hong Kong,
Taiwan and OECD member governments and their agencies
and instrumentalities, as well as repurchase agreements
with respect to any of the foregoing instruments. The
Fund may also invest in zero coupon bonds, and
corporate bonds rated Baa or higher by Moody's or BBB or higher
by S&P (or if unrated, are considered by IMI to be of
comparable quality).

The Fund may invest less than 35% of its net
assets in debt securities rated Ba or below by Moody's
or BB or below by S&P, or, if unrated, are considered
by IMI to be of comparable quality (commonly referred
to as "high yield" or "junk" bonds). The Fund will not
invest in debt securities rated less than C by either
Moody's or S&P.

The Fund may with approval of the Trustees, but
currently does not intend to, lend portfolio securities
valued at not more that 30% of the Fund's total assets.
The Fund may also invest in sponsored or unsponsored
ADRs, GDRs, ADSs and GDSs, warrants, purchase
securities on a "when-issued" or firm commitment basis,
engage in foreign currency exchange transactions and enter into
forward foreign currency contracts. The Fund may also
invest (i) up to 10% of its total assets in other
investment companies and (ii) up to 15% of its net
assets in restricted and other illiquid securities.

liquid debt securities, such as U.S. Government
securities, bank obligations, commercial paper, short-
term notes and repurchase agreements. For temporary or
emergency purposes, the Fund may also borrow up to 10%
of the value of its total assets from banks.

The Fund may purchase put and call options on
securities and stock indices, provided the premium paid
for such options does not exceed 5% of the Fund's net
assets. The Fund may also sell covered put options with
respect to up to 10% of the value of its net assets,
and may write covered call options so long as not more
than 25% of the Fund's net assets is subject to being
purchased upon the exercise of the calls. For hedging purposes
only, the Fund may engage in transactions in stock index
futures contracts, provided that the Fund's aggregate
investment in such contracts does not exceed 15% of its
total assets.

IVY GLOBAL FUND: The Fund seeks long-term capital
growth through a flexible policy of investing in stocks
and debt obligations of companies and governments of
any nation. Any income realized will be incidental.
Under normal conditions, the Fund will invest at least
65% of its total assets in the common stock of
companies throughout the world, with at least three
different countries (one of which may be the United States)
represented in the Fund's overall portfolio holdings. Although
the Fund generally invests in common stock, it may also
invest in preferred stocks, sponsored or unsponsored
ADRs, GDRs, ADSs and GDSs, and investment-grade debt
securities (i.e., those rated Baa or higher by Moody's
or BBB or higher by S&P, or if unrated, are considered
by IMI to be of comparable quality), including
corporate bonds, notes, debentures, convertible bonds and zero
coupon bonds.

The Fund may invest less than 35% of its net
assets in debt securities rated Ba or below by Moody's
or BB or below by S&P, or, if unrated, considered by
IMI to be of comparable quality (commonly referred to
as "high yield" or "junk" bonds). The Fund will not
invest in debt securities rated less than C by either
Moody's or S&P.

For temporary defensive purposes and during
periods when IMI believes that circumstances warrant,
the Fund may invest without limit in U.S. Government
securities, obligations issued by

domestic or foreign banks (including certificates of
deposit, time deposits and bankers' acceptances), and
domestic or foreign commercial paper (which, if issued
by a corporation, must be rated Prime-1 by Moody's or
A-1 by S&P, or if unrated has been issued by a company
that at the time of investment has an outstanding debt
issue rated AAA or AA by S&P or Aaa or Aa by Moody's).
The Fund may also enter into repurchase agreements,
and, for temporary or emergency purposes, may borrow up to 10% of
the value of its total assets from banks.

The Fund may purchase put and call options on
stock indices, provided the premium paid for such
options does not exceed 10% of the Fund's net assets.
The Fund may also sell covered put options with respect
to up to 50% of the value of its net assets, and may
write covered call options so long as not more than 20% of the
Fund's net assets is subject to being purchased upon the
exercise of the calls. For hedging purposes only, the
Fund may engage in transactions in (and options on)
stock index and foreign currency futures contracts,
provided that the Fund's aggregate investment in such
contracts does not exceed 20% of its total assets.

IVY GLOBAL NATURAL RESOURCES FUND: The Fund's
investment objective is long-term growth. Any income
realized will be incidental. Under normal conditions,
the Fund invests at least 65% of its total assets in
the equity securities of companies throughout the world
that own, explore or develop natural resources and
other basic commodities, or supply goods and services
to such companies. Under this investment policy, at
least three different countries (one of which may be the United
States) will be represented in the Fund's overall
portfolio holdings. "Natural resources" generally
include precious metals (such as gold, silver and
platinum), ferrous and nonferrous metals (such as iron,
aluminum and copper), strategic metals (such as uranium
and titanium), coal, oil, natural gases, timber,
undeveloped real property and agricultural commodities. Although
the Fund generally invests in common stock, it may also
invest in preferred stock, securities convertible into
common stock and sponsored or unsponsored ADRs, GDRs,
ADSs and GDSs. The Fund may also invest directly in
precious metals and other physical commodities.

IMI believes that certain political and economic
changes in the global environment in recent years have
had and will continue to have a profound effect on
global supply and demand of natural resources, and that
rising demand from developing markets and new sources
of supply should create attractive investment
opportunities. In selecting the Fund's investments, IMI will
seek to identify securities of companies that, in IMI's
opinion, appear to be undervalued relative to the value
of the companies' natural resource holdings.

For temporary defensive purposes, the Fund may
invest without limit in cash or cash equivalents, such
as bank obligations (including certificates of deposit
and bankers'

acceptances), commercial paper, short-term notes and
repurchase agreements. For temporary or emergency
purposes, the Fund may borrow up to one-third of the
value of its total assets from banks, but may not
purchase securities at any time during which the value
of the Fund's outstanding loans exceeds 10% of the
value of the Fund's total assets. The Fund may engage in foreign
currency exchange transactions and enter into forward
foreign currency contracts. The Fund may also invest
(i) up to 10% of its total assets in other investment
companies and (ii) up to 15% of its net assets in
restricted and other illiquid securities. The Fund may
with approval of the Trustees, but currently does not
intend to, lend portfolio securities.

For hedging purposes only, the Fund may engage in
transactions in (and options on) foreign currency futures
contracts, provided that the Fund's aggregate investment
in such contracts does not exceed 15% of its total
assets.

IVY GLOBAL SCIENCE & TECHNOLOGY FUND: The Fund's
principal investment objective is long-term capital
growth. Any income realized will be incidental. Under
normal conditions, the Fund will invest at least 65% of
its total assets in the common stock of companies that
are expected to benefit from the development,
advancement and use of science and technology. Under this
investment policy, at least three different countries (one of
which may be the United States) will be represented in the
Fund's overall portfolio holdings. Industries likely
to be represented in the Fund's portfolio include
computers and peripheral products, software, electronic
components and systems, telecommunications, media and
information services, pharmaceuticals, hospital supply
and medical devices, biotechnology, environmental
services, chemicals and synthetic materials, and
defense and aerospace. The Fund may also invest in
companies that are expected to benefit indirectly from the
commercialization of technological and scientific advances. In
recent years, rapid advances in these industries have
stimulated unprecedented growth. While this is no
guarantee of future performance, IMI believes that
these industries offer substantial opportunities for
long-term capital appreciation.

Although the Fund generally invests in common
stock, it may also invest in preferred stock,
securities convertible into common stock, sponsored or
unsponsored ADRs, GDRs, ADSs and GDSs, and investment-
grade debt securities (i.e., those rated Baa or higher
by Moody's or BBB or higher by S&P, or if unrated, are
considered by IMI to be of comparable quality), including
corporate bonds, notes, debentures, convertible bonds and zero-
coupon bonds. The Fund may also invest up to 5% of its
net assets in debt securities that are rated Ba or
below by Moody's or BB or below by S&P, or if unrated,
are considered by IMI to be of comparable quality
(commonly referred to as "high yield" or "junk" bonds).
The Fund will not invest in debt securities rated less
than C by either Moody's or S&P. (A description of the
ratings assigned by Moody's and S&P is contained in Appendix A to

this SAI).

The Fund may with approval of the Trustees, but
currently does not intend to, lend portfolio securities
valued at not more than 30% of the Fund's total assets.
The Fund may also invest in warrants, purchase
securities on a "when-issued" or firm commitment basis,
engage in foreign currency exchange transactions and
enter into forward foreign currency contracts. The Fund
may also invest (i) up to 10% of its total assets in
other investment companies and (ii) up to 15% of its net assets
in restricted and other illiquid securities.

For temporary defensive purposes and during
periods when IMI believes that circumstances warrant,
the Fund may invest without limit in U.S. Government
securities, obligations issued by domestic or foreign
banks (including certificates of deposit, time deposits
and bankers' acceptances), and domestic or foreign
commercial paper (which, if issued by a corporation, must be
rated Prime-1 by Moody's or A-1 by S&P, or if unrated has
been issued by a company that at the time of investment
has an outstanding debt issue rated AAA or AA by S&P or
Aaa or Aa by Moody's). The Fund may also enter into
repurchase agreements, and, for temporary or emergency
purposes, may borrow up to 10% of the value of its
total assets from banks.

The Fund may purchase put and call options on
stock indices and on individual securities, provided
the premium paid for such options does not exceed 10%
of the value of the Fund's net assets. The Fund may
also sell covered put options with respect to up to 50%
of the value of its net assets, and may sell covered
call options so long as not more than 20% of the Fund's net
assets is subject to being purchased upon the exercise of the
calls. For hedging purposes only, the Fund may engage in
transactions in (and options on) stock index and foreign
currency futures contracts, provided that the Fund's
aggregate investment in such contracts does not exceed
20% of the value of its total assets.

IVY INTERNATIONAL FUND: Sales of shares of this
Fund to new investors are being suspended. See
"Additional Rights and Privileges." The Fund's
principal objective is long-term capital growth
primarily through investment in equity securities.
Consideration of current income is secondary to this principal
objective. It is anticipated that at least 65% of the
Fund's total assets will be invested in common stocks
(and securities convertible into common stocks)
principally traded in European, Pacific Basin and Latin
America markets. Under this investment policy, at
least three different countries (other than the United
States) will be represented in the Fund's overall portfolio
holdings. For temporary defensive purposes, the Fund may also
invest in equity securities principally traded in U.S.
markets. The Fund's subadviser, Northern Cross
Investments Limited ("Northern Cross" or the
"Subadviser"), invests the Fund's assets in a variety
of economic sectors, industry segments and

individual securities in order to reduce the effects of
price volatility in any one area and to enable
shareholders to participate in markets that do not
necessarily move in concert with U.S. markets. The
Subadviser seeks to identify rapidly expanding foreign
economies, and then searches out growing industries and
corporations, focusing on companies with established
records. Individual securities are selected based on
value indicators, such as a low price-earnings ratio, and are
reviewed for fundamental financial strength. Companies in
which investments are made will generally have at least
$1 billion in capitalization and a solid history of
operations.

When economic or market conditions warrant, the
Fund may invest without limit in U.S. Government
securities, investment- grade debt securities (i.e.,
those rated Baa or higher by Moody's or BBB or higher
by S&P, or if unrated, are considered by the Subadviser
to be of comparable quality), preferred stocks,
sponsored or unsponsored ADRs, GDRs, ADSs and GDSs, warrants, or
cash or cash equivalents such as bank obligations
(including certificates of deposit and bankers'
acceptances), commercial paper, short-term notes and
repurchase agreements. For temporary or emergency
purposes, the Fund may borrow up to 10% of the value of
its total assets from banks. The Fund may also purchase
securities on a "when-issued" or firm commitment basis and may
engage in foreign currency exchange transactions and enter
into forward foreign currency contracts. The Fund may
also invest (i) up to 10% of its total assets in other
investment companies and (ii) up to 15% of its net
assets in restricted and other illiquid securities.
The Fund may with approval of the Trustees, but
currently does not intend to, lend portfolio securities valued at
not more that 30% of the Fund's total assets.

The Fund may purchase put and call options on
securities and stock indices, provided the premium paid
for such options does not exceed 5% of the Fund's net
assets. The Fund may also sell covered put options with
respect to up to 10% of the value of its net assets,
and may write covered call options so long as not more
than 25% of the Fund's net assets is subject to being
purchased upon the exercise of the calls. For hedging purposes
only, the Fund may engage in transactions in (and options
on) stock index and foreign currency futures contracts,
provided that the Fund's aggregate investment in such
contracts does not exceed 15% of its total assets.

holdings. For temporary defensive purposes, the Fund
may also invest in equity securities principally traded
in the United States. The Fund will invest its assets
in a variety of economic sectors, industry segments and
individual securities in order to reduce the effects of
price volatility in any area and to enable shareholders
to participate in markets that do not necessarily move
in concert with the U.S. market. The factors that IMI
considers in determining the appropriate distribution of
investments among various countries and regions include prospects
for relative economic growth, expected levels of
inflation, government policies influencing business
conditions and the outlook for currency relationships.

In selecting the Fund's investments, IMI will seek
to identify securities that are attractively priced
relative to their intrinsic value. The intrinsic value
of a particular security is analyzed by reference to
characteristics such as relative price/earnings ratio,
dividend yield and other relevant factors (such as
applicable financial, tax, social and political
conditions).

When economic or market conditions warrant, the
Fund may invest without limit in U.S. Government
securities, investment- grade debt securities, zero
coupon bonds, preferred stocks, warrants, or cash or
cash equivalents such as bank obligations (including
certificates of deposit and bankers' acceptances),
commercial paper, short-term notes and repurchase agreements.
The Fund may also invest up to 5% of its net assets in debt
securities rated Ba or below by Moody's or BB or below
by S&P, or if unrated, are considered by IMI to be of
comparable quality (commonly referred to as "high
yield" or "junk" bonds).

For temporary or emergency purposes, the Fund may
borrow up to one-third of the value of its total assets
from banks, but may not purchase securities at any time
during which the value of the Fund's outstanding loans
exceeds 10% of the value of the Fund's assets. The
Fund may engage in foreign currency exchange
transactions and enter into forward foreign currency contracts.
The Fund may also invest (i) up to 10% of its total
assets in other investment companies and (ii) up to 15%
of its net assets in restricted and other illiquid
securities. The Fund may with approval of the
Trustees, but currently does not intend to, lend
portfolio securities.

The Fund may purchase put and call options on
securities and stock indices, provided the premium paid
for such options does not exceed 5% of the Fund's net
assets. The Fund may also sell covered put options
with respect to up to 10% of the value of its net
assets, and may write covered call options so long as not
more than 25% of the Fund's net assets is subject to being
purchased upon the exercise of the calls. For hedging
purposes only, the Fund may engage in transactions in
stock index and foreign currency futures contracts,
provided that the Fund's aggregate investment in such
contracts does not exceed 15% of its

total assets.

IVY LATIN AMERICA STRATEGY FUND: The Fund's
principal investment objective is long-term capital
growth. Consideration of current income is secondary
to this principal objective. Under normal conditions
the Fund invests at least 65% of its total assets in
securities issued in Latin America, which for purposes
of this Prospectus is defined as Mexico, Central
America, South America and the Spanish-speaking islands of the
Caribbean. Securities of Latin American issuers include
(a) securities of companies organized under the laws of
a Latin American country or for which the principal
securities trading market is in Latin America; (b)
securities that are issued or guaranteed by the
government of a Latin American country, its agencies or
instrumentalities, political subdivisions or the
country's central bank; (c) securities of a company, wherever
organized, where at least 50% of the company's non-current
assets, capitalization, gross revenue or profit in any one
of the two most recent fiscal years represents
(directly or indirectly through subsidiaries) assets or
activities located in Latin America; or (d) any of the
preceding types of securities in the form of depository
shares. The Fund may participate in markets throughout
Latin America, and it is expected that the Fund will be
invested at all times in at least three countries. Under
present conditions, the Fund expects to focus its investments in
Argentina, Brazil, Chile, Mexico and Venezuela, which IMI
believes are the most developed capital markets in Latin
America. The Fund does not expect to concentrate its
investments in any particular industry.

The Fund's equity investments consist of common
stock, preferred stock (either convertible or non-
convertible), sponsored or unsponsored ADRs, GDRs, ADSs
and GDSs, and warrants (any of which may be purchased
through rights). The Fund's equity securities may be
listed on securities exchanges, traded over- the-
counter, or have no organized market.

The Fund may invest in debt securities (including
zero coupon bonds) when IMI anticipates that the
potential for capital appreciation from debt securities
is likely to equal or exceed that of equity securities
(e.g., a favorable change in relative foreign exchange
rates, interest rate levels or the creditworthiness of
issuers). These include debt securities issued by Latin
American Governments ("Sovereign Debt"). Most of the
debt securities in which the Fund may invest are not rated,
and those that are rated are expected to be below investment-
grade (i.e., rated Ba or below by Moody's or BB or below
by S&P, or considered by IMI to be of comparable
quality), and are commonly referred to as "high yield"
or "junk" bonds.

paper, short-term notes and repurchase agreements. For
temporary defensive or emergency purposes, the Fund may
(i) invest without limit in such instruments, and (ii)
borrow up to one-third of the value of its total assets
from banks (but may not purchase securities at any time
during which the value of the Fund's outstanding loans
exceeds 10% of the value of the Fund's total assets).

The Fund may with approval of the Trustees, but
currently does not intend to, lend portfolio securities
valued at not more that 30% of the Fund's total assets.
The Fund may also invest in warrants, purchase
securities on a "when-issued" or firm commitment basis,
engage in foreign currency exchange transactions and
enter into forward foreign currency contracts. The
Fund may also invest (i) up to 10% of its total assets in
other investment companies and (ii) up to 15% of its net assets
in restricted and other illiquid securities. The Fund
will treat any Latin American securities that are
subject to restrictions on repatriation for more than
seven days, as well as any securities issued in
connection with Latin American debt conversion programs
that are restricted to remittance of invested capital or profits,
as illiquid securities for purposes of this limitation.

The Fund may purchase put and call options on
securities and stock indices, provided the premium paid
for such options does not exceed 5% of the Fund's net
assets. The Fund may also sell covered put options with
respect to up to 10% of the value of its net assets,
and may write covered call options so long as not more
than 25% of the Fund's net assets is subject to being
purchased upon the exercise of the calls. For hedging purposes
only, the Fund may engage in transactions in (and options
on) stock index and foreign currency futures contracts,
provided that the Fund's aggregate investment in such
contracts does not exceed 15% of its total assets.

IVY NEW CENTURY FUND: The Fund's principal
objective is long-term growth. Consideration of
current income is secondary to this principal
objective. In pursuing its objective, the Fund invests
primarily in the equity securities of companies that IMI
believes will benefit from the economic development and growth of
emerging markets. The Fund considers countries having
emerging markets to be those that (i) are generally
considered to be "developing" or "emerging" by the
World Bank and the International Finance Corporation,
or (ii) are classified by the United Nations (or
otherwise regarded by their authorities) as "emerging."
Under normal market conditions, the Fund invests at
least 65% of its total assets in equity securities (including
common and preferred stocks, convertible debt obligations,
warrants, options, rights and sponsored or unsponsored
ADRs, GDRs ADSs and GDSs that are listed on stock
exchanges or traded over- the-counter) of "Emerging
Market growth companies," which are defined as
companies (a) for which the principal securities
trading market is an emerging market (as defined above), (b) that
(alone or on a consolidated basis) derives 50% or more
of its

total revenue either from goods, sales or services in
emerging markets, or (c) that are organized under the
laws of (and with a principal office in) an emerging
market country.

The Fund normally invests its assets in the
securities of issuers located in at least three
emerging market countries, and may invest 25% or more
of its total assets in the securities of issuers
located in any one country. IMI's determination as to
whether a company qualifies as a Emerging Markets growth company
is based primarily on information contained in financial
statements, reports, analyses and other pertinent
information (some of which may be obtained directly
from the company).

For purposes of capital appreciation, the Fund may
invest up to 35% of its assets in (i) debt securities
of government or corporate issuers in emerging market
countries, (ii) equity and debt securities of issuers
in developed countries (including the United States),
and (iii) cash or cash equivalents such as bank
obligations (including certificates of deposit and bankers'
acceptances), commercial paper, short-term notes and
repurchase agreements. For temporary defensive
purposes, the Fund may invest without limit in such
instruments. The Fund may also invest in zero coupon
bonds and purchase securities on a "when-issued" or
firm commitment basis.

The Fund will not invest more than 20% of its
total assets in debt securities rated Ba or lower by
Moody's or BB or lower by S&P, or if unrated, are
considered by IMI to be of comparable quality (commonly
referred to as "high yield" or "junk" bonds).

For temporary or emergency purposes, the Fund may
borrow up to one-third of the value of its total assets
from banks, but may not purchase securities at any time
during which the value of the Fund's outstanding loans
exceeds 10% of the value of the Fund's assets. The
Fund may with approval of the Trustees, but currently
does not intend to, lend portfolio securities valued at
not more that 30% of the Fund's total assets, engage in foreign
currency exchange transactions and enter into forward
foreign currency contracts. The Fund may also invest
(i) up to 10% of its total assets in other investment
companies, and (ii) up to 15% of its net assets in
restricted and other illiquid securities.

The Fund may purchase put and call options on
securities and stock indices, provided the premium paid
for such options does not exceed 5% of the Fund's net
assets. The Fund may also sell covered put options with
respect to up to 10% of the value of its net assets,
and may write covered call options so long as not more
than 25% of the Fund's net assets is subject to being
purchased upon the exercise of the calls. For hedging purposes
only, the Fund may engage in transactions in (and options
on) stock index and foreign currency futures contracts,
provided that the Fund's aggregate investment in such
contracts does not exceed 15% of its total assets.

RISK FACTORS

U.S. GOVERNMENT SECURITIES

Mortgage-backed securities are securities
representing part ownership of a pool of mortgage
loans. For example, GNMA certificates are such
securities in which the timely payment of principal and
interest is guaranteed by the full faith and credit of
the U.S. Government. Although the mortgage loans in the pool
will have maturities of up to 30 years, the actual average
life of the loans typically will be substantially less
because the mortgages will be subject to principal
amortization and may be prepaid prior to maturity.
Prepayment rates vary widely and may be affected by
changes in market interest rates. In periods of
falling interest rates, the rate of prepayment tends to increase,
thereby shortening the actual average life of the
security. Conversely, rising interest rates tend to
decrease the rate of prepayment, thereby lengthening
the actual average life of the security (and increasing
the security's price volatility). Accordingly, it is
not possible to predict accurately the average life of
a particular pool. Reinvestment of prepayment may occur
at higher or lower rates than the original yield on the
certificates. Due to the prepayment feature and the need to
reinvest prepayments of principal at current rates, mortgage-
backed securities can be less effective than typical
bonds of similar maturities at "locking in" yields
during periods of declining interest rates. Such
securities may appreciate or decline in market value
during periods of declining or rising interest rates,
respectively.

Banks, Farmers Home Administration, Central Bank for
Cooperatives, Federal Intermediate Credit Banks, Federal
Home Loan Banks, Federal National Mortgage Association,
Federal Home Loan Mortgage Corporation, and Student
Loan Marketing Association.

CONVERTIBLE SECURITIES

quality because of their conversion or exchange
features.

DEBT SECURITIES, IN GENERAL

Investment in debt securities involves both
interest rate and credit risk. Generally, the value of
debt instruments rises and falls inversely with
fluctuations in interest rates. As interest rates
decline, the value of debt securities generally
increases. Conversely, rising interest rates tend to cause the
value of debt securities to decrease. Bonds with longer
maturities generally are more volatile than bonds with
shorter maturities. The market value of debt securities
also varies according to the relative financial
condition of the issuer. In general, lower-quality
bonds offer higher yields due to the increased risk
that the issuer will be unable to meet its obligations
on interest or principal payments at the time called
for by the debt instrument.

ZERO COUPON BONDS

REPURCHASE AGREEMENTS

Repurchase agreements are contracts under which a
Fund buys a money market instrument and obtains a
simultaneous commitment from the seller to repurchase
the instrument at a specified time and at an agreed-
upon yield. Under guidelines approved by the the
Board, a Fund is permitted to enter into repurchase
agreements only if the repurchase agreements are at least fully
collateralized with U.S. Government securities or other
securities that the Fund's investment adviser has approved
for use as collateral for repurchase agreements and the
collateral must be marked-to-market daily. A Fund will
enter into repurchase agreements only with banks and
broker-dealers deemed to be creditworthy by the Fund's
investment adviser under guidelines approved by the
Board. In the unlikely event of failure of the
executing bank or broker-dealer, a Fund could
experience some delay in obtaining direct ownership of the
underlying collateral and might incur a loss if the value of
the security should decline, as well as costs in
disposing of the security.

WARRANTS

The holder of a warrant has the right, until the
warrant expires, to purchase a given number of shares
of a particular issuer at a specified price. Such
investments can provide a greater potential for profit
or loss than an equivalent investment in the underlying
security. However, prices of warrants do not
necessarily move in tandem with the prices of the
underlying securities, and are, therefore, considered speculative
investments. Warrants pay no dividends and confer no
rights other than a purchase option. Thus, if a
warrant held by a Fund were not exercised by the date
of its expiration, the Fund would lose the entire
purchase price of the warrant. A Fund's investments in
warrants will not exceed 5% of the value of its net
assets.

SMALL COMPANIES

Investing in smaller company stocks involves
certain special considerations and risks that are not
usually associated with investing in larger, more
established companies. For example, the securities of
smaller companies may be subject to more abrupt or
erratic market movements, because they tend to be thinly
traded and are subject to a greater degree to changes in the
issuer's earnings and prospects. Small companies also tend
to have limited product lines, markets or financial
resources. Transaction costs in smaller company stocks
also may be higher than those of larger companies.

COMMERCIAL PAPER

Commercial paper represents short-term unsecured
promissory notes issued in bearer form by bank holding
companies,

corporations and finance companies. A Fund may invest
in commercial paper that is rated A-1 by S&P or Prime-1
by Moody's or, if not rated by Moody's or S&P, is
issued by companies having an outstanding debt issue
rated Aaa or Aa by Moody's or AAA or AA by S&P.

BANKING INDUSTRY AND SAVINGS AND LOAN OBLIGATIONS

DEPOSITORY RECEIPTS

ADRs, GDRs and similar instruments, the issuance
of which is typically administered by a U.S. or foreign
bank or trust company, evidence ownership of underlying
securities issued by a U.S. or foreign corporation.
Unsponsored programs are organized independently and
without the cooperation of the issuer of the underlying
sdecurities. As a result, available information
concerning the issuer may not be as current as for sponsored
depository instruments and their prices may be more volatile
than if they were sponsored by the issuers of the
underlying securities. ADRs are publicly traded on
exchanges or over-the- counter ("OTC") in the United
States.

INVESTMENT-GRADE DEBT SECURITIES

Bonds rated Aaa by Moody's and AAA by S&P are
judged to be of the best quality (i.e., capacity to pay
interest and repay principal is extremely strong).
Bonds rated Aa/AA are considered

to be of high quality (i.e., capacity to pay interest
and repay principal is very strong and differs from the
highest rated issues only to a small degree). Bonds
rated A are viewed as having many favorable investment
attributes, but elements may be present that suggest a
susceptibility to the adverse effects of changes in
circumstances and economic conditions than debt in
higher rated categories. Bonds rated Baa/BBB (considered by
Moody's to be "medium grade" obligations) are considered to
have an adequate capacity to pay interest and repay
principal, but certain protective elements may be
lacking (i.e., such bonds lack outstanding investment
characteristics and have some speculative
characteristics). A Fund may invest in debt securities that are
given an investment-grade rating by Moody's or S&P, and
may also invest in unrated debt securities that are
considered by IMI to be of comparable quality.

LOW-RATED DEBT SECURITIES

A Fund may invest in corporate debt securities
rated Ba or lower by Moody's, or BB or lower by S&P. A
Fund will not, however, invest in securities that, at
the time of investment, are rated lower than C by
either Moody's or S&P. Securities rated lower than Baa
or BBB (and comparable unrated securities) are commonly
referred to as "high yield" or "junk" bonds and are
considered to be predominantly speculative with respect to the
issuer's continuing ability to meet principal and interest
payments. The lower the ratings of corporate debt
securities, the more their risks render them like
equity securities. (See Appendix A for a more complete
description of the ratings assigned by Moody's and S&P
and their respective
characteristics.)

especially in a thinly traded market. When secondary
markets for high yield securities become relatively
less liquid, it may be more difficult to value the
securities, requiring additional research, and elements
of judgment. Prices for high yield bonds may be
affected by legislative and regulatory developments. (For
example, Federal rules require savings and loan institutions to
reduce gradually their holdings of this type of
security).

FOREIGN SECURITIES

Although a Fund intends to invest only in nations
that IMI considers to have relatively stable and
friendly governments, there is the possibility of
expropriation, nationalization, repatriation or
confiscatory taxation, taxation of income earned in a
foreign country and other foreign taxes, foreign exchange
controls (which may include suspension of the ability to
transfer currency from a given country), default in
foreign government securities, political or social
instability or diplomatic developments which could
affect investments in securities of issuers in those
nations. In addition, in many countries there is less
publicly available information about issuers than is
available for U.S. companies. For example, ownership of
unsponsored ADRs may not entitle the owner to financial or other
reports from the issuer to which it might otherwise be
entitled as the owner of a sponsored ADR. Moreover,
foreign companies are not generally subject to uniform
accounting, auditing and financial reporting standards,
and auditing practices and requirements may not be
comparable to those applicable to U.S. companies. In
many foreign countries, there is less government
supervision and regulation of business and industry practices,
stock exchanges, brokers and listed companies than in the
United States. Foreign securities transactions may
also be subject to higher brokerage costs than domestic
securities transactions. The foreign securities
markets of many of the countries in which a Fund may
invest may also be smaller, less liquid and subject to
greater price volatility than those in the United States. In
addition, a Fund may encounter difficulties or be unable to
pursue legal remedies and obtain judgment in foreign
courts.

temporary periods when assets of a Fund are uninvested
and no return is earned thereon. The inability of a
Fund to make intended security purchases due to
settlement problems could cause that Fund to miss
attractive investment opportunities. Further, the
inability to dispose of portfolio securities due to
settlement problems could result either in losses to a Fund
because of subsequent declines in the value of the portfolio
security or, if a Fund has entered into a contract to sell
the security, in possible liability to the purchaser.
Fixed commissions on some foreign securities exchanges
are generally higher than negotiated commissions on
U.S. exchanges, although IMI will endeavor to achieve
the most favorable net results on a Fund's portfolio
transactions. It may be more difficult for a Fund's
agents to keep currently informed about corporate actions
such as stock dividends or other matters that may affect the
prices of portfolio securities. Communications between the
United States and foreign countries may be less reliable
than within the United States, thus increasing the risk
of delayed settlements of portfolio transactions or
loss of certificates for portfolio securities.
Moreover, individual foreign economies may differ
favorably or unfavorably from the United States economy in
such respects as growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency
and balance of payments position. IMI seeks to
mitigate the risks to a Fund associated with the
foregoing considerations through investment variation
and continuous professional management.

INVESTING IN EMERGING MARKETS

In recent years, many emerging market countries
around the world have undergone political changes that
have reduced government's role in economic and personal
affairs and have stimulated investment and growth.
Historically, there is a strong direct correlation
between economic growth and stock market returns.
While this is no guarantee of future performance, IMI
believes that investment opportunities (particularly in the
energy, environmental services, natural resources, basic
materials, power, telecommunications and transportation
industries) may result within the evolving economies of
emerging market countries from which the Fund and its
shareholders will benefit.

securities and/or a low or nonexistent volume of
trading, which result in a lack of liquidity and
greater price volatility; (iii) certain national
policies that may restrict a Fund's investment
opportunities, including restrictions on investment in issuers or
industries deemed sensitive to national interests; (iv)
foreign taxation; (v) the absence of developed
structures governing private or foreign investment or
allowing for judicial redress for injury to private
property; (vi) the absence, until relatively recently
in certain Eastern European countries, of a capital
market structure or market-oriented economy; (vii) the
possibility that recent favorable economic developments in
Eastern Europe may be slowed or reversed by unanticipated
political or social events in such countries; and (viii) the
possibility that currency devaluations could adversely
affect the value of a Fund's investments. Further,
many emerging markets have experienced and continue to
experience high rates of inflation.

investment in such countries may be limited or may be
required to be effected through intermediaries. The
risk of loss through governmental confiscation may be
increased in such countries.

CANADIAN SECURITIES

Ivy Canada Fund normally invests a significant
portion of its assets in Canadian securities. The
Canadian securities market is among the largest in the
world. Equity securities are traded primarily on the
country's five independent regional stock exchanges:
The Toronto Stock Exchange ("TSE"), the Montreal
Exchange ("ME"), the Vancouver Stock Exchange ("VSE"), the
Alberta Stock Exchange and the Winnipeg Stock Exchange. The
TSE, which is the largest regional exchange, had a
total market capitalization of $1190.8 billion as of
November, 1996 and its 1,304 listed companies had a
November trading volume of 2,610,118,602 shares. A
small percentage of Canadian stocks are traded on the
unlisted or OTC market. In contrast, almost all debt
securities are traded on the OTC. Interlisting is common
among the Canadian and U.S. stock exchanges and the OTC markets.
In addition, the TSE, the American Stock Exchange and
the Midwest Stock Exchange are electronically linked to
permit the order routing of interlisted securities on
those stock exchanges. The ME and the Boston Stock
Exchange are similarly linked. Ivy Canada Fund invests
less than 1% of its assets in securities listed solely
on the VSE.

The economy of Canada is strongly influenced by
the activities of companies and industries involved in
the production and processing of natural resources.
The companies may include those involved in the energy
industry, industrial materials (chemicals, base metals,
timber and paper) and agricultural materials (grain
cereals). The securities of companies in the energy
industry are subject to changes in value and dividend
yield, which depend, to a large extent, on the price and supply
of energy fuels. Rapid price and supply fluctuations may
be caused by events relating to international politics,
energy conservation and the success of exploration
projects. Economic prospects are changing due to recent
government attempts to reduce restrictions against
foreign investment. These considerations are
especially important for a Fund, like Ivy Canada Fund,
which invests primarily in Canadian securities.

Many factors, including social, environmental and
economic conditions, that are not within the control of
Canada affect and could have an adverse impact on the
financial condition of Canada. IMI is unable to
predict what effect, if any, such factors would have on
instruments held in a Fund's portfolio.

Beginning in January of 1989 the U.S. - Canada
Free Trade Agreement will be phased in over a period of
10 years. This agreement will remove tariffs on U.S.
technology and Canadian agricultural products in
addition to removing trade barriers affecting other
important sectors of each country's economy.

Additionally, the recent implementation of the North
American Free Trade Agreement in January, 1994 is
expected to lead to increased trade and reduced
barriers between Canada and the United States.

Canada is one of the world's leading industrial
countries, as well as a major exporter of agricultural
products. Canada is rich in natural resources such as
zinc, uranium, nickel, gold, silver, aluminum, iron and
copper. Forest covers over 44% of land area, making
Canada a leading world producer of newsprint.

Canada is also a major producer of
hydroelectricity, oil and gas. The business activities
of companies in the energy field may include the
production, generation, transmission, marketing,
control or measurement of energy or energy fuels.

Canadian securities exchanges are self-regulatory
agencies that are recognized by the securities
administrators of the province in which the exchange is
located. The largest, most active Canadian exchange is
the TSE, which is a self-regulated agency recognized by
the Ontario Securities Commission. Canadian securities
regulation differs in certain respects from United
States securities regulation. For example, the amount of
information available concerning companies that have securities
traded on Canadian exchanges and do not have securities
traded on an exchange in the United States is generally
less than that available concerning companies which
have securities traded on United States exchanges. See
"Risk Factors and Investment Techniques" in the
Prospectus for a discussion of the risks associated
with investing in the securities of foreign companies.

INVESTING IN LATIN AMERICA

Investing in securities of Latin American issuers
may entail risks relating to the potential political
and economic instability of certain Latin American
countries and the risks of expropriation,
nationalization, confiscation or the imposition of
restrictions on foreign investment and on repatriation of capital
invested. In the event of expropriation,
nationalization or other confiscation by any country, a
Fund could lose its entire investment in any such
country.

The securities markets of Latin American countries
are substantially smaller, less developed, less liquid
and more volatile than the major securities markets in
the U.S. Disclosure and regulatory standards are in
many respects less stringent than U.S. standards.
Furthermore, there is a lower level of monitoring and
regulation of the markets and the activities of
investors in such markets.

The limited size of many Latin American securities
markets and limited trading volume in the securities of
Latin American issuers compared to volume of trading in
the securities of U.S. issuers could cause prices to be
erratic for reasons apart from

factors that affect the soundness and competitiveness
of the securities issuers. For example, limited market
size may cause prices to be unduly influenced by
traders who control large positions. Adverse publicity
and investors' perceptions, whether or not based on in-
depth fundamental analysis, may decrease the value and
liquidity of portfolio securities.

Latin America Strategy Fund invests in securities
denominated in currencies of Latin American countries.
Accordingly, changes in the value of these currencies
against the U.S. dollar will result in corresponding
changes in the U.S. dollar value of the Fund's assets
denominated in those currencies.

Some Latin American countries also may have
managed currencies, which are not free floating against
the U.S. dollar. In addition, there is risk that
certain Latin American countries may restrict the free
conversion of their currencies into other countries.
Further, certain Latin American currencies may not be
internationally traded. Certain of these currencies have
experienced a steep devaluation relative to the U.S. dollar.
Any devaluations in the currencies in which a Fund's
portfolio securities are denominated may have a
detrimental impact on that Fund's net asset value.

The economies of individual Latin American
countries may differ favorably or unfavorably from the
U.S. economy in such respects as the rate of growth of
gross domestic product, the rate of inflation, capital
reinvestment, resource self- sufficiency and balance of
payments position. Certain Latin American countries
have experienced high levels of inflation which can
have a debilitating effect on the economy.
Furthermore, certain Latin American countries may impose
withholding taxes on dividends payable to a Fund at a higher rate
than those imposed by other foreign countries. This may
reduce the Fund's investment income available for
distribution to shareholders.

Certain Latin American countries such as
Argentina, Brazil and Mexico are among the world's
largest debtors to commercial banks and foreign
governments. At times, certain Latin American
countries have declared moratoria on the payment of principal
and/or interest on outstanding debt. Investment in
sovereign debt can involve a high degree of risk. The
governmental entity that controls the repayment of
sovereign debt may not be able or willing to repay the
principal and/or interest when due in accordance with
the terms of such debt. A governmental entity's
willingness or ability to repay principal and interest due in a
timely manner may be affected by, among other factors, its
cash flow situation, the extent of its foreign
reserves, the availability of sufficient foreign
exchange on the date a payment is due, the relative
size of the debt service burden to the economy as a
whole, the governmental entity's policy towards the
International Monetary Fund, and the political constraints to

which a governmental entity may be subject.
Governmental entities may also be dependent on expected
disbursements from foreign governments, multilateral
agencies and others abroad to reduce principal and
interest arrearages on their debt. The commitment on
the part of these governments, agencies and others to
make such disbursements may be conditioned on a governmental
entity's implementation of economic reforms and/or economic
performance and the timely service of such debtor's
obligations. Failure to implement such reforms,
achieve such levels of economic performance or repay
principal or interest when due may result in the
cancellation of such third parties' commitments to lend
funds to the governmental entity, which may further impair
such debtor's ability or willingness to service its debts in a
timely manner. Consequently, governmental entities may
default on their sovereign debt.

Holders of sovereign debt, including a Fund, may
be requested to participate in the rescheduling of such
debt and to extend further loans to governmental
entities. There is no bankruptcy proceeding by which
defaulted sovereign debt may be collected in whole or
in part.

Governments of many Latin American countries have
exercised and continue to exercise substantial
influence over many aspects of the private sector
through the ownership or control of many companies,
including some of the largest in those countries. As a
result, government actions in the future could have a
significant effect on economic conditions which may adversely
affect prices of certain portfolio securities.
Expropriation, confiscatory taxation, nationalization,
political, economic or social instability or other
similar developments, such as military coups, have
occurred in the past and could also adversely affect a
Fund's investments in this region.

Changes in political leadership, the
implementation of market oriented economic policies,
such as privatization, trade reform and fiscal and
monetary reform are among the recent steps taken to
renew economic growth. External debt is being
restructured and flight capital (domestic capital that has left
home country) has begun to return. Inflation control
efforts have also been implemented. Latin American
equity markets can be extremely volatile and in the
past have shown little correlation with the U.S.
market. Currencies are typically weak, but most are
now relatively free floating, and it is not unusual for the
currencies to undergo wide fluctuations in value over short
periods of time due to changes in the market.

INVESTING IN ASIA PACIFIC SECURITIES

Certain Asia-Pacific countries in which Ivy Asia
Pacific Fund may invest are developing countries, and
may be in the initial stages of their industrialization
cycle. The economic structures of developing countries
generally are less diverse and mature than in the
United States, and their political systems may

be relatively unstable. Historically, markets of
developing countries have been more volatile than the
markets of developed countries, yet such markets often
have provided higher rates of return to investors.

Investing in securities of issuers in Asia-Pacific
countries involves certain considerations not typically
associated with investing in securities of United
States companies, including (i) restrictions on foreign
investment and on repatriation of capital invested in
Asian countries, (ii) currency fluctuations, (iii) the
cost of converting foreign currency into United States
dollars, (iv) potential price volatility and lesser liquidity of
shares traded on Asia-Pacific country securities markets
and (v) political and economic risks, including the
risk of nationalization or expropriation of assets and
the risk of war.

Certain Asia-Pacific countries may be more
vulnerable to the ebb and flow of international trade
and to trade barriers and other protectionist or
retaliatory measures. Investments in countries that
have recently opened their capital markets and that
appear to have relaxed their central planning requirement,
as well as in countries that have privatized some of their state-
owned industries, should be regarded as speculative.

The settlement period of securities transactions
in foreign markets in general may be longer than in
domestic markets, and such delays may be of particular
concern in developing countries. For example, the
possibility of political upheaval and the dependence on
foreign economic assistance may be greater in
developing countries than in developed countries, either one of
which may increase settlement delays.

Securities exchanges, issuers and broker-dealers
in some Asia-Pacific countries are subject to less
regulatory scrutiny than in the United States. In
addition, due to the limited size of the markets for
Asia-Pacific securities, the prices for such securities
may be more vulnerable to adverse publicity, investors'
perceptions or traders' positions or strategies, which
could cause a decrease not only in the value but also in the
liquidity of the Fund's investments.

INVESTING IN NATURAL RESOURCES

Since the Ivy Global Natural Resources Fund
normally invests a substantial portion of its assets in
securities of companies engaged in natural resources
activities, the Fund may be subject to greater risks
and market fluctuations than funds with more
diversified portfolios. The value of the Fund's securities will
fluctuate in response to market conditions generally, and
will be particularly sensitive to the markets for those
natural resources in which a particular issuer is
involved. The values of natural resources may also
fluctuate directly with respect to real and perceived
inflationary trends and various political developments.
In selecting the Fund's portfolio of investments, IMI will

consider each company's ability to create new products,
secure any necessary regulatory approvals, and generate
sufficient customer demand. A company's failure to
perform well in any one of these areas, however, could
cause its stock to decline sharply.

Ivy Global Natural Resources Fund's investments in
precious metals (such as gold) and other physical
commodities are subject to special risk considerations,
including substantial price fluctuations over short
periods of time. On the other hand, investments in
precious metals coins or bullion could help to moderate
fluctuations in the value of the Fund's portfolio, since
the prices of precious metals have at times tended not to
fluctuate as widely as shares of issuers engaged in the mining
of precious metals. Because precious metals and other
commodities do not generate investment income, however,
the return on such investments will be derived solely
from the appreciation and depreciation on such
investments. The Fund may also incur storage and other
costs relating to its investments in precious metals
and other commodities, which may, under certain
circumstances, exceed custodial and brokerage costs associated
with investments in other types of securities. When the
Fund purchases a precious metal, IMI currently intends
that it will only be in a form that is readily
marketable.

Natural resource industries throughout the world
may be subject to greater political, environmental and
other governmental regulation than many other
industries. Changes in governmental policies and the
need for regulatory approvals may have an adverse
effect on the products and services of natural
resources companies. For example, the exploration, development
and distribution of coal, oil and gas in the United States
are subject to significant Federal and state
regulation, which may affect rates of return on such
investments and the kinds of services that may be
offered to companies in those industries. In addition,
many natural resource companies have been subject to
significant costs associated with compliance with environmental
and other safety regulations. Such regulations may also
hamper the development of new technologies. The
direction, type or effect of any future regulations
affecting natural resource industries are virtually
impossible to predict.

To take advantage of potential growth
opportunities, Ivy Global Natural Resources Fund might
have significant investments in companies with
relatively small market capitalization. Securities of
smaller companies may be subject to more abrupt or
erratic market movements than the securities of larger more
established companies, because they tend to be traded in lower
volume and because the companies are subject to greater
business risk.

Under normal conditions, Ivy Global Natural
Resources Fund is likely to be invested heavily in
foreign securities. Investing in securities of foreign
issuers and denominated in

foreign currencies involves risks not typically
associated with investing in United States securities,
including fluctuations in foreign exchange rates,
exposure to adverse political and economic developments
and the possible imposition of exchange controls and
related restrictions. In addition, competition is
intense for many natural resource companies. As a result, the
value of the securities issues by such companies may to
subject to increased share price volatility.

INVESTING IN THE CHINA REGION

Investors should realize that China Region
countries may be subject to a greater degree of
economic, political and social instability than is the
case in the United States or other developed countries.
Among the factors causing this instability are (i)
authoritarian governments or military involvement in
political and economic decision making, (ii) popular unrest
associated with demands for improved political, economic and
social conditions, (iii) internal insurgencies, (iv)
hostile relations with neighboring countries, (v)
ethnic, religious and racial disaffection, and (vi)
changes in trading status, any one of which could
disrupt the principal financial markets in which the
Ivy China Region Fund invests and adversely affect the value
of its assets. In addition, several China Region countries
have had hostile relations with neighboring nations.
For example, China continues to claim sovereignty over
Taiwan, and is scheduled to assume sovereignty over
Hong Kong in 1997.

China Region countries tend to be heavily
dependent on international trade, as a result of which
their markets are highly sensitive to protective trade
barriers and the economic conditions of their principal
trading partners (i.e., the United States, Japan and
Western European countries). Protectionist trade
legislation, reduction of foreign investment in China
Region economies and general declines in the international
securities markets could have a significant adverse effect on
the China Region securities markets. In addition,
certain China Region countries have in the past failed
to recognize private property rights and have at times
nationalized or expropriated the assets of private
companies. There is a heightened risk in these
countries that such adverse actions might be repeated.

To take advantage of potential growth
opportunities, the Ivy China Region Fund might have
significant investments in companies with relatively
small market capitalization. Securities of smaller
companies may be subject to more abrupt or erratic
market movements than the securities of larger more
established companies, both because they tend to be traded in
lower volume and because the companies are subject to
greater business risk. In addition, to the extent that
any China Region country experiences rapid increases
in its money supply or investment in equity securities
for speculative purposes, the equity securities traded
in such countries may trade at price- earning multiples
higher than those of comparable companies

trading on securities markets in the United States,
which may not be sustainable. Finally, restriction on
foreign investment exists to varying degrees in some
China Region countries. Where such restrictions apply,
investments may be limited and may increase the Fund's
expenses. See also "Selected Economic and Market Data
for Asia Pacific and China Region Countries" in
Appendix C to this SAI.

PRECIOUS METALS AND OTHER PHYSICAL COMMODITIES

Commodities trading is generally considered a
speculative activity. For example, prices of precious
metals are affected by factors such as cyclical
economic conditions, political events and monetary
policies of various countries. Accordingly, markets
for precious metals may at times be volatile and there may be
sharp price fluctuations even during periods when prices
overall are rising. Investments in physical
commodities may also present practical problems of
delivery, storage and maintenance, possible
illiquidity, the unavailability of accurate market valuations and
increased expenses.

Under current U.S. tax law, the Ivy Global Natural
Resources Fund may not receive more than 10% of its
yearly income from gains resulting from selling
precious metals or any other physical commodity.
Accordingly, the Fund may be required to hold its
precious metals or sell them at a loss, or to sell its
portfolio securities at a gain, when for investment reasons it
would not otherwise do so.

FORWARD FOREIGN CURRENCY CONTRACTS

expose the Fund to the risk of currency exchange loss.

FOREIGN CURRENCIES

Investment in foreign securities will usually
involve currencies of foreign countries. In addition,
a Fund may temporarily hold foreign currency deposits
during the completion of investment programs and may
purchase forward contracts. Because of these factors,
the value of the assets of a Fund as measured in U.S.
dollars may be affected favorably or unfavorably by
changes in foreign currency exchange rates and exchange
control regulations, and the Fund may incur costs in connection
with conversions between various currencies. Although a
Fund values the Fund's assets daily in terms of U.S.
dollars, a Fund does not intend to convert its holdings
of foreign currencies into U.S. dollars on a daily
basis. A Fund may do so from time to time, and
investors should be aware of the costs of currency
conversion. Although foreign exchange dealers do not charge a
fee for conversion, they do realize a profit based on the
difference (the "spread") between the prices at which they
are buying and selling various currencies. Thus, a
dealer may offer to sell a foreign currency to a Fund
at one rate, while offering a lesser rate of exchange
should the Fund desire to resell that currency to the
dealer. A Fund will conduct its foreign currency
exchange transactions either on a cash basis at the spot rate
prevailing in the foreign currency exchange market, or
through entering into forward contracts to purchase or
sell foreign currencies.

Thus, the strength or weakness of the U.S. dollar
against foreign currencies accounts for part of a
Fund's investment performance. U.S. and foreign
securities markets do not always move in step with each
other, and the total returns from different markets may
vary significantly.

REAL ESTATE INVESTMENT TRUSTS (REITs)

Ivy Global Fund may invest in equity real estate
investment trusts ("REITs"). A REIT is a corporation,
trust or association that invests in real estate
mortgages or equities for the benefit of its investors.
REITs are dependent upon management skill, may not be
diversified and are subject to the risks of financing
projects. Such entities are also subject to heavy cash flow
dependency, defaults by borrowers, self-liquidation and the
possibility of failing to qualify for tax-free pass-through
of income under the Internal Revenue Code of 1986, as
amended (the "Code") and to maintain exemption from the
1940 Act. By investing in REITs indirectly through a
fund, a shareholder will bear not only his or her
proportionate share of the expenses of the Fund, but
also, indirectly, similar expenses of the REITs.

OPTIONS TRANSACTIONS

If the writer of an option wishes to terminate the
obligation, the writer may effect a "closing purchase

transaction." This is accomplished by buying an option
of the same series as the option previously written.
The effect of the purchase is that the writer's
position will be cancelled by the Options Clearing
Corporation. However, a writer may not effect a
closing purchase transaction after it has been notified of the
exercise of an option. Likewise, an investor who is the
holder of an option may liquidate his or her position
by effecting a "closing sale transaction." This is
accomplished by selling an option of the same series as
the option previously purchased. There is no guarantee
that either a closing purchase or a closing sale
transaction can be effected at any particular time or at any
acceptable price. If any call or put option is not exercised
or sold, it will become worthless on its expiration
date.

A Fund will realize a gain (or a loss) on a
closing purchase transaction with respect to a call or
a put previously written by the Fund if the premium,
plus commission costs, paid by the Fund to purchase the
call or the put is less (or greater) than the premium,
less commission costs, received by the Fund on the sale
of the call or the put. A gain also will be realized if a call
or a put that a Fund has written lapses unexercised,
because the Fund would retain the premium. Any such
gains (or losses) are considered short-term capital
gains (or losses) for Federal income tax purposes. Net
short-term capital gains, when distributed by a Fund,
are taxable as ordinary income. See "Taxation."

A Fund may write covered call options as described
in the Fund's Prospectus. A "covered" call option
means generally that so long as the Fund is obligated
as the writer of a call option, the Fund will (i) own
the underlying securities subject to the option, or
(ii) have the right to acquire the underlying
securities through immediate conversion or exchange of
convertible preferred stocks or convertible debt securities owned
by the Fund. Although a Fund receives premium income
from these activities, any appreciation realized on an
underlying security will be limited by the terms of the
call option. A Fund may purchase call options on
individual securities only to effect a "closing
purchase transaction."

A Fund may also purchase a put option on an
underlying security that it owns and at the same time
write a call option on the same security with the same
exercise price and expiration

date. Depending on whether the underlying security
appreciates or depreciates in value, a Fund would sell
the underlying security for the exercise price either
upon exercise of the call option written by it or by
exercising the put option held by it. A Fund would
enter into such transactions in order to profit from
the difference between the premium received by the Fund for the
writing of the call option and the premium paid by the
Fund for the purchase of the put option, thereby
increasing the Fund's current return. A Fund may write
(sell) put options on individual securities only to
effect a "closing sale transaction."

PURCHASING AND WRITING OPTIONS ON SECURITIES
INDICES. A Fund may purchase and sell (write) put and
call options on securities indices. An index assigns
relative values to the securities included in the index
and the index fluctuates with changes in the market
values of the securities so included. Options on
indices are similar to options on individual
securities, except that, rather than giving the purchaser the
right to take delivery of an individual security at a
specified price, they give the purchaser the right to
receive cash. The amount of cash is equal to the
difference between the closing price of the index and
the exercise price of the option, expressed in dollars,
times a specified multiple (the "multiplier"). The
writer of the option is obligated, in return for the
premium received, to make delivery of this amount.

RISKS OF OPTIONS TRANSACTIONS. The purchase and
writing of

options involves certain risks. During the option
period, the covered call writer has, in return for the
premium on the option, given up the opportunity to
profit from a price increase in the underlying
securities above the exercise price, but, as long as
its obligation as a writer continues, has retained the risk of
loss should the price of the underlying security decline.
The writer of an option has no control over the time
when it may be required to fulfill its obligation as a
writer of the option. Once an option writer has
received an exercise notice, it cannot effect a closing
purchase transaction in order to terminate its
obligation under the option and must deliver the underlying
securities (or cash in the case of an index option) at the
exercise price. If a put or call option purchased by a Fund
is not sold when it has remaining value, and if the
market price of the underlying security (or index), in
the case of a put, remains equal to or greater than the
exercise price or, in the case of a call, remains less
than or equal to the exercise price, a Fund will lose
its entire investment in the option. Also, where a put
or call option on a particular security (or index) is purchased
to hedge against price movements in a related security (or
securities), the price of the put or call option may
move more or less than the price of the related
security (or securities). In this regard, there are
differences between the securities and options markets
that could result in an imperfect correlation between
these markets, causing a given transaction not to achieve
its objective.

A Fund's options activities also may have an
impact upon the level of its portfolio turnover and
brokerage commissions. See "Portfolio Turnover."

A Fund's success in using options techniques
depends, among other things, on IMI's ability to
predict accurately the direction and volatility of
price movements in the options and

securities markets, and to select the proper type, time
and duration of options.

FUTURES CONTRACTS

FUTURES, IN GENERAL. A Fund may enter into
futures contracts for hedging purposes. A futures
contract provides for the future sale by one party and
purchase by another party of a specified quantity of a
commodity at a specified price and time. When a
purchase or sale of a futures contract is made by a Fund,
the Fund is required to deposit with its custodian (or broker,
if legally permitted) a specified amount of cash or
U.S. Government securities ("initial margin"). The
margin required for a futures contract is set by the
exchange on which the contract is traded and may be
modified during the term of the contract. The initial
margin is in the nature of a performance bond or good faith
deposit on the futures contract which is returned to the Fund
upon termination of the contract, assuming all
contractual obligations have been satisfied. A futures
contract held by the Fund is valued daily at the
official settlement price of the exchange on which it
is traded. Each day the Fund pays or receives cash,
called "variation margin," equal to the daily change in
value of the futures contract. This process is known
as "marking to market." Variation margin does not represent a
borrowing or loan by a Fund but is instead a settlement
between the Fund and the broker of the amount one would
owe the other if the futures contract expired. In
computing daily net asset value, the Fund will mark-to-
market its open futures position.

Although some futures contracts call for making or
taking delivery of the underlying securities, generally
these obligations are closed out prior to delivery of
offsetting purchases or sales of matching futures
contracts (same exchange, underlying security or index,
and delivery month). If an offsetting purchase price
is less than the original sale price, a Fund generally
realizes a capital gain, or if it is more, the Fund
generally realizes a capital loss. Conversely, if an
offsetting sale price is more than the original purchase price,
the Fund generally realizes a capital gain, or if it is
less, the Fund generally realizes a capital loss. The
transaction costs must also be included in these
calculations. When purchasing a futures contract, a
Fund will maintain with its Custodian (and mark-to-
market on a daily basis) cash or liquid securities that,
when added to the amounts deposited with a futures commission
merchant ("FCM") as margin, are equal to the market value of
the futures contract.

A Fund will only enter into futures contracts
which are standardized and traded on a U.S. or foreign
exchange, board of trade, or similar entity or quoted
on an automated quotation system. A Fund will not
enter into a futures contract if, immediately
thereafter, the aggregate initial margin deposits for
futures contracts held by the Fund plus premiums paid by it for
open futures option positions, less the amount by which
any such positions are "in-the-money," would exceed 5%
of the liquidation value of the Fund's portfolio (or
the Fund's net asset value), after taking into account
unrealized profits and unrealized losses on any such
contracts the Fund has entered into.

The requirements for qualification as a regulated
investment company also may limit the extent to which a
Fund may enter into futures.

FOREIGN CURRENCY FUTURES CONTRACTS. A Fund may
engage in foreign currency futures contracts for
hedging purposes. A foreign currency futures contract
provides for the future sale by one party and purchase
by another party of a specified quantity of a foreign
currency at a specified price and time.

RISKS ASSOCIATED WITH FUTURES. There are several
risks associated with the use of futures contracts as
hedging techniques. A purchase or sale of a futures
contract may result in losses in excess of the amount
invested in the futures contract. There can be no
guarantee that there will be a correlation between
price movements in the hedging vehicle and in a Fund's
portfolio securities being hedged. In addition, there
are significant differences between the securities and futures
markets that could result in an imperfect correlation
between the markets, causing a given hedge not to
achieve its objectives. The degree of imperfection of
correlation depends on circumstances such as variations
in speculative market demand for futures on securities,
including technical influences in futures trading, and
differences between the financial instruments being
hedged and the instruments underlying the standard contracts
available for trading in such respects as interest rate
levels, maturities, and creditworthiness of issuers. A
decision as to whether, when and how to hedge involves
the exercise of skill and judgment, and even a well-
conceived hedge may be unsuccessful to some degree
because of market behavior or unexpected interest rate
trends.

work to prevent the liquidation of unfavorable
positions. For example, futures prices have
occasionally moved to the daily limit for several
consecutive trading days with little or no trading,
thereby preventing prompt liquidation of positions and
subjecting some holders of futures contracts to substantial
losses.

There can be no assurance that a liquid market
will exist at a time when a Fund seeks to close out a
futures position, and the Fund would remain obligated
to meet margin requirements until the position is
closed. In addition, there can be no assurance that an
active secondary market will continue to exist.

Currency futures contracts may be traded on
foreign exchanges. Such transactions may not be
regulated as effectively as similar transactions in the
United States; may not involve a clearing mechanism and
related guarantees; and are subject to the risk of
governmental actions affecting trading in, or the prices
of, foreign securities. The value of such position also could be
adversely affected by (i) other complex foreign
political, legal and economic factors, (ii) lesser
availability than in the United States of data on which
to make trading decisions, (iii) delays in a Fund's
ability to act upon economic events occurring in
foreign markets during non business hours in the United States,
(iv) the imposition of different exercise and settlement
terms and procedures and margin requirements than in
the United States, and (v) lesser trading volume.

SECURITIES INDEX FUTURES CONTRACTS

A Fund may enter into securities index futures
contracts as an efficient means of regulating the
Fund's exposure to the equity markets. A Fund will not
engage in transactions in futures contracts for
speculation but only as a hedge against changes
resulting from market conditions in the values of
securities held in the Fund's portfolio or which it intends to
purchase.

An index futures contract is a contract to buy or
sell units of an index at a specified future date at a
price agreed upon when the contract is made. Entering
into a contract to buy units of an index is commonly
referred to as purchasing a contract or holding a long
position in the index. Entering into a contract to
sell units of an index is commonly referred to as selling a
contract or holding a short position. The value of a unit is
the current value of the stock index. For example, the
S&P 500 Index is composed of 500 selected common
stocks, most of which are listed on the New York Stock
Exchange (the "Exchange"). The S&P 500 Index assigns
relative weightings to the 500 common stocks included
in the Index, and the Index fluctuates with changes in
the market values of the shares of those common stocks. In the
case of the S&P 500 Index, contracts are to buy or sell
500 units. Thus, if the value of the S&P 500 Index
were $150, one contract would be worth $75,000 (500
units x $150). The index

futures contract specifies that no delivery of the
actual securities making up the index will take place.
Instead, settlement in cash must occur upon the
termination of the contract, with the settlement being
the difference between the contract price and the
actual level of the stock index at the expiration of
the contract. For example, if a Fund enters into a
futures contract to buy 500 units of the S&P 500 Index at a
specified future date at a contract price of $150 and the S&P
500 Index is at $154 on that future date, a Fund will
gain $2,000 (500 units x gain of $4). If a Fund enters
into a futures contract to sell 500 units of the stock
index at a specified future date at a contract price of
$150 and the S&P 500 Index is at $154 on that future
date, the Fund will lose $2,000 (500 units x loss of
$4).

A Fund's ability to hedge effectively all or a
portion of its securities through transactions in index
futures (and therefore the extent of its gain or loss
on such transactions) depends on the degree to which
price movements in the underlying index correlate with
price movements in the Fund's securities. Insofar as
such securities do not duplicate the components of an
index, the correlation probably will not be perfect.
Consequently, a Fund will bear the risk that the prices of the
securities being hedged will not move in the same amount as
the hedging instrument. This risk will increase as the
composition of a Fund's portfolio diverges from the
composition of the hedging instrument.

underlying security or index, and delivery month). If
an offsetting purchase price is less than the original
sale price, a Fund generally realizes a capital gain,
or if it is more, the Fund generally realizes a capital
loss. Conversely, if an offsetting sale price is more
than the original purchase price, a Fund generally
realizes a capital gain, or if it is less, the Fund
generally realizes a capital loss. The transaction costs
must also be included in these calculations.

When purchasing an index futures contract, a Fund
will maintain with its custodian in a segregated
account (and mark-to- market on a daily basis) cash or
liquid securities that, when added to the amounts
deposited with a futures commission merchant ("FCM") as
margin, are equal to the market value of the futures
contract. Alternatively, a Fund may "cover" its position by
purchasing a put option on the same futures contract with a
strike price as high as or higher than the price of the
contract held by a Fund.

When selling an index futures contract, a Fund
will maintain with its custodian in a segregated
account (and mark-to-market on a daily basis) cash or
liquid securities that, when added to the amounts
deposited with an FCM as margin, are equal to the market
value of the instruments underlying the contract. Alternatively,
a Fund may "cover" its position by owning the
instruments underlying the contract (or, in the case of
an index futures contract, a portfolio with a
volatility substantially similar to that of the index
on which the futures contract is based), or by holding
a call option permitting a Fund to purchase the same
futures contract at a price no higher than the price of the
contract written by the Fund (or at a higher price if the
difference is maintained in liquid assets with the Fund's
custodian).

COMBINED TRANSACTIONS. A Fund may enter into
multiple transactions, including multiple options
transactions, multiple futures transactions, multiple
currency transactions (including forward currency
contracts) and multiple interest rate transactions and
some combination of futures, options, currency and
interest rate transactions ("component" transactions),
instead of a single transaction, as part of a single or combined
strategy when, in the opinion of IMI, it is in the best
interests of a Fund to do so. A combined transaction
will usually contain elements of risk that are present
in each of its component transactions. Although
combined transactions are normally entered into based
on IMI's judgment that the combined strategies

will reduce risk or otherwise more effectively achieve
the desired portfolio management goal, it is possible
that the combination will instead increase such risks
or hinder achievement of the management objective.

FIRM COMMITMENT AGREEMENTS AND WHEN-ISSUED SECURITIES

New issues of certain debt securities are often
offered on a "when-issued basis," meaning the payment
obligation and the interest rate are fixed at the time
the buyer enters into the commitment, but delivery and
payment for the securities normally take place after
the date of the commitment to purchase. Firm
commitment agreements call for the purchase of securities at an
agreed-upon price on a specified future date. A Fund uses
such investment techniques in order to secure what is
considered to be an advantageous price and yield to the
Fund and not for purposes of leveraging the Fund's
assets. In either instance, a Fund will maintain in a
segregated account with its custodian cash or liquid
securities equal (on a daily marked-to-market basis) to
the amount of its commitment to purchase the underlying
securities.

RESTRICTED AND ILLIQUID SECURITIES

An "illiquid security" is an asset that may not be
sold or disposed of in the ordinary course of business
within seven days at approximately the value at which a
Fund has valued the security on its books. A
"restricted security" is a security that cannot be
offered to the public for sale without first being
registered under the Securities Act of 1933, and is considered to
be illiquid until such filing takes place. Restricted
securities may be sold only in privately negotiated
transactions or in a public offering with respect to
which a registration statement is in effect under the
Securities Act of 1933. Where a registration statement
is required, a Fund may be required to bear all or part
of the registration expenses. Issuers of restricted securities
may not be subject to the disclosure and other investor
protection requirements that would be applicable if their
securities were publicly traded. There may also be a lapse
of time between a Fund's decision to sell a restricted
or illiquid security and the point at which the Fund is
permitted or able to do so. If, during such a period,
adverse market conditions were to develop, a Fund might
obtain a less favorable price than the price that
prevailed when it decided to sell. Since it is not
possible to predict with assurance that the market for securities
eligible for resale under Rule 144A will continue to be
liquid, a Fund will monitor each of its investments in
these securities, focusing on factors such as
valuation, liquidity and availability of information.
This investment practice could have the effect of
increasing the level of illiquidity in a Fund to the extent
that qualified institutional buyers become, for a time,
uninterested in purchasing these restricted securities.
Securities whose proceeds are subject to limitations on
repatriation of principal or profits for more than seven days,

and those for which market quotations are not readily
available, may be deemed illiquid for these purposes.

BORROWING

Borrowing may exaggerate the effect on a Fund's
net asset value of any increase or decrease in the
value of the Fund's portfolio securities. Money
borrowed will be subject to interest costs (which may
include commitment fees and/or the cost of maintaining
minimum average balances). Although the principal of a
Fund's borrowings will be fixed, the Fund's assets may change
in value during the time a borrowing is outstanding, thus
increasing exposure to capital risk. All borrowings will
be repaid before any additional investments are made.

LOANS OF PORTFOLIO SECURITIES

A Fund may lend its investment securities to
brokers, dealers and financial institutions for the
purpose of realizing additional income. Loans of
securities by a Fund will be collateralized by cash,
letters of credit, or securities issued or guaranteed
by the U.S Government or its agencies or
instrumentalities. The collateral will equal (on a daily marked-
to-market basis) at least 100% of the current market
value of the loaned securities. The risks in lending
portfolio securities, as with other extensions of
credit, involve a possible loss of rights in the
collateral should the borrower fail financially. In
determining whether to lend securities, IMI will consider all
relevant facts and circumstances, including the
creditworthiness of the borrower.

INVESTMENT RESTRICTIONS

A Fund's investment objective, as set forth in the
Prospectus under "Investment Objectives and Policies,"
and the investment restrictions set forth below are
fundamental policies of the Fund and may not be changed
with respect to that Fund without the approval of a
majority (as defined in the 1940 Act) of the
outstanding voting shares of that Fund. Under these
restrictions, each of Ivy Asia Pacific Fund, Ivy China Region
Fund, Ivy Global Natural Resources Fund, Ivy Global Science
& Technology Fund, Ivy International Fund, Ivy
International Small Companies Fund, Ivy Latin America
Strategy Fund and Ivy New Century Fund may not:

(i) make an investment in securities of companies
in any one industry (except obligations of
domestic banks or the U.S. Government, its
agencies, authorities, or instrumentalities)
if such investment would cause investments in
such industry to exceed 25% of the market
value of the Fund's total assets at the time of
such investment; or

(ii) issue senior securities, except as
appropriate to

evidence indebtedness which it is permitted
to incur, and except to the extent that
shares of the separate classes or series of
the Trust may be deemed to be senior
securities; provided that collateral
arrangements with respect to currency-related
contracts, futures contracts, options or other
permitted investments, including deposits of initial
and variation margin, are not considered to be the
issuance of senior securities for purposes of this
restriction.

Further, as a matter of fundamental policy, each of Ivy
Asia Pacific Fund, Ivy Canada Fund, Ivy China Region
Fund, Ivy Global Fund, Ivy Global Natural Resources
Fund, Ivy Global Science & Technology Fund, Ivy
International Small Companies Fund and Ivy New Century
Fund may not:

(i) purchase securities of any one issuer (except
U.S. Government securities) if as a result
more than 5% of the Fund's total assets would
be invested in such issuer or the Fund would
own or hold more than 10% of the outstanding
voting securities of that issuer; provided,
however, that up to 25% of the value of the
Fund's total assets may be invested without regard to
these limitations.

Further, as a matter of fundamental policy, each
of Ivy Asia Pacific Fund, Ivy China Region Fund, Ivy
International Fund, Ivy Latin America Strategy Fund and
Ivy New Century Fund may not:

(i) participate in an underwriting or selling
group in connection with the public
distribution of securities except for its own
capital stock.

Further, as a matter of fundamental policy, each
of Ivy China Region Fund, Ivy Global Science &
Technology Fund, Ivy International Fund, Ivy Latin
America Strategy Fund and Ivy New Century Fund may not:

(i) purchase securities on margin; or

(ii) purchase from or sell to any of its officers
or trustees, or firms of which any of them
are members or which they control, any
securities (other than capital stock of the
Fund), but such persons or firms may act as
brokers for the Fund for customary commissions to
the extent permitted by the Investment Company Act of
1940.

Further, as a matter of fundamental policy, Ivy Asia
Pacific Fund, Ivy Canada Fund, Ivy Global Fund, Ivy
Global Natural Resources Fund and Ivy International
Small Companies Fund may not:

(i) Purchase securities on margin, except such
short-term credits as are necessary for the
clearance of transactions, but Ivy Asia
Pacific Fund, Ivy Global Fund, Ivy Global
Natural Resources Fund and Ivy International
Small Companies Fund may make margin deposits
in connection with transactions in options,
futures and options on futures; or

(ii) Make loans, except this restriction shall not
prohibit (a) the purchase and holding of a
portion of an issue of publicly distributed
debt securities, (b) the entry into
repurchase agreements with banks or broker-
dealers, or, with respect to Ivy Asia Pacific Fund, Ivy
Global Fund, Ivy Global Natural Resources Fund and Ivy
International Small Companies Fund, (c) the
lending of the Fund's portfolio securities in
accordance with applicable guidelines
established by the Securities and Exchange
Commission (the "SEC") and any guidelines
established by the Trust's Trustees.

Further, as a matter of fundamental policy, Ivy Canada
Fund, Ivy Global Fund, Ivy Global Natural Resources
Fund and Ivy International Small Companies Fund may
not:

(i) Make investments in securities for the
purpose of exercising control over or
management of the issuer; or

(ii) Act as an underwriter of securities, except
to the extent that, in connection with the
sale of securities, it may be deemed to be an
underwriter under applicable securities laws.

Further, as a matter of fundamental policy, each of Ivy
Asia Pacific Fund, Ivy Global Natural Resources Fund,
Ivy Global Science & Technology Fund and Ivy
International Small Companies Fund may not:

(i) borrow money, except as a temporary measure
for extraordinary or emergency purposes, and
provided that the Fund maintains asset
coverage of 300% for all borrowings.

Further, as a matter of fundamental policy, Ivy Asia
Pacific Fund, Ivy Global Fund, Ivy Global Natural
Resources Fund and Ivy International Small Companies
Fund may not:

(i) Invest in real estate, real estate mortgage
loans, commodities or interests in oil, gas
and/or mineral exploration or development
programs, although (a) the Fund may purchase
and sell marketable securities of issuers
which are secured by real estate, (b) the Fund
may purchase and sell securities of issuers which
invest or deal in real estate, (c) the Fund may enter
into forward foreign currency contracts as described in

the Fund's prospectus, and (d) the Fund may
write or buy puts, calls, straddles or
spreads and may invest in commodity futures
contracts and options on futures contracts.

Further, as a matter of fundamental policy, each of Ivy
China Region Fund, Ivy International Fund, Ivy Latin
America Strategy Fund and Ivy New Century Fund may not:

(i) purchase or sell real estate or commodities
and commodity contracts; or

(ii) sell securities short.

Under the 1940 Act, a Fund is permitted, subject
to each Fund's investment restrictions, to borrow money
only from banks. The Trust has no current intention of
borrowing amounts in excess of 5% of each the Fund's
assets. Each of Ivy China Region Fund, Ivy
International Fund, Ivy Latin America Strategy Fund and Ivy
New Century Fund will continue to interpret fundamental
investment restriction (i) above to prohibit investment in real
estate limited partnership interests; this restriction
shall not, however, prohibit investment in readily
marketable securities of companies that invest in real
estate or interests therein, including real estate
investment trusts.

Further, as a matter of fundamental policy, each
of Ivy Asia Pacific Fund, Ivy China Region Fund, Ivy
Global Natural Resources Fund, Ivy Global Science &
Technology Fund, Ivy International Small Companies
Fund, Ivy Latin America Strategy Fund and Ivy New
Century Fund may not:

(i) lend any funds or other assets, except that
this restriction shall not prohibit (a) the
entry into repurchase agreements, (b) the
purchase of publicly distributed bonds,
debentures and other securities of a similar
type, or privately placed municipal or
corporate bonds, debentures and other securities of a
type customarily purchased by institutional investors
or publicly traded in the securities markets, or
(c) the lending of portfolio securities
(provided that the loan is secured
continuously by collateral consisting of U.S.
Government securities or cash or cash
equivalents maintained on a daily marked-to-market
basis in an amount at least equal to the market value
of the securities loaned).

Further, as a matter of fundamental policy, each of Ivy
Latin America Strategy Fund and Ivy New Century Fund
may not:

(i) borrow money, except for temporary or
emergency purposes; provided that the Fund
maintains asset coverage of 300% for all
borrowings.

Further, as a matter of fundamental policy, each of Ivy
China Region Fund and Ivy International Fund may not:

(i) borrow money, except for temporary purposes
where investment transactions might
advantageously require it. Any such loan may
not be for a period in excess of 60 days, and
the aggregate amount of all outstanding loans
may not at any time exceed 10% of the value of
the total assets of the Fund at the time any such loan
is made.

Further, as a matter of fundamental policy, Ivy Canada
Fund and Ivy Global Fund may not:

(i) Participate on a joint or a joint and several
basis in any trading account in securities.
The "bunching" of orders of the Fund and of
other accounts under the investment
management of the Manager (in the case of Ivy
Global Fund) or the investment adviser, Mackenzie
Financial Corporation (the "Investment Adviser") (in
the case of Ivy Canada Fund) for the sale or purchase
of portfolio securities shall not be considered
participation in a joint securities trading
account;

(ii) Borrow amounts in excess of 10% of its total
assets, taken at the lower of cost or market
value, and then only from banks as a
temporary measure for extraordinary or
emergency purposes. All borrowings will be
repaid before any additional investments are
made;

(iii)Purchase the securities of issuers conducting
their principal business activities in the
same industry if immediately after such
purchase the value of the Fund's investments
in such industry would exceed 25% of the
value of the total assets of the Fund;

(iv) Purchase any security if, as a result, the
Fund would then have more than 5% of its
total assets (taken at current value)
invested in securities restricted as to
disposition under the Federal securities laws; or

(v) Issue senior securities, except insofar as
the Fund may be deemed to have issued a
senior security in connection with any
repurchase agreement or any permitted
borrowing.

Further, as a matter of fundamental policy, Ivy Canada
Fund may not:

(i) Write or buy puts, calls, straddles or
spreads; invest in real estate, real estate
mortgage loans, commodities, commodity
futures contracts or interests in oil, gas
and/or mineral exploration or development

programs, although (a) the Fund may purchase
and sell marketable securities of issuers
which are secured by real estate, (b) the
Fund may purchase and sell securities of
issuers which invest or deal in real estate,
and (c) the Fund may enter into forward foreign
currency contracts as described in the Fund's
prospectus.

Further, as a matter of fundamental policy, Ivy Global
Fund may not:

(i) purchase securities of another investment
company, except in connection with a merger,
consolidation, reorganization or acquisition
of assets, and except that the Fund may
invest in securities of other investment
companies subject to the restrictions in
Section 12(d)(1) of the Investment Company Act of 1940
(the "1940 Act").

Further, as a matter of fundamental policy, Ivy Global
Science & Technology Fund may not:

(i) participate in an underwriting or selling
group in connection with the public
distribution of securities, except for its
own capital stock, and except to the extent
that, in connection with the disposition of
portfolio securities, it may be deemed to be an
underwriter under the Federal securities laws;

(ii) purchase or sell real estate or commodities
and commodity contracts; provided, however,
that the Fund may purchase securities secured
by real estate or interests therein, or
securities issued by companies that invest in
real estate or interests therein, and except
that, subject to the policies and restrictions
set forth in the Prospectus and elsewhere in this SAI,
(i) the Fund may enter into futures contracts, and
options thereon, and (ii) the Fund may enter into
forward foreign currency contracts and currency
futures contracts, and options thereon; or

(iii)sell securities short, except for short sales
"against the box."

Further, as a matter of fundamental policy, Ivy
International Fund may not:

(i) lend any funds or other assets, except that
this restriction shall not prohibit (a) the
entry into repurchase agreements or (b) the
purchase of publicly distributed bonds,
debentures and other securities of a similar
type, or privately placed municipal or
corporate bonds, debentures and other securities of a
type customarily purchased by institutional investors

or publicly traded in the securities markets;

(ii) invest more than 5% of the value of its total
assets in the securities of any one issuer
(except obligations of domestic banks or the
U.S. Government, its agencies, authorities
and instrumentalities); or

(iii)purchase the securities of any other open-end
investment company, except as part of a plan
of merger or consolidation.

ADDITIONAL RESTRICTIONS

Unless otherwise indicated, each Fund has adopted
the following additional restrictions, which are not
fundamental and which may be changed without
shareholder approval, to the extent permitted by
applicable law, regulation or regulatory policy. Under
these restrictions, each of Ivy Asia Pacific Fund, Ivy
China Region Fund, Ivy Global Natural Resources Fund, Ivy Global
Science & Technology Fund, Ivy International Small
Companies Fund, Ivy Latin America Strategy Fund and Ivy
New Century Fund may not:

(i) invest more than 15% of its net assets taken
at market value at the time of investment in
"illiquid securities", provided, however,
that the Fund will not invest more than 10%
of its total assets in securities of issuers
that are restricted from selling to the
public without registration under the Securities act of
1933. Illiquid securities may include securities
subject to legal or contractual restrictions on
resale (including private placements),
repurchase agreements maturing in more than
seven days, certain options traded over the
counter that the Fund has purchased,
securities being used to cover certain options that a
fund has written, securities for which market
quotations are not readily available, or other
securities which legally or in IMI's opinion, subject
to the Board's supervision, may be deemed illiquid,
but shall not include any instrument that,
due to the existence of a trading market, to
the Fund's compliance with certain conditions
intended to provide liquidity, or to other
factors, is liquid.

Further, as a matter of non-fundamental policy, each of
Ivy Asia Pacific Fund, Ivy China Region Fund, Ivy
Global Science & Technology Fund, Ivy International
Fund, Ivy Latin America Strategy Fund and Ivy New
Century Fund may not:

(i) invest in oil, gas or other mineral leases or
exploration or development programs.

Further, as a matter of non-fundamental policy, each of
Ivy Asia Pacific Fund, Ivy China Region Fund, Ivy
Global Natural Resources

Fund, Ivy International Small Companies Fund, Ivy Latin
America Strategy Fund and Ivy New Century Fund may not:

(i) purchase securities of other investment
companies, except in connection with a
merger, consolidation or sale of assets, and
except that it may purchase shares of other
investment companies subject to such
restrictions as may be imposed by the Investment
Company Act of 1940 and rules thereunder.

Further, as a matter of non-fundamental policy, each of
Ivy China Region Fund, Ivy Global Science & Technology
Fund, Ivy International Fund, Ivy Latin America
Strategy Fund and Ivy New Century Fund may not:

(i) invest in companies for the purpose of
exercising control of management; or

(ii) invest more than 5% of its total assets in
warrants, valued at the lower of cost or
market, or more than 2% of its total assets
in warrants, so valued, which are not listed
on either the New York or American Stock
Exchanges.

Further, as a matter of non-fundamental policy, each of
Ivy Canada Fund, Ivy Global Fund, Ivy Global Natural
Resources Fund and Ivy International Small Companies
Fund may not:

(i) purchase or sell interests in oil, gas or
mineral leases (other than securities of
companies that invest in or sponsor such
programs).

Further, as a matter of non-fundamental policy, each of
Ivy Canada Fund, Ivy Global Fund and Ivy International
Small Companies Fund may not:

(i) purchase or sell real estate limited
partnership interests.

Further, as a matter of non-fundamental policy, each of
Ivy Asia Pacific Fund, Ivy Global Natural Resources
Fund and Ivy International Small Companies Fund may
not:

(i) sell securities short, except for short sales
"against the box;" or

(ii) participate on a joint or a joint and several
basis in any trading account in securities.
The "bunching" of orders of the Fund and of
other accounts under the investment
management of the Fund's investment adviser,
for the sale or purchase of portfolio securities shall
not be considered participation in a joint securities
trading account.

Further, as a matter of non-fundamental policy, Ivy
Latin America Strategy Fund may not:

(i) purchase or retain securities of an issuer
if, with respect to 75% of the Fund's total
assets, such purchase would result in more
than 10% of the outstanding voting securities
of such issuer being held by the Fund.

In addition, pursuant to the requirements of the
1940 Act, Ivy International Fund, may not, with respect
to 75% of its total assets, invest more than 5% of its
total assets in the securities of any one issuer.

Whenever an investment objective, policy or
restriction set forth in the Prospectus or this SAI
states a maximum percentage of assets that may be
invested in any security or other asset or describes a
policy regarding quality standards, such percentage
limitation or standard shall, unless otherwise indicated, apply
to the particular Fund only at the time a transaction is
entered into. Accordingly, if a percentage limitation
is adhered to at the time of investment, a later
increase or decrease in the percentage which results
from circumstances not involving any affirmative action
by a Fund, such as a change in market conditions or a
change in the Fund's asset level or other circumstances
beyond the Fund's control, will not be considered a
violation.

ADDITIONAL RIGHTS AND PRIVILEGES

The Trust offers and (except as noted below) bears
the cost of providing to investors the following rights
and privileges. The Trust reserves the right to amend
or terminate any one or more of these rights and
privileges. Notice of amendments to or terminations of
rights and privileges will be provided to shareholders
in accordance with applicable law.

Certain of the rights and privileges described
below refer to funds, other than the Funds, whose
shares are also distributed by Ivy Mackenzie
Distributors, Inc. ("IMDI"). These funds are: Ivy
Growth Fund, Ivy Growth with Income Fund, Ivy Emerging Growth
Fund, Ivy International Fund II (expected effective date of
May 13, 1997), Ivy Pan-Europe Fund (expected effective
date of May 13, 1997), Ivy International Bond Fund, Ivy
Bond Fund and Ivy Money Market Fund (the other eight
series of the Trust); and Mackenzie California
Municipal Fund, Mackenzie Limited Term Municipal Fund,
Mackenzie National Municipal Fund and Mackenzie New
York Municipal Fund (the four series of Mackenzie Series
Trust) (collectively, with the Funds, the "Ivy Mackenzie Funds").
Shareholders should obtain a current prospectus before
exercising any right or privilege that may relate to
these funds.

Effective April 18, 1997 (the "Effective Date"),
Ivy International Fund suspended the offer of its
shares to new

investors. Shares of Ivy International Fund are
available for purchase only by existing shareholders of
Ivy International Fund. In addition, a prospective
investor who communicated his or her definite
indication of interest in purchasing Ivy International
Fund shares within 30 days prior to the Effective Date, to either
IMDI or through his or her investment professional, may
purchase Ivy International Fund shares within three
months following the Effective Date, provided the
investor meets the minimum initial investment
requirement of Ivy International Fund. As of the
Effective Date, expressions of interest are no longer accepted by
IMDI. Once a shareholder's account has been liquidated,
the shareholder may not invest in Ivy International
Fund at a later date.

AUTOMATIC INVESTMENT METHOD

The Automatic Investment Method, which enables a
Fund shareholder to have specified amounts
automatically drawn each month from his or her bank for
investment in Fund shares, is available for Class A,
Class B and Class C shares. The minimum initial and
subsequent investment under this method is $50 per
month (except in the case of a tax qualified retirement plan for
which the minimum initial and subsequent investment is
$25 per month). A shareholder may terminate the
Automatic Investment Method at any time upon delivery
to Ivy Mackenzie Services Corp. ("IMSC") of telephone
instructions or written notice. See "Automatic
Investment Method" in the Prospectus. To begin the
plan, complete Sections 6A and 7B of the Account Application.

EXCHANGE OF SHARES

CONTINGENT DEFERRED SALES CHARGE SHARES. CLASS A:
Class A shareholders may exchange their Class A shares
that are subject

to a contingent deferred sales charge ("CDSC"), as
described in the Prospectus ("outstanding Class A
shares"), for Class A shares of another Ivy or
Mackenzie Fund ("new Class A shares") on the basis of
the relative net asset value per Class A share, without
the payment of any CDSC that would otherwise be due upon the
redemption of the outstanding Class A shares. Class A
shareholders of a Fund exercising the exchange privilege will
continue to be subject to that Fund's CDSC period
following an exchange if such period is longer than the
CDSC period, if any, applicable to the new Class A
shares.

CLASS B: Class B shareholders may exchange their
Class B shares ("outstanding Class B shares") for Class
B shares of another Ivy or Mackenzie Fund ("new Class B
shares") on the basis of the relative net asset value
per Class B share, without the payment of any CDSC that
would otherwise be due upon the redemption of the
outstanding Class B shares. Class B shareholders of a
Fund exercising the exchange privilege will continue to
be subject to that Fund's CDSC schedule (or period)
following an exchange if such schedule is higher (or such period
is longer) than the CDSC schedule (or period) applicable
to the new Class B shares.

The following CDSC table ("Table 1") applies to
Class B shares of Ivy Asia Pacific Fund, Ivy Bond Fund,
Ivy Canada Fund, Ivy China Region Fund, Ivy Emerging
Growth Fund, Ivy Global Fund, Ivy Global Natural
Resources Fund, Ivy Global Science & Technology Fund,
Ivy Growth Fund, Ivy Growth with Income Fund, Ivy
International Fund, Ivy International Fund II (expected
effective date of May 13, 1997), Ivy International Bond Fund, Ivy
International Small Companies Fund, Ivy Latin America
Strategy Fund, Ivy New Century Fund, Ivy Pan-Europe
Fund (expected effective date of May 13, 1997),
Mackenzie California Municipal Fund, Mackenzie National
Municipal Fund and Mackenzie New York Municipal Fund
("Table 1 Funds"):

CONTINGENT DEFERRED
SALES CHARGE AS A
PERCENTAGE OF DOLLAR
AMOUNT SUBJECT TO YEAR SINCE PURCHASE
CHARGE

First 5%
Second 4%
Third 3%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh and thereafter 0%

The following CDSC table ("Table 2") applies to
Class B shares of Mackenzie Limited Term Municipal Fund
("Table 2 Funds"):

CONTINGENT DEFERRED
SALES CHARGE AS A
PERCENTAGE OF DOLLAR
AMOUNT SUBJECT TO YEAR SINCE PURCHASE
CHARGE

First 3%
Second 2.5%
Third 2%
Fourth 1.5%
Fifth 1%
Sixth and thereafter 0%

The CDSC schedule for Table 1 Funds is higher (and
the period is longer) than the CDSC schedule (and
period) for Table 2 Funds.

Fund ("new Class B shares") after having held the
outstanding Class B shares for two years. The 2.5%
CDSC that generally would apply to a redemption of
outstanding Class B shares held for two years would not
be deducted at the time of the exchange. If, three
years later, the investor redeems the new Class B shares, a
2% CDSC will be assessed upon the redemption because by
"tacking" the two year holding period of the
outstanding Class B shares onto the three year holding
period of the new Class B shares, the investor will be
deemed to have held the new Class B shares for five
years.

CLASS C: Class C shareholders may exchange their
Class C shares ("outstanding Class C shares") for Class
C shares of another Ivy or Mackenzie Fund ("new Class C
shares") on the basis of the relative net asset value
per Class C share, without the payment of any CDSC that
would otherwise be due upon redemption. (Class C
shares are subject to a CDSC of 1% if redeemed within
one year of the date of purchase.)

CLASS I: Class I shareholders may exchange their
Class I shares for Class I shares of another Ivy Fund
on the basis of the relative net asset value per Class
I share.

circumstances, shareholders will be ineligible to take
sales charges into account in computing taxable gain or
loss on an exchange. See "Taxation."

LETTER OF INTENT

Reduced sales charges apply to initial investments
in Class A shares of each Fund made pursuant to a non-
binding Letter of Intent. A Letter of Intent may be
submitted by an individual, his or her spouse and
children under the age of 21, or a trustee or other
fiduciary of a single trust estate or single fiduciary
account. See the Account Application in the Prospectus. Any
investor may submit a Letter of Intent stating that he or
she will invest, over a period of 13 months, at least
$50,000 in Class A shares of a Fund. A Letter of
Intent may be submitted at the time of an initial
purchase of Class A shares of a Fund or within 90 days
of the initial purchase, in which case the Letter of
Intent will be back dated. A shareholder may include, as an
accumulation credit, the value (at the applicable offering
price) of all Class A shares of Ivy Asia Pacific Fund,
Ivy China Region Fund, Ivy Canada Fund, Ivy Latin
America Strategy Fund, Ivy International Fund, Ivy
International Fund II (expected effective date of May
13, 1997), Ivy Pan-Europe Fund (expected effective date
of May 13, 1997), Ivy Global Fund, Ivy Global Natural
Resources Fund, Ivy Global Science & Technology Fund, Ivy Growth
Fund, Ivy Growth with Income Fund, Ivy Emerging Growth
Fund, Ivy International Bond Fund, Ivy International
Small Companies Fund, Ivy New Century Fund, Ivy Bond
Fund, Mackenzie National Municipal Fund, Mackenzie
Limited Term Municipal Fund, Mackenzie California
Municipal Fund and Mackenzie New York Municipal Fund (and shares
that have been exchanged into Ivy Money Market Fund from
any of the other funds in the Ivy Mackenzie Funds) held
of record by him or her as of the date of his or her
Letter of Intent. During the term of the Letter of
Intent, the Transfer Agent will hold Class A shares
representing 5% of the indicated amount (less any
accumulation credit value) in escrow. The escrowed Class A
shares will be released when the full indicated amount has
been purchased. If the full indicated amount is not
purchased during the term of the Letter of Intent, the
investor is required to pay IMDI an amount equal to the
difference between the dollar amount of sales charge
that he or she has paid and that which he or she would
have paid on his or her aggregate purchases if the total of
such purchases had been made at a single time. Such payment
will be made by an automatic liquidation of Class A
shares in the escrow account. A Letter of Intent does
not obligate the investor to buy or the Trust to sell
the indicated amount of Class A shares, and the
investor should read carefully all the provisions of
such letter before signing.

RETIREMENT PLANS

The following fees will be charged to individual
shareholder accounts as described in the retirement
prototype plan document:

Retirement Plan New Account Fee no fee
Retirement Plan Annual Maintenance Fee $10.00 per
account

For shareholders whose retirement accounts are
diversified across several funds of the Ivy Mackenzie
Funds, the annual maintenance fee will be limited to
not more than $20.

per year, the maximum potential contribution is $4,000
per year for both. For years after 1996, the result is
similar even if one spouse has no earned income; if the
joint earned income of the spouses is at least $4,000,
a contribution of up to $2,000 may be made to each
spouse's IRA. For years before 1997, however, if one
spouse has (or elects to be treated as having) no
earned income for IRA purposes for a year, the working spouse may
contribute up to the lesser of $2,250 or 100% of his or
her compensation or earned income for the year to IRAs
for both spouses, provided that no more than $2,000 is
contributed to the IRA of one spouse. Rollover
contributions are not subject to these limits.

An individual may deduct his or her annual
contributions to an IRA in computing his or her Federal
income tax within the limits described above, provided
he or she (or his or her spouse, if they file a joint
Federal income tax return) is not an active participant
in a qualified retirement plan (such as a qualified
corporate, sole proprietorship, or partnership pension, profit
sharing, 401(k) or stock bonus plan), qualified annuity
plan, 403(b) plan, simplified employee pension, or
governmental plan. If he or she (or his or her spouse)
is an active participant, a full deduction is only
available if he or she has adjusted gross income that
is less than a specified level ($40,000 for married
couples filing a joint return, $25,000 for single individuals,
and $0 for a married individual filing a separate return).
The deduction is phased out ratably for active
participants with adjusted gross income between certain
levels ($40,000 and $50,000 for married individuals
filing a joint return, $25,000 and $35,000 for single
individuals, and $0 and $10,000 for married individuals
filing separate returns). Individuals who are active
participants with income above the specified phase-out level may
not deduct their IRA contributions. Rollover
contributions are not includible in income for Federal
income tax purposes and therefore are not deductible
from it.

year in which the individual reaches age 70-1/2.
Failure to take certain minimum required distributions
will result in the imposition of a 50% non-deductible
penalty tax. Extremely large distributions in any one
year (other than 1997, 1998 or 1999) from an IRA (or
from an IRA and other retirement plans) may also result
in a penalty tax.

In general, if a self-employed individual has any
common law employees, employees who have met certain
minimum age and service requirements must be covered by
the Retirement Plan. A self- employed individual
generally must contribute the same percentage of income
for common law employees as for himself or herself.

Corporate employers may also adopt the Custodial
Agreement and Retirement Plan for the benefit of their
eligible employees. Similar contribution and deduction
rules apply to corporate employers.

(5) takes the withdrawal as part of a series of
substantially equal payments over his or her life
expectancy or the joint life expectancy of himself or
herself and a designated beneficiary; or (6) rolls over
the distribution.

The Transfer Agent will arrange for Investors Bank
& Trust to furnish custodial services to the employer
and any participating employees.

DEFERRED COMPENSATION FOR PUBLIC SCHOOLS AND
CHARITABLE ORGANIZATIONS ("403(B)(7) ACCOUNT"):
Section 403(b)(7) of the Internal Revenue Code of 1986,
as amended (the "Code"), permits public school systems
and certain charitable organizations to use mutual fund
shares held in a custodial account to fund deferred
compensation arrangements with their employees. A custodial
account agreement is available for those employers whose
employees wish to purchase shares of the Trust in conjunction
with such an arrangement. The sales charge for
purchases of less than $10,000 of Class A shares is set
forth under "Retirement Plans" in the Prospectus.
Sales charges for purchases of $10,000 or more of Class
A shares are the same as those set forth under "Initial
Sales Charge Alternative -- Class A Shares" in the
Prospectus. The special application for a 403(b)(7) Account is
available from IMSC.

equal to 2% of each employee's compensation without
regard to the amount the employee contributes. An
employer cannot maintain a SIMPLE Plan for its
employees if any contributions or benefits are credited
to those employees under any other qualified retirement
plan maintained by the employer.

REINVESTMENT PRIVILEGE

Any redemption is a taxable event. A loss
realized on a redemption generally may be disallowed
for tax purposes if the reinvestment privilege is
exercised within 30 days after the redemption. In
certain circumstances, shareholders will be ineligible
to take sales charges into account in computing taxable
gain or loss on a redemption if the reinvestment
privilege is exercised. See "Taxation."

RIGHTS OF ACCUMULATION

A scale of reduced sales charges applies to any
investment of $50,000 or more in Class A shares of a
Fund. See "Initial Sales Charge Alternative -- Class A
Shares" in the Prospectus. The reduced sales charge is
applicable to investments made at one time by an
individual, his or her spouse and children under the
age of 21, or a trustee or other fiduciary of a single trust
estate or single fiduciary account (including a pension,
profit sharing or other employee benefit trust created
pursuant to a plan qualified under Section 401 of the
Code). It is also applicable to current purchases of
all of the funds in the Ivy Mackenzie Funds (except Ivy
Money Market Fund) by any of the persons enumerated
above, where the aggregate quantity of Class A shares
of Ivy Asia Pacific Fund, Ivy Bond Fund, Ivy Canada Fund,
Ivy China Region Fund, Ivy Emerging Growth Fund, Ivy Global
Fund, Ivy Global Natural Resources Fund, Ivy Global
Science & Technology Fund, Ivy Growth Fund, Ivy Growth
with Income Fund, Ivy International Fund, Ivy
International Bond Fund, Ivy International Small
Companies Fund, Ivy Latin America Strategy Fund, Ivy
New Century Fund, Ivy International Fund II (expected
effective date of May 13, 1997), Ivy Pan-Europe Fund (expected
effective date of May 13, 1997), Mackenzie National
Municipal Fund, Mackenzie California Municipal Fund
Mackenzie New York Municipal Fund and Mackenzie Limited
Term Municipal Fund (and shares that have been
exchanged into Ivy Money Market Fund from any of the
other funds in the Ivy Mackenzie Funds) and of any
other investment company distributed by IMDI, previously

purchased or acquired and currently owned, determined
at the higher of current offering price or amount
invested, plus the Class A shares being purchased,
amounts to $50,000 or more for Ivy Asia Pacific Fund,
Ivy Canada Fund, Ivy China Region Fund, Ivy Emerging
Growth Fund, Ivy Global Fund, Ivy Global Natural
Resources Fund, Ivy Global Science & Technology Fund, Ivy Growth
Fund, Ivy Growth with Income Fund, Ivy International
Fund, Ivy International Small Companies Fund, Ivy Latin
America Strategy Fund, Ivy New Century Fund, Ivy
International Fund II (expected effective date of May
13, 1997), Ivy Pan-Europe Fund (expected effective date
of May 13, 1997); $100,000 or more for Ivy Bond Fund,
Ivy International Bond Fund, Mackenzie National Municipal
Fund, Mackenzie California Municipal Fund and Mackenzie New York
Municipal Fund; or $25,000 or more for Mackenzie Limited
Term Municipal Fund.

SYSTEMATIC WITHDRAWAL PLAN

A redemption under a Withdrawal Plan is a taxable
event. Shareholders contemplating participating in a
Withdrawal Plan should consult their tax advisers.

GROUP SYSTEMATIC INVESTMENT PROGRAM

Shares may be purchased in connection with
investment programs established by employee or other
groups using systematic payroll deductions or other
systematic payment arrangements. The Trust does not
itself organize, offer or administer any such programs.
However, it may, depending upon the size of the
program, waive the minimum initial and additional investment
requirements for purchases by individuals in conjunction with
programs organized and offered by others. Unless shares
of a Fund are purchased in conjunction with IRAs (see
"How to Buy Shares" in the Prospectus), such group
systematic investment programs are not entitled to
special tax benefits under the Code. The Trust
reserves the right to refuse purchases at any time or
suspend the offering of shares in connection with group
systematic investment programs, and to restrict the offering of
shareholder privileges, such as check writing, simplified
redemptions and other optional privileges, as described
in the Prospectus, to shareholders using group
systematic investment programs.

With respect to each shareholder account
established on or after September 15, 1972 under a
group systematic investment program, the Trust and IMI
each currently charge a maintenance fee of $3.00 (or
portion thereof) that for each twelve-month period (or
portion thereof) that the account is maintained. The
Trust may collect such fee (and any fees due to IMI) through a
deduction from distributions to the shareholders involved
or by causing on the date the fee is assessed a
redemption in each such shareholder account sufficient
to pay such fee. The Trust reserves the right to
change these fees from time to time without advance
notice.

Class A shares of a Fund are made available to
Merrill Lynch Daily K Plan (the "Plan") participants at
NAV without an initial sales charge if:

(iii) the Plan has 500 or more eligible employees,
as determined by Merrill Lynch plan conversion
manager, on the date the Plan Sponsor signs the
Merrill Lynch Recordkeeping Service Agreement.

BROKERAGE ALLOCATION

Subject to the overall supervision of the
President and the Board, IMI (or MFC with respect to
Ivy Canada Fund and Ivy Global Natural Resources Fund)
places orders for the purchase and sale of each Fund's
portfolio securities. With respect to Ivy
International Fund, Northern Cross also places orders for the
purchase and sale of the Fund's portfolio securities. All
portfolio transactions are effected at the best price and
execution obtainable. Purchases and sales of debt
securities are usually principal transactions, and,
therefore, brokerage commissions are usually not
required to be paid by the particular Fund for such
purchases and sales (although the price paid generally
includes undisclosed compensation to the dealer). The
prices paid to underwriters of newly-issued securities usually
include a concession paid by the issuer to the underwriter,
and purchases of after-market securities from dealers
normally reflect the spread between the bid and asked
prices. In connection with OTC transactions, IMI (or
MFC for Ivy Canada Fund and Ivy Global Natural
Resources Fund and the Subadviser for Ivy International
Fund) attempts to deal directly with the principal
market makers, except in those circumstances where IMI (or MFC
for Ivy Canada Fund and Ivy Global Natural Resources Fund
and the Subadviser for Ivy International Fund) believes
that a better price and execution are available
elsewhere.

IMI (or MFC for Ivy Canada Fund and Ivy Global
Natural Resources Fund and the Subadviser for Ivy
International Fund) selects broker-dealers to execute
transactions and evaluates the reasonableness of
commissions on the basis of quality, quantity, and the
nature of the firms' professional services. Commissions
to be charged and the rendering of investment services, including
statistical, research, and counseling services by
brokerage firms, are factors to be considered in the
placing of brokerage business. The types of research
services provided by brokers may include general
economic and industry data, and information on
securities of specific companies. Research services furnished by

brokers through whom the Trust effects securities
transactions may be used by IMI (or MFC for Ivy Canada
Fund and Ivy Global Natural Resources Fund and the
Subadviser for Ivy International Fund) in servicing all
of its accounts. In addition, not all of these
services may be used by IMI (or MFC for Ivy Canada Fund and
Ivy Global Natural Resources Fund and the Subadviser for Ivy
International Fund) in connection with the services it
provides to a particular Fund or the Trust. IMI (or
MFC for Ivy Canada Fund and Ivy Global Natural
Resources Fund and the Subadviser for Ivy International
Fund) may consider sales of shares of a Fund as a
factor in the selection of broker-dealers and may select
broker-dealers who provide it with research services. IMI (or
MFC for Ivy Canada Fund and Ivy Global Natural Resources
Fund and the Subadviser for Ivy International Fund)
will not, however, execute brokerage transactions other
than at the best price and execution.

With respect to Ivy International Fund, when a
security proposed to be purchased or sold for the Fund
is also to be purchased or sold at the same time for
other accounts managed by the Subadviser, purchases or
sales are effected on a pro rata, rotating or other
equitable basis so as to avoid any one account being
preferred over any other account.

During the fiscal year ended June 30, 1994, during
the six- month period ended December 31, 1994 and during
the fiscal years ended December 31, 1995 and 1996, Ivy
Canada Fund paid brokerage commissions of $202,849,
$98,390, $79,464 and $102,121, respectively.

During the fiscal years ended December 31, 1994,
1995 and 1996, Ivy China Region Fund paid brokerage
commissions of $26,579, $70,459 and $62,812,
respectively.

During the fiscal year ended June 30, 1994, during
the six- month period ended December 31, 1994, and
during the fiscal years ended December 31, 1995 and
1996, Ivy Global Fund paid brokerage commissions of
$58,828, $43,367, $96,124 and $90,904,
respectively.

During the fiscal year ended December 31, 1994,
1995 and 1996, Ivy International Fund paid brokerage
commissions of $139,426, $715,524 and $1,709,643,
respectively.

During the period from November 1, 1994
(commencement of operations) to December 31, 1994, Ivy
Latin America Strategy Fund and Ivy New Century Fund
each paid brokerage commissions of $5,491 and $2,611,
respectively. During the fiscal year ended December
31, 1995, Ivy Latin America Strategy Fund and Ivy New
Century Fund each paid brokerage commissions of $17,184 and
$15,236, respectively. During the fiscal year ended December
31, 1996, Ivy Latin America Strategy Fund and Ivy New
Century Fund each paid brokerage commissions of $15,756
and $95,606, respectively.

During the period from July 22, 1996 (commencement
of operations to December 31, 1996) Ivy Global Science
& Technology Fund paid brokerage commissions of
$37,065. Brokerage commission information is not
available for Ivy Asia Pacific Fund, Ivy Global Natural
Resources Fund and Ivy International Small Companies
Fund, which did not commence operations until January
1, 1997.

Each Fund may, under some circumstances, accept
securities in lieu of cash as payment for Fund shares.
Each of these Funds will accept securities only to
increase its holdings in a portfolio security or to
take a new portfolio position in a security that IMI
(and the Subadviser for Ivy International Fund) deems
to be a desirable investment for each the Fund. While no
minimum has been established, it is expected that each the Fund
will not accept securities having an aggregate value of
less than $1 million. The Trust may reject in whole or
in part any or all offers to pay for the Fund shares
with securities and may discontinue accepting
securities as payment for the Fund shares at any time
without notice. The Trust will value accepted
securities in the manner and at the same time provided for
valuing portfolio securities of each the Fund, and the Fund
shares will be sold for net asset value determined at the
same time the accepted securities are valued. The
Trust will only accept securities delivered in proper
form and will not accept securities subject to legal
restrictions on transfer. The acceptance of securities
by the Trust must comply with the applicable laws of
certain states.

TRUSTEES AND OFFICERS

The Trustees and Executive Officers of the Trust,
their business addresses and principal occupations
during the past five years are:

POSITION
WITH THE BUSINESS
AFFILIATIONS NAME, ADDRESS, AGE TRUST AND
PRINCIPAL OCCUPATIONS

Joseph G. Rosenthal Trustee Chartered
Accountant 110 Jardin Drive (1958-
present); Trustee of Unit #12
Mackenzie Series Trust Concord, Ontario Canada
(1985-present); Director of

L4K 2T7 The Mackenzie
Funds Inc. Age: 62
(1987-1995).

James W. Broadfoot Vice Executive Vice
President,

PERSONAL INVESTMENTS BY EMPLOYEES OF IMI

COMPENSATION TABLE
IVY FUND
(FISCAL YEAR ENDED DECEMBER 31, 1996)

John S. $7,419 N/A N/A
$10,000 Anderegg, Jr.
(Trustee)

Paul H. $7,419 N/A N/A
$10,000 Broyhill
(Trustee)

Keith J. $0 N/A N/A
$0 Carlson[**]
(Trustee and
President)

Stanley $4,949 N/A N/A
$10,000 Channick[*]
(Trustee)

Frank W. $7,419 N/A N/A
$10,000 DeFriece, Jr.
(Trustee)

Roy J. $7,419 N/A N/A
$10,000 Glauber[*]
(Trustee)

Michael G. $0 N/A N/A
$0 Landry
(Trustee and
Chairman of
the Board)

Joseph G. $7,419 N/A N/A
$10,000 Rosenthal
(Trustee)

Richard N. $10,000 N/A N/A
$10,000 Silverman
(Trustee)

J. Brendan $7,419 N/A N/A
$10,000 Swan
(Trustee)

C. William $0 N/A N/A
$0 Ferris
(Secretary/Treasurer)

[*] Appointed as a Trustee of the Trust at a meeting
of the Board held on February 10, 1996.

[**] Appointed as a Trustee of the Trust at a meeting
of the Board held on December 7, 1996.

As of April 3, 1997, the Officers and Trustees of
the Trust as a group owned beneficially less than 1% of
the outstanding Class A, Class B, Class C and Class I
shares of the Funds, except that as of such date, the
Officers and Trustees of the Trust as a group owned
beneficially 2.26% of Ivy Global Fund Class A shares
and 1.79% of Ivy Global Natural Resources Fund Class A
shares.

INVESTMENT ADVISORY AND OTHER SERVICES

BUSINESS MANAGEMENT AND INVESTMENT ADVISORY SERVICES

IMI provides business management and investment
advisory services to each Fund (other than Ivy Canada
Fund and Ivy Global Natural Resources Fund) pursuant to
a Business Management and Investment Advisory Agreement
(the "Agreement"). IMI provides business management
services to Ivy Canada Fund and Ivy Global Natural
Resources Fund pursuant to a Business Management
Agreement (the "Management Agreement"). The Agreement (or the
Management Agreement, in the case of Ivy Canada Fund and
Ivy Global Natural Resources Fund) was approved (i) by
the sole shareholder of Ivy China Region Fund on
October 23, 1993, (ii) by the shareholders of Ivy
International Fund on December 30, 1991, (iii) by the
sole shareholder of each of Ivy Latin America Strategy
Fund and Ivy New Century Fund on October 28, 1994, (iv)
by the sole shareholder of each of Ivy Global Fund and Ivy Canada
Fund on January 27, 1995, (v) by the sole shareholder of
Ivy Global Science & Technology Fund on July 16, 1996,
and (vi) by the sole shareholder of each of Ivy Asia
Pacific Fund, Ivy Global Natural Resources Fund and Ivy
International Small Companies Fund on December 13,
1996. Prior to shareholder approval, the Agreement (or
the Management Agreement, in the case of Ivy Canada
Fund and Ivy Global Natural Resources Fund) was approved by the
Board (including a majority of the Trustees who are
neither "interested persons," as defined in the 1940
Act, of the Trust nor have any direct or indirect
financial interest in the operation of the distribution
plan or in any related agreement (the "Independent
Trustees")) (i) on August 23, 1993 with respect to Ivy
China Region Fund, (ii) on October 28, 1991 with respect
to Ivy International Fund, (iii) on September 17, 1994 with
respect to Ivy Latin America Strategy Fund and Ivy New Century
Fund, (iv) on September 29, 1994 with respect to each of
Ivy Canada Fund and Ivy Global Natural Resources Fund,
(v) on June 8, 1996 with respect to Ivy Global Science
& Technology Fund, and (vi) on December 7, 1996 with
respect to each of Ivy Asia Pacific Fund, Ivy Global
Natural Resources Fund and Ivy International Small
Companies Fund.

Until January 31, 1995 MIMI served as the manager
and investment adviser to Ivy Global Fund and as
manager to Ivy Canada Fund, which were then series of
The Mackenzie Funds Inc. (the "Company"). On January
31, 1995, MIMI's interest in the Agreement (in the case
of Ivy Global Fund) and in the Management Agreement (in
the case of Ivy Canada Fund) was assigned by MIMI to
IMI, which is a wholly owned subsidiary of MIMI. The
provisions of the Agreement and the Management Agreement remain
unchanged by IMI's succession to MIMI thereunder. MIMI, a
Delaware corporation, has approximately 10% of its
outstanding common stock listed for trading on the TSE.
MIMI is a subsidiary of MFC, 150 Bloor Street West,
Toronto, Ontario, Canada, a public corporation
organized under the laws of Ontario and registered in
Ontario as a mutual fund dealer whose shares are listed for

trading on the TSE. MFC provides investment advisory
services to Ivy Canada Fund and Ivy Global Natural
Resources Fund pursuant to an Investment Advisory
Agreement (the "MFC Agreement"). The MFC Agreement was
approved (i) by the sole shareholder of Ivy Canada Fund
on January 27, 1995 and (ii) by the sole shareholder of Ivy
Global Natural Resources Fund on December 13, 1996. Prior to
shareholder approval, the MFC Agreement was approved by
the Board (including a majority of Independent
Trustees) (i) on September 29, 1994 with respect to Ivy
Canada Fund and (ii) on December 7, 1996 with respect
to Ivy Global Natural Resources Fund.

IMI currently acts as manager and investment
adviser to the following additional investment
companies registered under the 1940 Act: Ivy Growth
Fund, Ivy Emerging Growth Fund, Ivy Growth with Income
Fund, Ivy Bond Fund, Ivy International Bond Fund, Ivy
International Fund II (expected effective date of May 13, 1997),
Ivy Pan-Europe Fund (expected effective date of May 13,
1997) and Ivy Money Market Fund.

The Agreement obligates IMI to make investments
for the accounts of each Fund (except Ivy Canada Fund
and Ivy Global Natural Resources Fund) in accordance
with its best judgment and within the investment
objectives and restrictions set forth in the
Prospectus, the 1940 Act and the provisions of the Code
relating to regulated investment companies, subject to policy
decisions adopted by the Board. IMI also determines the
securities to be purchased or sold by these Funds and places
orders with brokers or dealers who deal in such
securities. The Advisory Agreement obligates MFC to
make investments for the account of each of Ivy Canada
Fund and Ivy Global Natural Resources Fund, in
accordance with its best judgment and within the
investment objectives and restrictions set forth in the
Prospectus with respect to each of Ivy Canada Fund and Ivy Global
Natural Resources Fund, the 1940 Act and the provisions
of the Code, relating to regulated investment
companies, subject to policy decisions adopted by the
Board. MFC also determines the securities to be
purchased or sold by each of Ivy Canada Fund and Ivy
Global Natural Resources Fund and places orders with brokers
or dealers who deal in such securities.

Under the Agreement (the Management Agreement with
respect to Ivy Canada Fund and Ivy Global Natural
Resources Fund), IMI also provides certain business
management services. IMI is obligated to (1)
coordinate with each Fund's Custodian and monitor the
services it provides to that Fund; (2) coordinate with
and monitor any other third parties furnishing services to
each Fund; (3) provide each Fund with necessary office space,
telephones and other communications facilities as are
adequate for the particular Fund's needs; (4) provide
the services of individuals competent to perform
administrative and clerical functions that are not
performed by employees or other agents engaged by the
particular Fund or by IMI acting in some other capacity
pursuant to a separate agreement or arrangements with
the Fund; (5) maintain or supervise the maintenance by third

parties of such books and records of the Trust as may
be required by applicable Federal or state law; (6)
authorize and permit IMI's directors, officers and
employees who may be elected or appointed as trustees
or officers of the Trust to serve in such capacities;
and (7) take such other action with respect to the
Trust, after approval by the Trust as may be required by
applicable law, including without limitation the rules and
regulations of the SEC and of state securities commissions and
other regulatory agencies. Pursuant to the Management
Agreement, IMI is also responsible for reviewing the
activities of MFC to insure that each of Ivy Canada
Fund and Ivy Global Natural Resources Fund is operated
in compliance with each such Fund's investment
objectives and policies and with the 1940 Act.

Ivy Global Fund pays IMI a monthly fee for
providing business management and investment advisory
services at an annual rate of 1.00% of the first $500
million of its average net assets, reduced to 0.75% on
average net assets over $500 million. Each of the
other Funds (except Ivy Canada Fund and Ivy Global
Natural Resources Fund) pays IMI a monthly fee for providing
business management and investment advisory serves at an
annual rate of 1.00% of each of the Fund's average net
assets. Ivy Canada Fund and Ivy Global Natural
Resources Fund each pays IMI a monthly fee for
providing business management services at an annual
rate of 0.50% of each such Fund's average net assets.

For advisory services, Ivy Canada Fund and Ivy
Global Natural Resources Fund each pays MFC a monthly
fee at an annual rate of 0.35% and 0.50%, respectively,
of the average net assets of each such Fund. For the
fiscal year ended June 30, 1994, for the six-month
period ended December 31, 1994 and for the fiscal years
ended December 31, 1995 and 1996, Ivy Canada Fund paid MFC
fees of $120,495, $54,763, $67,229 and $65,289, respectively.

During the fiscal years ended December 31, 1994,
1995 and 1996, Ivy China Region Fund paid IMI $193,875,
$200,605 and $233,804 respectively (of which IMI
reimbursed $1,036, $0 and $0, respectively, pursuant to
required expense limitations and of which IMI
reimbursed $106,631, $106,085 and $65,675,
respectively, pursuant to voluntary expense limitations).

During the fiscal year ended June 30, 1994 and
during the six-month period ended December 31, 1994,
MIMI, as investment manager to Ivy Canada Fund and as
investment adviser to Ivy Global Fund, when each was a
series of the Company, received fees of $172,136 and
$78,234, respectively, from Ivy Canada Fund and
$155,540 and $107,966, respectively, (of which MIMI reimbursed
$34,779 and $15,264, respectively, pursuant to voluntary
expense limitations) from Ivy Global Fund. During the
fiscal years ended December 31, 1995 and 1996, IMI
received fees of $96,041 and $93,270, respectively,
from Ivy Canada Fund (of which IMI reimbursed $63,466
and $0, respectively, pursuant to required expense
limitations) and $239,963 and $301,433, respectively,

from Ivy Global Fund (of which IMI reimbursed $62,242
and $0 pursuant to voluntary expense limitations).

For the fiscal years ended December 31, 1994, 1995
and 1996, Ivy International Fund paid IMI fees of
$2,217,950, $3,948,456 and $9,157,858,
respectively.

During the period from November 1, 1994
(commencement of operations) to December 31, 1994 and
during the fiscal years ended December 31, 1995 and
1996, Ivy Latin America Strategy Fund paid IMI fees of
$1,006, $95,380 and $42,550, respectively (of which IMI
reimbursed $13,333, $93,340 and $0, respectively,
pursuant to required expense limitations and of which IMI
reimbursed $523 and $2,040 and $99,630, respectively, pursuant
to voluntary expense limitations) and Ivy New Century
Fund paid IMI fees of $912, $91,226 and $109,125,
respectively (of which IMI reimbursed $16,415, $87,348
and $0, respectively, pursuant to required expense
limitations and of which IMI reimbursed $512, $3,878
and $67,600, respectively, pursuant to voluntary expense
limitations).

During the period from July 22, 1996
(commencement of operations) to December 31, 1996, Ivy
Global Science & Technology Fund paid IMI fees of
$20,965 (of which IMI reimbursed $14,813 pursuant to
voluntary expense limitations).

Advisory fee information is not yet available
for Ivy Asia Pacific Fund, Ivy Global Natural Resources
Fund and Ivy International Small Companies Fund, which
commenced operations on January 1, 1997.

Under the Agreement (or the Management Agreement
and the Advisory Agreement with respect to Ivy Canada
Fund and Ivy Global Natural Resources Fund), the Trust
pays the following expenses: (1) the fees and expenses
of the Trust's Independent Trustees; (2) the salaries
and expenses of any of the Trust's officers or
employees who are not affiliated with IMI; (3) interest expenses;
(4) taxes and governmental fees, including any original
issue taxes or transfer taxes applicable to the sale or
delivery of shares or certificates therefor; (5)
brokerage commissions and other expenses incurred in
acquiring or disposing of portfolio securities; (6) the
expenses of registering and qualifying shares for sale
with the SEC and with various state securities
commissions; (7) accounting and legal costs; (8) insurance
premiums; (9) fees and expenses of the Trust's Custodian and
Transfer Agent and any related services; (10) expenses of
obtaining quotations of portfolio securities and of
pricing shares; (11) expenses of maintaining the
Trust's legal existence and of shareholders' meetings;
(12) expenses of preparation and distribution to
existing shareholders of periodic reports, proxy
materials and prospectuses; and (13) fees and expenses of
membership in industry organizations.

IMI currently limits each Fund's (with the
exception of Ivy

Canada Fund and Ivy International Fund) total operating
expenses (excluding Rule 12b-1 fees, interest, taxes,
brokerage commissions, litigation and indemnification
expenses, and other extraordinary expenses) to an
annual rate of 1.95% of the Fund's average net assets,
which may lower that Fund's expenses and increase its
yield. Each Fund's expense limitation may be
terminated or revised at any time, at which time its expenses may
increase and its yield may be reduced.

On August 23-24, 1996, the Board (including a
majority of the Independent Trustees) (i) approved the
continuance of the Agreement with respect to Ivy China
Region Fund, Ivy Global Fund, Ivy International Fund,
Ivy Latin America Strategy Fund and Ivy New Century
Fund and (ii) approved the continuance of the
Management Agreement for Ivy Canada Fund. The initial term of
the Agreement (or the Management Agreement with respect to
Ivy Global Natural Resources Fund) between IMI and each
of Ivy Asia Pacific Fund, Ivy Global Natural Resources
Fund and Ivy International Small Companies Fund, which
commenced on January 1, 1997, will run for a period of
two years from the date of commencement. Each
Agreement (or Management Agreement, with respect to Ivy
Canada Fund and Ivy Global Natural Resources Fund) will
continue in effect with respect to each Fund from year to
year, or for more than the initial period, as the case may be,
only so long as the continuance is specifically approved
at least annually (i) by the vote of a majority of the
Independent Trustees and (ii) either (a) by the vote of
a majority of the outstanding voting securities (as
defined in the 1940 Act) of the particular Fund or (b)
by the vote of a majority of the entire Board. If the
question of continuance of the Agreements (or adoption
of any new agreement) is presented to shareholders,
continuance (or adoption) shall be effected only if approved by
the affirmative vote of a majority of the outstanding
voting securities of the particular Fund. See
"Capitalization and Voting Rights."

Each Agreement (or Management Agreement with
respect to Ivy Canada Fund and Ivy Global Natural
Resources Fund) may be terminated with respect to a
particular Fund at any time, without payment of any
penalty, by the vote of a majority of the Board, or by
a vote of a majority of the outstanding voting securities
of that Fund, on 60 days' written notice to IMI, or by IMI on 60
days' written notice to the Trust. The Agreement shall
terminate automatically in the event of its assignment.

SUBADVISORY CONTRACT - IVY INTERNATIONAL FUND.
The Trust and IMI, on behalf of Ivy International Fund,
have entered into a subadvisory contract with an
independent investment adviser (the "Subadvisory
Contract") under which the subadviser develops,
recommends and implements an investment program and strategy for
the Fund's portfolio and is responsible for making all
portfolio security and brokerage decisions, subject to
the supervision of IMI and, ultimately, the Board.
Fees payable under the Subadvisory Contract accrue
daily and are paid quarterly by IMI.

Effective April 1, 1993, Northern Cross serves as
subadviser for Ivy International Fund's portfolio
pursuant to the Subadvisory Contract. As compensation
for its services, Northern Cross is paid a fee by IMI
at the annual rate of 0.60% of Ivy International Fund's
average net assets. As compensation for advisory
services rendered for the fiscal years ended December
31, 1994, 1995 and 1996, IMI paid Northern Cross
$1,330,770, $2,369,074 and $5,494,715, respectively. Northern
Cross, wholly-owned and operated by Hakan Castegren, is the
successor to the investment advisory functions of Boston
Overseas Investors, Inc. ("BOI"), which also was
wholly-owned and operated by Hakan Castegren. Boston
Investor Services, Inc., the successor to the
administrative and research functions of BOI, provides
administrative and research services to Northern
Cross.

Any amendment to the current Subadvisory Contract
requires approval by votes of (a) a majority of the
outstanding voting securities of Ivy International Fund
affected thereby and (b) a majority of the Trustees who
are not interested persons of the Trust or of any other
party to such Contract. The Subadvisory Contract
terminates automatically in the event of its assignment
(as defined in the 1940 Act) or upon termination of the
Agreement. Also, the Subadvisory Contract may be terminated by
not more than 60 days' nor less than 30 days' written
notice by either the Trust or IMI or upon not less than
120 days' notice by the Subadviser. The Subadvisory
Contract provides that IMI or the Subadviser shall not
be liable to the Trust, to any shareholder of the
Trust, or to any other person, except for loss
resulting from willful misfeasance, bad faith, gross negligence
or reckless disregard of duty.

The Subadvisory Contract will continue in effect
(subject to provisions for earlier termination as
described above) only if such continuance is approved
at least annually (a) by a majority of the Trustees who
are not interested persons of the Trust or of any other
party to the Contract and (b) by either (i) a majority
of all of the Trustees of the Trust or (ii) a vote of a majority
of the outstanding voting securities of any Fund affected
thereby. On September 17, 1994, the Board, including a
majority of the Independent Trustees, last approved the
continuance of the Subadvisory Contract.

DISTRIBUTION SERVICES

Funds on a continuous basis, but reserves the right to
suspend or discontinue distribution on that basis.
IMDI is not obligated to sell any specific amount of
Fund shares.

Pursuant to the Distribution Agreement, IMDI is
entitled to deduct a commission on all Class A Fund
shares sold equal to the difference, if any, between
the public offering price, as set forth in the Funds'
then-current prospectus, and the net asset value on
which such price is based. Out of that commission, IMDI
may reallow to dealers such concession as IMDI may determine from
time to time. In addition, IMDI is entitled to deduct a
CDSC on the redemption of Class A shares sold without
an initial sales charge and Class B and Class C shares
in accordance with, and in the manner set forth in, the
Prospectus.

During the three months ended September 30, 1993,
MIMI, which at that time was Ivy Canada Fund's
distributor, received from sales of Class A [FN][Shares
of Ivy Canada Fund outstanding as of March 31, 1994
were designated Class A shares of the Fund.] shares of
Ivy Canada Fund $332,241, in sales commissions, of
which $52,414 was retained after dealers' reallowances. During
the nine months ended June 30, 1994, the six-month period
ended December 31, 1994 and the fiscal years ended
December 31, 1995 and 1996, IMDI received from sales of
Class A shares of Ivy Canada Fund $386,239,
$44,748,$45,959 and $85,131, respectively, in sales
commissions, of which $62,036, $7,074, $7,824 and
$12,272, respectively, was retained after dealers' reallowances.
During the period April 1, 1994 (commencement of sales
of Class B shares) to June 30, 1994, the six-month
period ended December 31, 1994 and the fiscal years
ended December 31, 1995 and 1996, IMDI received $0,
$574, $2,387 and $6,288, respectively, in CDSCs on
redemptions of Class B shares of the Fund. During the period
April 30, 1996 (commencement of sales of Class C shares) to
December 31, 1996, IMDI received $295 in CDSCs on
redemptions of Class C shares of the Fund.

During the fiscal years ended December 31, 1994,
1995 and 1996, IMDI received from sales of Class A
shares of Ivy China Region Fund $328,530, $132,337 and
$82,202, respectively, in sales commissions, of which
$52,347, $9,919 and $11,936, respectively, was retained
after dealers' reallowances. During the fiscal years
ended December 31, 1994, 1995 and 1996, IMDI received
$17,290, $48,686 and $46,514, respectively, in CDSCs on
redemptions of Class B shares of the Fund. During the period
April 30, 1996 (commencement of sales of Class C shares) to
December 31, 1996, IMDI received $46 in CDSCs on
redemptions of Class C shares of the Fund.

During the three month period ended September 30,
1993, MIMI, which at that time was Ivy Global Fund's
distributor, received from sales of Class A [FN][Shares
of Ivy Global Fund outstanding as of March 31, 1994
were designated Class A shares of the Fund.] shares of
Ivy Global Fund $57,279 in sales commissions, of which
$8,869 was retained after dealers' reallowances.
During the nine months ended June 30, 1994, the six-
month period ended December 31, 1994 and the fiscal years
ended December 31, 1995 and 1996, IMDI received from sales of
Class A shares of Ivy Global Fund $166,539, $96,349,
$150,828 and $130,266, respectively, in sales
commissions, of which $25,240, $16,508, $23,153 and
$23,164 respectively, was retained after dealers'
reallowances. During the period April 1, 1994
(commencement of sales of Class B shares) to December 31, 1994
and during the fiscal years ended December 31, 1995 and
1996, IMDI received $0, $2,833 and $9,991,
respectively, in CDSCs on redemptions of Class B shares
of the Fund. During the period April 30, 1996
(commencement of sales of Class C shares) to December
31, 1996, IMDI received no CDSCs on redemptions of Class
C shares of the Fund.

During the period July 22, 1996 (commencement of
operations) to December 31, 1996, IMDI received from
sales of Class A shares of Ivy Global Science &
Technology Fund $122,226 in sales commissions, of which
$16,160, was retained after dealers' reallowances.
During the period July 22, 1996 (commencement of
operations) to December 31, 1996, IMDI received $338 in CDSCs on
redemptions of Class B shares of the Fund. During the
period July 22, 1996 (commencement of operations) to
December 31, 1996, IMDI received no CDSCs on
redemptions of Class C shares of the Fund.

During the fiscal years ended December 31, 1994,
1995 and 1996, IMDI received from sales of Class A
shares of Ivy International Fund $788,610,,$931,967 and
$2,940,701, respectively, in sales commissions, of
which $124,786, $144,220 and $394,697, respectively,
was retained after dealers' re- allowances. During the
fiscal years ended December 31, 1994, 1995 and 1996,
IMDI received $23,381, $102,532 and $192,262
respectively, in CDSCs paid upon certain redemptions of Class B
shares of Ivy International Fund. During the period April
30, 1996 (commencement of sales of Class C shares) to
December 31, 1996, IMDI received $943 in CDSCs on
redemptions of Class C shares of the Fund.

Strategy Fund. During the fiscal years ended December
31, 1995 and 1996, IMDI received $447 and $1,116,
respectively in CDSCs on redemptions of Class B shares
of the Fund. During the period April 30, 1996
(commencement of sales of Class C shares) to December
31, 1996, IMDI received no CDSCs on redemptions of Class
C shares of the Fund.

During the period from November 1, 1994
(commencement of operations) to December 31, 1994 and
during the fiscal years ended December 31, 1995 and
1996, IMDI received from sales of Class A shares of Ivy
New Century Fund $5,766, $96,634 and $195,128,
respectively, in sales commissions, of which $865,
$14,419 and $28,765, respectively, was retained after dealer re-
allowances. During the period from November 1, 1994
(commencement of operations) to December 31, 1994, IMDI
received no CDSCs on redemptions of Class B Shares of
Ivy New Century Fund. During the fiscal years ended
December 31, 1995 and 1996, IMDI received $813 and
$4,486, respectively, in CDSCs on redemptions of Class
B shares of the Fund. During the period April 30, 1996
(commencement of sales of Class C shares) to December
31, 1996, IMDI received no CDSCs on redemptions of Class
C shares of the Fund.

As of December 31, 1996, none of Ivy Asia
Pacific Fund, Ivy Global Natural Resources Fund, or Ivy
International Small Companies Fund had commenced
operations.

Each Distribution Agreement will continue in
effect for successive one-year periods, provided that
such continuance is specifically approved at least
annually by the vote of a majority of the Independent
Trustees, cast in person at a meeting called for that
purpose and by the vote of either a majority of the
entire Board or a majority of the outstanding voting securities
of each Fund. Each Distribution Agreement may be
terminated with respect to a particular Fund at any
time, without payment of any penalty, by IMDI on 60
days' written notice to the particular Fund or by a
Fund by vote of either a majority of the outstanding
voting securities of the Fund or a majority of the Independent
Trustees on 60 days' written notice to IMDI. Each
Distribution Agreement shall terminate automatically in
the event of its assignment.

rights, preferences, powers, restrictions, limitations,
qualifications, terms and conditions, except that each
class bears certain class-specific expenses and has
separate voting rights on certain matters that relate
solely to that class or in which the interests of
shareholders of one class differ from the interests of
shareholders of another class; (ii) subject to certain
limitations described in the Prospectus, shares of a
particular class of a Fund may be exchanged for shares of the
same class of another Ivy or Mackenzie fund; and (iii) a
Fund's Class B shares will convert automatically into
Class A shares of that Fund after a period of eight
years, based on the relative net asset value of such
shares at the time of conversion.

RULE 12B-1 DISTRIBUTION PLANS. The Trust has
adopted on behalf of each Fund, in accordance with Rule
12b-1 under the 1940 Act, separate Rule 12b-1
distribution plans pertaining to the Funds' Class A,
Class B and Class C shares (each, a "Plan"). In
adopting each Plan, a majority of the Independent Trustees
concluded in accordance with the requirements of Rule 12b-1
that there is a reasonable likelihood that each Plan
will benefit each Fund and its shareholders. The
Trustees of the Trust believe that the Plans should
result in greater sales and/or fewer redemptions of
each Fund's shares, although it is impossible to know
for certain the level of sales and redemptions of a Fund's
shares in the absence of a Plan or under an alternative
distribution arrangement.

Under each Plan, each Fund pays IMDI a service
fee, accrued daily and paid monthly, at the annual rate
of up to 0.25% of the average daily net assets
attributable to its Class A, Class B or Class C shares,
as the case may be. The services for which service
fees may be paid include, among other things, advising
clients or customers regarding the purchase, sale or retention of
shares of the Fund, answering routine inquiries
concerning the Fund and assisting shareholders in
changing options or enrolling in specific plans.
Pursuant to each Plan, service fee payments made out of
or charged against the assets attributable to a Fund's
Class A, Class B or Class C shares must be in
reimbursement for services rendered for or on behalf of the
affected class. The expenses not reimbursed in any one month
may be reimbursed in a subsequent month. The Class A
Plan (other than the Class A Plan for Ivy Canada Fund)
does not provide for the payment of interest or
carrying charges as distribution expenses.

Under the Funds' Class B and Class C Plans, each
Fund also pays IMDI a distribution fee, accrued daily
and paid monthly, at the annual rate of 0.75% of the
average daily net assets attributable to its Class B or
Class C shares. Ivy Canada Fund also pays IMDI a
distribution fee, accrued daily and paid monthly, at
the annual rate of 0.15% of the average daily assets
attributable to its Class A shares. IMDI may reallow to dealers
all or a portion of the service and distribution fees as
IMDI may determine from time to time. The distribution
fee compensates

IMDI for expenses incurred in connection with
activities primarily intended to result in the sale of
the Funds' Class B or Class C shares (and Class A
shares, in the case of Ivy Canada Fund), including the
printing of prospectuses and reports for persons other
than existing shareholders and the preparation,
printing and distribution of sales literature and advertising
materials. Pursuant to each Class B and Class C Plan (and
Ivy Canada Fund's Class A Plan), IMDI may include
interest, carrying or other finance charges in its
calculation of distribution expenses, if not prohibited
from doing so pursuant to an order of or a regulation
adopted by the SEC.

IMDI may make payments for distribution assistance
and for administrative and accounting services from
resources that may include the management fees paid (to
MIMI, in the case of Ivy Canada Fund and Ivy Global
Natural Resources Fund) by a Fund. IMDI also may make
payments (such as the service fee payments described
above) to unaffiliated broker-dealers for services
rendered in the distribution of each Fund's shares. To qualify
for such payments, shares may be subject to a minimum
holding period. However, no such payments will be made
to any dealer or broker if at the end of each year the
amount of shares held does not exceed a minimum amount.
The minimum holding period and minimum level of
holdings will be determined from time to time by IMDI.

A report of the amount expended pursuant to each
Plan, and the purposes for which such expenditures were
incurred, must be made to the Board for its review at
least quarterly.

During the period from October 1, 1993 to June 30,
1994, during the six-month period ended December 31,
1994 and during the fiscal years ended December 31,
1995 and 1996, Ivy Canada Fund paid IMDI $92,079,
$61,133, $73,233 and $68,732, respectively, pursuant to
its Class A plan. During the period from April 1, 1994
(the date on which Class B shares of Ivy Canada Fund
were first offered to the public) to June 30, 1994,

during the six-month period ended December 31, 1994 and
during the fiscal years ended December 31, 1995 and
1996, Ivy Canada Fund paid IMDI $312, $2,953, $8,964
and $13,674, respectively, pursuant to its Class B
plan. During the period April 30, 1996 (the date on
which Class C shares of Ivy Canada Fund were first
offered to the public) to December 31, 1996, Ivy Canada Fund paid
IMDI $990 pursuant to its Class C plan.

During the fiscal years ended December 31, 1994,
1995 and 1996, Ivy China Region Fund paid IMDI $31,640,
$32,647 and $37,038, respectively, pursuant to its
Class A Plan. During the fiscal years ended December
31, 1994, 1995 and 1996, Ivy China Region Fund paid
IMDI $67,315, $70,020 and $84,812, respectively,
pursuant to its Class B Plan. During the period April 30, 1996
(the date on which Class C shares of Ivy China Region Fund
were first offered to the public) to December 31, 1996,
Ivy China Region Fund paid IMDI $781 pursuant to its
Class C plan.

During the period from October 1, 1993 to June 30,
1994, during the six-month period ended December 31,
1994 and during the fiscal years ended December 31,
1995 and 1996, Ivy Global Fund paid IMDI $30,665,
$24,936, $50,833 and $59,251, respectively, pursuant to
its Class A plan. During the period from April 1, 1994
(the date on which Class B shares of Ivy Global Fund
were first offered to the public) to June 30, 1994,
during the six-month period ended December 31, 1994 and during
the fiscal years ended December 31, 1995 and 1996, the Fund
paid IMDI $434, $8,224, $36,632 and $64,463,
respectively, pursuant to its Class B plan. During the
period April 30, 1996 (the date on which Class C shares
of Ivy Global Fund were first offered to the public) to
December 31, 1996, Ivy Global Fund paid IMDI $37
pursuant to its Class C plan.

During the period July 22, 1996 (commencement of
operations) to December 31, 1996, Ivy Global Science &
Technology Fund paid IMDI $3,592 pursuant to its Class
A Plan, $4,377 pursuant to its Class B plan, and $2,217
pursuant to its Class C plan.

For the fiscal years ended December 31, 1994, 1995
and 1996, Ivy International Fund paid IMDI $168,356,
$281,215 and $1,671,153, respectively, pursuant to its
Class A Plan. For the fiscal years ended December 31,
1994, 1995 and 1996, Ivy International Fund paid IMDI
$175,505, $474,670 and $1,724,796, respectively,
pursuant to its Class B Plan. During the period April
30, 1996 (the date on which Class C shares of Ivy
International Fund were first offered to the public) to December
31, 1996, Ivy International Fund paid IMDI $100,898
pursuant to its Class C plan.

(commencement of operations) to December 31, 1994 and
during the fiscal years ended December 31, 1995 and
1996, Ivy Latin America Strategy Fund paid IMDI $157
and $3,855, respectively, pursuant to its Class B plan.
During the period April 30, 1996 (the date on which
Class C shares of Ivy Latin America Strategy Fund were
first offered to the public) to December 31, 1996, Ivy Latin
America Strategy Fund paid IMDI $317 pursuant to its Class C
plan.

During the period from November 1, 1994
(commencement of operations) to December 31, 1994 and
during the fiscal years ended December 31, 1995, Ivy
New Century Fund paid IMDI $196, $3,888 and 17,525,
respectively, pursuant to its Class A plan. During the
period from November 1, 1994 (commencement of
operations) to December 31, 1994 and during the fiscal years
ended December 31, 1995 and 1996, the Fund paid IMDI $124,
$4,160, $35,654, respectively, pursuant to its Class B
plan. During the period April 30, 1996 (the date on
which Class C shares of Ivy New Century Fund were first
offered to the public) to December 31, 1996, Ivy New
Century Fund paid IMDI $3,360 pursuant to its Class C
plan.

No payments were made with respect to Ivy
Asia Pacific Fund, Ivy Global Natural Resources Fund
and Ivy International Small Companies Fund, which
commenced operations on January 1, 1997.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
A shares of Ivy Canada Fund: advertising, $3,002;
printing and mailing of prospectuses to persons other
than current shareholders, $12,796; compensation to
dealers, $11,279; compensation to sales
personnel,$25,922; seminars and meetings, $2,820; travel and
entertainment, $4,435; general and administrative, $16,899;
telephone, $710; and occupancy and equipment rental,
$1,528.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
B shares of Ivy Canada Fund: advertising, $239;
printing and mailing of prospectuses to persons other
than current shareholders, $1,018; compensation to
dealers, $898; compensation to sales personnel,$2,063;
seminars and meetings, $224; travel and entertainment,
$353; general and administrative, $1,345; telephone,
$57; and occupancy and equipment rental, $122.

During the period April 30, 1996 (the date on
which Class C shares of were first offered to the
public) to December 31, 1996, IMDI expended the
following amounts in marketing Class C shares of Ivy
Canada Fund: advertising, $17; printing and mailing of
prospectuses to persons other than current shareholders, $74;
compensation to dealers, $65; compensation to sales
personnel,$149; seminars and meetings, $16; travel and
entertainment, $26; general and administrative, $97; telephone,
$4; and occupancy and equipment rental, $9.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
A shares of Ivy China Region Fund: advertising,
$2,653; printing and mailing of prospectuses to persons
other than current shareholders, $11,969; compensation
to dealers, $26,581; compensation to sales
personnel,$22,741; seminars and meetings, $6,646; travel and
entertainment, $3,914; general and administrative, $14,244;
telephone, $627; and occupancy and equipment rental,
$1,356.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
B shares of Ivy China Region Fund: advertising,
$1,519; printing and mailing of prospectuses to persons
other than current shareholders, $6,852; compensation
to dealers, $15,217; compensation to sales
personnel,$13,019; seminars and meetings, $3,804; travel and
entertainment, $2,241; general and administrative, $8,154;
telephone, $359; and occupancy and equipment rental,
$776.

During the period April 30, 1996 (the date on
which Class C shares of were first offered to the
public) to December 31, 1996, IMDI expended the
following amounts in marketing Class C shares of Ivy
China Region Fund: advertising, $14; printing and mailing
of prospectuses to persons other than current shareholders,
$63; compensation to dealers, $140; compensation to
sales personnel,$120; seminars and meetings, $35;
travel and entertainment, $21; general and
administrative, $75; telephone, $3; and occupancy and
equipment rental, $7.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
A shares of Ivy Global Fund: advertising, $4,231;
printing and mailing of prospectuses to persons other
than current shareholders, $10,745; compensation to
dealers, $30,549; compensation to sales
personnel,$36,279; seminars and meetings, $7,638; travel and
entertainment, $6,239; general and administrative, $22,386;
telephone, $1,001; and occupancy and equipment rental,
$2,170.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
B shares of Ivy Global Fund: advertising, $1,149;
printing and mailing of prospectuses to persons other
than current shareholders, $2,918; compensation to
dealers, $8,297; compensation to sales
personnel,$9,853; seminars and meetings, $2,074; travel and
entertainment, $1,694; general and administrative, $6,080;
telephone, $272; and occupancy and equipment rental,
$589.

During the period April 30, 1996 (the date on
which Class C shares of were first offered to the
public) to December 31, 1996, IMDI expended the
following amounts in marketing Class C shares of Ivy
Global Fund: advertising, $1; printing and mailing of
prospectuses to persons other than current shareholders, $2;
compensation to dealers, $5; compensation to sales personnel,
$6; seminars and meetings, $1; travel and
entertainment, $1; general

and administrative, $3; telephone, $0; and occupancy
and equipment rental, $0.

During the period from July 22, 1996 (commencement
of operations) to December 31, 1996, IMDI expended the
following amounts in marketing Class A shares of Ivy
Global Science & Technology Fund: advertising, $481;
printing and mailing of prospectuses to persons other
than current shareholders, $12,700; compensation to
dealers, $11,029; compensation to sales
personnel,$4,107; seminars and meetings, $2,757; travel and
entertainment, $703; general and administrative, $1,881;
telephone, $116; and occupancy and equipment rental, $256.

During the period from July 22, 1996 (commencement
of operations) to December 31, 1996, IMDI expended the
following amounts in marketing Class B shares of Ivy
Global Science & Technology Fund: advertising, $146;
printing and mailing of prospectuses to persons other
than current shareholders, $3,868; compensation to
dealers, $3,359; compensation to sales
personnel,$1,251; seminars and meetings, $840; travel and
entertainment, $214; general and administrative, $573;
telephone, $35; and occupancy and equipment rental,
$78.

During the period from July 22, 1996 (commencement
of operations) to December 31, 1996, IMDI expended the
following amounts in marketing Class C shares of Ivy
Global Science & Technology Fund: advertising, $74;
printing and mailing of prospectuses to persons other
than current shareholders, $1,959; compensation to
dealers, $1,701; compensation to sales personnel, $634;
seminars and meetings, $425; travel and entertainment,
$108; general and administrative, $290; telephone, $18; and
occupancy and equipment rental, $40.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
A shares of Ivy International Fund: advertising,
$132,425; printing and mailing of prospectuses to
persons other than current shareholders, $230,570;
compensation to dealers, $1,161,172; compensation to
sales personnel,$1,119,795; seminars and meetings, $290,293;
travel and entertainment, $194,635; general and
administrative, $631,201; telephone, $31,343; and
occupancy and equipment rental, $68,648.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
B shares of Ivy International Fund: advertising,
$34,146; printing and mailing of prospectuses to
persons other than current shareholders, $59,452;
compensation to dealers, $299,405; compensation to sales
personnel, $288,736; seminars and meetings, $74,851; travel and
entertainment, $50,186; general and administrative,
$162,754; telephone, $8,082; and occupancy and
equipment rental, $17,701.

During the period April 30, 1996 (the date on
which Class C

shares of were first offered to the public) to December
31, 1996, IMDI expended the following amounts in
marketing Class C shares of Ivy International Fund:
advertising, $1,197; printing and mailing of
prospectuses to persons other than current
shareholders, $3,477; compensation to dealers, $17,513;
compensation to sales personnel,$16,889; seminars and meetings,
$4,378; travel and entertainment, $2,936; general and
administrative, $9,520; telephone, $473; and occupancy and
equipment rental, $1,035.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
A shares of Ivy Latin America Strategy Fund:
advertising, $528; printing and mailing of prospectuses
to persons other than current shareholders, $10,104;
compensation to dealers, $5,681; compensation to sales
personnel,$4,461; seminars and meetings, $1,420; travel
and entertainment, $776; general and administrative,
$2,475; telephone, $125; and occupancy and equipment
rental, $275.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
B shares of Ivy Latin America Strategy Fund:
advertising, $241; printing and mailing of prospectuses
to persons other than current shareholders, $4,609;
compensation to dealers, $2,592; compensation to sales
personnel,$2,035; seminars and meetings, $648; travel
and entertainment, $354; general and administrative,
$1,129; telephone, $57; and occupancy and equipment rental,
$125.

During the period April 30, 1996 (the date on
which Class C shares of were first offered to the
public) to December 31, 1996, IMDI expended the
following amounts in marketing Class C shares of Ivy
Latin America Strategy Fund: advertising, $6; printing
and mailing of prospectuses to persons other than current
shareholders, $110; compensation to dealers, $62; compensation
to sales personnel,$49; seminars and meetings, $16;
travel and entertainment, $8; general and
administrative, $27; telephone, $1 and occupancy and
equipment rental, $3.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
A shares of Ivy New Century Fund: advertising, $1,327;
printing and mailing of prospectuses to persons other
than current shareholders, $11,049; compensation to
dealers, $20,447; compensation to sales
personnel,$11,040; seminars and meetings, $5,111; travel and
entertainment, $1,946; general and administrative, $5,839;
telephone, $312; and occupancy and equipment rental,
$691.

During the fiscal year ended December 31, 1996,
IMDI expended the following amounts in marketing Class
B shares of Ivy New Century Fund: advertising, $675;
printing and mailing of prospectuses to persons other
than current shareholders, $5,620; compensation to
dealers, $10,400; compensation to sales

personnel, $5,615; seminars and meetings, $2,600;
travel and entertainment, $990; general and
administrative, $2,970; telephone, $159; and occupancy
and equipment rental, $352.

During the period April 30, 1996 (the date on
which Class C shares of were first offered to the
public) to December 31, 1996, IMDI expended the
following amounts in marketing Class C shares of Ivy
New Century Fund: advertising, $64; printing and mailing
of prospectuses to persons other than current shareholders,
$530; compensation to dealers, $980; compensation to
sales personnel,$529; seminars and meetings, $245;
travel and entertainment, $93; general and
administrative, $280; telephone, $15; and occupancy and
equipment rental, $33.

No payments were made with respect to Ivy
Asia Pacific Fund, Ivy Global Natural Resources Fund
and Ivy International Small Companies Fund, which
commenced operations on January 1, 1997.

If the Distribution Agreement or the Distribution
Plans are terminated (or not renewed) with respect to
any of the Ivy Mackenzie Funds (or class of shares
thereof), each may continue in effect with respect to
any other fund (or Class of shares thereof) as to which
they have not been terminated (or have been renewed).

CUSTODIAN

Pursuant to a Custodian Agreement with the Trust,
Brown Brothers Harriman & Co. (the "Custodian"), a
private bank and member of the principal securities
exchanges, located at 40 Water Street, Boston,
Massachusetts 02109, maintains custody of the assets of
each Fund held in the United States. Under the
Custodian Agreement, Brown Brothers also provides certain
financial services for Ivy International Fund, including
bookkeeping, computation of daily net asset value, maintenance
of income, expense and brokerage records, and provision
of all information required by the Trust in order to
satisfy its reporting and filing requirements. Rules
adopted under the 1940 Act permit the Trust to maintain
its foreign securities (Canadian securities, with
respect to Ivy Canada Fund and Ivy Global Natural
Resources Fund) and cash in the custody of certain
eligible foreign banks and securities depositories (and certain

eligible Canadian banks and securities depositories,
with respect to Ivy Canada Fund and Ivy Global Natural
Resources Fund). Pursuant to those rules, Brown
Brothers has entered into subcustodial agreements for
the holding of each Fund's foreign securities (and for
the holding of Ivy Canada Fund's and Ivy Global Natural
Resources Fund's non-Canadian foreign securities).
Similarly, pursuant to those rules, Ivy Canada Fund's and Ivy
Global Natural Resources Fund's portfolio securities and
cash, when invested in Canadian securities, will be
held by its Sub- custodian, The Bank of Nova Scotia.
With respect to each Fund, except for Ivy Canada Fund
and Ivy Global Natural Resources Fund, Brown Brothers
may receive, as partial payment for its services, a
portion of the Trust's brokerage business, subject to its
ability to provide best price and execution.

FUND ACCOUNTING SERVICES

Pursuant to a Fund Accounting Services Agreement,
MIMI provides certain accounting and pricing services
for the Funds. As compensation for those services,
each Fund pays MIMI a monthly fee plus out-of-pocket
expenses as incurred. The monthly fee is based upon
the net assets of a Fund at the preceding month end at
the following rates: $1,250 when net assets are $10 million and
under; $2,500 when net assets are over $10 million to $40
million; $5,000 when net assets are over $40 million to
$75 million; and $6,500 when net assets are over $75
million.

For the fiscal year ended June 30, 1994, for the
six-month period ended December 31, 1994 and for the
fiscal years ended December 31, 1995 and 1996, Ivy
Canada Fund paid MIMI $32,492, $16,442, $32,399 and
33,091, respectively, under the agreement. During the
fiscal years ended December 31, 1994, 1995 and 1996,
Ivy China Region Fund paid MIMI $32,137, $32,653 and $35,038,
respectively, under the agreement. For the fiscal year
ended June 30, 1994, for the six-month period ended
December 31, 1994 and for the fiscal years ended
December 31, 1995 and 1996, Ivy Global Fund paid MIMI
$31,448, $15,957, $32,982 and 34,802, respectively,
under the agreement. During the period from July 22,
1996 (commencement of operations) to December 31, 1996, Ivy
Global Science & Technology Fund paid MIMI $9,171 under the
agreement. The payments to MIMI from Ivy International
Fund amounted to $48,788 for the nine months ended
December 31, 1994. Prior to April 1, 1994, the Fund
utilized an unrelated entity for fund accounting and
pricing services. Such fees and expenses for the
fiscal year ended December 31, 1994 totalled $88,790. For
the fiscal years ended December 31, 1995 and 1996, Ivy
International Fund paid MIMI $91,612 and $173,986, respectively,
under the agreement. During the period from November 1,
1994 (commencement of operations) to December 31, 1994
and during the fiscal years ended December 31, 1995 and
1996, Ivy Latin America Strategy Fund paid MIMI $2,505,
$15,094 and $16,731, respectively, under the agreement.
During the period from November 1, 1994 (commencement
of operations) to December 31, 1994 and during the
fiscal years ended December 31, 1995 and

1996, Ivy New Century Fund paid MIMI $2,505, $15,112
and $25,951, respectively, under the agreement.

No payments were made by Ivy Asia Pacific
Fund, Ivy Global Natural Resources Fund and Ivy
International Small Companies Fund, which commenced
operations on January 1, 1997.

TRANSFER AGENT AND DIVIDEND PAYING AGENT

Pursuant to a Transfer Agency and Shareholder
Service Agreement, IMSC, a wholly owned subsidiary of
MIMI, is the transfer agent for each Fund. Each Fund
(except for the Class I Funds with respect to their
Class I shares) pays a monthly fee at an annual rate of
$20.00 for each open Class A, Class B and Class C
account. The Class I Funds pay $10.25 per open Class I
account. In addition, each Fund pays a monthly fee at an annual
rate of $4.48 per account that is closed plus certain
out-of- pocket expenses. Such fees and expenses for the
fiscal year ended December 31, 1996 for Ivy Canada
Fund, Ivy China Region Fund, Ivy Global Fund, Ivy
International Fund, Ivy Latin America Strategy Fund and
Ivy New Century Fund totalled $100,986, $105,576,
$68,182, $1,264,586, $14,143 and $25,994, respectively.
Such fees and expenses for the period from July 22, 1996
(commencement of operations) to December 31, 1996 for Ivy Global
Science & Technology Fund totalled $2,446. No payments
were made by Ivy Asia Pacific Fund, Ivy Global Natural
Resources Fund and Ivy International Small Companies
Fund, which commenced operations on January 1, 1997.
Certain broker-dealers that maintain shareholder
accounts with a Fund through an omnibus account provide
transfer agent and other shareholder-related services
that would otherwise be provided by IMSC if the
individual accounts that comprise the omnibus account were opened
by their beneficial owners directly. IMSC pays such broker-
dealers a per account fee for each open account within
the omnibus account, or a fixed rate (e.g., .10%) fee,
based on the average daily net asset value of the
omnibus account (or a combination thereof).

ADMINISTRATOR

Pursuant to an Administrative Services Agreement,
MIMI provides certain administrative services to each
Fund. As compensation for these services, each Fund
(except for the Class I Funds with respect to their
Class I shares) pays MIMI a monthly fee at the annual
rate of .10% of that Fund's average daily net assets.
The Class I Funds pay MIMI a monthly fee at the annual
rate of .01% of its average daily net assets for Class I. Such
fees for the fiscal year ended December 31, 1996 for Ivy
Canada Fund, Ivy China Region Fund, Ivy Global Fund,
Ivy International Fund, Ivy Latin America Strategy Fund
and Ivy New Century Fund totalled $18,654, $23,381,
$30,143, $885,033, $4,255 and $10,912, respectively.
Such fees for the period from July 22, 1996
(commencement of operations) to December 31, 1996 for Ivy Global

Science & Technology Fund totalled $2,096. As of
December 31, 1996, none of Ivy Asia Pacific Fund, Ivy
Global Natural Resources Fund or Ivy International
Small Companies Fund had commenced operations.

AUDITORS

CAPITALIZATION AND VOTING RIGHTS

Ivy Canada Fund results from a reorganization of
Mackenzie Canada Fund, a series of the Company, which
reorganization was approved by shareholders on January
27, 1995. Ivy Global Fund results from a
reorganization of Mackenzie Global Fund, which
reorganization was approved by shareholders on January 27, 1995.
The capitalization of the Trust consists of an unlimited
number of shares of beneficial interest (no par value
per share). When issued, shares of each class of each
Fund are fully paid, non- assessable, redeemable and
fully transferable. No class of shares of a Fund has
preemptive rights or subscription rights.

Mackenzie Growth & Income Fund, a former series of the
Company, in connection with the reorganization between
that fund and Ivy Growth with Income Fund and not
offered for sale to the public. On February 29, 1996,
the Trustees of the Trust resolved by written consent
to establish a new class of shares designated as "Class
C" for all Ivy Fund portfolios and to redesignate the
shares of beneficial interest of "Ivy Growth with Income Fund--
Class C" as shares of beneficial interest of "Ivy Growth
with Income Fund--Class D," which establishment and
redesignation, respectively, became effective on April
30, 1996. The voting, dividend, liquidation and other
rights, preferences, powers, restrictions, limitations,
qualifications, terms and conditions of the Class D
shares of Ivy Growth with Income Fund, as set forth in
Ivy Fund's Declaration of Trust, as amended from time to
time, will not be changed by this redesignation.]

Shareholders have the right to vote for the
election of Trustees of the Trust and on any and all
matters on which they may be entitled to vote by law or
by the provisions of the Trust's By-Laws. The Trust is
not required to hold a regular annual meeting of
shareholders, and it does not intend to do so. Shares
of each class of each Fund entitle their holders to one
vote per share (with proportionate voting for fractional shares).
Shareholders of a Fund are entitled to vote alone on
matters that only affect that Fund. All classes of
shares of a Fund will vote together, except with
respect to the distribution plan applicable to that
Fund's Class A, Class B or Class C shares or when a class
vote is required by the 1940 Act. On matters relating to all
funds of the Trust, but affecting the funds differently,
separate votes by the shareholders of each fund are
required. Approval of an investment advisory agreement
and a change in fundamental policies would be regarded
as matters requiring separate voting by the
shareholders of each fund of the Trust. If the Trustees
determine that a matter does not affect the interests of a Fund,
then the shareholders of that Fund will not be entitled
to vote on that matter. Matters that affect the Trust
in general, such as ratification of the selection of
independent public accountants, will be voted upon
collectively by the shareholders of all funds of the
Trust.

voting securities of any other fund of the Trust; or
(2) the matter has not been approved by a majority of
the outstanding voting securities of the Trust.

To the knowledge of the Trust, as of March
31, 1997, no shareholder owned beneficially or of
record 5% or more of any Fund's outstanding Class A
shares, except that: of the outstanding Class A shares
of Ivy Asia Pacific Fund, Mackenzie Investment
Management Inc., 700 S. Federal Hwy., Suite 300, Boca
Raton, FL 33432, owned of record 12,933.551 shares (52.83%); of
the outstanding Class A shares of Ivy Canada Fund, Merrill
Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive East,
3rd Floor, Jacksonville, Florida 32246, owned of record
103,141.000 shares (6.77%); of the outstanding Class A
shares of Ivy Global Natural Resources Fund, Donaldson
Lufkin Jenrette Securities Corporation Inc., P.O. Box
2052, Jersey City, New Jersey 07303, owned of record
18,535.681 shares (6.19%); of the outstanding Class A
shares of Ivy Global Science & Technology Fund, Donaldson Lufkin
Jenrette Securities Corporation Inc., P.O. Box 2052,
Jersey City, New Jersey 07303, owned of record
148,724.187 shares (22.93%); of the outstanding Class A
shares of Ivy International Fund, Charles Schwab & Co.,
Inc., 101 Montgomery Street, San Francisco, California
94104, owned of record 3,474,088.243 shares (38.44%);
of the outstanding Class A shares of Ivy International Small
Companies Fund, Mackenzie Investment Management Inc., 700 S.
Federal Hwy., Suite 300, Boca Raton, FL 33432, owned of
record 10,001.000 shares (17.17%), and Donaldson Lufkin
Jenrette Securities Corporation Inc., P.O. Box 2052,
Jersey City, New Jersey 07303, owned of record
7,387.154 shares (12.68%); of the outstanding Class A
shares of Ivy Latin America Strategy Fund, Donaldson
Lufkin Jenrette Securities Corporation Inc., P.O. Box
2052, Jersey City, New Jersey 07303, owned of record 87,948.203
shares (16.46%), and Merrill Lynch Pierce Fenner & Smith,
4800 Deer Lake Drive East, 3rd Floor, Jacksonville,
Florida 32246, owned of record 57,108.000 shares
(10.68%); and of the outstanding Class A shares of Ivy
New Century Fund, Charles Schwab & Co., Inc., 101
Montgomery Street, San Francisco,

California 94104, owned of record 67,473.320 shares
(6.77%).

To the knowledge of the Trust, as of March 31,
1997, no shareholder owned beneficially or of record 5%
or more of any Fund's outstanding Class B shares,
except that: of the outstanding Class B shares of the
Ivy Asia Pacific Fund, Edward M. and Gayla M. Kern
TTEES, 2290 Montagne Drive, Florissant, MO 63033, owned
of record 3,803.298 shares (36.57%), Merrill Lynch
Pierce Fenner & Smith, 4800 Deer Lake Drive East, 3rd Floor,
Jacksonville, Florida 32246, owned of record 3,168.000 shares
(30.46%), Roger T. Retan, 5769 Cheese Factory Road,
Manlius, NY 13104, owned of record 1,017.294 shares
(9.78%), Sandra Warren, Rte 1 Box 60, Barry, TX 75102,
owned of record 677.688 shares (6.51%), and Frank W.
Dunn, Custodian FBO Peyton Dunn UGMA/TX, PO Box 2128,
Corsicana, TX 75151, owned of record 566.644 shares
(5.44%); of the outstanding Class B shares of Ivy Canada Fund,
Merrill Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive
East, 3rd Floor, Jacksonville, Florida 32246, owned of
record 37,608.000 shares (15.24%), and JW Charles
Clearing Corp, FBO Joseph Zerger IRA, 1550 E. Oakland
Park Blvd., Fort Lauderdale, FL 33334, owned of record
14,588.638 shares (5.91%); and that of the outstanding
Class B shares of the Ivy China Region Fund, Merrill
Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive East,
3rd Floor, Jacksonville, Florida 32246, owned of record
80,831.000 shares (8.94%); and that of the outstanding Class B
shares of the Ivy Global Fund, Merrill Lynch Pierce Fenner
& Smith, 4800 Deer Lake Drive East, 3rd Floor,
Jacksonville, Florida 32246, owned of record 51,767.000
shares (6.38%); and that of the outstanding Class B
shares of the Ivy Global Natural Resources Fund,
Merrill Lynch Pierce Fenner & Smith, 4800 Deer Lake
Drive East, 3rd Floor, Jacksonville, Florida 32246, owned of
record 87,841.000 shares (57.08%); of the outstanding Class B
shares of the Ivy International Fund, Merrill Lynch
Pierce Fenner & Smith, 4800 Deer Lake Drive East, 3rd
Floor, Jacksonville, Florida 32246, owned of record
5,620,810.586 shares (44.90%); of the outstanding Class
B shares of the Ivy International Small Companies Fund,
Merrill Lynch Pierce Fenner & Smith, 4800 Deer Lake
Drive East, 3rd Floor, Jacksonville, Florida 32246, owned of
record 8,703.000 shares (20.51%), Painewebber FBO Mary
Broderick c/o Donald Broderick POA, 159 North Beacon
Street, Hartford, CT 06105, owned of record 2,920.192
shares (6.88%), and Donaldson Lufkin Jenrette
Securities Corporation Inc., P.O. Box 2052, Jersey
City, New Jersey 07303, owned of record 2,453.386 shares
(5.78%); of the outstanding Class B shares of Ivy Latin America
Strategy Fund, Merrill Lynch Pierce Fenner & Smith, 4800
Deer Lake Drive East, 3rd Floor, Jacksonville, Florida
32246, owned of record 115,069.000 shares (33.71%), and
Donaldson Lufkin Jenrette Securities Corporation Inc.,
P.O. Box 2052, Jersey City, New Jersey 07303, owned of
record 24,270.747 shares (7.11%); and of the
outstanding Class B shares of Ivy New Century Fund, Merrill
Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive East, 3rd
Floor, Jacksonville, Florida 32246, owned of record
272,465.000 shares (28.47%).

To the knowledge of the Trust, as of March 31,
1997, no shareholder owned beneficially or of record 5%
or more of any Fund's outstanding Class C shares,
except that: of the outstanding Class C shares of the
Ivy Asia Pacific Fund, The Ohio Company FBO Mansbach G,
155 East Broad Street, Columbus, KY 41105, owned of
record 24,390.244 shares (94.90%); of the outstanding
Class C shares of Ivy Canada Fund, Francisco Rodriguez
Carrreras & Louis Rodriguez Aguilar JT TEN c/o Zarlene
Imports, 1550 Oakland Park Blvd., Fort Lauderdale, FL 33334-4425,
owned of record 18,435.870 shares (30.88%), Francisco
Rodriguez Carrreras & Fuensanta Rosario Rodriguez
Aguilar JT TEN c/o Zarlene Imports, 1550 Oakland Park
Blvd., Fort Lauderdale, FL 33334-4425, owned of record
12,295.850 shares (20.59%), Merrill Lynch Pierce Fenner
& Smith, 4800 Deer Lake Drive East, 3rd Floor,
Jacksonville, Florida 32246, owned of record 11,569.000
shares (19.38%), and JW Charles Clearing Corp, FBO Giancarlo
Dimizio IRA, 4900 N. Ocean Blvd. #1107, Fort Lauderdale, FL
33308, owned of record 3,737.544 shares (6.26%); and that
of the outstanding Class C shares of the Ivy China
Region Fund, The Ohio Company FBO Gerald Mansbach c/o
Mansbach Metal, 155 E. Broad Street, Columbus, OH
43215, owned of record 26,790.606 shares (35.12%), and
Merrill Lynch Pierce Fenner & Smith, 4800 Deer Lake
Drive East, 3rd Floor, Jacksonville, Florida 32246, owned of
record 13,227.000 shares (17.34%); and that of the
outstanding Class C shares of the Ivy Global Fund, The
Ohio Company FBO Gerald Mansbach c/o Mansbach Metal,
155 E. Broad Street, Columbus, OH 43215, owned of
record 19,409.938 shares (36.08%), Merrill Lynch
Pierce Fenner & Smith, 4800 Deer Lake Drive East, 3rd
Floor, Jacksonville, Florida 32246, owned of record 8,047.000
shares (14.96%), Painewebber FBO Regina J. Nolan, 1021 St.
Gregory Street, Cincinnati, OH 45202, owned of record
4,629.630 shares (8.60%), Linda Powers Kunze TOD John
Kunze, 10214 Old Orchard, Brecksville, OH 44141, owned
of record 3,742.515 shares (6.95%), Painewebber FBO
Clementine Primeaux, 6346 Bunche Terrace, San Diego, CA
92122, owned of record 2,993.827 shares (5.56%), and
The Ohio Company FBO D.E. Stern, 155 East Broad Street,
Columbus, OH 45459, owned of record 2,985.075 shares
(5.54%); and that of the outstanding Class C shares of the Ivy
Global Natural Resources Fund, Merrill Lynch Pierce Fenner
& Smith, 4800 Deer Lake Drive East, 3rd Floor,
Jacksonville, Florida 32246, owned of record 3,293.000
shares (40.18%), Painewebber FBO Painewebber CUST for
John L. Hammons, PO Box 3321, Weehawken, NJ 07087-8154,
owned of record 1,014.370 shares (12.37%), Anthony L.
and Marie E. Bassano JT TEN, 8934 Bari Court, Port
Richey, FL 34668, owned of record 922.509 shares
(11.25%), The Ohio Company FBO H.M. Miller, 155 East Broad
Street, Columbus, OH 45459, owned of record 516.796 shares
(6.30%), The Ohio Company FBO R.H. Welsh, 155 East Broad
Street, Columbus, OH 45459, owned of record 463.822
shares (5.65%), The Ohio Company FBO W.H. Willis, 155
East Broad Street, Columbus, OH 45459, owned of record
463.822 shares (5.65%), and Robert W. and Isabel M.
Harvey TTEES, 102 Indigo Cove Place, Melborne Beach, FL
32951, owned of record 423.729 shares (5.17%); of the outstanding
Class C shares of the Ivy Global Science & Technology
Fund,

Painewebber FBO Michael C. and Carolyn G. Keel JTWROS,
PO Box 8864, Rancho Santa Fe, CA 92067, of the
outstanding Class C shares of the Ivy International
Fund, Merrill Lynch Pierce Fenner & Smith, 4800 Deer
Lake Drive East, 3rd Floor, Jacksonville, Florida
32246, owned of record 2,187,646.000 shares (66.42%); of
the outstanding Class C shares of the Ivy International Small
Companies Fund, Merrill Lynch Pierce Fenner & Smith, 4800
Deer Lake Drive East, 3rd Floor, Jacksonville, Florida
32246, owned of record 65,952.000 shares (62.82%), and
The Ohio Company FBO Gerald Mansbach c/o Mansbach
Metal, 155 East Broad Street, Columbus, OH 45459, owned
of record 24,727.992 shares (23.55%); of the
outstanding Class C shares of Ivy Latin America Strategy
Fund, Merrill Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive
East, 3rd Floor, Jacksonville, Florida 32246, owned of
record 25,888.000 shares (72.45%), and Donaldson Lufkin
Jenrette Securities Corporation Inc., P.O. Box 2052,
Jersey City, New Jersey 07303, owned of record
2,956.167 shares (8.27%); and of the outstanding Class
C shares of Ivy New Century Fund, Merrill Lynch Pierce
Fenner & Smith, 4800 Deer Lake Drive East, 3rd Floor,
Jacksonville, Florida 32246, owned of record 76,247.857
shares (26.44%).

To the knowledge of the Trust, as of March 31,
1997, no shareholder owned beneficially or of record 5%
or more of any Fund's outstanding Class I shares,
except that: of the outstanding Class I shares of Ivy
International Fund, The John E. Fetzer Institute Inc.,
9292 W. KL Avenue, Kalamazoo, MI 49009, owned of record
446,603.062 shares (25.11%), Vernat Company, P.O. Box
669, Rutland, Vermont 05702, owned of record 212,268.214
shares (11.93%), S. Mark Taper Foundation, 12011 San Vicente
Blvd., Suite 400, Los Angeles, CA 90049, owned of record
153,271.003 shares (8.61%), Wendel & Co., c/o Bank of New
York, PO Box 1066 Wall Street Station, New York, NY
10268, owned of record 135,771.781 shares (7.63%),
David & Co., PO Box 188, Murfreesboro, TN 37133-0188,
owned of record 112,704.277 shares (6.33%), and Samual
Miller TTEE for the Liz Clairborne PSP, One Clairborne
Ave, N. Bergen, NJ 07047, owned of record 91,145.640
shares (5.12%).

considered remote. No series of the Trust is liable
for the obligations of any other series of the Trust.
However, because the Prospectus pertains to more than
one Fund, it is possible that one of the Funds to which
the Prospectus pertains might become liable for any
misstatement, inaccuracy, or incomplete disclosure in
the Prospectus concerning any other Fund to which the
Prospectus pertains.

NET ASSET VALUE

The share price, or value, for the separate
Classes of shares of a Fund is called the net asset
value per share. The net asset value per share of a
Fund is computed by dividing the value of the assets of
that Fund, less its liabilities, by the number of
shares of the particular Fund outstanding. For
purposes of determining the aggregate net assets of a Fund, cash
and receivables will be valued at their realizable
amounts. A security listed or traded on a recognized
stock exchange or NASDAQ is valued at its last sale
price on the principal exchange on which the security
is traded. The value of a foreign security is
determined in its national currency as of the normal close of
trading on the foreign exchange on which it is traded or as
of the close of regular trading on the Exchange, if
that is earlier, and that value is then converted into
its U.S. dollar equivalent at the foreign exchange rate
in effect at noon, eastern time, on the day the value
of the foreign security is determined. If no sale is
reported at that time, the average between the current
bid and asked price is used. All other securities for which OTC
market quotations are readily available are valued at the
average between the current bid and asked price.
Interest will be recorded as accrued. Securities and
other assets for which market prices are not readily
available are valued at fair value as determined by IMI
and approved in good faith by the Board. Money market
instruments of the Fund are valued at amortized cost,
which approximates money market value.

holiday or otherwise, the Trust reserves the right to
advance the time on that day by which purchase and
redemption requests must be received.

The premium paid by a Fund for the purchase of a
call or a put option will be deducted from its assets
and an equal amount will be included in the asset
section of that Fund's Statement of Assets and
Liabilities as an investment and subsequently adjusted
to the current market value of the option. For example, if the
current market value of the option exceeds the premium
paid, the excess would be unrealized appreciation and,
conversely, if the premium exceeds the current market
value, such excess would be unrealized depreciation.
The current market value of a purchased option will be
the last sale price on the principal exchange on which
the option is traded or, in the absence of a sale, the last
bid price. If a Fund exercises a call option which it has
purchased, the cost of the security which that Fund
purchased upon exercise will be increased by the
premium originally paid.

PORTFOLIO TURNOVER

annual portfolio turnover rates for the Funds are
provided in the Prospectus under "The Funds' Financial
Highlights."

REDEMPTIONS

Shares of each Fund are redeemed at their net
asset value next determined after a proper redemption
request has been received by IMSC, less any applicable
CDSC.

investing pursuant to the Automatic Investment Method
will not be redeemed automatically unless they have
ceased making payments pursuant to the plan for a
period of at least six consecutive months, and these
shareholders will be given six-months' notice by the
Trust before such redemption. Shareholders in a qualified
retirement, pension or profit sharing plan who wish to avoid
tax consequences must "rollover" any sum so redeemed
into another qualified plan within 60 days. The
Trustees of the Trust may change the minimum account
size.

CONVERSION OF CLASS B SHARES

gain distributions.

TAXATION

Each Fund intends to be taxed as a regulated
investment company under Subchapter M of the Code.
Accordingly, each Fund must, among other things, (a)
derive in each taxable year at least 90% of its gross
income from dividends, interest, payments with respect
to certain securities loans, and gains from the sale or
other disposition of stock, securities or foreign currencies,
or other income derived with respect to its business of
investing in such stock, securities or currencies; (b)
derive in each taxable year less than 30% of its gross
income from the sale or other disposition of certain
assets held less than three months, namely: (i) stock
or securities; (ii) options, futures, or forward
contracts (other than those on foreign currencies); or
(iii) foreign currencies (or options, futures, or forward
contracts on foreign currencies) that are not directly related
to the particular Fund's principal business of
investing in stock or securities (or options and
futures with respect to stock or securities) (the "30%
Limitation"); and (c) diversify its holdings so that,
at the end of each fiscal quarter, (i) at least 50% of
the market value of the particular Fund's assets is
represented by cash, U.S. Government securities, the securities
of other regulated investment companies and other
securities, with such other securities limited, in
respect of any one issuer, to an amount not greater
than 5% of the value of the particular Fund's total
assets and 10% of the outstanding voting securities of
such issuer, and (ii) not more than 25% of the value of its
total assets is invested in the securities of any one issuer
(other than U.S. Government securities and the securities
of other regulated investment companies).

gains or losses) for the calendar year, (2) at least
98% of its capital gains in excess of its capital
losses (adjusted for certain ordinary losses) for a
one-year period generally ending on October 31 of the
calendar year, and (3) all ordinary income and capital
gains for previous years that were not distributed
during such years. To avoid application of the excise tax, each
Fund intends to make distributions in accordance with the
calendar year distribution requirements. A distribution
will be treated as paid on December 31 of the current
calendar year if it is declared by the particular Fund
in October, November or December of the year with a
record date in such a month and paid by that Fund
during January of the following year. Such
distributions will be taxable to shareholders in the calendar
year the distributions are declared, rather than the
calendar year in which the distributions are received.

OPTIONS, FUTURES AND FOREIGN CURRENCY FORWARD CONTRACTS

The taxation of equity options and OTC options on
debt securities is governed by Code section 1234.
Pursuant to Code section 1234, the premium received by
a Fund for selling a put or call option is not included
in income at the time of receipt. If the option
expires, the premium is short-term capital gain to the
Fund. If the Fund enters into a closing transaction, the
difference between the amount paid to close out its position and
the premium received is short-term capital gain or loss.
If a call option written by a Fund is exercised,
thereby requiring the Fund to sell the underlying
security, the premium will increase the amount realized
upon the sale of such security and any resulting gain
or loss will be a capital gain or loss, and will be
long-term or short-term depending upon the holding period of
the security. With respect to a put or call option that is
purchased by a Fund, if the option is sold, any resulting
gain or loss will be a capital gain or loss, and will
be long-term or short-term, depending upon the holding
period of the option. If the option expires, the
resulting loss is a capital loss and is long-term or
short-term, depending upon the holding period of the
option. If the option is exercised, the cost of the option, in
the case of a call option, is added to the basis of the
purchased security and, in the case of a put option,
reduces the amount realized on the underlying security
in determining gain or loss.

CURRENCY FLUCTUATIONS -- "SECTION 988" GAINS OR LOSSES

INVESTMENT IN PASSIVE FOREIGN INVESTMENT COMPANIES

DEBT SECURITIES ACQUIRED AT A DISCOUNT

deduction for dividends received by corporations if so
designated by the Fund in a written notice to
shareholders.

Some debt securities (with a fixed maturity date
of one year or less from the date of issuance) that may
be acquired by a Fund may be treated as having
acquisition discount, or OID in the case of certain
types of debt securities. Generally, a Fund will be
required to include the acquisition discount, or OID, in income
over the term of the debt security, even though payment of
that amount is not received until a later time, usually
when the debt security matures. A Fund may make one or
more of the elections applicable to debt securities
having acquisition discount, or OID, which could affect
the character and timing of recognition of income.

DISTRIBUTIONS

shares will have a cost basis in each share received
equal to the net asset value of a share of a Fund on
the distribution date. A distribution of an amount in
excess of a Fund's current and accumulated earnings and
profits will be treated by a shareholder as a return of
capital which is applied against and reduces the
shareholder's basis in his or her shares. To the extent that the
amount of any such distribution exceeds the
shareholder's basis in his or her shares, the excess
will be treated by the shareholder as gain from a sale
or exchange of the shares. Shareholders will be
notified annually as to the U.S. Federal tax status of
distributions and shareholders receiving distributions
in the form of newly issued shares will receive a report as to
the net asset value of the shares received.

DISPOSITION OF SHARES

charge is reduced under a "reinvestment right" received
upon the initial purchase of Fund shares. The term
"reinvestment right" means any right to acquire shares
of one or more regulated investment companies without
the payment of a sales load or with the payment of a
reduced sales charge. Sales charges affected by this
rule are treated as if they were incurred with respect to
the shares acquired under the reinvestment right. This
provision may be applied to successive acquisitions of
fund shares.

FOREIGN WITHHOLDING TAXES

Income received by a Fund from sources within a
foreign country may be subject to withholding and other
taxes imposed by that country.

If more than 50% of the value of a Fund's total
assets at the close of its taxable year consists of
securities of foreign corporations, the Fund will be
eligible and may elect to "pass- through" to that Fund's
shareholders the amount of foreign income and similar
taxes paid by that Fund. Pursuant to this election, a
shareholder will be required to include in gross income (in
addition to taxable dividends actually received) his or her
pro rata share of the foreign income and similar taxes
paid by a Fund, and will be entitled either to deduct
his or her pro rata share of foreign income and similar
taxes in computing his or her taxable income or to use
it as a foreign tax credit against his or her U.S.
Federal income taxes, subject to limitations. No
deduction for foreign taxes may be claimed by a shareholder who
does not itemize deductions. Foreign taxes generally may
not be deducted by a shareholder that is an individual
in computing the alternative minimum tax. Each
shareholder will be notified within 60 days after the
close of a Fund's taxable year whether the foreign
taxes paid by the Fund will "pass-through" for that
year and, if so, such notification will designate (1) the
shareholder's portion of the foreign taxes paid to each such
country and (2) the portion of the dividend which represents
income derived from sources within each such country.

The foregoing is only a general description of the
foreign

tax credit under current law. Because application of
the credit depends on the particular circumstances of
each shareholder, shareholders are advised to consult
their own tax advisers.

BACKUP WITHHOLDING

PERFORMANCE INFORMATION

Comparisons of a Fund's performance may be made
with respect to various unmanaged indices (including
the TSE 300, S&P 100, S&P 500, Dow Jones Industrial
Average and Major Market Index) which assume
reinvestment of dividends, but do not reflect deductions
for administrative and management costs. A Fund also may be
compared to Lipper's Analytical Reports, reports produced by
a widely used independent research firm that ranks
mutual funds by overall performance, investment
objectives and assets, or to Wiesenberger Reports.
Lipper Analytical Services does not include sales
charges in computing performance. Further information
on comparisons is contained in the Prospectus.
Performance rankings will be based on historical information and
are not intended to indicate future performance.

In addition, the Trust may, from time to time,
include the average annual total return and the
cumulative total return of shares of a Fund in
advertisements, promotional literature or reports to
shareholders or prospective investors.

P(1 + T){superscript n} = ERV

Where: P = a hypothetical initial payment of
$1,000 to purchase shares of a
specific Class

T = the average annual total return of
shares of that Class

n = the number of years

ERV = the ending redeemable value of a
hypothetical $1,000 payment made at
the beginning of the period.

For purposes of the above computation for a Fund,
it is assumed that all dividends and capital gains
distributions made by a Fund are reinvested at net
asset value in additional shares of the same Class
during the designated period. In calculating the
ending redeemable value for Class A shares and assuming
complete redemption at the end of the applicable period, the
maximum 5.75% sales charge is deducted from the initial
$1,000 payment and, for Class B shares and Class C
shares, the applicable CDSC imposed upon redemption of
Class B shares or Class C shares held for the period is
deducted. Standardized Return quotations for the Funds
do not take into account any required payments for
federal or state income taxes. Standardized Return
quotations for Class B shares for periods of over eight
years will reflect conversion of the Class B shares to
Class A shares at the end of the eighth year. Standardized
Return quotations are determined to the nearest 1/100 of 1%.

The following tables summarize the calculation of
Standardized and Non-Standardized Return for the Class A,
Class B, Class C and Class I (for Ivy International
Fund and Ivy Global Science & Technology Fund) shares
of the Funds for the periods indicated. In determining
the average annual total return for a specific Class of
shares of a Fund, recurring fees, if any, that

are charged to all shareholder accounts are taken into
consideration. For any account fees that vary with the
size of the account of a Fund, the account fee used for
purposes of the following computations is assumed to be
the fee that would be charged to the mean account size
of the particular Fund. Shares of each of Ivy Canada
Fund and Ivy Global Fund outstanding as of March 31,
1994 were designated Class A shares of each respective
Fund. Shares of Ivy International Fund outstanding as of
October 22, 1993 have been redesignated as "Class A" shares of
the Fund. Information such as that provided below is not
yet available for Ivy Asia Pacific Fund, Ivy Global
Natural Resources Fund and Ivy International Small
Companies Fund, which commenced operations on January
1, 1997.

IVY CANADA FUND:

STANDARDIZED RETURN[*] CLASS A[1]
CLASS B[2] CLASS C[3]

One year ended
December 31,
1996: 16.73% 18.26% N/A

Five years ended
December 31,
1996: 9.62% N/A N/A

Inception[#] to
December 31,
1996:[7] 3.43% 3.93% 5.51%

NON-STANDARDIZED RETURN[**]
CLASS A[4] CLASS B[5] CLASS C[6]

One year ended
December 31,
1996: 23.86% 23.26% N/A

Five years ended
December 31,
1996: 10.93% N/A N/A

Inception[#] to
December 31,
1996:[7] 4.10% 4.93% 6.51%
_________________________

[**] The Non-Standardized Return figures do not reflect
the deduction of any initial sales charge or CDSC.

[#] The inception date for Ivy Canada Fund (and the
Class A shares of the Fund) was November 17, 1987;
the inception date for Class B shares of the Fund
was April 1, 1994. The inception date for Class C
shares of the Fund is April 30, 1996. Until
December 31, 1994, Mackenzie Investment
Management, Inc. served as investment adviser to the Fund,
which until that date was a series of the Company.

[1] The Standardized Return figures for Class A shares
reflect expense reimbursement. Without expense
reimbursement, the Standardized Return for Class A
shares for the one year ended December 31, 1996,
the five years ended December 31, 1996 and the
period from inception through December 31, 1996
would have been 16.73%, 9.55% and 3.00%, respectively.

[2] The Standardized Return figures for Class B shares
reflect expense reimbursement. Without expense
reimbursement, the Standardized Return for Class B
shares for the one year ended December 31, 1996
and the period from inception through December 31,
1996 would have been 18.26% and 3.80%,
respectively. (Since the inception date for Class B shares
of the Fund was April 1, 1994, there were no Class B
shares outstanding for the duration of the five
year period ending December 31, 1996.)

[3] The Standardized Return figure for Class C shares
reflects expense reimbursement. Without expense
reimbursement, the Standardized Return for Class C
shares for period from inception through December
31, 1996 would have been 5.51%. (Since the
inception date for Class C shares of the Fund was
April 30, 1996, there were no Class C shares outstanding for
the duration of the one year or five year periods ending
December 31, 1996.)

[4] The Non-Standardized Return figures for Class A
shares reflect expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class A shares for the one year ended December
31, 1996, the five years ended December 31, 1996
and the period from inception through December 31,
1996 would have been 23.86%, 10.86% and 3.67%,
respectively.

[5] The Non-Standardized Return figures for Class B
shares reflect expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class B shares for the one year ended December
31, 1996 and the period from inception through
December 31, 1996 would have been 23.26% and
4.81%, respectively. (Since the inception date
for Class B shares of the Fund was April 1, 1994, there
were no Class B shares outstanding for the duration of the
five year period ending December 31, 1996.)

[6] The Non-Standardized Return figure for Class C
shares reflects expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class C shares for period from inception
through December 31, 1996 would have been 6.51%.
(Since the inception date for Class C shares of
the Fund was April 30, 1996, there were no Class C
shares outstanding for the duration of the one year or
five year periods ending December 31, 1996.)

[7] The total return for a period less than a full
year is calculated on an aggregate basis and is
not annualized.

IVY CHINA REGION FUND:

STANDARDIZED RETURN[*]
CLASS A[1] CLASS B[2] CLASS C[3]

One year ended
December 31,
1996: 13.57% 14.67% N/A

Inception[#] to
December 31,
1996:[7] 0.07% 0.28% 8.39%

NON-STANDARDIZED RETURN[**]
CLASS A[4] CLASS B[5] CLASS C[6]

One year ended
December 31,
1996: 20.50% 19.67% N/A

Inception[#] to
December 31,
1996:[7] 1.95% 1.21% 9.39%
_________________________

[**] The Non-Standardized Return figures do not reflect
the deduction of any initial sales charge or CDSC.

[#] The inception date for Ivy China Region Fund
(Class A and Class B shares) was October 23, 1993.
The inception date for Class C shares of the Fund
is April 30, 1996.

[1] The Standardized Return figures for Class A shares
reflect expense reimbursement. Without expense
reimbursement, the

Standardized Return for Class A shares for the one
year ended December 31, 1996 and the period from
inception through December 31, 1996 would have
been 13.22% and (0.38%), respectively.

[3] The Standardized Return figures for Class C shares
reflect expense reimbursement. Without expense
reimbursement, the Standardized Return for Class C
shares for the period from inception through
December 31, 1996 would have been 8.39%. (Since
the inception date for Class C shares of the Fund was
April 30, 1996, there were no Class C shares outstanding for
the duration of the one year period ending December
31, 1996.)

[4] The Non-Standardized Return figures for Class A
shares reflect expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class A shares for the one year ended December
31, 1996 and the period from inception through
December 31, 1996 would have been 20.13% and
1.49%, respectively.

[6] The Non-Standardized Return figures for Class C
shares reflect expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class C shares for the period from inception
through December 31, 1996 would have been 9.39%.
(Since the inception date for Class C shares of
the Fund was April 30, 1996, there were no Class C
shares outstanding for the duration of the one year
period ending December 31, 1996.)

[7] The total return for a period less than a full
year is calculated on an aggregate basis and is
not annualized.

IVY GLOBAL FUND:

STANDARDIZED RETURN[*]
CLASS A[1] CLASS B[2] CLASS C[3]

One year ended

December 31,
1996: 9.53% 10.30% N/A

Five years ended
December 31,
1996: 9.30% N/A N/A

Inception[#] to
December 31,
1996:[7] 9.44% 7.83% 2.07%

NON-STANDARDIZED RETURN[**]
CLASS A[4] CLASS B[5] CLASS C[6]

One year ended
December 31,
1996: 16.21% 15.30% N/A

Five years ended
December 31,
1996: 10.60% N/A N/A

Inception[#] to
December 31,
1996:[7] 10.58% 8.78% 3.07%
_________________________

[**] The Non-Standardized Return figures do not reflect
the deduction of any initial sales charge or CDSC.

[#] The inception date for Ivy Global Fund (and Class
A shares of the Fund) was April 18, 1991; the
inception date for Class B shares of the Fund was
April 1, 1994; and the inception date for the
Class C shares of the Fund is April 30, 1996.
Until December 31, 1994, Mackenzie Investment
Management Inc. served as investment adviser to the Fund,
which until that date was a series of the Company.

[1] The Standardized Return figures for Class A shares
reflect expense reimbursement. Without expense
reimbursement, the Standardized Return for Class A
shares for the one year ended December 31, 1996,
the five years ended December 31, 1996 and the
period from inception through December 31, 1996
would have been 9.53%, 8.97% and 8.57, respectively.

[2] The Standardized Return figures for Class B shares
reflect expense reimbursement. Without expense
reimbursement, the

Standardized Return for Class B shares for the one
year ended December 31, 1996 and the period from
inception through December 31, 1996 would have
been 10.30% and 7.72%, respectively. (Since the
inception date for Class B shares of the Fund was
April 1, 1994, there were no Class B shares
outstanding for the duration of the five year period ending
December 31, 1996.)

[3] The Standardized Return figure for Class C shares
reflects expense reimbursement. Without expense
reimbursement, the Standardized Return for Class C
shares for the period from inception through
December 31, 1996 would have been 2.07%. (Since
the inception date for Class C shares of the Fund was
April 30, 1996, there were no Class C shares outstanding for
the duration of the one year period ending December
31, 1996.)

[4] The Non-Standardized Return figures for Class A
shares reflect expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class A shares for the one year ended December
31, 1996, the five years ended December 31, 1996
and the period from inception through December 31,
1996 would have been 16.21%, 10.27% and 9.71%,
respectively.

[5] The Non-Standardized Return figures for Class B
shares reflect expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class B shares for the one year ended December
31, 1996 and the period from inception through
December 31, 1996 would have been 15.30% and
8.67%, respectively. (Since the inception date
for Class B shares of the Fund was April 1, 1994, there
were no Class B shares outstanding for the duration of the
five year period ending December 31, 1996.)

[6] The Non-Standardized Return figure for Class C
shares reflects expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class C shares for the period from inception
through December 31, 1996 would have been 3.07%.
(Since the inception date for Class C shares of
the Fund was April 30, 1996, there were no Class C
shares outstanding for the duration of the one year
period ending December 31, 1996.)

[7] The total return for a period less than a full
year is calculated on an aggregate basis and is
not annualized.

IVY GLOBAL SCIENCE & TECHNOLOGY FUND:

STANDARDIZED RETURN[*]
CLASS A[1] CLASS B[2] CLASS C[3]

Inception[#] to

December 31,
1996:[7] 54.89% 59.59% 63.84%

NON-STANDARDIZED RETURN[**]
CLASS A[4] CLASS B[5] CLASS C[6]

Inception[#] to
December 31,
1996:[7] 64.34% 64.59% 64.84%
_________________________

[**] The Non-Standardized Return figures do not reflect
the deduction of any initial sales charge or CDSC.

[#] The inception date for Ivy Global Science &
Technology Fund (and Class A, Class B and Class C
shares of the Fund) was July 22, 1996.

[1] The Standardized Return figure for Class A shares
reflect expense reimbursement. Without expense
reimbursement, the Standardized Return for Class A
shares for the period from inception through
December 31, 1996 would have been 54.63%.

[2] The Standardized Return figure for Class B shares
reflect expense reimbursement. Without expense
reimbursement, the Standardized Return for Class B
shares for the period from inception through
December 31, 1996 would have been 59.46%.

[4] The Non-Standardized Return figure for Class A
shares reflect expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class A shares for the period from inception
through December 31, 1996 would have been 64.07%.

[5] The Non-Standardized Return figure for Class B
shares reflect expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class B shares for the period from inception
through December 31, 1996 would have been 64.46%.

[6] The Non-Standardized Return figure for Class C
shares reflects expense reimbursement. Without
expense

reimbursement, the Non-Standardized Return for
Class C shares for the period from inception
through December 31, 1996 would have been 64.71%.

[7] The total return for a period less than a full
year is calculated on an aggregate basis and is
not annualized.

IVY INTERNATIONAL FUND

STANDARDIZED
RETURN[*] CLASS A[1] CLASS B[2] CLASS
C[3] CLASS I[4]

One year ended
December 31,
1996: 12.84% 13.76% N/A
20.06%
Five years ended
December 31,
1996: 14.42% N/A N/A
N/A

Ten years ended
December 31,
1996: 14.77% N/A N/A
N/A

Inception[#] to
December 31,
1996:[8] 14.90% 12.09% 10.45%
13.34%

NON-STANDARDIZED RETURN[**]
CLASS A[5] CLASS B[6] CLASS C[7] CLASS
I[5]

One year ended
December 31,
1996: 19.72% 18.76% N/A
20.06%
Five years ended
December 31,
1996: 15.78% N/A N/A
N/A

Ten years ended
December 31,
1996: 15.45% N/A N/A
N/A

Inception[#] to
December 31,
1996:[8] 15.54% 12.82% 11.45%
13.34%

_________________________

[*] The Standardized Return figures for Class A shares
reflect the deduction of the maximum initial sales
charge of 5.75%. The Standardized Return figures
for Class B and C shares

reflect the deduction of the applicable CDSC
imposed on a redemption of Class B or C shares
held for the period. Class I shares are not
subject to an initial or a CDSC; therefore, the
Non-Standardized Return figures would be identical
to the Standardized Return figures.

[**] The Non-Standardized Return figures do not reflect
the deduction of any initial sales charge or CDSC.

[#] The inception date for Ivy International Fund (and
the Class A shares of the Fund) was April 21,
1986; the inception date for the Class B and Class
I shares of the Fund was October 23, 1993; and the
inception date for the Class C shares of the Fund
is April 30, 1996.

[1] The Standardized Return figures for Class A shares
reflect expense reimbursement. Without expense
reimbursement, the Standardized Return for Class A
shares for the one year ended December 31, 1996,
the five years ended December 31, the ten years
ended December 31, 1996 and the period from
inception through December 31, 1996 would have been 12.84%,
14.40%, 14.76% and 14.89%, respectively.

[2] The Standardized Return figures for Class B shares
reflect expense reimbursement. Without expense
reimbursement, the Standardized Return for Class B
shares for the one year ended December 31, 1996
and the period from inception through December 31,
1996 would have been 13.76% and 12.09%,
respectively. (Since the inception date for Class B shares
of the Fund was October 23, 1993, there were no Class B
shares outstanding for the duration of the five year
or ten year periods ending December 31, 1996.)

[3] The Standardized Return figures for Class C shares
reflect expense reimbursement. Without expense
reimbursement, the Standardized Return for Class C
shares for the period from inception through
December 31, 1996 would have been 10.45%. (Since
the inception date for Class C shares of the Fund was
April 30, 1996, there were no Class C shares outstanding for
the duration of the one year, five year or ten year
periods ending December 31, 1996.)

[4] Class I shares are not subject to an initial sales
charge or a CDSC, therefore the Non-Standardized
and Standardized Return figures are identical.
(Since the inception date for Class I shares of
the Fund was October 23, 1993, there were no Class
I shares outstanding for the duration of the five
year or ten year periods ending December 31, 1996.)

[5] The Non-Standardized Return figures for Class A
shares reflect expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class A shares for the one year ended December
31, 1996, the five years ended December 31, the
ten years ended December 31,

1996 and the period from inception through
December 31, 1996 would have been 19.72%, 15.76%,
15.44% and 15.53%, respectively.

[6] The Non-Standardized Return figures for Class B
shares reflect expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class B shares for the one year ended December
31, 1996 and the period from inception through
December 31, 1996 would have been 18.76% and
12.82%, respectively. (Since the inception date
for Class B shares of the Fund was October 23, 1993,
there were no Class B shares outstanding for the duration of
the five year or ten year periods ending December 31,
1996.)

[7] The Non-Standardized Return figures for Class C
shares reflect expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class C shares for the period from inception
through December 31, 1996 would have been 11.45%.
(Since the inception date for Class C shares of
the Fund was April 30, 1996, there were no Class C
shares outstanding for the duration of the one year,
five year or ten year periods ending December 31, 1996.)

[8] The total return for a period less than a full
year is calculated on an aggregate basis and is
not annualized.

IVY LATIN AMERICA STRATEGY FUND

STANDARDIZED RETURN[*]
CLASS A[1] CLASS B[2] CLASS C[3]

One year ended
December 31,
1996: 17.07% 18.26% N/A

Inception[#] to
December 31,
1996:[7] (9.13%) (8.84%) 5.66%

NON-STANDARDIZED RETURN[**]
CLASS A[4] CLASS B[5] CLASS C[6]

One year ended
December 31,
1996: 24.22% 23.26% N/A

Inception[#] to
December 31,
1996:[7] (6.62%) (7.40%) 6.66%
_________________________

[**] The Non-Standardized Return figures do not reflect
the deduction of any initial sales charge or CDSC.

[#] The inception date for Ivy Latin America Strategy
Fund (Class A and Class B shares) was November 1,
1994. The inception date for Class C shares of
the Fund is April 30, 1996.

[1] The Standardized Return figures for Class A shares
reflect expense reimbursement. Without expense
reimbursement, the Standardized Return for Class A
shares for the one year ended December 31, 1996
and the period from inception through December 31,
1996 would have been 14.83% and (14.38%),
respectively.

[3] The Standardized Return figure for Class C shares
reflects expense reimbursement. Without expense
reimbursement, the Standardized Return for Class C
shares for period from inception through December
31, 1996 would have been 4.66%. (Since the
inception date for Class C shares of the Fund was
April 30, 1996, there were no Class C shares outstanding for
the duration of the one year, five year or ten year
periods ending December 31, 1996.)

[4] The Non-Standardized Return figures for Class A
shares reflect expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class A shares for the one year ended December
31, 1996 and the period from inception through
December 31, 1996 would have been 21.84% and
(11.98%), respectively.

[6] The Non-Standardized Return figure for Class C
shares reflects expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class C

shares for period from inception through December
31, 1996 would have been 5.66%. (Since the
inception date for Class C shares of the Fund was
April 30, 1996, there were no Class C shares
outstanding for the duration of the one year, five
year or ten year periods ending December 31, 1996.)

[7] The total return for a period less than a full
year is calculated on an aggregate basis and is
not annualized.

IVY NEW CENTURY FUND

STANDARDIZED RETURN[*]
CLASS A[1] CLASS B[2] CLASS C[3]

One year ended
December 31,
1996: 5.40% 5.95% N/A

Inception[#] to
December 31,
1996:[7] (1.39%) (0.81%) 0.73%

NON-STANDARDIZED RETURN[**]
CLASS A[4] CLASS B[5] CLASS C[6]

One year ended
December 31,
1996: 11.83% 10.95% N/A

Inception[#] to
December 31,
1996:[7] 1.34% 0.57% 1.73%
_________________________

[**] The Non-Standardized Return figures do not reflect
the deduction of any initial sales charge or CDSC.

[#] The inception date for Ivy New Century Fund (Class
A and Class B shares) was November 1, 1994. The
inception date for Class C shares of the Fund is
April 30, 1996.

[1] The Standardized Return figures for Class A shares
reflect expense reimbursement. Without expense
reimbursement, the Standardized Return for Class A
shares for the one year ended December 31, 1996
and the period from inception through December 31,
1996 would have been 4.98% and (4.10%),

respectively.

[3] The Standardized Return figure for Class C shares
reflects expense reimbursement. Without expense
reimbursement, the Standardized Return for Class C
shares for period from inception through December
31, 1996 would have been 0.63%. (Since the
inception date for Class C shares of the Fund was
April 30, 1996, there were no Class C shares outstanding for
the duration of the one year, five year or ten year
periods ending December 31, 1996.)

[4] The Non-Standardized Return figures for Class A
shares reflect expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class A shares for the one year ended December
31, 1996 and the period from inception through
December 31, 1996 would have been 11.41% and
(1.42%), respectively.

[6] The Non-Standardized Return figure for Class C
shares reflects expense reimbursement. Without
expense reimbursement, the Non-Standardized Return
for Class C shares for period from inception
through December 31, 1996 would have been 1.63%.
(Since the inception date for Class C shares of
the Fund was April 30, 1996, there were no Class C
shares outstanding for the duration of the one year, five
year or ten year periods ending December 31, 1996.)

[7] The total return for a period less than a full
year is calculated on an aggregate basis and is
not annualized.

return is then expressed as a percentage):

C = (ERV/P) - 1

Where: C = cumulative total return

P = a hypothetical initial investment
of $1,000 to purchase shares of a
specific Class

ERV = ending redeemable value: ERV is
the value, at the end of the
applicable period, of a
hypothetical $1,000 investment made at the
beginning of the applicable period.

IVY CANADA FUND. The following table summarizes
the calculation of Cumulative Total Return for the
periods indicated through December 31, 1996, assuming
the maximum 5.75% sales charge has been assessed.
SINCE
ONE YEAR FIVE YEARS INCEPTION[*]

Class A 16.73% 58.32% 36.28%
Class B 18.26% N/A[**] 11.17%
Class C N/A[**] N/A[**] 5.51%

The following table summarizes the calculation of
Cumulative Total Return for the periods indicated
through December 31, 1996, assuming the maximum 5.75%
sales charge has not been assessed.

SINCE
ONE YEAR FIVE YEARS INCEPTION[*]

Class A 23.86% 67.98% 44.59%
Class B 23.26% N/A[**] 14.17%
Class C N/A[**] N/A[**] 6.51%

___________________________

[*] The inception date for Ivy Canada Fund (and the
Class A shares of the Fund) was November 17, 1987;
the inception date for the Class B shares of Ivy
Canada Fund was April 1, 1994; and the inception
date for Class C shares of Ivy Canada Fund was
April 30, 1996. Until December 31, 1994,
Mackenzie Investment Management, Inc. served as investment
adviser to Ivy Canada Fund, which until that date was a
series of the Company.

[**] No such shares were outstanding for the duration
of the time period indicated.

IVY CHINA REGION FUND. The following table
summarizes the calculation of Cumulative Total Return
for the periods indicated through December 31, 1996,
assuming the maximum 5.75% sales charge has been
assessed.

SINCE
ONE YEAR INCEPTION[*]

Class A 13.57% 0.23%
Class B 14.67% 0.89%
Class C N/A[**] 8.39%

The following table summarizes the calculation of
Cumulative Total Return for the periods indicated
through December 31, 1996, assuming the maximum 5.75%
sales charge has not been assessed.

SINCE
ONE YEAR INCEPTION[*]

Class A 20.50% 6.34%
Class B 19.67% 3.89%
Class C N/A[**] 9.39%

___________________________

[*] The inception date for Ivy China Region Fund
(Class A and Class B shares) was October 23, 1993.
The inception date for Class C shares of the Fund
is April 30, 1996.

[**] No such shares were outstanding for the duration
of the time period indicated.

IVY GLOBAL FUND. The following table summarizes
the calculation of Cumulative Total Return for the
periods indicated through December 31, 1996, assuming
the maximum 5.75% sales charge has been assessed.
SINCE
ONE YEAR FIVE YEARS INCEPTION[*]

Class A 9.53% 55.96% 67.34%
Class B 10.30% N/A[**] 23.03%
Class C N/A[**] N/A[**] 2.07%

The following table summarizes the calculation of
Cumulative Total Return for the periods indicated
through December 31, 1996, assuming the maximum 5.75%
sales charge has not been assessed.

SINCE
ONE YEAR FIVE YEARS INCEPTION[*]

Class A 16.21% 65.48% 77.55%
Class B 15.30% N/A[**] 26.03%
Class C N/A[**] N/A[**] 3.07%

___________________________

[*] The inception date for the Fund (and Class A
shares of the Fund) was April 18, 1991; the
inception date for Class B shares of the Fund was
April 1, 1994; and the inception date

for Class C shares of the Fund was April 30, 1996.
Until December 31, 1994, Mackenzie Investment
Management Inc. served as investment adviser to
the Fund, which until that date was a series of
the Company.

[**] No such shares were outstanding for the duration
of the time period indicated.

IVY GLOBAL SCIENCE & TECHNOLOGY FUND. The
following table summarizes the calculation of
Cumulative Total Return for the periods indicated
through December 31, 1996, assuming the maximum 5.75%
sales charge has been assessed.

SINCE
INCEPTION[*]

Class A 54.89%
Class B 59.59%
Class C 63.84%

The following table summarizes the calculation of
Cumulative Total Return for the periods indicated
through December 31, 1996, assuming the maximum 5.75%
sales charge has not been assessed.

SINCE
INCEPTION[*]

Class A 64.34%
Class B 64.59%
Class C 64.84%

___________________________

[*] The inception date for Ivy Global Science &
Technology Fund (Class A, Class B and Class C
shares) was July 22, 1996.

IVY INTERNATIONAL FUND. The following table
summarizes the calculation of Cumulative Total Return
for the periods indicated through December 31, 1996,
assuming the maximum 5.75% sales charge has been
assessed.

SINCE ONE YEAR FIVE YEARS TEN YEARS
INCEPTION[*]

Class A 12.84% 96.10% 296.50%
340.95% Class B 13.76% N/A[**] N/A[**]
43.93% Class C N/A[**] N/A[**] N/A[**]
10.45% Class I 20.06 N/A[**]
N/A[**] 49.18%

The following table summarizes the
calculation of Cumulative Total Return for the periods
indicated through December 31, 1996, assuming the
maximum 5.75% sales charge has not been assessed.

SINCE ONE YEAR FIVE YEARS TEN YEARS
INCEPTION[*]

Class A 19.72% 108.07% 320.69%
367.85% Class B 18.76% N/A[**] N/A[**]
46.93% Class C N/A[**] N/A[**] N/A[**]
11.45% Class I 20.06% N/A[**]
N/A[**] 49.18% ___________________________

[*] The inception date for Ivy International
Fund (and the Class A shares of the Fund)
was April 21, 1986; the inception date for
the Class B and Class I shares of Ivy
International Fund was October 23, 1993.
The inception date for Class C shares of the
Fund was April 30, 1996.

[**] No such shares were outstanding for the
duration of the time period indicated.

IVY LATIN AMERICA STRATEGY FUND. The
following table summarizes the calculation of
Cumulative Total Return for the periods indicated
through December 31, 1996, assuming the maximum 5.75%
sales charge has been assessed.

SINCE
ONE YEAR INCEPTION[*]

Class A 16.07% (18.75%)
Class B 18.26% (17.74%)
Class C N/A[**] 5.66%

The following table summarizes the
calculation of Cumulative Total Return for the periods
indicated through December 31, 1996, assuming the
maximum 5.75% sales charge has not been assessed.

SINCE
ONE YEAR INCEPTION[*]

Class A 24.22% (13.79%)
Class B 23.26% (15.20%)
Class C N/A[**] 6.66%

___________________________

[*] The inception date for Ivy Latin America
Strategy Fund (Class A and Class B shares)
was November 1, 1994. The inception date
for Class C shares of the Fund was April
30, 1996.

[**] No such shares were outstanding for the
duration of the time period indicated.

IVY NEW CENTURY FUND. The following table
summarizes the calculation of Cumulative Total Return
for the periods indicated through December 31, 1996,
assuming the maximum 5.75% sales charge has been
assessed.

SINCE
ONE YEAR INCEPTION[*]

Class A 5.40% (2.99%)
Class B 5.95% (1.75%)
Class C N/A[**] 0.73%

The following table summarizes the
calculation of Cumulative Total Return for the periods
indicated through December 31, 1996, assuming the
maximum 5.75% sales charge has not been assessed.

SINCE
ONE YEAR INCEPTION[*]

Class A 11.83% 2.93%
Class B 10.95% 1.25%
Class C N/A[**] 1.73%

___________________________

[*] The inception date for Ivy New Century
Fund (Class A and B shares) was November
1, 1994. The inception date for Class C
shares of the Fund was April 30, 1996.

[**] No such shares were outstanding for the
duration of the time period indicated.

Performance quotations for a Fund will vary from
time to time depending on market conditions, the
composition of the Fund's portfolio and operating
expenses of that Fund. These factors and possible
differences in the methods used in calculating
performance quotations should be considered when
comparing performance information regarding a Fund's shares with
information published for other investment companies and
other investment vehicles. Performance quotations
should also be considered relative to changes in the
value of a Fund's shares and the risks associated with
a Fund's investment objectives and policies. At any
time in the future, performance quotations may be
higher or lower than past performance quotations and there can
be no assurance that any historical performance quotation
will continue in the future.

Boston Herald, Business Week, Consumer's Digest,
Consumer Guide Publications, Changing Times, Financial
Planning, Financial World, Forbes, Fortune, Growth Fund
Guide, Houston Post, Institutional Investor,
International Fund Monitor, Investor's Daily, Los
Angeles Times, Medical Economics, Miami Herald, Money
Mutual Fund Forecaster, Mutual Fund Letter, Mutual Fund Source
Book, Mutual Fund Values, National Underwriter, Nelson's
Directory of Investment Managers, New York Times, Newsweek,
No Load Fund Investor, No Load Fund* X, Oakland
Tribune, Pension World, Pensions and Investment Age,
Personal Investor, Rugg and Steele, Time, U.S. News and
World Report, USA Today, The Wall Street Journal, and
Washington Post.

FINANCIAL STATEMENTS

The Funds' (except for Ivy Asia Pacific Fund, Ivy
Global Natural Resources Fund and Ivy International
Small Companies Fund) Portfolios of Investments as of
December 31, 1996, Statements of Assets and Liabilities
as of December 31, 1996, Statements of Operations for
the fiscal year ended December 31, 1996 (for the period
from July 22, 1996 (commencement of operations) to
December 31, 1996 for Ivy Global Science & Technology
Fund), Statements of Changes in Net Assets for the
fiscal years ended December 31, 1996 and December 31, 1995 (for
the period from July 22, 1996 (commencement of operations)
to December 31, 1996 for Ivy Global Science &
Technology Fund), Financial Highlights, Notes to
Financial Statements, and Reports of Independent
Accountants are included in each Fund's December 31,
1996 Annual Report to shareholders, which are incorporated by
reference into this SAI. The Statement of Assets and
Liabilities for each of Ivy Asia Pacific Fund, Ivy
Global Natural Resources Fund and Ivy International
Small Companies Fund as of December 10, 1996 and the
Notes thereto are attached hereto as Appendix B.

APPENDIX A

DESCRIPTION OF STANDARD & POOR'S CORPORATION
("S&P") AND MOODY'S INVESTORS SERVICE, INC.
("MOODY'S") CORPORATE BOND AND
COMMERCIAL PAPER RATINGS

[From "Moody's Bond Record," November 1994 Issue
(Moody's Investors Service, New York, 1994), and
"Standard & Poor's Municipal Ratings Handbook," October
1994 Issue (McGraw Hill, New York, 1994).]

MOODY'S:

poor prospects of ever attaining any real investment
standing.

S&P:

(b) COMMERCIAL PAPER. An S&P commercial paper
rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of
no more than 365 days.

Issues rated B are regarded as having only
speculative capacity for timely payment. The C rating
is assigned to short- term debt obligations with a
doubtful capacity for payment.

APPENDIX B

STATEMENT OF ASSETS AND LIABILITIES
AS OF DECEMBER 10, 1996
AND
REPORT OF INDEPENDENT ACCOUNTANTS

_________________________________________________________________
IVY ASIA PACIFIC FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 10, 1996

_________________________________________________________________

ASSETS
Cash . . . . . . . . . . . . . . . . $ 30
Deferred organization expenses . . . 13,732
Prepaid Blue Sky Fees . . . . . . . . 31,434
------- Total
Assets . . . . . . . . . . . 45,196
------- LIABILITIES
Due to affiliate . . . . . . . . . . 45,166
-------
NET ASSETS . . . . . . . . . . . . . . $ 30
=======
CLASS A:
Net asset value and
redemption price per share
($10 / 1 share outstanding) . . . $ 10.00
=======
Maximum offering price
per share
($10.00 x 100 / 94.25)* . . . . . $ 10.61
=======
CLASS B:
Net asset value and
offering price per share
($10 / 1 share outstanding)** . . $ 10.00
=======
CLASS C:
Net asset value and
offering price per share
($10 / 1 share outstanding)** . . $ 10.00
=======
NET ASSETS CONSISTS OF:
Capital paid-in . . . . . . . . . . . $ 30
=======

* On sales of more than $50,000 the offering price
is reduced. ** Redemption price per share is equal to
the net asset value per share less any applicable
contingent deferred sales charge, up to a maximum
of 5%.

(See Notes to Financial Statements)

_________________________________________________________________
IVY ASIA PACIFIC FUND
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 10, 1996

_________________________________________________________________

1. ORGANIZATION: Ivy Asia Pacific Fund is a diversified
series of shares of Ivy Fund. The shares of beneficial
interest are assigned no par value and an unlimited
number of shares of Class A, Class B and Class C are
authorized. Ivy Fund was organized as a Massachusetts
business trust under a Declaration of Trust dated
December 21, 1983 and is registered under the Investment Company
Act of 1940, as amended, as an open-end management
investment company.

The Fund will commence operations on January 1, 1997.
As of the date of this report, operations have been
limited to organizational matters and the issuance of
initial shares to Mackenzie Investment Management Inc.
(MIMI).

2. ORGANIZATION COSTS AND PREPAID BLUE SKY FEES:
Organization expenses are being amortized over a five
year period from January 1, 1997, the commencement date
of operations. Blue sky fees are being amortized over
a one year period from Januray 1, 1997. Such
organizational expenses and blue sky fees have been paid by
MIMI and will be reimbursed by the Fund.

3. TRANSACTIONS WITH AFFILIATES: Ivy Management, Inc.
(IMI), a wholly owned subsidiary of MIMI, is the
Manager and Investment Adviser of the Fund. Currently,
IMI voluntarily limits the Fund's total operating
expenses (excluding taxes, 12b-1 fees, brokerage
commissions, interest, litigation and indemnification
expenses, and any other extraordinary expenses) to an annual rate
of 1.95% of its average net assets.

MIMI provides certain administrative, accounting and
pricing services for the Fund.

Ivy Mackenzie Distributors, Inc. (IMDI), a wholly owned
subsidiary of MIMI, is the underwriter and distributor
of the Fund's shares, and as such, purchases shares
from the Fund at net asset value to settle orders from
investment dealers.

Ivy Mackenzie Services Corp. (IMSC), a wholly owned
subsidiary of MIMI, is the transfer and shareholder
servicing agent for the Fund.

Officers of Ivy Fund are officers and/or employees of
MIMI, IMI, IMDI and IMSC. Such individuals are not
compensated by the Fund for services in their capacity
as officers of Ivy Fund. Trustees of Ivy Fund who are
not affiliated with MIMI or IMI receive compensation
from the Fund.

STATEMENT OF ASSETS AND LIABILITIES
AS OF DECEMBER 10, 1996
AND REPORT OF INDEPENDENT ACCOUNTANTS

_________________________________________________________________
IVY GLOBAL NATURAL RESOURCES FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 10, 1996

_________________________________________________________________

ASSETS
Cash . . . . . . . . . . . . . . . . $ 30
Deferred Organization Expenses . . . 13,732
Prepaid Blue Sky Fees . . . . . . . . 31,436
------- Total
Assets . . . . . . . . . . . 45,198
------- LIABILITIES
Due to affiliate . . . . . . . . . . 45,168
-------
NET ASSETS . . . . . . . . . . . . . . $ 30
=======
CLASS A:
Net asset value and
redemption price per share
($10 / 1 share outstanding) . . . $ 10.00
=======
Maximum offering price
per share
($10.00 x 100 / 94.25)* . . . . . $ 10.61
=======
CLASS B:
Net asset value and
offering price per share
($10 / 1 share outstanding)** . . $ 10.00
=======
CLASS C:
Net asset value and
offering price per share
($10 / 1 share outstanding)** . . $ 10.00
=======
NET ASSETS CONSISTS OF:
Capital paid-in . . . . . . . . . . . $ 30
=======

(See Notes to Financial Statements)

_________________________________________________________________
IVY GLOBAL NATURAL RESOURCES FUND
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 10, 1996

_________________________________________________________________

1. ORGANIZATION: Ivy Global Natural Resources Fund is a
diversified series of shares of Ivy Fund. The shares of
beneficial interest are assigned no par value and an
unlimited number of shares of Class A, Class B and
Class C are authorized. Ivy Fund was organized as a
Massachusetts business trust under a Declaration of
Trust dated December 21, 1983 and is registered under
the Investment Company Act of 1940, as amended, as an open-
end management investment company.

MIMI provides certain administrative, accounting and
pricing services for the Fund.

Ivy Mackenzie Services Corp. (IMSC), a wholly owned
subsidiary of MIMI, is the transfer and shareholder
servicing agent for the Fund.

STATEMENT OF ASSETS AND LIABILITIES
AS OF DECEMBER 10, 1996
AND REPORT OF INDEPENDENT ACCOUNTANTS

_________________________________________________________________
IVY INTERNATIONAL SMALL COMPANIES FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 10, 1996

_________________________________________________________________
ASSETS
Cash . . . . . . . . . . . . . . . . $ 40
Deferred organization expenses . . . 13,755
Prepaid Blue Sky Fees . . . . . . . . 32,020
------- Total
Assets . . . . . . . . . . . 45,815
------- LIABILITIES
Due to affiliate . . . . . . . . . . 45,775
-------
NET ASSETS . . . . . . . . . . . . . . $ 40
======= CLASS A:
Net asset value and
redemption price per share
($10 / 1 share outstanding) . . . $ 10.00
=======
Maximum offering price
per share
($10.00 x 100 / 94.25)* . . . . . $ 10.61
=======
CLASS B:
Net asset value and
offering price per share
($10 / 1 share outstanding)** . . $ 10.00
=======
CLASS C:
Net asset value and
offering price per share
($10 / 1 share outstanding)** . . $ 10.00
=======
CLASS I:
Net asset value, offering price,
and redemption price per share
($10 / 1 share outstanding) . . . $ 10.00
=======
NET ASSETS CONSISTS OF:
Capital paid-in . . . . . . . . . . . $ 40
=======
* On sales of more than $50,000 the offering price is reduced.
** Redemption price per share is equal to the net asset
value per share less any applicable contingent
deferred sales charge, up to a maximum of 5%.

(See Notes to Financial Statements)

_________________________________________________________________
IVY INTERNATIONAL SMALL COMPANIES FUND
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 10, 1996

_________________________________________________________________

1. ORGANIZATION: Ivy International Small Companies Fund
is a diversified series of shares of Ivy Fund. The
shares of beneficial interest are assigned no par value
and an unlimited number of shares of Class A, Class B,
Class C and Class I are authorized. Ivy Fund was
organized as a Massachusetts business trust under a
Declaration of Trust dated December 21, 1983 and is
registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company.

MIMI provides certain administrative, accounting and
pricing services for the Fund.

Ivy Mackenzie Services Corp. (IMSC), a wholly owned
subsidiary of MIMI, is the transfer and shareholder
servicing agent for the Fund.

APPENDIX C

SELECTED ECONOMIC AND MARKET DATA FOR
ASIA PACIFIC AND CHINA REGION COUNTRIES

The information set forth in this Appendix has
been extracted from various government and private
publications. Ivy China Region Fund and the Trust's
Board of Trustees make no representation as to the
accuracy of such information, nor has the Fund or the
Trust's Board of Trustees attempted to verify it.
The China Region, one of the fastest growing areas
of the world, is diverse, dynamic and evolving. In
terms of population, this region is almost six times
the size of the United States.

Countries in this region are at various stages of
economic development. Hong Kong and Singapore are at a
more advanced stage of economic growth while countries
such as Indonesia and China are at the early stages of
economic development. GDP per capita data presented
below illustrates this point. The following table shows
the GDP, population and per capita GDP of the China Region
countries and, for comparison purposes, the United States.

1996

GDP ($US POPULATION
PER CAPITA BILLIONS)
(MILLIONS) GDP ($US) ---------
--------- --------- Hong Kong 144.1
5.7 25,281 Korea 455.6
43.4 10,498 Singapore 81.5
2.7 30,185 Taiwan 237.7
20.6 11,539 Thailand 166.5
54.5 30,055 Malaysia 84.1
17.6 4,778 Indonesia 170.7
179.4 952 Philippines 74.1
60.6 1,223 China 672.4
1,160.04 580 China Region 2,086.7
1,544.54 1,351 USA 7,080.0
248.7 28,468
Source: International Marketing Data and Statistics,
21st Ed. (Euromonitor 1997).

Total GDP for the China Region was about $2.1
billion in 1995, approximately twenty nine percent of
the GDP of the United States. Year over year growth in
GDP for the China Region is significant, averaging
14.13% for the five-year period 1991-1995 compared with
only 5.10% for the United States for the same period.
The following tables show the annual change in GDP and
inflation, as measured by the Consumer Price Indexes (CPI), in
1991-1995 and the average for the five-year period
1991-1995.

CHANGE IN GROSS DOMESTIC PRODUCT

AVERAGE 1991 1992 1993 1994
1995 1991-95 ----- ----- -----
- ----- ------ ------- Hong Kong 14.76% 16.58%
15.17% 13.55% 9.33% 13.88% Korea 20.16%
11.43% 11.13% 14.17% 15.18% 14.41% Singapore
11.88% 7.12% 14.52% 14.04% 9.63% 11.44% Taiwan
11.69% 10.95% 10.06% 3.14% 3.91% 7.95%
Thailand 14.97% 12.47% 11.89% 13.60% 15.21% 13.63%
Malaysia 11.85% 14.07% 10.32% 13.68% 13.83%
12.75% Indonesia 16.29% 14.26% 26.89% 14.99%
1.01% 14.69% Philippines 15.86% 8.30% 9.13%
14.84% 12.48% 12.12% China 14.20% 18.97%
30.64% 39.58% 28.29% 26.34% United States 3.63%
5.19% 5.37% 6.23% 5.07% 5.10%

Sources: International Marketing Data and Statistics,
21ST Ed. (Euromonitor 1997).

CHANGE IN CONSUMER PRICE INDEXES

AVERAGE 1991 1992 1993 1994
1995 1991-95 ----- ----- -----
- ----- ----- ------- Hong Kong 11.6% 9.3%
8.6% 8.1% 8.7% 9.26% Korea 9.7%
6.2% 4.8% 6.3% 4.5% 6.30% Singapore
3.5% 2.3% 2.4% 3.0% 1.7% 2.58% Taiwan
3.6% 4.5% 2.9% 4.5% 3.7% 3.84%
Thailand 5.7% 4.1% 3.6% 5.1% 7.3% 5.16%
Malaysia 4.4% 4.8% 3.4% 3.7% 5.3% 4.32%
Indonesia 9.2% 7.5% 9.7% 8.5% 9.4%
8.86% Philippines 18.7% 8.9% 7.6% 9.1%
11.2% 11.10% China 5.1% 6.7% 9.1%
24.2% 16.9% 12.40% United States 4.2% 3.0%
3.0% 2.6% 2.8% 3.12%

Sources: OECD Economic Outlook, June 1996, Vol. 59; Key
Indicators and Developing Asian & Pacific Countries,
1994, Volume XXV; Emerging Stock Market Factbook 1996.

As the economic in the China Region have
experienced different levels of growth, so too have
their stock markets. The following tables show the
capitalization of the stock markets, and the changes in
stock prices as measured by the local stock indexes.

STOCK MARKET CAPITALIZATION ($US MILLIONS)

1991 1992 1993 1994
1995 ------- ------- ------- -----
- -- ------- China 2,028 18,255 40,567
43,521 42,055 Hong Kong 121,689 170,793
381,459 267,331 301,065 Korea 96,373
107,448 139,420 191,778 181,955 Singapore
58,520 61,180 147,810 177,670 203,230 Taiwan
124,864 101,124 195,198 247,325 187,206

Thailand 35,815 58,259 130,510 131,479
141,507 Malaysia 58,627 94,004 220,328
199,276 222,729 Indonesia 6,823 12,038
32,953 47,241 66,585 Philippines 10,197
13,794 40,327 55,519 58,859

Sources: World Stock Exchange Factbook, 1997; Emerging
Stock Markets Factbook, 1996; Hong Kong Stock Exchange
Market.
ANNUAL PERCENTAGE CHANGES IN LOCAL
STOCK MARKET INDEXES

1991 1992 1993 1994
1995 ------ ------ ------ -----
- - ------ China 192.8% -12.9% 6.8%
- -22.30% -14.3% Hong Kong -42.0% -28.3%
- -115.7% 31.1 -23.0% Korea -12.2%
11.0% 27.7% 18.6% -14.1% Singapore
25.1% -2.4% 59.2% -15.1% 4.09% Taiwan
1.6% -26.6% 79.8% 17.4% -27.4%
Thailand 16.1% 25.6% 88.4% -19.2% -5.8%
Malaysia 9.9% 15.8% 98.0% -23.8% 2.5%
Indonesia -40.8% 10.9% 114.6% -20.2%
9.4% Philippines 76.7% 9.1% 154.4%
- -12.8% -6.9%

Sources: Emerging Stock Market Factbook, 1996; Hong
Kong Stock Exchange.

Equity valuations in the China Region, as measured
by price/earnings ratios, also vary from country to
country according to economic growth forecasts,
corporate earnings growth forecasts, the outlook for
inflation, exchange rates and overall investor
sentiment.

PRICE/EARNINGS RATIOS

1991 1992 1993 1994
1995 ----- ----- ----- -----
----- Hong Kong 13.8 12.9 16.7
13.1 13.7 Korea 21.3 21.4 25.1
34.5 19.8 Singapore 19.5 19.2
24.7 30.4 23.3 Taiwan 22.3 16.6
34.7 36.8 21.4 Thailand 12.0
13.9 27.5 21.2 21.7 Malaysia 21.3
21.8 43.5 29.0 25.1 Indonesia
11.6 12.2 28.9 20.2 19.8
Philippines 11.3 14.1 38.8 30.8 19.0

Sources: World Stock Exchange Factbook, 1996; Emerging
Stock Market Factbook, 1996.

The following table shows changes in the exchange
rate of the currency of each China Region country
relative to the U.S. dollar for the years ended
December 31, 1991-1995.
CURRENCY MOVEMENTS VERSUS US DOLLAR (%
CHANGE)

YEAR ENDED DECEMBER 31,
--------------------------------------------------
- ------ 1991 1992 1993
1994 1995 ------ ----- --
- ---- ------ ----- Hong Kong 0.23%
0.39% 0.06% 0.13% 0.13% Korea
- -6.19% -3.91% -2.50% 2.43% 0.16% Singapore
6.53% -0.88% 2.24% 9.16% 3.18%
Taiwan 4.24% 1.29% -4.73% 0.27% -3.8%
Thailand 0.99% -1.76% 0.04% 1.47%
- -0.34% Malaysia -0.82% 3.88% 2.98%
5.18% 0.57% Indonesia -5.03% -4.00%
- -1.92% -4.52% -4.03% Philippines 3.86%
2.10% -5.47% 9.63% -7.5% China (Official)
- -4.06% -5.84% -0.84% -45.6% 1.53%

Sources: International Financial Statistics, Volume L,
Number 4, April 1997; Emerging Stock Market Factbook,
1996.

IVY INTERNATIONAL BOND FUND

a series of

IVY FUND
Via Mizner Financial Plaza, Suite 300
700 South Federal Highway
Boca Raton, Florida 33432

STATEMENT OF ADDITIONAL INFORMATION

April 30, 1997

_________________________________________________________________

Ivy Fund (the "Trust") is an open-end management
investment company that currently consists of sixteen
fully managed portfolios, each of which (except for the
Fund and Ivy Latin America Strategy Fund) is
diversified. Each of the Fund and Ivy Latin America
Strategy Fund is a non-diversified portfolio. This
Statement of Additional Information ("SAI") describes one of the
portfolios, Ivy International Bond Fund (the "Fund").
The other fifteen portfolios of the Trust are described
in separate Statements of Additional Information.

This SAI is not a prospectus and should be read in
conjunction with the prospectus for the Fund dated April
30, 1997 (the "Prospectus"), which is available upon
request and without charge from the Trust at the
Distributor's address and telephone number listed
below.

INVESTMENT MANAGER

Ivy Management, Inc. ("IMI")
Via Mizner Financial Plaza, Suite 300
700 South Federal Highway
Boca Raton, Florida 33432
Telephone: (800) 777-6472

DISTRIBUTOR

Ivy Mackenzie Distributors, Inc.
Via Mizner Financial Plaza, Suite 300
700 South Federal Highway
Boca Raton, Florida 33432
Telephone: (800) 456-5111

TABLE OF CONTENTS

PAGE

INVESTMENT OBJECTIVES AND POLICIES . . . . . . . .
. . . 1 AMERICAN DEPOSITORY RECEIPTS (ADRS) . .
. . . . . . . . 1 FOREIGN SECURITIES . . . . . .
. . . . . . . . . . . . . 1 FOREIGN CURRENCIES .
. . . . . . . . . . . . . . . . . . 1 FORWARD
FOREIGN CURRENCY CONTRACTS . . . . . . . . . . . 2
HIGH YIELD BONDS . . . . . . . . . . . . . . . . . . . . 2
WHEN-ISSUED PURCHASES AND FIRM COMMITMENT AGREEMENTS .
. 3 ZERO COUPON BONDS . . . . . . . . . . . . .
. . . . . . 4 RESTRICTED AND ILLIQUID SECURITIES
. . . . . . . . . . . 4 OPTIONS TRANSACTIONS . .
. . . . . . . . . . . . . . . . 4 GENERAL .
. . . . . . . . . . . . . . . . . . . . . 4
WRITING CALL OPTIONS ON INDIVIDUAL SECURITIES . . . 5
RISKS OF OPTIONS TRANSACTIONS . . . . . . . . . . . 5
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS .
. . 6 GENERAL . . . . . . . . . . . . . . .
. . . . . . . 6 INTEREST RATE FUTURES
CONTRACTS . . . . . . . . . . 7 OPTIONS ON
INTEREST RATE FUTURES CONTRACTS . . . . 8
FOREIGN CURRENCY FUTURES CONTRACTS AND RELATED
OPTIONS . . . . . . . . . . . . . . . . . . . 8
RISKS ASSOCIATED WITH FUTURES AND RELATED OPTIONS . 9
COMBINED TRANSACTIONS . . . . . . . . . . . . .
. . 9 INVESTMENT RESTRICTIONS . . . . . . . . .
. . . . . . . 10 ADDITIONAL RESTRICTIONS . . . .
. . . . . . . . . . . . 11 ADDITIONAL RIGHTS AND
PRIVILEGES . . . . . . . . . . . . 12 AUTOMATIC
INVESTMENT METHOD . . . . . . . . . . . . . . 12
EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . 12
INITIAL SALES CHARGE SHARES . . . . . . . . . . . .
12 CONTINGENT DEFERRED SALES CHARGE SHARES.
CLASS A . 13 CLASS B . . . . . . . . . . .
. . . . . . . . . . . 13 LETTER OF INTENT . . . .
. . . . . . . . . . . . . . . . 15 RETIREMENT
PLANS . . . . . . . . . . . . . . . . . . . . 15
INDIVIDUAL RETIREMENT ACCOUNTS . . . . . . . . . . 16
QUALIFIED PLANS . . . . . . . . . . . . . . . . . .
17 DEFERRED COMPENSATION FOR PUBLIC SCHOOLS
AND CHARITABLE ORGANIZATIONS ("403(B)(7)
ACCOUNT") . . . . . . . . . . . . . . .
. . . 17 SIMPLIFIED EMPLOYEE PENSION ("SEP")
IRAS . . . . . 18 REINVESTMENT PRIVILEGE . . . .
. . . . . . . . . . . . . 18 RIGHTS OF
ACCUMULATION . . . . . . . . . . . . . . . . . 18
SYSTEMATIC WITHDRAWAL PLAN . . . . . . . . . . . . . . . 19
BROKERAGE ALLOCATION . . . . . . . . . . . . . . . . . .
19 TRUSTEES AND OFFICERS . . . . . . . . . . . .
. . . . . 21 PERSONNEL INVESTMENTS BY EMPLOYEES
OF IMI . . . . . . . 23 COMPENSATION TABLE . . .
. . . . . . . . . . . . . . . . 24 INVESTMENT
ADVISORY AND OTHER SERVICES . . . . . . . . . 25
BUSINESS MANAGEMENT AND INVESTMENT ADVISORY SERVICES . . 25
DISTRIBUTION SERVICES . . . . . . . . . . . . . . . . .
26 CUSTODIAN . . . . . . . . . . . . . . . . . .
. . . . . 28 FUND ACCOUNTING SERVICES . . . . . .
. . . . . . . . . . 28 TRANSFER AGENT AND
DIVIDEND PAYING AGENT . . . . . . . . 29

ADMINISTRATOR . . . . . . . . . . . . . . . . . .
. . . 29 AUDITORS . . . . . . . . . . . . . . . .
. . . . . . . . 29 CAPITALIZATION AND VOTING
RIGHTS . . . . . . . . . . . . 29 NET ASSET VALUE
. . . . . . . . . . . . . . . . . . . . 30
PORTFOLIO TURNOVER . . . . . . . . . . . . . . . . . . . 31
REDEMPTIONS . . . . . . . . . . . . . . . . . . . . . .
32 CONVERSION OF CLASS B SHARES . . . . . . . . .
. . . . . 33 TAXATION . . . . . . . . . . . . . .
. . . . . . . . . . 33 GENERAL . . . . . . . . .
. . . . . . . . . . . . . . . 33 DISTRIBUTORS . .
. . . . . . . . . . . . . . . . . . . . 34
DISPOSITION OF SHARES . . . . . . . . . . . . . . . . . 34
HEDGING TRANSACTIONS . . . . . . . . . . . . . . . . . .
35 CURRENCY FLUCTUATIONS --SECTION 988" GAINS OR
LOSSES . . 36 DISCOUNT . . . . . . . . . . . . .
. . . . . . . . . . . 36 FOREIGN WITHHOLDING
TAXES . . . . . . . . . . . . . . . 36
INVESTMENT IN PASSIVE FOREIGN INVESTMENT COMPANIES . . . 37
BACKUP WITHHOLDING . . . . . . . . . . . . . . . . . . .
37 OTHER TAXATION . . . . . . . . . . . . . . . .
. . . . . 38 CALCULATION OF AVERAGE ANNUAL TOTAL
RETURN . . . . . . . 38 AVERAGE ANNUAL TOTAL
RETURN QUOTATIONS . . . . . . . . . 38 OTHER
QUOTATIONS, COMPARISONS AND GENERAL INFORMATION . 39
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . 39
APPENDIX A
DESCRIPTION OF STANDARD & POOR'S CORPORATION
("S&P") AND MOODY'S INVESTORS SERVICE, INC.
("MOODY'S") CORPORATE BOND AND COMMERCIAL PAPER
RATINGS . . . . . . 40

INVESTMENT OBJECTIVES AND POLICIES

The Fund has its own investment objectives and
policies, which are described in the Prospectus under
the captions "Investment Objective and Policies" and
"Risk Factors and Investment Techniques." Additional
information regarding the characteristics and risks
associated with the Fund's investment techniques is set
forth below.

U.S. GOVERNMENT SECURITIES

Mortgage-backed securities are securities
representing part ownership of a pool of mortgage
loans. For example, GNMA certificates are such
securities in which the timely payment of principal and
interest is guaranteed by the full faith and credit of
the U.S. Government. Although the mortgage loans in the pool
will have maturities of up to 30 years, the actual average
life of the loans typically will be substantially less
because the mortgages will be subject to principal
amortization and may be prepaid prior to maturity.
Prepayment rates vary widely and may be affected by
changes in market interest rates. In periods of
falling interest rates, the rate of prepayment tends to increase,
thereby shortening the actual average life of the
security. Conversely, rising interest rates tend to
decrease the rate of prepayments, thereby lengthening
the actual average life of the security (and increasing
the security's price volatility). Accordingly, it is
not possible to predict accurately the average life of
a particular pool. Reinvestment of prepayment may occur
at higher or lower rates than the original yield on the
certificates. Due to the prepayment feature and the need to
reinvest prepayments of principal at current rates, mortgage-
backed securities can be less effective than typical
bonds of similar maturities at "locking in" yields
during periods of declining interest rates. Such
securities may appreciate or decline in market value
during periods of declining or rising interest rates,
respectively.

Securities issued by U.S. Government
instrumentalities and certain federal agencies are
neither direct obligations of nor guaranteed by the
U.S. Treasury; however, they involve Federal

sponsorship in one way or another. Some are backed by
specific types of collateral, some are supported by the
issuer's right to borrow from the Treasury, some are
supported by the discretionary authority of the
Treasury to purchase certain obligations of the issuer,
others are supported only by the credit of the issuing
government agency or instrumentality. These agencies and
instrumentalities include, but are not limited to, Federal Land
Banks, Farmers Home Administration, Central Bank for
Cooperatives, Federal Intermediate Credit Banks, Federal Home
Loan Banks, Federal National Mortgage Association,
Federal Home Loan Mortgage Association, and Student
Loan Marketing Association.

DEPOSITORY RECEIPTS

American Depository Receipts ("ADRs"), Global
Depository Receipts ("GDRs"), American Depository
Shares ("ADSs"), and Global Depository Shares ("GDSs")
are depository instruments, the issuance of which is
typically administered by a U.S. or foreign bank or
trust company. These instruments evidence ownership of
underlying securities issued by a U.S. or foreign corporation.
Unsponsored programs are organized independently and
without the cooperation of the issuer of the underlying
securities. As a result, available information
concerning the issuer may not be as current as for
sponsored depository instruments and their prices may
be more volatile than if they were sponsored by the issuers
of the underlying securities.

FOREIGN SECURITIES

Investors should recognize that investing in
foreign securities involves certain special
considerations, including those set forth below and in
the Fund's Prospectus under "Investing In International
Bond Markets" and "Special Risk Considerations," which
are not typically associated with investing in United
States securities and which may affect the Fund's
performance favorably or unfavorably.

Foreign stock markets have different clearance and
settlement procedures and in certain markets there have
been times when settlements have been unable to keep
pace with the volume of securities transactions making
it difficult to conduct such transactions. Delays in
settlement could result in temporary periods when
assets of the Fund are uninvested and no return is
earned thereon. The inability of the Fund to make
intended security purchases due to settlement problems could
cause the Fund to miss attractive investment opportunities.
The inability to dispose of portfolio securities due to
settlement problems could result either in losses to
the Fund due to subsequent declines in the value of the
portfolio security or, if the Fund has entered into a
contract to sell the security, in possible liability to
the purchaser. Fixed commissions on some foreign
securities exchanges are generally higher than negotiated
commissions on U.S. exchanges, although IMI will endeavor to

achieve the most favorable net results on each Fund's
portfolio transactions. Further, the Fund may
encounter difficulties or be unable to pursue legal
remedies and obtain judgment in foreign courts. It may
be more difficult for the Fund's agents to keep
currently informed about corporate actions such as stock
dividends or other matters which may affect the prices of
portfolio securities. Communications between the United States
and foreign countries may be less reliable than within
the United States, thus increasing the risk of delayed
settlements of portfolio transactions or loss of
certificates for portfolio securities. Moreover,
individual foreign economies may differ favorably or
unfavorably from the United States economy in such
respects as growth of gross national product, rate of inflation,
capital reinvestment, resource self-sufficiency and
balance of payments position. IMI seeks to mitigate
the risks to the Fund associated with the foregoing
considerations through investment variation and
continuous professional management.

FOREIGN CURRENCIES

Investment in foreign securities usually will
involve currencies of foreign countries. Moreover, the
Fund may temporarily hold funds in bank deposits in
foreign currencies during the completion of investment
programs and may purchase forward foreign currency
contracts. Because of these factors, the value of the
assets of the Fund as measured in U.S. dollars may be
affected favorably or unfavorably by changes in foreign
currency exchange rates and exchange control regulations, and the
Fund may incur costs in connection with conversions
between various currencies. Although the Fund's
custodian values the Fund's assets daily in terms of
U.S. dollars, the Fund does not intend to convert its
holdings of foreign currencies into U.S. dollars on a
daily basis. The Fund will do so from time to time,
and investors should be aware of the costs of currency
conversion. Although foreign exchange dealers do not charge a
fee for conversion, they do realize a profit based on the
difference (the "spread") between the prices at which they
are buying and selling various currencies. Thus, a
dealer may offer to sell a foreign currency to the Fund
at one rate, while offering a lesser rate of exchange
should the Fund desire to resell that currency to the
dealer. The Fund will conduct its foreign currency
exchange transactions either on a spot (i.e., cash)
basis at the spot rate prevailing in the foreign currency
exchange market, or through entering into forward contracts to
purchase or sell foreign currencies.

Because the Fund normally will be invested in both
U.S. and foreign securities markets, changes in the
Fund's share price may have a low correlation with
movements in the U.S. markets. The Fund's share price
will reflect the movements of both the different stock
and bond markets in which it is invested and of the
currencies in which the investments are denominated; the
strength or weakness of the U.S. dollar against foreign
currencies may account for part of the Fund's investment

performance. U.S. and foreign securities markets do
not always move in step with each other, and the total
returns from different markets may vary significantly.

FORWARD FOREIGN CURRENCY CONTRACTS

The Fund may enter into forward foreign currency
exchange contracts in order to protect against
uncertainty in the level of future foreign exchange
rates in the purchase and sale of securities, but not
for speculative purposes. A forward foreign currency
exchange contract involves an obligation to purchase or
sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract agreed upon
by the parties, at a price set at the time of the
contract. These contracts may be bought or sold to
protect the Fund against a possible loss resulting from
an adverse change in the relation- ship between foreign
currencies and the U.S. dollar. Although such
contracts are intended to minimize the risk of loss due to a
decline in the value of the hedged currencies, at the same
time, they tend to limit any potential gain that might
result should the value of such currencies increase.

The Fund will not enter into forward contracts or
maintain a net exposure to such contracts where the
consummation of the contract would obligate the Fund to
deliver an amount of currency in excess of the value of
the Fund's portfolio securities or other assets
denominated in that currency. Further, the Fund
generally will not enter into a forward contract with a term of
greater than one year.

The Fund will hold cash or liquid securities in a
segregated account with its custodian in an amount
equal (on a daily marked- to-market basis) to the amount
of the commitments under these contracts. At the
maturity of a forward contract, the Fund may either
accept or make delivery of the currency specified in the
contract, or, prior to maturity, enter into a closing purchase
transaction involving the purchase or sale of an offsetting
contract. Closing purchase transactions with respect to
forward contracts are usually effected with the
currency trader who is a party to the original forward
contract.

DEBT SECURITIES, IN GENERAL

obligations on interest or principal payments at the
time called for by the debt instrument.

LOW-RATED DEBT SECURITIES

The Fund may invest in corporate debt securities
rated Ba or lower by Moody's, or BB or lower by S&P.
The Fund will not, however, invest in securities that,
at the time of investment, are rated lower than C by
either Moody's or S&P. Securities rated lower than Baa
or BBB (and comparable unrated securities) are commonly
referred to as "high yield" or "junk" bonds and are
considered to be predominantly speculative with respect to the
issuer's continuing ability to meet principal and interest
payments. The lower the ratings of corporate debt
securities, the more their risks render them like
equity securities. (See Appendix A for a more complete
description of the ratings assigned by Moody's and S&P
and their respective
characteristics.)

While IMI may refer to ratings issued by
established credit rating agencies, it is not IMI's
policy to rely exclusively on such ratings, but rather
to supplement such ratings with its own independent and
ongoing review of credit quality. The Fund's
achievement of its investment objective may, to the extent of its
investment in low-rated debt securities, be more
dependent upon IMI's credit analysis than would be the
case if the Funds were investing in higher quality
bonds. Should the rating of a portfolio security be
downgraded, IMI will determine whether it is in the
relevant Fund's best interest to retain or dispose of
the security. However, should any individual bond held by the
Fund be downgraded below a rating of C, IMI currently
intends to dispose of such bond based on then existing
market conditions.

The secondary market on which low-rated debt
securities are traded may be less liquid than the
market for higher grade bonds. Less liquidity in the
secondary trading market could adversely affect the
price at which the Fund could sell a low-rated debt
securities, and cause large fluctuations in the daily net asset
value of the Fund's shares. Adverse publicity and
investor perceptions, whether or not based on
fundamental analysis, may decrease the value and
liquidity of low-rated debt securities, especially in a
thinly traded market. When secondary markets for high
yield securities become relatively less liquid, it may be
more difficult to value the securities, requiring additional
research and elements of judgment. Prices for low-rated
debt securities may be affected by legislative and
regulatory developments. (For example, Federal rules
require savings and loan institutions to reduce
gradually their holdings of this type of security).

WHEN-ISSUED PURCHASES AND FIRM COMMITMENT AGREEMENTS

When the Fund purchases new issues of securities
on a when- issued basis, the Fund's custodian will
establish a segregated

account for the Fund consisting of cash or liquid
securities equal to the amount of the commitment. If
the value of securities in the account should decline,
additional cash or securities will be placed in the
account so that the market value of the account will
equal the amount of such commitments by the Fund on a
daily basis.

Securities purchased on a when-issued basis and
the securities held in the Fund's portfolio are subject
to changes in market value based upon various factors
including changes in the level of market interest
rates. Generally, the value of such securities will
fluctuate inversely to changes in interest rates, i.e.,
they will appreciate in value when market interest rates
decline and decrease in value when market interest rates rise.
For this reason, placing securities rather than cash in
the segregated account may have a leveraging effect on
the Fund's net assets. That is, to the extent that the
Fund remains substantially fully invested in securities
at the same time that it has committed to purchase
securities on a when-issued basis, there will be
greater fluctuations in its net assets than if it had
set aside cash to satisfy its purchase commitment.

Upon the settlement date of the when-issued
securities, the Fund ordinarily will meet its
obligation to purchase the securities from available
cash flow, use of the cash (or liquidation of
securities) held in the segregated account or sale of
other securities. Although it would not normally expect to do
so, the Fund also may meet its obligation from the sale of
the when-issued securities themselves (which may have a
current market value greater or less than the Fund's
payment obligation). The sale of securities to meet
such obligations carries with it a greater potential
for the realization of capital gains.

The Fund may also enter into firm commitment
agreements for the purchase of securities at an agreed-
upon price on a specified future date. During the time
that the Fund is obligated to purchase such securities,
it will maintain in a segregated account with its
custodian cash or liquid securities of an aggregate
value sufficient to make payment for the
securities.

ZERO COUPON BONDS

The Fund may purchase zero coupon bonds in
accordance with its credit quality standards. Zero
coupon bonds are debt obligations issued without any
requirement for the periodic payment of interest. Zero
coupon bonds are issued at a significant discount from
face value. The discount approximates the total amount
of interest the bonds would accrue and compound over
the period until maturity at a rate of interest reflecting
the market rate at the time of issuance. The Fund, if it holds
zero coupon bonds in its portfolio, however, would
recognize income currently for Federal income tax
purposes in the amount of the unpaid, accrued interest
and generally would be required to

distribute dividends representing such income to
shareholders currently, even though funds representing
such income would not have been received by the Fund.
Cash to pay dividends representing unpaid, accrued
interest may be obtained from sales proceeds of
portfolio securities and Fund shares and from loan
proceeds. The potential sale of portfolio securities to pay cash
distributions from income earned on zero coupon bonds
may result in the Fund being forced to sell portfolio
securities at a time when the Fund might otherwise
choose not to sell these securities and when the Fund
might incur a capital loss on such sales. Because
interest on zero coupon obligations is not distributed to
the Fund on a current basis but is in effect compounded, the
value of the securities of this type is subject to greater
fluctuations in response to changing interest rates than
the value of debt obligations which distribute income
regularly.

RESTRICTED AND ILLIQUID SECURITIES

It is the Fund's policy that restricted
securities, including restricted securities offered and
sold to "qualified institutional buyers" under Rule
144A under the Securities Act of 1933, and any other
illiquid securities (including repurchase agreements of
more than seven days duration and other securities
which are not readily marketable) may not constitute, at the time
of purchase, more than 10% of the value of the Fund's
net assets. Issuers of restricted securities may not
be subject to the disclosure and other investor
protection requirements that would be applicable if
their securities were publicly traded. Restricted
securities may be sold only in privately negotiated
transactions or in a public offering with respect to which a
registration statement is in effect under the Securities Act
of 1933. Where a registration statement is required,
the Fund may be required to bear all or part of the
registration expenses. There may be a lapse of time
between the Fund's decision to sell a restricted or
illiquid security and the point at which the Fund is
permitted or able to sell such security. If, during such a
period, adverse market conditions were to develop, the Fund
might obtain a price less favorable than the price that
prevailed when it decided to sell. Since it is not
possible to predict with assurance that the market for
securities eligible for resale under Rule 144A will
continue to be liquid, the Fund will carefully monitor
each of its investments in these securities, focusing
on such important factors, among others, as valuation,
liquidity and availability of information. This investment
practice could have the effect of increasing the level of
illiquidity of the Fund to the extent that qualified
institutional buyers become for a time uninterested in purchasing
these restricted securities.

OPTIONS TRANSACTIONS

OPTIONS, IN GENERAL. The Fund may engage in
transactions in options on securities and stock indices
in accordance with the Fund's stated investment
objective and policies. The Fund may

also purchase put options on securities and may
purchase and sell (write) put and call options on stock
indices. Options on securities and stock indices
purchased or written by the Fund will be limited to
options traded on national securities exchanges, boards
of trade or similar entities, or in the OTC
markets.

The Fund will realize a gain (or a loss) on a
closing purchase transaction with respect to a call or
a put previously written by the Fund if the premium,
plus commission costs, paid by the Fund to purchase the
call or the put is less (or greater) than the premium,
less commission costs, received by the Fund on the sale
of the call or the put. A gain also will be realized if
a call or a put that the Fund has written lapses unexercised,
because the Fund would retain the premium. Any such gains
(or losses) are considered short-term capital gains (or
losses) for Federal income tax purposes. Net short-
term capital gains, when

distributed by the Fund, are taxable as ordinary
income. See "Taxation."

The Fund will realize a gain (or a loss) on a
closing sale transaction with respect to a call or a
put previously purchased by the Fund if the premium,
less commission costs, received by the Fund on the sale
of the call or the put is greater (or less) than the
premium, plus commission costs, paid by the Fund to
purchase the call or the put. If a put or a call expires
unexercised, it will become worthless on the expiration date,
and the Fund will realize a loss in the amount of the
premium paid, plus commission costs. Any such gain or
loss will be long-term or short-term gain or loss,
depending upon the Fund's holding period for the
option.

Exchange-traded options generally have
standardized terms and are issued by a regulated
clearing organization (such as the Options Clearing
Corporation), which, in effect, guarantees the
completion of every exchange-traded option transaction. In
contrast, the terms of OTC options are negotiated by the Fund
and its counterparty (usually a securities dealer or a
financial institution) with no clearing organization
guarantee. When the Fund purchases an OTC option, it
relies on the party from whom it has purchased the
option (the "counterparty") to make delivery of the
instrument underlying the option. If the counterparty fails
to do so, the Fund will lose any premium paid for the option,
as well as any expected benefit of the transaction.
Accordingly, IMI will assess the creditworthiness of
each counterparty to determine the likelihood that the
terms of the OTC option will be satisfied.

WRITING OPTIONS ON INDIVIDUAL SECURITIES. The
Fund may write (sell) covered call options on the
Fund's securities in an attempt to realize a greater
current return than would be realized on the securities
alone. The Fund may also write covered call options to
hedge a possible stock or bond market decline (only to
the extent of the premium paid to the Fund for the
options). In view of the investment objectives of the Fund,
the Fund generally would write call options only in
circumstances where the investment adviser to the Fund
does not anticipate significant appreciation of the
underlying security in the near future or has otherwise
determined to dispose of the security.

The Fund may write covered call options as
described in the Fund's Prospectus. A "covered" call
option means generally that so long as the Fund is
obligated as the writer of a call option, the Fund will
(i) own the underlying securities subject to the
option, or (ii) have the right to acquire the underlying
securities through immediate conversion or exchange of
convertible preferred stocks or convertible debt securities owned
by the Fund. Although the Fund receives premium income
from these activities, any appreciation realized on an
underlying security will be limited by the terms of the
call option. The

Fund may purchase call options on individual securities
only to effect a "closing purchase transaction."

As the writer of a call option, the Fund receives
a premium for undertaking the obligation to sell the
underlying security at a fixed price during the option
period, if the option is exercised. So long as the
Fund remains obligated as a writer of a call option, it
forgoes the opportunity to profit from increases in the
market price of the underlying security above the
exercise price of the option, except insofar as the premium
represents such a profit (and retains the risk of loss should
the value of the underlying security decline).

PURCHASING OPTIONS ON INDIVIDUAL SECURITIES. The
Fund may purchase a put option on an underlying
security owned by the Fund as a defensive technique in
order to protect against an anticipated decline in the
value of the security. The Fund, as the holder of the
put option, may sell the underlying security at the
exercise price regardless of any decline in its market price.
In order for a put option to be profitable, the market
price of the underlying security must decline
sufficiently below the exercise price to cover the
premium and transaction costs that the Fund must pay.
These costs will reduce any profit the Fund might have
realized had it sold the underlying security instead of
buying the put option. The premium paid for the put option
would reduce any capital gain otherwise available for
distribution when the security is eventually sold. The purchase
of put options will not be used by the Fund for leverage
purposes.

The Fund may also purchase a put option on an
underlying security that it owns and at the same time
write a call option on the same security with the same
exercise price and expiration date. Depending on
whether the underlying security appreciates or
depreciates in value, the Fund would sell the underlying
security for the exercise price either upon exercise of the call
option written by it or by exercising the put option held
by it. The Fund would enter into such transactions in
order to profit from the difference between the premium
received by the Fund for the writing of the call option
and the premium paid by the Fund for the purchase of
the put option, thereby increasing the Fund's current
return. The Fund may write (sell) put options on
individual securities only to effect a "closing sale
transaction."

PURCHASING AND WRITING OPTIONS ON SECURITIES
INDICES. The Fund may purchase and sell (write) put
and call options on securities indices. An index
assigns relative values to the securities included in
the index and the index fluctuates with changes in the
market values of the securities so included. Options
on indices are similar to options on individual
securities, except that, rather than giving the purchaser the
right to take delivery of an individual security at a
specified price, they give the purchaser the right to
receive cash. The

amount of cash is equal to the difference between the
closing price of the index and the exercise price of
the option, expressed in dollars, times a specified
multiple (the "multiplier"). The writer of the option
is obligated, in return for the premium received, to
make delivery of this amount.

When the Fund writes a call or put option on a
stock index, the option is "covered", in the case of a
call, or "secured", in the case of a put, if the Fund
maintains in a segregated account with the Custodian
cash or liquid securities equal to the contract value.
A call option is also covered if the Fund holds a call
on the same index as the call written where the exercise
price of the call held is (i) equal to or less than the exercise
price of the call written or (ii) greater than the
exercise price of the call written, provided that the
Fund maintains in a segregated account with the
Custodian the difference in cash or liquid securities.
A put option is also "secured" if the Fund holds a put
on the same index as the put written where the exercise
price of the put held is (i) equal to or greater than
the exercise price of the put written or (ii) less than the
exercise price of the put written, provided that the Fund
maintains in a segregated account with the Custodian the
difference in cash or liquid securities.

RISKS OF OPTIONS TRANSACTIONS. The purchase and
writing of options involves certain risks. During the
option period, the covered call writer has, in return
for the premium on the option, given up the opportunity
to profit from a price increase in the underlying
securities above the exercise price, but, as long as
its obligation as a writer continues, has retained the risk of
loss should the price of the underlying security decline.
The writer of an option has no control over the time
when it may be required to fulfill its obligation as a
writer of the option. Once an option writer has
received an exercise notice, it cannot effect a closing
purchase transaction in order to terminate its
obligation under the option and must deliver the underlying
securities (or cash in the case of an index option) at the
exercise price. If a put or call option purchased by the
Fund is not sold when it has remaining value, and if
the market price of the underlying security (or index),
in the case of a put, remains equal to or greater than
the exercise price or, in the case of a call, remains
less than or equal to the exercise price, the Fund will
lose its entire investment in the option. Also, where a put
or call option on a particular security (or index) is
purchased to hedge against price movements in a related
security (or securities), the price of the put or call
option may move more or

less than the price of the related security (or
securities). In this regard, there are differences
between the securities and options markets that could
result in an imperfect correlation between these
markets, causing a given transaction not to achieve its
objective.

There can be no assurance that a liquid market
will exist when the Fund seeks to close out an option
position. Furthermore, if trading restrictions or
suspensions are imposed on the options markets, the
Fund may be unable to close out a position. Finally,
trading could be interrupted, for example, because of
supply and demand imbalances arising from a lack of
either buyers or sellers, or the options exchange could suspend
trading after the price has risen or fallen more than the
maximum amount specified by the exchange. Closing
transactions can be made for OTC options only by
negotiating directly with the counterparty or by a
transaction in the secondary market, if any such market
exists. There is no assurance that the Fund will be
able to close out an OTC option position at a favorable price
prior to its expiration. In the event of insolvency of the
counterparty, the Fund might be unable to close out an
OTC option position at any time prior to its
expiration. Although the Fund may be able to offset to
some extent any adverse effects of being unable to
liquidate an option position, the Fund may experience
losses in some cases as a result of such inability.

The Fund's options activities also may have an
impact upon the level of its portfolio turnover and
brokerage commissions. See "Portfolio Turnover."

The Fund's success in using options techniques
depends, among other things, on IMI's ability to
predict accurately the direction and volatility of
price movements in the options and securities markets,
and to select the proper type, time and duration of
options.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS

GENERAL. The Fund may enter into futures
contracts and options on futures contracts for hedging
purposes. A futures contract provides for the future
sale by one party and purchase by another party of a
specified quantity of a commodity at a specified price
and time. When a purchase or sale of a futures
contract is made by the Fund, the Fund is required to deposit
with its custodian (or broker, if legally permitted) a
specified amount of cash or U.S. Government securities
("initial margin"). The margin required for a futures
contract is set by the exchange on which the contract
is traded and may be modified during the term of the
contract. The initial margin is in the nature of a
performance bond or good faith deposit on the futures contract
which is returned to the Fund upon termination of the
contract, assuming all contractual obligations have
been satisfied. A futures contract held by the Fund is
valued daily at the official settlement price of the
exchange on which it is traded. Each day

the Fund pays or receives cash, called "variation
margin," equal to the daily change in value of the
futures contract. This process is known as "marking
to market." Variation margin does not represent a
borrowing or loan by the Fund but is instead a
settlement between the Fund and the broker of the amount one
would owe the other if the futures contract expired. In
computing daily net asset value, the Fund will mark-to-market
its open futures position.

The Fund is also required to deposit and maintain
margin with respect to put and call options on futures
contracts written by it. Such margin deposits will
vary depending on the nature of the underlying futures
contract (and the related initial margin requirements),
the current market value of the option, and other
futures positions held by the Fund.

Although some futures contracts call for making or
taking delivery of the underlying securities, generally
these obligations are closed out prior to delivery of
offsetting purchases or sales of matching futures
contracts (same exchange, underlying security or index,
and delivery month). If an offsetting purchase price
is less than the original sale price, the Fund
generally realizes a capital gain, or if it is more, the
Fund generally realizes a capital loss. Conversely, if an
offsetting sale price is more than the original purchase price,
the Fund generally realizes a capital gain, or if it is
less, the Fund generally realizes a capital loss. The
transaction costs must also be included in these
calculations.

When purchasing a futures contract, the Fund will
maintain with its Custodian (and mark-to-market on a
daily basis) cash, U.S. Government securities, or other
high grade debt securities that, when added to the
amounts deposited with a futures commission merchant
("FCM") as margin, are equal to the market value of the
futures contract. Alternatively, the Fund may "cover"
its position by purchasing a put option on the same
futures contract with a strike price as high as or higher than
the price of the contract held by the Fund.

When selling a futures contact, the Fund will
maintain with its custodian in a segregated account
(and mark-to-market on a daily basis) cash or liquid
securities that, when added to the amounts deposited
with an FCM as margin, are equal to the market value of
the instruments underlying the contract. Alternatively,
the Fund may "cover" its position by owning the instruments
underlying the contract (or, in the case of an index futures
contract, a portfolio with a volatility substantially
similar to that of the index on which the futures
contract is based), or by holding a call option
permitting the Fund to purchase the same futures
contract at a price no higher than the price of the
contract written by that Fund (or at a higher price if the
difference is maintained in liquid assets with the Fund's
custodian).

When selling a call option on a futures contract,
the Fund will maintain with its custodian in a
segregated account (and mark-to-market on a daily
basis) cash or liquid securities that, when added to
the amounts deposited with an FCM as margin, equal the
total market value of the futures contract underlying the
call option. Alternatively, the Fund may cover its position by
entering into a long position in the same futures
contract at a price no higher than the strike price of
the call option, by owning the instruments underlying
the futures contract, or by holding a separate call
option permitting the Fund to purchase the same futures
contract at a price not higher than the strike price of
the call option sold by that Fund.

When selling a put option on a futures contract,
the Fund will maintain with its custodian (and mark-to-
market on a daily basis) cash, U.S. Government
securities, or other highly liquid debt securities that
equal the purchase price of the futures contract less
any margin on deposit. Alternatively, the Fund may
cover the position either by entering into a short position in
the same futures contract, or by owning a separate put
option permitting it to sell the same futures contract
so long as the strike price of the purchased put option
is the same or higher than the strike price of the put
option sold by the Fund.

The requirements for qualification as a regulated
investment company also may limit the extent to which
the Fund may enter into futures and futures options.

INTEREST RATE FUTURES CONTRACTS. The Fund may
engage in interest rate futures contracts transactions
for hedging purposes only. An interest rate futures
contract is an agreement between parties to buy or sell
a specified debt security at a set price on a future
date. The financial instruments that underlie interest
rate futures contracts include long-term U.S. Treasury
bonds, U.S. Treasury notes, GNMA certificates, and three-month
U.S. Treasury bills. In the case of futures contracts
traded on U.S. exchanges, the exchange itself or an
affiliated clearing corporation assumes the opposite
side of each transaction (i.e., as buyer or seller). A
futures contract may be satisfied or closed out by
delivery or purchase, as the case may be in the cash
financial instrument or by payment of the change in the cash
value of the index. Frequently, using futures to effect a
particular strategy instead of using the underlying or
related security will result in lower transaction costs
being incurred.

The Fund may sell interest rate futures contracts
in order to hedge its portfolio securities whose value
may be sensitive to changes in interest rates. In
addition, the Fund could purchase and sell these
futures contracts in order to hedge its holdings in
certain common stocks (such as utilities, banks and savings
and loans) whose value may be sensitive to changes in interest
rates. The Fund could sell interest rate futures
contracts in anticipation of or during a market decline
to attempt to offset

the decrease in market value of its securities that
might otherwise result. When the Fund is not fully
invested in securities, it could purchase interest rate
futures in order to gain rapid market exposure that may
in part or entirely offset increases in the cost of
securities that it intends to purchase. As such
purchases are made, an equivalent amount of interest rate
futures contracts will be terminated by offsetting sales. In a
substantial majority of these transactions, the Fund
would purchase such securities upon termination of the
futures position whether the futures position results
from the purchase of an interest rate futures contract
or the purchase of a call option on an interest rate
futures contract, but under unusual market conditions,
a futures position may be terminated without the
corresponding purchase of securities.

OPTIONS ON INTEREST RATE FUTURES CONTRACTS. For
hedging purposes, the Fund may also purchase and write
put and call options on interest rate futures contracts
which are traded on a U.S. exchange or board of trade
and sell or purchase such options to terminate an
existing position. Options on interest rate futures
give the purchaser the right (but not the obligation), in
return for the premium paid, to assume a position in an interest
rate futures contract at a specified exercise price at a
time during the period of the option.

Transactions in options on interest rate futures
would enable the Fund to hedge against the possibility
that fluctuations in interest rates and other factors
may result in a general decline in prices of debt
securities owned by the Fund. Assuming that any
decline in the securities being hedged is accomplished
by a rise in interest rates, the purchase of put
options and sale of call options on the futures contracts may
generate gains which can partially offset any decline in the
value of the particular Fund's portfolio securities
which have been hedged. However, if after the Fund
purchases or sells an option on a futures contract, the
value of the securities being hedged moves in the
opposite direction from that contemplated, the Fund may
experience losses in the form of premiums on such
options which would partially offset gains the Fund would have.

FOREIGN CURRENCY FUTURES CONTRACTS AND RELATED
OPTIONS. The Fund may engage in foreign currency
futures contracts and related options transactions for
hedging purposes. A foreign currency futures contract
provides for the future sale by one party and purchase
by another party of a specified quantity of a foreign
currency at a specified price and time.

An option on a foreign currency futures contract
gives the holder the right, in return for the premium
paid, to assume a long position (call) or short
position (put) in a futures contract at a specified
exercise price at any time during the period of the
option. Upon the exercise of a call option, the holder
acquires a long position in the futures contract and the

writer is assigned the opposite short position. In the
case of a put option, the opposite is true.

The Fund may purchase call and put options on
foreign currencies as a hedge against changes in the
value of the U.S. dollar (or another currency) in
relation to a foreign currency in which portfolio
securities of the Fund may be denominated. A call
option on a foreign currency gives the buyer the right to
buy, and a put option the right to sell, a certain amount of
foreign currency at a specified price during a fixed period
of time. The Fund may invest in options on foreign
currency which are either listed on a domestic
securities exchange or traded on a recognized foreign
exchange.

The Fund will only enter into futures contracts
and futures options which are standardized and traded
on a U.S. or foreign exchange, board of trade, or
similar entity or quoted on an automated quotation
system. The Fund will not enter into a futures
contract or purchase an option thereon if, immediately
thereafter, the aggregate initial margin deposits for futures
contracts held by the Fund plus premiums paid by it for open
futures option positions, less the amount by which any
such positions are "in-the-money," would exceed 5% of
the liquidation value of that Fund's portfolio (or the
Fund's net asset value), after taking into account
unrealized profits and unrealized losses on any such
contracts the Fund has entered into. A call option is
"in-the-money" if the value of the futures contract
that is the subject of the option exceeds the exercise price. A
put option is "in the money" if the exercise price
exceeds the value of the futures contract that is the
subject of the option. For additional information
about margin deposits required with respect to futures
contracts and options thereon, see "Futures Contracts
and Options on Futures Contracts."

RISKS ASSOCIATED WITH FUTURES AND RELATED OPTIONS.
There are several risks associated with the use of
futures contracts and futures options as hedging
techniques. A purchase or sale of a futures contract
may result in losses in excess of the amount invested
in the futures contract. There can be no guarantee that
there will be a correlation between price movements in the
hedging vehicle and in the Fund's portfolio securities being
hedged. In addition, there are significant differences
between the securities and futures markets that could
result in an

imperfect correlation between the markets, causing a
given hedge not to achieve its objectives. The degree
of imperfection of correlation depends on circumstances
such as variations in speculative market demand for
futures and futures options on securities, including
technical influences in futures trading and futures
options, and differences between the financial
instruments being hedged and the instruments underlying the
standard contracts available for trading in such respects as
interest rate levels, maturities, and creditworthiness of
issuers. A decision as to whether, when and how to hedge
involves the exercise of skill and judgment, and even a well-
conceived hedge may be unsuccessful to some degree
because of market behavior or unexpected interest rate
trends.

There can be no assurance that a liquid market
will exist at a time when the Fund seeks to close out a
futures or a futures option position, and the Fund
would remain obligated to meet margin requirements
until the position is closed. In addition, there can
be no assurance that an active secondary market will
continue to exist.

Currency futures contracts and options thereon may
be traded on foreign exchanges. Such transactions may
not be regulated as effectively as similar transactions
in the United States; may not involve a clearing
mechanism and related guarantees; and are subject to
the risk of governmental actions affecting trading in,
or the prices of, foreign securities. The value of such position
also could be adversely affected by (i) other complex
foreign political, legal and economic factors, (ii)
lesser availability than in the United States of data
on which to make trading decisions, (iii) delays in the
Fund's ability to act upon economic events occurring in
foreign markets during non business hours in the United
States, (iv) the imposition of different exercise and
settlement terms and procedures and margin requirements
than in the United States, and (v) lesser trading
volume.

SECURITIES INDEX FUTURES CONTRACTS

The Fund may enter into securities index futures
contracts as an efficient means of regulating the
Fund's exposure to the equity markets. An index
futures contract is a contract to buy or sell units of
an index at a specified future date at a price agreed
upon when the contract is made. Entering into a contract
to buy units of an index is commonly referred to as purchasing a
contract or holding a long position in the index.
Entering into a contract to sell units of an index is
commonly referred to as selling a contract or holding a
short position. The value of a unit is the current
value of the stock index. For example, the S&P 500
Index is composed of 500 selected common stocks, most of
which are listed on the New York Stock Exchange (the "Exchange").
The S&P 500 Index assigns relative weightings to the
500 common stocks included in the Index, and the Index
fluctuates with changes in the market values of the
shares of those common stocks. In the case of the S&P
500 Index, contracts are to buy or sell 500 units.
Thus, if the value of the S&P 500 Index were $150, one
contract would be worth $75,000 (500 units x $150).
The index futures contract specifies that no delivery of the
actual securities making up the index will take place.
Instead, settlement in cash must occur upon the
termination of the contract, with the settlement being
the difference between the contract price and the
actual level of the stock index at the expiration of
the contract. For example, if the Fund enters into a
futures contract to buy 500 units of the S&P 500 Index at a
specified future date at a contract price of $150 and the S&P
500 Index is at $154 on that future date, the Fund will
gain $2,000 (500 units x gain of $4). If the Fund
enters into a futures contract to sell 500 units of the
stock index at a specified future date at a contract
price of $150 and the S&P 500 Index is at $154 on that
future date, the Fund will lose $2,000 (500 units x
loss of $4).

RISKS OF SECURITIES INDEX FUTURES. The Fund's
success in using hedging techniques depends, among
other things, on IMI's ability to predict correctly the
direction and volatility of price movements in the
futures and options markets as well as in the
securities markets and to select the proper type, time and
duration of hedges. The skills necessary for successful use of
hedges are different from those used in the selection of
individual stocks.

The Fund's ability to hedge effectively all or a
portion of its securities through transactions in index
futures (and therefore the extent of its gain or loss
on such transactions) depends on the degree to which
price movements in the underlying index correlate with
price movements in the Fund's securities. Inasmuch as
such securities will not duplicate the components of an
index, the correlation probably will not be perfect.
Consequently, the Fund will bear the risk that the prices of the
securities being hedged will not move in the same amount
as the hedging instrument. This risk will increase as
the composition

of the Fund's portfolio diverges from the composition
of the hedging instrument.

Although the Fund intends to establish positions
in these instruments only when there appears to be an
active market, there is no assurance that a liquid
market will exist at a time when the Fund seeks to
close a particular option or futures position. Trading
could be interrupted, for example, because of supply and
demand imbalances arising from a lack of either buyers or
sellers. In addition, the futures exchanges may suspend trading
after the price has risen or fallen more than the
maximum amount specified by the exchange. In some
cases, the Fund may experience losses as a result of
its inability to close out a position, and it may have
to liquidate other investments to meet its cash
needs.

Although some index futures contracts call for
making or taking delivery of the underlying securities,
generally these obligations are closed out prior to
delivery by offsetting purchases or sales of matching
futures contracts (same exchange, underlying security
or index, and delivery month). If an offsetting
purchase price is less than the original sale price,
the Fund generally realizes a capital gain, or if it is more, the
Fund generally realizes a capital loss. Conversely, if
an offsetting sale price is more than the original
purchase price, the Fund generally realizes a capital
gain, or if it is less, the Fund generally realizes a
capital loss. The transaction costs must also be
included in these calculations.

The Fund will only enter into index futures
contracts or futures options that are standardized and
traded on a U.S. or foreign exchange or board of trade,
or similar entity, or quoted on an automated quotation
system. The Fund will use futures contracts and
related options only for "bona fide hedging" purposes,
as such term is defined in applicable regulations of
the CFTC.

When purchasing an index futures contract, the
Fund will maintain with its custodian (and mark-to-
market on a daily basis) cash, U.S. Government
securities, or other highly liquid debt securities
that, when added to the amounts deposited with a
futures commission merchant ("FCM") as margin, are equal to the
market value of the futures contract. Alternatively, the
Fund may "cover" its position by purchasing a put
option on the same futures contract with a strike price
as high as or higher than the price of the contract
held by the Fund.

When selling an index futures contract, the Fund
will maintain with its custodian (and mark-to-market on
a daily basis) liquid assets that, when added to the
amounts deposited with an FCM as margin, are equal to
the market value of the instruments underlying the
contract. Alternatively, the Fund may "cover" its
position by owning the instruments underlying the contract (or,
in the case of an index futures contract, a portfolio with
a

volatility substantially similar to that of the index
on which the futures contract is based), or by holding
a call option permitting the Fund to purchase the same
futures contract at a price no higher than the price of
the contract written by the Fund (or at a higher price
if the difference is maintained in liquid assets with
the Fund's custodian).

COMBINED TRANSACTIONS. The Fund may enter into
multiple transactions, including multiple options
transactions, multiple futures transactions, multiple
currency transactions (including forward currency
contracts) and multiple interest rate transactions and
any combination of futures, options, currency and
interest rate transactions ("component" transactions),
instead of a single transaction, as part of a single or combined
strategy when, in the opinion of IMI, it is in the best
interests of the Fund to do so. A combined transaction
will usually contain elements of risk that are present
in each of its component transactions. Although
combined transactions are normally entered into based
on IMI's judgment that the combined strategies will
reduce risk or otherwise more effectively achieve the
desired portfolio management goal, it is possible that the
combination will instead increase such risks or hinder
achievement of the management objective.

The requirements for qualification as a regulated
investment company also may limit the extent to which
the Fund may enter into futures, options or forward
contracts. See "Taxation."

INVESTMENT RESTRICTIONS

The Fund's investment objectives as set forth in
the Prospectus under "Investment Objectives and
Policies," together with the investment restrictions
set forth below, are fundamental policies of the Fund
and may not be changed with respect to the Fund without
the approval of a majority of the outstanding voting
shares of the Fund. Under these restrictions, the Fund may not:

(i) Invest in real estate, real estate mortgage
loans, commodities, commodity futures
contracts or interests in oil, gas and/or
mineral exploration or development
programs, although the Fund may purchase and sell
(a) securities which are secured by real estate,
(b) securities of issuers which invest or deal in
real estate, and (c) futures contracts and related
options;

(ii) Make investments in securities for the
purpose of exercising control over or
management of the issuer;

(iii) Participate on a joint or a joint and
several basis in any trading account in
securities. The "bunching" of orders of
the Fund--or of the Fund and of other
accounts under the investment management of the
persons rendering investment advice to the Fund--for

the sale or purchase of portfolio
securities shall not be considered
participation in a joint securities trading
account;

(iv) Purchase securities on margin, except such
short-term credits as are necessary for the
clearance of transactions; the deposit or
payment by a Fund of initial or variation
margin in connection with futures contracts
or related options transactions is not
considered the purchase of a security on margin;

(v) Make loans, except that this restriction
shall not prohibit (a) the purchase and
holding of a portion of an issue of
publicly distributed debt securities, (b)
the lending of portfolio securities (provided
that the loan is secured continuously by collateral
consisting of U.S. Government securities or cash or
cash equivalents maintained on daily marked-to-
market basis in an amount at least equal to
the current market value of the securities
loaned), or (c) entry into repurchase
agreements with banks or broker- dealers;

(vi) Borrow money, except as a temporary measure
for extraordinary or emergency purposes or
except in connection with reverse
repurchase agreements provided that the
Fund maintains net asset coverage of at
least 300% for all borrowings;

(vii) Mortgage, pledge, hypothecate or in any
manner transfer, as security for
indebtedness, any securities owned or held
by the Fund (except as may be necessary in
connection with permitted borrowings and
then not in excess of 20% of the Fund's total
assets); provided, however, this does not prohibit
escrow, collateral or margin arrangements in
connection with its use of options, short sales,
futures contracts and options on future contracts;

(viii) Purchase the securities of issuers
conducting their principal business
activities in the same industry if
immediately after such purchase the value of the
Fund's investments in such industry would exceed 25%
of the value of the total assets of the Fund;

(ix) Act as an underwriter of securities;

(x) Make short sales of securities or maintain
a short position; or

(xii) Issue senior securities, except insofar as
the Fund may be deemed to have issued a
senior security in connection with any
repurchase agreement or any permitted
borrowing.

ADDITIONAL RESTRICTIONS

The Fund has adopted the following additional
restrictions, which are not fundamental and which may
be changed without shareholder approval, to the extent
permitted by applicable law, regulation or regulatory
policy.

Under these restrictions, the Fund may not:

(i) purchase or sell real estate limited
partnership interests;

(ii) purchase or sell interests in oil, gas and
mineral leases (other than securities of
companies that invest in or sponsor such
programs);

(iii) purchase or retain securities of any
company if, to the knowledge of the Trust,
officers and Trustees of the Trust and
officers and directors of the Manager,
Mackenzie Investment Management Inc. ("MIMI") or
Mackenzie Financial Corporation ("MFC") who
individually own more than 1/2 of 1% of the
securities of that company together own beneficially
more than 5% of such securities;

(iv) purchase any security if as a result the
Fund would then have more than 5% of its
total assets (taken at current value)
invested in securities of companies
(including predecessors) less than three years old;

(v) invest more than 10% of its net assets
taken at market value at the time of the
investment in "illiquid securities" and the
Fund may not invest more than 5% of its
total assets in restricted securities;
Illiquid securities may include securities
subject to legal or contractual
restrictions on resale (including private
placements), repurchase agreements maturing in more
than seven days, certain options traded over the
counter that the Fund has purchased, securities being
used to cover certain options that the Fund
has written, securities for which market
quotations are not readily available, or
other securities which legally or in the
Manager's opinion, subject to the Board's
supervision, may be deemed illiquid, but
shall not include any instrument that, due to the
existence of a trading market, to the Fund's
compliance with certain conditions intended to
provide liquidity, or to other factors, is liquid;

(vi) purchase securities of other investment
companies, except in connection with a
merger, consolidation or sale of assets,
and except that the Fund may purchase

shares of other investment companies
subject to such restrictions as may be
imposed by the Investment Company Act of
1940 (the "1940 Act") and rules thereunder
or by any state in which shares of the Fund
are registered;

Whenever an investment objective, policy or
restriction set forth in the Prospectus or this SAI
states a maximum percentage of assets that may be
invested in any security or other asset or describes a
policy regarding quality standards, such percentage
limitation or standard shall, unless otherwise indicated, apply
to the Fund only at the time a transaction is entered
into. Accordingly, if a percentage limitation is
adhered to at the time of investment, a later increase
or decrease in the percentage which results from
circumstances not involving any affirmative action by
the Fund, such as a change in market conditions or a
change in the Fund's asset level or other circumstances beyond
the Fund's control, will not be considered a violation.

ADDITIONAL RIGHTS AND PRIVILEGES

The Trust offers and (except as noted below) bears the
cost of providing to investors the following rights and
privileges. The Trust reserves the right to amend or
terminate any one or more of these rights and
privileges. Notice of amendments to or terminations of
rights and privileges will be provided to shareholders
in accordance with applicable law.

Certain of the rights and privileges described
below refer to funds other than the Fund whose shares
are distributed by Ivy Mackenzie Distributors, Inc.
("IMDI"). These funds are: Ivy Asia Pacific Fund, Ivy
Bond Fund, Ivy Canada Fund, Ivy China Region Fund, Ivy
Emerging Growth Fund, Ivy Global Fund, Ivy Global
Natural Resources Fund, Ivy Global Science & Technology
Fund, Ivy Growth Fund, Ivy Growth with Income Fund, Ivy
International Fund II (expected effective date of May 13, 1997),
Ivy International Fund, Ivy International Small Companies
Fund, Ivy Latin America Strategy Fund, Ivy Money Market
Fund, Ivy New Century Fund and Ivy Pan-Europe Fund
(expected effective date of May 13, 1997)(the other
seventeen series of the Trust); and Mackenzie
California Municipal Fund, Mackenzie Limited Term
Municipal Fund, Mackenzie National Municipal Fund and Mackenzie
New York Municipal Fund (the four series of Mackenzie
Series Trust) (collectively, with the Fund, the "Ivy
Mackenzie Funds"). Shareholders should obtain a
current prospectus for these funds before exercising
any right or privilege that may relate to them.

AUTOMATIC INVESTMENT METHOD

The Automatic Investment Method, which enables a
shareholder to have specified amounts automatically
drawn each month from his or her bank for investment in
Fund shares, is available for Class

A, Class B and Class C shares. The minimum initial and
subsequent investment pursuant to this plan is $50 per
month (except in the case of a tax qualified retirement
plan for which the minimum initial and subsequent
investment is $25 per month). A shareholder may
terminate the Automatic Investment Method at any time
upon delivery to Ivy Mackenzie Services Corp. ("IMSC")
of telephone instructions or written notice from the shareholder.
See "Automatic Investment Method" in the Prospectus.
To begin the plan, complete Sections 6A and 7B of the
Account Application.

EXCHANGE OF SHARES

As described in the Prospectus, shareholders of
the Fund have an exchange privilege with certain other
Ivy Mackenzie Funds (except Ivy International Fund
unless you have an existing Ivy International Fund
account). Before effecting an exchange, shareholders
of the Fund should obtain and read the currently
effective prospectus for the Ivy Mackenzie Fund into which the
exchange is to be made.

INITIAL SALES CHARGE SHARES. Class A shareholders
may exchange their Class A shares ("outstanding Class A
shares") for Class A shares of another Ivy Mackenzie
Fund ("new Class A Shares") on the basis of the
relative net asset value per Class A share, plus (in
the case of funds other than Ivy Money Market Fund) an
amount equal to the difference, if any, between the
sales charge previously paid on the outstanding Class A shares
and the sales charge payable at the time of the exchange on
the new Class A shares. (The additional sales charge
will be waived for Class A shares that have been
invested for a period of 12 months or longer.) Class A
shareholders may also exchange their shares for Class A
shares of Ivy Money Market Fund (no initial sales
charge will be assessed at the time of such an
exchange).

CONTINGENT DEFERRED SALES CHARGE SHARES

CLASS A: Class A shareholders may exchange their
Class A shares that are subject to a contingent
deferred sales charge ("CDSC"), as described in the
Prospectus ("outstanding Class A shares"), for Class A
shares of another Ivy Mackenzie Fund ("new Class A
shares") on the basis of the relative net asset value per
Class A share, without the payment of any CDSC that would
otherwise be due upon the redemption of the outstanding Class A
shares. Class A shareholders of the Fund exercising the
exchange privilege will continue to be subject to the
Fund's CDSC period following an exchange if such
schedule is higher (or such period is longer) than the
CDSC period, if any, applicable to the new Class A
shares.

For purposes of computing the CDSC that may be
payable upon the redemption of the new Class A shares,
the holding period of

the outstanding Class A shares is "tacked" onto the
holding period of the new Class A shares.

CLASS B: Class B shareholders may exchange their
Class B shares ("outstanding Class B shares") for Class
B shares of another Ivy Mackenzie Fund ("new Class B
shares") on the basis of the relative net asset value
per Class B share, without the payment of any CDSC that
would otherwise be due upon the redemption of the
outstanding Class B shares. Class B shareholders of
the Fund exercising the exchange privilege will
continue to be subject to the Fund's CDSC schedule (or period)
following an exchange if such schedule is higher (or such
period is longer) than the CDSC schedule (or period)
applicable to the new Class B shares.

Class B shares of the Fund acquired through an
exchange of Class B shares of another Ivy Mackenzie
Fund will be subject to the Fund's CDSC schedule (or
period) if such schedule is higher (or such period is
longer) than the CDSC schedule (or period) applicable
to the Ivy Mackenzie Fund from which the exchange was
made.

The following CDSC table ("Table 1") applies to
Class B shares of the Fund, Ivy Asia Pacific Fund, Ivy
Bond Fund, Ivy Canada Fund, Ivy China Region Fund, Ivy
Emerging Growth Fund, Ivy Global Fund, Ivy Global
Natural Resources Fund, Ivy Global Science & Technology
Fund, Ivy Growth Fund, Ivy Growth with Income Fund, Ivy
International Fund II (expected effective date of May
13, 1997), Ivy International Fund, Ivy International Small
Companies Fund, Ivy Latin America Strategy Fund, Ivy New
Century Fund, Ivy Pan-Europe Fund (expected effective
date of May 13, 1997), Mackenzie California Municipal
Fund, Mackenzie National Municipal Fund and Mackenzie
New York Municipal Fund ("Table 1 Funds"):

CONTINGENT DEFERRED
SALES CHARGE AS A
PERCENTAGE OF DOLLAR
AMOUNT SUBJECT TO YEAR SINCE PURCHASE
CHARGE

First 5%
Second 4%
Third 3%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh and thereafter 0%

The following CDSC table ("Table 2") applies to
Class B shares of Mackenzie Limited Term Municipal Fund
("Table 2 Funds"):

CONTINGENT DEFERRED
SALES CHARGE AS A
PERCENTAGE OF DOLLAR
AMOUNT SUBJECT TO YEAR SINCE PURCHASE
CHARGE

First 3%
Second 2.5%
Third 2%
Fourth 1.5%
Fifth 1%
Sixth and thereafter 0%

The CDSC schedule for Table 1 Funds is higher (and
the period is longer) than the CDSC schedule (and
period) for Table 2 Funds.

CLASS C. Class C shareholders may exchange their
Class C shares ("outstanding Class C shares") for Class
C shares of

another Ivy Mackenzie Fund ("new Class C shares") on
the basis of the relative net asset value per Class C
share, without the payment of any CDSC that would
otherwise be due upon redemption. (Class C shares are
subject to a CDSC of 1% if redeemed within one year of
the date of purchase).

ALL CLASSES. The minimum amount which may be
exchanged into an Ivy Mackenzie Fund in which shares
are not already held is $1,000. No exchange out of the
Fund (other than by a complete exchange of all Fund
shares) may be made if it would reduce the
shareholder's interest in the Fund to less than $1,000.
Exchanges are available only in states where the exchange can
legally be made.

Each exchange will be made on the basis of the
relative net asset values per share of each fund of the
Ivy Mackenzie Funds next computed following receipt by
IMSC of telephone instructions or a properly executed
request. Exchanges, whether written or telephonic, must
be received by IMSC by the close of regular trading on
the Exchange (normally 4:00 p.m., eastern time) to
receive the price computed on the day of receipt. Exchange
requests received after that time will receive the price next
determined following receipt of the request. The
exchange privilege may be modified or terminated at any
time, upon at least 60 days' notice to the extent
required by applicable law. See "Redemptions."

LETTER OF INTENT

Reduced sales charges apply to initial investments
in Class A shares of the Fund made pursuant to a non-
binding Letter of Intent. A Letter of Intent may be
submitted by an individual, his or her spouse and
children under the age of 21, or a trustee or other
fiduciary of a single trust estate or single fiduciary
account. See the Account Application in the Prospectus. Any
investor may submit a Letter of Intent stating that he or
she will invest, over a period of 13 months, at least
$100,000 in Class A shares of the Fund. A Letter of
Intent may be submitted

at the time of an initial purchase of Class A shares of
the Fund or within 90 days of the initial purchase, in
which case the Letter of Intent will be back-dated. A
shareholder may include, as an accumulation credit, the
value (at the applicable offering price) of all Class A
shares of the Fund, Ivy Asia Pacific Fund, Ivy Bond
Fund, Ivy Canada Fund, Ivy China Region Fund, Ivy
Emerging Growth Fund, Ivy Global Fund, Ivy Global Natural
Resources Fund, Ivy Global Science & Technology Fund, Ivy Growth
Fund, Ivy Growth with Income Fund, Ivy International
Fund II (expected effective date of may 13, 1997), Ivy
International Fund, Ivy International Small Companies
Fund, Ivy Latin America Strategy Fund, Ivy Pan-Europe
Fund (expected effective date of may 13, 1997), Ivy New
Century Fund, Mackenzie California Municipal Fund,
Mackenzie Limited Term Municipal Fund, Mackenzie
National Municipal Fund, and Mackenzie New York Municipal Fund
(and shares that have been exchanged into Ivy Money Market
Fund from any of the other funds in the Ivy Mackenzie
Funds) held of record by him or her as of the date of
his or her Letter of Intent. During the term of the
Letter of Intent, the Fund's transfer agent will hold
Class A shares representing 5% of the indicated amount
(less any accumulation credit value) in escrow. The
escrowed Class A shares will be released when the full
indicated amount has been purchased. If the full indicated
amount is not purchased during the term of the Letter of
Intent, the investor is required to pay IMDI an amount
equal to the difference between the dollar amount of
sales charge that he or she has paid and that which he
or she would have paid on his or her aggregate
purchases if the total of such purchases had been made
at a single time. Such payment will be made by an automatic
liquidation of Class A shares in the escrow account. A
Letter of Intent does not obligate the investor to buy
or the Trust to sell the indicated amount of Class A
shares, and the investor should read carefully all the
provisions of such letter before signing.

RETIREMENT PLANS

The following fees will be charged to individual
shareholder accounts as described in the retirement
prototype plan document:

Retirement Plan New Account Fee no fee
Retirement Plan Annual Maintenance Fee $10.00 per
account

For shareholders whose retirement accounts are
diversified across several funds of the Ivy Mackenzie
Funds, the annual maintenance fee will be limited to
not more than $20.

INDIVIDUAL RETIREMENT ACCOUNTS: Shares of the
Trust may be used as a funding medium for an Individual
Retirement Account ("IRA"). Eligible individuals may
establish an IRA by adopting a model custodial account
available from IMSC, who may impose a charge for
establishing the account. Individuals should consult
their tax advisers before investing IRA assets in the Fund (which
primarily distributes exempt-interest dividends).

In general, an eligible individual may contribute
up to the lesser of $2,000 or 100% of his or her
compensation or earned income to an IRA each year. If
a husband and wife are both employed, and both are
under age 70-1/2, each may set up his or her own IRA
within these limits. If both earn at least $2,000 per
year, the maximum potential contribution is $4,000 per year
for both. For years after 1996, the result is similar even if
one spouse has no earned income; if the joint earned
income of the spouses is at least $4,000, a
contribution of up to $2,000 may be made to each
spouse's IRA. For years before 1997, however, if one
spouse has (or elects to be treated as having) no earned
income for IRA purposes for a year, the working spouse may
contribute up to the lesser of $2,250 or 100% of his or her
compensation or earned income for the year to IRAs for both
spouses, provided that no more than $2,000 is contributed
to the IRA of one spouse. Rollover contributions are
not subject to these limits.

corporate, sole proprietorship, or partnership pension,
profit sharing, 401(k) or stock bonus plan), qualified
annuity plan, 403(b) plan, simplified employee pension,
or governmental plan. If he or she (or his or her
spouse) is an active participant, a full deduction is
only available if he or she has adjusted gross income
that is less than a specified level ($40,000 for married
couples filing a joint return, $25,000 for single individuals,
and $0 for a married individual filing a separate return).
The deduction is phased out ratably for active
participants with adjusted gross income between certain
levels ($40,000 and $50,000 for married individuals
filing a joint return, $25,000 and $35,000 for single
individuals, and $0 and $10,000 for married individuals
filing separate returns). Individuals who are active
participants with income above the specified phase-out level may
not deduct their IRA contributions. Rollover
contributions are not includible in income for Federal
income tax purposes and therefore are not deductible
from it.

There is no set-up fee for qualified plans and the
annual maintenance fee is $20.00 per account.

Corporate employers may also adopt the Custodial
Agreement and Retirement Plan for the benefit of their
eligible employees. Similar contribution and deduction
rules apply to corporate employers.

The Fund's transfer agent will arrange for
Investors Bank & Trust to furnish custodial services to
the employer and any participating employees.

DEFERRED COMPENSATION FOR PUBLIC SCHOOLS AND
CHARITABLE ORGANIZATIONS ("403(b)(7) ACCOUNT"):
Section 403(b)(7) of the Internal Revenue Code of 1986,
as amended (the "Code"), permits public school systems
and certain charitable organizations to use mutual fund
shares held in a custodial account to fund deferred
compensation arrangements with their employees. A custodial
account agreement is available for those employers whose

employees wish to purchase shares of the Trust in
conjunction with such an arrangement. The sales charge
for purchases of less than $10,000 of Class A shares is
set forth under "Retirement Plans" in the Prospectus.
Sales charges for purchases of $10,000 or more of Class
A shares are the same as those set forth under "Initial
Sales Charge Alternative -- Class A Shares" in the
Prospectus. The special application for a 403(b)(7) Account is
available from IMSC.

SIMPLIFIED EMPLOYEE PENSION ("SEP") IRAs: An
employer may deduct contributions to a SEP up to the
lesser of $30,000 or 15% of compensation. SEP accounts
generally are subject to all rules applicable to IRA
accounts, except the deduction limits, and are subject
to certain employee participation requirements. No new
salary reduction SEPs ("SARSEPs") may be established after 1996,
but existing SARSEPs may continue to be maintained, and non-
salary reduction SEPs may continue to be established as
well as maintained after 1996.

SIMPLE PLANS: An employer may establish a SIMPLE
IRA or a SIMPLE 401(k) for years after 1996. An
employee can make pre-tax salary reduction
contributions to a SIMPLE Plan, up to $6,000 a year.
Subject to certain limits, the employer will either match a
portion of employee contributions, or will make a contribution
equal to 2% of each employee's compensation without
regard to the amount the employee contributes. An
employer cannot maintain a SIMPLE Plan for its
employees if any contributions or benefits are credited
to those employees under any other qualified retirement
plan maintained by the employer.

REINVESTMENT PRIVILEGE

Shareholders who have redeemed Class A shares of
the Fund may reinvest all or a part of the proceeds of
the redemption back into Class A shares of the Fund at
net asset value (without a sales charge) within 60 days
from the date of redemption. This privilege may be
exercised only once. The reinvestment will be made at
the net asset value next determined after receipt by IMSC
of the reinvestment order accompanied by the funds to be

reinvested. No compensation will be paid to any sales
personnel or dealer in connection with the transaction.

RIGHTS OF ACCUMULATION

A scale of reduced sales charges applies to any
investment of $50,000 or more in Class A shares of the
Fund. See "Initial Sales Charge Alternative -- Class A
Shares" in the Prospectus. The reduced sales charge is
applicable to investments made at one time by an
individual, his or her spouse and children under the
age of 21, or a trustee or other fiduciary of a single trust
estate or single fiduciary account (including a pension,
profit sharing or other employee benefit trust created
pursuant to a plan qualified under Section 401 of the
Code). It is also applicable to current purchases of
all of the funds in the Ivy Mackenzie Funds (except Ivy
Money Market Fund) by any of the persons enumerated
above, where the aggregate quantity of Class A shares
of the Fund, Ivy Asia Pacific Fund, Ivy Bond Fund, Ivy
Canada Fund, Ivy China Region Fund, Ivy Emerging Growth Fund, Ivy
Global Fund, Ivy Global Natural Resources Fund, Ivy
Global Science & Technology Fund, Ivy Growth Fund, Ivy
Growth with Income Fund, Ivy International Fund II
(expected effective date of May 13, 1997), Ivy
International Fund, Ivy International Small Companies
Fund, Ivy Latin America Strategy Fund, Ivy New Century
Fund, Ivy Pan-Europe Fund (expected effective date of May 13,
1997), Mackenzie California Municipal Fund, Mackenzie
Limited Term Municipal Fund, Mackenzie National
Municipal Fund and Mackenzie New York Municipal Fund
(and shares that have been exchanged into Ivy Money
Market Fund from any of the other funds in the Ivy
Mackenzie Funds) and of any other investment company
distributed by IMDI, previously purchased or acquired and
currently owned, determined at the higher of current offering
price or amount invested, plus the Class A shares being
purchased, amounts to $50,000 or more for the Ivy
International Fund II (expected effective date of May
13, 1997), Ivy Asia Pacific Fund, Ivy Canada Fund, Ivy
China Region Fund, Ivy Emerging Growth Fund, Ivy Global
Fund, Ivy Global Natural Resources Fund, Ivy Global
Science & Technology Fund, Ivy Growth Fund, Ivy Growth
with Income Fund, Ivy International Fund, Ivy
International Small Companies Fund, Ivy Latin America Strategy
Fund, Ivy New Century Fund and Ivy Pan-Europe Fund
(expected effective date of May 13, 1997); $100,000 or
more for the Fund, Ivy Bond Fund, Mackenzie California
Municipal Fund, Mackenzie National Municipal Fund and
Mackenzie New York Municipal Fund; or $25,000 or more
for Mackenzie Limited Term Municipal Fund.

SYSTEMATIC WITHDRAWAL PLAN

A shareholder may establish a Systematic
Withdrawal Plan (a "Withdrawal Plan"), by telephone
instructions or by delivery to IMSC of a written
election to have his or her shares withdrawn
periodically, accompanied by a surrender to IMSC of all share
certificates then outstanding in the shareholder's name,
properly endorsed by the shareholder. To be eligible
to elect a Withdrawal Plan, a shareholder must have at
least $5,000 in his or her account. A Withdrawal Plan
may not be established if the investor is currently
participating in the Automatic Investment Method. A
Withdrawal Plan may involve the depletion of a
shareholder's principal, depending on the amount withdrawn.

A redemption under a Withdrawal Plan is a taxable
event. Shareholders contemplating participating in a
Withdrawal Plan should consult their tax advisers.

GROUP SYSTEMATIC INVESTMENT PROGRAM

Shares of the Fund may be purchased in connection
with investment programs established by employee or
other groups using systematic payroll deductions or
other systematic payment arrangements. The Trust does
not itself organize, offer or administer any such
programs. However, it may, depending upon the size of
the program, waive the minimum initial and additional
investment requirements for purchases by individuals in
conjunction with programs organized and offered by others.
Unless shares of the Fund are purchased in conjunction with
IRAs (see "How to Buy Shares" in the Prospectus), such
group systematic investment programs are not entitled
to special tax benefits under the Code. The Trust
reserves the right to refuse purchases at any time or
suspend the offering of shares in connection with group
systematic investment programs, and to restrict the
offering of shareholder privileges, such as check

writing, simplified redemptions and other optional
privileges, as described in the Prospectus, to
shareholders using group systematic investment
programs.

With respect to each shareholder account
established on or after September 15, 1972 under a
group systematic investment program, the Trust and IMI
each currently charge a maintenance fee of $3.00 (or
portion thereof) for each twelve-month period (or
portion thereof) that the account is maintained. The Trust
may collect such fee (and any fees due to IMI) through a
deduction from distributions to the shareholders involved or
by causing on the date the fee is assessed a redemption
in each such shareholder account sufficient to pay the
fee. The Trust reserves the right to change these fees
from time to time without advance notice.

Class A shares of a Fund are made available to
Merrill Lynch Daily K Plan (the "Plan") participants at
NAV without an initial sales charge if:

(iii) the Plan has 500 or more eligible employees,
as determined by Merrill Lynch plan conversion
manager, on the date the Plan Sponsor signs the
Merrill Lynch Recordkeeping Service Agreement.

BROKERAGE ALLOCATION

Subject to the overall supervision of the
President and the Board, IMI places orders for the
purchase and sale of the Fund's portfolio securities.
All portfolio transactions are effected at the best
price and execution obtainable. Purchases and sales of
debt securities are usually principal transactions, and therefore
brokerage commissions are usually not required to be
paid by the Fund for such purchases and sales (although
the price paid generally includes undisclosed
compensation to the dealer). The prices paid to
underwriters of newly-issued securities usually include
a concession paid by the issuer to the underwriter, and
purchases of after-market securities from dealers normally
reflect the spread between the bid and asked prices. In
connection with OTC transactions, IMI attempts to deal directly
with the principal market makers, except in those
circumstances where it believes that a better price and
execution are available elsewhere.

IMI selects broker-dealers to execute transactions
and evaluates the reasonableness of commissions on the
basis of quality, quantity, and the nature of the
firms' professional services. Commissions to be
charged and the rendering of investment services,
including statistical, research, and counseling
services by brokerage firms, are factors to be
considered in the placing of brokerage business. The types of
research services provided by brokers may include general
economic and industry data, and information on securities
of specific companies. Research services furnished by
brokers through whom the Trust effects securities
transactions may be used by IMI in servicing all of its
accounts. In addition, not all of these services may
be used by in connection with the services it provides
the Fund or the Trust. IMI may consider sales of
shares of the Fund as a factor in the selection of
broker-dealers and may select broker-dealers who provide it with
research services. IMI will not, however, execute
brokerage transactions other than at the best price and
execution.

As of April 30, 1997, the Fund has not commenced
operations and thus has not paid any brokerage
commissions.

The Fund may, under some circumstances, accept
securities in lieu of cash as payment for Fund shares.
The Fund will accept securities only to increase its
holdings in a portfolio security or to take a new
portfolio position in a security that IMI deems to be a
desirable investment for the Fund. While no minimum has
been established, it is expected that the Fund will not accept
securities having an aggregate value of less than $1
million. The Trust may reject in whole or in part any
or all offers to pay for Fund shares with securities
and may discontinue accepting securities as payment for
Fund shares at any time without notice. The Trust will
value accepted securities in the manner and at the same
time provided for valuing portfolio securities of the Fund,
and Fund shares will be sold for net asset value determined at

the same time the accepted securities are valued. The
Trust will only accept securities delivered in proper
form and will not accept securities subject to legal
restrictions on transfer.

TRUSTEES AND OFFICERS

The Trustees and Executive Officers of the Trust,
their business addresses and principal occupations
during the past five years are:

POSITION
WITH THE BUSINESS
AFFILIATIONS NAME, ADDRESS, AGE TRUST AND
PRINCIPAL OCCUPATIONS

Joseph G. Rosenthal Trustee Chartered
Accountant 110 Jardin Drive (1958-
present); Trustee of Unit #12
Mackenzie Series Trust Concord, Ontario Canada
(1985-present); Director of

L4K 2T7 The Mackenzie
Funds Inc. Age: 62
(1987-1995).

James W. Broadfoot Vice Executive Vice
President,

PERSONAL INVESTMENTS BY EMPLOYEES OF IMI

COMPENSATION TABLE
IVY FUND
(FISCAL YEAR ENDED DECEMBER 31, 1996)

John S. $7,419 N/A N/A
$10,000 Anderegg, Jr.
(Trustee)

Paul H. $7,419 N/A N/A
$10,000 Broyhill
(Trustee)

Keith J. $0 N/A N/A
$0 Carlson[**]
(Trustee and
President)

Stanley $4,949 N/A N/A
$10,000 Channick[*]
(Trustee)

Frank W. $7,419 N/A N/A
$10,000 DeFriece, Jr.
(Trustee)

Roy J. $7,419 N/A N/A
$10,000 Glauber[*]
(Trustee)

Michael G. $0 N/A N/A
$0 Landry
(Trustee and
Chairman of
the Board)

Joseph G. $7,419 N/A N/A
$10,000 Rosenthal
(Trustee)

Richard N. $10,000 N/A N/A
$10,000 Silverman
(Trustee)

J. Brendan $7,419 N/A N/A
$10,000 Swan
(Trustee)

C. William $0 N/A N/A
$0 Ferris
(Secretary/Treasurer)

[*] Appointed as a Trustee of the Trust at a meeting
of the Board held on February 10, 1996.

[**] Appointed as a Trustee of the Trust at a meeting
of the Board held on December 7, 1996.

As of April 3, 1997, the Officers and Trustees of
the Trust as a group owned beneficially or of record
less than 1% of the outstanding Class A, Class B and
Class C shares of any of the Funds.

INVESTMENT ADVISORY AND OTHER SERVICES

BUSINESS MANAGEMENT AND INVESTMENT ADVISORY SERVICES

IMI provides business management and investment
advisory services to the Fund pursuant to a Business
Management and Investment Advisory Agreement with the
Trust (the "Agreement"), which was approved on
September 17, 1994, with respect to the Fund by the
Board, including a majority of the Trustees who are
neither "interested persons" (as defined in the 1940 Act) of the
Trust nor have any direct or indirect financial interest
in the operation of the distribution plan (see
"Distribution Services") or in any related agreement
(the "Independent Trustees"). IMI is a wholly owned
subsidiary of MIMI, which currently acts as manager and
investment adviser to the following registered
investment companies Mackenzie National Municipal Fund, Mackenzie
New York Municipal Fund, Mackenzie California Municipal
Fund, and Mackenzie Limited Term Municipal Fund. MIMI,
a Delaware corporation, has approximately 10% of its
outstanding common stock listed for trading on the TSE.
MIMI is a subsidiary of Mackenzie Financial Corporation
("MFC"), 150 Bloor Street West, Toronto, Ontario,
Canada, a public corporation organized under the laws
of Ontario whose shares are listed for trading on The
Toronto Stock Exchange. MFC is registered in Ontario as a mutual
fund dealer and advises Ivy Canada Fund and Ivy Global
Natural Resources Fund. IMI currently acts as manager
and investment adviser to the following additional
investment companies registered under the 1940 Act:
Ivy Asia Pacific Fund, Ivy Bond Fund, Ivy China Region
Fund, Ivy Emerging Growth Fund, Ivy Global Fund, Ivy
Global Science & Technology Fund, Ivy Growth Fund, Ivy
Growth with Income Fund, Ivy International Fund II (expected
effective date of May 13, 1997), Ivy International Fund, Ivy
International Small Companies Fund, Ivy Latin America
Strategy Fund, Ivy Money Market Fund, Ivy New Century
Fund and Ivy Pan

Europe Fund (expected effective date of May 13, 1997).
IMI currently acts as manager to Ivy Canada Fund and
Ivy Global Natural Resources Fund.

The Agreement obligates IMI to make investments
for the accounts of the Fund in accordance with its
best judgment and within the investment objectives and
restrictions set forth in the Prospectus, the 1940 Act
and the provisions of the Code relating to regulated
investment companies, subject to policy decisions
adopted by the Board. IMI also determines the
securities to be purchased or sold by the Fund and places orders
with brokers or dealers who deal in such securities.

Under the Agreement, IMI also provides certain
business management services. IMI is obligated to (1)
coordinate with the Fund's Custodian and monitor the
services it provides to the Fund; (2) coordinate with
and monitor any other third parties furnishing services
to the Fund; (3) provide the Fund with necessary office
space, telephones and other communications facilities
as are adequate for the Fund's needs; (4) provide the
services of individuals competent to perform administrative and
clerical functions that are not performed by employees or
other agents engaged by the Fund or by IMI acting in
some other capacity pursuant to a separate agreement or
arrangements with the Fund; (5) maintain or supervise
the maintenance by third parties of such books and
records of the Trust as may be required by applicable
Federal or state law; (6) authorize and permit IMI's
directors, officers and employees who may be elected or
appointed as trustees or officers of the Trust to serve in such
capacities; and (7) take such other action with respect to
the Trust, after approval by the Trust as may be
required by applicable law, including without
limitation the rules and regulations of the Securities
and Exchange Commission (the "SEC") and of state
securities commissions and other regulatory agencies.

For providing business management and investment
advisory services, the Fund pays IMI a monthly fee at
an annual rate of 0.75% of the Fund's average daily net
assets. Advisory fee information is not yet available
for the Fund, which has not commenced operations as of
the date of this SAI.

Transfer Agent and any related services; (10) expenses
of obtaining quotations of portfolio securities and of
pricing shares; (11) expenses of maintaining the
Trust's legal existence and of shareholders' meetings;
(12) expenses of preparation and distribution to
existing shareholders of periodic reports, proxy
materials and prospectuses; and (13) fees and expenses of
membership in industry organizations.

IMI currently limits the Fund's total operating
expenses (excluding Rule 12b-1 fees, interest, taxes,
brokerage commissions, litigation and indemnification
expenses, and other extraordinary expenses) to an
annual rate of 1.50% of the Fund's average net assets,
which may lower the Fund's expenses and increase its
yield. The Fund's expense limitation may be terminated
or revised at any time, at which time its expenses may
increase and its yield may be reduced.

The initial term of the Agreement between IMI and
the Fund commenced on September 17, 1994, will run for
a period of two years from the date of. The Agreement
will continue in effect with respect to the Fund from
year to year only so long as such continuance is
specifically approved at least annually (i) by the vote
of a majority of the Independent Trustees and (ii) either
(a) by the vote of a majority of the outstanding voting securi-
ties (as defined in the 1940 Act) of the Fund or (b) by
the vote of a majority of the entire Board. If the
question of continuance of the Agreement (or adoption
of any new agreement) is presented to shareholders,
continuance (or adoption) shall be effected only if
approved by the affirmative vote of a majority of the
outstanding voting securities of the Fund. See
"Capitalization and Voting Rights."

The Agreement may be terminated with respect to
the Fund at any time, without payment of any penalty,
by the vote of a majority of the Board or by a vote of
a majority of the outstanding voting securities of the
Fund on 60 days' written notice to IMI, or by IMI on 60
days' written notice to the Trust. The Agreement shall
terminate automatically in the event of its assignment.

DISTRIBUTION SERVICES

IMDI, a wholly owned subsidiary of MIMI, serves as
the exclusive distributor of the Fund's shares pursuant
to an Amended and Restated Distribution Agreement with
the Trust dated October 23, 1991, as amended from time
to time (the "Distribution Agreement"). The
Distribution Agreement was last approved by the Board
on August 25, 1996. IMDI distributes shares of the Fund
through broker-dealers who are members of the National
Association of Securities Dealers, Inc. and who have executed
dealer agreements with IMDI. IMDI distributes shares of the
Fund on a continuous basis, but reserves the right to
suspend or discontinue distribution on that basis.
IMDI is not obligated to sell any specific amount of
Fund shares.

Pursuant to the Distribution Agreement, IMDI is
entitled to deduct a commission on all Class A Fund
shares sold equal to the difference, if any, between
the public offering price, as set forth in the Fund's
then-current prospectus, and the net asset value on
which such price is based. Out of that commission, IMDI
may reallow to dealers such concession as IMDI may determine from
time to time. In addition, IMDI is entitled to deduct a
CDSC on the redemption of Class A shares sold without
an initial sales charge and Class B and Class C shares,
in accordance with, and in the manner set forth in, the
Prospectus.

Under the Distribution Agreement, the Fund bears,
among other expenses, the expenses of registering and
qualifying its shares for sale under federal and state
securities laws and preparing and distributing to
existing shareholders periodic reports, proxy materials
and prospectuses. Since, as of the date of this SAI,
the Fund has not commenced operations, no payments had
been made in connection with the sale of Fund shares as of
the date of this SAI.

The Distribution Agreement will continue in effect
for successive one-year periods, provided that such
continuance is specifically approved at least annually
by the vote of a majority of the Independent Trustees,
cast in person at a meeting called for that purpose,
and by the vote of either a majority of the entire
Board or a majority of the outstanding voting securities
of the Fund. The Distribution Agreement may be terminated with
respect to the Fund at any time, without payment of any
penalty, by IMDI on 60 days' written notice to the Fund
or by the Fund by vote of either a majority of the
outstanding voting securities of the Fund or a majority
of the Independent Trustees on 60 days' written notice
to IMDI. The Distribution Agreement shall terminate
automatically in the event of its assignment.

RULE 18F-3 PLAN. On February 23, 1995, the SEC
adopted Rule 18f-3 under the 1940 Act, which permits a
registered open-end investment company to issue
multiple classes of shares in accordance with a written
plan approved by the investment company's board of
directors/trustees and filed with the SEC. At a
meeting held on December 1-2, 1995, the Board adopted a multi-
class plan (the "Rule 18f-3 plan") on behalf of thirteen
series of the Trust, and at a meeting held on June 7,
1996, the Board adopted the Rule 18f-3 plan on behalf
of the Ivy Asia Pacific Fund, Ivy Global Natural
Resources Fund, Ivy Global Science & Technology Fund
and Ivy International Small Companies Fund. At a
meeting held on February 8, 1997, the Board adopted the Rule 18f-
3 plan on behalf of Ivy Pan-Europe Fund. The key
features of the Rule 18f-3 plan are as follows: (i)
shares of each class of the Fund represent an equal pro
rata interest in the Fund and generally have identical
voting, dividend, liquidation, and other rights,
preferences, powers, restrictions, limitations,
qualifications, terms and conditions, except that each class
bears certain class-specific expenses and has separate voting
rights on certain matters that relate solely to that
class or in

which the interests of shareholders of one class differ
from the interests of shareholders of another class;
(ii) subject to certain limitations described in the
Prospectus, shares of a particular class of the Fund
may be exchanged for shares of the same class of
another Ivy Mackenzie Fund; and (iii) the Fund's Class
B shares will convert automatically into Class A shares of
the Fund after a period of eight years, based on the relative
net asset value of such shares at the time of
conversion.

RULE 12B-1 DISTRIBUTION PLANS. The Board has
adopted on behalf of the Fund, in accordance with Rule
12b-1 under the 1940 Act ("Rule 12b-1"), separate
distribution plans pertaining to the Fund's Class A,
Class B and Class C shares (each, a "Plan"). In
adopting each Plan, a majority of the Independent Trustees
concluded, in accordance with the requirements of Rule 12b-1,
that there is a reasonable likelihood that each Plan will
benefit the Fund and its shareholders. The Board
believes that each Plan should result in greater sales
and/or fewer redemptions of the Fund's shares, although
it is impossible to know for certain the level of sales
and redemptions of the Fund's shares in the absence of
a Plan or under an alternative distribution
arrangement.

Under each Plan, the Fund pays IMDI a service fee,
accrued daily and paid monthly, at the annual rate of
up to 0.25% of the average daily net assets
attributable to its Class A shares, Class B shares or
Class C shares, as the case may be. The services for
which service fees may be paid include, among other
things, advising clients or customers regarding the purchase,
sale or retention of Fund shares, answering routine
inquiries concerning the Fund and assisting
shareholders in changing options or enrolling in
specific plans. Pursuant to each Plan, service fee
payments made out of or charged against the assets
attributable to the Fund's Class A, Class B or Class C shares
must be in reimbursement for services rendered for or on
behalf of the affected class. The expenses not
reimbursed in any one month may be reimbursed in a
subsequent month. The Class A Plan does not provide
for the payment of interest or carrying charges as
distribution expenses.

Under the Fund's Class B and Class C Plans, the
Fund also pays IMDI a distribution fee, accrued daily
and paid monthly, at the annual rate of 0.75% of the
average daily net assets attributable to its Class B or
Class C shares. IMDI may reallow to dealers all or a
portion of the service and distribution fees as IMDI
may determine from time to time. The distribution fee
compensates IMDI for expenses incurred in connection with
activities primarily intended to result in the sale of the
Fund's Class B or Class C shares, including the
printing of prospectuses and reports for persons other
than existing shareholders and the preparation,
printing and distribution of sales literature and
advertising materials. Pursuant to the Fund's Class B and Class
C Plans, IMDI may include interest, carrying or other
finance charges in its calculation of distribution
expenses, if not

prohibited from doing so pursuant to an order of or a
regulation adopted by the SEC.

Among other things, each Plan provides that (1)
IMDI will submit to the Board at least quarterly, and
the Board will review, written reports regarding all
amounts expended under the Plan and the purposes for
which such expenditures were made; (2) it will continue
in effect only so long as such continuance is approved
at least annually, and any material amendment thereto
is approved, by the vote of a majority of the Board, including
the Independent Trustees, cast in person at a meeting
called for that purpose; (3) payments by the Fund under
each Plan shall not be materially increased without the
affirmative vote of the holders of a majority of the
outstanding shares of the relevant class; and (4) while
each Plan is in effect, the selection and nomination of
Trustees who are not "interested persons" (as defined
in the 1940 Act) of the Trust shall be committed to the
discretion of the Trustees who are not "interested persons" of
the Trust.

IMDI may make payments for distribution assistance
and for administrative and accounting services from
resources that may include the management fees paid by
the Fund. IMDI also may make payments (such as the
service fee payments described above) to unaffiliated
broker-dealers for services rendered in the
distribution of the Fund's shares. To qualify for such payments,
shares may be subject to a minimum holding period.
However, no such payments will be made to any dealer or
broker if at the end of each year the amount of shares
held does not exceed a minimum amount. The minimum
holding period and minimum level of holdings will be
determined from time to time by IMDI.

A report of the amount expended pursuant to each
Plan, and the purposes for which such expenditures were
incurred, must be made to the Board for its review at
least quarterly. Since the Fund has not commenced
operations as of the date of this SAI, no payments had
been made in marketing Fund shares as of the date of
this SAI.

Each Plan may be amended at any time with respect
to the class of shares of the Fund to which the Plan
relates by vote of the Board, including a majority of
the Independent Trustees, cast in person at a meeting
called for the purpose of considering such amendment.
Each Plan may be terminated at any time with respect to
the class of shares to which the Plan relates, without payment
of any penalty, by vote of a majority of the Independent
Trustees, or by vote of a majority of the outstanding
voting securities of that class.

If the Distribution Agreement or the Distribution
Plans are terminated (or not renewed) with respect to
any of the Ivy Mackenzie Funds (or class of shares
thereof), each may continue in effect with respect to
any other fund (or class of shares

thereof) as to which they have not been terminated (or
have been renewed).

CUSTODIAN

Pursuant to a Custodian Agreement with the Trust,
Brown Brothers Harriman & Co. ("Brown Brothers" or the
"Custodian"), a private bank and member of the
principal securities exchanges, located at 40 Water
Street, Boston, Massachusetts 02109, maintains custody
of the assets of the Fund held in the United States.
Rules adopted under the 1940 Act permit the Trust to
maintain its foreign securities and cash in the custody of
certain eligible foreign banks and securities depositories.
Pursuant to those rules, Brown Brothers has entered into
subcustodial agreements for the holding of the Fund's
foreign securities. With respect to the Fund, Brown
Brothers may receive, as partial payment for its
services, a portion of the Trust's brokerage business,
subject to its ability to provide best price and
execution.

FUND ACCOUNTING SERVICES

Pursuant to the Fund Accounting Services Agreement
with the Trust, MIMI provides certain accounting and
pricing services for the Fund. As compensation for
these services, the Fund pays MIMI a monthly fee plus
out-of-pocket expenses as incurred. The monthly fee is
based upon the net assets of the Fund at the preceding
month end at the following rates: $1,250 when net
assets are $10 million and under; $2,500 when net assets are over
$10 million to $40 million; $5,000 when net assets are
over $40 million to $75 million; and $6,500 when net
assets are over $75 million.

Since the Fund has not commenced operations as of
the date of this SAI, no payments had been made with
respect to the provision of these services for the Fund
as of the date of this SAI.

TRANSFER AGENT AND DIVIDEND PAYING AGENT

Pursuant to a Transfer Agency and Shareholder
Service Agreement with the Trust, IMSC, a wholly owned
subsidiary of MIMI, is the transfer agent for the Fund.
For these services, the Fund pays a monthly fee at an
annual rate of $20 for each open Class A, Class B and
Class C account. In addition, the Fund pays a monthly
fee at an annual rate of $4.48 per account that is
closed plus certain out-of-pocket expenses. Certain broker-
dealers that maintain shareholder accounts with the Fund
through an omnibus account provide transfer agent and
other shareholder- related services that would otherwise
be provided by IMSC if the individual accounts that
comprise the omnibus account were opened by their
beneficial owners directly. IMSC pays such broker-
dealers a per account fee for each open account within the
omnibus account, or a fixed rate fee (e.g., .10%), based on the

average daily net asset value of the omnibus account
(or a combination thereof).

Since the Fund has not commenced operations as of
the date of this SAI, no payments had been made with
respect to the provision of these services for the Fund
as of the date of this SAI.

ADMINISTRATOR

Pursuant to an Administrative Services Agreement
with the Trust, MIMI provides certain administrative
services to the Fund. As compensation for these
services, the Fund pays MIMI a monthly fee at the
annual rate of .10% of the Fund's average daily net
assets.

Since the Fund has not commenced operations as of
the date of this SAI, no payments had been made with
respect to the provision of these services for the Fund
as of the date of this SAI.

AUDITORS

Coopers & Lybrand L.L.P., independent certified
public accountants, has been selected as auditors for
the Trust. The audit services performed by Coopers &
Lybrand L.L.P. include audits of the annual financial
statements of each of the funds of the Trust. Other
services provided principally relate to filings with
the SEC and the preparation of the Fund's tax returns.

CAPITALIZATION AND VOTING RIGHTS

The capitalization of the Trust consists of an
unlimited number of shares of beneficial interest (no
par value per share). When issued, shares of each
class of the Fund are fully paid, non-assessable,
redeemable and fully transferable. No class of shares
of the Fund has preemptive rights or subscription rights.

The Amended and Restated Declaration of Trust
permits the Board to create separate series or
portfolios and to divide any series or portfolio into
one or more classes. The Board has authorized eighteen
series, each of which represents a fund. The Board has
further authorized the issuance of Classes A, B and C
for the Fund, Ivy Asia Pacific Fund, Ivy Bond Fund, Ivy Canada
Fund, Ivy China Region Fund, Ivy Emerging Growth Fund, Ivy
Global Fund, Ivy Global Natural Resources Fund, Ivy
Global Science & Technology Fund, Ivy Growth Fund, Ivy
Growth with Income Fund, Ivy International Fund II
(expected effective date of May 13, 1997), Ivy
International Fund, Ivy International Small Companies

Fund, Ivy Latin America Strategy Fund, Ivy Money Market
Fund, Ivy New Century Fund and Ivy Pan-Europe Fund
(expected effective date of May 13, 1997), as well as
Class I for International Fund II (expected effective
date of May 13, 1997), Ivy Bond Fund, Ivy Global
Science & Technology Fund, Ivy International Fund and Ivy
International Small Companies Fund, and Class D for Ivy Growth
with Income Fund. [FN][The Class D shares of Ivy Growth
with Income Fund were initially issued as "Ivy Growth
with Income Fund -- Class C" to shareholders of
Mackenzie Growth & Income Fund, a former series of the
Company, in connection with the reorganization between
that Fund and Ivy Growth with Income Fund and not
offered for sale to the public. On February 29, 1996,
the Board resolved by written consent to establish a new class of
shares designated as "Class C" for all Ivy Fund
portfolios and to redesignate the shares of beneficial
interest of "Ivy Growth with Income Fund--Class C" as
shares of beneficial interest of "Ivy Growth with
Income Fund--Class D," which establishment and
redesignation, respectively, became effective on April 30, 1996.
The voting, dividend, liquidation and other rights,
preferences, powers, restrictions, limitations,
qualifications, terms and conditions of the Class D
shares of Ivy Growth with Income Fund, as set forth in
Ivy Fund's Declaration of Trust, as amended from time
to time, will not be changed by this redesignation.]

Shareholders have the right to vote for the
election of Board members and on any and all matters on
which they may be entitled to vote by law or by the
provisions of the Trust's By- Laws. The Trust is not
required to hold a regular annual meeting of
shareholders, and it does not intend to do so. Shares of each
class of the Fund entitle their holders to one vote per
share (with proportionate voting for fractional
shares). Shareholders of the Fund are entitled to vote
alone on matters that only affect the Fund. All
classes of shares of the Fund will vote together,
except with respect to the separate distribution plans
for the Fund's Class A, Class B and Class C shares, or when a
class vote is required by the 1940 Act. On matters relating
to all funds of the Trust, but affecting the funds
differently, separate votes by the shareholders of each
fund are required. Approval of an investment advisory
agreement and a change in fundamental policies would be
regarded as matters requiring separate voting by the
shareholders of each fund of the Trust. If the Board
determines that a matter does not affect the interests
of a Fund, then the shareholders of that fund will not
be entitled to vote on that matter. Matters that affect the
Trust in general, such as ratification of the selection of
independent public accountants, will be voted upon
collectively by the shareholders of all funds of the
Trust.

As used in this SAI and the Prospectus, the phrase
"majority vote of the outstanding shares" of a fund
means the vote of the lesser of: (1) 67% of the shares
of that fund (or of the Trust) present at a meeting if
the holders of more than 50% of the outstanding shares
are present in person or by proxy; or (2) more than 50%
of the outstanding shares of the fund (or of the Trust).

With respect to the submission to shareholder vote
of a matter requiring separate voting by a fund, the
matter shall have been effectively acted upon with
respect to that fund if a majority of the outstanding
voting securities of that fund votes for the approval
of the matter, notwithstanding that: (1) the matter
has not been approved by a majority of the outstanding
voting securities of any other fund of the Trust; or (2) the
matter has not been approved by a majority of the outstanding
voting securities of the Trust.

The Amended and Restated Declaration of Trust
provides that the holders of not less than two-thirds
of the outstanding shares of the Trust may remove a
person serving as trustee either by declaration in
writing or at a meeting called for such purpose. The
Board is required to call a meeting for the purpose of
considering the removal of a person serving as Trustee if
requested in writing to do so by the holders of not less than
10% of the outstanding shares of the Trust.
Shareholders will be assisted in communicating with
other shareholders in connection with the removal of a
Trustee as if Section 16(c) of the 1940 Act were
applicable.

As of April 30, 1997 no shares of the Fund have
been issued.

Under Massachusetts law, the Trust's shareholders
could, under certain circumstances, be held personally
liable for the obligations of the Trust. However, the
Amended and Restated Declaration of Trust disclaims
liability of the shareholders, Trustees or officers of
the Trust for acts or obligations of the Trust, which
are binding only on the assets and property of the
Trust, and requires that notice of the disclaimer be given in
each contract or obligation entered into or executed by the
Trust or its Trustees. The Amended and Restated
Declaration of Trust provides for indemnification out
of Fund property for all loss and expense of any
shareholder of the Fund held personally liable for the
obligations of the Fund. The risk of a shareholder of
the Trust incurring financial loss on account of shareholder
liability is limited to circumstances in which the Trust
itself would be unable to meet its obligations and,
thus, should be considered remote. No series of the
Trust is liable for the obligations of any other series
of the Trust.

NET ASSET VALUE

The share price, or value, for the separate
classes of shares of the Fund is called the net asset
value per share. The net asset value per share of the
Fund is computed by dividing the value of the assets of
the Fund, less its liabilities, by the

number of shares of the Fund outstanding. For purposes
of determining the aggregate net assets of the Fund,
cash and receivables will be valued at their realizable
amounts. A security listed or traded on a recognized
stock exchange or NASDAQ is valued at its last sale
price on the principal exchange on which the security
is traded. The value of a foreign security is
determined in its national currency as of the normal close of
trading on the foreign exchange on which it is traded or as
of the close of regular trading on the Exchange, if
that is earlier, and that value is then converted into
its U.S. dollar equivalent at the foreign exchange rate
in effect at noon, eastern time, on the day the value
of the foreign security is determined. If no sale is
reported at that time, the average between the current
bid and asked price is used. All other securities for which OTC
market quotations are readily available are valued at the
average between the current bid and asked price.
Interest will be recorded as accrued. Securities and
other assets for which market prices are not readily
available are valued at fair value as determined by IMI
and approved in good faith by the Board. Money market
instruments of the Fund are valued at amortized cost,
which approximates money market value.

The Fund's liabilities are allocated between its
classes. The total of such liabilities allocated to a
class plus that class's distribution fee and any other
expenses specially allocated to that class are then
deducted from the class's proportionate interest in the
Fund's assets, and the resulting amount for each class
is divided by the number of shares of that class
outstanding to produce the net asset value per share.

Portfolio securities are valued and the net asset
value per share is determined as of the close of
regular trading on the Exchange (normally 4:00 p.m.,
eastern time), every Monday through Friday (exclusive
of national business holidays). The Trust's offices
will be closed, and net asset value will not be
calculated, on the following national business holidays: New
Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas
Day. On those days when either or both of the Fund's
Custodian or the Exchange close early as a result of
that day being a partial holiday or otherwise, the
Trust reserves the right to advance the time on such
day by which purchase and redemption requests must be
received.

When the Fund writes an option, an amount equal to
the premium received by the Fund is included in the
Fund's Statement of Assets and Liabilities as an asset
and as an equivalent liability. The amount of the
liability will be subsequently marked-to-market daily
to reflect the current market value of the option
written. The current market value of a written option is
the last sale on the principal exchange on which such option is
traded or, in the absence of a sale, the last offering
price.

The premium paid by the Fund for the purchase of a
call or a put option will be deducted from its assets
and an equal amount will be included in the asset
section of the Fund's Statement of Assets and
Liabilities as an investment and subsequently adjusted
to the current market value of the option. For example, if the
current market value of the option exceeds the premium
paid, the excess would be unrealized appreciation and,
conversely, if the premium exceeds the current market
value, such excess would be unrealized depreciation.
The current market value of a purchased option will be
the last sale price on the principal exchange on which
the option is traded or, in the absence of a sale, the last
bid price. If the Fund exercises a call option which it has
purchased, the cost of the security which the Fund
purchased upon exercise will be increased by the
premium originally paid.

Valuations of below investment-grade debt
securities may be supplied by a pricing agent; if
valuations are not available through a pricing agent,
such valuations may be supplied through a broker or
otherwise as determined in good faith by the Board of
Trustees.

The sale of Fund shares will be suspended during
any period when the determination of its net asset
value is suspended pursuant to rules or orders of the
SEC and may be suspended by the Board whenever in its
judgment it is in the best interest of the Fund to do
so.

PORTFOLIO TURNOVER

The Fund purchases securities that are believed by
IMI to have above average potential for capital
appreciation. Common stocks are disposed of in
situations where it is believed that potential for such
appreciation has lessened or that other common stocks
have a greater potential. Therefore, the Fund may
purchase and sell securities without regard to the length of time
the security is to be, or has been, held. A change in
securities held by the Fund is known as "portfolio
turnover" and may involve the payment by the Fund of
dealer markup or underwriting commission and other
transaction costs on the sale of securities, as well as
on the reinvestment of the proceeds in other
securities. The Fund's portfolio turnover rate is calculated by
dividing the lesser of purchases or sales of portfolio
securities for the most recently completed fiscal year
by the monthly average of the value of the portfolio
securities owned by the Fund during that year. For
purposes of determining the Fund's portfolio turnover
rate, all securities whose maturities at the time of
acquisition were one year or less are excluded.

REDEMPTIONS

Shares of the Fund are redeemed at their net asset
value next determined after a proper redemption request
has been received by IMSC, less any applicable CDSC.

Unless a shareholder requests that the proceeds of
any redemption be wired to his or her bank account,
payment for shares tendered for redemption is made by
check within seven days after tender in proper form,
except that the Trust reserves the right to suspend the
right of redemption or to postpone the date of payment
upon redemption beyond seven days, (i) for any period
during which the Exchange is closed (other than customary weekend
and holiday closings) or during which trading on the
Exchange is restricted, (ii) for any period during
which an emergency exists as determined by the SEC as a
result of which disposal of securities owned by the
Fund is not reasonably practicable or it is not
reasonably practicable for the Fund to fairly determine
the value of its net assets, or (iii) for such other periods as
the SEC may by order permit for the protection of
shareholders of the Fund.

Under unusual circumstances, when the Board deems
it in the best interest of the Fund's shareholders, the
Fund may make payment for shares repurchased or
redeemed in whole or in part in securities of the Fund
taken at current values. If any such redemption in
kind is to be made, the Fund intends to make an
election pursuant to Rule 18f-1 under the 1940 Act. This will
require the Fund to redeem with cash at a shareholder's
election in any case where the redemption involves less
than $250,000 (or 1% of the Fund's net asset value at
the beginning of each 90-day period during which such
redemptions are in effect, if that amount is less than
$250,000). Should payment be made in securities, the
redeeming shareholder may incur brokerage costs in
converting such securities to cash.

The Trust may redeem those accounts of
shareholders who have maintained an investment,
including sales charges paid, of less than $1,000 in
the Fund for a period of more than 12 months. All
accounts below that minimum will be redeemed simultaneously when
MIMI deems it advisable. The $1,000 balance will be
determined by actual dollar amounts invested by the
shareholder, unaffected by market fluctuations. The
Trust will notify any such shareholder by certified
mail of its intention to redeem such account, and the
shareholder shall have 60 days from the date of such
letter to invest such additional sums as shall raise the
value of such account above that minimum. Should the shareholder
fail to forward such sum within 60 days of the date of
the Trust's letter of notification, the Trust will
redeem the shares held in such account and transmit the
redemption in value thereof to the shareholder.
However, those shareholders who are investing pursuant
to the Automatic Investment Method will not be redeemed
automatically unless they have ceased making payments
pursuant to the plan for a period of at least six consecutive
months, and these shareholders will be given six-months'
notice by the Trust before such redemption.
Shareholders in a qualified retirement, pension or
profit sharing plan who wish to avoid tax consequences
must "rollover" any sum so redeemed into another
qualified plan within 60 days. The Board may change the minimum
account size.

If a shareholder has given authorization for
telephonic redemption privilege, shares can be redeemed
and proceeds sent by Federal wire to a single
previously designated bank account. Delivery of the
proceeds of a wire redemption request of $250,000 or
more may be delayed by the Fund for up to seven days if deemed
appropriate under then-current market conditions. The
Trust reserves the right to change this minimum or to
terminate the telephonic redemption privilege without
prior notice. The Trust cannot be responsible for the
efficiency of the Federal wire system of the
shareholder's dealer of record or bank. The
shareholder is responsible for any charges by the shareholder's
bank.

The Fund employs reasonable procedures that
require personal identification prior to acting on
redemption or exchange instructions communicated by
telephone to confirm that such instructions are
genuine. In the absence of such instructions, the Fund
may be liable for any losses due to unauthorized or
fraudulent telephone instructions.

CONVERSION OF CLASS B SHARES

As described in the Prospectus, Class B shares of
the Fund will automatically convert to Class A shares
of the Fund, based on the relative net asset values per
share of the two classes, no later than the month
following the eighth anniversary of the initial
issuance of such Class B shares of the Fund occurs. For
the purpose of calculating the holding period required for
conversion of Class B shares, the date of initial issuance
shall mean: (1) the date on which such Class B shares
were issued, or (2) for Class B shares obtained through
an exchange, or a series of exchanges, (subject to the
exchange privileges for Class B shares) the date on
which the original Class B shares were issued. For
purposes of conversion of Class B shares, Class B
shares purchased through the reinvestment of dividends and
capital gain distributions paid in respect of Class B shares
will be held in a separate sub-account. Each time any
Class B shares in the shareholder's regular account
(other than those shares in the sub-account) convert to
Class A shares, a pro rata portion of the Class B
shares in the sub-account will also convert to Class A
shares. The portion will be determined by the ratio that
the shareholder's Class B shares converting to Class A shares
bears to the shareholder's total Class B shares not
acquired through the reinvestment of dividends and
capital gain distributions.

TAXATION

The following is a general discussion of certain
tax rules thought to be applicable with respect to the
Fund. It is merely a summary and is not an exhaustive
discussion of all possible situations or of all
potentially applicable taxes. Accordingly,
shareholders and prospective shareholders should consult a

competent tax advisor about the tax consequences to
them of investing in the Fund.

The Fund intends to be taxed as a regulated
investment company under Subchapter M of the Code.
Accordingly, the Fund must, among other things, (a)
derive in each taxable year at least 90% of its gross
income from dividends, interest, payments with respect
to certain securities loans, and gains from the sale or
other disposition of stock, securities or foreign currencies,
or other income derived with respect to its business of
investing in such stock, securities or currencies; (b)
derive in each taxable year less than 30% of its gross
income from the sale or other disposition of certain
assets held less than three months, namely: (i) stock
or securities; (ii) options, futures, or forward
contracts (other than those on foreign currencies); or
(iii) foreign currencies (or options, futures, or forward
contracts on foreign currencies) that are not directly related
to the Fund's principal business of investing in stock
or securities (or options and futures with respect to
stock or securities) (the "30% Limitation"); and (c)
diversify its holdings so that, at the end of each
fiscal quarter, (i) at least 50% of the market value of
the Fund's assets is represented by cash, U.S. Government
securities, the securities of other regulated investment
companies and other securities, with such other securities
limited, in respect of any one issuer, to an amount not
greater than 5% of the value of the Fund's total assets
and 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its
total assets is invested in the securities of any one
issuer (other than U.S. Government securities and the
securities of other regulated investment
companies).

As a regulated investment company, the Fund
generally will not be subject to U.S. Federal income
tax on its income and gains that it distributes to
shareholders, if at least 90% of its investment company
taxable income (which includes, among other items,
dividends, interest and the excess of any short-term
capital gains over long-term capital losses) for the taxable year
is distributed. The Fund intends to distribute all such
income.

treated as paid on December 31 of the current calendar
year if it is declared by the Fund in October, November
or December of the year with a record date in such a
month and paid by the Fund during January of the
following year. Such distributions will be taxable to
shareholders in the calendar year the distributions are
declared, rather than the calendar year in which the
distributions are received.

OPTIONS, FUTURES AND FOREIGN CURRENCY FORWARD CONTRACTS

The taxation of equity options and OTC options on
debt securities is governed by Code section 1234.
Pursuant to Code section 1234, the premium received by
the Fund for selling a put or call option is not
included in income at the time of receipt. If the
option expires, the premium is short-term capital gain to
the Fund. If the Fund enters into a closing transaction, the
difference between the amount paid to close out its
position and the premium received is short-term capital
gain or loss. If a call option written by the Fund is
exercised, thereby requiring the Fund to sell the
underlying security, the premium will increase the
amount realized upon the sale of such security and any
resulting gain or loss will be a capital gain or loss, and
will be long-term or short-term depending upon the holding
period of the security. With respect to a put or call
option that is purchased by the Fund, if the option is
sold, any resulting gain or loss will be a capital gain
or loss, and will be long-term or short-term, depending
upon the holding period of the option. If the option
expires, the resulting loss is a capital loss and is
long-term or short-term, depending upon the holding period of the
option. If the option is exercised, the cost of the
option, in the case of a call option, is added to the
basis of the purchased security and, in the case of a
put option, reduces the amount realized on the
underlying security in determining gain or loss.

Some of the options, futures and foreign currency
forward contracts in which the Fund may invest may be
"section 1256 contracts." Gains (or losses) on these
contracts generally are considered to be 60% long-term
and 40% short-term capital gains or losses; however
foreign currency gains or losses arising from certain
section 1256 contracts are ordinary in character. Also,
section 1256 contracts held by the Fund at the end of each
taxable year (and on certain other dates prescribed in the
Code) are "marked-to-market" with the result that
unrealized gains or losses are treated as though they
were realized.

The transactions in options, futures and forward
contracts undertaken by the Fund may result in
"straddles" for Federal income tax purposes. The
straddle rules may affect the character of gains or
losses realized by the Fund. In addition, losses
realized by the Fund on positions that are part of a straddle may
be deferred under the straddle rules, rather than being
taken into account in calculating the taxable income
for the taxable year in which such losses are realized.
Because only a few regulations implementing the
straddle rules have been

promulgated, the consequences of such transactions to
the Fund are not entirely clear. The straddle rules
may increase the amount of short-term capital gain
realized by the Fund, which is taxed as ordinary income
when distributed to shareholders.

The Fund may make one or more of the elections
available under the Code which are applicable to
straddles. If the Fund makes any of the elections, the
amount, character and timing of the recognition of
gains or losses from the affected straddle positions
will be determined under rules that vary according to
the election(s) made. The rules applicable under certain of the
elections may operate to accelerate the recognition of
gains or losses from the affected straddle positions.

Because application of the straddle rules may
affect the character of gains or losses, defer losses
and/or accelerate the recognition of gains or losses
from the affected straddle positions, the amount which
must be distributed to shareholders as ordinary income
or long-term capital gain, may be increased or
decreased substantially as compared to a fund that did not engage
in such transactions.

The 30% Limitation and the diversification
requirements applicable to the Fund's assets may limit
the extent to which the Fund will be able to engage in
transactions in options, futures and forward contracts.

CURRENCY FLUCTUATIONS -- "SECTION 988" GAINS OR LOSSES

Gains or losses attributable to fluctuations in
exchange rates which occur between the time the Fund
accrues receivables or liabilities denominated in a
foreign currency and the time the Fund actually
collects such receivables or pays such liabilities
generally are treated as ordinary income or ordinary loss.
Similarly, on disposition of some investments, including debt
securities denominated in a foreign currency and certain
options, futures and forward contracts, gains or losses
attributable to fluctuations in the value of the
foreign currency between the date of acquisition of the
security or contract and the date of disposition also
are treated as ordinary gain or loss. These gains and
losses, referred to under the Code as "section 988"
gains or losses, increase or decrease the amount of the Fund's
investment company taxable income available to be
distributed to its shareholders as ordinary income. If
section 988 losses exceed other investment company
taxable income during a taxable year, the Fund would
not be able to make any ordinary dividend
distributions, or distributions made before the losses were
realized would be recharacterized as a return of capital to
shareholders, rather than as an ordinary dividend, reducing
each shareholder's basis in his or her Fund shares.

INVESTMENT IN PASSIVE FOREIGN INVESTMENT COMPANIES

The Fund may invest in shares of foreign
corporations which may be classified under the Code as
passive foreign investment companies ("PFICs"). In
general, a foreign corporation is classified as a PFIC
if at least one-half of its assets constitute
investment-type assets, or 75% or more of its gross
income is investment-type income. If the Fund receives a so-
called "excess distribution" with respect to PFIC stock, the
Fund itself may be subject to a tax on a portion of the
excess distribution, whether or not the corresponding
income is distributed by the Fund to shareholders. In
general, under the PFIC rules, an excess distribution
is treated as having been realized ratably over the
period during which the Fund held the PFIC shares. The
Fund itself will be subject to tax on the portion, if
any, of an excess distribution that is so allocated to
prior Fund taxable years and an interest factor will be added
to the tax, as if the tax had been payable in such prior
taxable years. Certain distributions from a PFIC as
well as gain from the sale of PFIC shares are treated
as excess distributions. Excess distributions are
characterized as ordinary income even though, absent
application of the PFIC rules, certain excess
distributions might have been classified as capital gain.

The Fund may be eligible to elect alternative tax
treatment with respect to PFIC shares. Under an
election that currently is available in some
circumstances, the Fund generally would be required to
include in its gross income its share of the earnings
of a PFIC on a current basis, regardless of whether distributions
are received from the PFIC in a given year. If this
election were made, the special rules, discussed above,
relating to the taxation of excess distributions, would
not apply. In addition, other elections may become
available that would affect the tax treatment of PFIC
shares held by the Fund.

DEBT SECURITIES ACQUIRED AT A DISCOUNT

Some of the debt securities (with a fixed maturity
date of more than one year from the date of issuance)
that may be acquired by the Fund may be treated as debt
securities that are issued originally at a discount.
Generally, the amount of the original issue discount
("OID") is treated as interest income and is included
in income over the term of the debt security, even
though payment of that amount is not received until a later time,
usually when the debt security matures.

If the Fund invests in certain high yield original
issue discount obligations issued by corporations, a
portion of the original issue discount accruing on the
obligation may be eligible for the deduction for
dividends received by corporations. In such event,
dividends of investment company taxable income received
from the Fund by its corporate shareholders, to the
extent attributable to such portion of accrued original
issue discount, may be eligible for this deduction for
dividends received by corporations if so designated by
the Fund in a written notice to shareholders.

Some of the debt securities (with a fixed maturity
date of more than one year from the date of issuance)
that may be acquired by the Fund in the secondary
market may be treated as having market discount.
Generally, gain recognized on the disposition of, and
any partial payment of principal on, a debt security
having market discount is treated as ordinary income to
the extent the gain, or principal payment, does not exceed the
"accrued market discount" on such debt security. In
addition, the deduction of any interest expenses
attributable to debt securities having market discount
may be deferred. Market discount generally accrues in
equal daily installments. The Fund may make one or
more of the elections applicable to debt securities
having market discount, which could affect the
character and timing of recognition of income.

Some debt securities (with a fixed maturity date
of one year or less from the date of issuance) that may
be acquired by the Fund may be treated as having
acquisition discount, or OID in the case of certain
types of debt securities. Generally, the Fund will be
required to include the acquisition discount, or OID, in
income over the term of the debt security, even though payment of
that amount is not received until a later time, usually
when the debt security matures. The Fund may make one
or more of the elections applicable to debt securities
having acquisition discount, or OID, which could affect
the character and timing of recognition of income.

The Fund generally will be required to distribute
dividends to shareholders representing discount on debt
securities that is currently includible in income, even
though cash representing such income may not have been
received by the Fund. Cash to pay such dividends may
be obtained from sales proceeds of securities held by
the Fund.

DISTRIBUTIONS

Distributions of investment company taxable income
are taxable to a U.S. shareholder as ordinary income,
whether paid in cash or shares. Dividends paid by the
Fund to a corporate shareholder, to the extent such
dividends are attributable to dividends received from
U.S. corporations by the Fund, may qualify for the
dividends received deduction. However, the revised
alternative minimum tax applicable to corporations may
reduce the value of the dividends received deduction.
Distributions of net capital gains (the excess of net long-term
capital gains over net short-term capital losses), if any,
designated by the Fund as capital gain dividends, are
taxable as long-term capital gains, whether paid in
cash or in shares, regardless of how long the
shareholder has held the Fund's shares and are not
eligible for the dividends received deduction.
Shareholders receiving distributions in the form of newly issued
shares will have a cost basis in each share received
equal to the net asset value of a share of the Fund on
the distribution date. A distribution of an amount in
excess of the Fund's current and

accumulated earnings and profits will be treated by a
shareholder as a return of capital which is applied
against and reduces the shareholder's basis in his or
her shares. To the extent that the amount of any such
distribution exceeds the shareholder's basis in his or
her shares, the excess will be treated by the
shareholder as gain from a sale or exchange of the shares.
Shareholders will be notified annually as to the U.S. Federal
tax status of distributions and shareholders receiving
distributions in the form of newly issued shares will
receive a report as to the net asset value of the
shares received.

If the net asset value of shares is reduced below
a shareholder's cost as a result of a distribution by
the Fund, such distribution generally will be taxable
even though it represents a return of invested capital.
Shareholders should be careful to consider the tax
implications of buying shares just prior to a
distribution. The price of shares purchased at this
time may reflect the amount of the forthcoming distribution.
Those purchasing just prior to a distribution will receive a
distribution which generally will be taxable to them.

DISPOSITION OF SHARES

In some cases, shareholders will not be permitted
to take all or portion of their sales loads into
account for purposes of determining the amount of gain
or loss realized on the disposition of their shares.
This prohibition generally applies where (1) the
shareholder incurs a sales load in acquiring the shares
of the Fund, (2) the shares are disposed of before the
91st day after the date on which they were acquired, and (3) the
shareholder subsequently acquires shares in the Fund or
another regulated investment company and the otherwise
applicable sales charge is reduced under a
"reinvestment right" received upon the initial purchase
of Fund shares. The term "reinvestment right" means
any right to acquire shares of one or more regulated

investment companies without the payment of a sales
load or with the payment of a reduced sales charge.
Sales charges affected by this rule are treated as if
they were incurred with respect to the shares acquired
under the reinvestment right. This provision may be
applied to successive acquisitions of fund shares.

FOREIGN WITHHOLDING TAXES

Income received by the Fund from sources within a
foreign country may be subject to withholding and other
taxes imposed by that country.

If more than 50% of the value of the Fund's total
assets at the close of its taxable year consists of
securities of foreign corporations, the Fund will be
eligible and may elect to "pass- through" to the Fund's
shareholders the amount of foreign income and similar
taxes paid by the Fund. Pursuant to this election, a
shareholder will be required to include in gross income (in
addition to taxable dividends actually received) his or her
pro rata share of the foreign income and similar taxes
paid by the Fund, and will be entitled either to deduct
his or her pro rata share of foreign income and similar
taxes in computing his or her taxable income or to use
it as a foreign tax credit against his or her U.S.
Federal income taxes, subject to limitations. No
deduction for foreign taxes may be claimed by a shareholder who
does not itemize deductions. Foreign taxes generally may
not be deducted by a shareholder that is an individual
in computing the alternative minimum tax. Each
shareholder will be notified within 60 days after the
close of the Fund's taxable year whether the foreign
taxes paid by the Fund will "pass-through" for that
year and, if so, such notification will designate (1) the
shareholder's portion of the foreign taxes paid to each such
country and (2) the portion of the dividend which represents
income derived from sources within each such country.

Generally, a credit for foreign taxes is subject
to the limitation that it may not exceed the
shareholder's U.S. tax attributable to his or her total
foreign source taxable income. For this purpose, if
the Fund makes the election described in the preceding
paragraph, the source of the Fund's income flows
through to its shareholders. With respect to the Fund, gains
from the sale of securities generally will be treated as
derived from U.S. sources and section 988 gains will be
treated as ordinary income derived from U.S. sources.
The limitation on the foreign tax credit is applied
separately to foreign source passive income, including
foreign source passive income received from the Fund.
In addition, the foreign tax credit may offset only 90%
of the revised alternative minimum tax imposed on
corporations and individuals.

BACKUP WITHHOLDING

The Fund will be required to report to the
Internal Revenue Service ("IRS") all taxable
distributions, as well as gross proceeds from the
redemption of the Fund's shares, except in the case of
certain exempt shareholders. All such distributions and
proceeds will be subject to withholding of Federal income tax at
a rate of 31% ("backup withholding") in the case of non-
exempt shareholders if (1) the shareholder fails to
furnish the Fund with and to certify the shareholder's
correct taxpayer identification number or social
security number, (2) the IRS notifies the shareholder
or the Fund that the shareholder has failed to report
properly certain interest and dividend income to the
IRS and to respond to notices to that effect, or (3) when
required to do so, the shareholder fails to certify that he or
she is not subject to backup withholding. If the
withholding provisions are applicable, any such
distributions or proceeds, whether reinvested in
additional shares or taken in cash, will be reduced by
the amounts required to be withheld.

Distributions may also be subject to additional
state, local and foreign taxes depending on each
shareholder's particular situation. Non-U.S.
shareholders may be subject to U.S. tax rules that
differ significantly from those summarized above. This
discussion does not purport to deal with all of the tax
consequences applicable to the Fund or shareholders.
Shareholders are advised to consult their own tax advisers with
respect to the particular tax consequences to them of an
investment in the Fund.

PERFORMANCE INFORMATION

Comparisons of the Fund's performance may be made
with respect to various unmanaged indices (including
the TSE 300, S&P 100, S&P 500, Dow Jones Industrial
Average and Major Market Index) which assume
reinvestment of dividends, but do not reflect
deductions for administrative and management costs. The Fund
also may be compared to Lipper's Analytical Reports, reports
produced by a widely used independent research firm that
ranks mutual funds by overall performance, investment
objectives and assets, or to Wiesenberger Reports.
Lipper Analytical Services does not include sales
charges in computing performance. Further information
on comparisons is contained in the Prospectus.
Performance rankings will be based on historical information and
are not intended to indicate future performance.

In addition, the Trust may, from time to time,
include the average annual total return and the
cumulative total return of shares of the Fund in
advertisements, promotional literature or reports to
shareholders or prospective investors.

AVERAGE ANNUAL TOTAL RETURN. Quotations of
standardized average annual total return ("Standardized
Return") for a specific class of shares of the Fund
will be expressed in terms

of the average annual compounded rate of return that
would cause a hypothetical investment in that class of
the Fund made on the first day of a designated period
to equal the ending redeemable value ("ERV") of such
hypothetical investment on the last day of the
designated period, according to the following formula:

P(1 + T){superscript n} = ERV

Where: P = a hypothetical initial payment of
$1,000 to purchase shares of a
specific Class

T = the average annual total return of
shares of that Class

n = the number of years

ERV = the ending redeemable value of a
hypothetical $1,000 payment made at
the beginning of the period.

For purposes of the above computation for the
Fund, it is assumed that all dividends and capital
gains distributions made by the Fund are reinvested at
net asset value in additional shares of the same class
during the designated period. In calculating the
ending redeemable value for Class A shares and assuming
complete redemption at the end of the applicable period,
the maximum 4.75% sales charge is deducted from the initial
$1,000 payment and, for Class B shares and Class C shares, the
applicable CDSC imposed upon redemption of Class B
shares or Class C shares held for the period is
deducted. Standardized Return quotations for the Fund
do not take into account any required payments for
federal or state income taxes. Standardized Return
quotations for Class B shares for periods of over eight
years will reflect conversion of the Class B shares to
Class A shares at the end of the eighth year. Standardized
Return quotations are determined to the nearest 1/100 of 1%.

The Fund may, from time to time, include in
advertisements, promotional literature or reports to
shareholders or prospective investors total return data
that are not calculated according to the formula set
forth above ("Non-Standardized Return"). Neither
initial nor CDSCs are taken into account in calculating Non-
Standardized Return; a sales charge, if deducted, would reduce
the return.

In determining the average annual total return for
a specific Class of shares of the Fund, recurring fees,
if any, that are charged to all shareholder accounts
are taken into consideration. For any account fees
that vary with the size of the account of the Fund, the
account fee used for purposes of the following
computations is assumed to be the fee that would be
charged to the mean account size of the Fund.

Since the Fund has not commenced operations as of
the date of this SAI, no performance information is
available for the Fund as of the date of this SAI.

Performance quotations for the Fund will vary from
time to time depending on market conditions, the
composition of the Fund's portfolio and operating
expenses of the Fund. These factors and possible
differences in the methods used in calculating
performance quotations should be considered when
comparing performance information regarding the Fund's shares
with information published for other investment companies
and other investment vehicles. Performance quotations
should also be considered relative to changes in the
value of the Fund's shares and the risks associated
with the Fund's investment objectives and policies. At
any time in the future, performance quotations may be
higher or lower than past performance quotations and there
can be no assurance that any historical performance quotation
will continue in the future.

The Fund may also cite endorsements or use for
comparison their performance rankings and listings
reported in such newspapers or business or consumer
publications as, among others: AAII Journal, Barron's,
Boston Business Journal, Boston Globe, Boston Herald,
Business Week, Consumer's Digest, Consumer Guide
Publications, Changing Times, Financial Planning, Financial
World, Forbes, Fortune, Growth Fund Guide, Houston Post,
Institutional Investor, International Fund Monitor, Investor's
Daily, Los Angeles Times, Medical Economics, Miami
Herald, Money Mutual Fund Forecaster, Mutual Fund
Letter, Mutual Fund Source Book, Mutual Fund Values,
National Underwriter Nelson's Directory of Investment
Managers, New York Times, Newsweek, No Load Fund
Investor, No Load Fund* X, Oakland Tribune, Pension World,
Pensions and Investment Age, Personal Investor, Rugg and
Steele, Time, U.S. News and World Report, USA Today,
The Wall Street Journal, and Washington Post.

FINANCIAL STATEMENTS

As of April 30, 1997 the Fund has not
commenced operations, and therefore has not issued
historical financial statements. After the Fund
commences operations, it will issue an Annual Report to
shareholders for each fiscal year ended

December 31 and a Semi-Annual Report to shareholders
for each period June 30.

APPENDIX A
DESCRIPTION OF STANDARD & POOR'S CORPORATION
("S&P") AND MOODY'S INVESTORS SERVICE, INC.
("MOODY'S") CORPORATE BOND AND
COMMERCIAL PAPER RATINGS

[From "Moody's Bond Record," November 1994 Issue
(Moody's Investors Service, New York, 1994), and
"Standard & Poor's Municipal Ratings Handbook," October
1994 Issue (McGraw Hill, New York, 1994).]

MOODY'S:

shortcomings. Bonds which are rated C are the lowest
rated class of bonds and issues so rated can be
regarded as having extremely poor prospects of ever
attaining any real investment standing.

S&P:

will likely have some quality and protective
characteristics, these are outweighed by large
uncertainties or exposures to adverse conditions. Debt
rated BB has less near-term vulnerability to default
than other speculative issues. However, it faces major
ongoing uncertainties or exposure to adverse business,
financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal
payments. The BB rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied
BBB- rating. Debt rated B has a greater vulnerability
to default but currently has the capacity to meet
interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely
impair capacity or willingness to pay interest and
repay principal. The B rating category is also used
for debt subordinated to senior debt that is assigned an actual
or implied BB or BB- rating. Debt rated CCC has a
currently identifiable vulnerability to default, and is
dependent upon favorable business, financial, and
economic conditions to meet timely payment of interest
and repayment of principal. In the event of adverse
business, financial or economic conditions, it is not
likely to have the capacity to pay interest and repay
principal. The CCC rating category is also used for debt
subordinated to senior debt that is assigned an actual or
implied B or B- rating. The rating CC typically is
applied to debt subordinated to senior debt which is
assigned an actual or implied CCC debt rating. The
rating C typically is applied to debt subordinated to
senior debt which is assigned an actual or implied CCC-
debt rating. The C rating may be used to cover a
situation where a bankruptcy petition has been filed, but debt
service payments are continued.

(b) COMMERCIAL PAPER. An S&P commercial paper
rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of
no more than 365 days.

Issues rated B are regarded as having only
speculative capacity for timely payment. The C rating
is assigned to short- term debt obligations with a
doubtful capacity for payment.

IVY MONEY MARKET FUND

a series of

IVY FUND
Via Mizner Financial Plaza, Suite 300
700 South Federal Highway
Boca Raton, Florida 33432

STATEMENT OF ADDITIONAL INFORMATION

April 30, 1997

__________________________________________________________

Ivy Fund (the "Trust") is an open-end management
investment company that consists of sixteen fully
managed portfolios, each of which (except for Ivy Latin
America Strategy Fund and Ivy International Bond Fund)
is diversified. Each of Ivy Latin America Strategy
Fund and Ivy International Bond Fund is a non-
diversified portfolio. This Statement of Additional Information
("SAI") describes one of these portfolios: Ivy Money
Market Fund (the "Fund"). The other fifteen portfolios
of the Trust are described in separate Statements of
Additional Information.

This SAI is not a prospectus, and should be read
in conjunction with the prospectus for the Fund dated
April 30, 1997 (the "Prospectus"), which may be
obtained upon request and without charge from the Trust
at the Distributor's address and telephone number
listed below.

INVESTMENT MANAGER

Ivy Management, Inc. ("IMI")
Via Mizner Financial Plaza, Suite 300
700 South Federal Highway
Boca Raton, Florida 33432
Telephone: (800) 777-6472

DISTRIBUTOR

Ivy Mackenzie Distributors, Inc.
Via Mizner Financial Plaza, Suite 300
700 South Federal Highway
Boca Raton, Florida 33432
Telephone: (800) 456-5111

TABLE OF CONTENTS

PAGE

INVESTMENT OBJECTIVE AND POLICIES . . . . . . . .
. . . 1 U.S. GOVERNMENT SECURITIES . . . . . . .
. . . . . . . . 1 COMMERCIAL PAPER . . . . . . .
. . . . . . . . . . . . . 2 BANKING INDUSTRY AND
SAVINGS AND LOAN OBLIGATIONS . . . 2 INVESTMENT
RESTRICTIONS . . . . . . . . . . . . . . . . 2
A ADDITIONAL RESTRICTIONS . . . . . . . . . . . .
. . . . 4 ADDITIONAL RIGHTS AND PRIVILEGES . . .
. . . . . . . . . 5 AUTOMATIC INVESTMENT METHOD
. . . . . . . . . . . . . . 5 EXCHANGE OF SHARES
. . . . . . . . . . . . . . . . . . . 5
RETIREMENT PLANS . . . . . . . . . . . . . . . . . . . . 6
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) . . . . . . .
6 DEFERRED COMPENSATION FOR PUBLIC SCHOOLS
AND CHARITABLE ORGANIZATIONS ("403(B)(7)
ACCOUNT") . . . . . . . . . . . . . . .
. . . 8 SIMPLIFIED EMPLOYEE PENSION ("SEP") IRAS
. . . . . . . 9 SYSTEMATIC WITHDRAWAL PLAN . .
. . . . . . . . . . . . . 9 GROUP SYSTEMATIC
INVESTMENT PROGRAM . . . . . . . . . . 9
BROKERAGE ALLOCATION . . . . . . . . . . . . . . . . . . 10
PERSONAL INVESTMENTS BY EMPLOYEES OF IMI . . . . . . . .
15 INVESTMENT ADVISORY AND OTHER SERVICES . . . .
. . . . . 17 BUSINESS MANAGEMENT AND INVESTMENT
ADVISORY SERVICES . . 17 DISTRIBUTION SERVICES .
. . . . . . . . . . . . . . . . 19 CUSTODIAN . .
. . . . . . . . . . . . . . . . . . . . . 21 FUND
ACCOUNTING SERVICES . . . . . . . . . . . . . . . . 21
TRANSFER AND DIVIDEND PAYING AGENT . . . . . . . . . . . 21
ADMINISTRATOR . . . . . . . . . . . . . . . . . . .
. . 21 AUDITORS . . . . . . . . . . . . . . . . .
. . . . . . . 21 CAPITALIZATION AND VOTING RIGHTS
. . . . . . . . . . . . 22 NET ASSET VALUE . . .
. . . . . . . . . . . . . . . . . 23 REDEMPTIONS
. . . . . . . . . . . . . . . . . . . . . . 24
TAXATION . . . . . . . . . . . . . . . . . . . . . . . . 25
GENERAL . . . . . . . . . . . . . . . . . . . . . . . .
25 DEBT SECURITIES ACQUIRED AT A DISCOUNT . . . .
. . . . . 26 DISTRIBUTIONS . . . . . . . . . . .
. . . . . . . . . . 27 DISPOSITION OF SHARES . .
. . . . . . . . . . . . . . . 27 BACKUP
WITHHOLDING . . . . . . . . . . . . . . . . . . . 28
OTHER INFORMATION . . . . . . . . . . . . . . . . . . . 28
CALCULATION OF YIELD . . . . . . . . . . . . . . . . .
. 28 STANDARDIZED YIELD QUOTATIONS . . . . . . .
. . . . . . 28 OTHER QUOTATIONS, COMPARISONS AND
GENERAL INFORMATION . 29 FINANCIAL STATEMENTS .
. . . . . . . . . . . . . . . . . 30 APPENDIX A
DESCRIPTION OF STANDARD & POOR'S CORPORATION
("S&P") AND MOODY'S INVESTORS SERVICE, INC.
("MOODY'S") CORPORATE BOND AND
COMMERCIAL PAPER RATINGS . . . . . . . . 31

INVESTMENT OBJECTIVE AND POLICIES

The Trust is a diversified open-end management
investment company organized as a Massachusetts
business trust on December 21, 1983. The Fund's
investment objective and general investment policies
are described in the Prospectus. Additional information
concerning the Fund's investments is set forth below.

U.S. GOVERNMENT SECURITIES

U.S. Government securities are obligations of, or
guaranteed by, the U.S. Government securities are
obligations of, or guaranteed by, the U.S. Government,
its agencies or instrumentalities. Securities
guaranteed by the U.S. Government include: (1) direct
obligations of the U.S. Treasury (such as Treasury
bills, notes, and bonds) and (2) Federal agency
obligations guaranteed as to principal and interest by the U.S.
Treasury (such as GNMA certificates, which are mortgage-
backed securities). When such securities are held to
maturity, the payment of principal and interest is
unconditionally guaranteed by the U.S. Government, and
thus they are of the highest possible credit quality.
U.S. Government securities that are not held to
maturity are subject to variations in market value due to
fluctuations in interest rates.

Mortgage-backed securities are securities
representing part ownership of a pool of mortgage
loans. For example, GNMA certificates are such
securities in which the timely payment of principal and
interest is guaranteed by the full faith and credit of
the U.S. Government. Although the mortgage loans in the pool
will have maturities of up to 30 years, the actual average
life of the loans typically will be substantially less
because the mortgages will be subject to principal
amortization and may be prepaid prior to maturity.
Prepayment rates vary widely and may be affected by
changes in market interest rates. In periods of
falling interest rates, the rate of prepayment tends to increase,
thereby shortening the actual average life of the
security. Conversely, rising interest rates tend to
decrease the rate of prepayment, thereby lengthening
the actual average life of the security (and increasing
the security's price volatility). Accordingly, it is
not possible to predict accurately the average life of
a particular pool. Reinvestment of prepayment may occur
at higher or lower rates than the original yield on the
certificates. Due to the prepayment feature and the need to
reinvest prepayments of principal at current rates, mortgage-
backed securities can be less effective than typical
bonds of similar maturities at "locking in" yields
during periods of declining interest rates. Such
securities may appreciate or decline in market value
during periods of declining or rising interest rates,
respectively.

Securities issued by U.S. Government
instrumentalities and certain federal agencies are
neither direct obligations of nor guaranteed by the
U.S. Treasury; however, they involve Federal

sponsorship in one way or another. Some are backed by
specific types of collateral, some are supported by the
issuer's right to borrow from the Treasury, some are
supported by the discretionary authority of the
Treasury to purchase certain obligations of the issuer,
others are supported only by the credit of the issuing
government agency or instrumentality. These agencies and
instrumentalities include, but are not limited to, Federal Land
Banks, Farmers Home Administration, Central Bank for
Cooperatives, Federal Intermediate Credit Banks, Federal Home
Loan Banks, Federal National Mortgage Association,
Federal Home Loan Mortgage Corporation, and Student
Loan Marketing Association.

COMMERCIAL PAPER

Commercial paper represents short-term unsecured
promissory notes issued in bearer form by bank holding
companies, corporations and finance companies. The
Fund may invest in commercial paper that is rated A-1
by S&P or Prime-1 by Moody's or, if not rated by
Moody's or S&P, is issued by companies having an
outstanding debt issue rated Aaa or Aa by Moody's or AAA or AA
by S&P.

BANKING INDUSTRY AND SAVINGS AND LOAN OBLIGATIONS

The Fund may invest in bank obligations, which may
include certificates of deposit, bankers' acceptances
and other short- term debt obligations. Certificates of
deposit are negotiable certificates issued against
funds deposited in a commercial bank for a definite
period of time and earning a specified return.
Bankers' acceptances are negotiable drafts or bills of exchange,
normally drawn by an importer or exporter to pay for
specific merchandise, that are "accepted" by a bank,
meaning, in effect, that the bank unconditionally
agrees to pay the face value of the instrument on
maturity.

The Fund may invest in certificates of deposit of
large domestic banks (i.e., banks that at the time of
their most recent annual financial statements show
total assets in excess of $1 billion), including
foreign branches of such domestic banks, and of smaller
banks as described below. The Fund will not invest in
certificates of deposit of foreign banks. Investment in
certificates of deposit issued by foreign branches of domestic
banks involves investment risks that are different in some
respects from those associated with investment in
certificates of deposit issued by domestic banks,
including the possible imposition of withholding taxes
on interest income, the possible adoption of foreign
governmental restrictions which might adversely affect
the payment of principal and interest on such
certificates of deposit, or other adverse political or economic
developments. In addition, it might be more difficult to
obtain and enforce a judgment against a foreign branch
of a domestic bank. Although the Trust recognizes that
the size of a bank is important, this fact alone is not
necessarily indicative of its

creditworthiness. The Fund may invest in certificates
of deposit issued by banks and savings and loan
institutions that at the time of their most recent
annual financial statements had total assets of less
than $1 billion, provided that (i) the principal
amounts of such certificates of deposit are insured by an agency
of the U.S. Government, (ii) at no time will the Fund
hold more than $100,000 principal amount of
certificates of deposit of any one such bank, and (iii)
at the time of acquisition, no more than 10% of the
Fund's assets (taken at current value) are invested in
certificates of deposit of such banks having total assets not in
excess of $1 billion.

INVESTMENT RESTRICTIONS

The Fund's investment objectives as set forth in
the Prospectus under "Investment Objective and
Policies," together with the investment restrictions
set forth below, are fundamental policies of the Fund
and may not be changed without the approval of a
majority (as defined in the Investment Company Act of 1940,
as amended (the "1940 Act")) of the Fund's outstanding voting
shares. Under these restrictions, the Fund may not:

(i) borrow money, except for temporary
purposes where investment transactions
might advantageously require it. Any
such loan may not be for a period in
excess of 60 days, and the aggregate amount of
all outstanding loans may not at any time exceed
10% of the value of the total assets of the Fund
at the time any such loan is made;

(ii) purchase securities on margin;

(iii) sell securities short;

(iv) lend any funds or other assets, except
that this restriction shall not prohibit
(a) the entry into repurchase agreements
or (b) the purchase of publicly
distributed bonds, debentures and other
securities of a similar type, or privately placed
municipal or corporate bonds, debentures and other
securities of a type customarily purchased by
institutional investors or publicly traded
in the securities markets;

(v) participate in an underwriting or
selling group in connection with the
public distribution of securities except
for its own capital stock;

(vi) invest more than 5% of the value of its
total assets in the securities of any
one issuer (except obligations of
domestic banks or the U.S. Government,
its agencies, authorities and
instrumentalities);

(vii) hold more than 10% of the voting
securities of any one issuer (except
obligations of domestic banks or the
U.S. Government, its agencies,
authorities and instrumentalities);

(viii) purchase from or sell to any of its
officers or trustees, or firms of which
any of them are members or which they
control, any securities (other than
capital stock of the Fund), but such
persons or firms may act as brokers for the Fund
for customary commissions to the extent permitted
by the 1940 Act;

(ix) purchase or sell real estate or
commodities and commodity contracts;

(x) purchase the securities of any other
open-end investment company, except as
part of a plan of merger or
consolidation;

(xi) make an investment in securities of
companies in any one industry (except
obligations of domestic banks or the
U.S. Government, its agencies,
authorities, or instrumentalities) if such
investment would cause investments in such
industry to exceed 25% of the market value of the
Fund's total assets at the time of such
investment; or

(xii) issue senior securities, except as
appropriate to evidence indebtedness
which it is permitted to incur, and
except to the extent that shares of the
separate classes or series of the Trust may be
deemed to be senior securities.

Under the 1940 Act, the Fund is permitted, subject
to the above investment restrictions, to borrow money
only from banks. The Trust has no current intention of
borrowing amounts in excess of 5% of the Fund's assets.
The Fund will continue to interpret fundamental
investment restriction (ix) as prohibiting investment
in real estate limited partnership interests; this restriction
shall not, however, prohibit investment in readily
marketable securities of companies that invest in real
estate or interests therein, including real estate
investment trusts.

ADDITIONAL RESTRICTIONS

The Fund has adopted the following additional
restrictions, which are not fundamental and which may
be changed without shareholder approval to the extent
permitted by applicable law, regulation or regulatory
policy. Under these restrictions, the Fund may not:

(i) invest in oil, gas or other mineral
leases or exploration or development
programs;

(ii) invest more than 5% of the value of its
total assets in the securities of
unseasoned issuers, including their
predecessors, which have been in
operation for less than three years;

(iii) invest more than 5% of the value of its
total assets in the securities of
issuers which are not readily
marketable;

(iv) engage in the purchase and sale of puts,
calls, straddles or spreads (except to
the extent described in the Prospectus
and in this SAI);

(v) invest in companies for the purpose of
exercising control of management;

(vi) purchase any security which it is
restricted from selling to the public
without registration under the
Securities Act of 1933; or

(vii) invest more than 5% of its total assets
in warrants, valued at the lower of cost
or market, or more than 2% of its total
assets in warrants, so valued, which are
not listed on either the New York or
American Stock Exchanges.

Whenever an investment objective, policy or
restriction set forth in the Prospectus or this SAI
states a maximum percentage of assets that may be
invested in any security or other asset or describes a
policy regarding quality standards, such percentage
limitation or standard shall, unless otherwise indicated, apply
to the Fund only at the time a transaction is entered
into. Accordingly, if a percentage limitation is
adhered to at the time of investment, a later increase
or decrease in the percentage which results from
circumstances not involving any affirmative action by
the Fund (such as a change in market conditions or a
change in the Fund's asset level or other circumstances beyond
the Fund's control) will not be considered a violation.

ADDITIONAL RIGHTS AND PRIVILEGES

The Trust offers (and except as noted below) bears
the cost of providing to investors the following rights
and privileges. The Trust reserves the right to amend
or terminate any one or more of these rights and
privileges. Notice of amendments to or terminations of
rights and privileges will be provided to shareholders
in accordance with applicable law.

Certain of the rights and privileges described
below apply to other funds distributed by Ivy Mackenzie
Distributors, Inc. ("IMDI"), which funds are not
described in this SAI. These funds

are: Ivy Asia Pacific Fund, Ivy Bond Fund, Ivy Canada
Fund, Ivy China Region Fund, Ivy Emerging Growth Fund,
Ivy Global Fund, Ivy Global Natural Resources Fund, Ivy
Global Science & Technology Fund, Ivy Growth Fund, Ivy
Growth with Income Fund, Ivy International Fund, Ivy
International Fund II (expected effective date of May
13, 1997), Ivy International Bond Fund, Ivy
International Small Companies Fund, Ivy Latin America Strategy
Fund, Ivy New Century Fund and Ivy Pan-Europe Fund
(expected effective date of May 13, 1997), the other
seventeen series of the Trust; and Mackenzie California
Municipal Fund, Mackenzie Limited Term Municipal Fund,
Mackenzie National Municipal Fund and Mackenzie New
York Municipal Fund, the four series of Mackenzie
Series Trust (collectively, with the Fund, the "Ivy
Mackenzie Funds"). Before exercising any right or privilege that
may relate to any of these funds, shareholders should
obtain the fund's current prospectus.

AUTOMATIC INVESTMENT METHOD

The Automatic Investment Method, which enables a
Fund shareholder to have specified amounts drwan each
month from his or her bank for investment in Fund
shares, is available for Class A, Class B and Class C
shareholders. The minimum initial and subsequent
investment under this method is $50 per month (except
in the case of a tax-qualified retirement plan for which the
minimum initial and subsequent investment is $25 per month).
A shareholder may terminate the Automatic Investment
Method at any time upon delivery to Ivy Mackenzie
Services Corp. ("IMSC") of telephone instructions or
written notice. See "Automatic Investment Method" in
the Prospectus. To begin the plan, complete Sections
6A and 7B of the Account Application.

EXCHANGE OF SHARES

As described in the Fund's Prospectus,
shareholders of the Fund have an exchange privilege
with certain other Ivy Mackenzie Funds (except Ivy
International Fund unless you have an existing Ivy
International Fund account). Before effecting an exchange,
shareholders of the Fund should obtain and read the currently
effective prospectus for the Ivy or Mackenzie Fund into
which the exchange is to be made.

The minimum amount which may be exchanged into an
Ivy Mackenzie Fund in which shares are not already held
is $1,000. No exchange out of the Fund (other than by
a complete exchange of all Fund shares) may be made if
it would reduce the shareholder's interest in the Fund
to less than $1,000.

Each exchange of Fund shares will be made on the
basis of the relative net asset value per share of each
Ivy or Mackenzie Fund (into which the exchange is being
made) next computed following receipt by IMSC of
telephone instructions by IMSC or a properly executed
request. An exchange from the Fund into any other
funds into which exchanges are permitted may be subject to

a sales charge, unless such sales charge has already
been paid. Exchanges, whether written or telephonic,
must be received by IMSC by the close of regular
trading on the New York Stock Exchange (the "Exchange")
(normally 4:00 p.m., eastern time) to receive the price
computed on the day of receipt. Exchange requests
received after that time will receive the price next
determined following receipt of the request. The exchange
privilege may be modified or terminated at any time, upon at
least 60 days' notice when such notice to the extent
required by applicable law. See "Redemptions."

RETIREMENT PLANS

Shares of the Fund may be purchased in connection
with several types of tax-deferred retirement plans.
Shares of more than one fund distributed by IMDI may be
purchased in a single application establishing a single
plan account, and shares held in such an account may be
exchanged among the funds in the Ivy Mackenzie Funds in
accordance with the terms of the applicable plan and
the exchange privilege available to all shareholders.
Initial and subsequent purchase payments in connection with tax-
deferred retirement plans must be at least $25 per
participant.

The following fees will be charged to individual
shareholder accounts as described in the retirement
prototype plan document:

Retirement Plan New Account Fee No fee
Retirement Plan Annual Maintenance Fee $10.00 per
account

For shareholders whose retirement accounts are
diversified across more than two funds in the Ivy
Mackenzie Funds, the annual maintenance fee will be
limited to not more than $20.

The following discussion describes in general
terms the tax treatment of certain tax-deferred
retirement plans under current Federal income tax law.
State income tax consequences may vary. An individual
considering the establishment of a retirement plan

should consult with an attorney and/or an accountant
with respect to the terms and tax aspects of the plan.

INDIVIDUAL RETIREMENT ACCOUNTS (IRAs). Shares of
the Trust may be used as a funding medium for an
Individual Retirement Account ("IRA"). Eligible
individuals may establish an IRA by adopting a model
custodial account available from IMSC, which may impose
a charge for establishing the account. Individuals may
wish to consult their tax advisers before investing IRA assets in
a fund (which primarily distributes exempt-interest
dividends).

In general, an eligible individual may contribute
up to the lesser of $2,000 or 100% of his or her
compensation or earned income to an IRA each year. If
a husband and wife are both employed, and both are
under age 70-1/2, each may set up his or her own IRA
within these limits. If both earn at least $2,000 per
year, the maximum potential contribution is $4,000 per year
for both. For years after 1996, the result is similar even if
one spouse has no earned income; if the joint earned
income of the spouses is at least $4,000, a
contribution of up to $2,000 may be made to each
spouse's IRA. For years before 1997, however, if one
spouse has (or elects to be treated as having) no
earned income for IRA purposes for a year, the working spouse
may contribute up to the lesser of $2,250 or 100% of his or
her compensation or earned income for the year to IRAs
for both spouses, provided that no more than $2,000 is
contributed to the IRA of either spouse. Rollover
contributions are not subject to these limits.

An individual may deduct his or her annual
contributions to an IRA in computing his or her Federal
income tax within the limits described above, provided
he or she (and his or her spouse, if they file a joint
Federal income tax return) is not an active participant
in a qualified retirement plan (such as a qualified
corporate, sole proprietorship, or partnership pension,
profit sharing, 401(k) or stock bonus plan), qualified annuity
plan, 403(b) plan, simplified employee pension, or
government plan. If he or she (or his or her spouse)
is an active participant, a full deduction is only
available if he or she has adjusted gross income that
is no greater than a specified level ($40,000 for
married couples filing a joint return, $25,000 for
single individuals, and $0 for a married individual filing a

separate return). The deduction is phased out ratably
for active participants with adjusted gross income
between certain levels ($40,000 and $50,000 for married
individuals filing a joint return, $25,000 and $35,000
for single individuals, and $0 and $10,000 for married
individuals filing separate returns). Individuals with
income above the specified phase-out level may not
deduct their IRA contributions. Rollover contributions are
not includible in income for Federal income tax purposes and,
therefore, are not deductible from it.

Generally, earnings on an IRA are not subject to
current Federal income tax until distributed.
Distributions attributable to tax-deductible
contributions and to IRA earnings are taxed as ordinary
income. Distributions of non-deductible contributions
are not subject to Federal income tax. In general, distributions
from an IRA to an individual before he or she reaches
age 59-1/2 are subject to a nondeductible penalty tax
equal to 10% of the taxable amount of the distribution.
The 10% penalty tax does not apply to amounts withdrawn
from an IRA after the individual reaches age 59-1/2,
becomes disabled or dies, if withdrawn in the form of
substantially equal payments over the life or life
expectancy of the individual and his or her designated
beneficiary, if any, or rolled over into another IRA, or, for
years after 1996, amounts withdrawn and used to pay for
deductible medical expenses and amounts withdrawn by certain
unemployed individuals not in excess of amounts paid for
certain health insurance premiums. Distributions must
begin to be withdrawn not later than April 1 of the
calendar year following the calendar year in which the
individual reaches age 70-1/2. Failure to take certain
minimum required distributions will result in the
imposition of a 50% non-deductible penalty tax.
Extremely large distributions in any one year (other than 1997,
1998 or 1999) from an IRA (or from an IRA and other
retirement plans) may also result in a penalty tax.

QUALIFIED PLANS. For those self-employed
individuals who wish to purchase shares of one or more
of the funds in the Ivy Mackenzie Funds through a
qualified retirement plan, a Retirement Plan is
available from IMSC. The Retirement Plan may be adopted
as a profit sharing plan or a money purchase pension plan. A
profit sharing plan permits an annual contribution to be
made in an amount determined each year by the self-
employed individual within certain limits prescribed by
law. A money purchase pension plan requires annual
contributions at the level specified in the Retirement
Plan. There is no set-up fee for qualified plans and
the annual maintenance fee is $20.00 per account.

Corporate employers may also adopt the Retirement
Plan for the benefit of their eligible employees.
Similar contribution and deduction rules apply to
corporate employers.

The Transfer Agent will arrange for Investors Bank
& Trust to furnish custodial services to the employer
and any participating employees.

DEFERRED COMPENSATION FOR PUBLIC SCHOOLS AND
CHARITABLE ORGANIZATIONS ("403(B)(7) ACCOUNT").
Section 403(b)(7) of the Internal Revenue Code of 1986,
as amended (the "Code"), permits public school systems
and certain charitable organizations to use mutual fund
shares held in a custodial account to fund deferred
compensation arrangements with their employees. A custodial
account agreement is available for those employers whose
employees wish to purchase shares of the Fund in conjunction
with such an arrangement. The special application for
a 403(b)(7) Account is available from IMSC.

(4) taken the withdrawal as part of a series of
substantially equal payments over his or her life
expectancy or the joint life expectancy of himself or
herself and a designated beneficiary; or (5) rolled
over the distribution. There is no set-up fee for
403(b)(7) Accounts and the annual maintenance fee is $20.00 per
account.

SIMPLIFIED EMPLOYEE PENSION ("SEP") IRAS. An
employer may deduct contributions to a SEP up to the
lesser of $30,000 or 15% of compensation. SEP accounts
generally are subject to all rules applicable to IRA
accounts, except the deduction limits, and are subject
to certain employee participation requirements. No new
salary reduction SEPs ("SARSEPs") may be established after 1996,
but existing SARSEPs may continue to be maintained, and non-
salary reduction SEPs may continue to be established as
well as maintained after 1996.

SYSTEMATIC WITHDRAWAL PLAN

A shareholder may establish a Systematic
Withdrawal Plan (the "Withdrawal Plan") by telephone
instructions to IMSC or by delivery to IMSC of a
written election to have his or her shares withdrawn
periodically, accompanied by a surrender to IMSC of all
share certificates then outstanding in such shareholder's name
of, properly endorsed by the shareholder. [To be eligible
to elect a Withdrawal Plan, a shareholder must have at
least $5,000 in his or her account.] A Withdrawal Plan
may not be established if the investor is currently
participating in the Automatic Investment Method. The
Withdrawal Plan may involve the depletion of a
shareholder's principal, depending on the amount
withdrawn.

A redemption under the Withdrawal Plan is a
taxable event. Shareholders contemplating
participating in the Withdrawal Plan should consult
their tax advisers.

Additional investments made by investors
participating in the Withdrawal Plan must equal at
least $1,000 each while the Withdrawal Plan is in
effect.

An investor may terminate his or her participation
in the Withdrawal Plan at any time, participation in by
delivering written notice to IMSC. If all shares held
by the investor are

liquidated at any time, the Withdrawal Plan will
terminate automatically. The Trust or IMSC may
terminate the Withdrawal Plan option at any time after
reasonable notice to shareholders.

GROUP SYSTEMATIC INVESTMENT PROGRAM

BROKERAGE ALLOCATION

Subject to the overall supervision of the
President and the Board of Trustees of the Trust (the
"Trustees" or "Board"), IMI places orders for the
purchase and sale of the Fund's portfolio securities.
All portfolio transactions are effected at the best
price and execution obtainable. Purchases and sales of debt
securities are usually principal transactions and therefore,
brokerage commissions are usually not required to be paid
by the Fund for such purchases and sales (although the
price paid generally includes undisclosed compensation
to the dealer). The prices paid to underwriters of
newly-issued securities usually include a concession
paid by the issuer to the underwriter, and purchases of
after-market securities from dealers normally reflect
the spread between the bid and asked prices. In
connection with over-the-counter ("OTC") transactions, IMI

attempts to deal directly with the principal market
makers, except in those circumstances where IMI
believes that better prices and execution are available
elsewhere.

IMI selects broker-dealers to execute transactions
and evaluates the reasonableness of commissions on the
basis of quality, quantity, and the nature of the
firms' professional services. Commissions to be
charged and the rendering of investment services,
including statistical, research, and counseling
services by brokerage firms, are factors to be
considered in placing of brokerage business. The types of
research services provided by brokers may include general
economic and industry data, and information on securities of
specific companies. Research services provided by brokers
through whom the Trust effects securities transactions
may be used by IMI in servicing all of its accounts.
In addition, not all of these services may be used by
IMI in connection with the services it provides to the
Fund or the Trust. IMI may consider sales of Fund
shares as a factor in the selection of broker- dealers
and may select broker-dealers that provide it with
research services. IMI will not, however, execute brokerage
transactions other than at the best price and execution.

During the fiscal years ended December 31, 1994,
1995 and 1996, the Fund paid no brokerage commissions.

TRUSTEES AND OFFICERS

The Trustees and Executive Officers of the Trust,
their business addresses and principal occupations
during the past five years are:

POSITION
WITH THE BUSINESS
AFFILIATIONS NAME, ADDRESS, AGE TRUST AND
PRINCIPAL OCCUPATIONS

Joseph G. Rosenthal Trustee Chartered
Accountant 110 Jardin Drive (1958-
present); Trustee of Unit #12
Mackenzie Series Trust Concord, Ontario Canada
(1985-present); Director of

L4K 2T7 The Mackenzie
Funds Inc. Age: 62
(1987-1995).

James W. Broadfoot Vice Executive Vice
President,

PERSONAL INVESTMENTS BY EMPLOYEES OF IMI

COMPENSATION TABLE
IVY FUND
(FISCAL YEAR ENDED DECEMBER 31, 1996)

John S. $7,419 N/A N/A
$10,000 Anderegg, Jr.
(Trustee)

Paul H. $7,419 N/A N/A
$10,000 Broyhill
(Trustee)

Keith J. $0 N/A N/A
$0 Carlson[**]
(Trustee and
President)

Stanley $4,949 N/A N/A
$10,000 Channick[*]
(Trustee)

Frank W. $7,419 N/A N/A
$10,000 DeFriece, Jr.
(Trustee)

Roy J. $7,419 N/A N/A
$10,000 Glauber[*]
(Trustee)

Michael G. $0 N/A N/A
$0 Landry
(Trustee and
Chairman of
the Board)

Joseph G. $7,419 N/A N/A
$10,000 Rosenthal
(Trustee)

Richard N. $10,000 N/A N/A
$10,000 Silverman
(Trustee)

J. Brendan $7,419 N/A N/A
$10,000 Swan
(Trustee)

C. William $0 N/A N/A
$0 Ferris
(Secretary/Treasurer)

[*] Appointed as a Trustee of the Trust at a meeting
of the Board held on February 10, 1996.

[**] Appointed as a Trustee of the Trust at a meeting
of the Board held on December 7, 1996.

As of April 3, 1997, the Officers and Trustees of
the Trust as a group owned beneficially or of record
less than 1% of the outstanding Class A, Class B and
Class C shares of the Fund.

INVESTMENT ADVISORY AND OTHER SERVICES

BUSINESS MANAGEMENT AND INVESTMENT ADVISORY SERVICES

Ivy Management, Inc. provides business management
and investment advisory services to the Fund pursuant
to a Business Management and Investment Advisory
Agreement with the Trust (the "Agreement"), which was
approved by the shareholders of the Fund on December
30, 1991. Prior to approval by shareholders, the
Agreement was approved on October 28, 1991 by the Board,
including a majority of the Trustees who are neither "interested
persons" (as defined in the 1940 Act) of the Trust nor
have any direct or indirect financial interest in the
operation of the distribution plan (see "Distribution
Services") or in any related agreement (the
"Independent Trustees"). IMI also acts as manager and
investment adviser to the following investment companies
registered under the 1940 Act: Ivy Asia Pacific Fund, Ivy Bond
Fund, Ivy Canada Fund, Ivy China Region Fund, Ivy Emerging
Growth Fund, Ivy Global Fund, Ivy Global Natural
Resources Fund, Ivy Global Science & Technology Fund,
Ivy Growth Fund, Ivy Growth with Income Fund, Ivy
International Fund, Ivy International Fund II (expected
effective date of May 13, 1997), Ivy International
Small Companies Fund, Ivy International Bond Fund, Ivy Latin
America Strategy Fund, Ivy New Century Fund and Ivy Pan-
Europe Fund (expected effective date of May 13, 1997).
IMI is a wholly owned subsidiary of MIMI. MIMI
currently acts as manager of and investment adviser to
the following investment companies registered under the
1940 Act: Mackenzie National Municipal Fund, Mackenzie
California Municipal Fund, Mackenzie New York Municipal
Fund and Mackenzie Limited Term Municipal Fund. MIMI,
a Delaware corporation, has approximately 10% of its outstanding
common stock listed for trading on the Toronto Stock
Exchange. MIMI is a subsidiary of Mackenzie Financial
Corporation ("MFC"), 150 Bloor Street West, Toronto,
Ontario, Canada, a public corporation organized under
the laws of Ontario whose shares are listed for trading
on The Toronto Stock Exchange. MFC is registered in
Ontario as a mutual fund dealer and advises Ivy Canada
Fund and Ivy Global Natural Resources Fund.

The Agreement obligates IMI to make investments
for the account of the Fund in accordance with its best
judgment and within the investment objectives and
restrictions set forth in the Fund's current
Prospectus, the 1940 Act and the provisions of the Code
relating to regulated investment companies, subject to
policy decisions adopted by the Trustees. IMI also determines
the securities to be purchased or sold by the Fund and
places orders with brokers or dealers who deal in such
securities.

necessary office space, telephones and other
communications facilities as are adequate for the
Fund's needs; (4) provide the services of individuals
competent to perform administrative and clerical
functions which are not performed by employees or other
agents engaged by the Fund or by IMI acting in some other
capacity pursuant to a separate agreement or arrangement with
the Fund; (5) maintain or supervise the maintenance by
third parties of such books and records of the Trust as
may be required by applicable Federal or state law; (6)
authorize and permit IMI's directors, officers and
employees who may be elected or appointed as trustees
or officers of the Trust to serve in such capacities;
and (7) take such other action with respect to the Trust, after
approval by the Trust, as may be required by applicable
law, including without limitation the rules and
regulations of the SEC and of state securities
commissions and other regulatory agencies.

For business management and investment advisory
services, the Fund pays IMI a monthly fee based on the
Fund's average daily net assets during the preceding
month at an annual rate of 0.40%. For the fiscal years
ended December 31, 1996, 1995 and 1994, the Fund paid
IMI $80,302, $110,748 and $107,960, respectively (of
which IMI reimbursed $199,546, $148,768 and $105,984,
respectively, pursuant to the voluntary expense limitation
described below).

The Trust pays the following expenses under the
Agreement: (1) the fees and expenses of the Trust's
Independent Trustees; (2) the salaries and expenses of
any of the Trust's officers or employees who are not
affiliated with IMI; (3) interest expenses; (4) taxes
and governmental fees, including any original issue
taxes or transfer taxes applicable to the sale or delivery of
shares or certificates therefor; (5) brokerage commissions
and other expenses incurred in acquiring or disposing
of portfolio securities; (6) the expenses of
registering and qualifying shares for sale with the SEC
and with various state securities commissions; (7)
accounting and legal costs; (8) insurance premiums; (9)
fees and expenses of the Trust's custodian and transfer
agent and any related services; (10) expenses of
obtaining quotations of portfolio securities and of pricing
shares; (11) expenses of maintaining the Trust's legal
existence and of shareholders' meetings; (12) expenses
of preparation and distribution to existing
shareholders of periodic reports, proxy materials and
prospectuses; and (13) fees and expenses of membership
in industry organizations.

IMI has agreed to limit the Fund's total operating
expenses (excluding interest, taxes, brokerage
commissions, litigation and indemnification expenses,
and other extraordinary expenses) to an annual rate of
0.85% of the Fund's average net assets. This voluntary
expense limitation may be terminated or revised at any
time, at which time the Fund's expense may increase and its yield
may be reduced, depending on the total assets of the
Fund.

On August 24, 1996, the Board, including a
majority of the Independent Trustees, last approved the
continuance of the Agreement. The Agreement will
continue in effect with respect to the Fund for more
than the initial two-year period only so long as the
continuance is specifically approved at least annually (i)
by the vote of a majority of the Independent Trustees and (ii)
either (a) by the vote of a majority of the outstanding
voting securities (as defined in the 1940 Act) of the
Fund or (b) by the vote of a majority of the entire
Board. If the question of continuance of the Agreement
(or adoption of any new agreement) is presented to
shareholders, continuance (or adoption) shall be
effected only if approved by the affirmative vote of a majority
of the outstanding voting securities of the Fund. See
"Capitalization and Voting Rights."

The Agreement may be terminated with respect to
the Fund at any time, without payment of any penalty,
by a vote of a majority of the Board, or by a vote of a
majority of the outstanding voting securities of the
Fund on 60 days' written notice to IMI, or by IMI on 60
days' written notice to the Trust. The Agreement shall
terminate automatically in the event of its assignment.

DISTRIBUTION SERVICES

IMDI serves as the exclusive distributor of the
Fund shares under an Amended and Restated Distribution
Agreement with the Trust dated October 23, 1993 (the
"Distribution Agreement"). The Distribution Agreement
was last approved by the Board on August 25, 1996.
IMDI distributes Fund shares through broker-dealers who
are members of the National Association of Securities
Dealers, Inc. and who have executed dealer agreements with IMDI.
IMDI distributes Fund shares on a continuous basis, but
reserves the right to suspend or discontinue
distribution on such basis. IMDI is not obligated to
sell any specific amount of Fund shares. Pursuant to
the Distribution Agreement, the Fund bears, among other
expenses, the expenses of registering and qualifying its
shares for sale under federal and state securities laws and
preparing and distributing to existing shareholders periodic
reports, proxy materials and Prospectuses. Shares of the
Fund are sold at the Fund's net asset value per share
without a sales load.

The Distribution Agreement will continue in effect
for successive one-year periods, provided that such
continuance is specifically approved at least annually
by the vote of a majority of the Independent Trustees,
cast in person at a meeting called for that purpose and
by the vote of either a majority of the entire Board or
a majority of the outstanding voting securities of the
Fund. The Distribution Agreement may be terminated with
respect to the Fund at any time, without payment of any penalty,
by IMDI on 60 days' written notice to the Trust or by the
Fund by the vote of either a majority of the
outstanding voting securities of the Fund or a majority
of the Independent Trustees

on 60 days' written notice to IMDI. The Distribution
Agreement shall terminate automatically in the event of
its assignment.

If the Distribution Agreement is terminated (or
not renewed) with respect to one or more funds of the
Trust, it may continue in effect with respect to any
fund as to which it has not been terminated (or has
been renewed).

RULE 18F-3 PLAN. On February 23, 1995, the SEC
adopted Rule 18f-3 under the 1940 Act, which permits a
registered open-end investment company to issue
multiple classes of shares in accordance with a written
plan approved by the investment company's board of
directors/trustees and filed with the SEC. At a
meeting held on December 1-2, 1995, the Board of the Trust
adopted a multi-class plan on behalf of the Fund and authorized
the redesignation of the Fund's shares into Class A and
Class B, respectively. On February 29, 1996, the
Trustees resolved by written consent to establish a new
class of shares, designated as "Class C," for all Ivy
Fund portfolios. The purpose of the Class B
redesignation (and the Class C designation) of shares for the
Fund is primarily to enable the transfer agent for the Ivy
and Mackenzie funds to track the contingent deferred
sales charge period that applies to Class B and Class C
shares of Ivy and Mackenzie funds (other than the Fund)
that are being exchanged for shares of the Fund. In
all other relevant respects, the Fund's Class A, Class
B and Class C shares are identical (i.e., having the
same arrangement for shareholder services and the
distribution of securities).

CUSTODIAN

Pursuant to a Custodian Agreement with the Trsut,
Brown Brothers Harriman & Co. (the "Custodian"), a
private bank and member of the principal securities
exchanges, located at 40 Water Street, Boston,
Massachusetts 02109, maintains custody of the assets of
the Fund. Rules adopted under the 1940 Act permit the
Trust to maintain its foreign securities and cash in the custody
of certain eligible foreign banks and securities
depositories. Pursuant to those rules, Brown Brothers
Harriman & Co. has entered into subcustodial agreements
for the holding of the Fund's foreign securities.
Brown Brothers may receive, as partial payment for its
services, a portion of the Trust's brokerage business,
subject to its ability to provide best price and
execution.

FUND ACCOUNTING SERVICES

Pursuant to a Fund Accounting Services Agreement
that became effective March 1, 1992, MIMI provides
certain accounting and pricing services for the Fund,
including bookkeeping and computation of daily net
asset value. As compensation for those services, the
Fund pays MIMI a monthly fee of 0.10% of the Fund's
average net assets, plus out-of-pocket expenses as incurred. For
the fiscal years ended December 31, 1994, 1995 and 1996,
the Fund paid MIMI $30,023, $30,957 and $27,774,
respectively, for such services.

TRANSFER AND DIVIDEND PAYING AGENT

IMSC, a wholly owned subsidiary of MIMI, acts as
the Fund's transfer agent pursuant to a Transfer Agency
and Shareholder Services Agreement. For transfer
agency and shareholder services, the Fund pays IMSC an
annual fee of $22.00 per open account and $4.48 for
each account that is closed. The Fund also reimburses
IMSC monthly for out-of-pocket expenses. For the
fiscal year ended December 31, 1996, such fees and expenses for
the Fund totalled $109,444. Certain broker-dealers that
maintain shareholder accounts with the Fund through an
omnibus account provide transfer agent and other
shareholder-related services that would otherwise be
provided by IMSC if the individual accounts that
comprise the omnibus account were opened by their
beneficial owners directly. IMSC pays such broker-dealers a per
account fee for each open account within the omnibus
account, or a fixed rate (e.g., .10%) fee, based on the
average daily net asset value of the omnibus account
(or a combination thereof).

ADMINISTRATOR

MIMI provides certain administrative services to
the Fund pursuant to an Administrative Services
Agreement, in exchange for a monthly fee at the annual
rate of .10% of the Fund's average

daily net assets. For the fiscal years ended December
31, 1996, 1995 and 1994, the Fund paid MIMI $20,075,
$27,687 and $26,990, respectively, for such
services.

AUDITORS

Coopers & Lybrand L.L.P., independent certified
public accountants, 200 East Las Olas Boulevard, Suite
1700, Ft. Lauderdale, Florida 33301, has been selected
as auditors for the Trust. The audit services
performed by Coopers & Lybrand L.L.P. include audits of
the annual financial statements of each of the funds of
the Trust. Other services provided primarily relate to
filings with the SEC and the preparation of the Fund's tax
returns.

CAPITALIZATION AND VOTING RIGHTS

The capitalization of the Trust consists of an
unlimited number of shares of beneficial interest (no
par value per share). When issued, shares of the Fund
are fully paid, non-assessable, redeemable and fully
transferable. Shares do not have preemptive rights or
subscription rights.

The Amended and Restated Declaration of Trust
permits the Trustees to create separate series or
portfolios and to divide any series or portfolio into
one or more classes. The Trustees have authorized
eighteen series, each of which represents a separate
investment portfolio. The Trustees have further
authorized the issuance of Classes A, B and C shares for the
Fund, Ivy Asia Pacific Fund, Ivy Bond Fund, Ivy Canada Fund,
Ivy China Region Fund, Ivy Emerging Growth Fund, Ivy
Global Fund, Ivy Global Natural Resources Fund, Ivy
Global Science & Technology Fund, Ivy Growth Fund, Ivy
Growth with Income Fund, Ivy International Bond Fund,
Ivy International Fund, Ivy International Fund II
(expected effective date of May 13, 1997), Ivy
International Small Companies Fund, Ivy Latin America
Strategy Fund, Ivy New Century Fund and Ivy Pan-Europe Fund
(expected effective date of May 13, 1997), as well as Class I
shares for Ivy International Fund, Ivy Global Science &
Technology Fund, Ivy International Fund II (expected
effective date of May 13, 1997) and Ivy Bond Fund, and
Class D shares for Ivy Growth with Income Fund.[FN][The
Class D shares of Ivy Growth with Income Fund were
initially issued as "Ivy Growth with Income Fund --
Class C" to shareholders of Mackenzie Growth & Income
Fund, a former series of the Company, in connection with the
reorganization between that fund and Ivy Growth with Income
Fund, and are not offered for sale to the public. On
February 29, 1996, the Trustees of the Trust resolved
by written consent to establish a new class of shares
designated as "Class C" for all Ivy Fund portfolios,
and to redesignate the shares of beneficial interest of
"Ivy Growth with Income Fund--Class C" as shares of
beneficial interest of "Ivy Growth with Income Fund--Class D,"
which establishment and redesignation, respectively, became
effective on April 30, 1996. The voting, dividend,
liquidation

and other rights, preferences, powers, restrictions,
limitations, qualifications, terms and conditions of
the Class D shares of Ivy Growth with Income Fund, as
set forth in Ivy Fund's Declaration of Trust, as
amended from time to time, will not be changed by this
redesignation.]

Shareholders have the right to vote for the
election of Trustees of the Trust and on any and all
matters on which they may be entitled to vote by law or
by the provisions of the Amended and Restated
Declaration of Trust. Shares of the Fund entitle their
holders to one vote per share (with proportionate
voting for fractional shares). Shareholders of the Trust vote
separately by Fund on any matter submitted to shareholders,
except when otherwise required by the 1940 Act, in which
case the shareholders of all funds of the Trust
affected by the matter in question will vote together.
Approval of an investment advisory agreement and a
change in fundamental policies would be regarded as
matters requiring separate voting by the shareholders of each
fund of the Trust. If the Trustees determine that a matter
does not affect the interests of the Fund, then the
shareholders of the Fund will not be entitled to vote
on that matter. Matters that affect the Trust in
general, such as ratification of the selection of
independent public accountants, will be voted upon
collectively by the shareholders of all of the funds that
comprise the Trust.

As used in this SAI and the Fund's Prospectus, the
phrase "majority vote of the outstanding shares" of the
Fund means the vote of the lesser of: (1) 67% of the
shares of the Fund (or of the Trust) present at a
meeting if the holders of more than 50% of the
outstanding shares are present in person or by proxy; or
(2) more than 50% of the outstanding shares of the Fund (or of
the Trust). With respect to the submission to shareholder
vote of a matter requiring separate voting by the Fund,
the matter shall have been effectively acted upon with
respect to the Fund if a majority of the outstanding
voting securities of the Fund votes for the approval of
the matter, notwithstanding that: (1) the matter has
not been approved by a majority of the outstanding
voting securities of any other fund of the Trust; or
(2) the matter has not been approved by a majority of the
outstanding voting securities of the Trust.

the Trust incurring financial loss on account of
shareholder liability is limited to circumstances in
which the Trust itself would be unable to meet its
obligations and, thus, should be considered remote. No
series of the Trust is liable for the obligations of
any other series of the Trust.

To the knowledge of the Trust, as of March 31,
1997, no shareholder owned beneficially or of record 5%
or more of the Fund's outstanding Class A, Class B or
Class C shares, except that: of the outstanding Class A
shares of the Fund, Unibank SA, Luxembourg c/o Unibank
A/S, 13-15 W 54th Street, New York, NY 10019, owned of
record 1,886,946.030 shares (9.37%), and Charles G.
Koch, 4111 East 37th Street North, Wichita, KS 67220, owned of
record 1,208,834.580 shares (6.00%); and of the outstanding
Class C shares of the Fund, IBT (custodian) FBO Sharon
J. Floyd, 273 D Street, Chula Vista, CA 91910-1804,
owned of record 87,297.550 shares (34.88%), IBT
(custodian) FBO Ted M. Leimbach, 5071 Kalmia Street,
San Diego, CA 92105-5334, owned of record 45,591.410
shares (18.36%), IBT (custodian) FBO Diana Rooney, 2441 S 9th
Street, El Centro, CA 92243, owned of record 43,188.040
shares (17.25%), IBT (custodian) FBO Betty J. Carson,
1987 Higgins Lane, El Centro, CA 92243, owned of record
28,653.440 shares (11.44%), and IBT (custodian) FBO
Janet A. Kohen, 4464 Monroe Avenue, San Diego, CA
92115, owned of record 14,274.350 shares (5.70%).

NET ASSET VALUE

The market price at any given time for each Fund
share is its net asset value. The net asset value per
share for the Fund is computed by dividing the value of
the total assets of the Fund, less all of its
liabilities, by the total number of shares of the Fund
outstanding. For the purposes of determining the
aggregate net assets of the Fund, cash and receivables will be
valued at their realizable amounts. Pursuant to a rule of
the SEC, the Fund's portfolio securities are valued
using the amortized cost method of valuation in an
effort to maintain a constant net asset value of $1.00
per share, which the Trustees has determined to be in
the best interest of the Fund and its shareholders. The
amortized cost method involves valuing a security at
cost on the date of acquisition and thereafter assuming
a constant rate of accretion of discount or amortization
of premium. While this method provides certainty in valuation,
it may result in periods during which value, as determined
by amortized cost, is higher or lower than the price
the Fund would receive if it sold the instrument.
During such periods, the yield to an investor in the
Fund may differ somewhat from that obtained in a
similar investment company which uses available market
quotations to value all of its portfolio securities.

Portfolio securities are valued and net asset
value per share of the Fund is determined as of the
close of regular trading on the Exchange (normally 4:00
p.m., eastern time) every Monday through Friday
(exclusive of national business holidays). The Trust's
offices will be closed, and net asset value will not be
calculated, on the following national business holidays: New
Year's Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas
Day. On those days when either or both of the Fund's
Custodian or the New York Stock Exchange close early as
a result of such day being a partial holiday or
otherwise, the Trust reserves the right to advance the
time on that day by which purchase and redemption
requests must be received.

Fund shares will not be sold during any period
when the determination of the Fund's net asset value is
suspended pursuant to rules or orders of the SEC or by
the Board whenever in its judgment it is in the best
interest of the Fund to do so.

REDEMPTIONS

Shares of the Fund are redeemed at their net asset
value next determined after a redemption request in
proper form has been received by IMSC. The Fund does
not assess a contingent deferred sales charge.
However, if shares of another Ivy or Mackenzie Fund
that are subject to a contingent deferred sales charge
are exchanged for shares of the Fund, the contingent
deferred sales charge will carry over to the investment in the
Fund and may be assessed upon redemption.

Unless a shareholder requests that the proceeds of
any redemption be wired to his or her bank account,
payment for shares tendered for redemption is made by
check within seven days after tender in proper form,
except that the Trust reserves the right to suspend the
right of redemption or to postpone the date of payment
upon redemption, to the extent permitted by Federal
securities laws, (i) for any period during which the Exchange is
closed (other than customary weekend and holiday closing)
or during which trading on the Exchange is restricted,
(ii) for any period during which an emergency exists as
determined by the SEC as a result of which disposal of
securities owned by the Fund is not reasonably
practicable or it is not reasonably practicable for the
Fund fairly to determine the value of its net assets, or
(iii) for such other periods as the SEC may by order permit for
the protection of the Fund's shareholders.

Under unusual circumstances, when the Board deems
it in the best interest of the Fund's shareholders, the
Fund may pay for shares repurchased or redeemed, in
whole or in part, in securities of the Fund taken at
current value. If any such redemption in kind is to be
made, the Fund intends to make an election pursuant to
Rule 18f-1 under the 1940 Act. This will require the
Fund to redeem with cash at a shareholder's election in
any case where the redemption involves less than $250,000 (or

1% of the Fund's net asset value at the beginning of
each 90-day period during which such redemptions are in
effect, if that amount is less than $250,000). If
payment is made in the form of Fund securities, the
redeeming shareholder may incur brokerage costs in
converting such securities to cash.

The Trust may redeem those accounts of
shareholders who have maintained an investment of less
than $1,000 ($250 for retirement plans) in the Fund for
a period of more than 12 months. All accounts below
that minimum will be redeemed simultaneously when MIMI
deems it advisable. The $1,000 balance will be determined
by actual dollar amounts invested by the shareholder,
unaffected by market fluctuations. The Trust will
notify any such shareholder by certified mail of its
intention to redeem such account, and the shareholder
shall have 60 days from the date of such letter to
invest such additional sum as shall raise the value of
such account above that minimum. Should the shareholder
fail to forward such sum within 60 days of the date of the
Trust's letter of notification, the Trust will redeem the
shares held in such account and transmit the proceeds
thereof to the shareholder. However, those
shareholders who are investing pursuant to the
Automatic Investment Method or Group Systematic
Investment Program will not be redeemed automatically unless they
have ceased making payments pursuant to the plan for a
period of at least six consecutive months, and these
shareholders will be given six months' notice by the
Trust before such redemption. Shareholders in a
qualified retirement, pension or profit sharing plan
who wish to avoid tax consequences would have to "rollover"
any sum so redeemed into another qualified plan within 60
days. The Trustees of the Trust may change the minimum
account size.

If a shareholder has given authorization for
telephonic redemption privilege, shares can be redeemed
and proceeds sent by Federal wire to a single
previously designated bank account. Delivery of the
proceeds of a wire redemption request of $250,000 or
more may be delayed by the Fund for up to seven days if deemed
appropriate under then-current market conditions. The
Trust reserves the right to change this minimum or to
terminate the telephonic redemption privilege without
prior notice. The Trust cannot be responsible for the
efficiency of the Federal wire system of the
shareholder's dealer of record or bank. The
shareholder is responsible for any charges by the shareholder's
bank.

The Fund employs reasonable procedures that
require personal identification prior to acting on
redemption or exchange instructions communicated by
telephone to confirm that such instructions are
genuine. In the absence of such procedures, the Fund
may be liable for any losses due to unauthorized or
fraudulent telephone instructions.

TAXATION

GENERAL. The Fund intends to be taxed as a
regulated investment company under Subchapter M of the
Code. Accordingly, the Fund must, among other things,
(a) derive in each taxable year at least 90% of its
gross income from dividends, interest, payments with
respect to certain securities loans, and gains from the
sale or other disposition of stock, securities or foreign
currencies, or other income derived with respect to its business
of investing in such stock, securities or currencies;
(b) derive in each taxable year less than 30% of its
gross income from the sale or other disposition of
certain assets held less than three months, namely:
(i) stock or securities; (ii) options, futures, or
forward contracts (other than those on foreign currencies); or
(iii) foreign currencies (or options, futures, or forward
contracts on foreign currencies) that are not directly
related to the Fund's principal business of investing
in stock or securities (or options and futures with
respect to stock or securities) (the "30% Limitation");
and (c) diversify its holdings so that, at the end of
each fiscal quarter, (i) at least 50% of the market value
of the Fund's assets is represented by cash, U.S. Government
securities, the securities of other regulated investment
companies and other securities, with such other securities
limited, in respect of any one issuer, to an amount not
greater than 5% of the value of the Fund's total assets
and 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its
total assets is invested in the securities of any one
issuer (other than U.S. Government securities and the
securities of other regulated investment companies).

not distributed during such years. To avoid
application of the excise tax, the Fund intends to make
distributions in accordance with the calendar year
distribution requirements. A distribution will be
treated as paid on December 31 of the current calendar
year if it is declared by the Fund in October, November or
December of the year with a record date in such a month and
paid by the Fund during January of the following year.
Such distributions will be taxable to shareholders in
the calendar year the distributions are declared,
rather than the calendar year in which the
distributions are received.

DEBT SECURITIES ACQUIRED AT A DISCOUNT. Some of
the debt securities (with a fixed maturity date of more
than one year from the date of issuance) that may be
acquired by the Fund may be treated as debt securities
that are issued originally at a discount. Generally,
the amount of the original issue discount ("OID") is
treated as interest income and is included in income
over the term of the debt security, even though payment of that
amount is not received until a later time, usually when
the debt security matures.

DISTRIBUTIONS. Distributions of investment
company taxable income are taxable to a U.S.
shareholder as ordinary income, whether paid in cash or
shares. Dividends paid by the Fund to a corporate
shareholder, to the extent such dividends are
attributable to dividends received from U.S. corporations by the
Fund, may qualify for the dividends received deduction.
However, the revised alternative minimum tax applicable
to corporations may reduce the value of the dividends
received deduction. Distributions of net capital gains
(the excess of net long-term capital gains over net
short-term capital losses), if any, designated by the
Fund as capital gain dividends, are taxable as long-
term capital gains, whether paid in cash or in shares,
regardless of how long the shareholder has held the Fund's shares
and are not eligible for the dividends received
deduction. Shareholders receiving distributions in the
form of newly issued shares will have a cost basis in
each share received equal to the net asset value of a
share of the Fund on the reinvestment date.
Shareholders will be notified annually as to the U.S. Federal tax
status of distributions and shareholders receiving
distributions in the form of newly issued shares will
receive a report as to the net asset value of the
shares received.

DISPOSITION OF SHARES. Upon a redemption, sale or
exchange of his or her shares, a shareholder generally
will realize a taxable gain or loss depending upon his
or her basis in the shares. Such gain or loss will be
treated as capital gain or loss if the shares are
capital assets in the shareholder's hands and generally
will be long-term or short-term, depending upon the
shareholder's holding period for the shares. Any loss realized
on a redemption, sale or exchange will be disallowed to
the extent the shares disposed of are replaced
(including through reinvestment of dividends) within a
period of 61 days beginning 30 days before and ending
30 days after the shares are disposed of. In such a
case, the basis of the shares acquired will be adjusted
to reflect the disallowed loss. Any loss realized by a
shareholder on the sale of Fund shares held by the shareholder
for six months or less will be treated for tax purposes as
a long-term capital loss to the extent of any
distributions of capital gain dividends received or
treated as having been received by the shareholder with
respect to such shares.

In some cases, shareholders will not be permitted
to take all or a portion of their sales loads into
account for purposes of determining the amount of gain
or loss realized on the

disposition of their shares. This prohibition
generally applies where (1) the shareholder incurs a
sales load in acquiring the shares of a Fund, (2) the
shares are disposed of before the 91st day after the
date on which they were acquired, and (3) the
shareholder subsequently acquires shares in the same Fund or
another regulated investment company and the otherwise
applicable sales charge is reduced under a
"reinvestment right" received upon the initial purchase
of Fund shares. The term "reinvestment right" means
any right to acquire shares of one or more regulated
investment companies without the payment of a sales load or with
the payment of a reduced sales charge. Sales charges
affected by this rule are treated as if they were
incurred with respect to the shares acquired under the
reinvestment right. This provision may be applied to
successive acquisitions of fund shares.

BACKUP WITHHOLDING. The Fund will be required to
report to the Internal Revenue Service (the "IRS") all
taxable distributions and, in certain circumstances,
gross proceeds from the redemption of the Fund's
shares, except in the case of certain exempt
shareholders. All such distributions and proceeds will
be subject to withholding of Federal income tax at a rate of
31% ("backup withholding") in the case of non-exempt
shareholders if (1) the shareholder fails to furnish
the Fund with and to certify the shareholder's correct
taxpayer identification number or social security
number, (2) the IRS notifies the shareholder or the
Fund that the shareholder has failed to report properly
certain interest and dividend income to the IRS and to respond to
notices to that effect, or (3) when required to do so,
the shareholder fails to certify that he or she is not
subject to backup withholding. If the withholding
provisions are applicable, any such distributions or
proceeds, whether reinvested in additional shares or
taken in cash, will be reduced by the amounts required
to be withheld.

OTHER INFORMATION. Distributions may also be
subject to additional state, local and foreign taxes
depending on each shareholder's particular situation.
In many states, Fund distributions which are derived
from interest in certain U.S. Government obligations
are exemt from taxation. Non-U.S. shareholders may be
subject to U.S. tax rules that differ significantly
from those summarized above. This discussion does not
purport to deal with all of the tax consequences applicable
to the Fund or its shareholders. Shareholders are advised to
consult their own tax advisers with respect to the
particular tax consequences to them of an investment in
the Fund.

CALCULATION OF YIELD

The Fund's yield quotations as they may appear in
the Prospectus, this SAI, advertising or sales
literature are calculated by standard methods
prescribed by the SEC.

STANDARDIZED YIELD QUOTATIONS. The Fund's current
yield quotation is computed by determining the net
change, exclusive of

capital changes (i.e., realized gains and losses from
the sale of securities and unrealized appreciation and
depreciation), in the value of a hypothetical pre-
existing account having a balance of one share at the
beginning of the base period, subtracting a
hypothetical charge reflecting expense deductions from the
hypothetical account, and dividing the difference by the value
of the account at the beginning of the base period to
obtain the base period return. This base period return
is then multiplied by 365/7 with the resulting yield
figure carried to the nearest 100th of 1%. The
determination of net change in account value reflects
the value of additional shares purchased with dividends
from the original share, dividends declared on both the original
share and any such additional shares, and all fees, other
than non-recurring account or sales charges, that are
charged to all shareholder accounts in the Fund in
proportion to the length of the base period. For any
account fees that vary with the size of the account in
the Fund, the account fee used for purposes of the
yield computation is assumed to be the fee that would be charged
to the mean account size of the Fund. The distribution
rate will differ from the current yield computation
because it may include distributions to shareholders
from sources other than dividends and interest, short-
term capital gains and net equalization credits.

The Fund's current yield for the seven-day period
ended December 31, 1996 was 4.38%. IMI currently
reimburses the Fund to limit ordinary operating
expenses to 0.85% of average net assets. Without
reimbursement, the Fund's current yield for this period
would have been 2.63%.

Performance quotations for the Fund will vary from
time to time depending on market conditions, the
composition of the Fund's portfolio and operating
expenses of the Fund. The voluntary expense
reimbursement by IMI with respect to the Fund has the
effect of increasing yields of the Fund. These factors
and possible differences in the methods used in calculating
yields should be considered when comparing performance
information regarding the Fund to information published for
other investment companies and other investment
vehicles. Yields should also be considered relative to
changes in the value of the Fund's shares and the risk
associated with the Fund's investment objective and
policies. At any time in the future, yields may be

higher or lower than past yields and there can be no
assurance that any historical yield quotation will
continue in the future.

The Fund may also cite endorsements or use for
comparison its performance rankings and listings
reported in such newspapers or business or consumer
publications as, among others: AAII Journal, Barron's,
Boston Business Journal, Boston Globe, Boston Herald,
Business Week, Consumer's Digest, Consumer Guide
Publications, Changing Times, Financial Planning, Financial
World, Forbes, Fortune, Growth Fund Guide, Houston Post,
Institutional Investor, International Fund Monitor, Investor's
Daily, Los Angeles Times, Medical Economics, Miami
Herald, Money Mutual Fund Forecaster, Mutual Fund
Letter, Mutual Fund Source Book, Mutual Fund Values,
National Underwriter, Nelson's Directory of Investment
Managers, New York Times, Newsweek, No Load Fund
Investor, No Load Fund* X, Oakland Tribune, Pension
World, Pensions and Investment Age, Personal Investor, Rugg and
Steele, Time, U.S. News and World Report, USA Today, The
Wall Street Journal, and Washington Post.

FINANCIAL STATEMENTS

The Fund's Portfolio of Investments as of December
31, 1996, the Statement of Assets and Liabilities as of
December 31, 1996, the Statement of Operations for the
fiscal year ended December 31, 1996, the Statement of
Changes in Net Assets for the fiscal years ended
December 31, 1995 and 1996,the Financial Highlights,
Notes to Financial Statements, and Report of Independent
Accountants are included in the Fund's December 31, 1996 Annual
Report to Shareholders, which is incorporated by reference
into this SAI.

APPENDIX A
DESCRIPTION OF STANDARD & POOR'S CORPORATION
("S&P") AND MOODY'S INVESTORS SERVICE, INC.
("MOODY'S") CORPORATE BOND AND COMMERCIAL PAPER
RATINGS [FN][From "Moody's Bond Record," November 1994
Issue (Moody's Investors Service, New York, 1994), and
"Standard & Poor's Municipal Ratings Handbook," October 1994
Issue (McGraw Hill, New York, 1994)].

MOODY'S:

indicates the highest quality repayment capacity of the
rated issue.

S&P:

(b) COMMERCIAL PAPER. An S&P commercial paper
rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of
no more than 365 days.

Issues rated B are regarded as having only
speculative capacity for timely payment. The C rating
is assigned to short- term debt obligations with a
doubtful capacity for payment.

PART C. OTHER INFORMATION

Item 24: Financial Statements and Exhibits

(a) Financial Statements:

- Included in Part A: Not applicable.

- Included in Part B:

- Statement of Assets and Liabilities
as of December 10, 1996 and Related
Notes of Ivy Asia Pacific Fund

- Statement of Assets and Liabilities
as of December 10, 1996 and Related
Notes of Ivy Global Natural
Resources Fund

- Statement of Assets and Liabilities
as of December 10, 1996 and Related
Notes of Ivy International Small
Companies Fund

- Incorporated by reference in Part B:

Statement of Assets and Liabilities as
of December 10, 1996 and Related Notes
of Ivy Asia Pacific Fund:

- Report of Independent Accountants

December 31, 1996 Annual Report to
Shareholders of Ivy Bond Fund:
- Portfolio of Investments at
December 31, 1996 - Statement of
Assets and Liabilities as of
December 31, 1996
- Statement of Operations for the
Year ended December 31, 1996
- Statement of Changes in Net Assets
for the Year ended December 31,
1996 and 1995 - Financial Highlights
- Notes to Financial Statements
- Report of Independent Accountants

December 31, 1996 Annual Report to
Shareholders of Ivy Canada Fund:
- Portfolio of Investments at
December 31, 1996 - Statement of
Assets and Liabilities as of
December 31, 1996
- Statement of Operations for the
Year ended December 31, 1996
- Statement of Changes in Net Assets
for the Year ended December 31,
1996 and 1995 - Financial Highlights
- Notes to Financial Statements

- Report of Independent Accountants

December 31, 1996 Annual Report to
Shareholders of Ivy China Region Fund:
- Portfolio of Investments at
December 31, 1996 - Statement of
Assets and Liabilities as of
December 31, 1996
- Statement of Operations for the
Year ended December 31, 1996
- Statement of Changes in Net Assets
for the Year ended December 31,
1996 and 1995 - Financial Highlights
- Notes to Financial Statements
- Report of Independent Accountants

December 31, 1996 Annual Report to
Shareholders of Ivy Emerging Growth
Fund:
- Portfolio of Investments at
December 31, 1996 - Statement of
Assets and Liabilities as of
December 31, 1996
- Statement of Operations for the
Year ended December 31, 1996
- Statement of Changes in Net Assets
for the Year ended December 31,
1996 and 1995 - Financial Highlights
- Notes to Financial Statements
- Report of Independent Accountants

December 31, 1996 Annual Report to
Shareholders of Ivy Global Fund:
- Portfolio of Investments at
December 31, 1996 - Statement of
Assets and Liabilities as of
December 31, 1996
- Statement of Operations for the
Year ended December 31, 1996
- Statement of Changes in Net Assets
for the Year ended December 31,
1996 and 1995 - Financial Highlights
- Notes to Financial Statements
- Report of Independent Accountants

Statement of Assets and Liabilities as
of December 10, 1996 and Related Notes
of Ivy Global Natural Resources Fund:

- Report of Independent Accountants

December 31, 1996 Annual Report to
Shareholders of Ivy Global Science &
Technology Fund: - Portfolio of
Investments at December 31, 1996 -
Statement of Assets and Liabilities as of
December 31, 1996

- Statement of Operations for the
period from July 22, 1996
(commencement of operations) to
December 31, 1996
- Statement of Changes in Net Assets
for the period from July 22, 1996
(commencement of operations) to
December 31, 1996 - Financial
Highlights
- Notes to Financial Statements
- Report of Independent Accountants

December 31, 1996 Annual Report to
Shareholders of Ivy Growth Fund:
- Portfolio of Investments at
December 31, 1996 - Statement of
Assets and Liabilities as of
December 31, 1996
- Statement of Operations for the
Year ended December 31, 1996
- Statement of Changes in Net Assets
for the Year ended December 31,
1996 and 1995 - Financial Highlights
- Notes to Financial Statements
- Report of Independent Accountants

December 31, 1996 Annual Report to
Shareholders of Ivy Growth with Income
Fund:
- Portfolio of Investments at
December 31, 1996 - Statement of
Assets and Liabilities as of
December 31, 1996
- Statement of Operations for the
Year ended December 31, 1996
- Statement of Changes in Net Assets
for the Year ended December 31,
1996 and 1995 - Financial Highlights
- Notes to Financial Statements
- Report of Independent Accountants

December 31, 1996 Annual Report to
Shareholders of Ivy International Fund:
- Portfolio of Investments at
December 31, 1996 - Statement of
Assets and Liabilities as of
December 31, 1996
- Statement of Operations for the
Year ended December 31, 1996
- Statement of Changes in Net Assets
for the Year ended December 31,
1996 and 1995 - Financial Highlights
- Notes to Financial Statements
- Report of Independent Accountants

Statement of Assets and Liabilities as
of December 10, 1996 and Related Notes
of Ivy International Small Companies
Fund:

- Report of Independent Accountants

December 31, 1996 Annual Report to
Shareholders of Ivy Latin America
Strategy Fund:
- Portfolio of Investments at
December 31, 1996 - Statement of
Assets and Liabilities as of
December 31, 1996
- Statement of Operations for the
Year ended December 31, 1996
- Statement of Changes in Net Assets
for the Year ended December 31,
1996 and 1995 - Financial Highlights
- Notes to Financial Statements
- Report of Independent Accountants

December 31, 1996 Annual Report to
Shareholders of Ivy New Century Fund:
- Portfolio of Investments at
December 31, 1996 - Statement of
Assets and Liabilities as of
December 31, 1996
- Statement of Operations for the
Year ended December 31, 1996
- Statement of Changes in Net Assets
for the Year ended December 31,
1996 and 1995 - Financial Highlights
- Notes to Financial Statements
- Report of Independent Accountants

December 31, 1996 Annual Report to
Shareholders of Ivy Money Market Fund:
- Portfolio of Investments at
December 31, 1996 - Statement of
Assets and Liabilities as of
December 31, 1996
- Statement of Operations for the
Year ended December 31, 1996
- Statement of Changes in Net Assets
for the Year ended December 31,
1996 and 1995 - Financial Highlights
- Notes to Financial Statements
- Report of Independent Accountants

(b) Exhibits:

1. (a) Amended and Restated Declaration of
Trust dated December 10, 1992,
filed with Post- Effective Amendment
No. 71 to Registration Statement
No. 2-17613 and incorporated by
reference herein.

(b) Amendment to Amended and Restated
Declaration of Trust, filed with
Post-Effective Amendment No. 73 to
Registration Statement No. 2-17613
and incorporated by reference herein.

No. 74 to Registration Statement
No. 2-17613 and incorporated by
reference herein.

(d) Establishment and Designation of
Additional Series (Ivy Emerging
Growth Fund), filed with Post-
Effective Amendment No. 73 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(e) Redesignation of Shares (Ivy Growth
with Income Fund--Class A) and
Establishment and Designation of
Additional Class (Ivy Growth with
Income Fund--Class C), filed with Post-
Effective Amendment No. 73 to Registration
Statement No. 2-17613 and incorporated by
reference herein.

(f) Redesignation of Shares (Ivy
Emerging Growth Fund--Class A, Ivy
Growth Fund--Class A and Ivy
International Fund--Class A), filed with
Post-Effective Amendment No. 74 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(g) Establishment and Designation of
Additional Series (Ivy China Region
Fund), filed with Post-Effective
Amendment No. 74 to Registration
Statement No. 2-17613 and
incorporated by reference herein.

(h) Establishment and Designation of
Additional Class (Ivy China Region
Fund--Class B, Ivy Emerging Growth
Fund--Class B, Ivy Growth Fund--
Class B, Ivy Growth with Income Fund--
Class B and Ivy International Fund--Class B),
filed with Post-Effective Amendment No. 74
for Registration Statement No. 2-17613 and
incorporated by reference herein.

(i) Establishment and Designation of
Additional Class (Ivy International
Fund--Class I), filed with Post-
Effective Amendment No. 74 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(j) Establishment and Designation of
Series and Classes (Ivy Latin
American Strategy Fund-- Class A and
Class B, Ivy New Century Fund--
Class A and Class B), filed with Post-
Effective Amendment No. 75 to Registration
Statement No. 2-17613 and incorporated by
reference herein.

(k) Establishment and Designation of
Series and Classes (Ivy
International Bond Fund--Class A
and Class B), filed with Post-Effective
Amendment No. 76 to Registration Statement
No. 2-17613 and incorporated by reference
herein.

(l) Establishment and Designation of
Series and Classes (Ivy Bond Fund,
Ivy Canada Fund, Ivy Global Fund,
Ivy Short-Term U.S. Government
Securities Fund (now known as Ivy Short-Term
Bond Fund) -- Class A and Class B), filed
with Post-Effective Amendment No. 77 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(m) Redesignation of Ivy Short-Term
U.S. Government Securities Fund as
Ivy Short-Term Bond Fund, filed
with Post-Effective Amendment No.
81 to Registration Statement No.
2-17613 and incorporated by reference
herein.

(n) Redesignation of Shares (Ivy Money
Market Fund--Class A and Ivy Money
Market Fund-- Class B), filed with
Post-Effective Amendment No. 84 to
Registration Statement No. 2-17613
and incorporated by reference herein.

(o) Form of Establishment and
Designation of Additional Class
(Ivy Bond Fund--Class C; Ivy Canada
Fund--Class C; Ivy China Region Fund--
Class C; Ivy Emerging Growth Fund--Class C;
Ivy Global Fund--Class C; Ivy Growth Fund--
Class C; Ivy Growth with Income Fund--Class
C; Ivy International Fund--Class C; Ivy
Latin America Strategy Fund--Class
C; Ivy International Bond Fund--
Class C; Ivy Money Market Fund--
Class C; Ivy New Century Fund--
Class C), filed with Post-Effective Amendment
No. 84 to Registration Statement No. 2-17613
and incorporated by reference herein.

(p) Establishment and Designation of
Series and Classes (Ivy Global
Science & Technology Fund--Class A,
Class B, Class C and Class I),
filed with Post-Effective Amendment No. 86 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(q) Establishment and designation of
Series and Classes (Ivy Global
Natural Resources Fund-- Class A,
Class B and Class C; Ivy Asia
Pacific Fund--Class A, Class B and Class C;

Ivy International Small Companies
Fund--Class A, Class B, Class C and
Class I), filed with Post-Effective
Amendment No. 89 to Registration
Statement No. 2-17613 and
incorporated by reference herein.

(r) Establishment and designation of
Series and Classes (Ivy Pan-Europe
Fund--Class A, Class B and Class
C), filed with Post-Effective
Amendment No. 92 to Registration Statement
No. 2-17613 and incorporated by reference
herein.

2. By-Laws, as amended and, filed with
Post-Effective Amendment No. 48 to
Registration Statement No. 2- 17613 and
incorporated by reference herein.

3. Not Applicable

4. (a) Specimen Securities for Ivy Growth
Fund, Ivy Growth with Income Fund,
Ivy International Fund and Ivy
Money Market Fund, filed with Post-
Effective Amendment No. 49 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(b) Specimen Security for Ivy Emerging
Growth Fund, filed with Post-
Effective Amendment No. 70 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(c) Specimen Security for Ivy China
Region Fund, filed with Post-
Effective Amendment No. 74 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(d) Specimen Security for Ivy Latin
American Strategy Fund, filed with
Post-Effective Amendment No. 75 to
Registration Statement No. 2-17613
and incorporated by reference
herein.

(e) Specimen Security for Ivy New
Century Fund, filed with Post-
Effective Amendment No. 75 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(f) Specimen Security for Ivy
International Bond Fund, filed with
Post-Effective Amendment No. 76 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(g) Specimen Securities for Ivy Bond
Fund, Ivy Canada Fund, Ivy Global
Fund, and Ivy Short

Term U.S. Government Securities
Fund, filed with Post-Effective
Amendment No. 77 to Registration
Statement No. 2-17613 and
incorporated by reference herein.

5. (a) Master Business Management and
Investment Advisory Agreement
between Ivy Fund and Ivy
Management, Inc. and Supplements for Ivy
Growth Fund, Ivy Growth with Income Fund, Ivy
International Fund and Ivy Money Market Fund,
filed with Post-Effective Amendment No. 68
to Registration Statement No.
2-17613 and incorporated by
reference herein.

(b) Subadvisory Contract by and among
Ivy Fund, Ivy Management, Inc. and
Boston Overseas Investors, Inc.,
filed with Post-Effective Amendment
No. 68 to Registration Statement
No. 2-17613 and incorporated by the reference
herein.

(c) Assignment Agreement relating to
Subadvisory Contract, filed with
Post-Effective Amendment No. 74 to
Registration Statement No. 2-17613
and incorporated by reference herein.

(d) Business Management and Investment
Advisory Agreement Supplement for
Ivy Emerging Growth Fund, filed
with Post-Effective Amendment No.
74 to Registration Statement No. 2-17613 and
incorporated by reference herein.

(e) Business Management and Investment
Advisory Agreement Supplement for
Ivy China Region Fund, filed with
Post-Effective Amendment No. 71 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(f) Form of Business Management and
Investment Advisory Supplement for
Ivy Latin America Strategy Fund,
filed with Post-Effective Amendment
No. 75 to Registration Statement
No. 2-17613 and incorporated by reference
herein.

(g) Form of Business Management and
Investment Advisory Agreement
Supplement for Ivy New Century
Fund, filed with Post-Effective
Amendment No. 75 to Registration Statement
No. 2-17613 and incorporated by reference
herein.

(h) Form of Business Management and
Investment Advisory Agreement
Supplement for Ivy

International Bond Fund, filed with
Post- Effective Amendment No. 76 to
Registration Statement No. 2-17613
and incorporated by reference
herein.

(i) Business Management and Investment
Advisory Agreement Supplement for
Ivy Bond Fund, Ivy Global Fund and
Ivy Short-Term U.S. Government
Securities Fund, filed with Post-
Effective Amendment No. 81 to Registration
Statement No. 2-17613 and incorporated by
reference herein.

(j) Master Business Management
Agreement between Ivy Fund and Ivy
Management, Inc., filed with Post-
Effective Amendment No. 81 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(k) Form of Supplement to Master
Business Agreement between Ivy Fund
and Ivy Management, Inc. (Ivy
Canada Fund), filed with Post-
Effective Amendment No. 77 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(l) Form of Investment Advisory
Agreement between Ivy Fund and
Mackenzie Financial Corporation,
filed with Post-Effective Amendment No. 77 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(m) Form of Supplement to Master
Business Management and Investment
Advisory Agreement between Ivy Fund
and Ivy Management, Inc. (Ivy
Global Science & Technology Fund), filed
with Post-Effective Amendment No. 86 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(n) Form of Supplement to Master
Business Management and Investment
Advisory Agreement between Ivy Fund
and Ivy Management, Inc. (Ivy Asia
Pacific Fund and Ivy International
Small Companies Fund), filed with Post-
Effective Amendment No. 89 to Registration
Statement No. 2-17613 and incorporated by
reference herein.

(o) Form of Supplement to Master
Business Management Agreement
between Ivy Fund and Ivy
Management, Inc. (Ivy Global Natural
Resources Fund), filed with Post-Effective
Amendment No. 89 to Registration Statement

No. 2-17613 and incorporated by
reference herein.

(p) Form of Supplement to Investment
Advisory Agreement between Ivy Fund
and Mackenzie Financial Corporation
(Ivy Global Natural Resources
Fund), filed with Post-Effective
Amendment No. 89 to Registration Statement
No. 2-17613 and incorporated by reference
herein.

6. (a) Dealer Agreement, as amended and,
filed with Post-Effective Amendment
No. 70 to Registration Statement
No. 2-17613 and incorporated by
reference herein.

(b) Amended and Restated Distribution
Agreement, filed with Post-
Effective Amendment No. 73 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(c) Addendum to Amended and Restated
Distribution Agreement, filed with
Post-Effective Amendment No. 73 to
Registration Statement No. 2-17613
and incorporated by reference
herein.

(d) Addendum to Amended and Restated
Distribution Agreement (Ivy Money
Market Fund--Class A and Class B),
filed with Post-Effective Amendment
No. 84 to Registration Statement No. 2-17613
and incorporated by reference herein.

(e) Form of Addendum to Amended and
Restated Distribution Agreement
(Class C), filed with Post-
Effective Amendment No. 84 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(f) Form of Addendum to Amended and
Restated Distribution Agreement
(Ivy Global Science & Technology
Fund--Class A, Class B, Class C and
Class I), filed with Post-Effective
Amendment No. 86 to Registration Statement
No. 2-17613 and incorporated by reference
herein.

(g) Form of Addendum to Amended and
Restated Distribution Agreement
(Ivy Global Natural Resources Fund-
- -Class A, Class B and Class C; Ivy
Asia Pacific Fund--Class A, Class B and
Class C; Ivy International Small Companies
Fund--Class A, Class B, Class C, and Class
I), filed with Post-Effective Amendment No.

89 to Registration Statement No.
2-17613 and incorporated by
reference herein.

7. Not Applicable

8. Custodian Agreement between Ivy Fund and
Brown Brothers Harriman & Co., filed
with Post-Effective Amendment No. 74 to
Registration No. 2-17613 and
incorporated by reference herein.

9. (a) Master Administrative Services
Agreement between Ivy Fund and
Mackenzie Investment Management
Inc. and Supplements for Ivy Growth
Fund, Ivy Growth with Income Fund, Ivy
International Fund and Ivy Money Market Fund,
filed with Post-Effective Amendment No. 68 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(b) Addendum to Administrative Services
Agreement Supplement for Ivy
International Fund, filed with
Post-Effective Amendment No. 74 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(c) Administrative Services Agreement
Supplement for Ivy Emerging Growth
Fund, filed with Post-Effective
Amendment No. 73 to Registration
Statement No. 2-17613 and
incorporated by reference herein. (d)
Administrative Services Agreement Supplement
for Ivy China Region Fund, filed with Post-
Effective Amendment No. 73 to Registration
Statement No. 2-17613 and incorporated by
reference herein.

(e) Administrative Services Agreement
Supplement for Class I Shares of
Ivy International Fund, filed with
Post-Effective Amendment No. 74 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(f) Master Fund Accounting Services
Agreement between Ivy Fund and
Mackenzie Investment Management
Inc. and Supplements for Ivy Growth
Fund, Ivy Emerging Growth Fund and Ivy
Money Market Fund, filed with Post-Effective
Amendment No. 73 to Registration Statement
No. 2-17613 and incorporated by reference
herein.

(g) Fund Accounting Services Agreement
Supplement for Ivy Growth with
Income Fund, filed with Post-
Effective Amendment No. 73 to

Registration Statement No. 2-17613
and incorporated by reference
herein.

(h) Fund Accounting Services Agreement
Supplement for Ivy China Region
Fund, filed with Post- Effective
Amendment No. 73 to Registration
Statement No. 2-17613 and incorporated by
reference herein.

(i) Transfer Agency and Shareholder
Services Agreement between Ivy Fund
and Ivy Management, Inc., filed
with Post-Effective Amendment No.
71 to Registration Statement No.
2-17613 and incorporated by reference
herein.

(j) Addendum to Transfer Agency and
Shareholder Services Agreement,
filed with Post-Effective Amendment
No. 73 to Registration Statement
No. 2-17613 and incorporated by reference
herein.

(k) Assignment Agreement relating to
Transfer Agency and Shareholder
Services Agreement, filed with
Post-Effective Amendment No. 74 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(l) Form of Administrative Services
Agreement Supplement for Ivy Latin
America Strategy Fund, filed with
Post-Effective Amendment No. 75 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(m) Form of Administrative Services
Agreement Supplement for Ivy New
Century Fund, filed with Post-
Effective Amendment No. 75 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(n) Form of Fund Accounting Services
Agreement Supplement for Ivy Latin
America Strategy Fund, filed with
Post-Effective Amendment No. 75 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(o) Form of Fund Accounting Services
Agreement Supplement for Ivy New
Century Fund, filed with Post-
Effective Amendment No. 75 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(p) Form of Administrative Services
Agreement Supplement for Ivy
International Bond Fund,

filed with Post-Effective Amendment
No. 76 to Registration Statement
No. 2-17613 and incorporated by
reference herein.

(q) Form of Fund Accounting Services
Agreement Supplement for
International Bond Fund, filed with
Post-Effective Amendment No. 76 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(r) Addendum to Transfer Agency and
Shareholder Services Agreement,
filed with Post-Effective Amendment
No. 76 to Registration Statement
No. 2-17613 and incorporated by reference
herein.

(s) Addendum to Transfer Agency and
Shareholder Services Agreement,
filed with Post-Effective Amendment
No. 77 to Registration Statement
No. 2-17613 and incorporated by reference
herein.

(t) Administrative Services Agreement
Supplement for Ivy Bond Fund, Ivy
Global Fund and Ivy Short-Term U.S.
Government Securities Fund, filed
with Post-Effective Amendment No. 81 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(u) Fund Accounting Services Agreement
Supplement for Ivy Bond Fund, Ivy
Global Fund and Ivy Short-Term U.S.
Government Securities Fund, filed
with Post-Effective Amendment No. 81 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(v) Form of Administrative Services
Agreement Supplement for Ivy Bond
Fund, Ivy Canada Fund, Ivy China
Region Fund, Ivy Emerging Growth
Fund, Ivy Global Fund, Ivy Growth
Fund, Ivy Growth with Income Fund, Ivy
International Fund, Ivy International Bond
Fund, Ivy Latin America Strategy Fund, Ivy
Money Market Fund and Ivy New Century Fund,
filed with Post-Effective Amendment No. 84
to Registration Statement No.
2-17613 and incorporated by
reference herein.

(w) Form of Addendum to Transfer Agency
and Shareholder Services Agreement,
filed with Post-Effective Amendment
No. 84 to Registration Statement
No. 2-17613 and incorporated by
reference herein.

(x) Form of Administrative Services
Agreement Supplement for Ivy Global
Science & Technology Fund, filed
with Post-Effective Amendment No.
86 to Registration Statement No.
2-17613 and incorporated by reference
herein.

(y) Form of Fund Accounting Services
Agreement Supplement for Ivy Global
Science & Technology Fund, filed
with Post-Effective Amendment No.
86 to Registration Statement No.
2-17613 and incorporated by reference
herein.

(z) Form of Addendum to Transfer Agency
and Shareholder Services Agreement
for Ivy Global Science & Technology
Fund, filed with Post- Effective
Amendment No. 86 to Registration
Statement No. 2-17613 and incorporated by
reference herein.

(aa) Form of Administrative Services
Agreement Supplement for Ivy Global
Natural Resources Fund, Ivy Asia
Pacific Fund and Ivy International
Small Companies Fund, filed with
Post-Effective Amendment No. 89 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(bb) Form of Fund Accounting Services
Agreement Supplement for Ivy Global
Natural Resources Fund, Ivy Asia
Pacific Fund and Ivy International
Small Companies Fund, filed with
Post-Effective Amendment No. 89 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(cc) Form of Addendum to Transfer Agency
and Shareholder Services Agreement
for Ivy Global Natural Resources
Fund, Ivy Asia Pacific Fund and Ivy
International Small Companies Fund,
filed with Post-Effective Amendment No. 89 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

10. Opinion and Consent of Dechert Price &
Rhoads, filed herewith.

11. Consents of Coopers & Lybrand L.L.P.,
filed herewith.

12. Reports of Coopers & Lybrand L.L.P.,
filed herewith, and the following
Financial Statements

filed electronically on March 4, 1997
and incorporated by reference herein:

(a) Annual Report to Shareholders of
Ivy Bond Fund for the year ended
December 31, 1996

(b) Annual Report to Shareholders of
Ivy Canada Fund for the year ended
December 31, 1996

(d) Annual Report to Shareholders of
Ivy Emerging Growth Fund for the
year ended December 31, 1996

(e) Annual Report to Shareholders of
Ivy Global Fund for the year ended
December 31, 1996

(f) Annual Report to Shareholders of
Ivy Growth Fund for the year ended
December 31, 1996

(g) Annual Report to Shareholders of
Ivy Growth with Income Fund for the
year ended December 31, 1996

(h) Annual Report to Shareholders of
Ivy International Fund for the year
ended December 31, 1996

(i) Annual Report to Shareholders of
Ivy Latin America Strategy Fund for
the year ended December 31, 1996

(j) Annual Report to Shareholders of
Ivy New Century Fund for the year
ended December 31, 1996

(k) Annual Report to Shareholders of
Ivy Global Science & Technology
Fund for the period from July 22,
1996 (commencement of operations) to
December 31, 1996

(l) Annual Report to Shareholders of
Ivy Money Market Fund for the year
ended December 31, 1996

13. Not applicable

14. Not applicable

15. (a) Amended and Restated Distribution
Plan for Class A shares of Ivy
China Region Fund, Ivy

Growth Fund, Ivy Growth with Income
Fund, Ivy International Fund and
Ivy Emerging Growth Fund, filed
with Post-Effective Amendment No.
73 to Registration Statement No. 2-17613 and
incorporated by reference herein.

(b) Distribution Plan for Class B
shares of Ivy China Region Fund,
Ivy Growth Fund, Ivy Growth with
Income Fund, Ivy International Fund
and Ivy Emerging Growth Fund, filed with
Post-Effective Amendment No. 73 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(c) Distribution Plan for Class C
Shares of Ivy Growth with Income
Fund, filed with Post- Effective
Amendment No. 73 to Registration
Statement No. 2-17613 and incorporated by
reference herein.

(d) Form of Rule 12b-1 Related
Agreement, filed with Post-
Effective Amendment No. 73 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(e) Supplement to Master Amended and
Restated Distribution Plan for Ivy
Fund Class A Shares, filed with
Post-Effective Amendment No. 76 to
Registration Statement No. 2-17613
and incorporated by reference herein.

(f) Supplement to Distribution Plan for
Ivy Fund Class B Shares, filed with
Post-Effective Amendment No. 76 to
Registration Statement No. 2-17613
and incorporated by reference
herein.

(g) Supplement to Master Amended and
Restated Distribution Plan for Ivy
Fund Class A Shares, filed with
Post-Effective Amendment No. 77 to
Registration Statement No. 2-17613
and incorporated by reference herein.

(h) Supplement to Distribution Plan for
Ivy Fund Class B Shares, filed with
Post-Effective Amendment No. 77 to
Registration Statement No. 2-17613
and incorporated by reference
herein.

(i) Form of Supplement to Distribution
Plan for Ivy Growth with Income
Fund Class C Shares (Redesignation
as Class D Shares), filed with
Post-Effective Amendment No. 84 to

Registration Statement No. 2-17613
and incorporated by reference
herein.

(j) Form of Distribution Plan for Class
C shares of Ivy Bond Fund, Ivy
Canada Fund, Ivy China Region Fund,
Ivy Emerging Growth Fund, Ivy
Global Fund, Ivy Growth Fund, Ivy Growth with
Income Fund, Ivy International Fund, Ivy
International Bond Fund, Ivy Latin America
Strategy Fund and Ivy New Century Fund, filed
with Post-Effective Amendment No. 85
to Registration Statement No.
2-17613 and incorporated by
reference herein.

(k) Form of Supplement to Master
Amended and Restated Distribution
Plan for Ivy Fund Class A Shares
(Ivy Global Science & Technology
Fund), filed with Post-Effective Amendment
No. 87 to Registration Statement No. 2-17613
and incorporated by reference herein.

(l) Form of Supplement to Distribution
Plan for Ivy Fund Class B Shares
(Ivy Global Science & Technology
Fund), filed with Post-Effective
Amendment No. 87 to Registration Statement
No. 2-17613 and incorporated by reference
herein.

(m) Form of Supplement to Distribution
Plan for Ivy Fund Class C Shares
(Ivy Global Science & Technology
Fund), filed with Post-Effective
Amendment No. 87 to Registration Statement
No. 2-17613 and incorporated by reference
herein.

(n) Form of Supplement to Master
Amended and Restated Distribution
Plan for Ivy Fund Class A Shares
(Ivy Global Natural Resources Fund,
Ivy Asia Pacific Fund and Ivy International
Small Companies Fund), filed with Post-
Effective Amendment No. 89 to Registration
Statement No. 2-17613 and incorporated by
reference herein.

(o) Form of Supplement to Distribution
Plan for Ivy Fund Class B Shares
(Ivy Global Natural Resources
Fund, Ivy Asia Pacific Fund and Ivy
International Small Companies Fund), filed
with Post-Effective Amendment No. 89 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(p) Form of Supplement to Distribution
Plan for Ivy Fund Class C Shares
(Ivy Global Natural

Resources Fund, Ivy Asia Pacific
Fund and Ivy International Small
Companies Fund), filed with Post-
Effective Amendment No. 89 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

16. Schedule of Computation of Standardized
Performance Quotations, filed with Post-
Effective Amendment No. 71 to
Registration Statement No. 2- 17613 and
incorporated by reference herein.

17. Financial Data Schedules filed with this
Post- Effective Amendment No. 93 to
Registration Statement No. 2-17613.

18. (a) Plan adopted pursuant to Rule 18f-3
under the Investment Company Act of
1940, filed with Post-Effective
Amendment No. 83 to Registration
Statement No. 2-17613 and
incorporated by reference herein.

(b) Form of Amended and Restated Plan
adopted pursuant to Rule 18f-3
under the Investment Company Act of
1940, filed with Post- Effective
Amendment No. 85 to Registration
Statement No. 2-17613 and incorporated by
reference herein.

(c) Form of Amended and Restated Plan
adopted pursuant to Rule 18f-3
under the Investment Company Act of
1940, filed with Post- Effective
Amendment No. 87 to Registration
Statement No. 2-17613 and incorporated by
reference herein.

(d) Form of Amended and Restated Plan
adopted pursuant to Rule 18f-3
under the Investment Company Act of
1940, filed with Post- Effective
Amendment No. 89 to Registration
Statement No. 2-17613 and incorporated by
reference herein.

(e) Form of Amended and Restated Plan
adopted pursuant to Rule 18f-3
under the Investment Company Act of
1940, filed with Post- Effective
Amendment No. 92 to Registration
Statement No. 2-17613 and incorporated by
reference herein.

25. Not applicable

26. Number of Holders of Securities

Fund: Date Class Record
Holders

Ivy Asia Pacific 1/31/97 Class A 13
Fund Class B 1
Class C 0

Ivy Bond Fund 1/31/97 Class A 4,635
Class B 217
Class C 41
Class I 0

Ivy Canada Fund 1/31/97 Class A 2,202
Class B 179
Class C 22

Ivy China Region 1/31/97 Class A 2,178
Class B 1,122
Class C 34

Ivy Emerging 1/31/97 Class A 5,211
Growth Fund Class B 3,318
Class C 259

Ivy Global Fund 1/31/97 Class A 1,474
Class B 638
Class C 11

Ivy Global Natural 1/31/97 Class A 50
Resources Fund Class B 12
Class C 1

Ivy Global Science 1/31/97 Class A 537
& Technology Fund Class B 400
Class C 198
Class I 0

Ivy Growth Fund 1/31/97 Class A 29,882
Class B 280
Class C 7

Ivy Growth with 1/31/97 Class A 6,062
Income Fund Class B 638
Class C 11
Class D 35

Ivy International 1/31/97 Class A 22,697
Fund Class B 15,183
Class C 1,270
Class I 327

Ivy International 1/31/97 Class A 0
Bond Fund Class B 0
Class C 0

Ivy International 1/31/97 Class A 29
Small Companies Fund Class B 20
Class C 2
Class D 0

Ivy Latin America 1/31/97 Class A 354
Strategy Fund Class B 158
Class C 7

Ivy Money Market 1/31/97 Class A 2,444
Fund Class B 133
Class C 7

Ivy New Century 1/31/97 Class A 877
Fund Class B 521
Class C 152

27. Indemnification

A policy of insurance covering Ivy Management Inc.
and the Registrant will insure the Registrant's
trustees and officers and others against liability
arising by reason of an actual or alleged breach
of duty, neglect, error, misstatement, misleading
statement, omission or other negligent act.

Reference is made to Article VIII of the
Registrant's Amended and Restated Declaration of
Trust, dated December 10, 1992, filed with Post-
Effective Amendment No. 71 to Registration
Statement No. 2-17613 and incorporated by
reference herein.

28. Business and Other Connections of Investment
Adviser

Information Regarding Adviser and Subadviser Under
Advisory Arrangements. Reference is made to the
Form ADV of each of Ivy Management, Inc., the
adviser to the Trust, Mackenzie Financial
Corporation, the adviser to Ivy Canada Fund, and
Northern Cross Investments Limited (the successor to Boston
Overseas Investors, Inc.), the subadviser to Ivy
International Fund.

The list required by this Item 28 of officers and
directors of Ivy Management, Inc. and Northern
Cross Investments Limited, together with
information as to any other business profession,
vocation or employment of a substantial nature
engaged in by such officers and directors during the past
two years, is incorporated by reference to Schedules A and
D of each firm's respective Form ADV.

29. Principal Underwriters

(a) Ivy Mackenzie Distribution, Inc. ("IMDI"),
formerly Mackenzie Ivy Funds Distribution,
Inc., Via Mizner

Financial Plaza, 700 South Federal Highway,
Suite 300, Boca Raton, Florida 33432,
Registrant's distributor, is a subsidiary of
Mackenzie Investment Management Inc.
("MIMI"), Via Mizner Financial Plaza, 700 South Federal
Highway, Suite 300, Boca Raton, Florida 33432. IMDI
also serves as the distributor for Mackenzie
Series Trust. IMDI is the successor to
MIMI's distribution activities.

(b) The information required by this Item 29
regarding each director, officer or partner
of IMDI is incorporated by reference to
Schedule A of Form BD filed by IMDI pursuant
to the Securities Exchange Act of 1934.

30. Location of Accounts and Records

The information required by this item is
incorporated by reference to Item 7 of Part II of
Post-Effective Amendment No. 46 to Registration
Statement No. 2-17613.

31. Not applicable

32. Undertakings

(a) Not applicable

(b) not applicable

(c) Registrant undertakes to furnish each person
to whom a prospectus is delivered with a copy
of Registrant's latest annual report to
shareholders, upon request and without
charge.

SIGNATURES

Pursuant to the requirements of the Securities Act
of 1933 and the Investment Company Act of 1940, the
Registrant certifies that it meets all of the
requirements for effectiveness of this Post-Effective
Amendment No. 93 to its Registration Statement pursuant
to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Post-Effective Amendment No. 93 to its
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston, in
the Commonwealth of Massachusetts, on the twenty-ninth
day of April, 1997.

IVY FUND

By: Keith J.
Carlson*#
President *By: JOSEPH R. FLEMING
Attorney-in-fact

Pursuant to the requirements of the Securities Act
of 1933, this Post-Effective Amendment No. 93 to the
Registration Statement has been signed below by the
following persons in the capacities and on the dates
indicated.

SIGNATURES TITLE
DATE

MICHAEL G. LANDRY* Trustee and
4/29/97 Chairman (Chief
Executive Officer)

JOHN S. ANDEREGG, JR.* Trustee
4/29/97

PAUL H. BROYHILL* Trustee
4/29/97

STANLEY CHANNICK* Trustee
4/29/97

FRANK W. DEFRIECE, JR.* Trustee
4/29/97

ROY J. GLAUBER* Trustee
4/29/97

KEITH J. CARLSON** Trustee and
4/29/97 President

JOSEPH G. ROSENTHAL* Trustee
4/29/97

RICHARD N. SILVERMAN* Trustee
4/29/97

J. BRENDAN SWAN* Trustee
4/29/97

C. WILLIAM FERRIS* Secretary/Treasurer
4/29/97 (Chief Financial
Officer)

*By: JOSEPH R. FLEMING
Attorney-in-fact

* Executed pursuant to powers of attorney filed with
Post-Effective Amendments Nos. 69, 73, 74, 84 and
89 to Registration Statement No. 2-17613.

# Executed pursuant to resolutions filed with Post-
Effective Amendment No. 91 to Registration
Statement No. 2-17613 and incorporated by
reference herein.

EXHIBIT INDEX

10 Opinion and Consent of Dechert Price & Rhoads

11 Consent of Coopers & Lybrand L.L.P.

12 Report of Coopers & Lybrand L.L.P.

17 Financial Data Schedules

EXHIBIT 10

DECHERT PRICE & RHOADS
TEN POST OFFICE SQUARE -- SOUTH
SUITE 1230
BOSTON, MASSACHUSETTS 02109-4603

April 29, 1997

Ivy Fund
Via Mizner Financial Plaza
700 South Federal Highway
Suite 300
Boca Raton, Florida 33432

Dear Sirs:

As counsel for Ivy Fund (the "Trust"), we are familiar with
the registration of the Trust under the Investment Company Act of
1940, as amended (the "1940 Act")(File No. 811-1028), and the
prospectuses contained in Post-Effective Amendment No. 93 to the
Trust's registration statement relating to the shares of
beneficial interest of Ivy Asia Pacific Fund, Ivy Bond Fund, Ivy
Canada Fund, Ivy China Region Fund, Ivy Emerging Growth Fund, Ivy
Global Fund, Ivy Global Natural Resources Fund, Ivy Global
Science & Technology Fund, Ivy Growth Fund, Ivy Growth with
Income Fund, Ivy International Fund, Ivy International Small
Companies Fund, Ivy International Bond Fund, Ivy Latin America
Strategy Fund, Ivy Money Market Fund and Ivy New Century Fund
(the "Shares") being filed under the Securities Act of 1933, as
amended (File No. 2-17613)("Post-Effective Amendment No. 93").
We have also examined such other records of the Trust,
agreements, documents and instruments as we deemed appropriate.

Based upon the foregoing, it is our opinion that the Shares
have been duly authorized and, when issued and sold at the public
offering price contemplated by the Prospectuses for the Funds and
delivered by the Trust against receipt of the net asset value of
the Shares, will be issued as fully paid and nonassessable shares
of the Trust.

We consent to the filing of this opinion on behalf of the
Trust with the Securities and Exchange Commission in connection
with the filing of Post-Effective Amendment No. 93.

Very truly yours,

DECHERT PRICE & RHOADS

EXHIBIT 11

CONSENT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of
Ivy Fund

We hereby consent to the incorporation by reference and inclusion
in Post-Effective Amendment No. 93 to the Registration Statement
on Form N-1A (File No. 2-17613, hereafter the "Registration
Statement") of Ivy Fund of our reports dated February 14, 1997,
on our audits of the financial statements and financial
highlights of Ivy Money Market Fund, Ivy International Fund, Ivy
Bond Fund, Ivy Emerging Growth Fund, Ivy Global Science and
Technology Fund, Ivy Growth Fund, Ivy Growth with Income Fund,
Ivy Latin American Strategy Fund, Ivy China Region Fund, Ivy New
Century Fund, Ivy Global Fund, and Ivy Canada Fund appearing in
the December 31, 1996 Annual Reports to Shareholders of the
Funds, which annual reports are incorporated by reference in
Post-Effective Amendment No. 93 to the Registration Statement.
We also consent to the reference to our Firm under the caption
"The Funds' Financial Highlights" in the Prospectus and
"Auditors" in the Fund's Statement of Additional Information.

COOPERS & LYBRAND L.L.P.

Fort Lauderdale, Florida
April 28, 1997

CONSENT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of
Ivy Fund

We hereby consent to the inclusion in Item 24 to Part C of Post-
Effective Amendment No. 93 to the Registration Statement on Form
N-1A (File No. 2-17613, hereafter the "Registration Statement")
of Ivy Fund of our reports dated December 11, 1996, on our audits
of the Statements of Assets and Liabilities as of December 10,
1996 of Ivy Asia Pacific Fund, Ivy Global Natural Resources Fund,
and Ivy International Small Companies Fund appearing in the
Registration Statement. We also consent to the reference to our
Firm under the caption "The Funds' Financial Highlights" in the
Prospectus and "Auditors" in the Fund's Statement of Additional
Information.

COOPERS & LYBRAND L.L.P.

Fort Lauderdale, Florida
April 28, 1997

EXHIBIT 12

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of
Ivy Asia Pacific Fund (the Fund)

We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable
basis for our opinion.

In our opinion, the financial statement referred to above
presents fairly, in all material respects, the financial position
of the Fund as of December 10, 1996, in conformity with generally
accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Fort Lauderdale, Florida

December 11, 1996

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of
Ivy Bond Fund (the Fund)

We have audited the accompanying statement of assets and
liabilities of the Fund, including the schedule of portfolio
investments, as of December 31, 1996, and the related statement
of operations for the year then ended, the statement of changes
in net assets for each of the two years in the period then ended,
and the financial highlights for each of the periods indicated.
These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is
to express an opinion on these financial statements and financial
highlights based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
securities owned as of December 31, 1996, by correspondence with
the custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of the Fund as of December 31, 1996, the
results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then
ended, and the financial highlights for each of the periods
indicated, in conformity with generally accepted accounting
principles.

Fort Lauderdale, Florida

February 14, 1997

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of
Ivy Canada Fund (the Fund)

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
securities owned as of December 31, 1996, by correspondence with
the custodian. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.

Fort Lauderdale, Florida

February 14, 1997

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of
Ivy China Region Fund (the Fund)

Fort Lauderdale, Florida

February 14, 1997

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of
Ivy Emerging Growth Fund (the Fund)

Fort Lauderdale, Florida

February 14, 1997

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of
Ivy Global Fund (the Fund)

Fort Lauderdale, Florida

February 14, 1997

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of
Ivy Global Natural Resources Fund (the Fund)

We have audited the accompanying Statement of Assets and
Liabilities of the Fund as of December 10, 1996. This financial
statement is the responsibility of the Fund's management. Our
responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable
basis for our opinion.

In our opinion, the financial statement referred to above present
fairly, in all material respects, the financial position of the
Fund as of December 10, 1996, in conformity with generally
accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Fort Lauderdale, Florida

December 11, 1996

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of
Ivy Global Science & Technology Fund (the Fund)

We have audited the accompanying statement of assets and
liabilities of the Fund, including the schedule of portfolio
investments, as of December 31, 1996, and the related statements
of operations, the statement of changes in net assets and the
financial highlights for the period July 22, 1996 (commencement)
to December 31, 1996. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial
statements and financial highlights based on our audit.

We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
securities owned as of December 31, 1996, by correspondence with
the custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable
basis for our opinion.

In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of the Fund as of December 31, 1996, the
results of its operations, the changes in its net assets and the
financial highlights for the period July 22, 1996 (commencement)
to December 31, 1996, in conformity with generally accepted
accounting principles.

Fort Lauderdale, Florida

February 14, 1997

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of
Ivy Growth Fund (the Fund)

Fort Lauderdale, Florida

February 14, 1997

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of
Ivy Growth with Income Fund (the Fund)

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
securities owned as of December 31, 1996, by correspondence with
the custodian. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.

Fort Lauderdale, Florida

February 14, 1997

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of
Ivy International Fund (the Fund)

Fort Lauderdale, Florida

February 14, 1997

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of
Ivy International Small Companies Fund (the Fund)

COOPERS & LYBRAND L.L.P.

Fort Lauderdale, Florida
December 11, 1996

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of
Ivy Latin America Strategy Fund (the Fund)

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
securities owned as of December 31, 1996, by correspondence with
the custodian. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.

Fort Lauderdale, Florida

February 14, 1997

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of
Ivy Money Market Fund (the Fund)

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of
securities owned as of December 31, 1996, by correspondence with
the custodian. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.

Fort Lauderdale, Florida
February 14, 1997

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of
Ivy New Century Fund (the Fund)

Fort Lauderdale, Florida

February 14, 1997

<PAGE>
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<NAME> IVY BOND FUND - CLASS A

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<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
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<INTEREST-INCOME> 9290175
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<EXPENSES-NET> 1661436
<NET-INVESTMENT-INCOME> 7628739
<REALIZED-GAINS-CURRENT> 474162
<APPREC-INCREASE-CURRENT> (362715)
<NET-CHANGE-FROM-OPS> 7740186
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 7282279
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 143137
<NUMBER-OF-SHARES-SOLD> 1351568
<NUMBER-OF-SHARES-REDEEMED> 2965988
<SHARES-REINVESTED> 478725
<NET-CHANGE-IN-ASSETS> (10224121)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (7241150)
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 781647
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1661436
<AVERAGE-NET-ASSETS> 104184176
<PER-SHARE-NAV-BEGIN> 9.78
<PER-SHARE-NII> .72
<PER-SHARE-GAIN-APPREC> .03
<PER-SHARE-DIVIDEND> .72
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> .01
<PER-SHARE-NAV-END> 9.80
<EXPENSE-RATIO> 1.56
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 132
<NAME> IVY BOND FUND - CLASS B

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 101273778
<INVESTMENTS-AT-VALUE> 103478231
<RECEIVABLES> 2382720
<ASSETS-OTHER> 17421
<OTHER-ITEMS-ASSETS> 54687
<TOTAL-ASSETS> 105933059
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2133768
<TOTAL-LIABILITIES> 2133768
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<PAID-IN-CAPITAL-COMMON> 107897032
<SHARES-COMMON-STOCK> 540977
<SHARES-COMMON-PRIOR> 508479
<ACCUMULATED-NII-CURRENT> 10945
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (6313139)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2204453
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<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 9290175
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<OVERDIST-NET-GAINS-PRIOR> 0
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<GROSS-EXPENSE> 1661436
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</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 134
<NAME> IVY BOND FUND - CLASS C

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
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<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 101273778
<INVESTMENTS-AT-VALUE> 103478231
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<SHARES-COMMON-PRIOR> 11094
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<NET-INVESTMENT-INCOME> 7628739
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</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 101
<NAME> IVY CANADA FUND - CLASS A

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
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<INVESTMENTS-AT-COST> 18022279
<INVESTMENTS-AT-VALUE> 17534311
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<TOTAL-ASSETS> 17600420
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<OTHER-ITEMS-LIABILITIES> 138539
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<ACCUM-APPREC-OR-DEPREC> (488115)
<NET-ASSETS> 17461881
<DIVIDEND-INCOME> 113445
<INTEREST-INCOME> 73283
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<EXPENSES-NET> 526956
<NET-INVESTMENT-INCOME> (340228)
<REALIZED-GAINS-CURRENT> 2677225
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<NET-CHANGE-IN-ASSETS> (3032693)
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<OVERDIST-NET-GAINS-PRIOR> 0
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</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 102
<NAME> IVY CANADA FUND - CLASS B

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 18022279
<INVESTMENTS-AT-VALUE> 17534311
<RECEIVABLES> 39910
<ASSETS-OTHER> 5830
<OTHER-ITEMS-ASSETS> 20369
<TOTAL-ASSETS> 17600420
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 138539
<TOTAL-LIABILITIES> 138539
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 17906958
<SHARES-COMMON-STOCK> 212746
<SHARES-COMMON-PRIOR> 125767
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<ACCUM-APPREC-OR-DEPREC> (488115)
<NET-ASSETS> 17461881
<DIVIDEND-INCOME> 113445
<INTEREST-INCOME> 73283
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<EXPENSES-NET> 526956
<NET-INVESTMENT-INCOME> (340228)
<REALIZED-GAINS-CURRENT> 2677225
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<SHARES-REINVESTED> 21699
<NET-CHANGE-IN-ASSETS> (3032693)
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<PER-SHARE-NAV-BEGIN> 9.21
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</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 103
<NAME> IVY CANADA FUND - CLASS C

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 18022279
<INVESTMENTS-AT-VALUE> 17534311
<RECEIVABLES> 39910
<ASSETS-OTHER> 5830
<OTHER-ITEMS-ASSETS> 20369
<TOTAL-ASSETS> 17600420
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 138539
<TOTAL-LIABILITIES> 138539
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<PAID-IN-CAPITAL-COMMON> 17906958
<SHARES-COMMON-STOCK> 17969
<SHARES-COMMON-PRIOR> 2627
<ACCUMULATED-NII-CURRENT> 0
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<ACCUM-APPREC-OR-DEPREC> (488115)
<NET-ASSETS> 17461881
<DIVIDEND-INCOME> 113445
<INTEREST-INCOME> 73283
<OTHER-INCOME> 0
<EXPENSES-NET> 526956
<NET-INVESTMENT-INCOME> (340228)
<REALIZED-GAINS-CURRENT> 2677225
<APPREC-INCREASE-CURRENT> 1776983
<NET-CHANGE-FROM-OPS> 4113980
<EQUALIZATION> 0
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<DISTRIBUTIONS-OF-GAINS> 14472
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<NUMBER-OF-SHARES-SOLD> 49422
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<SHARES-REINVESTED> 795
<NET-CHANGE-IN-ASSETS> (3032693)
<ACCUMULATED-NII-PRIOR> (185467)
<ACCUMULATED-GAINS-PRIOR> 459535
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<OVERDIST-NET-GAINS-PRIOR> 0
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<PER-SHARE-NAV-BEGIN> 10.67
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<PER-SHARE-NAV-END> 9.62
<EXPENSE-RATIO> 3.15
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</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 081
<NAME> IVY NEW CENTURY FUND - CLASS A

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 16422592
<INVESTMENTS-AT-VALUE> 17396117
<RECEIVABLES> 93810
<ASSETS-OTHER> 4660
<OTHER-ITEMS-ASSETS> 630285
<TOTAL-ASSETS> 18124872
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<OTHER-ITEMS-LIABILITIES> 77730
<TOTAL-LIABILITIES> 77730
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<PAID-IN-CAPITAL-COMMON> 17120124
<SHARES-COMMON-STOCK> 981082
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<ACCUMULATED-NII-CURRENT> 0
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<ACCUMULATED-NET-GAINS> (46396)
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<ACCUM-APPREC-OR-DEPREC> 973414
<NET-ASSETS> 18047142
<DIVIDEND-INCOME> 213717
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<EXPENSES-NET> 269311
<NET-INVESTMENT-INCOME> (54000)
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<NUMBER-OF-SHARES-SOLD> 770476
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<OVERDIST-NET-GAINS-PRIOR> 0
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<GROSS-EXPENSE> 336911
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<PER-SHARE-NAV-BEGIN> 9.05
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<PER-SHARE-NAV-END> 10.12
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</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 082
<NAME> IVY NEW CENTURY FUND - CLASS B

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 16422592
<INVESTMENTS-AT-VALUE> 17396117
<RECEIVABLES> 93810
<ASSETS-OTHER> 4660
<OTHER-ITEMS-ASSETS> 630285
<TOTAL-ASSETS> 18124872
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 77730
<TOTAL-LIABILITIES> 77730
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 17120124
<SHARES-COMMON-STOCK> 624281
<SHARES-COMMON-PRIOR> 104469
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<ACCUMULATED-NET-GAINS> (46396)
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<DIVIDEND-INCOME> 213717
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<EXPENSES-NET> 269311
<NET-INVESTMENT-INCOME> (54000)
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<NET-CHANGE-IN-ASSETS> 13666453
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<OVERDIST-NET-GAINS-PRIOR> 0
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<GROSS-EXPENSE> 336911
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<PER-SHARE-NAV-BEGIN> 9.05
<PER-SHARE-NII> (.06)
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<PER-SHARE-NAV-END> 10.04
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</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 083
<NAME> IVY NEW CENTURY FUND - CLASS C

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 16422592
<INVESTMENTS-AT-VALUE> 17396117
<RECEIVABLES> 93810
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<TOTAL-ASSETS> 18124872
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<OTHER-ITEMS-LIABILITIES> 77730
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<PAID-IN-CAPITAL-COMMON> 17120124
<SHARES-COMMON-STOCK> 184186
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<ACCUMULATED-NET-GAINS> (46396)
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<ACCUM-APPREC-OR-DEPREC> 973414
<NET-ASSETS> 18047142
<DIVIDEND-INCOME> 213717
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<EXPENSES-NET> 269311
<NET-INVESTMENT-INCOME> (54000)
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<APPREC-INCREASE-CURRENT> 948226
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<NUMBER-OF-SHARES-SOLD> 186226
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<NET-CHANGE-IN-ASSETS> 13666453
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<OVERDIST-NET-GAINS-PRIOR> 0
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<GROSS-EXPENSE> 336911
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<PER-SHARE-NAV-BEGIN> 9.89
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<PER-SHARE-NAV-END> 10.06
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</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 061
<NAME> IVY CHINA REGION FUND - CLASS A

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
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<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 23602298
<INVESTMENTS-AT-VALUE> 25108142
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<OTHER-ITEMS-ASSETS> 105176
<TOTAL-ASSETS> 26371457
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<OTHER-ITEMS-LIABILITIES> 1637916
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<PAID-IN-CAPITAL-COMMON> 24826143
<SHARES-COMMON-STOCK> 1484596
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<ACCUMULATED-NET-GAINS> (1598521)
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<ACCUM-APPREC-OR-DEPREC> 1505919
<NET-ASSETS> 24733541
<DIVIDEND-INCOME> 582858
<INTEREST-INCOME> 6056
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<EXPENSES-NET> 578429
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<REALIZED-GAINS-CURRENT> (1001126)
<APPREC-INCREASE-CURRENT> 5263221
<NET-CHANGE-FROM-OPS> 4272580
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<NUMBER-OF-SHARES-SOLD> 1537034
<NUMBER-OF-SHARES-REDEEMED> 1556713
<SHARES-REINVESTED> 6616
<NET-CHANGE-IN-ASSETS> 4973373
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (304802)
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
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<GROSS-EXPENSE> 644104
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<PER-SHARE-NAV-BEGIN> 8.58
<PER-SHARE-NII> .03
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<RETURNS-OF-CAPITAL> .02
<PER-SHARE-NAV-END> 10.30
<EXPENSE-RATIO> 2.20
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<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 062
<NAME> IVY CHINA REGION FUND - CLASS B

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 23602298
<INVESTMENTS-AT-VALUE> 25108142
<RECEIVABLES> 1151539
<ASSETS-OTHER> 6600
<OTHER-ITEMS-ASSETS> 105176
<TOTAL-ASSETS> 26371457
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<OTHER-ITEMS-LIABILITIES> 1637916
<TOTAL-LIABILITIES> 1637916
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<PAID-IN-CAPITAL-COMMON> 24826143
<SHARES-COMMON-STOCK> 875128
<SHARES-COMMON-PRIOR> 897947
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1598521)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1505919
<NET-ASSETS> 24733541
<DIVIDEND-INCOME> 582858
<INTEREST-INCOME> 6056
<OTHER-INCOME> 0
<EXPENSES-NET> 578429
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> (1001126)
<APPREC-INCREASE-CURRENT> 5263221
<NET-CHANGE-FROM-OPS> 4272580
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 998886
<NUMBER-OF-SHARES-REDEEMED> 928212
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4973373
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (304802)
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 233804
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 644104
<AVERAGE-NET-ASSETS> 23374470
<PER-SHARE-NAV-BEGIN> 8.58
<PER-SHARE-NII> (.04)
<PER-SHARE-GAIN-APPREC> 1.74
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.28
<EXPENSE-RATIO> 2.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 063
<NAME> IVY CHINA REGION FUND - CLASS C

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 23602298
<INVESTMENTS-AT-VALUE> 25108142
<RECEIVABLES> 1151539
<ASSETS-OTHER> 6600
<OTHER-ITEMS-ASSETS> 105176
<TOTAL-ASSETS> 26371457
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1637916
<TOTAL-LIABILITIES> 1637916
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 24826143
<SHARES-COMMON-STOCK> 43873
<SHARES-COMMON-PRIOR> 1
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1598521)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1505919
<NET-ASSETS> 24733541
<DIVIDEND-INCOME> 582858
<INTEREST-INCOME> 6056
<OTHER-INCOME> 0
<EXPENSES-NET> 578429
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> (1001126)
<APPREC-INCREASE-CURRENT> 5263221
<NET-CHANGE-FROM-OPS> 4272580
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 3703
<NUMBER-OF-SHARES-SOLD> 50214
<NUMBER-OF-SHARES-REDEEMED> 6665
<SHARES-REINVESTED> 324
<NET-CHANGE-IN-ASSETS> 4973373
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (304802)
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 233804
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 644104
<AVERAGE-NET-ASSETS> 23374470
<PER-SHARE-NAV-BEGIN> 9.44
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> .89
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> .09
<PER-SHARE-NAV-END> 10.24
<EXPENSE-RATIO> 2.71
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 051
<NAME> IVY EMERGING GROWTH FUND - CLASS A

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 77744774
<INVESTMENTS-AT-VALUE> 91942665
<RECEIVABLES> 275656
<ASSETS-OTHER> 11968
<OTHER-ITEMS-ASSETS> 3576671
<TOTAL-ASSETS> 95806960
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 524505
<TOTAL-LIABILITIES> 524505
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 81084564
<SHARES-COMMON-STOCK> 2107267
<SHARES-COMMON-PRIOR> 2230994
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14197891
<NET-ASSETS> 95282455
<DIVIDEND-INCOME> 17415
<INTEREST-INCOME> 326958
<OTHER-INCOME> 0
<EXPENSES-NET> 1548990
<NET-INVESTMENT-INCOME> (1204617)
<REALIZED-GAINS-CURRENT> 6984138
<APPREC-INCREASE-CURRENT> 3324364
<NET-CHANGE-FROM-OPS> 9103885
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 4081929
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1862227
<NUMBER-OF-SHARES-REDEEMED> 1533721
<SHARES-REINVESTED> 143930
<NET-CHANGE-IN-ASSETS> 41841410
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 415
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 657579
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1548990
<AVERAGE-NET-ASSETS> 77356786
<PER-SHARE-NAV-BEGIN> 24.12
<PER-SHARE-NII> (.35)
<PER-SHARE-GAIN-APPREC> 4.84
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 2.07
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 26.54
<EXPENSE-RATIO> 1.76
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 052
<NAME> IVY EMERGING GROWTH FUND - CLASS B

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 77744774
<INVESTMENTS-AT-VALUE> 91942665
<RECEIVABLES> 275656
<ASSETS-OTHER> 11968
<OTHER-ITEMS-ASSETS> 3576671
<TOTAL-ASSETS> 95806960
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 524505
<TOTAL-LIABILITIES> 524505
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 81084564
<SHARES-COMMON-STOCK> 1341255
<SHARES-COMMON-PRIOR> 884809
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14197891
<NET-ASSETS> 95282455
<DIVIDEND-INCOME> 17415
<INTEREST-INCOME> 326958
<OTHER-INCOME> 0
<EXPENSES-NET> 1548990
<NET-INVESTMENT-INCOME> (1204617)
<REALIZED-GAINS-CURRENT> 6984138
<APPREC-INCREASE-CURRENT> 3324364
<NET-CHANGE-FROM-OPS> 9103885
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 2600466
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1132341
<NUMBER-OF-SHARES-REDEEMED> 458058
<SHARES-REINVESTED> 87254
<NET-CHANGE-IN-ASSETS> 41841410
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 415
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 657579
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1548990
<AVERAGE-NET-ASSETS> 77356786
<PER-SHARE-NAV-BEGIN> 24.12
<PER-SHARE-NII> (.40)
<PER-SHARE-GAIN-APPREC> 4.68
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 2.07
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 26.33
<EXPENSE-RATIO> 2.52
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 053
<NAME> IVY EMERGING GROWTH FUND - CLASS C

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 77744774
<INVESTMENTS-AT-VALUE> 91942665
<RECEIVABLES> 275656
<ASSETS-OTHER> 11968
<OTHER-ITEMS-ASSETS> 3576671
<TOTAL-ASSETS> 95806960
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 524505
<TOTAL-LIABILITIES> 524505
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 81084564
<SHARES-COMMON-STOCK> 152842
<SHARES-COMMON-PRIOR> 19557
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14197891
<NET-ASSETS> 95282455
<DIVIDEND-INCOME> 17415
<INTEREST-INCOME> 326958
<OTHER-INCOME> 0
<EXPENSES-NET> 1548990
<NET-INVESTMENT-INCOME> (1204617)
<REALIZED-GAINS-CURRENT> 6984138
<APPREC-INCREASE-CURRENT> 3324364
<NET-CHANGE-FROM-OPS> 9103885
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 300431
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 156680
<NUMBER-OF-SHARES-REDEEMED> 10721
<SHARES-REINVESTED> 6883
<NET-CHANGE-IN-ASSETS> 41841410
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 415
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 657579
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1548990
<AVERAGE-NET-ASSETS> 77356786
<PER-SHARE-NAV-BEGIN> 29.69
<PER-SHARE-NII> (.14)
<PER-SHARE-GAIN-APPREC> (1.19)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 2.07
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 26.29
<EXPENSE-RATIO> 2.52
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 111
<NAME> IVY GLOBAL FUND - CLASS A

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 25195196
<INVESTMENTS-AT-VALUE> 30728270
<RECEIVABLES> 147896
<ASSETS-OTHER> 7288
<OTHER-ITEMS-ASSETS> 2402590
<TOTAL-ASSETS> 33286044
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 94487
<TOTAL-LIABILITIES> 94487
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 28433902
<SHARES-COMMON-STOCK> 1834549
<SHARES-COMMON-PRIOR> 1847061
<ACCUMULATED-NII-CURRENT> 23685
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14462
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4719508
<NET-ASSETS> 33191557
<DIVIDEND-INCOME> 780034
<INTEREST-INCOME> 53390
<OTHER-INCOME> 0
<EXPENSES-NET> 706256
<NET-INVESTMENT-INCOME> 127168
<REALIZED-GAINS-CURRENT> 1561256
<APPREC-INCREASE-CURRENT> 2632078
<NET-CHANGE-FROM-OPS> 4320502
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 138320
<DISTRIBUTIONS-OF-GAINS> 832444
<DISTRIBUTIONS-OTHER> 317957
<NUMBER-OF-SHARES-SOLD> 486908
<NUMBER-OF-SHARES-REDEEMED> 525829
<SHARES-REINVESTED> 96662
<NET-CHANGE-IN-ASSETS> 7116349
<ACCUMULATED-NII-PRIOR> 53270
<ACCUMULATED-GAINS-PRIOR> 13394
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 301433
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 706256
<AVERAGE-NET-ASSETS> 30140810
<PER-SHARE-NAV-BEGIN> 11.97
<PER-SHARE-NII> .08
<PER-SHARE-GAIN-APPREC> 1.86
<PER-SHARE-DIVIDEND> .08
<PER-SHARE-DISTRIBUTIONS> .48
<RETURNS-OF-CAPITAL> .18
<PER-SHARE-NAV-END> 13.17
<EXPENSE-RATIO> 2.18
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 112
<NAME> IVY GLOBAL FUND - CLASS B

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 25195196
<INVESTMENTS-AT-VALUE> 30728270
<RECEIVABLES> 147896
<ASSETS-OTHER> 7288
<OTHER-ITEMS-ASSETS> 2402590
<TOTAL-ASSETS> 33286044
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 94487
<TOTAL-LIABILITIES> 94487
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 28433902
<SHARES-COMMON-STOCK> 683398
<SHARES-COMMON-PRIOR> 481683
<ACCUMULATED-NII-CURRENT> 23685
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14462
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4719508
<NET-ASSETS> 33191557
<DIVIDEND-INCOME> 780034
<INTEREST-INCOME> 53390
<OTHER-INCOME> 0
<EXPENSES-NET> 706256
<NET-INVESTMENT-INCOME> 127168
<REALIZED-GAINS-CURRENT> 1561256
<APPREC-INCREASE-CURRENT> 2632078
<NET-CHANGE-FROM-OPS> 4320502
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 310417
<DISTRIBUTIONS-OTHER> 131831
<NUMBER-OF-SHARES-SOLD> 350672
<NUMBER-OF-SHARES-REDEEMED> 99033
<SHARES-REINVESTED> 29736
<NET-CHANGE-IN-ASSETS> 7116349
<ACCUMULATED-NII-PRIOR> 53270
<ACCUMULATED-GAINS-PRIOR> 13394
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 301433
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 706256
<AVERAGE-NET-ASSETS> 30140810
<PER-SHARE-NAV-BEGIN> 11.97
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> 1.85
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .48
<RETURNS-OF-CAPITAL> .20
<PER-SHARE-NAV-END> 13.12
<EXPENSE-RATIO> 2.94
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 113
<NAME> IVY GLOBAL FUND - CLASS C

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 25195196
<INVESTMENTS-AT-VALUE> 30728270
<RECEIVABLES> 147896
<ASSETS-OTHER> 7288
<OTHER-ITEMS-ASSETS> 2402590
<TOTAL-ASSETS> 33286044
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 94487
<TOTAL-LIABILITIES> 94487
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 28433902
<SHARES-COMMON-STOCK> 5485
<SHARES-COMMON-PRIOR> 1
<ACCUMULATED-NII-CURRENT> 23685
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14462
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4719508
<NET-ASSETS> 33191557
<DIVIDEND-INCOME> 780034
<INTEREST-INCOME> 53390
<OTHER-INCOME> 0
<EXPENSES-NET> 706256
<NET-INVESTMENT-INCOME> 127168
<REALIZED-GAINS-CURRENT> 1561256
<APPREC-INCREASE-CURRENT> 2632078
<NET-CHANGE-FROM-OPS> 4320502
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 1888
<DISTRIBUTIONS-OTHER> 1191
<NUMBER-OF-SHARES-SOLD> 5866
<NUMBER-OF-SHARES-REDEEMED> 600
<SHARES-REINVESTED> 219
<NET-CHANGE-IN-ASSETS> 7116349
<ACCUMULATED-NII-PRIOR> 53270
<ACCUMULATED-GAINS-PRIOR> 13394
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 301433
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 706256
<AVERAGE-NET-ASSETS> 30140810
<PER-SHARE-NAV-BEGIN> 13.31
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> .42
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .48
<RETURNS-OF-CAPITAL> .30
<PER-SHARE-NAV-END> 12.94
<EXPENSE-RATIO> 3.77
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 021
<NAME> IVY GROWTH W/INCOME FUND - CLASS A

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 62277083
<INVESTMENTS-AT-VALUE> 74242463
<RECEIVABLES> 183865
<ASSETS-OTHER> 55848
<OTHER-ITEMS-ASSETS> 3596320
<TOTAL-ASSETS> 78078496
<PAYABLE-FOR-SECURITIES> 374531
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 162591
<TOTAL-LIABILITIES> 537122
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 72807907
<SHARES-COMMON-STOCK> 5556826
<SHARES-COMMON-PRIOR> 5245009
<ACCUMULATED-NII-CURRENT> 48589
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (7258212)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 11943090
<NET-ASSETS> 77541374
<DIVIDEND-INCOME> 1437214
<INTEREST-INCOME> 404471
<OTHER-INCOME> 0
<EXPENSES-NET> 1431854
<NET-INVESTMENT-INCOME> 409831
<REALIZED-GAINS-CURRENT> 12451208
<APPREC-INCREASE-CURRENT> 907608
<NET-CHANGE-FROM-OPS> 13768647
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 409831
<DISTRIBUTIONS-OF-GAINS> 8490622
<DISTRIBUTIONS-OTHER> 170374
<NUMBER-OF-SHARES-SOLD> 771160
<NUMBER-OF-SHARES-REDEEMED> 1266282
<SHARES-REINVESTED> 673234
<NET-CHANGE-IN-ASSETS> 8376867
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (9063172)
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 629322
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1431854
<AVERAGE-NET-ASSETS> 74024343
<PER-SHARE-NAV-BEGIN> 10.98
<PER-SHARE-NII> .08
<PER-SHARE-GAIN-APPREC> 2.16
<PER-SHARE-DIVIDEND> .08
<PER-SHARE-DISTRIBUTIONS> 1.73
<RETURNS-OF-CAPITAL> .03
<PER-SHARE-NAV-END> 11.38
<EXPENSE-RATIO> 1.81
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 022
<NAME> IVY GROWTH W/INCOME FUND - CLASS B

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 62277083
<INVESTMENTS-AT-VALUE> 74242463
<RECEIVABLES> 183865
<ASSETS-OTHER> 55848
<OTHER-ITEMS-ASSETS> 3596320
<TOTAL-ASSETS> 78078496
<PAYABLE-FOR-SECURITIES> 374531
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 162591
<TOTAL-LIABILITIES> 537122
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 72807907
<SHARES-COMMON-STOCK> 1185838
<SHARES-COMMON-PRIOR> 1008449
<ACCUMULATED-NII-CURRENT> 48589
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (7258212)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 11943090
<NET-ASSETS> 77541374
<DIVIDEND-INCOME> 1437214
<INTEREST-INCOME> 404471
<OTHER-INCOME> 0
<EXPENSES-NET> 1431854
<NET-INVESTMENT-INCOME> 409831
<REALIZED-GAINS-CURRENT> 12451208
<APPREC-INCREASE-CURRENT> 907608
<NET-CHANGE-FROM-OPS> 13768647
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 1738301
<DISTRIBUTIONS-OTHER> 84427
<NUMBER-OF-SHARES-SOLD> 554493
<NUMBER-OF-SHARES-REDEEMED> 337018
<SHARES-REINVESTED> 160600
<NET-CHANGE-IN-ASSETS> 8376867
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (9063172)
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 629322
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1431854
<AVERAGE-NET-ASSETS> 74024343
<PER-SHARE-NAV-BEGIN> 10.98
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> 2.15
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.68
<RETURNS-OF-CAPITAL> .08
<PER-SHARE-NAV-END> 11.36
<EXPENSE-RATIO> 2.55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 024
<NAME> IVY GROWTH W/INCOME FUND - CLASS C

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 62277083
<INVESTMENTS-AT-VALUE> 74242463
<RECEIVABLES> 183865
<ASSETS-OTHER> 55848
<OTHER-ITEMS-ASSETS> 3596320
<TOTAL-ASSETS> 78078496
<PAYABLE-FOR-SECURITIES> 374531
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 162591
<TOTAL-LIABILITIES> 537122
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 72807907
<SHARES-COMMON-STOCK> 2491
<SHARES-COMMON-PRIOR> 1
<ACCUMULATED-NII-CURRENT> 48589
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (7258212)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 11943090
<NET-ASSETS> 77541374
<DIVIDEND-INCOME> 1437214
<INTEREST-INCOME> 404471
<OTHER-INCOME> 0
<EXPENSES-NET> 1431854
<NET-INVESTMENT-INCOME> 409831
<REALIZED-GAINS-CURRENT> 12451208
<APPREC-INCREASE-CURRENT> 907608
<NET-CHANGE-FROM-OPS> 13768647
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 3730
<DISTRIBUTIONS-OTHER> 39
<NUMBER-OF-SHARES-SOLD> 3952
<NUMBER-OF-SHARES-REDEEMED> 1796
<SHARES-REINVESTED> 335
<NET-CHANGE-IN-ASSETS> 8376867
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (9063172)
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 629322
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1431854
<AVERAGE-NET-ASSETS> 74024343
<PER-SHARE-NAV-BEGIN> 11.73
<PER-SHARE-NII> (.08)
<PER-SHARE-GAIN-APPREC> 1.53
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.73
<RETURNS-OF-CAPITAL> .08
<PER-SHARE-NAV-END> 11.37
<EXPENSE-RATIO> 3.02
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 023
<NAME> IVY GROWTH W/INCOME FUND - CLASS D

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 62277083
<INVESTMENTS-AT-VALUE> 74242463
<RECEIVABLES> 183865
<ASSETS-OTHER> 55848
<OTHER-ITEMS-ASSETS> 3596320
<TOTAL-ASSETS> 78078496
<PAYABLE-FOR-SECURITIES> 374531
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 162591
<TOTAL-LIABILITIES> 537122
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 72807907
<SHARES-COMMON-STOCK> 72047
<SHARES-COMMON-PRIOR> 64119
<ACCUMULATED-NII-CURRENT> 48589
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (7258212)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 11943090
<NET-ASSETS> 77541374
<DIVIDEND-INCOME> 1437214
<INTEREST-INCOME> 404471
<OTHER-INCOME> 0
<EXPENSES-NET> 1431854
<NET-INVESTMENT-INCOME> 409831
<REALIZED-GAINS-CURRENT> 12451208
<APPREC-INCREASE-CURRENT> 907608
<NET-CHANGE-FROM-OPS> 13768647
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 103094
<DISTRIBUTIONS-OTHER> 7039
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 50213
<SHARES-REINVESTED> 9114
<NET-CHANGE-IN-ASSETS> 8376867
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (9063172)
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 629322
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1431854
<AVERAGE-NET-ASSETS> 74024343
<PER-SHARE-NAV-BEGIN> 10.98
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> 2.14
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.63
<RETURNS-OF-CAPITAL> .08
<PER-SHARE-NAV-END> 11.39
<EXPENSE-RATIO> 2.63
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 011
<NAME> IVY GROWTH FUND - CLASS A

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 242684177
<INVESTMENTS-AT-VALUE> 312268502
<RECEIVABLES> 361496
<ASSETS-OTHER> 66839
<OTHER-ITEMS-ASSETS> 8400721
<TOTAL-ASSETS> 321097558
<PAYABLE-FOR-SECURITIES> 975921
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1274206
<TOTAL-LIABILITIES> 2250127
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 248919219
<SHARES-COMMON-STOCK> 17730592
<SHARES-COMMON-PRIOR> 17310761
<ACCUMULATED-NII-CURRENT> 50714
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 421731
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 69455767
<NET-ASSETS> 318847431
<DIVIDEND-INCOME> 4027582
<INTEREST-INCOME> 820474
<OTHER-INCOME> 0
<EXPENSES-NET> 4485154
<NET-INVESTMENT-INCOME> 362902
<REALIZED-GAINS-CURRENT> 30664481
<APPREC-INCREASE-CURRENT> 17997449
<NET-CHANGE-FROM-OPS> 49024832
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 389158
<DISTRIBUTIONS-OF-GAINS> 28336336
<DISTRIBUTIONS-OTHER> 1722867
<NUMBER-OF-SHARES-SOLD> 1496693
<NUMBER-OF-SHARES-REDEEMED> 2657170
<SHARES-REINVESTED> 1580308
<NET-CHANGE-IN-ASSETS> 26224015
<ACCUMULATED-NII-PRIOR> 25339
<ACCUMULATED-GAINS-PRIOR> (114013)
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2608378
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4497640
<AVERAGE-NET-ASSETS> 306854599
<PER-SHARE-NAV-BEGIN> 16.75
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> 2.86
<PER-SHARE-DIVIDEND> .02
<PER-SHARE-DISTRIBUTIONS> 1.74
<RETURNS-OF-CAPITAL> .11
<PER-SHARE-NAV-END> 1.87
<EXPENSE-RATIO> 1.45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 012
<NAME> IVY GROWTH FUND - CLASS B

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 242684177
<INVESTMENTS-AT-VALUE> 312268502
<RECEIVABLES> 361496
<ASSETS-OTHER> 66839
<OTHER-ITEMS-ASSETS> 8400721
<TOTAL-ASSETS> 321097558
<PAYABLE-FOR-SECURITIES> 975921
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1274206
<TOTAL-LIABILITIES> 2250127
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 248919219
<SHARES-COMMON-STOCK> 217627
<SHARES-COMMON-PRIOR> 159356
<ACCUMULATED-NII-CURRENT> 50714
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 421731
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 69455767
<NET-ASSETS> 318847431
<DIVIDEND-INCOME> 4027582
<INTEREST-INCOME> 820474
<OTHER-INCOME> 0
<EXPENSES-NET> 4485154
<NET-INVESTMENT-INCOME> 362902
<REALIZED-GAINS-CURRENT> 30664481
<APPREC-INCREASE-CURRENT> 17997449
<NET-CHANGE-FROM-OPS> 49024832
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 346890
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 103139
<NUMBER-OF-SHARES-REDEEMED> 63589
<SHARES-REINVESTED> 18721
<NET-CHANGE-IN-ASSETS> 26224015
<ACCUMULATED-NII-PRIOR> 25339
<ACCUMULATED-GAINS-PRIOR> (114013)
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2608378
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4497640
<AVERAGE-NET-ASSETS> 306854599
<PER-SHARE-NAV-BEGIN> 16.75
<PER-SHARE-NII> (.13)
<PER-SHARE-GAIN-APPREC> 2.81
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.74
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.69
<EXPENSE-RATIO> 2.37
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 013
<NAME> IVY GROWTH FUND - CLASS C

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 242684177
<INVESTMENTS-AT-VALUE> 312268502
<RECEIVABLES> 361496
<ASSETS-OTHER> 66839
<OTHER-ITEMS-ASSETS> 8400721
<TOTAL-ASSETS> 321097558
<PAYABLE-FOR-SECURITIES> 975921
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1274206
<TOTAL-LIABILITIES> 2250127
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 248919219
<SHARES-COMMON-STOCK> 5124
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 50714
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 421731
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 69455767
<NET-ASSETS> 318847431
<DIVIDEND-INCOME> 4027582
<INTEREST-INCOME> 820474
<OTHER-INCOME> 0
<EXPENSES-NET> 4485154
<NET-INVESTMENT-INCOME> 362902
<REALIZED-GAINS-CURRENT> 30664481
<APPREC-INCREASE-CURRENT> 17997449
<NET-CHANGE-FROM-OPS> 49024832
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 8094
<DISTRIBUTIONS-OTHER> 395
<NUMBER-OF-SHARES-SOLD> 5921
<NUMBER-OF-SHARES-REDEEMED> 1279
<SHARES-REINVESTED> 482
<NET-CHANGE-IN-ASSETS> 26224015
<ACCUMULATED-NII-PRIOR> 25339
<ACCUMULATED-GAINS-PRIOR> (114013)
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2608378
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4497640
<AVERAGE-NET-ASSETS> 306854599
<PER-SHARE-NAV-BEGIN> 18.46
<PER-SHARE-NII> (.06)
<PER-SHARE-GAIN-APPREC> 1.02
<PER-SHARE-DIVIDEND> .09
<PER-SHARE-DISTRIBUTIONS> 1.74
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.59
<EXPENSE-RATIO> 2.44
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 141
<NAME> IVY GLOBAL SC & TECH FUND - CLASS A

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-22-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 10533391
<INVESTMENTS-AT-VALUE> 11541498
<RECEIVABLES> 149399
<ASSETS-OTHER> 828
<OTHER-ITEMS-ASSETS> 2254488
<TOTAL-ASSETS> 13946213
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 91125
<TOTAL-LIABILITIES> 91125
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12860136
<SHARES-COMMON-STOCK> 507461
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (13155)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1008107
<NET-ASSETS> 13855088
<DIVIDEND-INCOME> 140
<INTEREST-INCOME> 61
<OTHER-INCOME> 0
<EXPENSES-NET> 51068
<NET-INVESTMENT-INCOME> (50867)
<REALIZED-GAINS-CURRENT> 61918
<APPREC-INCREASE-CURRENT> 1008107
<NET-CHANGE-FROM-OPS> 1009158
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 17214
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 513259
<NUMBER-OF-SHARES-REDEEMED> 6793
<SHARES-REINVESTED> 995
<NET-CHANGE-IN-ASSETS> 13855088
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 20965
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 65881
<AVERAGE-NET-ASSETS> 4765940
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.06)
<PER-SHARE-GAIN-APPREC> 6.49
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .03
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.40
<EXPENSE-RATIO> 2.19
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 142
<NAME> IVY GLOBAL SC & TECH FUND - CLASS B

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-22-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 10533391
<INVESTMENTS-AT-VALUE> 11541498
<RECEIVABLES> 149399
<ASSETS-OTHER> 828
<OTHER-ITEMS-ASSETS> 2254488
<TOTAL-ASSETS> 13946213
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 91125
<TOTAL-LIABILITIES> 91125
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12860136
<SHARES-COMMON-STOCK> 208309
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (13155)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1008107
<NET-ASSETS> 13855088
<DIVIDEND-INCOME> 140
<INTEREST-INCOME> 61
<OTHER-INCOME> 0
<EXPENSES-NET> 51068
<NET-INVESTMENT-INCOME> (50867)
<REALIZED-GAINS-CURRENT> 61918
<APPREC-INCREASE-CURRENT> 1008107
<NET-CHANGE-FROM-OPS> 1009158
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 3926
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 228288
<NUMBER-OF-SHARES-REDEEMED> 20207
<SHARES-REINVESTED> 228
<NET-CHANGE-IN-ASSETS> 13855088
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 20965
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 65881
<AVERAGE-NET-ASSETS> 4765940
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.06)
<PER-SHARE-GAIN-APPREC> 6.52
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .02
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.44
<EXPENSE-RATIO> 2.99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 143
<NAME> IVY GLOBAL SC & TECH FUND - CLASS C

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-22-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 10533391
<INVESTMENTS-AT-VALUE> 11541498
<RECEIVABLES> 149399
<ASSETS-OTHER> 828
<OTHER-ITEMS-ASSETS> 2254488
<TOTAL-ASSETS> 13946213
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 91125
<TOTAL-LIABILITIES> 91125
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12860136
<SHARES-COMMON-STOCK> 127942
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (13155)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1008107
<NET-ASSETS> 13855088
<DIVIDEND-INCOME> 140
<INTEREST-INCOME> 61
<OTHER-INCOME> 0
<EXPENSES-NET> 51068
<NET-INVESTMENT-INCOME> (50867)
<REALIZED-GAINS-CURRENT> 61918
<APPREC-INCREASE-CURRENT> 1008107
<NET-CHANGE-FROM-OPS> 1009158
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 3066
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 128623
<NUMBER-OF-SHARES-REDEEMED> 859
<SHARES-REINVESTED> 178
<NET-CHANGE-IN-ASSETS> 13855088
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 20965
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 65881
<AVERAGE-NET-ASSETS> 4765940
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.05)
<PER-SHARE-GAIN-APPREC> 6.53
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .02
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.46
<EXPENSE-RATIO> 2.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 031
<NAME> IVY INTERNATIONAL FUND - CLASS A

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 1161119066
<INVESTMENTS-AT-VALUE> 1395222702
<RECEIVABLES> 8794182
<ASSETS-OTHER> 68451
<OTHER-ITEMS-ASSETS> 12406410
<TOTAL-ASSETS> 1416491745
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<PAID-IN-CAPITAL-COMMON> 1165072805
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<SHARES-COMMON-PRIOR> 20332247
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<ACCUM-APPREC-OR-DEPREC> 234137144
<NET-ASSETS> 1399209949
<DIVIDEND-INCOME> 16485734
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<REALIZED-GAINS-CURRENT> 25065630
<APPREC-INCREASE-CURRENT> 140672710
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<DISTRIBUTIONS-OF-INCOME> 4882162
<DISTRIBUTIONS-OF-GAINS> 17087565
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<NUMBER-OF-SHARES-SOLD> 16070230
<NUMBER-OF-SHARES-REDEEMED> 4561167
<SHARES-REINVESTED> 534854
<NET-CHANGE-IN-ASSETS> 835550329
<ACCUMULATED-NII-PRIOR> 5823
<ACCUMULATED-GAINS-PRIOR> (41822)
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 9157858
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<GROSS-EXPENSE> 16410188
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<PER-SHARE-NAV-BEGIN> 30.67
<PER-SHARE-NII> .20
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<PER-SHARE-NAV-END> 35.89
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 032
<NAME> IVY INTERNATIONAL FUND - CLASS B

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 1161119066
<INVESTMENTS-AT-VALUE> 1395222702
<RECEIVABLES> 8794182
<ASSETS-OTHER> 68451
<OTHER-ITEMS-ASSETS> 12406410
<TOTAL-ASSETS> 1416491745
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 17281796
<TOTAL-LIABILITIES> 17281796
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<PAID-IN-CAPITAL-COMMON> 1165072805
<SHARES-COMMON-STOCK> 8736831
<SHARES-COMMON-PRIOR> 4916411
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 234137144
<NET-ASSETS> 1399209949
<DIVIDEND-INCOME> 16485734
<INTEREST-INCOME> 5582845
<OTHER-INCOME> 0
<EXPENSES-NET> 16410188
<NET-INVESTMENT-INCOME> 5658391
<REALIZED-GAINS-CURRENT> 25065630
<APPREC-INCREASE-CURRENT> 140672710
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<DISTRIBUTIONS-OF-GAINS> 5538963
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<NUMBER-OF-SHARES-SOLD> 6659639
<NUMBER-OF-SHARES-REDEEMED> 448268
<SHARES-REINVESTED> 91688
<NET-CHANGE-IN-ASSETS> 835550329
<ACCUMULATED-NII-PRIOR> 5823
<ACCUMULATED-GAINS-PRIOR> (41822)
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
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<GROSS-EXPENSE> 16410188
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<PER-SHARE-NAV-BEGIN> 30.67
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<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .64
<RETURNS-OF-CAPITAL> .05
<PER-SHARE-NAV-END> 35.73
<EXPENSE-RATIO> 2.45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 034
<NAME> IVY INTERNATIONAL FUND - CLASS C

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 1161119066
<INVESTMENTS-AT-VALUE> 1395222702
<RECEIVABLES> 8794182
<ASSETS-OTHER> 68451
<OTHER-ITEMS-ASSETS> 12406410
<TOTAL-ASSETS> 1416491745
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 17281796
<TOTAL-LIABILITIES> 17281796
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1165072805
<SHARES-COMMON-STOCK> 1249468
<SHARES-COMMON-PRIOR> 105661
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 234137144
<NET-ASSETS> 1399209949
<DIVIDEND-INCOME> 16485734
<INTEREST-INCOME> 5582845
<OTHER-INCOME> 0
<EXPENSES-NET> 16410188
<NET-INVESTMENT-INCOME> 5658391
<REALIZED-GAINS-CURRENT> 25065630
<APPREC-INCREASE-CURRENT> 140672710
<NET-CHANGE-FROM-OPS> 171396731
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 791253
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<NUMBER-OF-SHARES-SOLD> 1260097
<NUMBER-OF-SHARES-REDEEMED> 20325
<SHARES-REINVESTED> 9696
<NET-CHANGE-IN-ASSETS> 835550329
<ACCUMULATED-NII-PRIOR> 5823
<ACCUMULATED-GAINS-PRIOR> (41822)
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
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<PER-SHARE-NAV-BEGIN> 32.68
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<PER-SHARE-DISTRIBUTIONS> .64
<RETURNS-OF-CAPITAL> .20
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<EXPENSE-RATIO> 2.44
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 033
<NAME> IVY INTERNATIONAL FUND - CLASS I

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 1161119066
<INVESTMENTS-AT-VALUE> 1395222702
<RECEIVABLES> 8794182
<ASSETS-OTHER> 68451
<OTHER-ITEMS-ASSETS> 12406410
<TOTAL-ASSETS> 1416491745
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 17281796
<TOTAL-LIABILITIES> 17281796
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1165072805
<SHARES-COMMON-STOCK> 1486226
<SHARES-COMMON-PRIOR> 957815
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 234137144
<NET-ASSETS> 1399209949
<DIVIDEND-INCOME> 16485734
<INTEREST-INCOME> 5582845
<OTHER-INCOME> 0
<EXPENSES-NET> 16410188
<NET-INVESTMENT-INCOME> 5658391
<REALIZED-GAINS-CURRENT> 25065630
<APPREC-INCREASE-CURRENT> 140672710
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<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 395163
<DISTRIBUTIONS-OF-GAINS> 932968
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<NUMBER-OF-SHARES-SOLD> 1105814
<NUMBER-OF-SHARES-REDEEMED> 79940
<SHARES-REINVESTED> 35847
<NET-CHANGE-IN-ASSETS> 835550329
<ACCUMULATED-NII-PRIOR> 5823
<ACCUMULATED-GAINS-PRIOR> (41822)
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
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<PER-SHARE-NAV-BEGIN> 30.67
<PER-SHARE-NII> .27
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<PER-SHARE-DIVIDEND> .27
<PER-SHARE-DISTRIBUTIONS> .64
<RETURNS-OF-CAPITAL> .02
<PER-SHARE-NAV-END> 35.89
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 071
<NAME> IVY L/A STRATEGY FUND - CLASS A

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 5482463
<INVESTMENTS-AT-VALUE> 5972044
<RECEIVABLES> 23621
<ASSETS-OTHER> 4301
<OTHER-ITEMS-ASSETS> 180624
<TOTAL-ASSETS> 6180590
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 28821
<TOTAL-LIABILITIES> 28821
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5662800
<SHARES-COMMON-STOCK> 471791
<SHARES-COMMON-PRIOR> 292626
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (578)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 489547
<NET-ASSETS> 6151769
<DIVIDEND-INCOME> 102477
<INTEREST-INCOME> 800
<OTHER-INCOME> 0
<EXPENSES-NET> 103764
<NET-INVESTMENT-INCOME> (487)
<REALIZED-GAINS-CURRENT> 58873
<APPREC-INCREASE-CURRENT> 660305
<NET-CHANGE-FROM-OPS> 718691
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 17179
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 321787
<NUMBER-OF-SHARES-REDEEMED> 144190
<SHARES-REINVESTED> 1568
<NET-CHANGE-IN-ASSETS> 3453126
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (41578)
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 42550
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 218561
<AVERAGE-NET-ASSETS> 4254727
<PER-SHARE-NAV-BEGIN> 6.88
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> 1.66
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .04
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.51
<EXPENSE-RATIO> 2.19
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 072
<NAME> IVY L/A STRATEGY FUND - CLASS B

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 5482463
<INVESTMENTS-AT-VALUE> 5972044
<RECEIVABLES> 23621
<ASSETS-OTHER> 4301
<OTHER-ITEMS-ASSETS> 180624
<TOTAL-ASSETS> 6180590
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 28821
<TOTAL-LIABILITIES> 28821
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5662800
<SHARES-COMMON-STOCK> 238781
<SHARES-COMMON-PRIOR> 99356
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (578)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 489547
<NET-ASSETS> 6151769
<DIVIDEND-INCOME> 102477
<INTEREST-INCOME> 800
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<EXPENSES-NET> 103764
<NET-INVESTMENT-INCOME> (487)
<REALIZED-GAINS-CURRENT> 58873
<APPREC-INCREASE-CURRENT> 660305
<NET-CHANGE-FROM-OPS> 718691
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
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<NUMBER-OF-SHARES-SOLD> 164935
<NUMBER-OF-SHARES-REDEEMED> 25510
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3453126
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (41578)
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 42550
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 218561
<AVERAGE-NET-ASSETS> 4254727
<PER-SHARE-NAV-BEGIN> 6.88
<PER-SHARE-NII> (.03)
<PER-SHARE-GAIN-APPREC> 1.63
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.48
<EXPENSE-RATIO> 2.97
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 073
<NAME> IVY L/A STRATEGY FUND - CLASS C

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 5482463
<INVESTMENTS-AT-VALUE> 5972044
<RECEIVABLES> 23621
<ASSETS-OTHER> 4301
<OTHER-ITEMS-ASSETS> 180624
<TOTAL-ASSETS> 6180590
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 28821
<TOTAL-LIABILITIES> 28821
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5662800
<SHARES-COMMON-STOCK> 13169
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (578)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 489547
<NET-ASSETS> 6151769
<DIVIDEND-INCOME> 102477
<INTEREST-INCOME> 800
<OTHER-INCOME> 0
<EXPENSES-NET> 103764
<NET-INVESTMENT-INCOME> (487)
<REALIZED-GAINS-CURRENT> 58873
<APPREC-INCREASE-CURRENT> 660305
<NET-CHANGE-FROM-OPS> 718691
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 370
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 13400
<NUMBER-OF-SHARES-REDEEMED> 236
<SHARES-REINVESTED> 5
<NET-CHANGE-IN-ASSETS> 3453126
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (41578)
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 42550
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 218561
<AVERAGE-NET-ASSETS> 4254727
<PER-SHARE-NAV-BEGIN> 7.96
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> .55
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .03
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.46
<EXPENSE-RATIO> 3.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 041
<NAME> IVY MONEY MARKET FUND - CLASS A

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 22358009
<INVESTMENTS-AT-VALUE> 22358009
<RECEIVABLES> 26555
<ASSETS-OTHER> 4956
<OTHER-ITEMS-ASSETS> 2549845
<TOTAL-ASSETS> 24939365
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 32314
<TOTAL-LIABILITIES> 32314
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 24907051
<SHARES-COMMON-STOCK> 21359067
<SHARES-COMMON-PRIOR> 24608762
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 24907051
<DIVIDEND-INCOME> 1065070
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 170083
<NET-INVESTMENT-INCOME> 894987
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 894987
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 794505
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 67870418
<NUMBER-OF-SHARES-REDEEMED> 71802776
<SHARES-REINVESTED> 682663
<NET-CHANGE-IN-ASSETS> 298289
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 80302
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 369629
<AVERAGE-NET-ASSETS> 19961951
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .04
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .86
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 042
<NAME> IVY MONEY MARKET FUND - CLASS B

<MULTIPLIER> 1000
<CURRENCY> US

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 22358009
<INVESTMENTS-AT-VALUE> 22358009
<RECEIVABLES> 26555
<ASSETS-OTHER> 4956
<OTHER-ITEMS-ASSETS> 2549845
<TOTAL-ASSETS> 24939365
<PAYABLE-FOR-SECURITIES> 0
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<OTHER-ITEMS-LIABILITIES> 32314
<TOTAL-LIABILITIES> 32314
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 24907051
<SHARES-COMMON-STOCK> 3474373
<SHARES-COMMON-PRIOR> 0
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<OVERDISTRIBUTION-NII> 0
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<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 24907051
<DIVIDEND-INCOME> 1065070
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<OTHER-INCOME> 0
<EXPENSES-NET> 170083
<NET-INVESTMENT-INCOME> 894987
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<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 894987
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 95901
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 24768901
<NUMBER-OF-SHARES-REDEEMED> 21362866
<SHARES-REINVESTED> 68338
<NET-CHANGE-IN-ASSETS> 298289
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<OVERDISTRIB-NII-PRIOR> 0

<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 80302
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 369629
<AVERAGE-NET-ASSETS> 19961951
<PER-SHARE-NAV-BEGIN> 1.00
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</TABLE>

<PAGE>
<ARTICLE> 6
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<NAME> IVY MONEY MARKET FUND - CLASS C

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<S> <C>
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