IVY FUND, 485BPOS, 1997-10-28

IVY FUND
485BPOS, 1997-10-28

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As filed with the Securities and Exchange Commission on
October 28, 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. 95 [ 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 Post-Effective Amendment
become effective on October 31, 1997 pursuant to
subparagraph (b) of Rule 485.

THIS POST-EFFECTIVE AMENDMENT NO. 95 IS BEING FILED SOLELY IN
ORDER TO (i) COMPLY WITH THE REGISTRANT'S UNDERTAKING TO FILE AN
AMENDMENT CONTAINING UNAUDITED FINANCIAL STATEMENTS OF ITS IVY
INTERNATIONAL FUND II AND IVY PAN-EUROPE FUND, WITHIN FOUR TO SIX
MONTHS AFTER THE EFFECTIVE DATE OF POST-EFFECTIVE AMENDMENT NO.
94 TO REGISTRANT'S REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933 AND (ii) MAKE CERTAIN OTHER NON-MATERIAL CHANGES AS
THE REGISTRANT DEEMS APPROPRIATE. AS SUCH, THE PROSPECTUS AND
STATEMENT OF ADDITIONAL INFORMATION THAT ARE INCLUDED IN THIS
POST-EFFECTIVE AMENDMENT NO. 95 ARE TO BE USED CONCURRENTLY WITH
AND SEPARATELY FROM EACH PROSPECTUS AND STATEMENT OF ADDITIONAL
INFORMATION FOR THE OTHER 6 SERIES OFFERED BY THE REGISTRANT
DESIGNATED AS IVY BOND FUND, IVY EMERGING GROWTH FUND, IVY GROWTH
FUND, IVY GROWTH WITH INCOME FUND, IVY INTERNATIONAL BOND FUND
AND IVY MONEY MARKET FUND, WHICH ARE INCORPORATED BY REFERENCE TO
THIS FILING.

IVY FUND

CROSS REFERENCE SHEET

Post-Effective Amendment No. 95 contains 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 II, Ivy International
Fund, Ivy International Small Companies Fund, Ivy Latin America
Strategy Fund, Ivy New Century Fund and Ivy Pan-Europe Fund,
twelve of the eighteen series of Ivy Fund (the "Registrant").
The other six series of the Registrant are described in separate
prospectuses and statements of additional information, which are
not included herewith but are incorporated by reference herein.

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

IVY FUNDS(R)

October 31, 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.

The twelve 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 II
Ivy International Fund
Ivy International Small Companies Fund
Ivy Latin America Strategy Fund
Ivy New Century Fund
Ivy Pan-Europe 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 October 31, 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 ............ 14
Risk Factors and Investment Techniques ........ 19
Organization and Management of the Funds ...... 23
Investment Manager ............................ 24
Fund Administration and Accounting ............ 25
Transfer Agent ................................ 25
Alternative Purchase Arrangements ............. 25
Dividends and Taxes ........................... 25
Performance Data .............................. 26
How to Buy Shares ............................. 27
How Your Purchase Price is Determined ......... 27
How Each Fund Values its Shares ............... 28
Initial Sales Charge Alternative-Class A Shares 28
Contingent Deferred Sales Charge-Class A Shares 28
Qualifying for a Reduced Sales Charge ......... 29
Contingent Deferred Sales Charge Alternative-
Class B and Class C Shares ............... 29
How to Redeem Shares .......................... 30
Minimum Account Balance Requirements .......... 31
Signature Guarantees .......................... 31
Choosing a Distribution Option ................ 31
Tax Identification Number ..................... 32
Certificates .................................. 32
Exchange Privilege ............................ 32
Reinvestment Privilege ........................ 33
Systematic Withdrawal Plan .................... 33
Automatic Investment Method ................... 33
Consolidated Account Statements ............... 33
Retirement Plans .............................. 33
Shareholder Inquiries ......................... 34
</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>

[IVY MACKENZIE LOGO]
<PAGE> 2

May 13, 1997 IVY FUNDS

Ivy
International
Equity
Funds

Prospectus

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

PICTURE

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 eighteen separate portfolios. Twelve 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 twelve 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 II
Ivy International Fund
Ivy International Small Companies Fund
Ivy Latin America Strategy Fund
Ivy New Century Fund
Ivy Pan-Europe 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 May
13, 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.

TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Expense Information ............................................................... 2

The Funds' Financial Highlights.................................................... 6

Investment Objectives and Policies.................................................13

Risk Factors and Investment Techniques.............................................18

Organization and Management of the Funds...........................................22

Investment Manager.................................................................23

Fund Administration and Accounting.................................................24

Transfer Agent.....................................................................24

Alternative Purchase Arrangements..................................................24

Dividends and Taxes................................................................24

Performance Data...................................................................25

How to Buy Shares..................................................................26

How Your Purchase Price is Determined..............................................26

How Each Fund Values its Shares....................................................27

Initial Sales Charge Alternative-Class A Shares....................................27

Contingent Deferred Sales Charge-Class A Shares....................................27

Qualifying for a Reduced Sales Charge..............................................28

Contingent Deferred Sales Charge Alternative-
Class B and Class C Shares.....................................................29

How to Redeem Shares...............................................................29

Minimum Account Balance Requirements...............................................30

Signature Guarantees...............................................................30

Choosing a Distribution Option.....................................................31

Tax Identification Number..........................................................31

Certificates.......................................................................31

Exchange Privilege.................................................................31

Reinvestment Privilege.............................................................32

Systematic Withdrawal Plan.........................................................32

Automatic Investment Method........................................................32

Consolidated Account Statements....................................................32

Retirement Plans...................................................................33

Shareholder Inquiries..............................................................33
</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>

IVY MACKENZIE

<PAGE> 3

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 II, 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> 4

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 II***
Class A............................................... 1.00% 0.25% 0.50% 1.75%
Class B............................................... 1.00% 1.00%(2) 0.50% 2.50%
Class C............................................... 1.00% 1.00%(2) 0.50% 2.50%
Class I............................................... 1.00% 0.00% 0.41%(3) 1.41%
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%
IVY PAN-EUROPE 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%
</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% (1.50%, in the
case of Ivy International Fund II) of each Fund's average
net assets. Without expense reimbursements (and fees paid
indirectly, 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.
*** These funds commenced operation on May 13, 1997. Expense
information is based on estimated amounts for the currrent
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> 5

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>

<TABLE>
<CAPTION>
1 Year 3 Years
IVY INTERNATIONAL FUND II+ ------ -------
<S> <C> <C> <C> <C>
Class A Shares*............................................. $74 $109
Class B Shares.............................................. $75(1) $108(2)
Class B Shares (no redemption).............................. $25 $ 78
Class C Shares.............................................. $35(5) $ 78
Class C Shares (no redemption).............................. $25 $ 78
Class I Shares**............................................ $14 $ 45
</TABLE>

4
<PAGE> 6

<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>
<CAPTION>
1 Year 3 Years
IVY PAN-EUROPE 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>
<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> 7

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; or Ivy International Fund II or
Ivy Pan-Europe Fund, which commenced operations May 13, 1997.

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.

IVY ASIA PACIFIC FUND

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
-------- ------- -------
1997(A) 1997(A) 1997(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 income(b)(c)............... .10 .07 .07
Net realized and unrealized gain on
investments(c)........................... .17 .18 .18
------- ------- ------
Total from investment operations....... .27 .25 .25
------- ------- ------
Net asset value, end of period............... $ 10.27 $10.25 $10.25
======= ======= ======
Total return(%).............................. 2.70 2.50 2.50
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in thousands)..... $ 303 $ 473 $ 310
Ratio of expenses to average net assets
With expense reimbursement(%)............... 1.02 1.74 1.59
Without expense reimbursement(%)............ 15.95 16.67 16.52
Ratio of net investment income to average net
assets(%)(b)................................ 2.32 1.60 1.75
Portfolio turnover rate(%)................... 0 0 0
Average commission rate...................... $ .0084 $.0084 $.0084
</TABLE>

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

(a) From January 1, 1997 (commencement of operations) to June 30, 1997.
Unaudited.

(b) Net investment income is net of expenses reimbursed by IMI.>

6
<PAGE> 8

IVY CANADA FUND

<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------------
1997(K) 1996 1995 1994(A) 1994(B) 1993(B) 1992(B) 1991(C)
SELECTED PER SHARE DATA -------- -------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period.............................. $ 9.64 $ 9.21 $ 8.90 $ 9.85 $10.04 $ 7.43 $ 8.89 $ 8.55
------- ------- ------- -------
Income (loss) from investment
operations
Net investment income (loss)...... (.09)(j) (.21) (.19)(g) (.11) (.11) (.01) (.12) (.03)
Net realized and unrealized gain
(loss) on investment
transactions..................... (.79)(j) 2.29 .75 (.81) .24 3.35 (1.34) .41
------- ------- ------- -------
Total from investment
operations.................... (.88) 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
From capital paid-in.............. -- -- -- .03 .01 -- -- --
------- ------- ------- -------
Total distributions............ -- 1.65 .25 .03 .32 .73 -- .04
------- ------- ------- -------
Net asset value, end of period....... $ 8.76 $ 9.64 $ 9.21 $ 8.90 $ 9.85 $10.04 $ 7.43 $ 8.89
======= ======= ======= =======
Total return(%)...................... (9.13) 23.86 6.37 (9.38) 1.05 47.10 (16.42) 6.59(i)
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in
thousands).......................... $12,457 $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(%).... 2.80 2.79 3.23 2.44 2.05 2.63 2.70 2.78
Ratio of net investment income (loss)
to average net assets(%)............ (2.09) (1.78) (2.13)(g) (1.85) (1.09) (1.41) (1.39) (.52)
Portfolio turnover rate(%)........... 42 56 21 36 62 32 2 4
Average commission rate.............. $ .0207 $ .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
(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
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 AND SUPPLEMENTAL DATA
Net assets, end of period (in
thousands).................... $14,268 $16,807 $5,360
Ratio of expenses to average ne
assets
With expense reimbursement(%). -- 2.36 1.91
Without expense reimbursement( 2.89 3.14 5.05
Ratio of net investment income
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
-----------------------------
1997(K) 1996 1995
SELECTED PER SHARE DATA ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................................................... $ 9.59 $ 9.21 $ 8.90
------- ------- ------
Income (loss) from investment operations
Net investment loss.................................................................. (.11)(j) (.17) (.20)(g)
Net realized and unrealized gain (loss) on investment transactions................... (.78)(j) 2.19 .71
------- ------- ------
Total from investment operations.................................................. (.89) 2.02 .51
------- ------- ------
Less distributions
From net realized gain............................................................... -- 1.64 .20
------- ------- ------
Total distributions............................................................... -- 1.64 .20
------- ------- ------
Net asset value, end of period.......................................................... $ 8.70 $ 9.59 $ 9.21
======= ======= ======
Total return(%)......................................................................... (9.28) 23.26 5.74
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in thousands)................................................ $2,052 $2,040 $1,142
Ratio of expenses to average net assets
With expense reimbursement(%).......................................................... -- -- 3.50
Without expense reimbursement(%)....................................................... 3.12 3.30 3.83
Ratio of net investment loss to average net assets(%)................................... (2.40) (2.30) (2.73)(g)
Portfolio turnover rate(%).............................................................. 42 56 21
Average commission rate................................................................. $.0207 $.0134 N/A

<CAPTION>
CLASS B CLASS C
------------------ --------------------
1994(A) 1994(F) 1997(K) 1996(H)
SELECTED PER SHARE DATA ------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 9.85 $10.16 $ 9.62 $10.67
------ ------ ------ ------
Income (loss) from investment operations
Net investment loss....................... (.09) (.02) (.10)(j) (.14)
Net realized and unrealized gain (loss) on (.86) (.29) (.79)(j) .72
------ ------ ------ ------
Total from investment operations....... (.95) (.31) (.89) .58
------ ------ ------ ------
Less distributions
From net realized gain.................... -- -- -- 1.63
------ ------ ------ ------
Total distributions.................... -- -- -- 1.63
------ ------ ------ ------
Net asset value, end of period............... $ 8.90 $ 9.85 $ 8.73 $ 9.62
====== ====== ====== ======
Total return(%).............................. (9.64) (3.05) (9.25) 6.51
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in thousands)..... $ 741 $ 227 $ 485 $ 173
Ratio of expenses to average net assets
With expense reimbursement(%)............... -- -- -- --
Without expense reimbursement(%)............ 3.03 2.68 3.04 3.15
Ratio of net investment loss to average net a (2.44) (1.72) (2.32) (2.15)
Portfolio turnover rate(%)................... 36 62 42 56
Average commission rate...................... N/A N/A $.0207 $.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.

(j) Based on average shares outstanding.

(k) For the six months ended June 30, 1997. Unaudited.

7
<PAGE> 9

IVY CHINA REGION FUND

<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------
1997(F) 1996 1995 1994 1993(A)
SELECTED PER SHARE DATA ------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $10.30 $ 8.58 $ 8.61 $ 11.55 $10.00
------- ------- ------- ------- ------
Income (loss) from investment operations
Net investment income (loss)(c)........... .05(e) .03 .14 .05 (.01)
Net realized and unrealized gain (loss) on
investment transactions.................. 1.32(e) 1.74 (.01) (2.91) 1.57
------- ------- ------- ------- ------
Total from investment operations....... 1.37 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............... $11.67 $ 10.30 $ 8.58 $ 8.61 $11.55
======= ======= ======= ======= ======
Total return(%).............................. 13.30 20.50 1.59 (24.88) 15.65
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in thousands)..... $17,482 $15,290 $12,855 $13,180 $8,371
Ratio of expenses to average net assets(d)
With expense reimbursement.................. 2.37 2.20 2.20 2.20 1.98
Without expense reimbursement............... 2.48 2.48 2.73 2.76 2.45
Ratio of net investment income (loss) to
average net assets(%)(c).................... .88 .32 1.61 .55 (.91)
Portfolio turnover rate(%)................... 8 22 25 4 0
Average commission rate...................... $.0069 $ .0050 N/A N/A N/A
</TABLE>

<TABLE>
<CAPTION>
CLASS B CLASS C
------------------------------------------------------------- ----------------------
1997(F) 1996 1995 1994 1993(A) 1997(F) 1996(B)
SELECTED PER SHARE DATA --------- --------- ------ ------ -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period............................ $ 10.28 $ 8.58 $ 8.61 $11.55 $10.00 $10.24 $ 9.44
------- ------ ------ ------ ------ ------ ------
Income (loss) from investment
operations
Net investment income
(loss)(c)...................... .01(e) (.04) .08 (.02) (.02) .02(e) --
Net realized and unrealized gain
(loss) on investment
transactions................... 1.32(e) 1.74 (.02) (2.92) 1.57 1.31(e) .89
------- ------ ------ ------ ------ ------ ------
Total from investment
operations.................. 1.33 1.70 .06 (2.94) 1.55 1.33 .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..... $ 11.61 $10.28 $ 8.58 $ 8.61 $11.55 $11.57 $10.24
======= ====== ====== ====== ====== ====== ======
Total return(%).................... 12.94 19.67 .83 (25.45) 15.50 12.99 9.39
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)........................ $11,265 $8,995 $6,905 $7,336 $3,565 $1,105 $ 449
Ratio of expenses to average net
assets(d)
With expense reimbursement........ 3.08 2.95 2.95 2.95 2.74 2.93 2.71
Without expense reimbursement..... 3.19 3.23 3.48 3.51 3.20 3.04 2.99
Ratio of net investment income
(loss) to average net
assets(%)(c)...................... .17 (.43) .86 (.20) (1.66) .32 (.19)
Portfolio turnover rate(%)......... 8 22 25 4 0 8 22
Average commission rate............ $ .0069 $.0050 N/A N/A N/A $.0069 $.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 any fees paid indirectly.

(e) Based on average shares outstanding.

(f) For the six months ended June 30, 1997. Unaudited.

8
<PAGE> 10

IVY GLOBAL FUND(G)

<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------------------------------------
1997(J) 1996 1995 1994(A) 1994(B) 1993(B) 1992(B) 1991(C)
SELECTED PER SHARE DATA --------- --------- ------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period................ $ 13.17 $ 11.97 $ 11.23 $ 11.52 $ 10.62 $ 10.55 $ 9.40 $ 10.00
------- ------- ------- ------- ------- ------- ------- -------
Income (loss) from
investment operations
Net investment
income(f)............. .12(j) .08 .09 -- -- .03 .06 .02
Net realized and
unrealized gain (loss)
on investments........ 1.53(j) 1.86 1.25 (.10) 1.79 .44 1.79 (.61)
------- ------- ------- ------- ------- ------- ------- -------
Total from
investment
operations......... 1.65 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................... $ 14.82 $ 13.17 $ 11.97 $ 11.23 $ 11.52 $ 10.62 $ 10.55 $ 9.40
======= ======= ======= ======= ======= ======= ======= =======
Total return(%)........... 12.53 16.21 12.08 (1.00) 16.71 4.54 19.91 (24.65)(h)
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period
(in thousands)........... $28,313 $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(%)....... 2.05 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)......... 1.75 .58 .71 (.06) .01 .38 .82 .81
Portfolio turnover
rate(%).................. 4 43 53 23 85 67 59 24
Average commission rate... $ .0107 $ .0181 N/A N/A N/A N/A N/A N/A
</TABLE>

<TABLE>
<CAPTION>
CLASS B CLASS C
--------------------------------------------------------- ----------------------
1997(I) 1996 1995 1994(A) 1994(D) 1997(I) 1996(E)
SELECTED PER SHARE DATA ------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period... $ 13.12 $11.97 $11.23 $11.52 $12.12 $12.94 $ 13.31
------ ------ ------ ------ ------ -------
Income (loss) from investment
operations
Net investment income (loss)(f)..... .07(j) (.02) -- (.03) (.01) .07(j) (.01)
Net realized and unrealized gain
(loss) on investments.............. 1.53(j) 1.85 1.25 (.12) (.04) 1.46(j) .42
------ ------ ------ ------ ------ -------
Total from investment
operations...................... 1.60 1.83 1.25 (.15) (.05) 1.53 .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......... $ 14.72 $13.12 $11.97 $11.23 $11.52 $14.47 $ 12.94
====== ====== ====== ====== ====== =======
Total return(%)........................ 12.20 15.30 11.25 (1.37) (.38) 11.82 3.07
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)............................ $13,178 $8,968 $4,811 $2,956 $ 376 $ 928 $ 71
Ratio of expenses to average net assets
With expense reimbursement(%)......... -- -- 2.95 2.95 2.95 -- --
Without expense reimbursement(%)...... 2.80 2.94 3.21 3.09 3.17 2.76 3.77
Ratio of net investment income (loss)
to average net assets(%)(f)........... 1.00 (.17) (.04) (.81) (.74) 1.03 (1.01)
Portfolio turnover rate(%)............. 4 43 53 23 85 4 43
Average commission rate................ $ .0107 $.0181 N/A N/A N/A $.0107 $ .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").
(h) Annualized

(i) For the six months ended June 30, 1997. Unaudited.

(j) Based on average shares outstanding.

9
<PAGE> 11

IVY GLOBAL NATURAL RESOURCES FUND

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------- ------- -------
1997(A) 1997(A) 1997(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)(c)............ (.15) (.27) (.31)
Net realized and unrealized gain on
investments(c)...................... 1.80 1.89 1.93
------ ------ ------
Total from investment
operations........................ 1.65 1.62 1.62
------ ------ ------
Net asset value, end of period.......... $11.65 $11.62 11.62
====== ====== ======
Total return(%)......................... 16.50 16.20 16.20
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)............................. $4,931 $2,484 $ 103
Ratio of expenses to average net assets
With expense reimbursement(%).......... 1.93 2.67 2.88
Without expense reimbursement(%)....... 3.04 3.78 3.99
Ratio of net investment income (loss) to
average net assets(%)(b)............... (1.00) (1.74) (1.95)
Portfolio turnover rate(%).............. 66 66 66
Average commission rate................. $.0188 $.0188 $.0188
</TABLE>

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

(a) From January 1, 1997 (commencement of operations) to June 30, 1997.
Unaudited.

(b) Net investment income (loss) is net of expenses reimbursed by IMI.

IVY GLOBAL SCIENCE & TECHNOLOGY FUND

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------------------------ ------------------------ ------------------------
1997(C) 1996(A) 1997(C) 1996(A) 1997(C) 1996(A)
SELECTED PER SHARE DATA ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period......................... $16.40 $10.00 $16.44 $10.00 $16.46 $10.00
------- ------ ------ ------ ------ ------
Income from investment
operations
Net investment loss(b)....... (.05)(d) (.06) (.05)(d) (.06) (.05)(d) (.05)
Net realized and unrealized
gain on investments......... .29(d) 6.49 .22(d) 6.52 .22(d) 6.53
------- ------ ------ ------ ------ ------
Total from investment
operations............... .24 6.43 .17 6.46 .17 6.48
------- ------ ------ ------ ------ ------
Less distributions
From net realized gain....... -- .03 -- .02 -- .02
------- ------ ------ ------ ------ ------
Total distributions....... -- .03 -- .02 -- .02
------- ------ ------ ------ ------ ------
Net asset value, end of
period......................... $16.64 $16.40 $16.61 $16.44 $16.63 $16.46
======= ====== ====== ====== ====== ======
Total return(%)................. 1.46 64.34 1.03 64.59 1.03 64.84
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)..................... $11,383 $8,324 $6,108 $3,425 $5,755 $2,106
Ratio of expenses to average net
assets
With expense
reimbursement(%)............. 2.21 2.19 2.90 2.99 2.95 2.95
Without expense
reimbursement(%)............. 2.30 2.90 2.99 3.70 3.04 3.66
Ratio of net investment loss to
average net assets(%)(b)....... (2.10) (2.18) (2.79) (2.98) (2.84) (2.94)
Portfolio turnover rate(%)...... 4 23 4 23 4 23
Average commission rate......... $.0595 $.0600 $.0595 $.0600 $.0595 $.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.

(d) Based on average shares outstanding.

10
<PAGE> 12

IVY INTERNATIONAL FUND+

<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------------
1997(F) 1996 1995 1994 1993 1992 1991
SELECTED PER SHARE DATA ---------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 35.89 $ 30.67 $ 27.60 $ 27.71 $ 18.88 $ 19.37 $ 16.98
---------- -------- -------- -------- -------- -------- -------
Income (loss) from investment
operations
Net investment income................ .30(g) .20 .25 .07 .12 .27(d) .26
Net realized and unrealized gain
(loss) on investment transactions... 5.29(g) 5.85 3.22 1.01 9.01 (.26) 2.61
---------- -------- -------- -------- -------- -------- -------
Total from investment
operations....................... 5.59 6.05 3.47 1.08 9.13 .01 2.87
---------- -------- -------- -------- -------- -------- -------
Less distributions
From net investment income........... -- .19 .25 .07 .08 .27 .26
From net realized gain............... -- .64 .12 1.11 .22 .23 .22
In excess of net realized gain....... -- -- 03 -- -- -- --
From capital paid-in................. -- -- -- .01 -- -- --
---------- -------- -------- -------- -------- -------- -------
Total distributions............... -- .83 .40 1.19 .30 .50 .48
---------- -------- -------- -------- -------- -------- -------
Net asset value, end of period.......... $ 41.48 $ 35.89 $ 30.67 $ 27.60 $ 27.71 $ 18.88 $ 19.37
========== ======== ======== ======== ======== ======== =======
Total return(%)......................... 15.58 19.72 12.65 3.92 48.37 .07 16.93
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)............................. $1,655,141 $989,254 $475,989 $229,586 $172,539 $109,637 $97,486
Ratio of expenses to average net
assets(%).............................. 1.59 1.65 1.52 1.58 1.61 1.71(e) 1.64
Ratio of net investment income to
average net assets(%).................. 1.74 .76 .97 .30 .56 1.36(d) 1.50
Portfolio turnover rate(%).............. 2 14 6 7 19 20 27
Average commission rate................. $ .0086 $ .0092 N/A N/A N/A N/A N/A

<CAPTION>
CLASS A
----------------------------------------
1990 1989 1988 1987
SELECTED PER SHARE DATA ------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 20.31 $ 16.62 $ 12.90 $ 12.40
------- ------- ------- -------
Income (loss) from investment
operations
Net investment income................ .50 .27 .12 .04
Net realized and unrealized gain
(loss) on investment transactions... (3.13) 4.43 3.71 2.38
------- ------- ------- -------
Total from investment
operations....................... (2.63) 4.70 3.83 2.42
------- ------- ------- -------
Less distributions
From net investment income........... .51 .17 .11 .05
From net realized gain............... .19 .84 -- 1.87
In excess of net realized gain....... -- -- -- --
From capital paid-in................. -- -- -- --
------- ------- ------- -------
Total distributions............... .70 1.01 .11 1.92
------- ------- ------- -------
Net asset value, end of period.......... $ 16.98 $ 20.31 $ 16.62 $ 12.90
======= ======= ======= =======
Total return(%)......................... (12.97) 28.26 29.72 19.51
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)............................. $64,651 $58,469 $23,637 $21,146
Ratio of expenses to average net
assets(%).............................. 1.66 1.80 1.93 1.88
Ratio of net investment income to
average net assets(%).................. 2.50 1.20 .80 .40
Portfolio turnover rate(%).............. 29 23 45 47
Average commission rate................. N/A N/A N/A N/A
</TABLE>

<TABLE>
<CAPTION>
CLASS B CLASS C
----------------------------------------------------- ---------------------
1997(F) 1996 1995 1994 1993(A) 1997(F) 1996(C)
SELECTED PER SHARE DATA -------- -------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 35.73 $ 30.67 $ 27.60 $27.71 $25.86 $ 35.58 $ 32.68
-------- -------- ------- ------- ------ -------- -------
Income (loss) from investment
operations
Net investment income (loss)......... .16(g) (.01) .01 (.10) (.01) .16(g) --
Net realized and unrealized gain
(loss) on investment transactions... 5.24(g) 5.76 3.20 .91 2.12 5.22(g) 3.74
-------- -------- ------- ------- ------ -------- -------
Total from investment
operations....................... 5.40 5.75 3.21 .81 2.11 5.38 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.......... $ 41.13 $ 35.73 $ 30.67 $27.60 $27.71 $ 40.96 $ 35.58
-------- -------- ------- ------- ------ -------- -------
Total return(%)......................... 15.11 18.76 11.62 2.96 7.65 15.12 11.45
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)............................. $589,816 $312,161 $74,650 $30,143 $2,846 $176,295 $44,450
Ratio of expenses to average net
assets(%).............................. 2.43 2.45 2.44 2.50 2.59 2.41 2.44
Ratio of net investment income (loss) to
average net assets(%).................. .90 (.04) .05 (.62) (.42) .91 (.03)
Portfolio turnover rate(%).............. 2 14 6 7 19 2 14
Average commission rate................. $ .0086 $ .0092 N/A N/A N/A $ .0086 $ .0092

<CAPTION>
CLASS I
----------------------------------------
1997(F) 1996 1995 1994(B)
SELECTED PER SHARE DATA ------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 35.89 $30.67 $ 27.60 $ 29.06
------- ------- ------- -------
Income (loss) from investment
operations
Net investment income (loss)......... .38(g) .27 .30 .03
Net realized and unrealized gain
(loss) on investment transactions... 5.30(g) 5.88 3.22 (.49)
------- ------- ------- -------
Total from investment
operations....................... 5.68 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.......... $ 41.57 $35.89 $ 30.67 $ 27.60
------- ------- ------- -------
Total return(%)......................... 15.83 20.06 12.85 (1.64)
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)............................. $92,407 $53,344 $13,020 $ 4,921
Ratio of expenses to average net
assets(%).............................. 1.19 1.25 1.35 1.41
Ratio of net investment income (loss) to
average net assets(%).................. 2.14 1.16 1.14 .47
Portfolio turnover rate(%).............. 2 14 6 7
Average commission rate................. $ .0086 $.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%.

(f) For the six months ended June 30, 1997. Unaudited.

(g) Based on average shares outstanding.

11
<PAGE> 13

IVY INTERNATIONAL FUND II

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
-------------------- -------------------- --------------------
1997(B) 1997(A) 1997(B) 1997(A) 1997(B) 1997(A)
SELECTED PER SHARE DATA ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $10.01 $10.01 $10.01 $10.01 $10.01 $ 10.01
------- ------- ------- ------- ------- -------
Income from investment operations
Net investment income (loss)(c)............. .03(c)(d) .03 (.05)(c)(d) .02 (.04)(c)(d) .02
Net realized and unrealized gain on
investment transactions(c)................ .16 .22 .22 .22 .20 .22
------- ------- ------- ------- ------- -------
Total from investment operations....... .19 .25 .17 .24 .16 .24
------- ------- ------- ------- ------- -------
Net asset value, end of period............... $10.20 $10.26 $10.18 $10.25 $10.17 $ 10.25
======= ======= ======= ======= ======= =======
Total return(%).............................. 1.90 2.50 1.70 2.40 1.60 2.40
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in thousands)..... $14,275 $6,508 $46,927 $16,698 $28,033 $ 8,834
Ratio of expenses to average net assets(d)...
With expense reimbursement(%)............... 1.74 -- 2.51 -- 2.50 --
Without expense reimbursement(%)............ 1.95 1.82 2.72 2.58 2.71 2.56
Ratio of net investment income (loss) to
average net assets(%)....................... .33 2.66 (.44) 1.90 (.43) 1.92
Portfolio turnover rate(%)................... 0 0 0 0 0 0
Average commission rate($)................... .0233 .0228 .0233 .0228 .0233 .0228
</TABLE>

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

(a) For the period May 13, 1997 (commencement of operations) to June 30, 1997.
Unaudited.

(b) For the period May 13, 1997 (commencement of operations) to September 30,
1997. Unaudited.

(d) Net investment income is net of expenses reimbursed by IMI.

IVY INTERNATIONAL SMALL COMPANIES FUND

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------- ------- -------
1997(A) 1997(A) 1997(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 income(b)(c).......... .06 .03 .03
Net realized and unrealized gain on
investments(c)...................... .32 .31 .32
------ ------ ------
Total from investment
operations........................ .38 .34 .35
------ ------ ------
Net asset value, end of period.......... $10.38 $10.34 $10.35
====== ====== ======
Total return(%)......................... 3.80 3.40 3.50
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)............................. $1,117 $ 695 $1,585
Ratio of expenses to average net assets
With expense reimbursement(%).......... 2.11 2.91 2.82
Without expense reimbursement(%)....... 6.37 7.17 7.08
Ratio of net investment income to
average net assets(%)(b)............... 1.53 .73 .83
Portfolio turnover rate(%).............. 0 0 0
Average commission rate................. $.0026 $.0026 $.0026
</TABLE>

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

(a) From January 1, 1997 (commencement of operations) to June 30, 1997.
Unaudited.

(b) Net investment loss is net of expenses reimbursed by IMI.

IVY LATIN AMERICA STRATEGY FUND

<TABLE>
<CAPTION>
CLASS A CLASS B
---------------------------------------- ------------------
1997(E) 1996 1995 1994(A) 1997(E) 1996
SELECTED PER SHARE DATA ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 8.51 $ 6.88 $ 8.37 $10.00 $ 8.48 $ 6.88
------- ------- ------- ------- ------- -------
Loss from investment operations
Net investment income (loss)(c)........... .08(f) .01 .01 -- .04(f) (.03)
Net realized and unrealized gain (loss) on
investment transactions.................. 2.25(f) 1.66 (1.45) (1.63) 2.23(f) 1.63
------- ------- ------- ------- ------- -------
Total from investment operations....... 2.33 1.67 (1.44) (1.63) 2.27 1.60
------- ------- ------- ------- ------- -------
Less distributions
From net realized gain.................... -- .04 -- -- -- --
From capital paid-in --.... -- .05 -- -- --
------- ------- ------- ------- ------- -------
Total distributions.................... -- .04 .05 -- -- --
------- ------- ------- ------- ------- -------
Net asset value, end of period............... $10.84 $ 8.51 $ 6.88 $ 8.37 $10.75 $ 8.48
======= ======= ======= ======= ======= =======
Total return(%).............................. 27.38 24.22 (17.28) (16.10) 26.77 23.26
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in thousands)..... $6,163 $ 4,016 $ 2,015 $ 571 $3,975 $ 2,025
Ratio of expenses to average net assets(d)
With expense reimbursement.................. 2.48 2.55 2.61 2.20 3.25 3.33
Without expense reimbursement............... 3.31 4.89 9.26 16.22 4.08 5.67
Ratio of net investment income (loss) to
average net assets(%)(c).................... 1.65 .24 .22 .21 .88 (.54)
Portfolio turnover rate(%)................... 4 20 45 82 4 20
Average commission rate...................... $.0002 $ .0002 N/A N/A $.0002 $ .0002

<CAPTION>
CLASS B CLASS C
------------------ ------------------
1995 1994(A) 1997(E) 1996(B)
SELECTED PER SHARE DATA ------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 8.37 $10.00 $ 8.46 $ 7.96
------- ------- ------- ------
Loss from investment operations
Net investment income (loss)(c)........... (.02) (.01) .04(f) (.02)
Net realized and unrealized gain (loss) on
investment transactions.................. (1.47) (1.62) 2.22(f) .55
------- ------- ------- ------
Total from investment operations....... (1.49) (1.63) 2.26 .53
------- ------- ------- ------
Less distributions
From net realized gain.................... -- -- -- .03
From capital paid-in -- -- -- --
------- ------- ------- ------
Total distributions.................... -- -- -- .03
------- ------- ------- ------
Net asset value, end of period............... $ 6.88 $ 8.37 $10.72 $ 8.46
======= ======= ======= ======
Total return(%).............................. (17.90) (16.20) 26.71 6.66
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in thousands)..... $ 684 $ 122 $ 508 $ 111
Ratio of expenses to average net assets(d)
With expense reimbursement.................. 3.36 2.95 3.32 3.46
Without expense reimbursement............... 10.01 16.97 4.15 5.80
Ratio of net investment income (loss) to
average net assets(%)(c).................... (.53) (.54) .81 (.68)
Portfolio turnover rate(%)................... 45 82 4 20
Average commission rate...................... N/A N/A $.0002 $.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.

(e) For the six months ended June 30, 1997. Unaudited.

(f) Based on average shares outstanding.

12
<PAGE> 14

IVY NEW CENTURY FUND

<TABLE>
<CAPTION>
CLASS A CLASS B
--------------------------------------------- -------------------
1997(E) 1996 1995 1994(A) 1997(E) 1996
SELECTED PER SHARE DATA ------- ------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period.............................. $10.12 $ 9.05 $ 8.64 $10.00 $10.04 $ 9.05
------- ------- ------ ------- ------- ------
Income (loss) from investment
operations
Net investment income
(loss)(c)........................ .05(f) (.02) .01 -- .01(f) (.06)
Net realized and unrealized gain
(loss) on investment
transactions..................... 1.49(f) 1.09 .54 (1.36) 1.48(f) 1.05
------- ------- ------ ------- ------- ------
Total from investment
operations.................... 1.54 1.07 .55 (1.36) 1.49 .99
------- ------- ------ ------- ------- ------
Less distributions
From net investment income........ -- -- .01 -- -- --
From net realized gain............ -- -- .10 -- -- --
In excess of net realized gain.... -- -- .03 -- -- --
------- ------- ------ ------- ------- ------
Total distributions............ -- -- .14 -- -- --
------- ------- ------ ------- ------- ------
Net asset value, end of period....... $11.66 $ 10.12 $ 9.05 $ 8.64 $11.53 $10.04
======= ======= ====== ======= ======= ======
Total return(%)...................... $15.22 11.83 6.40 (13.50) 14.84 10.95
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in
thousands).......................... $17,799 $ 9,925 $3,435 $ 611 $13,070 $6,269
Ratio of expenses to average net
assets(d)
With expense reimbursement.......... -- 2.45 2.55 2.20 -- 3.20
Without expense reimbursement....... 2.33 2.82 7.18 20.74 3.10 3.57
Ratio of net investment income (loss)
to average net assets(%)(c)......... 0.90 (.23) .24 .52 .13 (.98)
Portfolio turnover rate(%)........... 4 27 14 0 4 27
Average commission rate.............. $.0023 $ .0018 N/A N/A $.0023 $.0018

<CAPTION>
CLASS B CLASS C
-------------------- ------------------
1995 1994(A) 1997(E) 1996(B)
SELECTED PER SHARE DATA ------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period........................ $ 8.64 $10.00 $10.06 $ 9.89
------- ------- ------- ------
Income (loss) from investment
operations
Net investment income
(loss)(c).................. (.02) -- .01(f) (.02)
Net realized and unrealized
(loss) on investment
transactions............... .51 (1.36) 1.49(f) .19
------- ------- ------- ------
Total from investment
operations.............. .49 (1.36) 1.50 .17
------- ------- ------- ------
Less distributions
From net investment income.. -- -- -- --
From net realized gain...... .08 -- -- --
In excess of net realized ga -- -- -- --
------- ------- ------- ------
Total distributions...... .08 -- -- --
------- ------- ------- ------
Net asset value, end of period. $ 9.05 $ 8.64 $11.56 $10.06
======= ======= ======= ======
Total return(%)................ 5.62 (13.60) 14.91 1.73
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in
thousands).................... $ 945 $ 121 $3,948 $1,854
Ratio of expenses to average ne
assets(d)
With expense reimbursement.... 3.30 2.95 -- 3.16
Without expense reimbursement. 7.93 21.49 3.12 3.53
Ratio of net investment income
to average net assets(%)(c)... (.51) (.23) .12 (.94)
Portfolio turnover rate(%)..... 14 0 4 27
Average commission rate........ N/A N/A $.0023 $.0018
</TABLE>

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

(d) Beginning in 1995, total expenses include any fees paid indirectly.

(e) For the six months ended June 30, 1997. Unaudited.

(f) Based on average shares outstanding.

IVY PAN-EUROPE FUND

<TABLE>
<CAPTION>
CLASS A CLASS B
-------------------- -------
1997(C) 1997(B) 1997(E)
SELECTED PER SHARE DATA ------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning of period......... $10.02 $10.02 $10.95
------ ------ ------
Income from investment operations
Net investment income(a)(d)............... .06 .08 .01
Net realized and unrealized gain on
investment transactions(d)............... 1.27 .21 .39
------ ------ ------
Total from investment operations....... 1.33 .29 .40
------ ------ ------
Net asset value, end of period............... $11.35 $10.31 $11.35
====== ====== ======
Total return(%).............................. 13.27 2.89 4.42
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in thousands)..... $ 232 $ 162 $ 3
Ratio of expenses to average net assets
With expense reimbursement(%)............... 2.20 2.20 2.81
Without expense reimbursement(%)............ 35.09 34.21 35.70
Ratio of net investment income to average net
assets(%)................................... 1.48 6.10 .87
Portfolio turnover rate(%)................... 4 0 4
Average commission rate...................... $.0159 $.0133 $.0159
</TABLE>

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

(a) Net investment income is net of expenses reimbursed by manager.

(b) From May 13, 1997 (commencement of operations) to June 30, 1997. Unaudited.

(d) Based on average shares outstanding.

(e) From September 18, 1997 (initial sale) to September 30, 1997. Unaudited.

13
<PAGE> 15

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 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 equivalent exposure 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.

14
<PAGE> 16

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
equivalent exposure 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 Aaa

15
<PAGE> 17

or Aa by Moody's or AAA or AA by S&P). 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 equivalent exposure 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
equivalent exposure 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
equivalent exposure in such contracts does not exceed 20% of the value of its
total assets.

IVY INTERNATIONAL FUND II: 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 overall portfolio holdings. For temporary defensive pur-

16
<PAGE> 18

poses, the Fund may also invest in equity securities principally traded in U.S.
markets. IMI, the Fund's investment manager, 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. IMI 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 warrants, 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,
considered by IMI 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 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 equivalent exposure in such contracts does
not exceed 15% 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 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 equivalent exposure 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

17
<PAGE> 19

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 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 equivalent exposure 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
total 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),

18
<PAGE> 20

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 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 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 equivalent exposure in such contracts does
not exceed 15% of its total assets.

IVY PAN-EUROPE FUND: The Fund's principal investment objective is long-term
capital growth. Consideration of current income is secondary to this principal
objective. The Fund seeks to achieve its investment objective by investing
primarily in the equity securities of companies domiciled or otherwise doing
business (as described below) in European countries. Under normal circumstances,
the Fund will invest at least 65% of its total assets in the equity securities
of "European companies," which include any issuer (a) that is organized under
the laws of a European country; (b) that derives 50% or more of its total
revenues from goods produced or sold, investments made or services performed in
Europe; or (c) for which the principal trading market is in Europe. The Fund may
also invest up to 35% of its total assets in the equity securities of issuers
domiciled outside of Europe. The equity securities in which the Fund may invest
include common stock, preferred stock and common stock equivalents such as
warrants and convertible debt securities. The Fund may also invest in sponsored
or unsponsored ADRs, European Depository Receipts ("EDRs"), GDRs, ADSs, European
Depository Shares ("EDSs") and GDSs. The Fund does not expect to concentrate its
investments in any particular industry.

The Fund may invest up to 35% of its net assets in debt securities, but will
not invest more than 20% of its net assets in debt securities rated Ba or below
by Moody's or BB or below by S&P (commonly referred to as "high yield" or "junk"
bonds), or if unrated, are considered by IMI to be of comparable quality. The
Fund may also purchase securities on a "when-issued" or firm commitment basis,
engage in foreign currency exchange transactions and enter into forward foreign
currency contracts. In addition, the Fund may invest up to 5% of its net assets
in zero coupon bonds.

For temporary defensive purposes or when IMI believes that circumstances
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 IMI to be of comparable
quality), warrants, and cash or cash equivalents such as domestic or foreign
bank obligations (including certificates of deposit, time deposits and bankers'
acceptances), short-term notes, repurchase agreements, 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 Moody's or
AAA or AA by S&P).

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 equivalent exposure 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-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.

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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 has assumed sovereignty over Hong Kong.

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.

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

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<PAGE> 22

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.

BORROWING: A Fund may only borrow for temporary or emergency purposes, as
described above. 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, 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.

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 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.

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<PAGE> 23

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).

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 associated with the Funds' investments, generally.

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.

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).

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.

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, 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.

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 of the option the right, in return for a
premium, 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

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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.

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.

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.

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.

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.

"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, 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 18 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 II,
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 II, Ivy

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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 September
30, 1997, IMI and MIMI had approximately $3.72 and $1.24 billion, 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 II, IVY INTERNATIONAL FUND, IVY
INTERNATIONAL SMALL COMPANIES FUND, IVY LATIN AMERICA STRATEGY FUND, IVY NEW
CENTURY FUND AND IVY PAN-EUROPE 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% (1.50%, in the case of Ivy International Fund II) 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 this service, IMI pays Northern Cross a fee that is equal, on an annual
basis, to 0.60% of the first $1.5 billion in average net assets, 0.55% of the
next $1 billion in average net assets and 0.50% of average net assets in excess
of $2.5 billion. 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
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 is President and Chief Investment Officer of IMI and
Vice President of the Trust, and 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 Chairman and a Director of IMI and the President
and a Director of 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 and is a member of the Ivy international
portfolio management 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, portfolio manager of Ivy
International Fund II, and Ivy International Small Companies Fund. She is
Managing Director of International Equities and a member of the Ivy
international portfolio management team. Ms. Trebbi joined the
organization in 1988 and has 9 years of professional experience. She is a
Charter Financial Analyst and holds a graduate diploma from the London
School of Economics.

- The Ivy international portfolio management team manages Ivy Asia Pacific
Fund, Ivy China Region Fund, Ivy Latin America Strategy

24
<PAGE> 26

Fund, and Ivy Pan-Europe Fund. The Ivy international portfolio management
team consist of Barbara Trebbi, Michael Landry and the Ivy international
research team headed by Eric Michelis. Mr. Michelis has a graduate degree
in Economics and Finance from Institut Des Etudes Politiques de Paris and
a graduate degree from Ecole Francaise D'Electronique Et D'Inforatique.
Other team members include Oleg Makhorine, located in Prague, who is a
graduate of the Economics University in Prague; Justin Lu, who is a
graduate of Shanghai International University; Moria McLachlan, who earned
her degree in international business from the University of South
Carolina; and Jonathan Tang, located in Shanghai, who is a graduate of
Shanghai International University.

IMI'S INVESTMENT PROCESS: Each of IMI's international equity portfolio
managers is supported by a team of research analysts, who are responsible for
providing objective information on regional and country-specific economic and
political developments and monitoring individual companies. Members of the
research analyst team that supports IMI's international equity portfolio
managers are located in the U.S. at IMI's south Florida office, as well as in
Asia and Europe. IMI's analysts use a variety of research sources, such as
brokerage reports, economic and financial news services, equity databases and
company reports. Established relationships with more than thirty research firms
provide IMI's analysts and portfolio managers access to information on the
various factors that may influence a particular investment decision. These firms
range from large investment banks with global coverage to local research houses.
In many cases, IMI's investment professionals also conduct primary research by
meeting with company management, touring facilities, and speaking with local
research analysts, economists and strategists. Such primary research is
considered particularly important in emerging market countries.

Research efforts by IMI focus on determining opportunities that fall within
the IMI's long-term, value-oriented approach to investing. The investment
decision making process starts with a "top-down" view of a particular country
and the long-term outlook for given industries within that country. Company
selection generally is based on a "bottom-up" analysis of certain value measures
(e.g., earnings, cash flow and growth potential) that are monitored in a
proprietary database in which risk-adjusted company valuations across countries
and industries are compared. Ultimate investment decisions take into account the
fund's investment objective, diversification requirements and risk tolerance
level. While current earnings are considered important, investment decisions
most often are based on earnings estimates over a five-year period. Stock
selection typically is concentrated in the cheapest 20% of the universe and sell
recommendations normally are generated when valuations reach the top 20% of the
universe.

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

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 (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 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 Global Science &
Technology Fund, Ivy International Fund II, 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.

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

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

25
<PAGE> 27

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.

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, that a Fund designates as capital gain dividends, 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.

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 may be
eligible for reduced Federal tax rates, 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 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.

PRIOR PERFORMANCE OF IVY INTERNATIONAL FUND II'S PORTFOLIO MANAGER: Provided
below are performance figures for the international sub-portfolio of Ivy Growth
Fund (the "Sub-Portfolio"). Ivy Growth Fund is a separate series of the Trust.
The Sub-Portfolio has been managed since November 1, 1993 by Barbara Trebbi, one
of the Ivy Growth Fund managers, and has comprised 20% to 25% of Ivy Growth
Fund's portfolio. The performance figures presented below are unaudited, and are
intended to illustrate the past performance of the Sub-Portfolio, which
investment policies and strategies are substantially similar to those that will
be employed with respect to Ivy International Fund II. In comparing an equity
fund that has an international sub-portfolio to a purely international fund,
investors should bear in mind that custody, brokerage and certain other expenses
of a purely international fund will ordinarily be higher. Accordingly, the
returns shown below would be adversely affected if Ivy Growth Fund were a purely
international fund. The performance information provided below is historical and
relates exclusively to the Sub-Portfolio. As such, it is not indicative of the
future performance of Ivy International Fund II, or of the past or future
performance of IMI.

The following table summarizes the calculation of average annual return for
the Sub-Portfolio compared with the performance of the MSCI EAFE Index and the
Lipper average for international funds for the periods indicated.

26
<PAGE> 28

<TABLE>
<CAPTION>
SUB- LIPPER AVERAGE
PORTFOLIO MSCI EAFE FOR INTERNATIONAL
IVY GROWTH FUND* INDEX** FUNDS***
---------------- --------- -----------------
<S> <C> <C> <C>
One year ended September 30, 1997.... 29.84% 12.18% 18.59%
Three years ended September 30,
1997................................ 12.77% 8.83% 10.16%
Period from November 1, 1993****
through September 30, 1997.......... 14.48% 8.64% 10.20%
</TABLE>

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

* Average annual return reflects the average change in portfolio value during
the periods indicated, including reinvestment of dividends, net of a
pro-rata allocation of Class A share Total Fund Operating Expenses, and
does not include a sales charge. Returns of Class B and Class C shares were
lower than Class A shares based on differences in their respective sales
loads and fees.

** The MSCI EAFE Index is an unmanaged index of common stocks that is
considered to be generally representative of the performance of issuers
located in Europe, Australia and the Far East. The Index is adjusted to
reflect reinvestment of dividends, but does not reflect fees, brokerage
commissions, or other expenses of investing.

*** The Lipper average for international funds represents the performance of
the average international fund as measured by Lipper Analytical Services,
Inc.

**** The date on which Ms. Trebbi commenced managing the Sub-Portfolio.

Although the investment objectives and policies of Ivy International Fund II
are similar to those of Ivy International Fund, a separate portfolio of the
Trust, Ivy International Fund II's portfolio securities are not expected to be
the same as those of Ivy International Fund for a variety of reasons, including
that these Funds have different portfolio managers. Over time, the portfolio
managers' investment decisions on behalf of these Funds will result in different
securities being selected for these Funds. Consequently, investors should not
expect the performance of Ivy International Fund II to be identical to that of
the Sub-Portfolio or Ivy International Fund.

HOW TO BUY SHARES

Effective April 18, 1997, 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. Once a
shareholder's account has been liquidated, the shareholder may not invest in Ivy
International Fund at a later date.

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:

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 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

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, Class C and Class I 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.

27
<PAGE> 29

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 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.

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
(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>

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.

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 (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).

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,

28
<PAGE> 30

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 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 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 fund, may be exempt from sales charges on the purchase
of Class A shares of any of the Ivy 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 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 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 28 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.

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

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<PAGE> 31

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 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 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
CLASS B SHARES 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 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.

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 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 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

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<PAGE> 32

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 27 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 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 FUND -- Both dividends and capital gains are
automatically invested at NAV in another Ivy fund of the same class.

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<PAGE> 33

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 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 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 a Fund have an exchange privilege with other Ivy 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 orders.

Class A shareholders may exchange their outstanding Class A shares for Class
A shares of another Ivy 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 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 fund on the basis of the relative NAV per Class I share.
Exchanges from any Class of Fund shares into an Ivy fund in which shares are not
already held are subject to certain minimum investment restrictions. See
"Exchange of Shares" in the SAI or contact IMSC at 1-800-777-6472 for further
details.

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 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 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.

Investors who held Ivy Fund shares as of December 31, 1991, or who held
shares of certain funds that were reorganized into an Ivy fund, may be exempt
from sales charges on the exchange of shares between any of the Ivy 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.

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<PAGE> 34

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

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.

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 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 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 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

33
<PAGE> 35

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 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.

34
<PAGE> 36

ACCOUNT APPLICATION

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

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 C Red Cd
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

1. Registration

<TABLE>
<S> <C>
[ ] Individual ------------------------------------------------------------
[ ] Joint Tenant Owner, Custodian or Trustee
[ ] Estate ------------------------------------------------------------
[ ] UGMA/UTMA Co-owner or Minor
[ ] Corporation ------------------------------------------------------------
[ ] Partnership Minor's State of Residence
[ ] Sole Proprietor ------------------------------------------------------------
[ ] Trust Street
---------------------- ------------------------------------------------------------
Date of Trust City State Zip Code
[ ] Other ------------- ------------------------------------------------------------
---------------------- - - - -
------------------------------ ------------------------------
Phone Number -- Day Phone Number -- Evening
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

2. Tax ID#

<TABLE>
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- - or -
--------------------------- ------------------------- Citizenship: [ ] U.S. [ ] Other
Social Security Number Tax Identification Number
</TABLE>

<TABLE>
<S> <C>
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.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
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.
<S> <C>
------------------------------------------------------------ -----------------------------------------------
Dealer Name Representative's Name and Number

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

------------------------------------------------------------ -----------------------------------------------
City State Zip Code Authorized Signature of Dealer
</TABLE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
4. Investments
<S> <C> <C> <C>
A. Enclosed is my check for $ _______________($1,000 minimum) made payable to the appropriate Fund.

B. Please invest in [ ] Class A shares [ ] Class B shares [] Class C shares [ ] Class I shares ("*" Funds only) of
the following Fund(s):
$ _______________ Ivy Asia Pacific Fund $ ______________ Ivy International Fund II*

$ _______________ Ivy Canada Fund $ ______________ Ivy International Small Companies Fund*

$ _______________ Ivy China Region Fund $ ______________ Ivy Latin America Strategy Fund

$ _______________ Ivy Global Fund $ ______________ Ivy New Century Fund

$ _______________ Ivy Global Natural Resources Fund $ ______________ Ivy Pan-Europe Fund

$ _______________ Ivy Global Science & Technology Fund* $ ______________ Other: _________

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.
</TABLE>

<TABLE>
<S> <C> <C>
------------------------------------ ------------------------- [ ] or New
Fund Name Account Number
------------------------------------ ------------------------- [ ] 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 [ ] $100,000 [ ] $250,000 [ ] $500,000
</TABLE>

<TABLE>
<S> <C> <C> <C> <C> <C>
D. FOR DEALER USE ONLY
Confirmed trade orders:
--------------- --------------- ------- ---------------
Confirm Number Number of Shares Trade Date
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
5. Distribution
Options
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
A. I would like to reinvest dividends and capital gains into additional shares of the same class in this account at net asset
value unless a different option is checked below.

B. [ ] Reinvest all dividends and capital gains into additional shares of the same class in an account in 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> 37
6. Optional
Special
Features
- --------------------------------------------------------------------------------
A. [ ] AUTOMATIC INVESTMENT METHOD (AIM)

<TABLE>
<S> <C>
I wish to invest [ ] once per My bank account will be debited on or about the
month.
[ ] 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 [ ] Class B or [ ] Class C of ____________
Dollar Amount Month Fund Name
[ ] I have attached a voided check to ensure my correct bank account will be debited.

B. [ ] SYSTEMATIC WITHDRAWAL PLANS**
</TABLE>

<TABLE>
<S> <C>
I wish to automatically withdraw funds from my [ ] Monthly [ ] Quarterly [ ] Semiannually [ ] Annually
account in Class A [ ] Class B [ ] or Class C [ ] of _________ I request the distribution be:
Fund Name [ ] Sent to the address listed in the registration.
[ ] Once [ ] Twice [ ] 3 times [ ] 4 times per month [ ] Sent to the special payee listed in Section 7.
[ ] Invested into additional shares of the same
class of a different Ivy fund: _____________________
Fund Name
</TABLE>

<TABLE>
<S> <C>
-------------------------
Account Number
</TABLE>

<TABLE>
<S> <C>
Amount $ ---------------, starting on or about the ________ day of __________________________
Minimum $50 month
________ day of __________________________
month
________ day of __________________________
month*
</TABLE>

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 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
Special
Payee

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

<TABLE>
<S> <C>
A. MAILING ADDRESS B. FED WIRE / E.F.T. INFORMATION
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)
</TABLE>

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

8
Signatures

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

<TABLE>
<CAPTION>
<S> <C>
Investors should be aware that failure to check "No" under Section 6D or 6E above means that the Telephone 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.
</TABLE>

<TABLE>
<CAPTION>
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED
TO AVOID BACKUP WITHHOLDING.
<S> <C>
- ----------------------------------------------------------- ----------------------------------
Signature of Owner, Custodian, Trustee or Corporate Officer Date

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

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

01INTLX1097 (Remember to Sign Section 8)

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 II
IVY INTERNATIONAL FUND
IVY INTERNATIONAL SMALL COMPANIES FUND
IVY LATIN AMERICA STRATEGY FUND
IVY NEW CENTURY FUND
IVY PAN-EUROPE FUND

series of

IVY FUND
Via Mizner Financial Plaza, Suite 300
700 South Federal Highway
Boca Raton, Florida 33432

STATEMENT OF ADDITIONAL INFORMATION

October 31, 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 twelve 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 II, Ivy International
Fund, Ivy International Small Companies Fund, Ivy Latin America
Strategy Fund, Ivy New Century Fund and Ivy Pan-Europe Fund (the
"Funds," each a "Fund"). The other six 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 October 31,
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

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
<PAGE>
TABLE OF CONTENTS

INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . 1

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . 16
U.S. GOVERNMENT SECURITIES. . . . . . . . . . . . . . . . 16
CONVERTIBLE SECURITIES. . . . . . . . . . . . . . . . . . 17
DEBT SECURITIES, IN GENERAL . . . . . . . . . . . . . . . 18
ZERO COUPON BONDS . . . . . . . . . . . . . . . . . . . . 18
REPURCHASE AGREEMENTS . . . . . . . . . . . . . . . . . . 19
WARRANTS. . . . . . . . . . . . . . . . . . . . . . . . . 19
SMALL COMPANIES . . . . . . . . . . . . . . . . . . . . . 20

COMMERCIAL PAPER . . . . . . . . . . . . . . . . . . . . . . . 20
BANKING INDUSTRY AND SAVINGS AND LOAN OBLIGATIONS . . . . 20
DEPOSITORY RECEIPTS . . . . . . . . . . . . . . . . . . . 21
INVESTMENT-GRADE DEBT SECURITIES. . . . . . . . . . . . . 21
LOW-RATED DEBT SECURITIES . . . . . . . . . . . . . . . . 21
FOREIGN SECURITIES. . . . . . . . . . . . . . . . . . . . 22
INVESTING IN EMERGING MARKETS . . . . . . . . . . . . . . 23
CANADIAN SECURITIES . . . . . . . . . . . . . . . . . . . 25
INVESTING IN LATIN AMERICA. . . . . . . . . . . . . . . . 26
INVESTING IN ASIA PACIFIC SECURITIES. . . . . . . . . . . 29
INVESTING IN NATURAL RESOURCES. . . . . . . . . . . . . . 30
INVESTING IN THE CHINA REGION . . . . . . . . . . . . . . 31
PRECIOUS METALS AND OTHER PHYSICAL COMMODITIES. . . . . . 32
FORWARD FOREIGN CURRENCY CONTRACTS. . . . . . . . . . . . 32
FOREIGN CURRENCIES. . . . . . . . . . . . . . . . . . . . 33
REAL ESTATE INVESTMENT TRUSTS (REITs) . . . . . . . . . . 34
OPTIONS TRANSACTIONS. . . . . . . . . . . . . . . . . . . 34
OPTIONS, IN GENERAL. . . . . . . . . . . . . . . . . 34
WRITING OPTIONS ON INDIVIDUAL SECURITIES . . . . . . 36
PURCHASING OPTIONS ON INDIVIDUAL SECURITIES. . . . . 37
PURCHASING AND WRITING OPTIONS ON SECURITIES
INDICES . . . . . . . . . . . . . . . . . . . . 37
RISKS OF OPTIONS TRANSACTIONS. . . . . . . . . . . . 38
FUTURES CONTRACTS . . . . . . . . . . . . . . . . . . . . 39
FUTURES, IN GENERAL. . . . . . . . . . . . . . . . . 39
FOREIGN CURRENCY FUTURES CONTRACTS.. . . . . . . . . 40
RISKS ASSOCIATED WITH FUTURES. . . . . . . . . . . . 40
SECURITIES INDEX FUTURES CONTRACTS. . . . . . . . . . . . 41
RISKS OF SECURITIES INDEX FUTURES. . . . . . . . . . 42
COMBINED TRANSACTIONS . . . . . . . . . . . . . 44
FIRM COMMITMENT AGREEMENTS AND WHEN-ISSUED SECURITIES . . 44
RESTRICTED AND ILLIQUID SECURITIES. . . . . . . . . . . . 44
BORROWING . . . . . . . . . . . . . . . . . . . . . . . . 45
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

INVESTMENT RESTRICTIONS. . . . . . . . . . . . . . . . . . . . 45

ADDITIONAL RESTRICTIONS. . . . . . . . . . . . . . . . . . . . 51

ADDITIONAL RIGHTS AND PRIVILEGES . . . . . . . . . . . . . . . 54
AUTOMATIC INVESTMENT METHOD . . . . . . . . . . . . . . . 54
EXCHANGE OF SHARES. . . . . . . . . . . . . . . . . . . . 55
INITIAL SALES CHARGE SHARES. . . . . . . . . . . . . 55
CONTINGENT DEFERRED SALES CHARGE SHARES. CLASS A . . 55
CLASS B. . . . . . . . . . . . . . . . . . . . . . . 55
CLASS C. . . . . . . . . . . . . . . . . . . . . . . 56
CLASS I. . . . . . . . . . . . . . . . . . . . . . . 56
ALL CLASSES. . . . . . . . . . . . . . . . . . . . . 56
LETTER OF INTENT. . . . . . . . . . . . . . . . . . . . . 57
RETIREMENT PLANS. . . . . . . . . . . . . . . . . . . . . 58
INDIVIDUAL RETIREMENT ACCOUNTS . . . . . . . . . . . 58
QUALIFIED PLANS. . . . . . . . . . . . . . . . . . . 60
DEFERRED COMPENSATION FOR PUBLIC SCHOOLS AND
CHARITABLE ORGANIZATIONS ("403(B)(7)
ACCOUNT") . . . . . . . . . . . . . . . . . . . 61
SIMPLIFIED EMPLOYEE PENSION ("SEP") IRAS . . . . . . 62
REINVESTMENT PRIVILEGE. . . . . . . . . . . . . . . . . . 62
RIGHTS OF ACCUMULATION. . . . . . . . . . . . . . . . . . 62
SYSTEMATIC WITHDRAWAL PLAN. . . . . . . . . . . . . . . . 63
GROUP SYSTEMATIC INVESTMENT PROGRAM . . . . . . . . . . . 64

BROKERAGE ALLOCATION . . . . . . . . . . . . . . . . . . . . . 65
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
PERSONAL INVESTMENTS BY EMPLOYEES OF IMI. . . . . . . . . 72

COMPENSATION TABLE . . . . . . . . . . . . . . . . . . . . . . 73

INVESTMENT ADVISORY AND OTHER SERVICES . . . . . . . . . . . . 75
BUSINESS MANAGEMENT AND INVESTMENT ADVISORY SERVICES. . . 75
SUBADVISORY CONTRACT - IVY INTERNATIONAL FUND . . . 79
DISTRIBUTION SERVICES . . . . . . . . . . . . . . . . . . 80
RULE 18F-3 PLAN. . . . . . . . . . . . . . . . . . . 84
RULE 12B-1 DISTRIBUTION PLANS. . . . . . . . . . . . 84

CUSTODIAN. . . . . . . . . . . . . . . . . . . . . . . . . . . 91
FUND ACCOUNTING SERVICES. . . . . . . . . . . . . . . . . 92
TRANSFER AGENT AND DIVIDEND PAYING AGENT. . . . . . . . . 93
ADMINISTRATOR . . . . . . . . . . . . . . . . . . . . . . 94
AUDITORS. . . . . . . . . . . . . . . . . . . . . . . . . 94

CAPITALIZATION AND VOTING RIGHTS . . . . . . . . . . . . . . . 94

NET ASSET VALUE. . . . . . . . . . . . . . . . . . . . . . . .101

PORTFOLIO TURNOVER . . . . . . . . . . . . . . . . . . . . . .103

REDEMPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . .103

CONVERSION OF CLASS B SHARES . . . . . . . . . . . . . . . . .105

TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . .105
OPTIONS, FUTURES AND FOREIGN CURRENCY FORWARD
CONTRACTS. . . . . . . . . . . . . . . . . . . . . .106
CURRENCY FLUCTUATIONS -- "SECTION 988" GAINS OR LOSSES
. . . . . . . . . . . . . . . . . . . . . . . . . .108
INVESTMENT IN PASSIVE FOREIGN INVESTMENT COMPANIES. . . .108
DEBT SECURITIES ACQUIRED AT A DISCOUNT. . . . . . . . . .109
DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . .110
DISPOSITION OF SHARES . . . . . . . . . . . . . . . . . .111
FOREIGN WITHHOLDING TAXES . . . . . . . . . . . . . . . .112
BACKUP WITHHOLDING. . . . . . . . . . . . . . . . . . . .113

PERFORMANCE INFORMATION. . . . . . . . . . . . . . . . . . . .113
AVERAGE ANNUAL TOTAL RETURN. . . . . . . . . . . . .114
CUMULATIVE TOTAL RETURN. . . . . . . . . . . . . . .127
OTHER QUOTATIONS, COMPARISONS AND GENERAL
INFORMATION . . . . . . . . . . . . . . . . . .133

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . .134

APPENDIX A
DESCRIPTION OF STANDARD & POOR'S CORPORATION ("S&P")
AND MOODY'S INVESTORS SERVICE, INC. ("MOODY'S")
CORPORATE BOND AND COMMERCIAL PAPER RATINGS . . . . . . .135

STATEMENT OF ASSETS AND LIABILITIES
AS OF APRIL 28, 1997 AND REPORT OF INDEPENDENT
ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . .153

APPENDIX C
SELECTED ECONOMIC AND MARKET DATA FOR ASIA PACIFIC AND
CHINA REGION COUNTRIES. . . . . . . . . . . . . . . . . .155

<PAGE>
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, 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
equivalent exposure 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, 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").

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 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, 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.

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.

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 equivalent exposure 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,
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 equivalent exposure
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 equivalent exposure 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,
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, 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 equivalent exposure
in such contracts does not exceed 20% of the value of its total
assets.

IVY INTERNATIONAL FUND II: The Fund's principal investment
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 overall portfolio
holdings. For temporary defensive purposes, the Fund may also
invest in equity securities principally traded in U.S. markets.
IMI, the Fund's investment manager, 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. IMI
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, considered by IMI 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
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 equivalent exposure in such contracts does not exceed
15% of its total assets.

IVY INTERNATIONAL FUND: Sales of shares of this Fund to new
investors have been 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, 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 equivalent exposure 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, 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
equivalent exposure 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.

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 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 equivalent exposure 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, 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 equivalent exposure in such contracts does not exceed
15% of its total assets.

Under normal circumstances, the Fund will invest at least
65% of its total assets in the equity securities of "European
companies," which include any issuer (a) that is organized under
the laws of a European country; (b) that derives 50% or more of
its total revenues from goods produced or sold, investments made
or services performed in Europe; or (c) for which the principal
trading market is in Europe. The Fund may also invest up to 35%
of its total assets in the equity securities of issuers domiciled
outside of Europe. The equity securities in which the Fund may
invest include common stock, preferred stock and common stock
equivalents such as warrants and convertible debt securities.
The Fund may also invest in sponsored or unsponsored ADRs,
European Depository Receipts ("EDRs"), GDRs, ADSs, European
Depository Shares ("EDSs") and GDSs. The Fund does not expect to
concentrate its investments in any particular industry.

The Fund may invest up to 35% of its net assets in debt
securities, but will not invest more than 20% of its net assets
in debt securities rated Ba or below by Moody's or BB or below by
S&P (commonly referred to as "high yield" or "junk" bonds), or if
unrated, considered by IMI to be of comparable quality. The
Fund may also purchase securities on a "when-issued" or firm
commitment basis, engage in foreign currency exchange
transactions and enter into forward foreign currency contracts.
In addition, the Fund may invest up to 5% of its net assets in
zero coupon bonds. The Fund may with approval of its Board of
Trustees (the "Trustees" or "Board"), but currently does not
intend to, lend portfolio securities.

For temporary defensive purposes or when IMI believes that
circumstances 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, considered by IMI to be of comparable quality),
warrants, and cash or cash equivalents such as domestic or
foreign bank obligations (including certificates of deposit, time
deposits and bankers' acceptances), short-term notes, repurchase
agreements, 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 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 equivalent exposure in such contracts does 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 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.

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.

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

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. 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

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 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

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 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. 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.)

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
security, 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).

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 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.

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 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

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 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.

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

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.

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

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.

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.

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

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.

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.

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.

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.

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 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).

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.

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.

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 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.

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 II, Ivy International
Fund, Ivy International Small Companies Fund, Ivy Latin America
Strategy Fund, Ivy New Century Fund and Ivy Pan-Europe 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, Ivy New
Century Fund and Ivy Pan-Europe 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 II,
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.

Further, as a matter of fundamental policy, each of Ivy
China Region Fund, Ivy Global Science & Technology Fund, Ivy
International Fund II, Ivy International Fund, Ivy Latin America
Strategy Fund and Ivy New Century Fund may not:

(i) 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, Ivy International Fund II, Ivy International
Small Companies Fund and Ivy Pan-Europe 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, Ivy
International Fund II, Ivy International Small
Companies Fund and Ivy Pan-Europe 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, Ivy
International Fund II, Ivy International Small
Companies Fund and Ivy Pan-Europe 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, Ivy International
Small Companies Fund and Ivy Pan-Europe 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, Ivy International Fund II, Ivy
International Small Companies Fund and Ivy Pan-Europe 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, Ivy
International Small Companies Fund and Ivy Pan-Europe 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 II, 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.

Each of Ivy China Region Fund, Ivy International Fund II,
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
China Region Fund, Ivy International Fund, Ivy Latin America
Strategy Fund and Ivy New Century Fund may not:

(i) sell securities short.

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 II and Ivy International 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); or

(ii)purchase the securities of any other open-end
investment company, except as part of a plan of merger
or consolidation.

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.

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 of the Fund's assets.

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, Ivy New Century Fund and
Ivy Pan-Europe 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 (except
for Ivy Pan-Europe 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 II, 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, Ivy New Century Fund and Ivy Pan-Europe 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 II, 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,
Ivy International Small Companies Fund and Ivy Pan-Europe 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, Ivy International Small Companies
Fund and Ivy Pan-Europe 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, Ivy
International Fund II, Ivy International Small Companies Fund and
Ivy Pan-Europe Fund may not:

(i) sell securities short, except for short sales "against
the box."

Further, as a matter of non-fundamental policy, each of Ivy
Asia Pacific Fund, Ivy Global Natural Resources Fund, Ivy
International Small Companies Fund and Ivy Pan-Europe 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 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, Ivy Pan-Europe Fund, Ivy
International Bond Fund, Ivy Bond Fund and Ivy Money Market Fund
(the other eight series of the Trust). Shareholders should
obtain a current prospectus before exercising any right or
privilege that may relate to these funds.

Effective April 18, 1997, 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. Once a shareholder's
account has been liquidated, the shareholder may not invest in
Ivy International Fund at a later date.

As of September 5, 1997, shares of the four funds that
comprise Mackenzie Series Trust (a separately registered
investment company formerly in the Ivy Mackenzie group of funds)
are no longer available for purchase or exchange.

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 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 Account Application.

EXCHANGE OF SHARES

As described in the Prospectus, shareholders of each Fund
have an exchange privilege with certain other Funds (except Ivy
International Fund unless they 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 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 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 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.

CLASS B: Class B shareholders may exchange their Class B
shares ("outstanding Class B shares") for Class B shares of
another 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.

Class B shares of a Fund acquired through an exchange of
Class B shares of another 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 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 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, Ivy International
Bond Fund, Ivy International Small Companies Fund, Ivy Latin
America Strategy Fund, Ivy New Century Fund and Ivy Pan-Europe
Fund:

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%

CLASS C: Class C shareholders may exchange their Class C
shares ("outstanding Class C shares") for Class C shares of
another 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: Subject to the restrictions set forth in the
following paragraph, Class I shareholders may exchange their
outstanding 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 value of shares which may be
exchanged into an Ivy fund in which shares are not already held
is $1,000 ($5,000,000 in the case of Class I shares of Ivy Global
Science & Technology Fund, Ivy International Fund, Ivy
International Fund II and Ivy International Small Companies Fund,
(generally referred to herein as the "Class I Funds")and $250,000
in the case of Ivy Bond Fund). 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 Ivy Fund 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 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

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, Ivy Pan-Europe
Fund, 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 and Ivy Bond Fund (and shares that have been
exchanged into Ivy Money Market Fund from any of the other funds
in the Ivy 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 of Ivy Fund 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 Ivy Fund, 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.

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.

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 of Ivy Fund
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.

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 of Ivy Fund
(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 and Ivy Pan-Europe Fund (and shares that
have been exchanged into Ivy Money Market Fund from any of the
other funds in the Ivy 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, Ivy Pan-Europe Fund; or $100,000
or more for Ivy Bond Fund or Ivy International Bond 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 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, or 10 years after the date of the initial
purchase by a participant under the Plan--the Plan will receive a
Plan level share conversion.

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, or for Ivy International Fund II or Ivy Pan-Europe Fund,
which did not commence operations until May 13, 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.<PAGE>
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
(1992-1997).

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 (1988-1997); 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
(1994-1997); 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
(1985-1997); 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 (1994-1997).
Age: 71

Michael G. Landry Trustee President, Chief Executive
700 South Federal Hwy. and Officer and Director of
Suite 300 Chairman Mackenzie Investment
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 (1987-1997);
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 (1985-1997); 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
(1992-1997).

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
(1996-1997); 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).

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
(1994-1997).

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.

<PAGE>
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 October 20, 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. <PAGE>
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, (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, and (vii) by the sole shareholder of each
of Ivy International Fund II and Ivy Pan-Europe Fund on April 30,
1997. 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, (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, (vii) on February 8, 1997 with respect to Ivy Pan-Europe
Fund, and (viii) on April 29, 1997 with respect to Ivy
International Fund II.

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 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, or for Ivy International Fund II or Ivy Pan-
Europe Fund, which commenced operations on May 13, 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% (1.50% in the
case of Ivy International Fund II) 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. The initial term of the Agreement between IMI and
each of Ivy International Fund II and Ivy Pan-Europe Fund, which
commenced on May 13, 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

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. At a meeting held on February 8, 1997,
the Board approved the Distribution Agreement on behalf of Ivy
Pan-Europe Fund. At a meeting held on April 29, 1997, the Board
approved the Distribution Agreement on behalf of Ivy
International Fund II. 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 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.

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 Latin America Strategy Fund $7,492, $65,204
and $60,552, respectively, in sales commissions, of which $1,071,
$8,435 and $10,392, respectively, was retained after dealers 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 Latin America
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, Ivy International Fund II, Ivy
International Small Companies Fund or Ivy Pan-Europe 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.

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. At a meeting held on
February 8, 1997, the Board adopted the Rule 18f-3 plan on behalf
of Ivy Pan-Europe Fund. At a meeting held on April 29, 1997, the
Board adopted the Rule 18f-3 plan on behalf of Ivy International
Fund II. 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 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.

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 (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.

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 IMDI $208, $2,637 and $7,251 ,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, 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, or Ivy International
Small Companies Fund, which commenced operations on January 1,
1997, or Ivy International Fund II or Ivy Pan-Europe Fund, which
commenced operations on May 13, 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, or with respect to Ivy International Fund II or Ivy Pan-
Europe Fund, which commenced operations on May 13, 1997.

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 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, or Ivy
International Fund II and Ivy Pan-Europe Fund, which commenced
operations on May 13, 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, or Ivy International Fund II or
Ivy Pan-Europe Fund, which commenced operations on May 13, 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, Ivy International Fund II, Ivy International Small
Companies Fund and Ivy Pan-Europe Fund had commenced operations.

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 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.

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 fund.
The Trustees have further authorized the issuance of Classes A, B
and C for 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, Ivy
International Bond Fund, Ivy Latin America Strategy Fund, Ivy
Money Market Fund, Ivy New Century Fund and Ivy Pan-Europe Fund,
as well as Class I shares for Ivy Bond Fund, Ivy Global Science &
Technology Fund, Ivy International Fund II, 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 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.

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 September 30, 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 (28.28%), Merill Lynch
Pierce Fenner & Smith, 4800 Deer Lake Drive East, 3rd Floor,
Jacksonville, FL 32246, owned of record 3,172.000 shares (6.93%),
and Wedbush Morgan Securities, 1000 Wilshire Blvd., Los Angeles,
CA 91208, owned of record 2,673.000 shares (5.84%); and except
that of the outstanding Class A shares of Ivy China Region Fund,
Resources Trust Company, P.O. Box 3865, Englewood, CO 80155-3865,
owned of record 231,878.862 shares (12.98%); and except that of
the outstanding Class A shares of Ivy Global Science & Technology
Fund, Donaldson Lufkin Jenrette Securities Corporation, Inc.,
P.O. Box 2052, Jersey City, NJ 07303-9998, owned of record
148,724.187 shares (20.74%); and except that at the outstanding
Class A shares of Ivy International Fund, Charles Schwab & Co.,
Inc., 101 Montgomery Street, San Francisco, CA 94104, owned of
record 15,854,513.288 shares (37.05%), and Merrill Lynch Pierce
Fenner & Smith, 4800 Deer Lake Drive East, 3rd Floor,
Jacksonville, FL 32246, owned of record 2,152,658.000 shares
(5.03%);and except that of the outstanding Class A shares of Ivy
International Fund II, Merrill Lynch Pierce Fenner & Smith, 4800
Deer Lake Drive East, 3rd Floor, Jacksonville, FL 32246, owned of
record 386,950.000 shares (27.84%), and Charles Schwab & Co.
Inc., 101 Montgomery Street, San Francisco, CA 94104, owned of
record 177,531.815 shares (12.77%); and except that of the
outstanding Class A shares of Ivy International Small Companies
Fund, Donaldson Lufkin Jenrette Securities Corporation, Inc.,
P.O. Box 2052, Jersey City, NJ 07303-9998, owned of record
26,599.450 shares (22.27%), Mackenzie Investment Management Inc.,
700 S. Federal Hwy., Suite 300, Boca Raton, FL,33432,owned of
record 10,001.000 shares (8.37%), and Merrill Lynch Pierce Fenner
& Smith, 4800 Deer Lake Drive East, 3rd Floor, Jacksonville, FL
32246, owned of record 6,484.000 shares (5.43%); and except that
of the outstanding Class A shares of Ivy Latin America Strategy
Fund, Donaldson Lufkin Jenrette Securities Corporation, Inc.,
P.O. Box 2052, Jersey City, NJ 07303-9998, owned of record
87,948.203 shares (15.25%), and Merrill Lynch Pierce Fenner &
Smith, 4800 Deer Lake Drive East, 3rd Floor, Jacksonville, FL
32246, owned of record 58,401.000 shares (10.13%); and except
that of the outstanding Class A shares of Ivy New Century Fund,
Charles Schwab & Co. Inc., 101 Montgomery Street, San Francisco,
CA 94104, owned of record 94,236.910 shares (6.28%); and except
that of the outstanding Class A shares of Ivy Pan-Europe Fund,
Mackenzie Investment Management Inc., 700 S. Federal Hwy. Suite
300, Boca Raton, FL 33432, owned of record 15,001.000 shares
(73.47%), and Resources Trust Company, P.O. Box 5900, Denver, CO
80217, owned of record 4,428.698 shares (21.69%).

To the knowledge of the Trust, as of September 30, 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 Asia Pacific Fund, Merrill Lynch Pierce
Fenner & Smith, 4800 Deer Lake Drive East, 3rd Floor,
Jacksonville, FL 32246, owned of record 44,345.000 shares
(69.58%), and Edward M. Kern & Gayla D. Kern TTEES, 2290 Montagne
Drive, Florissant, MO 63033, owned of record 3,803.298 shares
(5.96%); and except that of the outstanding Class B shares of Ivy
Bond Fund, Merrill Lynch Pierce Fenner & Smith, 4800 Deer Lake
Drive East, 3rd Floor, Jacksonville, FL 32246, owned of record
179,994.520 shares (17.47%); and except that of the outstanding
Class B shares of Ivy Canada Fund, Merrill Lynch Pierce Fenner &
Smith, 4800 Deer Lake Drive East, 3rd Floor, Jacksonville, FL
32246, owned of record 31,340.000 shares (14.39%), and JW Charles
Clearing Corp. FBO Joseph Zerger IRA, 1550 E. Oakland Park Blvd.,
Fort Lauderdale, FL 33334-4425, owned of record 14,588.638 shares
(6.70%); and except that of the outstanding Class B shares of Ivy
China Region Fund, Merrill Lynch Pierce Fenner & Smith, 4800 Deer
Lake Drive East, 3rd Floor, Jacksonville, FL 32246, owned of
record 113,303.000 shares (11.01%); and except that of the
outstanding Class B shares of Ivy Emerging Growth Fund, Merrill
Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive East, 3rd
Floor, Jacksonville, FL 32246, owned of record 315,393.000 shares
(17.72%); and except that of the outstanding Class B shares of
Ivy Global Fund, Merrill Lynch Pierce Fenner & Smith, 4800 Deer
Lake Drive East, 3rd Floor, Jacksonville, FL 32246, owned of
record 79,574.000 shares (8.65%); and except that of the
outstanding Class B shares of Ivy Global Natural Resources Fund,
Merrill Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive East,
3rd Floor, Jacksonville, FL 32246, owned of record 97,278.000
shares (38.06%); and except that of the outstanding Class B
shares of Ivy Growth Fund, IBT CUST IRA FBO Glenn E. Pattyson,
P.O. Box 11, Terrace Bay, Ontario, Canada, POT 2W0, owned of
record 16,058.530 shares (7.17%); and except that of the
outstanding Class B shares of Ivy International Fund, Merrill
Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive East, 3rd
Floor, Jacksonville, FL 32246, owned of record 6,824,811.000
shares (46.42%); and except that of the outstanding Class B
shares of Ivy International Fund II, Merrill Lynch Pierce Fenner
& Smith, 4800 Deer Lake Drive East, 3rd Floor, Jacksonville, FL
32246, owned of record 2,978,451.050 shares (65.23%); and except
that of the outstanding Class B shares of Ivy International Small
Companies Fund, Merrill Lynch Pierce Fenner & Smith, 4800 Deer
Lake Drive East, 3rd Floor, Jacksonville, FL 32246, owned of
record 27,529.000 shares (28.18%), and Painewebber FBO Rockingham
Newspapers, Inc., 1050 Wildcrest Drive, Houston, TX 77042, owned
of record 11,451.000 shares (11.72%); and except that 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, FL 32246, owned of record 122,615.000
shares (33.98%), and Donaldson Lufkin Jenrette Securities
Corporation Inc., P.O. Box 2052, Jersey City, NJ 07303, owned of
record 24,270.747 shares (6.72%); and except that of the
outstanding Class B shares of Ivy Money Market Fund, Molly
Kaufman, TTEE, 19987 Moran Lane, Saratoga, CA 95070, owned of
record 278,684.220 shares (12.89%), Painewebber, 2030 Fransworth
Drive, Nashville, TN 37205, owned of record 126,516.230 shares
(5.85%), and Smith Barney, Inc., 388 Greenwich Street, New York,
NY 10013, owned of record 121,470.440 shares (5.62%); and except
that of the outstanding Class B shares of Ivy New Century Fund,
Merrill Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive East,
3rd Floor, Jacksonville, FL 32246, owned of record 442,486.000
shares (34.38%); and except that of the outstanding Class B
shares of Ivy Pan-Europe Fund, Charles Kraft & Florence Kraft
TTEES, 11605 NE 36th Court, Vancouver, WA 98686, owned of record
616.740 shares (69.78%), and Rose M. Novak & Martin T Novak, 2009
Ardin Drive, Jeffersonville, PA 19403, owned of record 267.058
shares (30.21%).

To the knowledge of the Trust, as of September 30, 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 Asia Pacific Fund, The Ohio Company FBO
Mansbach, G., 155 East Broad Street, Columbus, KY 41105, owned of
record 24,390.244 shares (80.02%), and Merrill Lynch Pierce
Fenner & Smith, 4800 Deer Lake Drive East, 3rd Floor,
Jacksonville, FL 32246, owned of record 2,479.000 shares (8.19%);
and except that of the outstanding Class C shares of Ivy Bond
Fund, Merrill Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive
East, 3rd Floor, Jacksonville, FL 32246, owned of record
131,013.000 shares (47.60%), and CTY Carbonic Sales and SVC,
Inc., Louis Morgan, P.O. Box 25842, Oklahoma City, OK 73125,
owned of record 18,618.307 shares (6.76%); and except that of the
outstanding Class C shares of Ivy Canada Fund, Francisco
Rodriguez Carreras & Louis Rodriguez Aguilar, c/o Zarlene
Imports, 1550 E. Oakland Park Blvd., Fort Lauderdale, FL 33334-
4425, owned of record 30,731.72 shares (54.11%), Merrill Lynch
Pierce Fenner & Smith, 4800 Deer Lake Drive East, 3rd Floor,
Jacksonville, FL 32246, owned of record 12,181.000 shares
(21.45%), 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 (6.58%); and except that of the
outstanding Class C shares of Ivy China Region Fund, Merrill
Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive East, 3rd
Floor, Jacksonville, FL 32246, owned of record 33,344.000 shares
(28.77%), and The Ohio Company FBO Gerald Mansbach, 155 E. Broad
Street, Columbus, OH 43215, owned of record 26,790.606 shares
(23.12%); and except that of the outstanding Class C shares of
Ivy Emerging Growth Fund, Merrill Lynch Pierce Fenner & Smith,
4800 Deer Lake Drive East, 3rd Floor, Jacksonville, FL 32246,
owned of record 113,748.000 shares (31.38%); and except that of
the outstanding Class C shares of Ivy Global Fund, The Ohio
Company FBO, Mansbach G, 155 E. Broad Street, Columbus, OH 43215,
owned of record 19,409.938 shares (29.78%), and Merrill Lynch
Pierce Fenner & Smith, 4800 Deer Lake Drive East, 3rd Floor,
Jacksonville, FL 32246, owned of record 12,345.000 shares
(18.94%), Painewebber, FBO Regina J. Nolan, 1021 St. Gregory
Street, Cincinnati, OH 45202, owned of record 4,629.630 shares
(7.10%), Linda Powers Kunze and Tod John Kunze, 10214 Old
Orchard, Brecksville, OH 44141, owned of record 3,742.515 shares
(5.74%), and Smith Barney,Inc., 388 Greenwich Street, New York,
NY 10013, owned of record 3,371.185 shares (5.17%); and except
that of the outstanding Class C shares of Ivy Global Natural
Resources Fund, Merrill Lynch Pierce Fenner & Smith, 4800 Deer
Lake Drive East, 3rd Floor, Jacksonville, FL 32246, owned of
record 4,504.000 shares (46.08%), Painewebber FBO John L.
Hammons, P.O. Box 3321, Weehawken, NJ 07087-8154, owned of record
1,014.370 shares (10.37%), and Anthony L. Bassano & Marie E.
Bassano, 8934 Bari Court, Port Richey, FL 34668, owned of record
922.509 shares (9.43%), and The Ohio Company, FBO H.M. Miller,
155 E. Broad Street, Columbus, OH 45429, owned of record 516.796
shares (5.28%); and except that of the outstanding Class C shares
of Ivy Global Science & Technology Fund, Merrill Lynch Pierce
Fenner & Smith, 4800 Deer Lake Drive East, 3rd Floor,
Jacksonville, FL 32246, owned of record 30,407.000 shares
(8.45%); and except that of the outstanding Class C shares of Ivy
Growth Fund, Merrill Lynch Pierce Fenner & Smith, 4800 Deer Lake
Drive East, 3rd Floor, Jacksonville, FL 32246, owned of record
2,484.000 shares (36.29%), Rafter L. Cattle Co., HCR 77 #441,
Uvalde, TX 78801, owned of record 2,460.130 shares (35.94%),
Martin S. Sawyer & Ruth C. Sawyer TTEE, 2301 Fremont Drive,
Sarasota, FL 34238-3016, owned of record 506.023 shares (7.39%),
and Painewebber FBO William G. Thomas, P.O. Box 3321, Weehawken,
NJ 07087-8154, owned of record 389.000 shares (5.68%); and except
that of the outstanding Class C shares of Ivy Growth With Income
Fund, Merrill Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive
East, 3rd Floor, Jacksonville, FL 32246, owned of record
3,389.000 shares (16.38%), Anthony L. Bassano & Marie E. Bassano,
8934 Bari Court, Port Richie, FL 34668, owned of record 2,842.845
shares (13.74%), IBT CUST IRA FBO Vytautas Snieckus, 1250 E.
276th Street, Euclid, OH 44132, owned of record 2,349.000 shares
(11.35%), IBT CUST 403(B) FBO Carol E. Greivell, 8629 N. Servite
#109, Milwaukee, WI 53223, owned of record 1,872.713 shares
(9.05%), Donaldson Lufkin Jenrette Securities Corporation Inc.,
P.O. Box 2052, Jersey City, NJ 07303-9998, owned of record
1,476.436 shares (7.13%), IBT CUST 403(B) FBO Helen Jankowski,
41993 VIA Renate, Temecula, CA 92591, owned of record 1,253.543
shares (6.05%), and Marsha L. Yarbrough, RT 2 Box 548, West
Blocton, AL 36184, owned of record 1,238.917 shares (5.98%); and
except that of the outstanding Class C shares of Ivy
International Fund, Merrill Lynch Pierce Fenner & Smith, 4800
Deer Lake Drive East, 3rd Floor, Jacksonville, FL 32246, owned of
record 2,961,991.000 shares (65.74%); and except that of the
outstanding Class C shares of Ivy International Fund II, Merrill
Lynch Pierce Fenner & Smith, 4800 Deer Lake Drive East, 3rd
Floor, Jacksonville, FL 32246, owned of record 1,906,033.000
shares (69.71%); and except that of the outstanding Class C
shares of Ivy International Small Companies Fund, Merrill Lynch
Pierce Fenner & Smith, 4800 Deer Lake Drive East, 3rd Floor,
Jacksonville, FL 32246, owned of record 130,453.000 shares
(71.53%), and The Ohio Company, FBO Gerald Mansbach, 155 E. Broad
Street, Columbus, OH 43215, owned of record 24,727.992 shares
(13.55%); and except that 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, FL
32246, owned of record 35,640.000 shares (67.86%), and Donaldson
Lufkin Jenrette Securities Corporation Inc., P.O. Box 2052,
Jersey City, NJ 07303, owned of record 2,956.167 shares (5.62%);
and except that of the outstanding Class C shares of Ivy Money
Market Fund, IBT CUST IRA FBO Randall Schlagel, 3619 Pauly Lane,
St. Bonifacious, MN 55375, owned of record 15,238.030 shares
(33.95%), IBT CUST IRA FBO David J. Esler, 160 Arrowhead #3,
Mukwonago, WI 53149, owned of record 8,015.010 shares (17.85%),
Lori K. Murphy, 2340 A. North 70th Street, Wauwatosa, WI 53213,
owned of record 6,331.460 shares (14.10%), Stanley M. Collum &
Linda F. Collum, 4817 Wolf Lane, Yukon, OK 73099, owned of record
3,737.310 shares (8.32%), Louisa Z. Bradley, 2500 N. Glade Suite
102, Bethany, OK 73009-4921, owned of record 3,028.920 shares
(6.74%), and Varghese Pallath & Susamma Pallath, 431 Wildrose
Avenue, Bergenfield, NJ 07621-3411, owned of record 2,585.900
shares (5.76%); and except that of the outstanding Class C shares
of Ivy New Century Fund, Merrill Lynch Pierce Fenner & Smith,
4800 Deer Lake Drive East, 3rd Floor, Jacksonville, FL 32246,
owned of record 114,395.000 shares (29.95%).

To the knowledge of the Trust, as of September 30, 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 Ave, Kalamazoo, MI 49009, owned of
record 446,603.062 shares (16.15%), Lynspen and Company, 420
North 20th Street, Birmingham, AL 35203, owned of record
324,765.135 shares (11.74%), State Street Bank TTEE FBO Allison
Engines, 200 Newport Ave, 7th Floor, North Quincy, MA 02171,
owned of record 283,870.900 shares (10.26%), Enele Co. FBO
Washington State Power Co., 1211 SW 5th Avenue, Suite 1900,
Portland, OR 97204, owned of record 226,137.319 shares (8.17%),
Vernat Company, P.O. Box 669, Rutland, VT 05702, owned of record
223,837.824 shares (8.09%), David & Co., P.O. Box 188,
Murfreesboro, TN 37133-0188, owned of record 172,479.335 shares
(6.23%), and S. Mark Taper Foundation, 12011 San Vicente Blvd.,
Suite 400, Los Angeles, CA 90049, owned of record 153,271.003
shares (5.54%).

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 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.

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, Presidents' 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.

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.

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.

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) for taxable years
beginning before 1998, 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).

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

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.

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.

Notwithstanding any of the foregoing, a Fund may recognize
gain (but not loss) from a constructive sale of certain
"appreciated financial positions" if the Fund enters into a short
sale, offsetting notional principal contract, futures or forward
contract transaction with respect to the appreciated position or
substantially identical property. Appreciated financial
positions subject to this constructive sale treatment are
interests (including options, futures and forward contracts and
short sales) in stock, partnership interests, certain actively
traded trust instruments and certain debt instruments.
Constructive sale treatment of appreciated financial positions
does not apply to certain transactions closed in the 90-day
period ending with the 30th day after the close of a Fund's
taxable year, if certain conditions are met.

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. A Fund may elect to mark to market
its PFIC shares, resulting in the shares being treated as sold at
fair market value on the last business day of each taxable year.
Any resulting gain would be reported as ordinary income; any
resulting loss and any loss from an actual disposition of the
shares would be reported as ordinary loss to the extent of any
net gains reported in prior years. Under another 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.

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.

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.

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, if so, may be eligible for
reduced federal tax rates, 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.

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.

Generally, except in the case of certain electing individual
taxpayers who have limited creditable foreign taxes and no
foreign source income other than passive investment-type income,
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.
Furthermore, the foreign tax credit is eliminated with respect to
foreign taxes withheld on dividends if the dividend-paying shares
of the shares of the Fund are held by the Fund or the
shareholder, as the case may be, for less than 16 days (46 days
in the case of preferred shares) during the 30-day period (90-day
period for preferred shares) beginning 15 days (45 days for
preferred shares) before the shares become ex-dividend.

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

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.

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% 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%.

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 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, or for Ivy International Fund II
and Ivy Pan-Europe Fund, which commenced operations on May 13,
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.

[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.)

[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%.

[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.

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 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.

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 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.

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

Each Fund's Portfolio of Investments as of December 31,
1996, Statement of Assets and Liabilities as of December 31,
1996, Statement 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), Statement 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 Report
of Independent Accountants, which are included in the Fund's
December 31, 1996 Annual Report to shareholders, are incorporated
by reference into this SAI. See the Prospectus for the interim
unaudited financial information for each of Ivy International
Fund II and Ivy Pan-Europe Fund. 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 incorporated by
reference into this SAI. The Statement of Assets and Liabilities
for each of Ivy International Fund II and Ivy Pan-Europe Fund as
of April 28, 1997 and the Notes thereto are attached hereto as
Appendix B. Also included in Appendix B are the Statements of
Assets and Liabilities as of September 30, 1997, the Statements
of Operations for the Period from May 13, 1997 (commencement of
operations) to September 30, 1997, the Statements of Changes in
Net Assets for the Period from May 13, 1997 (commencement of
operations) to September 30, 1997 for each of Ivy International
Fund II and Ivy Pan-Europe Fund and the Notes thereto.

In addition, each Fund's Portfolio of Investments as of June
30, 1997, Statement of Assets and Liabilities as of June 30,
1997, Statement of Operations for the six months ended June 30,
1997 (for the period from May 13, 1997 (commencement of
operations) through June 30, 1997 for both Ivy International Fund
II and Ivy Pan-Europe Fund), Financial Highlights and Notes to
Financial Statements, which are included in the Fund's June 30,
1997 Semi-Annual Reports to shareholders, are incorporated by
reference into this SAI. <PAGE>
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. <PAGE>

APPENDIX B

IVY INTERNATIONAL FUND II
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997 (UNAUDITED)

ASSETS
Investments, at value (identified cost -
$84,291,471) $84,638,131
Cash 4,599,599
Receivables
Fund shares sold 1,517,196
Dividends and interest 132,410
Manager for expense reimbursement 19,029
Deferred organization expense 59,987
Other assets 2,553
-----------
Total assets 90,968,905
===========

LIABILITIES
Payables
Open forward foreign currency contracts 163,281
Investments purchased 1,418,015
Fund shares repurchased 14,740
Management fee 64,879
12b-1 service and distribution fees 60,290
Other payables to related parties 23,228
Accrued expenses (10,950)
-----------
Total liabilities 1,733,483
-----------
NET ASSETS $89,235,422
============

CLASS A
Net asset value and redemption price per share
$14,275,063/1,398,879 shares outstanding) $10.20
============

Maximum offering price per share
($10.20 x 100/94.25)* $10.82
============

CLASS B
Net asset value, offering price, and redemption price**
per share ($46,927,031/4,611,758 shares outstanding) $10.18
============

CLASS C
Net asset value, offering price, and redemption price***
per share ($28,033,328/2,755,249 shares outstanding) $10.17
============

CLASS I
Net asset value, offering price, and redemption price
per share ($0/0 shares outstanding) $ - - -
===========

NET ASSETS CONSIST OF
Capital paid-in $88,915,563
Undistributed net realized gain on investments and
foreign currency transactions 188,666
Undistributed net investment income (52,299)
Net unrealized appreciation (depreciation) on
Investments and foreign currency transactions 346,773
Forward foreign currency contracts (163,281)
-----------
NET ASSETS $89,235,422
===========

*On sales of more than $50,000 the offering price is reduced.
**Subject to a maximum contingent deferred sales charge of 5%.
***Subject to a maximum contingent deferred sales charge of 1%.

(See Notes to Financial Statements)

<PAGE>
IVY INTERNATIONAL FUND II
Notes to Financial Statements (Unaudited)

Ivy International Fund II (the 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.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with
generally accepted accounting principles. Preparation of the
financial statements includes the use of management estimates.
Actual results could differ from those estimates.

SECURITY VALUATION - Securities traded on a U.S. or foreign
stock exchange, or the National Association of Securities Dealers
Automated Quotation ("NASDAQ") System, are valued at the last
quoted sale price reported as of the close of regular trading on
the exchange the security is traded most extensively. If there
is no such sale, the security is valued at the calculated mean
between the last bid and asked price on the exchange. Securities
not traded on an exchange or NASDAQ, but traded in another over-
the-counter market are valued at the average between the current
bid and asked prices in such markets. Short-term obligations and
commercial paper are valued at amortized cost, which approximates
market. Debt securities (other than short-term obligations and
commercial paper) are valued on the basis of valuations furnished
by a pricing service authorized by the Board of Trustees (the
Board), which determines valuations based upon market
transactions for normal, institutional-size trading units of such
securities. For valuation purposes, quotations of foreign
securities in foreign currencies are translated into U.S. dollar
equivalents using the foreign exchange quotation in effect. All
other securities are valued at their fair value as determined in
good faith by the Valuation Committee of the Board; as of
September 30, 1997, there were no such securities.

SECURITY TRANSACTIONS AND INVESTMENT INCOME - Security
transactions are accounted for on the trade date. Dividend income
is recorded on the ex-dividend date, and interest income is
accrued on a daily basis. Realized gains and losses from security
transactions are calculated on an identified cost basis.

FEDERAL INCOME TAXES - The Fund intends to qualify for tax
treatment applicable to regulated investment companies under the
Internal Revenue Code, as amended, and distribute all of its
taxable income to its shareholders. Therefore, no provision has
been recorded for Federal income or excise taxes.

DISTRIBUTIONS TO SHAREHOLDERS - Distributions from net
investment income and net realized capital gains, if any, are
declared in December.

FOREIGN CURRENCY TRANSLATIONS - Foreign currency
transactions from foreign investment activity are translated into
U.S. dollars on the following basis: (i) market value of
securities, and dividends and interest receivable are translated
at the closing daily rate of exchange; and, (ii) purchases and
sales of investment securities are translated at the rate at
which related foreign contracts are obtained or at the exchange
rate prevailing on the date of the transaction. Exchange gains or
losses from currency translation of other assets and liabilities,
if significant, are reported as a separate component of Net
realized and unrealized gain (loss) on investment transactions.
Section 988 of the Internal Revenue Code provides that gains
and losses on certain transactions attributable to fluctuations
in foreign currency exchange rates must be treated as ordinary
income or loss. Accordingly, distributions for financial
statement purposes may differ from the characterization of such
distributions determined on a Federal income tax basis.

FORWARD FOREIGN CURRENCY CONTRACTS - Forward foreign
currency contracts may be entered into for purposes of hedging
specific securities denominated in foreign currencies. Forward
contracts are marked to market daily, and the change in market
value is recorded by the Fund as an unrealized gain or loss.
When the contract is closed, the Fund records a realized gain or
loss equal to the difference between the value of the contract at
the time it was opened and the value at the time it was closed.
The Fund could be exposed to risk if the counter parties are
unable to meet the terms of the contracts.

DEFERRED ORGANIZATION EXPENSES - Expenses incurred by the
Fund in connection with its organization have been deferred and
are being amortized on a straight-line basis over a five year
period.

RECLASSIFICATIONS - The timing and characterization of
certain income and net capital gain distributions are determined
annually in accordance with Federal tax regulations which may
differ from generally accepted accounting principles. These
differences primarily relate to investments in foreign
denominated securities, passive foreign investment companies, and
certain securities sold at a loss. As a result, Net investment
income (loss) and Net realized gain (loss) on investments and
foreign currency transactions for a reporting period may differ
significantly in amount and character from distributions during
such period. Accordingly, the Fund may make reclassifications
among certain of its capital accounts without impacting the net
asset value of the Fund.

2. RELATED PARTIES

Ivy Management, Inc. (IMI) is the Manager and Investment
Adviser of the Fund. For its services, IMI receives a fee monthly
at the annual rate of 1.00% of the Fund's average net assets.

Currently, IMI voluntarily limits the Fund's total operating
expenses (excluding taxes, 12b-1 fees, brokerage commissions,
interest, litigation and indemnification expenses, and other
extraordinary expenses). The voluntary expense limitation may be
terminated or revised at any time.

Mackenzie Investment Management Inc. (MIMI), of which IMI is
a wholly owned subsidiary, provides certain administrative,
accounting and pricing services for the Fund. For those services,
the Fund pays MIMI fees plus certain out-of-pocket expenses. Such
fees and expenses are reflected as Administrative services fee
and Fund accounting in the Statement of Operations.

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. From May
13, 1997 (commencement) to September 30, 1997, the net amount of
underwriting discount retained by IMDI was $48709.

Under Service and Distribution Plans, the Fund reimburses
IMDI for service fee payments made to brokers at an annual rate
not to exceed .25% of its average net assets, excluding Class I.
Class B and Class C shares are also subject to an ongoing
distribution fee at an annual rate of .75% of the average net
asset value attributable to Class B and Class C shares. IMDI may
use such distribution fee for purposes of advertising and
marketing shares of the Fund. Such fees of $7,483, $19,253 and
$52,239, for Class A, Class B and Class C, respectively, are
reflected as 12b-1 service and distribution fees in the Statement
of Operations.

Ivy Mackenzie Services Corp. (IMSC), a wholly owned
subsidiary of MIMI, is the transfer and shareholder servicing
agent for the Fund. For those services, the Fund pays a monthly
fee plus certain out-of-pocket expenses. Such fees and expenses
of $5,196, $18,085, $9,938 and $0, for Class A, Class B, Class C
and Class I, respectively, are reflected as Transfer agent in the
Statement of Operations.

3. BOARD'S COMPENSATION

Trustees who are not affiliated with IMI or MIMI receive
compensation from the Fund, which is reflected as Trustees' fees
in the Statement of Operations.

4. FUND SHARE TRANSACTIONS

Fund share transactions from May 13, 1997 (commencement) to
September 30, 1997, for Class A, Class B, Class C and Class I
were as follows:

CLASS A SHARES AMOUNT
Sold . . . . . . . . . . . . . . . 1,508,488 $15,273,082
Repurchased. . . . . . . . . . . . (109,609) (1,103,929)
--------- -----------
Net increase . . . . . . . . . . . 1,398,879 14,169,153
========= ===========

CLASS B SHARES AMOUNT
Sold . . . . . . . . . . . . . . . 4,703,765 $47,738,699
Repurchased. . . . . . . . . . . . (92,007) (920,638)
--------- ------------
Net increase . . . . . . . . . . . 4,611,758 $46,818,061
========= ===========

CLASS C SHARES AMOUNT
Sold . . . . . . . . . . . . . . . 2,813,376 $28,512,230
Repurchased. . . . . . . . . . . . (58,127) (583,881)
--------- -----------
Net increase . . . . . . . . . . . 2,755,249 $27,928,349
========= ===========

CLASS I SHARES AMOUNT
Sold . . . . . . . . . . . . . . . 1 $10
Repurchased. . . . . . . . . . . . (1) (10)
--------- ----------
Net increase . . . . . . . . . . . - - - $ - - -
========== ==========<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
AS OF APRIL 28, 1997
AND REPORT OF INDEPENDENT ACCOUNTANTS
_________________________________________________________________
IVY INTERNATIONAL FUND II
STATEMENT OF ASSETS AND LIABILITIES
APRIL 28, 1997
_________________________________________________________________

ASSETS
Cash . . . . . . . . . . . . . . . . . $ 40
Deferred organization expenses . . . . 25,725
Prepaid blue sky fees. . . . . . . . . 37,020
-------
Total Assets. . . . . . . . . . . . 62,785
-------
LIABILITIES
Due to affiliate . . . . . . . . . . . $62,745
-------

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 and
offering price per share
($10 / 1 share outstanding)** . . . $ 10.00
=======

NET ASSETS CONSIST 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)<PAGE>
__________________________________________________ IVY
INTERNATIONAL FUND II
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
April 28, 1997
_________________________________________________________________

1. ORGANIZATION: Ivy International Fund II is a 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 a diversified,
open-end management investment company.

The Fund will commence operations on May 13, 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 May 13,
1997, the commencement date of operations. Blue sky fees are
being amortized over a one year period from May 13, 1997. Such
organizational expenses 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 1.50% of its average net assets.

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.

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.<PAGE>
IVY PAN-EUROPE FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997 (UNAUDITED)

ASSETS
Investments, at value (identified cost - $206,268) $229,465
Cash 3,258
Receivables
Dividends and interest 684
Manager for expense reimbursement 5,806
Deferred organization expenses 58,759
Other assets 472
---------
Total assets 298,444
---------
LIABILITIES
Payables
Management fee 185
12b-1 service and distribution fees 49
Other payables to related parties 1,296
Accrued expenses 62,089
---------
Total liabilities 63,619
---------
NET ASSETS $ 234,825
=========

CLASS A
Net asset value and redemption price per share
($231,793/20,417 shares outstanding) $11.35
=========

Maximum offering price per share
($11.35 x 100/94.25)* $12.04
=========

CLASS B
Net asset value, offering price and redemption price**
per share ($3,032/267 shares outstanding) $11.36
=========

CLASS C
Net asset value, offering price and redemption price***
per share ($0/0 shares outstanding) $ - - -
=========

NET ASSETS CONSIST OF
Capital paid-in $210,390
Undistributed net realized gain on investments and
foreign currency transactions 231
Undistributed net investment income 1,028
Net unrealized appreciation on investments and
foreign currency transactions 23,176
---------
NET ASSETS $ 234,825
=========

*On sales of more than $50,000 the offering price is reduced.
**Subject to a maximum contingent deferred sales charge of 5%.
***Subject to a maximum contingent deferred sales charge of 1%.

(See Notes to Financial Statements)<PAGE>
IVY PAN-EUROPE FUND
Notes to Financial Statements (Unaudited)

Ivy Pan-Europe Fund (the 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.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Security Valuation - Securities traded on a U.S. or foreign
stock exchange, or the National Association of Securities Dealers
Automated Quotation ("NASDAQ") System, are valued at the last
quoted sale price reported as of the close of regular trading on
the exchange the security is traded most extensively. If there
is no such sale, the security is valued at the calculated mean
between the last bid and asked price on the exchange. Securities
not traded on an exchange or NASDAQ, but traded in another over-
the-counter market are valued at the average between the current
bid and asked prices in such markets. Short-term obligations and
commercial paper are valued at amortized cost, which approximates
market. Debt securities (other than short-term obligations and
commercial paper) are valued on the basis of valuations furnished
by a pricing service authorized by the Board of Trustees (the
Board), which determines valuations based upon market
transactions for normal, institutional-size trading units of such
securities. For valuation purposes, quotations of foreign
securities in foreign currencies are translated into U.S. dollar
equivalents using the foreign exchange quotation in effect. All
other securities are valued at their fair value as determined in
good faith by the Valuation Committee of the Board; as of
September 30, 1997, there were no such securities.

Security Transactions and Investment Income - Security
transactions are accounted for on the trade date. Dividend income
is recorded on the ex-dividend date, and interest income is
accrued on a daily basis. Realized gains and losses from security
transactions are calculated on an identified cost basis.

Federal Income Taxes - The Fund intends to qualify for tax
treatment applicable to regulated investment companies under the
Internal Revenue Code, as amended, and distribute all of its
taxable income to its shareholders. Therefore, no provision has
been recorded for Federal income or excise taxes.

Distributions to Shareholders - Distributions from net
investment income and net realized capital gains, if any, are
declared in December.

Foreign Currency Translations - Foreign currency
transactions from foreign investment activity are translated into
U.S. dollars on the following basis: (i) market value of
securities, and dividends and interest receivable are translated
at the closing daily rate of exchange; and, (ii) purchases and
sales of investment securities are translated at the rate at
which related foreign contracts are obtained or at the exchange
rate prevailing on the date of the transaction. Exchange gains or
losses from currency translation of other assets and liabilities,
if significant, are reported as a separate component of Net
realized and unrealized gain (loss) on investment transactions.
Section 988 of the Internal Revenue Code provides that gains
and losses on certain transactions attributable to fluctuations
in foreign currency exchange rates must be treated as ordinary
income or loss. Accordingly, distributions for financial
statement purposes may differ from the characterization of such
distributions determined on a Federal income tax basis.

Deferred Organization Expenses - Expenses incurred by the
Fund in connection with its organization have been deferred and
will be amortized on a straight-line basis for a period not to
exceed five years.

Reclassifications - The timing and characterization of
certain income and net capital gain distributions are determined
annually in accordance with Federal tax regulations which may
differ from generally accepted accounting principles. These
differences primarily relate to investments in foreign
denominated securities, passive foreign investment companies, and
certain securities sold at a loss. As a result, Net investment
income (loss) and Net realized gain (loss) on investments and
foreign currency transactions for a reporting period may differ
significantly in amount and character from distributions during
such period. Accordingly, the Fund may make reclassifications
among certain of its capital accounts without impacting the net
asset value of the Fund.

2. RELATED PARTIES

Ivy Management, Inc. (IMI) is the Manager and Investment
Adviser of the Fund. For its services, IMI receives a fee monthly
at the annual rate of 1.00% of the Fund's average net assets.

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. From May
13, 1997 (Commencement) to September 30, 1997, the net amount of
underwriting discount retained by IMDI was $379.

Under Service and Distribution Plans, the Fund reimburses
IMDI for service fee payments made to brokers at an annual rate
not to exceed .25% of its average net asset value. Class B and
Class C shares are also subject to an ongoing distribution fee at
an annual rate of .75% of the average net asset value
attributable to Class B and Class C shares. IMDI may use such
distribution fee for purposes of advertising and marketing shares
of the Fund. Such fees of $173, $1 and $0, for Class A, Class B
and Class C, respectively, are reflected as 12b-1 service and
distribution fees in the Statement of Operations.

Ivy Mackenzie Services Corp. (IMSC), a wholly owned
subsidiary of MIMI, is the transfer and shareholder servicing
agent for the Fund. For those services, the Fund pays a monthly
fee plus certain out-of-pocket expenses. Such fees and expenses
of $270, $0 and $0, for Class A, Class B and Class C,
respectively, are reflected as Transfer agent in the Statement of
Operations.

3. BOARD'S COMPENSATION

Trustees who are not affiliated with IMI or MIMI receive
compensation from the Fund, which is reflected as Trustees' fees
in the Statement of Operations.

4. FUND SHARE TRANSACTIONS

Fund share transactions from May 13, 1997 (commencement) to
September 30, 1997, for Class A, Class B and Class C were as
follows:

Class A SHARES AMOUNT
Sold . . . . . . . . . . . . . . . 20,589 $ 209,333
Repurchased. . . . . . . . . . . . (172) (1,846)
--------- ---------
Net increase . . . . . . . . . . . 20,417 $ 207,487
========= =========

Class B SHARES AMOUNT
Sold . . . . . . . . . . . . . . . 268 $ 2,913
Repurchased. . . . . . . . . . . . (1) (10)
--------- ---------
Net increase . . . . . . . . . . . 267 $ 2,903
========= =========

Class C SHARES AMOUNT
Sold . . . . . . . . . . . . . . . 1 $10
Repurchased. . . . . . . . . . . . (1) (10)
--------- ---------Net
increase . . . . . . . . . . . - - - $ - - -
========= =========<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
AS OF APRIL 28, 1997
AND
REPORT OF INDEPENDENT ACCOUNTANTS
_________________________________________________________________
IVY PAN-EUROPE FUND
STATEMENT OF ASSETS AND LIABILITIES
April 28, 1997
_________________________________________________________________

ASSETS
Cash . . . . . . . . . . . . . . . . . $ 30
Deferred organization expenses . . . . 22,404
Prepaid blue sky fees. . . . . . . . . 36,335
-------
Total Assets. . . . . . . . . . . . 58,789
-------
LIABILITIES
Due to affiliate . . . . . . . . . . . $58,759
-------

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 CONSIST OF:
Capital paid-in. . . . . . . . . . . . $ 30
=======

IVY PAN-EUROPE FUND
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
April 28, 1997
_________________________________________________________________

1. ORGANIZATION: Ivy Pan-Europe Fund is a 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 a diversified, open-end management investment
company.

2. ORGANIZATION COSTS AND PREPAID BLUE SKY FEES: Organization
expenses are being amortized over a five year period from May 13,
1997, the commencement date of operations. Blue sky fees ar being
amortized over a one year period from May 13, 1997. Such
organizational expenses and blue sky fees have been paid by MIMI
and will be reimbursed by the Fund.

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.

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.

PART C. OTHER INFORMATION

Item 24: Financial Statements and Exhibits

(a) Financial Statements:

- Included in Part A:

Financial Highlights for Ivy Fund comprising:

(1) Ivy Asia Pacific Fund, Class A, B and C shares, for
the period from January 1, 1997 (commencement of
operations) to June 30, 1997;

(2) Ivy Canada Fund, Class A shares, for the period
from November 18, 1987 (commencement of operations) to
October 31, 1988; for the next two years ended October
31, 1990; for the eight months ended June 30, 1991; for
the next three years ended June 30, 1994; for the six
months ended December 31, 1994; for the next two years
ended December 31, 1996; and for the six months ended
June 30, 1997; Ivy Canada Fund, Class B shares, for the
period from April 1, 1994 (commencement) to June 30,
1994; for the six months ended December 31, 1994; for
the next two years ended December 31, 1996; and for the
six months ended June 30, 1997; Ivy Canada Fund, Class
C shares, for the period from April 30, 1996
(commencement) to December 31, 1996; and for the six
months ended June 30, 1997;

(3) Ivy China Region Fund, Class A and B shares, for
the period from October 23, 1993 (commencement of
operations) to December 31, 1993; the next three years
ended December 31, 1996; and for the six months ended
June 30, 1997; Ivy China Region Fund, Class C shares,
for the period from April 30, 1996 (commencement) to
December 31, 1996; and for the six months ended June
30, 1997;

(4) Ivy Global Fund, Class A shares, for the period
from April 18, 1991 (commencement of operations) to
June 30, 1991; for the next three years ended June 30,
1994; for the six months ended December 31, 1994; for
the next two years ended December 31, 1996; and for the
six months ended June 30, 1997; Ivy Global Fund, Class
B shares, for the period from April 1, 1994
(commencement) to June 30, 1994; for the six months
ended December 31, 1994; for the next two years ended
December 31, 1996; and for the six months ended June
30, 1997; Ivy Global Fund, Class C shares, for the
period from April 30, 1996 (commencement) to December
31, 1996; and for the six months ended June 30, 1997;

(5) Ivy Global Natural Resources Fund, Class A, B and
C shares, for the period from January 1, 1997
(commencement of operations) to June 30, 1997;

(6) Ivy Global Science & Technology Fund, Class A, B
and C shares, for the period from July 22, 1996
(commencement of operations) to December 31, 1996; and
for the six months ended June 30, 1997;

(7) Ivy International Fund, Class A shares, for the
ten years ended December 31, 1996; and for the six
months ended June 30, 1997; Ivy International Fund,
Class B shares, for the period from October 23, 1993
(commencement of operations) to December 31, 1993; for
the next three years ended December 31, 1996; and for
the six months ended June 30, 1997; Ivy International
Fund, Class C shares, for the period from April 30,
1996 (commencement) to December 31, 1996; and for the
six months ended June 30, 1997; Ivy International Fund,
Class I shares, for the period from October 6, 1994
(commencement) to December 31, 1994; for the next two
years ended December 31, 1996; and for the six months
ended June 30, 1997;

(8) Ivy International Fund II, Class A, B and C
shares, for the period from May 13, 1997 (commencement
of operations) to June 30, 1997; and for the period
from May 13, 1997 (commencement of operations) to
September 30, 1997;

(9) Ivy International Small Companies Fund, Class A, B
and C shares, for the period from January 1, 1997
(commencement of operations) to June 30, 1997;

(10) Ivy Latin America Strategy Fund, Class A and B
shares, for the period from November 1, 1994
(commencement of operations) to December 31, 1994; for
the next two years ended December 31, 1996; and for the
six months ended June 30, 1997; Ivy Latin America
Strategy Fund, Class C shares, for the period from
April 30, 1996 (commencement) to December 31, 1996; and
for the six months ended June 30, 1997;

(11) Ivy New Century Fund, Class A and B shares, for
the period from November 1, 1994 (commencement of
operations) to December 31, 1994; for the next two
years ended December 31, 1996; and for the six months
ended June 30, 1997; Ivy New Century Fund, Class C
shares, for the period from April 30, 1996
(commencement) to December 31, 1996; and for the six
months ended June 30, 1997; and

(12) Ivy Pan-Europe Fund, Class A shares, for the
period from May 13, 1997 (commencement of operations)
to June 30, 1997; and for the period from May 13, 1997
(commencement of operations) to September 30, 1997; Ivy
Pan-Europe Fund, Class B shares, for the period from
September 18, 1997 (initial sale) to September 30,
1997.

- Included in Part B:

- For Ivy International Fund II: Statement of
Assets and Liabilities as of April 28, 1997
and Related Notes to Financial Statements;and
- Statement of Assets and Liabilities as of
September 30, 1997
- Statement of Operations for the Period from
May 13, 1997 (commencement of operations) to
September 30, 1997
- Statement of Changes in Net Assets for the
Period from May 13, 1997 (commencement of
operations) to September 30, 1997
- Notes to Financial Statements

- For Ivy Pan-Europe Fund: Statement of Assets
and Liabilities as of April 28, 1997 and
Related Notes to Financial Statements;and
- Statement of Assets and Liabilities as of
September 30, 1997
- Statement of Operations for the Period from
May 13, 1997 (commencement of operations) to
September 30, 1997
- Statement of Changes in Net Assets for the
Period from May 13, 1997 (commencement of
operations) to September 30, 1997
- Notes to Financial Statements

- Incorporated by reference in Part B:

June 30, 1997 Semi-Annual Report to Shareholders
of Ivy Asia Pacific Fund (Unaudited):
- Portfolio of Investments at June 30, 1997
- Statement of Assets and Liabilities as of
June 30, 1997
- Statement of Operations for the Six Months
Ended June 30, 1997
- Statement of Changes in Net Assets for the
Six Months Ended June 30, 1997
- Financial Highlights
- Notes to Financial Statements

Statement of Assets and Liabilities as of December
10, 1996 and Related Notes of Ivy Asia Pacific
Fund:

- Report of Independent Accountants

June 30, 1997 Semi-Annual Report to Shareholders
of Ivy Canada Fund (Unaudited):
- Portfolio of Investments at June 30, 1997
- Statement of Assets and Liabilities as of
June 30, 1997
- Statement of Operations for the Six Months
Ended June 30, 1997
- Statement of Changes in Net Assets
- Financial Highlights
- Notes to Financial Statements

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

June 30, 1997 Semi-Annual Report to Shareholders
of Ivy China Region Fund (Unaudited):
- Portfolio of Investments at June 30, 1997
- Statement of Assets and Liabilities as of
June 30, 1997
- Statement of Operations for the Six Months
Ended June 30, 1997
- Statement of Changes in Net Assets
- Financial Highlights
- Notes to Financial Statements

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

June 30, 1997 Semi-Annual Report to Shareholders
of Ivy Global Fund (Unaudited):
- Portfolio of Investments at June 30, 1997
- Statement of Assets and Liabilities as of
June 30, 1997
- Statement of Operations for the Six Months
Ended June 30, 1997
- Statement of Changes in Net Assets
- Financial Highlights
- Notes to Financial Statements

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

June 30, 1997 Semi-Annual Report to Shareholders
of Ivy Global Natural Resources Fund (Unaudited):
- Portfolio of Investments at June 30, 1997
- Statement of Assets and Liabilities as of
June 30, 1997
- Statement of Operations for the Six Months
Ended June 30, 1997
- Statement of Changes in Net Assets for the
Six Months Ended June 30, 1997
- Financial Highlights
- Notes to Financial Statements

Statement of Assets and Liabilities as of December
10, 1996 and Related Notes of Ivy Global Natural
Resources Fund:

- Report of Independent Accountants

June 30, 1997 Semi-Annual Report to Shareholders
of Ivy Global Science & Technology Fund
(Unaudited):
- Portfolio of Investments at June 30, 1997
- Statement of Assets and Liabilities as of
June 30, 1997
- Statement of Operations for the Six Months
Ended June 30, 1997
- Statement of Changes in Net Assets
- Financial Highlights
- Notes to Financial Statements

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

June 30, 1997 Semi-Annual Report to
Shareholders of Ivy International Fund II
(Unaudited):
- Portfolio of Investments at June 30, 1997
- Statement of Assets and Liabilities as of
June 30, 1997
- Statement of Operations for the Period From
May 13, 1997 (Commencement) to June 30, 1997
- Statement of Changes in Net Assets for Period
From May 13, 1997 (Commencement) to June 30,
1997
- Financial Highlights
- Notes to Financial Statements

Statement of Assets and Liabilities as of April
28, 1997 and Related Notes of Ivy International
Fund II

- Report of Independent Accountants

June 30, 1997 Semi-Annual Report to Shareholders
of Ivy International Fund (Unaudited):
- Portfolio of Investments at June 30, 1997
- Statement of Assets and Liabilities as of
June 30, 1997
- Statement of Operations for the Six Months
Ended June 30, 1997
- Statement of Changes in Net Assets
- Financial Highlights
- Notes to Financial Statements

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

June 30, 1997 Semi-Annual Report to Shareholders
of Ivy International Small Companies
Fund(Unaudited):
- Portfolio of Investments at June 30, 1997
- Statement of Assets and Liabilities as of
June 30, 1997
- Statement of Operations for the Six Months
Ended June 30, 1997
- Statement of Changes in Net Assets for the
Six Months Ended June 30, 1997
- Financial Highlights
- Notes to Financial Statements

Statement of Assets and Liabilities as of December
10, 1996 and Related Notes of Ivy International
Small Companies Fund:

- Report of Independent Accountants

June 30, 1997 Semi-Annual Report to Shareholders
of Ivy Latin America Strategy Fund (Unaudited):
- Portfolio of Investments at June 30, 1997
- Statement of Assets and Liabilities as of
June 30, 1997
- Statement of Operations for the Six Months
Ended June 30, 1997
- Statement of Changes in Net Assets
- Financial Highlights
- Notes to Financial Statements

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

June 30, 1997 Semi-Annual Report to Shareholders
of Ivy New Century Fund (Unaudited):
- Portfolio of Investments at June 30, 1997
- Statement of Assets and Liabilities as of
June 30, 1997
- Statement of Operations for the Six Months
Ended June 30, 1997
- Statement of Changes in Net Assets
- Financial Highlights
- Notes to Financial Statements

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

June 30, 1997 Semi-Annual Report to Shareholders
of Ivy Pan-Europe Fund (Unaudited):
- Portfolio of Investments at June 30, 1997
- Statement of Assets and Liabilities as of
June 30, 1997
- Statement of Operations for the Period From
May 13, 1997 (Commencement) to June 30, 1997
- Statement of Changes in Net Assets for Period
From May 13, 1997 (Commencement) to June 30,
1997
- Financial Highlights
- Notes to Financial Statements

Statement of Assets and Liabilities as of April
28, 1997 and Related Notes of Ivy Pan-Europe Fund

- 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.

(c) Amendment to Amended and Restated Declaration
of Trust, filed with Post-Effective Amendment
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.

(s) Establishment and designation of Series and
Classes (Ivy International Fund II--Class A,
Class B, Class C and Class I), filed with
Post-Effective Amendment No. 94 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.

(q) Form of Supplement to Master Business
Management and Investment Advisory Agreement
between Ivy Fund and Ivy Management, Inc.
(Ivy Pan-Europe Fund), filed with Post-
Effective Amendment No. 94 to Registration
Statement No. 2-17613 and incorporated by
reference herein.

(r) Form of Supplement to Master Business
Management and Investment Advisory Agreement
between Ivy Fund and Ivy Management, Inc.
(Ivy International Fund II), filed with Post-
Effective Amendment No. 94 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.

(h) Form of Addendum to Amended and Restated
Distribution Agreement (Ivy Pan-Europe Fund--
Class A, Class B and Class C), filed with
Post-Effective Amendment No. 94 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(i) Form of Addendum to Amended and Restated
Distribution Agreement (Ivy International
Fund II--Class A, Class B, Class C and Class
I), filed with Post-Effective Amendment No.
94 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.

(dd) Form of Administrative Services Agreement
Supplement for Ivy Pan-Europe Fund, filed
with Post-Effective Amendment No. 94 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(ee) Form of Fund Accounting Services Agreement
Supplement for Ivy Pan-Europe Fund, filed
with Post-Effective Amendment No. 94 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(ff) Form of Addendum to Transfer Agency and
Shareholder Services Agreement for Ivy Pan-
Europe Fund, filed with Post-Effective
Amendment No. 94 to Registration Statement
No. 2-17613 and incorporated by reference
herein.

(gg) Form of Administrative Services Agreement
Supplement for Ivy International Fund II,
filed with Post-Effective Amendment No. 94 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(hh) Form of Fund Accounting Services Agreement
Supplement for Ivy International Fund II,
filed with Post-Effective Amendment No. 94 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(ii) Form of Addendum to Transfer Agency and
Shareholder Services Agreement for Ivy
International Fund II, filed with Post-
Effective Amendment No. 94 to Registration
Statement No. 2-17613 and incorporated by
reference herein.

10. Opinion and Consent of Dechert Price & Rhoads,
filed herewith.

11. (a) Consents of Coopers & Lybrand L.L.P., filed
herewith.

(b) Reports of Coopers & Lybrand L.L.P., filed
herewith.

12. Not applicable.

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.

(q) Form of Supplement to Master Amended and
Restated Distribution Plan for Ivy Fund Class
A Shares (Ivy Pan-Europe Fund), filed with
Post-Effective Amendment No. 94 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(r) Form of Supplement to Distribution Plan for
Ivy Fund Class B Shares (Ivy Pan-Europe
Fund), filed with Post-Effective Amendment
No. 94 to Registration Statement No. 2-17613
and incorporated by reference herein.

(s) Form of Supplement to Distribution Plan for
Ivy Fund Class C Shares (Ivy Pan-Europe
Fund), filed with Post-Effective Amendment
No. 94 to Registration Statement No. 2-17613
and incorporated by reference herein.

(t) Form of Supplement to Master Amended and
Restated Distribution Plan for Ivy Fund Class
A Shares (Ivy International Fund II), filed
with Post-Effective Amendment No. 94 to
Registration Statement No. 2-17613 and
incorporated by reference herein.

(u) Form of Supplement to Distribution Plan for
Ivy Fund Class B Shares (Ivy International
Fund II), filed with Post-Effective Amendment
No. 94 to Registration Statement No. 2-17613
and incorporated by reference herein.

(v) Form of Supplement to Distribution Plan for
Ivy Fund Class C Shares (Ivy International
Fund II), filed with Post-Effective Amendment
No. 94 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. 95 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.

(f) Form of Amended and Restated Plan adopted
pursuant to Rule 18f-3 under the Investment
Company Act of 1940, filed with this Post-
Effective Amendment No. 94 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 9/30/97 Class A 54
Fund Class B 27
Class C 8

Ivy Bond Fund 9/30/97 Class A 4,593
Class B 398
Class C 73
Class I 0

Ivy Canada Fund 9/30/97 Class A 1,866
Class B 160
Class C 23

Ivy China Region 9/30/97 Class A 2,113
Class B 1,173
Class C 78

Ivy Emerging 9/30/97 Class A 5,786
Growth Fund Class B 3,830
Class C 416

Ivy Global Fund 9/30/97 Class A 1,556
Class B 847
Class C 38

Ivy Global Natural 9/30/97 Class A 266
Resources Fund Class B 165
Class C 12

Ivy Global Science 9/30/97 Class A 810
& Technology Fund Class B 684
Class C 346
Class I 0

Ivy Growth Fund 9/30/97 Class A 28,329
Class B 308
Class C 12

Ivy Growth with 9/30/97 Class A 6,006
Income Fund Class B 1,207
Class C 22
Class D 0

Ivy International 9/30/97 Class A 29,237
Fund Class B 21,844
Class C 3,651
Class I 409

Ivy International 9/30/97 Class A 786
Fund II Class B 1,391
Class C 429
Class I 0

Ivy International 9/30/97 Class A 0
Bond Fund Class B 0
Class C 0

Ivy International 9/30/97 Class A 113
Small Companies Fund Class B 73
Class C 31
Class I 0

Ivy Latin America 9/30/97 Class A 430
Strategy Fund Class B 245
Class C 20

Ivy Money Market 9/30/97 Class A 2,319
Fund Class B 128
Class C 12

Ivy New Century 9/30/97 Class A 1,084
Fund Class B 838
Class C 245

Ivy Pan-Europe 9/30/97 Class A 5
Fund Class B 2
Class C 0
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. 95 to its Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Post-Effective Amendment No. 95 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-eighth day of
October, 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. 95 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 10/28/97
Chairman (Chief
Executive Officer)

JOHN S. ANDEREGG, JR.* Trustee 10/28/97

PAUL H. BROYHILL* Trustee 10/28/97

STANLEY CHANNICK* Trustee 10/28/97

FRANK W. DEFRIECE, JR.* Trustee 10/28/97

ROY J. GLAUBER* Trustee 10/28/97

KEITH J. CARLSON*# Trustee and 10/28/97
President

JOSEPH G. ROSENTHAL* Trustee 10/28/97

RICHARD N. SILVERMAN* Trustee 10/28/97

J. BRENDAN SWAN* Trustee 10/28/97

C. WILLIAM FERRIS* Secretary/Treasurer 10/28/97
(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(a) Consents of Coopers & Lybrand L.L.P.

11(b) Reports 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

October 28, 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
prospectus contained in Post-Effective Amendment No. 95 to the
Trust's registration statement relating to the shares of
beneficial interest 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 Fund II, Ivy International Fund, Ivy International
Small Companies Fund, Ivy Latin America Strategy Fund, Ivy New
Century Fund and Ivy Pan-Europe Fund (the "Shares") being filed
under the Securities Act of 1933, as amended (File No.
2-17613)("Post-Effective Amendment No. 95"). 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 Prospectus 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. 95.

Very truly yours,

DECHERT PRICE & RHOADS

EXHIBIT 11(A)

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. 95 to the Registration Statement on Form
N-1A (File No. 2-17613, hereafter the "Registration Statement")
of Ivy Fund of our reports dated May 1, 1997 on our audits of the
Statements of Assets and Liabilities as of April 28, 1997 of Ivy
International Fund II, and Ivy Pan-Europe 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
October 28, 1997<PAGE>
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. 95 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 International Fund, Ivy Global Science and
Technology Fund, Ivy Latin America 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. 95 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
October 28, 1997<PAGE>
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. 95 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
October 28, 1997

EXHIBIT 11(B)

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<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of
Ivy Canada 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. 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.

COOPERS & LYBRAND L.L.P.

Fort Lauderdale, Florida
February 14, 1997<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of
Ivy China Region 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 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.

COOPERS & LYBRAND L.L.P.

Fort Lauderdale, Florida
February 14, 1997<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of
Ivy Global 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 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.

COOPERS & LYBRAND L.L.P.

Fort Lauderdale, Florida
February 14, 1997<PAGE>
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<PAGE>
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.

COOPERS & LYBRAND L.L.P.

Fort Lauderdale, Florida
February 14, 1997<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of
Ivy International Fund II (the Fund)

We have audited the accompanying Statement of Assets and
Liabilities of the Fund as of April 28, 1997. 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.

In our opinion, the financial statement referred to above
presents fairly, in all material respects, the financial position
of the Fund as of April 28, 1997, in conformity with generally
accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Fort Lauderdale, Florida
May 1, 1997<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of
Ivy International 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 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.

COOPERS & LYBRAND L.L.P.

Fort Lauderdale, Florida
February 14, 1997<PAGE>
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<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of
Ivy Latin America Strategy Fund (the Fund)

COOPERS & LYBRAND L.L.P.

Fort Lauderdale, Florida
February 14, 1997<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of
Ivy New Century 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 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.

COOPERS & LYBRAND L.L.P.

Fort Lauderdale, Florida
February 14, 1997<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of
Ivy Pan-Europe Fund (the Fund)

In our opinion, the financial statement referred to above present
fairly, in all material respects, the financial position of the
Fund as of April 28, 1997, in conformity with generally accepted
accounting principles.

COOPERS & LYBRAND L.L.P.

Fort Lauderdale, Florida
May 1, 1997

<ARTICLE> 6
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<NAME> IVY PAN-EUROPE FUND CLASS A

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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> MAY-13-1997
<PERIOD-END> SEP-30-1997
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<INVESTMENTS-AT-VALUE> 229465
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<ARTICLE> 6
<SERIES>
<NUMBER> 192
<NAME> IVY PAN-EUROPE FUND CLASS B

<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> MAY-13-1997
<PERIOD-END> SEP-30-1997
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<OVERDISTRIBUTION-GAINS> 0
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<EXPENSES-NET> 1525
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<REALIZED-GAINS-CURRENT> 231
<APPREC-INCREASE-CURRENT> 23176
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<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 268
<NUMBER-OF-SHARES-REDEEMED> 1
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 267
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 693
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 24317
<AVERAGE-NET-ASSETS> 179369
<PER-SHARE-NAV-BEGIN> 10.95
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> .39
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.35
<EXPENSE-RATIO> 2.81
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 181
<NAME> IVY INTERNATIONAL FUND II CLASS A

<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> MAY-13-1997
<PERIOD-END> SEP-30-1997
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<INVESTMENTS-AT-VALUE> 84638131
<RECEIVABLES> 1668635
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<OTHER-ITEMS-ASSETS> 4659586
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<OTHER-ITEMS-LIABILITIES> 315468
<TOTAL-LIABILITIES> 1733483
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 88915563
<SHARES-COMMON-STOCK> 1398879
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (52299)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 188666
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 183492
<NET-ASSETS> 89235422
<DIVIDEND-INCOME> 289839
<INTEREST-INCOME> 68943
<OTHER-INCOME> 0
<EXPENSES-NET> 411081
<NET-INVESTMENT-INCOME> (52299)
<REALIZED-GAINS-CURRENT> 188666
<APPREC-INCREASE-CURRENT> 183492
<NET-CHANGE-FROM-OPS> 319859
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1508488
<NUMBER-OF-SHARES-REDEEMED> 109609
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1398879
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-EXPENSE> 448057
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<PER-SHARE-NAV-BEGIN> 10.01
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> .16
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.20
<EXPENSE-RATIO> 1.74
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 182
<NAME> IVY INTERNATIONAL FUND II CLASS B

<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> MAY-13-1997
<PERIOD-END> SEP-30-1997
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<INVESTMENTS-AT-VALUE> 84638131
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<OTHER-ITEMS-ASSETS> 4659586
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<DIVIDEND-INCOME> 289839
<INTEREST-INCOME> 68943
<OTHER-INCOME> 0
<EXPENSES-NET> 411081
<NET-INVESTMENT-INCOME> (52299)
<REALIZED-GAINS-CURRENT> 188666
<APPREC-INCREASE-CURRENT> 183492
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<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 4703765
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<GROSS-EXPENSE> 448057
<AVERAGE-NET-ASSETS> 44893257
<PER-SHARE-NAV-BEGIN> 10.01
<PER-SHARE-NII> (.04)
<PER-SHARE-GAIN-APPREC> .21
<PER-SHARE-DIVIDEND> 0
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<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.18
<EXPENSE-RATIO> 2.51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<SERIES>
<NUMBER> 183
<NAME> IVY INTERNATIONAL FUND II CLASS C

<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> MAY-13-1997
<PERIOD-END> SEP-30-1997
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<INTEREST-INCOME> 68943
<OTHER-INCOME> 0
<EXPENSES-NET> 411081
<NET-INVESTMENT-INCOME> (52299)
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<NUMBER-OF-SHARES-REDEEMED> 58127
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<EXPENSE-RATIO> 2.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0000052858
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<SERIES>
<NUMBER> 031
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<MULTIPLIER> 1
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<S> <C>
<PERIOD-TYPE> 6-MOS
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<ARTICLE> 6
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<MULTIPLIER> 1
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<S> <C>
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