Ivy Funds Adds New Choices for Global Real Estate Investors
Ivy Funds Adds New Choices for Global Real Estate Investors
Introduces Ivy Global Real Estate Fund and Ivy Global Risk-Managed Real Estate Fund
OVERLAND PARK, Kan.--(BUSINESS WIRE)-- Effective today, Ivy Funds launches two new global funds to help investors and financial advisors pursue the potential opportunities of investment in real estate securities: Ivy Global Real Estate Fund and Ivy Global Risk-Managed Real Estate Fund.
Ivy Global Real Estate Fund will seek to provide total return through long-term capital appreciation and current income. The Fund is anticipated to maintain a risk profile similar to that of the broader global real estate securities market. The Fund typically will invest in the equity securities of companies in both core property sectors (such as office, retail, multi-family or industrial), and specialty sectors (such as hotel, home building or other real estate). The Fund will invest in securities offered by companies active in real estate ownership, development, and investment management.
Ivy Global Risk-Managed Real Estate Fund also seeks to provide total return through long-term capital appreciation and current income. The Fund is anticipated to pursue a lower risk profile than the broader global real estate securities market. The investment team will seek to manage risk by focusing on the securities of companies they consider to have lower leverage, lower business risk and/or lower-risk property types. Typical investments will focus on companies investing in the core property sectors. The risk-screening process represents an important difference between the two Funds. The portfolio management team generally will exclude companies from the investment universe that:
- have high financial leverage (greater than 45-50%);
- have substantial exposure to what are considered non-core asset types (such as hotels and home-building companies);
- have significant exposure to non-earning assets;
- have significant exposure to ancillary activities such as merchant building or investment management.
The new Ivy Funds seek to provide investors with exposure to high-quality, professionally managed global real estate with the added potential benefit of active management that seeks to identify securities offering an attractive combination of risk and return.
The new funds are subadvised by LaSalle Investment Management Securities, a well-known real estate securities investment manager.
"The global real estate sector provides investors another avenue to pursue diversification and income potential," said Thomas W. Butch, president and CEO of Ivy Funds Distributor, Inc. "Part of our ongoing strategy is to ensure that Ivy Funds continue to offer a range of options that best align with investor needs. With LaSalle, we're fortunate to partner with one of the foremost names in global real estate securities in support of this objective."
There is recent evidence of strong investor interest in this asset class. Open-end real estate fund flows in 2012 of $15 billion were nearly double those of 2011, and in just the first two months of 2013 they reached $6.5 billion, surpassing flows for the entire year of 2010, according to data from SimFunds.
Both funds will invest primarily in the equities and equity-related securities of global real estate companies, including real estate investment trusts (REITs) and real estate operating companies (REOCs). They typically will invest at least 80% of net assets in the real estate or real estate-related industries, and will not invest directly in real estate. The Funds typically will invest at least 40% of total assets in securities of issuers outside the U.S.
Keith Pauley CFA, Managing Director and CIO at LaSalle, said, "We are excited to join forces with Ivy Funds to provide investors with new choices to participate in the growing global real estate securities markets. Real estate securities are an efficient way for investors to participate in global real estate. The new funds will provide investors alternative strategies for participating in global real estate based on their risk and return objectives."
Among other potential benefits, real estate securities can provide additional diversification in a portfolio because they are not highly correlated with other global asset classes. They also can provide another choice for investors seeking income from their investments, especially in the current environment of historically low interest rates.
The portfolio management team includes Mr. Pauley, who has 27 years in the industry and 27 years with the firm; Stanley J. Kraska, Jr., 27 years in the industry and 25 years with the firm; George J. Noon, CFA, 25 years in the industry and 23 years with the firm; and Ernst-Jan de Leeuw, based in Amsterdam, who has 17 years in the industry and 12 years with the firm.
LaSalle was established in 1985 and is one of the most experienced investors in real estate securities. Based in Baltimore, MD, LaSalle has nearly 60 employees based there and in regional investment and analytical offices located in Amsterdam and Hong Kong. It has $10 billion of assets under management in listed real estate securities (as of Jan. 31, 2013) and is affiliated with LaSalle Investment Management, one of the leading institutional investors in real estate worldwide. Both are part of Jones Lang LaSalle (NYS: JLL) . With more than 45,000 employees operating in 1,000 locations across 70 countries, Jones Lang LaSalle focuses solely on real estate and is one of the world's largest property services companies.
Ivy Funds, with approximately $53 billion in total assets under management at Dec. 31, 2012, offers a broad fund lineup covering all major asset categories, including international and domestic equity funds, specialty funds, fixed income funds and money market funds.
Ivy Funds Distributor, Inc. is an affiliate of Waddell & Reed Financial, Inc. (NYS: WDR) . Through its subsidiaries, Waddell & Reed Financial, Inc. provides investment management and financial planning services to clients throughout the United States. The firm had total assets under management of approximately $96 billion at Dec. 31, 2012. Ivy Investment Management Company serves as investment advisor to the Ivy Funds. Ivy Funds Distributor, Inc. serves as principal underwriter and distributor to the Ivy Funds.
Investors should consider the investment objectives, risks, charges and expenses of a fund carefully before investing. For a prospectus, or if available, a summary prospectus, containing this and other information for any of the Ivy Funds, call your financial advisor or visitwww.ivyfunds.com. Please read the prospectus or summary prospectus carefully before investing.
Past performance is not a guarantee of future results. Diversification does not guarantee a profit or protect against loss in a declining market. It is a method to manage risk.
Risk factors. As with any mutual fund, the value of the Funds' shares will change, and you could lose money on your investment. Investment risks associated with investing in real estate securities, in addition to other risks, include rental income fluctuation, depreciation, property tax value changes and differences in real estate market values. Because the Funds invest more than 25% of their total assets in the real estate industry, the Funds may be more susceptible to a single economic, regulatory, or technical occurrence than a fund that does not concentrate its investments in this industry. International investing involves additional risks, including currency fluctuations, political or economic conditions affecting the foreign country, and differences in accounting standards and foreign regulations. These risks are magnified in emerging markets. The Funds are non-diversified, meaning that they may invest a significant portion of their total assets in a limited number of issuers, and a decline in value of those investments would cause the Fund's overall value to decline greater than that of a more diversified portfolio. Regarding Ivy Global Risk-Managed Real Estate Fund, there is no guarantee that the fund will not decline in value in comparison with funds that do not use a risk-managed approach. These and other risks are more fully described in the Funds' prospectus. Not all funds or fund classes may be offered at all broker/dealers.
The Funds are subadvised by LaSalle Investment Management Securities, LLC, which delegates to its affiliate, LaSalle Investment Management Securities, B.V., for portfolio management responsibilities of the Funds' assets allocated to European investments. References to LaSalle include both entities.
Ivy Funds Distributor, Inc. PRI10607 (04/13)
Ivy Funds Distributor, Inc.
Roger Hoadley, 913-236-1993
VP, Director of Communications
KEYWORDS: United States North America Kansas
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