Correspondence 0001137439-24-000639 from IVY FUNDS (CIK 0000883622)
IVY FUNDS (CIK 0000883622)
Date: Feb. 23, 2024 · CIK: 0000883622 · Accession: 0001137439-24-000639
AI Filing Summary & Sentiment
File numbers found in text: 333-276569, 333-276570, 333-276571
Letter
100 F Street, NE Washington, DC 20549 Subject: Filing on Form N-14 for Ivy Funds (File No. 333-276571), Delaware Group Adviser Funds (File No. 333-276569), and Delaware Group Equity Funds II (File No. 333-276570)
Dear Mr. Zapata, Ms. Stojic, and Mr. Manion:
On behalf of Ivy Funds, Delaware Group Adviser Funds, and Delaware Group Equity Funds II (each, a "Registrant" and collectively, the “Registrant”), submitted herewith under the EDGAR system, are the responses to the comments of the staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”) that you communicated with regard to the Registrant’s Proxy Statement/Prospectus Form N-14 (the “Proxy Statement/Prospectus”). The Proxy Statement/Prospectus was filed by each Registrant as part of the proposed Reorganization of the series of each Registrant detailed on Appendix A.
Each comment from the Staff is summarized below, followed by the Registrant’s response to the comment. Terms not defined herein shall have the meaning set forth for that term in the Proxy Statement/Prospectus.
Accounting Comments
1.
Comment: On pages i to ii of the Proxy Statement/Prospectus, please confirm that each Reorganization is included in the table.
Response: The Registrant confirms that all Reorganizations will be disclosed in the table and the requested changes will be made.
2.
Comment: On page 6 of the Proxy Statement/Prospectus, please ensure that the most recent prospectus for each Fund is included (with corresponding hyperlink).
Response: The requested changes will be made.
3.
Comment: Please confirm the most recent fee and expense information for the Funds has been used to prepare the fee and expense tables.
Response: The Registrant confirms that the fee and expense tables included in the Proxy Statement/Prospectus reflect the most recent fee and expense information for the Funds.
4.
Comment: For each Reorganization, with the exception of the Reorganization of the Delaware Global Equity Fund and the Delaware Global Equity Fund II into the Delaware Ivy Global Growth Fund, the pro forma other expenses are increasing relative to the current Acquiring Fund other expenses. Please explain supplementally in correspondence why the estimated other expenses are increasing, given the increased scale of the combined Acquiring Fund following the Reorganization.
Response: The Registrant notes that the pro forma numbers represent what the Registrant expects to be accruing at the time of each Reorganization based on an annual accrual, and therefore, because the pro forma numbers are as of the anticipated date of the close of each Reorganization, the other expenses differ from those of the Acquiring Fund prior to the Reorganization.
5.
Comment: For the Reorganizations of (1) Delaware Global Equity Fund and Delaware Global Equity Fund II into Delaware Ivy Global Growth Fund, (2) Delaware International Equity Fund and Delaware International Equity Fund II into Delaware Ivy International Core Equity Fund, and (3) Delaware Ivy Core Bond Fund into Delaware Diversified Income Fund, the total annual fund operating expenses for certain classes of certain Funds do not align with the total annual fund expenses in the Fund’s financial highlights. Please explain supplementally in correspondence the reason for any differences.
Response: The Registrant notes that for the impacted classes of the above-referenced Funds each experienced a change in their expense cap during their prior fiscal period as disclosed in the most recent shareholder report, and therefore the total annual fund expenses in the Funds’ financial highlights do not reflect the revised expense caps for the entire period.
6.
Comment: Under the question “How will the Reorganizations affect Fund fees and expenses?” on page 10 of the Proxy Statement/Prospectus, the disclosure notes that “Management has implemented a voluntary fee waiver to reduce the gross expenses of each Acquiring Fund as detailed in the tables below.” The fee tables show contractual fee waivers. Please clarify this language.
Response: The requested changes will be made. The Registrant confirms that the waivers are contractual.
7.
Comment: In the section “Who manages the Funds?” beginning on page 114 of the Proxy Statement/Prospectus, please update the references to the shareholder reports in which the discussion of the basis for the Board’s approval of the applicable Fund’s investment advisory contract is available to reflect the October and November 2023 fiscal periods.
Response: The requested changes will be made.
8.
Comment: Please add the financial highlights for the fiscal year ending November 30, as applicable.
Response: The financial highlights will be updated as requested.
9.
Comment: Please add a hyperlink from the fee table for each Reorganization to the expense example for the corresponding Reorganization.
Response: The requested changes will be made.
10.
Comment: Please confirm the waiver period following the Reorganization of Delaware Ivy Core Bond Fund into Delaware Diversified Income Fund.
Response: The waiver period has been updated to reflect a period of one year from the close of the Reorganization.
11.
Comment: Please update the capitalization tables to reflect information as of a more recent date.
Response: The capitalization tables will be updated as requested.
12.
Comment: In the capitalization tables, for Reorganizations for which Class Y shares are being reorganized into Class A shares, please show the total pro forma information for Class A shares following the Reorganization.
Response: The capitalization tables will be updated as requested.
13.
Comment: Please include in the capitalization tables information for the Acquiring Fund share classes that are not involved in the Reorganization.
Response: The requested changes will be made.
14.
Comment: Please add the estimated costs of the Reorganization to the relevant footnote to the capitalization tables.
Response: The requested changes will be made.
15.
Comment: Please confirm that no portfolio repositioning is anticipated as part of the Reorganization outside of each Fund’s normal investment activities. If repositioning is anticipated, please disclose in the Proxy Statement/Prospectus the estimated level of repositioning and the anticipated tax impact of such repositioning on Fund shareholders (e.g., approximate percentage of securities to be sold, anticipated realized gains/losses, potential distributions, and whether the Fund can utilize any capital loss carryforwards to offset gains).
Response: The Registrant confirms that no repositioning in connection with the Reorganizations is anticipated other than in connection with the Funds’ normal investment activities.
16.
Comment: In the section “More Information About the Funds — Additional Information,” please ensure that the most recent registration statement and/or shareholder report for each Fund is included (with corresponding hyperlink), as applicable.
Response: The requested changes will be made.
17.
Comment: In the Statement of Additional Information, please review that the filing dates and accession numbers provided for the documents incorporated by reference are correct.
Response: The Registrant will review and make any necessary changes.
Legal Comments
18.
Comment: The facing sheet for each Registrant only references the Reorganizations for the Acquiring Funds that are series of that Registrant. Additionally, the filing for each Registrant only tags the Acquiring Funds that are series of that Registrant. Please confirm if all series and classes involved in the Proxy Statement/Prospectus should be referenced on the facing sheet and tagged in each filing.
Response: The Registrant believes that the Reorganizations for each individual Registrant are properly described on the facing sheet and tagged on EDGAR and that it would be incorrect to tag the series and classes for all Registrants in each filing. The Registrant further notes that the Facing Sheet for each N-14 states that a separate N-14 is being filed for the series and classes of the other Registrants.
19.
Comment: Please add language to the front cover page of the Proxy Statement/Prospectus that the Funds are not traded on an exchange.
Response: The Registrant notes that Item 2(a) of Form N-14 states to disclose, “to the extent applicable,” the name of any national securities exchange on which the registrant’s securities are listed. Because the Funds are not traded on an exchange, this information is not applicable to the Funds; the Registrant does not believe that affirmative disclosure to that effect is necessary or required under Form N-14. Accordingly, the Registrant respectfully declines to make the requested change.
20.
Comment: Please add language to the shareholder notice regarding the approximate date of the sale of the securities to the public.
Response: The Registrant respectfully notes that the approximate date of the closing of the Reorganization is disclosed on page i of the shareholder notice.
21.
Comment: Please add language to the shareholder notice regarding what would happen if shareholders do not approve a Reorganization.
Response: The requested change will be made.
22.
Comment: On page v, please include contact information for technical assistance during the shareholder meeting.
Response: The requested change will be made.
23.
Comment: On page 8, under the section titled “What are the Board recommendations regarding each Reorganization,” please add disclosure in bold regarding the expiration date for the waivers on the pro forma expenses.
Response: The requested change will be made.
24.
Comment: On page 10, under the section titled “How will the Reorganizations affect Fund fees and expenses?”, please add disclosure regarding the term of the waivers.
Response: The requested change will be made.
25.
Comment: The Proxy Statement/Prospectus describes that the shareholder meeting will be held via live webcast. Please explain supplementally which state law or bylaw provision provides for shareholder meetings to be held via live webcast.
Response: Each Registrant is organized as a Delaware statutory trust. Although each Registrant’s Agreement and Declaration of Trust and By-laws are silent regarding the ability to hold a virtual shareholder meeting, existing provisions of the Delaware Statutory Trust Act (the “DSTA”) provide authority for holding a virtual shareholder meeting. Section 3806(f) of the DSTA provides that: “Unless otherwise provided in the governing instrument of a statutory trust, meetings of beneficial owners may be held by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this subsection shall constitute presence in person at the meeting.”
26.
Comment: On page 11, please add disclosure comparing the Acquiring Fund’s focus on large cap securities to any focus of the Acquired Fund on a particular capitalization of securities.
Response: The Registrant respectfully notes that the disclosure indicates that the Acquiring Fund will invest at least 80% of its net assets in large-capitalization companies, and that the Acquired Fund will invest primarily in large- and medium-sized companies.
27.
Comment: With respect to the inclusion of the IBOR Risk as a principal risk for each Fund, please discuss how the risk applies to each Fund’s strategy.
Response: The Registrant notes that each Fund is permitted by its stated investment strategies as disclosed in its Prospectus to invest in securities that could have exposure to interbank offered rates (“IBORs”), and thus as a part of a complex-wide initiative, each Fund discloses IBOR Risk as a principal investment risk of the Fund.
28.
Comment: With respect to Funds that include a particular sector risk as a principal risk, please include corresponding strategy disclosure that, if true, the Fund focuses on that particular sector.
Response: The Registrant confirms that the Funds do not focus on any particular sector as a part of their principal investment strategies, but may, from time to time, have exposure to a particular sector as disclosed in the Funds’ principal investment risks.
29.
Comment: On page 23, please add disclosure explaining that the Delaware Ivy Mid Cap Growth Fund can invest in non-equity securities, whereas, the Delaware Mid Cap Growth Equity Fund has an 80% policy to invest in equity securities.
Response: The requested change will be made.
30.
Comment: On page 42, please add disclosure that the Delaware Ivy High Income Fund does not have an 80% investment policy.
Response: The requested change will be made.
31.
Comment: On page 49, please discuss whether the Delaware Ivy Value Fund also invests in a limited number of stocks.
Response: The requested change will be made.
32.
Comment: On page 53, please add disclosure that the Delaware Ivy Global Growth Fund does not have an 80% investment policy.
Response: The requested change will be made.
33.
Comment: On page 53, please add disclosure regarding how the Delaware Ivy Global Growth Fund determines an issuer’s location.
Response: The requested change will be made.
34.
Comment: On page 62, please add disclosure comparing the number of stocks held by the Delaware Global Equity Fund II and the Delaware Ivy Global Growth Fund.
Response: The requested change will be made.
35.
Comment: In the section comparing the Funds’ fundamental investment restrictions, consider mapping the Acquired Fund’s restriction to the corresponding restriction o
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CORRESP
1
filename1.htm
Stradley Ronon Stevens & Young, LLP
2005 Market Street, Suite 2600
Philadelphia, PA 19103
Telephone 215.564.8000
Fax 215.564.8120
E. Taylor Brody
ebrody@stradley.com
215-564-8071
February 23, 2024
Filed via EDGAR
Mr. Alberto Zapata
Ms. Elena Stojic
Mr. David Manion
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Subject:
Filing on Form N-14 for Ivy Funds (File No. 333-276571), Delaware Group Adviser
Funds (File No. 333-276569), and Delaware Group Equity Funds II (File No. 333-276570)
Dear Mr. Zapata, Ms. Stojic, and Mr. Manion:
On behalf of Ivy Funds, Delaware Group Adviser Funds, and Delaware Group Equity Funds II (each, a "Registrant" and
collectively, the “Registrant”), submitted herewith under the EDGAR system, are the responses to the comments of the staff (the “Staff”) of the U.S. Securities and Exchange
Commission (the “Commission”) that you communicated with regard to the Registrant’s Proxy Statement/Prospectus Form N-14 (the “Proxy Statement/Prospectus”). The
Proxy Statement/Prospectus was filed by each Registrant as part of the proposed Reorganization of the series of each Registrant detailed on Appendix A.
Each comment from the Staff is summarized below, followed by the Registrant’s response to the comment. Terms not
defined herein shall have the meaning set forth for that term in the Proxy Statement/Prospectus.
Accounting Comments
1.
Comment: On pages i to ii of the Proxy Statement/Prospectus, please confirm
that each Reorganization is included in the table.
Response: The Registrant confirms that all
Reorganizations will be disclosed in the table and the requested changes will be made.
2.
Comment: On page 6 of the Proxy Statement/Prospectus, please ensure that the
most recent prospectus for each Fund is included (with corresponding hyperlink).
Response: The requested changes will be made.
3.
Comment: Please confirm the most recent fee and expense information for the
Funds has been used to prepare the fee and expense tables.
Response: The Registrant confirms that the fee
and expense tables included in the Proxy Statement/Prospectus reflect the most recent fee and expense information for the Funds.
4.
Comment: For each Reorganization, with the exception of the Reorganization of
the Delaware Global Equity Fund and the Delaware Global Equity Fund II into the Delaware Ivy Global Growth Fund, the pro forma other
expenses are increasing relative to the current Acquiring Fund other expenses. Please explain supplementally in correspondence why the estimated other expenses are increasing, given the increased scale of the combined Acquiring Fund following
the Reorganization.
Response: The Registrant notes that the pro forma numbers represent what the Registrant expects to be accruing at the time of each Reorganization based on an annual accrual, and therefore,
because the pro forma numbers are as of the anticipated date of the close of each Reorganization, the other expenses differ from those of the
Acquiring Fund prior to the Reorganization.
5.
Comment: For the Reorganizations of (1) Delaware Global Equity Fund and
Delaware Global Equity Fund II into Delaware Ivy Global Growth Fund, (2) Delaware International Equity Fund and Delaware International Equity Fund II into Delaware Ivy International Core Equity Fund, and (3) Delaware Ivy Core Bond Fund into
Delaware Diversified Income Fund, the total annual fund operating expenses for certain classes of certain Funds do not align with the total annual fund expenses in the Fund’s financial highlights. Please explain supplementally in
correspondence the reason for any differences.
Response: The Registrant notes that for the
impacted classes of the above-referenced Funds each experienced a change in their expense cap during their prior fiscal period as disclosed in the most recent shareholder report, and therefore the total annual fund expenses in the Funds’ financial
highlights do not reflect the revised expense caps for the entire period.
6.
Comment: Under the question “How will the Reorganizations affect Fund fees
and expenses?” on page 10 of the Proxy Statement/Prospectus, the disclosure notes that “Management has implemented a voluntary fee waiver to reduce the gross expenses of each Acquiring Fund as detailed in the tables below.” The fee tables
show contractual fee waivers. Please clarify this language.
Response: The requested changes will be made.
The Registrant confirms that the waivers are contractual.
7.
Comment: In the section “Who manages the Funds?” beginning on page 114 of the
Proxy Statement/Prospectus, please update the references to the shareholder reports in which the discussion of the basis for the Board’s approval of the applicable Fund’s investment advisory contract is available to reflect the October and
November 2023 fiscal periods.
Response: The requested changes will be made.
8.
Comment: Please add the financial highlights for the fiscal year ending
November 30, as applicable.
Response: The financial highlights will be
updated as requested.
9.
Comment: Please add a hyperlink from the fee table for each Reorganization to
the expense example for the corresponding Reorganization.
Response: The requested changes will be made.
10.
Comment: Please confirm the waiver period following the Reorganization of
Delaware Ivy Core Bond Fund into Delaware Diversified Income Fund.
Response: The waiver period has been updated to
reflect a period of one year from the close of the Reorganization.
11.
Comment: Please update the capitalization tables to reflect information as of
a more recent date.
Response: The capitalization tables will be
updated as requested.
12.
Comment: In the capitalization tables, for Reorganizations for which Class Y
shares are being reorganized into Class A shares, please show the total pro forma information for Class A shares following the
Reorganization.
Response: The capitalization tables will be
updated as requested.
13.
Comment: Please include in the capitalization tables information for the
Acquiring Fund share classes that are not involved in the Reorganization.
Response: The requested changes will be made.
14.
Comment: Please add the estimated costs of the Reorganization to the relevant
footnote to the capitalization tables.
Response: The requested changes will be made.
15.
Comment: Please confirm that no portfolio repositioning is anticipated as
part of the Reorganization outside of each Fund’s normal investment activities. If repositioning is anticipated, please disclose in the Proxy Statement/Prospectus the estimated level of repositioning and the anticipated tax impact of such
repositioning on Fund shareholders (e.g., approximate percentage of securities to be sold, anticipated realized gains/losses, potential distributions, and whether the Fund can utilize any capital loss carryforwards to offset gains).
Response: The Registrant confirms that no
repositioning in connection with the Reorganizations is anticipated other than in connection with the Funds’ normal investment activities.
16.
Comment: In the section “More Information About the Funds — Additional
Information,” please ensure that the most recent registration statement and/or shareholder report for each Fund is included (with corresponding hyperlink), as applicable.
Response: The requested changes will be made.
17.
Comment: In the Statement of Additional Information, please review that the
filing dates and accession numbers provided for the documents incorporated by reference are correct.
Response: The Registrant
will review and make any necessary changes.
Legal Comments
18.
Comment: The facing sheet for each Registrant only references the
Reorganizations for the Acquiring Funds that are series of that Registrant. Additionally, the filing for each Registrant only tags the Acquiring Funds that are series of that Registrant. Please confirm if all series and classes involved in
the Proxy Statement/Prospectus should be referenced on the facing sheet and tagged in each filing.
Response: The Registrant
believes that the Reorganizations for each individual Registrant are properly described on the facing sheet and tagged on EDGAR and that it would be incorrect to tag the series and classes for all Registrants in each filing. The Registrant further
notes that the Facing Sheet for each N-14 states that a separate N-14 is being filed for the series and classes of the other Registrants.
19.
Comment: Please add language to the front cover page of the Proxy
Statement/Prospectus that the Funds are not traded on an exchange.
Response: The Registrant
notes that Item 2(a) of Form N-14 states to disclose, “to the extent applicable,” the name of any national securities exchange on which the registrant’s securities are listed. Because the Funds are not traded on an exchange, this information is not
applicable to the Funds; the Registrant does not believe that affirmative disclosure to that effect is necessary or required under Form N-14. Accordingly, the Registrant respectfully declines to make the requested change.
20.
Comment: Please add language to the shareholder notice regarding the
approximate date of the sale of the securities to the public.
Response: The Registrant
respectfully notes that the approximate date of the closing of the Reorganization is disclosed on page i of the shareholder notice.
21.
Comment: Please add language to the shareholder notice regarding what would
happen if shareholders do not approve a Reorganization.
Response: The requested
change will be made.
22.
Comment: On page v, please include contact information for technical
assistance during the shareholder meeting.
Response: The requested
change will be made.
23.
Comment: On page 8, under the section titled “What are the Board
recommendations regarding each Reorganization,” please add disclosure in bold regarding the expiration date for the waivers on the pro forma expenses.
Response: The requested
change will be made.
24.
Comment: On page 10, under the section titled “How will the Reorganizations
affect Fund fees and expenses?”, please add disclosure regarding the term of the waivers.
Response: The requested
change will be made.
25.
Comment: The Proxy Statement/Prospectus describes that the shareholder
meeting will be held via live webcast. Please explain supplementally which state law or bylaw provision provides for shareholder meetings to be held via live webcast.
Response: Each Registrant
is organized as a Delaware statutory trust. Although each Registrant’s Agreement and Declaration of Trust and By-laws are silent regarding the
ability to hold a virtual shareholder meeting, existing provisions of the Delaware Statutory Trust Act (the “DSTA”) provide authority for holding a virtual shareholder meeting. Section 3806(f) of the DSTA provides that: “Unless otherwise provided in
the governing instrument of a statutory trust, meetings of beneficial owners may be held by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this subsection shall constitute presence in person at the meeting.”
26.
Comment: On page 11, please add disclosure comparing the Acquiring Fund’s
focus on large cap securities to any focus of the Acquired Fund on a particular capitalization of securities.
Response: The Registrant
respectfully notes that the disclosure indicates that the Acquiring Fund will invest at least 80% of its net assets in large-capitalization companies, and that the Acquired Fund will invest primarily in large- and medium-sized companies.
27.
Comment: With respect to the inclusion of the IBOR Risk as a principal risk
for each Fund, please discuss how the risk applies to each Fund’s strategy.
Response: The Registrant
notes that each Fund is permitted by its stated investment strategies as disclosed in its Prospectus to invest in securities that could have exposure to interbank offered rates (“IBORs”), and thus as a part of a complex-wide initiative, each Fund
discloses IBOR Risk as a principal investment risk of the Fund.
28.
Comment: With respect to Funds that include a particular sector risk as a
principal risk, please include corresponding strategy disclosure that, if true, the Fund focuses on that particular sector.
Response: The Registrant
confirms that the Funds do not focus on any particular sector as a part of their principal investment strategies, but may, from time to time, have exposure to a particular sector as disclosed in the Funds’ principal investment risks.
29.
Comment: On page 23, please add disclosure explaining that the Delaware Ivy
Mid Cap Growth Fund can invest in non-equity securities, whereas, the Delaware Mid Cap Growth Equity Fund has an 80% policy to invest in equity securities.
Response: The requested
change will be made.
30.
Comment: On page 42, please add disclosure that the Delaware Ivy High Income
Fund does not have an 80% investment policy.
Response: The requested
change will be made.
31.
Comment: On page 49, please discuss whether the Delaware Ivy Value Fund also
invests in a limited number of stocks.
Response: The requested
change will be made.
32.
Comment: On page 53, please add disclosure that the Delaware Ivy Global
Growth Fund does not have an 80% investment policy.
Response: The requested
change will be made.
33.
Comment: On page 53, please add disclosure regarding how the Delaware Ivy
Global Growth Fund determines an issuer’s location.
Response: The requested
change will be made.
34.
Comment: On page 62, please add disclosure comparing the number of stocks
held by the Delaware Global Equity Fund II and the Delaware Ivy Global Growth Fund.
Response: The requested
change will be made.
35.
Comment: In the section comparing the Funds’ fundamental investment
restrictions, consider mapping the Acquired Fund’s restriction to the corresponding restriction o