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Fees and Expenses This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. More information about these and other discounts is available from your financial professional and in the Sales Charge Reductions section on page 78 of the Funds prospectus and in the Purchase, Redemption and Pricing of Shares section on page 87 of the Funds statement of additional information (SAI). Shareholder Fees (fees paid directly from your investment) Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 58% of the average value of its portfolio. Example This example is intended to help you compare the cost of investing in the shares of the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the particular class of shares of the Fund for the time periods indicated and then redeem all your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: Principal Investment Strategies Waddell & Reed Advisors Accumulative Fund invests primarily in common stocks of companies that Waddell & Reed Investment Management Company (WRIMCO), the Funds investment manager, considers to be high in quality and attractive in their long-term investment potential. Although the Fund generally emphasizes large cap companies (typically, companies with capitalizations of at least $10 billion at the time of acquisition), it may invest in companies of any size, and of any industry, in seeking to achieve its objective. The Fund may emphasize a blend of value and growth potential in selecting stocks. Value stocks are those that WRIMCO believes are currently selling below their true worth. A stock has growth potential if, in WRIMCOs opinion, the earnings of the company are likely to grow faster than the economy. WRIMCOs investment philosophy for the Fund is a blend between bottom-up fundamental stock and sector analysis, coupled with a top-down macroeconomic perspective that WRIMCO uses to guide it in its selection of industries and sector weightings. In selecting securities for the Fund, WRIMCO considers many factors, which may include: stability and predictability of earnings growth; acceleration of earnings and/or revenue; improvement in profitability and market share; and sustainable generation of cashflows from operations. Many U.S. companies have diverse operations, with products or services in foreign markets. Therefore, the Fund will have an indirect exposure to foreign markets through investments in these companies. Generally, in determining whether to sell a security, WRIMCO considers many factors, which may include: changes in economic or market factors in general or with respect to a particular industry; changes in the market trends or other factors affecting an individual security; and changes in the relative market performance or appreciation possibilities offered by individual securities. WRIMCO also may sell a security to reduce the Funds holding in that security, to take advantage of more attractive investment opportunities or to raise cash. Principal Investment Risks As with any mutual fund, the value of the Fund’s shares will change, and you could lose money on your investment. The Fund is not intended as a complete investment program. A variety of factors can affect the investment performance of the Fund and prevent it from achieving its objective. These include: <ul type="square"><li style="margin-left:-20px">Company Risk. A company may perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. </li><li style="margin-left:-20px">Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the company’s products or services in those foreign markets. As a result, a company’s domicile and/or the markets in which the company’s securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the company’s products or services are sold. </li><li style="margin-left:-20px">Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may not perform as well as value stocks or the stock market in general. </li><li style="margin-left:-20px">Large Company Risk. Large capitalization companies may go in and out of favor based on market and economic conditions. Large capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large capitalization companies could trail the returns on investments in securities of smaller companies. </li><li style="margin-left:-20px">Management Risk. Fund performance is primarily dependent on WRIMCO’s skill in evaluating and managing the Fund’s portfolio and the Fund may not perform as well as other similar mutual funds. </li><li style="margin-left:-20px">Market Risk. Adverse market conditions, sometimes in response to general economic or industry news, may cause the prices of the Fund’s holdings to fall as part of a broad market decline. The financial crisis in the U.S. and foreign economies over the past several years, including the European sovereign debt crisis, has resulted, and may continue to result, in an unusually high degree of volatility in the financial markets, both U.S. and foreign, and in the NAVs of many mutual funds, including to some extent the Fund. Global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Fund. These circumstances have also decreased liquidity in some markets and may continue to do so. In addition, certain unanticipated events, such as natural disasters, terrorist attacks, war, and other geopolitical events, can have a dramatic adverse effect on securities held by the Fund. </li><li style="margin-left:-20px">Value Stock Risk. Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor and, in the opinion of WRIMCO, undervalued. The value of a security believed by WRIMCO to be undervalued may never reach what is believed to be its full value, or such securitys value may decrease. </li></ul> Performance The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. Performance results include the effect of expense reduction arrangements for some or all of the periods shown. If those arrangements had not been in place, the performance results for those periods would have been lower. The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. Current performance may be lower or higher. Please visit www.waddell.com or call 888.WADDELL for the Funds updated performance. Chart of Year-by-Year Returns as of December 31 each year In the period shown in the chart, the highest quarterly return was 16.03% (the second quarter of 2009) and the lowest quarterly return was -24.85% (the fourth quarter of 2008). The Class A return for the year through September 30, 2012 was 13.33%. Average Annual Total Returns as of December 31, 2011 0.58 You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. 100000 As with any mutual fund, the value of the Fund’s shares will change, and you could lose money on your investment. The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). 888.WADDELL www.waddell.com The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Fund’s shares at the end of the period. 0.0575 0 0 0 0 0.007 0.007 0.007 0.007 0.0025 0.01 0.01 0 0.0027 0.0079 0.0056 0.002 0.0122 0.0249 0.0226 0.009 0.01 0.05 0.01 692 652 229 92 940 1076 706 287 1207 1426 1210 498 1967 2512 2595 1108 692 252 229 92 940 776 706 287 1207 1326 1210 498 1967 2512 2595 1108 -0.0748 -0.0749 -0.0486 -0.0693 -0.0288 -0.0154 0.0211 -0.0276 -0.0159 -0.0163 -0.0134 -0.0174 -0.0145 -0.0013 -0.0025 -0.007 0.0132 0.0125 0.0112 0.0078 0.009 0.0221 0.0292 0.0345 -0.2295 0.1958 0.0735 0.1069 0.128 0.1394 -0.398 0.2562 0.1577 -0.0184 highest quarterly return 2009-06-30 0.1603 lowest quarterly return 2008-12-31 -0.2485 The Class A return for the year through September 30, 2012 2012-09-30 0.1333 <div style="display:none">~ http://www.waddell.com/role/ScheduleShareholderFeesWaddellAndReedAdvisorsAccumulativeFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualFundOperatingExpensesWaddellAndReedAdvisorsAccumulativeFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleTransposedWaddellAndReedAdvisorsAccumulativeFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleNoRedemptionTransposedWaddellAndReedAdvisorsAccumulativeFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualTotalReturnsWaddellAndReedAdvisorsAccumulativeFundBarChart column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleAverageAnnualTotalReturnsTransposedWaddellAndReedAdvisorsAccumulativeFund column period compact * ~</div> 2012-10-26 2012-10-31 2012-10-31 Waddell & Reed Advisors Core Investment Fund Objective To seek to provide capital growth and appreciation. Fees and Expenses This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. More information about these and other discounts is available from your financial professional and in the Sales Charge Reductions section on page 78 of the Funds prospectus and in the Purchase, Redemption and Pricing of Shares section on page 87 of the Funds statement of additional information (SAI). Shareholder Fees (fees paid directly from your investment) Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 58% of the average value of its portfolio. 0.58 You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. 100000 Example This example is intended to help you compare the cost of investing in the shares of the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the particular class of shares of the Fund for the time periods indicated and then redeem all your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: You would pay the following expenses if you did not redeem your shares: Principal Investment Strategies Principal Investment Risks As with any mutual fund, the value of the Fund’s shares will change, and you could lose money on your investment. Performance The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). 888.WADDELL www.waddell.com The Fund’s past performance (before and after taxes) does not necessarily indicate how it will perform in the future. Chart of Year-by-Year Returns as of December 31 each year Waddell & Reed Advisors Core Investment Fund seeks to achieve its objective by investing, under normal circumstances, at least 80% of its net assets in equity securities, primarily in common stocks of large cap companies that Waddell & Reed Investment Management Company (WRIMCO), the Funds investment manager, believes have dominant market positions in their industries. Large cap companies typically are companies with market capitalizations of at least $10 billion at the time of acquisition. The Fund invests in securities that have the potential for capital appreciation, or that WRIMCO expects to resist market decline. Although the Fund typically invests in securities issued by large cap companies, it may invest in securities issued by companies of any size. WRIMCO believes that long-term earnings power relative to market expectations is an important component for stock performance. From a top-down perspective, WRIMCO seeks to identify current trends or themes which indicate specific industries that have the potential to experience multi-year growth. Once identified, WRIMCO seeks to invest for the Fund in what it believes to be dominant companies that will benefit from these trends or themes; including companies that WRIMCO believes have long-term earnings potential greater than market expectations. The Fund typically holds a small number of stocks (generally 40 to 50). Many U.S. companies have diverse operations, with products or services in foreign markets. Therefore, the Fund will have an indirect exposure to foreign markets through investments in these companies. Generally, in determining whether to sell a security, WRIMCO uses the same type of analysis that it uses in buying securities. Among other factors, WRIMCO considers whether the security has fully appreciated according to WRIMCOs forecast, has ceased to offer the prospect of significant growth potential, has had its competitive barriers diminished, has seen its earnings catalyst lose its impact, or has performed below WRIMCOs expectations regarding the securitys long-term earnings potential. WRIMCO also may sell a security to reduce the Funds holding in that security if that issuers competitive advantage has diminished or if the Funds portfolio managers lose conviction in a previously identified trend or theme, to take advantage of more attractive investment opportunities or to raise cash. As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. The Fund is not intended as a complete investment program. A variety of factors can affect the investment performance of the Fund and prevent it from achieving its objective. These include: <ul type="square"><li style="margin-left:-20px">Company Risk. A company may perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. </li><li style="margin-left:-20px">Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the companys products or services in those foreign markets. As a result, a companys domicile and/or the markets in which the companys securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the companys products or services are sold. </li><li style="margin-left:-20px">Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may not perform as well as value stocks or the stock market in general. </li><li style="margin-left:-20px">Holdings Risk. The Fund typically holds a small number of stocks (generally 40 to 50). As a result, the appreciation or depreciation of any one security held by the Fund will have a greater impact on the Funds NAV than it would if the Fund invested in a larger number of securities.</li><li style="margin-left:-20px">Large Company Risk. Large capitalization companies may go in and out of favor based on market and economic conditions. Large capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large capitalization companies could trail the returns on investments in securities of smaller companies. </li><li style="margin-left:-20px">Management Risk. Fund performance is primarily dependent on WRIMCOs skill in evaluating and managing the Funds portfolio and the Fund may not perform as well as other similar mutual funds. </li><li style="margin-left:-20px">Market Risk. Adverse market conditions, sometimes in response to general economic or industry news, may cause the prices of the Funds holdings to fall as part of a broad market decline. The financial crisis in the U.S. and foreign economies over the past several years, including the European sovereign debt crisis, has resulted, and may continue to result, in an unusually high degree of volatility in the financial markets, both U.S. and foreign, and in the NAVs of many mutual funds, including to some extent the Fund. Global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Fund. These circumstances have also decreased liquidity in some markets and may continue to do so. In addition, certain unanticipated events, such as natural disasters, terrorist attacks, war, and other geopolitical events, can have a dramatic adverse effect on securities held by the Fund. </li></ul> The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. Performance results include the effect of expense reduction arrangements for some or all of the periods shown. If those arrangements had not been in place, the performance results for those periods would have been lower. The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. Current performance may be lower or higher. Please visit www.waddell.com or call 888.WADDELL for the Funds updated performance. The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. In the period shown in the chart, the highest quarterly return was 17.25% (the third quarter of 2009) and the lowest quarterly return was -20.25% (the fourth quarter of 2008). The Class A return for the year through September 30, 2012 was 18.07%. Average Annual Total Returns as of December 31, 2011 After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Fund’s shares at the end of the period. The Class A return for the year through September 30, 2012 2012-09-30 0.1807 highest quarterly return 2009-09-30 0.1725 lowest quarterly return 2008-12-31 -0.2025 -0.2198 0.1739 0.0983 0.0883 0.1697 0.1412 -0.3448 0.232 0.2057 0.0124 0.0575 0 0 0 0 0.0065 0.0065 0.0065 0.0065 0.0025 0.01 0.01 0 0.0025 0.0075 0.0048 0.0019 0.0115 0.024 0.0213 0.0084 0.01 0.05 0.01 685 643 216 86 919 1048 667 268 1172 1380 1144 466 1892 2425 2462 1037 685 243 216 86 919 748 667 268 1172 1280 1144 466 1892 2425 2462 1037 -0.0458 -0.0537 -0.0166 -0.0351 0.0027 0.0173 0.0211 -0.0065 0.0117 0.0059 0.0109 0.0102 0.0135 0.0272 -0.0025 -0.0087 0.031 0.0254 0.0273 0.0251 0.0264 0.0403 0.0292 0.0241 <div style="display:none">~ http://www.waddell.com/role/ScheduleShareholderFeesWaddellAndReedAdvisorsCoreInvestmentFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualFundOperatingExpensesWaddellAndReedAdvisorsCoreInvestmentFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleTransposedWaddellAndReedAdvisorsCoreInvestmentFund column period compact * ~</div> You would pay the following expenses if you did not redeem your shares: <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleNoRedemptionTransposedWaddellAndReedAdvisorsCoreInvestmentFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualTotalReturnsWaddellAndReedAdvisorsCoreInvestmentFundBarChart column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleAverageAnnualTotalReturnsTransposedWaddellAndReedAdvisorsCoreInvestmentFund column period compact * ~</div> 0.0575 0 0 0 Waddell & Reed Advisors Small Cap Fund Objective 0 To seek to provide growth of capital. Fees and Expenses This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. More information about these and other discounts is available from your financial professional and in the Sales Charge Reductions section on page 78 of the Funds prospectus and in the Purchase, Redemption and Pricing of Shares section on page 87 of the Funds statement of additional information (SAI). 0.0575 0 0 0 You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. 0.01 0.05 0.01 0 100000 0.0085 0.0085 0.0085 0.0085 Shareholder Fees (fees paid directly from your investment) 0.0025 0.01 0.01 0 0.0085 0.0085 0.0085 0.0085 Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) 0.0025 0.01 0.01 0 0.0043 0.0114 0.0073 0.0024 0.0153 0.0299 0.0258 0.0109 0.05 0.01 0.01 722 702 261 111 1031 1224 802 347 1361 1672 1370 601 2294 2964 2915 1329 0.0046 0.0087 0.0054 0.0022 Example 0.0156 0.0272 0.0239 0.0107 722 302 261 111 1031 924 802 347 1361 1572 1370 601 This example is intended to help you compare the cost of investing in the shares of the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the particular class of shares of the Fund for the time periods indicated and then redeem all your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: 2294 2964 2915 1329 -0.1873 0.2154 0.1232 0.1633 0.2202 0.2238 -0.4073 0.2806 0.1484 -0.0767 -0.1298 -0.132 -0.0807 -0.1259 -0.0868 -0.0726 -0.1211 -0.1331 You would pay the following expenses if you did not redeem your shares: -0.0148 -0.0163 -0.0123 -0.0175 -0.0132 0.0014 -0.0316 -0.0313 0.0387 0.0373 0.0336 0.0316 0.0346 0.0498 0.0427 0.0437 725 675 242 109 1039 1144 745 340 Portfolio Turnover 1376 1540 1275 590 2325 2771 2726 1306 The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 51% of the average value of its portfolio. Waddell & Reed Advisors New Concepts Fund 0.51 Objective Principal Investment Strategies To seek to provide growth of capital. Fees and Expenses Waddell & Reed Advisors Small Cap Fund seeks to achieve its objective by investing, under normal circumstances, at least 80% of its net assets in common stocks of small cap companies. Small cap companies typically are companies with market capitalizations below $3.5 billion at the time of acquisition. The Fund emphasizes smaller companies positioned in new or emerging industries where Waddell & Reed Investment Management Company (WRIMCO), the Funds investment manager, believes there is opportunity for higher growth than in established industries. The Funds investments in equity securities may include common stocks that are offered in initial public offerings (IPOs). In selecting securities for the Fund, WRIMCO utilizes a bottom-up stock picking process that focuses on companies it believes have sustainable long-term growth potential with superior financial characteristics and, therefore, are believed by WRIMCO to be of a higher quality than many other small cap companies. WRIMCO may look at a number of factors regarding a company, such as: management that is aggressive, creative, strong and/or dedicated, technological or specialized expertise, new or unique products or services, entry into new or emerging industries, growth in earnings/growth in revenue and sales/positive cash flows, ROIC (return on invested capital), market share, barriers to entry, operating margins, security size and liquidity. Generally, in determining whether to sell a security, WRIMCO uses the same type of analysis that it uses in buying securities. For example, WRIMCO may sell a security if it determines that the stock no longer offers significant growth potential, which may be due to a change in the business or management of the company or a change in the industry of the company. WRIMCO also may sell a security to reduce the Funds holding in that security, to take advantage of more attractive investment opportunities or to raise cash. This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. More information about these and other discounts is available from your financial professional and in the Sales Charge Reductions section on page 78 of the Funds prospectus and in the Purchase, Redemption and Pricing of Shares section on page 87 of the Funds statement of additional information (SAI). Principal Investment Risks 100000 You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. 0.0575 0 0 0 725 275 242 109 1039 844 745 340 1376 1440 1275 590 0 0.01 0.05 0.01 2325 2771 2726 1306 Shareholder Fees (fees paid directly from your investment) Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) 0.0085 0.0085 0.0085 0.0085 0.0025 0.01 0.01 0 0.0035 0.0075 0.0055 0.002 -0.1093 -0.1224 -0.049 0.0145 -0.0991 -0.0629 0.026 -0.0511 -0.0291 0.024 -0.0343 0.0105 0.0304 0.0228 0.0269 0.0303 0.034 0.0486 0.0209 0.0142 0.0581 0.0502 0.0509 0.0537 0.0556 0.0703 0.0448 0.0423 Waddell & Reed Advisors Vanguard Fund Objective To seek to provide growth of capital. Fees and Expenses As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. The Fund is not intended as a complete investment program. A variety of factors can affect the investment performance of the Fund and prevent it from achieving its objective. These include: <ul type="square"><li style="margin-left:-20px">Company Risk. A company may perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. </li> <li style="margin-left:-20px">Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may not perform as well as value stocks or the stock market in general. </li> <li style="margin-left:-20px">Initial Public Offering Risk. Investments in IPOs can have a significant positive impact on the Funds performance; however, any positive effect of investments in IPOs may not be sustainable because of a number of factors. Namely, the Fund may not be able to buy shares in some IPOs, or may be able to buy only a small number of shares. Also, the Fund may not be able to buy the shares at the commencement of the offering, and the general availability and performance of IPOs are dependent on market psychology and economic conditions. To the extent that IPOs have a significant impact on the Funds performance, this may not be able to be replicated in the future. The relative performance impact of IPOs is also likely to decline as the Fund grows. </li> <li style="margin-left:-20px">Liquidity Risk. Generally, a security is liquid if the Fund is able to sell the security at a fair price within a reasonable time. Liquidity is generally related to the market trading volume for a particular security. Illiquid securities may trade at a discount from comparable, more liquid investments, and may be subject to wider fluctuations in market value. Less liquid securities are more difficult to dispose of at their recorded values and are subject to increased spreads and volatility. Also, the Fund may not be able to dispose of illiquid securities when that would be beneficial at a favorable time or price. </li> <li style="margin-left:-20px">Management Risk. Fund performance is primarily dependent on WRIMCOs skill in evaluating and managing the Funds portfolio and the Fund may not perform as well as other similar mutual funds. </li> <li style="margin-left:-20px">Market Risk. Adverse market conditions, sometimes in response to general economic or industry news, may cause the prices of the Funds holdings to fall as part of a broad market decline. The financial crisis in the U.S. and foreign economies over the past several years, including the European sovereign debt crisis, has resulted, and may continue to result, in an unusually high degree of volatility in the financial markets, both U.S. and foreign, and in the NAVs of many mutual funds, including to some extent the Fund. Global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Fund. These circumstances have also decreased liquidity in some markets and may continue to do so. In addition, certain unanticipated events, such as natural disasters, terrorist attacks, war, and other geopolitical events, can have a dramatic adverse effect on securities held by the Fund. </li> <li style="margin-left:-20px">Small Company Risk. Equity securities of small capitalization companies are subject to greater price volatility, lower trading volume and less liquidity due to, among other things, such companies small size, limited product lines, limited access to financing sources and limited management depth. In addition, the frequency and volume of trading of such securities may be less than is typical of larger companies, making them subject to wider price fluctuations and such securities may be more affected than other types of stocks by the underperformance of a sector or during market downturns. In some cases, there could be difficulties in selling securities of small capitalization companies at the desired time. </li></ul> This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. More information about these and other discounts is available from your financial professional and in the Sales Charge Reductions section on page 78 of the Funds prospectus and in the Purchase, Redemption and Pricing of Shares section on page 87 of the Funds statement of additional information (SAI). As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. Waddell & Reed Advisors Asset Strategy Fund Shareholder Fees (fees paid directly from your investment) Objective Performance Waddell & Reed Advisors International Growth Fund Waddell & Reed Advisors Science and Technology Fund 0.0575 Objective 0 0 0 Waddell & Reed Advisors Dividend Opportunities Fund Objective Objective To seek to provide growth of capital. 0.01 0.05 0.01 0 To seek to provide growth of capital. To seek to provide total return. Fees and Expenses The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. Performance results include the effect of expense reduction arrangements for some or all of the periods shown. If those arrangements had not been in place, the performance results for those periods would have been lower. The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. Current performance may be lower or higher. Please visit www.waddell.com or call 888.WADDELL for the Funds updated performance. Fees and Expenses Fees and Expenses This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. More information about these and other discounts is available from your financial professional and in the Sales Charge Reductions section on page 78 of the Funds prospectus and in the Purchase, Redemption and Pricing of Shares section on page 87 of the Funds statement of additional information (SAI). To seek to provide total return. Waddell & Reed Advisors Tax-Managed Equity Fund Fees and Expenses This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. More information about these and other discounts is available from your financial professional and in the Sales Charge Reductions section on page 78 of the Funds prospectus and in the Purchase, Redemption and Pricing of Shares section on page 87 of the Funds statement of additional information (SAI). This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. More information about these and other discounts is available from your financial professional and in the Sales Charge Reductions section on page 78 of the Funds prospectus and in the Purchase, Redemption and Pricing of Shares section on page 87 of the Funds statement of additional information (SAI). Shareholder Fees (fees paid directly from your investment) Objective Shareholder Fees (fees paid directly from your investment) This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. More information about these and other discounts is available from your financial professional and in the Sales Charge Reductions section on page 78 of the Funds prospectus and in the Purchase, Redemption and Pricing of Shares section on page 87 of the Funds statement of additional information (SAI). 0.0575 Portfolio Turnover 0 0 0 Shareholder Fees (fees paid directly from your investment) The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). 0.0575 0 0 0 0 Shareholder Fees (fees paid directly from your investment) To seek to provide growth of capital while minimizing taxable gains and income to shareholders. Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) Fees and Expenses 0.0069 0.0069 0.0069 0.0069 Shareholder Fees (fees paid directly from your investment) Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) Portfolio Turnover 0 0.01 0.05 0.0065 Example 0.01 0.0065 0.0065 0.0065 Principal Investment Strategies Principal Investment Risks 0.0025 0.01 0.01 0 Performance 0.0025 0.01 0.01 0 0.003 0.0083 0.0064 0.0019 Chart of Year-by-Year Returns as of December 31 each year 0.0027 Average Annual Total Returns as of December 31, 2011 The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 48% of the average value of its portfolio. 0.0048 0.0034 0.002 0.0124 0.0252 0.0233 0.0088 0.0117 0.0213 0.0199 0.0085 0 0 0 0.0575 0.48 0.0575 0 0 0.01 0.05 0.01 0 Example 0.01 0.05 0.01 Example 0.0065 0.0065 0.0065 0.0025 0.01 0.01 0.0025 0.0049 0.0041 0.01 0.0115 0.05 The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. 0.01 0.0214 0.0206 This example is intended to help you compare the cost of investing in the shares of the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the particular class of shares of the Fund for the time periods indicated and then redeem all your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: This example is intended to help you compare the cost of investing in the shares of the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the particular class of shares of the Fund for the time periods indicated and then redeem all your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: 694 655 236 90 After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. 946 1085 727 281 1217 1440 1245 488 1989 2540 2666 1084 Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) Example 0.007 0.007 0.007 0.007 After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. 0.0025 0.01 0.01 0 685 617 209 This example is intended to help you compare the cost of investing in the shares of the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the particular class of shares of the Fund for the time periods indicated and then redeem all your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: 0.0037 919 970 0.0077 646 0.0053 0.0021 1172 1249 1108 687 1892 616 2220 202 2390 87 The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. 0.0132 You would pay the following expenses if you did not redeem your shares: 0.0247 0.0223 0.0091 714 663 243 107 925 967 624 271 1007 1108 748 334 694 255 236 90 1182 1244 1073 471 888.WADDELL 946 785 1322 727 1480 281 1280 579 1914 2217 This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. More information about these and other discounts is available from your financial professional and in the Sales Charge Reductions section on page 78 of the Funds prospectus and in the Purchase, Redemption and Pricing of Shares section on page 87 of the Funds statement of additional information (SAI). 2317 1049 1217 1340 1245 488 2210 2654 2736 1283 1989 2540 2666 1084 www.waddell.com This example is intended to help you compare the cost of investing in the shares of the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the particular class of shares of the Fund for the time periods indicated and then redeem all your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: 0.0084 0.0084 0.0084 0.0084 0.0025 0.01 The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 37% of the average value of its portfolio. 0.01 0 Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) 0.0029 0.0073 0.0055 0.002 Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. 0.37 0.0138 0.0257 0.0239 0.0104 714 Example 263 243 107 <div style="display:none">~ http://www.waddell.com/role/ScheduleShareholderFeesWaddellAndReedAdvisorsInternationalGrowthFund column period compact * ~</div> This example is intended to help you compare the cost of investing in the shares of the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the particular class of shares of the Fund for the time periods indicated and then redeem all your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: Example This example is intended to help you compare the cost of investing in the shares of the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the particular class of shares of the Fund for the time periods indicated and then redeem all your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: Chart of Year-by-Year Returns as of December 31 each year You would pay the following expenses if you did not redeem your shares: 702 650 226 93 969 1070 697 290 687 216 202 87 You would pay the following expenses if you did not redeem your shares: 1257 1416 1195 504 925 667 624 271 1007 808 748 334 2074 2522 2565 1120 1322 1182 1380 1144 1280 1073 579 471 2210 2654 2736 1283 1914 2217 2317 1049 Portfolio Turnover Waddell & Reed Advisors Tax-Managed Equity Fund seeks to achieve its objective by investing primarily in a diversified portfolio of common stocks of companies that Waddell & Reed Investment Management Company (WRIMCO), the Funds investment manager, considers to be high in quality and attractive in their long-term investment potential. Under normal circumstances, the Fund invests at least 80% of its net assets in equity securities. For this purpose, such equity securities consist primarily of common stocks. WRIMCO seeks stocks of growth-oriented companies that it believes have above-average earnings predictability and stability. While the Fund typically invests in the common stocks of primarily large cap U.S. companies, it may invest in companies of any size, any industry or any country in seeking to achieve its objective. Large cap companies are typically companies with market capitalizations of at least $10 billion at the time of acquisition. WRIMCO manages the Fund using an investment strategy that is sensitive to the potential impact of Federal income tax on shareholders investment returns. The Funds tax-sensitive investment strategy is intended to lead to lower distributions of net investment income and realized net capital gains than funds managed without seeking to minimize adverse Federal income tax consequences. WRIMCO typically invests for the long term and primarily utilizes a bottom-up strategy in selecting securities for the Fund and seeks companies that it believes have dominant market positions and established competitive advantages. WRIMCO believes that these characteristics can help to mitigate competition and lead to more sustainable revenue and earnings growth. WRIMCO attempts to focus on growth-oriented companies with sustainable competitive advantages that will allow them to have more persistent growth over long periods of time. The key factors WRIMCO typically analyzes may include a companys brand equity, proprietary technology, economies of scale, level of intra- and inter-industry competition, operating margins and return of capital, threat of substitute products and the interaction and bargaining power between a company, its customers, suppliers and competitors. The Fund typically holds a small number of stocks (generally 40 to 60). Many U.S. companies have diverse operations, with products or services in foreign markets. Therefore, the Fund will have an indirect exposure to foreign markets through investments in these companies. When deciding to sell a security, WRIMCO considers the negative tax impact of realizing capital gains and, if applicable, the positive tax impact of realizing capital losses. However, WRIMCO may sell a security at a realized gain if it determines that the potential tax cost is outweighed by the risk of continuing to own the security, to reduce the Funds holding in that security, or if more attractive investment opportunities are available. In addition, redemptions by shareholders may force the Fund to sell securities at an inopportune time, potentially resulting in realized gains. <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualFundOperatingExpensesWaddellAndReedAdvisorsInternationalGrowthFund column period compact * ~</div> -0.167 Portfolio Turnover 0.3452 0.1326 Example The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 30% of the average value of its portfolio. 0.1237 0.0616 0.3 0.0769 The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 46% of the average value of its portfolio. -0.3771 0.4297 0.3594 You would pay the following expenses if you did not redeem your shares: Principal Investment Strategies -0.0549 702 250 226 93 969 770 697 290 This example is intended to help you compare the cost of investing in the shares of the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the particular class of shares of the Fund for the time periods indicated and then redeem all your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: 1257 1316 1195 504 2074 2522 2565 1120 You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. Portfolio Turnover 100000 The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 53% of the average value of its portfolio. Principal Investment Strategies Portfolio Turnover Waddell & Reed Advisors Vanguard Fund seeks to achieve its objective by investing primarily in a diversified portfolio of common stocks issued by large capitalization companies that Waddell & Reed Investment Management Company (WRIMCO), the Funds investment manager, believes are high-quality, growth-oriented companies with appreciation possibilities. Large capitalization companies typically are companies with market capitalizations of at least $10 billion at the time of acquisition. Growth-oriented companies are those whose earnings WRIMCO believes are likely to grow faster than the economy. The Fund seeks to generate solid returns while striving to protect against downside risks. WRIMCO primarily utilizes a bottom-up strategy in selecting securities for the Fund and seeks companies that it believes have dominant market positions and established competitive advantages. WRIMCO believes that these characteristics can help to mitigate competition and lead to more sustainable revenue and earnings growth. WRIMCO attempts to focus on companies operating in large, growing, addressable markets (generally, the potential markets for their goods and services) whose competitive market position WRIMCO believes will allow them to grow faster than the general economy. The key factors WRIMCO typically analyzes consist of: a companys brand equity, balance sheet, proprietary technology, economies of scale, and level of intra- and inter-industry competition; the threat of substitute products; and the interaction and bargaining power between a company, its customers, suppliers and competitors. The Fund typically holds a small number of stocks (generally 45 to 60). Many U.S. companies have diverse operations, with products or services in foreign markets. Therefore, the Fund will have an indirect exposure to foreign markets through investments in these companies. In general, WRIMCO may sell a security when, in WRIMCOs opinion, a company experiences deterioration in its growth and/or profitability characteristics, or a fundamental breakdown of its sustainable competitive advantages. WRIMCO also may sell a security if it determines that the security no longer presents sufficient appreciation potential; this may be caused by, or be an effect of, changes in the industry of the issuer, loss by the company of its competitive position, and/or poor use of resources. WRIMCO also may sell a security to reduce the Funds holding in that security, to take advantage of more attractive investment opportunities or to raise cash. The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 43% of the average value of its portfolio. 0.53 Waddell & Reed Advisors International Growth Fund seeks to achieve its objective by investing primarily in common stocks of foreign companies that Waddell & Reed Investment Management Company (WRIMCO), the Funds investment manager, believes are competitively well-positioned, gaining market share, have the potential for long-term growth and operate in regions or countries that WRIMCO believes possess attractive growth characteristics. The Fund primarily invests in issuers of developed countries, although the Fund has the ability to invest in issuers domiciled in or doing business in any country or region around the globe, including emerging markets. While the Fund primarily invests in securities issued by large capitalization companies (typically, companies with market capitalizations of at least $10 billion at the time of acquisition), it may invest in securities issued by companies of any size. WRIMCO utilizes a research-based investment process that blends top-down global economic analysis with bottom-up stock selection. After identifying promising opportunities around the world, WRIMCO seeks strong companies in industries which it believes are growing faster than their underlying economies. WRIMCO may look at a number of factors in selecting securities for the Funds portfolio, including: a companys competitive position and its sustainability; a companys growth and earnings potential and valuation; a companys financials, including cash flow and balance sheet; management of the company; strength of the industry; and applicable economic, market and political conditions of the country in which the company is located and/or in which it is doing business. Generally, in determining whether to sell a security, WRIMCO uses the same type of analysis that it uses in buying securities. For example, WRIMCO may sell a security issued by a company if it believes the company has experienced a fundamental breakdown of its sustainable competitive advantage or no longer offers significant growth potential, if it believes the management of the company has weakened, and/or there exists political or economic instability in the issuers country. WRIMCO also may sell a security to reduce the Funds holding in that security, to take advantage of more attractive investment opportunities or to raise cash. You would pay the following expenses if you did not redeem your shares: Principal Investment Risks The Class A return for the year through September 30, 2012 0.43 You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. Principal Investment Strategies Principal Investment Risks 100000 685 217 209 707 660 242 106 987 1099 Principal Investment Strategies 745 331 1287 1465 1275 574 Waddell & Reed Advisors Value Fund 2137 2613 2726 1271 Principal Investment Strategies 2012-09-30 Waddell & Reed Advisors Dividend Opportunities Fund seeks to achieve its objective by investing primarily in large cap companies, that are often market leaders in their industry with established operating records that Waddell & Reed Investment Management Company (WRIMCO), the Funds investment manager, believes are high-quality companies that may accelerate or grow their dividend payout ratio and that also demonstrate favorable prospects for total return. Under normal circumstances, the Fund invests at least 80% of its net assets in dividend-paying equity securities. For this purpose, such securities consist primarily of dividend-paying common stocks. Although the Fund invests primarily in securities issued by large cap companies (typically, companies with capitalizations of at least $10 billion at the time of acquisition), it may invest in securities issued by companies of any size. The Fund primarily focuses on companies that have one or more of the following characteristics: high dividend yields that are, in the opinion of WRIMCO, relatively safe; above-average dividend yield that WRIMCO expects will continue and/or grow; below-average dividend yield but that WRIMCO expects could grow over the next few years; and no dividend yield but WRIMCO expects the company to initiate payment of dividends. WRIMCO also considers other factors, which may include the companys: established operating history; competitive dividend yields; growth and profitability opportunities; return on capital; history of improving sales and profits; status as a market leader in its industry; and stock price value. Many U.S. companies have diverse operations, with products or services in foreign markets. Therefore, the Fund will have an indirect exposure to foreign markets through investments in these companies. Generally, in determining whether to sell a security, WRIMCO considers many factors, including: changes in economic or market factors in general or with respect to a particular industry, changes in the market trends or other factors affecting an individual security, and changes in the relative market performance or appreciation possibilities offered by individual securities. WRIMCO also may sell a security to reduce the Funds holding in that security, to take advantage of more attractive investment opportunities or to raise cash. Objective 919 670 646 Principal Investment Risks To seek to provide capital appreciation. 1172 1149 1108 1892 2220 2390 Fees and Expenses 707 260 242 106 987 799 745 331 1287 1365 1275 574 This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. More information about these and other discounts is available from your financial professional and in the Sales Charge Reductions section on page 78 of the Funds prospectus and in the Purchase, Redemption and Pricing of Shares section on page 87 of the Funds statement of additional information (SAI). 0.1662 highest quarterly return 2009-06-30 2137 2613 2726 1271 0.1857 Shareholder Fees (fees paid directly from your investment) lowest quarterly return 2008-12-31 -0.2273 0.0575 0 0 0 As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. The Fund is not intended as a complete investment program. A variety of factors can affect the investment performance of the Fund and prevent it from achieving its objective. These include: <ul type="square"> <li style="margin-left:-20px">Company Risk. A company may perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. </li> <li style="margin-left:-20px">Emerging Market Risk. Investments in countries with emerging economies or securities markets may carry greater risk than investments in more developed countries. Political and economic structures in many such countries may be undergoing significant evolution and rapid development, and such countries may lack the social, political and economic stability characteristic of more developed countries. Investments in securities issued in these countries may be more volatile and less liquid than securities issued in more developed countries. </li> <li style="margin-left:-20px">Foreign Currency Risk. Foreign securities may be denominated in foreign currencies. The value of the Funds investments, as measured in U.S. dollars, may be unfavorably affected by changes in foreign currency exchange rates and exchange control regulations. </li> <li style="margin-left:-20px">Foreign Securities Risk. Investing in foreign securities involves a number of economic, financial, legal, and political considerations that may not be associated with the U.S. markets and that could affect the Funds performance unfavorably, depending upon the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; fluctuations in foreign currency exchange rates and related conversion costs; adverse foreign tax consequences; different and/or less stringent financial reporting standards; custody; and settlement delays. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. </li> <li style="margin-left:-20px">Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may not perform as well as value stocks or the stock market in general. </li> <li style="margin-left:-20px">Large Company Risk. Large capitalization companies may go in and out of favor based on market and economic conditions. Large capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large capitalization companies could trail the returns on investments in securities of smaller companies. </li> <li style="margin-left:-20px">Management Risk. Fund performance is primarily dependent on WRIMCOs skill in evaluating and managing the Funds portfolio and the Fund may not perform as well as other similar mutual funds. </li> <li style="margin-left:-20px">Market Risk. Adverse market conditions, sometimes in response to general economic or industry news, may cause the prices of the Funds holdings to fall as part of a broad market decline. The financial crisis in the U.S. and foreign economies over the past several years, including the European sovereign debt crisis, has resulted, and may continue to result, in an unusually high degree of volatility in the financial markets, both U.S. and foreign, and in the NAVs of many mutual funds, including to some extent the Fund. Global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Fund. These circumstances have also decreased liquidity in some markets and may continue to do so. In addition, certain unanticipated events, such as natural disasters, terrorist attacks, war, and other geopolitical events, can have a dramatic adverse effect on securities held by the Fund. </li> </ul> Waddell & Reed Advisors New Concepts Fund seeks to achieve its objective by investing primarily in common stocks of mid cap companies that Waddell & Reed Investment Management Company (WRIMCO), the Funds investment manager, believes offer above-average growth potential. Mid cap companies typically are companies with market capitalizations within the range of companies in the Russell Midcap Growth Index at the time of acquisition. As of September 30, 2012, this range of market capitalizations was between approximately $751.6 million to $22.1 billion. In selecting securities for the Fund, WRIMCO primarily emphasizes a bottom-up approach and may look at a number of factors in its consideration of a company, such as: new or innovative products or services; adaptive or creative management; strong financial and operational capabilities to sustain multi-year growth; stable and consistent revenue, earnings, and cash flow; strong balance sheet; market potential; and profit potential. Generally, in determining whether to sell a security, WRIMCO considers many factors, including excessive valuation given company growth prospects, deterioration of fundamentals, weak cash flow to support shareholder returns, and unexpected and poorly explained management changes. WRIMCO also may sell a security to reduce the Funds holding in that security, to take advantage of more attractive investment opportunities or to raise cash. Principal Investment Risks 0.01 0.05 0.01 0 As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. You would pay the following expenses if you did not redeem your shares: Performance In the period shown in the chart, the highest quarterly return was 18.57% (the second quarter of 2009) and the lowest quarterly return was -22.73% (the fourth quarter of 2008). The Class A return for the year through September 30, 2012 was 16.62%. As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. The Fund is not intended as a complete investment program. A variety of factors can affect the investment performance of the Fund and prevent it from achieving its objective. These include: <ul type="square"><li style="margin-left:-20px">Company Risk. A company may perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. In addition, there is no guarantee that the companies in which the Fund invests will declare dividends in the future or that dividends, if declared, will remain at current levels or increase over time. The amount of any dividend paid by the company may fluctuate significantly. </li><li style="margin-left:-20px">Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the companys products or services in those foreign markets. As a result, a companys domicile and/or the markets in which the companys securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the companys products or services are sold. </li><li style="margin-left:-20px">Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may not perform as well as value stocks or the stock market in general. </li><li style="margin-left:-20px">Large Company Risk. Large capitalization companies may go in and out of favor based on market and economic conditions. Large capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large capitalization companies could trail the returns on investments in securities of smaller companies. </li><li style="margin-left:-20px">Management Risk. Fund performance is primarily dependent on WRIMCOs skill in evaluating and managing the Funds portfolio and the Fund may not perform as well as other similar mutual funds. </li><li style="margin-left:-20px">Market Risk. Adverse market conditions, sometimes in response to general economic or industry news, may cause the prices of the Funds holdings to fall as part of a broad market decline. The financial crisis in the U.S. and foreign economies over the past several years, including the European sovereign debt crisis, has resulted, and may continue to result, in an unusually high degree of volatility in the financial markets, both U.S. and foreign, and in the NAVs of many mutual funds, including to some extent the Fund. Global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Fund. These circumstances have also decreased liquidity in some markets and may continue to do so. In addition, certain unanticipated events, such as natural disasters, terrorist attacks, war, and other geopolitical events, can have a dramatic adverse effect on securities held by the Fund. </li><li style="margin-left:-20px">Sector Risk. At times, the Fund may have a significant portion of its assets invested in securities of companies conducting business in a broadly related group of industries within an economic sector. Companies in the same economic sector may be similarly affected by economic or market events, making the Fund more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly. </li></ul> As with any mutual fund, the value of the Fund’s shares will change, and you could lose money on your investment. Portfolio Turnover Average Annual Total Returns as of December 31, 2011 Waddell & Reed Advisors Asset Strategy Fund seeks to achieve its objective by allocating its assets primarily among stocks, bonds and short-term instruments of issuers in markets around the globe, as well as investments in precious metals and investments with exposure to various foreign currencies. The Fund may invest its assets in any market that Waddell & Reed Investment Management Company (WRIMCO), the Funds investment manager, believes can offer a high probability of return or, alternatively, can provide a high degree of relative safety in uncertain times. Dependent on its outlook for the U.S. and global economies, WRIMCO identifies growth themes and then focuses its strategy on allocating the Funds assets among stocks, bonds, cash, precious metals, currency and derivative instruments, including derivatives traded over-the-counter or on exchanges. After determining these allocations, WRIMCO seeks attractive opportunities within each market by focusing generally on issuers in countries, sectors and companies with strong cash flow streams and low balance sheet leverage. The Fund may, however, also invest in issuers with higher balance sheet leverage if WRIMCO believes that the Fund will be appropriately compensated for the increased risk. <ul type="square"><li style="margin-left:-20px">Stocks include equity securities of all types, although WRIMCO typically emphasizes growth potential in selecting stocks by focusing on what it believes are steady-growth companies that fit WRIMCOs criteria for sustainable competitive advantage and that WRIMCO believes are positioned to benefit from continued global rebalancing and the globally emerging middle class. Growth stocks are those whose earnings WRIMCO believes are likely to grow faster than the economy. The Fund may invest in securities issued by companies of any size, but primarily focuses on securities issued by large capitalization companies.</li><li style="margin-left:-20px">Bonds include all varieties of fixed-income instruments, such as corporate debt securities or securities issued or guaranteed by the U.S. government or its agencies or instrumentalities (U.S. government securities), with remaining maturities of more than one year. This investment type may include a significant amount, up to 35% of the Funds total assets, of high-yield/high-risk bonds, or junk bonds, which include bonds rated BB+ or below by Standard & Poors, a division of The McGraw-Hill Companies, Inc. (S&P), or comparably rated by another nationally recognized statistical rating organization (NRSRO) or, if unrated, determined by WRIMCO to be of comparable quality. </li><li style="margin-left:-20px">Short-term instruments include all types of short-term securities with remaining maturities of one year or less, including higher-quality money market instruments. </li><li style="margin-left:-20px">Within each of these investment types, the Fund may invest in U.S. and foreign securities; the Fund may invest up to 100% of its total assets in foreign securities, including issuers located in and/or generating revenue from emerging markets. Many U.S. companies have diverse operations, with products or services in foreign markets. Therefore, the Fund will have an indirect exposure to foreign markets through investments in these companies. </li></ul>WRIMCO may allocate the Funds investments among these different types of securities in different proportions at different times, including up to 100% in stocks, bonds, or short-term instruments, respectively. WRIMCO may exercise a flexible strategy in the selection of securities, and the Fund is not required to allocate its investments among stocks and bonds in any fixed proportion, nor is it limited by investment style or by the issuers location, size, market capitalization or industry sector. The Fund may have none, some or all of its assets invested in each asset class in relative proportions that change over time based upon market and economic conditions. Subject to liquidity and diversification limits, the Fund also may invest up to 25% of its total assets in precious metals. Generally, in determining whether to sell a security, WRIMCO considers many factors, which may include a deterioration in a companys fundamentals caused by global-specific factors such as geo-political landscape changes, regulatory or currency changes, or increased competition, as well as company-specific factors, such as reduced pricing power, diminished market opportunity, or increased competition. WRIMCO also may sell a security if the price of the security reaches what WRIMCO believes is fair value, to reduce the Funds holding in that security, to take advantage of more attractive investment opportunities or to raise cash. WRIMCO may, when consistent with the Funds investment objective, seek to manage exposure to certain securities, companies, sectors, markets, foreign currencies and/or precious metals and seek to hedge certain event risks on positions held by the Fund. In an effort to manage exposure to companies, sectors or equity markets, WRIMCO may utilize various instruments including, but not limited to, the following: futures contracts, both long and short positions on foreign and U.S. equity indices; total return swaps; credit default swaps; and options contracts, both written and purchased, on foreign and U.S. equity indices and/or on individual equity securities. In seeking to manage foreign currency exposure, WRIMCO may utilize forward contracts and option contracts, both written and purchased, either to increase or decrease exposure to a given currency. In seeking to manage the Funds exposure to precious metals, WRIMCO may utilize futures contracts, both long and short positions, as well as options contracts, both written and purchased, on precious metals. WRIMCO may reduce the Funds net equity exposure by selling, among other instruments, combined futures and option positions, and may effect short sales of individual securities and/or exchange-traded funds (ETFs) or take long positions in inverse ETFs. Performance Principal Investment Risks The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. Performance results include the effect of expense reduction arrangements for some or all of the periods shown. If those arrangements had not been in place, the performance results for those periods would have been lower. The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. Current performance may be lower or higher. Please visit www.waddell.com or call 888.WADDELL for the Funds updated performance. The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 42% of the average value of its portfolio. Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) Principal Investment Strategies The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualTotalReturnsWaddellAndReedAdvisorsInternationalGrowthFundBarChart column period compact * ~</div> The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. Performance results include the effect of expense reduction arrangements for some or all of the periods shown. If those arrangements had not been in place, the performance results for those periods would have been lower. The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. Current performance may be lower or higher. Please visit www.waddell.com or call 888.WADDELL for the Funds updated performance. 888.WADDELL 0.007 0.007 0.007 0.007 0.0025 0.01 0.01 0 0.0045 0.0091 0.0063 0.0024 0.014 0.0261 0.0233 0.0094 www.waddell.com The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. Example 888.WADDELL www.waddell.com Chart of Year-by-Year Returns as of December 31 each year The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. <div style="display:none">~ http://www.waddell.com/role/ScheduleAverageAnnualTotalReturnsTransposedWaddellAndReedAdvisorsInternationalGrowthFund column period compact * ~</div> The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. This example is intended to help you compare the cost of investing in the shares of the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the particular class of shares of the Fund for the time periods indicated and then redeem all your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. 709 664 236 96 In the period shown in the chart, the highest quarterly return was 21.09% (the second quarter of 2009) and the lowest quarterly return was -19.88% (the third quarter of 2008). The Class A return for the year through September 30, 2012 was 13.03%. 993 1111 727 300 Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. 1297 1485 1245 520 2158 2649 2666 1155 As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. The Fund is not intended as a complete investment program. A variety of factors can affect the investment performance of the Fund and prevent it from achieving its objective. These include: <ul type="square"><li style="margin-left:-20px">Company Risk. A company may perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company.</li><li style="margin-left:-20px">Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may not perform as well as value stocks or the stock market in general.</li><li style="margin-left:-20px">Management Risk. Fund performance is primarily dependent on WRIMCOs skill in evaluating and managing the Funds portfolio and the Fund may not perform as well as other similar mutual funds. </li><li style="margin-left:-20px">Market Risk. Adverse market conditions, sometimes in response to general economic or industry news, may cause the prices of the Funds holdings to fall as part of a broad market decline. The financial crisis in the U.S. and foreign economies over the past several years, including the European sovereign debt crisis, has resulted, and may continue to result, in an unusually high degree of volatility in the financial markets, both U.S. and foreign, and in the NAVs of many mutual funds, including to some extent the Fund. Global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Fund. These circumstances have also decreased liquidity in some markets and may continue to do so. In addition, certain unanticipated events, such as natural disasters, terrorist attacks, war, and other geopolitical events, can have a dramatic adverse effect on securities held by the Fund. </li><li style="margin-left:-20px">Mid Size Company Risk. Securities of mid capitalization companies may be more vulnerable to adverse developments than those of large companies due to such companies limited product lines, limited markets and financial resources and dependence upon a relatively small management group. Securities of mid capitalization companies may be more volatile and less liquid than the stocks of larger companies and may be more affected than other types of stocks by the underperformance of a sector or during market downturns.</li></ul> After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. Performance Chart of Year-by-Year Returns as of December 31 each year After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. 0.118 As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. The Fund is not intended as a complete investment program. A variety of factors can affect the investment performance of the Fund and prevent it from achieving its objective. These include: <ul type="square"><li style="margin-left:-20px">Company Risk. A company may perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. </li><li style="margin-left:-20px">Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the companys products or services in those foreign markets. As a result, a companys domicile and/or the markets in which the companys securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the companys products or services are sold. </li><li style="margin-left:-20px">Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may not perform as well as value stocks or the stock market in general. </li><li style="margin-left:-20px">Holdings Risk. The Fund typically holds a small number of stocks (generally 40 to 60). As a result, the appreciation or depreciation of any one security held by the Fund will have a greater impact on the Funds NAV than it would if the Fund invested in a larger number of securities. </li><li style="margin-left:-20px">Large Company Risk. Large capitalization companies may go in and out of favor based on market and economic conditions. Large capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large capitalization companies could trail the returns on investments in securities of smaller companies. </li><li style="margin-left:-20px"> Management Risk. Fund performance is primarily dependent on WRIMCOs skill in evaluating and managing the Funds portfolio and the Fund may not perform as well as other similar mutual funds. </li><li style="margin-left:-20px">Market Risk. Adverse market conditions, sometimes in response to general economic or industry news, may cause the prices of the Funds holdings to fall as part of a broad market decline. The financial crisis in the U.S. and foreign economies over the past several years, including the European sovereign debt crisis, has resulted, and may continue to result, in an unusually high degree of volatility in the financial markets, both U.S. and foreign, and in the NAVs of many mutual funds, including to some extent the Fund. Global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Fund. These circumstances have also decreased liquidity in some markets and may continue to do so. In addition, certain unanticipated events, such as natural disasters, terrorist attacks, war, and other geopolitical events, can have a dramatic adverse effect on securities held by the Fund. </li><li style="margin-left:-20px">Tax-Managed Strategy Risk. Tax-management strategies may alter investment decisions and affect portfolio holdings, when compared to those of non-tax-managed mutual funds. Market conditions may limit the Funds ability to generate tax losses or to generate dividend income that, as of the date of this Prospectus, is taxed at favorable Federal income tax rates. In addition, the Funds tax-managed strategy may cause the Fund to hold a security in order to achieve more favorable tax treatment or to sell a security in order to realize tax losses, which could result in losses that exceed any benefits of the tax-managed strategy. The Funds ability to utilize various tax-management techniques may be curtailed or eliminated in the future by tax legislation or regulation. </li></ul>Notwithstanding the Funds use of tax-management investment strategies, the Fund may have taxable income and may realize net capital gains from time to time. In addition, investors purchasing Fund shares when the Fund has large undistributed realized net capital gains could receive a significant part of the purchase price of their shares back as a taxable capital gain distribution. Over time, securities with unrealized gains may comprise a substantial portion of the Funds assets. As well, state or Federal tax laws or regulations may be amended at any time and may include changes to applicable tax rates or capital gain holding periods that may be adverse to the Funds shareholders. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. 0.1327 0.1575 0.1678 -0.3704 0.1871 100000 0.1647 -0.0513 As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. The Fund is not intended as a complete investment program. A variety of factors can affect the investment performance of the Fund and prevent it from achieving its objective. These include: <ul type="square"><li style="margin-left:-20px">Company Risk. A company may perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. </li><li style="margin-left:-20px">Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the companys products or services in those foreign markets. As a result, a companys domicile and/or the markets in which the companys securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the companys products or services are sold. </li><li style="margin-left:-20px">Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may not perform as well as value stocks or the stock market in general. </li><li style="margin-left:-20px">Holdings Risk. The Fund typically holds a small number of stocks (generally 45 to 60), and the Funds portfolio managers also tend to invest a significant portion of the Funds total assets in a limited number of stocks. As a result, the appreciation or depreciation of any one security held by the Fund will have a greater impact on the Funds net asset value than it would if the Fund invested in a larger number of securities or if the Funds portfolio managers invested a greater portion of the Funds total assets in a larger number of stocks. </li><li style="margin-left:-20px">Large Company Risk. Large capitalization companies may go in and out of favor based on market and economic conditions. Large capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large capitalization companies could trail the returns on investments in securities of smaller companies. </li><li style="margin-left:-20px">Management Risk. Fund performance is primarily dependent on WRIMCOs skill in evaluating and managing the Funds portfolio and the Fund may not perform as well as other similar mutual funds. </li><li style="margin-left:-20px">Market Risk. Adverse market conditions, sometimes in response to general economic or industry news, may cause the prices of the Funds holdings to fall as part of a broad market decline. The financial crisis in the U.S. and foreign economies over the past several years, including the European sovereign debt crisis, has resulted, and may continue to result, in an unusually high degree of volatility in the financial markets, both U.S. and foreign, and in the NAVs of many mutual funds, including to some extent the Fund. Global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Fund. These circumstances have also decreased liquidity in some markets and may continue to do so. In addition, certain unanticipated events, such as natural disasters, terrorist attacks, war, and other geopolitical events, can have a dramatic adverse effect on securities held by the Fund. </li></ul> The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. Performance results include the effect of expense reduction arrangements for some or all of the periods shown. If those arrangements had not been in place, the performance results for those periods would have been lower. The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. Current performance may be lower or higher. Please visit www.waddell.com or call 888.WADDELL for the Funds updated performance. Performance As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). You would pay the following expenses if you did not redeem your shares: The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. Performance results include the effect of expense reduction arrangements for some or all of the periods shown. If those arrangements had not been in place, the performance results for those periods would have been lower. The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. Current performance may be lower or higher. Please visit www.waddell.com or call 888.WADDELL for the Funds updated performance. In the period shown in the chart, the highest quarterly return was 14.45% (the fourth quarter of 2011) and the lowest quarterly return was -22.08% (the fourth quarter of 2008). The Class A return for the year through September 30, 2012 was 13.22%. 709 264 The Class A return for the year through September 30, 2012 236 96 888.WADDELL 2012-09-30 993 811 727 300 0.1303 highest quarterly return 1297 1385 1245 520 2009-06-30 0.2109 2158 www.waddell.com 2649 2666 1155 lowest quarterly return The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. Performance results include the effect of expense reduction arrangements for some or all of the periods shown. If those arrangements had not been in place, the performance results for those periods would have been lower. The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. Current performance may be lower or higher. Please visit www.waddell.com or call 888.WADDELL for the Funds updated performance. 2008-09-30 -0.1988 The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. Chart of Year-by-Year Returns as of December 31 each year As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. The Fund is not intended as a complete investment program. A variety of factors can affect the investment performance of the Fund and prevent it from achieving its objective. These include: <ul type="square"><li style="margin-left:-20px">Commodities Risk. Commodity trading, including trading in precious metals, is generally considered speculative because of the significant potential for investment loss. Among the factors that could affect the value of the Funds investments in commodities are cyclical economic conditions, sudden political events and adverse international monetary policies. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Also, the Fund may pay more to store and accurately value its commodity holdings than it does with its other portfolio investments. Moreover, under the Federal tax law, the Fund may not derive more than 10% of its annual gross income from gains resulting from selling commodities (and other non-qualifying income). Accordingly, the Fund may be required to hold its commodities or sell them at a loss, or to sell portfolio securities at a gain, when for investment reasons it would not otherwise do so. </li><li style="margin-left:-20px">Company Risk. A company may perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. </li><li style="margin-left:-20px">Credit Risk. An issuer of a fixed-income obligation may not make payments on the obligation when due or may default on its obligation. </li><li style="margin-left:-20px">Derivatives Risk. The use of derivatives presents several risks, including the risk that these instruments may change in value in a manner that adversely affects the Funds NAV and the risk that fluctuations in the value of the derivatives may not correlate with securities markets or the underlying asset upon which the derivatives value is based. Moreover, some derivatives are more sensitive to interest rate changes and market price fluctuations than others. To the extent the judgment of WRIMCO as to certain anticipated price movements is incorrect, the risk of loss may be greater than if the derivative technique(s) had not been used. Derivatives also may be subject to counterparty risk, which includes the risk that a loss may be sustained by the Fund as a result of the insolvency or bankruptcy of, or other non-compliance by, another party to the transaction. </li><li style="margin-left:-20px">Emerging Market Risk. Investments in countries with emerging economies or securities markets may carry greater risk than investments in more developed countries. Political and economic structures in many such countries may be undergoing significant evolution and rapid development, and such countries may lack the social, political and economic stability characteristic of more developed countries. Investments in securities issued in these countries may be more volatile and less liquid than securities issued in more developed countries. </li><li style="margin-left:-20px">Foreign Currency Risk. Foreign securities may be denominated in foreign currencies. The value of the Funds investments, as measured in U.S. dollars, may be unfavorably affected by changes in foreign currency exchange rates and exchange control regulations. </li><li style="margin-left:-20px">Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the companys products or services in those foreign markets. As a result, a companys domicile and/or the markets in which the companys securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the companys products or services are sold. </li><li style="margin-left:-20px">Foreign Securities Risk. Investing in foreign securities involves a number of economic, financial, legal, and political considerations that may not be associated with the U.S. markets and that could affect the Funds performance unfavorably, depending upon the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; fluctuations in foreign currency exchange rates and related conversion costs; adverse foreign tax consequences; different and/or less stringent financial reporting standards; custody; and settlement delays. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. </li><li style="margin-left:-20px">Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may not perform as well as value stocks or the stock market in general. </li><li style="margin-left:-20px">Interest Rate Risk. A rise in interest rates may cause a decline in the value of the Funds securities, especially bonds with longer maturities. A decline in interest rates may cause the Fund to experience a decline in its income. </li><li style="margin-left:-20px">Investment Company Securities Risk. Investment in other investment companies typically reflects the risk of the types of securities in which the investment companies invest. Investments in exchange-traded funds (ETFs) and closed-end funds are subject to the additional risk that shares of the fund may trade at a premium or discount to their NAV per share. When the Fund invests in another investment company, shareholders of the Fund bear their proportionate share of the other investment companys fees and expenses as well as their share of the Funds fees and expenses. </li><li style="margin-left:-20px">Large Company Risk. Large capitalization companies may go in and out of favor based on market and economic conditions. Large capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large capitalization companies could trail the returns on investments in securities of smaller companies. </li><li style="margin-left:-20px">Low-Rated Securities Risk. In general, low-rated debt securities (commonly referred to as high yield or junk 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. For this reason, these bonds are considered speculative and could significantly weaken the Funds returns. In adverse economic or other circumstances, issuers of these low-rated securities and obligations are more likely to have difficulty making principal and interest payments than issuers of higher-rated securities and obligations. </li><li style="margin-left:-20px">Management Risk. Fund performance is primarily dependent on WRIMCOs skill in evaluating and managing the Funds portfolio and the Fund may not perform as well as other similar mutual funds. </li><li style="margin-left:-20px">Market Risk. Adverse market conditions, sometimes in response to general economic or industry news, may cause the prices of the Funds holdings to fall as part of a broad market decline. The financial crisis in the U.S. and foreign economies over the past several years, including the European sovereign debt crisis, has resulted, and may continue to result, in an unusually high degree of volatility in the financial markets, both U.S. and foreign, and in the NAVs of many mutual funds, including to some extent the Fund. Global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Fund. These circumstances have also decreased liquidity in some markets and may continue to do so. In addition, certain unanticipated events, such as natural disasters, terrorist attacks, war, and other geopolitical events, can have a dramatic adverse effect on securities held by the Fund.</li></ul> Chart of Year-by-Year Returns as of December 31 each year As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. 888.WADDELL www.waddell.com Portfolio Turnover Performance The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 70% of the average value of its portfolio. The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. 0.7 In the period shown in the chart, the highest quarterly return was 14.72% (the third quarter of 2007) and the lowest quarterly return was -21.64% (the fourth quarter of 2008). The Class A return for the year through September 30, 2012 was 11.88%. Principal Investment Strategies In the period shown in the chart, the highest quarterly return was 13.80% (the second quarter of 2009) and the lowest quarterly return was -18.37% (the fourth quarter of 2008). The Class A return for the year through September 30, 2012 was 14.22%. Waddell & Reed Advisors Science and Technology Fund invests primarily in the equity securities of science and technology companies around the globe. Under normal circumstances, the Fund invests at least 80% of its net assets in securities of science or technology companies. Such companies may include companies that, in the opinion of Waddell & Reed Investment Management Company (WRIMCO), the Funds investment manager, derive a competitive advantage by the application of scientific or technological developments or discoveries to grow their business or increase their competitive advantage. Science and technology companies are companies whose products, processes or services, in the opinion of WRIMCO, are being or are expected to be significantly benefited by the use or commercial application of scientific or technological developments or discoveries. The Fund may also invest in companies that utilize science and/or technology as an agent of change to significantly enhance their business opportunities. The Fund may invest in securities issued by companies of any size, and may invest without limitation in foreign securities, including securities of issuers within emerging markets. WRIMCO typically emphasizes growth potential in selecting stocks; that is, WRIMCO seeks companies in which earnings are likely to grow faster than the economy. WRIMCO aims to identify strong secular trends within industries and then applies a largely bottom-up stock selection process by considering a number of factors in selecting securities for the Funds portfolio. These may include but are not limited to a companys growth potential, earnings potential, quality of management, financial statements, industry position/market size potential and applicable economic and market conditions. The Fund typically holds a small number of stocks (generally 45 to 65). Many companies have diverse operations, with products or services in foreign markets. Therefore, the Fund will have an indirect exposure to additional foreign markets through investments in these companies. Generally, in determining whether to sell a security, WRIMCO uses the same type of analysis that it uses in buying securities in order to determine whether the security has ceased to offer significant growth potential, has become overvalued and/or whether the company prospects of the issuer have deteriorated due to a change in management, change in strategy and/or a change in its financial characteristics. WRIMCO may also sell a security to reduce the Funds holding in that security, to take advantage of more attractive investment opportunities or to raise cash. <div style="display:none">~ http://www.waddell.com/role/ScheduleShareholderFeesWaddellAndReedAdvisorsSmallCapFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualFundOperatingExpensesWaddellAndReedAdvisorsSmallCapFund column period compact * ~</div> -0.1642 0.2496 0.117 0.1028 0.067 0.2532 -0.3493 0.314 0.1394 -0.0193 <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleTransposedWaddellAndReedAdvisorsSmallCapFund column period compact * ~</div> -0.0757 -0.0757 -0.0492 -0.0671 -0.0283 0.0245 0.0244 0.021 0.0252 0.0274 0.0447 0.0447 0.039 0.0411 0.0411 0.0264 The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. -0.0191 0.025 0.0096 0.026 0.0194 <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleNoRedemptionTransposedWaddellAndReedAdvisorsSmallCapFund column period compact * ~</div> After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. -0.2041 0.3013 The Class A return for the year through September 30, 2012 0.0558 <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualTotalReturnsWaddellAndReedAdvisorsSmallCapFundBarChart column period compact * ~</div> 0.1518 0.027 0.279 -0.3951 2012-09-30 0.2561 0.1322 highest quarterly return 0.1356 2011-12-31 0.0223 0.1445 Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. lowest quarterly return 2008-12-31 -0.2208 <div style="display:none">~ http://www.waddell.com/role/ScheduleAverageAnnualTotalReturnsTransposedWaddellAndReedAdvisorsSmallCapFund column period compact * ~</div> After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. The Class A return for the year through September 30, 2012 2012-09-30 0.1188 The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of broad-based securities market indices and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. Performance results include the effect of expense reduction arrangements for some or all of the periods shown. If those arrangements had not been in place, the performance results for those periods would have been lower. The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. Current performance may be lower or higher. Please visit www.waddell.com or call 888.WADDELL for the Funds updated performance. -0.0638 -0.0908 -0.0007 -0.0481 -0.015 -0.0025 -0.0165 -0.044 0.0546 0.0391 0.0465 0.0543 0.057 0.0717 0.0244 0.0219 highest quarterly return Waddell & Reed Advisors Value Fund seeks to achieve its objective by investing in the common stocks of primarily large capitalization companies that Waddell & Reed Investment Management Company (WRIMCO), the Funds investment manager, believes are undervalued, trading at a significant discount relative to the intrinsic value of the company as estimated by WRIMCO and/or are out of favor in the financial markets but have a favorable outlook for capital appreciation. Although the Fund primarily invests in securities issued by large capitalization companies (typically, companies with market capitalizations of at least $10 billion at the time of acquisition), it may invest in securities issued by companies of any size. The Fund seeks to be diversified across economic sectors in an effort to manage risk, and to prevent excess volatility. To identify securities for the Fund, WRIMCO primarily utilizes fundamental, bottom-up research while considering a top-down (assess the market environment) and quantitative analysis. The estimated intrinsic value of companies is primarily determined by WRIMCO based on cash flow generation, but other valuation factors are also considered, such as price to earnings and price to book value. WRIMCO also considers a companys asset growth, changes in share count, and changes in working capital. The Fund emphasizes companies which may have a clearly identifiable catalyst that WRIMCO believes will help the company achieve its estimated intrinsic value. The Fund typically holds a small number of stocks (generally 35 to 45). Many U.S. companies have diverse operations, with products or services in foreign markets. Therefore, the Fund will have an indirect exposure to foreign markets through investments in these companies. WRIMCO will typically sell a stock when, in WRIMCOs opinion, it reaches an acceptable price, its fundamental characteristics have changed or it has performed below WRIMCOs expectations. WRIMCO also may sell a security to reduce the Funds holding in that security, to take advantage of more attractive investment opportunities or to raise cash. 0.0625 0.0546 0.0547 0.0567 0.0582 0.0738 0.0529 0.0436 Principal Investment Risks 2007-09-30 0.1472 The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of broad-based securities market indices and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). lowest quarterly return 888.WADDELL 2008-12-31 -0.2164 www.waddell.com The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. 0.007 0.007 0.007 0.007 Chart of Year-by-Year Returns as of December 31 each year Average Annual Total Returns as of December 31, 2011 Principal Investment Risks 0.0025 0.01 0.01 0 0.0027 0.0043 0.0064 0.0021 -0.0365 -0.0365 -0.0237 -0.0299 0.0115 0.0252 0.0122 0.0234 0.0213 0.0091 0.0264 -0.0191 The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. 0.0124 0.0067 0.0107 0.011 0.0134 0.0281 0.0324 0.0275 0.0283 0.0263 0.0273 0.0423 0.025 0.0096 Waddell & Reed Advisors Energy Fund 0.026 0.0194 In the period shown in the chart, the highest quarterly return was 15.73% (the third quarter of 2005) and the lowest quarterly return was -19.34% (the third quarter of 2011). The Class A return for the year through September 30, 2012 was 13.48%. Objective Average Annual Total Returns as of December 31, 2011 As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. The Fund is not intended as a complete investment program. A variety of factors can affect the investment performance of the Fund and prevent it from achieving its objective. These include: <ul type="square"><li>Catalyst Risk. Investing in companies in anticipation of a catalyst carries the risk that certain of such catalysts may not happen or the market may react differently than expected to such catalysts, in which case the Fund may experience losses. </li></ul><ul type="square"><li>Company Risk. A company may perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. </li></ul><ul type="square"><li>Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the companys products or services in those foreign markets. As a result, a companys domicile and/or the markets in which the companys securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the companys products or services are sold.</li></ul><ul type="square"><li>Holdings Risk. The Fund typically holds a small number of stocks (generally 35 to 45). As a result, the appreciation or depreciation of any one security held by the Fund will have a greater impact on the Funds NAV than it would if the Fund invested in a larger number of securities.</li></ul><ul type="square"><li>Large Company Risk. Large capitalization companies may go in and out of favor based on market and economic conditions. Large capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large capitalization companies could trail the returns on investments in securities of smaller companies.</li></ul><ul type="square"><li>Management Risk. Fund performance is primarily dependent on WRIMCOs skill in evaluating and managing the Funds portfolio and the Fund may not perform as well as other similar mutual funds.</li></ul><ul type="square"><li>Market Risk. Adverse market conditions, sometimes in response to general economic or industry news, may cause the prices of the Funds holdings to fall as part of a broad market decline. The financial crisis in the U.S. and foreign economies over the past several years, including the European sovereign debt crisis, has resulted, and may continue to result, in an unusually high degree of volatility in the financial markets, both U.S. and foreign, and in the NAVs of many mutual funds, including to some extent the Fund. Global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Fund. These circumstances have also decreased liquidity in some markets and may continue to do so. In addition, certain unanticipated events, such as natural disasters, terrorist attacks, war, and other geopolitical events, can have a dramatic adverse effect on securities held by the Fund. </li></ul><ul type="square"><li>Value Stock Risk. Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor and, in the opinion of WRIMCO, undervalued. The value of a security believed by WRIMCO to be undervalued may never reach what is believed to be its full value, or such securitys value may decrease.</li></ul> To seek to provide capital growth and appreciation. Fees and Expenses This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. More information about these and other discounts is available from your financial professional and in the Sales Charge Reductions section on page 78 of the Funds prospectus and in the Purchase, Redemption and Pricing of Shares section on page 87 of the Funds statement of additional information (SAI). Shareholder Fees (fees paid directly from your investment) As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. Performance 0.0328 0.1093 0.1304 0.2367 0.2026 Average Annual Total Returns as of December 31, 2011 0.4361 -0.2593 0.2491 Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) 0.089 -0.0826 -0.1059 -0.1073 -0.0664 -0.0987 -0.0596 -0.0476 0.015 0.0285 The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. Performance results include the effect of expense reduction arrangements for some or all of the periods shown. If those arrangements had not been in place, the performance results for those periods would have been lower. The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. Current performance may be lower or higher. Please visit www.waddell.com or call 888.WADDELL for the Funds updated performance. -0.0189 -0.0208 -0.0156 -0.0193 -0.016 -0.0034 -0.0002 Portfolio Turnover 0.0037 The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 22% of the average value of its portfolio. 0.0466 0.0445 0.0409 0.0438 0.0448 0.0579 0.0552 0.0611 Example This example is intended to help you compare the cost of investing in the shares of the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the particular class of shares of the Fund for the time periods indicated and then redeem all your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: -0.1353 -0.1368 -0.0853 -0.1274 -0.0899 -0.0794 0.0785 0.0784 0.0021 0.0007 0.0211 -0.0575 692 637 0.0458 216 0.0303 0.0356 0.0476 0.0497 0.0617 93 0.0668 0.065 0.0182 0.0136 -0.0025 0.01 940 1030 667 290 1207 1350 -0.2757 1144 504 0.0919 0.079 0.078 0.0887 0.0893 0.1022 0.0589 0.3386 0.0578 0.0219 0.0185 0.0292 0.0607 0.1927 1967 2396 2462 1120 0.1165 0.0886 0.1356 -0.3754 0.4907 0.3175 -0.0067 692 237 216 93 940 730 667 290 1207 1250 1144 504 In the period shown in the chart, the highest quarterly return was 22.24% (the second quarter of 2009) and the lowest quarterly return was -23.02% (the fourth quarter of 2008). The Class A return for the year through September 30, 2012 was 9.49%. 1967 2396 2462 1120 2003-07-01 2003-07-01 2003-07-01 2003-07-01 2003-07-01 2003-07-01 The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). 0.0575 0 0 0 100000 You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. www.waddell.com 0.01 0.05 0.01 0 0.0858 0.0338 0.0212 -0.0216 -0.0106 -0.0336 -0.0287 0.0332 0.0268 0.0285 0.0329 888.WADDELL 0.0359 0.0486 0.0665 <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleTransposedWaddellAndReedAdvisorsInternationalGrowthFund column period compact * ~</div> The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. 0.0474 0.0417 0.0406 0.46 0.0429 0.0436 0.0568 As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. The Fund is not intended as a complete investment program. A variety of factors can affect the investment performance of the Fund and prevent it from achieving its objective. These include: <ul type="square"><li style="margin-left:-20px">Company Risk. A company may perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. </li><li style="margin-left:-20px">Concentration Risk. Because the Fund invests more than 25% of its total assets in the science and technology industry, the Funds performance may be more susceptible to a single economic, regulatory or technological occurrence than a fund that does not concentrate its investments in this industry. Securities of companies within specific industries or sectors of the economy may periodically perform differently than the overall market. In addition, the Funds performance may be more volatile than an investment in a portfolio of broad market securities and may underperform the market as a whole, due to the limited number of issuers of science and technology related securities. </li><li style="margin-left:-20px">Emerging Market Risk. Investments in countries with emerging economies or securities markets may carry greater risk than investments in more developed countries. Political and economic structures in many such countries may be undergoing significant evolution and rapid development, and such countries may lack the social, political and economic stability characteristic of more developed countries. Investments in securities issued in these countries may be more volatile and less liquid than securities issued in more developed countries. </li><li style="margin-left:-20px">Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the companys products or services in those foreign markets. As a result, a companys domicile and/or the markets in which the companys securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the companys products or services are sold. </li><li style="margin-left:-20px">Foreign Securities Risk. Investing in foreign securities involves a number of economic, financial, legal, and political considerations that may not be associated with the U.S. markets and that could affect the Funds performance unfavorably, depending upon the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; fluctuations in foreign currency exchange rates and related conversion costs; adverse foreign tax consequences; different and/or less stringent financial reporting standards; custody; and settlement delays. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate.</li><li style="margin-left:-20px">Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may not perform as well as value stocks or the stock market in general. </li><li style="margin-left:-20px">Holdings Risk. The Fund typically holds a small number of stocks (generally 45 to 65), and the Funds portfolio manager also tends to invest a significant portion of the Funds total assets in a limited number of stocks. As a result, the appreciation or depreciation of any one security held by the Fund will have a greater impact on the Funds net asset value than it would if the Fund invested in a larger number of securities or if the Funds portfolio manager invested a greater portion of the Funds total assets in a larger number of stocks. </li><li style="margin-left:-20px">Large Company Risk. Large capitalization companies may go in and out of favor based on market and economic conditions. Large capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large capitalization companies could trail the returns on investments in securities of smaller companies. </li><li style="margin-left:-20px">Liquidity Risk. Generally, a security is liquid if the Fund is able to sell the security at a fair price within a reasonable time. Liquidity is generally related to the market trading volume for a particular security. Illiquid securities may trade at a discount from comparable, more liquid investments, and may be subject to wider fluctuations in market value. Less liquid securities are more difficult to dispose of at their recorded values and are subject to increased spreads and volatility. Also, the Fund may not be able to dispose of illiquid securities when that would be beneficial at a favorable time or price. </li><li style="margin-left:-20px">Management Risk. Fund performance is primarily dependent on WRIMCOs skill in evaluating and managing the Funds portfolio and the Fund may not perform as well as other similar mutual funds. </li><li style="margin-left:-20px">Market Risk. Adverse market conditions, sometimes in response to general economic or industry news, may cause the prices of the Funds holdings to fall as part of a broad market decline. The financial crisis in the U.S. and foreign economies over the past several years, including the European sovereign debt crisis, has resulted, and may continue to result, in an unusually high degree of volatility in the financial markets, both U.S. and foreign, and in the NAVs of many mutual funds, including to some extent the Fund. Global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Fund. These circumstances have also decreased liquidity in some markets and may continue to do so. In addition, certain unanticipated events, such as natural disasters, terrorist attacks, war, and other geopolitical events, can have a dramatic adverse effect on securities held by the Fund. </li><li style="margin-left:-20px">Mid Size Company Risk. Securities of mid capitalization companies may be more vulnerable to adverse developments than those of large companies due to such companies limited product lines, limited markets and financial resources and dependence upon a relatively small management group. Securities of mid capitalization companies may be more volatile and less liquid than the stocks of larger companies and may be more affected than other types of stocks by the underperformance of a sector or during market downturns. </li><li style="margin-left:-20px">Science and Technology Industry Risk. Investment risks associated with investing in science and technology securities, in addition to other risks, include: operating in rapidly changing fields, abrupt or erratic market movements, limited product lines, markets or financial resources, management that is dependent on a limited number of people, short product cycles, aggressive pricing of products and services, new market entrants and obsolescence of existing technology. </li><li style="margin-left:-20px">Small Company Risk. Equity securities of small capitalization companies are subject to greater price volatility, lower trading volume and less liquidity due to, among other things, such companies small size, limited product lines, limited access to financing sources and limited management depth. In addition, the frequency and volume of trading of such securities may be less than is typical of larger companies, making them subject to wider price fluctuations and such securities may be more affected than other types of stocks by the underperformance of a sector or during market downturns. In some cases, there could be difficulties in selling securities of small capitalization companies at the desired time. </li></ul> Chart of Year-by-Year Returns as of December 31 each year The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. 0.0594 The Class A return for the year through September 30, 2012 highest quarterly return <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleNoRedemptionTransposedWaddellAndReedAdvisorsInternationalGrowthFund column period compact * ~</div> lowest quarterly return -0.1551 0.2448 0.1428 0.0396 You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. 0.166 0.0169 -0.3433 0.2604 0.1806 100000 -0.0753 Waddell & Reed Advisors Continental Income Fund 2012-09-30 0.0949 2009-06-30 Objective 0.2224 To seek to provide total return through a combination of capital appreciation and current income. 2008-12-31 -0.2302 Fees and Expenses As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. 0.0085 0.0085 0.0085 0.0085 0.0025 0.01 0.01 0 This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. More information about these and other discounts is available from your financial professional and in the Sales Charge Reductions section on page 78 of the Funds prospectus and in the Purchase, Redemption and Pricing of Shares section on page 87 of the Funds statement of additional information (SAI). 0.0058 0.0104 0.0065 0.0026 0.0168 0.0289 0.025 0.0111 Shareholder Fees (fees paid directly from your investment) In the period shown in the chart, the highest quarterly return was 19.83% (the third quarter of 2009) and the lowest quarterly return was -20.00% (the third quarter of 2011). The Class A return for the year through September 30, 2012 was 14.90%. The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). Annual Fund Operating Expenses (expenses that you pay each year as a % of the value of your investment) Portfolio Turnover <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualFundOperatingExpensesWaddellAndReedAdvisorsContinentalIncomeFund column period compact * ~</div> 888.WADDELL After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. Example Principal Investment Strategies Principal Investment Risks After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. Performance After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. www.waddell.com Chart of Year-by-Year Returns as of December 31 each year 736 692 253 113 Average Annual Total Returns as of December 31, 2011 1074 1195 779 353 1435 1623 1331 612 The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 37% of the average value of its portfolio. Average Annual Total Returns as of December 31, 2011 2448 Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. 2927 2836 1352 The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. <div style="display:none">~ http://www.waddell.com/role/ScheduleShareholderFeesWaddellAndReedAdvisorsTaxManagedEquityFund column period compact * ~</div> This example is intended to help you compare the cost of investing in the shares of the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the particular class of shares of the Fund for the time periods indicated and then redeem all your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleTransposedWaddellAndReedAdvisorsContinentalIncomeFund column period compact * ~</div> -0.1285 -0.1298 -0.0813 -0.1223 -0.0831 -0.0712 0.0039 -0.0224 -0.0283 -0.032 -0.0234 -0.0286 -0.0258 -0.0122 -0.0264 -0.0268 0.0287 0.0389 0.0343 0.0204 0.0194 0.0235 The Class A return for the year through September 30, 2012 0.0192 0.0208 After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. highest quarterly return lowest quarterly return 2012-09-30 736 292 253 113 2009-06-30 1074 895 779 353 0.1422 0.138 Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. -0.1837 1435 1523 1331 Waddell & Reed Advisors Continental Income Fund seeks to achieve its objective by investing primarily in a mix of stocks, debt securities and short-term instruments, depending on market conditions. Regarding its equity investments, the Fund invests primarily in medium to large, well-established companies that usually issue dividend-paying securities. The Fund owns common stocks in order to provide possible appreciation of capital and some dividend income. In general, the Fund invests a portion of its total assets in either debt securities or preferred stocks, or both, in order to provide income and relative stability of capital. The Fund ordinarily invests at least 25% of its total assets in fixed-income securities. The majority of the Funds debt securities are either U.S. government securities or investment-grade corporate bonds, including bonds rated BBB- or higher by Standard & Poors, a division of The McGraw-Hill Companies, Inc. (S&P), or comparably rated by another nationally recognized statistical rating organization (NRSRO) or, if unrated, determined by Waddell & Reed Investment Management Company (WRIMCO), the Funds investment manager, to be of comparable quality. The Fund has no limitations on the range of maturities of the debt securities in which it may invest, or on the size of companies in which it may invest. In selecting equity securities for the Fund, WRIMCO follows a core investing strategy and seeks companies that it believes possess attractive business economics, are in a strong financial condition and are selling at attractive valuations, both on a relative and an absolute basis. WRIMCO also considers a companys potential for dividend growth, its growth and profitability opportunities and sustainability, its relative strength in earnings, its management, improving fundamentals and valuation, its balance sheet, its stock price value, and the condition of the respective industry. In selecting debt securities for the Fund, WRIMCO generally seeks high-quality securities with minimal credit risk. Many U.S. companies have diverse operations, with products or services in foreign markets. Therefore, the Fund will have an indirect exposure to foreign markets through investments in these companies. Generally, in determining whether to sell an equity security or a debt security, WRIMCO uses the same analysis as identified above in order to determine if the equity security is still undervalued or has met its anticipated price. In determining whether to sell a debt security, WRIMCO will consider whether the security continues to maintain its minimal credit risk. WRIMCO may also sell a security if the security ceases to produce income, to reduce the Funds holding in that security, to take advantage of more attractive investment opportunities or to raise cash. 612 <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleNoRedemptionTransposedWaddellAndReedAdvisorsContinentalIncomeFund column period compact * ~</div> 2448 2927 2836 1352 After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualFundOperatingExpensesWaddellAndReedAdvisorsTaxManagedEquityFund column period compact * ~</div> You would pay the following expenses if you did not redeem your shares: Principal Investment Strategies Performance <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleTransposedWaddellAndReedAdvisorsTaxManagedEquityFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleNoRedemptionTransposedWaddellAndReedAdvisorsTaxManagedEquityFund column period compact * ~</div> The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. Performance results include the effect of expense reduction arrangements for some or all of the periods shown. If those arrangements had not been in place, the performance results for those periods would have been lower. The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. Current performance may be lower or higher. Please visit www.waddell.com or call 888.WADDELL for the Funds updated performance. Waddell & Reed Advisors Energy Fund seeks to achieve its objective by investing, under normal circumstances, at least 80% of its net assets in securities of companies within the energy sector, which includes all aspects of the energy industry, such as exploration, discovery, production, distribution or infrastructure of energy and/or alternative energy sources. These companies may include, but are not limited to, oil companies, oil and gas exploration companies, natural gas pipeline companies, refinery companies, energy conservation companies, coal, transporters, utilities, alternative energy companies and innovative energy technology companies. The Fund also may invest in companies that are not within the energy sector that are engaged in the development of products and services to enhance energy efficiency for the users of those products and services. The Fund invests in a blend of value and growth companies domiciled throughout the world, including, potentially, companies domiciled or traded in emerging markets. The Fund may invest up to 100% of its total assets in foreign securities. After conducting a top-down market analysis of the energy industry and then identifying trends and sectors, Waddell & Reed Investment Management Company (WRIMCO), the Funds investment manager, uses a research-oriented, bottom-up investment approach when selecting securities for the Fund, focusing on company fundamentals and growth prospects. In general, the Fund emphasizes companies that WRIMCO believes are strongly managed and can generate above-average capital growth and appreciation. Many U.S. companies have diverse operations, with products or services in foreign markets. Therefore, the Fund will have an indirect exposure to foreign markets through investments in these companies. Generally, in determining whether to sell a security, WRIMCO uses the same type of analysis that it uses in buying securities to determine whether the security has ceased to offer significant growth potential, has become undervalued and/or whether the prospects of the issuer have deteriorated. WRIMCO may also sell a security to reduce the Funds holding in that security, to take advantage of more attractive investment opportunities or to raise cash. <div style="display:none">~ http://www.waddell.com/role/ScheduleShareholderFeesWaddellAndReedAdvisorsVanguardFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualTotalReturnsWaddellAndReedAdvisorsTaxManagedEquityFundBarChart column period compact * ~</div> Average Annual Total Returns as of December 31, 2011 <div style="display:none">~ http://www.waddell.com/role/ScheduleAverageAnnualTotalReturnsTransposedWaddellAndReedAdvisorsTaxManagedEquityFund column period compact * ~</div> Chart of Year-by-Year Returns as of December 31 each year After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualFundOperatingExpensesWaddellAndReedAdvisorsVanguardFund column period compact * ~</div> Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. -0.2678 0.3201 0.162 0.172 0.0757 After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. 0.2422 -0.3325 0.4273 0.1216 -0.0616 Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleTransposedWaddellAndReedAdvisorsVanguardFund column period compact * ~</div> After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. The Class A return for the year through September 30, 2012 2012-09-30 0.1348 highest quarterly return 2005-09-30 0.1573 In the period shown in the chart, the highest quarterly return was 14.79% (the second quarter of 2009) and the lowest quarterly return was -18.20% (the first quarter of 2008). The Class A return for the year through September 30, 2012 was 26.15%. <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleNoRedemptionTransposedWaddellAndReedAdvisorsVanguardFund column period compact * ~</div> lowest quarterly return 2011-09-30 <div style="display:none">~ http://www.waddell.com/role/ScheduleShareholderFeesWaddellAndReedAdvisorsNewConceptsFund column period compact * ~</div> -0.1934 Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualFundOperatingExpensesWaddellAndReedAdvisorsNewConceptsFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualTotalReturnsWaddellAndReedAdvisorsVanguardFundBarChart column period compact * ~</div> Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. The Class A return for the year through September 30, 2012 2012-09-30 0.2615 highest quarterly return 2009-06-30 0.1479 lowest quarterly return 2008-03-31 -0.182 <div style="display:none">~ http://www.waddell.com/role/ScheduleAverageAnnualTotalReturnsTransposedWaddellAndReedAdvisorsVanguardFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleTransposedWaddellAndReedAdvisorsNewConceptsFund column period compact * ~</div> As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. The Fund is not intended as a complete investment program. A variety of factors can affect the investment performance of the Fund and prevent it from achieving its objective. These include: <ul type="square"><li style="margin-left:-20px">Company Risk A company may perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. </li><li style="margin-left:-20px">Credit Risk. An issuer of a fixed-income obligation may not make payments on the obligation when due or may default on its obligation. </li><li style="margin-left:-20px">Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the companys products or services in those foreign markets. As a result, a companys domicile and/or the markets in which the companys securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the companys products or services are sold. </li><li style="margin-left:-20px">Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may not perform as well as value stocks or the stock market in general. </li><li style="margin-left:-20px">Interest Rate Risk. A rise in interest rates may cause a decline in the value of the Funds securities, especially bonds with longer maturities. A decline in interest rates may cause the Fund to experience a decline in its income. </li><li style="margin-left:-20px">Large Company Risk. Large capitalization companies may go in and out of favor based on market and economic conditions. Large capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on investments in securities of large capitalization companies could trail the returns on investments in securities of smaller companies. </li><li style="margin-left:-20px">Management Risk. Fund performance is primarily dependent on WRIMCOs skill in evaluating and managing the Funds portfolio and the Fund may not perform as well as other similar mutual funds. </li><li style="margin-left:-20px">Market Risk. Adverse market conditions, sometimes in response to general economic or industry news, may cause the prices of the Funds holdings to fall as part of a broad market decline. The financial crisis in the U.S. and foreign economies over the past several years, including the European sovereign debt crisis, has resulted, and may continue to result, in an unusually high degree of volatility in the financial markets, both U.S. and foreign, and in the NAVs of many mutual funds, including to some extent the Fund. Global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Fund. These circumstances have also decreased liquidity in some markets and may continue to do so. In addition, certain unanticipated events, such as natural disasters, terrorist attacks, war, and other geopolitical events, can have a dramatic adverse effect on securities held by the Fund. </li><li style="margin-left:-20px">Mid Size Company Risk. Securities of mid capitalization companies may be more vulnerable to adverse developments than those of large companies due to such companies limited product lines, limited markets and financial resources and dependence upon a relatively small management group. Securities of mid capitalization companies may be more volatile and less liquid than the stocks of larger companies and may be more affected than other types of stocks by the underperformance of a sector or during market downturns.</li><li style="margin-left:-20px">Reinvestment Risk. A decline in interest rates may cause issuers to prepay higher-yielding bonds held by the Fund, resulting in the Fund reinvesting in securities with lower yields, which may cause a decline in its income. </li><li style="margin-left:-20px">Value Stock Risk. Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor and, in the opinion of WRIMCO, undervalued. The value of a security believed by WRIMCO to be undervalued may never reach what is believed to be its full value, or such securitys value may decrease. </li></ul> Principal Investment Risks As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. The Fund is not intended as a complete investment program. A variety of factors can affect the investment performance of the Fund and prevent it from achieving its objective. These include: <ul type="square"><li style="margin-left:-20px">Company Risk. A company may perform worse than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company. </li><li style="margin-left:-20px">Concentration Risk. Because the Fund invests more than 25% of its total assets in the energy related industry, the Funds performance may be more susceptible to a single economic, regulatory or technological occurrence than a fund that does not concentrate its investments in this industry. Securities of companies within specific industries or sectors of the economy may periodically perform differently than the overall market. In addition, the Funds performance may be more volatile than an investment in a portfolio of broad market securities and may underperform the market as a whole, due to the limited number of issuers of energy-related securities. </li><li style="margin-left:-20px">Emerging Market Risk. Investments in countries with emerging economies or securities markets may carry greater risk than investments in more developed countries. Political and economic structures in many such countries may be undergoing significant evolution and rapid development, and such countries may lack the social, political and economic stability characteristic of more developed countries. Investments in securities issued in these countries may be more volatile and less liquid than securities issued in more developed countries. </li><li style="margin-left:-20px">Energy Industry Risk. Investment risks associated with investing in energy securities, in addition to other risks, include price fluctuation caused by real and perceived inflationary trends and political developments, the cost assumed in complying with environmental safety regulations, demand of energy fuels, energy conservation, the success of exploration projects, and tax and other governmental regulations. </li><li style="margin-left:-20px">Foreign Exposure Risk. The securities of many companies may have significant exposure to foreign markets as a result of the companys products or services in those foreign markets. As a result, a companys domicile and/or the markets in which the companys securities trade may not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely affect those markets in which the companys products or services are sold. </li><li style="margin-left:-20px">Foreign Securities Risk. Investing in foreign securities involves a number of economic, financial, legal, and political considerations that may not be associated with the U.S. markets and that could affect the Funds performance unfavorably, depending upon the prevailing conditions at any given time. Among these potential risks are: greater price volatility; comparatively weak supervision and regulation of securities exchanges, brokers and issuers; higher brokerage costs; fluctuations in foreign currency exchange rates and related conversion costs; adverse foreign tax consequences; different and/or less stringent financial reporting standards; custody; and settlement delays. In addition, key information about the issuer, the markets or the local government or economy may be unavailable, incomplete or inaccurate. </li><li style="margin-left:-20px">Growth Stock Risk. Prices of growth stocks may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may not perform as well as value stocks or the stock market in general. </li><li style="margin-left:-20px">Management Risk. Fund performance is primarily dependent on WRIMCOs skill in evaluating and managing the Funds portfolio and the Fund may not perform as well as other similar mutual funds. </li><li style="margin-left:-20px">Market Risk. Adverse market conditions, sometimes in response to general economic or industry news, may cause the prices of the Funds holdings to fall as part of a broad market decline. The financial crisis in the U.S. and foreign economies over the past several years, including the European sovereign debt crisis, has resulted, and may continue to result, in an unusually high degree of volatility in the financial markets, both U.S. and foreign, and in the NAVs of many mutual funds, including to some extent the Fund. Global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect securities held by the Fund. These circumstances have also decreased liquidity in some markets and may continue to do so. In addition, certain unanticipated events, such as natural disasters, terrorist attacks, war, and other geopolitical events, can have a dramatic adverse effect on securities held by the Fund. </li><li style="margin-left:-20px">Value Stock Risk. Value stocks are stocks of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor and, in the opinion of WRIMCO, undervalued. The value of a security believed by WRIMCO to be undervalued may never reach what is believed to be its full value, or such securitys value may decrease. </li></ul> <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualTotalReturnsWaddellAndReedAdvisorsContinentalIncomeFundBarChart column period compact * ~</div> 2012-09-30 0.149 highest quarterly return 2009-09-30 Average Annual Total Returns as of December 31, 2011 0.1983 lowest quarterly return <div style="display:none">~ http://www.waddell.com/role/ScheduleShareholderFeesWaddellAndReedAdvisorsDividendOpportunitiesFund column period compact * ~</div> 2011-09-30 -0.2 <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleNoRedemptionTransposedWaddellAndReedAdvisorsNewConceptsFund column period compact * ~</div> The Class A return for the year through September 30, 2012 <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualFundOperatingExpensesWaddellAndReedAdvisorsDividendOpportunitiesFund column period compact * ~</div> 0.1911 0.0758 0.0474 Performance 0.1085 <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualTotalReturnsWaddellAndReedAdvisorsNewConceptsFundBarChart column period compact * ~</div> 0.129 0.1445 0.1648 0.0306 <div style="display:none">~ http://www.waddell.com/role/ScheduleAverageAnnualTotalReturnsTransposedWaddellAndReedAdvisorsContinentalIncomeFund column period compact * ~</div> Chart of Year-by-Year Returns as of December 31 each year <div style="display:none">~ http://www.waddell.com/role/ScheduleAverageAnnualTotalReturnsTransposedWaddellAndReedAdvisorsNewConceptsFund column period compact * ~</div> The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of broad-based securities market indices and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. Performance results include the effect of expense reduction arrangements for some or all of the periods shown. If those arrangements had not been in place, the performance results for those periods would have been lower. The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. Current performance may be lower or higher. Please visit www.waddell.com or call 888.WADDELL for the Funds updated performance. In the period shown in the chart, the highest quarterly return was 23.47% (the second quarter of 2008) and the lowest quarterly return was -33.56% (the third quarter of 2008). The Class A return for the year through September 30, 2012 was 0.58%. -0.1155 -0.129 -0.0574 -0.1048 -0.0694 -0.0574 -0.0088 -0.0737 <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualTotalReturnsWaddellReedAdvisorsDividendOpportunitiesFundBarChart column period compact * ~</div> 0.0326 0.0173 0.0267 0.0319 0.0342 0.0486 0.0384 0.0248 0.0521 0.041 0.0442 0.0455 0.0462 0.0623 0.0244 0.0214 <div style="display:none">~ http://www.waddell.com/role/ScheduleAverageAnnualTotalReturnsTransposedWaddellAndReedAdvisorsDividendOpportunitiesFund column period compact * ~</div> 2008-12-31 highest quarterly return The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. Current performance may be lower or higher. Please visit www.waddell.com or call 888.WADDELL for the Funds updated performance. 2009-09-30 0.1075 lowest quarterly return -0.1139 2011-09-30 The Class A return for the year through September 30, 2012 0.1177 2012-09-30 <div style="display:none">~ http://www.waddell.com/role/ScheduleShareholderFeesWaddellAndReedAdvisorsAssetStrategyFund column period compact * ~</div> Average Annual Total Returns as of December 31, 2011 <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualFundOperatingExpensesWaddellAndReedAdvisorsAssetStrategyFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleTransposedWaddellAndReedAdvisorsAssetStrategyFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleNoRedemptionTransposedWaddellAndReedAdvisorsAssetStrategyFund column period compact * ~</div> 0.37 <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleTransposedWaddellAndReedAdvisorsDividendOpportunitiesFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleShareholderFeesWaddellandReedAdvisorsValueFund column period compact * ~</div> 888.WADDELL www.waddell.com <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualFundOperatingExpensesWaddellandReedAdvisorsValueFund column period compact * ~</div> You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. 0.42 100000 <div style="display:none">~ http://www.waddell.com/role/ScheduleAverageAnnualTotalReturnsTransposedWaddellAndReedAdvisorsAssetStrategyFund column period compact * ~</div> As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. 100000 As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleTransposedWaddellandReedAdvisorsValueFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleNoRedemptionTransposedWaddellandReedAdvisorsValueFund column period compact * ~</div> 0.22 You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). 100000 As with any mutual fund, the value of the Funds shares will change, and you could lose money on your investment. The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). 888.WADDELL www.waddell.com The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualTotalReturnsWaddellandReedAdvisorsValueFundBarChart column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleAverageAnnualTotalReturnsTransposedWaddellandReedAdvisorsValueFund column period compact * ~</div> The Class A return for the year through September 30, 2012 888.WADDELL 2012-09-30 0.0058 highest quarterly return 2008-06-30 0.2347 lowest quarterly return 2008-09-30 -0.3356 www.waddell.com <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualTotalReturnsWaddellAndReedAdvisorsAssetStrategyFundBarChart column period compact * ~</div> After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). 0.5248 -0.4703 0.3967 0.2227 -0.1018 The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. -0.1534 -0.1534 -0.0997 -0.1473 -0.1087 -0.0969 0.0392 -0.0575 0.0315 0.0307 0.0268 0.0307 0.0356 0.0498 0.0486 0.0226 0.0287 0.028 0.0245 0.0266 0.0313 0.045 0.0698 0.0258 The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. You would pay the following expenses if you did not redeem your shares: You would pay the following expenses if you did not redeem your shares: The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown. 0.0874 0.0211 -0.0124 0.0655 -0.0025 0.0071 0.0585 0.0292 0.0381 In the period shown in the chart, the highest quarterly return was 10.75% (the third quarter of 2009) and the lowest quarterly return was -11.39% (the third quarter of 2011). The Class A return for the year through September 30, 2012 was 11.77%. <div style="display:none">~ http://www.waddell.com/role/ScheduleShareholderFeesWaddellAndReedAdvisorsEnergyFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleTransposedWaddellAndReedAdvisorsEnergyFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualFundOperatingExpensesWaddellAndReedAdvisorsEnergyFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleNoRedemptionTransposedWaddellAndReedAdvisorsEnergyFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleShareholderFeesWaddellAndReedAdvisorsScienceandTechnologyFund column period compact * ~</div> -0.0926 -0.1948 <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualFundOperatingExpensesWaddellAndReedAdvisorsScienceandTechnologyFund column period compact * ~</div> 2006-03-01 2006-03-01 2006-03-01 2006-03-01 <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleTransposedWaddellAndReedAdvisorsScienceandTechnologyFund column period compact * ~</div> 0.0575 0 0 <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleNoRedemptionTransposedWaddellAndReedAdvisorsScienceandTechnologyFund column period compact * ~</div> 0.01 0.05 0.01 0 0 <div style="display:none">~ http://www.waddell.com/role/ScheduleShareholderFeesWaddellAndReedAdvisorsContinentalIncomeFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualTotalReturnsWaddellAndReedAdvisorsEnergyFundBarChart column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleAnnualTotalReturnsWaddellAndReedAdvisorsScienceandTechnologyFundBarChart column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleAverageAnnualTotalReturnsTransposedWaddellAndReedAdvisorsScienceandTechnologyFund column period compact * ~</div> <div style="display:none">~ http://www.waddell.com/role/ScheduleAverageAnnualTotalReturnsTransposedWaddellAndReedAdvisorsEnergyFund column period compact * ~</div> 2003-07-01 2003-07-01 The Funds past performance (before and after taxes) does not necessarily indicate how it will perform in the future. 100000 You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary. Return After Taxes on Distributions and Sale of Fund Shares may be better than Return Before Taxes due to an assumed tax benefit from losses on a sale of the Funds shares at the end of the period. The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of broad-based securities market indices and a Lipper peer group (a universe of mutual funds with investment objectives similar to that of the Fund). Average Annual Total Returns as of December 31, 2011 2006-03-01 2006-03-01 2006-03-01 2006-03-01 <div style="display:none">~ http://www.waddell.com/role/ScheduleExpenseExampleNoRedemptionTransposedWaddellAndReedAdvisorsDividendOpportunitiesFund column period compact * ~</div> Waddell & Reed Advisors Energy Fund seeks to achieve its objective by investing, under normal circumstances, at least 80% of its net assets in securities of companies within the energy sector, which includes all aspects of the energy industry, such as exploration, discovery, production, distribution or infrastructure of energy and/or alternative energy sources. Waddell & Reed Advisors Science and Technology Fund invests primarily in the equity securities of science and technology companies around the globe. Under normal circumstances, the Fund invests at least 80% of its net assets in securities of science or technology companies. For Class A shares, a 1% contingent deferred sales charge (CDSC) is only imposed on Class A shares that were purchased at net asset value (NAV) for $1 million or more that are subsequently redeemed within 12 months of purchase. For Class B shares, the CDSC declines from 5% for redemptions within the first year of purchase, to 4% for redemptions within the second year, to 3% for redemptions within the third and fourth years, to 2% for redemptions within the fifth year, to 1% for redemptions within the sixth year and to 0% for redemptions after the sixth year. For Class C shares, a 1% CDSC applies to redemptions within 12 months of purchase. For Class A shares, a 1% contingent deferred sales charge (CDSC) is only imposed on Class A shares that were purchased at net asset value (NAV) for $1 million or more that are subsequently redeemed within 12 months of purchase. For Class B shares, the CDSC declines from 5% for redemptions within the first year of purchase, to 4% for redemptions within the second year, to 3% for redemptions within the third and fourth years, to 2% for redemptions within the fifth year, to 1% for redemptions within the sixth year and to 0% for redemptions after the sixth year. For Class C shares, a 1% CDSC applies to redemptions within 12 months of purchase. For Class A shares, a 1% contingent deferred sales charge (CDSC) is only imposed on Class A shares that were purchased at net asset value (NAV) for $1 million or more that are subsequently redeemed within 12 months of purchase. For Class B shares, the CDSC declines from 5% for redemptions within the first year of purchase, to 4% for redemptions within the second year, to 3% for redemptions within the third and fourth years, to 2% for redemptions within the fifth year, to 1% for redemptions within the sixth year and to 0% for redemptions after the sixth year. For Class C shares, a 1% CDSC applies to redemptions within 12 months of purchase.