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WADDELL & REED ADVISORS FUNDS

6300 Lamar Avenue

P. O. Box 29217

Shawnee Mission, Kansas 66201-9217

913-236-2000

888-WADDELL

October 30, 2015

STATEMENT OF ADDITIONAL INFORMATION

Waddell & Reed Advisors Funds (Trust) is an open-end management investment company that currently consists of 20 separate series (each, a Fund and collectively, the Funds), which are listed above. This Statement of Additional Information (SAI) is not a prospectus. Investors should read this SAI in conjunction with the prospectus dated October 30, 2015 for the Waddell & Reed Advisors Equity Funds or the prospectus dated January 30, 2015 for the Waddell & Reed Advisors Fixed Income and Money Market Funds (collectively, the Prospectus), which may be obtained, without charge, upon request, from the Trust or its underwriter, Waddell & Reed, Inc. (Waddell & Reed), at the address or telephone number shown above.

This SAI incorporates by reference certain information that appears in the Funds Annual Reports, which are delivered to all current shareholders. To obtain a copy of the Funds most recent Annual and/or Semiannual Reports, without charge, contact the Trust or Waddell & Reed at the address or telephone number above. Copies of the Annual and/or Semiannual Reports are also available at www.waddell.com .

TABLE OF CONTENTS

FUND HISTORY

Waddell & Reed Advisors Funds was organized as a Delaware statutory trust on October 14, 2008. On January 30, 2009, each of the then-existing 21 series of the Trust became the successor to one of 16 Maryland corporations, or to one of the series of one of these Maryland corporations, that comprised the Waddell & Reed Advisors Family of Funds.

THE FUNDS, THEIR INVESTMENTS, RELATED RISKS AND RESTRICTIONS

Each Fund is a mutual fund, an investment that pools shareholders money and invests it toward a specified objective. Each Fund is an open-end, diversified management investment company and a series of the Trust.

This SAI supplements the information contained in each Prospectus and contains more detailed information about the investment strategies and policies that the Funds investment manager, Waddell & Reed Investment Management Company (WRIMCO), may employ and the types of instruments in which a Fund may invest, in pursuit of the Funds objective(s). A summary of the risks associated with these instrument types and investment practices is included as well.

Unless otherwise indicated, WRIMCO may buy the types of instruments and use the investment techniques described below, subject to any applicable investment policies and restrictions. WRIMCO might not buy all of these instruments or use all of these techniques, or use them to the full extent permitted by a Funds investment policies and restrictions. WRIMCO buys an instrument or uses a technique only if it believes that doing so is in pursuit of a Funds objective. See Investment Restrictions for a listing of the fundamental and non-fundamental, or operating, policies.

Recent Market Conditions

The financial crisis that started in 2008 continues to affect the U.S. and many foreign economies. The crisis and its after-effects have resulted, and may continue to result, in an unusually high degree of volatility in the financial markets, both domestic and foreign. Both domestic and international equity and fixed-income markets have experienced heightened volatility and turmoil. It is uncertain how long these conditions will continue.

Conditions in the U.S. and many foreign economies have resulted, and may continue to result, in fixed-income instruments experiencing unusual liquidity issues, increased price volatility and, in some cases, credit downgrades and increased likelihood of default. These events have reduced the willingness and ability of some lenders to extend credit, and have made it more difficult for borrowers to obtain financing on attractive terms, if at all. In some cases, traditional market participants have been less willing to make a market in some types of debt instruments, which has affected the liquidity of those instruments. During times of market turmoil, investors tend to look to the safety of securities issued or backed by the U.S. Department of the Treasury (Treasury), causing the prices of these securities to rise and the yields to decline. The reduced liquidity in fixed-income and credit markets may negatively affect many issuers worldwide. In addition, global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region might adversely impact issuers in a different country or region.

In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks took a number of steps in an attempt to support financial markets, including monetary stimulus programs known as quantitative easing. Recently, the Federal Reserve has ceased its quantitative easing program. Such withdrawal of this support, or failure to implement other support or efforts in response to the crisis, and/or investor perception that such efforts did not succeed, could adversely impact the value and liquidity of certain securities. Because the situation is widespread and largely unprecedented, it may be unusually difficult to identify both risks and opportunities using past models of the interplay of market forces, or to project the duration of these market conditions. The severity or duration of these conditions also may be affected by policy changes made by governments or quasi-governmental organizations. Changes in market conditions will not have the same impact on all types of...


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