INVESCO INCOME FUNDS, INC.
INVESCO Short-Term Bond Fund
INVESCO High Yield Fund
INVESCO Select Income Fund
INVESCO U.S. Government Securities Fund
Supplement to Prospectuses
dated December 29, 1995
All Funds:
The sixth paragraph in the section of each Fund's Prospectus entitled "The
Fund and Its Management" is hereby amended to read as follows:
Under a Transfer Agency Agreement, IFG acts as registrar, transfer
agent and dividend disbursing agent for the Fund. The Fund pays an annual
fee of $26.00 per shareholder account or omnibus account participant for
these services. Registered broker-dealers, third party administrators of
tax-qualified retirement plans and other entities, including affiliates of
IFG, may provide equivalent services to the Fund. In these cases, IFG may
pay, out of the fee it receives from the Fund, an annual sub-transfer
agency or record-keeping fee to the third party.
INVESCO Short-Term Bond Fund Only:
The section of the Short-Term Bond Fund's Prospectus entitled "Annual Fund
Expenses" is amended to read as follows:
Annual Fund Expenses
The Fund is no-load; there are no fees to purchase, exchange or
redeem shares. The Fund, however, is authorized to pay a Rule 12b-1
distribution fee of up to one quarter of one percent of the Fund's average
net assets each year. (See "How To Buy Shares--Distribution Expenses.")
Like any company, the Fund has operating expenses -- such as
portfolio management, accounting, shareholder servicing, maintenance of
shareholder accounts, and other expenses. These expenses are paid from the
Fund's assets. Lower expenses therefore benefit investors by increasing
the Fund's investment return.
We calculate annual operating expenses as a percentage of the Fund's
average annual net assets. To keep expenses competitive, the Fund's
manager voluntarily reimbursed the Fund for amounts in excess of 0.75% of
average net assets from May 1, 1995 through April 30, 1996, and reimburses
the Fund for amounts in excess of 0.80% of average net assets effective
May 1, 1996.
Annual Fund Operating Expenses (as a percentage of average net assets)*
Management Fee................................... 0.50%
12b-1 Fees....................................... 0.25%
Other Expenses (after absorbed expenses)(1)...... 0.05%
Total Fund Operating Expenses
(after absorbed expenses) (1)............... 0.80%
(1) In the absence of the voluntary expense limitation, the Fund's "Other
Expenses" and "Total Fund Operating Expenses" would have been 1.34% and
2.09%, respectively, based on the Fund's actual expenses for the fiscal
year ended August 31, 1995.
Example*
A shareholder would pay the following expenses on a $1,000
investment for the periods shown, assuming a hypothetical 5% annual return
and redemption at the end of each time period. (Of course, actual
operating expenses are paid from the Fund's assets, and are deducted from
the amount of income available for distribution to shareholders; they are
not charged directly to shareholder accounts.)
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1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$8 $26 $45 $99
The purpose of this table is to assist you in understanding the
various costs and expenses that you will bear directly or indirectly. The
example should not be considered a representation of past or future
performance or expenses, and actual annual returns and expenses may be
greater or less than those shown. For more information on the Fund's
expenses, see "The Fund and Its Management" and "How to Buy Shares --
Distribution Expenses."
Since the Fund pays a distribution fee, investors who own Fund
shares for a long period of time may pay more than the economic equivalent
of the maximum front-end sales charge permitted for mutual funds by the
National Association of Securities Dealers, Inc.
*The expense information in the above tables has been presented on a
basis that assumes that the FundAEs current 0.80% expense limitation had
been in effect during the year ended August 31, 1995.
The eighth paragraph in the section of the Short-Term Bond Fund's
Prospectus entitled "The Fund and Its Management" is hereby amended to read as
follows:
The Fund's expenses, which are accrued daily, are deducted from
total income before dividends are paid. Total expenses of the Fund for the
fiscal year ended August 31, 1995, including investment management fees
(but excluding brokerage commissions, which are a cost of acquiring
securities), amounted to 0.75% of the Fund's average net assets. Certain
Fund expenses were, and are, absorbed voluntarily by IFG and INVESCO Trust
pursuant to a commitment to the Fund in order to ensure that the FundAEs
total operating expenses did not exceed 0.75% of the Fund's average net
assets (from May 1, 1995 through April 30, 1996) and will not exceed 0.80%
of the Fund's average net assets (beginning May 1, 1996). This commitment
may be changed following consultation with the Company's board of
directors. In the absence of this voluntary expense limitation, the
FundAEs total operating expenses would have been 2.09% of its average net
assets.
INVESCO High Yield Fund Only:
The section of the High Yield FundAEs Prospectus entitled "Annual Fund Expenses"
is amended to read as follows:
Annual Fund Expenses
The Fund is no-load; there are no fees to purchase, exchange or
redeem shares. The Fund, however, is authorized to pay a Rule 12b-1
distribution fee of up to one quarter of one percent of the Fund's average
net assets each year. (See "How To Buy Shares -- Distribution Expenses.")
Like any company, the Fund has operating expenses -- such as
portfolio management, accounting, shareholder servicing, maintenance of
shareholder accounts, and other expenses. These expenses are paid from the
Fund's assets. Lower expenses therefore benefit investors by increasing
the Fund's investment return.
We calculate annual operating expenses as a percentage of the Fund's
average annual net assets. To keep expenses competitive, the Fund's
manager voluntarily reimbursed the Fund for amounts in excess of 1.00% of
average net assets from July 1, 1994 through April 30, 1996, and
reimburses the Fund for amounts in excess of 1.25% of average net assets
effective May 1, 1996.
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Annual Fund Operating Expenses
(as a percentage of average net assets)*
Management Fee............................ 0.50%
12b-1 Fees................................ 0.25%
Other Expenses............................ 0.32%
Total Fund Operating Expenses............. 1.07%
Example*
A shareholder would pay the following expenses on a $1,000
investment for the periods shown, assuming a hypothetical 5% annual return
and redemption at the end of each time period. (Of course, actual
operating expenses are paid from the Fund's assets, and are deducted from
the amount of income available for distribution to shareholders; they are
not charged directly to shareholder accounts.)
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$11 $34 $59 $131
The purpose of this table is to assist you in understanding the
various costs and expenses that you will bear directly or indirectly. The
example should not be considered a representation of past or future
performance or expenses, and actual annual returns and expenses may be
greater or less than those shown. For more information on the FundAEs
expenses, see "The Fund and Its Management" and "How to Buy Shares --
Distribution Expenses."
Since the Fund pays a distribution fee, investors who own Fund
shares for a long period of time may pay more than the economic equivalent
of the maximum front-end sales charge permitted for mutual funds by the
National Association of Securities Dealers, Inc.
*The expense information in the above tables has been presented on a
basis that assumes that the Fund's current 1.25% expense limitation had
been in effect during the year ended August 31, 1995.
The eighth paragraph in the section of the High Yield Fund's Prospectus entitled
"The Fund and Its Management" is hereby amended to read as follows:
The Fund's expenses, which are accrued daily, are deducted from
total income before dividends are paid. Total expenses of the Fund for the
fiscal year ended August 31, 1995, including investment management fees
(but excluding brokerage commissions, which are a cost of acquiring
securities), amounted to 1.00% of the Fund's average net assets. Certain
Fund expenses were, and are, absorbed voluntarily by IFG pursuant to a
commitment to the Fund in order to ensure that the Fund's total operating
expenses did not exceed 1.00% of the FundAEs average net assets (from July
1, 1994 through April 30, 1996) and will not exceed 1.25% of the Fund's
average net assets (beginning May 1, 1996). This commitment may be changed
following consultation with the Company's board of directors. In the
absence of this voluntary expense limitation, the Fund's total operating
expenses would have been 1.07% of its average net assets.
The date of this Supplement is May 1, 1996.
<PAGE>
INVESCO Income Funds, Inc.
Supplement to Statement of Additional Information
Dated December 29, 1995
The second paragraph of the section of the Funds' Statement of Additional
Information entitled "Investment Policies and Restrictions - Illiquid and 144A
Securities" is hereby amended to read as follows:
Each Fund also may invest in restricted securities that can be
resold to institutional investors pursuant to Rule 144A under the
Securities Act of 1933, as amended (the "1933 Act") (hereinafter referred
to as "Rule 144A Securities"). These securities may be purchased by the
Select Income, U.S. Government Securities and Short- Term Bond Funds
without limitation if a liquid institutional trading market exists. The
High Yield Fund's investments in Rule 144A Securities are subject to the
10% of net assets limitation described above. The Company's board of
directors has delegated to Fund management the authority to determine the
liquidity of Rule 144A Securities pursuant to guidelines approved by the
board.
The section of the Funds' Statement of Additional Information entitled
"Investment Policies and Restrictions - Investment Restrictions" is hereby
amended by the addition of the following new paragraph as the twenty-third
paragraph of such section, without deleting any of the existing paragraphs:
In applying restriction (14) above, the Funds consider warrants
acquired as components of units consisting primarily of debt securities to
be permissible investments as contemplated by restriction (11) above.
The second paragraph in the section of the Funds' Statement of Additional
Information entitled "The Funds and Their Management -- Transfer Agency
Agreement" is hereby amended to read as follows:
The Transfer Agency Agreement provides that the Funds will pay to
INVESCO a fee of $26.00 per shareholder account or omnibus account
participant per year. This fee is paid monthly at 1/12 of the annual fee
and is based upon the actual number of shareholder accounts or omnibus
account participants in existence during each month.
The section of the Funds' Statement of Additional Information entitled "The
Funds and Their Management -- Officers and Directors of the Company" is hereby
amended to (1) delete the second through the nineteenth paragraphs and (2)
substitute the following new paragraphs in their place:
All of the officers and directors of the Company hold
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comparable positions with INVESCO Diversified Funds, Inc., INVESCO
Dynamics Fund, Inc., INVESCO Emerging Opportunity Funds, Inc., INVESCO
Growth Fund, Inc., INVESCO Industrial Income Fund, Inc., INVESCO
International Funds, Inc., INVESCO Money Market Funds, Inc., INVESCO
Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO
Strategic Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc., and
INVESCO Variable Investment Funds, Inc. All of the directors of the
Company also serve as trustees of INVESCO Value Trust. In addition, all of
the directors of the Company also are directors of INVESCO Advisor Funds,
Inc. (formerly known as The EBI Funds, Inc.); and, with the exception of
Mr. Hesser, trustees of INVESCO Treasurer's Series Trust. All of the
officers of the Company also hold comparable positions with INVESCO Value
Trust. Set forth below is information with respect to each of the
Company's officers and directors. Unless otherwise indicated, the address
of the directors and officers is Post Office Box 173706, Denver, Colorado
80217-3706. Their affiliations represent their principal occupations
during the past five years.
CHARLES W. BRADY,*+ Chairman of the Board. Chief
Executive Officer and Director of INVESCO PLC, London, England,
and of various subsidiaries thereof. Chairman of the Board of
INVESCO Advisor Funds, Inc., INVESCO Treasurer's Series Trust
and The Global Health Sciences Fund. Address: 1315 Peachtree
Street, NE, Atlanta, Georgia. Born: May 11, 1935.
FRED A. DEERING,+# Vice Chairman of the Board. Vice
Chairman of INVESCO Advisor Funds, Inc., and INVESCO
Treasurer's Series Trust. Trustee of The Global Health Sciences
Fund. Formerly, Chairman of the Executive Committee and
Chairman of the Board of Security Life of Denver Insurance
Company, Denver, Colorado; Director of ING America Life Insurance
Company, Urbaine Life Insurance Company and Midwestern United
Life Insurance Company. Address: Security Life Center, 1290
Broadway, Denver, Colorado. Born: January 12, 1928.
DAN J. HESSER,+* President and Director. Chairman of the
Board, President, and Chief Executive Officer of INVESCO Funds
Group, Inc.; Director of INVESCO Trust Company. Trustee of The
Global Health Sciences Fund. Born: December 27, 1939.
VICTOR L. ANDREWS,** Director. Professor Emeritus,
Chairman Emeritus and Chairman of the CFO Roundtable of the
Department of Finance of Georgia State University, Atlanta, Georgia;
President, Andrews Financial Associates, Inc. (consulting firm);
formerly, member of the faculties of the Harvard Business School
<PAGE>
and the Sloan School of Management of MIT. Dr. Andrews is also
a Director of The Southeastern Thrift and Bank Fund, Inc. and The
Sheffield Funds, Inc. Address: 4625 Jettridge Drive, Atlanta,
Georgia. Born: June 23, 1930.
BOB R. BAKER,+** Director. President and Chief Executive
Officer of AMC Cancer Research Center, Denver, Colorado, since
January 1989; until mid-December 1988, Vice Chairman of the Board
of First Columbia Financial Corporation (a financial institution),
Englewood, Colorado. Formerly, Chairman of the Board and Chief
Executive Officer of First Columbia Financial Corporation. Address:
1775 Sherman Street, #1000, Denver, Colorado. Born: August 7,
1936.
LAWRENCE H. BUDNER,# Director. Trust Consultant; prior
to June 30, 1987, Senior Vice President and Senior Trust Officer of
InterFirst Bank, Dallas, Texas. Address: 7608 Glen Albens Circle,
Dallas, Texas. Born: July 25, 1930.
DANIEL D. CHABRIS,+# Director. Financial Consultant;
Assistant Treasurer of Colt Industries Inc., New York, New York,
from 1966 to 1988. Address: 15 Sterling Road, Armonk, New York.
Born: August 1, 1923.
A.D. FRAZIER, JR.*,** Director. Chief Operating Officer of the
Atlanta Committee for the Olympic Games. From 1982 to 1991, Mr.
Frazier was employed in various capacities by First Chicago Bank,
most recently as Executive Vice President of the North American
Banking Group. Trustee of The Global Health Sciences Fund.
Director of Magellan Health Services, Inc. and of Charter Medical
Corp. Address: 250 Williams Street, Suite 6000, Atlanta, Georgia.
Born: June 23, 1944.
HUBERT L. HARRIS, JR.*, Director. President of INVESCO
Services, Inc. (since January 1990). Director of INVESCO PLC and
Chief Financial Officer of INVESCO Individual Services Group.
Member of the Executive Committee of the Alumni Board of Trustees
of Georgia Institute of Technology. Address: 1315 Peachtree
Street, N.E., Atlanta, Georgia. Born: July 15, 1943.
KENNETH T. KING,** Director. Formerly, Chairman of the
Board of The Capitol Life Insurance Company, Providence
Washington Insurance Company, and Director of numerous
subsidiaries thereof in the U.S. Formerly, Chairman of the Board of
The Providence Capitol Companies in the United Kingdom and
Guernsey. Chairman of the Board of the Symbion Corporation (a
<PAGE>
high technology company) until 1987. Address: 4080 North Circulo
Manzanillo, Tucson, Arizona. Born: November 16, 1925.
JOHN W. McINTYRE,# Director. Retired. Formerly, Vice
Chairman of the Board of Directors of The Citizens and Southern
Corporation and Chairman of the Board and Chief Executive Officer
of The Citizens and Southern Georgia Corp. and Citizens and
Southern National Bank. Director of Golden Poultry Co., Inc.
Trustee of The Global Health Sciences Fund and Gables Residential
Trust. Address: 7 Piedmont Center, Suite 100, Atlanta, Georgia.
Born: September 14, 1930.
GLEN A. PAYNE, Secretary. Senior Vice President, General
Counsel and Secretary of INVESCO Funds Group, Inc. and
INVESCO Trust Company. Formerly, employee of a U.S. regulatory
agency, Washington, D.C., (June 1973 through May 1989.) Born:
September 25, 1947.
RONALD L. GROOMS, Treasurer. Senior Vice President and
Treasurer of INVESCO Funds Group, Inc. and INVESCO Trust
Company since January 1988. Born: October 1, 1946.
WILLIAM J. GALVIN, JR., Assistant Secretary. Senior Vice
President of INVESCO Funds Group, Inc. and Trust Officer of
INVESCO Trust Company. Formerly, Vice President of 440
Financial Group from June 1990 to August 1992; Assistant Vice
President of Putnam Companies from November 1986 to June 1990.
Born: August 21, 1956.
ALAN I. WATSON, Assistant Secretary. Vice President of
INVESCO Funds Group, Inc. and Trust Officer of INVESCO Trust
Company. Born: September 14, 1941.
JUDY P. WIESE, Assistant Treasurer. Vice President of
INVESCO Funds Group, Inc. and Trust Officer of INVESCO Trust
Company. Born: February 3, 1948.
The ninth paragraph of the section of the Funds' Statement of Additional
Information entitled "The Funds and Their Management - Director Compensation"
(the paragraph immediately following footnote 6) is hereby amended to read as
follows:
Messrs. Brady, Harris and Hesser , as "interested persons" of
the Company and other funds in the INVESCO Complex, receive
compensation as officers or employees of INVESCO or its affiliated
companies, and do not receive any director's fees or other
<PAGE>
compensation from the Company or other funds in the INVESCO Complex for
their services as directors. Because of the possibility that A.D. Frazier,
Jr. may become employed by a company affiliated with INVESCO at some point
in the future, he was deemed to be an "interested person" of the Company
and of the other funds in the INVESCO Complex effective May 1, 1996. Until
such time as Mr. Frazier actually becomes employed by an
INVESCO-affiliated company, however, he will continue to receive the same
director's fees and other compensation as the Company's independent
directors.
The date of this Supplement is May 1, 1996.
