INVESCO BOND FUNDS, INC.
Supplement to Investor Class Prospectus dated October 31, 1999
The existing class of shares of INVESCO High Yield Fund, INVESCO Select Income
Fund, INVESCO Tax-Free Bond Fund, and INVESCO U.S. Government Securities Fund is
hereby designated as "Investor Class."
The section of the Prospectus entitled "Fees And Expenses - Annual Fund
Operating Expenses That Are Deducted From Fund Assets" is amended to (1) delete
the table and the footnotes and (2) substitute the following, respectively, in
their place:
ANNUAL FUND OPERATING EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
HIGH YIELD FUND
Management Fee 0.40%
Distribution and Service (12b-1) Fees(1) 0.25%
Other Expenses(2)(3) 0.38%
-----
Total Annual Fund Operating Expenses(2)(3) 1.03%
=====
SELECT INCOME FUND
Management Fee 0.50%
Distribution and Service (12b-1) Fees(1) 0.25%
Other Expenses(2)(3) 0.46%
-----
Total Annual Fund Operating Expenses(2)(3)(4) 1.21%
=====
TAX-FREE BOND FUND
Management Fee 0.55%
Distribution and Service (12b-1) Fees(1) 0.25%
Other Expenses(2)(3) 0.36%
-----
Total Annual Fund Operating Expenses(2)(3)(4) 1.16%
=====
U.S. GOVERNMENT SECURITIES FUND
Management Fee 0.55%
Distribution and Service (12b-1) Fees(1) 0.25%
Other Expenses(2)(3) 0.85%
-----
Total Annual Fund Operating Expenses(2)(3)(4) 1.65%
=====
<PAGE>
(1) Because the Funds pay 12b-1 distribution fees which are based upon
each Fund's assets, if you own shares of a Fund for a long period of
time, you 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.
(2) Each Fund's actual Total Annual Fund Operating Expenses were lower
than the figures shown because their custodian fees were reduced under
an expense offset arrangement.
(3) The expense information presented in the table has been restated from
the financials to reflect a change in the administrative services and
transfer agency fees.
(4) Certain advisory fees were voluntarily absorbed by INVESCO pursuant to
a commitment between the Funds and INVESCO. These commitments may be
changed at any time following consultation with the board of
directors. After absorption, Select Income Fund's Other Expenses and
Total Annual Fund Operating Expenses were 0.31% and 1.06%,
respectively, of the Fund's average net assets; Tax-Free Bond Fund's
Other Expenses and Total Annual Fund Operating Expenses were 0.10% and
0.90%, respectively, of the Fund's average net assets; and U.S.
Government Securities Fund's Other Expenses and Total Annual Fund
Operating Expenses were 0.21% and 1.01%, respectively, of the Fund's
average net assets;
The section of the Prospectus entitled "Fees And Expenses - Example" is amended
to (1) delete the second paragraph and (2) substitute the following in its
place:
The Example assumes that you invested $10,000 in a Fund for the time
periods indicated and redeemed all of your shares at the end of each
period. The Example also assumes that your investment had a hypothetical
5% return each year and that a Fund's operating expenses remained the
same. Although the actual costs and performance of a Fund may be higher or
lower, based on these assumptions your costs would have been:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
High Yield Fund $ 105 $ 328 $ 569 $1,259
Select Income Fund $ 123 $ 384 $ 665 $1,466
Tax-Free Bond Fund $ 118 $ 368 $ 638 $1,409
U.S. Government Securities Fund $ 168 $ 520 $ 897 $1,955
</TABLE>
The section of the Funds' Prospectus entitled "Risks Associated With Particular
Investments - Foreign Securities Risks" is amended to (1) delete the second
sentence of the first paragraph and (2) substitute the following in its place:
High Yield and Select Income Funds may invest up to 25% of their assets in
foreign debt securities.
The section of the Prospectus entitled "Fund Management" is amended to add the
following paragraph after the second paragraph:
A I M Capital Management, Inc. ("AIM"), located at 11 Greenway Plaza,
Suite 100, Houston, Texas, is the sub-adviser to Tax-Free Bond Fund.
<PAGE>
The section of the Prospectus entitled "Fund Management" is amended to (1)
delete the third paragraph in its entirety and (2) substitute the following
paragraph in its place:
INVESCO, AIM and IDI are subsidiaries of AMVESCAP PLC.
The section of the Prospectus entitled "Portfolio Managers" is amended to (1)
delete the first, fourth and fifth paragraphs and (2) substitute the following
paragraphs in their place, respectively:
The following individuals are primarily responsible for the day-to-day
management of each Fund's portfolio holdings:
FUND PORTFOLIO MANAGER(S)
High Yield Donovan J. (Jerry) Paul
Select Income Donovan J. (Jerry) Paul
Tax-Free Bond Richard A. Berry
U.S. Government Securities Richard R. Hinderlie
RICHARD A. BERRY, a vice president and senior portfolio manager of AIM, is
the portfolio manager of Tax-Free Bond Fund. Richard manages several other
AIM fixed-income funds. Before joining AIM in 1987, he served at various
times as senior vice president for InterFirst Investment Management
Company, manager of investor relations at Texas Industries, Inc., vice
president of Banc Texas, and investment officer at Southwestern Life
Insurance Company. Richard is a Chartered Financial Analyst. He received
his M.B.A. in finance and his B.B.A. from Texas Christian University.
Dick Hinderlie is a member of the INVESCO Fixed-Income Team, which is led
by Jerry Paul.
The section of the Prospectus entitled "How To Buy Shares" is amended to add the
following sentence at the end of the first paragraph:
If you do not specify a fund or funds, your initial investment and any
subsequent purchases will automatically go into INVESCO Cash Reserves Fund
- Investor Class, a series of INVESCO Money Market Funds, Inc.
Effectively immediately, the section of the Funds' Prospectus entitled "Your
Account Services" is amended to add the following new subsection after the
subsection entitled "Telephone Transactions":
HOUSEHOLDING. To save money for the Funds, INVESCO will send only one copy
of a prospectus or financial report to each household address. This
process, known as "householding," is used for most required shareholder
mailings. It does not apply to account statements. You may, of course,
request an additional copy of a prospectus or financial report at any time
by calling or writing INVESCO. You may also request that householding be
eliminated from all of your required mailings.
This Supplement supercedes the Supplements dated April 1, 2000 and May 10, 2000.
The date of this Supplement is June 1, 2000.
<PAGE>
INVESCO BOND FUNDS, INC.
Supplement to Class C Prospectus dated February 15, 2000
The section of the Prospectus entitled "Fees And Expenses - Annual Fund
Operating Expenses That Are Deducted From Fund Assets" is amended to (1) delete
the table and the footnotes and (2) substitute the following, respectively, in
their place:
ANNUAL FUND OPERATING EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
HIGH YIELD FUND - CLASS C
Management Fee 0.40%
Distribution and Service (12b-1) Fees(1) 1.00%
Other Expenses(2) 0.38%
-----
Total Annual Fund Operating Expenses(2) 1.78%
=====
SELECT INCOME FUND - CLASS C
Management Fee 0.50%
Distribution and Service (12b-1) Fees(1) 1.00%
Other Expenses(2) 0.46%
-----
Total Annual Fund Operating Expenses(2) 1.96%
=====
TAX-FREE BOND FUND - CLASS C
Management Fee 0.55%
Distribution and Service (12b-1) Fees(1) 1.00%
Other Expenses(2) 0.36%
-----
Total Annual Fund Operating Expenses(2) 1.91%
=====
U.S. GOVERNMENT SECURITIES FUND - CLASS C
Management Fee 0.55%
Distribution and Service (12b-1) Fees(1) 1.00%
Other Expenses(2) 0.85%
-----
Total Annual Fund Operating Expenses(2) 2.40%
=====
<PAGE>
(1) Because the Funds pay 12b-1 distribution fees which are based upon
each Fund's assets, if you own shares of a Fund for a long period of
time, you 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.
(2) Based on estimated expenses for the current fiscal year, which may be
more or less than actual expenses. Actual expenses are not provided
because the Funds' Class C shares were not offered until February 15,
2000. Certain expenses of the Funds will be absorbed by INVESCO in
order to ensure that expenses for High Yield Fund Class C, Select
Income Fund - Class C, Tax-Free Bond Fund - Class C and U.S.
Government Securities Fund - Class C will not exceed 2.00%, 1.80%,
1.65% and 1.75%, respectively, of each Fund's average net assets
attributable to Class C shares pursuant to commitments between the
Funds and INVESCO. These commitments may be changed at any time
following consultation with the board of directors. After absorption,
Select Income Fund - Class C shares' Other Expenses and Total Annual
Fund Operating Expenses for the fiscal year ending August 31, 2000 are
estimated to be 0.31% and 1.81%, respectively, of the Fund's average
net assets attributable to Class C shares; Tax-Free Bond Fund - Class
C shares' Other Expenses and Total Annual Fund Operating Expenses for
the fiscal year ending August 31, 2000 are estimated to be 0.10% and
1.65%, respectively, of the Fund's average net assets attributable to
Class C shares; and U.S. Government Securities Fund - Class C shares'
Other Expenses and Total Annual Fund Operating Expenses for the fiscal
year ending August 31, 2000 are estimated to be 0.21% and 1.76%,
respectively, of the Fund's average net assets attributable to Class C
shares.
The section of the Prospectus entitled "Fees And Expenses - Examples" is amended
to (1) delete the second paragraph and (2) substitute the following in its
place:
The Examples assume that you invested $10,000 in Class C shares of a Fund
for the time periods indicated. The first Example assumes that you redeem
all of your shares at the end of each period. The second Example assumes
you keep your shares. Both Examples also assume that your investment had a
hypothetical 5% return each year and that a Fund's Class C shares'
operating expenses remained the same. Although the actual costs and
performance of a Fund's Class C shares may be higher or lower, based on
these assumptions your costs would have been:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
IF SHARES ARE REDEEMED 1 YEAR 3 YEARS 5 YEARS 10 YEARS
High Yield Fund - Class C $ 281 $ 560 $ 964 $2,095
Select Income Fund - Class C $ 299 $ 615 $1,057 $2,285
Tax-Free Bond Fund - Class C $ 294 $ 600 $1,032 $2,233
U.S. Government Securities Fund - Class C $ 343 $ 748 $1,280 $2,736
IF SHARES ARE NOT REDEEMED 1 YEAR 3 YEARS 5 YEARS 10 YEARS
High Yield Fund - Class C $ 181 $ 560 $ 964 $2,095
Select Income Fund - Class C $ 199 $ 615 $1,057 $2,285
Tax-Free Bond Fund - Class C $ 194 $ 600 $1,032 $2,233
U.S. Government Securities Fund - Class C $ 243 $ 748 $1,280 $2,736
</TABLE>
The section of the Funds' Prospectus entitled "Risks Associated With Particular
Investments - Foreign Securities Risks" is amended to (1) delete the second
sentence of the first paragraph and (2) substitute the following in its place:
High Yield and Select Income Funds may invest up to 25% of their assets in
foreign debt securities.
<PAGE>
The section of the Prospectus entitled "Fund Management" is amended to add the
following paragraph after the second paragraph:
A I M Capital Management, Inc. ("AIM"), located at 11 Greenway Plaza,
Suite 100, Houston, Texas, is the sub-adviser to Tax-Free Bond Fund.
The section of the Prospectus entitled "Fund Management" is amended to (1)
delete the third paragraph in its entirety and (2) substitute the following
paragraph in its place:
INVESCO, AIM and IDI are subsidiaries of AMVESCAP PLC.
The section of the Prospectus entitled "Portfolio Managers" is amended to (1)
delete the first paragraph and (2) substitute the following paragraph in its
place, respectively:
The following individuals are primarily responsible for the day-to-day
management of each Fund's portfolio holdings:
FUND PORTFOLIO MANAGER(S)
High Yield Donovan J. (Jerry) Paul
Select Income Donovan J. (Jerry) Paul
Tax-Free Bond Richard A. Berry
U.S. Government Securities Richard R. Hinderlie
The section of the Prospectus entitled "Portfolio Managers" is amended to add
the following paragraph after the first paragraph:
RICHARD A. BERRY, a vice president and senior portfolio manager of AIM, is
the portfolio manager of Tax-Free Bond Fund. Richard manages several other
AIM fixed-income funds. Before joining AIM in 1987, he served at various
times as senior vice president for InterFirst Investment Management
Company, manager of investor relations at Texas Industries, Inc., vice
president of Banc Texas, and investment officer at Southwestern Life
Insurance Company. Richard is a Chartered Financial Analyst. He received
his M.B.A. in finance and his B.B.A. from Texas Christian University.
This Supplement supersedes the Supplement dated May 10, 2000.
The date of this Supplement is June 1, 2000.
<PAGE>
INVESCO BOND FUNDS, INC.
Supplement to Statement of Additional Information
dated February 15, 2000
The section of the SAI entitled "Management of the Funds" is amended to add the
following sub-section after the sub-section entitled "The Investment Advisory
Agreement:"
THE SUB-ADVISORY AGREEMENT
With respect to Tax-Free Bond Fund, A I M Capital Management, Inc. ("AIM")
serves as sub-adviser to the Fund pursuant to a sub-advisory agreement
dated May 10, 2000 (the "Sub-Agreement") with INVESCO.
The Sub-Agreement provides that AIM, subject to the supervision of
INVESCO, shall manage the investment portfolios of the Fund in conformity
with the Fund's investment policies. These management services include:
(a) managing the investment and reinvestment of all the assets, now or
hereafter acquired, of the Fund, and executing all purchases and sales of
portfolio securities; (b) maintaining a continuous investment program for
the Fund, consistent with (i) the Fund's investment policies as set forth
in the Company's Articles of Incorporation, Bylaws and Registration
Statement, as from time to time amended, under the 1940 Act, as amended,
and in any prospectus and/or statement of additional information of the
Fund, as from time to time amended and in use under the 1933 Act and (ii)
the Company's status as a regulated investment company under the Internal
Revenue Code of 1986, as amended; (c) determining what securities are to
be purchased or sold for the Fund, unless otherwise directed by the
directors of the Company or INVESCO, and executing transactions
accordingly; (d) providing the Fund the benefit of all of the investment
analysis and research, the reviews of current economic conditions and
trends, and the consideration of long-range investment policy now or
hereafter generally available to investment advisory customers of AIM; (e)
determining what portion of the Fund's assets should be invested in the
various types of securities authorized for purchase by the Fund; and (f)
making recommendations as to the manner in which voting rights, rights to
consent to Company action and any other rights pertaining to the portfolio
securities of the Fund shall be exercised.
The Sub-Agreement provides that, as compensation for its services, AIM
shall receive from INVESCO, at the end of each month, a fee based upon the
average daily value of the Fund's net assets. The sub-advisory fees are
paid by INVESCO, NOT the Fund. The fees are calculated at the following
annual rates:
<PAGE>
Tax-Free Bond Fund
0.22% on the first $300 million of the Fund's average net assets;
0.18% of the Fund's average net assets from $300 million;
and 0.14% of the Fund's average net assets from $500 million.
The section of the Statement of Additional Information entitled "Management of
the Funds Transfer Agency Agreement" is amended to (1) delete the first sentence
of the second paragraph and (2) substitute the following in its place:
The Transfer Agency Agreement provides that each Fund pays INVESCO an
annual fee of $28.50 per shareholder account, or, where applicable, per
participant in an omnibus account. Prior to June 1, 2000, this fee was
$26.00.
This Supplement supercedes the Supplement dated May 10, 2000.
The date of this Supplement is June 1, 2000.
