INVESCO CASH RESERVES FUND
Supplement to Prospectus
dated September 30, 1994
The section of the Fund's Prospectus entitled "Annual Fund Expenses" is amended
to read as follows:
ANNUAL FUND EXPENSES
The Fund is 100% no-load; there are no fees to purchase, exchange or redeem
shares nor any ongoing marketing ("12b-1") expenses. Lower expenses benefit Fund
shareholders by increasing the Fund's total return.
Shareholder Transaction Expenses
Sales load "charge" on purchases.................. None
Sales load "charge" on reinvested dividends....... None
Redemption fees................................... None
Exchange fees..................................... None
Annual Fund Operating Expenses
(as a percentage of average net assets)*
Management Fee.................................... 0.44%
12b-1 Fees........................................ None
Other Expenses(1)................................. 0.37%
Transfer Agency Fee............................. 0.24%
General Services, Administrative
Services, Registration, Postage (2)........... 0.13%
Total Fund Operating Expenses(1).................. 0.81%
(1) Certain Fund expenses are being voluntarily absorbed by the Fund's
investment adviser in order to ensure that the Fund's total operating expenses
do not exceed 0.75% (from July 1, 1994 through April 30, 1995) and 0.85%
(effective May 1, 1995) of the Fund's average net assets.
(2) Includes, but is not limited to, fees and expenses of directors, custodian
bank, legal counsel and auditors, costs of administrative services furnished
under an Administrative Services Agreement, costs of registration of Fund shares
under applicable laws, and costs of printing and distributing reports to
shareholders.
<PAGE>
Example*
A shareholder would pay the following expenses on a $1,000 investment for the
periods shown, assuming (1) a 5% annual return and (2) redemption at the end of
each time period:
1 Year 3 Years 5 Years 10 Years
$8 $26 $45 $100
The purpose of the foregoing table is to assist investors in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. Such expenses are paid from the Fund's assets. (See "The Fund and
Its Management.") The Fund charges no sales load, redemption fee, or exchange
fee and bears no distribution expenses. The Example should not be considered a
representation of past or future expenses, and actual expenses may be greater or
less than those shown. The assumed 5% annual return is hypothetical and should
not be considered a representation of past or future annual returns, which may
be greater or less than the assumed amount.
*The expense information in the above tables has been presented on a basis that
assumes that the Fund's current 0.85% expense limitation had been in effect
during the year ended May 31, 1994.
The ninth paragraph in the section of the 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 generally deducted from
the Fund's total income before dividends are paid. Total expenses of the
Fund for the fiscal year ended May 31, 1994, including investment advisory
fees (but excluding brokerage commissions which are included as a cost of
acquiring securities), amounted to 0.81% of the Fund's average net assets.
Certain Fund expenses will be absorbed voluntarily by INVESCO in order to
ensure that the Fund's total operating expenses will not exceed 0.75%
(from July 1, 1994 through April 30, 1995) and 0.85% (effective May 1,
1995) of the Fund's average net assets.
The date of this Supplement is July 21, 1995.
<PAGE>
PROSPECTUS
September 30, 1994
INVESCO Cash Reserves Fund
A Series of INVESCO Money Market Funds, Inc.
INVESCO Cash Reserves Fund (the "Fund") seeks as high a level of current
income as is consistent with liquidity and safety of capital by investing in a
variety of short-term money market securities. An investment in the Fund is
neither insured nor guaranteed by the U.S. Government. The Fund's shares are
offered at net asset value, which is expected to be $1.00 per share. However,
there can be no assurance that the Fund will be able to maintain a stable net
asset value of $1.00 per share.
The Fund is a series of INVESCO Money Market Funds, Inc. (the "Company"),
an open-end management investment company consisting of three separate no-load
money market funds, each of which represents a separate portfolio of
investments.
This Prospectus relates to shares of the Fund. Separate
Prospectuses are available upon request from INVESCO Funds Group,
Inc. for the Company's other two funds, INVESCO Tax-Free Money Fund
and INVESCO U.S. Government Money Fund. Additional funds may be
offered in the future.
This Prospectus provides you with the basic information you
should know before investing in INVESCO Cash Reserves Fund. You
should read it and keep it for future reference. A Statement of
Additional Information containing further information about the
Fund has been filed with the Securities and Exchange Commission.
You can obtain a copy without charge by writing INVESCO Funds
Group, Inc., P.O. Box 173706, Denver, Colorado 80217-3706; or by
calling 1-800-525-8085.
-----------
<PAGE>
TABLE OF CONTENTS Page
ANNUAL FUND EXPENSES 6
FINANCIAL HIGHLIGHTS 7
PERFORMANCE DATA 8
INVESTMENT OBJECTIVE AND POLICIES 8
THE FUND AND ITS MANAGEMENT 10
HOW SHARES CAN BE PURCHASED 13
SERVICES PROVIDED BY THE FUND 14
HOW TO REDEEM SHARES 18
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS, AND TAXES 20
ADDITIONAL INFORMATION 20
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION.
THE SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER AGENCY.
----------
THE STATEMENT OF ADDITIONAL INFORMATION, DATED SEPTEMBER 30, 1994, IS HEREBY
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
<PAGE>
ANNUAL FUND EXPENSES
The Fund is 100% no-load; there are no fees to purchase, exchange or
redeem shares nor any ongoing marketing ("12b-1") expenses. Lower expenses
benefit Fund shareholders by increasing the Fund's total return.
Shareholder Transaction Expenses
Sales load "charge" on purchases None
Sales load "charge" on reinvested dividends None
Redemption fees None
Exchange fees None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fee 0.44%
12b-1 Fees None
Other Expenses (after absorbed expenses)(1) 0.31%
Transfer Agency Fee 0.24%
General Services, Administrative
Services, Registration, Postage (2) 0.07%
Total Fund Operating Expenses 0.75%
(after absorbed expenses)(1)
(1) Certain Fund expenses will be voluntarily absorbed by the Fund's
investment adviser and sub-adviser in order to ensure that the Fund's total
operating expenses do not exceed 0.75% of the Fund's average net assets. This
policy is applicable to Fund expenses incurred on or after July 1, 1994. In the
absence of such voluntary expense limitation, the Fund's "Other Expenses" and
"Total Fund Operating Expenses" in the above table would have been 0.37% and
0.81%, respectively, of the Fund's average net assets, based on the actual
expenses of the Fund for the fiscal year ended May 31, 1994.
(2) Includes, but is not limited to, fees and expenses of directors,
custodian bank, legal counsel and auditors, costs of administrative services
furnished under an Administrative Services Agreement, costs of registration of
Fund shares under applicable laws, and costs of printing and distributing
reports to shareholders.
Example
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming (1) a 5% annual return and (2) redemption at the end
of each time period:
1 Year 3 Years 5 Years 10 Years
$8 $24 $42 $93
The purpose of the foregoing table is to assist investors in understanding
the various costs and expenses that an investor in the Fund will bear directly
or indirectly. Such expenses are paid from the Fund's assets. (See "The Fund and
Its Management.") The Fund charges no sales load, redemption fee, or exchange
fee and bears no distribution expenses. The Example should not be considered a
representation of past or future expenses, and actual expenses may be greater or
less than those shown. The assumed 5% annual return is hypothetical and should
not be considered a representation of past or future annual returns, which may
be greater or less than the assumed amount.
<PAGE>
Financial Highlights
(For a Fund share outstanding throughout Each period)
The following information has been audited by Price Waterhouse LLP,
independent accountants. The U.S. Firm of Price Waterhouse, the independent
accountants to the Fund, has registered as a Registered Limited Liability
Partnership (LLP) under the laws of the State of Delaware and from August 1,
1994, will continue its practice under the name Price Waterhouse LLP. All
references to Price Waterhouse in this prospectus and in the related Statement
of Additional Information are to Price Waterhouse LLP. This information should
be read in conjunction with the audited financial statements and the report of
independent accountants thereon appearing in the Fund's 1994 Annual Report to
Shareholders and in the Statement of Additional Information, both of which are
available without charge by contacting INVESCO Funds Group, Inc. at the address
or telephone number shown below.
<TABLE>
<CAPTION>
Year Period
Ended Ended
May 31 May 31 Year Ended January 31
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1994 1993+ 1993 1992 1991 1990 1989 1988 1987 1986 1985
PER SHARE DATA
Net Asset Value --
Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM -----------------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net Investment Income
Earned and Distributed
to Shareholders 0.03 0.01 0.03 0.05 0.07 0.08 0.07 0.06 0.06 0.07 0.10
-----------------------------------------------------------------------------------------------------
Net Asset Value --
End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
==========================================================================================================
TOTAL RETURN 2.58% 0.75%* 3.00% 5.35% 7.76% 8.79% 7.25% 6.28% 6.01% 7.76% 10.39%
RATIOS
Net Assets -- End of Period
($000 Omitted) $747,551 $490,932 $506,337 $557,708 $431,808 $396,286 $317,410 $319,216 $178,675 $205,707 $224,120
Ratio of Expenses to Average
Net Assets 0.81% 0.98%~ 0.80% 0.83% 0.76% 0.79% 0.79% 0.82% 0.81% 0.80% 0.59%
Ratio of Net Investment
Income to Average Net
Assets 2.61% 2.26%~ 2.98% 5.17% 7.49% 8.46% 7.04% 6.24% 5.86% 7.45% 9.95%
<FN>
+ From February 1, 1993 to May 31, 1993.
* Not Annualized
~ Annualized
</FN>
</TABLE>
Further information about the performance of the Fund is contained in the
Fund's annual report to shareholders which may be obtained without charge by
writing INVESCO Funds Group, Inc., P.O. Box 173706, Denver. Colorado 80217-3706;
or by calling 1-800-525-8085.
<PAGE>
PERFORMANCE DATA
From time to time the Fund advertises its "yield", "effective yield" and
"total return" performance. These figures are based upon historical investment
results and are not intended to indicate future performance. The "yield" of the
Fund refers to the income generated by an investment in the Fund over a
seven-day period (which period will be stated in the advertisement). This income
is then "annualized." That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period and
is shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the Fund
is assumed to be reinvested. The "effective yield" will be slightly higher than
the "yield" because of the compounding effect of this assumed reinvestment.
"Total return" refers to the average annual rate of return of an
investment in the Fund. This figure is computed by calculating the percentage
change in value of an investment of $1,000, assuming reinvestment of all income
dividends and capital gains distributions, to the end of a specified period.
Periods of one year, five years, and ten years are used to the extent possible.
Statements of the Fund's total return performance are based upon investment
results during a specified period and assume reinvestment of all dividends and
capital gains, if any, paid during that period. Thus, a report of total return
performance should not be considered as representative of future performance.
The Fund charges no sales load, redemption fee, or exchange fee which would
affect the total return computation.
In conjunction with performance reports and/or analyses of shareholder
service for the Fund, comparative data between the Fund's performance for a
given period and recognized indicators of money market performance for the same
period, and/or assessments of the quality of shareholder service, may be
provided to shareholders. Such indicators include the Donoghue's Money Fund
Report, Bank Rate Monitor's 100 Highest Yields, the Certificate of Deposit
indices, Treasury Bill indices and the Consumer Price Index. In addition,
rankings, ratings, and comparisons of investment performance and/or assessments
of the quality of shareholder service published by the William Donoghue
Organization, Money, Kiplinger's Personal Finance, Morningstar, and similar
sources which utilize information compiled (i) internally; (ii) by Lipper
Analytical Services, Inc.; or (iii) by other recognized analytical services, may
be used in advertising. Rankings and comparisons of the Fund's performance by
Donoghue will be drawn from its Taxable Funds First Tier grouping.
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is to seek as high a level of current
income as is consistent with liquidity and safety of capital. While there can be
no assurance that this objective will be achieved, the Fund seeks to achieve its
objective through investment in a diversified portfolio of high-quality,
short-term debt obligations, each of which must mature within one year from the
date of purchase. Because the Fund invests in high quality, short-term debt
obligations, its ability to achieve a high level of current income is limited in
comparison to mutual funds that invest in securities which present a greater
credit risk.
The securities in which the Fund invests consist of: (1) United States
Government obligations, consisting of securities issued or guaranteed as to
principal or interest by the U.S. Government or one of its agencies or
instrumentalities, such as Treasury bills, bonds, and notes, Government National
Mortgage Association participation certificates, Federal Home Loan Bank
securities, and Federal National Mortgage Association bonds; (2) commercial
paper, limited to obligations which are rated by at least two nationally
recognized statistical rating organizations ("NRSROs"), generally Standard &
Poor's Corporation ("S&P") and Moody's Investors Service, Inc. ("Moody's"), in
the highest short-term rating category (A-1 by S&P and Prime-1 by Moody's), or
where the obligation is rated by only one NRSRO, such obligation is rated in the
highest short-term rating category, generally A-1 or Prime-1; (3) obligations of
domestic banks (as described in the Statement of Additional Information) and
their foreign affiliates, consisting of certificates of deposit and bankers'
acceptances; and (4) corporate obligations, consisting of bonds, debentures and
<PAGE>
notes. Domestic bank and corporate obligations must be rated in one of the two
highest short-term rating categories by at least two NRSROs or by one NRSRO, if
the obligation has been rated by only one NRSRO. The Fund may invest in
obligations which are not rated by any NRSRO if the Fund's investment adviser
determines, in an analysis similar to that performed by an NRSRO in rating
similar securities and issuers, that the instrument is of comparable quality to
a security rated in one of the two highest short-term rating categories. The
Fund will at all times invest at least 95% of its assets in securities rated in
the highest short-term rating category by at least two NRSROs or by one NRSRO,
if the security has been rated by only one NRSRO, or in comparable unrated
securities, which the adviser determines present minimal credit risk. For a
description of the relevant rating categories applicable to the Fund's
investments, see Appendix A in the Statement of Additional Information.
The Fund is subject to certain restrictions, which are set forth in the
Statement of Additional Information, regarding its investments which may not be
altered without the approval of the Fund's shareholders. Those restrictions
include, among others, limitations with respect to the percentages of the value
of its total assets which may be invested in any one issuer or in one industry.
The Fund may not invest more than 5% of its total assets in the securities of
any one issuer, other than obligations issued or guaranteed by the U.S.
Government. In addition, the Fund's investment objective stated above is
fundamental and may not be changed without a vote of the Fund's shareholders.
The return on investment in the Fund will depend upon the interest earned
by the Fund on its security holdings, after deduction of Fund expenses, and is
paid to shareholders in the form of daily dividends. If interest rates increase,
the value of interest-paying debt securities may decrease, and vice versa.
Notwithstanding the possibility of fluctuations in values of the Fund's
securities, as a result of the Fund's use of amortized cost valuation and its
declaration of income dividends daily, it is expected, but cannot be assured,
that the Fund's net asset value will be maintained at a constant value of $1.00
per share. Under the amortized cost valuation method, securities are valued at
their cost at the time of purchase, and thereafter there is assumed a constant
amortization to maturity of any discount or premium.
Generally, the Fund intends to hold securities purchased until maturity.
When in management's opinion it is advisable in light of prevailing market or
business conditions, however, securities may be sold without regard to how long
they have been held.
The Fund may enter into repurchase agreements with respect to any of the
types of obligations listed above with registered broker-dealers, registered
government securities dealers, or member banks of the Federal Reserve System,
which are deemed creditworthy, as described in the Statement of Additional
Information. (For a description of the requirements for broker-dealers and
registered
<PAGE>
government securities dealers, see the Statement of Additional Information.)
Repurchase agreements, which may be considered a "loan" under the Investment
Company Act of 1940, involve the purchase of debt securities ("collateral") with
the condition that, after a stated period of time, the original seller will buy
back such securities at a predetermined price or yield. The amount required to
be paid to the Fund upon repurchase reflects the Fund's yield under the
agreement. In the event that the original seller defaults on its obligation to
repurchase the securities, the Fund could incur costs or delays in seeking to
sell such securities. To minimize risk, the securities underlying each
repurchase agreement will be maintained with the Funds' custodian in an amount
at least equal to the repurchase price under the agreement (including accrued
interest), and such agreements will be effected only with parties that meet
certain creditworthiness standards established by the Company's board of
directors. While the Fund has not adopted any limit on the amount of its total
assets that may be invested in repurchase agreements, the Company's board of
directors has established the policy that all repurchase agreements entered into
by the Fund will mature in seven days or less. In no event will the Fund enter
into a repurchase agreement that is not fully collateralized by either U.S.
government securities or securities that are otherwise eligible for inclusion in
the Fund's portfolio, which are rated in the highest rating category by at least
two NRSROs, or one NRSRO if such securities are rated by only one NRSRO.
The Fund also may place a portion of its assets in interest-bearing
accounts with domestic banks meeting the criteria set forth in the Statement of
Additional Information, under which the Fund is free to withdraw its assets at
any time without suffering any interest reduction or other penalty. One year
obligations issued not more than 375 days prior to maturity will be considered
as meeting the Fund's investment requirements. In addition, the Fund will
maintain a dollar-weighted average portfolio maturity of 90 days or less, and
will limit its portfolio investments to United States dollar-denominated
instruments which are eligible for investment by the Fund under applicable SEC
rules.
THE FUND AND ITS MANAGEMENT
The Company is a no-load mutual fund, registered with the Securities and
Exchange Commission as an open-end, diversified, management investment company.
It was incorporated on April 2, 1993, under the laws of Maryland. On July 1,
1993, the Company assumed on behalf of the Fund all of the assets and
liabilities of the Fund's predecessor fund, Financial Daily Income Shares, Inc.,
which was incorporated under the laws of Colorado on October 14, 1975. All
financial and other information about the Fund for periods prior to July 1,
1993, relates to such former fund. On July 1, 1993, the Company also assumed,
through its INVESCO Tax- Free Money Fund and INVESCO U.S. Government Money Fund,
respectively, all of the assets and liabilities of those funds' predecessors,
Financial Tax-Free Money Fund, Inc. (incorporated in
<PAGE>
Colorado on March 4, 1983) and the Financial U.S. Government Money Fund of
Financial Series Trust (a Massachusetts business trust organized on July 15,
1987). The overall supervision of the Company is the responsibility of its board
of directors.
Pursuant to an agreement with the Company, INVESCO Funds Group, Inc.
("INVESCO"), 7800 E. Union Avenue, Denver, Colorado, serves as the Fund's
investment adviser. INVESCO is primarily responsible for providing the Fund with
various administrative services, and supervising the Fund's daily business
affairs. These services are subject to review by the Company's board of
directors.
The following individual serves as the portfolio manager for the Fund and
is primarily responsible for the day-to-day management of the Fund's portfolio
of securities:
Richard R. Hinderlie Portfolio manager of the Fund since
1993; portfolio manager of INVESCO
U.S. Government Money Fund and
INVESCO U.S. Government Securities
Fund; co-portfolio manager of
INVESCO Short-Term Bond Fund;
portfolio manager of INVESCO Trust
Company since 1993; Securities
Analyst with Bank Western from 1987
to 1992; B.A., Pacific Lutheran
University; M.B.A., Arizona State
University.
INVESCO is an indirect wholly-owned subsidiary of INVESCO PLC. INVESCO PLC
is a financial holding company which, through its subsidiaries, engages in the
business of investment management on an international basis. INVESCO was
established in 1932 and, as of May 31, 1994, managed 13 mutual funds, consisting
of 34 separate portfolios, with combined assets of approximately $9.6 billion on
behalf of over 863,000 shareholders.
Pursuant to an agreement with INVESCO, INVESCO Trust Company ("INVESCO
Trust"), 7800 E. Union Avenue, Denver, Colorado, serves as the Company's
sub-adviser. INVESCO Trust, a trust company founded in 1969, is a wholly-owned
subsidiary of INVESCO that served as adviser or sub-adviser to 31 investment
portfolios as of May 31, 1994, including 25 portfolios in the INVESCO group.
These 31 portfolios had aggregate assets of approximately $9.6 billion as of May
31, 1994. In addition, INVESCO Trust provides investment management services to
private clients, including employee benefit plans that may be invested in a
collective trust sponsored by INVESCO Trust. INVESCO Trust, subject to the
supervision of INVESCO, is primarily responsible for selecting and managing the
Fund's investments. Although the Fund is not a party to the sub- advisory
agreement, the agreement has been approved by shareholders of the Fund.
<PAGE>
The Fund pays INVESCO a monthly fee which is based upon a percentage of the
Fund's average net assets, determined daily. The maximum rate payable by the
Fund for each fiscal year is 0.50% of the first $300 million of the Fund's
average net assets; 0.40% of the next $200 million of the Fund's average net
assets; and 0.30% of the Fund's average net assets in excess of $500 million.
For the fiscal year ended May 31, 1994, the investment advisory fees paid by the
Fund amounted to 0.44% of the Fund's average net assets. Out of its advisory fee
which it receives from the Fund, INVESCO pays INVESCO Trust, as the Fund's
sub-adviser, a monthly fee, which is computed at the annual rate of 0.15% of the
Fund's average net assets. No fee is paid by the Fund to INVESCO Trust.
The Company also has entered into an Administrative Services Agreement,
dated April 30, 1993 (the "Administrative Agreement"), with INVESCO. Pursuant to
the Administrative Agreement, INVESCO performs certain administrative,
recordkeeping and internal sub-accounting services, including without
limitation, maintaining general ledger and capital stock accounts, preparing a
daily trial balance, calculating net asset value daily, providing selected
general ledger reports and providing sub-accounting and recordkeeping services
for Fund shareholder accounts maintained by certain retirement and employee
benefit plans for the benefit of participants in such plans. For such services,
the Fund pays INVESCO a fee consisting of a base fee of $10,000 per year, plus
an additional incremental fee computed at the annual rate of 0.015% per year of
the average net assets of the Fund. INVESCO also is paid a fee by the Fund for
providing transfer agent services. See "Additional Information."
The Fund's expenses, which are accrued daily, are deducted from the Fund's
total income before dividends are paid. Total expenses of the Fund for the
fiscal year ended May 31, 1994, including investment advisory fees (but
excluding brokerage commissions which are included as a cost of acquiring
securities), amounted to 0.81% of the Fund's average net assets. However,
certain fund expenses will be absorbed voluntarily by INVESCO and INVESCO Trust
in order to ensure that the Funds's total operating expenses will not exceed
0.75% of the Fund's average net assets. This policy is applicable to Fund
expenses incurred on or after July 1, 1994.
INVESCO, as the Company's investment adviser, or INVESCO Trust, as the
Company's sub-adviser, places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon INVESCO's evaluation of their
financial responsibility coupled with their ability to effect transactions at
the best available prices. Although the Fund does not market its shares through
intermediary brokers or dealers, the Fund may place orders for portfolio
transactions with qualified broker/dealers which recommend the Fund or sell
shares of the Fund to clients, or act as agent in the purchase of Fund shares
for clients, if management of the Fund believes that the quality of the
transaction and commission are comparable to those available from other
qualified brokerage firms.
<PAGE>
HOW SHARES CAN BE PURCHASED
The Fund's shares are sold on a continuous basis by INVESCO, as the Fund's
Distributor, at the net asset value per share next calculated after receipt of a
purchase order in good form and of federal funds by the Fund, as described
below. No sales charge is imposed upon the sale of shares of the Fund. To
purchase shares of the Fund, send a check made payable to INVESCO Funds Group,
Inc., together with a completed application form, to:
INVESCO FUNDS GROUP, INC.
Post Office Box 173706
Denver, Colorado 80217-3706
Purchase orders must specify the Fund in which the investment is to be
made.
The minimum initial purchase must be at least $1,000, with subsequent
investments of not less than $50, except that: (1) those shareholders
establishing an EasiVest or direct payroll purchase account, as described below
in the Prospectus section entitled "Services Provided by the Fund", may open an
account without making any initial investment if they agree to make regular,
minimum purchases of at least $50; (2) Fund management may permit a lesser
amount to be invested in the Fund under a federal income tax-sheltered
retirement plan (other than an IRA Account), or under a group investment plan
qualifying as a sophisticated investor; (3) those shareholders investing in an
Individual Retirement Account (IRA) or through omnibus accounts where individual
shareholder recordkeeping and sub-accounting are not required may make initial
minimum purchases of $250; and (4) Fund management reserves the right to reduce
or waive the minimum purchase requirements in its sole discretion where it
determines such action is in the best interests of the Fund. The minimum initial
purchase requirement of $1,000, as described above, does not apply to
shareholder account(s) in any of the INVESCO funds opened prior to January 1,
1993, and, thus, is not a minimum balance requirement for those existing
accounts. However, for shareholders already having accounts in any of the
INVESCO funds, all initial share purchases in a new Fund account including those
made using the exchange privilege, must meet the Fund's applicable minimum
investment requirements.
Because the Fund seeks to be fully invested at all times, an order to
purchase shares will not be effective until the investor's check can be
converted into available federal funds (i.e., moneys held on deposit within the
Federal Reserve System) under regular banking processing procedures. Checks
drawn on a member bank of the Federal Reserve System normally are converted into
federal funds within two or three business days following receipt of the checks
by the Fund. In the case of checks drawn on banks which are not members of the
Federal Reserve System, it may take longer for federal funds to become
available. During the period of time prior to receipt of federal funds, an
investor's money will not be
<PAGE>
invested in the Fund and will not earn any dividends. During such time, an
investor's money is held in a separate custodial account, which results in no
interest or other economic benefit accruing to INVESCO. The purchase of shares
can be expedited by placing bank wire or overnight courier orders. Overnight
courier orders must meet the above minimum requirements. In no case can a bank
wire order be in an amount less than $1,000. For further information, the
purchaser may call the Fund's office by using the telephone number on the cover
of this Prospectus. Orders sent by overnight courier, including Express Mail,
should be sent to the street address, not Post Office Box, of INVESCO Funds
Group, Inc., at 7800 E. Union Avenue, Suite 800, Denver, CO 80237.
If your check does not clear, you will be responsible for any related loss
the Fund or INVESCO incurs. If you are already a shareholder in the INVESCO
funds, the Fund has the option to redeem shares from any identically registered
account in the Fund or any other INVESCO fund as reimbursement for any loss
incurred. You may also be prohibited or restricted from making future purchases
in any of the INVESCO funds.
Persons who invest in the Fund through a securities broker may be charged
a commission or transaction fee for the handling of the transaction if the
broker so elects. Any investor may deal directly with the Fund in any
transaction, however. In that event, there is no sales charge.
The Fund reserves the right in its sole discretion to reject any order for
purchase of its shares (including purchases by exchange) when in the judgment of
management, such rejection is in the best interest of the Fund.
Net asset value per share of the Fund is computed once each day that the
New York Stock Exchange is open as of the close of trading on that Exchange
(presently 4:00 p.m., New York time) and also may be computed on other days
under certain circumstances. Net asset value per share is calculated by dividing
the value of all of the Fund's securities plus the value of its other assets
(including interest accrued but not collected), less all liabilities (including
accrued expenses), by the number of outstanding shares of the Fund. As a result
of using the amortized cost valuation method to value its portfolio securities
and declaring income dividends daily, the Fund expects, but cannot guarantee,
that it will be able to maintain a constant net asset value of $1.00 per share.
SERVICES PROVIDED BY THE FUND
Shareholder Accounts. INVESCO maintains a share account that reflects the
current holdings of each shareholder. A separate account will be maintained for
a shareholder for each fund in which the shareholder invests. Share certificates
will be issued only upon specific request. Since certificates must be carefully
safeguarded and must be surrendered in order to exchange or redeem
<PAGE>
Fund shares, most shareholders do not request share certificates in order to
facilitate such transactions. Each shareholder is sent a detailed confirmation
of each transaction in shares of the Fund. Shareholders whose only transactions
are through the EasiVest, direct payroll purchase, automatic monthly exchange or
periodic withdrawal programs, or are reinvestments of dividends or capital gains
in the same or another Fund, will receive confirmations of those transactions on
their quarterly statements. For information regarding a shareholder's account
and transactions, the shareholder may call the Fund's office by using the
telephone number on the cover of this Prospectus.
Reinvestment of Distributions. Income dividends paid by the Fund are
automatically reinvested in additional shares of the Fund at the net asset value
per share in effect on the ex-dividend date. A shareholder may, however, elect
to reinvest dividends in certain of the other no-load mutual funds advised and
distributed by INVESCO, or to receive payment of all dividends in excess of
$10.00 by check by giving written notice to INVESCO at least two weeks prior to
the record date on which the change is to take effect. Further information
concerning these options can be obtained by contacting INVESCO.
Periodic Withdrawal Plan. A Periodic Withdrawal Plan is available to
shareholders who own or purchase shares of any mutual funds advised by INVESCO
having a total value of $10,000 or more; provided, however, that at the time the
Plan is established, the shareholder owns shares having a value of at least
$5,000 in the fund from which the withdrawals will be made. Under the Periodic
Withdrawal Plan, INVESCO, as agent, will make specified monthly or quarterly
payments of any amount selected (minimum payment of $100) to the party
designated by the shareholder. Notice of all changes concerning the Periodic
Withdrawal Plan must be received by INVESCO at least two weeks prior to the next
scheduled check. Further information regarding the Periodic Withdrawal Plan and
its requirements and tax consequences can be obtained by contacting INVESCO.
Exchange Privilege. Shares of the Fund may be exchanged for shares of any
other fund of the Company as well as for shares of any of the following other
no-load mutual funds, which are also advised and distributed by INVESCO, on the
basis of their respective net asset values at the time of the exchange: INVESCO
Diversified Funds, Inc., INVESCO Dynamics Fund, Inc., INVESCO Emerging Growth
Fund, Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO
Industrial Income Fund, Inc., INVESCO International Funds, Inc., INVESCO
Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic
Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc., and INVESCO Value Trust.
An exchange involves redemption of shares in the Fund and investment of
the redemption proceeds in shares of another fund of the Company or in one of
the funds listed above. Exchanges will be made at the net asset value per share
next determined after receipt
<PAGE>
of an exchange request in proper order. Any gain or loss realized on an exchange
is recognizable for federal income tax purposes by the shareholder. Exchange
requests may be made either by telephone or by written request to INVESCO Funds
Group, Inc., using the telephone number or address on the cover of this
Prospectus. Exchanges made by telephone must be in an amount of at least $250,
if the exchange is being made into an existing account of one of the INVESCO
funds. All exchanges that establish a new account must meet the Fund's
applicable minimum initial investment requirements. Written exchange requests
into an existing account have no minimum requirements other than the Fund's
applicable minimum subsequent investment requirements.
The privilege of exchanging Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing the new account
Application, a Telephone Transaction Authorization Form or otherwise utilizing
telephone exchange privileges, the investor has agreed that the Fund will not be
liable for following instructions communicated by telephone that it reasonably
believes to be genuine. The Fund employs procedures, which it believes are
reasonable, designed to confirm that exchange instructions are genuine. These
may include recording telephone instructions and providing written confirmations
of exchange transactions. As a result of this policy, the investor may bear the
risk of any loss due to unauthorized or fraudulent instructions; provided,
however, that if the Fund fails to follow these or other reasonable procedures,
the Fund may be liable.
In order to prevent abuse of this privilege to the disadvantage of other
shareholders, the Fund reserves the right to terminate the exchange privilege of
any shareholder who requests more than four exchanges in a year. The Fund will
determine whether to do so based on a consideration of both the number of
exchanges any particular shareholder, or group of shareholders, has requested
and the time period over which those exchange requests have been made, together
with the level of expense to the Fund which will result from effecting
additional exchange requests. The exchange privilege also may be modified or
terminated at any time. Except for those limited instances where redemptions of
the exchanged security are suspended under Section 22(e) of the Investment
Company Act of 1940, or where sales of the fund into which the shareholder is
exchanging are temporarily stopped, notice of all such modifications or
termination of the exchange privilege will be given at least 60 days prior to
the date of termination or the effective date of the modification.
Before making an exchange, the shareholder should review the prospectuses
of the funds involved and consider their differences, and should be aware that
the exchange privilege may only be available in those states where exchanges may
be legally made, which will require that the shares being acquired are
registered for sale in the shareholder's state of residence. Shareholders
interested in exercising the exchange privilege may contact INVESCO for
information concerning their particular exchanges.
<PAGE>
Automatic Monthly Exchange. Shareholders who have accounts in any of the
mutual funds distributed by INVESCO may arrange for a fixed dollar amount of
their fund shares to be automatically exchanged for shares of any other INVESCO
mutual fund listed under "Exchange Privilege" on a monthly basis. The minimum
monthly exchange in this program is $50.00. This automatic exchange program can
be changed by the shareholder at any time by notifying INVESCO at least two
weeks prior to the date the change is to be made. Further information regarding
this service can be obtained by contacting INVESCO.
EasiVest. For shareholders who want to maintain a schedule of monthly
investments, EasiVest uses various methods to draw a preauthorized amount from
the shareholder's bank account to purchase Fund shares. This automatic
investment program can be changed by the shareholder at any time by writing to
INVESCO at least two weeks prior to the date the change is to be made. Further
information regarding this service can be obtained by contacting INVESCO.
Direct Payroll Purchase. Shareholders may elect to have their employers
make automatic purchases of Fund shares for them by deducting a specified amount
from their regular paychecks. This automatic investment program can be modified
or terminated at any time by the shareholder by notifying the employer. Further
information regarding this service can be obtained by contacting INVESCO.
Tax-Sheltered Retirement Plans. Shares of the Fund may be purchased for
self-employed retirement plans, individual retirement accounts (IRAs),
simplified employee pension plans and corporate retirement plans. In addition,
shares can be used to fund tax qualified plans established under Section 403(b)
of the Internal Revenue Code by educational institutions, including public
school systems and private schools, and certain kinds of non-profit
organizations, which provide deferred compensation arrangements for their
employees.
Prototype forms for the establishment of these various plans, including,
where applicable, disclosure statements required by the Internal Revenue
Service, are available from INVESCO. INVESCO Trust Company, a subsidiary of
INVESCO, is qualified to serve as trustee or custodian under these plans and
provides the required services at competitive rates. Retirement plans (other
than IRAs) receive monthly statements reflecting all transactions in their Fund
accounts. IRAs receive the confirmations and quarterly statements described
under "Shareholder Accounts." For complete information, including prototype
forms and service charges, call INVESCO at the telephone number listed on the
cover of this Prospectus or send a written request to: Retirement Services,
INVESCO Funds Group, Inc., Post Office Box 173706, Denver, Colorado 80217-3706.
<PAGE>
HOW TO REDEEM SHARES
You may redeem all or any portion of the shares in your account at any
time by check, telephone, or mail, as described below. Shares of the Fund will
be redeemed at their current net asset value next determined after a request in
proper form is received at the Fund's office. (See "How Shares Can Be
Purchased.") As stated above, the Fund expects, but cannot guarantee, to
maintain a $1.00 per share constant net asset value.
If the shares to be redeemed are represented by stock certificates, a
written request for redemption signed by the registered shareholder(s) and the
certificates must be forwarded to INVESCO Funds Group, Inc., Post Office Box
173706, Denver, Colorado 80217-3706. Redemption requests sent by overnight
courier, including Express Mail, should be sent to the street address, not Post
Office Box, of INVESCO Funds Group, Inc. at 7800 E. Union Avenue, Suite 800,
Denver, CO 80237. If no certificates have been issued, a written redemption
request signed by each registered owner of the account may be submitted to
INVESCO at the address noted above. If shares are held in the name of a
corporation, additional documentation may be necessary. Call or write for
specifics. If payment for the redeemed shares is to be made to someone other
than the registered owner(s), the signature(s) must be guaranteed by a financial
institution which qualifies as an eligible guarantor institution. Redemption
procedures with respect to accounts registered in the names of broker/dealers
may differ from those applicable to other shareholders.
Be careful to specify the account from which the redemption is to be made.
Shareholders have a separate account for each Fund in which they invest.
Payments of redemption proceeds will be mailed within seven days following
receipt of the required documents. However, payment may be postponed under
unusual circumstances, such as when normal trading is not taking place on the
New York Stock Exchange, an emergency as defined by the Securities and Exchange
Commission exists, or the shares to be redeemed were purchased by check and that
check has not yet cleared; provided, however, that all redemption proceeds will
be paid out promptly upon clearance of the purchase check (which may take up to
15 days).
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Fund reserves the right to effect the involuntary redemption of all
shares in such account, in which case the account would be liquidated and the
proceeds forwarded to the shareholder. Prior to any such redemption, a
shareholder will be notified and given 60 days to increase the value of the
account to $250 or more.
Shareholders with $1,000 or more in their accounts may avail themselves of
the Check Withdrawal Option. A one-time charge of $5 will be made to institute
the option. Checks will be furnished at no charge and may be written in amounts
of not less than $500.
<PAGE>
Shares in the Fund will be redeemed to cover payment of checks drawn by the
shareholder. INVESCO reserves the right to institute a charge for checks upon
notice to all shareholders with the option. Further information regarding this
option may be obtained by contacting INVESCO.
Fund shareholders (other than shareholders holding Fund shares in accounts
of IRA plans) may request expedited redemption of shares having a minimum value
of at least $250, (or redemption of all shares if their value is less than $250)
held in accounts maintained in their name by telephoning redemption instructions
to INVESCO, using the telephone number on the cover of this Prospectus. The
redemption proceeds, at the shareholder's option, either will be mailed to the
address listed for the shareholder's Fund account, or wired (minimum of $1,000)
or mailed to the bank which the shareholder has designated to receive the
proceeds of telephone redemptions. The Fund charges no fee for effecting such
telephone redemptions. Unless the Fund's management permits a larger redemption
request to be placed by telephone, a shareholder may not place a redemption
request by telephone in excess of $25,000. These telephone redemption privileges
may be modified or terminated in the future at the discretion of the Fund's
management.
For INVESCO Trust Company-sponsored federal income tax-sheltered
retirement plans, the term "shareholders" is defined to mean plan trustees that
file a written request to be able to redeem Fund shares by telephone.
Shareholders should understand that, while the Fund will attempt to process all
telephone redemption requests on an expedited basis, there may be times,
particularly in periods of severe economic or market disruption, when (a) they
may encounter difficulty in placing a telephone redemption request, and (b)
processing telephone redemptions will require up to seven business days
following receipt of the redemption request, or additional time because of the
unusual circumstances set forth above.
The privilege of redeeming Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing a new account
Application, a Telephone Redemption Authorization form or otherwise utilizing
telephone redemption privileges, the shareholder has agreed that the Fund will
not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine. The Fund employs procedures, which it
believes are reasonable, designed to confirm that telephone instructions are
genuine. These may include recording telephone instructions and providing
written confirmation of transactions initiated by telephone. As a result of this
policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions; provided, however, that if the Fund fails to follow
these or other reasonable procedures, the Fund may be held liable.
<PAGE>
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS, AND TAXES
Dividends and Capital Gain Distributions. Substantially all of the Fund's
net investment income will be paid out to shareholders. Net investment income
consists of all interest income accrued on portfolio securities, less all
expenses of the Fund for the applicable period. Dividends from net investment
income are declared daily and paid monthly. Dividends and capital gains, if any,
are automatically reinvested in additional shares of the Fund at the net asset
value on the ex-dividend date, unless otherwise requested. (See "Services
Provided by the Fund - Reinvestment of Distributions.")
Taxes. The Fund intends to distribute substantially all of its net
investment income and capital gains, if any, to shareholders, and to continue to
qualify for tax treatment under Subchapter M of the Internal Revenue Code as a
regulated investment company. Thus, it is not expected that the Fund will be
required to pay any federal income taxes. Shareholders (other than those exempt
from income tax) normally will have to pay federal income taxes, and any state
and local income taxes, on the dividends and distributions they receive from the
Fund, whether such dividends and distributions are received in cash or
reinvested in additional shares. Shareholders of the Fund are advised to consult
their own tax advisers with respect to these matters.
Under the Internal Revenue Code as currently in effect, distributions of
net investment income and net realized short-term capital gains are taxable as
ordinary income to shareholders, and no portion of such distributions qualifies
for the dividends-received deduction for corporations. At the end of each
calendar year, shareholders are sent full information on dividends and capital
gain distributions for tax purposes. Shareholders of the Fund are advised to
consult their own tax advisers with respect to these matters.
The Fund is required to withhold and remit to the U.S. Treasury 31% of
dividend payments and capital gain distributions for any account on which the
owner provides an incorrect taxpayer identification number, no number, or no
certified number for a new account.
ADDITIONAL INFORMATION
Voting Rights. All shares of the Fund, and the two other funds of the
Company, have equal voting rights based on one vote for each share owned. The
Company is not generally required, and does not expect, to hold regular annual
meetings of shareholders; however, the board of directors will call special
meetings of shareholders for the purpose, among other reasons, of voting upon
the question of removal of a director or directors when requested to do so in
writing by the holders of 10% or more of the outstanding shares of the Company
or as may be required by applicable law or the Company's Articles of
Incorporation. The Company will assist shareholders in communicating with other
shareholders as required by the Investment Company Act of 1940.
<PAGE>
Directors may be removed by action of the holders of a majority of the
outstanding shares of the Company.
Shareholder Inquiries. All inquiries regarding the Fund should be directed
to the Fund at the telephone number or mailing address set forth on the cover
page of this Prospectus.
Transfer and Dividend Disbursing Agent. INVESCO Funds Group, Inc., 7800 E.
Union Avenue, Denver, Colorado 80237, acts as registrar, transfer agent, and
dividend disbursing agent for the Fund pursuant to a Transfer Agency Agreement
which provides that the Fund will pay a fee of $21.00 per shareholder account or
omnibus account participant per year. The transfer agency fee is not charged to
each shareholder's or participant's account but is an expense of the Fund to be
paid from the Fund's assets. In addition, registered broker-dealers, third party
administrators of tax-qualified retirement plans and other entities may provide
sub- transfer agency services to the Fund which reduce or eliminate the need for
identical services to be provided on behalf of the Fund by INVESCO. In such
cases, INVESCO is authorized to pay the third party an annual sub-transfer
agency fee of up to $21.00 per participant in the third party's omnibus account
out of the transfer agency fee which is paid to INVESCO by the Fund.
<PAGE>
INVESCO MONEY MARKET FUNDS, INC.
INVESCO Cash Reserves Fund A no-load mutual
fund seeking high current income.
PROSPECTUS
September 30, 1994
To receive general information and prospectuses on any of INVESCO's funds or
retirement plans, or to obtain current account or price information, call
toll-free:
1-800-525-8085
To reach PAL, your 24-hour Personal Account Line, call:
1-800-424-8085
Or write to:
INVESCO Funds Group, Inc., Distributor
7800 E. Union Avenue, Suite 800
Post Office Box 173706
Denver, Colorado 80217-3706
If you're in Denver, visit one of our convenient Investor Centers:
Cherry Creek
155-B Fillmore Street
Denver Tech Center
7800 East Union Avenue
Lobby Level
