ANNUAL REPORT
May 31, 1997
INVESCO
MONEY
MARKET
FUNDS, INC.
Cash Reserves Fund
U.S. Government Money Fund
Tax-Free Money Fund
Smart Choices
For Seeking Liquidity
And Safety
INVESCO FUNDS
<PAGE>
Graph: Gross Domestic Product
Quarterly Growth Rate Change (Annualized)
This bar graph illustrates the annualized quarterly growth rate for the
Gross Domestic Product, for the period from the third quarter of 1994
through the first quarter of 1997.
Economic Overview June 1997
Over the last six months, indications of strong growth paired with signs
of subdued inflation have turned the markets into a daily tug-of-war between the
bulls and the bears. For the first five months of 1997, this increased
volatility took the stock market to both unprecedented heights and to a 9.8%
correction, and left the bond market confused and lacking direction.
In this environment, two distinct views on where the economy and
securities markets are going have emerged. The bulls suggest that the current
environment is a perfect scenario for the economy, as low inflation, coupled
with robust economic growth, has produced rising corporate profits and
fundamentally stronger companies. To support their analysis, they point to the
strength of the Gross Domestic Product - increasing at a 3.9% rate in the fourth
quarter of 1996 and at a revised rate of 5.8% in the first quarter of 1997. They
also examine prices across the economy as measured by the U.S. government's
broadest inflation gauge, the Gross Domestic Product price deflator, which rose
only 1.8% in 1996 - the smallest advance since 1964. The bulls suggest that 15
years of corporate restructuring, downsizing, and investing in technology have
produced, and will continue to produce, dividends for U.S. companies. In their
eyes, inflation concerns are not justified as they foresee stable to declining
interest rates for years to come.
The bears paint a different picture. They suggest that strong economic
growth combined with unusually low unemployment (the unemployment rate for 1996
was 5.3% and decreased to 4.8% in May 1997, the lowest level since 1973) has
caused tightness in the labor market. They believe this will lead to inflation
and a reduction in corporate profits. Under their scenario, the market is
overvalued and the current economic expansion is about to end. As potentially
higher interest rates will reduce the expansion of the economy.
During this period, the bond market has been held captive by the volatile
interest rate environment. It presently appears that fixed-income securities
may be trading in a consolidated range, as investors wait for the market to
develop clear trends. This has caused investors to focus their attention on
each Federal Open Market Committee meeting with increased scrutiny.
Consequently, nervousness in the bond market may continue until clearer trends
develop.
------------------------------------------
INVESCO's money market funds are actively managed to seek high current
income along with safety of principal. The funds seek to maintain a constant
price per share of $1.00, although this cannot be guaranteed. Please call us at
1-800-525-8085 for current yield information. Shares of the funds are not issued
or guaranteed by the U.S. government.
Fund Management
Since 1993, U.S. Government Money Fund and Cash Reserves Fund have been
managed by INVESCO Vice President Richard R. Hinderlie. He began his investment
career in 1973, and has extensive experience in fixed-income analysis and
portfolio management. Dick received his MBA from Arizona State University and
<PAGE>
BA in economics from Pacific Lutheran University. He is also co-manager of
INVESCO Short-Term Bond Fund.
INVESCO Vice President Ingeborg S. Cosby has managed Tax-Free Money Fund
since 1992. She launched her investment career in 1982 as a portfolio manager
assistant with First Affiliated Securities. Inge joined INVESCO's fixed-income
management group in 1985.
<PAGE>
INVESCO Money Market Funds, Inc.
Statement of Investment Securities
May 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Effective
Interest Principal
Description Rate % Amount Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH RESERVES Fund
SHORT-TERM INVESTMENTS 100.00%
US Government Agency Obligations 8.37%
Student Loan Marketing Association
11/24/1997 5.32 $ 20,000,000 $ 19,989,226
1/13/1999~ 5.36 25,000,000 25,000,000
2/8/1999~ 5.36 12,750,000 12,750,000
-------------
TOTAL US GOVERNMENT AGENCY
OBLIGATIONS (Cost $57,739,226) 57,739,226
-------------
Commercial Paper 91.63%
BANKS 6.00%
Norwest Corp, 6/11/1997 5.63 10,000,000 9,984,596
State Street Boston
6/23/1997 5.60 15,000,000 14,949,514
6/30/1997 5.61 16,500,000 16,426,795
-------------
41,360,905
-------------
Captive Finance 24.54%
AUTO PARTS 2.40%
PACCAR Financial
6/9/1997 5.70 5,000,000 4,993,766
6/10/1997 5.70 5,000,000 4,992,987
6/13/1997 5.70 6,600,000 6,587,657
-------------
16,574,410
-------------
AUTOMOBILES 4.46%
General Motors Acceptance
6/6/1997 5.62 9,500,000 9,500,000
7/14/1997 5.70 11,250,000 11,250,000
7/15/1997 5.70 10,000,000 10,000,000
-------------
30,750,000
-------------
FINANCIAL 2.78%
Transamerica Finance
6/17/1997 5.63 7,750,000 7,730,908
6/19/1997 5.64 11,500,000 11,468,130
-------------
19,199,038
-------------
<PAGE>
INSURANCE 6.52%
Prudential Funding
6/2/1997 5.61 15,000,000 15,000,000
6/3/1997 5.61 15,000,000 15,000,000
6/4/1997 5.61 15,000,000 15,000,000
-------------
45,000,000
-------------
MACHINERY 3.34%
Deere (John) Capital, 7/31/1997 5.68 23,000,000 23,000,000
-------------
RETAIL 5.04%
Sears Roebuck Acceptance
6/17/1997 5.63 12,250,000 12,250,000
6/30/1997 5.75 22,500,000 22,500,000
-------------
34,750,000
-------------
TOTAL CAPTIVE FINANCE 169,273,448
-------------
CHEMICALS 2.89%
Akzo Nobel NV, 6/23/1997 5.71 20,000,000 19,931,405
-------------
CONSUMER FINANCE 2.68%
Beneficial Corp
6/18/1997 5.59 10,000,000 10,000,000
6/19/1997 5.60 8,500,000 8,500,000
-------------
18,500,000
-------------
ELECTRIC UTILITIES 0.82%
National Rural Utilities
Cooperative Finance, 6/24/1997 5.68 5,700,000 5,679,675
-------------
ELECTRICAL EQUIPMENT 7.53%
General Electric, 6/27/1997 5.62 16,000,000 16,000,000
General Electric Capital
Services, 6/30/1997 5.62 16,000,000 16,000,000
Toshiba America, 6/16/1997 5.67 20,000,000 19,953,490
-------------
51,953,490
-------------
FINANCIAL 14.70%
CIT Group Holdings
6/12/1997 5.64 20,000,000 19,966,050
6/13/1997 5.64 15,000,000 14,972,223
General Electric Capital
6/25/1997 5.62 17,000,000 17,000,000
6/26/1997 5.62 16,000,000 16,000,000
<PAGE>
Heller Financial
6/20/1997 5.70 6,500,000 6,500,000
6/30/1997 5.76 21,000,000 21,000,000
6/30/1997 5.71 6,000,000 6,000,000
-------------
101,438,273
-------------
INSURANCE 4.93%
CIGNA Corp
6/4/1997 5.69 17,500,000 17,500,000
6/5/1997 5.62 6,500,000 6,500,000
6/24/1997 5.71 10,000,000 10,000,000
-------------
34,000,000
-------------
INVESTMENT BANK/BROKER FIRM 20.97%
Bear Stearns
6/16/1997 5.66 15,000,000 14,965,216
8/20/1997 5.75 17,000,000 16,788,346
Credit Suisse First Boston,
6/10/1997 5.63 15,000,000 14,979,208
Goldman Sachs Group LP
7/2/1997 5.68 15,000,000 14,928,032
7/3/1997 5.68 15,000,000 14,925,710
Merrill Lynch & Co
6/2/1997 5.63 10,000,000 9,998,458
6/30/1997 5.73 10,000,000 9,954,713
6/30/1997 5.72 2,745,000 2,732,578
7/7/1997 5.64 11,500,000 11,436,356
Morgan Stanley Group
6/9/1997 5.67 20,000,000 19,975,159
6/18/1997 5.64 14,000,000 13,963,324
-------------
144,647,100
-------------
OFFICE EQUIPMENT & SUPPLIES 0.58%
Xerox Corp,
6/11/1997 5.62 4,000,000 3,993,851
-------------
PAPER & FOREST PRODUCTS 1.45%
Weyerhaeuser Co,
6/2/1997 5.69 10,000,000 9,998,442
-------------
SERVICES 4.54%
Hertz Corp
6/5/1997 5.63 5,800,000 5,800,000
6/6/1997 5.64 5,000,000 5,000,000
7/7/1997 5.66 7,700,000 7,700,000
8/20/1997 5.74 13,000,000 12,838,436
-------------
31,338,436
-------------
<PAGE>
TOTAL COMMERCIAL PAPER
(Cost $632,115,025) 632,115,025
-------------
TOTAL INVESTMENT SECURITIES
AT VALUE 100.00%
(Cost $689,854,251#) $ 689,854,251
=============
TAX-FREE MONEY Fund
SHORT-TERM INVESTMENTS 100.00%
ARIZONA 2.57%
Arizona, FR, Ctfs of Participation,
Series 1993A, 11/1/1997 3.77 500,000 500,403
Arizona Hlth Facils Auth
(Arizona Vol Hosp Fedn),
AR Mode Bonds, 1985 Series A,
10/1/2015~ 3.00 480,000 480,000
Arizona Muni Fing Prog, FR,
Ctfs of Participation, Series 28,
8/1/2002~ 3.79 100,000 100,943
Maricopa Cnty Indl Dev Auth,
Arizona (Catholic Hlthcare West), FR,
Insured Hlth Facil Rev, 1992 Series A,
7/1/1997 3.96 175,000 175,083
-------------
1,256,429
-------------
ARKANSAS 1.02%
Crossett, Arkansas (Georgia-Pac
Corp Proj), A/FR, PCR Ref,
Series 1991, 10/1/1998~ 3.15 500,000 500,000
-------------
CALIFORNIA 0.20%
Los Angeles Regl Airports Impt,
California (American Airlines/
Los Angeles Intl Airport),
Facils Sublease FDR, Issue 1984,
Series D, 12/1/2024~ 4.00 100,000 100,000
-------------
COLORADO 1.30%
Centennial Wtr & Santn Dist, Colorado
(Douglas Cnty), FR, Gen Oblig Wtr
& Swr Ref, Series 1992A, 12/1/1997 3.73 500,000 502,204
Lewis-Palmer Cons School Dist #38,
Colorado (El Paso Cnty), FR,
Gen Oblig Ref and Impt, Series 1996A,
12/1/1997 3.71 130,000 130,893
-------------
633,097
-------------
<PAGE>
FLORIDA 6.78%
First Florida Govt Fing Commn, FR,
Rev, Series 1988, 7/1/1997 3.83 150,000 150,379
Palm Beach Cnty, Florida, FR,
Rev Ref, Series 1993, 10/1/1997 3.72 250,000 250,349
Pasco Cnty School Brd, Florida, VR,
Ctfs of Participation, Series 1996,
8/1/2026~ 4.10 1,000,000 1,000,000
Pinellas Cnty Edl Facils Auth,
Florida, ACES, Gen Oblig Rev Ref,
12/1/2025~ 4.30 1,000,000 1,000,000
St Lucie Cnty, Florida (Savannah
Hosp Proj), FRD, IDR, Series 1985,
11/1/2015~ 3.25 910,000 910,000
-------------
3,310,728
-------------
GEORGIA 8.72%
DeKalb Cnty Hosp Auth, Georgia
(DeKalb Med Ctr Proj), AR, RAC,
Series 1993B, 9/1/2009~ 3.15 1,245,000 1,245,000
DeKalb Private Hosp Auth, Georgia
(Egleston Children's Hosp at Emory
Univ Proj), VRD, RAC, Series 1994B,
12/1/2017~ 3.10 500,000 500,000
Macon-Bibb Cnty Hosp Auth, Georgia
(Med Ctr of Cent Georgia), AR, RAC,
Series 1994, 4/1/2007~ 3.15 1,645,000 1,645,000
Peach Cnty School Dist, Georgia,
FR, Gen Oblig School Bonds,
Series 1994, 2/1/1998 3.75 365,000 369,667
Savannah Econ Dev Auth, Georgia
(Home Depot Proj), AR, Exmp Facil
Rev, Series 1995B, 8/1/2025~ 3.25 500,000 500,000
-------------
4,259,667
-------------
IDAHO 4.61%
Idaho, FR, TAN, Gen Oblig, Series
1996, 6/30/1997 3.94 500,000 500,168
6/30/1997 3.89 500,000 500,197
6/30/1997 3.70 750,000 750,502
6/30/1997 3.40 500,000 500,176
-------------
2,251,043
-------------
<PAGE>
ILLINOIS 4.48%
Chicago, Illinois, AR, Gen Oblig
Tender Notes, Series 1997,
1/31/1999~ 3.65 500,000 500,000
Illinois Dev Fin Auth (6 West
Hubbard Street Proj), F/FR, IDR,
Series 1986, 12/1/2016~ 3.90 890,000 890,000
Illinois Dev Fin Auth (Kindlon
Partners Proj), VR, Indl Proj Rev,
Series 1991, 5/1/2006~ 3.40 800,000 800,000
-------------
2,190,000
-------------
INDIANA 6.56%
Daviess Cnty, Indiana (Perdue Farms/
Shenandoah Valley Farms Facil),
V/FRD, Econ Dev Rev, 1987 Issue,
9/1/2007~ 3.80 1,500,000 1,500,000
Gary, Indiana (US Steel Proj), FRD,
Environmental Impt Rev Ref,
Series 1984, 7/15/2002~ 3.60 1,000,000 1,000,000
Indiana Toll Road Commn, FR,
East-West Toll Road Rev, 1980 Series,
1/1/2000~ 3.77 200,000 207,074
Newton Cnty, Indiana (Intec Group
Proj), A/FR, Econ Dev Rev,
Series 1994, 9/1/2010~ 3.40 500,000 500,000
-------------
3,207,074
-------------
KANSAS 3.28%
Fairway, Kansas (Nichols (J C)
Co Proj), FRD, Indl Rev, Series 1984,
11/1/2014~ 3.90 500,000 500,000
Kansas City, Kansas (PQ Corp-Kansas
City Proj), AR, Indl Ref Rev,
Series 1985, 8/1/2015~ 4.10 600,000 600,000
Spring Hill, Kansas (Abrasive Engr
& Mfg Proj), VR, Indl Rev,
Series 1996, 9/1/2016~ 3.40 500,000 500,000
-------------
1,600,000
-------------
LOUISIANA 3.80%
Iberville Parish, Louisiana, FR,
Sales & Use Tax, Rev Ref, Series
1987, 9/1/1997 3.89 200,000 203,000
Lafayette, Louisiana, FR, Utils
Rev Ref, Series 1993, 11/1/1997 3.77 100,000 100,000
Louisiana, FR, Gen Oblig Ref,
Series A, 8/1/1997 3.70 100,000 100,467
<PAGE>
Louisiana Pub Facils Auth (Kenner
Hotel Ltd Partnership Proj), ATS,
IDR, 1985 Series, 12/1/2015~ 4.05 300,000 300,000
Louisiana Pub Facils Auth, School
Hlthcare System Rev, TECP, 1/1/2015~ 3.75 1,000,000 1,000,000
New Orleans Intl Airport, Louisiana,
FR, Gen Purpose Rev,
Series A 1987, 8/1/2006~ 4.15 150,000 152,806
-------------
1,856,273
-------------
MASSACHUSETTS 0.69%
Westford, Massachusetts, FR,
Gen Oblig, 10/1/1997 2.56 335,000 335,739
-------------
MICHIGAN 1.22%
Michigan Strategic Fund (United
Fixtures Proj), AR, Ltd Oblig Rev,
Series 1995, 5/1/2015~ 3.40 595,000 595,000
-------------
MISSISSIPPI 1.02%
Jackson Cnty Wtr System, Mississippi
(Chevron Corp), VR, Wtr System Rev,
Gen Oblig Ref, Series 1994, 11/1/2024~ 3.81 500,000 500,000
-------------
MISSOURI 1.02%
Columbia, Missouri, VR, Special Oblig
Ins Reserve, Series 1988A, 6/1/2008~ 3.10 500,000 500,000
-------------
MONTANA 0.65%
Montana Hlth Facil Auth (Cmnty Med
Ctr), FR, Hlth Care Rev, Series 1996,
6/1/1997 3.89 315,000 315,000
-------------
NEBRASKA 1.02%
Hamilton Cnty, Nebraska (Iams Co
Proj), VR, IDR Ref, Series 1990,
7/1/2005~ 3.24 500,000 500,000
-------------
NEVADA 2.05%
Clark Cnty, Nevada, AR, Airport
System Ref Rev, Series 1993A,
7/1/2012~ 3.00 1,000,000 1,000,000
-------------
NEW JERSEY 5.38%
Evesham Township Brd Ed, New Jersey
(Burlington Cnty), FR, Gen Oblig
School, Series 1996, 9/1/1997 2.44 325,000 326,001
New Jersey Econ Dev Auth (Genlyte
Camden Cnty Proj), AR, IDR Ref,
Series 1990, 12/19/2009~ 3.60 2,300,000 2,300,000
-------------
2,626,001
-------------
<PAGE>
NEW MEXICO 3.75%
Albuquerque, New Mexico (Presbyterian
Hlthcare Svcs), FR, Hosp System Rev,
1993 Series B, 8/1/1997 3.69 200,000 200,132
Gadsen Indpt School Dist #16,
New Mexico (Dona Ana & Otero Cntys),
FR, Gen Oblig School Bldg,
Series 1996, 8/15/1997 3.67 305,000 306,393
Moriarty Muni School Dist #8,
New Mexico (Torrance, Bernalillo
& Santa Fe Cntys), FR, Gen Oblig
School Bldg, Series 1996, 7/1/1997 2.67 200,000 200,314
New Mexico State Hwy Commn, AR, Sub
Tax Lien Hwy Rev, Series 1996,
6/15/2011~ 3.70 500,000 500,000
New Mexico Univ Regents, ATS, Sub
Lien, System Rev Ref, Series 1996,
6/1/2006~ 3.00 625,000 625,000
-------------
1,831,839
-------------
NEW YORK 6.21%
Monroe Cnty Indl Dev Agency, New York
(Ron Ink Proj), VR, IDR Series 1996,
7/1/2013~ 3.60 1,700,000 1,700,000
New York, New York, FR, Gen Oblig,
1989 Series A, 8/15/2028~ 3.02 400,000 406,322
New York Muni Wtr Fin Auth, New York,
FR, Wtr & Swr System Rev, 1988
Series A, 6/15/2010~ 3.55 655,000 669,381
1992 Series C, 6/15/2021~ 3.31 255,000 259,096
-------------
3,034,799
-------------
NORTH CAROLINA 2.05%
North Carolina Edl Facils Fin Agency
(Bowman Gray School of Medicine Proj),
VR, Rev, Series 1990, 9/1/2020~ 3.10 500,000 500,000
North Carolina Med Care Commn
(Wayne Mem Hosp Proj), ACES, Hosp
Rev, Series 1991B, 10/1/2013~ 4.05 500,000 500,000
-------------
1,000,000
-------------
OKLAHOMA 2.05%
Oklahoma Inds Auth (St Anthony
Physicians Bldg Proj), VR,
Med Practice Facil Rev, Series
1986, 6/1/2016~ 3.59 1,000,000 1,000,000
-------------
<PAGE>
PENNSYLVANIA 0.96%
Allegheny Cnty Hosp Dev Auth,
Pennsylvania (Magee-Womens Hosp), FR,
Hosp Rev, Series 1988A, 10/1/2013~ 2.57 455,000 470,415
-------------
SOUTH CAROLINA 1.43%
Anderson Cnty, South Carolina (Belton
Inds Proj), AR, Indl Rev, Series
1991A, 7/1/2004~ 3.40 700,000 700,000
-------------
TENNESSEE 3.07%
Greeneville Hlth & Edl Facils Brd,
Tennessee (Laughlin Mem Hosp Proj),
VRD, Rev, Series 1992, 10/1/2014~ 3.15 900,000 900,000
Nashville Metro Airport Auth,
Tennessee (American Airlines Proj),
AR, Spl Facil Rev Ref, Series 1995B,
10/1/2012~ 4.00 600,000 600,000
-------------
1,500,000
-------------
TEXAS 17.81%
Aldine Indpt School Dist, Texas
(Harris Cnty), FR, Gen Oblig Unltd
Tax Schoolhouse Bonds, Series 1992,
2/15/1998 3.71 160,000 163,850
Coastal Wtr Auth, Texas, FR, Wtr
Conveyance System Rev, 12/15/2017~ 3.73 130,000 133,073
Corsicana, Texas (Navarro Cnty), FR,
Wtrwks & Swr System Rev Ref,
Series 1997A, 8/15/1997 3.76 505,000 505,000
Crawford Indl Dev Corp, Texas
(Franklin Inds Proj), VR, IDR,
Series 1987, 10/1/2012~ 3.40 2,300,000 2,300,000
Harris Cnty, Texas, A/FR, Toll
Road Multiple Mode, Sr Lien Rev,
Series 1985C, 8/15/2000~ 3.94 250,000 262,087
Lower Neches Valley Auth, Texas
(Chevron USA Proj), AR, PCR,
Series 1987, 2/15/2017~ 3.65 500,000 500,000
Lucas, Texas (Collin Cnty), FR,
Combination Tax & Ltd Plg Rev,
Ctfs of Oblig, Series 1997,
2/1/1998 3.96 145,000 147,584
Mansfield, Texas (Tarrant, Johnson
& Ellis Cntys), FR, Gen Oblig,
Series 1997, 2/15/1998 3.79 125,000 128,158
Mansfield Indpt School Dist, Texas
(Tarrant & Johnson Cntys), VR,
Unlimited Tax School Bldg, Series
1996, 8/15/2021~ 4.01 500,000 500,026
<PAGE>
Palo Duro River Auth, Texas, FR, Gen
Oblig, Series 1987, 8/1/2004~ 3.65 205,000 206,327
Richardson Indpt School Dist, Texas
(Dallas Cnty), VR, Unltd Tax School
Bldg, Series 1997A, 8/15/2022~ 3.60 1,000,000 999,956
Texas, FR, Gen Oblig, College
Student Ln, 8/1/1997 3.66 200,000 201,033
Texas, FR, Gen Oblig, Wtr Dev,
Series 1996C & 1996D, 8/1/1997 3.94 345,000 345,027
Texas, FR, TRAN, Series 1996,
8/29/1997 3.96 500,000 500,782
8/29/1997 3.95 1,000,000 1,001,589
Texas Assn of School Brds, FR, TAN,
Ctfs of Participation,
Series 1996A, 8/29/1997 3.94 500,000 500,825
Texas Pub Fin Auth, FR, Gen Oblig,
Series 1993A, 10/1/1997 3.79 300,000 304,097
-------------
8,699,414
-------------
UTAH 1.02%
Tremonton City, Box Elder Cnty,
Utah (La-Z-Boy Chair Proj), VRD,
IDR, Series 1990, 6/1/2000~ 3.60 500,000 500,000
-------------
WASHINGTON 2.62%
Lynnwood, Washington, FR, Ltd Tax
Gen Oblig Ref, Series 1996,
10/1/1997 2.42 340,000 340,410
Washington, FR, Gen Oblig & Gen Oblig
Ref, Series 1995C-AT-8
& Series R-95B, 7/1/1997 3.52 500,000 500,819
Washington, FR, Motor Veh Fuel Tax,
Gen Oblig Ref, Series R-93C-1,
9/1/1997 3.72 440,000 440,366
-------------
1,281,595
-------------
WISCONSIN 2.25%
Wisconsin, FR, Gen Oblig Ref, 1993
Series 1, 11/1/1997 3.72 300,000 300,905
Wisconsin Hlth & Edl Facils Auth
(SSM Hlth Care Proj), ACES, Hlth
Facils Rev, Series 1990A,
6/1/2006~ 3.95 800,000 800,000
-------------
1,100,905
-------------
WYOMING 0.41%
Platte Cnty, Wyoming (Tri-State
Generation & Transmission Assn Proj),
DATES, PCR, Series 1984A, 7/1/2014~ 4.10 200,000 200,000
-------------
<PAGE>
TOTAL INVESTMENT SECURITIES AT
VALUE 100.00%
(Cost $48,855,018#) $ 48,855,018
=============
U.S. GOVERNMENT MONEY Fund
SHORT-TERM INVESTMENTS 100.00%
US Government Agency Obligations 100.00%
Federal Farm Credit Bank, 6/18/1997 5.49 6,000,000 5,984,695
Federal Home Loan Bank, 6/25/1997 5.48 4,190,000 4,174,952
Federal Home Loan Mortgage
6/2/1997 5.43 20,000,000 19,997,024
6/30/1997 5.49 15,000,000 14,934,841
8/19/1997 5.59 5,000,000 4,940,183
Federal National Mortgage
Association
6/4/1997 5.51 5,000,000 4,997,735
6/11/1997 5.53 5,000,000 4,992,437
6/23/1997 5.49 5,000,000 4,983,523
7/9/1997 5.52 12,365,000 12,294,368
Student Loan Marketing Association
1/13/1999~ 5.37 5,000,000 5,000,000
-------------
TOTAL INVESTMENT SECURITIES
AT VALUE 100.00%
(Cost $82,299,758#) $ 82,299,758
=============
</TABLE>
The following abbreviations may be used in portfolio descriptions:
A/FR* - Adjustable/Fixed Rate
ACES* - Adjustable Convertible Extendable Securities
AR* - Adjustable Rate
ARD* - Adjustable Rate Demand
ATS* - Adjustable Tender Securities
BAN - Bond Anticipation Notes
DATES* - Daily Adjustable Tax-Exempt Securities
FDR* - Flexible Demand Revenue
F/FR - Floating/Fixed Rate
FR - Fixed Rate
FRD* - Floating Rate Demand
GAN - Grant Anticipation Notes
IDR - Industial Development Revenue
MAVRIC* - Multi-Mode and Variable Rate Investment Certificates
PCR - Pollution Control Revenue
RAC - Revenue Anticipation Certificates
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TEAMS* - Tax-Exempt Adjustable Mode Securities
TECP - Tax-Exempt Commercial Paper
<PAGE>
TRAN - Tax & Revenue Anticipation Notes
UPDATES* - Unit Priced Demand Tax-Exempt Securities
V/FRD* - Variable/Fixed Rate Demand
VR* - Variable Rate
VRD* - Variable Rate Demand
* Rate is subject to change. Rate shown reflects current rate.
~ All securities with a maturity date greater than one year have either a
variable rate, demand feature, optional or mandatory put resulting in an
effective maturity of one year or less. Rate shown reflects current rate.
# Also represent cost for income tax purposes.
See Notes to Financial Statements
<PAGE>
INVESCO Money Market Funds, Inc.
Statement of Assets and Liabilities
May 31, 1997
<TABLE>
<CAPTION>
Cash Tax-Free U.S. Government
Reserves Money Money
Fund Fund Fund
-------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investment Securities:
At Cost $689,854,251 $48,855,018 $82,299,758
=================================================
At Value $689,854,251 $48,855,018 $82,299,758
Cash 0 2,093 0
Receivables:
Fund Shares Sold 17,249,373 61,921 1,326,169
Interest 841,734 549,322 40,146
Prepaid Expenses and
Other Assets 137,139 33,581 56,602
-------------------------------------------------
TOTAL ASSETS 708,082,497 49,501,935 83,722,675
-------------------------------------------------
LIABILITIES
Payables:
Custodian 94,740 0 2,217
Distributions to Shareholders 39,612 6,143 5,090
Fund Shares Repurchased 46,241,846 1,913,263 17,258,462
Accrued Expenses and
Other Payables 58,499 5,404 5,427
-------------------------------------------------
TOTAL LIABILITIES 46,434,697 1,924,810 17,271,196
-------------------------------------------------
Net Assets at Value* $661,647,800 $47,577,125 $66,451,479
=================================================
Shares Outstanding 661,647,800 47,577,125 66,451,479
Net Asset Value, Offering
and Redemption
Price per Share $1.00 $1.00 $1.00
=================================================
</TABLE>
* The Fund has ten billion authorized shares of common stock, par value $0.01
per share. Of such shares, five billion, one billion and one billion have been
allocated to Cash Reserves, Tax-Free Money and U.S. Government Money Funds,
respectively. Each Fund's paid-in capital was $661,647,800, $47,577,125 and
$66,451,479, respectively.
See Notes to Financial Statements
<PAGE>
INVESCO Money Market Funds, Inc.
Statement of Operations
Year Ended May 31, 1997
<TABLE>
<CAPTION>
Cash Tax-Free U.S.Government
Reserves Money Money
Fund Fund Fund
------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
INTEREST INCOME $39,751,710 $2,041,513 $4,578,634
------------------------------------------------
EXPENSES
Investment Advisory Fees 2,978,520 282,216 426,139
Transfer Agent Fees 2,995,219 174,207 339,383
Administrative Fees 118,983 18,463 22,784
Custodian Fees and Expenses 149,020 15,051 20,511
Directors' Fees and Expenses 36,028 9,459 10,702
Professional Fees and Expenses 39,846 21,411 14,484
Registration Fees and Expenses 137,675 31,653 52,942
Reports to Shareholders 191,461 14,789 19,857
Other Expenses 22,980 6,745 3,690
------------------------------------------------
TOTAL EXPENSES 6,669,732 573,994 910,492
Fees and Expenses Absorbed
by Investment Adviser (430,651) (143,085) (172,695)
Fees and Expenses Paid
Indirectly (48,638) (7,401) (10,589)
------------------------------------------------
NET EXPENSES 6,190,443 423,508 727,208
------------------------------------------------
Net Investment Income and
Net Increase in Net Assets
from Operations $33,561,267 $1,618,005 $3,851,426
================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
INVESCO Money Market Funds, Inc.
Statement of Changes in Net Assets
Year Ended May 31
<TABLE>
<CAPTION>
Cash Reserves Tax-Free U.S. Government
Fund Money Fund Money Fund
------------------------------- --------------------------- ---------------------------
1997 1996 1997 1996 1997 1996
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS AND DISTRIBUTIONS
TO SHAREHOLDERS
Net Investment Income
Earned and Distributed
to Shareholders $ 33,561,267 $ 31,339,796 $ 1,618,005 $ 1,727,957 $ 3,851,426 $ 3,603,896
=============================== =========================== ============================
FUND SHARE TRANSACTIONS
Proceeds from Sales
of Shares $5,620,288,150 $3,616,602,090 $209,826,221 $184,575,224 $1,073,544,769 $479,278,785
Reinvestment of
Distributions 25,866,718 28,770,174 1,489,166 1,603,520 3,296,282 3,206,104
------------------------------- --------------------------- ----------------------------
5,646,154,868 3,645,372,264 211,315,387 186,178,744 1,076,841,051 482,484,889
Amounts Paid for
Repurchases of
Shares (5,571,784,092)(3,702,436,013) (215,386,841) (193,309,799) (1,089,781,101)(463,936,348)
------------------------------- --------------------------- ----------------------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM FUND
SHARE TRANSACTIONS 74,370,776 (57,063,749) (4,071,454) (7,131,055) (12,940,050) 18,548,541
NET ASSETS
Beginning of Period 587,277,024 644,340,773 51,648,579 58,779,634 79,391,529 60,842,988
------------------------------- --------------------------- ----------------------------
End of Period $ 661,647,800 $ 587,277,024 $ 47,577,125 $ 51,648,579 $ 66,451,479 $ 79,391,529
=============================== =========================== ============================
-------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 5,620,288,150 3,616,602,090 209,826,221 184,575,224 1,073,544,769 479,278,785
Shares Issued from
Reinvestment of
Distributions 25,866,718 28,770,174 1,489,166 1,603,520 3,296,282 3,206,104
------------------------------- --------------------------- ----------------------------
5,646,154,868 3,645,372,264 211,315,387 186,178,744 1,076,841,051 482,484,889
Shares Repurchased (5,571,784,092)(3,702,436,013) (215,386,841) (193,309,799) (1,089,781,101)(463,936,348)
------------------------------- --------------------------- ----------------------------
Net Increase (Decrease)
in Fund Shares 74,370,776 (57,063,749) (4,071,454) (7,131,055) (12,940,050) 18,548,541
=============================== =========================== ============================
</TABLE>
See Notes to Financial Statements
<PAGE>
INVESCO Money Market Funds, Inc.
Notes to Financial Statements
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO Money Market
Funds, Inc. (the "Fund") was incorporated in Maryland and presently consists of
three separate Funds: Cash Reserves Fund, Tax-Free Money Fund and U.S.
Government Money Fund. The investment objectives of the Funds are: to seek as
high a level of current income for Cash Reserves Fund; to seek as high a level
of current income exempt from federal income taxation for Tax-Free Money Fund;
and to seek current income by investing only in debt obligations issued or
guaranteed by the U.S. Government or its agencies for U.S. Government Money
Fund. The Fund is registered under the Investment Company Act of 1940 (the
"Act") as a diversified, open-end management investment company.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
A. SECURITY VALUATION - Securities held by the Fund are valued at their market
value determined by the amortized cost method of valuation. If
management believes that such valuation does not reflect the securities' fair
value, these securities are valued at fair value as determined in good
faith by the Fund's board of directors.
B. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security
transactions are accounted for on the trade date. Interest income, which may
be comprised of stated coupon rate, market discount, original issue
discount and amortized premium, is recorded on the accrual basis. The
Fund amortizes discounts and premiums paid on purchases of securities to
the earliest put or call date. Cost is determined on the specific
identification basis.
C. FEDERAL AND STATE TAXES - The Fund has complied and continues to comply
with the provisions of the Internal Revenue Code applicable to
regulated investment companies and, accordingly, has made or intends to
make sufficient distributions of net investment income and net realized
capital gains, if any, to relieve it from all federal and state income taxes
and federal excise taxes. Of the distributions paid by Tax-Free Money
Fund for the year ended May 31, 1997, 99.99% were exempt from federal income
taxes.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - All of the Fund's net
investment income is distributed to shareholders by dividends declared daily
and paid monthly. Income dividends are reinvested at the month-end net asset
value.
E. EXPENSES - Each of the Funds bears expenses incurred specifically on its
behalf and, in addition, each Fund bears a portion of general expenses, based
on the relative net assets of each Fund. Under an agreement between each
Fund and the Fund's Custodian, agreed upon Custodian Fees and Expenses
are reduced by credits granted by the Custodian from any temporarily
uninvested cash. Such credits are included in Fees and Expenses Paid
Indirectly in the Statement of Operations.
NOTE 2 - INVESTMENT ADVISORY AND OTHER AGREEMENTS. INVESCO Funds Group,
Inc. ("IFG") serves as the Fund's investment adviser. As compensation for its
services to the Fund, IFG receives an investment advisory fee which is accrued
<PAGE>
daily at the applicable rate and paid monthly. The fee for each Fund is
based on the annual rate of 0.50% on the first $300 million of average net
assets; reduced to 0.40% on the next $200 million of average net assets; and
0.30% on average net assets in excess of $500 million.
In accordance with a Sub-Advisory Agreement between IFG and INVESCO Trust
Company ("ITC"), a wholly owned subsidiary of IFG, investment decisions of each
Fund are made by ITC. Fees for such sub-advisory services are paid by IFG.
In accordance with an Administrative Agreement, each Fund pays IFG an
annual fee of $10,000, plus an additional amount computed at an annual rate of
0.015% of average net assets to provide administrative, accounting and clerical
services. The fee is accrued daily and paid monthly.
IFG receives a transfer agent fee at an annual rate of $27.00 per
shareholder account, or, where applicable, per participant in an omnibus
account, per year. IFG may pay such fee for participants in omnibus accounts to
affiliates or third parties. The fee is paid monthly at one-twelfth of the
annual fee and is based upon the actual number of accounts in existence during
each month.
IFG has voluntarily agreed, in some instances, to absorb certain fees and
expenses incurred by Cash Reserves and U.S. Government Money Funds. IFG and ITC
have voluntarily agreed, in some instances, to absorb certain fees and expenses
incurred by Tax-Free Money Fund.
NOTE 3 - TRANSACTIONS WITH AFFILIATES. Certain of the Fund's officers and
directors are also officers and directors of IFG or ITC.
The Fund has adopted an unfunded deferred compensation plan covering all
independent directors of the Fund who will have served as an independent
director for at least five years at the time of retirement. Benefits under this
plan are based on an annual rate equal to 40% of the retainer fee at the time of
retirement.
Pension expenses for the year ended May 31, 1997, included in Directors'
Fees and Expenses in the Statement of Operations, and unfunded accrued pension
costs and pension liability included in Prepaid Expenses and Accrued Expenses,
respectively, in the Statement of Assets and Liabilities were as follows:
Unfunded
Pension Accrued Pension
Fund Expenses Pension Costs Liability
- --------------------------------------------------------------------------------
Cash Reserves Fund $9,464 $29,095 $58,953
Tax-Free Money Fund 809 2,909 5,806
U.S. Government Money Fund 1,184 3,001 6,225
Other Information
UNAUDITED
On January 31, 1997, a special meeting of the shareholders of the Fund was held
at which the eleven directors identified below were elected, the selection of
Price Waterhouse LLP as independent accountants (Proposal 1), the approval of a
new investment advisory agreement with IFG, (Proposal 2) and a new sub-advisory
agreement between IFG and ITC (Proposal 3) were ratified. The following is a
report of the votes cast:
<PAGE>
<TABLE>
<CAPTION>
Withheld/
Nominee/Proposal For Against Abstain Total
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash Reserves Fund
Charles W. Brady 395,457,853 0 18,151,531 413,609,384
Dan J. Hesser 395,531,134 0 18,078,250 413,609,384
Fred A. Deering 395,319,141 0 18,290,243 413,609,384
Victor L. Andrews 394,369,922 0 19,239,462 413,609,384
Bob R. Baker 394,354,619 0 19,254,765 413,609,384
Lawrence H. Budner 394,510,043 0 19,099,341 413,609,384
Daniel D. Chabris 393,999,542 0 19,609,842 413,609,384
A.D. Frazier, Jr 394,651,925 0 18,957,459 413,609,384
Hubert L. Harris, Jr 394,369,168 0 19,240,216 413,609,384
Kenneth T. King 395,048,293 0 18,561,091 413,609,384
John W. McIntyre 394,615,812 0 18,993,572 413,609,384
Proposal 1 393,088,884 4,966,891 15,553,607 413,609,382
Proposal 2 384,655,445 8,354,175 20,599,762 413,609,382
Proposal 3 385,289,730 8,554,379 19,765,274 413,609,383
Tax-Free Money Fund
Charles W. Brady 37,907,982 0 2,005,944 39,913,926
Dan J. Hesser 37,916,456 0 1,997,470 39,913,926
Fred A. Deering 37,925,848 0 1,988,078 39,913,926
Victor L. Andrews 37,287,539 0 2,626,387 39,913,926
Bob R. Baker 37,291,471 0 2,622,455 39,913,926
Lawrence H. Budner 37,227,587 0 2,686,339 39,913,926
Daniel D. Chabris 37,250,317 0 2,663,609 39,913,926
A.D. Frazier, Jr 37,203,705 0 2,710,221 39,913,926
Hubert L. Harris, Jr 37,302,245 0 2,611,681 39,913,926
Kenneth T. King 37,889,802 0 2,024,124 39,913,926
John W. McIntyre 37,287,066 0 2,626,860 39,913,926
Proposal 1 37,153,168 663,255 2,097,502 39,913,925
Proposal 2 36,125,038 1,012,085 2,776,803 39,913,926
Proposal 3 36,284,662 995,454 2,633,809 39,913,925
U.S. Government Money Fund
Charles W. Brady 44,877,545 0 1,733,676 46,611,221
Dan J. Hesser 44,952,517 0 1,658,704 46,611,221
Fred A. Deering 44,955,902 0 1,655,319 46,611,221
Victor L. Andrews 44,830,963 0 1,780,258 46,611,221
Bob R. Baker 44,496,957 0 2,114,264 46,611,221
Lawrence H. Budner 44,808,784 0 1,802,437 46,611,221
Daniel D. Chabris 44,802,278 0 1,808,943 46,611,221
A.D. Frazier, Jr 44,799,431 0 1,811,790 46,611,221
Hubert L. Harris, Jr 44,763,237 0 1,847,984 46,611,221
Kenneth T. King 44,966,898 0 1,644,323 46,611,221
John W. McIntyre 44,896,624 0 1,714,597 46,611,221
<PAGE>
Proposal 1 44,624,436 517,544 1,469,239 46,611,219
Proposal 2 43,578,377 1,075,247 1,957,595 46,611,219
Proposal 3 44,031,423 1,002,639 1,577,158 46,611,220
</TABLE>
<PAGE>
INVESCO Money Market Funds, Inc.
Financial Highlights
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Period Year
Ended Ended
Year Ended May 31 May 31 January 31
------------------------------------------------------------------------------------
1997 1996 1995 1994 1993> 1993
<S> <C> <C> <C> <C> <C> <C>
Cash Reserves Fund
PER SHARE DATA
Net Asset Value -
Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------------------------------------------------------ ----- -----
INCOME AND DISTRIBUTIONS
FROM INVESTMENT OPERATIONS
Net Investment Income Earned
and Distributed to
Shareholders 0.05 0.05 0.05 0.03 0.01 0.03
------------------------------------------------------ ----- -----
Net Asset Value
End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
====================================================== ===== =====
TOTAL RETURN 4.69% 5.01% 4.76% 2.58% 0.75%* 3.00%
RATIOS
Net Assets - End of Period
($000 Omitted) $661,648 $587,277 $644,341 $747,551 $490,932 $506,337
Ratio of Expenses to
Average Net Assets# 0.86%@ 0.87%@ 0.75% 0.81% 0.98%~ 0.80%
Ratio of Net Investment
Income to Average
Net Assets# 4.62% 4.86% 4.65% 2.61% 2.26%~ 2.98%
</TABLE>
> From February 1, 1993 to May 31, 1993.
* Based on operations for the period shown and, accordingly, is not
representative of a full year.
# Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended May 31, 1997, 1996, 1995. If such expenses had not been voluntarily
absorbed, ratio of expenses to average net assets would have been 0.92%, 0.92%
and 0.85%, respectively, and the ratio of net investment income to average net
assets would have been 4.56%, 4.81% and 4.55%, respectively.
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
<PAGE>
INVESCO Money Market Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Period Year
Ended Ended
Year Ended May 31 May 31 April 31
----------------------------------------------------- ------- ----------
1997 1996 1995 1994 1993> 1993
<S> <C> <C> <C> <C> <C> <C>
Tax-Free Money Fund
PER SHARE DATA
Net Asset Value -
Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----------------------------------------------------- ----- ------
INCOME AND DISTRIBUTIONS FROM
INVESTMENT OPERATIONS
Net Investment Income Earned
and Distributed to
Shareholders 0.03 0.03 0.03 0.02 0.00+ 0.02
----------------------------------------------------- ----- -----
Net Asset Value -
End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===================================================== ===== =====
TOTAL RETURN 2.90% 3.08% 2.86% 1.84% 0.16%* 2.16%
RATIOS
Net Assets -End of Period
($000 Omitted) $47,577 $51,649 $58,780 $84.521 $490,932 $65,167
Ratio of Expenses to
Average Net Assets# 0.76%@ 0.77%@ 0.75% 0.75% 0.75%~ 0.75%
Ratio of Net Investment
Income to Average
Net Assets# 2.86% 3.03% 2.77% 1.83% 2.03%~ 2.13%
</TABLE>
> From May 1, 1993 to May 31, 1993.
+ Net Investment Income Earned and Distributed to Shareholders for the period
ending May 31, 1993 aggregated less than $0.01 on a per share basis.
* Based on operations for the period shown and, accordingly, is not
representative of a full year.
# Various expenses of the Fund were voluntarily absorbed by IFG and ITC for
the years ended May 31, 1997, 1996, 1995 and 1994, the period ended May 31,
1993, and the year ended April 30, 1993. If such expenses had not been
voluntarily absorbed, ratio of expenses to average net assets would have been
1.01%, 1.05%, 1.00%, 1.00%, 1.19% and 1.02%, respectively, and ratio of net
investment income to average net assets would have been 2.61%, 2.75%, 2.52%,
1.58%, 1.59%, and 1.86%, respectively.
<PAGE>
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
<PAGE>
INVESCO Money Market Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Period Year
Ended Ended
Year Ended May 31 May 31 April 30
----------------------------------------------------- -------- --------
1997 1996 1995 1994 1993> 1993
<S> <C> <C> <C> <C> <C> <C>
U.S. Government Money Fund
PER SHARE DATA
Net Asset Value -
Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----------------------------------------------------- -------- ---------
INCOME AND DISTRIBUTIONS FROM
INVESTMENT OPERATIONS
Net Investment Income Earned
and Distributed to
Shareholders 0.04 0.05 0.05 0.03 0.01 0.03
----------------------------------------------------- -------- ---------
Net Asset Value -
End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===================================================== ======== =========
TOTAL RETURN 4.57% 4.90% 4.66% 2.56% 0.93%* 2.97%
RATIOS
Net Assets -End of Period
($000 Omitted) $66,451 $79,392 $60,843 $73,912 $34,519 $30,282
Ratio of Expenses to
Average Net Assets# 0.86%@ 0.87%@ 0.75% 0.75% 0.75%~ 0.75%
Ratio of Net Investment
Income to Average
Net Assets# 4.51% 4.78% 4.55% 2.60% 2.27%~ 2.82%
</TABLE>
> From January 1, 1993 to May 31, 1993.
* Based on operations for the period shown and, accordingly, is not
representative of a full year.
# Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended May 31, 1997, 1996, 1995 and 1994, the period ended May 31, 1993, and
the year ended December 31, 1992. If such expenses had not been voluntarily
absorbed, ratio of expenses to average net assets would have been 1.06%,
1.05%, 1.10%, 1.00%, 1.18% and 1.08%, respectively, and the ratio of net
investment income to average net assets would have been 4.31%, 4.59%, 4.20%,
2.35%, 1.84% and 2.49%, respectively.
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholders of
INVESCO Money Market Funds, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the statement of investment securities, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Cash Reserves Fund, Tax-Free Money
Fund, and U.S. Government Money Fund (constituting INVESCO Money Market Funds,
Inc., hereafter referred to as the "Fund") at May 31, 1997, the results of each
of their operations for the year then ended, the changes in each of their net
assets for each of the two years in the period then ended and the financial
highlights for each of the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at May 31, 1997 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
Price Waterhouse LLP
Denver, Colorado
July 2, 1997
<PAGE>
FAMILY OF FUNDS
Newspaper
Fund Name Fund Code Ticker Symbol Abbreviation
- --------------------------------------------------------------------------------
International
International Growth 49 FSIGX IntlGr
Asian Growth 41 IVAGX AsianGr
European 56 FEURX Europ
European Small Company 37 IVECX EuroSmCo
Latin American Growth 34 IVSLX LatinAmGr
Pacific Basin 54 FPBSX PcBas
- --------------------------------------------------------------------------------
Sector
Energy 50 FSTEX Enrgy
Environmental Services 59 FSEVX Envirn
Financial Services 57 FSFSX FinSvc
Gold 51 FGLDX Gold
Health Sciences 52 FHLSX HlthSc
Leisure 53 FLISX Leisur
Realty 42 IVSRX Realty
Technology 55 FTCHX Tech
Utilities 58 FSTUX Util
Worldwide Capital Goods 38 ISWGX WldCap
Worldwide Communications 39 ISWCX WldCom
- --------------------------------------------------------------------------------
Capital Appreciation
Growth 10 FLRFX Grwth
Dynamics 20 FIDYX Dynm
Small Company Value 74 IDSCX DivSmCo
Small Company Growth 60 FIEGX Emgrth
- --------------------------------------------------------------------------------
Growth & Income
Industrial Income 15 FIIIX IndInc
Value Equity 46 FSEQX ValEq
Multi-Asset Allocation 70 IMAAX MulAstAl
Balanced 71 IMABX Bal
Total Return 48 FSFLX TotRtn
- --------------------------------------------------------------------------------
Bond
Short-Term Bond 33 INIBX ShTrBd
Intermediate Government Bond 47 FIGBX IntGov
U.S. Government Securities 32 FBDGX USGvt
Select Income 30 FBDSX SelInc
High Yield 31 FHYPX HiYld
- --------------------------------------------------------------------------------
Tax-Exempt
Tax-Free Intermediate Bond 36 IVTIX *
Tax-Free Long-Term Bond 35 FTIFX TxFre
- --------------------------------------------------------------------------------
Money Market
U.S. Government Money Fund 44 FUGXX InvGvtMF
Cash Reserves 25 FDSXX InvCshR
Tax-Free Money Fund 40 FFRXX InvTaxFree
<PAGE>
* This fund does not meet size requirements to be assigned a newspaper listing.
For more information about any of the INVESCO Funds, including management fees
and expenses, please call us at 1-800-525-8085 for a prospectus. Read it
carefully before you invest or send money.
<PAGE>
INVESCO FUNDS
We're easy to stay in touch with:
Investor Services Representatives,
1-800-525-8085
PAL(R), your Personal Account Line,
1-800-424-8085
On the World Wide Web:
http://www.invesco.com
Denver Investor Centers:
Cherry Creek, 155-B Fillmore Street;
Denver Tech Center, 7800 E. Union Avenue,
Lobby Level
INVESCO Funds Group, Inc.,(SM)Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
This information must be preceded or
accompanied by a current prospectus.
