Semiannual Report
November 30, 1998
INVESCO
MONEY MARKET
FUNDS
Cash Reserves Fund
U.S. Government
Money Fund
Tax-Free Money Fund
INVESCO
YOU SHOULD KNOW WHAT INVESCO KNOWS.(TM)
<PAGE>
Market Overview December 1998
"It was the best of times, it was the worst of times." For many investors,
the opening of Charles Dickens' A Tale of Two Cities best describes their
investments in 1998. On the one hand, investments in many large, domestic blue
chip companies have performed well. However, for investors in emerging markets
and small-cap stocks, it has been a different story.
This has been a year that tested the skills of even the most experienced
investor, with the domestic equity markets reaching unprecedented heights in the
spring of '98, suffering a severe correction, and then rallying again. But what
really changed in 1998?
o Economy: The domestic economy continues to expand even though many
developing nations are enduring recessions. With U.S. unemployment at record low
levels and real wages accelerating, consumers have been willing to spend. It is
important to remember that consumer spending is responsible for approximately
two-thirds of Gross Domestic Product. In addition, lower interest rates on
mortgages have enticed homeowners to refinance, increasing their disposable
income.
o Interest rates: As the global financial crisis intensified during the
last year, the threat of an overheating economy diminished, and interest rates
declined significantly -- with Treasury yields reaching levels not seen since
the 1950s and 1960s. In addition, slowing global growth and a global credit
crunch caused the Federal Reserve Board to lower the Fed funds rate by 25 basis
points three times in a seven-week period in the fall of '98. This was the first
move by the Fed since it increased the Fed funds rate in the spring of '97. With
falling commodity prices and benign inflation, the implied yield on a 30-year
Treasury has decreased about 0.75% since year-end 1997.
o Corporate Earnings: The strong U.S. dollar, intense price competition
worldwide, and slowing global economies have decreased revenues for many
multinationals, squeezing corporate profits. Furthermore, increasing wages (due
to the tight labor market) are also putting pressure on profit margins, and the
growth rate in corporate earnings has slowed.
o Market Volatility: The last four years have been rewarding for
investors, as domestic equity markets produced above-average returns with
limited volatility. However, this year volatility returned to the markets;
August 1998 marked the worst month for equities since October 1987. For the
long-term investor, volatility is just part of the price of doing business when
investing in equities.
As we move into 1999, the market environment for domestic equities has
changed to an extent; yet, in many respects, it remains similar to the last four
years. Low inflation, declining interest rates, and positive domestic economic
growth lend support to the underlying fundamentals for equities. Granted, the
slowdown in many international economies may retard growth here at home, but it
appears that our economy is strong enough to weather the storm.
<PAGE>
The U.S. remains the one global economic superpower. Compared to many
international firms, domestic com-panies are highly efficient, productive, and
profitable. The strong dollar and intense price competition slowed the rate of
growth in earnings in 1998, but the earnings outlook for 1999 appears brighter,
as many international economies start to recover. In addition, equity markets
are forward-looking in nature and seem to be telling us that the worst of the
global financial crisis may be over. However, investors should continue to
expect heavy day-to-day volatility in the equity markets and remain focused on
their long-term goals.
-----------------------------------------------
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. Shares of the
funds are not issued or guaranteed by the U.S. government. If you are interested
in obtaining current yield information, please call 1-800-525-8085.
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 BA
in economics from Pacific Lutheran University. He is manager of INVESCO U.S.
Government Securities Fund and 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
assistance with First Affiliated Securities. Inge joined INVESCO's fixed-income
management group in 1985.
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENT SECURITIES
November 30, 1998
UNAUDITED
- --------------------------------------------------------------------------------------------------------------------
Effective
Interest Principal
Rate % Amount Value
%Description
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH RESERVES FUND
100.00 SHORT-TERM INVESTMENTS
5.91 US GOVERNMENT AGENCY OBLIGATIONS
Student Loan Marketing Association
1/13/1999 4.38 $ 25,000,000 $ 25,000,000
2/8/1999 4.79 12,750,000 12,750,000
- --------------------------------------------------------------------------------------------------------------------
TOTAL US GOVERNMENT AGENCY OBLIGATIONS
(Cost $37,750,000) 37,750,000
- --------------------------------------------------------------------------------------------------------------------
94.09 COMMERCIAL PAPER
10.14 AUTOMOBILES
Ford Motor Credit
12/3/1998 4.91 19,000,000 19,000,000
12/4/1998 4.97 10,798,000 10,793,587
General Motors Acceptance,
12/17/1998 5.11 35,000,000 35,000,000
- --------------------------------------------------------------------------------------------------------------------
64,793,587
- --------------------------------------------------------------------------------------------------------------------
10.15 BANKS
Norwest Corp
12/30/1998 5.13 15,000,000 14,939,124
12/31/1998 5.13 15,000,000 14,937,025
State Street
12/7/1998 5.22 20,000,000 19,982,854
12/10/1998 5.22 15,000,000 14,980,710
- --------------------------------------------------------------------------------------------------------------------
64,839,713
- --------------------------------------------------------------------------------------------------------------------
7.98 CONSUMER FINANCE
American Express Credit,
12/3/1998 4.95 21,000,000 21,000,000
Household Finance
12/3/1998 4.91 15,000,000 15,000,000
12/24/1998 5.50 15,000,000 15,000,000
- --------------------------------------------------------------------------------------------------------------------
51,000,000
- --------------------------------------------------------------------------------------------------------------------
11.11 ELECTRICAL EQUIPMENT
General Electric
12/16/1998 5.49 8,000,000 8,000,000
12/28/1998 5.17 23,000,000 23,000,000
General Electric Capital Services,
12/16/1998 5.15 40,000,000 40,000,000
- --------------------------------------------------------------------------------------------------------------------
71,000,000
- --------------------------------------------------------------------------------------------------------------------
<PAGE>
16.09 FINANCIAL
Associates Corp of North America,
12/1/1998 5.32 7,892,000 7,892,000
CIT Group Holdings,
12/23/1998 5.20 20,000,000 19,937,507
General Electric Capital,
12/21/1998 5.50 45,000,000 45,000,000
Heller Financial
12/1/1998 5.04 20,000,000 20,000,000
12/14/1998 5.36 10,000,000 10,000,000
- -------------------------------------------------------------------------------------------------------------------
102,829,507
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
Effective
Interest Principal
Rate % Amount Value
%Description
- -------------------------------------------------------------------------------------------------------------------
15.45 INSURANCE
American General, 12/15/1998 5.49 $ 20,000,000 $ 20,000,000
CIGNA Corp, 12/18/1998 5.21 26,700,000 26,700,000
Prudential Funding, 2/10/1999 5.13 17,000,000 17,000,000
SAFECO Credit
12/1/1998 5.27 25,000,000 25,000,000
12/7/1998 5.37 10,000,000 9,991,175
- -------------------------------------------------------------------------------------------------------------------
98,691,175
- -------------------------------------------------------------------------------------------------------------------
3.44 MACHINERY
Deere & Co, 2/16/1999 5.29 22,000,000 22,000,000
- -------------------------------------------------------------------------------------------------------------------
5.48 OIL & GAS RELATED
Texaco Inc, 12/29/1998 5.19 35,000,000 35,000,000
- -------------------------------------------------------------------------------------------------------------------
7.50 RETAIL
Penney (JC)Funding, 12/16/1998 5.31 28,000,000 27,938,984
Sears Roebuck Acceptance, 12/11/1998 5.30 20,000,000 20,000,000
- -------------------------------------------------------------------------------------------------------------------
47,938,984
- -------------------------------------------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------------------------------------------
6.26 SERVICES
Hertz Corp, 12/2/1998 5.17 40,000,000 40,000,000
- -------------------------------------------------------------------------------------------------------------------
0.49 TELECOMMUNICATIONS--LONG DISTANCE
Bell Atlantic Network Funding, 12/7/1998 4.98 3,100,000 3,097,466
- -------------------------------------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost $601,190,432) 601,190,432
- -------------------------------------------------------------------------------------------------------------------
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $638,940,432)(a) $ 638,940,432
===================================================================================================================
TAX-FREE MONEY FUND
100.00 SHORT-TERM MUNICIPAL INVESTMENTS
2.01 ALABAMA
Alabama Indl Dev Auth (AMBAC Insured),FR, Spl Tax,
Series 1998, 2/1/1999 3.60 $ 375,000 $ 375,218
Montgomery Edl Bldg Auth, Alabama (Faulkner Univ Proj)
(MBIA Insured), FR,Facils Rev,
Series 1998, 10/1/1999 3.60 245,000 249,272
Troy State Univ System, Alabama (MBIA Insured),
FR, Gen Student Fee Rev, Series 1998, 11/1/1999 3.55 310,000 310,259
- -------------------------------------------------------------------------------------------------------------------
934,749
- -------------------------------------------------------------------------------------------------------------------
1.03 ARIZONA
Arizona Hlth Facils Auth (Arizona Vol Hosp Fedn
Pooled Ln Prog) (FGIC Insured), AR, Mode Bonds, 1985
Series A, 10/1/2015(b)(c) 3.15 480,000 480,000
- -------------------------------------------------------------------------------------------------------------------
1.08 CALIFORNIA
Los Angeles Regl Airports Impt, California
(American Airlines/Los Angeles Intl Airport)
(LOC - Wachovia Bank), Facils Sublease FDR,
Issue 1984, Series D, 12/1/2024(b) 3.25 500,000 500,000
- -------------------------------------------------------------------------------------------------------------------
0.65 COLORADO
Adams Cnty School Dist #12, Colorado
(Adams Twelve Five Star Schools) (MBIA Insured),
FR, Conv Gen Oblig Ref, Series 1995D, 12/15/1998 3.68 300,000 300,052
- -------------------------------------------------------------------------------------------------------------------
4.30 DELAWARE
Delaware Econ Dev Auth (Delaware Clean Pwr Proj)
(LOC - CDN Imperial Bank of Commerce),
AR, IDR, Series 1997C, 8/1/2029(b) 3.33 2,000,000 2,000,000
- -------------------------------------------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------------------------------------------
Effective
Interest Principal
Rate % Amount
Value
%Description
- -------------------------------------------------------------------------------------------------------------------
1.05 DISTRICT OF COLUMBIA
District of Columbia (Washington D.C.)
(AMBAC Insured), FR, Gen Oblig,
Series 1990A, 6/1/1999 3.10 $ 480,000 $ 489,508
- -------------------------------------------------------------------------------------------------------------------
2.86 FLORIDA
Broward Cnty School Brd, Florida (AMBAC Insured),
FR, Ctfs of Participation,
Series 1997C, 7/1/1999 3.63 220,000 220,648
Miami-Dade Cnty School Dist, Florida (FSA Insured),
FR, Gen Oblig Ref School,
Series 1998, 8/1/1999 3.45 200,000 200,709
St Lucie Cnty, Florida (Savannah Hosp Proj) (LOC -
Nations Bank of Georgia), FRD, IDR,
Series 1985, 11/1/2015(b)(c) 3.35 910,000 910,000
- -------------------------------------------------------------------------------------------------------------------
1,331,357
- -------------------------------------------------------------------------------------------------------------------
8.81 GEORGIA
Atlanta, Georgia (AMBAC Insured), FR, Airport Facils
Rev Ref, Series 1996, 1/1/1999 3.80 200,000 200,227
DeKalb Cnty Hosp Auth, Georgia (DeKalb Med Ctr Proj)
(LOC - Trust Co Bank), AR, RAC,
Series 1993B, 9/1/2009(b)(c) 3.20 1,145,000 1,145,000
DeKalb Private Hosp Auth, Georgia
(Egleston Children's Hosp at Emory Univ Proj)
(LOC - Suntrust Bank), VRD, RAC,
Series 1994B, 12/1/2017(b) 3.10 500,000 500,000
Downtown Savannah Auth, Georgia (Chatham Cnty Detention
Complex & Sheriff's Dept Proj), FR,
Series 1991A, 1/1/2004(b) 3.06 300,000 306,872
Macon-Bibb Cnty Hosp Auth, Georgia (Med Ctr of Cent Georgia)
(LOC - Trust Co Bank), AR, RAC,
Series 1994, 4/1/2007(b)(c) 3.20 1,445,000 1,445,000
Savannah Econ Dev Auth, Georgia (Home Depot Proj)
(LOC - Trust Co Bank), AR, Exmp Facil Rev,
Series 1995B, 8/1/2025(b) 3.25 500,000 500,000
- -------------------------------------------------------------------------------------------------------------------
2.16 IDAHO
Idaho, FR, TAN, Series 1998, 6/30/1999 3.60 1,000,000 1,004,732
- -------------------------------------------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------------------------------------------
3.71 ILLINOIS
Illinois Dev Fin Auth (6 West Hubbard Street Proj)
(LOC - LaSalle Natl Bank), F/FR, IDR,
Series 1986, 12/1/2016(b) 3.50 875,000 875,000
Illinois Dev Fin Auth (Kindlon Partners Proj)
(LOC - LaSalle Natl Bank), VR, Indl Proj Rev,
Series 1991, 5/1/2006(b) 3.35 600,000 600,000
Oak Lawn Park Dist, Illinois (Cook Cnty), (FSA Insured),
Alternate Rev FR, Gen Oblig Ref Park, Series 1997,
12/1/1998 3.70 250,000 250,000
- -------------------------------------------------------------------------------------------------------------------
8.18 INDIANA
Daviess Cnty, Indiana (Perdue Farms/Shenandoah
Valley Farms Facil) (LOC - Nations Bank of North
Carolina), V/FRD, Econ Dev Rev, 1987 Issue,9/1/2007(b) 3.50 1,500,000 1,500,000
Indiana Muni Pwr Agency (LOC - Toronto-Dominion Bank),
VRD,Pwr Supply System Ref Rev, 1998
Series A, 1/1/2018(b) 3.10 1,000,000 1,000,000
Newton Cnty, Indiana (Intec Group Proj) (LOC -
LaSalle Natl Bank), A/FR, Econ Dev Rev,
Series 1994, 9/1/2010(b) 3.35 500,000 500,000
Princeton, Indiana (PSI Energy Proj) (LOC -
Morgan Guaranty Trust), AR, PCR Ref, 1997
Series, 4/1/2022(b) 3.30 600,000 600,000
- -------------------------------------------------------------------------------------------------------------------
Effective
Interest
Rate % Principal
Amount
Value
%Description
- -------------------------------------------------------------------------------------------------------------------
Tippecanoe Cnty School Bldg, Indiana (MBIA Insured),
FR, First Mtg, Series 1994, 1/15/1999 3.55 $ 200,000 $ 200,462
- -------------------------------------------------------------------------------------------------------------------
3,800,462
- -------------------------------------------------------------------------------------------------------------------
2.15 KANSAS
Fairway, Kansas (Nichols (J C) Co Proj) (LOC -
Prin MutualIns), FRD, Indl Rev,
Series 1984, 11/1/2014(b) 3.20 500,000 500,000
Spring Hill, Kansas (Abrasive Engr & Mfg Proj)
(LOC - LaSalle Natl Bank), VR, Indl Rev,
Series 1996, 9/1/2016(b) 3.35 500,000 500,000
- -------------------------------------------------------------------------------------------------------------------
1,000,000
- -------------------------------------------------------------------------------------------------------------------
0.21 KENTUCKY
Danville, Kentucky (Mt. Sterling, Kentucky Wtr & Swr
System Rev Ref & Impt Proj)(MBIA Insured), FR,
Multi-City Lease Rev, Series 1998-B, 6/1/1999 3.76 100,000 100,018
- -------------------------------------------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------------------------------------------
3.09 LOUISIANA
New Orleans, Louisana (AMBAC Insured),
FR, Drain System, Series 1998, 12/1/1999(d) 3.20 300,000 308,115
New Orleans, Louisana (MBIA Insured),
FR, Sewerage Svc Rev,Series 1998, 6/1/1999(d) 3.10 375,000 379,871
New Orleans, Louisana (MBIA Insured), FR, Wtr Rev,
Series 1998, 12/1/1999(d) 3.20 240,000 244,030
Rapides Parish Cons School Dist #62,
Louisiana (MBIA Insured),FR, Gen Oblig School,
Series 1989, 4/1/2000(b) 3.55 500,000 506,024
- -------------------------------------------------------------------------------------------------------------------
1,438,040
- -------------------------------------------------------------------------------------------------------------------
2.26 MARYLAND
Allegany Cnty, Maryland (AMBAC Insured), FR,
Gen Oblig Pub Impt, Series 1998, 8/1/1999 3.50 525,000 527,972
Maryland Hlth & Higher Edl Facils Auth, FR,
Rev, Mercy Med Ctr Issue, Series 1989, 7/1/2020(b) 3.20 250,000 261,776
Montgomery Cnty, Maryland, (Manufacturers Hanover
Trust), FR, Gen Oblig Cons Pub Impt, 1989
Series B, 11/1/2002(b) 3.10 250,000 263,148
- -------------------------------------------------------------------------------------------------------------------
1,052,896
- -------------------------------------------------------------------------------------------------------------------
0.39 MASSACHUSETTS
Boston, Massachusetts (AMBAC Insured), FR,
Gen Oblig, 1990 Series A, 2/1/1999 3.65 180,000 180,944
- -------------------------------------------------------------------------------------------------------------------
0.66 MICHIGAN
Lincoln Cons School Dist, Michigan (Washtenaw &
Wayne Cntys) (FSA Insured), FR, Gen Oblig-Unltd
Tax Ref, Series 1998, 5/1/1999 3.60 305,000 305,000
- -------------------------------------------------------------------------------------------------------------------
3.76 MISSOURI
Columbia, Missouri (LOC - Toronto-Dominion Bank),
VR, Spl Oblig Insured Reserve,
Series 1988A, 6/1/2008(b) 3.30 1,750,000 1,750,000
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
2.15 MONTANA
Billings, Montana (CFS Continental Proj) (LOC -
Toronto-Dominion Bank), IDR, ATS,
Series 1984, 12/1/2014(b) 3.10 1,000,000 1,000,000
- -------------------------------------------------------------------------------------------------------------------
0.87 NEBRASKA
Hamilton Cnty, Nebraska (Iams Co Proj)
(LOC - NationsBank), VR, IDR Ref,
Series 1990, 7/1/2005(b) 3.25 405,000 405,000
- -------------------------------------------------------------------------------------------------------------------
1.89 NEVADA
Clark Cnty, Nevada (LOC - Toronto-Dominion Bank),
AR, Airport System Sub Lien Rev,
Series 1995A-2, 7/1/2025(b) 3.25 880,000 880,000
- -------------------------------------------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------------------------------------------
Effective
Interest
Rate % Principal
Amount
%Description Value
- -------------------------------------------------------------------------------------------------------------------
2.66 NEW JERSEY
Delran Township, New Jersey (Burlington Cnty),
(MBIA Insured), FR, Gen Oblig,
Series 1998, 6/1/1999 3.70 $ 220,000 $ 220,917
New Jersey Hwy Auth (Garden State Pkwy), FR,
Sr Pkwy Rev, 1989 Series,
1/1/2009(b) 3.60 200,000 204,576
1/1/2016(b) 3.60 260,000 265,949
Passaic, New Jersey (FSA Insured), FR, Gen Impt,
Series 1998, 7/15/1999 3.65 540,000 543,764
- -------------------------------------------------------------------------------------------------------------------
1,235,206
- -------------------------------------------------------------------------------------------------------------------
1.08 NEW MEXICO
New Mexico Hwy Commn (FSA Insured), AR,
Sub Lien Tax Hwy Rev, Series 1996, 6/15/2011(b) 3.15 500,000 500,000
- -------------------------------------------------------------------------------------------------------------------
6.53 NEW YORK
Battery Park City Auth, New York, FR, Rev,
Series 1990, 5/1/2020(b) 3.20 500,000 506,745
Marion Cent School Dist, New York (Wayne Cnty)
(FSA Insured), FR, Gen Oblig,
Series 1998, 6/15/1999 3.21 175,000 175,547
Monroe Cnty Indl Dev Agency, New York
(Ron Ink Proj) (LOC - LaSalle Natl Bank),
VR, IDR, Series 1996, 7/1/2013(b) 3.63 1,500,000 1,500,000
New York, New York (FGIC Insured), FR, Gen Oblig,
Fiscal 1990 Series H, 8/1/1999 3.43 200,000 204,652
New York Dorm Auth, FR, State Univ Edl
Facils Rev, Series 1989A, 5/15/2017(b) 3.20 300,000 311,187
Salmon River Cent School Dist, New York
(Franklin & St. Lawrence Cntys)
(AMBAC Insured), FR, Gen Oblig,
Series 1998, 6/15/1999 3.50 338,000 339,369
- -------------------------------------------------------------------------------------------------------------------
3,037,500
- -------------------------------------------------------------------------------------------------------------------
2.80 NORTH CAROLINA
North Carolina Edl Facils Fin Agency
(Bowman Gray School of Medicine Proj),
(LOC - Wachovia Bank & Trust), VR, Rev,
Series 1990, 9/1/2020(b)(c) 3.15 500,000 500,000
North Carolina Med Care Commn (Pooled Fing Proj)
(LOC - First Union Natl Bank of North Carolina),
Hosp Rev, ACES, Series 1991B, 10/1/2013(b) 3.30 800,000 800,000
- -------------------------------------------------------------------------------------------------------------------
1,300,000
- -------------------------------------------------------------------------------------------------------------------
0.55 OHIO
Cleveland City School Dist Ed Brd, Ohio
(AMBAC Insured), FR, School Impt, Gen Oblig
Unltd Tax, Series 1989, 12/1/2008(b) 3.75 250,000 255,000
- -------------------------------------------------------------------------------------------------------------------
<PAGE>
3.66 PENNSYLVANIA
Delaware Valley Regl Fin Auth, Pennsylvania
(Bucks, Chester, Delaware & Montgomery Cntys)
(LOC - Credit Suisse 1st Boston Securities), AR,
Loc Govt Rev, Series 1985D, 12/1/2020(b) 3.05 700,000 700,000
Emmaus Gen Auth, Pennsylvania (Pennsylvania VR Ln Prog),
(FSA Insured), VRD, Series 1996, 12/1/2028(b) 3.15 1,000,000 1,000,000
- -------------------------------------------------------------------------------------------------------------------
1,700,000
- -------------------------------------------------------------------------------------------------------------------
1.08 SOUTH CAROLINA
Anderson Cnty, South Carolina (Belton Inds Proj) (LOC -
Nations Bank of North Carolina), AR, Indl Rev,
Series 1991A, 7/1/2004(b) 3.35 500,000 500,000
- -------------------------------------------------------------------------------------------------------------------
5.86 TENNESSEE
Decatur Cnty, Tennessee (FGIC Insured), FR, School,
Series 1998, 6/1/1999 3.80 330,000 330,808
Greeneville Hlth & Edl Facils Brd,
Tennessee (Laughlin Mem Hosp Proj) (LOC -
NationsBank of Tennessee), VRD, Rev,
Series 1992, 10/1/2014(b) 3.20 800,000 800,000
- -------------------------------------------------------------------------------------------------------------------
Effective
Interest Principal
Rate % Amount Value
%Description
- -------------------------------------------------------------------------------------------------------------------
Johnson City Hlth & Edl Facils Brd, Tennessee
(Johnson City Med Ctr Hosp)(MBIA Insured), AR,
Adj Tender Acquisition,
Series 1998A, 11/1/1999 3.15 $ 1,000,000 $ 1,000,000
Macon Cnty, Tennessee (FGIC Insured), FR,
School Ref, Series 1998, 4/1/1999 3.69 240,000 240,000
Monroe Cnty, Tennessee (FSA Insured), FR,
Rural School Ref, Series 1998, 6/1/1999 3.66 150,000 150,986
Nashville Metro Govt, Tennessee (Davidson Cnty),
(FGIC Insured), FR, Wtr & Swr Rev Ref,
Series 1993, 1/1/1999 3.30 200,000 200,156
- -------------------------------------------------------------------------------------------------------------------
2,721,950
- -------------------------------------------------------------------------------------------------------------------
15.45 TEXAS
Alvarado Indpt School Dist, Texas
(Johnson Cnty) (Permanent School Fund
Guarantee Prog), FR, Unltd Tax School Bldg & Ref,
Series 1994, 2/15/1999 3.10 250,000 251,200
Aransas Pass, Texas (San Patricio, Aransas &
Nueces Cntys) (FGIC Insured), FR, Gen Oblig Ref,
Series 1998, 2/1/1999 3.90 190,000 190,000
Beeville Indpt School Dist, Texas (Bee Cnty)
(Permanent School Fund Guarantee Prog), FR,
Unltd Tax Ref, Series 1998, 2/15/1999 3.74 175,000 175,000
Colorado River Muni Wtr Dist, Texas
(Wtr Transmission Facils Proj) (AMBAC Insured),
FR, Wtr System Rev, Series 1991-A, 1/1/1999 3.78 760,000 762,895
Crowley, Texas (Tarrant Cnty) (AMBAC Insured),
FR, Gen Oblig & Ref, Series 1998, 3/1/1999 3.88 170,000 170,000
Cypress-Fairbanks Indpt School Dist, Texas
(Harris Cnty)(Permanent School Fund
Guarantee Prog), FR, Unltd Tax Ref,
Series 1996, 2/1/1999 3.65 300,000 300,641
<PAGE>
Gainesville, Texas (Cooke Cnty)
(AMBAC Insured), FR, Combination Tax & Wtrwks
& Swr System Rev, Ctfs of Oblig,
Series 1998, 2/15/1999 3.84 215,000 215,000
Goose Creek Cons Indpt School Dist,
Texas (Harris & Chambers Cntys)
(Permanent School Fund Guarantee Prog), FR,
Unltd Tax Ref, Series 1998, 2/15/1999 3.48 145,000 145,150
Grapevine Indl Dev, Texas (American Airlines
Proj) (LOC - Morgan Guaranty Trust), VR,
Multiple Mode Rev, 1984
Series B-3, 12/1/2024(b) 3.25 400,000 400,000
Greenville, Texas (Hunt Cnty) (FSA Insured),
FR, Wtrwks & Swr Rev Ref,
Series 1997, 2/15/1999 3.45 400,000 400,616
Harris Cnty Muni Util Dist #24, Texas
(AMBAC Insured), FR, Wtrwks & Swr
System Combination Unltd Tax & Rev Ref,
Series 1998, 3/1/1999 3.90 105,000 105,000
Harris Cnty Muni Util Dist #136, Texas
(FSA Insured), FR, Wtrwks & Swr System
Combination Unltd Tax & Rev Ref,
Series 1998, 3/1/1999 3.30 135,000 135,223
Lone Star Airport Impt Auth, Texas
(American Airlines Proj) (LOC - Royal Bank
of Canada), V/FRD, Multiple Mode Rev, 1984
Series A-5, 12/1/2014(b) 3.25 100,000 100,000
Longview, Texas (Gregg & Harrison Cntys)
(FGIC Insured), FR, Wtrwks & Swr
System Rev, Series 1998C, 3/1/1999 3.00 700,000 705,128
Magnolia Indpt School Dist, Texas
(Montgomery Cnty) (Permanent School Fund
Guarantee Prog), FR, Unltd Tax School Bldg,
Series 1995, 8/15/1999 3.20 100,000 103,315
Mesquite, Texas (Dallas Cnty) (FSA Insured),
FR, Combination Tax & Rev Ctfs
of Oblig, Series 1998, 2/15/1999 3.74 115,000 115,367
Mesquite, Texas (Dallas Cnty) (FSA Insured),
FR, Pub Ppty Fin Contractual Oblig,
Series 1998, 2/15/1999 3.74 210,000 210,000
North Richland Hills, Texas (Tarrant Cnty)
(FSA Insured), FR, Gen Oblig,
Series 1998, 2/15/1999 4.17 150,000 150,366
North Richland Hills, Texas (Tarrant Cnty)
(FSA Insured), FR, Tax & Wtrwks &
Swr System Rev, Ctfs of Oblig,
Series 1998, 2/15/1999 4.02 190,000 190,381
Nueces River Auth, Texas (Reynolds Metals Proj)
(LOC - Bank of Nova Scotia),
DATES, PCR Ref, Series 1985, 12/1/1999(b) 3.30 400,000 400,000
<PAGE>
- -------------------------------------------------------------------------------------------------------------------
Effective
Interest Principal
Rate % Amount
Value
%Description
- -------------------------------------------------------------------------------------------------------------------
Plano Indpt School Dist, Texas (Collin Cnty)
(Permanent School Fund Guarantee Prog), VR,
Unltd Tax School Bldg,
Series 1997, 8/15/2017(b) 2.86 $ 1,000,000 $ 1,000,000
San Patricio Cnty Muni Wtr Dist, Texas
(FSA Insured), FR, Wtr Rev,
Series 1998, 7/10/1999(d) 3.12 150,000 152,997
Spring Indpt School Dist, Texas
(Harris Cnty) (Permanent School Fund
Guarantee Prog), FR, Unltd Tax Schoolhouse & Ref,
Series 1998, 2/15/1999 3.80 275,000 275,000
Stafford, Texas (Fort Bend & Harris Cntys)
(FGIC Insured), FR, Perm Impt,
Series 1998, 9/1/1999(d) 3.16 300,000 303,243
Trinity River Auth, Texas (AMBAC Insured),
FR, Regl Wastewtr System Rev,
Series 1995, 8/1/1999 3.10 225,000 227,790
- -------------------------------------------------------------------------------------------------------------------
7,184,312
- -------------------------------------------------------------------------------------------------------------------
0.65 UTAH
Tremonton City, Utah (Box Elder Cnty),
(La-Z-Boy Chair Proj), (LOC - NBD Bank),
VRD, IDR, Series 1990, 6/1/2000(b) 3.88 300,000 300,000
- -------------------------------------------------------------------------------------------------------------------
1.90 WASHINGTON
Spokane Cnty, Washington (MBIA Insured),
FR, Swr Rev & Ref,
Series 1994A, 12/1/1998 3.60 155,000 155,000
Washington, FR, Gen Oblig & Gen
Oblig Ref, Series 1992A & AT-6, 2/1/1999 3.75 500,000 501,228
Washington Pub Pwr Supply System,
(Nuclear Proj #1), FR, Ref Rev,
Series 1989A, 7/1/2015(b) 1.72 220,000 227,343
- -------------------------------------------------------------------------------------------------------------------
883,571
- -------------------------------------------------------------------------------------------------------------------
1.09 WEST VIRGINIA
West Virginia School Bldg Auth, (MBIA Insured),
FR, Cap Impt Rev, Series 1994, 7/1/1999 3.65 500,000 504,554
- -------------------------------------------------------------------------------------------------------------------
1.05 WISCONSIN
Fort Atkinson School Dist, Wisconsin
(Jefferson & Rock Cntys)(FGIC Insured),
FR, Gen Oblig Ref, Series 1996, 4/1/1999 3.40 230,000 232,038
Wisconsin, (First National Bank), FR, Gen Oblig,
1990 Series G, 5/1/2001(b) 3.31 250,000 255,628
- -------------------------------------------------------------------------------------------------------------------
487,666
- -------------------------------------------------------------------------------------------------------------------
2.37 WYOMING
Lincoln Cnty, Wyoming (Exxon Proj), AR, PCR,
Series 1984B, 11/1/2014(b) 3.25 100,000 100,000
Series 1984D, 11/1/2014(b) 3.25 1,000,000 1,000,000
- -------------------------------------------------------------------------------------------------------------------
1,000,000
- -------------------------------------------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------------------------------------------
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $46,484,616)(a) $ 46,484,616
===================================================================================================================
U.S. GOVERNMENT MONEY FUND
100.00 SHORT-TERM INVESTMENTS
75.85 US GOVERNMENT AGENCY OBLIGATIONS
Fannie Mae
12/15/1998 4.88 $ 15,000,000 $ 14,971,588
2/16/1999 5.13 10,000,000 9,891,329
Federal Home Loan Bank, 12/23/1998 4.76 10,000,000 9,970,818
- -------------------------------------------------------------------------------------------------------------------
Effective
Interest Principal
Rate % Amount Value
%Description
- -------------------------------------------------------------------------------------------------------------------
Freddie Mac, 12/29/1998 4.82 $ 25,000,000 $ 24,906,024
Student Loan Marketing Association, 1/13/1999 4.38 5,000,000 5,000,000
- -------------------------------------------------------------------------------------------------------------------
TOTAL US GOVERNMENT AGENCY OBLIGATIONS
(Cost $64,739,759) 64,739,759
- -------------------------------------------------------------------------------------------------------------------
24.15 REPURCHASE AGREEMENTS
Repurchase Agreement with State Street
dated 11/30/1998 due 12/1/1998 at
5.100%, repurchased at $20,612,920
(Collateralized by US Treasury Bonds due
4/15/2028 at 3.625%, value $21,175,745)
(Cost $20,610,000) $ 20,610,000 $ 20,610,000
- -------------------------------------------------------------------------------------------------------------------
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $85,349,759)(a) $ 85,349,759
===================================================================================================================
The following abbreviations may be used in portfolio descriptions:
AFR(e) -- Adjustable/Fixed Rate GNMA -- Government National Mortgage Association
ACES(e) -- Adjustable Convertible Extendable IDR -- Industrial Development Revenue
Securities LOC -- Letter of Credit
AMBAC -- American Municipal Bond MBIA -- Municipal Bond Investors Assurance
Assurance Corporation Corporation
AR(e) -- Adjustable Rate PCR -- Pollution Control Revenue
ATS(e) -- Adjustable Tender Securities RAC -- Revenue Anticipation Certificates
BIG -- Bond Investors Guaranty Insurance TAN -- Tax Anticipation Notes
DATES(e) -- Daily Adjustable Tax-Exempt Securities TEAMS(e) -- Tax-Exempt Adjustable Mode Securities
FDR(e) -- Flexible Demand Revenue TECP -- Tax-Exempt Commercial Paper
FGIC -- Flexible Guaranty Insurance
Company TRAN -- Tax & Revenue Anticipation Notes
FNMA -- Federal National Mortgage Association UPDATES(e)-- Unit Price Demand Tax-Exempt
Securities
F/FR -- Floating Fixed Rate V/FRD(e) -- Variable/Fixed Rate Demand
FR -- Fixed Rate VR(e) -- Variable/Fixed Rate
FRD(e) -- Fixed Rate Demand VRD(e) -- Variable Rate Demand
FSA -- Financial Security Assurance
</TABLE>
<PAGE>
(a) Also represents cost for income tax purposes.
(b) 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 of less. Rate shown reflects current rate.
(c) Security has been designated as collateral for when-issued
(W/I) securities.
(d) Security is a when-issued (W/I) security.
(e) Rate is subject to change. Rate shown reflects current rate.
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1998
UNAUDITED
CASH TAX-FREE U.S. GOVERNMENT
RESERVES MONEY MONEY
FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Securities:
At Cost(a) $ 638,940,432 $ 46,484,616 $ 85,349,759
========================================================================================================================
At Value(a) $ 638,940,432 $ 46,484,616 $ 85,349,759
Cash 1,468,247 58,950 64,593
Receivables:
Fund Shares Sold 126,968,665 3,277,750 17,104,199
Interest 2,535,831 392,590 32,183
Prepaid Expenses and Other Assets 137,731 91,299 123,538
- ------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 770,050,906 50,305,205 102,674,272
- ------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payables:
Distributions to Shareholders 32,526 5,249 9,762
Investment Securities Purchased 0 1,393,867 0
Fund Shares Repurchased 7,014,074 309,524 1,594,828
Accrued Expenses and Other Payables 570,723 37,751 76,559
- ------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 7,617,323 1,746,391 1,681,149
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS AT VALUE(b) $ 762,433,583 $ 48,558,814 $ 100,993,123
========================================================================================================================
Shares Outstanding 762,433,583 48,558,814 100,993,123
NET ASSET VALUE,
Offering and Redemption
Price per Share $ 1.00 $ 1.00 $ 1.00
========================================================================================================================
(a) Investment securities at cost and value at November 30, 1998
include a repurchase agreement of $20,610,000 for U.S. Government Money
Fund.
(b) The Fund has ten billion authorized shares of common stock, par value of
$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
$762,433,583, $48,558,814 and $100,993,123, respectively.
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Six Months Ended November 30, 1998
UNAUDITED
CASH TAX-FREE U.S. GOVERNMENT
RESERVES MONEY MONEY
FUND FUND FUND
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
INTEREST INCOME $ 21,483,326 $ 878,698 $ 2,372,059
- -------------------------------------------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees 1,571,177 125,907 220,242
Transfer Agent Fees 1,540,205 71,312 175,635
Administrative Fees 63,504 8,777 11,607
Custodian Fees and Expenses 76,770 8,092 8,491
Directors' Fees and Expenses 19,305 5,367 5,981
Professional Fees and Expenses 25,105 11,284 7,978
Registration Fees and Expenses 74,879 12,785 29,064
Reports to Shareholders 98,168 5,789 9,270
Other Expenses 9,450 3,537 1,226
- -------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 3,478,563 252,850 469,494
Fees and Expenses Absorbed by
Investment Adviser 0 (62,297) (91,407)
Fees and Expenses Paid Indirectly (9,979) (1,570) (2,363)
- -------------------------------------------------------------------------------------------------------------------
NET EXPENSES 3,468,584 188,983 375,724
- -------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME AND NET INCREASE
IN NET ASSETS FROM OPERATIONS $ 18,014,742 $ 689,715 $ 1,996,335
===================================================================================================================
See Notes to Financial Statements
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CASH RESERVES TAX-FREE MONEY
FUND FUND
Six Months Year Six Months Year
Ended Ended Ended Ended
November 30 May 31 November 30 May 31
- ----------------------------------------------------------------------------------------------------------
1998 1998 1998 1998
UNAUDITED UNAUDITED
<S> <C> <C> <C> <C>
OPERATIONS AND DISTRIBUTIONS
TO SHAREHOLDERS
Net Investment Income Earned
and Distributed to Shareholders $ 18,014,742 $ 31,564,559 $ 689,715 $ 1,436,671
==========================================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares $3,295,324,450 $ 5,919,135,596 $116,360,228 $ 243,725,325
Reinvestment of Distributions 15,843,346 28,060,789 613,942 1,317,326
- ----------------------------------------------------------------------------------------------------------
3,311,167,796 5,947,196,385 116,974,170 245,042,651
Amounts Paid for Repurchases
of Shares (3,315,404,382) (5,842,174,016) (123,216,480) (237,818,652)
- ----------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM FUND SHARE TRANSACTIONS (4,236,586) 105,022,369 (6,242,310) 7,223,999
NET ASSETS
Beginning of Period 766,670,169 661,647,800 54,801,124 47,577,125
- ----------------------------------------------------------------------------------------------------------
End of Period $ 762,433,583 $ 766,670,169 $ 48,558,814 $ 54,801,124
==========================================================================================================
-------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 3,295,324,450 5,919,135,596 116,360,228 243,725,325
Shares Issued from
Reinvestment of Distributions 15,843,346 28,060,789 613,942 1,317,326
- ----------------------------------------------------------------------------------------------------------
3,311,167,796 5,947,196,385 116,974,170 245,042,651
Shares Repurchased (3,315,404,382) (5,842,174,016) (123,216,480) (237,818,652)
- ----------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE)
IN FUND SHARES (4,236,586) 105,022,369 (6,242,310) 7,223,999
==========================================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
U.S.GOVERNMENT
MONEY FUND
Six Months Year
Ended Ended
November 30 May 31
- ---------------------------------------------------------------------------------------------------------
1998 1998
UNAUDITED
OPERATIONS AND DISTRIBUTIONS
TO SHAREHOLDERS
Net Investment Income Earned and Distributed to Shareholders $ 1,996,335 $ 3,486,745
=========================================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares $ 491,240,002 $1,190,183,900
Reinvestment of Distributions 1,679,242 2,868,947
- ---------------------------------------------------------------------------------------------------------
492,919,244 1,193,052,847
Amounts Paid for Repurchases of Shares (465,844,404) (1,185,586,043)
- ---------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
FROM FUND SHARE TRANSACTIONS 27,074,840 7,466,804
NET ASSETS
Beginning of Period 73,918,283 66,451,479
- ---------------------------------------------------------------------------------------------------------
End of Period $ 100,993,123 $ 73,918,283
=========================================================================================================
FUND SHARE TRANSACTIONS
Shares Sold 491,240,002 1,190,183,900
Shares Issued from Reinvestment of Distributions 1,679,242 2,868,947
- ---------------------------------------------------------------------------------------------------------
492,919,244 1,193,052,847
Shares Repurchased (465,844,404) (1,185,586,043)
- ---------------------------------------------------------------------------------------------------------
NET INCREASE IN FUND SHARES 27,074,840 7,466,804
=========================================================================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO Money
Market Funds, Inc. (the "Fund") is 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 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 under procedures established by the Fund's board of directors
B. REPURCHASE AGREEMENTS -- Repurchase agreements held by the Fund are fully
collateralized by U.S. Government securities and such collateral is in the
possession of the Fund's custodian. The collateral is evaluated daily to
ensure its market value exceeds the current market value of the repurchase
agreements including accrued interest. In the event of default on the
obligation to repurchase, the Fund has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. In the
event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral or proceeds may be subject
to legal proceedings.
C. WHEN-ISSUED SECURITIES -- When-issued securities held by the Fund are fully
collateralized by other securities which are notated in the Statement of
Investment Securities. Such collateral is in the possession of the Fund's
custodian. The collateral is evaluated daily to ensure its market value
equals or exceeds the current market value of the when-issued securities.
D. 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.
<PAGE>
E. 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.
F. 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.
G. 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 each Fund's investment adviser. As compensation for its
services to each Fund, IFG receives an investment advisory fee which is accrued
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.
IFG receives a transfer agent fee from each Fund 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.
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 has voluntarily agreed, in some instances, to absorb certain fees and
expenses incurred by Tax-Free Money and U.S. Government Money Funds.
NOTE 3 -- TRANSACTIONS WITH AFFILIATES. Certain of each Fund's officers and
directors are also officers and directors of IFG.
Each Fund has adopted an unfunded defined benefit 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 were based on an annual rate equal to 40% of the retainer fee at
the time of retirement. As of July 1, 1998, benefits are based on an annual rate
of 50% of the sum of the retainer fee at the time of retirement plus the annual
meeting fee.
<PAGE>
The independent directors have contributed to a deferred compensation plan,
pursuant to which they have deferred receipt of a portion of the compensation
which they would otherwise have been paid as directors of selected INVESCO
Funds. The deferred amounts are being invested in the shares of all of the
INVESCO and Treasurer's Series Trust Funds.
Pension expenses for the six months ended November 30, 1998, 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 $ 4,177 $ 23,873 $ 69,375
Tax-Free Money Fund 297 2,538 6,614
U.S. Government Money Fund 434 2,459 7,484
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS -- CASH RESERVES FUND
(For a Fund Share Outstanding Throughout Each Period)
Six Months
Ended
November 30 Year Ended May 31
- -----------------------------------------------------------------------------------------------------------
1998 1998 1997 1996 1995 1994
UNAUDITED
<S> <C> <C> <C> <C> <C> <C> <C>
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 0.02 0.05 0.05 0.05 0.05 0.03
- -----------------------------------------------------------------------------------------------------------
Net Asset Value -- End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===========================================================================================================
TOTAL RETURN 2.34%(a) 4.82% 4.69% 5.01% 4.76% 2.58%
RATIOS
Net Assets -- End of Period
($000 Omitted) $762,434 $766,670 $ 661,648 $ 587,277 $ 644,341 $747,551
Ratio of Expenses to Average
Net Assets(b) 0.45%(a)(c) 0.91%(c) 4.86%(c) 0.87%(c) 0.75% 0.81%
Ratio of Net Investment Income
to Average Net Assets(b) 2.32%(a) 4.76% 4.62% 4.86% 4.65% 2.61%
<PAGE>
(a) Based on operations for the period shown and, accordingly,
are not representative of a full year.
(b) Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended May 31, 1998, 1997, 1996 and 1995. If such expenses had not been
voluntarily absorbed, ratio of expenses to average net assets would have
been 0.93%, 0.92%, 0.92% and 0.85%, respectively, and ratio of net
investment income to average net assets would have been 4.74%, 4.56%, 4.81%
and 4.55%, respectively.
(c) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by the
Investment Adviser, if applicable, which is before any expense offset
arrangements.
FINANCIAL HIGHLIGHTS (CONTINUED) -- TAX-FREE MONEY FUND
(For a Fund Share Outstanding Throughout Each Period)
Six Months
Ended
November 30 Year Ended May 31
- ------------------------------------------------------------------------------------------------------------
1998 1998 1997 1996 1995 1994
UNAUDITED
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 0.01 0.03 0.03 0.03 0.03 0.02
============================================================================================================
Net Asset Value -- End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============================================================================================================
TOTAL RETURN 1.38%(a) 3.03% 2.90% 3.08% 2.86% 1.84%
RATIOS
Net Assets -- End of Period
($000 Omitted) $ 48,559 $ 54,801 $ 47,577 $ 51,649 $ 58,780 $ 84,521
Ratio of Expenses to
Average Net Assets(b) 0.38%(a)(c) 0.76%(c) 0.76%(c) 0.77%(c) 0.75% 0.75%
Ratio of Net Investment Income
to Average Net Assets(b) 1.37%(a) 3.01% 2.86% 3.03% 2.77% 1.83%
(a) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(b) Various expenses of the Fund were voluntarily absorbed by IFG for the
six months ended November 30, 1998 and for the years ended May 31, 1998,
1997, 1996, 1995 and 1994. If such expenses had not been voluntarily
absorbed, ratio of expenses to average net assets would have been 0.50%
(not annualized), 1.06%, 1.01%, 1.05%, 1.00% and 1.00%, respectively, and
ratio of net investment income to average net assets would have been 1.25%
(not annualized), 2.71%, 2.61%, 2.75%, 2.52% and 1.58%, respectively.
(c) Ratio is based on Total Expenses of the Fund, less Expenses
Absorbed by Investment Adviser, which is before any expense
offset arrangements.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED) -- U.S. GOVERNMENT MONEY FUND
(For a Fund Share Outstanding Throughout Each Period)
Six Months
Ended
November 30 Year Ended May 31
- ----------------------------------------------------------------------------------------------------------
1998 1998 1997 1996 1995 1994
UNAUDITED
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 0.02 0.05 0.04 0.05 0.05 0.03
- ----------------------------------------------------------------------------------------------------------
Net Asset Value --
End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
==========================================================================================================
TOTAL RETURN 2.30%(a) 4.74% 4.57% 4.90% 4.66% 2.56%
RATIOS
Net Assets -- End of Period
($000 Omitted) $ 100,993 $ 73,918 $ 66,451 $ 79,392 $60,843 $ 73,912
Ratio of Expenses to
Average Net Assets(b) 0.43%(a)(c) 0.87%(c) 0.86%(c) 0.87%(c) 0.75% 0.75%
Ratio of Net Investment Income
to Average Net Assets(b) 2.27%(a) 4.72% 4.51% 4.78% 4.55% 2.60%
(a) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(b) Various expenses of the Fund were voluntarily absorbed by IFG for the six
months ended November 30, 1998 and for the years ended May 31, 1998, 1997,
1996, 1995 and 1994. If such expenses had not been voluntarily absorbed,
ratio of expenses to average net assets would have been 0.53% (not
annualized), 1.12%, 1.06%, 1.05%, 1.10% and 1.00%, respectively, and ratio
of net investment income to average net assets would have been 2.17% (not
annualized), 4.47%, 4.31%, 4.59%, 4.20% and 2.35%, respectively.
(c) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by the
Investment Adviser, which is before any expense offset arrangements.
</TABLE>
--------------------------------------------
OTHER INFORMATION
UNAUDITED
Year 2000 Computer Issue. Many computer systems in use today may not be
able to recognize any date after December 31, 1999. If these systems are not
fixed by that date, it is possible that they could generate erroneous
information or fail altogether. INVESCO has committed substantial resources in
an effort to make sure that its own major computer systems will continue to
function on and after January 1, 2000. Of course, INVESCO cannot fix systems
that are beyond its control. If INVESCO's own system, or the systems of third
parties upon which it relies, do not perform properly after December 31, 1999,
the Funds could be adversely affected.
In addition, the markets for, or values of, securities in which the Funds
invest may possibly be hurt by computer failures affecting portfolio investments
or trading of securities beginning January 1, 2000. For example, improperly
functioning computer systems could result in securities trade settlement
problems and liquidity issues, production issues for individual companies and
overall economic uncertainties. Individual issuers may incur increased costs in
making their own systems Year 2000 compliant. The combination of market
uncertainty and increased costs means that there is a possibility that Year 2000
computer issues may adversely affect the Funds' investments.
<PAGE>
FAMILY OF FUNDS
Newspaper
Fund Name Fund Code Ticker Symbol Abbreviation
- --------------------------------------------------------------------------------
International
International Blue Chip 09 IIBCX ItlBlChp
International Growth 49 FSIGX IntlGr
Emerging Markets 43 * *
Asian Growth 41 IVAGX AsianGr
Pacific Basin 54 FPBSX PcBas
European 56 FEURX Europ
European Small Company 37 IVECX EuroSmCo
Latin American Growth 34 IVSLX LatinAmGr
- -------------------------------------------------------------------
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 -- Class II 55 FTCHX Tech
Utilities 58 FSTUX Util
Worldwide Capital Goods 38 ISWGX WldCap
Worldwide Communications 39 ISWCX WldCom
- -------------------------------------------------------------------
Stock
Growth & Income 21 IVGIX GrotInc
Blue Chip Growth 10 FLRFX Grwth
Dynamics 20 FIDYX Dynm
Small Company Growth 60 FIEGX SmCoGth
INVESCO Endeavor 61 IVENX Endeavor
Value Equity 46 FSEQX ValEq
Small Company Value 74 IDSCX SmCoVal
S&P 500 Index Fund Class II 23 ISPIX SP500II
- -------------------------------------------------------------------
Combination Stock & Bond
Industrial Income 15 FIIIX IndInc
Multi-Asset Allocation 70 IMAAX MulAstAl
Total Return 48 FSFLX TotRtn
Balanced 71 IMABX Bal
- -------------------------------------------------------------------
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-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
* This fund does not meet size requirements to be assigned a newspaper listing
and/or ticker symbol.
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
INVESCO Distributors, Inc.,(SM)
Distributor
Post Office Box 173706
Denver, CO 80217-3706
1-800-525-8085
PAL(R): 1-800-424-8085
http://www.invesco.com
In Denver, visit one of our
convenient Investor Centers:
Cherry Creek,
155-B Fillmore Street
Denver Tech Center,
7800 East Union Avenue,
Lobby Level
This information must be preceded
or accompanied by a current prospectus.
