INVESCO MONEY MARKET FUNDS, INC.
INVESCO U.S. Government Money Fund
INVESCO Cash Reserves Fund
INVESCO Tax-Free Money Fund
Supplement to Prospectus Dated October 1, 1998
Effective May 13, 1999, the section of the Funds' Prospectus entitled "Annual
Fund Expenses" is amended to (1) delete the third paragraph and (2) substitute
the following in its place:
We calculate annual operating expenses as a percentage of each Fund's
average annual net assets. To keep expenses competitive, INVESCO
reimburses the Tax-Free Money Fund for certain expenses in excess of 0.85%
of the Fund's average net assets effective May 13, 1999 and 0.75% of the
Fund's average net assets prior to May 13, 1999, the U.S. Government Money
Fund for certain expenses in excess of 0.85% of the Fund's average net
assets and the Cash Reserves Fund for certain expenses in excess of 0.90%
of the Fund's average net assets. All expense caps include excess amounts
that have been offset by the expense offset arrangement described below.
Effective May 13, 1999, the section of the Funds' Prospectus entitled "Annual
Fund Expenses" is amended to (1) delete only the Tax-Free Money Fund section of
the Annual Fund Operating Expenses table and footnote 2 to the table and (2)
substitute the following in their place:
TAX-FREE MONEY FUND
Management Fee 0.50%
12b-1 Fees None
Other Expenses1,2 0.36%
Total Fund Operating Expenses1,2 0.86%
2. Certain expenses of the Funds are absorbed by INVESCO. In the absence
of such absorbed expenses, the U.S. Government Money Fund's "Other
Expenses" and "Total Fund Operating Expenses" would have been 0.65%
and 1.15%, respectively; the Cash Reserves Fund's "Other Expenses"
and "Total Fund Operating Expenses" would have been 0.54% and 0.96%,
respectively; and the Tax-Free Money Fund's "Other Expenses" and
"Total Fund Operating Expenses" would have been 0.60% and 1.10%,
respectively, based on each Fund's actual expenses for the fiscal
year ended May 31, 1998.
The remainder of the table and the footnote 1 are not affected by this change.
Effective May 13, 1999, the section of the Funds' Prospectus entitled "Annual
Fund Expenses - Example" is amended to (1) delete the first paragraph and (2)
substitute the following in its place:
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming a hypothetical 5% annual return and redemption
at the end of each time period. (Of course, actual operating expenses are
paid from each Fund's assets and are deducted from the amount of income
available for distribution to shareholders; they are not charged directly
to shareholder accounts.)
1 Year 3 Years 5 Years 10 Years
U.S. Government
Money $9 $28 $48 $108
Cash Reserves $9 $29 $51 $112
Tax-Free Money $9 $28 $48 $106
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Effective June 1, 1999, the section of the Funds' Prospectus entitled
"Investment Policies And Risks - Investment Restrictions" is amended to (1)
delete the entire section, and (2) substitute the following section in its
place:
INVESTMENT RESTRICTIONS.
The Funds are subject to a variety of restrictions regarding their
investments that are identified in the Statement of Additional
Information. Certain of the Funds' investment restrictions are fundamental
and may not be altered without the approval of a Fund's shareholders. For
example, with respect to 100% of its total assets, a Fund (except to the
extent permitted under Rule 2a-7 of the 1940 Act, or any successor rule
thereto) may not purchase the securities of any one issuer (other than
securities issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities, or securities of other investment
companies) if the purchase would cause a Fund to have more than 5% of its
total assets invested in the issuer or to have more than 10% of the
outstanding voting securities of that issuer. In addition, the Funds may
not purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities, municipal securities, or securities issued or
guaranteed by domestic banks, including U.S. branches of foreign banks and
foreign branches of U.S. banks) if, as a result, more than 25% of a Fund's
total assets would be invested in the securities of companies whose
principal business activities are in the same industry. Other fundamental
restrictions prohibit a Fund from lending more that 33 1/3% of its total
assets to other parties and from borrowing money in an aggregate amount
exceeding 33 1/3% of a Fund's total assets.
Effective May 13, 1999, the section of the Funds' Prospectus entitled "The Funds
And Their Management" is amended to (1) delete the third, fourth and fifth
sentences of the thirteenth paragraph and (2) substitute the following in their
place:
Certain Fund expenses are absorbed by INVESCO in order to ensure that each
Fund's total operating expense do not exceed the following percentages of
each Fund's Average net assets: U.S. Government Money Fund, 0.85%; Cash
Reserves Fund, 0.90%; and Tax-Free Money Fund, 0.85% effective May 13,
1999 and 0.75% prior to May 13, 1999. These commitments are in effect
until the May 2000 meeting of the Company's board of directors, and may be
changed following consultation with the board. In the absence of the
expense limitations, each Fund's total operating expenses would have
equaled the following percentages of each Fund's average net assets: U.S.
Government Money Fund, 1.15%; Cash Reserves Fund, 0.96%; and Tax-Free
Money Fund, 1.10%.
The section of the Funds' Prospectus entitled "Fund Services - Shareholder
Accounts" is amended to (1) delete the second and third sentence of the section
and (2) substitute the following in its place:
INVESCO no longer issues certificates. If you are selling shares
previously issued in certificate form, you need to include the
certificates along with your redemption/exchange request.
The chart in the Funds' Prospectus entitled "How To Sell Shares" is amended to
(1) delete the "Please Remember" paragraph of the "In Writing" section and (2)
substitute the following in its place:
INVESCO no longer issues paper certificates for shares. If the shares you
are selling are represented by stock certificates, the certificates must
be sent to INVESCO before we can process your redemption.
The date of this Supplement is June 1, 1999.
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INVESCO MONEY MARKET FUNDS, INC.
INVESCO U.S. Government Money Fund
INVESCO Cash Reserves Fund
INVESCO Tax-Free Money Fund
Supplement to Statement of Additional Information
Dated October 1, 1998
Effective June 1, 1999, the section of the Company's Statement of Additional
Information ("SAI") entitled "Investment Policies And Restrictions - U.S.
Government Obligations" is amended to (1) delete the first two sentences in the
first paragraph, and (2) substitute the following sentence in its place:
The Funds may invest in U.S. government obligations without limit.
Effective June 1, 1999, the section of the Company's SAI entitled "Investment
Policies And Restrictions - Repurchase Agreements" is amended to (1) delete the
last sentence of the first paragraph and (2) substitute the following in its
place:
A Fund will not enter into repurchase agreements maturing in more than
seven days, if as a result, more than 10% of its net assets would be
invested in such repurchase agreements and other illiquid securities.
Effective June 1, 1999, the section of the Company's SAI entitled "Investment
Policies And Restrictions - Investment Restrictions" is amended to (1) delete
the section in its entirety, and (2) substitute the following section in its
place:
Investment Restrictions.
The Funds operate under certain investment restrictions. For purposes of
the following restrictions, all percentage limitations apply immediately
after a purchase or initial investment. Any subsequent change in a
particular percentage resulting from fluctuations in value does not
require elimination of any security from a Fund.
The following restrictions are fundamental and may not be changed with
respect to a Fund without prior approval of a majority of the outstanding
voting securities of that Fund, as defined in the Investment Company Act
of 1940, as amended (the "1940 Act"). Each Fund, unless otherwise
indicated, may not:
1. purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities, municipal securities, or securities issued or
guaranteed by domestic banks, including U.S. branches of foreign
banks and foreign branches of U.S. banks) if, as a result, more than
25% of the Fund's total assets would be invested in the securities
of companies whose principal business activities are in the same
industry;
2. except to the extent permitted under Rule 2a-7 of the 1940 Act, or any
successor rule thereto, purchase the securities of any issuer (other
than securities issued or guaranteed by the U.S. government or any
of its agencies or instrumentalities, or securities of other
investment companies) if, as a result, (i) more than 5% of the
Fund's total assets would be invested in the securities of that
issuer, or (ii) the Fund would hold more than 10% of the outstanding
voting securities of that issuer;
<PAGE>
3. underwrite securities of other issuers, except insofar as it may be
deemed to be an underwriter under the Securities Act of 1933, as
amended, in connection with the disposition of the Fund's portfolio
securities;
4. borrow money, except that the Fund may borrow money in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed)
less liabilities (other than borrowings);
5. issue senior securities, except as permitted under the Investment
Company Act of 1940;
6. lend any security or make any loan if, as a result, more than 33 1/3%
of its total assets would be lent to other parties, but this limitation
does not apply to the purchase of debt securities or to repurchase
agreements;
7. purchase or sell physical commodities; however, this policy shall not
prevent the Fund from purchasing and selling foreign currency, futures
contracts, options, forward contracts, swaps, caps, floors, collars and
other financial instruments; or
8. purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the Fund
from investing in securities or other instruments backed by real estate
or securities of companies engaged in the real estate business).
9. Each Fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company managed by INVESCO Funds Group,
Inc. or an affiliate or a successor thereof, with substantially the
same fundamental investment objective, policies and limitations as the
Fund.
In addition, each Fund has the following non-fundamental policies, which
may be changed without shareholder approval:
A. The Fund may not sell securities short (unless it owns or has the right
to obtain securities equivalent in kind and amount to the securities
sold short) or purchase securities on margin, except that (i) this
policy does not prevent the Fund from entering into short positions
in foreign currency, futures contracts, options, forward contracts,
swaps, caps, floors, collars and other financial instruments, (ii)
the Fund may obtain such short-term credits as are necessary for the
clearance of transactions, and (iii) the Fund may make margin
payments in connection with futures contracts, options, forward
contracts, swaps, caps, floors, collars and other financial
instruments;
B. The Fund may borrow money only from a bank or from an open-end
management investment company managed by INVESCO Funds Group, Inc. or
an affiliate or a successor thereof for temporary or emergency purposes
(not for leveraging or investing) or by engaging in reverse repurchase
agreements with any party (reverse repurchase agreements will be
treated as borrowings for purposes of fundamental limitation (4)).
<PAGE>
C. The Fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the
prices at which they are valued.
D. The Fund may invest in securities issued by other investment companies
to the extent that such investments are consistent with the Fund's
investment objective and policies and permissible under the 1940 Act.
E. With respect to fundamental limitation (1), domestic and foreign
banking will be considered to be different industries.
In addition, with respect to a Fund that may invest in municipal
obligations, the following non-fundamental policy applies, which may be
changed without shareholder approval:
Each state (including the District of Columbia and Puerto Rico), territory
and possession of the United States, each political subdivision, agency,
instrumentality and authority thereof, and each multi-state agency of
which a state is a member is a separate "issuer." When the assets and
revenues of an agency, authority, instrumentality or other political
subdivision are separate from the government creating the subdivision and
the security is backed only by assets and revenues of the subdivision,
such subdivision would be deemed to be the sole issuer. Similarly, in the
case of an Industrial Development Bond or Private Activity Bond, if that
bond is backed only by the assets and revenues of the non-governmental
user, then that non-governmental user would be deemed to be the sole
issuer.
Effective May 13, 1999, the section of the Company's SAI entitled "The Funds And
Their Management - Administrative Services Agreement" is amended to (1) delete
the third paragraph and (2) substitute the following in its place:
As full compensation for services provided under the Administrative
Services Agreement, each Fund pays a monthly fee to INVESCO consisting of
a base fee of $10,000 per year, plus an additional incremental fee
computed daily and paid monthly at an annual rate of 0.015% per year of
the average net assets of the Fund prior to May 13, 1999 and 0.045% per
year of the average net assets of the Fund effective May 13, 1999.
The date of this Supplement is June 1, 1999.
