KNOWLEDGE DISCIPLINE SERVICE CHOICE
- --------------------------------------------------------------------------------
YOU SHOULD KNOW WHAT INVESCO KNOWS(TM)
- --------------------------------------------------------------------------------
INVESCO Money Market Funds, Inc.
CASH RESERVES FUND
U.S. GOVERNMENT FUND
TAX-FREE MONEY FUND
ANNUAL
[INVESCO ICON]
INVESCO
ANNUAL REPORT | May 31, 1999
<PAGE>
MONEY MARKET FUNDS
A Note on Money Market Funds at INVESCO
- --------------------------------------------------------------------------------
As investors turn increasingly to money market funds as both short-term savings
vehicles and bulwarks against market volatility, we thought it useful to
reiterate our approach to money market management at INVESCO.
o We manage Cash Reserves Fund as a convenient vehicle for providing
high-quality current yields for investors, while allowing them quick and
easy access to their money through free checkwriting.
o Invested in securities backed by the federal government or its agencies,
U.S. Government Money Fund is an attractive option for shareholders
primarily concerned with safety of principal in light of Y2K concerns and
other issues. Of INVESCO's five money market fund alternatives, this offers
the highest credit quality.
o Tax-Free Money Fund helps shelter its investors from federal taxes by
investing in the debt obligations of states and municipalities. (Income may
be subject to state and local taxes, as well as the federal Alternative
Minimum Tax.)
o For institutions and individuals with over $100,000 to invest, we also
manage two other money market funds. The INVESCO's Treasurer's Series
Funds, Money Market Reserve Fund and Tax-Exempt Reserve Fund, provide a
lower-cost, higher-yield option. The two Treasurer's Funds have an expense
ratio fixed at 25 basis points, or 1/4 percent, which helps insure
extremely competitive yields for investors. The ranking firm IBC recently
placed the Tax-Exempt Reserve Fund first and the Money Market Reserve Fund
third in their respective categories based on seven-day yields.*
While money market funds are not insured by the federal government, they provide
a low-risk and increasingly convenient cash-management tool for investors. An
investment in these funds is not insured nor guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the funds seek to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the funds.
/s/ Richard R. Hinderlie /s/ Ingeborg S. Cosby
Richard R. Hinderlie Ingeborg S. Cosby
Vice President Vice President
- --------------------------------------------------------------------------------
RICHARD R. HINDERLIE
VICE PRESIDENT, INVESCO FUNDS GROUP. BA, PACIFIC LUTHERAN UNIVERSITY, MBA,
ARIZONA STATE UNIVERSITY. JOINED INVESCO IN 1993. BEGAN INVESTMENT CAREER IN
1973. HAS MANAGED CASH RESERVES FUND AND U.S. GOVERNMENT MONEY FUND SINCE 1993.
INGEBORG S. COSBY
VICE PRESIDENT, INVESCO FUNDS GROUP. JOINED INVESCO IN 1985. BEGAN INVESTMENT
CAREER IN 1982. HAS MANAGED TAX-FREE MONEY FUND SINCE 1987.
- --------------------
* IBC MONEY FUND REPORT, June 29, 1999. IBC is an independent mutual fund
analyst specializing in money market funds. INVESCO Treasurer's Tax-Exempt
Reserve ranked #1 out of 285 tax-free money funds based on its 7-day yield as
of June 29, 1999. INVESCO Treasurer's Money Market Reserve ranked #3 out of
250 non-governemtn money funds based on its 7-day yield as of June 29, 1999.
Past performance is not a guarantee of future results.
<PAGE>
INVESCO | Annual Report | May 31, 1999
Market Headlines: June 1998 to May 1999
The strong annual returns recorded at the end of 1998 by large company stock
indexes masked a period of turmoil in the markets as dramatic as any in recent
memory. With investors already nervous about valuations, confidence evaporated
in late summer when the Asian financial crisis appeared ready to spread like
wildfire through the world's emerging markets.
The quick actions of the Federal Reserve Board and bargain-hunting by stoic
investors helped the markets reverse their losses in the early fall. Yet most
important, perhaps, was the continuing strength of the American economy--and
behind it, the American consumer. Low unemployment and interest rates, strong
wage gains, and a resilient level of consumer confidence kept money flowing into
housing and the auto industry, the two bellwether industries for the economy.
Technology stocks led the rebound, as investors looked for the industries with
the highest growth rates and the most pricing leverage.
Throughout the fall and winter, the largest, fastest-growing companies left the
rest of the market behind as investors kept one eye on the continuing problems
overseas and another on the blossoming technological promise of the American
economy. First health care stocks and then telecommunications issues
outdistanced the pack. Meanwhile, cyclical issues suffered, as did many small or
slower-growing company stocks.
By the spring of 1999, however, the threat of economic overheating rather than
worldwide depression loomed largest in many investors' minds. Signs of renewed
economic strength abroad and remarkable growth figures at home led many to
believe that the Federal Reserve would soon reverse course and lead interest
rates higher--and indeed, market interest rates crept upward. Too much growth
rather than too little encouraged many to head for cyclical industries poised to
benefit from improving markets.
As the "cyclical rotation" continued, the market averages seemed to bounce
against a ceiling, putting an end to their dizzying ascent since the fall. With
the economic outlook almost too bright and the market near its record levels,
investors began to speak again of the importance of stock selection and asset
allocation in place of playing the averages.
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
systems, 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. At this time, it is
generally believed that foreign issuers, particularly those in emerging and
other markets, may be more vulnerable to Year 2000 problems than will be issuers
in the U.S.
<PAGE>
STATEMENT OF INVESTMENT SECURITIES
INVESCO Money Market Funds, Inc.
May 31,1999
<TABLE>
<CAPTION>
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE % AMOUNT VALUE
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Reserves Fund
100.00 SHORT-TERM INVESTMENTS
99.65 COMMERCIAL PAPER
4.89 AUTO PARTS
PACCAR Financial
6/2/1999 4.86 $ 7,500,000 $ 7,499,002
6/3/1999 4.88 3,200,000 3,199,145
6/10/1999 4.89 10,000,000 9,987,956
6/15/1999 4.88 20,000,000 19,962,632
================================================================================================
40,648,735
8.65 AUTOMOBILES
Ford Motor Credit
6/3/1999 4.81 25,000,000 25,000,000
6/4/1999 4.81 15,000,000 15,000,000
General Motors Acceptance, 7/12/1999 4.95 32,000,000 31,822,934
================================================================================================
71,822,934
5.39 BANKS
Wells Fargo, 7/14/1999 4.92 45,000,000 44,740,547
================================================================================================
9.76 CONSUMER FINANCE
American Express Credit
6/2/1999 4.87 8,000,000 8,000,000
6/30/1999 4.85 35,000,000 35,000,000
Household Finance, 6/8/1999 4.83 38,000,000 38,000,000
================================================================================================
81,000,000
5.18 ELECTRICAL EQUIPMENT
General Electric
6/1/1999 4.87 39,000,000 39,000,000
6/9/1999 4.89 4,000,000 4,000,000
================================================================================================
43,000,000
15.52 FINANCIAL -- DIVERSIFIED
American General Finance, 6/7/1999 4.79 15,000,000 15,000,000
Associates Corp of North America, 6/1/1999 4.92 40,000,000 40,000,000
CIT Group Holdings, 6/28/1999 4.89 29,000,000 28,895,433
Heller Financial, 6/29/1999 4.96 45,000,000 45,000,000
================================================================================================
128,895,433
13.80 INSURANCE
American General, 6/9/1999 4.89 10,000,000 10,000,000
<PAGE>
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE % AMOUNT VALUE
- ------------------------------------------------------------------------------------------------
CIGNA Corp
6/9/1999 4.84 $15,000,000 $ 15,000,000
6/25/1999 4.84 25,000,000 25,000,000
Prudential Funding, 6/10/1999 4.84 18,000,000 18,000,000
SAFECO Credit, 6/30/1999 4.93 10,000,000 9,961,005
Transamerica Finance
6/23/1999 4.85 24,300,000 24,229,239
8/6/1999 4.95 12,500,000 12,389,029
================================================================================================
114,579,273
10.84 INVESTMENT BANK/BROKER FIRM
Bear Stearns, 6/1/1999 4.94 30,000,000 30,000,000
Merrill Lynch, 6/11/1999 4.90 20,000,000 19,973,172
Morgan Stanley Dean Witter, 6/2/1999 4.88 40,000,000 39,994,654
================================================================================================
89,967,826
4.82 MACHINERY
Deere & Co, 6/14/1999 4.82 40,000,000 40,000,000
================================================================================================
3.97 OIL & GAS RELATED
Chevron USA, 6/21/1999 4.87 33,000,000 33,000,000
================================================================================================
4.82 REAL ESTATE RELATED
Weyerhaeuser Real Estate
6/4/1999 4.89 21,000,000 20,991,570
6/7/1999 4.87 15,000,000 14,987,993
6/16/1999 4.91 4,000,000 3,991,954
================================================================================================
39,971,517
4.82 RETAIL
Sears Roebuck Acceptance
6/9/1999 4.90 3,000,000 3,000,000
6/22/1999 4.88 20,000,000 20,000,000
6/24/1999 4.88 17,000,000 17,000,000
================================================================================================
40,000,000
4.78 SERVICES
Hertz Corp
6/3/1999 4.88 6,000,000 5,998,398
6/3/1999 4.85 7,000,000 7,000,000
6/4/1999 4.90 4,720,000 4,718,101
6/7/1999 4.84 22,000,000 22,000,000
================================================================================================
39,716,499
2.41 TELECOMMUNICATIONS -- LONG DISTANCE
Bell Atlantic Network Funding, 6/7/1999 4.86 20,000,000 19,984,052
================================================================================================
TOTAL COMMERCIAL PAPER (Amortized Cost $827,326,816) 827,326,816
================================================================================================
<PAGE>
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE % AMOUNT VALUE
- ------------------------------------------------------------------------------------------------
0.35 REPURCHASE AGREEMENTS
Repurchase Agreement with State Street
dated 5/28/1999 due 6/1/1999 at 4.720%,
repurchased at $2,941,542 (Collateralized by
US Treasury Bonds due 8/15/2013 at 12.000%,
value $3,012,136) (Cost $2,940,000) $ 2,940,000 $ 2,940,000
================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Amortized Cost $830,266,816)(a) $830,266,816
================================================================================================
Tax-Free Money Fund
100.00 SHORT-TERM INVESTMENTS
95.73 MUNICIPAL NOTES
1.68 ALABAMA
Alabama Docks Dept, FR, Seaport Facil Rev,
Series 1978, 11/1/1999 3.10 $ 305,000 $ 309,869
Montgomery Edl Bldg Auth, Alabama (Faulkner
Univ Proj) (MBIA Insured), FR, Facils Rev,
Series 1998, 10/1/1999 3.60 245,000 246,707
Troy State Univ System, Alabama
(MBIA Insured), FR, Gen Student Fee
Rev, Series 1998, 11/1/1999 3.55 310,000 310,108
================================================================================================
866,684
0.93 ARIZONA
Arizona Hlth Facils Auth (Arizona Vol Hosp
Fedn)(FGIC Insured), AR Mode Bonds,
1985 Series A, 10/1/2015(b) 3.25 480,000 480,000
4.85 CALIFORNIA
Los Angeles Regl Airports Impt, California
(American Airlines/Los Angeles Intl Airport)
(LOC - Wachovia Bank), AR, Facils Sublease
FDR, Issue 1984
Series C, 12/1/2024(b) 3.25 600,000 600,000
Series F, 12/1/2024(b) 3.25 800,000 800,000
Series G, 12/1/2024(b) 3.25 1,100,000 1,100,000
================================================================================================
2,500,000
0.97 COLORADO
Colorado Student Oblig Auth (AMBAC Insured),
AR, Sr Lien Student Ln Rev, 1999 Series A-1,
9/1/2002(b) 3.35 500,000 500,000
================================================================================================
1.56 DISTRICT OF COLUMBIA
District of Columbia (Washington D.C.)
(AMBAC Insured), FR, Gen Oblig,
Series 1990A, 6/1/1999 3.10 480,000 480,000
<PAGE>
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE % AMOUNT VALUE
- ------------------------------------------------------------------------------------------------
District of Columbia (Washington D.C.)
(Howard University Issue)
(MBIA Insured), FR, Rev Ref,
Series 1996, 10/1/1999 3.15 $ 320,000 $ 321,398
================================================================================================
801,398
3.07 FLORIDA
Broward Cnty, Florida (AMBAC Insured), FR,
Wtr & Swr Util Rev Ref, Series 1993,
10/1/1999 3.10 250,000 250,888
Broward Cnty School Brd, Florida
(AMBAC Insured), FR, Ctfs of Participation,
Series 1997C, 7/1/1999 3.63 220,000 220,083
Miami-Dade Cnty School Dist, Florida
(FSA Insured), FR, Gen Oblig Ref School,
Series 1998, 8/1/1999 3.45 200,000 200,166
St Lucie Cnty, Florida (Savannah Hosp Proj)
(LOC - NationsBank of Georgia), FRD, IDR,
Series 1985, 11/1/2015(b) 3.40 910,000 910,000
================================================================================================
1,581,137
6.78 GEORGIA
DeKalb Cnty Hosp Auth, Georgia (DeKalb Med Ctr
Proj) (LOC - Trust Co Bank),
AR, RAC, Series 1993B, 9/1/2009(b) 3.30 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) 3.20 500,000 500,000
Macon-Bibb Cnty Hosp Auth, Georgia (Med Ctr
of Cent Georgia) (LOC - Trust Co Bank), AR,
RAC, Series 1994, 4/1/2007(b) 3.30 1,345,000 1,345,000
Savannah Econ Dev Auth, Georgia (Home Depot
Proj) (LOC - Trust Co Bank), AR, Exmp Facil
Rev, Series 1995B, 8/1/2025(b) 3.30 500,000 500,000
================================================================================================
3,490,000
1.94 IDAHO
Idaho, FR, TAN, Series 1998, 6/30/1999 3.60 1,000,000 1,000,603
================================================================================================
4.59 ILLINOIS
Decatur, Illinois (Macon Cnty) (Decatur Mem
Hosp Proj) (MBIA Insured), FR, Hosp Facil
Rev, Series 1991B, 10/1/1999 3.20 155,000 156,516
Gtr Rockford Airport Auth, Illinois (Winnebago
Cnty) (AMBAC Insured), FR, Gen Oblig Airport,
Series 1998, 1/1/2000 3.30 315,000 325,001
Illinois Dev Fin Auth (6 West Hubbard Street
Proj)(LOC - LaSalle Natl Bank), F/FR, IDR,
Series 1986, 12/1/2016(b) 3.40 855,000 855,000
<PAGE>
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE % AMOUNT VALUE
- ------------------------------------------------------------------------------------------------
Illinois Dev Fin Auth (Kindlon Partners Proj)
(LOC - LaSalle Natl Bank), VR, Indl Proj
Rev, Series 1991, 5/1/2006(b) 3.31 $ 600,000 $ 600,000
Plainfield Cmnty Cons School Dist #202,
Illinois(Will & Kendall Cntys) (FSA
Insured), FR, Gen Oblig Ltd, Series
1998C, 12/30/1999 3.08 225,000 228,111
Rockford, Illinois (Winnebago Cnty) (AMBAC
Insured), FR, Gen Oblig Ref, Series 1993,
12/15/1999 3.15 200,000 201,270
================================================================================================
2,365,898
6.60 INDIANA
Daviess Cnty, Indiana (Perdue Farms/Shenandoah
Valley Farms Facil) (LOC - Natl Bank of
North Carolina), V/FRD, Econ Dev Rev,
1987 Issue, 9/1/2007(b) 3.20 1,500,000 1,500,000
Indiana Hosp Auth (MBIA Insured), VR, Equip
Fing Rev, Series 1985A, 12/1/2015(b) 3.30 400,000 400,000
Indiana Muni Pwr Agency (LOC - Toronto-Dominion
Bank), VRD, Pwr Supply System Ref Rev,
1998 Series A, 1/1/2018(b) 3.20 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) 3.31 500,000 500,000
================================================================================================
3,400,000
1.17 IOWA
Iowa Fin Auth (Wheaton Franciscan Svcs) (MBIA
Insured), VRD, Rev, Series 1998B,
8/15/2024(b) 3.40 600,000 600,000
================================================================================================
2.42 KANSAS
Fairway, Kansas (J C Nichols Proj) (LOC - Prin
Mutual Ins Co), FRD, Indl Rev, Series 1984,
11/1/2014(b) 3.80 500,000 500,000
Spring Hill, Kansas (Abrasive Engr & Mfg Proj)
(LOC - LaSalle Natl Bank), VR, Indl Rev,
Series 1996, 9/1/2016(b) 3.31 500,000 500,000
Topeka, Kansas (FSA Insured), FR, Wtr & Wtr
Pollution Ctl Util Ref Rev, Series 1998A,
8/1/1999 3.15 245,000 245,250
================================================================================================
1,245,250
0.19 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 3.76 100,000 100,000
================================================================================================
<PAGE>
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE % AMOUNT VALUE
- ------------------------------------------------------------------------------------------------
3.87 LOUISIANA
Louisiana (FGIC Insured), FR, Gasoline & Fuels
Tax Rev, 1990 Series A, 11/15/1999 3.15 $ 300,000 $ 305,442
New Orleans, Louisana (AMBAC Insured), FR,
Drain System, Series 1998, 12/1/1999 3.20 300,000 304,280
New Orleans, Louisana (MBIA Insured), FR,
Sewerage Svc Rev, Series 1998, 6/1/1999 3.10 375,000 375,000
New Orleans, Louisiana (MBIA Insured), FR,
Wtr Rev, Series 1998, 12/1/1999 3.20 240,000 242,126
Orleans Parish School Dist, Louisiana
(AMBAC Insured), FR, Gen Oblig School,
Series 1997, 9/1/1999 3.05 300,000 301,423
St. Charles Parish School Brd, Louisiana
(AMBAC Insured), FR, Sales Tax School,
Series 1999, 2/1/2000 3.21 455,000 466,275
================================================================================================
1,994,546
2.02 MARYLAND
Allegany Cnty, Maryland (AMBAC Insured), FR,
Gen Oblig Pub Impt, Series 1998, 8/1/1999 3.50 525,000 525,714
Maryland Hlth & Higher Edl Facils Auth,
(Mercy Med Ctr Issue) FR, Rev,
Series 1989, 7/1/2020(b) 3.20 250,000 255,962
Montgomery Cnty, Maryland, FR, Gen Oblig Cons
Pub Impt, Series 1989B, 11/1/2002(b) 3.10 250,000 258,723
================================================================================================
1,040,399
3.43 MICHIGAN
Beaverton Rural Schools, Michigan (Gladwin
& Clare Cntys) (FGIC Insured), FR, Gen Oblig
Unltd Tax School Bldg & Site, Series 1996,
5/1/2000 3.20 255,000 264,244
Delta Cnty Econ Dev Corp, Michigan (Mead-
Escanaba Paper Proj), ATS, Env Impt Rev Ref,
Series 1985D, 12/1/2023(b) 3.35 1,500,000 1,500,000
================================================================================================
1,764,244
1.94 MISSOURI
Columbia, Missouri (LOC - Toronto-Dominion
Bank), VR, Spl Oblig Ins Reserve, Series
1988A, 6/1/2008(b)(c) 3.20 1,000,000 1,000,000
================================================================================================
1.94 MONTANA
Billings, Montana (CFS Continental Proj)
(LOC - Toronto-Dominion Bank), ATS, IDR,
Series 1984, 12/1/2014(b) 3.20 1,000,000 1,000,000
================================================================================================
<PAGE>
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE % AMOUNT VALUE
- ------------------------------------------------------------------------------------------------
0.79 NEBRASKA
Hamilton Cnty, Nebraska (Iams Co Proj) (LOC -
NationsBank),VR, IDR Ref, Series 1990,
7/1/2005(b) 3.30 $ 405,000 $ 405,000
================================================================================================
1.48 NEW JERSEY
Delran Township, New Jersey (Burlington Cnty)
(MBIA Insured), FR, Gen Oblig, Series 1998,
6/1/1999 3.70 220,000 220,000
Passaic, New Jersey (FSA Insured), FR, Gen
Impt, 7/15/1999 3.65 540,000 540,712
================================================================================================
760,712
0.97 NEW MEXICO
New Mexico Hwy Commn (FSA Insured), ATS,
Sub Lien Tax Hwy Rev, Series 1996,
6/15/2011(b) 3.25 500,000 500,000
================================================================================================
4.30 NEW YORK
Marion Cent School Dist, New York (Wayne Cnty)
(FSA Insured), FR, Gen Oblig, Series 1998,
6/15/1999 3.20 175,000 175,035
Monroe Cnty Indl Dev Agency, New York (Ron
Ink Proj) (LOC - LaSalle Natl Bank), VR, IDR,
Series 1996, 7/1/2013(b) 3.69 1,500,000 1,500,000
New York, New York (FGIC Insured), FR, Gen
Oblig, Fiscal 1990 Series H, 8/1/1999 3.44 200,000 201,179
Salmon River Cent School Dist, New York
(Franklin & St. Lawrence Cntys) (AMBAC
Insured), FR, Gen Oblig, Series 1998,
6/15/1999 3.50 338,000 338,091
================================================================================================
2,214,305
4.85 NORTH CAROLINA
North Carolina Edl Facils Fin Agency (Bowman
Gray School of Medicine Proj) (LOC - Wachovia
Bank) VR, Rev, Series 1990, 9/1/2020(b) 3.25 500,000 500,000
Wake Cnty Indl Facils & Pollution Ctl Fing
Auth, North Carolina (Carolina Pwr & Light
Proj)(LOC - First Union Natl Bank), VR,
PCR, Series 1985B, 9/1/2015(b) 3.25 2,000,000 2,000,000
================================================================================================
2,500,000
0.98 NORTH DAKOTA
Williston, North Dakota (Catholic Hlth) (MBIA
Insured), FR, Hlth Facils Rev, Series 1995C,
11/15/1999 3.00 500,000 503,130
================================================================================================
0.81 OHIO
Ohio Wtr Dev Auth, FR, Wtr Dev Rev Ref,
Series 1975, 9/1/1999 3.05 410,000 414,872
================================================================================================
<PAGE>
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE % AMOUNT VALUE
- ------------------------------------------------------------------------------------------------
2.43 PENNSYLVANIA
Emmaus Gen Auth, Pennsylvania (Pennsylvania
VR Ln Prog) (FSA Insured), VRD, Rev, Series
1996, 12/1/2028(b) 3.25 $ 1,000,000 $ 1,000,000
Pennsylvania Turnpike Commn (FGIC Insured),
FR, Pennsylvania Turnpike Rev, Series
1992 O, 12/1/1999 3.18 250,000 252,238
================================================================================================
1,252,238
2.52 RHODE ISLAND
Rhode Island Indl Facils Corp (Blackstone Valley
Elec Proj) (LOC - Bank of New York), VRD,
Elec Facils Rev, Series 1984, 12/1/2014(b) 3.40 1,300,000 1,300,000
================================================================================================
0.97 SOUTH CAROLINA
Anderson Cnty, South Carolina (Belton Inds
Proj)(LOC - NationsBank of North Carolina),
AR, Indl Rev, Series 1991A, 7/1/2004(b) 3.40 500,000 500,000
================================================================================================
4.04 TENNESSEE
Decatur Cnty, Tennessee (FGIC Insured), FR,
School, Series 1998, 6/1/1999 3.80 330,000 330,000
Greeneville Hlth & Edl Facils Brd, Tennessee
(Laughlin Mem Hosp Proj) (LOC - NationsBank
of Tennessee), VRD, Rev, Series 1992,
10/1/2014(b) 3.25 800,000 800,000
Knox Cnty Indl Dev Brd, Tennessee (FGIC
Insured), FRD, IDR, Series 1984,
12/1/2014(b) 3.40 800,000 800,000
Monroe Cnty, Tennessee (FSA Insured), FR,
Rural School Ref, Series 1998, 6/1/1999 3.66 150,000 150,000
================================================================================================
2,080,000
15.86 TEXAS
Atlanta, Texas (Cass Cnty) (AMBAC Insured),
FR, Ctfs of Oblig, Series 1999, 2/15/2000 3.35 150,000 152,484
Boerne Indpt School Dist, Texas (Kendall Cnty)
(PSFG Insured), FR, Unltd Tax School
Bldg & Ref, Series 1999, 2/1/2000 3.25 440,000 442,144
Center Indpt School Dist, Texas (Shelby Cnty)
(PSFG Insured), FR, Unltd Tax School
Bldg & Ref, Series 1999, 2/15/2000 3.24 255,000 255,000
Grapevine Indl Dev, Texas (American Airlines
Proj)(LOC - Morgan Guaranty Trust), VR,
Multiple Mode Rev
1984 Series A-1, 12/1/2024(b) 3.25 300,000 300,000
1984 Series B-1, 12/1/2024(b) 3.25 900,000 900,000
1984 Series B-4, 12/1/2024(b) 3.25 600,000 600,000
<PAGE>
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE % AMOUNT VALUE
- ------------------------------------------------------------------------------------------------
Hunt Mem Hosp Dist, Texas (FSA Insured), VR,
Rev, Series 1998, 8/15/2017(b) 3.25 $ 500,000 $ 500,000
Lone Star Airport Impt Auth, Texas (American
Airlines Proj) (LOC - Royal Bank of Canada),
V/FRD, Multiple Mode Rev,
1984 Series B-1, 12/1/2014(b) 3.25 800,000 800,000
1984 Series B-2, 12/1/2014(b) 3.25 500,000 500,000
1984 Series B-4, 12/1/2014(b) 3.25 400,000 400,000
Magnolia Indpt School Dist, Texas (Montgomery
Cnty) (PSFG Insured), FR, Unltd Tax School
Bldg, Series 1995, 8/15/1999 3.20 100,000 100,965
Mesquite, Texas (Dallas Cnty) (FGIC Insured),
FR, Gen Oblig Ref & Impt, Series 1992,
2/15/2000 3.25 285,000 289,422
Plano Indpt School Dist, Texas (Collin Cnty)
(PSFG Insured), FR, Unltd Tax School Bldg,
Series 1999, 2/15/2000(d) 3.34 840,000 849,513
Plano Indpt School Dist, Texas (Collin Cnty)
(PSFG Insured), VR, Unltd Tax School Bldg,
Series 1997, 8/15/2017(b) 3.00 1,000,000 1,000,000
San Patricio Cnty Muni Wtr Dist, Texas (FSA
Insured), FR, Wtr Rev, Series 1998,
7/10/1999 3.12 150,000 150,534
Sheldon Indpt School Dist, Texas (Harris Cnty)
(PSFG Insured), FR, Ultd Tax School Bldg,
Series 1999, 2/15/2000 3.22 150,000 151,585
Stafford, Texas (Fort Bend & Harris Cntys)
(FGIC Insured), FR, Perm Impt, Series
1998, 9/1/1999 3.16 300,000 301,157
Trinity River Auth, Texas (AMBAC Insured), FR,
Regl Wastewtr System Rev, Series 1995,
8/1/1999 3.10 225,000 225,689
Trinity River Auth, Texas (FGIC Insured),
FR, Regl Wastewtr System Impt Rev,
Series 1992, 8/1/1999 3.10 250,000 251,278
================================================================================================
8,169,771
0.58 UTAH
Tremonton, Utah (Box Elden Cnty), (La-Z-Boy
Chair Proj) (LOC - NBD Bank), VRD, IDR,
Series 1990, 6/1/2000(b) 3.69 300,000 300,000
================================================================================================
0.84 VIRGINIA
Richmond, Virginia, FR, Gen Oblig Pub Impt,
Series 1990A, 1/15/2020(b) 3.15 415,000 432,885
================================================================================================
3.39 WASHINGTON
Seattle Metro Muni, Washington (MBIA Insured),
FR, Swr Rev, Series T, 1/1/2031(b) 3.10 220,000 229,078
Vancouver, Washington (FSA Insured), FR, Ltd
Tax Gen Oblig, Series 1998A, 12/1/1999 3.10 285,000 287,666
<PAGE>
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE % AMOUNT VALUE
- ------------------------------------------------------------------------------------------------
Washington, FR, Motor Veh Fuel Tax
Gen Oblig Ref, Series R-94B, 9/1/1999 3.05 $ 100,000 $ 100,597
Washington Pub Pwr Supply System (Nuclear
Proj #1), FR, Ref Rev
Series 1989A, 7/1/2015(b) 1.72 220,000 221,048
Series 1989B, 7/1/2015(b) 3.18 870,000 907,351
================================================================================================
1,745,740
0.97 WEST VIRGINIA
West Virginia School Bldg Auth (MBIA Insured),
FR, Cap Impt Rev, Series 1994, 7/1/1999 3.65 500,000 500,631
================================================================================================
TOTAL MUNICIPAL NOTES (Amortized Cost $49,309,443) 49,309,443
================================================================================================
4.27 COMMERCIAL PAPER
4.27 FINANCIAL
General Electric Captial, 6/1/1999
(Cost $2,200,000) 4.90 2,200,000 2,200,000
================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Amortized Cost $51,509,443)(a) $ 51,509,443
================================================================================================
U.S. Government Money Fund
100.00 SHORT-TERM INVESTMENTS
86.91 US GOVERNMENT AGENCY OBLIGATIONS
Fannie Mae
6/8/1999 4.82 $ 7,000,000 $ 6,993,537
6/24/1999 4.83 10,000,000 9,969,637
Federal Home Loan Bank
6/9/1999 4.82 6,500,000 6,493,135
Freddie Mac
6/15/1999 4.82 7,000,000 6,987,075
6/22/1999 4.83 10,000,000 9,972,274
6/30/1999 4.88 25,000,000 24,903,551
7/14/1999 4.90 12,500,000 12,428,295
7/16/1999 4.85 10,000,000 9,940,570
================================================================================================
TOTAL US GOVERNMENT AGENCY OBLIGATIONS
(Amortized Cost $87,688,074) 87,688,074
================================================================================================
13.09 REPURCHASE AGREEMENTS
Repurchase Agreement with State Street
dated 5/28/1999 due 6/1/1999 at 4.720%,
repurchased at $13,211,925 (Collateralized by
US Treasury Bonds, due 4/15/2028 at 3.625%,
value $13,482,157)(Cost $13,205,000) 13,205,000 13,205,000
================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Amortized Cost $100,893,074)(a) $100,893,074
================================================================================================
</TABLE>
<PAGE>
The following abbreviations may be used in portfolio descriptions:
A/FR(e) -- Adjustable/Fixed Rate IDR -- Industrial Development
Revenue
AMBAC -- American Municipal Bond LOC -- Letter of Credit
Assurance Corporation
AR(e) -- Adjustable Rate MBIA -- Municipal Bond Investors
ATS(e) -- Adjustable Tender Assurance Corporation
Securities
FDR(e) -- Flexible Demand Revenue PCR -- Pollution Control Revenue
FGIC -- Financial Guaranty PSGF -- Permanent School Fund
Insurance Company Guarantee Program
FNMA -- Fannie Mae RAC -- Revenue Anticipation
Certificates
F/FR -- Floating/Fixed Rate TAN -- Tax Anticipation Notes
FR -- Fixed Rate TECP -- Tax-Exempt Commercial Paper
FRD(e) -- Floating Rate Demand V/FRD(e) -- Variable/Fixed Rate Demand
FSA -- Financial Security VR(e) -- Variable Rate
Assurance
GNMA -- Government National VRD(e) -- Variable Rate Demand
Mortgage Association
(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 or less. Rate shown reflects current rate.
(c) Security has been designated as collateral for when-issued ("W/I")
securities.
(d) Security is a W/I security.
(e) Rate is subject to change. Rate shown reflects current rate.
See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
INVESCO Money Market Funds, Inc.
May 31, 1999
CASH TAX-FREE
RESERVES MONEY
FUND FUND
- -----------------------------------------------------------------------------
ASSETS
Investment Securities:
At Cost(a) $ 830,266,816 $ 51,509,443
=============================================================================
At Value(a) $ 830,266,816 $ 51,509,443
Receivables:
Fund Shares Sold 22,060,999 70,037
Interest 1,264,655 447,405
Prepaid Expenses and Other Assets 158,109 31,467
=============================================================================
TOTAL ASSETS 853,750,579 52,058,352
=============================================================================
LIABILITIES
Payables:
Custodian 228,098 134,762
Distributions to Shareholders 39,680 4,080
Fund Shares Repurchased 39,206,950 1,207,411
Accrued Expenses and Other Payables 117,956 14,719
=============================================================================
TOTAL LIABILITIES 39,592,684 1,360,972
=============================================================================
NET ASSETS AT VALUE $ 814,157,895 $ 50,697,380
=============================================================================
Shares Outstanding(b) 814,157,895 50,697,380
NET ASSET VALUE, Offering and Redemption
Price per Share $ 1.00 $ 1.00
=============================================================================
(a) Investment securities at cost and value at May 31, 1999 include a
repurchase agreement of $2,940,000 for Cash Reserves Fund.
(b) The Fund has ten billion authorized shares of common stock, par value of
$0.01 per share. Of such shares, five billion and one billion have been
allocated to Cash Reserves and Tax-Free Money Funds, respectively. Paid-in
capital was $814,157,895 and $50,697,380 for Cash Reserves and Tax-Free
Money Fund, respectively.
See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
INVESCO Money Market Funds, Inc.
May 31, 1999
U.S. GOVERNMENT
MONEY
FUND
- -----------------------------------------------------------------------------
ASSETS
Investment Securities:
At Cost(a) $ 100,893,074
=============================================================================
At Value(a) $ 100,893,074
Cash 225,292
Receivables:
Fund Shares Sold 1,414,673
Interest 6,925
Prepaid Expenses and Other Assets 46,267
=============================================================================
TOTAL ASSETS 102,586,231
=============================================================================
LIABILITIES
Payables:
Distributions to Shareholders 3,647
Fund Shares Repurchased 11,055,569
Accrued Expenses and Other Payables 17,882
=============================================================================
TOTAL LIABILITIES 11,077,098
=============================================================================
NET ASSETS AT VALUE $ 91,509,133
=============================================================================
Shares Outstanding(b) 91,509,133
NET ASSET VALUE, Offering and Redemption
Price per Share $ 1.00
=============================================================================
(a) Investment securities at cost and value at May 31, 1999 include a
repurchase agreement of $13,205,000 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, one billion has been allocated to U.S.
Government Money Fund. Paid-in capital for U.S. Government Money Fund was
$91,509,133.
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS
INVESCO Money Market Funds, Inc.
Year Ended May 31, 1999
CASH TAX-FREE
RESERVES MONEY
FUND FUND
- -----------------------------------------------------------------------------
INVESTMENT INCOME
INTEREST INCOME $ 41,306,552 $ 1,661,919
=============================================================================
EXPENSES
Investment Advisory Fees 3,157,241 246,764
Transfer Agent Fees 3,167,337 138,487
Administrative Fees 140,326 18,152
Custodian Fees and Expenses 130,030 14,397
Directors' Fees and Expenses 41,737 10,527
Professional Fees and Expenses 42,120 22,011
Registration Fees and Expenses 158,406 27,032
Reports to Shareholders 337,246 17,024
Other Expenses 19,698 7,478
=============================================================================
TOTAL EXPENSES 7,194,141 501,872
Fees and Expenses Absorbed by Investment
Adviser (87,157) (123,371)
Fees and Expenses Paid Indirectly (37,932) (5,559)
=============================================================================
NET EXPENSES 7,069,052 372,942
NET INVESTMENT INCOME AND NET INCREASE IN
NET ASSETS FROM OPERATIONS $ 34,237,500 $ 1,288,977
=============================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS (CONTINUED)
INVESCO Money Market Funds, Inc.
Year Ended May 31, 1999
U.S. GOVERNMENT
MONEY
FUND
- -----------------------------------------------------------------------------
INVESTMENT INCOME
INTEREST INCOME $ 4,621,189
=============================================================================
EXPENSES
Investment Advisory Fees 450,781
Transfer Agent Fees 363,724
Administrative Fees 24,949
Custodian Fees and Expenses 16,118
Director's Fees and Expenses 12,213
Professional Fees and Expenses 15,062
Registration Fees and Expenses 48,594
Reports to Shareholders 36,456
Other Expenses 2,807
=============================================================================
TOTAL EXPENSES 970,704
Fees and Expenses Absorbed by Investment Adviser (195,925)
Fees and Expenses Paid Indirectly (7,054)
=============================================================================
NET EXPENSES 767,725
=============================================================================
NET INVESTMENT INCOME AND NET INCREASE IN
NET ASSETS FROM OPERATIONS $ 3,853,464
=============================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Cash Reserves Fund
YEAR ENDED MAY 31
- --------------------------------------------------------------------------------
1999 1998
OPERATIONS AND DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income Earned and
Distributed to Shareholders $ 34,237,500 $ 31,564,559
================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares $ 7,899,644,244 $ 5,919,135,596
Reinvestment of Distributions 30,035,522 28,060,789
================================================================================
7,929,679,766 5,947,196,385
Amounts Paid for Repurchases of Shares (7,882,192,040) (5,842,174,016)
================================================================================
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 47,487,726 105,022,369
NET ASSETS
Beginning of Period 766,670,169 661,647,800
================================================================================
End of Period $ 814,157,895 $ 766,670,169
================================================================================
--------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 7,899,644,244 5,919,135,596
Shares Issued from Reinvestment of Distributions 30,035,522 28,060,789
================================================================================
7,929,679,766 5,947,196,385
Shares Repurchased (7,882,192,040) (5,842,174,016)
================================================================================
NET INCREASE IN FUND SHARES 47,487,726 105,022,369
================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Tax-Free Money Fund
YEAR ENDED MAY 31
- --------------------------------------------------------------------------------
1999 1998
OPERATIONS AND DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income Earned and
Distributed to Shareholders $ 1,288,977 $ 1,436,671
================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares $ 277,721,719 $ 243,725,325
Reinvestment of Distributions 1,149,703 1,317,326
================================================================================
278,871,422 245,042,651
Amounts Paid for Repurchases of Shares (282,975,166) (237,818,652)
================================================================================
NET INCREASE (DECREASE) IN NET ASSETS
FROM FUND SHARE TRANSACTIONS (4,103,744) 7,223,999
NET ASSETS
Beginning of Period 54,801,124 47,577,125
================================================================================
End of Period $ 50,697,380 $ 54,801,124
================================================================================
--------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 277,721,719 243,725,325
Shares Issued from Reinvestment of Distributions 1,149,703 1,317,326
================================================================================
278,871,422 245,042,651
Shares Repurchased (282,975,166) (237,818,652)
================================================================================
NET INCREASE (DECREASE) IN FUND SHARES (4,103,744) 7,223,999
================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
U.S. Government Money Fund
YEAR ENDED MAY 31
- --------------------------------------------------------------------------------
1999 1998
OPERATIONS AND DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income Earned and
Distributed to Shareholders $ 3,853,464 $ 3,486,745
================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares $ 1,097,656,947 $ 1,190,183,900
Reinvestment of Distributions 3,244,029 2,868,947
================================================================================
1,100,900,976 1,193,052,847
Amounts Paid for Repurchases of Shares (1,083,310,126) (1,185,586,043)
================================================================================
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 17,590,850 7,466,804
NET ASSETS
Beginning of Period 73,918,283 66,451,479
================================================================================
End of Period $ 91,509,133 $ 73,918,283
================================================================================
--------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 1,097,656,947 1,190,183,900
Shares Issued from Reinvestment of Distributions 3,244,029 2,868,947
================================================================================
1,100,900,976 1,193,052,847
Shares Repurchased (1,083,310,126) (1,185,586,043)
================================================================================
NET INCREASE IN FUND SHARES 17,590,850 7,466,804
================================================================================
See Notes to Financial Statements
<PAGE>
INVESCO Notes to financial statements -- INVESCO Money
Market Funds, Inc.
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.
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.
Of the distributions paid by Tax-Free Money Fund for the year ended May 31,
1999, 99.53% were exempt from federal income taxes.
Net capital loss carryovers utilized in 1999 by U.S. Government Money Fund
amounted to $150.
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.
<PAGE>
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 the Funds' 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 paid 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. Effective May 13, 1999, each Fund
pays IFG an annual fee of $10,000, plus an additional amount computed at an
annual rate of 0.045% of average net assets.
IFG has voluntarily agreed, in some instances, to absorb certain fees and
expenses incurred by each Fund.
NOTE 3 -- TRANSACTIONS WITH AFFILIATES. Certain of the Funds' 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 are based on an annual rate equal to 50% of the sum of the
retainer fee at the time of retirement, plus the annual meeting fee.
Pension expenses for the year ended May 31, 1999, 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 $ 15,095 $ 42,570 $ 97,591
Tax-Free Money Fund 981 3,665 8,302
U.S. Government Money Fund 1,750 4,799 10,985
The independent directors have contributed to a deferred fee agreement, 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 may be invested in the shares of any of the INVESCO Funds.
<PAGE>
FINANCIAL HIGHLIGHTS
Cash Reserves Fund
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
YEAR ENDED MAY 31
- -------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value-- Beginning of Period $ 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 0.05 0.05
=============================================================================================================
Net Asset Value-- End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============================================================================================================
TOTAL RETURN 4.45% 4.82% 4.69% 5.01% 4.76%
RATIOS
Net Assets-- End of Period ($000 Omitted) $814,158 $766,670 $661,648 $587,277 $644,341
Ratio of Expenses to Average Net Assets(a) 0.90%(b) 0.91%(b) 0.86%(b) 0.87%(b) 0.75%
Ratio of Net Investment Income to
Average Net Assets(a) 4.36% 4.76 4.62% 4.86% 4.65%
(a) Various expenses of the Fund were voluntarily absorbed by IFG for the
years ended May 31, 1999, 1998, 1997, 1996 and 1995. If such expenses had not
been absorbed, ratio of expenses to average net assets would have been 0.91%,
0.93% 0.92%, 0.92% and 0.85%, respectively, and ratio of net investment income
to average net assets would have been 4.35%, 4.74%, 4.56%, 4.81% and 4.55%,
respectively.
(b) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
Tax-Free Money Fund
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
YEAR ENDED MAY 31
- -------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value-- Beginning of Period $ 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 0.03 0.03
=============================================================================================================
Net Asset Value-- End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============================================================================================================
TOTAL RETURN 2.63% 3.03% 2.90% 3.08% 2.86%
RATIOS
Net Assets-- End of Period ($000 Omitted) $ 50,697 $ 54,801 $ 47,577 $ 51,649 $ 58,780
Ratio of Expenses to Average Net Assets(a) 0.77%(b) 0.76%(b) 0.76%(b) 0.77%(b) 0.75%
Ratio of Net Investment Income to
Average Net Assets(a) 2.61% 3.01% 2.86% 3.03% 2.77%
(a) Various expenses of the Fund were voluntarily absorbed by IFG for the
years ended May 31, 1999, 1998, 1997, 1996 and 1995. If such expenses had not
been absorbed, ratio of expenses to average net assets would have been 1.02%,
1.06% 1.01%, 1.05% and 1.00%, respectively, and ratio of net investment income
to average net assets would have been 2.36%, 2.71%, 2.61%, 2.75% and 2.52%,
respectively.
(b) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
U.S. Government Money Fund
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
YEAR ENDED MAY 31
- -------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value-- Beginning of Period $ 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 0.04 0.05 0.05
=============================================================================================================
Net Asset Value-- End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============================================================================================================
TOTAL RETURN 4.36% 4.74% 4.57% 4.90% 4.66%
RATIOS
Net Assets-- End of Period ($000 Omitted) $ 91,509 $ 73,918 $ 66,451 $ 79,392 $ 60,843
Ratio of Expenses to Average Net Assets(a) 0.86%(b) 0.87%(b) 0.86%(b) 0.87%(b) 0.75%
Ratio of Net Investment Income to
Average Net Assets(a) 4.28% 4.72% 4.51% 4.78% 4.55%
(a) Various expenses of the Fund were voluntarily absorbed by IFG for the
years ended May 31, 1999, 1998, 1997, 1996 and 1995. If such expenses had not
been absorbed, ratio of expenses to average net assets would have been 1.08%,
1.12% 1.06%, 1.05% and 1.10%, respectively, and ratio of net investment income
to average net assets would have been 4.06%, 4.47%, 4.31%, 4.59% and 4.20%,
respectively.
(b) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
</TABLE>
<PAGE>
OTHER INFORMATION
UNAUDITED
On May 20, 1999, a special meeting of the shareholders of the Fund was held at
which the ten directors identified below were elected. The selection of
PricewaterhouseCoopers LLP as independent accountants (Proposal 1) and the
approval of changes to the fundamental investment restrictions identified below
(Proposal 2) were ratified. The following is a report of the votes cast:
<TABLE>
<CAPTION>
WITHHELD/
NOMINEE/PROPOSAL FOR AGAINST ABSTAIN TOTAL
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash Reserves Fund
Charles W. Brady 391,858,701 0 24,153,411 416,012,112
Fred A. Deering 391,288,148 0 24,723,964 416,012,112
Mark H. Williamson 391,288,503 0 24,723,609 416,012,112
Dr. Victor L. Andrews 391,401,045 0 24,611,067 416,012,112
Bob R. Baker 391,614,493 0 24,397,619 416,012,112
Lawrence H. Budner 391,543,348 0 24,468,764 416,012,112
Dr. Wendy Lee Gramm 391,453,949 0 24,558,163 416,012,112
Kenneth T. King 391,373,743 0 24,638,369 416,012,112
John W. McIntyre 391,338,832 0 24,673,280 416,012,112
Dr. Larry Soll 391,409,155 0 24,602,957 416,012,112
Proposal 1 387,082,874 6,499,285 22,429,951 416,012,110
Proposal 2
Modification of Fundamental
Investment Restrictions on:
a --Issuer diversification 357,521,984 22,146,340 36,343,788 416,012,112
b --Industry concentration 357,533,437 22,134,887 36,343,788 416,012,112
c --Underwriting securities 357,494,754 22,173,570 36,343,788 416,012,112
d --Borrowing and elimination
of restriction on pledging
assets 357,198,597 22,469,727 36,343,788 416,012,112
e --Issuance of senior securities 357,415,375 22,252,949 36,343,788 416,012,112
f --Loans 357,152,606 22,515,718 36,343,788 416,012,112
g --Investing in commodoties
and elimination of Tax-Free
Money Fund's fundamental
restriction on oil and gas
investments 357,279,200 22,389,124 36,343,788 416,012,112
h --Real estate investments 357,495,311 22,173,013 36,343,788 416,012,112
i --Investing in another
investment company 357,304,957 22,363,367 36,343,788 416,012,112
Elimination of Fundamental
Investment Restrictions on:
j -- Short sales and margin
purchases 357,198,442 22,469,882 36,343,788 416,012,112
k --Investments for the purpose
of exercising control 357,272,958 22,395,366 36,343,788 416,012,112
</TABLE>
<PAGE>
OTHER INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
WITHHELD/
NOMINEE/PROPOSAL FOR AGAINST ABSTAIN TOTAL
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash Reserves Fund (continued)
l -- Purchasing restricted
securities 357,233,497 22,434,827 36,343,788 416,012,112
m --Fund ownership of securities
of issuers also owned by
directors and officers of each
Fund or its investment advisor
(Cash Reserves Fund and
Tax-Free Money Fund only) 357,186,830 22,481,494 36,343,788 416,012,112
n --Investing in oil and gas
programs and other mineral
leases or programs (Cash
Reserves Fund only) 357,249,483 22,418,841 36,343,788 416,012,112
o --Investing in securities of
newly-formed issuers (Cash
Reserves Fund and Tax-Free
Money Fund only) 357,228,375 22,439,949 36,343,788 416,012,112
p --Purchasing equity securities
and securities convertible into
equity securities (Cash
Reserves Fund and Tax-Free
Money Fund only) 357,407,071 22,261,253 36,343,788 416,012,112
q --Joint trading activities,
purchase of warrants and
certain other investment
activities (Cash Reserves
Fund only) 357,280,786 22,387,538 36,343,788 416,012,112
Tax-Free Money Fund
Charles W. Brady 28,446,331 0 1,107,469 29,553,800
Fred A. Deering 28,441,870 0 1,111,930 29,553,800
Mark H. Williamson 28,393,342 0 1,160,458 29,553,800
Dr. Victor L. Andrews 28,451,947 0 1,101,853 29,553,800
Bob R. Baker 28,217,543 0 1,336,257 29,553,800
Lawrence H. Budner 28,455,561 0 1,098,239 29,553,800
Dr. Wendy Lee Gramm 28,454,574 0 1,099,226 29,553,800
Kenneth T. King 28,449,246 0 1,104,554 29,553,800
John W. McIntyre 28,452,438 0 1,101,362 29,553,800
Dr. Larry Soll 28,454,129 0 1,099,671 29,553,800
Proposal 1 28,570,834 268,969 713,996 29,553,799
</TABLE>
<PAGE>
OTHER INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
WITHHELD/
NOMINEE/PROPOSAL FOR AGAINST ABSTAIN TOTAL
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax-Free Money Fund (continued)
Proposal 2
Modification of Fundamental
Investment Restrictions on:
a --Issuer diversification 25,471,538 2,526,936 1,555,326 29,553,800
b --Industry concentration 25,471,538 2,526,936 1,555,326 29,553,800
c --Underwriting securities 25,413,174 2,585,300 1,555,326 29,553,800
d --Borrowing and elimination
of restriction on pledging assets 25,417,950 2,580,524 1,555,326 29,553,800
e --Issuance of senior securities 25,469,742 2,528,732 1,555,326 29,553,800
f --Loans 25,427,775 2,570,699 1,555,326 29,553,800
g --Investing in commodoties
and elimination of Tax-Free
Money Fund's fundamental
restriction on oil and gas
investments 25,469,742 2,528,732 1,555,326 29,553,800
h --Real estate investments 25,411,378 2,587,096 1,555,326 29,553,800
i --Investing in another
investment company 25,417,950 2,580,524 1,555,326 29,553,800
Elimination of Fundamental
Investment Restrictions on:
j -- Short sales and margin
purchases 25,427,775 2,570,699 1,555,326 29,553,800
k --Investments for the purpose
of exercising control 25,429,571 2,568,903 1,555,326 29,553,800
l -- Purchasing restricted
securities 25,429,571 2,568,903 1,555,326 29,553,800
m --Fund ownership of securities
of issuers also owned by
directors and officers of each
Fund or its investment advisor
(Cash Reserves Fund and
Tax-Free Money Fund only) 25,471,538 2,526,936 1,555,326 29,553,800
n --Investing in oil and gas
programs and other mineral
leases or programs (Cash
Reserves Fund only) 25,471,538 2,526,936 1,555,326 29,553,800
o --Investing in securities of
newly-formed issuers (Cash
Reserves Fund and Tax-Free
Money Fund only) 25,429,571 2,568,903 1,555,326 29,553,800
</TABLE>
<PAGE>
OTHER INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
WITHHELD/
NOMINEE/PROPOSAL FOR AGAINST ABSTAIN TOTAL
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax-Free Money Fund (continued)
p --Purchasing equity securities
and securities convertible into
equity securities (Cash Reserves
Fund and Tax-Free Money Fund
only) 25,429,571 2,568,903 1,555,326 29,553,800
q --Joint trading activities,
purchase of warrants and
certain other investment
activities (Cash Reserves Fund
only) 25,471,538 2,526,936 1,555,326 29,553,800
U.S. Government Money Fund
Charles W. Brady 46,224,825 0 4,892,521 51,117,346
Fred A. Deering 46,073,967 0 5,043,379 51,117,346
Mark H. Williamson 46,034,998 0 5,082,348 51,117,346
Dr. Victor L. Andrews 46,254,401 0 4,862,945 51,117,346
Bob R. Baker 46,054,541 0 5,062,805 51,117,346
Lawrence H. Budner 46,300,269 0 4,817,077 51,117,346
Dr. Wendy Lee Gramm 46,144,730 0 4,972,616 51,117,346
Kenneth T. King 46,227,079 0 4,890,267 51,117,346
John W. McIntyre 46,146,471 0 4,970,875 51,117,346
Dr. Larry Soll 46,153,026 0 4,964,320 51,117,346
Proposal 1 47,065,640 2,126,696 1,925,008 51,117,344
Proposal 2
Modification of Fundamental
Investment Restrictions on:
a --Issuer diversification 37,577,383 9,338,016 4,201,947 51,117,346
b --Industry concentration 37,577,383 9,338,016 4,201,947 51,117,346
c --Underwriting securities 37,577,383 9,338,016 4,201,947 51,117,346
d --Borrowing and elimination
of restriction on pledging assets 37,544,719 9,370,680 4,201,947 51,117,346
e --Issuance of senior securities 37,577,383 9,338,016 4,201,947 51,117,346
f --Loans 37,555,538 9,359,861 4,201,947 51,117,346
g --Investing in commodoties
and elimination of Tax-Free
Money Fund's fundamental
restriction on oil and gas
investments 37,556,386 9,359,013 4,201,947 51,117,346
h --Real estate investments 37,577,383 9,338,016 4,201,947 51,117,346
</TABLE>
<PAGE>
OTHER INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
WITHHELD/
NOMINEE/PROPOSAL FOR AGAINST ABSTAIN TOTAL
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government Money Fund (continued)
i -- Investing in another
investment company 37,567,204 9,348,195 4,201,947 51,117,346
Elimination of Fundamental
Investment Restrictions on:
j -- Short sales and margin
purchases 37,509,124 9,406,275 4,201,947 51,117,346
k --Investments for the purpose
of exercising control 37,577,383 9,338,016 4,201,947 51,117,346
l -- Purchasing restricted
securities 37,567,204 9,348,195 4,201,947 51,117,346
m --Fund ownership of securities
of issuers also owned by
directors and officers of each
Fund or its investment advisor
(Cash Reserves Fund and
Tax-Free Money Fund only) 37,572,582 9,342,817 4,201,947 51,117,346
n --Investing in oil and gas
programs and other mineral
leases or programs (Cash
Reserves Fund only) 37,577,383 9,338,016 4,201,947 51,117,346
o --Investing in securities of
newly-formed issuers (Cash
Reserves Fund and Tax-Free
Money Fund only) 37,577,383 9,338,016 4,201,947 51,117,346
p --Purchasing equity securities
and securities convertible into
equity securities (Cash Reserves
Fund and Tax-Free Money
Fund only) 37,577,383 9,338,016 4,201,947 51,117,346
q --Joint trading activities,
purchase of warrants and
certain other investment
activities (Cash Reserves
Fund only) 37,577,383 9,338,016 4,201,947 51,117,346
</TABLE>
<PAGE>
INVESCO Family of Funds
<TABLE>
<CAPTION>
Newspaper
Fund Name Fund Code Ticker Symbol Abbreviation
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
International
International Blue Chip 09 IIBCX ItlBlChp
Pacific Basin 54 FPBSX PcBas
European 56 FEURX Europ
Latin American Growth 34 IVSLX LtnAmerGr
- -------------------------------------------------------------------------------------------
Sector
Energy 50 FSTEX Enrgy
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 Communications 39 ISWCX WldCom
(as of 7/30/99, Telecommunications) (as of 8/1/99 Telecomm)
- -------------------------------------------------------------------------------------------
Stock
Growth & Income 21 IVGIX Gro&Inc
INVESCO Endeavor 61 IVENX Endeavor
Blue Chip Growth 10 FLRFX BlChpGro
Dynamics 20 FIDYX Dynm
Small Company Growth 60 FIEGX SmCoGth
Value Equity 46 FSEQX ValEq
S&P 500 Index Fund-Class II 23 ISPIX SP500II
- -------------------------------------------------------------------------------------------
Combination Stock & Bond
Industrial Income 15 FIIIX IndInc
(as of 7/30/99, Equity Income) (as of 8/1/99, EquityInc)
Total Return 48 FSFLX TotRtn
Balanced 71 IMABX Bal
- -------------------------------------------------------------------------------------------
Bond
U.S. Government Securities 32 FBDGX USGvt
Select Income 30 FBDSX SelInc
High Yield 31 FHYPX HiYld
Tax-Free Bond (formerly,
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
Money Market Reserve 96 IMRXX INVESCOMMR
Tax-Exempt Reserve 95 ITTXX INVESCOTTE
</TABLE>
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 ICON]
INVESCO
YOU SHOULD
KNOW WHAT
INVESCO KNOWS(TM)
We're easy to stay in touch with:
Investor Services: 1-800-525-8085
PAL(R), your personal account line: 1-800-424-8085
On the World Wide Web: www.invesco.com
In Denver, visit one of our convenient Investor Centers:
Cherry Creek, 3003 East Third Avenue, Suite 1
Denver Tech Center, 7800 East Union Avenue, Lobby Level
INVESCO Distributors, Inc.,(SM) Distributor
Post Office Box 173706
Denver, CO 80217-3706
This information must be preceded or accompanied by a current prospectus.
AMF 9013 6/99
