KNOWLEDGE o DISCIPLINE o SERVICE o CHOICE
--------------------------------------------------------------------------------
YOU SHOULD KNOW WHAT INVESCO KNOWS (R)
--------------------------------------------------------------------------------
INVESCO MONEY MARKET FUNDS, INC.
CASH RESERVES FUND
TAX-FREE MONEY FUND
U.S. GOVERNMENT MONEY FUND
ANNUAL
ANNUAL REPORT | May 31, 2000 [INVESCO ICON] INVESCO FUNDS
<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 would be useful
to reiterate our approach to money market management.
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. (Checks subject to a
minimum amount of $2,500 or more. Shares of the fund will be redeemed to
cover payment of the check.)
o TAX-FREE MONEY FUND helps investors shelter earnings 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 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. Of INVESCO's five money market fund
alternatives, this offers the highest credit quality. (An investment in
this fund is neither backed nor guaranteed by the U.S. government.)
o For institutions and individuals with more than $100,000 to invest, INVESCO
Treasurer's Series Funds Inc., TREASURER'S MONEY MARKET RESERVE FUND
and TREASURER'S TAX-EXEMPT RESERVE FUND, provide a potentially low-cost,
higher-yield option. The two Treasurer's Funds have an expense ratio fixed
at 0.25%, which is extremely competitive. The ranking firm IBC recently
placed Treasurer's Money Market Reserve Fund seventh in its category based on
seven-day yield.* Of course, past performance is no guarantee of future
results.
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 neither 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.
--------------------------------------------------------------------------------
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,
AND TREASURER'S MONEY MARKET RESERVE FUND SINCE MID-1999.
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, AND TREASURER'S
TAX-EXEMPT RESERVE FUND SINCE MID-1999.
*IBC MONEY FUND REPORT, June 2000. IBC is an independent mutual fund analyst
specializing in money market funds. INVESCO Treasurer's Money Market Reserve
ranked #7 out of 262 non-government money funds based on its 7-day yield as of
June 20, 2000. Past performance is no guarantee of future results.
<PAGE>
INVESCO | ANNUAL REPORT | MAY 31, 2000
MARKET HEADLINES: JUNE 1999 TO MAY 2000
For most of the past year, the major story in the financial markets has been the
tremendous disparity between the performance of New Economy growth stocks --
particularly technology, telecommunications, and media companies -- and lagging
Old Economy shares in sectors such as financial services, industrial products
and basic materials. Against this backdrop, the technology-intensive Nasdaq
Composite far outpaced the more Old Economy-based S&P 500 Index and Dow Jones
Industrial Average.* This dichotomy persisted through the first two months of
2000 despite the fact that many New Economy shares were trading at lofty
valuations that appeared harder to justify in a rising interest rate
environment.
At the same time, there were signs that the "virtuous economy" -- neither too
hot nor too cold -- was finally starting to heat up. Labor markets remained
tight and wage pressures were simmering, while consumers were studying the
impressive balances on their investment statements and spending as never before.
Meanwhile, economies in Europe and Asia were picking up steam, and oil prices
surged to new highs. With the global economy firing on all cylinders, inflation
became the dominant concern. The Federal Reserve responded to these pressures by
tightening credit conditions. Between June of 1999 and May of 2000, the central
bank raised short-term interest rates six times -- for a total of 1.75% -- the
latest a 0.50% rate increase in May.
The threat of higher interest rates kept financial markets volatile, and put
upward pressure on the short and intermediate bond rates. At the same time,
technical factors and the government's efforts to pay down long-term debt sent
long-term Treasury bond yields lower. The result was an inverted yield curve,
which is an unusual situation where short-term rates are higher than long-term
rates.
For a time, it appeared that growth stocks really did enjoy a Teflon(TM)
coating, as valuations on many technology, telecommunication and biotechnology
stocks surged to new highs despite rising interest rates and heightened economic
uncertainty. Yet the New Economy onslaught hit a wall in late March, as interest
rate fears and rumblings out of Washington triggered a sell-off in biotechnology
stocks that quickly spread to other New Economy stalwarts, sending the Nasdaq
Composite into a tailspin.
The market shook off its malaise in late May, spurred on by signs that the
economy was starting to cool. For one thing, job growth has slowed dramatically,
with non-farm payrolls losing 126,000 jobs in May (excluding census workers).
Vehicle and home sales also fell sharply in May, while chain store receipts came
in weaker than expected. More importantly, wage pressures have remained subdued,
as hourly wages crept up at their slowest pace in the last four years. Hopes
that the Fed might halt its interest rate campaign triggered a strong
post-Memorial Day rally that sent the Nasdaq to its biggest percentage increase
ever. The Dow, S&P 500 and Russell 2000 indexes also turned in solid gains.
The economic expansion appears to be transitioning into a new phase of more
moderate growth and somewhat higher inflation. While the Federal Reserve has no
desire to trigger a recession, it will remain vigilant as long as inflation
remains a risk. Consequently, we caution that financial markets will likely
remain volatile, and that it will be difficult for equities to achieve the kind
of gains we saw last year. Nonetheless, we are confident that this type of
environment will provide opportunities for investors, such as ourselves, who
rely on bottom-up research to identify solid companies that can perform well in
any kind of market environment.
* THE S&P 500 IS AN UNMANAGED INDEX REFLECTING PERFORMANCE OF THE BROAD DOMESTIC
STOCK MARKET. THE DOW JONES INDUSTRIAL AVERAGE REFLECTS LARGE-CAPITALIZATION
STOCKS. THE RUSSELL 2000 IS AN UNMANAGED INDEX REFLECTING THE PERFORMANCE OF
SMALL-CAP STOCKS.
<PAGE>
STATEMENT OF INVESTMENT SECURITIES
INVESCO MONEY MARKET FUNDS, INC.
MAY 31, 2000
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE% AMOUNT VALUE
CASH RESERVES FUND
100.00 SHORT-TERM INVESTMENTS
99.56 COMMERCIAL PAPER
2.93 AUTO PARTS
PACCAR Financial, 6/14/2000 6.59 $ 25,000,000 $ 24,941,506
================================================================================
18.89 AUTOMOBILES
Daimler-Benz North America, 6/2/2000 6.48 25,000,000 25,000,000
Ford Motor Credit
6/6/2000 6.49 22,500,000 22,500,000
6/8/2000 6.50 22,500,000 22,500,000
General Motor
6/12/2000 6.67 20,000,000 19,959,897
6/15/2000 6.62 25,000,000 24,936,714
General Motors Acceptance
6/30/2000 6.21 24,000,000 24,000,000
8/15/2000 6.84 22,000,000 21,694,935
================================================================================
160,591,546
4.95 BANKS
Wells Fargo & Co
6/12/2000 6.59 30,000,000 29,940,536
6/30/2000 6.62 12,250,000 12,185,958
================================================================================
42,126,494
5.29 CONSUMER FINANCE
American Express Credit, 6/26/2000 6.53 45,000,000 45,000,000
================================================================================
3.53 ELECTRIC UTILITIES
National Rural Utilities Cooperative
Finance Medium-Term Notes, Series C,
8/2/2000 6.20 30,000,000 30,000,000
================================================================================
7.06 ELECTRICAL EQUIPMENT
General Electric, 6/21/2000 6.52 45,000,000 45,000,000
General Electric Capital Services,
6/26/2000 6.53 15,000,000 15,000,000
================================================================================
60,000,000
4.04 ELECTRONICS-- SEMICONDUCTOR
Motorola Inc
6/29/2000 6.22 24,500,000 24,383,594
6/29/2000 6.25 10,000,000 9,952,266
================================================================================
34,335,860
5.53 FINANCIAL
Heller Financial, 6/5/2000 6.57 47,000,000 47,000,000
================================================================================
4.00 INSURANCE
American General
6/8/2000 6.52 9,000,000 9,000,000
6/30/2000 6.49 25,000,000 25,000,000
================================================================================
34,000,000
<PAGE>
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE% AMOUNT VALUE
17.04 INVESTMENT BANK/BROKER FIRM
Bear Stearns, 6/28/2000 6.29 $ 35,000,000 $ 34,837,879
Goldman Sachs Group LP
6/19/2000 6.63 40,000,000 39,869,647
8/15/2000 6.86 6,500,000 6,409,595
Merrill Lynch & Co, 6/23/2000 6.61 23,000,000 22,908,673
Morgan Stanley Dean Witter & Co
6/20/2000 6.60 11,000,000 10,962,350
6/22/2000 6.60 30,000,000 29,886,510
================================================================================
144,874,654
7.06 MACHINERY
Deere & Co, 6/13/2000 6.54 30,000,000 30,000,000
Deere (John) Capital, 6/20/2000 6.53 30,000,000 30,000,000
================================================================================
60,000,000
5.04 REAL ESTATE RELATED
Weyerhaeuser Real Estate
6/14/2000 6.63 26,000,000 25,938,784
6/15/2000 6.65 17,000,000 16,956,770
================================================================================
42,895,554
1.41 RETAIL
Sears Roebuck Acceptance, 6/6/2000 6.64 12,000,000 12,000,000
================================================================================
5.29 SERVICES
Hertz Corp
6/7/2000 6.51 15,000,000 15,000,000
6/16/2000 6.53 30,000,000 30,000,000
================================================================================
45,000,000
4.68 TELECOMMUNICATIONS-- LONG DISTANCE
GTE Corp
6/20/2000 6.69 10,000,000 9,965,323
6/27/2000 6.67 30,000,000 29,858,157
================================================================================
39,823,480
2.82 TELEPHONE
US WEST Communications
6/1/2000 6.52 17,000,000 17,000,000
6/7/2000 6.64 7,000,000 6,992,371
================================================================================
23,992,371
TOTAL COMMERCIAL PAPER (Amortized Cost $846,581,465) 846,581,465
================================================================================
0.44 REPURCHASE AGREEMENTS
Repurchase Agreement with State
Street dated 5/31/2000 due
6/1/2000 at 6.300%, repurchased
at $3,775,661, (Collateralized by
US Treasury Inflationary Index
Bonds, due 4/15/2028 at 3.625%,
value $4,081,670)(Cost $3,775,000) 3,775,000 3,775,000
================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Amortized Cost $850,356,465)(a) $ 850,356,465
================================================================================
<PAGE>
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE% AMOUNT VALUE
TAX-FREE MONEY FUND
100.00 SHORT-TERM INVESTMENTS
100.00 MUNICIPAL NOTES(b)
1.17 ARIZONA
Arizona Hlth Facils Auth (Arizona
Vol Hosp Fedn) (FGIC Insured),
AR Mode Bonds, 1985 Series A,
10/1/2015 4.30 $ 480,000 $ 480,000
================================================================================
1.85 CALIFORNIA
Los Angeles Regl Airports Impt,
California (American Airlines/
Los Angeles Intl Airport), AR,
Facils Sublease FDR, Issue 1984
(LOC - Societe Generale), Series
LAX 2, 12/1/2025 4.40 155,000 155,000
(LOC - Wachovia Bank), Series B,
12/1/2024 4.40 200,000 200,000
(LOC - Wachovia Bank), Series D,
12/1/2024 4.40 300,000 300,000
(LOC - Wachovia Bank), Series G,
12/1/2024 4.40 100,000 100,000
================================================================================
755,000
3.64 COLORADO
Archuleta Cnty Pagosa Area Wtr &
Santn Dist, Colorado (MBIA Insured),
FR, Enterprise Rev, Series 2000,
12/1/2000 4.27 160,000 160,770
Colorado Student Ln Oblig Auth
(AMBAC Insured), AR, Sr Lien Student
Ln Rev, 1999 Series A-1,
9/1/2002(c) 4.15 500,000 500,000
Denver City & Cnty, Colorado (Univ of
Denver Proj), FR, IDR, Series 1991,
3/1/2016 4.18 600,000 626,090
Univ of Colorado Hosp Auth, Colorado
(AMBAC Insured), FR, Hosp Rev, Series
1992A, 11/15/2000 4.25 200,000 201,018
================================================================================
1,487,878
0.35 DISTRICT OF COLUMBIA
District of Columbia (Washington D.C.)
(Howard Univ Issue), FR, Univ Rev,
Series 1990A, 10/1/2020 3.95 140,000 144,259
================================================================================
2.84 FLORIDA
Dade Cnty School Dist, Florida (AMBAC
Insured), FR, Gen Oblig Ref School,
Series 1993, 7/15/2000 3.60 250,000 250,336
St Lucie Cnty, Florida (Savannah Hosp
Proj)(LOC - Bank of America), FRD,
IDR, Series 1985, 11/1/2015 4.30 910,000 910,000
================================================================================
1,160,336
10.04 GEORGIA
DeKalb Cnty Hosp Auth, Georgia (DeKalb
Med Ctr Proj) (LOC - SunTrust Bank),
AR, RAC, Series 1993B, 9/1/2009 4.40 1,060,000 1,060,000
Series 1999A, 12/1/2024 4.40 1,000,000 1,000,000
DeKalb Private Hosp Auth, Georgia
(Egleston Children's Hosp at Emory
Univ Proj)(LOC - SunTrust Bank),
VRD, RAC, Series 1994B, 12/1/2017 4.10 400,000 400,000
Macon-Bibb Cnty Hosp Auth, Georgia
(Med Ctr of Cent Georgia) (LOC -
SunTrust Bank), AR, RAC, Series
1994, 4/1/2007 4.40 1,145,000 1,145,000
<PAGE>
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE% AMOUNT VALUE
Savannah Econ Dev Auth, Georgia
(Home Depot Proj) (LOC -
SunTrust Bank), AR, Exmp Facil
Rev, Series 1995B, 8/1/2025 4.40 $ 500,000 $ 500,000
================================================================================
4,105,000
2.45 IDAHO
Idaho, FR, TAN, Series 1999, 6/30/2000 3.40 1,000,000 1,000,651
================================================================================
3.26 ILLINOIS
Illinois Dev Fin Auth (Kindlon
Partners Proj) (LOC - LaSalle Natl
Bank), VR, Indl Proj Rev, Series
1991, 5/1/2006 4.23 500,000 500,000
Illinois Dev Fin Auth (6 West
Hubbard Street Proj) (LOC - LaSalle
Natl Bank), F/FR, IDR, Series 1986,
12/1/2016 4.70 835,000 835,000
================================================================================
1,335,000
7.33 INDIANA
Daviess Cnty, Indiana (Perdue Farms/
Shenandoah Valley Farms Facil) (LOC
- Bank of America), V/FRD, Econ Dev
Rev, 1987 Issue, 9/1/2007 4.05 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 4.10 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 4.22 500,000 500,000
================================================================================
3,000,000
3.91 IOWA
Iowa Fin Auth (Burlington Med Ctr)
(FSA Insured), AR, Demand Rev,
Series 1997, 6/1/2027 4.50 1,000,000 1,000,000
Iowa Fin Auth (Wheaton Franciscan Svcs)
(MBIA Insured), VRD, Rev, Series
1998B, 8/15/2024 3.95 600,000 600,000
================================================================================
1,600,000
2.44 KANSAS
Fairway, Kansas (J C Nichols Proj)
(LOC - Prin Mutual Ins), FRD, Indl
Rev, Series 1984, 11/1/2014 4.73 500,000 500,000
Spring Hill, Kansas (Abrasive Engr
& Mfg Proj) (LOC - LaSalle Natl
Bank), VR, Indl Rev, Series 1996,
9/1/2016 4.37 500,000 500,000
================================================================================
1,000,000
0.74 KENTUCKY
Commonwealth of Kentucky (Proj #52),
FR, State Ppty & Bldgs Commn Rev,
Series 1991, 8/1/2000 4.15 300,000 300,906
================================================================================
2.32 LOUISIANA
Caddo Parish School Dist, Louisiana
(MBIA Insured) FR, Gen Oblig School,
Series 2000, 3/1/2001(d) 4.24 325,000 335,992
Calcasieu Parish Mem Hosp Svc Dist,
Louisiana (Lake Charles Mem Hosp
Proj) (Connie Lee Insured), FR, Hosp
Rev, Series 1992A, 12/1/2000 4.30 220,000 221,379
New Orleans, Louisiana (FSA Insured),
FR, Pub Impt, Issue of 1999,
11/1/2000 3.80 390,000 392,691
================================================================================
950,062
<PAGE>
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE% AMOUNT VALUE
2.53 MASSACHUSETTS
Commonwealth of Massachusetts,
FR, Gen Oblig, Cons Ln of 1990,
Series C, 12/1/2010 4.21 $ 500,000 $ 506,777
Commonwealth of Massachusetts
(MBIA Insured), FR, Gen Oblig,
Cons Ln of 1989, Series D,
10/1/2000 4.23 200,000 201,737
Massachusetts Wtr Resources Auth
(FGIC Insured), FR, Prerefunded
Gen Rev, 1996 Series A, 11/1/2000 4.15 325,000 327,432
================================================================================
1,035,946
3.72 MICHIGAN
Detroit, Michigan (MBIA Insured), AR,
Sewage Disp System Rev Ref, Series
1998-B, 7/1/2023 3.95 1,000,000 1,000,000
Michigan Hosp Fin Auth (Sisters of
Mercy Hlth), FR, Hosp Rev, 1991
Series J, 2/15/2018 4.38 500,000 520,330
================================================================================
1,520,330
1.75 MINNESOTA
St Louis Park, Minnesota (Methodist
Hosp Proj) (AMBAC Insured), FR,
Hosp Facils Rev, Series 1990-C,
7/1/2015 4.20 700,000 715,634
================================================================================
4.65 MISSOURI
Columbia, Missouri (LOC - Toronto-
Dominion Bank), VR, Spl Oblig Ins
Reserve, Series 1988A, 6/1/2008 4.10 1,900,000 1,900,000
================================================================================
0.86 NEBRASKA
Hamilton Cnty, Nebraska (Iams Co
Proj) (LOC - Bank of America), VR,
IDR Ref, Series 1990, 7/1/2005 4.45 350,000 350,000
================================================================================
0.49 NEVADA
Clark Cnty School Dist, Nevada (MBIA
Insured), FR, Ltd Tax Gen Oblig
School Impt, Series May 1, 1995A,
6/15/2000 3.96 200,000 200,077
================================================================================
1.22 NEW MEXICO
New Mexico Hwy Commn (FSA Insured),
ATS, Sub Lien Tax Hwy Rev, Series
1996, 6/15/2011 4.10 500,000 500,000
================================================================================
4.40 NEW YORK
Monroe Cnty Indl Dev Agency, New York
(Ron Ink Proj)(LOC - LaSalle Natl
Bank), VR, IDR, Series 1996,
7/1/2013 4.61 1,400,000 1,400,000
Phelps-Clifton Springs Cent School
Dist, New York (Ontario, Seneca &
Wayne Cntys) (AMBAC Insured),
FR, Gen Oblig, Series 1997,
6/15/2000 4.20 400,000 400,206
================================================================================
1,800,206
5.40 NORTH CAROLINA
Charlotte, North Carolina, FR, Wtr
& Swr Gen Oblig, Series 1991,
2/1/2007 4.20 200,000 206,860
Charlotte, North Carolina (MBIA
Insured), VRD, Airport Rev, Series
1999D, 7/1/2029(c) 4.05 500,000 500,000
North Carolina Edl Facils Fin Agency
(Bowman Gray School of Medicine
Proj) (LOC - Wachovia Bank), VR,
Rev, Series 1990, 9/1/2020 4.25 500,000 500,000
<PAGE>
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE% AMOUNT VALUE
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 4.10 $ 1,000,000 $ 1,000,000
================================================================================
2,206,860
2.44 OHIO
Ohio Pub Facils Commn (MBIA Insured),
FR, Mental Hlth Cap Facils, Series
II-1993B, 6/1/2000 3.38 500,000 500,000
Summit Cnty, Ohio (Akron Goodwill Inds
Proj)(LOC - Bank One), ARD, Rev,
Series 2000, 12/1/2029 4.30 500,000 500,000
================================================================================
1,000,000
1.29 OREGON
Oregon Bd Bank (Oregon Econ & Cmnty
Dev Dept) (MBIA Insured), FR, Rev,
2000 Series A, 1/1/2001 4.30 525,000 527,805
================================================================================
4.40 PENNSYLVANIA
Delaware Valley Regl Fin Auth,
Pennsylvania (Bucks, Chester,
Delaware & Montgomery Cntys)
(LOC - Credit Suisse First Boston),
AR, Loc Govt Rev, Series 1985D,
12/1/2020 4.10 1,800,000 1,800,000
================================================================================
1.61 SOUTH CAROLINA
Anderson Cnty, South Carolina (Belton
Inds Proj)(LOC - Bank of America),
AR, Indl Rev, Series 1991A, 7/1/2004 4.55 400,000 400,000
Columbia, South Carolina, FR, Wtrwks
& Swr System Rev, Series 1991,
2/1/2012 4.16 250,000 259,614
================================================================================
659,614
1.96 TENNESSEE
Greeneville Hlth & Edl Facils Brd,
Tennessee (Laughlin Mem Hosp Proj)
(LOC - NationsBank of Tennessee),
VRD, Rev, Series 1992, 10/1/2014 4.40 800,000 800,000
================================================================================
14.33 TEXAS
Austin, Texas, FR, Util System Rev,
Series 1986A, 11/15/2016 4.27 500,000 517,197
Deer Park Indpt School Dist, Texas
(Harris Cnty)(PSFG Insured), FR,
School Bldg, Series 1998, 2/15/2001 4.22 500,000 506,926
Denton, Texas (Denton Cnty) (FSA
Insured), FR, Gen Oblig, Series
2000, 2/15/2001(d) 4.48 350,000 353,801
Grandbury Indpt School Dist, Texas
(Hood, Johnson, Parker & Somervell
Cntys) (PSFG Insured), FR, Unltd Tax
School Bldg & Ref, Series 1999,
8/1/2000 3.50 470,000 471,143
Harlingen Cons Indpt School Dist,
Texas (Cameron Cnty) (PSFG Insured),
FR, Unltd Tax School Bldg,
Series 1999, 8/15/2000 3.86 500,000 503,586
Houston, Texas (MBIA Insured), FR, Wtr
& Swr System Prior Lien Rev, Series
1990, 12/1/2010 4.35 500,000 517,138
<PAGE>
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE% AMOUNT VALUE
Lone Star Airport Impt Auth,
Texas (American Airlines
Proj) (LOC - Royal Bank of
Canada), V/FRD, Multiple Mode
Rev,
1984 Series A-2, 12/1/2014 4.40 $ 400,000 $ 400,000
1984 Series A-3, 12/1/2014 4.40 200,000 200,000
1984 Series A-4, 12/1/2014 4.40 200,000 200,000
1984 Series B-2, 12/1/2014 4.40 900,000 900,000
Longview, Texas (Gregg & Harrison
Cntys) (FSA Insured), FR, Gen
Oblig, Series 1999, 6/1/2000 3.85 400,000 400,000
Pasadena, Texas (Harris Cnty) (FSA
Insured), FR, Tax & Rev Ctfs
Oblig, Series 1999, 10/1/2000 4.01 390,000 393,161
Texas, FR, TRAN, Rev, Series 1999A,
8/31/2000 3.70 500,000 500,961
================================================================================
5,863,913
0.73 UTAH
Tremonton, Utah (Box Elden Cnty)
(La-Z-Boy Chair Proj) (LOC - NBD
Bank), VRD, IDR, Series 1990,
6/1/2026 4.22 300,000 300,000
================================================================================
1.22 VERMONT
Vermont Edl & Hlth Bldgs Fing Agency
(Fletcher Allen Hlth Care Proj)
(AMBAC Insured), VR, Hosp Rev,
Series 2000B, 12/1/2030 4.05 500,000 500,000
================================================================================
2.22 WASHINGTON
Washington Pub Pwr Supply System
(Nuclear Proj #1) (MBIA Insured),
FR, Ref Rev, Series 1993A,
7/1/2000 3.80 500,000 500,517
(Nuclear Proj #2), FR, Ref Rev
Series 1990A, 7/1/2004 3.60 400,000 409,224
================================================================================
909,741
2.44 WYOMING
Sweetwater Cnty, Wyoming (PacifiCorp
Proj) (LOC - Credit Suisse First
Boston), VR, PCR Ref, Series 1990A,
7/1/2015 4.05 1,000,000 1,000,000
================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Amortized Cost $40,909,218)(a) $ 40,909,218
================================================================================
U.S. GOVERNMENT MONEY FUND
100.00 SHORT-TERM INVESTMENTS
100.00 US GOVERNMENT AGENCY OBLIGATIONS
Fannie Mae
6/29/2000 6.45 $ 20,000,000 $ 19,901,516
6/29/2000 6.21 17,500,000 17,417,064
Federal Home Loan Bank
6/1/2000 6.39 14,865,000 14,865,000
6/2/2000 6.12 10,000,000 9,998,324
Freddie Mac
6/27/2000 6.47 20,000,000 19,908,262
================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Amortized Cost $82,090,166)(a) $ 82,090,166
================================================================================
<PAGE>
The following acronyms may be used in portfolio descriptions:
<TABLE>
<CAPTION>
<S> <C> <C>
A/FR(e) -- Adjustable/Fixed Rate IDR -- Industrial Development Revenue
AMBAC -- American Municipal Bond Assurance Corporation LOC -- Letter of Credit
AR(e) -- Adjustable Rate MBIA -- Municipal Bond Investors
ARD(e) -- Adjustable Rate Demand Assurance Corporation
ATS(e) -- Adjustable Tender Securities PCR -- Pollution Control Revenue
FDR(e) -- Flexible Demand Revenue PSFG -- Permanent School Fund Guarantee Program
FGIC -- Financial Guaranty Insurance Company RAC -- Revenue Anticipation Certificates
F/FR -- Floating/Fixed Rate TAN -- Tax Anticipation Notes
FR -- Fixed Rate TRAN -- Tax & Revenue Anticipation Notes
FRD(e) -- Floating Rate Demand V/FRD(e) -- Variable/Fixed Rate Demand
FSA -- Financial Security Assurance VR(e) -- Variable Rate
VRD(e) -- Variable Rate Demand
</TABLE>
(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, prerefunded, 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, 2000
CASH TAX-FREE
RESERVES MONEY
FUND FUND
--------------------------------------------------------------------------------
ASSETS
Investment Securities:
At Cost(a) $ 850,356,465 $ 40,909,218
================================================================================
At Value(a) $ 850,356,465 $ 40,909,218
Cash 1,234,452 144,429
Receivables:
Fund Shares Sold 70,504,129 156,847
Interest 1,152,090 431,681
Prepaid Expenses and Other Assets 135,038 40,498
================================================================================
TOTAL ASSETS 923,382,174 41,682,673
================================================================================
LIABILITIES
Payables:
Distributions to Shareholders 27,832 4,423
Investment Securities Purchased 0 1,223,840
Fund Shares Repurchased 6,877,639 41,501
Accrued Distribution Expenses - Class C 3,757 --
Accrued Expenses and Other Payables 151,339 16,533
================================================================================
TOTAL LIABILITIES 7,060,567 1,286,297
================================================================================
NET ASSETS AT VALUE, Applicable to
Shares Outstanding $ 916,321,607 $ 40,396,376
================================================================================
NET ASSETS AT VALUE:
Investor Class $ 912,135,125 $ 40,396,376
================================================================================
Class C $ 4,186,482 $ --
================================================================================
Shares Outstanding(b)
Investor Class 912,135,125 40,396,376
Class C 4,186,482 --
NET ASSET VALUE, Offering and
Redemption Price per Share
Investor Class $ 1.00 $ 1.00
Class C $ 1.00 $ --
================================================================================
(a) Investment securities at cost and value at May 31, 2000 includes a
repurchase agreement of $3,775,000 for Cash Reserves Fund.
(b) The Fund has 20 billion authorized shares of common stock, par value $0.01
per share. Of such shares, 10 billion have been allocated to Cash Reserves
Fund and 1 billion to Tax-Free Money Fund: 5 billion to Cash Reserves
Fund - Investor Class and 5 billion to Cash Reserves Fund - Class C. Paid-
in capital was $916,321,607 and $40,396,376 for Cash Reserves and Tax-Free
Money Fund, respectively: $912,135,125 for Cash Reserves Fund -
Investor Class and $4,186,482 for Cash Reserves Fund - Class C.
See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
INVESCO Money Market Funds, Inc.
May 31, 2000
U.S. GOVERNMENT
MONEY
FUND
--------------------------------------------------------------------------------
ASSETS
Investment Securities:
At Cost $ 82,090,166
================================================================================
At Value $ 82,090,166
Cash 80,101
Receivables for Fund Shares Sold 4,114,028
Prepaid Expenses and Other Assets 47,818
================================================================================
TOTAL ASSETS 86,332,113
================================================================================
LIABILITIES
Payables:
Distributions to Shareholders 17,191
Fund Shares Repurchased 234,699
Accrued Expenses and Other Payables 19,836
================================================================================
TOTAL LIABILITIES 271,726
================================================================================
NET ASSETS AT VALUE, Applicable to Shares Outstanding $ 86,060,387
================================================================================
Shares Outstanding(a) 86,060,387
NET ASSET VALUE, Offering and Redemption Price per Share $ 1.00
================================================================================
(a) The Fund has 20 billion authorized shares of common stock, par value $0.01
per share. Of such shares, 1 billion has been allocated to U.S. Government
Money Fund. Paid-in-capital for U.S. Government Money Fund was $86,060,387.
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS
INVESCO Money Market Funds, Inc.
Year Ended May 31, 2000
CASH TAX-FREE
RESERVES MONEY
FUND FUND
--------------------------------------------------------------------------------
INVESTMENT INCOME
INTEREST INCOME $ 45,330,189 $ 1,518,911
================================================================================
EXPENSES
Investment Advisory Fees 3,206,744 207,298
Distribution Expenses - Class C 10,939 --
Transfer Agent Fees 3,312,772 123,690
Administrative Services Fees 371,012 28,657
Custodian Fees and Expenses 99,109 10,372
Directors' Fees and Expenses 47,462 10,509
Professional Fees and Expenses 42,641 21,899
Registration Fees and Expenses -
Investor Class 125,393 32,560
Reports to Shareholders 336,004 17,716
Other Expenses 20,407 5,756
================================================================================
TOTAL EXPENSES 7,572,483 458,457
Fees and Expenses Absorbed by
Investment Adviser (301,539) (98,939)
Fees and Expenses Paid Indirectly (66,831) (8,291)
================================================================================
NET EXPENSES 7,204,113 351,227
================================================================================
Net Investment Income and Net
Increase in Net Assets from
Operations $ 38,126,076 $ 1,167,684
================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS (CONTINUED)
INVESCO Money Market Funds, Inc.
Year Ended May 31, 2000
U.S. GOVERNMENT
MONEY
FUND
--------------------------------------------------------------------------------
INVESTMENT INCOME
INTEREST INCOME $ 4,738,394
================================================================================
EXPENSES
Investment Advisory Fees 432,748
Transfer Agent Fees 391,337
Administrative Services Fees 48,947
Custodian Fees and Expenses 14,336
Directors' Fees and Expenses 13,050
Professional Fees and Expenses 15,191
Registration Fees and Expenses 44,452
Reports to Shareholders 39,409
Other Expenses 2,793
================================================================================
TOTAL EXPENSES 1,002,263
Fees and Expenses Absorbed by Investment Adviser (256,535)
Fees and Expenses Paid Indirectly (10,746)
================================================================================
NET EXPENSES 734,982
================================================================================
NET INVESTMENT INCOME AND NET INCREASE IN
NET ASSETS FROM OPERATIONS $ 4,003,412
================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Cash Reserves Fund
<TABLE>
<CAPTION>
YEAR ENDED MAY 31
-----------------------------------------------------------------------------------------------
2000 1999
<S> <C> <C>
OPERATIONS AND DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income Earned and Distributed to Shareholders
Investor Class $ 38,074,203 $ 34,237,500
Class C 51,873 --
===============================================================================================
38,126,076 34,237,500
===============================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares
Investor Class 8,168,679,754 7,899,644,244
Class C 11,617,753 --
Reinvestment of Distributions
Investor Class 33,967,952 30,035,522
Class C 47,780 --
===============================================================================================
8,214,313,239 7,929,679,766
Amounts Paid for Repurchases of Shares
Investor Class (8,104,670,476) (7,882,192,040)
Class C (7,479,051) --
===============================================================================================
(8,112,149,527) (7,882,192,040)
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 102,163,712 47,487,726
NET ASSETS
Beginning of Period 814,157,895 766,670,169
===============================================================================================
End of Period $ 916,321,607 $ 814,157,895
===============================================================================================
-----------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold
Investor Class 8,168,679,754 7,899,644,244
Class C 11,617,753 --
Shares Issued from Reinvestment of Distributions
Investor Class 33,967,952 30,035,522
Class C 47,780 --
===============================================================================================
8,214,313,239 7,929,679,766
Shares Repurchased
Investor Class (8,104,670,476) (7,882,192,040)
Class C (7,479,051) --
===============================================================================================
(8,112,149,527) (7,882,192,040)
NET INCREASE IN FUND SHARES 102,163,712 47,487,726
===============================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Tax-Free Money Fund
YEAR ENDED MAY 31
-----------------------------------------------------------------------------------------------
2000 1999
OPERATIONS AND DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income Earned and
Distributed to Shareholders $ 1,167,684 $ 1,288,977
===============================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares $ 207,429,732 $ 277,721,719
Reinvestment of Distributions 1,065,227 1,149,703
===============================================================================================
208,494,959 278,871,422
Amounts Paid for Repurchases of Shares (218,795,963) (282,975,166)
===============================================================================================
NET DECREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS (10,301,004) (4,103,744)
NET ASSETS
Beginning of Period 50,697,380 54,801,124
===============================================================================================
End of Period $ 40,396,376 $ 50,697,380
===============================================================================================
-----------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 207,429,732 277,721,719
Shares Issued from Reinvestment of Distributions 1,065,227 1,149,703
===============================================================================================
208,494,959 278,871,422
Shares Repurchased (218,795,963) (282,975,166)
===============================================================================================
NET DECREASE IN FUND SHARES (10,301,004) (4,103,744)
===============================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
U.S. Government Money Fund
YEAR ENDED MAY 31
-----------------------------------------------------------------------------------------------
2000 1999
OPERATIONS AND DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income Earned and
Distributed to Shareholders $ 4,003,412 $ 3,853,464
===============================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares $ 612,307,863 $ 1,097,656,947
Reinvestment of Distributions 3,574,035 3,244,029
===============================================================================================
615,881,898 1,100,900,976
Amounts Paid for Repurchases of Shares (621,330,644) (1,083,310,126)
===============================================================================================
NET INCREASE (DECREASE) IN NET ASSETS FROM
FUND SHARE TRANSACTIONS (5,448,746) 17,590,850
NET ASSETS
Beginning of Period 91,509,133 73,918,283
===============================================================================================
End of Period $ 86,060,387 $ 91,509,133
===============================================================================================
---------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 612,307,863 1,097,656,947
Shares Issued from Reinvestment of Distributions 3,574,035 3,244,029
===============================================================================================
615,881,898 1,100,900,976
Shares Repurchased (621,330,644) (1,083,310,126)
===============================================================================================
NET INCREASE (DECREASE) IN FUND SHARES (5,448,746) 17,590,850
===============================================================================================
</TABLE>
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. is incorporated in Maryland and presently consists of three
separate Funds: Cash Reserves Fund, Tax-Free Money Fund and U.S. Government
Money Fund (individually the "Fund" and collectively, the "Funds"). 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. INVESCO Money Market Funds, Inc. is
registered under the Investment Company Act of 1940 (the "Act") as a
diversified, open-end management investment company.
Effective February 15, 2000, Cash Reserves Fund began offering an additional
class of shares, referred to as Class C shares. Class C shares are subject to an
annual distribution fee of 1.00% of the Fund's annual average net assets
attributable to Class C shares. Income, expenses (other than those attributable
to a specific class) and gains and losses are allocated daily to each class of
shares based on the relative proportion of net assets represented by such class.
Operating expenses directly attributable to a specific class are charged against
operations of that class.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States 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 Funds 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.
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.
<PAGE>
Of the distributions paid by Tax-Free Money Fund for the year ended May 31,
2000, 97.49% were exempt from federal income 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. Such dividends are automatically reinvested at the month-end net
asset value, unless the shareholder requests a cash payment.
G. EXPENSES -- Each Fund or Class bears expenses incurred specifically on its
behalf and, in addition, each Fund or Class bears a portion of general expenses,
based on the relative net assets of each Fund or Class.
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 the Funds, 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.
A master distribution plan and agreement pursuant to Rule 12b-1 of the Act
provides for financing the distribution and shareholder servicing of Cash
Reserves Fund - Class C Shares of 1.00% per annum of average daily net assets.
Any unreimbursed expenses INVESCO Distributors, Inc. ("IDI" or the
"Distributor"), a wholly owned subsidiary of IFG, incurs with respect to Class C
shares in any fiscal year can not be recovered in subsequent years. For the
period ended May 31, 2000, amounts paid to IDI from Cash Reserves Fund - Class C
were $7,182.
IFG receives a transfer agent fee from each Fund or Class 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. Effective June 1, 2000, each Fund or Class will pay an annual
rate of $29.50 per shareholder account, or, where applicable, per participant in
an omnibus account, per year.
In accordance with an Administrative Services Agreement, 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 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 each Fund or Class for the year/period ended May 31, 2000.
NOTE 3 -- TRANSACTIONS WITH AFFILIATES. Certain of the Funds' officers and
directors are also officers and directors of IFG. At May 31, 2000, 5.03% of
outstanding shares of Tax-Free Money Fund were held by IFG or affiliated
parties.
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 meeting attendance fees.
Pension expenses for the year ended May 31, 2000, 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,
<PAGE>
respectively, in the Statement of Assets and Liabilities were as follows:
UNFUNDED
PENSION ACCRUED PENSION
FUND EXPENSES PENSION COSTS LIABILITY
--------------------------------------------------------------------------------
Cash Reserves Fund $ 19,244 $ 31,374 $ 101,844
Tax-Free Money Fund 1,087 3,098 8,500
U.S. Government Money Fund 2,308 3,543 11,606
The independent directors have contributed to a deferred fee agreement plan,
pursuant to which they have deferred receipt of a portion of the compensation
which they would otherwise have been paid as directors of the INVESCO Funds. The
deferred amounts may be invested in the shares of any of the INVESCO Funds,
excluding the INVESCO Variable Investment Funds.
NOTE 4 -- INTERFUND BORROWING AND LENDING. Each Fund is party to an interfund
lending agreement between each Fund and other INVESCO sponsored mutual funds,
which permit it to borrow or lend cash, at rates beneficial to both the
borrowing and lending funds. Loans totaling 10% or more of a borrowing Fund's
total assets are collaterized at 102% of the value of the loan; loans of less
than 10% are unsecured. Pursuant to each Fund's prospectus, each Fund may borrow
up to 33 1/3% of its total assets for temporary or emergency purposes. During
the year ended May 31, 2000, there were no borrowings or lendings.
NOTE 5 -- CONTIGENT DEFERRED SALES CHARGE ("CDSC"). A 1.00% CDSC is charged by
Cash Reserves Fund - Class C shares on redemptions or exchanges of shares held
thirteen months or less (other than shares acquired through reinvestment of
dividends or other distributions). The CDSC is paid by the redeeming shareholder
and therefore, it is not an expense of the Fund. For the period ended May 31,
2000, the Distributor received $492 from shareholder redemptions for Cash
Reserves Fund - Class C.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
INVESCO Money Market Funds, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the statement of investment securities, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of INVESCO Cash Reserves Fund, INVESCO
Tax-Free Money Fund and INVESCO U.S. Government Money Fund (constituting INVESCO
Money Market Funds, Inc., hereafter referred to as the "Fund") at May 31, 2000,
the results of each of their operations for the year then ended, the changes in
each of their net assets for each of the two years in the period then ended and
the financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with auditing
standards generally accepted in the United States, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at May 31,
2000 by correspondence with the custodian, provide a reasonable basis for the
opinion expressed above.
PricewaterhouseCoopers LLP
Denver, Colorado
June 23, 2000
<PAGE>
FINANCIAL HIGHLIGHTS
Cash Reserves Fund-- Investor Class
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
YEAR ENDED MAY 31
-----------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
<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 0.05 0.04 0.05 0.05 0.05
===========================================================================================================
Net Asset Value -- End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===========================================================================================================
TOTAL RETURN 4.87% 4.45% 4.82% 4.69% 5.01%
RATIOS
Net Assets -- End of Period ($000 Omitted) $912,135 $814,158 $766,670 $661,648 $587,277
Ratio of Expenses to Average Net Assets(a)(b) 0.91% 0.90% 0.91% 0.86% 0.87%
Ratio of Net Investment Income to
Average Net Assets(a) 4.75% 4.36% 4.76% 4.62% 4.86%
</TABLE>
(a) Various expenses of the Class were voluntarily absorbed by IFG for the
years ended May 31, 2000, 1999, 1998, 1997 and 1996. If such expenses had
not been absorbed, ratio of expenses to average net assets would have
been 0.94%, 0.91%, 0.93%, 0.92% and 0.92%, respectively, and ratio of
net investment income to average net assets would have been 4.72%, 4.35%,
4.74%, 4.56% and 4.81%, respectively.
(b) Ratio is based on Total Expenses of the Class, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements (which
may include custodian, distribution and transfer agent fees).
<PAGE>
FINANCIAL HIGHLIGHTS
Cash Reserves Fund -- Class C
(For a Fund Share Outstanding Throughout Each Period)
PERIOD
ENDED
MAY 31
--------------------------------------------------------------------------------
2000(a)
PER SHARE DATA
Net Asset Value -- Beginning of Period $ 1.00
================================================================================
INCOME AND DISTRIBUTIONS FROM
INVESTMENT OPERATIONS
NET INVESTMENT INCOME EARNED AND
DISTRIBUTED TO SHAREHOLDERS 0.01
================================================================================
Net Asset Value -- End of Period $ 1.00
================================================================================
TOTAL RETURN(b) 1.36%(c)
RATIOS
Net Assets-- End of Period ($000 Omitted) $ 4,186
Ratio of Expenses to Average Net Assets(d) 1.54%(e)
Ratio of Net Investment Income to
Average Net Assets 4.73%(e)
(a) From February 15, 2000, since inception of Class C, to May 31, 2000.
(b) The applicable CDSC fees are not included in the Total Return calculation.
(c) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(d) Ratio is based on Total Expenses of the Class, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements (which
may include custodian, distribution and transfer agent fees).
(e) Annualized
<PAGE>
FINANCIAL HIGHLIGHTS
Tax-Free Money Fund (For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
YEAR ENDED MAY 31
-----------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
<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 2.86% 2.63% 3.03% 2.90% 3.08%
RATIOS
Net Assets -- End of Period ($000 Omitted) $ 40,396 $ 50,697 $ 54,801 $ 47,577 $ 51,649
Ratio of Expenses to Average Net Assets(a)(b) 0.87% 0.77% 0.76% 0.76% 0.77%
Ratio of Net Investment Income to
Average Net Assets(a) 2.82% 2.61% 3.01% 2.86% 3.03%
</TABLE>
(a) Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended May 31, 2000, 1999, 1998, 1997 and 1996. If such expenses had not
been absorbed, ratio of expenses to average net assets would have been
1.11%, 1.02%, 1.06%, 1.01% and 1.05%, respectively, and ratio of net
investment income to average net assets would have been 2.58%, 2.36%,
2.71%, 2.61% and 2.75%, respectively.
(b) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements
(which may include custodian, distribution and transfer agent fees).
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
U.S. Government Money Fund (For a Fund Share Outstanding Throughout Each Period)
YEAR ENDED MAY 31
-----------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
<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 0.05 0.04 0.05 0.04 0.05
===========================================================================================================
Net Asset Value -- End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===========================================================================================================
TOTAL RETURN 4.74% 4.36% 4.74% 4.57% 4.90%
RATIOS
Net Assets -- End of Period ($000 Omitted) $ 86,060 $ 91,509 $ 73,918 $ 66,451 $ 79,392
Ratio of Expenses to Average Net Assets(a)(b) 0.86% 0.86% 0.87% 0.86% 0.87%
Ratio of Net Investment Income to
Average Net Assets(a) 4.63% 4.28% 4.72% 4.51% 4.78%
</TABLE>
(a) Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended May 31, 2000, 1999, 1998, 1997 and 1996. If such expenses had not
been absorbed, ratio of expenses to average net assets would have been
1.16%, 1.08%, 1.12%, 1.06% and 1.05%, respectively, and ratio of net
investment income to average net assets would have been 4.33%, 4.06%,
4.47%, 4.31% and 4.59%, respectively.
(b) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements
(which may include custodian, distribution and transfer agent fees).
<PAGE>
INVESCO FAMILY OF FUNDS
Investor Class Newspaper
Fund Name Fund Code Ticker Symbol Abbreviation
--------------------------------------------------------------------------------
STOCK
Growth & Income 21 IVGIX Gro&Inc
Blue Chip Growth 10 FLRFX BlChpGro
Dynamics 20 FIDYX Dynm
Small Company Growth 60 FIEGX SmCoGth
INVESCO Endeavor 61 IVENX Endeavor
Value Equity 46 FSEQX ValEq
S&P 500 Index Fund 23 ISPIX S&P500
--------------------------------------------------------------------------------
BOND
U.S. Government Securities 32 FBDGX USGvt
Select Income 30 FBDSX SelInc
High Yield 31 FHYPX HiYld
Tax-Free Bond 35 FTIFX TxFreeBd
--------------------------------------------------------------------------------
COMBINATION STOCK & BOND
Equity Income 15 FIIIX EquityInc
Total Return 48 FSFLX TotRtn
Balanced 71 IMABX Bal
--------------------------------------------------------------------------------
SECTOR
Energy 50 FSTEX Enrgy
Financial Services 57 FSFSX FinSvc
Gold 51 FGLDX Gold
Health Sciences 52 FHLSX HlthSc
Leisure 53 FLISX Leisur
Real Estate Opportunity 42 IVSRX Realty
Technology 55 FTCHX Tech
Telecommunications 39 ISWCX Telecom
Utilities 58 FSTUX Util
--------------------------------------------------------------------------------
INTERNATIONAL
International Blue Chip Value 09 IIBCX ItlBlChp
Pacific Basin 54 FPBSX PcBas
European 56 FEURX Europ
Latin American Growth 34 IVSLX LtnAmerGr
--------------------------------------------------------------------------------
MONEY MARKET
U.S. Government Money 44 FUGXX InvGvtMF
Cash Reserves 25 FDSXX InvCshR
Tax-Free Money 40 FFRXX InvTaxFree
Treasurer's Money Market Reserve 96 IMRXX INVESCOMMR
Treasurer's Tax-Exempt Reserve 95 ITTXX INVESCOTTE
FOR MORE INFORMATION ABOUT ANY OF THE INVESCO FUNDS, INCLUDING MANAGEMENT FEES,
RISKS, AND EXPENSES, PLEASE VISIT OUR WEB SITE, CONSULT YOUR FINANCIAL ADVISOR,
OR CALL US AT 1-800-525-8085 FOR A PROSPECTUS. READ IT CAREFULLY BEFORE YOU
INVEST OR SEND MONEY.
<PAGE>
YOU SHOULD
KNOW WHAT
INVESCO KNOWS(R)
[INVESCO ICON] INVESCO FUNDS
We're easy to stay in touch with:
Investor Services: 1-800-525-8085
Your Personal Account Line: 1-800-424-8085
On the World Wide Web: invescofunds.com
INVESCO Distributors, Inc.,(SM) Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
This information must be preceded or accompanied
by a current prospectus.
AMF 9179 7/00
