INVESCO Diversified Funds, Inc.
INVESCO Small Company Fund
(November 30, 1994)
INVESCO Dynamics Fund, Inc.
(August 31, 1994)
INVESCO Industrial Income Fund, Inc.
(November 1, 1994, As
Supplemented November 1, 1994)
INVESCO Multiple Asset Funds, Inc.
INVESCO Multi-Asset Allocation Fund
INVESCO Balanced Fund
(November 30, 1994)
Supplement to the Prospectuses of Above Funds,
Dates of Which are Indicated in Parentheses
The fourth paragraph in the section of INVESCO Industrial Income Fund, Inc.'s
Prospectus entitled "How Shares Can Be Purchased," and the fifth paragraph in
the sections of the remaining Funds' Prospectuses entitled "How Shares Can Be
Purchased," are hereby amended to read as follows:
Orders to purchase Fund shares can be placed by telephone. Shares of the
Fund will be issued at the net asset value next determined after receipt
of telephone instructions. Generally, payments for telephone orders must
be received by the Fund within three business days or the transaction may
be cancelled. In the event of such cancellation, the purchaser will be
held responsible for any loss resulting from a decline in the value of the
shares. In order to avoid such losses, purchasers should send payments for
telephone purchases by overnight courier or bank wire. INVESCO has agreed
to indemnify the Fund for any losses resulting from the cancellation of
telephone purchases.
The date of this Supplement is June 1, 1995.
<PAGE>
PROSPECTUS
August 31, 1994
INVESCO DYNAMICS FUND, INC.
- -----------------------------------------------------------------
INVESCO DYNAMICS FUND, INC. (the "Fund") seeks to achieve its investment
objective of providing its shareholders appreciation of capital through
aggressive investment policies by investing its assets in a variety of
securities which are believed to present possibilities for capital enhancement.
The Fund normally invests primarily in common stocks but may invest in other
kinds of securities when determined appropriate by management. The Fund should
not be considered by investors seeking current income.
This Prospectus provides you with the basic information you should know
before investing in the Fund. You should read it and keep it for future
reference. A Statement of Additional Information containing further information
about the Fund has been filed with the Securities and Exchange Commission. You
can obtain a copy without charge by writing INVESCO Funds Group, Inc., P.O. Box
173706, Denver, Colorado 80217-3706; or by calling 1-800-525-8085.
<PAGE>
TABLE OF CONTENTS Page
ANNUAL FUND EXPENSES 6
FINANCIAL HIGHLIGHTS 7
PERFORMANCE DATA 8
INVESTMENT OBJECTIVE AND POLICIES 8
THE FUND AND ITS MANAGEMENT 11
HOW SHARES CAN BE PURCHASED 13
SERVICES PROVIDED BY THE FUND 15
HOW TO REDEEM SHARES 18
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS, AND TAXES 20
ADDITIONAL INFORMATION 21
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE. ----------
THE STATEMENT OF ADDITIONAL INFORMATION, DATED AUGUST 31, 1994, IS HEREBY
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
<PAGE>
ANNUAL FUND EXPENSES
The Fund is no-load; there are no fees to purchase, exchange or redeem
shares. The Fund, however, is authorized to pay a distribution fee pursuant to
Rule 12b-1 under the Investment Company Act of 1940. (See "How Shares Can Be
Purchased--Distribution Expenses.") Lower expenses benefit Fund shareholders by
increasing the Fund's total return.
Shareholder Transaction Expenses
Sales load "charge" on purchases None
Sales load "charge" on reinvested dividends None
Redemption fees None
Exchange fees None
Annual Fund Operating Expenses
as a percentage of average net assets)
Management Fee 0.60%
12b-1 Fees 0.25%
Other Expenses 0.32%
Transfer Agency Fee 0.17%
General Services, Administrative
Services, Registration,
Postage(1) 0.15%
Total Fund Operating Expenses(2) 1.17%
(1) Includes, but is not limited to, fees and expenses of directors,
custodian bank, legal counsel, auditors, a securities pricing service, costs of
administrative services furnished under an Administrative Services Agreement,
costs of registration of Fund shares under applicable laws, and costs of
printing and distributing reports to shareholders.
(2) If necessary, certain Fund expenses will be absorbed voluntarily by
the Fund's investment adviser and sub-adviser in order to ensure that the Fund's
total operating expenses will not exceed 1.21% of the Fund's average net assets.
This policy is applicable to Fund expenses incurred on or after September 1,
1994.
Example
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming (1) a 5% annual return and (2) redemption at the end
of each time period:
1 Year 3 Years 5 Years 10 Years
$12 $37 $65 $143
The purpose of the foregoing table is to assist investors in understanding
the various costs and expenses that an investor in the Fund will bear directly
or indirectly. Such expenses are paid from the Fund's assets. (See "The Fund and
Its Management.") The Fund charges no sales load, redemption fee, or exchange
fee. The Example should not be considered a representation of past or future
expenses, and actual expenses may be greater or less than those shown. The
assumed 5% annual return is hypothetical and should not be considered a
representation of past or future annual returns, which may be greater or less
than the assumed amount.
As a result of the 0.25% Rule 12b-1 fee paid by the Fund, investors who
own Fund shares for a long period of time may pay more than the economic
equivalent of the maximum front-end sales charge permitted for mutual funds by
the National Association of Securities Dealers, Inc., which currently ranges
from 6.25% to 8.5% of the amount invested.
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Fund Share Outstanding throughout each Period)
The following information has been audited by Price Waterhouse,
independent accountants. This information should be read in conjunction with the
audited financial statements and the auditor's report thereon appearing in the
Fund's 1994 Annual Report to Shareholders and in the Statement of Additional
Information, both of which are available without charge by contacting INVESCO
Funds Group, Inc. at the address or telephone number on the cover of this
Prospectus.
INVESCO Dynamics Fund, Inc.
Financial Highlights
(For a Fund Share Outstanding throughout Each Period)
<TABLE>
<CAPTION>
Year Ended April 30
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
---------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value -
Beginning of
Period $10.89 $9.57 $8.50 $7.39 $7.14 $6.65 $8.42 $8.59 $7.28 $6.87
----------------------------------------------------------------------------------------------------
INCOME FROM
INVESTMENT
OPERATIONS
Net Investment Income
(Loss) (0.02) (0.03) (0.02) 0.05 0.13 0.13 0.02 0.02 0.05 0.09
Net Gains or (Losses)
on Securities
(Both Realized
and Unrealized) 1.99 1.64 2.05 1.64 0.54 0.48 (1.30) 1.58 2.56 0.41
----------------------------------------------------------------------------------------------------
Total From Investment
Operations 1.97 1.61 2.03 1.69 0.67 0.61 (1.28) 1.60 2.61 0.50
----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.00 0.00 0.00 0.05 0.13 0.12 0.02 0.02 0.06 0.09
Distributions from
Capital Gains 2.71 0.29 0.96 0.53 0.29 0.00 0.47 1.75 1.24 0.00
----------------------------------------------------------------------------------------------------
Total
Distributions 2.71 0.29 0.96 0.58 0.42 0.12 0.49 1.77 1.30 0.09
----------------------------------------------------------------------------------------------------
Net Asset Value -
End of Period $10.15 $10.89 $9.57 $8.50 $7.39 $7.14 $6.65 $8.42 $8.59 $7.28
====================================================================================================
TOTAL RETURN 17.86% 16.80% 23.47% 23.11% 9.29% 9.20% (14.72%) 21.65% 35.93% 7.18%
RATIOS
Net Assets -
End of Period
($000 Omitted) $287,293 $231,100 $153,956 $100,860 $60,817 $89,755 $83,651 $91,042 $87,640 $73,734
Ratio of Expenses
to Average Net
Assets 1.17% 1.20% 1.18% 1.15% 0.98% 0.98% 1.02% 0.92% 0.90% 0.78%
Ratio of Net
Investment Income
(Loss) to Average
Net Assets (0.37%) (0.38%) (0.17%) 0.59% 1.47% 1.77% 0.28% 0.27% 0.63% 1.30
Portfolio Turnover
Rate 169% 144% 174% 243% 225% 237% 199% 234% 246% 152%
</TABLE>
Further information about the performance of the Fund is contained in the Fund's
annual report to shareholders, which may be obtained without charge by writing
INVESCO Funds Group, Inc., P.O. Box 172706, Denver, Colorado 80217-3706; or by
calling 1-800-525-8085.
<PAGE>
PERFORMANCE DATA
From time to time, the Fund advertises its total return performance.
Performance figures are based upon historical earnings and are not intended to
indicate future performance. The "total return" of the Fund refers to the
average annual rate of return of an investment in the Fund. This figure is
computed by calculating the percentage change in value of an investment of
$1,000, assuming reinvestment of all income dividends and capital gain
distributions, to the end of a specified period. Periods of one year, five years
and ten years are used.
Statements of the Fund's total return performance are based upon
investment results during a specified period and assume reinvestment of all
dividends and capital gains, if any, paid during that period. Thus, any given
report of total return performance should not be considered as representative of
future performance. The Fund charges no sales load, redemption fee, or exchange
fee which would affect the total return computation.
In conjunction with performance reports and/or analyses of shareholder
service for the Fund, comparative data between the Fund's performance for a
given period and recognized indices of investment results for the same period,
and/or assessments of the quality of shareholder service, may be provided to
shareholders. Such indices include indices provided by Dow Jones & Company,
Standard & Poor's, Lipper Analytical Services, Inc., Lehman Brothers, National
Association of Securities Dealers Automated Quotations, Frank Russell Company,
Value Line Investment Survey, the American Stock Exchange, Morgan Stanley
Capital International, Wilshire Associates, the Financial Times Stock Exchange,
the New York Stock Exchange, the Nikkei Stock Average and Deutcher Aktienindex,
all of which are unmanaged market indicators. In addition, rankings, ratings,
and comparisons of investment performance and/or assessments of the quality of
shareholder service appearing in publications such as Money, Forbes, Kiplinger's
Personal Finance, Morningstar, and similar sources which utilize information
compiled (i) internally; (ii) by Lipper Analytical Services, Inc.; or (iii) by
other recognized analytical
<PAGE>
services, may be used in advertising. The Lipper Analytical
Services, Inc. mutual fund rankings and comparisons which may be
used by the Fund in performance reports will be drawn from the
"Mid-Cap Funds" mutual fund grouping, in addition to the broad-
based Lipper general fund groupings.
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is to seek appreciation of capital
through aggressive investment policies. Current income is not a significant
investment consideration. The Fund seeks to achieve its objective through the
investment of its assets in a variety of securities which are believed to
present opportunities for capital enhancement. The Fund normally invests
primarily in common stocks, but may invest in convertible or straight issues of
debentures and preferred stocks, when determined appropriate by management. The
common stocks and preferred stocks purchased by the Fund are traded in the
United States on national or regional stock exchanges or on the over-the-counter
market.
One of the principal factors in the selection of portfolio securities is
management's evaluation of relatively short-term market factors believed to
affect a particular security, including current information about the company,
indicated investor interest and price movements of the security, as well as
general market and monetary conditions. Securities purchased on this basis may
be held for relatively short periods of time and consequently result in a higher
rate of portfolio turnover than that of many other mutual funds. This policy may
cause the Fund's portfolio turnover rate to exceed 200%, and would cause it to
incur greater brokerage commissions than would otherwise be the case and result
in a greater percentage of the Fund's capital gains being short-term gains. The
Fund's portfolio turnover rate is set forth under "Financial Highlights." The
Fund's portfolio turnover rate, along with the Fund's brokerage allocation
policies, are discussed in the Statement of Additional Information.
During periods of uncertain markets or economic conditions, as determined
by management, the Fund may depart from its objective of seeking capital
appreciation and invest temporarily in high quality money market instruments
(such as short-term U.S. Government obligations, certificates of deposit and
commercial paper), or in high quality (AA or above) corporate bonds in such
amounts as the investment adviser may determine appropriate for purposes of
preserving liquidity and capital.
Because prices of stocks fluctuate from day to day, the value of an
investment in the Fund will vary based upon the Fund's investment performance.
The Fund invests in many different companies in a variety of industries in order
to attempt to reduce its overall exposure to investment and market risks. There
is no assurance that the Fund's investment objective will be attained.
<PAGE>
Foreign Securities
The Fund's investments in equity securities and corporate debt obligations
may consist of investments issued by foreign issuers. Up to 25% of the Fund's
total assets, measured at the time of purchase, may be invested directly in
foreign securities. Securities of Canadian issuers and securities purchased by
means of American Depository Receipts ("ADRs") are not subject to this 25%
limitation. ADRs are receipts, typically issued by a U.S. bank or trust company,
evidencing ownership of the underlying foreign securities. ADRs are denominated
in U.S. dollars and trade in the U.S. securities markets.
For U.S. investors, the returns on foreign securities are
influenced not only by the returns on the foreign investments
themselves, but also by currency risk (i.e., changes in the value
of the currencies in which the securities are denominated relative
to the U.S. dollar). In a period when the U.S. dollar generally
rises against foreign currencies, the returns on foreign securities
for a U.S. investor are diminished. By contrast, in a period when
the U.S. dollar generally declines, the returns on foreign
securities generally are enhanced.
Other risks and considerations of international investing include the
following: differences in accounting, auditing and financial reporting standards
which may result in less publicly available information than is generally
available with respect to U.S. issuers; generally higher commission rates on
foreign portfolio transactions and longer settlement periods; the smaller
trading volumes and generally lower liquidity of foreign stock markets, which
may result in greater price volatility; foreign withholding taxes payable on the
Fund's foreign securities, which may reduce dividend income payable to
shareholders; the possibility of expropriation or confiscatory taxation; adverse
changes in investment or exchange control regulations; political instability
which could affect U.S. investment in foreign countries; potential restrictions
on the flow of international capital; and the possibility of the Fund
experiencing difficulties in pursuing legal remedies and collecting judgments.
Repurchase Agreements
The Fund may enter into repurchase agreements with respect to debt
instruments eligible for investment by the Fund. These agreements are entered
into with member banks of the Federal Reserve System, registered broker-dealers,
and registered government securities dealers, which are deemed creditworthy. A
repurchase agreement, which may be considered a "loan" under the Investment
Company Act of 1940, is a means of investing monies for a short period. In a
repurchase agreement, the Fund acquires a debt instrument (generally a security
issued by the U.S. government or an agency thereof, a banker's acceptance or a
certificate of deposit) subject to resale to the seller at an agreed upon price
and date (normally, the next business day). In the event that the
<PAGE>
original seller defaults on its obligation to repurchase the security, the Fund
could incur costs or delays in seeking to sell such security. To minimize risk,
the securities underlying each repurchase agreement will be maintained with the
Fund's custodian in an amount at least equal to the repurchase price under the
agreement (including accrued interest), and such agreements will be effected
only with parties that meet certain creditworthiness standards established by
the Fund's board of directors. Pursuant to its agreement with certain states,
the Fund will not enter into a repurchase agreement maturing in more than seven
days if as a result more than 5% of the Fund's total assets would be invested in
such repurchase agreements and other illiquid securities. The Fund has not
adopted any limit on the amount of its total assets that may be invested in
repurchase agreements maturing in seven days or less.
Illiquid Securities
In addition, the Fund is authorized to invest in securities which are
illiquid because they are subject to restrictions on their resale ("restricted
securities") or because, based upon their nature or the market for such
securities, they are not readily marketable. However, the Fund has agreed with
certain states that it will not purchase any such security if the purchase would
cause the Fund to invest more than 5% of its total assets, measured at the time
of purchase, in illiquid securities. Repurchase agreements maturing in more than
seven days will be considered illiquid for purposes of this restriction. Also,
until such time as the Fund's board of directors adopts procedures for
determining whether securities issued in offerings made pursuant to Rule 144A
under the Securities Act of 1933 should be treated as illiquid investments, all
such securities purchased under that Rule will be regarded as illiquid.
Investments in illiquid securities involve certain risks to the extent that the
Fund may be unable to dispose of such a security at the time desired or at a
reasonable price. In addition, in order to resell a restricted security, the
Fund might have to bear the expense and incur the delays associated with
effecting registration.
Securities Lending
The Fund also may lend its securities to qualified brokers, dealers,
banks, or other financial institutions. This practice permits the Fund to earn
income, which, in turn, can be invested in additional securities to pursue the
Fund's investment objective. Loans of securities by the Fund will be
collateralized by cash, letters of credit, or securities issued or guaranteed by
the U.S. government or its agencies equal to at least 100% of the current market
value of the loaned securities, determined on a daily basis. Lending securities
involves certain risks, the most significant of which is the risk that a
borrower may fail to return a portfolio security. The Fund monitors the
creditworthiness of borrowers in order to minimize such risks. The Fund will not
lend any security if, as a result of such loan, the aggregate value of
securities
<PAGE>
then on loan would exceed 33-1/3% of the Fund's net assets (taken at market
value).
Investment Restrictions
The Fund is subject to certain restrictions, which are set forth in the
Statement of Additional Information, regarding its investments which may not be
altered without the approval of the Fund's shareholders. Those restrictions
include, among others, limitations with respect to the percentages of the value
of its total assets which may be invested in any one company or in one industry.
In addition, except where indicated to the contrary, the investment objectives
and policies described in this section are fundamental and may not be changed
without a vote of the Fund's shareholders.
THE FUND AND ITS MANAGEMENT
The Fund is a no-load mutual fund, registered with the Securities and
Exchange Commission as an open-end, diversified, management investment company.
It was incorporated on April 2, 1993, under the laws of Maryland. On July 1,
1993, the Fund assumed all of the assets and liabilities of the Fund's
predecessor, Financial Dynamics Fund, Inc., which was incorporated under the
laws of Colorado on February 17, 1967. All financial and other information about
the Fund for periods prior to July 1, 1993, relates to such former fund. The
overall supervision of the Fund is the responsibility of its board of directors.
Pursuant to an agreement with the Fund, INVESCO Funds Group, Inc.
("INVESCO"), 7800 E. Union Avenue, Denver, Colorado, serves as the Fund's
investment adviser. INVESCO is primarily responsible for providing the Fund with
various administrative services, and supervising the Fund's daily business
affairs. These services are subject to review by the Fund's board of directors.
The following individual serves as the portfolio manager for the Fund and
is primarily responsible for the day-to-day management of the Fund's portfolio
of securities:
Timothy J. Miller, C.F.A. Portfolio manager of the Fund
since 1993; portfolio manager
of the Leisure Portfolio of
INVESCO Strategic Portfolios,
Inc.; vice president (1993 to
present) and portfolio manager
(1992 to present) of INVESCO
Trust Company. Formerly (1979
to 1992), analyst and portfolio
manager with Mississippi Valley
Advisors. B.S.B.A., St. Louis
University; M.B.A., University
of Missouri; Chartered
Financial Analyst.
<PAGE>
INVESCO is an indirect wholly-owned subsidiary of INVESCO PLC. INVESCO PLC
is a financial holding company which, through its subsidiaries, engages in the
business of investment management on an international basis. INVESCO was
established in 1932 and, as of April 30, 1994, managed thirteen mutual funds,
consisting of 34 separate portfolios, with combined assets of approximately $9.5
billion on behalf of over 861,000 shareholders.
Pursuant to an agreement with INVESCO, INVESCO Trust Company ("INVESCO
Trust"), 7800 E. Union Avenue, Denver, Colorado, serves as the Fund's
sub-adviser. INVESCO Trust, a trust company founded in 1969, is a wholly-owned
subsidiary of INVESCO that served as adviser or sub-adviser to 31 investment
portfolios as of April 30, 1994, including 25 portfolios in the INVESCO group.
These 31 portfolios had aggregate assets of approximately $9.3 billion as of
April 30, 1994. In addition, INVESCO trust provides investment management
services to private clients, including employee benefit plans that may be
invested in a collective trust sponsored by INVESCO Trust. INVESCO Trust,
subject to the supervision of INVESCO, is primarily responsible for selecting
and managing the Fund's investments. Although the Fund is not a party to the
sub- advisory agreement, the agreement has been approved by the shareholders of
the Fund.
The Fund pays INVESCO a monthly fee which is based upon a percentage of
the Fund's average net assets determined daily. The fee is computed at the
annual rate of 0.60% of the first $350 million of the Fund's average net assets;
0.55% of the next $350 million of the Fund's average net assets; and 0.50% of
the Fund's average net assets in excess of $700 million. For the fiscal year
ended April 30, 1994, investment advisory fees paid by the Fund amounted to
0.60% of the Fund's average net assets. Out of its advisory fee which it
receives from the Fund, INVESCO pays INVESCO Trust, as the Fund's sub-adviser, a
monthly fee, which is computed at the annual rate of 0.25% of the Fund's average
net assets up to $200 million, and 0.20% of the Fund's average net assets in
excess of $200 million. No fee is paid by the Fund to INVESCO Trust.
The Fund also has entered into an Administrative Services Agreement dated
April 30, 1993 (the "Administrative Agreement"), with INVESCO. Pursuant to the
Administrative Agreement, INVESCO performs certain administrative, recordkeeping
and internal sub-accounting services, including without limitation, maintaining
general ledger and capital stock accounts, preparing a daily trial balance,
calculating net asset value daily, providing selected general ledger reports and
providing sub-accounting and recordkeeping services for shareholder accounts
maintained by certain retirement and employee benefit plans for the benefit of
participants in such plans. For such services, the Fund pays INVESCO a fee
consisting of a base fee of $10,000 per year, plus an additional incremental fee
computed at the annual rate of 0.015% per year of the average net assets of the
Fund. INVESCO also is paid a fee by the Fund for providing transfer agent
services. See "Additional Information."
<PAGE>
The Fund's expenses, which are accrued daily, are deducted from total
income before dividends are paid. Total expenses of the Fund for the fiscal year
ended April 30, 1994, including investment advisory fees (but excluding
brokerage commissions, which are a cost of acquiring securities), amounted to
1.17% of the Fund's average net assets.
INVESCO, as the Fund's investment adviser, or INVESCO Trust, as the Fund's
sub-adviser, places orders for the purchase and sale of portfolio securities
with brokers and dealers based upon INVESCO's evaluation of their financial
responsibility coupled with their ability to effect transactions at the best
available prices. The Fund may market its shares through intermediary brokers or
dealers that have entered into Dealer Agreements with INVESCO, as the Fund's
Distributor, under which such intermediary brokers or dealers generally are
compensated through the payment of continuing quarterly fees at the annual rate
of up to 0.25% of the average aggregate net asset value of outstanding Fund
shares sold by such entities, measured on each business day during a calendar
quarter. The Fund may place orders for portfolio transactions with qualified
broker/dealers which recommend the Fund, or sell shares of the Fund, to clients,
or act as agent in the purchase of Fund shares for clients, if management of the
Fund believes that the quality of the transaction and commission are comparable
to those available from other qualified brokerage firms.
HOW SHARES CAN BE PURCHASED
The Fund's shares are sold on a continuous basis by INVESCO, as the Fund's
Distributor, at the net asset value per share next calculated after receipt of a
purchase order. No sales charge is imposed upon the sale of shares of the Fund.
To purchase shares of the Fund, send a check made payable to INVESCO Funds
Group, Inc., together with a completed application form, to:
INVESCO FUNDS GROUP, INC.
Post Office Box 173706
Denver, Colorado 80217-3706
Purchase orders must specify the Fund in which the investment is to be
made.
The minimum initial purchase must be at least $1,000, with subsequent
investments of not less than $50, except that: (1) those shareholders
establishing an EasiVest or direct payroll purchase account, as described below
in the Prospectus section entitled "Services Provided by the Fund," may open an
account without making any initial investment if they agree to make regular,
minimum purchases of at least $50; (2) Fund management may permit a lesser
amount to be invested in the Fund under a federal income tax-sheltered
retirement plan (other than an IRA Account), or under a group investment plan
qualifying as a sophisticated investor; (3) those shareholders investing in an
Individual Retirement Account (IRA), or through omnibus accounts where
individual shareholder
<PAGE>
recordkeeping and sub-accounting are not required, may make initial minimum
purchases of $250; and (4) Fund management reserves the right to reduce or waive
the minimum purchase requirements in its sole discretion where it determines
such action is in the best interests of the Fund. The minimum initial purchase
requirement of $1,000, as described above, does not apply to shareholder
account(s) in any of the INVESCO funds opened prior to January 1, 1993, and,
thus, is not a minimum balance requirement for those existing accounts. However,
for shareholders already having accounts in any of the INVESCO funds, all
initial share purchases in a new Fund account, including those made using the
exchange privilege, must meet the Fund's applicable minimum investment
requirement.
The purchase of shares can be expedited by placing bank wire, overnight
courier, or telephone orders. Overnight courier orders must meet the above
minimum investment requirements. In no case can a bank wire order or a telephone
order be in an amount less than $1,000. For further information, the purchaser
may call the Fund's office by using the telephone number on the cover of this
Prospectus. Orders sent by overnight courier, including Express Mail, should be
sent to the street address, not Post Office Box, of INVESCO Funds Group, Inc. at
7800 E. Union Avenue, Suite 800, Denver, Colorado 80237.
Orders to purchase Fund shares can be placed by telephone. Shares of the
Fund will be issued at the net asset value next determined after receipt of
telephone instructions. Payments for telephone orders must be received by the
Fund within seven business days or the transaction will be cancelled. In the
event of such cancellation, the purchaser will be held responsible for any loss
resulting from a decline in the value of the shares. INVESCO has agreed to
indemnify the Fund for any losses resulting from such cancellations.
If your check does not clear, or if a telephone purchase must be cancelled
due to nonpayment, you will be responsible for any related loss the Fund or
INVESCO incurs. If you are already a shareholder in the INVESCO funds, the Fund
has the option to redeem shares from any identically registered account in the
Fund or any other INVESCO fund as reimbursement for any loss incurred. You also
may be prohibited or restricted from making future purchases in any of the
INVESCO funds.
Persons who invest in the Fund through a securities broker may be charged
a commission or transaction fee for the handling of the transaction, if the
broker so elects. Any investor may deal directly with the Fund in any
transaction. In that event, there is no such charge.
The Fund reserves the right in its sole discretion to reject any order for
purchase of its shares (including purchases by exchange) when, in the judgment
of management, such rejection is in the best interest of the Fund.
<PAGE>
Net asset value per share of the Fund is computed once each day that the
New York Stock Exchange is open as of the close of trading on that Exchange
(presently 4:00 p.m., New York time) and also may be computed on other days
under certain circumstances. Net asset value per share is calculated by dividing
the market value of all of the Fund's securities plus the value of its other
assets (including dividends and interest accrued but not collected), less all
liabilities (including accrued expenses), by the number of outstanding shares of
the Fund. If market quotations are not readily available, a security or other
asset will be valued at fair value as determined in good faith by the board of
directors. Debt securities with remaining maturities of 60 days or less will be
valued at amortized cost, absent unusual circumstances, so long as the Fund's
board of directors believes that such value represents fair value.
Distribution Expenses. The Fund is authorized under a Plan and Agreement
of Distribution pursuant to Rule 12b-1 under the Investment Company Act of 1940
(the "Plan") to use its assets to finance certain activities relating to the
distribution of its shares to investors. Under the Plan, which was implemented
on November 1, 1990, monthly payments may be made by the Fund to INVESCO to
reimburse it for particular expenditures incurred by INVESCO during the rolling
12-month period in which that month falls in connection with the distribution of
the Fund's shares to investors. These expenditures may include the payment of
compensation (including incentive compensation and/or continuing compensation
based on the amount of customer assets maintained in the Fund) to securities
dealers and other financial institutions and organizations to obtain various
distribution-related and/or administrative services for the Fund. Such services
may include, among other things, processing new shareholder account
applications, preparing and transmitting to the Fund's Transfer Agent
computer-processable tapes of all transactions by customers, and serving as the
primary source of information to customers in answering questions concerning the
Fund, and their transactions with the Fund.
In addition, other reimbursable expenditures include those incurred for
advertising, the preparation and distribution of sales literature, the cost of
printing and distributing prospectuses to prospective investors, and such other
services and promotional activities as may from time to time be agreed upon by
the Fund and its board of directors, including public relations efforts and
marketing programs to communicate with investors and prospective investors.
Under the Plan, the Fund's reimbursement to INVESCO is limited to an
amount computed at an annual rate of 0.25 of 1% of the Fund's average net assets
during the month. INVESCO is not entitled to reimbursement for overhead expenses
under the Plan, but may be reimbursed for all or a portion of the compensation
paid for salaries and other employee benefits for the personnel of INVESCO whose
primary responsibilities involve marketing shares of the
<PAGE>
INVESCO funds, including the Fund. Payment amounts by the Fund under the Plan,
for any month, may only be made to reimburse or pay expenditures incurred during
the rolling 12-month period in which that month falls; therefore, any
reimbursable expenses incurred by INVESCO in excess of the limitation described
above are not reimbursable and will be borne by INVESCO. No further payments
will be made by the Fund under the Plan in the event of its termination. Also,
any payments made by the Fund may not be used to finance the distribution of
shares of any other mutual fund advised by INVESCO. Payments made by the Fund
under the Plan for compensation of marketing personnel, as noted above, are
based on an allocation formula designed to ensure that all such payments are
appropriate.
SERVICES PROVIDED BY THE FUND
Shareholder Accounts. INVESCO maintains a share account that reflects the
current holdings of each shareholder. Share certificates will be issued only
upon specific request. Since certificates must be carefully safeguarded, and
must be surrendered in order to exchange or redeem Fund shares, most
shareholders do not request share certificates in order to facilitate such
transactions. Each shareholder is sent a detailed confirmation of each
transaction in shares of the Fund. Shareholders whose only transactions are
through the EasiVest, direct payroll purchase, automatic monthly exchange or
periodic withdrawal programs, or are reinvestments of dividends or capital gains
in the same or another Fund, will receive confirmations of those transactions on
their quarterly statements. These programs are discussed below. For information
regarding a shareholder's account and transactions, the shareholder may call the
Fund's office by using the telephone number on the cover of this Prospectus.
Reinvestment of Distributions. Income dividends and capital gain
distributions are automatically reinvested in additional shares of the Fund at
the net asset value per share in effect on the record date. A shareholder may,
however, elect to reinvest dividends and capital gain distributions in certain
of the other no-load mutual funds advised and distributed by INVESCO, or to
receive payment of all dividends and distributions in excess of $10.00 by check
by giving written notice to INVESCO at least two weeks prior to the record date
on which the change is to take effect. Further information concerning these
options can be obtained by contacting INVESCO.
Periodic Withdrawal Plan. A Periodic Withdrawal Plan is available to
shareholders who own or purchase shares of any mutual funds advised by INVESCO
having a total value of $10,000 or more; provided, however, that at the time the
Plan is established, the shareholder owns shares having a value of at least
$5,000 in the fund from which the withdrawals will be made. Under the Periodic
Withdrawal Plan, INVESCO, as agent, will make specified monthly or quarterly
payments of any amount selected (minimum payment of $100) to the party
designated by the shareholder. Notice of all changes
<PAGE>
concerning the Periodic Withdrawal Plan must be received by INVESCO at least two
weeks prior to the next scheduled check. Further information regarding the
Periodic Withdrawal Plan and its requirements and tax consequences can be
obtained by contacting INVESCO.
Exchange Privilege. Shares of the Fund may be exchanged for shares of any
of the following other no-load mutual funds, which are also advised and
distributed by INVESCO, on the basis of their respective net asset values at the
time of the exchange: INVESCO Diversified Funds, Inc., INVESCO Emerging Growth
Fund, Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO
Industrial Income Fund, Inc., INVESCO International Funds, Inc., INVESCO Money
Market Funds, Inc., INVESCO Multiple Asset Funds, Inc., INVESCO Strategic
Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc., and INVESCO Value Trust.
An exchange involves the redemption of shares in the Fund and investment
of the redemption proceeds in shares of one of the funds listed above.
Redemption will be made at the net asset value per share next determined after
receipt of an exchange request in proper order. Shares of the fund to be
acquired will be purchased when the proceeds from redemption become available
(normally on the day the request is received but under certain circumstances,
where Fund management considers a delay to be necessary to avoid an adverse
effect on the redeeming fund, up to seven days thereafter) at the net asset
value of those shares next determined after acceptance of the purchase order by
that fund in accordance with that fund's customary policy for accepting
investments. Any gain or loss realized on an exchange is recognizable for
federal income tax purposes by the shareholder. Exchange requests may be made
either by telephone or by written request to INVESCO Funds Group, Inc., using
the telephone number or address on the cover of this Prospectus. Exchanges made
by telephone must be in an amount of at least $250, if the exchange is being
made into an existing account of one of the INVESCO funds. All exchanges that
establish a new account must meet the Fund's applicable minimum initial
investment requirements. Written exchange requests into an existing account have
no minimum requirements other than the Fund's applicable minimum subsequent
investment requirements.
The privilege of exchanging Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing the new account
Application, a Telephone Transaction Authorization Form or otherwise utilizing
telephone exchange privileges, the investor has agreed that the Fund will not be
liable for following instructions communicated by telephone that it reasonably
believes to be genuine. The Fund employs procedures, which it believes are
reasonable, designed to confirm that exchange instructions are genuine. These
may include recording telephone instructions and providing written confirmations
of exchange transactions. As a result of this policy, the investor may bear the
risk of any loss due to unauthorized or fraudulent
<PAGE>
instructions; provided, however, that if the Fund fails to follow these or other
reasonable procedures, the Fund may be liable.
In order to prevent abuse of this privilege to the disadvantage of other
shareholders, the Fund reserves the right to terminate the exchange privilege of
any shareholder who requests more than four exchanges a year. The Fund will
determine whether to do so based on a consideration of both the number of
exchanges any particular shareholder or group of shareholders has requested and
the time period over which those exchange requests have been made, together with
the level of expense to the Fund which will result from effecting additional
exchange requests. The exchange privilege also may be modified or terminated at
any time. Except for those limited instances where redemptions of the exchanged
security are suspended under Section 22(e) of the Investment Company Act of
1940, or where sales of the fund into which the shareholder is exchanging are
temporarily stopped, notice of all such modifications or termination of the
exchange privilege will be given at least 60 days prior to the date of
termination or the effective date of the modification.
Before making an exchange, the shareholder should review the prospectuses
of the funds involved and consider their differences, and should be aware that
the exchange privilege may only be available in those states where exchanges may
be legally made, which will require that the shares being acquired are
registered for sale in the shareholder's state of residence. Shareholders
interested in exercising the exchange privilege may contact INVESCO for
information concerning their particular exchanges.
Automatic Monthly Exchange. Shareholders who have accounts in any one or
more of the mutual funds distributed by INVESCO may arrange for a fixed dollar
amount of their fund shares to be automatically exchanged for shares of any
other INVESCO mutual fund listed under "Exchange Privilege" on a monthly basis.
The minimum monthly exchange in this program is $50.00. This automatic exchange
program can be changed by the shareholder at any time by notifying INVESCO at
least two weeks prior to the date the change is to be made. Further information
regarding this service can be obtained by contacting INVESCO.
EasiVest. For shareholders who want to maintain a schedule of monthly
investments, EasiVest uses various methods to draw a preauthorized amount from
the shareholder's bank account to purchase Fund shares. This automatic
investment program can be changed by the shareholder at any time by writing to
INVESCO at least two weeks prior to the date the change is to be made. Further
information regarding this service can be obtained by contacting INVESCO.
Direct Payroll Purchase. Shareholders may elect to have their
employers make automatic purchases of Fund shares for them by
deducting a specified amount from their regular paychecks. This
automatic investment program can be modified or terminated at any
<PAGE>
time by the shareholder by notifying the employer. Further
information regarding this service can be obtained by contacting
INVESCO.
Tax-Sheltered Retirement Plans. Shares of the Fund may be purchased for
self-employed retirement plans, individual retirement accounts (IRAs),
simplified employee pension plans, and corporate retirement plans. In addition,
shares can be used to fund tax qualified plans established under Section 403(b)
of the Internal Revenue Code by educational institutions, including public
school systems and private schools, and certain kinds of non-profit
organizations, which provide deferred compensation arrangements for their
employees.
Prototype forms for the establishment of these various plans, including,
where applicable, disclosure statements required by the Internal Revenue
Service, are available from INVESCO. INVESCO Trust Company, a subsidiary of
INVESCO, is qualified to serve as trustee or custodian under these plans and
provides the required services at competitive rates. Retirement plans (other
than IRAs) receive monthly statements reflecting all transactions in their Fund
accounts. IRAs receive the confirmations and quarterly statements described
under "Shareholder Accounts." For complete information, including prototype
forms and service charges, call INVESCO at the telephone number listed on the
cover of this Prospectus or send a written request to: Retirement Services,
INVESCO Funds Group, Inc., Post Office Box 173706, Denver, Colorado 80217-3706.
HOW TO REDEEM SHARES
Shares of the Fund may be redeemed at any time at their current net asset
value per share next determined after a request in proper form is received at
the Fund's office. (See "How Shares Can Be Purchased.") Net asset value per
share at the time of the redemption may be more or less than the price you paid
to purchase your shares, depending primarily upon the Fund's investment
performance.
If the shares to be redeemed are represented by stock certificates, a
written request for redemption signed by the registered shareholder(s) and the
certificates must be forwarded to INVESCO Funds Group, Inc., Post Office Box
173706, Denver, Colorado 80217-3706. Redemption requests sent by overnight
courier, including Express Mail, should be sent to the street address, not Post
Office Box, of INVESCO Funds Group, Inc. at 7800 E. Union Avenue, Suite 800,
Denver, CO 80237. If no certificates have been issued, a written redemption
request signed by each registered owner of the account may be submitted to
INVESCO at the address noted above. If shares are held in the name of a
corporation, additional documentation may be necessary. Call or write for
specifics. If payment for the redeemed shares is to be made to someone other
than the registered owner(s), the signature(s) must be guaranteed by a financial
institution which qualifies as an
<PAGE>
eligible guarantor institution. Redemption procedures with respect to accounts
registered in the names of broker/dealers may differ from those applicable to
other shareholders.
Be careful to specify the account from which the redemption is to be made.
Shareholders have a separate account for each fund in which they invest.
Payments of redemption proceeds will be mailed within seven days following
receipt of the required documents. However, payment may be postponed under
unusual circumstances, such as when normal trading is not taking place on the
New York Stock Exchange, an emergency as defined by the Securities and Exchange
Commission exists, or the shares to be redeemed were purchased by check and that
check has not yet cleared; provided, however, that all redemption proceeds will
be paid out promptly upon clearance of the purchase check (which may take up to
15 days).
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Fund reserves the right to effect the involuntary redemption of all
shares in such account, in which case the account would be liquidated and the
proceeds forwarded to the shareholder. Prior to any such redemption, a
shareholder will be notified and given 60 days to increase the value of the
account to $250 or more.
Fund shareholders (other than shareholders holding Fund shares in accounts
of IRA plans) may request expedited redemption of shares having a minimum value
of $250 (or redemption of all shares if their value is less than $250) held in
accounts maintained in their name by telephoning redemption instructions to
INVESCO, using the telephone number on the cover of this Prospectus. The
redemption proceeds, at the shareholder's option, either will be mailed to the
address listed for the shareholder's Fund account, or wired (minimum of $1,000)
or mailed to the bank which the shareholder has designated to receive the
proceeds of telephone redemptions. The Fund charges no fee for effecting such
telephone redemptions. Unless the Fund's management permits a larger redemption
request to be placed by telephone, a shareholder may not place a redemption
request by telephone in excess of $25,000. These telephone redemption privileges
may be modified or terminated in the future at the discretion of the Fund's
management.
For INVESCO Trust Company-sponsored federal income tax-sheltered
retirement plans, the term "shareholders" is defined to mean plan trustees that
file a written request to be able to redeem Fund shares by telephone.
Shareholders should understand that while the Fund will attempt to process all
telephone redemption requests on an expedited basis, there may be times,
particularly in periods of severe economic or market disruption, when (a) they
may encounter difficulty in placing a telephone redemption request, and (b)
processing telephone redemptions may require up to seven days following receipt
of the telephone redemption request, or
<PAGE>
additional time because of postponements resulting from the unusual
circumstances set forth above.
The privilege of redeeming Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing a new account
Application, a Telephone Redemption Authorization Form or otherwise utilizing
telephone redemption privileges, the shareholder has agreed that the Fund will
not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine. The Fund employs procedures, which it
believes are reasonable, designed to confirm that telephone instructions are
genuine. These may include recording telephone instructions and providing
written confirmation of transactions initiated by telephone. As a result of this
policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions; provided, however, that if the Fund fails to follow
these or other reasonable procedures, the Fund may be liable.
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS, AND TAXES
Dividends. In addition to any increase in the value of your shares which
may occur from increases in the values of the Fund's investments, the Fund may
earn income in the form of dividends and interest on its investments. The Fund's
policy is to distribute substantially all of this income, less expenses, to
shareholders on an annual or semiannual basis at the discretion of the Fund's
board of directors. Dividends are automatically reinvested in additional Fund
shares at the net asset value on the ex-dividend date, unless otherwise
requested. See "Services Provided by the Fund--Reinvestment of Distributions."
Capital Gains. Capital gains or losses are the result of the Fund's sale
of its portfolio securities at prices that are higher or lower than the prices
paid by the Fund to purchase such securities. Total gains from such sales, less
any losses from such sales (including losses carried forward from prior years)
represent net realized capital gains. The Fund distributes its net realized
capital gains, if any, to shareholders at least annually, usually in December.
Capital gain distributions are automatically reinvested in additional shares of
the Fund at the net asset value per share on the ex-dividend date, unless
otherwise requested. See "Services Provided by the Fund--Reinvestment of
Distributions."
Taxes. The Fund intends to distribute substantially all of its net
investment income and capital gains, if any, to shareholders, and to qualify for
tax treatment under Subchapter M of the Internal Revenue Code as a regulated
investment company. Thus, it is not expected that the Fund will be required to
pay any federal income taxes. Shareholders (other than those exempt from income
tax) normally will have to pay federal income taxes and any state and local
income taxes on the dividends and distributions they receive from the Fund,
whether such dividends and distributions are received in cash or reinvested in
additional
<PAGE>
shares of the same or another fund. Shareholders of the Fund are advised to
consult their own tax advisers with respect to these matters.
Dividends paid by the Fund from net investment income, as well as
distributions of net realized capital gains are, for federal income tax
purposes, taxable as ordinary income to shareholders. At the end of each
calendar year, shareholders are sent full information on dividends and capital
gain distributions, including information as to the portions taxable as ordinary
income and long-term capital gains, and the amount of dividends eligible for the
dividends-received deduction available for corporations. During the fiscal year
ended April 30, 1994, 1.99% of the dividends declared by the Fund qualified for
the dividends-received corporate deduction.
The Fund is required to withhold and remit to the U.S. Treasury 31% of
dividend payments, capital gain distributions, and redemption proceeds for any
account on which the owner provides an incorrect taxpayer identification number,
no number, or no certified number for a new account.
ADDITIONAL INFORMATION
Voting Rights. All shares of the Fund have equal voting rights based on
one vote for each share owned. The Fund is not generally required and does not
expect to hold regular annual meetings of shareholders; however, the board of
directors will call special meetings of shareholders for the purpose, among
other reasons, of voting upon the question of removal of a director or directors
when requested to do so in writing by the holders of 10% or more of the
outstanding shares of the Fund or as may be required by applicable law or the
Fund's Articles of Incorporation. The Fund will assist shareholders in
communicating with other shareholders as required by the Investment Company Act
of 1940. Directors may be removed by action of the holders of a majority or more
of the outstanding shares of the Fund.
Shareholder Inquiries. All inquiries regarding the Fund should be directed
to the Fund at the telephone number or mailing address set forth on the cover
page of this Prospectus.
Transfer and Dividend Disbursing Agent. INVESCO Funds Group, Inc., 7800 E.
Union Avenue, Denver, Colorado 80237, acts as registrar, transfer agent, and
dividend disbursing agent for the Fund pursuant to a Transfer Agency Agreement
which provides that the Fund will pay a fee of $14.00 per shareholder account or
omnibus account participant per year. The transfer agency fee is not charged to
each shareholder's or participant's account, but is an expense of the Fund to be
paid from the Fund's assets. In addition, registered broker-dealers, third party
administrators of tax-qualified retirement plans and other entities may provide
sub- transfer agency services to the Fund which reduce or eliminate the need for
identical services to be provided on behalf of the Fund by
<PAGE>
INVESCO. In such cases, INVESCO is authorized to pay the third party an annual
sub-transfer agency fee of up to $14.00 per participant in the third party's
omnibus account out of the transfer agency fee which is paid to INVESCO by the
Fund.
<PAGE>
INVESCO DYNAMICS FUND, INC.
A No-load mutual fund seeking
capital appreciation through
aggressive investment policies.
PROSPECTUS
August 31, 1994
To receive general information and prospectuses on any of INVESCO funds or
retirement plans, or to obtain current account or price information, call
toll-free:
1-800-525-8085
To reach PAL, your 24-hour Personal Account Line (PAL) call:
1-800-424-8085
Or write to:
INVESCO Funds Group, Inc., Distributor
7800 E. Union Avenue, Suite 800
Post Office Box 173706
Denver, Colorado 80217-3706
If you're in Denver, visit one of our convenient Investor Centers:
Cherry Creek
155-B Fillmore Street
Denver Tech Center
7800 East Union Avenue
Lobby Level
